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Donald Trump’s Quiet Christmas Gift to the Kleptocrats

Despite being under the intense scrutiny of impeachment, the White House remains devoted to enabling foreign graft and corruption.

Nicholas Kamm/AFP/Getty Images

Nearly two decades ago, Nursultan Nazarbayev, the then doughy dictator of Kazakhstan, came hat in hand to the George W. Bush White House, desperate to make a deal. The post-Soviet strongman had a problem: The Department of Justice had accused Nazarbayev of gob-smacking bribery. Per the DOJ, the Kazakh leader had put the squeeze on a range of hydrocarbon companies, hoping to tap the country’s vast oil wealth. Those companies reciprocated by funneling tens of million of dollars to Kazakhstan’s kleptocrat in chief. All run through Swiss bank accounts, the ill-gotten gains provided Nazarbayev with luxe creature comforts such as snowmobiles, fur coats, and speedboats. Caught red-handed, Nazarbayev needed President Bush and his staff to help make his judicial issues go away.

Those allegations resulted, at the time, in the largest case ever brought under the auspices of the Foreign Corrupt Practices Act, the keystone in the United States’ anti-corruption regime. The charges were also a thumping embarrassment for Nazarbayev, who had sought to spin his image as a democratizing, West-leaning figure. (Among those Nazarbayev roped into his whitewashing efforts: Tony Blair.) Nazarbayev leaned on the Republicans in the White House to try to make the allegations disappear. As one analyst wrote, Nazarbayev “so dreaded being tarnished” by a conviction “that both he and his envoys pleaded repeatedly for the George W. Bush Administration to order the case be dropped.” He sicced his underlings on Dick Cheney, who dodged Nazarbayev’s efforts. (According to the Financial Times, Cheney “rebuffed” the Kazakhs, “recommending in essence that they hire a good lawyer.”) Nazarbayev then turned directly to Bush himself—but, as The New York Times reported, the dictator’s henchmen were “told there was nothing the administration could do about the investigation.”

And that was that. A Republican administration had sent a post-Soviet kleptocrat packing, allowing a DOJ investigation to continue humming along unperturbed. Nazarbayev continued to sweat as further details of his financial malfeasance came to light. The case itself eventually fell apart, for a range of disparate reasons. Nevertheless, the revelations helped inspire lawmakers to eventually draft pioneering regulations requiring hydrocarbon companies to disclose their payments to foreign governments. The entire episode also highlighted how an executive branch could, and should, push back against foreign crooks trying to quash American investigations.

But those days are gone. The past few months, which have culminated in the third impeachment of a U.S. president, have demonstrated that President Donald Trump and his ideological allies have no intention of following in Bush’s footsteps by rejecting foreign corruption. While Trump insists that his unprecedented pressure campaign in Ukraine was an effort to fight foreign graft, he and his allies have taken a sledgehammer to the very anti-corruption regulations assembled to ensure that a repeat of the “Kazakhgate” affair never happens. And if you think that being under the white-hot spotlight of impeachment has chastened the president, think again: The Trump administration’s latest effort to undermine the global effort against kleptocracy happened right before the holiday season kicked off, in the height of impeachment fervor.


Amid the daily deluge of news about Trump’s various scandals, it can be difficult to appreciate the lengths to which this administration and its congressional allies have gone in their attempts to decimate America’s preeminence in global anti-corruption measures. (For a comprehensive rundown, see here.) Trump’s bids to implode the U.S. anti-corruption efforts go back to the earliest days of his presidency, when, in one of his first official acts, he and his House GOP allies employed a “rarely used” mechanism to prevent the implementation of a regulation mandating that major oil and gas companies disclose their payments to foreign governments.

Known as Section 1504, and colloquially as the “Cardin-Lugar provision,” the regulation was, as anti-corruption watchdog Global Witness wrote, “a beacon of U.S. leadership in the global fight against oil and mining corruption.” It struck at the heart of what is considered to be the most corrupt industry extant. (If imitation is the sincerest form of flattery, then Section 1504 was one of the most successful anti-corruption mechanisms the U.S. has ever introduced: Governments from Canada to Norway to the European Union quickly implemented their own versions of the provision.)

After Trump targeted Section 1504 for decimation in the early days of his tenure, his Securities and Exchange Commission used the cover of impeachment to try to finish the job. Because of the legislative mechanism Trump and his allies used to initially gut Section 1504, they couldn’t repeal the statute entirely; rather, the SEC is still required to implement a version of the provision. But the SEC’s new draft proposal, announced just as everyone was leaving for the holidays, makes an absolute mockery of the original anti-corruption intent of Section 1504—and highlights just how cozy the Trump administration is with the pro-corruption, anti-transparency forces swirling America’s oil and gas sector.

The SEC’s draft proposal, for instance, comes riddled with exemptions, allowing companies to file certain payment information confidentially—or in some cases, leave out the information entirely—and all but eliminating the transparency the provision was originally meant to provide. It also raises the threshold for minimum filing requirements, limits which projects would require disclosure, and effectively eliminates the ability for citizens to track information about contracts.

The SEC’s proposal confirms the worst fears of leading anti-graft voices: that one of America’s foremost anti-corruption tools has, under Trump, been transformed from a force into a farce. “It was a big letdown, I have to say,” Zorka Milin, a senior legal adviser with Global Witness, told The New Republic. “It just seems like they sort of looked at every single aspect of [Section 1504] and reversed themselves from what they did a few years ago … and I certainly did not expect that.”

The draft proposal is not yet implemented, and there’s still a chance the language could change—especially if discussions drag into next year or into a new administration. But for the moment, the damage is obvious. Global Witness said in a statement that the current draft proposal would “utterly fail to safeguard against corruption in the extractives sector and appears instead to be a massive handout to the oil and gas industry.” Per Oxfam, the draft proposal would “facilitate corruption,” acting as “a handout for kleptocrats and industry insiders” and something that “plays into the hands of corrupt politicians, compromised bureaucrats, and insider lobbyists who thrive on secrecy.” And Publish What You Pay, a group of civil society organizations that pushes for financial transparency in the extractives sector, was blunt: Following Trump’s and his allies’ efforts to roll back pro-transparency language, the SEC’s new proposal would “enable bribery and corruption.”

If there’s good news amid the Trump administration’s ongoing efforts to kneecap the role of the U.S. as a global leader in the fight against corruption, especially in the oil and gas sector, it’s that other nations haven’t yet followed suit. Norway, Canada, the European Union—all those who trod in the previous footsteps of the U.S., demanding that major hydrocarbon companies disclose information on payments to foreign governments—have maintained their regulations thus far, filling the vacuum left by Trump’s America. Even the White House’s 2017 move to pull the U.S. back from the Extractive Industries Transparency Initiative, the foremost consortium advocating for disclosure about oil, gas, and mining assets, hasn’t led to a cascade of others withdrawing, as some feared.

But those realities are little more than silver linings—and only serve to highlight the yawning regulatory gap Trump has opened. Where Washington once stood as a leader in the fight against spiraling corruption, there is now an administration bent on glad-handing kleptocrats and crooks across the world, decimating America’s anti-corruption legacy along the way. And with so many mobbed-up crooks lined up to enlist Rudy Giuliani’s services to bend Trump’s ear, there has arguably never been a better time to be a member of the kleptocratic elite trying to milk hydrocarbon companies, bilk citizens and investigators alike, and sop up every drop of dirty money they can. These bad actors can certainly look at the SEC’s most recent actions as a cause for celebration.

For those committed to good government, however, it’s a sign of woes to come. “I think that the optics of this are not good for the broader history of U.S. leadership on anti-corruption issues,” Milin said:

[The U.S. has] a very long and proud history of leading on these issues, and these U.S. policies have catalyzed change all over the world—and I think the real question is, can we expect that going forward? Unfortunately, based on the [SEC proposal], that’s not a hopeful answer.

All that is to say, if Nazarbayev had only waited for Trump to take office, all of his efforts to cajole the White House would have paid dividends—and he could have enjoyed all of his ill-gotten snowmobiles and speedboats in peace. As they say, timing is everything.