The very first day that former Veco Corp. chairman Bill Allen sat down with FBI agents, he described questionable dealings with a number of Alaska politicians, some of whom are now in prison for the corrupt acts he described.
Newly filed court documents outline the extent of Allen's initial revelations to the FBI, including his interactions with public figures that haven't previously been reported -- and who haven't been charged.
In his first interview, the same day he learned of the investigation, Allen told the FBI about financial favors sought by and given to politicians.
He said he hired a lawyer for former state Rep. Bev Masek when she was fighting allegations of misspending campaign money. He said former state Rep. Cheryll Heinze came to his house seeking a job while she was in office. He said he bought property from former state Sen. Jerry Ward to provide him campaign money. And he talked about golf tournaments that generated cash for U.S. Rep. Don Young, though he also described Young as someone who couldn't be bought.
Heinze strongly disputed the allegations and Young, who faces re-election next week, has denied any wrongdoing. Masek and Ward did not return phone calls.
Whether federal authorities are still investigating or plan to bring cases against any of the newly named individuals isn't clear. FBI spokesman Eric Gonzalez would only say the investigation is ongoing. It's also unknown whether the FBI later obtained information that contradicted any of Allen's assertions.
The new documents -- summaries of Allen's initial interview with the FBI and a subsequent interview -- were filed earlier this month during the trial of U.S. Sen. Ted Stevens in Washington, D.C. The summaries were attached to motions filed by Stevens' lawyers. The summaries recount what Allen told investigators, and make no attempt to verify his assertions.
The first interview occurred on Aug. 30, 2006, after agents brought Allen into FBI headquarters in downtown Anchorage and he agreed to cooperate. The broad, multi-faceted investigation into Alaska corruption wouldn't become public knowledge until the next day, when federal agents swarmed legislative offices with search warrants. The FBI had been monitoring Allen's phone calls for months.
Allen pleaded guilty to bribery and conspiracy in May 2007. As part of his plea deal, prosecutors agreed not to seek charges against Allen's son, Mark, or other relatives.
Allen became one of the main prosecution witnesses at the federal trials last year of former state Reps. Pete Kott and Vic Kohring, who are both now in prison, and U.S. Sen. Ted Stevens, convicted Monday of seven felonies. Allen secretly recorded calls for the FBI were used as evidence against Stevens and Kott.
Here is some of what Allen asserted in the interviews:
REP. DON YOUNG
In his initial interview, Allen told the FBI about the pig roast fund-raiser that he hosted for Young. He said Marx Brothers Cafe catered it and he thought that Young covered the bills but wasn't sure. He said he paid for the alcohol with his Veco credit card, according to a summary of his interview with the FBI.
After the investigation surfaced, but before Allen's role was known, the Young campaign tried to reimburse Allen $37,626 for expenses associated with the annual pig roasts, the campaign has said. The check never was cashed, so the campaign sent the money to the U.S. Treasury.
Allen also talked to the FBI about "golf outings" organized by a Veco vice president, Rick Smith, to benefit Young. Smith also has pleaded guilty to bribery and conspiracy.
"Allen recalled that participants contributed $100 a piece to play. Allen said that the money given to Young was not a big deal and he considered it a 'thank you' to Young," the FBI interview summary said.
"Allen described Young as a life long friend and a person he calls his brother," the interview summary said. "Allen said that you can't 'buy' Young."
Gary Sanford, manager of the Moose Run Golf Course on Fort Richardson, said this week that he remembered the Smith-organized golf outings for Young, and recalled prizes like golf balls and putters, but not cash. However, last year, an Associated Press story reported that Sanford said he was sometimes around when cash prizes were handed out. In that story, Sanford said that he didn't remember Young receiving any cash that he didn't win.
Sanford said this week that he has never been interviewed by the FBI about the golf outings.
Young's chief of staff, Mike Anderson, said in his six years with Young, the congressman has never pushed legislation to specifically benefit Allen or Smith.
Young has said he cannot talk about the investigation but also that he wouldn't be running again if he had done anything dishonorable.
Young has reported spending more than $1.2 million in campaign contributions on legal fees since early 2007.
Young, 75 and a Republican, is running for his 19th term as Alaska's only U.S. House member. He has not been charged with any wrongdoing.
JERRY WARD
Allen told the FBI he bought a piece of land in Sterling from Ward for about $30,000, according to a summary of his initial interview. Ward suggested the deal because he needed money for his re-election campaign, Allen said. Allen told agents that he thought the price was inflated. The interview summary doesn't include a year, but Allen said that the deal was conducted with the help of someone named Earl Robinson. State land records show that Ward sold property in Sterling to Earl Paul Robinson of Oklahoma in October 2000, when Ward was running for re-election to his Senate seat.
Ward won in 2000 but lost to Tom Wagoner two years later. When Ward tried to wrest back the seat in 2004, he again approached Allen for money, according to the FBI interview summary. This time, Allen refused but he agreed not to help Wagoner, the incumbent.
Ward, a Republican who represented South Anchorage and the Kenai, served in the Senate from 1996 until his third term ended in 2003. He also served a House term in the early 1980s.
Ward also has been linked to the criminal case against former halfway house operator Bill Weimar, who has pleaded guilty to two charges and is awaiting sentencing. Weimar has admitted being part of a conspiracy to funnel money to a campaign consultant for an unnamed candidate, knowing the candidate supported a private prison. That candidate appears to be Ward.
Ward did not return calls for this story or following Weimar's guilty plea in August. Ward has not been charged with any wrongdoing.
BEV MASEK
Allen helped out Masek, a former Republican state representative from Willow, "as she needed things," according to the summary of his initial interview. "For example, he would pay to fill her gas tank when she had no money," the statement said. He helped her with a flat tire. And, he told the FBI, he gave her cash.
When Masek faced complaints before the Alaska Public Offices Commission and the legislative ethics committee, Allen said he directed lawyer Jack Miller to represent her. Veco paid the bill, Allen told the FBI. He couldn't remember the total but said it could have been as much as $30,000. A call to Miller was not returned.
Masek didn't return repeated telephone calls seeking comment.
She served five terms in the state House, but lost in the 2004 primary election.
In September 2004, after a lengthy investigation generated by a complaint, the public offices commission fined Masek $1,000 for improperly spending campaign funds on personal items and to repay loans. The next year, a House ethics subcommittee found cause to believe that she broke state ethics law by using an aide for personal errands on state time and for "financial convenience." The employee had complained he had to loan her money or be fired. By then she was no longer in office, so no sanctions were imposed.
APOC wondered back in 2004 whether Allen was paying Masek's legal bills, Chris Ellingson, APOC assistant director, said this week.
"We suspected since it was his attorney that represented her. It didn't matter on our part," Ellingson said. While that may have been an ethical breach, it wasn't within the purview of APOC, she said.
Masek has not been charged with any wrongdoing.
CHERYLL HEINZE
As to Heinze, Allen said she was still in the Legislature when she came to his house seeking a job for herself or her husband, according to the FBI summary of his initial interview.
"At the time, Allen thought he was being set up by Heinze and Allen refused her request for a job," the interview summary said.
That didn't happen, Heinze said when reached on the phone this week.
"Good Lord!" she said. "I'm sorry. He's naming anyone and everyone he can name and trying to save something for his own kids. And he better the hell leave me out of it."
She remembers going to Allen's home for the Young fund-raisers, but says she never talked to Allen about a job.
"You know when he did the pig roast, everybody went. That's it," she said.
Heinze, a Republican from Anchorage, served a single House term after being elected in 2002. She suddenly dropped out of her 2004 race. That fall, her attorney, Jeff Feldman, confirmed that the FBI had been investigating her after complaints about her soliciting consulting work from Railbelt utilities. But nothing ever came of that.
At any rate, Heinze said this week she has never spoken with the FBI about anything. She has not been charged with any wrongdoing.
BEN STEVENS
In his interviews with federal agents, Allen couldn't recall work that former Senate President Ben Stevens did for Veco after becoming a legislator in 2001. Ben is Ted Stevens' son. For years, both before and after he was in the Legislature, Ben was a paid Veco consultant.
In his interview with agents in December 2006, Allen said that all Ben Stevens did for Veco the preceding year was work on the proposed gas pipeline and an oil tax that North Slope oil producers wanted.
"He knew more about these issues than anyone else," according to the summary of interviews from Dec. 11 and 12, 2006.
Before Ben Stevens was appointed to the Senate, he was a smart and capable consultant, Allen told federal agents.
When Veco had trouble getting what it was due from Pakistani officials for a pipeline, Ben Stevens went to the World Bank and negotiated payment, Allen said. He also helped on a project building a harbor on Sakhalin Island in Russia, Allen said.
But once he became a senator, his work dropped off, Allen acknowledged.
"There was concern in Veco that Ben Stevens was not doing any work and he was billing Veco monthly for work," according to the December 2006 interview summary, which was prepared by Internal Revenue Service agents.
Veco's lawyer and chief financial officer were worried the company would get in trouble, the interview summary said.
In one five-year stretch, from 2001 through 2005, Ben Stevens made $252,000 from Veco, according to his state disclosure forms.
"Ben, since the date the search warrants were executed more than two years ago, has insisted that he is innocent and did nothing wrong," his attorney, John Wolfe of Seattle, said Thursday. "He has been quite clear that Mr. Allen's statements about him are false and nothing new has transpired to cause him to change that opinion."
Ben Stevens has not been charged with any wrongdoing.
'SPECIAL BONUSES'
In those December 2006 interviews with the IRS and the FBI, Allen described Veco's special bonus program in detail.
Extra or special bonuses were paid to some Veco executives for political purposes, Allen told the federal agents. Allen said Veco President Pete Leathard, Smith, and himself had a meeting each year to determine which politicians, charities and community events they wanted to support. They mostly supported oil-industry-friendly Republicans, he said. Allen and Smith would review who was up for election and "guesstimate" bonus amounts based on the number of candidates and anticipated contribution amounts, he said.
A select group of executives received the special bonuses: Leathard, Smith, Roger Chan, Tom Corkran and Jamie Slack, Allen said, the summary said.
Allen figured the executives would not make political contributions on their own without the special bonuses, but also told the agents that no one was obligated to make contributions and a couple of executives weren't in the program.
"The Veco executive often agrees to the amount and Rick Smith will write that amount on the executive's business card as an IOU," the IRS summary said. He then would give the IOU to their personal assistant, Linda Croft, Allen told the agents.
Sometimes, they contributed in races Outside. Stevens urged Allen to support Republican Mike McGavick in his ultimately unsuccessful challenge two years ago to Democratic U.S. Sen. Maria Cantwell in Washington state, the interview summary said. McGavick later returned the donations, according to news reports.
Allen told the agents that he thought the special bonus program was legal, and he testified the same way at Kott's and Kohring's trials.
Leathard also thought it was legitimate, said his attorney, David Marshall of Bellevue, Wash.
"He believes what happened was completely legal and that there's nothing wrong with a bonus program for people who make their own choices as to who they wish to contribute to," Marshall said.
Leathard has not been charged with any wrongdoing. Allen and Smith are the only former Veco executives who have been charged.
For years before the company was sold in 2007, the Veco executives were among the state's most active campaign contributors.
Find Lisa Demer online at adn.com/contact/ldemer or call 257-4390.
