Justice Department weighing first big changes to FARA in decades

From: POLITICO Influence - Thursday Dec 09,2021 10:08 pm

Dec 09, 2021

Presented by CVS Health

With Daniel Lippman

DOJ WEIGHS NEW CHANGES TO FARA: The Justice Department is weighing changes to the Foreign Agents Registration Act for the first time in decades, according to an advance notice of proposed rulemaking released Wednesday. It’s an update to the statute that is long overdue, according to experts, and comes amid heightened attention to — and enforcement of — the rules governing foreign influence efforts.

— Though the statute saw minor changes in 2007 to allow for online filings, “really, these are the first major substantive changes, major substantive reworking, that we have done of the regulations in almost 30 years,” Jay Bratt , the head of DOJ’s Counterintelligence & Export Control Section, said this morning at a conference on FARA hosted by the American Conference Institute.

— FARA practitioners told PI that even reading between the lines of the notice can be telling — putting aside the significance of the notice itself. “It is the department for the first time, really, in 30 years signaling it intends to shape FARA,” said Brandon Van Grack, who oversaw the FARA office until earlier this year and is now an attorney at Morrison & Foerster. It’s also “the first time in, you know, our lifetime that they intend to shape FARA in a climate when they are enforcing FARA,” he said.

— The department is considering changes across a broad swath of the statute, and in many cases the new policies are ones experts have been calling for for a while. There’s “a lot of overlap” between DOJ’s proposals and a report released this fall by an American Bar Association task force on reforming FARA, said Caplin & Drysdale’s Matthew Sanderson, who co-chaired the task force. Josh Rosenstein, a lawyer at Sandler Reiff Lamb Rosenstein & Birkenstock who advises clients on FARA compliance, told PI that the rulemaking effort is something “the Bar has been asking the department to do … for a long time.”

— According to the proposed rulemaking, the department is considering, among other things, whether to narrow the so-called commercial exemption to FARA to exclude activity that only indirectly promotes the public or political interests of a foreign government or political party, as opposed to activity that directly furthers those interests. It is also asking for input on how to clarify FARA’s exemption for “bona fide” religious, academic or scientific pursuits — an exemption that a number of think tanks and academic institutions currently consider themselves qualified for — and whether it should codify existing public guidance on the statute’s exemption for lawyers.

— DOJ is also looking to bring FARA into the age of social media, asking how the department should require statements on various online platforms to disclose foreign influence efforts and whether disclosures should include more context for the public, such as a foreign principal’s relationship to its government. “We're very interested in people's proposals for that,” Bratt said.

— But the proposal doesn’t address some aspects of the statute, like the Lobbying Disclosure Act exemption, or FARA experts’ complaints that the statute as currently written requires foreign agents to provide their personal addresses — and Bratt noted that “this was a very careful process,” but hinted that the department is constrained in what it can to without additional legislation. “We are limited by the delegation that Congress has given to the attorney general to make recommendations,” he said.

— Still, “I think it validated … what many lawyers have thought, which is, this statute and these regulations are not able to address the modern world,” Rosenstein said. “And this is an acknowledgment by the department that there needs to be modernization.”

Good afternoon and welcome to PI. Send tips and drafts of your FARA rulemaking comments: coprysko@politico.com. And be sure to follow me on Twitter: @caitlinoprysko.

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Throughout the pandemic, in communities across the country, CVS Health has been there. We’ve opened more than 4,800 COVID-19 test sites, administered 38 million tests and given 43 million vaccines. We’ve expanded access to prenatal and postpartum care via telemedicine, increased remote access to mental health services and invested in affordable housing to help build healthier communities. We’ve been on the frontlines, making health care easier to access and afford. Learn more.

RETAIL EXECS ASK CONGRESS TO PUT INFORM ACT ON THE FLOOR: Nearly two dozen leaders of some of the country’s largest retailers pressed congressional leaders today to put the INFORM Consumers Act, aimed at cracking down on the proliferation of counterfeit and stolen goods being sold in online marketplaces, up for a vote in their respective chambers.

— “Criminals are capitalizing on the anonymity of the Internet and the failure of certain marketplaces to verify their sellers,” the executives, part of the Retail Industry Leaders Association, wrote in a letter today to House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, House Minority Leader Kevin McCarthy and Senate Minority Leader Mitch McConnell . “It is time for Congress to modernize our consumer safety laws so consumers, retail employees, and businesses are not targets of organized retail crime and dangerous counterfeit products. Implementing basic transparency and verification protocols is essential and will finally expose criminals who are selling consumers stolen, fake, and dangerous products,” they added.

— The bills in the House and Senate would require online marketplaces to collect and verify the identities of high-volume sellers. The federal legislation, and similar state bills, set off a fierce lobbying battle between retailers and e-commerce sites like Amazon, eBay, Poshmark and Etsy, with online marketplaces arguing that the bill’s requirements could be too burdensome for small sellers and pose privacy concerns.

— Larger e-commerce companies like Amazon contend the legislation is a means for brick-and-mortar stores to retaliate for the company eating into its business. Amazon and some sites that initially opposed the bills came around to the House version, which the Energy & Commerce Committee approved last month, though Senate Judiciary Chair Dick Durbin (D-Ill.), who sponsors the Senate version, has criticized differences between the bills that swayed Amazon’s support.

— Sure enough, one coalition representing online marketplaces swatted back at the retailers’ request. "We all agree organized retail crime is a problem, but punishing honest online sellers is not the solution,” the Makers and Merchants Coalition said in a statement. The coalition receives funding from the Internet Association, whose members include Amazon, eBay, Google and Facebook. The coalition said that “retail theft needs to be addressed at the brick-and-mortar scene of the crime.”

WHAT WENT DOWN DURING CRYPTO CEOS’ HILL DEBUT: “The U.S. cryptocurrency industry's top CEOs Wednesday pleaded with lawmakers to let their startups flourish without onerous regulations as Washington struggles to figure out how to police a decade-old digital asset market that's approaching $3 trillion,” POLITICO’s Zach Warmbrodt reports.

— “The leaders of the six crypto firms argued that the digital asset trading they facilitate is a global force for good that the U.S. should embrace”; meanwhile, “Coinbase Chief Financial Officer Alesia Haas and other executives showed a definite preference for a future in which the SEC would not be their regulator.”

— But the hearing “underscored a partisan divide over how to approach the industry, with Democrats also internally split over whether cryptocurrencies are good or bad for society. The rifts are a signal that it could take years for Congress to coalesce around major legislation revamping the regulation of digital assets.”

— “Bank lobbyists on the sidelines of the hearing used the opportunity to urge lawmakers to apply the same level of regulatory scrutiny to crypto startups as they do traditional lenders. Bank Policy Institute President and CEO Greg Baer, who represents the nation's largest banks in Washington, said his group welcomed the hearing and its recognition that more work is needed on the rules for digital assets. The American Bankers Association said in a letter to the committee that firms offering bank-like services should receive bank-like regulation.”

MEANWHILE IN FLORIDA: “Florida Agriculture Commissioner Nikki Fried, one of the leading Democratic nominees for governor, is coming under fire for her failure to promptly report how much lobbying money she made prior to taking office,” POLITICO’s Gary Fineout reports. “Florida’s ethics commission voted unanimously late last week that there is probable cause that Fried, who was an attorney and lobbyist, violated state law by failing to properly disclose income from her lobbying business.”

— “Just days before she began her campaign for governor this year, she amended two separate financial disclosure forms, including one showing previously unreported earnings of $351,480. The commission’s findings — as well as a recording of last Friday’s meeting — were made public on Wednesday and gives ammunition to Republicans eager to go after Fried, who has been a leading critic of incumbent Gov. Ron DeSantis.”

— “Fried has vowed to fight back against the allegations and her campaign maintained that the investigation was sparked by a ‘politically inspired nuisance complaint’ filed in June that is suspicious because it came from a Republican Party of Florida official.”

MEHLMAN’S LATEST: Bruce Mehlman of Mehlman Castagnetti Rosen & Thomas is out with his latest slidedeck that looks ahead to the political and policy risks of 2022 (let’s not talk about how it’s only three weeks away!). This one tries to game out how rising inflation, supply chain headwinds, growing U.S.-China tensions and extreme weather events are likely to impact elections and generate pressures on CEOs and government relations operations. Mehlman concludes that “volatility and disruption are the new normal,” demanding earlier planning, active management and proactive engagement — and that voters will see an estimated “one zillion” attack ads ahead of the midterms.

DON’T MISS CONGRESS MINUTES: Need to follow the action on Capitol Hill blow-by-blow? Check out Minutes, POLITICO’s new platform that delivers the latest exclusives, twists and much more in real time. Get it on your desktop or download the POLITICO mobile app for iOS or Android. CHECK OUT CONGRESS MINUTES HERE.

Jobs Report

— The American Hotel & Lodging Association has hired Kathryn Stone for the newly created position of counsel and corporate secretary. Stone previously served as the managing attorney and chief of staff of the Asian American Hotel Owners Association.

— Kim Axelrod will be chief operating office at Bully Pulpit Interactive. She was most recently executive vice presient and COO of the D.C. office of BCW.

— Pinkston, a strategy and comms consultancy, has acquired Pliris Strategies. Donelle Harder will join Pinkston as an senior vice president. She is the founder and CEO of Pliris and is a Kevin Stitt, Kenny Marchant and Jim Inhofe alum.

— Christopher McCaffery is now assistant to the president at the Ethics and Public Policy Center. He previously was a program associate at the U.S. Conference of Catholic Bishops.

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New PACs

Catalent, Inc. PAC (PAC)
Civil & Environmental Consultants, Inc. - PAC (PAC)
Fix Jersey Now PAC (Super PAC)
Legislative Change (Hybrid PAC)
PAM Health Political Action Committee (PAC)
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New Lobbying Registrations

Beatrice Rivera: In Our Loving Arms Inc.
Faegre Drinker Biddle & Reath LLP: Global Antibiotic Research & Development Partnership, North America (Gardp Na)
Fti Government Affairs: National Electrical Manufacturers Association
Polsinelli Pc: International Association Of Forensic Nurses
Polsinelli Pc: Organovo Holdings, Inc.
The Normandy Group, LLC: Katz, Marshall & Banks, LLP

New Lobbying Terminations

Akin Gump Strauss Hauer & Feld: Forever Energy, LLC
Tiber Creek Group: Mako Medical

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