Schumer, McCaskill Introduce Legislation to Close Foreign Lobbying Loopholes

Press Release

Obama-Backed Bill Would Require All Lobbyists Representing Foreign Clients To Register with the Justice Department, Eliminating Exemption Carved Out By Lobbying Disclosure Act

U.S. Senators Charles E. Schumer (D-NY) and Claire McCaskill (D-MO) today unveiled legislation that would close legal loopholes allowing U.S. lobbyists to influence government officials on behalf of foreign clients without having to disclose their activities. The issue surfaced last month in the U.S. presidential campaign, as reports spotlighted a trend of lobbying firms performing work for a range of foreign entities without ever registering with the Department of Justice, as is required in most circumstances.

Sen. Barack Obama is an original co-sponsor of the Schumer-McCaskill measure, which was filed today.

"The public has a right to know when our government is being lobbied by foreign interests," Schumer said. "Right now, too many lobbyists are able to operate in the shadows because of loopholes in the law. Our bill would seal the cracks in the law. It may not be possible to ban these types of activities, but they should at least be transparent."

"We need to close these loopholes in the law, and we need to do it soon, to assure that there is full transparency in who is lobbying Congress on behalf of foreign entities. These clients, which could include dictators, should be the last ones who are hidden from public view," McCaskill said.

The intent of the Foreign Agents Registration Act (FARA), passed by Congress in 1938, is to bring transparency to the work of lobbyists representing foreign clients by requiring the lobbyists to register with the Department of Justice. But lobbyists registered under another law, the Lobbying Disclosure Act (LDA), are exempted from having to also register under FARA if their work is on behalf of a foreign individual or company instead of a foreign government. This is problematic because the LDA only requires disclosure of clients when a lobbyist's representation amounts to over 20 percent of his or her total lobbying contacts. Because of that threshold, many foreign entities and individuals can attempt to influence U.S. policy without being disclosed, running contrary to the purpose of FARA. The Schumer-McCaskill legislation would amend FARA to requiring lobbyists representing foreign clients of any kind to register, not just lobbyists who represent a foreign government.

Additionally, the bill would require that any lobbying contacts with U.S. officials on behalf of foreign clients be disclosed even when they occur outside of the United States. Currently, the law only covers contacts that occur "within the United States."

In recent weeks, reports of lobbyist connections have swirled around the presidential campaign. Most have centered on Davis-Manafort, a Virginia-based firm whose executives now occupy top positions within Sen. John McCain's campaign. In the past, the firm has performed work on behalf of a Ukraine politician, even meeting with the U.S. ambassador in that country on the client's behalf. The work was never disclosed, however, because the meeting happened on foreign soil, in Kiev. The New York Times reported today that in 2005, the Bush administration complained that the firm's work was "undercutting American foreign policy in the Ukraine."

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