Foreign Affairs

by Casey Michel, Trevor Sutton and Matthew Duss

    In the half century after the Watergate scandal exposed the degree to which graft and bribery had tainted Washington and warped U.S. foreign policy, preventing corruption at home and combating it overseas became a signal mission for federal law enforcement and American diplomacy. Over the decades, commitment to those goals waxed and waned, and numerous scandals demonstrated that the U.S. political system and important American institutions and corporations remained vulnerable to and complicit in corruption. But thanks to a set of powerful laws and regulations and generations of professionals dedicated to supporting transparency and a level playing field, the United States made tremendous strides in fighting corruption.

    In the past six months, that progress has been almost completely undone. Since returning to office, President Donald Trump has blunted Washington’s most effective anticorruption tool, the Foreign Corrupt Practices Act (FCPA), which he described as a “horror show for America”; dissolved task forces to combat kleptocracy; and declared that his administration would not enforce laws designed to prevent wealthy people and companies from hiding their assets in offshore accounts. In one particularly shocking act, as part of a clear quid pro quo, the mayor of New York City, Eric Adams, promised to cooperate with Trump’s crackdown on immigrants; in exchange, Trump’s Department of Justice moved to dismiss federal charges against Adams, who had allegedly turned to foreign sources to illegally fund his reelection campaign. This open embrace of corruption has not stopped at the water’s edge: the Trump administration recently condemned the bribery conviction of a former Colombian president, Álvaro Uribe, calling it the work of “radical judges.”

    And then there’s the orgy of self-dealing through which Trump has transformed the White House into a profit platform for himself and his family. Since Trump was inaugurated in January, the company run by his son Eric, the Trump Organization, has struck many new deals with kleptocratic regimes abroad, including Saudi Arabia, the United Arab Emirates, and Vietnam, opening a direct line between these regimes and the American president’s wallet. Meanwhile, Trump has become deeply involved in the shady world of cryptocurrency, with foreign funders directly bankrolling Trump’s “meme coin” for the chance to gain access to the president. As Richard Briffault, an expert on government ethics, told The Guardian, “People are paying to meet Trump and he’s the regulator in chief. It’s doubly corrupt. This is unprecedented. I don’t think there’s been anything like this in American history.” And of course there is the $400 million jet that the government of Qatar “gifted” to Trump to use as a new Air Force One—and perhaps to take with him when he leaves office.

    The damage Trump has already done is staggering, and he has more than three years to go even further. But his tolerance for and embrace of the crudest kinds of corruption also create an opportunity for his opponents. The United States may have given up its leading role in the fight against corruption, but Americans still care about it. An October 2022 New York Times/Siena poll of registered voters found that “when respondents were asked to volunteer one or two words to summarize the current threat to democracy, government corruption was brought up most often.” As the Pew researchers who conducted polling on the subject found in 2023, “The belief that there is too much money in politics is widespread. References to the influence of money and concerns about corruption are some of the most frequently cited critiques of the political system, and many Americans see monetary gain as a reason why most elected officials seek office to begin with.”

    Few candidates for high-level offices have seized on anticorruption as a campaign platform. (An ironic exception is Trump himself, who managed, in three successive campaigns, to cynically persuade many Americans that he is not an avatar of corruption but a crusader against it.) But earlier this year, the leading mayoral candidate in New York City, Zohran Mamdani, won an upset victory in the Democratic primary in part by criticizing both Adams and another candidate, Andrew Cuomo, for representing “the same donors, the same corruption, the same small vision funded by big money.” And anticorruption messages have proved effective in a number of recent issue-based political campaigns around the country. In 2022, a ballot initiative successfully took on the role of “dark money” in elections in Oakland, California, by lowering donation limits and increasing donor transparency rules. Campaigns to establish ranked-choice voting in Evanston, Illinois; Fort Collins, Colorado; and other cities have relied on anticorruption messages in taking on entrenched interests who benefit from traditional balloting.

    In seizing on corruption, Democrats and progressives can’t limit themselves to criticizing Trump’s personal venality. Rather, they should connect it to the broader global phenomenon of corruption and argue that Trump is subverting American interests by working in parallel with oligarchs, kleptocrats, and criminals who are eroding democracy all over the world and making the United States less safe and prosperous. Anticorruption efforts should become the main pillar of progressive and Democratic politics not only at home but also in foreign policy.

    The idea of values-based U.S. foreign policy may strike some as an anachronism. After all, the Biden administration cast itself as a defender of democratic values that would “lead not merely by the example of our power but by the power of our example,” as President Joe Biden put it in his inaugural address. In practice, however, such lofty rhetoric was married to a nostalgic attachment to American primacy that led to a foreign policy plagued by hypocrisy and incoherence.

    Biden’s failure to match rhetoric with action does not mean that future U.S. officials should stop trying to align foreign policy with the broader project of restoring faith in democratic governance and confronting the increasingly oligarchic character of U.S. politics and society. Sticking the landing on the next iteration of a foreign policy that honors both interests and values will hinge on a pragmatic and clear-eyed assessment of what matters to American voters and what the United States can plausibly hope to achieve in its global engagement. In this respect, there is one issue that uniquely bridges the domestic and foreign policy realms and offers a clear path to rebuilding goodwill with Washington’s foreign partners: the fight against corruption.

• WHAT WATERGATE WROUGHT

    To understand why anticorruption is the future of U.S. foreign policy, it’s helpful to look to the past. For much of American history, corruption was not seen as a major foreign policy issue. That changed after the Watergate scandal. In addition to unearthing wrongdoing on the part of the president, law enforcement, and intelligence agencies, the congressional investigations that took place after Watergate also revealed just how deeply entwined American corporations were with corrupt foreign networks abroad. As investigators discovered, many of the most prominent U.S. companies were routinely engaging in high-level bribery around the world, entrenching kleptocratic regimes in the process. The sheer scale of the revelations went far beyond anything American officials ever imagined; as one investigator put it, “None of us dreamed that there were the millions, the tens of millions, the hundreds of millions [in bribes], that we found.”

    The fallout was swift. Anti-American protests erupted around the world, centered on how Washington had propped up corrupt regimes and officials. In Honduras, the country’s pro-American autocracy quickly disintegrated when it became clear that the head of the United Fruit Company had bribed the Honduran president to make it easier for the firm to ship bananas. The revelations cemented a generation of anti-American animus in the country. In Italy, companies such as Lockheed had bribed multiple officials in exchange for favorable terms in military aircraft sales. When the details spilled out, the clearest beneficiaries were Italy’s communists, who could point to their capitalist opponents as little more than bought-off American puppets. As Frank Church, the Democratic senator from Idaho who presided over the congressional hearings, put it: “This country and its major allies are going to wake up one morning and find that the basis of stable democratic government has been eaten away.”

    Remarkably, it was somehow not illegal for American corporations to spend hundreds of millions of dollars bribing foreign officials. The solution, then, was simple: criminalize the activity, and prevent these private American entities from single-handedly detonating American foreign policy. In 1977, legislators did just that, passing the FCPA, which finally made this kind of bribery illegal.

    For much of American history, corruption was not seen as a major foreign policy issue.

    It was, in many ways, a watershed; not only was this the first legislation of its kind in American history, but it was also the first of its kind in global history. No country had ever criminalized bribery that took place in other countries or so explicitly linked anticorruption efforts to its foreign policy. It set a bar for other democratic countries and created a bedrock for Washington to flesh out its anticorruption and counter-kleptocracy policy in the decades to come.

    Although it took some time, by the early twenty-first century American legislators and White House officials were launching salvo after salvo against transnational corruption, implementing new policies and issuing new appointments that gradually drew anticorruption efforts closer and closer to the center of American foreign policy. In the first decade of this century, the United States made it harder for American banks to launder the wealth of foreign officials, a practice that corroded international stability and corrupted the American financial system in the process. In the 2010s, the creation of the Magnitsky Sanctions—named for the Russian lawyer Sergei Magnitsky, an anticorruption crusader who died in jail in 2009 after being denied medical care—targeted not just human rights abusers but also some of the most corrupt figures around the world, including the former Gambian despot Yahya Jammeh, the Israeli mining magnate Dan Gertler, and Gulnara Karimova, the daughter of Uzbekistan’s former dictator, among many others.

    Momentum stalled during Trump’s first term, but it did not halt entirely. Although Trump issued rhetorical broadsides against many of these policies, he didn’t dismantle any of them, instead allowing them to continue and even expand in certain aspects. After Trump’s defeat in 2020, the momentum returned—and accelerated. The Biden administration and allies in Congress launched multiple efforts to expand Washington’s anticorruption regime. The White House launched initiatives such as the KleptoCapture task force, specifically targeting wealth stashed abroad by corrupt oligarchs. Congress passed the country’s first-ever shell company registry, the Corporate Transparency Act (CTA), which promised to end the United States’ role as one of the major centers of the global offshore economy. The administration announced new counter-kleptocracy rules for sectors such as real estate and private investment industries, created a new positions at the State Department and the National Security Council focused exclusively on corruption, and even issued the first-ever U.S. Strategy on Countering Corruption, which argued that by “preventing and countering corruption and demonstrating the advantages of transparent and accountable governance, we can secure a critical advantage for the United States and other democracies.”

• FROM THE PERIPHERY TO THE CENTER

    The first six months of Trump’s new administration have been a blur of efforts to dismantle all of that progress, going back decades. Fortunately, because Trump has opted for legislative shortcuts, many of the most powerful tools, such as the FCPA, technically remain on the books, and can be picked up again by a future administration. But future officials can’t simply pick up where Biden left off. Democrats need a much broader, much more salient anticorruption plan moving forward—one that is at the center of their platform rather than at the periphery.

    This project is unlikely to succeed if it confines itself to domestic reforms. The old-fashioned notion of corruption as a local problem made sense in an era in which capital mostly stayed within national borders. But in a modern digitized economy when shell companies can be generated in minutes and funds can cross jurisdictions in milliseconds, corruption—especially grand corruption involving elected officials and national leaders—is of an increasingly transnational character.

    Consider the recent charges against U.S. Representative Henry Cuellar (D-Tex.), which allege that the legislator accepted bribes from an Azerbaijani oil company and a Mexican bank through a series of sham contracts involving offshore shell companies, or the criminal conviction of former U.S. Senator Bob Menendez (D-N.J.) for accepting illicit payments through individuals and front companies linked to the governments of Egypt and Qatar. If the United States does not confront and disrupt the kleptocratic networks, offshore havens, and money-laundering professionals that enable global illicit finance, it is leaving its own institutions exposed to this kind of malign foreign influence.

    The United States’ ability to advance its interests at home and abroad depends on the vitality, efficacy, and legitimacy of its own democratic institutions and those of its partners. Corruption is a driver of democratic retrenchment, political instability, civil strife, transnational crime, and human rights abuses. It undermines security partnerships and jeopardizes U.S. military and civilian assistance, as Washington learned the hard way in Afghanistan. It frustrates U.S. efforts to build resilient and reliable supply chains for critical goods by driving up the cost of capital and deterring investment in jurisdictions perceived to have weak rule of law. Finally, corruption provides autocratic governments with a “gray zone” strategic weapon to influence the workings of democratic systems in furtherance of their geopolitical ambitions.

    Opposition to corruption is as universal a belief as exists in the world today.

    If a future administration wants to reorient U.S. foreign policy toward a genuinely cooperative, post-primacy approach that emphasizes the common good in an increasingly multipolar world, it must do so in tandem with a robust anticorruption program. A world in which corruption runs rampant is one in which states will struggle to cooperate effectively to fight climate change, prepare for and respond to pandemics, promote sustainable development, and ensure equitable and broad distribution of renewable energy technologies, health infrastructure, and other global goods. By the same token, corruption and the offshore jurisdictions and kleptocratic networks that sustain it are obstacles to international coordination on labor exploitation, corporate impunity, and environmental crimes. Put simply, the United States will never succeed in building a more democratic, equal, and peaceful world if it fails to control endemic graft.

    Anticorruption also offers the most plausible pathway to repairing Washington’s badly damaged credibility on values. Even before Trump’s second term, the United States’ double standard on Israel’s horrific treatment of Gaza’s civilian population bred mistrust and cynicism in much of the world. That legacy, in conjunction with four more years of “America first” posturing, makes it very unlikely that the next administration will be able to draw on the reserve of global goodwill that Biden enjoyed when he assumed office. Going forward, the United States will face a far heavier burden of proof in establishing its bona fides as a positive force in global affairs.

    Anticorruption is a logical point of departure in seeking to establish a new, more benign role for the United States in global affairs. Opposition to corruption is about as universal a belief as exists in the world today, one that even blatantly kleptocratic regimes such as Russia claim to deplore. And notwithstanding the Trump administration’s assault on U.S. anticorruption capabilities, the United States has a strong record of shaping and defending anticorruption and transparency norms. Indeed, before the current administration, Washington was in a class of its own in its prosecution and sanctioning of corrupt acts outside its own borders, driving international cooperation to crack down on money laundering and illicit finance, and supporting local anticorruption efforts in fragile democracies in the Americas and the Indo-Pacific. These accomplishments offer a foundation from which the United States can resume values-based cooperation with its international partners.

• CLEANUP TIME

    A future administration that is serious about fighting corruption must first reverse the Trump policies that undercut U.S. anticorruption capabilities. At a minimum, this will mean reinstating the enforcement of key anticorruption and anti-money-laundering laws such as the FCPA and the CTA, restoring initiatives such as the Justice Department’s anti-kleptocracy task force and the State Department’s Office of the Coordinator on Global Anti-Corruption, and rejoining international efforts to strengthen transparency in the global economy, such as the Extractive Industries Transparency Initiative and the Open Government Partnership.

    The next administration should take aggressive early steps to protect U.S. institutions from the outsize influence of both foreign and domestic special interests that enjoy privileged links to public officials. To mark a clear break from the Trump era for both domestic and foreign audiences, the White House must curb the misuse of public office for private gain wherever it occurs. If the world’s foremost democracy cannot get its own house in order, it will struggle to catalyze reforms elsewhere in the world.

    A first step would be to reform the federal bribery statute and federal gifts statute to criminalize a broader range of abuses of public office, such as the payment of “gratuities” to an official as a token of appreciation for an act that he or she had performed in office. (Astonishingly, in 2023, the Supreme Court held that such intuitively corrupt behavior was not bribery under federal law.) The United States should also reform federal lobbying regulations to limit influence peddling by former officials, expanding the definition of lobbying to include any professional who is paid to influence lawmakers, and establishing a lifetime ban on lobbying for former senior officials and a cooling-off period for all others. New laws should bar executives of firms that have been subject to repeated criminal sanctions from serving as senior government officials and prohibit members of Congress from trading stocks or serving on corporate boards. And Congress should ban the grotesque practice of giving top diplomatic posts to major donors.

    Perhaps the most important step will be to drastically reform the campaign finance system. The United States is an outlier among developed democracies in that its system of campaign finance is basically a form of legalized bribery. In recent years, more and more foreign actors have begun bankrolling American legislators, taking advantage of massive loopholes in campaign finance laws and the Federal Election Commission’s lack of enforcement. At a minimum, Congress must move to legislate a reversal of the Supreme Court’s 2010 Citizens United decision, which effectively greenlighted bottomless campaign funding from American corporations. It must also reform the FEC, providing the body with much-needed resources to investigate campaign finance crimes and restoring the practice of allowing congressional appointments to the commission, which has become little more than an appendage of the executive branch.

    American tough talk on corruption has not always translated into action.

    At the same time as it puts its own house in order, the United States should be vigorously engaging with like-minded partners to forge a united front against corruption. As the regulator of the dollar-based financial system, the United States is uniquely positioned to shape the global financial infrastructure within which corruption thrives. In partnership with its European allies, Washington can establish new rules of the game for cross-border financial activity and impose order and transparency on ungoverned financial spaces, including by coordinating sanctions and other coercive measures against governments that abet money laundering, pursuing coordinated sanctions against corrupt officials and their enablers using authorities such as the Global Magnitsky Act, and conditioning access to U.S. markets and other leading financial systems on stringent anti-money-laundering standards that go beyond current international requirements. To enhance these efforts, officials should also step up intelligence collection relating to overseas corruption and provide greater resources for anti-money-laundering entities such as the Financial Crimes Enforcement Network, known as FinCEN.

    Alongside these regulatory and law enforcement measures, Washington should recommit to foreign assistance and diplomacy focused on strengthening the rule of law and fighting kleptocracy and state capture. The Biden administration’s most successful initiatives in leveraging American soft power to fight kleptocracy overseas—including defending Guatemala’s electoral integrity against entrenched oligarchy and helping governments in eastern Europe and the Pacific Islands identify and prevent Russian and Chinese attempts to use corrupt networks to tilt elections and shift policy—provide constructive examples to draw on. This effort should be paired with a concerted effort to increase the number of overseas personnel with experience and training in combating corruption, beginning with ambassadors, who are often the tip of the spear of anticorruption efforts in fragile democracies.

    American tough talk on corruption has not always translated into action when it has conflicted with other strategic interests. The Biden administration’s reluctance to sanction Indian and Israeli officials dogged by well-documented and credible corruption allegations, as well as its partnerships with deeply corrupt governments in places such as Egypt, Honduras, and Afghanistan, compromised its ability to call out corruption elsewhere in the world and provided ammunition to claims of U.S. hypocrisy and double standards. This will require the next presidential administration to make a public commitment to anticorruption as a priority and a congressional cohort ready and willing to use its oversight authority to monitor progress and hold the administration to those commitments. A good place to start would be passing a law that would prohibit security cooperation with military forces credibly implicated in corrupt acts or linked to regimes that support transnational corruption—akin to the way the so-called Leahy law prohibits security cooperation with forces that commit human rights violations.

    At some point, perhaps as soon as 2029, a U.S. administration will once again find itself confronted with the difficult task of persuading its erstwhile partners and allies that it stands for something greater than its own power. But unlike previous reboots, the United States should not expect to sit at the head of the table after spending four years trying to overturn it. Instead, it will need to demonstrate that it is as good as its word on values. A full-throated campaign to restore transparency, accountability, and integrity to its own institutions as well as those of fellow democracies is the place to start.