The Bourke connection
It allegedly started at a Christmas party in 1997. While most people were spending some family quality time, others continued their habit of planning schemes to conquer the world and defraud the globe for millions of dollars. Bourke (owner of a luxury hand bag brand), Kozeny (‘the Pirate of Pague’) and Pinkerton (a former AIG executive) supposedly forged plans to make some money out of the oil privitization in Eastern Europe by bribing their way in.
Last Friday, almost 12 years later, Bourke was convicted in Manhattan of bribery. The verdict is a win for U.S. prosecutors as they step up enforcement of the Foreign Corrupt Practices Act, the US law that bars payments to non-U.S. officials in return for business. Interestingly enough, Bourke was not convicted because he actually paid the bribes; he was part of a scheme that did so. Did he realize from the start that bribing government officials was part of the plan? When did the moment start that he could have known about it? What does this sentence mean for all companies that invest in projects in countries that are all the way up in the corruption top 10? Better make sure you know where your money ends up.
It was decided that Bourke knew that Kozeny paid millions of dollars to state leaders in Azerbaijan. These government officials also received a secret stake in the joint venture that was used to house the now privatized oil business. 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.
According to Bourke, Kozeny stole more than $180 million from him and other investors in the project such as AIG. Bourke claimed that he did not know of the bribes. Because 2 aides of Kozeny, including his lawyer, testified that they informed Bourke of the bribes (although that was probably after the bribes were paid), Bourke was 1 step behind with that statement.
Bourke kept a detailed record of the alleged wrongdoings of co-investor Victor Kozeny, Bourke’s attorney Robert Cleary had addressed in court. Bourke, who lost at least $8 million in the venture, also claims he endangered his own safety to warn the president of Azerbaijan – an ex-KGB general who ran the former Soviet republic as a dictatorship – in person about the scam.
The evidence of Kozeny’s wrongdoing and Bourke’s innocence is compiled in what Bourke’s defense has called the “book,” a detailed look at how a deal that burned many who count themselves as part of Aspen’s elite went awry. The book could not save him. His defense lawyer said a appeal was likely.
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 (who has heard that before?).
This verdict is a voice from the recent past, where the privitization of the energy market in Eastern Europe attracted a lot of adventurers of all sorts of background. Those shady days are behind us now?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXO.vHLdvbcM