WASHINGTON — President Donald Trump wanted to strike down a law that prohibits companies from bribing foreign officials, calling the ban “so unfair” to American companies, two Washington Post reporters recount in a new book.
In the spring of 2017, Trump was at a briefing with Rex Tillerson, then the secretary of state, and aides in the Oval Office. At the mention of a bribery allegation, Trump “perked up” and told Tillerson that he wanted his help in scrapping the Foreign Corrupt Practices Act, the authors write.
That law, enacted in 1977 and heavily enforced since around 2005, prohibits companies that operate in the United States from bribing foreign officials to obtain or retain business. It has become a major factor in corporate decision-making about operations abroad.
Trump said that it was “just so unfair that American companies aren’t allowed to pay bribes to get business overseas,” according to the book, “A Very Stable Genius,” by Philip Rucker and Carol Leonnig.
“I need you to get rid of that law,” Trump told Tillerson.
Tillerson explained to the president that he could not simply repeal the legislation, according to Rucker and Leonnig. He pointed out that Congress would need to be involved in any effort to strike it down.
Undeterred, Trump told Stephen Miller, a senior policy adviser, to draft an executive action to repeal the law. Tillerson, the authors write, later caught up with Miller in the hallway, where Miller said he had some skepticism about whether that plan for unilateral executive action could work.
The anecdote meshes with the president’s past views of the anti-corruption law. In a 2012 CNBC appearance, he called it a horrible rule and said that “the world is laughing at us” for enforcing it.
The Securities and Exchange Commission and Justice Department began enforcing the Foreign Corrupt Practices Act more concertedly about 15 years ago. It has led to huge fines for companies, including engineering conglomerate Siemens and Brazil’s state-owned energy company, Petrobras.
Critics of the government’s pursuit of cases under the law have argued that regulators are reading its language too expansively, holding back business.
Skeptics have included Jay Clayton, the chairman of the SEC, whom Trump nominated to the position in early 2017. Clayton was an author of a 2011 paper that argued that America’s anti-bribery policies tended “to place disproportionate burdens on U.S. regulated companies in international transactions,” hurting American competitiveness.
Despite such criticisms and Trump’s misgivings, top administration officials have pledged to uphold the law.
“We will continue to strongly enforce” anti-corruption laws, Jeff Sessions, the attorney general at the time, said in a speech in April 2017. “Companies should succeed because they provide superior products and services, not because they have paid off the right people.”
And under the current attorney general, William Barr, who was confirmed last year, enforcement actions have continued to rapidly roll in.
“The past three years have shown that very little has changed,” said Joshua Roth, a lawyer specializing in these issues at Fried, Frank, Harris, Shriver & Jacobson LLP, despite early expectations that enforcement might fall off under the Trump administration. “What some of us were forecasting really didn’t materialize.”
The administration has made other moves that dovetail with the president’s disdain for anti-bribery laws.
Early in his administration, Trump signed a measure from Congress striking down a rule from the SEC that would have required oil, gas and mining companies listed on U.S. stock exchanges to disclose how much they were paying to foreign governments.
After that decision, Sen. Benjamin Cardin, D-Md., and former Sen. Richard Lugar, R-Ind., the lawmakers who had sponsored the original legislation directing the commission to enforce that rule, wrote that Congress and the Trump administration had “abdicated American leadership in fighting corruption around the world.”
A Republican bill that would have permanently repealed the law underlying that energy-industry rule did not come up for a vote on the House floor before Democrats took over the chamber in January 2019.
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