Anchorage Daily News

WASHINGTON - In secretly recorded telephone conversations played in court today, Sen. Ted Stevens denied wrongdoing and cursed at the federal agents who were raiding homes and offices in Alaska as part of a sweeping corruption probe.

"I don't know what the (expletive) these guys are doing. We'll have to figure that out later," Stevens said to Bill Allen, chief executive of the oil services firm Veco Corp.

But Stevens also offered up advice on maintaining a good attitude in the face of the investigation to Allen, the man who - unknown to Stevens -- had agreed to testify against the senator in exchange for leniency in his own sentencing and the promise prosecutors wouldn't target his children.

They needed to maintain the attitude that "these guys can't really hurt us," Stevens said to Allen.

"They're not going to shoot us; it's not Iraq, so what the hell," Stevens said. "The worst that can happen to us is we wind up with a bunch of legal fees and might lose, and we might have to pay a little fine, might have to serve a little time in jail. I hope to Christ it never gets to that, and I don't think it will."

"I'm developing the attitude that I don't think I did anything wrong, so I'm going to go right through my life and keep doing what I think is right," the senator said.

Two years after that conversation, Stevens, now 84 and up for re-election, is on trial for taking more than $250,000 in gifts - chiefly from Veco -- and lying about them on his U.S. Senate financial disclosure forms.

The first of the three recordings played today in court as part of Allen's testimony was made Aug. 31, 2006. That was one day after the FBI searched Allen's home and office and he agreed to cooperate with investigators in the Alaska corruption investigation. In 2007, Allen pleaded guilty to bribing state lawmakers.

In conversations played in court, Stevens told Allen the investigation was weighing on his mind so heavily that he wasn't sleeping well.

"Well, I'm not getting much sleep when I think about all this (expletive) that's going down, about four hours a night," Stevens said in the 2006 phone call. "But I'm going to survive. I just can't figure out why these (expletive) are doing this thing to our friends."

The Alaska Republican also was equally insistent he had done no wrong, telling Allen that his own lawyers had warned him about Martha Stewart, who Stevens described as going to prison not for what she had done but because "she lied about a conversation she had with somebody."

"I don't think we've done anything wrong, Bill, I can tell you right now," Stevens said. "I told my lawyers I can't think of a thing of we've done that's wrong."

On cross examination later in the day, Stevens' main lawyer, Brendan Sullivan, zeroed in quickly on the heart of their defense strategy: The senator is an honorable man who pays his debts and would have written a check for the home renovations had he known he owed Veco or Allen any money.

"You never tried to bribe Sen. Ted Stevens, did you, sir?"

"No," Allen said.

"You knew you couldn't bribe Sen. Ted Stevens, could you, sir?"

"No."

Allen's testimony, which is at the center of the trial against Stevens, began last week. The trial nearly derailed Thursday after Stevens' lawyers accused prosecutors of hiding evidence that Allen might have said things that would have helped Stevens win his case. They included notes from an FBI interview in which Allen told the investigator he thought Stevens would have paid a bill had he ever sent him one.

U.S. District Judge Emmet Sullivan, furious with the government team, ruled that prosecutors had bungled the evidence but that there was not enough misconduct to declare a mistrial or throw out the charges.

The trial, on hold for two days last week, restarted this morning with Allen's testimony. Before they played the audio recordings, prosecutor Joe Bottini walked Allen through a series of questions about gifts he'd given Stevens, including furniture, a bed and free labor on repairs to his boiler in 2006.

Allen testified about fixing the boiler in 2006 and how when he got the bill from Chugach Sewer and Drain, he didn't think it was right for Stevens to have to pay the labor costs since the plumber had screwed up the installation. The invoice read, "Labor paid by Bill."

That caused problems, Allen testified.

"I didn't want that saying that I was going to take care of the labor," he said, saying that he talked to mutual friend of Stevens' and his, Bob Persons, about the invoice. "It's going to be a mess, I didn't want this invoice going around for everybody, like a secretary, and Chugach Sewer and Drain."

Stevens did inquire about the bill, Allen said, but he never gave it to him.

"Did he ever ask you how much the labor charges were?" Bottini asked.

"Not that I can remember, no," Allen said.

But Stevens' attorney elicited a slightly different response from Allen when he asked about the exact same invoice.

"When Ted Stevens saw that notation, on the bill that he got in Washington, he called your secretary, Linda Croft, and told her to tell you he wanted the full bill, didn't he?" Brendan Sullivan asked.

"Yes," Allen said.

"And your secretary called you and told you exactly what Ted Stevens said, am I correct?"

"Yes," Allen said.

Brendan Sullivan also asked him whether Stevens insisted on paying his share when they dined together, and whether the senator reimbursed Allen when he flew on a Veco charter. He also brought up the racehorse stake the two had with other partners.

"Isn't it true that with respect to those little ventures you had, Ted Stevens always insisted on paying all of them money that was properly his share?"

"Yes," Allen said.

Stevens' lawyer also asked Allen whether he had told FBI agents that Stevens would he have paid a bill if he sent him an invoice. "I had no idea how much, but if it had been an invoice that was fair, I think Ted would have paid it," he said.

The awkward question-and-answer session was slowed by Allen's claims he was having difficulty hearing through the voice-amplification system he was using. He also sparred with Brendan Sullivan.

"You're not going to get me mad, are you?" Allen said.

"No," Sullivan said, adding that Allen would know if he were trying to provoke him.

"You're not going to get me mad," Allen said, smiling.

But Judge Sullivan was suspicious about Allen's demeanor and, once the jury had gone home for the day, called out to Allen's lawyer, Robert Bundy of Anchorage, in the audience. Bundy was signaling to Allen, the judge said, and threatened to hold him in contempt. He also suggested that Allen wasn't being entirely truthful about his hearing problems.

"It's entirely inappropriate; I can't imagine an attorney doing that," the judge said, adding later, "It's clear to me what I saw. It's really disturbing."

Bottini, who is an assistant U.S. attorney in Anchorage, vouched for Bundy and said he had known him for years. He "would be quite surprised if that was an intentional gesture on his part," Bottini said. It didn't appear Allen was looking at Bundy at the time.

Outside the courtroom, Stevens' lawyers continued to hammer at Allen's credibility as a witness, filing a second motion late Sunday asking the judge to declare a mistrial. This time, they accuse the prosecutors of deliberate misconduct and said they've manipulated Allen to elicit the testimony most damaging to Stevens.

Judge Sullivan will hold a hearing Tuesday or Wednesday on the new request for a mistrial. The judge has already twice reprimanded the prosecution team. He earlier became upset when the government sent a key witness home to Alaska without testifying and without informing the court or defense until the man left town. Prosecutors said the man, Rocky Williams, a foreman on the project to expand Stevens' home in Girdwood, was seriously ill.

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