Feb 20, 2022 - Politics & Policy

Nonprofits sound alarm on DOJ foreign agent rule

Illustration of an anvil hanging over a pile of cash

Illustration: Brendan Lynch/Axios

Some of the nation's most prominent nonprofit and advocacy groups tell the Justice Department they could be branded "foreign agents" unless DOJ changes its approach to the Foreign Agents Registration Act (FARA).

The big picture: When the Koch network's Americans for Prosperity goes in on a joint statement with the Natural Resources Defense Council and the American Civil Liberties Union it's probably a five-alarm fire.

Why it matters: Foreign governments do provide funding to scores of prominent U.S. nonprofits, some of which have been scrutinized for influence exerted by those foreign patrons.

  • But a number are warning DOJ that overzealous enforcement of foreign agent laws could chill free speech and politicize transparency laws.

Driving the news: The warnings came in numerous comments submitted to DOJ last week as it considers changes to FARA regulations.

How we got here: Think-tank funding, in particular, has long been seen as a tool for foreign governments to surreptitiously influence U.S. policy and public opinion.

  • "More than a dozen prominent Washington research groups have received tens of millions of dollars from foreign governments in recent years while pushing United States government officials to adopt policies that often reflect the donors’ priorities," the New York Times reported in 2014.
  • In early 2020, DOJ released an advisory opinion spelling out conditions under which U.S. nonprofits that receive foreign government funding must register as foreign agents.
  • The National Wildlife Federation was forced to register as a result, due to a grant it received from the Norwegian government.
  • While the opinion simply applied existing law, FARA compliance experts saw it as a turning point in DOJ's approach to foreign-funded nonprofits in the U.S.

What's happening: DOJ is now soliciting comments from stakeholders and the public on new FARA regulations, and nonprofits and their representatives are warning of dire consequences for American charities and advocacy groups.

  • At least eight comments highlighted FARA's applicability to nonprofits and asked DOJ to modify or clarify its approach.
  • "Given the number and breadth of comments received by nonprofits and think tanks, I would anticipate the department feeling compelled to respond to the issues raised," Brandon Van Grack, a partner at Morrison Foerster and the former head of DOJ's FARA unit, told Axios in an interview.

What they're saying: Nonprofits "can be unwittingly caught up in FARA’s broad regulatory regime," warned the Council on Foundations in its DOJ comment.

  • Echoing other groups, the Council said FARA registration can "create a stigma of foreign control, burden protected rights under the First Amendment, and significantly impact their mission and ability to help others."
  • AFP, NRDC and the ACLU joined 11 other groups in warning that "FARA’s overbreadth and vagueness can undermine and chill First Amendment rights to speech and association."
  • "Being labeled as a foreign agent under FARA would put our neutrality and independence in jeopardy," wrote the International Foundation for Electoral Systems.
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