Just as a quick disclaimer is a nonpartisan educational organization. The institute takes no position on any issues. The views expressed in this report are mine and mine alone. Im going to make some brief comments on the report. And we will invite our two distinguished discussants up to the stage. Then i will sit with them and will ask a few questions and we chat about this topic of dismantling the corruption nexus until about 4 pm. Then we will take questions from the audience. And we were dismissed promptly at 430. What is this all about . I am a political scientist. This means our study and explain how the political world works. Not my job to offer my opinion. It is my job to explain how things work. My work stems from actual personal frustration. Letting you know my opinion. I have been frustrated with being able to predict terrible outcomes in the worlds authoritative regime. Looking around and seeing terrible things that are going to happen. Then being frustrated by the fact that i am unable to do anything about. What are these things . It is involved in every single word. That are among the worst human rights abuses. Authoritative regime didnt end just as violently or suddenly as they began. They are generally horrific in how they deal with individual people and individual rights all around the world. In authoritarian regimes, corruption is a feature. Not a bug. All of this is terrible for markets anywhere. Especially in the long run. However, we have to recognize and know that authoritarian regimes around the world are sovereign states. They are not interconnected with our market and our politics in any number of ways that are quickly expanding. Changing and deepening. What this means is that it prevents our policymakers with a court challenge. How are you going to go about addressing authoritarian regimes and authoritative corruption without sacrificing our own value. Without harming our own interest as free societies. Or without harming our own capitalist market. How are we going to do this . We should not shy away from using our military and economic power to defend our friends and ourselves. This deepening and expanding means that these traditional methods of dealing with National Security threats such as military interventions and sanctions tend to treat these states as unitary isolated actors are going to become less and less successful over time. On the congress thought of that, liberal institutions such as the World Trade Organization or the United Nations that tend to depend upon the dreams are the hopes of people for better actions are going to continue to fall prey to the liberal actors around the world looking to influence them and bend them to the old will. Essentially what im saying, liberty needs a strategy. Democracy needs a strategy. The role of law needs a strategy. America especially needs a strategy for navigating the post war era of authoritative regime. To sum it up in a sentence, i was say we need to consolidate gains and liberty when it already exists. Lead by example. Consolidate games where they exist and lead by example. You may say, easier said than done. It really is pretty simple. What i have done is created a handy new concept. Can help explain why. The authoritative corruption exists is the growing convergence of illicit state and nonstate actors. Reinforcing the strength and survival. In other words, that is kind of a big definition. In other words, authoritative governments, they abuse their access to u. S. Markets to prolong their own home and gain strength. Terrorist groups use these exact same methods and avenues to support and gain strength. The nexus is where we need to focus. The problem is that it overlaps into free societies and free markets as well. In the report, what i did, i characterize modern great power competitions is not a clash of civilization but as a clash of governments system. This is freedom versus authoritative. Corruption however one wants to conceptualize it is first the method through which authoritatives around the world seeks to remain in office. A method the use remain in office. Second, it is the channel through which they infect free countries and free economies with greater amounts of corruption. To be clear about this, getting to the time. All authoritative regimes in my view are a form of autocracy. Questions all of our enemies and authoritative regimes. Not all authoritative regimes are enemies. We have a lot of regimes that we are friendly with. That is okay. That is no reason to simply turn a blind eye to the corruption that existed in those countries. We need some adjustment. Summary calibrations. The first aspect before i get into the policy, the first is that American Foreign policy in general needs to make a clear distinction between the people that suffer and the regimes and leaders that create those conditions for those people. In other words, china is not the enemy. The communist party is. Iran is not our enemy. The ayatollahs are. Russia and north korea are not our enemies. The regimes are. To better understand these threats, as i have said many times and nonviolent manner, domestically what we need to do is look in the mirror. We need to deal with the abuse of anonymous Shell Company formations in the United States. Second, i would say give the Financial Crimes Enforcement Network a clear mission. What are they doing in the world. What are they trying to do . Third, deal with the Money Laundering in a more systematic way in real estate. It is outlined in the report. Fourth, evaluate how the Global Network of Foreign Trade zones around the world work. There were some 3500 zones around the world that we do not know much about. We dont even have a similar definition for them in understanding how that works with all sorts of trade fraud and issues related to this. Fifth i would say reevaluate the role of the foreign agents registration act. Are going to the report as well. Finally give the private sector a greater role in anticorruption efforts worldwide. This could be done very simply by amending the foreign corrupt practices act. To punish the demand side of bribery. Looking internationally outside of the United States, what i think is we need to formalize the group of seven. The g7. The g7 should be made as a formalized institution only for established democracies. It is what it essentially is. It does not have a charter. In the charter, i think we need to provide a clear mechanism for ascension to the charter. To provide an attractive for other countries to reform. We also need to have a clear method for expulsion. It is something that other International Institutions like and receive problems with that across europe and other places. Leslie, i would say the Financial Action task force. Needs to find ways to refine the mutual recording. Also needs to step up to stop focusing on trade based Money Laundering. It is one of the least understood most pervasive worst elements of moneylaundering problems around the world that is right under our noses. In conclusion, i would say the role of law and democracy are roads with no set end point. I would say it is time to begin road improvements. That is how we win this round of great power competition. Thank you and now i would like to call my 2 was. I will tell you all a little bit about them and we will sit down and have a discussion. Consulting firm that uses the methods to address business problem. Is a member of the American Academy of arts and sciences. On the counselor preservation. The 2007 recipient of the prize. Among other honors, he is the author of 21 books including the spoils of war. And the conflicts that made our greatest present. The dictators handbook. Why bad behavior is almost good politics. The prediction years gained using the logic of brazen self interest. And my favorite, the logic of political survival. Is also author of more than 140 articles and major in newspapers. The new york times. The wall street journal. The independent financial times. It to our documentary about his political forecasting. Is a doctorate in political financing. Doctorate from the university of heidrick. He joins the International Republican institute as president. He leads the team of nearly 600 global experts. To motivate people to engage in the political process and got politicians and dormant officials to be responsive to citizens. Previously served as counselor and director of the program. Of the United States. Is served as a member of the u. S. Secretary of states policy planning staff. He has taught at georgetown university. Is also been a columnist for Foreign Policy and has served as an advisor to six president ial campaigns. Please join me in welcoming them. Welcome. How did you like my little speech. I have been told i can be a little evangelical. Apologies for that. I want to start basketball for you. You have had advance copies of the report and had a chance to look them over. Im curious from your own personal perspectives. We have two different perspectives on this. Wanted to see what you thought about it. That is extremely important questions. You started to talk this afternoon with a list of problematic types of people. I thought you left somebody off the list that is fundamental to addressing the issues. That is we the people. The leaders that we elect. Mindful of the dictators handbook. Is almost always good policy. Corruption is not an accident. It is not a consequence of bad people. What a bad institution. As you indicate. Unfortunately, as you also indicate, democratic governments exploit the opportunities that corruption provides. But rather to make deals with democrats. We give you money for for me. Give you a pass on corrupt activities. In exchange you will give us policy concessions. We have extracted. From egypt. In exchange for which we essentially pay the money. We want the pakistani government to pursue militants. We give the money to pursue. We face as the people in a very tough problem. We want those policies to be conceded to us. The governments in power need to pay off the cronies to stay in power. We give them the money to pay them off. We have a difficult decision to make in tackling corruption which is a disaster for the people in the countries that are most victimized by it. That is to also address how do we satisfy our constituents at home on important policy areas to do our bidding. That is my concern. I am in agreement with everything in the report. It is pretty precise. We do have to address why we the people are rewarding dictators. That is something we have been reluctant to do. I am here because i like to report a lot. There are a lot of people out there who understand that we are in a great power competition. They essentially think the solution to that is the budget. Of course that has to be part of it. They are using nonmilitary not kinetic instruments to corrupt and assault open society. You argued the corruption nexus. Where there are lots of checks and balances, overstate resources, you end up with gross abuses. All sorts of corrupt forms. One she is often your paper is that corruption in such a country does not stay in such a country. Corruption is essentially laundered of the country. Into the west. You argued that we havent in our capacity. It is in our warehouse to take on this issue of corrupt authoritative actors in great power forms are working actively to subvert and weaken our leadership in the world. The point out very compellingly that we talk about these separate strands of threats. As if they were separate things. Mass migration. Conflict that produces failed states. All sorts of pathologies. Competitors like russia and china. Human trafficking. All of these syndromes emanate from similar calls. It is governments that have been correct. This takes different forms in a country that is poor and weak. Thinking about the difference between libya and china. The blowback or the fallout is right to our shore. I really like the argument. The solution to dismembering the corruption nexus. The solution lies in Democratic Capitalism. Free people and free markets build together. Free People Living under represented institutions do not there pathologies are brought in ways that threaten america. Three People Living in well covered societies governed by role of all and federal institutions actually look after themselves quite well. All of the challenges to us emanate in cases where that is not true. You also argue that dependence on illicit Transnational Networks is the achilles heel. Of corrupt authoritative. They rely on international nonstate actors. To preserve the world and to launder money. To educate their children. Twopart resources offshore. Ultimately, in a century that will take technological information, democracies open society should still have a invented. A fundamental advantage. Our way of life is more attractive. We care about we the people. In ways that they do not. We need to seize on some of those advantages. Safeguard our societies. I want to respond to what she said. Keep this conversation going. To try to make it very clear that i do not think Democratic Capitalisms are perfect. There was one graph in their initials the individual observations of corruption. Is a terrible different thing to measure. Were talking about in a very abstract way. There is trade based Money Laundering. Transactional bribery. Grand corruption. There is also a star. I tried to make it clear that these types of elites. They will feel robbed and commit crimes. In order to get the public goods that they need to keep our exist in all countries. That is just a human trait. There artificially called and curated into a smaller group. And getting to what you said about us dropping off countries with for me. I see that and i have read all your research on that. I sort of think of it like peace in the middle east is a public good. If youre bribing that off, that fits into the model for how a large Winning Coalition regime or democracy works. I would assume as this carries on in the future and we saw some of these photos, there would be less means to do that. Maybe you can respond to this with the transparency stuff that you have worked on. Again making information more credible. Is that a way that we could possibly hold more capacity in weaker states to get more information out there . More transparency in government compels government. More publicity about the absence of transparency in many governments is also critical ingredient in educating for example the american public. On what the difficulty is are in some new places that we do with. So that they will then increase the priority that they have forcing federal governments overseas as opposed to concessions at home. I do think that is part of the recipe care. I think another part to your comments is the promotion of democracy. We have never been good at it. Sincere in my opinion about doing adequately. There much more to be compliant on policy questions with what we want in exchange for money. The fundamental problem in corruption which you learned to as they depend on very few people to keep them in power. If you depend on very few people to keep you in power, the easiest way to stay in power or the most efficient way to stay in power is to let those people feel and be corrupt as long as they are loyal to you. If we put more effort into making our commitments to dictators contingent on their meeting some benchmarks, you deliver more free press. You deliver more competitive system. We would do more for you. We are going to do more because you promised you would that. I guess we have to give you more. You have not fulfilled the promise. There is a strategic dissembling that goes on. Is very troubling. If years ago, i was just looking. At the time, Hillary Clinton spoke about how great it was that they were becoming a democracy. We love that. They have an incentive to access reformers for the first two years in power as similar where the money is. Within the first two years, there were more risk of being overthrown the democrats. After those first two years, the survival prospects were terrible. The survivor process of dictators were excellent. The first window is the opportunity to let them into the concert reforms that we were talking. Another just put out a new report. I wanted to ask you what that was all about. Is a summary of how that relates possibly to what i am talking about. That i wanted to ask you guys. What is going on. I said in my comments that the Chinese Communist party is the enemy. Meaning that they are the ones doing everything. I read a blog recently about billions of people out of poverty. That was the Chinese People that did that. The communist party just allow them to do it for themselves. The question is, what i worry about with china is domestic stability. When it collapsed in 1991, out of nowhere, some people predicted it. Did not harm us too much because we did not trade with them. That happens in china today, my worry is that that is a massive grip that we are totally unprepared for if there is domestic instability. We tend to treat it as a monolithic kind of last forever. We did the same thing with the ussr. I am curious what you guys fall on the china question. Just two quick points about china. Chinas developmental similar in scope. Just because theyre 1. 4 billion chinas. Is not singular in terms of trajectory. If you wanted to destroy a company, it is a great one to fall in. The rebuilt that economy was to begin open in the late 70s. Chinas experience was replicated in an earlier year by japan. China is the new asian tiger. It is displacing horrible economic and strategic balances. That is point number 1. There is a lot of talk which i love to pick up in the discussion about china having a superior model. Has created a middleclass. The Worlds Largest. Without political liberty. Hong kong were two weekends ago, 25 percent of the population was in the street. 2 million were protesting in mainland china. People are as rich as in germany and france. There were still postings protesting the infringement of their political expression.