Corruption and International Security

Corruption and International Security

Kimberley Thachuk

SAIS Review, Volume 25, Number 1, Winter-Spring 2005, pp. 143-152(Article)

Published by The Johns Hopkins University PressDOI: 10.1353/sais.2005.0020

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143CORRUPTION AND INTERNATIONAL SECURITYSAIS Review vol. XXV no. 1 (Winter–Spring 2005)

Kimberley Thachuk is a visiting professor of international affairs at The Elliott Schoolof International Affairs and a senior research fellow at the Institute for NationalStrategic Studies, National Defense University and can be reached at (202) 994-0969or via e-mail at [email protected]. This paper is based on an earlier version entitled“Corruption: The International Security Dimension,” presented at the NDUSymposium, Addressing Transnational Security Threats in the Asia-Pacific Region,Feb. 20–21, 2002. Opinions, conclusions and recommendations expressed or impliedin this paper are solely those of the author and do not necessarily represent the viewsof the National Defense University, the Department of Defense, or any other agencyof the U.S. government.

143

Corruption andInternational Security

Kimberley Thachuk

The Global War on Terrorism has made policy analysts the world over re-think the im-plications of corruption for the peaceful existence of states. Corruption has become theenabler by which groups who commit conspiracies on a global scale may threaten inter-national security with relative impunity.

The Global War on Terrorism has made policy analysts the world overre-think the implications of corruption for the peaceful existence of

states. While it has long been understood that corruption is a blight onboth developed and developing states, it was unclear until recently howinsidious it is and to what extent this form of villainy is detrimental topeace and security. Terrorists and organized criminals have duped and sub-orned individuals in governments into virtually selling their sovereignty soas to create “states of convenience” from which to conduct internationaloperations. In so doing, they disrupt financial markets, distort fledglinggovernments, and employ ruthless criminality to visit misery and chaos onunsuspecting populations. These international villains have formed virtualpacts with corrupt leaders who systematically rob their own citizens of notonly their wealth and assets but also their futures. Corruption is no longeronly greasing of the wheels of commerce, paying off government officialsto expedite matters, or rigging elections. Nor can it any longer be called adomestic financial and legal problem. Rather, criminal organizations andterrorists use corruption first to breach the sovereignty of many states andthen to distort domestic and international affairs. More importantly, cor-ruption enables groups who commit conspiracies on a global scale tothreaten international stability and security with relative impunity.

Fighting corruption has become a significant component of the battleagainst international organized crime and terrorism. In his opening address

Sherry Massoni

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144 SAIS Review WINTER–SPRING 2005

to the Anti-Corruption Conference in Prague in 2001, Vaclav Havel said,“[F]ighting corruption is fighting terrorism.”1 An important internationalrift is developing between those states that provide criminals and terror-ists sanctuary and those that do not. Leaving groups with no place to planconspiracies and conduct criminal enterprise will impede both their cur-rent and future operations. Closing the avenues of corruption will lessenthe likelihood that they will be able either to penetrate or to remain in anystate for very long. Corruption is an international problem that knows noboundaries, and one that must be addressed if the fight against interna-tional terrorism and organized crime is to be won. These groups level agrave threat to international stability and security, and states have themeans either to thwart or enable them.

Corruption Has Mutated

Many of the changes in the character of corruption have occurred in con-junction with developments wrought by the fast pace of globalization. Thelack of predictability of the post-Cold War era, coupled with rapid global-ization, presents a greater challenge for some governments than for oth-ers. Some have not had great success at maintaining order or making eco-nomic advances in the face of rapid social change, endemic poverty andchronic unemployment. For many states, internal travails have spread ontothe international stage and now threaten global stability. For a few, chroniccivil unrest and an inability to guarantee the rule of law have lured inter-national criminals and terrorists who have taken advantage of weak gover-nance to build significant strongholds from which to direct operations.

Capitalism certainly defeated communism, but increasingly, theemerging beneficiaries are criminals and villains rather than hardworking

citizens in poor states. In bring-ing capitalism and democracy tothe world, the West did not en-vision that such freedoms wouldbe twisted by rogues who under-stand that the new world orderhas less order and is more anar-chic than before. Indeed, the an-archy that the international freemarket perpetuates has affordedvillains more opportunity andmaneuverability than has existed

at almost any time since the Treaties of Westphalia. It is the perfect set-ting for a game of “survival of the fittest” to be played out on the interna-tional stage—except that in this case, prowess is measured by guile andstealth, the ability to suborn and to distort and to buy and sell any mer-chandise for which there is a market.

In addition, there are numerous corrupt business sectors that are reap-ing the rewards of the globalization of international finance. These sectorsenable criminals and terrorists to obscure illegal transactions as well as to

Capitalism certainly defeatedcommunism, but increasingly,the emerging beneficiaries arecriminals and villains ratherthan hardworking citizens inpoor states.

145CORRUPTION AND INTERNATIONAL SECURITY

launder and manipulate money quickly and anonymously. The ability tomove vast quantities of wealth using modern-day wire transfers, faxes andInternet connections is a strategic advantage for criminal and terrorist net-works. Yet these manipulations are not possible without the collusion ofstates and their financial institutions. In recent years, such complicity haspermitted many criminal and terrorist groups to extend beyond a few statesto build large multinational empires with pervasive, well-funded subsidiaries.

In countries such as Nigeria and Thailand, economic development hashelped change the face of politics, leading newly enriched business figuresand middle class groups to enter the public arena in order to protect theirinterests. Unfortunately, it has also strengthened the position of the mafiasin these states. Organized crime syndicates have allegedly backed candidatesfrom political parties, and their support is sometimes even sought out bythe national government. “In many cases, political parties consult withthese godfathers in order to determine who should be nominated as theircandidate.”2

Corruption in General

Joseph S. Nye posits a comprehensive definition of corruption:

Corruption is behavior that deviates from the formal duties of a public rolebecause of private-regarding (family, close family, private clique) pecuniaryor status gains; or violates rules against the exercise of certain types ofprivate-regarding influence. This includes such behavior as bribery (use ofa reward to pervert the judgment of a person in a position of trust);nepotism (bestowal of patronage by reason of ascriptive relationship ratherthan merit); and misappropriation (illegal appropriation of public resourcesfor private-regarding uses).3

Generally, corruption is rooted in human nature, with its attendantflaws. As such, instances of fraud (an act of deception deliberately practicedwith the view of gaining unlawful advantage), extortion (exacting moneycoercively), embezzlement (appropriating fraudulently to one’s own usewhat is entrusted to one’s care), violence, and other forms of criminal ac-tivity can be added to the above definition of corruption. As corruption isusually a consensual crime, secrecy and collusion characterize its manyforms. Even major exposures of corruption may only scratch the surfaceof much larger conspiracies; most corruption goes unreported.

One of the more prevalent forms of corruption is clientelism, or pa-tron-client relationships.4 In clientelism, private-regarding individuals usetheir public offices for the personal aggrandizement or favorable advantageof themselves and their friends and associates as a result of a complex net-work of personal or familial ties. A majority of states, from Southeast Asiato Africa to Latin America, have a long tradition of personal and/or fac-tional loyalties taking precedence over a commitment to public policies andeven constitutions. In some states, government jobs are therefore prizedcommodities, commanding allegiance to those in the position to distrib-ute them. As a result, government offices tend to be overstaffed with per-sons whose particularistic loyalties lie in relationships rather than institu-


tions, causing a precarious reliance on roles and relations rather than onrules and regulations. In other words, rather than being agents of govern-ment in their official capacities, individuals are the government.

For international villains, governments that acquiesce to or even fa-cilitate criminal transactions are ideal sovereigns. Other prime locations forcriminal groups are those in which the personal interests and loyalties ofpublic officials take precedence over most civic considerations. In such cir-cumstances, relations are based on a system of nearly unchecked power;there is a precarious reliance on persons rather than institutions. Indeed,where so-called leaders constantly jockey for position and control over ever-diminishing resources, and when political survival is based more on thedispensation of favors to loyal followers than on any public legitimacy,there is little room for the business of institutional government. Almosthalf of the world’s countries have been brought nearly to economic andpolitical ruin by misguided and corrupt leadership; estimated losses dueto corruption exceed some countries’ foreign debts.5 In such cases, corrup-tion and incompetence have degraded state institutions to the point thatthere is a chronic inability to deal with perceived social injustice and dep-rivations.

Corruption in Areas of Critical Vulnerability

Justice SystemsOne of the more serious consequences of corruption is felt in criminal jus-tice systems. Justice systems that are “defective” and unable to detect andprosecute criminals and terrorists tend to lead to a breakdown in society.Organized crime and terrorist groups are thus found on the darker side ofthe system of vested interests and factional struggle. If the infiltration andsubornation of a political system hinges on the use of the justice systemfor their own ends, international villains are well on their way to co-opt-ing the state. Indeed, a justice system under the control of organized crimi-nals and terrorists is probably the best of all possible environments for suchvillains. Hence, states that have a criminal justice system susceptible to cor-ruption are at the greatest risk of being commandeered by internationalrogues.

Additionally, in some countries, the coercive power of some sub-stategroups already rivals state law enforcement agencies. In Colombia, for ex-ample, members of some drug trafficking organizations and the 12,000strong Fuerzas Armadas Revolucionarias de Colombia (FARC), the largestterrorist group in Colombia, are better equipped and outfitted than arejustice officials or security forces. Criminal and terrorist groups frequentlyhave extensive intelligence networks that inform them of the activities ofthe police and military, many of whom they ultimately co-opt into theirfraternity. Police are paid to provide information on planned raids, whenarrests will occur, and how investigations will proceed. Prosecutors arebribed not to prosecute, judges not to convict, and penal officials not todetain criminals and terrorists who do end up in jail. Such impunity trans-lates to great power and leaves communities vulnerable to capricious rule.


As a result, for example, in Colombia, citizens in the regions where out-laws dominate are subject to as much arbitrary rule as exists in any authori-tarian state. Lack of liberty and personal safety are characteristic of bothauthoritarian government and corrupt states, but in the latter, groups otherthan the government employ the coercion.

In Iraq, attempting to rebuild a shattered justice system is all the moredaunting in the face of a political culture already accustomed to corrup-tion. Many entering the new Iraqi police force see it as an opportunity toreap the same monetary rewards and mete out the same brutal justice thatofficials did under Saddam Hussein. Arguably, the population’s continuedtolerance for corruption allows lingering vice to grow stronger where itshould be non-existent.6 Despite the creation of a National Commissionon Public Integrity and a ten-fold increase in police pay, corruption is anold habit that not only blocks true reforms in the justice sector but alsosparks much of the present insecurity and chaos.

While governments are supposed to monopolize coercion in society,in cases where there is pervasive and insidious corruption in criminal jus-tice systems, coercion becomes a competitive good. That is, if people do notperceive the law as being applied fairly at all times, they will tend to settlematters using other methods. The non-application of the law not only de-nudes the system of its authority, but it also opens the door for villains,usurpers, and vigilantes to mete out arbitrary justice as an alternative.

Security ForcesCorruption in security forces has particularly egregious effects. Criminaland terrorist groups depend on unimpeded cross-border movements, andso border guards, customs officers, and immigration personnel are notabletargets of corruption. For such figures, the bribes need not be high, as muchof what is required of them is to “look the other way” when contrabandand people pass. Military personnel are just as susceptible to bribery as ci-vilians, but the potential consequences are more serious. A small bribe of$100,000 to a commanding officer to stand by while a load of heroin tran-sits across an international border might prove irresistible. For the traf-ficker, the cost would be a small business expense. For a poorly paid of-ficer, however, the bribe would mean much more. In the long term, suchcorruption spreads, as does an attendant loss of morale and respect for thecommand structure. Bribes “hook” officers vulnerable to further suborna-tion and extortion for espionage and further criminal purposes. This sce-nario has been played out in a number of military corps throughout theworld with disastrous consequences.

The primary mission of most military forces is to deter war, to deterand defeat threats of organized violence to their citizenry, and to protectthe national security and integrity of their country. In fact, in many statesa country’s national security is only as strong as the people who stand watchover it. The military is generally perceived as one element of a nation’spower that complements the other instruments of coercion wielded by agovernment. If a particular society accepts corruption and the abuse ofgovernment, then the military cannot be expected to be exempt from such


low standards. The ultimate effect of corruption in military forces is com-promised national security, with criminals and terrorists operating at willand international relations on increasingly shaky ground.

The September 2004 terrorist attack by Chechen rebels at a school inthe town of Beslan in the Russian republic of North Ossetia that left 338people dead is illustrative of the sinister side of corruption in securityforces. Since the collapse of the Soviet Union, corruption in the Russianmilitary has become almost legendary and reflects the corruption that per-vades Russian society. Military personnel have accepted bribes not only toallow convoys full of stolen weapons to pass uninspected but also to sellweapons and explosives to criminals. The tragedy in Beslan was the culmi-nation of numerous terrorist incidents that “… demonstrates more thansimply that Russia’s security services are incapable of fighting modern ter-rorism; it suggests that their ineptitude and corruption are actually stimu-lating terrorism.”7 Indeed, only a few days prior to Beslan, not only weretwo Russian airliners destroyed in midflight by female suicide bombers whobribed their ways onto the planes, but a Moscow metro station and a busstop were also bombed.8

Trade and Financial SectorsA corrupt financial sector is an essential service for organized crime andterrorist groups. If a state is a haven for money laundering and manipula-tion, the central government may suffer from any of three things: a lax at-titude toward money laundering, attempting to attract foreign capital re-gardless of its source, and corruption already so widespread that criminalgroups must suborn only the right people to obscure and launder theirmoney. Some states become money-laundering havens due to bank secrecylegislation and instruments such as asset protection trusts, “economic” citi-zenship, tax advantages, and licensed banks with neither personnel nor aphysical presence in the country. Significant government corruption exac-erbates these conditions, and villains exploit it to counter international ef-forts to halt these practices. Lawyers, accountants, and bank managers alsoplay their part in disguising and legitimizing funds in such states.

A number of states continue to act as safe havens for money laun-dering and manipulation.9 According to the Financial Action Task Force(FATF), obscure island nations, such as Antigua and Barbuda, Aruba, Cay-man Islands, the Bahamas, Turks and Caicos, and Vanuatu, undermine ef-forts to strengthen the global financial system through their lack of coop-eration and low quality supervision of financial transactions. These sunnyvacation spots provide hospitable locations for ill-gotten financial gain.

A country’s financial system may become as dependent on the steadyinflux of large amounts of dirty money as its individual leaders are depen-dent on regular criminal kickbacks and bribes. Complying with interna-tional money laundering regulations would presumably mean a significantloss of both foreign exchange to some states and income augmentation toselect individuals. It would appear that the benefits of rogue capital for acorrupt minority continue to offset the damage done to international repu-


tations. Or perhaps it means that the international community has not beenforceful or explicit enough in dictating an end to such entrepreneurship.

The African Union estimates that $148 billion, or approximately one-quarter of Africa’s gross domestic product, is lost to corruption each yearby the continent’s economies.10 The U.N. Convention Against Corruptionunderscores the fact that corruption distorts the market, wastes scarce re-sources, and leads to increased poverty. Developed countries are just as sus-ceptible to such villainous manipulations as are developing ones; no stateis immune from this scourge. The difference is in the complexity of thecampaigns. In some states,corruption is an open andacknowledged part of do-ing business, but it also ex-ists in countries that maytake pride in being clean. Inthe European Commission,for example, bribery report-edly adds between 10 and20 percent to the cost ofcontracts.11 The case of U.S.contractor Halliburton, winner of a multi-billion dollar no-bid contractfrom the U.S. government for work in Iraq, is another clear example thatcorruption knows no borders. The biggest loser in this stunning miscar-riage of justice will be the Iraqi people, who will have to wait longer fortheir country to be reconstructed while corrupt elites pave their own drive-ways with the diverted resources.

Corruption and Terrorism

The problem of corruption is only one of many difficulties for various coun-tries struggling to cope with economic development, to minimize the grow-ing pains of democratization, and to coexist with numerous disaffecteddomestic groups. The most recent bad news is that the war on terrorism isslowly shifting to countries where the “climate” is more favorable for ter-rorists to hide. Militant Islamic movements such as Laskar Jihad in Indo-nesia, Abu Sayyaf in the Philippines, the Jemaah Islamiyah in Singapore,the Pattini United Liberation Organization in Thailand, and the MalaysianMujahideen all have reported ties with each other and some, if not all, toal Qaeda.12

Some Asian countries, for example, are suitable locales for villains toset up shop. Many Asian states have their share of mafias, warlords and ter-rorist groups. “Money politics” is a reality; some of these countries’ mostpowerful politicians allegedly owe their positions to their links with theunderworld.13 Activities of this area’s mafia groups include extortion, gam-bling rings, prostitution, loan sharking, piracy, smuggling of humans, anddrug and weapons trafficking.

A number of regions in the interiors of Burma, Thailand, Indonesia,and the Philippines are beyond the control of the central governments of

The African Union estimates that$148 billion, or approximately one-quarter of Africa’s gross domesticproduct, is lost to corruption eachyear by the continent’s economies.


each country, and non-state groups, such as terrorists, insurgents and or-ganized crime groups, have all but replaced state authority. Organized crimegroups such as the Wa in northern Burma have established a “state withina state,” complete with an organized infrastructure and well-grounded po-litical base that virtually guarantees their impunity. Because the govern-ment in Rangoon is financially and militarily unable to tackle this group,the Wa live like barons of medieval feudal fiefdoms, with only their whimas a guide for the dispensation of their largesse and their justice.14

In many of these regions, terrorist groups have a definite advantageover organized crime in their ability to hijack governments. They have theadded invaluable dimension of religious or ideological popular appeal.Their subornation of officials may not constitute a significant expenditurerelative to other costs. If exposed, such corruption may not seem so del-eterious to society from the vantage point of public opinion. After all, pub-lics often see terrorists as having important, overarching and long-term so-cial goals that outweigh any negative effects their corrupt and violentactivities might have.

To fund both the subornation campaigns and their terrorist conspira-cies, terrorists must raise money. One method is the use of charities spreadacross many countries, but they also engage in drug trafficking, kidnap-ping and extortion, fraud, smuggling of arms and contraband, and othercriminal operations. Just as organized criminal groups pay to avoid pros-ecution by law enforcement, so terrorist groups must also pay so that au-thorities overlook their operations.

Attacking Corruption

In a press release shortly after the Sep. 11, 2001, attacks on New York andWashington, Interpol’s chief, Ronald Noble, said that the fight against ter-rorism cannot be won on a military battlefield alone, and that “[t]he mostsophisticated security systems, the best structures, or trained and dedicatedsecurity personnel are useless, if they are undermined from the inside by asingle act of corruption.”15 Much of the battle against the trans-nationalthreats posed by terrorists and organized crime groups is still waged withinsovereign states. Yet the international community is feeling many of thenegative consequences of corruption. As a result, there have been a num-ber of meetings, multilateral agreements and pronouncements by interna-tional and regional bodies on this subject.

The Asian Development Bank (ADB) has collaborated extensively withthe Organization for Economic Cooperation and Development (OECD),among other things, to end the tax deductibility of bribes and to criminalizethe bribery of foreign officials. Both organizations agree that attacking cor-ruption simply as a criminal problem cannot end its tenure as a facilitatorfor organized crime and terrorist groups. The African Union and the Or-ganization of American States also have declarations for combating cor-ruption. In all these documents, an overall strategy of promoting good gov-ernance through structural, legal and administrative reforms is a major


cornerstone for combating malfeasance on the part of both citizens andgovernment officials. Further, economic development and institution build-ing will be just as important to rooting out terrorists and organized crimi-nal groups, as will military and law enforcement measures.

The International Monetary Fund and the World Bank, both of whichtie anti-corruption efforts to their loan programs, provide technical assis-tance to those countries that combat corruption. The IMF Code of Good Prac-tices on Fiscal Transparency (2001) stresses good governance in terms of fis-cal policy accountability and transparency of government activities. Thecode sets objectives for principles and practices, distilled from the IMF’sknowledge of governance issues in member countries. Non-governmentalorganization Transparency International also provides extensive guidanceto states combating corruption and money laundering. It publishes a dailybulletin on corruption—in essence using publicity and peer pressure to“shame” governments into implementing anti-corruption programs. Trans-parency International has focused on exposing the trail of corruption andmoney laundering related to terrorism.

This approach may be the best plan of attack. Many of the anti-cor-ruption agreements and measures have existed for decades and have notmade a dent in the problem, in terms of changing either the villains whorob their states or those who are willing to pay for such complicity. Rather,the most successful instrument for attacking rampant corruption in anynumber of countries has been the media. So-called “name and shame” cam-paigns in the press appear to have the greatest effect, raising public aware-ness that those in power not only are selling their countries to terroristsand criminals but are also stripping the country of its resources and trea-sure. Publicity focused on corruption allegations has brought about thepolitical demise of corrupt leaders such as Guilio Andreotti, NoboruTakeshita, Alberto Fujimori, and Carlos Salinas.

Even more surprising is that political adversaries use such campaignsto attack each other as a sure-fire method of destroying the credibility oftheir opponents. Such claims have curried favor with the electorate in Italy,France, Mexico, Costa Rica, Thailand, Japan, and Nigeria, to name just afew. This is a sign that even political candidates understand that the pub-lic is disgusted with the misuse of public office, the preferential treatmentgiven to criminals, and the fat cats living off the proceeds of public trust.Politicians who were once unable to differentiate their ideologies are nowrunning on campaigns that distinguish their own “open, honest and trust-worthy” parties from those of their “amoral, dishonest and corrupt” op-ponents. Unfortunately, once in power, those who campaigned on scrupu-lous honesty will not necessarily restrain their moral turpitude. Theentrance of corruption into the political agenda, however, is a step in theright direction.

Conclusion

Organized criminals and terrorists target weak and corruption-riddledstates for their safe havens. Once situated, these groups continue to work


the system by assembling an extensive web of compliant officials whom theysuborn to leave them alone, to facilitate their operations and financialtransactions, to supply them with information on government plans, andto provide them protection. In this manner, they erode whatever legitimacyis left of institutions, corrode the rule of law, and undermine the ability ofcentral governments to cooperate on global agenda items. The continueduse of corruption by international villains is no longer an internal stateproblem but is also a matter of international security.

Corruption is not limited to region, culture or state of development.Every country has clientelism, patronage and greedy politicians, to somedegree. Countries that appear to have very little in common historically,politically and economically are often similar in their experiences with cor-ruption. Most countries appear willing to collaborate, share expertise andintelligence, conduct joint training, and work more closely with inter-gov-ernmental organizations. Structural mechanisms that detect corruption,punish it, and limit opportunities for corrupt behavior will assist in theclean-up effort. Over time, the pressures facing countries to make their sys-tems more transparent are bound to increase. Using sovereignty as a veilbehind which to hide malfeasance is no longer sufficient, especially in theface of threats of catastrophic terrorism.

At the same time, the popular demands for governments to becomemore transparent will also intensify. The impetus for these changes willcome from grassroots movements spurred by media campaigns. Publiciz-ing and scrutinizing the behavior of public servants often acts as a signifi-cant deterrent to would-be abusers of power.

Notes

1 “Transparency International Newsletter,” December 2001.2 Somrüdee Nicro, “Thailand’s NIC Democracy: Studying from General Elections,” PacificAffairs 66, no. 2 (Summer 1993) 176.3 Joseph Nye, “Corruption: A Cost-Benefit Analysis” in Arnold J. Heidenheimer, ed., PoliticalCorruption Handbook (New York: Transaction Publishers, 1989) 967–968.4 Eduardo Diaz, Clientelismo en Colombia (Bogotá: Ancora, 1986).5 Introductory Proceedings ADB/OECD Conference on Combating Corruption in Asianand Pacific Economies, Asian Development Bank, 1999.6 “A Culture of Corruption,” Los Angeles Times, Feb. 1, 2004.7 Victor Yasmann, “Analysis—Russia between Terror and Corruption,” Radio Free Europe,Sep. 26, 2004.8 “Chechen Terror Haunts Russia,” BBC News World Edition, Sep. 1, 2004.9 The Financial Action Task Force (FATF) categorize jurisdictions in terms of theirfinancial supervision, cross-border cooperation and transparency.10 “Global Grease Trade,” The Wall Street Journal, Jul. 28, 2004.11 Ibid.12 “Militancy on the Rise in South-East Asia,” Guardian Unlimited Jakarta Dispatch, Sep. 19,2001.13 “Politics and Patronage: Democratic Ideals Compromised,” Global Corruption Report 2001,Transparency International, 2001, 33.14 Kieran Cooke, “Burma’s Powerful Drug Industry,” BBC News, World: Asia-Pacific, Jun.6, 2000.15 Ronald K. Noble, Interpol Press Release, Oct. 8, 2001.

Documents

Corruption and International Security