Investigation targets key lawmaker

Powerful senator faces indictment nearly two years after office search

Posted: Friday, July 11, 2008

The federal government late Wednesday indicted the most powerful legislator yet in its wide-ranging investigation of Alaska government corruption.

This time it was Sen. John Cowdery, R-Anchorage, who has been a key player in the Senate majority over the last four years, under former President Ben Stevens, R-Alaska, and current Senate President Lyda Green, R-Wasilla.

The charges stem from attempts to influence the process in Alaska's efforts to get a natural gas pipeline, at a time when decisions worth $60 billion were being made.

"It felt like it was a rigged system with this particular issue," said former Rep. Ethan Berkowitz, D-Anchorage, then the House Democratic Leader.

"As little pieces emerge, it becomes clearer," he said Thursday of the indictment.

Cowdery, 78, was indicted on two counts involving bribery and conspiracy to commit bribery by a federal grand jury in Anchorage.

The indictment was widely expected, coming after Cowdery was named in trial testimony as having accepted bribes from an oil company executive.

The charges against Cowdery come nearly two years after FBI agents searched the offices of Cowdery and other legislators, and while the Legislature is meeting in special session and again discussing a natural gas pipeline proposal.

Sen. Gene Therriault, R-North Pole, battled several of the accused legislators on natural gas and oil tax issues over the years. On Thursday, he said he wasn't surprised at the charges against Cowdery.

"We've expected it for two years, but it is no less disturbing," he said.

Two years ago the Legislature passed a new oil tax bill called the Petroleum Profits Tax, that current Gov. Sarah Palin said was tainted by the allegations of corruption. An effort to get a natural gas pipeline contract that Palin said would have given the oil companies subsidies of $10 billion or more failed, with opposition from Therriault and others.

Therriault said he was convinced during the tainted 2006 session that the FBI was investigating, giving him confidence in standing up to powerful members of his own party, including Cowdery, who was then the chairman of the influential Rules Committee, which decides which legislation goes to the floor.

"Hopefully, the cavalry is coming," he said.

Cowdery is currently chairman of two committees, including the Legislative Council, a joint House/Senate committee that manages the business of the Legislature. He remained chairman of the Rules Committee under the new Senate Working Group coalition that elected Green as Senate president.

Cowdery stepped down as Rules chairman, citing poor health, after he was publicly named in court as having taken bribes.

Berkowitz made a memorable House floor speech during the oil tax debate in which he questioned the motives of those supporting lower oil taxes. Now he said the Legislature needs to do more to rebuild public trust.

"The Legislature needs to clean House, and the Senate too," he said.

Palin on Thursday issued a statement calling for Cowdery to resign.

"Today's news is a good reminder that we must continue to be vigilant in defending Alaska's sovereignty against those who would undermine it in an attempt to sell out Alaskans," she said.

The indictment accuses Cowdery of conspiring with former VECO Corp. CEO Bill Allen to bribe another senator in an effort to support lower oil taxes. Allen was not named in the indictment, but earlier pleaded guilty to the charges.

Former Senate President Ben Stevens, R-Anchorage, appears to be "Senator B" in the conspiracy outlined in the indictment. He has been previously accused in court, but not yet charged.

The senator Cowdery is accused of conspiring to bribe, called "Senator A" in the indictment, was not named. Sen. Donny Olson, D-Nome, was the only other legislator whose office was searched that has not already been indicted.

The indictment says Cowdery met with a VECO executive and discussed plans for a way to get money to "Senator A" in exchange for support on oil tax rates.

"Maybe we can buy some gasoline. You know, he's got planes," Cowdery said in telephone conversation monitored by the FBI.

Cowdery also said, "That would be pretty easy and clean," according to the indictment.

Olson owns Olson Air Services, Inc., and the Anchorage Daily News recently reported that Olson had testified before a federal grand jury.

On Thursday, Cowdery's attorney, Kevin Fitzgerald of Anchorage, issued a statement saying that conversations about a possible campaign donation to Olson - a donation that never happened - were misinterpreted.

"The government has done a substantial disservice to Senator Cowdery in charging him, that Senator Cowdery will be exonerated, and that this will be exposed for the mistake that it is," Fitzgerald said.

Two years ago, Olson was seeking campaign contributions in a contest for the Democratic nomination for lieutenant governor against Berkowitz. Berkowitz won that race against Olson, but lost to Palin and current Lt. Gov. Sean Parnell in the general election. Palin, Parnell and Berkowitz have since cooperated on ethics issues.

Olson's legislative office Thursday referred calls to attorney Paul Stockler of Anchorage, who was unavailable for comment late Thursday afternoon.

Stockler earlier represented former Rep. Tom Anderson, R-Anchorage, who has since been convicted on unrelated bribery. Other legislators convicted so far are former Reps. Vic Kohring, R-Wasilla, and Pete Kott, R-Eagle River.

Anderson, Kohring, and Kott are serving sentences in federal prisons in Oregon and California. Other lobbyists and executives have also been indicted and pleaded guilty.

In addition to Cowdery, one other former legislator is awaiting trial. Former Rep. Bruce Weyhrauch, R-Juneau, is facing corruption charges, and is awaiting the outcome of a pretrial hearing before a trial date is scheduled.

Cowdery is scheduled for arraignment today in Anchorage, but his attorney's office said that may be changed.

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