Trump lifts ban on US weapons companies bribing foreigners

On February 10, President Trump issued an executive order that directed Attorney General Pam Bondi to pause the enforcement of the Foreign Corrupt Practices Act. The FCPA was the first law in modern history to ban a country’s own citizens and companies from bribing foreign officials.

Citing the law as one of the “excessive barriers to American commerce abroad,” President Trump has instructed the attorney general to — at her discretion — “cease the initiation of any new FCPA investigations or enforcement actions.” The executive order further requires the DOJ to provide remedial measures for those who have faced "inappropriate" penalties as a result of past FCPA investigations and guilty verdicts.

This move by the Trump administration to pause enforcement of the foreign bribery law now and allow it to be put on the shelf later risks a revival of the pre-1970s period, when bribery was a routine practice among major U.S. arms contractors.

In the post-Watergate reform period in Congress, in late 1975 and early 1976, Idaho Senator Frank Church’s Subcommittee on the Conduct of Multinational Corporations of the Senate Foreign Relations Committee exposed widespread foreign bribery on the part of U.S. oil and aerospace firms, with the starring role played by Lockheed Martin, which bribed officials in Japan, Germany, Italy, the Netherlands, Saudi Arabia, Nigeria, Indonesia, Mexico, and Colombia in pursuit of contracts for its civilian and military aircraft.

The revelations caused political turmoil in the recipient countries, led to the resignation of Lockheed’s two top executives, and prompted Congress to pass the Foreign Corrupt Practices Act of 1977.

The repercussions were most severe in Japan, where Prime Minister Kakuei Tanaka was arrested and convicted of receiving bribes in the scandal — the first time a sitting Japanese prime minister had been arrested, in what one analyst called “Japan’s biggest scandal of the postwar era.”

Sen. Church made it clear that in his mind, the problem went far beyond the question of corruption: “It is no longer sufficient to simply sigh and say that is the way business is done. It is time to treat the issue for what it is: a serious foreign policy problem.”

Among the issues he cited were potential destabilization of democratic allies and closer ties with reckless, dictatorial regimes driven by financial motivations rather than careful consideration of U.S. security interests.

As noted above, President Trump’s primary reason for freezing enforcement of the anti-bribery law is that he believes it has been used unfairly, to the detriment of U.S. companies and U.S. security. This argument does not hold up to scrutiny.

First of all, there is no evidence that outlawing bribery has hurt the U.S. arms industry. The United States has been the world’s largest arms supplier by a large margin for 25 of the past 26 years, and major U.S. arms offers reached near record levels of $145 billion last year.

The real issue is how to stop dangerous, counterproductive arms transfers, not how to make it easier to cash in on sales that too often undermine U.S. interests.

A 2022 Quincy Institute study found that U.S.-supplied weapons were present in two-thirds of the world’s active conflicts, and that at least 31 clients of the U.S. arms industry were undemocratic regimes. Fueling conflicts and supporting reckless authoritarian regimes are destabilizing to regions of importance to U.S. security. They also risk drawing the United States into a direct, boots-on-the-ground conflict.

If President Trump is serious about his campaign pledge to “stop the war profiteering and to always put America first,” it is the worst possible time to shelve the FCPA, given that bribery by U.S. companies is alive and well. Just last October, RTX (formerly known as Raytheon) was forced to pay over $950 million in fines after it was found to have engaged in multiple schemes to defraud the Department of Defense and violate the FCPA and the Arms Export Control Act by paying bribes to Qatari officials in pursuit of major military contracts with that nation.

Not only should the FCPA be vigorously enforced to stop bribery of foreign officials by U.S. companies, but the law must also be strengthened to combat the flip side of the corruption coin — foreign bribes accepted by American officials. The recent sentencing of former Senator Bob Menendez (D-N.J.) to 11 years in prison after being found guilty of bribery, extortion, obstruction of justice, and acting as an unregistered foreign agent for Egypt and Qatar underscores the need for stronger enforcement mechanisms.

Menendez’s guilty verdict as well as Rep. Henry Cuellar’s (D-Texas) indictment on charges that included unlawful foreign influence and bribery reveal how those who wield influence over American foreign policy can be paid off in exchange for exerting unwarranted influence on behalf of a foreign government.

The debate over bribery may be obscuring a larger truth: U.S. arms sales policy is in desperate need of an overhaul. The governing legislation — the Arms Export Control Act — was passed in 1976, when the world was a very different place than it is today.

The law gives Congress the authority to block a major arms sale by passing a joint resolution of disapproval in both houses. But given that they would be opposing a sale already approved by the Executive Branch, they would likely need a veto-proof majority. This standard is too hard to meet. For example, when Congress voted against a sale of precision-guided munitions to Saudi Arabia in the midst of that nation’s brutal intervention in Yemen, the measure was vetoed by President Trump

A major change that could have a significant impact on U.S. arms sales decisions is legislation that would “flip the script” by requiring an affirmative vote of Congress before major sales to key countries are allowed to go forward. This would strengthen Congress’s hand and make it easier to stop reckless sales that might fuel conflict or enable human rights abuses.