Thieves of State: Why Corruption Threatens Global Security (29 page)

Yet where Western governments are paying for anticorruption efforts out of one pocket, they are often paying off corrupt governments out of another—and far more lavishly, via budget support, military assistance, basing rights, international loans, major development projects, or
covert cash handouts. Corruption is usually classified as a humanitarian aid problem, to be handled by donor agencies, not mainstreamed into overall foreign and defense policy. And while governments may support across-the-board efforts on a multilateral level, they almost never consider acute corruption as they shape their approach to specific countries. Human rights, religious freedom, protections for the LGBT community may enter the conversation, but corruption rarely does.

Tools to raise the cost of kleptocratic practices exist—in abundance. It’s just a matter of finding the courage and finesse to use them. All the levers and incentives listed below can be further refined, and new ones imagined, in specific contexts. Particular corrupt officials or structures have unique vulnerabilities and desires; and timelines and windows of opportunity for effective action will be specific to individual cases and will suggest even more potential actions as they are examined. Many of the actions below can and should be routinized—folded into the everyday activities of relevant bureaucracies—so as to reduce the onus on leaders to sign their names to audacious and thus potentially career-threatening moves. But in other cases, a strategy may need to be carefully thought through and tailored to the specific conditions of a given country at a specific point in time.

Generically, the leverage might be organized in the following categories.

CHIEF OF STATE TOOLS

T
O PROVIDE OFFICIALS
with impetus and authority for taking steps listed below, chiefs of state should consider enunciating an anticorruption policy, with appropriate motivation, and directing their ministries or cabinet departments to make use of all relevant powers and resources to further it. In the United States, an executive order or presidential memorandum might be an appropriate mechanism. The chief of state should assign a staff member to follow up on implementation of the directive across government agencies.

Publicized face-to-face meetings with Western chiefs of state often serve as important status-enhancing events for corrupt leaders. Victims
of corruption decry photo opportunities with the U.S. president as key enablers of their corrupt regimes. Such interactions should be agreed to and choreographed with care.

INTELLIGENCE TOOLS

I
NTELLIGENCE AGENCIES
are driven by the questions their clients ask them. If they have not compiled much information on the security impacts of acute corruption to date, it is because few policy makers have pointed them at that problem. Systemic corruption should be explicitly included in the intelligence community’s annual assessment of threats to U.S. national security, and similar such assessments regularly conducted by other Western governments. Intelligence professionals should be pulled off other tasks and assigned to study the structure and operations of kleptocratic networks as functioning systems. A framework for analysis should include such information as: the levers of power captured by the network, its favored revenue streams, its structure and manning, the degree of vertical integration, the internal and external enablers that reinforce it and facilitate its operations, its vulnerabilities, public attitudes toward corrupt practices, the other risk factors with which corruption interacts, the presence of constructive (popularly respected) actors inside or outside of the system, as well as the details of financial flows. Analysts and intelligence executives must design new collection requirements to fill knowledge gaps on these issues. Financial intelligence and information that helps pierce shell company or “beneficial ownership” smoke screens is particularly vital.

Given the different types of specialized knowledge required, “fusion cells,” bringing civilian and military intelligence professionals together with colleagues from the Treasury Department or the FBI or their international equivalents, will increase efficiency.

A better understanding is needed of the ways Western governments actively enable acute corruption, especially when they in effect buy access to top officials or national territory, or intelligence, or counterterrorism cooperation, or when they retrograde matériel from or through systemically corrupt countries after a war.

A research agenda, both inside and outside government, aimed at better elucidating the interplay between acute corruption and other risk factors in provoking past security events would take this subject beyond the intuitive, toward a substantiated argument that could better influence policy debates. Further research into methods applied by countries that have successfully curbed acute corruption would also help policy makers.

Finally, it is critical that direct intelligence agency payments to “assets” be brought into line with Western governments’ overarching policy priorities. Such decisions should be made through open debate at the cabinet level, in which other top government officials can weigh in with their own considerations. It is no longer acceptable for intelligence agencies to be able to hide from their colleagues in the cabinet—or even from the chief of state—the identities of the high-ranking foreign government officials they are paying.

DIPLOMATIC TOOLS

H
OW A POWERFUL
country engages with partner nations can influence their behavior and sends signals that are eagerly parsed by their populations. The United States and other Western governments should shape their diplomatic engagements with acutely corrupt governments in such a way as at least to avoid glorifying their practices. As is the case with chiefs of state, high-level publicized meetings with foreign ministers—or even overly cozy personal relationships—enhance leaders’ status.
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Corruption should figure among talking points for high-level bilateral meetings, including suggestions of detailed knowledge of partner government practices, and of potential repercussions, if concrete follow-up is actually likely. In cases of governments that prize international legitimacy, foreign ministers should call out acute corruption as often as they do the depredations of violent insurgents. But officials should beware of making threats if the political will to carry them out does not exist.

Diplomats should take greater pains to connect with populations in kleptocratic countries, without members of the government or their agents present. And they should protect their right to do so when such
governments inevitably push back—as Bahrain’s did by expelling U.S. Assistant Secretary of State Tom Malinowski in July 2014. They should avoid using government cutouts to conduct their everyday business—to interpret for them, or provide supplies or logistics solutions.

Visas for visits to or study in Western countries are highly prized in the developing world. As part of a strategized campaign targeting specific networks, visas should be denied or delayed to select kleptocratic figures. On the other hand, witnesses in cases against suspected offenders, local criminal investigators, prosecutors working such cases, and other constructive actors should be granted expedited visas and other facilitation. To date, the U.S. tendency has been to turn its back on financial or legal professionals who have taken a stand and suffered for it.

So long as international attention does not put them at risk, oversight bodies that prove their independence should receive support and capacity-building resources. So should individual legal or oversight professionals seeking to take a stand. They should receive encouragement and help in appealing to international professional bodies, such as the International Association of Supreme Audit Institutions.

Western countries can even help establish special judicial or oversight institutions within corrupt countries, if the environment allows, and provide international staff to bolster their independence. And Western officials can use their convening power and influence within multilateral bodies and institutions to ensure that acute corruption remains in the international policy spotlight.

An important function of foreign ministries is to promote bilateral investment and trade opportunities abroad for businesses of their own countries. Care should be taken in pursuing such efforts not to overlook hidden pay-to-play tollbooths, or otherwise inadvertently to reinforce corrupt ruling networks’ control over key sectors of their nations’ economies in the rush to capture economic “wins” for the home front.

It is the diplomatic toolbox that affords the most flexibility, the greatest ability to send messages subtly, with a concrete impact that can be camouflaged in delicate language. And yet in my own experience and according to senior U.S. civilian officials, U.S. diplomats typically resist holding the line on corruption. Their traditional role of cultivating relationships seems to trump other considerations.

FINANCIAL SYSTEM TOOLS

C
URRENT
anti-money-laundering rules—and in the United States, provisions under both the Patriot Act and Comptroller of the Currency authorities—provide for enhanced monitoring of the financial transactions of money-laundering suspects and “politically exposed persons.” Those requirements can be focused on select kleptocratic officials—ideally, again, as part of a synchronized strategy.

Several U.S. financial sanctions regimes could similarly be used to target kleptocratic officials whose activities fall within the categories of wrongdoing they penalize. The Narcotics Kingpin
¹⁰
and Transnational Criminal Organizations
¹¹
sanctions might be particularly relevant.

But given the severity and diversity of the security problems fueled by acute corruption, perhaps it is time to consider a new financial sanctions regime, enacted by executive order, that is explicitly aimed at significant corruption. The existence of such a regime does not automatically determine which individuals will be penalized. Those targeting decisions are made in interagency debate that weighs the political and diplomatic trade-offs on a case-by-case basis.

U.S. sanctions against Russia after its annexation of Crimea included a provision authorizing their application to officials

responsible for, or complicit in, or responsible for ordering, controlling, or otherwise directing, acts of significant corruption in the Russian Federation, including the expropriation of private or public assets for personal gain, corruption related to government contracts or the extraction of natural resources, bribery, or the facilitation or transfer of the proceeds of corruption to foreign jurisdictions.
¹²

Such language could serve as the basis for a broader executive order or legislation, and similar measures in other Western countries.

LEGAL TOOLS

F
OREIGN
C
ORRUPT
P
RACTICES
A
CT
prosecutions—which have done so much to curb businesses’ reflex to pay foreign officials for access to markets—could be selectively aimed at businesses suspected of bribing a particular kleptocratic official who is under the policy spotlight. Currently, the selection of targets is random, based on the ease of making a case. As part of such prosecutions, bribe payers should be encouraged to inform on bribe takers or other bribe payers. And their information should be collated and used as part of a strategized effort to reach targeted kleptocratic officials. Threat of prosecution to elicit such information should be part of that strategy.

Prosecutions under the Racketeer-Influenced and Corrupt Organizations (RICO) statute could also be mobilized, along with prosecutions under national legislation of Western countries where members of kleptocratic networks hold dual citizenship.

Prosecutions under U.S., U.K., and some other countries’ civil law that allow for the forfeiture of assets connected to a crime—even if no individual has been convicted or even apprehended for committing it—should also be directed in a more targeted fashion at the assets of specific kleptocrats. In the United States, currently, an understaffed office in the Department of Justice makes what cases it can, with too few resources and without any connection to broader U.S. foreign policy. (In April 2014, Attorney General Eric Holder announced a new team of FBI investigators dedicated to this effort. The dozen personnel exponentially increased investigative manpower.)

Other asset tracing and recovery efforts aimed specifically at the proceeds of corruption should be expanded, not least when those proceeds are held in the form of prestigious real property in Western capitals.
¹³

Reinforced and targeted searches and seizures of cash above a legal limit at airports that serve as hubs for transfer of illicit funds, such as Delhi, Dubai, or Frankfurt, could provide information as well as assets to return to countries in question.

Robust legal assistance should be provided to professionals living and
working inside kleptocratic or transitioning countries, who are bringing cases within their own borders against corrupt actors or assets.

Consideration should be given to expanding the rights of victims to bring cases internationally against perpetrators of severe, structured corruption. Such expanded jurisdictions in humanitarian law have led to war crimes cases in third-nation courts against Chilean and Rwandan perpetrators. Creative ways to break down traditional resistance to cooperation between justice ministry officials and civil society or victims’ organizations conducting nonstate investigations should be explored.

AID TOOLS

U
PSTREAM
of any changes in the way aid is delivered, Western countries and international organizations such as the World Bank and the IMF must gain a better grasp of how development assistance, including loans, millennium challenge assistance, grants by the global fund to fight AIDS, and capital for infrastructure improvements, becomes yet another “rent” that is captured by kleptocratic ruling networks. More research is needed into the ways kleptocratic networks use shell organizations such as GONGOs or contractors owned by a family member to monopolize international funds. Donor agencies should also actively collect information on contract and implementation irregularities, including by means of whistle-blower protections and rewards.