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Clark pleads guilty to conspiracy

Posted: Tuesday, March 04, 2008

Jim Clark, a former top aide to former Gov. Frank Murkowski, has pleaded guilty to a felony conspiracy charge in the widening federal corruption investigation in Alaska.

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Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

Clark, Murkowski's chief of staff and a lawyer in Juneau, is cooperating with federal investigators, according to his plea agreement filed Monday in U.S. District Court in Anchorage.

The former Murkowski aide admits in the plea agreement that he helped funnel oil industry money to the former governor's 2006 campaign for re-election and pushed for the Alaska Legislature to approve the industry's preferred oil tax plan and gas pipeline proposal.

Sen. Gene Therriault, R-North Pole, was in the thick of the battles two years ago and said the Clark plea did not surprise him.

"I just sensed something was amiss as we were coming through all that," he said.

Federal prosecutors said in court filings that of the candidates running for governor then, only Murkowski supported the oil industry's preferred tax rate and natural gas development plan.

Federal prosecutors said in court documents that Clark solicited VECO Corp. executives Bill Allen and Rick Smith for various polling and consulting expenses for the Murkowski campaign. Prosecutors said Clark used his position and the office of the governor to advocate the tax rate favored by VECO, an oil field services company.

The payments, totaling more than $68,000, were structured to avoid disclosure to the Alaska Public Offices Commission, according to prosecutors.

APOC Deputy Director Chris Ellingson said her agency regularly provides information to other agencies, including the FBI, but was unaware that the charge against Clark was coming.

"This came out of the blue for us too," she said.

Clark is scheduled for arraignment and a plea entry before U.S. District Court Judge John Sedwick today in Anchorage. His attorney, Bob Gagnon, told The Associated Press he'd have a comment at that time.

Last May, Allen, founder and principal owner of VECO pled guilty, as did Rick Smith, a VECO vice president, on related conspiracy charges.

Three other parties in the corruption case - former Reps. Vic Kohring, R-Wasilla; Pete Kott, R-Eagle River; and Bruce Weyhrauch, R-Juneau - refused to plead guilty when they were charged in 2007.

Kohring and Kott have been convicted and sentenced. Weyhrauch has pled not guilty and is awaiting trial.

The court filings in Clark's case mention oil companies BP, Exxon Mobil and ConocoPhillips by name as parties in the oil tax and gas line negotiations, but only identifies VECO as knowingly providing illegal benefits to Murkowski.

Murkowski did not return a call Monday left with a close family member in Alaska.

The former governor was trying to develop a North Slope natural gas pipeline in 2006, while the state also was negotiating a new oil tax structure. The two were linked, with Murkowski proposing a pipeline contract and a new oil tax, called the Petroleum Profits Tax.

The Legislature rejected the gas pipeline contract, saying its terms gave away too much to the companies and was unconstitutional.

Therriault was among those resisting the plan, along with then-House Democratic Leader Ethan Berkowitz.

In an emotional speech on the House Floor, Berkowitz predicted people would be sent to prison for the oil tax plan that was being pushed in the House.

Therriault said he saw similar things going on in the Senate.

"Votes were being taken that left me scratching my head," he said.

Therriault used his position as chairman of the Legislature's Budget and Audit Committee to push back against Murkowski's plan, which also was supported by Senate President Ben Stevens, R-Anchorage. Stevens did not run for re-election and has since been named in court testimony as accepting bribes. Court filings by prosecutors also appear to name Stevens as a recipient of bribes.

The FBI raided Steven's legislative offices, but he has not been charged with any crime and has denied wrongdoing.

In 2006 the Legislature increased the oil tax rate that Murkowski had negotiated with the oil producers. His plan called for a 20 percent tax rate with a 20 percent tax credit. The Legislature upped that tax rate to 22.5 percent, but a number of legislators pushed unsuccessfully for a 25 percent rate.

Gov. Sarah Palin asked the Legislature to revisit the tax plan after she took office, saying that it had been "tainted" by corruption. Now, the plea agreement indicates the corruption extended inside the governor's office.

Late last year the Legislature raised the tax rate to 25 percent, and added additional taxes during times of high oil prices.

Juneau Rep. Beth Kerttula, a Democrat who fought the Murkowski and oil company deal on the House floor in 2006, declined comment Monday.

• Contact reporter Patrick Forgey at 586-4816 or patrick.forgey@juneauempire.com.



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