A form of government in which the leaders, known as kleptocrats, use their political positions of power to gain or increase their personal wealth by stealing money and valuable resources from the countries they rule. While both forms of government imply a degree of corruption, kleptocracy differs from plutocracy—government by the wealthy, for the wealthy. Coming from the Ancient Greek word “klepto” meaning “theft” and “cracy” meaning “rule,” kleptocracy means “rule by thieves,” and is used to describe governments whose leaders misuse their power to steal from their people. Through acts of embezzlement, bribery, or outright misappropriation of public funds, kleptocrats enrich themselves and their families at the expense of the general population.
Often associated with dictatorships, oligarchies, or similar forms of autocratic and totalitarian governments, kleptocracies tend to develop in poorer countries in which the people lack the resources to prevent it. Kleptocrats typically drain the economies of the countries they rule by raising taxes on production and then using the tax revenue, rents from natural resources, and foreign aid contributions to increase their own wealth.
In anticipation of losing their power, kleptocrats typically devise intricate illegal international money laundering networks to protect their stolen assets by hiding them in secret foreign bank accounts. Increasingly, the processes of globalization are blamed for helping kleptocrats protect their finances and polish their reputations. Both illegal schemes like fake foreign “shell corporations” and legal international investments, such as luxury real-estate purchases, help kleptocracies launder their ill-gotten gains while extricating them from their country of origin.
Only recently did wealthy countries begin taking legal steps to stop the flow of this dirty money. Launched in 2010, for example, the United States Kleptocracy Asset Recovery Initiative empowers the Department of Justice to seize the ill-gotten funds of corrupt foreign leaders and return them to their country of origin. On a multi-national level, the United Nations Convention Against Corruption supports the prevention and punishment of kleptocracy and kleptocrats worldwide.
One unique characteristic of contemporary kleptocracies is their visibility. Unlike traditional international criminals, who strive to hide in the shadows, kleptocrats often maintain a high-profile status, publicly flaunting their wealth to convince the people of their economic wisdom and ability to lead the country.
A relatively new variation of kleptocracy, “narcokleptocracy” describes a society in which the government leaders are unduly influenced or controlled by criminals involved in the international trade of illegal drugs. For instance, the term was used in a 1988 report of the U.S. Senate Committee on Foreign Relations to describe the regime of Panamanian dictator Manuel Noriega in relationship to the Iran-Contra scandal.
Kleptocracy vs. Plutocracy
In contrast to a kleptocracy, a society governed by corrupt individuals who become rich and powerful by stealing from the people, a plutocracy is ruled either directly or indirectly by people who are already extremely wealthy when they come to power.
Unlike kleptocrats who commit actual crimes to enrich themselves individually by stealing from the people, plutocrats typically enact government policies intended to benefit the society’s entire wealthy class, often at the expense of the lower economic classes. While kleptocrats are always government officials who directly control the people, plutocrats may be extremely affluent private citizens who use their wealth to influence elected government officials, often through bribery.
While kleptocracies are typically found in authoritarian forms of governments, such as dictatorships, plutocracies are less likely to develop in democratic countries where the people have the power to vote the plutocrats out of office.
Examples of Kleptocratic Governments
Many countries in Africa and the Caribbean have been plundered by kleptocrats. Examples of notorious kleptocratic regimes include Congo (Zaire) under Joseph Mobutu, Haiti under “Baby Doc” Duvalier, Nicaragua under Anastasio Somoza, the Philippines under Ferdinand Marcos, and Nigeria under Sani Abacha.
- Congo (Zaire) – Joseph Mobutu declared himself president of Congo after coming to power in a coup d’etat on November 25, 1965. After taking power, Mobuto changed the name of Congo to the Republic of Zaire. Before being overthrown in May 1977, Mobutu committed widespread human rights violations and virtually decimated the country’s economy in the process of embezzling a personal fortune estimated at from $4-15 billion. Mobuto’s anti-communist stance helped him win financial support from Western powers, including the United States. Instead of fighting communism, Mobuto plundered these and other government funds while allowing the Zairian people to suffer in poverty.
- Haiti – In 1971, nineteen-year-old Jean-Claude “Baby Doc” Duvalier succeeded his equally kleptocratic father, Francois “Papa Doc” Duvalier in being proclaimed president of Haiti for life. During his brutal—and lucrative—14-year reign, Baby Doc was believed to have stolen as much as $800 million of Haiti’s money. While allowing the Haitian people to suffer the worst poverty in the Americas, Baby Doc maintained a notoriously luxurious lifestyle, including his government-funded $ 2 million wedding in 1980.
- Nicaragua – Anastasio Somoza assumed the presidency of Nicaragua in January 1937. Succeeded in 1956 by his son Luis Somoza Debayle, the Somoza family would spend the next 40 years accumulating vast wealth through bribery, corporate monopolies, bogus real estate deals, and stealing from foreign aid. After the capital city of Managua was devastated by an earthquake on December 23, 1972, Nicaragua received hundreds of millions of dollars in foreign aid, including $80 million from the U.S. alone. However, the Somozas’ proposals to rebuild the city were never implemented. Instead, businesses were forced to relocate onto land owned by the family. By 1977, the Somoza’s wealth reached an estimated $533 million, or about 33% of Nicaragua’s total economic worth.
- Philippines – As president of the Philippines from 1966 to 1986, Ferdinand Marcos established an authoritarian regime that has been called the most corrupt in the island nation’s history. After his reign, evidence came to light that during his years in power Marcos, his family, and associates had stolen billions of dollars through embezzlement, bribery, and other corrupt practices. According to the quasi-judicial Philippine Presidential Commission on Good Government, the Marcos family illegally amassed a fortune valued at from $5 billion to $10 billion. Marcos’ wife Imelda, when questioned about her exceptionally opulent lifestyle was quoted as having said, “We practically own everything in the Philippines, from electricity, telecommunications, airlines, banking, beer and tobacco, newspaper publishing, television stations, shipping, oil and mining, hotels and beach resorts, down to coconut milling, small farms, real estate, and insurance.”
- Nigeria – General Sani Abacha served as military head of state of Nigeria for just five years, from 1993 until his unexplained death in 1998. Along with numerous human rights violations, Abacha and his associates embezzled an estimated $1 billion to $5 billion from the Central Bank of Nigeria by falsely claiming the money was needed for national security. With the help of his son Mohammed Abacha and best friend Alhaji Sada, Abacha conspired to hide the stolen funds in bank accounts in the United Kingdom and the United States. In 2014, the U.S. Department of Justice ordered more than $480 million in funds illegally deposited in bank accounts around the world by Abacha and his co-conspirators returned to the Nigerian government.
Sources and Reference
- Sharman, Jason. “On Kleptocracy: Mansions. Private jets. Art. Handbags. Cash.” University of Cambridge, https://www.cam.ac.uk/kleptocracy.
- Acemoglu, Daron; Verdier, Thierry. “Kleptocracy and Divide-and-Rule: A Model of Personal Rule.” Massachusetts Institute of Technology, https://economics.mit.edu/files/4462.
- Cooley, Alexander. “The Rise of Kleptocracy: Laundering Cash, Whitewashing Reputations.” Journal of Democracy, January 2018, https://www.journalofdemocracy.org/articles/the-rise-of-kleptocracy-laundering-cash-whitewashing-reputations/.
- Engelberg, Stephen. “Noriega: A Skilled Dealer With U.S.” The New York Times, February 7, 1988, https://www.nytimes.com/1988/02/07/world/noriega-a-skilled-dealer-with-us.html.
- “Kleptocracy and Anti-Communism: When Mobutu Ruled Zaire.” Association for Diplomatic Studies & Training, https://adst.org/2016/09/kleptocracy-and-anti-communism-when-mobutu-ruled-zaire/.
- Ferguson, James. “Papa Doc, Baby Doc: Haiti and the Duvaliers.” Blackwell Pub, December 1, 1988, ISBN-10: 0631165797.
- Riding, Alan. “Nicaraguans Accused of Profiteering on Help the U. S. Sent After Quake.” The New York Times, March 23, 1977, https://www.nytimes.com/1977/03/23/archives/nicaraguans-accused-of-profiteering-on-help-the-us-sent-after-quake.html.
- Mogato, Manuel. “Philippines still seeks $1 billion in Marcos wealth 30 years after his ouster.” Reuters, February 24, 2016, https://www.reuters.com/article/us-philippines-marcos-idUSKCN0VX0U5.
- Punongbayan, JC. “”Marcos plundered to ‘protect’ the economy? Makes no economic sense.” Rappler, September 11, 2017, https://www.rappler.com/voices/thought-leaders/ferdinand-marcos-plunder-philippine-economy-no-economic-sense.
- “Late Nigerian Dictator Looted Nearly $500 Million, Swiss Say.” The New York Times, August 19, 2004, https://www.nytimes.com/2004/08/19/world/late-nigerian-dictator-looted-nearly-500-million-swiss-say.html.
- “U.S. Forfeits Over $480 Million Stolen by Former Nigerian Dictator in Largest Forfeiture Ever Obtained Through a Kleptocracy Action.” The United States Department of Justice, August 7, 2014, https://www.justice.gov/opa/pr/us-forfeits-over-480-million-stolen-former-nigerian-dictator-largest-forfeiture-ever-obtained.