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A radical makeover at the US department of justice has seen key drives to fight corruption hamstrung in ways that could benefit US businesses operating abroad and foreign kleptocrats, including some Russian oligarchs.
The moves have sparked sharp criticism by former US prosecutors, transparency experts and top Democrats, who warn that the moves to cut back on anti-corruption efforts is a huge setback for American efforts to clean up global business practices and tackle the power of oligarchs and of authoritarian rulers.
Donald Trump’s US attorney general Pam Bondi – long an ally of the president – has moved fast to halt enforcement actions for six months under the 1977 Foreign Corrupt Practices Act that bars bribes by US businesses to win overseas deals, which some American firms have long charged gives certain foreign firms a competitive edge.
Trump sounded bullish while signing an executive order in February to halt the department’s FCPA investigations for six months to review policy guidelines. “It’s going to mean a lot more business for America,” Trump boasted, to the dismay of critics.
In another fast foreign shift at the DoJ, a Bondi memo last month indicated that two units aimed at fighting kleptocracy – including some major Russian oligarchs – were being disbanded with some lawyers redeployed to focus on new priorities involving fighting drug cartels and transnational crime.
Veteran prosecutors say such policy changes are short-sighted and dangerous, stressing they could fuel bribes by US firms to win deals abroad, and let Russian oligarchs and other kleptocrats facing sanctions or other penalties for illicit activities such as money laundering, go unpunished.
“Jettisoning the DoJ’s robust FCPA enforcement under the guise that it somehow makes US companies anti-competitive seems stubbornly ignorant,” former acting chief of the fraud section Paul Pelletier told the Guardian. “US public companies very much understand that this type of corruption is actually bad for business and that shareholders won’t tolerate it.
“This new policy, however, is not likely the result of ignorance. More credibly, the rescission of FCPA enforcement is a clarion signal to non-public US companies to corruptly seek a beachhead for their enterprises in foreign countries.”
Pelletier added that the “elimination of the department’s hugely successful anti-kleptocracy initiatives allegedly to focus on drug cartels is also colossally tragic. Bondi, a former prosecutor, must understand that robustly targeting oligarchs and drug cartels are not mutually exclusive. Plainly, the neutering of kleptocracy prosecutors, by design, empowers those authoritarians hellbent on looting their countries.”
Other former prosecutors voice similar concerns.
“Federal transnational anti-corruption enforcement is getting slammed by an administration that not only shows no interest in such efforts but seems to affirmatively embrace bribes by US firms as a way to keep up with the competition,” said Daniel Richman, a former federal prosecutor and now a law professor at Columbia University.
Richman noted caustically that “the abandonment of the anti-kleptocracy initiatives might be good for US condo sales. But if the Trump administration thinks giving aid and comfort to autocrats and corrupt officials abroad who want to stash their money here is in our national interest, it has a sleazy real estate broker’s view of the national interest.”
The president and Bondi, a former Florida AG who helped defend Trump during his first impeachment, have championed these moves as part of a strategic shift at the DoJ to boost other Trump priorities and ones they claim are good for business.
Trump’s FCPA order, for instance, repeats the mantra of business foes of the 1977 law: Trump charged that “over-expansive and unpredictable FCPA enforcement against American citizens and businesses … for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security.”
At the DoJ, meanwhile, Bondi moved fast on her first day to issue a directive ending “Task Force KleptoCapture”, which had targeted Russian oligarchs with Kremlin links since the 2022 invasion of Ukraine, with some notable results.
Last year, the department announced the taskforce had charged more than 70 individuals for “violating international sanctions and export controls levied against Russia”, and some, such as Russian oil and metals multibillionaire Viktor Vekselberg, had their yachts seized.
According to Bondi’s directive, staff working on KleptoCapture and another older unit, dubbed the Kleptocracy Asset Recovery Initiative, would be reassigned to fight drug cartels and transnational criminal organizations.
In a related shift that seems to fit Trump’s political agenda and pro-Russia tilt, Bondi quickly disbanded the FBI’s foreign influence taskforce, which was launched in 2017 with the aim of countering secret operations waged by Russia, China and other foes to affect US politics and public opinion.
In disbanding the FBI taskforce, Bondi’s order portrayed the move as one of bigger priorities, despite warnings from several intelligence agencies that foreign disinformation influence operations have been mounting and pose dangers.
“To free resources to address more pressing priorities, and end risks of further weaponization and abuses of prosecutorial discretion, the Foreign Influence Task Force shall be disbanded,” the Bondi order stated.
Likewise, Bondi eased criminal actions for violations of the decades old Foreign Agents Registration Act, a weapon used by the DoJ to combat foreign disinformation and influence operations that requires lobbyists working for foreign governments to register with the US government.
DoJ veterans and anti-corruption advocates are especially critical of Bondi’s disbanding the anti-kleptocracy units, which they say could boomerang and weaken efforts to go after drug cartels, while spurring more illicit foreign funds moving to the US.
“It makes no sense to treat kleptocracy and drug trafficking as if they were in separate silos,” said Stefan Cassella, an ex-federal prosecutor who now runs Asset Forfeiture Law.
“A corrupt foreign official who is investing criminal proceeds in the United States could very likely be investing the bribes he received from the drug cartels. Thinking of these as separate issues is naively simplistic; you have to take a holistic approach.
“Disbanding the groups of prosecutors and agents who have specialized in kleptocracy deprives law enforcement of the very people and resources who are needed when public corruption and drug trafficking overlap, as they so often do.”
Cassella added that the DoJ changes “not only allow these people to go unpunished, but allows them to use the US financial system to hide and invest their wealth”.
Cassella’s critique was echoed by Gary Kalman, the head of Transparency International’s US operations, who stressed that “these anti-kleptocracy initiatives provided a place for critical information sharing. Their dissolution could slow or block timely enforcement.”
Kalman pointed out that the Bondi directives could actually undercut some of the DoJ’s new goals. “It’s very unclear what the shift in priorities toward cartels and transnational criminal organizations (TCOs) means. Kleptocrats regularly partner with criminal organizations.
“The lack of clarity creates uncertainty which is an environment, traditionally, in which bad actors thrive and honest US companies do not.”
Some ex-DoJ lawyers expect that Bondi will have to reverse course in some fashion regarding the anti-kleptocracy units.
“New DOJ leadership has put well-financed, cross-border cartels in the center of its sights,” said Andrew Adams, a partner at the law firm Steptoe who used to be a top national security official at the DoJ overseeing global sanctions programs.
“Fighting those groups means fighting their illicit funding and exploitation of US businesses. Where new leadership has disbanded some legacy programs that would drive that enforcement, I fully expect they will want and need to stand up new units of the same models, and in short order.”
Concerns about Bondi’s early moves have also been rising in Congress.
“Pam Bondi arrived and instantly closed its anti-kleptocracy work that had successfully targeted Putin’s Russian oligarchs,” said Democratic Senator Sheldon Whitehouse of Rhode Island.
“It’s odd that a state AG entering a big department would so quickly pick that small but effective office. Add to that the disbanding of other anti-kleptocracy initiatives and the presumptive nonenforcement of foreign corruption cases. This is a gift to corrupt foreign kleptocrats and requires renewed examination of Trump/Russia.”
With regard to the AG’s FCPA order, Democratic representative Jamie Raskin of Maryland, who taught constitutional law for over two decades, condemned Bondi for putting “America on the side of ‘routine’ corrupt business practices all over the world”, adding that it gives corporations “free rein to pay bribes, kickbacks, and financial tribute to corrupt foreign officials”.
Ex-prosecutors raise similar alarms about bad fallout from Bondi’s FCPA move.
“Failing to prosecute the FCPA is the epitome of corruption,” said former federal prosecutor Paul Rosenzweig. “ You don’t stop prosecuting while you’re reviewing.”
“It is unsurprising that the hollowing out of anti-corruption efforts could well benefit Trump and his supporters. That’s what Trump assumes is the proper result of his election.”
Looking ahead, ex-federal prosecutor Barbara McQuade, who now teaches law at the University of Michigan, predicts negative consequences with the halt in FCPA enforcement and the disbanding of the anti-kleptocracy units.
She said: “The DoJ’s shift in priorities away from corruption enforcement concerns me, because it removes an important deterrent against bad actors in American business and foreign kleptocrats.
“The real victims of corruption are members of the public, who end up paying more for goods and services and receiving poorer quality in exchange. I worry that this shift will normalize corruption.”
