The Manafort indictment is killing D.C.'s secret lobbying business

For years, there’s been an open secret in Washington power circles: It’s highly profitable, if morally dubious, to secretly promote the interests of foreign governments, dictators, or oppressive regimes.

Then came Paul Manafort’s indictment.

At the end of October, Trump’s former campaign manager was charged for working for Ukraine for nearly a decade without telling the U.S. government. Special Counsel Bob Mueller, who’s overseeing the Russia investigation, could also bring a similar case against former Trump adviser Mike Flynn for over half a million dollars’ worth of work he did as a foreign agent of Turkey, including writing an op-ed in strong support of the country on Election Day.

Now, D.C. has snapped to attention. Lobbyists and media consultants working on behalf of foreign governments, known as foreign agents, are scrambling to lawyer up and tell the government, as required by the Foreign Agents Registration Act (FARA). And because of decades of non-disclosure, some congressional offices have even been going through their records to check who, exactly, they’ve been meeting with.

Foreign agents have long operated under a loose system of voluntary disclosure, and prosecutions for failure to disclose their ties were so rare as to be nonexistent. In the last 50 years, FARA has been used to prosecute just seven people. Based on the level of detail included in Manafort’s indictment, however, Mueller may have a solid case, although Manafort pleaded not guilty to all 12 counts.

“The ante has been raised with this kind of indictment. From their [his clients’] perspectives, they just want to check all of it,” said Ron Oleynik, the head of Holland & Knight’s international trade practice, based in D.C.

With the new focus on enforcement since Manafort’s indictment, D.C. lawyers who specialize in FARA told VICE News they’ve seen a notable increase in business.

“The firm’s phone has been ringing off the hook,” Oleynik said. “We’ve had literally a dozen or more new clients or potential clients. We don’t see a dozen in a year.”

Joshua Rosenstein, a partner at D.C. political law firm Sandler, Reiff, Lamb, Rosenstein & Birkenstock, also experienced what he called a “definite uptick”: around 10 new or existing clients inquiring about FARA.

Even before Manafort’s indictment, rumors of his business ties to the Party of Regions, the pro-Russian political base of Ukraine’s ousted president Viktor Yanukovych, thrust FARA at least partially into the political spotlight. The number of registrants surged to a five-year high in fiscal year 2017, which ended Sept. 30, according to data obtained by Bloomberg. At the time, 2,161 people and 426 firms had registered as foreign agents for places like Turkey, Catalonia, and Saudi Arabia. Since FARA requires that registrants re-file every six months, those numbers likely ballparked everyone registered.

The surge of new clients isn’t wholly surprising. FARA is now on everyone’s radar. As it’s written, voluntary compliance is the cornerstone of the law. Even if someone waits years to register, as long as they do when they’re asked, they likely won’t be criminally charged. Roughly half of all FARA filings come in late and even DOJ staffers complain about the lack of enforcement, according to a report from the Inspector General last year. Effectively, that means lobbyists for foreign governments can do much of their work in secret — and register retroactively.

READ: It’s nearly impossible to tell who’s working for a foreign government

Manafort’s charges for failing to register alone shocked the system. But Mueller added another unusual unusual charge: lying to the DOJ about his work in Ukraine five separate times, each of which carries a sentence of up to five years in prison if he’s convicted.

“That served as a wake-up call to current FARA registrants that they can’t make errors that they know are errors,” Rosenstein said. At least half a dozen current clients have called his boutique firm asking for help reviewing their prior filings to the DOJ. “We take special care with our clients to make sure that what they do file is accurate, so it’s unusual to have that many inquiries in this short a time.”

Aside from Manafort’s indictment, the spectre of enforcement in D.C. has suddenly became real. The day after the charges came down, Rep. Mike Johnson and Sen. Chuck Grassley, both on their legislative bodies’ respective judiciary committees, proposed a bill to reform FARA, that has a good chance of passing. Although light on specifics so far, the bill, called Disclosing Foreign Influence Act, seeks to clarify registration requirements and give more resources to the thinly staffed FARA Registration Unit within the National Security Division of the DOJ.

D.C. lawyers said that some people who called in to their offices specifically mentioned either Manafort’s indictment or Johnson and Grassley’s bill, or both. Tony Podesta even resigned from the Podesta Group — another lobbying firm that may have failed to disclose the extent of its work for Ukraine — the same day the charges dropped.

“My bill is about protecting our democratic process. Currently, foreign agents can easily circumvent our laws, accept millions of dollars from foreign entities and use that capital to lobby the U.S. government, subverting the voice of the American people and threatening our national security,” Johnson told VICE News. “Congress cannot continue to ignore decades of reports that highlight the failures in this law. We must restore transparency in our system.”

READ: Manafort’s indictment was written to terrifying K-Street

Acting as a foreign itself isn’t illegal; only failing to tell the government is. Rosenstein said being a foreign agent comes with a “Scarlet L,” for lobbying, on their foreheads. No one wants to end up in the White House, for example, having worked on behalf of Russia or Turkey at some point in their career.

“There’s a view in much of the Washington lobbying community that FARA is a pain, that you represented foreign interests and somehow that’s unpatriotic and the American public is not going to view that favorably,” Oleynik explained.

Since Manafort’s indictment, not even media companies — which the government has traditionally left out of public enforcement efforts — have been safe from the crackdown. Last week, the DOJ had set a deadline of Nov. 15 for RT America, the D.C.-based arm of Russia’s Kremlin-controlled news agency, to register as a foreign agent. That’s not a new idea, even from the Russian side of the aisle, and Japan’s NHK and China Daily had already registered.

Although RT soon complied with the DOJ’s request, the publication had resisted a prior deadline of Oct. 19, before Manafort’s indictment.

“Between a criminal case and registration, we chose the latter. We congratulate American freedom of speech and all those who still believe in it,” RT editor-in-chief Margarita Simonyan tweeted. It’s worth noting, however, that registering shouldn’t affect the publication’s content. The law’s intent is transparency rather than censorship or control.

In a report on Wednesday, the U.S. China Economic and Security Review Commission, an independent agency of Congress, urged that some Chinese journalists and publications also be required to register.

“If you are truly acting as agent for a foreign government, it doesn’t matter what your corporate status is — whether you’re a think tank, a media organization, a lobbyist,” Rosenstein said. “FARA does have broad applicability.”