Feb. 16, 2017
These are banner times for corruption watchdogs pushing for transparency. From Congress’s recent repeal of the bi-partisan Lugar-Cardin provision—which would’ve required oil, gas, and mining companies registered with the SEC to disclose payments to foreign governments—to the ongoing controversy involving veteran intelligence officer Michael Flynn and Russia’s ambassador to the United States, transparency and security have never seemed more impossibly intertwined—or at stake.
Yet understanding these crises, and how to go about solving them, requires a look back at the past. New challenges sometimes require new solutions—but much of the time, new challenges aren’t exactly new.
It was in 1975 that the US Senate—under the leadership of then-Senator Frank Church (D-Idaho)—began an investigation into major US defense contractor Lockheed Martin. Based on earlier findings by the Securities and Exchange Commission on corporate slush funds, it was revealed that Lockheed had made “questionable payments” to officials in Japan, Italy, and the Netherlands in return for more business. In many cases, these funds were explicitly used to fund political campaigns.
With the Iron Curtain hanging tight across Europe, there was great unease on both sides of the aisle that American companies paying bribes abroad had derailed US foreign policy—and would continue to do so—playing straight into the hands of communist groups. Covert campaign contributions were seen as a form of democratic interference. Because Lockheed sold military hardware and was receiving millions in federal loans, the scandal implicated the US government—striking a huge blow to its credibility as the leader of the free world.
From former Deputy Secretary of the Department of State Robert Ingersoll (R-NY) to former US Congressman John Murphy (D-NY) to former Senator Frank Church (D-Idaho), foreign policy leaders believed that US-inspired corruption had fundamentally compromised America’s national security—not just its moral leadership. Church put it this way: “While bribes and kickbacks may bolster sales in the short run, the open participation of American firms in such practices can, in the long run, … create the conditions which bring to power political forces that are no friends of ours, whether a [Gaddafi] in Libya, or the Communists in Italy.”
Two years later, in 1977, Congress passed the Foreign Corrupt Practices Act (FCPA)—the first law ever to govern domestic business conduct with foreign governments in foreign markets. It was an act of moral leadership, yes, but it was also a strategic foreign policy maneuver. Despite initial concerns that only Western companies would play by the rules, the past 30 years have witnessed a proliferation of FCPA-fueled anti-corruption conventions the world over: from the Inter-American Anti-Corruption Convention (1996) to the OECD Anti-Bribery Convention (1997) to the UN Convention Against Corruption (2003).
The adoption of the FCPA was America at its best. Propelled by moral conviction and bipartisan deal-making, the country recognized how projecting progressive values could pave a pathway to national security.
And now is not the time for retreat—something that Donald Trump has signaled in his disparaging comments about the FCPA.
Global defense spending is rising—up $675 billion since 2005—and is increasing fastest where standards of governance and levels of transparency are lowest. Across Asia, the Middle East, and Africa, regional rivalries are made worse by ever-greater levels of military capability—often bought from new, unscrupulous defense players.
Can great powers like the United States afford to turn inward?
Surely not. The global fight for transparency and accountability began over three decades ago. It began with an understanding that this struggle was central to US national security.
And this fight is far from over. Transparency International estimates that 80 percent of countries receiving foreign military sales from the United States have high or critical levels of corruption in their defense sectors. While some US aid comes in the form of security assistance—like the $20 billion the United States spent to rebuild the Iraqi military following the 2003 invasion or the $1.3 billion going to Egypt—it also involves straightforward equipment sales to countries like Saudi Arabia, believed to be a strategic partner in the region.
The failure of many countries to provide security and justice for their people, or to forge stable and predictable relationships with their neighbors, is a root cause of some of the United States’ most significant security challenges. As we saw in Mosul in 2014—when a 1,500 person-strong ISIS force took the city from the 30,000-person Iraqi army—corruption can quickly corrode institutions—undermining both the capacity and the legitimacy of American partners.
In short, corrupt governments can often turn out to be the architects of future security crises.
As Church would surely urge some 40 years on, Western governments need to fundamentally rethink their relationships with the Mubaraks, the Gaddafis, and the Malakis of the future. The anti-corruption fight didn’t begin yesterday, and it won’t end tomorrow. Many of the leaders to whom Western governments turn are far from friendly forces in the fight against terrorism—or the answer to maintaining the liberal global order on which America’s domestic prosperity depends.