Trump\u2019s pause of the Foreign Corrupt Practices Act has left companies confused and cast doubt on US leadership of anti-corruption efforts.<\/p>\n
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When President Donald Trump rolled back the Foreign Corrupt Practices Act (FCPA) just three weeks after his inauguration, decades of anti-bribery enforcement seemingly came to a halt. However, it quickly became apparent that government prosecutors were retreating only from some high-profile cases while doubling down on others.<\/p>\n
Companies and their executives, both in the US and elsewhere, are now left to navigate a murky new landscape: one where political motivation may be just as influential as legal precedent. Take, for example, the case of Cognizant Technology Solutions Corp. In April, a federal judge\u2014at the behest of Alina Habba, US attorney for New Jersey and a former Trump defense lawyer\u2014officially dropped the Department of Justice\u2019s long- running bribery case against the company\u2019s two former bosses, Gordon Coburn and Steven Schwartz, who allegedly authorized a $2 million bribe to expand in India. It was the first time the DOJ had walked away from a foreign bribery prosecution since Trump took office for his second term.<\/p>\n
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\u201cThey\u2019re cherry-picking. You\u2019re either going to prosecute all these cases or none of them.\u201d<\/p>\n
<\/span><\/p>\n Frank Rubino, <\/strong>Attorney<\/p>\n <\/span><\/p>\n Just a few weeks after Coburn and Schwartz got a pass, prosecutors proceeded with a bribery case against Smartmatic, a London-based voting machine company that far-right conspiracy theorists falsely claimed helped steal the 2020 election from Trump in favor of former President Joe Biden. Ironically, it was the Biden administration that brought a case against two Smartmatic executives last year. Venezuelan-born co-founder Roger Pi\u00f1ate and his colleague, Jorge Miguel Vasquez, were both charged with making $1-million bribes in the Philippines. Trump\u2019s DOJ is still moving forward with the lawsuit in Miami.<\/p>\n <\/span><\/p>\n Confused attorneys were left wondering: Does the FCPA now only apply to some companies and not others?<\/p>\n <\/span><\/p>\n \u201cI don\u2019t understand why the government is taking an incon- sistent position,\u201d says Frank Rubino, a lawyer for one of the charged Smartmatic executives. The Cognizant scenario isn\u2019t dissimilar to what\u2019s being alleged against Smartmatic, he argues. The only difference is the one-eighty on the part of prosecutors. \u201cThey\u2019re cherry-picking,\u201d says Rubino. \u201cYou\u2019re either going to prosecute all these cases or none of them.\u201d<\/p>\n <\/span><\/p>\n Rubino\u2019s entire practice in Coral Gables, Florida, has been devoted to federal white-collar crime, including cases involving alleged FCPA violations, over the course of his 30-year career. And he somewhat agrees that FCPA enforcement can be too strict. The \u201ctiniest thing\u201d\u2014e.g., taking a prospective buyer to dinner\u2014can be construed as a violation, he says. But the Trump administration\u2019s appearance of favoring one company over another encourages him to gear up for an October trial date.<\/p>\n <\/span><\/p>\n \u201cWe\u2019ll prepare as if Trump never signed that executive order and hopefully be successful,\u201d Rubino says. \u201cThe fact that certain cases are dismissed has no bearing on our preparation.\u201d <\/p>\n <\/span><\/p>\n <\/span><\/p>\n According to law firm Greenberg Traurig, the DOJ and the Securities and Exchange Commission obtained over $1.28 billion in total FCPA penalties in 2024, one of the highest grossing years since it became law in 1977.<\/p>\n Over the past decade, several high-profile corporations have been fined for bribery, including Airbus, which settled for over<\/p>\n $3.9 billion in 2020; Goldman Sachs, which settled for $2.9 billion in connection with the 1MDB scandal; and Glencore, a Switzerland-based mining firm, which pleaded guilty and paid over $1.1 billion to settle an investigation.<\/p>\n During his first term, Trump called the FCPA a \u201chorrible law.\u201d This year, he claimed that it \u201cactively harms American economic competitiveness.\u201d His executive order enacted a 180- day enforcement pause to allow Attorney General Pam Bondi time to review FCPA \u201cguidelines and policies.\u201d<\/p>\n This was particularly jarring for the Organization for Economic Cooperation and Development (OECD), the Paris- based group that promotes economic growth, stability, and trade among a broad group of countries, including the US. <\/p>\n Per a letter sent to Bondi on Feb. 13 and obtained by Global Finance, the OECD made its case: A prolonged FCPA pause \u201cwill not serve its intended purpose to \u2018restore American competitiveness and security.\u2019 It may achieve the very contrary by putting American companies operating abroad at serious risk and depriving the United States of a deterrent instrument it has used to pro- tect US companies from unfair practices by foreign competitors.\u201d <\/p>\n The letter also argued why Trump\u2019s logic, while valid, is dated.<\/p>\n Nicola Bonucci, a former OECD director, maintains that the US was, for a time, at a disadvantage since other countries were turning a blind eye to bribery. \u201cThe paradox is that the uneven playing field was a true argument point between 1977 and 1999,\u201d he says. \u201cIt\u2019s much less so now.\u201d<\/p>\n The 1999 OECD Anti-Bribery Convention, which Bonucci helped implement, changed the norm when 46 signatory states, including the US, agreed to unite and fight bribery on a global scale. US companies operating abroad \u201care in a difficult situation,\u201d Bonucci adds, fearing an uptick in bribery solicitations and further confusion if some companies are treated differently than others. \u201cThe rationale for discontinuing some ongoing cases while pursuing others is not clear and creates further uncertainty,\u201d Bonucci says. <\/p>\n As it stands, most defendants in FCPA enforcement actions over the past decade were based in other countries and regions. A new report from law firm Gibson Dunn based on data from 2015 to 2024 finds that throughout that period, 50% of corporate defendants and 62% of individual defendants were non-US based. Additionally, foreign companies were responsible for eight of the 10 largest monetary settlements, contributing $6.1 billion of the $8.3 billion total.<\/p>\n Should the 180-day pause become permanent, or if the US pulls out as a signatory of the Anti-Bribery Convention, OECD chair Drago Kos expects \u201csome countries may think that the Wild West of unpunished corruption is back.\u201d <\/p>\n The US could also see its image as \u201ca tough enforcer of global anti-bribery norms \u2026 slip into oblivion\u201d or be deemed a \u201crogue state,\u201d he adds. \u201cThis is why I really hope that after 180 days the US will be back on track.\u201d <\/p>\n Per the Associated Press, Smartmatic\u2019s voting machines were only used in Los Angeles County, a Democratic stronghold in a non-competitive state that Trump, a Republican, did not contest after the 2020 election. Yet, it remains in the DOJ\u2019s crosshairs. Observers of the case note that this tracks with the Trump administration\u2019s penchant for going after<\/p>\n perceived enemies while friendly ties to his inner political circle appear to carry weight. In late March, Trump pardoned Nikola founder and donor Trevor Milton, convicted of investor fraud. He also showed leniency to the cryptocurrency industry, which provided millions in donations throughout his campaign and up to his inauguration. In late March, he pardoned three BitMEX founders convicted of money laundering while the SEC abandoned investigations involving Ripple, Coinbase, and Gemini.<\/p>\n This year, the SEC also ditched a lawsuit involving Justin Sun, a crypto entrepreneur who invested millions in the Trump family\u2019s World Liberty Financial firm shortly after Election Day. <\/p>\n Whether companies will now be emboldened by the ethical standards the Trump administration appears to be setting whenever they make a cross-border trans- action remains to be seen. Either way, observers say the current goings-on are not a good look for the US.<\/p>\n \u201cI think there\u2019s some sentiments that are starting to shift,\u201d says Kison Patel, CEO of DealRoom, an M&A lifecycle management software provider. \u201cIt\u2019s not as glamorous to go into business or get acquired by an American company, just given all the current sentiments towards our administration right now.\u201d<\/p>\n Indeed, as of mid-April, data tracker Dealogic shows US M&A activity is down 3% in 2025 compared to this time last year, whereas in other regions, volume is up: Japan (142%), Asia (99%), Middle East\/Africa (80%), Canada (53%), and Europe (9%).<\/p>\n The US is swimming against the tide as the global stance against bribery has become strong and interconnected, Kos says, predict- ing that most countries are unlikely to follow Washington\u2019s lead should it repeal the FCPA or end its involvement with OECD. \u201cThe anti-corruption world is now strongly connected,\u201d he argues, \u201cand the fact that one country is pulling out, though very painful, will not be an insurmountable obstacle for the rest of the world to continue to fight corruption. Simply put: the leading role of the US will be replaced by other countries that will con- tinue to show the way for developing economies.\u201d<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":" Trump\u2019s pause of the Foreign Corrupt Practices Act has left companies confused and cast doubt on US leadership of anti-corruption efforts. When President Donald Trump rolled back the Foreign Corrupt Practices Act (FCPA) just three weeks after his inauguration, decades of anti-bribery enforcement seemingly came to a halt. However, it quickly became apparent that government […]<\/p>\n","protected":false},"author":1,"featured_media":230194,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93],"tags":[38388,85793,10924,5714,2083],"dealstore":[],"offerexpiration":[],"class_list":["post-230192","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-antibribery","tag-backpedal","tag-finance","tag-global","tag-magazine"],"yoast_head":"\n
\n<\/p>\nA \u2018Horrible Law\u2019?<\/h2>\n
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Proximity To Politics Matters <\/h2>\n