Panic on K Street: Laws might get enforced

Heaven forfend! While pundits across the political spectrum ponder which party gets its worst from Robert Mueller’s first indictments in his special counsel probe, K Street has hit the panic button, BuzzFeed reports. The discovery that federal investigators might take the Foreign Agent Registration Act seriously is “rattling” the lobbyist industry in Washington DC, where there is but one party — the Influence Party:

The threat of serving hard time for failing to disclose foreign lobbying work is rattling Washington’s multi-billion dollar influence industry following Monday’s 12-count indictment against Donald Trump’s former campaign chairman Paul Manafort and his deputy, Rick Gates.

And although the charges have largely been seen as a blow to the White House, Monday’s actions by special prosecutor Robert Mueller also sent shivers down the spines of Washington’s lobbyists, both Democrats and Republicans.

“It’s a swampy place, and the swampy stink knows no partisan allegiance,” said one senior Democratic congressional aide.

You don’t say. That was the biggest takeaway from the indictment of Paul Manafort and Rick Gates, which focused almost entirely on their lobbying careers between 2006-14 and attempts to hide their cash and cover it up later. It immediately prompted the exit of Tony Podesta from the eponymous firm he co-founded with his brother John, a move Podesta had not made even after word leaked that he was a target in the Mueller investigation. So far, no moves have been made at Mercury LLC, the other firm involved in the indictment, which insists that it obeys the law — even after Mueller’s indictment uncovered the elaborate schemes to evade it.

What does it say that it took an indictment like Manafort-Gates to throw a scare into K Street? Nothing good, says Craig Holman at watchdog group Public Citizen, which keeps an eye on lobbyists in Washington DC. The lack of enforcement of the FARA law has led to a free-for-all where foreign governments can effectively lobby without notice — and lobbyists can make tons of cash for their missions:

“The indictment of Manafort is sending shockwaves through K Street and the FARA Unit at the Department of Justice,” said Craig Holman, a government affairs lobbyist at Public Citizen, a group that supports government transparency. “The Justice Department largely neglected its role in the administration of FARA, which emboldened many lobbyists to ignore the law and opt to register under the weaker disclosure regime of the Lobbying Disclosure Act, if at all.”

Even when the DoJ takes some interest in FARA, it’s usually just to press for retroactive compliance rather than prosecution. It took the Russia-influence probe to force the DoJ into actual enforcement — or rather, to have a special counsel do it for them. The lack of enforcement incentivized all sorts of bad behavior, BuzzFeed’s report suggests, and now the lobbyist industry is worried about retroactive investigations. Get ready for a run of FARA disclosures in the near term.

That may not be enough, one expert tells The Atlantic, which calls Manafort-Gates “the most significant prosecution of a Foreign Agents Registration Act violation ever.” But will FARA get taken seriously without a special prosecutor looking for leverage in unrelated matters?

The Department of Justice’s FARA unit is small and it’s easy to skirt or violate the law and get away with it, and it’s commonplace on K Street to do so. This is why the possibility that Manafort and Gates could go to prison for violating FARA could have reverberations across the lobbying world.

“There has not been as high a profile prosecution for FARA as this one, in recent decades,” said Joseph Sandler, an attorney and expert on FARA compliance with the firm Sandler Reiff Lamb Rosenstein & Birkenstock. “This will certainly cause individuals and firms who rep foreign governments and government-controlled organizations in a variety of ways, to take the FARA requirements much more seriously going forward.” …

“People were flipping out about it at the time, and nobody did anything,” one Republican who was familiar with the Centre’s arrangement with the Podesta Group and Mercury at the time, and who spoke on the condition of anonymity, said of the Ukraine lobbying.

The FARA unit of the DOJ, the Republican said, is “toothless.”

If Trump and Jeff Sessions want to get serious about draining the swamp, this seems like a very good place to start. Had previous administrations of both parties taken this law seriously, we might not have spoken of Paul Manafort at all in this election cycle. Now that the swampy stink has finally blown up in the Beltway’s face, Trump and Republicans on Capitol Hill have a great opportunity to clean up the capital, and at the same time guard against unseen foreign influence in elections. Even if the “swampy stink knows no partisan allegiance,” its solution can have Republicans in the lead.

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