U.S. Department of Justice building in Washington, D.C. Jan. 10, 2012. Photo: Diego M. Radzinschi/ALM

Amid the greater scrutiny of foreign influence in the United States, the FBI has taken an expanded role in efforts to ensure lawyers, lobbyists and political consultants are fully revealing their advocacy for government clients, a move that observers said brings a new intensity to compliance reviews that have traditionally been handled by Justice Department staff.

This year, FBI personnel began joining Justice Department officials in inspections authorized under the Foreign Agents Registration Act, or FARA, a decades-old law requiring the disclosure of lobbying and other influence work for foreign governments. FARA enforcement ramped up over the past three years, as part of the special counsel's investigation of Russia's interference in the 2016 presidential election.

Lawyers, lobbyists and other advocates are required to file reports detailing their work for foreign interests and allow the Justice Department to review records related to those engagements. The inspections—generally conducted by officials from the Justice Department's FARA unit at the offices of registered foreign agents—are meant to assess not only whether disclosures are fulsome but also whether firms are complying with FARA's record-retention requirements.

The FBI has long taken part in investigations of foreign lobbying, coordinating with national security officials at Main Justice. With the FBI's entry into inspections, the Justice Department's FARA unit is "getting teeth" in compliance reviews targeting those who have already registered as foreign agents, said Melissa Laurenza, a partner at Akin Gump Strauss Hauer & Feld who advises clients on FARA.

"They're beefing up," Laurenza said. "I think, going forward, we're going to see them be more aggressive. I think we're going to see more activity out of them than we've seen in the past."

A Justice Department spokesperson confirmed that the FBI's participation in foreign agent inspections commenced this year and stressed that FARA empowers the bureau, along with officials in the Justice Department's national security division, to conduct the so-called "books and records" reviews. The spokesperson declined to specify the number of inspections in which the FBI participated or the particular nature of the foreign agents draw.

"Reflective of FARA enforcement being a priority, the DOJ and FBI are now using all of [their] tools to ensure compliance with the law," the Justice Department spokesman said.

An FBI spokesperson declined to provide details about the bureau's involvement in foreign agent inspections.

Justice Department reports shows that FARA staff initiate inspections based on a variety of factors, including delinquent filings and the suspicion that some activity for a foreign government client has not been disclosed. A 2016 inspector general's report said an inspection "involves review of all the registrant's activity files, correspondence, accounting records, invoices, and receipts related to the agent's representation of the foreign principal."

After years of lax enforcement, the Justice Department in recent years has pursued high-profile prosecutions involving FARA, many of them stemming from Special Counsel Robert Mueller III's investigation into Russian interference in the 2016 election. Mueller's two-year investigation ushered in a new era of FARA enforcement, as the prosecutions of former Trump campaign chairman Paul Manafort and others put the K Street lobbying corps on alert about the risks of secretly lobbying for foreign interests.

K Street in Washington, D.C. Credit: Mike Scarcella / ALM

Thomas Spulak, a partner at King & Spalding, said the FBI's role in foreign agent inspections comes as "just further evidence of the game-changing nature of the last year or so in FARA enforcement."

"We've gone from 30 mph not to 60 mph but to 90 mph in the last 18 months to two years," he said.

A former prosecutor on Mueller's team, Brandon Van Grack, was named earlier this year as the new chief of the Justice Department's FARA unit. Last week at a conference in Chicago, Van Grack noted that the FBI had begun participating in the Justice Department's inspections of foreign agents, according to people who heard his remarks.

The presence of FBI officials is likely to change the tone of inspections that were previously conducted by the Justice Department's FARA unit, a team known for prioritizing compliance over criminal prosecutions.

"The gravity and severity will get ratcheted up to the extent you're now turning over documents to the FBI directly. At the very least, this change will lead to a very different tenor being taken in these inspections," said Josh Rosenstein, a partner at Sandler Reiff Lamb Rosenstein & Birkenstock.

The FBI's heightened role has come during a record-setting year for foreign agent inspections.

In September, at a conference in Washington, Van Grack said the Justice Department had already carried out a record number of inspections—"30% more than any year prior"—to determine whether foreign agents had adequately disclosed their activities and preserved materials related to their influence work. Between 2010 and 2018, the Justice Department conducted about 15 inspections a year. As of his late September remarks, the Justice Department had conducted 20 inspections, Van Grack said.

"That's a trend that will continue," he said in September. "We're bringing more persons and dedicating more time to inspections, so that we can review and process more information."

The Justice Department's internal watchdog faulted the Justice Department's FARA unit in 2016 for failing to follow up on deficiencies spotted in inspections of foreign lobbying disclosures.

In a review of the FARA unit's 87 inspections between 2008 and 2014, the Justice Department inspector general found several instances in which registered foreign agents had not filed information that was requested during the reviews. The inspector general also found a pair of instances in which materials requested by the Justice Department were not submitted until "well over a year" after the inspection date.

In the report, the inspector general said the Justice Department's national security division "stressed to us that because the FARA Unit has limited staff and considerable responsibilities follow-up on inspection reports can be difficult."

"We understand this challenge," the inspector general's report stated, "but believe improvements can still be made."

 

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