Egypt Shows the Dangers of Tolerating Corruption

Barack Obama spent a great deal of time in his presidential campaign vowing to change the way in which Washington does business and promised to usher in a new era of transparency. Now, as details pour out regarding Egyptian President Hosni Mubarak's notorious track record of corruption, and with that issue clearly one motivation behind protests (as was the case in Tunisia) it might behoove the president of hope and change to look at the dangers of turning a blind eye to the corruption of key allies. 

Egypt ranked as number 111 on Transparency International’s Corruption Perception Index in 2009 and, according to business-anti-corruption.com, observers agree that "corruption in Egypt is pervasive and that the use of wasta ('mediation' or 'influence' in Arabic) is essential for doing business."

For decades, under both Republican and Democratic administrations, Egypt has received billions of dollars of U.S. aid, and is only second to Israel in the amount of annual aid it receives -- currently receiving $1.5 billion a year. It's long been noted that the U.S. overlooks Murbarak's terrible human rights record as part of it's Realpolitik strategy in the region. But U.S. leaders have been equally indulgent of the systemic corruption presided over by the Egyptian president -- corruption that fed economic stagnation and created conditions that were ripe for mass revolt.

More and more, this is beginning to look like a systemic foreign policy failure that reminds us of the faulty logic of the notorious Kirkpatrick Doctrine. This policy, expounded by U.S. Ambassador to the United Nations Jeane Kirkpatrick in the early 1980s is based on her 1979 essay, "Dictatorships and Double Standard," in which the United States supported brutish dictatorial regimes that were anti-communist. It appears as though that doctrine still holds weight in foreign policy circles, only now it seems to apply to brutish and corrupt pro-west regimes that prove valuable to allies in the so-called "war on terror." Egypt is a great example.

As usual, you can thank influence peddlers in Washington for helping prevent any kind of critical conversation about Egypt's problems, including its rampant corruption. According to a recent article in Salon, a total of seven firms are currently registered as foreign agents for Egypt, notably, the Podesta Group. The Podesta Group is particularly interesting given its close ties to the Democratic Party and the Obama Administration. The Podesta group, owned and operated by Tony Podesta, is retained by many top corporations, including Lockheed Martin, Wal-mart, and BP. Tony Podesta's bio boasts that "if you want something done in Washington, DC, you go to Tony Podesta."

The Podesta Group is heavily involved in the affairs of Egypt, counseling it "on U.S. policies of concern, activities in Congress and the Executive branch, and developments on the U.S. political scene generally," according to forms filed with the Justice Department in 2009. In fact, leaked records show that Podesta has personally met with members of Congress, governors, and other power brokers in recent years to discuss military assistance to Egypt.

Podesta has been rewarded handsomely for his dealings with the Mubarak regime. For instance, The Egyptian government in 2007 signed a deal to pay $1.1 million annually, plus expenses, to the PLM Group, which was a joint venture of the Podesta Group and the Republican firm The Livingston Group.

With protests in Egypt growing more intense by the day, one has to wonder how much longer firms such as the Podesta Group can maintain their shady ties to a corrupt regime on the brink of dissolution.