Corruption as an Enabler in the Hybrid Influence Toolbox
Hybrid threats and hybrid warfare are firmly embedded in the contemporary threat environment. They involve the complex blend of both state and non-state actors in an ongoing continuum of competition that blurs the boundaries between peace and war. They also embrace several approaches to conflict: conventional warfare, irregular warfare, and terrorism. As a consequence, they erode the distinctions between crime and war. Hybrid threats also leverage network forms of organization to extend influence and shape the operational environment.
Hybrid involves both the actors and the means they employ. That is, a range of actors (including criminal gangs, organized crime, and more traditional state actors) using a range of means—some traditional and some novel—ranging in sophistication from simple, low-tech violence through complex high-tech means using cyber and modern lethal systems (including anti-satellite weapons, and drones), as well as information warfare and traditional military operations. Hybrid operations often synchronize a variety of means to disrupt, degrade, or destabilize adversaries. This often involves leveraging cognitive warfare to gain advantage. As a result, influence operations are integrated with all other means.
Corruption can be used in hybrid warfare to enable other actions in the hybrid armamentarium, such as funding other activities or allowing access for exploitation; amplifying political sentiments (such as discontent) in order to extend outrage (and sow division); disrupting (undermining bureaucratic institutions, governance, and the rule of law); and finally to distract (the populace and political actors) to take the focus off other conventional or hybrid activities in order to prevent an adversary from diverting resources from countering those threats. This article will discuss the corruption-hybrid threat nexus and present a case study of corruption in Venezuela to illustrate its global complexities. Policy recommendations will be provided to address the role of corruption in hybrid threats and warfare.
Hybrid Influence
Hybrid influence involves the full scope of propaganda and influence activities (disinformation, the use of proxies, etc.) that shape the operational environment. It can be used before the outbreak of war, within armed conflicts (both of international and non-international scope), and during “cold wars” or periods of intense competition below the threshold of armed conflict. The hybrid influence toolset includes:
economic influence, e.g., by ownership in key sectors of the economy, the banking system, sectors of the critical infrastructure and the media, leverage on the politics and state institutions, nurturing patronage networks, corruption, propaganda, disinformation, and, possibly, the threat of using military force (but not the actual use of force).
Hybrid influence campaigns can range from short-term activities with a specific target (tactical) to longer-term actions (e.g., propaganda, covert action) within a specific theater of operations (operational) to a concerted, long-term action against a range of targets (strategic). These can occur simultaneously and can be coordinated efforts directed or guided by state actors (or other hybrid actors). Hybrid influence can leverage diaspora communities, networks of reserve and retired military personnel, paramilitary organizations (such as extremist militias and criminal armed groups [CAGs]), social media platforms, and conspiracy theories (such as QAnon).
Non-state actors, ranging from individuals to criminal organizations and armed groups, are key players in the hybrid threat landscape. These non-state actors can wield both hard and soft power in several ways. Hard forms of power include cyber, privatized, people’s, and terrorist; while soft forms include real economic, financial, diplomatic, civil, scientific and technological, and media. These actors exploit ambiguity to manipulate the political situation at strategic, operational, and tactical levels of influence and maneuver. Jurisdictional boundaries and bureaucratic seams are exploited to shield the actors waging hybrid influence campaigns. Non-state actors can be allies, non-aligned, or rivals to state actors and can serve as auxiliaries, surrogates, affiliates, or proxies for state actors for transient (temporary), short-, or long-term durations.
Maskirova and Kompromat (Disguise and Compromise)
Russia uses a full range of hybrid influence activities to shape its operational environment. These measures include exploiting social media to gain influence, spread disinformation, and sow dissension. According to the Mueller investigation, Russian interference in the 2016 US Presidential Elections included employing the Internet Research Agency to disseminate propaganda, hacking by Russia’s military intelligence service, the GRU, and infiltrating the Trump campaign. Russian electoral interference included undermining trust in established political institutions and processes, destabilizing democracy by amplifying political discord, hacking the emails of the Democratic National Committee and Clinton campaign to obtain specific information to be used to achieve Russian strategic objectives, and infiltrating the Trump campaign and others to establish “back channels” to US politicians in order to obtain information and subtly exert policy influence on American policy.
Fake news, including deepfakes enabled by algorithms, along with traditional means of influence, such as the use of corruption, compromising political actors through blackmail and kompromat, and inserting corrupt actors and agents into agenda-setting institutions, were used in this Russian attempt to compromise American internal politics to weaken the US on the global stage. The insertion of Maria Butina, an unregistered foreign agent, into US politics (including the Republican Party, the Trump Campaign, and the National Rifle Association) led to her prosecution and conviction for felony charges of conspiracy and acting as a foreign agent. Disruption and deception (maskirovka or disguise) integrated into cyber operations (both attacks and information operations) were tightly integrated into the Crimea and east Ukraine operations and are core to current Russian operations in the Ukraine war. Irregularities in defense procurement, including restricting competition, manipulating the bidding process, preferring certain bidders, are exemplary of the corrupt practices in Ukraine that degrade military and capability and combat readiness. The influence of Russian or pro-Russian oligarchs in Ukraine epitomizes the use of corruption as a political tool.
Corruption
Corruption can serve as an adjunct to these hybrid influence activities. Corruption can occur in all spheres of activity, at all levels of governance, and within public and private entities. Corruption can alter the nature and projection of real economic power and financial power. Inserting corrupt agents of influence within the organizations that hold real economic and financial power is one means of exerting influence. Stock manipulation and similar trading irregularities, such as manipulating sovereign wealth funds are another. Financial power (or financial instruments and infrastructure) can be disrupted by using a combination of means that leverage corrupt access. These combined means are a hallmark of all hybrid operations but are particularly effective in the financial realms since they can leverage interactions between financial, media, and cyber domains in real-time to destabilize financial markets and, ultimately, economies. Hackers and social media campaigns can amplify these effects.
Corruption comes in many guises; it can be configured as “influence market corruption,” where informal business and political actors and networks collude or use bribery to gain influence, political access, and specific economic benefits. Corruption can also be expressed as “elite cartel corruption,” where political and economic elites are interconnected and exclude competitors through manipulating trade, lobbying, and access. Another expression is “oligarch and clan corruption,” where a diffuse set of oligarchs and/or clans plunder both private and public institutions for their own gain while using violence to further their goals. Finally, it can be expressed as “official moguls corruption,” where power and the economy are monopolized by a single entity (a dictator, family, or junta). In the last case, patronage, power, and corruption (as well as violence and intimidation) are mobilized in support of the actor in charge. This is a defining characteristic of a kleptocracy. When official roles are less important than informal positions—kleptocracy prevails. At the extreme end of corruption, kleptocracy enables authoritarian and criminal regimes to extend their influence when they forge de facto alliances with banks and other global financial institutions. Kleptocrats and oligarchs are able to link with transnational criminal organizations (TCOs), corrupt officials, and institutions to extract wealth and launder money. Corrupt financial institutions process the laundered funds, which then allows the kleptocrats to freely use the illicit funds to increase their financial and real estate holdings and power while extending (purchasing) influence globally.
Strategic Corruption: Weaponizing Kleptocracy
Putin has effectively weaponized kleptocracy and corruption on a global scale. When assessing the threat of weaponized corruption, it is valuable to note that “[t]he term ‘weaponization’ implies that corruption is being used purposefully as a tool of statecraft to interfere with, co-opt, weaken, and destabilize democratic institutions and processes.” Russia, under Putin, has created or co-opted numerous entities (both state and non-state), such as hacker groups, cyber influencers or troll farms sowing discord, and private military companies, to project its influence worldwide. These cyber influence operations have extended to US elections. The activities conducted by these entities include funding political action through loans and direct contributions and have the support of a network of pro-Russian oligarchs that, in turn, support right-wing political parties and extremist groups. This, in addition to the aforementioned interference in US politics, has included support of the German anti-immigrant, right-wing Alternative für Deutsch (by selling gold at discounted prices), and providing favorable loans and political exposure to France’s National Front, now known as the National Rally (Rassemblement National) under Marine Le Pen. Essentially, weaponized kleptocracy employs strategic corruption as a means of extending influence.
Strategic corruption and its partner strategic crime leverage illicit economic gain and criminal activity to open channels for influence that compromise the stability and defense capabilities of rival nations. The mechanisms of strategic corruption include reliance on the revolving door between government officials and corporate roles (where individuals move between government and corporate jobs, enhancing their influence and ability to profit). Former government officials can then lobby their former agencies on behalf of private interests (including those with direct foreign connections), as seen in the case of the former German Chancellor Gerhard Schröder, who worked for Gazprom on its Nord Stream board; he now faces criminal charges. The role of manipulating gas supplies and prices naturally weakened Germany’s energy independence in favor of Russian aims. Strategic corruption also relies upon illicit political finance and money laundering (as discussed above). Finally, it can enable judicial corruption, as seen in Ukraine. Russian influence weakened Ukraine’s anti-corruption mechanisms through the apparent influence of multiple judges with connections to Russia. As Philip Zelikow et al. observes:
In bureaucratic and grand corruption, the payer and the payee are mainly just trying to get rich. In strategic corruption, by contrast, the greed is still there, for at least some of the players, but the corrupt inducements are wielded against a target country by foreigners as a part of their own country’s national strategy. Sometimes, but not always, these schemes entail violations of the law, including by citizens of the target country. In other cases, the conduct may be technically legal but still involves “the perversion or destruction of integrity in the discharge of public duties,” as the venerable Oxford English Dictionary’s definition of “corruption” puts it.
Zelikow et al. describe the imbroglio leading to then-President Trump’s 2019 impeachment as the most prominent case of strategic corruption in recent years. In short, Trump allegedly:
sought to condition his and his administration’s future relations with Ukraine on Kyiv’s willingness to help him dig up dirt on his political opponent Joe Biden, blame former Ukrainian government officials (and not the Kremlin) for hacking the Democratic National Committee during the 2016 U.S. presidential campaign, and cast doubt on evidence that U.S. prosecutors had used to put one of Trump’s 2016 campaign managers, Paul Manafort, in prison.
The alleged sequence had foreign roots and involved a complex set of interactions with pro-Putin Oligarchs. These included smear attacks on Marie Yovanovitch, the now-former US Ambassador to Ukraine, and other acts in furtherance of Kremlin priorities.
Zelikow et al. also document Chinese influence operations in support of its energy conglomerate and the Belt and Road Initiative, including bribery and money laundering in Africa and efforts to wield strategic corruption in Australia, where the Chinese Communist Party has funded political organizations and election campaigns, conducted influence operations in the media, and contributed funds to pliant politicians.
Turkey has also corruptly influenced US politics, with several Trump associates, such as Rudy Giuliani and former attorney general Michael Mukasey, still awaiting judicial accountability for alleged acts ranging from interference in criminal investigations against a Turkish official and a Turkish bank (Halkbank) for evading US sanctions on shipping gold to Iran in return for favorable treatment in private business affairs including Trump’s real estate interests in Turkey. These private interests were allegedly pursued at the expense of state policy (i.e., helping Iran evade sanctions). As Zelikow et al. conclude, “That goes well beyond pay-to-play. It is pay-for-policy; it is strategic corruption.”
Russian corruption exploits global financial flows and leverages illicit finance to weaken the rule of law abroad, sustain its own kleptocracy, and buy influence on a global scale. The tools of these influence operations include “Russian Dark Money” and illicit wealth funds, lawyers, bankers, lobbyists, and accountants, as well as real estate agents in global cities such as New York, Miami, and London (colloquially known as “Londongrad”), as well as off-shore tax havens.
In these schemes, state actors (Russia, China, and Turkey, for example) have individually leveraged state action and illicit financial flows to penetrate and subvert rival governments and institutions, ranging from banks, real estate companies, and lobbying and public relations firms to social media enterprises, to serve their interests and the interests of their allied oligarchs and proxies. Strategic crime augments these de-stabilization efforts by bolstering criminal enterprises, sowing insecurity and disorder, and ultimately eroding confidence and perceptions of legitimacy among rivals. Of course, the criminal enterprises benefit from this empowerment and leverage the corrosive effects of corruption for sustaining and expanding their own power.
Countering Corruption and Hybrid Influence
Countering corruption and kleptocracy requires transparency. That means the secrecy and occult nature of corruption need to be exposed. Excessive privacy in banking laws, lack of press freedom, and weak access to public information empower oligarchs, kleptocrats, gangsters, and corrupt officials. Active efforts by investigative journalists and civil society can counter the effects of strategic corruption and crime. Investigative reporting efforts like the Panama Papers, Pandora Papers, leaked documents detailing offshore corruption, and the Brazilian “Lava Jato” public corruption investigation help expose the reach and damage caused by hybrid influence activities conducted by transnational corruption networks.
Transparency International recommends the following steps to counter kleptocracy and corruption:
- Identifying and freezing the assets of corrupt officials
- End anonymous companies
- Increase transparency of trusts
- Open the black box of hedge funds, private equity and other investment funds
- Increase transparency in luxury goods
- Ban golden passports and regulate golden visas [that give oligarchs unfettered global access]
- Hold professional enablers to account [banks, corporate service providers, lawyers, accountants, real estate agents]
- Strengthen mechanisms for seizing, confiscating, and – eventually returning – assets
- Support civil society organizations, independent journalists, activists, and whistleblowers.
The Global Observatory of Transnational Criminal Networks views these transnational corruption networks as macro-networks of corruption. Confronting macro-corruption and macro-networks of corruption requires understanding and confronting these decentralized and transnational networks. It also requires confronting corruption-related money laundering through real-time data analysis and social network analysis of illicit financial flows. To achieve these objectives, it is necessary to enhance the state of practice for financial intelligence by developing protocols, methodologies, and analytical tools that help enforcement agencies understand and confront massive, transnational, and decentralized structures of corruption. In addition, it is necessary to develop controls on electoral funding and criminal and administrative controls on public contracts. This must include preventive measures against macro-networks of corruption and training the judiciary (and criminal justice staff) to possess and implement the prosecution and trial of illicit networks and corruption networks.
These strategies to counter strategic corruption and kleptocracy must be informed by political analysis responsive to politics, coordinated across borders, and integrated across sectors (health, infrastructure, energy, climate, and security (including military). All of these approaches require enhancing multilateral cooperation and coordination, building robust law enforcement and judicial capacity, developing sound and actionable intelligence, transparency, and the involvement of civil society, the military and defense sector, security services, the press and news media, and the public at large. Finally, they demand multilateral, transnational, and international action.
Case Study: Criminal Threats and Corruption in Venezuela
Venezuela is a kleptocracy or criminalized state. Forged from the legacy of Hugo Chavez’s Bolivarian Revolution, its current leader, Nicolás Maduro, continues using transnational organized crime as an instrument of state power. Indeed, the use of corruption as a source of power has led the regime’s global criminal network to be characterized as the “Bolivarian Joint Criminal Enterprise.” The activities waged by this consortium of actors include money laundering, narcotics trafficking, and resource extraction (including illegal mining and petroleum theft). These global activities are tied together and operationalized by corruption.
Venezuela ranks 177 out of 180 counties (and had a score of 14/100, with 0 being very corrupt and 100 being very clean) in Transparency International’s 2021 Corruption Perceptions Index, with 50 % of its public service users paying a bribe in the last 12 months and 87% of its population perceiving an increase in corruption during the same time frame according to the Global Corruption Barometer. Venezuela’s petroleum reserves potentially offer great economic opportunity, but its state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA) is riddled with corruption. The corrupt acts include graft, bribery, diversion of public funds, money laundering, and bid rigging by public officials. This corruption is a political tool for the regime and its Bolivarian Joint Criminal Enterprise. The PDVSA is tightly integrated with the regime with key leadership positions held by its members; for example, in 2017, Manuel Quevedo, a Major General in Venezuela’s National Guard, was installed as head of the PDVSA and as the nation’s oil minister despite having no experience in the energy sector.
Inter-penetration of government institutions and corporate entities with organized crime actors solidifies corrupt influence. This corruption is enabled by both transnational criminal organizations, gangs, Colombia guerrillas (including the FARC and ELN, Revolutionary Armed Forces of Colombia, and National Liberation Army, respectively), far-left militias known as colectivos, Hezbollah, and state actors including Russia, Cuba, Iran, and China all interact with the Venezuelan state and its Bolivarian Joint Criminal Enterprise (as do Nicaragua, Bolivia, Ecuador, Suriname, and El Salvador. Gangs—characterized as Third Generation Gangs—are the engine extending this corrupt influence. Money laundering is its lubricant with illicit flows of at least $10 Billion and up to $43 Billion diverted or laundered over the past decade. The money laundering includes trade-based transactions, falsified oil sales, and real estate purchases. Russia supports the regime militarily and economically while exploiting the Bolivarian Joint Criminal Enterprise to facilitate global illicit flows and augment its own network of oligarchs. Hezbollah uses the corrupt proceeds of this network to augment its own illegal financing activities and fund its operations.
This networked arrangement utilizes hybrid influence to sustain the Venezuelan state, its nation-state sponsors and allies, as well as its non-state criminal partners. Each of the participants gains its own profit and power while leveraging the influence of its partners. Countering this endeavor requires global cooperation, including criminal enforcement and prosecution, financial intelligence, and diplomatic action. Economic sanctions and the development of new multilateral enforcement structures—including transnational and international anti-corruption legal regimes and courts and joint investigations—are needed to counter this type of global hybrid network.
