Close friend testifies in Stevens trial

Former VECO chief takes stand, highlights pattern of gift giving

Posted: Wednesday, October 01, 2008

WASHINGTON - The self-made Alaska construction executive whose testimony could bring to an end the 40-year Senate career of Ted Stevens took the stand Tuesday in the corruption case against his former fishing buddy and friend.

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Manuel Balce Ceneta / The Associated Press
Manuel Balce Ceneta / The Associated Press

Bill Allen, the founder of VECO Corp. and the star witness in Stevens' trial, spoke fondly and with admiration of the 84-year-old Republican senator.

"We kind of really liked each other," Allen said Tuesday afternoon, as prosecutors introduced a photo of the two men catching a king salmon. "Had the same thoughts. Ted really worked hard. Ted loved Alaska and I loved Alaska."

But Allen also began highlighting a pattern of gift giving that is at the heart of the government case against the senator. Stevens, the longest-serving Republican in the Senate, is accused of failing to report on his annual financial disclosure forms more than $250,000 worth of gifts and home renovations, chiefly from VECO and Allen.

Prosecutor Joe Bottini, an assistant U.S. attorney from Anchorage, asked Allen whether Stevens ever paid him back for the estimated $5,000 to $6,000 cost of the backup generator the senator asked Allen to install in 1999, in advance of the Y2K scare.

"No," Allen said.

"To your knowledge, did he ever pay VECO back for the generator?"

"I don't know," Allen said. "I don't think so."

Allen, 71, is a key figure in the case against Stevens. He and former VECO vice president Rick Smith pleaded guilty in May 2007 to bribing state lawmakers as part of an effort to push through the Legislature an oil production tax favorable to North Slope oil producers. Both are cooperating with the government; neither has been sentenced.

In the three and a half days of testimony leading up to Allen's turn at the stand, jurors have heard from former VECO employees and others who described work they did on Stevens' Girdwood home. Prosecutors say Stevens never paid for $188,000 worth of renovations paid for by VECO, including a deck, an exterior staircase and extensive electrical work.

Allen, who will continue his testimony today, began by telling jurors the story of his hardscrabble origins and how he worked his way from a teenage welder in New Mexico to the wealthy owner of one of Alaska's biggest private employers. Veco was sold last year to the Colorado construction firm CH2M Hill for $380 million.

Allen also explained to jurors that his halting speech is the result of a brain injury from a 2001 motorcycle accident. He testified he has no memory problems but sometimes has difficulty speaking the words he is thinking.

Allen described meeting Stevens for the first time in the early 1980s at fundraisers and events for Republican Frank Murkowski, who was running for the U.S. Senate and went on to a term as Alaska governor. Allen spoke wistfully of the former "close, personal friendship" between him and Stevens and how they used to go to "boot camp" in the desert Southwest - where they would walk around, eating little and drinking only wine, "trying to get some pounds off."

While Allen testified, Stevens looked down at his table, writing. It didn't appear the two former friends ever made eye contact.

Allen also described a complicated 1999 transaction involving a new Land Rover he gave to Stevens in exchange for $5,000 and a 1964 Ford Mustang. Stevens wanted to sell the Mustang and buy his daughter, Lily, a car, Allen said. He offered to give Stevens a $44,000 Land Rover Discovery that he had bought for one of his grandsons but decided not to give him because he was unhappy with him.

Stevens estimated the Mustang was worth about $25,000. Allen thought it was worth closer to $15,000 to $20,000. When asked whether he thought he had gotten a good trade, he said, "Not at that time, no."

Then why did you enter the agreement, asked Bottini?

"Because I liked Ted," Allen said.

Allen's courtroom testimony and secret recordings he made of conversations with lawmakers and lobbyists were key to the Justice Department's seven previous successful convictions in a wide-ranging federal probe into corruption in Alaska politics.

The Justice Department convictions include three former Alaska state representatives, all on bribery charges: Tom Anderson, Pete Kott and Vic Kohring. One other state representative, Bruce Weyrauch, is awaiting trial, as is current state Sen. John Cowdery.

In the same investigation, Jim Clark, onetime chief of staff to former Gov. Murkowski, pleaded guilty in March to one count of conspiracy and agreed to cooperate with the federal investigation. Former Anchorage lobbyist Bill Bobrick, who also cooperated with prosecutors, pleaded guilty in May 2007 to a single conspiracy count.

If asked during testimony, Allen will not be allowed to specifically name one of the Alaska state lawmakers he pleaded guilty to bribing: former Senate President Ben Stevens, Ted Stevens' son.

In public charging documents connected to Allen's own case, Ben Stevens is referred to as "State Senator B." Allen named Stevens specifically in testimony in the trials last year of two Alaska legislators, but he has been instructed by government lawyers not to call "State Senator B" by name during the proceedings. Ben Stevens has not been charged with any wrongdoing.



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