Guilty pleas close Alaska corruption probe

Anchorage Daily NewsOctober 21, 2011 

3:45 p.m. update

In a news conference after the hearings, U.S. Attorney Karen Loeffler said that despite the issues with the Justice Department prosecutions, the investigation was a major success. A total of 10 people were convicted, either in guilty pleas or by verdicts, nine for felonies. Of those, she noted, six were legislators, representing 10 percent of people in office in 2006.

Loeffler said that as far as the U.S. attorney's office in Alaska is concerned, the book is now closed on the investigation.

"With these two convictions and the sentences today, this brings to an end the largest and most successful corruption investigation ever in Alaska," Loeffler said. "The final result of this investigation was 10 convictions. Six legislators who were sitting at the time (of the investigation) were convicted of corruption charges, five of those were felonies, one was the misdemeanor. That's 10 percent of the Alaska Legislature."

Loeffler said she hoped that future legislators take a lesson from the case.

"It's important that government be fair, open and honest," she said. "We're not a third-world country -- we're the United States of America, and we will prosecute these cases and pursue them wherever and whenever necessary to support the citizens and what people expect here."

She said she couldn't comment on the still-open internal investigations into the conduct of prosecutors and the FBI by the Justice Department's Office of Professional Responsibility, or the ongoing criminal contempt investigation into the prosecution of former U.S. Sen. Ted Stevens by a special prosecutor in Washington, D.C. One of the attorneys in her office is among the subjects of that investigation, as are four other prosecutors.

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12:15 p.m. update

U.S. District Judge Ralph Beistline said this morning that the corruption scandal that plagued the 24th Legislature in 2006 was a shame upon the state of Alaska and that men like former House Speaker Pete Kott bear much of the blame.

In sentencing Kott to the 17 months he already served for a prior conviction, Beistline said he has known many legislators over the years, and none brought the kind of dishonor to Alaska that Kott did.

"With these shenanigans we've seen in the 24th Legislature, hopefully we've seen the exception and not the rule," Beistline said. He described the victims of Kott to be "the citizens of the state of Alaska. They are unique, good people -- they deserve to have honest and hardworking, conscientious legislators."

Later in the morning, former state Rep. Vic Kohring also was sentenced to time served. Beistline found Kohring couldn't afford a fine, so he added 18 months of probation.

Kott got three years probation, with the added provision of a curfew for the first year to be determined by his probation officer.

Kohring's lawyer whispered to Kohring that he didn't have to speak, and he chose not to.

Beistline spoke shortly after Kott entered a guilty plea to accepting bribes from Bill Allen, the chief executive of the defunct oil-field contracting company Veco Corp. Kott had been scheduled to be retried on three felonies in December after his 2007 conviction was overturned on appeal.

Kott apologized to the judge during the 40-minute hearing in the federal courthouse.

"I said when I was first sentenced that I was certainly sorry for my actions and I want to reiterate that again today," Kott said from his seat at the defense table. "In my head, I thought my actions in the Legislature were for the best in interests of the people of the state of Alaska. Outside of the Legislature, perhaps they were wrong."

Kott said that as a 62-year-old now, his priorities have changed from when he was serving in the House.

"My priority is my family. I want to rebuild my time with them and continue moving forward. I want to close this chapter of my life and start afresh and be a contributing member of society," he said.

Beistline, in accepting the plea and a plea-bargained sentence for Kott that was substantially below the 30 to 37 months in federal sentencing guidelines, recalled the words of President Gerald Ford in pardoning Richard Nixon for his Watergate crimes.

"I recognize the need to put this long state nightmare to an end," Beistline said.

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Original story:

Two former longtime legislators are due to report to federal court in Anchorage this morning, where they plan to plead guilty to corruption charges and expect to get no more prison time than they've already served.

It's the second go-round in the dock for the two Republicans, Pete Kott of Eagle River and Vic Kohring of Wasilla. Anchorage juries convicted both in 2007 on three felonies each, and they received stiff sentences: Kott, once the House Speaker, got six years, and Kohring, a committee chairman, got 3-1/2 years.

But they maintained their innocence, appealed and won new trials.

In throwing out the convictions, three judges from the 9th U.S. Circuit Court of Appeals cited a messy prosecution that failed to turn over favorable evidence it had, mostly about the shifting stories and character flaws of the man who bribed Kott, Kohring and other legislators and then turned government witness, Bill Allen. One of the appellate judges thought the prosecution was so flawed that the charges should be thrown out altogether, but she was outvoted by the other two, who said new trials would suffice.

In the run-up to the retrials -- Kohring's was to start at the end of October, Kott's in December -- lawyers for the two men fought a vigorous motion campaign. They sought dismissal of counts, they tried to retool the indictments more in their favor, they sought to drag the former prosecution team into court under oath and force them to testify about their conduct in the first cases, they wanted to expand their interrogations of Allen before the juries to include allegations of sexual misconduct with minors.

The defendants had a new trial judge, U.S. District Court Judge Ralph Beistline, who took over as chief judge in the district from the original trial judge, John Sedwick, when Sedwick went on senior status -- a kind of working retirement for judges who hold appointment for life.

In fact, all the players, save for the defendants and witnesses, were new. A Seattle public defender took over Kohring's case from an attorney that Kohring had retained. Two Seattle lawyers were appointed to handle Kott's case. The prosecution team was from the U.S. attorney's office in Anchorage instead of the Public Integrity Section of "Main Justice," the department's headquarters in Washington, D.C.

But the lead-up to the trials looked a lot like the first time around. Beistline's rulings were not much different from Sedwick's, and the defense attorneys got little of what they asked for.

So with their trials approaching and facing the possibility of convictions and returning to prison, Kott and Kohring decided to take a deal. Each said they would admit this morning to taking bribes from Allen and his oil-field service company Veco Corp. in return for helping Allen get the oil-tax measure he wanted in 2006 for his industry customers, BP, Conoco Phillips and Exxon.

While Beistline doesn't have to accept the deals, judges rarely second-guess bargains entered into by defendants and prosecutors. If it goes according to form, starting at 9:30 a.m., first Kott, then Kohring will be grilled by Beistline about whether they understand the magnitude of their pleas and the impact of felony convictions on their lives. Assistant U.S. Attorney Kevin Feldis will give a brief narrative of the illegal activity the men are admitting, and Kott and Kohring will be given the opportunity to speak.

If he follows the script, Beistline will sentence the two men to the time they've already served -- about 12 months for Kohring, about 17 months for Kott. He'll order them to serve probation, and Kott to pay a fine of $10,000. If Beistline doesn't go along with the deal, the men can withdraw their pleas.

U.S. Attorney Karen Loeffler, whose office was barred from supervising the prosecutions by the Justice Department until it was called upon to mop up the Kott and Kohring cases, has scheduled a news conference for after the hearings. She hasn't disclosed what she intends to discuss, making it the only real mystery of the day.

Reach Richard Mauer at rmauer@adn.com or 257-4345

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