As U.S. Sen. Ted Stevens's trial begins this week, the country will learn about a dark side to the Last Frontier, a world where oil and politics blurred the day wildcatters struck it big at Prudhoe Bay, the nation's most prolific oil field. Forty years hence, the sour relationship has resulted in federal indictments and convictions of Alaska politicians, oilmen, a lobbyist and the chief of staff of a former governor.
Alaska's friendship with oil, which funds about 90 percent of state government, has touched many of its most prominent leaders over the past decade, often in the form of campaign contributions from Bill Allen, once a prominent oil executive who owned VECO Corp. Lawmakers who took his contributions over the years included Stevens, Don Young (the state's lone U.S. House member), former governors Frank Murkowski and Tony Knowles, a Democrat, and even Gov. Sarah Palin, Sen. John McCain's vice-presidential running mate who has cast herself as a maverick reformer who cleaned up Alaska politics.
Allen, a cooperating federal witness who is expected to testify against Stevens, was long the center of this political-oil world, and his company's questionable straw contributions and secret meetings with state politicians were well-known among insiders. For more than a quarter-century, Allen reigned as one of Alaska's most influential businessmen. A high-school drop out, a foul-mouthed son of fruit pickers, a gruff yet handsome man who'd cut his teeth in the dusty gas fields of New Mexico, Allen founded VECO in 1968 and grew it into the largest Alaska-based oilfield services business.
VECO eventually became a $1 billion, worldwide operation, with oil and construction contracts in Russia, Abu Dhabi, Syria, Sudan, Barbados and other countries. VECO contracted with some of the world's largest oil producers: ExxonMobil, BP and ConocoPhillips - the "three big boys," as Allen often referred to them.
Allen briefly owned the Anchorage Times before selling it in 1992 to the Anchorage Daily News, the state's largest newspaper. After folding the paper, Allen funded a staff of conservative writers and a half-page of editorial space in the Daily News until May 2007, offering up a daily dose of columns that routinely promoted industry and the Republican Party.
He was also heavily involved in politics, contributing hundreds of thousands of dollars to Alaska lawmakers sympathetic to his industry. Among those who took his contributions was Palin, who received $5,000 from Allen and VECO executives in late 2001 as she was readying to run for lieutenant governor. Palin lost the race.
Allen's downfall came in May 2007 when he pleaded guilty to bribery, conspiracy and other charges. In 2006, while the Alaska Legislature was debating raising taxes on the oil industry for the first time since 1989, the FBI secretly documented Allen as he bribed key lawmakers in a scheme to influence the vote and keep the tax hike to a minimum. He has since said that he was trying to look out for his clients - the oil producers - which VECO depended on for contracts.
Allen has also admitted to paying for labor and materials to remodel Stevens's house in 2000. Eight years ago, Allen dispatched a crew of VECO employees to help jack up Stevens's small, weather-beaten house and build a new floor beneath it. The Feds claim Stevens didn't pay all of the construction bills. He's also accused of accepting unreported gifts from Allen, including a Viking gas grill and a 1999 Land Rover Discovery, which Stevens got in return for giving Allen his 1964 Ford Mustang and $5,000.
At the time of the house renovation, Stevens was at the peak of his political power, chairing the Senate Appropriations Committee in a Republican-controlled Senate and overseeing the allocation of billions of dollars of federal spending. Although he is not charged with bribery, prosecutors have alleged in court filings that Stevens helped VECO secure government contracts and used his seniority in Washington to advocate for a multibillion-dollar natural gas pipeline, a massive project from which Allen's company stood to benefit.
Often described by friends as generous and loyal, Allen had another side to him. Those who knew him during his heyday say he was the Tony Soprano of the state's lifeblood industry, leading a ragtag crew of roughnecks, executives and family members. Details have emerged of Allen's personal life since he began cooperating with the government, including allegations of having sex with minors and that he was plotting to kill his nephew, the foreman on the senator's home remodeling project.
Last fall, while testifying during the trials of two former state representatives he admitted to bribing, Allen accused Dave Anderson, the nephew, of blackmailing him over Stevens's project. When asked on the stand if he'd wanted his nephew dead, Allen said 'no', but he did say he'd wanted to rough him up.
In interviews over the past year, Anderson has denied blackmailing Allen but says that Allen never believed him and threatened to kill him on more than one occasion. "I had threats against me that I was going to be floating in the inlet," said Anderson. "This was the Alaska mafia."