Dances with Thieves
If the West is really serious about combating corruption in the rest of the
world, it can start by cleaning up its own act.
BY ANNE APPLEBAUM | JANUARY 13, 2012
It's the lawsuit of the decade, and the London newspapers have been
reporting it for months with purple prose and excitable headlines. Words
like "jet-setting" and "megalomania" get used a lot, and much of the case
hinges on verbal deals allegedly struck on large yachts. The Russian word
krysha, which literally translates as "roof" but now means something like
"protection," comes up frequently too. Abramovich says he hired Berezovsky
as his krysha in the 1990s and gave him a French château and jewelry for his
girlfriend as part of the deal. Berezovsky says there were no krysha
arrangements: Those gifts -- which he doesn't deny -- simply represented his
share of the profits of Abramovich's company at the time, then called
Sibneft, a corporate entity that extracts oil and sells it to opaque,
offshore companies in Panama, Gibraltar, and Cyprus.
The case, which is being argued by Britain's best (and most expensive)
lawyers, poses a lot of questions. How, exactly, did both men acquire the
billions of dollars they are now arguing about? What, exactly, have their
acquisitions cost Russian taxpayers in lost income, jobs, and national
wealth? And why, exactly, are they having this argument in London?
This final question has lately come to interest me a good deal. For the
answer is quite simple: These two Russian oligarchs are suing one another in
London because they live in London and because at least some of their
companies are registered there. Abramovich owns Chelsea, a British soccer
team; both men inhabit vast mansions in Belgravia and Sussex; both have
children in British schools. And neither the British legal system, nor the
British political system, cares remotely about the sources of their
extraordinary wealth. If you have money in Britain, nobody asks you where
you got it.
This, if you think about it, is very strange. Not long ago, I attended a
high-minded and well-intentioned conference, the
> World Forum on Governance. It was dedicated
to the discussion of corruption, sponsored by the Washington-based Brookings
Institution, and attended by an impressive array of anti-corruption
activists, legislators, and government officials. For two days, we sat in a
Prague hotel and earnestly discussed ways in which procurement might be made
cleaner, corrupt officials might be held accountable, and lobbying might be
made more palatable. A lot of time was also spent expressing concern about
places like Russia -- as well as Afghanistan, Kazakhstan, China, most of
South America, and large parts of Africa -- where corruption is endemic.
"We" were mostly "Westerners" -- Americans or West Europeans, that is, with
a large dose of Eastern Europeans on hand to relay their experiences too.
Yet we barely acknowledge the ways in which the Western world and its
network of offshore banks and tax shelters are
0poverty.pdf> complicit in the corrupt practices of the East and the South.
After all, we service oligarchs, tyrants, and dictators with lawyers and
financial advisors, as well as art dealers and butlers. We humor their
wives; we educate and flatter their children. Until the Libyan revolution,
Saif al-Islam al-Qaddafi, with his London School of Economics Ph.D., was a
favored playmate of British bankers and European princes. Only after the
Tunisian revolution did the French elite distance itself from Tunisian
dictator Zine el-Abidine Ben Ali's entourage, whose members owned properties
in Paris, the Alps, and the Côte d'Azur, where they liked to entertain
friendly French guests.
After the revolutions, we confiscated their cash. But why did we store it
for them in the first place?
Nor is <http://bible.cc/proverbs/29-24.htm
> Western complicity limited to
behavior at home. Last year, I heard an Afghan woman --
-restaurant-education> Sakeena Yacoobi, head of an educational NGO -- shut
up a whole room full of people in Davos who were asking about Afghan
corruption. She told them to look in the mirror: In her experience, the
really big corruption in Afghanistan came from Western contractors and
donors who had to spend too much money too fast. They overpaid for staff,
housing, and cars; they bought up local bureaucrats and paid off local
politicians. Then they complained that Afghanistan was "too corrupt" for
development. And they packed up and left.
In one sense, this is an old story. The link between aid and corruption has
been exposed many times, most brilliantly in Graham Hancock's 1989 book,
of Poverty, as well as many other works since. The role that Western banks
play in hiding Southern money has been exposed more than once as well.
Yet the Western government officials and academics who study the economics
and politics of "transition," trying to figure out how to help such
countries become richer, more peaceful, more democratic, and more
accountable -- a process this new website, Democracy Lab, is intended to
facilitate -- rarely take into account the negative influence exerted by
their own compatriots. For four years, the U.S. Agency for International
Development paid for a
program designed to develop "anti-corruption instruments" in Russia. Its
British equivalent, the Department for International Development, maintains
an online database that monitors corruption around the world, in Russia
among other places. Their efforts might be a lot more successful if they
didn't have to fight against the bad influence of the British bankers who
help Russian oligarchs hide their money or the American contractors who have
been given too much money to build roads in Afghanistan too fast.
Since 9/11, we have come to understand that kleptocratic foreigners aren't
just somebody else's problem. Corrupt governments can harbor terrorists;
they can buy and sell lethal weapons; they can pour money into criminal
enterprises -- all of which can eventually become our problem too. Why,
then, don't we talk honestly about how to stop helping them?
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Received on Fri Jan 13 2012 - 15:42:25 EST