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The V&E Report
Insights in Government Enforcement and Investigations

Lessons Learned: A High-Profile FARA Acquittal at Trial Provides Guidance for Both the Government and Targets of Future Investigations

On September 4, a federal jury took only a few hours to return a verdict of “not guilty” for Washington, D.C. attorney and former White House Counsel Greg Craig in a high-profile trial brought by the Department of Justice’s Foreign Agents Registration Act (“FARA”) Unit and federal prosecutors from the U.S. Attorney’s Office for the District of Columbia. Although the three-week trial was resolved in the defendant’s favor, the decision to charge Craig signals the government’s renewed seriousness about bringing FARA and FARA-related cases after decades of relatively dormant enforcement. With significant resources being added to the FARA Unit and increased attention to foreign influence peddling in the United States, we should expect an upsurge in FARA inquiries and criminal investigations as the government learns from its mistakes and attempts to build stronger cases against lobbying by unregistered foreign agents in the future.

The Government’s False Statements Case

As set forth in more detail in V&E’s previous analysis,1 FARA requires anyone acting “as an agent of a foreign principal” to register with the Attorney General.2 Subject to certain exemptions, the requirement reaches anyone acting within the U.S. as a publicity agent or a public relations counsel on behalf of a foreign government.3 It is a felony to willfully violate the registration requirement or to make a false statement in any document furnished to the government under FARA’s provisions.4

The case against Craig stemmed from a matter that Craig and his law firm handled for the Ukrainian government in 2012. According to the government’s indictment and public reporting about the case, Craig was engaged to conduct an independent inquiry into the prosecution of former Ukrainian Prime Minister Yulia Tymoshenko, who was prosecuted by the sitting government in Ukraine for allegedly abusing her power while in office. The Ukrainian government commissioned the inquiry in response to criticism from Western governments and media outlets that Tymoshenko’s prosecution was politically motivated and unfair. As part of the engagement, Craig was tasked with preparing a report5 to establish whether the prosecution was considered fair under Western norms and standards of due process.

According to the government, Craig communicated with a journalist about the report and provided the journalist with an advance copy before its scheduled publication, and his firm sent copies of the report to other journalists after the report was published. After the report’s publication, the FARA Unit initiated correspondence with Craig and his law firm to determine whether the firm should have registered as a foreign agent under FARA. Craig allegedly responded to the FARA Unit on behalf of his law firm and exchanged a series of letters with the FARA Unit through 2013, meeting once in-person. Based on these communications and representations, the FARA Unit allegedly determined that Craig’s firm did not need to register as a foreign agent.

In April 2019, following renewed attention as part of Special Counsel Mueller’s investigation, Craig was charged with making false statements under 18 U.S.C. § 1001 and violating FARA.6 The indictment7 alleged that in his correspondence and an in-person meeting with the FARA Unit, Craig made misleading statements about his contact with journalists and withheld other material information about his knowledge of — and role in — Ukraine’s public relations strategy. Craig pleaded not guilty and released a public statement8 denying that he misled the FARA Unit.

In the lead up to the trial, the judge dismissed the FARA count, which removed the underlying substantive offense against Craig. It was narrowed further when, due to the statute of limitations, the jury was instructed that the jury could only convict Craig for misstatements occurring after October 3, 2013. This limited the jury’s focus to a single meeting between Craig and the FARA Unit on October 9, 2013 and a letter that Craig sent to the FARA Unit on October 10, 2013. Significantly, the government could produce no written notes from the October 9, 2013 meeting and the government’s witnesses could not recall the precise words spoken by Craig at that meeting. Such missing materials and vague recollections about the core statements at issue — statements that were made over five years before trial — proved fatal to the government’s case.

Moreover, in his October 10, 2013 letter, Craig stated that the law firm shared the report with media outlets in response to their requests and that the firm did not consult with Ukraine when responding to inaccuracies in U.S. news articles. The prosecution argued to the jury that these representations were false and misleading, but Craig’s defense effectively countered that the letter’s statements, if read literally, were true. In the end, the jury did not take long to side with Craig, acquitting him of the false statements count after less than five hours of deliberations. After the trial, two of the jurors spoke with reporters about the verdict and commented that the critical letter Craig sent to the FARA Unit was “lawyerly” and “clever,” but did not warrant a finding of guilt.9 One juror said Craig “walked right up to the line and very well could have crossed it,” but did not clearly lie after October 3.10

What this Means for You

The Craig case serves as a cautionary tale, both for those representing foreign government clients, and for federal prosecutors who are charged with enforcement of the FARA statute.

For attorneys, lobbyists, and consultants, the case highlights the importance of registering as a foreign agent if an engagement constitutes political or public relations advice on behalf of a foreign government. Craig’s acquittal notwithstanding, DOJ officials have made clear their intent to increase scrutiny and enforcement from the FARA Unit, which makes obtaining sound legal counsel about whether to register all the more critical. Moreover, Craig’s indictment and his close call with a felony conviction following his “lawyerly” correspondence with the FARA Unit here is a good reminder of the old adage: “A man who represents himself (no matter how smart or accomplished), has a fool for a client.”

On the other hand, Craig’s acquittal should also send a strong rebuke to the government not to overcharge cases in its zeal for increased FARA enforcement. While the result in Craig’s case is unlikely to deter the government from investigating potential FARA violations in the future, prosecutors would be well served to build and bring more ironclad cases, backed up by documents and firm witness testimony, before testing the next FARA case at trial.

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1 William E. Lawler & Lincoln Wesley, History Repeats Itself: Mueller Investigation Spurs Renewed DOJ Focus on WWII Era Foreign Agents Registration Act, THE V&E REPORT (April 25, 2019), available at https://www.velaw.com/V-E-Report/History-Repeats-Itself--Mueller-Investigation-Spurs-Renewed-DOJ-Focus-on-WWII-Era-Foreign-Agents-Registration-Act/.

2 20 U.S.C. § 612(a).

Id. § 611(c)(1)(ii).

Id. § 618(a).

5 SKADDEN ARPS SLATE MEAGHER & FLOM LLP, THE TYMOSHENKO CASE (September 2012), available at https://efile.fara.gov/docs/6617-Informational-Materials-20190118-2.pdf.

6 20 U.S.C. § 618(a)(2).

7 Indictment, United States v. Craig, No. 1:19-cr-00125-ABJ (D.D.C. April 11, 2019), ECF No. 1, available at https://www.justice.gov/opa/press-release/file/1153651/download.

Gregory Craig Statement – 4-11-19, YOUTUBE (April 11, 2019), available at https://www.youtube.com/watch?v=HDT3Xsc87sA&feature=youtu.be.

9 Josh Gerstein, Greg Craig Found Not Guilty in Ukraine Lobbying Case, POLITICO (Sept. 4, 2019), available at https://www.politico.com/story/2019/09/04/greg-craig-found-not-guilty-in-ukraine-lobbying-case-1481017.

10 Id.

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Authors

Fry Wernick

Ephraim (Fry) Wernick Partner

Peter T. Thomas

Peter T. Thomas Associate