The lobbying law at the center of Manafort's trouble with Ukraine

The lobbying law at the center of Manafort's trouble with Ukraine
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Paul Manafort had a no good, very bad week. And most of the trouble seems to point to a long-standing and rarely prosecuted lobbying rule. 

Last week started with a New York Times report that detailed a “black ledger” in Ukraine listing $12.7 million in illicit off-the-books cash payments for Manafort from a pro-Russia political party; he dismissed the alleged payments as “unfounded, silly and nonsensical.

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Then, insight and leaked documents published by other outlets, including The Associated Press, began to shed more light on his business dealings with the party — and how those activities possibly bled over into the United States, evading lobbying disclosure rules. 

The week culminated in Manafort’s resignation as Donald TrumpDonald John TrumpDavid Axelrod after Ginsburg cancer treatment: Supreme Court vacancy could 'tear this country apart' EU says it will 'respond in kind' if US slaps tariffs on France Ginsburg again leaves Supreme Court with an uncertain future MORE’s presidential campaign chairman.

That was followed shortly by a report that he had been ensnared in a wide-ranging Justice Department investigation about U.S. connections to the alleged corruption by former Ukrainian President Viktor Yanukovych.

Questions have been swirling about Manafort’s representation of Yanukovych for years, but recent reports have intensified the drum beats about whether he acted unlawfully as a “foreign agent” by lobbying for a foreign leader without registering that activity.

The recent revelations, if true, suggest that Manafort could face legal troubles stemming from violation of a World War II-era lobbying statute.

Here is a history of the U.S. foreign lobbying law, the Foreign Agents Registration Act (FARA), and how it has been enforced in the past. 

The paperwork 

Although Congress passed FARA into law in 1938, because of fears of Nazi propaganda infiltrating the United States and affecting public opinion, it was overhauled in 1966 to become the foreign lobbying statute it is today.

It requires the disclosure of much more information than the domestic lobbying law, the Lobbying Disclosure Act (LDA), and “foreign agents” must itemize each specific contact made on behalf of a foreign client. It also requires the itemization of additional expenses paid for by the client — like travel — and political donations by foreign agents. 

Also unlike the LDA, the law covers public relations activities and media contacts — not just advocacy before policymakers, diplomats and government officials. 

Since 1966, there have been only seven FARA prosecutions. Four of those have been in the past decade. 

“These are tough cases to bring, honestly, because they’re tough to start. It really is hard for DOJ to know what’s going on out there,” said Matthew Miller, a partner at Vianovo and former Justice Department spokesman. “What that means is that you don’t have a lot of case history to work from." 

Part of the reason for FARA’s low prosecution rate, says Joshua Ian Rosenstein, an expert in lobbying rules, is that the law primarily hinges on voluntary compliance. 

If someone does not file paperwork correctly — or at all — the Justice Department will send a letter to the lobbyist or firm asking them for corrections, to register with the department as a foreign agent or explain why registration is not necessary. 

Simply updating records, even months or years after not properly disclosing work, can be enough to satisfy the DOJ.

Further complicating matters, the FARA Unit is unable file subpoenas by itself and has to go through a judge, which requires a high burden of proof, in order to compel the release of documents. The Unit also has no authority to prosecute entities in violation of the law and has to work with FBI agents or other Justice Department officials in order to move forward with a case. 

“It’s clear that they’re hamstrung in their ability to ensure full compliance. They can’t subpoena, they can’t prosecute on their own,” Rosenstein said. “They’ve got the carrot but not the stick.” 

He added: “I think the Unit does a good job, given the resources and what it has.”

Over roughly the past 10 years, the FARA Unit has sent about 130 “letters of inquiry” to potential FARA violators, the Justice Department reported last May. 

Of those, it was determined that 38 recipients needed to register documents with the department and did so. The other 92 entities either had no obligation to register or the Justice Department is still evaluating whether their activity triggers a FARA registration.

Conviction history

“I would be very surprised if you can find a case that’s a plain old vanilla FARA violation. There is usually another plus factor, like terrorism, money laundering or corruption,” said Robert Kelner, the chair of the election and political law practice group at Covington & Burling, before news broke that the Justice Department was looking into Manafort’s role in Yanukovych’s alleged corruption.  

“There’s always something else going on if they take it to court,” he said.

In the four guilty pleas and convictions of FARA violations since 2005, that trend has largely held true.

• In 2010, former Rep. Mark Siljander pleaded guilty to obstruction of justice and violating FARA by working as an unregistered foreign agent for the Islamic American Relief Agency, a Missouri charity that the government alleged sent money to designated terrorists, among other violations.  

Siljander pushed to have the charity removed from a government list of charities suspected of being linked to international terrorism, and prosecutors said he lied to the FBI about lobbying for the group. He was sentenced to one year and one day in prison.

• In 2014, Prince Asiel Ben Israel, a Chicago man who once led a religious sect in the 1980s, pleaded guilty for failing to register under FARA for his lobbying work representing Zimbabwe from late 2008 to early 2010, valued at $3.4 million. He was sentenced to seven months in prison.

Had he let the case to go to trial, he would have likely faced the same fate of his co-defendant, C. Gregory Turner. Turner was convicted of a conspiracy to violate U.S. sanctions by agreeing to work for Zimbabwean President Robert Mugabe and other leaders, in order to lift economic sanctions against the country — a conviction that carries a much stiffer sentence than violating FARA.

• In 2007, a jury convicted Tongsun Park for conspiracy to violate FARA and money laundering. The actions had been in connection with a scheme to lobby for easing sanctions on Iraq and “to corruptly influence the award and conditions of Oil for Food contracts,” according to the Justice Department. A judge sentenced him to 60 months in prison.

• A 2011 FARA violation charge for the director of the Kashmiri American Council, Syed Ghulam Nabi Fai, was dropped as part of a plea agreement. Fai, who had lobbied for the government of Pakistan without registering with the Justice Department, pleaded guilty to other conspiracy and tax offenses. The decadeslong advocacy effort was worth at least $3.5 million, which he ultimately tried to cover up. 

The issues

Reports from various outlets have surfaced this week describing the role Manafort and another Trump aide, Rick Gates, had in representing the Ukrainian Party of Regions, once led by the since-deposed Yanukovych.  

Manafort’s firm never registered with the Justice Department for the work, and both he and Gates have said that none of the activities called for registration under FARA. They could face FARA violations if it is found that they were in fact lobbying on behalf of a foreign entity without proper disclosures. 

If they had done the entirety of their work in the Ukraine, they may have evaded the need for disclosure. Emerging documents, however, suggest that the work was — at least in part — done in the United States.

The reports have also brought into the fold two K Street firms — Mercury and Podesta Group — which worked for the nonprofit European Centre for a Modern Ukraine. From 2012 to 2014, the firms earned $2.2 million in lobbying revenue from the organization, according to disclosures. 

Manafort and Gates reportedly led the advocacy strategy for the Centre and introduced the two firms to the nonprofit while on the payroll of Ukrainian leaders, according to sources cited by the AP.

The firms registered under the LDA and not FARA for their work, citing an outside legal opinion.

The organization was initially led by a board that included parliament members from the Party of Regions. It vowed in a signed statement to the lobbying firms that it had no backing from foreign governments.

Both firms have now hired outside counsel to evaluate the actions by their former client to see if they had been misled about its source of funding and influence.

Meanwhile, according to emails obtained by the AP, the men also asked lobbyists at Podesta and Mercury to coordinate meetings for Ukrainian officials with policymakers on Capitol Hill.

Lobbyists representing private entities abroad — such as non-profits and corporations — do not have to register under FARA, unless the client has financial or influential backing from a foreign government official, party or sovereign government. 

If media reports are accurate, Manafort and Gates may have opened themselves or the firms up to some kind of liability.

While Manafort has resigned to avoid being “a distraction,” Gates has remained on the Trump campaign.