The West Should Stop Doing Global Kleptocrats So Many Favors

The West Should Stop Doing Global Kleptocrats So Many Favors

Editor’s Note: Late last year, The Atlantic published “The Bad Guys Are Winning,” a cover story by Anne Applebaum, a staff writer who has written extensively about corruption and political repression in Eastern Europe, the former Soviet Union, and around the world. In response to those concerns, the Senate Foreign Relations Committee scheduled a hearing today on how the United States should combat authoritarianism. Russian President Vladimir Putin’s invasion of Ukraine made the topic far more urgent. Senator Robert Menendez, who chairs the panel, invited Applebaum to testify. What follows, lightly edited for clarity, is her written submission to the committee. Some parts of this testimony have been adapted from Applebaum’s work in The Atlantic.

All of us have in our mind a cartoon image of what an autocratic state looks like. There is a bad man at the top. He controls the police. The police threaten the people with violence. There are evil collaborators, and maybe some brave dissidents.

But in the 21st century, that cartoon bears little resemblance to reality. Nowadays, autocracies are run not by one bad guy, but by networks composed of kleptocratic financial structures, security services (military, police, paramilitary groups, surveillance personnel), and professional propagandists. The members of these networks are connected not only within a given country, but among many countries. The corrupt, state-controlled companies in one dictatorship do business with their counterparts in another, with the profits going to the leader and his inner circle. Oligarchs from multiple countries all use the same accountants and lawyers to hide their money in Europe and America. The police forces in one country can arm, equip, and train the police forces in another; China notoriously sells surveillance technology all around the world. Propagandists share resources and tactics—the Russian troll farms that promote Putin’s propaganda can also be used to promote the propaganda of Belarus or Venezuela. They also pound home the same messages about the weakness of democracy and the evil of America. Chinese sources are right now echoing fake Russian stories about nonexistent Ukrainian chemical weapons. Their goal is to launch false narratives and confuse audiences in the United States and other free societies. They do so in order to make us believe that there is nothing we can do in response.

This is not to say that there is a conspiracy—some super-secret room where bad guys meet, as in a James Bond movie. The new autocratic alliance doesn’t have a structure, let alone an ideology. Among modern autocrats are people who call themselves communists, nationalists, and theocrats. Washington likes to talk about China and Chinese influence because that’s easy, but what really links the leaders of these countries is a common desire to preserve their personal power. Unlike military or political alliances from other times and places, the members of this group don’t operate like a bloc, but rather like a loose agglomeration of companies. Call it Autocracy, Inc. Their links are cemented not by ideals but by deals—deals designed to replace Western sanctions or take the edge off Western economic boycotts, or to make them personally rich—which is why they can operate across geographical and historical lines.

[Veronika Melkozerova: The Western world is in denial]

They protect one another and look after one another. In theory, for example, Venezuela is an international pariah. Since 2019, U.S. citizens and U.S. companies have been forbidden to do any business there; Canada, the European Union, and many of Venezuela’s South American neighbors continue to increase sanctions on the country. And yet Venezuela receives loans as well as oil investment from Moscow and Beijing. Turkey facilitates the illicit Venezuelan gold trade. Cuba has long provided security advisers, as well as security technology, to Venezuela’s rulers. The international narcotics trade keeps individual members of the regime well supplied with designer shoes and handbags. Leopoldo López, a onetime star of the opposition now living in exile in Spain, observes that although Venezuelan President Nicolás Maduro’s opponents have received some foreign assistance, it’s a drop in the bucket, “nothing comparable with what Maduro has received.”

In the face of this new challenge, Western and American responses have been profoundly inadequate. Expressions of “deep concern” mean nothing to dictators who feel secure thanks to their high levels of surveillance and their personal wealth. Western sanctions alone have no impact on autocrats who know they can continue to trade with one another. As the war in Ukraine illustrates, our failure to use military deterrence had consequences. Russia did not believe that we would arm Ukraine because we had not done so in the past.

For all of these reasons, we need a completely new strategy toward Russia, China, and the rest of the autocratic world, one in which we don’t merely react to the latest outrage, but change the rules of engagement altogether. We cannot merely slap sanctions on foreign oligarchs following some violation of international law, or our own laws: We must alter our financial system so that we stop kleptocratic elites from abusing it in the first place. We cannot just respond with furious fact-checking and denials when autocrats produce blatant propaganda: We must help provide accurate and timely information where there is none, and deliver it in the languages people speak. We cannot rely on old ideas about the liberal world order, the inviolability of borders, or international institutions and treaties to protect our friends and allies: We need a military strategy, based in deterrence, that takes into account the real possibility that autocracies will use military force.

The war in Ukraine has been launched because we did not do any of these things in the past. As he was preparing for this conflict, the Russian president calculated that the cost of international criticism, sanctions, and military resistance would be very low. He would survive them. Past Russian invasions of Ukraine and Georgia; Russian assassinations carried out in Britain and Germany; Russian disinformation campaigns during democratic elections in America, France, Germany, and elsewhere; Russian support for extremist or anti-democratic politicians—none of this received any real response from us or from the democratic alliances that we lead. Vladimir Putin assumed, based on his own experience, that we would not react this time either. China, Belarus, and other Russian allies assumed the same.

Going forward, we cannot let this happen again. In my written testimony I will suggest some broad areas where we need to completely reimagine our policy. I will leave the necessary changes in military and intelligence strategy, especially the question of deterrence, to others who have more expertise in this area, and will focus on kleptocracy and disinformation. But I hope this hearing sparks a broader conversation. We need far more creative thinking about how we can not just survive the war in Ukraine, but win the war in Ukraine—and how we can prevent similar wars from taking place in the future.

1. Put an end to transnational kleptocracy.

Currently a Russian, Angolan, or Chinese oligarch can own a house in London, an estate on the Mediterranean, a company in Delaware, and a trust in South Dakota without ever having to reveal to his own tax authorities or ours that these properties are his. A whole host of American and European intermediaries make these kinds of transactions possible: lawyers, bankers, accountants, real-estate agents, PR companies. Their work is legal. We have made it so. We can just as easily make it illegal. All of it. We don’t need to tolerate a little bit of corruption; we can simply end the whole system, altogether.

[Casey Michel: The United States of dirty money]

Although this testimony is being presented to the Senate Foreign Relations Committee, which does not traditionally have oversight of the regulation of international finance, it is time to recognize the problem of international kleptocracy as a matter not just for the Treasury, but for those who make American foreign policy. After all, many modern autocrats hold on to power not just with violence, but by stealing from their own countries, laundering the money abroad, and then using their fortunes to maintain power at home and buy influence abroad. The Russian oligarchs in the news at the moment are not just wealthy men with yachts; they have been acting for many years as agents of the Russian state, representing the interests of the Russian leadership in myriad commercial and political transactions.

We have the power to destroy this business model. We could require all real-estate transactions, everywhere in the United States, to be totally transparent. We could require all companies, trusts, and investment funds to be registered in the name of their real owners. We could ban Americans from keeping their money in tax havens, and we could ban American lawyers and accountants from engaging with tax havens. We could force art dealers and auction houses to carry out money-laundering checks, and close loopholes that allow anonymity in the private-equity and hedge-fund industries. We could launch a diplomatic crusade to persuade other democracies to do the same. Simply ending these practices would make life much more uncomfortable for the world’s kleptocrats. It might have the benefit of making our own country more law-abiding, and freer of autocratic influence, as well.

In addition to changing the law, we also need to jail those who break it. We need to step up our enforcement of the existing money-laundering laws. It is not enough to sanction Russian oligarchs now, when it is too late, or to investigate their enablers, when it is too late for that too. We need to prevent new kleptocratic elites from forming in the future. It must become not only socially toxic but also a criminal liability for anyone to handle stolen money, and not just in America.

Now is the time to organize a deep international conversation, with our allies all over the world, to assess what they are doing, whether they are succeeding, and which steps we all need to take to ensure that we are not building the autocracies of the future. Now is the time to reveal what we know about hidden money and who really controls it. The Biden administration has created a precedent, revealing intelligence leading up to the Russian invasion of Ukraine. Why not build on that precedent, and reveal what intelligence we have about Putin’s money, Maduro’s money, Xi Jinping’s money, or Alexander Lukashenko’s money?

Just as we once built an international anti-communist alliance, so we can build an international anti-corruption alliance, organized around the idea of transparency, accountability, and fairness. Those are the values that we should promote, not only at home but around the world. They are consistent with our democratic constitutions and with the rule of law that underlies all of our societies. Once again: Our failure to abide by those values in the past is one of the sources of today’s crisis.

2. Don’t fight the information war. Undermine it.

Modern autocrats take information and ideas seriously. They understand the importance not only of controlling opinion inside their own countries, but also of influencing debates around the world. They spend accordingly: on television channels, local and national newspapers, bot networks. They buy officials and businessmen in democratic countries in order to have local spokesmen and advocates. China’s United Front program also targets students, younger journalists, and politicians, seeking to influence their thinking from an early age.

For three decades, since the end of the Cold War, we have been pretending that we don’t have to do any of this, because good information will somehow win the battle in the “market of ideas.” But there isn’t a market of ideas—or not a free market. Instead, some ideas have been turbocharged by disinformation campaigns, by heavy spending, and by the social-media algorithms that promote emotional and divisive content because that’s what keeps people online. Since we first encountered Russian disinformation inside our own society, we’ve also imagined that our existing forms of communication could beat it without any special effort. But a decade’s worth of studying Russian propaganda has taught me that fact-checking and swift reactions are useful but insufficient.

We have a living example of how this works, right in front of us now. We can see how the Ukrainians are getting their viewpoint across by telling a moving, true story, by speaking in language used by ordinary people and by showing us the war as they see it. In doing so, they are reaching Americans, Europeans, and many others. But at the same time, the false Russian narrative is the only one reaching Russians at home; it is also reaching many people in the broader Russian-speaking world, as well as in India and the Middle East. The same is true of Chinese propaganda, which might not work here but has a strong impact in the developing world, where China presents its political system as a model for others to follow. Right now, for example, private technology groups there, including Tencent, Sina Weibo, and ByteDance, are promoting content backing Putin’s war and suppressing posts that are sympathetic to Ukraine.

In this new atmosphere, we need to rethink how we communicate. Much as we assembled the Department of Homeland Security out of disparate agencies after 9/11, we now need a much more carefully targeted effort that would pull together some of the departments in the U.S. government that think about communication, not to do propaganda but to reach more people around the world with better information. The building blocks already exist, even if they are not currently coordinated. All of these things belong together: U.S.-funded international broadcasting, including Radio Free Europe/Radio Liberty, the Voice of America, and the rest of the services now housed at the U.S. Agency for Global Media (USAGM); the Global Engagement Center, currently in the State Department; the Open Source Center, a large media monitoring and translation service currently squirreled away in the intelligence community where its work is hard to access; research into foreign audiences and internet tactics; public diplomacy and cultural diplomacy.

The teams who work on these things should be jointly thinking about the best way to communicate democratic values in undemocratic places, jointly sharing experiences, jointly informing and engaging other parts of the U.S. government. In any given country there are different kinds of audiences and there may be different tools and tactics needed to reach them. Parts of the U.S. government may have thought about this problem, but others have not. The dysfunction and scandal that have dogged international broadcasting—with Michael Pack’s disastrous tenure at USAGM as only the latest example—needs to end. Congressional leadership is needed to put these services on a different and better footing.

Some of what we should do is simply provide more and better information to people who want it. Radio Free Europe/Radio Liberty’s online performance increased by 99 percent during the first two weeks of war in Ukraine. Viewership of YouTube videos of RFE/RL programming tripled. This proves the value of communicating with Russian speakers all over Eurasia—Ukraine, Moldova, Belarus, Kazakhstan, the Baltic States, even Germany, home to some 3 million native Russian speakers. But small increases in funding for this vital population are insufficient.

We need to provide real, long-lasting competition for the Russian state-run cable and satellite television that most of the people in these regions watch. Hundreds of talented Russian journalists and media professionals have just fled Moscow: Why not start a Russian television channel, perhaps jointly funded by Europe and America, to employ them and give them a way to work? At the same time, we should increase funding for existing Russian independent media outlets, most now expelled from the country, and provide support for the many grassroots efforts to run social-media campaigns inside and outside the country.

But although Russia is of special interest at the moment, we also need to consider, as Congress is already doing, an expansion of funding for Radio Free Asia, which has received only a third of the funding of RFE/RL, despite its potential to reach a large audience inside China and the Chinese diaspora around the world. Although relatively small, Radio Free Asia was the first news organization to uncover mass detentions in Xinjiang; RFA also provided the first documentation of China’s cover-up of the earliest coronavirus fatalities in Wuhan. We need RFA to be able to counter Chinese propaganda; to put China’s Belt and Road projects in Southeast Asia into context for audiences in Cambodia, Laos, Burma, and Vietnam; to enhance its digital global initiative to engage younger, Mandarin-speaking audiences wary of Beijing’s dominant media narratives. We also need to scale up the work of the Open Technology Fund, which supports internet-freedom technologies at every stage of development. OTF makes it possible for millions to access independent journalism in closed media environments.

In all of the foreign languages that we work, we need to shift from an era of bullhorn digital broadcasting to a new era of digital samizdat,” mobilizing informed citizens and teaching them to distribute information. These tactics may not get to everyone, but they can be targeted at younger audiences, diasporas, and elites who have influence within their countries.

In this new era, funding for education and culture need some rethinking too. Shouldn’t there be a Russian-language university, in Vilnius or Warsaw, to house all of the intellectuals and thinkers who have just left Moscow? Don’t we need to spend more on education in Hindi and Persian? Existing programs should be recast and redesigned for a different era, one in which so much more can be known about the world, but in which so much money is being spent by the autocracies to distort that knowledge. The goal should be to ensure that a different idea of “Russianness” is available to the Russian diaspora, aside from the one provided by Putin, and that alternative outlets are available for people in other autocratic societies as well.

3. Put democracy back at the center of foreign policy.

It is no accident that Americans are united in their support for Ukraine. A large, bipartisan majority, for example, back the U.S. decision to boycott Russian oil, even if it led to higher prices. This is because Americans identify with people who are clearly fighting for their freedom, their independence, and their democracy. It is a central part of how we define ourselves, and who we are.

[Ben Rhodes: We have reached a hinge point in history]

I recognize that it is naive to assume we can have the same policy toward every dictator, that we cannot give the same support to every democracy movement; I understand that there are trade-offs to make in diplomacy as in everything else. This is not the Cold War, there is no Warsaw Pact, and not every judgment about every autocracy is black-and-white. But our preference for democracy and our willingness to defend key democracies should never be in doubt. The fact is that Russians clearly doubted whether we and our allies were even willing to help Ukraine fight back. We failed, in advance, to telegraph the fact that we would. We cannot let that happen again.

In addition to being a historian and journalist, I am also on the board of the National Endowment for Democracy (NED), the independent organization that Congress has generously funded for years. I want to express here my thanks for that support, as well as my hope that it will continue. NED is ahead of the curve in its thinking about these issues, has supported networks of journalists to help in international investigations of kleptocracy as well as independent journalism of all kinds, on top of its support for democracy activism all over the world. Funding NED is necessary but not sufficient, however. U.S. foreign policy is in fact made by dozens of different actors, all across the government and American society. Congressional leadership can help focus all of them not just on the defense of existing institutions, but on the creative thinking we lack.

To put it bluntly, we need to be able to imagine a different kind of future, one in which our nation and its ideas are not in retreat, but in the ascendance. We need to approach displaced diasporas all over the world as an opportunity, not a burden: How can we prepare them to take back the countries that they have lost, in Syria, Afghanistan, or Russia? We need to break the links among autocracies, to forge new and better links between democracies, to reinvent existing international institutions that are no longer fit for purpose. It is alarming, even astonishing, that the United Nations has played no role in preventing or mitigating the war in Ukraine because Russia, as a Security Council member, has so successfully blocked it from doing so. In fact, Russia and China have been seeking for years to undermine the UN and all of the other international organizations that conventional wisdom said would promote human rights and prevent exactly the kind of unprovoked war that we are seeing unfold today. It may be time to create some alternatives, to think about how the democratic world can organize alternatives, in the event that the UN is no longer interested in pursuing peaceful development.

Finally, it’s extremely important that we imagine a different future for Ukraine. A victory in this conflict, whatever that means—a Russian retreat or a negotiated settlement following Russia’s failure to conquer the country—would provide an enormous, transformational boost in confidence to the entire democratic world, including to the democratic activists in Belarus and Ukraine who oppose the war, even to democratic activists in places as far away as Hong Kong, Burma, or Venezuela.

A defeat, defined as the end of Ukrainian sovereignty, would be a terrible blow to all of them. The consequences are much higher than most in Congress and the administration seem to have yet acknowledged. Ukraine is not in NATO, but it is a de facto member of the European world and the democratic world. Ukrainian failure will have an impact on NATO’s credibility and on the democratic world’s cohesion, whether we like it or not.

We need to think about victory, and how to achieve it, not only in this conflict but in the others to come, over the next years and decades.

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