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Bourke Raises Vindictive Prosecution

Frederic Bourke wants to know if the U.S. is prosecuting him for violating the Foreign Corrupt Practices Act because he was a whistleblower who interfered in the strategic relationship between the United States and Azerbaijan.

Bourke's lawyer -- the high-profile Dan Webb -- has asked Judge Shira A. Scheindlin to review internal prosecution documents prepared before Bourke was charged. "The documents may show whether prosecutors brought the case to punish Bourke for disclosing a crime involving the Socar deal and interfering in the U.S.'s relationship with Azerbaijan a decade ago," Webb said. Bourke's showing that he's the target of a vindictive prosecution could result in a dismissal of the charges against him.

These details are from a story carried by the Bloomberg wire and written by David Glovin. Last month Glovin wrote a fascinating profile and interview of Bourke's co-defendant, Victor Kozeny, who's in the Bahamas fighting extradition. Bourke is accused of helping Kozeny pay bribes to government officials in Azerbaijan in a failed attempt to take over the state oil company known as Socar. Bourke's trial is scheduled to start in March next year.

At a hearing last week in U.S. v. Kozeny, 05-cr-518, U.S. District Court, Southern District of New York (Manhattan), defense attorney Webb said Bourke wants to explore "the possibility that somebody decided to silence him. Why did a whistleblower get indicted?''

Bourke invested and lost $8 million with Kozeny. His lawyers have said in court filings that Bourke suspected in late 1998 that Kozeny was stealing from investors. Bourke then began collecting evidence to prove the fraud. Bloomberg reports: "Bourke took the evidence to state and federal prosecutors in New York and met with Azerbaijan's then-president, Heidar Aliyev, to expose Kozeny's wrongdoing, the court papers say. . . Webb said Bourke's actions may have interfered with the U.S.'s strategic relationship with the oil- rich nation. Bourke wants to know if the U.S. is punishing him for speaking out, Webb said."

Assistant U.S. Attorney Harry Chernoff urged Judge Scheindlin to deny Bourke's request that she review the documents, saying there is no evidence to support his claim. Scheindlin hasn't yet made a ruling. Chernoff said Bourke is engaged in "a fishing expedition."

Webb also asked Judge Scheindlin to order prosecutors to search for records in the Central Intelligence Agency and the U.S. State Department that may support other defense claims. In addition, he wants the judge to force the U.S. National Security Agency to turn over recorded intercepts of conversations involving Kozeny, Bourke or others in Azerbaijan, if they exist.

In August this year, a Washington-based non-profit watchdog group that defends whistleblowers alleged that James Wolfensohn, the former head of the World Bank, helped Kozeny by quashing staff concerns and writing letters on Kozeny's behalf. Wolfensohn has said the report by the Government Accountability Project (GAP) is wrong.

An earlier Bloomberg story by David Glovin and Christopher Swann said Bourke's lawyers provided documents to GAP and that Bourke funded the Kozeny-World Bank report. GAP says Kozeny's scheme in Azerbaijan came to light "in 1999, when U.S. investor and whistleblower Frederic Bourke came forward and exposed the fact that at least one major investor had been defrauded . . . ." Kozeny has denied taking money illegally from investors and criticized GAP for its work on Bourke's behalf.

New York State prosecutors brought a case against Kozeny in 2003 for stealing $180 million from U.S. investors. Bourke, who wasn't charged in that case, testified before the grand jury against Kozeny and said he was a victim of the fraud. In 2005, the U.S. government accused Bourke of joining the bribery plot. Kozeny, who has spent the last nine years in the Bahamas, is also wanted by authorities in the Czech Republic, where he's accused of stripping Czech companies of $1.1 billion.

A special thanks to Bloomberg's David Glovin for his excellent reporting on this story.

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Full post as published by The FCPA Blog on November 12, 2008 (boomark / email).