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For two years, in the early 1990s, Richard Palmer served as the CIA station chief in the United States’ Moscow embassy. The events unfolding around him—the dissolution of the Soviet Union and the rise of Russia—were so chaotic, so traumatic and exhilarating, that they mostly eluded clearheaded analysis. But from all the intelligence that washed over his desk, Palmer acquired a crystalline understanding of the deeper narrative of those times. To hear more feature stories, see our full list or get the Audm iPhone app. Much of the rest of the world wanted to shout for joy about the trajectory of history, and how it pointed in the direction of free markets and liberal democracy. Palmer’s account of events in Russia, however, was pure bummer. In the fall of 1999, he testified before a congressional committee to disabuse members of Congress of their optimism and to warn them of what was to come.

American officialdom, Palmer believed, had badly misjudged Russia. Washington had placed its faith in the new regime’s elites; it took them at their word when they professed their commitment to democratic capitalism. But Palmer had seen up close how the world’s growing interconnectedness—and global finance in particular—could be deployed for ill. During the Cold War, the KGB had developed an expert understanding of the banking byways of the West, and spymasters had become adept at dispensing cash to agents abroad. That proficiency facilitated the amassing of new fortunes. In the dying days of the U.S.S.R., Palmer had watched as his old adversaries in Soviet intelligence shoveled billions from the state treasury into private accounts across Europe and the U.S. It was one of history’s greatest heists. Washington told itself a comforting story that minimized the importance of this outbreak of kleptomania: These were criminal outliers and rogue profiteers rushing to exploit the weakness of the new state. This narrative infuriated Palmer. He wanted to shake Congress into recognizing that the thieves were the very elites who presided over every corner of the system. “For the U.S. to be like Russia is today,” he explained to the House committee, “it would be necessary to have massive corruption by the majority of the members at Congress as well as by the Departments of Justice and Treasury, and agents of the FBI, CIA, DIA, IRS, Marshal Service, Border Patrol; state and local police officers; the Federal Reserve Bank; Supreme Court justices …” In his testimony, Palmer even mentioned Russia’s newly installed and little-known prime minister (whom he mistakenly referred to as Boris Putin), accusing him of “helping to loot Russia.”

The United States, Palmer made clear, had allowed itself to become an accomplice in this plunder. His assessment was unsparing. The West could have turned away this stolen cash; it could have stanched the outflow to shell companies and tax havens. Instead, Western banks waved Russian loot into their vaults. Palmer’s anger was intended to provoke a bout of introspection—and to fuel anxiety about the risk that rising kleptocracy posed to the West itself. After all, the Russians would have a strong interest in protecting their relocated assets. They would want to shield this wealth from moralizing American politicians who might clamor to seize it. Eighteen years before Special Counsel Robert Mueller began his investigation into foreign interference in a U.S. election, Palmer warned Congress about Russian “political donations to U.S. politicians and political parties to obtain influence.” What was at stake could well be systemic contagion: Russian values might infect and then weaken the moral defense systems of American politics and business. This unillusioned spook was a prophet, and he spoke out at a hinge moment in the history of global corruption. America could not afford to delude itself into assuming that it would serve as the virtuous model, much less emerge as an untainted bystander. Yet when Yegor Gaidar, a reformist Russian prime minister in the earliest postcommunist days, asked the United States for help hunting down the billions that the KGB had carted away, the White House refused. “Capital flight is capital flight” was how one former CIA official summed up the American rationale for idly standing by. But this was capital flight on an unprecedented scale, and mere prologue to an era of rampant theft. When the Berkeley economist Gabriel Zucman studied the problem in 2015, he found that 52 percent of Russia’s wealth resided outside the country.

The collapse of communism in the other post-Soviet states, along with China’s turn toward capitalism, only added to the kleptocratic fortunes that were hustled abroad for secret safekeeping. Officials around the world have always looted their countries’ coffers and accumulated bribes. But the globalization of banking made the export of their ill-gotten money far more convenient than it had been—which, of course, inspired more theft. By one estimate, more than $1 trillion now exits the world’s developing countries each year in the forms of laundered money and evaded taxes. As in the Russian case, much of this plundered wealth finds its way to the United States. New York, Los Angeles, and Miami have joined London as the world’s most desired destinations for laundered money. This boom has enriched the American elites who have enabled it—and it has degraded the nation’s political and social mores in the process. While everyone else was heralding an emergent globalist world that would take on the best values of America, Palmer had glimpsed the dire risk of the opposite: that the values of the kleptocrats would become America’s own. This grim vision is now nearing fruition. The contagion has spread remarkably quickly, which is not to say steadily, in a country haunted since its founding by the perils of corruption. The United States has had seizures of conscience en route to the top of the new global order surveyed by the British journalist Oliver Bullough in his excellent book Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back. In the months following Palmer’s testimony, the zeitgeist swerved in the direction he urged, at least momentarily. Newspaper articles in the fall of 1999 showed how billions in Russian money, some of it seemingly tied to an alleged crime boss, had landed in the Bank of New York. These sums startled Bill Clinton’s administration, which readied tough new anti-money-laundering bills, designed to stiffen banking regulations. But the administration was in its last year, and passing any new law would have required a legislative slog and bull-rushing obstreperous lobbyists, so plans stalled.

The Clinton-era proposals would have remained an unvisited curio in the National Archives had Osama bin Laden not attacked. But in the days after the Twin Towers collapsed, George W. Bush’s administration furiously scoured Washington for ideas to jam into the 342-page piece of legislation that would become the patriot Act. A sense of national panic created a brief moment for bureaucrats to realize previously shelved plans. Title III of the patriot Act, the International Money Laundering Abatement and Anti-terrorist Financing Act, was signed into law little more than a month after September 11. This section of the bill was a monumental legislative achievement. Undeterred by the smoke clouds of crisis, representatives of the big banks had stalked the Senate, trying to quash the measure. Citibank officials reportedly got into shouting matches with congressional staffers in the hall. This anger reflected the force of the patriot Act. If a bank came across suspicious money transferred from abroad, it was now required to report the transfer to the government. A bank could face criminal charges for failing to establish sufficient safeguards against the flow of corrupt cash. Little wonder that banks fought fiercely against the imposition of so many new rules, which required them to bulk up their compliance divisions—and, more to the point, subjected them to expensive penalties for laxity.

Much of what Palmer had urged was suddenly the law of the land. But nestled in the patriot Act lay the handiwork of another industry’s lobbyists. Every House district in the country has real estate, and lobbyists for that business had pleaded for relief from the patriot Act’s monitoring of dubious foreign transactions. They all but conjured up images of suburban moms staking for sale signs on lawns, ill-equipped to vet every buyer. And they persuaded Congress to grant the industry a temporary exemption from having to enforce the new law. The exemption was a gaping loophole—and an extraordinary growth opportunity for high-end real estate. For all the new fastidiousness of the financial system, foreigners could still buy penthouse apartments or mansions anonymously and with ease, by hiding behind shell companies set up in states such as Delaware and Nevada. Those states, along with a few others, had turned the registration of shell companies into a hugely lucrative racket—and it was stunningly simple to arrange such a Potemkin front on behalf of a dictator, a drug dealer, or an oligarch. According to Global Witness, a London-based anti-corruption NGO founded in 1993, procuring a library card requires more identification in many states than does creating an anonymous shell company. The United States, Palmer made clear, had allowed itself to become an accomplice to this plunder. Much of the money that might have snuck into banks before the patriot Act became law was now used to purchase property. The New York Times described the phenomenon in a series of exposés, published in 2015, called “Towers of Secrecy.” Reporters discovered that condos in the ultra-luxe Time Warner Center at Columbus Circle in Manhattan were owned by a constellation of kleptocrats. One condo belonged to the family of a former Russian senator whose suspected ties to organized crime precluded him from legally entering Canada for a few years. A condo down the hall belonged to a Greek businessman who had recently been arrested in an anti-government-corruption sweep. The family of a former Colombian governor, imprisoned for self-enrichment while in office, owned a unit he could no longer visit.

These denizens, all of whom denied wrongdoing, made their high-priced purchases in what has become a common way. Nationwide, nearly half of homes worth at least $5 million, the Times found, were bought using shell companies. The proportion was even greater in Los Angeles and Manhattan (where more than 80 percent of Time Warner Center sales fit that description). As the Treasury Department put it in 2017, nearly one in three high-end real-estate purchases that it monitors involves an individual whom the government has been tracking as “suspicious.” Yet somehow the presence of so many shady buyers has never especially troubled the real-estate industry or, for that matter, politicians. In 2013, New York City’s then-mayor, Michael Bloomberg, asked, “Wouldn’t it be great if we could get all the Russian billionaires to move here?” The warm welcome has created a strange dissonance in American policy. Take the case of the aluminum magnate Oleg Deripaska, a character who has made recurring cameos in the investigation of Russian interference in the 2016 presidential election. The State Department, concerned about Deripaska’s connections to Russian organized crime (which he has denied), has restricted his travel to the United States for years. Such fears have not stood in the way of his acquiring a $42.5 million mansion on Manhattan’s Upper East Side and another estate near Washington’s Embassy Row.

Over time, the gap between the noble intentions of the patriot Act and the dirty reality of the property market became too wide to ignore. In 2016, Barack Obama’s administration tested a program to bring the real-estate industry in line with the banks, compelling brokers to report foreign buyers, too. The ongoing program, piloted in Miami and Manhattan, could have become the scaffolding for a truly robust enforcement regime. But then the American presidency turned over, and a landlord came to power. Obama’s successor liked selling condos to anonymous foreign buyers—and may have grown dependent on their cash. In 2017, Reuters examined the sale of Trump Organization properties in Florida. It found that 77 of 2,044 units in the developments were owned by Russians. But that was likely an incomplete portrait. More than one-third of the units had been sold to corporate vehicles, which can readily hide the identity of the true owner. As Oliver Bullough remarks, “They might have belonged to Vladimir Putin, for all anyone else could know.” Around the time that Trump took up occupancy in the White House, the patriot Act’s “temporary” exemption for real estate entered its 15th year. Without anyone ever declaring it so, the ephemeral has been enshrined. The war on kleptocracy had meanwhile been lurching forward on another front. If foreign plutocrats remained mostly unscathed as they made themselves at home in the U.S., American plutocrats eager to hide their fortunes abroad faced fresh trouble. In 2007, the United States experienced one of its bouts of moral clarity, jolted by the confessions of a banker named Bradley Birkenfeld, who came clean to the Department of Justice. (He would later tell his story in a book called Lucifer’s Banker.) What he freely divulged to prosecutors were his client-recruiting efforts on behalf of UBS, the Swiss banking behemoth.

Birkenfeld described how he had ensconced himself in the gilded heart of the American plutocracy, attending yacht regattas and patronizing art galleries. He would mingle with the wealthy and strike up conversation. “What I can do for you is zero,” he would say, and then pause before the punch line: “Actually, it’s three zeroes. Zero income tax, zero capital-gains tax, and zero inheritance tax.” Birkenfeld’s unsubtle approach succeeded wildly, as did his bank. As part of an agreement with the Justice Department, UBS admitted to hiding assets totaling some $20 billion in American money. The scale of the hidden cash spun Congress into a fury. In 2010, it passed the Foreign Account Tax Compliance Act (fatca), legislation with moral clout that belies its stodgy name. Never again would a foreign bank be able to hold American cash without notifying the IRS—or without risking a walloping fine. Here was anti-corruption leadership at work—and U.S. waffling on display. According to one powerful strain of American exceptionalism, the nation boasts superior financial hygiene and a bedrock culture of good government. Indeed, the U.S. government has devoted more attention to money laundering than perhaps any other nation on the planet. But the bar isn’t very high, and the vigilance has its limits. In 2011, the Obama administration sought to collect more information about foreigners’ bank accounts and to share it with the relevant home countries. But banks—along with their lobbyists and intellectual mouthpieces—worked furiously to prevent the expansion. A fellow at the Heritage Foundation denounced the proposed standards as “fiscal imperialism.” The president of the Florida Bankers Association said, “At a time when we are trying to create jobs and reduce the burden on businesses, this is the wrong issue.” Bankers’ associations in Texas, California, and New York followed suit. The effort went nowhere in Congress. Members of America’s professional elite competed to sell their services to kleptocrats, breezing past ethical prohibitions. The pattern repeated itself when the Organization for Economic Cooperation and Development, following the original fatca example, took the congressional template and extended it: Each year, banks would report foreign accounts to the tax authorities in the account holders’ home country. If every nation had signed on to the OECD standards, the effect would have been a hammerblow to tax havens, shattering the vital infrastructure that allows kleptocratic money to flow unnoticed. In the end, the United States was alone in refusing to join the OECD agreement, finalized in 2014. This obstinacy stood to subvert everything the country had done to lead the fight against dirty money: While the U.S. can ask almost any other nation’s banks for financial information about American citizens, it has no obligation to provide other countries with the same. “The United States had bullied the rest of the world into scrapping financial secrecy,” Bullough writes, “but hadn’t applied the same standards to itself.” A Zurich-based lawyer vividly spelled out the consequences to Bloomberg: “How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour … That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

Not long before the U.S. declined to sign on to the OECD standards, a branch office of the baronial Rothschild bank opened on the 12th floor of a building in Reno, Nevada, far away in miles and spirit from the home office in Paris. The bank’s name wasn’t announced on the exterior of the building or even listed in the lobby directory. Soon after the Reno outpost opened, one of the bank’s managing directors introduced the new branch’s services to potential clients in San Francisco. What made the presentation so memorable were the ideas included in a draft procured by Bloomberg. The script laid bare the reasons for wealthy foreigners to funnel money through Nevada: The state is the ideal place to hide money from governments and avoid paying U.S. taxes. The draft acknowledged a truth that bankers don’t usually admit in public, which is that the United States has “little appetite” for helping foreign governments retrieve money laundered within its borders. In fact, it has grown into “the biggest tax haven in the world.” (The firm said these statements were removed before the presentation was delivered, because they did not reflect the firm’s real views.) What changed wasn’t just regulatory structure. The behavior of the American elite changed too. Members of the professional classes competed to sell their services to kleptocrats. In the course of that competition, they breezed past old ethical prohibitions, and the pressure rose to test the limits of the law. A collection of videos on the internet, filmed in 2014, illustrates this moral collapse. The clips never show the face of a man introduced as Ralph Kayser, a German who reveals only the most elemental details about himself, recited in lightly accented English. He has lined up a succession of meetings with 13 law firms in Manhattan, in which he engages in pleasantries and then announces his purpose. He works as an adviser to a government official in “one of these mineral-rich countries in West Africa,” he explains. Over a long career, the official has grown quite wealthy. “Companies are eager to get hold of rare-earth or other minerals. And so they pay some special money for it. I wouldn’t name it ‘bribe.’ I would say ‘facilitation money.’ ”

Kayser’s client, he continues, is getting older and—because the client’s wife has always wanted a New York brownstone, and the client is in the market for a Gulfstream and a yacht—he has a sudden need to transport money into the United States. The client prefers that his purchases remain a tightly held secret, so as not to provoke attention back in his home country. “It would look, at least, very, very embarrassing.” Kayser makes hardly any effort to disguise his desire to move suspect funds. That is entirely by design. Kayser is actually a character devised by Global Witness, the London-based NGO. The actor is outfitted with a well-concealed camera to capture the American lawyers displaying their ethical proclivities. Although none of the lawyers Kayser visits takes him on as a client, and several say they need more information about the source of the official’s wealth, only one flatly refuses to discuss ways to move the money. Kayser has not, it should be said, selected the law offices of Saul Goodman. His targets include attorneys at white-shoe firms. Of course they understand the risks of moving suspect cash into New York. One lawyer tells Kayser, “I’ve gotta be very careful myself. I don’t wanna do something [that] looks like I’m laundering money. And that would cost me my license, and—and I just don’t do that.” Just what sort of scrutiny he generally applies, though, isn’t clear. “When I get money from my other clients,” he admits, “it always comes in with some strange name on it. I don’t even ask.” Another lawyer blithely announces, “They don’t send lawyers to jail, because we run the country … We’re still members of a privileged class in this country.” The perils of corruption were an obsession of the Founders. Madison mentioned corruption 54 times in a 1787 notebook. Global Witness conducted its experiment to point out Big Law’s complicity in the spread of kleptocracy. But the footage also provides primary anthropology of an American elite. A profession like law has highly developed ethical codes, yet those codes appear to have receded in recent years. Even the most prestigious firms find themselves fretful about the survival of their high-priced business model, which was profoundly rattled by the 2008 financial crisis and the corporate cost-cutting that followed. Greedy impulses have surely always existed within the white-shoe world, but the sense of Darwinian struggle and the norms of a global elite have eroded boundaries. The same partners who shed underachieving colleagues more ruthlessly than they used to also seem primed to adopt a more permissive attitude toward clients whom they might once have rejected. This decay has been on full display in Robert Mueller’s investigation. We have seen how the firm Skadden, Arps, Slate, Meagher & Flom, a sturdy pillar of the legal profession, placed itself in the service of kleptocracy. One partner at the firm from 2010 to 2018, Gregory Craig, had served as Barack Obama’s White House counsel, the man responsible for safeguarding the integrity of the presidency. At Skadden, he oversaw the creation of a report that was used to justify Ukrainian President Viktor Yanukovych’s arrest of his primary political opponent on what were widely viewed as highly dubious grounds. (The firm, according to testimony in Mueller’s investigation, said privately that evidence to support the arrest was “virtually nonexistent.”) Another lawyer who worked for Skadden has pleaded guilty to lying to prosecutors during the Mueller team’s probe of the firm’s Ukrainian work.

The Ukrainians hired Skadden through a middleman, the now-jailed political consultant Paul Manafort. Once upon a time, it might have been possible to think of Manafort as a grubby outlier in Washington—the lobbyist with the lowest standards, willing to take on the most egregious clients. But Mueller has exposed just how tightly tethered Manafort’s work on behalf of Ukrainian kleptocrats was to Washington’s permanent elite. Manafort subcontracted some of his lobbying to the firm of Tony Podesta, arguably the most powerful Democratic influence-peddler of his generation. And Manafort employed Mercury Public Affairs, where he dealt with Vin Weber, a former Republican congressman and a former chairman of the National Endowment for Democracy. America’s fear of kleptocracy goes back to its founding. In 1785, Benjamin Franklin returned from Paris, where he had served as a representative of American interests. He brought home a bejeweled gift, which incited controversy. The grandest item in his possession, it was a portrait of Louis XVI, outlined by 408 diamonds and stored in a golden case. This present was often referred to as a snuffbox, a name that seemed intended to obscure its grandeur. It symbolized everything that Franklin’s generation despised about Europe and its debasements. There, gift-giving was a standard diplomatic custom. But a gift might cloud the judgment of a public official, and risked undermining the allegiances of the recipient. It represented the possible elevation of personal gain over commitment to the public good.

The perils of corruption were an obsession of the Founders. In the summer of 1787, James Madison mentioned corruption in his notebook 54 times. To read the transcripts of the various constitutional conventions is to see just how much that generation worried about the moral quality of public behavior—and how much it wanted to create a system that defined corruption more expansively than the French or British systems had, and that fostered a political culture with higher ethical ambitions. In her important history, Corruption in America, Zephyr Teachout, a legal scholar and liberal activist, argues that during the country’s first 200 years, courts maintained the Founders’ vigilance against corruption. For a good chunk of American history, a number of states criminalized lobbying in many forms, out of a sense that a loosening of standards would trigger a race to the bottom. That near-phobia now looks quaint, and also prescient. The political culture, the legal culture, the banking culture—so much of the culture of the self-congratulatory meritocratic elite—have long since abandoned such prudish ways. The defining document of our era is the Supreme Court’s Citizens United decision in 2010. The ruling didn’t just legalize anonymous expenditures on political campaigns. It redefined our very idea of what constitutes corruption, limiting it to its most blatant forms: the bribe and the explicit quid pro quo. Justice Anthony Kennedy’s majority opinion crystallized an ever more prevalent ethos of indifference—the collective shrug in response to tax avoidance by the rich and by large corporations, the yawn that now greets the millions in dark money spent by invisible billionaires to influence elections.