Kleptocracy: An invincible (and invisible) enemy?

October 13, 2022

What Putin has created was essentially a sort of feudal system”, says Rostislav Valvoda in this week’s #Forum2000online Chat. Mr. Valvoda, Director of the Prague Civil Society Centre, Czechia, joined Jessica Ludwig, Director of Freedom and Democracy at the George W. Bush Presidential Center, USA, to talk about kleptocracy. Is kleptocracy the same as corruption? Why is it a security issue? How can kleptocracy be countered?

According to Rostislav Valvoda, you will learn that:

  • Kleptocracy and corruption are not the same thing. Kleptocracy is a much broader problem. Its purpose goes beyond money and its complexity and impact make it a serious security problem.
  • Russia is a paradigmatic model of kleptocracy whose complexity involves oligarchs, spy networks, organized crime and illicit money, among other actors and elements.
  • Over the past decades, what Putin has created is essentially a sort of feudal system where public officials —a judge, a prosecutor, etc— use their public role to extort money from those over whom they exert authority.
  • All this money that has been taken from Russian people (in the form of bribes, for example) has been gradually stashed and saved in rule-of-law societies, like the Czech Republic, UK, and Germany. Kleptocrats use these jurisdictions as “saving boxes” because they are safe, that is, precisely because of their rule of law.
  • The money and the corrupt and complex schemes of Russian kleptocracy are part of the infrastructure of the war machine. They are used to finance the war in Ukraine.  
  • Kleptocracies have developed specific money laundering schemes and have created important networks of lawyers, travel agents, and companies sometimes called “enablers”, whose purpose is to help station the money in certain locations.
  • Investigative journalists have a key role to play. Their work, which can sometimes be very dangerous, helps uncover kleptocratic networks. The collaborative work, across borders, of investigative journalists and civil society has a significant impact in the fight against kleptocracies.
  • The public and policy makers need to know where the loopholes are in the system and how they can be fixed to make kleptocracy difficult or “impossible”. 
  • There is a great opportunity for collaboration between experts, civil society, journalists and law enforcement to counter kleptocracy.

The interview was recorded in Prague on September 1, 2022, at the 26th Forum 2000 Conference.