Copyright 2008 AlaskaDispatch.com
Bill Allen, the oilman who remodeled U.S. Sen. Ted Stevens's house and is expected to testify against him at his trial starting Monday, has come under investigation for the second time in a year for allegedly sexually abusing teenage girls, Anchorage police confirmed to AlaskaDispatch.com on Wednesday.
Once a "Godfather" figure in Alaska's oil industry and a friend of Stevens's, Allen is under investigation for allegedly carrying on a sexual relationship with a teenage prostitute nine years ago, according to interviews with both police and the alleged victim. Late last year, Anchorage police reopened a separate teen-sex investigation against Allen but have since suspended that case.
A lawyer for Allen has denied the allegations against his client.
The claims threaten to taint the credibility of Allen, a star federal witness in the government's case against Stevens, who is accused of failing to disclose a quarter-million dollars in gifts he received from Allen and other friends. Lawyers defending Stevens have challenged federal prosecutors in recent weeks to turn over evidence related to any state criminal sex abuse or statutory rape investigations against Allen, according to a Sept. 9 court motion. In doing so, they are questioning whether the former oilman is receiving immunity from alleged sex crimes in return for his cooperation.
Allen has emerged as a central figure in a sweeping oil-political corruption scandal unfolding in Alaska. Last year, he pleaded guilty to bribery charges and agreed to help the Feds in their investigation in return for, among other things, a possibly reduced prison sentence and time to sell his oil-contracting firm, VECO Corp., which was purchased by a Denver-based firm  last year for $380 million. Allen's cooperation has already helped federal prosecutors score two bribery convictions against state lawmakers, and the government is likely to call him to testify against Stevens.
Jury selection for Stevens's trial begins Monday in a Washington, D.C., federal court.
In late July, Stevens was charged with seven counts alleging that he failed to report more than $250,000 in gifts on his Senate disclosure forms, the bulk of which, the Feds claim, resulted from a major renovation of his Girdwood, Alaska, home overseen by Allen and VECO workers. Prosecutors say Stevens did not pay for all of the project's costs. He has pleaded not guilty.
The trial comes as the 84-year-old senator -- the longest-serving Senate Republican in history -- is enmeshed in the toughest re-election campaign of his career, running for a seventh term against Anchorage Mayor Mark Begich, a Democrat. Meantime, national media have been fixated on Alaska since Gov. Sarah Palin joined Sen. John McCain as his vice-presidential running mate late last month. She's cast herself as an ethics reformist, vowing to clean up "good 'ol boy" politics in Washington.
The sex allegations dogging Allen are unrelated to Stevens's legal troubles. Still, criminal defense experts say the senator's lawyers could use the investigations to raise questions about Allen's credibility and any testimony he provides against Stevens. Federal prosecutors would argue back that Allen's problems have nothing to do with Stevens and should be kept from coming up in the trial.
"Prisons in America are populated by people who have been convicted by some pretty unsavory characters," said Ben Brafman, a well-known criminal defense lawyer based in New York. If the judge were to allow questioning of Allen about the sex investigations while on the witness stand, Brafman said, his lawyer might suggest he evoke his fifth-amendment privileges.
"The irony is that even if the allegations aren't true, there is no way to disprove them," Brafman said. "Either way, this is a person who comes off the witness stand who looks like damaged goods."
Stevens's lawyers and a spokeswoman at the U.S. Department of Justice declined interviews for this story.
Allegations could taint credibility
For more than a quarter-century, Bill Allen reigned as one of Alaska's most influential businessmen. Allen founded VECO in 1968 and grew it into the largest Alaska-based oilfield services business. He was heavily involved in politics, contributing hundreds of thousands of dollars to Alaska lawmakers sympathetic to his industry. Allen was so well-connected that he co-chaired the Alaska finance committee for the Bush-Cheney 2000 election campaign.
The latest sex case opened by police against Allen stems back to 1999, when he allegedly hired a prostitute in Midtown Anchorage. The alleged victim, identified in this story by her middle name, Marie, agreed to be interviewed by AlaskaDispatch.com in mid-August.
The 24-year-old woman subsequently reported her past relationship with Allen to Anchorage police, which detectives are now investigating, Lt. Paul Honeman, an Anchorage police spokesman, said Wednesday. Honeman declined to provide details about the ongoing investigation.
Marie told AlaskaDispatch.com that Allen was her main client from 1999 to 2001, when she was a prostitute between the ages of 15 and 17. Marie claims Allen paid her more than $20,000 in cash and gifts, including flying her to Alaska for sex when she was briefly living in Seattle. The age of consent in Alaska is 16. There is no statute of limitations for sex crimes involving children.
"He didn't want anybody knowing that we were seeing each other," said Marie, a single mother living in Anchorage. "He made me promise not to tell anybody because I was too young."
Bob Bundy, Allen's attorney, called Marie's allegation "untrue" in an email Wednesday. "My law firm engaged an investigator to find out who this person was and what the nature of her outrageous and untrue charges were. This is all I have to say," Bundy said in his email.
It is the second time in less than 12 months that Allen has been investigated by local authorities for having sex with minors. In December, Anchorage police reopened a 2004 investigation in which Allen had been accused of sexually abusing the underage daughter of one of the workers on the Stevens' house project. Allen denied the charges through his lawyer at the time.
That case has become a hot-button issue among Stevens's lawyers because it was originally halted at the request of Frank Russo, an assistant U.S. Attorney in Anchorage. In a February interview, Russo said he asked local authorities to back off the investigation in spring 2004 to focus on a larger child sex-and-drug ring case. Federal agents have told AlaskaDispatch.com that they began investigating Allen in the corruption probe in December 2004, but that it was never connected to the police's sex case six months earlier.
Stevens's lawyers have asked for the government to disclose evidence on any state investigation of sexual abuse allegations involving Allen, including whether "it was quashed, why it was quashed, and when it was quashed," according to the Sept. 9 filing. The senator's lawyers said such information is relevant to Allen's credibility as a federal witness and could explain his motives for cooperating with the government.
"His cooperation with the government, and the nature of his testimony, may well be driven by a belief, whether justified or not, that his assistance to the government would guarantee him immunity or leniency in the state investigation," Robert Cary, a lawyer representing Stevens, wrote in recent court motion last week. "Such evidence would directly challenge his motives and credibility and thus must be produced."
'It's all about the money'
In 1999, the year before Allen dispatched a crew of VECO employees to work on Stevens's house, Marie claims Allen began hiring her for sex. Marie sat down for an interview in August at a pizza parlor in South Anchorage, describing her childhood and how she ended up as a prostitute when she was still in her teens. She's lived most of her life in Anchorage, but her mother's side of the family hails from Good News Bay, a Yupik Eskimo village in western Alaska. Marie said her childhood was marred with hard times; an absent father and a mother who didn't pay much attention to her.
In 1999, she left her mom's home to live with a boyfriend. She said she soon took to the streets of Spenard, an Anchorage neighborhood, working as a prostitute. Her boyfriend acted as her pimp. She was 15, and based on photographs she provided of herself at the time, she looked it.
One night, near the corner of Spenard Road and 32nd Avenue, a white Land Rover pulled up alongside her. "I remember he rolled his window down and asked me if I wanted a ride. I jumped in," Marie said. "He asked me if I was a cop. I said 'no.'" She claims this was the beginning of a two-and a-half-year sexual relationship with Allen, who at the time was in his early 60s.
Marie, a hotel housekeeper, says she never intended to tell Anchorage police about Allen until this summer, when a co-worker told her she should report him to authorities. Ken Gage, a maintenance man at the same hotel and a former private criminal investigator trying to get back into the business, helped her because, "She's a good kid, a hard worker, and people like Bill Allen piss me off." Marie said she is considering filing a civil suit against Allen. Her attorney, Ken Roosa of Anchorage, declined comment.
Soon after they met in 1999, Marie alleges Allen became her main client, spending "more money on me than anyone else." The sex happened at Allen's home, a Midtown storage lot where he kept a camper, and in hotels, including the Anchorage Hilton in downtown, according to her account. Over time, she learned that Allen owned VECO Corp. "He told me he was the founder of VECO," she said.
In mid-2000, Marie moved to the Seattle area with her boyfriend, but she continued to see Allen. He paid for her to fly up to Anchorage, putting her up at the Hilton. "Every trip I came up here (Anchorage) on, I charged him $2,000," she said, "and on top of that, he would give me spending money." Marie also says Allen wired her money to a Western Union service in Everett, a city north of Seattle. Around that time, she turned 16, the age of consent.
Marie claims she can back up her allegations against Allen; two girls each joined in paid sex with her and Allen on separate occasions. One of the women hung up the phone on a reporter when asked about Allen. The other claimed she participated in sex with Allen and Marie in 2001 at his home near downtown Anchorage, but asked that her name not be published.
In 2001, Marie and Allen abruptly stopped seeing one another. "One of the times he picked me up from the Hilton ... and he asked me, ""Is this all about the money, or do we have a relationship going on?'" Marie said.
Allen, a successful, competitive and fearless businessman in America's oil province, was dumbstruck when Marie rejected his feelings for her.
"After I told him, ""It's all about the money,' he got pretty upset," Marie said. "I think that's how things went sour."
Contact Tony Hopfinger at tony@alaskadispatch.com