ABOVE: Alexander Fishenko

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By now you have no doubt read about the Russian “spy” ring accused of exporting CCL and USML items to Russia without required licenses. Many newspapers, like the particularly clueless folks at The Examiner, can’t resist a good spy headline for an otherwise run-of-the-mill export case.   Even the reputable folks at Wired have jumped on the “spy” bandwagon. And the reason for this spy mania is that the DOJ, which has never seen a spy headline it can’t resist, gives everyone the opportunity to pitch this as a spy case by including a count for failure to register under the Foreign Agents Registration Act.

As you can see from the criminal indictment, Alexander Fishenko, a naturalized Russian immigrant, and others were charged with procuring various items on the USML and the CCL and exporting them to Russia, allegedly to the Russian government. But the very first count, so even the most slow-witted and slothful reporters can’t possibly miss it, is not for the export violations but for acting as an unregistered foreign agent. The Foreign Agents Registration Act requires that agents of a foreign principal register with the Department of Justice.

That law was passed in 1938 and was directed at the activities of foreign propagandists in the United States. It covers political and lobbying activities in the United States on behalf of foreign persons, foreign companies and foreign governments.  Section 1(c)(1) of the Act, 22 U.S.C. § 611(c)(1), defines the precise activities required to fall under the definition of a foreign agent, including political activities, acting as a publicity agent, or representation of the foreign party before a government agency.

A significant exclusion is set forth in section 3(d) for certain “non-political” activities, including “engaging … in private and nonpolitical activities in furtherance of the bona fide trade or commerce of such foreign principal.” In other words, acting as a commercial agent for foreign governments, foreign companies and foreign individuals by buying stuff for them does not make the person engaged in that activity a foreign agent required to register under the act. (The requirement that the trade be bona fide is to prevent the foreign principal from trying to spread influence in the United States by having its agents buy items that it doesn’t need.)  Because the act covers actions on behalf of not just foreign governments but also on behalf of foreign individuals and companies, this is an important exception. Without this exception, millions of people would become foreign agents required to register under the Act.  Frankly, if buying things for a foreign government, company or person makes the buyer a foreign agent, almost every exporter would be a foreign agent required to register under the Act.

Now if you look at the indictment, you will see immediately that all that Fishenko and his co-defendants are accused of doing is buying things for the Russian government. That doesn’t make them “foreign agents,” much less spies. Of course, the prosecutors probably know this, but they also know that the whiff of espionage from the foreign agent charges is catnip that no journalist can resist. And like everyone else, prosecutors like good headlines.

Back in September 2011 this blog reported on charges brought against Sixing “Steve” Liu, a U.S. citizen permanent resident working as an engineer on naval defense systems, arising from his traveling to China with a laptop on which he had allegedly saved work material that was export controlled. Opening statements were heard yesterday in Liu’s trial.

No allegations were made in Liu’s indictment that this material was actually disclosed to anyone in China because simply taking the data to China is considered an export, whether disclosed or not. Of course, even if taking the laptop to China constituted an export of the data on the laptop, Mr. Liu would not have committed a criminal offense unless he had the requisite criminal intent, that is, unless he knew that taking his laptop to China with that data on it, even if the data was never disclosed to anyone in China, was a violation of law.

Not surprisingly, the opening statement by Liu’s attorney focused on the absence of criminal intent by Liu and argued that Liu was unaware that taking his laptop to China with export-controlled data was illegal:

Liu’s training in the laws governing the export of defense materials consisted of 15 minutes on his first day of work, between sessions on employee benefits and sexual harassment guidelines, [Liu’s lawyer] said.

If true, I think I would agree that this was probably not enough time for export training and that the company involved might find itself in hot water for its own export violations if this were known by the export agencies.

Back in 2009, this blog reported on the arrest of Chi Tong Kuok, a PRC citizen, during a layover in Atlanta while he was traveling to Panama to meet with undercover agents who believed he was involved in various illegal exports of items from the United States to the PRC. After his conviction, he appealed successfully to the Ninth Circuit which threw out two of the four counts against him and remanded for a new trial on the remaining two counts. The court held that Kuok deserved a new trial because he had improperly been denied the opportunity to present a duress defense during his trial. Kuok claimed that the Chinese government had forced him to engage in the illegal exports in question.

Yesterday, Kuok pleaded guilty to the remaining charges. He did so before he had the opportunity to present his duress defense during the new trial ordered by the Ninth Circuit.

This is, to say the least, an odd outcome, and it is far from clear why Kuok would just give up at this point. The evidence of duress described by the Ninth Circuit was fairly compelling.

The threat to Kuok’s family was both immediate and serious. According to his counsel’s opening statement, Zheng made it clear to Kuok that his family was being monitored, through Zheng’s actions in giving Kuok reports on his wife’s daily activities, calling her at the family’s home phone number, and sending Kuok various pictures of his wife and his son taken in public. When Kuok attempted to get out of his dealings with the government, Zheng explicitly threatened to send Kuok’s wife to a “black jail,” and told Kuok that this was “somewhere where we take people off the grid if they don’t do what we ask them to do.”

The prosecutors made the absurd argument that Kuok was required to seek help from U.S. law enforcement authorities regarding the threat made against him in China by the Chinese government authorities, a claim which the Ninth Circuit readily dismissed:

[T]he government’s suggestion that Kuok should have cooperated with the authorities immediately upon landing in the Atlanta airport may be unreasonable, given that Kuok knew his family was still in danger of being jailed by Chinese government officials beyond the control of U.S. authorities.

The plea agreement has not yet appeared on PACER, but a local San Diego newspaper article provides some additional details that may explain this seeming about face. Apparently, the plea agreement proposed a maximum of 46 months in jail and provides that the plea agreement can be withdrawn if the district court judge does not accept that maximum. Kuok has already served 36 months, and the plea agreement provides that the defense can request a lesser sentence of time served. So, at this point, there’s a chance that Kuok will go free immediately upon the acceptance of the plea by the court. The worst that could happen under the plea is that he would spend 10 more months in jail, which is pretty much what a new trial was going to take, or that he will have a trial where the duress defense could be presented.