The presidency of Donald Trump terrified anti-corruption practitioners in both the US and abroad. Because of its role in enforcing anti-corruption legislation with extraterritorial reach, supporting civil society initiatives that fostered anti-corruption, and creating international legal instruments against corruption, the US was rightfully seen as one of the main promotors of anti-corruption measures. The appointments of Trump family members to important positions in the administration and the use of Trump-owned real estate raised red flags regarding suspicions of conflicts of interest and state capture. Reports that Trump considered a suspension of limitations for the Foreign Corrupt Practices Act and his ad hoc involvement in certain situations — such as the case of the Turkish Halkbank officials charged with corruption — seemed to point toward what many of his critics claimed: namely, that the administration had strong ties to organized crime networks.[1] Still, the national security strategy of the Trump’s administration emphasized anti-corruption measures, as well as sanctions as an economic tool to coerce adversaries and preserve the competitiveness of US companies on a global scale, thus maintaining the important role that anti-corruption gained under the G.W. Bush and Obama administrations. Thus, despite his personal opposition to sanctions, Trump seemed to realize the centrality of unilateral sanctions — whether focused on trade, corruption, or human rights — to his own political project of unilateral American foreign policy.[2] This probably explains why US sanctions based on these different grounds remained unchanged and legally unchallengeable despite the questions over their extraterritorial application.
The Biden administration’s approach to anti-corruption
However, the National Security memorandum issued by President Joe Biden on June 3rd further elevated the relevance of corruption in relation to the security of the United States. What sets the approach apart from Russia, China or Romania — as countries that have similarly styled corruption as their national security threat — is not just the description of corruption as a “core national security threat”. Rather, it is also the wider context in which the weaponization of corruption as a vehicle for mobilization and promotion of authoritarian governments’ interests — primarily those of Russia — is becoming harder to contain. While the US has supported investigative journalists who have published leaks and stories about such weaponization, this activity is not sufficient in preventing the rise of corrupt, populist projects. Similarly, the support for civil society initiatives that promote government transparency as a precondition for accountability and democracy (provided primarily via USAID and other US-based organizations and agencies[3]) does not prevent a global decline in the rule of law and democracy standards.[4]
The second element that makes the Biden administration’s approach unique is its desire to make anti-corruption a part of foreign policy that would be beneficial to the interests of the US’s middle class, just as Trump sought to use his unilateral approach to global trade to speak to his constituents. To that extent, it is telling that Jake Sullivan, Biden’s National Security Advisor, has been involved in the development of said approach. The memorandum issued by the administration lists a number of fields (from beneficial ownership of companies to partnerships with civil society and private companies) in which an interagency review will focus on strengthening anti-corruption; the recommended changes will be completed by the end of the year. Reacting to the memorandum, many law firms have warned their clients of impending changes to the anti-money laundering and compliance standards, while ideas that would align the global anti-corruption efforts to the US constituency continue to be developed.
Limits and boundaries of anti-corruption
There is no doubt that the US is in an excellent position to collect data on corrupt transactions. Aside from the aforementioned support to investigative journalism and civil society initiatives focused on corruption, the status of the US dollar as the main global reserve currency forces foreign banks to use US correspondent banks, which often gives grounds not only to monitor but also to sanction transactions to corrupt regimes.[5] The enforcement of the Foreign Corrupt Practices Act as more than just a tool for global compliance with US foreign bribery norms also provides the US Department of Justice (DoJ) with additional access to information on foreign corruption.[6] To illustrate, the companies that conclude deferred prosecution agreements with the DoJ often do so under the condition that the data on corrupt transactions will be provided to the DoJ: as such, this data may reveal the existence of corrupt transnational networks.[7]
What should also not be underestimated is the US’s power to target and delegitimize certain actors with proven connections to political corruption and corrupt transnational networks that exert political influence. The recent designation of three influential Bulgarian businesspersons and politicians as corrupt for their use of public institutions for personal gains and the subsequent action of the Bulgarian government is a case in point. Such designations seem to highlight the strategic goals of anti-corruption as a core national security priority: “to rally our allies to combat corruption and kleptocracy, and to hold systems of authoritarian capitalism accountable for greater transparency and participation in a rules-based system.”
Significant limitations to the power of anti-corruption actions exist. Since the 1990s, a decade in which corruption became a leading issue for the rule of law and economic development[8], many important anti-corruption campaigns have been launched by law enforcement agencies in many countries. Some of them, such as those in Romania, Italy, and Brazil, included the widespread and systemic prosecution of large portions of the political class in those countries.[9] The three campaigns also teach a lesson about the importance of a public narrative for the legacy of these campaigns. In Romania, the designation of corruption as a national security threat was inspired by US anti-corruption experts who viewed the Romanian police forces as part of the corruption problem. However, the Romanian national security agency’s (SRI) involvement in both the collection of evidence to be used in courts and collaboration with the prosecutors led many to believe that the campaigns were a continuation of the secret service’s involvement in public life, reminiscent of Ceausescu’s times.[10] In Italy, despite little evidence that would prove significant foreign involvement, many believed that the Mani pulite investigation was inspired by US intelligence services; in any event, the campaign had very little effect on the accountability of the political class.[11] The successes of the Brazilian Lava Jato campaign depended on significant international co-operation from both Swiss and US law enforcement officials. Unfortunately, upon revelations that the lead prosecutors in the case collaborated with the presiding judge in the key trial of former president Luiz Inacio Lula da Silva, the overall perception of the campaign changed from that of an anti-corruption crusade to a politically-motivated persecution inspired by the US.[12]
This is why it would be premature to conclude that more commitment to anti-corruption would necessarily lead to lasting changes in transparency and accountability in countries faced with significant corruption challenges. Instead, the Biden administration should look to isolate and delegitimize individuals who support authoritarian and kleptocratic political projects. However, while this approach seems to have worked in Bulgaria, the public has learned very little about the success of similar targeting — for example, of the oligarchs close to Russian President Vladimir Putin — putting into question its effectiveness.
This reveals the problem of communication as one of the main impediments to a successful anti-corruption drive. An effective communication of this drive to the domestic constituency demands more than pronouncements that the fight against corruption “is self-defense.” Instead, a more effective communication about the fight against corruption within the US would send a message both to the US’s middle class and those around the world that the emancipatory potential of the fight against corruption is real. Globally, while the success of the US in curbing corruption outside its borders may have an impact on the prices of real estate in the US and competitiveness of US companies, such major efforts demand actions on such a scale that they were found problematic, as in the examples we provided previously. Additionally, while US law enforcement agencies often target US companies, targeting of US politicians has been rather rare. The US has some of the most liberal laws around political financing, while the 2015 US Supreme Court judgment in McDonnell v. United States sets rather wide limits for undue influence of politicians’ official acts.[13] Such a framework limits the possibility of a domestic anti-corruption campaign similar to those we have witnessed in the aforementioned countries.
What also makes the mobilization potential of anti-corruption on the global scale doubtful is whether the US and the EU will align their interests on this issue. As a recent ECFR policy paper asserts, it is the desire of both actors to preserve their strategic autonomy that will limit key coordination in areas in which proceedings from corrupt acts are hidden, such as tax evasion or money laundering. While recent US legislative initiatives have finally aligned the US with the practices of transparency of corporate ownership, the US still lags behind the EU in the implementation of these standards. EU banks, having found themselves on the receiving end of US regulators’ sanctions[14], may prove to be skeptical to any further increase in money laundering standards.
All these uncertainties and obstacles display the limited chances for success of the anti-corruption drive of the Biden administration. In assessing its effectiveness, we should look to the ability to contain the (primarily Russian) weaponization of corruption and to deliver the expected outcomes to the US’s middle class as the administration’s main constituency. However, ultimately, the attainment of one of these two main goals may require actions that contradict the realization of the other objective.
[1] Kendzior, S., 2020. Hiding in plain sight: The invention of Donald Trump and the erosion of America. Flatiron Books.
[2] Goldsmith, J. and Mercer, S., 2019. International law and institutions in the Trump era. German Yearbook of International Law, 28.
[3] Singh, D., 2019. Challenging corruption and clientelism in post-conflict and developing states. Crime, Law and Social Change, 71(2), pp.197-216.
[4] See the World Justice Project Rule of Law Index at https://worldjusticeproject.org/our-work/research-and-data/wjp-rule-law-index-2020 (noting that there is roughly speaking twice as more countries in which rule of law has declined than those in which it has improved) and Freedom in the World 2021 Democracy Under Siege, Freedom House https://freedomhouse.org/report/freedom-world/2021/democracy-under-siege
[5] Drezner W.D. 2015. Targeted Sanctions in a World of Global Finance, International Interactions, 41:4, 755-764
[6] Leibold, A. 2014. Extraterritorial Application of the FCPA Under International Law. 51 Willamette Law Review.
[7] An assessment of the extent to which this data is used still escapes us. However, for a demonstration of the breadth and the quantity see Mobile Telesystems Pjsc and Its Uzbek Subsidiary Enter into Resolutions of $850 Million with the Department of Justice for Paying Bribes in Uzbekistan, United States Department of Justice, Mar 7, 2019. at https://www.justice.gov/opa/pr/mobile-telesystems-pjsc-and-its-uzbek-sub...
[8] O'Byrne, S., 2012. " There is nothing more important than corruption": The rise and implementation of a new development idea. The Johns Hopkins University.
[9] For Brazil, see Lagunes, P.F. and Svejnar, J. eds., 2020. Corruption and the Lava Jato Scandal in Latin America. Routledge.; For Italy Travaglio, M., Gomez, P. and Barbacetto, G., 2012. Mani pulite. La vera storia. Chiarelettere. For Romania, see Mungiu-Pippidi, A., 2018. Explaining Eastern Europe: Romania's Italian-Style Anticorruption Populism. Journal of Democracy, 29(3), pp.104-116.
[10] Mungiu-Pippidi, A., 2018. Explaining Eastern Europe: Romania's Italian-Style Anticorruption Populism. Journal of Democracy, 29(3), pp.104-116.; Long Shadow: How Romania’s Securitate Turned the Revolution into Riches, Balkan Insight, Feb 3, 2021 at https://balkaninsight.com/2021/02/03/long-shadow-how-romanias-securitate-turned-the-revolution-into-riches/
[11] Generally, see Vannucci, A., 2009. The controversial legacy of ‘Mani Pulite’: A critical analysis of Italian corruption and anti-corruption policies. Bulletin of Italian politics, 1(2), pp.233-264.
[12] “Keep it confidential” The Secret History of US involvement in Brazil’s Scandal-Wracked Operation Car Wah, The Intercept, Mar 12, 2020, https://theintercept.com/2020/03/12/united-states-justice-department-bra...
[13] Torres-Spelliscy, C. 2019. Deregulating corruption. Harvard Law & Policy Review,
13(2), 471-506.
[14] Emmenegger, S., 2016. Extraterritorial Economic Sanctions and Their Foundation in International Law. Arizona Journal of International & Comparative Law, 33,
