Manafort Indictment Demonstrates How FARA Falls Short

Paul Manafort walks from Federal District Court in Washington, Monday, Oct. 30, 2017.
Paul Manafort walks from Federal District Court in Washington, Monday, Oct. 30, 2017. Manafort, President Donald Trump's former campaign chairman, and Manafort's business associate Rick Gates pleaded not guilty to felony charges of conspiracy against the United States and other counts. (AP Photo/Alex Brandon)

Today Special Counsel Robert Mueller released an official grand jury indictment of Present Trump’s former campaign manager, Paul Manafort, which included violations of the Foreign Agents Registration Act (FARA), a rarely enforced law that’s meant to provide transparency into how foreign powers wield influence in the United States.

Under FARA, persons in the United States who are working on behalf of a foreign government or political party to influence U.S. policy must register their activities with the Department of Justice (DOJ). These foreign agents are required to provide significantly more detail about their work than are domestic lobbyists.

According to the indictment, Paul J. Manafort, Jr. and his business partner, Richard W. Gates III, conducted a multi-million dollar lobbying campaign on behalf of the Ukrainian government and Ukrainian political parties from 2008 to 2014. Neither Manafort nor Gates registered their activities with the DOJ, which the indictment alleges violated the law. Gates previously told the Associated Press that their work was lawful and they did not attempt to circumvent FARA requirements. Manafort and Gates have pleaded not guilty to the charges in the indictment.

Manafort and Gates were allegedly able to lobby on behalf of the Ukrainian government and political parties without detection in part because the DOJ relies on voluntary compliance instead of rigorous enforcement of a law meant to shine a light on foreign influence on U.S. policy. According to the indictment, both of them provided false information to DOJ, including denying they had met with U.S. government officials and media outlets on behalf of their Ukrainian clients.

In 2014, the Project On Government Oversight released an investigation into the DOJ’s enforcement of FARA and found that registrants regularly break the law with little to no penalties. These violations include failure to register, late registration, and improper disclosure of activities and documents. The DOJ has only pursued enforcement action a handful of times in recent years, making today’s indictments highly unusual. 

Under FARA, the Department only has two enforcement tools at its disposal: pursuing criminal charges or filing a civil injunction. A civil injunction essentially means that the DOJ can request a district court to order registrants to obey a law they should already be obeying and to order them to halt their activities until they comply. The DOJ has not pursued a civil injunction for FARA violations since 1991.

Alternatively, the Department can pursue a criminal charge, which has a much higher burden of proof and the DOJ must be able to convince a grand jury to indict. Until today, the DOJ had only pursued criminal charges for FARA violations seven times in the last 50 years.

There are several reasons the Department has failed to adequately enforce FARA. A 2016 audit by the DOJ Inspector General found that the FARA enforcement unit does not believe they have all the tools necessary to determine the extent of those failing to register. More troubling was the finding that within the DOJ there’s a great deal of disagreement as to the actual purpose of the law and what constitutes a prosecutable FARA case. So despite “widespread delinquencies,” the DOJ declines to use its enforcement mechanisms and generally tries to encourage compliance through communication with potential registrants. Clearly that’s not enough.

Those widespread delinquencies were thrust into the national spotlight during the 2016 election cycle. In August 2016, the Associated Press reported that Manafort and Gates were consulting for a pro-Russian group in Ukraine and helped the Ukrainians connect with two major foreign lobbying firms: the Podesta Group, Inc. and Mercury LLC. Both firms, as well as Manafort and Gates, stated at the time that even though the Ukrainian group qualified as a foreign client under FARA, they did not believe disclosure was required. Politico has reported that Tony Podesta, founder of the Podesta Group, announced today he would be leaving the firm after it was revealed last week that Mueller’s investigation would include the firm’s involvement in the Ukrainian lobbying campaign.

Although Manafort and Gates are the only people to be publicly indicted under FARA this year, the press has identified additional lobbyists who may have failed to comply with FARA’s registration requirement. Earlier this year President Trump’s former National Security Advisor, Michael Flynn, was found to have been lobbying on behalf of the Turkish government without registering under FARA. Before joining the administration, Flynn had been hired by a Dutch firm in August 2016 to promote Turkish interests. Because he was technically hired by a private company, Flynn filed reports on his activities and those of his company, Flynn Intel Group Inc., under the Lobbying Disclosure Act (LDA). A loophole in FARA allows for those hired by foreign corporations to register under the far less strict LDA. But even though it was a Dutch company footing the bill, the “principal beneficiary” of Flynn’s work was the Turkish government, which triggered the FARA registration requirement.

Flynn registered retroactively under FARA and stated this was an “uncertain standard.” And he’s not wrong. That language does not appear in the law itself and it’s not clear how “principal beneficiary” is defined. Furthermore, neither FARA nor the LDA takes into consideration that foreign governmental and commercial interests are not always as distinct from one another as they are in the United States.

Both Flynn and Manafort’s activities demonstrate how often FARA is misunderstood and how mis-interpretation of the law can leave the public and even Congress in the dark about who is working behind the scenes to influence US policy.

Both sides of the aisle have had issues with making sure their relationships with foreign governments, parties, and companies are as transparent as they should be. Hillary Clinton’s foreign connections also demonstrate how FARA falls short of capturing all the various ways foreign influence can creep into the U.S. policymaking process. The House Committee on Oversight and Government Reform and the House Permanent Select Committee on Intelligence have launched a joint investigation into the Obama Administration’s approval of a deal involving Russia, the uranium industry, and the Clinton Foundation. Although no evidence has been revealed to indicate illegal activity by Clinton, the timing of donations to her foundation in connection with her part in approving the deal have raised some eyebrows. While this is not the kind of activity that would be captured under FARA as it’s currently written, the incident reveals how inadequate our foreign influence laws are in the United States.

Hopefully the high-profile indictment of Manafort and Gates may serve as a warning that the days of lax enforcement of FARA are over. But it’s worrying that this is only becoming an issue because a specially appointed counsel is looking into a specific foreign influence issue.

lydia dennett

By: Lydia Dennett, Investigator

Lydia Dennett is an investigator for the Project On Government Oversight. Lydia works on safety and security of nuclear weapons and power facilities, foreign lobbying and influence, and works with Department of Veterans Affairs whistleblowers.

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