Anchorage Daily News

WASHINGTON -- Two of Sen. Ted Stevens' best friends went into a panic in 2006 when they learned a plumber had mailed a bill showing that one of them -- Veco Corp. chief executive Bill Allen -- had paid more than $1,000 of his own money to fix Stevens' boiler.

The Feb. 16, 2006, telephone conversation between Allen and Double Musky owner Bob Persons, intercepted in an FBI wiretap and played in court Tuesday, unveiled the two men plotting a cover-up of the plumber's honest transgression -- a scheme to first destroy the evidence, then create a cover story that would have required Stevens' participation.

"We need to get the guy at Chugach Sewer & Drain to make that disappear from his records," Persons told Allen. Then, Persons said, working out the plot as he spoke, Allen should get Stevens to write a check to him for the exact amount.

"You don't have to cash it -- just have it," Persons said. "You don't have to deposit it, just have to make a copy of it. ... And then if it ever did come up, you can say, 'I didn't deposit that? Hell, I know I did. I don't know where it went.' " Both men broke out in laughter at the thought of fooling a newspaper reporter or government investigator.

Jurors laughed too -- but it was like the last laugh at two men caught in the act.

There was no evidence presented that Stevens ever wrote the phony check, but the two friends expressed no doubts he would if asked.

The phone call was the closest thing so far to a smoking gun in Stevens' felony trial. It closed out the seventh day of testimony, giving jurors something to think about overnight as the government neared the conclusion of its case. Prosecutors may present the last of their witnesses today.

Stevens is accused of seven counts of failing to disclose more than $250,000 in gifts and favors, mainly from Allen and his Anchorage-based oil-field service company, Veco.

DEFENSE CROSS-EXAMINES ALLEN

Earlier Tuesday, Brendan Sullivan, Stevens' lead defense attorney, continued to tear into the government's case as he cross-examined Allen, who has already pleaded guilty to bribing state lawmakers in Alaska. Sullivan worked to leave jurors with the impression that Allen deliberately held back information from Stevens about bills, and that the senator would have paid them had he ever been sent an invoice.

Sullivan also sought to dismiss the idea that Veco got special benefits when Stevens came to the company's defense over a pipeline in Pakistan, a labor training program for Russians, a logistics contract with the National Science Foundation and support for a proposed natural gas pipeline.

Sullivan on Tuesday questioned Allen about his plea deal with the government and the risk his non-cooperation would be to the sale of Veco last year to CH2M Hill, the international engineering and construction firm based in Colorado. The company withheld $70 million from the cash it paid the owners of Veco -- Allen, his three children, and two top executives -- to protect against contingencies, including the possibility Veco itself would be indicted.

At one point, Sullivan all but accused Allen of lying on the witness stand about a remark Allen attributed to Persons. That came in testimony last week, when Allen told of receiving a handwritten note from Stevens in 2002 thanking him for renovating his home in Girdwood.

In that note, Stevens told Allen he wanted a bill for all of Veco's work. But Stevens also advised Allen to talk about the bill with Persons, a neighbor who has looked after Stevens' home for years.

When Allen did, he testified, Persons told him: "Don't worry about getting a bill -- Ted's just covering his ass."

The phone call four years later between Allen and Persons did nothing to discredit Allen's testimony.

By February 2006, the FBI was deep in its investigation of public corruption in Alaska, though nothing had surfaced publicly yet. The government had obtained wiretap warrants for all of Allen's phones and had been listening for months when the plumbing bill came up.

PLUMBING PROBLEM

In earlier testimony, Veco electrician Jack Billings said he had gotten called one evening to Stevens' home in Girdwood over a failure of the heating system. Stevens and Allen were there when he arrived from Anchorage.

Billings said he soon figured it was a plumbing problem, not electrical. It was late to call someone, but Allen told Billings to call his plumber: Charlie Hart of Chugach Sewer & Drain of Anchorage.

Hart didn't specialize in boilers, but he figured the problem was the boiler's circulating pump. He replaced it, but put the new one in backward.

"I got a call later -- it was Bill Allen. We didn't help anything -- it made the situation worse," Billings testified Sept. 30. Stevens had a fireplace to keep warm, and they decided to call Hart back on a non-overtime basis.

Hart, testifying Tuesday after Allen, said he reinstalled the pump and put in a new pressure tank and other parts. At Allen's request, he sent the $1,118 bill for the parts to Stevens by way of Persons. He sent the $1,080 bill for labor and travel time to Allen at his Veco office.

The labor bill falsely listed the job site as 1644 W. 11th Ave in Anchorage -- Allen's home. The parts bill sent to Stevens had this notation: "Repair Materials for Heating System. Labor paid by Bill."

INTERCEPTED PHONE CALLS

Three intercepted calls were played to the jury Tuesday, all of them related to that bill.

On Feb. 2, 2006, Allen spoke to Persons and told him how he had split the bill and planned to take care of the labor himself. In the same call, Persons discussed how famously tight Stevens was with his money, referring to something he heard from Stevens' wife, Catherine.

"As Catherine says, Ted gets hysterical when he has to spend his own money," Persons said. "The flip side of it is, he can't really afford to pay a bunch of money."

Two weeks later, Allen got a call from his secretary, Linda Croft. She said that Stevens had sent him an e-mail saying he just got his bill for parts from Chugach Sewer & Drain. "It says 'Labor paid by Bill,'" Stevens wrote. "I should pay those plumbers. Please have someone send me a bill."

When Allen spoke with Persons later that day, he told him about the e-mail.

"I faxed him a bill," Persons said. "Isn't that what you wanted me to do?"

"What did it say about me doing it?" Allen asked.

"It doesn't say anything," Persons said. But then he decided to take another look at the bill.

"Oh s---, I didn't even see this. Oh, 'Labor paid by Bill.' Ouch. I didn't see that. I'm sorry," Persons said. At least it went straight to Stevens' house and wasn't seen by anyone else, Persons said.

But Allen's secretary knew, and so did the plumber, the men realized.

"We don't need this thing floating around," Persons said. "You tell that guy that he needs to, if he's got this bill in a file that he needs to get rid of it."

Only briefly did the two men discuss getting Stevens to actually reimburse Allen for that $1,080 he paid. Rather, they decided to just tell Hart, the plumber, that happened.

"Make him understand that Ted's paying for everything," Persons said. "That's the safest thing, Bill."

That's when Persons came up with the phony check idea.

"Have Ted write you a check for that," Persons said.

"Huh?" said Allen.

"To have Ted write you a check for that. You don't have to cash it -- just have it."

"Yeah. Yeah," said Allen.

"And then if it ever comes up, say screw you, here's the check," Persons said.

"That's the thing to do it, right there."

"I'll call Ted and tell him, send you a check," Persons said.

The prosecution is expected to wrap up its case today, when the judge overseeing the trial will also hear a motion by Stevens' legal team for a mistrial.

Contact the reporters: rmauer@adn.com and ebolstad@adn.com.

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