Paul Massaro: Sanctions and Anti-Corruption Measures Defend Democracies and Weaken Dictators

"The job of these oligarchs is to be in our system, destroying it from within, over time"

Welcome back to Lucid! Mark your calendars for our next live Q&A, on Friday, March 4, 1-2pmET. A registration link will be sent on Friday morning. I look forward to seeing you there.

With Putin’s war on Ukraine, the toll of autocratic leadership has never been clearer. As is the necessity of holding authoritarians accountable with every tool we have. That includes identifying and freezing their foreign assets, like properties and yachts they bought with cash they stole from their people. It means sanctioning Russian domestic entities, such as state-run or state-allied banks, that oil the kleptocratic machine.

The new political will among so many nations to enforce a comprehensive program of sanctions builds on legislation and measures developed by those who have worked for years in the anti-corruption space.

And so I am pleased to bring you this interview with Paul Massaro, who is the senior policy advisor for counter-corruption and sanctions at the Commission on Security and Cooperation in Europe (U.S. Helsinki Commission), and a Fellow at the Center for International and Security Studies at the University of Maryland’s School of Public Policy.

Massaro has worked on over 13 pieces of counter-corruption legislation, and he facilitated the founding of the Congressional Caucus against Foreign Corruption and Kleptocracy and the Inter-Parliamentary Alliance against Kleptocracy. He also worked on the Transnational Repression Accountability and Prevention (TRAP) Act, the first U.S. law to respond to abuse of INTERPOL by authoritarian regimes. Our conversation took place on Feb. 28, 2022, and has been edited for clarity and flow.

Courtesy of Paul Massaro

Ruth Ben-Ghiat (RBG): Let's talk about the sanctions now being levied and why they are unprecedented in scope and also in the speed of their coordination and implementation. I can only imagine how many conference calls among government agencies around the world have been necessary to make this happen.

Paul Massaro (PM): Unprecedented in scope is exactly right. The central bank sanctions, the disconnection from the SWIFT banking system, the full sanctioning of Russian sovereign debt, the cutoff of the financial sector, and now oligarch sanctions by the US and the EU. I mean, this has never been seen before. People have made a lot of noise about SWIFT, and SWIFT disconnection is important from a political perspective. But the central bank sanctions are really a big deal. And now the Russian ruble has lost its value, and we could have a Russian economic collapse.

RBG: Why is all this necessary? I personally think you have to be as tough as possible with autocrats, but couldn't one argue that such measures create hardship for everyday people in Russia, who didn't decide to wage this war?

PM: Well, they are necessary because Putin has launched a war of aggression on his sovereign neighbor, and we are now watching as he carpet-bombs Ukrainian cities. That's why it's necessary.

We resisted taking such measures for a very long time. And there were many moments where the U.S. and other Western countries attempted to find a diplomatic solution to this crisis. But Putin insisted on this direction to fulfill his own fantasies of grandeur. It's sick and it's sad.

I do wish the United States and the West had acted on Putin earlier. This is not his first invasion. He invaded Georgia in 2008. He invaded Ukraine for the first time in 2014. He interfered in U.S. elections of the United States and he waged cyberattacks here and in Europe. There's also Russia's Interpol abuse. We're now trying to get the country thrown out of Interpol altogether.  

RBG: Interpol has become an entity that protects criminals rather than prosecutes them.

PM: That's right. I mean, it's the global police organization, the international police organization, and yet it has become the long arm of autocratic power.

RBG: What has changed between 2014, when Putin annexed Crimea, and got a popularity boost at home and little international punishment, and 2022? Are these sanctions a product of the greater awareness about the consequences of corruption because of the 2016 Panama Papers and subsequent leaks? Is it a realization, from the U.S.'s brush with an autocratic-minded Donald Trump, of the danger corruption presents to democracy?

PM: Sad to say, I don't think any of that came into the calculus. I think that there's one element that changes everything and that's the Ukrainians. They have fought tooth and nail for our values, things that we claim to believe in, like democracy, human rights, the rule of law, and they're laying down their lives against a force many, many times their size, with much stronger technology and supposedly better doctrine and tactics.

And yet there they are, still standing, night after night, using everything at their disposal, Molotov cocktails, insurgent tactics, whatever it takes to stop the Russian invasion. I think that that's what changed it. We cannot then sit over here on our hands. We had to act. We owe the Ukrainians an enormous debt and I hope we can pay it.

RBG: The moral question couldn't be clearer.

PM: Yes. I've talked a lot about how corruption corrodes and how that's so pernicious. Slowly, over time, it destroys your society, until you wake up one day and your democratic system is gone. We are watching the Ukrainians sort of say, wake up, we're here, we believe in this, help us. And that's impossible to ignore.

RBG: What do we do about our homegrown corruption, like South Dakota and Delaware, these hubs of offshore finance that enable global kleptocracy? Some of these same people being sanctioned, these oligarchs, have their money in America.

PM: There's no doubt that the United States has provided a very lucrative enabling environment for these oligarchs and kleptocrats. Many elite Americans have gotten rich by selling access to our system. And of course, that access has then undermined our democracy from within. In fact, the job of these oligarchs is to be in our system, destroying it from within, over time.

But now we will have this international anti-oligarch task force. It's going be extraordinary to watch that take shape. Another piece is the regulatory environment which is changing in favor of more transparency. Congress now has the Enablers Act that creates due diligence obligations for lawyers, PR firms, accountants, and so on. They will actually need to ask questions about their clients.

The last thing is that fighting corruption is not just about regulations or laws or law enforcement. It's also about us as a people tolerating this kind of stuff. We should never, ever accept it. If we know a peer that's taking money from a dictator, we should say, what the heck are you doing? And the professional organizations that these individuals belong to should kick them out. Disbar them. Taking money from a dictator is completely unacceptable.