I will be monitoring this conversation and you will have a chance to ask questions. First, a senior fellow here at the Carnegie Endowment for International Peace. She is the author of this report, when corruption is an operating system. Shes using honduras as the case study. To add to the conversation, we have the author of corruption in america. She is also an attorney in the loss of filed against president trump. So, corruption as an operating system. What does that mean . Yeah, what am i talking about . Exactly. So, would you mind we have a picture. Fundamentally what i am talking about here is not corruption as that some practices members of government indulge in, in some countries a lot of government officials might indulge in this, but you know, the way we normally think about it is sort of like i dont know, like a disease that creeps in and infects the tissues of government. Int ive been seeing honduras turned that to be a really clear example of it. Network, anding a a network that crosses asndaries that we think of separating different sectors of activities, like the public and private sector, right . Americans love to fight about which one, the public or private sector is more pernicious, or worse for your help. And let alone, the criminal secretary is famous for criminal activity. So, what becomes clear as you look carefully is that you have got a network that is made u p of people at the top of the Public Sector, the private sector, and the criminal sector and often, they overlap, or they share competences, or they have a cut out, like a representative that they will you know, one brother will be in the Public Sector and the other will be running a drug cartel. So, you span these different sectors. Thats what this picture is supposed to evoke in peoples mind. I will say that later. David, if you would not mind giving me the next one. Does try tophic break it down for you. So, the Public Sector, members of the network, have a responsibility and that is, to distort state agencies are institutions, budgets of government if you will, to serve the purposes of the network, as opposed to serving their stated purpose, which is the public good. Exactly. Through allg to go of them, but what this report pickand shows is you just them apart a little bit. There are a couple of examples i honduras, but one of them is the justice sector. Because theres a bargain that hold these networks together and its that money flows upward in the network, and impunity flows downward. Theres a deal. For the part of the take you are kicking up words, you are guaranteed protection from legal repercussions. That can take a lot of forms in Different Countries. In honduras it is particularly egregious. You had a midnight firing of four of the five justices of the Supreme Court. This happened a a number of years ago, but it can be the actual judges. It can be by capturing public prosecution. In some countries, i have a seat in honduras, in some countries where its difficult to capture the justice sector, the network figures out how to work around it. Where judges retain quite a bit of independence, the president has been focusing really hard on expanding the jurisdiction of the military court. So that more and more cases can bypass the relatively independent civil systems and be funneled through the much more controllable military system. Then, the next thing the colors on this infographic are bleue for government, green for private sector, and red for the criminal sector. Because that is for the bad guys. Anyway, we looked at the private sector, and its not, sometimes this can look like the entire system and you sort of say who is corrupt . Everyone is corrupt. But it actually makes some sense to try to drill down and look at, what are the specific Revenue Streams that are being captured by the network . So, some of it goes back to the Public Sector and his public procurement. Thats another way that these networks, and in honduras in particular, infrastructure. Big Infrastructure Projects like roadbuilding, ports, things like that. You will see construction companies, but the Banking Sector is a classic. In this case, it turns out the network or network affiliated families control about half of the banking of the financial. Energy is a classic and in honduras it is interesting because it is not a country that has an extractive industry. There is not oil or gas. It has a mining industry, but no oil or gas. Quite interestingly, it has been Electricity Generation that has been captured, including renewables. That was a big surprise. The Solar Energies tha sector has been captured at the start. And theyre getting sweetheart rates, very high rates. Palm oil also for biodiesel. A couple other interesting ones, nonprofit organizations. One of the important Revenue Streams of course, is international development. And so if you can situate yourself to capture that flow, its a pretty significant one. And then theres the criminal sector and i dont think i need to belabor that in the case of honduras, but we have a case going on in new york right now. The son of the former president , right, i think it is . I wanted to ask you a question. Of course. What makes it an operating system, as opposed to just a bunch of crooked people . That is a great question. And it partly, you look at the personal relationships. So in this case, a piece of the private sector element is somewhat selfcontained and it is culturally uniform to some extent. It is a letter people who are defendants of immigrants from the middle east and they tend to live together, intermarry, go to school together, and exchange positions on each others boards of directors. That self containment is breaking apart a little bit and we are now in the fourth generation, but it is the exchange of personnel and the word. What is the yount to say, you know, look at the people who are making decisions and you will see the same name popping up in the decisionmaking processes in the decisionmaking body. And as i said, they exchange personnel. He will have this private sector group i am talking about. They will have had a number of top officials selectively at different stages. And in the criminal sector also, you have got you can see, it is almost you have to do social networking. I would have loved to have done enough of these personal linkages, so we would have another graph which would really be the social network diagram. And i think that that is an important avenue for further research on the topic. What is the overriding goal of the system . Making money for network members. It really is revenue maximization. Aw, we can get into conversation of whether it is money or power and does money get you power, or does power get you money . Generalcase, and in internationally, money is the objective and power is more the means to that than it has been i n other times or places in human history. The reason i say that in the the money is used to boss people around. And the criminals that have alsos to money are involved around the political people. You mean there is no ideological motive . It is really that is increasingly my view and that is a conversation we can also have about how money other youing know, measures of social value in the period we live in today, around the world. Money increasingly is exclusively the way we measure our social standing and therefore, Competition Among elites is over money. Not over, and, therefore, how you kind of make the money doesnt matter as much. Let me just say, so criminal sector is pretty obvious. Its largely a narcotic industry, and then just one last two last points i would love to make. All right. Go ahead. One is networks are more resilient than individuals, and i think this is true of honduras but not just of honduras. I mean, youve seen next to in guatemala were some of the individuals committing some of these practices have been removed from office and prosecuted, that thats not enough to really uproot a network like this. Anything all need to think about this as we think about how we interact with this overseas, as those of us who are involved in trying to affect policy toward other countries. But also as we think about the repercussions here at home. Networks are, its like a fishing net, right . You can cut one knot out of the fishing net. That does not destroy the whole net. So thats pretty significant. And, therefore, we really have to think about, and this was important in honduras, was the positive organizations of people fighting against this. We found we are quite networked in we can talk about the further, but they are quite networked. And they are quite holistic in their objectives. They arent single issue organizations. I think partly because they understand wow, this thing has infected a lot of our public space and we need to, come and the effects are in multiple different domains. So i think its a good time to open it up for questions, right . Yes. First of all, both sarah and zephyr have agreed to allow me to call them by their first names and so by calling them zephyr and say i am not disrespecting them anyway. Just wanted to make that clear. Sarah, youve been sitting impatiently. What you make of all the . I think theres, whats there is the initial import and want to put in a few different frameworks. One is the framework of the last really 30 years of global, the Global Anticorruption fight. And anticorruption has drifted to the top of the global agenda. We put lots of money and energy and resource if you anticorruption, but what really matters what we say women in corruption. A few things have happened in that area. One has been very technocratic and theres been a hunch for toolboxes to catch the corrupt actors, or particular strategies that might work. If you think about corruption as this sort of sideline problem, infection on an otherwise healthy body politic, then that kind of approach makes sense. But you have this discrete problem in one area and we can fight it by a few laws here and a few more across the issue here. But what theyre suggesting is to think about corruption in a fundamentally different way, not by looking at numbers of violations the banks supersede laws, numbers of prosecutions on a particular kind of bribery statute. But rather windows in power when those in power use that power for private as opposed to public ends. That totally changes the lens in which we look at things and a white return to that that affects the United States. Because then you dont start with asking what kind of behaviors are happening and then behaviors are happening, you know its corrupt when theyre not. You start by asking are those in power using public power for selfish ends or not . And then you start looking at power. One of the important things that said this in this report is not say that we look first at elected officials and then secondarily at those who influence them. Because do that assumes elected officials are those in power. You start with the default assumption that those who get elected or, debatable and if government system, on the source or issue. Look at the who controls things. And to actually controls things matters. What she is doing then is harkening back to a more aristotelian way of understanding corruption. As you may recall, or may not, its ok if you dont, aristotle had a fixed tier system of government. There were three ideal forms, and three corrupted forms. The ideal forms with the monarchs, the aristocracy, and we will call it democracy although at the time democracy had some bad names, and the corrupted forms with the tyrants, the oligarchy, and begin he would call it democracy, mob rule, yet. Whats the difference between these two, the corrupted and noncorrupted font. Its not the number of people governing. Its actually who they serve. The difference between the tyrant in the mark is the monarch is publicly interested in the tyrant is out for his own. So what she is describing in that something closest to the rule by the few who are self interested, the oligarchic rule. This may sound like everybody understands aristotle, but this not the way we operate internationally now. We tend to operate by looking at particular crimes and trying to stop those particular crimes. I would also say this is real resonance for our Current Situation in the United States. And we can talk later about the Trump Administration, which is unique in its assault on the rule of law and unique in its disregard for any norms or laws, not any, but norms and laws around corruption. Set aside donald trump, prior to this recent presidency we have a growing split between elites and the rest of the country. Especially [inaudible] elites. But a split between what we think of as corrupt and not corrupt, and theres an incredible capacity of political elites to understand and rationalize behavior as not corrupt because its not illegal. Whereas if you talk to most people in most places in the country to look at the way we find campaigns, profoundly corrupt. Not just the way business is done but actually leading to those in power serving private instead of public ends. Id like to jump in on that and ask sarah, because one of the boys that zephyr was making is how you can get what you call a plutocracy through legal means, by changing laws, so what used to be a democracy, what used to be a somewhat on the system becomes a dictatorship through legally enacted means. And so what have you seen that looks like that . And if you could talk a lot of bit about some of the other things you report out each of the private, Public Sector, the criminal sector, the sector you call enablers. How all of those people are, according to report, working to make this operating system reach its maximization of money. So the legal question is a really interesting one, and im going to stray from honduras again for a second, but say that one of the things that these network elites, wherever they are, typically use to keep the population down, if you will, is legalism. And, frankly, the u. S. Example at my job on the ground was that eight to zero Supreme Court ruling last july that throughout the corruption conviction of governor mcdonald of virginia, you know, in the area. I could even have swallowed if it had gone that way on a split ruling. It was the eight to zero part of it that really blew me away, and the fact that nobody even thought to write like a concurring opinion saying golly, ok, given the way the law is written we had to vote this way, but, and a couple of bucks about what those were. But let me just spell out why the conviction was thrown out. It was thrown out not because there was no clear quid pro quo. There was one. It was the definition of what an official act is. So the guy headset that meetings for his business benefactor, right . He had set up meetings maybe even in the governors mansion. He had used you know, public instrument like his telephone and things like that, but an official act was being defined ever more narrowly, that essentially to the point that it seems like for something to be considered corrupt in this country, you almost need to find a contract. Except virginia. No, no, no. This wasnt the Supreme Court of the United States. The Supreme Court of the United States. That wasnt the ruling based on the virginia law and what the virginia law was speedy u. S. Law, right . Just to underline what sarah is talking about, we had a Supreme Court who has narrowed the definition of corruption in two distinct areas. The laws that are prophylactic laws, the laws that make corruption less likely, campaign law, like says like Citizens United. What you mean by prophylactic, like the upstream law, the laws that upstream of an act actually being committed would prevent the series of events that would make corruption likely, so it is like so in this case is what the court says is we dont need these laws, because we have bribery laws to deal with we have real, well deal with the real problems else out. And then in the bribery cases, the court has narrowed the definition of corruption so making it harder for prosecutor to bring cases as in the mcdonald case. So you have this sort of vice coming in annual thing left is basically its a really bumbling criminals. You would have to, you know, armando is in office. Dont use me. We are going to sign a contract, right . On a going to give you 5000 and give you 5,000 and yet about the following three ways and let sign the contract, and then you can have this never happened. But i think that relates to an elite and cultural approach, that the Supreme Court sees people like governor mcdonald as part of the community that they recognize and understand speedy a sense of entitlement, do you think . Were entitled to that . Its a splitting community that relates to the incredible class we have in this country, and mark twain you can go to for almost anything writes about this in his novel, the gilded age, a few different languages of corruption that happened in the late 19th century where elites start to say hey, this is it really corrupt. This is just the way we do things. Anybody else says, you know, if it walks like a duck and talks like a duck, its a dock. So understood is quite clear, the legalization process. The first thing i found really interesting was just to look at the congress building. You have seen it. This thing is clearly devalued. The building is not a dignified building. I almost included in a slideshow picture of the chamber which kind of looked, doesnt look as nice as this room. And thats not because of lack of resources. Its an issue of the dignity of the body and the institution. Its ability to serve and oversight function has been systematically undermined, meaning again, just physically the fate, when i wanted to meet with members of congress, they didnt have offices. They didnt have a conference room. There are two Conference Rooms in the building of the congress. And actually had to camp out in the building to prevent any, sorry, in the ribs, to prevent anyone else in the rooms, from taking our things. People might say thats a good thing though. I m