Secret FBI recordings emerge in Kott trial

Prosecutors present calls between former lawmaker, executives

Posted: Wednesday, September 12, 2007

ANCHORAGE - Jurors in the trial of former state Rep. Pete Kott got their first hint Tuesday of a "smoking gun" - direct evidence that the former House speaker received a financial benefit from the company that stood to make millions if Kott helped push through natural gas pipeline legislation.

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In a wiretap recording of a July 12, 2006, call between Kott and Rick Smith, a VECO Corp. vice president, Smith tells Kott that he had talked to political pollster David Dittman and set up a poll that could be used in Kott's re-election campaign.

"I talked to Dittman today. It's all square," Smith said.

"All right," Kott replies.

Kott's acceptance of the $2,750 poll, paid for by VECO, is the basis of one of four federal charges against Kott, a seven-term Republican lawmaker who represented Eagle River, which is on the outskirts of north Anchorage.

Kott also is accused of receiving $7,993 from VECO paid through a phony invoice generated by Kott's flooring business, taking a $1,000 check from then-VECO CEO Bill Allen to reimburse Kott for a $1,000 donation made to former Gov. Frank Murkowski, and soliciting future employment from VECO in exchange for his influence in the Legislature.

Throughout the secret recordings made by the FBI, Kott jokes about taking a job with VECO in the warm climes of Barbados. In a June 1, 2006, videotape secretly recorded by the FBI in a room rented by VECO in Juneau's Baranof Hotel, Kott reveals another possible ambition.

"I want to be a lobbyist, Bill. That's what I wanna be," Kott says.

"OK, you will be," Allen replies.

Aside from those statements, jurors will have to decide whether Kott's cozy relationship with Allen and Smith, in which he plotted strategy, reported legislative developments and took direction from the company officials, was simply sleazy politics or the criminal violation of voters' trust that federal prosecutors claim.

The tapes show Kott as a trusted lieutenant doing VECO's bidding on the oil tax bill in the House, with former Senate President Ben Stevens, R-Anchorage, pursuing VECO interests in the Senate. Stevens is under investigation but has not been charged.

Kott is charged with conspiracy to solicit financial benefits for his service as a legislator, extortion "under color of official right," bribery and wire fraud, which involved improperly discussing legislative business by phone.

Allen and Smith in May pleaded guilty to extortion, conspiracy and bribery of legislators.

Federal prosecutors Tuesday for a second day played multiple secretly recorded phone calls and informal meetings between Kott, Allen, Smith and other VECO officials.

The dim, gray videotape recorded by the secret FBI camera in Room 604 of the Baranof Hotel would be R-rated on the silver screen. Much of the profanity-laden dialogue is focused on the Legislature's consideration of a new oil tax bill, considered a gateway to construction of a natural gas pipeline.

In a March 24, 2006, phone conversation, Kott brags to Smith that he has bottled up an anti-abortion bill sponsored by a fellow Republican, state Sen. Fred Dyson, and will sit on it until Dyson comes around on oil taxes.

"When Bill Allen tells me he's ready to vote it out, I'll vote it out," Kott says.

Near the end of the 2006 regular legislative session, as lawmakers deliberate about the tax rate to be imposed on the Alaska profits of oil companies, Kott crows that he lied to minority leader Ethan Berkowitz and bamboozled him into releasing votes that would result in a favorable tax rate for producers.

"I sold my soul to the devil," Kott tells Smith and Allen on May 7, 2006, in the Baranof Hotel.

He repeatedly expresses his allegiance to Allen.

"Now I own your ass," the VECO CEO tells Kott in the same conversation.

"I got it done," Kott replies. "I've got to answer to the big boy."

Allen is scheduled to testify today, followed by Smith.

In another development Tuesday, government prosecutors revealed that they consider former state Sen. Jerry Mackie an unindicted coconspirator in the Kott case.

Mackie, now a consultant in Anchorage, represented Craig for three terms in the state House and one in the Senate.

Prosecutor James Goeke said Mackie, who coordinated the political poll for Kott, should have been aware that VECO's involvement was improper.

In a phone call recorded by the FBI on July 12, 2006, Mackie tells Smith that his company, Northwest Strategies, could handle billing for the poll.

"No one ever needs to know that," he said. "That's private to private."

Mackie could not be immediately reached Tuesday night at his office or home.



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