Department of Justice Sued by Florida Company That Wants to Broadcast Russia's Sputnik Radio

A U.S. broadcasting company based in Florida is suing the Department of Justice for requiring that the media company register as a foreign agent under the Foreign Agents Registration Act (FARA).

According to the Department of Justice, RM Broadcasting LLC, a company operating out of Jupiter, Florida, is required to sign up as a foreign agent because it broadcasts the Russian radio program Sputnik.

FARA requires that U.S. individuals or entities register with the government if they are doing political, public relations or financial work on behalf of foreign individuals or entities. The Department of Justice claimed that RM Broadcasting acted as a “publicity agent” and “information-service employee” for the Russian state-owned media company Rossiya Sevodnya. But RM Broadcasting argued that the arrangement was only a run-of-the-mill business deal that did not qualify as propaganda or promotion.

The dispute culminated in a lawsuit that was filed against the Department of Justice on October 19 in Florida’s federal court.

“RM does not create, provide, or have any direct control over the content of the programming, and does not possess the authority to exercise editorial control over the programming,” RM Broadcasting owner Arnold Ferolito’s lawyer Nicole Waid argued in a letter to the Department of Justice.

“RM does not act as an agent, representative, employee, or servant of Radio Sputnik, Rossiya Segodnya. The contractual relationship between the two parties solely consists of the availability of radio airtime between Radio Sputnik and an FCC licensee,” the letter continued.

gettyimages-873156498-594x594 The Moscow headquarters of Russia's Rossiya Segodnya state media group, which runs the Sputnik news agency RM Broadcasting, on November 12, 2017. A company operating out of Jupiter, Florida, is required to register as a foreign agent because it broadcasts the Russian radio program Sputnik, according to the Department of Justice. Kirill Kudryavtsev/AFP/Getty Images

In an email to Newsweek, Waid said that RM Broadcasting did not want to register as a foreign agent because the company "fundamentally disagrees with the government’s interpretation of the definition of an agent of a foreign government." She also cited privacy concerns. 

"There are consequences to registering as an agent of a foreign government. First, you relinquish your 4th Amendment rights. The government has the ability to inspect your books and records at any time (including financial statements, emails, etc.). Second, the confidential terms of your business contracts are no longer confidential. The service agreements are posted online with all financial information regarding the business transaction (except bank account information regarding wire transfers)," Waid wrote"Thus, registering can have a significant detrimental impact on business operations." 

Nevertheless, court documents revealed that the company was doing a type of public relations work for Sputnik International. In a letter addressed to Sputnik representative Anton Anisimov, Ferolito wrote that the company wanted to provide "proper PR and advertising opportunities" for the Russian media outlet.

The broadcasting company shared with the Department of Justice copies of its contract with Sputnik. However, it denied the government's request to provide copies of all communications with Radio Sputnik and its parent company Rossiya Segodnya, which is owned and operated by the Russian government.

“We respectfully submit that this request is overbroad, unduly burdensome, and unnecessary,” the lawyer’s letter read.

Reston Translator, another U.S. company that broadcasts Sputnik, registered as a foreign agent last year. But unlike Reston Translator, which broadcasts radio programs, RM Broadcasting only buys airtime for radio stations and resells that airtime to companies like Sputnik. Legal experts said that subtle difference could be debated in court, because FARA law is not well defined.

The outcome of the case could have a significant impact on how FARA law is interpreted going forward, according to experts.

“The statute is so far-reaching and sweeping, and many terms are not well defined. This leaves room for interpretation. They are arguing about control, about whether there is agency and whether the Russian government can direct or control their activity. These inquiries are very fact-specific, and there is gray area, so it does give the parties an opportunity to argue their case,” Tessa Capeloto, a lawyer and expert on FARA law, told Newsweek. “Depending on what happens, it could impact how DOJ interprets control and agency, and it could impact future registrations and how DOJ applies the law.” 

FARA was a little-known law until recently, when several high-profile cases snagged former Trump campaign officials for acting as unregistered foreign agents for Ukraine and Turkey. Earlier this year, President Donald Trump's former national security adviser Mike Flynn pleaded guilty to acting as an unregistered foreign agent for a Turkish company with ties to Turkey's government. In August, former Trump campaign chairman Paul Manafort and his associate Sam Patten were also charged for working on behalf of Ukraine. 

Before 2018, only a handful of FARA violations had been prosecuted in the years since the law was enacted in 1938 to counter Nazi propaganda efforts. In 2016, an audit of FARA conducted by the Justice Department’s Office of the Inspector General found “widespread delinquencies” in compliance rates. 

gettyimages-995204464-594x594 Following a pre-sentencing hearing, Michael Flynn, former national security advisor to President Donald Trump, departs the E. Barrett Prettyman United States Courthouse in Washington, D.C., on July 10. Aaron P. Bernstein/Getty Images

But FARA law has gained a new lease on life ever since special counsel Robert Mueller opened his investigation into foreign election interference in the aftermath of the 2016 elections, and foreign media companies have been thrust into the spotlight. In November 2017, Russian media companies RT and Sputnik officially registered as foreign agents in response to a request from the Department of Justice. In September 2018, the department demanded that two Chinese media companies do the same.

Nevertheless, many legal experts and law enforcement agents are confused about what constitutes a FARA violation and when someone is obligated to sign up as a foreign agent. In the case of RM Broadcast, the company's lawyers argued that it was not acting as a foreign agent by simply honoring a contract with Sputnik.

RM Broadcasting is ultimately a one-man show run by 75-year-old Arnold Ferolito. According to documents submitted to the Department of Justice, Ferolito is originally from the Bronx, New York, and now lives in semiretirement in Florida. His wife, Olga, is a naturalized U.S. citizen originally from Russia. 

“Mr. Ferolito travels to Russia to visit family and for business purposes, but he does not participate in any activity that promotes Russian interests or values,” documents submitted by Ferolito’s lawyer read.

Last year, Ferolito brokered a deal with the AM radio station WZHF that made Sputnik the only program available on the Washington, D.C.-area station. That likely caught the attention of federal investigators who were looking to curb foreign influence through FARA enforcement.   

But the U.S. government had its eye on RM Broadcasting for years before the deal with WZHF. In 2013, the Justice Department’s counterintelligence unit asked the company to describe all services it provided from Kremlin-linked entities. In that case, the government was interested in the company’s ties to the outlet Voice of Russia. RM Broadcasting’s relationship with Voice of Russia was terminated in 2014.

Update (10/29): This story was updated to include comments from Ferolito's lawyer. 

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