Justice Dept. Resumes Bribery Prosecutions of Foreign Business That Hurts US Interests

WASHINGTON — The Justice Department plans to resume prosecuting cases under the Foreign Corrupt Practices Act but with a different strategy than before President Donald Trump was elected.

The federal law authorizes criminal and civil prosecution of anyone who tries to bribe foreign government officials to win a business advantage in international transactions.

The new strategy announced Tuesday will focus Foreign Corrupt Practices Act enforcement primarily against misconduct that hurts American businesses’ ability to compete internationally.

Trump used an executive order to suspend the previous broad-based anti-bribery enforcement while arguing that the prosecutions could inhibit American business abroad.

When Congress enacted the Foreign Corrupt Practices Act in 1977, some American businessmen called it unrealistic. They said “gifts” of money or property to foreign officials who help their businesses were considered a fringe benefit of their jobs.

Enforcement was sporadic in the first few years but became commonplace during the Biden administration.

Trump referred to the pace of Justice Department and Securities and Exchange Commission enforcement actions in his Feb. 10 executive order.

“American national security depends in substantial part on the United States and its companies gaining strategic business advantages whether in critical minerals, deep water ports, or other key infrastructure or assets,” the order says.

“But over-expansive and unpredictable FCPA enforcement against American citizens and businesses — by our own government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security,” the president said in the order.

Since order 14209 was announced, the Justice Department closed about half its open foreign bribery investigations. They included investigations of medical device maker Stryker and aerospace manufacturer Bombardier.

The revised enforcement strategy was announced by Todd Blanche, the Justice Department’s deputy attorney general, in a policy statement.

“We are shifting prosecutorial resources toward cases that clearly implicate U.S. national security and economic competitiveness, rather than penalizing legitimate business operations abroad,” the statement said.

It also said previous enforcement was “burdening American companies …”

The new enforcement efforts will be directed at financial transactions of drug cartels, misconduct that deprives American companies of fair access to compete, and corrupt practices intended to interfere with U.S. national security and key infrastructure, according to the Justice Department.

One of the previous controversial prosecutions resulted in Walmart paying a $282 million settlement in 2019 after some of its agents in Mexico paid government officials to speed up construction permits for new retail stores.

One of the biggest prosecutions and settlements came from European aircraft company Airbus SE. In 2020, Airbus paid nearly $4 billion to resolve bribery charges alleged by the U.S., British and French governments. The company admitted to using intermediaries to bribe government officials and airline executives to win contracts in China and other countries.

The Justice Department announcement Tuesday fell under criticism from some international business and public policy leaders. They said it demonstrates a dangerous retreat from good ethics that could backfire by undermining foreign policy.

Rick Claypool, a research director for consumer rights advocacy group Public Citizen, said in a statement, “American corporations that engage in criminal bribery schemes abroad will no longer be prosecuted. That’s the bottom line of the new Trump policy on the Foreign Corrupt Practices Act.”

He called the policy shift a gift “to corrupt multinational corporations.”

Drago Kos, chairman of the international Organisation for Economic Cooperation and Development, said that “some countries may think that the Wild West of unpunished corruption is back.”

A Justice Department official tried to ease concerns Tuesday that the new Foreign Corrupt Practices Act policy would unleash international business misconduct.

Speaking at a meeting in New York of the American Conference Institute, Matthew R. Galeotti, the head of the department’s criminal division, said federal prosecutors have not “and will not close meritorious investigations or dismiss meritorious cases” involving foreign bribery and other white-collar crimes.

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