Op-ed
Fight Corruption! – Op-ed by Ischinger for Handelsblatt
In an opinion piece for Handelsblatt, Wolfgang Ischinger, Chairman of the Munich Security Conference, argues that autocracies are on the rise and are using corruption and kleptocracy as tools to further their agenda. The transatlantic alliance must confront kleptocratic regimes more resolutely to prevent any further corrosion of democracy.
Read the full op-ed:
Fight Corruption!
Europe has a friend in the Oval Office again - the relief is almost physically palpable on this side of the Atlantic. In recent years, it sometimes looked as if the White House no longer housed a trustworthy partner. Indeed, President Donald Trump often gave the impression of putting private and business interests above everything else, for example during the Ukraine affair. The resulting loss of trust in the transatlantic relationship is just now being rebuilt by the new U.S. President Joe Biden. Corruption and its political twin, kleptocracy, have long constituted a strategic challenge for both the U.S. and Europe.
Biden sees corruption as one of the key threats to U.S. national security. According to a Biden strategy document, corruption "rots democracy from the inside and is increasingly weaponized by authoritarian states to undermine democratic institutions". This is not just a problem in the U.S., but around the world, and is not just about personal enrichment. Rather, the systemic conflict of the 21st century lies between democratic and autocratic forces - currently, autocrats are on the rise, corruption being one of their most important tools, both at home and abroad. Germany is currently experiencing this in the so called “Azerbaijan affair”, where German politicians were supposedly bribed by Baku.
In Bosnia-Herzegovina, for example, kleptocratic elites are disintegrating the state right on Europe's doorstep. This is one of the reasons why, 25 years after the end of the war, the country is still far from political stability. The problem is also growing within the EU. Most recently, Hungary and Poland threatened to block the adoption of the EU budget out of fear of the new EU rule of law mechanism - jeopardizing the ability of EU members to act and provide financial support during the devastating Corona pandemic. In Germany, too, trust in democracy suffers when members of parliament get paid to broker deals for vital protective masks.
Russian anti-corruption activist Alexei Navalny rightly warned that Moscow would not “treat European sanctions seriously" as long as the yachts of Russian oligarchs who have become rich through Putin's authoritarian rule lay in European ports.
Indeed, Europe and the United States often make it far too easy for autocrats. On both sides of the Atlantic, there are numerous loopholes through which money of dubious origin is fed into our economy and politics. For a long time, the U.S. was a paradise for companies run by puppets. In some cases, one had to disclose more information about oneself to apply for a library card than to start a business. With such companies, unlawfully acquired money can be laundered and it also serves to exert political influence, for example through campaign contributions.
Conversely, this means that a determined fight against corruption can be an instrument of transatlantic partnership. The U.S. in particular has enormous influence as a key financial center. Hong Kong's head of government, Carrie Lam, is now feeling the effects of this: Since the U.S. imposed sanctions on her because of the Hong Kong "Security Act," she has been receiving her salary in cash - no bank wants to give her another account and thus antagonize the U.S. government. Such extraterritorial sanctions may be viewed critically in principle, but they are a powerful example of how the U.S. can exert its influence.
In the United States, there is currently bipartisan consensus to fight corruption and kleptocracy. In December, even before Biden took office, the U.S. Senate decided to put a stop to companies run by fake frontmen. In the future, a transparency register will record who owns a company. Other bills are on the way, such as the CROOK Act, which among other things is to create an anti-corruption fund to finance measures against kleptocracy worldwide. There have also been reforms in the EU in recent years. For example, a transparency register has long been mandatory for all member states. However, there is a huge problem with the enforcement of transparency regulations. Many European transparency registers are not publicly accessible or are poorly implemented.
Fighting corruption is in the EU's own interest: It could significantly increase the Union's ability to act both internally and externally. The EU should therefore not wait for demands from Washington, but finally show initiative itself. This applies above all to Germany, which is lagging behind in the fight against money laundering.
Germany could, for example, discuss how this can be changed in the Financial Action Task Force, which was founded in 1989 and primarily sets standards for combating money laundering and terrorist financing. Germany still holds the presidency of this body until the middle of next year. But the next Munich Security Conference could also provide a suitable forum for discussion - if only because the topic of fighting corruption has long been on the agenda at the annual meeting in Munich.
In addition to greater efforts in the United States and the European Union, however, the transatlantic partners should also involve other states. After all, corruption is, sometimes to a greater or lesser extent, a global problem. The current year could provide an opportunity for a diplomatic tour de force. For example, a special session of the UN General Assembly on corruption is on the political agenda at the beginning of June. The special session should provide impetus for joint initiatives to tackle corruption and kleptocracy, for example for mandatory global public transparency registers. In the same month, the G7 summit in the United Kingdom will provide an opportunity to bring the United Kingdom on board. Last but not least, President Biden is planning a "Summit for Democracy" during his first year in office, where the fight against corruption will be a central theme.
Biden is right: Corruption corrodes democracy, and dictatorships and autocracies know how to use this to their advantage. The transatlantic partners can and must stand together against this. It is time for Europe to show that it has understood this - and to offer itself to Washington as a "partner in leadership”.
