Carnegie Report On U.S. Policy Toward Corruption Abroad Misses The Mark

A recent study from The Carnegie Endowment For International Peace rightly concludes that the United States should make anti-corruption a significant element of U.S. foreign policy, but for the wrong reasons. The Carnegie report drastically oversimplifies corruption’s innumerable varieties and overstates the United States’ ability to stop corruption abroad. In particular, the report’s eye-catching assertion that al-Qaeda and its Islamist allies recruit on the basis of U.S. support for corrupt regimes misconstrues the relevant sense of “corruption” and the potential impact of a more fulsome anti-corruption policy. Instead of relying on this contorted self-interest argument, the U.S. should bolster anti-corruption efforts as a moral imperative, as part and parcel of democratic governance, and as the leader of the free world.

The thesis of the study, “Corruption[:] The Unrecognized Threat to International Security,” is that corruption contributes to lawlessness, undermines the rule of law and the state itself, and predisposes the population to indoctrination and recruitment by violent organizations. At the heart of the report are two charts: The first reflects a correlation between a nation’s position on Transparency International’s “Corruption Perceptions Index” (CPI) and Fund For Peace’s “Failed States Index;” the second shows a similar correlation between “Absence of Corruption” as measured by World Justice Project and “Political Stability and Absence of Violence/Terrorism” as measured by the World Bank’s World Governance Indicators. Hence the conclusion that corruption is a contributing factor in state failure, violence and terrorism.

There are two critical problems with this basic tenet. First, correlation does not reflect causation, as the report implicitly accepts. But the report proceeds under the assumption that reduced corruption would likewise produce reduced violence, terrorism or lawlessness, as the case may be. This assumption is a logical fallacy.

Second, corruption is a broad notion used in different ways in different places and under different circumstances. Black’s Law Dictionary, the go-to source for legalese, defines corruption narrowly as “Illegality; a vicious and fraudulent intention to evade the prohibitions of the law. The act of an official or fiduciary person who unlawfully and wrongfully uses his station or character to procure some benefit for himself or for another person, contrary to duty and the rights of others.” This approximates the common notion of official corruption.

Merriam-Webster’s definition is broader and more literary, “dishonest or illegal behavior especially by powerful people (such as government officials or police officers),” the act of corrupting someone or something,” “something that has been changed from its original form,” “impairment of integrity, virtue, or moral principle,” “depravity; decay; decomposition,” “inducement to wrong by improper or unlawful means (as bribery),” “a departure from the original or from what is pure or correct.” This definition incorporates the concept of a corrupting influence.

The instances of corruption abroad accordingly vary enormously, and the report fails to adequately address that diversity. The Carnegie report categorizes countries as either structurally corrupt or lacking central control, then shoehorns countries into one or the other, grouping together countries with little or nothing in common.

Structurally corrupt countries have “been repurposed to serve . . . the personal enrichments of ruling networks.” The unifying principle is that a group of elites grow rich on the backs of the population. North Koreans starve as the Kims amass billions. Fidel Castro lived as a king while his people barely subsided. Central Asia, much of the Arab Middle East, North Africa and vast reaches of sub-Saharan Africa suffer under more or less exploitative governments. South America is vastly improved in recent decades, but political advancement and surprising wealth accumulation still correlate. In China, a public crackdown on mid-level corruption is in progress, but masks pervasive corruption at the top and bottom of the governmental structure.

But the report also puts Saudi Arabia and Russia into this category, countries whose problems do not reflect the same sense of “corruption.” Saudi Arabia and its fellow Arabian Peninsula monarchies in particular have little in common with the rest of the group. The Saudi government enriches the monarch and royal family, but it is in fact a monarchy. Enriching the monarch is not corrupt according to most of the dictionary definitions, though it offends Western notions of integrity, virtue and moral principle. Further, if the nature of the Saudi government is inherently corrupt then the implications of opposing “corruption” are outlandish.

By contrast, Russia fits neatly into any definition of corruption. A putatively democratic system has been undermined by Vladimir Putin and his cronies who control the legislature and security organs, and intimidate the judiciary to prevent substantive oversight and silence opponents. Mr. Putin has forced the sale of private businesses as depressed rates so his supporters can snap them up and reap massive profits. This is corruption at a grand scale, as Mr. Putin unlawfully and wrongfully uses his station and individual influence to procure benefits. There is no identifiable commonality between corruption in Russia and Saudi Arabia, or between either and North Korea or Cuba.

The nations deemed corrupt for lack of central control are similarly disparate. Corruption for lack of central control arises where local officials, militias or other unrestrained and abusive authorities extort the population through theft, graft or rents. Within this category the report cites nations as diverse as Ivory Coast and South Sudan (little central government to speak of and wracked by internecine violence among competing warlords, claimants or fiefdoms), and Colombia and India (relatively strong central government failing to control local officials). Again, there are few if any common elements to effective anti-corruption efforts in South Sudan and India.

The failure to establish a functional working definition of corruption also undermines the report’s treatment of Islamic radicalism. The report credits Islamic terrorists’ accusation that the United States supports corruption in the middle-east as an effective recruitment tool. This accusation is indeed common among extremist literature, but the report’s interpretation is incorrect. First, extremists’ accusations do not refer to the monetary “corruption” that is the subject of the report, but rather to the perceived moral or religious corruption of Islamic leaders who fail to abide Islamists’ interpretation of Islam. Extremist groups recruit by reference to the Saudi royal family’s corruption, but this refers to their drinking alcohol, carousing and gallivanting in Monte Carlo instead of seeing to their Islamic obligations.

Second, Islamist recruitment literature is mere propaganda and reinvigorating U.S. anti-corruption measures would have doubtful practical impact. To the extent the sort of fiscal corruption the report refers to is a factor in Islamist recruiting at all, a campaign to end such corruption might easily backfire. Recruiters might refer U.S. pressure as evidence of Saudi or other foreign corruption, and any continuing U.S. aid would be spun as evidence of duplicity and hypocrisy. At bottom, Islamists hate the U.S. because they believe their religious obligations are mutually exclusive from liberal, Western values, and U.S. anti-corruption efforts or lack thereof are not a substantive consideration.

Likewise, the Carnegie repeatedly cites Mubarak’s Egypt as an example of a U.S.-supported state where systematic corruption lead to instability and violence, and criticizes President Obama for calling Mubarak a “force for stability and good in the region.” Mubarak was a stabilizing force, though. He replaced an assassinated prime minister (separated by Sufi Abu Taleb’s eight-day tenure), ruled for almost thirty years, and has been succeeded by a nascent Islamist theocracy overthrown by a military coup. Unlike his predecessors, Mubarak did not invade Israel and did not conspire to create a pan-Arab power. U.S. support for Mubarak was always offered despite his corruption and because the alternative was potentially far worse. History may judge Mubarak’s tenure as a relatively benign calm between Egypt’s militant-socialist era and its current upheavals.

In addition, the U.S. and allied Western countries already prohibit corrupt practices abroad, and the Department of Justice and Securities Exchange Commission have recently indicated increased focus on the Foreign Corrupt Practices Act which generally forbids bribes by U.S. companies to foreign officials. The FCPA has the salutary effect of privatizing anti-corruption measures by taking away the incentives and creating a market for private corruption detection.

Nevertheless, there is room for argument that the FCPA could be extended to sanction the foreign brokers and fixers that often pay bribes to foreign officials without their U.S. principal’s knowledge or authorization. As the law stands now, the principal is liable for the third party’s crime, while the foreign third party often escapes punishment. The U.S. could expand the FCPA to ban the third party from any business with the U.S. banking and financial sectors, including transaction clearing, a tactic deployed with great success against Iranian and terrorist assets.

And some of the report’s recommendations are appropriate, while others are myopic and unrealistic. Intelligence agencies should collect information on corruption because it is relevant, at least, to assessing foreign government stability, reliability and susceptibility to illicit influence. Diplomats should consider foreign corruption for the same reasons. The executive should not meet and lend credibility to corrupt foreign counterparts. Assistance money from the U.S. government, NGOs or multi-lateral organizations like the World Bank or World Trade Organization should be strictly monitored and conditioned, and terminated if diverted to private accounts. Where possible, foreign assistance for infrastructure or other tangible projects could be administered directly by the donor rather than remitted to the host nation.

On the other hand, the U.S. must be careful about interfering in other countries’ domestic affairs. Sponsoring civil anti-corruption efforts abroad borders on subversion or espionage; likewise systematically monitoring foreign officials’ finances. Denying visas risks creating a diplomatic rift and sets potentially troublesome precedent.

The most glaring omission is the report’s failure to invoke the United States’ moral obligations. As the leading global democracy, the United States should be pursuing a robust freedom agenda abroad. Corruption is inherently oppressive, as it interferes with or interrupts social and economic mobility, and so it derogates from that agenda.

The Carnegie report fails to address critical questions, undermining its conclusions and usefulness. This is unfortunate, because the United States has the prestige and moral obligation to combat corruption abroad, and an objective assessment of the U.S.’s limited tools would be invaluable. Nevertheless, the U.S. should oppose foreign corruption, not necessarily in hopes of tamping anti-Americanism abroad, but in the name of expanding free and democratic governance.

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