01 US department of justice FILE
New Orleans CNN  — 

The Justice Department will boost its pursuit of foreign influence operations, in part by appointing a prosecutor who worked on special counsel Robert Mueller’s team to lead a revamped unit that will crack down on unregistered foreign agents, the head of the department’s national security division said Wednesday.

The initiative at the Justice Department to pursue violations of the Foreign Agents Registration Act, which requires that an entity representing a foreign political party or government file public reports detailing the relationship, will be overseen by Brandon Van Grack, who left Mueller’s team in recent months to rejoin the national security division.

Van Grack’s appointment to the newly created position and the Justice Department’s interest in expanding its pursuit of foreign influence cases stemmed largely from the impact of Russian operations on the 2016 presidential election, John Demers, the head of the national security division, said Wednesday at a conference on white-collar crime.

With Van Grack’s new role, the Justice Department will shift “from treating FARA as an administrative obligation and regulatory obligation to one that is increasingly an enforcement priority,” Demers said.

He also pointed to the impact of a recent settlement with one of the country’s highest-profile law firms – Skadden, Arps, Slate, Meagher & Flom LLP – on the department’s decision to escalate its enforcement in that area.

In January, Skadden settled with the Justice Department, agreeing to turn over $4.6 million it had earned for 2012 work for Ukraine in connection with Paul Manafort, a former chairman of President Donald Trump’s presidential campaign, and to retroactively register as a foreign agent.

According to the settlement, a Skadden partner who has since left the firm – whom CNN has identified as former Obama White House counsel Greg Craig – gave false information to the firm about the work he had performed for Ukraine, and the firm repeated that information to the Justice Department’s Foreign Agents Registration Act unit, which resulted in Skadden avoiding having to register as a foreign agent when it should have been required to do so.

Mueller’s office had referred the matter involving Skadden to the Manhattan US attorney’s office, CNN has reported, and it was ultimately settled by the national security division at the Justice Department.

On Wednesday, Demers said law and lobbying firms and others should view the Skadden settlement as a wake-up call to revitalize their compliance practices.

“Fundamentally, the reason why the firm was on the hook is, after the firm got an inquiry from the FARA unit, it then went to the partner who was in charge of this matter and asked about the inquiry, and based on his representations then made a series of representations to the Justice Department that were not accurate,” Demers said.

“And when you think about the lack of due diligence that went into the work that was done before the representations were made to the department, and when you think about how different that is from what you would advise your clients to do … it’s really remarkable,” he said.

Speaking later to reporters, Demers added that the Justice Department is considering seeking congressional authorization for administrative subpoena power to enforce the Foreign Agents Registration Act, which it currently lacks.

“That’s something that we’re taking a hard look at,” he said. Referencing Skadden, he added: “Do I think the firm would have behaved differently if they had received a subpoena versus they had just received a letter? Yes.”