Menendez case signals new chapter for DOJ on foreign agent law

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A new federal charge against Sen. Bob Menendez (D-N.J.) purports he conspired with his wife and a New Jersey businessman to act as a foreign agent of Egypt — an unprecedented allegation marking the first time a sitting US senator has been accused of working on behalf of another government.

The superseding indictment is an escalation from federal bribery charges that prompted calls for Menendez’s resignation last month. The senior senator maintained his innocence in a statement to The Hill on Thursday, calling the new foreign agent charges “an attempt to wear someone down.”

Trying the case may also prove to be a test for federal prosecutors who have escalated enforcement action related to undisclosed foreign influence operations in the US.

“It is absolutely a signal to the public and to the advocacy community that the Department of Justice is not backing away from FARA enforcement,” said Josh Rosenstein, a member of Sandler Reiff Lamb Rosenstein & Birkenstock who specializes in Foreign Agents Registration Act (FARA ) compliance.

FARA has been in place since 1938 to compel disclosure of foreign propaganda and lobbying efforts. It is not illegal to lobby on behalf of a foreign government as long as the agent is registered and properly discloses under FARA — unless, of course, that agent is a public official.

Federal prosecutors in the Southern District of New York allege Menendez, who chaired the Senate Foreign Relations Committee before federal bribery charges prompted him to step down from his leadership role, used his influence to secretly aid the government of Egypt.

“Maybe it goes without saying, but members of the United States Senate — regardless of whether they register or not — are simply not permitted to be agents of foreign principles,” said Matthew L. Schwartz, a former federal prosecutor in the Southern District of New York who now focuses on white collar defense as managing partner of Boies Schiller Flexner.

“Their allegiance has to be to the United States,” Schwartz added.

In his Thursday statement, Menendez described an unwavering loyalty to the US throughout his life and career and said the charges contradict what he characterized as a record of challenging the Egyptian government on issues related to democracy and human rights.

The new charge cites a related statute that explicitly bars officials from actions that would trigger registration under FARA.

This is the first time the statute has been used, according to several FARA experts, underlying the unprecedented nature of the charge.

“There’s nothing I’m aware of like this where a sitting member of Congress is accused of working as a foreign agent,” Ben Freeman, a FARA expert and director of the democratizing foreign policy program at the Quincy Institute for Responsible Statecraft, told The Hill in a phone interview.

(One of the reporters who contributed to this story, Taylor Giorno, interned with Freeman between August 2021 and March 2022.)

The decision to charge the sitting senator with conspiracy to act as a foreign agent may mark the beginnings of a new FARA enforcement strategy, according to Rosenstein.

“If it is the case that the government will now start bringing conspiracy charges more frequently in the FARA arena, that may be the next salvo in basically the government’s attempt to enforce FARA because you do not need the same level of willfulness for conspiracy, you need an overt act,” Rosenstein said.

Rob Kelner, a Covington & Burling partner who runs the firm’s FARA practice, said it’s possible prosecutors chose to charge Menendez under an adjacent statute because the threshold for proving he “willfully” acted as a foreign agent is likely lower than with FARA itself.

That the DOJ didn’t originally bring a FARA-linked charge could indicate a disagreement among prosecutors as to whether their evidence met the necessary threshold, resulting in a compromise with the new charge Menendez, his wife and another co-defendant face, Kelner said. .

“As it is with many ‘white collar’ cases, it’s gonna be about proving what was in the mind of the defendant, whether it’s a question of whether they intended to fraud someone, or in this case, whether they were really acting as an agent of Egypt as opposed to having acted independently,” Schwartz said.

In a 2020 letter sent to John Demers, then assistant attorney general of the Justice Department’s National Security Division, Menendez argued the department should investigate potential FARA violations by a former member of Congress.

“The Act is clear that acting directly or indirectly in any capacity on behalf of a foreign principal triggers the requirement to register under FARA,” Menendez wrote in the letter.

In a second letter, sent in 2022, Menendez said “it is imperative that the Justice Department ensure he is held to account,” according to the indictment.

Experts say the letters demonstrate his grasp on the actions that would trigger registration under FARA. But Steve Roberts, a partner at Holtzman Vogel, pointed out that Menendez himself did not necessarily write them.

“You and I know how a Senate office works — the staffer writes the letter, signs the boss’s name, maybe the boss sees it, maybe he doesn’t,” Roberts said. “If Menendez saw that letter, then it shows that he knows what FARA is and was trying to lay it against others. But if I’m his lawyer, I might say he didn’t actually see this letter, this was just staff doing their job.”

In addition to the new foreign influence charge, Menendez, his wife and three New Jersey businessmen are accused of entering a “corrupt relationship” where Menendez traded his political sway for lavish bribes, including gold bars, “hundreds of thousands of dollars” and a luxury vehicles.

The indictment alleges Menendez passed nonpublic, “highly sensitive” State Department information about people serving at the US Embassy in Cairo to an Egyptian government official via his wife, Nadine Arslanian, and Wael “Will” Hana, one of the businessmen. It also asserts that the senator sought to use his political sway to disrupt a criminal investigation into Jose Uribe and the prosecution of Fred Daibes, the other two businessmen.

Menendez pleaded not guilty to the counts he faces and has repeatedly described the allegations against him as “baseless.” His wife and the businessmen have also pleaded not guilty to their charges.

An arraignment on the superseding indictment is scheduled for Wednesday afternoon in New York.

The new charge could complicate the government’s case, making it easier for defense attorneys to argue that Menendez was acting in what he believed to be the best interest of the nation and his constituents, Schwartz said.

But it also drastically alters the severity of the case, particularly from a political standpoint.

“Before, it was a political case in the sense that it was about a sitting US senator who was allegedly selling access and selling official action,” Schwartz said. “Now, the allegation is not only that he sold access and official action, but he sold it to a foreign government and he acted at the behest of the foreign government.”

Since the charges were announced, Menendez’s Democratic colleagues have urged him to resign from office, with fellow New Jersey Sen. Cory Booker (D) — a longtime friend and ally — last month calling his choice to remain in the upper chamber a “mistake.”

On Thursday, Sen. John Fetterman (D-Pa.) called on the full Senate to vote on a resolution to expel Menendez from the chamber in the wake of the new charges.

Menendez has faced federal corruption charges before; in 2015, he was accused of accepting gifts and trips from a donor. However, those charges were dropped in 2018 after a jury failed to reach a verdict.

The FARA office has also weathered some recent high-profile losses.

Last October, a federal judge dismissed the Justice Department case against casino mogul Steve Wynn trying to compel him to register as a foreign agent of China.

Another prominent case against then-Brookings Institution President John Allen, a retired four-star Marine general accused of secretly lobbying on behalf of Qatar, was dropped earlier this year.

But the department did score a win this spring when former Fugees member Prakazrel “Pras” Michel was convicted of 10 charges, including failure to register as a foreign agent of China.

The agency has precipitously increased FARA prosecutions in recent years.

The Justice Department brought just seven criminal FARA cases between 1996 and 2015, according to a 2016 report by the Office of the Inspector General.

Since then, Freeman estimates more than twenty people have been indicted on FARA-related charges.

“By the numbers, [FARA] enforcement is way up, and as this case makes clear, they’re willing to go after the biggest fish in the DC swamp,” Freeman said.

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