Here’s the Financial Times:
Donald Trump has ordered the Department of Justice to halt the enforcement of a US anti-corruption law that bars Americans from bribing foreign government officials to win business.
In the past, I did several posts arguing that the US should ban corporations from paying money to those who engage in “ransomware”, with long prison terms for violators. I argued that this sort of regulation would actually help business, by making them a less lucrative target for extortionists. In the comment sections, there were many objections to my argument—claims that it would not work. But no one provided any good reasons why I was wrong, just unsubstantiated assertions.
You would not normally assume that corporations would favor regulations that restricted the way they could act. But the FT article provides one piece of evidence that I was correct:
The decision drew criticism from anti-corruption experts who said that stopping enforcement of the law would hurt US companies operating abroad.
“Most [US] 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 co-ordinator at the State Department, posted on X.
The same argument applies to ransomware attacks. Given the choice, I’d rather overseas bribery be allowed than domestic bribery. But I’m not sure either type of bribery is in our best interest.
On a related note, Ken White reports that President Trump and Elon Musk are using lawsuits against groups that criticize them:
Trump, who has long favored bogus litigation as a weapon against his enemies, has been on a censorial bender. In the last year alone he: sued a pollster for bad poll results; CBS for supposedly editing a Kamala Harris interview to make her look better; and ABC and George Stephanopoulos for bungling a description of E. Jean Carroll’s sexual abuse verdict against him. Musk, meanwhile, has sued both Media Matters and the Center for Countering Digital Hate for reporting about hate speech on X. . . .
Trump’s election has led to a cascade of powerful media companies settling dubious Trump lawsuits. Facebook is paying $25 million to settle Trump’s claim that the social media site violated his First Amendment rights by moderating him, another argument widely viewed as nonsense. ABC paid $15 million to settle Trump’s claims. That case had more merit but ABC’s abrupt surrender is troubling. It’s disturbing when media companies yield rather than fight for the First Amendment, but Trump is no ordinary plaintiff—he can wield the power of the state against enemies.
These corporate payments are not bribes in a legal sense, but they are clearly made to curry favor with important government policymakers. White reports that California passed a law to protect people from such frivolous lawsuits:
A SLAPP stands for Strategic Lawsuit Against Public Participation and its purpose is not to remedy a genuine wrong, but to suppress expression on a public issue. In the early 1990s, California lawyers noticed that property developers, faced with environmental and neighborhood protests against new developments, were abusing the legal system by suing the protestors. The suits lacked merit, but because of our broken civil justice system, they were a successful deterrent. The California legislature passed the first anti-SLAPP statute—a state law that provides defendants a special remedy when someone sues them over their speech. Under California’s anti-SLAPP law, if a defendant can show the judge that the plaintiff is suing them over potentially protected speech, the plaintiff has to come forward with admissible evidence showing they can possibly win the case. If they can’t, the judge dismisses the case, and the plaintiff must pay the defendant’s attorney fees. It’s a game-changer.
READER COMMENTS
Craig
Feb 13 2025 at 8:32am
“But no one provided any good reasons why I was wrong, just unsubstantiated assertions.”
Because if I’m an extortionist I am now making my victims cruminals and I know law enforcement infinitely less likely to be notified.
Garrett
Feb 13 2025 at 8:58am
Infinitely? Come on man
Craig
Feb 13 2025 at 9:33am
Yes, “‘nfinitely less likely’ is a figure of speech rather than a mathematically precise statement. It’s often used to emphasize that something is extremely unlikely, even if not literally impossible. I’m referring here to the people who choose to pay who are now criminals themselves unlikely to contact LE.
Scott Sumner
Feb 13 2025 at 12:27pm
You misunderstand my argument. The victims would not be “criminals” unless they paid the extortionist. But no corporate official or accountant wishes to spend 20 years in prison over a ransonware payoff. Payoffs would end. Instead, they’d report the extortion attempt to the authorities. The effect would be exactly the opposite of what you claim; more such criminal behavior would be reported, not less.
Craig
Feb 13 2025 at 7:03pm
Yes they face a choice, report it and then once they do that’s it either LE will be able to help them or they won’t. OR they pay it, but IF they pay it now they are not going to report it.You opine that no corporate official would risk a lengthy prison sentence and as such ransomware would go away since there would be no profit in it.
Back in the day, my websites are on a platform called Volusion and Volusion was on rackspace and rackspace got hit by, allegedly the PRC itself. Now, the PRC was not targeting lil ole me, I was indirectly impacted, but I WAS dead in the water for 3 days during the holiday selling season Then Secy of State H Clinton requested some kind of response from China. For me that would be a business kill event if it had persisted. If somebody had tried to ransom my business at that time, I’d have to have paid it, threat of prison or not, what’s the alternative? Homelessness? Aside from the ‘profit’ in it, people just do this by the way, its a sport for many, profit or none, perhaps at the bequest of a foreign government even. Its broadly akin to mindless vandalism even. What profit is there in vandalism? Indeed many of the people engaged in this are obviously quite clever and can assuredly earn more money in honest endeavors, but they don’t because that’s just how some people are.
Now turning attention to this disproportionate 20 year sentence. It instantly has VIII Amendment issues, long entrenched common law defenses, in this case necessity and duress come to play even if specifically noted in whatever criminal statute is passed. And then beyond that you’ll have a jury nullification (I’d find somebody clearly guilty as not guilty without even blinking here) problem because the government has no moral standing to charge somebody with a crime and threaten to imprison them because they were unable to protect them while engaging in what is, under duress no less, a subset of proportionate self defense for purposes of being able to engage in a fundamental right (fundamental right to contract).
They’re not going to invade China for lil ole me. Did Rackspace pay? Or did they figure a solution to the problem? Not sure honestly, I didn’t get that memo, but there’s an online cat and mouse game going on and which I am sure will continue for some time.
Garrett
Feb 13 2025 at 9:06am
Now that it’s been a few years, I suggest asking a few LLMs and seeing what their responses would be.
One huge issue with bribery is it implicitly increases the size and scope of government. In our era of elected kings it’s the last thing we need.
steve
Feb 13 2025 at 9:44am
Part of the issue is that it is seldom a one time bride. Once you are shown you are willing to offer brides they can keep coming back after you. So once you commit and build in that country they have leverage over you. Since it’s a corrupt country there isn’t any legal authority to whom you can appeal. Your only leverage is to leave and the people getting the bribes largely dont care. Also, it should be needless to point out that this doesnt happen in economically prosperous countries. There’s a reason they are poor and this is part of it.
Steve
Craig
Feb 13 2025 at 11:33am
“Part of the issue is that it is seldom a one time bride”
Good historical saying is if you pay the Danegeld you don’t get rid of the Dane. I’d suvgest with ransomware you don’t necessarily think you won’t get molested in the future, indeed there are other actors, but you oay it as a stop gap to get what you need and get it under a new turtle shell tyat hopefully will safeguard your IT systems.
Jon Murphy
Feb 13 2025 at 10:58am
Two thoughts:
First, I agree with steve’s concern above about setting the precedence.
Second, I think one would need to be careful about how the legislation is written. It is sometimes a fine, fine line between what is a bribe and what is a regular fee.
Craig
Feb 13 2025 at 7:08pm
And also remember that one of the reasons the government is able to criminalize your behavior abroad stands on the same principle as their ability to levy taxes on your worldwide income. If you are in LA right now, LA has specific jurisdiction over your person in LA while you are there, as long as you are resident there, if you come to TN, TN may have specific jurisdiction over you while you are here, but LA will retain ‘general’ jurisdiction over you because LA is your residence. Same principle applies for the US. Indeed if you commit a crime against me in Mexico by murdering me, you can be charged for murder in the US. The murderers aren’t going to get much respect of course, but I would say that the murder is obviously subject to prosecution in Mexico. Indeed so too is the bribe, it would be illegal under the laws of whatever banana republic you were making it under. But of course the US is going to stick its nose into their business because you know that’s our specialty, its what we do, but make no mistake about it that principle makes engaging in secessio plebis from the US that much harder because even if you leave they still have jurisdiction over you until you are able to renounce, which typically you cannot do until you obtain citizenship in some other country.
Asserting such a jurisdiction is, in my opinion at least, straight up arrogance.
Knut P. Heen
Feb 13 2025 at 11:32am
Do not forget the Coase theorem.
Corruption is a symptom, not a disease. The disease is that decision rights have been allocated to the wrong people; hence, you have to pay them to make the right decision. The result is even worse if they make the wrong decision (which happens if the best supplier refuses to pay the bribe and the contract goes to the second best supplier who accepted to pay the bribe).
Ransomware is another excellent example. Why on Earth would bandits have the right to block someone’s computer? The government is giving the bandits this right by not enforcing the law.
Mark Phariss
Feb 13 2025 at 2:28pm
Perhaps Pollyannaish, but the fact that the next Administration could presumably still prosecute bribes paid during this one might allow US businesses to remain firm in their refusals.
TMC
Feb 13 2025 at 3:44pm
For you ransomware argument, I agree with your logic up to the point where you outlaw payment. Let the company decide. There are companies who would go out of business without paying to unlock their data. They will pay whether it’s legal or not, so why add to their troubles? Better prosecution of the ransomware perps would be better.
I don’t see how this relates to bribing foreign companies though. Disallowing the bribes just puts US companies at a disadvantage. The rest of the world doesn’t care so the practice will continue. There is no upside to outlawing it. Many cultures don’t even see the bribes as corruption, just part of doing business.
raja_r
Feb 14 2025 at 6:22am
If the US bans ransomware payments, I’m sure plenty of companies (incorporated in other countries) will be happy to help.
Just pay them an “information security and data recovery fee” and they’ll magically get your data recovered.
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