The NSW government may have broken a US counterintelligence law by failing to register an employee as a foreign agent working for the its New York trade office.
Crikey can reveal an employee at the New York office — the same one that John Barilaro was initially hired to lead — worked for several months without having been registered under the US Foreign Agents Registration Act (FARA).
It is not suggested the employee did anything wrong. But the government may have failed in its obligation to register the employee as a foreign agent within 10 days of hiring them. US Justice Department documents show NSW did not register the employee, who started working on August 8 last year, until two weeks ago.
“The rules require you update your registration within 10 days of a change occurring,” Craig Engle, partner at the Washington DC law firm ArentFox Schiff, told Crikey.
“If a registrant does not put a person on the record within 10 days then technically that person is acting as a foreign agent without previously having been registered.”
The NSW Department of Enterprise, Investment and Trade (DEIT) said: “The department recognises the importance of its obligations under the US Department of Justice’s Foreign Agents Registration Act (FARA) and updated its records by filing a registration statement as soon as it was appropriate to do so.
“The US Department of Justice has not raised any concerns to DEIT about its reporting.”
The US documents show the employee earns a salary equivalent to about A$180,000 and is “responsible for building and maintaining bilateral relationships with US government officials and business leaders for the promotion of trade and investment opportunities in New South Wales”.
The employee participated in a NSW networking event at a private club in Las Vegas in October, documents show, and also joined a four-person team earning a combined A$961,000.
The FARA documents also show the NSW government waited until February to tell the US government that ex-DEIT secretary Amy Brown had resigned. Brown, who was also chief executive officer of the US company that the NSW government set up to establish the New York office, stepped down from the public service in September.
Engle said it wouldn’t matter much, from the perspective of the US, that that declaration was made late: “There is little harm in failing to unregister a person within 10 days of their leaving service because that person is no long engaged in any activity.”
He added it was a “common mistake” among foreign registrants to update their FARA papers every six months, rather than within the 10-day deadline.
The company the NSW government established — NSW Government US Office, Inc — is a non-profit, non-stock corporation based in Delaware, which has beneficial regulations for companies. It leases a 103.7 square metre office on the 34th floor of an office tower near the Chrysler Building in midtown Manhattan, in the same premises as the consulate-general of Australia.
The FARA rules were described by a top FBI official in 2017 as a “a valuable tool for today’s counterintelligence efforts because … it requires a person acting in the United States at the direction of a foreign principal to disclose this relationship, subject to certain conditions”.
The law was considered “obscure” and rarely enforced until special counsel Robert Mueller used it to crack down on former Trump campaign chairman Paul Manafort after the 2016 US election.
In cases where FARA missteps have reached US courts, registrants have often provided false and misleading information, rather than mistakenly filing documents too late.
The US Justice Department says in an explainer on its FARA website that possible consequences for late filings include the risk the registrant could be prohibited from acting as a foreign agent.
“The Department of Justice could also seek an injunction to order compliance with FARA … or pursue criminal charges … if the failure to file is wilful,” it says.