Bloomberg's David Glovin reported Friday how federal prosecutors are planning to show that Frederic Bourke, who's accused of violating the Foreign Corrupt Practices Act, thought his partner in their luxury handbag business was secretly trying to inject him with a "harmful substance." Glovin's story -- his latest in a string of terrific coverage of U.S. v. Kozeny -- is here.
Bourke's federal criminal trial in New York City is scheduled to start June 1. Prosecutors charge he helped Czech-born fugitive Viktor Kozeny bribe officials in Azerbaijan in 1998 in a failed attempt to take over the state oil company, Socar. Bourke, 62, faces up to 35 years in prison on FCPA charges, money laundering and lying to federal investigators.
The government also wants to show how Kozeny and Bourke picked up two prostitutes in Russia in 1997. The four traveled together aboard Kozeny's private plane, stopping in Baku, Azerbaijan, among other places, before returning to Moscow. Because Bourke didn't tell federal investigators about the prostitutes when he recounted his travels with Kozeny, prosecutors said the episode shows a "consciousness of guilt."
Assistant U.S. Attorney Harry Chernoff argued in court filings last week that Bourke's fears of being secretly injected with a harmful substance by his business partner, Peter Dooney, led him to ask Kozeny's security chief "to foil the former partner's efforts."
Bourke's lawyer, Harold Haddon, argued that the court should exclude the evidence. He said it has "no relevance to any issue in the case. It will cause Mr. Bourke substantial unfair prejudice, confuse the jury, and waste time."
The prosecution presumably thinks its evidence about the poison and the prostitutes shows that Bourke wasn't a typical investor with Kozeny but instead was a confidant and friend. That closeness, the government may argue, makes it more likely that Kozeny revealed the secret about his bribery to Bourke. Bourke's lawyers said that can't be true because the trip with the prostitutes happened at least six months before Kozeny made any illegal payments in Azerbaijan.
Bourke has portrayed himself as one of Kozeny's many victims. He invested and lost $8 million in the Socar deal, he said. Last year, Bourke's former lawyer, Dan Webb, said Bourke is a whistleblower who's being prosecuted "for disclosing a crime involving the Socar deal and interfering in the U.S.'s relationship with Azerbaijan a decade ago."
Bloomberg's Glovin reported then that "Bourke took the evidence [of Kozeny's fraud on his investors] to state and federal prosecutors in New York and met with Azerbaijan's then-president, Heidar Aliyev, to expose Kozeny's wrongdoing . . . 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 in documents filed in the federal court."
Kozeny, 45, was indicted in 2003 in a New York state criminal case for stealing $182 million from investors. In 2005, the federal government indicted him and Bourke under the FCPA for bribing Azeri officials. Kozeny's been fighting extradition from his home in the Bahamas and hasn't appeared in the U.S. cases. He's also wanted in the Czech Republic for embezzling $1.1 billion from mutual funds there in the early 1990s.
Glovin's latest dispatch said Bourke's partner, Peter Dooney, laughed when told of Bourke’s alleged fear. “I haven’t seen the guy in years and years,” Dooney said in an interview. “No secret injections. Categorically denied.” Glovin said Dooney is president of Dooney & Bourke and runs its day-to-day operations. Bourke is co-founder and partner of the company they started in 1975 but isn't involved in the daily business.
While the government lines up salacious evidence against Bourke, his lawyers are stepping up their own attacks on the credibility and character of the prosecution's planned witnesses. We'll talk about that in Part II.
Download a copy of Bourke's May 7, 2009 memorandum of law in support of his motion to exclude evidence here.