oversight

Foreign Agent Registration and Former High-Level Federal Officials Representing Foreign Interests

Published by the Government Accountability Office on 1990-09-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                         United !St.ates General Accounting     OffIce
                         Testimony




                         FOREIGN AGENT REGISTRATION AND FORMER HIGH-LEVEL
For Release         on   FEDERAL OFFICIALS REPRESENTING FOREIGN INTERESTS
Delivery
Expected      at
10:00    a.m.
Thursday
September        27,
1990




                         Statement       of
                         Allan     I. Mendelowitz,       Director
                         Trade,      Energy,    and  Finance      Issues
                         National      Security     and International        Affairs
                            Division

                         Before     the Committee       on Commerce,       Science,    and
                         Transportation
                         United    States  Senate
Dear Mr.            Chairman         and Members of              the Committee:


I am pleased               to be here          to discuss             our      reports       on foreign                agent
registration               and on the          extent        to which           former       high-level                federal
officials            represent          foreign         interests.              I will       discuss             the
conclusions            of     these      reports         and the          recommendations                   we made.


In summary,            in 1974,          1980,         and 1990,          we reported              continuing
problems            in the     Justice         Department's               administration                   of    foreign
agent        registration.               Despite         our     recommendations                   to correct              these
problems,            people        continue        to act        as foreign              agents        without
registering,               registered          agents        are      still      not      fully       disclosing               their
activities            and are not             filing        required           statements            on a timely
basis,         and officials             in the         executive             branch      are      still         often
unaware         of    the     act's      requirements.                  In addition,               we found            that      the
Justice         Department's             disclosure            criteria             were unclear.


Regarding            the    extent       to which           former          high-level            officials            represent
foreign         interests,            we reported              in 19861 that              during           fiscal        years
1980 through               1985,      76 former          incumbents             of high           level         positions          had
subsequently               carried       out      foreign           representational                 activities.                 We
did      not    attempt        to determine              whether            these      activities               violated         any
U.S.        laws.




1Foreign   Representation:       Former High-Level    Federal  Officials
Representing    Foreign    Interests    (GAO/NSIAD-86-175,    July 11,                                                   1986).
                                                                1
FOREIGN AGENT REGISTRATION


The specific             statute        govern ing              foreign         agent     report     ing
requirements             is     the    Foreign          Agents           Registration            Act of         1938,     as
amended.          The act          requires          foreign             agents       to disclose           their
representational                 activities,              including             any connections                 with     foreign
governments,             foreign        political               parties,          and other         foreign
principals,             as well        as the        activities                they     perform      on behalf            of
such principals                 in the         united          States.


Although         the     act     at    first       appears            to cover          a very      broad        range     of
representational                 activities,              it     also        includes       many exemptions                to
the     registration             requirement,                  such as for            diplomatic,           humanitarian,
commercial,             and legal          activities.                   Foreign        agents      who claim            one of
these      exemptions            are    not      required              to notify         the     Justice         Department
that     they     are     exempt         from       the        registration             requirement.


In 19742 and in                 19803 we examined                      the     administration              of    the
Foreign         Agents         Registration             Act       and identified               a number of
continuing             problems.           We found             the      following:


--     People     were acting              as foreign                 agents      without        registering.

2Effectiveness  of the Foreign Agents Registration                                                  Act of 1938,                as
Amended, and Its Admlnistratlon  by the Department                                                  of Justice
jGAO/B-177551,  Mar. 13, 1974).
3Improvements             Needed in the Administration                                  of Foreign          Agent
Registration             (ID-80-51, July 31, 1980).

                                                                  2
--    Registered        agents        were not           fully         disclosing              their     activities.


--    Registered        agents        were not           always          filing           required        statements               on
      a timely        basis.


--    Officials        in the      executive             branch          were often             unaware         of         the
      act's       requirements.


--    The Justice            Department          was not making                    full       use of      its     authority
      to enforce         the    act     and related                  regulations.


TO correct           these     problems,          we recommended                     that      the     Attorney
General:


--    Establish        a system         that      would          bring       all          foreign      agent         files         up
      to date        and require          that         filings          be made on time.


 --   Review        supplemental          statements                 to identify              and revise             all
      questions         that     confused         the       registrants,                   so as to reduce                   or
      eliminate         the    high     incidence            of        insufficient                 responses.


 --   Assess        the Registration              Section's               needs,           including        those            for
      more staff,            and establish              a review           system            to ensure          that         the
      Department         carries        out      its      registration                    and enforcement
       activities        effectively.

                                                                 3
We also         recommended             that      the Attorney           General       seek legislative
authority         to:


--     Require         written        notification            to the Justice            Department            of all
       exemption          claims       prior        to any agent          activity.


--     Give     the Justice            Department           additional          enforcement         measures

       (such     as administrative                     subpoena       pOwers,       a schedule       of civil
       fines     for     minor        violations,           and increases             in existing         fines).


This      y-r     Senator            Carl      Levin      asked     us to update         our   1980 report              on
the     administration                of     the act.         We reported           in July4     that         we found
these      problems          still          remain,       and we continue             to support        our     prior
recommendations.


The Department               still          had no information              on exemptions           and still            had
limited         enforcement            authority.             In addition           to reaffirming             our      1980
recommendations,                  we further             recommended        that      the Congress            may    wish
to consider             amending            the   act     to qive      the Department          of Justice              the
authority         to:


--     Subpoena         foreign        agents           to appear,       testify,       or produce
       records         at administrative                  hearings.


lForeign     Agent           Registration:   Justice    Needs to Improve                            Program
Administration               (GAO/NSIAD-90-250)     July 30, 1990.
                                                              4
--   Impose         administrative                   fines       for     minor       violations             against
     those      who,      after         being         directly            informed         of     their       obligation

     to report,           still         fail         to do so.


FORMER FEDERAL OFFICIALS                             REPRESENTING FOREIGN INTERESTS


We have also            issued          a number of                reports          on post-employment                      conflict
of   interest          activities               of    former           high-level          federal          officials              in
such areas           as military                contracting               and foreign             government
representation.                   The post-employment                          conflict         of      interest           laws
restrict        former        officials               from       representing              foreign          and other
interests           before        nonlegislative                   components             of    the       federal
government.             The restrictions                      vary        in duration             from       1 year         to a
lifetime,           depending           on the officials'                       former         relationship                to the
issues        in question           or         to the place              of     representation.


Within        the    context        of      post           employment           conflict          of      interest
concerns,           I previously,mentioned                             that     during         fiscal       years          1980-
1985,        76 of     2,557       former            incumbents               of high-level               federal       positions
had subsequently                  carried            out     foreign           representational                 activities.
Information            we collected                  showed that               the 76 former               incumbents
included        18 White           House officials,                       22 other         executive            branch
officials,           4 General           Officers,               15 members of Congress                         and 17 senior
congressional             staff.            We did           not       attempt       to determine,                  however,
whether        their      foreign              representational                   activities              violated          any U.S.
laws,        and we did           not    make any recommendations                               in our        report.

                                                                   5
Mr. Chairman,   this   concludes   my statement.   I would   be happy   to try
to respond   to any questions      you may have.