Yet even as Trump and his domestic political opponents spar over these issues, a key aspect of the new president’s stance has gone largely unnoticed. Both by action and example, the Trump administration is now directly undermining America’s past achievements as a leader in the fight against global corruption.
In 1977, Congress enacted the Foreign Corrupt Practices Act, which made it illegal for U.S. companies to bribe foreign officials. It was a landmark moment in the history of the global fight against corruption, and other countries, initially reluctant to do so, gradually followed the U.S. lead. In the decades since, successive American administrations have played a key role in advancing the anti-corruption agenda around the world, gradually winning over valuable allies and building vital coalitions.
Yet Trump’s actions so far suggest that he is keen to undercut this progress. On Feb. 14, he killed a bill designed to foster transparency in the energy and mining sectors. First enacted in 2010 as Section 1504 of the Dodd-Frank Act, the bipartisan Cardin-Lugar Bill would have required extractive firms listed in the United States to disclose their payments to foreign governments. Under Rex Tillerson, ExxonMobil vociferously fought the bill, arguing that it would hamstring its ability to compete against foreign companies. This argument conveniently overlooked the fact that since the law would have applied to all U.S.-traded firms, foreign companies such as British Petroleum, Shell, and even PetroChina would have been subject to it.
More than 30 countries have enacted similar rules, which largely mirror those proposed in the United States by the Securities and Exchange Commission as part of Cardin-Lugar. In fact, U.S. leadership on this front was such that it was mentioned explicitly in a European Commission memo on its own requirement: “The Commission responded to international developments in this field, in particular the inclusion of a requirement to report payments to governments in the Dodd Frank Act in the United States.”
The United States is also on its way to pulling out of a highly successful corruption-combating measure — the Extractive Industries Transparency Initiative (EITI), which promotes transparency and openness in the management of natural resources. The initiative’s impact is most critical in countries blighted by the “resource curse” (the idea that natural-resource wealth is easily plundered by elites, leaving ordinary citizens worse off).
So far, at least, the Foreign Corrupt Practices Act has remained intact — but that is hardly guaranteed, considering that the law, still opposed by many in the business community, was once described by Trump as “horrible.”
In turning its back on the rules it helped foster, the United States will become less like its closest allies, who are trying to fight corruption globally, and more like Russia, whose firms engage in the most corrupt behavior when doing business abroad. So much for draining the swamp.
Beyond the realm of policy, the world pays close attention to what goes on inside the White House. Foreign leaders may interpret the developments at the heart of the Trump administration as a signal that they no longer need to improve their own governance standards. In other words, the new administration directly undermines the credibility and moral standing of U.S. officials who deal with malfeasance abroad.
Trump’s lack of concern for corruption hardly seems surprising, given the fact that he routinely praises corrupt despots (something he seems reluctant to do for long-standing allies). However, corruption continues to matter to engaged citizens and civil society organizations all over the world, who are now left out in the cold by this administration. As Trump pulls the United States to the sidelines of the war on graft, tens of thousands of people from Moscow to Brasilia are taking to the streets to protest corruption in their own societies.
Corruption erodes public trust in government institutions and harms democracy. It drives the perception that the government doesn’t work for the people — unless they can line the right pockets. By fueling discontent, it also leads to political instability.
While the Trump administration might not share the values that made the war against corruption central to Democratic and Republican administrations in the past, let’s hope it can come to understand why fighting corruption on a global scale matters.