Justice Department Reveals (Some) of How It Interprets Foreign Influence Law

Last week the Department of Justice publicly released dozens of documents related to its interpretation of a foreign influence law. These documents, known as advisory opinions, provide clarity on how the Department has previously implemented the Foreign Agents Registration Act (FARA), and show that reform is badly needed.

The Project On Government Oversight (POGO) has been alarmed by the vague wording of FARA and the lack of Departmental guidance about the law since we released our 2014 report, Loopholes, Filing Failures, and Lax Enforcement: How the Foreign Agents Registration Act Falls Short. Of particular concern were a number of wide-ranging exemptions that seemed to allow for a certain amount of personal interpretation that would prevent the public from knowing how foreign governments were trying to influence U.S. policy. As part of our advocacy for FARA reform we encouraged Congress to require the public release of these advisory opinions.

The dozens of opinions, though redacted, provide insight into how the Department applies FARA exemptions in specific cases, as well as what triggers a FARA registration requirement. The latter in particular has been a matter of debate for years, and the lack of clarity has allowed some bad actors to fly under the radar. The opinions give us a peek behind the door of the FARA Enforcement Unit and serve to demonstrate how much more transparency is needed.

What Makes You a Foreign Agent

Perhaps the most valuable for understanding how the law is functioning are the 21 opinions clarifying what actions, relationships, and transactions constitute an agency relationship between a U.S. firm or individual and a foreign entity.

There has been growing concern within the civil society community about the sprawling, wordy, and convoluted FARA language and the possibility that it could be used to require some nonprofit organizations who receive international grants or work internationally to register as foreign agents.

For instance, the FARA definition of “agent of a foreign principal” includes “any person who acts as an agent, representative, employee, or servant, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign principal or of a person any of whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal.” Because this definition is not tied to anything overly specific, like having a legal contract or the amount of money being exchanged, there’s less wiggle room for those working on behalf of foreign interests to get around the law. The flip side of that is that the definition is so broad it could be used to scoop up all kinds of people and groups Congress may not have intended. Organizations like Greenpeace or Amnesty International that may receive some foreign funding while also working to influence U.S. policy could get caught up regardless of whether or not the work would benefit a foreign power.

This concern is due in part to the fact that the courts have disagreed about what kind of agreements establish an agent-foreign principal relationship. Yet, the Congressional Research Service noted, “DOJ regulations have not provided further clarification on the scope of the agency requirement under FARA.”

The waters are further muddied by the Department’s lack of guidance on the scope of the term “request.” The International Center for Nonprofit Law has illustrated how FARA could capture even seemingly routine interactions between American organizations and foreign governments.

“If the act is read on its face, a U.S. nonprofit would arguably need to register for doing something as innocuous as holding a public meeting in Chicago at the request of a Canadian organization to discuss policies to address the opioid epidemic,” Doug Rutzen and Nick Robinson wrote in Just Security. “Take an issue as mundane as a U.S.-based non-profit engaged in anti-human trafficking advocacy that has a foreigner on their board of directors. Under the text of the Act the organization would arguably have to register as a ‘foreign agent’ because the organization is, at least in part, directed by a foreigner and also may act at their ‘request’ in ways covered by the Act.”

The advisory opinions seem to indicate that the Justice Department has not traditionally interpreted the law this way or sought registration from these kinds of groups for these kinds of activities. But that doesn’t mean there’s no reason to be concerned. The FARA Unit itself seems unsure, according to a 2016 report by the Department of Justice Inspector General:

“Another difficulty [the Department] cited relates to the breadth and scope of existing exemptions to the FARA registration requirement and determining whether activities performed by certain groups, such as think tanks, non-governmental organizations, university and college campus groups, foreign media entities, and grassroots organizations that may receive funding and direction from foreign governments fall within or outside those exemptions.”

It is vital for Congress to step in and clarify FARA’s registration requirement since the Justice Department is unwilling or unable to do so.

Indeed one redacted opinion from November 2012 seems to address the kinds of activities often performed by DC think tanks. The Justice Department found that the nonprofit organization would have to register for representing a foreign government by convening panels and hosting foreign officials, working with the embassy, and conducting educational workshops on issues related to the foreign country.

“Based on the representations in your letter, we have determined that the proposed activities constitute political activities and political consultancy under the Act. Accordingly, if the [US organization] engages in the proposed activities, the [US organization] must register under FARA on the behalf of [foreign government],” the Department wrote.

Just two years after this opinion was issued in secret, a New York Times investigation by Eric Lipton, built in part on a 2007 exposé in HarpersMagazine by Ken Silverstein, questioned whether some think tanks that receive multi-million dollar grants from foreign governments should have to register under FARA.

These groups have a certain credibility that can be invaluable to some foreign governments. “Most of the governments that come to us, they understand we are not lobbyists. We are a different entity, and they work with us for totally different purposes,” Frederick Kempe, chief executive of the Atlantic Council told the Times. But FARA does not just cover lobbying, and as Martin S. Indyk, Brookings Institution vice president and foreign policy program director, said in the same article, “Our business is to influence policy."

While Brookings’ internal policy states that their work is not to be influenced by the views of its funders, that policy may not always work in practice. The organization’s largest foreign donor is the government of Qatar, and the country’s former prime minister sits on the advisory board of the Brookings’ Doha Center in Qatar. According to the Times one of the center’s visiting fellows said, “There was a no-go zone when it came to criticizing the Qatari government. It was unsettling for the academics there. But it was the price we had to pay.”

Unfortunately whether this kind of work requires registering as a foreign agent remains a grey area. While this one opinion would seem to suggest that in certain circumstances think tank-type work would require registration, it is unclear how the Department knew the organization in question was representing a foreign government. The advisory opinions only reveal small details in specific cases and often don’t present the whole picture. It is vital for Congress to step in and clarify FARA’s registration requirement since the Justice Department is unwilling or unable to do so.

One thing that is reiterated again and again in these opinions is that the registration requirement is triggered when the entity that most benefits from the work is a foreign government or political party. This is a crucial point, one that is not actually included in the law but is instead buried in the Department’s regulations: “In no case where a foreign government or foreign political party is the principal beneficiary will the exemption under 3(h) be recognized.” But again “principal beneficiary” is not defined and it’s unclear how the Department has interpreted that term.

A few of the advisory opinions offer additional insights for those engaged in humanitarian work. But they do not address ambiguity and concerns about whether the law is consistently and fairly applied. A redacted February 2018 opinion for a U.S. organization coordinating with the U.S. government and a foreign government to seek the release of a prisoner from the custody of a foreign government found that the work was “humanitarian in nature.” The agency ruled that the organization did not have to register since it was “working solely for the benefit of [incarcerated individual].” Since the work in no way benefited a foreign government or political party, the U.S. organization was exempted from the law’s requirements.

Similarly, an August 2011 opinion details an individual soliciting money for a memorial in a foreign country and arranging meetings between public and private officials. The individual raising funds was also an Honorary Consul General for the foreign government. Again the Justice Department ruled that registration was not required because, despite that connection, the work was done in the individual’s personal capacity and would not benefit the foreign government.

But there are many other potential relationships and activities that aren’t so cut and dry. Take for instance an American nonprofit that receives a grant from the European Union to work on climate change policies in the United States. Certainly that work would benefit the European Union, but would they be the principal beneficiary? The answer is unclear, and without a more specific definition of ”principal beneficiary” it’s impossible to know for sure whether the Department considers this work foreign influence. Congress should examine whether the Justice Department needs to provide clear guidance on this definition, or should change the law if the intent is unclear.

What Exempts You from Being a Foreign Agent

The rest of the released opinions relate to the nine exemptions within FARA that allow some foreign agents to forgo registering at all. They include some obvious carve-outs for diplomats and foreign government officials performing their duties, individuals promoting nonpolitical trade or commerce, lawyers representing foreign individuals and entities, and those working to further religious, academic, or scientific pursuits. But when foreign governments own and operate commercial businesses, or lawyers do double duty as lobbyists, the lines can get blurred, especially without clear direction from the Department or Congress.

The National Security Exemption

The advisory opinions do offer some clarity on a few aspects of the exemptions. In our 2014 report we questioned the “National Security Exemption,” which exempts lobbyists from registering if they meet the following criteria:

  1. They represent the “government of a foreign country the defense of which the President deems vital to the defense of the United States”;
  2. They are promoting policies that are not intended to conflict with any existing U.S. domestic or foreign policies;
  3. Communications they distribute are “believed” by them “to be truthful and accurate.”

With the Department relying on voluntary compliance and no requirement to apply for an exemption, this seemed like a loophole wide enough to drive a truck through. One advisory opinion from May 2012 provides clarification. No foreign country has been designated as “vital to the defense of the United States” since 1946, when the President withdrew all countries previously designated. So there are no circumstances where this exemption would apply.

But when foreign governments own and operate commercial businesses, or lawyers do double duty as lobbyists, the lines can get blurred, especially without clear direction from the Department or Congress.

This is a clear place where Congress needs to update the law and strip this exemption to reflect the new status quo and ensure it’s not being exploited. Because compliance is largely voluntary, there could be entities improperly assuming their work falls under this exemption when actually they should be registering.

The Lobbying Disclosure Act Exemption

One of the more controversial exemptions, and one that Congress has already turned its attention toward fixing, is known as the “LDA Exemption.” This allows those who represent foreign companies or individuals to register under the LDA instead of FARA as long as the work is not intended to benefit a foreign government or political party. Eight of the released advisory opinions relate to this exemption.

The intersection between the two laws is a confusing grey area and can be easily exploited or misunderstood. In 2017, it was revealed that Michael Flynn, former National Security Advisor to President Trump, misunderstood the exemption and failed to register his work for the Turkish government because he had been hired by a private Dutch law firm. Due in part to the national spotlight on this exemption, Congress has launched a bipartisan effort in the last year to eliminate the LDA exemption entirely.

The advisory opinions offer some insight into one of the most obvious issues with this exemption: that foreign companies and governments are not always as distinct from one another as they are in the United States.

A redacted April 2013 opinion details an American law firm’s work to facilitate transactions between U.S. financial institutions and a foreign bank. The Justice Department ruled that the activities did not qualify for the exemption since the foreign bank was not independent enough from the foreign government to be purely commercial.

“We find [foreign country] and its banking system to be bound together for purposes of your requests for exemption. We consider the use of [foreign country] sanctions against [foreign country] and the [foreign country] banking system to be part of U.S. foreign policy and not commercial. Furthermore, we consider the Government of [foreign country] and [foreign bank] as principal beneficiaries under 28 C.F.R. § 5.307, and this precludes [foreign bank] from claiming the Lobbying Act Disclosure exemption.” (Brackets in original)

More Guidance Is Needed

Although these opinions allow further understanding of the law, it’s clear that each of these opinions relate to very specific instances and don’t lend themselves to a great deal of extrapolation. As Covington & Burling partner Robert Kelner told the National Law Journal, the opinions are “not quite the Rosetta Stone for interpreting DOJ’s position on FARA.” That doesn’t mean they don’t provide valuable information—they demonstrate a long precedent for a deeper and more nuanced interpretation than what is gleaned from reading the Act on its face—but they’re not legally binding.

Releasing the opinions to the public is a vital first step in bringing transparency to FARA. The opinions are helpful in understanding some of the nuances in the law, although they do not shed light on all of the issues or potential grey areas. Rather, these advisory opinions serve to sign-post how desperately in need of clarity the law really is.

It’s long past time for Congress to bring FARA into the 21st century and codify its intent regarding FARA. Otherwise it may be up to the Justice Department to pick and choose what activities and relationships make a foreign agent.