By Matthew Stephenson
Last week, on January 20, Joe Biden was sworn in as the 46th president of the United States replacing Donald Trump.
First, let’s all breathe a collective sigh of relief.
OK, now we can start thinking about what we’ve learned from this traumatic experience. There is no shortage of political and cultural commentary on the Trump era and its implications, and I have little of substance to add to that general discussion. But, given that this is a blog specifically focused on corruption, let me offer a few reflections on the implications of the last four years for corruption and anticorruption in the United States.
At the risk of self-indulgence, I’ll frame this preliminary discussion in terms of my own guesses, as of four years ago, about how the Trump Administration would affect U.S. corruption and anticorruption policy. Immediately after Trump’s election, I wrote a despondent post about why I thought that Trump’s election would be a disaster for the fight against corruption on many different dimensions. Roughly a year later, I did a follow-up post assessing my own predictions, concluding that on some issues my pessimistic forecasts proved inaccurate (for reasons I did my best to assess), while on other dimensions the Trump administration was as bad or worse than I had feared. Now that Trump is finally out of office, it’s a good time for another retrospective assessment—both to understand where things stand now with respect to U.S. policy and leadership on anticorruption issues, and also to see what lessons we might be able to draw from the experience of the past four years.
On at least a couple of issues, my initial predictions were far too pessimistic. For example, I feared that U.S. enforcement of the Foreign Corrupt Practices Act (FCPA) would weaken substantially under Trump. It’s not like this was a baseless fear: Prior to the election, Trump was on record as deriding the FCPA as a horrible law that unfairly disadvantaged U.S. businesses, and we subsequently learned that during his presidency, Trump on occasion tried to convince other members of his administration to weaken FCPA enforcement. But in the main, my prediction that FCPA enforcement would decline under the Trump Administration was not borne out. This was something I acknowledged in my subsequent evaluation of my initial predictions, but I think it’s worth revisiting and re-emphasizing what seem to me to be the most likely reasons for the continuation of robust FCPA enforcement, despite the President’s personal hostility to the law.
For one thing, despite Trump’s opposition to the FCPA, this was never a priority for him, nor were his senior appointees at the Department of Justice and Securities and Exchange Commission particularly interested in ratcheting back FCPA enforcement. I’d suggest two lessons we might draw from this. First, the career bureaucracy matters a lot to government policy, and the culture of professionalism and mission-commitment at DOJ and SEC often keep the ship steady notwithstanding bluster at the top. Second, there now seems to be a broad consensus, at least among the elite lawyers who cycle in and out of government, as well as important segments of the U.S. business community, that FCPA enforcement is a generally good thing that serves U.S. interests—this issue doesn’t seem to have the partisan salience of many other aspects of white collar/corporate criminal law enforcement policy.
Before we celebrate the resilience of FCPA enforcement even in the face of political hostility from the top, though, we should keep in mind that FCPA cases take quite a long time. This means there’s likely to be a substantial lag between any change in the aggressiveness with which such cases are identified and pursued and the statistics on number of cases, settlement amounts, and other quantitative indicators of enforcement. Frankly, this is something I should have thought about more clearly when I wrote my post four years ago, and it’s one reason why I’m still not entirely convinced that the Trump Administration didn’t actually lead to any substantive weakening of FCPA enforcement. Lots of the cases that were resolved over the last four years started during the Obama Administration. If, hypothetically, the Trump DOJ and SEC worked just as hard on processing existing cases, but weren’t as aggressive or effective in identifying new cases, then it’s possible that there really has been a decline in the number of cases in the pipeline, but this won’t show up in the enforcement statistics for another couple of years. I don’t really have any firm basis for speculation, and I think if I had to make a prediction, I think I’d guess that we won’t see a notable decline in FCPA cases over the next few years. This is mainly due to my impression that, as noted above, Trump never managed to have much influence over FCPA enforcement policy during his administration. But I don’t have any solid evidence on this, and the broader message I want to underscore here is that there will generally be a substantial lag between changes in FCPA enforcement policy and FCPA enforcement numbers.
Another pessimistic prediction of mine that proved to be completely wrong (yay!) was that the push for more corporate transparency—that is, a crackdown on anonymous company ownership—was doomed. As readers of this blog are likely aware, the U.S. finally enacted anonymous company reform as part of the recent National Defense Authorization Act, which was enacted over President Trump’s veto. (And even Trump’s official explanations for his veto did not mention the corporate transparency provisions, but rather complained that the bill failed to eliminate certain legal protections for tech companies, and required the renaming of military bases named after Confederate generals). My error, I think, is that I profoundly underestimated the adeptness of the corporate transparency advocates in forging a bipartisan coalition in favor of anonymous company reform, in part by framing the issue in terms that would appeal to more right-leaning constituencies (such as law enforcement and faith-based organizations), and emphasizing the national security dimensions of the problem. This success holds important lessons for reformers in other contexts, as I noted in my previous post on this topic.
So in several cases I was overly pessimistic about the adverse impact that the Trump Administration would have on U.S. anticorruption policy. The enforcement of statutes like the FCPA proved much more resilient, and resistant to the influence of the President, than I had feared. Moreover, important legislative reforms (including but not limited to the crackdown on anonymous companies) finally passed, though perhaps it’s no coincidence that this legislative success was facilitated by de-emphasizing the anticorruption dimensions of these reforms and integrating them into the must-pass annual defense authorization bill.
Alas, though, on some other, less directly measurable dimensions, the Trump Administration was as bad or worse for anticorruption than I had feared. For one thing, Trump himself was personally corrupt, and clearly viewed the office of the presidency as, among other things, an opportunity for personal and family enrichment. Here’s what I wrote back in November 2016: “I expect that Trump himself will likely be, if not a kleptocrat in the most brazen sense, then at least a quasi-kleptocrat–not directly stealing from the US Treasury, but shaping US policies in ways that are designed to enrich Trump and his associates.” And so it came to pass. As regular readers know, starting in May 2017 this blog maintained and regularly updated a page that reported on all of the various confirmed and credibly alleged ways in which Trump and his family sought to exploit the power and prestige of the presidency for personal financial advantage. I’m delighted to finally be able to retire that project. But the sheer number of incidents noted on this tracker is rather shocking. To be sure, many of these incidents were relatively small-scale—more like the work of a second-rate hustler than a diabolical supervillain. But that doesn’t make them unproblematic.
For one thing, it’s now clear that the constraints—both formal and informal—on presidential self-dealing are too weak. For another, it’s rather troubling how little Trump’s brazen profiteering ultimately seemed to matter to most voters. I don’t have any hard data on this, so I could well be wrong, but my impression is that while Trump’s disastrous mismanagement of the coronavirus response likely cost him the election—as it should have—his administration’s many, many ethics scandals made relatively little difference. Again, I can’t be sure of this—we just don’t have the evidence yet, or at least I haven’t seen it—but my impression is that, as is true in many other democracies, the personal corruption of the leader did not seem to do much to undermine his appeal, despite the fact that most voters claim to dislike corruption.
One other prediction from four years ago also, unfortunately, appears to have been accurate. I wrote then that “plans to create a stronger international anticorruption architecture will go nowhere under a Trump presidency,” and that “under a Trump Administration, the US is unlikely even to engage in a serious way with meaningful proposals to help fight grand corruption around the world.” If anything, things turned out even worse than I’d feared on this front. Not only did the U.S. abdicate its leadership on anticorruption as a global priority issue, but in some cases the Trump administration impeded (or tried to impede) progress on this issue in several countries. The Administration’s withdrawal of support, for example, contributed to the shutting down of the anti-impunity commission in Guatemala (CICIG), and the efforts of Trump associates to advance Trump’s political interests have complicated, and possibly undermined, anticorruption efforts in Ukraine. Trump’s coziness with Vladimir Putin also seems to have emboldened the Russian government’s crackdown on (and in some cases attempted murder of) domestic anticorruption advocates, as well as the greater use of what some commentators have dubbed “weaponized kleptocracy.” The lesson here—beyond the truism that elections have consequences—is that the United States, for all its faults and failures, still plays a critical leadership role when it comes to anticorruption and associated issues. What remains to be seen is how the incoming Biden Administration will approach this issue, and how swiftly the damage wrought by the Trump Administration’s abdication of leadership on this issue can be reversed.
This blog was originally published on GAB | The Global Anticorruption Blog Law, Social Science, and Policy and was republished with permission.
Disclaimer: The ideas expressed in this article reflect the author’s views and not necessarily the views of The Big Q.
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