2020 Has Shined a Light on Corruption

Now an Alliance of Democracies is Pushing Back

KEITH KRACH, UNDER SECRETARY FOR ECONOMIC GROWTH, ENERGY AND THE ENVIRONMENT

By: Keith Krach and Nathan A. Sales

December 9, 2020

The pandemic of 2020 will be in the history books for a long time. But this year will also be remembered as the year that citizens of the world woke up to the truth about the Chinese Communist Party’s (CCP’s) doctrine of concealment, co-option, coercion, and corruption.

Citizens saw the CCP conceal the initial coronavirus outbreak, eviscerate Hong Kong’s freedoms, commit human rights atrocities in Xinjiang, and use corruption to spread its 5G networks. The good news is all of this has given governments and businesses the will to act. And now the tide is turning against the CCP.

Although the People’s Republic of China (PRC) has long been a state party to the UN Convention Against Corruption, like many of its engagements with international institutions, it uses its membership as a fig leaf to conceal its flagrant abuses. Corruption is embedded in the very DNA of the CCP and its policies, most notably One Belt One Road (OBOR)–its signature foreign policy platform built on a series of large-scale infrastructure development projects around the world.

Under the OBOR banner, the PRC uses vast, market-distorting subsidies to force its way into markets and to build unsustainable, environmentally irresponsible infrastructure projects around the world. These projects are often financed courtesy of Beijing’s irresponsible and predatory lending, which leaves already-indebted economies footing the bill for roads and railways that exist to serve Beijing’s interests–delivering Chinese exports and extracting local resources.

Adding insult to injury, Beijing often relies on Chinese labor and awards contracts to PRC state-owned enterprises, minimizing even temporary economic benefits that OBOR might bring to host economies. With substandard labor and environment practices, the projects can also leave environmental devastation and even social unrest in their wake.

Prominent Chinese technology companies are also complicit. Two of the largest, Huawei and ZTE, have been implicated in corruption scandals in at least 15 African countries. ZTE bribed Liberian officials to win a lucrative contract to provide telecommunication services over an American company, and Huawei was probed over allegations of bribery involving a multi-million-dollar contract to build cell towers in rural areas in Zambia. In Algeria, Huawei was banned from bidding for public contracts after its executives allegedly paid $10 million in bribes to a former state telecom executive.

PRC corruption also infects academic freedom around the world. In November 2019, the Chinese embassy in Prague was discovered to have been secretly paying professors at Charles University, the Czech Republic’s most revered academic institution, to paint a positive image of PRC investment and economic opportunities. Similarly, Beijing uses Confucius Institutes throughout the United States and the world to monitor speech and promote censorship on campuses.

This ongoing corruption hurts the security and economic well-being of entire societies. The United States has long recognized and prioritized efforts to combat the destabilizing effects of global corruption. The United States was the first country to criminalize foreign bribery over 40 years ago, with the Foreign Corrupt Practices Act.

More recently, in 2019, the U.S. Department of Justice issued its highest number of foreign bribery charges against individuals of any year in history, as well as the most convictions. The United States is also empowering partners to fight corruption. Over the last three years, we have provided over $100 million annually in foreign assistance to build anti-corruption capacity. And the U.S. is working with numerous multilateral bodies. Last month, we continued to demonstrate this leadership in the G-20′s first-ever Anticorruption Ministerial.

The key is marshalling countries to serve as a counterbalance to PRC corruption worldwide. In the area of global technology security, the Clean Network serves as a model of turning the tide against the CCP surveillance state and corrupt vendors such as Huawei and ZTE.

This rapidly growing coalition operates by a set of democratic trust principles and is now comprised of over 50 like-minded nations, 180 telecommunication firms, and many industry leading companies.

The success of this alliance of democracies has formed a solid foundation for other areas of collaboration such as clean infrastructure. The U.S. has partnered with Japan and Australia to launch the Blue Dot Network, which now includes Taiwan and the twelve Three Seas Nations, to certify trusted, high quality, corruption-free infrastructure projects.

The entire world suffers when the PRC cheats, swindles, and bribes its way to influence and wealth. This global problem requires a global solution that inspires governments, businesses, NGOs, and everyday citizens. The Clean Network provides a framework for uniting a coalition of trusted partners to shine a light of transparency on CCP corruption and reduce the space for PRC corrupt practices.

Keith Krach, Under Secretary of State

Nathan Sales, Coordinator for counterterrorism