Featured Expert Contributor, White Collar Crime and Corporate Compliance

Gregory A. Brower is a Shareholder with Brownstein Hyatt Farber Schreck, LLP. He also serves on WLF’s Legal Policy Advisory Board. Jason R. Dunn  is a Shareholder in the Denver, CO office of Brownstein Hyatt Farber Schreck LLP where he co-chairs the State Attorneys General practice group and the Government Investigations & White Collar Defense practice group.

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In a much-anticipated decision last week, the U.S. Court of Appeals for the D.C. Circuit affirmed the dismissal of a civil case the Department of Justice brought against former Republican National Committee Chair Steve Wynn which sought an injunction mandating that he register as a foreign agent for the People’s Republic of China.  In doing so, the D.C. Circuit clarified that the duty to register under the Foreign Agents Registration Act (“FARA”) ends with the termination of the subject principal-agent relationship.

The case began in 2022, when DOJ sued Wynn alleging that he had acted as a foreign agent by assisting the Chinese government when he lobbied (unsuccessfully) then-President Trump concerning the removal of a certain Chinese national from the United States during a five-month period in 2017.  In May 2018, Wynn received a letter from DOJ advising him of his obligation to register as a foreign agent under FARA for the work he had done months earlier.  Over the next four years, DOJ and counsel for Wynn exchanged letters on the subject, with DOJ eventually threatening to seek an injunction under Section 618(f) of FARA if Wynn did not register.  Wynn held firm to his position that whatever work he may have done for China was complete, and he thus no longer had a duty to register under FARA. 

Shortly after DOJ filed suit, Wynn filed a motion to dismiss, arguing that the government could not compel him to register after the alleged agency relationship terminated.  In a decision that surprised most observers, Judge Boasberg of the U.S. District Court in D.C. granted Wynn’s motion, concluding that because his interactions with Trump on behalf of China ended prior to the filing of DOJ’s suit, he was no longer obligated to register under FARA.  The decision was based on a prior D.C. Circuit opinion, United States v. McGoff, which held, albeit in the criminal not civil context, that FARA’s registration requirement expires upon the termination of the agency relationship in question.  While Judge Boasberg found the McGoff decision to be controlling, he made a point of stating that he believed the dissent in that case (by the late Judge Bork) to be the more sensible interpretation of the statute.

DOJ appealed the dismissal, but a D.C. Circuit panel unanimously affirmed finding that binding circuit precedent (the McGoff decision) required the conclusion that because Wynn was not acting or continuing to act as a foreign agent at the time of DOJ’s demands for registration and eventual suit, his refusal to register did not place him outside of compliance with the law, and therefore DOJ had no legal basis to seek an injunction.  Specifically, the panel found that FARA’s authorization to sue for an injunction refers to “ongoing or imminent compliance failures, not discontinued ones.”

Interestingly, following the district court’s dismissal, and while DOJ’s appeal was pending, a bipartisan group of members of both the Senate and the House introduced the Retroactive Foreign Agents Registration Act (“RFARA”).  The bill seeks to clarify that a foreign agent has an ongoing obligation to register even after termination of their work for a foreign principal, a change obviously aimed at ensuring a different result in future cases like the one involving Wynn.  To date, the bill has failed to get a hearing in either chamber.  However, the recent D.C. Circuit decision has the potential to give it a new life in the next Congress.