U.S President Joe Biden announced a sweeping new push to make anti-corruption efforts a core national security priority on Thursday, a move that could have significant knock-on effects for global efforts to clamp down kleptocracy.
A new national security memorandum directs government agencies to review ways to modernize and better resource efforts to hold corrupt actors accountable, tackle illicit finance, and work with international partners to counter strategic corruption by authoritarian regimes. The move comes amid growing recognition in Washington of corruption’s national security risk and is the administration’s first major action to make good on Biden’s campaign promise to put the world’s kleptocrats on notice.
“The United States will lead by example and in partnership with allies, civil society, and the private sector to fight the scourge of corruption,” Biden said in a statement on Thursday. “But this is a mission for the entire world. And we must all stand in support of courageous citizens around the globe who are demanding honest, transparent governance.”
Revelations in recent years about how corruption plays an integral role in everything from propping up authoritarian regimes to election interference while destabilizing countries whose coffers are plundered have helped drive home the national security imperative to close loopholes in the global financial system. In an era of fractious partisanship, counter-kleptocracy efforts are a rare point of consensus that has brought together a broad coalition of actors from Dow Chemical Company to Greenpeace.
“People have been arguing for a long time that corruption is a national security threat and linking the two officially is a significant step forward,” said Gary Kalman, director of the U.S. office for Transparency International.
Thursday’s announcement by the administration comes as a bipartisan group of lawmakers is set to launch a new counter-kleptocracy caucus on Capitol Hill next week.
“Now we have the two arms of the U.S. government that deal with this issue marching in step,” said Nate Sibley, a research fellow with the Kleptocracy Initiative at the Hudson Institute, a think tank.
The mammoth 2021 defense spending bill passed late last year included a slate of measures intended to clamp down on corruption, including legislation that effectively bans the use of shell companies, a commonly used tool by nefarious actors, such as drug kingpins and terror groups, to hide and move money.
A senior official speaking on condition of anonymity said the administration was looking to make “significant, systemic changes” to regulatory structures to combat illicit finances. As the holder of the world’s global reserve currency, tightening U.S. anti-corruption measures will have far-reaching ramifications. With the dollar accounting for half of the world’s cross-border financial flows, Washington has significant latitude to pursue corrupt actors and increase transparency in the international financial system.
“You’re talking both about the bully pulpit to encourage other nations to do it, but also when we tighten our own financial infrastructure, that’s going to have global impact,” Kalman said.
U.S. allies and international institutions have already signaled their own desire to devote increased international attention to combating corruption. The United Nations General Assembly is holding its first ever special session on anti-corruption this week while on Wednesday, G-7 ministers from some of the world’s largest economies released a statement ahead of the U.K. summit next week, vowing to tackle illicit finance and foreign bribery and to support civil society actors who help expose crooks.
As vice president, Biden spearheaded the Obama administration’s anti-corruption efforts, and ahead of his inauguration, both Biden and his top foreign-policy aides spoke about making it a priority of his administration. In an interview with Politico, National Security Advisor Jake Sullivan said one of his top goals was to “rally our allies to combat corruption and kleptocracy and to hold systems of authoritarian capitalism accountable for greater transparency and participation in a rules-based system.”
Transparency advocates were encouraged by the administration’s actions. “I hope that we’ll look back at this week as a turning point in America’s fight against corruption and kleptocracy,” Sibley said, who noted the real test of the administration’s mettle would come during implementation. “I hope this administration has the guts to go that distance and take those difficult, confrontational decisions [toward] problematic regimes.”
So far, signs suggest they do. On Wednesday, the U.S. Treasury Department announced it was imposing sanctions on three Bulgarians and a network of 64 companies connected to them for their “extensive roles” in corruption in Bulgaria, which was part of the largest rollout of sanctions under the Global Magnitsky Act in a single day. Passed by Congress in 2016, the act gives the government broad powers to sanction human rights abusers and people involved in significant corruption.
The memorandum released on Thursday gives federal agencies 200 days to report back on ways their respective agencies can further anti-corruption agendas. This approach “indigenizes it to each of the agency’s missions” and gives them a sense of ownership, said Abigail Bellows, a nonresident scholar at the Carnegie Endowment for International Peace, who spent five years working in government.
Announcing the review publicly at the start may also help keep it accountable. “By announcing at the front end that they’re going to be doing this, it allows for external consultation. It allows for external pressure. It raises expectations. All of those things can increase the ambition of agencies and also hopefully enable partnership with civil society where appropriate,” Bellows said.
