The FCPA: Handcuffing Americans, Bankrolling Beijing
- Rick de la Torre
- Feb 12
- 3 min read
The Foreign Corrupt Practices Act was born out of a well-meaning but ultimately naïve vision of American virtue. It sought to impose a high standard of corporate ethics on U.S. businesses operating abroad, ensuring they wouldn’t grease foreign palms to win contracts. In theory, this was an admirable stance, reinforcing the idea that American enterprise succeeds on merit, not backroom deals. But in practice, the FCPA has become a bludgeon wielded by overzealous regulators, hobbling U.S. companies while foreign competitors—particularly the Chinese—exploit a world where bribery is just another cost of doing business.
The scope of the FCPA has expanded well beyond its original intent. U.S. executives can now be held criminally liable for the actions of distant subsidiaries, franchisees, or third-party agents they’ve never met, let alone authorized to engage in corruption. It’s one thing to punish clear-cut wrongdoing, but quite another to expect a Fortune 500 CEO in New York to anticipate the actions of a local distributor in Lagos or Jakarta. The law’s extraterritorial overreach has turned compliance into an industry unto itself, forcing businesses to spend millions on internal investigations and legal defenses rather than on expanding operations, creating jobs, and driving innovation. In 2022 alone, Glencore paid $1.5 billion in penalties for foreign bribery charges spanning multiple continents, while Goldman Sachs shelled out nearly $3 billion over its role in the 1MDB scandal—cases that illustrate how FCPA enforcement has morphed into a global policing operation rather than a targeted effort to prevent corruption within U.S. companies.
While American firms are shackled by compliance costs and the threat of criminal prosecution, Chinese companies are writing their own rules. Beijing has turned bribery into a foreign policy tool, lubricating its Belt and Road Initiative with an endless flow of cash to government officials from Africa to Latin America. The China Harbour Engineering Company was blacklisted by the World Bank for bid-rigging and bribery, yet Beijing simply redirected its funding through state-controlled banks. In Venezuela, China’s state-run oil giant CNPC secured energy contracts through a corruption scheme that looted billions from state coffers, yet no Chinese executives faced consequences. Compare this to how aggressively the FCPA has been used against U.S. firms—30 major enforcement actions in 2024 alone—and the hypocrisy becomes glaring.
The FCPA’s double standard also exposes the political nature of its enforcement. When President Trump sought to scale back the law’s application, critics shrieked about the death of corporate accountability. Yet the same voices championed using USAID to fund ‘democracy promotion’ initiatives that just happened to align with political objectives, whether by bolstering socialist governments in Latin America or pressuring conservative administrations in Eastern Europe. The selective outrage underscores that the real issue is control—who gets to decide which dollars influence foreign policy.
The Trump administration’s recent executive order dialing back FCPA enforcement is a necessary course correction. American firms should not be held to a moral standard that no other global competitor follows. Congress, meanwhile, should go further by codifying reforms that provide safe harbor protections for companies that make good-faith efforts at compliance. The Department of Justice should focus its anti-corruption efforts where they matter—on transnational criminal organizations, rogue states, and the kleptocrats who actually profit from bribery—not on U.S. businesses already operating at a disadvantage in the global marketplace.
Fighting corruption is a noble pursuit, but the FCPA has become a weapon that punishes American companies for trying to compete in an unfair world. Reform is overdue. Until Washington recognizes that American businesses are not the villains in this story, they will continue to cede ground to the real bad actors—the ones who don’t bother with compliance at all.
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