Keeping Foreign Corruption out of the United States

[The following are excerpts from a statement before the Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, Washington, DC, February 4, 2010.]

Corruption Transcends Borders

In 1968, Martin Luther King said:

  We are tied together in the single garment of destiny ... And
  whatever affects one directly affects all indirectly.

Those words could not be truer of the impact of global corruption, which threatens several vital U.S. national interests while at the same time it threatens the integrity and prosperity of developing states. Corruption hampers U.S. international trade, affecting the ability of U.S. companies to do business abroad, which in turn erodes U.S. jobs. In some countries, large government contracts are awarded on the basis of bribes rather than merit. U.S. companies are believed to have lost out on business opportunities worth about $27 billion in the past year alone because they refused to violate honest business practices. Some have abandoned markets altogether, while some unscrupulous competitors take advantage of the corrupt environment to gain control of strategic markets and materials.

Corruption undermines humanitarian and development goals, as it diverts resources away from productive activities that foster sustainable development. The World Bank has identified corruption as the single greatest obstacle to economic and social development. Diversion of resources through corruption robs communities of investments in schools, hospitals, and other areas critical to their hopes and futures. The African Union and the African Development Bank estimate that corruption costs Africa more than $148 billion a year. Corruption has a similarly catastrophic impact on development in communities in other parts of the world.

Corruption undermines the trust and confidence of citizens in the fairness and impartiality of public administration, and weak governments are made weaker by widespread corruption. In a world where stable partnerships are necessary to advance U.S. interests, corruption can destabilize geopolitically important partners. Notable examples include Kenya and Thailand, where corruption has fueled incidents of political instability over the last decade. Corruption can also undercut stabilization efforts in emergent states and post-conflict situations by robbing needed capital, deterring investment, eroding support for the government, and siphoning off development assistance. …

To read the full text of this article and others like it, subscribe today!