www.FARA.us

The comment period on the Department of Justice’s ongoing FARA rulemaking closed earlier this week, on March 3rd.  The Department received a total of 16 substantive comments.  Below is a summary of those comments, with a specific notation as to each comment’s position on adding the proposed “totality of the circumstances” test to the regulation interpreting the important Section 613(d)(2) exemption.

Comments Submitted by Law Firms/Legal Practitioners

• Caplin & Drysdale (28 pages)
  • Position on “totality” test: Oppose 
  • Other notable features:
    • Urged the Department to set forth a “coherent and consistently applied analytical framework” in interpreting the “commercial exemption”
    • Proposed a four-pronged “safe harbor” with regard to what constitutes “promoting the public or political interests of a foreign government”
    • Supported the exemption for tourism promotion
    • Noted the vagueness of the proposed “influence” exclusion related to the Section 613(d)(2) exemption
    • Advocated the complete deletion of the “totality” test proposal because it is inconsistent with the Bondi Memorandum, conflicts with congressional intent, departs arbitrarily from the Department’s prior regulation, saddles the Department with impracticable determinations it is ill-suited to make, and impermissibly shifts the burden of proof for prospective agents
    • Supported changes to the “legal representation” exemption, “informational materials” definition, and advisory opinion process
    • Suggested extensive changes to the Department’s proposal for labeling “informational materials”
    • Asked the Department to reconsider its refusal to clarify the “political consultant” definition
    • Requested the creation of a new foreign principal category for sovereign wealth funds and the issuance of model “know your client” procedures

• Lex Politica (4 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Expressed “support for Attorney General Pam Bondi’s enforcement priorities” and “concerns regarding the Biden Administration’s proposed rule to amend its FARA regulations”
    • Stated that the Section 613(d)(2) is “already a complex maze for practitioners and the regulated community”
    • Described the “totality” test proposal as a “regulatory curveball: an additional five-factor, overly subjective analysis” and as “impractical”
    • Opposed proposed changes to the advisory opinion process
    • Characterized the labeling proposals for “informational materials” as “neither technologically sound nor … align[ed] with purported transparency goals” and suggested a shortened label that would include only the hyperlinked word “FARA” on social media posts
    • Applauded the Department’s proposed exemption for tourism promotion

• Sandler Reiff Lamb Rosenstein & Birkenstock, P.C. (9 pages)
  • Position on “totality” test: Oppose 
  • Other notable features:
    • Remarked that the word “directly” is “the only objective standard in the relevant clauses of §5.304(b)&(c)”
    • Supported the Department’s proposed exemption for tourism promotion while also noting that “promoting travel is far from the only such activity ‘too attenuated’ from registrable activity to merit registration”
    • Noted that the “totality” test would apply even if “there is no indicia of foreign government or political party involvement” and that the “totality” test “would become more of an invitation for the Department to apply whichever factors it wants, whenever it wants, thus raising – instead of removing – the specter of weaponization of the Act”
    • Opposed the Department’s proposal to require advisory-opinion requestors to submit a list of partners, officers, certain employees, and affiliations
    • Disagreed with and suggested revisions to the Department’s proposed labeling requirements for “informational materials”

• Saul Ewing LLP (6 pages)
  • Position on “totality” test: N/A 
  • Other notable features:
    • Asked for additional clarification of the Bondi Memorandum
    • Requested that the Department clarify its “agency” definition despite the NPRM’s reservations in doing so
    • Stated that more clarification is needed about Section 613(d)(2)’s application to nonprofit organizations
    • Objected to the proposed “influence” and “the principal beneficiary” Section 613(d)(2) exclusions as “overbroad”

Comments Submitted by Organizations

• ACLU, Americans for Prosperity, Charity & Security Network, EarthJustice, et al. (3 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Stated that the “proposed regulatory changes to the Act … raise clear First Amendment concerns” and aggravate the Act’s ambiguity”
    • Noted the NPRM’s conflict with a Trump Executive Order the Bondi Memorandum
    • Asserted that the Department’s “‘non-exhaustive’ set of factors” within the “totality” test “is vague and creates confusion about what activity qualifies for this important exemption”
    • Criticized the Department for refusing to clarify the “agent” and “political consultant” definitions

• American Petroleum Institute (5 pages)
  • Position on “totality” test: Oppose 
  • Other notable features:
    • Focused advocacy exclusively on the Department’s proposal for the Section 613(d)(2) exemption because it could “lead to uncertainty and even less clarity regarding the application of the exemption”
    • Suggested that the proposed exclusion for activities “influenced” by a foreign government or political party be replaced with an exclusion for activities “directed or controlled” by a foreign government or foreign political party
    • Advocated the deletion of the proposed “totality” test or, in the alternative, proposed modifications based around direction and control of activities by foreign governments and political parties
    • Requested that the Department allow for more informal guidance via phone and email about FARA

• Association for Accessible Medicines (4 pages)
  • Position on “totality” test: Oppose 
  • Other notable features:
    • Mentioned that the NPRM referenced trade associations only once
    • Remarked that trade associations in particular “have a strong interest in clear rules, predictable in their application”
    • Described how changing the exemption carve-out from “directly promote” to “promote” would potentially affect trade associations that have corporate members
    • Explained that the proposed “totality” test would present special concerns for trade associations because it “is not clear how a trade association with U.S. members who have non-U.S. parents and affiliates” should evaluate whether the foreign or domestic interests predominate or measure “the amount of [foreign] influence, including through financing”
    • Stated that “the scope of the 613(d)(1) and (d)(2) exemptions are not academic questions for trade associations, even those … that are registered under the LDA” due to the lack of stability and predictability in how the law might otherwise apply

• Clarity Coalition (3 pages)
  • Position on “totality” test: Support
  • Other notable features:
    • Expressed support for the Department’s proposals without exception

• CSL Behring (2 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Stated that the “totality” test “introduces additional ambiguity regarding which activities may ultimately require FARA registration” and would likely “require companies to undertake additional compliance and legal reviews of certain business activities, increasing compliance costs and potentially delaying or slowing important business functions”
    • Urged the Department “to preserve the word ‘directly’ in §613(d)(1) to ensure that indirect benefits to foreign interests through legitimate commercial activities remain exempt”

• Global Business Alliance (3 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Declared that the “proposed deletion of the term ‘directly’ from § 613(d)(1) would greatly expand the scope of activities subject to FARA registration”
    • Stated that the “totality” test “would deprive individuals engaged in legitimate business activities from knowing with any certainty whether they need to register” and would affect “a wide range of business activities, including public relations, business development, regulatory engagement, and international consulting”

• Institute for Free Speech (14 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Provided background about First Amendment concerns implicated by FARA
    • Criticized the Department’s refusal to clarify the “agent” definition because it is “the most problematic term in the statute for exercising free speech rights”
    • Highlighted the distinction between “voluntary choice” and “obligation” or “non-voluntary control by [a] foreign interest” for agency purposes
    • Explained agency concepts at length
    • Urged the Department to clarify the “political consultant” definition
    • Expressed concern about the vagueness and overbreadth of the proposed changes to the Section 613(d)(2) exemption
    • Criticized the “totality” test proposal because it involves “secret factors known only to the Department,” allows a “case-by-case … approach to criminal law enforcement,” and utilizes vague verbiage

• International Center for Not-for-Profit Law (18 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Advocated the rejection of the Department’s proposal related to the Section 613(d)(2) exemption, since it “both unduly narrows the exemption and creates a confusing set of standards for its application”
    • Commented that the Department’s proposal related to the Section 613(d)(2) exemption appear “to be discriminatory against non-commercial entities”
    • Criticized the Department for refusing to clarify the “agent” and “political consultant” definitions
    • Supported a “legal representation” exemption broader than the Department’s proposal
    • Opposed changes to the advisory opinion process
    • Identified conflicts with Trump Executive Orders and related initiatives

• Public Citizen (7 pages)
  • Position on “totality” test: N/A
  • Other notable features:
    • Commended the Department for not “loosening statutory exemptions to FARA,” including those “being exploited to varying degrees by some foreign principals and their agents seeking to evade FARA’s extensive disclosure requirements”
    • Without noting an opinion on the “totality” test, stated that the “four proposed exclusions to the [613(d)(2)] exemption provide useful clarity to the rule”
    • Opposed the Department exempting tourism promotion from FARA’s coverage
    • Suggested record modernization and civil investigative demand authority

• Reporters Committee for the Freedom of the Press (5 pages)
  • Position on “totality” test: Oppose
  • Other notable features:
    • Began with statement that “Were FARA enforced consistent with its expansive and ambiguous text, those actions would flatly violate the First Amendment”
    • Objected to the “totality” test proposal because it would “expand the Department’s ability to enforce FARA in a manner which, if not carefully supervised, could be selective and politicized” and because it “could be used to force journalists or news organizations who are editorially independent but have some tie to foreign principals to register”
    • Expressed concern about the proposed labeling and disclosure requirements for “informational materials”

• U.S. Chamber of Commerce Institute for Legal Reform (7 pages)
  • Position on “totality” test: N/A
  • Other notable features:
    • Focused all commentary on “the critical need for increased transparency regarding foreign-sourced third-party litigation funding”
    • Did not comment specifically on the NPRM’s particular proposals

Comments Submitted by Individuals

• Andrew Dalack, Jacob Eisenmann, and Pierre Girgis (11 pages)
  • Position on “totality” test: N/A  
  • Other notable features:
    • Led with discussion of W.E.B. DuBois and biased prosecutions
    • Suggested that the “political activities” definition is a content-based restriction on speech and unconstitutionally vague
    • Did not comment specifically on the NPRM’s particular proposals