MANHATTAN (CN) – Former Senator George Mitchell’s composure was tested – and demonstrated – when defense attorneys called him as a witness in a federal trial of his “dear friend” Frederic Bourke, who is accused of bribing officials in Azerbaijan to privatize its state oil industry. Evidence submitted included a 10-page transcript of a Bourke phone call with business associates.
As a special envoy for the Clinton administration, Mitchell brokered peace agreements between England and Northern Ireland. President Obama has named him special envoy for negotiations between Israel and the Palestinians.
Bourke’s attorneys called Mitchell to testify because he invested $200,000 through Bourke in companies belonging to Viktor Kozeny, who allegedly has acknowledged the bribes and is living as a fugitive in the Bahamas.
Mitchell has not been charged with any wrongdoing. But his friend Bourke faces up to 30 years in prison if convicted of violating the Foreign Corrupt Practices Act – a law that Sen. Mitchell helped to enact.
Bourke also is accused of money laundering and making false statements during an FBI investigation.
Mitchell’s busy schedule caused a shake-up in court procedure. Trial began an hour earlier than usual, and the defense called him to testify before prosecutors had finished calling their witnesses.
During almost four hours of testimony, the former Democratic senator from Maine recounted a business investment that went disastrously awry almost simultaneously with the crowning achievement of his career – the peace agreement between England and Northern Ireland.
Mitchell listened to a tape of his friend Bourke, whom he had not seen for six years, telling colleagues that “George will do anything I suggest.” Bourke apparently was referring to what he called “a scheme that will get us out of the civil and criminal liability issues” that would arise if Kozeny were discovered to have bribed foreign officials.
Mitchell testified that he met Bourke when he was a senator, and the businessman, who had a summer house in Maine, worked with David Rockefeller to get federal funding for Arcadia National Park. Bourke’s philanthropic effort was successful, Mitchell said, and they became friends.
Mitchell said he was at a crucial stage of his negotiations in Northern Ireland when Bourke approached him about investing in companies involved in Azeri privatization.
“It seemed like a reasonable business plan and project based on what I had heard,” Mitchell said.
He said that between peace negotiations and the recent birth of his son, he had little time to research it, but he trusted his friend enough to contribute $200,000 to the enterprise.
“Was that significant for you?” asked defense attorney Harold Haddan.
It “was then,” Mitchell replied tersely, and “still is.”
(During the prosecutor’s cross-examination, Mitchell made the jury laugh by saying that Bourke never asked him to invest in anything else because “he knew I was in the United States Senate and had nothing to invest.”)
He wrote the check directly to his friend on March 1, 1998, for which he later received a certificate from an offshore investment vehicle, Blueport International Ltd.
He said Bourke asked him to sit on the board of the companies involved in the privatization project, Oily Rock and Minaret, but then he was offered seats on two different advisory U.S. companies instead, for $50,000 a year.
Weeks after he attended the signing of the landmark Good Friday Agreement in Northern Ireland on April 10, 1998, Mitchell’s new business responsibilities compelled him to fly to the Azeri capital of Baku.
After his plane landed, he visited the office of Stanley Escudero, then-U.S. Ambassador to Azerbaijan, who warned him of his newfound business colleague Viktor Kozeny by handing him the Fortune Magazine feature “The Pirates of Prague,” Mitchell testified.
He said that Bourke assuaged his fears, saying that Kozeny was never convicted of any of the accusations made in the article.
With this reassurance, Mitchell said, he visited then-Azeri President Heidar Aliyev, who asked him about his achievements in Northern Ireland and whether its lessons could be useful to Azerbaijan’s land dispute with Armenia.
Mitchell said he asked President Aliyev about Azerbaijan’s privatization initiatives. He said Aliyev told him that the country would move forward, but the oil company Socar would have to be privatized slowly because of its size. Aliyev’s son, who ran Socar, repeated his father’s comments.
Mitchell said he passed on the information to Bourke and Kozeny, then picked up his wife and son and flew to Belfast and Dublin, where an election was coming up in May. Mitchell said he stopped thinking about his investment for several months because the Omagh bombing in Northern Ireland rocked the truce that summer.
He said he did not hear from Bourke again until January 1999, when Bourke angrily told him that Kozeny had defrauded American investors by selling options for Socar vouchers at an inflated price.
Mitchell said he resigned his board positions as soon as he was told of Kozeny’s apparent fraud.
At that point, Mitchell said, he told Bourke that he “should just forget about it.” But he said Bourke persuaded him to write President Aliyev a letter in which he informed his “Excellency” that Bourke planned to meet him to discuss “some rather urgent concerns that are of mutual interest to us all.”
The letter continued, “Rick is a dear friend of mine and someone in whose judgment I place a great deal of confidence.”
Still, President Aliyev did not privatize Socar as planned, and Kozeny never returned his investors’ money.
At the end of defense attorney Haddon’s questioning, Mitchell said that Bourke never told him of any “improprieties,” and that he still considers him a friend.
After a friendly “Good morning, senator,” prosecutor Harry Chernoff cross examined