Stevens concerned corruption investigation will affect election

Senator has drawn scrutiny over 2000 renovation project

Posted: Tuesday, July 10, 2007

WASHINGTON - Ted Stevens, the longest-serving Republican senator and once the chief power broker for dispensing federal dollars, says he's worried that a corruption investigation "could cause me some trouble" in running for re-election next year.

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The 83-year-old Alaska Republican has drawn Justice Department scrutiny over a renovation project in 2000 that more than doubled the size of his home in a resort town surrounded by glaciers.

The remodeling was overseen by Bill Allen, a contractor who has pleaded guilty to bribing Alaska state legislators. Allen is founder of VECO Corp., an Alaska-based oil field services and engineering company that has reaped tens of millions of dollars in federal contracts.

Allen is cooperating with the FBI, and investigators appear to be looking at whether VECO got anything in return for the home improvement help.

Sen. Stevens, who has served since 1968, has been caught up in a larger probe that included FBI raids last summer at offices of six Alaska legislators - including Stevens' son, Ben, who was then the president of the state Senate.

"The worst thing about this investigation is that it does change your life in terms of employment potential," Stevens said in an interview with The Associated Press. "It doesn't matter what anyone says. It does shake you up. If this is still hanging around a year from November, it could cause me some trouble.

"I'm working to get this concept out of my mind that someone is trying to make something illegal out of all this, That's what's really disturbing."

Over the past six years, VECO executives and the company itself contributed more than $119,000 to Stevens' political organizations, according to tracking by Political Money Line, an Internet database. Of that amount, Allen contributed $20,000. Stevens and Allen also are longtime friends and partners in a race horse investment.

The remodeling job at Stevens' home was fraught with problems at the start. He estimated it would cost about $85,000 and told city building officials he would be his own contractor.

The plan was to raise Stevens' single-level home and, beneath it, construct a new first floor with two bedrooms, a game room and sauna. Complete with a wraparound porch, the completed project would be twice the size of the original, modest house in the town of Girdwood, about 40 miles south of Anchorage. Building records don't indicate how things went wrong, but somehow the framing was botched and help was called in to fix it.

Carpenter Augie Paone has said he was hired by an employee of VECO. Rather than submit his bills to Stevens, Paone said he submitted them to VECO founder Allen.

Paone told a federal grand jury that he didn't find anything unusual about the project, people close to the case said.

Once Allen approved the work, Stevens paid for it with a series of checks, according to two people close to the investigation. They spoke on condition of anonymity because grand jury matters are secret by law. Stevens would not discuss the details of the investigation, including why the checks were drawn on an apparently new account and where the money came from.

The carpentry bill alone exceeded $100,000, and contractor Tony Hannah said Stevens paid an additional $3,720 to have the house jacked up. The FBI has those records, and agents recently examined Stevens' building permits, which do not mention VECO or any of the contractors who worked on the job. They also have begun questioning Stevens' former Capitol Hill aides.

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