Corruption Is Bad

Corruption Is as Bad in the US as in Developing Countries

by Rebecca Gordon

A top government official with energy industry holdings huddles in secret with oil company executives to work out the details of a potentially lucrative “national energy policy.” Later, that same official steers billions of government dollars to his former oil-field services company. Well-paid elected representatives act with impunity, routinely trading government contracts and other favors for millions of dollars. Meanwhile, ordinary citizens live in fear of venal police forces that suck them dry by charging fees  for services, throwing them in jail when they can’t pay arbitrary fines or selling their court “debts” to private companies. Sometimes the police just take people’s life savings leaving them with no recourse whatsoever. Sometimes they steal and deal drugs on the side. Meanwhile, the country’s infrastructure crumbles. Bridges collapse or take a quarter-century to fix after a natural disaster, or (despite millions spent) turn out not to be fixed at all. Many citizens regard their government at all levels with a weary combination of cynicism and contempt. Fundamentalist groups respond by calling for a return to religious values and the imposition of religious law.

What country is this? Could it be Nigeria or some other kleptocratic developing state? Or post-invasion Afghanistan where Ahmed Wali Karzai, CIA asset and brother of the US-installed president Hamid Karzai, made many millions on the opium trade (which the US was ostensibly trying to suppress), while his brother Mahmoud raked in millions more from the fraud-ridden Bank of Kabul? Or could it be Mexico, where the actions of both the government and drug cartels have created perhaps the world’s first narco-terrorist state?

In fact, everything in this list happened (and much of it is still happening) in the United States, the world leader — or so we like to think — in clean government. These days, however, according to the Corruption Perception Index of Transparency International (TI), our country comes in only 17th in the least-corrupt sweepstakes, trailing European and Scandinavian countries as well as Canada, Australia and New Zealand. In fact, TI considers us on a par with Caribbean island nations like Barbados and the Bahamas. In the US, TI says, “from fraud and embezzlement charges to the failure to uphold ethical standards, there are multiple cases of corruption at the federal, state and local level.”

And here’s a reasonable bet: it’s not going to get better any time soon and it could get a lot worse. When it comes to the growth of American corruption, one of TI’s key concerns is the how the Supreme Court’s 2010 Citizens United decision opened the pay-to-play floodgates of the political system, allowing Super PACs to pour billions of private and corporate money into it, sometimes in complete secrecy. Citizens United undammed the wealth of the super-rich and their enablers, allowing big donors like casino capitalist — a description that couldn’t be more literal — Sheldon Adelson to use their millions to influence government policy.

Kleptocracy USA?

Every now and then, a book changes the way you see the world. It’s like shaking a kaleidoscope and suddenly all the bits and pieces fall into a new pattern. Sarah Chayes’s Thieves of State: Why Corruption Threatens Global Security shook my kaleidoscope. Chayes traveled to Afghanistan in 2001 as a reporter for NPR. Moved by the land and people, she soon gave up reporting to devote herself to working with non-governmental organizations helping “Afghans rebuild their shattered but extraordinary country.”

In the process, she came to understand the central role government corruption plays in the collapse of nations and the rise of fundamentalist organizations like the Taliban, al-Qaeda and the Islamic State. She also discovered just how unable (and often unwilling) American military and civilian officials were to put a stop to the thievery that characterized Afghanistan’s government at every level — from the skimming of billions in reconstruction funds at the top to the daily drumbeat of demands for bribes and “fees” from ordinary citizens seeking any kind of government service further down the chain of organized corruption. In general, writes Chayes, kleptocratic countries operate very much as pyramid schemes, with people at one level paying those at the next for the privilege of extracting money from those below.

Chayes suggests that “acute government corruption” may be a major factor “at the root” of the violent extremism now spreading across the Greater Middle East and Africa. When government robs ordinary people blind, in what she calls a “vertically integrated criminal enterprise,” the victims tend to look for justice elsewhere. When officials treat the law with criminal contempt or when the law explicitly permits government extortion, they turn to what seem like uncorrupted systems of reprisal and redemption outside those laws. Increasingly, they look to God or God’s laws and, of course, to God’s self-proclaimed representatives. The result can be dangerously violent explosions of anger and retribution. Eruptions can take the form of the Puritan iconoclasm that rocked Catholic Europe in the sixteenth century or present-day attempts by the Taliban or the Islamic State to implement a harsh, even vindictive version of Islamic Sharia law, while attacking “unbelievers” in the territory they control.

Reading Thieves of State, it didn’t take long for my mind to wander from Kabul to Washington, from a place where American-funded corruption was an open secret to a place where few would think it applicable. Why was it, I began to wonder, that in our country “corruption” never came up in relation to bankers the government allowed to sell mortgages to people who couldn’t repay them, then slicing and dicing their debt into investment “securities” that brought on the worst recession since the 1930s? (Neil Barofsky, who took on the thankless role of inspector general for the Troubled Asset Relief Fund, tells the grim tale of how the government was “captured by the banks” in his 2012 book Bailout.)

Chayes made me wander ever deeper into the recent history of Washington’s wheeling and dealing, including, for instance, the story of the National Energy Policy Development Group, which Vice President Dick Cheney convened in the first weeks of George W. Bush’s presidency. Its charge was to develop a national energy policy for the country and its deliberations — attended by top executives of all the major oil companies (some of whom then denied before Congress that they had been present) — were held in complete secrecy. Cheney even refused to surrender the list of attendees when the Government Accountability Office sued him, a suit eventually dropped after Congress cut that agency’s budget. If the goal was to create a policy that would suit the oil companies, Cheney was the perfect man to chair the enterprise.

In 2001, having suggested himself as the only reasonable running mate for Bush, Cheney left his post as CEO at oilfield services corporation Halliburton. “Big changes are coming to Washington,” he told ABC News, “and I want to be a part of them.” And so he was, including launching a disastrous war on Iraq, foreseen and planned for in those energy policy meetings. Indeed, documents shaken loose in a Freedom of Information Act suit brought by Judicial Watch and the Sierra Club showed that in March 2001 — months before the 9/11 attacks — energy task force members were already salivating over taking possession of those Iraqi oil fields. Nor did Cheney forget his friends at Halliburton. Their spin-off company, KBR, would receive a better-than-1,000-to-1 return on their investment in the vice president (who’d gotten a $34 million severance package from them), reaping $39.5 billion in government contracts in Iraq. And yet when did anyone mention “corruption” in connection with any of this?

Chayes’s book made me think in a new way about the long-term effects of the revolving door between the Capitol — supposedly occupied by the people’s representatives — and the K Street suites of Washington’s myriad lobbyists. It also brought to mind all those former members of Congress, generals and national security state officials who parachute directly out of government service and onto the boards of defense-oriented companies or into cushy consultancies catering to that same security state.

It also made me think in a new way about the ever-lower turnouts for our elections. There are good reasons why so many Americans — especially those living in poverty and in communities of color — don’t vote. It’s not that they don’t know their forebears died for that right. It’s not that they don’t object when their votes are suppressed. It’s that, like many other Americans, they clearly believe their government to be so corrupt that voting is pointless.

Are We in Ferguson — or Kabul?

What surprises me most, however, isn’t the corruption at the top, but the ways in which lives at the bottom are affected by it. Reading Thieves of State set me thinking about how regularly money in this country now flows from the bottom up that pyramid. If you head down, you no longer find yourself on Main Street, USA, but in a place that seems uncomfortably like Kabul; in other words, a Ponzi-scheme world of the first order.

Consider, for instance, the Justice Department’s 2015 report on the police in Ferguson, Missouri, about whom we’ve learned so much since Michael Brown, an unarmed black teenager, was shot to death on August 9, 2014. As it happens, the dangers for Ferguson’s residents hardly ended with police misconduct. “Ferguson’s law enforcement practices are shaped by the city’s focus on revenue rather than by public safety needs,” Justice Department investigators found:

This emphasis on revenue has compromised the institutional character of Ferguson’s police department, contributing to a pattern of unconstitutional policing and has also shaped its municipal court, leading to procedures that raise due process concerns and inflict unnecessary harm on members of the Ferguson community.

The report then recounted in excruciating detail the extent to which the police were a plague on the city’s largely black population. Ferguson was — make no mistake about it — distinctly Kabul, USA. The police, for instance, regularly accosted residents for what might be termed “sitting in a car while Black,” and then charged them with bogus “crimes” like failing to wear a seat belt in a parked car or “making a false declaration” that, say, one’s name was “Mike,” not “Michael.” While these arrests didn’t make money directly for the police force, officers interested in promotion were told to keep in mind that their tally of “self-initiated activities” (tickets and traffic stops) would have a significant effect on their future success on the force. Meanwhile, those charged often lost their jobs and livelihoods amid a welter of court appearances.

Ferguson’s municipal court played its own grim role in this ugly scheme. As Justice Department investigators discovered, it did not “act as a neutral arbiter of the law or a check on unlawful police conduct.” Instead, it used its judicial authority “as the means to compel the payment of fines and fees that advance[d] the city’s financial interests.”

By issuing repeated arrest warrants when people missed court appearances or were unable to pay fines, it managed to regularly pile one fine on top of another and then often refused to accept partial payments for the sums owed. Under Missouri state law, moving traffic violations, for instance, automatically required the temporary suspension of a driver’s license. Ferguson residents couldn’t get their licenses back until — you guessed it — they paid their fines in full, often for charges that were manufactured in the first place.

As if in Kabul, people then had to weigh the risk of driving license-less (and getting arrested) against losing their jobs or — without a car — not making it to court. With no community service option available, many found themselves spending time in jail. From the police to the courts to city hall, what had been organized was, in short, an everyday money-raising racket of the first order.

And all of this was linked to the police department, which actually ran the municipal court. As the Justice Department report put it, that court “operates as part of the police department… is supervised by the Ferguson chief of police, is considered part of the police department for city organizational purposes and is physically located within the police station. Court staff report directly to the chief of police.” He, in turn, ran the show, doing everything from collecting fines to determining bail amounts.

The Harvard Law Review reported that, in 2013, Ferguson had a population of 22,000. That same year, “its municipal court issued 32,975 arrest warrants for nonviolent offenses,” or almost one-and-a-half arrests per inhabitant. The report continued:

In Ferguson, residents who fall behind on fines and don’t appear in court after a warrant is issued for their arrest (or arrive in court after the courtroom doors close, which often happens just five minutes after the session is set to start for the day) are charged an additional $120 to $130 fine, along with a $50 fee for a new arrest warrant and 56 cents for each mile that police drive to serve it. Once arrested, everyone who can’t pay their fines or post bail (which is usually set to equal the amount of their total debt) is imprisoned until the next court session (which happens three days a month). Anyone who is imprisoned is charged $30 to $60 a night by the jail.

Whether in Kabul or Ferguson, this kind of daily oppression wears people down. It’s no surprise that long before the police shot Michael Brown, the citizens of Ferguson had little trust or respect for them.

Privatizing Official Corruption

But might Ferguson not have been an outlier, a unique Kabul-in-America case of a rogue city government bent on extracting every penny from its poorest residents? Consider, then, the town of Pagedale, Missouri, which came up with a hardly less kleptocratic way of squeezing money out of its citizens. Instead of focusing on driving and parking, Pagedale routinely hit homeowners with fines for “offenses” like failing to have blinds and “matching curtains” on their windows or having “unsightly lawns.” Pagedale is a small town, with 3,300 residents. In 2013, the city’s general revenues totaled $2 million, 17 percent from such fines and fees.

Might such kleptocratic local revenue-extraction systems, however, be limited to just one Midwestern state? Consider then the cozy relationship that Augusta, capital of Georgia, has with Sentinel Offender Services, LLC. That company makes electronic monitoring equipment used by state and local government agencies, ranging from the Los Angeles County Probation Department to the Massachusetts Office of the Commissioner of Probation. Its website touts the benefits to municipalities of what it calls “offender-funded programs” in which the person on probation pays the company directly for his or her own monitoring, saving the courts the cost of administering a probation system. In return, the company sets its own fees at whatever level it chooses. “By individually assessing each participant a fee based on income,” says Sentinel, “our sliding-fee scale approach has shifted the financial burden to the participant, allowing program growth and size to be a function of correctional need rather than budget availability.”

“Profiting from Probation,” a 2014 Human Rights Watch report, offers a typical tale of an Augusta resident named Michael Barrett. Arrested for shoplifting a can of beer, he entered a local court system that was focused on revenue extraction via a kind of official extortion, which is the definition of corruption. Even to step into a courtroom to deal with his “case,” he had to hand over an $80 fee for a court-appointed defense lawyer. Then, convicted, he would be sentenced to a $200 fine and probation. Because the charge was “alcohol-related,” the court required Barrett to wear an electronic bracelet that would monitor his alcohol consumption, even though his sentence placed no restrictions on his drinking. For that Sentinel bracelet, there was a $50 startup fee, a $39 monthly “service” charge and a $12 “daily usage” fee. In total, he was forced to pay about $400 a month to monitor something he was legally allowed to do. Since Barrett couldn’t even pay the startup fee, he was promptly thrown in jail for a month until a friend lent him the money.

Such systems of privatized “justice” that bleed the poor are now spreading across the US, a country officially without debtor’s prisons. According to the Harvard Law Review article, some cities charge a “fee” to everyone they arrest, whether or not they’re ever convicted of an offense. In Washington, DC, on the other hand, for “certain traffic and a number of lower level criminal offenses,” you can simply pay your arresting officer “to end a case on the spot,” avoiding lengthy and expensive court costs. Other jurisdictions charge people who are arrested for the costs of police investigations, prosecution, public defender services, a jury trial (“sometimes with different fees depending on how many jurors a defendant requests”) and incarceration.

Even Machiavelli, who counseled princes seizing new territory to commit all their crimes at once because human beings have such short memories, warned that people will accept pretty much any kind of oppression unless “you prey on the possessions or the women of your subjects.” So many centuries later, while we women now tend to believe we belong to ourselves, civil asset forfeiture is still a part of American life. Unlike criminal asset forfeiture, which permits the government to seize a person’s assets after conviction of a crime, civil forfeiture allows local, state or federal law enforcement to seize and keep someone’s money or other property even if he or she is never charged. If, say, you are suspected of involvement with drugs or terrorism, the police can seize all the money you have on you on the  spot, even if they don’t arrest you — and you have to go to court to get it back.

Federal asset forfeiture collections have risen from around $800 million in 2002 to almost $4.5 billion in 2014, according to the Institute for Justice (IJ). Governments defend the practice as a means of preventing suspected criminals — especially high-level drug dealers — from using their money to commit more crimes. But all too often, it’s poor people whose money is “forfeited,” even when they’ve committed no crime. The Pennsylvania ACLU reported that police take around a million dollars from Philadelphians each year in 6,000 separate cases — and not from drug lords either. More than half the cases involve seizures of less than $192 and in a city that’s only 43 percent black, 71 percent of those seizures from people charged with no crimes come from African Americans. If your property is seized, you can try to go to court to get it back but, says the ACLU, you should expect to make an average of four court appearances. Most people just give up.

Reading Thieves of State  reminded me that we’re not living in the country many of us imagine, but in something like an American klepto-state. Corruption, it turns out, doesn’t just devour the lives of people in far-off nations. Right now, it’s busy shoving what’s left of our own democracy down our throats.

Chayes documents how such corruption can lead to violent explosions in other countries. Indeed, it was a final kleptocratic insult — a police woman’s slap in the face after he refused to pay a bribe to retrieve his confiscated vegetable cart — that led Tunisian Mohamed Bouazizi to burn himself to death and touch off the Arab Spring. As Machiavelli wrote so long ago, people will put up with a lot — torture, mass surveillance, even a car full of clowns masquerading as candidates for president — but they don’t like being robbed by their own government. Sooner or later, they will rebel. Let’s hope, when that happens, that we don’t end up under the rule of our own American Taliban or some billionaire reality TV star.