American Conference Institute’s 6th National Forum on FARA

Headlines

• The U.S. Department of Justice (DOJ)’s enforcement numbers under the Foreign Agents Registration Act (FARA) continue to rise across many metrics, with Congress also increasingly focused on FARA legislation and referrals.
• The FARA bar discussed recent enforcement actions and congressional investigations under FARA and related statutes — including the cases of Steve Wynn, Robert Menendez, Linda Sun, and Sue Mi Terry — and commented on DOJ’s mixed record of success in past cases.
• DOJ expects to publish its long-awaited Notice of Proposed Rulemaking (NPRM) in January 2025.
• DOJ officials elaborated on its interpretation of the § 613(d)(2) exemption for “other activities not serving predominantly a foreign interest,” which DOJ now characterizes as a “domestic interest” exemption.
• DOJ is increasing its focus on corporate enforcement of FARA and encourages eligible companies to avail themselves of the National Security Division’s March 2024 corporate voluntary self-disclosure policy.
• FARA practitioners discussed and debated a wide range of issues related to the interpretation and enforcement of FARA, recognizing that although recent advisory opinions and enforcement actions shed some light on DOJ’s understanding of the statute, significant analytical questions and gray areas remain.

On December 6, the American Conference Institute held its 6th National Forum on FARA, which was co-chaired by our own Amy Jeffress and featured Murad Hussain and Kaitlin Konkel as panelists. The FARA bar gathered to exchange ideas and commentary about developments in the law over the past year and what to expect going into the next presidential administration. The Forum also hosted current DOJ and FBI officials who oversee the government’s FARA enforcement. Practitioners heard a keynote address by Eun Young Choi, Deputy Assistant Attorney General for DOJ’s National Security Division (NSD), and participated in interactive discussions with Jennifer Gellie, Executive Deputy Chief performing the duties of Chief Counterintelligence & Export Control Section and former Chief of the FARA Unit; Ian Richardson, NSD’s Chief Counsel for Corporate Enforcement; Evan Turgeon, current Chief of the FARA Unit; and Ewura Esi Arthur, Section Chief of the FBI.

Key Takeaways

Reflecting on 2024 and looking ahead to 2025, DOJ and FBI officials reaffirmed that they view FARA as a key tool for combating what they repeatedly described as “foreign malign influence,” in part because FARA is a “flexible” authority. Officials announced increasing numbers of registrants and inspections, emphasized that corporate enforcement of FARA is a growing priority for DOJ, and forecasted that they expect to release a long-awaited NPRM next month. They also fielded questions about DOJ’s understanding of FARA’s statutory exemptions and the statute’s concept of “agency,” as well as DOJ’s approach to advisory opinions and Letters of Inquiry (also known as “Possible Obligation to Register” letters).

In line with past conferences, FARA practitioners engaged in spirited discussion and debate about the proper interpretation and application of the statute. Panelists addressed such topics as the post-election outlook for FARA enforcement, recent prosecutions, issues affecting non-profit organizations and diaspora communities, the scope of FARA’s exemptions, proposed legislation at the federal and state levels, and practical aspects of representing clients in FARA matters.

Year in Review. There continue to be over 500 FARA registrants, with 120 new registrants in the past year. This increase is part of a steady rise in registrations over the past three years, with 2024 being the sixth year in which the number of FARA registrants exceeded 500. The FARA Unit conducted 26 inspections, the most since 1977, and one more than in 2023. Deputy Assistant Attorney General Choi stated that DOJ’s efforts to combat foreign malign influence have “never been more robust,” and FARA Unit Chief Turgeon shared that NSD’s Counterintelligence and Export Control section (which includes the FARA Unit) now has 36 criminal prosecutors and recently added two civil litigators to further DOJ’s goals.

The Forum also addressed recent criminal cases under FARA and related statutes, including Senator Robert Menendez’s conviction under 18 U.S.C. § 219 for allegedly acting as an agent of Egypt; Sue-Mi Terry’s charge for an allegedly willful failure to register under FARA after accepting gifts and “think tank” public policy program funding in exchange for advocating for South Korean policy positions in the U.S. media; and the prosecution of Linda Sun, a former high-ranking New York state government official, who was charged with violating FARA for allegedly acting as an agent of the People’s Republic of China and the Chinese Communist Party without registration.

Enforcement Priorities. Acting Chief Gellie and Chief Counsel Richardson shed light on DOJ’s increasing focus on corporate enforcement of FARA, as well as options for companies to voluntarily self-disclose. In particular, Gellie and Richardson addressed NSD’s March 2024 rollout of its corporate voluntary self-disclosure (VSD) program (“Enforcement Policy for Business Organizations”), emphasizing the roles that NSD’s VSD program and its mergers and acquisition (M&A) 180-day “safe harbor” play in FARA enforcement and compliance. They emphasized that merely registering under FARA, when one has the legal obligation to do so, is not the same as making a voluntary self-disclosure. They discussed a hypothetical scenario where a corporation acquires a subsidiary and discovers that the acquired company previously failed to register under FARA, possibly intentionally. In those circumstances, if the acquiring corporation makes a self-disclosure to NSD about the acquired company’s FARA non-compliance, and does so within 180 days of the acquisition, the corporation could still enjoy the VSD policy’s presumption that NSD would decline to prosecute for willful failure to register under FARA. Gellie and Richardson noted that NSD recently issued its first declination under its VSD policy to a company that contacted DOJ early and went “above and beyond,” disclosing its potential export control violations to DOJ prior to having a full understanding of the facts. While this first declination did not relate to FARA, DOJ signaled an appetite for companies to use the M&A 180-day safe harbor provision to disclose potential FARA violations by acquired companies.

FARA Unit Chief Turgeon confirmed that sovereign wealth funds and foreign litigation funding continue to be priorities for the FARA Unit. Turgeon and other officials emphasized that FARA applies regardless of whether the foreign country at issue is an adversary or ally, although officials also highlighted task forces and other dedicated efforts to address foreign influence by China, Russia, and Iran in particular.

Arnold & Porter’s Murad Hussain participated in a panel with other practitioners regarding the increased scrutiny from both DOJ and Congress on funding for a variety of non-profits and on foreign membership in trade associations in particular, as well as recent FARA Unit advisory opinions that appear to narrow the availability of § 613(d)(2) for non-commercial entities. When Chief Gellie was asked about DOJ’s application of FARA to non-profits, she emphasized that FARA’s scope and DOJ’s enforcement activities are viewpoint-neutral, and that the key to the § 613(d)(2) exemption is to consider whether an organization is acting predominantly in its own domestic interests or predominantly serving foreign interests.

The day before the Forum, the D.C. Circuit denied DOJ’s petition for rehearing en banc in Attorney General of the United States v. Wynn, thus letting stand a unanimous June 2024 D.C. Circuit panel ruling that DOJ cannot compel individuals to register under FARA after the end of their alleged agency relationship with a foreign principal. As we have previously written, the underlying D.C. Circuit decision explained that DOJ’s civil enforcement action against casino magnate Stephen Wynn was governed by a 1987 D.C. Circuit precedent involving a criminal FARA prosecution, United States v. McGoff, which construed FARA as imposing registration requirements only on currently existing agency relationships. At the Forum, multiple officials reiterated DOJ’s view that its hands are not necessarily tied by Wynn or McGoff, because DOJ could attempt to pursue retroactive registration outside the D.C. Circuit.

A new consideration in the FARA enforcement landscape is how Pam Bondi, President-elect Donald Trump’s pick for Attorney General, will view the use of FARA and its real world effects. Bondi herself registered as a foreign agent for her role in representing the Embassy of the State of Qatar “in matters related to combating human trafficking.” This could signal a shift in perspective for the incoming administration, both for enforcement priorities within DOJ and for the administration’s wider view of the ethical considerations of hiring a former or current registered agent for agency positions.

Potential Regulatory and Legislative Changes. DOJ officials announced that DOJ expects to release its long-awaited NPRM in January 2025. Officials encouraged members of the FARA bar and other interested parties to comment. Although the NPRM is not yet final, it will likely address DOJ’s understanding of the § 613(d)(2) exemption for “other activities not serving predominantly a foreign interest,” which DOJ officials previewed at both the 2023 and 2024 forums. The NPRM is also likely to include provisions intended to modernize FARA, such as proposed rules relating to social media.

On the legislative front, Deputy Assistant Attorney General Choi spelled out several items on DOJ’s wish list, including congressional amendments to increase the range of civil enforcement tools available to DOJ, eliminate the Lobbying Disclosure Act exemption, and require FARA registration even after the registrable activity has concluded, as was the issue in Wynn.

The Forum also addressed efforts at the U.S. state level, as well as internationally, to adopt legislation aimed at curbing domestic influence from foreign actors. Some state-led efforts to enact versions of FARA are garnering support, but they have raised concerns among companies and other potential registrants, particularly where the proposals would adopt FARA’s broad definition of agency without including the corresponding exemptions.

Advisory Opinions and Letters of Inquiry. FARA Unit Chief Turgeon highlighted the FARA Unit’s goal to include more substance in its publicly available (yet highly redacted) advisory opinions. Practitioners noted that the inclusion of additional detail in recent advisory opinions was helpful, although significant questions remain. Arnold & Porter’s Kaitlin Konkel joined a panel addressing recent advisory opinions and practice dilemmas for members of the FARA bar, and she offered her insight into the strategic and practical aspects of responding to Letters of Inquiry from DOJ.

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Our FARA team provides proactive advice to clients on their registration obligations. We also represent clients in responding to requests for information from the FARA Unit, filing initial and supplemental registration forms, preparing for inspections by the FARA Unit and FBI, and navigating criminal investigations. For questions about FARA, please reach out to the authors or any of their colleagues in Arnold & Porter’s White Collar Defense & Investigations practice group.

© Arnold & Porter Kaye Scholer LLP 2024 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.