Alaska Political Corruption Probe
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The Alaska political corruption probe refers to a 2003 to 2010 widespread investigation by the
Public Integrity Section The Public Integrity Section (PIN) is a section of the Criminal Division of the U.S. Department of Justice charged with combating political corruption at all levels of government through the prosecution of corrupt federal, state, and local electe ...
of the
U.S. Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the U.S. government that oversees the domestic enforcement of federal laws and the administration of justice. It is equi ...
, the
Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
, and the
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...
into
political corruption Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, influen ...
of nine then-current or former Alaskan state lawmakers, as well as Republican US Representative
Don Young Donald Edwin Young (June 9, 1933 – March 18, 2022) was an American politician from Alaska. He is the List of members of the United States Congress by longevity of service, longest-serving Republican Party (United States), Republican in House ...
and then-US Senator, Republican
Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
. Sometimes referred to as "The Corrupt Bastards Club" or the "Operation Polar Pen", the investigation focused on the
oil industry The petroleum industry, also known as the oil industry, includes the global processes of exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products. The largest volume products ...
,
fisheries Fishery can mean either the enterprise of raising or harvesting fish and other aquatic life or, more commonly, the site where such enterprise takes place ( a.k.a., fishing grounds). Commercial fisheries include wild fisheries and fish farm ...
and
for-profit prison A private prison, or for-profit prison, is a place where people are imprisoned by a third party that is contracted by a government agency. Private prison companies typically enter into contractual agreements with governments that commit priso ...
industries. By the spring of 2006, the FBI set up in a Baranof hotel suite just three blocks away from the capitol building in Juneau. From their position in the hotel suite, they gathered evidence, such as a videotape of VECO's CEO Bill Allen arranging paper money for legislators, and made other observations. By August 2008, the investigation resulted in indictments against six sitting or former Alaska Republican state legislators on corruption charges. In August 2008 US Senator Ted Stevens was indicted and, by October, he was convicted in Washington, D.C., on seven felony counts of failure to disclose gifts. The convictions, eight days before the November 2008 election, resulted in his narrow loss, after 40 years in the U.S. Senate, to Democrat
Mark Begich Mark Peter Begich ( ; born March 30, 1962) is an American politician and lobbyist who served as a United States Senate, United States senator from Alaska from 2009 to 2015. A member of the Democratic Party (United States), Democratic Party, he ...
. This makes him the most senior U.S. senator to lose a bid for re-election, defeating
Warren Magnuson Warren Grant Magnuson (April 12, 1905May 20, 1989) was an American lawyer and politician who represented the Washington (state), state of Washington in United States Congress, Congress for 44 years, first as a United States House of Representativ ...
's record in
1980 Events January * January 4 – U.S. President Jimmy Carter proclaims a United States grain embargo against the Soviet Union, grain embargo against the USSR with the support of the European Commission. * January 6 – Global Positioning Sys ...
. His convictions were later set aside because of
prosecutorial misconduct In jurisprudence, prosecutorial misconduct or prosecutorial overreach is "an illegal act or failing to act, on the part of a prosecutor, especially an attempt to sway the jury to wrongly convict a defendant or to impose a harsher than appropria ...
and the
United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a United States federal executive departments, federal executive department of the U.S. government that oversees the domestic enforcement of Law of the Unite ...
ended further prosecution. In addition to the conviction of US Senator Stevens, two executives of the
VECO Corporation VECO Corporation was an American oil pipeline service and construction company until its purchase in September 2007 by CH2M Hill. As of that date, the VECO Corporation ceased to exist. Founded in 1968 as Veltri Enterprises by Wayne Ray Veltri ...
, an oilfield services contractor, pleaded guilty to charges of bribery and conspiracy to impede the Internal Revenue Service. Alaska businessmen/lobbyists Bill Weimar (former for-profit halfway house owner) and Bill Bobrick, as well as
Jim Clark James Clark (4 March 1936 – 7 April 1968) was a British racing driver from Scotland, who competed in Formula One from to . Clark won two Formula One World Drivers' Championship titles with Lotus, and—at the time of his death—held the ...
, the former governor's chief of staff, also were indicted and convicted. Clark's guilty plea and sentence were later vacated before he was ordered to report to custody. That was followed by ex-Alaska State Rep.
Bruce Weyhrauch Bruce Weyhrauch is an attorney in Juneau, Alaska, United States. He is also a former representative in the Alaska State House representing Juneau's District 4. Weyhrauch has practiced at his own law office in Juneau for nearly three decades. H ...
's Supreme Court challenge to the
honest services fraud Honest services fraud is a crime defined in (the federal mail and wire fraud statute), added by the United States Congress in 1988. The idea of this law was to criminalize not only schemes to defraud victims of money and property, but also sch ...
statute. His case was decided on June 24, 2010, in association with the ''
Skilling v. United States ''Skilling v. United States'', 561 U.S. 358 (2010), is a Supreme Court of the United States, United States Supreme Court case interpreting the honest services fraud statute, . The case involves former Enron CEO Jeffrey Skilling and the honest ser ...
'' and
Conrad Black Conrad Moffat Black, Baron Black of Crossharbour (born 25 August 1944), is a Canadian-British writer and former politician, Publishing, newspaper publisher, Investor, financier, and Fraudster, convicted fraudster. Black's father was businessma ...
case decisions. While the Court overturned the ''Skilling'' conviction, stating that the honest services fraud statute was not applicable to private citizens, the Court upheld, but narrowed the application of the honest services fraud statute by stating that it was applicable to public officials only, and remanding Weyhrauch's conviction to the 9th Circuit Court of Appeals. Federal prosecutors later agreed not to retry Weyhrauch on felony charges in exchange for Weyhrauch's agreement to plead guilty to a single misdemeanor in an Alaska State Court. An Alaska state court judge then gave Weyhrauch a three-month suspended jail sentence and a $1,000 fine.


History

The probe began in 2004 or earlier. By 2006 the name "Corrupt Bastards Club" (alternatively "Corrupt Bastards Caucus") began being used to designate Alaska legislators implicated in the federal corruption (a.k.a., "Polar Pen") investigation. The nickname originated in the spring of 2006 as a barroom joke among Alaska legislators after the publication of a guest article by Lori Backes, executive director of the All Alaska Alliance. It ran in Alaska's three largest newspapers and named 11 lawmakers who had received large campaign contributions from executives of the oilfield services company VECO Corporation. VECO had a long history of making substantial campaign contributions to Alaska politicians. The article also named Senate President
Ben Stevens Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State ...
, son of U.S. Senator
Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
, as having received large consulting fees from VECO. In her article, Backes detailed the extent of political campaign donations contributed between 1998 and 2004 by the top seven VECO executives to Alaska lawmakers who were in office at the time her article was written. The figures were based on reports made by contributors and recipients to the Alaska Public Offices Commission. *
Senator A senate is a deliberative assembly, often the upper house or Legislative chamber, chamber of a bicameral legislature. The name comes from the Ancient Rome, ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior ...
John Cowdery John Joe Cowdery (February 11, 1930 – July 13, 2013) was a Republican member of the Alaska Senate, representing the O District from 2001 through 2008. He was previously a member of the Alaska House of Representatives from 1982 through 1984, an ...
( R-
Anchorage Anchorage, officially the Municipality of Anchorage, is the most populous city in the U.S. state of Alaska. With a population of 291,247 at the 2020 census, it contains nearly 40 percent of the state's population. The Anchorage metropolita ...
), Senate Rules Committee Chair: $24,550. * Representative
Pete Kott Peter Kott (born 1949) is a former Republican state representative for District 17 serving Eagle River, Alaska, in the Alaska Legislature for seven terms, from 1993 until 2007. He was Speaker of the House during his sixth term in 2003–2004. O ...
(R- Eagle River), former speaker of the House: $21,300. * Representative Norman Rokeberg (R-Anchorage), House Rules Committee Chair: $18,000. * Representative
Vic Kohring Victor H. Kohring (August 2, 1958 – September 6, 2022) was an American politician who was a member of the Alaska House of Representatives. Elections Kohring was elected as a Republican to seven consecutive two-year terms beginning in 1994. K ...
(R-
Wasilla Wasilla ( Dena'ina: ''Benteh'') is a city in Matanuska-Susitna Borough, Alaska, United States, and the fourth-largest city in Alaska. It is located on the northern point of Cook Inlet in the Matanuska-Susitna Valley of the southcentral part ...
), House Oil and Gas Committee Chair: $14,708. *
Governor A governor is an politician, administrative leader and head of a polity or Region#Political regions, political region, in some cases, such as governor-general, governors-general, as the head of a state's official representative. Depending on the ...
Frank Murkowski Frank Hughes Murkowski (born March 28, 1933) is an American politician. A member of the Republican Party (United States), Republican Party, he served as a United States Senate, United States Senator representing Alaska from 1981 to 2002 and as t ...
(R): $6,500 (excluding donations to prior U.S. Senate races). * Representative (later state Senator and Lieutenant Governor) Kevin Meyer (R-Anchorage), House Finance Committee Co-Chair: $12,300. * Representative Mike Chenault (R- Nikiski), House Finance Committee Co-Chair: $12,000. * Representative (later Senator) Lesil McGuire (R-Anchorage), House Judiciary Committee Chair: $12,000. * Senator Con Bunde (R-Anchorage), Senate Labor and Commerce Committee Chair: $11,500. * Senator Lyda Green (R-Wasilla), Senate Finance Committee Co-Chair: $28,000. * Representative Mike Hawker (R-Anchorage): $8,050. * Representative
Tom Anderson Thomas Anderson (born November 8, 1970) is an American technology entrepreneur and co-founder of the social networking website Myspace, which he founded in 2003 with Chris DeWolfe. He was later president of Myspace and a strategic adviser ...
(R-Anchorage), House Labor and Commerce Chair: $8,000. Additionally, Backes noted the consulting contract Senate President Ben Stevens (R-Anchorage) had with VECO Corporation and financial relationships other lawmakers had with other companies active in the oil and gas industry, including
ConocoPhillips ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas. The company has operations in 15 countries and has production in t ...
and ASCG Incorporated, the latter a subsidiary of the Alaska Native-owned
Arctic Slope Regional Corporation Arctic Slope Regional Corporation, or ASRC, is one of 13 Alaska Native Regional Corporations created under the Alaska Native Claims Settlement Act of 1971 (ANCSA) in settlement of aboriginal land claims. ASRC was incorporated in Alaska on June 22, ...
which is heavily involved in oilfield business in Alaska. According to Chenault, one of the lawmakers named in the article: "Somebody walked up n the barand said, 'You corrupt bastards,' and that name stuck." Hats with the label "CBC," standing for "Corrupt Bastards Club" or "Corrupt Bastards Caucus," were later printed up, but according to Chenault "that was the extent of the CBC deal." In the first week of August 2006, an ill Representative Carl E. Moses returned to the state capitol in Juneau after receiving medical treatment in Anchorage, to cast a critical vote that ensured passage of a bill giving tax breaks to the oil industry. The vote took place, shortly after Moses received campaign contributions from Bill Allen and five other VECO executives, the only Democrat to receive any from that source. The FBI had set up in a Baranof hotel suite just three blocks away from the capitol building in Juneau. There they videotaped VECO's CEO Bill Allen, peeling off bills for legislators to stuff in their pockets. According to the Juneau Empire, Ray Metcalfe said he had spoken with FBI agents about the case, but didn't know how the feds first got interested in Alaska. "I think the jury is still out on what started this," said Metcalfe. Juneau Mayor Bruce Botelho, the longest-serving attorney general in the state's history, appointed during the successive administrations of Republican
Wally Hickel Walter Joseph Hickel (August 18, 1919 – May 7, 2010) was an American businessman, real estate developer, and politician who served as the second governor of Alaska from 1966 to 1969 and 1990 to 1994, as well as U.S. Secretary of the Interior ...
, and Democrat Tony Knowles said it appeared that those state agencies responsible for ensuring ethical government had failed to do their jobs, but it was too soon to tell for sure.


Raids on legislative offices

On August 31 and September 1, 2006, the
FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
served some 20 search warrants in
Anchorage Anchorage, officially the Municipality of Anchorage, is the most populous city in the U.S. state of Alaska. With a population of 291,247 at the 2020 census, it contains nearly 40 percent of the state's population. The Anchorage metropolita ...
,
Juneau Juneau ( ; ), officially the City and Borough of Juneau, is the capital of the U.S. state of Alaska, located along the Gastineau Channel and the Alaskan panhandle. Juneau was named the capital of Alaska in 1906, when the government of wha ...
,
Wasilla Wasilla ( Dena'ina: ''Benteh'') is a city in Matanuska-Susitna Borough, Alaska, United States, and the fourth-largest city in Alaska. It is located on the northern point of Cook Inlet in the Matanuska-Susitna Valley of the southcentral part ...
, Eagle River, Girdwood, and
Willow Willows, also called sallows and osiers, of the genus ''Salix'', comprise around 350 species (plus numerous hybrids) of typically deciduous trees and shrubs, found primarily on moist soils in cold and temperate regions. Most species are known ...
, primarily on the district and capitol offices of several legislators. Republican legislators whose offices were searched included Senator
John Cowdery John Joe Cowdery (February 11, 1930 – July 13, 2013) was a Republican member of the Alaska Senate, representing the O District from 2001 through 2008. He was previously a member of the Alaska House of Representatives from 1982 through 1984, an ...
, Senate President (and son of U.S. Senator
Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
)
Ben Stevens Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State ...
, Representatives
Vic Kohring Victor H. Kohring (August 2, 1958 – September 6, 2022) was an American politician who was a member of the Alaska House of Representatives. Elections Kohring was elected as a Republican to seven consecutive two-year terms beginning in 1994. K ...
,
Bruce Weyhrauch Bruce Weyhrauch is an attorney in Juneau, Alaska, United States. He is also a former representative in the Alaska State House representing Juneau's District 4. Weyhrauch has practiced at his own law office in Juneau for nearly three decades. H ...
,
Pete Kott Peter Kott (born 1949) is a former Republican state representative for District 17 serving Eagle River, Alaska, in the Alaska Legislature for seven terms, from 1993 until 2007. He was Speaker of the House during his sixth term in 2003–2004. O ...
and Bev Masek as well as Democratic Senator Donny Olson. The warrants permitted the search of computer files, personal diaries, Alaska Public Offices Commission reports, and any other items showing evidence of financial ties between legislators and the oilfield services company VECO Corporation, as well as clothing items with the phrase "Corrupt Bastards Club" or its related acronym printed on it. A search warrant for Sen. Olson's Juneau office, made available by his office to the public, specifically authorized the seizure of documents relating to VECO Corporation executives Bill Allen (CEO), Richard Smith (vice president), Pete Leathard (president), and Roger Chan (
chief financial officer A chief financial officer (CFO) is an officer of a company or organization who is assigned the primary responsibility for making decisions for the company for projects and its finances; i.a.: financial planning, management of financial risks, ...
). The warrant also authorized the seizure of clothing, including hats, bearing the logos or phrases "VECO," "Corrupt Bastards Caucus," "Corrupt Bastards Club," or "CBC" printed on them. John Cowdery was indicted for bribery and extortion under official right and bribery concerning programs that receive federal funding.


Management of corruption investigation

It later emerged that the investigation of
political corruption Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain. Forms of corruption vary but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, influen ...
in
Alaska Alaska ( ) is a non-contiguous U.S. state on the northwest extremity of North America. Part of the Western United States region, it is one of the two non-contiguous U.S. states, alongside Hawaii. Alaska is also considered to be the north ...
was being managed not by the Alaska U.S. Attorney's office, but rather by the
Public Integrity Section The Public Integrity Section (PIN) is a section of the Criminal Division of the U.S. Department of Justice charged with combating political corruption at all levels of government through the prosecution of corrupt federal, state, and local electe ...
of the
U.S. Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the U.S. government that oversees the domestic enforcement of federal laws and the administration of justice. It is equi ...
in
Washington, D.C. Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and federal district of the United States. The city is on the Potomac River, across from Virginia, and shares land borders with ...
, with FBI agents working out of the
FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
building in downtown Anchorage acting as lead investigators. The FBI raids on legislative offices on August 31 and September 1 involved dozens of extra FBI agents brought up from the
Lower 48 The contiguous United States, also known as the U.S. mainland, officially referred to as the conterminous United States, consists of the 48 adjoining U.S. states and the District of Columbia of the United States in central North America. The ter ...
but returned home after the initial round of searches and interviews. Other agencies, including the
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...
, were also involved. The Public Integrity Section, created in 1976, is charged with the investigation of election fraud, misconduct by federal judges, and corruption of elected officials in all levels of government — federal, state, and local. While U.S. Attorney offices also investigate and prosecute public corruption cases, because U.S. Attorneys are political appointees in local jurisdictions, they are sometimes recused from particular cases. Brooke Miles, then-executive director of the Alaska Public Offices Commission, reported that the FBI began to collect public campaign reports and financial disclosure records on selected Alaska legislators perhaps a year prior to the raids, and returned at the start of 2006 to obtain such records for all legislators.


Investigation widens


Fisheries

The FBI conducted a second search on the legislative office of Republican State Senator Ben Stevens on September 18, 2006, seizing among other items documents related to the proposed natural gas pipeline and the oil and gas tax law which had been discussed in the
Alaska Legislature The Alaska State Legislature is the state legislature of the U.S. state of Alaska. It is a bicameral institution consisting of the 40-member Alaska House of Representatives (lower house) and the 20-member Alaska Senate (upper house). There a ...
during the regular and two special legislative sessions in 2006, as well as items related to his work on the Senate Ethics Committee and documents related to fisheries. Stevens disclosed to the ''
Anchorage Daily News The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska. The newspaper is headquartered in Anchorage, ...
'' that the FBI seized items during both searches of his office related to the Alaska Fisheries Marketing Board (AFMB), created under legislation by Ben Steven's father, U.S. Senator
Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
, to distribute federal grants to promote Alaska seafood. Ben Stevens had been chair of AFMB until early in 2006. He had received consulting fees from at least three organizations that had benefited from the grants — over $250,000 during the time he served on the board. Other documents related to fisheries were also seized in the September 18 FBI search. One of these was a copy of an affidavit by Victor Smith, a salmon fisherman from Friday Harbor who alleged that Stevens had been paid by a seiners association to lobby his father and that he failed to disclose that income as required by Alaska law.


Private corrections

In October 2006, Rep. Vic Kohring's attorney, Wayne Anthony Ross, provided the ''Anchorage Daily News'' with a copy of the search warrant that had been served on Kohring on August 31, as well as a list of items seized. The warrant showed that federal investigators were also interested in information related to developer Marc Marlow and correspondence between Kohring and the
Alaska Department of Corrections The Department of Corrections of the state of Alaska is an agency of the state government responsible for corrections. The department manages institutions, parole and probation. The current commissioner is Jen Winkelman. The agency has its headqu ...
. Ross told the ''
Anchorage Daily News The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska. The newspaper is headquartered in Anchorage, ...
'' that his client had been questioned by the FBI about Cornell Companies' (purchased by
GEO Group The GEO Group, Inc. (GEO) is a publicly traded C corporation headquartered in Boca Raton, Florida, that invests in private prisons and mental health facilities in the United States, Australia, South Africa, and the United Kingdom. The company ...
in 2010) effort, in cooperation with VECO Corporation, to build a
for-profit prison A private prison, or for-profit prison, is a place where people are imprisoned by a third party that is contracted by a government agency. Private prison companies typically enter into contractual agreements with governments that commit priso ...
in Whittier. That scheme failed due to gubernatorial and bipartisan legislative opposition. The ''Daily News'' observed, "Those documents, though lacking detail or context, suggest that the probe is wide-ranging and not focused on any one company, issue or individual."


Tom Anderson arrested on federal bribery and extortion charges

The observation by the ''Anchorage Daily News'' and other news organizations, that the probe had a wider focus than legislators' ties to the VECO Corporation, was confirmed on December 7, 2006, when outgoing Representative
Tom Anderson Thomas Anderson (born November 8, 1970) is an American technology entrepreneur and co-founder of the social networking website Myspace, which he founded in 2003 with Chris DeWolfe. He was later president of Myspace and a strategic adviser ...
- whose offices had not been targeted by the August and September FBI raids — was arrested on allegations of
extortion Extortion is the practice of obtaining benefit (e.g., money or goods) through coercion. In most jurisdictions it is likely to constitute a criminal offence. Robbery is the simplest and most common form of extortion, although making unfounded ...
,
bribery Bribery is the corrupt solicitation, payment, or Offer and acceptance, acceptance of a private favor (a bribe) in exchange for official action. The purpose of a bribe is to influence the actions of the recipient, a person in charge of an official ...
,
conspiracy A conspiracy, also known as a plot, ploy, or scheme, is a secret plan or agreement between people (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder, treason, or corruption, especially with a political motivat ...
, and
money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...
involving his support of a private corrections company. Anderson was accused of accepting money from the company, CorPlan, through a shell corporation set up by a lobbyist, identified in Anderson's charging documents as "Lobbyist A," and later identified as prominent Anchorage lobbyist Bill Bobrick, to disguise the source of payments. Unbeknownst to Anderson or Bobrick, their contact with the private corrections company was a confidential source of the FBI working undercover. According to federal prosecutors, the private corrections company — unidentified in the court documents but widely believed to be Cornell Companies — was not implicated in the plot, and had been unaware of the FBI investigation until Anderson's indictment and arrest. The confidential informant in the case was Frank Prewitt, a former commissioner of the Alaska Department of Corrections. After leaving state employ, Prewitt took positions first with
halfway house A halfway house is a type of prison or institute intended to teach (or reteach) the necessary skills for people to re-integrate into society and better support and care for themselves. Halfway houses are typically either state sponsored for those ...
entrepreneur Bill Weimar, serving on his Allvest corporation board of directors, and subsequently with Cornell Companies, which bought out Weimar to establish its Alaska operations. Court documents filed on March 22, 2010, in a criminal appeal indicated that Prewitt had been paid $200,000 for his assistance in investigating and convicting his former Allvest associates.


Subpoenas of fisheries businesses

Additional subpoenas were served on fishery executives involved with federal funding and the United Fishermen of Alaska who have had business associations with
Ben Stevens Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State ...
.


Figures of note


Indictment, arrest of Kott, Kohring and Weyhrauch

On May 4, 2007, former Representatives
Pete Kott Peter Kott (born 1949) is a former Republican state representative for District 17 serving Eagle River, Alaska, in the Alaska Legislature for seven terms, from 1993 until 2007. He was Speaker of the House during his sixth term in 2003–2004. O ...
(R-Eagle River) and
Bruce Weyhrauch Bruce Weyhrauch is an attorney in Juneau, Alaska, United States. He is also a former representative in the Alaska State House representing Juneau's District 4. Weyhrauch has practiced at his own law office in Juneau for nearly three decades. H ...
(R-Juneau) were arrested and charged with bribery, extortion wire and mail fraud. Then-Representative
Vic Kohring Victor H. Kohring (August 2, 1958 – September 6, 2022) was an American politician who was a member of the Alaska House of Representatives. Elections Kohring was elected as a Republican to seven consecutive two-year terms beginning in 1994. K ...
(R-Wasilla) later turned himself in and was similarly charged. All three were arraigned in Juneau. Charges against the three involved allegations of soliciting and receiving money and favors from VECO chief executive officer Bill Allen and chief lobbyist and V.P. Richard L. "Rick" Smith in return for their votes on an oil tax law favored by the VECO that was the subject of vigorous debate during the 2006 legislative session and two special sessions in 2006. Kott and Kohring were both convicted, but their convictions were later vacated due to alleged misconduct by the prosecuting attorneys. In 2011 both agreed to plead guilty. Prosecutors agreed to recommend both men be sentenced to time served and subject to conditions upon release. Kohring lost his latest bid to appeal his conviction, turned down unanimously by an en banc hearing of the 9th Circuit Court of Appeals. After federal charges were dropped, Weyhrauch pleaded guilty to a misdemeanor lobbying violation, his sentence was suspended, and he was fined $1,000. It was estimated he had spent $300,000 on his defense. In 2016, the state senate's Select Committee on Legislative Ethics found that Weyhrauch had committed ethics violations a decade earlier and requested he pay a fine of $18,100 and write and publicize a letter of apology regarding the situation. Two years later, the requests for the apology and payment of the fine were waived. Of the original seven lawmakers who had their legislative offices searched, only Democratic State Senator Don Olson (D-Nome), who had refused a bribe, was not implicated in the scandal and helped the FBI to make their cases.


VECO executives indicted, plead guilty

On May 7, 2007, VECO CEO Bill Allen and Vice President for Community & Government Affairs Rick Smith pleaded guilty in U.S. District Court in Anchorage to charges of extortion, bribery, and conspiracy to impede the Internal Revenue Service. In addition to the three politicians arraigned on May 4, the new court filings mention illegal payments made to a former state senator, named as "Senator B" in court documents, who received over $240,000 from VECO Corp. over several years, income which Senator B reported as "consulting fees." In the May 7 guilty pleas by Allen and Smith, they admit that the only work done by Senator B in exchange for the funds was advancing VECO's agenda in the state legislature. The only former state senator who matches the information contained in court documents about Senator B is former Senator
Ben Stevens Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State ...
(R-Anchorage), son of U.S. Senator
Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
(R-Alaska). Ben Stevens was not indicted. Another state senator discussed in the court documents, identified as "Senator A" in court documents, was identified by sources as John Cowdery. On May 11, 2007, at a meeting of the VECO Corporation's board of directors and shareholders, Bill Allen resigned as the company's CEO and chairman of its board of directors, citing "the best interest of the corporation, all of our companies, and our many valued employees and customers." Allen's daughter Tammy Kerrigan replaced him as chairman of the board; a new CEO had not yet been chosen. At the same meeting, Rick Smith resigned from his position as vice president of community and government affairs. It was not clear from the VECO statement if Smith's position will be refilled.


Lobbyist Bill Bobrick charged, pleads guilty in Tom Anderson bribery probe

On May 14, 2007, William (Bill) Bobrick, a prominent municipal lobbyist in Anchorage, was charged with one count of conspiracy to commit extortion, bribery, and money laundering in the same scheme for which Rep.
Tom Anderson Thomas Anderson (born November 8, 1970) is an American technology entrepreneur and co-founder of the social networking website Myspace, which he founded in 2003 with Chris DeWolfe. He was later president of Myspace and a strategic adviser ...
was indicted the previous December. Bobrick was the creator of the shell corporation, Pacific Publishing, through which money was allegedly funneled to Anderson. Bobrick also received money through the scheme. Bobrick appeared in U.S. District Court in Anchorage on May 16, where he entered a guilty plea. Bobrick was sentenced after the trial of Tom Anderson, scheduled to begin June 25, where Bobrick testified for the prosecution. Under sentencing guidelines, Bobrick faced a possible 2 to 2½ years imprisonment, but his sentence was reduced to six months in return for his cooperation with prosecutors. In reaction to Bobrick's part in the corruption scandal, the Anchorage Assembly on May 22, 2007, unanimously approved a measure that prohibits individuals who have been convicted of a felony within the past 10 years of registering as a lobbyist with the Municipality of Anchorage.


US Senator Ted Stevens investigated, charged, convicted, and verdict vacated

Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
was also investigated by both the FBI and IRS. Authorities investigated an extensive remodeling project done at the Stevens "chalet" in the small town of Girdwood, Alaska. Unusual aspects of this remodeling project that were investigated were that the project was supervised by VECO, and invoices for the work on the residence were first sent to VECO before being sent to the senator. Some of the issues investigated were the extent of work done on the home, exactly who had paid the invoices from the construction contractors and their subcontractors, and the purpose and extent of VECO's involvement. On the morning of July 30, 2007, agents from the FBI and the IRS raided the residence in Girdwood. Photographs and video of the inside and outside of the residence were taken. Wine bottles in the home were photographed as objects of interest. The raid continued well into the evening. On July 29, 2008, just a day short of the anniversary of the Girdwood raids, Stevens was charged with seven counts of false statements on financial disclosures involving VECO, the oil services company in Alaska, and the renovations done on his home. On October 27, 2008, U.S. Senator
Ted Stevens Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a United States Senate, U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Party (United St ...
was successfully prosecuted in the District of Columbia. He was found guilty by a jury of all seven felonies against him. The case had been prosecuted by Principal Deputy Chief Brenda K. Morris, Trial Attorneys Nicholas A. Marsh and Edward P. Sullivan of the Criminal Division's Public Integrity Section, headed by Chief William M. Welch II, and Assistant U.S. Attorneys Joseph W. Bottini and James A. Goeke from the District of Alaska. Eight days after the verdict, Stevens narrowly lost re-election to Anchorage's Democratic then-Mayor
Mark Begich Mark Peter Begich ( ; born March 30, 1962) is an American politician and lobbyist who served as a United States Senate, United States senator from Alaska from 2009 to 2015. A member of the Democratic Party (United States), Democratic Party, he ...
. He had held his seat since December 24, 1968. On February 13, 2009, U.S. District Judge Emmet G. Sullivan cited William M. Welch II, Brenda K. Morris, Patty Merkamp Stemler (Chief of the Justice Department Criminal Appeals Section), and another Justice Department attorney for contempt of court. Judge Sullivan amended the contempt citation on February 14, 2009 to remove the fourth attorney. The contempt citation was for failing to turn over to defense counsel for former Senator Stevens documents relating to a complaint by Chad Joy, a Federal Bureau of Investigation agent, alleging misconduct by prosecutors in the Stevens case. Judge Sullivan had ordered, on February 3, 2009, that the documents in question be given to defense counsel. In the contempt citation, Judge Sullivan described the conduct of the Justice Department's lawyers as "outrageous." On February 16, 2009, the Justice Department stated in a court filing that it had removed six attorneys from "litigation relating to allegations of misconduct in (the case against former Senator Stevens)." The six attorneys were William M. Welch II, Brenda K. Morris, Nicholas A. Marsh, Edward P. Sullivan, Joseph W. Bottini, and James A. Goeke. On April 1, 2009, Attorney General Eric Holder decided to drop all charges against Stevens after a review of the case turned up alleged evidence of
prosecutorial misconduct In jurisprudence, prosecutorial misconduct or prosecutorial overreach is "an illegal act or failing to act, on the part of a prosecutor, especially an attempt to sway the jury to wrongly convict a defendant or to impose a harsher than appropria ...
, including failure to fully disclose potentially
exculpatory evidence Exculpatory evidence is evidence favorable to the defendant in a criminal trial that exonerates or tends to exonerate the defendant of guilt. It is the opposite of inculpatory evidence, which tends to present guilt. In many countries, includin ...
in response to a ''Brady'' motion by Stevens' attorneys. Since Stevens had not yet been sentenced, Holder's action effectively vacated Stevens' conviction. Prosecutor Marsh, although he had been removed as the team leader of the Alaska probe's prosecution, well prior to the Stevens debacle, had become episodically depressed as a result of the extreme length of the investigation into the conduct of the team involved in the Senator's case. This was exacerbated by his consequent reassignment to less favorable international duties, pending resolution of the inquiry, though he had anticipated complete exoneration. On September 26, 2010, not long after he returned from a trip to Europe, he hanged himself in the basement of his home in
Takoma Park, Maryland Takoma Park is a city in Montgomery County, Maryland, United States. It is a suburb of Washington, D.C., Washington, and part of the Washington metropolitan area. Founded in 1883 and incorporated in 1890, Takoma Park, informally called "Azalea ...
. Stevens meanwhile, 17 months after leaving office, died in a corporate executive airplane crash on August 9, 2010. He had been en route to a remote hunting lodge in western Alaska.


US drops Jim Clark corruption conviction

In 2008, Clark admitted that he was aware that Veco Corp had paid $10,000 for a political poll to gauge the popularity of then-incumbent Governor Murkowski, and was charged with "
honest services fraud Honest services fraud is a crime defined in (the federal mail and wire fraud statute), added by the United States Congress in 1988. The idea of this law was to criminalize not only schemes to defraud victims of money and property, but also sch ...
". Before he was sentenced, the US Supreme Court ruled that the statute was drafted with unconstitutional vagueness and henceforth will only cover "fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who ha not been deceived." Since Clark was guilty of neither bribes nor kickbacks, all charges were voided.


Bill Weimar pleads guilty to making illegal campaign contributions

On August 11, 2008, the ''Anchorage Daily News'' reported that Bill Weimar, a former operator of halfway houses for inmates in Alaska was indicted and charged with two felony counts alleging campaign finance violations. Weimar funneled money to an unnamed consultant for an unnamed state legislative candidate in 2004. Weimar agreed to plead guilty to the charges, and in exchange, prosecutors will ask for a reduced sentence, a nonbinding agreement that the judge is free to modify. Weimar subsequently pleaded guilty in federal court in Anchorage. His sentencing occurred on November 12, 2008. Weimar was sentenced to 6 months in federal prison and ordered to pay a US $75,000 fine. In 2010, Weimar who was on federal probation after serving six months in prison for illegal campaign contributions, allegedly forced sex on a six-year-old Sarasota girl. After being indicted on January 23, 2011, he fled to Havana, Cuba. From there he flew to Cancun, Mexico where he was arrested on his yacht and extradited back to Florida.


Jerry Ward implicated in probe

On December 15, 2008, the ''Anchorage Daily News'' reported that former Alaska state senator Jerry Ward had been implicated in the probe. Ward had been accused of a conspiracy involving Bill Weimar to accept an illegal $20,000 campaign contribution.Alaska's political corruption scandal reaped prison, vindication and uncertainty for the accused
''
Anchorage Daily News The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska. The newspaper is headquartered in Anchorage, ...
'', Jill Burke, February 11, 2011 (Updated June 30, 2016). Retrieved July 4, 2022.
Weimar had a $5.5 million interest, contingent only on the approval and construction of a
Cornell Companies Cornell Companies (NYSE:CRN) was an American corporation that operated correctional facilities, contracting them to state and local governments. The company's headquarters were located in Houston, Texas. On August 12, 2010, Cornell was acquired b ...
prison in Alaska. On August 23, 2004 he paid $3,000 by check toward settlement of a $20,000 invoice. Later that day he forwarded $8,500 in cash drawn from a
Polson, Montana Polson (Salish-Spokane-Kalispel language, Montana Salish: nčmqnétkʷ, Kutenai language, Kutenai: kwataqnuk) (, ) is a city in Lake County, Montana, United States, on the southern shore of Flathead Lake and within the Flathead Indian Reservatio ...
bank by express mail followed a day later by $8,500 more in cash drawn from the same bank, according to court documents. Cash transactions of more than $10,000 daily mandate federal reporting per the
Bank Secrecy Act The Bank Secrecy Act of 1970 (BSA), also known as the Currency and Foreign Transactions Reporting Act, is a U.S. law requiring financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laun ...
.Bank Secrecy Act
''
Investopedia Investopedia is a global financial media website headquartered in New York City. Founded in 1999, Investopedia provides investment dictionaries, advice, reviews, ratings, and comparisons of financial products, such as securities accounts. It ...
'', Will Kenton, April 06, 2022. Retrieved July 4, 2022.
Ward allegedly convinced a witness in the trial against Senator Ted Stevens to lie about an immunity deal in court to ensure that he was included in it and would therefore not be prosecuted. According to federal prosecutors, Ward had been under investigation for some time over his relationship with Weimar, who was convicted of two felony counts in the matter and sentenced to prison. While he was presumed to be under continued investigation, Ward was not charged.


Donny Olson refuses bribes, assists FBI

Democratic Senator Donny Olson was running for Lieutenant Governor in 2006. He was offered but refused a $25,000 campaign contribution, later cooperating with the FBI to bring cases against the conspirators.


John Cowdery pleads guilty

On December 18, 2008
KTUU KTUU-TV (channel 2) is a television station in Anchorage, Alaska, United States, affiliated with NBC and CBS. It is owned by Gray Media alongside MyNetworkTV affiliate KAUU (channel 5). The two stations share studios on East 40th Avenue in midt ...
Anchorage Channel 2, an affiliate of
NBC The National Broadcasting Company (NBC) is an American commercial broadcast television and radio network serving as the flagship property of the NBC Entertainment division of NBCUniversal, a subsidiary of Comcast. It is one of NBCUniversal's ...
, reported that
John Cowdery John Joe Cowdery (February 11, 1930 – July 13, 2013) was a Republican member of the Alaska Senate, representing the O District from 2001 through 2008. He was previously a member of the Alaska House of Representatives from 1982 through 1984, an ...
had agreed to change his plea from not guilty to guilty in exchange for some of the charges against him being dropped. As part of his plea agreement, Cowdery did not have to testify against other defendants in the case. No sentencing parameters were agreed upon as a result of this agreement. Cowdery subsequently pleaded guilty in federal court on December 19, 2008. Due in part to his age and alleged infirmity, he was only sentenced to 6 months of
house arrest House arrest (also called home confinement, or nowadays electronic monitoring) is a legal measure where a person is required to remain at their residence under supervision, typically as an alternative to imprisonment. The person is confined b ...
and fined US$25,000. Cowdery died on July 13, 2013.


Beverly Masek pleads guilty

On March 13, 2009, the ''Anchorage Daily News'' reported that former Alaska state representative Beverly Masek had pleaded guilty to soliciting and accepting at least $4,000 in bribes from VECO Corp. Masek, who originally rose to fame by competing in the
Iditarod Trail Sled Dog Race The Iditarod Trail Sled Dog Race, more commonly known as The Iditarod (), is an annual long-distance sled dog race held in Alaska in early March. It travels from Anchorage to Nome. Mushers and a team of between 12 and 16 dogs, of which at lea ...
while still known by her maiden name of Beverly Jerue, was first elected to the House in 1994. Masek represented a district consisting of the northern and western reaches of the
Matanuska-Susitna Borough Matanuska-Susitna Borough (often referred to as the Mat-Su Borough) is a borough located in the U.S. state of Alaska. Its borough seat is Palmer, and the largest community is the census-designated place of Knik-Fairview. As of the 2020 census ...
in the House from 1995 to 2005 before being defeated by Mark Neuman in the 2004 primary election. Masek was sentenced on September 23, 2009.


See also

*
Alaska Legislature The Alaska State Legislature is the state legislature of the U.S. state of Alaska. It is a bicameral institution consisting of the 40-member Alaska House of Representatives (lower house) and the 20-member Alaska Senate (upper house). There a ...
*
Public Integrity Section The Public Integrity Section (PIN) is a section of the Criminal Division of the U.S. Department of Justice charged with combating political corruption at all levels of government through the prosecution of corrupt federal, state, and local electe ...
*
OpenSecrets OpenSecrets is a nonprofit organization based in Washington, D.C., that tracks and publishes data on campaign finance and lobbying, including a revolving door database which documents the individuals who have worked in both the public sector an ...


Notes


External links


Alaska Public Offices Commission
Alaska Public Offices Commission home page.

Continuing coverage of Alaska's legislator scandal from '' AlaskaReport.com''.
"Alaska Political Corruption."
Continuing coverage on the corruption scandal from the ''
Anchorage Daily News The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska. The newspaper is headquartered in Anchorage, ...
''.
"FBI Probe on Capitol Hill."
Continuing coverage on the corruption scandal from the ''
Juneau Empire The ''Juneau Empire'' is a newspaper in Juneau, Alaska, United States. It publishes Wednesdays and Saturdays. History The newspaper was founded on November 2, 1912, as the ''Alaska Daily Empire''. It was founded by John Franklin Alexander ...
''.
"Veco."
Continuing coverage about
VECO Corporation VECO Corporation was an American oil pipeline service and construction company until its purchase in September 2007 by CH2M Hill. As of that date, the VECO Corporation ceased to exist. Founded in 1968 as Veltri Enterprises by Wayne Ray Veltri ...
from the ''
Anchorage Daily News The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska. The newspaper is headquartered in Anchorage, ...
'', with particular emphasis on VECO's connections to the corruption scandal.
Lisa's Deal
Sen. Murkowski's Kenai River land buy looks fishy ''
Anchorage Daily News The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska. The newspaper is headquartered in Anchorage, ...
''.
Lisa Murkowski
Alaska has a new top political funder: Bob Penney. He is quite close to Senators Stevens and Murkowski.
Entire Alaska Delegation Contributed Earmarks To 3 Mile Road
To cover matching costs required by some of the federal money, Murkowski's father, then-Gov. Frank Murkowski ponied up another $325,000 in state fund
TPM Muckraker


''Anchorage Daily News'' story, published August 17, 2008, on the VECO sale.

''ADN'' story, published September 24, 2009, on the sentencing of Masek. {{DEFAULTSORT:Alaska Political Corruption Probe 2006 in Alaska 2007 in Alaska 2008 in Alaska Federal Bureau of Investigation operations Political corruption investigations in the United States Crimes in Alaska Political scandals in Alaska Ted Stevens Don Young