FARA and foreign malign influence generally is a top priority for the National Security Division (NSD), so I’m grateful to have this opportunity to discuss our current work.
My name is Eun Young Choi, and I’m the Deputy Assistant Attorney General in NSD, responsible for overseeing NSD’s efforts to counter hostile nation threats, enforce sanctions and export controls, mitigate foreign investment risks, disrupt nation-state cyber actors, and as is most important here, combat foreign malign influence. This latter part of my portfolio includes oversight of NSD’s FARA Unit, which is part of our Counterintelligence and Export Control Section (CES).
Although I’ve been with NSD for just the past few months, I have had deep ties to the Department’s national security work for over a decade, starting my career as an Assistant U.S. Attorney (AUSA) in the Southern District of New York, then working on cyber and cryptocurrency issues at the Office of the Deputy Attorney General, and most recently, by serving as the inaugural Director of the National Cryptocurrency Enforcement Team (NCET).
In making the transition from my work on the NCET to my current role, I was struck by the similarities between the world of cryptocurrency and FARA enforcement. The core of the Department’s mission when it comes to both digital assets and foreign agents is about promoting transparency and addressing the risk of obfuscation. Our concern is not with the lawful use of cryptocurrency, or with the contents of someone’s speech or political activity.
Our concern is instead with the problem of hidden actors — those who seek to take advantage of the shadows to engage in illicit acts anonymously, whether it is someone using cryptocurrency to try to sidestep anti-money laundering and know-your-customer requirements of financial institutions, or it is someone who seeks to affect our political debate and government institutions without disclosing that they are doing so on behalf of a foreign actor.
It is our role to enforce laws that shine light on spaces that would otherwise be dark, and to ensure that there is transparency and accountability for those who advocate in our public square and those who have access to the U.S. markets. That transparency represents the best way we are able to protect vital institutions in our society — whether that be financial markets or our democratic systems — from manipulation and abuse.
Let me start first with what we are seeing at the Department of Justice in terms of the threat landscape when it comes to efforts by foreign actors — especially those with ties to our nation-state adversaries — to influence U.S. policy makers and the American public writ large.
We are increasingly seeing countries — including China, Russia, Iran, North Korea as well as certain Gulf States and others — become more aggressive and more capable in their stealth influence campaigns than ever before. These nations employ a range of tactics to advance their interests and to affect policy outcomes in the United States and our governmental institutions.
We also face an alarming rise in acts of “transnational repression,” which are efforts by foreign governments — often authoritarian regimes — to interfere with the freedom of expression and to punish their critics and dissidents, including diaspora communities here in the United States. When it comes to transnational repression, we see everything: from content moderation, to harassment, to stalking, and even murder-for-hire plots against Americans on U.S soil.
Our partners in the Intelligence Community (IC) are seeing similar trends. Every year, the Office of the Director of National Intelligence issues an annual threat assessment describing the worldwide threats and collective insights from the multiple agencies that make up the Intelligence Community. This year’s report contains multiple warnings about the threat posed by foreign disinformation and malign influence operations. I’ll share with you two findings that I think are especially noteworthy.
First, the report makes clear that the threat of foreign influence operations is on the rise. When it comes to China, for example, the IC has assessed that the Chinese government is continuing to expand its global intelligence and covert influence operations to bolster support for the communist regime. Its efforts include trying to shape U.S. policy and public perceptions in a positive direction but also meddling in elections where candidates are perceived to be anti-China. Some of the tactics that the Chinese deploy include mobilizing Chinese student organizations to conduct activities on behalf of the government and using online personas to try to exploit perceived U.S. societal divisions.
These nation-state threats are not just limited to China of course — the report also identifies Russia as one of the most serious foreign influence threats to our country. As has been made clear by public reporting in recent years, the Russian government uses its intelligence services, proxies, and a wide range of influence tools to undermine U.S. standing, sow internal discord among our communities, and influence U.S. voters and decision-makers.
According to the IC, Russia “views U.S. elections as opportunities for malign influence,” so we should prepare for the possibility that they will increase their efforts to increase in the coming year. At the same time, the nexus to the Russian government in their influence campaigns is increasingly challenging to identify, as Russian actors and proxies are becoming increasingly capable of seeding false stories or amplifying disinformation through organizations that appear to be independent news entities.
The second finding from the report is perhaps even more ominous: the IC’s assessment that the malicious use of digital information and technology by hostile foreign states will become more pervasive, automated, targeted, and complex in the coming years. This makes our work even more challenging. Modern technology and the general interconnectedness of our world has many obvious benefits. But it also enables malign actors to reach an unprecedented number of Americans covertly and without necessarily even setting foot on U.S. soil.
FARA is one of the most important tools the U.S. government has in its arsenal to respond to these threats. And as I hope my remarks today make clear: FARA is an enforcement priority for the Department of Justice. Simply put, the extent to which foreign governments and foreign interests have tried to shape our public policy in recent years underscores the importance of ensuring that we uphold FARA’s transparency goals.
And while we are increasing our enforcement of FARA to respond to the rising threats that we see, we remain committed to doing so in a manner that is consistent with our core values.
This means respecting every American’s right to free speech. Our commitment to the freedom of expression means that we cannot simply crack down on disinformation. Instead, we much approach this difficult issue through transparency and disclosure. Our remedy for such speech is not censorship, but rather additional speech as well as ensuring appropriate disclosure in circumstances where a foreign government is trying to exert its influence on our policies and politics.
This also means upholding the core value of equality and non-discrimination in our enforcement. We are certainly keenly focused on the threat posed by foreign adversaries — such as China, Russia, Iran, and North Korea. But the obligations of FARA are not limited to those who work on behalf of such countries, and when we enforce the law, we do so in a way that is even-handed and that applies equally regardless of race, ethnicity, and the national origin of those involved.
Too often, the victims of malign foreign influence campaigns and transnational repression activities are vulnerable communities who fled authoritarian regimes and came to the United States because they sought out the freedoms and protections enshrined in our Constitution and our laws. And it is critical that we in the Department maintain their trust in the neutral way we enforce these laws.
As I mentioned a moment ago, we are responding to the increasing threats that we are seeing with stronger enforcement of FARA. The numbers tell the story.
This past year, we conducted 25 total inspections, which is the highest number of inspections since 1985, nearly 40 years ago. This is part of an overall trend of increasing our number of inspections each year. In the prior two years, we conducted 22 and 20 inspections, respectively, and I expect this number to stay high in the coming year, with the addition of a new FARA Unit analyst.
We also continue to have a significant number of total FARA registrants. We presently have 538 registrants, making this the fifth year in a row that we’ve had more than 500 total. Eighty-five of these are new registrants. Although this number is down slightly from recent years, it is generally consistent with the overall trend of having a higher number of overall registrants and new registrants. By comparison, a decade ago, in 2013, we had 343 registrants, 55 of which were new.
In addition, we’ve had significant personnel changes to our FARA team this past year. These changes should likewise strengthen our enforcement efforts. Over the summer, Evan Turgeon was named the Chief of the FARA Unit. He replaces Jenny Gellie, who is now the Principal Deputy Chief of CES, currently serving as Acting Chief who leads CES, and who remains active in FARA matters. Their continued presence in CES, combined with the long-time service of Heather Hunt, Senior Counsel for FARA Administration, means that we are fortunate to have the in-house expertise of two former FARA Unit Chiefs, along with the current Chief all under one roof.
Many of you heard from Heather yesterday, and both Jenny and Evan will be here later today. Collectively, they bring a wealth of knowledge and experience for both the civil administration of FARA and our criminal enforcement of the statute.
In addition to the new analyst, we are also adding a civil attorney to the FARA Unit. We expect these additions to result in an increase in inspections and civil investigations.
The Department’s cases from this past year similarly reflect an increased focus on FARA enforcement. And as I discuss these cases, I will just note at the outset that indictments are just allegations and all defendants are, of course, innocent until proven guilty beyond reasonable doubt in a court of law.
Among our most notable recent indictments in this area, of course, is the superseding indictment returned in the Southern District of New York in October against Robert Menendez, the senior Senator from New Jersey, which alleges that Menendez and his wife participated in a scheme to accept bribes from three New Jersey businessmen who are also charged as co-defendants.
As alleged in the superseding indictment, in exchange for accepting hundreds of thousands of dollars of bribes, Senator Menendez used the power and influence of his office to protect and enrich his co-defendants and to enrich himself and his wife. He is also alleged to have been paid to serve the interests of the Egyptian government. Among the allegations are that the Senator used his position as Chairman or Ranking Member of the Senate Foreign Relations Committee during the relevant timeframe to ensure that billions of dollars’ worth of foreign military sales and financing flowed to Egypt.
The superseding indictment charges Menendez, his wife, and one of his co-defendants with conspiracy to violate 18 U.S.C. § 219, which forbids members of Congress and other public officials from acting as agents of foreign principals for purposes of either FARA or the Lobbying Disclosure Act in connection with representing a foreign entity. This is the first case in which the government has brought criminal charges under that provision.
In April, a jury in D.C. convicted Pras Michel, a U.S. entertainer and businessman, for orchestrating an unregistered, back-channel campaign to influence the U.S. government to drop the investigation of Jho Low in connection with 1MDB scandal as well as to lobby for the return of a Chinese national back to the PRC.
When it comes to the civil enforcement of FARA, our efforts have been equally robust. In April, we filed a civil enforcement action in the Eastern District of Pennsylvania to compel an entity known as Federación de Alcaldes Pedaneo or FDAP, to comply with FARA. This is our third civil action filed in the last four years and marks our commitment to pursuing both civil and criminal enforcement of the statute.
The complaint alleges that FDAP, which has been registered under FARA since 2020, failed to file supplemental registration statements and its bylaws and charter, as well as failed to pay the associated filing fees, all of which are required by the statute and our regulations. We sought a declaratory judgment and permanent injunction to compel FDAP to comply. In October, the court entered a default judgment against FDAP ordering it to file the required documents and pay the delinquent fees.
There have also been developments in the civil enforcement case that the Department brought against Steve Wynn in 2022. I know that case was the focus of much discussion at this conference last year. In October 2022, a district judge in D.C. granted Wynn’s motion to dismiss based on the judge’s reading of the 1987 D.C. Circuit case, U.S. v. McGoff, involving a criminal prosecution of FARA. The issue on appeal is whether the district court erred in applying McGoff to conclude that the Department was not authorized to file a civil enforcement action after the agency’s activities on behalf of a foreign principal have ceased. The D.C. Circuit heard argument on that issue in early November, and we look forward to the court’s issuance of an opinion in the near future.
This past year was also a significant one when it comes to efforts to update the FARA statute and our regulations. Given that the statute was enacted in 1938 and that the last significant updates to the statute were in 1995, the Department believes that legislative reform is critical to strengthen FARA enforcement mechanisms and to ensure that there is greater compliance with the Act’s requirements. I know you will hear Jenny Gellie speak about legislative and regulatory proposals in greater depth later today, but I want to note a few points here.
The Department has four priorities — which have broad administration support — that we believe would greatly enhance our ability to enforce FARA. First, the Department seeks the authority to issue civil investigative demands. This would give us the ability to obtain all relevant information about the nature of an agent’s activities and relationship with a foreign principal without taking the step of opening a criminal grand jury investigation or obtaining a criminal search warrant.
Second, we seek authority to issue civil penalties for FARA violations — things like failing to file registration statements, label informational materials, or make required disclosures. This would create a middle path that avoids the current circumstance in which the Department is forced to choose between bringing criminal charges and bringing a civil injunctive suit with no possibility of civil monetary penalties.
Third, we would seek to eliminate the exemption to file under FARA for those lobbyists who work on behalf of foreign commercial interests and who register under the LDA. This would require such lobbyists to make all of the disclosures required by FARA.
And fourth, we would propose a so-called “McGoff fix,” to address the district court ruling in the Wynn case from last year, which relied on McGoff as the basis for its decision to dismiss our complaint. We would seek legislative text that would make clear that, in accordance with the logical reading of Section 612(a), an agent must register and comply with FARA’s requirements covering the period of an agency relationship even where the agency relationship has ended. We would also seek to further clarify that the government has the authority to bring a civil suit to compel the delinquent agent to register for that conduct.
Although, as I mentioned earlier, we have appealed the district court’s decision in Wynn, we believe it’s prudent to seek a legislative solution to close the loophole created by that decision.
Many of these four priorities are reflected in the multiple bills on the Hill that have been proposed to update the statute, including the following that have been proposed over the course of the last few years. In 2021, Senator Chuck Grassley and other members on the Senate Judiciary and Senate Foreign Relations Committees proposed a bill that would authorize civil investigative demands and civil penalties. The Grassley bill would also enhance criminal penalties and would require the Department of Justice to develop and implement a comprehensive strategy to improve the enforcement and administration of FARA. Last November, the Department sent the Senators a views letters expressing support for the bill.
Along with this proposal, last July, Representative Mike Gallagher and Senator Grassley introduced the bipartisan Retroactive Foreign Agents Registration Act to address the loophole created by the district court’s ruling in Wynn. This bill was introduced as an amendment to the National Defense Authorization Act (NDAA) but did not make it into the version of the bill that advanced.
Finally, in February of this year, Senator John Cornyn introduced the Preventing Adversary Influence, Disinformation, and Obscured Foreign Financing — or “PAID OFF” — Act, with support from a bipartisan group of senators. This proposal would make unavailable certain exemptions under FARA for those agents who are working on behalf of foreign principals who are deemed by statute to be foreign adversaries — specifically China, Cuba, Iran, North Korea, Russia, and Syria. The Department has provided technical assistance to the Senate about this proposal.
We are heartened to see that there is significant support on both sides of the aisle and in both chambers of Congress for statutory FARA reform, and we would hope that there will be momentum on the Hill to include our four priorities in any such reform.
In addition, we are working to update our regulations, which were last amended in 2007. As you know, two years ago, we issued an Advanced Notice of Proposed Rulemaking (NPRM) seeking public comment on 19 separate questions about revising, clarifying, and modernizing the regulations. We received a number of helpful comments in response to that public notice, and the Department has been working hard to issue an NPRM soon.
Before I conclude my remarks, I want to say a few words about corporate compliance and enforcement. One of the things we at the Department of Justice have watched in recent years with concern is a troubling trend in our corporate investigations. More and more, these cases are revealing violations of our national security laws, resulting in a growing number of corporate criminal investigations across different industries and geographic regions.
In many instances, these are investigations into potential violations of our sanctions and export laws — companies that facilitate the evasion of sanctions regimes or hostile nation-states, or that illicitly export sensitive technologies to bolster the military advantage of our adversaries. This includes, for instance, the guilty plea and more than $4 billion financial penalty secured last week in the Western District of Washington against Binance — the world’s largest crypto exchange — due to its violations of anti-money laundering and sanctions laws. But there are other parts of our work in the National Security Division that touch on corporate enforcement.
Last year, for instance, we announced our first-ever corporate conviction of providing material support to a foreign terrorist organization. The company in that case agreed to pay a $778 million financial penalty as part of a plea deal.
Our focus on corporate enforcement is also relevant when it comes to FARA and the people in this room. Currently, more than 50% of the current FARA registrants are corporations or other business organizations. Corporate actors and other entities like sovereign wealth funds, law firms, or think tanks that act on behalf of foreign principals must uphold their registration requirements under FARA.
Over the past year, we at NSD have taken concrete steps to best position ourselves to support our increased focus on corporate compliance. In September, we announced the appointment of our first Chief Counsel and Deputy Chief Counsel for Corporate Enforcement within NSD, who are leading our efforts to investigate and hold accountable corporate actors who violate national security laws.
We are more than two-thirds of the way through hiring 25 additional attorneys into our CES. These are the attorneys in NSD that handles sanctions and export control investigations and prosecutions, as well as civil and criminal investigations under FARA.
In March of this year, we updated our voluntary self-disclosure policy, which covers potential violations of export control and sanctions laws. The updated policy is designed to incentivize companies to come forward promptly when they identify or become aware of potential criminal violations in exchange for the ability to reduce — or, in some cases, eliminate — their criminal exposure.
There was one change to the policy that I hope caught the attention of those of you here today: although the policy is most applicable to self-disclosures of potential violations of sanctions and export control laws, the principles underlying it are relevant to all corporate matters handled by NSD, including matters arising under FARA. This means that our expectations about robust compliance programs and timely and voluntary disclosure of potential criminal violations are just as relevant to the FARA bar as they are to the sanctions and export control community.
In sum, the challenge of foreign malign influence will continue to evolve in the coming years, as technology facilitates a growing array of means by which our adversaries will seek to undermine our nation’s institutions. The Department will continue to play a leading role to meet this challenge — including by using FARA enforcement and all the authorities available to us — to bring light and transparency to public fora without compromising the freedoms that form the foundation of our society.
Thank you again for having me today.