08/01/2008 05:12 am ET Updated May 25, 2011

FARA's Failings: Or How The DOJ Fails To Monitor Foreign Lobbying

While Barack Obama's very public tour to Europe and the Middle East this week occupies the media's spotlight, there's a new storm brewing around a billion dollar private foreign policy industry -- which includes thousands of lobbyists conducting trade and military policy via cash and access. Chuck Schumer, joined by Obama and others, is pushing for more oversight, and he's already encountering resistance. The fight over FARA -- the Foreign Agents Registration Act -- may be just beginning.

Earlier this month, Bush bundler Stephen Payne -- who has worked repeatedly with key McCain foreign policy adviser Randy Scheunemann -- was caught on a secret camera offering access to senior Administration Officials in exchange for cash for a Bush Library. In an interesting footnote to the scandal, Payne was asked why he didn't register under the FARA, as is required by federal criminal law. Citizens for Responsibility and Ethics in Washington demanded that the DOJ investigate Payne's failure to file. In response, Payne gave the electronic version of a shrug, emailing the UPI that he thinks he's in compliance and that the DOJ told him his activities weren't covered under foreign lobbying. (The DOJ says it never happened).

Legally, his excuse is worth nothing, but his attitude towards FARA is not surprising. FARA is intended to shine sunlight on foreign countries, political parties, and other foreign actors who use lobbyists and PR firms to change America's foreign policy. It requires agents to register, file contract details, keep copies of all contracts and correspondences, which the criminal division of the DOJ, or the FBI, may be allowed to inspect. Yet the Act is either rarely, or never, enforced criminally. The public DOJ handbook casually notes that FARA "is, after all, a malum prohibitum, little known outside the legal community."

The FARA section of the DOJ handbook -- last updated in 1997 -- telegraphs an intention not to pursue criminal penalties. It notes that "Since 1966 there have been no successful criminal prosecutions under FARA and only 3 indictments returned or informations filed charging FARA violations." The suggested threshold for both a criminal or civil investigation are listed as extremely high, far higher than the text of the statute -- significant amount of money is involved (millions of dollars) and a willfulness to violate the statute is suggested as necessary to trigger an investigation into criminal prosecution.

Voluntary compliance is the main goal, the manual states.

The slim bits of other data that one can gather from public sources suggests that FARA lawyers have taken the DOJ handbook's mandate to heart. A Lexis search for criminal cases in district court found no mention of prosecutions since 1997 (except one for Tongsun Park, who was ultimately convicted on other grounds -- he may personally represent 20 percent of all FARA prosecutions, in fact, as his prosecution as part of Koreagate was one of the few criminal prosecutions in the late 70s.)

There may have been FARA prosecutions in the last forty years, but they are so rare, and so hard to find, that the threat of criminal prosecution for failing to file approaches zero. It's a fair guess that over dinner and cocktails, lobbyists are quite comfortable telling each other -- and their clients -- that perfect registration is not a big deal and you don't have to worry about criminal penalties. Payne could easily have heard that he needn't file FARA forms from a friend.

But a leaky FARA means that citizens are missing out on important information. Like campaign finance reporting laws, or the SEC, mandatory, complete reporting is the groundwork on which enforcement of all other related laws are built.

In the first six months of 2007, 591 foreign principals filed FARA registrations; Angola spent over a million dollars; Algeria just under $100,000, and the President of the Republic of Congo spent $250,000 for cultivating Members of Congress. The Cote D'Ivoire spent over $300,000. Equitorial Guinea spent over $500,000 to make sure Members of Congress knew about their progress on human rights.

Moreover, a review of the filings on the FARA site show that of those who do file, many do not do so in the full way demanded by the law.

FARA requires lobbyist to include copies of each written contract, and a full, detailed statement of the political activity for which the agent is engaged. A statement is "detailed" if it has "that degree of specificity necessary to permit meaningful public evaluation of each of the significant steps taken by a registrant to achieve the purposes of the agency relation."

Some FARA filings are detailed within the meaning of the regulation; most of them are not. Dewey and Lebeouf, for example is representing the Government of Ethiopia, for an hourly fee, in "various aspects of its dispute with Eritrea in respect to proceedings before the International Commission and Claims Commission."

Many of the filings are perfunctory. DLA Piper has engaged to represent the government of Ethiopia, for $50,000/month, to "provide legal advice and counsel on a broad range of legislative, regulatory, and legal matters, and public relations needs, including matters related to Ethiopia's relationship with the United States." Likewise, Mark Saylor has agreed to provide public relations services to Ethiopia. For what and how, is not reported.

These reports would not be likely stand in for compliance under the SEC or the FEC.

This pay-to-play diplomacy and trade negotiations goes on by paid lobbyists in parallel with the diplomatic efforts of the world's countries; evidence suggests it does skew policy in favor of countries that can pay for lobbyists. A 2004 study by three academics (Kishore Gawande, Pravin Krishna, and Michael Robbins) concluded that: "foreign lobbying activity has significant impact on trade policy."

Senators Charles Schumer, Barack Obama, and Claire McCaskill have asked the inspector general for a report on criminal prosecutions, and for amendments to toughen FARA. It remains to be seen is whether public pressure can push through the Schumer proposals, or whether the first wave of private resistance overwhelms it.