Janine Wedel - Unaccountable - How Elite Power Brokers Corrupt Our Finances, Freedom, and Security

• In the old world, players had more defined roles and agendas; now they are more apt to glide among them in an ill-defined blur.

• In the old world, you could point to the official or lobbyist or interest group wielding influence. Today, players and corporations can use nonprofit or “grassroots” organizations to press their case—but you’d never know it because, more than in the past, they don’t need to disclose who writes the checks.

• In the old world, the long term was actually long. In the new world, whether in finance or media, short-term results are prized; actions and impact are measured in hours, minutes, or even micro-seconds.

• In the old world, the media were more focused on real news; now, “likes” and page views shape what becomes “news,” and much airtime and Web space consists of mere “performances” to catch our attention and convince us that action is happening when it hardly is.

• In the old world, it was easier to locate a bureaucrat who was responsible for solving your problem. Today, you get trapped in an endless phone maze powered by technology, leaving less room to maneuver the outcome to your advantage.

• In the old world, we, the public, were not implicated. In the new world, we are complicit the moment we turn on our computers, hand over personal information, and “agree” to conditions that we say we have read but, of course, have not.

• In the old world, those who betrayed the public trust might be found with cash stashed in their freezer and end up in handcuffs. In the new world, no money passes hands, and no one lands in jail.

• In the old world, people recognized others’ moral failings; now everyone can blame the “system.”

Whether it’s trying and failing to figure out whose fingerprints are on public-policy decisions, who is calling the economic shots, or whose dollars are funding various politicians, we are up against shadow influence that is difficult to discern and sometimes even anonymous. This isn’t a conspiracy. As we’ll see throughout the book, many policies that affect us all are no longer molded by conventional power elites, lobbyists, interest groups, or influencers that we can identify and therefore hold accountable. When we can’t pinpoint who has the authority to fix the problem, then lobbying, bribery, or other traditional influencing mainstays don’t work. Meanwhile, there are unregistered lobbyists, campaign financiers, and other shadow influencers who operate in and around government, business, nonprofits, and media. How can we decipher their actual agendas and tangle of roles? How can we know whom to trust, when “experts” besiege the Internet and airways, pronouncing on crucial public-policy issues and presenting themselves as impartial and objective, all the while concealing that they actually have a dog in the fight? In short, how can we have any modicum of trust in public institutions that seem to be so accountability-challenged?

Whether it’s the behavior of public figures or the behavior of public institutions, the new corruption is anchored in unaccountability. 5Unaccountability, as we shall see in the next chapter, is structured into the DNA of many of today’s corporate and governmental organizations. It is an essential but incomplete condition for the new corruption—the violation of the public trust.

For the past several decades, I have been considering what happens to society when the public no longer trusts its institutions, leaders, and public figures—in places as diverse as communist states (where they seldom did) and Western democracies (where not long ago they did much more so). What happens when the accountability needed to sustain that trust is absent from our interactions with the organizations and functionaries on which we daily rely? Or with our relations with once-respected public figures?

I began my explorations in communist Poland in the 1980s and have continued them in the United States. Throughout my career as an anthropologist, I have seen it as my mission to explain the changing profile of power and influence, and how people both break and create new rules of the game.

Today I am not surprised that people are outraged. Privacy virtually everywhere is under siege, whether by faceless spymasters at the U.S. National Security Agency, through the likes of Google and Facebook, or by government and corporations in concert. 6Outrage at government and public institutions on nearly every continent, especially since the global financial crisis of 2008, reflects the public’s frustration. The economy continues to stagger with hardly anyone punished for rampant financial abuses. In this fraught environment, the absence of trust threatens to become a permanent feature of our civic life. Some of the chief culprits are even “failing up”: bubble-wrapped from the adversity they helped create, they continue to land influential jobs despite their spectacular and well-publicized errors of judgment and often of ethics.

That’s in part because they are conquering media, new and old. The powerful are performing and branding themselves and their preferred narratives on every conceivable digital and old media outlet, leaving satirists like Jon Stewart and Stephen Colbert more truth-tellers than the more sober media, something strongly reminiscent of my time in Eastern Europe under communism.

Meanwhile, the rest of us are exposed to the consequences of the culprits’ misdeeds, with little recourse to challenge the practices that now govern our private information and public policy.

Betrayal of the public trust is at the core of age-old notions of corruption, such as those revealed in texts in the Bible and the Qur’an. 7At the same time the most common, internationally sanctioned understanding of corruption today is “the abuse of public office for private gain,” as propounded in the late 1990s and promoted around the globe by Transparency International, the World Bank, and other organizations. 8Straightforward corruption such as bribery is still common and causes outcry in countries around the globe. Yet the older and, I believe, more currently relevant notions of betrayal of the public trust appear to be closer to the hearts of many protesters—and lie at the heart of the new corruption.

In the United States and many European countries, the new corruption may have surpassed the old. Across Europe, with entire economies devastated, signature Western banks colluded with feckless local leadership.

Look at the destruction and global ripple effects wrought by Standard & Poor’s, which took cash to bestow AAA ratings on worthless investments in the mid-2000s. 9Then there’s Goldman Sachs, which pursued an express policy of placing its “alumni” in top government positions in the United States and around the world, like former Goldman managing director Mario Draghi, installed in 2011 as president of the European Central Bank. Goldman, along with other top U.S. banks, “helped” struggling European economies like Greece, Italy, and others hide their debt in the early 2000s and, according to the New York Times , was still “helping” avert the inevitable crash in late 2009. 10Such collusion between Goldman and government leaders cannot help but fan the flames of public mistrust.

In still another case, known as the ABACUS deal, in 2007 Goldman devised investment vehicles for one client without disclosing to other clients—including pension funds, insurance companies, and foreign banks—that they were being set up to lose billions. Notably, this was a case in which regulators actually did try to accuse the company of outright fraud. Yet the matter was settled in 2010. Why? In the eyes of many observers at the time, the government didn’t have a strong case. But in 2014, a retiring U.S. Securities and Exchange Commission trial lawyer let loose at his going-away party. James Kidney, who’d been with the SEC for decades, was apparently one lawyer gunning for more charges against executives. 11He lost the internal fight, but his parting shot was memorable. Kidney told colleagues and well-wishers that the SEC is “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors. On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.” 12