US team investigating foreign bribery dwindles, sources say

The U.S. Justice Department's Foreign Corrupt Practices Act (FCPA) enforcement unit has been significantly reduced, shrinking from 32 to approximately 15 prosecutors following President Trump's February executive order calling for a pause in FCPA enforcement and a subsequent DOJ review. This reduction in staff occurred as prosecutors moved to other units within the Criminal Division, and new guidance on handling FCPA cases is expected soon. Attorney General Pam Bondi has also directed the unit to prioritize cases related to drug cartels, shifting focus from traditional foreign bribery enforcement.

Analysis

The U.S. Justice Department's unit dedicated to enforcing the Foreign Corrupt Practices Act (FCPA) has experienced a significant reduction in personnel, shrinking from 32 prosecutors to approximately 15. This substantial decrease follows a February executive order by President Donald Trump initiating a pause in FCPA enforcement and a 180-day review of its application, leading to an exodus of staff to other areas within the DOJ's Criminal Division, such as Healthcare and Marketplace Fraud units. Concurrently, Attorney General Pam Bondi has directed the remaining foreign bribery prosecutors to prioritize cases related to drug cartels, and a memo from the Criminal Division has de-emphasized foreign bribery relative to other corporate enforcement priorities like fraud in government programs and tariff evasion. New guidance on FCPA case handling is reportedly being drafted and is expected soon, which will further clarify the administration's approach to this cornerstone anti-corruption law. This shift indicates a broader trend of scaling back enforcement against white-collar crimes and a re-prioritization within the Justice Department, potentially altering the landscape for companies operating internationally and their exposure to anti-bribery actions.

Key Decisions for Investors

• Investors should re-evaluate the compliance and geopolitical risk profiles of companies with significant international operations, particularly in sectors prone to corruption, given the reduced FCPA enforcement capacity and shifting priorities within the DOJ.
• Monitor the forthcoming DOJ guidance on FCPA enforcement closely, as this will provide critical insights into the new prosecutorial standards and the likely impact on corporate liability for foreign bribery.
• Consider that a perceived weakening in U.S. anti-bribery enforcement could lead to increased long-term reputational and legal risks for companies if internal compliance standards are relaxed, or if a subsequent administration reverses this trend.