Federal prosecutors offered a glimpse of previously unseen evidence against U.S. Sen. Ted Stevens in new court filings Thursday, including allegations that Stevens used insider help to turn a secret $5,000 investment in a Florida condo development into more than $100,000 in quick profits.
The government also dismissed assertions by Stevens that his conduct was shielded by the constitution as a member of Congress, citing nine examples of Stevens' "errands" and requests involving Veco that had nothing to do with protected lawmaking.
Among them: an intercepted telephone call in which Stevens discusses how his son Ben, then the state Senate President, planned to push a bill favored by the oil industry as a prelude to gas development.
The new filings go substantially further than the indictment handed up against Stevens last month charging him with seven counts of failing to disclose gifts from 1999 through 2006. Most of the alleged gifts were from the former Alaska-based oil field service company Veco and its politically active chairman, Bill Allen. Allen and Veco vice president Rick Smith have pleaded guilty to bribing elected officials and are working with government prosecutors and are expected to testify at Stevens' trial, tentatively scheduled to start with jury selection Sept. 22.
Stevens demanded a speedy trial in hopes of a positive outcome before the November election, in which he is seeking a seventh full term. So far, the case is set for district court in Washington, though Stevens is asking for a change of venue to Alaska, where a more friendly jury might await him.
One of the government documents is a response to an earlier motion filed by Stevens seeking dismissal of the charges on the basis of the Constitution's Speech or Debate clause. That clause offers broad protection to members of Congress from prosecution for activity in furtherance of legislation -- but it's not a blanket immunity. Nor is the separation of powers doctrine, which Stevens' attorneys cited in another motion seeking dismissal Thursday.
The allegations concerning the Florida condo emerged in another document filed electronically by prosecutors Wednesday night, hours after the court clerk closed for the day. That document also alleges that Stevens sought jobs from Veco for a son and a grandchild and a new Jeep Cherokee for his daughter Lily in 2005.
The government says it plans to offer that evidence at trial as background, as proof of the crimes in the indictment, and as evidence of a guilty conscience. Stevens wouldn't comment, but it's likely his legal team will fight against introduction of the evidence as extraneous to the charges.
While much of the government's case had emerged in newspaper reports long before the Washington grand jury handed up the indictment, the allegations concerning Florida condo and Jeep Cherokee have never been aired.
The Florida transaction began in 2001, a year after Allen began renovating Stevens' Girdwood residence, and a time at which Stevens was approaching the pinnacle of his power in the Senate.
On Feb. 4, 2001, Stevens and his wife, Catherine, signed a purchase contract with a development company about to build a condo project in Florida, agreeing to buy a garden unit for $360,000. The contract was a standard one and required a 10 percent down payment -- $36,000 -- but Stevens only put down $5,000, the motion says.
The development company was only described as "Company B." One of Company B's partners was "Person C," a personal friend of the Stevens, the government said.
Rather than require Stevens to put down the normal amount, Person C fronted the $31,000 in an interest-free loan that he paid to an escrow company "for the benefit of 'Theodore and Catherine Stevens,' " the government said.
There was evidence that the Stevenses never intended to live in the condo but merely saw it as a quick way to turn a buck, the document says.
On Aug. 21, 2001, Person C wrote Stevens that the deal was about to turn out "as I told you." Though the condo was still unbuilt, Company B had just accepted an offer on Stevens' garden apartment for $515,000 -- the same one Stevens were offered for $360,000 six months earlier. The buyer would assume Stevens' liabilities.
It was after that buyout that the Stevens' repaid Person C for the $31,000 loan, sending a $15,000 check on Sept. 12, 2001 and a $16,000 check on Dec. 11, 2001.
The government said Stevens was required to disclose any loan over $10,000 during 2001, but failed when it came to the condo loan.
"Although Stevens knowingly carried debt on a $31,000 interest-free loan from his personal friend for more than 10 months during 2001, Stevens did not list such a liability on his 2001 disclosure form," the government said.
The vehicle transaction in 2005 follows up an earlier one in 1999 that is referenced in Stevens' indictment. In the first deal, Stevens was looking for a car for his daughter, Lily, then 18. He was accused of not reporting the trade of a 35-year-old Mustang worth $20,000, plus $5,000 cash, for a new Land Rover Discovery bought by Allen worth $44,000 -- for a net benefit of around $20,000.
By 2005, Lily Stevens needed a new car, the government said in its filing Thursday. So Stevens returned to the original source: Allen.
"Allen offered to get Stevens' daughter a new car in exchange for the 1999 Land Rover, and Stevens agreed," the government said.
This time, the SUV would be a new Jeep Grand Cherokee. The deal was made between Stevens' daughter and a Veco employee "for the purpose of hiding Allen's involvement in the transaction." Allen wrote a personal check to the employee for $35,000, who bought the Jeep July 15, 2005, for a little more than $34,000 from a dealer.
Veco shipped the car to Seattle, paid the employee to fly to Seattle, pick up the car, and deliver it to Berkeley, Calif. Lily Stevens earned her law degree at the University of California at Berkeley, according to her wedding announcement in May.
Lily Stevens paid the Veco employee $13,000 plus her old car, valued at about $9,000, for the $34,000 Jeep, the government said.
In March 2006, after the government had begun tapping Allen's phones, Stevens asked a lobbyist to ask Allen for a job in Phoenix for one of his three sons. The son was unnamed, but Walter Stevens, a multimedia management specialist, lived in Phoenix, at least in the 1990s.
In a recorded conversation, the unidentified lobbyist told Allen, "I saw (Sen. Stevens) at lunch and he asked if you -- I'm not sure why he mentioned it to me -- but he asked me to, I think, find out if you had any business contacts in Phoenix with respect to his son who is down there, who finds himself without a job at this point." The lobbyist said Stevens mentioned Allen by name.
Allen ordered company officials to find a job for the son in Alaska in the summer of 2006, the government said. "Stevens' son accepted the position with Veco and also received a personal loan from Allen."
Stevens also asked Allen to hire one of his grandsons, which Veco did, the government said. Veco paid the room, board and tuition for the grandson to attend a technical school.
When the government's investigation became public with raids on legislative offices on Aug. 31, 2006, Stevens sent an email to someone only identified as "Person A," but matching the description of Bob Persons, the Double Musky restauranteur and Stevens friend in Girdwood. He twice asked Person A whether his own home in Girdwood was raided that day. In an e-mail, the motion says, Stevens wrote: "press releases say the FBI served a warrant in Girdwood??? Did they hit our house? T" Later that day, the motion says, Stevens wrote again, "Have you been by the Chalet? Teds"
Months later, in May 2007, the motion says, Stevens learned that Person A had been subpoenaed to testify before a grand jury in Washington, D.C., Stevens sent an e-mail to Person A saying "I hope we can work something out to make sure you aren't led astray on this occasion," the motion says. In a second email, Stevens wrote, "don't answer questions you don't KNOW the answers to."
The government suggested those communications to Person A demonstrated Stevens' "consciousness of guilt."
In another filing Thursday, this one in response to Stevens' assertion of his immunity as a congressman, the government said Stevens' activities went well beyond his legislative role and should not be protected. One example prosecutors cited was Stevens pushing for state legislation on a proposed natural gas pipeline sought for years by Veco.
Stevens used his official position to try to get the state Legislature to approve construction of a gas line during the 2006 legislative session, the new filing says -- a session already shown to be tainted by corruption.
Between January and June 2006, the FBI secretly recorded telephone calls between Allen, Stevens, his legislative staff and his son, then-state Senate President Ben Stevens. They discussed the gas line, then-Gov. Frank Murkowski's negotiations with oil producers and legislation, the filing says. In one call, Stevens promised Allen he would "whittle down" the federal permitting and reviews, the document says.
In a call on June 25, 2006, Stevens and Allen talked about hearings coming up before a state Senate committee on which Ben Stevens served. Prosecutors say Stevens told Allen he was working with his son.
"I'm gonna try to see if I can get some bigwigs from back here to go up there and say, 'Look, uh, you just gotta make up your mind, you gotta get this done. There's no politics in it, there's necessity in it for the Federal government,' " Stevens told Allen, according to the filing.
He asked how he could help Allen, and said he was going to try to get the Secretary of Energy and head of the Federal Energy Regulatory Commission to Alaska regarding the need to act on the pipeline, prosecutors contend.
On July 7, 2006, Stevens traveled to Alaska and addressed the Senate committee, "urging it to cease infighting and pass the pipeline legislation before liquified natural gas monopolizes the marketplace," prosecutors say.
Three days later, the Federal Energy Regulatory Commission issued a report with a similar message.
Daily News reporters Lisa Demer and Erika Bolstad contributed to this report. Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345.