It is widely understood that corruption is a pervasive problem in many societies and undermines public confidence in the political system and government institutions, argues Carl Gershman, President of the National Endowment for Democracy. The scourge of corruption is generally viewed as a symptom of a larger problem of the failure of judicial, media, and other institutions of accountability in new or developing democracies. In kleptocracies, which is the term used to designate “government by thieves,” corruption is the lifeblood of the system and therefore the heart of the problem, he writes for World Affairs:
Karen Dawisha, the author of Putin’s Kleptocracy and one of the foremost experts on this issue, makes the observation that “in kleptocracies risk is nationalized and rewards are privatized.” Participation in the spoils of kleptocracy is organized and controlled by top political elites, who raid state resources with immunity and impunity. Whistleblowers, investigative journalists, and others who seek to expose corrupt practices become targets of law enforcement and are treated as enemies of the state.
By denying space for moderate political voices that offer possible alternatives to existing policies and leaders, kleptocracies open the way for extremists. Altay Goyushov (right), an Azerbaijani scholar and a former Reagan-Fascell Fellow at the National Endowment for Democracy, has observed that by repressing peaceful activists and reformers in Azerbaijan, the kleptocratic regime in Baku “argues that it is taking steps to ensure stability. They have this exactly wrong. By eliminating moderate voices in society, Azerbaijan’s leaders set the stage for an anti-Western environment that will serve as a breeding ground for extremists, who pose a grave security threat to both the region and the West.”
The larger group of enablers—those whose contribution to consolidating or financing a kleptocracy may be unwitting—include the major multinationals doing business in captured sectors of economic activity, such as much of the oil and gas or international construction industries in Azerbaijan, according to Sarah Chayes (left), Senior Associate of the Carnegie Endowment for International Peace. Increasingly, network-controlled state-owned enterprises, such as SOCAR, are requiring international investors to enter into joint ventures or use specific vendors, she writes in a new analysis, The Structure of Corruption: A Systemic Analysis:
So the international partner may find itself wired into the network willy-nilly. Given current difficulties in determining the identities of those truly benefiting from offshore corporations and their transactions, Western banks or real estate agents that take money without carefully examining the ownership structure of the shell companies investing it should probably also be considered enablers, rather than active facilitators
During last week’s Senate Foreign Relations Committee hearing on Corruption: Violent Extremism, Kleptocracy, and the Dangers of Failing Governance, experts weighed in on the U.S. approach to anti-corruption efforts in countries where kleptocracy has become deeply entrenched, writes Rachelle Faust.* Each panelist offered insight into how a system of corruption arises, persists, and how it can be rectified.
Corruption’s capacity to corrode democracy has made kleptocracy an issue of the utmost importance. In a time where democratic progress in many countries has, according to some, become stagnant, the projection of corrupt practices beyond the borders of a given kleptocracy presents a sizeable concern for the international community. In this context, the debate on how to most effectively combat corruption, and the related issues of violent extremism and failing governance, has gained a renewed fervor.
One of the primary obstacles for the United States, in terms of providing aid to those who seek to combat corruption, according to Carnegie’s Chayes, is that we take corruption far too lightly. During her testimony, Ms. Chayes expressed displeasure with the outcome of anti-corruption efforts that are being overshadowed by military and other assistance efforts. This lack of attention to the pervasive issue of corruption is sending a message to other countries that the United States is okay with corruption, a sentiment that fellow panelists had observed in various tenures abroad.
The NED’s Gershman (right) specifically addressed the existence of what he called “professional enablers” within established democracies, including the United States. These individuals and corporations, he asserted, serve as links in the process of embedding corrupt kleptocrats within our system, and may cause irreparable damage to the prospect for democracy in foreign countries that view the United States’ call for civil society and the rule of law as hypocritical.
Though their proposed methods differed, each panelist, as well as the presiding members of Congress, stated the need for the United States to reassess its anti-corruption tactics moving forward. Senator Ben Cardin suggested that the United States promote best practices and apply the framework of the Trafficking in Persons (TIP) Report to the issue of corruption by creating a common agenda on accountability and evaluating countries based upon a set standard of expectations. This proposition was met with some disagreement, in particular on the part of Tom Malinowski, Assistant Secretary of the U.S. Department of State’s Bureau of Democracy, Human Rights, and Labor, who suggested that foreign leaders would balk at the suggestion of being rated on their criminality by the United States. He instead suggested that consolidating current reports on corruption and incorporating evaluations from the World Bank and other international institutions would be a more effective method for combatting corruption.
A persistent theme within the discussion was the potential for kleptocracies to open the way for violent extremism by repressing peaceful activists and reformists, setting the stage for an anti-Western environment and for extremists who pose a threat to entire regions. Citing research on corruption and anti-corruption efforts, Mr. Gershman emphasized supporting and helping to build a capable citizenry as one of the most effective responses to kleptocracy. Again, this proposition was met with some resistance, in this case by Ms. Chayes, who argued against offloading responsibility onto fragile civil society organizations. It is likely that there is no single framework for combatting corruption, as the strength of civil society varies by country, as do other factors, such as culture and institutional stability, and that the most effective strategy is one that is both comprehensive and flexible.
*Rachelle Faust is an intern in Government and Public Relations at the National Endowment for Democracy.
