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Former patron testifies in Kott's corruption case

Ex-VECO head says he paid an inflated invoice to legislator's business

Posted: Thursday, September 13, 2007

ANCHORAGE - The former head of an oil field services company testified Wednesday he was willing to do whatever it took to push the Alaska Legislature toward steps that would lead to the construction of a natural gas pipeline tapping the state's vast North Slope Reserves.

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Bill Allen, former chairman of VECO Corp. and now a government witness in the corruption trial of former House Speaker Pete Kott, said that included helping legislators sympathetic to the cause with cash or the promise of a job.

Allen testified he agreed to pay an inflated invoice for a flooring job to Kott's business, a $7,993 payment that would allow Kott to hire his son to run his re-election campaign.

"He was going to run again and he needed his son to help him," Allen said.

Kott stands accused of illegally doing the bidding of VECO in exchange for the $7,993, for a $1,000 reimbursement for a check Kott gave to the re-election campaign of former Gov. Frank Murkowski, for a $2,750 political poll and for the promise of future employment.

Kott's attorney denies the charges, claiming that the $7,993 was an advance for a flooring job Kott's business could not carry out in 2006 because of the disruption caused by the federal corruption investigation.

Defense attorney James Wendt also claims Kott was not aware of the poll VECO performed on Kott's House race, which he lost in 2006, and that Kott was not promised a job.

As for his close association with Allen, Wendt claims Kott and VECO had a mutual interest shared by most Alaskans: an oil tax that would keep major petroleum producers investing in Alaska, and legislation that could lead those same producers to invest in Alaska's next big boom, the natural gas pipeline.

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 former VECO Vice President Rick Smith in May pleaded guilty to extortion, conspiracy and bribery of legislators. Allen is scheduled to continue testifying today, followed by Smith.

Allen's testimony Wednesday backed up phone conversations wiretapped by the FBI and played for jurors during the first three days of the trial. The FBI also placed a hidden video camera in Room 604 of the Baranof Hotel in Juneau, a suite rented by VECO and a frequent meeting place for company officials with Kott.

The fraction of the recordings and tapes played for the jury show Kott plotting strategy, reporting legislative developments and taking direction from the company officials.

Two other legislators are also charged with bribery, former Republican Reps. Bruce Weyhrauch and Vic Kohring. Weyhrauch's trial has been delayed, while Kohring's is scheduled for next month.

Allen testified that for more than two decades, he assisted lawmakers sympathetic to the petroleum industry with campaign fundraisers.

While in Juneau in March 2006, Allen testified, he handed Kohring $1,000, in part because he was a friend who could not afford food or lodging, and in part because of his loyalty to Allen's cause in the oil tax debate.

"He slept in his office because he didn't have money to get a room," Allen testified. "Sometimes he didn't have enough money to eat ... I would say 50 percent because he was a friend and 50 percent that he was right on and would produce on PPT (the proposed petroleum profits tax)."

As for Kott, Allen said, he considered him a friend, one of the only lawmakers he could trust and an effective House speaker. If Kott had continued in that position, Allen said, "We'd probably have a gas pipeline by now."

Kott told Allen in one of the recorded conversations that he was committed to staying in the state House until pipeline legislation passed. He also told Allen he wanted to quit the legislature and become a lobbyist, and Allen said he would have hired him.

"If I told him that, I would," Allen testified.

Kott likely would have made a lot of money as a lobbyist, Allen said, because of Kott's VECO connection.

"I think if Pete would have been a lobbyist, he would have got more clients because of VECO's stature," Allen said.

Allen confirmed that he gave Kott $1,000 to pay him back for a check Kott had written at a Murkowski re-election fundraiser.

As Kott faced a tough re-election fight in the August 2006 Republican primary, Allen said, Kott needed help that Kott's son could provide if he was compensated.

"He couldn't afford it," he said of the younger Kott taking time unpaid leave from the flooring business to run the campaign. "He's got a family to take care of."



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