FARA Went Down to Georgia: State Seeks to Regulate Foreign Agents
By: Steve Roberts, Timothy E. Kronquist, Nicole Kelly, and Merrill Weber
This article was also published by Law360 on April 24, 2024 - Georgia's Foreign Lobbying Bill Is Not A FARA Copycat - Law360
What’s Happened So Far
Regulatory activity at the state level suggests that more than just the media and the general public have taken an interest in the Foreign Agent Registration Act (FARA), which has increasingly attracted attention largely due to high-profile enforcement actions and cases. Specifically, state legislators have begun to assess whether they should introduce their state-specific disclosure requirements for “foreign principals,” as well as “agents” acting on their behalf to influence lawmakers or the public in those states.
One of these states is Georgia – where legislators have sent Georgia Senate Bill 368 (SB368) to Governor Brian Kemp for signature as of April 2, 2024. Governor Kemp is expected to sign the legislation, given the bipartisan support in the legislature to pass the bill, including a strong endorsement of the bill from Secretary of State Brad Raffensperger.
What It Does
Georgia’s SB368 can essentially be divided into two parts: a prohibition on foreign campaign financing and the institution of a broader Georgia state-focused foreign agent disclosure system. Regarding the restrictions on foreign campaign financing, SB368 prohibits foreign nationals from making contributions to a candidate, Super PAC, or any other form of a committee. In tandem, it makes it illegal for one of these entities to knowingly accept any contributions from foreign nationals. Arguably, this is an unnecessary provision, since contributions by foreign nationals are always prohibited in every form of election within the United States, whether that is a federal, state, or local election, though it does give the state government the additional ability to enforce and prosecute its own law.
What It Means
For practitioners and regulated entities operating in this space, the more interesting portion of the legislation is its proposed new foreign agent disclosure requirements. SB368’s stated goal is to increase transparency of foreign influence in the political and election process, a vision which aligns with the nearly 90-year-old FARA. In practice, this means a greater regulatory burden on organizations that operate in the state of Georgia – or run nationwide advertising campaigns that simply do not exclude Georgia – and have relationships or work on behalf of “foreign principals” within the jurisdiction.
While this legislation has been labeled by some as a copycat of FARA, it is not the same as its federal counterpart. This means that Georgia regulators will not be able to replicate FARA in their application of SB368, leaving the logistics of how this law would be implemented up in the air for regulated entities. Moreover, the state’s version of the federal transparency law lacks several registration exemptions commonly used by business entities, suggesting SB368 may capture a broader swath of organizations that may be required to register with Georgia despite being exempt under federal law. This article lays out the key similarities – and major differences – between the federal statute and Georgia’s legislation. It also describes the impact this legislation could have on the regulated community.
FARA-esque Provisions in SB368
Similar definitions of Foreign Principal and Foreign Agent. Both FARA and SB368, define a “foreign principal” to mean a version of the following: (1) a foreign government or political party; (2) any non-citizen or non-Green Card holding individual outside the US, or (3) any entity organized under the laws of a foreign country or having its principal place of business in a foreign country.
In that same vein, under FARA, an “agent of a foreign principal” is any person who acts as an agent, representative, employee, or otherwise acts at the order, request, or under the direction or control of a foreign principal and (1) engages within the United States in political activities; (2) acts within the United States as a public relations counsel, publicity agent, information service employee, or political consultant; (3) solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value within the United States; or (4) represents within the United States the interests of a foreign principal before U.S. Government officials or agencies. SB368 is similar, except that it substitutes the State of Georgia and its related officials instead of the entirety of the United States.
Yet, discussed in more detail below, some key differences exist within the definitions here, specifically that of “political activities.”
Identical registration and reporting timeframes. From the plain language of the legislation, FARA and SB368 share identical registration and reporting time periods. Registration is required within ten days of engaging as an agent on behalf of a foreign principal. This registration process requires an extensive disclosure of information about the registrant, including the registrant’s name and addresses, identification of the individual’s nationality (if applicable), or for an organization working on behalf of the principal, a list of all individuals who will work on the foreign principal’s account. It also requires a statement describing the business and nature of work, details about the ownership and control of the foreign principal, and the amount of contributions, income, money, or things of value that the registrant has received within the past 60 days from the foreign principal.
After registration, the registrant is subject to regular reporting (every 6 months) disclosing various activities and payments made on behalf of the foreign principal to the foreign agent.
Despite these nearly identical requirements, there is no indication that registration under FARA will exclude a registrant from dual registration under SB368.
Major Differences Between SB368 and FARA
While the key definitions of foreign agent and principal are almost identical, several key differences exist between FARA and SB368, particularly when it comes to the practical applications of the rules.
Affirmative disclosure. SB368 requires affirmative disclosure of a foreign principal whenever meeting with an official or employee of an agency, Executive, or Legislative branch. No further clarification exists in the legislation which would describe how this affirmative disclosure would be met, and FARA does not have any similar provision. If this legislation is signed, the practical impact will be that those conducting campaigns on behalf of a foreign principal that either target Georgia – or are simply nationwide campaigns – may have to comply with a new, redundant set of registration and reporting requirements.
Lack of registration exemptions. One of the most popular, and sometimes controversial, FARA exemptions is the Lobbying Disclosure Act (LDA) exemption. This exemption provides that foreign principals and agents engaged in bona fide lobbying activities and are not representing a foreign political party or government, are not required to register under FARA if they register under the LDA. LDA registration and reporting is often preferable for many entities, when applicable, because the reporting requirements are less onerous than FARA’s.
Another very common FARA exemption is the commercial exemption, which provides an exemption for activities that further the “bona fide trade or commerce” of a foreign principal. No similar exemptions exist under SB368. As a result, many more individuals and entities could be required to register under this law than under FARA currently stands.
No informational material requirements. FARA requires that any materials distributed by a foreign agent, aka “informational materials,” must have a disclaimer identifying the foreign principal as well as the requirement of submission of such materials to the Department of Justice within forty-eight hours of distribution. SB368 offers no similar provision, meaning that registrants under the Georgia law need not file similar materials disseminated on behalf of a foreign agent as under FARA.
No breakdown of what constitutes “political activities.” FARA has a myriad of Advisory Opinions regarding what does and does not fall into the classification of “political activities.” While SB368 mentions “political activities” as a registration trigger, it does not define what constitutes a political activity, nor is there a suggestion that the body of FARA Advisory Opinions will be instructive to registration under SB368. This may mean that SB368 will require far more individuals and entities to register than what FARA currently does, given the long history of registration exemptions under that statute.
Conclusion
While the FARA statute is at times frustratingly vague, FARA provides additional statutory definitions, and the FARA office at the Department of Justice provides Advisory Opinions upon request. Together, these can serve as guide to the regulated community and for practitioners helping their clients comply with the burdensome registration and reporting requirements. Despite the intent of SB368 to mirror the transparency goals of FARA –shown by its copying of several definitions from the federal statute — SB368 uses extremely broad language and lacks key exemptions which provide flexibility for foreign entities, organizations, individuals, and those working on behalf of these to operate. If signed by Governor Kemp, practitioners and regulated entities alike will be required to work diligently with Georgia state regulators to be comply with legislators’ intended application of the law.
