These "supplemental registrations" are also required to indicate any changes from the initial registration statement, to identify any political contributions made by the agent, and to describe any propaganda disseminated during the period covered. Mr. Chairman, as with any disclosure statute it is often easier to identify and calculate the costs and burdens of compliance than the benefits. We need not look far for analogies: > The Freedom of Information Act has long been criticized by almost all > The Government in the Sunshine Act is perennially attacked for > Members of Congress and higher level Executive branch officials all file > And, of course, the other major lobbying statutes the Federal I think it is simply a truism that sunlight may have disinfectant qualities, but also can cause sunburn. The ultimate problem is that public disclosures are, like sunlight, hard to harness for the public good in a cost-effective way. I want to make clear that I am not deprecating the objectives of the FARA -- or of the FOLA, the Sunshine Act, ethics disclosure laws, or lobbying laws. In fact, I fully agree with and support them. I believe in the benefits of disclosure, of an aggressive free press, and of the vigorous debate that often ensues after controversial disclosures are made. I am just trying to place the FARA in context. And in context, Mr. Chairman, the difficulties in interpreting, complying with, and enforcing the FARA become more understandable. Problems with the FARA Almost since its inception the FARA has been criticized -- on the one hand, as being unclear and ineffective and, on the other, as being burdensome and unnecessarily intrusive. In this case, both sides are right. Congressional committees, the Government Accounting Office, the Congressional Research Service, academicians, public interest groups, and even the Department of Justice have found fault with the FARA over the years. Criticism basically falls into -3 three categories: (1) lack of clarity of the law, leading to uneven compliance; (2) overbroad exceptions and exemptions, leading to noninclusion of persons and activities that should be covered by the act; and (3) inadequate enforcement, which in large part flows from the first two. (1) Lack of Clarity. The lack of clarity of the FARA works to the detriment both of those who think the law is being flouted by thousands of unregistered foreign agents, and also of those who do not now register but would do so if they thought the law more clearly required it. One of the most prominent areas of controversy involves the so-called "lawyers exemption," which exempts from FARA coverage lawyers engaged "in the legal representation of a disclosed foreign principal before any court of law or any agency of the Government." But this exemption does not include attempts to influence or persuade agency personnel or The Department of Justice has, in its regulations implementing the FARA, further confined this exception to the lawyers exemption as covering only attempts to influence "with reference to formulating, adopting, or changing the domestic or foreign policies of the United States...." Coupled with a separate exemption for commercial activities, this loophole is obviously large enough for an army lawyer to pass through. But they do not ordinarily do so with any intent to evade the law. What does "legal representation" mean? What is an informal agency proceeding? Is Congress an "agency of the government" for these purposes? What is a congressional "proceeding," for that matter? Where does commerce end and policy begin? How do lawyer-client privileges affect filing requirements? I will not try to answer these questions, but I use them to illustrate some of the reasons that the FARA is unclear in ways that are readily apparent to those who want to be informed by public disclosures, as well as to those who make reasonable assessments that the law does not apply to themselves. (2) Underinclusiveness. Obviously the overbreadth of exemptions and the narrowness of coverage under the accepted definition of "foreign principal" lead to the act's missing a large number of persons who seek to influence government in ways that benefits foreign interests. The most obvious example of those not covered by the FARA are persons representing U.S. subsidiaries of foreign corporations. The "commercial exemption" has also been identified as a source of underinclusion of persons who are thought to be representing foreign interests in a way that ought to be disclosed under the FARA, but who are not now covered. Congressman Glickman's bill has as two of its main goals the expansion of the FARA's coverage to include agents working for entities that are foreign controlled, and effective elimination of the commercial exemption. (3) Inadequate Enforcement. Finally, in large part because of the difficulty in interpreting the FARA and in applying its exemptions, it is not surprising that there has been a claim of inadequate enforcement through the years. In fact, the Department of Justice has been straightforward in stating that its enforcement philosophy is ordinarily to force disclosure by those who should be registering under the FARA, rather than to prosecute persons who fail to file. Plainly, providing the Department with additional powers and instituting an array of civil penalties can go a long way toward improving enforcement of the statute. (So could increased staffing, but I am not sure I would place FARA very high on the list of federal criminal statutes in need of enhanced resources.) The first step toward improving enforcement of the law, however, should be clarifying the law. And while Justice can help here, this responsibility ultimately lies with Congress. Recommendations There have been a number of recommendations made through the years by almost everyone who has looked closely at the Foreign Agents Registration Act. The two bills under consideration today both contain some excellent proposals. I will not go through the list of suggestions and proposed amendments here, but will offer a few more general thoughts that I think should guide congressional action in this area. First, Congress should put an end to the hodgepodge of laws designed, without regard to each other, to require disclosures of persons who seek to influence government. Duplication and inconsistency plague the FARA, the Lobbying Act, and the Byrd Amendment. And that is not even to mention special laws governing lobbying of HUD (42 U.S.C. § 3537(b)), lobbying by beneficiaries of maritime programs (46 U.S.C. § 1225), or lobbying by public utility holding companies (15 U.S.C. § 79/(i)). Only inertia and the dispersal of committee jurisdiction over these various statutes stand in the way of uniformity and simplification. No more tinkering please; it is time to put the lobbying laws together into one consolidated and coordinated whole. Second, Congress should keep in mind two principles when drafting or amending lobbying laws: When it comes to defining coverage, lines should -5 When it comes to public financial disclosures, Third, the Department of Justice should recognize that it performs more than enforcement functions under the FARA and thus should not be so shy about giving public, even if not binding, guidance about how it intends to enforce the statute. The Antitrust Division of the Department does not even have the regulatory-type functions of the Registration Unit of the Criminal Dision, and yet the Antitrust Division > issues guidelines (the most notable being the Merger Guidelines) to > provides public advisory opinions (business review letters) indicating > through speeches and testimony by policy-makers, spells out its attitudes While the Registration Unit does provide written advice today, it resists making its letters public. If the problem is sensitivity, or an expectation of confidentiality on the part of those seeking advice, the format of its correspondence can be changed to avoid disclosure of identities while still providing useful guidance (as the IRS has done for years). Legislation is not necessary for this important, though modest, step toward making compliance with the FARĂ more uniform and predictable. Conclusion The Foreign Agents Registration Act is broken and needs fixing. But Congress should take care that it does not follow the lead of the Tax "Simplification" Act a few years ago and exchange chaos for confusion in the name of simplification. The public and Congress and Executive officials have a right to know who is being paid to influence government decisionmaking, for whom these persons are working, and roughly how much is being paid to these lobbyists and consultants, lawyers and agents. And it should not matter whether the client is domestic or foreign (though there may be a heightened curiosity, if not public interest, regarding foreign interests engaged in influencing U.S. policies). Beyond that, such things as the substance of the relationship between the lobbyist or agent and his client, the substance of the communication between the lobbyist or agent and the Member, staff, or agency official, and the details of monies paid and -6 received should not be subject to public disclosure. They are ordinarily not the public's business and, even on those occasions where they might be, individual and societal interests are more likely better to be served by confidentiality than by disclosure. This Subcommittee should expand its inquiry to include other lobbying statutes before it begins to legislate. And I suggest that any changes in the law be both clear and modest, so that the narrowness and lack of clarity in the present law do not give way simply to broader confusion and complexity. I appreciate having the opportunity to testify today. I look forward to working with the Subcommittee toward resolution of these very important problems through meaningful legislative reform. -7 |