Category Archives: Commentary

State “Decapture”: The Moldovan Story

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The tiny, post-Soviet nation of Moldova has long been considered the paradigmatic case of state capture. Since independence the country has been beset by weak institutions coupled with a deep cleavage over national identity. These conditions have made it easy for government leaders to put the state’s machinery to use to enrich themselves, their relatives, and cronies. In common parlance, to capture the state.

But an amazing turnaround has been underway since 2021. A new pro-Western party, the Party of Action and Solidarity, came to office and with the support of the European Union began taking measures to free the state machinery from elite control. To decapture it if you will.

Liam O’Shea chronicles the decapturing in new report for the Global Initiative Against Transnational Organized Crime (here). Senior figures from earlier administrations – among them a former president and a former prime minister — have been prosecuted for corruption; judges and prosecutors vetted; anti-corruption bodies empowered, and new and tighter controls put on political finance.

“Centralized state capture,” O’Shea writes, “no longer exists. . . . Criminal actors no longer obtain political protection, no evidence has surfaced since 2021 of collaboration between senior political figures and organized crime, and the state constrains these markets more effectively than at any point in the post-Soviet period.”

“Decapture” may today be a nonce word, but anticorruption activists can hope that with more examples like Moldova it will soon take its place in English dictionaries.

TI-US to FinCEN: Don’t Abandon the Crypto Mixer Rule

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Under the Biden Administration, FinCEN, the agency that writes and enforces U.S. anti-money laundering rules, proposed a rule aimed at cracking down on the use of foreign cryptocurrency mixers (Convertible Virtual Currency mixing services in money laundering parlance). Mixers obscure the source, destination, or the amount of a crypto transaction. That makes them a go-to tool for ransomware gangs, sanctions evaders, corrupt officials, and drug traffickers (here).

U.S. law requires anyone taking custody of customers’ funds — as mixers must do to mix — to register with FinCEN and verify customers’ identities. This defeats the purpose of mixing. As a result, no U.S. company openly operates a mixer, and those who have run one covertly have been prosecuted for money laundering and related federal crimes.

But while many countries are cracking down on mixers, not all are. So Americans with something to hide can still find a foreign service to route their crypto through.

To make that less likely, the Biden-era proposal would have required any U.S. financial institution to report within 30 days of detection any transaction it “knows, suspects, or has reason to suspect” involved mixing in a foreign jurisdiction. On October 6, the Trump Administration withdrew that proposal, along with a 2020 proposal requiring reporting on crypto transfers to and from self-hosted wallets (here). Both proposed rules would have made it harder for Americans, and anyone dealing in U.S. dollars, to hide their crypto dealings.

On October 8 Transparency International’s U.S. chapter sent FinCEN a strongly worded, well-argued letter urging it to reinstate the Biden-era proposals and to take further steps against the abuse of digital assets. A copy of the letter is here.

Italy’s Highest Court Quashes Conviction of Corruption Prosecutors: “Il fatto non sussiste”

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“The offence does not exist” (il fatto non sussiste). With those words, Italy’s Corte Suprema di Cassazione has righted a grave injustice done to Fabio De Pasquale and Sergio Spadaro.

The two Milan prosecutors were charged with withholding evidence that bore on the credibility of a key witness in their bribery prosecution of oil giants ENI and Shell. By failing to make it available to the defence, the charge went, they had committed the crime of refusing to perform official duties.

From the outset the case looked, as the decision says, “deeply flawed” and “legally untenable.”  Some of the material merely repeated what was already in the record, some was of doubtful reliability, and some the defense counsel acknowledged they already had. Many assumed the charges were brought to stop the two from appealing the trial court’s acquittal (despite strong evidence of wrongdoing). Insiders expected that once a new prosecutor took over the appeal (who then promptly dropped it – leaving defendants scot free) – the charges would be dismissed.

They were not. To the surprise even of some involved in the initial investigation, the case went to trial, De Pasquale and Spadaro were convicted, and the Brescia Court of Appeal upheld the conviction.

Italy’s Supreme Court has now vacated it. It held that neither of the statutes the lower courts relied on in finding the two guilty obliged them to disclose the material, and it called the appeal court’s reasoning “assertive and one-sided.” The conviction was quashed on the ground of il fatto non sussiste. That is the strongest formula available, and it generally carries the greatest preclusive effect in any later civil or disciplinary proceedings.

The case has done great harm not only to De Pasquale and Spadaro but to the reputation of the Italian judiciary. Will those in power now act to repair the damage, both to the two men and to the system itself?

The decision (in Italian) is here; an English translation by DeepL Pro is here.

Building Political Will to Fight Corruption: American Political Pros Advice to Democratic Candidates

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A September 29 memo by The Senate Majority PAC, a group of long-time American political consultants, shows how Democratic candidates for the House and Senate can connect with voters’ disgust over corruption. While keyed to the U.S. mid-term elections, the advice should be taken to heart by those everywhere seeking to mobilize citizens or voters to fight corruption.

The memo’s most important point: Tie corruption to an immediate, current concern. Yes, corruption is inherently bad, and everyone should be against it. But what will move far more people than a simple message decrying corruption is one that links it to a current ill. In the United States, that is the growing increase in the costs of food, fuel, and other daily living expenses; hence, the memo suggests several ways candidates can amplify an anticorruption message by showing ways it jacks up prices.

A second important point, also likely effective in many settings, is to make the fight against corruption a nonpartisan issue. Explain that corruption is systemic issues and commit to take on corruption wherever it is found. An above payback politics message can be especially appealing when so many candidates’ prime reason for seeking office is to wage lawfare on their erstwhile opponents.

The corruption literature often treats the political will to fight corruption as exogenous, a fancy way of saying it originates outside the body politic.  To be sure, there are a few cases where outsiders have been critical (Guatemala when CICIG had international support, Ukraine today) but by and large the fight against corruption must be home grown (endogenous to use another ten-cent word).  The Senate Majority PAC’s memo suggests some ways it can.

Full text below.

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Stopping Presidential Family Members Use of the Presidency for Private Gain: Important First Step

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Reports Donald Trump Jr. is personally profiting from his connection to his father prompted U.S. Senator John Curtis to ask the Senate Judiciary Committee to develop reforms necessary to curb such conduct (here).

GAB has queried readers for ideas to help the Committee, and an alert GABer flagged a provision in legislation the House Financial Services Committee approved in April (here) modernizing the Defense Production Act.

Current law gives presidents wide-ranging powers to provide financial help to companies critical for national defense. The provision in the reform bill curbs those powers. It would bar any company not only in which the president, vice-president, or a senior defense official has “a significant interest” from receiving assistance but also any company in which a family member has “a significant interest” from receiving assistance as well. Not a complete solution but a first, and important, step. A sign at least some in Congress are willing to act

The Defense Production Act reform bill awaits a vote of the full House. Good chance for House members to go on record on what they think about family members trading on their relatives’ name.

Text of the section follows.

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Republican Senator Seeks Investigation into Whether Donald Trump Jr. is Profiting Off Ties to His Father

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Senator John Curtis, a Republican from Utah, wrote the Senate Judiciary Committee September 21 asking it to investigate whether Donald Trump Jr., eldest child of President Donald Trump, has used his relationship with his father “for private financial benefit.”

In the letter (here), he writes that

For years, serious questions have been raised about members of presidential families using their names and proximity to the President to advance private business interests.

In a nod to fairness and bipartisanship, he asks the Committee to investigate Hunter Biden as well, but the bulk of his letter recounts the ways Don Jr. has used the family name to enrich himself. From the payment of a lavish wedding afterparty by a Russian oligarch, to his promotion of family-backed cryptocurrency ventures, the pursuit of international real estate deals, several reported investments in defense contracting.

“These reports raise legitimate questions about foreign access to members of a sitting president’s family and whether such relationships can create actual or perceived expectations of favorable treatment,” he writes. He then asks the Committee to “establish the facts, determine whether existing ethics, disclosure, or anti-corruption laws apply, and identify reforms necessary to prevent the presidency from becoming a vehicle for private enrichment by those closest to it.”

The letter is remarkable for two reasons. It puts the question of Presidential relatives trading on their link to the single most powerful individual in the modern world on the agenda at a time when it is likely to engage the public (and hence lawmakers), and it was written by a Republican. It’s unlikely the Committee will act before November, but, particularly if the Republicans suffer a major defeat in November, an investigation will surely be at the top of agenda in 2027.

IMF Report on Ukraine Asset Declaration System: Wasting enormous resources on low value tasks, spending little on those that matter

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No, that is not what the new IMF report on Ukrainian’s asset declaration system says. International organizations are never that blunt. 

But reading the careful, thorough assessment of Ukraine’s most important anticorruption program it is clear that is what the authors were thinking given what they found. And what they did say comes awfully close:

  • “The effectiveness of Ukraine’s [Asset Declaration System] is undermined by an overly expansive and highly formalistic framework that overburdens the [National Agency on Corruption Prevention], weakens prioritization, and limits the system’s capacity to support meaningful detection and recovery of illicit assets.”
  • “[Its] expansive scope, which is unmatched by other European nations, strains the NACP by forcing it to manage one of the world’s largest database of public officials’ assets with highly limited resources.”
  • “The conversion of NACP findings into final judicial sanctions remains limited. In 2025, the NACP transmitted 369 reasoned conclusions to law enforcement for criminal prosecution. These resulted in 12 guilty verdicts, a marked improvement from zero verdicts in 2021, but a conversion rate that remains low relative to the volume of referrals and reflects the broader systemic delays in the judicial pipeline for high-level corruption cases.”

More lifestyle audits

Comparing what officials declare they own to their house they live in, the car they drive, the vacations they take, and other properties they own and expenses they incur is the most effective way to spot if they are corrupt (here). The NACP has a unit dedicated to conducting such audits, but as the IMF report found, not only does the Lifestyle Management (LSM) group have a small staff, but the audits do not focus on priority areas such as 

“. . . war-related procurement and expenditure, where the convergence of significant public resources and reduced oversight creates acute corruption vulnerabilities.”  

The recommendation to audit the lifestyle of those involved in procuring military supplies and equipment comes at a critical time. Confidential reviews by the State Audit Service and an internal Ministry of Defense auditing department show war profiteering has reached unconscionable levels. Front-line troops are being supplied with worthless ammunition while military contractors are reaping huge profits (here).

Lifestyle audits are the surest, fastest way to weed out those officials corrupting the military procurement process. NACP staff now conducting routine checks of the accuracy of low-level officials’ declarations should be reassigned to the LSM unit and ordered to scrutinize the lifestyle of every single individual involved in military procurement.

Ukraine’s supporters in the international community have long recognized that an asset declaration program is crucial to curbing corruption and made its establishment a condition of continued financial assistance. The IMF report provides a roadmap for making the program effective. The international community should insist the government follow that map with haste.

Measure Corrupt Conduct — Not Corruption

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The new Handbook of Research Methods for Corruption Studies, edited by corruption guru extraordinaire Michael Johnston, offers a wealth of learning about how to fight corruption. None more important than Alina Mungiu-Pippidi’s chapter analyzing the fundamental question in the fight: how do we know if we are winning?

Decades after corruption control rose to the top of the global agenda, assaying how well the fight is going ought to be straightforward. That’s not so as the continuing debate about the validity of TI’s Corruption Perceptions Index, the World Bank’s Control of Corruption measure, and the many other measurement tools on offer shows.

The problem, as Professor Johnston acknowledges in the Handbook’s introduction, is foundational.

“After 40 years of debate about corruption, we are still uncertain about what we are talking about. . . cannot measure it directly. [and don’t know if] a single [corruption] score about a whole country really tells us much.”

What Professor Mungiu-Pippidi shows in her chapter is that the foundational problem is behind our inability to measure progress in fighting corruption. That efforts to gauge success have foundered on misguided attempts to propound a universal, all-encompassing definition of corruption which have produced nothing more than vague, imprecise measures riddled with practical and methodological errors. She explains why these should be scrapped and offers in their stead a series of direct, fact-based indicators for evaluating progress tied to a specific, bounded definition.

Professor Mungiu-Pippidi’s chapter deserves the closest attention by policymakers, evaluators, and citizens who want to know if an anticorruption law, policy, or strategy is making a difference. This post builds on and complements her work in two ways.

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Is it Too Late to Corral America’s Wealthy? Casey Michel’s United States of Oligarchy

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The discovery that Anthropic and OpenAI were able to freely roam cyberspace after escaping their sandbox triggered global alarm bells. If AI programs can break out of the electronic guardrails that prevent their running amok, there is no telling what havoc they might wreak.

Casey Michel, Director of the Combating Kleptocracy Program at the Human Rights Foundation, writes about escapees from a different sandbox in the United States of Oligarchy. The escapees: members of America’s billionaire class. The sandbox: the ethics codes, social norms, and laws that constrain the conduct of America’s wealthiest.

Michel recounts the harm Elon Musk, Peter Thiel, and fellow billionaires have already done while operating free of these constraints. He describes the far greater damage likely if those constraints are not soon reimposed and urges reforms to ensure the ultra-rich can never again break out.

Today’s billionaires are not the first to have slipped the sandbox’s guardrails. United States of Oligarchy reminds that the same techniques that fueled the rise of Carnegie, Rockefeller, Stanford and other nineteenth-century “robber barons” – bribes, shell companies, large campaign contributions – have helped today’s counterparts realize unimaginable levels of wealth. But there are profound, startling differences between the two. The first generation of robber barons never made common cause with autocratic regimes; their activities never compromised the nation’s security, and they never rejected the democratic ideal.

That’s the indictment Michel lodges against the current generation, plain by his subtitle: How America’s Wealthiest Ally with Dictators, Weaken the U.S., and Destroy Democracy.

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Review of Robert Barrington’s Corrupted Kingdom

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Corruption now threatens one of the oldest and most established democratic nations. In a 2024 poll, two-thirds of Britons said politics is becoming more corrupt (here), and in 2025 nearly 9 in 10 expressed concerns about potential corruption among politicians (here). Over the past year 16% reported being asked for a bribe, and 11% were asked to facilitate money laundering (here).

U.K. anticorruption fighters are taking heed. None more than Robert Barrington. In Corrupted Kingdom, out July 16 (preorder here), the former Transparency International U.K. head and Chair of T.I. International’s Council chronicles the ways corruption has begun to infect venerable U.K. institutions: from the Monarchy, where the now deflowered Prince Andrew’s flacked for a Kazakh oligarch in return for £ 3 million to Parliament, where MPs are secretly paid to question Ministers and seats in the House of Lords are on offer for hefty campaign contributions, to Scotland Yard, local governments, and businesses small and large.

It is even seeping into the academy. Currently Professor of Anti-Corruption Practice at Sussex University’s Centre for the Study of Corruption, Barrington argues that the growing willingness of universities to accept dark money compromises their independence and their integrity.

British and non-British readers will both find much to recommend in the pages of Corrupted Kingdom.

British readers are likely to be most interested in the reforms Barrington advances, from beefing up “dull sounding” but important accountability institutions such as the Auditor General for Wales and the Northern Ireland Audit Office to teasing out whether the U.K. should create a formal, institutional structure, even an independent anticorruption agency, to replace the current arrangement, a patronage position in the PM’s office whose occupant has no official status and whose advice is easily, and often, ignored.

Citizens of other liberal democracies will find (reassuringly or depressingly) that theirs is not the only country where abuses stemming from large donations to political parties orchestrated by lobbyists is a front-page problem. Americans may take some solace from learning that Boris Johnson’s short-lived reign as PM approached Trumpian-levels of corruption.

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