Did Sid Blumenthal Violate Foreign-Lobbying Law?

Clinton consigliere Sidney Blumenthal’s now-notorious e-mails to Hillary Clinton on Libya could constitute a criminal violation of U.S. foreign lobbying laws. According to several experts, if his business and intelligence ties with Libyan interim government officials were as extensive as evidence suggests, Blumenthal’s repeated communications to America’s top diplomat broke a federal criminal statute requiring the registration and reporting of foreign agents engaged in lobbying foreign officials.

“I think there is both smell and smoke,” says Elliot Berke, a Washington D.C. lawyer who works regularly on cases involving the Foreign Agents Registration Act (FARA).

Designed to prevent U.S. officials from being unwittingly influenced by representatives of foreign governments, the law requires individuals to do more than simply identify themselves as foreign lobbyists. “FARA doesn’t just require registration,” says Berke. “It requires ongoing reporting of specific contacts and the labeling and filing of information like memos with the Justice Department within 48 hours of dissemination.”

But the “confidential” intelligence memos on Libya that Blumenthal sent to Clinton starting in early 2011 raise questions about his compliance with FARA. Two of these memos in particular — both of which were passed on by Clinton to State Department subordinates — cast doubt on Blumenthal’s recent claim that he acted only as “a private citizen and friend” providing “interesting or useful” information.

A memo sent on April 8, 2011 claims that the Libyan National Council — then acting as a kind of transitional government in opposition to the crumbling Gaddafi regime — was considering hiring private-security firms to train and organize rebel groups. Blumenthal’s sources claimed that a number of Libyan officials believed “this solution may be best for the rebels.” Clinton read the memo with interest, forwarding it to her subordinate Jake Sullivan and telling him “the idea to use private-security experts to arm the opposition should be considered.”

E-mails leaked by the hacker Guccifer and published by Gawker reveal Blumenthal’s pecuniary interest in the hiring of foreign-security contractors. They show Blumenthal helping advise and facilitate the work of Osprey Global Solutions, an American private-security firm that was in the process of being hired by the transitional Libyan government when the memo was sent in April.

A May 2011 e-mail shows Blumenthal working to secure $60,000 from longtime Clinton operative Cody Shearer in order to send four Osprey security contractors into Libya. By August, Osprey had signed a contract with the Libyan National Council, which took over the country following the Gaddafi regime’s collapse.

In another early 2012 memo widely distributed by Clinton in the State Department, Blumenthal’s sources tout the expertise of Najib Obeida, a Libyan stockbroker hired by the transitional Libyan authorities to advise on economic issues. The memo calls Obeida one of the “most influential” advisors to the new regime, suggesting that he is crucial to the government’s (ultimately unsuccessful) plan to stabilize the country in the face of rising militia activity.

“Where and for whom the contacts were placed would have to be established. But what is clear is that some people will do anything for a dollar.”

— Amos Jones

Left unsaid is that, at the time of the memo, Blumenthal’s business partners at Osprey were actively courting Obeida in a bid to secure the businessman’s funding for the company’s prospective ventures in Libya. In fact, just one day earlier, the head of Osprey sent an e-mail to a top Clinton aide at the State Department requesting a meeting with Obeida and U.S. officials to discuss the project. That e-mail was not immediately answered.

Without knowing the intimate details of Blumenthal’s business dealings in Libya, FARA experts cannot say the memos he sent to Clinton constitute a smoking gun. “It is not quite obvious that this kind of contact would require registration,” says Amos Jones, another D.C. lawyer with ample FARA experience. “Where and for whom the contacts were placed would have to be established. But what is clear is that some people will do anything for a dollar.”

In passing on information obtained by sources in the Libyan transitional government to the secretary of state — especially when that information appeared to serve in both his and their economic interest — the experts worry that Blumenthal may have failed to properly identify himself as the representative of a foreign government’s perspective. The same holds for his, or his partners’, business relationships with Libyan officials like Obeida.

“FARA requires the lobbyist to identify himself as a foreign agent on behalf of his foreign principal, and to label all informational material he disseminates accordingly,” says Berke.

Emphasizing the reasoning behind FARA’s transparency and disclosure requirements, another expert adds that he believes Clinton “would NEVER have circulated Libya-related e-mail messages from Sidney Blumenthal if there were reason to believe that there were some foreign contracts being promoted . . . the secretary of state would never be susceptible to that kind of misuse.”

This isn’t the first time Blumenthal has been accused of violating FARA law through his communications with then-Secretary Clinton. In late March, Gawker published a September 2012 e-mail from Blumenthal to Clinton, where he forwarded a memo from an operative working for a pro-Russian political party in the former-Soviet state of Georgia. That memo — and Blumenthal’s accompanying message — urged Clinton to back the Vladimir Putin-allied party in order to avoid a potentially embarrassing geopolitical showdown for the Obama administration. The Washington-based Foundation for Accountability and Civic Trust asked the Justice Department to investigate the possible breach, but that request was ultimately ignored.

The FARA experts who spoke to National Review see parallels between the Georgia case and Blumenthal’s e-mails to Clinton on Libya. In both, he appeared to act as a middleman between foreign officials and operatives and U.S. officials who could influence policy in a way beneficial to both the foreign principals and Blumenthal’s business contacts.

But while his middleman status may make a violation harder to prove, it doesn’t let Blumenthal off the hook. Berke explains that even an “informal” agency relationship falls under FARA disclosure laws. And another expert agrees, explaining that the statute also covers “indirect” relationships between foreign and U.S. officials.

“It all goes back to the purpose,” the expert explains. “Was he doing this to help Hillary and inform her? Or was he doing this because he was getting paid to have a meeting?”

The now notorious e-mails from Blumenthal to then-Secretary of State Clinton are a minefield of scandal and suspicion. From concerns over back-door diplomatic dealings to the impression that Blumenthal may have birthed the now-debunked story that the Benghazi attacks grew from a spontaneous protest, every day seems to bring a new headache for the Clinton campaign.That’s something the Justice Department should be able to prove through an investigation, should they choose to initiate one. “Concrete evidence could be out there pointing to registration,” the expert said, “and that’s why the DOJ can inquire. It’s like operating without a business license, the county can come in and see it’s not there and give penalties for late registration. But they’ve got to get the information.”

With questions over the e-mails’ legality under foreign-lobbying laws, the Clinton campaign may now have one more headache to nurse.

— Brendan Bordelon is a political reporter for National Review.