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

Another parting shot came from a Goldman Sachs vice president. He described the violation of the public’s and client’s trust, exposing inside practices in the New York Times on the day he resigned in 2012. Here he sums up his belief that the firm violates the public’s (in this case, its clients’) trust: “I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.” 13

Still, we ceremonially attack practitioners of the old corruption. The media (TV, in particular) often cling to narrower definitions of corruption to mean simple bribery and outright fraud. They dish out, and we eat up, the images of former high-flyers handcuffed and perp-walked. In America, these include former Illinois governor Rod Blagojevich, super-lobbyist “Casino Jack” Abramoff, and Bernie Madoff, architect of the largest Ponzi scheme in history. The media had its role to play in the performance. It used all the visual symbols to cue the viewer: here is corruption, the governor with the absurd hair and endless blather, appearing for any TV audience he could find; the hulking figure with the signature black fedora and trench coat; the disgraced investor’s Italian velveteen slippers monogrammed in gold embroidery.

Blagojevich, Abramoff, and Madoff may have become symbols, but they are sideshows. Those who practice the new corruption and help create deep and lasting inequalities don’t typically land in jail. As for Madoff and his ilk, we can count their victims, they clearly broke the law, and they were prosecuted for it. They are likely to be defined as corrupt; the others rarely are, if ever. But the consequences of their actions pale by comparison to the shenanigans of the rating agencies, the Wall Street “wizards” who helped bring down the global economy, and all manner of lobbyists, including those on the vanguard who simply choose not to register formally as lobbyists, when they are quite obviously still wielding influence that we can’t see or trace. They will continue to have a far greater impact on our health, habitat, and pocketbooks, and on the execution of America’s wars.

Does that make any sense? Have the practitioners of the new corruption not violated the public trust? Isn’t that corruption at its most basic?

The rub is that the system works to catch old-style corruption, but it doesn’t work for the new corruption.

Where, for example, is the sanction or even the shame for the highfliers who leave public office and take on inscrutable roles of influence within the corporate world or the international relations game? Think, for instance, of former Prime Minister Tony Blair, who, soon after leaving office, used his prestige to create a highly lucrative influence brand that’s been dubbed “Blair Inc.,” what the Telegraph describes as a “confusing mix of business, politics and philanthropy that is administered by a complex system of companies.” Blair has advised a Wall Street bank, a European insurer, the government of Kazakhstan (among others), and even Libya’s brutal dictator Muammar Gaddafi. 14While counseling Gaddafi at the same time that JPMorgan Chase was seeking deals from Libya, Blair additionally served as an official peace envoy to the Middle East. 15At the very least, these overlapping roles are more than murky, if not suspicious. Blair mixes formal and informal roles—and, as I’ll discuss shortly, informality can create a giant black hole of accountability.

Or what about former Obama budget director Peter Orszag? In 2010, he left Washington for an executive job at Citigroup, one of the very companies that needed and received government help after the financial crackup of 2008. One of his three titles there is Chairman of the Public Sector Group, which smacks of a stealth lobbying department.

Orszag is not accused of wrongdoing. He is a model of “ structural rather than personal corruption,” as journalist James Fallows commented in The Atlantic . “The idea that someone would help plan, advocate, and carry out an economic policy that played such a crucial role in the survival of a financial institution—and then, less than two years after his Administration took office, would take a job that (a) exemplifies the growing disparities the Administration says it’s trying to correct and (b) unavoidably will call on knowledge and contacts Orszag developed while in recent public service—this says something bad about what is taken for granted in American public life.” These kinds of high-level migrations, Fallows observed, “pile up in the background to create a broad American sense that politics is rigged, and opportunity too.” 16

Meanwhile, these players not only challenge accountability—they have helped to create vast inequalities in income and wealth and will long reap the benefits of the policies and the political climate they have abetted. When their policy influence leads to real-world trauma for what has become known colloquially as the 99 percent, these power brokers don’t generally slink into obscurity: they continue demanding high-profile rewards, and often get them.

Given all this, it’s clear that we must pay heed to the new corruption—which helped spark the outrage that has fueled today’s far-flung protest movements. In the new corruption, no envelope is passed under the table. No laws are clearly broken. Indeed, the players we meet in this book are far too subtle and sophisticated for the bribe-dispensing or even conventional lobbying of yesteryear. They are difficult to monitor and to hold to account precisely because their “corruption” is elusive, hard to detect—and legal.

But don’t they violate the public trust—or get close to doing so? And aren’t their actions often more damaging to society than the old-fashioned bribe?

Yet many people and even corruption scholars, influenced by the agenda of what has been called the “anti-corruption industry,” have not thought about it in those terms. Following the Cold War, the World Bank, and NGOs such as Transparency International of corruption-ranking fame, powered the industry in a worldwide anti-corruption campaign. That industry has favored targeting what is now called “need” corruption—people managing an impossible system—over “greed” corruption—people gaming the system. 17That industry has played a significant role (even if not quite knowingly) in this obfuscation, as we shall see in Chapter 4. Meanwhile, it is telling that systemic violation of the public trust—the emblem of the new corruption—today resonates with protesters worldwide. Recall the insistence of SWIMNUT and his or her fellow commenters that the United States should occupy a high place in corruption rankings. They don’t need experts to tell them that they are subject to a corruption that bears little resemblance to the petty bribes that flourish far away. That’s because ordinary people are grappling with the grim consequences of the well-entrenched new corruption. The elites who helped entrench it scarcely face such costs. No wonder many elite experts don’t even recognize that a problem exists.

The financial arena is rife with lapses in accountability and even clear-cut violations of the public trust. But a stunning discovery of my research is that unaccountability invades practically every area of public life. Later we’ll see how stealth influence can quite literally involve life-and-death matters when the pharmaceutical industry and physicians intersect. We’ll see it, too, in cases of unregistered, under-the-radar operatives carrying the water for less-than-savory foreign entities. And it rears its head in once-respected institutions—government, business, the military, and academia, among others.