Table of Contents

The results of this examination are sobering—not just for what they tell us about Honduras but, more importantly, for the light they shed on the structure of the political economy in far too much of the world. Despite repeated anti-corruption uprisings on almost every continent in less than a decade, members of the policy, business, and aid-delivery establishments in Western countries still tend to greet news of the latest scandal with an awkward shrug. Their reasons for failing to connect corruption with issues of primary concern to them are oddly contradictory: some see these episodes as “black swans”—disparate if remarkable examples of individual delinquency that seem to plague unfortunate countries—while some others minimize corruption as a reality that has always existed, and may even help lubricate a seized-up system.

Such attitudes prevent us from recognizing, let alone addressing, a dangerous development that is systematically stymying development prospects, accelerating environmental destruction and wealth and income inequality, and driving its victims toward ever more desperate responses. Even the professional anti-corruption community seems to flinch from the larger realities, generally limiting itself to technical approaches to a problem that has grown too grave and too central to the way wealth and power are distributed to be susceptible to such fixes.

What has given this age-old problem such potency in this generation is that the basic societal constructions in which it is rooted have shifted, just as new technological means for making and moving money have exploded prior practices.

Over the past three decades or so, money has increasingly come to eclipse other values as the standard against which people measure themselves and evaluate their own and each other’s social stature. Not that money hasn’t been an important measure of personal worth from the moment it was invented in its various forms. But in some historical periods, other such markers that also play that role, such as trustworthiness, erudition, or service to members of the community, fade to relative inconsequence. We are in one of those periods.

A particularly destructive feature of this contemporary evolution is the scant regard paid to the provenance of the cash or the means by which it was acquired. In earlier decades, at least in many cultures, wealth was only deemed honorable if it had been come by honorably. In England or France, for example, open displays of net worth might be so frowned upon that the rich would discreetly downplay their fortunes. Nigerian village elders might sternly interrogate members of the community who had become suddenly rich. Among Native Americans or the Vikings, booty had to come from a raid in which courage and endurance was tested to elevate the stature of those who captured it.476 The United States has characteristically been unabashed about its admiration for people who “make money”—by any means. But even here a slide further in that direction is palpable, as increasingly the bare fact of riches delivers envied status.

Meanwhile, the globalized financial system, offshore havens, and electronic money transfers have revolutionized the uses to which ill-gotten gains can be put, thereby raising the stakes. And so the controls have come off the methods by which wealth is acquired.

To compete in this race—for return on investment or for zeroes in personal bank accounts—elites in the developed and developing world alike, across political and identity cleavages, have been writing the rules governing political and economic activity (or selectively enforcing such rules) to their own benefit. This perversion of government function, and not merely cash in an envelope or an inflated purchase order, is what in this study is encompassed by the word corruption.

In-depth interviewing in nearly a dozen countries worldwide suggests that such practices veered onto terrain not seen in more than a generation during and around the 1990s. In Honduras, Hurricane Mitch provided the opportunity for rapid transformations along these lines at the end of that decade.477 Manuel Zelaya’s 2005 election checked their momentum, so the 2009 coup marks the clear turning-point.

To achieve their goal of self-enrichment most effectively, Honduran elites duplicated a pattern observed elsewhere: they wove themselves into multidimensional networks. Of variable geometries and degrees of structure, these webs knit together disparate sectors—government and business, out-and-out criminals, and violent groups. Many observers see these categories as entirely separate. Indeed, their own political preferences or professional activities may be predicated on that separation—between government and the private sector, for example, or “bad guys” and licit actors. This entirely human reflex to categorize has blinded us to crosscutting kleptocratic networks.

In Honduras, a rough bargain has bound together the private- and public-sector elements of the network: in return for a legal and regulatory environment that tips the market steeply in favor of the industries monopolized by the top business families, plus protection by the state apparatus for them and their interests, these families look the other way when government officials and their proxies pilfer public coffers and engage in self-dealing.

The main purpose for which such kleptocratic networks coalesce, of course, is to capture revenue streams disproportionate to the effort exerted or contribution made to the common good. In Honduras, the 1990s shift in the routes for the rivers of cocaine that cascade northward to the United States did not bypass the network. The most significant drug-trafficking cartels in the country are woven into it. It is more than likely that people-smugglers joined them during the wave of youth flight that peaked in 2014 and 2015. In Honduras as elsewhere, whole categories of crime, notably money laundering, have become normalized.

Rigging and criminalizing the political and economic systems in this way have, in dozens of countries worldwide, infuriated populations. In Honduras, localized protests gave way in 2015 to repeated massive demonstrations similar to those that broke out that year in half a dozen other countries. Earlier, such indignation helped spark the Arab Awakening and the Euromaidan revolution in Ukraine, and has been shown to contribute to the attractiveness of violent extremism.478

Kleptocratic networks have proven remarkably adept at managing or exploiting this indignation. Often—as in Russia, the United States, and a number of Arab countries—they have manipulated nationalism, identity affiliations, or social mores to distract the public from their consolidated hold on (or recapture of) the political economy. Humans are almost hardwired to form identity groups whose paramount objective becomes the defeat of other such formations, even in the face of a win-win scenario that might be more objectively beneficial than victory over rival groups.479 A talented manipulator can play upon such affiliations to channel vitriol at out-groups and away from his and his network’s malfeasance. Identity politics of this sort, or push-button social issues like full-body veils or abortion rights, have not played as significant a role in Honduras as elsewhere.

Violent repression, by contrast, carefully targeted for the maximum psychological effect, has. The assassination of Berta Cáceres is a prime example. So inspiring a figure was she that her killing sent reverberations through like-minded communities, where people were left wondering, “if they can gun down a Berta Cáceres, just imagine what they can do to me.” This intimidation effect may have been judged worth the international condemnation that was guaranteed to greet news of her death.

The exploitation of legalisms is another technique employed by Honduran elites, which carefully if deceitfully gather signature lists they can display as evidence of local assent to projects, or push legislative changes through select committees. In better established democracies with abiding faith in their legal institutions, such as the United States, this is the tool of choice. It could be seen in operation in the U.S. Supreme Court’s unanimous 2016 decision to overturn the corruption conviction of former Virginia governor Bob McDonnell because the meetings he arranged in return for cash and in-kind gifts were not deemed “official acts,”480 or Donald Trump’s frequent reminders that the president is not subject to conflict of interest laws.

Ironically, given the opportunity presented by widespread indignation at the brand of corruption discussed here, genuine reformers have proven far less able to capitalize on it than spoilers. Idealists have been thwarted again and again, as the networks rapidly reconstituted themselves in the wake of major upheavals that had been aimed at unseating them. Adding to the odds against reformers, especially in developing countries like Honduras, has been the impact of much international assistance, including diplomatic engagement and foreign direct investment as well as military and civilian aid. Taken in the aggregate, the vast bulk of such assistance flows toward kleptocratic networks, enriching them and reinforcing their psychological and material dominance, and bypassing the victims of their practices or those fighting doggedly to reverse them. It is time to consider those realities candidly.

This study may paint these systems as so multifaceted and resilient, so pervasive, so supported by broad-based cultural attitudes and well-meaning interventions, as to be impossible to combat. And, indeed, rolling back this global phenomenon will be very hard. But the danger that transnational kleptocratic networks pose to governments in the interests of the governed, to global security, and environmental health is too significant to make failure an option.

The first step must be to acknowledge today’s corruption as the intentional operating system of sophisticated and successful networks. We must be willing to study these networks as such—wherever we encounter them. We must stop presuming the reality of distinctions between their different functional branches. We must carefully examine overlapping private- and public-sector footprints for evidence of self-dealing. We must cease excusing the unprincipled use of power for personal gain—and not just in our developing country borrowers or government counterparts, but at home as well. For far too many Western countries exhibit elements of the pattern described here. We must cease accepting legalisms as pretexts for the criminalization of politics.

The approach modeled in this report, in other words, is not just aimed at helping practitioners better tailor the specifics of aid delivery or the use of diplomatic leverage with respect to Honduras. The shift in mindset this report urges and the analytical tool it provides are critical to treating the growing pathology of political economies in the West as well as our less economically developed neighbors.

Notes

476 See, for instance, Heather Pringle, “What You Don’t Know About the Vikings,” National Geographic, March 2017, http://www.nationalgeographic.com/magazine/2017/03/vikings-ship-burials-battle-reenactor/; S.C. Gwynne, Empire of the Summer Moon (New York: Scribner, 2010); or Jonathan Lear, Radical Hope: Ethics in the Face of Cultural Devastation (Cambridge, MA: Harvard University Press, 2006).

477 Klein, “The Rise of Disaster Capitalism.”

478Chayes, Thieves; and Lt. Col. Dave Allen et al., “The Big Spin: Corruption and the Growth of Violent Extremism,” Transparency International UK, February 2017, http://ti-defence.org/wp-content/uploads/2017/02/The_Big_Spin_Web-1.pdf.

479 Multiple studies are examined in Liliana Mason, Uncivil Agreement: How Politics Became Our Identity (Chicago: University of Chicago Press, forthcoming).

480 McDonnell v. United States, 579 U.S. (2016), https://www.supremecourt.gov/opinions/15pdf/15-474_ljgm.pdf.