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DOJ Reveals Foreign Agent Cases Are Fara from Over

On March 6, Assistant Attorney General for National Security John C. Demers announced that the Department of Justice (“DOJ”) has designated a new deputy chief to lead the Foreign Agents Registration Act (“FARA”) unit and that DOJ will start treating FARA as an enforcement priority.  The new role will be filled by former Mueller Investigation Special Prosecutor Brandon Van Grack, a veteran of the National Security Division and the U.S. Attorney’s Office in Eastern District of Virginia.  Although DOJ has been adding to its FARA investigation team over the past year and a half, the “priority” announcement signals a shift toward greater focus on these investigations and potential charges. 

FARA (enacted in 1938) is a “disclosure statute that requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities.” The term “foreign principal” is defined broadly and includes foreign political parties, a person or organization outside the U.S. (except U.S. citizens) and any entity organized under the laws of a foreign country or having its principal place of business in a foreign country.  In practice, anyone who intends to act as an agent must register with the DOJ within ten days of agreeing to become an agent and before performing any activities for the foreign principal.  In addition to registering, agents are required to file forms outlining their agreements with, income from, and expenditures on behalf of the foreign principal. These forms are public records and must be supplemented every six months.  There are additional disclosure and record keeping obligations.  The statute has both civil and criminal enforcement mechanisms.

After decades of relatively few FARA prosecutions, the statute has become an increasingly prominent focal point of charges connected with the Mueller Investigation.  In 2017, Paul Manafort and Richard Gates were charged with knowingly and willfully violating FARA by failing to register as agents of the government of Ukraine, the Ukrainian Party of Regions, former Ukrainian President Victor Yanukovych, and the Opposition Bloc, a successor political party to the Party of Regions. Manafort and Gates were further charged with violating FARA by making several false statements of material facts and omissions of material facts in a FARA document submitted to the DOJ.  Manafort and Gates both subsequently reached guilty pleas.  Another Manafort associate, lobbyist Samuel Patten, also pleaded guilty for failing to register as a foreign agent under FARA.  Most recently, the law firm Skadden, Arps, Slate, Meagher & Flom reached an agreement with DOJ over its failure to register former firm partner Greg Craig’s work for a Ukrainian political party, and the firm was required to disgorge $4.6 million in fees and to improve its internal compliance policies as a result.  Craig remains under personal investigation as well.

The prospect of increasing FARA investigations and prosecutions indicates that foreign interests that rely on U.S. agents, and the agents themselves, should diligently review their internal FARA-compliance measures to ensure that they adhere to FARA’s requirements.  They should also be prepared to respond carefully to FARA-related inquiries because the responses will apparently be subject to greater scrutiny by the DOJ.

© 2019 Bracewell LLP

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Philip Bezanson, white collar criminal defense, securities, attorney, Bracewell
Managing Partner, Seattle

Philip J. Bezanson's practice focuses on white collar criminal defense, internal investigations, securities enforcement and regulatory matters.

Mr. Bezanson is a member of the Bracewell & Giuliani LLP team that has represented corporate and individual clients in recent high-profile and complex cases, including the Deepwater Horizon explosion, the George Washington Bridge lane closure and General Motors ignition switch investigations, "Pay to Play" cases in New York, New Mexico and Illinois, the stock options backdating cases, and a variety...

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Stephen Braga Litigation attorney Bracewell
Partner

Stephen Braga chairs the firm’s national white collar defense practice. He has over 35 years of experience representing individuals and companies in criminal and civil matters before trial and appellate courts throughout the United States.

He has played a leading role in many high-profile white collar cases and investigations in Washington, DC over the course of his career, including defending public relations executive Michael Scanlon in all aspects of the Jack Abramoff lobbying scandal. In the course of this work, as exemplified below, Steve has represented numerous Executive Branch and Congressional officials in addition to private individual and corporate clients. Other career highlights include acting as lead counsel in securing the release in two separate high-profile representations of men who had spent decades in prison for wrongful murder convictions: Marty Tankleff, who was exonerated on an appeal argued by Steve, and Damien Echols, a member of the “West Memphis Three,” who was freed from death row on a deal negotiated by Steve.

Steve was elected a fellow of the American College of Trial Lawyers in 2008.

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Robert Wagman, Bracewell Law Firm, Government Business and Litigation Attorney
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Bob Wagman has experience representing U.S. and foreign companies of all sizes in a broad range of industries in all facets of conducting business with the government including government contracts, grants and other federally-funded projects. Bob’s experience ranges from representing companies in litigation matters before courts and administrative tribunals to advising clients in transactional matters and regulatory compliance.

Bob has represented numerous companies in civil False Claims Act (qui tam) matters ranging from representing companies...

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