This weekend, the New York Times ran a lengthy investigative report on foreign government donations to U.S. think tanks.  The story alleged that the foreign governments bought influence and paid for advocacy by some of the nation’s most respected research institutions.  The article outlined contributions from Norway, UAE, Qatar, Japan, and others to think tanks including the Brookings Institution, the Center for Strategic and International Studies, the Atlantic Council, and the Center for Global Development.

For a few years, we have noted – and been tracking for many clients – the growing enforcement and interest in the Foreign Agents Registration Act.  This weekend’s Times story focused on think tanks, but the FARA issues it highlighted are equally relevant to universities, social welfare organizations, and others that accept foreign government funding.  We have also seen PR and consulting firms confront FARA issues related to their clients outside the United States.  FARA is an important consideration for any advocacy organization that is closely aligned with a foreign government, country, or ethnicity.  (One of the leading FARA cases, for example, involved an Irish newspaper and advocacy organization.)  Even corporations have run into FARA.  Companies with foreign affiliates or U.S. subsidiaries of a foreign parent with close ties to the home country government can easily trigger FARA inadvertently.

Notably, the Times article alleged that the think tanks’ arrangements with foreign governments may have violated the law:

[T]he tightening relationships between United States think tanks and their overseas sponsors could violate the Foreign Agents Registration Act….  The law requires groups that are paid by foreign governments with the intention of influencing public policy to register as “foreign agents” with the Justice Department.

Unfortunately (or fortunately, for the think tanks), that’s not quite a fair paraphrasing of the law.  FARA is a complicated and arcane statute – its application can swing quickly between very different outcomes, depending on the specific factual situation involved.  Applying the law requires examining the relationship between the U.S. entity and the foreign government, the specific activities undertaken, and even the physical location of the activities, among other considerations.

In our experience – from working with think tanks and foreign donors – most organizations seek to avoid triggering FARA by specifying that the think tank is independent and not acting on behalf of the foreign donor.  These legal considerations are usually specified clearly in the grant documents.  This posture is natural for respectable think tanks – independence is central to their reputations and credibility.

Because FARA is targeted at “agents” of foreign entities, the registration requirement is generally only triggered when the agent operates at the “direction or control” of a foreign entity.  But the language of FARA is very sweeping and the statute encompasses those who act at the “request” of a foreign principal or those whose activities are “financed, or subsidized in whole or in major part,” by a foreign entity.

As a result, it is very easy to trigger the statute unintentionally unless FARA considerations are taken into account when negotiating the grant and drafting the contracts or grant documents.  Even then, the parties must remain vigilant throughout the relationship to avoid crossing the line and triggering the statute, notwithstanding any legal language in a carefully drafted document.

Although FARA is relatively esoteric, Covington’s experience in this area spans more than 50 years.  (One of the leading FARA cases is Attorney General v. Covington & Burling, where we established that the attorney-client privilege applies to FARA.)  We also defended a consulting firm targeted in the Department of Justice’s largest FARA investigation of recent memory.  We have advised a number of think tanks and other organizations regarding grant agreements with foreign governments, as well as foreign government instrumentalities considering grants to think tanks.

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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads …

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

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Photo of Brian D. Smith Brian D. Smith

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public…

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public relations risks. He assists companies and executives responding to formal and informal inquiries from Congress and executive branch agencies for documents, information, and testimony. He has extensive experience preparing CEOs and other senior executives to testify before challenging congressional oversight hearings.

Brian develops and executes government relations initiatives for clients seeking actions by Congress and the executive branch. He has led strategic efforts resulting in legislation enacted by Congress and official actions and public engagement at the most senior levels of the U.S. government. He has significant experience in legislative drafting and has prepared multiple bills enacted by Congress and legislation passed in nearly every state legislature.

Prior to joining Covington, Brian served in the White House as Assistant to the Special Counsel to President Clinton. He handled matters related to the White House’s response to investigations, including four independent counsel investigations, a Justice Department task force investigation, two major oversight investigations by the House of Representatives and the Senate, and several other congressional oversight investigations.

Brian is a Professorial Lecturer in Law at the George Washington University Law School.

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