In American Kleptocracy: How the U.S. Created the World's Greatest Money Laundering Scheme in History, investigative journalist Casey Michel reveals the shocking story of America’s crucial role in becoming a safe haven for trillions looted from their countries by dictators and kleptocrats. On the eve of publication, PW spoke with Michel about his new book, fascination with the dark side of money, the Pandora Papers, and more.
How did you come to start researching this problem?
About 10 years ago, I was a Peace Corps volunteer in Kazakhstan. I don't have any family connection to the region, and I didn't study it as an undergraduate; I enrolled in the Peace Corps because I wasn't quite sure what I wanted to do after my undergraduate career, and ended up in that post-Soviet nation. It was my first direct experience, living and working in a country that was overseen by an authoritarian dictatorial regime, in which a singular figure, the nominal president—in effect, the dictator—rules with an iron fist by smothering any and all efforts at increasing democracy, any and all free press, any and all opposition. And while doing so, he enriched himself, his family members, and his inner circle, who all moved the proceeds of those ill-gotten gains abroad, into things like Swiss bank accounts and Western real estate. I don't dedicate the book to the former dictator of Kazakhstan, but in many ways, as I was writing the book, he was always kind of a presence in the back of my mind, because without him, without that time in the Peace Corps, this book never would have come to pass.
So how did you get from there to here?
Seeing how that regime utilized these financial secrecy tools planted a bug in my mind. I ended up going to graduate school at Columbia and I was very, very fortunate to study under an academic, Alex Cooley, who had also been examining many of the same phenomena. So when I was there, I was studying how post-Soviet kleptocratic regimes access and manipulate Western audiences, Western financial secrecy vehicles, Western industries. I never expected that study to be as relevant as it ended up being as we started 2016. But things just began to snowball—these are not regimes that are isolated, or are localized in one jurisdiction. They are global, run by figures that are among the elite of the elite, moving in the same circles as prominent Western figures, using things like shell companies, art and auction houses, and private equity to move and to hide their money.
Given how long you studied this, was there something your investigation found that you really were shocked by?
Yes. Just at the 10,000-foot level, the scope and scale of what we're talking about—trillions, comparable to the GDP of China. The thing that has really gotten under my skin is the willingness of Western political figures, Western law firms, and Western PR and consultancy firms to work with the most heinous people, the most heinous regimes on the face of the Earth. For example, former British Prime Minister Tony Blair, who wasn't the most beloved figure coming out of his premiership, or the most hated. What he ended up doing, almost immediately, was going to shop around his services as a speech writer and a so-called consultant to dictatorships around the world, including the dictator in Kazakhstan. He became this pet PR guy, taking, as far as we know, hundreds of thousands of dollars in money that he certainly couldn't trace, money that he certainly didn't ask any questions about, to become an effective speechwriter for this decades-long dictator. You see examples of this in the U.S.; the most prominent one is actually former presidential candidate Bob Dole, who has made millions acting as this PR representative, this white-washer, for heinous oligarchic figures. That these nominal supporters of the broader democratic experiment are so willing, time and time and time again, to go out of their way to care about nothing more than their pocketbook, and are willing to sign up with the most horrific regimes on this planet, it's just something that I will never get over.
Did the Pandora Papers provide anything that was new to you?
Oh, no, I mean, at the 10,000-foot level, none of it was new. The Pandora Papers all detailed and confirmed everything that this book is about. I'm not saying that I'm the first person to make this claim. For me, on my end, perhaps the most important outcome of the Pandora Papers themselves, is that just as I'm hoping to do with my book, it revealed the United States of America to be one of, if not the, central offshoring and financial secrecy havens in the world.
Any basis for hope?
Perhaps surprisingly, I am optimistic. Perhaps that optimism is misplaced, given the scope and the scale of this offshoring kleptocratic world. But at the end of the day, I am optimistic for a number of reasons. One, we have things like the Panama Papers, the Paradise Papers, and especially the Pandora Papers, beginning to shine a light on this world that has been in the dark for years and years, so we are finally getting a broader public and societal awareness of the magnitude of this issue. We have finally begun seeing developments in the policy space to begin patching up these holes. The very first day of 2021, we finally saw legislation passed that will effectively ban the formation of anonymous shell companies in the U.S. That was a huge, huge deal, passed over President Trump's veto. We have a brand new caucus in Congress—the counter-kleptocracy caucus, pushing bill after bill after bill on a bipartisan basis. Biden is from Delaware, which I would still argue is the greatest single offshore haven within the U.S., but he is the first president to elevate corruption and kleptocracy to a core national security threat.