A US department of justice case looking into whether Digicel breached foreign bribery laws has been cast into limbo, after president Donald Trump moved to pause enforcement actions under a key federal act.
Mr Trump signed an executive order on Monday evening directing the country’s new attorney general, Pam Bondi, to immediately stop actions taken under the 1977 Foreign Corrupt Practices Act (FCPA).
The new order is aimed at restoring US economic competitiveness by having Ms Bondi draw up “revised, reasonable enforcement guidelines” for the FCPA, according to a White House fact sheet.
Past and existing FCPA actions will be reviewed, while future FCPA investigations and enforcement actions will be governed by this new guidance and must be approved by the attorney general, it said.
US legal case into Digicel in limbo following Trump’s executive order
Has the market won again on rent controls?
Romance, relationships and financial abuse: ‘They are terrified to go and spend €50 in Dunnes because they will be quizzed'
Leaving it late to raise concern about AIB not offering a tracker mortgage
Digicel, which was founded by Irishman Denis O’Brien in Jamaica but uses the US bond market to raise borrowings, said in November that it had made a voluntary disclosure to the department of information “relating to possible violations of the US Foreign Corrupt Practices Act”.
The group was “co-operating fully” with the US department of justice, it said at the time, adding that it was “committed to conducting business in adherence with laws and regulations of the jurisdictions in which we operate, supported by a rigorous ethics and compliance programme”.
“There is the obvious immediate impact on live cases and investigations with a pause on new actions and a review of ongoing actions to see if [they are] within the priorities of the administration. In terms of a wider impact it is too early to tell,” said Ciara FitzGerald, a partner in law firm Dentons’ Dublin office, declining to comment on individual cases.
Still, other legal experts say the department of justice may ultimately take a harder line on non-US companies in relation the FCPA.
The executive order is one of the most audacious issued so far by the new Trump administration, targeting a key tool used to tackle corporate misconduct, according to observers. The act has been used to impose billions of dollars in fines and settlement agreements on companies around the world, including Wall Street bank Goldman Sachs, French plane maker Airbus, Swiss commodities trader Glencore and US retail giant Walmart.
A spokeswoman for Digicel, in which Mr O’Brien lost control last January after a group of bondholders took 90 per cent of business in a $1.7 billion (€1.65 billion) debt-for-equity swap, declined to comment on the development. Representatives for the justice department did not respond to a request for comment.
The FCPA was enacted almost five decades ago for the purpose of making it unlawful for certain classes of people and entities, including overseas companies with shares and bonds tradable in the US, to make payments, gifts or offers of anything of value to foreign government officials to assist in obtaining or retaining business.
“It sounds good on paper, but in practicality, it’s a disaster,” Mr Trump said. “It means that if an American goes over to a foreign country and starts doing business over there, legally, legitimately or otherwise, it’s almost a guaranteed investigation indictment, and nobody wants to do business with the Americans because of it.”
The Digicel disclosure to US authorities is said to relate to activities in Haiti, which has again descended into chaos in recent years as criminal gangs have grown in power. Haiti has no president or parliament and is ruled by a transitional body that is struggling to contain social disorder and widespread poverty. More than 5,600 people were killed last year as a result of gang violence, according to the United Nations.
The Wall Street Journal reported last year on the difficulties Digicel has faced keeping its network in Haiti running, saying it has used subcontractors it calls “community liaisons” to meet gang chieftains so it can secure fuel from gang-controlled ports and ensure the safety of technicians conducting repairs. There were no suggestions in the report that improper payments were made.
In 2024, the department of justice and the Securities Exchange Commission filed 26 FCPA-related enforcement actions, and at least 31 companies were under investigation by year end, the White House fact sheet said.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
