Political economy scholars argue that FDI market entry barriers fuel corruption in developing countries. Yet corruption often grows after barriers decline. We argue that FDI liberalization paradoxically increases corruption by increasing FDI inflows, expanding corruption opportunities for local officials. Exploiting India's sudden 2005 FDI liberalization, we estimate FDI liberalization's effects on local corruption. Our novel, theory-driven measures of local corruption leverage transfers of career-constrained bureaucrats across posts, a mechanism politicians use to pressure bureaucrats into abetting corruption. In FDI-exposed districts, career-constrained bureaucrats were more likely to be transferred and assigned to corruption-lucrative posts. Politicians saw 24% abnormal growth of personal assets but only when they could influence bureaucratic transfers. Alternative explanations related to bureaucrat skill and local embeddedness find no support. Domestic firms' corruption exposure remained unchanged, isolating FDI's effect. Our findings reconcile liberalization with growing corruption, highlighting new ways that greater economic integration undermines governance in developing countries.