The Anti-Corruption Revolution

by John Feffer

During rush week, aspiring frat boys endure all manner of indignities.

They all want to join the exclusive club, and they’re willing to pay the steep initiation fee of risk and embarrassment. One day, they too will be­ seniors who can haze the newbies all they like. Such are the perks of following orders, rising through the ranks, and waiting one’s turn in the hierarchy of power.

In autocracies, aspiring functionaries endure all manner of indignities. They must pay deference to the country’s leader. They must mouth all sorts of propagandistic nonsense. But they know that they, too, will eventually benefit from the system. The riches that the autocrat is extracting from the country will some day flow to these underlings as well, as a reward for their loyalty.

In democracies, corruption works in a similar way.

The opposition slams the ruling party for all the ways it uses the levers of government power to benefit its clientele. But then the opposition takes over and all that past criticism disappears. Suddenly, the former opposition discovers the perks of power. It has its own clientele to satisfy. These rules apply to both the illegal (outright bribery) and the legal (the revolving door of the “swamp”). And so the cycle continues.

Currently the world is experiencing a wave of illiberal leaders, elected democratically but ruling autocratically: Russia’s Vladimir Putin, Turkey’s Recep Tayyip Erdogan, Hungary’s Viktor Orban, the Philippines’ Rodrigo Duterte, Venezuela’s Nicolas Maduro, India’s Narendra Modi, Japan’s Shinzo Abe, and of course the United States’ Donald Trump.

They all want to hold on to power as long as possible and build political dynasties that endure when they finally age out of office. Such dynasties secure not only political legacies but economic gains as well.

Some of these illiberal leaders may flame out — like Trump, who may prove so inept and unpopular that he doesn’t even serve out his first term. But the others will try every conceivable means — constitutional changes, territorial grabs, massive crackdowns on the media — to cling to power.

Some resort to these methods even as they maintain quite high levels of popularity. Putin has an approval rating just north of 80 percent while Duterte enjoys a voter satisfaction level of 66 percent. Good luck trying to dislodge them at the polls.

But illiberal democrats all have an Achilles’ heel. The corruption that solidifies their base and provides money for their electioneering coffers is also what might bring them down. It informs the fight going on today in Venezuela. Anti-corruption activists have taken to the streets in Moscow, Bratislava, and Bucharest. Japan’s Shinzo Abe has been hobbled by successive corruption scandals.

Will an anti-corruption revolution usher out the current era of right-wing populism and herald a new stage of democratic politics?

Latin American Mess

At the bottom of the list of 176 countries on Transparency International’s Corruption Perceptions index are failed or near-failing states: Afghanistan, Libya, Yemen, Somalia. But at #166, tied with Iraq but below Haiti, Zimbabwe, and Eritrea, is Venezuela. The only other Latin American country that comes close is Nicaragua at #145.

Venezuela should be a wealthy country. As recently as 2008, it enjoyed on paper the highest GDP per capita in all of Latin America. This prosperity has been built on oil, lots of it, and Venezuela is the third largest supplier to the U.S. market. So, why is the country now facing widespread food shortages, skyrocketing inflation, and the largest peacetime contraction of an economy since World War II?

In part, it’s a function of very low oil prices. Also, foreign corporations are steering clear of investing in what by all accounts is a dysfunctional economy. And anyone who can is leaving Venezuela: For the first time Venezuelans now top the list of asylum-seekers in the United States.

But at the heart of the problem is corruption. Venezuelan leader Nicolas Maduro calls his system of governance “socialist,” and mainstream newspapers dutifully follow suit. But Venezuela is actually a corruptocracy. According to the National Assembly’s Comptroller’s Commission, corrupt officials have looted public institutions to the tune of $70 billion. That includes $11 billion from the lucrative state oil company. Other analysts suggest the figure is much higher — as much as $350 billion diverted from public coffers to private hands.

If anti-Semitism is the socialism of fools, corruption is the socialism of the greedy.

Maduro and his cronies are not just economically greedy. They apparently crave total political control as well. This week, Maduro pushed through a referendum creating a new legislative body composed of nothing but government supporters. Perhaps inspired by Trump’s inclusion of his daughter and son-in-law in the White House, Maduro tapped his wife and son for the new assembly. This super-Congress, which displaces the democratically elected legislature, can change Venezuela’s constitution and send the country in any direction Maduro likes.

Venezuela is the worst-case example of corruption in Latin America. But protesters have taken to the streets to chase one corrupt government after another around the continent. In Brazil in 2016, millions of people demonstrated in 326 cities all over the country against the government of Dilma Rousseff, which was dealing not only with an economic recession but the biggest corruption scandal the country had ever seen. The previous Brazilian president, Lula, was sentenced last month to nearly a decade in prison for similarly corrupt relations with the state oil company. And the current president, Michel Temer, stands accused of accepting $152,000 in bribes (and expecting millions more) for promising to obstruct, you guessed it, a corruption investigation.

In a spillover from the Brazilian corruption probes, all three Peruvian presidents from the last 15 years are now being investigated for graft. Odebrecht, the same Brazilian construction that bribed Brazilian officials, also ensnared Peruvian presidents Alejandro Toledo, Alan Garcia, and Ollanta Humala. It’s not inconceivable that Peru will soon have all their recent former presidents in prison.

In Guatemala, both President Otto Perez Molina and Vice President Roxana Baldetti were ousted from office in 2015 and jailed over corruption charges. Last year, investigations by the country’s attorney general Thelma Aldana revealed an even more disturbing picture of how the state had been captured:

Ms. Aldana said that at least 70 people in the country’s political and business elites have been implicated in money-laundering and bribery schemes that bankrolled Mr. Pérez Molina’s party and his cronies. Investigators are poring through more than two million seized documents as they continue to map out what Ms. Aldana described as a state that had been “co-opted” by crooks.

More disturbing still: It seems that these jailed corruptocrats still wield power over their criminal enterprises from their jail cells.

Major corruption scandals have hit the leaders of Argentina, Bolivia, Chile, Ecuador, Honduras, Panama, and Mexico. Citizens throughout the continent are beginning to make the connection between corruption and a deterioration in their own standard of living. As Simeon Tegel writes in U.S. News and World Report:

The price is awful public services, from transport and education to law enforcement and health care, as state coffers are ransacked while appointments and contracts are awarded as favors rather than on merit. Corruption also brakes economic growth and fuels poverty, most economists agree.

That in turn could pave the way for authoritarian strongmen as citizens grow frustrated with elected leaders. According to the 2016 regionwide Latinobarómetro study, just 34 percent of Latin Americans are satisfied with democracy.

In their dissatisfaction with democracy, Latin Americans might turn to authoritarian populists. But they would then be embracing an even more toxic version of corruption.

Protesting the Corruptocracy

Globally, the current role model for illiberal democrats is Vladimir Putin.

The Russian president has been in power for an astonishing 17 years. He has rebuilt the Russian economy in ways that benefit himself and his extended entourage. He has partially restored Russia’s geopolitical influence. But he wants more. He aspires to fatally weaken the liberal democratic values that threaten his governance and spark an illiberal revolution that can spread westward through such vehicles as Marine Le Pen’s National Front in France.

With his currently high approval ratings, Putin would seem to have a lock on power.

In June, however, thousands took to the streets in Moscow and other Russian cities to decry the extraordinary wealth accumulated by Putin’s corruptocrats. Opposition leader Alexei Navalny released a video detailing the wealth of Dmitri Medvedev, including yachts, a vineyard in Italy, and an 18th-century palace in St. Petersburg. At a time of economic recession, Russians are focusing their ire on Medvedev.

It may only be a matter of time before Putin, too, becomes vulnerable for the wholesale transfer of the state’s resources to his own pockets and those of his cronies. American businessman William Browder, who once made a fortune himself in Russia before running afoul of Putin, estimates that the Russian leader is the richest man on earth, with $200 billion of assets stashed all over the world.

U.S. sanctions threaten Putin’s economic empire — no wonder he’s worked so hard to get them repealed, even to the point of interfering in the U.S. election to produce a more amenable president (or at least, a sufficient degree of political chaos that renders Washington a less powerful geopolitical player).

Anti-corruption is a powerful mobilizing sentiment. It fuses anger over economic inequality, lack of political accountability, and frustration over breaches of the rule of law. It expands street protests beyond a handful of committed activists.

So, for instance, when the Romanian government announced in January that it would suspend ongoing corruption investigations and also decriminalize corrupt practices of less than $48,000, hundreds of thousands of Romanians took the streets in the largest demonstrations since the fall of Communism. They succeeded in forcing the government to reverse itself. It’s no surprise that Romanians have a low tolerance for corruption. They’d already witnessed their former prime minister, Adrian Nastase, jailed for four years for taking bribes. The Romanian protests also inspired Slovaks to do the same thing by massing in the streets and demanding the resignation of long-serving Prime Minister Robert Fico.

The populism that has produced leaders in Poland, Hungary, Slovakia, Russia, Turkey, and other parts of Eurasia is all about the clientelism. Insurgent populists rail against outsiders buying up domestic factories or controlling the financial sector (a legitimate concern) and argue that the national wealth should be in local hands (a legitimate proposal). What they don’t say is that those “local hands” are in fact their own.

It doesn’t matter whether the new populists engage in privatization or nationalization. They don’t have an economic theory. They only have an economic goal: the collective enrichment of their cadre.

Anti-corruption fights aren’t just about injecting more transparency into the existing system. They’re not just about re-establishing the rule of law. Increasingly, these struggles are about the deeply flawed nature of the current system of political economy.

The pushback against Putin, Erdogan, Abe, Maduro, and yes, even Trump, points toward a new kind of politics and a new kind of economics. Illiberal democrats imagine that they are the most advanced species in the evolution of democratic capitalism.

Anti-corruption campaigns may not only prove them wrong by sending them to jail but lead to new, revolutionary ways of organizing society to divorce, once and for all, wealth and politics.

Photo: Anti-corruption protests in Brazil (Sebástian Freire via Flickr)

John Feffer

John Feffer is the director of Foreign Policy In Focus at the Institute for Policy Studies. He is also the author, most recently, of Aftershock: A Journey into Eastern Europe's Broken Dreams (Zed Books). He is also the author of the dystopian Splinterlands trilogy (Dispatch Books). He is a former Open Society fellow, PanTech fellow, and Scoville fellow, and his articles have appeared in The New York Times, Washington Post, Los Angeles Review of Books, Salon, and many other publications.


One Comment

  1. I am amazed that John Feffer would believe the atrocious statements he lays out here. Corruption in Venezuela?The USA objected as soon as Maduro was elected and has interfered ever since, as it did with Chavez who brought the people’s needs to the forefront. The oil price drop (helped by US friends the democratic, kind Saudis)has been the main cause of the drop in living standards, but the US push of the very rich and powerful (poor things now forced to try to enter the USA!) has been the main factor in the violence.
    As for Russia, why believe an admitted crook who eventually found he was not succeeding as well, so blamed Pres. Putin with these outlandish claims of Putin sucking the country dry.
    The USA is the king of corruption (what about YOUR banksters-the Dimons etc) bailed out by the least able to afford it, the citizens who actually have to pay tax ie those who have little.?

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