Mueller puts spotlight on foreign lobbying

The cottage industry of foreign lobbying is taking center stage as special counsel Robert Mueller investigates the activities of people in President Trump’s orbit. 

Foreign advocacy work in Washington is common, lucrative and occasionally controversial, but has rarely received the front-page scrutiny it’s attracting now. 

That’s mostly because of Paul Manafort and Richard Gates, two high-level figures from the Trump campaign who have been indicted as part of Mueller’s investigation. The charges against the two men, including allegations of money laundering, stem from work they did years ago to benefit a pro-Russia political party in Ukraine.

{mosads}The lobbying work was not disclosed to the Department of Justice (DOJ), as is required under the law, according to the indictment. Manafort retroactively registered that work this year.

“Manafort’s not in trouble for working for a bad guy; he’s in trouble for working for a bad guy and then not disclosing that he worked for a bad guy,” said a lobbyist and foreign agent at a large Washington firm. “That’s the tough thing for DOJ: How do you go find something that you can’t see?”

The Hill spoke with a half-dozen foreign agents for this story. Most of them requested anonymity to speak freely about their thinking and about foreign advocacy work in general. 

Working as a foreign agent has long been a profitable niche. While there are smaller-dollar contracts, foreign entities will sometimes pay firms $100,000 or more per month for representation in Washington. Domestic clients typically pay much less.

But taking on these kinds of clients comes with its own risks, both legally and otherwise. Lobbyists have to make tough decisions about what clients to accept, given the possible damage to their reputation if they are seen as helping corrupt or repressive actors overseas.

“I’ve had to explain to my wife several times, [when she asks] ‘Are you working for bad people?’ In the broader sense of lobbying, if there was no controversy, there would be no activity,” said a second foreign agent. “It depends on your point of view whether you think someone is good or bad or right or wrong.”

As a general rule, the more controversial a foreign client is, the bigger the retainer.  

“The decision calculation is a reputational hit versus a monetary gain,” said a person formerly registered as a foreign agent. “When you understand there is going to be public scrutiny for representing a Middle Eastern dictator, you bake in the reputational hit” to the fee.

Another person said taking on a controversial client requires you to “thoroughly vet” the decision “with your company, your colleagues and your conscience.”

“If you can square it on all of those fronts, then you can do the work,” the first foreign agent said. “You have to be willing to accept criticism.”

Two people told The Hill that they’ve even run potential clients by people they trust in the executive branch and on Capitol Hill to gauge whether the work might be out of bounds.

“My whole thing with being effective is that if I’m being effective, I’m not surprising my friends on the Hill,” said former Rep. Toby Moffett (D-Conn.), a longtime foreign agent.

“You don’t want to walk out of Longworth [House Office Building] and have people whisper, ‘What happened to Toby?’ ”

Foreign lobbying in Washington is disclosed to the public under The Foreign Agents Registration Act (FARA), a World War II-era law that was designed to stop Nazi infiltration.

The FARA rules apply to anyone who is performing lobbying, public relations or advisory work for a foreign government, foreign party or foreign official. Disclosures under the law are sent to a unit in the DOJ’s National Security Division.

Foreign agents are required to file voluminous paperwork, including disclosing their meetings, phone calls and emails with government officials and staff. They must also disclose their interactions with private individuals and think tanks.

But violations of FARA are rarely prosecuted and the DOJ unit does not have subpoena power to conduct investigations. As a result, some lobbyists opt not to register, despite the legal risks.

“There are a ton of people that aren’t filing,” said a person who registered as a foreign agent for the first time earlier this year. “I know folks that I thought should have filed, but they don’t for whatever reason. I think they’ve convinced themselves they don’t need to file.”

Manafort would appear to be a cautionary tale of what can go wrong when lobbyists decide to skirt the rules under FARA.

For years, Manafort worked for Ukraine’s Party of Regions, collecting millions of dollars in fees. That lobbying would have been perfectly legal, had he registered with the Justice Department and filed disclosures. Even then, the 12-count indictment against Manafort and Gates mostly centers on allegations of money laundering, with the alleged FARA violations only a minor part of the case.

Nonetheless, experts say that foreign agents need to be vigilant about FARA disclosures to ensure their work remains above-board.

“There are some cases where the way that the law defines [some of the] terms can create confusion,” said Joshua Rosenstein, a partner at Sandler Reiff Lamb Rosenstein & Birkenstock who is a lobbying compliance attorney.

A person is required to file with DOJ if a foreign government or official is the “principal beneficiary” of their work, or if the advocacy has been “funded in whole or major part” by a foreign government. Those rules are open to interpretation.

“It took me a long time to figure out the guidelines [about what to submit in official FARA forms], and they’re still ambiguous,” said the person who registered as a foreign agent this year.

“They ask for a lot [of information], but they don’t give you guidelines on what to provide — you can say as much or as little as you like.”

Both Rosenstein and Jason Abel of Steptoe & Johnson said they have taken on new clients this year who wanted to make sure they are in compliance with DOJ rules. Existing clients are also being extra cautious.

“Now that FARA is, in some circles, a household name or dinnertime conversation, there is an uptick in questions about its applicability,” said Abel, who worked on FARA reform legislation a decade ago while he was an aide to Sen. Charles Schumer (D-N.Y.).

While the legal ambiguity, disclosure requirements and risk of negative publicity are enough to deter some from FARA work, others gravitate toward it, both for the payday and for the challenge.

“Sometimes they’re more frustrating, but I find the foreign work more interesting, rather than trying to get a tax cut” for a domestic client, the first foreign agent said.