Should There be Steeper Penalties for Violating Rules for Foreign Lobbyists? (H.R. 1467)

What is H.R. 1467?

(Updated October 24, 2019)

This bill – the Protect Against Unlawful Lobbying (PAUL) Act of 2019 — would strengthen the Foreign Agents Registration Act (FARA) to ensure that lobbyists representing foreign countries act in good faith and operate with full transparency. Under this bill, the Attorney General would establish a unit under the Dept. of Justice’s (DOJ) National Security Division’s counter-espionage section charged with taking appropriate legal action against individuals suspected of violating FARA and coordinating legal action with the U.S. Attorney for the relevant jurisdiction.

This bill would also impose civil penalties for failing to comply with FARA. These penalties would be:

• A civil penalty of no more than $10,000 per violation for failing to file timely or complete FARA registration statements;
  
• A civil penalty of no more than $1,000 per violation for failing to file timely or complete FARA supplements; and
  
• A civil penalty of no more than $200,000 for failing to remedy a defective filing within 60 days after notice by the Attorney General or other failure to comply with FARA.

These civil penalties could not be paid, directly or indirectly, by foreign principals. All civil penalties collected under this bill would be used to defray the costs of FARA enforcement.

This bill would also create a disclosure requirement for transactions involving items of financial value conferred on officeholders. These would include gifts, profits, salaries, favorable regulatory agreements, or any other direct or indirect economic or financial benefit.

Argument in favor

A perceived lack of consequences has led to little FARA compliance by foreign lobbyists, who influence U.S. politics without disclosing their foreign relationships. Enforcing FARA with both criminal and civil consequences to ensure compliance is common sense.

Argument opposed

Lack of enforcement by the Dept. of Justice — not lack of consequences for non-compliance — is the real issue facing FARA today. Without addressing that problem, this bill won’t make any difference in lobbyists’ compliance with FARA.

Impact

Lobbyists; lobbyists for foreign countries; foreign countries; the DOJ; US Attorneys; the US Attorney General; and FARA.

Cost of H.R. 1467

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Ilhan Omar (D-MN) introduced this bill to strengthen the Foreign Agents Registration Act (FARA) to ensure lobbyists representing foreign countries act in good faith and operate with full transparency:

“Until we are able to create a fair election system and ensure everyone’s right to participate in our democracy, we will continue to face barriers to the transformative change we seek. With H.R. 1, House Democrats have passed a once-in-a-generation reform package to restore the promise of our democracy and repair our institutions. I am particularly proud that the final bill includes my legislation to strengthen enforcement of foreign lobbying and my amendment to crack down on lobbyists who represent human rights abusers. H.R. 1 is a bold declaration to the American people that the Democratic majority gets it – we want to build a democracy that actually works for the people, because when we do, government will become more responsive to the needs of everyday Americans. If we give regular Americans a seat at the table and the tools to be heard.”

Ken Silverstein, a longtime Washington reporter and the creator of WashingtonBabylon.com, argues that the DOJ’s reluctance to enforce FARA, along with easy loopholes to get around it, are the real issues when it comes to FARA compliance:

“The Department of Justice’s own inspector general has confirmed just how toothless the FARA enforcement is. In September 2016, DOJ issued a report that tallied all the prosecutions under FARA since 1966—a total of seven. Only one of the individuals charged was convicted at trial; according to the report, two pleaded guilty to FARA charges, two were convicted on non-FARA charges and two saw their cases dismissed. An important reason for this lack of enforcement is that there are virtually no enforcers. The FARA team at DOJ is small, poorly funded and relies on voluntary compliance. According to a POLITICO story from October, ‘it usually investigates possible failures to register only when its staff reads about them in the media.’... And here's another trick that's even better, and it's not just used by Russia. Let's say a government wants a lobbyist or someone else to do some work for them in Washington. Maybe it's lobbying and maybe it's not exactly lobbying. The country simply has a major American law firm hire the lobbyist or PR executive, and now you're not lobbying for Russia, you're providing litigation support for a certified American law firm. And it's 100 percent legal and outside the purview of the ever more meaningless FARA statute. Makes you wonder why there’s a law at all.”

Covington & Burling, a law firm with extensive FARA practice experience, contends that FARA is already “complicated, arcane, and loosely worded,” carrying risk for people who aren’t aware of their need to register under the act being caught unawares.

This bill has one cosponsor, Rep. John Sarbanes (D-MD), and hasn’t received a committee vote.

The For the People Act (H.R. 1) incorporates this bill and passed the House by a 234-193 vote but isn’t expected to pass the Senate, where Majority Leader Mitch McConnell (R-KY) has expressed his opposition to the bill. H.R. 1 has 236 Democratic House cosponsors.

Of Note: FARA was enacted in 1938 with the intention of combatting foreign propaganda by requiring organizations and individuals engaged in lobbying or public discourse on behalf of a foreign government to register with the Dept. of Justice (DOJ) and disclose their funding and the scope of their activities. Under FARA, foreign lobbyists must register with the DOJ within 10 days of reaching an agreement with their foreign clients and file a copy of their contract at the same time. Then, they then must file semi-annual reports on everything they did for their foreign clients and any funds exchanged, including any political contributions made by lobbyists. Additionally, any promotional materials sent on behalf of foreign clients to more than one person must be filed with the Justice Department within 48 hours of distribution.

However, compliance with FARA is very low, and the DOJ Office of the Inspector General (DOJ OIG) reports that penalties for FARA violations are currently “exceedingly rare.” In fact, from 1966-2015, the DOJ brought only seven criminal FARA cases, resulting in only three convictions. According to Newsy, most people who should be registering under FARA currently aren’t registering under it, because they believe there’s no risk if they’re caught violating it.

In a 2016 audit, the DOJ OIG found “widespread delinquency” in FARA compliance rates. In a review of documents filed from 2013-2015, the DOJ OIG found:

• 62 percent of new registrants filed their documentation late;
  
• 50 percent of those already registered failed to file their semiannual reports in a timely manner;
  
• 61 percent of registrants failed to file their informational materials within the required 48-hour period; and
  
• 47 percent of information materials didn’t meet a requirement that they disclose that they were distributed on behalf of a foreign power.

The DOJ’s auditor’s concluded, “these compliance rates are unacceptable.” The Project on Government Oversight (POGO), looking at DOJ’s findings, found that one reason for the poor FARA compliance was DOJ’s reliance on “voluntary compliance” to enforce the law.

The FBI disagrees with DOJ’s position, as its agents believe that more aggressive prosecution of people who haven’t registered under FARA would discourage a range of activities, including spying. However, FBI agents can’t pursue FARA cases without the DOJ’s backing, and the DOJ’s enforcement unit is reluctant to pursue criminal charges because it believes it’s difficult to prove “willful violation”  (the standard needed to charge under FARA) in most cases.

Outside of Congressional legislation, the DOJ has taken its own steps to promote FARA compliance. In June 2018, the DOJ published approximately 50 redacted advisory opinions issued on FARA since January 2010. Before this, there had been only three publicly available opinions. Lawfare speculates, “The Justice Department’s stated commitment to greater transparency in how it enforces FARA suggests that more advisory opinions will be published in the future, further enhancing public understanding of a law that has become a significant tool in the government’s approach to addressing foreign influence operations in the United States.”

Media:

• Sponsoring Rep. Ilhan Omar (D-MN) Press Release
  
• DOJ OIG Report (Context)
  
• The Center for Public Integrity (Context)
  
• Project on Government Oversight (POGO) (Context)
  
• Countable (Related Bill)