Ted's pals: cloak and dagger among friends

A picture of a U.S. Senator's high-rolling friends scheming to beef up his bottom line emerged from telephone calls played as the dramatic end of a courtroom day. Questions remain about how much Ted Stevens knew about what his closest buddies were doing, how much he should have known-and how much he wanted to know.

The conversations were between Bill Allen, CEO of VECO, and Bob Persons, owner of the Double Musky, a popular "Mountain Cajun" restaurant in Girdwood. Allen arranged for VECO to remodel, maintain, and repair Stevens' chalet in Girdwood, and Persons was Stevens' designated caretaker of the residence.What those gentlemen didn't know back in February of 2006 was that the FBI was listening in as the pair talked about how to help their pal Ted Stevens.

Allen talks to Persons in the first conversation about allocating to Allen half of a bill for work at Stevens' home. Allen says "We've got be real careful."

Persons agrees about the need for care, referencing the horse-racing and horse-rearing partnership all three men appear to be in. Persons, the partnership's apparent manager, says that Stevens has told him "'Make sure that I pay my share'" and that Persons has responded "'I billed you first.'" Persons then tells Allen that he was holding down the expenses made by the horse partnership to help Stevens, and cites a comment by Stevens' wife Catherine to explain why.

"As Catherine says, Ted gets hysterical when he has to spend his own money....He gets hysterical because he can't afford to pay a bunch of money, I don't think." "I know," Allen responds. In the second call between the two men, they strategize about how to deal with a bill from a plumbing subcontractor for work done at Stevens' home (apparently the same bill as discussed before). Sent to Stevens, the bill shows "Labor paid by Bill. Allen and Persons talk about how Stevens has complained about Allen covering the labor costs while giving Stevens the bill for the materials only and how the Senator has announced that he wants to pay the labor bill as well. Persons is unhappy with himself for not seeing that notation on the bill before Stevens got it. Allen is dismayed as well. Persons tells Allen "I know that you didn't want him to know that." Allen agrees, and says that he also didn't any other people to know that he had taken care of the labor portion of the bill. "We don't need this thing floating around....We need to make that guy from Chugach Sewer and Drain make it disappear from his records," Persons says. Persons warms to his suggestion: "Make him understand that Ted's paying for everything. That's the safest thing, Bill." Persons told Allen that Allen should get a check from Stevens to cover the labor costs, pointing out that "You don't have to cash it." Persons repeatedly emphasizes an important feature of this ruse. Allen would need to make a copy of the check from Stevens, so that if there was ever any scrutiny he could show the copy to demonstrate that Stevens had paid him. It almost seems like a movie as the slow-talking oil-services baron and the Alabama-accented restaurateur laugh over their planned deception.

Then it's on to the horse business, as the men talk of pregnant mares and future races. Persons tells Allen that the next day "Cloak and Dagger's going to run at the third race at Santa Anita." Switching topics, Persons talks to Allen about an exciting oil prospect-possibly in Alaska's Cook Inlet--that the two men have apparently previously discussed. Persons talks about all the money that could be made by investing in it: "Don't want to miss out on a big lick like that." Persons then says that what is really important is that the prospect is a state lease, meaning that U.S. Sen. Ted Stevens could thus get in on the sweet deal. Coming at the end of the day, these tapes clearly had a big impact on the jury. The fact that the jury heard them at all was a credit to good lawyering by the prosecution, which got the judge to let them in on a theory that Stevens, Allen, and Persons were involved in a joint venture to keep Stevens from paying for work at his house. Knowing the power of the tapes, the defense had fought a vigorous but losing battle to exclude the evidence as irrelevant, excessively prejudicial, and "triple hearsay." As this incident suggests, what is often most important in a trial is not how evidence is presented but the legal battles that decide what evidence gets into court at all. Nicholas Marsh and Edward Sullivan have crafted many of the prosecution's legal arguments, and they apparently deserve credit.

The prosecution will argue that these conversations give credence to Allen's trial testimony that one reason he didn't bill Stevens for work VECO did at Stevens' house is that Persons had told him that Stevens didn't want to be billed and that any statement to the contrary was "just Ted covering his ass." The defense will contend, on the other hand, that Allen and Persons were conspiring behind Stevens' back. The defense paints Allen as a false friend of Stevens and will bring in Persons to call Allen a liar for attributing the ass-covering statement to Persons. Hearing the tapes today will make the jury very interested in just what the apparently still loyal Persons has to say.



The rest of the day paled in comparison to the slam-bang ending, and until then it felt anti-climactic following the Stevens-Allen tapes and the meaty cross-examination of Allen conducted yesterday. Lead defense attorney Brendan Sullivan continued his successful efforts to make Allen repeat the defense themes. When Stevens helped used his clout as a Congressional powerhouse to help VECO, for example, he was just sticking up for an Alaska business like any Senator from Alaska would. Sullivan was less successful in trying to portray Allen as eager to shade his testimony against Stevens to curry favor with the government. Sullivan went over with Allen provisions of the agreement by which he sold VECO for $380 million last year. The lawyer attempted to show that Allen had reason to try to help keep VECO for being prosecuted for campaign finance violations, which Sullivan suggested would threaten Allen's ability to receive some portion of the $70 million of the purchase price that was held back to address contingent liabilities. Allen would not help Sullivan on this point. He said that the $70 million held back was to pay off things like taxes and environmental issues. Allen said he hadn't read that portion of the contract, and generally indicated a lack of worry about future prosecution of VECO affecting his receipt of that money. More generally, Sullivan's attack on Allen as a money-grubber anxious to help the government seemed to fail in the face of the 71-year-old's gestalt on the stand. The former global business titan and political point man for Big Oil seems like the farthest thing from a shrewdly calculating sharpie trying to hurt Ted Stevens for his own benefit. What the jury sees instead is a tired old man whose testimony is halting and often contradictory and clearly colored by affection for his old pal. What Sullivan covered today was in some ways less interesting than what he didn't touch. There was no mention of Allen's brain injury, and none at all in the cross-examination beyond a couple of references to Allen's "terrible motorcycle accident" in July of 2001.

The allegations about Allen being concerned about prosecution for another crime-alleged sex with an underage girl-saw nary a whisper. Beyond those tactical decisions not to hammer on those personal issues of Allen's, Sullivan obviously chose not to avoid problem areas that he may have no good explanation for. So left undiscussed was Allen's testimony that after he gave a king-sized bed to Stevens, the Senator wrote and asked him to get a queen-sized bed instead. Also omitted was any discussion of the frame VECO put in Stevens' garage for the Senator's speed bag. Assistant U.S. Attorney Joe Bottini's redirect examination of Allen was crisp and effective in getting Allen to clear up questions about what VECO had given Stevens. Bottini was particularly good in handling the defense point that Allen was justified in not billing Stevens for work fixing the garage roof given that Allen believed that the problem with the original work was the improper architectural design by a VECO employee. Bottini noted that Stevens never paid for the design, and asked Allen "Have you ever heard of anyone offering a warranty on a free item?" One of the oddest things that Allen said today came at the end of his redirect examination when Bottini asked him if the Senator had given Allen helpful information on the proposed natural gas pipeline. Allen said that yes, Stevens knew Jim Mulva, the President of ConocoPhillips Alaska, which wanted to build the gasline. Given that VECO made most of its money by working for ConocoPhillips and the other big oil producers in Alaska-and that Allen faces years in prison for bribing Alaska state legislators to pass an oil tax bill that benefited those big oil producers-this statement was a puzzling yet tantalizing non sequitur.

The prosecution plans to finish presenting witnesses tomorrow morning. Looming over all of today's events was the court's repeated references to the possibility that the trial will come to a sudden stop right after that. There will be a hearing tomorrow at 1:30 p.m. on the defense's motion for dismissal or a mistrial based on alleged prosecution misconduct involving disclosure of evidence. Judge Emmet Sullivan has talked tough, and he is clearly very angry about some screw-ups by the prosecution in this case. In the spirit of the good old boys down at the track, however, this blog makes two wagers: 1. Sen. Ted Stevens will not testify in his own defense. 2. The judge will let this case go to the jury to decide.

Cliff Groh is reporting on Ted Stevens' trial at his blog, www.alaskacorruption.blogspot.com, where these entries first appeared. Groh is a lifelong Alaskan and attorney with a private practice in Anchorage. Groh worked as a prosecutor for the Alaska Department of Law, and he has conducted jury trials in Anchorage, Unalaska, St. Paul, Sitka and Sand Point. He has also served as the Special Assistant to the Commissioner of Revenue, where he worked successfully for the revision of oil taxes enacted in 1989 that raised taxes on the Prudhoe Bay and Kuparuk fields. He was the principal legislative staff member when the Permanent Fund Dividend was created. He is conducting research for a book on public corruption in Alaska.