Holder says Veco's Bill Allen wasn't given special deal

Erika Bolstad

WASHINGTON -- Political connections had nothing to do with the Justice Department's decision to drop the teen sexual exploitation prosecution of former Veco Corp. chairman Bill Allen, U.S. Attorney General Eric Holder said Thursday.

Neither did Allen's role as the chief witness in former Sen. Ted Stevens' corruption trial in 2008, Holder told Sen. Lisa Murkowski during a Senate hearing.

"I just want to assure you ... and the people of Alaska that you might not agree with the decisions that have been made in connection with cases that have come before the Department of Justice," Holder said.

"But the decisions had nothing to do with political connections, whether somebody's cooperated in a case or something like that," he said. "The decisions were made only on the basis of the facts, the law, and the principles that we have to apply. Nothing beyond that entered into any decisions that we have made."

Murkowski, though, said she remains unsatisfied with Holder's explanation and will consider asking the Justice Department's Inspector General and Office of Professional Responsibility to look at how the case was handled.

"This is something that has so troubled Alaskans to the core," she said. "You have an extremely high-profile political figure, extraordinarily wealthy, truly abusing in a very terrible way a 15-year-old girl over a period of years. The assumption just is that the wealthy politician -- or the wealthy guy with the political connections -- is able to get away with a level of criminality that simply would not be accepted elsewhere."

Allen, 73, who ran the oil giant Veco, was among the most prolific political donors in Alaska until he was snared in the federal corruption investigation into Alaska politics. He pleaded guilty to bribery and related tax charges and is currently serving a three-year sentence at a federal prison in California. He was a key figure not only in Stevens' corruption trial but that of two state lawmakers as well.

Even as Allen moved among the Alaska's political and business elite, numerous witnesses, according to police and federal investigators, said he operated in some of the state's darkest corners, pursuing teenage girls as young as 15.

One of them, Paula Roberds, came forward and said that she was one of the 15-year-olds, and that Allen knew her age when he paid her for sex. When she was 16, she said, she moved to Seattle with her boyfriend. Allen, though, continued to fly her to Anchorage, paying her thousands of dollars each time and putting her up in a hotel. Allen's lawyer is out of the country and was unavailable for comment.

Anchorage police detectives said they spent several years investigating her assertions and had corroborated much of her story as part of an investigation that dates to 2004. They worked with a prosecutor from the Justice Department's Child Exploitation and Obscenity Section, and had plans to present a case to a federal grand jury alleging Allen violated the federal Mann Act. That law prohibits transporting a person across state lines for the purposes of sex, and has tough penalties when the person is a minor.

But in August, the Justice Department vetoed Allen's prosecution despite the recommendation by the prosecutor and his supervisor that a grand jury hear the case.

Murkowski described as "wimpy" and "unsatisfactory" a written response by the Justice Department to a letter she sent last summer demanding an answer about why the Justice Department shut down its case against Allen.

"Is it mere coincidence that on the day before the President signed the Tribal Law and Order Act into law, a woman from an Alaska Native village is told that the Justice Department will not prosecute a once powerful Alaskan, against whom career investigators and prosecutors believe they built a rock solid case, with absolutely no explanation?" she wrote in a letter to Holder.

Murkowski said it's still possible for state prosecutors to move forward with their own case, but they had chosen to pursue federal charges because the Mann Act best fit the facts of the case. Alaska has no comparable law. Bill McAllister, a spokesman for Attorney General John Burns, said the state has no update on its investigation.

"We're just glad that the senator is taking this forward in order to obtain some answers from the attorney general," said Anchorage Police Department spokeswoman Anita Shell. "We would not have referred this case forward if we didn't feel confident in this investigation."

Holder, who was testifying Thursday about his agency's 2012 budget requests in a Senate Appropriations subcommittee hearing, told Murkowski several times that he was confident the Justice Department followed "the appropriate guidelines" for determining whether to pursue a case. They include the age of the case, the reliability of the witnesses and whether they have a better than 50 percent chance of winning the case," he said.

"I can't get into much detail with regard to what decisions were made, but I really want to assure you and the people of your state that the extraneous things that you mentioned, did not factor into that decision," he said.

Holder did say, however, that he has been willing to make unpopular decisions about the Alaska corruption case.

Shortly after Holder took office in 2009, he asked a federal judge to dismiss the guilty verdict and the indictment against Stevens after acknowledging that prosecutors had failed to share some evidence with the former senator's lawyers.

"I think that we can certainly say that with regard to the case, I've not shown an unwillingness to do things that might have been a little controversial maybe even unpopular with regard to matters in Alaska and the Stevens dismissal," Holder said Thursday.

"And I appreciate that," Murkowski said.