The FBI probed public relations giant Ruder Finn about prospective work for the Chinese consulate, former employees say
  • Two former Ruder Finn employees said the FBI questioned them about work the agency pitched for the Chinese consulate.
  • The FBI agents asked the former employees questions such as who was involved from the firm and the consulate and what the potential scope of work was.
  • Ruder Finn said it didn't end up working for the consulate but declined to comment further.
  • Lobbyists and representatives for foreign governments, including PR firms, are required to register with the US government, and the US government has been stepping up enforcement of this requirement, a legal expert said.
  • Visit Business Insider's homepage for more stories.

FBI agents have interviewed at least two former employees of public relations giant Ruder Finn about work it was seeking to do for the Chinese consulate, the former employees told Business Insider.

Both people said the Chinese consulate had been in talks with the agency in late 2019 to hire the firm to promote positive news about China and its economic impact in the US. Business Insider granted anonymity to the former employees so they could speak candidly.

Then the coronavirus pandemic broke out in Wuhan, China.

"It was not a good time to spin a China story with the media," one of the former employees said. "But what we recommended is that they could use social media to amplify stories that are positive or neutral."

The former employees said the FBI reached out this past summer and asked them questions about a social media account that the person said Ruder Finn created to publicize China; who the employee's consulate contacts were; how many times they met; who attended such meetings, and who was involved from Ruder Finn.

Other questions involved the consulate scope of work, recommendations Ruder Finn gave to the consulate, and how much and how the consulate was willing to pay, they said.

"The agent framed it to me as, 'This is an issue of interest and there wasn't a formal investigation. We're just doing some research on what position the FBI should take on this,'" the second former employee said.

Ultimately, the Chinese consulate didn't hire Ruder Finn, the former employees said.

Working for foreign governments and entities can be lucrative for PR agencies. Ruder Finn currently has a $1.7 million assignment doing social media and digital work for NEOM, a $500-billion mega city in Saudia Arabia, according to public documents.

Lobbyists and representatives for foreign governments, including PR firms, are required to register with the US government under the Foreign Agents Registration Act (FARA). Ruder Finn is not registered with FARA to work for China, according to publicly available information. A Ruder Finn spokesperson confirmed the agency doesn't work for the consulate but declined to comment further.

Asked to comment, an FBI spokesperson cited Department of Justice policy that prevents the agency from commenting on the existence or nonexistence of any investigation. A representative for the Chinese consulate didn't respond to several requests for comment as of press time.

Prosecutions of lobbyists for failing to register have been rare, The Washington Post has reported.

But Joshua Rosenstein, a lawyer at Sandler Reiff Lamb Rosenstein & Birkenstock, who's not connected with Ruder Finn but who helps PR firms comply with FARA, told Business Insider that the DOJ has "signalled repeatedly over the last several years that it was expanding FARA enforcement and has reminded the consulting world broadly that FARA applies to work that includes PR and comms, dispelling the conventional FARA only applies to lobbying." 

Rosenstein said, speaking generally, that a PR firm doesn't have to have a contract to work for a foreign government in order to be required to register with the US government — it just has to conduct certain activities on its behalf, and that the more substantive the work is, the higher the chance is that the firm has to register.

"It's a fine line between reporting registerable work and doing a business pitch," he said. "The laws say if you act at the specific request of principal and perform political activities including comms services for a foreign government, then registration is required."

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