Thieves of State: Why Corruption Threatens Global Security (12 page)

“We want Tunisia to be a democracy,” a woman explained to me. “We want to break with corruption. But we do not want political Islam. The Islamist party has always set itself up as the only alternative to corruption.”

Militant political religion as the only alternative to corruption. That was just the nexus I had seen in the Taliban’s appeal in Afghanistan, and in the frequent presence of extremist insurgencies in other acutely corrupt countries. Public integrity, the proposition seemed to be, could only emerge through the rigid purity of religious practice—imposed by law if need be, or savage violence.

I met with two members of the interim cabinet—a collection of brilliant technocrats, most of whom had been working abroad. How I wished we’d had talent like that in Afghanistan. They too were still reeling at the extent of the corruption, whose dimensions even they had never imagined.

“The development gap has grown unimaginable,” remarked Interim Finance Minister Jalloul Ayed, recently of Citigroup—so no stranger to excess. “Ben Ali and his family went berserk. They went on a wild spending spree that offends the social mores of this country. We weren’t raised like that.” Interim Transportation Minister Yassine Brahim could not summon words to describe the scene he discovered at the port of Tunis. He just shook his head, wincing. A story making the rounds referred to a court photographer, whose job was to go to the high-society weddings and snap pictures of beautiful girls who would then be invited to Ben Ali family parties.

The behavior was lifted directly from Machiavelli’s warning: “To be rapacious and usurp the goods and the women of his subjects, that is above all else what will make [the prince] hateful.”
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While remarking on the evident fact that their revolution was not
anti-American in character, these ministers and others did raise questions about the responsibility of international actors. “U.S. policy is not in line with its values,” said an Afek Tounes member, echoing comments I had heard across North Africa. Another young activist questioned international lending practices, pointing out that International Monetary Fund and European Union loans had gone into the pockets of the regime. “If investigation confirms that the money never reached the people but was stolen,” he wondered, “could that debt be forgiven?”

Queries like these raise important issues about the ethics, but also the advisability in international security terms, of active and passive collusion with kleptocracies. Governments and multinational institutions, private businesses as well, should weigh them with more consideration than they have in the past.

Finance Minister Ayed was even more direct than the young activist. “We have seen nothing from the United States,” he remarked acidly. A congratulatory phone call, a few bracing words from Secretary of State Hillary Clinton, and that was it. “Something extraordinary is happening here, bigger than anything since Hannibal. It would cost a fraction of a fraction of what Washington spent on Iraq, for the same result that was desired there.”

Tunisians called for a Marshall Plan, to demonstrate to an expectant population that peaceful revolution could deliver results: “Eight to ten billion would transform Tunisia within a decade,” said Sami Zaoui, another former businessman, who had thrown himself into a nonprofit in the wake of the revolution. “And the knock-on effect across the region would be huge.”

Beneath these Tunisians’ urgency floated a growing fear, whose contours were already visible. If their revolution against kleptocracy did not deliver some palpable measure of improved social justice, the people, in their frustration, might radicalize after all. “Tunisia might become like Iran,” said Zaoui.

T
HAT MONTH
spent in the vortex of the Arab Spring in 2011, together with subsequent trips, reinforced beyond even my most expansive predictions a maturing hypothesis. The wave of protests, the toppling of
four governments, and the rocking of three others amounted to a mass uprising against kleptocratic practices.

That spring millions of Arabs chose a constructive way to force change. They chose political revolution—a peaceful, civic, inclusive, and responsible form of revolt—directed squarely at their own leaderships, not at Western countries, not even those seen as regime allies. But it was revolt nonetheless. It sent shock waves across two continents and spun off several protracted, bloody conflicts. Its unfinished episodes, in Bahrain, Egypt, Libya, and Syria, at least, presage further violence.

Throughout, Al Qaeda and like-minded militants crouch at the ready. As they have in Iraq, radical groups will exploit grievances that go unredressed. They will enforce a rigorously puritanical code of behavior, holding it out as the only prospect for achieving conscientious government in the interests of the community instead of the self-indulgent few. They will prescribe a purification of religious practice as the recipe for morality in public affairs.

Beyond the Arab world as well as within it, a closer examination of a few emblematic countries reveals remarkable patterns. Residents of many kleptocracies describe a qualitative change at the turn of the millennium, give or take a few years. Something seems to have gone off the rails around the late 1990s, as governing cliques turned economic liberalization policies—together with a newly indulgent public morality—to their personal advantage.
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The role of extended ruling families, especially women, in masterminding the heist has attracted popular outrage. And yet many of these cabals deliberately invited members of subordinate ethnic groups or religious sects into their networks, thus welding the top of the structure across the very divides that separate the sufferers.

While obeying the same basic kleptocratic principles, ruling networks may cannibalize different state functions, or lay hands on different sources of revenue, as a function of their countries’ divergent histories, institutional structures, and assets. The results read like variations on a theme.

CHAPTER SEVEN

Variation 1: The (Overlooked) Military-Kleptocratic Complex

Egypt, ca. 2010

“T
he people . . . the army . . . one hand!!”

With this cry—part statement of a counterintuitive reality and part fervent prayer—masses of Egyptians in January 2011 threw themselves off the precipice of their predictable lives toward an incalculable destiny. The slogan rose from thousands of hoarse throats, was printed and painted on banners and posters and the walls of buildings across the electrified continent that is Cairo. Matrons put conscripts in headlocks to plant wet kisses on their cheeks. Young protesters leaped aboard tanks to clasp the hands of their age-mates in uniform.

This sentiment presented the world with a riddle. How was it that Egyptians, in throwing off a military dictatorship, were joining hands with the very same military?

Central to the demands of the Egyptian revolutionaries was a halt to the rampant corruption that disfigured the government of Hosni Mubarak. Mug shots of ministers on huge placards and banners were striped with jail-cell bars—an urgent appeal for punishment of the guilty and an end to systematic impunity. “I was in prison for nine years,” one demonstrator shouted at me that spring, the pain of it still cracking his voice. “I ate off the floor. I want these people to suffer a single day like I had it in jail.”

“If you care about democracy,” challenged another, “then use Mubarak’s assets to pay off our national debt, and send the leftover money back to Egypt!” Protesters were demanding the return of stolen or squandered funds and their reinvestment to benefit the general interest.

Ironically, the Egyptian military is hardly innocent of just the type of arrogation of public resources the protesters were denouncing.

“Our involvement in the economy began with the 1967 and 1973 wars,” related General Muhammad el-Kishk during a quiet 2013 conversation at the Artillery House, one of the vast, manicured clubs, open only to military officers, that line the broad streets of Nasr City in eastern Cairo. “We needed to provide for ourselves. In such emergency situations, we did not want to be requisitioning food from the mouths of the population.” The initiative started with commissary, which led to a large parallel economy, including farms and wholesale imports, for such necessities as flour, dried legumes, cooking oil, and natural gas. “What surpassed our needs,” continued el-Kishk, “we sold on the market. And people bought it. Our products were better quality, at about the same price,” he asserted.

To explain the Egyptian military’s expansion into other economic activities, el-Kishk cited the example of communications equipment. “We started making two-way radios. But after a while the market just couldn’t absorb our production. We had the factory and the workers. We didn’t want to lay them off. So we launched a new line of products.” Now, apart from excessive numbers of antiquated M1A1 tanks, the Egyptian military oversees the manufacture of items ranging from jeeps to spaghetti—while also running day care centers and building roads and bridges across Egypt.

Egyptian and Western scholars who have highlighted this military penetration of the economy (figures range from 5 to 40 percent of total output) acknowledge the difficulty of estimating its dimensions. “Not only are army holdings classified as state secrets—reporting on them can land a journalist in jail—but they are too vast and dispersed to estimate with any confidence,” write Shana Marshall and Joshua Stacher.
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Clearly, though, the activities “add up to a very large, unaccountable, nontransparent Military Inc.”
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“Nontransparent” is the word.

A 2013 visit to one of the factories of the Arab Organization for Industrialization,
a conglomerate established by the Egyptian military and several Gulf counterparts in 1975, felt like stepping through a time warp into some Soviet-era top-secret laboratory.

A lemon-edged brick wall enclosed tree-studded grounds, a conspicuous contrast to the dirt-brown, trash-choked dereliction that is much of downtown Cairo. Watchtowers manned by uniformed conscripts punctuated the wall’s heights. Another conscript waved my taxi through the main gate. There were few signs of life. The entrance foyer was deserted, a silent television playing scenes of the pilgrimage to Mecca. I mounted the stairs. A surly employee ordered me into a conference room, where ranks of well-kept black vinyl chairs from the 1970s stood at attention before an empty podium.

Two female engineers from the research and development department appeared and commenced an interrogation. Who was I, where was I from, what was my purpose, what did I intend to do with the information? A frown of suspicion creased the chief intelligence officer’s brow as she challenged each of my replies. At length she gathered her notes and bustled out of the room—to return with an archaic if glossy folder of brochures, which would answer all my questions, together with the CEO’s refusal to let me see the production line, though the visit had been arranged days before.

As I tried to reschedule the tour over the next several hours, I was able to strike up conversation. The factory, it emerged, merely assembled low-grade Chinese components for electronics goods visibly below the standards of readily available Samsung or Sony alternatives—as a subsequent visit to one of the conglomerate’s dusty showrooms made plain. Its line of computers, discontinued since the 2011 revolution, had been sold only to government ministries. The twelve-person research and development department was puzzling over circuitry for a prospective solar streetlight project, also aimed at government purchasers. Both engineers acknowledged the lack of innovation. Young graduates were hired right out of college or technical school and tended to cycle through on their way to higher-paying jobs in the private sector, at least till the mid-2000s. But “once they leave, they are not allowed to return.” So the company is sealed off from the dynamism of today’s information technology sector.

Military foodstuffs, considered of poor quality by consumers despite el-Kishk’s claims, also fail to command much of a market. At best, the products enjoy preferential access to some public tenders, such as the ministry of youth and sports canteens. The army’s construction companies corner a large share of public works projects, admittedly doing a creditable job at such tasks as road building.

Asked if there was any macroeconomic design in all this activity—if the military was tailoring its commercial undertakings so as to promote broader economic development—el-Kishk rebuffed such an idea. “We just run the companies to make profit on the open market.”

Its core function, defense, hardly bears mentioning. The Egyptian military has not seen action since the first Gulf War. And apart from a successful foray into Libya in 1977, its track record in the conflicts of the 1960s and 1970s was abysmal. Its ongoing affection for outmoded tanks—and an associated emphasis on conventional warfare—reveals a resistance to adapting its security posture to rapidly evolving threats that matches its imperviousness to industrial innovation.

Yet this military—this Potemkin force—basks in material privilege. Almost all land not currently inhabited is considered government land, and most can be acquired by the military.
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So military-run businesses and housing developments obtain the ground they are built on free of charge. Military factories and officers alike benefit from a mini–command economy, which imposes socialist-era prices on producers of sugarcane and other inputs.
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They enjoy tax forgiveness and exemptions from labor laws, as well as immunity from public oversight, since all army activities—even commercial ones—are classified as national security secrets. High-quality food and such services as accompanied transport and child care are provided to officers and their families for free or at subsidized prices.

Most egregious to many—including some lower-ranking retirees—are the luxuries reserved for the top officers. Rooms in posh resorts on the Mediterranean and Red Sea coasts are set aside for them. Conscripts attend to their needs. And desirable jobs—within such key government authorities as the ministry for local development, the administrative monitoring board, the geological and mining services agency, strategic provincial governorates, and military-affiliated companies—are
regularly filled by two- and three-star retirees, who thus enjoy salaries and opportunities for extracurricular money-making alongside their pensions.
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