Political Corruption Enters a New Golden Age

Federal prosecutors didn’t have a great day on Thursday. In Newark, New Jersey, a judge declared a mistrial in the case of Senator Bob Menendez, the Democrat who was accused of taking gifts from a donor in exchange for government favors. The jury was deadlocked, though one member said 10 of the 12 jurors were in favor of acquittal.

Meanwhile, a short train ride away in Manhattan, another federal judge declared another mistrial, this time in the case of Norman Seabrook, a former New York City correction officers’ union chief who was on trial for funneling members’ pension funds into a high-risk investment scheme in exchange for kickbacks. That jury also deadlocked.

Even if neither Menendez nor Seabrook broke the law, neither situation feels good. Menendez and Salomon Melgen were good friends; Melgen paid for private jet flights and vacations for Menendez; and Menendez intervened on Melgen’s behalf in government, for example by calling diplomats to try to help Melgen’s girlfriends get visas to the United States. The question was whether these were illegal official favors bought and paid for by Melgen’s gifts, or were simply favors.

Seabrook, meanwhile, was accused of taking a cut in exchange for sending pension funds to a high-risk investment fund. Jurors couldn’t decide, but Seabrook’s high-rolling lifestyle, on a $300,000 salary, and his role as a crucial impediment to reform at New York’s deeply troubled Rikers Island prison, didn’t require court adjudication.

Prosecutors say they will try Seabrook again; it’s unclear whether Menendez will face another trial, though the 10-2 deadlock can’t be encouraging to the government. Meanwhile, Senate Majority Leader Mitch McConnell on Thursday called for a Senate Ethics Committee probe of Menendez. “Senator Menendez was indicted on numerous federal felonies,” McConnell said in a statement. “He is one of only twelve U.S. senators to have been indicted in our history.”

If both men go free, however, they will be the latest examples in an emerging trend: People around the world, and Americans in particular, seem to be living through a golden age of corruption.

One could date the trend inside the U.S. to June 2016, when the Supreme Court overturned the corruption conviction of former Virginia Governor Bob McDonnell. It’s not that the justices found that McDonnell hadn’t done the things for which he was convicted; it’s that they decided that his favors on behalf of a friend who gave him more than $175,000 in gifts didn’t constitute legal corruption. As my colleague Matt Ford explained, the McDonnell decision played a key role in the Menendez case, with the judge nearly throwing the whole case out because of the Supreme Court’s verdict.

Since then, prosecutors have been stymied over and over. As U.S. attorney in Manhattan, Preet Bharara made his name racking up corruption convictions for major New York state politicians, including Sheldon Silver, the Democratic speaker of the New York State Assembly, and Dean Skelos, his Republican counterpart in the State Senate. In March, President Trump fired Bharara, despite having previously told him he would stay on. In July, Silver’s conviction was overturned, and two months later, so was Skelos’s.

The moment is not restrained to the U.S.—it is international, or perhaps more rightly transnational. Earlier this month, the International Consortium of Investigative Journalists revealed a tranche of documents they called the Paradise Papers, a follow-up to the blockbuster 2015 Panama Papers. But in comparison, the Paradise Papers seemed to land with much less impact. That’s not because the behavior described in the Paradise Papers is necessarily less egregious; perhaps the problem is that the public is so news-saturated that fatigue prevented greater focus.

The documents implicated Queen Elizabeth II in dubious investments in the Cayman Islands, a notorious tax shelter. Apple, having remonstrated that it was not hiding its cash “on some Caribbean island,” devised a scheme to hide its cash on Jersey, an island in the English Channel, instead.

Wilbur Ross, the secretary of commerce, came out looking especially bad. When he entered the Trump administration, Ross kept an investment in a shipping company with close ties to the Kremlin and a Vladimir Putin crony facing sanctions. He disclosed the existence of the investment partnership during the confirmation process, but not that the partnership was invested in the shipping company. Forbes, which had long featured Ross on its list of the richest people, announced that having reviewed new documents it no longer believed he was even a billionaire.

Of course, there’s corruption around the world. The New York Times has published a series of articles on how Vladimir Putin has enriched himself and his friends as Russian president. The cartoonishly gauche former Italian Prime Minister Silvio Berlusconi on Thursday won a judgment against his ex-wife, with a court ruling a divorce settlement had been too generous to her.

What accounts for this boom time in the corruption industry? It isn’t necessarily that the world is more corrupt than it has been; wherever there’s a buck, or pound, or dirham, or ruble to be made, someone’s going to try to make it. Nonetheless, it feels like the bad actors are getting away with it more at this moment.

Legal precedents like the McDonnell case are one part of the equation. So are ever looser campaign-finance laws, which allow larger infusions of money from individuals and groups, and make it easier to shroud the source of that money. As the Paradise Papers show, the globalized, digital world and an arms race of clever tax-sheltering strategies make it easier for the wealthy to find ways to stash their cash in questionable ways, often undetected—until big leaks like the Panama and Paradise papers. And with wealth around the world increasingly concentrated in the hands of a narrow elite, there’s more demand to shelter it.

There’s one more glaring factor within the United States, though: the president. Without necessarily breaking any laws—he has neither been charged nor convicted of having done so—Donald Trump has set a tone that makes the social environment more friendly to corrupt behavior.

It’s not just a matter of the many scandals that dogged him as a private citizen. After his election, Trump refused to put his assets into the customary blind trust that officeholders use, instead creating an arrangement that still gave him significant visibility into his assets, and which most ethics experts dismissed as wholly inadequate. (Since then, his son Eric Trump has suggested in interviews that his father speaks to him about the Trump Organization, despite a pledge of distance.) In several ways, Trump appears to be benefiting financially from his role as president. He has been sued for violating the Constitution’s emoluments clause, and his Trump Hotel has become a hotspot for GOP fundraising and a destination for foreign diplomats eager to curry favor with the government.

Trump’s son-in-law and senior adviser Jared Kushner may also have mixed his own business with the public’s. Kushner met with the Russian state-owned Vnesheconombank (VEB) in December. VEB says the meeting concerned the Kushner family’s private real-estate business, while Kushner says he attended in an official, diplomatic capacity. Though Kushner left the business, his sister was later found to have been using his name in presentations overseas.

Trump picked Ross as his commerce secretary, of course. He also appointed fellow New York businessman Carl Icahn to a nebulous advisory role, which a New Yorker report strongly suggested Icahn used to enrich himself. (Icahn resigned as the story went to press, and he is now under federal investigation.) Late last month, meanwhile, special counsel Robert Mueller indicted two Trump campaign officials, former campaign chair Paul Manafort and his aide Rick Gates, accusing them of devising a $75 million money-laundering scheme.

There are many reasons why prosecutors are struggling to convict people who they accuse of corruption, and each case has its own unique dynamic. It’s difficult to imagine that the ground will shift significantly as long as the executive branch of the federal government is acting with such indifference to the appearance of clean hands.