Rise of populist autocrats driven by corruption


By James A Goldston * –  Project Syndicate

Populist electoral victories around the world in recent years have led many to conclude that liberal democracy is under assault. But the arrest this week of Malaysia’s former prime minister on corruption charges is one of several signs suggesting that widespread predictions of the global demise of liberal democracy are premature.

The implication of the doom-and-gloom view is that liberal democracy’s defenders cannot reclaim the moral high ground until they have re-examined their own political and economic assumptions. Yet it is a mistake to think that the rise of autocrats is all about ideology, or that it represents a widespread rejection of democracy, liberalism, or human and civil rights.

Today’s elected demagogues are motivated not so much by principle as by power and greed – they are in it for themselves, their families, and their cronies. Restoring balance to our off-kilter world requires that we expose the rank corruption at the heart of the new illiberalism.

In Hungary, Prime Minister Viktor Orbán’s friends and family members have grown rich on government loans and public contracts. In Orbán’s home town of Felcsút, one crony has overseen the construction of a soccer stadium that seats 4,000 people, even though the total population of the town is just 1,600. Whereas “corruption before 2010 was rather a dysfunction of the system,” notes the watchdog group Transparency International, “today, it’s a part of the system.”

In Turkey in 2014, people close to President Recep Tayyip Erdogan, including several senior members of his ruling Justice and Development Party (AKP), were implicated in a money-laundering scheme that purportedly sought to bypass US-led sanctions on Iran. The scandal led to the resignation of four cabinet ministers, and to the release of audio recordings in which Erdogan allegedly can be heardtelling his son to dispose of millions of dollars of ill-gotten funds. But Erdogan dismissed the allegations as a setup, and Turkish prosecutors eventually quashed the case.

In Malaysia, former prime minister Najib Razak and his associates now stand accused of pillaging more than US$4.5 billion from 1Malaysia Development Berhad (1MDB), a government investment fund. According to the US Department of Justice, the pilfered money was used to purchase high-end real estate in Manhattan, mansions in Los Angeles, paintings by Claude Monet and Vincent van Gogh, a corporate jet, a yacht, and other luxury goods.

And in the United States, of course, questions continue to swirl around the private interests of President Donald Trump and his family, and how they may bear on his behavior in office.

The irony is that anger over corruption played a critical role in fueling the current wave of populist autocrats. So, to defend liberal democracy, we must reclaim the anti-corruption mantle

The irony is that anger over corruption played a critical role in fueling the current wave of populist autocrats. So, to defend liberal democracy, we must reclaim the anti-corruption mantle.

By redistributing stolen assets from political and corporate thieves and their legal and financial enablers, anti-corruption campaigns do not just hold the powerful to account. They can also address inequality – and thus the widespread frustration that populists have exploited.

But fighting corruption also means shining a spotlight on – and prosecuting – those who threaten, kill, or otherwise thwart journalists working to expose abuses of power. Freedom of expression and other fundamental rights are not elitist luxuries, as authoritarians claim. They are indispensable for safeguarding free societies.

Moreover, a concerted campaign against corruption could serve as a unifying force in countries with deep political divisions. While a majoritarian government can ride roughshod over the interests of minorities, corrupt regimes steal from everyone. That is why corruption has provoked mass protests from Bucharest to Brasilia over the past year.

To be sure, those in power can turn anti-corruption campaigns into a political tool. In China, President Xi Jinping has made deft use of anti-corruption purges to eliminate political adversaries and secure near-absolute power. But this is all the more reason for proponents of liberal democracy to redouble their own efforts to combat violations of the public trust.

Fortunately, those efforts already have a strong track record. In the US, four decades of increasingly robust prosecutions under the Foreign Corrupt Practices Act have punished misconduct around the world and recovered billions of dollars in stolen assets. And despite Trump’s own long-standing criticisms of the FCPA, he has yet to blunt its enforcement activities (though that may yet happen).

Likewise, in France, prosecutors recently charged a former president and a leading business tycoon with large-scale corruption in Africa. In the United Kingdom, the government has just adopted rules requiring that all British overseas territories – notorious havens for dark money – publicly list the real owners of registered companies by the end of 2020. And in Spain, the long-ruling Partido Popular recently lost a no-confidence vote after a criminal investigation of financial malfeasance that sent its treasurer to prison.

But despite these signs of progress, more action is needed. Anti-corruption enforcement remains uneven across different jurisdictions. To address transnational financial transactions, we must build stronger international networks of prosecutors and investigators.

At the same time, more governments should follow the UK’s example, by ending the practice of “beneficial ownership” by secret third parties. Owners of some of the most expensive apartments in New York City have gone to great effort – much of it legal – to keep their identities hidden, by registering through trusts, limited liability companies, or other entities.

More broadly, public and private donors should bolster their support for civil-society organizations and independent media. These institutions can track and expose corruption, explain how it implicates powerful political figures, and push state actors to sanction those responsible.

Reining in corruption will not be easy, given that many economies are dependent on investment flows linked to criminal activity. But the consequences of doing nothing are clear. Corruption is a primary driver of populism and the retreat from liberal values.

So the next time people ask you what happened to liberal democracy, tell them to follow the money.

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*James A Goldston is the executive director of the Open Society Justice Initiative. Copyright: Project Syndicate, 2018. www.project-syndicate.org

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Annex:

The ‘Stop Soros’ Bill: Strong Drawback for NGOs in Hungary

By Carmen Arroyo and Emily Thampoe

UNITED NATIONS, July  2018 (IPS) – On World Refugee Day June 20, the Hungarian Parliament passed the ‘Stop Soros’ bill which is aimed at criminalizing groups who support refugees and other types of undocumented immigrants.

The government also proposed a 25% migration tax on any organization which deals with immigration in any way. With these measures, the nonprofit sector is experimenting a full drawback in the country.

Aron Demeter, the Media Manager of Amnesty International Hungary, told IPS that this bill “might have a chilling effect on the wider civil society in Hungary”.

This bill comes at a tumultuous time, what with similar ideas and protocols being discussed within the United States. Also just this week, dozens of representatives from refugee-led organizations met in Geneva with UN High Commissioner for Refugees (UNHCR) for the first Global Summit on Refugees, during which they have been developing structures for a global network of refugees.

In Hungary, the sentiment is the contrary from that of the United Nations. The ‘Stop Soros’ bill is named after a notable philanthropist and financialist George Soros, who is known for being involved with Hungarian rights organizations.

Abroad, Soros has been known to support American progressive political issues, even establishing the Open Society Foundation, which in the foundation’s words works to, “build vibrant and tolerant societies whose governments are accountable and open to the participation of all people”.

Led by the conservative government of prime minister Viktor Orban and its party Fidesz (Hungarian Civic Alliance), the Stop Soros law includes prison time for groups that help illegal immigrants get documents to remain in the country and limitations for NGOs to prevent them of assisting in asylum cases.

Along with these measures and the aforementioned law, the Parliament approved a constitutional amendment which said that foreigners cannot stay in Hungary.

While the bill has not been signed and enacted yet, it will be rather impactful when it is law. According to Amnesty, these new additions to Hungarian law, “pose a serious threat to the right to seek asylum; the freedoms of association, assembly, expression, and movement; the right to housing and associated economic and social rights; and the right to be free from discrimination, in violation of international human rights law and regional law”.

Charlie Yaxley, UNHCR Spokesperson for Asia and Europe, told IPS: “It is our concern that these laws will further inflame what is already a hostile public discourse around refugees, asylum seekers, and migrants and will fuel xenophobic attitudes.”

Hungary has been restricting its immigration policies since the start of the refugee crisis, and with the reelection of Fidesz last April, the country is willing to pass more restrictive legislation in order to protect its Christian identity.

However, with these measures Hungary is slowly drifting away from Western Europe, and the international community is outraged by it. The international system, led by the United Nations, has expressed its discontent with the bill.

Demeter, from Amnesty International, said “Many international actors from the UN, CoE, EU or other stakeholders have openly criticised the adoption of the law and the government’s anti-NGO campaign. We expect the European Commission to launch an infringement procedure and – in case their assessment is the same as ours – take it to CJEU.

“We also expect that MEPs – the EP plenary is going to vote on the possible launch of the Article 7 against Hungary in September – will deem this bill as one of the clear signs that the Hungarian government is systematically neglects the core European values and rules”.

When asked for Amnesty’s views on the present bill, Demeter responded: “The recently adopted STOP Soros is a new low and it “perfectly” fits into the Hungarian government’s witch-hunt against human rights NGOs that has started in 2013”.

He added: “The vague and absurd new bill – by criminalizing totally lawful activities – aims to silence those NGOs who are critical towards the government’s cruel and unlawful refugee and migration policies and other human rights issues. Though the bill at least on the surface aims to put in jail only those who are helping asylum-seekers and refugees, the message is very clear: if you are critical, you are the enemy of the government”.

Yaxley also shared with IPS UNHCR’s views on the impact of the bill on refugees: “What we may see happen to people who have been forced to flee their homes due to war, violence, and persecution, many who have been through traumatic experiences and are simply looking to exercise their fundamental human right to seek asylum, is that they might be deprived of critical aid and services.”

However, according to the Interior Minister Sandor Pinter in a document attached to the draft of the bill, “The STOP Soros package of bills serves that goal, making the organisation of illegal immigration a criminal offence. We want to use the bills to stop Hungary from becoming a country of immigrants”.

The nonprofit sector

Many international NGOs in Hungary will be targeted with this bill. Amnesty International is one of them. “Amnesty International Hungary is one of the organisations that are in the target of the government for many years.

Amnesty International many times has been named as an organisation “supporting illegal migration”. Since the law is vague and incomprehensible from a legal perspective nobody knows what is going to happen”, said Demeter.

Yaxley from UNHCR told IPS that this bill will definitely be a drawback for the nonprofit work in Hungary: “The key aspect is the additional financial requirements that are set to be placed on any NGOs that receive foreign funding. Our understanding is that our own funding [UNHCR’s] could potentially fall under this clause.”

“This may lead to a situation where essentially NGOs feel unable or unwilling to provide assistance that is really needed for refugees and asylum seekers that often arrive to countries with nothing more than the clothes on their backs or a handful of necessities.”

When asked about the repercussions after the bill is implemented, Demeter said: “Amnesty is committed to stay in Hungary and do its job just as in the previous nearly 30 years. We are going to fight against the law in front of every domestic and international court as possible”.