Full disclosures: In the wake of the Mueller investigation, law firms are making sure they comply with the Foreign Agents Registration Act
Washington, D.C.-based Akin Gump Strauss Hauer & Feld was among the top-earning registrants overall, with total payments since 2017 of $16.5 million from clients including the United Arab Emirates, Japan and Canada. Among other law firms, Squire Patton Boggs received $5.8 million from clients including Croatia, China and Saudi Arabia, while DLA Piper took in $4.7 million from the governments of Timor-Leste and Bahrain, among others.
“It’s an indication of how this [lobbying] industry is booming right now,” says Ben Freeman, director of the Foreign Influence Transparency Initiative at the nonprofit Center for International Policy in Washington, D.C. As such, it’s all the more imperative for lobbyists and law firms to disclose the work they’re doing for foreign clients, he argues.
But lawyers who specialize in lobbying and FARA-related compliance—and even transparency advocates such as Freeman—fault the statute as broadly written and imprecise, raising questions about exactly what activities trigger registration.
“The [FARA] statute is not terribly well-worded, and there are some vague terms that I believe make it hard to enforce criminally, and even civilly, given some of the vague provisions,” says Amy Jeffress, a former DOJ attorney who now specializes in white-collar defense and national security issues as a partner at Arnold & Porter in its Washington, D.C., office.
For example, the law lays out activities requiring registration such as engaging in “political activities” to influence the American government or public or advance the interests of a foreign government or political party. Other types of work warranting disclosure include serving as a publicity agent, collecting or dispensing money, or representing the interests of a foreign entity before a government agency.
“These triggers are extremely broad,” the Covington attorneys stated in their article. “As a result, on the face of the statute, routine business activities of law firms, lobbying and public relations firms, trade associations, think tanks, U.S. subsidiaries of foreign companies, and other commercial enterprises could potentially require registration.”
That said, FARA does have several exemptions. One is for lawyers—provided their representation of a foreign client is limited to judicial or agency proceedings and doesn’t include any attempt to influence the government or public on policy matters.
A commercial exemption permits “private and nonpolitical activities” involving trade or commerce—such as the sale of commodities or property—on behalf of a foreign entity.
The law also extends an exemption to anyone already registered under the Lobbying Disclosure Act, which has less rigorous reporting requirements than FARA, as long as the foreign client is not a foreign government or foreign political party.
Matters of interpretation
But gray areas emerge even with the exemptions. Parks of Covington & Burling says questions come up most often in relation to the commercial exemption. For example, “If you’re trying to secure a contract for a foreign company, that’s much more likely to be bona fide trade or commerce,” he says. “But if it relates to a broader policy issue, there’s more ambiguity about whether that’s all commercial.”
That question has come up more often lately because of the Trump administration’s relentless focus on trade policy and tariffs.
To provide more guidance on FARA provisions, the DOJ in June for the first time released more than 50 advisory opinions that shed light on its interpretation of the law. The documents represent responses from the FARA unit to requests for opinions on how the law applies to specific situations to determine whether registration is required.
Reaction to the opinions’ release has been mixed. Lawyers interviewed welcome the step toward greater clarity around FARA but suggest their benefit is limited by being heavily redacted and lacking analysis beyond citing the FARA statute or existing regulatory guidance.
Their value lies chiefly in highlighting fact patterns that might apply in similar situations. “The opinions address a number of scenarios routinely confronted by U.S. lobbying, consulting and law firms in their work on behalf of foreign clients, though they are very fact-dependent and thus should not be viewed as ‘precedent,’ ” stated a Bloomberg Law article in July by Arnold & Porter’s Jeffress with colleagues Kaitlin Konkel and Craig Schwartz.
Bigger changes are in store for FARA if any of several reform bills pending in Congress are ultimately enacted. The legislative proposals overall aim to strengthen FARA enforcement, in part by giving the DOJ subpoena power to investigate potential cases of nonregistration.
Three of the five FARA bills introduced in the House and Senate also would eliminate loopholes such as the LDA exemption. Other changes would incorporate civil fines into the law and update terms such as “informational materials” distributed by foreign entities to include newer technologies such as social media, according to an August report from the Project on Government Oversight.
A DOJ spokesperson declined to comment on the pending FARA legislation, but many of the bills have adopted recommendations made in the department’s inspector general’s report on FARA compliance.
Despite the planned FARA reforms, lawyers expressed concern that the various bills won’t do much to clear up ambiguous terms in the law. “The legislation isn’t necessarily designed to increase clarity,” Parks says. One thing that does seem clear: FARA enforcement is only likely to get tougher.
