Anchorage Daily News

According to a transcript of an intercepted telephone call between Allen and Kott on May 31, 2006, Allen gave Kott pills for sleeping and for sex. Kott got them mixed up and complained he was up all night while his "old lady" slept beside him.

The remarkable transcript was prepared by the FBI and filed in court by Kott's attorneys to show U.S. District Judge John Sedwick what they didn't want the jury to see. The document was filed under seal Tuesday by Kott's attorneys, but quickly placed in the public file by Sedwick, who ruled there was no reason to keep it secret.

"Man, I've been having a hard time sleeping," Kott complained to Allen.

"So that worked pretty good," Allen said, laughing.

"Which ones are which?" said Kott.

"Goddamn it, I told you now, just use the white ones ... to sleep," Allen reminded him. "And the the goddamn, ah, brown or whatever they are, that's for (explicit language for sex), and the other one is for sleeping."

"Yeah, I thought I was taking the sleeping pill. Took the wrong one. Still got the white one," Kott said.

"You're something else," Allen said, laughing. "You're something else, Pete."

Jury selection in the bribery, extortion, fraud and conspiracy trial of Kott and codefendant Bruce Weyhrauch, a former state representative from Juneau, is scheduled to begin today.

But on Tuesday, after Sedwick handed the defendants two victories on other requests to exclude evidence, federal prosecutors said they may seek a rehearing or an appeal, which could put the case in limbo. They will make their argument during a conference at 8 this morning, before prospective jurors begin filing into the courtroom.

Sedwick ruled Tuesday that the government could not claim that Kott and Weyhrauch were required to disclose to fellow legislators or the public that both were seeking employment from Veco while they were voting on bills in which Veco had an interest. Alaska law has no such disclosure requirement, he said, though he also noted state law forbids legislators from voting when they face certain kinds of conflicts of interest.

Sedwick also threw out a request by federal prosecutors to bring in evidence of bad conduct by Kott as far back as 1999, when he began storing material at a Veco warehouse for his flooring business. The government also said Kott improperly received $12,000 in equipment from Bill Allen or Veco in 2002, a $5,000 payment in 2004, and a $1,000 payment made by Veco in 2003 to a Florida beauty pageant corporation to benefit one of Kott's relatives, as requested by Kott. The Eagle River Republican was speaker of the House in 2003 and 2004.

Sedwick said those allegations happened too far in the past to be relevant to the charges, which "mainly focused on legislative activities which took place in 2006."

One of Weyhrauch's attorneys, Doug Pope, said the rulings were significant victories for the defense. But the government may seek to overturn Sedwick's ruling on disclosure, it said in a filing Tuesday.

Bill Allen and former Veco vice president Rick Smith are expected to be key government witnesses. Both have pleaded guilty to bribing legislators and are cooperating with the government.

The evidence of Allen's pill dispensing to Kott was recorded on a wiretap of Allen's cell phone while the Legislature was in special session over oil taxes. Kott's lawyers say the conversation, and another between Kott and Smith about the "Corrupt Bastards Club," would be prejudicial.

"The use of sleeping pills and sexual enhancement pills will undoubtedly negatively impact the jury's opinion of Kott, particularly if he was taking those pills without a proper prescription," his attorneys argued. "It creates an impression of general law-breaking behavior. The evidence could also be used to suggest Kott is a person who pops pills, which is a very negative attack on character."

They go on to say: "The part of the conversation relating to accidentally taking the sexual enhancement pills is quite lewd. The tone and content of these conversations will likely impact the jury's opinion in a very negative way."

Three pages of Kott's May 29, 2006, conversation with Smith, also on a tapped cell phone, concern Kott's efforts to obtain 20 Veco hats embroidered or printed with "CBC." The letters refer to the Corrupt Bastards Club, an informal group of legislators who received large contributions or employment from Veco.

"Hey. How many of them hats you want CBC on the back?" Kott asked Smith.

After trying to figure out what Kott was talking about, it finally clicked, and Smith said 15 or 20.

"We gotta figure out who the club is," Smith said.

"Yeah," said Kott.

"Gotta get with Hawker," he said, referring to Rep. Mike Hawker, R-Anchorage.

"Yeah, I know," said Kott. "Yeah, the 20 might be a lot."

"Well, I mean, but then, you know, we need some for Bill (Allen) and, you know, and s--- like that," Smith said.

Hawker said Tuesday he had no idea why Smith was referring to him, but he knew about the "club."

"There was nothing nefarious involved," Hawker said. He was among a group of legislators, including Kott, and others who were joking one night in the bar at the Baranof Hotel in Juneau. A newspaper column had questioned whether campaign contributions from Veco to lawmakers created undue influence over the state's political process.

The joke was they were all part of some kind of "corrupt bastards club," Hawker said, and part of the joke was some of them were writing an increase in state oil taxes.

"At the time it was just gallows humor at best," Hawker said.

Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345. Reporter Sean Cockerham contributed to this story.