Relief to Adani? Trump pauses enforcement of foreign bribery law

Washington: US President Donald Trump signed an executive order directing the Department of Justice to pause enforcing a nearly half-century-old law that was used to launch a bribery investigation against the Adani Group.

Trump signed an order to pause enforcing of the 1977 Foreign Corrupt Practices Act (FCPA) that prohibits American companies and foreign firms from bribing officials of foreign governments to obtain or retain business.

The President directed US Attorney General Pam Bondi to pause enforcement of FCPA, which was at the heart of some of the US Department of Justice's most high-profile cases, including an indictment against Indian billionaire and Adani Group head Gautam Adani and his nephew Sagar.

Last year DoJ under President Joe Biden charged Adani for allegedly being part of a scheme to pay over $250 million (about Rs 2,100 crore) bribe to Indian officials in exchange of favourable terms for solar power contracts.

This was concealed from the US banks and investors from whom the Adani group raised billions of dollars for the project, the prosecutors had alleged last year citing FCPA that allows pursuing foreign corruption allegations if they involve certain links to American investors or markets.

The pause and the review is being seen as a relief to the Adani Group but it remains to be seen what stand the DoJ takes after the six month review period.

The order that Trump signed asked "the Attorney General to review guidelines and policies governing investigations and enforcement actions under the FCPA" in 180 days.

"During the review period, the Attorney General shall cease initiation of any new FCPA investigations or enforcement actions, unless the Attorney General determines that an individual exception should be made," it said.

Also it sought "review in detail all existing FCPA investigations or enforcement actions and take appropriate action with respect to such matters to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives".

FCPA investigations and enforcement actions initiated or continued after the revised guidelines or policies are issued "shall be governed by such guidelines or policies; and must be specifically authorized by the Attorney General".

After the revised guidelines or policies are issued, the Attorney General shall determine whether additional actions, including remedial measures with respect to inappropriate past FCPA investigations and enforcement actions, are warranted and shall take any such appropriate actions or, if Presidential action is required, recommend such actions to the President, it added.

Last year, the DoJ had charged a former executive at renewable energy firm Azure, which was at the heart of a case accusing Adani of perpetrating a bribery scheme. The DoJ also brought a criminal indictment.

While Adani Group had called the charges "baseless", Azure said the former employees referenced in the charges had been "separated" from it for more than a year.

Separately, half a dozen US Congressmen have written to the new Attorney General against "questionable" decisions made by the US Department of Justice (DoJ) such as the indictment against the Adani Group in an alleged bribery scam, which "jeopardises the relationship with close ally India".

Lance Gooden, Pat Fallon, Mike Haridopolos, Brandon Gill, William R Timmmons and Brian Babin on February 10 wrote to Pamela Bondi drawing "attention to some questionable decisions made by the DOJ under the Biden administration".

"Some of these decisions involved selectively pursuing and abandoning cases, often acting against America's interests at home and abroad, jeopardizing relationships with close allies like India," the Congressmen said in the joint letter.

India, they said, has been an important ally of the United States for decades. This relationship has flourished beyond politics, trade, and economics by evolving into a continuous socio-cultural exchange between the world's two largest democracies.

"This historical partnership and continuous dialogue between friends, however, was put at risk due to some unwise decisions by the Biden administration," they said.

"One such decision involves a questionable pursuit of a case against the Adani group, an Indian company whose executives are situated in India. This case rests on the allegation that preparations were made by members of this company in India to bribe Indian officials, also exclusively located in India.

"Instead of deferring the case to the appropriate Indian authorities, the Biden DOJ decided to push forward and indict the company's executives without any real injury to US interests being present," they wrote.

The "selective pursuit" by the Biden DOJ, despite knowing the possible outcomes of such a reckless decision, requires a second look, they wrote, adding knowing the real considerations guiding this decision will also be a major step in uncovering whether the previous administration was compromised to outside entities over the past four years.

"We request you investigate the Biden DOJ's conduct and would appreciate you sharing with us all records pertaining to this case, for a coordinated effort in uncovering the truth," they added.