US’s Adani Charges a Misstep in an Uncertain Time
Use of dollar hegemony to punish foreign interests no longer works
The fraud and bribery charges launched by the US Department of Justice against Gautam Adani and his colleagues may prove another example of US arrogance rebounding to its own disadvantage. It comes at a time when many nations, not just the US’s enemies, are reacting against the country’s extensive use of economic sanctions which, among other issues, cast doubt on the wisdom of foreign countries holding reserves in US dollars.
In contrast to US attempts to use the dollar’s global position, established 80 years ago, to punish foreigners, outgoing President Joe Biden has derided the International Criminal Court’s indictment for war crimes of Israeli Prime Minister Benjamin Netanyahu as well as continuing to arm its destruction of Gaza It has done nothing to stop Israel’s aggression in the West Bank, its vetoes of UN Resolutions for years having enabled the Israeli to consolidate their grip on seven million Semites known as Palestinians. The same Biden was earlier happy to hear of the ICC’s indictment of Russian President Vladimir Putin over Ukraine. One may reasonably dispute the principal of the court as an extra-national institution but Biden exhibits just the apparent double standard that so many nations resent.
It is no wonder that otherwise incoherent groups such as BRICs can find common ground in opposition to the US-led West. US institutional exceptionalism is also causing strains with its allies, western and otherwise. European nations have mostly supported Israel but find it hard to justify the extent of Gaza bombing and balk at the plans, apparently backed by several Trump appointees, of formal annexation of all or part of the West Bank. Major allies such as the UK, Germany, and France are all committed to supporting the ICC as a matter of principle.
Then there is India, seen by the US as a counter to China’s growing importance. Not only is Adani a friend of Prime Minister Narendra Modi, but the Adani group’s huge investments, or promises thereof, in Africa and elsewhere have been seen as providing some balance to China, particularly at a time when China is being more cautious about throwing money into development projects with little return or in chronically unstable countries. Kenya canceled a US$2.5 billion Adani airport project following the US indictments – though this may have been an excuse as the contract had been criticized for lack of transparency and Kenyan President William Ruto was just back from a visit to Beijing.
The issue is not whether or not the Adani group paid bribes to India officially for power offtake commitments with Adani Green’s solar power projects. It would hardly come as a surprise to suspect Indian state officials to be susceptible to “incentives”. It is about the over-reach attempts of US laws. The Foreign Corrupt Practices Act in effect extends US jurisdiction to bribery committee by foreigners outside the US. America’s legal presumptions are now highlighted by its election of a convicted criminal – and the likelihood that other serious indictments against Mr Trump will all now be dropped.
The Conspiracy to Commit Securities Fraud charge is even more convoluted. It relates to the alleged losses to US investors in an Adani Green money-raising in the US market. Of a US$750 million bond issue, US$175 million was taken up by US investors. The charge thus raises the issue of why any company would want to raise money in the US if they were to be then subject to this law and liable to be hit with such allegations relating to events in another country. They may in practice be very difficult to prosecute but the ability of the US Justice Department to inflict reputational damage is enormous.
The Trump administration may well cancel the indictments as the US will need India’s help more than ever if its ramps up anti-China moves. But such politically inspired intervention in what is supposed to be an impartial pursuit of an alleged crime would be widely perceived overseas as the hypocrisy and incoherence as well as arrogance of US institutions.
None of this is to doubt the good intentions of US prosecutors in pursuing corruption. Nor should it be seen as undermining US commitments hitherto to such principles as freedom of speech and the media, open politics, free and fair elections, and the benefits of open markets. The world has much to be grateful for these. Yet at a time when US relative strength is falling, due less to its own failings than the gains of others such as India and China, over-reach as illustrated by the Adani case is counter-productive. It would be better to have dumped any evidence in India’s lap and invited it to follow up.
The same deranged commentary from the same deluded writers, with the obligatory Jew-bashing slipped in for good measure. At least this site is consistent.
Leaving aside the obvious flaws in the writer's arguments, Atami stands accused by American officials of committing fraud on American investors, and using funds taken from those investors to commit other crimes, such as bribery of Kenyan officials. American investors have been adversely affected by these alleged crimes. Why should the American Justice Dept go after Atami?
Just to be clear, the same argument applies to the relevant government agency of every country. For example, the Japanese could/should take similar measures to protect investors from their country. The fact that America is almost the only country to stand up for its citizens and have a reasonable chance of success doesn't make the American government wrong.
Spot on, Philip!