A U.S. broadcasting firm is battling the Justice Department over demands to register as a foreign agent over ties to the Russian government after it sold air time on a Washington-area radio station to a Russian-backed news agency.
The Justice Department insists RM Broadcasting acted as “publicity agent” and “information-service employee” for Rossiya Segodnya by brokering the deal between news outlet Sputnik, run by the Russian news agency, and WZHF AM 1390 of Capitol Heights, Maryland.
Rossiya Segodnya agreed to pay an undisclosed sum to RM Broadcasting for Sputnik to be broadcast on WZHF 24 hours a day, seven days a week for a 20-month period starting Dec. 1, 2017, and ending Dec. 31, 2020, according to a contract filed in a federal court in South Florida.
The legal fight could test the limits of the Foreign Agents Registration Act (FARA), a law designed to shed a light on foreign governments and entities attempting to influence U.S. policy.
“The definition of a foreign agent under the statute is rather broad, and concepts like ‘agency’ under the statute are not well-defined,” said Tessa Capeloto, a Washington attorney who advises clients on FARA registration. “How the court ultimately comes out in this case will likely influence how the Department of Justice interprets ‘agency’ and ‘control’ in future cases.”
Under FARA, individuals or entities must register with the Justice Department if they work to promote the “public or political interests of a foreign government or foreign political party.” But there are exceptions if the actions are done to advance “a bona fide commercial interest” on behalf of a foreign company.
RM Broadcasting and its owner, Arnold Ferolito, say the Sputnik deal was a business transaction, and nothing in the terms of the deal rises to the level of lobbying or foreign government control of decision-making. In court papers, they deny allegations that Mr. Ferolito has ties to Rossiya Segodnya.
“The nature of the relationship between RM Broadcasting and Rossiya Segodnya is strictly in the nature of a contractual commercial relationship that does not form any agency relationship whatsoever,” wrote Nicole Waid, an attorney representing Mr. Ferolito.
The Justice Department responded to Mr. Ferolito’s lawsuit this week by arguing that the business relationship represents “control” under FARA because it “directly or indirectly” determines a person’s activities.
Mr. Ferolito has provided the Justice Department with copies of RM Broadcasting’s contract with Sputnik, but has refused to turn over all copies of communications, court records show.
Ms. Waid called the communications request “burdensome and unnecessary.”
Court documents show that RM Broadcasting was interested in promoting Sputnik. In a letter addressed to a company executive, Mr. Ferolito said he wanted to provide “proper PR and advertising opportunities.”
Neither Ms. Waid nor the Justice Department responded to requests for comment Wednesday.
FARA has been rarely enforced since it was enacted in 1938 to monitor Nazi efforts to curry U.S. support just before World War II. Between 1966 and 2017, the Justice Department prosecuted only five people for failing to register as a foreign agent.
But FARA charges have gained prominence in the past year, as special counsel Robert Mueller wielded it as a prosecutorial weapon to ensnare several high-profile Trump campaign officials.
The government has the authority to inspect a registrant’s books, records and contracts, but the law is murky on registration requirements.
“Whether or not registration is required under the statute is heavily fact specific and there are a number of gray areas under the law,” Ms. Capeloto said. “The fact that the statute is so broad and its terms are not well-defined gives both sides the opportunity to argue their case.”
Mr. Ferolito quarreled before with the Justice Department over FARA registration. In 2013, the Justice Department questioned him over the Voice of Russia, another Kremlin-backed radio network that had previously broadcast on 1390 AM.
Mr. Ferolito said in a 2014 interview with The Washington Post that the Justice Department “let the matter go” and he did not end up in the FARA registry, but did not provided any other details.