Cowdery pleads not guilty to charges

Senator arraigned on federal counts of conspiracy, bribery

Posted: Tuesday, August 12, 2008

ANCHORAGE - An Anchorage state senator with ties to disgraced oil field services company VECO Corp. was arraigned Monday on federal charges of conspiracy and bribery.

Richard Mauer / The Associated Press
Richard Mauer / The Associated Press

Sen. John Cowdery, 78, was arraigned in U.S. District Court on charges of acting as a go-between for a $25,000 bribe between VECO officials and an unnamed state senator.

The target of the bribe was state Sen. Donny Olson, D-Nome, according to Olson's attorney.

In exchange, according to the indictment, Olson would have been expected to vote in 2006 for a change in the state's oil tax structure and other measures VECO officials wanted.

Cowdery is a three-term state senator who is not seeking re-election. He was pushed into court in a wheelchair by his attorney, Kevin Fitzgerald. He pleaded not guilty.

Neither Cowdery nor Fitzgerald commented after the hearing, which took just less that a half hour.

Magistrate John Roberts set a trial date for Oct. 6. The case is assigned to U.S. District Court Judge Ralph Beistline.

Roberts told Cowdery that if convicted, he faces up to five years in prison for the conspiracy charge and 10 years for the bribery charge, plus fines of up to $250,000 for each count.

In a discussion of evidence, prosecutor Joseph Bottini said the amount of discovery was "voluminous" and said it would be provided to Fitzgerald once the defense attorney provided a 750-gigabyte portable hard drive. Bottini said it would take about 24 hours to transfer information for the hard drive.

That indicates Cowdery, like three Republican lawmakers convicted of bribery charges last year, was the subject of wiretaps or other electronic surveillance.

State Rep. Tom Anderson, R-Anchorage, was convicted last year of conspiring to take bribes from a representative of a prison firm. A government informant wore a video recording device to a restaurant in one meeting with Anderson.

Former House Speaker Pete Kott, R-Eagle River, and Rep. Vic Kohring, R-Wasilla, were convicted of taking bribes from VECO officials. The FBI used a hidden camera set up in a Juneau hotel room to record incriminating statements.

Cowdery was indicted on July 9. The indictment refers to phone conversations between Cowdery and VECO officials and at least one breakfast conversation between Cowdery, Olson and the unnamed company CEO at a restaurant in Anchorage.

Prosecutors said Cowdery from 1998 to 2004 had received at least $30,000 in campaign contributions from VECO executives, employees and their spouses.

Former VECO chief executive officer Bill Allen and a former company vice president, Rick Smith, pleaded guilty last year to bribing lawmakers in the hope of seeing favorable legislation approved that could enrich VECO, an Alaska-based company that provided design, construction and maintenance services to oil companies and which employed more than 4,000 workers in 2006. Allen and Smith's guilty pleas require them to cooperate in other cases and they testified against Kott and Kohring. Smith testified he bribed Cowdery.

The oil tax change negotiated by former Gov. Frank Murkowski was demanded by major petroleum companies before they would commit to pour resources into a proposed multibillion dollar pipeline moving natural gas from Alaska's North Slope to Lower 48 customers.

VECO stood to gain millions in contracts if a pipeline were constructed.

Cowdery is accused of conspiring with VECO officials and an unnamed state senator, referred to as Senator B, to illegally influence Olson.

According to the indictment, the $25,000 was to have been characterized as a political campaign contribution. In exchange, Olson would perform official acts as directed by Cowdery and the executives.

The indictment claims that Cowdery in March 2006 had phone conversations with the company vice president about how Olson should be approached.

By June 2006, according to the indictment, Cowdery on the phone told a company official that he had spoken to Olson and told him the company would assist him with a fundraiser if he gave his support and agreed to "step up to the plate."

Cowdery also suggested buying aviation fuel for the senator's airplanes, according to the indictment.

At the breakfast meeting, according to the indictment, Cowdery, Olson and the unnamed company CEO discussed Olson's need for campaign money.

Olson asks "How much are you good for?"

The CEO replies, "Oh, we can probably go 25."

Olson replies, "That's a good start ..."

According to the indictment, the CEO later called a third senator, Senator B, and discussed pending arrangements and whether Olson would support their cause.

According to Olson's attorney, Paul Stockler, Olson ultimately decided he did not want campaign funding from an oil industry company and the subject never came up again with Cowdery.

Olson was the only Democrat among six lawmakers whose offices were searched by the FBI in September 2006. Olson has not been charged.

Olson testified before a grand jury in June. In July, he said he was cooperating with investigators.

After the indictment was made public last month, GOP Gov. Sarah Palin urged Cowdery to resign.

A natural gas pipeline remains under consideration through different legislation pushed by Palin and approved by the Alaska Legislature on Aug. 1.

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