Zachary G. Parks, a partner in Covington’s Election and Political Law group, was quoted by Law360 on the challenges defense contractors face in navigating a new law—Section 851 of the National Defense Authorization Act for fiscal year 2025—that bars the Pentagon from contracting with companies that hire lobbyists for Chinese military companies on the DOD's 1260H list.
Zack explained the breadth of the statute. "The statute would capture classic D.C. lobbying and lobbying firms, but it also sweeps much broader," he said. "It would capture any firm or organization that even advises Chinese military companies behind the scenes about how to influence U.S. policy, even if that firm itself is not actually directly lobbying the government."
"So, a defense contractor would want to take a look at who its PR firms are working for, doing lobbying activities for, who its consulting firms are doing lobbying activities for, trade associations, law firms, any sort of consultant that provides advice, if they are providing advice to Chinese military companies about how to influence U.S. policy, that could be a concern for the defense contractor continuing to do business with the U.S. government," Zack added.
Zack said that, until the DOD provides clarity, defense contractors need to, at minimum, ask their consultants for certifications confirming they do not engage in lobbying activities for entities on the 1260H list. He added that contractors can also look up whether their consultants represent anyone on the list through the publicly available Lobbying Disclosure Act and Foreign Agents Registration Act databases.
"That in and of itself is probably not alone sufficient, because the rule prohibits defense contractors from entering into contracts with the Department of Defense if any consultants do lobbying activities work for entities that are on the Chinese military company list, and lobbying activities can include things that don't necessarily trigger Lobbying Disclosure Act registration or FARA registration, but it's at least a good first step to check whether those firms are listed," Zack said.
Zack also said contractors should consider incorporating restrictions into contractual agreements with new consultants going forward, barring them from engaging in lobbying activities with companies on the 1260H list.
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