- The Justice Department's policing of foreign influence is bedeviling Trumpworld figures.
- Rudy Giuliani and the Trump ally Tom Barrack caught prosecutors' attention over foreign dealings.
- Behind the scenes, a small team is staffing up and pressuring lobbyists for foreign governments.
When Brandon Van Grack left the Justice Department in January, stepping down from a top role policing foreign influence, his government colleagues sent him off with a curious going-away present: a pink cat piñata.
Before becoming a gag gift, the piñata sat in the office as a mascot of sorts for the Justice Department unit tasked with enforcing a decades-old federal law requiring the disclosure of foreign lobbying. It was a tongue-in-cheek totem, a nod to what the unit saw as the unfair notion that it took a lax approach to enforcing the Foreign Agents Registration Act, or FARA, until the special counsel Robert Mueller's team returned the pre-World War II law to prominence with high-profile prosecutions of Paul Manafort, the former chairman of Donald Trump's 2016 presidential campaign, and other MAGA acolytes.
Since parting ways with its papier-mâché party prop, the FARA unit has only continued to shed its reputation as a feeble and flimsy Justice Department backwater.
More broadly, the Justice Department has in recent months escalated its enforcement efforts, mostly notably with investigations and prosecutions of prominent Trumpworld figures suspected of monetizing their access to Trump's administration by working illegally for foreign governments and other overseas powers.
"The Justice Department and FARA unit haven't skipped a beat in the last six months and, if anything, have continued the historic ramp-up of FARA enforcement," said Van Grack, who served in Mueller's special-counsel office before becoming the FARA unit chief in 2019.
Jennifer Gellie, a federal prosecutor with experience in espionage cases, replaced Van Grack in January as the chief of the FARA unit.
Van Grack, now a partner at the law firm Morrison & Foerster, told Insider that the Justice Department's approach to foreign influence had featured "a little bit of everything."
"There are prominent criminal cases moving forward, significant criminal cases being charged, and unprecedented resources and personnel being dedicated to it," he said. "From all directions, FARA is being enforced like never before."
The Justice Department's scrutiny of foreign influence has bedeviled Trump associates. In the face of criminal prosecution, they've admitted to lobbying for foreign interests without disclosing their activities as federal law requires.
The criminal investigations have captivated the nation.
In April, federal agents raided the Manhattan home and office of Rudy Giuliani, escalating an investigation that is focused in part on whether the former New York City mayor and Trump lawyer illegally lobbied the Trump administration on behalf of Ukrainian interests. Giuliani recently called the investigation "lawless," telling an NBC affiliate in New York that he was "more than willing to go to jail if they want to put me in jail."
"And if they do, they're going to suffer the consequences in heaven," he added.
In July, prosecutors accused Tom Barrack, the chairman of Trump's 2017 inaugural committee, of secretly acting as an agent of the United Arab Emirates.
Barrack, who pleaded not guilty in Brooklyn federal court, was not charged with violating FARA but a lesser-known statute that prosecutors have used with people accused of acting at the direction of foreign-government officials. Still, his indictment marked the latest step in the Justice Department's newly muscular enforcement of laws designed to stymie and shed light on foreign-influence activities.
Giuliani and Barrack are only the latest members of Trumpworld to find themselves crosswise with FARA and friends.
Previously, the prominent Republican fundraiser Elliott Broidy pleaded guilty to acting as an unregistered foreign agent as he sought to sway the Trump administration on behalf of Chinese and Malaysian interests.
And Trump's onetime national security advisor Michael Flynn admitted to making "material false statements and omissions" in foreign-agent filings related to his advocacy for Turkey. That admission came as Flynn pleaded guilty, in a deal with Mueller's special-counsel team, to lying to the FBI about his communications with the Russian ambassador in the lead-up to Trump's inauguration.
Behind the scenes, the FARA unit - holed away in a nondescript office building abutting railroad tracks - is no longer a sleepy corner of the Justice Department. It's staffing up - and taking other steps short of criminal prosecution to force lobbyists and political consultants for overseas powers to register as foreign agents and disclose their activities to the US government.
"The office is staffed up higher than it's ever been and is more aggressive - not just in terms of numbers and budget but in perspective and focus," said Tom Spulak, a partner at King & Spalding and former general counsel for the House of Representatives, who regularly counsels clients on FARA. "You want people to comply, but it's not good enough to say, 'Oops, I won't do it again' if there's any evidence this was intentional to avoid FARA. If you can't explain yourself satisfactorily, they'll come after you."
'Take that gun off the mantelpiece'
In the decades before the Russia investigation, the Justice Department had brought only about a half-dozen FARA prosecutions, which prompted the department's inspector general to criticize the enforcement record in a 2016 report.
Then came the Mueller investigation, which found significant foreign interference in the 2016 election.
FARA - an 80-year-old statute originally enacted to combat Nazi propaganda - suddenly transformed from wet noodle to bullwhip. Manafort pleaded guilty to FARA-related charges tied to his unregistered lobbying for the Russia-backed government of Ukraine, only to be later pardoned by Trump in the waning weeks of his presidency.
The Justice Department didn't stop there. It pursued criminal prosecutions and threatening civil lawsuits that forced foreign agents operating in the US to register and disclose their activities.
In a South Florida federal court, the Justice Department successfully sued to force RM Broadcasting to register as a foreign agent in connection with its airing of the radio channel Sputnik, whose parent company is owned and operated by the Russian government.
Meanwhile, new FARA registrations have poured in. Between the fiscal years that ended in September 2016 and September 2019, new registrations more than doubled, jumping from almost 70 to 150, a Justice Department official said.
The Justice Department has also kept a closer eye on whether registered foreign agents are adequately detailing their activities in regular disclosures. (In those filings, registered foreign agents are required to disclose their expenses and contacts with government officials, among other details of their advocacy.)
As part of that effort, the Justice Department has stepped up inspections, in which officials scrutinize registered foreign agents' records to ensure they're fully disclosing their activities. During the 2019 fiscal year, the Justice Department conducted 20 such inspections, sometimes with the FBI present, a Justice Department official said.
After having to pause inspections because of pandemic restrictions, the Justice Department began to conduct them virtually last year. The FARA unit is now on track this year to match the 20 inspections that were conducted in 2019, the Justice Department official said.
Last year, for the first time since 1995, the Justice Department sent letters demanding that foreign agents more fully detail their influence activities - or cease working for their foreign clients. These so-called deficiency notices amount to cease-and-desist letters, giving registered agents 10 days to address the Justice Department's concerns or risk a civil lawsuit or criminal prosecution.
This year, the Justice Department's FARA unit brought in added resources to bolster its civil-enforcement authority.
Of note: The unit added to its ranks Margaret Harker, a longtime assistant US attorney who specialized in civil litigation during stints in the federal prosecutors' offices in eastern Virginia and eastern Tennessee.
The FARA unit is housed within the Justice Department's national security division, which has broadly been adding trial attorneys. But Harker is assigned specifically to the FARA unit, which signals the Justice Department's increased willingness to bring civil lawsuits to force new foreign-agent registrations.
With the addition of Harker, the FARA unit now includes five full-time lawyers - an increase from the three it had in 2018, a Justice Department official said. The 12-person unit also includes a detailee, analysts and support staff.
"They have augmented the attorney bench in the FARA unit with an experienced prosecutor," said David Laufman, a partner at Wiggin and Dana who previously oversaw FARA enforcement as a top official in the Justice Department's national security division.
Referring to the FARA unit's civil authority, Laufman added, "It wouldn't surprise me to see the Justice Department, in the right case, take that gun off the mantelpiece again."
The Justice Department may soon have such a case.
In May, The Wall Street Journal reported that the Justice Department was preparing for litigation against the casino mogul Steve Wynn - a major Republican Party donor - to compel him to register as a foreign agent in connection with his 2017 effort to persuade US officials to send Guo Wengui, a Chinese businessman living in New York, back to China.
Wengui has been accused of several criminal offenses, including sexual assault and bribery. Chinese authorities consider him a fugitive. Wynn himself has faced accusations of sexual misconduct, which he denies.
Wynn's defense lawyer Reid Weingarten did not respond to a request for comment. Weingarten told The Journal in May: "Steve Wynn never served as an agent or lobbyist for China or anyone else. He was merely a loyal messenger of information he received from our government."
The Venezuelan oil company
The FARA unit hasn't shied away from big targets lately.
In April, after months of tangling with the Justice Department, the US subsidiary of the Venezuelan state-owned oil company Citgo registered for the first time as a foreign agent.
The registration ended a months-long standoff in which Citgo said it should not be subject to FARA. The company instead requested that the government allow it to continue disclosing its political activities under the less onerous Lobbying Disclosure Act.
In its bid to avoid registering, Citgo turned to William Burck, a top partner at the law firm Quinn Emanuel Urquhart & Sullivan. A high-powered defense lawyer, Burck represented several Trump associates - including former White House counsel Don McGahn and Steve Bannon - in the Russia investigation.
Burck is intimately familiar with FARA, having registered as a foreign agent himself in 2019 as he advised a Kuwaiti defense contractor. In Burck, Citgo had a man with both experience and political connections, and he raised the oil company's objections to Trump-appointed leadership at the Justice Department.
But the Justice Department's FARA unit wouldn't budge, dismissing Citgo's argument for avoiding registration, in which the company said that the foreign parent in Venezuela had no meaningful control over the operations of the US subsidiary.
In disclosures with the Justice Department, Citgo detailed meetings with lawmakers and Trump administration officials as it responded to Venezuela's leadership crisis in 2019. Citgo's relenting to the Justice Department's registration demand came just months after Trump left office.
A 'clerical error' and $50,000 for 'talent appearances'
The Justice Department's zeal for pursuing FARA violations has given rise to a growing unease among lobbying and public-affairs firms, particularly those that crossed paths with Giuliani and other Trumpworld figures with foreign entanglements.
Whether in response to inquiries or to head off scrutiny, firms have been returning to past disclosures with an eye toward filling in gaps.
"There's a sense of anxiety surrounding FARA compliance that really began post-Manafort but has not waned," said Josh Rosenstein, a partner at Sandler Reiff Lamb Rosenstein & Birkenstock and FARA expert.
"In my experience, a lot of firms are trying to get ahead of the DOJ a little bit," Rosenstein said. "They don't want to wait for an inquiry letter and have to incur the cost of that process when there's an argument to be made that they should have done something in the past.
"They'll do it on their own."
A public-affairs firm with ties to Giuliani appeared to make one such filing in March.
The firm, Sonoran Policy Group, reported expenditures related to a cocktail party thrown three years earlier, in 2018, as part of a multimillion-dollar campaign to improve relations between the Trump administration and then-Congolese President Joseph Kabila.
On that July evening in 2018, Giuliani posed for photographs on the top floor of the Hay Adams Hotel overlooking the White House. The reception featured remarks by the Democratic Republic of Congo's special envoy to the US.
Giuliani's presence conferred a sense of closeness to the White House. It also fueled questions about Giuliani's foreign entanglements at a time when he was serving as a personal lawyer for Trump in the Mueller probe.
When asked about his appearance at the event, Giuliani gave a variety of explanations.
For example, he told The New York Times in a story published in December 2018 that he wanted to "say hello to people" and impress a woman that evening by taking her "to the top of the Hay-Adams to see a Washington party" with a "great view."
Giuliani may have been laying on the charm that night. But his appearance had been arranged in advance by the firm of Robert Stryk, a big-spending lobbyist who bonded with the former New York City mayor over a shared taste for Scotch whisky and Cuban cigars, according to people familiar with the event.
In March, Sonoran Policy Group disclosed it had spent a combined $50,000 on "Event Consulting/Talent Appearances" in connection with the 2018 reception that Giuliani attended in Washington. Sonoran made the $50,000 payment in two installments to Frontline Strategies & Media, a public-affairs firm run by Eric Beach, a California political consultant and close associate of Giuliani's.
Beach worked on Giuliani's 2008 presidential campaign and helped oversee the pro-Trump Great America political action committee in 2016. Giuliani appeared in some of the PAC's commercials and later signed on as an advisor to a nonprofit linked to Beach and the longtime Republican strategist Ed Rollins.
Sonoran made the March disclosure to amend a previous filing that did not include the $50,000 in payments, among other costs for the 2018 reception. In the March filing, Sonoran said it had "previously overlooked these funds due to an unintentional clerical error."
Beach did not respond to repeated requests for comment, and Giuliani could not be reached for comment. Stryk declined to comment.
A month after Sonoran submitted its amended filing, the FBI raided Giuliani's home and office.
Originally published by Business Insider 4 August 2021.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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