Guest Post: Why the U.S. Congress Should Pass the CROOK Act

Today’s guest post is from Abigail Bellows, a nonresident fellow at the Carnegie Endowment for International Peace and an independent governance consultant. Ms. Bellows previously served in the U.S. Department of State, where she created and led the anticorruption portfolio in the Office of the Under Secretary for Civilian Security, Democracy, and Human Rights.

In countries long plagued by pervasive corruption, a wave of global protests is disrupting the political order. These protests, typically triggered by a corruption scandal, produce a brief upswing in political will and may result in the ouster of the current government. In fact, 10% of countries of countries around the world have experienced corruption-fueled political change over the last five years. These settings present historic opportunities to produce genuine, lasting reform. But to succeed, reformers must take advantage of political momentum before public interest dissipates or opponents regroup. During these windows of opportunity, U.S. support can play a valuable role, both because of the symbolic power of U.S. support and because of the scale and rigor of the technical assistance that the U.S. can provide. Yet all too often, the U.S. government is unable to respond sufficiently and quickly to support reformist governments during these crucial windows of opportunity. One of the main reasons is that the current U.S. anticorruption budget is too small ($115 million annually), too geographically rigid, and insufficiently flexible (given that programming is typically planned and budgeted two years in advance).

New legislation pending in the U.S. Congress—Countering Russian and Other Overseas Kleptocracy (CROOK) Act—would help address these problems. The House version of the CROOK Act, which was introduced on July 18, 2019 by Representative Bill Keating (D-MA) and Representative Brian Fitzpatrick (R-PA), with support from the U.S. Helsinki Commission, passed the House Foreign Affairs Committee on December 18. The companion Senate bill was introduced on December 11 by Senator Roger Wicker (R-MS) and Senator Ben Cardin (D-MD) and is awaiting review by the Senate Foreign Relations Committee. While the CROOK Act contains many measures that would strengthen U.S. anticorruption efforts, its centerpiece is the creation of an “Anti-Corruption Action Fund.”

The CROOK Act’s Anti-Corruption Action Fund would be a dedicated tranche of flexible no-year funding that could be used to provide rapid support to reformist governments trying to take advantage of a window of political opportunity to deliver rule of law reform—along the lines of the situations we’ve seen in places like Ukraine in 2014, South Africa in 2018, Ethiopia in 2018, and Armenia after the 2018 Velvet Revolution. Rather than requiring new appropriations, the CROOK Act’s Anti-Corruption Action Fund would be paid for from a $5 million surcharge for each entity that incurs Foreign Corrupt Practices Act (FCPA) criminal fines and penalties in excess of $50 million. Thus the CROOK Act uses penalties levied on the “supply side” of corruption to fund reforms that would address the “demand side.” Allocations from the new Anti-Corruption Action Fund could be disbursed through a range of structures, such as a standing pool of funds that ambassadors could apply for (comparable to USAID’s Disaster Assistance Authority) or a quarterly grant competition across embassies (modeled on the Fiscal Transparency Innovation Fund). In any model, the key is for assistance to be closely tied to diplomatic engagement, rather than allocated wholesale to a third party to implement.

The U.S. support facilitated by the CROOK Act would help foster anticorruption progress that might otherwise take generations to achieve. And this is not only a direct benefit to the recipient countries, but also helps serve U.S. strategic interests in meeting geopolitical challenges. Jumpstarting anticorruption reform in strategic locations helps strengthen vital U.S. security partners, thwarting attempts by Russia, China, and others to buy influence in foreign countries. Regimes like Iran benefit from corruption in neighboring countries because weak governments have a harder time asserting their sovereignty and preventing foreign interference. The Anti-Corruption Action Fund would enable the United States to be more agile and effective in capitalizing on governance gains, leaving authoritarian regimes with fewer opportunities to dominate proxy states.

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