The Unintended “Foreign Agents”
“Foreign agents” are suddenly in our midst – or so it seems. Paul Manafort was indicted, in part, for failing to register under the Foreign Agents Registration Act (FARA). Last fall, RT and Sputnik registered as “foreign agents” under pressure from the Justice Department. And in January, seven U.S. Senators asked the Justice Department to ensure that Chinese state media organizations are properly registered under FARA.
This increase in registration activity has been coupled with heightened legislative activity. Since last year, five bills have been introduced in Congress by members of both parties to increase FARA enforcement.
One bill, sponsored by Sen. Chuck Grassley (R-Ia.) and Rep. Mike Johnson (R-La.), passed the House Judiciary Committee in January. Among other measures, it would provide FARA investigators with civil investigative demand authority (which they currently lack) and require the Attorney General to develop a comprehensive enforcement strategy.
This focus on implementation though has encountered a problem. FARA is so sweeping and vague that increasing enforcement, without also fixing the underlying Act, could unintentionally capture even routine activity of a significant number of nonprofits.
The “Foreign Agent” Standard of FARA
Some background is helpful. FARA is a 1938 anti-propaganda statute passed amidst concerns over German Nazi inroads in the United States. Although the Justice Department has historically rarely enforced the act, FARA has served as a justification for “foreign agent” laws in other countries, such as Russia, where they are used to constrain dissent. While not as draconian as “foreign agent” laws in some other countries, FARA’s provisions are much broader than many think.
On its face, FARA applies not just to agents of foreign governments, but also to agents of any foreign principal, including a foreign person, corporation, nonprofit, or foundation. Covered activities include “political activities”, which are defined broadly to encompass an attempt to influence any section of the U.S. public on any foreign or domestic policy.
Curiously, the act is not limited to activities of a political nature. With limited exemptions, the act also covers soliciting or disbursing funds on behalf of a foreign nonprofit or foundation even if no political activity is involved.
The act also requires “agents” to register for actions that were not made at the direction or control of the foreign principal. In other words, for actions that fall far short of those found in the typical principal-agent relationship. For example, you can become a “foreign agent” if you engage in covered activities simply at the “request” of a foreign principal. As the Congressional Research Service has noted, the very limited case law on FARA has struggled to determine the scope of what “request” means.
What are the consequences of this broad language? If the act is read on its face, a U.S. nonprofit would arguably need to register for doing something as innocuous as holding a public meeting in Chicago at the request of a Canadian organization to discuss policies to address the opioid epidemic. This is because it is acting at the “request” of a “foreign principal” to engage in a “political activity” – in this case, creating a forum that could influence public opinion.
Or consider a British charitable foundation that had an employee in the U.S. disbursing money to help with Hurricane relief in Houston. That employee would arguably also need to register because they are disbursing funds for a “foreign principal”.
Finally, take an issue as mundane as a U.S.-based non-profit engaged in anti-human trafficking advocacy that has a foreigner on their board of directors. Under the text of the Act the organization would arguably have to register as a “foreign agent” because the organization is, at least in part, directed by a foreigner and also may act at their “request” in ways covered by the Act.
The Effect of Increasing Enforcement
Given the vague and broad scope of FARA, its increased enforcement – without fixing the underlying Act – will chill nonprofits from carrying out beneficial cross-border activities.
Registration is intrusive and complicated, especially for smaller nonprofits. An organization must submit to the Justice Department a laundry list of information, all of which is publicly accessible. This includes the home addresses of officers and directors; the year of birth, home address, and citizenship of all employees working on covered activities; the organization’s bylaws and other internal governing documents; and whether “informational materials” will be disseminated to “civic groups.” FARA also requires each employee working on covered activity to submit her own individual registration form.
A nonprofit would have to include a “conspicuous” statement that it is acting on behalf of a foreign principal on all covered “informational materials.” It would then have to submit to the Justice Department these informational materials along with periodic reports of activities covered under the Act.
Because of the burdensome registration and reporting requirements – coupled with criminal penalties for non-compliance – many organizations will simply stop engaging in beneficial cross-border activities.
Other nonprofits, even if they can handle the compliance burden, will forgo these activities to avoid the stigma of having to register as a “foreign agent.” Being tarred a “foreign agent” undermines a nonprofit’s credibility, making it easier for it to be mischaracterized as not being independent, untrustworthy, or even nefarious. To go back to our earlier example, a U.S. nonprofit that simply helps organize a public meeting for a Canadian nonprofit to discuss strategies to address the opioid epidemic would have to register as a “foreign agent” and then risk having the organization’s work stigmatized as promoting a foreign agenda.
Chilling such a broad swath of beneficial and legitimate activity undermines the public interest. We face a number of transnational challenges – ranging from public health threats to national security issues – and we need active international engagement by civil society to help address these challenges. Strengthened enforcement of FARA as it is currently written could further fuel U.S. isolationism and, ironically, make the U.S. less safe by undercutting the country’s ability to learn about, and engage with, the world.
Of course, some may argue that the Justice Department would probably require few nonprofits to actually register. It is indeed unlikely the department would bring an enforcement action against a U.S. group that wrote a policy briefer at the request of Amnesty International or a nonprofit that organizes, at the request of a European nonprofit partner, a public event on tariffs and transatlantic trade policy.
While this may be true, this reveals a second problem with the over-broad scope of FARA. Given the wide discretion of the act, what are the criteria for deciding when to launch an enforcement action?
In the past, the Justice Department largely circumvented this challenge by seldom enforcing the act. However, future ramped up enforcement could easily expose it to claims of political bias. Just ask the IRS, whose reputation still has not recovered from allegations in 2013 that it inappropriately scrutinized applications for tax exempt status for tea party and other nonprofits based on their names and policy positions. It is not unrealistic to imagine a situation in which the Justice Department applies greater FARA scrutiny to an organization because of its political views, affiliation with a certain faith, or other inappropriate criteria.
In fact, in 1951, in a rare and noteworthy prosecution, W.E.B. Du Bois was charged with violating FARA and faced five years in jail on grounds that an anti-war organization he headed should have registered. The organization primarily published a newsletter on international peace movements, but the Justice Department argued (on weak evidence) it was circulating these materials on behalf of the Soviet Union. A judge ultimately acquitted Du Bois at trial, but not after devastating costs to his reputation.
Finally, the international implications of this act cannot be forgotten. Unless the scope of FARA is more targeted, it will continue to be used as precedent by other governments to enact and enforce their own “foreign agent” laws, which undermine democracy and civil society abroad.
Some in Congress are beginning to realize that fixing the underlying problems with FARA needs to be central to any effort to strengthen enforcement.
Rep. Jamie Raskin (D-Md.) recently introduced an amendment to more carefully tailor the sprawling principal-agent relationship in FARA. Among other measures, his amendment removed language that could make one an agent for merely acting at the “request” of a foreign principal. Instead, the revised definition would focus on whether an agent acts “under the direction or control of a foreign principal or of a person directed or controlled by a foreign principal.” This more targeted language is similar to the definition of “foreign agent” already in 18 U.S.C. § 951, a statute that also applies to agents of foreign governments.
Most observers agree that international nonprofits that are not directed or controlled by a foreign government, but may have employees in the United States, should not be the target of FARA. To codify this understanding, the International Center for Not-for-Profit Law and other groups have proposed defining a foreign principal as simply “a government of a foreign country and a foreign political party, or foreign persons or entities acting on their behalf.” This addresses the problem of catching inadvertent “foreign agents,” while still covering foreign governments and political parties, as well as cases where foreign governments or political parties use intermediaries to obscure their direction or control.
As we mark the 80th anniversary of FARA, reforms like these would help make sure this largely dormant Act can be used to address inappropriate interference by foreign governments in the United States without unintentionally undercutting our democracy.