A judge just tossed out the Justice Department's bid to force Trump donor and casino mogul Steve Wynn to register as a foreign agent

• A judge said DOJ can't force alleged foreign agents to retroactively disclose their lobbying work.
• Judge James Boasberg said he was bound by longstanding federal appeals court precedent.

The Justice Department suffered a setback Wednesday in its recent crackdown on covert foreign influence, as a federal judge tossed a lawsuit seeking to compel the casino mogul Steve Wynn to register as an agent of China in connection with his past lobbying of the Trump administration.

In a 20-page opinion, Judge James Boasberg sided with Wynn's argument that the Justice Department lacked the power to force the disclosure of his alleged stint as a foreign agent of China. Boasberg, an Obama appointee, appeared to have reservations about his ruling, in which he twice cited appeals court precedent that he viewed as barring the Justice Department from retroactively requiring foreign agents to register once they were no longer carrying out influence work.

It was not immediately clear if the Justice Department would appeal. But if left standing, the decision could hamstring the Justice Department in its efforts to enforce the Foreign Agents Registration Act, or FARA, a decades-old law requiring the disclosure of lobbying and other influence work for overseas powers.

"I don't think the Justice Department can let the decision stand without it significantly impairing its ability to enforce the statute," said Brandon Van Grack, a former top Justice Department official who once headed the unit tasked with enforcing FARA.

A Justice Department spokesperson noted that Boasberg heeded precedent from the US Court of Appeals for the DC Circuit in dismissing the lawsuit. Boasberg also acknowledged that, even after ending a relationship with an overseas government or entity, foreign agents remain in possession of information that FARA calls for making publicly available.

"The district court acknowledged in its opinion that the result it reached frustrates FARA's purpose of getting information to the public that it needs to evaluate the extent of foreign influence over US policy and public opinion. While the court considered itself bound to apply an earlier precedent of the DC Circuit notwithstanding these concerns, the government respectfully disagrees with today's ruling and is considering options in the litigation and more generally," the Justice Department spokesperson said. "The Department remains committed to enforcing the Foreign Agents Registration Act."

For four years, beginning in 2018, the Justice Department repeatedly advised Wynn that he needed to register as a foreign agent in connection with his efforts to secure a diplomatic favor for China: the return of the Chinese dissident Guo Wengui, who fled to the United States and was seeking asylum. Wynn refused to register, arguing that he did not meet FARA's definition of an "agent" and that none of his actions were taken "in the interests" of the Chinese government.

In a prepared statement, his defense lawyers Reid Weingarten and Robert Luskin described the Justice Department's lawsuit as "ill-conceived."

"Mr. Wynn never acted as an agent of the Chinese government and never lobbied on its behalf," they said. "This is a claim that should never have been filed, and the Court agreed."

In his ruling, Boasberg stressed that his ruling applies only to civil lawsuits, not criminal prosecutions under FARA, which carries a maximum sentence of five years in prison.

After decades of light enforcement, the Justice Department has pursued high-profile prosecutions under FARA in recent years, most notably in former Special Counsel Robert Mueller III's case against onetime Trump campaign chairman Paul Manafort. But with Wynn, the Justice Department brought a rare civil lawsuit, making the case a test of its ability to enforce FARA without the heavy hand of criminal prosecution.

Indeed, the case was a "flagship enforcement action to raise public awareness further that the Justice Department is intent on using all of the enforcement tools at its disposal to step up enforcement of FARA," said David Laufman, a former top official in the Justice Department's national security division.

Laufman, now a partner at the law firm Wiggin and Dana, said Wednesday's ruling could undercut the Justice Department's ability to threaten a civil lawsuit to pressure lobbyists and other consultants to register as foreign agents.

'"This decision is a considerable setback in the Justice Department's efforts to intensify FARA enforcement and will embolden individuals who long ago ended an agency relationship with a foreign principal to resist demands to register," he told Insider.

In its May lawsuit, the Justice Department said Wynn agreed in 2017 to lobby on behalf of China in exchange for favorable treatment of his casino business in Macau. At a dinner in June 2017, while serving as the finance chair of the Republican National Committee, Wynn made good on a promise to raise the Wengui matter with then-President Donald Trump and administration officials, the Justice Department said.

In its lawsuit, the Justice Department said the effort to enlist Wynn's support in the Chinese lobbying campaign began in May 2017 with a meeting that included the prominent Republican fundraiser Elliott Broidy and Prakazrel Michel, a founding member of the hit 1990s hip-hop group The Fugees.

In the years since that meeting, Broidy pleaded guilty to acting as an unregistered agent of China, only to later receive a pardon from Trump. Michel, better known by his stage name Pras, is set to stand trial next year on a raft of charges related to his alleged lobbying for China and separate accusations of money laundering and campaign finance violations.

Boasberg described the group in his opinion Wednesday as an "unusual cast of characters," and he referenced a chart-topping Fugees song.

"Perhaps embracing The Fugees' famous line — 'ready or not, here I come, you can't hide,' The Fugees, Ready or Not, on The Score (Ruffhouse Records 1996) — the PRC sought to have the Trump Administration cancel the visa of and remove from the United States an unnamed Chinese businessperson whom the PRC had charged with corruption," Boasberg wrote, referring to Wengui.

Citing precedent from the US Court of Appeals for the DC Circuit, Boasberg said he dismissed the Justice Department's lawsuit strictly on legal grounds and did not reach the question of whether Wynn's conduct required registration under FARA.

"While the goals of FARA are laudable, this Court is bound to apply the statute as interpreted by the D.C. Circuit," Boasberg wrote. "And that requires dismissal."