Who Pays Your Bills? What Foreign-Supported Nonprofits Need to Know about the Foreign Agents Registration Act

The Lobbying Disclosure Act put quite a few regulations on nonprofits and associations regarding reporting of lobbying activity.  Frankly, I disagree with how the Act was written in that it doesn't take into account small nonprofits who may not have the staff or resources to fully comply with the stringent reporting requirements.  However, one key aspect of the Act is aimed at foreign nonprofits and associations and requires registration as well as disclosure of finances and activities in the pursuit of lobbying our elected officials or administratively appointed positions.  The following article needs to be read by all foreign nonprofit entities with a presence on Capitol Hill.  The penalties are stiff and not reporting correctly could cause foreign nonprofits to lose their ability to lobby.  Bunnie

Who Pays Your Bills? What Foreign-Supported Nonprofits Need to Know about the Foreign Agents Registration Act

by D. E. Wilson, Jr., Esq. and Andrew E. Bigart, Esq.,Venable LLP, Washington, DC

Lost in the media frenzy surrounding the arrest of 12 Russian spies by the FBI in June 2010 was the fact that the spies were arrested – not for stealing state secrets or trading technology – but for failing to register with the U.S. Department of Justice (“DOJ”) under the Foreign Agents Registration Act (“FARA,” 22 U.S.C. § 611 et seq.). This statute requires U.S. persons to register when they engage in certain political or quasi-political activities on behalf of “foreign principals.” The media’s obsession with Anna “Sexy” Chapman aside, the real lesson from the recent arrests is that U.S. persons – including trade associations, charities and other nonprofits – that engage in political or quasi-political activities on behalf of foreign principals must comply with FARA or risk similar public embarrassment and possibly criminal penalties.

What Is the Foreign Agents Registration Act?

FARA ensures that the U.S. Government and the people of the United States are informed of the identity of foreign persons attempting to influence U.S. public opinion, policy and laws. The statute requires persons representing foreign principals to register with DOJ for engaging in any of the following: (1) political activities; (2) public relations; (3) political consulting; (4) publicity activities; and (5) information-services. The statute defines the term “foreign principal” broadly to include foreign governments, political parties, individuals, and corporations.

Many nonprofits are surprised to learn that there is no FARA exemption for nonprofit, tax-exempt entities. Rather, FARA provides limited exemptions for raising funds for medical assistance and charity, and activities promoting bona fide religious, scholastic, academic, or scientific pursuits or of the fine arts. In addition, FARA provides an exemption for persons registered under the Lobbying Disclosure Act of 1995 (this exemption does not apply to the representation of foreign governments or political parties).

Persons required to register must provide DOJ with information on the nature of the relationship with the foreign principal, the work to be performed for the foreign principal, and, on a semi-annual basis, submit a report of the activities performed on behalf of the foreign principal and funds received from, or disbursed on behalf of, that foreign principal. Penalties for failing to comply with FARA can include a fine of $10,000 or imprisonment up to five years.

Why Should Nonprofits Worry about FARA?

The recent arrest of the 12 Russian spies under FARA underscores that DOJ will take action against persons who fail to comply with the statute’s requirements. For example, just days after the arrest of the Russian spies, DOJ obtained a guilty plea from a former U.S. congressman who failed to register under FARA for lobbying on behalf of an Islamic charity.

The issue of nonprofits and registration under FARA has become a hot topic in the blogosphere. DOJ has apparently opened an inquiry into whether two U.S. nonprofit organizations, B’Tselem and Americans for Peace Now, have violated FARA by failing to register as foreign agents. The investigation was launched in response to information provided to FARA by a group opposed to the political positions of the two nonprofits. Similarly, there are numerous websites devoted to whether the Council on American-Islamic Relations is a foreign agent that must register under FARA. The list of websites purporting to expose foreign agents goes on and on. In each case, the FARA hook is that the nonprofits receive a substantial proportion of their operational funding from foreign sources or act at the direction of a foreign parent or government entity.

The FARA registration requirements extend to trade associations that focus primarily on economic – as opposed to political – issues. For example, any trade association or export council that represents the interests of a foreign person or country may be subject to FARA. In this regard, several large international trade councils – such as the Korea-United States Exchange Council – are registered under FARA. There are, however, many other trade associations and export councils that appear to represent foreign interests that have not registered.

How to Ensure that Your Nonprofit Complies with FARA

Determining the types of activities that trigger the need to register under FARA (or the Lobbying Disclosure Act exemption) is a challenge, made even more difficult by the dearth of DOJ guidance on the subject. To avoid the possibility of criminal sanctions or public embarrassment, U.S.-based trade associations, charities and other nonprofits that receive funding from foreign sources or that are affiliated with a foreign parent should review their operations and funding to determine whether they qualify as a foreign agent of a foreign principal under FARA. This is especially true for any nonprofit that engages in U.S. lobbying or political activities.

If registration is required, legal counsel should be consulted for guidance on preparing and filing the required registration forms.

Mr. Wilson is a partner in the Washington, D.C. office of Venable LLP and a former Treasury official. Mr. Bigart is an associate in the Washington, D.C. office of Venable LLP. For more information, contact the authors at dewilsonjr@venable.com or aebigart@venable.com, or at 202-344-4000.

This article is not intended to provide legal advice or opinion and should not be relied on as such. Legal advice can only be provided in response to a specific fact situation.

Successful Legislative Visits

Successful Legislative Visits
by Bunnie Riedel, Host, Nonprofit Conversation

Most nonprofits are faced with having to deal with legislation from time to time.  Whether it's local city council ordinances or state or federal pieces, nonprofits find themselves needing to educate their legislators about their issues. 

I recently created a guidesheet about how to have an successful legislative visit and want to share it here.  While the guidesheet addresses visiting legislators on Capitol Hill, it can also be applied to any visit with any legislative decision maker.

Don’t drop in, make an appointment: It is more impressive to your legislative office when you are able to come to Washington, D.C. for a visit. But even if you can’t come to D.C. meeting with the legislative office in your home district is still important. Call the district office and make an appointment.


You can find your Representative’s local office here by going to your Representative’s home page.

House of Representatives
You can find your Senator’s local office by going to your Senator’s home page.

Senate

Ask to speak with the appointment secretary and be prepared to tell him/her that you’d like to meet with your Representative to discuss your issues or a particular piece of legislation.

The challenge of meeting with legislative aides. It is highly likely you will be meeting with a legislative aide and that poses a challenge. Most legislative aides are working on a variety of issues and may not be working on your issue at all. So be careful not to use “industry” language or terms they may not be familiar with, never assume they understand acronyms.  Frequently newer staff will appreciate any materials you may want to give them as it helps them explain your issue to the legislator.

Be brief. Be prepared to get only fifteen or so minutes with the legislator, staff or aide. Prepare in advance what you are going to say, if necessary take notes with you.

Know your legislator. Even if you have met your legislator before, do you really know how they vote on issues or what issues they are interested in? Go to their website, see what committees they serve on, find out what their interests are. Are they interested in veteran’s issues? Is their interest early childhood education? Look up their voting record at Project Vote Smart see how they vote on your issues or issues that are similar.  Look up their campaign finance record, did they receive money from organizations or businesses that have interests contrary to yours.  Their receipt of donations may not always be an indicaton of how they will vote on a particular issue, but it is information you should know.

Don’t be afraid to ask someone who personally knows the legislator to come with you for the visit. Do you have a friend who knows the legislator? Is there someone at your Rotary or Kiwanis Club? How about your local League of Women Voters or Republican or Democratic Party? Having someone with you who personally knows the legislator can be very helpful.

Travel light. There are times when legislative offices on Capitol Hill will meet with a group of people (say 15-20). That is not advisable when meeting in the district office. If you are doing a group visit in the district office keep the number at no more than five. This prevents the legislator or staff from feeling overwhelmed or “ganged” up on. If you are working with a large group of people who all want to have a visit, break up the large group into smaller groups and conduct the visits separately.

Be punctual. As with most things in life, being late doesn’t make a good impression. If you can’t be on time, be early. If you can’t make the meeting, don’t cancel, do what you can to get someone you trust to go in your place.

Be polite, briefly introduce yourself. Always be polite (especially to the appointment secretary). Give a brief introduction of yourself and a brief one or two sentences as to why you are there.

Don’t do all the talking. Nobody likes being in a “one-way” conversation. Ask questions, listen, find out what is on their mind. Don’t interrupt even if what they are saying is something you completely disagree with, wait until they are done and then offer them “engaged feedback.” “I hear your concern that this bill might be a burden to the taxpayers, but can I give you some examples of how that won’t be the case?” (By the way, never respond with “that’s not true”).

Be positive. Thank him or her for their support in the past, if there is no record of support for this issue, find out what other issues they have been supportive of and thank them for that.

Make it personal. All politics is local as Tip O’Neill once said. Politics are local and they are personal. Explain why your issue is a personal issue. Use examples from your nonprofit work or the community.Tell stories that will be remembered. Stay away from broad sweeping examples, get specific.

Have your supporting materials ready. Be sure to have a copy or copies of the bill you are visiting about, don’t make them look it up. Have talking points. If you have petitions that have been signed or letters of support that have been written, have those with you.

Ask for a commitment or ask when you might be able to have a commitment. If you are meeting with an aide, you probably won’t get a commitment at the meeting. Ask the aide when you should follow up for a commitment. If they aren’t sure, ask if you can call them in one to two weeks as a follow up. Generally, unless your legislator sits on the committees that deal with your issues, they haven’t seen the bill yet and probably won’t give you a direct commitment. Ask your legislator when you can follow up for a commitment on the bill. Ask if there is any other information or materials you could provide to help them in their decision.

Thank them for their time.  Sounds simple, but it is very important.

Finally, the League of Women Voters offers the following excellent advice about what to do or not do.

What to do:

Address your Senator or Representative properly.

Identify yourself immediately at each contact. Public officials meet too many people to remember everyone.

Know the status of the legislation. Refer to a bill by number whenever possible.

Use your own words.

Be brief and explicit, courteous and reasonable.

Establish your own credentials or expertise on the subject of legislation under consideration.

Give legislators succinct, easy to read literature; highlight important facts and arguments. Their time is limited.

Call the chair or members of a committee holding hearings on legislation in which you are interested if you have facts that you think should influence his or her thinking.1

Get to know legislative staff and treat them courteously. Their cooperation can make or break your chances to reach the legislators themselves.

Always keep off-the-record comments confidential.

Call to say you approve, not just to criticize or oppose.

In a letter include your address and sign your name legibly.

Keep the door open for further discussion in spite of any apparently negative attitudes.

What not to do.

Don't begin, "As a citizen and tax payer" (your elected representative assumes you are not an alien, and s/he knows we all pay taxes).

Don't apologize for taking his or her time. If you are brief and to the point s/he will be glad to hear from you.

Don't be arrogant, condescending or threatening toward legislators or their staff.

Don't argue or back recalcitrant legislators into a corner where they take a definite position against you.

Don't make notes of a conversation while talking to a legislator.