Tom Anderson was deep in debt and living beyond his means during the time that prosecutors say he took bribes to do the bidding of a private prison company, according to assertions in a new court filing.

Federal prosecutors want to show jurors the former state legislator's financial records, including tax returns, bank records and credit reports. Anderson is fighting to keep the material out of the trial, arguing that it is irrelevant.

As jury selection for the trial extends to a third day, the battle over financial records is one of several issues yet to be decided. Anderson, who served two terms in the state House but didn't run last year, is being tried on seven felony charges, including bribery, extortion and money laundering.

Prosecutors say that Bill Bobrick, then a top lobbyist in Anchorage, set up a phony business and used it to funnel payments from Cornell Cos. to Anderson.

Among the issues before U.S. District Judge John Sedwick:

• Anderson's work for Veco Corp. Anderson was a paid Veco consultant during the time he was in the Legislature, but he is not charged with any crime related to the Anchorage-based oil field services contractor. His defense lawyer, Paul Stockler, wants to prevent jurors from hearing a recording of a conversation in which Bobrick says Veco was paying Anderson $2,500 a month "to do nothing."

• Other recordings. Stockler says in court filings that he believes the government's case is based largely on secretly recorded conversations involving Anderson, Bobrick and Frank Prewitt, a former state corrections commissioner who went to work as a consultant for Cornell.

Stockler is asking for longer sections to be played during the prosecution case than what the government intends.

"Otherwise, the government portions are misleading and unfairly prejudicial because conversations are being taken out of context," Stockler's motion said. By the time the defense gets its chance to play recordings, maybe a week later, the significance will be lost, he argues.

• Financial records. Prosecutors Nick Marsh and Joe Bottini say in court papers that they couldn't use the fact that someone was poor to establish a financial motive for a crime, but they say this is different.

The records will be used "with Anderson's own statements to demonstrate Anderson's motive for using his public legislative office for personal gain," they say. The government likely will show jurors evidence that "Mr. Anderson was living beyond his means."

Anderson, 39, had "a significant debt load" and the $12,828 that Anderson is accused of receiving from Cornell amounted to more than a quarter of his income in 2004, the prosecutors say.

"Anderson's financial difficulties led to his eagerness to do what he could in his position as a state legislator to help Cornell," they say in the filing.

But Stockler says the records don't speak to whether Anderson did what he is accused of doing and shouldn't be shown to jurors.

As to Veco, Stockler argues that Anderson wasn't even part of the conversation between Bobrick and Prewitt, who worked as an FBI "confidential source" in the investigation. Since the charges against Anderson don't involve Veco, there's no reason to tell jurors about the relationship other than to show "other bad acts or character evidence," Stockler argued.

The July 21, 2004, conversation took place at the Southside Bistro, according to a partial transcript that Stockler filed in court. Prewitt had just been wired up by the FBI. Here's part of the conversation:

Bobrick: Tom knows how to run campaigns.

Prewitt: Mm hmm.

Bobrick: And he's also a lawyer and does (unintelligible). It's actually far more real work than what Veco does. Veco ...

Prewitt: Yeah, I've never figured out what Veco does.

Bobrick: ... Well yeah, they just pay him to do nothing.

Prewitt: Who? Tom?

Bobrick: Yeah.

Prewitt: Does he still have his consulting firm? See, I thought maybe he lost his contract with Veco.

Bobrick: No, he's rather independent -- well, in my opinion. I mean, if you really put him on the spot and said, "What do you do?" I think he'd say, "Well, I review documents for them." Well, they have their own lawyers to do that (laughing) ...

Prewitt: So Veco, Veco just pays him. How much are they paying him?

Bobrick: Oh, about twenty-five hundred bucks a month.

Prewitt: Geez. So.

According to Anderson's reports to the Alaska Public Offices Commission, Veco paid him $10,000 in 2003 for "consulting on community council and local government affairs," $17,500 in 2004 for "consultation on Russian business endeavors" and $2,500 in 2005 "election/proposition research."

Jury selection resumes today.

Find Lisa Demer online at adn.com/contact/ldemer or call 257-4390.