Trump Used To Disparage An Anti-Bribery Law; Will He Enforce It Now? | KUOW News and Information

Trump Used To Disparage An Anti-Bribery Law; Will He Enforce It Now?

Nov 8, 2017
Originally published on November 8, 2017 5:11 am

President Trump has called it "ridiculous," a "horrible law" that made it difficult for U.S. companies to compete overseas.

But the Foreign Corrupt Practices Act, which bars businesses from paying bribes to overseas officials, remains a key part of U.S. efforts to combat global corruption.

Now one study is showing the Trump administration's use of the law may be declining, even as administration officials say they're committed to enforcing it.

The law was passed in 1977. Some 400 U.S. companies, including big names like Lockheed and Chiquita, had acknowledged they had paid off foreign officials to win business.

"Many companies were making routine bribes to the heads of governments and others in countries, just to simply buy the business," said Meredith McGehee, chief of policy, programs and strategy at Issue One, a nonprofit organization that looks at money in politics.

The Foreign Corrupt Practices Act applies to any company with a U.S. connection, including foreign firms traded on U.S. exchanges. Companies that have been prosecuted over the years include Siemens, Goodyear, Daimler AG, Alcoa and Halliburton.

"Essentially, [the law] makes it illegal for companies and officers of those companies, to influence foreign officials with anything of value, any bribes," McGehee said.

"And 'bribes' is defined very broadly; there's not a need for a quid pro quo. It's essentially anything of value that you are giving to influence a foreign official to promote your business, or to promote getting a contract or any other benefit for your company," she added.

When the law was first passed, the United States was something of an outlier because many other governments did little to stop bribery. Over time, however, attitudes changed. Today, governments around the world are much more likely to cooperate in pursuing wrongdoers.

Still, the 1977 law has its critics, like Trump, who say companies can't compete when barred from paying bribes in places where doing so is routine.

"Now, every other country goes into these places, and they do what they have to do. It's a horrible law and it should be changed. I mean, we're like the policeman for the world. It's ridiculous," Trump said in a 2012 interview on CNBC.

Such comments have raised questions about the Trump administration's interest in enforcing the law.

The New York Law Journal recently published an article saying Foreign Corrupt Practices Act enforcement proceedings have declined since Trump took office. The authors, Steven Witzel and Arthur Kutoroff, counted the number of new proceedings brought this year by the Securities and Exchange Commission and the Justice Department, and compared them to similar periods under the Barack Obama and George W. Bush administrations.

"In general terms, there's been a dramatic drop-off from the average over the previous 10 years, to what we're seeing in the Trump administration," says Witzel, head of the white collar defense and government investigations practice at Fried, Frank, Harris, Shriver & Jacobson.

But Witzel concedes the drop may have happened for good reasons, such as "administrative issues" tied to the transition between the Obama and Trump administrations.

Southern Illinois University Law School professor Mike Koehler, who writes the FCPA Professor blog, says comparing enforcement records among different administrations is difficult, in part because the data sets are small, with relatively few cases being pursued in any given year.

Koehler also notes the number of proceedings tends to accelerate toward the end of the year. "I fully expect the fourth quarter to be an active quarter," he says.

Speaking at an ethics and compliance conference last April, U.S. Attorney General Jeff Sessions said his department remains committed to enforcing the Foreign Corrupt Practices Act.

"We will continue to strongly enforce the FCPA and other anti-corruption laws," he said. But Sessions also voiced a concern expressed by many business leaders and politicians over the years: "You just simply can't have a situation in which your competitors pay bribes and you don't."

Witzel says the administration's enforcement practices should be watched closely.

"If there's a continued sharp decline in FCPA enforcement proceedings, that has the potential to undermine the credibility of the United States' commitment to combating international corruption," he says.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

DAVID GREENE, HOST:

In many parts of the world, paying bribes is a regular part of doing business. Here in the United States, Congress passed a law cracking down on bribery decades ago. But President Trump says the law puts U.S. companies at a competitive disadvantage. And as NPR's Jim Zarroli reports, a recent study raises questions about how his administration is enforcing the law.

JIM ZARROLI, BYLINE: In the 1970s, U.S. corporate bribery was a huge scandal. More than 400 corporations admitted they'd made questionable or illegal payoffs to gain business, including major companies such as Chiquita and Lockheed. Meredith McGehee is with the Campaign Legal Center.

MEREDITH MCGEHEE: What was happening was that many companies were making routine bribes to the heads of governments and others in countries just to simply buy the business.

ZARROLI: So in 1977, Congress passed the Foreign Corrupt Practices Act or FCPA, which made paying bribes illegal even if it was done in another country. The law has always had its critics. They say if U.S. companies are barred from paying bribes in places where doing so is routine, then they can't compete. And among the critics has been President Trump. Here he was in a 2012 interview on CNBC.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: Now every other country goes into these places, and they do what they have to do. It's a horrible law, and it should be changed. I mean, we're like the policemen for the world. It's ridiculous.

ZARROLI: Fast forward to today, and Trump administration officials, such as Attorney General Jeff Sessions, say they're committed to enforcing the law.

(SOUNDBITE OF ARCHIVED RECORDING)

JEFF SESSIONS: I think that's a law that's on the books that should be enforced. And I expect it will do so and continue to do so.

ZARROLI: But Sessions hedged his comments a bit adding...

(SOUNDBITE OF ARCHIVED RECORDING)

SESSIONS: You simply can't have a situation in which your competitors are - pay bribes, and you don't.

ZARROLI: That's a point that's been made by other U.S. officials, including some Democrats. So a lot of people in the white-collar law community are watching to see how the administration enforces the law. A recent article in The New York Law Journal said there's been a decline in bribery enforcement proceedings this year by the government. Attorney Steven Witzel co-wrote the article.

STEVEN WITZEL: In general terms, there's been a dramatic drop off from the average over the previous 10 years to what we're seeing in the Trump administration.

ZARROLI: Witzel cautions that nine months into the administration is probably too early to get a sense of what its record will be. There may be good reasons for the decline having to do with the transition between the Obama and Trump administrations.

One former Justice Department lawyer says he's seen no sign the government is any less committed to the law. And the department has continued with major enforcement actions initiated under Obama. A Swedish company that does business in the U.S. recently paid a fine of nearly a billion dollars for paying bribes in Uzbekistan. But Witzel says it's important to monitor the way the law is enforced.

WITZEL: If there is a continued sharp decline in FCPA enforcement proceedings, that has the potential to undermine the credibility of the United States' commitment to combating international corruption.

ZARROLI: When the bribery law was passed, it was something of an outlier internationally. Today many countries no longer treat bribery as a necessary evil and often work with U.S. officials to pursue violators. President Trump may not love the law, but there's evidence it's made a difference in the effort to fight global corruption. Jim Zarroli, NPR News, New York.

(SOUNDBITE OF ARMS AND SLEEPERS' "WHEN THE BODY") Transcript provided by NPR, Copyright NPR.