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Proposed Ban on Contacts with Agents of Foreign Governments
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FOIA Number: 2011-0582-F
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This is not a textual record. This is used as an
administrative marker by the William J. Clinton
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Clinton Presidential Records
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Proposed Ban on Contacts with Agents of Foreign Governments
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RM
THE WHITE HOUSE
WASHINGTON
20 July 1995
MEMORANDUM FOR LEON PANETTA
ERSKINE BOWLES
CC:
MICHAEL WALDMAN
GEORGE STEPHANOPOULOS
FROM:
Harold Ickes
AMUS
Jennifer O'Connor
5016
SUBJECT:
Agency positions on a proposed ban on contacts with agents of
foreign governments
We requested the views of several key agencies and White House staff members regarding a
proposal to issue an Executive Order to ban all Executive Branch officials from contact with
registered agents of foreign governments when the contact is for the purpose of influencing
the U.S. government on behalf of foreign governments. The proposal would ban contacts
with corporations that are wholly or majority owned by foreign governments as well. There
would be exceptions for lawyers in litigation or administrative proceedings (including
informal proceedings). The Domestic Policy Council presented some positive views which
are outlined below, beginning on page two. The agencies (State, USTR, DOJ, Treasury,
Commerce) and the NSC raised a variety of concerns, which we have also outlined below, see
page two. Mickey Kantor does not agree with the proposal and instead offered three different
proposals for how to accomplish the same goals; these alternatives are outlined below,
beginning on page six, and include a) maintaining a public record of lobbyists who contact
USTR on behalf of foreign entities; b) establishing an Administration task force to consider
controlling contacts with agents for foreign entities; or c) fully enforce the Foreign Agents
Regulation Act.
Attached as an appendix are the memoranda from: USTR
Michael Waldman
NSC
State Department
Commerce Department
Justice Department
Bill Curry was asked for his views but did not submit anything.
-2-
The arguments in favor of the ban are that it would:
1)
Fix a serious problem. The U.S. is the only country in which government officials
routinely "switch sides" immediately upon leaving office, using their knowledge and
contacts to lobby for our competitors. Japan, in particular, spends significant money
to bend our trade policy, and it has had a real impact in previous administrations.
(DPC)
2)
Target Republicans. The Dole campaign will include many foreign lobbyists, and
general Republican indifference to this issue may mean that "GOP government for the
special interests" will be a winning wedge message next year. The Administration
dealt with its own "revolving door" issue through the President's ethics pledge. We
could now target GOP ex-officials who continue to act as foreign lobbyists. The
President can name names, pick fights such as Dole did with Hollywood, while
retaining the support of the press. (DPC)
3)
Appeal to Perot voters.
Arguments made by the agencies against the proposed ban are that it would:
1)
Produce a devastating reciprocal impact. In reaction, other countries may very well
decide to ban their own employees from meeting with U.S. attorneys and consultants
representing the federal government or U.S. companies. State, Commerce, USTR, and
other agencies occasionally hire attorneys and consultants abroad to discuss foreign
law issues. DOD hires foreign nationals to undertake a variety of tasks in foreign
countries to enable it to operate effectively overseas. Examples include facilitation of
supply procurement and real estate concerns. State hires foreign nationals for similar
purposes, including our counter-drug program and negotiations on technical issues.
(USTR, State).
2)
Fail to achieve what it promises. Such an Executive Order could fail to achieve what
it promises, inviting criticism. The overwhelming majority of foreign lobbying is done
by representatives of foreign firms, but the Executive Order will only cover
representatives of foreign governments and corporations substantially owned by foreign
governments. In addition to failing to stop a significant portion of foreign lobbying,
exempting foreign firms from the ban could appear inconsistent with our goals; indeed,
the press would immediately look at who lobbies for corporations, to see who benefits
from our "loophole," and would likely find many of the administration's friends. A
proposal for fixing this shortcoming would be to limit the ban to one agency (USTR)
and ban contacts by foreign firms as well as governments. Limiting the scope of the
ban but closing the loopholes will better safeguard us from criticism.
In addition, because most contacts are legal in nature, most foreign lobbying will not
be eliminated by the ban due to its litigation and administrative proceedings
-3-
exemption. (Treasury, USTR).
3)
Create enforcement and implementation problems. The ban would create a burden for
Executive Branch employees to identify every person with whom they speak on a
policy matter. Each official would have to determine whether the lobbyist is
registered and for what policy matter his/her registration applies. Also, it encourages
lobbyists not to identify themselves to government officials, because the burden is on
the official, not the lobbyist. The ban could also create embarrassment and unnecessary
litigation because it might apply to even seemingly casual contact at social functions
(DOJ).
4)
Negatively impact litigation involving foreign governments. Whereas Treasury and
USTR believe that the litigation exemption may be so broad as to negate the intent of
a "ban," Justice and State believe the exemption may be too narrow. According to
State, the exemption extends to attorneys representing foreign principals before "any
court of law," but only insofar as they abstain from informal attempts to "influence" or
"persuade" agency personnel outside of "established agency proceedings." Attorneys
representing foreign governments, sometimes request that the U.S. enter a lawsuit on
behalf of a government which is not a party to the suit. Foreign attorneys make such
requests because the potential lawsuits may impact their client's foreign policy. State
believes such requests are appropriate but they are concerned because they believe
these requests may fall outside of the exemption. (State, Treasury).
Additionally, the proposed litigation exemption, according to State, would create
perverse incentives. Foreign governments that wished to employ U.S. counsel to assist
in the resolution of disputes involving the U.S government might be encouraged by the
proposed restriction to file suit rather than engage in discussions to settle matters
amicably. (State, Treasury).
The Executive Order could probably be drafted to eliminate the uncertainty and to
include informal legal proceedings like settlement discussions.
5)
Send the wrong signal. Such an Executive Order could send the message that the
Administration does not have confidence in its appointees to hear arguments put
forward by representatives hired by foreign governments. However, the President's
speech announcing the proposal can probably eliminate this potential pitfall (Treasury).
6)
Hurt our policy interests. There are a variety of policy reasons why it would be in our
interest to allow foreign governments to use U.S. representatives. Mexico, for
example, needed counsel that knew U.S. law and process to work out the Exchange
Stabilization Fund agreements. (Treasury).
In addition, the Executive Order would shut down legitimate trade and export
promotion activities that currently provide jobs and improve the economies of the U.S.
and other countries. (Commerce).
Moreover, negotiations on commercial satellites, fisheries and the use of national and
international waters would be severely restricted by the ban. Export and import
licensing and enforcement would be extremely difficult. Telecommunications
discussions with other countries would be diminished and advisory councils could be
effectively eliminated or become purposeless. (Commerce).
7)
Hurt U.S. firms. Because the entire firm of any registered agent would be covered by
the Executive Order, entire law and public relations firms may be precluded from
broad scale representation. (Commerce, USTR).
8)
Hurt small countries. The Executive Order would create a strong bias against smaller
countries which cannot afford maintenance of large U.S. embassy operations, yet who
need to monitor U.S. Executive Branch and legislative activity. They would have to
hire more embassy staff just to be able to collect public information. (Commerce,
DOJ).
9)
Rob us of the ability to impart and receive valuable information. The Executive
Branch could lose basic sources of commercial information from corporate, legal and
trade representatives of all countries. Relying upon diplomatic channels solely for
commercial intelligence would strain current State Department resources and embassy
staff, and isn't a practical source of the broad range of information required for
intelligent commercial policy formulation. (State).
For example, the Antitrust Division at the Department of Justice regularly makes
policy determinations based upon communications with U.S. representatives of foreign
governments. For instance, in recent negotiations over international uranium sales,
representatives of foreign governments met with Justice officials to provide
information, unavailable from other sources, about the international market and the
role in the market of various governments and governmental entities. Similarly,
representatives of foreign governments frequently play pivotal roles in negotiations
over trade regulation; the governments whom they represent often prefer for strategic
reasons to proceed through American representatives. (DOJ).
Moreover, U.S. government officials sometimes encourage foreign governments to
include in delegations private individuals who possess special or expert knowledge.
Such agents are often in the best position to articulate the views and concerns of their
foreign government principals in complex, technical and quasi-commercial matters and
to present, in turn, the U.S. response in an informed coherent matter. Examples
include discussions: of various matters with agents representing Haiti; of loan
guarantees and trade issues with Israel; of debt restructuring with debtor countries; of
visa issues with Nigeria; of telecommunications issues with Central American
countries; and resolution of claims with Nicaragua. The proposed bar would place
-5-
U.S. government officials in the awkward and untenable position of being permitted to
communicate with certain members of foreign government delegations but not with
others. (State, Treasury).
Some foreign governments use private individuals in the exploration of extremely
sensitive foreign policy issues. For example, private intermediaries have been used in
connection with Middle East negotiations and in connection with discussions about the
establishment of diplomatic relations with Angola and the Angolan peace process.
Private individuals have also been used by the IRA and have been instrumental in our
negotiations over Northern Ireland. (Treasury, Commerce, USTR, State, DOJ).
10)
Create problems regarding inquiries from the Hill. The proposed bar would undermine
agencies' ability to respond to inquiries from the Hill. If foreign government agents
succeed in prompting members of Congress to pressure any agency to take a particular
stance on an issue, the agency would be unable to meet with such agents. (State,
DOJ).
11)
Cut off dialogue with foreign associations and think tanks. Many foreign
governments, e.g. Brazil, China, and Korea, have U.S. based commercial and financial
associations that receive government funding. The U.S. government addresses these
groups and has them report to us on policy developments. Dialogue with these groups
would be dramatically reduced by the proposed ban. The ban could also disrupt
communications with well-connected foreign nationals and U.S. citizens in think-tanks,
academe, government-connected institutions or corporations, and other private entities.
(Treasury, State).
While the Departments raised this concern, it seems that we would neutralize it so
long as the Executive Order referred only to registered foreign agents. Few of these
entities or individuals register under FARA, so these concerns may actually be
misplaced.
12)
Call attention to foreign lobbyists now employed by or associated with the Clinton
administration. Unilateral action on foreign lobbying would call attention to
individuals who were foreign lobbyists before entering government service with our
administration (Ron Brown, Sandy Berger, Pat Griffin, Charlene Barshevsky, etc.) or
who are close to the administration (DNC Treasurer Scott Pasterick, Vernon Jordan,
etc.). It would also raise questions about why -- if foreign lobbying is so bad per se
that it must be banned we are willing to accept campaign contributions from those
same foreign lobbyists. (DPC)
13)
Make us look silly. In light of the Presidents' agreement with Speaker Gingrich to set
up a "base-closing" style commission on lobbying reform, this proposal could look
silly. Also, if we do not play the press correctly, the proposal could be interpreted as
xenophobic by the elite press, and that message could ruin the positive message we
-6-
want to get out on this issue. (DPC)
Alternatives to the proposed ban would be to:
1)
Maintain a public record of lobbyists who contact USTR on behalf of foreign entities.
Under this proposal, USTR employees would be required to keep a record of lobbyists
who contact USTR on behalf of foreign governments and foreign companies. This
option could cover just oral contracts or oral and written contracts. USTR employees
would be required to record the name and affiliation of the agent, the foreign entity
represented, and the subject matter of the each contact. USTR would make this
information available to the public.
This option would increase transparency and provide the public with additional
information on the activities of foreign agents. Given the public's interest in the extent
of lobbying by foreign agents on behalf of foreign entities, the Administration may
want to consider expanding this policy to cover all agencies that are contacted by
foreign agents. (USTR)
2)
Create an Administration task force to consider controlling contacts with agents for
foreign governments. Under this proposal, the Administration would create a task
force to consider ways to control contacts between Executive Branch officials and
agents for foreign governments and entities substantially controlled by foreign
governments.
This option is designed to address public concerns about the relatively unfettered
access that foreign lobbyists for foreign governments have to Executive Branch
officials. In addition to considering ways to control contacts between Administration
officials and foreign agents, the task force could examine campaign contributions made
by foreign agents. Although U.S. law prohibits foreign entities from contributing to
U.S. campaigns, lawyers and lobbyists for foreign entities are not restricted from
raising and distributing funds to candidates. (USTR)
3)
Fully enforce the Foreign Agents Registration Act (FARA). Although FARA requires
individuals who represent "foreign principles" to register with the Justice Department
when they engage in certain lobbying activities, FARA is not viewed as an effective
statute for regulating foreign agents. In general, many foreign lobbyists do not
register, and this law is not enforced.
Under this proposal, the President would direct the Justice Department to devote
additional resources to ensure that FARA filings are completed in full accord with
FARA requirements. Periodic audits, with the possible aid of the FBI, would send an
immediate message that neither partial nor total non-compliance would be permitted.
A major problem with those applications which do get filled out is the cursory way in
which information is submitted. One recent registrant, asked to identify his activities
-7- -
and services, answered "met with United States Government policy-makers (both
Legislative and Executive)" without specifying which officials he met with or the
nature of those meetings. This type of answer in not unusual.
Consequently, the Administration, consistent with its authority under FARA, should
immediately insist that all registrants provide full information on each contact with
federal officials. Finally, the Administration should make all FARA filings available
to the public over the Internet, an easy step given that FARA filings are already
computerized. (USTR)
ORIGINAL MEMOS
THE UNITED STATES TRADE REPRESENTATIVE
Executive Office of the President
Washington, D.C. 20506
19 July 1995
MEMORANDUM FOR HAROLD ICKES
FROM:
MICHAEL
SUBJECT: Foreign Lobbyists -- Options
This memorandum presents options for regulating the
activities of foreign agents who lobby the executive branch on
behalf of foreign governments and foreign companies. These
options are designed to support the President's strong commitment
to ensuring that his administration maintains the highest ethical
standards and increases the public's confidence in government
activities. There is no doubt that public anger about the
revolving door and the influence of foreign agents is close to
the surface and easily ignited. Americans are justifiably angry
when they read that one-third of all former principal trade
officials at USTR later became registered foreign agents, that
one-half of all USTRs later lobbied on behalf of foreign
businesses, and that four USTRs subsequently were hired to work
for Japanese corporations.
One attempt to address these concerns is the Foreign Agents
Registration Act (FARA) (22 U.S.C. §§ 611-621). FARA was enacted
in 1938 largely as a result of the recommendations of a special
Congressional committee that had investigated un-American
activities and discovered that the Nazis had established an
extensive underground propaganda apparatus in the United States
using American firms and citizens. FARA has been amended several
times, most significantly in 1966 as a result of Senator J.
William Fulbright's study of "Non-Diplomatic Activities of
Representatives of Foreign Governments." Senator Fulbright
determined that many foreign governments had retained U.S.
lawyers and public relations consultants to influence executive
and legislative branch decision-making outside normal diplomatic
channels. The 1966 amendments, which still form the core of the
present Act, shifted the focus of the Act by placing primary
emphasis on the protection of the integrity of the U.S.
Government's decision-making process and the identification of
the sources of foreign political propaganda.
Although the FARA requires individuals who represent
"foreign principals" to register with the Justice Department when
they engage in certain lobbying activities, FARA is not viewed as
a particularly effective statute for regulating the activities of
foreign agents. Critics contend that the registration and
disclosure process is not adequately enforced nor adequately
accessible to the public.
Consequently, I encourage you to consider the following
options designed to deal more effectively with the revolving door
and the influence of foreign agents:
OPTION 1:
Maintain a Public Record of Lobbyists Who Contact
USTR on Behalf of Foreign Entities.
Under this option, USTR employees would be required to keep
a record of lobbyists who contact USTR on behalf of foreign
governments and foreign companies. (This option could cover just
oral contacts or both oral and written contacts.) USTR employees
would be required to record the name and affiliation of the
agent, the foreign entity represented, and the subject matter of
each contact. (See attached draft USTR Foreign Agent Contact
Form.) USTR would make this information available to the public
in our public reading room.
This option would increase transparency and provide the
public with additional information on the activities of foreign
agents. Given the public's interest in the extent of lobbying by
foreign agents on behalf of foreign entities, I encourage you to
consider whether the Administration should expand this policy to
cover all agencies that are contacted by foreign agents.
OPTION 2:
Create an Administration Task Force to Consider
Controlling Contacts with Foreign Agents for
Foreign Governments.
Under this option, the Administration would create a task
force to consider ways to control contacts between executive
branch officials and agents for foreign governments and entities
substantially controlled by foreign governments. This option is
designed to address public concerns about the relatively
unfettered access that foreign lobbyists for foreign governments
have to executive branch officials.
The President has the power to control contacts between
executive branch officials and foreign agents. Not only does
Article II of the Constitution expressly grant the President
general administrative control of those executing the laws, but
Congress has expressly granted the President broad statutory
authority to oversee and direct the operations of the executive
branch. Most significantly in this case, Congress has authorized
the President "to prescribe regulations for the conduct of
employees in the executive branch." 5 U.S.C. § 7301.
In addition to considering ways to control contacts between
Administration officials and foreign agents, the task force could
examine campaign contributions made by foreign agents. Although
U.S. law prohibits foreign entities from contributing to U.S.
campaigns, lawyers and lobbyists for foreign entities are not
restricted from raising and distributing funds to candidates.
OPTION 3:
Fully Enforce the Foreign Agents Registration Act.
Under this option, the President would direct DOJ to devote
additional resources to ensure that FARA filings are completed in
full accordance with FARA's requirements. Periodic audits,
perhaps with the assistance of agents detailed from the FBI,
would send an immediate message that partial compliance will not
be tolerated. Currently, foreign agents often provide only
cursory information to detailed questions under FARA. For
example, FARA requires foreign agents to identify each foreign
principal represented and to "describe in full detail your
activities and services.' One recent registrant, however, stated
merely that it had "met with United States Government policy-
makers (both legislative and executive) " without specifying which
officials were contacted or the nature of the contacts. This
registrant's incomplete submission is not unusual. Consequently,
in accordance with FARA, the Administration should immediately
insist that all registrants provide full information on each
contact with federal officials. In addition, the Administration
should make all FARA filings available on the INTERNET to give
the public more access to the activities of foreign agents. This
would be a relatively easy step, given that FARA filings already
are computerized.
Let's discuss these options at your convenience.
33 Method of Contact:
Telephone Call
Meeting
4. Name and address of the foreign agent AND his/her firm ororganization.
5. Government or company the agent represents:
6. Subject matter of contact:
Instructions to USTR Employees:
Obtain from the individual the information listed above. Complete the form and send it to the
"Foreign Agent" mail bin in Room 122 on the same day as the contact. The forms will then be
delivered to the Reading Room on the same day.
THE WHITE HOUSE
WASHINGTON
July 18, 1995
MEMORANDUM FOR HAROLD ICKES
FROM:
MICHAEL WALDMAN
SUBJECT:
FOREIGN LOBBYING
Here are my thoughts. I'm of mixed minds about this. Political reform is a strong
concern for Perot voters and independents, and we need to take some actions to break through
to them. However, I am ambivalent about the specific proposal of "banning contacts with
foreign lobbyists."
The undue influence of lobbyists and money, and the influence of foreign lobbying
in particular, are legitimate issues that are important to us politically. The Dole
campaign will be thick with foreign lobbyists, and the general Republican tone-deafedness on
these issues may mean that "GOP government for the special interests" will be a winning
wedge next year. We are, in fact, the only country I know of in which government officials
routinely "switch sides" immediately upon leaving office, using their knowledge and contacts
to lobby for our competitors. Japan, in particular, truly does spend a lot of money to bend
our trade policy, and it has had a real impact (in previous administrations!). We have largely
taken care of this problem for our own officials through the President's executive order.
We should take no action on foreign lobbying until we have reached clearer
resolution on the Clinton-Gingrich political reform commission. We will look very silly if
we take a unilateral step on this issue (or other political reform issues) without moving
forward to implement our public agreement to set up a "base-closing" style commission on
reform. In addition, we should give a speech or radio address on lobby reform before Bob
Dole gets credit for it at the end of next week. This caveat is particularly true when it comes
to foreign lobbying. Elites (editorialists, journalists etc.) support political reform, but think
that attacks on foreign lobbyists are xenophobic. This is not an elite message in any event,
but we won't get our message heard at all if we do not at least soften up the elites and press
who will translate our actions.
Then, if we want to act unilaterally on foreign lobbying, we must be serious about
our own house. This issue could easily blow up in our faces. As you know, we have many
former and current foreign lobbyists in our administration and political family. If we go as
far as banning contacts with foreign lobbyists which says, in effect, that being a foreign
agent is per se a bad thing to be then we certainly can't take their campaign contributions,
or give them leadership roles in our campaign.
If we conclude that a sharp unilateral action is necessary, we should limit it and
make it real. Rather than banning lobbying by foreign governments -- which leaves only
90% of foreign lobbyists free to contact us we should limit it to one agency (USTR) and
ban contacts by foreign firms as well as governments. In other words, limit the scope, but
avoid the loopholes. If we cannot do this, it may just be that this is an issue that is not
susceptible to a clean, sharp unilateral action.
If we do want to take on the foreign lobbying issue, we should take on the real
foreign lobbying problem. I actually do think this is a legitimate issue and a genuine
concern. We dealt with this revolving door issue for our own administration through the
President's ethics pledge. Now we should target GOP ex-officials, who continue to act as
foreign lobbyists, by proposing that former officials be banned from lobbying Congress or the
White House on behalf of foreign firms and governments. (This would, in effect, codify our
executive order.) The President can name names, pick fights a la Dole and Hollywood. And
we'd have the support of the press.
***
A comment on the arguments made against taking action on foreign lobbying.
Most of the arguments made are fallacious, in my view. I don't buy the idea that there is
vital information we cannot get other than through U.S. lobbyists, that there's no more
distinction between U.S. firms and foreign firms any more (really? I don't think that's our
policy!), and other internationalist arguments that have been made. I think that reciprocity
concerns are potentially legitimate, but frankly I have not seem them made all that
compellingly.
NOTE: Bruce Reed is out on paternity leave, but he and I discussed this, and I believe
we are in agreement. I would say that Bruce believes more strongly than I do that this is at
least an issue with real appeal to Perot voters, and that we should find a way to do
something.
5151
THE WHITE HOUSE
WASHINGTON
July 6, 1995
INFORMATION
MEMORANDUM FOR HAROLD ICKES
FROM:
ANTHONY LAKE
SUBJECT:
Foreign Lobbying
You asked what impact there would be on the NSC's equities if the
President were to prohibit Executive Branch employees from
meeting with "foreign agents" of foreign governments. We are
commenting only on the foreign policy implications, not
administrative or enforcement issues presented by the proposal.
We have consulted with the State and Defense Departments, each of
which believes that such a prohibition would have serious
negative implications for the performance of their functions.
1. The prohibition could interfere with our ability to impart
and receive information in the most efficient manner. It would
disproportionately disadvantage small governments.
-- Such agents are often in the best position to articulate the
views and concerns of their foreign government principals in
complex, technical and quasi-commercial matters and to present,
in turn, the U.S. response in an informed coherent matter. This
is particularly the case when dealing with smaller countries.
Some examples provided by the State Department include the
discussion of various matters with agents representing Haiti; of
loan guarantees and trade issues with Israel; of debt
restructuring with debtor countries; of visa issues with Nigeria;
of telecommunications issues with Central American countries; and
resolution of claims issues with Nicaragua. The State Department
sometimes encourages foreign governments to include private
individuals on their delegations when specialized knowledge is
required (e.g., bankers, for example, in a financial
negotiation.)
Some foreign governments use private individuals in the
exploration of extremely sensitive foreign policy issues. The
State Department has provided as examples the use of private
intermediaries in connection with the Middle East negotiations
and in connection with discussions about the establishment of
2
diplomatic relations with Angola and the Angolan peace process.
Private individuals have also been used by the IRA.
-- The FARA exemptions would not, in State's view, protect the
range of interaction it has with lawyers here or abroad on cases
in litigation.
2. Both State and Defense also believe such a ban would have
adverse impacts on U.S. interests overseas, if applied
reciprocally. (We have not canvassed other agencies, like
Commerce and AID, which State suggests also use agents overseas.)
-- Defense points out that the military hires foreign nationals
to undertake a variety of tasks in foreign countries/ports to
enable DOD to operate effectively overseas. Examples include
facilitation of supply procurements and real estate matters.
-- State points out that there is no guarantee that reciprocal
action, if taken, will be entirely symmetrical. (State General
Counsel was aware of no country that currently restricts such
activities, although State did not do a comprehensive review.)
Depending upon what use of agents was prohibited by a foreign
government, State indicates it could interfere with our counter-
drug program, which uses contractors to deal directly with
foreign government officials. State also indicates it frequently
includes private experts in our negotiating teams to address
technical issues.
Attachment
Tab A State Department Views
THE LEGAL ADVISER
DEPARTMENT OF STATE
WASHINGTON
June 30, 1995
VIA FAX
MEMORANDUM
TO:
Mr. Alan J. Kreczko
Special Assistant to the President and
Legal Adviser to the National Security Council
FROM:
Conrad K. Harper
SUBJECT:
Proposed Bar on Executive Branch Communications
with Foreign Government Agents
You have asked for our comments on a proposal to
prohibit representatives of the USG from communicating with
agents of foreign governments (designated as such in accordance
with the Foreign Agents Registration Act (FARA)) In our view,
the proposed Executive Order raises a number of significant
questions and concerns, and, if promulgated, would likely
substantially impair the ability of the USG to receive and
impart information in pursuance of its foreign policy
objectives. We believe that these concerns are of sufficient
magnitude as to counsel extreme caution and much more careful
study before any action is taken on the proposal.
1. U.S. Litigation Involving Foreign Governments. State
Department lawyers frequently interact with attorneys
representing foreign governments with regard to a variety of
litigation matters in the U.S. courts. We are concerned that
FARA's section 3 (g) exemption may not be broad enough to permit
some of these communications should the proposed bar be
implemented. The exemption extends to attorneys representing
foreign principals before "any court of law," but only insofar
as they abstain from informal attempts to "influence" or
"persuade" agency personnel outside of "established agency
proceedings." 22 U.S.C. § 613(g). Applicable regulations
specifically designate attempts to influence the formulation of
foreign policy as prohibited activities outside the course of
agency proceedings. See 28 C.F.R. § 5.306.
The nature and scope of this exemption (which, we presume,
would be incorporated into the proposed bar) raise two
concerns. First, attorneys representing foreign governments
have, in the past, communicated with the Department regarding
lawsuits to which their foreign government principals are not
parties. Such consultations might be intended, for example, to
persuade the USG to exercise its policy discretion to enter a
lawsuit in support of the foreign government's interest.
Representations of this sort are not uncommon, are entirely
appropriate in our view, and are beneficial to the formulation
of U.S. foreign policy, yet they may fall outside the scope of
the FARA exemption -- and could trigger the proposed bar --
because they may not relate to a proceeding before "any court
of law" involving the foreign principal. The consequence of
the proposed bar could thus be Draconian: Foreign governments
would be restricted from employing U.S. counsel to present to
the Department their views concerning U.S. litigation to which
they are not formally a party. Foreign government officials
not trained in U.S. law are obviously in a disadvantageous
position to assume such responsibilities.
Second, we note that the litigation in which the Department
is involved occasions communications that touch not only on the
specific legal content of the matters at hand, but upon the
foreign policy context in which legal proceedings are
situated. The manner in which legal and foreign policy
considerations are intertwined calls into question the ability
of attorneys representing foreign governments in such
situations to obtain a waiver. This, in turn, raises the
question of how foreign governments could obtain legal
representation in matters of a "mixed" nature if the proposed
ban were in effect. (We note, generally, that the FARA
Registration Unit at the Department of Justice has informed us
that its practice is to read FARA exemptions narrowly;
therefore, U.S. counsel may not be given the benefit of the
doubt in the interpretation of the section 3 (g) exemption.)
No matter the nature of the legal issue, the proposed bar
constitutes a significant obstacle to foreign governments which
seek the counsel of attorneys with whom they have established
relationships. The proposed restriction would preclude all
attorneys and law firms registered as foreign government agents
for any reason from acting as counsel in any litigation
matter. As we understand the proposal, any single
communication giving rise to a registration obligation under
FARA would prohibit registered parties from engaging in conduct
-- 2 --
that would otherwise be exempted under section 3(g). (One need
only page through the Justice Department's published
compilation of FARA filings to appreciate these consequences.
DOJ's 1988-1991 FARA registration compilation spans more than
1,100 pages and 180 countries.) We note, in this regard, one
of the flaws of the proposed bar: it operates to prevent
communications with the Executive Branch even where there is no
relationship between the communication in question and the
activity giving rise to FARA registration. Thus, an agent may
be registered under FARA for reasons entirely unrelated to the
otherwise permissible nature of the communications he wishes to
have with the Department, but the agent's status as a FARA
registrant would nevertheless prevent such discussions from
taking place.
FARA's litigation exemption would also create perverse
incentives if the bar on foreign agent communications were
implemented. Foreign governments that wished to employ U.S.
counsel to assist in the resolution of disputes involving the
USG might be encouraged by the proposed restriction to file
suit rather than engage in discussions to settle matters
amicably. For the bar would prohibit the USG from
communicating with such representatives unless such
communications were in connection with a formal legal
proceeding.
For all these reasons, we find the proposed restriction
troubling. The Office of the Legal Adviser depends upon full,
free, and robust communication with the legal representatives
of foreign governments to carry out its functions and properly
advise Department principals. The proposed bar threatens to
restrict crucial lines of communication between the USG and
foreign governments, as well as the discretion and ability of
foreign governments to employ competent counsel well versed in
their activities.
2. Other Legal and Technical Communications with Foreign
Government Agents. Not infrequently, State Department
officials (both within the Legal Adviser's Office and
policymaking bureaus) also meet with counsel and other
representatives of foreign governments in matters unrelated to
pending litigation. By way of example, the Department has met
or negotiated with agents of:
-
the Aristide government-in-exile to discuss a wide of
range of issues including President Aristide's return
to Haiti (since President Aristide's return, the
-- 3
Department has had discussions with foreign agents
regarding the status of forces in Haiti);
-
the Government of Israel to discuss USG loan
guarantees and trade issues relating to ethanol and
textile imports;
-
the Government of Kuwait to discuss a range of issues
arising from the Iraqi invasion and the Gulf War
including compensation issues and border questions
being considered by the Iraq-Kuwait Border Commission;
-
a number of debtor countries to discuss bilateral and
Paris Club debt restructuring issues;
-
the Philippines and a consortium of Central American
governments to discuss telecommunications issues;
-
the Government of Nicaragua to discuss resolution of
U.S. expropriation claims;
-
Antigua and Barbuda and Panama to discuss refugee
transfers and safe havens;
-
the Government of Chile to discuss extradition
requests;
-
Nigeria to discuss visa issues;
-
the Governments of Jamaica and the Bahamas to consult
regarding drug interdiction;
-
the El Salvadoran government to discuss military
assistance and other issues;
-
Panama to engage in negotiations over the status of
Panama Canal;
-
the Angolan government to discuss the establishment of
diplomatic relations and the Angolan peace process.
The proposal in question would bar these communications,
thereby preventing the USG from consulting with representatives
who are often in the best position to articulate the views and
concerns of their foreign government principals in complex,
technical, and quasi-commercial matters, and from presenting,
in turn, the U.S response in an informed, coherent fashion.
4
Smaller governments with less sophisticated diplomatic or
consular operations are especially prone to rely on agents in
matters requiring special and expert knowledge. Indeed,
prohibiting communications between U.S. officials and foreign
government agents would likely disproportionately disadvantage
small or unsophisticated governments. More than that, a bar on
agent communications in cases where foreign government
officials lack the necessary competence would substantially
impair the Department's ability to obtain the information it
needs to make accurate assessments and formulate policy
effectively.
More developed and less developed countries alike may well
perceive the proposed bar as an inappropriate and unjustified
limitation on their prerogative to select interlocutors.
Foreign governments would not be the only parties to object to
the bar. If its vocal opposition to legislative proposals to
strengthen FARA in recent years is any indication, the U.S. Bar
would undoubtedly object strenuously to the contemplated
restriction.
3. Other Foreign Policy Communications
The ban in question would likely disrupt the Department's
communications with well-connected foreign nationals and U.S.
citizens in think-tanks, academe, government-connected
institutes or corporations, and other private entities. Such
discussions frequently constitute an important "back door"
channel for sensitive foreign policy matters. The United
States may itself send private individuals as Special Envoys to
convey particular messages or perform special missions, such as
was done through Jimmy Carter in Haiti and South Korea. Such
individuals, whether foreign nationals or U.S. citizens, are by
no means "lobbyists" in the traditional sense; yet, because of
their close links to a foreign government or the nature of
their mission, they would very often fall within the
registration requirements of the FARA. Consequently, USG
officials would be prohibited from communicating with them.
4. Communications with Foreign Government Delegations. In
both bilateral and multilateral settings, USG officials have,
in the past, interacted with foreign government delegations
which include private individuals who would likely fall within
FARA's definition of "foreign agent." Indeed, USG officials
sometimes encourage foreign governments to include in
delegations private individuals who possess special or expert
5 --
knowledge (bankers, for example, in the context of negotiations
concerning financial matters). The proposed bar would place
USG officials in the awkward and untenable position of being
permitted to communicate with certain members of foreign
government delegations but not with others.
5. Responding to Foreign Agent Advocacy in the Congress.
The proposed bar would undermine the Department's ability to
respond to inquiries from Capitol Hill. That is, if foreign
government agents succeed in prompting members of Congress to
pressure the Department to take a particular decision or
action, we would be unable to meet with such agents, whether
for informational purposes or for possible resolution of the
matter in question.
6. The Threat of Reciprocal Restrictions. We are
concerned that the proposed ban may prompt foreign governments
to adopt reciprocal restrictions on USG agents. There is no
guarantee that the reciprocal action taken will be entirely
symmetrical; prohibitions imposed by foreign governments might
well be broader and more disruptive than the bar currently
being contemplated. Reciprocal action could affect the
Department's foreign policy functions and USG activities in a
number of ways:
a. More than 1,500 lawsuits against the USG are currently
pending around the world. The Departments of State and
Justice work closely with local counsel in defending
against these lawsuits. A reciprocal restriction on the
activities of foreign government agents could hinder the
activities of our local counsel and thereby impair the
defense of these lawsuits. It would also potentially
obstruct the activities of local counsel hired by the USG
in a range of matters unrelated to litigation (e.g., the
negotiation of contracts, and commercial and real estate
matters.)
b. Reciprocal restrictions would also impair the
Department's ability to utilize contractors abroad in a
variety of functions. Our counter-drug program, for
example, (which operates in Andean countries and other
locations) makes considerable use of contractors who deal
directly with foreign government officials. These
counter-drug efforts would be directly threatened by
reciprocal restrictions on the activities of USG agents.
-- 6 --
C. USG delegations to multilateral conferences and other
international fora often include private sector experts and
even NGO representatives; such individuals bring to our
delegations special and expert knowledge. (Private sector
experts comprise, in fact, the large part of our
delegations to conferences and negotiations dealing with
the development of private international law). Reciprocal
restrictions on foreign government agents might well
prohibit the participation of these private individuals in
such meetings.
d. It is our understanding that AID and DOD employ
contractors in foreign countries on a regular basis. A
reciprocal restriction on foreign agents could undermine
the functions and activities of these contractors. It
might be advisable to inquire if AID, DOD, Commerce, DOE,
DOJ and other agencies have views on the potential
consequences of restrictions on USG contractors and other
agents and representatives operating abroad.
Drafted: L: JChorowsky
x77970 SELFOE 256
Cleared:L:JBorek
} crafr
L:CHarper
7
USTR
BANNING CONTACTS WITH FOREIGN AGENTS -- POTENTIAL PROBLEMS
Scope. Does the policy cover just agents for foreign
governments or agents for foreign companies as well? If the
policy is limited to agents for foreign governments, does it
include agents for foreign companies that are substantially
controlled by foreign governments? If the policy is limited to
agents for foreign governments, some observers will question why
the policy does not apply to agents for foreign companies as
well.
o What activities are covered by the policy? For example, would
the policy extend to formal and informal agency proceedings, such
as dumping and countervailing duty investigations and debt
restructuring? Would the policy cover oral and written
communications? What about requests by foreign agents for public
information?
o Reciprocity. Prohibiting USG employees from meeting with
lobbyists for foreign governments and foreign companies could
lead some foreign governments to prohibit their employees from
meeting with agents representing the USG and U.S. companies.
State, Commerce, USTR, and other agencies occasionally hire
attorneys and consultants abroad to discuss foreign law issues
with foreign governments and U.S. companies regularly retain
foreign counsel to represent their interests before foreign
governments.
O The USG would lose some of its ability to collect valuable
information and influence foreign government and foreign company
decision-making if USG employees cannot meet with foreign agents.
Experienced U.S. attorneys and consultants acting as foreign
agents sometimes prove useful to the USG in cases where the
foreign government or the foreign company does not understand USG
procedures.
What are the Constitutional/free speech ramifications?
Many friends and supporters of the Administration are foreign
agents.
RCV BY:
; 7-7-95 ; 8:53
SECRETARY'S OFFICE-
CHIEF OF STAFF:# 1
A OF comments
UNITED STATES DEPARTMENT OF COMMERCE
of AMERICA
Office of the Secretary
Washington. D.C. 20230
July 6, 1995
MEMORANDUM FOR
Harold Ickes
FROM:
William W. Ginsberg
Chief of Staff
SUBJECT:
Proposed Executive Order
With respect to the proposed executive order discussed with Jennifer O'Connor
this morning, the Commerce Department vigorously opposes such a proposal. It
would cripple all United States trade policy, and would effectively shut down the
overwhelming amount of legitimate trade and export promotion activities that
currently provide jobs and improve the economies of the U.S. and other countries.
Additionally, this order would create a strong bias against small countries of the
world who can't afford maintenance of large U.S. operations. It would affect
legislation and government actions.
negatively countries who have representatives here in the United States monitoring
The proposed executive order would affect issues other than trade. Negotiations
on commercial satellites, fisheries and use of national and international waters
would be severely restricted. Export and import licensing and enforcement would
become extremely difficult. Telecommunications discussions with other countries
purposeless. would be diminished. Advisory councils could be effectively eliminated or become
While the Foreign Agents Registration Act requires individuals to register, certain
ethics regulations attribute an individual's registration to apply to the firm with
whom the individual is associated. In these cases, entire law firms or public
relations firms may find themselves precluded from broad scale representation.
Finally, such an order would cause the executive branch to lose a basic source of
commercial information from corporate, legal and trade representatives of all
countries. Relying upon diplomatic channels solely for commercial intelligence
would strain current State Department resources and embassy staff, and isn't a
practical source of the broad range of information required for intelligent
commercial policy formulation.
Please call me if you would like to discuss this further - 482-4246.
07/06/95
18:56
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TREAS INTL AFFS
002/002
Treasure
Treasury's Concerns Regarding Issuing Executive Order:
--
Contacts with US lawyers representing countries'
commercial bank debt restructurings would be prohibited - cutting
off Treasury from crucial technical information.
Many think tanks have foreign gov't support -- access
to them would be cut.
Various gov'ts have US based commercial and financial
associations -- Brazil, Republic of China, Korea etc.. -- all
2
with gov't funding. We speak to these groups at annual meetings,
06
receive visits, have them report to us on developments. All this
would be cut.
Other Concerns:
0
It would send a negative signal.
:
In essence, it says the President does not have sufficient
confidence in his appointees to permit them to hear arguments put
forward by representatives hired by foreign governments.
-- More graphically, it says Amb. Kantor is qualified to run
trade policy but not capable of being unduly influenced by a
foreign government representative.
O
It would not do what it says, inviting criticism.
--
The necessary exceptions -- such as representing a
government in a countervail case against government subsidies --
will cover the great majority of current contacts.
--
It will not cover contacts with representatives of foreign
firms (other than majority-owned). Most foreign lobbying is done
?
by the representatives of foreign firms.
o
If the necessary exceptions are not made, damage will be
done. For example, Mexico needed counsel that knew US law and
process to work out the Exchange Stabilization Fund agreements.
07/06/95
18:24
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002/006
U.S. Department of Justice
Office of the Deputy Attorney General
Associate Deputy Attorney General
Washington, D.C. 20530
MEMORANDUM
TO:
HAROLD M. ICKES
Assistant to the President
FROM:
SETH P. WAXMAN
SPW
Associate Deputy Attorney General
RE:
Proposed Ban on Contacts with Lobbyists for Foreign Governments
DATE:
July 6, 1995
CC:
HON. ABNER J. MIKVA
I understand the Administration is considering a proposal to issue an Executive
Order banning executive branch officials from contact with lobbyists for foreign
governments. As you know, the Office of Legal Counsel is currently appraising the
constitutionality of such an Executive Order.
Yesterday afternoon, we were asked by White House Counsel to provide you
with a tentative analysis of the potential policy implications of such a ban, particularly
with regard to the interests of the Department of Justice. Because of the short time
we have had to prepare this memorandum - and indeed to consider the policy
implications of a ban on contacts with lobbyists for foreign governments¹ -- the
analysis in this memorandum is only preliminary. Moreover, because neither this
memorandum nor its conclusions have been reviewed by the Attorney General or the
Deputy Attorney General, nor have they otherwise been formally vetted within the
Department, the views expressed herein do not reflect a formal Department position.
Nonetheless, I think it is fair to state that the Department would likely conclude that
the proposed Order presents several serious drawbacks and few advantages. It
would unwisely shield Department and other executive branch officials from access to
1
Prior to this time, we have been concerned only with the legal and constitutional implications of
such an Order.
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2
valuable information, and it likely would raise a host of practical problems in
implementation and enforcement.
I. The proposal
The proposed Executive Order would ban all executive branch officials from
contact with registered agents of foreign governments when the contact is for the
purpose of influencing the U.S. government on behalf of foreign governments. The
Add
order would include corporations that are either wholly-owned or majority-owned by
foreign governments. All direct contacts (meetings, calls, letters, chance encounters)
would be prohibited, but reading newspaper advertisements or hearing public lectures
would presumably be excluded. The definition of registered agents of foreign
governments would largely track the definition of agency in the Foreign Agents
Registration Act (FARA), although it would be limited to foreign governments, while
FARA covers agents of all foreign "principals." There would be exceptions for
lawyers engaged in litigation or administrative proceedings.
II. Discussion
The proposal appears to be designed to guard against overreaching and undue
influence -- or the perception thereof -- by paid lobbyists for foreign governments.
But on even cursory reflection, the proposal seems to have serious drawbacks. The
proposed Order almost certainly would pose myriad problems of implementation and
enforcement. And even assuming that the Order could be clearly implemented and
enforced, it would deprive the Department of Justice contacts that are important to its
orderly and effective operation -- particularly the Antitrust Division. We outline these
inherent problems first, and then discuss some of the enforcement and implementation
problems posed by the proposed Order.
A.
The Proposed Order Would Prevent Access to Potentially Valuable
Sources of Information.
In banning contacts with representatives of foreign governments on policy
matters affecting those governments, the proposed Order would eliminate a regular
source of valuable information for Department policymakers -- particularly in the
Antitrust Division. That division regularly makes policy determinations based upon
communications with U.S. representatives of foreign governments. For example, in
recent negotiations over international uranium sales, representatives of foreign
governments met with Department officials to provide information, unavailable from
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3
other sources, about the international market and the role in the market of various
governments and governmental entities. Similarly, representatives of foreign
governments frequently play pivotal roles in negotiations over trade regulation;
indeed, the governments whom they represent often prefer for strategic reasons to
proceed through American representatives. For these reasons, the Antitrust Division
in particular voices serious concerns about the proposed Executive Order.
Other components in the Department, such as the Criminal and Civil Divisions,
share those concerns, although they would be less affected by the proposed order, so
long as the litigation exception was carefully written to exclude attorneys engaged in
litigation with those Divisions. However, the Criminal Division's Registration Unit in
charge of the Foreign Agents Registration Act has constant contacts with the foreign
agents it registers, and those contacts often touch upon policy matters -- from changes
in legislation to whether a particular agent must register and pay its fees. Divisions
that work with foreign governments on international treaties or joint policing
operations also have some contacts with agents of those governments. Of course,
such contacts are widespread in other departments such as State, Commerce, Defense,
Energy, and the USTR.
Preventing foreign governments and their corporations from using lobbyists,
when the same lobbyists may be hired by domestic firms and interest groups, also
raises an issue in its differential treatment of domestic and foreign competitors. It is
not clear why government officials should listen to foreign governments and their
corporations less than to domestic interests. What is more, foreign lobbyists will still
be able to lobby Congress. Small countries who cannot afford to maintain large
diplomatic missions, but rely instead on hiring lobbyists to advocate their interests on
particular issues, will be especially affected.
In general, the prohibition on all contacts seems an unduly broad response to a
concern about misleading or improper lobbying of government officials by foreign
agents. FARA currently requires lobbyists representing foreign governments to
identify themselves as such when they speak to government officials. Those officials
are no less able to identify potential bias in the views of lobbyists for foreign
governments than in the views of other representatives.
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4
B.
The Order Would Likely Create a Wealth of Enforcement and
Implementation Problems.
The proposal also raises major difficulties of enforcement and implementation.
First, the proposed Order would regulate the conduct of executive branch
officials, not lobbyists. It thus would impose a burden on officials to determine the
identity of every person with whom they speak on a policy matter. The official must
determine both whether the lobbyist is registered, and for what policy matter his
registration applies. Failure to comply presumably would be sanctionable in some as-
yet undetermined fashion.
Second, the proposed Order would be a continual source of potential
embarrassment and, perhaps, litigation. Since the Order is not limited to contacts on
official premises or while an official is "on duty," it would apply even to seemingly
casual interaction at social functions. Allegations of improper contacts could be easily
levelled. Whatever short-term advantages would be gained by announcing the new
Executive Order would likely be more than outweighed by repeated charges of
violation.²
Third, because the Executive Order puts the burden of identification squarely
on the government official, it may encourage lobbyists not to identify themselves as
such to government officials, since the officials will not be able to speak with them
once they are identified. Such a result cuts against the sunshine spirit of FARA,
which encourages disclosure of lobbyists' identities and purposes, and against the goal
of enabling government officials to know who lobbyists are.
Fourth, the proposal's distinction between agents of private foreign corporations
(permitted) and foreign governments (prohibited) will be nearly impossible to enforce.
In many countries, close ties between industry and government make the distinction
nearly meaningless for the purposes of the proposal. Indeed, governments may get
around the proposal by using private corporations' agents as their unofficial, unpaid
surrogates.
Fifth, the "lawyers' exemption" in the proposed Order in fact may be less
broad than is being assumed. Specifically, we are uncertain whether the exception for
"formal or informal" agency proceedings in fact would be sufficiently broad to cover
"anti-dumping or countervailing duty proceeding; debt restructuring; and other similar
2 At a minimum, the order should clearly specify that it creates no private right of action, although
even that proviso would likely be insufficient to prevent claims premised on violation of the order.