Aiding the Eastern European chessman is essential for the US

All too often, international relations is looked at in a static, startlingly incurious manner, as chess pieces on a board that have no internal dynamics of their own — or at least none that matter. It’s a terrible way to look at the world, as if what goes on inside the engine doesn’t affect the performance of a car. 

Instead, it is time to put meat on the bones regarding what President Biden meant when he announced to allies that “America is back.” Soothing rhetoric is fine, but it is not remotely enough. If the U.S. is to truly bolster its partners in the world — particularly the pro-American countries of Central and Eastern Europe — it must support what goes on inside the region’s “chess pieces.”

These pro-American states fear challenges to their sovereignty from Russia and Belarus and need bolstering domestically, partly because it is only then that they can act on the chess board in a manner that suits themselves and their American partners. 

It is clearly in American national interests that these Central and Eastern European allies have stable political systems, grounded in the rule of law, so they can withstand both internal corruption and external subversion. Otherwise, weak institutions can be readily manipulated, by foreign governments from without and criminal actors from within.

There is little doubt that many Central and Eastern countries desperately need America’s help. Too often, local leaders pretend to conduct judicial reforms or fight money laundering while covering up for top government officials and oligarchs. First, Moldova is just now recovering from a 2014 scandal in which the country lost 12 percent of its GDP in a complex bank fraud scheme.

Second, even though Ukraine has created a National Anti-Corruption Bureau, the U.S. Chamber of Commerce reports that the lack of the rule of law and extreme rates of corruption continue to deter vitally necessary foreign investment in the country.

Third, Latvia’s banking system is mired in a money-laundering operation, possibly linked to the Kremlin (it also is encompassing Moldova). The country’s elite have been found wanting, in terms of a judicial crisis in which journalists are attacked and investigations of businesses and politicians are hindered.

Latvia has come under pressure from the U.S. and European Union to clean house. Yet, its performance remains lacking; it has suffered from poorly organized anti-money laundering policies, which appear to have backfired. In their eagerness to please, Latvian law enforcement froze over $1.5 billion of “suspected” funds, while operating based on artificial Cabinet-set monetary targets specifying the funds to interdict, rather than focusing on the genuine nature of the problem.

Latvia’s Financial Intelligence Unit leaders have demanded to expedite the process, disregarding the applicable constitutional norms, criminal procedure and rules of evidence, says Jelena Kvjatkovska, a Riga-based lawyer with Rode & Partneri. Prosecutor General of Latvia Juris Strukans blamed “the Americans” for the seizure of bank deposits. Worse still, judges lacking experience on the bench or the necessary economic and financial background were appointed to hear complex cases about which they had no clue, she adds. 

This rush to justice inevitably led to innocent people being convicted while culpable senior officials walk free. Few convictions of Latvian Cabinet members or other insiders have happened; the courts, in fact, have exonerated senior officials.

In a most notorious case, FINCEN, the anti-money laundering arm of the U.S. Treasury, initiated proceedings against Ilmars Rimcevics, former chairman of the Latvian Central Bank, who was inexplicably making more than the chairman of the U.S. Fed. However, the Latvian Corruption Prevention and Combating Bureau dropped the case for lack of evidence.

On the other hand, the head of Latvia’s Financial Investigation Agency, Ilze Znotina, was recorded instructing judges to disregard evidence and witnesses in the interest of expedient corruption trials. But this is throwing the baby out with the bathwater. Perpetrating corruption to eradicate corruption is a tactic that is destined to forever fail.

In building an effective legal system, constitutions and criminal procedures, it is imperative that law enforcement and local judiciaries observe a political culture grounded in the rule of law. Otherwise, new institutions are sure to be abused and weakened to the point that the chess piece dies from within. 

So how should the Biden administration help the Central European chess piece? The paradoxical answer is that they must care far more about what goes on inside the chess piece if it is to be part of the larger match. The Biden administration must try to enhance cooperation between local judiciaries and law enforcement agencies, working with the European Union, to provide technical support, training and best practices.

The problem with this decidedly unglamorous approach is that it takes decades to sink in, and the results are almost impossible to see — let alone quantify — which makes it hard to stir American enthusiasm to see the anti-corruption race through to its end. But only such an organic policy approach can eradicate the corruption cancer over time, with the U.S. helping to heal its Central and Eastern European allies from within. Only then will the battle against corruption be truly won.

But if the policy results are hard to discern and long in coming, the strategic rewards will be overwhelming. A healthy, prosperous, vibrant, democratic Central and Eastern Europe — grounded in a political culture that is based firmly on the rule of law — would amount to a geostrategic bonanza for the United States. Russian overtures to the region would look pathetic, discredited and could be thrown off easily. In dealing with the endemic domestic internal weakness that is the price of corruption, a strengthened Central and Eastern Europe could help its American ally to mitigate the Russian strategic threat to the east.

Maintaining this critical alliance edge must become a cardinal feature of American foreign policy. Helping our friends in Central and Eastern Europe to help themselves makes sound moral, strategic and geopolitical sense.

Dr. John C. Hulsman is president and managing partner of John C. Hulsman Enterprises, a global political-risk consulting firm headquartered in Milan, Germany and London. A life member of the U.S. Council on Foreign Relations, Hulsman is a contributing editor for Aspenia, the flagship foreign policy journal of The Aspen Institute, Italy. Follow him on Twitter @JohnHulsman1

Tags Central Europe Corruption Eastern Europe Joe Biden Latvia Moldova Money laundering Russia Ukraine

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