Kleptocracy, Inc.
Crass conflicts of interest are now part of our system
Last July I published a book, Autocracy, Inc., which described a network of dictatorships, linked not by ideology but by the political and financial interests of the dictators and their friends. At the time, many people asked me whether America would join this network if Donald Trump won a second term. Now, nearly 100 days into the second Trump administration, I think it’s fair to say that this is indeed where we are heading.
Observe where Trump went on Friday, April 4, when the stock market crash he precipitated was at its most ominous. As I wrote in the Atlantic, he did not go to New York to consult with Wall Street:
Instead, he went to Florida, where he visited his Doral golf resort, which was hosting the Saudi-backed LIV Golf tournament, and stayed at his Mar-a-Lago club, where many tournament fans and sponsors were staying too. His private businesses took precedence over the business of the nation.
Many of his guests were also interested in boosting Trump’s personal interests, as well as gaining the American president’s favor. One of them was Yasir al-Rumayyan, who runs the $925 billion Saudi sovereign-wealth fund and is also the chair of the LIV tournament. Other sponsors of the tournament included Riyadh Air, a Saudi airline; Aramco, the Saudi state oil company; and, startlingly, TikTok, the Chinese-owned social-media platform whose fate Trump will personally be deciding, even as he profits from its sponsorship and support.
Once upon a time (and not even that long ago), blatant conflicts of interest, especially involving foreign entities, were something presidents sought to avoid. No previous inhabitant of the White House would have wanted to be seen doing personal business with companies from countries that seek to influence American foreign policy. Such dealings risk violating the Constitution, which prohibits government officials from accepting “gifts, titles or emoluments from foreign governments.” But during Trump’s first term, the court system largely blew off his commercial entanglements. Now he not only does business with foreign as well as domestic companies that have a direct interest in his policies, he advertises and celebrates them. We know the identities of the golf-tournament sponsors not because investigative journalists burrowed deep into secret contracts, but because they appear on official websites and were displayed on a billboard, observed by The New York Times, at his golf course.
It’s impossible to imagine either that website or that billboard in any previous administration. If they are hardly remarked upon now, that’s because Trump’s behavior is a symptom of something much larger.
We are living through a revolutionary change, a broad shift away from the transparency and accountability mandated by most modern democracies, and toward the opaque habits and corrupt practices of the autocratic world. For the past decade, American government and business alike have slowly begun to adopt the kleptocratic model pioneered by countries such as Russia and China, where the rulers’ conflicts of interest are simply part of the fabric of the system.
Note that Trump’s personal conflicts of interest are only the tip of the iceberg. He’s also dismantling the regulatory system that prevents public and private corruption too:
Trump’s Treasury Department announced last month that it would no longer enforce the Corporate Transparency Act, hampering recent congressional efforts to end money laundering, tax dodging, and other lawbreaking by anonymous investors. In an executive order, Trump suspended enforcement of the Foreign Corrupt Practices Act, which prohibits American and foreign companies from paying bribes to do business. The Department of Justice is also disbanding a task force set up to administer sanctions on Russian oligarchs close to Vladimir Putin.
Oversight will be removed from many domestic financial and government institutions too. Trump ordered a full work stoppage at the Consumer Financial Protection Bureau, which had been created to protect consumers from manipulation by banks and other financial institutions He has fired top officials overseeing ethics, whistleblower protections, and labor rights, including the heads of the Office of Government Ethics, the Office of Special Counsel, and the Merit Systems Protection Board. Meanwhile, Justice Department officials are drafting plans to reduce investigations of fraud and public corruption, which means that prosecuting crooked officials will be more difficult. Cuts to the IRS mean that tax fraud will also be harder to identify and prosecute. Just last week, the Justice Department announced that it would curtail investigations of cryptocurrency fraud and disband its National Cryptocurrency Enforcement Team.
There’s more, of course: Elon Musk’s conflicts of interest, Kash Patel’s conflicts of interest, the Trump family’s crypto schemes. The old administrative state, based on meritocracy and loyalty to the constitution, is being replaced by a kleptocratic one. Con men are pardoned in return for their campaign donations and political support of the president. Law firms and companies are extorted for campaign contributions and ‘pro-bono’ work. The shift feels rapid although some of it has been in the works for a long time. The American government has tolerated far too much secrecy in the financial system, as have governments in other democracies.
Read the whole thing here:
One episode of Autocracy in America, the podcast I made last summer, was also devoted to the dangers of kleptocracy (available on YouTube, Spotify and The Atlantic website too):
The Atlantic article contains a lot of information, almost too much. That’s because I felt that people will understand the scale of what is happening only when they see all of it. As I wrote,
Before it’s too late, everyone who can do so must communicate what is happening: American government, American foreign policy, and American trade policy are slowly being transformed, not to benefit Americans but to benefit the president, his family, and his friends. Only voters can stop them.
Introducing the Kleptocracy Tracker
I do worry that this truly radical transformation is happening so fast that we will struggle to remember it. For that reason, I have started tracking the individual changes, and will share updates as often as I can. Alongside periodic To-Read lists, I will include a Kleptocracy Tracker at the bottom of most posts.
Here are a few recent entries that didn’t make the Atlantic article:
Galanis, who aided House Republicans’ impeachment inquiry into Biden and was
convicted of defrauding the Oglala Sioux tribe and pension investors. (Remember the
famous quote: “For my friends, everything; for my enemies, the law...
Trump Media and Technology Group filed paperwork with the SEC – which has
been cowed by the Trump administration – that could allow Trump’s trust to sell
shares currently worth more than $2.3 billion
The longtime heads of the SEC’s Foreign Corrupt Practices Act unit, Charles
Cain and Tracy Price, resigned their posts following Trump’s directive pausing
anti-bribery enforcement. Yet another oversight body disabled by the president.
Karina Rotenberg, wife of Russian oligarch Boris Rotenberg, who has been
suspected of using her US citizenship to shield her husband’s wealth, had
sanctions against her lifted by the US Treasury Department. With anti-bribery
enforcement also gutted, it will be that much easier for her to purchase favor from
the Trump administration.
Quietly, the administration also lifted sanctions on Antal Rogan, an aide to the
Hungarian prime minister, Viktor Orban. The Biden Treasury Department
Throughout his tenure as a government official, Rogan has orchestrated Hungary’s system for distributing public contracts and resources to cronies loyal to himself and the Fidesz political party. Rogan orchestrated schemes designed to control several strategic sectors of the Hungarian economy and to divert proceeds from those sectors to himself and to reward loyalists from his political party.
Doors, in Charleston, SC
Finally…I went to a conference in Charleston, woke up early one morning and snapped these photographs
Also, this Charleston church stands on the site of what used to be the home and office of James Hoban, the Irish-born architect of the White House
It’s a lovely town, well worth a visit
Anyone with half an eye, half an ear, and half a brain saw this coming if Trump was re-elected. But because so many were convinced that whatever he was doing of this nature and others that were anti-democratic, self-serving, self-protecting, amoral, misogynistic, mendacious, and just plain selfish didn’t matter because they didn’t think it affected them in ways they understood, that didn’t enter into their calculations (what such calculations there were) as they entered the voting booth.
Far too many of us simply do not understand that we are both the inheritors of and the participants in the most extraordinary, the most crucial, the riskiest, and the most complex experiment in human society and government ever attempted. As the character of Andrew Shepherd in The American President noted, “America is advanced citizenship”. Indeed it is the most advanced citizenship in the world. It asks that we understand what we are a part of, how it is supposed to work, and how easily we could lose it if we aren’t careful.
American voters who understand the nature of this experiment would never have re-elected Donald Trump, no matter the price of eggs, the porous nature of our southern border, or their negative, oppositional, or fearful feelings about the social, political, religious and racial diversity that we must embrace if this nation is to survive as it was designed.
Too many of us are satisfied to do what we are told is in our best interests without understanding what those best interests are in the long run. Too many of us are all too eager to divide ourselves into all sorts of groups, many of them trivial or imaginary, without understanding the threat that poses to a nation of great diversity. Too many of us are determined that our individual rights trump the best interests of the community. And too many of are accepting of the ‘us and them’ mode of thinking so dear to demagogues like Trump.
I don’t fear Trump and his myrmidons half as much as I fear those who can possibly think he is the answer to whatever problems they think they have with our system. Long before the advent of modern polling, John Adams thought that one third of us wanted independence and were willing to fight for it, one third were happy to stay with the King and Parliament, and one third were firmly ensconced on the fence waiting to see who was likely to come out on top. Washington, in the darkest days of the Revolution while he waited for the help promised by the French, without which he knew we could not win our independence became despondent about the complacency and self-interest of so many with whom he came in contact while his army suffered from a lack of pay, food, clothing, large scale support, and a congress consumed by trivia and unwilling to make the hard decisions that were needed to maintain it..
My sense is that we face a somewhat similar situation now, two and a half centuries later. Our object remains clear and even bright to those of us who understand, with Lincoln, that we truly are ‘the last best hope of earth’, but I fear that too many of us simply do not share either that understanding or the desire to maintain the experiment if it means too many uncomfortable questions, too much responsibility, too much thought about just who we were designed to be. too many demands to step outside our comfort zone and to embrace all of us as Americans.
This is not the first test we’ve faced, nor even the most excruciating (the Civil War), and perhaps it is for that reason that it is so hard for so many to see what the risks of Trumpism truly are. It is not unlike the issue of climate change - the signs are vague, confusing, sometimes contradictory. The ‘experts' are divided. The long range predictions can seem problematic. People are tired of all the rhetoric and simply want to get on with their lives and escape from the brouhaha.
I think we truly are at a crucial crossroads in our relatively short history, perhaps the most crucial we are ever likely to face. Given that, I am actually quite grateful that it is Trump who is the fulcrum because he so utterly, so crudely, and so obviously disdains and disavows everything we were designed to be. That may end up being what saves us.
It is as if we're living a nonstop hallucinogenic nightmare. This is not really happening. How do we make it all stop? Congress can't. The business community that once could have been relied on to rein in the worst impulses that could threaten their domain is an enabler and profiteer. And the tech billionaires and new kleptocrats are part of the hustle. The courts are hanging on by a thread, while SCOTUS is deliberately parsing enough legalese and leaving Trump an easy out from its orders. You've been prescient all along in describing the levers of state power he needed to capture. What's left? The military? The intelligence community? For both, I would add current and past actors and leaders? We'll see.