State AGs may increase efforts to combat foreign corruption

In the realm of anti-corruption enforcement, the focus has long been on federal enforcement of the Foreign Corrupt Practices Act (FCPA), put into effect in 1977 to prevent bribery involving U.S. entities and foreign officials. The U.S. Department of Justice has been the primary enforcer of this statute, overseeing criminal proceedings related to FCPA violations for decades. However, the landscape of anti-corruption enforcement may be shifting as State Attorneys General consider stepping up their efforts in the wake of a pause in federal enforcement.

In February 2025, an executive order issued by the Trump administration put a temporary halt on criminal enforcement of the FCPA for a period of at least 180 days. This order tasked the Attorney General with reviewing current investigations and implementing new policies to align with presidential priorities in foreign affairs and economic competitiveness. While this pause did not affect the Securities and Exchange Commission’s ability to pursue civil enforcement, it did spark speculation about the potential role of State Attorneys General in filling any void left by federal enforcement shifts.

California Attorney General Rob Bonta made headlines in April 2025 when he announced plans to take up anti-corruption enforcement efforts at the state level, specifically targeting FCPA violations. Bonta’s legal advisory clarified that California’s Unfair Competition Law (CA-UCL) could be used to prosecute businesses engaging in corrupt practices. This law provides avenues for civil penalties, restitution, and injunctive relief in cases of fraudulent or unfair business practices, including violations of the FCPA.

Emphasizing the economic significance of California and the importance of maintaining ethical business practices, Attorney General Bonta underscored the necessity of combatting corruption within the state. By positioning the CA-UCL as a tool for addressing FCPA violations at the state level, Bonta’s initiative highlighted the potential for state enforcement to align with federal priorities while filling gaps created by shifting federal policies.

It is crucial for businesses to differentiate between federal FCPA enforcement and state-level enforcement under the CA-UCL, considering the differing scopes and implications of each. While the CA-UCL lacks criminal penalties and has a shorter statute of limitations compared to the FCPA, it still poses a significant threat to entities engaging in corrupt activities. As California sets an example for other states with similar consumer protection laws, the anti-corruption landscape may face increased complexity as businesses navigate a patchwork of state and federal regulations.

Looking ahead, the possibility of other states following California’s lead in bolstering anti-corruption enforcement raises questions about the future of foreign bribery enforcement in the United States. Additionally, the residual risk of federal enforcement through statutes like the Travel Act serves as a reminder of the intricate legal framework governing anti-corruption initiatives across state and federal levels. Ultimately, the proactive stance taken by California Attorney General Bonta reflects a broader trend of State Attorneys General prioritizing enforcement in areas that may be overlooked at the federal level, underscoring the evolving landscape of anti-corruption initiatives in the U.S.