Elliott Broidy, the vice chairman for the 2016 Trump campaign’s joint fundraising committee with the Republican Party that raised over $108 million, is expected to plead guilty to violating foreign lobbying law, joining other prominent members of President Donald Trump’s inner circle, including, most infamously, Michael Flynn, Paul Manafort, and Rick Gates. Broidy’s indictment emerged from a multibillion-dollar case of global fraud that has garnered remarkably little public attention—but that is deeply revealing about the nature of international corruption in the Trump era.
Broidy’s fall was an unexpected consequence of the unraveling of the 1Malaysia Development Berhad (1MDB), a Malaysian state fund ostensibly set up to promote development through foreign investment but whose masterminds used it to leverage loans of $4.5 billion on the global financial markets, which they then siphoned off. Malaysian Prime Minister Najib Razak, its chairman, has been arrested, as have his close associates. Goldman Sachs, which brokered these loans and whose involvement then-Attorney General Jeff Sessions dubbed “kleptocracy at its worst,” has reached a $3.9 billion settlement with the Malaysian government, though it remains under the shadow of U.S. legal penalties. Broidy’s own relatively modest role in the scandal was a result of his alleged lobbying to influence the U.S. Justice Department’s investigation into 1MDB on behalf of Jho Low, the accused mastermind of the fraud. This included an unsuccessful attempt to arrange a golf game between Trump and Najib in 2017. (Malaysia didn’t just target Republicans. In 2014, Najib came under fire for engaging in what he called “golf diplomacy” with President Barack Obama while his country reeled from some of its worst flooding in years.)
In a week of political whiplash, with its own astonishing revelations about Trump’s taxes and his collapsing health, this story is unlikely to garner notice. But ignoring Broidy’s connections to international corruption and to Trump’s world would be repeating old mistakes.
In 2016, when 11.5 million documents from the world’s fourth largest offshore provider, Mossack Fonseca, were leaked, the web of global corruption implicated at least 140 politicians from more than 50 countries, as well as celebrities like Simon Cowell, Jackie Chan, Lionel Messi, and Amitabh Bachchan. The list was impressively inclusive, with the rich of every color, creed, and nation well represented in the tranche of documents that came to be known as the Panama Papers. Yet the ensuing fallout focused on the offshore nature of these tax havens, and politicians vowed to protect domestic interests by preventing the fugitive escape of capital from national coffers. Meanwhile, a wave of nationalist politicians tapped into an inchoate anger at a globalized world, whose promised riches had turned out to be fool’s gold for too many. A retrenchment at home, through nationalism, was cast as a ritual purification of the excesses and corruptions of globalization. Trump promised to “drain the swamp” and India’s Narendra Modi to bring home the black money stashed away abroad. The weaponization of anti-corruption by nationalist leaders was more than mere rhetoric: Jair Bolsonaro arguably came to power in Brazil through the targeted prosecution of rival left-wing politicians as part of Operation Car Wash.
Four years later, nationalist politicians have overseen the unbridled growth of corruption under their watch. Far from repatriating black money, India is currently fighting a desultory battle to extradite two businessmen—Vijay Mallya and Nirav Modi—who alone have defrauded Indian banks of nearly $3 billion under Prime Minister Modi’s watch. (More telling, the ruling Bharatiya Janata Party has grown to become the richest by far among Indian political parties, mostly funded through unidentifiable donors.) Bolsonaro has triumphantly announced the end of Operation Car Wash, “because the government has no more corruption,” despite pending criminal investigations of his immediate family and close associates for graft. The breathtakingly brazen move follows revelations of Operation Car Wash’s politically motivated prosecutions, allowing Bolsonaro to lay the groundwork to scapegoat his former ally and justice minister, Sérgio Moro, after he resisted Bolsonaro’s blatant attempts to undermine the legal system to protect his inner circle. And the revolving door between the Trump political world and prison has now become a banality.
It’s in this light that Trump’s own financial situation, as revealed through his taxes, must be read. Trump’s wealth comes not through successful entrepreneurship but by exploiting the tax and credit systems—and through access to the interconnected world of the global elite. The New York Times deemed the tax code’s provision allowing business owners to carry forward leftover losses to reduce taxes in future years “the background music to Mr. Trump’s life.” Even the few tripwires for the rich in the tax code can clearly be easily sidestepped.
Ultimately, what allowed the longevity of this shell game was endless access to global finance, facilitated by class connections rather than competence. The Trump family lives, lavishly and with all the accoutrements of celebrity, on credit. Trump’s personal debts, most of which are due in the next few years, totals at least $421 million. Despite a proven track record of mismanaging businesses, which brought him to the brink of bankruptcy before The Apprentice threw him a lifeline (ironically, by playing a successful businessman), banks have lined up to loan him nearly half a billion dollars. He secured these loans in a way that’s familiar from the international circuit of corrupt businessmen, from Mallya to Low—not through proven competence but through massaging personal connections and cultivating the mystique of celebrity.
In an article on Low published before the 1MDB scandal exploded, the Times presented a two-faced portrait of a cosmopolitan jetsetter, indiscriminately buying Jean-Michel Basquiat’s paintings and penthouses, hobnobbing with Paris Hilton and rap stars, and a shady, faintly disreputable broker who leveraged boarding school and university contacts with scions of various ruling families into a global business. Low himself explained his modus operandi as an investor as not merely about “managing their money well” but rather providing a kind of “concierge service” for the rich and powerful to facilitate their access to the lifestyle they feel entitled to. Tabloid photographs of Mallya with Bollywood stars not only cemented his reputation as the “King of Good Times”—it helped him acquire a nomination to the upper house of the Indian Parliament and eventually to secure the nearly $1 billion loan with which he absconded. The Mallyas and Lows and Trumps of the world offer as collateral little more than their celebrity to secure unlimited access to global lines of credit.
The strong-arm leaders Trump assiduously cultivates, from India’s Modi to the Philippines’s Rodrigo Duterte and Turkey’s Recep Tayyip Erdogan, all head countries that house his most lucrative overseas businesses—and they know it. Not only do these countries extract more in tax revenue from Trump than the United States itself, but their leaders have cannily used his business entanglements to diplomatic advantage. Duterte chose the businessman behind the Trump Tower in Manila as his envoy, while Erdogan’s delegations and Turkish state businesses patronize Trump establishments in the United States selectively as a reward for U.S. diplomatic compromise with Turkey.
Among those nursing a hangover from the Cold War, these entanglements provoke predictable anxiety. One genre of responses to the report on his taxes was to revive the idea of Trump as Russia’s Manchurian candidate. (Or is it China’s Rasputin?) This perspective frames the Trump presidency as a matryoshka of power, in which some foreign adversary uses Trump as a useful idiot as he himself helms his own army of useful idiots, convinced he will make America great again despite all contrary evidence. Yet this blinkered national security view misses the point.
The meticulous and prosaic reconstruction of Trump’s finances from his tax returns allowed the public to peek behind the wizard’s curtain of lies and manipulation. In that moment of clarity, what we saw was a global elite, undifferentiated by ideology or creed or nation, that mingles in country clubs and bottle-service VIP rooms, whose children attend the same boarding schools and Ivy League universities and eventually marry each other, for whom social capital is capital.
The seemingly incongruous image of Dennis Rodman sitting beside a cherubic and murderous Kim Jong Un in Pyongyang becomes far more comprehensible if seen next to images of Low carting Busta Rhymes around George Town, Malaysia, or Kanye West standing beside President-elect Trump in Trump Tower in New York. Trump’s career is ultimately a product of this interconnected and profoundly corrupt world, in which celebrity, wealth, and power are interchangeable currency and which makes a mockery of the rule of law and of democracy.
