A federal grand jury in Washington, D.C., indicted long-term U.S. Sen. Ted Stevens Tuesday on seven counts of filing false financial disclosures, each a felony charge that carries a penalty of five years in prison and an unspecified fine.
With the indictment, Stevens, an icon in Alaska politics, becomes by far the most powerful politician charged in the broad, four-year federal investigation into public corruption in the state. To date, three state legislators, a high-level official in Gov. Frank Murkowski's administration, two businessmen and a lobbyist have been convicted, while two legislators are awaiting trial.
Stevens said he will fight to save himself and his long career.
"I am innocent of these charges and intend to prove that," he said in a prepared statement. "I have proudly served this nation and Alaska for over 50 years."
At a news conference in Washington to announce the indictment, Matthew Friedrich, acting assistant attorney general for the Justice Department's criminal division, said Stevens would be allowed to turn himself in. Stevens' attorney, Brendan Sullivan of Washington, was notified of the indictment Tuesday morning shortly before it became public, Friedrich said.
'THINGS OF VALUE'
The seven-count indictment charges Stevens with making false statements by failing to disclose "things of value" he received from Veco Corp., the now-defunct Alaska-based oil services and construction company, and from its chairman, Bill Allen, in a scheme that stretched over eight years.
At the same time, according to the indictment, Allen and other Veco employees asked Stevens to intervene on their behalf with the government, and Stevens sometimes obliged.
Stevens received substantial benefits from his relationship with Veco that he never disclosed, the indictment charged: improvements to his home in Girdwood; an automobile exchange in which he received a new Land Rover worth far more than his 35-year-old Mustang; and household appliances.
The federal Ethics in Government Act requires all senators to file financial disclosure statements detailing their transactions during the previous calendar year, including the disclosure of gifts above a specified value and all liabilities greater than $10,000.
At the news conference, Friedrich said the case involved false disclosures, not bribery, and no specific actions by Stevens in return for gifts were charged, even though the indictment mentioned some Veco requests and the favorable responses by Stevens and his staff.
Some of the solicitations were made directly to Stevens and included requests for help by Veco on its international projects in Pakistan and Russia; requests for federal grants and contracts, including National Science Foundation contracts worth nearly $200 million; and assistance with efforts to construct a natural gas pipeline from Alaska's North Slope.
The indictment comes just as Stevens is in the political fight of his life to win a seventh term. The fallout was immediate: Under Republican rules governing indicted senators, he had to step aside from two key committee positions he earned through longevity -- his co-chairmanship of the Commerce Committee, which oversees fishing and telecommunications, and his ranking position on the defense appropriations subcommittee, from which he has sent millions in earmarks to Alaska.
Even with his famed clout in Washington at least temporarily diminished, Stevens vowed to continue his campaign. His presumptive Democratic opponent, Anchorage Mayor Mark Begich, wouldn't answer questions about Stevens' indictment.
YEAR AFTER GIRDWOOD RAID
Friedrich said the Justice Department followed its own rules in seeking an indictment when the evidence was complete and sufficient to bring charges. The political calendar wasn't considered, he said.
Allen, Veco's former chief executive, and Rick Smith, the company's former vice president of community affairs and government relations, pleaded guilty May 7, 2007, to providing more than $400,000 in corrupt payments to public officials from Alaska. Allen and Smith are cooperating and have been key witnesses in two trials so far.
Back then, there were no direct references in the Allen and Smith charges to gifts they provided to Stevens, though they admitted making corrupt payments of $243,250 over five years to Stevens' son Ben, once president of the Alaska Senate. Ben Stevens has not been charged and has denied wrongdoing.
The charges against Ted Stevens come almost exactly a year after an FBI and IRS raid on Stevens' home in Girdwood, the first time those agencies had ever raided the home of a sitting U.S. senator. At the time the agents documented the renovations made in 2000 that were overseen by Allen and managed by his employees and contractors. The renovations doubled the size of the home.
Stevens has refused to discuss the investigation, except to say he paid every bill he received connected to the renovation. He has refused to elaborate about whether that answer implied he knew of work on the house for which he wasn't billed.
The indictment said Stevens made "multiple false representations" to reporters, his friends and his staff about what he received from Veco and Allen. While it's no crime for an official to lie to the media, prosecutors charged that those statements were part of his long-term effort to conceal Veco's gifts and benefits.
MORE THAN $200,000 ON RENOVATIONS
From the summer of 2000 to about December 2001, Veco spent more than $200,000 on the Girdwood renovations, including materials, labor and architectural design, the indictment says. Much of that effort has already been the subject of extensive media coverage based on interviews with contractors, ex-Veco employees and Girdwood residents who witnessed the work.
For instance, Veco and Stevens hired a construction firm, identified only as "Construction Firm A" in the indictment, for the renovation project. The company matches the description of Christensen Builders of Anchorage, whose president, Augie Paone, told the Daily News in May 2007 that he was hired by Veco but sent invoices to Stevens and that Stevens paid by personal check from a new account.
The charges say Stevens never paid Veco anything for the materials or labor provided by Veco, its employees and contractors but clearly knew that Veco did a lot of the work.
Paone said he fully cooperated with the government. The indictment echoes his assertions in the interview, adding that Construction Firm A focused on carpentry and finish work, and Veco employees did much more.
PRAISE FOR VECO WORKERS
In an e-mail to Allen Sept. 24, 2000, Stevens was full of praise for Veco and its employees, according to the indictment. "We've never worked with a man so easy to get along with as (unnamed Veco employee). Plus, everyone who's seen the place wants to know who has done the things he's done. ... You and (Person A) have been the spark plugs, and we are really pleased with all you have done. hope to see you and the chalet soon. best teds." The indictment goes much further than what was previously known and reveals that maintenance on the house extended into 2006. When something went awry, the charges say, Stevens asked Veco for help much as someone else might call a plumber.
By 2006, the concealed "things of value" topped $250,000.
The indictment has no reference to whether the government intercepted calls made to Stevens from any of Allen's or Smith's phones that were wiretapped under court order starting in 2005. Once Allen agreed to plead guilty, on Aug. 30, 2006, he placed several calls to public officials, including Stevens, in a sting effort. The content of those calls has not been disclosed.
The 1999 vehicle exchange cited in the indictment concerned a new car for Stevens' "dependent child," not naming the person. At the time, his only dependent child was daughter Lily.
Allen transferred a new 1999 Land Rover Discovery, which he had bought for $44,000, to Stevens. In exchange, Stevens gave Allen, a car collector with a love of Fords, a 1964 Mustang and $5,000. But the Mustang was worth less than $20,000, according to the indictment.
Lily Stevens, now 27, is the sole child of Stevens' marriage to his second wife, Catherine. Lily, a law clerk in Washington, is engaged to be married in late August. A call to her Washington office was not returned.
Stevens' first wife, Ann, was killed in the crash of a private jet in Anchorage in 1978 that injured Stevens. Ted and Ann Stevens had five children together, including Ben.
ALASKAN OF THE CENTURY
Stevens, 84, is the longest-serving Republican in the U.S. Senate. From 2003 to 2007, he was Senate president pro tem and third in line to the presidency. With political power that increased with his longevity, Stevens came to represent Alaska's clout in Congress. In January 2000, Stevens was named "Alaskan of the Century," and the Anchorage airport was renamed in his honor that July.
That was also the year of the bulk of the Girdwood home renovations.
Alaska's other senator, Lisa Murkowski, expressed shock at the indictment in a prepared statement today.
"I know Ted Stevens to be an honorable, hard-working Alaskan who has served our state well for as long as we have been a state," she said. "As to the charges, we are at the beginning of the criminal process and there is a judicial procedure in place that will be followed."
Murkowski, a Republican, probably owes her election in 2004 to Stevens. She was trailing former Gov. Tony Knowles in the polls until the final weeks, when Stevens began blitzing the state with commercials saying he needed her beside him in Washington.
Sen. Daniel Inouye, D-Hawaii, Stevens' best friend in the Senate, said in a brief statement: "In our legal system, a man is presumed innocent until proven guilty in a court of law. ... As far as I am concerned, Ted Stevens remains my friend. I believe in him."
Stevens and Inouye are both World War II veterans and call each other "brother." When Stevens became chairman of the Senate Commerce Committee in 2005, he named Inouye vice chairman rather than the usual term "ranking member" afforded the senior member of the opposite party.
Inouye returned the favor last year when Democrats took over the Senate and he became chairman.
Richard Mauer and Lisa Demer reported from Anchorage and Erika Bolstad reported from Washington, D.C.
JULY 29, 2008 - 12:40 PM
I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. Senator.
In accordance with Senate Republican Conference rules, I have temporarily relinquished my vice-chairmanship and ranking positions until I am absolved of these charges.
The impact of these charges on my family disturbs me greatly.
I am innocent of these charges and intend to prove that.