Trump puts a stop on bribery law, will Adani benefit from this?
#News BureauFebruary 12,2025
US President Donald Trump has signed an executive order directing the Justice Department to stop enforcing a nearly half-century-old anti-bribery law. The same law was used to launch a bribery investigation against the Adani Group. It is understood that this development will benefit the Adani Group.
This development has come a day before Prime Minister Narendra Modi leaves for the US on a two-day visit. Modi is currently in Paris and from there he will go to the US. There he is going to meet Trump.
The Foreign Corrupt Practices Act (FCPA) came into force in the US in 1977. Under this law, it was illegal for companies operating in the US to pay foreign government officials to get business deals. US authorities have used this law to crack down on bribery. Many US companies were sued for this, which got business contracts abroad.
Trump himself is a big businessman and has business in many countries. Trump had objections to this law from the beginning. Due to this law, some of the biggest companies in the world were accused. Trump took advantage of the opportunity and put a stop to this law. In November 2024, US officials accused Gautam Adani and his nephew Sagar Adani of bribing Indian officials and a case was registered against them in the Federal Court. The FBI also submitted evidence in the court in this regard. The Adani Group had “refuted” these claims. While media associated with the Adani Group in India have reported on this, the Adani Group has not commented on this development in the US.
In 2020, US giant Goldman Sachs was accused of paying $1 billion in bribes to foreign officials in Malaysia. To settle this case, Goldman had to pay more than $2.9 billion under this US law.
Trump’s executive order states that the law was “abused in a manner that harms the interests of the USA.” It also said that the enforcement of this law is hindering US foreign policy objectives.
This order prevents federal officials from starting any new investigation or taking new action for 180 days. Unless the Attorney-General decides whether a case is an exception or not. The Trump administration will also review all existing investigations initiated under this law. This also includes the cases against Gautam Adani and Sagar Adani.
Trump’s new order has directed Attorney-General Pam Bondi to issue new guidance on how to implement the act that “promotes the right use of US law enforcement resources.” Last year, the Department of Justice (DOJ) under former President Joe Biden accused Adani of allegedly paying bribes of more than $250 million (₹2,100 crore) to Indian officials in exchange for favourable terms to secure solar power contracts.
The bribery allegations against the Adani Group came after it emerged that Adani Green Energy found itself unable to sell solar power through the Solar Energy Corporation of India (SECI). The US Justice Department, in its lawsuit filed in the New York Federal Court, said that when SECI was unable to find buyers for high-priced solar power, the Adani Group bribed Indian officials who signed contracts to buy solar power from SECI in their states.
However, the lawsuit filed in the US did not mention the price at which power was sold to power distribution companies in five states. These are – three companies in Andhra Pradesh, one each in Tamil Nadu, Chhattisgarh, Odisha and Jammu and Kashmir. The US market regulator, Securities and Exchange Commission (SEC), filed a separate complaint on the bribery scandal, in which it named only two accused: Gautam Adani and Sagar Adani.
The US regulator said Adani paid or promised to pay “the equivalent of hundreds of millions of dollars” in bribes to Indian government officials to buy electricity at above-market rates. The bribes directly benefited Adani Green Energy and Azure Power, solar energy producers in India, and will continue to do so.
The stay on the FCPA and its review is being seen as a relief for the Adani Group, but it remains to be seen what stance the US Justice Department takes after the six-month review period. Because the order has been issued now, while Adani’s case is in 2024. Trump’s order states that 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.” That is, the Attorney General has to decide whether a case will be filed against the Adani Group or not.
After the new guidelines or policies are issued, the Attorney General will decide whether additional action is needed in relation to previous improper FCPA investigations and enforcement actions. If presidential action is needed in some cases, he will recommend such actions to the President.
