California vs. Trump: The Fight Over Foreign Bribery Laws

Businesses operating in California received a sharp reminder this week that paying bribes to foreign officials remains illegal, even as the federal government takes a step back. On April 2, 2025, California Attorney General Rob Bonta issued a legal alert emphasizing that state law still prohibits such payments, regardless of a recent executive order from President Donald Trump pausing enforcement of the Foreign Corrupt Practices Act (FCPA). The move underscores a growing divide between state and federal approaches to regulating international business conduct.

The stakes are high for companies navigating this fractured landscape. California, home to the world’s fifth-largest economy, has long positioned itself as a defender of fair competition. Bonta’s alert arrives at a pivotal moment, as the Trump administration’s decision to suspend FCPA enforcement for 180 days has sparked debate over its implications for U.S. firms abroad. For everyday readers, this clash raises a practical question: how do these rules affect the goods we buy and the companies we trust?

President Trump’s executive order, signed on February 10, 2025, halts federal enforcement of the FCPA, a 1977 law barring U.S. businesses and citizens from bribing foreign officials to secure contracts. The administration argues this pause, set to last at least six months, will ease regulatory burdens and boost American competitiveness overseas. A directive to revise FCPA guidelines within a year suggests a longer-term rethink of how the law is applied, reflecting a broader push to prioritize economic growth over what some call excessive oversight.

California, however, isn’t waiting for federal clarity. The state’s Unfair Competition Law (UCL), a tool dating back to 1872 and refined over decades, empowers prosecutors to tackle practices that undermine fair markets, including bribery. Bonta’s alert makes it clear that violations of the FCPA, even if ignored federally, can still land companies in hot water under state law. This dual system means businesses face a patchwork of rules, where compliance in one jurisdiction doesn’t guarantee safety in another.

At its core, the debate over bribery laws is about trust. Paying off foreign officials might snag a quick deal, but it chips away at confidence in global markets. Historical cases, like the $1.6 billion Siemens AG settlement in 2008, show how corruption distorts competition, favoring those willing to bend rules over those playing straight. For consumers, this can mean higher prices or shoddy products as backroom deals replace quality and innovation.

Voices on both sides weigh in. Supporters of the federal pause argue it levels the playing field for U.S. firms facing rivals unbound by similar laws, a concern echoed in Trump’s push for deregulation. Yet advocates for strong enforcement, including members of the OECD Anti-Bribery Convention, warn that easing up could embolden corrupt practices worldwide. California’s stance reflects a belief that ethical standards protect, rather than hinder, long-term economic health.

The FCPA’s legacy stretches back to the post-Watergate era, when U.S. lawmakers sought to clean up corporate behavior abroad. Its influence helped spark global efforts, like the UK Bribery Act of 2010, creating a web of laws that multinational companies must navigate. Trump’s suspension risks weakening this framework, potentially leaving a vacuum other nations might fill with stricter oversight. For California-based firms, the message is stark: state laws still demand compliance, no matter the federal tide.

This tension isn’t new. Past executive orders, from Lincoln’s Civil War measures to Truman’s steel mill seizure, have clashed with state powers, often ending in court battles. Today’s divide mirrors that history, with states like California leveraging tools like the UCL to assert control where federal action wanes. Businesses caught in the middle face real-world headaches, balancing local rules against shifting national policies.

For now, California’s position is firm: bribery won’t fly here. The state’s legal alert serves as both a warning and a promise, ensuring companies can’t dodge accountability by pointing to federal leniency. It’s a practical stance with tangible impacts, from how firms train employees to how they bid for overseas contracts. Readers curious about the ripple effects might look to their own wallets, where the cost of corruption often hides in plain sight.

The bigger question lingers unresolved. As federal guidelines evolve and global partners reassess their own anti-corruption strategies, the balance between state and national authority remains in flux. Companies, lawmakers, and consumers alike are left watching a high-stakes tug-of-war, one that could reshape how business gets done, here and abroad. For California, the line is drawn, and it’s one worth keeping an eye on.