Monday, March 13, 2017

Trump to Weaken Anti-corruption Efforts Further

The "Foreign Corrupt Practices Act" is the jewel in the crown of America’s fight against international business bribes and corporate favors. Intended to promote American business and foreign-policy ideals around the world, and give US companies a tool to battle corruption abroad, it has also helped other countries crack down on bribery, and has extracted billions of dollars in fines.

The FCPA makes it illegal for US companies and people working abroad to engage in corrupt acts such as bribing officials. It bans foreign firms and people from doing the same in the US. American companies with listed securities must keep accurate, transparent records and not hide payments in “off-the-books” accounts.

But under US president Donald Trump, it may lose its bite... he has killed a rule to crack down on foreign bribery by US energy companies, refused to release his tax returns, and canceled ethics training for White House staff.

Trump’s business has also come under public scrutiny regarding the FCPA. The New Yorker reported on March 6 that the Trump Organization had helped build a hotel in Azerbaijan owned by the family of a cabinet minister with ties to the Iranian Revolutionary Guard Corps, which the US government has accused of money-laundering and terrorism. Though it’s not clear if the deal itself violated the FCPA, in order to avoid breaking the law, US companies usually extensively investigate potential partners for corruption. One lawyer told the New Yorker, “I’ve had very few clients do so little due diligence” as the Trump Organization did.

Finally, Trump has nominated Jay Clayton, a Wall Street defense lawyer, to head the Securities and Exchange Commission. The SEC enforces the FCPA along with the Department of Justice (DoJ). In 2011 Clayton co-wrote a lengthy paper criticizing the law and its “zealous” enforcement......