DOJ Deflects Calls for More Foreign Agents Act Transparency

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By Kenneth P. Doyle

The Department of Justice largely has turned aside calls for greater transparency of its advice on whether U.S. lobbyists for foreign interests are covered by the Foreign Agents Registration Act (FARA), an 80-year-old law aimed at letting the public know about foreign influence on U.S. politics.

The department recently posted online brief summaries of three past advisory opinions issued under the foreign agents’ law, a DOJ spokeswoman told Bloomberg BNA May 10. The department has indicated no plans for further action on the matter despite calls from watchdog groups and the DOJ’s own inspector general to consider making all FARA advisory opinions public.

The summarized advisory opinions, issued to unnamed recipients, point out the need to register under FARA for lobbying on behalf of a local jurisdiction of a foreign government or a foreign tourist agency. One of the advisories points out that legal representation of a foreign government in a lawsuit doesn’t require FARA registration, unless lobbying is also involved.

Meanwhile, other, more complex questions about who must register under the law have increased. High-profile advocates, including retired Lt. Gen. Michael Flynn, President Donald Trump’s former national security adviser, recently filed disclosures under FARA revealing past work for foreign governments or political parties.

Flynn filed a registration in March revealing his work last year as a foreign agent representing the interests of the government of Turkey, resulting in payments of more than $500,000. According to news reports, Flynn may be under investigation by the DOJ for failing to comply earlier with the foreign agents law, as well as for possible contacts with Russia.

Ukraine Advocacy Disclosed Late Under FARA

Flynn’s consulting firm, Flynn Intel Group, had registered last year under the Lobbying Disclosure Act (LDA) regarding its advocacy work but said at that time that it was working for a private company based in the Netherlands, called Inovo BV, not the Turkish government.

Registration under the LDA can be used to preclude the requirement to register under FARA. Lobbyists frequently opt to register under the lobbying law, rather than FARA, if legally permitted, because of the LDA’s less onerous disclosure requirements.

In addition, two major Washington, D.C., consulting firms, the Podesta Group Inc. and Mercury Public Affairs LLC, filed FARA registrations last month regarding work they did in 2012 related to Ukraine. The registrations followed news reports in recent months that the Ukraine advocacy work was arranged by another former Trump adviser, Paul Manafort, and that the arrangement may have been intended to avoid revealing the involvement of a pro-Russia Ukrainian political party, which was seeking to improve its image with U.S. officials.

The Podesta Group is headed by Tony Podesta, a veteran Democratic lobbyist who is the brother of John Podesta, Hillary Clinton’s presidential campaign manager. The Mercury Public Affairs Washington office is headed by former Rep. Vin Weber (R-Minn.), a veteran Republican lobbyist. The two firms reported being paid more that $1 million each for their Ukraine-related work.

Grassley Pressed DOJ on Registrations

Like Flynn’s firm, Podesta Group and Mercury Public Affairs had filed registrations under the LDA for the same work they later disclosed under FARA. The filings under the lobbying law said the firms were working for a Brussels-based nonprofit called the European Centre for a Modern Ukraine (ECFMU), which provided assurances that it wasn’t controlled or funded by a foreign government or political party.

Manafort was Trump’s campaign manager but resigned under a cloud last summer after the first reports about his involvement in advocacy efforts related to Ukraine’s former President Viktor Yanukovych, who favored close ties with Russia. Yanukovych was forced out of office in 2014 by street protests. Afterwards, Russia backed an armed uprising in eastern Ukraine and then annexed Crimea.

Manafort hasn’t registered separately as a foreign agent for the Ukraine-related work, but he was listed in the new FARA disclosure documents filed by Mercury Public Affairs as participating in meetings along with Weber. The two met in 2012 and 2013 with Rep. Dana Rohrabacher (R-Calif.), former Rep. Jim Kolbe (R-Ariz.) and others, the disclosure said.

The Justice Department hasn’t said publicly whether it provided advice to Flynn, the Podesta Group, or Mercury regarding their obligations to register under FARA.

Senate Judiciary Committee Chairman Charles Grassley (R-Iowa), who has criticized the DOJ for failing to aggressively enforce the foreign agents law, wrote to DOJ last month, citing the reports about Ukraine-related advocacy work by Manafort, his business associate, Rick Gates, and the two firms, Podesta Group and Mercury Public Affairs. Grassley asked the DOJ whether this work was required to be disclosed under FARA and whether DOJ’s FARA office had sent letters of inquiry or provided advisory opinions on the matter.

‘Constructive Consultation’

A spokesman for Grassley couldn’t be reached for comment about the DOJ’s response to the senator’s letter, but the FARA registrations by the Podesta Group and Mercury Public Affairs were filed shortly after the letter was sent to the department.

David Marin, a managing principal at the Podesta Group, told Bloomberg BNA in a May 10 email that the firm originally had registered under the LDA because its client, the European Centre for a Modern Ukraine, certified that it was not controlled or funded by a foreign government or party. “Years have passed since we ended our relationship with the Centre, but information brought to light in recent months prompted us to review our original registration determination,” Marin said. “We believe the LDA registration was appropriate for our particular work on the Centre’s behalf. However, we also understand after constructive consultation with FARA Unit staff that their position, which is based on all the information available to them, is that the overall representation is now better classified as a FARA registration.”

The Podesta Group “reclassified its previous LDA registration for the Centre to a FARA registration,” Marin said. The firm routinely has filed FARA registrations for other clients and would not hesitate to so in the future to “underscore our commitment to transparency,” he added.

“We appreciate the FARA Unit staff’s assistance in this matter,” Marin said.

Public Pressure

Grassley and other DOJ critics have said for years that FARA disclosure requirements aren’t being adequately enforced by the DOJ and that the only real pressure to comply with the law is the public attention drawn when foreign advocacy is revealed in news reports.

The DOJ inspector general’s report issued last year included 14 specific recommendations for improving enforcement of the foreign agents law, led by the call to make FARA advisory opinions public in order to help inform advocates when they’re required to register under FARA.

Although that recommendation has now been closed, according to DOJ, other inspector general recommendations still being considered include a call to develop a “comprehensive strategy for enforcement and administration of FARA.”

Another recommendation calls for a formal assessment of the exemption from FARA disclosure for those who register under the LDA. The inspector general’s report said DOJ had agreed to perform a study of the LDA waiver and other exemptions from FARA disclosure and that a determination of the need for and viability of possible legislative changes would be made by June 30.

Watchdogs Call for Action

Outside watchdog groups have made similar calls for FARA improvements for years, arguing that both the Justice Department and Congress could make changes to provide more information about foreign influence but haven’t.

Written testimony submitted last month to the House Appropriations Committee by representatives of several nonprofit groups cited findings by the DOJ’s inspector general that the rate of compliance with FARA is “unacceptable.” Disclosure documents routinely are submitted late and some lobbyists for foreign interests simply stop their submission of required documentation entirely.

The watchdog groups noted that the inspector general found that:

  •  62 percent of new FARA registrants from 2013-2015 filed their registration documents late;
  •  50 percent of registrants failed to file in a timely manner their supplemental statements describing their activities, as required every six months;
  •  61 percent of informational materials reviewed were not filed on time; and
  •  47 percent did not include the required disclosure statement indicating the materials were distributed on behalf of a foreign client.

‘Left in the Dark’

“What these numbers show is that the system clearly isn’t working,” the watchdog group said. “As a result, the public is left in the dark about how U.S. policies are being influenced.”

One of those submitting the testimony, Lydia Dennett at the nonprofit Project On Government Oversight, told Bloomberg BNA in a phone interview that the main problem with FARA compliance is that the DOJ lacks appropriate enforcement tools, such as the ability to assess fines, in order to ensure compliance with the law.

Department officials are faced with the difficult task of having to file a criminal case and prove corrupt intent in order to enforce the law. Instead, they usually opt for trying to achieve “voluntary compliance” with the law, Dennett said.

The DOJ has brought only seven criminal FARA cases in the last 50 years, according to the DOJ’s inspector general. The department also has the ability to seek injunctive relief to achieve compliance with the law but hasn’t done so since 1991.

Daniel Schuman of the nonprofit Demand Progress said in a separate phone interview that the FARA office, which is focused on public disclosure, is a “red-haired stepchild” in the DOJ’s National Security Division, which is mainly focused on secret counter-intelligence and counterterrorism work and on dealing with other high-profile threats to American security.

The FARA office is short of staff and other resources and hasn’t made simple changes that could be made to improve the usability of the data that it does collect, Schuman said, attributing the problems to bureaucratic inertia and lack of sustained interest from Congress.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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