Ex-legislator's son takes stand in corruption trial

Peter Kott Jr. defends executive's payment

Posted: Wednesday, September 19, 2007

ANCHORAGE - The son of a former Alaska legislator charged with corruption took the stand in his father's defense Tuesday, claiming money he took to work on his father's re-election campaign was an advance payment for flooring work, not a bribe.

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Peter Kott Jr. said he received just under $8,000 and understood that the family's hardwood flooring business was obligated to perform two jobs to earn it.

"The money was specifically from the flooring company and it was to support a couple of projects after the primary," Kott Jr. said. The jobs were at the home of VECO Corp. executive Rick Smith and a female customer, he said.

Kott's father, former state Rep. Pete Kott, is charged with trading his legislative influence to VECO executives for cash, a political poll and the promise of a job with the company after he left office.

Kott is being tried on four federal charges: 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 in a single phone call when he was in Washington, D.C.

Federal prosecutors say Kott accepted nearly $9,000, including a $7,993 check that he used to pay his son to work as his campaign manager.

Smith and former VECO CEO Bill Allen pleaded guilty in May to bribing Kott and other legislators. They agreed to cooperate with the investigation.

Kott Jr. directly contradicted the testimony of Allen and Smith, who testified last week they schemed to help the elder Kott with his campaign in part because of his support for issues they cared about, including a crude oil tax rate favored by producers.

Kott Jr., 35, said he wanted to help in his father's re-election campaign because he faced a tough Republican primary challenge from Anna Fairclough, the former chairwoman of the Anchorage Assembly.

Kott Jr. originally thought he could live off savings during the campaign, he said. But in late July 2006, about a month before the primary, he told his father the candidate would need to pay him or he'd have to go back to the flooring business to support his family.

Smith testified last week that his floors, installed only four years earlier, did not need refinishing. Smith said that he met Rep. Kott in 2006 at the Rendezvous bar Juneau and hatched the scheme to pay Kott $7,793 payment by creating a phony invoice for refinishing work. Later, Smith testified, he was surprised to learn that Kott had instead tacked on a phony invoice to a refinishing job done at Allen's house.

Allen paid the inflated invoice with a check that Smith personally delivered to Kott, Smith said. Both Allen and Smith testified they knew the money was destined for young Kott and the campaign.

But Peter Kott Jr. testified that Smith had issues with his floor even as it was being installed in 2002. Smith was a "tough customer," he said, insisting that the Kotts remove all vestiges of a brush stroke left in the coating applied to the Brazilian cherry wood. Instead of the customary two or three coats of finish, they ended up applying five coats, Kott Jr. said.

Two years later, Kott Jr. said, Smith complained about fading, discoloration and seams. Kott Jr. said the problem could be rectified by sanding and refinishing. However, he recommended letting the wood become acclimated for a few more years before doing the work, he said.

The topic came up again in 2006, Kott Jr. testified, and Smith told him the floor could be refinished in September or October when his wife was out of town.

"I said, 'Give me a call. We'll take care of it,'" Kott Jr. said.

Then in July, he said, he and his father were at the home of Allen, facing the prospect of the younger man leaving the campaign. Allen, he said, suggested what would have been an illegal payment, Kott Jr. said.

"He said, 'Why don't I just give you some cash?' I said, 'No, no-no-no-no-no,'" Kott Jr. said.

Instead, Kott Jr. said, he suggested the flooring company simply be paid in advance for Smith's flooring job.

Under cross examination by prosecutors, Kott Jr. acknowledged that he had never contacted Smith about the job, never stopped by his home and never returned the $4,400 he said he had received in advance.

"If things work out, I'd be happy to go back in," he said.

Kott Jr. also testified about another key part of the government case: that his father accepted a $2,750 political poll paid for by VECO.

Kott Jr. said political polls played no part in any of his father's campaigns. Polls, he said, were for people who needed to form their campaign strategy. His father had a campaign strategy and stuck to it, he said.

"We never relied on polls," Kott Jr. said. "No polls. We don't believe in polls."

Wouldn't it have been valuable for a campaign manager, prosecutor Nicholas Marsh asked, to find out where his father stood in relation to Fairclough a month before the election?

No, said the younger Kott. It was too late to change media buys, he said, and polls are unreliable.

"It's one of the things I don't put credence to and neither would my dad," he said.

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