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Law360 Interviews Matthew Sanderson on FARA Reform

November 15, 2021, Law360 Pulse

Before the 2016 election, Matthew Sanderson says matters touching on the Foreign Agents Registration Act probably took up about 5% of his political law practice at Caplin & Drysdale.

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In an interview with Law360 Pulse, Sanderson discussed what has made FARA such a challenging law to navigate, why he thinks the statute is taking on such importance in Congress and the DOJ, and his optimism that real reform will come. The interview has been edited for length and clarity.

What is FARA, and why is there a need right now for reforming it?

FARA is an 80-plus-year-old statute, designed originally as a statute for combating Nazi and Soviet propagandist and influence efforts prior to World War II. That original intent is still bound all these years later in the law. It was put together before globalization really hit hyperdrive. So for a lot of reasons over the years it's been amended. But our proposed reforms in the ABA task force report would be the most significant reforms in FARA's history. They're mostly geared at improving enforcement of the statute, both through giving the DOJ additional tools, giving them additional clarity about exemptions, but also clarifying for the regulated communities what certain terms mean that are left open-ended under the current law.

What would you say are the biggest challenges the clients you advise in this space face right now?

The lobbying, law firms and PR firms that we represent are trying to make judgment calls on whether to register under FARA at the beginning of their relationship with their client. That's the point when they have the least amount of information about the client, so it can make for some tough judgment calls in certain places. One of the reforms we recommended is that the foreign principal actually has some skin in the game. They have to certify that the filing is complete and correct so it's not just a U.S. person or lobbying firm that is on the hook for any kind of FARA violations.

You talk about how vague the statute can be — has that created a dynamic where parties are choosing to file whenever there is a doubt?

In most instances, the firm will refuse the work if they think they might have to register. The calculation has changed for groups and for U.S. actors. It used to be, register only if you absolutely have to. Now it's definitely much more of a register-out-of-an-abundance-of-caution type of environment. I still think there is a lot of work that is being chilled by the unclear provisions of FARA at times. What we're trying to do with the task force report is put in some clarity, which will be to the benefit of both the DOJ in enforcing the law and the regulated community in getting a better idea of when they crossed the line.

How does the policy chill lobbying or PR work that might have been done otherwise?

This comes up pretty regularly, where a private company is accused by someone in the U.S., whether a government official or [nongovernmental organization], of being connected to a foreign government. In order to ward off that type of claim, those companies will often seek help from the U.S. PR firms or U.S. law firms, and the firm in that case is put in a real bind. On the one hand, everything that the client is telling them indicates that registration would not be necessary because it's merely a private company, and on the other, some external party is making an allegation that they are connected to the government. In this kind of circumstance, there are many times where the firm will take a pass and say, we just don't know what to do.

And the reforms you seek are to make it more explicit when you'd need to register. What entities would still require registration?

Foreign governments, foreign political parties and those entities acting on their behalf, as opposed to the current statute, which covers all foreign individuals, all foreign companies, all foreign nonprofits and all foreign governments. Our article was really to focus FARA on the core of what the statute is supposed to be about, which is countering, or at least disclosing, foreign political influence campaigns in the United States.

Zooming out a bit, how did the FARA component of your practice change following the 2016 elections, as the DOJ ramped up its initiatives around it?

It changed significantly. We've done this work for my entire time in practice. But the quantity of questions has certainly increased since 2016. And with the DOJ announcing it as a priority in 2019 and then continuing to more heavily enforce the law, it's a much bigger part of our practice than it's ever been.

And why have we reached this phase, in which there's such a sustained uptick in the DOJ's enforcement of the FARA statute?

Three things. One, the 2016 election featuring alleged malign influence from foreign governments. That changed the conversation about how vulnerable we feel to foreign political efforts. That's the number one thing. Two, congressional pressure for the department to enforce FARA more heavily has been constant and predates the 2016 election. And third, I would say is the emergence of Chinese and Middle Eastern interests in wanting to influence public opinion and policymaking. They play hard sometimes here. Foreign governments and foreign political parties may be more interested in trying to shape public opinion than they have been previously.

Was the need just as high for these reforms 10 years ago, but the urgency wasn't there because it wasn't as prominent an issue for parties to be concerned about?

I think that's absolutely right. If it's not a heavily enforced law, then the consequences are not as severe. But also there's been a lot of new awareness of FARA. Whereas before you could fit the entire FARA bar in a minivan, now there's a lot of people talking about FARA. And as more people become more educated about what it is, the opportunities for reform have become readily apparent.

A number of bills were introduced in Congress, and this report explicitly states it wasn't interested in writing recommendations that would be limited by what's seen as politically viable. But what are your thoughts on the chances of these recommendations being taken up by Congress?

I think there's a lot of bipartisan energy around reforming FARA, and anytime you have that, the prospects for meaningful reform are good. I hope that the ABA task force report can spur some additional reform legislation that incorporates some or all of the ideas. I think what we try to do from a reform perspective on FARA is two things. One is to come up with new ideas that would help push reform. The other thing we wanted to do was give policymakers a menu of options. We don't just limit our recommendations to legislation. We also recommend a number of steps the DOJ, in the absence of legislation, could take now to improve FARA in their enforcement.

To view the full article, please visit Law360's website (subscription required).

For all other FARA related news, please visit FARA.us, a comprehensive online resource of information about the Foreign Agents Registration Act.

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