Foreign Lobbying Revolving Door Closed? Not Quite
By: Lydia Dennett | January 30, 2017
This past weekend, President Trump signed a new Executive Order (EO) aimed at strengthening ethics commitments for those in his administration. POGO General Counsel Scott Amey has examined whether the Order effectively drains the swamp. Here we look at the part of the Order that deals specifically with administration officials who leave public office to work on behalf of foreign clients.
President Trump’s lobbying ban is a good start but will not fully capture those trading on their expertise and experience once leaving public service. The EO is narrowly tailored and does not include a lifetime revolving-door ban for all those leaving the US government to lobby on behalf of foreign clients. The wording of the order specifically states that former executive branch appointees may not engage in any activity that would require registering under the Foreign Agents Registration Act (FARA). But this does not fully capture all American lobbyists working on behalf of foreign clients.
There are two primary laws governing lobbying disclosures, FARA and the Lobbying Disclosure Act (LDA).
FARA requires American lobbyists working to influence US policy on behalf of foreign clients to register with the Department of Justice National Security Division. But FARA does not capture the full extent of foreign lobbying. Lobbyists who are working solely on behalf of a foreign commercial interest, rather than a foreign government or political party, may register under the LDA and are exempt from FARA requirements.
Under FARA lobbyists are required to disclosure significantly more information about their activities than lobbyists registered under the Lobbying Disclosure Act (LDA). Biannual disclosure statements made under FARA include details on the nature of the lobbyists’ activities, receipts and disbursements, and any political contributions the lobbyists made. Most of these documents are posted online and provide significantly more transparency into lobbying activities than any documents filed under the LDA.
Among issues highlighted by the Department of Justice Inspector General is the overlap with the LDA and a major loophole that could leave the Department of Justice and the public in the dark as to the full extent of foreign lobbying. For example, unlike FARA requirements, the LDA allows those with lobbying income or expenses below a certain threshold to forgo registering. So if a lobbyist representing foreign commercial interests falls below the LDA threshold, they are exempt from registering under either statute. Additionally, foreign governmental and commercial interests are not always as distinct from one another as they are in the United States. This leaves a huge loophole in FARA enforcement that could allow foreign commercial interests that are acting under the direction and control of a foreign government to register under the much less strict LDA, or in some circumstances not register at all.
By restricting this lobbying ban only to those who would go on to register under FARA, several other areas where administration officials could trade on their public experience for the benefit of foreign companies and governments are left out. The full extent of foreign influence will remain in the dark.
The FARA Unit has stated that they review LDA filings approximately once a month looking for potential FARA registrants. But the FARA Unit’s enforcement tools are limited and when they find LDA registrants who should be registered under FARA they are restricted to sending the lobbyist a “letter of inquiry.” Just a few months ago the Department of Justice Inspector General conducted an independent review of the FARA Enforcement Unit and found several issues which led them to conclude that lobbyists’ “compliance rates are unacceptable.”
Both the Department of Justice National Security Division and Inspector General have recommended an assessment of the LDA exemption to determine its impact and perhaps even work toward changing the law. The Inspector General report stated, “[the National Security Division] believes that because FARA disclosure requirements are more rigorous than those of the LDA, those lobbying on behalf of foreign commercial interests should not be exempt from FARA registration.” Moreover, as Ben Freeman notes in his book The Foreign Policy Action, “…the most prolific agents are former members of Congress, Congressional staffers, Executive branch officials, and Executive branch employees.” And this ban would only include only a fraction of that list.
If President Trump truly wants to drain the swamp he must work toward closing the loopholes between FARA and the LDA and encourage Congress to initiate its own effort to stop the revolving door between those in Congress and foreign lobbying firms.