Federal probe has critics asking why state didn't act first

Posted: Sunday, July 01, 2007

With three state agencies charged with being watchdogs of Alaska government, the recent federal investigation into bribery and corruption in the Legislature raises questions about whether these groups are able to do their job.

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The state attorney general's office, the Select Committee on Legislative Ethics and the Alaska Public Offices Commission are intended to serve as checks on corruption and wrongdoing by state officials.

Yet it was the U.S. Department of Justice that recently revealed VECO Corp., an oil pipeline service and construction company, was offering legislators bribes to influence decisions worth tens of billions of dollars.

Two top executives of VECO Corp. have pleaded guilty to federal bribery charges and three lawmakers they are accused of bribing are awaiting trial. Other elected officials have yet to face charges, though the U.S. Department of Justice says they participated in the schemes. A fourth legislator faces separate federal bribery allegations.

So why weren't state ethics agencies able to ensure the integrity of Alaska government?

"That's a good question," said Gov. Sarah Palin, a Republican who ousted former Gov. Frank Murkowski and swept into office on a wave of revulsion over continuing ethical scandals in state government. Palin made her statewide name by standing up for ethical government, including taking on some powerful members of her own party on ethics issues.

One critic blames a former attorney general with ties to powerful oil and gas interests; others say the legislative ethics committee failed to function because it doesn't have enough staff and authority. Others question the work of the Alaska Public Offices Commission and say it should be abolished.

Where did the three watchdog agencies go wrong? Critics have various opinions.

• Attorney general's office - Alaska's top law enforcement official is the attorney general. Unlike in most states, Alaska's attorney general is not a check on the power of the governor, but is instead appointed by and answerable to the governor.

While former Gov. Frank Murkowski was pushing an oil tax proposal supported by VECO and the state's major oil producers, he appointed former VECO lobbyist David Marquez to be his attorney general. Marquez's Department of Law rejected calls by former legislator Ray Metcalfe to investigate connections between VECO and then-Senate President Ben Stevens, R-Anchorage. Federal prosecutors have cited those connections as part of a pattern of corruption.

A deputy attorney general said that while Marquez signed the letter to Metcalfe declining to investigate his charges, Marquez himself was not involved in that decision; Marquez did not return phone calls.

• Select Committee on Legislative Ethics - Primary responsibility for enforcing ethical behavior among legislators lies with the legislative branch of government itself. That job is handled by the ethics committee, a body critics say has neither the staff nor the authority to accomplish its mission.

"The ethics committee is not a pro-active committee," said Rep. Ethan Berkowitz of Anchorage, former Democratic leader in the House of Representatives and member of the ethics committee.

Equal numbers of Democratic and Republican legislators on the committee ensure balance. The Republican members last year included Stevens, who is under investigation, and former Rep. Bruce Weyhrauch, R-Juneau, who has been indicted on corruption charges and is awaiting trial.

• Alaska Public Offices Commission - Both former Gov. Frank Murkowski and ethics watchdog Ray Metcalfe say APOC has not been effective, and should be abolished.

Berkowitz agreed there are problems, but he blamed Murkowski and the Legislature.

"They're severely underfunded," he said.

APOC needs more money and possibly an independent funding source.

"They operate at the mercy of the governor and the Legislature," Berkowitz said. "There's an institutional reluctance on their part to investigate and pursue investigations - they're not a truly independent watchdog."

In 2001 and 2002, APOC staff fought a long-running battle with VECO executives Bill Allen and Rick Smith trying to force them to register as lobbyists. They succeeded with Allen, the chief executive officer, but failed with Smith, vice president for communications.

In 2003, Murkowski introduced legislation attempting to abolish APOC entirely. That bill failed, but the Legislature then changed the definition of lobbyist so it didn't apply to Allen.

Juneau Mayor Bruce Botelho, the longest serving attorney general in the state's history over two administrations, said it looks like those state agencies responsible for ensuring ethical government failed to do their jobs, but it is too soon to tell for sure.

"Should the state have caught this? It's hard to know at this stage without knowing what triggered the FBI investigation," he said.

It could be purely happenstance, he said, if someone with evidence of wrongdoing contacted a federal agent about a violation first.

Metcalfe said he has spoken with FBI agents about the case, but doesn't know how the feds first got interested in Alaska.

"I think the jury is still out on what started this," said Metcalfe.

Metcalfe said the FBI investigation appears to be following the corruption road map he laid out before the state attorney general's office and APOC, and in a recall attempt against Ben Stevens that state officials squelched.

When Metcalfe began his recall effort, FBI agents already working the case and didn't know who he was, Metcalfe said.

State Rep. Harry Crawford, D-Anchorage, said he'd like to see change to give the state a more independent, elected attorney general. Alaska is one of just a handful of states where the state's top law enforcement officer is appointed by the governor.

A bill introduced by Crawford to do that failed to get much traction in the last legislative session, however. Several members of his own party, including Berkowitz and current House Democratic Leader Beth Kerttula, D-Juneau, oppose an elected attorney general.

"I don't want to see the position become political, and elections would do that," Kerttula said.

Metcalfe, who served in the Legislature as a Republican, agreed.

The Legislature years ago took steps to make its ethics committee more independent, giving it a majority of outside members who were not legislators. Many of its actions are shrouded in secrecy by statute, however, said Joyce Anderson, the committee's staff person.

In contrast to criminal procedure, the Legislature has required that ethical accusations against legislators be kept secret until after they are decided, she said.

The last legislator who was publicly revealed to be investigated by the committee was in 2004, Anderson said.

Berkowitz has another entity to blame for corruption problems in the state. He thinks the media bears a share of the responsibility as well.

"The media failed to engage for too long," Berkowtiz said.

Alaska's media didn't do enough to tell the public about what was happening in the state's government, he said. It is like when drivers slow down when they see a state trooper. Legislators would not have attempted some things they did if they knew the public was going to find out about them.

"The media was not peering into the workings of government," he said.

• Pat Forgey can be reached at 523-2250 or patrick.forgey@juneauempire.com.

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