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Key players contest FBI whistle-blower allegations

As the Justice Department prepares its official response to the FBI whistle-blower complaint that surfaced in the case of former U.S. Sen. Ted Stevens, people with first-hand knowledge of some of its issues, including some named in the complaint, say it represents overblown concerns of an inexperienced agent.

The unusual complaint was brought by FBI agent Chad Joy, one of the key investigators in the five-year-old federal inquiry into corruption in Alaska politics. He accused the lead agent in the broad investigation and several prosecutors in the Stevens case of wrongdoing.

One former confidential source in the corruption investigation took issue with some of the facts alleged in the complaint by Joy. The source, Frank Prewitt, a former state corrections commissioner, said in an interview recently that he never observed FBI case agent Mary Beth Kepner, the chief target of the complaint, cross the line into improper or unethical conduct.

And the retired second-in-command of the Anchorage FBI office, Robert Burnham, described Kepner as a top-notch, creative investigator. Joy, her co-case agent turned antagonist, was meticulous with numbers but inexperienced and uncomfortable with the discretion that agents in the field sometimes need, Burnham said.

The opinions of Prewitt and Burnham contrast sharply with those of lawyers representing Stevens, the former Alaska senator who was convicted of seven felony disclosure crimes in October in a case investigated by Kepner, Joy and others. Stevens' attorneys cite Joy's complaint as evidence of government misconduct. They are using the complaint in their efforts to win a new trial or outright dismissal of charges against Stevens.

Joy's eight-page complaint, written in late November and made public by the trial judge in Stevens' case on Dec. 22, contains dozens of allegations of rule bending and possible criminal violations by Kepner and the prosecutors who took Stevens to trial.

Joy's charges are under investigation by the Justice Department's Office of Professional Responsibility. The complaint has also interrupted the ongoing corruption investigation, which has so far yielded 10 convictions. While FBI officials won't talk about their management of the investigation, code-named "Polar Pen." Joy said in a supplemental filing to his complaint that several of Kepner's key sources have been reassigned to other agents and that her role has changed.

As the Anchorage bureau office and prosecutors scramble to respond to the post-trial developments in the Stevens case and the Justice Department investigation, it's unclear what the ultimate effect will be. At least three current or former elected officials have been identified as still under investigation: U.S. Rep. Don Young, former state Senate President Ben Stevens and former state Sen. Jerry Ward.

One or more federal grand juries are still actively involved in the corruption investigation, according to a Jan. 16 court order in the case of Jim Clark, chief of staff for former Gov. Frank Murkowski. Clark is cooperating and awaiting sentencing.

Stevens' lawyers said Joy's complaint contains strong evidence that government misconduct tainted the investigation and the trial, not just by Kepner but prosecutors too.

"On their face these allegations suggest that the entire POLAR PEN investigation -- which Kepner spearheaded as the government's lead case agent, and which led to the Stevens indictment -- was corruptly handled," the defense attorneys said in their motion for a new trial. "If the agent in charge accepted favors from witnesses, did favors for witnesses, inappropriately revealed information to witnesses and the media, and failed to properly catalog and store documents, then the government's factual presentation and its discovery cannot be trusted."

Neither Kepner, Joy, prosecutors in the case, nor other FBI or Justice Department officials would comment directly on the allegations, saying they will answer in court and in the official investigation.

But the investigation doesn't stop others from talking, and some agreed to be interviewed about the complaint.


According to his complaint, Anchorage was Joy's first FBI assignment. He wrote that he was assigned to the corruption investigation in 2004, shortly after his arrival. He became deeply involved in managing sources of his own and assisting the prosecution of Stevens.

Kepner served in the field office in Juneau, where her husband, Floyd Spinner, was a city cop. For part of her seven years there, a second agent was assigned to the Juneau office, but by necessity she often worked solo, Burnham said.

Burnham was the assistant special agent in charge in Anchorage from 2000 to 2006. He retired from the FBI in 2007 and is now working in private security in the West. He asked in a telephone interview that his actual location not be disclosed because of his prior law-enforcement work.

Kepner, now a 17-year veteran of the bureau, was responsible for initiating and expanding the corruption investigation, and she pushed hard to get the Alaska FBI headquarters in Anchorage to provide resources for the case, Burnham said. That was difficult until Joy arrived with other transferring agents in January 2004.

While other agents had assisted Kepner from time to time, Joy was the first besides Kepner herself to be assigned to the corruption case full-time, Burnham said.

"He's got a financial background and I'm sure that some of our thinking was that he would be meticulous, which is what we needed to handle some of the admin responsibilities that go with cases like this," said Burnham. "Since Mary Beth was quite experienced and I had complete faith in her direct supervisor (white-collar-crime squad chief Colton Seale), it seemed like a pretty good match as far as what we thought his talents would be and what the need was for."

In his 2008 book "Last Bridge to Nowhere," Prewitt described how he became Kepner's "Confidential Source One" in April 2004. The overall investigation was still small then and focused on an influence scheme to get the state to accommodate a private prison in Alaska -- hence the FBI code name "Polar Pen."

The name seemed incongruous later when the investigation expanded to include illegal efforts by the oil-field service company Veco Corp. and its chief executive Bill Allen to dominate state politics, promote construction of a natural gas pipeline under terms favored by the oil industry, and to influence Washington.

The bigger case materialized "because Mary Beth was so dogged and determined and so creative in developing cooperating witnesses, cooperating subjects," said Burnham, who was her direct supervisor when the inquiry began.

First a target of the investigation then the subject of a search warrant, Prewitt, hired by the companies promoting the private prison, eventually learned he would face no charges. Kepner asked him to voluntarily cooperate. He agreed.

His book describes how the investigation dominated his life over the next four years. He secretly recorded conversations, attempted to turn other witnesses and consulted with agents and prosecutors about the politics, personalities and government of Alaska, he wrote. But Prewitt acknowledges his book embellishes the truth with fiction, making it a less-than-reliable text.

In his complaint, Joy says Kepner became too close to Prewitt and his wife, Vicki, and other confidential sources. He accused Kepner of accepting "multiple things of value from sources," specifically artwork, help with house hunting, and a job for her husband. Kepner also revealed too many of the secrets of the investigation to them, Joy charged.

Allegations concerning Kepner's relationship with Frank and Vicki Prewitt appear on four of the complaint's eight pages.

Veco's Allen is mentioned even more. Allen and Prewitt are among a half dozen confidential sources whom Joy said were mismanaged by Kepner.

For instance, Joy thought it was wrong for Kepner to meet Allen alone in a hotel room when both were in Washington for the Stevens trial. He reported that Kepner wore a skirt instead of her usual pants as a "surprise/present" for Allen when he testified.

Stevens' defense has leaped on those allegations as evidence that Kepner and Allen had a sexual relationship, though Joy made no such claim.

Allen, through his Anchorage attorney Bob Bundy, declined to address any of Joy's allegations. Bundy said it would be inappropriate for him to discuss the complaint because of Allen's status as a cooperating witness. Allen pleaded guilty to conspiracy, bribery and tax charges and is awaiting sentencing.

But overall, said Bundy, a former U.S. Attorney, Joy's complaint appears baseless as it relates to Allen.

"What bothers me tremendously is that I do not believe there was ever any kind of improper relationship between Mary Beth Kepner and Bill Allen, from everything I was ever able to see," Bundy said.

Burnham said there is nothing in FBI policy that would prohibit an agent from meeting a source alone.

Eric Gonzalez, chief counsel for the FBI in Anchorage and the agency's local spokesman, said he couldn't comment on Joy's complaint. But speaking in general terms, there are no restrictions on where agents can meet sources, he said. They can meet one-on-one, can go to the home of a source, can eat out or share a meal at the source's home, if one is offered.

Successful agents work hard to cultivate good sources, Gonzalez said.

"You need to be very personable. Your sources have to trust you. And, you know, it's a relationship," Gonzalez said.

Prewitt's name was blacked out in the copy of Joy's complaint made public by the judge who heard Stevens' case. But in a recent interview in their South Anchorage home, Frank and Vicki Prewitt said their identities were unmistakable in the document.


Among Joy's specific complaints are assertions that Kepner ate dinner or lunch with Prewitt and his wife at their home on many occasions, and met with Prewitt without another agent being present -- facts that would appear to be of no issue based on FBI policies. In any event, the Prewitts dismissed those claims as no big deal.

"Yes, I had lots of meetings with Mary Beth alone," Prewitt said. Sometimes his father-in-law was in his apartment in their home, sometimes Vicki Prewitt was there. And sometimes Kepner's husband picked her up.

"Any suggestion that agent Kepner and I were improperly close was preposterous," he said.

And it's true, he said, that he discussed cases with Kepner -- and with other agents and prosecutors too.

"Of course I discussed details because I was part of the investigative team involved in all of those cases," Frank Prewitt said. "They were always very careful not to say anything more about any ongoing investigation than they needed to get something out of my head."

"Chad was a friend too," Frank Prewitt added.

Joy's complaint included an assertion that Kepner provided the Prewitts with "detailed information about my personal background, my (wife) and (children) without my permission knowing I would not have allowed her to do so."

But the Prewitts said it was Joy himself who revealed those details -- to their teenage daughter while Frank Prewitt was talking to Kepner.

"That's how we knew about his family," Vicki Prewitt said.

As the focus of her work shifted to Anchorage, Kepner was spending increasing amounts of time living out of a suitcase, Prewitt said. In the summer of 2006, she and her husband, Spinner, moved to Anchorage.

"When Kepner moved from Juneau to Anchorage, Kepner utilized (Prewitt's wife) to locate homes," Joy said in his complaint, noting that Vicki Prewitt was a licensed real estate agent.

The allegation contains a partial truth, but the implication that she did professional or business favors for Kepner is wrong, Vicki Prewitt said. When she learned that Kepner was moving, it was natural for her to try to help, she said.

"I'm an Alaskan. I network," she said. "I just said my favorite builder is selling his home soon." The builder, Larry McBain, builds custom houses, occupies them for a time, then sells them, she said. The Prewitts knew McBain because he had built an addition on their home.

"He's an agent. He lists his own houses," Vicki Prewitt said.

She said she introduced Kepner and Spinner to McBain, but the sides came to terms on their own. Vicki Prewitt said McBain offered her a commission but she turned it down. Though she had a current license, she no longer was an active agent, she said.

Vicki Prewitt said that Joy's assertion that she showed Kepner multiple homes is wrong.

"I knew somebody. I didn't act as an agent. I didn't receive any money," Vicki Prewitt said.

In a telephone interview, McBain said he sold the couple the house on a view lot on the upper Hillside in August 2006 for $445,000. He described the call from Vicki Prewitt as "just a coincidence" a couple weeks before he planned to list the house.

"I didn't pay anything to Vicki. There was no referral fee, nothing," McBain said. And he didn't lower the price of the house because he didn't have the expense of an agent, he said -- Kepner and her husband paid very close to the asking price. It was still a sellers' market then, he said.

"I ended up with all the proceeds from the sale of the house," McBain said. "There was no benefit to (Kepner and her husband) at all." If anyone was done a favor by Vicki Prewitt, he said, it was him.

A few weeks ago, two FBI agents interviewed McBain about the transaction. He told them the "same thing I'm telling you," he said.

Joy also complained about a gift from the Prewitts to Kepner. Vicki Prewitt "drew and provided Kepner a large original drawing of Kepner's dog as a gift. This artwork is hanging on a wall in Kepner's home near her stairs."

Vicki Prewitt, an art major in college, said that after painting part-time over the years, she has found her niche as a painter of dog portraits and wildlife in watercolor. The Prewitts run Rae'vens Brush studio (her middle name is Rae) from their home.

For Christmas 2007, she said, she painted some 30 dog portraits for friends and relatives, "every single person I knew, whether they wanted it or not." She painted Kepner's yellow Lab, Ranger, from a photo, and surprised Kepner and Spinner with the gift.


What happened next is the subject of a long passage toward the end of Prewitt's book. Just after the 2008 new year, Kepner asked Prewitt to meet her at a South Anchorage coffee shop. At the table, she said, someone in the FBI learned about the gift and expressed a concern, according to the book.

Kepner wrote a check for the picture. Vicki Prewitt remembers it as $300.

In his complaint, Joy said he was unhappy to have been mentioned several times in Prewitt's book, and he thought that Prewitt revealed too much about the case and named suspects who hadn't been charged. Joy also expressed displeasure that Prewitt complained about him to the FBI after he formally closed Prewitt as a source.

Prewitt said he felt mistreated in that final encounter with Joy and another agent about two months ago. He said Joy told him the FBI was ending its relationship with him because he "betrayed" the agency with his book.

Prewitt said there was nothing improper in his book, and he felt unceremoniously dumped after the investigation consumed four years of his life.

Prewitt declined to provide a copy of the letter he sent about Joy to FBI director Robert Mueller.

Another claim by Joy, that a different source of Kepner's got Spinner a job after he moved from Juneau, could only be partially checked. The source's name was blacked out in the complaint and his or her identity couldn't be determined.

"Source gave Kepner's husband his current job as a security guard at the Port of Anchorage," Joy complained.

Security at the port is run by an independent contractor, Doyon Universal Services. The port director, former Gov. Bill Sheffield, is a friend of Stevens and has criticized the federal prosecution. Sheffield said Doyon has full authority to hire security guards. He said he asked around, and no one reported interference in the hiring of Spinner, and he said he played no role.

"He was a cop in Juneau and they put out a search for people and he qualified and they hired him," Sheffield said.

Bruce Lester, a Doyon employee and Spinner's supervisor at the port, said there was nothing unusual in his hire. "There was no favoritism. He met our requirements and that's all I'm going to say."

Bob Kean, the Doyon Universal vice president over the security division, said he read a copy Joy's complaint from the Internet and termed its reference to Spinner's hire as "truly one of the most bizarre allegations I've ever seen."

No one lobbied Doyon for or against Spinner, he said.

"There is no credibility to that allegation. Floyd was hired on his own skills and prior job experience. We had no idea Mary Beth was an agent till after he was hired. The hiring authority at this office had no idea his wife was an agent, nor would it have mattered," Kean said.


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