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Powerful lawmakers on Stevens trial witness list

Erika Bolstad,Richard Mauer

WASHINGTON -- A witness list read to potential jurors this morning suggested that a bevy of Sen. Ted Stevens' high-profile Senate colleagues would testify in his corruption trial.

The witness include his longtime friend and fellow World War II veteran Sen. Daniel Inouye, D-Hawaii, and three other Senate peers: Sen. Patrick Leahy, D-Vt., Sen. Orrin Hatch, R-Utah, and Sen. Ted Kennedy, D-Mass. Former Secretary of State Colin Powell is also on the list. It wasn't clear Monday whether the men are witnesses for the defense or the prosecution.

Also on the list: a Fairbanks strip club manager as well as the underage former mistress of one of the chief witnesses, Bill Allen, and the Anchorage Police Department detective who is investigating the relationship between the two.

Monday, Judge Emmet Sullivan issued an order allowing Stevens to duck in and out of the trial in federal district court in Washington, D.C., if he has Senate business to attend to. It's not clear whether he can leave to campaign; the 84-year-old senator is up for re-election and on Nov. 4 faces Democrat Mark Begich, the mayor of Anchorage.

Jury selection in Stevens' trial began today and will continue tomorrow. The trial itself will begin Wednesday. Stevens faces charges that he took more than $250,000 in labor, materials and furnishings from Veco and its former CEO, Allen, but failed to report the gifts on his annual Senate disclosure forms.

Meanwhile, the Colorado construction and engineering company that bought Veco is trying to keep from handing over documents sought by the Alaska Republican's defense team.

Lawyers for CH2M Hill, which purchased Alaska-based Veco Corp. last year, don't want to make public some of the evidence sought by Stevens' attorneys, including documents that show how the new company is cooperating with the federal corruption investigation.

Lawyers for C2HM Hill said in a motion filed Monday that they believe Stevens' defense team is conducting a "fishing expedition" for three things: communications between the company and prosecutors concerning the Veco sale, documents that detail whether the company would be prosecuted itself for misdeeds, and information that would show whether the company's former executives benefited by cooperating with the federal corruption investigation.

Those executives include Allen, who was convicted of bribing state lawmakers but hasn't been sentenced yet. Allen is expected to a pivotal witness in the senator's trial, as are recordings by the FBI between him and Stevens.

Lawyers for CH2M Hill say they're not obligated to turn over any of the material requested by Stevens' lawyers, who have already asked the Justice Department for it. Prosecutors have not turned it over either, saying that it's irrelevant to their prosecution of Stevens.

"Unsatisfied with the government's decision not to produce this very same information ... the defendant now seeks these items from a nonparty in a back-door attempt to circumvent the government's discovery obligations," lawyers for CH2M Hill wrote.

Stevens' lawyers counter that because Allen "apparently conducted numerous illegal activities through Veco, which have led to his conviction and that of several Alaska state officials, CH2M Hill's purchase of Veco could have exposed it to potential criminal indictment. Although an indictment would be an unwelcome event in the life of any corporation, for CH2M Hill criminal charges would be particularly devastating because it is a government contractor and faces debarment if indicted."

They want the documents because they hope to show at trial that Allen had a motivation to "testify favorably" as a prosecution witness, Stevens' lawyers wrote.

CH2M Hill, an employee-owned company, bought Veco last September, and the formal stock-purchase agreement was filed publicly with the Securities and Exchange Commission. The agreement showed that the Allen family and two former Veco executives, Roger Chan and Peter Leathard, owned shares in Veco either directly or through trusts.

The Veco owners shared in the proceeds according to their ownership percentages, with the Allen family together holding more than 80 percent, according to sales documents.

According to the CH2M Hill purchase agreement, the total value of the sale was $380 million. But after adjustments, assumptions of debt and the issuance of $15 million in CH2M Hill stock to Veco employees who joined CH2M Hill, the owners were left to divide $146 million in cash.

Another $70 million was withheld but payable by 2010 -- a guarantee against hidden or unexpected issues arising, including the possibility that Veco could still be charged criminally as a corporation.

Allen has testified he tried to get immunity for the company but couldn't. In its SEC filing, CH2M Hill said such an event would be "potentially detrimental to CH2M Hill's reputation in the business community or impact our future business operations." The new owners said they would continue to cooperate with ongoing investigations and have had a "productive dialogue" with the U.S. Justice Department


By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News