NEWS RELEASE | The BOTA Foundation: A Model for the Safe Return of Stolen Assets?

By on January 20, 2017

Contact: Chelsea Newhouse
We are pleased to announce the publication of The BOTA Foundation: A Model for the Safe Return of Stolen Assets?, the first in a series of reports from the Philanthropication thru Privatization Project (PtP) examining important examples of significant charitable endowments that have resulted from the sale or other transformation of government-owned or -controlled assets.
Prepared by international development specialist Aaron Bornstein and edited with an Introduction by PtP Project Director and Johns Hopkins University Professor Dr. Lester M. Salamon, this report analyzes the major example to date of the application of the PtP concept to stolen or disputed assets: the case of the BOTA Foundation in Kazakhstan, which arose from the seizure of assets totaling US$84 million that an American citizen secured from U.S. oil companies in the 1990s and channeled to high level officials in the Government of Kazakhstan in order to secure oil drilling rights in the Caspian Sea.
As such, it profiles one of over 550 charitable foundations that have emerged from some type of transaction transforming a government-owned or government-controlled asset into a charitable foundation. In the process, it helps point the way to the application of the PtP concept to other stolen asset restitution cases, as well as to other types of transactions involving state-owned or –controlled assets.

What is PtP?

Philanthropication thru Privatization—or PtP—is the name we have given to what turns out to be a wide assortment of privatization-type processes through which government-owned or controlled assets have been transformed in whole or in part into charitable endowments managed by private foundations. Such transactions have taken six different forms:

  1. Sale of state-owned enterprises;
  2. Transfer of ownership or control of other government assets (e.g. buildings, airports, cultural institutions);
  3. Streams of revenue generated by state-controlled business activities (e.g., lotteries, mining activities);
  4. Debt swaps;
  5. Conversions of quasi-public organizations into private for-profit businesses; and
  6. Restitution of stolen or stranded assets.

By vesting these resources in foundations, PtP offers a way to ensure that a nation’s people receive some direct benefits from such transactions that transform public assets into private hands. As noted, the PtP Project has identified over 550 foundations that have emerged from such privatization transactions—including some of the largest and most reputable foundations in the world. Properly designed and executed, PtP can revolutionize the charitable landscape of countries while transforming privatization into a “win-win” process for citizens, governments, and investors alike. It is to call attention to this possibility and promote its fulfillment that the PtP Project is dedicated, as detailed in Philanthropication thru Privatization: Building Permanent Endowments for the Common Good.

Stolen or Stranded Assets and the BOTA Case

Assets that have been abandoned by owners, generated from bribes, or imposed as penalties arising from illegal individual or corporate behavior represent one of the prime asset classes to which the PtP concept can be applied—and the BOTA case illustrates the way in which this can be successfully done.
The quantity of such assets around the world is enormous. In 2015 the United Nations estimated that “every year $1 trillion is paid in bribes while an estimated $2.6 trillion are stolen annually through corruption—a sum equivalent to more than 5 per cent of the global GDP.” While most of this money is never recovered, in some cases it is, leading to the critical question: What should be done with the resulting assets and how can they be protected and used for the benefit of the people from whom they were stolen?
While there is international agreement that such resources should be returned to the countries from which they originated, in cases where government entities are too complicit in the creation of the ill-gotten assets, where the likelihood is slim that the assets will be returned to a valid social purpose, and/or where public sentiment would not consider assignment of the proceeds to government authorities to be legitimate, alternative destinations must be considered. This was precisely the situation that led to the creation of the BOTA Foundation, and the BOTA case provides compelling evidence that a PtP-type solution—namely, the creation of a charitable endowment—offers a workable solution to this dilemma.
While BOTA has been cited as the most successful example of a transparent and accountable stolen asset return mechanism by major publications such as The New York Times and Financial Times and in more technical literature on asset recovery,1 no in-depth examination of its legal and political background, its history, its governance and management structure, its programs and impact, or its lessons has heretofore been available. With this case study, the PtP Project seeks to fill this gap and thereby provide those involved in future asset recovery cases a promising solution to what is always a critical dilemma in the asset recovery process, and a solution that has a proven track record in the context of other types of assets as well.
Download the full report, “The BOTA Foundation: A Model for the Safe Return of Stolen Assets?” here.
1 See: Open Society Justice Initiative, Repatriating Stolen Assets: Potential Funding for Sustainable Development, 2013; Rick Messick, “How Asset Return Agreements Can Bolster Reform: The Kazakh Experience”, The Global Anti-Corruption Blog, March 3, 2016; Gretta Fenner-Zinkernagel, Charles Monteith, and Pedro Gomes Pereira, Emerging Trends in Asset Recovery, International Centre for Asset Recovery, Basel Institute on Governance. Bern: Peter Lang, 2013; World Bank, Stolen Assets Recovery Initiative, Left Out of the Bargain, Settlements in Foreign Bribery Cases and Implications for Asset Recovery, 2014.

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

About the PtP Project | email
The Philanthropication thru Privatization (PtP) Project seeks to promote an option for the creation of independent charitable foundations around the world by capturing all or a portion of an assortment of “privatization” transactions involving the transformation of publicly-owned or -controlled assets into private wealth. The PtP Project is directed by Dr. Lester M. Salamon, a professor at the Johns Hopkins University and director of the Johns Hopkins Center for Civil Society Studies (CCSS). Administrative and technical support for the Project is provided by the East-West Management Institute (EWMI) with generous support from the Volkswagen, Charles Stewart Mott, and King Baudouin foundations as well as eight Italian foundations of banking origin through their Association of Italian Foundations and Savings Banks (ACRI). For more information about the PtP Project, visit
About Aaron Bornstein | email
Aaron Bornstein is an anti-corrupt ion expert with expertise in creating and leading the first foundation in the world established with funds from a U.S. Foreign Corrupt Practice Act settlement—the BOTA Foundation. From 2011 through the end of 2014, Aaron was the Executive Director of BOTA Foundation, the largest child and youth welfare support institution in Central Asia, where he was in charge of government and board relations, strategic visioning and execution, operations oversight including budget control, and representation to a diverse set of stakeholders. He has managed technical assistance and grants programs around the world dealing with diverse topics such as improving governance, child and youth welfare, and higher education strengthening. Throughout 2016 Aaron collaborated closely with PtP and Professor Lester Salamon on writing this case study on BOTA, and a “how to” paper on stolen asset return, expected to be published in 2017. Aaron has also been a consultant to the Stolen Assets Recovery Initiative of the World Bank and other nonprofit organizations. 
About Lester M. Salamon | email
Dr. Lester M. Salamon is a Professor at The Johns Hopkins University and Director of the Johns Hopkins Center for Civil Society Studies. He previously served as Director of the Center for Governance and Management Research at the Urban Institute in Washington, D.C. and as Deputy Associate Director of the U.S. Office of Management and Budget in the Executive Office of the President. Dr. Salamon pioneered the empirical study of the nonprofit sector in the United States and has extended this work to other parts of the world. Author or editor of more than 20 books, his recent works include: The Resilient Sector Revisited: The New Challenge to Nonprofit America (Brookings Press, 2015); Philanthropication thru Privatization: Building Permanent Endowments for the Common Good (il Mulino Press, 2014); The New Frontiers of Philanthropy: A Guide to the New Tools and Actors Reshaping Global Philanthropy and Social Investing (Oxford University Press, 2014); America’s Nonprofit Sector: A Primer, 3rd Ed. (Foundation Center, 2012); The State of Nonprofit America, Vol. 2 (Brookings Press, 2012); and Rethinking Corporate Social Engagement: Lessons from Latin America (Kumarian Press, 2010).

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Posted in: PtP

New Report Highlights the Economic Impact of the New York Capital Region Nonprofit Sector

By on January 10, 2017

The Center’s first report of 2017, “New York Capital Region Nonprofits: A Major Economic Engine,” produced by our Nonprofit Economic Data Project (NED) in collaboration with the New York Council of Nonprofits, Inc. (NYCON), examines the economic impact and role

Now Available: Portuguese translation of “Philanthropication thru Privatization” from IDIS

By on September 30, 2016

We are very happy to announce the publication of a Portuguese translation of Philanthropication thru Privatization: Building Permanent Endowments for the Common Good, Filantropização via Privatização: Garantindo Receitas Permanentes para o Bem Comum.   This translation was undertaken and published

Japanese edition of Leverage for Good now available

By on March 15, 2016

The Center is pleased to announce that the Japanese translation of Director Lester Salamon’s recent book, Leverage for Good: An Introduction to the New Frontiers of Philanthropy and Social Investing (Oxford University Press, 2014), is now available from Minerva Publishing!

Lester Salamon speaks to the UN Statistics Division on the revision of the UN NPI Handbook

By on March 10, 2016

Center Director Lester Salamon was invited by the United Nations Statistics Division to present the work our Center is doing to advance the international statistical revolution in the measurement and understanding of the third sector during a side event of

Meet Erik Petrovski, Fall 2015 International Philanthropy Fellow

By on February 9, 2016

The Johns Hopkins International Fellows in Philanthropy Program is a highly-selective program that welcomes one or two researchers from outside the U.S. to spend one or more semesters at our Center to conduct independent research on an aspect of the

Four Shades of Resilience: The Center for Civil Society Studies in 2015

By on December 21, 2015

Perhaps no quality captures more effectively the distinctive character of nonprofit institutions and related voluntary citizen behavior that is the focus of our Center’s attention than the quality of resilience—the ability to withstand significant shifts in fortunes and challenges and

UN “Human Development Report” and OECD’s “How’s Life?” emphasize contribution of volunteering

By on December 14, 2015

Two major publications have made important recognition of the contribution of volunteering to well-being and human development and the need for improved information. The elevation of the recognition of the contributions of volunteers to this level of policy discussion, and

Announcing The Resilient Sector Revisited: The New Challenge to Nonprofit America

By on December 14, 2015

We are happy to announce the release by Brookings Institution Press of Center Director Lester Salamon’s latest book, The Resilient Sector Revisited: The New Challenge to Nonprofit America!   Published in August, this second edition of The Resilient Sector provides

Two new reports from Canada highlight volunteering and giving data

By on December 7, 2015

Statistics Canada has released two new reports drawing on the 2013 General Social Survey (GSS) on Giving, Volunteering, and Participating to profile volunteering and giving in Canada. The first report, “Volunteering and charitable giving in Canada” by Martin Turcotte (English

New Irish data links volunteering to wellbeing

By on August 5, 2015

Ireland is the most recent country to have added questions about volunteering to a national household survey and to generate data about the number of persons that volunteer, the number of hours they dedicated and the types of activity carried

Reflections on Volunteers, Civil Society, and the United Nations Sustainable Development Goals

By on July 16, 2015

In September, the United Nations will adopt the Sustainable Development Goals (SDGs), an overarching set of collective objectives for the development of people and the planet that will replace the expiring Millennium Development Goals (MDGs) on January 1, 2016. The

Measuring Volunteerism: Report on the UNV Side Event to the 46th Session of the United Nations Statistical Commission

By on July 7, 2015

The text of this post is drawn from a report authored by the United Nations Volunteers, which is available for download here. Center Director Lester Salamon, spoke at this event. _________________________   The UN Volunteer programme’s side event to the

TSI Project: A statistical revolution in data on the third sector in Europe

By on June 10, 2015

The following is a news release from the Third Sector Impact project, a major effort underway in Europe to “understand the scope and scale of the third sector in Europe, its current and potential impact, and the barriers hindering the

Good news, and more good news, about the measurement of volunteer activity

By on June 8, 2015

This post originally appeared in the June 2015 issue of the International Association for Volunteer Effort’s (IAVE) e-newsletter, ahead of an upcoming webinar presentation to IAVE members about the features of the ILO Manual on June 23. ____________________________________________   Despite

A Win-Win Route Out of the Greek Debt Crisis

By on May 11, 2015

A new article by Center Director Lester Salamon, published today in the May-June edition of The World Financial Review, takes a look at a novel solution to the on-going Greek debt crisis. Rooted in his work exploring a phenomenon he

Statement from Lester Salamon on the recent events in Baltimore

By on May 1, 2015

A number of you have been kind enough to express concern about the health and safety of all of us at the Johns Hopkins Center for Civil Society Studies following the reports of violence and looting in Baltimore earlier this

Cameroon releases its first NPI satellite account, providing inspiration for other countries

By on January 29, 2015

Cameroon became only the third African country to complete a satellite account on nonprofit institutions and volunteering since the 2003 publication of the UN Handbook on Nonprofit Institutions in the System of National Accounts. The only other African countries to

Statistics Norway releases nonprofit funding data for the first time

By on January 22, 2015

Statistics Norway recently released an updated report on its satellite account on nonprofit institutions (NPIs), resulting from their continued implementation of the UN Handbook on Nonprofit Institutions in the System of National Accounts. For the first time, this report includes

Into the New Year: The Center for Civil Society Studies and the Global Sustainability Agenda

By on January 13, 2015

In 2012, the United Nations began to explore how best to build upon its Millennium Development Goals, the set of objectives that has guided international development work over the past 15 years. With environmental degradation and global warming increasingly prominent

A Brave New World of Social Purpose Finance

By on December 8, 2014

This is the title of a new article in the November/December 2014 issue of The World Financial Review in which Center Director Dr. Lester Salamon examines the remarkable changes taking place in social purpose finance today. Below is a brief

Blog post series by William Burckart highlights “New Frontiers of Philanthropy”

By on November 24, 2014

New Frontiers of Philanthropy (Oxford University Press, 2014), an omnibus text examining the innovations taking place in the philanthropic field edited by Center Director Lester Salamon, is discussed in a new series of blog posts by New Frontiers contributing author

Revision of the UN Nonprofit Handbook underway

By on October 25, 2014

  In 2002, the Johns Hopkins Center for Civil Society Studies partnered with the United Nations Statistics Division and an international team of statistical experts to develop the first UN Handbook on Nonprofit Institutions in the System of National Accounts.

Italy releases nonprofit census data, shows tremendous sector growth

By on October 20, 2014

Recently released data from the Italian National Institute for Statistics (ISTAT) 2011 Census of Nonprofit Institutions shows that the country is home to more than 300,000 nonprofit organizations, which represents a remarkable 28 percent increase since the last census was