Avoiding Undue Influence: Registration of Foreign Agents

Welcome to the September edition of our newsletter!  In this issue we’ll examine registration of individuals as lobbyists on behalf of foreign governments, and look at how to research issues around such registrations further.

The U.S. Foreign Agents Registration Act: Evolving From Anti-German Propaganda Tool to Global Disclosure Device

First enacted in 1938, the Foreign Agents Registration Act, or FARA, is described by the agency which enforces it, the U.S Justice Department, as being intended to ensure that “the people of the United States are informed of the source of information (propaganda) and the identity of persons attempting to influence U.S. public opinion, policy, and laws.  In 1938, FARA was Congress’ response to the large number of German propaganda agents in the pre-WWII U.S.”  Today, as lobbying by companies and foreign governments has grown to become a sophisticated multi-billion dollar business in its own right, FARA’s importance in helping the public understand who is disseminating information, or influencing policy, on behalf of foreign governments has seldom been greater.

Following reports in the mid-2000s that the Justice Department’s FARA record-keeping section was in disarray – a condition to which we can personally attest – an effort was made to modernize the agency’s records, resulting in searchable databases that can be queried by registrant – the agent hired to work in the United States – or by the foreign country which retained him.  Although the scope of the historical records on the site is unclear, we have seen records dating from 1963 to the present.  The main registration statement requires disclosure of a registrant’s employing country, basic corporate formation information and principals, including all persons seeking to act as a lobbyist under FARA.  Also required to be reported are the compensation paid to the registrant and disbursements made by the registrant to other parties as part of their work, including “things of value” and political contributions.  Finally, the issues about which an agent is disseminating information, and the method of dissemination – television, Internet advertising, etc. – is also required.

The importance of FARA in an era of increased foreign influence

In an era where “fake news” is both an epithet and an actual concern, FARA registration and enforcement has gained increased importance.  Although foreign governments constitute many of the parties hiring agents, political parties and private companies located outside the United States can and do retain such agents as well.  FARA does not restrict the nature of lobbying or “propaganda” that can be disseminated, only requiring the disclosure of such efforts.  Certain exemptions from registration exist for religious charities and other entities; additionally, persons engaged solely in the lobbying of public officials, who do not disseminate advertising or other information, may file under the Lobbying Disclosure Act of 1995, which is reported to the U.S. Senate.  Failure to register, or to disclose activities once registered under FARA, can carry criminal penalties.

When combined with research culled from news articles, litigation and other public records, FARA filings can be an essential tool in learning more about a foreign company or government’s aim to influence policy or public opinion within the United States, and provide a fuller picture of reputational concerns that may arise before doing business with a foreign government, foreign company or an agent hired on their behalf.