Former CIRI chief defends contractor

Man has been accused of taking $40 million from Native corporation

Posted: Thursday, September 13, 2007

ANCHORAGE - The former chief executive of Cook Inlet Region, Inc. is defending an Anchorage contractor accused of illegally taking $40 million from the Alaska Native corporation.

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Carl Marrs is a key defense witness and close friend of the contractor, John Ellsworth, who is targeted in the lawsuit filed by new directors at CIRI.

CIRI and its business partner, Nabors Industries of Houston say Ellsworth racked up millions in unauthorized expenses, violated corporate agreements and shredded evidence at the construction company they hired him to run, Alaska Interstate Construction.

Ellsworth is countersuing for millions. Among other things, he wants CIRI and Nabors to compensate him for his ownership stake in AIC and is seeking punitive damages.

In testimony this week, Marrs said Ellsworth was a reliable business partner and a trusted friend. Ellsworth was best man at his wedding in 2002, Marrs said.

CIRI filed the lawsuit after new directors took charge of the company in 2004.

An audit by the companies alleges Ellsworth overbilled for jet expenses, received undeserved bonuses and billed personal credit card charges to the construction company.

The audit also found Ellsworth cost the companies profits in an abandoned Exxon Mobil project in Russia, and lost contracts due to illegal competition by Ellsworth.

Marrs told the jury that the charges didn't seem excessive to him. He said Ellsworth made millions for CIRI and Nabors, Marrs said. Under Ellsworth, AIC was one of CIRI's most profitable investments, he said.

Under cross-examination, Marrs said he never read AIC's business contracts or the basic document that set out how AIC would be governed, and which he himself signed.

Marrs trusted Ellsworth not to hide anything from him, and still does, he testified.

Tim Petumenos, an attorney for CIRI and Nabors, questioned Marrs' loyalty to CIRI. The attorney pointed out that Marrs was supposed to ensure that Ellsworth complied with his duties at AIC.

"I've always been loyal to CIRI," he added later.

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