Trump ally's trial to test century-old U.S. law on what makes someone a 'foreign agent'

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By Luc Cohen

NEW YORK (Reuters) - Tom Barrack, the investor and onetime fundraiser for former U.S. President Donald Trump, will go on trial next week in a case that will provide a rare test of a century-old law requiring agents for other countries to notify the government.

Federal prosecutors in Brooklyn say Barrack worked for the United Arab Emirates to influence Trump's campaign and administration between 2016 and 2018 to advance the Middle Eastern country's interests.

According to a July 2021 indictment, prosecutors have emails and text messages that show UAE officials gave Barrack input about what to say in television interviews, what then-candidate Trump should say in a 2016 energy policy speech, and who should be appointed ambassador to Abu Dhabi.

Prosecutors said neither Barrack, nor his former assistant Matthew Grimes, nor Rashid Al Malik - the person prosecutors identified as an intermediary with UAE officials - told the U.S. Attorney General they were acting as UAE agents as required under federal law.

Barrack, who chaired Trump's inauguration committee when he took office in January 2017, and Grimes pleaded not guilty. Jury selection in their trial begins on Sept. 19. Al Malik is at large.

The federal law in question was passed as part of the 1917 Espionage Act to combat resistance to the World War I draft.

Known as the 951 law based on its section of the U.S. Code, it requires anyone who "agrees to operate within the United States subject to the direction or control of a foreign government" to notify the Attorney General.

The law was once mainly used against traditional espionage, but more 951 cases in recent years have - like Barrack's - targeted lobbying and influence operations.

But the use of the law in those types of cases has rarely been tested at trial, because most have ended in guilty pleas or remain open because the defendants are overseas.

KNOWLEDGE AND INTENT

Barrack's lawyers have said the U.S. State Department, and Trump himself, knew of his contacts with Middle East officials, showing Barrack did not have the intent to be a foreign agent.

The lawyers also said Barrack never agreed to represent UAE interests and that his interactions with UAE officials were part of his role running Colony Capital (NYSE:DBRG), a private equity firm now known as DigitalBridge Group Inc.

But prosecutors have said an agreement to act as an agent "need not be contractual or formalized" to violate section 951.

The results of recent 951 trials have been mixed. In August, a California jury convicted former Twitter Inc (NYSE:TWTR) employee Ahmad Abouammo of spying for the Saudi government. In 2019, a Virginia jury convicted Bijan Rafiekian, a former director at the U.S. Export-Import Bank, of acting as a Turkish agent. A judge later overturned that verdict and granted Rafiekian a new trial, saying the evidence suggested he did not intend to be an agent. Prosecutors are appealing that ruling.

"What it comes down to is the person's knowledge and intent," said Barbara McQuade, a University of Michigan law professor who handled foreign agent cases as Detroit's top federal prosecutor from 2010 to 2017. "That's the tricky part."

Barrack resigned as DigitalBridge's chief executive in 2020 and as its executive chairman in April 2021. The company did not respond to a request for comment.

If convicted of the charge in the 951 law, Barrack and Grimes could face up to 10 years in prison, though any sentence would be determined by a judge based on a range of factors. Convictions on a related conspiracy charge could add five years to their sentences.

Barrack potentially faces additional time if convicted on other charges against him.

'SERIOUS SECURITY RISKS'

Barrack's trial will focus on allegations that during Trump's presidential transition and the early days of his administration, the UAE and its close ally Saudi Arabia tried to win U.S. support for their blockade of Gulf rival Qatar and to declare the Muslim Brotherhood a terrorist organization.

Prosecutors said Barrack also gave UAE officials nonpublic information about potential appointees to Trump administration posts, and made false statements to investigators.

Barrack's conduct "presented serious security risks," prosecutors said.

A UAE official said in a statement the country "respects the sovereignty of states and their laws" and has "enduring ties" with the United States.

Kristian Coates Ulrichsen, a Middle East fellow at Rice University's Baker Institute in Houston, said that while the UAE and Saudi Arabia are U.S. security partners, Trump's perceived disregard for traditional government processes may have enticed them to establish back channels to advance their interests.

"It was in violation of the norms of international diplomacy," Coates Ulrichsen said. "If it's proven, it was also a case of actual foreign intervention in U.S. politics."