On Wednesday, December 16, Senator Chuck Grassley (R-Iowa) sought, and failed to achieve, unanimous consent to pass legislation that would have granted significant new powers to the Department of Justice to enforce compliance with the Foreign Agents Registration Act.  In objecting to passage, Sen. Bob Menendez (D-N.J.) said that the Senate should “take a step back and take a comprehensive look” at the statute and reform proposals.

In one of the last Senate sessions of the year, Sen. Grassley called for the Senate to pass S. 1762, the Foreign Agents Disclosure and Registration Enhancement Act, a bipartisan bill that he introduced in 2019.  In his remarks on the Senate floor, Sen. Grassley noted that the bill was supported by the chairs and senior Democratic Senators of both the Senate Judiciary Committee and the Senate Intelligence Committee.  He noted that he recently received support from Sen. Jim Risch (R-Idaho), the Chairman of the Senate Foreign Relations Committee, a development that appears to have prompted Sen. Grassley to seek consent to pass the bill.

Notably, it was Sen. Menendez, the ranking Democratic Senator of that same Committee, who objected to passing the bill by unanimous consent.  Sen. Menendez noted his agreement with Sen. Grassley “that changes are sorely needed to FARA,” but he noted that Members of Congress had introduced numerous FARA reform bills, with a wide variety of proposals, including “additional disclosure and registration requirements, significant changes to the current FARA exemptions, or more electronic reporting.”  The Foreign Relations Committee, he said, should have an opportunity to “considering such changes . . . and to see if other changes are warranted.”

Sen. Menendez also raised concerns that FARA’s “definitions and requirements are broad and sow confusion over exactly when and under what circumstances an individual must register and report covered activities.”  He noted that some organizations are concerned that broader FARA enforcement authorities could lead to the statute being “weaponized.”

Sen. Grassley’s legislation would make several significant changes to FARA enforcement:

  • The bill would give the Attorney General the authority to issue civil investigative demands to require the production of documents, answers to interrogatories, and testimony from witnesses in FARA investigations. Grassley indicated that he modeled the provisions on similar authorities in the False Claims Act.
  • The legislation would increase the criminal penalties for willful violations and material misstatements to $200,000 (from $10,000) and increase the penalty for more minor violations to $15,000 (from $5,000).
  • The bill would create a new criminal offense for meeting with a Member of Congress or staff without disclosing that an individual is a registered foreign agent.
  • The bill would create new civil penalties for violations of the statute, including a $10,000 fine for failing to file, a $1,000 fine for failing to file a required supplemental statement, and fines up to $200,000 for other violations, including failing to rectify a deficient filing.
  • The legislation would require the Department of Justice to develop a comprehensive strategy for FARA enforcement, including an examination of all of the registration exemptions contained in the statute. The bill also would require various reviews by the Department’s Inspector General, reports by the Attorney General, and audits by the Government Accountability Office.
  • Most significantly for private sector companies, the bill would require the Government Accountability Office to audit the use of the Lobbying Disclosure Act exemption to registration, and provide recommendations for potential improvements. Notably, this bill does not contain a repeal of the LDA exemption, which had been in an earlier version of Sen. Grassley’s reform legislation and would have forced many private sector companies to register and report under FARA.

FARA has been enforced with increasing aggressiveness by the Department of Justice over the last several years, not only through formal enforcement actions but also through audits, advisory opinions, and the issuance of determination letters demanding that private parties register.  Senator Menendez’s public expression of concern regarding FARA’s breadth and its potential “weaponization” is a significant development.  Although Senator Grassley failed in his attempt to pass the bill, which has never had a full public hearing, Senator Menendez’s acknowledgement that changes in FARA are sorely need may suggest an opening for fuller consideration, and perhaps even enactment, of the bill in the next Congress.

Tags: FARA, legislation, Senator Grassley
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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads …

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

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Photo of Brian D. Smith Brian D. Smith

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public…

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public relations risks. He assists companies and executives responding to formal and informal inquiries from Congress and executive branch agencies for documents, information, and testimony. He has extensive experience preparing CEOs and other senior executives to testify before challenging congressional oversight hearings.

Brian develops and executes government relations initiatives for clients seeking actions by Congress and the executive branch. He has led strategic efforts resulting in legislation enacted by Congress and official actions and public engagement at the most senior levels of the U.S. government. He has significant experience in legislative drafting and has prepared multiple bills enacted by Congress and legislation passed in nearly every state legislature.

Prior to joining Covington, Brian served in the White House as Assistant to the Special Counsel to President Clinton. He handled matters related to the White House’s response to investigations, including four independent counsel investigations, a Justice Department task force investigation, two major oversight investigations by the House of Representatives and the Senate, and several other congressional oversight investigations.

Brian is a Professorial Lecturer in Law at the George Washington University Law School.

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