Good good afternoon, my name is armando Senior Reporter with wmu 88. 5 news, the top rated npr station in the country. On behalf of the Carnegie Endowment for International Peace i would like to welcome you to what is sure to be an interesting and exciting conversation about corruption in sent tall america, the United States and elsewhere. I will be moderating this conversation and you will have an opportunity to ask questions once the panelists are finished. First, sara chase, she is a senior fellow here at the Carnegie Endowment for International Peace, she is the author of this report when corruption is an operating system and she is using anguras as the case study. To add some perspective to this discussion we have a law professor at Fordham University school of law. She is the author of corruption in america and she is also an attorney on the amaluments lawsuit filed against president donald trump. So corruption as an operating system what does that mean . Yeah, what am i talking about . Exactly. Would you mind yeah. So we have a picture, but fundamentally what im talking about here is not corruption as some nasty practices that some members of government indulge in in some countries a lot of government officials might indulge in this, but, you know, the way we normally think about it is sort of like i dont know, like a disease that kind of creeps in and infects the tissues of a government. What ive been seeing in honduras turns out to be a really clear example of it. Is a network, right, and a network that crosses boundaries that we think of as separating different sectors of activity like the public and private sector, right . Here we are, americans, we love to fight about which one the public or the private sector is more pernicious, right . Worse for your health. Let alone the criminal sector. As we all know Central America unfortunately is famous for criminal activity, but what becomes clear when you look carefully is that youve got a network that is made up of people at the top of the Public Sector, the private sector and the criminal sector and often they overlap or they share competences or they have a cutout like a representative that they will, you know one brother will be in the Public Sector and the other brother will be running a drug cartel. So you span these different sectors. And thats what this picture is supposed to at least, you know, evoke in peoples minds and i do want to just say well, i will say that later, but, david, if you wouldnt mind just giving me the next one. This info graphic does try to break it down for you. So the Public Sector members of the network have a responsibility and that is to distort state agencies or institutions, functions of government, if you will, to serve the purposes of the network as opposed to serving their stated purpose, which is the public interest. The public good. Exactly, the public good. Im not going to go through them all, but what this information does and what this infographic does is pick them apart a little bit. There are a couple obvious examples that ive seen in honduras but also in a number of other countries and one of them is the Justice Sector because there is a bargain that holds these networks together and its that money flows upward in the network and impunity flows downwards. There is a deal. You get, you know, for the part of the take that youre kicking upwards you are guaranteed protection from legal repercussions, and that can take a lot of forms in Different Countries. In honduras its particularly egregious. You had, you know, a midnight firing of four of the five justices of the Supreme Court, you know, this happened a number of years ago, but it can be the actual judges, it can be by capturing public prosecution. In some countries, i havent seen it in honduras, but in some countries where its difficult to actually capture the Justice Sector the network figures out how to work around it. So in egypt, for example, where judges did retain quite a bit of independence, president sisi has been focusing really hard on expanding the jurisdiction of the military courts, so that more and more cases can bypass the relatively independent civil system and be funneled through the much more controllable military system. Then the next thing lets just look at the next one. So the colors on this infographic are blue for government, green for private sector because thats money, right, at least to us and red for criminal sector because theyre bad guys except they are all bad guys. Anyway, we looked at the right sector and its not i mean, sometimes this can look like the entire system and you sort of say who is corrupt . Well, everyone is corrupt, you know, but it actually makes some sense to try to drill down and look at what are the specific Revenue Streams that are being captured by the network . So some of it, back to the Public Sector, is public procurement. Thats another way that these networks and in honduras in particular infrastructure, right . Big Infrastructure Projects like road building, ports, things like that. So you will see construction companies, but the Banking Sector is a classic. In this case it turns out that the network or networkaffiliated families control about half of the banking of the financial sector. Energy is a classic and in honduras its interesting because its not a country that has an extractive industry, right . There isnt oil or gas, its got a Mining Industry and so thats part of it, but no oil or gas, so quite interestingly its been energy generation, its been Electricity Generation that has been captured including renewables. That was a big surprise. The Solar Energy Sector has been company captured by this network and theyre getting sweetheart rates, very high rates. Palm oil also for biodiesel. A couple others. Interesting ones, nonprofit organizations. Its one to keep ones eye on because one of the important Revenue Streams of course is International Development financing and so if you can situate yourself to capture that flow its a pretty significant one. And then there is the criminal sector and i dont think i need to belabor that in case of honduras, but we have a case going on in new york right now, the former right . Son of the former president , is that who it is . I did want to ask you a question, im not trying to deflect no. No. Of course. So what makes it an operating system as opposed to just the whole bunch of crooked people . Thats a great question. And partly its you look at the personal relationships so in this case a piece of the private sector element is somewhat selfcontained and its culturally uniform to some extent. Its a lot of people who are descendents of immigrants from the middle east and they tend to live together, inter marry, go to School Together and exchange positions on each others boards of directors. Thats that selfcontainness is breaking apart a little bit in that we are now in the fourth generation, but its the exchange of personnel and the clear whats the word . I want to say you know, you look at the people who are making decisions and you will see the same names popping up in the decisionmaking processes and decisionmaking bodies. And then as i say the exchange of personnel. So you will have this private sector group im talking about, they have had a number of top officials selectively appointed in you know, at different stages. And then in the criminal sector also its youve got you can see its almost you have to do a social networking and i would have loved to have done enough of these personal link wajs so that we would have another another graph which would really be the social Network Diagram and i think that thats an important kind of avenue for further research on this topic. Whats the overriding goal of the system . Making money for network members. It really is revenue max am i zags. Now, we can get into a conversation about whether its money or power and does money get you power or does power get you money, but i think in this case and in general internationally i actually think money is the objective and power is more the means to that end than it has been in other times and places in human history. And the reason i say that in had the honduran case is the money people are bossing around the political people and the money people and the criminals who have access to money and obviously armed force are often bossing around the political people, too. You mean there is no ideological motive, its really money . Thats increasingly my view and thats a whole conversation we can also have about how money is displacing other you know, like measures of social value in the period that we live in today, around the world. That money increasingly is how is the exclusive way that we measure our social standing and therefore competition along elites is over money. Not over and therefore kind of how you make the money doesnt matter as much. Let me just say so criminal sector is pretty obvious, its largely the narcotics industry and then just one last two last points id love to make. All right. Go ahead. One is networks are more resilient than individuals and i think this is true of honduras but not just of honduras. I mean, youve seen next door in guatemala where some of the individuals committing some of these practices have been removed from office and prosecuted but thats not enough to really uproot a network like this and i think we all need to think about this as were thinking about how we interact with this overseas as those of you see who are involved in trying to affect policy to other countries, but also as we think about the repercussions here at home. These networks are you know, its like a fishing net, right . You can cut one knot out of a fishing net, that does not destroy the whole net. So thats pretty significant. And, therefore, we really have to think about and this was in court and in honduras was the positive organizations, the people fighting against this. We found were quite networked and we can talk about that further, but they are quite networked and theyre quite who holistic in their objectives. They arent singleissue organizations, i think partly because they understand, wow, this thing has infected a lot of our public space and we need to you know, and the affects are in multiple different domains. So i think its a good time to open it up for questions, right . Well, i mean, what you know, yeah. First of all, both sara and zephyr have agreed to call them by their first names so by calling them zephyr and sara i am not disrespecting them in any way. Sara, you have been sitting here patiently listening, what do you make of all of this . I think what sara is doing is really important and i just want to put it in a few different frame works. One is the framework of the last really 30 years of global the Global Anticorruption fight and anticorruption has drifted to the top of the global agenda. We put lots of money and energy and resources into anticorruption. So it really matters what we mean when we say corruption. And a few things have happened in that area, one is its been fairly tech know democratic and theres also been a hunch for toolboxes to catch the corrupt actors or particular strategies that might work. If you think about corruption as this sort of sideline problem, infection on an otherwise healthy body poll tick then that find of approach makes sense, its like we have this discrete problem in one area and we can fight it by a few laws here and a few more prosecutions here. What sara is suggesting that we should actually think about corruption in a fundamentally different way, not by looking at numbers of violations of bank secrecy laws, numbers of prosecutions on a particular kind of bribery statute, but rather when those in power use that power for private ends as opposed to public ends. So that totally changes the lens at which we look at things. Then i want to return at how this affects the United States. Because then you dont start with asking what kind of behaviors are happening and if these behaviors are happening you know its corrupt and if they are not we start by asking are those in power using public power for selfish ends or not, and then you start looking at power. So one of the important things that sara does in this report is not say that we look first at elected officials and then secondarily at those who influence them because to do that assumes that elected officials are those in power. You start with a default assumption that its those who get i elected or depending on what kind of government system are the source and the issue. Instead you look at who actually controls things. And that who actually controls things mattered. Now, what shes doing then is harkening back to a nora wrist tillian way of understanding corruption. As you may recall or may not, its okay if you dont, aristotle had a sixtier system of government. There were three ideal forms and three corrupted forms. The ideal forms were the monarch, the aristocracy and we will call it the democracy although at the time democracy had sort of a bad name, the polity. And the corrupted forms were the tyrant, the ol garky and, again, he would call it the democracy. Mod rule. Yeah. So whats the difference between these two, the corrupted and uncorrupted forms . Its not the number of people governing, its actually who they serve, the difference between the tyrant and the monarch is the monarch is publicly interested and the tyrant is out for his own ends. And so what shes describing in the arrest tillian sense is something close to the ruled by the few who are selfinterested. The ol gar beginning rule. And this may sound like, you know, everybody understands aristotle, but this is not the way that we operate internationally now. We tend to operate by looking at particular crimes and trying to stop those particular crimes. Id also say this has real resonance for our Current Situation in the United States. And we can talk later about the Trump Administration which is unique in its assault on a rule of law and unique in its disregard for any norms or laws not any, but norms and laws around corruption, but set aside donald trump. Prior to prior to this recent presidency we have a growing split between elites and the rest of the country, especially you d. C. Elites, but that a split between what we think of as corrupt and not corrupt and there is an incredible capacity of political elites to understand and rationalize behavior as not corrupt because its not illegal. Whereas if you talk to most people and most places in the country they look at the way we fund campaigns as profoundly corrupt, not just the way business is done but actually leading to those in power serving private ends instead of public ends. And id like to jump in on that and ask sara because one of her points zephyr was making is how you can get to what you call a clep tok kraes through legal means, by changing laws. What used to be a democracy, what used to be a somewhat honest system becomes a dictatorship through legally enacted means. And so what have you seen that looks like that and if you could talk a little bit about some of the other things in your report how each of the sectors, the private, the Public Sector, the criminal sector, the sector that you call enablers, how all of those people are according to a report working in honduras to make this operating system reach its max zags of money. So the legal question is a really interesting one because and im going to stray from honduras again for a second but say that one of the things that these Network Elites wherever they are typically use to keep the population down, if you will, is legalisms and frankly a u. S. Example that had my jaw on the ground was the eight to zero Supreme Court ruling last july that threw out the corruption conviction of governor mcdonald of virginia. Its in this area. I could even have swallowed if it had gone that way on a split ruling. It was the eight to zero part of it that really blew me away and the fact that nobody even thought to write a concurring opinion saying, golly, okay, given the way the law is written we had to vote this way, but and a couple of butts about what the indications are, but let me just spell out why that conviction was thrown out. It was thrown out not because there was no clear quid pro quo, there was one, it was the definition of what an official act is. So the guy had set up meetings for his business benefactor, right . He had set up meetings maybe even in the governors mansion, he had certainly used, you know, public instruments like his telephone and things like that, but an official act was being was being defined ever more narrowly essentially to the point that it seems like for something to be considered corrupt in this country you almost need to sign a contract. At least in virginia. No. No, it was Supreme Court of the United States. Yeah. This was but wasnt the ruling based on the virginia law and what the virginia law was u. S. Law, right . No, no, this is a matter of u. S. Law. Just to underline what air ra is talking about, we have a Supreme Court who has narrowed the definition of corruption in two distinct areas, the laws that are prophylactic laws, the laws that will make corruption less likely Like Campaign finance law, in other words, the Citizens United what she means by prophylactic is like the upstream laws, the laws that upstream of an act actually being committed would stop it. Right, would prevent the series of events that would make corruption likely. So its like yeah, sorry. So in those cases what the court says is we dont need these laws because we have bribery l