Trump & Compliance: Here We Go Again

Well, brace yourselves, ethics and compliance professionals. The American people in their mighty wisdom (or lack thereof) have returned Donald Trump to the presidency. This is one of the most consequential moments in the history of the country, sure to affect regulatory enforcement, risk management, and corporate ethics for years to come. 

We might as well start considering those implications now.

Of course it’s far too early to speculate on specific policies and changes in enforcement posture; those moves will depend on whom Trump nominates to key offices, and we don’t know how he’ll approach that task. Broadly speaking, compliance officers will want to watch for the following:

• The deputy attorney general, who typically sets policy for enforcement of corporate crime, and is the person who decides when and how to revise the Justice Department’s guidelines for effective compliance programs.
• The chairman of the Securities and Exchange Commission, who leads the charge for new rules from the agency and for enforcement;
• The assistant attorney general for the Criminal Division, who oversees specific enforcement cases and churns out all those settlements the compliance community studies like tea leaves.
• The head of the Office of the Comptroller of the Currency, who is one of the top banking regulators in the United States, with broad policy-making and enforcement powers for that sector.
• The chairman of the Federal Trade Commission, who can bring enforcement actions over data privacy breaches, unfair or deceptive trade practices, and antitrust concerns.
• The director of the Office of Civil Rights within the Department of Health and Human Services, who serves as the top compliance regulator for the healthcare industry.

It will be many weeks, at least, before we know specific candidates for any of these positions. The only name I’ve heard so far is Dan Gallagher as a possible SEC chairman. Gallagher was a Republican commissioner during the Obama Administration, and these days is chief legal and compliance officer of Robinhood, that online trading app that grew like weeds during the pandemic.

One crucial question, however, is which Trump makes these appointments. If “Chamber of Commerce Trump” is in charge, then yes, expect someone like Gallagher at SEC and other reasonable (if rightward-leaning) appointments elsewhere. The only policy move I’m certain Gallagher would make would be to ease the rules for crypto investing.

On the other hand, if confused and delusional Trump is in charge, we could end up with kooks who see their sole mission as ramming through right-wing beliefs no matter what the cost to others or how nonsensical those policies are in the real world. Think someone like Vivek Ramaswamy running the SEC, the failed biotech entrepreneur and conspiracy theorist who was a primary candidate against Trump in 2024 before dropping out and endorsing him. 

That question about which Trump shows up for work — the one vaguely aware of economic policy fundamentals; or the cranky, gullible one who believes everything he sees on Twitter — will guide all these personnel appointments. We’ll see.

Trump’s First Effect: Nothing

Compliance officers trying to analyze Trump’s return will naturally be tempted to wonder what this means for FCPA enforcement, or enforcement of labor and workplace safety standards, or trade sanctions, or the regulation of banking, healthcare, and other industries. I’d suggest we first focus on a few bigger principles. 

Foremost, Trump promises everything, but usually fails to deliver. He is a fraud, not a policy wonk or coalition-builder. So when he talks about changing this, that, or the other thing, always remember that the most likely outcome for any of his promises is not much. The practical effect for corporate compliance is likely to be the same.

Repealing Obamacare in 2017, when Republicans had full control of Washington? Didn’t happen. Reforming the Foreign Corrupt Practices Act, which Trump himself called a “horrible law”? Didn’t happen. His grand, sweeping pronouncements often go nowhere. 

Even Trump’s famed executive order from 2017 that for every new rule an agency wanted to adopt, it had to repeal two existing rules — that was puffery, too. The executive order required agencies only to propose repealing two rules, not actually end them; and proposals related to national security (so that’s anti-money laundering, sanctions, cybersecurity, and more) were exempt. 

Clearly Trump will be better at advancing his agenda this time around, because we all learn from our mistakes. Then again, the hallmarks of his first term were incompetence, staff turnover, and misgovernance. This time around we’re likely to see Trump surround himself with even more partisan loyalists, pushing even more extreme and whack-a-doo ideas that voters won’t actually like when they see them. Then Trump will prevaricate and avoid responsibility, his other hallmark traits. 

So at least for the short term (many months, if not a year or more), I wouldn’t be surprised if the mundane mechanics of regulation and enforcement — which is where corporate compliance programs meet government — feel much the same as they ever have. 

Trump’s Biggest Effect: Rancor

This is what worries me the most about Trump’s return: his entire approach to power is based on division and discord, and he has sewn deeper discord in America than perhaps any single person has ever done. 

How are corporations supposed to maintain a strong, cohesive, ethical culture in that environment?

Trump has pitted men against women, old against young, evangelical against secular, white against minority. How are those groups supposed to get along now in one corporate workforce, especially if your business touches the Trump Administration somehow? 

We saw this in Trump’s first term. When furniture retailer Wayfair wanted to provide goods to the Trump Administration for migrant detention camps, employees staged a walkout and anti-Trump consumers showed up to support them. When Salesforce provided software to U.S. Customs and Border Protection, that exploded into a public relations nightmare. McKinsey canceled a $20 million contract with the Immigration and Customs Enforcement agency in 2018 when employees refused to work on it. 

Here’s what I said about this dysfunctional dynamic in 2018:

Mainstream America is a largely urban/suburban group with considerable social and economic power — but for the moment, relatively little political power. It leans marginally more Democratic than Republican, and it really can’t stand the ignoramus in the White House parading around like he has any clue about public policy.

Does anyone believe that dynamic will be better this time around? Trump is even more divisive; people are even more polarized and convinced of their righteousness. So what happens to corporate organizations when that social mess collides with a Trump agenda that horrifies half the country — and the highly skilled, highly productive half, to boot? 

For example, what happens if your company bids on contracts to provide goods and services to Trump’s migrant internment camps, and employees refuse to work on them? What if Trump sends soldiers to search your warehouse for undocumented workers, and employees rush their brown-skinned coworkers out the back door? What if your industry regulator tells you to terminate your diversity promotion goals immediately or face investigation — what do you tell your black and brown employees? How do you tell them that no really, we’re serious, the company cares about them and wants them to speak up about issues they see? 

These are the mundane headaches that will get worse under Trump. They will come for compliance, legal, and HR teams sooner rather than later, and good luck fostering a supportive ethical culture in that world.