Scrutiny of Foreign Influence of Environmental Groups Raises FARA Issues for Companies and Non-Profits

Scrutiny of Foreign Influence of Environmental Groups Raises FARA Issues for Companies and Non-Profits

November 11, 2020, Covington Alert

The Department of Justice (DOJ) and other federal agencies have increasingly examined issues related to potential foreign influence of environmental groups in the United States. Notably, last month, EPA Administrator Andrew Wheeler referred a number of environmental groups to the Department of Justice for examination under the Foreign Agents Registration Act because the organizations reportedly received money from foreign governments. This action came after Rep. Lance Gooden (R-Tex.) expressed concerns about these groups’ activities regarding U.S. energy policies. Similarly, in 2018, then-House Natural Resources Committee Chairman Rob Bishop (R-Utah) sent letters to a number of environmental advocacy organizations demanding documents regarding potential ties to foreign officials and environmental activists.

Because FARA is a notoriously tricky statute, with broadly worded triggers, complicated statutory and regulatory exemptions, and a complex history, it is sometimes difficult for companies and non-profits to navigate whether registration is required. FARA requires an “agent of a foreign principal” to register with the DOJ and file detailed disclosure reports periodically. To become a foreign agent, an individual or entity must engage in certain activities, within the United States, on behalf of an entity outside the United States, including a foreign government, foreign corporation, foreign individual, or foreign non-governmental organization. An individual or entity may also become an agent if the activities are “financed, or subsidized in whole or in major part” by a foreign entity. 

Engaging in "political activities" triggers FARA. The term broadly encompasses any activity that is intended to, or even "believed" to, influence the U.S. government or any section of the U.S. public on U.S. domestic of foreign policy issues. These include influence efforts aimed at formulating, adopting, or changing the foreign or domestic policies of the United States, or the "political or public interests, policies, or relations of a government of a foreign country or a foreign political party." The statute also covers acting as a "public-relations counsel," "publicity agent," "information-service employee," or "political consultant,” all of which are defined exceedingly broadly.

The statute’s broad language and the DOJ’s recent enforcement priorities highlight the risks associated with companies and non-profits engaging in foreign-funded environmental advocacy, some of which Republican lawmakers have labeled as efforts to “disrupt American energy operations” and "diminish American energy independence.” The DOJ has agreed with some of these assertions. For example, in a recent advisory opinion, the FARA Unit required a non-profit, which appears to be the National Wildlife Federation, to register under FARA. The FARA Unit’s conclusion was based on grants from a foreign government that “obligated [the non-profit] to engage in activities to advance the deforestation priorities of the [foreign government ].” (Although the organization ultimately registered under FARA, it did so under protest, disputing the DOJ’s conclusions.)

Apart from grants from foreign governments to advance environmental priorities, companies and non-profits in the United States should also be wary of informal communications from foreign governments or other foreign principals that could be perceived to be within the scope of FARA. Triggering FARA does not require a contract, agreement, or common law agency relationship. At its broadest, FARA covers actions taken merely at the “request” of a foreign entity. Indeed, Attorney General William Barr highlighted this point in a July 17, 2020, speech where he emphasized that American companies should be wary of “behind-the-scenes efforts” by the government of China to “cultivate and coerce” U.S. companies into furthering the political objectives of China, potentially triggering FARA.

In short, FARA is written so broadly that it could potentially require registration for some activities that companies and non-profits consider routine engagement on environmental and energy policy issues. 

Covington has one of the nation’s most experienced and long-standing FARA practices, which includes attorneys in our Election and Political Law and White Collar Defense practice groups. The firm routinely advises U.S. and international clients on compliance with FARA, obtains advisory opinions from the FARA Unit, represents clients in FARA audits and internal investigations, and defends clients accused of violating FARA.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Election and Political Law practice below.