WASHINGTON — Billionaire businessman Tom Barrack is facing criminal charges that are typically described as "illegal foreign lobbying," or violating "foreign lobbying" laws.
But the federal statute under which Barrack was charged, Section 951 of the U.S. Criminal Code, is used by the Justice Department to prosecute spies, not lobbyists. Which means this case is really about national security.
The founder of Colony Capital and a close friend of former President Donald Trump, Barrack was arrested last Tuesday and charged with operating as an agent of the government of the United Arab Emirates without notifying the Justice Department.
Barrack was also charged with conspiracy, obstruction of justice and lying to federal agents.
He made his first court appearance Monday, where he pleaded not guilty and was released on a $250 million bond.
Barrack will live at his home in Aspen, Colorado, while he awaits trial. His movements will be monitored by an electronic ankle bracelet and GPS.
Legal experts who have read the indictment said the case against Barrack could have serious implications for national security.
It also raised new questions about how foreign governments may have taken advantage of Trump's preference for conducting foreign policy through opaque back channels.
Prosecutors allege that starting in April 2016, Barrack and Matthew Grimes, a junior employee at Colony Capital, conspired with Emirati national Rashid Sultan Rashid Al Malik Alshahhi to leverage Barrack's access to Trump in order to carry out directives they received from top Emirati government officials.
As an informal advisor to the Trump campaign, transition and White House on Middle East issues, Barrack used his trusted position to recommend the UAE's desired policies, allow Emirati officials to edit talking points that he then passed to Trump, and advise the White House to pick UAE's desired candidate as the U.S. ambassador to the Gulf state consortium, prosecutors said.
According to emails and text messages contained in the indictment, Barrack also passed intelligence via Al Malik back to UAE government officials about internal discussions taking place in the White House.
Barrack and Grimes were arrested in California. On Monday, they appeared before a judge in a Brooklyn courtroom of the Eastern District of New York, which is prosecuting the case.
Following his court appearance, Barrack issued a statement saying: "Of course I am innocent of all these charges and we will prove that in court."
Still at large
Al Malik is still at large. He reportedly returned to the UAE in 2018, three days after he was interviewed by the FBI as part of special counsel Robert Mueller's Russia probe.
Trained as a pilot, Al Malik was in Los Angeles purportedly looking for real estate investments during 2016-17.
His Dubai-based real estate fund has neither a website nor a physical address. It does not appear to have closed any deals in the United States.
But there could be a good reason for this.
In 2019, The Intercept news site reported that Al Malik had been on the payroll of the National Intelligence Services of the UAE, which reportedly paid him tens of thousands of dollars a month in 2017 to gather information on the Trump administration.
At the time, the White House referred questions from The Intercept about Al Malik to the CIA.
Two kinds of 'foreign agents'
Part of the reason Barrack's actions are often described as illegal lobbying is because the language of Section 951 is similar to language of another law, the Foreign Agents Registration Act, or FARA.
They both apply to people working on behalf of noncommercial foreign entities, and they both contain disclosure requirements. But they cover very different actions.
FARA is a regulatory reporting rule that applies to anyone representing a "foreign principal." This can be a government, but it can also be a nonprofit, a tourism board, a political party or an independent agency.
In order to comply with FARA, lobbyists are required to submit copies of any media they distribute, like brochures, and to disclose who they contact and how much they are being paid.
"Typically, if you are not complying with FARA and you're working for a foreign country, you can come back into compliance by reporting everything you are doing and filing the paperwork you were supposed to file," said Brett Kappel, a Washington attorney and expert in lobbying and influence laws.
Think of it this way: The FARA statute is concerned primarily with what specific work a lobbyist is doing for the foreign client. Section 951, on the other hand, is focused on whom the agent is doing it for: a foreign government.
For prosecutors, "charging 951 is the alternative to indicting them under the Espionage Act," said Michael Atkinson, inspector general of the Intelligence Community from 2018-20.
Section 951 cases "generally involve espionage-like or clandestine behavior or an otherwise provable connection to an intelligence service, or information gathering or procurement-type activity on behalf of a foreign government," a Justice Department inspector general wrote in a 2016 audit of FARA enforcement.
Convictions under Section 951 carry a maximum sentence of 10 years in prison.
The spy cases
The origins of Section 951 predate those of the FARA rules, tracing back to the early years of World War I. While the United States was debating whether or not to join the Allied war effort in Europe, Imperial Germany waged a covert influence campaign on U.S. soil, aimed at weakening public support for the war.
The effort failed, but it shocked American officials. In 1917, Section 951's precursor was enacted as part of the Espionage Act.
A century later, Section 951 is still being used to prosecute covert foreign agents. Several high-profile cases involving Russian spies have been charged under Section 951 during the last decade.
In 2010, the FBI arrested 10 Russian nationals across New Jersey, New York and Virginia, and accused them of living in the United States illegally, some for more than a decade, and posing as Americans in order to gather intelligence on behalf of Russia's intelligence service, the SVR.
One of the spies, Anna Chapman, briefly gained notoriety as a TV personality.
They were charged with conspiring to violate Section 951, and they pleaded guilty shortly before they were sent back to Russia as part of an international prisoner swap.
In 2012, Russian Alexander Fishenko and several accomplices were charged under Section 951 for operating a front company that bought around $50 million of high-tech U.S. military equipment and shipped it to Russian defense contractors.
Fishenko pleaded guilty in 2015 to 19 counts, and he was sentenced to 10 years in prison.
In 2016, another Russian national, Evgeny Buryakov, pleaded guilty to violating Section 951 after he was arrested for secretly working on behalf of the Russian intelligence service, the SVR, while posing as a development banker in New York.
Buryakov was sentenced to two and a half years in prison, but he was granted early release and deported in 2017.
In 2018, Maria Butina, also from Russia, pleaded guilty to conspiracy to violate Section 951 after she was indicted for trying to infiltrate conservative political organizations, most notably the National Rifle Association, on behalf of the Russian government.
Butina was sentenced to 18 months in prison and she was released and deported in late 2019.
Section 951 prosecutions tend to have a high success rate in court. None of these defendants avoided prison, although an international prisoner swap meant the Russians involved in one case did not serve out their sentences in the United States.
Yet if the objective of these Russian spying operations was to infiltrate the halls of power and gain access to state secrets, they all failed.
The members of the 2010 spy ring never made inroads in the national security and economic circles they'd hoped to.
Fishenko purchased his military equipment over the counter.
Buryakov walked right into an undercover FBI sting.
And the farthest Butina ever got to real power was a meeting with a Treasury Department official.
But this only serves to make Barrack's level of influence, wealth, trust, and direct access to Trump and the Emirati royal family look all the more extraordinary.
Barrack's reach
As the former chair of Trump's inaugural committee and one of his most successful campaign bundlers, Barrack used his unique advantages to accomplish concrete goals for the UAE.
In the fall of 2017, Barrack and Al-Malik collaborated to scuttle plans for a future summit at Camp David between American, Emirati, Saudi and Qatari officials, aimed at ending a regional blockade of Qatar.
The UAE opposed the summit, and prosecutors describe how Barrack sent an email to Trump's personal assistant, asking to speak to the president. It's unclear from the indictment whether Barrack ever spoke to Trump. But the summit did not take place.
Barrack's case hints at the relative ease with which individuals close to Trump could influence his direction on major policy issues.
"This information flow is going both ways," said Kappel, the D.C. attorney. "Barrack is surreptitiously providing the U.S. government with information that the UAE wants the government to hear, but he's also providing back to the UAE confidential information about what he learned was going on within the federal government."
Kappel added: "And he was providing that information through an individual who was on the payroll of a foreign intelligence service."
Atkinson, now a partner at Crowell Moring, said the two-way information flow back and forth from Abu Dhabi helps to make Barrack's arrangement different from traditional lobbying work for foreign principals.
"I think that's one of the reasons why they chose 951 is because you have both pieces, trying to influence U.S. foreign and domestic policy, and sharing information back with a foreign government," he said.
Kappel, who is of counsel at Harmon Curran, said Section 951 draws a bright red line through a sometimes murky world of Washington influence peddling.
"What Section 951 does, really, is divide the world into diplomats and spies: Diplomats present their credentials and they are officially recognized as representatives of a foreign government. And that's what you're supposed to do if you are representing a foreign government," he said.
"The prosecutors may not be able to prove espionage, which has a very high bar," he said. "But they can prove this person was operating under the direction of a foreign government, and did not inform U.S. authorities that they were in this role."
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