A Conversation with Senator Ben Cardin: Anticorruption in U.S. Foreign Policy under the Trump Administration

Thursday, April 6, 2017
Stephane Mahe/Reuters
Benjamin L. Cardin

U.S. Senator from Maryland (D); Ranking Member, Senate Committee on Foreign Relations


Nelson and David Rockefeller Senior Fellow for Latin America Studies and Director, Civil Society, Markets, and Democracy Program, Council on Foreign Relations

Introductory Remarks

Senator Ben Cardin discusses corruption's effect on economic and social inequalities, investment, development, and democratic institutions.

O’NEIL: Good morning, everyone. Welcome to the Council on Foreign Relations. And welcome to our symposium here on “The Future of Anticorruption in U.S. Foreign Policy.”

I’m Shannon O’Neil. I’m a senior fellow here for Latin America studies at the Council on Foreign Relations, as well as the director of the Civil Society, Markets, and Democracy Program that is hosting this event.

Now, we’ve seen in recent years an increasing recognition of corruption’s serious and wide-ranging consequences, both for the nations in which it occurs and also for U.S. foreign policy. Corruption deters investment and commerce, it intensifies economic and social inequalities, it drains development dollars, and it presents major obstacles for democracy and for rule of law by undermining the functioning and also the legitimacy of institutions and countries. Endemic corruption erodes citizens’ trusts in their governments, and it drives many of them towards radical movements and towards insurgencies that threaten those countries as well as U.S. national security interests.

It’s crucial that the United States address these threats and also develops effective strategies to combat corruption abroad. This means and requires evaluating past approaches for what has and hasn’t worked. It will mean working alone, as well as in concert with international partners, to address bribery and graft and other forms of corruption.

And it is these issues we’re doing to delve into today. And we have, very fortunately, an impressive group of speakers, those that have been on the front lines of designing or implementing or advocating for these kinds of policies. They include former and sitting government officials, they include legal experts, leaders of nongovernmental organizations.

And I believe it’s very fitting that we’re going to start off this symposium this morning hearing from Senator Ben Cardin. He’s been instrumental in driving anticorruption legislation for many years, and he’s a longtime advocate of a more assertive U.S. approach to addressing corruption issues abroad.

So, with that, I want to thank all of you for coming today. We look forward to a series of excellent discussions. And please join me in welcoming the senator up to the stage. (Applause.)

CARDIN: Thanks. Good morning, everyone.

O’NEIL: Here we are. (Laughs.) Great.

Well, everyone here obviously knows the senator. I don’t need to go through his bio. You all have it, of course, but we don’t need to go through it. But he has been, as we all know, thinking about these issues for many, many years, first at the state level in Maryland, then in the House, and now in the Senate, leading a lot of these.

And let me start off asking you, in your time here—30 years, I guess, or close to 30 years here in Washington—you have dealt with a lot of foreign policy challenges, right? You’ve dealt with wars. You’ve dealt with economic collapses. You’ve dealt with refugee crises, deal with nuclear threats, all sorts of issues, just to name a few. And amid all of these, where does corruption rank? How important is it, and why?

CARDIN: Well, thanks. First, Shannon, thank you very much to the Council on Foreign Affairs (sic; Relations) for holding this series of discussions dealing with corruption.

You got to be careful because there’s outside forces working against us. We scheduled this about a month ago, and—(laughter)—and we had snow. And today I’m here to try to get away from a nuclear fallout that’s happening in the United States Senate. So it’s—(laughter)—you know there’s always outside forces that are at work here.

But corruption is—you talk about my experiences. When I first came to Congress, I got involved in the Helsinki Commission, mainly because I recognized the importance of human rights, anticorruption, those types of issues in regards to the values of America. America’s strength is in its values, what we stand for. And when this period of history is recorded, I am certain that the success of America in bringing down the Soviet Union and advancing democracies around the world is going to be the values that we stood for—not our military, not our economy, but our values. And our values are good governance, human rights, anticorruption, and that’s what we stand for as a nation.

So about eight months ago I was called to the White House, to a National Security Council meeting that was called on corruption, because of the reasons you just said in introduction of this session—that corruption is the cancer that’s spreading that is affecting the welfare of the global community. It leads to crime and syndicates. It gives a void where terrorists can thrive. It is a circumstance in which we find that when we don’t fight corruption, we have governments that are not stable. You see the protests that are going on around the world. People want an honest government. And it’s robbing people of the wealth of their country.

So we can give you many, many examples. Let me just cite the most recent that we are confronting, a problem in Northern Africa of famine. Millions of people are at risk. And when you look at transparency, internationals in 2016—(audio break).

So his population as this nationalist—(audio break)—Putin’s leadership that allows him to stay in power. So if that becomes legitimate, then the progress we’re making in getting more popular support to fight corruption is compromised.

So, yes, U.S. leadership has made a difference. But we still have a long way to go. And in recent years I think we’ve lost a little bit of the momentum, and certainly with Russia’s dominance now in world affairs. And they’re moving their footprint well beyond Europe. You saw their attack here in the United States. We see what they’re doing in the Middle East. We have a challenge ahead of us.

O’NEIL: So let me turn to what’s ahead of us and ask you to think—so we have had some achievements. We’ve had some progress, perhaps some back-slipping. What is it that the United States could or should do to address it? And I know you’ve just introduced a bill. So could you talk about that as well?

CARDIN: You know, we’ve—and I’m proud of bills that we’ve passed; the Magnitsky law that was first passed for Russia and then was passed globally. My colleague in that legislation was Senator McCain. The two of us have championed legislation on Capitol Hill.

It was not easy. Our friends in the State Department do not like Congress getting involved. There’s almost universal view, whether it’s a Democratic or Republican administration, they prefer that Congress just go away. They don’t like to deal with us. And the Magnitsky law was Congress saying, look, we’re going to put a spotlight on corruption, first in Russia because of the tragedy involving Sergei Magnitsky, but it was deeper than him. We had a face to put on what Russia was doing—what Putin was doing, not Russia; what Putin was doing.

So we said basically that if you’re involved in gross violations of human rights, corruption, et cetera, and your country doesn’t take action against you—and that’s what happened in the tragedy of Sergei Magnitsky—we are not going to give you the benefit of America. We’re going to not allow you to visit our country or to hide your assets in our economy. And that was passed.

It was passed not just in the United States. It’s been passed in European countries. It’s gotten a good deal of international attention. And now we’ve moved to Global Magnitsky so that we can use these tools anywhere in the world. And it’s working. It is—believe me, people who are involved in corruption want to visit their wealth, and they don’t want their wealth in their own country. So it does help and it’s making progress.

So yesterday I filed, along with Senator Perdue, a corruption-index bill that will allow us to do what we’ve done in trafficking in persons with the TIP Report that would document how every country is doing in their campaign against corruption by giving tier ratings so that you can see how well you’re doing relative to the rest of the world, developing standards to fight corruption, including independent judiciary, anti-bribery laws, transparency, those types of issues that are important to fight corruption, and then using that information in our different agencies of government, particularly our foreign-assistance budgets, to make sure that we focus on anticorruption activities. So we can do more.

And then lastly, the sustainable-development goals. We were talking about that before, how we could expand it on some of the gender issues, where we—where the United States, through our leadership, were able to get the international committee the goals for-our sustainable-development goals at the U.N. So we’ve made some progress, and there’s more that we can do.

O’NEIL: Let me ask you if your bill, as it goes forward, if it’s passed—it sounds like a lot of it will depend on the agencies. It will depend on the government working together. And there are some in this room and elsewhere that worry that the Trump administration, this isn’t a priority for them. And some of the leadership the United States has shown on anticorruption may no longer be there. I’d be interested in your take.

CARDIN: Well, that was a pretty diplomatic way of putting it. (Laughter.)

The Trump administration has made this much more difficult, for many, many reasons. So I’ll try to be concise, because I could really talk a long time about it. But it—there’s a highlight this week when President Trump met with President Sisi of Egypt. And there’s a lot of things you can say about the U.S.-Egyptian relationship, and there are a lot of strategic areas that we need to talk about on security and those issues.

But clearly the reforms in Egypt need to be in the forefront of that discussion. Otherwise we’re again going to run into the problems of whether this government can maintain stability in a very important country in the Middle East. And President Trump never mentioned that. And when you’re talking about U.S. visible leadership in bilateral relations, our values have to be front and center. It was not.

And then earlier this week we saw Secretary Tillerson talk about President Assad in that it’d be perfectly OK for him to stay if the people of Syria want him. And, of course, later this week we saw the horrific use of chemical weapons once again by President Assad against innocent civilian populations. Of course, you shouldn’t be using chemicals at all.

So that lack of moral clarity, that lack of putting a focus on good governance and anticorruption, is very damaging to our ability to advance these issues.

Now, let me compare that to Ambassador Haley, who’s been pretty clear about moral-clarity issues. And I would just urge President Trump and Secretary Tillerson to take a lesson from Ambassador Haley as to how we need to be clear. Her comments about Russia, I thought, were very, very refreshing. So I was—and it was not diplomatic, the way she—which at times we have to say those things.

Now, it’s deeper than just not showing the priority in the public statements on anticorruption and good governance. We have problems of credibility in the Trump administration. When you endorse fake news as a strategy for foreign policy or for domestic policy, and then you meet with foreign leaders in an effort to try to advance good governance, your credibility is very much weakened. And that is very true of the Trump administration.

When you make a decision that you’re not going to divest yourself of your own personal wealth as president of the United States, that you can determine what is in conflict and what is not in conflict, let alone the violation of the emolument(s) clause of the Constitution.

And we could go through a lot of those issues, but the perception globally, and maybe the reality globally, is that the president of the United States can profit from being president of the United States, his business interests. And we’ve seen, as you know, the 38 trademarks that were approved by the Chinese authority after 12 years of fighting by the Trump enterprises. And now President Xi is meeting with President Trump. Whose interests are being advanced, the United States’ or personal business interests?

That makes it very difficult to be able to stand up for good governance and anticorruption—or on transparency, the president not releasing his tax returns, that—I mean, transparency is one of the key elements of anticorruption strategies—or advancing as one of the very first bills in this Congress sidetracking the provisions that Senator Lugar and I worked on transparency from the extractive industries so that poor countries could get the value of their minerals, putting that on hold, all that compromises.

And then lastly, when you present your priorities for the budget, which is the priorities that you seek for our country, and you say we could reduce our international development programs by 36 percent, and America needs to be there to help countries develop democratic institutions that can protect against corruption, all that combined weakens the United States leadership. And there is one United States of America. There is only one country that can do what we can do. And that’s been severely damaged.

O'NEIL: Let me follow up on that is if our executive is not going to lead on this, is there anybody else who can pick up that mantle? Is it really that grim?

CARDIN: So no, no, it’s not. It is—it is very grim, but it’s not that grim. (Laughter.) Let me—let me give you some optimistic note. I’m not supposed to share what happens in the private meetings of the Senate Foreign Relations Committee, so I’m going to violate that a little bit, in that we have meetings with world leaders who come in, and they meet with our committee. And we had that with President Sisi the day after he met with President Trump. And just about every member of the Senate Foreign Relations Committee used their time in questioning President Sisi on human rights, just about every single member. And I think that was to counter what was apparent by the lack of that discussion or reporting of that discussion with President Trump.

So there is great interest. In the Congress we have champions on both sides of the aisle on good governance and anticorruption and human rights. We have bipartisan support for the introduction of the bill that we did. It was—it was John McCain who insisted that anticorruption be part of Magnitsky. So there is strong bipartisan interest in Congress to advance these issues. And we recognize, both Democrats and Republicans, that we have a challenge with this administration. So we’re working together to try to counter that.

O'NEIL: I’m going to open it up in a minute to questions from our members and our guests here, but let me ask you one other question and—because the president today is meeting with Xi from China. You know, China is a place where we think about it as a lot of deep-seated corruption but also a president who, in his own way, has been—championed anticorruption measures. You can argue about how effective they are, how they’re—how they’re targeted, but when you think about our relationship with China—you know, at times a partner, often a competitor—how do you prioritize corruption? And what would you have happen today in terms of this issue, relationship on these issues?

CARDIN: Yeah. So there’s been a bipartisan group that have encouraged the president to bring these issues up in the meeting with his counterpart in China. So there has been—we had a bipartisan effort to try to encourage this to be on the agenda.

I don’t want to disappoint you, but the president did not share his agenda with me. (Laughter.) So I don’t know what they’re going to talk about. I don’t know how transparent it will be, their conversations.

One of the really disappointing things about Secretary Tillerson is that he’s not sharing a lot of what he’s doing with the American people and the global community. So we don’t know what is happening. And the megaphone is important here, so it would be very helpful if the president did something visible to show that human rights is on the agenda. We know that Mr. Tillerson is going to be in Russia. Will he have meetings with the opposition? That’s a very visible sign that he is—that he’s open to the human rights agenda issue. Will he make public statements about that?

So yes, we’ll be watching to see not just what transpires in the privacy of the meeting but what is broadcast because that is a very important signal. It’s not—this can’t be kept private. There’s too many people fighting and struggling around the world that need to hear that hope. And yeah, we’ve met with courageous leaders—Kara-Muzra just this week, and I—what he has gone through in Russia—he’s entitled to know that we’re fighting on his behalf. So I don’t know whether this will be brought up.

I’m going to disagree I think with what you were saying that China is doing good things to fight corruption because I don’t think they are. I think that there was reform in China, that we saw some really positive signs. But under President Xi, we have not seen the continuation of that progress. And if anything, we’ve seen a retreat from the progress that’s been made. It’s more challenging today for people to express themselves for religious freedom. And certainly corruption, particularly at the local level, is widely reported. So it is a country that desperately needs to get back on track on reform, and they’re going in the wrong direction right now.


Let me open it up to your questions. Remember this is a meeting that’s on the record. Please raise your hand. I will call on you. There will be I think microphones that will come around. And state your name and then your question, please. Let me start here.

Or maybe there aren’t. Maybe we’re just—

Q: I don’t need it. (Laughter.) Steve Charnovitz, George Washington University Law School.

Thank you for your leadership on these issues and your eloquence today. You talked about U.S. leadership and gave us some examples of how there are some problems up with the current administration. You didn’t say anything about the federal conflict of interest statute, 18 U.S.C. § 208, which we’ve been told does not apply to the present. If that’s true, doesn’t that set a bad example that the United States has a conflict of interest statute that omits the chief executive? And if that’s a problem, what’s the Congress going to do about it?

CARDIN: Yeah, I think that federal conflicts of interest does apply to the president. But let me explain that because I was part of the Congress that passed these laws, and it was in response to some immediate concerns we had with members of Congress, et cetera. And what we didn’t want to be challenged is the president’s authority to act. And therefore, we didn’t want to be—the ability to challenge the effectiveness of the president of the United States to speak definitely with the authority that he has. So that’s the reason why he was given this leeway on being able to challenge his actions.

But conflicts do apply. Corruption statutes apply to the president of the United States. The emolument clause is pretty clear on foreign transactions, applies to the president of the United States. So there is no question about that.

And yes, I am concerned about his domestic conflicts. I am. And there is going to be questions to whether his office is being used for personal gain when his children travel with all the protection of—that is—that is appropriate because of their family connection to the president of the United States of their vulnerabilities for security; that’s intimidating to the people that they’re negotiating with on business deals. That, to me, is not appropriate.

That’s why we have the tradition in this country that every president has either divested or set up blind trusts in order to avoid that appearance of conflict or conflict situation. President Trump has made the office of the president vulnerable because of his refusal to do that. He has—so if you want to be secretary of state, you had to divest, as he did, as Secretary Tillerson did. But the president of the United States did not. And that’s just wrong.

So I understand the technical aspects of the conflict statutes as to how you can challenge the president’s actions. But conflicts apply to every person who’s in public life. And the emolument clause clearly applies to the president.

O'NEIL: Right there.

Q: Sarah Chayes from the Carnegie Endowment.

To follow up on that question, just because the credibility gap that you described is so important in terms of the United States’ ability to lead in this domain, understand where you are on the substance—emoluments, conflict of interest, divestiture, tax—

CARDIN: Returns.

Q: Thank you, releasing tax returns.

CARDIN: It’s near that date, so it’s getting closer and closer.

Q: Yes is it. (Chuckles.) So my question is, you’ve been able to achieve remarkable bipartisan consensus on moving some of these issues forward with respect to the international sphere. Have you begun engaging in conversations with your friends from the other side of the aisle on the application of them to the United States so that some of these things—which may have been traditions in the past—become law, and that the law is challengeable? There are some emoluments cases at the moment, but standing is a question. Thank you.

CARDIN: Yes. We’ve never been down this path before so we just don’t know about enforcement. It’s very challenging to figure out. Senator Blumenthal is looking at different ways in which we may be able to develop standing. And he’s been working on that. So we’re all working with him to see whether there is a way that we can avoid this. I filed a resolution in Congress to avoid this problem, to tell the president, both before and after he took the oath of office, that it’s the sense of the Congress that he’s created a problem.

He’s got to correct it in order to avoid a constitutional crisis. So we’re trying to weigh in in a way to avoid a constitutional crisis. But we know ultimately an enforcement can be done by the House of Representatives. We don’t want to go down that route, but that’s the ultimate enforcement. And we recognize that is something that would cause a crisis in America. So we’re trying to avoid that if we possibly can, to find ways that we can enforce these issues.

In the meantime, I have put on notice our representatives globally that—about the emolument concerns. So as business deals are being done, I want to make sure that there is no violations of the emolument clause being facilitated by our missions in other countries. And so we’re trying to do that. Have I seen a great deal of bipartisan cooperation on this? No, I have not. And I think it has to do with that we’re just too close from the elections. And it was such an unorthodox way that President Trump was elected that Republicans do not want to feed into the scenario of the legitimacy of his election. We’re not trying to do that either on the Democratic side.

But I think that has prevented us from getting a bipartisan way deal with the emolument issues. I can tell you privately Republicans say he should have released his tax returns. He should have divested. He should have set up a blind trust. But we haven’t quite gotten to the point of how we can work together to correct the situation.

O’NEIL: Thank you. Right here.

Q: My name is Anatoliy Bizhko. I work for the Hershey Company.

Senator, thank you for being here today and for your work on behalf of people around the world fighting corruption. I’m originally from Ukraine, so corruption is a sore topic for me and for my fellow citizens. I now live in Lancaster, PA. And corruption in Ukraine or anywhere else outside of the U.S. is not really on the top of agenda of people who live around me. So my question is, do you think corruption overseas gets enough attention among general public in the U.S. And if not, what should we do, or should we do anything to raise the awareness of people in this country about corruption overseas? Thank you.

CARDIN: Well, it’s a great question. And unless corruption hits you personally, you don’t really feel it. And in the United States, most Americans do not believe that their lives have been adversely affected through corruption. So they don’t recognize the impact internationally either on the security of America, or on the global economics, or the use of military. Those types of issues don’t hit them directly. But you’re absolutely correct. If you’re from Ukraine, you understand it.

I was at—not during the immediate time, but certainly thereafter, I was in the Maidan with the people and saw what was happening in Kiev. What happened in Ukraine was not a fight between Russia and Europe for the loyalty or desires of Ukraine. It was the Ukrainians wanting to get rid of a corrupt system. It was a popular uprising against corruption. What’s happened in Romania in February, 500,000 turned out to fight corruption. So what’s happening in Russia, where people are protesting against the corrupt government.

So it does hit home when it hits you. And Americans have not been able to identify with the urgency of fighting corruption. We talk about this a lot. So if you have any suggestions on how we could get this done, please. (Laughter.) It’s very frustrating. There’s a lot of energy out there. You may have noticed since the November elections that there are a lot more people engaged in the political system and have talked about it, and want to—want to get involved and want to weigh in. And we’re trying to figure out how to do that. So if you have some suggestions, I mean it, let us know. Because I was with a group last night, we talked for three hours. And at the end of the discussion, we were still asking: How can we make a difference?

So we are trying to relate it, though, to everyday life. Americans want an honest system. And I think that when you look at the corruption in Russia, they’re questioning whether we have a system on Capitol Hill to investigate that honestly. And that’s one of the reasons why the American people want an independent commission to investigate what Russia was doing in the United States, because they don’t believe that there’s an honest system—and I’m not trying to discredit what’s being done by the Senate Intelligence Committee. I have a great deal of confidence in Senator Warner and Senator Burr. But it would be a lot better if we had an independent commission. If we did, I think we could also connect more to the American people about how we’re fighting corruption.

O’NEIL: Back there.

Q: Good morning. Christine Clough with Global Financial Integrity. And I’m also a member of the coordinating committee for the UNCAC Civil Society Coalition.

Thank you to CFR for hosting this today and thank you, Senator Cardin, for your thoughts and words this morning. One of the things we’ve been debating as civil society since the election, soon after, and continuing into this year, is what kind of strategy we pursue for anticorruption. Do we continue to try to fight aggressively, or is that a riskier strategy and things could be rolled back and we should instead kind of more hunker down, try to lay low, and hope and hope that we can at least hold onto the status quo until there seems to be a more favorable attitude in Washington, whether that’s White House or Capitol Hill?

And kind of a second question is, within Congress—you know, one of the things we’ve talked about is trying to—trying to go at the Republican side, and maybe from a security perspective, since that tends to play better maybe than just a pure kind of moral or development argument. And I’m not sure what your thoughts are on that, from your time with your fellow members. Thank you.

CARDIN: I have a very easy answer for you. Get behind the bill I filed yesterday with Senator Perdue. (Laughter.) And I mean that. And I want to underscore this. That legislation would evaluate how every nation in the world is doing in fighting corruption. I passed over kind of quickly the analogy to trafficking in persons. But it wasn’t too long ago that Americans did not think trafficking in persons was an important issue. They didn’t. And they didn’t think prostitution with trafficking was all that important to their everyday life. And then the Congress of the United States got involved. And all due respect, it was initiation by Congress not by any one administration, to say that this is modern day slavery and it’s got to end. And United States leadership is desperately needed for this to happen.

We then tried to put some faces on it. And remember, law enforcement have always looked at the victims as criminals rather than victims. And we changed that attitude. We developed victim centers here in the United States, because everyone recognized that we were a destination country, and then we recognized that we had trafficking within the United States, and that we have problems ourselves. And the Trafficking in persons reports not only evaluates every other country in the world, it evaluates the United States. And the corruption report will evaluate what we’re doing here in America.

I didn’t—I mentioned Transparency International’s report. America was not number one. We were number 18. So there are things we can do better than we’re doing today. So get behind what we’re trying to do. And, yes, in trafficking there were a lot of outside groups that were doing ratings before we put the United States government TIP report together. But it’s the U.S. TIP report that’s known globally today. And it’s known as the gold standard until it was somewhat tarnished in evaluations under the Obama administration. It’s still the gold standard. And we want to make this effort a bipartisan effort.

And we’re going to get resistance from the State Department, make no mistake about it. I admire greatly our dedicated Foreign Service officers and what they do every day for America. They don’t like to have another burden put on them. They don’t like to have to raise issues on—that makes their life more complicated and what they’re trying to get done in other countries. But fighting corruption is so important, as is fighting trafficking so important, that we can elevate that. And we could use your help in getting this report—getting this legislation done. It’s not a slam-dunk at all in the Congress. It’s going to be an uphill battle. And we need your help.

O’NEIL: Eric.

Q: Yeah. Thank you, Shannon, for organizing this. And, Senator Cardin, greatly appreciate your efforts on this front. I’ve been thinking about these issues for a long time.

O’NEIL: Would you mind introducing yourself, if you could, please?

Q: Oh, sorry. Eric Olson with the Woodrow Wilson Center.

Thinking about more in this hemisphere than anything, and it seems one of the things I think you’re doing is elevating this as an important issue, which it doesn’t get discussed that much in our foreign aid. And I think the approach that you’re taking is really about shining a light on problems and naming and shaming and bringing to the public the problems of corruption around the world and what we need to do. I think that’s terrific.

Another approach the U.S. government has tried is to strengthen the institutions of government so that they can do that more effectively. If you look at Brazil, it’s pretty remarkable what they have been able to do to battle corruption. But that’s really the exception in the rule. And U.S. foreign assistance, although it’s had institution strengthening on the agenda for a long time—even the Reagan administration funded administration-of-justice programs in Central America in the 1980s—we still have no rule of law in Central America, by and large.

So I’m wondering if, in addition to what you’re doing, we shouldn’t take another hard look at what we’re trying to do vis-à-vis strengthening institutions in Central America, in this hemisphere, and around the world, because, at the end of the day, they’re the ones that have to do the hard work of holding their own officials accountable.

How you do that is a real challenge, but I do think it’s important that foreign aid look at that issue more directly.

CARDIN: I agree with you completely. It’s impossible to see how that can advance if the president’s skinny budget became law—36 percent cut, 36 percent cut in the State Department’s budget. Now, let alone, remember we have major commitments that I support in health and in food, that I support. And then we have a small amount of money that goes to the programs you’re talking about, democracy and protecting institutions.

And in many parts of the world we have virtually no resources being spent where they need it the most—not in our hemisphere, but in Africa, for example, we have very little dollars being spent on democracy growth. Every time I’ve visited an African country, the mission tells me can we get more democracy money? We could use it.

So, just to underscore the point, I agree with you completely. But you’re going to have to reverse what the president has come in with. And my concern is that Congress will not pass a 36 percent cut. They will not. I am convinced about that. But if they use that as the yardstick, all of a sudden a 5 percent cut doesn’t look bad. A 5 percent cut is terrible. So we have some work to do.

On our hemisphere, you’re absolutely right. We are looking at trying to strengthen the OAS. I have some ideas about how we can make that institution more relevant to the current needs. The interesting point about our hemisphere is that we have almost every country in our hemisphere are democratic countries. We have a couple of exceptions; make no mistake about it. And in those exceptions, corruption is widespread.

Venezuela is close to a failed state. I’m meeting with the opposition people today from Venezuela to see what we can do. But the government—the courts and government have ignored the elections, and the economy is falling apart. And it’s extremely corrupt. And we have to deal with that in relation to a failed democracy. Invoking the charter is appropriate. And, of course, Cuba is not a democratic country. I would never suggest that it is. And they have widespread corruption in Cuba. So we have to deal with that.

But I was with the foreign minister from Mexico yesterday. That’s a democratic country. They’re fighting corruption. And in some cases they’re winning, but in other cases they’re not. The northern cartels are notorious for how they are able to infiltrate societies and police officers and judges and how the drug trade is facilitated through these criminal elements. We’ve got to be able to fight that.

I was in the Northern Triangle. And the countries—the leaders are really trying to fight corruption. They’re trying to do the right thing. They’re bringing in outside help. But the drug cartels, the gang activities, are so inbred into their way of life there that we have real, real challenges in order to root this out. And it is causing extreme violence and migration, which is affecting our entire hemisphere; certainly affecting the United States.

So your point is well taken. Vice President Biden initiated a program for the Northern Triangle. I strongly supported it. It was not as—it was not as transformational as we needed. We need to, I think, invest even more to try to transform these countries in fighting corruption.

O’NEIL: Vanessa.

Q: Hi. Oh, thank you. Vanessa Neumann. I’m actually—I’m American, but I was born in Venezuela. And I work a lot on Western Hemisphere issues with some of the ISA (ph).

Anyway, I wanted to hear rather more specifically—there’s a bit of interest in the application, perhaps, of the Magnitsky Act, and then what happens—I know, for Venezuelans, as they starve ever more, the corruption—highlighting the corruption of the regime is more and more potent in tipping that, perhaps. It resonates more. You can see it on social media.

So how exactly would the U.S.’s foreign aid, for instance, help implement rule of law and anticorruption, which arguably is a bit of a cultural problem, not just the regime?

CARDIN: No, you’re absolutely right about that. Venezuela is extremely frustrating, because the will of the people is not being adhered to. The elections did not—were not implemented. And now there’s even an effort to block the Parliament from doing anything. So it’s a very dangerous situation, what’s happening. And the country is on the brink of failure, so it’s—the humanitarian crisis is getting worse and worse. It’s an urgent issue.

And fortunately, almost two thirds of the countries of our hemisphere are prepared to take action. So we’ve just got to get a few more countries to act and I think we can take some rather dramatic action as it relates to Venezuela.

How you implement reform is not easy. I agree with you. You have a history. People get their services by paying bribes. How do you change that? People have safety by paying bribes. They’re used to paying bribes in the Northern Triangle. The hotel I was staying at, I was shocked to find, in a really nice area—I hope it was nice; I was staying there—(laugher)—they pay bribes. They call it rents, but they’re bribes.

So how do you bring that to an end? It’s not easy to figure out how you do that. Yes, what we are suggesting is using the circumstances of the country. They’re not meeting norms—not our norms, but recognized norms for anticorruption. And how do we focus our other agencies, including development assistance, to bring about those changes? That’s the purpose of the legislation that we filed. We get the information. Then we require the agencies to use that information. If you’re not at an acceptable level, how do we target the use of our relationship with that country to bring about reforms that will elevate their standard in fighting corruption?

We’ve done conditionality of foreign aid in the past, but it hasn’t—it’s been haphazard. It hasn’t been—it’s been more an interest of one member rather than a more documented need of a country. So that’s what we’re trying to do through this legislation is to have an organized way to have a game plan in a country to get them to a better level in fighting corruption, recognizing that this is not going to be quick. It’s going to take time.

O’NEIL: OK, right there.

Q: Good morning. I’m Suyash Paliwal with the Federal Reserve Board. Thank you, Senator, for your remarks.

I wanted to ask about a topic you’ve mentioned in a few of your remarks about bipartisanship, which is, quite obviously, a challenge in the Senate and in the Congress today. What do you see as the way forward for the Senate and what role it should play in the current administration? Thank you.

CARDIN: That’s about as difficult as a question about how you channel energy and bring about change.

The House can operate in a very partisan manner because they have a tradition where the Rules Committee can determine what is done. As long as they have a majority vote, they can move forward. The challenge in the House of Representatives is twofold. They have a challenge of partisanship, and they now have a challenge that the majority party cannot have unity in their own party, causing a division.

That could lead to more bipartisanship in the House, because I would hope it would be better for Speaker Ryan to work with Democrats rather than the far right of his party. The challenge to that is he could lose his speakership in doing that. So it’s not as simple as it sounds.

The Senate is nowhere near as partisan, really is not. The members—we work together. I work with Republicans on just about every issue. All of our committees—most of our committees, not all—most of our committees work with comity between the majority and the minority. Senator Corker and I go over everything before anything is done. We almost always reach consensus—not always, but almost always reach consensus. And our members work together. So it’s not anywhere near as partisan in the operation of the Senate as it appears by the articles that are being written. This is not a good day to talk about it. (Laughter.) I mean, this is a very sad day. And it’s not sad because it will be a majority vote for a Supreme Court nominee. That’s not the sad. The sad part is that the rules were changed without Democrats and Republicans agreeing to the rules change, because we need to change our Senate rules.

Because our Senate rules with an individual senator being able to block legislation, that’s wrong. To delay legislation, I get that, we’re a slower body, it takes us longer to learn things than other people, obviously, you know. (Laughter.) But for a senator to be able to block is wrong. We haven’t changed that. We should talk about it, Democrats and Republicans, recognizing that there will be days that the Democrats are in the minority, there are going to be days the Republicans are in the minority. And let’s get these rules that make some sense.

So that’s what’s missing today. This is unilateral action. And it’s not like it just happened today. This has been going on for at least—it’s been going on pretty dramatically for at least six, at least the last eight years. And it’s time for grownups to get together and leaders to lead and for us to figure out ways that we can make the Senate work the way it should work.

O’NEIL: Good.

Back there?

CARDIN: Thank you.

Q: Thank you. Homer Moyer from Miller & Chevalier. Good morning, Senator.

As you, of course, know, the FCPA has quite remarkably led to a series of international conventions and now similar laws in 150-some countries. And since 1977, we’ve developed, as you indicated, a much greater appreciation of the economic costs, of how it contributes to other international crimes and how it undercuts the rule of law. So my question is, arguably, one of the most negative things we could do would be to repeal or substantially dilute the FCPA. And there are occasional suggestions to that effect. My question is, do you see that, a sense of that, a likelihood of that in the Congress? And how would you react to that?

CARDIN: Yeah. No, I would think that there would be strong resistance to repealing it. Just the name of it, you’re going to repeal foreign corrupt practices? (Laughter.) I just don’t think we would do that. There’s a greater danger that we may try to weaken it or not enforce it. And that would be an area that we have to watch very closely.

As President Trump talks about new trade arrangements with other countries, what we would like to see him do is just the opposite. We know that in government procurement there’s need for the United States to have a stronger position with our trading partners because we don’t participate in corruption; so therefore, let’s have a better way that they deal with government-supported enterprises and how they deal with government procurement. And that should be part of a trade agenda. But to go backwards and say that we will accept corrupt practices, that it’s an acceptable standard to pay, to get contracts, no, I just don’t believe that we would move, Congress would not move in that direction.

O’NEIL: Great, good.


Q: Thank you, Senator Cardin, both for your leadership and really for your eloquence and your clarity in discussing these issues.

And thank you so much, Shannon.

My name is Shruti Shaw. I work for Coalition for Integrity, formerly known as Transparency International USA.

The biggest obstacle I find in fighting corruption is impunity. And I say this not only because I worked for Transparency International for so many years, but also because I grew up in India, and I went through a really corrupt education system and saw that the opportunities available to me were so limited.

One way to fight that impunity is to reduce the ability of corrupt officials from around the world to enjoy their wealth. In the U.S., we are a major enabler of that. We have the ability to set up a company in the U.S., a legal entity, without really knowing who derives economic benefits from the entity or who ultimately owns the entity. So what leadership can we expect from this Congress on the issue of beneficial ownership transparency?

CARDIN: Right. Thank you for that. This is an area that’s under the jurisdiction of the Banking Committee, not under Senator Foreign Relations Committee. So I’ve been working very closely with our counterparts on Banking as to how we can coordinate what we do on foreign policy and what they do on banking.

I mentioned to you I was at the National Security Council fighting corruption. This is one of the major areas that they felt we needed to reform our laws in order to have a more effective way of preventing hiding of assets here in the United States. So there’s need for reform. Some of the technical aspects have been explained to me, and I’m fully onboard on trying to make the law more effective in rooting out those that are using these companies to hide illegal assets.

So you’re right, it needs to be done, and we’ll work closely with the Banking Committee to see whether we can’t get that done.

O’NEIL: OK, back there.


Q: Good morning, and thank you, Shannon. I’m Steven Donehoo from McLarty Associates.

Following up on some of your comments, is there included in your legislation or somewhere a way to use more robustly the tools that we have in the Treasury Department with OFAC and the Justice Department with the Kleptocracy Initiative and other indictments to try to go after some of these national leaders that have become so powerful and use that to their benefit?

CARDIN: The answer is yes, we have that in our legislation. It is somewhat vague in our legislation because of jurisdiction of committees. But we do require interagency reporting and working together with a common agenda to deal with progress in a country. So everything you identified is very much in the agency coordination issue that we anticipate would be part of what we do.

Then there needs to be oversight by Congress. And one of the matters that I’m pushing hard for on our committee is to have oversight hearings. We did one on trafficking, we’ve had some pretty effective oversight hearings, because the administration last Congress did things they shouldn’t have done on trafficking. And we called it out, and as a result, I think we made the corrections. And this year’s report was much more objective, as it should have been.

Same thing needs to be done on corruption. If this becomes law, then we need to bring in these agencies to make sure that they’re doing things consistent with what the report shows needs to be done. And you’re exactly right in what you’ve identified as being root causes that have to be dealt with in fighting corruption.

O’NEIL: Right here?

Q: Hi, Senator Cardin. I’m a lifelong resident of Maryland, so I thank you for all your leadership in Maryland. My name is Steve Zimmerman, I work for the World Bank.

I was wondering if you think there is an opportunity for the United States to use its leadership in international organizations, the World Bank, the U.N., the OECD, to, if you will, perhaps lead from behind as the U.S. loses a little bit of the moral high ground on this issue, but help the rest of the world pay attention to the issue of corruption.

CARDIN: Right. And it’s an excellent point, not just because you’re a Marylander. It’s a good point. (Laughter.) It really is important for us to sensitize the international organizations on this issue. As I mentioned earlier, I’ve spent a lot of time with the Organization for Security and Cooperation in Europe, OSCE, and we have really focused on anticorruption in that organization. I think that’s important. But that was one of our missions, human rights and good governance.

We find at times that pragmatic decisions are made and corruption is not as high as it should be. International banking, we have had conversations about corruption, and there was a pretty good conversation we had just recently on these issues. But the U.S., we are the major player in just about every international organization. We dominate. Of course, we pay the most money, but we dominate. And if we don’t raise it, it’s unlikely it’s going to get the attention it needs. So it’s U.S. leadership.

Now, I don’t think that Mr. Trump will be directing our participants on priorities within these organizations. I really don’t think that’s necessarily the case. But we have to make sure that those that are, that corruption is raised. And that’s why I hope that what happened under President Obama on fighting corruption as a national security priority, we need to get that in the Trump administration, that it’s a national security priority to fight corruption and, therefore, instructing every agency to make efforts to elevate the ways of dealing with this.

When you’re making a loan, you have leverage. And when you have that leverage, you can demand certain types of performance. And in that performance, you can accomplish what the country needs to do as part of its strategy to fight corruption. So it’s an excellent point.

O’NEIL: Great, good.

Right there?

Q: Hi, Jove Oliver with Oliver Global.

I actually lived in Kyiv the year before the Orange Revolution, working for the Global Fund to fight AIDS, TB, and malaria. One of my jobs when I was there was to help organize a press conference to suspend a $100 million grant that the Ukrainian government was getting because there was corruption in the distribution. President Kuchma’s daughter was running an AIDS foundation that got it. So we gave it to an international NGO. And it was several months before the revolution. I’d like to think it played some small role in sort of shrining a light. (Laughter.) I mean, I—but my point is, I hear Ambassador Haley up at CFR last week talking about potentially U.N. reform. Is the Congress going to look at the power of the purse in funding the U.N. and looking at the U.N. reform agenda? Are you going to look at successful examples, like the Global Fund, where I think you’ve seen a lot of suspensions of grants, ministers of health thrown in jail? Is that an example you can look at?

CARDIN: Thank you. I will bring that out to Ambassador Haley’s attention. I really do think she’s trying to get this right. Now, she’s under extreme pressure from OMB to reduce budgets. And that’s unfortunate. I’m all for more efficient budgets. I really am. I think we can do things for less cost that we’re doing today. I agree with that. But to have as a goal a certain number without any rationale behind it is wrong. And the pressure on our participation in international organizations—the budget numbers they’re going to get from OMB are going to be unrealistic. So it’s going to be forcing them to do things in the name of reform that are really going to be counterproductive. But, yes, we will do that and we’ll try to do that.

What I was impressed by Ambassador Haley in her conversations that we’ve had—and she was before our Committee and we had a conversation just recently—is that I’m impressed that she’s not trying to put the United States out of compliance with our responsibilities in the United Nations, that is create arrears, because that would prevent us from participating. And she’s not attempting to withdraw from any of the organizations. She’ll make independent evaluations. She’s not there yet. She really wants to understand how these organizations work first. But what she’s looking at is inefficient missions, either correct them or stop them. And there—that’s not an unrealistic position to take.

Obviously most of the missions that are done by the United Nations are critically important. I mean, peacekeeping and humanitarian and all. We don’t want to end that. But if you can’t—always remember, when we had Bill Gates and Bill Clinton testify before the Foreign Relations Committee, when they said: If your money’s going to corruption, pull out of the country. And you got to do that. You don’t want to fund—as much as we want to help, you’re not helping a country by funding corruption. So you got to be prepared to leave if you can’t get a network. Now, you found an alternative. That’s always the best way. But if you can’t find an alternative, then you’re going to have to make hard decisions.

O’NEIL: We have time for one more question. Let me take yours.

Q: My name is Bhakti Mirchandani. I work for a hedge fund. Shannon, thank you for organizing today. And, Senator Cardin, thank you for your leadership.

The definition of corruption in the United States has gotten narrower over time. With cases like Citizens United, with Obama having the first organization to advance his agenda, now with the Mercers taking it to a new level with the Make America Great foundation or nonprofit or whatever it is that’s doing those advocacy campaigns in a bunch of the states that Trump won to promote his presidency. What are your thoughts about how that affects your work in fighting corruption in other countries, and just that trend more broadly?

CARDIN: Well, thank you for the question. Look, I think America has compromised its effectiveness globally in fighting the principles values that made our country great, and that is good governance. That we govern for people, we don’t govern for ourselves. It’s we the people. And our system was built with the understanding that there are frailties among individuals that are in power, so we have checks and balances. No one’s above the law. The president of the United States can be indicted for a crime. And we have since seen how it’s worked over the history of our country, where the checks and balances have worked. A truly independent judiciary and an independent Congress. I don’t know too many other countries that have an independent congress. Almost all are parliamentary systems of government, so—democracies, I’m talking about.

So we put a real priority on the importance of the individual. And I couldn’t agree with you more, there’s been some disappointing—Citizens United, to me, was one of the most disappointing decisions, because it opened the floodgates for dark money in campaigns, which was terrible. And I can’t—and when people come to me, other country leaders, on how to form their free election systems, I tell them don’t pattern after how we do our fundraising. (Laughter.) You know, there’s much better ways than that. But it was a fundamental decision made by the Supreme Court that we’re going to protect a business right over an individual right, which to me is—makes no sense.

So there’s been some troubling trends in all three branches of government. But we the people still control. And as we’ve seen around the world, we the people won’t tolerate corruption. They won’t. There’ll come a point that they’ll be on the streets, including in the United States. They will not tolerate corruption. So it’s in all of our interests to figure out a way to make sure that we put in place those systems that will prevent that. And it’s very frustrating with President Trump, because I really didn’t think the people would allow him to win the presidency without releasing his tax returns and be president without divesting his personal wealth. I really didn’t think that would be a factor. But now, as dots are coming out that may be connected, that could change that.

So I think we have to just continue to stand with our principles, and be willing to defend our principles. And, yes, one of the things that is particularly important in democracy is how do get the populists to understand that they have an interest in these issues. And that’s something that many of us have not been as successful as we need to be, as we saw in the results of this election. And we really need to do a better job in convincing the people that the stability, the security of our country, depends upon honesty—and countries like Ukraine, or countries like Brazil, or countries like Mexico.

I think they see it in Mexico, as the drugs are coming in and killing our children. I mean, you can connect that dot and we can stop the illegal flow of drugs coming in from Mexico by stopping the corruption of the cartels, working with Mexico for that to happen. Or we can get rid of the gang violence. I met with a gang leader when I was in Honduras who was under FBI—trying to get—cut a deal. And he was telling me what his role was. His role was to come into Maryland and set up sister gangs. If we get that message out more and more, I think people will be more interested in what we’re doing in Honduras to end the corruption.

So I think we have to connect more of the dots. The United States is the greatest country in the world because of our values. And we are in the position where we can make a huge difference. We’ve always had challenges. I would acknowledge this is one of the most interesting challenges I’ve ever had in my life. (Laughter.) We’ve always had challenges. And we figured out ways to deal with these challenges. I’m not going to pretend that I don’t think damage has been done. I think damage has been done to the United States. But we need to figure out a way to advance these causes. And I believe we will. And you’re going to find Democrats and Republicans rallying behind these principles and developing policies that will allow America not only to lead internationally, but at home to do what is right in order to protect these essential values.

Thank you all. (Applause.)

O’NEIL: Thank you so much.


This is an uncorrected transcript.

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