Transcripts For CSPAN3 Justice Department Officials Testify

Committee, this is an hour and a half. Today the committee will examine the Justice Departments enforcement of a Foreign Agents registration act. I want to thank the witnesses here today for working with the committee to schedule this hearing. I know that some of you even had to change your travel plans and i want you to know that the committee appreciates your cooperation. We had to postpone this hearing while trying to schedule two new witnesses and obtain the cooperation of a third who was first invited on july the 5th. It is unfortunate when uncooperative witnesses cause unnecessary inconvenience for those of you who are easy to work with. After a failed negotiation with the committee to, in good faith, i issued a subpoena with in the cooperation with senator feinstein to Glenn Simpson for his appearance today. I withdrew the subpoena after mr. Simpson agreed to a transcribed staff interview about, number one, his involvement in creating the trump dossier and, number two, his alleged work with the unregistered Foreign Agents who met with the trump family and campaign officials. Regarding mr. Manafort, negotiations for a similar agreement that Ranking Member feinstein and i were working on with him and i issued a subpoena for his appearance. On tuesday night, following consultation with the Ranking Member and a document production from mr. Manafort, i withdrew the subpoena and we continued negotiations for a future transcribed interview. With respect to mr. Trump, he agreed early on to cooperate, produce documents and do a voluntary transcribed interview. So no subpoena was necessary in that case. So these three, then, will not appear on panel two today. Todays topic as important now as it was in 1938 when congress enacted the law. There are two qualifications to be considered a Foreign Agent under the Foreign Agents registration act. The first is working directly or indirectly for a foreign principal. A foreign principal can be a Foreign Government, Political Party, corporation or a single individual. The second requirement is involvement in a political activity to influence u. S. Policy either as a publicity agent or a lobbyist among others. The basic idea is that foreign propaganda should not lurk in the shadows but should be fully transparent. The Foreign Agents registration act does that by requiring agents to register with the Justice Department. People should know if Foreign Governments, Political Parties or other foreign interests are trying to influence u. S. Policy or Public Opinion. Given recent russian and other efforts to influence our elections, this law has never been more important. Unfortunately, it appears that the Justice Department and the fbi have been seriously lax in enforcing the Foreign Agents registration act and for a long time. In the past 12 years the department has only sent 178 letters to people it believes should register as a Foreign Agent. Thats only 15 letters a year. Now, compare those 15 letters with what the Justice Department thinks that i send they happen to think i send more oversight letters than that in one week. Only nine people in the entire Justice Department work full time to enforce this law and monitor potential unregistered Foreign Agents. Its no surprise, then, that only 400 Foreign Agents are currently registered. Does anyone here seriously think that only 400 people in the whole United States take foreign money for pr and lobbying work . The Inspector General said the fbi investigators and Justice Department officials cant even agree on what makes a good case for enforcement of this law. It is then no surprise that the Inspector General found that there is no comprehensive Department Enforcement strategy on fara, thats the acronym for the law. Between 1966 and 2017 the Justice Department brought only seven criminal fara cases. So listen to this, it has been 26 years since the Justice Department used civil injunction relief to enforce this law. Now then why comply when the Justice Department clearly doesnt treat this law as a priority . In an april, 2015 letter to then attorney general holder i wrote about Sidney Blumenthals efforts. News articles reported that mr. Blumenthal transmitted documents to secretary clinton on behalf of a Political Party in the country of georgia the Justice Department never explained why they thought he didnt need to register. If they didnt think it required registration, it should say so particularly when the Trump Administration has required Lieutenant Governor Michael Flynn to retroactively register under the law in large part because he wrote an oped for the hill newspaper. The administration also requires Paul Manafort to register for their work on behalf of the ukrainian government. Recently theres been a lot of reporting about other unregistered Foreign Agents attempting to influence u. S. Policy. For example, a group of unregistered russian agents allegedly worked to undermine the magnitsky act. That 2012 act was passed in honor of Sergei Magnitsky who uncovered massive financial fraud in russia involving corrupt russian government officials and organized crime. He was then arrested by the same corrupt officials and later died in russian prison under suspicious circumstances. The magnitsky act allows the president to sanction individual human rights abusers and freeze their assets in the u. S. The law was passed through a tireless effort of William Browder who will testify here today. Mr. Magnitsky was mr. Browders lawyer and friend. In 2016, mr. Browder filed a complaint with the Justice Departments fara enforcement unit. He alleged that a group of unregistered agents were working on behalf of the russian government to get rid of the law named after his late friend. He said these unregistered agents lobbied congress. He said they organized a screening of a propaganda video with hill staffers and state department officials. The propaganda video smeared mr. Magnitsky and mr. Browder. What this video represents is a pretty cute operation, the Foreign Agents also published propaganda to news outlets trying to get bogus stories published by respectable organizations, as we learned after this hearing was scheduled, they apparently lobbied the Trump Campaign and the trump family. Yet the Justice Department didnt require any of them to register as Foreign Agents. One individual identified as mr. Browders complaint is glen simpson, founder of fusion gps. Since march 2017 ive been asking about the russians who were working with fusion gps to smear mr. Browder and undermine the magnitsky act. Mr. Simpsons company, fusion gps, is the same firm that oversaw the creation of the unverified trump dossier. Around the same time, fusion also helped orchestrate a campaign to repeal the magnitsky act for the benefit of russian governments. There are public reports that the fbi used the dossier to kickstart its russian investigation. Did the fbi know that fusion pitched propaganda for the russians even as it pushed the dossier . What would they say about its reliability if the dossier was presented to any court should this fact have been disclosed . Two other individuals identified in mr. Browders complaint have been in the news a lot lately, the first is a russian lawyer who represents prevesan holdings, her name natalia veselnitskaya, as you know, well just refer to her as russian agent x, y, z or something. [ laughter ] [ laughter ] prevesan is a Russian Company that received millions of dollars connected to crime for mr. Magnitskys uncovering. Another russian american lobbyist, the New York Times recently decried him as a master of the dark arts. These two were reportedly at a meeting with the trump family and made a pitch to get around the magnitsky act. Was it a clumsy baitandswitch effort in their unregistered Propaganda Campaign . Hopefully well get answers from mr. Trump and mr. Manafort on that point we will pursue details about the creation and circulation of the dossier that started this whole controversy knowing exactly who was acting on behalf of the russian government is vital to get to the bottom of russian influence in our democratic system, that is why fara must be enforced consistently and even handedly. In other words, it wont be taken seriously. I look forward to discussing with the witnesses additional steps to better enforce fara and now its my pleasure to turn the table over to my Ranking Member. Thank you very much, mr. Chairman. Thank you for bringing everybody up to date on our discussion on the witnesses that were on the schedule here but are not at the present time. I think thats very helpful, so thank you. Sure. Ladies and gentlemen, the Foreign Agents registration act or what our chairman correctly said is called fara is really an important issue, particularly at a time when we face unprecedented interference in our democratic processes by a certain country, namely russia. Fara was enacted in 1938, it was enacted to ensure the public was aware of efforts by the German Government and the nazi party to use a network of United States citizens and firms to sway Public Opinion and United States policy in germanys favor. The law requires any individual working on behalf of a Foreign Government or foreign interests to register with the department of justice. It doesnt prohibit lobbying or other Political Activities but it require disclosure when those activities are directed by foreign interests. Long overlooked, fara has received renewed attention in the past several months because of the high profile cases involving former National Security adviser Michael Flynn who registered retroactively for work that he had done for the turkish government at the same time he was advising the Trump Campaign. Former Campaign Manager Paul Manafort also registered in 2017 for nearly 17 million for lobbying work on behalf of the prorussian party of regions in ukraine between 2012 and 2014. Unfortunately, late registrations under fara are not a new problem nor are they limited to these two examples. In september of 2016, the Justice Department ig reported that 62 of the registrations that it had reviewed had been filed late. 50 were incomplete. Ill let you draw your conclusions from that. My conclusion is that our authorities dont take the law seriously and we need to change that. There appears to be no meaningful penalty for late or incomplete filings and over the past 50 years the Justice Department has prosecuted only seven fara cases. Instead, where violations are discovered, the department encourages compliance, creating a system where there are no consequences for failing to follow the law so i look forward to hearing from our Witnesses Today about whether and if what changes should be made and whether the current law is adequate so once again i thank you for solving our problems with the other witnesses and i look forward to the testimony. Thank you, mr. Chairman. Well, we sides your thanking me, youve been very cooperative and appreciate it very much. Thank you. Im going to introduce the witnesses and then ask you to stand and be sworn. Adam hickey is Deputy Attorney general for National Security division, doj. He manages the National Security divisions efforts to combat National Security threats from 2013 to 2015 mr. Hickey was the acting deputy chief of cyber for the counterintelligence and export control section of the National Security division. Mr. Hickey was also a federal prosecutor. Thank you for being here. Mr. Priestap is an assistant director for the Counterintelligence Division at the fbi. He previously served as Deputy Assistant director of Intelligence Operations Branch in the directorate of intelligence at fbi headquarters. He has worked at the fbi since 1998. Thank you for being here. Michael horowitz has been a frequent witness before our committee, is an Inspector General for the Justice Department. He was confirmed april, 2012, and oversees a nationwide work force of more than 400 employees. Immediately preceding this post he was in private practice and also previously worked for the Justice Departments criminal division. This mission is to promote economy and efficiency and deter waste fraud and abuse in the department of justice. We thank you for being here and would you stand now at this point so i can ask you to do your do you affirm the testimony youre about to give before the committee will be the truth, the whole truth and nothing but the truth so help you god . They all affirm mr. Hickey would you start out and well go to mr. Priestap and then to mr. Horowitz and then well have fiveminute rounds for questioning. Good morning chairman grassley. Ranking member feinstein and distinguished members of the committee. Thank you for providing me the opportunity to testify on behalf of the department of justice concerning the Foreign Agents registration act. The department appreciates the committees interest in fara. I know the committee already has my written testimony so i wont repeat it here. Ill cover a few key points about the law and its background how we enforce and administer it and how theyve responded to last years report by the Justice Departments Inspector General. Fara is a disclosure statute that requires persons in the United States who engage in specified activities as agents of foreign principals to register with the department. The acts purpose is to ensure the American Public and our lawmakers know the source of information that is provided at the behest of a foreign principal where that information may be intended to influence u. S. Public opinion, policy or laws. The statute finds you must register with a Foreign Agent. It exempts certain types of Foreign Agents from the Registration Requirements and among other things it requires agents to preserve their books and records and make them available for inspection. Because fara is designed to encourage transparency in public speech and Political Activities, not to discourage that speech and activities, it differs somewhat from other provisions of the criminal code such as those that punish espionage and other clandestine conduct. Instead of prosecution, the primary means of achieving that transparency is by encouraging voluntary disclosure in compliance with the act. The department will, of course, approve criminal prosecutions under fara if theres sufficient admissible evidence of a willful violation of the statute. But the high burden in proving willfulness and exemptions available under the statute make criminal violations for fara difficult. Its handled by dojs National Security divisions fara unit. A regular part of the fara units work is attempts to identify people who may be subject to fara but not registered. If credible information suggests that the individual should register under, the fara unit will send an individual