The Trump administration won’t enforce one of the country’s strongest anti-bribery and corruption laws for at least the next six months, a radical departure that could devastate the international fight against corruption. Trump claimed the move would bring an immediate boost to US trade, but experts on the law say that it could actually undermine America’s competitiveness—and that it will certainly embolden corrupt foreign officials.
The Foreign Corrupt Practices Act (FCPA) has been on the books since 1977. Essentially, it prohibits American companies and their employees from paying bribes to do business in foreign countries. An amended version also allows US prosecutors to charge foreign firms for any acts of bribery that involve America’s financial system.
Proponents say the law—developed in the wake of a series of bribery scandals involving major US companies paying hundreds of millions of bribes to corrupt officials—protects corporate America from being targeted in corruption and extortion schemes.
Trump, whose own foreign real-estate dealings raise potentially serious conflicts of interest, has long objected to the law. As far back as 2012, he was on the record saying “the world is laughing at us” over the measure, and he took steps to relax its enforcement during his first term as president. On Monday night, he issued an executive order halting enforcement altogether.
The order says that the Department of Justice’s use of the law has been “stretched beyond proper bounds and abused in a manner that harms the interests of the United States.” Specifically, it claims, the statute has hindered American firms seeking access to minerals, deep water ports, and other key assets overseas.
The law itself remains in place—Trump is simply pausing enforcement for 180 days, although the order’s language suggests the pause could be extended.
For this reason, Jessica Tillipman, the dean of government procurement law at George Washington University, says she doesn’t think the enforcement respite will be of use to most major US companies. Paying bribes is still illegal, she notes, and companies will hesitate let their employees deploy such tactics, knowing enforcement could resume in the near future under Trump or the next administration—the law’s statute of limitations is five years.
“I don’t see many companies demanding this,” Tillipman says. “There are [some] companies out there that have no problem with this, and they are probably going to be overjoyed, but there are a lot of companies that have really robust internal compliance and ethics programs, and they’re not going to change.”
What will change, she says, is that US companies will have a harder time credibly invoking the FCPA to rebuff foreign officials soliciting bribes. “I think in many of these cases, bribery happens because the corrupt official demands it, not because you have household name companies wandering around the world with bags of cash,” Tillipman says.
In other words, when the law is vigorously enforced, companies have a solid rationale for rejecting extortionate demands—billions of excuses, given the enormous penalties some US firms have paid for FCPA violations in recent years.
Without the threat of legal enforcement to fend off bribe-seekers, some American executives will struggle to say no. “It’s a really good time to be a corrupt official in Russia or Asia,” Tillipman says.
Despite various amendments to the law, and healthy debate over how tightly it should be enforced (punitive actions have become more common in recent years) there has never been widespread pushback. Since 2010, in fact, more and more foreign countries have adopted complementary laws, effectively spreading the standard set by the FCPA, Tillipman says.
Trump has never clearly explained his dislike of the law, but his own business experiences may offer some hints. In 2008, for example, he began exploring plans to build a hotel project in Baku, Azerbaijan—a country that ranks 154th out of 180 on Transparency International’s corruption perception index.
His company wound up working with a firm run by family members of the country’s then-transportation minister, Ziya Mammadov. Leaked US diplomatic cables described Mammadov as “notoriously corrupt even for Azerbaijan,” and he was noted for his ties to companies controlled by Iran’s Revolutionary Guard.
The project was never completed. The hotel was built, but it sat empty and was never opened as a Trump property, despite the Trumps’ earning several million dollars in licensing fees. A 2017 New Yorker article raised the specter that the Trump Organization could bear some legal liability under the FCPA, as American companies can be charged if they profit from a relationship with corrupt officials.
Neither Trump nor his company were accused of wrongdoing related to the Baku deal and the company also denied any wrongdoing.
That deal fell apart before Trump took office in 2017, but now he’s back in the White House with his business operating in even more nations—including Brazil, India, and Turkey—where bribery is a concern. During Trump’s first term, his company vowed not to pursue foreign deals, but it has made no such promise for Trump 2.0. Now, at least for the next six months, the anti-bribery law won’t be part of the conversation.
