Ralph StanleyYesterday I honored Scotty Moore, the lead guitarist for Elvis Presley, who died last week. Today I want to pay homage to another equally large giant from the world of music who recently died, Ralph Stanley. Stanley, according to his obituary in the New York Times (NYT), is generally recognized as “one of the founding fathers of bluegrass music” along with Bill Monroe, Lester Flatt and Earl Scruggs.

His obituary noted, “Mr. Stanley was inducted, as co-founder of the Stanley Brothers, into the International Bluegrass Hall of Honor in 1992. He became a member of the Grand Ole Opry in 2000. He also received the Living Legend Award from the Library of Congress and a National Medal of Arts. He was the first artist to be presented with the Traditional American Music Award by the National Endowment for the Humanities.”

I actually got to see Stanley perform with his son’s band. He was the only one of the founders of bluegrass that I was privileged to see in person. I agree with the piece that was written about him by the critic David Gates, writing in the New Yorker, who said “after the movie “O Brother” introduced his rawboned music to a new generation of listeners, Mr. Stanley’s “best performances involve you so deeply that any sense of a particular genre gets lost.”” I also completely agree with his assessment that “Ralph Stanley, understood that the way to go was to simplify, intensify and countrify.” I am sure one of the greatest bluegrass jam sessions in front a big outdoor fire in the sky is going on about now.

I thought about Stanley’s genius when considering one of the challenges in anti-corruption going forward; which is the issue of repatriation of the funds stolen from a country through bribery. Matt Stephenson, over at the Global Anti-Corruption Blog (GAB), has been a persistent commentator of the difficulties of such a repatriation. However, an article in the Financial Times (FT) by Kara Scannell, entitled “Moving money out of purgatory”, detailed one of the success stories in this area while also reporting on many of the difficulties outlined by Stephenson in the GAB.

The problem is obvious. Many of the corrupt regimes where national wealth has flowed from are still corrupt and giving the money secured through fines and penalties under laws such as the Foreign Corrupt Practices Act (FCPA) or UK Bribery Act could simply be passing the money back to another corrupt regime. In addition to the fines and penalties paid under the FCPA, there are various international initiatives to recover money stolen through bribery and corruption such as the US Kleptocracy Asset Recovery Initiative, the World Bank’s Stolen Asset Recovery Initiatives and others from the UK and Switzerland all have money tied up which could be repatriated to the home countries. Scannell reported, “The US has more than $1.5bn, belonging to Nigeria, Uzbekistan, Thailand and Ukraine tied up in bank accounts in various stages of litigation”. Of that amount “only about $120m, or one-eighth of the frozen assets, has been returned to the various countries.”

What are some of the reasons for this low rate of return? First is that even if money is seized, there still must be due process around the asset return. This means that the funds must be properly adjudicated and allocated, even with the kleptocrats or their family members making claims on the funds. Additionally (or perhaps most obviously) is whether the money should even be returned to countries in question.

Yet, even with these issues, there have been some notable successes. Scannell reported on one such success in repatriating money “frozen in 1999 and the US later alleged that it had been used to pay illegal bribes to top Kazakh officials under Nursultan Nazarbayev, the country’s long-serving president.” Some $84m was returned to the citizens of Kazakhstan through a charitable entity called Bota, which was set up “to give the cash back to the citizens who, according to US and Swiss authorities, it had been stolen from.”

Bota was charged with distributing the funds to “impoverished families, non-governmental agencies and students who wanted to pursue secondary education. The catch was that he could not have any dealings with the Kazakh government, which was not exactly happy to see [it] coming.” The numbers of Kazakh citizens who received some of the proceeds were “more than 150,000 mothers and children received nutritional assistance and early education programmes. Scholarships were handed out to 841 students.”

There have been discussions that perhaps the Bota model could be used in Uzbekistan, which was the home domicile for the bribe recipients in the Vimpelcom matter. Indeed, “Uzbekistan has argued the $850m should be returned unconditionally since it arrested individuals in connection with the bribery scheme. If the US prevails it will need to find a way to return the money while dealing with the same officials. There have been some discussions about following the Bota model, but the Uzbek case is of a bigger magnitude.” Of course there is also the small fact that the corrupt Uzbeki official is the daughter of the country’s President.

Scannell quoted Ken Hurwitz, head of the Open Society Justice Initiative, who said “Whether a Bota foundation arrangement is remotely feasible in a country as repressive and corrupt as Uzbekistan is truly a serious question that everyone is asking and scratching their heads about. For one thing [the DoJ has] only been making a serious effort for a few decades in creating what is in effect a new area of law. There is a huge learning curve. We’re not there yet but when there is a critical mass of such cases then there becomes a deterrent effect.’

Ralph Stanley did it his way for many, many years and is recognized as one of the all time greats through that work. The result achieved by Bota in Kazakhstan may provide a model to demonstrate how plundered funds or those obtained by corruption might be repatriated into a country without being controlled by a government, who if not corrupt, might not see the need for transparency in how the funds are distributed to its deserving citizens, the true victims of corruption.


This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2016