FOR IMMEDIATE RELEASE
Contact: Chelsea Newhouse
According to a recent UN report, close to US$4 trillion is stolen from governments or generated by bribes or other forms of corruption each year in countries around the world—an annual sum well above the total budgets of numerous developing and transition country governments. Despite often heroic efforts, however, the record of successful discovery, confiscation, and effective return for social re-use of these vast assets has been frustratingly meager.
This limited success in returning such assets for effective social re-use is largely due to the complexity of the process. Also at work, however, is that so much of the attention has had to focus on the challenges of locating, documenting, freezing, and confiscating stolen assets that too little attention has been available to focus on the all-important question of what to do with these assets if and when they become available for potential return.
The document being released today seeks to remedy this shortcoming by focusing on one of the most promising of the social re-use and return options available. This is the option exemplified by the case of the BOTA Foundation in Kazakhstan, and by close to 600 other foundations that have emerged around the world as a byproduct of similar transactions involving public or quasi-public assets, a process we have termed “philanthropication thru privatization,” or PtP for short.
As such, the present booklet, “How to Apply PtP to Stolen or Stranded Assets” builds on a previously issued case study of the BOTA Foundation, which successfully used the confiscated assets from a sizable bribe received by a political leader in Kazakhstan to create a highly successful charitable foundation dedicated to the health and well-being of Kazakhstani children.
In the booklet, Aaron Bornstein, who was executive director of the
BOTA Foundation, and Dr. Lester Salamon, director of the PtP Project and of the Johns Hopkins Center for Civil Society Studies, show how the PtP concept can be fruitfully applied to a range of stolen, dormant, and penalty-based assets to build permanent endowments for the common good, and the enormous win-win benefits that can result for governments, businesses, civil society, and communities.
More specifically, this booklet:
- Shows that the BOTA Foundation is just one of what turnout to be close to 600 highly successful charitable foundations that have emerged not only from stolen assets, but also from debt swaps, concession arrangements, sale of state-owned enterprises, and other public or quasi-public assets;
- Identifies and documents the scale of four types of stolen or stranded assets, including bribes, embezzled assets, dormant assets, and penalties arising from individual or corporate misdeeds or negligence;
- Introduces readers to the rules and processes through which such assets are discovered, frozen, confiscated, and ultimately disposed of;
- Shows how the PtP concept of using such assets to build permanent endowments for the common good can be applied to stolen, dormant, or penalty-based assets, and the considerable win-win benefits this outcome can bring to both sending and receiving governments, to the victims of stolen assets or corporate misdeeds, and to the entire process of stolen or stranded asset recovery.
Further reading on stolen assets and PtP:
- The BOTA Foundation: A Model for the Safe Return of Stolen Assets?
- Philanthropication thru Privatization: Building Permanent Endowments for the Common Good
- The PtP Beat Goes On: A New Cache of PtP Foundations
About the PtP Project | email
The Philanthropication thru Privatization (PtP) Project seeks to document and promote the further adoption of an option for the creation of independent charitable foundations around the world by capturing all or a portion of an assortment of transactions involving the transformation of public or quasi-public 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, Ford, la Caixa, 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 p-t-p.org.
About Aaron Bornstein | email
Aaron Bornstein is an anti-corruption 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.
About Lester M. Salamon | email
Dr. Lester M. Salamon is a Professor at The Johns Hopkins University and the Director of the Johns Hopkins Center for Civil Society Studies and of the Philanthropication thru Privatization Project. The author or editor of over 25 books on the tools of government and the global civil society sector, Dr. Salamon previously served as Deputy Associate Director of the U.S. Office of Management and Budget in the Office of the U.S. President.