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Bill Allen sentenced to 3 years in prison, fined $750,000

Richard Mauer,Lisa Demer,Sean CockerhamMcClatchy-Tribune News Service

As some of his family dabbed tears from their eyes, Bill Allen, a one-time Alaskan of the Year and employer of thousands of Alaskans, at last stood before a judge to face his punishment Wednesday.

Now 72, Allen once saw himself as the proxy for the state's petroleum industry through his oil-field service company Veco Corp. But the FBI caught him paying bribes and gratuities to elected officials and treating campaign finance laws like they were written for someone else.

"I'd like to apologize to you, to the people here in Alaska," Allen said haltingly, the effects of his 2001 motorcycle accident still making it hard for the words to emerge. "Instead of me really helping them, I pushed them down, really. I thought I was doing right, but I pushed too -- I went over the line, too far."

"Your honor, go ahead and sentence me," he concluded at the end of a 12-minute version of his life story and how he came to be in the dock of a federal courtroom in Anchorage. "But kind of remember, I done some good."

Three years, said U.S. District Judge John Sedwick, and a $750,000 fine. The prison sentence was substantially less than the 41-month maximum suggested by federal guidelines, but the fine was the biggest Sedwick could assess, and the judge said he would have levied a larger one if he could because Allen's crimes were partly motivated by greed.

The hearing over, portions of the Allen clan -- son Mark, daughter Tammy, two of her children, Tammy's lawyer -- left the courtroom, scuffled with a blogger with a video camera on the sidewalk, then hauled out to the Million Air fixed-base operation at the airport in three black SUVs protected by a beefy security detail. They boarded the private jet they bought with the millions they got from the forced sale of Veco in 2007 and left Alaska for points south.

Allen will be free until the U.S. Bureau of Prisons finds him a spot, probably in a low-security facility in Oregon or Arizona, the two such places closest to his children.

It could be awhile. Former Rep. Beverly Masek was sentenced Sept. 24 to six months for taking cash from Allen and his son Mark, and she's still not incarcerated, according to the Bureau of Prisons Web site.

As the Allen family was preparing for departure, Rick Smith, Allen's former vice president, took his turn in Sedwick's courtroom. Smith had pleaded guilty the same day as Allen -- May 7, 2007 -- to the same crimes -- conspiracy, bribery and tax violations. While Smith was culpable, Sedwick said, it was not to the degree of his boss, and he certainly wasn't as wealthy. Smith got 21 months and a $10,000 fine.

At 11:16 a.m., Sedwick's court adjourned and a long chapter in Alaska's political corruption saga came to an end.

Allen learned he was caught on Aug. 30, 2006, when the FBI showed him evidence they had gathered over three years of investigation, including video filmed with a camera hidden in a lamp in his hotel suite in Juneau.

"They gave me a tape that really embarrassed me," Allen said in his monologue to the judge. "I can't talk anyway, and when they were taping it, hell I can tell I was half drunk and I didn't like what I looked like to myself. So I made two decisions -- I was going to do the right thing, 'cause I did do wrong, I was trying to make it right. And I quit drinking. ... I'm not an alcoholic, it's just that you do a lot of drinking down there in Juneau, and that's the stupidest thing you can do with me or any of the legislators, because your reasoning is not as good as it should be."

That turned out to be a key decision. The next day, he convinced Smith to work with prosecutors too, and over the next eight months they wore wires to meetings with legislators, made recorded phone calls and gave numerous debriefings. On Wednesday, it emerged for the first time that Allen permitted the FBI to make video recordings on 11 occasions in his Anchorage home.

After their guilty pleas and their cooperation became known, blowing their cover, they testified at trials.

Under the federal sentencing guidelines, Allen would have faced more than eight years in prison had he not cooperated, prosecutor James Trusty told the court. Smith would have been looking at more than five years, prosecutor Kendall Day said.

Sedwick took pains to explain the disparities between the sentences for Allen and Smith -- the men with the money -- and two legislators who took the money, former Reps. Pete Kott and Vic Kohring. Kott got six years, Kohring 42 months.

"Mr. Allen has cooperated; he began cooperating the very day he learned he was subject to the investigation," Sedwick said. "They not only refused to cooperate, they refused to take responsibility for their crimes." He said Kott's own testimony appeared to have been disbelieved by the jury, Sedwick said.

Trusty noted that Allen was a polarizing figure. On one side was "a picture of a man who loves family, loves friends," and who engaged in "extraordinary acts of charity," an "admirable person who rose from nothing."

On the other side were "actions committed over a period a years that were very destructive," a "swath of harm created by Mr. Allen's corruption of others and tarnished political institutions," Trusty said.

Often, when there are such mixed descriptions of a defendant, the truth usually lies somewhere in between. Not so with Allen, he said, a man who instead embraces both extremes.

At one point in the proceedings, a question arose over whether Allen's payments of more than $200,000 over six years to "State Senator B" -- a reference to former Senate President Ben Stevens -- were bribes or gratuities. The distinction could have added or subtracted several months from the sentences that Allen or Smith could face.

Prosecutors argued they were bribes -- payments to achieve legislative goals, even if the goals weren't specified with each payment. Sedwick ruled they were gratuities -- payments to purchase influence that are less damning than bribes but also illegal. But he also said he didn't know all the evidence the government had.

Stevens, the son of former U.S. Sen. Ted Stevens, has been under investigation for years but has not been charged. He has denied wrongdoing.

Sedwick also recognized Smith's cooperation during his sentencing.

"As damaging and as corrosive as his crimes were, he did everything we ever asked," prosecutor Day 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.

Sedwick took the middle ground, ruling Smith was neither insignificant nor the ringleader but bore responsibility as Allen's loyal lieutenant.

"He should have questioned what he was told," Sedwick said. "He should have quit."

For Allen's sentencing, the courtroom was packed with family and friends, lawyers and activists, reporters and bloggers. Spectators trying to catch a glimpse of Alaska history in the making stood in a line in the back the large courtroom.

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: scockerham@adn.com, rmauer@adn.com and ldemer@adn.com

Audio: Allen addresses the court
Video: Allen exits courtroom
More on Alaska corruption investigation
By RICHARD MAUER, LISA DEMER and SEAN COCKERHAM
Anchorage Daily News / adn.com
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