A couple weeks back, I published a post (really, more of an extended wail) about the likely consequences of the Trump presidency for anticorruption efforts. Among my many worries was the concern that under a Trump administration, we may see the end (or at least the significant cutback) of the era of aggressive enforcement of the Foreign Corrupt Practices Act. Other analysts—notably Peter Henning and Tom Fox—are less pessimistic in their assessments, and have written interesting explanations as to why FCPA enforcement is unlikely to change much under President Trump. I hope they’re right. And I suspect they probably are, if only because commentators—including, perhaps especially, so-called “experts”—have a demonstrated tendency to over-predict dramatic change. Most of the time, the safest prediction is that the future will resemble the past. And more specifically here, the forces of inertia in the U.S. federal government are strong, and sudden changes are both rare and unlikely.

Still, I’m not sure I’m fully convinced by the reasons that Mr. Fox, Mr. Henning, and others have offered for their more sanguine conclusion that FCPA enforcement will not change much under a Trump Administration. So, with the understanding (and sincere hope) that I’m probably wrong, let me address some of the principal arguments that have been advanced for the “no change” prediction.

Before proceeding, it’s probably worth distinguishing two possible avenues for change in FCPA enforcement: (1) legislative revision of the statute, and (2) executive-driven changes in enforcement policy. These are related, but they’re sufficiently distinct that I’ll treat them separately, before turning to some general arguments that would apply to both.

Start with legislative change. Here the issue is not so much that President Trump will push for significant revisions to the FCPA, but rather that a unified Republican House and Senate are more likely to pass such revisions, and that a Trump Administration would accept them (perhaps enthusiastically, perhaps not, but  in the case of legislation it doesn’t really matter). To be clear, I am not suggesting or predicting that Congress would go so far as to repeal the FCPA. I agree with Mr. Fox that nobody is calling for that, and the potential adverse political consequences of doing so would likely be sufficient to deter any such legislation from passing. My worry is not outright repeal, but rather so-called “FCPA reform” that is in fact designed to significantly weaken the statute. This does not seem like such an outlandish prediction: After all, the Chamber of Commerce has pushed hard for exactly this sort of “reform” in the past, most notably in its 2010 Restoring Balance report, which was part of a concerted—though ultimately unsuccessful—effort to weaken the statute.

Mr. Fox suggests that “those who have called for [the FCPA’s] lessening have been debunked as those who simply want to lessen the effectiveness of the world’s leading anti-corruption law.” I agree that many of the arguments for FCPA reform, including several of those in the Restoring Balance report, have been debunked, if by “debunked” we mean refuted with logic and evidence. But I disagree that those arguments could no longer get any political traction, or that it wouldn’t be possible to package a set of FCPA reforms as merely “technical” changes to curb “excessive” or “unpredictable” FCPA liability. Mr. Fox is perhaps more confident than I am that the legislative process will effectively reveal (in his words) the “true intention” of those seeking FCPA reform, and that even a Republican Congress would recognize that “US companies obtaining business through illegal actions is not in the interest of the US.” Alas, there are lots of things that are not, in my view, in the interests of the United States that I suspect the Republican Congress and President Trump would be all too happy to enact into law. And the considerations that Mr. Fox raises—along with the idea that the FCPA is in fact good for the US business community on net, at least in the long term—have not stopped the Chamber of Commerce, the defense bar, and a whole host of academic and other commentators from trumpeting a range of FCPA “reforms” that are clearly meant to make it harder for the US government to prosecute these cases.

That said, I do place some hope in two considerations, neither of which has much to do with Congress seeing the light and recognizing that weakening the FCPA would be bad for the country (and the world):

• The first is the simple inertia of the US legislative process. That inertia, coupled with the fact that other issues (like taking away health insurance from vulnerable populations and slashing taxes on high earners) are likely to take priority, means that FCPA reform might fail to pass even if majorities in both chambers would vote for it.
• Second, I take comfort in the fact that some of the items on the FCPA “reform” crowd’s wish-list—especially their Holy Grail of a “compliance defense”—are unlikely to have much of an effect. (That said, other proposed reforms, like substantially narrowing the definition of “foreign official” and limiting the scope of corporate criminal liability, might have much more of an adverse impact.)

Now, let’s put aside potential legislative changes and think about how a Trump Administration (and a Trump-appointed Attorney General and SEC Chair) might unilaterally alter FCPA enforcement policy.

My main concern, as I expressed it in the earlier post, is that since Donald Trump is on record as calling the FCPA a “horrible law,” and is more generally sympathetic to the interests of the U.S. business community (and not likely to be that interested in promoting the welfare of the victims of corruption in places like Africa and Asia), his administration would place substantially less emphasis on FCPA enforcement. Mr. Fox, Mr. Henning, and others pushed back against that prediction for a number of reasons, some of which are more convincing than others. A few thoughts here:

• One argument that neither Mr. Fox nor Mr. Henning made, but that I’ve seen others float, is that a Trump Administration is unlikely to scale back FCPA enforcement because the FCPA is a “money maker” for the US government – the fines the government recovers exceed the costs of enforcing the statute. I don’t find that plausible for two reasons. First, as I’ve argued elsewhere, the notion that FCPA enforcement has ever been driven by these sorts of financial considerations has never been particularly plausible, given that the impact of FCPA enforcement on the overall US budget is negligible. Second, and related, the concern about declining enforcement has to do with the political interests of those with influence over a Trump DOJ and SEC, and if those political interests are strong enough, it’s hard to believe they’d be restrained by concern for the overall impact on the national budget (not least because Trump’s policy proposals during the campaign, such as they were, indicate very little concern for the nation’s fiscal health).
• Mr. Fox and Mr. Henning make a different and more sophisticated argument related to funding, pointing out that—in contrast to other areas of white collar crime enforcement—FCPA enforcement is relatively inexpensive for the government, because the FCPA enforcement model relies so much on corporate self-reporting and internal investigations, rather than on large-scale government investigations. That’s certainly true, and it’s one of the reasons the DOJ and SEC have managed to be so effective despite relatively having few people focused on these cases. But it doesn’t provide much comfort, for two reasons. First, as noted above, the main concern about FCPA enforcement in a Trump Administration is not budget cuts, but rather politics and priorities. Second, I think perhaps Mr. Fox and Mr. Henning underestimate the degree to which the government’s current enforcement strategy, which relies so much on the company taking the lead, is effective only because of the implicit and credible threat of government-led action if the company doesn’t disclose and/or cooperate. That threat is the “club behind the door” that makes self-disclosure a more attractive option, and if that threat is removed, companies’ incentives to disclose and cooperate will decline as well.
• Mr. Henning emphasizes that a lot of the enforcement policy at DOJ (and SEC) is driven by the career lawyers, not the top-level political appointees (and certainly not the President). And FCPA enforcement policy is not likely to be a Trump Administration’s highest priority. I think that’s basically right, and it does give me some cause for hope. Bureaucratic inertia—including the ability of career lawyers to do their own thing without a whole lot of responsiveness to their political overseers—is often seen as a problem, but in this case it may be a blessing. Hooray for bureaucratic inertia! Three cheers for unaccountable civil servants! (I realize that taking this position now may seem unprincipled, though in my defense I wrote an academic paper in 2008 making a more general version of this sort of argument.) As I said in my original post, it’s precisely for this reason that I don’t anticipate that FCPA enforcement will shut down right away. Rather, my concern is that these forces won’t be enough to prevent it from gradually tapering off, if the Attorney General and the heads of the Criminal Division and Fraud Section don’t see FCPA enforcement as a priority, and indeed see it mainly as a sanctimonious and moralistic imposition of extra burdens on US business.
• Speaking of which, as Mr. Fox points out, lots of FCPA enforcement actions—including 7 of the 10 biggest to date—involve non-US corporations, and going after them would be in keeping both with Trump’s anticorruption rhetoric and his rhetoric on trade and foreign competition. So in that area, we might expect FCPA prosecutions to keep going strong. True enough. But that doesn’t make me feel that much better, because FCPA enforcement that is biased against foreign companies is both wrong and likely to undermine support for the statute (and US leadership on this issue) in the longer term. Moreover, selective FCPA enforcement against domestic firms–scrutinizing those viewed by the Trump Administration as political enemies aggressively, but looking the other way for firms controlled by Trump’s cronies and allies–would be worse than no FCPA enforcement at all. Yet that sort of politicized enforcement seems like a very real possibility.

Finally, with respect to both potential legislative reform and change to enforcement policy, Mr. Fox, Mr. Henning, and others make a broader point: that given Trump’s anticorruption campaign rhetoric, he won’t want to be seen as going “soft” on corruption. I hope this is true, but I have no particularly strong reason to believe it, and I fear that it’s more wishful thinking than anything else. Trump’s campaign rhetoric about “corruption” was not really about bribery (foreign or otherwise), but rather meant to tap into an inchoate sense that the US government is not working for “ordinary Americans” (by which he clearly meant middle- and working-class white Americans), because of a betrayal by self-serving “elites.” And the sorts of changes I worry about—legislative changes that can be packaged as FCPA “reform”, and gradual changes in enforcement policy that are unlikely to attract much media coverage—are unlikely to be noticed by many Trump supporters, even if they would care. Moreover, the idea that Donald Trump would somehow feel constrained by his campaign rhetoric doesn’t seem especially plausible, given his history of wild inconsistency. Indeed he’s already walked back at least some of his campaign promises, and ignored others.

I admit, it still feels a bit strange to spend a lot of time considering how the election of a narcissistic, racist, xenophobic, misogynistic would-be autocrat affects FCPA enforcement. If the airplane is on fire, is it really worth worrying about whether this will adversely affect the in-flight entertainment system? And maybe it’s pointless to speculate too much—as a couple of commenters on my earlier post noted, we don’t know what’s going to happen until it happens (a banal truism if there ever was one). But I guess for those of us who care about this issue, and want to figure out a way forward, it might be worthwhile to think about different scenarios, both to be prepared and to try to think through possible responses. This post is offered in that spirit.