DOJ Can’t Force Ex Post Facto FARA Registration, Court Says
By Richard C. Sofield, Peter T. Thomas, and Cynthia Karnezis*
On October 12, 2022, the U.S. District Court for the District of Columbia dismissed the civil Foreign Agents Registration Act (“FARA”) enforcement action against casino developer and former Republican National Committee finance chairman Stephen A. Wynn. The dismissal is a blow to the Department of Justice’s (“DOJ”) view that FARA permits the U.S. government to require retroactive registration after an agency relationship has terminated. The Court’s decision in this case limits DOJ’s ability to compel FARA registration after the fact, while at the same time incentivizing DOJ to actively and aggressively police compliance with the statute in the first instance.
The Wynn Case
According to the DOJ’s complaint, Wynn lobbied then-President Trump and members of his administration in 2017 to revoke or deny the visa of a prominent Chinese businessman who had fled corruption charges in China and sought political asylum in the U.S. DOJ alleged that while advocating for this, Wynn was acting on behalf of the Chinese government out of a desire to protect his business interests in Macau. Over the course of four years, DOJ’s FARA Unit informed Wynn multiple times that it had determined that he was obliged to register under FARA due to his activities. Despite these admonitions, Wynn refused to register. On May 17, 2022, DOJ commenced its suit seeking an injunction forcing him to register.
On July 18, 2022, Wynn moved to dismiss the suit, arguing that DOJ cannot compel him to register after his alleged agency relationship ended.
The Court granted Wynn’s motion to dismiss. In doing so, the Court did not consider whether he acted as an agent for China. Instead, the Court determined that it was required to dismiss the case under United States v. McGoff, 831 F.2d 1071 (D.C. Cir. 1987), which established that FARA’s registration obligation ends when the agency relationship terminates. According to the Court, the D.C. Circuit in McGoff relied on the text of 22 U.S.C. § 618(e), which provides that failure to register is a continuing offense “for as long as such failure exists.” The Court further explained that the D.C. Circuit interpreted Section 612(a) to only create a registration obligation during the period that a person was the agent of a foreign principal as defined in FARA. DOJ attempted to distinguish McGoff on the basis that it was a criminal FARA enforcement action, but the Court concluded that McGoff was not exclusive to the criminal context and the D.C. Circuit’s interpretation of FARA had to be consistent in both contexts. The Court, accordingly, reasoned that because Wynn’s alleged relationship with the Chinese government ended in 2017, the DOJ could not bring a civil suit to compel him to register in 2022. The Court acknowledged that DOJ could have brought a criminal case if initiated before the five-year statute of limitations had lapsed, however.
As the law stands now, the Wynn case can be expected to put a damper on future attempts by DOJ to compel retroactive FARA registrations. There are at least two immediate consequences to the current limitation of DOJ’s retroactive civil enforcement authority. First, DOJ will likely more aggressively pursue civil enforcement actions in the future to avoid having ripe cases go stale due to foreign agents winding down their relationships prior to DOJ filing suit to compel registration. Second, DOJ may be more likely to bring criminal enforcement actions in cases where litigation cannot practicably be initiated until after the agency relationship ends.
However, in analyzing McGoff, the Court all but conceded that the D.C. Circuit interpreted FARA incorrectly. The Court dismissed the Wynn case solely because of McGoff’s binding precedent. Given that the Court all but invited an appeal to allow the D.C. Circuit to reconsider its interpretation of the statute, it is possible that DOJ will appeal and attempt to have McGoff overturned. If this happens, the confirmation of DOJ’s authority to use its civil enforcement authority to compel retroactive registration may lead to more ex post facto enforcement cases, particularly cases that are resolved before a lawsuit is ever filed.
Either way, the next stages of the Wynn case are worth following closely.
*Cynthia Karnezis is a law clerk in our Washington office.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.