A New Orleans magician recently made headlines for using artificial intelligence (AI) to emulate President Biden’s voice without his consent in a misleading robocall to New Hampshire voters. This was not a magic trick, but rather a demonstration of the risks AI-generated “deepfakes” pose to election integrity.  As rapidly evolving AI capabilities collide with the ongoing 2024 elections, federal and state policymakers increasingly are taking steps to protect the public from the threat of deceptive AI-generated political content.

Media generated by AI to imitate an individual’s voice or likeness present significant challenges for regulators.  As deepfakes increasingly become indistinguishable from authentic content, members of Congress, federal regulatory agencies, and third-party stakeholders all have called for action to mitigate the threats deepfakes can pose for elections.  

Several federal regulators have taken steps to explore the regulation of AI-generated content within their existing jurisdiction.  On February 8, the Federal Communications Commission issued a declaratory ruling confirming that the Telephone Consumer Protection Act restricts the use of “current AI technologies that generate human voices,” an interpretation endorsed by 26 state attorneys general. 

Last year, the Federal Election Commission (FEC) took a step toward clarifying whether AI-generated deepfakes might violate the Federal Election Campaign Act’s prohibition on deceptive campaign practices by requesting comment on whether to initiate a rulemaking on the subject.  After previously deadlocking on a petition from Public Citizen to open such a rulemaking, the FEC voted unanimously in August 2023 to accept public comment on whether to initiate rulemaking procedures, though the agency has not yet taken further action.

Members of Congress also have introduced several bills that regulate deepfakes, though these efforts have moved slowly in committee.  Many lawmakers remain determined to make progress on the issue, as senators from both parties expressed in an April Judiciary Subcommittee hearing. In March, Senators Amy Klobuchar (D-MN) and Lisa Murkowski (R-AK) introduced the bipartisan AI Transparency in Elections Act of 2024 to require clear and conspicuous disclosures in certain political communications that were created or materially altered by artificial intelligence.  Representatives Anna Eshoo (D-CA) and Neal Dunn (R-FL)—members of the House Bipartisan Task Force on Artificial Intelligence—introduced a more generally applicable deepfake disclosure bill that would also address potential impact of the technology on our elections.

Several states already have enacted prohibitions or disclosure requirements on certain forms of manipulated media related to elections, including Minnesota, Texas, and California.  These laws generally prohibit the knowing dissemination of deepfakes within one to three months of an election, and each requires intent to influence the election or the depicted candidate’s reputation.

Even with AI risks top-of-mind for policymakers at all levels, with just seven months until the 2024 general election, a full agenda in Congress, and state legislative sessions coming to a close, the prospects of major reforms in time for this cycle remain uncertain.

Federal circuit courts are split on a core question of corruption law: whether state and local officials, and agents of organizations that contract with or receive benefits from the federal government, may lawfully accept gratuities.

It is generally a federal crime for state and local officials to act in their official capacities in exchange for things of value, provided they solicit or agree to accept such benefits “corruptly.”  This is quid pro quo bribery, prohibited under 18 U.S.C. § 666.  Federal courts lack consensus, however, on whether § 666 also criminalizes scenarios wherein an official or agent of a federal program recipient acts without expectation of a thing of value, but later receives a “gratuity” to reward his or her conduct.

The Supreme Court will review the issue this term in Snyder v. United States.  The case concerns an Indiana mayor who was convicted under § 666 for accepting a $13,000 payment from a truck company that had recently won a sizeable contract with the city.

Although the merits of this case involve money given to an elected official, the statute also applies to agents of organizations that receive, in any one-year period, more than $10,000 in federal benefits, whether in the form of a contract award, grant, loan, appropriation, or other structure.  This includes a sizeable number of companies, institutions of higher education, and nonprofit organizations.  As a result, if the Supreme Court holds that § 666 criminalizes gratuities and broadly interprets the statutory standard for “corruptly” accepting things of value, covered entities may have limited capacity to receive gifts, even those unrelated to the principal’s use of federal funds.

The Supreme Court’s decision could also have significant implications for individuals, companies, and organizations that offer items or services of value to the covered officials and entities, since any gift can be scrutinized as a possible inducement or reward for exercising official powers.

This area of law spans civil and criminal provisions at the federal and state levels, and parties engaging on related matters should consider consulting with counsel.  Covington will continue to monitor developments in this space, and the firm is well positioned to assist companies and individuals navigating this area of the law.

On December 1, 2023, three top U.S. government officials responsible for enforcing the Foreign Agents Registration Act (“FARA”) gave remarks at the American Conference Institute’s 5th National Forum on FARA. In their remarks, each of the speakers – Deputy Assistant Attorney General Eun Young Choi, the Acting Chief of the Counterintelligence and Export Control Section Jennifer Gellie, and the FARA Unit Chief Evan Turgeon – reiterated and reinforced the Department’s commitment to enforcing the statute aggressively. The officials also previewed potentially substantial regulatory changes that it will propose in its forthcoming notice of proposed rulemaking (“NPRM”), along with highlighting the Department’s enforcement and legislative priorities.

In this alert, we summarize and examine these developments, each of which could have significant implications for international companies, sovereign wealth funds, and others, along with the political, legal, and public relations consultants who advise them. 

Today, Congress announced the final version of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2024.  The NDAA is an annual bill that contains important provisions related to the Department of Defense and international security, among other things.  An earlier version of the bill contained two key provisions related to the Foreign Agents Registration Act (“FARA”): The Lobbying Disclosure Improvement Act and Disclosing Foreign Influence in Lobbying Act, both of which had passed in the Senate earlier this year. The final NDAA bill released today, however, does not contain these provisions.  It is not clear why these provisions were removed.  Press reports indicate that the bill’s managers were stripping provisions over which there were disagreements between the chambers in an effort to get the annual bill passed before the holidays.  The lack of a House-passed companion provision therefore could have been fatal to the Senate’s FARA-related provisions.

More substantively, although there is bipartisan support for the regulation of foreign agents, legislators appear to be divided regarding the best approach for reform.  Senator Bob Menendez (D – N.J.), who was indicted on federal bribery charges earlier this year, has reportedly objected to reform of laws regulating foreign lobbying and has blocked similar legislation in the past.  On the other hand, Senator Grassley (R – Iowa) and others have engaged with the Department of Justice to develop comprehensive reform bills. At the recent American Conference Institute’s 5th National Forum on FARA, Department of Justice officials signaled that the Department continues to seek legislative reform to FARA.  Accordingly, Congress may take up more comprehensive legislation that addresses the Department’s legislative priorities at a later date.  Covington will continue to monitor and report on FARA legislation.

This week, the Department of Justice (DOJ) released a new memorandum from Deputy Attorney General Lisa Monaco updating its policies and procedures for criminal investigations involving Members of Congress and congressional staff.  

DOJ emphasized that investigations reaching Congress are important and “sensitive matters,” and explained that the additional guidance would address the “unique challenges” specific to such investigations.  For example, the guidance highlights constitutional protections and privileges afforded to Members of Congress, such as the Speech or Debate Clause of Article I of the Constitution, which provides immunity in the performance of legislative acts.  Furthermore, although not expressly mentioned in the memo, DOJ is also likely to consider the risk that certain investigative activity could chill the exercise of First Amendment freedoms by voters and constituents in their speech and petition rights.  

The guidelines set out in the memo are intended to strike a balance between protecting these essential rights and privileges and ensuring that investigations can continue to proceed consistent with DOJ’s overarching goal of ensuring the public’s “confidence . . . that important prosecutorial decisions will be made rationally and objectively on the merits of each case.” 

Most significantly, the memorandum outlines important changes in the mechanics of how DOJ conducts investigations relating to Members of Congress and their staff, and adds new requirements that will affirmatively require local U.S. Attorney’s Offices to consult with Main Justice in all these matters.  While DOJ’s Public Integrity Section (PIN) has long played a role in criminal investigations involving Congress, the memo adds “additional consultation and approval requirements” formalizing the exact situations in which prosecutors must consult with or receive approval from PIN.  These new requirements reflect the Department’s view that “[a]dditional supervision and coordination” by PIN is warranted. 

These additional requirements even reach investigations seeking information “associated with” Members or staff members but held by third parties (including electronically stored information).  For this reason, the guidance serves as an important reminder of the general principle that even individuals and entities who are mere witnesses—rather than investigative “target[s]” or “subject[s]”—may be swept up in a sensitive DOJ inquiry. 

The guidance describes two categories in which PIN must be involved: (1) those where prosecutors must consult PIN, and (2) those where PIN must approve certain prosecutorial decisions.  

Investigative scenarios that require the consultation of PIN include:

  • Prosecutors open a case targeting a Member of Congress (or where the Member is a subject).
  • Prosecutors issue a subpoena to a Member of Congress, congressional office, or a congressional staffer (if related to their work).
  • Prosecutors seek to initiate surveillance of accounts or devices related to a congressional staffer (if not related to their work).
  • Prosecutors seek to interview a Member of Congress or congressional staffer (unless they are the victim of a crime, see below).
  • Prosecutors bring charges in a matter where a Member of Congress is a subject or target for activities unrelated to their official role or campaign activities.
  • Prosecutors resolve charges against a congressional staffer in a matter in which a Member of Congress is not a subject or target.

Prosecutorial decisions requiring approval by PIN include:

  • Prosecutors issue a subpoena to a third party seeking records belonging to a Member of Congress, congressional office, or a congressional staffer (if related to their work).
  • Prosecutors issue a subpoena or seek court orders asking a third party for data belonging to a Member of Congress, congressional office, or congressional staffer (if related to their work).
  • Prosecutors seek to initiate surveillance of accounts or devices related to a Member of Congress, congressional office, or congressional staffer (if related to their work).
  • Prosecutors direct a source or cooperating witness to have contact with a Member of Congress or congressional staffer.
  • Prosecutors apply for a warrant which will seek information or property which belongs to a Member of Congress, congressional office, or congressional staffer, or covers any place where “[l]egislative [m]aterials [a]re [l]ikely [t]o [b]e [f]ound.”
  • Prosecutors apply for Title III surveillance where a Member of Congress or congressional staffer’s communications may be intercepted or monitor oral communications of a Member or staffer with consent.
  • Prosecutors bring charges in a matter where a Member of Congress is a subject or target for activities related to their official role or campaign activities.
  • Prosecutors resolve charges in an investigation where a Member of Congress is a subject or target.

Notably, when a Member of Congress or their staff is the victim of a crime, prosecutors are not required to involve PIN, although they are encouraged to confer with PIN regarding communications with the Member or staffer.  This additional guidance does not replace the general requirement that DOJ consult with their internal Office of Legislative Affairs (OLA) before contacting Congress, congressional committees, and congressional staffers.  

DOJ’s new guidance raises three crucial takeaways for future DOJ investigations which involve Members of Congress, their offices, or their staff members.  First, to the extent that it was uncertain before what role PIN would play in these matters, it is now clear that PIN will be heavily involved, in either a consultative or supervisory role.  Put another way, any person or entity involved in a criminal investigation relating to Congress should expect to deal with prosecutors from PIN.  Second, the guidance may signal that DOJ anticipates additional investigations that reach the Hill are forthcoming.  Finally, third parties (such as technology and communications companies) which store data belonging to Members and their staffers should be aware of these new procedural requirements and seek legal counsel when necessary to help navigate the process. 

Companies, organizations, and people which receive an inquiry related to an investigation involving Congress should ensure that they understand this new guidance as well as other applicable laws, regulations, and procedures.  If you have any questions concerning the material discussed in this client alert, please contact the members of our Election & Political Law, White Collar, and Congressional Investigations practices.  

The Federal Election Commission (FEC) officially dipped its toes into the ongoing national debate around artificial intelligence (AI) regulation, publishing a Federal Register notice seeking comment on a petition submitted by Public Citizen to initiate a rulemaking to clarify that the Federal Election Campaign Act (FECA) prohibits deceptive AI-generated campaign advertisements.  The Commission unanimously approved publication of the petition at its August 10 meeting

The public is being asked to comment on whether the FEC should initiate a formal rulemaking to specify that using false AI-generated content, sometimes called “deepfakes,” in campaign ads would violate FECA’s prohibition on fraudulent misrepresentation of campaign authority (52 U.S.C. § 30124).  Currently, there are no AI-specific FEC regulations or guidance governing campaign ads or fundraising.

The decision to seek comment on the petition follows the FEC’s June deadlock on an earlier petition from Public Citizen. FEC Republicans, led by Commissioner Allen Dickerson, argued that the FEC has no authority to address AI-generated or “deepfake” campaign ads under FECA, and should not make rules without further guidance from Congress.  

However, the decision to seek public comment does not mean that the Commission will ultimately issue a proposed rulemaking, much less adopt new AI-specific rules.  The Commission remains divided on whether it has the statutory authority to address AI issues at all.  In voting to advance the petition in June, Democratic FEC Chair Dara Lindenbaum indicated she was “skeptical” that the FEC has existing authority to regulate AI, but supported publishing the petition in the hope of receiving helpful comments on the issue.  At the August 10 meeting, Commissioner Dickerson, despite voting to publish the petition, reiterated his view that this remains an issue for Congress and noted “serious First Amendment concerns lurking in the background of this effort.”

Partisan divisions in Congress also mean an expansion of the Commission’s authority to encompass AI-generated ads is unlikely to become law anytime soon.  In May, Rep. Yvette Clark (D-NY) introduced the REAL Political Advertisements Act legislation to give the FEC authority to regulate the use of AI in campaign ads.  Senators Amy Klobuchar (D-MN), Cory Booker (D-NJ), and Michael Bennet (D-CO) have also introduced a Senate companion bill.  No Republican Members of Congress have yet cosponsored either bill, nor did any congressional Republicans join 27 of their House and Senate colleagues on a July letter to the FEC urging it to move forward with the rulemaking petition.

The FEC will accept public comments on whether to initiate a rulemaking process until October 16, 2023.  

Last week, a bipartisan, bicameral group of legislators introduced the Retroactive Foreign Agents Registration Act (“RFARA”) in the U.S. Congress.  Led by Chairman Mike Gallagher (R-Wis.) and Ranking Member Raja Krishnamoorthi (D-Ill.) of the U.S. House Select Committee on the Chinese Communist Party, the bill would amend the Foreign Agents Registration Act (“FARA”) to clarify that foreign agents have an ongoing obligation to register under the statute even after ceasing to act on behalf of a foreign principal.  The bill was prompted by a recent decision in Attorney General of the United States v. Wynn, which interpreted the statute’s requirements.

Wynn Decision

In Wynn, the Department of Justice (“DOJ”) pursued a civil injunction to force Stephen Wynn to register retroactively for activities allegedly conducted on behalf of the People’s Republic of China (“PRC”).  In a ruling that surprised the FARA bar, a federal district court judge in Washington, D.C. dismissed the complaint, holding that because Mr. Wynn terminated his agency relationship with the PRC — if one even existed — prior to the lawsuit, as both parties has acknowledged, Mr. Wynn no longer had an obligation to register.  The court concluded that he therefore could not be enjoined to register under FARA, even retroactively. The court’s reasoning underlying its holding was complicated and based on a prior D.C. Circuit case, United States v. McGoff, and textual analysis of the statutory provision relating specifically to civil injunctive actions.  The government has appealed the district court decision, and the appeal is pending.

Congress’s Response

Although the Wynn decision only applies in the D.C. Circuit, Members of Congress have expressed concerns that the Wynn decision could have more far-reaching consequences.  For example, a recent press release lamented that “an unregistered agent could simply announce that he is ending the agent relationship, never register, and face no penalty.”

The new legislation is designed to overturn the conclusion in Wynn.  The bill provides that DOJ “may make application for an order requiring a person to comply with [FARA and its regulations] . . . while the person acts as an agent of a foreign principal or at any time thereafter.”  Additionally, the bill makes clear that it applies to any individual who “serves as the agent of a foreign principal . . . at any time before, on, or after the date of the enactment [of the Act.].”  Accordingly, agents that have previously relied on the Wynn decision as a basis for non-registration would have new registration obligations under this bill, if enacted.

Curiously, the language of the bill only applies to “any individual who serves as the agent of a foreign principal.”  This language would seemingly not extend to partnerships, associations, corporations, organizations, or any other combinations of individuals currently covered by the definition of a “person” under the statute.  It is unclear whether Congress intends that the bill will only cover individuals like Mr. Wynn or whether the reference to “any individual” was a drafting error that could be changed in future iterations of the bill.

What Comes Next?

Given the strong bicameral and bipartisan support to regulate foreign agents, there may be an appetite in the full House to consider the bill.   As we previously reported, there are a number of other bipartisan bills related to FARA reform pending in Congress, revealing Congress’s continued bipartisan attention to the statute.  Covington will continue to monitor developments in changes to FARA and its regulations.

California recently passed a series of new regulations affecting its “pay-to-play” laws that limit political contributions by state and local government contractors and others involved in proceedings on contracts, licenses, permits, and other “entitlements for use” in the state.  These regulations implement changes to the law that took effect this year, which include applying the law to contributions to local elected officials and extending the prohibited period through 12 months after the end of a proceeding covered by the law.  The regulations also clarify some previously vague issues in the law. 

A summary of the changed regulations is below.

  • Application of changes in the law to past activities: A new regulation clarifies that the expansion of the law to local elected officials does not have retroactive effect—proceedings and contributions involving directly-elected local agency officers prior to January 1, 2023 are not covered.    
  • Affected officers and agencies: An amended regulation implements the major change that took effect this year, making decisions of and contributions to local elected officials subject to the pay-to-play laws.  This regulation also revises who is an “officer” under the law, so that members of the governor’s cabinet are sometimes covered by the law; clarifies that any person serving in an elected position is covered, even if appointed to or otherwise not elected to that position (e.g., appointed to fill a vacancy), or not the head of the agency; and adds that any person with decision-making authority in a covered proceeding who is also a candidate is covered.
  • “Pending” and Proceedings: Under California’s pay-to-pay law, any party or party’s agent may not contribute more than $250 in the aggregate to a state or local government agency officer while a proceeding is pending and for twelve months after the decision is made.  The new regulation clarifies that this provision prohibits contributions to an officer during a proceeding only if the proceeding is pending before that specific officer.
  • Agents: The law applies to contributions by agents, as well as parties to a proceeding and “participants” who attempt to influence the proceeding.  The revised regulations clarify that an agent is someone who represents a party or participant in a pending proceeding for compensation through appearances or communications, rather than applying a broader definition of “agent.”
  • Aggregation of contributions: An amended regulation specifies that covered contributions include not only those by agents, participants, and parties, but also contributions of an individual who directs or controls an entity’s contributions, as well as contributions by any other entity that individual directs or controls, or by any entity directed and controlled by a majority of the persons that direct or control the party, participant, or agent.  This aligns the law with aggregation rules found elsewhere in California campaign finance law.
  • Solicitation, direction, and receipt of contributions: The law applies to contributions not only received by, but also solicited or directed by, an official or candidate.  The amended definition explains that covered contributions include those requested by the officer or their agent for any other recipient. 
  • Prohibitions and disqualification: A revised regulation provides guidelines for determining whether an officer knows or has reason to know of a participant’s financial interest.  It also creates a process that allows an officer to participate in a proceeding before returning a contribution.

The new regulations will be important for anyone who makes contributions in California and has matters before state and local officials.  Covington regularly advises on the state’s pay-to-play law and will continue to monitor developments around its regulations.

On Thursday, the Senate passed two bills — The Lobbying Disclosure Improvement Act (S. 264) and Disclosing Foreign Influence in Lobbying Act (S. 289) — that attempt to increase disclosure of Foreign Agents Registration Act (“FARA”) activity through amendments to the Lobbying Disclosure Act (“LDA”).  The Senate passed versions of these bills late last year, although the full House of Representatives did not consider the bills before the 117th Congress adjourned. Senators Chuck Grassley (R-Iowa) and Gary Peters (D-Mich.) re-introduced the bills earlier this year, and the Senate passed the bills Thursday by unanimous consent.

As Covington previously reported, the Lobbying Disclosure Improvement Act would require LDA registrants to identify on their LDA registration “whether the registrant is exempt under” FARA’s LDA exemption. This is an administrative change that would require certain LDA registrants to check a box on their filings. Congress appears to have intended to make it easier for the public to identify LDA registrants engaged in FARA registrable activities, which could also make it easier for the FARA Unit of the Department of Justice to flag and scrutinize the activities of such LDA registrants. The wording of the bill is somewhat ambiguous with respect to how this change affects current LDA registrants. Because most changes to the information on an LDA filer’s registration are made on the filer’s quarterly activity reports, it is relatively rare to file an amended LDA registration report. The bill does not address how current registrants should handle the new requirement if they are likely never to be in a position to file another registration report. The bill also does not address filers who initially file under the LDA because they have crossed LDA registration thresholds, but later engage in FARA registrable activities and take advantage of the LDA exemption based on their existing LDA registration. This change, if enacted, would present new challenges for the regulated community. The amendment assumes that it is always clear when a filer has a FARA registration obligation and is relying on the LDA exemption, but that is not always the case. This amendment would force LDA registrants to take a position on whether or not they believe they are engaged in FARA registrable activities.

The Disclosing Foreign Influence in Lobbying Act would amend the LDA registration requirements to require that LDA filers “identify any connection with a foreign government or political party that plans, supervises, directs, or controls any effort of that lobbyist, regardless of those entities’ financial contributions to the lobbying effort.” Currently, LDA registrants are required to identify certain foreign entities associated with the registrant or its lobbying activities. This change would expand that requirement to focus specifically on the involvement of foreign governments in a registrant’s lobbying activities. Responding in the affirmative to the new disclosure requirement could amount to an admission that the LDA exemption would not apply and that LDA registration would not be sufficient on its own, presumably steering registrants to file under FARA.

Both the “Lobbying Disclosure Improvement Act” and “Disclosing Foreign Influence in Lobbying Act” now await House action.  Despite the divided 118th Congress, the prompt re-introduction and passage of the bills in the Senate reveal the bipartisan appetite for FARA reform.  While there is general agreement that FARA requires legislative reforms to update the statute and to provide more clarity to the regulated community, these bills propose relatively modest administrative changes that may introduce more confusion than clarity.  The Department of Justice endorsed more comprehensive legislative reform last year, and it is expected to issue new proposed regulations this year. Covington will continue to monitor developments in changes to FARA and its regulations.

The Department of Justice’s FARA Unit released several new advisory opinions in recent weeks that interpret the Foreign Agents Registration Act (“FARA”) and its regulations.  While the newly published opinions addressed a number of topics, the FARA Unit’s broad reading of the FARA triggers and the jurisdictional scope of the statute are common themes.  One particularly noteworthy opinion could have implications for digital media platforms and technology companies that host and support online content for foreign entities, though the opinion provides little actionable guidance.

In this client alert, we highlight important parts of the new advisory opinions.