Some politicians wash their hands of VECO money

Posted: Friday, October 05, 2007

WASHINGTON - For years, while VECO Corp. was flush with oil profits and in a giving mood, Capitol Hill politicians happily accepted hundreds of thousands of dollars in campaign donations from employees of the Alaska oil contractor.

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But now that two Alaska lawmakers are under FBI scrutiny as part of a growing corruption scandal involving VECO, the friendly feelings have faded and some in Washington are shedding the campaign donations connected with the company.

VECO founder Bill Allen and former company vice president Rick Smith have pleaded guilty to bribing public officials. They also admitted running a company "special bonus program" that steered money to favored candidates, violated federal tax laws and sent untold amounts of corporate money into political coffers.

Testifying recently at a corruption trial in Anchorage, Allen said his generosity was aimed at oil-friendly lawmakers and candidates. "If they're working with the oil industry, I'd like to help with their campaigns," he said.

From 1993 until the FBI approached them last year, Allen and Smith donated more than $200,000 to federal political causes. Their employees donated twice that amount, according to an analysis of campaign finance data from the Federal Election Commission and the nonpartisan Center for Responsive Politics.

Donation totals:

Here is a look at campaign contributions by VECO Corp., the Alaska oil services company, to elected officials in Washington since 1993.

• Rep. Don Young, R-Alaska: $180,630

• Sen. Ted Stevens, R-Alaska: $70,500

• Sen. Lisa Murkowski, R-Alaska: $41,250

• President George W. Bush: $22,050

• Sen. Daniel K. Inouye,D-Hawaii: $13,000

• Sen. Richard Burr, R-N.C.: $6,000

• Sen. Tom Coburn, R-Okla. : $6,000

• Sen. Norm Coleman,R-Minn.: $6,000

• Sen. Jim DeMint, R-S.C.: $6,000

• Sen. John Sununu, R-N.H.: $6,000

• Sen. John Thune, R-S.D.: $6,000

• Sen. David Vitter, R-La.: $6,000

• Sen. Kit Bond, R-Mo.: $5,016

• Sen. Arlen Specter, R-Pa.: $4,000

• Sen. George Voinovich,R-Ohio: $3,750

• Sen. John Ensign, R-Nev.: $2,000

• Rep. Steve Pearce R-N.M.: $1,000

• Rep. Jon Porter, R-Nev.: $1,000

• Rep. Dennis Rehberg,R-Mont.: $1,000

• Rep. Barbara Cubin, R-Wyo.: $500

• Sen. Larry Craig, R-Idaho: $200

Source: Center for Responsive Politics.

At least some of that money came from the special bonus program, which experts say appears to violate campaign finance laws. But the Justice Department, which has all of VECO's records, has so far revealed few details about when the program began or who benefited from it.

That leaves several candidates, from Alaska to the White House, unclear about sizable donations.

"We don't know anything more about this so-called special bonus program than we've read in the newspaper," said Timothy McKeever, the campaign treasurer for Sen. Ted Stevens, R-Alaska.

Stevens, who is under federal investigation because VECO employees helped renovate his house, donated to a veterans charity $18,000 his campaign received from Allen and Smith, McKeever said. The senator plans to keep more than $50,000 from VECO employees.

VECO was the most generous source of support for Alaska's congressional delegation. Employees donated more than $360,000 to candidates and their political action committees since 1993. Like Stevens, Republican Sen. Lisa Murkowski donated to charity $8,000 her campaign received from Allen and Smith but not the $33,000 or so it got from other employees.

Alaska Rep. Don Young, who has also come under scrutiny in the case, has made no move to return more than $180,000 in donations from VECO employees, including more than $34,000 from Allen and Smith.

VECO was generous far beyond Alaska: President Bush's campaign received more than $22,000, including $5,500 from Allen and Smith. Sen. Daniel K. Inouye, D-Hawaii, received thousands of dollars for his campaign. So did several Republicans senators including Richard Burr of North Carolina, Norm Coleman of Minnesota, Jim DeMint of South Carolina, Arlen Specter of Pennsylvania, John Sununu of New Hampshire, John Thune of South Dakota, Kit Bond of Missouri, David Vitter of Louisiana, George Voinovich of Ohio and John Ensign of Nevada.

Even Sen. Tom Coburn, R-Okla., an outspoken critic of the Alaska delegation's ability to steer money to the state without going through the normal appropriations process, received VECO-linked donations.

Lawmakers are divided on how to handle the money.

Bond's office said the senator recently donated about $9,000 to charity. That included not just the contributions received from Allen and Smith, but also donations from their wives and VECO employees.

DeMint spokesman Wesley Denton said the senator was "appalled to learn about these admitted crooks" and would donate all VECO contributions to the Citizens Against Government Waste, a nonprofit group he said was "dedicated to shining a light on this type of government corruption."

The National Republican Senatorial Committee said it donated to charity about $25,000 it got directly from Allen. Spokeswoman Rebecca Fisher said Thursday the committee plans to return or donate an additional $50,000 from VECO employees. She said the committee is waiting until the case is resolved, however, because any donations deemed improper would have to be sent to the Treasury Department.

Thune's spokesman said Wednesday the senator would donate to charity $2,000 the campaign received from Allen and Smith because they pleaded guilty, but will keep $4,000 from other VECO employees. Rep. Jon Porter, R-Nev., said he donated to charity $500 his campaign received from Allen.

Bush's campaign books are closed but Danny Diaz, a spokesman for the Republican National Committee, said the campaign "would take appropriate action" if it learned improper donations were received.

Inouye, a close friend of Stevens, also plans to keep $13,000 in VECO-related contributions. Coleman's office said his campaign books were closed and the money was already spent.

Coburn, too, plans to keep his donations. Spokesman John Hart said the senator "has more than demonstrated his independence on spending, particularly related to projects in Alaska."

Others did not return messages asking about the contributions.

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