or governments around the world, these are uncertain times. Blatantly corrupt regimes are threatened by citizen-led movements that have taken to the streets protesting against their depredations. Starting with the Arab Spring a decade ago, mass protests have risen by 11.5 percent every year. These protests are having an effect: A whopping ten percent of countries have seen corruption-fueled political transitions between 2013 and 2018. This is a source of hope for those committed to rule of law, fair competition, and effective governance.
However, political instability is not necessarily producing meaningful political reform. For instance, the soaring expectations that followed Ukraine’s 2014 Maidan revolution were soon overtaken by oligarchic realities: Within two years of the revolution, President Petro Poroshenko’s government had sidelined the most prominent anti-corruption member of parliament and undermined independent anti-corruption institutions. This outcome was not a foregone conclusion. In the wake of the Maidan, the U.S. government cobbled together increased assistance to Ukraine—supporting civil society, helping track stolen assets, backing the new National Anti-Corruption Bureau of Ukraine—thanks to a proactive embassy, senior officials in Washington who cared about anti-corruption, and the unusual geostrategic significance of Ukraine. American aid contributed to some early wins. Nonetheless, according to Daria Kaleniuk of the Ukrainian nonprofit Anticorruption Action Centre, U.S. assistance could have been deployed even more rapidly and robustly to support civil society’s anti-corruption policy agenda, which was ready a mere two months after the revolution. Perhaps doing so could have thwarted the forceful attempts—backed by Russia—to undermine anti-corruption reform and co-opt civil society.
Ukraine’s disappointing trajectory is echoed in other regions where anti-corruption opportunities were lost, to the benefit of authoritarian kleptocrats. In Malaysia, the ruling party—which held power for 60 years—was toppled in 2018 after the explosive revelations that former Prime Minister Najib Razak reportedly misappropriated over $3.5 billion from 1Malaysia Development Berhad (1MDB), an investment firm meant to benefit the Malaysian people. Popular mobilization, including by an 84-member NGO coalition known as Bersih, galvanized public outrage and surfaced wider grievances about corruption. Yet during the brief and fragile opening after the 2018 election, Malaysia’s new reformist government and donor-dependent civil society seemed to receive scant U.S. support, with the exception of a USAID program. This absence prompted senior Malaysian officials to wonder with bafflement why the United States was not more robustly engaged, especially as China seeks to consolidate its influence over Malaysia.
In Guatemala, frustration with corruption peaked in 2015, fueling the largest mass demonstrations in the country’s history. The resulting ouster of the president paved the way for the election of President Jimmy Morales—a political outsider—under the slogan “neither a thief nor corrupt.” Yet Morales’ promised support for anti-corruption never materialized. The 2015 protest movement #JusticiaYa largely went into hibernation after the political transition, while organized crime and military leaders who benefit from the corrupt status quo started to mobilize. Soon Morales was under investigation for corruption. By 2017—a mere two years after his election—Morales moved to shut down Guatemala’s renowned anti-corruption commission—CICIG—a task which he eventually accomplished with a nod from the Trump Administration.
Similar stories could be told about Nigeria, Tanzania, the Gambia. In all three cases, the window of opportunity for reform slammed shut all too quickly, leaving one to wonder whether the U.S. and others could have done more to surge support to change-agents while they had the chance.
When these countries fail to make the transition to freedom, democracy, and free markets, the American people lose out on new allies and new opportunities to invest in clean, competitive business environments. The winners are kleptocratic authoritarian regimes like Russia and China. Their brand of corrosive capitalism feeds on corruption in the states where they seek to gain influence. By buying off local politicians—whether through bribery or campaign contributions—malign actors can gain intelligence, increase dependency, and even steer procurement and policy decisions to their benefit, as seen in Ukraine, Uganda, and elsewhere. It is no surprise that the U.S. National Defense Strategy notes that “revisionist powers and rogue regimes” use corruption as a means of coercing American allies and partners. Thus, reformers in places undergoing political transition are not only racing against the clock domestically, to institute lasting change before public momentum fizzles or entrenched interests regroup. They are also racing against foreign actors who seek to undermine their sovereignty—and American interests.
To counteract the weaponization of corruption and increase the likelihood of success during historic windows of opportunity for anti-corruption reform, fledging governments often need technical assistance to help them deliver on their ambitious campaign promises, while civil society and media need support sustaining pressure for accountability. Assistance from the U.S. government can be hugely valuable during these periods, both because of the powerful signal sent by U.S. support for a new government, and because of the scale and rigor of the technical assistance that the U.S. can provide. Government assistance becomes even more powerful when, in Kaleniuk’s words, it is “attached to specific conditions,” such as the creation of Ukraine’s special anti-corruption court. This integration of assistance with targeted diplomacy, coordinated across various donors, can turbocharge reforms during a moment of governance elasticity.
Right now, the U.S. is ill-equipped to provide the kind of ambitious rapid-response support that the world needs. U.S. anti-corruption assistance clocks in at a modest $115 million annually and is mostly pre-assigned two years in advance to country accounts. That leaves U.S. diplomats with little flexibility when new reformers—such as in Armenia or South Africa—request help. In such a constrained environment, freeing up new resources poses a major bureaucratic challenge, and one only surmountable in exceptional circumstances, such as Ukraine. In many other important cases, windows of opportunity are squandered. The United States should prepare for the “known unknown” of political volatility by establishing a flexible funding stream that can deploy anti-corruption assistance, at scale, when unexpected openings emerge.
A bill pending in Congress would be a major step in this direction. The Countering Russian and Other Overseas Kleptocracy (CROOK) Act (H.R. 3843/S. 3026), which is bipartisan and budget-neutral, would create an Anti-Corruption Action Fund to surge support to priority countries who are committed to fighting corruption. This would enable the U.S. to more effectively seize rare opportunities for reform. Co-sponsor Rep. Brian Fitzpatrick (R-PA) noted, while reflecting on his time as an FBI agent combatting international corruption: “This bill is key to making sure that the right resources are available to the men and women on the frontlines of this fight.”
The Act also takes note of attempts by Russia to strategically undermine good governance in foreign countries. As Sen. Ben Cardin (D-MD) commented when introducing the bill: “Corruption has become the primary tool of authoritarian foreign policy. Reprehensible regimes steal the livelihoods of their own people and then use that dirty money to destabilize other countries.” To strengthen the U.S. anti-corruption approach overall, the CROOK Act includes establishment of an interagency coordination body and designation of points of contact at every embassy, for staff to drive forward anti-corruption efforts locally and report back to Washington. The bill enjoys the full-throated support of the U.S. Helsinki Commission, a bipartisan and bicameral body mandated to promote human rights, democracy, and the rule of law around the world.
Funding for the bill’s Anti-Corruption Action Fund would come from a $5 million surcharge on penalties over $50 million levied against violators of the Foreign Corrupt Practices Act (FCPA), resulting in about $16 million per year. This is not a huge amount, but would represent a significant expansion in the flexible resources available for anti-corruption. This money would go toward helping countries achieve their anti-corruption goals, which may include streamlining procurement systems, making law enforcement more independent, and cutting the kind of bureaucratic red tape that allows bribery to flourish—all during moments when there is a promising spike in political will. When Georgia introduced these sorts of reforms in the wake of its 2003 Rose Revolution, their ranking in the World Bank’s Ease of Doing Business index leaped from 112th place in 2005 to 16th place in 2012. Such changes improve the business climate for U.S. firms intent on competing on the basis of price and quality—not on the basis of who can pay the highest bribe. Thus the Act would use funds from those implicated in past bribery to “pay it forward” by helping prevent future bribery. As Benjamin Franklin famously said, “An ounce of prevention is worth a pound of cure.”
Several questions could be raised about this bill. One set of inquiries might focus on whether the funding mechanism could interfere with FCPA enforcement. It seems unlikely to do so given past precedents for this type of special payment being assessed on those convicted of crimes and deposited into funds for prevention of that crime. Such assessments are always applied after all other parts of the case are resolved, as would presumably be the situation here as well. Another line of critique could rest with the fact that the CROOK Act imposes an additional—albeit modest—fee on FCPA violators, which would be of concern those who assert that the FCPA is already harmful to U.S. companies. This view has been rebutted by those who point out that the largest FCPA penalties in recent years have actually been imposed on foreign firms rather than U.S. companies and, more broadly, that the FCPA gives American businesses a shield against foreign attempts to extort bribes. Congress could further strengthen this shield via the Foreign Extortion Prevention Act, which criminalizes bribe-extortion—an idea first introduced in The American Interest.
Another set of questions about the bill involve how it would actually be implemented. For example, the bill is ambiguous about whether the DOJ’s overseas capacity-building programs would be given preferential consideration when their capabilities align with assistance requirements, which could be clarified in future iterations. That said, it is important for the State Department to be in the lead on spotting political openings and ensuring the Fund’s support is well-integrated with diplomatic strategy, while building on lessons from USAID’s Office of Transition Initiatives. Others may raise concern that the Fund’s flexibility increases the risk that it could get diverted for alternative purposes. This risk is mitigated by the language of the Act, which stipulates that funds should be used specifically for anti-corruption purposes, with an eye toward countries of strategic significance to the U.S. that are experiencing a historic window for reform. The Act also includes reporting requirements so that Congress can exercise oversight of the Fund.
If the U.S. wants to counter the threat of authoritarian kleptocrats, it must compete vigorously in environments undergoing political transitions. The CROOK Act would position the U.S. government to be much more relevant in these settings, spurring anti-corruption progress that could otherwise take generations to achieve.