The Kleptocracy Club – The Atlantic

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Since the earliest days of the republic, America’s international friendships have shaped domestic politics. And some of those friendships helped America strengthen its democratic principles. So what happens if America’s new friends are autocrats? John Bolton, former national security adviser for President Donald Trump, and Senator Sheldon Whitehouse of Rhode Island argue that if America no longer leads the democratic world and instead imports secrecy and kleptocracy from the autocratic world, American citizens will feel even more powerless, apathetic, disengaged, and cynical.

This is the fourth episode of Autocracy in America, a five-part series about authoritarian tactics already at work in the United States and where to look for them.

The following is a transcript of the episode:

Anne Applebaum: This is John Bolton, the former national security advisor for President Donald Trump.

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Peter Pomerantsev: Anne, even the idea that America might leave NATO was in and of itself pretty destabilizing for global security.

Applebaum: Right. NATO was created to be a deterrent—to prevent wars, to stop a Soviet invasion of Europe in the past, a Russian invasion now—and it was built around a promise of collective defense, that if one of the allies is attacked, the others will come to their aid.

But over the past 75 years, it also came to represent something else. The alliance helped cement the deep economic, cultural, and political ties between the United States, Canada, and Europe. And it worked, mostly because most of the members shared the same values. But as Secretary Bolton told me, the most successful alliance in history almost didn’t make it through the first Trump administration.

Applebaum: Trump’s threat implied that he would not honor the promise of collective defense. It also created discomfort because everyone understood that it reflected something deeper: The emergence of a different kind of America, an America that could turn away from its democratic partners and, instead, draw closer to the autocracies—a completely different vision of America’s role in the world.

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Pomerantsev: Well, even though it was new to the U.S., it’s a move straight out of the autocratic handbook.

Applebaum: I’m Anne Applebaum, a staff writer at The Atlantic.

Pomerantsev: I’m Peter Pomerantsev, a senior fellow at the SNF Agora Institute at Johns Hopkins University.

Applebaum: This is Autocracy in America.

Pomerantsev: This isn’t a show about America’s future. There are authoritarian tactics already at work, and we’re showing you where. There’s the rise of conspiracy theories, widening public apathy, politicized investigations, the takeover of the state.

Applebaum: And in this episode: America joining the kleptocracy club.

Peter, I’ve always thought of the United States as a country that leads an alliance of like-minded democracies. And I never questioned our promise to defend them, in Europe as well as Asia. We have military bases in Germany, Italy, Japan, more recently in Poland for exactly that purpose. But lately, I started thinking about how our alliances and our friendships around the world and our promises to help defend people also help strengthen our democracy here at home.

Pomerantsev: Historically, it is kind of true. Britain is one of America’s oldest allies. And one of the countries America has this long, supposedly special relationship with, Britain, has had a big influence in America. The British abolished slavery before America did, for example, and a lot of British abolitionists inspired the rise of American abolitionism. Frederick Douglass spent time in Britain, as did many other abolitionists. And American and British campaigners against slavery supported one another. I think that mattered.

Applebaum: Yeah, we also forget how, even more recently, American thinking has been affected by our awareness of our international role and reputation. Consider what the Justice Department was saying at the Supreme Court during the 1954 Brown v. Board of Education case.

They filed a brief arguing that desegregation was in the U.S. interest, not simply for domestic reasons and not simply because it was right, but also because racist laws prompted, and I quote, “doubts even among friendly nations as to the intensity of our devotion to the democratic faith.”

Pomerantsev: That’s quite a phrase: “our devotion to the democratic faith.”

Applebaum: That’s what I mean by the influence of our allies. America put democracy at the center of its foreign policy, but it was also a part of our national identity: This is who we were. This is who we want to be. This is how we want to be seen. These are the countries that we have the closest relationships with. Other democracies, other republics—they can be constitutional monarchies. They can have parliaments instead of congresses. But these are our friends, and this is our world. And I think Americans felt it was important to remain in that group, and that had consequences for domestic policy as well.

Pomerantsev: But just as there is a network of countries who push each other towards ever more democracy, there’s also a network of autocratic countries whose leaders are kleptocrats, essentially. They’re governments who share the same interest in stealing and hiding money—

Applebaum: —and oppressing or arresting anybody who tries to stop them.

Pomerantsev: Right. I mean, they aren’t connected to one another by ideology. They’re not all—I don’t know—theocracies or communist regimes, but they are united in their need to undermine the rule of law and repress their own people, as a result of wanting to steal money.

Applebaum: Absolutely, and countries have moved from one camp to the other in the past. Look at Venezuela.

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Applebaum: Leopoldo López is a former mayor of Chacao, a municipality of Caracas. He saw things begin to change there in 2006.

Applebaum: Venezuela was once one of the most successful democracies in our hemisphere. It was the richest country in South America and on a trajectory to become even richer. But when Hugo Chavez was elected leader—democratically elected—he went on to slowly dismantle Venezuelan courts, to break up the media, and, eventually, to undermine the economy. And Venezuela aligned itself with the group that I like to call Autocracy, Inc., or Autocracy, Incorporated.

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Applebaum: López not only witnessed the decline of Venezuela, the end of Venezuelan democracy, but as a long-time prominent leader of the Venezuelan opposition, he experienced it as a political prisoner in solitary confinement—as a leader behind bars. He now lives in exile, where he writes and speaks about the rise of the modern autocratic, kleptocratic network and also about how Venezuela became part of it. He told me that Russia wasn’t the only country that Chávez made deals with.

Applebaum: Peter, López is talking about billions of dollars pouring into Venezuela, but although it was described as a Chinese investment in the country, it didn’t ever really translate into improving the well-being of the Venezuelan people.

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Applebaum: Peter, Iran came for business agreements, for economic exchanges, even some involving nuclear energy. And Iran wasn’t just funding Venezuela. The Venezuelans also began helping the Iranians.

Applebaum: Venezuelans voted in huge numbers against Maduro in July’s elections, despite his enormous campaign of propaganda and harassment. When López and I talked, I had asked him how Maduro managed to stay in power for so long.

Pomerantsev: Anne, you know Srdja Popovic. He’s an activist. He helped overthrow Serbia’s dictator Slobodan Milošević in 2000.

Hearing you speak with Leopoldo López and his descriptions of the changes in Venezuela over the last 20 years made me think of the work Popovic has been doing. He studies how dictators function in the Middle East, Latin America, and Asia. And, Anne, Popovic’s research supports the thesis of your new book Autocracy, Inc., and how you’ve described this club of autocratic leaders.

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Pomerantsev: So what Popovich describes here, Anne, is an authoritarian network that functions as a corrupt corporation, basically.

It’s funny—I saw this for myself when I was living in Moscow. It was in the mid-2000s. I remember walking down the high street, down Tverskaya, and it was full of these glitzy shops everywhere, and everybody was dressed in a very glamorous way, and the city was sort of bankers and lawyers, like the financial district of many Western capitals.

And every couple of meters, there was a bank. And I was like, What on earth are all these banks doing? I remember going into one and trying to open, like, a personal checking account. And they just stared at me like an absolute moron, like, Why would you open a personal account in this bank?

So I started asking people that I knew, Russians, What are all these banks doing? And they just started laughing, going, Well, they’re not banks the way you understand banks; they’re money-laundering vehicles. They’re vehicles tied to this minister or that businessman, and they open loads of these banks, or pseudo banks, and move their money through them and then move them abroad.

But they were everywhere. This wasn’t like one little money-laundering exercise. You know, the whole city was basically one big money-laundering exercise. And I remember thinking, I don’t understand the model of this regime very well at all.

Applebaum: And you didn’t understand it for a reason. You didn’t understand it because it was deliberately made incredibly complicated. Ordinary citizens, ordinary people aren’t meant to know where the money is or what the bank does. They’re not meant to have any influence or understanding or knowledge of politics at all because the essence of modern autocracy and modern dictatorships is secrecy.

You know, they have ways of stealing and extracting money. They hide the money in different places around the world: It’s done through anonymous companies. It’s done through shell companies that are able to move money very quickly from one jurisdiction to another—so from Cyprus to the Virgin Islands to the Bahamas to Delaware and back again in a blink of an eye.

It’s very, very difficult to trace this money. It’s very hard for civil servants or police officers or white-collar-crime investigators to find it. It’s very, very hard for journalists to find it and understand it. And you aren’t meant to know, and you’re meant to be confused by it.

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Pomerantsev: Up until now, Anne, we’ve been talking about how these things work in other places, but it’s here in the U.S., too.

Applebaum: Yes. Dark money, hidden wealth, untransparent purchases, anonymous companies—these aren’t just things that exist abroad on palm-fringed Caribbean islands or in some distant dictatorship.

More on that after the break.

[Break]

Applebaum: Peter, when you were talking about the empty banks that weren’t really banks, I immediately thought: American real estate.

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Applebaum: Until recently, realtors here were not required to closely examine the source of the funds being used to buy property, and it was perfectly legal for anonymous companies to acquire real estate providing no information about the owners, at all. And that’s why the sector became a magnet for foreign wealth.

Applebaum: Casey Michel is the author of American Kleptocracy.

Applebaum: Peter, that’s how modern autocracies begin: not with a coup d’état but by the slow emergence of a secretive elite who are able to control financial resources and who can then hide their wealth, take it out of the country, do what they want with it without anybody else knowing.

Pomerantsev: They’re not limited by the same forces that you and I are.

Applebaum: Yeah, a lot of journalists have tried to come up with names for it— Moneyland or Kleptopia. You know, this alternate world in which the normal rules that apply to the economy that you and I live in don’t apply to them.

Pomerantsev: I think we underestimate how much that degrades democracy.

Pomerantsev: When you live in this world where you don’t know which money, which powerful figures are behind which political decisions that are being made around you and influence you—when it’s all sort of wrapped in this sort of mist—then you feel kind of helpless. You feel you have no agency. You feel you don’t matter. You feel as if you have no say.

Applebaum: And it’s a problem that’s only getting worse.

Applebaum: And, Peter, it probably shouldn’t be surprising that what is, in effect, a new political system has also given rise to a new kind of politician.

Applebaum: That’s John Bolton again talking about his old boss Donald Trump.

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Applebaum: Trump has been a sympathetic ear for complaints like these. He’s seemed keen to be friends, for example, with the dictator of North Korea, Kim Jong Un. Kim Jong Un, as we know, regularly holds military exercises designed to intimidate South Korea. The U.S. leads joint exercises with South Korea to communicate power and military readiness back at North Korea. But when Kim Jong Un allegedly expressed frustration over those exercises—

Pomerantsev: Anne, the thing is, when governments start to act like these self-interested corporations, it doesn’t just make these governments less efficient and less positive for the people; it also leads to a fundamentally different type of government.

I mean, think about it: Once you have people running the country who use it to enrich themselves, then they don’t want to let go of that resource ever again. And they find ways to make sure they, essentially, never leave power. They rig elections. They curtail rights of anyone who wants to challenge them. They want to repress people who ask too many questions about where their money comes from. And then they institute a system of surveillance and control to make sure that repression succeeds.

Pomerantsev: Daria Kaleniuk is the executive director of Ukraine’s Anti-corruption Action Centre.

Applebaum: Peter, what Kaleniuk is describing in Russia, it sounds like exactly the same thing that Ukrainians were fighting against in their own country over the last decade.

Pomerantsev: Exactly. At that time, Ukraine was also starting to head in the direction of kleptocracy.

Pomerantsev: Anne, as you know, the revolution became deadly. About 100 people died—some of them from corrupt, Russian-allied police, who opened fire on protestors. But the revolution of dignity succeeded.

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Applebaum: So for Kaleniuk, fighting for democracy and fighting against corruption was the same thing?

Pomerantsev: For her and for many in Ukraine.

Pomerantsev: So, Anne, fast-forward to the start of the war: In revenge, and in its desire to take away Ukraine’s freedom and impose a corrupt, puppet government controlled by Moscow, Russia invaded, first in 2014 and then at an even grander scale in February 2022. I’m not sure Ukraine would have been able to survive these invasions without America’s help.

And so this is the central question and one I asked Kaleniuk: What happens if America decides it no longer cares about fighting corrupt, authoritarian regimes?

Applebaum: Peter, Ukraine’s two-decades-long flirtation with grand-scale corruption left it really vulnerable. Many of the country’s elite businessmen were interested in themselves and their profits, and not the country. And that opened the door both for the hollowing out of the institutions of government and of the state but also the weakening of the military and the security apparatus. And that was what made Ukraine so vulnerable to Russian invasion.

Pomerantsev: But as you know, Ukraine is fighting heroically against this invasion. I sort of feel that Ukraine is fighting and dying for ideals that Americans seem ready—in some way—to walk away from.

There’s two interlinked stories here. There’s Ukraine’s battle for freedom, for democracy, and against strategic corruption. And you have America, which, for the moment, is still supporting Ukraine in this cause but is also sort of fighting the temptation to become more corrupt and less democratic. And if America loses that battle inside, then Ukraine and, perhaps, other vulnerable democracies would likely lose their battles as well.

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Applebaum: Autocracy in America is hosted by Peter Pomerantsev and me, Anne Applebaum. It’s produced by Natalie Brennan and Jocelyn Frank, edited by Dave Shaw, mixed by Rob Smierciak fact-check by Yvonne Kim. Claudine Ebeid is the executive producer of Atlantic audio, and Andrea Valdez is our managing editor.

Pomerantsev: Autocracy in America is a podcast from The Atlantic. It’s made possible with support from the SNF Agora Institute at Johns Hopkins University, an academic and public forum dedicated to strengthening global democracy through powerful civic engagement and informed, inclusive dialogue.

Applebaum: Peter, the things the Ukrainians have done to fight back, to preserve their freedom, they’re evidence of the work it takes to build a democracy and to keep it.

Pomerantsev: But in America, freedom is actually a double-edged sword.

Pomerantsev: Next time on Autocracy in America: how “freedom” can be the enemy of democracy.

Applebaum: We’ll be back with more on that next week.