Aaron Bornstein: Key Lessons of the BOTA Foundation
Wednesday, April 5, 2017 at 2:58PM
Aaron Bornstein in General Sani Abacha, Gulnara Karimova, James Giffen, Nigeria, Switzerland, The BOTA Foundation, Uzbekistan

In my recent previous posts on the BOTA Foundation, I recapped its history and provided what I think were some of the critical factors which led it to be recognized as the most successful example the United States Department of Justice has had to date in returning recovered corruption assets. But what are the lessons from BOTA that might be applicable to future foundations established for the same purpose?

As talks drag on between the DoJ and Uzbekistan government on the disposition of close to one billion dollars from the Karimova case, and with the expected return from the United States of over $400 million to Nigeria from funds Sani Abacha looted, its critical to understand the important lessons which BOTA provides. These include:

Lesson 1: BOTA provides "proof of concept" for a foundation model for safely and responsibly returning corruption assets to a country’s needy citizens. 

BOTA was established to return $115 million to poor children, youth and their mothers in Kazakhstan, using a non-governmental mechanism, in an accountable and transparent way and it did just that. While any “future BOTA” would have to be customized to the culture, needs and political realities of the country where the money is being returned, the fact that BOTA did what it was established to do demonstrates it can be done, and done well.  

Lesson 2: Assets can be externally managed and held outside of the host country, and provided “as needed.”

BOTA’s funds came from a Swiss bank account which was frozen at the request of the DOJ in connection to the James Giffen FPCA case against him. The 2007 Memorandum of Understanding between the Governments of Switzerland, the U.S., and Kazakhstan to establish BOTA stipulated that funds would be parceled out every six months once the Foundation began its work, based on satisfactory progress and a Board and World Bank approved workplan. This mitigated the risk of the bulk of the money disappearing in case BOTA failed for any reason, or falling into the hands of corrupt politicians in case there was a leadership change. 

The “holding vat” approach is particularly relevant to a country like Uzbekistan, where there are well-founded fears that the current government would find a way to get its hands on the close to one billion dollars which is connected to the Karimova asset return.

Lesson 3: “Honest brokers” can be highly useful in putting “Philanthropication through Privatization” deals together.

A key actor in the creation of BOTA was the World Bank, which played the role of "honest broker" among the three governments involved in the creation of the foundation and then lent a crucial hand both in fashioning the resulting Memorandum of Understanding and in overseeing the day-to-day operation of the resulting foundation. 

While the World Bank has special features that make it an ideal broker in these situations by virtue of its reputation for probity and the huge stake that countries have in its good will and financial assistance, other multilateral organizations could also step up to play a similar role to get “new BOTAs” going. These include the United Nations Development Program, the OECD, the IMF, the Asian Development Bank, the Inter-American Development Bank, and the European Central Bank, to name just a few. 

Lesson 4: Civil society should have a seat at the table.

BOTA was created for several reasons, including "pressure" felt by Kazakhstan's President Nazerbayev from civil society activists, to return money associated with corruption to benefit the country's poor.  Subsequently five representatives of civil society were nominated by BOTA's three founding countries to be on the board of trustees.  The Board, unfortunately, was not a well-functioning body (for several reasons explored in my case study of BOTA) and BOTA's governance suffered as a result. 

BOTA’s experience shows that the question of maximizing the effectiveness of civil society’s involvement is key, rather than whether it's possible or sensible to involve civil society in the process of asset return and its oversight. 

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Part One of this series is here, Part Two is here, and Part Three is here.

To learn more about BOTA, including several additional important lessons it provides, please see my   recent case study, “The BOTA Foundation: A Model for the Safe Return of Stolen Assets?”, which can be found here.

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Aaron Bornstein was the Executive Director of BOTA Foundation, employed by a Washington, D.C. based NGO called IREX, from 2011 until its close in 2014. He has worked in eight different countries on a variety of anti-corruption, institution building, poverty alleviation, and other projects. Currently available for new consulting assignments or speaking engagements on stolen asset return, Aaron can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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