Records reveal details leading to indictment

Anderson promoted prisons; charges could put him inside

Posted: Monday, December 25, 2006

In 2004, a privately owned Texas prison firm had a problem in Alaska.

Its chain of halfway houses that took in prisoners under contract with the state Corrections Department was struggling.

It had facilities in Fairbanks, Bethel, Nome and several Anchorage locations. Low occupancy rates were hurting profits, especially in Anchorage.

Cornell Companies, the Houston-based owner of the facilities, also had some top lobbyists on their payroll, including a former commissioner of corrections for the state.

Also on its payroll was a key state legislator, Rep. Tom Anderson, R-Anchorage, according to the U.S. Department of Justice.

The lobbyists' affiliation was legal, but Anderson's wasn't, according to an indictment filed in U.S. District Court for Alaska earlier this month.

Anderson was arrested Dec. 7 on charges of bribery, extortion and money laundering. He has pleaded not guilty.

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If convicted on all counts, he faces a possible sentence of 20 years or more in prison and hundreds of thousands of dollars in fines. Anderson was unavailable for comment for this article.

On federal wiretaps, two Cornell lobbyists were heard discussing efforts to bribe Anderson, who they said was willing to be "our boy in Juneau" in exchange for cash payments, according to the Department of Justice indictment.

Cornell, whose stock is traded on the New York Stock Exchange, reported revenues of $346 million last year. It was not identified in the indictment.

Company spokeswoman Christine Taylor confirmed the company had been notified of the Anderson investigation by the Department of Justice.

"We've been notified of the indictment, but no wrongdoing has been alleged," she said.

The indictment said the company was unaware of the actions of its lobbyists. A confidential FBI source had at various times been a lobbyist for the company.

He used funds provided by the FBI, not the company, for the bribes. He didn't notify Cornell because of "the undercover nature of the operation," the Justice Department said.

"The corrections company was not implicated in the corrupt activities that are alleged in the indictment," according to the Department of Justice press release announcing the arrest.

Anderson worked unsuccessfully to help Cornell expand its private prison and juvenile detention operations into Alaska but was more successful helping out the company's halfway houses.

That effort, not previously reported, is detailed in the indictment and in Alaska Department of Corrections documents obtained under the state Public Records Act.

When Cornell's halfway houses were struggling, the company lobbyist approached Anderson, who allegedly agreed to try to influence the Department of Corrections. In exchange, Anderson apparently received thousands of dollars in cash from the lobbyist.

On Oct. 20, 2004, Anderson wrote a letter to then-Corrections Commissioner Marc Antrim, urging more use of the halfway houses and requesting a personal meeting.

"Since private contractors only get paid for occupied beds, severe underutilization creates serious budget challenges when beds are left empty," Anderson wrote to Antrim on legislative letterhead.

In the letter, Anderson also noted that he was a member of the House Finance Committee's Corrections Subcommittee. The indictment alleges that a lobbyist wrote the letter for Anderson.

On. Oct. 29, 2004, Antrim met with Anderson, Department of Corrections records show. What happened in the meeting?

"I'm not able to comment on that," Antrim said in a phone call to his Juneau home. He is no longer with the department.

Antrim declined to say why he could not comment. There are no indications that Antrim is under investigation. However, prosecutors sometimes ask potential witnesses not to speak publicly about matters that might come up in court.

Federal investigators obtained bank records showing that a Cornell lobbyist on Oct. 21, 2004, wrote a check to Anderson's consulting business from Pacific Publishing, a company created by another Cornell lobbyist.

The check was purportedly for writing public policy articles for a Pacific Publishing Web site. The indictment alleges that there was no web site and that the money was laundered through Pacific Publishing to deceive the Alaska Public Offices Commission.

On the wiretaps, Anderson was overheard acknowledging to the lobbyist that that payment and others were "not really for your Web thing," the indictment states.

The Department of Justice called Pacific Publishing a "sham corporation" formed for the sole purpose of disguising bribe money.

In the 2004 fiscal year, Cornell received $12.1 million in state payments for its halfway houses, $12.3 in 2005 and $12.4 in 2006, according to Richard Schmitz, spokesman for the Department of Corrections.

Alaska state law bars a legislator from accepting money in exchange for official acts, but courts have found the state Constitution's free speech provisions make prosecuting legislators for such actions difficult. Anderson has been charged under federal law, however.

Federal investigators continued their investigation of Anderson for more than two years after the Cornell lobbyist investigation, during which time Anderson was re-elected to the House of Representatives.

The U.S. Attorney for Alaska did not say why it took so long to indict Anderson.

Anderson chose not to run for re-election this year and leaves office in January after serving two terms in the House.

• Pat Forgey can be reached at

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