The U.S. Senate has agreed a bipartisan deal to address Venezuela’s political, economic, and humanitarian crisis, including the VERDAD Act, which includes specific measures for democracy assistance and “strengthens tools to combat kleptocracy.”
Autocracies in all their forms are built around political patronage and by extension around channeling public resources away from legitimate uses, and into the pockets of the governing oligarchy and its cronies, notes Dalibor Rohac, a resident scholar at the American Enterprise Institute in Washington DC. In a world with mobile capital, Western democracies have no easy way of extricating themselves from such kleptocracy—stolen money finds its way into real estate markets in London and Miami, and eventually into our politics as well, he writes in Taking the Fight to the Kleptocrats, an article for The American Interest:
The reality of democratic politics in Western Europe and the United States—with mysterious loans to extremist parties and figures such as Lev Parnas and Igor Fruman—is starting to look eerily similar to intrigues endemic to the countries of Eastern Europe and Central Asia. “The politics that Ukraine has suffered through as a result of its conflict with Russia have become our politics as well,” observed Mitchell Orenstein.
“We are desperately trying to change the country … from a very corrupt kleptocracy to a democracy,” Kaleniuk told the Los Angeles Times last month. “This is Ukraine’s moment, the moment to help. And instead, we got a knife in the back.”
It is time to strike back, AEI’s Rohac adds. As Clay Fuller puts it, “transnational kleptocracy is the adversary, and America has non-violent, asymmetrical weapons it can use in the growing clash between democracy and authoritarianism.” For example….
Resources for democracy and rule of law promotion are often tied up in multi-annual programs, which makes it difficult for policymakers to respond quickly to events like the downfall of Yanukovych’s regime in Ukraine. But In the House, there are a number of more modest yet nonetheless meaningful pieces of legislation with broad bipartisan backing, he notes:
- The Countering Russian and Other Kleptocracy (CROOK) Act would create a rapid-response fund from part of the fines collected from U.S. businesses under the Foreign Corrupt Practices Act of 1977.
- The Foreign Extortion Prevention Act would criminalize bribery demands by foreign officials, as opposed to just penalizing U.S. companies, and the Kleptocrat Exposure Act would create a public database of individuals who have been denied a U.S. visa on suspicion of corruption or human rights abuses;
- The Protecting United States Business Interests Abroad Act would provide a new legal basis for visa bans against foreign persons who attempted to extort U.S. companies.
- Finally, the Justice for Victims of Kleptocracy Act would create a consolidated database of assets currently frozen by the U.S. government, presented as money “stolen from the people of country X—and recovered by the United States.”
If the current momentum is sustained and built on, fighting kleptocracy could be a new rallying point for the myriad of currently disconnected programs aimed at promoting democracy and the rule of law, many of them on intellectual and political autopilot since the mid-2000s, Rohac contends.
Over the past year, the National Endowment for Democracy’s international Forum has addressed the issue of Combating Transnational Kleptocracy:
- In a Power 3.0 Podcast episode entitled “Investigating Transnational Kleptocracy,” Miranda Patrucic explains how the cross-border networking of investigative journalists can be an effective tool for countering the challenge of modern transnational kleptocracy by following the money across international borders.
- In “Dictators in Moneyland,” Power 3.0 Podcast guest Oliver Bullough discusses how transnational kleptocracy—the process by which illicit money is stolen in one location, laundered through anonymous off-shore vehicles, and spent in jurisdictions where it is safe from interference—corrodes democratic and rules-based institutions.
- Melissa Aten spoke with Ilya Lozovsky on the Troika Laundromat Investigation and Journalism’s Role in Fighting Networked Kleptocracy about OCCRP’s recent “Troika Laundromat” investigation and the vital role collaborative journalism plays in combating transnational kleptocracy.
- In the Power 3.0 Podcast episode “Contextualizing China’s Corrosive Capital,” Martin Hala discusses the impact of China’s economic and political investments in the Czech Republic and elsewhere in Central and Eastern Europe, revealing these investments’ surprising ability to influence and impact governance institutions in the region and beyond.
- Tutu Alicante in a Power 3.0 Podcast episode entitled “Countering Kleptocracy From the Inside Out” examines the transnational elements of Equatorial Guinea’s kleptocracy, including its impact on regional and international institutions, and how coalitions of transnational civil society groups can respond.
- On May 10, Christopher Walker testified before the U.S. House Foreign Affairs Committee on “Dollar Diplomacy or Debt Trap? Examining China’s Role in the Western Hemisphere,” noting that China’s leadership is placing increasing importance on exerting influence and shaping the political operating environment through its economic engagement.