Two Close Stevens Associates Cop Plea

Posted May 7, 2007 at 6:46pm



Updated

Two oil company executives with personal and financial ties to Sen. Ted Stevens (R-Alaska) pleaded guilty to charges of bribery, extortion and tax fraud in federal district court in Anchorage, Alaska, on Monday and have agreed to help federal investigators in their case against a growing collection of Stevens’ associates, including former aides to the veteran lawmaker and his son, Ben.

As part of a plea deal with the Department of Justice, VECO Corp. CEO Bill Allen and Vice President Rick Smith pleaded guilty to providing more than $400,000 in illegal payments to Alaska public officials, according to the DOJ.

In a statement issued by his office Monday night, Sen. Stevens said, “I was surprised and saddened to learn of the recent developments in the ongoing federal investigation in Alaska. Like many Alaskans, I am finding out about these events from the media. The legal process will now continue. Consistent with my longstanding practice regarding matters of this sort, I will make no further comment.”

According to sources close to the investigation, DOJ’s Office of Public Integrity and the Sacramento U.S. attorney’s office have been investigating Stevens’ son — a former state Senator who served as the body’s president during his last term — and a group of other state lawmakers, dubbed the “Corrupt Bastards Club” by the local media, since early 2006.

While a state Senator, Stevens also worked as a paid consultant for VECO, the state’s major oil company, and a number of other energy and fishing industry concerns. The state has no restrictions on working for companies that may have business before the Legislature.

Allen is a longtime personal friend, business partner and campaign contributor to the elder Stevens. For instance, Stevens, Allen and Allen’s son, Mark, are part of a small consortium of eight men in Alaska who jointly own Alaska’s Great Eagle LLC, which owns “So Long Birdie,” a race horse.

Allen and his wife also have hosted numerous fundraising events for Stevens, as well as his fellow members of the Alaska delegation, Sen. Lisa Murkowski (R) and Rep. Don Young (R).

A preliminary review of campaign finance records shows Allen and other executives at VECO have made $206,900 in campaign contributions to the Alaska delegation, with more than $72,000 of that total going to Ted Stevens.

Earlier this year, federal investigators indicted former Fairbanks Alaska Mayor Jim Hayes and his wife, Chris, for allegedly embezzling $450,000 in federal grants to fund construction of the church where Hayes serves as pastor. Like Allen, Hayes is a longtime friend and political ally of the elder Stevens. Similarly, federal investigators are probing the activities of several other Stevens associates, including former aide Trevor McCabe, who also has been a business partner with Ben Stevens.

Ben Stevens publicly has acknowledged receiving tens of thousands of dollars from VECO and other clients for consulting work, although a more detailed financial disclosure document filed with the state Legislature but not publicly released show he received significantly more than he has acknowledged in the past. That document was reviewed by Roll Call.

Last summer, federal investigators raided the homes and offices of VECO executives including Allen and Smith, as well as the homes and offices of Ben Stevens and other state lawmakers. Court documents filed at the time indicated that DOJ has focused its efforts in this phase of the investigation on state-level corruption, specifically looking at efforts by Ben Stevens and others to secure legislation favorable to VECO.

Although the pleading documents released Monday do not directly name Ben Stevens, he is clearly implicated. The filings point to a series of payments by VECO to a “Senator B” from 2002 to 2006.

According to the “Factual Basis For Plea” document filed on Monday against Allen, the VECO chief acknowledges that “from approximately January 2002 to August 30, 2006, during which time State Senator B was a member of the Alaska State Senate, ALLEN authorized VECO to continue to make monthly payments to the private company owned by State Senator B. Although ALLEN and VECO characterized these payments to State Senator B as being for consulting services, ALLEN acknowledges that in actuality the payments provided to State Senator B were in exchange for giving advice, lobbying colleagues, and taking official acts in matters before the legislature. Pursuant to this arrangement, VECO paid State Senator B a total of $243,250.”

The amount and timing of the individual payments — which range from a $43,750 payment in 2006 to a $57,000 payment in 2005 — are identical to payments Ben Stevens listed in his financial disclosure forms.

The documents also say State Senator B worked with another as-of-yet unnamed member of the Alaska Legislature implicated in the conspiracy to recruit other members to vote for VECO-backed bills in exchange for campaign contributions.

Update: May 8
As of press time, a spokesman for Sen. Ted Stevens (R-Alaska) did not respond to a request for comment. The statement released after press time has been added to the story.