In one of the last Senate sessions of the year, Sen. Grassley called for the Senate to pass S. 1762, the Foreign Agents Disclosure and Registration Enhancement Act, a bipartisan bill that he introduced in 2019. In his remarks on the Senate floor, Sen. Grassley noted that the bill was supported by the chairs and senior Democratic Senators of both the Senate Judiciary Committee and the Senate Intelligence Committee. He noted that he recently received support from Sen. Jim Risch (R-Idaho), the Chairman of the Senate Foreign Relations Committee, a development that appears to have prompted Sen. Grassley to seek consent to pass the bill.
Notably, it was Sen. Menendez, the ranking Democratic Senator of that same Committee, who objected to passing the bill by unanimous consent. Sen. Menendez noted his agreement with Sen. Grassley “that changes are sorely needed to FARA,” but he noted that Members of Congress had introduced numerous FARA reform bills, with a wide variety of proposals, including “additional disclosure and registration requirements, significant changes to the current FARA exemptions, or more electronic reporting.” The Foreign Relations Committee, he said, should have an opportunity to “considering such changes . . . and to see if other changes are warranted.”
Sen. Menendez also raised concerns that FARA’s “definitions and requirements are broad and sow confusion over exactly when and under what circumstances an individual must register and report covered activities.” He noted that some organizations are concerned that broader FARA enforcement authorities could lead to the statute being “weaponized.”
Sen. Grassley’s legislation would make several significant changes to FARA enforcement:
- The bill would give the Attorney General the authority to issue civil investigative demands to require the production of documents, answers to interrogatories, and testimony from witnesses in FARA investigations. Grassley indicated that he modeled the provisions on similar authorities in the False Claims Act.
- The legislation would increase the criminal penalties for willful violations and material misstatements to $200,000 (from $10,000) and increase the penalty for more minor violations to $15,000 (from $5,000).
- The bill would create a new criminal offense for meeting with a Member of Congress or staff without disclosing that an individual is a registered foreign agent.
- The bill would create new civil penalties for violations of the statute, including a $10,000 fine for failing to file, a $1,000 fine for failing to file a required supplemental statement, and fines up to $200,000 for other violations, including failing to rectify a deficient filing.
- The legislation would require the Department of Justice to develop a comprehensive strategy for FARA enforcement, including an examination of all of the registration exemptions contained in the statute. The bill also would require various reviews by the Department’s Inspector General, reports by the Attorney General, and audits by the Government Accountability Office.
- Most significantly for private sector companies, the bill would require the Government Accountability Office to audit the use of the Lobbying Disclosure Act exemption to registration, and provide recommendations for potential improvements. Notably, this bill does not contain a repeal of the LDA exemption, which had been in an earlier version of Sen. Grassley’s reform legislation and would have forced many private sector companies to register and report under FARA.
FARA has been enforced with increasing aggressiveness by the Department of Justice over the last several years, not only through formal enforcement actions but also through audits, advisory opinions, and the issuance of determination letters demanding that private parties register. Senator Menendez’s public expression of concern regarding FARA’s breadth and its potential “weaponization” is a significant development. Although Senator Grassley failed in his attempt to pass the bill, which has never had a full public hearing, Senator Menendez’s acknowledgement that changes in FARA are sorely need may suggest an opening for fuller consideration, and perhaps even enactment, of the bill in the next Congress.