Friday, 28 November 2014 / TRUTH-OUT.ORG

Another US Whistleblower Behind Bars? Investor Jailed After Exposing Corrupt Azerbaijani Oil Deal

Tuesday, 15 October 2013 13:13 By Juan Gonzalez and Amy Goodman, Democracy Now! | Video Interview

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In a Democracy Now! exclusive, we look at the case of multimillionaire American businessman and philanthropist Rick Bourke, who blew the whistle on a fraudulent scheme by international criminals to gain control of the oil riches of the former Soviet Republic of Azerbaijan — only to end up as the only person sent to jail by federal prosecutors in the massive conspiracy. Since May, Bourke has been held in a federal prison, serving a term of one year and one day for violating the Foreign Corrupt Practices Act for alleged knowledge of the bribery that allegedly took place in 1998. Other investors in the Azerbaijan scheme included former Democratic Senate Majority leader George Mitchell and major institutions including Columbia University and AIG, but no one else was jailed in the United States. High-ranking former U.S. and British officials from the CIA and MI6 have raised serious concerns about the conviction of Bourke in part because the key witnesses during his trial were allegedly intelligence assets working for the U.S. government. They are not the only ones who question Bourke’s guilt. Even the judge in his case has admitted having doubts. At the time of Bourke’s sentencing, Shira Scheindlin of the Federal District Court said, "After 10 years of supervising this case, it is still not entirely clear to me whether Mr. Bourke was a victim, or a crook, or a little bit of both." We speak to Bourke’s lawyer, the law professor and renowned attorney Michael Tigar, as well as former Washington Post reporter Scott Armstrong. "Why is it that they would go after the guy that blew the whistle on the thievery and bribery, Rick Bourke?" Tigar asks. "Why is it that the Czech citizen and the guy, the ex-patriot, and the German-Swiss lawyer all are walking free; the American citizen, philanthropist, and so on, is sitting in a minimum security jail? Well, investment in the Azerbaijan hydrocarbon industry is now safely in the hands of major petroleum companies. Is that a reason?"

TRANSCRIPT:

This is a rush transcript. Copy may not be in its final form.

 Juan González: Today in a Democracy Now! exclusive, we spend the hour looking at a story of yet another whistleblower imprisoned under the Obama administration, a story that could be straight out of a Hollywood thriller. The saga centers on an American businessman and philanthropist who was caught in an amazing web of international white-collar crime and mysterious suspected double agents of powerful intelligence agencies, a man who, when he blew the whistle, ended up being indicted by federal prosecutors, convicted and sent to prison for violating the Foreign Corrupt Practices Act.

The cast of unlikely characters includes a man nicknamed the Pirate of Prague, a former U.S. senator, an Ivy League university and the presidents of the former Soviet republic of Azerbaijan.

 Amy Goodman: The story centers on a multimillionaire named Frederic Bourke, known as Rick. You might recognize the name. He is best known for co-founding the luxury handbag company Dooney & Bourke. Using profits from the handbag company, he later became a major investor in medical research, including cutting-edge cancer treatments.

Today Rick Bourke is locked up at Englewood, a minimum security facility in the suburbs of Denver, Colorado, after he was convicted in U.S. federal court in 2009 of conspiring to pay bribes to government leaders in Azerbaijan as part of a risky scheme to buy the state oil company in the former Soviet republic. Bourke is serving a sentence of one year and one day, after he unsuccessfully appealed his conviction. In addition, he was ordered to pay a $1 million fine and serve three years of supervised release following the prison term. Prosecutors never alleged Bourke had actually paid bribes, only that he knew of the bribes paid to the Azerbaijani officials.

 Juan González: Azerbaijan is a key U.S. ally in Central Asia. Located on the western shore of the Caspian Sea, the former Soviet republic shares a border with Iran and is a key transit route for U.S. troops and supplies heading for Afghanistan. The country has been run by the same family since 1993, first by Heydar Aliyev and then his son Ilham. Ilham won re-election just last week after a controversial vote.

Frederic Bourke was one of many prominent investors in the deal but the only one who was jailed in the United States. Other investors included former Democratic Senate Majority Leader George Mitchell and major institutions including Columbia University and AIG.

Bourke’s supporters say he’s a whistleblower who helped expose the shadowy underworld of global finance once he realized he was being swindled. High-ranking former U.S. and British officials from the CIA and MI6 have also raised serious concerns about the conviction of Bourke, in part because the key witnesses during his trials were alleged intelligence assets working for the U.S. government.

They aren’t the only ones who question Bourke’s guilt. Even the judge in his case has admitted having doubts. At the time of Bourke’s sentencing, Shira Scheindlin of the Federal District Court said, quote, "After 10 years of supervising this case, it is still not entirely clear to me whether Mr. Bourke was a victim, or a crook, or a little [bit] of both."

 Amy Goodman: While Bourke remains in jail, the masterminds and key players behind the bribery scheme—the men he blew the whistle on—remain free. Viktor Kozeny, who is known as the Pirate of Prague, lives in a gated community in the Bahamas. Attorney Hans Bodmer serves on the board of a Swiss bank. And a third man, a U.S. citizen named Tom Farrell, lives in Saint Petersburg, Russia, where he runs a bar. Bodmer and Farrell pleaded guilty and signed agreements to provide testimony in related cases.

We recently spoke to Michael Tigar, the renowned attorney, law professor and author, who is representing Rick Bourke. We also spoke to Scott Armstrong, a journalist formerly with The Washington Post who has closely followed the case. He is founder and former executive director of the National Security Archives and former chairperson of the Government Accountability Project. I began by asking attorney Michael Tigar to lay out the story.

 Michael Tigar: In 1998, in the spring, Rick Bourke invested—he and his family—$8 million in a plan formed by Viktor Kozeny, a Czech entrepreneur, for the privatization of the hydrocarbon industry of Azerbaijan. Kozeny was a crook. He stole every bit of Rick Bourke’s money and all of the other investors’ money. He bribed Azeri officials. He lives today happily unextradited in the Bahamas. The scheme was put together by a Swiss lawyer named Hans Bodmer, who was given a no-jail plea by the United States government and who sits happily in Zurich today laundering money for Russian oligarchs, and by a fellow named Tom Farrell, who was the bagman, who operates—an American citizen—operates happily—the Russians apparently like him—a bar in Saint Petersburg.

When Rick Bourke found out about the stealing in 1998, he went to the New York District Attorney’s Office, and he appeared before a grand jury in the state of New York. They indicted Kozeny for theft. Bourke then went to the federal government. They said, "Oh, no, Kozeny’s not a thief. He might be guilty of some other offenses." They indicted Kozeny for offenses for which, as a matter of fact, he couldn’t be extradited. They could have extradited him on the theft charge. And instead, they indicted Bourke on the testimony of Bodmer and Farrell that Bourke had known about the bribery of Azeri officials, testimony that, perhaps in the course of this trial, we can deconstruct, because it was ill-motivated.

Today, Rick Bourke is in jail. I regard him as a whistleblower. And we were unsuccessful, even after a United States attorney stood in the United States Court of Appeals in Lower Manhattan and told the court that the United States Attorney’s Office in this judicial district is perfectly happy to put on false testimony knowing that it’s false, that it happens all the time, but that Rick Bourke isn’t entitled to any relief on that basis.

 Juan González: I’d like to bring Scott Armstrong in, a former Washington Post reporter, founder of the National Security Archive and, for a time, a chairman of the board of the Government Accountability Project. Scott, how did you get involved in this case? And what is the broader issue involved here of the case of Rick Bourke?

 Scott Armstrong: Well, after Bourke had been indicted, he was seeking to establish the fact that he was a whistleblower and at one point went to the Government Accountability Project, a nonprofit organization which helps and protects the ability of whistleblowers to speak out. They turned to me and asked if I’d be interested in taking on this case, taking a look at what happened and seeing if Bourke was a whistleblower. I should point out that I’m speaking today for myself and not on behalf of the Government Accountability Project, but that was my route in. I reluctantly accepted it because it seemed like an opportunity to look at a case of major international corruption, a case where there was massive fraud by Kozeny, but also where there were a lot of other things going on. This fellow Hans Bodmer, who was the key witness against Bourke, was also the chief operating officer for not only Kozeny, but for a whole variety of international crooks, for the Russian oligarchy and many Russian officials—an international criminal of the first order. And you don’t get an opportunity to look into these matters unless you have some access to information which is normally not released by the government or sealed. And what Bourke did was he said he would give us access, total access, without any—any controls or restraints, to look at all the records that he had, all the information he had. We could ask anybody. He waived his attorney-client privilege and so forth. So I took on the project and spent nearly two years, a year and a half, looking at the—at what actually happened.

What shocked me, and I think is what is important here, is that the government very deliberately—the United States government very deliberately ignored what happened. Their interest was not in what happened, in finding out what—where this actually led, but in going after a relatively narrow cast of characters. They were in the process of—they essentially interrupted a very effective investigation conducted by the New York District Attorney’s Office, which had a—remarkably enough, by coincidence, a very competent attorney named Miriam Klipper, who went to the Czech Republic, where Kozeny originally was, and began investigating and was moving along, along with Czech investigators, very rapidly, and ultimately indicted Kozeny.

In the meantime, the federal government was approached by Kozeny, who himself was—because of Bourke’s whistleblowing, was being sued by other investors in London and was losing the case badly. So, Kozeny took a remarkable—a remarkable strategy and came to the United States government through attorneys just at the change in the administrations, just as the Clinton administration was leaving and the Bush administration was arriving. And he essentially said, "I’m outside your jurisdiction. You’re never going to get me. But I am in fact involved in an international crime. But it’s my investors who really led me to do it." And he then said, "You can get the investors. You can’t get me. And I’ll cooperate with you," and began telling a story. And the principle there was that if he could establish the United States government interest in that fact, that they were all crooks, then in the London courts, where Kozeny stood to lose hundreds of millions of dollars, the courts couldn’t rule in the favor of the investors, because the investors would be perceived to have unclean hands and could not—could not recover their assets as a result. So, it was a negotiating strategy, effectively, but it worked.

And once the government began its investigation—the United States government began its investigation, it threw aside, it didn’t cooperate with the New York state—the New York District Attorney’s Office in their investigation, which was quite far advanced and quite complete, and it included already an indictment, an indictment for an extraditable offense. They threw all that aside and then began to bungle around and ended up focusing on the one person who was not—they couldn’t explain his behavior, because he was a whistleblower. And he had—as soon as he had learned of Kozeny’s corruption, he began blowing the whistle. Of course, Bourke had no idea that this actually went far beyond Azerbaijan, far beyond the Czech Republic, and involved a series of Russian oligarchs, Russian banks, Russian officials and the third-largest oil company in Russia, which was bought and sold and profited Kozeny in the middle of this. So, this elaborate set of frauds that Kozeny was involved in were in essence covered up by the United States government, who chose instead to bring the full weight of their investigative enthusiasm against the whistleblower. And that just—to me, that shocks the conscience.

 Amy Goodman: That was Scott Armstrong, former Washington Post reporter, founder and former executive director of the National Security Archives and former chair of the Government Accountability Project. We also heard from renowned attorney, law professor and author, Michael Tigar, who’s representing Frederic Bourke, who was convicted of violating the Foreign Corrupt Practices Act for alleged knowledge of bribery in pursuit of the privatization of the state oil company in Azerbaijan.

After the break, we’ll continue our conversation with Armstrong and Tigar about this complex case of international fraud, Caspian oil, competing foreign intelligence services, and why—among the cast of characters that includes Viktor Kozeny, the Pirate of Prague; his bagman, Thomas Farrell; alleged money-laundering Swiss attorney, Hans Bodmer; an American running a bar in Saint Petersburg, Russia—the only one to go to prison in the United States was the whistleblower, Rick Bourke. Stay with us.

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 Amy Goodman: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González.

 Juan González: Well, we return now to our in-depth look in this Democracy Now! exclusive at the strange case of Frederic Bourke, who blew the whistle on a foreign bribery scam in the former Soviet republic of Azerbaijan that robbed many investors in the U.S. and abroad of hundreds of millions of dollars, but he ended up being the only one going to prison in the United States. We recently sat down with two of the most knowledgeable people on the case, journalist Scott Armstrong and attorney Michael Tigar, who is representing Rick Bourke. I asked Scott Armstrong to talk about the geopolitical importance of Azerbaijan to the United States.

 Scott Armstrong: The problem that Bourke faced as a whistleblower was that he was blowing the whistle against somebody who was beyond—essentially, enjoyed impunity. That is to say, he was blowing the whistle about the government of Azerbaijan, about the president, Heydar Aliyev, and his son, Ilham Aliyev, who was running the state oil company at the time. And Azerbaijan was absolutely critical to U.S. interests. First of all, it was the source of these enormous oil riches in the Caspian Sea. Secondly, the only route out of the Caspian Sea for not only Azerbaijani oil, but also for the oil of other former Soviet states in that region, is through Azerbaijan or Iran. And clearly, we weren’t going to encourage, given our relations with Iran even back at that point, going in that direction. In addition to that, after 9/11, the government of Azerbaijan, headed by Heydar Aliyev, was enthusiastic about the U.S. participation in a war against terror and was one of the few Islamic countries to endorse it. So it was a critical ally in that respect. And lastly, it was—because it’s located in the Caspian Sea, which is essentially the upper backdoor, if you will, to Iran, as well as looking across Russia, it became an incredibly important location for U.S. intelligence facilities over the horizon radars. When I was there in Baku later in 2007, the largest contingent of U.S. marines anywhere in the world stationed permanently was in Azerbaijan, and no one really knew it at the time. So, this was a relationship that the United States government felt it could not lose.

So, Bourke, when he was pushing the United States government and others to do something about it, was facing an enormous uphill battle. Plus, the other investors were not pleased. They were interested to learn that Kozeny had stolen their money, but they were then trying to get it back and negotiate it, and they didn’t want Kozeny indicted, and they didn’t want the complications of other investigations. But Bourke forged ahead and gave his testimony directly to the New York state’s attorney and was fully cooperative, and he met with the federal government repeatedly and gave them all the information that he had, waived his attorney-client privilege, did things that most citizens would never be advised to do, but did it in a forthright manner. Now, I’m not defending his reasons for getting involved with the investment in the first place. That was clearly to make some money. But he did it, and when he realized it was a—that it was a corrupt deal, he came forward and continued to come forward and never relented.

 Amy Goodman: I want to ask you about Rick Bourke going to the president of Azerbaijan to expose—this is what he did first—what he had learned. It might astound many people to know this, but, Scott Armstrong, if you could talk about what he did?

 Scott Armstrong: When Bourke found out that there was something wrong, that—he read a World Bank report, and he realized, from the statistics that the Azeri government had reported there, that there had—Kozeny had to be involved in a fraud. He started going to other investors and got a lawyer for Omega to work with him, and they went around doing some final due diligence after the—beginning to realize that their investment had been embezzled and lost. And in the process of it, the allegation was that Kozeny had been working with the son of the president of Azerbaijan. The son’s name was Ilham Aliyev, and is—who is now the current president. The then-president, Ilham’s father, Heydar Aliyev, was approached through the good offices of George Mitchell to get an appointment, and they got in to see him, and they went in and said, "You realize there’s gambling going on in your casino?" I mean, it was a scene out of Casablanca. And he feigned, "Oh, I’m shocked, shocked that anybody would suggest this. I’m shocked that Kozeny, who—everybody knows Kozeny’s a crook. I wouldn’t be involved with Kozeny. I woudn’t let anybody anywhere near Kozeny." Well, of course, by that point, Kozeny and his—and Heydar Aliyev’s son, Ilham, were effectively partners in all this. So, it was, I mean, a virtually comical scene that partially testifies to Bourke’s naiveté in thinking that just by blowing the whistle that the walls would come tumbling down.

 Amy Goodman: One of the reasons, Scott Armstrong, you were so interested in this, because it was—I mean, it’s like reading a John le Carré novel, but it’s a sad story because one person ends up in jail here. But to understand what happened in Azerbaijan and all of the interests there—you know, the largest Marine base in the Caspian Sea, so the U.S. has a tremendous interest there. The World Bank gets implicated. Universities get implicated. Large corporations get implicated. But could you talk about the original—the reason Kozeny had this money to go to Azerbaijan, starting in the Czech Republic, to understand this whole privatization scheme across Eastern Europe?

 Scott Armstrong: One of the policies of the United States government after the fall of the Soviet Union was to suggest a series of privatization measures so that in a socialized society that had—under a communist rule, where the state owned most of the major assets, they would essentially take the value of the entire set of assets, the public part of the state, divide it by the number of people, and issue what amounted to vouchers or shares in that. Then those vouchers could be traded, combined in different ways, and citizens would therefore participate in the privatization, in the turn of their—from a closed communist society to a market society. They’d be able to participate in that process and get back some of the value that was owned by the state. It’s never really worked that way. It’s never really worked well. It’s been corrupted repeatedly.

One of the worst cases was Czechoslovakia, where Kozeny was the principal exploiter. This was what I think interested the New York state’s attorney when Bourke came forward. They began to see how serious a set of international crimes this implied, that this was a kind of systemic theft that could take place anywhere, and it was a good—it was a poster child for that proposition that they could go after. Even today, the Czech Republic is still investigating. Lots of new information has come out. Hopefully the story is not over. But the United States government has never cooperated with the Czech investigation. They’ve instead frustrated it. They refused to provide documents. They refused to provide materials that were available. It’s only the New York state’s attorney that’s cooperated.

So, in the—when we talk about public epistemology and how we get to know things, this is a very frustrating story. A whistleblower comes forward. It’s very productive, leads to—the string begins to get pulled, and it leads to a whole international series of transactions going from Czechoslovakia, Azerbaijan, going into the heart of Russia, into the largest of institutions. And it all gets brought to ground by the lack of interest for the United States government, for reasons that are opaque. And the only person who sacrifices in this is the whistleblower.

 Amy Goodman: Let’s talk about who some of those investors were. I mean, Rick Bourke alone did not invest in privatizing the Azerbaijan oil supply. In fact, you have Columbia University. You have AIG. You have Omega Fund. Who else, Michael Tigar? Talk about who this group of investors were that lost a fortune.

 Michael Tigar: Well, the interesting thing that the—that list, if I had to recall it from memory, since I wasn’t—I didn’t know that this would be a multiple-choice exam today, would be long. But the interesting thing about Columbia University is—and this is one of the things—Judge Scheindlin is a good judge, yes.

 Juan González: This is the Columbia University investment, though, fund.

 Michael Tigar: Columbia University invested in the Kozeny’s project.

 Amy Goodman: Ten million dollars.

 Michael Tigar: Ten million. They would not have done so if this deal stunk. That is to say, they did their due diligence. They didn’t think there was any bribery. They didn’t think there was anything wrong. And yet, the testimony of those folks was excluded at trial, even though it would have shown that—you know, how could you know? Once you demonstrated that Bodmer’s testimony was suspect, how could Rick have been in a position to have the culpable knowledge?

 Amy Goodman: Let’s talk about another investor, George Mitchell, the former Senate majority leader.

 Michael Tigar: Yes. Bourke actually talked to Mitchell about this investment. Mitchell had met with Kozeny. And again, he invested in that spring of 1998 time—and eyes wide open. Everybody knows who Senator George Mitchell is. Senator George Mitchell is not somebody who is looking to be corrupt, who’s looking to be involved in corruption. He was looking to get an investment that he thought was reasonable under the circumstances. And throughout this process, he has—he has been helpful. That is, he understands that the evidence that Rick Bourke was culpably knowledgeable about bribery simply doesn’t wash.

 Amy Goodman: You know, I want to ask a question about what happened to these other investors and why they weren’t making as much a deal of their millions of dollars in losses as Rick Bourke was. Now, he hadn’t invested as much as most of them had, and yet why this hasn’t been made public by some of them. Now, Columbia loses $10 million. Maybe they don’t want to make it public. This is—right?—money for the endowment. But this leaves Rick Bourke out there alone.

 Michael Tigar: Yes, it does. I am disappointed in the other investors. Let me start with that. But, you know, I’ve been in the law practice a long time. And if you are the victim of a colossal fraud that involves not just your lunch money, but the money of other people who have reposed confidence in you and who are putting their money with you, you know, the—if you can start a lawsuit, preferably some distant place where they speak some other version of the English language, called London, and in an arbitral tribunal or in a court or whatever, and get some of the money back, that’s really all you want, because he who chases justice may catch it.

 Amy Goodman: So you want—might want Rick Bourke to be shut up, because—

 Michael Tigar: Oh, yeah, and indeed, when he went to these other investors, they were perfectly happy to say, "Well, maybe we could file a little lawsuit here, a little lawsuit there," and so on. But if—one of these days you will meet Rick Bourke and realize that that’s not his style. He stood up, and he went to the prosecutors. That’s just not the style of people in the investment community.

 Amy Goodman: We’re talking about people like Leon Cooperman, very influential hedge fund manager—

 Michael Tigar: Yes.

 Amy Goodman: —former Goldman Sachs executive, who runs Omega Capital Partners, which was—which was one of the organizations that invested.

 Juan González: Oh, the biggest investor.

 Michael Tigar: Yes, you know, well, when is the last time that a major investment firm started running around the streets claiming that they’d been defrauded and wanted to make a big deal out of it, as opposed to going someplace to see if they could get some of the money back? I don’t know. I wasn’t there.

 Amy Goodman: Let me—let me put that question to Scott Armstrong. Scott Armstrong, what about Leon Cooperman, head of Omega, major investor?

 Scott Armstrong: Well, in the beginning, when Bourke began blowing the whistle, Cooperman was—his lawyers told Bourke that he could not use some of the information, because when Bourke had gathered it, he’d gathered it with some help from one of the Omega lawyers, one of the hedge fund lawyers. But also, he was—Bourke was facing AIG, one of the other major investors, which wanted—both Cooperman and the principals in AIG wanted to settle this as quietly as they could. And when they couldn’t do that, they wanted to go to the London courts and see if they could pursue it there. But they did not want to do this in the United States. They did not want this to become a subject of a criminal investigation by the New York district attorney or by the federal government. They wanted to keep it on the quiet.

 Juan González: Interestingly, the judge in this case was Judge Shira Scheindlin, who’s also had the recent historic decision in the racial profiling case. And in her sentencing of Rick Bourke, she said, "After 10 years of supervising this case, it is still not entirely clear to me whether Mr. Bourke was a victim, or a crook, or a little bit of both." And she actually sentenced him to a lighter sentence than the prosecutors were calling for. Could you talk about the main reasons why you believe that the government’s case was defective and why Rick Bourke should not have been convicted?

 Michael Tigar: Well, the principal testimony that suggested that Bourke knew about the bribery was that of Hans Bodmer, this German-Swiss lawyer from Zurich. And he said that on February the 6th, 1998, at the Hyatt Hotel in Baku, he had received authorization from Kozeny to tell Bourke; that Bourke, who was then accompanied by a man named Evans, and Bodmer took a walk; that Bodmer explained the whole thing; and that they turned right and left, and the weather was this or that. The prosecutors had made—laid great stress on this meeting having happened in February, because Bourke didn’t invest 'til March. Turned out that flight records showed indisputably that Bourke wasn't in Baku in February.

 Amy Goodman: In Azerbaijan.

 Michael Tigar: In Azerbaijan, which is the—Baku is the capital city. Not only was he not there—

 Juan González: On that—on that day, right?

 Michael Tigar: On that day.

 Juan González: Right.

 Michael Tigar: Nor at any other time when Kozeny, Evans and Bourke could have been together in that way. Not only that, but if you look at the history of Bodmer’s proffers with the government, their notes of the meetings, he started out telling a different story. Not until he came to the February story did they offer him his plea bargain, which resulted in him getting no jail time.

 Amy Goodman: And the significance of what he said, meeting with Bourke at that time in Baku, was that he says that he explained to him they were bribing foreign officials?

 Michael Tigar: That’s right. That’s the "This is what we are doing." Farrell also testified that he had said something to Bourke. Farrell’s background and history, much of that information remains under seal. And you, as journalists, have more access to it and can talk about it more freely than I can. But the fact is that both Bodmer and Farrell got bargains that resulted in them serving no time in United States prisons, Farrell permitted to go back to Russia, and that—

 Amy Goodman: Farrell was—is an American—

 Michael Tigar: Yes.

 Amy Goodman: —who runs a bar in Russia, in Saint Petersburg.

 Michael Tigar: That’s right. Tom Farrell is—it was Kozeny’s money man. He was the bagman. That’s what he said. And—

 Amy Goodman: Does he work for U.S. intelligence?

 Michael Tigar: I believe that he works for—I believe that Farrell has connections to intelligence communities. And I’m being deliberately guarded about this, because there’s a whole sealed record that I, as a member of the bar and as a lawyer, am not permitted to talk about, and that Judge Scheindlin eventually held that the defense was not entitled to cross-examine about.

 Amy Goodman: Why would it matter?

 Michael Tigar: We live—why would it matter? Because the question here is, why is it that the United States government, having seen that the District Attorney’s Office has caught Kozeny, a thief—why is it that they would go after the guy that blew the whistle on the thievery and bribery, Rick Bourke? Why is it that the Czech citizen and the guy, the ex-patriot, and the German-Swiss lawyer all are walking free; the American citizen, philanthropist, and so on, is sitting in a minimum security jail? Well, investment in the Azerbaijan hydrocarbon industry is now safely in the hands of major petroleum companies. Is that—is that a reason? Or is it that this money launderer in Zurich and Farrell, sitting happily with his ex-pat haven bar in Saint Petersburg, are people that the government chose instead to protect?

 Amy Goodman: That was Michael Tigar, attorney representing Frederic Bourke, the whistleblower who went to the U.S. Department of Justice to expose an international criminal enterprise involving massive bribes paid to officials of the government of Azerbaijan aimed at gaining control of the state-owned oil company. Instead of pursuing the alleged criminals, federal prosecutors indicted Bourke. He is currently serving a sentence of a year and a day in federal prison in Colorado. Back to our conversation in a minute.

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 Amy Goodman: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González.

 Juan González: We return now to the case of Frederic Bourke. We recently sat down with Bourke’s attorney Michael Tigar and Scott Armstrong, an investigative journalist with decades of experience delving into complex cases of corruption, both domestically and internationally. I asked Scott Armstrong about what message the government’s prosecution of Bourke sends to other would-be whistleblowers.

 Scott Armstrong: Well, let’s start from the standpoint that a whistleblower—whistleblowers have different motivations. And it’s not the whistleblower or the whistleblower’s breath that we should be concerned about; it’s the whistle. There are really only two whistles in the United States. One is the government. The government provides an opportunity for a whistleblower to go in, and the government should then react accordingly: It should try and investigate and right wrongs, try and get to the bottom of what happened. And in order to do that, it has to give a fair opportunity, even if it wants to contest some of what the whistleblower says, for them to respond.

In this case, in the case of a trial, the—roughly speaking, before the trial—before they even began the process of the prosecution, when they first indicted him, they turned over a ton of material—some of it very relevant, some of it not so relevant—but it was a lot of material to go through. I know. I went through it. I did the whistleblower thing from the other point of a whistle, which is the way the press would do it. What is this story really about? Is it—what’s really true here? And so, we began to realize there was missing material. And I, you know, insisted that he get more material. His lawyers should go and get more material. They were very reluctant to do it. Finally, and these are not—this is not the final crew that did the trial, but the predecessor sets of attorneys who had, themselves, deep conflicts. There were conflicts of interest. They were, themselves, corrupted. But in the end, the government had to turn over three more tons of material. I mean, we’re talking about an enormous quantity of material. And they—but they did it so late that no one had an opportunity to go through it. I mean, even my group was disbanded by the time the last part of it came through.

So, that’s not the way the whistle ought to be treating a whistleblower. And the lesson here is that if you’re politically out of tune with the government, if you’re suggesting something that goes in the wrong direction from the standpoint of the federal government, that offends their intelligence objectives, offends their support for economic interests in oil and oil pipelines, offends their ability to be able to strike back at Iran—and maybe these are important interests, but if the whistleblower is facing those and nothing happens, that’s one thing. But if what happens is that whistleblower gets prosecuted, in essence, essentially to dilute him, to shut him up, to keep him from being effective in his whistleblowing, that seems to me to be where the criminality in this occurs. And that’s in the hands of the federal government.

 Juan González: I’d like to get deeper into this whole issue that you mentioned briefly earlier on about the intelligence connections to this case and the sealed portion of the proceedings on this case, still sealed to this day. It’s our understanding, because we’ve done our own reporting on this in Democracy Now!, that key figures in the intelligence community—or, former key figures in the intelligence community of both the United States and England, Sir Richard Dearlove of MI6 and James—the former head of MI6, the—Jim Pavitt, former deputy director of the CIA—

 Amy Goodman: Head of covert operations.

 Juan González: Head of covert operations—went to the court and attempted to raise what they knew about the connections of Hans Bodmer and Thomas Farrell to intelligence agencies and their role as assets. And they were denied the chance to testify, and the whole record was sealed. Now, I’d like to ask Scott Armstrong, in your own independent investigation, what you learned about the role of—especially of Hans Bodmer, but also of Tom Farrell, in being an asset for intelligence agencies beyond just this case of Rick Bourke?

 Scott Armstrong: Well, Hans Bodmer, on whom I concentrated a great deal of my effort, was the centerpiece for a variety of schemes that surrounded the glove. I mean, if there’s a—if Kozeny was Al Capone—and he really wasn’t, he was a much more minor figure—Bodmer was the Meyer Lansky. He was the chief operating officer, essentially, of this international crime series of organizations, who could take off-the-shelf companies in the British Virgin Islands or in Switzerland or Liechtenstein, and usually combinations of all of them, create special purpose entities, create histories for them, and begin to move money, launder money, to pay off officials, to do things that are essentially the complicated issues that make so opaque much of international finance and much of international corruption.

In doing so, he learns a great deal about what’s going on inside Russia. He knows most of the ministers of the Russian government, under the Putin government. He gets to know the major oligarchs of that system, the people who end up owning the major oil companies and entities of the world. He gets to know the Russian banks. He gets to know other foreign people who are serving them, other foreign officials who are corrupted by this process. And he has all this information in his Rolodex, effectively. He has it in his memory.

He gets arrested on other charges in Korea in 2003 and held for a period of time. And in order to get out of it, he begins to cooperate with the United States government. But he cooperates in a way that’s totally consistent with covering up his own activities. And he acts as if he’s just the mouthpiece or functionary for this, when in fact he’s so much more. Well, part of the cooperation agreement that he gets with the government is premised on the notion that he’ll cooperate with American intelligence, because he knows so much. And I’m not faulting American intelligence for wanting to have his information or his knowledge. It’s certainly valuable. He becomes kind of the one-man NSA of inside Russian finance, and, as such, he’s incredibly valuable to them. So, they say, "We’ll give you a free pass, but you have to cooperate with our prosecutors, who are prosecuting the Kozeny case," which, by that point, they had blown it on Kozeny, so they were really only going after the whistleblower and a few other minor figures who dropped away. So they’re really going after Rick Bourke. So, essentially, they prepare him and re-prepare him in ways that Michael Tigar has well documented in these briefs in the court of appeals.

But what happens is, Bodmer is essentially a robot of the United States government prosecutors. They say, "Here’s what you have to testify to," and he testifies to it. Now, it turns out it was totally false and couldn’t have possibly been right, because of other records that came out of—that they should have discovered along the way. They then, as has been suggested, say, "Well, that’s not our problem. It must have happened at another time, but it’s still true." Well, it shocks the conscience that an independent branch of government, the federal judiciary, in its various—both at the trial stage, court of appeals stage, at all the forums that were sought, because Bourke was a wealthy man and sought relief at all these different stages, but none of them would listen to it. None of them would say, "What really happened here? Let’s find out what really went on. Let’s give him an opportunity—let’s give the defendant an opportunity to cross-examine, fully cross-examine, the witnesses against him." And that essentially never happened, as a result. So we have this—it’s another form of secret law. It’s another form of the hubris that secret law brings, where the government can just run over somebody.

I’m not defending Bourke’s motives in investing in this kind of an enterprise. He was trying to make money. But when he discovered it was corrupt, he did, in fact, come forward and continued to say it was corrupt, which upset many applecarts. And for it, he was punished.

 Juan González: Michael Tigar, I’d like to ask you—I know you may be severely limited in what you can say about it, but it’s our understanding, and we’ve talked to officials in British intelligence who are knowledgeable about this, that the other main witness against Bourke, Tom Farrell, was actually captured in a secret videotape in Russia trying to recruit a British diplomat to work for Russian intelligence, and that diplomat was subsequently removed from their post, and that this was some of the information that Sir Richard Dearlove of MI6 was willing to testify to in court, but that was not allowed in the court because it would raise the question: Why would the United States government be putting someone on the stand against Rick Bourke, who was involved in recruiting spies for Russian intelligence?

 Michael Tigar: First, there are sealing orders, and I, as a lawyer, am subject to the sealing orders, as is everybody else, and I’m not going to violate them. Yes, there was a dispute in court about the extent of Farrell’s cross-examination. We briefed it in the court of appeals, and that part of the record is also sealed. But I will say this: You know, John Milton said, "I cannot praise a fugitive and cloistered virtue, unexercised and unbreathed, who never sallies out to see her adversary," but I challenge the United States government to unseal that record, to go into court tomorrow and unseal it, and then to come on this program—or any program, any forum they want—and let’s debate the question as to whether Tom Farrell is the sort of a person on whom you ought to ask your federal jury to rely when a question of human liberty is at stake. That far, I can go.

 Amy Goodman: Scott Armstrong, that question about intelligence?

 Scott Armstrong: In my experience, senior intelligence officials, particularly two of them from two separate governments, have never come forward in a case like this, a criminal case, or for that matter any other case, and offered their assistance to a judge and then had it rejected. Their insight would be—it’s an arcane field. Their information would be authoritative and, I think, persuasive. And to have it rejected wholesale is shocking, and I know of no other instance like it, because there is no other instance where I know that two such people have come forward.

 Juan González: Michael Tigar, I’d like to ask you, one, where is Rick Bourke now? And, two, why should the listeners or ordinary Americans care that a wealthy businessman here in the United States knowingly invested in a scheme to make money overseas and then ended up becoming a victim?

 Michael Tigar: Rick Bourke is today in the minimal security federal correctional institution in Englewood, Colorado. He’s been in there since the 10th of May, and his sentence is a year and a day. However, there’s some option that he might get out on home confinement or halfway house. That’s what happens in these minimum security institutions. It’s not a picnic, by any means.

And then the question is: Why should people care? There’s—you know, I never met Edward Snowden, so I don’t really know if he’s a worthy individual that I would want to pattern my life after. I’ve met Daniel Ellsberg a few times. You know, whistleblowers, as Scott Armstrong pointed out in his letter to Judge Scheindlin, come in all shapes and sizes and political configurations. And what I think is—but this characteristic is not unusual for Rick Bourke. He has invested millions of dollars in medical research, on such things as cures for cancer. His philanthropic activities are famous in the United States and outside the United States. Yes, he has been successful in business, but he is somebody whose standards, whose values, whose beliefs are indeed, I think, worthy of emulation. But regardless of that, and whether he is or not, there are thousands we know and millions who would willingly pick up arms and put on a weapon pack and go. There are only a few thousand, I think, many fewer, who would willingly combat an entrenched injustice. That’s what William James said when he dedicated a monument in Boston more than a hundred years ago. It is to the few who are willing to confront entrenched injustices, regardless of what else we may think about them as people or as friends or whatever, to whom we owe a very great deal indeed.

 Juan González: That was Michael Tigar, attorney representing Rick Bourke, who was indicted and jailed after blowing the whistle on a corrupt deal to gain control of Azerbaijan’s state-owned oil company. Rick Bourke is currently serving a sentence of one year and a day in federal prison of Colorado. We’ve also been talking to investigative journalist Scott Armstrong.

The U.S. Attorney’s Office for the Southern District of New York has defended its handling of the case. In a statement to Democracy Now!, spokeswoman Julie Bolcer said, quote, "After three years of Mr. Bourke’s trying to overturn a jury’s verdict of guilty, his two unsuccessful appeals to the Court of Appeals, and a denial of review by the United States Supreme Court, there is not much left to say, other than that Mr. Bourke has had every opportunity in numerous forums to make every argument he chose to make, and every challenge to his conviction has been rejected."

 Amy Goodman: We reached out to attorneys for both Hans Bodmer and Tom Farrell. Tom Farrell’s attorney, Stephen A. Best, said, quote, "The notion that Mr. Farrell is somehow associated with any intelligence efforts for any country is patently false. The United States federal courts examined this exact issue and found it to be without merit. Indeed, I have concerns for the citizens of Britain that a former intelligence official would believe such rubbish. Anyone who spends 30 minutes with Mr. Farrell at his bar would laugh at this ridiculous assertion," he said. Lawyers for Hans Bodmer did not respond to our request for comment.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

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Another US Whistleblower Behind Bars? Investor Jailed After Exposing Corrupt Azerbaijani Oil Deal

Tuesday, 15 October 2013 13:13 By Juan Gonzalez and Amy Goodman, Democracy Now! | Video Interview

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In a Democracy Now! exclusive, we look at the case of multimillionaire American businessman and philanthropist Rick Bourke, who blew the whistle on a fraudulent scheme by international criminals to gain control of the oil riches of the former Soviet Republic of Azerbaijan — only to end up as the only person sent to jail by federal prosecutors in the massive conspiracy. Since May, Bourke has been held in a federal prison, serving a term of one year and one day for violating the Foreign Corrupt Practices Act for alleged knowledge of the bribery that allegedly took place in 1998. Other investors in the Azerbaijan scheme included former Democratic Senate Majority leader George Mitchell and major institutions including Columbia University and AIG, but no one else was jailed in the United States. High-ranking former U.S. and British officials from the CIA and MI6 have raised serious concerns about the conviction of Bourke in part because the key witnesses during his trial were allegedly intelligence assets working for the U.S. government. They are not the only ones who question Bourke’s guilt. Even the judge in his case has admitted having doubts. At the time of Bourke’s sentencing, Shira Scheindlin of the Federal District Court said, "After 10 years of supervising this case, it is still not entirely clear to me whether Mr. Bourke was a victim, or a crook, or a little bit of both." We speak to Bourke’s lawyer, the law professor and renowned attorney Michael Tigar, as well as former Washington Post reporter Scott Armstrong. "Why is it that they would go after the guy that blew the whistle on the thievery and bribery, Rick Bourke?" Tigar asks. "Why is it that the Czech citizen and the guy, the ex-patriot, and the German-Swiss lawyer all are walking free; the American citizen, philanthropist, and so on, is sitting in a minimum security jail? Well, investment in the Azerbaijan hydrocarbon industry is now safely in the hands of major petroleum companies. Is that a reason?"

TRANSCRIPT:

This is a rush transcript. Copy may not be in its final form.

 Juan González: Today in a Democracy Now! exclusive, we spend the hour looking at a story of yet another whistleblower imprisoned under the Obama administration, a story that could be straight out of a Hollywood thriller. The saga centers on an American businessman and philanthropist who was caught in an amazing web of international white-collar crime and mysterious suspected double agents of powerful intelligence agencies, a man who, when he blew the whistle, ended up being indicted by federal prosecutors, convicted and sent to prison for violating the Foreign Corrupt Practices Act.

The cast of unlikely characters includes a man nicknamed the Pirate of Prague, a former U.S. senator, an Ivy League university and the presidents of the former Soviet republic of Azerbaijan.

 Amy Goodman: The story centers on a multimillionaire named Frederic Bourke, known as Rick. You might recognize the name. He is best known for co-founding the luxury handbag company Dooney & Bourke. Using profits from the handbag company, he later became a major investor in medical research, including cutting-edge cancer treatments.

Today Rick Bourke is locked up at Englewood, a minimum security facility in the suburbs of Denver, Colorado, after he was convicted in U.S. federal court in 2009 of conspiring to pay bribes to government leaders in Azerbaijan as part of a risky scheme to buy the state oil company in the former Soviet republic. Bourke is serving a sentence of one year and one day, after he unsuccessfully appealed his conviction. In addition, he was ordered to pay a $1 million fine and serve three years of supervised release following the prison term. Prosecutors never alleged Bourke had actually paid bribes, only that he knew of the bribes paid to the Azerbaijani officials.

 Juan González: Azerbaijan is a key U.S. ally in Central Asia. Located on the western shore of the Caspian Sea, the former Soviet republic shares a border with Iran and is a key transit route for U.S. troops and supplies heading for Afghanistan. The country has been run by the same family since 1993, first by Heydar Aliyev and then his son Ilham. Ilham won re-election just last week after a controversial vote.

Frederic Bourke was one of many prominent investors in the deal but the only one who was jailed in the United States. Other investors included former Democratic Senate Majority Leader George Mitchell and major institutions including Columbia University and AIG.

Bourke’s supporters say he’s a whistleblower who helped expose the shadowy underworld of global finance once he realized he was being swindled. High-ranking former U.S. and British officials from the CIA and MI6 have also raised serious concerns about the conviction of Bourke, in part because the key witnesses during his trials were alleged intelligence assets working for the U.S. government.

They aren’t the only ones who question Bourke’s guilt. Even the judge in his case has admitted having doubts. At the time of Bourke’s sentencing, Shira Scheindlin of the Federal District Court said, quote, "After 10 years of supervising this case, it is still not entirely clear to me whether Mr. Bourke was a victim, or a crook, or a little [bit] of both."

 Amy Goodman: While Bourke remains in jail, the masterminds and key players behind the bribery scheme—the men he blew the whistle on—remain free. Viktor Kozeny, who is known as the Pirate of Prague, lives in a gated community in the Bahamas. Attorney Hans Bodmer serves on the board of a Swiss bank. And a third man, a U.S. citizen named Tom Farrell, lives in Saint Petersburg, Russia, where he runs a bar. Bodmer and Farrell pleaded guilty and signed agreements to provide testimony in related cases.

We recently spoke to Michael Tigar, the renowned attorney, law professor and author, who is representing Rick Bourke. We also spoke to Scott Armstrong, a journalist formerly with The Washington Post who has closely followed the case. He is founder and former executive director of the National Security Archives and former chairperson of the Government Accountability Project. I began by asking attorney Michael Tigar to lay out the story.

 Michael Tigar: In 1998, in the spring, Rick Bourke invested—he and his family—$8 million in a plan formed by Viktor Kozeny, a Czech entrepreneur, for the privatization of the hydrocarbon industry of Azerbaijan. Kozeny was a crook. He stole every bit of Rick Bourke’s money and all of the other investors’ money. He bribed Azeri officials. He lives today happily unextradited in the Bahamas. The scheme was put together by a Swiss lawyer named Hans Bodmer, who was given a no-jail plea by the United States government and who sits happily in Zurich today laundering money for Russian oligarchs, and by a fellow named Tom Farrell, who was the bagman, who operates—an American citizen—operates happily—the Russians apparently like him—a bar in Saint Petersburg.

When Rick Bourke found out about the stealing in 1998, he went to the New York District Attorney’s Office, and he appeared before a grand jury in the state of New York. They indicted Kozeny for theft. Bourke then went to the federal government. They said, "Oh, no, Kozeny’s not a thief. He might be guilty of some other offenses." They indicted Kozeny for offenses for which, as a matter of fact, he couldn’t be extradited. They could have extradited him on the theft charge. And instead, they indicted Bourke on the testimony of Bodmer and Farrell that Bourke had known about the bribery of Azeri officials, testimony that, perhaps in the course of this trial, we can deconstruct, because it was ill-motivated.

Today, Rick Bourke is in jail. I regard him as a whistleblower. And we were unsuccessful, even after a United States attorney stood in the United States Court of Appeals in Lower Manhattan and told the court that the United States Attorney’s Office in this judicial district is perfectly happy to put on false testimony knowing that it’s false, that it happens all the time, but that Rick Bourke isn’t entitled to any relief on that basis.

 Juan González: I’d like to bring Scott Armstrong in, a former Washington Post reporter, founder of the National Security Archive and, for a time, a chairman of the board of the Government Accountability Project. Scott, how did you get involved in this case? And what is the broader issue involved here of the case of Rick Bourke?

 Scott Armstrong: Well, after Bourke had been indicted, he was seeking to establish the fact that he was a whistleblower and at one point went to the Government Accountability Project, a nonprofit organization which helps and protects the ability of whistleblowers to speak out. They turned to me and asked if I’d be interested in taking on this case, taking a look at what happened and seeing if Bourke was a whistleblower. I should point out that I’m speaking today for myself and not on behalf of the Government Accountability Project, but that was my route in. I reluctantly accepted it because it seemed like an opportunity to look at a case of major international corruption, a case where there was massive fraud by Kozeny, but also where there were a lot of other things going on. This fellow Hans Bodmer, who was the key witness against Bourke, was also the chief operating officer for not only Kozeny, but for a whole variety of international crooks, for the Russian oligarchy and many Russian officials—an international criminal of the first order. And you don’t get an opportunity to look into these matters unless you have some access to information which is normally not released by the government or sealed. And what Bourke did was he said he would give us access, total access, without any—any controls or restraints, to look at all the records that he had, all the information he had. We could ask anybody. He waived his attorney-client privilege and so forth. So I took on the project and spent nearly two years, a year and a half, looking at the—at what actually happened.

What shocked me, and I think is what is important here, is that the government very deliberately—the United States government very deliberately ignored what happened. Their interest was not in what happened, in finding out what—where this actually led, but in going after a relatively narrow cast of characters. They were in the process of—they essentially interrupted a very effective investigation conducted by the New York District Attorney’s Office, which had a—remarkably enough, by coincidence, a very competent attorney named Miriam Klipper, who went to the Czech Republic, where Kozeny originally was, and began investigating and was moving along, along with Czech investigators, very rapidly, and ultimately indicted Kozeny.

In the meantime, the federal government was approached by Kozeny, who himself was—because of Bourke’s whistleblowing, was being sued by other investors in London and was losing the case badly. So, Kozeny took a remarkable—a remarkable strategy and came to the United States government through attorneys just at the change in the administrations, just as the Clinton administration was leaving and the Bush administration was arriving. And he essentially said, "I’m outside your jurisdiction. You’re never going to get me. But I am in fact involved in an international crime. But it’s my investors who really led me to do it." And he then said, "You can get the investors. You can’t get me. And I’ll cooperate with you," and began telling a story. And the principle there was that if he could establish the United States government interest in that fact, that they were all crooks, then in the London courts, where Kozeny stood to lose hundreds of millions of dollars, the courts couldn’t rule in the favor of the investors, because the investors would be perceived to have unclean hands and could not—could not recover their assets as a result. So, it was a negotiating strategy, effectively, but it worked.

And once the government began its investigation—the United States government began its investigation, it threw aside, it didn’t cooperate with the New York state—the New York District Attorney’s Office in their investigation, which was quite far advanced and quite complete, and it included already an indictment, an indictment for an extraditable offense. They threw all that aside and then began to bungle around and ended up focusing on the one person who was not—they couldn’t explain his behavior, because he was a whistleblower. And he had—as soon as he had learned of Kozeny’s corruption, he began blowing the whistle. Of course, Bourke had no idea that this actually went far beyond Azerbaijan, far beyond the Czech Republic, and involved a series of Russian oligarchs, Russian banks, Russian officials and the third-largest oil company in Russia, which was bought and sold and profited Kozeny in the middle of this. So, this elaborate set of frauds that Kozeny was involved in were in essence covered up by the United States government, who chose instead to bring the full weight of their investigative enthusiasm against the whistleblower. And that just—to me, that shocks the conscience.

 Amy Goodman: That was Scott Armstrong, former Washington Post reporter, founder and former executive director of the National Security Archives and former chair of the Government Accountability Project. We also heard from renowned attorney, law professor and author, Michael Tigar, who’s representing Frederic Bourke, who was convicted of violating the Foreign Corrupt Practices Act for alleged knowledge of bribery in pursuit of the privatization of the state oil company in Azerbaijan.

After the break, we’ll continue our conversation with Armstrong and Tigar about this complex case of international fraud, Caspian oil, competing foreign intelligence services, and why—among the cast of characters that includes Viktor Kozeny, the Pirate of Prague; his bagman, Thomas Farrell; alleged money-laundering Swiss attorney, Hans Bodmer; an American running a bar in Saint Petersburg, Russia—the only one to go to prison in the United States was the whistleblower, Rick Bourke. Stay with us.

[break]

 Amy Goodman: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González.

 Juan González: Well, we return now to our in-depth look in this Democracy Now! exclusive at the strange case of Frederic Bourke, who blew the whistle on a foreign bribery scam in the former Soviet republic of Azerbaijan that robbed many investors in the U.S. and abroad of hundreds of millions of dollars, but he ended up being the only one going to prison in the United States. We recently sat down with two of the most knowledgeable people on the case, journalist Scott Armstrong and attorney Michael Tigar, who is representing Rick Bourke. I asked Scott Armstrong to talk about the geopolitical importance of Azerbaijan to the United States.

 Scott Armstrong: The problem that Bourke faced as a whistleblower was that he was blowing the whistle against somebody who was beyond—essentially, enjoyed impunity. That is to say, he was blowing the whistle about the government of Azerbaijan, about the president, Heydar Aliyev, and his son, Ilham Aliyev, who was running the state oil company at the time. And Azerbaijan was absolutely critical to U.S. interests. First of all, it was the source of these enormous oil riches in the Caspian Sea. Secondly, the only route out of the Caspian Sea for not only Azerbaijani oil, but also for the oil of other former Soviet states in that region, is through Azerbaijan or Iran. And clearly, we weren’t going to encourage, given our relations with Iran even back at that point, going in that direction. In addition to that, after 9/11, the government of Azerbaijan, headed by Heydar Aliyev, was enthusiastic about the U.S. participation in a war against terror and was one of the few Islamic countries to endorse it. So it was a critical ally in that respect. And lastly, it was—because it’s located in the Caspian Sea, which is essentially the upper backdoor, if you will, to Iran, as well as looking across Russia, it became an incredibly important location for U.S. intelligence facilities over the horizon radars. When I was there in Baku later in 2007, the largest contingent of U.S. marines anywhere in the world stationed permanently was in Azerbaijan, and no one really knew it at the time. So, this was a relationship that the United States government felt it could not lose.

So, Bourke, when he was pushing the United States government and others to do something about it, was facing an enormous uphill battle. Plus, the other investors were not pleased. They were interested to learn that Kozeny had stolen their money, but they were then trying to get it back and negotiate it, and they didn’t want Kozeny indicted, and they didn’t want the complications of other investigations. But Bourke forged ahead and gave his testimony directly to the New York state’s attorney and was fully cooperative, and he met with the federal government repeatedly and gave them all the information that he had, waived his attorney-client privilege, did things that most citizens would never be advised to do, but did it in a forthright manner. Now, I’m not defending his reasons for getting involved with the investment in the first place. That was clearly to make some money. But he did it, and when he realized it was a—that it was a corrupt deal, he came forward and continued to come forward and never relented.

 Amy Goodman: I want to ask you about Rick Bourke going to the president of Azerbaijan to expose—this is what he did first—what he had learned. It might astound many people to know this, but, Scott Armstrong, if you could talk about what he did?

 Scott Armstrong: When Bourke found out that there was something wrong, that—he read a World Bank report, and he realized, from the statistics that the Azeri government had reported there, that there had—Kozeny had to be involved in a fraud. He started going to other investors and got a lawyer for Omega to work with him, and they went around doing some final due diligence after the—beginning to realize that their investment had been embezzled and lost. And in the process of it, the allegation was that Kozeny had been working with the son of the president of Azerbaijan. The son’s name was Ilham Aliyev, and is—who is now the current president. The then-president, Ilham’s father, Heydar Aliyev, was approached through the good offices of George Mitchell to get an appointment, and they got in to see him, and they went in and said, "You realize there’s gambling going on in your casino?" I mean, it was a scene out of Casablanca. And he feigned, "Oh, I’m shocked, shocked that anybody would suggest this. I’m shocked that Kozeny, who—everybody knows Kozeny’s a crook. I wouldn’t be involved with Kozeny. I woudn’t let anybody anywhere near Kozeny." Well, of course, by that point, Kozeny and his—and Heydar Aliyev’s son, Ilham, were effectively partners in all this. So, it was, I mean, a virtually comical scene that partially testifies to Bourke’s naiveté in thinking that just by blowing the whistle that the walls would come tumbling down.

 Amy Goodman: One of the reasons, Scott Armstrong, you were so interested in this, because it was—I mean, it’s like reading a John le Carré novel, but it’s a sad story because one person ends up in jail here. But to understand what happened in Azerbaijan and all of the interests there—you know, the largest Marine base in the Caspian Sea, so the U.S. has a tremendous interest there. The World Bank gets implicated. Universities get implicated. Large corporations get implicated. But could you talk about the original—the reason Kozeny had this money to go to Azerbaijan, starting in the Czech Republic, to understand this whole privatization scheme across Eastern Europe?

 Scott Armstrong: One of the policies of the United States government after the fall of the Soviet Union was to suggest a series of privatization measures so that in a socialized society that had—under a communist rule, where the state owned most of the major assets, they would essentially take the value of the entire set of assets, the public part of the state, divide it by the number of people, and issue what amounted to vouchers or shares in that. Then those vouchers could be traded, combined in different ways, and citizens would therefore participate in the privatization, in the turn of their—from a closed communist society to a market society. They’d be able to participate in that process and get back some of the value that was owned by the state. It’s never really worked that way. It’s never really worked well. It’s been corrupted repeatedly.

One of the worst cases was Czechoslovakia, where Kozeny was the principal exploiter. This was what I think interested the New York state’s attorney when Bourke came forward. They began to see how serious a set of international crimes this implied, that this was a kind of systemic theft that could take place anywhere, and it was a good—it was a poster child for that proposition that they could go after. Even today, the Czech Republic is still investigating. Lots of new information has come out. Hopefully the story is not over. But the United States government has never cooperated with the Czech investigation. They’ve instead frustrated it. They refused to provide documents. They refused to provide materials that were available. It’s only the New York state’s attorney that’s cooperated.

So, in the—when we talk about public epistemology and how we get to know things, this is a very frustrating story. A whistleblower comes forward. It’s very productive, leads to—the string begins to get pulled, and it leads to a whole international series of transactions going from Czechoslovakia, Azerbaijan, going into the heart of Russia, into the largest of institutions. And it all gets brought to ground by the lack of interest for the United States government, for reasons that are opaque. And the only person who sacrifices in this is the whistleblower.

 Amy Goodman: Let’s talk about who some of those investors were. I mean, Rick Bourke alone did not invest in privatizing the Azerbaijan oil supply. In fact, you have Columbia University. You have AIG. You have Omega Fund. Who else, Michael Tigar? Talk about who this group of investors were that lost a fortune.

 Michael Tigar: Well, the interesting thing that the—that list, if I had to recall it from memory, since I wasn’t—I didn’t know that this would be a multiple-choice exam today, would be long. But the interesting thing about Columbia University is—and this is one of the things—Judge Scheindlin is a good judge, yes.

 Juan González: This is the Columbia University investment, though, fund.

 Michael Tigar: Columbia University invested in the Kozeny’s project.

 Amy Goodman: Ten million dollars.

 Michael Tigar: Ten million. They would not have done so if this deal stunk. That is to say, they did their due diligence. They didn’t think there was any bribery. They didn’t think there was anything wrong. And yet, the testimony of those folks was excluded at trial, even though it would have shown that—you know, how could you know? Once you demonstrated that Bodmer’s testimony was suspect, how could Rick have been in a position to have the culpable knowledge?

 Amy Goodman: Let’s talk about another investor, George Mitchell, the former Senate majority leader.

 Michael Tigar: Yes. Bourke actually talked to Mitchell about this investment. Mitchell had met with Kozeny. And again, he invested in that spring of 1998 time—and eyes wide open. Everybody knows who Senator George Mitchell is. Senator George Mitchell is not somebody who is looking to be corrupt, who’s looking to be involved in corruption. He was looking to get an investment that he thought was reasonable under the circumstances. And throughout this process, he has—he has been helpful. That is, he understands that the evidence that Rick Bourke was culpably knowledgeable about bribery simply doesn’t wash.

 Amy Goodman: You know, I want to ask a question about what happened to these other investors and why they weren’t making as much a deal of their millions of dollars in losses as Rick Bourke was. Now, he hadn’t invested as much as most of them had, and yet why this hasn’t been made public by some of them. Now, Columbia loses $10 million. Maybe they don’t want to make it public. This is—right?—money for the endowment. But this leaves Rick Bourke out there alone.

 Michael Tigar: Yes, it does. I am disappointed in the other investors. Let me start with that. But, you know, I’ve been in the law practice a long time. And if you are the victim of a colossal fraud that involves not just your lunch money, but the money of other people who have reposed confidence in you and who are putting their money with you, you know, the—if you can start a lawsuit, preferably some distant place where they speak some other version of the English language, called London, and in an arbitral tribunal or in a court or whatever, and get some of the money back, that’s really all you want, because he who chases justice may catch it.

 Amy Goodman: So you want—might want Rick Bourke to be shut up, because—

 Michael Tigar: Oh, yeah, and indeed, when he went to these other investors, they were perfectly happy to say, "Well, maybe we could file a little lawsuit here, a little lawsuit there," and so on. But if—one of these days you will meet Rick Bourke and realize that that’s not his style. He stood up, and he went to the prosecutors. That’s just not the style of people in the investment community.

 Amy Goodman: We’re talking about people like Leon Cooperman, very influential hedge fund manager—

 Michael Tigar: Yes.

 Amy Goodman: —former Goldman Sachs executive, who runs Omega Capital Partners, which was—which was one of the organizations that invested.

 Juan González: Oh, the biggest investor.

 Michael Tigar: Yes, you know, well, when is the last time that a major investment firm started running around the streets claiming that they’d been defrauded and wanted to make a big deal out of it, as opposed to going someplace to see if they could get some of the money back? I don’t know. I wasn’t there.

 Amy Goodman: Let me—let me put that question to Scott Armstrong. Scott Armstrong, what about Leon Cooperman, head of Omega, major investor?

 Scott Armstrong: Well, in the beginning, when Bourke began blowing the whistle, Cooperman was—his lawyers told Bourke that he could not use some of the information, because when Bourke had gathered it, he’d gathered it with some help from one of the Omega lawyers, one of the hedge fund lawyers. But also, he was—Bourke was facing AIG, one of the other major investors, which wanted—both Cooperman and the principals in AIG wanted to settle this as quietly as they could. And when they couldn’t do that, they wanted to go to the London courts and see if they could pursue it there. But they did not want to do this in the United States. They did not want this to become a subject of a criminal investigation by the New York district attorney or by the federal government. They wanted to keep it on the quiet.

 Juan González: Interestingly, the judge in this case was Judge Shira Scheindlin, who’s also had the recent historic decision in the racial profiling case. And in her sentencing of Rick Bourke, she said, "After 10 years of supervising this case, it is still not entirely clear to me whether Mr. Bourke was a victim, or a crook, or a little bit of both." And she actually sentenced him to a lighter sentence than the prosecutors were calling for. Could you talk about the main reasons why you believe that the government’s case was defective and why Rick Bourke should not have been convicted?

 Michael Tigar: Well, the principal testimony that suggested that Bourke knew about the bribery was that of Hans Bodmer, this German-Swiss lawyer from Zurich. And he said that on February the 6th, 1998, at the Hyatt Hotel in Baku, he had received authorization from Kozeny to tell Bourke; that Bourke, who was then accompanied by a man named Evans, and Bodmer took a walk; that Bodmer explained the whole thing; and that they turned right and left, and the weather was this or that. The prosecutors had made—laid great stress on this meeting having happened in February, because Bourke didn’t invest 'til March. Turned out that flight records showed indisputably that Bourke wasn't in Baku in February.

 Amy Goodman: In Azerbaijan.

 Michael Tigar: In Azerbaijan, which is the—Baku is the capital city. Not only was he not there—

 Juan González: On that—on that day, right?

 Michael Tigar: On that day.

 Juan González: Right.

 Michael Tigar: Nor at any other time when Kozeny, Evans and Bourke could have been together in that way. Not only that, but if you look at the history of Bodmer’s proffers with the government, their notes of the meetings, he started out telling a different story. Not until he came to the February story did they offer him his plea bargain, which resulted in him getting no jail time.

 Amy Goodman: And the significance of what he said, meeting with Bourke at that time in Baku, was that he says that he explained to him they were bribing foreign officials?

 Michael Tigar: That’s right. That’s the "This is what we are doing." Farrell also testified that he had said something to Bourke. Farrell’s background and history, much of that information remains under seal. And you, as journalists, have more access to it and can talk about it more freely than I can. But the fact is that both Bodmer and Farrell got bargains that resulted in them serving no time in United States prisons, Farrell permitted to go back to Russia, and that—

 Amy Goodman: Farrell was—is an American—

 Michael Tigar: Yes.

 Amy Goodman: —who runs a bar in Russia, in Saint Petersburg.

 Michael Tigar: That’s right. Tom Farrell is—it was Kozeny’s money man. He was the bagman. That’s what he said. And—

 Amy Goodman: Does he work for U.S. intelligence?

 Michael Tigar: I believe that he works for—I believe that Farrell has connections to intelligence communities. And I’m being deliberately guarded about this, because there’s a whole sealed record that I, as a member of the bar and as a lawyer, am not permitted to talk about, and that Judge Scheindlin eventually held that the defense was not entitled to cross-examine about.

 Amy Goodman: Why would it matter?

 Michael Tigar: We live—why would it matter? Because the question here is, why is it that the United States government, having seen that the District Attorney’s Office has caught Kozeny, a thief—why is it that they would go after the guy that blew the whistle on the thievery and bribery, Rick Bourke? Why is it that the Czech citizen and the guy, the ex-patriot, and the German-Swiss lawyer all are walking free; the American citizen, philanthropist, and so on, is sitting in a minimum security jail? Well, investment in the Azerbaijan hydrocarbon industry is now safely in the hands of major petroleum companies. Is that—is that a reason? Or is it that this money launderer in Zurich and Farrell, sitting happily with his ex-pat haven bar in Saint Petersburg, are people that the government chose instead to protect?

 Amy Goodman: That was Michael Tigar, attorney representing Frederic Bourke, the whistleblower who went to the U.S. Department of Justice to expose an international criminal enterprise involving massive bribes paid to officials of the government of Azerbaijan aimed at gaining control of the state-owned oil company. Instead of pursuing the alleged criminals, federal prosecutors indicted Bourke. He is currently serving a sentence of a year and a day in federal prison in Colorado. Back to our conversation in a minute.

[break]

 Amy Goodman: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González.

 Juan González: We return now to the case of Frederic Bourke. We recently sat down with Bourke’s attorney Michael Tigar and Scott Armstrong, an investigative journalist with decades of experience delving into complex cases of corruption, both domestically and internationally. I asked Scott Armstrong about what message the government’s prosecution of Bourke sends to other would-be whistleblowers.

 Scott Armstrong: Well, let’s start from the standpoint that a whistleblower—whistleblowers have different motivations. And it’s not the whistleblower or the whistleblower’s breath that we should be concerned about; it’s the whistle. There are really only two whistles in the United States. One is the government. The government provides an opportunity for a whistleblower to go in, and the government should then react accordingly: It should try and investigate and right wrongs, try and get to the bottom of what happened. And in order to do that, it has to give a fair opportunity, even if it wants to contest some of what the whistleblower says, for them to respond.

In this case, in the case of a trial, the—roughly speaking, before the trial—before they even began the process of the prosecution, when they first indicted him, they turned over a ton of material—some of it very relevant, some of it not so relevant—but it was a lot of material to go through. I know. I went through it. I did the whistleblower thing from the other point of a whistle, which is the way the press would do it. What is this story really about? Is it—what’s really true here? And so, we began to realize there was missing material. And I, you know, insisted that he get more material. His lawyers should go and get more material. They were very reluctant to do it. Finally, and these are not—this is not the final crew that did the trial, but the predecessor sets of attorneys who had, themselves, deep conflicts. There were conflicts of interest. They were, themselves, corrupted. But in the end, the government had to turn over three more tons of material. I mean, we’re talking about an enormous quantity of material. And they—but they did it so late that no one had an opportunity to go through it. I mean, even my group was disbanded by the time the last part of it came through.

So, that’s not the way the whistle ought to be treating a whistleblower. And the lesson here is that if you’re politically out of tune with the government, if you’re suggesting something that goes in the wrong direction from the standpoint of the federal government, that offends their intelligence objectives, offends their support for economic interests in oil and oil pipelines, offends their ability to be able to strike back at Iran—and maybe these are important interests, but if the whistleblower is facing those and nothing happens, that’s one thing. But if what happens is that whistleblower gets prosecuted, in essence, essentially to dilute him, to shut him up, to keep him from being effective in his whistleblowing, that seems to me to be where the criminality in this occurs. And that’s in the hands of the federal government.

 Juan González: I’d like to get deeper into this whole issue that you mentioned briefly earlier on about the intelligence connections to this case and the sealed portion of the proceedings on this case, still sealed to this day. It’s our understanding, because we’ve done our own reporting on this in Democracy Now!, that key figures in the intelligence community—or, former key figures in the intelligence community of both the United States and England, Sir Richard Dearlove of MI6 and James—the former head of MI6, the—Jim Pavitt, former deputy director of the CIA—

 Amy Goodman: Head of covert operations.

 Juan González: Head of covert operations—went to the court and attempted to raise what they knew about the connections of Hans Bodmer and Thomas Farrell to intelligence agencies and their role as assets. And they were denied the chance to testify, and the whole record was sealed. Now, I’d like to ask Scott Armstrong, in your own independent investigation, what you learned about the role of—especially of Hans Bodmer, but also of Tom Farrell, in being an asset for intelligence agencies beyond just this case of Rick Bourke?

 Scott Armstrong: Well, Hans Bodmer, on whom I concentrated a great deal of my effort, was the centerpiece for a variety of schemes that surrounded the glove. I mean, if there’s a—if Kozeny was Al Capone—and he really wasn’t, he was a much more minor figure—Bodmer was the Meyer Lansky. He was the chief operating officer, essentially, of this international crime series of organizations, who could take off-the-shelf companies in the British Virgin Islands or in Switzerland or Liechtenstein, and usually combinations of all of them, create special purpose entities, create histories for them, and begin to move money, launder money, to pay off officials, to do things that are essentially the complicated issues that make so opaque much of international finance and much of international corruption.

In doing so, he learns a great deal about what’s going on inside Russia. He knows most of the ministers of the Russian government, under the Putin government. He gets to know the major oligarchs of that system, the people who end up owning the major oil companies and entities of the world. He gets to know the Russian banks. He gets to know other foreign people who are serving them, other foreign officials who are corrupted by this process. And he has all this information in his Rolodex, effectively. He has it in his memory.

He gets arrested on other charges in Korea in 2003 and held for a period of time. And in order to get out of it, he begins to cooperate with the United States government. But he cooperates in a way that’s totally consistent with covering up his own activities. And he acts as if he’s just the mouthpiece or functionary for this, when in fact he’s so much more. Well, part of the cooperation agreement that he gets with the government is premised on the notion that he’ll cooperate with American intelligence, because he knows so much. And I’m not faulting American intelligence for wanting to have his information or his knowledge. It’s certainly valuable. He becomes kind of the one-man NSA of inside Russian finance, and, as such, he’s incredibly valuable to them. So, they say, "We’ll give you a free pass, but you have to cooperate with our prosecutors, who are prosecuting the Kozeny case," which, by that point, they had blown it on Kozeny, so they were really only going after the whistleblower and a few other minor figures who dropped away. So they’re really going after Rick Bourke. So, essentially, they prepare him and re-prepare him in ways that Michael Tigar has well documented in these briefs in the court of appeals.

But what happens is, Bodmer is essentially a robot of the United States government prosecutors. They say, "Here’s what you have to testify to," and he testifies to it. Now, it turns out it was totally false and couldn’t have possibly been right, because of other records that came out of—that they should have discovered along the way. They then, as has been suggested, say, "Well, that’s not our problem. It must have happened at another time, but it’s still true." Well, it shocks the conscience that an independent branch of government, the federal judiciary, in its various—both at the trial stage, court of appeals stage, at all the forums that were sought, because Bourke was a wealthy man and sought relief at all these different stages, but none of them would listen to it. None of them would say, "What really happened here? Let’s find out what really went on. Let’s give him an opportunity—let’s give the defendant an opportunity to cross-examine, fully cross-examine, the witnesses against him." And that essentially never happened, as a result. So we have this—it’s another form of secret law. It’s another form of the hubris that secret law brings, where the government can just run over somebody.

I’m not defending Bourke’s motives in investing in this kind of an enterprise. He was trying to make money. But when he discovered it was corrupt, he did, in fact, come forward and continued to say it was corrupt, which upset many applecarts. And for it, he was punished.

 Juan González: Michael Tigar, I’d like to ask you—I know you may be severely limited in what you can say about it, but it’s our understanding, and we’ve talked to officials in British intelligence who are knowledgeable about this, that the other main witness against Bourke, Tom Farrell, was actually captured in a secret videotape in Russia trying to recruit a British diplomat to work for Russian intelligence, and that diplomat was subsequently removed from their post, and that this was some of the information that Sir Richard Dearlove of MI6 was willing to testify to in court, but that was not allowed in the court because it would raise the question: Why would the United States government be putting someone on the stand against Rick Bourke, who was involved in recruiting spies for Russian intelligence?

 Michael Tigar: First, there are sealing orders, and I, as a lawyer, am subject to the sealing orders, as is everybody else, and I’m not going to violate them. Yes, there was a dispute in court about the extent of Farrell’s cross-examination. We briefed it in the court of appeals, and that part of the record is also sealed. But I will say this: You know, John Milton said, "I cannot praise a fugitive and cloistered virtue, unexercised and unbreathed, who never sallies out to see her adversary," but I challenge the United States government to unseal that record, to go into court tomorrow and unseal it, and then to come on this program—or any program, any forum they want—and let’s debate the question as to whether Tom Farrell is the sort of a person on whom you ought to ask your federal jury to rely when a question of human liberty is at stake. That far, I can go.

 Amy Goodman: Scott Armstrong, that question about intelligence?

 Scott Armstrong: In my experience, senior intelligence officials, particularly two of them from two separate governments, have never come forward in a case like this, a criminal case, or for that matter any other case, and offered their assistance to a judge and then had it rejected. Their insight would be—it’s an arcane field. Their information would be authoritative and, I think, persuasive. And to have it rejected wholesale is shocking, and I know of no other instance like it, because there is no other instance where I know that two such people have come forward.

 Juan González: Michael Tigar, I’d like to ask you, one, where is Rick Bourke now? And, two, why should the listeners or ordinary Americans care that a wealthy businessman here in the United States knowingly invested in a scheme to make money overseas and then ended up becoming a victim?

 Michael Tigar: Rick Bourke is today in the minimal security federal correctional institution in Englewood, Colorado. He’s been in there since the 10th of May, and his sentence is a year and a day. However, there’s some option that he might get out on home confinement or halfway house. That’s what happens in these minimum security institutions. It’s not a picnic, by any means.

And then the question is: Why should people care? There’s—you know, I never met Edward Snowden, so I don’t really know if he’s a worthy individual that I would want to pattern my life after. I’ve met Daniel Ellsberg a few times. You know, whistleblowers, as Scott Armstrong pointed out in his letter to Judge Scheindlin, come in all shapes and sizes and political configurations. And what I think is—but this characteristic is not unusual for Rick Bourke. He has invested millions of dollars in medical research, on such things as cures for cancer. His philanthropic activities are famous in the United States and outside the United States. Yes, he has been successful in business, but he is somebody whose standards, whose values, whose beliefs are indeed, I think, worthy of emulation. But regardless of that, and whether he is or not, there are thousands we know and millions who would willingly pick up arms and put on a weapon pack and go. There are only a few thousand, I think, many fewer, who would willingly combat an entrenched injustice. That’s what William James said when he dedicated a monument in Boston more than a hundred years ago. It is to the few who are willing to confront entrenched injustices, regardless of what else we may think about them as people or as friends or whatever, to whom we owe a very great deal indeed.

 Juan González: That was Michael Tigar, attorney representing Rick Bourke, who was indicted and jailed after blowing the whistle on a corrupt deal to gain control of Azerbaijan’s state-owned oil company. Rick Bourke is currently serving a sentence of one year and a day in federal prison of Colorado. We’ve also been talking to investigative journalist Scott Armstrong.

The U.S. Attorney’s Office for the Southern District of New York has defended its handling of the case. In a statement to Democracy Now!, spokeswoman Julie Bolcer said, quote, "After three years of Mr. Bourke’s trying to overturn a jury’s verdict of guilty, his two unsuccessful appeals to the Court of Appeals, and a denial of review by the United States Supreme Court, there is not much left to say, other than that Mr. Bourke has had every opportunity in numerous forums to make every argument he chose to make, and every challenge to his conviction has been rejected."

 Amy Goodman: We reached out to attorneys for both Hans Bodmer and Tom Farrell. Tom Farrell’s attorney, Stephen A. Best, said, quote, "The notion that Mr. Farrell is somehow associated with any intelligence efforts for any country is patently false. The United States federal courts examined this exact issue and found it to be without merit. Indeed, I have concerns for the citizens of Britain that a former intelligence official would believe such rubbish. Anyone who spends 30 minutes with Mr. Farrell at his bar would laugh at this ridiculous assertion," he said. Lawyers for Hans Bodmer did not respond to our request for comment.

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