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Did the feds cover up sex allegations against Bill Allen?

Amanda Coyne

Bill Allen investigation
Aaron Jansen illustration

ANALYSIS: After three years of being the federal government's songbird, former oilman and millionaire Bill Allen is expected Wednesday morning to be sentenced to prison for his role in the sweeping Alaska political corruption scandal. There's been speculation that there are more politicians and other Alaskans who should be investigated for corruption. In fact, Allen's unsuccessful motion to delay sentencing indicates as much.

But even if the FBI continues to investigate every Alaska public official who has ever accepted bad money, vital questions still need to be answered on how the feds conducted their probe in the first place.


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Just as what happened with the government's failed case against former U.S. Sen. Ted Stevens, allegations have now emerged that federal prosecutors and agents may have cut corners, coached and shaped Allen's testimony, and failed to turn over evidence that might have called into question the motivation behind Allen's generosity to former state Rep. Pete Kott, who was convicted in fall 2007 for taking bribes.

Still, there is a significant difference between the malfeasance in the Stevens' trial and what is now being alleged by Kott.

That's because although they flirted with doing so, Stevens' lawyers never brought up allegations that Allen, 72, had sexual relationships with underage girls over the course of years. Kott's lawyer is now going down this road, claiming the feds should have revealed the alleged problems plaguing Allen before Kott stood trial. These facts might have been useful for Kott to question why Allen was now accusing him of bribery; why Allen decided to cooperate with the government in the first place.

But there are much larger implications at stake, too.

On the surface, it appears the federal government might have hindered local police from doing their job - investigating alleged child sex crimes. And this raises a public policy question: Was it more important to investigate politicians for corruption than probing a prominent businessman accused of sexually abusing minors?

Let's be clear: Allen has not been charged with any crime related to the sex allegations and has firmly denied through his lawyers any wrongdoing. Neither has it been proven that the federal government covered up the allegations facing Allen or that it prevented Anchorage detectives from pursing the claims.

But Kott's motion to have his case dismissed does paint a detailed scenario where the feds went out of their way to suppress the sex-crime allegations, perhaps to keep the former VECO chief executive cooperating on the corruption front, and to keep his reputation as a witness untarnished.

Based on our own reporting, Kott's motion and the newly released documents, we know that Anchorage police have been investigating Allen off and on since 2004 in at least two separate cases that involved him allegedly hiring teenage girls for sex in the 1990s and early 2000s. We also now know that the federal government, including some of those agents and prosecutors who headed up the corruption investigation, knew of these allegations at some point as they zeroed in on Allen.

But the problem is that the documents the government has turned over to Kott don't tell the full story. There are still pieces of the puzzle missing. And Kott and his attorney, Sheryl Gordon McCloud, want prosecutors to provide more information.

In her request, McCloud wants to know why a federal prosecutor ordered an Anchorage Police detective to shut down a child-sex investigation involving Allen five years ago. She also wants to question the FBI agent who headed the corruption probe on what she knew about the allegations dogging the government's star witness, including whether this information was ever used against him to secure his cooperation, or to keep him cooperating.

The government, however, has indicated that it's not going to comply.

In a filing last week, federal prosecutors argued McCloud is relying on "irrelevant details contained in hearsay accounts," and that she's using the information to "embarrass and humiliate" Allen. Prosecutors stated in their filing that "these charges have no relevance to the charges against Kott or to Allen's character for truthfulness and are therefore inadmissible."

Still, among the documents made public last week are notes from interviews -- conducted by local and federal authorities in 2004 - of two women who claimed that Allen and/or his lawyer asked them to sign false statements saying they had never had sexual relationships with him.

One of the women alleges she was 14 years old when she started sleeping with Allen.

At the very least, it would seem that asking somebody to sign a false affidavit would speak to Allen's character and truthfulness, say nothing of the sex allegations themselves.

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U.S. District Judge Emmet G. Sullivan presided over Ted Stevens' trial in Washington, D.C., and the aftermath that led to the former senator's conviction being tossed. At one point during the botched case, he said that in his 25 years on the bench, he had "never seen mishandling and misconduct like what I have seen" in the Stevens case. He was referring to documents that federal prosecutors withheld from Stevens' lawyers, the general way prosecutors conducted themselves in the trial, and the government's handling of Allen. (Currently, six of those prosecutors are under review by a special investigator, and they are the same ones who were involved in the Alaska-based corruption trials.)

In spring, when U.S. Attorney General Eric Holder made the stunning decision to void the guilty verdict against Stevens, he said: "The Department of Justice must always ensure that any case in which it is involved is handled fairly and consistent with its commitment to justice."
That should hold true in Alaska as it does in Washington, D.C.

Contact Amanda Coyne at amanda_alaskadispatch.com