Guest Column, Lobbying law, New in Lobbying, Transparency

New US enforcement priorities: What influence actors need to know to stay out of trouble

On Friday, Dec. 4, the American Conference Institute hosted its second annual National Forum on FARA, the Foreign Agents Registration Act. Deputy Assistant Attorney General for the National Security Division Adam Hickey delivered the conference’s keynote address, breaking new ground and reaffirming quite explicitly things that many in the FARA bar already suspected. The speech should serve as additional warning that FARA is front and center among the Justice Department’s enforcement priorities.

First: FARA Chief Brandon Van Grack last year indicated that his unit was taking a more expansive view of the reach of FARA to actors located outside the United States, even though the statutory language states that regulated actors must conduct activities  “within the United States.” Hickey re-emphasized this position, noting that “even those without a physical presence here are capable of acting ‘within’ the United States, by virtue of the Internet and mail.” The ramifications of this view can’t be overstated. And the specific mention of the internet will likely lead to confusion and inconsistent application.

Broadly, the takeaway is that internationally located communications, public relations, and public affairs firms that represent foreign principals and conduct their work entirely abroad may still be required to register if they direct their activities at a US audience. Essentially, the Department of Justice (DOJ) is saying, you can’t evade FARA by relocating from Buffalo to Toronto. But questions abound because the FARA law dates back to 1938 is old and not suited to modern business or technology.

The mention of the internet as a “hook” in going after actors abroad poses incredibly complicated issues that don’t squarely fit within DOJ’s warning. Here are a couple of hypotheticals:

  • What if a foreign PR firm maintains a website on behalf of a foreign government, but the website is hosted on a server farm in Iceland?  Is the mere fact that influence efforts may be aimed at a US audience via a website which can be accessed from inside the United States sufficient to bring them under FARA’s ambit? Or does there need to be something more?
  • What if a press agent works to secure positive news coverage for a principal abroad, and understands that a US audience may read a foreign-language website for the outlet, even though they aren’t the target audience?
  • What level of internet use is enough to create a nexus with the United States?  Is it enough if a foreign lobbying firm sends emails to advise a foreign government on a strategy about how to interact with the incoming Joe Biden administration? 
  • Do emails need to be sent into the United States to trigger FARA, or is the fact that emails may be routed (even unknowingly) through a US-based server enough? Would a London-based communications professional be subject to the law if she used WhatsApp to message a New York-based reporter?

The mention of the internet as a “hook” in going after actors abroad poses incredibly complicated issues.

These are important questions that need resolution if DOJ is going to continue its expansive application of FARA’s territorial application. And they ideally need resolution prior to DOJ indicting someone for violating the law.


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Second: buried in a statement about registration by arms of foreign state-run media firms was this point: “FARA only applies to those acting under the direction or control of a foreign principal, but the US subsidiary of any foreign company is likely to qualify based on the principals for corporate law.” This position is also extraordinarily broad but more plainly justifiable based on the statute, which treats as an “agent” any entity which is controlled or directed by, any foreign principal.

Of course, any number of US subsidiaries have foreign parents who may, even without state ownership or control, and even without the knowledge of US subsidiaries, be working in concert with foreign governments. If Mitsubishi relays a concern from the Japanese government about pending tariffs to its US subsidiary, then DOJ’s statement falls into stark relief: Mitsubishi’s US subsidiary may well need to register under FARA if it undertakes any lobbying on the tariff issue.

These sort of cross-border communications among parent and subsidiary are obviously common, but if FARA is triggered then the level of disclosure required would be unprecedented: Potentially all transfers of cash between parent and subsidiary (by date, no less) would need to be disclosed. All other “items of value” transferred, likewise (holiday cards or gifts for the upper level management? What about shared staff time between and across multiple corporate entities?). Corporations, beware.

Finally: Hickey noted, again in the context of state-run media outlets, that the Justice Department’s focus is on the level of control and direction exercised on editorial content by the parent media companies. But Hickey also noted that there is a difference in enforcement priority depending on whether the media firm is owned or run by an “autocrat” or monarchy or rather is owned by a democratic government with a reputation for transparency. 

It seems to me that this point applies more widely, and underscores what the FARA bar had thought was the case for quite some time: While the statute is agnostic as to the location of the foreign principal, given limited resources, the federal government is not. For example, because China’s political involvement in the private sector is both opaque and pervasive, and because China is not a particularly friendly regime, the Justice Department can be expected to pay more attention to work for Chinese principals (including US subsidiaries) than it does to companies based out of Ottawa. 

A short speech, and lots to unpack—with big ramifications for foreign influence.