Trump's FCPA freeze casts uncertainty over corporate bribery cases

The fate of prosecutions under the Foreign Corrupt Practices Act, and what that means for defense attorneys handling such cases, is murky two months after President Donald Trump signed an executive order pausing investigations and new cases.

One ongoing criminal case was dropped this month, but three others are proceeding. One is the prosecution of two former executives with voting machine maker Smartmatic USA Corp., which has sued Trump-supporting news organizations and won a big settlement after being accused of helping steal the 2020 election. U.S. v. Bautista et al., 24-CR-20343 (S.D. Fla., filed Aug. 8, 2024).

Federal prosecutors in Florida and Pennsylvania announced they were going ahead in brief statements to the court this month. "The United States hereby advises that the Government has completed its detailed review of the instant case as contemplated by Executive Order 14209, 90 Fed. Reg. 9587 (Feb. 10, 2025), and intends to proceed to trial," prosecutors wrote. U.S. v. Hobson, 22-CR-86 (W.D. Penn., filed March 29, 2022).

Trump's Feb. 10 executive order, "Pausing Foreign Corrupt Practices Act Enforcement To Further American Economic and National Security," instructed the U.S. Department of Justice to review guidelines and policies for FCPA investigations and enforcement actions during a 180-day period that will last until August.

No new FCPA investigations and enforcement actions will be pursued by the Justice Department during that time, but U.S. Attorney General Pam Bondi was instructed to "review in detail all existing FCPA investigations or enforcement actions and take appropriate action with respect to such matters to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives."

That has left attorneys who advise clients and other legal experts who follow FCPA litigation debating how companies and law firms should respond to Trump's order.

Stephen G. Larson, a partner with Larson LLP in Los Angeles, said Trump's executive order offers openings to attorneys representing companies and individuals in ongoing cases.

"The Administration's priorities create more opportunities for FCPA defense lawyers to press prosecutors to consider the geopolitical concerns and economic consequences of over-enforcement," he wrote in an email Thursday.

"However, the shift in priorities does not provide a blank check to commit bribery, or alter the legal protocols that individuals and companies should observe when conducting business overseas," Larson added.

Mike Koehler, an FCPA expert who teaches at Texas A&M University School of Law and other schools, said that while Trump's executive order is new, debates about the scope of FCPA prosecutions have been a topic of bipartisan debate for many years.

"The best advice is to take a deep breath," he said in a phone interview. "There are any number of reasons that companies will want to comply with the FCPA."

He said some law firms - which can earn a lot of money handling FCPA investigations - are overreacting in their client alerts. He does not believe Great Britain, France and Switzerland's announcement last month of a new alliance and formation of a joint task force aimed at tackling international bribery and corruption is significant.

Those countries have existing anti-corruption statutes.

Nor does Koehler take California Attorney General Rob Bonta's announcement that the state could pursue FCPA violations under its unfair competition law seriously, because no state has ever done so.

Bonta, in an April 2 statement, wrote: "Illegal activity is still illegal. ... Despite the Trump Administration's actions, I remind businesses in California that bribing foreign officials is illegal under California law and will not be tolerated."

Kevin J. Harnisch, Norton Rose Fulbright US LLP's head of white-collar defense and investigations, said in an interview that one current debate is whether companies should self-report any possible wrongdoing.

One school of thought, he said, is that there is little point in confessing to crimes the Justice Department may no longer care about. But others warn that companies may have other exposure because the statute of limitations lasts at least five years - longer than Trump will remain in office, assuming he doesn't change his mind about the FCPA himself.

"A lot of this will become clearer once we get the guidance," Harnisch said. "Absent a very egregious fact pattern, I would be less inclined to run into the Department of Justice."

But he has not seen a change in advice about companies maintaining their own compliance programs.

William T. Garrett, an attorney and senior content manager of Stanford Law School's FCPA Clearinghouse, said prosecutions during the last decade under the 1977 law have targeted more foreign companies than domestic ones. Nine of the 10 largest monetary sanctions have been imposed against foreign companies.

The law was sparingly enforced until 2004, when it became a more common prosecution that brought in significant damages, peaking during the Obama administration. Its use has trailed off since then, and there have been only 33 FCPA prosecutions since 2021, according to the clearinghouse data.