Bondi’s Rapid Corporate Crime Memos Rattle White Collar Bar (1)

Attorney General Pam Bondi’s rapid narrowing of corporate crime priorities has shocked former officials and white collar defense lawyers who’ve experienced more stability when past administrations change.

Abolishing globally focused investigative teams and restricting the scope of overseas bribery and foreign lobbying transparency probes will have a significant impact on what’s been a boon for the defense bar this century, upending conventional wisdom.

“The collective message across all of the different statutory authorities is the pace of change is much faster in these areas than we’re accustomed to,” said Claire Rajan, a Steptoe partner specializing in cross-border matters.

Some lawyers expressed a wait-and-see reaction, pointing out that certain types of foreign corruption cases could increase now that Bondi said prosecutors could proceed without the involvement of Justice Department headquarters.

But others said they were troubled with the message she sent by ordering Foreign Corrupt Practices Act and money laundering offices to displace past priorities with a focus on cartels and transnational criminal organizations.

FCPA in particular is a difficult statute for bringing charges against drug traffickers, and is typically leveraged against multinational companies instead, white collar lawyers said.

It’s all “sort of are consistent with what I think is the perception of the Trump administration, which is, ‘Of course if you want to build a hotel in Russia, you’re going to have to bribe people to be able to do that. So why are you putting these obstacles in our path?” said Leslie Caldwell, who ran the DOJ Criminal Division in the Obama administration.

One of Bondi’s directives called for eliminating a 2010 kleptocracy initiative that gained acclaim for seizing $1.7 billion in stolen assets from the 1MDB fund based in Malaysia.

“There’s a lot of really important work being done in the kleptocracy unit,” said Bill McMurry, who used to supervise the FBI team investigating foreign corruption and kleptocracy cases. “Everybody can get behind going after drug traffickers and terrorists,” which are critical cases but “low hanging fruit for politicians.”

“The more difficult work is going after government-sponsored criminal activity,” McMurry added.

Surprising Departures

While not unexpected for an attorney general to arrive with a decisive new agenda, Bondi’s guidance for prosecutors struck some as a departure in its dramatic rhetoric that appeared intended more for public consumption. One was titled, “total elimination of cartels and transnational criminal organizations.”

“That’s not possible,” Caldwell said. “It’s kind of meaningless.”

More substantively, the prosecution teams she disbanded or constricted have been lucrative funding sources for the government, seemingly aligning them with Trump administration priorities, several lawyers noted.

Her directive to limit criminal enforcement of the Foreign Agents Registration Act to “traditional espionage,” was also a surprise, given the statute has been used to target high profile politicians in both parties. Senate Judiciary Committee Chair Chuck Grassley (R-Iowa) has been a proponent of stronger FARA enforcement to limit influence of overseas actors.

The foreign agents retrenchment further jolted lawyers not expecting the nation’s leading law enforcement official to direct prosecutors to abandon a statutorily authorized criminal charge in its most recently applicable scenarios. Bondi instructed FARA attorneys to focus on civil enforcement instead.

“If an investigation—a civil inquiry—leads to a criminal investigation, leads to evidence of a willful failure to register, is the department really going to give people a free pass?” said Adam Hickey, a Mayer Brown partner who used to oversee DOJ FARA enforcement. “Maybe. But that would be highly unusual.”