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Oil executives plead guilty to bribing Alaska lawmakers
Anchorage Daily News


May 12, 2007

ANCHORAGE, Alaska -- Bill Allen, a welder who took the Veco Corp. from a small Kenai oil-field company to a billion-dollar international contractor and a major political force, has pleaded guilty to bribing at least four Alaska legislators, including former Senate President Ben Stevens.

In a plea bargain with the U.S. Justice Department's Public Integrity Section, Allen and Rick Smith, Veco's vice president for community and government affairs, each pleaded guilty to three identical felony charges - bribery and two counts of conspiracy.

Both men accepted responsibility for making more than $400,000 in illegal payments and benefits to public officials or their families. More than half the money went to Stevens in the form of phony "consulting" fees, the government charged.

Stevens, son of U.S. Sen. Ted Stevens, R-Alaska, has not been charged. He was named in the plea documents as "State Senator B," but his identity was unmistakable.

In return for special consideration at sentencing, Allen, 70, and Smith, 62, agreed to cooperate in the ongoing federal investigation.

The federal plea bargain doesn't bar state prosecutors from seeking additional charges against Allen and Smith. Both men acknowledged violating state campaign finance laws in their plea.

The plea deals were formalized in secret last week and opened in U.S. District Court Monday morning in unannounced back-to-back hearings before Judge John Sedwick, each lasting about 40 minutes.

Taking prosecutors' recommendations, Sedwick released the men on $10,000 unsecured bond and ordered them to report weekly to federal probation officers. They were allowed to keep their passports and may travel freely pending sentencing, which was held off indefinitely. They could face about 10 years in prison and up to $750,000 in fines, but cooperation could substantially reduce the penalties.

Last week federal authorities, again acting on bribery and conspiracy indictments, had arrested Rep. Vic Kohring, R-Wasilla, and former Reps. Pete Kott, R-Eagle River, and Bruce Weyhrauch, R-Juneau.

It appeared from those charges that the FBI used electronic surveillance of Veco's suite in Juneau's Baranof Hotel to capture incriminating dialogue and images. The indictments spoke of payments by Allen and Smith of several thousand dollars and promises of jobs to the legislators. In return, the legislators agreed last year to vote for the oil production tax favored by the oil industry, the government alleged.

Those earlier indictments referred to an unnamed state senator who allegedly played a role in one part of the conspiracy - a plan by Veco to farm out legal work to Weyhrauch, an attorney, in return for his vote on oil legislation. The description of that unnamed senator was ambiguous - Stevens was one of three senators it could have been.

But one of two unnamed state senators in Monday's charges against Allen and Smith is clearly Stevens. The Veco "consulting" payments of $243,250 between 2002 and 2006 documented in the charges precisely match the amount Stevens reported on his financial disclosures as consulting income to his firm, Ben Stevens and Associates.

Over the years, Stevens has refused to disclose what work he did for that money or for any of the other consulting jobs he has listed, mostly for fishing industry clients.

Former state representative Ray Metcalfe, in complaints to the Alaska Public Offices Commission and to federal authorities, challenged Stevens, saying the payments were thinly disguised bribes. Nothing came of Metcalfe's APOC complaints - the state agency said that Stevens adequately described his work. And it refused Metcalfe's demands to look deeper and investigate whether Stevens actually worked for his money.

But in their admissions to federal prosecutors, Allen and Smith appeared to vindicate Metcalfe.

"Although Allen and Veco characterized these payments ... as being for consulting services, Allen acknowledges that in actuality the payments ... were in exchange for giving advice, lobbying colleagues and taking official acts in matters before the legislature," prosecutors said.

Stevens's attorney, John Wolfe of Seattle, declined to respond to specifics in the charges, but said his client did nothing wrong.

Allen is also the publisher of the Voice of Times, a half-page opinion section in the Anchorage Daily News. It is what remains of the Anchorage Times, which Allen owned for two years before it lost the newspaper war to the Daily News.

Asked whether the Daily News will continue to publish the Voice of the Times, Publisher Mike Sexton said, "We are troubled by recent developments and are reviewing the entire situation." (Read the Anchorage Daily News story: Daily News won't renew Voice of the Times contract)


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