The U.S. Justice Department has begun this year to more sternly address perceived shortcomings in disclosures of consultants' influence work for foreign countries, demanding more information as part of a wider scrutiny of secret lobbying for overseas interests.

In recent months, the Justice Department has sent what amount to cease-and-desist orders requiring consultants to correct deficiencies in past disclosures or stop working for the overseas client that gave rise to a registration as a so-called "foreign agent," a Justice Department official said.

The deficiency notices give consultants 10 days to fill in the gaps identified by the Justice Department or face the risk of a civil lawsuit, or even criminal charge, alleging a violation of the Foreign Agents Registration Act, the decades-old statute requiring the disclosure of influence work and political activities for foreign governments and other overseas interests.

The Justice Department has sent five such notices so far this year, the DOJ official familiar with the recent effort said. The notices were the first sent since 1995 in which the Justice Department explicitly invoked a provision of FARA making it unlawful for a registered agent to continue working for a foreign power after being advised of a past disclosures' shortcomings and not taking steps to correct them.

In each instance, the deficiencies identified by the Justice Department were addressed in amended disclosures, minimizing the risk of a criminal prosecution or a civil lawsuit, the official said. The notices ratcheted up the pressure on consultants who declined, in response to a softer form of outreach known as a "deficiency letter," to address shortcomings identified by the Justice Department.

"It is a further demonstration of our efforts to use all the tools available in FARA to achieve compliance," the official said.

Last year, the head of the Justice Department's national security division signaled to law firms, lobbyists and public relations shops that prosecutors would increasingly consider civil lawsuits as a tool to compel disclosure of influence work connected to foreign governments. Noting that FARA is "not just a criminal" statute, Assistant Attorney General John Demers said the Justice Department could take a lighter touch and bring civil lawsuits to drive disclosure.

"In light of the increased sensitivity of the problem of covert foreign influence, we should expect to see a continued focus on this area—and not just measured by criminal cases," Demers said at the time.

Still, the Justice Department has not brought any new civil lawsuits under FARA. At the time of Demers' remarks, the Justice Department had a civil case pending against RM Broadcasting, a company that was later required under a court order to register as a foreign agent in connection with its airing of the radio channel Sputnik, whose parent company, Rossiya Segodnya, is owned and operated by the Russian government. In that case, the Justice Department countersued in late 2018 after RM Broadcasting challenged its determination that it was required to register under FARA.

'A More Systematic, Formal and Muscular Way'

The Justice Department's recent use of deficiency notices suggests that it has not backed down but instead extracted further disclosure through steps taken behind the scenes.

In interviews, lawyers said the Justice Department has long reviewed FARA disclosures and raised concerns about filings lacking sufficient information. But the deficiency notices, notifying registered agents that FARA makes it unlawful to work for foreign clients "10 days or more after receipt of such notification," reflects a ramping up of the Justice Department's efforts.

"The Justice Department's review of FARA filings for deficiencies in itself is not novel. But the department certainly is now exercising its authority to redress deficiencies in a more systematic, formal and muscular way than in years past," said David Laufman, a partner at Wiggin and Dana who previously headed the section of the Justice Department's national security division tasked with enforcing FARA.

After Demers signaled an escalated crackdown on illegal foreign influence operations last year, the Justice Department suffered a string of setbacks in prosecutions connected to FARA.

In September, a jury in Washington found former Obama White House counsel Greg Craig not guilty of deceiving the Justice Department about his work for Ukraine during his tenure as a high-profile partner at the law firm Skadden, Arps, Meagher, Slate & Flom. Prosecutors had alleged Craig was motivated to mislead the Justice Department, in part, to avoid the perceived stigma of registering as a foreign agent. Skadden had agreed earlier in 2019 to pay $4.6 million and register retroactively in connection with Craig's past work.

In Alexandria, Virginia, a federal judge last year dismissed the conviction of Bijan Kian, a one-time business partner of former Trump national security adviser Michael Flynn. A jury found Kian guilty of secretly working for Turkey, but U.S. District Judge Anthony Trenga of the Eastern District of Virginia tossed the conviction, ruling the Justice Department's evidence was insufficient. The Justice Department has appealed that decision to the U.S. Court of Appeals for the Fourth Circuit.

Shortly after Craig's acquittal, Brandon Van Grack, the chief of the Justice Department unit focused on ensuring compliance with FARA, said the crackdown on covert foreign influence remained a "top priority."

Van Grack, a former member of the special counsel team that investigated Russia's interference in the 2016 election, noted that the number of new registrations has skyrocketed in recent years. The renewed attention on FARA has stemmed largely from Special Counsel Robert Mueller III's prosecution of former Trump campaign chairman Paul Manafort, who admitted that he conspired to avoid registering as a foreign agent in connection with his past work for the Russia-aligned government of Ukraine.

"I have been surprised at how active the office has been," said Arnold & Porter partner Amy Jeffress, a former chief of the national security division within the U.S. attorney's office in Washington. "They've been very engaged and they are definitively following through on their commitment to engage in more active enforcement efforts."

Under Van Grack's leadership, the Justice Department's FARA unit has formalized its operations, insisting on putting guidance in writing. In past years, the unit was comfortable issuing informal guidance over the phone, a practice it has eschewed in recent years.

Last fall, the department began to roll out a new, web-based system for filing disclosures that requires registered agents to answer each question on forms. The previous system allowed registered agents to leave some answers blank or make clarifying statements.

Covington & Burling offices in Washington DC. Credit: Diego M. Radzinschi / ALM

Notably, the new system also requires registered agents to scan a document with an actual—or "wet"—signature, rather than simply check a box to indicate an electronic signature. In a blog post, the law firm Covington & Burling speculated last year that the change might "facilitate false statements prosecutions in certain situations."

The Justice Department has also taken stiffer interpretations of the law. In recent months, for instance, the Justice Department has stopped allowing registrants to conceal their home addresses redacted in publicly available disclosures.

In the small, but growing, cohort of lawyers with FARA expertise, the move raised concerns about the safety of some clients registered as foreign agents. Still, in spite of that bristling, the Justice Department has taken the view that the text of the law does not allow for home addresses to be concealed in public filings, according to several lawyers familiar with the FARA unit's approach.

"The department is not unsympathetic to concerns about requiring the disclosure of agents' residential addresses, but we are obligated to do so under the statute," said Justice Department spokesperson Ali Kjergaard.