New York, 7 October 2005 (RFE/RL) -- The indictment describes a scheme allegedly devised by Kozeny to bribe top Azerbaijani officials in the late 1990s.
It says Kozeny flew millions of dollars into Azerbaijan to buy up privatization vouchers and pay bribes.
The plan, it says, was to ensure officials would privatize the State Oil Company (Socar) and allow Kozeny and his two codefendants, Frederick Bourke and David Pinkerton, to share the anticipated profits arising from that privatization.
However, after collecting the bribes, U.S. investigators say, the Azerbaijani officials involved balked. The privatization was never carried out.
Each of the defendants is charged with conspiracy to violate the U.S. Foreign Corruption Practices Act (FCPA), which makes it a crime to offer to pay, or to pay, foreign government officials in order to retain business.
Each such charge can carry up to 20 years in prison and a maximum fine of $500,000.
Rinat Akhmetshin, the director of the International Eurasian Institute for Economic and Political Research in Washington, told RFE/RL that this indictment is very similar in its nature to another one, dubbed "Kazakhgate."
In that case, American businessman James Giffen is charged with paying tens of millions of dollars in bribes to the Kazakh President Nursultan Nazarbaev and former Oil Minister Nurlan Balgimbaev for lucrative oil and gas concessions.
“These indictments put the U.S. government in a very difficult situation because these new charges and arrests -- for me the ‘Azerbaijani’ case -- they put strain into the relationship between the two countries," Akhmetshin said. "But it also shows that the U.S. government is not willing to look the other way.”
“These indictments put the U.S. government in a very difficult situation because these new charges and arrests -- for me the ‘Azerbaijani’ case -- they put strain into the relationship between the two countries."
The ‘Kazakhgate’ trial is scheduled to begin in January 2006. Neither Nazarbaev nor Balgimbaev has been formally summoned in the U.S. criminal investigation of Giffen.
Announcing the charges against Kozeny and his associates yesterday, U.S. District Attorney Michael Garcia said that corrupt payments to foreign officials are a “global threat to democratic institutions and fair competition.” He also said that the U.S. law-enforcement authorities are going to vigorously investigate and prosecute such activities.
A lawyer for Kozeny, who was previously indicted on separate fraud charges in the Czech Republic, said he is confident his client will be exonerated.
Pinkerton and Bourke have pleaded not guilty and their lawyers said that they were victims of Kozeny’s schemes.