Briefing Paper: The Foreign Agents Registration Act

By Natalie Duffy

I. Introduction

The Foreign Agents Registration Act (FARA) requires that all United States citizens who lobby on behalf of foreign political or quasi-political entities register with the Department of Justice and “make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities.”[1] However, loopholes in the legislation and insufficient enforcement often mean that those conducting work for foreign governments fail to provide all the necessary information, and in many cases, fail to register at all. Recently, several high-profile cases of delayed registration have focused widespread media attention on this often overlooked yet important piece of legislation. Much remains to be done to reform this act so that FARA can ensure that foreign influence in the U.S. is reported in an accurate and timely way, as originally intended.

II. Origins of FARA

FARA was enacted in 1938 to counter Nazi propagandists, successfully prosecuting 23 cases during WWII.[2] In 1966, the act was amended to regulate political and economic lobbyists—this move was aimed at individuals who were lobbying for sugar planters in Cuba.[3] In 1995, the passage of the Lobbying Disclosure Act (LDA) weakened FARA—this act, how the two acts differ, and the loopholes will be covered further in section IV.

The FARA Registration Unit falls within the Department of Justice’s National Security Division (NSD), which is responsible for the regulation and enforcement of the act. Since 1966, only seven criminal prosecutions have been pursued under FARA, two of which were dismissed.

III. What does FARA stipulate?

FARA requires that upon agreeing to lobby on behalf of a foreign government or public official, agents must file within ten business days.  They can do so by submitting information about the lobbying activities either online or by mail.

The initial registration requires:

  • Information about the registering agent and the foreign principal[4]
  • Disclosure of the type of work being performed
  • A copy of the agreement between the agent and foreign principal
  • Any informational materials produced on behalf of the foreign agent and transmitted to two or more individuals within 48 hours of distribution (this is an ongoing stipulation)
  • Registration fee of $305

A willful failure to register as an agent under FARA may result in a sentence of up to five years in prison, a fine of up to $10,000, or both. Every six months following the initial registration, the registered agent must submit supplemental statements detailing the activities conducted during that period and sums transferred.

The filing can be submitted in two ways—electronically via the e-filing capacity on the fara.gov webpage, or by standard mail to the FARA headquarters on E St. NW in Washington, D.C. Submission by standard mail adds a layer of complexity when evaluating whether the filing was submitted on time or delayed, as the dates on the forms can be the date they were completed, postmarked, arrived at headquarters, or opened and filed by the FARA unit—which could feasibly encompass a significant range of dates.[5]

There are several exemptions to FARA, which are detailed in graphic 3 below. The most notable exemption, however, is that those agents registered under the LDA are exempt from registering under FARA (see section IV).

The registration process is often altogether ignored or treated as an afterthought, with many registrants filing retroactive registrations, or only supplying partial submissions. An internal DoJ audit of the NSD’s enforcement and administration of FARA, conducted in 2016, found that only 23 percent of filings from 2013 to 2015 were filed on time—62 percent were submitted late.[6] Likewise, only 44 percent submitted their supplemental statements in a timely fashion, and 10 percent did not submit any follow-up supplemental materials. However, it is difficult to say how late these submissions were filed depending on how they were submitted and when they were received and noted by the FARA unit.

Besides the LDA loophole, there are several problems that contribute to this lack of timely and/or complete disclosure. Arguably, criminal punishment is not always commensurate with the wrongdoing. In any case, the criminal standard of proof means that FARA cases are often “difficult to prove because prosecutors must demonstrate both willfulness on the part of the accused to avoid registration or to make a false statement or omission in their filings, and that the agent was direct and controlled by a foreign principal.”[7] The NSD unit also conducts compliance investigations, but only ends up completing an average of 12 to 15 inspections per year. FBI personnel interviewed for the aforementioned internal audit felt that the NSD’s “reluctance to bring charges in FARA cases resulted in missed opportunities to deter agents of foreign principles in FARA cases.”

“[The DoJ currently] lacks authority to compel the production of records [of potential violators], short of… using a grand jury subpoena. DoJ officials find themselves in a Catch-22 situation: They cannot obtain the subpoena authority to investigate a potentially unregistered foreign agent without establishing the factual predicate of a FARA violation necessary to convene a grand jury, yet they cannot establish that factual predicate without the authority to secure the records that would reveal such a violation in the first place.”[8] Kenneth Doyle, the Senior Editor for Bloomberg’s Money & Politics Report who has covered lobbying legislation for over 25 years, said of enforcement mechanisms and the creation of LDA: “This is the real issue, right? The Congress didn’t necessarily want to have a strong enforcement mechanism. There are principal reasons in terms of the First Amendment and not wanting to be too tough on people’s ability to petition the government, and then there are practical reasons of not wanting to be too tough on lobbyists who are important to the way that Washington works. I think they did it deliberately, saying, ‘Well, we’ll have a disclosure system, but it’s not going to have a strong enforcement mechanism and we’ll see what happens.’”[9]

IV. How Does FARA Differ from LDA?

While FARA focuses on lobbying related to foreign political entities, LDA regulates lobbying on behalf of domestic entities and foreign, non-political entities. LDA is often referred to as being the preferred method of registration for lobbyists due to its less stringent requirements (it does not require copies of materials distributed on behalf of the foreign principal, records of disbursements, or other specifics of the lobbying activity). LDA also allows 45 business days for registration, as opposed to ten under FARA. LDA is administered by the Congress, whose staff does not perform inspections of registrants like the FARA unit does periodically for theirs. FARA also requires the registrant to list their personal address, which will then be publicly available once submitted, a requirement which many registrants find intrusive and unnecessary.

Additionally, under the LDA lobbyists must be paid as such, whereas no remuneration is necessary to trigger FARA. Under FARA, lobbyists trigger a 10-day registration requirement the moment that they advise a foreign political entity on relations with the United States, even if they are acting pro-bono or pitching a potential client.

Immediately following the imposition of the LDA, the number of FARA registrants drastically decreased, as detailed in graphic 5. FARA Unit staff has speculated that this may be due to the absence of registration fees.[10] This galvanizes those who formerly would have registered under FARA to instead shift their filings to the LDA system.

V. Loopholes and Recommendations

  • Problem: Registrants are only required to file informational materials if they are distributed to more than one individual.
    • Possible solution: Registrants should be required to file if they distribute any informational materials, even if to just one individual.
  • Problem: Meetings abroad between American officials and foreign nationals on behalf of foreign politicians not required to register or document.
    • Possible solution: Require that these meetings are documented and filed.
  • Problem: It is illegal for foreign political entities to contribute directly to U.S. political campaigns. However, contributions have been made by their lobbyists—sometimes on the same day that they met with the U.S. politician.
    • Possible solution: Make contributions and meetings searchable by date in a database.
  • Problem: Some documents are submitted electronically, others by mail, others hand delivered.
    • Possible solution: Digital submissions should be mandatory and should appear in the database on the day they are filed.
  • Problem: Many materials are not dated clearly, making it difficult to distinguish when they were completed and when they were filed. Therefore, it can be unclear whether they were filed in compliance with the 48-hour deadline.
    • Possible solutions:
      • As above, all materials should be submitted electronically to a system which records the time automatically.
      • Ultimately, an update in the legislation may be needed. Per the DoJ audit: “Registered foreign agents now send out informational materials via Twitter and other social media on a near-continuous basis…creates a constant and unrealistic burden on registrants to submit materials, and on FARA personnel to police their submissions. The FARA Unit believes that the statute should be amended to allow registrants to compile informational materials and submit them semi-annually.”[11]
  • Problem: Only 12 to 15 compliance inspections take place per year (see graphic 5 for average annual registrant numbers).
    • Possible solution: More inspections are necessary to discern where and when the legislation is not being followed correctly and deter against further cases of non-compliance.
  • Problem: Criminal penalties—the legislation requires a grand jury to indict in cases of alleged non-compliance, placing an unrealistic burden of proof on prosecutors. Furthermore, criminal penalties are not always commensurate with the wrongdoing.
    • Possible solution: New civil penalties, in addition to the existing criminal ones, will improve enforcement for incorrect or absent filings.

There are also other loopholes that are not immediately apparent from simply reviewing both pieces of legislation.[12] What follows are some examples of each.

  • Scheduling a meeting is not lobbying.
    • Example: If you formerly worked for Congressman X, there are often rules in place that ban you from lobbying certain committees or Members for a certain period. However, if John Smith leaves Congressman X’s office and goes to work for Firm Y, there is nothing preventing him from calling Congressman X’s office and saying, “Hi, I’m John Smith. I recently joined Firm Y, and a great woman I work with, Jane Doe, is going to give you a call to discuss some issues. I would very much appreciate it if you’d meet with her and give her every possible courtesy.” Such a conversation and subsequent meeting do not have to be reported, either under LDA nor under FARA.
  • Fundraising is exempted from lobbying.
    • Example: If a lobbyist raises $50,000 for a Congressman, said lobbyist could take him out to a lavish dinner, pay for the dinner in entirety, and hand him the $50,000 check from fundraising. While at the dinner, the Congressman and lobbyist, while forbidden from doing so unregistered, may discuss certain matters of importance and fail to register them, with no way of the DoJ knowing. Yet, a conversation on a specific issue or topic has occurred, as well as an exchange of funds.
  • Using legitimate business transactions.
    • Example: A Member of the Congress has their spouse obtain a real estate license. When a foreign entity wishes to curry favor with the Member, they can list property with the spouse, who doesn’t necessarily need to do any work except putting their name to the deal. The family of the Member then receives commission for the sale, and nothing needs to be registered.

Some of these loopholes have been addressed in bills recently introduced in the Congress, though so far none have been signed and implemented.

VI. Amendments

Two bills have been introduced in the past decade to address shortcomings in the FARA legislation. The first, ‘Closing the Foreign Lobbying Loophole Act’, was introduced in 2008 by Senators Schumer, McCaskill, and Obama.[13] This bill would have required all lobbyists representing foreign clients to register under FARA, even if they had already registered under LDA. It would also require that any lobbying contracts with U.S. officials on behalf of foreign clients be disclosed even when they occur outside of the United States. This bill was referred to the Committee on Foreign Relations but has not progressed any further.

The second bill was introduced in March 2017 by Senators Shaheen and Young—entitled the ‘Foreign Agents Registration and Modernization and Enforcement Act’, this bill looks to strengthen FARA in different ways than its predecessor.[14] The bill targets the most obvious shortcoming of the existing legislation—the fact that it is simply not enforced—by “providing the Attorney General with the investigative tools to identify and prosecute foreign agents who seek to circumvent Federal registration requirements and unlawfully influence the political process.”[15] The bill would also grant the DoJ authority to compel purported propaganda organizations like RT America to produce documentation to confirm funding sources and foreign connections. Senator Young’s office said, “When foreign governments attempt to disseminate propaganda in the United States, deliberately evading our laws, the American people have a right to know.”[16] As of publication, the bill has been referred to the Committee on Foreign Relations.

VII. Conclusion

 It is apparent that though FARA and LDA take aim at the right areas, they are rife with loopholes and shortcomings. These failings are easy enough to fix to make the U.S. Government more accountable to the American people. One option would be to streamline the process by combining FARA and LDA into a single piece of legislation. Another alternative would be to close the aforementioned loopholes in FARA so that any foreign influence in Washington is fully transparent and accessible to the American public. Whatever steps are made, it is undeniable that some changes must be made to improve this legislation and ensure the integrity of the decision-making process in Washington remains free from foreign influence.

Natalie Duffy is a Research Associate at Hudson Institute’s Kleptocracy Initiative.

Graphics by Free Speech LLC.

[1] “Foreign Agents Registration Act”, The United States Department of Justice, accessed June 1, 2017, https://www.fara.gov.

[2] “2062. Foreign Agents Registration Act Enforcement,” Offices of the United States Attorneys, accessed July 13, 2017, https://www.justice.gov/usam/criminal-resource-manual-2062-foreign-agents-registration-act-enforcement.

[3] Ibid.

[4] Of the registrant: name, business address (if registering as an individual, must include address of personal residence as well), nationality, year of birth, citizenship, and occupation. Of the foreign principal: name and address. “Foreign Agents Registration Act”, The United States Department of Justice.

[5] Lydia Dennis, Ben Freeman, Loopholes, Filing Failures, and Lax Enforcement: How the Foreign Agents Registration Act Falls Short, The Project on Government Oversight, December 16, 2014, http://pogoarchives.org/m/fara/pogo-fara-report-20141216.pdf.

[6] Audit of the National Security Division’s Enforcement and Administration of the Foreign Agents Registration Act, Office of the Inspector General, The U.S. Department of Justice, September 2016, https://oig.justice.gov/reports/2016/a1624.pdf.

[7] Audit of the National Security Division’s Enforcement and Administration of the Foreign Agents Registration Act, p. 11.

[8] The Modus Operandi and Toolbox of Russia and Other Autocracies for Undermining Democracies Throughout the World (March 15, 2017) (testimony of Kenneth L. Wainstein before the Committee on the Judiciary Subcommittee on Crime and Terrorism, United States Senate), https://www.judiciary.senate.gov/imo/media/doc/03-15-17%20Wainstein%20Testimony.pdf.

[9] Phone interview with the author, June 12, 2017.

[10] Audit of the National Security Division’s Enforcement and Administration of the Foreign Agents Registration Act, p. 6.

[11] Audit of the National Security Division’s Enforcement and Administration of the Foreign Agents Registration Act, p. 19.

[12] Phone discussion with the author, June 9, 2017.

[13] Closing the Foreign Lobbying Loophole Act, S. 3123, 110th Congress, 2nd session, (June 12, 2008): https://www.congress.gov/bill/110th-congress/senate-bill/3123.

[14] Foreign Agents Registration Modernization and Enforcement Act, S.625, 115th Congress, 1st session, (March 14, 2017): https://www.congress.gov/bill/115th-congress/senate-bill/625.

[15] Ibid.

[16] Email interview with the author, June 30, 2017.