Trump’s Executive Order on FCPA Enforcement
On a Monday evening, President Donald Trump signed an executive order halting the enforcement of the Foreign Corrupt Practices Act (FCPA). The law, enacted in 1977, criminalizes the act of bribing foreign officials, but Trump argued that it puts U.S. businesses at a disadvantage internationally. He claimed the law led to the unnecessary prosecution of American companies and individuals for practices commonly seen in international business dealings, thus hurting U.S. competitiveness in the global market.
Trump’s directive required Attorney General Pam Bondi to stop current actions taken under the FCPA and immediately halt any prosecutions related to bribing foreign officials. He criticized the law, saying that while it “sounds good on paper,” it is “a disaster” in practice, as it discourages foreign business engagements by U.S. companies, fearing the possibility of investigations or indictments. The order aimed to address these concerns by creating “revised, reasonable enforcement guidelines” for the FCPA.
Revised Enforcement Guidelines
The White House emphasized that Trump’s executive order was meant to boost U.S. economic competitiveness by rethinking how the FCPA is enforced. The White House fact sheet explained that American businesses often face an uneven playing field due to the broad application of the FCPA. By halting unnecessary investigations and prosecutions, the new approach would provide American companies with the tools needed to succeed on the international stage. The guidelines would be reviewed periodically, and all future FCPA-related cases would be scrutinized and approved by Attorney General Bondi.
Criticism and Opposition
Trump’s decision was met with significant opposition. Gary Kalman, executive director of Transparency International U.S., expressed concerns that the move would weaken the U.S.’s stance against global corruption. He noted that the FCPA has been a crucial tool for fighting corruption worldwide, not just by prosecuting bribery but also by mandating strict accounting practices for businesses to prevent such crimes. Kalman warned that this change could undermine the “Made in America” brand, which has gained strength through its reputation for ethical business practices.
Furthermore, critics argued that the FCPA had been instrumental in enforcing global standards, with many countries emulating the law’s provisions. The act, according to its proponents, helped make American companies more attractive by ensuring that their success was based on merit rather than corrupt practices.
Impact on DOJ and Legal Community
The new order had significant implications for both the Department of Justice (DOJ) and the broader legal community. It shifted the focus of FCPA prosecutions, with Bondi’s directive emphasizing investigations related to foreign bribery linked to transnational criminal organizations and cartels. This change marked a departure from the traditional focus on corporate violations of the FCPA. Legal experts noted that this shift would affect ongoing investigations and cases, potentially alleviating the pressure on companies already under scrutiny.
The Raytheon Case and Trump’s Approach
A notable example of FCPA enforcement was the Raytheon case, in which the company paid nearly $1 billion to settle charges related to bribing foreign officials to secure defense contracts. However, this type of enforcement could become rarer under Trump’s new approach, which prioritized economic competitiveness over aggressive anti-corruption measures. Former Deputy Attorney General Rod Rosenstein echoed Trump’s concerns, stating that the U.S. had been at a disadvantage by imposing strict anti-bribery laws that did not apply uniformly across global markets.
In conclusion, Trump’s executive order to revise FCPA enforcement represents a significant shift in U.S. policy, aiming to reduce the regulatory burden on American businesses while potentially weakening the country’s efforts in global anti-corruption initiatives. The new directive signals a focus on national security and economic advantage, potentially reshaping future enforcement actions and international legal norms.
