The Justice Department has closed about half of its open investigations into bribery by U.S. businesses overseas, but plans to initiate prosecutions to more narrowly focus on misconduct that hurts the country’s capacity to compete with foreign companies, officials said on Tuesday.
President Trump signed an executive order in February pausing all of the department’s investigations under the Foreign Corrupt Practices Act, pending a review of enforcement policies by Todd Blanche, the department’s No. 2 official.
Good government groups criticized the freeze as the elimination of guardrails needed to prevent corporate abuses. The move coincided with the closing of investigations into the aircraft manufacturer Bombardier and the medical device maker Stryker, among others.
But Mr. Blanche, in a statement, said the decision was made to align enforcement of the act with the administration’s broader goal of increasing U.S. leverage against foreign businesses and governments, by “shifting prosecutorial resources to cases that clearly implicate U.S. national security and competitiveness.”
Mr. Blanche, a former criminal defense lawyer for Mr. Trump, accused the Biden administration under Attorney General Merrick B. Garland of opening too many cases, “burdening companies” and damaging national interests.
Critics said the new guidelines were a dangerous reversal that abandoned major investigations, including a deal the Justice Department struck in May with Boeing that spared the company from taking criminal responsibility for deadly 737 Max crashes in 2018 and 2019. Many families of the victims vigorously opposed the agreement.
“This retreat from enforcing laws against corporate crime is a perversion of justice that further concentrates the administration’s power to corruptly reward insiders and punish perceived enemies,” said Rick Claypool, a research director at the nonprofit watchdog group Public Citizen.
“American corporations that engage in criminal bribery schemes abroad will no longer be prosecuted,” he added. “That’s the bottom line.”
The department plans to offload responsibility for investigating bribery by U.S. businesses and people overseas to local law enforcement and regulatory bodies, officials said.
Matthew R. Galeotti, the head of the department’s criminal division, deflected criticism that the department planned to sharply scale back its prosecutions of all corporate offenders, in the wake of the Trump administration rightward policy shift and the firings, forced transfers and mass retirements of experienced career prosecutors at the department.
The criminal division “has not and will not close meritorious investigations or dismiss meritorious cases” involving foreign bribery and other white-collar crimes, Mr. Galeotti told attendees of a conference in Manhattan on Tuesday, according to his prepared remarks.
“We will vigorously pursue these investigations and open new ones,” added Mr. Galeotti, a former federal prosecutor in Brooklyn.
In a previous memo, Mr. Galeotti outlined other changes, including a new policy of declining to prosecute some offenses reported to the department by companies in a good-faith effort to self-police. Critics believe the move undermines the deterrence of a potential prosecution.
Mr. Galeotti defended the protocols, saying they had already yielded whistle-blower tips and self-reporting related to “drug trafficking, procurement fraud, health care fraud and more.”
He concluded with a warning to lawyers representing corporations, suggesting they should not assume that they will get a sweetheart deal if they seek “premature” plea agreements or make false claims of prosecutorial misconduct in an effort to gain leverage.
“Be an honest broker,” he said.
