The Corrupt Bastards Club started as a barroom joke last spring among Alaska legislators whose names were linked to large campaign contributions from oil field services company VECO Corp.
Somebody walked up and said, You corrupt bastards, and that name stuck, said House Finance Co-Chairman Mike Chenault, R-Nikiski.
Campaign contributions from VECO executives to 11 lawmakers, including Chenault, were detailed in a guest opinion article that ran in the states three largest newspapers in March. A 12th lawmaker, Senate President Ben Stevens, the son of U.S. Sen Ted Stevens, was also noted in the article as receiving generous consulting fees from VECO. Stevens has collected more than $240,000 from VECO since 2000.
All Alaska Alliance Executive Director Lori Backes wrote the column, questioning whether the financial linkages between VECO and lawmakers created undue influence over the states political process. Backes group supports a North Slope natural gas pipeline proposal different from the project favored by Gov. Frank Murkowski and supported by VECO, a heavy hitter in Alaska politics.
It was a barroom joke that (was made) after Ms. Backes wrote her article about legislators that had received money from VECO, Chenault said.
Hats were even made with the initials CBC on them, but that was the extent of the CBC deal, Chenault said.
Im glad that they can make fun of themselves, Backes said Friday when contacted at the offices of the Alaska Gasline Port Authority.
The FBI wasnt laughing when agents served a warrant at VECOs headquaters and raided the offices of six legislators this week, looking for financial ties between the company and lawmakers, and documents having to do with Murkowskis proposed gas pipeline contract and a related rewrite of Alaskas production tax laws.
Included in the search were the offices of four legislators associated with the Corrupt Bastards Club: Stevens, Rep. Pete Kott, R-Eagle River; Sen. John Cowdery, R-Anchorage; and Rep. Vic Kohring, R-Wasilla.
Also searched were the offices of Sen. Donald Olson, D-Nome, and Rep. Bruce Weyhrauch, R-Juneau.
A copy of one of the search warrants, obtained by The Associated Press, links the investigation to the new production tax law signed last month by Murkowski and the natural gas pipeline draft contract Murkowski and the states three largest oil companies negotiated.
Among the items to be seized, according to the warrant, from the period of October 2005 to the present, any and all documents concerning, reflecting or relating to proposed legislation in the state of Alaska involving either the creation of a natural gas pipeline or the petroleum production tax.
VECO and its chairman, Bill Allen, were staunch supporters of the governors production tax plan, a version of which the Legislature passed in August after twice rejecting it earlier this year. Lawmakers have also twice failed to pass legislation related to the governors pipeline fiscal contract with BP PLC, ConocoPhillips and Exxon Mobil Corp.
VECOs executives are top contributors to Alaska politicians, mostly Republican. Allen flew to Juneau at the end of the regular session to lobby lawmakers and watch the vote on the new production tax.
The warrant calls for seizure of documents concerning, reflecting or relating to any payment to lawmakers by VECO executives Allen and Richard Smith. Agents also looked for documents about contracts, agreements or employment of legislators provided by VECO, Allen, Smith and company president Peter Leathard.
In the warrant served on state Sen. Donald Olson, D-Nome, agents were also authorized to seize any documents related to fuel payments, landing strip fees, storage fees and similar aircraft costs. Olson owns a flying service.
A specific item named in the search for seizure: Any physical garments (including hats) bearing any of the following logos or phrases: CBC, Corrupt Bastards Club, Corrupt Bastards Caucus, VECO.
House Speaker John Harris, R-Valdez, said he saw Smith and Kott handing out hats in June during the first special session when lawmakers voted down the petroleum tax bill. But he did not see anything with the Corrupt Bastards Club on it.
They were handing out hats down at the Baranoff (Hotel) at the bar down there. All they had was VECO on them, Harris said.
Chenault said he may still have a CBC hat, but he cant recall.
Besides VECO and its executives, agents were authorized to seize any documents related to The Petroleum Club, Republican pollster David Dittman or his company, Dittman Research and Communication Corp., pollster Marc Hellenthal or his company, Hellenthal and Associates, Roger Chan, VECOs chief financial officer, and Olson Air Service, according to the warrant.
Amy Menard, an Anchorage-based attorney for VECO, said the company received a warrant on Thursday. She said the company will cooperate with agents in providing the broad range of information they want.
We have no information that would suggest that there have been any improper activities either by VECO Corp., VECO Alaska, or any of the principals involved in those companies, Menard said.
A receipt of items seized from Olsons office by the FBI and obtained by The Associated Press lists five things: Olsons 2006 year planner, Murkowskis gas pipeline proposal released in May, a manila folder labeled APOC, the Alaska Public Offices Commission, Olsons interim travel file and a binder related to the Alaska Stranded Gas Fiscal contract.
Department of Justice spokeswoman Jaclyn Lesch said Friday the searches began Thursday and continued Friday. FBI spokesman Eric Gonzalez said a total of 20 search warrants were being executed across Alaska, but would not say where.
No further comment is likely to come from the Justice Department unless charges are filed, Lesch said.
Ben Stevens, Weyhrauch and Kott did no return calls on Friday.
Kohring and Olson said they cooperated and was told he was not a target of the investigation.
Cowdery, a Republican from Anchorage, said Friday he didnt know why he was included in the raid or why agents seized items unrelated to anything, including the stubs of his legislative salary checks. Cowdery said he has not retained an attorney to deal with the matter, but probably will.
Its pretty bizarre, he said. Thats all I know, its pretty bizarre. I certainly havent done anything wrong.