Guest Column, Lobbying law, New in Lobbying

Opinion: Congress misses an opportunity to better regulate foreign corporate lobbying

On March 3, the US House of Representatives passed H.R. 1, the For the People Act. The legislation is a broad-based ethics and election reform bill with wide-ranging anti-corruption and election access provisions, including efforts to facilitate voter registration and better regulate online political advertising. 

Two provisions of the bill bear particular mention for their impact on foreign influence actors.

First is Subtitle B: the DISCLOSE Act. This provision clarifies that the federal prohibition on foreign campaign donations applies not only to candidate-based elections but also to ballot initiatives and referenda.  For years, the press and open-government groups have decried the FEC’s unwillingness (or inability)  to prohibit foreign funders’ involvement in ballot initiative campaigns.

As this site (and others) have noted, foreign entities’ involvement in US ballot initiatives has prompted a number of public relations firms to register under the Foreign Agents Registration Act (FARA) for their work in these sorts of campaigns. And state legislatures themselves have repeatedly taken up the mantel of reform in this area. 

H.R. 1 would make that sort of foreign involvement unlawful across the board and close the foreign donor loophole in ballot initiative campaigns, a worthwhile goal.


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The bill also squarely addresses FARA reform, though it’s not clear that the proposed changes have any real teeth.

First, Section 7101 of the bill calls for the establishment of a “unit within the counterespionage section of the National Security Division of the Department of Justice with responsibility for the enforcement of this Act.” That unit, of course, already exists (as its former boss Brandon Van Grack wryly pointed out on Twitter). 

And Section 7104 requires the Justice Department to implement digitized and online filings and a searchable database — something the department has been rolling out for years. 

Bur perhaps the only FARA reform with real reach is the provision that would permit the imposition of civil monetary penalties for certain violations (Section 7102).

As readers who have followed prior congressional attempts to reform FARA are aware, one area of frequent discussion has been the so-called “LDA exemption.” Under that exemption, an agent who engages in federal lobbying activities on behalf of private, non-governmental clients, may elect to register under the far less onerous domestic Lobbying Disclosure Act than under FARA, so long as foreign governments or political parties aren’t principal beneficiaries of the lobbying work.

This exemption, which Congress created in 1995, has the practical effect of shifting the disclosure regime for foreign private sector lobbying from FARA to the LDA. H.R.1 would leave the exemption in place for now, instead instructing the Comptroller General to promptly report to Congress on the implications of the LDA exemption.

There is, and should be, public debate over whether the purposes of FARA — originally and largely aimed at combatting foreign government influence actors— should apply equally to lobbying on behalf of foreign corporations, particularly when those efforts would be disclosed under an alternative statute. There is also considerable debate over the LDA itself — and whether the disclosures required of traditional “domestic” lobbyists are robust enough to accomplish that law’s purpose.

A study seems to be the right way to proceed on this issue, at least initially, and it seems wise to avoid conflating FARA’s problems with those of the LDA.  FARA enforcement can be made more robust even as efforts are simultaneously undertaken to fix the LDA’s loopholes and weak reporting requirements, without forcing a counter-espionage statute onto commercial lobbying efforts by Lufthansa.

But by failing to go beyond a mere study of the effects of FARA’s LDA exemption, Congress missed an opportunity to impose some consistency and rationality on advocacy regulations.

For example, contingent fees tying payment to lobbying success are prohibited for FARA registrants, but not for traditional domestic lobbying, despite what may be equal (or greater) risks of corruption from the far more numerous LDA registrants.  And if Congress’s intent with the LDA was to increase the disclosure of the “identity…and extent of the efforts of paid lobbyists to influence public officials”, then it makes little sense for the LDA to permit lobbying-related income to be rounded and approximated, when FARA registrants must disclose income and disbursements to the penny.

These are LDA problems first and foremost, and Congress could have spent time in H.R. 1 sorting out some of these key ethics and transparency gaps in these two areas where FARA got it right and the LDA lags behind.  H.R.1 does include some attempts to broaden the reach of the LDA, but misses a real opportunity to fix some of the law’s more fundamental issues.

In any event, perhaps this is all foofaraw.  Absent filibuster reform, H.R.1’s future in the Senate seems bleak.


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