The indictments of former Trump campaign manager Paul Manafort and his associate Rick Gates have triggered a long-overdue reckoning with K Street’s rampant disregard for the laws that require lobbyists representing foreign interests to publicly disclose their activities.
Foreign agents on K Street and on Capitol Hill are anxiously wondering who’s next, and are bracing for new regulations, tougher enforcement, or both. The renewed focus on the disclosure law, known as the Foreign Agents Registration Act, also spotlights FARA’s potential as a potent tool to fight political disinformation campaigns by Russia or other foreign actors.
FARA abuses could leave K Street with an even worse black eye than the one delivered by the Jack Abramoff scandal in 2005 and 2006, warns Paul Miller, president of the National Institute for Lobbying and Ethics, who has called on Congress to act quickly to enact tougher enforcement rules. Democratic super-lawyer Tony Podesta (brother of John, Hillary Clinton's 2016 campaign chairman) has already stepped down, following the disclosure that his firm, along with Mercury Public Affairs, received some $2 million from offshore accounts run by Manafort and Gates.
FARA violations are only one part of the 12-count indictment handed down against Manafort and Gates by special counsel Robert S. Mueller, which also includes charges of conspiracy, money laundering, and making false statements. But it’s Mueller’s FARA-related indictments that have panicked K Street: The documents allege that Manafort and Gates, who have pled not guilty, paid for lobbying work on behalf former Ukrainian President Viktor Yanukovych and his party but failed to make the required disclosures, and lied to the Justice Department to cover up their activities.
For years, lobbying shops large and small have openly flouted FARA disclosure rules amid lax Justice Department enforcement, even as they scooped up millions from human rights violators like South Sudan. Now the bill may come due.
Two figures close to President Trump are among those who may have violated FARA rules, and who will be closely watched as the Mueller investigation unfolds. Michael Flynn, Trump’s former national security adviser, registered only belatedly to disclose lobbying work he did on behalf of Turkey. Trump campaign aide Corey Lewandowski may have violated FARA when he set up a meeting during the presidential transition with a Mexican billionaire at Mar-a-Lago, according to Public Citizen. The group has called for an investigation.
First enacted in 1938 as a tool to combat Nazi propaganda, FARA has suffered from an “unacceptable” lack of compliance, according to a federal Inspector General report released last year that in part blamed the Justice Department’s inadequate resources and lack of subpoena power. Mueller’s move against Manafort and Gates is only the eighth criminal indictment for a FARA violation since the 1960s.
“It is a poorly kept secret that people have been trying to avoid FARA registration over the past several decades,” says Joshua Ian Rosenstein, an attorney at Sandler Reiff Lamb Rosenstein & Birkenstock. Rosenstein predicts that a wave of retroactive registrations and requests for FARA guidance will flood the Justice Department. Some “nefarious actors” have ignored the rules, Rosenstein acknowledges, but others simply failed to grasp that FARA covers more activities, such as public relations and media consulting, than domestic lobbying disclosure rules.
A loophole in the law also has enabled lobbyists to register under the Lobbying Disclosure Act and not FARA when they represent foreign commercial interests, as opposed to foreign governments. But LDA disclosures are less comprehensive, and some foreign firms are stand-ins for foreign governments. The work done by Podesta and Mercury and paid for by Manafort and Gates, for example, was for an ostensibly independent nonprofit called the European Centre for a Modern Ukraine that was actually controlled by the Ukrainian president.
Republican Senator Chuck Grassley of Iowa introduced legislation this week that would close that loophole and give the Justice Department subpoena power when investigating FARA violations. Louisiana Republican Mike Johnson has introduced a companion measure in the House. Democratic Senators Jeanne Shaheen of New Hampshire and Tammy Duckworth of Illinois also have introduced separate bills to buttress FARA enforcement.
Congress isn’t passing many bills these days, but even without legislation, Mueller’s recent indictments may lead to a culture shift on K Street. The renewed spotlight on FARA also underscores the potential for that law to help combat propaganda from Russia and elsewhere.
This week, lawmakers grilled Facebook, Google, and Twitter on their role disseminating Russian disinformation, and Democrats have rallied behind legislation to boost internet ad disclosure. But new internet rules could be tough to enact, and have raised First Amendment concerns in some quarters. By contrast, FARA offers a ready-made tool to sanction foreign propaganda.
Much of the false content placed on Twitter and Facebook last year was created by RT, the Russian news agency. The Justice Department has asked RT to register under FARA, according to RT officials, and a Kremlin spokesman threatened that Russia declined to rule out “reciprocal actions” against U.S. media outlets. FARA exempts legitimate news outlets but not government-controlled media. “There’s nothing in FARA that prevents people from speaking. It merely requires transparency,” says Brookings Institution senior fellow James Kirchik, who argues that RT must register under FARA as a matter of law. Indeed, last year’s Russian propaganda campaign is precisely what FARA was created to combat.