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- Convenor:
-
John Heathershaw
(University of Exeter)
Send message to Convenor
- Chair:
-
Jacqueline Klopp
(Columbia University)
- Discussants:
-
Erica Marat
(National Defense University)
Jody LaPorte (University of Oxford)
- Formats:
- Panel
- Theme:
- Political Science & International Relations
- Sessions:
- Saturday 16 October, -
Time zone: America/New_York
Long Abstract:
There is an increasing understanding, in both academic literature and policy discourse, that the issue of grand corruption affecting developing, resource-rich countries – kleptocratic states – cannot be addressed without considering the Western ‘gatekeepers’ or ‘enablers’ of corruption. The objective of this article is to flesh out of the value chain of service provision going from, to Western boutique firms or 'rogue' service providers, and ultimately reaching out to the large blue-chip firms. The panel is composed of a set of papers from a Global Integrity Anti-Corruption evidence project on the international architecture which enables and disables kleptocratic state actors and associated elites across borders. The scope of the project is cross-regional, allowing systematic comparison between Post-Soviet Eurasian and postcolonial African cases. We document our findings regarding how and to what ends professional enablers support kleptocratic elites in laundering their monies and reputations.
Accepted papers:
Session 1 Saturday 16 October, 2021, -John Heathershaw (University of Exeter) Alexander Cooley (Columbia University) Ricardo Oliveira (University of Oxford )
Paper long abstract:
What is the global social context for the insertion of authoritarian elites into the putatively liberal international order? Drawing on cases from our work on Eurasia and Africa, and published data from Knight Frank’s The Wealth Report, we sketch a concept of ‘transnational uncivil society’ which we contrast to ‘transnational activist networks’ (Keck & Sikkink, 1998). While the latter denotes the liberalising practices of global civil society, the former suggests a specific series of clientelistic relations across borders which are freighted with contending norms. Rather than proposing a distinct and explanatory theoretical framework, we posit this distinction as animating a growing line of conflict in global politics between activists who seek to cross borders and sovereign elites who are no less mobile. For these autocrats to not merely eject liberal activists from their own territories, but create new spaces to craft their own ‘moderate’ reputations and build their own global networks, they hire political consultants and reputation managers, engage in very public philanthropy, and form new relationships with major global institutions. In this paper we show how these strategies of reputation-laundering are neither illicit nor marginal, but very much a product of the actors, institutions and markets generated by the liberal international order. After comparing and contrasting the scope and purpose of civil and uncivil society networks, we explore the increasing globalization of Eurasian and African elites as a concerted strategy to distance themselves from associations with political and economic failings in their home countries, and recast themselves as productive and respected cosmopolitans. We focus on the concept of reputation-laundering and elite “whitewashing” as a central purpose of the activity of Transnational Uncivil Society Networks.
John Heathershaw (University of Exeter) Tom Mayne (University of Exeter) David Lewis (London School of Economics) Tena Prelec (University of Oxford)
Paper long abstract:
How does do political dynamics in kleptocratic states play out transnationally (in an inside-out direction) and how do international anti-corruption initiatives play back in to the domestic space (in an outside-in direction)? To answer these complex questions, we trace the relationship between domestic political status and international anti-money laundering (AML) actions by focusing on four case studies of UK real estate purchases by elites from Central Asian kleptocratic states (Dariga Nazarbayeva, Temur Kulibayev, Gulnora Karimova and Maxim Bakiyev). We theorize that there is a stronger causal relationship in an inside-out direction than outside-in. Where AML investigations succeed they do so because the PEP has already lost office or good standing; where the PEP has retained their position they are able to defend the UWO. These cases fail where office is or has been retained. Moreover, we suggest that AML procedures may be used by kleptocratic regimes in order to fully expel an out-of-favor colleague. Via court documents and open source research, we mix qualitative comparative analysis with process tracing to test this theory. Our findings broadly affirm this theory but also point to the key variations in the casual process where professional enablers based in rule-of-law systems protect favored elites from rule-by-law settings. Not only are ‘enablers’ wittingly and unwittingly conspiring with national kleptocracies but regulators lack the resource to push back against the professional enablers.. The policy implications of the findings for the design of international AML instruments are evident and are expounded on in the conclusions.
Tena Prelec (University of Oxford) Ricardo Oliveira (University of Oxford )
Paper long abstract:
The paper provides an explanation of the 'conveyor belt' that allows Politically Exposed Persons (PEPs) to rehabilitate their money in the West, while inserting Nigerian material in contemporary debates. The research questions tackled are: 1) Why is the regulatory system in the West still not efficient enough to stop enabling practices? 2) How does this bridge between the three steps occur? 3) What is it that makes these 'fixers' acceptable to blue chip companies? To answer these complex questions, we build on incipient and developing literature on enablers and flip the angle of analysis from the service providers to the PEPs themselves, in order to appreciate the loopholes that an often-adopted institutionalist perspective, on its own, might not be able to catch. To these ends, the article traces the trajectory of established money laundering practices by focusing on three in-depth case studies of Nigerian PEPs and their enablers: James Ibori, Dan Etete and Alison Diezani-Madueke. Data collection has been carried out through the close reading of close to one hundred documents, including court proceedings, interview transcripts and land registry records, and complemented by semi-structured interviews with investigators and experts. We use an interpretive practice tracing methodology elucidate and test the steps leading to money-laundering. Our findings show that the ‘rogue operators’ explanation is insufficient: once the groundwork of the ‘boutique’ actors legitimises the PEP’s actions, larger firms willingly take on board the business. Furthermore, we show that the problem is wider than the ‘conventional’ enablers: we pinpoint professional figures who are not conventionally treated as enablers, but who are nevertheless instrumental in the accumulation of illegal gain and money laundering (e.g.: commodity traders).
Tom Mayne (University of Exeter)
Paper long abstract:
Unexplained Wealth Orders (UWOs) were introduced in the United Kingdom as part of the Criminal Finances Act 2017. They are an investigative tool, a form of disclosure that in effect reverses the usual burden of proof regarding the source of funds used to buy property in the UK. Instead of law enforcement officials having to prove that a property was purchased with illegally obtained capital, the owner has to demonstrate that the funds were legitimately earned. In 2019, the UK’s National crime Agency (NCA) brought one the first UWOs against a property whose ultimate beneficial owner was thought to be the deceased Rakhatv Aliyev, erstwhile son-in-law of former President Nazarbayev. Unfortunately for the NCA, it turned out that the real beneficial owner was Dariga Nazarbayeva, daughter of former President Nazarbayev, and a person who remained alive, wealthy, well-connected and well-served by the leading law firm Mishcon de Reya. In 2020, the UK’s National Crime Agency lost the case; however, documents from the court case and additional open source research provides a rich trove of sources for an exemplary case of how enabling works. Our paper dwells on three conditions that allowed the Aliyev/Nazarabyev suspicious wealth to be explained. First, we look at the network of enablers from company formation agents to lawyers who enabled the purchased. Second, we consider the process of legal enabling, the evidence accrued and arguments made by Mishcon de Reya to successfully defend Nazarbayeva. Third, we explore the weaknesses of the legislation and its enforcement that led to the ultimate failure to end impunity for kleptocratic elites. We conclude by placing our exploratory findings in a wider context of anti-corruption and point to areas of policy implication and further research.