Federal prosecutors drop Young case

SCRUTINY: No details are offered at end of official investigation.

August 4, 2010 

Rep. Don Young said Wednesday that federal authorities have decided against seeking his indictment and have dropped their long-running corruption investigation of him.

Young, a 77-year-old Republican who has represented Alaska in Congress since 1973, announced the end of the government's investigation in a terse, one-sentence statement from his Washington office that offered no details. He had been under scrutiny by the FBI and the Justice Department's Public Integrity Section since at least 2006.

Meredith Kenny, Young's press secretary, said Young's attorneys got the word from the Justice Department in a telephone call Wednesday. Young was in Alaska at the time, she said.

A Justice Department spokeswoman declined to comment. The agency rarely makes a public announcement when it drops a case, though it will sometimes alert crime victims and potential defendants of a no-prosecution decision.

Kenny said Young wouldn't comment until he's cleared to talk by his attorneys.

"I'm waiting for guidance from the legal team about what he can do and what he can say," Kenny said. "They were notified this morning and that is all we can say. This all happened in the last couple hours."

Young's lead attorney, John Dowd, declined to comment.

"There is nothing to talk about beyond the statement issued by the Congressman's office," Dowd said in an e-mail message.

Young reported spending more than $1.2 million in campaign money on legal fees starting in 2007. Young paid the attorney fees out of a special legal defense fund created with donations.

Young faced federal scrutiny on at least two fronts: his connections to the defunct Anchorage oil field services company Veco Corp. and two of its executives, Bill Allen and Rick Smith, who admitted making illegal payments to his campaign and buying him gifts; and the mysterious earmark in Young's highway bill for an interchange in Florida sought by a developer who contributed to Young's re-election in 2005.

According to a document filed by federal prosecutors in 2009, Allen, as Veco's chief executive, confessed to directing his company to make between $130,000 and $195,000 in illegal and unreported contributions to Young's election campaigns from 1993 to 2006. The money was used for Young's annual pig-roast fundraiser.

"Each year, Allen and Smith arranged for the purchase of catering expenses, liquor, equipment rentals, and other associated costs," said Allen's confession, filed by prosecutors before Allen was sentenced to three years in prison after admitting to bribery and tax charges. "These expenses were paid using Veco's corporate funds, and amounted to approximately $10,000 to $15,000 each year."

After the investigation began, Young's campaign attempted to reimburse Veco $37,626 for expenses associated with the pig roast. Veco never cashed the check, and Young's campaign later sent the money to the U.S. Treasury.

Smith, also prominent in Anchorage's golf scene, used Allen's credit card to buy Young a $1,000 set of clubs, according to the confession. Young never reported the gift.

Allen also told FBI agents that participants in at least one "golf outing" organized by Smith paid $100 to play. The collected money was handed to Young as a "thank you," Allen said, describing what appeared to be a gratuity.

The notorious Coconut Road interchange earmark showed up in the 2005 highways bill, the huge federal spending program engineered by Young when he chaired the House Transportation and Infrastructure Committee. The earmark wasn't in the bill when it passed Congress but was there when signed by President Bush. The $10 million earmark was sought by a developer of Florida land who arranged for a $40,000 fundraiser for Young.

It has never been explained how the earmark document was changed. Congress referred the matter to the Justice Department.

Young has never answered questions about the allegations, something his opponents in this year's election immediately pointed out Wednesday.

"A decision that there is a lack of evidence to prosecute Mr. Young is not the same as being cleared of federal corruption," said Sheldon Fisher, a former telecommunications executive running against Young in the Republican primary Aug. 24. "I call upon Mr. Young to release Department of Justice correspondence allegedly clearing him of federal corruption charges. Alaskans deserve to know whether he was cleared or whether the Department of Justice merely decided not to prosecute in light of the embarrassment resulting from prosecutorial misconduct in other trials involving Veco Corp."

Fisher was referring to the collapse of the case against Sen. Ted Stevens after a jury found Stevens guilty of not reporting gifts from Allen and Veco. Those prosecutors are now under investigation for failing to turn over to the defense evidence that Allen's story evolved over time.

"Young has refused to speak about these issues in the past due to the pending investigations, but now it appears he is free to speak on such matters," Fisher said in a prepared statement. "It is time for Mr. Young to respond to questions from Alaskans, the media, and fellow Republicans regarding how legislation from his Transportation Committee was unconstitutionally altered after had been passed by both the House and Senate to insert the Coconut Road earmark."

Alaska Rep. Harry Crawford, a Democrat hoping to succeed Young, called on him "to disclose to all Alaskans the full extent of the charges under which he was being investigated."

The chair of the Alaska Democratic Party, Patti Higgins, also noted that Young has left questions unanswered.

"We deserve to know the full story of his involvement with Veco and his questionable behavior in Florida," Higgins said. "And while the Department of Justice apparently has decided not to prosecute, this does not mean that his behavior was ethical."


Daily News reporter Erika Bolstad in Washington, D.C., contributed to this story.

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