Countering Kleptocracy: August 30, 2023

Understanding transnational kleptocracy as a vehicle for theft, repression, and democratic erosion…and how we can respond. If you enjoy this newsletter, forward it to a friend or share on social media so that others can subscribe.


Kleptocratic Cooperation in Africa: How Russia and China Undermine Democracy // August 30

by Melissa Aten

In a new Forum reportJ.R. Mailey and Andrea Ngombet highlight how two global authoritarian powers, Russia and China, provide surge capacity to kleptocratic networks in Africa. This report is an outgrowth of Forum convenings that brought together counter-kleptocracy experts, NED grantees, and other activists. Russia’s full-scale invasion of Ukraine in 2022 showcased to the world the grave national security threat that kleptocracy poses to democracy. The mutiny by Yevgeny Prigozhin’s Wagner Group in June 2023 put a spotlight on one of the shadowy global tentacles of Russia’s influence. The Wagner Group’s commercial interests and cozy relationships in parts of Africa with some of the continent’s most diplomatically isolated regimes reveal the extent to which a global kleptocratic support network has taken shape. In his essay, “Criminal States, Militarized Criminals, and Profiteers: Russia, Africa, and the Evolving Ecosystem of Transnational Kleptocracy,” J.R. Mailey dissects the Wagner Group’s illicit activities in key parts of Africa. The Wagner Group’s activities are complex, but Mailey zeroes in on the fact that the military support offered to African kleptocrats has little to do with providing security and stability for the African people. Rather, it is focused on extracting resources, advancing geopolitical goals, and serving as a brutal cog in the authoritarian mutual support machinery. Even if the ultimate fate of the Wagner Group remains unclear following Prigozhin’s mutiny and recent demise, these trends are unlikely to dissipate. The muddied and complex economic relationships that the Wagner Group has developed on the continent are no doubt too lucrative for the Kremlin to surrender. The Chinese party state and its proxies also are entrenched in corrupt networks in Africa. Chinese-linked kleptocratic networks are tapping into like-minded networks on the continent, helping to embolden and empower local kleptocrats seeking to enrich themselves at the expense of their populations. Andrea Ngombet Malewa’s essay, “How China Fuels African Kleptocratic Networks: The Case of Congo-Brazzaville,” highlights the ways in which China facilitates Congo-Brazzaville’s deeply kleptocratic regime. In addition to long-standing Chinese involvement in the timber and extractive industries, Ngombet’s analysis highlights the establishment of a Sino-Congolese Bank for Africa that could allow kleptocrats to bypass the transparency requirements of Western-linked banks, thereby affording opportunities to launder money with impunity. Given the knowledge deficits about Russian and Chinese activities in kleptocratic networks, nongovernmental organizations should focus on educating the public on the true nature of Russian and Chinese activities in their countries, as well as on the financial, social, and ecological costs of initiatives pushed by Beijing and Moscow. Civil society and independent media seeking to identify and expose kleptocratic networks in Africa face enormous challenges. They often lack the resources, specialized knowledge, and skills needed to track illicit financial flows, and the complex vehicles kleptocrats use to move money around the world. Resource-rich regimes in countries such as Congo-Brazzaville, Sudan, and the Central African Republic already suffer from gaping deficits in accountability and transparency. Despite these odds, both authors identify critical steps to elevate civil society’s essential work exposing and combatting kleptocracy in these circumstances.

Read the Forum’s latest report, Kleptocratic Cooperation in Africa, and register for our virtual launch event on Wednesday, September 6 at 2:00 pm ET.Image Credit: ESB Professional/Shutterstock

Architects of Terror (the Sentry)

The Sentry analyzes the impact of the Wagner Group’s political, military, and economic activities in the Central African Republic (CAR) and its support for President Faustin-Archange Touadéra. Wagner established a “parallel army” along with Touadéra; these forces could be privatized and directed for their own malign purposes. By solidifying its hold over the CAR’s precious mineral industries, bolstering the president and his proxies, and establishing military ties, the Wagner Group developed a concrete framework for state capture. Read more about the Wagner Group’s role in Africa in this recent Forum essay.


Cash is King: Impact of the Ukraine War on Illicit Financial Flows in South Eastern Europe (Global Initiative Against Transnational Organized Crime)

According to this GIATOC report, multiple Balkan countries have emerged as potential conduits for sanctioned individuals seeking to evade rule-of-law measures. Moreover, the conflict bred new opportunities for tax fraud and smuggling people and weapons across borders. IFFs pose a critical threat to governance: exacerbating criminal and rent-seeking behavior, undermining growth, and weakening the rule of law.


Russia’s Handbook for Evading Sanctions (Inkstick)

Sanctioned Russian oligarchs and business entities have grown adept at circumventing sanctions enacted in the wake of the Kremlin’s full-scale invasion of Ukraine. Despite the EU’s price cap on petroleum at $60 per barrel, suppliers from Russia use falsified documentation to sell oil at higher rates. Networks of state-linked subsidiaries also allow Russia to acquire sanctioned technology via third countries. For more on how kleptocrats weaponize third-party jurisdictions to circumvent sanctions, read the Forum’s report, “Kleptocratic Adaptation.”


Exclusive: Far-Right German Parliamentary Aide Tasked by Russia with Stopping Leopard Tanks to Ukraine (the Insider)

Leaked communication from Vladimir Sergienko, a German citizen and aide to a Bundestag deputy, reveal the extent of Russia’s kleptocratic influence within the Alternative for Germany Party (AfD). Segienko conspired with a suspected FSB agent to file a lawsuit that would obstruct the delivery of battle tanks to Ukraine and funnel money from Russia to an unnamed German NGO. These revelations demonstrate how intermediaries enable authoritarians to quietly funnel illicit funds through institutions in democracies, with the intent of furthering their geopolitical agendas.


Maximising Awareness of Russia’s Threat to Global Financial System Integrity (Royal United Services Institute)

The Centre for Financial Crime and Security Studies at RUSI analyzed gaps in sanctions enacted after Russia’s invasion of Ukraine. Since non-aligned countries might be unwilling to support democratic sanctions, counter-kleptocracy activists should focus on ensuring compliance within the banking industry. Among other measures, banks can conduct greater due diligence in jurisdictions with a high risk of sanctions evasion. Banks in rule-of-law settings can also leverage relationships with their counterparts in non-aligned third countries to encourage adherence to the sanctions regime.


A Journey of 20: An Empirical Study of the Impact of Magnitsky Corruption Sanctions (International Lawyers Project)

The International Lawyers Project determined that sanctions under the Magnitsky Act can produce four outcomes: direct impact such as travel bans or asset freezes; pushback from private-sector entities; legal, political, or social impacts within the individuals’ home country; and change in behavior by individuals or networks (see “Figure 2” below for the comprehensive list of impacts). When evaluating the effectiveness of sanctions, state actors should account for non-measurable outcomes; identify corporate networks associated with sanctioned figures; target individuals who rely on international financial systems; and articulate a clear added value when sanctioning those who have already faced legal scrutiny at home.

Image Credit: “Figure 2: Forms of Impact Observed,” A Journey of 20: An Empirical Study of the Impact of Magnitsky Corruption Sanctions, International Lawyers Project, accessed August 22, 2023,



Kleptocratic Cooperation: How Russia and China Undermine Democracy | International Forum for Democratic StudiesRead the Forum’s latest report from J.R. Mailey and Andrea Ngombet or register here to attend the virtual report launch with the report authors, Jodi Vittori, and more. Opinion: The Kleptocracy Strikes Back. An Azerbaijani Economist Should be Freed. (Washington Post)Azerbaijani law enforcement recently arrested kleptocracy activist Gubad Ibadoghlu, ostensibly for purported corruption, but more likely as retribution for his activism. Authorities claimed to have found $40,000 in his organization’s offices as well as proof of association with the self-exiled Turkish cleric, Fethullah Gülen. These measures, however, are likely punishment for Dr. Ibadoghlu’s work with the Azerbaijani Youth Educational Foundation, an organization which seeks to support Azerbaijani young professionals and recover funds that leading state actors siphoned from the country’s coffers and stored in the U.K. Dr. Ibadoghlu previously served as a Reagan-Fascell Fellow at NED.

Thanks for reading Countering Kleptocracy! If you enjoy this newsletter, forward it to a friend or share on social media so that others can subscribe.