Understanding Corrupt Governments as Criminal Networks

Source: Voice of America, Khmer

The author of a new book says governments can be successful criminal organizations, by taking over state functions and repurposing them to earn illicit money. In an interview with VOA Khmer, Sarah Chayes, the author of “Thieves of State: Why Corruption Threatens Global Security,” says such governments use the courts to protect low-level officials, who are key actors in a system, sending money up from the ground level to feed the network. Chayes, a senior associate at the Carnegie Endowment for International Peace, spoke recently with VOA Khmer, saying that corrupt governments can be broken down by anti-corruption revolutions, such as those that occurred in Tunisia, Libya and Egypt.

VOA Khmer: What is the form of corruption you are talking about in your book?

SARAH CHAYES: We are talking [about] a very serious amount of money that is represented by the petty bribery, when police officers or low-level bureaucrats are extracting or extorting facilitation payment. It’s between two to six billon US dollars a year. The second important point is we’re talking [about] a structure here. We’re talking about whole governments that are essentially criminal organizations, that are sophisticated and are succeeding in maximizing revenues for network members instead of governing their people. It’s not the governments that are failing. It’s actually criminal organizations pretending to be governments that are succeeding. What corrupt governments like these do is they take over elements of state functions. They repurpose the very important elements of state functions to help achieve the subjective of maximizing money, and that means the judiciary. It always means some elements of armed forces, be it military units or state security or the police.

The organization is vertically integrated. That means when a police officer shakes people down on the street, so-called petty corruption, that money is making its way up the chain. He or she is not just putting it in his pocket. He’s saving a part of it to give to a superior and all the way up, sometimes to the interior minister. The third really important element is the amount of personal humiliation that victims of this kind of corruption suffer. When a police officer demands money from you, he’s not doing it politely, right? He gets into your face. He demands it. He acts with impunity, with an overbearing attitude. Often, he might hit you or drag you up to jail if you refuse to give him the money. So there is a level of being disrespected that is really wounding to people. Not only are they losing their money, but they’re losing their sense of dignity, and that often drives them to violence.

How does the government act of fraud and bribery affect the wellbeing of the state as a whole and beyond?

One is that money that should be producing public goods, like education or health care, or good roads, or trains for everyone, is being put in people’s pockets or actually put in banks offshore, usually outside of the country. The public is being robbed of resources that should be getting invested in things that they can use. That’s one way that it hurts the state. Another way that it hurts the state is that it really corrodes people's view of their government. I mean, we all have different views about government. We’re all sometimes happy or less happy with how our government is behaving. But the basis of a country has to be that the people think overall the government is there for the benefit of society, and not in order to pray on society. But once people start to see their government as their enemy, then it’s very devastating to the state. And then thirdly, when their personal dignity is really injured in the way that this bribe-taking often does it, people can get angry. In a lot of places, there are either insurgents or separatists or other violent movements that want to prey on that sense of a grievance. 

How does a corrupt government manage to succeed in getting away with its criminal acts and staying in power?

One of the most important things that these governments do is they have a trade. The money is going up from the ground level. So the street-level police officers or the teachers or the people who are in direct contact with the public are extorting money from the public. They send a portion of the money up the line. In return, what they are given is impunity from legal or other repercussions. This is what caused me to really understand this as a functioning system, when I first started experiencing it in Afghanistan. I was really surprised to see the president of Afghanistan getting involved in legal cases against very trivial unimportant low-level officials. I was like, why would he risk his reputation to protect this unimportant person? That’s when I realized the whole system would collapse if that impunity were not guaranteed to every person participating in the system—or every network member. So what these governments do is they ensure, either capture the judiciary so that the judges and prosecutors are actually members of the system, members of the network, or they are directly influencing them. They work around the judiciary. For example in Egypt, the current military government of Egypt often uses a military tribunal that it can control, because the civilian judges are just a little bit more independent.

In what ways do you think foreign investors, especially banks and corporations, play a role as enablers for a corrupt government to exploit state resources and feed its own network?

Foreign assistance in many countries is a very important revenue stream that’s captured by the kleptrocratic network, either directly, by way of on-budget contributions, or indirectly, when they have their own implementers. The implementers of foreign assistance projects are actually wired into the network. Then there are private sector actors, which include purchasers of raw materials, who are very often willing to accept very dodgy deals, where they know that the raw materials actually belong to the general public. But they are illegally sold to a local operator. The foreign companies will buy the resources from a local operator, but that local operator actually belongs to the kleptrocratic network. That’s one way. Or another way is by local content agreement, where they have to “employ local companies.” Those local companies are often members of the kleptrocratic network. Or also obviously any deal involving either extracting resources from or building infrastructure on public land. The question is, who really has the right to that land, or is the population getting the fair return for the use of that public land? Often it’s private land. So there are land grabs going on, where people are deprived of the title to land that they and their family and forebears may have lived on for centuries or even millennia. But suddenly the government declares to be its own and its disposer of that land unfairly basically dispossesses the rights for owners.

In what ways can such a huge corrupt government break down?

Well, often it breaks down from within. That’s how it usually has broken down. In some cases, you have violent insurgency. I mean look at Iraq. Iraq has broken down since last year because, first of all, the government was so corrupt that the people started turning to ISIS. They saw ISIS, the Islamic State, as being preferable to their government. Secondly, the government had pillaged the military. Although the United States has spent billions of dollars on the Iraqi military, there was nothing there when it faced the challenge. So the entire military collapsed. The government has basically collapsed. It’s only sort of being held up because the US has come back in there to support the Iraq militarily. I think the governments of Tunisia, Libya and Egypt are examples of where anti-corruption revolutions brought the governments down. So there you have two potential ways. Another way if the government gets into a very deeply entangled relationship with transnational criminal organizations, and that’s the case in parts of Mexico, for example, where essentially there is no government, particularly at a subnational level, because the government is so intertwined with transnational organized crime that it is not a government anymore.

This interview was originally published in Voice of America, Khmer.