Washington, D.C. — A new report from the Center for American Progress urges the United States, and in particular the U.S. Department of the Treasury, to do more to combat the strategic use of corruption by authoritarian states and the private sector actors who enable it.
While strategic corruption is not a new phenomenon, it has become more widespread and sophisticated with the rise of offshore financial centers and the growing assertiveness of authoritarian leaders who embrace these unsavory tactics to project power and wield influence, the report says. And they are increasingly targeting the United States and other democracies.
The most well-documented examples of both strategic corruption and kleptocracy are the Russian government’s influence operations in Eastern European states, which revolve around patronage networks and economic relationships that produce pro-Russian political tendencies and dependence on Russia. But Russia is not alone. In China, the Chinese Communist Party’s de facto control over virtually all Chinese political and business elites has allowed it to control strategically sensitive infrastructure in Sri Lanka, Ecuador, and Malaysia.
“The United States needs to develop a strategy to prevent, identify, and sanction strategic corruption and kleptocracy so it can protect its own political system from foreign interference and help strengthen global democracy,” said Simon Clark, a senior fellow at CAP and co-author of the report. “The Treasury Department, along with other stakeholders, should adjust and restructure its approach to combating illicit finance to put greater emphasis on the use of dirty money by geopolitical adversaries.”
The report urges U.S. officials to reproduce the successful efforts that strengthened the U.S. and global response to terrorist financing. Among the recommendations, the report urges the United States to:
- Form an interagency task force and issue a new national strategy to combat the most dangerous forms of corruption.
- Restructure the Office of Terrorism and Financial Intelligence to better address a broader range of threats, including corruption.
- Increase resources to the Financial Crimes Enforcement Network.
- Strengthen the use of existing authorities, such as the Global Magnitsky Act and Section 311 of the USA PATRIOT Act.
- Pursue legislative and regulatory measures that increase the transparency of the U.S. economic system.
- Elevate corruption-related threats within the National Intelligence Priorities Framework.
- Strengthen multilateral engagement on corruption-related intelligence and economic sanctions.
Read the report: “The Treasury Department Should Lead the Fight Against Corruption and Kleptocracy” by Trevor Sutton and Simon Clark
For more information on this topic or to talk to an expert, please contact Sam Hananel at [email protected] or 202-478-6327.