Former Veco Corp. chief executive Bill Allen, on the witness stand for a second day Monday, revealed that his nephew tried to blackmail him over work done on U.S. Sen. Ted Stevens' home.
That bombshell, a side issue to the main event, came as one of a number of developments Monday in the public corruption trial of former state Rep. Vic Kohring, a Wasilla Republican. Among tidbits presented to jurors:
• A video from February 2005 showed Kohring talking about the possibility of consulting for Veco. It was secretly recorded by Frank Prewitt, then a consultant for the private prison firm Cornell Cos. who was working undercover for the FBI, unknown to his employer.
• A document taken off Kohring's legislative computer titled "Red Carpet List" named his favored office visitors, in four categories: lobbyists, friends, supporters, other. Allen and former Veco vice president Rick Smith were included as "supporters" but not friends. That cuts into one of the main defense arguments, that money given to Kohring by Veco executives was just a gift from friends, not a calculated bribe as prosecutors assert.
• Kohring told FBI agents in a lengthy interview during the Aug. 31, 2006, search of his Wasilla legislative office that he had accepted money from Allen and Smith for his own personal use, as well as campaign contributions. After he thought about it awhile, he described the money as a gift, FBI agent Alan Vanderploeg told jurors.
At day's end, prosecutors rested their case. To wrap up the government's evidence against Kohring, they called a flurry of quick witnesses: state Sen. Tom Wagoner, R-Kenai, who talked about a dustup from a 2003 oil bill; the legislative ethics administrator; and a couple of FBI agents.
Allen decided to cooperate with the feds the day he was first confronted by the FBI, on Aug. 30, 2006. The next day, offices of six legislators were searched by the FBI. He said he was shown the FBI's secretly made recordings, which are the backbone of the government case.
Prosecutor Joe Bottini asked Allen if seeing the recording from March 30, 2006, in which Allen hands money to Kohring, factored into his decision to cooperate.
Yes, Allen answered.
Why? Bottini said.
"I knew that was ... illegal, what I done," Allen testified.
Over the course of the day, the defense tried to discredit Allen, raise questions about the money given to Kohring and show that in the scheme of things, Kohring was a bit player.
Allen's heated relationship with his nephew, Dave Anderson, first came into public view last month in the corruption trial of former House Speaker Pete Kott. In that trial, the defense pushed Allen on whether he had threatened to have Anderson killed because of the blackmail -- but never asked what the blackmail was all about.
On Monday, Kohring's defense lawyer, John Henry Browne of Seattle, brought up the blackmail anew.
"I was not going to kill him, no," Allen said, as he did in the earlier trial.
Allen, who suffered a head injury in a 2001 motorcycle crash and struggles with words, seemed less addled on the stand than he had been late Friday afternoon.
What was Anderson blackmailing him about? Browne asked.
"Ted Stevens' house," Allen answered.
U.S. Sen. Ted Stevens' official residence, a home in Girdwood, doubled in size during a renovation overseen by Veco in 2000. The Daily News reported in May that the remodel, and Veco's role in it, were part of the far-reaching, ongoing investigation into public corruption in Alaska. In July, FBI and IRS agents spent nearly 12 hours searching the house and documenting the addition. Stevens has denied wrongdoing and has said he paid the bills that were given to him.
Robert Williams, a Veco employee who supervised construction on the house, said in an interview last month that Anderson was a metal worker who helped construct the steel staircase for the Girdwood house.
In court on Monday, Browne asked Allen to confirm that Veco paid for the renovation. Allen said he didn't know what it cost.
Was it a gift to Sen. Stevens? Browne asked.
No, Allen said.
"I didn't know how much the house cost, and I still don't know," Allen said.
Browne asked Allen whether he had cooperated with the government in its investigation into Ted Stevens "and the money Veco gave to help with the house."
Yes, Allen answered.
Browne tried to portray Allen as someone working with federal prosecutors because he has to -- to protect himself, his grown children and his former business.
Veco was sold in September for about $400 million to CH2M Hill. Allen testified that he and his family owned 85 percent of the company at that time.
While Veco has not been charged criminally, Allen never got a written assurance from prosecutors that absolutely protects it from prosecution. He said that he could have sold Veco for more with such a commitment.
On the stand in this trial, as he did in the earlier trial of Kott, Allen said he doesn't care what happens to him.
"Hell, my life is all, all over anyway," he said. "I begged on the pass for Veco and I never got that done, so, you know, to hell with it."
Kohring rubbed his neck as he listened. A scar near his collar is a reminder of the spinal fusion surgery that he says still bothers him, and is one reason he once told the Veco executives he was in debt for medical bills.
Later, Browne asked Allen if he cares what happens to his adult children even if he doesn't care about himself. If prosecutors think Allen hasn't cooperated, can't Allen's children still be indicted? Browne asked.
Yes, Allen said, as one of his daughters, Tammy Kerrigan, watched from the gallery.
As prosecutors neared the end of their case, former Alaska corrections commissioner-turned-consultant Frank Prewitt took the stand, describing a two-hour dinner he had with Kohring on Feb. 15, 2005.
Prewitt wore a hidden camera. In a video played for the jury, he could be heard telling Kohring that Veco is "always giving people consulting contracts."
"You'd think they'd offer you one," Prewitt said.
Kohring could be seen seated across from Prewitt, eating. The camera tilted up when Prewitt took a drink from a mug.
"Well, maybe I should ask them," Kohring said.
Veco already had offered to hire him in some capacity, he said. He soon added he would want a "legitimate arrangement" and said he didn't want a "freebie."
Kohring told Prewitt that Veco had been his biggest political supporter, giving him $40,000 or $50,000 over the years.
Prewitt also asked about a former Kohring aide, Eric Musser. Kohring told Prewitt that Allen leaned on him to get Musser to drop a campaign finance complaint against another Valley legislator, Beverly Masek, a Republican from Willow.
In the tape, Kohring doesn't say he fired Musser -- something prosecutors assert -- but said he didn't like that the aide filed the complaint without telling him.
As for Masek, Kohring said: "In some ways, I wanted her to at least get a slap on the wrist and be held accountable for what she had done."
At one point in the video, Kohring said that Allen is on his "red carpet list" of friends and supporters -- people who are welcomed in his office at any time.
Prosecutors showed the jury a copy of that list. It included 22 names -- 10 lobbyists, eight people listed as "personal friends" and four people described as "supporters."
Allen, Smith and former Veco president Pete Leathard were all listed as supporters.
It wasn't clear at day's end whether Kohring would testify or whether the defense would put on a case at all. Browne told Sedwick he honestly didn't know.
Find Lisa Demer online at adn.com/contact/ldemer or call 257-4390. Find Kyle Hopkins online at adn.com/contact/khopkins or call 257-4334. Daily News reporter Richard Mauer contributed to this story.
VIDEO: Frank Prewitt's secret recording of Vic Kohring. adn.com/fbi
BLOG: "Red Carpet List" and live trial updates. adn.com/alaskapolitics
By LISA DEMER and KYLE HOPKINS
Anchorage Daily News