The CGC Act would require the State Department to disseminate a report that “summarizes the extent of corruption in countries worldwide and assigns tiered classifications based on certain minimum standards of governmental efforts to combat corruption.” If a country falls into the bottom tier (“making de minimis or no efforts to comply with the minimum standards” to prevent corruption), a number of measures would be at the U.S. government’s disposal, including “conducting corruption risk assessments, creating corruption mitigation strategies, use of anti-corruption clauses in assistance contracts, inclusion of claw-back provisions in assistance contracts, establishing investigative mechanisms for allegations of misappropriated assistance, and implementation of democracy and governance programs that include anti-corruption components.”
The bill is very much in keeping with our support for, in essence, an “economic Magnitsky Act” modeled on the original Magnitsky Act, which seeks to identify and sanction individuals who commit human rights atrocities. Our preference would be to freeze assets and prevent government kleptocrats from accessing U.S. financial systems. “First, it publicizes the information and will be used by domestic critics of these regimes,” explains former ambassador Eric Edelman. “Second, in some cases governments will actually try to clean up their act in order to raise their standing among the tiers for both domestic and international relations reasons.”
If not specifically aimed at Russian President Vladimir Putin’s corrupt regime, the CGC Act nevertheless would provide a valuable tool for exposing, shaming and thereby undermining Putin. He would be exposed, along with his plutocratic pals, as a thief robbing his country blind and directly responsible for the misery of the Russian people.
In remarks on Thursday at the Council on Foreign Relations, Cardin noted the unusual problem the Trump administration faces in standing up to corrupt regimes, given that “the president of the United States can profit from being president of the United States, his business interests.” He explained, “That makes it very difficult to be able to stand up for good governance and anti-corruption — or on transparency, [when] the president [is] not releasing his tax returns.” (Perhaps Congress might insist on extending transparency rules to the U.S. government, including requiring the president to release his tax returns and undertaking a rigorous effort to enforce the Constitution’s emoluments clause. Just a thought.)
Cardin is optimistic about the chances of passing the CGC Act, because there are “champions on both sides of the aisle on good governance and anti-corruption and human rights. We have bipartisan support for the introduction of the bill … It was John McCain who insisted that anti-corruption be part of Magnitsky.”
The idea is a popular one among those looking to counter Putin’s international aggression and domestic repression. “Naming and shaming is one of the most powerful tools the U.S. has diplomatically,” Max Bergmann of the Center for American Progress tells me. “In the context of Russia, corruption is not just endemic but a core component of their political economy and serves as a key foreign policy tool that enables the Kremlin to exert influence around the world. This law could therefore complicate Russia’s ability to exert influence through corruption, especially in Eastern Europe, where countries want U.S. assistance and want to avoid being seen as corrupt by their public.” He adds, “By naming and shaming countries that are complicit in Russian corruption efforts, this law would impose a political cost for corruption. Leaders will need to think twice before accepting Russian money.”
Alina Polyakova of the Atlantic Council also expresses enthusiasm for this approach. “Russia under Putin is a kleptocracy. The Russian state benefits only those close to the Kremlin at huge cost to the Russian people. The Kremlin uses corruption to wield influence over Eastern European countries and undermine their democracies,” she says. “Indeed, kleptocracy is Russia’s best known export after hydrocarbons. This bipartisan legislation is an important step in undercutting kleptocratic regimes.” However, she argues that “there is a great deal more that Congress could and should do, such as tracking down money launderers who use our financial institutions to hide their illicit wealth.”
In sum, the co-authors of the bill have devised an ingenious tool for hitting Putin and other kleptocrats where it hurts — in their wallets. As Edelman puts it, “Overall, I think this would be a very positive thing since kleptocracy has emerged as such a big challenge and the current Administration in particular seems inclined to turn a blind eye to the problem.” President Trump would go a long way toward dispelling the perception that he is Putin’s patsy if he were to get on board with a bill exposing the Russian president for what he is — a corrupt thug.