On Thursday, Oct. 22, Republican Sen. Tom Cotton of Arkansas and Rep. Mike Gallagher of Wisconsin announced an act to force lobbyists working for Chinese companies to register as foreign agents. Called the Chinese Communist Party Influence Transparency Act, the act will be presented to the floor of both the United States Senate and the House of Representatives.
Enacted in 1998, the Foreign Agents Registration Act (FARA) requires “certain agents of foreign principals” who are engaged in political activities to register with the U.S. government and to periodically disclose the extent of their activities. Despite this, however, lobbyists working for Chinese companies are currently able to conduct their activities in the US. without informing the government due to certain loopholes.
Cotton and Gallagher’s new bill seeks to close these loopholes specifically to prevent them from being abused by lobbyists working for Chinese companies.
“This bill ensures companies subject to the direction of the CCP face appropriate disclosure standards and Americans better understand how our adversaries seek to use the swamp against us,” stated Gallagher.
CCP Influence Transparency Act to close two key loopholes in FARA
There are two exemptions in the FARA that allow operatives working for Chinese corporations to operate in the United States: the commercial exemption and the Lobbying Disclosure Act (LDA) of 1995 exemption.
The commercial exception allows lobbyists to not register under FARA if they are acting primarily in a “private and nonpolitical” manner in the service of a trade or a business. This exemption even allows these lobbyists to conduct political activities so long as they are done for a foreign corporation and solely for their direct benefit.
Passed by Congress in 1995, the LDA is described as being “far less burdensome” than FARA. Lobbyists working for foreign organizations are allowed to register as foreign agents under the LDA, thereby bypassing FARA entirely. (Related: House GOP introduces bill naming China top national security threat but Democrats won’t go along because Joe Biden, their candidate, appears compromised by Beijing.)
The commercial exemption does not allow lobbyists working for foreign companies to conduct activities that will directly promote the interests of a foreign government. Similarly, the LDA exemption does not cover lobbyists who register under the LDA but conduct work on behalf of a foreign political party or a foreign government.
Unfortunately, the distinctions provided by these exemptions are not as easy to determine given the nature of the Chinese economy, a large part of which is controlled by the state and by arms of the state. In fact, due to pressure initiated by Gallagher and Cotton, the Department of Defense publicly identified at least 31 Chinese firms who were either controlled or owned by China’s armed forces, the People’s Liberation Army.
“Chinese companies – particularly, powerful ones – are all arms of the Chinese Communist Party and remain ultimately under state control,” explained Cotton in a statement. “It’s time our laws recognize that reality. Our bill will close legal loopholes and force lobbyists for Chinese companies to register as foreign agents.”
“Even nominally private Chinese firms are not like normal companies,” added Gallagher in his own statement. “All Chinese firms, and especially those significant enough to register lobbyists in Washington, D.C., are subject to the extrajudicial direction of the Chinese Communist Party.”
Cotton and Gallagher’s new bill will prevent a lobbyist from a Chinese business – private or state-owned – from being covered by the commercial exemption. Neither will it let them be covered by the LDA even if they register under it.
Learn more about how Republican legislators are trying to fight back against the encroaching influence of foreign powers by reading the latest articles at Corruption.news.
Sources include:
Gallagher.House.gov 2 [PDF]
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