The press, elected officials, and advocacy groups have sounded the alarm about what they describe as rampant corruption in the Trump administration: pardons issued following political contributions or a business deal that benefited the president and his family personally; mergers approved following multimillion dollar payoffs and backroom deals; access provided to government data that could benefit corporate interests aligned with the president; and some secret donations for the president’s gilded ballroom, in return for as-yet-undisclosed benefits. The New Yorker has tabulated “some three and a half billion dollars in Presidential profits” for Trump and his family since 2016, and others have put “the total ‘Trump Take’ at $1.8 billion” so far in his second term alone. And that’s just the potentially corrupt activity we know about: investigative reporting can only take us so far in uncovering wrongdoing by sophisticated actors, especially when those actors are steadily dismantling the internal oversight structures meant to detect it.
The executive branch has ample tools to police corruption, including laws designed to prevent bribery, conflicts of interest, and abuse of government data.
But through a multifront attack, the Trump administration has drastically eroded the system that is supposed to protect Americans from grifters in the government. Take, for example, the Department of Justice (DOJ). Among other things, DOJ is tasked with enforcing anti-corruption laws and running a process for recommending presidential pardons. To do so effectively, it has historically been somewhat independent from the President. Soon after taking office, Trump dismantled post-Watergate safeguards that had insulated the Justice Department from White House direction, redeploying the agency to shield allies and pursue opponents — likely enabling some of the conduct described above. The pattern has played out across the executive branch, with agencies reportedly dropping enforcement actions against entities that have relationships with Trump and granting fast-track approval for corporations connected to Trump, raising questions about potential bribery inside the companies themselves.
A future DOJ could investigate today’s lawbreaking. (And it appears that at least some executives have resisted the pay-to-play perhaps due to this possibility.) But the prospect of federal pardons and the statutes of limitations on some potential violations could get in the way; not to mention, any future administration will have an overwhelming list of other priorities as it sifts through the Trump administration’s legacy.
So how might those committed to democratic principles begin to punish, deter, or at the very least expose corrupt dealings in the federal government? Part of the answer lies in so-far underutilized state laws related to unfair competition and additional applications of federal administrative law – two of several possibilities, including those that others have identified. Together, the two target opposite sides of the same transaction: the private actors who seek corrupt advantage, and the federal agencies that grant it.
1. State Unfair Competition Laws
The vast majority of states have flexible laws against unfair and deceptive acts or practices (UDAP) and unfair competition (often called “little FTC Acts” after their federal cousin) that establish prohibitions on, variously, “unfair,” “deceptive,” “unlawful,” “abusive,” “unscrupulous,” “unconscionable,” “unethical,” and “rancid” acts and practices in the course of business. These laws reach any business activity that harms consumers or otherwise allows a competitor to gain an unfair advantage. And as detailed below, at least some such state laws can be used as vehicles for states to pursue activity that violates certain federal laws.
Paired with these broad UDAP and unfair competition laws are others granting investigatory authorities to state attorneys general and, in some cases, local government attorneys. State and local enforcers can request and require information from private entities if they believe that unlawful activity might be occurring or might occur in the future—often a rather broad standard (indeed, so broad that in other contexts, some attorneys general have arguably abused it). And most states have laws permitting them to exercise specific personal jurisdiction over businesses having only “minimum contacts” with the particular state—another low bar.
Taken together, these laws should empower state and local governments to open investigations, issue subpoenas, and bring lawsuits against private individuals and companies that manipulate the federal government for their own private gain and to the detriment of their high-road competitors.
As noted above, some states’ laws define “unfair competition” to include “unlawful” acts or practices in commerce. Many of these laws can “borrow” federal, local, and other states’ laws to make them independently actionable. A 2003 California Supreme Court case illustrated how this kind of claim could allow state-level enforcement of a federal bribery law. That case specifically focused on bribery of a foreign power, but the same logic would seem to apply to those seeking favor from the American government and to other corrupt practices.
And under most state laws, business practices that don’t violate another law can still be prohibited as unfair or deceptive, regardless of whether they are otherwise unlawful. Trump-era corruption might run afoul of this standard where that corruption takes the form of, for example, a briberous purchase in exchange for favors that enhance the purchaser’s competitive position, regardless of whether the conduct arises to an actual violation of federal bribery law. Or where a private interest gains unfair access to government data that might give it a leg up over its competitors, as experts have warned. Or where a corporate executive moonlights in the government with the authority to make decisions that could advantage his business interests.
Whatever the theory, such state laws might protect high-road competitors from being undercut by low-road ones that tilt the playing field by wielding their corrupt connections. Unfairly-garnered market power can lead to degraded quality and fewer choices, so using these laws can protect consumers who might otherwise lose choices in a given market and access to high-road sellers. And state enforcers need not police every instance of potential misconduct—one or two high-profile investigations or lawsuits could be enough to change market behavior.
Of course, legal conflicts between states and federal actors always involve tricky legal issues, many beyond our scope here. For example, the doctrine of intergovernmental immunity prohibits “States from interfering with or controlling the operations of the Federal Government” by “regulat[ing]” the federal government directly or “discriminat[ing] against” it. As relevant here, the doctrine may attach where a state law has a direct effect on the federal government’s ability to achieve its regulatory or contractual goals. Although state laws that regulate federal government contractors can be considered to be regulating the federal government directly, states might avoid that doctrine altogether where they pursue unfair competition claims against individuals and businesses in their private capacities, i.e., outside of the performance of a government contract itself or other official business, and where they are able to demonstrate that the conduct they seek to deter is already unlawful under federal law.
2. The Administrative Procedure Act
Described in the press as the “wonky workhorse of American law,” the federal Administrative Procedure Act (APA) has proven to be one of the most potent tools available to challenge Trump administration actions in court. The Act places procedural and substantive requirements on federal agencies, including by prohibiting agency action that is “arbitrary” or “capricious” or “not in accordance with law.”
Litigants might claim that agency actions resulting from corrupt dealings—for example, a regulatory waiver offered to a crony’s business—violate these prohibitions. An array of parties might be able to establish standing depending on the specific agency action at issue: a state might establish standing where federal corruption impairs the state’s sovereign interest in enforcing its own fair competition laws, or a competing, high-road business could allege a competitive injury.
An agency might fail the arbitrary-and-capricious test if, in the course of covering up a corrupt motivation for an action, an agency fails to “articulate a satisfactory explanation for its action.” It is also arbitrary and capricious for an agency to rely on “factors which Congress has not intended it to consider.” While we are not aware of court decisions directly addressing whether corrupt motivations are per se arbitrary and capricious, the logic seems straightforward: Congress doesn’t intend agencies to reward political cronies. And if an agency proffers a justification that was not the actual, potentially corrupt reason for an action, the agency might be vulnerable to claims of pretext. Although courts will generally afford the government a presumption of regularity, that presumption can be overcome, as has repeatedly occurred during this administration, and the APA allows courts to accept extra-record evidence of an agency’s impermissible reasons if there is “a strong showing of bad faith or improper behavior.” That’s a high bar, but corruption arguably qualifies, just as it can rebut other strong presumptions against plaintiffs. Reaching this bar might involve citing publicly available information that would raise questions about the agency’s stated rationale. Resulting discovery could provide valuable transparency into the government’s dealings, and a final finding of an APA violation could result in the vacatur of the challenged agency action.
Agency actions resulting from corruption may also be contrary to law under the APA. Whether such a claim can be based on any given federal law is a complex question, but some potentially relevant statutes—like the Privacy Act, which could be implicated if an agency improperly shares government data with other agencies or a private actor—are explicitly applicable to agencies, and might be available to potential litigants. (However, pitfalls remain, including whether certain statutes may be used as predicates for an APA suit.)
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To state the obvious: there is no substitute for a functional, transparent federal government. The damage done to the DOJ and the rule of law will not be easily reversed. But an incomplete answer is better than no answer at all.
State attorneys general—especially those in jurisdictions with the broadest UDAP statutes—could open coordinated investigations into instances where personal favors or corrupt interests seem to have influenced federal policy or benefits. And litigants challenging final agency actions under the APA could press the theories developed above, including to obtain discovery into agencies’ motivations. Neither lever is comprehensive. But each can begin to expose, deter, and document corrupt dealings that would otherwise remain shielded and, in doing so, begin earning back the public’s faith that government works for them, not the highest bidder.
