[Congressional Record Volume 141, Number 6 (Wednesday, January 11, 1995)]
[Extensions of Remarks]
[Pages E80-E81]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 INTRODUCTION OF H.R. 452, THE ``FOREIGN INTEREST REPRESENTATION ACT''

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                      HON. JAMES A. TRAFICANT, JR.

                                of ohio

                    in the house of representatives

                      Wednesday, January 11, 1995
  Mr. TRAFICANT. Mr. Speaker, every year, foreign interests spend 
hundreds of millions of dollars to influence the American Government. 
They employ topnotch lobbyists, many of 
[[Page E81]] whom are former U.S. Government officials and staff, to 
present their case in Washington. Meanwhile, our free trade policies 
have literally opened the doors to foreign investment, while an archaic 
law allows agents of foreign governments to work in secrecy.
  The Foreign Agents Registration Act [FARA] of 1938 requires foreign 
agents to disclose their connections with foreign governments, foreign 
political parties, and other foreign principals to the Foreign Agents 
Registration Unit at the Department of Justice. However, according to 
General Accounting Office [GAO] reports, FARA is plagued by unclear 
language as to who is required to register, weak investigative and 
enforcement provisions, and loopholes.
  GAO's July 1990 report entitled, ``Foreign Agent Registration: 
Justice Needs to Improve Program Administration,'' finds that only 775 
foreign agents--out of thousands--actually bothered to register under 
FARA. Since the 1990 report, neither the Justice Department nor 
Congress has rectified this breech of security. As a result, I have 
introduced H.R. 452, the Foreign Interest Representation Act.
  The GAO report found several problems with current law:
  The Foreign Agent Registration Act was originally enacted to target 
Nazi and Communist propaganda in the 1930's and 1940's. The term 
``foreign agent'' was originally used to identify foreign principals in 
America who were spreading foreign propaganda and organizing political 
activities. With the end of the cold war, however, the emphasis has 
shifted from political propaganda to free trade and the global economic 
competition. FARA, however, remains unchanged. Thus, many individuals 
and law firms representing foreign interests are exempt from 
registration under the act.
  My bill, H.R. 452, substitutes ``representative of a foreign 
interest'' for ``foreign agent,'' thus broadening the definition and 
closing a loophole. Likewise, the term ``political propaganda'' has 
been dropped in favor of ``promotional or informational materials.'' 
Several other term substitutions were made in this manner.
  FARA provides certain exemptions to registration including commercial 
activities. Moreover, representatives of foreign interests are not 
required to notify the registration unit to claim an exemption. As a 
result, it is difficult for the unit to determine who should and who 
should not be registered.
  Under H.R. 452, any person who engages in political activities for 
the purpose of furthering the commercial, industrial or financial 
operations of a foreign interest would no longer be exempt. In 
addition, representatives of foreign interests will now be required to 
notify the Attorney General.
  Furthermore, H.R. 452, establishes a test to determine what 
constitutes foreign control. Entities that are more than 50 percent 
foreign owned would be
 presumed to be foreign controlled and required to register. Entities 
with 20 to 50 percent foreign ownership would also be considered 
foreign controlled, but the presumption could be rebutted with 
evidence. Less than 20 percent foreign ownership would not require 
registration. Both provisions help to clarify the law and will lead to 
an increase in registration.

  Timeliness of foreign agent registration and reporting remains a 
problem. Of the 28 registration statements reviewed in the GAO report, 
a whopping 68 percent had not registered on time.
  Currently, registrants must submit updated disclosure forms every 6 
months after the initial registration. This system has made it almost 
impossible to know who is registered and whether the registration is 
up-to-date. H.R. 452 requires follow-up registration forms to be filed 
in January 30 and June 30 of each year. The Justice Department, 
however, would be given the authority to waive this provision, on a 
case-by-case basis, for entities whose fiscal year does not follow the 
calendar year.
  Finally, harsh criminal penalties under FARA are another reason the 
Justice Department has shied away from enforcement of the act. Under 
H.R. 452, any person who has failed to file, has omitted facts, or has 
made a false statement regarding the facts, will be fined a minimum of 
$2,000, up to $1,000,000, depending upon the nature and duration of the 
violation. Furthermore, the Justice Department would be given the 
authority to subpoena individuals for testimony and records.
  The bottom line is, the American people have a right to know who is 
getting paid by foreign interests to influence the U.S. Government. If 
you support an end to secrecy through uniform reporting and penalties 
for noncompliance, I urge you to cosponsor H.R. 452, the Foreign 
Interest Representation Act.


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