The president has said the law is unfair to U.S. businesses. But lawyers say weakening it could end up costing corporate America big.
President Trump has long argued that a law barring companies from bribing officials of foreign governments stifles deal-making abroad and puts American companies at a disadvantage.
But when he effectively put the Foreign Corrupt Practices Act out of commission this week, the order did not elicit the cheers from corporate America that you might have expected. Lawyers who specialize in corporate corruption cases told DealBook that moves to potentially weaken the law could backfire on multinationals by actually raising the cost of doing business overseas.
The F.C.P.A. has ensnared the likes of McKinsey, Petrobras and Goldman Sachs in some of the biggest corporate bribery scandals of the past half century. It is supposed to send the message that paying or seeking bribes to win business will not be tolerated anywhere, said William Garrett, a legal expert who manages the Foreign Corrupt Practices Clearinghouse, a project developed by Stanford Law and the law firm Sullivan & Cromwell.
The F.C.P.A. isn’t dead. But it’s up for review, and the concern is it could be weakened or shelved. That could create an open season for kickbacks — a price no business wants to pay. “It’s kind of the same idea like you don’t pay kidnappers, right? Because you just embolden the kidnappers to keep doing it,” Garrett said.
A recap: Trump ordered the Justice Department to cease enforcing the F.C.P.A. for the next six months and instructed prosecutors to refrain from bringing F.C.P.A. cases until Pam Bondi, his attorney general, reviews and potentially recommends new enforcement guidelines. Bondi can extend the review period if needed.
The order raises questions about the law’s future. While it does not eliminate the F.C.P.A., it’s unclear what changes Bondi may make. And what about the S.E.C., another agency that enforces F.C.P.A. violations? Will it, too, demand a second look? Paul Atkins, Trump’s pick to run the agency, has a track record of taking a light touch to corporate enforcement actions.
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Source: Elections - nytimes.com
