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« In Jefferson's Case, What Gives? | Main | Enforcement Report For Q2 '09 »
Wednesday
Jul012009

More Caribbean Controversy

Tiny Antigua -- the adopted home of Sir Allen Stanford -- isn't the only Caribbean hide-away that's in the news these days for the wrong reasons. There's also its even-tinier neighbor, the Turks and Caicos Islands.

In April, a U.K. report alleged systematic corruption among Turks and Caicos' leading politicians and their friends. Based on the report, the British government announced plans to suspend the territory's political institutions and impose direct rule. It was supposed to happen two weeks ago but a last-ditch lawsuit filed in London to block the move will be decided first, maybe as early as this week.

Turks and Caicos is a British Overseas Territory whose citizens have U.K. passports. Its total population is only around 30,000 but every year 300,000 tourists show up on its beaches. And it's a favorite among privacy-seeking celebrities, said to include Keith Richards, Bruce Willis, Christie Brinkley and Donna Karan, among others.

The London court case was filed by the territory's former prime minister, Michael Misick, who resigned when the U.K. corruption report came out. He says Britain's plan to suspend the constitution and the right to trial by jury would violate the residents' human rights. Misick himself, according to investigators, made millions of dollars since his election in 2003, partly by selling crown-owned real estate and pocketing the money. One of the key witnesses against him has been his estranged wife, the American actress LisaRaye McCoy.

Some locals, however, are accusing the U.K. of grand hypocrisy. The current premier of Turks and Caicos told the Financial Times that because of the expenses scandal in the U.K. parliament, British politicians “no longer have the moral authority to lecture other countries on corruption.” Former premier Misick said, “We have a saying on the island – it is like the pot calling the kettle black. How can you want to dissolve our parliament when you have these problems at home?”

Most politicians in London, according to the Financial Times, dismiss the idea that the MP-expenses scandal has lowered Britain's standing in the world and ability to govern the Turks and Caicos. The MPs themselves are mostly saying they've been victimized by a bad system. But a British diplomat said, “There’s no question that it feels a touch more uncomfortable, whether you are a minister or official, to talk about the importance of good governance or tackling corruption.”

* * *
From Frederic Bourke's Trial. Bourke rested his defense on Tuesday without taking the stand. Closing arguments will be on Monday, July 6, then the case goes to the jury.

This week Bourke’s lawyers kept hammering away at earlier testimony from Hans Bodmer, Viktory Kozeny's former Swiss lawyer. He said he told Bourke about Kozeny's plan to bribe Azeri officials. According to Bloomberg's courthouse-reporter David Glovin here, "Eric Vincent, a lawyer who in 1998 worked for investor Omega Advisors Inc., [on Monday] became at least the third defense witness to challenge Bodmer’s testimony. Vincent said Bodmer never told him Azeri officials were part of the Socar deal, as Bodmer claimed."

Glovin reports that "Bourke denies knowing of the bribes and says Kozeny stole more than $180 million from him and other investors. Azerbaijan, a nation in the Caspian Sea region, never sold [state-oil-company] Socar, wiping out the investment. Bourke, who was once married to a member of the family that owned Ford Motor Co., put up $8 million, including cash from . . . his friend ex-U.S. Senator George Mitchell." Two weeks ago Mitchell testified in the case for four hours. He backed Bourke, saying he trusts him and that they never discussed any bribery.

Bourke's final witness was his "life partner" Megan Harvey. She also said she never heard Bourke talk about any bribery connected with the deal. They knew about Azeri officials investing, she said, but she and Bourke had been told "the Azeris had paid for their stake and that their lawyers had said it was legal." Prosecutors didn’t cross-examine her.

Bourke faces up to 30 years in jail for conspiring to violate the Foreign Corrupt Practices Act, money laundering and lying to federal investigators.

Read David Glovin's reports on the trial here.

Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.

We wish our U.S.-based readers a great Independence Day weekend. We'll be back on Monday.
.

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