While the Alaska Legislature was discussing an oil tax bill worth billions to the state, federal prosecutors allege former Rep. Bruce Weyhrauch, R-Juneau, called Bill Allen, CEO of VECO Corp., an oil field services company and influential player in state politics.
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Weyhrauch told Allen that he wanted to discuss a "mutually beneficial relationship," according to the seven-count indictment filed against Weyhrauch and former Rep. Pete Kott, R-Anchorage.
VECO was not named in the indictment, but it issued a press release late Friday acknowledging it was the company alluded to by prosecutors.
That relationship allegedly involved Weyhrauch soliciting lucrative legal work after he was no longer a representative in exchange for his support for a lower tax rate that the oil companies wanted.
To read the full text of former Rep. Bruce Weyhrauch, R-Juneau, visit aklegislature.com.
He and Kott also backed a natural gas pipeline deal supported by Gov. Frank Murkowski and the state's big oil producers.
Later, Weyhrauch and Kott also worked together to get a special session of the Legislature to adjourn early and avoid a vote on legislation the oil companies opposed.
Weyhrauch and Kott pleaded not guilty Friday, but were unavailable for comment.
Weyhrauch did not collect any money, the indictment said. It alleges Kott took numerous cash payments, sometimes hidden as payments to Kott's hardwood flooring business.
The indictment quotes two VECO executives discussing the gas pipeline legislation, and why Kott would support the companies' position.
"We got more money in Pete Kott than he can even think about," executives said, according to the indictment.
How prosecutors know of the comments is not explained, but the indictment makes numerous references to private conversations that took place in a VECO suite at the Baranof Hotel in Juneau, as well as phone conversations, suggesting electronic surveillance.
At one point, the indictment says Kott told the company's CEO that "I had to cheat, steal, beg, borrow and lie," to support the company's positions.
The CEO responded, "I own your ass," according to the indictment.
The indictment also recounts a conversation in which VECO executives discussed Weyhrauch's financial struggles and how to "stall a bit" and string him out with the prospect of future legal work.
The indictment of Kohring indicated his financial situation was even more severe. At one point he asked VECO for help with a $17,000 credit card bill that he couldn't pay, the indictment says.
Kohring is alleged to have received numerous smaller cash payments in the hundreds or few thousands of dollars. A relative also was given a $3,000 job with the company, it said.
VECO's goal in 2006 was to win a lower oil tax rate during discussions of the state's Petroleum Profits Tax, or PPT, that consumed many days of legislative debate last year.
Legislators in the pay of VECO pushed unsuccessfully to lower the proposed PPT tax rate to 20 percent, and also pushed for adoption of a gas pipeline contract negotiated by former Gov. Frank Murkowski.
Rep. Les Gara, D-Anchorage, who opposed that gas contract, was among several legislators who said they had suspicions at the time.
"We had certainly heard the rumors that VECO was trying to influence people to vote for Gov. Murkowski's gas contract, but we never knew if the rumors were true," he said.
The indictments also refer to an unidentified member of the state Senate who was also doing VECO's bidding. The senator is not named but was identified as having a term of office that ended in 2006. Three senators potentially fit that description, Ralph Seekins, R-Fairbanks, Gretchen Guess, D-Anchorage, and Senate President Ben Stevens, R-Anchorage.
The charges in the indictment against Weyhrauch, Kott and Kohring include conspiracy to commit extortion under color of official right, bribery, and honest services mail and wire fraud and similar allegations.
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