Azerbaijan

In September 1994, a 30-year contract was signed between the State Oil Company of Azerbaijan Republic (SOCAR) and 13 oil companies, among them Amoco, BP, ExxonMobil, Lukoil and Statoil. As Western oil companies are able to tap deepwater oilfields untouched by the Soviet exploitation, Azerbaijan is considered one of the most important spots in the world for oil exploration and development. Meanwhile the State Oil Fund of Azerbaijan was established as an extra-budgetary fund to ensure the macroeconomic stability, transparency in the management of oil revenue, and the safeguarding of resources for future generations.

It also merged with bin-Laden's organization that year and issued a fatwa targeting American civilians.
 * Brent Scowcroft on 911 US-Azerbaijan Chamber of Commerce
 * Farhad Azima US-Azerbaijan Chamber of Commerce
 * Viktor Kozeny Azerbaijan
 * By 1998, Ayman al-Zawahiri's organization (Egyptian Islamic Jihad) had taken up residence in Baku, Azerbaijan.
 * Dick Cheney

http://www.madcowprod.com/azima2.htm

-- Bourke Convicted of Bribery in Kozeny’s Azerbaijan Oil Deal By David Glovin - July 11, 2009 00:01 EDT

July 11 (Bloomberg) -- Frederic Bourke, the co-founder of handbag maker Dooney & Bourke who was once part of the Ford family, was convicted by a U.S. jury of conspiring to pay bribes to government leaders in Azerbaijan in a 1998 oil deal.

The federal jury in Manhattan returned its verdict yesterday after a monthlong trial that featured testimony from former U.S. Senator George Mitchell. Jurors found Bourke conspired with Czech expatriate Viktor Kozeny to bribe to Azerbaijan leaders including former President Heidar Aliyev to spur the sale of the state-owned oil company.

The verdict is a win for U.S. prosecutors as they step up enforcement of the Foreign Corrupt Practices Act, the law that bars payments to non-U.S. officials in return for business. Few criminal cases under the FCPA have gone to trial.

“By bringing and winning the case, the government has expanded the FCPA’s coverage,” said Richard Cassin, the founder of Singapore-based law firm Cassin Law LLC, who also writes the FCPA Blog. “This was probably the hardest FCPA prosecution the government has ever brought. Bourke didn’t pay the bribes himself. He only knew about them.”

Bourke, 63, was on trial for investing with Kozeny knowing he gave Azeri leaders millions of dollars in cash and a secret two-thirds interest in a venture Kozeny formed to buy the state oil company, known as Socar. Defense attorney John Cline said an appeal is “very likely.”

No Maximum Sentence

Bourke was accused of conspiring to violate the FCPA, conspiring to violate money-laundering laws and lying to agents of the Federal Bureau of Investigation. He was acquitted of money laundering. U.S. District Judge Shira Scheindlin said she will impose less than the 10-year prison sentence that prosecutors said Bourke faced. He is free on $10 million bail.

Bourke, a Greenwich, Connecticut, entrepreneur who launched startups in the home-building, accessory and biotechnology industries, denied knowing of the bribes. His lawyers said Kozeny stole more than $180 million from Bourke and other investors including the hedge fund Omega Advisors Inc. and the insurer American International Group. A Bourke investment vehicle put up $8 million in the deal.

Azerbaijan, a former Soviet Republic on the Caspian Sea, never sold Socar, wiping out the investment.

Kozeny, who also has been charged, is a fugitive living in the Bahamas. He admits bribing Azeri leaders, denies stealing from his investors and claims they knew their money was being used as payoffs. He says the FCPA doesn’t apply to him.

Millions in Cash

Trial witnesses told of plane flights into Azerbaijan with millions of dollars stuffed into suitcases, of shakedowns in government offices, and of dealings with Chechen mobsters who provided protection to Kozeny’s operation.

Kozeny said his investors might control about half of the Azeri economy if they captured Socar. Others believed their investment might grow tenfold, witnesses said.

The jury of seven women and five men began deliberating July 8 after hearing testimony since early June. Jury foreman David Murphy, 52, said the panel believed Bourke learned of the bribes after investing and then should have gotten out. By then Kozeny was known as the “Pirate of Prague” for allegedly stealing money from investors in his native Czech Republic.

“It was Kozeny, it was Azerbaijan, it was a foreign country,” Murphy, an electrician, said in an interview after the verdict. “We thought he knew and definitely could have known. He’s an investor. It’s his job to know.”

Key Witnesses

The government’s case centered on two witnesses, former Kozeny aide Thomas Farrell and ex-Kozeny lawyer Hans Bodmer, both of whom testified that they told Bourke of the payments. The two have pleaded guilty and are cooperating with prosecutors in bids for leniency.

Prosecutors also offered evidence that Bourke “consciously avoided” learning about the bribes by not asking questions about them. Jurors were allowed to convict if they found Bourke knew or took steps to avoid learning of the payments.

The defense sought to poke holes in Farrell’s and Bodmer’s accounts and said Bourke believed Azeri leaders had lawfully paid for their stake in the company Kozeny formed to buy Socar.

Juror Barbara Robertson said jurors rejected a central defense claim that Bourke wasn’t in Azerbaijan when Farrell and Bodmer said they told him of the bribes.

“The judge’s instruction was clear,” she said. “If you think the substance is right and the dates are wrong, it doesn’t matter.”

Mitchell’s Testimony

Bourke, who was once married to a member of the Ford family, didn’t testify. Among his witnesses was his friend Mitchell, the ex-senator, whom Bourke brought into the deal as a $200,000 investor. Mitchell told jurors he was unaware of the bribes even after meeting with Aliyev.

Mitchell, 75, is a special U.S. Middle East envoy. He was a Democratic senator from Maine in the 1980s.

Besides the president, intended bribe recipients included current President Ilham Aliyev and two officials overseeing the sale of state property in 1998, prosecutors said. Along with Farrell and Bodmer, a former Omega executive has pleaded guilty.

Benjamin Brafman, Kozeny’s lawyer, said the verdict “does not affect Mr. Kozeny, who has always maintained that the FCPA does not apply to him because he is not a citizen” of the U.S. The U.S. says it’s appealing a Bahamian court’s refusal to extradite him.

“The jury had decided that Mr. Bourke lied and bribed,” Kozeny said in an e-mailed statement. He said Bourke deserved a “minimal” sentence. “In our Judeo-Christian culture, we base our life on forgiveness,” Kozeny said.

The case is U.S. v. Bourke, 05-cr-00518, U.S. District Court, Southern District of New York (Manhattan).