Kleptocracy and National Security

With all eyes on the Russian invasion of Ukraine, there is another threat from the Kremlin: “weaponized kleptocracy.” It has become a key national security problem for the United States, and President Vladimir Putin’s war means our leaders are paying attention.

Confronting corruption lies at the heart of the Biden administration’s agenda for democratic renewal. The White House issued a National Security Study Memorandum on the topic in June of last year, then released a longer Strategy on Countering Corruption just before the Summit for Democracy in December. Some have compared it to George Kennan’s 1946 “Long Telegram,” which laid out his strategy for the containment of the Soviet Union. Beyond aspiration, however, the administration needs a long-term plan to push back against corruption. U.S. diplomats will be key implementers of this effort.

For analytical purposes, it can be useful to divide corruption into several forms—illegal acts versus ethically questionable ones, for instance, or petty, grand, and political. However, in the case of the transnational kleptocratic networks that the Biden administration wants to tackle, the same elites often benefit from all types. The term “kleptocracy”—rule by thieves—focuses not on individual acts but on corrupt networks that corrode institutions, the rule of law, and democracy itself. Authoritarian leaders like Putin have “weaponized” kleptocracy and exported it around the world. To confront this corruption successfully, democracies must tackle all levels of the phenomenon.

The State Department remains the lead agency in the conduct of U.S. foreign policy. The embassy apparatus includes Foreign Service Officers (FSO) from State, the U.S. Agency for International Development, the Department of Commerce, and the Foreign Agricultural Service, along with locally hired staff and civil service officers from across the federal government. All of them report to the U.S. ambassador as chief of mission, and the embassy plays a coordinating function in anti-corruption efforts.

Such efforts must look beyond officials of other governments to confront non-governmental “enablers” like lawyers, realtors, and wealth managers. The Biden administration has re-elevated the role of diplomacy overseas to make U.S. diplomats important players in this global contest.

U.S. diplomats will be a crucial part of the coming year of action against kleptocracy. Empowered American diplomats are effective implementers of U.S. national security policy. They can explain U.S. goals and policies, understand and influence host governments and their citizens, deliver programs to foreign populations, and gather and report information to Washington for further action. Since the Cold War, U.S. diplomatic training has included democracy-building; but we need an increased focus on understanding and confronting kleptocracy, since corrupt networks are at the heart of institutional rot around the world. This focus would not require additional authorization by an often gridlocked Congress. Internal State Department reforms to political reporting and programs to engage civil society groups abroad can go a long way toward bringing change.

American diplomats are woefully under-trained compared to their military counterparts. Diplomats’ training is often of the “on the job variety.” FSOs often do remarkable work with the training they do get, but they will be the first to tell you that they and their civil service counterparts need more training opportunities of longer duration. There is much that the State Department can do through the Foreign Service Institute and at embassies around the world to provide such opportunities.

Training should continue throughout a diplomat’s career. In general, it should focus on the broad contours of corruption and kleptocracy; training in specific areas can occur when a diplomat’s impending assignments make it appropriate. Training could focus on working with journalists, investigators, and civil society to confront corruption; or training in governance and development programming in order to ensure, for example, that U.S. aid funds are well spent.

Such training must not just repeat common assumptions but highlight the fact that corruption involves more than just money. It affects not just individuals but also national democratic institutions and global systems. True, money is what makes the machinery of corruption move; but its ends often reach far beyond the individuals or groups that misappropriate funds. Corruption seeps into countries’ legal and political systems, so efforts to confront it must also reach beyond the financial realm. In Tunisia beginning in 2010, for example, citizens took to the streets in large part out of a desire to live in a fair society under the rule of law. Indignant people often revolt through protests, acts of terror, or votes for nationalist or populist parties. Diplomats need to understand the connections among corruption, human motivation, and the politics of resentment to develop effective anti-corruption policies.

Outside the Wire

Anti-corruption efforts should have a programmatic dimension. To put new diplomatic training initiatives into practice in the field, Foreign Service leadership should incorporate anti-corruption efforts more explicitly into the work of embassies, many of whose employees, from multiple U.S. agencies, have roles to play abroad in confronting corruption. Therefore, anti-corruption training should be inclusive, enabling representatives from various agencies to develop a holistic picture of the larger kleptocratic networks that are in play and, thus, see possibilities for cooperation.

Two areas warrant particular focus: political reporting to Washington on corruption and anti-corruption efforts, and public diplomacy and other outreach beyond government elites to include civil society. Both require a reassessment of the risks that diplomats face, especially when working in countries with the most corrupt governments, which are particularly likely to be politically unstable or in war-torn environments where the safety of U.S. personnel weighs heavily on the calculations of State Department leadership.

With regard to political reporting, what may seem like minor bureaucratic shifts at the bottom of the diplomatic food chain can lead to a cultural change across the Foreign Service to emphasize analysis of corruption in support of a core U.S. national security interest. For example, an amendment to the State Department’s Foreign Affairs Manual and Handbook to create a “corruption and anti-corruption” “subject tag” would identify the issue as a priority for reporting cables to Washington. This change would prompt line managers at the embassy level to assign corruption as a discrete portfolio for political officers to cover, which would in turn incentivize increased reporting on the issue across the State Department. A new emphasis on the importance of corruption in diplomatic reporting to Washington would help the State Department institutionalize and standardize these efforts, while enabling coordination across the Biden administration’s wider strategic goals.

Too often in the post-9/11 world—especially since the 2011 terrorist attack that killed U.S. Ambassador Christopher Stevens and three other U.S. embassy staff in Benghazi, Libya—risk aversion has plagued the State Department and thwarted efforts to truly understand, report, and act on developments in other countries. Diplomats have tended to hunker down behind high concrete walls and speak primarily with well-protected elites surrounded by security details—often the same people, ironically, who actively participate in kleptocratic networks, benefit from grand corruption, and are invested in the systems that bolster their political power. The current risk-averse paradigm directly undermines anti-corruption efforts.

The State Department should empower its diplomats to operate “outside the wire” and engage with the anti-corruption community. As noted in a landmark 2021 study from the American Academy of Diplomacy on the risk paradigm for U.S. diplomats, the quality of information from foreign contacts—inside and outside the state apparatus—is the bedrock of effective diplomacy. Political reporting is only as accurate as the governmental and non-governmental sources on which it relies. Without a range of sources, including those outside the government who are working to combat corruption, accurate country analysis and policy formation are impossible.

Diplomats in the field need to seek broader contact with those experiencing the negative results of corruption and to implement programs in response—from training journalists and judges to initiatives encouraging clean business practices. Public diplomacy initiatives should feed into rule-of-law and anti-corruption objectives by directly engaging with civil society groups, journalists, human rights campaigners, and others focused on transparency and anti-corruption. As the American Academy noted in its report, appropriate calculations of the risks to personnel in these programs will be necessary, but concrete efforts to engage with groups beyond the embassy gates in the near term will help to overcome a culture of risk aversion over the long term. Anti-corruption would be a good place to start.

After all, operatives on the ground have specialized knowledge of how things work in their countries and how to navigate the system; that is, they have the benefit of direct experience. The State Department and the U.S. government as a whole also need to increase their financial and training support to civil society organizations, including investigative reporters and whistleblowers abroad, and do more to look out for their physical security.

Civil society organizations can only do what they have the money to do. Increased funding for those organizations taking on kleptocrats and their networks should be a priority. Likewise, many civil society organizations, local prosecutors, and investigative journalists would be able to enhance their capabilities and successes with increased training. This, too, should be a priority for U.S. embassies. Kleptocrats look for the most miniscule, or even fabricated, transgressions to use in undermining these groups. Enhanced training can help thwart such attempts.

Senior officials must also set the tone. On January 19, for example, Under Secretary of State Uzra Zeya met with civil society leaders from the Belarusian Sports Solidarity Foundation. The State Department’s readout of the meeting made reference to “Krystsina Tsimanouskaya, the Belarusian Olympian whom Belarusian authorities attempted to forcibly repatriate from the Olympic Games in Tokyo last summer after she criticized the Belarusian National Olympic Committee.” Such engagement is important, because it signals public support for those trying to promote transparency and free expression amid corrupt, oppressive systems—in this case, a dictatorial client state of the Kremlin. The next step is to translate this engagement into concrete efforts to support civil society anti-corruption groups and to train more junior officials to execute these efforts.

While visits by senior officials can set the right tone, they are only a first step and must balance multiple, often competing equities. In October of 2021, Principal Deputy National Security Advisor Jon Finer, himself a former State Department official, traveled to Equatorial Guinea, where he met President Teodoro Obiang Nguema Mbasogo, a notorious kleptocrat. Finer tried to dissuade him from allowing the Chinese government to build a maritime base on Equatorial Guinea’s coast, China’s first planned permanent presence on the Atlantic Ocean. Somewhat ironically, Finer presented Obiang with an engraved silver platter as a diplomatic gift. The visit highlighted the complicated, overlapping interests at play in U.S. efforts to counter authoritarianism, focusing on the rise of China’s global reach in particular. Officials must balance the need to square individual anti-corruption efforts with broader strategic goals. Direct outreach to the civil society and activist communities, in addition to their kleptocratic elites, can help draw the right balance. The balancing act is a delicate one, but that is no reason not to try.

While the Biden administration must also seek continued congressional action to tackle kleptocracy and corruption, the State Department and its embassies around the world can pursue and implement an enhanced approach without additional authorizations. As the investigative journalist Casey Michel describes it, “executive creativity” will go a long way. The formation of a new risk paradigm for diplomats and a greater effort to reach beyond corrupt government elites toward civil society groups are feasible steps in this year of action to bolster democracy around the world. Such steps would go a long way to demonstrate to locals that U.S. officials care for more than just those in power.

The State Department must take the lead on international anti-corruption efforts, but coordination with allies and partners is also key, as the White House outlined in its December Fact Sheet. Where State must play a smaller role is in the clearly domestic components of the issue. It is the Treasury Department, along with relevant agencies in other democracies, that must close regulatory loopholes allowing foreign kleptocrats to hide money in American banks and real estate; take tougher law enforcement actions against the enablers; and reduce the impact of dark money sloshing through the political system. Numerous investigations, not least the recent Pandora Papers, have made this clear.

Interagency training efforts and greater emphasis on diplomatic programming are nevertheless good places to start. Ingrained bureaucratic inertia and the challenges of interagency coordination pose hurdles, but the State Department and the executive branch already have authority to implement such changes. In fact, Russia’s invasion of Ukraine and the ensuing measures that the United States and other democracies took toward Moscow have given new impetus to confronting corruption. More important, as the current administration focuses on the war, State Department leadership has been bullish in talking of reform. The anti-corruption effort is primed and ready. Congressional action must follow. After all, the future of liberal democracy is at stake.

Kelly M. McFarland is a U.S. diplomatic historian and director of programs and research at the Institute for the Study of Diplomacy, Georgetown University. He worked for seven years at the Department of State. Twitter: @mcfarlandkellym. Alistair Somerville is publications editor at the Institute for the Study of Diplomacy, Georgetown University.

This publication was made possible in part by a grant from the Carnegie Corporation of New York. The statements made and views expressed are solely the responsibility of the authors.