Veco's Smith gets 21-month sentence, $10,000 fine

As he did with Allen, U.S. District Judge John Sedwick said Smith would serve three years of probation after his release.

Smith pleaded guilty more than two years ago to the same charges as Allen: bribery, conspiracy and tax violations. He's been cooperating with prosecutors and testified in the trials of two former state legislators, cooperation that led to less prison time than he would have faced otherwise.

"As damaging and as corrosive as his crimes were, he did everything we ever asked," Kendall Day, a trial attorney with the Public Integrity Section, told the judge.

Smith's attorney argued that Smith played a minor role in the scandal and the sentence should reflect that. He neither devised the strategy to corruptly influence Alaska politicians, nor could he vote on legislation like lawmakers. Organizing meetings doesn't amount to controlling legislators, Smith's attorney, Michael Keenan, told the judge.

"In the scheme, clearly Allen and the legislators had a dominant and superior role," Keenan said.

But prosecutors said Smith had an active role. He told legislators how to vote on oil tax legislation favored by industry, organized meetings, took legislators' calls at critical times. They argued he should get more time as a result.

"Mr. Smith played a role in these cases where essentially he was the person who received instructions from Allen and disseminated those instructions to other participants in the scheme," Day said.

The judge agreed with the defense that Smith's role was much less significant than Allen's, so he shouldn't get extra time, but said he wasn't a bit player either.

"To assert that Smith was only a minor participant overlooks the clout he carried as Allen's very trusted lieutenant upon whom Allen relied and who he trusted to see that his directions were carried out," Sedwick said. "Smith could and did speak for Allen."

When it was his turn to talk Wednesday, Smith spoke of "deep regret and shame with actions that I've been involved in, which have hurt and disgraced my family, my friends, Alaska. And these are all the things that I've loved many, many years."

Sedwick said Smith's troubles arose because he cast his lot with Allen. He could have questioned Allen's conduct and quit Veco before crossing the line into illegal behavior, the judge said.

"What he did seems to me to have been motivated, as much as anything else, by his dependence on Bill Allen and his job at Veco," Sedwick said.

Smith won't report to prison until at least Jan. 11, at his lawyers' request. Smith is still working with prosecutors on other cases.

"As the court is aware, the government has a matter scheduled next month for Mr. Smith," Keenan said. After the hearing, he declined to say what it was all about.

Smith's lawyer requested that Smith be allowed to serve his time at either a federal prison in Sheridan, Ore., or the Lompoc facility in Southern California. Sedwick said he would do so, with preference to Sheridan so Smith can be near family.

For Allen's sentencing, the courtroom was packed with family and friends, lawyers and activists, reporters and bloggers. By the time Smith's hearing began a few minutes later, most of the people had cleared out. Smith walked out with one of his lawyers and a man who wouldn't give his name but said he was a friend. Smith and his friend got in a pickup truck and drove away.

Contact the reporters: ldemer@adn.com, scockerham@adn.com and rmauer@adn.com