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Alaska News

From 9/1/2006: FBI raids Alaska legislative offices

This story was originally published on Sept. 1, 2006

Federal agents swarmed legislative offices around the state Thursday, executing search warrants in a coordinated series of raids that appeared to target the long-standing relationship between the oil field service company Veco and leading lawmakers.

The FBI reported making no arrests.

Above Anchorage's Fourth Avenue, FBI agents spent most of the afternoon behind the closed doors and drawn blinds of the fifth-floor offices of Senate President Ben Stevens and Senate Rules Committee Chairman John Cowdery, both Anchorage Republicans. Through slits in the blinds, one agent in Stevens' office, wearing rubber gloves, could be seen packing away evidence in a container.

In Juneau, tourists and residents were greeted with the extraordinary sight of FBI agents hauling out files from the Alaska State Capitol after searching offices there.

After the FBI searched his Wasilla office and questioned him, Rep. Vic Kohring, R-Wasilla, the chairman of the House Special Committee on Oil and Gas, said the investigation was focused on Veco.

"I fully cooperated and answered all their questions," Kohring said in a written statement. "I was told that I am not a target of the investigation and was asked not to discuss details of the interview."

On the 10th floor of the Frontier Building in Midtown Anchorage, where Veco has its headquarters, the FBI commandeered the glass-sided conference room of another federal agency that rents space there. In the room, Veco president Peter Leathard talked with agents from the FBI and IRS.

The FBI agent could be seen referring frequently to paperwork in a thick binder. Leathard leaned back in a chair, his back to the wall. Attorney Brian Doherty joined Leathard, first meeting with his client privately, then with the agents.

When they all emerged around 4:40 p.m., none would describe the inquiry.

"At this point, we really don't know," Leathard said, smiling as he turned to walk away. He and Doherty would not say more.

Other legislative offices known to have been searched Thursday included those of Reps. Pete Kott of Eagle River and Bruce Weyhrauch of Juneau, and Sen. Donny Olson of Nome. Kott, a former House speaker, and Weyhrauch are Republicans. Olson is the only Democrat in the group.

FBI spokesman Eric Gonzalez said federal agents executed about 20 search warrants Thursday, not all in legislative offices. The warrants were executed in Anchorage, Juneau, Wasilla, Eagle River and Girdwood, he said.

Gonzalez said he was not at liberty to disclose the target of the investigation, how or when it began, or whether it was likely to result in criminal charges.

"It's an ongoing investigation is all I can say," Gonzalez said.

No one would say what was the target of the Girdwood warrant. Ben Stevens' father, U.S. Sen. Ted Stevens, has a home and office there. Both were quiet and dark Tuesday afternoon. A neighbor said she saw no unusual activity at the Stevens home. A postal clerk reported the same for Stevens' office, which is in the Girdwood post office.

A spokesman for Ted Stevens didn't return several calls or an e-mail from a reporter.

Sen. Tom Wagoner, R-Kenai, arrived at the legislative offices at 716 W. Fourth Ave. in Anchorage shortly before noon for a Resources Committee meeting.

"The place was crawling with FBI," Wagoner said. When he tried to enter Cowdery's office, an agent stopped him at the door, Wagoner said.

Wagoner said a senior legislative aide who was present when the warrant was served told him they were looking for files that had to do with Veco and the oil tax legislation recently passed by lawmakers in special session.

Ray Metcalfe, a former legislator and the founder of the independent Republican Moderate Party, said he has been trying to get the authorities interested in what he described as the "corrupt" relationship between Veco and the Republican-led Legislature, principally Ben Stevens.

"I put all the stuff in front of federal prosecutors a year and a half ago," Metcalfe said Thursday, clearly relishing the turn of events. "I laid hundreds of pages of detailed information alleging bribery, and I distributed it to federal authorities, I distributed it to the U.S. Attorney's office, I distributed it to the (state attorney general's) Office of Special Prosecutions, and we held a demonstration in front of the attorney general's office that hardly anyone showed up for."

Metcalfe attempted to initiate a recall campaign against Stevens, but his effort was rejected by Lt. Gov. Loren Leman on legal grounds. After first announcing he'd run for re-election in November, Stevens changed his mind in June and opted to retire.

Ben Stevens didn't return calls placed to his home, his personal office or his legislative office. Messages left at his attorney's office and cell phone also weren't returned.

In disclosures he was required to file as a legislator, Stevens said he was paid $243,000 over the last five years as a "consultant" to Veco. Whenever he was asked to describe what he did for the money, Stevens refused to answer. The company also refused to say.

Metcalfe has argued in his complaints that the money amounted to a bribe -- that Stevens has done Veco's work on many fronts, including attempting to spend Alaska Permanent Fund earnings for state government operations to reduce the need for oil taxes and pushing the industry's favored gas pipeline proposal.

There was no indication that the investigators were looking into bribery allegations.

Tamara Cook, a lawyer who heads the nonpartisan legal services division of the Legislature, said Thursday evening that she reviewed a couple of the search warrants at the request of legislators or aides upon whom they were served.

The search warrants allowed the FBI to search computers and office files including financial records, she said. The warrants named Veco Corp., she said, but she could not say whether Veco was a target or whether the investigation concerned oil taxes, its failed push to build a private prison in Alaska or something else.

"They were fairly broad," she said.

Staff members asked her whether they could open up locked legislative offices. After reviewing the warrants and believing them valid, Cook advised them to open offices either with a warrant or with a legislator's consent.

On the fifth floor of the Anchorage legislative building, reporters lingered in the hallway but were ordered by federal agents and legislative staff out of Stevens' and Cowdery's offices on the north side of the building.

Through gaps in the blinds in Cowdery's office, agents could be seen systematically going through each folder in a large file cabinet, occasionally laying documents aside and taking digital photographs of them before putting them back in place. In Stevens' office, an agent appeared drawn to something on the back of a framed picture wrapped in protective plastic.

The documents included what appeared to be printouts of e-mails, memos and other correspondence. Agents also took several photographs of various other items in Cowdery's office.

Cowdery was interviewed by several agents in a conference room around 11:30 a.m. As the elderly legislator walked back to his office with the assistance of a walker, reporters asked what he was questioned about.

"You ask them," he said.

Asked whether he was under investigation himself, he said, "I don't think so."

Stevens was not in his office during the search, but his chief of staff, Cheryl Sutton, and two other aides were.

They stood by as the agents searched the office and took photographs. The aides left the office just after 6 p.m. and would not answer questions.

Olson, a pilot, was flying hunters out of Nome Thursday when agents tried to serve warrants at offices in Anchorage and Juneau. He later gave permission for the searches, an aide said.

It was unclear how much evidence agents took out of the Anchorage offices. When they packed up and left after 6 p.m., several appeared to be carrying little more than the equipment they brought into the building earlier in the day.

Earlier in the day, agents were seen carrying a small scanner-printer among the offices that were searched. Through the day, agents came and went. Many arrived wearing day packs and badges dangling from their belts, while others wheeled large molded containers labeled for one office or another.

***

The following legislators’ offices are known to have been searched Thursday by federal agents.

* Sen. Ben Stevens, R-Anchorage

* Sen. John Cowdery, R-Anchorage

* Sen. Donald Olson, D-Nome

* Rep. Vic Kohring, R-Wasilla

* Rep. Bruce Weyhrauch, R-Juneau

* Rep. Pete Kott, R-Eagle River

Procedure for obtaining a search warrant

Federal law enforcement agencies aren't saying anything about why they searched legislative offices around the state Thursday. State legislators, who are immune from some state investigations while the Legislature is in session, have no special immunity from a federal search warrant. The normal procedure for getting permission to search anyone's home or office includes:

* A law enforcement officer prepares an application for a search warrant. In high-profile cases like this one, the application is usually reviewed by the Department of Justice.

* The application must specify that more likely than not a specified crime has been committed and offer facts to demonstrate that, more probably than not, evidence of the crime will be found in the place to be searched.

* The law enforcement officer presents the application to a federal magistrate in a closed hearing, including affidavits signed by investigators, recounting the facts and including a list of items to be seized.

* A copy of the search warrant must be left at the place searched. The person served with the warrant may make it public if he wishes.

-- Anchorage Daily News

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