Does the attorney-client privilege apply to conversations between attorneys and filers concerning the contents of a Foreign Agents Registration Act (FARA) submission?
Based on recent FARA investigations, the FARA unit's answer is that, as to most (if not almost all) discussions between counsel and filers, the privilege is waived upon submission of a report to the FARA unit. So, while the FARA unit has increased the number of its advisory opinions and public speaking engagements to – apparently – encourage stepped-up compliance, the National Security Division (NSD), which houses the FARA unit, is, by applying an extremely narrow attorney-client privilege, discouraging open discussion between counsel and client over what should be contained in a report.
NSD's position is based, in large part, on Chief Judge Howell's opinion in In Re Grand Jury Investigation, 2017 WL 4898143 (USDC DC 2017), a case involving a number of FARA issues. The facts of In Re Grand Jury Investigation are the complicated ones of the Trump administration's attempt to influence the Ukraine government and Mr. Manafort's (and others') roles in seeking to have the U.S. government take positions favoring a particular Ukraine regime.
The particular language of the "Manafort" opinion forming the basis of NSD's legal position is:
Upon sending the FARA Submissions to DOJ, the Targets waived, through voluntary disclosure, any attorney-client privilege in their contents. White, 887 F.2d at 271; In re Subpoenas Duces Tecum, 738 F.2d at 1370; Permian Corp., 665 F.2d at 1219.
NSD buttresses its position that the attorney-client privilege is waived with regard to any communications touching upon information eventually submitted to the FARA Unit by pointing out that footnote 12 (from the quoted material, above) reads:
The government also argues that the attorney-client privilege never attached to the communications with the Witness reflected in the FARA Submissions in the first place because the Targets intended to disclose the information to DOJ from the outset. SCO Mot. at 1–2; SCO Suppl. Mem. in Supp. of Mot. ("SCO Suppl. Mem.") at 4, ECF No. 11; see In re Sealed Case, 877 F.2d at 979 & n.4 ("[D]ata that [a client] intends to report [to the IRS] is never privileged in the first place" so long as it does not "reveal directly the attorney’s confidential advice."); (Under Seal), 748 F.2d at 875; In re Grand Jury Proceedings, 727 F.2d 1352, 1356 (4th Cir. 1984); Naegele, 468 F. Supp. 2d 165, 170 (D.D.C. 2007). This "conduit theory" need not be addressed, as the SCO’s [Special Counsel Office’s] motion to compel is granted on alternative grounds.
Putting the court's opinion language together with the wording of the footnote, states the NSD, the waiver laid out by Chief Judge Howell is quite broad and is by no means limited to information otherwise contained within the "conduit theory." Apparently, the government takes the position that the language of In Re Grand Jury Investigation applies to all FARA-related inquiries (and, likely, to a broad range of, if not all, regulatory filings).
How would Justice's waiver policy probably apply to a set of typical FARA-filing related discussions? It appears Justice would come out on the attorney-client privilege issue as follows:
- There is no attorney-client privilege with regard to (a) communications relating to anything that has been submitted to the FARA unit, or (b) anything that the client has provided to his, her, or its attorney with the expectation that it will be submitted to FARA (even if it is not submitted).
- In other words, if client asks the attorney, "must I reveal "x" meeting?" and the attorney says:
- No. Then the communication is privileged, because the information is not submitted to the FARA unit, unless, of course, the client expected the meeting to be revealed to FARA when the client asked for the attorney's advice.
- Yes. The privilege does not exist; the information was submitted to the FARA unit.
- Yes, but state it "y" way. The privilege does not exist for the same reason.
It appears likely that the "expectation" reason for waiver of the attorney-client privilege is so easy for the government to allege and so difficult for an attorney to disprove that it may completely swallow the attorney-client privilege. This raises an interesting question – how does one determine a "reasonable expectation" that a client intended information to be filed with the FARA unit? The government will challenge any privilege log and, based on the description provided, allege client intent and, therefore, waiver of the attorney-client privilege.
How does this help with FARA compliance? This is, after all, the Foreign Agents Registration Act, a document widely held to be an opaque statute. In fact, FARA is perhaps one of the few statutes about which one can say, "I do my own taxes, but not my own FARA filings."
Underlying Chief Judge Howell's opinion, in addition to the difficult set of facts located in a political cauldron, is a dispute over the reason for the attorney-client privilege. Is it to foster communication between lawyer and client concerning, in part, an impervious statute so that compliance with the statute is encouraged? Or it is to draw as narrowly as possible an exception to the rule that the court is entitled to every person's evidence, now to include that of the person's attorney? In the Manafort case, Chief Judge Howell came down on the side of limiting the scope of the privilege, and the government is now pressing the enforcement potential this decision creates.
If Chief Judge Howell's opinion has the breadth the NSD says it does, then what are an attorney's obligations to a client when advising on FARA filings? Apparently, the private attorney's responsibility is to say, in the first conversation with the potential client, that it is probable everything the client says or writes, and potentially everything the attorney writes or says, with regard to filing a FARA report is discoverable by the government. If any attorney-client privilege exists, it is exceedingly narrow. (Work product remains subject, as to fact work product, to a showing of need.)
If there is any light remaining in the attorney-client privilege lantern in the FARA world, it may be extinguished by the threat of criminal behavior alleged by the government in grand jury proceedings involving reporting to regulatory bodies. Use of this allegation has been validated by In Re Grand Jury Investigation, where Chief Judge Howell uses a finding that the crime-fraud exception applied as a predicate, but separate holding, before deciding – so says the government – that the attorney-client privilege is waived with the filing of a FARA report.
So, even if there were an inclination for a private attorney to argue for the application of the attorney-client privilege, the counter from the government may be a crime-fraud exception claim. The fact of this allegation – regardless of success – will drive up enormously the cost of litigating an attorney-client privilege dispute. Simply put, unless a client has an almost unending river of money to pay for defense, the government wins, regardless of the merits of the attorney-client privilege claim or the underlying allegation of violating the FARA.
Gone are the days when the FARA unit would contact a filer and ask for clarification of a submission. Such a call would normally result in an open discussion with the FARA staff, leading to an amendment to the filing, a change in the filer's activities, or both. Occasionally, the matter would progress to the criminal side, but it appeared that broader compliance was achieved through these conversations than with criminal prosecutions. These open, relatively non-contentious discussions were removing the stigma of registering as a foreign agent, and encouraging filing and more and better disclosures.
Now, however, it appears that a considerable number of initial FARA inquiries are viewed first through the lens of criminal prosecution, with the burden on the filer to disprove the government's allegations. The current swing of the enforcement pendulum, while understandable, strongly suggests that an attorney's initial consultation with a potential FARA filer should begin with explaining to the client the government's position: the attorney-client privilege will be waived upon filing with FARA.