Trump can turn this white-collar crime law into an effective foreign policy tool

It’s easy to lose track of all the news coming out of the Department of Justice. But beneath the headlines — the Jan. 6 dismissals and pardons, the “weaponization of government,” or the case against New York City Mayor Eric Adams — something very important is happening.

President Trump is reshaping the department’s international law enforcement priorities to more closely align with the needs of the American people, instead of the white collar defense bar in Washington, D.C.

On Feb. 5, Attorney General Pam Bondi announced a new Justice Department policy to achieve the “total elimination” of cartels and transnational criminal organizations, and she closed and repurposed multiple corporate prosecuting units to achieve this objective. Then five days later, President Trump issued an executive order directing a 180-day “pause” on enforcement and directed Bondi to rethink how to use one law that has gained outsized importance over recent years: the Foreign Corrupt Practices Act.

Most Americans have never heard of this law, but it has become one of the Justice Department’s most powerful tools to combat white-collar crime. Passed after Watergate, it is the world’s oldest foreign bribery statute. For decades, it was rarely enforced. But over the last 10 years, its use has exploded — leading to over $25 billion in global fines, compared to just $50 million in its first 30 years.

As a former supervisor of the department’s Foreign Corrupt Practices Act Unit and now a defense attorney, I have seen both the benefits and burdens of this enforcement.

First, the good news: Enforcement has made a real difference. Companies no longer think of bribes as merely “a cost of doing business” and widespread investment in compliance by U.S. companies has largely immunized them from the majority of prosecutions. As a result, nine of the 10 largest penalties under the Foreign Corrupt Practices Act have been imposed on foreign companies.

Now, the bad: These successes have come at great cost, both to companies and investors. Prior to 2008, the largest fine had been for $21 million. Last year, companies paid over $2.1 billion. The fear of a Foreign Corrupt Practices Act investigation has resulted in companies spending heavily on compliance, especially as the law has expanded to cover novel theories of corrupt “payments,” such as hiring an official’s child or donating to an official’s favorite charity.

The investigations themselves are also exceedingly expensive and time-consuming, taking several years and costing millions of dollars, even when the government decides not to prosecute.

Anticorruption activists now fear that Trump’s pause will be permanent and that enforcement will be dead. But these fears are misplaced. This law is being right-sized, not killed. Here are some ways Bondi can use the law to protect U.S. businesses and make it an important part of Trump’s “America First” foreign policy agenda.

First, she can reward U.S. companies and focus enforcement on corrupt officials. This would lift the burdens on American businesses while also shifting enforcement from the “supply” to “demand” side of bribery schemes. In other words, the focus of enforcement should be less on companies forced to pay bribes, and more on the corrupt foreign officials demanding them. American companies deserve to be rewarded for their leadership on compliance, especially when they self-report violations within days, not years. This will encourage compliance. As an added benefit, it will shield companies from the shifting political winds of a future administration.

Second, Bondi can target adversarial countries for enforcement, using the law as a geopolitical lever. Countries that oppose America’s efforts to combat cartels or terrorism should face heightened enforcement. Those that support us should get reduced scrutiny. Foreign Corrupt Practices Act enforcement can complement tariffs, sanctions and foreign aid, advancing U.S. policy while curbing corruption.

Third, she can stop giving corporate fines away. One strange feature of “global” Foreign Corrupt Practices Act settlements is that federal prosecutors frequently give away large percentages — sometimes more than 80 or 90 percent — of corporate fines to foreign governments to secure cooperation and access to foreign evidence. Americans have thus not been getting the full return on their investment in enforcement, and this practice needs to end.

Critics will argue that these reforms would violate America’s obligations under the OECD, a Clinton-era convention that prohibits prosecutions based on “national economic interest” or foreign policy. But the U.S. currently brings more than 75 percent of all global foreign bribery cases, and the 37 other OECD nations largely rely on American enforcement instead of developing their own.

The solution, then, is to renegotiate the OECD convention on bribery, or else withdraw from it. If America is forced to shoulder the burden of continued global anti-corruption enforcement, then it is only fair that U.S. companies be the first to benefit.

For years, critics argued that the U.S. used the Foreign Corrupt Practices Act as a tool of foreign policy. That wasn’t true before, but it should be now. A strategically targeted approach can make this anti-bribery law a pillar of Trump’s America First agenda, protecting U.S. companies while advancing national security and economic interests abroad.

Ephraim (Fry) Wernick is a partner at Vinson and Elkins LLP and a former federal prosecutor and supervisor of the U.S. Department of Justice’s Criminal Fraud Section and Foreign Corrupt Practices Act Unit.

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Trump can turn this white-collar crime law into an effective foreign policy tool

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