Re-Scripting The Bourke Case

 This article was reprinted with permission from FCPA Professor

Frederic Bourke, “another whistleblower put in prison by the Obama administration.”

So begins this recent lengthy depiction of the Bourke case on Democracy Now.  Over the course of the approximate 45 minute video, the viewer is lead to believe that it has been a miscarriage of justice that Bourke is currently in a minimum security prison after being found guilty of, among other charges, conspiring to violate the FCPA.

Yes, I agree (as highlighted in this prior post) that the Bourke case is arguably the most complex and convoluted case in Foreign Corrupt Practices Act history.

Yes, the presiding judge in the Bourke trial - Judge Shira Scheindlin (S.D.N.Y.) – did reject the DOJ’s 10 year sentencing recommendation in sentencing Bourke to 366 days in prison.

Yes, Judge Scheindlin did comment at the sentencing hearing that – “after years of supervising this case, it’s still not entirely clear to me whether Mr. Bourke is a victim or a crook or a little bit of both.”  This comment did not exactly leave one with warm fuzzy feelings regarding the case.

However, the facts and enforcement theories at issue in Bourke have also received the most judicial scrutiny in the history of the FCPA - something seemingly glossed over in the lengthy Democracy Now video.

There was extensive pre-trial motion activity resulting in several written decisions by the S.D. of N.Y. as well as the Second Circuit (see 493 F.Supp.2d 693 [an enhanced version of this opinion is available to lexis.com subscribers], 541 F.3d 166 [enhanced version], and 582 F.Supp.2d 535 [enhanced version]), reconsideration of pre-trial rulings, and a written decision denying Bourke’s request for a judgment of acquittal (see 638 F.Supp. 2d 348).

In July 2009, Bourke was found guilty after a six week trial by a federal jury of conspiracy to violate the FCPA, among other charges.  There was a post-trial reconsideration of the motion to deny a judgment of acquittal (664 F.Supp.2d 369).

From there, Bourke’s case went to the Second Circuit and the primary issue on appeal was Bourke’s knowledge of the alleged bribery scheme in connection with the privatization of Azerbaijan’s alleged state oil company.  The issues on appeal were dissected in prior posts here and here.

In December 2011, the Second Circuit affirmed Bourke’s conviction of conspiring to violate the FCPA, among other charges.  (see here for the prior post).  In pertinent part, the court held that Bourke enabled himself to participate in a bribery scheme without acquiring actual knowledge of the specific conduct at issue and that such conscious avoidance, even if supported primarily by circumstantial  evidence, is sufficient to warrant an FCPA-related charges.

Specifically, the Second Circuit stated:

“While the government’s primary theory at trial was that he had actual knowledge of the bribery scheme, there is ample evidence to support a conviction based on the alternate theory of conscious avoidance. The testimony at trial demonstrated that Bourke was aware of how pervasive corruption was in Azerbaijan generally.  Bourke knew of Kozeny’s reputation as the “Pirate of Prague.”  Bourke created the American advisory companies to shield himself and other American investors from potential liability from payments made in violation of FCPA, and joined the boards of the American companies instead of joining the Oily Rock board.   In so doing, Bourke enabled himself to participate in the investment without acquiring actual knowledge of Oily Rock’s undertakings. The strongest evidence demonstrating that Bourke willfully avoided learning whether corrupt payments were made came from tape recordings of a May 18, 1999 phone conference with Bourke, fellow investor Friedman and their attorneys, during which Bourke voiced concerns about whether Kozeny and company were paying bribes.  [...]  Finally, Bourke’s attorney testified that he advised Bourke that if Bourke thought there might be bribes paid, Bourke could not just look the other way. Taken together, a rational juror could conclude that Bourke deliberately avoided confirming his suspicions that Kozeny and his cohorts may be paying bribes.”

With the Second Circuit appeal pending, Bourke filed motions requesting a new trial based on the theory that a key prosecution witness offered false testimony.  The motion was denied.

As noted in this prior post, Bourke then appealed this denial to the Second Circuit.  The Second Circuit affirmed the trial court decision and rejected Bourke’s request for a new trial.  In short, the Second Circuit concluded that Bourke failed to present newly discovered evidence or that the key trial witness in fact committed perjury.

As highlighted in this prior post, Bourke then petitioned the Supreme Court to hear his case.  In April 2013, the Supreme Court declined to hear Bourke’s appeal.

The Democracy Now program glossed over the extensive judicial scrutiny of the facts and enforcement theories at issue in Bourke in an attempt to re-script the Bourke case as “another whistleblower put in prison by the Obama administration.”

Once again, not the media’s finest FCPA moment.  (See here and here for prior posts on the same subject).

In short, I agree with the DOJ statement (included at the very end of the approximate 45 minute video) which stated:

“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 U.S. Supreme Court, there is not much left 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.”

Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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