“Ghost Money”: Thinking About State Bribery in the National Interest

“It is difficult to overstate the profoundly negative impact that corruption has on society.  The abuse of entrusted power for private gain does violence to our values, our prosperity, and even our security.” — Secretary of State John Kerry

For a government so concerned with the fight against corruption, the United States sure does bribe a lot.  In fact, only months before Secretary Kerry delivered those remarks in December 2013, the New York Times revealed that the Central Intelligence Agency had been delivering millions of dollars in “ghost money” — packed in “suitcases, backpacks, and on occasion, plastic shopping bags” — to the office of Afghan President Hamid Karzai for more than a decade.  In a way, this story was old news; it’s been known for years that the CIA has done everything from slipping little blue pills to local Afghan chieftains to bankrolling members of the Afghan National Security Council.  As it turns out, bribing foreign officials in the name of national security has been a standard practice at the CIA for decades, one that the public seems to have tacitly accepted.

Standard practice or not, how can one reconcile this state-sponsored corruption with the U.S. government’s efforts to combat transnational bribery?  Is it hypocritical for the U.S. Department of Justice to punish private firms that bribe foreign officials, while the CIA is bribing those same officials at the same time?

Perhaps in some cases it might be, but there a couple of possible justifications for aggressively prosecuting private bribery while at the same time accepting the permissibility of state-sponsored bribery (at least under some circumstances):

One possible justification is that state actors are less likely to bribe foreign officials for personal gain, as opposed to a legitimate national interest.  When CIA officers bribe an Afghan official to stop harboring Taliban fighters, that bribery is presumably intended to save American lives and serve broader U.S. national security interests.  The same could be said of bribes paid by British officers to a foreign minister to induce him to open his nation’s airspace to British warplanes. These officers bribe not to line their own pockets but to address a public goods problem in providing for the political, economic, and general security interests of their home state’s citizenry.  Perhaps the public briber, then, is generally less morally culpable than his private counterpart.

But there are two problems with this justification.  To begin, “public-regarding” motives for bribery are not unique to state actors.  Imagine a private actor — like an NGO — bribing to get clean water flowing to a village or carry vaccines past a roadblock.  (That said, such bribes would probably not violate the Foreign Corrupt Practices Act, which only prohibits bribes paid to obtain or retain business.)  Additionally, it would be naïve to think that state actors never harbor personal motives for paying bribes.  If an intelligence officer is ordered to bribe a foreign official, and he later gets preferential treatment or is able to solicit private sector work from that official given their preexisting “relationship,” has the public- vs. private-regarding line not been crossed?

An alternative justification looks to the demand side: state-sponsored bribery might have a less corrosive effect on the recipient nation.  Bribery by both state and private actors is likely destructive to the effective operation of, and public confidence in, foreign governmental institutions in similar ways and to similar degrees.  But if one assumes that state-sponsored bribery is largely aimed at things like securing overflight rights or interrupting the flow of arms to militant groups rather than directing contracts to this or that business, then public bribery might be less likely to introduce market inefficiencies.

Unsurprisingly, there are problems with this second justification as well. Chief among them is the simple fact that not all state-sponsored bribery is created equal.  Just as a state may bribe to save lives, for example, it could also bribe to take them.  If a state bribes a foreign official to execute a civil rights advocate or an opposition leader, it’s hard to defend that as being any less detrimental to the recipient nation than an act of straightforward commercial bribery.  Just as “good” bribery motives are not unique to the state, neither are “bad” bribery motives the exclusive domain of the private actor.

What does this teach us about the legal and moral justifications for treating state-sponsored bribery differently?  In my view, bribery by the state is a more morally defensible practice insofar as it is (1) more likely to be public regarding and (2) less likely to be destructive to the recipient nation.  But there is surely a large grey area between state-sponsored “ghost money” and bribery by private actors where those two distinctions begin to break down. Perhaps as state-sponsored bribery begins to look more and more like private commercial bribery, or as it creeps across some theoretical moral boundary, it is no longer distinguishable or defensible.  How to draw that line — dividing bribery in the national interest into camps of the permissible and the impermissible — though, is a difficult task for a different day.

2 thoughts on ““Ghost Money”: Thinking About State Bribery in the National Interest

  1. Fascinating post. One thing perhaps worth observing here is that, unless I’ve missed it, the big anti-corruption NGOs like Transparency International have had relatively little to say about this sort of state-sponsored bribery. I’m not necessarily criticizing this — rather, it’s consistent with your motivating observation that, for whatever reason, we seem to put this sort of activity in a different “box” from other kinds of bribery.

    A couple of questions, in addition to the ones that you raise:

    Do we have any reason to think that the US practice of bribing in the interests of national security undermines the credibility or effectiveness of US diplomatic efforts to push for more robust anticorruption, both at the international level and within specific countries? I gather the US has at least made attempts to promote the “rule of law” in Afghanistan and to try to get Afghani reformers to fight patronage networks, etc. Do CIA payments to Karzai and other leaders undermine those efforts? Or are they largely irrelevant?

    Second, if we did decide that certain kinds of state bribery were problematic (or worse), is there any practical way to regulate them legally? Presumably there’s already some form of procedural regulation in place, in terms of who must approve payments (at least I hope there is), but is anything beyond that realistic in this context? And if not, where does that leave us?

  2. You have both raised very interesting issues. I thought I should mention that, the 2010 UK Bribery Act (Section 13 “Defence for certain bribery offences etc.”), which outlaws domestic and foreign bribery, actually provides for an exemption for the intelligence services and armed forces, provided it can be proved that a bribery offence committed by them was necessary for “the proper exercise of any function of an intelligence service” or “the proper exercise of any function of the armed forces when engaged on active service”. The UK Secretary of State for Justice is required to be satisfied that the heads of the intelligence services and the UK Defence Council have in place arrangements to regulate such exemptions. This provision was the subject of much controversy when the draft Bribery Bill was undergoing scrutiny by a joint Parliamentary Committee. The Committee said, “We heard no persuasive evidence of a need for the domestic intelligence agencies to be granted an authorisation to bribe … Neither are we persuaded that this draft bill is the appropriate vehicle to extend the security services’ powers to contravene criminal law.” As the head of Transparency International in the UK at the time, I publicly urged the Government to accept the Committee’s recommendation, pointing out that the exemptions for the security services were an unnecessary provision in a bill whose primary purpose was to combat bribery. I also said that if the Government felt there was a problem with the security services, there were other ways to address it. However, the Government of the day disregarded the views of the Committee and Transparency International with the result that the UK is probably the only OECD member that has an exemption for bribery for ‘raisons d’état’ in its anti-bribery legislation! I believe the UK Bribery Act could have contained stronger provisions to regulate such an extraordinary exemption, which could be abused even in a relatively strong democracy like the UK. For instance, it would have been preferable to make any exemption subject to scrutiny/ approval by a select committee comprising members of parliament and the judiciary, rather than leaving this to a single Minister in the Government.

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