Three more state legislators were arrested on federal corruption charges Friday, accused of selling their votes and influence to the oil field services company Veco Corp. and its chief executive, Bill Allen, during last years debate on oil taxes.
Acting on felony indictments brought by the Justice Department's Public Integrity Section, federal agents arrested the three Republicans in Juneau one a sitting legislator, Rep. Vic Kohring of Wasilla, and two others who left office in January, Reps. Pete Kott of Eagle River and Bruce Weyhrauch of Juneau.
Each was brought in handcuffs before a federal magistrate judge, and each pleaded not guilty to bribery, extortion and conspiracy and was released on $20,000 bond. The charges carry penalties of between five and 20 years in prison and $250,000 in fines.
The indictments, unsealed with the arrests, describe a conspiracy among the legislators, Veco, Allen and Veco's vice president for government affairs, Rick Smith, to steer an oil-production tax bill favored by the industry through the Legislature last year.
The bill was seen as a prerequisite for the North Slope oil producers to agree to build a natural gas pipeline. Ultimately, Veco, Allen and Smith wanted to see a gas line built that would help the company through contracts with the oil companies, the indictments charged.
Veco, Allen and Smith were neither charged nor directly named in the indictments. But Company A, Company CEO and Company VP are described in long passages in the indictments, and those descriptions point unmistakably to them. Vecos attorney, Amy Menard, confirmed the identifications.
Allens lawyer, Bob Bundy of Anchorage, wouldnt comment on what might be in store for his client.
Veco and Bill have cooperated completely with the governments investigation, Bundy said.
WADS OF CASH
The charges describe the three lawmakers seeking money, jobs or both for themselves or family members, and Veco willing to oblige. Much of the activity described in the charges took place in Vecos suite in Juneaus Baranof Hotel, Room 604, during the 2006 legislative session.
Direct quotes attributed in the indictments to the three legislators and to Allen and Smith suggest the FBI conducted some form of electronic surveillance in the room and perhaps on telephones as well. Kotts lawyer, Jim Wendt, said the room contained a hidden camera. He learned about the surveillance when the prosecutors offered to make a deal with him. They revealed snippets of their evidence, including video from inside a Baranof room, Wendt said.
FBI spokesman Eric Gonzalez wouldnt confirm whether agents used wiretaps or hidden cameras. A Baranof employee on Friday said the hotel would not discuss the use of the suite.
The charges portray Kohring, 48, elected seven times by Mat-Su voters, as an eager-to-please loyalist pleading for opportunities to do Vecos bidding.
In a phone call Feb. 21, 2006, for instance, Kohring told Smith he was willing to help Veco "in terms of any questions that need to be asked, any information that needs to be sought out, any points to make in caucus, or in committee meeting, on radio columns "
On March 22, Kohring offered to be Smith's "information source," that he would "lobby on (Vecos) behalf," and that he would "consider modifications to legislation or whatever" if they asked. Two days later, he told Smith over the phone that he was standing by to "do anything to help," that he would continue to advocate good things for you guys and that he wanted Smith to tell Allen that he was doing whatever he could "to help out."
By March 30, Kohring appeared to be looking for payback. Meeting with Allen and Smith in Suite 604, he asked for work or for a $17,000 loan to pay off past-due credit card debt. The three discussed how to structure the transaction so it could avoid detection and reporting to the Alaska Public Offices Commission.
Allen then asked Smith if he had any hundreds. Smith reached for his wallet and handed Allen a bunch of small bills perhaps $100, according to the indictment. Allen passed the money to Kohring. Thanking them for the money, Kohring repeated that he was broke. Allen gave him another wad of cash, between $500 and $1,000, the indictment said.
What can I do at this point to help you guys, anything? Kohring said.
Whatever you, you know, Allen said.
But between themselves, Smith and Allen seemed to have little respect for Kohring. On March 4, Allen told Smith of another $1,000 he gave to Kohring. One result of that payment: Kohring would kiss our ass, Allen said.
Kohrings attorney, John Henry Browne of Seattle, said Kohring will fight the charges. He said Kohring is an uncomplicated man who sleeps on his office couch and doesnt own a cell phone or even a car. Kohrings constituents knew he was under investigation last fall and re-elected him anyway, Browne said.
LAWMAKERS WANTED JOBS
Kott, 57, the House speaker in 2003 and 2004, represented Eagle River from 1992 until his defeat in the Republican primary last year. Weyhrauch, 54, a private-practice attorney married to an assistant state attorney general, represented Juneau for two terms, choosing not to run last year. Just last week, his boat was found adrift in Auke Bay. Weyhrauch was missing overnight. When he was rescued on an island the next day, he said he had accidentally fallen overboard and swam to safety.
Kotts role in the alleged conspiracy began earlier than Kohrings, according to his indictment. On Sept. 26, 2005, Kott called Smith and said, I need a job.
Smiths reply: Youve got a job; get us a pipeline.
A few minutes later, Kott, apparently aware that a Veco subsidiary was building a prison in Barbados, told Smith, I just want to be the warden in Barbados.
In February, Allen and Smith discussed their influence over Kott in what they apparently believed was a private conversation. We got more money in Pete Kott than he can even think about it, Allen said.
In March, Kott reported to Allen and Smith in the Baranof that he was putting the squeeze on another legislator by blocking that legislators bill until he supported Vecos version of the oil tax measure. Kott said he wouldnt release the hold until Allen said it was OK.
In May, Kott told Allen in Suite 604 that he succeeded in defeating a tax amendment Allen opposed. I had to get er done, Kott was quoted as saying. I had to cheat, steal, beg, borrow and lie. Allens response to Kott: I own your ass.
On June 1, Allen handed Kott $1,000 in cash. Kott said he wanted to become a lobbyist after leaving the Legislature. Well, you will be, Allen said.
The indictment also said that Veco paid a fraudulently inflated invoice of $7,993 to Kotts flooring company in August. Kotts attorney, Jim Wendt of Anchorage, said Kott didnt really break any law and would fight the charges.
Weyhrauch also professed to be having financial difficulties, according to the charges. On May 4, he mailed a solicitation to Allen, offering to do legal work for Veco.
Allen and Smith talked about the bid, and decided that Weyhrauch was connecting it to his support for the tax measure. Three days later, Weyhrauch voted the wrong way on a tax amendment, then changed his vote after instructions from Kott and Allen, the indictment charges.
Weyhrauch flew to Anchorage after the regular session ended in May for a meeting with Allen. Just before the meeting Allen and Smith decided they needed Weyhrauchs vote, but would string him along before giving him legal work.
Then, on June 5, another legislator is introduced in the indictment, Senator A. The indictment said Allen told Senator A that Weyhrauch would support the favored tax bill because of the promised legal work. Senator A was identified in the indictment only as a legislator whose term ended in January.
Three former senators match that description: Ben Stevens, R-Anchorage; Ralph Seekins, R-Fairbanks; and Gretchen Guess, D-Anchorage.
Guess said its not her. She said she didnt have any of the conversations described in the document, and had an alibi as well she had just given birth around the time of some of those conversations.
Seekins said its not him. I dont recall ever even having a phone conversation with Bill Allen when I was in the Legislature, he said. Stevens didnt return a telephone message and his wife, Elizabeth, said he wasnt home. His lawyer, John Wolfe of Seattle, said Stevens doesnt know who Senator A is.
Of the three, only Stevens had his offices searched by FBI agents last year, and only Stevens was on the Veco payroll as a consultant. Ben Stevens maintains he is innocent of any and all criminal activity, Wolfe said. Questions about Senator A should be directed to the U.S. Attorneys office.
Weyhrauchs lawyer couldnt be reached for comment. Stevens has not been charged, nor have two other legislators whose offices were searched, Sen. John Cowdery, R-Anchorage, and Sen. Donald Olson, D-Nome.
The FBI investigation of Alaskas Legislature and its relationship with Veco and other companies became public in August, when agents raided the offices of six sitting legislators.
Since then, one other former House member, Republican Tom Anderson of Anchorage, was charged in December with taking $12,828 in bribes from a lobbyist representing private prison interests.
In a prepared statement Friday, Veco said it was fully cooperating with the federal investigation and has retained experts to review and assess its corporate operations and practices and to implement a corporate compliance plan.
The company said the allegations about its top officials are not representative of the kinds of work its 4,000 employees perform in Alaska and around the world.
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