When President Donald Trump signed an executive order in February placing a temporary freeze on new and existing criminal enforcement actions involving the Foreign Corrupt Practices Act (FCPA)—a longstanding federal foreign bribery statute and one of the most powerful mechanisms against global corporate corruption—his move sparked concerns from administration critics that the Department of Justice under Attorney General Pam Bondi might take a lax approach to white-collar crime enforcement over the next four years.
Passed by Congress in 1977, the FCPA makes it unlawful for American citizens, residents, and entities to make or facilitate bribes to foreign officials with the purpose of obtaining or retaining business. The statute is also regularly enforced against foreign companies that are listed on U.S. stock exchanges or otherwise have a presence in the United States. Notable cases include a 2018 settlement that saw the Brazilian state-owned energy company Petrobras pay more than $850 million in fines for facilitating the payment of bribes to Brazilian politicians, as well as a $122 million settlement in 2024 between the DOJ and a subsidiary of McKinsey & Company after it paid bribes to two South African state-owned enterprises.
Shifts in charging priorities and resource allocation across the DOJ are to be expected during transitions from one administration to another, and the administration’s deprioritization of traditional white-collar enforcement—whether temporary or permanent—has largely stemmed from its hyper-prioritization of immigration violations, cartels, and transnational criminal organizations (TCOs). The full scope, persistence, and influence of these changes, however, remains largely unclear. And in fact, before Trump issued his order pausing FCPA enforcement actions, Bondi had signaled that the DOJ could use the statute to investigate cartel-related activity.
Trump signed an executive order on his first day in office declaring a national emergency to deal with the “unusual and extraordinary threat to the national security, foreign policy, and economy of the United States,” presented by cartels and other TCOs. The order—an early signal of the administration’s willingness to stretch the federal law-enforcement toolkit—allowed for the imposition of broad financial and criminal sanctions on the organizations, their members, and their supporters.
In alignment with the president’s strategy of “total elimination” of cartels and transnational criminal organizations, Bondi issued a memo to all DOJ employees on February 5 concerning changes in the DOJ’s approach to immigration and cartel-related activity. Notably, the memo also included changes to FCPA enforcement. In the memo, Bondi directed the DOJ’s FCPA unit to “prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and TCOs,” and “shift focus away from investigations and cases that do not involve such a connection.”
What such an enforcement regime might look like is unclear: The FCPA is not designed to target cartel and TCO-linked activity, and the DOJ has rarely—if ever—leveraged it for such purposes in the past. “As best as we can determine—looking at all the cases—there’s only one case in the history of the FCPA that involved a transnational criminal organization,” William Garrett, senior content manager for FCPA Clearinghouse—a project by Stanford Law School that tracks FCPA enforcement—told The Dispatch.
“It’s like deciding you’re going to take your Maserati out and use it to plow your field,” Aaron Zelinsky, a former assistant U.S. attorney who prosecuted FCPA violations for the government, said. “It’s just not an efficient use of the statute.”
While white-collar law practices and corporate compliance offices were still scrambling to determine how the DOJ’s new approach to FCPA enforcement might affect their operations, Trump upended the future of FCPA even further. On February 10, Trump issued an order pausing all new and existing FCPA investigations and enforcement actions, arguing that FCPA enforcement has been “stretched beyond proper bounds,” and “impedes the United States’ foreign policy objectives,” with individual exceptions only permitted with direct approval from the attorney general. The order called for a 180-day review period—subject to a single 180-day extension—during which the attorney general would “review guidelines and policies governing investigations and enforcement actions under the FCPA,” and “restore proper bounds” on FCPA action.
“The executive order essentially said, ‘We’re going to take a step back and see how we can use the FCPA in a way that is more responsive to the needs of the American public,’” Fry Wernick, a former supervisor of the DOJ’s FCPA unit during the Obama and first Trump administrations, told The Dispatch. “From [Trump’s] perspective, he wants to push an ‘America First’ agenda and use this law enforcement tool as part of the many tools in his toolkit.”
While the Trump administration’s freeze on existing and new FCPA enforcement is novel, criticism over the act’s purpose and scope are not. Critics of the DOJ’s modern FCPA regime have long argued that, while increased enforcement has made a positive difference in tamping down on corporate bribery, the act also imposes a substantial regulatory and financial burden on U.S. businesses operating abroad. Democrat Sens. Amy Klobuchar and Chris Coons have both been prominent supporters of FCPA reform in the past, and Trump himself derided the FCPA in an appearance on CNBC in 2012, calling it “absolutely crazy,” and a “horrible law.”
“You’re very rarely going to find a former DOJ or SEC enforcement official who says that everything’s hunky dory in this area,” Mike Koehler, a law professor and expert on FCPA enforcement, told The Dispatch. “There have been a wide variety of people from a wide variety of walks of life that have expressed one concern or another.”
White-collar and corporate crime prosecutions have steadily declined since the turn of the millennium, but FCPA enforcement itself has grown substantially over the past two decades. According to FCPA Clearinghouse, the DOJ initiated about two criminal FCPA actions per year between the law’s inception in 1977 and the end of 2004. Since 2005, however, the DOJ has averaged nearly 22 FCPA enforcement actions per year, peaking at 37 actions in 2019.
Many credit the uptick in FCPA enforcement to changes in the DOJ’s guidance on corporate criminal cases. Prior to 2004, the department had two choices when investigating such cases—to charge, or not to charge. However, in 2004, the DOJ introduced the use of two other possible resolutions in FCPA cases—non-prosecution agreements (NPAs) and deferred prosecution agreements (DPAs)—that allowed investigations to be settled outside of the lengthy and resource-intensive indictment process. The change made FCPA enforcement actions less costly for the DOJ and allowed the FCPA unit to pursue investigations against more businesses engaged in activity abroad. “These alternative resolution vehicles generally bypass judicial scrutiny,” Koehler said. “The government has made it easy for companies to resolve these cases, and risk-averse companies will do what risk-averse companies do. That is to agree to a resolution, oftentimes irrespective of the enforcement theory, simply to make the government go away.”
One issue for businesses is that what exactly constitutes prohibited activity under the FCPA is not always clear, and the jurisdictional bounds of DOJ enforcement are often untested. Because most FCPA cases are settled using NPAs and DPAs, relatively little case law on the act exists, meaning businesses must invest significant resources into compliance programs and internal investigations without full knowledge of the FCPA’s scope. “The FCPA has been around for nearly 50 years, and there’s been less than 10 judicial decisions of precedent concerning this area of law, and that is largely a function of how the DOJ and the SEC have chosen to enforce it,” Koehler explained. “The jurisdictional expanse is basically what the DOJ or the SEC says it is and what the company agrees to,” Garrett echoed.
Garrett, however, disagrees with the Trump administration’s characterization that there has been broad abuse of the FCPA. “I don’t agree with the executive order’s characterization that there’s this huge expanse of the law,” he said. “There is a reasonable argument to be made that the DOJ and SEC were pushing the jurisdictional bounds of [the FCPA]. But when that’s been challenged, courts have been reining it in.”
Enforcement theories around who is and isn’t a foreign official, what counts as obtaining or retaining business, and whether actions like offering employment or donating to charities count as bribery have all been expanded to some degree over the past 15 years. “We have an area of law expanding because of corporate risk aversion and settlement documents,” Koehler said. “And that’s not normal. That’s not healthy.”
The Trump executive order’s sparse details also mean here is widespread uncertainty among corporations and the white-collar defense bar as to what enforcement will look like once new guidelines are determined. FCPA enforcement may continue at a high pace, but targeted in new ways to forward administration priorities. Or, the changes could represent a quiet way of reining in enforcement across the board. And, because FCPA investigations often last three or more years before enforcement actions are taken, it could take several years before the full impact of any changes will be known. “At the end of the day, we don’t know. We’re waiting to see what will come out of this 180-day pause,” Wernick, who now works as a white-collar defense attorney, said. The DOJ did not respond to a question from The Dispatch about what FCPA enforcement will look like after the pause.
Even if the administration does back away from FCPA enforcement in the short term, the statute of limitations on FCPA violations extends beyond the current administration. Corporate actors are therefore unlikely to abandon FCPA compliance structures even in a temporary vacuum of investigation and enforcement. State and local enforcement agencies like the New York Attorney General’s Office, Manhattan District Attorney’s Office, and New York Department of Financial Services are also well positioned to take up some enforcement slack should broader white-collar prosecution decline at the federal level.
Regardless of whether, following the 180-day pause mandated by Trump’s executive order, FCPA enforcement priorities shift meaningfully or not, finite resources and manpower within the DOJ mean that there will almost certainly be some deprioritization of white-collar enforcement across the department. Whether that deprioritization represents a peripheral change in degree or a substantive change in kind, corporations, law firms, prosecutors, and the American people will have to wait and see.
