How Much Should We Worry That Trump’s Top Economist Is “Looking Into” Weakening the FCPA?

As regular GAB readers have likely figured out, I’m not terribly good at providing timely “hot take” reactions to news items—I’m too slow and get too distracted with other things, and by the time I weigh in on some recent development that caught my eye, I’m usually a couple of news cycles behind. So it will be with this post. But I did want to say a bit about the mini-controversy over comments a couple weeks back from Larry Kudlow, the Director of the White House National Economic Council, about the Trump Administration’s views on the Foreign Corrupt Practices Act (FCPA). For those who might have missed the reports, here’s the basic gist:

A forthcoming book about the Trump Administration includes the story (which had already been reported multiple times) that back in 2017, President Trump had vigorously complained to then-Secretary of State Rex Tillerson that the FCPA put U.S. companies at an unfair disadvantage and ought to be scrapped or drastically altered. (Tillerson, to his credit, pushed back, and no action was ultimately taken.) Several pre-release commentaries on the book focused on this anecdote (see here and here), and a couple weeks back a reporter asked Kudlow about it. Kudlow responded, “We are looking at [the FCPA], and we have heard some complaints from our companies…. I don’t want to say anything definitive policy-wise, but we are looking at it.” When pressed for details, Kudlow said, “I don’t want to say anything definitive policy-wise…. Let me wait until we get a better package [of reforms].”

Kudlow’s comments triggered a great deal of critical reaction, including statements supporting the FCPA from civil society organizations like Transparency International and the Coalition for Integrity. These statements were forceful but measured, mainly emphasizing the benefits of the FCPA. Some other media reactions were more impassioned, playing up the narrative that the Trump Administration was planning to push for the legalization of (foreign) bribery (see here and here). That latter strain in the commentary, in turn, provoked pushback from other analysts, who saw Kudlow’s remarks (and perhaps also the President’s own statements and actions in this area) as no big deal (see here and here).

My own take is somewhere in the middle. On the one hand, we shouldn’t exaggerate the significance of Kudlow’s remarks. But neither should we dismiss them as meaningless or harmless. Continue reading