Full Disclosures

• Author: Mark F. Walsh
• Pages: 18-19

National

Pulse

The Docket

18 || ABA JOURNAL DECEMBER 2018

Full Disclosures

In the wake of the Mueller investigation, law fi rms

are making sure they comply with the Foreign Agents

Registration Act By Mark F. Walsh

Before special

counsel Robert

Mueller’s investiga -

tion of Russian

interference in the

2016 election, few

outside Washington, D.C., had

ever heard of the Foreign Agents

Registration Act.

Enacted in 1938, t he act requires

anyone lobbying or doing public

relations for a foreign government,

company or other entity to regist er

with the Depar tment of Justice

and fi le detailed reports about their

work every six months. Intentionally

violating the law carr ies a fi ne of up

to $10,000 or fi ve yea rs in prison,

or both.

But even inside the Beltway,

decades of lax enforcement meant

lobbyists had litt le to fear from

the DOJ for failing to comply with

FARA’s disclosure requirements.

That changed in late 2017 when

Mueller indicted former Trump cam-

paign aides Paul Manafor t and Rick

Gates on charges that i ncluded their

failure to regis ter as foreign agents

under FARA in connection w ith their

lobbying work for the Ukrainian

government.

The special counsel al so used

FARA to help pressure former

National Securit y Adviser Michael

Flynn into a gui lty plea for lying

about his conversations with a

Russian diplomat. In his plea ag ree-

ment, Flynn admit ted to lobbying for

the Turkish government without reg-

istering as a foreign agent wh ile serv-

ing in the Trump campaign.

The high-profi le prosecutions

didn’t go unnoticed in D.C.’s legal

and lobbying community. “We

started ge tting calls from clients

asking if they had t o register or not

[under FAR A],” says Chris DeLacy,

a Washington, D.C.-based partner

at Holland & Knight who heads the

law fi rm’s political law group.

The fi rm is a registered foreign

agent—lobbying on behalf of clients

such as South Korea, Japan and

Gibraltar—and an adv iser on FAR A

compliance.

Especially concer ning for law fi rms

was Skadden, Ar ps, Slate, Meagher

& Flom getting caught up in the

Russia investigation. The megafi rm’s

work for former Ukraine President

Viktor F. Yanukovych, coordinate d

by Manafort, led to a S kadden asso-

ciate in February plea ding guilty

to lying about his Ukr aine-related

work.

More recently, former Skadden

partner Gregory C raig—and two

Washington lobbying fi rms hired by

Manafort—have come under scrutiny

from federal prosecutors, r eportedly

for failing to regis ter under FAR A

in connection with repre senting

Ukraine .

Prosecutors also a re considering

a civil sett lement or deferred pros-

ecution agreement with Sk adden,

according to CN N.

ON NOTICE

With FARA showing its t eeth, law

fi rms and lawyers in D.C. are under

heightened pressure to determi ne

whether the work they do for foreign

clients falls wit hin the law’s scope.

And even if they’re alr eady registered

as agents of “foreign principa ls,”

they want to be sure they ’re meeting

FARA’s reporting requirements.

“Entities currently reg istered

under FARA are tak ing this oppor-

tunity to ensure t heir fi lings a re com-

plete and accurate , and that their

internal policies and proc esses con-

tain the best prac tices necessary to

ensure they’re complying w ith the

letter and the spirit of the st atute,”

DeLacy says.

That hasn’t always been the ca se.

A September 2016 report from the

DOJ’s inspector general found that

most lobbyists were fi ling initia l reg-

istrations on time, and ha lf were

missing dea dlines to submit supple -

mental reports. Fur ther, FAR A reg-

istrations, which pea ked in the 1980s

at 916, currently total more than

400.

That same study called for t ougher

enforcement of FARA, highlighting

the dearth of prosecut ions under

the law. Between 1966 and 2015,

for example, it reported the DOJ

brought only seven crimina l FAR A

cases.

The Mueller probe aside, the DOJ

has taken a tougher sta nce on FAR A

through steps such as audit s of

FARA registr ants and a narrower

reading of the law in adv isory

opinions and informal adv ice.

That’s according to an an alysis by

Covington & Burli ng attorneys

Robert Kelner, Zachar y Parks and

Alexandra L angton in the summer

issue of PLI Current: The Journal of

the PLI Press.

An apparent result of the Russia

investigation and the IG’s report is

that new FARA regis trations have

ramped up, jumping to 101 in 2017

from 69 the prior year. They appear

to be on a similar pac e this year,

at more than 90 through the end

of October, according to the DOJ ’s

FARA database.

Major law fi rms registering since

last year—ty pically refl ec ting new

foreign client engagements—include

Baker Botts; Gibson, Dunn &

Crutcher; King & Spald ing; Manatt,

Phelps & Phillips; and McDermott

Will & Emery. About 30 fi rms overall

are listed as a ctive FARA registrants.

FINANCIAL INTERESTS

If the designation of “foreign

agent” may cause fi rms some discom-

fort, the FARA fi lings h ighlight the

monetary rewar ds that come with

that role. Foreign entities have spent

more than $659 million on lobbying

and related serv ices since just last

year, according to the Center for

Responsive Politics’ Foreign Lobby

Wat ch .

The online to ol that launched

in August calcu lates fi gur es from

FARA registr ants’ semiannual activ-

ity reports, which i nclude fees and