Frank Vogl is the author of "The Enablers: How the West Supports Kleptocrats and Corruption—Endangering Our Democracy." He is the co-founder of Transparency International and the Partnership for Transparency Fund.
In myriad legal and illegal ways, Western governments are complicit in supporting, and thereby strengthening, autocracies across the Arab world. Similar policies were pursued toward Russia over the past three decades, enhancing President Vladimir Putin's wealth and power, culminating in his megalomaniacal invasion of Ukraine. The policies of complicity toward authoritarian governments in the Middle East may also culminate in increasing security threats and risks, ultimately proving to be just as disastrous as those that benefited the Kremlin.
Consider the smell of corruption that hovers over Jared Kushner's recent deal with Saudi Arabia's sovereign wealth fund, as reported by The New York Times in early April. Former President Donald Trump's son-in-law and senior White House adviser used his official position to deepen his ties to the Saudi leadership, especially Crown Prince Mohammed bin Salman, during the Trump administration. Then, on leaving government, Kushner swiftly and successfully exploited those ties for personal gain.
Kushner has zero experience in private equity, yet he secured a $2 billion investment in his new private equity firm, Affinity Partners, from Saudi Arabia's Public Investment Fund, over the objections of its own investment advisers, who were overruled by the fund's head: the crown prince. Does MBS see this investment in Kushner's company as a way to buy even more influence in Washington in the event that Trump returns to the White House?
Three days after this story broke, on April 13, the office of the Swiss attorney general announced that it had closed its 11-year investigation into corruption and money laundering related to cash that it had frozen in Swiss banks and that belonged to the family of the late Egyptian President Hosni Mubarak. As a result, the Mubarak family now has full control of over $620 million of funds in Switzerland; Mubarak's sons, Alaa and Gamal, even received about $270,0000 from the Swiss authorities to cover their legal costs. Hosni Mubarak somehow had hundreds of millions of dollars deposited in Swiss banks, even though for his entire professional life, his income was drawn officially from Egypt's public payrolls, first as a career officer in the Egyptian Air Force and then as vice president and president.
The Swiss claimed that they could not obtain any evidence against Mubarak from the Egyptian government. Its farcical investigation and final decision are unsurprising—the last thing the Swiss authorities want to admit is that their banks are more than willing to work on behalf of corrupt foreign leaders and their associates and take their dirty money. The Swiss decision, moreover, will further encourage kleptocrats across the world to feel their loot is safe when placed in Swiss hands.
The last thing Swiss authorities want to admit is that their banks are more than willing to work on behalf of corrupt foreign leaders and their associates and take their dirty money.
- Frank Vogl
Also in April, the family of Egyptian economist and researcher Ayman Hadhoud, 48, learned from the police in Cairo that he had died after having been arrested in early February. Prior to his arrest, his research included issues related to alleged government bribery. As DAWN has reported, his death is suspicious and strongly suggests that he was tortured. He is the fifth Egyptian to die in state custody so far this year. While the State Department finally addressed his murder in a press briefing on May 2, saying it was "deeply disturbed" by the reports and calling for "a thorough, transparent, and credible investigation," I could not find a word of protest about Hadhoud's death on the website of the U.S. Embassy in Cairo—which does, however, proudly highlight that U.S.-Egypt ties are "rooted in shared interests and values."
Yet the U.S. government consistently shunts aside core values in Egypt and throughout the Arab world that are so vital to sustaining and building democracy: freedom of the press, and of speech and assembly; accountable governance; respect for human rights; and an approach to justice that ensures that no individual is above the law. Most European governments are no better. Promoting these values in the Middle East has taken a back seat to placating autocrats who have pushed lucrative arms deals, promoted cozy business ties and secured access to oil and other natural resources. Commerce has trumped values every time in Western diplomacy across the region, as it did so relative to Russia—for example, making Germany highly dependent on Russian oil and gas.
In his riveting new memoir, 1000 Years of Joys and Sorrows, Chinese artist Ai Weiwei writes: "Corruption of the judiciary is the public face of a morally bankrupt body politic, a scar disfiguring the era in which we live." The governments of most Arab countries control the judiciary, the office of public prosecutors, the police, the intelligence services and the military—ensuring, as a result, that they are above the law. They use their impunity to steal from their citizens by pocketing tax revenues, taking kickbacks on public sector contracts and plundering state-owned enterprises. They bankrupt the country, as successive governments have in Lebanon, throwing it into political and social upheaval.
Western governments have been complicit with such grand corruption across the Arab world in other ways. They have encouraged graft by failing to ensure rigorous enforcement of anti-corruption and anti-money laundering laws, and by failing to strengthen existing laws and regulations. They have turned a blind eye to so much of the illicit flows of cash that find their ways into London mansions, superyachts moored in the south of France, fine art bought at the leading auction houses, and staggering amounts of investments in stocks and bonds on the largest stock exchanges.
The sole focus of Western governments when it comes to foreign corruption should not be on Russia. Ignoring corruption in the Middle East only entrenches kleptocratic Arab regimes.
- Frank Vogl
To manage these investments and ensure they are safe and secret, these kleptocrats and their cronies need enablers: the bankers, lawyers, auditors, property agents and other financial consultants on Wall Street, in London, Zurich and increasingly in Dubai, the new favorite hideaway for Russian oligarchs now feeling the heat of sanctions in the United Kingdom. As was the case for Hosni Mubarak and his sons, Swiss banks are popular partners, which in turn move huge amounts of cash through their wealth management departments into the world's capital markets. The Swiss, however, must compete with some of the world's largest banks headquartered across Europe and in the United States. When, on rare occasions, they are prosecuted by the U.S. Justice Department for money laundering, they agree to settle with fines. Not a single chairman or chief executive officer of a major bank that has been caught in such a situation has been personally prosecuted or been forced to resign. The fines are just a cost of doing business.
The U.S. and Western Europe only fully recognized the folly of their policies of complicity with Russia when it was too late, after Putin's invasion of Ukraine. They imposed major sanctions on Russian banks and corporations, as well as individual oligarchs and Russian public officials, as several EU countries scrambled to reduce their dependence on Russian oil and gas. At the same time, the U.S. announced it was increasing funds for law enforcement to go after the money launderers and finalizing regulations to ensure that the Treasury Department can more easily obtain the identities of the beneficial owners of holding companies, so often used for corrupt purposes. Other anti-corruption measures are also under consideration.
But the sole focus of Western governments when it comes to foreign corruption should not be on Russia. Ignoring corruption in the Middle East only entrenches kleptocratic Arab regimes, making them feel more secure in their support from the West as they amass more ill-gotten gains and rule with impunity. Inevitably, this boosts the hubris of some of these leaders and their desire to expand their power, with all kinds of destabilizing consequences around the region, starting with the brutal domestic crackdown under MBS in Saudi Arabia and Saudi war crimes in neighboring Yemen.
Kushner gets his cash. The Mubarak family gets its cash. Meanwhile, U.S. aid still flows. Egypt has received more than $50 billion in military aid and $30 billion in economic assistance from the U.S. since 1978. A minor cut in annual U.S. aid this year of $130 million to protest Egypt's human rights abuses lost all credibility when the Biden administration supported a new $2.5 billion sale of weapons to the Egyptian government.
Instead of looking the other way or even aiding corruption among their allies and partners in the Arab world, U.S. officials and indeed governments across the West should grapple with the common sense expressed by Marie Yovanovitch, the former U.S. ambassador to Ukraine, who reflects on her more than 30 years as a diplomat in her new memoir, Lessons From the Edge. "At least in principle, our values and our interests are nowhere more aligned than when it comes to fighting corruption," she writes. "When leaders view their positions in government as sinecures serving their personal interests rather than those of their constituents, it not only contravenes our values, it also goes against our interests, especially our long-term interests."
