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Lobbyists for foreign governments have been dealing with a new Washington this year, as Democrats nowadays control the White House and both chambers of Congress.
Some countries’ agents are ramping up their efforts in the U.S. capital, while others are retreating.
One expert on the influence industry, Ben Freeman, recently spoke with MarketWatch about important trends that he’s spotting, as he tracks disclosures required by the Foreign Agents Registration Act (FARA) and much more.
He is the founder and director of the Foreign Influence Transparency Initiative at the Center for International Policy, a think tank in Washington, D.C. Freeman, author of “The Foreign Policy Auction,” earned a doctorate in political science at Texas A&M and previously worked for Third Way, another think tank, and the Project On Government Oversight, a watchdog group.
The Q&A below has been edited for clarity and length.
MarketWatch: What do you think are key things that the Biden administration has gotten right so far in terms of foreign lobbying?
Freeman: I’m sort of reassured, early on, by the Biden administration, maybe for all the reasons why I was a little peeved by the end of the Trump administration. Trump, for one, right at the end rescinded the ethics pledge that he had.
Biden on Day One comes in and institutes an ethics pledge of his own. Basically, folks can’t work on issues that they were lobbyists on within the past two years. Then after they leave the Biden administration, they have a two-year cooling-off period until they can lobby on any issues that they worked on in the administration. I’m a big fan of that, obviously.
He’s kind of dodged some bullets on political appointees. First and foremost, to me, is Michele Flournoy and that battle over who was going to become the secretary of defense. A lot of people just assumed it was going to be Flournoy, but there were a lot of other people, myself included, who had some reservations about her because of her time at CNAS [Center for a New American Security] and in her private consulting business [WestExec Advisors]. CNAS got an absurd amount of money from foreign governments and seemingly did a lot of work that at least on the surface appeared to be very beneficial to these foreign governments. So it looked kind of like doing the bidding of foreign powers, and then her consulting firm worked hand in hand with the biggest defense contractors ITA, -1.67% out there.
MarketWatch: What are some concerns that you have with the Biden administration so far?
Freeman: It’s hard to find appointees who don’t have at least a semblance of a conflict of interest. I’m applauding him for not appointing Michele Flournoy, but then Gen. Austin was on the board of a defense contractor himself. This is not somebody who’s devoid of these issues.
See: Biden to nominate Lloyd Austin as defense secretary
Also: Austin, a former general, wins Senate confirmation as U.S.’s first Black secretary of defense
My concern long-term with Biden is what happens when we all put our guards down a little bit. Do some of these folks make their way into the administration in 2022 or 2023?
MarketWatch: The new secretary of state, Antony Blinken, previously worked at WestExec Advisors, and there has been some buzz about how that firm doesn’t disclose that much about its clients because it’s a strategic consulting firm rather than a lobbying shop. Do you have concerns along those lines?
Freeman: Absolutely. To me, it’s hypocritical for people to be supportive of Blinken and critical of Michele Flournoy. I mean they were the heads of the same company, so whatever criticisms people were going to throw at Flournoy, they would have to throw at Blinken, too. He wasn’t at CNAS, but WestExec was their company together. I’m not a fan of that nomination.
It’s not a question of their capability to do these jobs. It’s just a question of how their previous role could potentially create conflicts of interest for the work that they’re going to do for the U.S. government.
Related: Did Trump drain the swamp? Watchdog gives him an F, while Biden starts with a C
MarketWatch: Which countries do you think will become bigger spenders in D.C. or will otherwise step up their lobbying efforts? Which nations might pull back?
Freeman: We’re already seeing some of this happen. Saudi Arabia is taking this really weird tack —starting post-Khashoggi, but it really didn’t kick into high gear until 2019 and into 2020. They kind of pulled away from D.C. a little bit. They haven’t fully gotten out of D.C., but they’re running almost like an Astroturf campaign out in Middle America.
Also: U.S. sanctions former Saudi official and ‘Tiger Squad’ in connection with Khashoggi murder
They’re contacting people from Portland, Maine, to Portland, Oregon. They’re talking to lobstermen unions. They’re doing a bunch of outreach to local synagogues in communities across the U.S. So they’re taking really a diffuse approach to lobbying in a way, because they were getting their hat handed to them in Congress, with everything that happened post-Khashoggi. They always had Trump there, but now they’re realizing with a Biden administration, that Biden’s not going to veto an arms-sale block for Saudi Arabia. They don’t have that veto in the White House anymore. So what we’re already seeing from them is they’re trying to whip up that grassroots support. They can do a bank shot to get leverage on members of Congress.
Other people that had problems with Trump are looking at the Biden administration as an opportunity.
The first one that comes to mind for me is South Korea. We just put out a report on them. Under Trump, they had all of these issues — Trump trying to get them to pay more for bases there, and Trump just kind of willy-nilly engaging with North Korea and cutting South Korea out of the pipeline.
So it seems like what South Korea is doing is trying to do more outreach to the Biden administration, perhaps seeing this as an opportunity to get back to a sense of normalization with the U.S. So I’d predict South Korea will invest a little more probably. Japan, too, for some similar reasons.
MarketWatch: Are there any sectors that you are tracking in particular this year, or are particularly important?
Freeman: It’s going to be very interesting what happens with tech XLK, +0.45%, specifically the social-media companies SOCL, -0.10%, when it comes to regulating disinformation, misinformation. It just seems like right now everything’s aligning for a push for Congress to do more on this. I think Democrats have always been a little more keen on acting on this.
See: What a Biden FCC means for social-media and internet regulation
Another industry that is really worth keeping an eye on is the defense industry. There are indications that we could actually get a defense-spending cut, if not this year, then in the next couple of years. There are real concerns among defense contractors.
Related: In his first military action, Biden orders airstrikes against Iran-backed militia in Syria
Ben Freeman is the founder and director of the Foreign Influence Transparency Initiative at the Center for International Policy, a think tank in Washington, D.C.
Center for International Policy
MarketWatch: What foreign-lobbying reforms do you think might become a reality with a new administration and new Congress?
Freeman: I’m really optimistic here, maybe irrationally optimistic, but H.R. 1 [a bill also known as the For the People Act] has a number of FARA provisions included in it. I’m hopeful some of that passes.
I think what’s most likely with FARA reform is that you would get a package. You wouldn’t just get one or two. You’d get this block of FARA reforms in a vehicle — if not H.R. 1, then something like that.
But the easiest fixes are fixes to the FARA website itself — the transparency component, making the website more user-friendly, digitizing everything, making all of the information more publicly accessible.
There have been so many people over the last four years who have signed on to legislation that that includes a civil-fines provision for FARA violations. Enough people have been supporting it in Congress, both in the House and Senate, that I think we can see civil fines passed.
MarketWatch: Do you think reduced travel and social-distancing due to COVID-19 have hampered people who lobby for foreign governments?
Freeman: Probably, yes. When we’re going over 2020 filings, we code whether it’s an email or do they get a phone call or is it an in-person meeting. The in-person meetings have kind of gone the way of the dodo. We’re seeing it empirically that lobbyists aren’t getting as many meetings. They’re not getting that face time, and I’m sure they’re not getting the happenstance face time either. They’re not bumping into each other at happy hours, at fundraisers, at dinners, any of that sort of stuff. People are having to rely more on their more established connections — people you have set relationships with. Those doors are all still open.
MarketWatch: What are some things that people misunderstand about foreign lobbying in Washington?
Freeman: One of the myths that we always try to dispel is that if somebody is registered under FARA, that they’re lobbyists. FARA registrants include everything from traditional lobbyists to public-relations folks. It’s fundraising even.
Very much related to that, I think it’s just such a misnomer for a FARA registration to be seen as a scarlet letter. The counterpoint to that is that the Dalai Lama is a registered foreign agent. The office of Tibet, specifically, is registered under FARA, and they’re registered under FARA because they do a significant amount of fundraising here in the U.S. There’s plenty of foreign agents that are doing good work, I think.
MarketWatch: What else do you think people ought to know about foreign lobbying right now?
Freeman: People are more aware of foreign lobbying, of FARA than they’ve ever been. There’s more interest in Congress now in reforming FARA. After 2016, everybody got interested but nobody actually did anything. There’s more opportunity to get it done now than there was before. This could be the year of reform.
MarketWatch: Will the reform happen this year or not until 2022 or 2023 after Washington addresses COVID relief and infrastructure?
Freeman: My sense of timing would be that this will be something that would happen in summer, or late 2021. COVID relief and getting through the pandemic — those are going to be the No. 1 priorities for sure. I’d be a little worried that if we don’t see action in 2021, we’ll lose our momentum and it just won’t happen again.
