U.S. envoy Mitchell testifies in bribery trial

By Grant McCool

NEW YORK (Reuters) - George Mitchell, President Barack Obama's envoy to the Middle East, testified on Friday that he paid little attention to a $200,000 investment he made in 1998 through a businessman friend who is now on trial over a scheme to bribe officials in Azerbaijan.

Mitchell, a former U.S. Senator known also for brokering a peace deal in Northern Ireland, told a Manhattan federal court jury he trusted his friend, Frederic Bourke, and accepted Bourke's advice that the investment in an Azerbaijan oil venture was a risk worth taking.

Bourke, whose trial began on June 2, is charged with conspiracy to defraud the United States, money laundering and false statements. He is the co-founder of handbag maker Dooney & Bourke.

The charges were made in 2005 in connection with an alleged conspiracy by another businessman, Czech national Viktor Kozeny, to bribe officials of Azerjaiban in a 1998 deal to buy a state-run oil company known as Socar. Kozeny lives in the Bahamas and is fighting extradition.

Mitchell, a Democrat of Maine who left Congress in 1995, told the court that, at the time of his investment, the Northern Ireland peace process was an "all-consuming effort" for him.

"Every aspect of my life didn't get the attention it deserved," including family life and business, Mitchell said during 3-1/2 hours of testimony as a defense witness. "So this was something I paid little or no attention to. This was a part of my life that really wasn't on my radar screen."

Kozeny wanted Mitchell in the deal because it would lend it more legitimacy, according to government witnesses. The jury heard that Mitchell flew to Baku in Azerbaijan in April 1998 to meet then-President Heydar Aliyev.

Mitchell said the late long-time ruler, who was succeeded by his son Ilham Aliyev in 2003, told him he was committed to privatization, but would proceed carefully with Socar because of its size and importance.

In January 1999, Mitchell withdrew from involvement in the investment and as a director of a U.S. company formed by Kozeny.

He said in court that Bourke had told him he was suspicious

Kozeny was involved in a fraud. Mitchell said he told Bourke at the time: "You should just get out."

U.S. prosecutors accused Bourke, 63, of investing $8 million with Kozeny knowing he was paying millions to senior leaders of the former Soviet republic. The government alleged Kozeny wanted to buy Socar and resell it.

Bourke has denied knowledge of the bribes and accused Kozeny of stealing more than $180 million from him and other investors.

Mitchell said in court he still considered Bourke a friend, but after this experience, he would consult a financial adviser before making a similar investment again.

The case is US v. Bourke, 05-00518 in U.S. District Court for the Southern District of New York (Manhattan)

(Reporting by Grant McCool; editing by Andre Grenon)