Anchorage Daily News

WASHINGTON -- The Hawaii Democrat whom Sen. Ted Stevens calls his "brother" opened the charge Thursday in defense of the Alaska Republican's character and integrity.

Sen. Daniel Inouye, the first defense witness in Stevens' corruption trial and one of the few sitting senators to have served longer than Stevens, told jurors that fellow senators have "absolute faith" in his 84-year-old Republican friend. The two World War II veterans met when Stevens entered the Senate in 1968 and discovered they had many bonds, Inouye testified. They are so close that Stevens' youngest daughter, Lily, calls him "Uncle Dan."

"I can assure that his word is good, as far as I'm concerned, it's good enough to take to the bank," he said of Stevens.

Under cross examination, Inouye refused to be drawn into a conversation about what he would think if he learned a person he had met had told a lie under oath.

"I'm not inclined to respond to a hypothetical question," Inouye said. "I don't operate that way -- the people I meet have substance."

With Inouye, Stevens' legal team began its defense. Today, they plan to call another famous character witness, former Secretary of State Colin Powell. Following Inouye on Thursday were witnesses with some celebrity among Alaskans, like musher David Monson, the widower of Iditarod champion Susan Butcher, and the balladeer Hobo Jim.

Powell and Inouye are among at least 10 character witnesses that Stevens' lawyers said they hoped to introduce, but U.S. District Court Judge Emmet Sullivan said that many would be redundant. Most trial courts don't allow more than three, government lawyers argued, though Judge Sullivan said he might allow as many as five.

In eliciting testimony from a friendly witness, defense attorney Brendan Sullivan was engaged in a much different encounter with Inouye than the one Sullivan is famous for.

In the 1987 Iran-Contra hearings, Inouye was the committee chairman and Sullivan was the attorney for Olliver North, one of the key targets of the congressional investigation. Tired of hearing Sullivan answering for North, Inouye said that maybe the witness should speak for himself.

"Well, sir. I'm not a potted plant," Sullivan replied. "I'm here as the lawyer. That's my job."

SLED DOG'S WORTH

Stevens is charged with seven counts of filing false statements on financial disclosure forms he's required to submit each year as a U.S. senator -- each amounting to a lie on an oath signed with his own hand, said Nicholas Marsh, a trial attorney with the Justice Department's Public Integrity Section.

Stevens is accused of accepting more than $250,000 in gifts and home repairs, mostly from the defunct oil-field service company Veco and its former chief executive, Bill Allen, once a friend of Stevens and the star witness in the case against him.

Stevens' lawyers began to chip away at evidence prosecution witnesses have presented about gifts the senator is alleged to have received over the years. Thursday afternoon, they zeroed in on a sled dog bought for $1,000 at a 2003 auction.

In his opening statements to the jury, Brendan Sullivan told how Stevens got one of the dogs at an auction and was so smitten with the puppy that he bought another one for about $250. But the dogs were too much of a handful for Stevens in Washington, D.C., and he and his wife decided to send them back to Alaska, where Monson and Butcher cared for them. Stevens and his wife sent two $500 checks to Butcher for upkeep.

In an e-mail read Wednesday in court during the government's case, Stevens haggled with his friend, Bob Penney, over how much to value the dog on his financial disclosure paperwork, calling it a "GD disclosure form." The e-mails showed Stevens attempting to change the way he got the dog -- not as a $1,000 gift from Penney, the Anchorage real estate developer and sportfishing advocate who bid on the dog, but as a gift from the Kenai River Sportfishing Association, which Penney founded.

Long after he got the dog, Stevens asked Penney to turn his auction bid into a donation to the association so that the dog wouldn't appear to be worth as much.

Hobo Jim -- James Varsos -- testified that well-to-do bidders at the association's annual Kenai River Classic frequently bid up items out of all proportion because the money goes to charity. Varsos said he has donated his own $60 cowboy hats to the auction and has seen them go for as much as $450.

"I think most people went home with things they didn't really want," Varsos said of the auction.

Varsos, who helped out at the classic for about 10 years, picked up the puppy that was eventually auctioned to Stevens from the Clam Gulch kennel of musher Dean Osmar, an Iditarod champion.

Osmar described the female as the "runt" of a litter who would normally be shunned by mushers because it had blue eyes and white fur -- possible indicators of a genetic respiratory disease. It might have been worth $50 or $100 as a pet, he testified, though he donated it to the association.

After acquiring the blue-eyed female, Stevens bought another puppy from Osmar for $250. It was a better dog, he said.

But Taz and Keely proved too big a handful for the Stevenses in Washington. They asked Monson and Butcher for help.

"I agreed to take the sled dogs off their hands and take them back to Alaska," Monson testified.

VECO WELDER TESTIFIES

The final prosecution witness took the stand Thursday morning, just before the government rested its case against the Alaska Republican. David Anderson, a former welder who worked for Veco Corp. and supervised repairs that nearly doubled the size of Stevens' home in Girdwood, was not originally announced as a witness in the government case, but the judge allowed his testimony.

Anderson, who is Allen's nephew, was called after prosecutors had some of their evidence ruled inadmissible by Judge Sullivan.

Through a Veco account manager, the government presented evidence that Veco spent $188,000 on the Stevens remodel between 2000 and 2001.

But defense attorneys discovered in reviewing government evidence belatedly sent them that within that account manager's total were hours for Anderson and another Veco supervisor, Rocky Williams, that were worked elsewhere.

Judge Sullivan said the government knew some of those wages were inappropriately charged internally to the house project. As a sanction against the government, he told the jury to ignore the entire costs attributed to Williams and Anderson in the account manager's testimony.

On the witness stand Thursday morning, Anderson testified that he worked as much as 10 hours a day, six days a week on the house project. So did Williams, he said.

Anderson detailed the work he and Williams did on the home, including jacking it up to add a bottom story.

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

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