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Corruption and the critical need for accountability

Article by Susan Coughtrie

January 31, 2025

Corruption and the critical need for accountability

Corruption, as understood to be “the abuse of entrusted power for private gain,” is hardly a new phenomenon, however the scale to which it occurs today, especially transnationally, and more often than not with impunity, can be seen to be a key driver of global disorder.[1]

 

To a greater or lesser extent corruption happens in every country, and at every level.  Over the past decade, however, there has been a succession of large scale investigations, conducted by global networks of journalists, together with civil society, that have exposed an evolving, complex transnational dimension.[2] Political and business elites as well as organised crime groups from across  the world have misused financial and legal systems, usually in multiple jurisdictions, to facilitate the theft of public funds, tax avoidance, money laundering, bribery and other forms of crime and corruption.

 

Particularly insidious is the abuse of political positions, especially in developing or transitioning countries, to enrich a relatively small group of elites and entrench their power, which is then wielded to shut down independent or critical voices, shifting those countries trajectories in increasingly authoritarian directions. Russia under President Putin’s leadership has been a prime example, but it is far from alone.[3]

 

If left unchecked, corruption can impoverish nations, stoke division and violence, exacerbate crises from the environmental to the economic, as well as undermine the rule of law and more broadly the liberal international order.[4] In short, it creates a distortion or series of them, which untie the fabric of societal norms, through the erosion of public trust and a denigration of a just social contract.[5]

 

The global corruption crisis

The scale of corruption worldwide is challenging to quantify. In 2018, the World Bank estimated that $2.6 trillion USD is stolen through corruption annually – a sum equivalent to more than 5 percent of the global Gross Domestic Product (GDP) and that $1 trillion is paid in bribes every year by businesses and individuals.[6] In the abstract the figures feel somewhat intangible, but looking at cases provides more insight into the impact of corruption.[7] Below are six examples from across the globe:

 

  • Between 2012-14, the Azerbaijani Laundromat, a complex money laundering scheme funnelled US$2.9 billion out of the country through four shell companies registered in the UK.[8] These funds were then allegedly used by members of Azerbaijan’s political elite to benefit themselves as well as buy influence in Europe to whitewash the country’s abysmal human rights record in what has been termed ‘Caviar Diplomacy’.[9]

 

  • In 2014, US$1 billion disappeared from three Moldovan banks creating a hole in the country’s public finances equivalent to an eighth of its GDP.[10] Moldova is often referred to as Europe’s poorest country, where wages average US$200 per month.[11] The money was stolen via UK and Hong Kong registered companies.[12] Moldovan banks were also implicated in the Russian Laundromat, a scheme that allegedly laundered US$20+ billion from Russia between 2010-14.[13]

 

  • One Coin, a cryptocurrency scam, whose founder Ruja Ignatova disappeared in 2017 and is on the FBI’s most wanted list, is estimated to have resulted in US$4.5billion being stolen in a pyramid scheme affecting millions around the world, including those in some of the poorest countries.[14]

 

  • In 2021, the ‘Congo is Not for Sale’ coalition estimated that the Democratic Republic of Congo was facing losses of at least US$3.71 billion from suspect mining and oil deals with businessman Dan Gertler.[15] Corruption allegations, which he has always denied, have followed Gertler for years and lead to him being subject to sanctions.[16] The DRC is one of the five poorest countries in the world.[17]

 

  • The 1MDB Scandal involved a Malaysian state fund, set up in 2009 to purportedly promote the country’s development through foreign investment and partnerships, being embezzled to the tune of US$4.5 billion to fund lavish lifestyles and even a Hollywood movie.[18] The then Malaysia prime minister, Najib Razak, the fund’s chairman, was later jailed for his involvement.[19] The alleged mastermind businessman Jho Low, remains on the run from justice in Malaysia, Singapore and the US.[20]

 

  • The Luanda Leaks, published in 2021, exposed two decades of ‘unscrupulous deals’ made by Isabel dos Santos, the daughter of Angola’s former president and Africa’s wealthiest woman, who according to the UK Government systematically abused her positions at state-run companies to embezzle at least £350 million.[21] Despite being oil- and diamond-rich Angola, is one of the poorest countries. Dos Santos has been subject to an Interpol Red Notice since November 2022.[22]

 

The Impact of Corruption

The impact is felt most directly by the populations in the countries where the wealth is being stolen. Yet there is a ripple effect, including into states that have played a role in facilitating that corruption through their financial and legal systems – among others, this includes the UK and US.

 

Countries with high levels of corruption will act in the interest of their elites, rather than their people, which distorts both domestic and foreign policy. It is unsurprising that high levels of corruption frequently correlate with the lowest protections for democracy and fundamental rights.[23] According to the Economist Intelligence 2023 Democracy report “less than 8% of the world’s population live in a full democracy, while almost 40% live under authoritarian rule—a share that has been creeping up in recent years.”[24] Corruption can feed into several aspects linked to democratic backsliding, including: the spread of disinformation; attacks on fundamental rights, including media freedom and access to information; concerns about political funding and the impact on electoral integrity; all of which affect both individual and national security.

 

While  corruption is routinely exposed by journalists, whistleblowers and civil society, they are more frequently the ones most likely to face direct consequences, as opposed to those whose wrongdoing they expose. The Committee to Protect Journalists has registered 314 journalists confirmed as being murdered for reporting on corruption worldwide since their records began in 1992, 234 of those with impunity.[25] FPC’s Unsafe for Scrutiny survey, conducted in 2020 with the participation of 63 journalists investigating financial crime and corruption in 41 countries found that over 70% of respondents were subject to some form of threat as a result of their work.[26]  The findings pointed to a growing trend of legal challenges, referred to as SLAPPs (strategic lawsuits against public participation), being used to shut down investigations. Alarmingly, the UK, a notoriously expensive jurisdiction, was identified as respondents as the leading international source of these legal challenges, almost as high as those coming from EU countries and the US combined.

 

Unsurprisingly those with deep pockets, enriched with illicit funds, are inevitably strongly motivated to find any way to shut down any scrutiny of potential wrongdoing. Dis-and-mis information also plays a critical role in covering up corruption. Wrongdoing can be obfuscated by sowing distrust of independent media and civil society (including through the use of smear campaigns, e.g labelling independent journalists and civil society ‘foreign agents’) and by offering alternative narratives. This can ultimately foster a lack of trust within society of any information.

 

The impact corruption has on trust, which democratic societies require to function properly, can be significant. In 2018, the then Head of the International Monetary Fund, Christine Lagarde blamed corruption for the lack of trust in business. Legarde cited data from that year’s Edelman Trust Barometer, which found the average trust in government, business, NGOs and media was below 50%.[27] The latest Edelman Trust Barometer report, for 2025, “revealed a profound shift to acceptance of aggressive action, with political polarization and deepening fears giving rise to a widespread sense of grievance…Those with a high sense of grievance distrust all four institutions (business, government, media, and NGOs).”[28]

 

In the UK, allegations of ‘chumocracy’ and corruption, particularly around the awarding of COVID contracts, in recent years has caused considerable public outcry. A 2024 report by  Transparency International-UK (TI-UK), found that “at least 28 [COVID] contracts worth £4.1 billion… went to those with known political connections to the party of government in Westminster – almost one in ten pounds spent on the pandemic response” and that this had “erod[ed] trust in political institutions.”[29]

 

Meanwhile a 2024 study into Latin American countries found that in the aftermath of corruption scandals involving those in the highest political office ”support for democracy falls by 0.07, support for authoritarianism rises by 11% and violent protests rise by 70%.[30] Most revealing though was the study’s finding that corruption damages citizens’ trust in each other.[31]

 

All of this is highly detrimental to democracy and exposes a form of corruption that goes beyond just the financial. Measures to combat corruption must therefore not only seek to achieve justice and accountability for the crimes committed, but also to remedy the wider impacts and restore public trust.

 

Countering corruption

The exposure of corruption has led to high profile resignations; changes to financial regulation; arrests and indictments against criminal figures; as well as the recovery of several billion in fines and seizure of illicit funds.[32] Yet what is recouped is usually a small percentage of what was lost and, as indicated above, the wider implications are rarely, if ever, effectively addressed.

 

Countering corruption requires political will and a comprehensive approach. The UK, which has a profile not only as a facilitator of financial crime, a destination for illicit money and the source of a wide range of enablers, has a lack lustre history in this area. In a notable step towards creating some level of accountability, the UK launched ‘Magnitsky style’ sanctions in 2020 (long after the US), but it took Russia’s full scale invasion of Ukraine in February 2022, to push the issue to the top of the political agenda.[33] However, action has been slow and as TI-UK notes, despite the introduction of two Economic Crime Acts in 2022-24 “major loopholes remain.”[34]

 

While the new Labour Government has recently appointed an anti-corruption champion and launched a new campaign to tackle kleptocracy, it has also been struck with its own challenges. Moreover, the networked nature of corruption also means that no country can address the issue alone. With shifting dynamics within international relations, as well as a new President in the White House who has had his own brushes with corruption allegations, it is likely that any efforts to create positive change will be all the more challenging to realise.

 

Susan Coughtrie has been Director of the Foreign Policy Centre since January 2023, after previously serving as Deputy Director from July 2022. Susan joined FPC in July 2020 as Project Director for the Unsafe for Scrutiny project, which explores the risks and threats facing journalists uncovering financial crime and corruption. The findings of this research led Susan to co-found the UK Anti-SLAPP Coalition in January 2021, which she continues to co-chair. She was the lead author of the FPC report ‘London Calling’: The issue of legal intimidation and SLAPPs against media emanating from the United Kingdom, published together with ARTICLE 19 in 2022.

 

 

Disclaimer: The views expressed in this piece are those of the author and do not reflect the views of The Foreign Policy Centre

 

 

[1] Transparency International defines corruption “as the abuse of entrusted power for private gain.” https://www.transparency.org/en/what-is-corruption

[2] International Consortium of Investigative Journalists, ‘About’, https://www.icij.org/about/

[3] Transparency International, ‘Corruption Perceptions Index’, 2023,  https://www.transparency.org/en/cpi/2023

[4] The ‘Liberal International Order’ is a term used to describe a set of governing ideals, rooted in WWII, in which nations adhere to multilaterialism (through institutions such as the UN, IMF, World Bank, WTO, etc), and subscribe to cooperation on and the promotion of human rights, the rule of law, monetary and trade policies, security, and open markets; for a through analysis and key debates on the nature of this order, see G John Ikenberry, Inderjeet Parmar, and Doug Stokes, eds., Ordering the World? Liberal internationalism in theory and practice, International Affairs special issue 94, 1 (2018).

[5] Jean-Jacques Rosseau, ‘The Social Contract’, December 2010, https://www.earlymoderntexts.com/assets/pdfs/rousseau1762.pdf

[6] https://press.un.org/en/2018/sc13493.doc.htm

[7] A good place to start is the projects by the Organised Crime and Corruption Reporting Project (OCCRP) https://www.occrp.org/en/projects or the International Consortium of Investigative Journalists (ICIJ) – https://www.icij.org/investigations/ . Transparency International also have a list (from 2019)

[8] Organised crime and Reporting Project, ‘The Azerbaijani Laundromat’, 04 September 2017, https://www.occrp.org/en/project/the-azerbaijani-laundromat

[9] European Stability Initiative, ‘Caviar Diplomacy: Why every European should care’, 2024,

https://www.esiweb.org/proposals/caviar-diplomacy

[10] Paul Radu, Mihai Munteanu, Iggy Ostanin, ‘Grand Theft Moldova’, Organised crime and Reporting Project, 24 July 2015, https://www.occrp.org/en/investigation/grand-theft-moldova

[11] Ibid.

[12] Tim Whewell, ‘The great Moldovan bank robbery’, BBC News, 18 June 2015, https://www.bbc.co.uk/news/magazine-33166383

[13] Organised crime and Reporting Project, ‘The Russian Laundromat Exposed’, 20 March 2017, https://www.occrp.org/en/project/the-russian-laundromat-exposed/the-russian-laundromat-exposed

[14] Rob Byrne, ‘Ruja Ignatova: Fugitive ‘‘Cryptoqueen’ hit by asset freeze’, BBC News, 07 august 2024, https://www.bbc.co.uk/news/articles/c9d1y0z4z9no

[15] Raid UK, ‘Le Congo n’est pas a vendre’ May 2021, https://raid-uk.org/wp-content/uploads/2023/11/Billions-Lost-Final-EN-web.pdf

[16]  Virginia Canter, ‘Lifting DRC Mining Sanctions Would Be a Critical National Security Error’ Just Security, 19 August 2024, https://www.justsecurity.org/98716/gertler-sanctions-national-security/

[17] World Bank Group, ‘Democratic Republic of Congo: The World Bank in the DRC’, https://www.worldbank.org/en/country/drc/overview

[18] Hannah Ellis-Petersen, ‘1MDB scandal explained: a tale of Malaysia’s missing billions’, The Guardian, 28 July 2020, https://www.theguardian.com/world/2018/oct/25/1mdb-scandal-explained-a-tale-of-malaysias-missing-billions

[19] Ibid

[20] The Straits Times, ‘ 1MDB fraud mastermind Jho Low reportedly hiding in Macau’, 21 November 2024, https://www.straitstimes.com/asia/se-asia/1mdb-fraud-mastermind-jho-low-hiding-in-macau-says-malaysia-s-anti-corruption-body-in-report

[21] International Consortium of Investigative Journalists, ‘Luanda Leaks’, 2020, https://www.icij.org/investigations/luanda-leaks/;

[22] Foreign, Commonwealth & Development Office, Home Office, The Rt Hon Yvette Cooper MP and The Rt Hon David Lammy MP, ‘Press Release: UK cracks down on dirty money with fresh sanctions’, GOV.UK, 21 November 2024,

https://www.gov.uk/government/news/uk-cracks-down-on-dirty-money-with-fresh-sanctions

[23] Economic Intelligence, ‘EUI Report: Democracy Index 2023’, 2023, https://www.eiu.com/n/campaigns/democracy-index-2023/ ; https://www.transparency.org/en/cpi/2023, and Reporters Sans Frontiers, ‘2024 World Press Freedom Index – journalism under political pressure’, 2024, https://rsf.org/en/2024-world-press-freedom-index-journalism-under-political-pressure

[24] EUI Report: Democracy Index 2023, https://www.eiu.com/n/campaigns/democracy-index-2023/

[25] Committee to protect Journalists, ‘CPJ Data’, 31 January 2025, https://cpj.org/data/killed/?status=Killed&motiveConfirmed%5B%5D=Confirmed&type%5B%5D=Journalist&typeOfDeath%5B%5D=Murder&coverages%5B%5D=Corruption&start_year=1992&end_year=2025&group_by=year

[26] Susan Coughtrie and Poppy Ogier, ‘Unsafe for Scrutiny: Examining the pressures faced by journalists uncovering financial crimes and corruption around the world’, Foreign Policy Centre, November 2020, https://fpc.org.uk/wp-content/uploads/2020/11/Unsafe-for-Scrutiny-November-2020.pdf

[27] Christine Lagarde, ‘There’s a reason for the lack of trust in government and business: corruption’, The Guardian, 04 May 2018, https://www.theguardian.com/commentisfree/2018/may/04/lack-trust-government-business-corruption-christine-lagarde-imf

[28] Edelman, ‘2025 Edelman Trust Barometer’, 2025, https://www.edelman.com/trust/2025/trust-barometer

[29] Transparency International UK, ‘Behind the Masks: Corruption red flags in COVID-19 public procurement’, 12 September 2024, https://www.transparency.org.uk/sites/default/files/2024-11/Behind%20the%20Masks%20Report%20Final_0.pdf

[30] Eduardo RiveraEnrique SeiraSaumitra Jha, ‘Democracy Corrupted: Apex Corruption and the Erosion of Democratic Values’, Working Paper No. 4166, May 2024, https://www.gsb.stanford.edu/faculty-research/working-papers/democracy-corrupted-apex-corruption-erosion-democratic-values

[31] Stanford Report, ‘How corruption at the top erodes support for democracy’, 25 October 2024, https://news.stanford.edu/stories/2024/10/how-corruption-top-erodes-support-democracy

[32] https://www.occrp.org/en/about-us/impact-to-date

[33] James Bolton-Jones and Dr Susan Hawley, ‘The first UK sanctions strategy – our analysis’, Spotlight on Corruption, 26 February 2024, https://www.spotlightcorruption.org/the-first-uk-sanctions-strategy/

[34] Rachel Davies Teka, ‘UK Government announces ‘clamp down on corruption and illicit finance’, Transparency International UK,  https://www.transparency.org.uk/news/uk-government-announces-clamp-down-corruption-and-illicit-finance

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