or observers of international news, the past three weeks have felt like a never-ending series of shock waves with each successive looney-tunes idea from the Trump administration outdoing the previous one. Some of the announcements are trivial but carry lots of viral catnip, like renaming the Gulf of Mexico and plastic straws; some are consequential, like the tariff wars. And it was, of course, transfixing when the attacks focused for a few days on SA, as it must be every day for people in the US.
The strategy here is pretty obvious: flood the zone. The idea comes from American football where the offensive strategy calls for multiple receivers to overload a specific area of the field, making it difficult for defenders to cover all passing options.
The advantage is partly general confusion and also dropping breadcrumbs of silly viral ideas to distract from the potentially injurious ones. It keeps everyone running in all different directions. I suspect the chief impetus is to turn everyone’s gaze from the two important policy initiatives that the administration knows will be unpopular: shrinking the size of the US government and scrapping the Foreign Corrupt Practices Act (FCPA).
So far it’s working. Trump’s popularity is holding up. In fact, a CBS poll conducted a week ago showed his popularity was up! More than 53% of Americans said they approved of his job performance, which is his highest rating in a CBS News poll. Considering that he had only a 40% approval rating, which barely budged during his first year in office, it’s been a veritable shock-and-awe performance.
I’m still hopeful that Americans will recognise in time Trump’s essential grifter character, which nothing underlines more explicitly than his decision to scrap the FCPA.
My colleague Ann Crotty of Currencynews.co.za wrote about the issue after speaking to David Lewis, the founding executive director of Corruption Watch. Lewis describes the US’s FCPA as “the most effective anti-corruption instrument in the world, without a doubt”.
The Act is 48 years old and was introduced under President Jimmy Carter, whom I presume is now rolling in his grave. It prohibits US citizens and entities from bribing foreign government officials to benefit their business interests, and it was amended in 1998 to include foreign persons and entities.
It’s that extension which really turned on the taps because, essentially, it meant that US authorities could pursue cases anywhere in the world if the company did business in the US. Crotty points out that if the conduct involved a telephone call, an email, text or fax sent or received in the US, or involved the US banking system, it would fall within the jurisdiction of the US Department of Justice (DOJ).
The other consideration is that the DOJ does not in fact play games; if there is (or was) a DOJ investigation, all of a sudden, the entire management of any given American company would start clenching. The DOJ is enormously well resourced and equipped with highly skilled investigators. This is, to be slightly sarcastic for a moment, just a little different from SA, where an investigation by the Hawks and the NPA normally results in a slight inconvenience felt a decade from now.
Consequently, the big wins SA has made in fighting corruption have invariably come not from local investigations but as an offshoot of DOJ. When you line them up, it’s just incredible. A good example is the $122-million fine McKinsey paid for “a scheme to pay bribes to government officials in South Africa between 2012 and 2016”. This was actually the first case where the DOJ and SA officials worked together. Then there was SAP, Hitachi, ABB and Gartner, and more.
The international picture is the same, with the DOJ bringing the corporate bribers to book. The largest were British company BAE Systems in 2010, which was fined $400-million for the Arms Deal case, and the really big one, Glencore, ultimately paying a $1.5-billion fine in 2022. The FCPA fundamentally changed business practices around the world because European companies, which, up until that point, could write off bribes against their taxable income, also began to investigate corruption.
Trump’s argument is that the law puts US companies at a disadvantage. “It sounds good on paper, but in [practice] it’s a disaster,” Trump said of the FCPA. “It means that if an American goes over to a foreign country and starts doing business over there legally, legitimately or otherwise, it’s almost a guaranteed investigation, indictment and nobody wants to do business with the Americans because of it.”
The argument is just ridiculous. “Most companies appreciate the fact that the FCPA allows them to be firm in refusing bribes because most private sector companies — sensibly — see bribery as an unproductive cost,” Richard Nephew, a former anti-corruption coordinator at the State Department, posted on X. That holds true for the US, but also as it happens for SA companies doing business in Africa; they also cite the FCPA when resisting bribe demands in Africa.
I can’t help feeling that since Trump is such a grifter, he or someone in his family is or wants to do business somewhere and is afraid of being caught up in the law. But fortunately, we in SA know what’s going to happen because we have lived through this for the past decade. US companies will now pay bribes; they will be exposed; the business environment will be corrupted way beyond the impact of the bribes; trust will decline; and the business environment will be fraught with suspicion.
America, welcome to State Capture. Hope you brought the cash with you. đź’Ą
First published in Daily Maverick. Subscribe to DM newsletters here:
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