Trump has reduced US safeguards against corruption and white-collar crime
As the Trump administration signals its intention to crack down on certain crimes, it’s also signaling a major ambivalence toward others.
Criminal prosecutions of white-collar offenses have been declining for decades under both Republican and Democratic presidents. But amid sweeping policy and personnel changes at the Justice Department, that downward trend seems poised to accelerate under President Donald Trump and Attorney General Pam Bondi.
The new policies, along with the departure of senior career officials, signal a new – and possibly more relaxed – approach to public corruption, tax evasion, and other white-collar crimes. While incoming presidents are entitled to set new DOJ priorities, these new priorities appear more sweeping than usual. They also appear to be shifting resources away from types of investigations that have troubled Mr. Trump and his allies in the past.
Why We Wrote This
President Donald Trump is scaling back enforcement efforts against white-collar crimes. In part, it’s a pivot to focus on illegal immigration. But thin enforcement can be an invitation to corruption and tax evasion.
How these changes will play out over the coming years is uncertain, but a softened stance can invite foul play, experts say.
The most serious white-collar crime cases are complex and “dependent on proactively policing,” says Henry Pontell, a professor emeritus at the University of California, Irvine. “When investigation is impossible due to both a lack of resources and political will, they are simply relegated to the status of ‘nonissues.’”
Memos from the attorney general
Ms. Bondi’s first day in office played out much like the first days of the president who appointed her. On Feb. 5, the new attorney general issued over a dozen memos outlining new directives and priorities for the Justice Department.
In one memo, Ms. Bondi announced “shifting resources” in the agency’s national security division from foreign interference investigations to cross-border crimes. Specifically, she announced that she would disband a task force set up in 2017 to police foreign-run political influence campaigns. Investigations of Americans lobbying on behalf of foreign governments would also be limited to conduct resembling “traditional espionage.” Enforcement of a law regulating domestic lobbyists for foreign governments, meanwhile, would now be limited to conduct “similar to more traditional espionage.”
Prosecutors in the disbanded Foreign Influence Task Force should now focus on “the total elimination” of cartels and transnational criminal organizations, Ms. Bondi wrote. A separate unit, previously tasked with investigating U.S. companies that bribe foreign officials, must now prioritize investigations of cartels, she wrote in another memo.
Some of these laws have only been lightly enforced. That may not change. What is clear, however, is that the Justice Department is signaling a more relaxed approach to certain white-collar crimes.
The new directives “invite more foreign interference in American affairs,” says Aaron Zelinsky, a former federal prosecutor specializing in fraud, public corruption, and national security cases.
“Administrations are entitled to set enforcement priorities,” he adds. But these changes are “different [from] figuring out where to allocate manpower. They’re changes in nature rather than changes in kind.”
Public corruption in the news
The Justice Department did not respond to a request for comment on its new priorities. But the agency’s latest focus has been evident not just in the policy and resource decisions described in Ms. Bondi’s memos, but also in some of its actions.
A stated goal of the Trump administration is to end political “weaponization” of the justice system. This is the reason DOJ officials have given for seeking to drop a public corruption prosecution against New York City Mayor Eric Adams. Mr. Adams is pleading not guilty to charges that he accepted bribes from Turkish government officials in exchange for favors. Without questioning the legal strength of the case, acting Deputy Attorney General Emil Bove says the case was brought because of Mr. Adams’ criticisms of President Joe Biden’s immigration policies.
A half dozen federal prosecutors disagreed, and they resigned instead of following Mr. Bove’s order to drop the case. The Adams case, as well as the DOJ’s policy to turn away from white-collar investigations, calls into question other public corruption prosecutions and the prevalence of foreign government influence on American politics more generally.
Such foreign influence has not been difficult to spot in recent years – in part thanks to the Foreign Agents Registration Act (FARA), a law that requires public disclosure of individuals lobbying on behalf of foreign governments.
Robert Menendez, a former U.S. senator from New Jersey, received an 11-year prison sentence this year for secretly lobbying on behalf of Egyptian government officials. Similarly, Rep. Henry Cuellar, a Texas congressman, was charged last May with acting as a foreign agent for an Azerbaijani oil company and a Mexican bank.
Mr. Cuellar’s trial is scheduled for September. But observers believe the centrist Democrat could see the Justice Department drop his case just as it did with Mr. Adams. Per one of Ms. Bondi’s Feb. 5 memos, FARA enforcement is now focusing on “more traditional espionage.”
It’s unclear what “traditional espionage” means in practice, but any shift in this area of the law is significant, experts say. An increase in foreign influence in American government means a decrease in influence for American voters.
“It’s a zero-sum game,” says Mr. Zelinsky, who worked on the Mueller investigation into Russian interference in the 2016 election. “The voices of the American people will be lessened, and the voices of foreign actors will be greater.”
What is the Foreign Corrupt Practices Act?
In addition to potentially limiting investigations of foreign influence in the U.S., new DOJ directives could make it easier for American companies to influence foreign governments overseas.
Since 1977, the Foreign Corrupt Practices Act (FCPA) has prohibited U.S. companies and individuals from bribing foreign officials to gain a business advantage. In a Feb. 5 memo, Ms. Bondi said the Justice Department will prioritize FCPA investigations related to bribery “that facilitates the criminal operations of cartels and transnational criminal organizations.” A few days later, Mr. Trump signed an executive order pausing enforcement of the law for 180 days, writing that it “impedes the United States’ foreign policy objectives.”
But according to Mike Koehler – a lawyer who runs FCPA Professor, a leading trade publication that focuses on the law – not much may actually change as a result.
“It seemed an odd directive,” he says. “There aren’t many enforcement actions that implicate” cartels and transnational criminal organizations.
In fact, there haven’t been many FCPA enforcement actions of any kind. The Justice Department brought just 17 such actions last year, a third less than its already low yearly average over the past decade, according to data compiled by Stanford University Law School.
“We’re talking about pausing something that hardly ever happened anyway,” says Mr. Koehler.
Significant policy changes at the Justice Department have also been accompanied by an exodus in prosecutorial experience.
David Hubbert had worked in the DOJ Tax Division for four decades, including a long recent stint as a chief prosecutor, until earlier this month. He resigned instead of accepting a move to a sanctuary cities task force. Another top attorney in the division, Stuart Goldberg, had retired weeks earlier.
“I find it extremely concerning that you take someone who’s got 40 years of experience on tax enforcement ... and remove him from that role for no reason that I can see,” says Kathy Keneally, a former assistant attorney general for the Tax Division.
The department’s Criminal Division and Public Integrity Section have seen even more departures.
Kevin Driscoll and John Keller – acting heads of the Criminal Division and Public Integrity Section, respectively – resigned over the Adams case. Two attorneys working on the Cuellar case also resigned. Marco Palmieri left over the Adams case. Corey Amundson – head of the Public Integrity Section before Mr. Keller and a 23-year veteran of the Justice Department – resigned in late January after being told he was getting reassigned to a sanctuary cities task force.
Cases in flux: To prosecute, or not to prosecute?
An interesting feature of this new Trump-era realignment of DOJ priorities is that immigration-related prosecutions have been increasing for decades.
Referrals for public corruption prosecutions at the department fell from around 2,300 in the early 1990s to under 500 in the mid-2010s, according to a 2019 study that cited data from the Transactional Records Access Clearinghouse. Referrals for immigration prosecutions spiked in the early 2000s, meanwhile, and, by 2017, were five times more common than public corruption referrals.
“Immigration has been a focus of past administrations,” says Kristine Artello, an associate professor of criminal justice at Fisher College in Boston, and a co-author of that 2019 study.
“What I’m concerned about is that other entities that were also looking at white-collar crime ... are also being gutted,” she adds.
Policy and personnel changes at the Justice Department have been accompanied by thousands of layoffs at the IRS, for example.
That is something that separates these actions by the Trump administration from how past administrations have shifted priorities at the Justice Department – including the first Trump administration.
Mr. Trump’s first attorney general, Jeff Sessions, prioritized enforcement for immigration and violent crimes, but he also targeted economic espionage by the Chinese government. FARA prosecutions also increased during Mr. Trump’s first administration, and the department launched the Foreign Influence Task Force during his first year in office.
“It’s a very substantial and relatively profound change,” says Mr. Zelinsky. “Some worthwhile institutions introduced in the first Trump administration are now being gutted and left by the side of the road.”
Ultimately, however, the practical effects of these shifts remain unclear.
Prioritizing certain types of investigations and prosecutions doesn’t mean that other types will be ignored. In fact, the extent to which the new directives are being followed now is murky. Three weeks after Mr. Trump paused enforcement of the FCPA, two men accused of violating the law are scheduled to go on trial.
