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Harry Cassin
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To Mexico, from Nigeria, via Kazakhstan: On the Trail of a Great Idea (Part 2)

Last post, I discussed the proposal from Nigeria’s Social-Economic Rights and Accountability Project to establish a mechanism for using the proceeds of FCPA settlements to help bribery victims. Specifically, SERAP suggests that civil penalty or disgorgement proceeds be made available to civil-society groups in the victimized country, or to U.S.-based NGOs serving that country, to fund public benefit projects subject to anti-corruption safeguards.

It’s a capital idea, in my view; one with a bright future, as we’ll discuss next post. But let us also recognize that the idea does not merely have a future; it has a past. That is, we’ve actually done something like this before.

Recall the case of James Giffen, who was charged in 2003 with paying roughly $84 million in bribes to government officials in Kazakhstan on behalf of western oil companies. When finally settling those charges in 2010, the U.S. Government did a most extraordinary thing.  

It traced the bribes back to the Swiss bank accounts where they were held, then arranged with the Swiss government to release the funds. The $84 million — all of it — was then placed in a trust to create a Kazakhstani NGO called The BOTA Foundation. BOTA’s founding purpose is “to improve the lives of children, youth and their families suffering from poverty in Kazakhstan through investment in their health, education and social welfare.”  It has provided scholarships to needy students, funded various health, education, and social welfare projects, and boasts over 70,000 beneficiaries. The funds are overseen by the BOTA Foundation Board of Trustees, with supervision from the World Bank.

Admittedly, the BOTA arrangement is slightly different from SERAP’s proposal: BOTA is funded with the recovered bribes, while SERAP proposes using disgorged profits and civil penalties. Moreover, SERAP has further suggested that the proceeds might be returned to the “victimized” governments; this could prove problematic in the extreme. But let’s see the bigger picture here. BOTA is a good example of using FCPA funds to benefit those most harmed by bribery — the citizens of the countries in which the bribes occurred.

Could this idea apply elsewhere? If Kazakhstan, why not Nigeria, and if there, why not elsewhere?  Do we see here the beginnings of an innovative new model of FCPA enforcement? We’ll start tracing the contours of this model in the next post.


Andy Spalding is a contributing editor of the FCPA Blog. He teaches international business law at the Chicago-Kent College of Law. Effective June 1, he’ll be an Assistant Professor at the University of Richmond School of Law.

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  1. I am not sure what is meant by "BOTA has further suggested that the proceeds might be returned to the “victimized” governments; this could prove problematic in the extreme". BOTA's foundational documents require that the organization remains independent of the government, and the government does not control the funds or influence how they are spent.

  2. From Andy Spalding:

    Shoot! That's a typo, and it's entirely my fault. SERAP made that proposal, not BOTA. The text should say, "SERAP has further suggested that the proceeds . . ."

    [Editor's note — The text has been corrected.]

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