Mitchell Testimony Continued

After a friendly "Good morning, senator," prosecutor Harry Chernoff cross examined Mitchell aggressively, with a series of questions meant to raise doubts about Mitchell's testimony.

Though Mitchell had said that he knew "very little" about Azerbaijan at the time, Chernoff had him read a passage from a book called "Not for America Alone," which Mitchell wrote a year before his investment. In it, Mitchell described the fall of the Soviet Union and its descent into Mafia-like corruption under Brezhnev.

Chernoff pointed out that Azeri President Aliyev was Brezhnev's former deputy.

Chernoff suggested that Mitchell wrote the original investment check directly to Bourke because he knew that it would be untraceable when put into the British Virgin Island company Blueport; Mitchell denied that.

Chernoff submitted the day's first multimedia evidence on the screen, a videotape showing the arrival of Mitchell's plane in Baku. In the clip, Mitchell is seen disembarking with Bourke, who asked the chairman of Azerbaijan's State Privatization Committee Nasir Nazibov about the doctor he sent him.

Bourke's indictment states that his bribery included "assistance in arranging and paying for medical care."

However, the major evidence was not the videotape of the plane, but an audio recording of a phone conversation between Bourke and his attorneys. The scratchy quality made much of the recording all but inaudible. But the witness and jurors were provided with a transcript.

Defense attorney Haddon objected to its being played because it was meant for another witness, but Judge Shira Scheindlin allowed it on the grounds that it would have been available before the defense called its witnesses if the court had not made adjustments to accommodate Mitchell's schedule.

In the recording, Bourke talked with three other people about creating "a scheme that will get us out of the civil and criminal liability issues" that would arise if Kozeny were discovered to be bribing foreign officials by creating the advisory companies that are "not directly affiliated" with Minaret and Oily Rock.

He was referring to the advisory boards on which Sen. Mitchell eventually would serve as a board member.

Bourke said he did not doubt that Mitchell would go along with the idea because "George will do anything I suggest."

Mitchell told Chernoff, "He never said that to me, and it's not true."

Earlier in the recording, the tape revealed that Kozeny's company Minaret had deals "all over Central Asia."

"They got an offer from Iran," Bourke said. "Let's say they do a deal in Iran. Maybe they blackmailed somebody or bribed them with ten million bucks. I'm not saying that's what they're going to do, but suppose they do that ... What are you going to do with that information?

"I don't know how you conduct business in Kazakhstan or Georgia or Iran, or Azerbaijan," Bourke said. "Do you think business is done at arm's length in this part of the world?" he asked.

Fellow investor Dick Friendman, a friend of former President Clinton, pointed out that the proposed boards may shield their liability, but it would not help their business reputations.

"If this thing blows up, that's OK, 'cause I can say, 'Hey, look. I invested money. I made a bad investment. I went in with some bad people. Not the first time I went in with bad people. It may be the last," Friedman said, adding, "Look at my reputation now with Clinton. Everybody thinks I'm fucking Lewinsky."

After this phone call occurred, Mitchell accepted positions on the boards of the advisory companies mentioned in the conversation, and he was granted 1 percent of the shares.

Chernoff said that this increased his original investment by 10 times, but Mitchell said he was so busy with his peacekeeping duties that he didn't notice.

Then the business arrangement imploded.

Even after stepping down from the boards, Mitchell managed to strike a conciliatory tone in his continued correspondence with Kozeny, the man whom Bourke told him ago had defrauded him of the biggest investment of his life.

Ever the negotiator, Sen. Mitchell sent Kozeny a letter a month later recommending that the playboy businessman visit his fashion designer friend Amir's boutique the next time he traveled to Los Angeles. The note, which mentioned nothing of the alleged fraud, ended with a friendly, handwritten postscript, "I hope you're well and hope to see you again soon."

In Kozeny's return letter, he deflected responsibility for the fall of the business plans. "I wish we had luckier days in Azerbaijan," Kozeny wrote. "Regretfully, I am now taking all the blame from some of our closest friends for President Aliyev's indecisiveness and delays of privatization."

If Sen. Mitchell had any resentment toward Kozeny for the failure of his investment, his reply to the disgraced businessman's defensive epistle showed no evidence of it. "I'm sorry things didn't work out as planned," Mitchell wrote in his last letter to Kozeny. "But I do hope we have the chance to get together in the near future."

When Chernoff suggested that the letter contradicted Mitchell's testimony that he had cut ties with Kozeny, Mitchell replied, "That was a courtesy. I didn't expect to see him ever again, and I never did."

It was quickly nearing the time that Mitchell had to leave and Chernoff finished his cross-examination by asking, "Would it be fair to say you deeply regret your investment?"

Mitchell agreed with that one.

During his redirect questioning of Mitchell, Haddon tried to portray the taped conversation as evidence of a routine legal precaution.

The words "hypothetical questions" entered into almost every question the defense attorney asked the senator. Citing the repeated phrase, Haddon suggested that the men were not planning to break the law, but merely pondering what precautions prudent investors should take during a sensitive business arrangement.

"Do clients often ask you about hypothetical questions?" Haddon asked Mitchell, who is an attorney.

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