Thieves of State: Why Corruption Threatens Global Security (14 page)

For Amin, as for Auf, such “weakness of the state encourages corruption.”

But perhaps the truth is the opposite. Perhaps corruption was not the result of Egypt’s “soft state” but rather its cause. Perhaps the primary objective of the Egyptian state shifted in the late 1990s from governing to the extraction of resources for personal gain, and the softening of the state resulted from that change in focus. The subsequent decade witnessed the transformation of the Egyptian government into a criminal organization—or more accurately, two organizations, controlling different
levers of state power: the military (for which the people retained a degree of affection), and the clique of crony capitalists that had coalesced around Gamal Mubarak, and was rapidly expanding its reach.
^†

The budding competition between the two networks—and the military leadership’s realization that if Gamal Mubarak succeeded his father, its privileges would no longer be sacrosanct—may help explain the relative military passivity in the face of the 2011 revolution.

I
N
J
ANUARY
the indignant Egyptian population, pushed beyond the breaking point by the kleptocratic transformation, erupted in a nonviolent, nonsectarian revolt. Abusive corruption brought down the Egyptian “prince”—as Machiavelli and so many other mirror writers had warned that it would.

It was not a religiously inspired uprising. In fact, a majority of engaged Egyptians later recoiled at the Muslim Brotherhood’s ability to use its entrenched local networks to capture the fruits of a revolt it had been slow to join. Still, many, at least initially, saw the Brotherhood as the only clean alternative to the old regime. That reputation contributed to its electoral victories.
¹³
Extremist Salafi movements, nearly unheard of under Mubarak’s repression, burgeoned after his demise, winning more than a quarter of the votes in the 2011–12 parliamentary elections.

Some Egyptians have taken the demand for theocratic government to further extremes, rejecting politics altogether. In disproportionate numbers, they achieved leadership positions in armed groups such as Al Qaeda, which disputed the Brotherhood’s long-standing decision to eschew violence. In 2009 the Egyptian Ayman al-Zawahiri, who would become Al Qaeda’s leader after the death of Osama bin Laden, argued on an internally produced video that “there is no doubt that the Egyptian regime has reached a level of corruption, filth, and agency that is unbearable.” But, he insisted, Mubarak and the rulers of most other Arab countries “cannot be changed except by force. . . . The attempt to
change the regime internally and through its laws and constitution will only lead to more corruption and oppression and dependence.”
¹⁴

Subsequent events in Egypt, many supporters of the Muslim Brotherhood would argue, have confirmed al-Zawahiri’s words. The Islamist movement’s political party ran in national elections, squeaked out a victory, and rewrote the constitution in line with its ideology. Hardly a year later, on behalf of a new generation of military leaders, the old security services moved in and toppled the Muslim Brotherhood–linked administration. They were applauded by millions of Egyptians, who feared that a crony-capitalist kleptocracy had merely been exchanged for a religious one. The streets of Cairo became a war zone, as hundreds of Brotherhood supporters were shot down amid the wreckage of the tents and flimsy barricades they had erected.

Nursing their wounds, many Islamists—especially the young—are ruefully acknowledging Zawahiri’s prescience. “When the Muslim Brotherhood was completely destroyed in the coup and disintegrated,” says Anas Hassan, a former member of the Brotherhood’s youth organization and founder of the online news site Rassd, “it was the kiss of life to the Al Qaeda ideology. Now it is as if Zawahiri speaks out every week, to say ‘I told you so.’ No Islamist doesn’t have at least five friends who were killed in Raba’a Square. And the way we were killed was very violent. So the theory of working inside the state crumbled for us inside our minds. Now nothing prohibits us from using violence. The social contract has dissolved. Stealing the weapons of the state to take it down is acceptable.”
¹⁵

Indeed, the crackdown seemed designed to radicalize Muslim Brotherhood members. Just as Algeria’s generals had done twenty years earlier, the Egyptian military erased any remaining distinctions between nonviolent political Islam and radical extremism, by branding the Muslim Brotherhood a terrorist organization. “All Islamists will find themselves labeled as terrorist,” says Anas. “This game was forced upon us. And so we have to play it to the end.” And indeed, violent attacks on Egyptian government installations have intensified, as the terrorist label became a self-fulfilling prophecy.
¹⁶

*
In this regard, as in others, the variation described here fits Pakistan as well as Egypt. There a formerly governing military, which has lost every war it fought against archrival India, controls a significant proportion of the economy. Pakistanis still largely view the military as the most “competent” national institution, turning their ire instead against the corruption of the civilian leadership. A notable difference between the two countries is that the Pakistani military actively cultivates violent religious radicalism, in order to advance national security priorities in India and Afghanistan. As a combined result of both phenomena, the country is grappling with one of the most expansive extremist insurgencies in the world and has harbored Al Qaeda leaders for years.

†
For a diagram, along the lines of the one that depicts Afghanistan’s kleptocratic system, please see
Appendix
.

CHAPTER EIGHT

Variation 2: The Bureaucratic Kleptocracy

Tunisia, ca. 2010

D
isembarking on Tunisian soil in the spring of 2011, hardly a month after an entrenched despot was toppled by a popular rebellion, I was astonished at how smoothly the formalities went. The line to clear immigration was orderly. An officer ran his computer checks, stamped a red oblong into my passport, and I was through. Somehow I had expected more drama. I was not yet accustomed to the Tunisian bureaucracy: efficient, unwavering, quietly executing the directives of the state—whoever might be running it.
^*

Tunisia is squeezed between the turbulent giants of Algeria and Libya on the North African coast. The capital, Tunis, tilts its chin up to the bright Mediterranean sun, the sea breeze ruffling red and white flags strung from balcony to balcony across the alleys of the old kasbah. It’s a white city, edged in sky blue, round arches picked out in black and white marble, arabesques of decorative nails gracing ancient wooden doors. Thoughtful street art speaks louder than words. The passion and pride in what the tiny country had just wrought still charged the
air when I arrived, early enough to witness the first efforts to convert revolutionary fervor into political organization.

It came as a shock to observers when the spark that ignited the Arab Spring flared in this of all places. Of all Arab countries, Tunisia seemed the best in the class: stable, presentably secular, engaged in a steady process of “economic reform.”
¹
A week earlier most of my Pentagon colleagues would not have been able to place it on a map. No one would have pegged it to touch off one of the biggest international upheavals in decades.

Like the Egyptians who would soon emulate them, Tunisians were pushed over the edge by the ostentatious behavior of a clique of self-serving crony capitalists, centered on the family of their ruler.
²
In this case, it was the longtime dictator’s second wife, Leila Trabelsi, who got the blame, and her brother and a nephew and the husband of the daughter she had had with Ben Ali before they wed.

That marriage, in 1992, marked the moment when “everything changed” for Tunisia, according to locals. “With no shred of scruple, they looked upon Tunisia as a vast personal enterprise that they could tap at any moment,” writes Lotfi Ben Chrouda, who worked as a servant in the Ben Ali household for nearly two decades.
³
He describes orgiastic parties, foreign delicacies delivered to Tunis via diplomatic pouch and rushed from airport to palace by police convoy. That would be the palace whose storerooms resembled Ali Baba’s cave.

In the early fourteenth century, Walter of Milmete, who wrote a mirror for the future English king Edward III, warned of certain courtiers’ boundless hunger for wealth, a dangerous addiction untethered to real-world needs: “the covetous are always grasping and . . . are never sated, because the more they possess, the more they desire.”
⁴

Karim Ben Kahla, dean of one of the country’s top business schools—the Institute for Accounting and Business Administration at Manouba University—recalls a 2010 awards ceremony for student athletes, featuring the kind of pomp Ben Ali family members presumed was their due. He was herded outside, along with other professors and official guests, to greet the young son-in-law as he drove up in his Porsche—like an honor guard bowing before some visiting potentate. “It was humiliating!” Ben Kahla exclaimed.

Ben Kahla—who studied other examples of acute corruption as an expert with the African Peer Review Mechanism
⁵
—dated the “mafiazation of the [Tunisian] state” to the late 1990s, the same period Egyptians identify as the time Gamal Mubarak’s kleptocratic network emerged. And again, it was economic liberalization that provided the ruling clan its opportunity. “The telecom sector attracted them,” says Ben Kahla, “well-known international companies like Danone, and of course the banks.” Leila Trabelsi’s clan placed favorites in senior management positions, even at foreign financial institutions launching operations in Tunisia.
⁶

To pinpoint the shift in the family’s fortunes, Ben Kahla points to its indebtedness. As late as 2002, according to a list that was leaked to the press that year, Trabelsi’s brother Belhacen ranked quite low among indebted businessmen. “After that, though, it was a very fast rise,” remarks Ben Kahla. His argument seems counterintuitive—being in debt can be a calamity for ordinary people. But not within Tunisia’s budding kleptocratic system, where no one expected Belhacen to repay his ballooning loans. The banks were giving away free money to him and other insiders, with the assurance of recapitalization from state coffers. Tunisia was becoming what Ben Kahla dubs a “feeding-trough state.”

In
La force de l’obéissance
(
The Force of Obedience
), one of the most careful and well-documented studies of corruption anywhere, the French scholar Béatrice Hibou details the role of the financial sector in enabling the elite capture of Tunisia’s economy—essentially by serving as a piggy bank: “The system of nonreimbursed (or nonreimbursable) loans . . . is a massive reality which has a macroeconomic, macrosocial, and macropolitical significance.”
⁷
Political connections were usually key to accessing the free money.

The relationship can be direct, as in the case of the crony of the inner circle to whom a banker cannot refuse a loan—even if he knows in advance it will never be repaid. It can also be indirect, via cutouts. Numerous loans have been granted to perfectly insolvent individuals who are known to be the intermediaries of these same cronies. Many public enterprises have been ceded to them, directly or via straw men . . . the operation financed by a nonreimbursable loan granted by the banks.
⁸

Imed Ennouri, the public accountant on the postrevolution commission charged with tallying the Ben Ali assets, confirmed Hibou’s analysis: “Every year there was a list of loans that were written off. Accountants would sign off on the decisions to keep getting work.”

Such practices were made publicly palatable by an emphasis on the businesses’ contributions to job creation, or on the need to support critical sectors of the Tunisian economy
⁹
—arguments that were used again after the revolution to fend off calls for accountability.

Shaped as I was by my long Afghan immersion, I was struck by the prominent position the financial sector occupied within the Tunisian kleptocracy. Though Afghan ruling networks pillaged the Kabul or Azizi banks too, banking was almost a curiosity in Afghanistan. Most transactions were still made with worn and crumpled bills, taped or even sewn together when they ripped. Tunisia’s modern economy featured branches of well-known European financial institutions and a widely respected central bank. That such a sophisticated banking sector should serve as a wholesale clearinghouse to transfer national revenue into the hands of elite networks shows how embedded the kleptocracy was in formal structures.

Many of the other revenue streams the Tunisian first family captured are typical targets of acute corruption. As in Egypt and Afghanistan, public land was especially alluring. The former Ben Ali servant Ben Chrouda describes the clan’s vast construction projects on the choicest and most historic parcels of seafront real estate, to which army engineers and agriculture or health ministry specialists were required to contribute their expertise.
¹⁰

In Afghanistan, access to water determines a piece of land’s value. In Tunisia, the key factor is suitability for tourism. The town of Kelibia faces Sicily on a fertile peninsula reaching deep into the Mediterranean. Great chunks of Roman columns lie strewn behind fences; Punic sites can be found yards away. The silky, ash-white sand on the main public beach sings out underfoot. But the shoreline is scarred by huge hotel complexes, several of them investments by Ben Ali cronies. Giant cranes bar the skyline.

In the summer of 2012, protesters gathered outside a mustard-colored compound. Dumping truckloads of coarse, yellow sand on top of the fine
local variety, its owners were encroaching on one of the last stretches of public beach. As is typical in the Tunisian tourist trade, this hotel functioned as a closed system, the protesters said. A partnership with Italian investors, it employed no Tunisians except for a few guards, and shipped in all its foodstuffs from Italy. Not even Tunisia’s luscious olive oil reached its tables. And like other seaside resorts, its beach access was off-limits to locals.