Ex-VECO head says he bribed Ben Stevens

Allen also admits bribing former Speaker Pete Kott and former Rep. Vic Kohring

Posted: Friday, September 14, 2007

ANCHORAGE - The former head of an oil field service company admitted Thursday in court that he bribed three Alaska legislators, including the son of a U.S. senator who is the target of a federal investigation.

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Former VECO Corp. CEO Bill Allen, 70, testified Thursday in the federal corruption trial of former state House Speaker Pete Kott. Allen and a former company vice president, Rick Smith, have pleaded guilty to bribing lawmakers, and await sentencing.

Allen said he bribed Kott, former state Senate President Ben Stevens and former Rep. Vic Kohring.

Allen also revealed that he recruited Stevens' in 1995 for work on behalf of VECO, well before he was appointed to the state Senate in 2002, and Stevens maintained a consulting contract with the company through 2006.

Stevens, the son of U.S. Sen. Ted Stevens, is under federal investigation but has not been charged.

"Mr. Stevens has consistently said he's not engaged in any of the illegal activity that is alleged by Mr. Allen. He denies it," John Wolfe, Stevens' attorney, told The Associated Press.

The FBI also is investigating remodeling done to the elder Stevens' home in Girdwood. According to at least one contractor, invoices were first sent to VECO. Ted Stevens has said he paid all bills on the home that he received.

Kohring faces trial next month. Allen did not mention another lawmaker facing bribery charges, Bruce Weyhrauch.

Allen also testified he agreed to cooperate in the corruption investigation of Alaska lawmakers after the FBI promised that his three adult children would not be indicted.

Kott, whose trial began Monday, is charged with doing the bidding of VECO in exchange for money and the promise of a job.

He is accused of turning in a $7,993 invoice, purportedly for flooring work done on Allen's home, when in fact the money was used to hire his son as his re-election campaign manager.

The former speaker is accused of taking a check for $1,000 as reimbursement for a campaign donation in the same amount to former Gov. Frank Murkowski. Kott also is accused of accepting a political poll in his re-election bid paid for by VECO.

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.

Defense attorney James Wendt says that Kott was not aware of the poll and that the flooring check was an advance payment for work that would have been done in late 2006 if the federal investigation had not occurred.

Kott committed no crime by working with businessmen and lobbyists toward a goal shared by most Alaskans: passing legislation that would lead to construction of a natural gas pipeline, Wendt said.

Secret electronic recordings played in the trial's first three days show Kott working closely with Allen and Smith over a proposed change in Alaska's crude oil tax.

The tax proposal, which dominated the 2006 legislative session, was considered a gateway measure that had to be passed before the Legislature would consider measures leading to construction of a pipeline to tap the state's vast natural gas reserves.

That mega-project, on the scale of the 30-year-old trans-Alaska oil pipeline, would have presented VECO with the opportunity to bid on hundreds of millions of dollars worth of contracts.

Allen said in the secret recordings and in court that he considered the pipeline essential to the continued prosperity of not only his company but to Alaska as oil production filling the trans-Alaska pipeline continues to diminish.

Goeke asked Allen to recall how FBI agents approached him on Aug. 30, 2006, just before agents raided the legislative offices of a half-dozen Alaska legislators and VECO offices.

Allen was told that the investigation did not need him, but that if he cooperated, he would receive considerations, he testified.

During cross examination, defense attorney Wendt tried to establish that Kott had never overtly asked Allen for a job. Allen said he would not have hired Kott while he remained a legislator but that it was his clear understanding that Kott wanted to be hired as a lobbyist by VECO after he retired.

Wendt questioned Allen about hiring other legislators, and Allen revealed that VECO reluctantly had two other lawmakers on the payroll: Ben Stevens and state former state Rep. Tom Anderson, an Anchorage Republican convicted in July of bribery and conspiracy in an unrelated case.

Another VECO official had hired Anderson for legal work, Allen said, and he found out after the fact. In retrospect, Allen said, he should have canceled Anderson's contract.

He held a far higher opinion of Stevens. Allen said he was impressed with Stevens in 1995 when he was a married college student attending George Washington University while working two jobs to support his family.

After Stevens graduated, Allen said, he recruited Stevens to approach the World Bank for money VECO needed on a spill cleanup job in Russia, then kept him on contract until 2006. Stevens had the potential to be an excellent executive because of his attention to detail and hard work, he said.

He had no inkling Stevens would be appointed to the state Senate in 2002, Allen said, but he did not feel right cutting VECO's ties to him. By then, Allen said, Stevens had a fourth child.

"How am I supposed to say, 'Now that you're a senator, I can't give you any more money'" Allen said.

Stevens, 48, was among several lawmakers whose Anchorage legislative offices were searched by FBI agents a year ago. Federal prosecutors have made reference to a "State Senator B" who took $243,250 in bogus "consulting" fees from VECO.

In a court filing last month, U.S. District Court Judge John Sedwick linked the two, saying the identification of Stevens had "already been reported in the press," based on comparing the money paid by Allen and Stevens' financial disclosure reports.

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