The United States Can’t Address Russia Without Addressing Financial Crime

Winning Essay for the 2019 Foreign Policy and Carnegie Corporation Essay Contest


If you’ve been reading Foreign Policy and using Carnegie Corporation’s U.S.-Russia Relations website, you know that, given the United States and Russia’s history of cyberattacks, military encounters, geopolitical competition, economic sanctions—and even the risk of nuclear annihilation—getting the relationship between them right is more important than ever.

This fall, we gave readers a turn to chime in with their ideas with our 2019 student and professionals essay contest.

While Carnegie Corporation does not endorse any specific viewpoint, it strongly endorses continued thoughtful conversation aimed at improving global stability and peace. Based on originality, clarity, and argumentation, Foreign Policy picked two winners—one in the undergraduate category and one in the professionals category. The winning professionals essay is below.

To understand the role of Russia in the contemporary world, one must look past politics—specifically, past the Russian rhetoric and Western alarmism that presents Russia as a resurgent superpower bent on restoring a global empire. A country with an economy the size of South Korea’s cannot maintain such an empire. What it can do, and has done, is serve as a sanctuary for and enabler of a global criminal underworld—or rather, in light of how thoroughly that underworld has entwined itself with political and economic elites around the world, a criminal overworld. Dismantling this network of cyber- and financial crime is the single most important mission for the United States in dealing with Russia.

Russian President Vladimir Putin’s support of U.S. President Donald Trump, and his interference in the 2016 American election, has not rescinded sanctions or won the Ukrainian war. But a number of individuals with known financial ties to Russia and the former Soviet Union—including real estate and licensing deals, lobbying work, and ownership of shares of local firms—have moved into positions of power. These include figures such as Trump presidential campaign chair Paul Manafort, former National Security Advisor Michael Flynn, former U.S. Secretary of State Rex Tillerson, U.S. Secretary of Commerce Wilbur Ross, Trump attorney Rudy Giuliani, and the president himself. Questions of possible blackmail or bribery aside, these figures are entangled in a post-Soviet business world that is inextricable from both the Russian state and Russian organized crime. The publicly known extent of these ties is likely the tip of the iceberg, as more are periodically reported.

The ties aren’t limited to the United States. Commentary on Russia’s support of Brexit has focused on the fracturing of Western alliances, largely overlooking the law enforcement implications; one of the world’s most important financial centers, already a popular destination for Russian lucre, will no longer be subject to European Union money laundering regulations.

Much of Russia’s laundered money originally came from the carving up of the Soviet Union, but the same networks that enable financial crimes have also enabled cybercrime, many of its practitioners interwoven with the Kremlin. Massive hacks and data breaches, disproportionately originating in Russia, have become routine. The U.S. government has done little to address the situation, and its president is actively hostile to any such efforts.

Confronting these problems will require more than just stringent enforcement of existing laws. It will require both the negotiation of international agreements and the revision of existing ones, to establish a new global standard for financial transparency and internet security. Neither will be easy, particularly because such measures will threaten the fortunes of many wealthy and powerful people. But trying is necessary. Countries unwilling to commit to the new standards should be unwelcome in global trade and communications arrangements. Countries, organizations, and individuals supporting network criminality should be subject to sanctions and possibly even cyberoffensives. The next Panama Papers, in other words, should not need uncovering by citizen journalists or hacker vigilantes. They should be actively pursued by U.S. intelligence agencies. Institutions known to thrive off fraud and financial crime should not be allowed to operate unhindered.

Throughout, U.S. policymakers must remember that the proper target of such initiatives is not the Russian people. Russian citizens are also frequent cybercrime victims, and the fortunes being laundered through British banks and Manhattan real estate originated in the frenzy of ruthless post-Soviet plundering, which harmed them, too. The enemy is not Russia but the Russian elites who have strip-mined post-Soviet societies and their economies.

The enduring Russo-American rivalry is rooted not in differing national characters but in their deep similarities. Both were frontier societies that believed expansion was divinely ordained, part of a civilizing mission. Both have also seen themselves as the anointed champions of their particular brands of Christianity. Both have proud egalitarian traditions, which are typically honored in the breach. Both are prone to externalized paranoia, pursuing foreign conspiracies rather than domestic reforms. And both see themselves as exceptional, righteous protagonists in a world-historical play and are thus quick to interpret any setback or conflicting interest as a moral affront or existential threat.

But one difference between them is the U.S. tradition of the rule of law, which has never truly found a home in Russia, not under tsars, Soviets, or Putin. Before the United States congratulates itself, though, it should remember recent events; America’s commitment to the law has been exposed as increasingly shallow and partisan, a fragile historical contingency rather than some indelible national virtue. And it is this fragile tradition that is threatened as Russian kleptocrats export their corruption.

Their money and influence have contributed to a culture of impunity and lawlessness around the world. They have defrauded victims, likely of hundreds of billions of dollars annually. They have provided both the motive and the means for interference in Western democratic processes. And they are convincing the world that American values are empty hypocrisies. Whether the United States will try to stop it remains an open question.

Skye Thrash is a novelist based in Delaware.

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