National Pulse

Full disclosures: In the wake of the Mueller investigation, law firms are making sure they comply with the Foreign Agents Registration Act

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Before special counsel Robert Mueller’s investigation of Russian interference in the 2016 election, few outside Washington, D.C., had ever heard of the Foreign Agents Registration Act.

Enacted in 1938, the act requires anyone lobbying or doing public relations for a foreign government, company or other entity to register with the Department of Justice and file detailed reports about their work every six months. Intentionally violating the law carries a fine of up to $10,000 or five years in prison, or both.

But even inside the Beltway, decades of lax enforcement meant lobbyists had little to fear from the DOJ for failing to comply with FARA’s disclosure requirements.

That changed in late 2017 when Mueller indicted former Trump campaign aides Paul Manafort and Rick Gates on charges that included their failure to register as foreign agents under FARA in connection with their lobbying work for the Ukrainian government.

The special counsel also used FARA to help pressure former National Security Adviser Michael Flynn into a guilty plea for lying about his conversations with a Russian diplomat. In his plea agreement, Flynn admitted to lobbying for the Turkish government without registering as a foreign agent while serving in the Trump campaign.

The high-profile prosecutions didn’t go unnoticed in D.C.’s legal and lobbying community. “We started getting calls from clients asking if they had to register or not [under FARA],” says Chris DeLacy, a Washington, D.C.-based partner at Holland & Knight who heads the law firm’s political law group.

The firm is a registered foreign agent—lobbying on behalf of clients such as South Korea, Japan and Gibraltar—and an adviser on FARA compliance.

Especially concerning for law firms was Skadden, Arps, Slate, Meagher & Flom getting caught up in the Russia investigation. The megafirm’s work for former Ukraine President Viktor F. Yanukovych, coordinated by Manafort, led to a Skadden associate in February pleading guilty to lying about his Ukraine-related work.

More recently, former Skadden partner Gregory Craig—and two Washington lobbying firms hired by Manafort—have come under scrutiny from federal prosecutors, reportedly for failing to register under FARA in connection with representing Ukraine.

Prosecutors also are considering a civil settlement or deferred prosecution agreement with Skadden, according to CNN.

On notice

With FARA showing its teeth, law firms and lawyers in D.C. are under heightened pressure to determine whether the work they do for foreign clients falls within the law’s scope. And even if they’re already registered as agents of “foreign principals,” they want to be sure they’re meeting FARA’s reporting requirements.

“Entities currently registered under FARA are taking this opportunity to ensure their filings are complete and accurate, and that their internal policies and processes contain the best practices necessary to ensure they’re complying with the letter and the spirit of the statute,” DeLacy says.

That hasn’t always been the case. A September 2016 report from the DOJ’s inspector general found that most lobbyists were filing initial registrations on time, and half were missing deadlines to submit supplemental reports. Further, FARA registrations, which peaked in the 1980s at 916, currently total more than 400.

That same study called for tougher enforcement of FARA, highlighting the dearth of prosecutions under the law. Between 1966 and 2015, for example, it reported the DOJ brought only seven criminal FARA cases.

The Mueller probe aside, the DOJ has taken a tougher stance on FARA through steps such as audits of FARA registrants and a narrower reading of the law in advisory opinions and informal advice. That’s according to an analysis by Covington & Burling attorneys Robert Kelner, Zachary Parks and Alexandra Langton 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 registrations have ramped up, jumping to 101 in 2017 from 69 the prior year. They appear to be on a similar pace this year, at more than 90 through the end of October, according to the DOJ’s FARA database.

Major law firms registering since last year—typically reflecting new foreign client engagements—include Baker Botts; Gibson, Dunn & Crutcher; King & Spalding; Manatt, Phelps & Phillips; and McDermott Will & Emery. About 30 firms overall are listed as active FARA registrants.

Financial interests

If the designation of “foreign agent” may cause firms some discomfort, the FARA filings highlight the monetary rewards that come with that role. Foreign entities have spent more than $659 million on lobbying and related services since just last year, according to the Center for Responsive Politics’ Foreign Lobby Watch.

The online tool that launched in August calculates figures from FARA registrants’ semiannual activity reports, which include fees and expenses paid by clients.


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