The book is a fascinating analysis that pulls from Greek mythology, American history, and the structures of international corruption to argue that current corruption in America is undermining democracy and driving the income inequality that currently exists in the United States. Her diagnosis of the current situation is dire. But she ends on a hopeful note that encourages everyone to engage in efforts to restore transparency, accountability, and integrity to public life.
Broad Definition of Corruption
Ms. Chayes defines “corruption” broadly, not just as financial wrongdoing but as any abuse of public office for personal gain or the gain of an associated group. Corrupt practices often favor the wealthy and well-connected, exacerbating disparities in income and opportunity. As she says, “Corruption is better understood as the deliberate mode of functioning—the operating system, you might say—of sophisticated, and astonishingly successful, networks.”
Ms. Chayes discusses the corrosive effect of valuing everything based only on its monetary value. She analogized it to the myth of Midas, who, by converting everything he touched into gold, lost everything important to him. And she points to rich elites who value money above all else as one of the corrosive elements of the American experiment.
She highlights the US Supreme Court’s decision in McDonnell v. United States, 579 U.S. 550 (2016), as protecting both a politician and corporate interests. In McDonnell, the former Republican governor of Virginia, Bob McDonnell, and his wife accepted tens of thousands of dollars in gifts, such as designer clothes, a Rolex, and cash and loans, from the CEO of a company. The CEO was seeking the governor’s support for a dietary supplement. Governor McDonnell did take actions to assist the CEO, such as setting up meetings, talking to other officials, and organizing events related to the issue. Governor McDonnell was convicted of honest services wire fraud in the trial court and sentenced to two years. The Fourth Circuit affirmed.
The US Supreme Court unanimously reversed the conviction and narrowed the broad language of the honest services fraud statute. That statute broadly defines an official act as “any decision or action on any question, matter, cause, suit, proceeding, or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.” Id. at 562 (emphasis added). The Court narrowed the definition of an official act to exclude setting up a meeting, talking to another official, or organizing an event on that matter unless the official makes a decision to take an action on the matter. In other words, the Supreme Court required both a decision and an action rather than the “or” language in the statute, which eliminated liability for Governor McDonnell.
McDonnell won on the argument that the statute was unconstitutionally vague. However, Ms. Chayes argues that the outcome is a result of a technical parsing of the definition of an official act that essentially condones public officials receiving bribes of the sort Governor McDonnell received in the case. Ms. Chayes thinks that the holding sent a damaging message: “In the United States, serious and damaging public corruption is not getting punished. That means, by default, that we deem it to be just fine.” Although as lawyers it is easier to understand the dangers of a vague statute, Ms. Chayes convincingly argues that defying the commonsense definition of bribery leads to average people believing that the legal system in the United State is turning a blind eye to the corruption of America’s elite. It also points to the reality that powerful people often get away with corruption in the United States.
Although her broad definition of corruption is a good framework and the narrowing of the honest services fraud statute supports the perception that powerful people are not held accountable, the way she applies corruption goes too far and leads to the least disciplined part of her book. She posits that “it is impossible to become a billionaire without bending the rules.” But in this part of her book, her examples don’t directly tie making money to any rule-bending. It just points to the fact that rich people keep getting richer and also have positions of power. For example, she links Treasury Secretary Steven Mnuchin to all Goldman Sachs scandals because he used to work there. She includes the 1MDB corruption scandal in which Goldman was involved, even though it post-dates Secretary Mnuchin’s time at the bank by more than 10 years. In addition, she points to Secretary Mnuchin’s acquisition of a failed bank, IndyMac Bank, from the U.S. government, which owned it in receivership. She ascribes corruption to the terms of the takeover. However, the IndyMac sale was an open auction in which the FDIC accepted the highest bidder. Secretary Mnuchin’s group’s offer was $1 billion higher than the next highest bid.
In addition, she calls out President Trump’s personal involvement in picking judges and prosecutors as a symptom of the kleptocratic network. However, most presidents have personal involvement with executive nominees since nominating appointees is an important function of the White House. The main issue, made in another section of the book, is that President Trump used government mechanisms to enrich himself and his family, which would constitute corruption under any definition.
Historical Analogies
She gets back on track when she draws an interesting and persuasive analogy to another period in US history with rampant corruption. Her basic premise is that the United States is going through a second Gilded Age. The first Gilded Age was a period from 1877 to 1900 that produced robber barons like the Rockefellers, the Mellons, the Carnegies, and the Vanderbilts. It was an age of greed and huge income inequality between the rich elite and the working class. During that time, the top 10 percent owned roughly three-quarters of the nation’s wealth. This is similar to the current wealth distribution in the United States: In the second quarter of 2023, 69 percent of the total wealth in the United States was owned by the top 10 percent of earners and the lowest 50 percent of earners only owned 2.5 percent of the total wealth.
Ms. Chayes uses an analogy to the Greek myth of the hydra to illustrate the deep roots and the intertwined networks of elites in business and government. She details how the robber barons and others who amassed great wealth during the Gilded Age often formed alliances with their rivals and coopted positions of power in the government to allow them to get sweetheart government contracts. Their government positions and connections also gave them respectability and often inside information that allowed them to earn even more money.
The courts also became tools of the elites during that period by using laws that were originally aimed at breaking up corporate monopolies to break up organized labor instead. Similarly, the Fourteenth Amendment was not used to protect freedmen, as originally intended, but to protect corporations from state laws guaranteeing minimum wages, establishing worker protections, and imposing taxes on the robber barons’ corporate interests.
These efforts were assisted by a “legion of colluders” such as lawyers, accountants, and bankers, all of whom assisted the kleptocratic hydra in forming long tentacles of the robber barons. In addition, Ms. Chayes came to a “disturbing realization . . . the late nineteenth century syndrome, like the contemporary version, was nonpartisan.” The common denominator was that people of all political stripes united to make more money regardless of the effect it had on other parts of the economy.
Ms. Chayes posits that the collective trauma of World War I, the world Depression, and World War II perversely created a joy in life: “Disaster survivors and their neighbors instantly place whatever food they can collectively hunt and gather in common. There is no class, no race, no political orientation. Such meat sharing lies at the root of humans’ remarkable egalitarian tendencies. Those tendencies are reinforced every time the ritual is enacted—especially at moments of vivid intensity.” It was these shared experiences that opened the way for the New Deal, which banished the hydra of corruption and ushered in an age of equality and opportunity that was spurred along with movements like the Civil Rights Movement.
However, she posits, this positive development started being rolled back in the eighties, a period when the “postwar ethos of expanding equality foundered.” She points to the growing inequality. From the end of World War II until about 1990, CEO compensation at top publicly traded companies “hovered within sight” of median nonmanagement employees’ pay. After 1980, growth for the bottom 50 percent of earners cratered, totaling a mere 21 percent over the next 35 years, while the incomes of the top 1 percent of earners nearly tripled (194 percent). Similarly, by 2018, CEOs were taking home 287 times as much as median nonmanagement workers.
This was caused by both US political parties, Ms. Chayes asserts. President Ronald Reagan focused on the argument that government was the problem with America and by extension that business was good. This trend was pushed along by the DLC/Clinton wing of the Democratic party, which focused on winning over the rich elite by also supporting corporations.
The Modern Era
Per Ms. Chayes, the core of democracy is the justice system and the vote. But kleptocratic networks are undermining that. She explains: “There is nothing intrinsically immoral about a network, of course. . . . But when a network is structured and organized around a purpose, it can become a beast—multitalented, elusive, and relentless. . . . The networks at issue here are pursuing an intent of a different order: to rewrite economic, political, and legal rules around the world—permanently, in the United States, through changes to the Constitution. They mean not just to pleasure themselves in the short term, but to bend the power of government away from the public interest and make it serve themselves and their like, forever.”
On the political side, the current system requires money to run campaigns. Therefore, those with little money or access to moneyed networks have a much harder time getting into office. Once in office, big money continues to influence policy. The relatively low number of staffers on Capitol Hill prevents adequate expertise. Strapped congressional offices must rely on lobbyists to fill in the gaps. And lobbyists are paid for and controlled by business interests. In addition, the filibuster and the congressional system that allows leadership to control which bills get to the floor also favors moneyed interests.
All of these trends culminated in the rank corruption of the Trump administration, which was still in power when the book was published. As Ms. Chayes stated, “Trump’s bald use of his office to patronize and promote his businesses . . . outstrips anything I have witnessed in a developing country. As does his penchant for surrounding himself with men entwined with foreign criminal networks, and his donlike demand for fealty.”
And because of the international influence of the United States, these actions affected countries abroad. For example, Ms. Chayes stated that a “development official told me he had heard more than one African strongman celebrate Ivanka’s [Trump’s daughter’s] job [in the White House] as a green light to arrange succession for their own children.”
This sort of corruption also infects the judiciary, she argues. She points to the Federalist Society’s influence in judicial nominees as being part of the hydra trying to make the judiciary serve the kleptocratic network. And although her book predates the revelations about Justices Thomas’s and Alito’s acceptance of huge monetary benefits from billionaires, there is no doubt that these examples would have been included in her book had they already been uncovered.
Ridding the United States of Kleptocracy
Ms. Chayes underscores the serious risks posed by the modern era. She says, “Last time humanity was locked onto this course [referring to the Gilded Age], it led to the collapse of the global economy and two world wars—and genocide, starvation, plague, and the detonation of nuclear bombs that wiped some 200,000 human beings off the earth and gave us the power to end our species. What manner of calamity lies ahead.”
It was a prescient comment. Her book came out before January 6 occurred, and threats to US democracy have continued to escalate.
The book lays out a plan to counter the kleptocratic networks using an economic populist lens. She stated that around the world “kleptocratic networks disorganize their opposition by playing up identity divides.” And she directly states that identifying with racial and gender groups encourages us to excuse bad behavior by members of our own groups when we should demand equality and non-kleptocratic behaviors equally regardless of our group membership.
Here are some of her suggestions to counter the kleptocratic trends in the United States:
First, involve everyone: “There is something for each of us to do” and there should be mass mobilization and civic action throughout the country. But don’t just protest, she said; do things that have the most impact.
Second, stop being in awe of members of the kleptocratic networks by “ceasing to assume that if someone is spectacularly rich, he must be smarter and more hardworking than the rest of us. Instead, we should view such people with suspicion.”
Third, hold members of the network accountable by refusing to allow them to use the revolving door and prosecuting them where appropriate. “To end the impunity that now protects members of our kleptocratic networks, statutes will have to be drafted and passed and signed into law to bring the legal definition of corruption more in line with the common understanding of that crime.” She underscored that the government should not settle for fines and deferred prosecutions and that funding should increase for prosecutors and investigators.
Fourth, focus on local problems. Try to find corruption wherever you are and try to attack the kleptocratic network locally. Vote for people who run on anticorruption platforms and vote with your money by boycotting corrupt companies and local players and investing locally.
Fifth, increase taxes on high earners.
And, sixth, incentivize economists and business students to enter the public sector.
Conclusion
On Corruption in America: And What Is at Stake is a good read and has important insights about the state of the United States. The United States has historically been perceived as a relatively noncorrupt country. But Ms. Chayes persuasively argues that the increasing income inequality and the fight to disenfranchise the common person are a result of kleptocratic networks’ interest in using governmental and economic levers to increase their assets and their power. Until these networks are put in check, the corruption in the United States will continue to worsen. Per Ms. Chayes, it is up to all of us to reverse this alarming trend.
