So Much Anti-Corruption Compliance News!

We’ve seen a flurry of news in anti-corruption compliance this week — and while not all of it is bad, nor does it mean an end to corporate ethics and compliance, lots of it is rather disheartening. Let’s take a look and try to make sense of things.

First is news from the Securities and Exchange Commission: the agency’s two top FCPA enforcement leaders are quitting. That would be Charles Cain, head of the FCPA enforcement unit since 2017, and Tracy Price, deputy chief of the unit since 2018. They are among several hundred SEC employees who decided to take an early retirement package acting chairman Mark Uyeda offered to everyone, ahead of an agency-wide reorg that will probably result in even more job losses anyway.

You can’t blame Cain (26-year veteran at the agency) and Price (27-year veteran) for getting out while the getting is good. The buyout offer was $50,000, and considering how DOGE and the Trump Administration want every federal agency to be a miserable place to work, plenty of people would do the same. Cain and Price both have served the public faithfully, when they could have cashed out long ago for law firm jobs making gobs more money.

Second is more news from the SEC: Uyeda and the DOGE cost-cutting team there are indeed preparing a big reorg of the agency. Most notably, the agency is going to abolish its current enforcement structure of 10 centers across the United States all reporting to one deputy director of enforcement; in favor of four regions, each reporting to a deputy director of enforcement. The SEC’s specialized units will report to a regional deputy director based in Denver. 

Third is a message delivered from lawmakers on Capitol Hill to the SEC: the leaders of the Senate Banking Committee, Sens. Charles Grassley (R-Iowa) and Elizabeth Warren (D-Mass.) reintroduced legislation to strengthen the SEC whistleblower program. 

Their bill would provide more protection from retaliation for whistleblowers who first report their concerns to supervisors, rather than the SEC; and directs the SEC to process whistleblower claims more quickly. “Although the SEC has recently improved,” the senators said, “it previously had a years-long backlog of claims.”

Will this (entirely sensible) legislation ever become law? Who knows. But it has already cleared an important first hurdle of winning bipartisan support — and even if the bill stalls, its mere existence is a message to the SEC that the whistleblower program is important to Congress, and lawmakers can make agency chiefs’ lives miserable in all sorts of ways if said chiefs ignore them. 

Meanwhile, at Justice Department…

We have a few anti-corruption items to note on the criminal side, too.

First, the department has dropped FCPA charges against two former Cognizant Technologies executives, who were poised to stand trial on charges of paying $2 million in bribes to win construction permits in India in the 2010s. Cognizant itself settled corporate FCPA charges related to the case years ago, in what has become a landmark example of FCPA self-disclosure and cooperation. 

This news about the two executives might be disappointing for anticorruption advocates, but it should not be a surprise. President Trump hates the Foreign Corrupt Practices Act. He ordered a pause on all FCPA enforcement, and dropping this case is part of that pause. Plus, these two men (Cognizant’s former president and general counsel) were charged years ago; they do have the right to a speedy trial. If anyone is to blame for these cases fizzling away, it’s the Justice Department under the Biden Administration and the U.S. justice system as a whole; they should have moved this case along years ago.

Second, corruption charges were dismissed this week against New York City mayor Eric Adams. That might seem like a blow to anti-corruption efforts, but I take a different view.

Remember that Adams was charged last year for accepting various improper gifts and goodies from foreign governments. Then the Trump Administration arrived, and moved to drop the case without prejudice — meaning, federal prosecutors would be free to revive the charges against Adams in the future. 

This was nothing more than a quid pro quo between Adams and the Trump Administration. The Administration would drop its charges, in exchange for Adams cooperating with the Administration’s immigrant deportation program. Senior Justice Department official Emil Bove all but admitted so in court filings. Moreover, the implicit threat was that if Adams later decided he no longer wanted to cooperate, prosecutors would re-file the charges against him. 

I mean, good lord. If any part of this mess was corrupt, the above arrangement was it.

Anyway, federal judge Dale Ho just dismissed the case with prejudice — so the Justice Department cannot re-file those charges against the mayor, no matter what Adams might do in the future. That is a victory for anti-corruption forces, because the corruption the Justice Department displayed in this case was far worse than anything Adams did. 

Anti-Corruption Compliance Still Endures

OK, so enforcement of the Foreign Corrupt Practices Act is going into the deep freeze. Even after attorney general Pam Bondi completes whatever re-assessment of FCPA enforcement she’s supposedly doing, I think we all know that vigorous anti-corruption enforcement won’t come from the federal government. Trump just doesn’t believe that corruption is inherently wrong, and his sycophants running the Justice Department are happy to follow his lead.

As I’ve said before, however, that doesn’t mean your anti-corruption risks go away. For example, Europe just announced a new anti-corruption taskforce meant to fill the vacuum of leadership that Trump has created — and before anyone rolls their eyes at Europe taking a serious shot at enforcement, remember that Europe could target U.S. companies for enforcement just as much as the U.S. has targeted foreign companies for FCPA enforcement in the past. Indeed, from Europe’s perspective, more rigorous enforcement against U.S. companies would be one very plausible retaliatory move against the trade war Trump just launched. 

As a bonus, the state of California also just fired off a reminder that violations of the FCPA are enforceable under state law. Specifically, violations of the FCPA can also qualify as violations of the state’s Unfair Competition Law, state attorney general Robert Bonta said in a legal alert released Thursday.

“California has a vested interest in defending honest business,” Bonta said in a statement. “Despite the Trump Administration’s actions, I remind businesses in California that bribing foreign officials is illegal under California law and will not be tolerated.”  

So yes, the Justice Department and SEC are walking away from FCPA enforcement for now, and quite possibly for the remainder of Trump’s time in office. That doesn’t mean your anti-corruption risks go away, and it especially doesn’t mean that your company can let its anti-corruption compliance capabilities wither.