Testimony: Sen. Stevens’ Son Took Bribes

By DAN JOLING

ANCHORAGE, Alaska – The former head of an oil field service company admitted Thursday in court that he bribed three Alaska legislators, including the son of a U.S. senator who is the target of a federal investigation.

Former VECO Corp. CEO Bill Allen, 70, testified Thursday in the federal corruption trial of former state House Speaker Pete Kott. Allen and a former company vice president, Rick Smith, have pleaded guilty to bribing lawmakers, and await sentencing.

Allen said he bribed Kott, former state Senate President Ben Stevens and former Rep. Vic Kohring, but he did not elaborate during 15 minutes of testimony.

Stevens, the son of U.S. Sen. Ted Stevens, is under federal investigation but has not been charged.

“Mr. Stevens has consistently said he’s not engaged in any of the illegal activity that is alleged by Mr. Allen. He denies it,” John Wolfe, Stevens’ attorney, told The Associated Press.

The FBI also is investigating remodeling done to the elder Stevens’ home in Girdwood. According to at least one contractor, invoices were first sent to VECO. Ted Stevens has said he paid all bills on the home that he received.

Kohring faces trial next month. Allen did not mention another lawmaker facing bribery charges, Bruce Weyhrauch.

Allen also testified he agreed to cooperate in the corruption investigation of Alaska lawmakers after the FBI promised that his three adult children would not be indicted.

Kott, whose trial began Monday, is charged with doing the bidding of VECO in exchange for money and the promise of a job.

He is accused of turning in a $7,993 invoice, purportedly for flooring work done on Allen’s home, when in fact the money was used to hire his son as his re-election campaign manager.

The former speaker is accused of taking a check for $1,000 as reimbursement for a campaign donation in the same amount to former Gov. Frank Murkowski. Kott also is accused of accepting a political poll in his re-election big paid for by VECO.

Kott is charged with 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 by phone.

Defense attorney James Wendt says that Kott was not aware of the poll and that the flooring check was an advance payment for work that would have been done in late 2006 if the federal investigation had not occurred.

Kott committed no crime by working with businessmen and lobbyists toward a goal shared by most Alaskans: passing legislation that would lead to construction of a natural gas pipeline, Wendt said.

Secret electronic recordings played in the trial’s first three days show Kott working closely with Allen and Smith over a proposed change in Alaska’s crude oil tax.

The tax proposal, which dominated the 2006 legislative session, was considered a gateway measure that had to be passed before the Legislature would consider measures leading to construction of a pipeline to tap the state’s vast natural gas reserves.

That mega-project, on the scale of the 30-year-old trans-Alaska oil pipeline, would have presented VECO with the opportunity to bid on hundreds of millions of dollars worth on contracts.

Allen said in the secret recordings and in court that he considered the pipeline essential to the continued prosperity of not only his company but to Alaska as oil production filling the trans-Alaska pipeline continues to diminish.

Allen spent just minutes Thursday under direct examination by federal prosecutor James Goeke. Unlike his first day on the stand, prosecutors played no wiretapped phone conversations or images and conversations secretly recorded in a room rented by VECO in Juneau’s Baranof Hotel.

Goeke asked Allen to recall how FBI agents approached him on Aug. 30, 2006, just before agents raided the legislative offices of a half-dozen Alaska legislators and VECO offices.

Allen was told that the investigation did not need him, but that if he cooperated, he would receive considerations, he testified.

“Your kids won’t be indicted, and they would help VECO,” said Allen, who added that he has cooperated with the investigation from that day on.

Later on Aug. 30, at the government’s request, Allen called Kott with potentially incriminating questions about a payment Allen made to Kott through his flooring business. Prosecutors contend Kott inflated an invoice for work never performed on hardwood floors at Allen’s home.

The check, according to prosecutors, was destined for Kott’s son, whom Kott wanted as his campaign manager for his re-election campaign.

“I asked him if he got the money for his son,” Allen testified about the phone call, and Kott said yes.

“I said, ‘How did it happen?’ He said, ‘It was a check from you.’ I said, ‘I don’t think so, Pete,’” Allen said.

The money was to help Kott with his campaign, Allen testified, and Kott did no work for the money, Allen said.

“That’s the way I understood it. Yeah,” Allen said.