US President Donald Trump stayed the enforcement of a US law that bans bribery in foreign countries. This decision could affect global corruption investigations, including any potential scrutiny of Indian billionaire Gautam Adani. The law, known as the Foreign Corrupt Practices Act (FCPA), is crucial in holding multinational corporations accountable. If enforcement remains weak, cases involving overseas financial dealings may face reduced oversight.
US President Donald Trump signed an executive order instructing the Department of Justice to stay prosecutions of Americans accused of bribing foreign officials while attempting to secure or retain business abroad.
This order effectively pauses enforcement of the nearly 50-year-old Foreign Corrupt Practices Act (FCPA) and directs Attorney General Pam Bondi to review current and past enforcement actions related to the law, as well as to establish new guidelines for its application.
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This decision comes just ahead of Indian Prime Minister Narendra Modi’s visit to the US on February 12, during which he is scheduled to engage in bilateral discussions with Trump. Under the previous Biden administration, the Department of Justice had indicted billionaire Gautam Adani on charges of fraud and allegedly orchestrating a bribery scheme.
Trump’s executive order could significantly affect the Adani case, depending on its implementation and reach. Reports suggest that the US Justice Department was investigating whether the Adani Group had violated the FCPA, which prohibits American entities from bribing foreign officials. With Trump’s order pausing prosecutions, ongoing or potential investigations into Gautam Adani in the US might be delayed or diminished.
Hindenburg Research has accused the Adani Group of stock manipulation and corporate fraud, suggesting possible corrupt dealings with foreign officials. If the US was preparing to investigate these allegations under the FCPA, Trump’s decision might impede any legal actions against Adani in the US.
As the US steps back, the focus now shifts to Indian regulators, such as the Securities and Exchange Board of India (SEBI) and the Enforcement Directorate (ED). Should these agencies opt not to conduct a thorough investigation, Gautam Adani could avoid immediate legal consequences.
While Trump’s decision may shield Adani from legal issues in the US, it does not eliminate scrutiny from international investors and watchdogs in the UK, EU, and other global markets, who may continue to closely monitor the group’s business practices.
The US Department of Justice indicted Gautam Adani, his nephew Sagar Adani, and several senior executives at Adani Green for allegedly bribing Indian state officials with Rs. 265 million to secure solar power contracts, while raising funds for these projects in the US under the pretense of adhering to anti-bribery laws. This could constitute fraud under US federal securities law and may lead to criminal liabilities if proven.
The indictment asserts that Adani Green bribed officials in Odisha and Andhra Pradesh, and possibly in Tamil Nadu, Chhattisgarh, and Jammu & Kashmir, to ensure that their power distribution companies agreed to purchase solar power at inflated rates. The alleged bribery occurred from mid-2021 to the end of that year. The states involved are governed by various political parties, with Jammu and Kashmir under central BJP control.
The Adani Group has denied these allegations, calling them baseless and asserting full compliance with all applicable laws.
The FCPA is a US law that prohibits American companies, individuals, and foreign firms listed in the US from bribing foreign officials to secure business deals and requires accurate financial record-keeping to prevent fraud. The FCPA has led to significant corporate investigations globally.
In his remarks, Trump emphasized the need to pause FCPA actions until new enforcement guidelines are issued.
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According to a fact sheet on the executive order,
“U.S. companies are harmed by FCPA overenforcement because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field.”
Trump stated,
“It turns out that in practicality it’s a disaster. Nobody wants to do business with the Americans.”
However, Richard Nephew, a senior research scholar at Columbia University and former anti-corruption coordinator at the State Department, criticized the move on X, stating,
“This is a horrible idea that US companies DO NOT WANT. Most appreciate the fact that FCPA allows them to be firm in refusing bribes because most private sector companies sensibly see bribery as an unproductive cost.”
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