India and America -- Seeking a Special Relationship: TDR #19, 25 July 2024
THE DEKLEPTOCRACY REPORT
July 25, 2024
Welcome to The Dekleptocracy Report! The Dekleptocracy Project (TDP) is a 501(c)(3) following the authoritarian money from Virginia. We're on a mission to show how existing levers of accountability can protect democracy and prevent authoritarians, their networks, and enablers from exploiting or circumventing the US system. As always, please sign up and forward this newsletter.
BOTTOM LINE UP FRONT
Welcome to our 19th newsletter! We hope this finds many of our readers away from the office and enjoying the summer in the Northern Hemisphere at least. In this issue, following Indian Prime Minister Narendra Modi’s recent visit to Moscow, we look at the complicated US-India relationship, which we feel doesn’t get the attention it deserves amid US-China and US-Russia bust-ups. Early in his third term, Prime Minister Modi leads the world’s largest democracy and is a key US partner in the Indo-Pacific. But we see two key flashpoints: Modi’s foreign policy includes a significant energy trade with Russia, and the relationship with China may be thawing. Meanwhile, his domestic policies are often in confrontation with American values, and his party’s promotion of Hindu nationalism – both at home and in the US – is increasingly divisive within the Indian-American and wider South Asian American community. We are indebted to Siddhant Kishore, an analyst focusing on the Middle East and South Asia at a DC-based national security research organization, for his help in researching this topic.
In the Digest, we welcome this week’s resignation of Senator Robert Menendez (D-NJ) following his conviction on (count ‘em) 16 counts, including bribery and being a foreign agent. It’s worth noting that federal prosecutors dropped charges against him in 2018, easing his way to re-election that November because of a 2016 Supreme Court ruling that raised the bar for prosecuting public officials for corruption.
Which leads us to our first story in Qui Custodiet, where we look at a recent Supreme Court ruling that (checks notes) lifted the bar for prosecuting public corruption. In this case, the majority ruled in favor of an Indiana mayor who received a gratuity after awarding a public contract because he only accepted it after the decision was announced. One might speculate that officials can add a screen to the desks in their Congressional offices that, like in coffee shops, allows you to add a tip for good service. Meanwhile, federal court last week found Guo Wengui, a prominent opponent of Beijing’s communist government, guilty of 12 counts of conspiracy and fraud in a cryptocurrency scam, in another blow to overseas Chinese activists after charges last month against the Epoch Times media group.
In Around the World we look at Argentinian President Javier Milei’s eyebrow-raising decision to appoint a judge to that country’s Supreme Court with a track record of corruption issues. Amid an economic meltdown inherited from the previous government, the choice puts his centerpiece anti-corruption drive under question. And we preview the agenda of incoming EU foreign policy chief Kaja Kallas, the first top envoy from the crop of ten states that joined the bloc in 2004. While her job will be about a lot more than just Russia, she brings deep personal credibility to this issue. China, Iran and the Middle East will remain other thorny items on her list.
INDIA AND AMERICA: SEEKING A SPECIAL RELATIONSHIP
The US and India are the world’s two largest democracies by population. They have much in common. Americans of Indian descent are increasingly prominent not only in American society but also in US politics on both sides of the aisle. The late mother of Vice President Kamala Harris, who appears certain to become the Democratic nominee for president, moved to the US from Tamil Nadu in 1958, while last week’s Republican National Convention featured an address by former candidate Vivek Ramaswamy, himself the son of Indian immigrants. For his part, Donald Trump polled strongly in India while president and enjoyed a purported “bromance” with Prime Minister Narendra Modi during the final months of his term, and his VP pick is married to an Indian-American, Usha Vance. In the meantime, both the US and India have deeply contentious relationships with China, with Sino-Indian forces clashing regularly in a disputed area of the Himalayas. Yet, as evidenced by his trip to Russia earlier this month, Prime Minister Modi’s ideology and administration alike pose a significant challenge for US policymakers. His domestic policies are in confrontation with American values, and his foreign policy presents, at times, direct challenges to key US policies, including the desire to contain Russia.
The first hurdle for the US is confronting the impact of Modi’s sectarian policies on India itself. The ruling Bharatiya Janata Party (BJP) – which bills itself as “the world’s largest political party” – espouses an ideology of Hindutva, or Hindu nationalism, and seeks to refashion Indian society along majority-identitarian lines. In the words of Amnesty International, over the past decade, Modi has “presided over a period of rapid deterioration of human rights protections in India, including increasing violence against religious minorities, shrinking civil society space, and the criminalization of dissent.” Modi’s consolidation of control over India’s media environment has prompted accusations of attacks on press freedom. There are whiffs of corruption as well, including his close relationship with India’s two richest men, Gautam Adani and Mukesh Ambani (whose son’s March pre-wedding party was attended by Mark Zuckerberg, Bill Gates, Rihanna, Ivanka Trump and Jared Kushner). This has been accompanied by allegations of fraud in their dealings with the Indian government.
Still, while increasingly illiberal, India’s democracy continues to function according to most parameters. Notably, Freedom House ranks India significantly higher on its global freedom index than many of our close allies, including Ukraine, for instance. Observers have to reckon with the fact that Modi and his platform remain popular if divisive. While the BJP lost its electoral majority in parliament for the first time since 2014 in June’s elections, the largest in global history, providing a shot in the arm for Indian democracy, Modi continues to rule in coalition.
American Dreams
The Modi government’s controversial activity goes beyond India’s borders. Although the US and India have a longtime shared enthusiasm for targeted killings of alleged terrorists in Pakistan, the US has been deeply concerned by the Indian security services’ alleged international campaign of assassination against people dubbed to be Sikh extremists living in Western countries. This included a failed plot to kill a US citizen on American soil, echoing similar actions by Iran. The campaign also led to a killing in Canada and a trial of Indian nationals there that has poisoned relations between those two countries, and a “nest of spies” from India’s foreign intelligence service was recently expelled from Quad partner Australia, accused of monitoring the diaspora community and attempting to steal state secrets.
A less dramatic but potentially more lasting challenge is that of influence operations. Both the US and India feature toxic domestic politics ripe for exploitation. For the Indian-American community, the second largest modern immigrant community in the US, Modi represents a challenge to a group that is politically diverse and, according to polling, often bristles at the “Indian-American” label. However, for Modi, as for any foreign leader, the diaspora community represents a potential vector for influence on US policy. Since Modi’s rise to power, Hindu nationalism has risen among communities of Indian descent within the US.
Writing last year ahead of Modi’s state visit to the US, Aparna Gopalan provided a not-uncontroversial analysis of how US groups allied with BJP, such as the Hindu-American Foundation (HAF), have sought to model congressional activism on the American Jewish Committee (AJC) and the American Israel Public Affairs Committee (AIPAC). This relationship is amplified by practical Israeli-Indian ties – Israel has exported nearly US$3 billion in arms to India over the past decade. But as Gopalan argues, it also appears that Modi’s US allies are conflating legitimate concerns raised by non-Hindu Indian-Americans, for example, over the symbol of a bulldozer (evoking the destruction of Muslim homes) used in a New Jersey town in 2022, with genuine anti-Hindu and anti-Indian sentiment. The latter is very real, by the way: polling in 2020 indicated that 50% of Indian Americans had experienced some form of overt discrimination in the previous 12 months.
With friends like these...
Modi’s foreign policy was a centerpiece of his successful campaign this spring for a third term, with a fifth of Indian respondents saying that “raising India's global stature” has been his key achievement. This ranges from becoming the world’s fifth largest economy to hosting the G20 summit in 2023 to becoming the first country to land a spacecraft at the Moon's south pole. Part of this profile raising includes his recent visit to Russia, ostensibly for a conference. His warm welcome in Moscow, including receipt of a state medal, reflects genuine gratitude from Vladimir Putin that India has maneuvered around US and G7 sanctions and a price cap on Russian oil, providing a crucial source of income for Russia.
India had close ties to the Soviet Union during the Cold War and equipped its armed forces largely with Soviet weapons. The trade with Russia in arms and, perhaps more importantly, spare parts has continued to this day. However, India is seeking to pivot away from reliance on Russian weapons (having witnessed their lackluster performance in Ukraine), diversifying its stocks with equipment from Israel, France, and the US. Energy is a different story. Arguably Modi is showing deft statecraft playing the US and Russia off against one another. As a developing country with massive energy needs, India has a legitimate interest in sourcing the cheapest energy it can get. At the same time, one of the beneficiaries of the Russia-India energy trade is Reliance Industries – headed by his ally Mukesh Ambani, raising questions of priority.
And the China relationship is more complex than it initially appears. Yes, Indians now perceive China, rather than Pakistan, as the greatest threat. This stems from the real possibility, following deadly hand-to-hand clashes in 2020 in the Himalayas, that an increasingly aggressive China may take a page from its South China Sea playbook and apply it to its long border with India. Concerns in New Delhi about Moscow’s ever-closer relationship with Beijing appear to be a significant factor in its efforts to keep Russia close even as it deepens its partnership with Washington in the Indo-Pacific. But there are more mundane economic incentives for Delhi to find a way to work with Beijing. Notably, the most recent figures for India-China bilateral trade, both imports and exports, in 2023-24 totaled US$118 billion, demonstrating a solid relationship, especially in electronics, and room to grow. Many observers think the political deep freeze following the 2020 skirmishes is coming to an end amid this burgeoning trade. The fact that the conflict appears narrowly territorial – rather than an ideologically-tinged competition – may offer both sides an off-ramp. By comparison, China and Russia also have land disputes, but both appear keen to ignore them in favor of business and shared geopolitical interests.
Potentially, India’s most contentious relationship from the US perspective is cooperation with Iran. In May 2024, the Indian government signed a deal to take over operations at Chabahar port on the Gulf of Oman. A deal between a Hindu nationalist Indian government and the Islamic Republic may appear incongruous on the surface, but Iran represents a tempting geopolitical diversification for India. Closer ties with Iran and access to the Persian Gulf and Caspian littoral states mean better access to Afghanistan, a policy priority for successive Indian governments, as well as better access to the natural resources of Central Asia. The US has voiced its displeasure over the Chabahar port deal, threatening sanctions. As with Russia, India appears set to work around US sanctions without direct confrontation.
Shared destinies
As the world’s largest democracy, the de facto leader of the Global South, and a rising military power, US policymakers have no option but to work with India. Buttressed by cultural, economic, and security ties, this relationship should and will remain central for both countries. At the same time, the US and other allies need to be blunt and substantive in their opposition to assassinations of dissidents worldwide, the Indian ruling party’s actions against religious minorities at home, especially the country’s 200 million Muslims, and its stifling of civil liberties. Finding ways to give India a reliable, long-term alternative to Russian oil – for instance, by working to accelerate India’s green energy transition while also finding competitive and abundant alternative sources of oil and gas – should be a priority. The US and allies can also work to supplant Russia as an Indian defense supplier, as reflected in a recent engine co-production deal. Both countries have signed an expansive deal to cooperate in key segments, like semiconductors, where, notably, the US has active export bans or other measures against China.
In the meantime, political and community leaders, policymakers, and average citizens in the US should be aware of the domestic growth of Hindu nationalism. There is nothing fundamentally illegal or nefarious about the activities of BJP-aligned organizations doing advocacy work in the US, nor anything uniquely threatening about Hindutva. There are far more dangerous religious-nationalist ideologies in the US today. Nonetheless, Hindu nationalism, as evidenced by the backlash after the appearance of the bulldozer symbol at the 2022 India Day parade in Edison, NJ (and the backlash to the backlash), can leave other South Asians feeling threatened. As the vibrant Indian-American community grows, policymakers need to listen to community representatives from different faiths to keep India’s sectarian troubles out of American towns.
Menendez conviction and resignation closes sorry chapter
Senator Robert Menendez (D-NJ) this week announced his resignation from the Senate, effective August 20, following his 16-count federal bribery conviction on July 17, even as he vowed to appeal the verdict. In a letter to colleagues and the governor of NJ, Menendez said: “I do not want the Senate to be involved in a lengthy process that will detract from its important work.” The statement is a relief as technically nothing barred Menendez from seeking re-election to a fourth term, even as the Senate leadership vowed to kick him out if he did not step down. He had hedged his bets by filing to run as an independent in June, in the middle of the trial. Notably, voters re-elected Menendez in 2018 when he previously faced corruption charges. Six years ago, federal prosecutors dropped the charges in the wake of a landmark 2016 Supreme Court ruling that significantly raised the bar for convictions as it drastically limited the kinds of “official acts” performed by lawmakers that can constitute bribery or corruption (and they raised the bar again in recent weeks, see below).
This time around, however, no bar-raising was going to stop prosecutors. This case involved gold bars, as well as cash, in scenes more reminiscent of a Russian warlord or defense official than a senior senator who, until last year, was chairman of the powerful Committee on Foreign Relations. That the senior senator from NJ appeared to keep the resignation option open for nearly a week, threatening to crash his own party’s public anointment of Kamala Harris as the presumptive presidential nominee, suggested the veteran Jersey politician was still looking for an angle despite facing more than 200 years in prison. In the meantime, the conviction should provoke fresh scrutiny about foreign influence in Congress – among other charges, Menendez was found guilty of acting as a foreign agent for Egypt. On a state level, NJ Democrats may want to ask themselves why they committed to his reelection in 2018 when ethics concerns were already a very public issue. A clear answer is that a senior senator’s perks and committee assignments are seen as good for his home state. But this conviction is a black eye for his party and the great state of New Jersey.
Supreme Court Raises the bar for public corruption prosecutions (again)
As covered above, a landmark 2016 Supreme Court ruling (McDonnell v. United States) led prosecutors to throw out earlier corruption charges against Robert Menendez. Observers think the highest court has made life easier once again for corrupt officials with a decision published at the end of last month. The court, ruling 6-3 on ideological lines (with liberal justices dissenting), found that the law criminalizes bribes accepted before the relevant official act, not rewards or gratuities provided after such an act. The case involved an Indiana mayor who took US$13,000 from a trucking company after awarding it US$1 million in business. Writing for the majority, Justice Brett Kavanaugh explained: “Some gratuities can be problematic. Others are commonplace and might be innocuous.” The dissent said this reading willfully ignored the wording of public corruption legislation. The case appears to open the door to tipping public officials and highlights that the current court – members of which are under scrutiny for failing to disclose outside income and gifts – has made it much easier for public officials to receive gifts and payment. Lawmakers need to respond with legislation that works with and around these expansive definitions of legal payments. As the Menendez case shows, pro-corruption shouldn’t be an ideological or party position.
Feds convict Chinese opposition businessman
A federal court last week found Guo Wengui, a prominent opponent of Beijing’s communist government, guilty of 12 counts of conspiracy and fraud. He is alleged to have stolen hundreds of millions of dollars from thousands of online followers. The fraud involved a five-year scheme that guaranteed online investors that they would not lose money in cryptocurrency investments. Steve Bannon, a former advisor to Donald Trump, promoted one of Gou’s projects in 2018. Notably, Guo’s defense said that his public flaunting of extreme wealth was, in fact, his critique of the Chinese Communist Party and its ideology. A successful real estate developer in China, Guo fled the country a decade ago. It’s been a tough 2024 for China’s more outspoken opponents in the US. In June, the CFO of the Epoch Times, a once niche newspaper run by dissidents that has become a major, multi-lingual, multi-platform media holding (more adept at promoting conspiracy theories than combatting Chinese communists), was charged with money laundering. The regime in Beijing is no doubt enjoying watching its opponents discredit themselves.
Argentina’s anti-corruption drive in question amid Supreme Court nomination
Argentinian voters elected fiery populist Javier Milei late last year because he promised to make drastic changes, including a crackdown on corruption. The country faces grim months ahead. The International Monetary Fund lowered its 2024 growth outlook for Argentina and now projects a 3.5% contraction. A stunning 57% of the population technically lives in poverty, while annual inflation exceeds 270%. Tackling corruption is one of the urgent tasks required to pull the country out of crisis and it is a factor that discredited the previous government both domestically and in the eyes of allies, including the US. This makes his choice of nominee for the country’s Supreme Court, Ariel Lijo, both bizarre and dispiriting. As the AP wrote earlier this week, beyond a lack of practical and academic legal experience, “he has been accused of conspiracy, money laundering and illicit enrichment, and has come under scrutiny for more ethics violations than almost any other judge in his court’s history.” Human Rights Watch has called for his withdrawal. But Milei, who first made the choice in late May and has not backed down as he has gone to Congress in recent days to get key legislation passed, ironically including the Ficha Limpia (Clean Record) bill, which would bar people with corruption convictions from political office. Analysts see his insistence as a response to political isolation and the courts suspending key parts of his economic plan. The US and multilateral agencies will likely stay clear of the specific issue of Milei’s Supreme Court picks. But as the country’s crisis mounts and even surpasses Venezuela on some dire indicators, like inflation, Milei’s administration will need every ally it can find and credibility on fighting corruption.
Kaja Kallas sets out agenda as EU’s top diplomat
As Estonian prime minister, Kaja Kallas raised the profile of the country of 1.4 million people with a hardline stance on Russian aggression and supported both Ukraine and NATO, which rivaled even Poland and fellow Balts in terms of intensity. Russia has even placed her on a wanted list for her role in removing Soviet-era monuments. As she assumes the role of EU foreign policy chief -- High Representative of the European Union for Foreign Affairs and Security Policy in EU speak -- the Russian headache won’t go away. This week, her predecessor, Joseph Borrell stripped Hungary of the right to host the next meeting of foreign and defense ministers over its stance on the war in Ukraine. She will have to fight other fires. As the Jerusalem Post noted recently, the Israeli government saw Borrell as an unhelpful critic. Kallas reportedly supports a two-state solution and has pointed to the dire humanitarian situation in Gaza. Still, Estonia’s prime minister has supported Israel’s right to self-defense and condemned Iran’s attacks earlier this summer. Analysts see that she also has a primary challenge in helping define the EU approach to China – which has doggedly sought to build ties bilaterally with individual EU members like France and Hungary – as well as Iran, following its recent elections. Her appointment was reportedly part of a broader deal that saw her bow out of contention for NATO chief, but she recently said that the EU needed to play a central role in boosting the bloc’s (and by extension, NATO’s) defense industry. Kallas’s appointment as the sixth EU foreign policy chief is an important one, as she is the first from the “new” EU states (Estonia was part of the “big bang” enlargement that took place 20 years ago). This gives her the valuable perspective of being from a country with living memory of Russian occupation – the Soviets deported her mother as a baby to Siberia along with 20,000 other Estonians. She represents a generation that lived through wrenching but peaceful economic and political transition and led a country that is a global success story for Europe.