Bill Weimar, who made his fortune off private halfway houses in Alaska, pleaded guilty Monday to two federal felonies in U.S. District Court in Anchorage.
He admitted his role in a conspiracy to secretly funnel money to a political consultant for an unnamed state Senate candidate, knowing the candidate would back a private prison if he won.
Weimar had a long-standing relationship with the candidate running in the 2004 primary, a charging document filed Monday said. Weimar held a "contingent interest" in a private prison project worth $5.5 million, but only if the project was completed, the charges say.
He faces prison time in the plea deal and may have to forfeit "certain property." Prosecutors estimate a sentence of 10 to 16 months. U.S. District Judge John Sedwick isn't bound to that. He set sentencing for Oct. 29.
Weimar, who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing investigation by the FBI and U.S. Department of Justice into political corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont.
At the brief hearing on Monday, Weimar answered the judge's routine questions. Assistant U.S. Attorney Joe Bottini outlined the two charges: conspiracy to commit honest services mail and wire fraud, and illegally manipulating currency transactions to avoid reporting them to the Treasury Department.
Weimar has admitted paying the consultant a total of $20,000 during the primary in August 2004 to cover expenses for the candidate, without reporting the payments and without routing them through the campaign.
How do you plead? Sedwick asked.
"Guilty," Weimar answered, to each charge.
LAWMAKER NOT NAMED
For years, Weimar pushed plans for a private prison in Alaska, but the project was always controversial and no prison was ever built.
A Democratic activist in the 1970s, Weimar later became close to the Republicans who controlled the Alaska Legislature.
Neither the Senate candidate nor the consultant -- both accused of conspiring with Weimar -- is named in the charging document. Prosecutors declined to expand on it Monday.
But the candidate described in the documents, and in court Monday, appears to be former state Sen. Jerry Ward. He didn't return phone calls or e-mail messages on Monday.
Ward, a Republican elected from Anchorage in 1996 and the Kenai Peninsula in 2000, fervently pushed private prison projects as a legislator.
The charging document says the candidate running in 2004 had a long relationship with Weimar, and held elected office part of that time.
Ward and Weimar were "buddies," according to a statement that former lobbyist Bill Bobrick, who worked for Weimar, gave to the FBI in September 2006. Bobrick also has pleaded guilty in the corruption investigation. He declined to comment on Monday.
In 1997, a plan for a private prison in South Anchorage with Allvest and Veco Corp. as partners crumbled under strong public opposition. As that project evaporated, Ward emerged as the lead architect of a new plan to build private prisons in the Mat-Su and Seward.
"By God, this really solves the problem," Weimar was quoted as saying at the time.
In 2001, Ward signed on as the only Senate sponsor of a House bill pushing a private prison on the Kenai.
The charging document against Weimar doesn't say whether the candidate won in 2004 and does not call the person a legislator.
Ward lost his seat in 2002 to Tom Wagoner. He was trying to regain it in 2004, but lost in the Republican primary to Wagoner.
In court Monday, Bottini told the judge the consultant was from Seattle. Some of Ward's biggest campaign expenses in 2004 were more than $43,000 in fees charged by Madison Communications, an advertising and public relations firm based in suburban Kirkland, Wash.
Numerous calls left for Madison principal Brett Bader on Monday were not returned.
The charges against Weimar and other court documents quote details of a number of telephone conversations he had with the consultant and the candidate from Aug. 17 to Aug. 23, 2004.
In a telephone conversation on Aug. 17, 2004, the consultant told Weimar that the campaign was having money trouble, court documents say.
"I'm worried we're reaching the limit now. I don't know where we find 10 grand unless (Candidate A) can get more in," the consultant said
"There's no legal way to do that. At least not on that scale," Weimar responded.
Later that day, Weimar arranged to cover the next advertising mailer for the candidate, and told the candidate so, the document says.
On Aug. 20, 2004, Weimar told the candidate of an unpaid invoice of $20,000 with the consultant.
The candidate's campaign funds were depleted, the charges say. The candidate said he had only $300 to $400 left in his account.
On Aug. 23, 2004, Weimar made arrangements with the consultant to pay off the debt, the charges say. He then called the candidate and told him "he would not be receiving any further bills from Consultant A," the charging document says.
Weimar sent the consulting company a $3,000 check on Aug. 23, 2004, then sent $8,500 in cash that same day by express mail, and another $8,500 cash the day after, the charges say.
"WE'VE MOVED ON"
The charges also do not name the private prison company, but Cornell Corrections Inc. tried to build a prison in various Alaska communities, including Delta Junction, Kenai and Whittier. The charging document describes the unnamed company's Alaska interests as halfway houses, a planned juvenile treatment center, and a private prison project, and that matches Cornell's interests.
In 1998, in the midst of planning for a private prison in Delta Junction, Weimar sold five Alaska halfway houses to Cornell for $21 million. He also formed a partnership with Cornell to pursue the Delta prison and subsequent deals for a private facility.
One goal of the conspiracy was to get the private prison company to give campaign contributions to the candidate to help win election, according to the charges.
A spokesman for Cornell said the company was unaware of the charges but supports the prosecution. The executives now in charge of Cornell weren't there at the time of the events that involved Weimar, spokesman Charles Seigel said Monday. Company records don't show any evidence of wrongdoing, he added.
"We've moved on and we are very different and have it behind us," Seigel said.
Cornell also has not pursued a private prison in Alaska for years and is no longer interested in that, he said.
"We're glad this investigation is going on but whatever was going on or may have been going on in the past, that is not the Cornell that exists now, both in the policy on the private prison as we've talked about and in general about the way we do business."
By 2004, Veco was no longer involved in the prison project, Frank Prewitt, a former state corrections commissioner, Cornell consultant and FBI informant, has said.
The failed private prison effort was also central in the government's case against former state Rep. Tom Anderson, R-Anchorage, now in prison.
At Anderson's corruption trial last summer, Prewitt was a key witness who testified at length about his undercover work to collect evidence against Anderson, and also about questionable acts in his own past.
From the witness stand, Prewitt said that in 1994 -- when he was corrections commissioner and Weimar owned Allvest -- he accepted $30,000 from Weimar. Prewitt testified that he considered the money a loan, which he repaid the next year, after he left his state post, by working four months for Allvest for free.
Weimar helped start Allvest in 1985, then bought out his partners and turned it into a multimillion dollar corporation with operations in Alaska and Washington state. Its government contracts were worth an estimated $10 million a year.
Allvest also operated a lab that did contract urinalysis work, and used to run the city's Animal Control Center and the Community Service Patrol.
In 2002, Allvest was forced into bankruptcy because of unpaid judgments in civil suits against the company. The bankruptcy case eventually was settled.