DOJ watchdog: Foreign lobbying enforcement lax

DOJ watchdog: Foreign lobbying enforcement lax
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The Justice Department is failing to adequately enforce a law that governs foreign lobbying in the United States, according to a watchdog report released Wednesday.

A new inspector general’s (IG) report homes in on the Foreign Agents Registration Act (FARA), a World War II-era law aimed at creating more transparency around foreign influence on U.S. politics.

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FARA requires that a person representing a foreign government, individual or entity influenced or funded by a government or party register with the Justice Department within 10 days of signing a contract to provide representation in the United States.

Yet 62 percent of registrations under the law from 2013 to 2015 reviewed by the IG were “untimely,” according to the report, ranging from seven days to almost one year late. 

Lobbyists registering under FARA must also file detailed reports every six months, including information about government officials contacted and any political donations. About 50 percent of FARA registrants the IG reviewed filed at least one those reports late.

Further, the department “lacks a comprehensive FARA enforcement strategy,” the watchdog found, with tensions and disagreements on the law between FARA investigators and officials with the National Security Division (NSD) of the Justice Department, which houses the small FARA Unit, potentially compounding the problem. 

The watchdog said there should be a tracking system for missing reports and for FARA cases it has received for review. The Justice Department does not currently keep track of cases it has declined to prosecute or the reasons for declining to take the case.

The report also highlighted the challenges that the Justice Department faces in bringing enforcement actions against those who work for foreign clients but do not register. 

The FARA Unit does not have independent authority to compel firms or individuals to turn over documents and must go through judges or other Justice Department officials. The unit has asked Congress for administrative subpoena powers but has yet to receive them. 

Lacking the power to issue subpoenas, the FARA Unit will often go through the Lobbying Disclosure Act database — named after the domestic lobbying law — and read media reports to determine if someone might be violating the law.

Willful violations of FARA are punishable by up to five years in prison and a potential six-figure fine.  

There were only seven criminal FARA cases between 1966 and 2015, primarily because the FARA Unit encourages voluntary compliance. A person filing paperwork late can typically avoid punishment.  

Although the Justice Department’s inspector general conducted the review of foreign lobbying enforcement as required by the House Appropriations Committee, the law has been in the news lately because of reports surfacing about Donald TrumpDonald John TrumpBiden says his faith is 'bedrock foundation of my life' after Trump claim Coronavirus talks on life support as parties dig in, pass blame Ohio governor tests negative in second coronavirus test MORE’s former campaign chairman, Paul Manafort, and work he did for Ukraine’s ousted President Viktor Yanukovych.

That work has ensnared two K Street firms, the Podesta Group and Mercury, which both previously lobbied for a Brussels-based non-profit called the European Centre for a Modern Ukraine that had ties to Yanukovych’s political party. 

The Associated Press reported last month that Manafort and another Trump campaign official, Rick Gates, might have overseen the advocacy strategy for the group — which likely would have triggered a need to register under FARA. Manafort has since resigned from the campaign.

Both Podesta and Mercury have hired outside firms to determine whether the former client deceived them about the source of their influence or funds.

While the Manafort case is a prominent example of a potential FARA violation, the Justice Department said that its lack of subpoena powers inhibits it from investigating whether there are other foreign organizations that claim to be acting independently that should be registering.  

“While we concur that [civil investigative demand] could be a useful tool for NSD, there are important competing considerations at stake, and we believe that any expansion of such authority must also include appropriate controls and oversight to ensure it is used appropriately,” the IG report said.

The IG report noted that there has been an overall decline in foreign agent registrations in recent years — which the FARA Unit attributes predominantly to the filing fees implemented in 1993 and loopholes created by the domestic lobbying law passed in 1995.

The NSD said it would evaluate any legislative changes needed to address the loopholes and also conduct a cost-benefit analysis determine whether the FARA filing fees are beneficial enough to keep. Those reviews are expected by mid-2017.