My first reaction when I read the secret details from the Pandora Papers about how the world’s rich hide their assets was: What else is new?
Do we need 11.9 million records leaked from 14 firms in the offshore financial services industries and an international consortium of investigative journalists including media partners like the Washington Post to tell us that Vladimir Putin’s alleged mistress bought a luxury apartment in Monaco? Or that Jordan’s king amassed $100 million in concealed property in Malibu, Calif., London, and Washington? Ditto for Azerbaijan or Kenya?
Kremlin corruption under Putin and his oligarchs is legendary, and any Jordanian can talk of financial folderol in the royal palace. Is anyone startled when the investigators claim to have information on more than 330 politicians and public officials from over 90 countries and territories, including many leaders?
No, because we — myself included — have become too inured to this stuff. In 2016 the Panama Papers, a similar investigative journalism cull, laid bare the corruption of the offshore banking industry, and nothing much happened. Now the Pandora Papers claim to have dirt on twice as many public officials. So?
Indeed, spiraling public corruption has not only become the new normal abroad but is ensconced at home, where the Trump presidency made it a central feature of the White House. In fact, what bothered me most, in my initial reading of the Pandora Papers’ details, was that they didn’t focus enough on corruption here.
So I turned to Sarah Chayes, a leading expert on global and U.S. corruption networks and the links between them and author of Thieves of State: Why Corruption Threatens Global Security, followed by On Corruption in America, and What Is at Stake.
“I am disappointed in the anti-corruption movement for not coming to grips with how we parallel corruption in other countries,” she told me, “and for not taking on corruption power structures in our own [Western] countries.”
Chayes came up against the links between U.S. and developing world corruption networks in Afghanistan, where I first met her in 2009 in Kabul dressed in military fatigues. She had already run a development organization in Kandahar for several years. Then she had helped establish an anti-corruption task force as a special adviser to Gen. Stanley McChrystal, the commander of international troops in Afghanistan.
Her anti-corruption efforts, and those of military officials who backed her, were thwarted by networks of Afghan officials, who reinvented their relatives as businessmen, and by U.S. policies that fed piles of money to these Afghan networks for aid and training.
What she learned there informs how she regards the Pandora Papers exposé.
U.S. aid officials knew their money was disappearing, but never explored the links between Afghan ministers and governors and heads of companies that got to bid on U.S. contracts. U.S. contractors and consultants padded their budgets and proposed projects that were clearly unworkable but earned them a hefty overhead.
Afghanistan’s elites were grouped in networks of political leaders, businessmen, and criminals. “They were incredibly successful at enriching themselves,” she says, ”but were not even trying to govern.”
These corrupt webs were similar to Kremlin elites, where oligarchs close to Putin leech off the state in networks intertwined with criminals who often act as enforcers. Similar patterns apply to leaders of other failing states incriminated by the Pandora Papers.
“Afghanistan brings it all together in a profound way,” says Chayes, who recently wrote a Foreign Affairs article titled “Afghanistan’s Corruption Was Made in America.” “It was not just a foreign policy disaster. It is a mirror of our system, which is more corrupt than many of us are willing to admit.”
Chayes worries that a focus on corruption abroad “reinforces the idea that the kleptocrats are over there. It is a way of distancing.”
This takes American minds off a series of immense economic and military failures caused by networks of businessmen, contractors, deregulators, and politicians dating back to the 1980s.
Who remembers the Reagan-era deregulation that led to the collapse of the savings and loan industry? Or the George W. Bush White House kowtow to reckless bankers who brought us the financial crisis of 2008? That nearly led to the collapse of the global economy, and cost millions of Americans their homes, but never led to the conviction of a single banker.
U.S. networks, Chayes says, include officials in a Defense Department procurement system where former senior officials cycle to companies that then get big government contracts. The networks also include the richest donors in what has become a pay-to-play political system, encouraged by the Supreme Court’s 2010 Citizens United decision.
And the corruption network centered for four years in a Trump White House in which the former president actually made pay-to-play an official policy, by encouraging U.S. and foreign politicians to stay at his hotels, resorts, and golf courses while refusing to divest himself of his assets or disclose his tax returns.
So it’s fine for the Pandora Papers to open the box on foreign states and their offshore havens, but better to focus on U.S. corruption. Let’s lay bare more than one South Dakota tax haven. Let’s check out corruption networks that are endangering America’s political future, hastening environmental catastrophe, and prolonging the pandemic — before we also become a failed state.
Editor’s Note: This column has been updated to reflect that George W. Bush was president during the financial crisis, not Bill Clinton.