What I'm reading on governance & conflict - #22
Corruption, kleptocracy and illicit finance at the heart of a new domestic and foreign policy
Well, that was a hell of a week…
In a short interview with Open Democracy on Election Day, I talked about how what we were seeing in the US was an ‘anti-corruption election’, with both sides using relatively similar language to describe the other. Whatever the rhetoric, from an anti-corruption and anti-kleptocracy perspective, the result of the US election is a great outcome, as it is for all sorts of other things - climate change, the international system, NATO, a return to more predictable foreign and development policy, not waking up to whatever crazy thing has happened on twitter and, as an American, the chance to begin to heal some pretty huge divides and to do some ‘cathedral thinking’ for future generations.
President-elect Biden set out his vision for foreign policy in this article on ‘Why America must lead again’. He sets out a clear vision around three key areas: renewing democracy at home; a foreign policy for the middle class; and the US ‘back at the head of the table’, prepared to lead. What is really clear is that we’re not seeing the end of an ‘America First’ approach to foreign policy, just thankfully (!) a non-xenophobic version. This isn’t an Obama-era approach, nor is it a Bush Jr-era version either. Instead, it’s focused on rebuilding US democratic institutions, putting American workers first and strengthening the international system - protecting US national security with each ‘pillar’.
Fighting corruption and kleptocracy is central to Biden’s approach to renewing democracy, and he explains why: “By presiding over the most corrupt administration in modern American history, [Trump] has given license to kleptocrats everywhere.” He goes on to explain how he plans to tackle the dark money that undermines democracies everywhere:
I will also take steps to tackle the self-dealing, conflicts of interest, dark money, and rank corruption that are serving narrow, private, or foreign agendas and undermining our democracy. That starts by fighting for a constitutional amendment to completely eliminate private dollars from federal elections. In addition, I will propose a law to strengthen prohibitions on foreign nationals or governments trying to influence U.S. federal, state, or local elections and direct a new independent agency—the Commission on Federal Ethics—to ensure vigorous and unified enforcement of this and other anticorruption laws. The lack of transparency in our campaign finance system, combined with extensive foreign money laundering, creates a significant vulnerability. We need to close the loopholes that corrupt our democracy…
…As a [Global Summit for Democracy] commitment of the United States, I will issue a presidential policy directive that establishes combating corruption as a core national security interest and democratic responsibility, and I will lead efforts internationally to bring transparency to the global financial system, go after illicit tax havens, seize stolen assets, and make it more difficult for leaders who steal from their people to hide behind anonymous front companies.
The potential impact of this - if a genuine commitment - can’t be overstated. The journalist and writer Oliver Bullough was excellent on the impact of missing US leadership in this space, for example:
Biden has a track record of speaking out about the threat that foreign dark money poses to US democracy (see this piece from 2018, for example), and there is plenty of evidence of how damaging secrecy jurisdictions and tax havens are for national/global security and for well-being. See, for example, this piece by John Christensen in late October on how ‘Tax havens harm our well-being and security’, or Transparency International in mid-October on how ‘Shell companies make fighting foreign bribery an uphill battle’, or this early November piece from the World Bank on ‘Hiding in plain sight: Ending the corrupt abuse of anonymous corporate structures is a development imperative’, or this excellent piece on China, Russia and others in Foreign Affairs about ‘The rise of strategic corruption: how states weaponise graft’. Paul Massaro, a bipartisan congressional staffer, also had a very useful twitter thread pulling together different resources to show how this isn’t a partisan issue at all.
However, there are plenty of people out there writing about how we can’t let President-elect Biden or the US off the hook on corruption, kleptocracy and illicit finance. Putting this vision into practice also means tackling the US’s own role in illicit finance, including Biden’s own state of Delaware and others such as South Dakota, as well as the US sources of dark money that undermine democracies around the world (this RUSI event on ‘Dark money and democracy: is there a way out?’ was great on this, for example).
Leading on this agenda means leading by example. As Branko Milanovic wrote this weekend, on ‘What we owe to Donald J Trump’:
Trump thus gave us another very valuable lesson: it showed the rot, corruption and impunity that lay at the heart of many powerful businesses. His persona revealed the depth of corruption at the center of politics and the center of business. These are unpardonable sins. Sins enjoyed in secret are acceptable or overlooked; sins flaunted are not. Those who replace him will do their best, not to change that because it has become a systemic feature, but to cover it up. But once you see the truth it will be difficult to go back pretending nothing has happened.
The need to lead by example also came through strongly in this excellent pre-election webinar from the British Foreign Policy Group and the Westminster Foundation for Democracy on ‘A global force for good? How the UK’s values mission could advance our geopolitical interests’, an absolute must-view. Having been in several workshops/events on the issues discussed in this webinar, this is the first one not under Chatham House rule where I’ve seen some really important tensions, trade-offs and challenges come through, including several speakers talking about the UK needing to ‘get its own house in order’, as with the US.
Sophia Gaston’s excellent post-election analysis on ‘What Joe Biden’s victory means for the UK and Global Britain’ touches on some opportunities and challenges for UK foreign policy following the result (and is perhaps more realistic than some pre-election analysis), though she sadly misses out the leading role that the UK could play alongside the US on fighting corruption, kleptocracy and illicit finance as part of a commitment to democracy.
The UK has made a lot of important and substantive efforts to clean up its own role in enabling corruption, kleptocracy and dirty money since the 2016 Anti-Corruption Summit was held in London. This includes, for example, recent Magnitsky legislation and improvements to the systems needed to tackle economic crime, such as corporate transparency and registry reform. But these haven’t been enough to stop a sense that the UK is relinquishing its global leadership in this space, as RUSI’s Tom Keatinge, for example, recently discussed in this piece on ‘The UK and illicit finance: still part of the problem, not part of the solution’ or as noted by Moody’s in its recent downgrading of the UK’s credit rating.
The US election provides an important window of opportunity for the revitalisation of the UK’s global leadership on anti-corruption and illicit finance, something that Parliament’s cross-party Intelligence & Security Committee noted as being in the national interest and essential for national security. It’s also something we talked about recently in a webinar I was part of with Andrew Mitchell MP, Clare Short and Prof Richard Black on ‘The future of international development', where leading on this agenda is at the heart of being a force for good (or ‘force for progress’, as the Biden-Harris transition team call it).
On both sides of the pond, I’m excited to see this leadership - and living our values - in action as the new administration takes shape and important alliances are (re)built.
Just for fun…
I noticed that ‘Schitt’s Creek’ was trending on twitter, as people turned to something easy on the soul for a brain break during the tension of hitting ‘refresh’ again and again over the course of the week. We decided to put aside ‘The Bureau’ temporarily to watch something less likely to get our blood pressures up. Highly recommend it!
I was very pleased that the election went off with very few problems, not in the least because my parents were both election volunteers in my home town. When I saw the Nevada election official say on the news that his wife and mother were afraid for his safety and that he had to take extra precautions for his staff, I decided to send the new team flowers to say thank you for their service.
Finally, this was an election filled with poetry, but I’ll avoid the wonderful - if obvious - choice of Seamus Heaney and will instead end with this, from Birmingham-born 🎉and now Shetland-based poet Sheenagh Pugh…
