The Search for Order in a World of Disorder

(14 February 2018) Editor’s note. The following essay is drawn from remarks prepared by Frank Vogl at the PDAA lunch program on Monday, 12 February 2018. Vogl is co-founder of of two leading international non-governmental organizations fighting corruption, Transparency International and The Partnership for Transparency Fund. More details about his background and the program itself are found on the program’s web page.

The worst global humanitarian crises since World War II and the shortcomings of Western foreign policy.

The world is now confronted with the most serious humanitarian crises since World War Two. The risk that conditions could become still worse is acute. Western governments need to understand their culpability and recognize that not enough was done to prevent these crises. Public policy needs – once more – to forcefully promote long-term national building, with a sharp focus on protecting human rights, anti-corruption, and establishing the rule of law. The laws, conventions, and Group of 20 pledges that address these issues need to be enforced. If international security is to be improved, then international anti-corruption actions dare no longer remain as a secondary priority for Western governments.

Introduction

Ambassador Morris, Ladies and Gentlemen, thank you for this invitation to speak on human rights, democracy, corruption and foreign policy.

I had a wonderful cousin, Zuzana Ruzickova, who lived to the age of 90 in Prague. Zuzana was one of the leading harpsichordists of the second half of the twentieth century and the only person to have recorded the complete keyboard works of Johann Sebastian Bach. When once asked why young people all over the world came to her concerts and listened to Bach, she said: “Bach provides them with a sense of order, in a world of disorder.”

Zuzana knew about disorder. She spent her teenage years in Terezin, Auschwitz and Bergen-Belsen concentration camps. She returned to Czechoslovakia and she refused to join the Communist Party and was harassed over four decades as a result.¹

From the ashes of World War Two, and the strident spread of Communism, the United States sought to create order in a world of disorder. It pledged to promote freedom and democracy and human rights as the means to provide hope and opportunity to all peoples. The U.S. led brilliantly, from the forging of the United Nations, to the implementation of the Marshall Plan. Many of you in this room today have been on the front lines in the ongoing endeavor to make this a peaceful and prosperous world.

The American effort to promote human rights and democracy has been a constant inspiration for others.

The European Union has made this is a central pillar in reviewing potential new members, including Turkey and those from the Balkans. I agree with a British friend who wrote to me about today’s theme, and I quote: “I am immensely grateful for the role that the U.S. has played and largely continues to in championing basic human freedoms and a rules-based international order. The world should not take that for granted.”

The track record, even in recent years, has many highlights: from President Obama’s anti-corruption demands when confronting President Kenyatta in Kenya and President Karzai in Afghanistan; to Vice President Biden’s blunt anti-corruption speech to the parliament in Kiev, Ukraine; to the landmark Global Magnitzky Act; to the bold support for civil society and humanitarian causes that were so frequently a feature of the speeches of Hillary Clinton and John Kerry when they headed the Department of State. More broadly, over the last 25 years, Western foreign policy leadership has provided consistent and important financial support to many humanitarian, pro-democracy and anti-corruption civil society organizations, which in turn have made substantial contributions, and continue to do so.

As former senior foreign policy officials, you know how difficult the challenge is to promote vital values in a world so starkly driven by short-term realpolitik. You have all watched the unfolding of President Trump’s approaches and those of Secretary of State Tillerson and how these reject the humanitarian pillars that are critical to what I believe must be a civilized 21st century foreign policy.

Today’s Humanitarian Crises

However, we cannot blame the Trump Administration for the humanitarian crises that now abound:

• According to CARE, that: “An unprecedented 81 million people are in need of emergency assistance food assistance,” and that the United Nations has declared the world hunger emergency the gravest since World War Two.”
• According to the World Food Program: “Some 20 million face catastrophe in Sudan, South Sudan, Nigeria and Yemen…in South Sudan alone one million children are estimated to be acutely malnourished.”
• According to UNHCR: “We are now witnessing the highest levels of human displacement on record. An unprecedented 65.6 million people around the world have been forced from home. Among them are nearly 22.5 million refugees, over half of whom are under the age of 18. There are also 10 million stateless people who have been denied a nationality and access to basic rights such as education, healthcare, employment and freedom of movement.”
• According to Human Rights First, quoting data from the International Labor Organization and Walk Free Foundation that: “An estimated 24.9 million victims are trapped in modern-day slavery. Of these, 16 million (64{2a6033f7eac5eade65ac45c5dc15245d782bf621d43785c1e0a25870ae642a3b}) were exploited for labor, 4.8 million (19{2a6033f7eac5eade65ac45c5dc15245d782bf621d43785c1e0a25870ae642a3b}) were sexually exploited, and 4.1 million (17{2a6033f7eac5eade65ac45c5dc15245d782bf621d43785c1e0a25870ae642a3b}) were exploited in state-imposed forced labor.”

And, there is little evidence that the financial proceeds of global grand corruption today are any less than they were a decade ago. The International Monetary Fund has suggested that corruption diminishes global GDP by between 1.5{2a6033f7eac5eade65ac45c5dc15245d782bf621d43785c1e0a25870ae642a3b} and 2.0{2a6033f7eac5eade65ac45c5dc15245d782bf621d43785c1e0a25870ae642a3b} each year. Corruption is the abuse of public office for private gain. In this context, we are now seeing an increasing relationship between kleptocratic national regimes and international organized crime – often related to narcotics, illicit arms sales, the sales of counterfeit fertilizers and medicines, the ivory trade and human trafficking.

What we have learned is that in countries with high levels of violence, extensive human rights abuse, and authoritarian curbs on freedom – in all those countries the fact is that grand corruption – involving largescale theft of public resources by senior politicians and public officials – is always present. Often, it is the greed of those in power that is the prime cause of the humanitarian misery.

If you compare data on corruption, for example, from Transparency International, on violence form the Global Peace Index, and on human rights from Freedom House, you find the same countries consistently appearing at the foot of the lists. Some of these countries are failed states. Others are propped up, like Afghanistan and Iraq, by enormous foreign assistance inflows. Others are brutal dictatorships whose leaders amass vast fortunes from the sale of oil, gas and minerals in their countries.

Avoidable Man-Made Crises.

In sharp contrast to the 1950s, for example – an era where before the “Green Revolution” we saw vast hunger in some of the world’s poorest nations – most of the humanitarian crises that are now at record levels are man-made.

We have the science and the knowledge to prevent hunger. We have the skills to contain many health epidemics. The genocidal ethnic cleansing in Myanmar is man-made. The grand corruption combined with great violence in Congo, Somalia, South Sudan, for example, is perpetrated by powerful leaders with not an ounce of humanitarian concern in their bodies. The demise of Venezuela and the increasing human misery in this oil-rich country that is our neighbor, highlights the pervasiveness now of anti-democratic, powerhungry, corrupt national leadership.

Just a few days ago, a private American company, successfully launched a powerful rocket into space. The entrepreneur behind this venture, Elon Musk, sees a time when people will use private transport to shuttle between earth and Mars. Our technological ingenuity today is amazing – it stands in dramatic contrast to our ability to resolve mounting humanitarian tragedies across our own planet.

Is the West Blameless?

Are Western policy-makers and foreign policy experts blameless for the developments that I have described? Finding the right balance in apportioning blame is important.

The humanitarian and corruption crises today in many parts of the world have their origins in developments that have taken many years to build. To a degree, I blame the Obama, Bush and Clinton administrations for not having done still more to avoid and counter situations that are now so critical in so many countries.

To a degree I blame the U.S. Department of State and the U.S. foreign policy establishment, here and in Western Europe and in Japan, for the disorder that we see across so much of the globe and that is expressed in human rights abuse grand corruption, and in the breakdown of the rule of law.

These are unfashionable statements, but progress can only be secured if we are honest about the record. We have been exceptionally unwilling to recognize that, simply stated, we have not done enough to prevent the humanitarian crises that abound, and that we are not doing sufficient to prevent conditions becoming still worse.

In placing blame, I am not asserting willful neglect. Of course, the kleptocrats and the dictators are most responsible for the human rights crises in their own countries. Of course, the leaders of sovereign nations are the first who we should – who we must – hold to account.

But, Western foreign policy establishments have repeatedly underestimated the power of rising corruption to create increasing insecurity. Too rarely, have our leading statesmen and diplomats spoken truth to power on this central issue in a manner that has been effective. Words have too rarely been followed by actions. Our aid has been the carrot for strategic partnership, our stick should have been the curtailment of such aid.

Time and time again, we have engaged deeply in the name of strategic security with regimes – from Egypt to Pakistan – whose national leaders have put their personal interests, and the accumulation of personal wealth, above the welfare of their nations. We have provided these countries with staggering sums of economic and military aid and seen it stolen – and we have turned a blind eye to the thefts of our money.

Setting the Priorities

There has too often been a mentality that says – we’ll deal with security today and then we will get around to corruption. The urgent “action” e-mails rush into the offices of commanders of our troops, to intelligence officers, to State Department officials and they just shunt aside the vital focus on building rule of law and moving forward with anti-corruption.

I understand the pressures. On Saturday, I had lunch with a wonderful young man who is a private in the U.S. army and who has just returned from Kabul, from his first deployment during which he was awarded a purple heart for his valor. He had come to admire the Afghans and to empathize with their acute problems. He remarked that perhaps in 20 years, when he is 45, peace will be restored to Afghanistan.

Today, the Washington Post ran a bold headline above a long report stating that Afghans feel abandoned by their leaders and desperate in an environment of intense violence and widespread corruption. We have been engaged in that country for 17 years and expended approximately $120 billion in reconstruction funds.

And yet, our government refuses today to talk about nation building for this war-riven country. The argument for placing strategic and military priorities first may have been more compelling during the Cold War, but that ended 28 years ago. We have no excuse today to doing far, far more to support nation building, the establishment of rule of law, and the securing of human rights – the crucial goals that alone can give people hope and, in time, enhance international security.

We have not been ignorant. The last two decades have seen extraordinary efforts to enhance public awareness of corruption and human rights abuse. The scale of research in virtually every facet of the issues we are discussing has also been exceptional. It is not ignorance that can be blamed for the underwhelming Western efforts to counter sufficiently the widespread abuses of human rights and corruption in so many nations that have received aid and loans from the United States and from the multilateral institutions.

Rarely, if ever before, have civil society organizations dedicated to protecting human rights and anti-corruption and freedom been under such grave attack in so many countries as they are today – yet, the international community’s protests have been largely muted and ineffective. In Egypt and in Turkey, for example, which are meant to be close allies of the U.S., we are seeing the decimation of independent journalism and the shutting down of all civil society organizations that do not support the regimes.²

For reasons of intelligence sharing and strategic security priorities we are not pushing these regimes hard enough on their domestic abuses of basic freedoms – in time we will find that this was a mistake and our virtual silence has encouraged authoritarianism that will jeopardize all of our objectives. Senior officials in Washington and Western ambassadors abroad have not been sufficiently willing to confront foreign governments who receive our military and economic aid over the issue of graft, and the world has become a more dangerous place as a result.

Afflicting the Comfortable

Too often we have turned to our comfort zones, more analysis, more research, more reports, more conferences. Of course, this is important.

But it is urgent that the comfort zones be rattled. The unfolding humanitarian crises across the world, the rising authoritarianism in many countries, and the extraordinary scale of grand corruption, says these are not normal times. Surely, now is the time when we ‘need to afflict the comfortable and comfort the afflicted’.³

Today, we are assigning the highest priority at the Pentagon to forging strategies to challenge international terrorism, yet we are doing too little to address the fundamental issues of broken justice systems, inadequate public education systems, cronyism and corruption in so many countries where, as a result, desperate young people turn to ISIS and others. And our inadequate prioritization on such matters, as indicated already, stretches back across several U.S. administrations. Making matters even worse is that the Trump Administration is determined to continue cutting U.S. foreign assistance spending.

The United Nations General Assembly approved in 2005 the U. N. Convention against Corruption, which has been signed by 140 countries. The U.N. says that it is the “only legally binding universal anti-corruption instrument,” but it is poorly monitored and mostly ignored by the countries that signed it. The OECD approved an anti-bribery convention 20 years ago and 43 countries have ratified it. Very few of these countries have implemented its provisions.

The Dodd-Frank financial reform act in this country, following the financial crisis of 2007/08, included provisions to require oil, gas and mining companies to publicly disclose their payments to foreign governments. The first act of the new Congress in January 2017, supported by President Trump and former Exxon chief Tillerson, was to scrap those provisions. The U.S. later withdrew from the Extractive Industries Transparency Initiative – EITI.

Corruption in the extractives industries is massive – and the U.S. Government has explicitly in the last year abandoned and/or revised measures that have sought to curb such corruption under pressure from the members of the American Petroleum Institute.

In the recent paperback edition of my book “Waging War on Corruption” I emphasize that after 25 years of global campaigning the critical word for activists today is enforcement. If the conventions were enforced the world would be a radically better place. If the pledges and fine words of statesmen were acted upon when it comes to human rights and anti-corruption then hundreds of millions of people would no longer be living in absolute poverty. Indeed, everyone would have an opportunity to live a life of dignity.

Dirty Money

Meanwhile, the scale of illicit financial flows across the world is upwards of one trillion U.S. dollars per year, including the proceeds of grand corruption and organized crime. Probably one-half of the total, or even more, finds its ways into U.S. investments – here it is safe, it can yield a rate of return, and as we have learned from the Panama Papers and the Paradise Papers the true beneficial ownership of these investments can be legally hidden.

We have failed to adequately appreciate that the rising scale of money laundering and illicit financial flows is first and foremost a matter of national security. It undermines the international financial architecture that is designed to further stability and prosperity. It creates a shadow financial system that finances illicit arms traffic and terrorism.

We have hundreds of lawyers, accountants and consultants in New York and elsewhere who are making large fees from clients whose cash is dirty. They are the enablers of global money laundering. They represent politically powerful interests and seek to preserve the legal space that allows them to ply their unethical trade. And yes, our economy as the repository of so much money, is benefiting handsomely from the corruption.

Bi-partisan efforts are now underway in both houses of the U.S. Congress to end holding company secrecy and disclose the real beneficial ownership of such firms. The FACT Coalition, and partner organizations, are doing remarkable work to forge bi-partisan support for what reasonable people would surely agree are solid proposals for long-overdue reforms. However, the U.S. Chamber of Commerce opposes action. In testimony before the Senate Judiciary Committee last week, the Chamber’s spokesman said:

“While these proposals may be well-intentioned, they are poorly designed and fundamentally flawed. Their overly broad and vague definitions, unworkable requirements, and severe penalties would do far more to impede law abiding small and medium-sized business than to hamper the use of so-called “shell companies” to facilitate illicit activity.”

Do small businesses need to have Cayman Island secretive holding companies? Of course not. But the U.S. Chamber represents powerful financial and political interests that benefit from the status quo, irrespective of ethics and the national interest.

Our Department of Justice, despite constant resource limitations, has done a tremendous job in investigating multinational bribe-paying corporations under the Foreign Corrupt Practices Act. It has created more compliance among big corporations. Together with banking authorities, the vast malfeasance and wrong-doing, including money laundering, by major global banks over the last decade has been uncovered and around $340 billion in fines has been paid.

But, not a single corporate chairman, nor banking CEO at these mega-enterprises has been prosecuted, let alone been found guilty. The vast fines have been paid as if the settlements are merely a cost of doing business. Top corporate executive impunity runs free here in the United States – and in Western Europe as well.

The U.S. Justice Department and the FBI have gone after the kleptocrats with a major investigation underway, for example, into over $4 billion of missing Malaysian development funds – at least $1 billion has been found in the U.S. and another $600 million rests in the private bank account of Malaysia’s Prime Minister Najib Razak.

However, this did not stop President Trump rolling out the red carpet for a visit some months ago by PM Najib Razak, nor did it discourage the PM from holding an extravagant party at the Trump Hotel, located next door to the Justice Department.

While U.S. Justice seeks to investigate and prosecute bribe-paying firms, nothing is done about the foreign government officials who take the bribes. There is no international legal institution to bring them to justice. A proposal by U.S. Justice Mark Wolf for a global anti-corruption court has, so far, failed to gain traction despite the reality that the kleptocrats from Russia to Malaysia and to many more countries almost always have control of their national judicial systems so that, in fact, they enjoy impunity. And the U.S. and, indeed the Western, foreign policy establishment stands largely silent on this issue.

Corruption at the Core

Ladies and gentlemen, our world will be become less secure unless we do far more to counter corruption. So long as multinational corporations bribe foreign governments, we in the West have an explicit culpability.

So long as upwards of one trillion dollars a year is laundered across the globe, we have an explicit culpability.

And so long as we continue at the highest foreign policy, intelligence and defense levels to see corruption as an important, but secondary concern, so long must we shoulder some of the blame for the fact that global misery will increase, the threats to democracy will mount and the intense dangers to international security will multiply.

Late this year we will recognize the 70th anniversary of the signing of the United Nations Declaration of Human Rights. It represents an aspirational common standard to ensure that the fundamental human rights of all individuals are protected. Since then, the scale of global poverty has been massively reduced and vast numbers of people no longer face diseases that were once commonplace.

As I have noted earlier, the dedication and skill of thousands of individuals who have worked to achieve these results, in government and non-governmental agencies alike, has been extraordinary – often, we fail to adequately acknowledge their achievements.

Permit me to add – especially right now on the 25th anniversary of the establishment of Transparency International, that our organization has enjoyed wonderful financial support from many official aid agencies and foundations, for which we are most appreciative. Unquestionably, the challenges that TI has sought to confront through 100 national chapters across the world, have been recognized by the Western foreign policy establishments that are my focus in this presentation today.

But, despite the accomplishments, we dare not use the 70th birthday of the signing of the Declaration for Human Rights to celebrate. Instead, we need to find a way to reflect upon our shortcomings and to consider the hundreds of millions of people who live in horrendous man-made conditions under authoritarian regimes.

We dare not overlook the plight of the Rohingya in Bangladeshi camps, the Syrians in camps in Jordan, the thousands of people from sub-Saharan Africa who take staggering personal risks to try and find refuge in Western Europe, or the desperate Central Americans who seek to flee to the United States.

This is not an ordinary time. The scale of the crises is vast and we must acknowledge that we have not done enough to prevent this, nor are we now doing enough to ensure that conditions do not get even worse. We have not enforced all the public pledges and laws sufficiently – we have partly set the wrong priorities and we must now acknowledge this and press for change.

The U.S. is the super power and it is time that we moved far more stridently, demanding enforcement of human rights and anti-corruption conventions and laws and major public Group of 20 pledges, to reverse the dire course upon which much of the world is set. So far, unlike the music of Johann Sebastian Bach, order has not been secured in a world of disorder.

Thank you.

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1. Frank Vogl is an executive producer of the 2017 documentary film about the life and music of Zuzana Ruzickova – Zuzana: Music Is Life.
2. On February 12, 2018, U.S. Secretary of State Rex Tillerson held meetings in Cairo with President Sisi and other leaders. The New York Times ran the following headline on the event: Visiting Cairo on MidEast Tour, Tillerson Is Silent on Egypt’s Wave of Repression.”
3. This is Joseph Pulitzer’s dictum to journalists.

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