Frank Vogl - The Enablers - How the West Supports Kleptocrats and Corruption Endangering Our Democracy

Frank Vogl, former senior World Bank official and foreign business and economics correspondent for The Times of London, teaches a graduate course at Georgetown University titled Corruption, Conflict Resolution, and Security. He is the chair of the board of directors of the Partnership for Transparency Fund, and the cofounder and former vice chair of Transparency International, the global nongovernmental anti-corruption organization. He served as president of Vogl Communications, Inc., an international communications consulting firm, from 1990 to 2018.

This book reflects a long journey back to 1970 and my reporting for the Times (of London) from Geneva, Switzerland, on the largest financial scandal of the era with the implosion of Investors Overseas Services. Ever since, my maxim has been follow the money. The trails have brought me to confront corruption over the decades and the dirty money that accompanies it, from the heights of corporate finance to some of the worlds poorest countries. Many of the lessons that I have learned from my own experiences, and more importantly, from many colleagues, are reflected in the pages of this book. I owe debts of thanks to Peter Eigen, who invited me to join him in establishing Transparency International (TI), and to so many courageous and wise friends in TIs chapters across the world. I am no less indebted to the willingness of my colleagues in the Partnership for Transparency, who serve on an entirely voluntary basis, to share their experience and their knowledge with me.

In drafting the manuscript, I am especially grateful to TI co-founder Laurence Cockcroft, to former TI managing director Cobus deSwardt, to TI US director Gary Kalman, and to anti-kleptocracy activist Charles Davidson for reading an early version and offering valuable comments and encouragement. Then, my appreciation goes to the individuals who read the book and enthusiastically endorsed it, all of whom have contributed over the years to my increased understanding of graft across the globe and in the United States: Louise Shelley, Daniel Erickson, James Thurber, and Simon Taylor. In this context, a particularly big thank you to Raymond Baker, who founded Global Integrity and whose pioneering work on illicit finance and its costs over the last two decades has influenced me greatly, as well as so many others. When it comes to research in this field, he established the gold standard.

A substantial stimulus for this book emerged from the views on global corruption and security expressed by many of the outstanding graduate students who I have had the privilege to teach at Georgetown University. They have often expressed outrage at the crimes of corruption pursued by some of the worlds largest corporations, and their questions and comments have been a spur to my research and influenced my conclusions. I am grateful to them all.

Much of this book was drafted during Donald Trumps presidency, and at times I felt that the virulent corruption promoted by his administration added to the urgency of writing this volume, yet made the desire to find a cautiously optimistic perspective on the fight against illicit finance almost impossible. Throughout this long journey, Peter Bernstein, at the Bernstein Literary Agency in New York, has been a calm and reassuring friend, consistently advising on drafts. Without that support, this book would not have been published. My thanks to Jon Sisk at Rowman & Littlefield, who enthusiastically published my last book (Waging War on Corruption) and has just as keenly embraced The Enablers.

I benefited enormously as this book developed from the constant support of my wife Emily, my daughter Julia, my son Marc, and his wife Megara. This book is dedicated to Felix, my grandson, who I believe will grow up in a world that is less corrupt.

In writing this book, and in all my work against corruption, I have been constantly mindful of the hundreds of millions of people across the globe who are trapped in poverty to no small degree because of the crimes that are being perpetrated by their governments. Despite all the deep challenges of corruption, I look ahead with hope to younger people everywhere to find fresh pathways to overcome injustice and impunity and so secure the basic rights of all people to live their lives in dignity.

Fighting corruption is not just good governance. It is self-defense. It is patriotism, and its essential to the preservation of our democracy and our future.

President Joseph R. Biden, Jr., June 3, 2021

Across the world, leaders of authoritarian governments, and their cronies, are robbing their people. These leaders are kleptocrats Even more worrying, we are complicit in their quest for ever greater power.

Central to Western complicity with kleptocrats and their associates across the globe are the armies of financial and legal advisors, real estate and luxury yacht brokers, art dealers and auction house managers, diamond and gold traders, auditors, and consulting firms, based in London and in New York and in other important global business centers, who aid and abet the kleptocrats in return for handsome feesthese are the enablers. not a single chairman or chief executive officer has personally faced criminal charges for such activities, while the fines that are agreed to settle legal actions appear, quite simply, to be viewed by bankers as just the costs of doing business.

The short-term maximization of profits is at the core of the corporate cultures at many of the worlds largest banks and multinational corporations. They are giant enterprises and some of these banks have assets under management that dwarf the GDPs of many national economies. The drive for ever bigger and quicker profits, which translate into mounting bonuses for senior executives, push issues of integrity and accountability to the sidelines. Concerns for serving the public interest, which ought to be at the center of the cultures driving vast companies, have increased in recent times as public demands and leading groups of investors have called upon these companies to pay far greater attention to how their business practices impact climate change. Gradually, arguably too slowly, these pressures are generating positive developments. But when it comes to international corruption and the roles that major banks and other giant multinational firms play, then public pressures for reform are few, investor concerns are barely visible, and corporate boards of directors charged with risk management oversight are silent.

Some of the activities of the enablers are illegal. Many of their actions in service to their kleptocrat clients are legal, but they do not serve the public interests of citizens in democratic nations, and indeed well beyond. By supporting the power of the kleptocrats and their associates, the enablers contribute to risks to international security, to Western democracy, and to the stability of the international financial system. The threats are now so formidable that countering the kleptocrats and their money-laundering operations has to become a leading priority for the Biden administration, the US Congress, the British government, the Commission of the twenty-seven-country European Union (EU), and other public authorities, such as those in Canada, Australia, Singapore, and the United Arab Emirates (UAE). These authorities are now doing more to counter illicit finance than ever before, but their combined impact is modest when seen against the full magnitude of international grand corruption and money laundering today. The necessary actions need to embrace fully the roles played by the enablers who reside in our midst, who are subject to our domestic laws and regulations, and whose operations do us so much harm.