Last week, a bipartisan, bicameral group of legislators introduced the Retroactive Foreign Agents Registration Act (“RFARA”) in the U.S. Congress.  Led by Chairman Mike Gallagher (R-Wis.) and Ranking Member Raja Krishnamoorthi (D-Ill.) of the U.S. House Select Committee on the Chinese Communist Party, the bill would amend the Foreign Agents Registration Act (“FARA”) to clarify that foreign agents have an ongoing obligation to register under the statute even after ceasing to act on behalf of a foreign principal.  The bill was prompted by a recent decision in Attorney General of the United States v. Wynn, which interpreted the statute’s requirements.

Wynn Decision

In Wynn, the Department of Justice (“DOJ”) pursued a civil injunction to force Stephen Wynn to register retroactively for activities allegedly conducted on behalf of the People’s Republic of China (“PRC”).  In a ruling that surprised the FARA bar, a federal district court judge in Washington, D.C. dismissed the complaint, holding that because Mr. Wynn terminated his agency relationship with the PRC — if one even existed — prior to the lawsuit, as both parties has acknowledged, Mr. Wynn no longer had an obligation to register.  The court concluded that he therefore could not be enjoined to register under FARA, even retroactively. The court’s reasoning underlying its holding was complicated and based on a prior D.C. Circuit case, United States v. McGoff, and textual analysis of the statutory provision relating specifically to civil injunctive actions.  The government has appealed the district court decision, and the appeal is pending.

Congress’s Response

Although the Wynn decision only applies in the D.C. Circuit, Members of Congress have expressed concerns that the Wynn decision could have more far-reaching consequences.  For example, a recent press release lamented that “an unregistered agent could simply announce that he is ending the agent relationship, never register, and face no penalty.”

The new legislation is designed to overturn the conclusion in Wynn.  The bill provides that DOJ “may make application for an order requiring a person to comply with [FARA and its regulations] . . . while the person acts as an agent of a foreign principal or at any time thereafter.”  Additionally, the bill makes clear that it applies to any individual who “serves as the agent of a foreign principal . . . at any time before, on, or after the date of the enactment [of the Act.].”  Accordingly, agents that have previously relied on the Wynn decision as a basis for non-registration would have new registration obligations under this bill, if enacted.

Curiously, the language of the bill only applies to “any individual who serves as the agent of a foreign principal.”  This language would seemingly not extend to partnerships, associations, corporations, organizations, or any other combinations of individuals currently covered by the definition of a “person” under the statute.  It is unclear whether Congress intends that the bill will only cover individuals like Mr. Wynn or whether the reference to “any individual” was a drafting error that could be changed in future iterations of the bill.

What Comes Next?

Given the strong bicameral and bipartisan support to regulate foreign agents, there may be an appetite in the full House to consider the bill.   As we previously reported, there are a number of other bipartisan bills related to FARA reform pending in Congress, revealing Congress’s continued bipartisan attention to the statute.  Covington will continue to monitor developments in changes to FARA and its regulations.

Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s Election and Political Law Practice Group. Mr. Kelner provides political law compliance advice to a wide range of corporate and political clients.  His compliance practice focuses on federal and state campaign finance, lobbying disclosure, pay to…

Robert Kelner is the chair of Covington’s Election and Political Law Practice Group. Mr. Kelner provides political law compliance advice to a wide range of corporate and political clients.  His compliance practice focuses on federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws, as well as legal ethics rules.  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 by municipal securities dealers, investment advisers, hedge funds, and private equity funds.  Mr. Kelner advises Presidential political appointees on the complex process of being vetted and confirmed for such appointments.

In addition, he regularly advises corporations and corporate executives on instituting political law compliance programs.  He conducts compliance training for senior corporate executives and lobbyists.  He has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance, as well as other corporate compliance matters.  Mr. Kelner regularly defends clients in investigations by the Federal Election Commission, the U.S. Department of Justice, the U.S. House & Senate Ethics Committees, the House Oversight & Government Reform Committee, the House & Senate Judiciary Committees, the House Energy & Commerce Committee and its Subcommittee on Oversight & Investigations, the Senate Finance Committee, the Senate Special Committee on Aging, the Senate Permanent Subcommittee on Investigations, the Senate Health, Education, Labor, and Pensions Committee, and other congressional committees.  He has prepared numerous CEOs and corporate executives for testimony before congressional investigation panels, and he regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  He also defends clients in Lobbying Disclosure Act audits by the GAO and enforcement actions and audits by state election and lobbying enforcement agencies.

Mr. Kelner 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, Legal Times, Washington Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Photo of Brian D. Smith Brian D. Smith

Brian Smith provides strategic and legal advice on matters that require substantial political, reputational, or government relations considerations.  He represents companies and individuals in high-profile or high-risk investigations, particularly congressional investigations, criminal investigations with political implications, and investigations related to political law compliance. …

Brian Smith provides strategic and legal advice on matters that require substantial political, reputational, or government relations considerations.  He represents companies and individuals in high-profile or high-risk investigations, particularly congressional investigations, criminal investigations with political implications, and investigations related to political law compliance.  He has significant experience in crisis management, where he advises clients facing combined legal, political, and media relations risks.  His practice also includes the development and execution of government relations initiatives, including securing the U.S. government’s political support on behalf of U.S. companies facing international legal issues.

Photo of Alex Langton Alex Langton

Alexandra Langton represents and counsels corporate, political, and individual clients in matters before government agencies and Congress. She also advises companies, PACs, nonprofits, and individuals on compliance with federal and state campaign finance, election, and lobbying laws.