Pete Kott convicted of Corruption

Ex-lawmaker found guilty of trading legislative influence for bribes

Posted: Wednesday, September 26, 2007

ANCHORAGE - A federal jury Tuesday convicted a former Alaska lawmaker of three corruption charges, rejecting his claim that he worked closely with a major oil field services company on legislation that would benefit all Alaskans.

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Pete Kott, who represented Eagle River on Anchorage's north side for 14 years, including two as speaker of the House, was convicted of conspiracy to solicit financial benefits, extortion and bribery. The jury acquitted him of wire fraud.

Kott was charged with accepting nearly $9,000, a political poll and the promise of a job from VECO Corp. The company stood to make millions in contracts if the Alaska Legislature approved a revised crude oil tax that encouraged investment.

The tax was seen as gateway legislation needed before major petroleum companies would commit to participating in construction of a natural gas pipeline tapping Alaska's vast North Slope reserves and carrying it to the Midwest. That project, which state officials still hope to see built, carries a price tag of $20 billion to $30 billion.

Kott did not comment as he walked away from the federal courthouse. A message left at the office of his attorney, Jim Wendt, was not immediately returned.

A key witness in the trial was former VECO CEO Bill Allen, who along with a company vice president, Rick Smith, has pleaded guilty to bribing Kott and other lawmakers.

Allen testified that in 2000 he also sent one to four workers for up to six months to assist on the remodeling of U.S. Sen. Ted Stevens' Alaska home in Girdwood. Allen's connection to Stevens is the subject of a grand jury investigation.

The FBI in July raided Stevens' home. The senator has said he paid all bills he received for the remodeling project, which more than doubled the size of the home. Stevens' spokesman, Aaron Saunders, said by e-mail the senator would have no comment on Kott's verdict.

Jurors in Kott's case said they reached a conclusion relatively quickly on the three guilty verdicts but struggled over the wire fraud charge, which was based on a single phone call Kott made to Smith from Washington, D.C., while on legislative business. In the call, he sought the phone number of a lobbyist and ended up speaking about official business. Prosecutors said the call was part of the conspiracy.

The government's case was based on wiretaps of three phones belonging to Allen and Smith plus video recordings made by a camera that the FBI placed in a hotel room in Juneau rented by VECO during the 2006 legislative session.

The recordings show Kott, Allen and Smith discussing legislative strategy, often in sessions fueled by alcohol and laden with profanity.

In one call, Kott said he would like to become a lobbyist after he left the legislature. Allen testified it was understood that VECO would hire Kott.

Allen and Smith also testified that they schemed with Kott to give him $7,993 through his hardwood flooring business so that Kott could hire his son, Peter Kott Jr., as his campaign manager for the 2006 election. The payment, they said, was made through a phony invoice tacked on to a repair job done at Allen's home.

Juror Susan Pollard said she did not believe testimony from Kott, his son and his girlfriend, Debora Stovern, the bookkeeper for Kott's Hardwood Flooring, about invoices created for payment from Allen.

Kott claimed he received a $7,993 check for future work at the homes of Allen and Smith. Stovern testified she made up an invoice for Allen, revised it a day later when she learned that part of the work was for Smith, then created another, corrected invoice for Allen weeks later after the FBI had searched her house, seized her computer, made a copy of its hard drive and returned it to her.

"I didn't feel she was very credible," Pollard said. "I've been in business a long time. It's just not something you do."

Kott's attorney, Wendt, contended that Kott's claims of his influence on behalf of VECO were merely drunken boasts and that his voting record was a better indication that he had not sold out his constituents in favor of the company.

But Pollard said Kott hurt his credibility when he testified that he lied to his friends, telling them what they wanted to hear, but stuck to his principles when voting.

Pollard said she moved to Alaska as a young child.

"I've been very disappointed that Alaska's politics have become corrupt," she said.

Juror Donna Riley said most jurors were ready to convict Kott on Monday afternoon when they got the case. She said she wanted to sleep on it and not be rushed.

In the end, she said, "I think it was basically the same thing," she said.

U.S. District Judge John Sedwick scheduled sentencing for Dec. 7.

Kott faces a maximum sentence of 20 years in prison on the extortion charge, a maximum sentence of 10 years on the bribery charge, and a maximum sentence of five years on the conspiracy charge.

"This verdict is an important victory for the people of Alaska, who deserve to expect honest, ethical representation from their elected officials," said Assistant Attorney General Alice S. Fisher of the Criminal Division. "I thank the prosecutors and the FBI and IRS agents who worked on this case. Their effort shows that the Department of Justice will work hard to bring to justice any elected officials who betray their duties to their constituents."

Prosecutors requested that Kott post a $25,000 bond.

"My client doesn't have $25,000," Wendt said. Kott is a man of modest means, he said, and spent most of his money on his legal defense.

Sedwick rejected the bond request and said Kott could remain free.

Gov. Sarah Palin issued a press release in response to the verdict.

"The process was fair and the jurors should be commended for their careful consideration of the compelling evidence that was before them," she said. "I was shocked by some of the revelations that came out in the trial and I can understand why many Alaskans feel betrayed."

The governor called again for another look at the revised crude oil tax approved by the legislature when Kott and other lawmakers were being investigated.

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