Dirty populists

The election left one of the world’s largest countries deeply divided, handing the presidency to a military-loving, minority-bullying, media-bashing firebrand promising to smash a corrupt establishment.
I am not talking about the 2016 US presidential election that put Donald Trump in power, but rather the 2018 election in Brazil, won by the so-called Trump of the Tropics, Jair Bolsonaro, who was formally inaugurated on January 1.

Bolsonaro joins the growing ranks of supposedly transformative leaders – including Trump, Hungarian Prime Minister Viktor Orbán, and de facto Polish leader Jarosław Kaczyński – who won power by railing against the establishment and vowing to end systemic corruption. Will he also join Trump, Orbán, and to a lesser extent Kaczyński, in overseeing the spread of new kinds of corruption, while attempting to reshape governance to entrench his own power?

Despite repeatedly pledging to “drain the swamp,” Trump has enabled a level of corruption that is arguably unprecedented in American history, affecting large swaths of the federal bureaucracy. He has failed to fill open positions, slashed budgets, bypassed established bureaucratic procedures and protocols, and sidelined diplomats. He has largely spared the military, though here, too, he frequently denigrates his commanders’ expertise in favor of his gut feelings.

When the state apparatus is eviscerated, governance can become more informal, policy more personalized, executive power more dominant, and loyalty to the leader more important. Trump has installed family members as official and unofficial advisers, placed senior aides in agencies to monitor loyalty, and issued more executive orders in his first year than any president in a half-century.

Beyond blatant nepotism, cronyism, and abuses of office by Trump appointees, this has created new opportunities for “shadow lobbyists,” unregistered influencers who fail to disclose their ties to corporations or even foreign governments. For example, Trump’s informal adviser Newt Gingrich has lobbied for health-care companies and mortgage giant Fannie Mae. Trump’s former consigliere Michael Cohen was paid for “advice” by corporations like AT&T and Novartis. Both former National Security Adviser Michael Flynn and Trump campaign chairman Paul Manafort were found to have engaged in foreign lobbying tied to Russia and Turkey.

Then there are what I call the “shadow elites”: establishment players who fill intertwined, opaque, and not fully disclosed roles across the public and private spheres. For example, retired generals and admirals who sit on government defense advisory boards can help shape defense agendas while using their access and information to clinch military contracts for the consulting firms they own or the defense companies for which they work.
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Similarly, Trump-appointed officials often have deep ties to the industry they are supposed to be policing – including education, finance, and especially the energy sector – or are expressly antagonistic toward their own agencies. And the president himself has fused the Trump brand with the office he holds, failing to divest fully from his business, even as he makes decisions (official and otherwise) that clearly affect its bottom line.

Of course, American democracy is still comparatively entrenched, and the Trump administration has faced significant pushback from the judiciary and media (both of which he has repeatedly attacked). That is not quite the case in Hungary under Orbán, the first of few world leaders to endorse Trump’s candidacy, or in Poland under Kaczyński. Whereas Trump has facilitated corruption by weakening government, Orbán and Kaczyński have focused on seizing control, changing the rules, and making government institutions their own.

In Hungary, Orbán loyalists have been put in charge of several independent government-monitoring bodies, and the judiciary has been stacked, enabling Orbán to rewrite the constitution as he sees fit. With few institutional constraints left, Orbán has fostered what Freedom House describes as “large-scale and unpunished” corruption.

When Orbán’s Fidesz party won a decisive victory in 2010, he proclaimed it a day of “revolution,” because the Hungarian people had “ousted the regime of oligarchs who misused their power.” Yet Orbán has presided over the emergence of a new generation of oligarchs, as he has coordinated with political insiders to deploy state power and resources for the benefit of personal friends and political allies.

Transparency International estimates that 70% of Hungary’s public procurement is now “infected” by corruption, possibly costing the country as much as 1% of GDP. Beyond Hungary’s own resources, Orbán has diverted to his cronies billions of euros from the European Union, which is now demanding at least partial repayment.

For Orbán, however, the goal has always been to ensure that Hungary’s power players are on his side. And the plan has been working. For example, Orbán-connected oligarchs have secured “complete control and domination of the regional newspaper market.”

Poland’s ruling Law and Justice (PiS) party, led by Kaczyński, who has no official position in government, has similarly set about laying siege to government institutions. Like Fidesz, PiS presented itself as an antidote to corruption, which helped it achieve a decisive electoral victory in 2015. But, though the government has pursued some legitimate anti-corruption initiatives, such as a crackdown on tax fraud, it has also wielded corruption accusations as a weapon against political opponents, making much of its anti-corruption agenda look more like an authoritarian power grab.

Meanwhile, PiS has attempted to assert control over the civil service, the judiciary, and state-controlled media. PiS changed the civil service law to usher out career professionals, installing many loyalists in their place, and replaced many of the heads of state-owned companies.

Trusted Kaczyński loyalists now make major decisions in Poland, with little accountability. Against this background, a current banking scandal involving a top regulator who appears to have solicited a bribe from a leading banker suggests institutional involvement of PiS- and Kaczyński-linked players and underscores the institutional damage they have done.

Six thousand miles away, Brazil has just inaugurated Bolsonaro, who has echoed these leaders in promising that “government departments will not be led by anyone who’s been convicted of corruption.” Judging by Bolsonaro’s populist counterparts elsewhere, however, Brazilians should not hold their breath.