The Trump administration is giving the black market the green light

Now, profits are power, regardless of how they are obtained.

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By Barbara McQuade

In what President Donald Trump is calling “The Golden Age” of American history, it appears that corruption is the coin of the realm.

Since taking office, Trump has taken a number of steps not just to normalize corruption but also to celebrate it. Last week, Trump pardoned former Illinois Gov. Rod Blagojevich, convicted in 2011 of attempting to sell the seat in the U.S. Senate vacated by the election of Barack Obama as president. But Trump didn’t stop there. He is reportedly also considering appointing Blagojevich to serve as the U.S. Ambassador to Serbia.

And the embrace of corruption does not end there. The Justice Department has been embroiled in controversy over the motion to dismiss the indictment of New York City Mayor Eric Adams on charges of bribery. Trump has even floated the idea that the federal government should stop paying its bills in full, demanding that suppliers and contractors instead be required to negotiate for lesser payments.

One significant example of Trump’s love affair with corruption came last week in an executive order halting the enforcement of the Foreign Corrupt Practices Act. The FCPA makes it illegal for companies that do business in the United States to pay bribes to foreign officials to obtain business deals. It also bans bribes paid by foreign companies if any part of the unlawful conduct occurs in the United States. The act further requires businesses that are listed on U.S. securities exchanges to keep accurate accounting records to avoid the concealment of bribes.

The purpose of the 1977 law is to deter unethical practices that reward corruption over the efficiency that is expected from free market forces. A system that permits bribery increases the cost of doing business, which gets passed on to consumers. And when funds are used to grease the palms of government officials, they are diverted from economic development. The FCPA combats those harms. In addition, the law ensures a level playing field for American companies that play by the rules. According to the legislative history of the act, it was also designed to improve foreign relations by promoting the reputation of the United States as a country that engages in honest business practices. Other countries have followed our lead by enacting similar laws.

Until recently, DOJ enforcement of the FCPA had been robust. In December, McKinsey & Company’s subsidiary in South Africa paid $122 million to resolve a Justice Department investigation into a bribery scheme to pay government transportation and energy officials in that country in exchange for lucrative consulting contracts. In October, Raytheon Company admitted to engaging in a scheme to bribe an official in Qatar to secure air defense contracts and agreed to pay $230 million in criminal fine. The size of the monetary penalties reflects the enormous profit value of these contracts, which provide strong incentives for businesses to line the pockets of foreign officials to obtain them.

But the Trump administration is giving the black market the green light. Under the new executive order, government officials may not take any enforcement action or initiate new investigations for six months while the administration reviews existing investigations and updates its enforcement guidelines. The order states without providing details that the FCPA has been “stretched beyond proper bounds and abused in a manner that harms the interests of the United States.” Leaning into Trump’s muscular interpretation of executive power to circumvent acts of Congress, the order states, “Current FCPA enforcement impedes the United States’ foreign policy objectives and therefore implicates the President’s Article II authority over foreign affairs.” The order further states that “overexpansive and unpredictable FCPA enforcement” for “routine business practices” wastes prosecutorial resources and “actively harms American economic competitiveness and, therefore, national security.” In other words, profits are power, regardless of how they are obtained.

The order suggests that bribery is necessary for American businesses to compete in global markets, but it ignores the fact that their competition includes other U.S. companies. It further ignores the legislative consensus expressed in 1977 that honest business practices enhance America’s foreign policy objectives.

It remains to be seen what remains of the FCPA after the six-month review. Deference to prosecutorial discretion makes it difficult to see how Congress or the courts could provide any meaningful check on even a decision as extreme as abandoning enforcement of the statute altogether.

Some hope remains for honest business practices. Chavi Keeney Nana, a professor at the University of Michigan Law School who has represented corporations in FCPA cases, tells me that American businesses remain subject to enforcement of bribery laws in the countries where they do business. And they know that four years of lax enforcement will not protect them when the statute of limitations for the FCPA is five years.

But Trump’s zeal to open the floodgates to bribery in the name of national security is a troubling development in a country that has traditionally adhered to the rule of law. The executive order is one of many signals that the Golden Era might be tarnished with the stain of corruption.

Barbara McQuade is a professor from practice at the University of Michigan Law School, former U.S. Attorney for the Eastern District of Michigan, and author of the New York Times bestseller “Attack from Within: How Disinformation is Sabotaging America.”

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