DC District Court Holds DOJ Cannot Compel Retroactive FARA Registration

On October 12, 2022, in a much-watched Foreign Agents Registration Act (FARA) suit, the US District Court for the District of Columbia dismissed the Department of Justice’s attempt to force casino magnate Stephen Wynn to register retroactively as an agent of the People’s Republic of China (PRC). In rejecting DOJ’s first affirmative civil FARA suit in over 30 years, the court held that it was bound to dismiss the case under DC Circuit precedent establishing that FARA’s registration obligation ends when the agency relationship terminates. In addition to providing important analysis of the limits of FARA’s registration regime (and highlighting counterarguments to DC Circuit precedent on the topic), Judge James Boasberg’s opinion is an interesting read, and not just because it twice quotes lyrics of The Fugees, the ’90s hip-hop group whose member Prakazrel Michel was allegedly involved in a relevant meeting.

In the suit, DOJ alleged that in 2017 the PRC’s Vice Minister for Public Security held a meeting with Elliott Broidy, a former finance chair of the Republican National Committee, seeking to have the Trump Administration cancel the visa of a Chinese businessperson who faced corruption charges in China. Broidy then allegedly went to Wynn—then the RNC’s finance chair—on the Vice Minister’s behalf, believing that Wynn was well placed to secure the visa cancellation. The suit further asserted that Wynn eventually was put in touch with the Vice Minister directly and ultimately conveyed the Vice Minister’s request at a dinner with President Trump in June 2017, as well as in subsequent meetings with White House officials. Within a few months, Wynn allegedly came to see that he was unlikely to be successful, so he notified the Vice Minister and stopped his efforts.

A few months later, DOJ advised Wynn that his activities placed him under an obligation to register as a Chinese agent. Wynn disputed that he had any such obligation, and for four years DOJ and Wynn’s counsel argued back and forth about whether registration was required. Ultimately, on April 13, 2022, DOJ filed suit to compel Wynn to register as having been a Chinese agent during the time that he had been acting on the PRC’s behalf. (Broidy and another participant in the original meeting have pleaded guilty to related criminal offenses. Michel awaits trial.)

Declining to address the “meaty constitutional issues” that Wynn raised, Judge Boasberg viewed the case as hinging simply on when FARA’s registration obligation ends. This question, in turn, required the court to construe 22 USC § 612(a)’s provision that “termination of [agent] status shall not relieve such agent from his obligation to file a registration statement for the period during which he was an agent of a foreign principal.” As the court explained, there are two possible readings of this clause. In one, the phrase “for the period during which he was an agent” modifies “obligation.” This reading of § 612(a) would favor Wynn, because his registration obligation would have ended when his alleged agency relationship ended. Under the other reading, the “for the period” phrase modifies “registration statement.” This reading would help DOJ, because it would impose an unending obligation to register for a past agency relationship, with the relevant language read to say that the statement need only include information from the period of the agency relationship.

In a prior case, United States v. McGoff, 831 F.2d 1071 (DC Cir. 1987), the DC Circuit construed § 612(a) in order to determine when FARA’s statute of limitations begins to run in the criminal enforcement setting. McGoff adopted the more defendant-friendly reading—i.e., that the registration obligation ends when the agency relationship ends. Judge Boasberg held that McGoff barred the DOJ’s suit against Wynn, quoting Judge Bork’s dissent in McGoff, which anticipated this very situation: “if the obligation to file ends with the termination of the agency relationship, then regardless of what the statute of limitations may be, the United States will be unable to use an injunction to compel registration, since the agent is no longer under any obligation to register.” Judge Boasberg explained that although he was applying the McGoff majority’s binding conclusion on this close question of statutory interpretation, he personally found Judge Bork’s dissenting interpretation of § 612(a), which aligned with the government’s reading, to be more persuasive.

DOJ sought to avoid McGoff on two grounds, each of which the court rejected. First, the court easily dispensed with DOJ’s argument that McGoff’s discussion of § 612(a) had been dicta given the centrality of the question there. Second, the court did not indulge DOJ’s attempt to distinguish this case from the criminal context in which McGoff arose, noting that the fundamental statutory interpretation would apply to both contexts.

This ruling provides some predictability for those who terminate their agency relationships, but it does not resolve many of the questions raised by Wynn’s lawsuit. For example, the whole case was brought about by his disagreement with DOJ’s assessment that he ever needed to register—an issue the district court explicitly declined to resolve. We’ll continue to watch this case to see if DOJ appeals.

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.