Moreover, compliance with the registration provisions of the Act would burden not only the lawyers involved but the Department of Justice personnel charged with enforcement, who would have to process a vast quantity of registrations involving activities clearly outside the basic purposes of the Act and to attempt to police registration requirements deemed applicable to such activities. This would be so even though Mr. Justice Goldberg in Rabinowitz recognized the possibility that the detailed registration provisions might be waived in part for lawyers (376 U.S. at 610); determining what should be reported in such instances might well produce no less difficulty.

In light of the foregoing, we urge that Congress consider and act upon the proposed amendments to the Foreign Agents Registration Act, taking into account the comments set forth below, in order to eliminate from the coverage of the Act activities undertaken by lawyers, other professionals and businessmen on behalf of foreign principals which cannot under any normal definition be considered political and which should not subject the persons involved to the burdensome registration requirements of the Act.

C. The Amendments to the Act

The amendments to the Act in the form adopted by the Senate have the purpose of requiring complete public disclosure by persons acting for foreign interests where their activities are political or close to political in nature. The amendments contain the following provisions: (a) revision of the definitions of the terms "foreign principal," "agent of a foreign principal" and "political activities" and the addition of the term "political consultants"; (b) revision of the "commercial" exemption and the addition of a specific exemption for lawyers in certain cases; (c) specific authority in the Justice Department to waive when appropriate the filing of information not necessary to carry out the purposes of the Act; (d) authorization of an injunctive remedy for use by the Attorney General; (e) stricter requirements for disclosing political activities and plans; (f) prohibition of contingent fee contracts between agents and foreign principals based on success in political activities undertaken by the agent; (g) full identification of foreign principals by agents appearing before congressional committees; (h) prohibition of campaign contributions on behalf of foreign principals; and (i) prohibition, with certain qualifications, of officers and employees of the United States from acting as agents of foreign principals (the last two provisions to constitute an amendment and addition to Title 18 of the United States Code).

The proposed amendments would include in the definition of "agent of a foreign principal":

"any person who acts as an agent, representative, employee, or servant, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign principal or of a person any of whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal, and who directly or through any other person—

(i) engages within the United States in political activities for or in the interests of such foreign principal;

(ii) acts within the United States as a public relations counsel, publicity agent, information-service employee or political consultant for or in the interests of such foreign principal;

(iii) within the United States solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for or in the interest of such foreign principal; or

(iv) within the United States represents the interests of such foreign principal before any agency or official of the Government of the United States; . . ."

This language was not intended to change significantly the category of activities which might constitute a person the "agent of a foreign principal." In fact, by specifying the four categories of activities which would create the

*See S. Rep. No. 143, supra at 7. The Act as presently in effect includes in the definition of the term "agent of a foreign principal" any person who acts as, among other things, attorney for a foreign principal. The proposed amendments exclude specific reference to the word "attorney"; the 1965 Senate Report on the amendments indicates. however, that the word was excluded "as saying more about a particular agent's field of endeavor than about his relationship to his principal." S. Rep. No. 143, supra at 6. Hence we do not believe that any significance can be attached to the exclusion of the word.

agency relation, it might be argued that the amendments narrow to some degree the categories of persons who constitute agents of a foreign principal under the existing Act. See S. Rep. No. 143, supra at 6. However, for the first time the definition would specifically cover persons who deal with government officers on behalf of foreign principals on the day-to-day administrative level. More significantly, however, since the definition of an agent of a foreign principal incorporates the terms "political activities" and "political consultant," it is in the new definitions of these terms that important changes have been introduced into the Act.

The term "political activities" means "the dissemination of political propaganda and any other activity which the person engaging therein believes will, or which he intends to, prevail upon, indoctrinate, convert, induce, persuade, or in any other way influence any agency or official of the Government of the United States or any section of the public within the United States with reference to formulating, adopting, or changing the domestic or foreign policies of the United States or with reference to the political or public interests, policies, or relations of a government of a foreign country or a foreign political party.” The term "political consultant" means "any person who engages in informing or advising any other person with reference to the domestic or foreign policies of the United States or the political or public interests, policies, or relations of a foreign country or of a foreign political party."

The proposed bill would also change the exemption provisions contained in the present Act. The words "financial or mercantile," so heavily relied on by Mr. Justice Goldberg in the Rabinowitz case, would be struck from the exemption section and, under an amendment originally proposed by Senator Javits, a new exempting phrase would be added, so that a person engaging "only (1) in private and nonpolitical activities in furtherance of the bona fide trade or commerce of [a] foreign principal; or (2) in other activities not serving predominantly a foreign interest" would be excluded from the requirements of registration. Furthermore, a new exemption would be added to cover any "attorney whose activities are confined to openly representing, as an attorney of record, the interests of a disclosed foreign principal before any court or administrative agency of the United States, or of any State or political subdivision thereof."

The changes set forth above contain a number of substantia] improvements in the present Act as interpreted by the Rabinowitz case. In the first place, the amendments would eliminate the words "financial or mercantile" in the exemption section, upon which the Rabinowitz decision in large measure turned.. Secondly, while the definition of a "political consultant" (and therefore an agent of a foreign principal) includes a person who renders advice or information to a foreign principal with reference to United States domestic or foreign. policies, it is now clear that the commercial exemption is available to political consultants, so long as they do not engage in "political activities," that is, activities intended to influence Government officials or the United States public with respect to Government policies, S. Rept. No. 143, supra at 7, 9. In other words, persons who merely advise their foreign principals on American laws, policies and trends would be exempt from registration under the amendments. Thirdly, the specific exemption for attorneys would overrule the holding in the Rabinowitz case and would make clear that an attorney of record in a formal proceeding is not subject to registration. However, as discussed below, the attorneys' exemption does not cover other categories of persons who make formal appearances on behalf of foreign principals and does not cover a wide variety of informal activities before Government agencies. Finally, the amendments would codify the past practice of the Department of Justice in permitting registrants not to furnish such part of the information included in the registration form under the statute as the Attorney General may find is not necessary to carry out the purposes of the Act.

The 1964 Senate Report stated that subparagraph (iv) in the definition of an agent of a foreign principal was specifically intended to cover persons who deal with government officers "on matters which do not constitute questions of policy but rather affect the administration of the law." S. Rep. No. 875, supra at 7. The 1965 Senate Report does not repeat this conclusion.

While the changes set forth above do represent an important step forward, there are areas in the Act as proposed to be amended which are too broad or which require clarification. The first, and certainly the most important, of the problems raised by the amendments is that for the first time the Act would define “political activities" to include any activity intended to "persuade, or *** influence any agency or official of the Government of the United States or any section of the public within the United States with reference to formulating, adopting, or changing the domestic or foreign policies of the United

States * * *" (emphasis supplied). The 1965 Senate Report comments as follows

with respect to this language:

The committee recognizes that the word "policies" as it is applied to operation of and contacts with the multilievel governmental decisionmaking process is susceptible to a number of interpretations. The committee's use of the word is intended to refer to matters within the purview of the legislative and executive branches of Government and not the judiciary, since the courts do not make "policy" as the term is used here but only interpret and apply existing policy as embodied in laws and regulations. "Policies" as used in this definition relates to existing and proposed legislation, or legislative action generally; treaties; executive agreements, proclamations, and orders; decisions relating to or affecting departmental policy, and the like. Measures of this nature all require decisionmaking at a level of government above those levels charged with the day-to-day administration of existing policies, consequently the use of the word "policies" would not include routine contacts by an agent of a foreign principal with a Government employee or official for the purpose of inquiring about current policies, or to seek administrative action on a matter where the basic policy is not in question ***. S. Rept. No. 143, supra at 8-9.

It is clear that even with this attempted clarification, the new definition of political activities creates a number of serious questions as to whether certain types of relatively routine activities require registration or not. These might include negotiations over some Government contracts; informal contacts with Government officials to recommend changes in Government practices or programs which do not constitute or are preliminary to formal Government proceedings; and other activities on behalf of foreign principals in appearing before or working with Government officials or agencies in matters which may verge on the area of "policy making" and which may be interpreted as attempts to formulate, adopt or change United States policies. These would also include appearances by non-lawyers before Government agencies even in rule-making or other types of formal proceedings where the new attorney's exemption would apply. Senator Fulbright has stated that the amendments to the Act would not broaden its scope. However, the amendments do not leave the situation sufficiently clear. In the first place, as stated above, there is a strong argument under the present Act that where the foreign principal is not a foreign government or a foreign political party and where the activity is not intended to influence the enactment or repeal of any legislation, a person can represent a foreign private principal before administrative agencies in financial or mercantile matters without registration, even though such appearance may be for the purpose of urging a change in the domestic policy of the United States. In such cases there is no reference to the "political or public interests, policies, or relations of any foreign government or foreign political party," or the "political interests of [any other] foreign principal,” as required by the regulations under the present Act. Secondly, the lack of precision in the existing legislation has had the advantage of making it possible for the Department of Justice to excuse persons from registering where it was believed that there was insufficient nexus with the political or public interests of a foreign government or that the activities were not such as to affect high level decision-making in the United States Government.

On the other hand, the amendments make it clear that unless the attorneys' exemption applies, the agent of a foreign principal urging a change in United States domestic policies before Government officials or agencies on behalf of a foreign principal will be subject to registration. The specificity of the amend

ments, in addition, may well tend to limit the discretionary authority of the Department of Justice. The legislative history of the amendments may also encourage a more rigid interpretation of the Act: for example, Senator Fulbright's comment to the effect that the purpose of the Act now is more directed toward professional lobbyists than towards subversive agents (Cong. Rec., April 5, 1965, p. 6749) and indications that the Department of Justice should enforce the Act more rigorously than in the past (S. Rept. No. 143, supra at 3-5).

We believe that the interests of our Government would be adequately served by obtaining information about agents representing foreign political interests in the form of foreign governments, foreign political parties or foreign commercial enterprises which are substantially associated with the political or public interests of a foreign country. We do not believe that it is necessary to place on foreign business firms doing substantial business in this country a burden not placed on their domestic competitors, or to extend the Act to lawyers and others who are appearing on behalf of foreign principals before governmental agencies in respect of "policy" matters, where the foreign principal is private and where the activity is not related directly or indirectly to the political interests of a foreign government, a foreign political party or other foreign entities substantially associated with the political or public interests of a foreign country. It seems to us unreasonable to require a person appearing before a federal administrative agency on behalf of a private principal in a purely commercial and non-political matter to register, when his domestic counterparts do not have to register.

We do not argue that an exemption should be granted where a private foreign commercial interest is substantially and materially associated with the political interests of a foreign country. Where, however, the foreign principal is truly a "private" enterprise engaged in ordinary commercial activities in this country, the distinction between foreign and domestic entities does not appear to have real validity. To say that an agent of such a person has "placed himself in a most sensitive position between his own governmental institutions and a foreign principal-an area traditionally reserved for the diplomatic corps, with all its formalities and restraints" (S. Rep. No. 143, supra at 4) is, we believe, to give a highly unrealistic description of a lawyer, other professional or businessman engaged in ordinary commercial representation of foreign principals before Government agencies.

While the attorneys' exemption gives the lawyer representing a foreign principal certain advantages, it does not fully answer the problem of the profession in representing foreign principals before Government agencies. The 1965 Senate Report contains the following description of the exemption:

"Section 3(g) would exempt from registration attorneys of record representing foreign clients, including foreign governments, in appearances before Federal and State courts and administrative agencies. The amendment is meant to include all normal and necessary activities by attorneys involved in processing a case in the courts or obtaining a decision by an administrative agency where there is a formal procedure requiring full disclosure of the agent's status and the identity of his client. It is the committee's view that the degree of disclosure required by the act serves no useful purpose in these legal proceedings. Sufficient disclosure is required automatically by virtue of the nature of the agent's representation activities in such situations.

This exemption is not intended to be applicable to appearances before Government agencies generally but only to appearances before agencies where decisions are made on the basis of established formal legal proceedings, such as the Federal Trade Commission, or where disclosure is required as a matter of course in the representation, such as the processing of a registration statement with the Securities and Exchange Commission. It is not intended to cover matters coming before the regular departments involving a policy decision as, for example, in the case of sugar import quotas in the Department of Agriculture." S. Rept. No. 143. supra at 12-13.

Thus, it is quite clear that a lawyer appearing for a foreign principal in matters asserted to affect the domestic policies of the United States in informal governmental proceedings would not enjoy the benefit of the exemption. We believe that so long as the fact of an attorney's representation of the foreign principal is disclosed to the agency or government personnel before which the

attorney is appearing, this strict line between formal and informal proceedings is unwarranted. If the matter involves sugar import quotas, and the foreign principal is a foreign government or a private entity in a country for which sugar exports and therefore United States actions with respect to sugar quotas are of major political concern, it may be desirable to require registration since the activity is clearly political. However, where the matter is clearly nonpolitical in the usual sense of the term (for example, a lawyer appearing before the Food and Drug Administration on behalf of, say, a foreign drug company doing business in the United States in order to propose changes in regulations governing the approval of drugs), it does not seem necessary to draw a distinction between formal and informal appearances.

One of the most serious questions raised by the proposed amendments relates to the domestic subsidiaries of foreign corporations and the foreign subsidiaries of American corporations. It was as an intended solution to this problem that, at Senator Javits' suggestion, "activities not serving predominantly a foreign interest" would be excluded from the requirements of registration under the amendments. This new exempting phrase was added in an effort to make clear that even political activities would be exempt if carried on, for example, by an Ameriacn parent corporation or the American subsidiary of a foreign corporation, so long as the predominant interest does not lie with the foreign entity. Otherwise, the domestic subsidiary of a foreign corporation might be deemed the agent of a foreign principal and required to register if it pursues its normal commercial activities in the United States, including the usual contacts and dealings with Government agencies such as the Internal Revenue Service or the Department of Commerce. Such activities might be interpreted as an attempt to influence an agency or official of the Government with reference to formulating, adopting or changing the domestic policies of the United States, and the domestic subsidiary might be deemed to represent the interests of its foreign parent. This interpretation might be asserted even though there was susbtantial United States ownership of the foreign parent corporation and even though the domestic subsidiary was doing no more than what American corporations do in the normal course of their business within the United States.

In the case of a foreign subsidiary of an American corporation a similar problem exists, since such a foreign subsidiary is a "foreign principal" both under present law and the proposed amendments. Counsel for the foreign subsidiary and personnel of the doemstic parent corporation who act for the subsidiary might be required to reigster if they advise or act with respect to United States "policies."

There seems to be no justification for such burdensome regulation in situations of this type. While the amendment exempting activities "not serving predominantly a foreign interest" may be helpful in this regard, its scope is somewhat unclear. There could be a problem of interpretation as to the meaning of “predominantly." If representations are made with respect to a foreign subsidiary's problems, for example, they might arguably be regarded as "predominantly" serving a foreign interest despite the indirect over-all American ownership. The more substantial the foreign corporation and the less substantial the domestic parent's domestic activities, presumably the greater the risk that such an interpretation might be asserted. In any event, we believe that in a criminal statute the exemption should be established in more specific terms. To summarize, we believe that the exemption from registration should be broadened by a narrower definition of the term "political activities." We believe that no public purpose is served by applying the broad requirements of the Act to ordinary representation of private foreign principals before Government agencies, in matters which are, in the true sense of the words, commercial and non-political, whether the person representing the foreign principal is a lawyer or not and whether the proceeding is formal or informal. A criminal statute which is as broad as the Act could become a trap for the unwary person unable to pinpoint, for example, the dividing line between seeking "administrative action on a matter where the basic policy is not in question" and seeking "decisions relating to or affecting departmental policy." S. Rep. No. 143, supra at 8-9. The requirement of registration would, of course, be considerably less onerous if the information to be supplied as required by the Act were less voluminous and registration hence made less burdensome. The extent of the information