Trump froze bribery law that hit Tesla suppliers

The anti-bribery law whose enforcement President Donald Trump has suspended was previously used by the Department of Justice and financial regulators to win settlements totaling more than $1.5 billion from companies that are major suppliers for Tesla, the electric vehicle giant run by Trump’s ally Elon Musk.

And Trump in his executive order Monday pausing the law, which bans bribery of foreign officials, says, “American national security depends in substantial part” on the U.S. and its companies “gaining strategic business advantages whether in critical minerals, deep-water ports, or other key infrastructure or assets.”

Tesla and other electric vehicle companies rely on critical minerals, mostly sourced overseas, to make batteries.

Critical minerals and deep-water ports were the only two specific advantages mentioned by name in the order, titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security.”

CNBC has asked the White House, Tesla and Musk if the tech billionaire played any role in pushing for the order or for the inclusion of language about critical minerals in the directive. The White House declined to comment. Tesla and Musk did not respond.

In his first month in office, Trump has also signed executive orders and policy changes that could negatively affect Tesla by dramatically slowing down the adoption of EVs in the United States, according to the research firm Wood Mackenzie.

On an earnings call in January, Tesla CFO Vaibhav Taneja cautioned shareholders that Trump’s tariffs could hurt the company’s profitability.

Nonetheless, Musk’s power and influence within Trump’s White House have no precedent in modern politics.

Musk, the world’s richest person, spent nearly $300 million to help Trump win the 2024 presidential election.

It was relatively little given Musk’s estimated net worth of around $400 billion. But it was enough to cement his place as Trump’s most prominent supporter and advisor.

Now Musk works in the White House, where he oversees a wide-ranging and controversial effort known as the Department of Government Efficiency — dubbed DOGE — to slash federal government spending, employee head count, regulations and agencies.

In addition to being CEO of Tesla and leading DOGE, Musk controls several other companies, including defense contractor SpaceX, the social media platform X, chatbot and generative AI developer xAI, tunneling venture The Boring Company, and neurotech startup Neuralink.

The Foreign Corrupt Practices Act of 1977 makes it a crime for companies and individuals operating in the United States to bribe foreign government officials to obtain or retain business advantages.

The FCPA has long been considered a gold standard for anti-corruption statutes, and versions of it have been adopted by countries around the world.

But on Monday, Trump said the FCPA had “been systematically … stretched beyond proper bounds and abused in a manner that harms the interest of the United States.”

Trump ordered Attorney General Pam Bondi to cease, for 180 days, initiation of any new FCPA investigations or enforcement actions unless she determined an exception should be made.

He also ordered Bondi to review “all existing FCPA investigations or enforcement actions and take appropriate action … to restore proper bounds on FCPA enforcement.”

Then, in a highly unusual move, the order directs Bondi to review past cases under previous administrations, to determine whether any FCPA enforcement actions were “inappropriate.”

If Bondi finds that they were, the order says, “remedial measures” should be taken to compensate the parties charged with the violations.

Among these prior enforcement actions Bondi is set to review, there are at least four cases that involve Tesla suppliers or their subsidiaries.

None of those cases mention conduct directly related to Tesla.

But taken together, they reveal the significant role that the FCPA plays in regulating business practices in the critical minerals mining sector.

In May 2022, two divisions of the multinational commodity trading and mining firm Glencore pleaded guilty and agreed to pay more than $1.1 billion to resolve investigations by the DOJ and the Commodity Futures Trading Commission of their violations of the FCPA.

The FCPA charges related to a decadelong scheme by Glencore and subsidiaries “to make and conceal corrupt payments and bribes through intermediaries for the benefit of foreign officials across multiple countries,” the DOJ said at the time.

Glencore is a major supplier of cobalt, a metal used to make lithium-ion batteries.

Tesla has sourced cobalt for its EV batteries from Glencore. And in 2021, Tesla discussed buying a stake in Glencore, The Wall Street Journal reported.

As part of its May 2022 guilty plea, Glencore “agreed to retain an independent compliance monitor for three years,” the DOJ noted at the time.

In March 2023, the global mining giant Rio Tinto paid a relatively small fine, $15 million, to settle FCPA-related charges by the Securities and Exchange Commission stemming from payments made to a consultant in Guinea.

Tesla has agreed to purchase 75,000 metric tons of nickel from a Rio Tinto joint mining venture in the Upper Midwest.

Six months after the Rio Tinto settlement, North Carolina specialty chemicals manufacturer Albemarle — the largest producer of lithium in the world — agreed to pay more than $218 million to resolve investigations by the DOJ and the SEC.

In this case, the FCPA violations were related to Albemarle’s involvement in schemes to pay bribes to government officials in multiple foreign countries, including Vietnam, Indonesia and India.

A three-year nonprosecution agreement related to that settlement with the DOJ remains in effect for Albermarle, which provides lithium to Tesla.

In 2018, Panasonic Avionics Corp., a U.S.-based division of Panasonic Corp., agreed to pay a more than $137 million criminal penalty to resolve charges of violating accounting provisions of FCPA.

In a related proceeding, Panasonic agreed to pay around $143 million in disgorgement to the SEC after the agency filed a cease and desist order.

The SEC said Panasonic Avionics had “offered a lucrative consulting position to a government official at a state-owned airline to induce the official to help PAC in obtaining and retaining business from the airline.”

“At the time it orchestrated the bribery scheme, PAC was negotiating two agreements with the airline valued at more than $700 million,” the SEC said.

Panasonic Corp. makes batteries for Tesla, and the two companies share a factory in Nevada.