The US Foreign Agents Registration Act (FARA): Key Issues to Watch in 2024

With recent high-profile prosecutions continuing to draw attention to the Foreign Agents Registration Act (FARA) and related political laws, and a number of notable announcements by Department of Justice (DOJ) officials at a recent conference for practitioners,¹ we anticipate continued focus on this enforcement area in 2024. This Legal Update details several issues to watch for.

1. High-Profile Prosecutions and Other Enforcement Actions

Recent criminal prosecutions and other enforcement actions reflect a continued willingness to tackle covert political influence, albeit under statutes that might be considered “FARA-adjacent” or through alternative resolutions.
In August 2023, Prakazrel “Pras” Michel (formerly a member of the hip hop group the Fugees) joined the coterie of individuals convicted for efforts to influence the federal government to send a Chinese national back to China and to drop the criminal investigation related to the international strategic and development company known as 1Malaysia Development Berhad (1MDB). Among other crimes, Michel was convicted of willfully failing to register under FARA as well as violating an espionage-like statute, 18 U.S.C. § 951, that prohibits acting as an undisclosed agent of a foreign government, a crime that is often conflated with FARA. (Among other distinctions, Section 951 has a lower standard of intent, but it is limited to work on behalf of foreign governments.)

The October 2023 superseding indictment of Senator Robert Menendez and his wife on allegations they accepted hundreds of thousands of dollars of bribes in exchange for Menendez’s agreement to use his official position to protect and enrich them and to benefit the Government of Egypt (also recently expanded to include Qatar) was notable for more than pictures of gold bars and stacks of cash. DOJ chose to charge Menendez not with failing to register under FARA per se, nor with violating Section 951, but with conspiring to act as an agent under FARA while serving as a public official—a related but separate, criminal prohibition as to which registration is irrelevant, 18 U.S.C. § 219. In doing so, DOJ gave up the possibility of a 10-year prison sentence under Section 951, but it may have simplified its burden of proof: Section 219, on its face and unlike FARA itself, does not require willfulness, i.e., knowledge that Menendez was required to register under FARA. In addition, in charging a criminal violation narrowly tailored to public officials, DOJ might avoid some of the challenges it has faced in convincing judges and juries under Section 951 (witness the acquittal of Tom Barrack in 2022 and last year’s decision not to retry Bijan Rafiekian).

DOJ’s enforcement efforts have not been limited to pursuing criminal convictions alone. On January 2, 2024, DOJ revealed deferred prosecution agreements with two individuals, Barry Bennett and Doug Watts, in which they agreed that they failed to disclose covered activities as agents of Qatar (though Bennett had disclosed others). According to press reports and court documents, the men established a cutout for the Qatari government, known as “Yemen Crisis Watch,” intended to draw negative attention to Saudi Arabia’s role in the Yemeni conflict, “thereby to improve [Qatar’s] standing with the U.S. government relative to this rival.” The men agreed that FARA’s humanitarian exemption, 22 U.S.C. § 613(d)(3), did not apply to their activities, because they were not limited to collecting funds to be used “only . . . to relieve human suffering.” Raising awareness of a humanitarian crisis for the purpose of tarnishing a country’s reputation did not qualify, according to the agreement.

Bennett was charged with making false statements under both 18 U.S.C. § 1001 and FARA, while Watts was charged with willfully failing to register under FARA and making false statements under Section 1001. Under the terms of the deferred prosecution agreements, both men agreed to pay criminal fines totaling $125,000 (notable because FARA itself contains no civil financial penalties) and to avoid engaging in any conduct that would require registration under FARA for the terms of the agreements; provided they comply with those agreements, the charges will be dismissed. The case comes on the heels of remarks by the Deputy Assistant Attorney General (DAAG) responsible for FARA enforcement, Eun Young Choi, in which she referred to “more aggressive and more capable . . . stealth influence campaigns” by “certain Gulf States” and noted that FARA would be enforced in an “even-handed” way beyond the countries frequently mentioned as countries of national concern to the United States (namely, China, Russia, Iran, and North Korea).

Finally, last year DOJ sought a civil injunction (its third in four years) to compel a delinquent FARA registrant, Federación de Alcaldes Pedaneo (FDAP), to bring its filings into compliance with the law by filing supplemental registration statements and its bylaws and charter and paying associated filing fees. In October, the court entered a default judgment against FDAP, granting that relief.

2. Whether the Obligation to File Under FARA Continues Post-Agency

In November 2023, the D.C. Circuit heard oral arguments in an appeal of the district court’s decision to dismiss a civil suit by DOJ that sought to compel Steve Wynn to register as a foreign agent. That decision held that Wynn could not be compelled to register because, citing D.C. Circuit precedent, “the statutory obligation to file expires when the agent ceases activities on behalf of the foreign principal.”² That decision would seem to severely limit DOJ’s ability to seek civil injunctions to enforce the law since unregistered agents would appear to be able to avoid being required to register by terminating the relationship with a foreign principal (though they might be vulnerable to criminal prosecution). The ruling came as a surprise to many (as it ran counter to DOJ’s long-standing enforcement practice of requesting registrations, without regard to whether the agency relationship had terminated), and it provoked a bipartisan legislative proposal to clarify the law in the way the district court suggested in its decision.

Even if the panel agrees with the district court that circuit precedent compels that result (a decision is expected this year), that may not end the question, both because of the possibility for en banc review by the entire D.C. Circuit as well as DOJ’s ability to seek enforcement actions elsewhere. At the recent FARA conference, one of the government speakers (Jennifer Gellie, the acting chief of the Counterintelligence and Export Control Section and former chief of the FARA Unit) pointed out that the D.C. Circuit’s precedent would not bind other courts, which might agree with the district court that McGoff was, as she put it, “wrongly decided,” and she pointed to the Southern District of New York and the Second Circuit (where there is at least some FARA caselaw) as a promising venue. Gellie also said that most recipients of voluntary “notices of inquiry” have continued to cooperate with DOJ’s investigations rather than pointing to Wynn and telling the government to “pound sand,” and that if the facts of a voluntary administrative investigation were too “smokey,” DOJ could respond with compulsory, criminal process (including grand jury subpoenas). Another conference speaker, FARA Unit Chief Evan Turgeon, pointed to a recent agreement between DOJ’s National Security Division (NSD, where the FARA Unit sits) and the U.S. Attorney’s Office (USAO) in D.C. that gives NSD attorneys access to the grand juries in D.C. for the purpose of issuing subpoenas in their cases without requiring USAO approval or an open case in that office, which would streamline the opening of criminal FARA cases.

3. Forthcoming Regulations

The regulations implementing FARA, 28 C.F.R., pt. 5, were last revised in 2007. In December 2021, DOJ issued an advanced notice of proposed rulemaking soliciting input on 19 questions about how to revise the regulations. No draft regulation has emerged yet, but at the recent FARA conference, Gellie previewed some of the more significant changes that DOJ is likely to propose “soon.” In addition to providing more specific guidance on how to label informational materials on social media and expanding the legal exemption to take into account the "normal bounds of legal representation" outside formal proceedings themselves, DOJ may seek to reshape the so-called "Commercial Exemption," 22 U.S.C. § 613(d)(2), whose regulations currently exempt political activities by companies provided they don't directly promote foreign government interests, to reach political activities that predominantly benefit any foreign entities, including parent companies. This would make another popular exemption for certain parties registered under the Lobbying Disclosure Act (LDA) (which DOJ is also seeking to repeal) all the more significant and require registration by U.S. subsidiaries that engage in registrable conduct that does not qualify as lobbying.

4. Legislative and Other Priorities

As we wrote over the summer, despite the introduction last year of a  bipartisan, bicameral bill on FARA reform, the odds of legislative change are diminished in an election year with slim majorities in both houses of Congress. Still, DOJ has recently become more vocal and explicit about its legislative goals for the statute. In her recent remarks at the FARA conference, DAAG Choi highlighted four priorities with “broad administration support”: (1) obtaining authority to issue civil investigative demands; (2) creating civil penalties for FARA violations; (3) eliminating the exemption to file under FARA for those lobbyists who work on behalf of foreign commercial interests and who register under the LDA; and (4) "fixing" the statute to address McGoff and the district court ruling in the Wynn case.

Meanwhile, in the absence of legislative change, DOJ shows every sign of continuing the increase in enforcement of FARA that began in or about 2016. According to DAAG Choi, the FARA Unit conducted 25 inspections in 2023, the highest number since 1985, continuing a trend of increased oversight of FARA registrants. The FARA Unit has also added both a new analyst and a new civil attorney to bring civil enforcement matters.

Taken together, last year’s pattern of enforcement activity—running the gamut from traditional jury trials for criminal FARA violations to alternative criminal dispositions and civil enforcement actions—reflects continued prioritization of FARA, which DAAG Choi grouped with DOJ’s stated prioritization of corporate criminal enforcement of laws relating to national security.

¹ https://www.americanconference.com/fara/ (Dec. 1, 2023) (hereinafter, the “recent FARA conference”).

² United States v. McGoff, 831 F.2d 1071, 1082 (D.C. Cir. 1987).