The Alaska political corruption probe refers to a 2003 to 2010 widespread investigation by the
Public Integrity Section
The Public Integrity Section (PIN) is a section of the Criminal Division of the U.S. Department of Justice charged with combating political corruption at all levels of government through the prosecution of corrupt federal, state, and local elected ...
of the
U.S. Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
, the
Federal Bureau of Investigation
The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, ...
, and the
Internal Revenue Service
The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...
into
political corruption
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain.
Forms of corruption vary, but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, in ...
of nine then-current or former Alaskan state lawmakers, as well as Republican US Representative
Don Young
Donald Edwin Young (June 9, 1933 – March 18, 2022) was an American politician from the state of Alaska. At the time of his death, he was the longest-serving Republican in congressional history, having been the U.S. representative for for ...
and then-US Senator, Republican
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
. Sometimes referred to as "The Corrupt Bastards Club" or the "Operation Polar Pen", the investigation focused on the
oil industry
The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products. The larges ...
,
fisheries
Fishery can mean either the enterprise of raising or harvesting fish and other aquatic life; or more commonly, the site where such enterprise takes place ( a.k.a. fishing ground). Commercial fisheries include wild fisheries and fish farms, both ...
and
for-profit prison
A private prison, or for-profit prison, is a place where people are imprisoned by a third party that is contracted by a government agency. Private prison companies typically enter into contractual agreements with governments that commit pr ...
industries.
By the spring of 2006, the FBI set up in a Baranof hotel suite just three blocks away from the capitol building in Juneau. From their position in the hotel suite, they gathered evidence, such as a videotape of
VECO's CEO
Bill Allen arranging paper money for legislators, and made other observations. By August 2008, the investigation resulted in indictments against six sitting or former Alaska Republican state legislators on corruption charges. In August 2008 US Senator
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
was indicted and, by October, he was convicted in Washington, D.C. on seven felony counts of failure to disclose gifts. The convictions, eight days before the November 2008 election, resulted in his narrow loss, after 40 years in the U.S. Senate, to Democrat
Mark Begich
Mark Peter Begich ( ; born March 30, 1962) is an American politician who served as a United States senator from Alaska from 2009 to 2015. A member of the Democratic Party, he previously served as Mayor of Anchorage from 2003 to 2009.
Born in An ...
. His convictions were later
set aside
Set-aside was an incentive scheme introduced by the European Economic Community (EEC) in 1988 (Regulation (EEC) 1272/88), to (i) help reduce the large and costly surpluses produced in Europe under the guaranteed price system of the Common Agricul ...
because of
prosecutorial misconduct
In jurisprudence, prosecutorial misconduct or prosecutorial overreach is "an illegal act or failing to act, on the part of a prosecutor, especially an attempt to sway the jury to wrongly convict a defendant or to impose a harsher than appropri ...
and the
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
ended further prosecution.
In addition to the conviction of US Senator Stevens, two executives of the
VECO Corporation
VECO Corporation was an American oil pipeline service and construction company until its purchase in September 2007 by CH2M Hill. As of that date, the VECO Corporation ceased to exist. Founded in 1968 as Veltri Enterprises by Wayne Ray Veltri, ...
, an oilfield services contractor, pleaded guilty to charges of bribery and conspiracy to impede the Internal Revenue Service. Alaska businessmen/lobbyists Bill Weimar (former for-profit halfway house owner) and Bill Bobrick, as well as
Jim Clark
James Clark Jr. OBE (4 March 1936 – 7 April 1968) was a British Formula One racing driver from Scotland, who won two World Championships, in 1963 and 1965. A versatile driver, he competed in sports cars, touring cars and in the Indianapol ...
, the former governor's chief of staff, also were indicted and convicted. Clark's guilty plea and sentence were later vacated before he was ordered to report to custody. That was followed by ex-Alaska State Rep.
Bruce Weyhrauch
Bruce Weyhrauch is an attorney in Juneau, Alaska, United States. He is also a former representative in the Alaska State House representing Juneau's District 4. Weyhrauch has practiced at his own law office in Juneau for nearly three decades. ...
's Supreme Court challenge to the
honest services fraud
Honest services fraud is a crime defined in (the federal mail and wire fraud statute), added by the United States Congress in 1988, which states "For the purposes of this chapter, the term ''scheme or artifice to defraud'' includes a scheme or ...
statute. His case was decided on June 24, 2010, in association with the ''
Skilling v. United States'' and
Conrad Black
Conrad Moffat Black, Baron Black of Crossharbour (born 25 August 1944), is a Canadian-born British former newspaper publisher, businessman, and writer.
His father was businessman George Montegu Black II, who had significant holdings in Canadi ...
case decisions. While the Court overturned the ''Skilling'' conviction, stating that the
honest services fraud
Honest services fraud is a crime defined in (the federal mail and wire fraud statute), added by the United States Congress in 1988, which states "For the purposes of this chapter, the term ''scheme or artifice to defraud'' includes a scheme or ...
statute was not applicable to private citizens, the Court upheld, but narrowed the application of the honest services fraud statute by stating that it was applicable to public officials only, and remanding Weyhrauch's conviction to the 9th Circuit Court of Appeals.
Federal prosecutors later agreed not to retry Weyhrauch on felony charges in exchange for Weyhrauch's agreement to plead guilty to a single misdemeanor in an Alaska State Court. An Alaska state court judge then gave Weyhrauch a three-month suspended jail sentence and a $1,000 fine.
History
The probe began in 2004 or earlier. By 2006 the name "Corrupt Bastards Club" (alternatively "Corrupt Bastards Caucus") began being used to designate Alaska legislators implicated in the federal corruption (a.k.a., "Polar Pen") investigation. The nickname originated in the spring of 2006 as a barroom joke among Alaska legislators after the publication of a guest article by Lori Backes, executive director of the All Alaska Alliance. It ran in Alaska's three largest newspapers and named 11 lawmakers who had received large campaign contributions from executives of the oilfield services company VECO Corporation. VECO had a long history of making substantial campaign contributions to Alaska politicians. The article also named Senate President
Ben Stevens
Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State S ...
, son of U.S. Senator
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
, as having received large consulting fees from VECO.
In her article, Backes detailed the extent of political campaign donations contributed between 1998 and 2004 by the top seven VECO executives to Alaska lawmakers who were in office at the time her article was written. The figures were based on reports made by contributors and recipients to the Alaska Public Offices Commission.
*
Senator
A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
John Cowdery
John Joe Cowdery (February 11, 1930 – July 13, 2013) was a Republican member of the Alaska Senate, representing the O District from 2001 through 2008. He was previously a member of the Alaska House of Representatives from 1982 through 1984, an ...
(
R-
Anchorage
Anchorage () is the largest city in the U.S. state of Alaska by population. With a population of 291,247 in 2020, it contains nearly 40% of the state's population. The Anchorage metropolitan area, which includes Anchorage and the neighboring Ma ...
), Senate Rules Committee Chair: $24,550.
*
Representative
Representative may refer to:
Politics
* Representative democracy, type of democracy in which elected officials represent a group of people
* House of Representatives, legislative body in various countries or sub-national entities
* Legislator, som ...
Pete Kott
Peter Kott (born 1949) is a former Republican state representative for District 17 serving Eagle River, Alaska, in the Alaska Legislature for seven terms, from 1993 until 2007. He was Speaker of the House during his sixth term in 2003–2004.
On ...
(R-
Eagle River), former speaker of the House: $21,300.
* Representative
Norman Rokeberg (R-Anchorage), House Rules Committee Chair: $18,000.
* Representative
Vic Kohring
Victor H. Kohring (August 2, 1958 – September 6, 2022) was an American politician who was a member of the Alaska House of Representatives. A Republican, he was elected to seven consecutive two-year terms beginning in 1994. Kohring represented W ...
(R-
Wasilla
Wasilla ( Dena'ina: ''Benteh'') is a city in Matanuska-Susitna Borough, United States and the fourth-largest city in Alaska. It is located on the northern point of Cook Inlet in the Matanuska-Susitna Valley of the southcentral part of the st ...
), House Oil and Gas Committee Chair: $14,708.
*
Governor
A governor is an administrative leader and head of a polity or political region, ranking under the head of state and in some cases, such as governors-general, as the head of state's official representative. Depending on the type of political ...
Frank Murkowski
Frank Hughes Murkowski (born March 28, 1933) is an American politician and a member of the Republican Party. He was a United States Senator from Alaska from 1981 until 2002 and the eighth governor of Alaska from 2002 until 2006. In his 2006 re ...
(R): $6,500 (excluding donations to prior U.S. Senate races).
* Representative (later state Senator and currently Lieutenant Governor)
Kevin Meyer (R-Anchorage), House Finance Committee Co-Chair: $12,300.
* Representative
Mike Chenault
Charles Michael Chenault (born February 25, 1957) is an American politician in the state of Alaska. Chenault served as a Republican member of the Alaska House of Representatives from 2001 to 2019, representing portions of the Kenai Peninsula Bor ...
(R-
Nikiski
Nikiski is a census-designated place (CDP) in Kenai Peninsula Borough, Alaska, United States. The population was 4,456 at the 2020 census, down from 4,493 in 2010.
Geography
Nikiski is located at (60.707891, -151.262646) on the west side of the ...
), House Finance Committee Co-Chair: $12,000.
* Representative (later Senator)
Lesil McGuire (R-Anchorage), House Judiciary Committee Chair: $12,000.
* Senator
Con Bunde (R-Anchorage), Senate Labor and Commerce Committee Chair: $11,500.
* Senator
Lyda Green
Lyda N. Green (born October 16, 1938 in Livingston, Texas) is a retired educator and Republican Party (United States), Republican politician in the U.S. state of Alaska. Green, as a political newcomer, was elected to the Alaska Senate in 1994, d ...
(R-Wasilla), Senate Finance Committee Co-Chair: $28,000.
* Representative
Mike Hawker (R-Anchorage): $8,050.
* Representative
Tom Anderson
Thomas Anderson (born November 8, 1970) is an American technology entrepreneur and co-founder of the social networking service, social networking website Myspace, which he founded in 2003 with Chris DeWolfe. He was later president of Myspa ...
(R-Anchorage), House Labor and Commerce Chair: $8,000.
Additionally, Backes noted the consulting contract Senate President Ben Stevens (R-Anchorage) had with VECO Corporation and financial relationships other lawmakers had with other companies active in the oil and gas industry, including
ConocoPhillips
ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas.
The company has operations in 15 countries and has production in ...
and ASCG Incorporated, the latter a subsidiary of the Alaska Native-owned
Arctic Slope Regional Corporation
Arctic Slope Regional Corporation, or ASRC, is one of 13 Alaska Native Regional Corporations created under the Alaska Native Claims Settlement Act of 1971 (ANCSA) in settlement of aboriginal land claims. ASRC was incorporated in Alaska on June 22, ...
which is heavily involved in oilfield business in Alaska.
According to Chenault, one of the lawmakers named in the article: "Somebody walked up
n the bar
N, or n, is the fourteenth Letter (alphabet), letter in the Latin alphabet, used in the English alphabet, modern English alphabet, the alphabets of other western European languages and others worldwide. Its name in English is English alphabet# ...
and said, 'You corrupt bastards,' and that name stuck." Hats with the label "CBC," standing for "Corrupt Bastards Club" or "Corrupt Bastards Caucus," were later printed up, but according to Chenault "that was the extent of the CBC deal."
In the first week of August 2006, an ill Representative
Carl E. Moses returned to the state capitol in Juneau after receiving medical treatment in Anchorage, to cast a critical vote that ensured passage of a bill giving tax breaks to the oil industry. The vote took place, shortly after Moses received campaign contributions from
Bill Allen and five other VECO executives, the only Democrat to receive any from that source.
The FBI had set up in a Baranof hotel suite just three blocks away from the capitol building in Juneau. There they videotaped
VECO's CEO
Bill Allen, peeling off bills for legislators to stuff in their pockets. According to the Juneau Empire,
Ray Metcalfe
Ray Metcalfe (born August 29, 1950) is a politician and political activist in Alaska. Metcalfe has served in the Alaska House of Representatives as a Republican between 1979 and 1983, been active as an activist with the Republican Moderate Party ...
said he had spoken with FBI agents about the case, but didn't know how the feds first got interested in Alaska. "I think the jury is still out on what started this," said Metcalfe. Juneau Mayor
Bruce Botelho
Bruce M. Botelho (born October 6, 1948) is an American attorney and politician in the U.S. state of Alaska. He served as the mayor of Juneau from 1988 to 1991 and from 2003 to 2012. Born and raised in Juneau, where his father was a top official o ...
, the longest-serving attorney general in the state's history, appointed during the successive administrations of Republican
Wally Hickel
Walter Joseph Hickel (August 18, 1919 – May 7, 2010) was an American businessman, real estate developer, and politician who served as the second governor of Alaska from 1966 to 1969 and 1990 to 1994 and as U.S. Secretary of the Interior from 1 ...
, and Democrat
Tony Knowles said it appeared that those state agencies responsible for ensuring ethical government had failed to do their jobs, but it was too soon to tell for sure.
Raids on legislative offices
On August 31 and September 1, 2006, the
FBI
The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...
served some 20 search warrants in
Anchorage
Anchorage () is the largest city in the U.S. state of Alaska by population. With a population of 291,247 in 2020, it contains nearly 40% of the state's population. The Anchorage metropolitan area, which includes Anchorage and the neighboring Ma ...
,
Juneau
The City and Borough of Juneau, more commonly known simply as Juneau ( ; tli, Dzánti K'ihéeni ), is the capital city of the state of Alaska. Located in the Gastineau Channel and the Alaskan panhandle, it is a unified municipality and the se ...
,
Wasilla
Wasilla ( Dena'ina: ''Benteh'') is a city in Matanuska-Susitna Borough, United States and the fourth-largest city in Alaska. It is located on the northern point of Cook Inlet in the Matanuska-Susitna Valley of the southcentral part of the st ...
,
Eagle River,
Girdwood, and
Willow
Willows, also called sallows and osiers, from the genus ''Salix'', comprise around 400 speciesMabberley, D.J. 1997. The Plant Book, Cambridge University Press #2: Cambridge. of typically deciduous trees and shrubs, found primarily on moist s ...
, primarily on the district and capitol offices of several legislators. Republican legislators whose offices were searched included Senator
John Cowdery
John Joe Cowdery (February 11, 1930 – July 13, 2013) was a Republican member of the Alaska Senate, representing the O District from 2001 through 2008. He was previously a member of the Alaska House of Representatives from 1982 through 1984, an ...
, Senate President (and son of U.S. Senator
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
)
Ben Stevens
Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State S ...
, Representatives
Vic Kohring
Victor H. Kohring (August 2, 1958 – September 6, 2022) was an American politician who was a member of the Alaska House of Representatives. A Republican, he was elected to seven consecutive two-year terms beginning in 1994. Kohring represented W ...
,
Bruce Weyhrauch
Bruce Weyhrauch is an attorney in Juneau, Alaska, United States. He is also a former representative in the Alaska State House representing Juneau's District 4. Weyhrauch has practiced at his own law office in Juneau for nearly three decades. ...
,
Pete Kott
Peter Kott (born 1949) is a former Republican state representative for District 17 serving Eagle River, Alaska, in the Alaska Legislature for seven terms, from 1993 until 2007. He was Speaker of the House during his sixth term in 2003–2004.
On ...
and
Bev Masek as well as Democratic Senator
Donny Olson
Donald C. "Donny" Olson (born June 18, 1953) is an American physician, attorney, commercial pilot, reindeer herder, and politician, currently serving as a member of the Alaska Senate, representing the T district since 2001.
Early life
Olson was ...
.
The warrants permitted the search of computer files, personal diaries, Alaska Public Offices Commission reports, and any other items showing evidence of financial ties between legislators and the oilfield services company VECO Corporation,
as well as clothing items with the phrase "Corrupt Bastards Club" or its related acronym printed on it.
A search warrant for Sen. Olson's Juneau office, made available by his office to the public, specifically authorized the seizure of documents relating to VECO Corporation executives
Bill Allen (CEO), Richard Smith (vice president), Pete Leathard (president), and Roger Chan (
chief financial officer
The chief financial officer (CFO) is an officer of a company or organization that is assigned the primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financ ...
). The warrant also authorized the seizure of clothing, including hats, bearing the logos or phrases "VECO," "Corrupt Bastards Caucus," "Corrupt Bastards Club," or "CBC" printed on them.
John Cowdery was indicted for bribery and extortion under official right and bribery concerning programs that receive federal funding.
Management of corruption investigation
It later emerged that the investigation of
political corruption
Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain.
Forms of corruption vary, but can include bribery, lobbying, extortion, cronyism, nepotism, parochialism, patronage, in ...
in
Alaska
Alaska ( ; russian: Аляска, Alyaska; ale, Alax̂sxax̂; ; ems, Alas'kaaq; Yup'ik: ''Alaskaq''; tli, Anáaski) is a state located in the Western United States on the northwest extremity of North America. A semi-exclave of the U.S., ...
was being managed not by the Alaska U.S. Attorney's office, but rather by the
Public Integrity Section
The Public Integrity Section (PIN) is a section of the Criminal Division of the U.S. Department of Justice charged with combating political corruption at all levels of government through the prosecution of corrupt federal, state, and local elected ...
of the
U.S. Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
in
Washington, D.C.
)
, image_skyline =
, image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...
, with FBI agents working out of the
FBI
The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...
building in downtown Anchorage acting as lead investigators. The FBI raids on legislative offices on August 31 and September 1 involved dozens of extra FBI agents brought up from the
Lower 48
The contiguous United States (officially the conterminous United States) consists of the 48 adjoining U.S. states and the Federal District of the United States of America. The term excludes the only two non-contiguous states, Alaska and Hawaii ...
but returned home after the initial round of searches and interviews. Other agencies, including the
Internal Revenue Service
The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...
, were also involved.
The Public Integrity Section, created in 1976, is charged with the investigation of election fraud, misconduct by federal judges, and corruption of elected officials in all levels of government — federal, state, and local.
While U.S. Attorney offices also investigate and prosecute public corruption cases, because U.S. Attorneys are political appointees in local jurisdictions, they are sometimes
recused
Judicial disqualification, also referred to as recusal, is the act of abstaining from participation in an official action such as a legal proceeding due to a conflict of interest of the presiding court official or administrative officer. Applica ...
from particular cases.
Brooke Miles, then-executive director of the Alaska Public Offices Commission, reported that the FBI began to collect public campaign reports and financial disclosure records on selected Alaska legislators perhaps a year prior to the raids, and returned at the start of 2006 to obtain such records for all legislators.
Investigation widens
Fisheries
The FBI conducted a second search on the legislative office of Republican State Senator Ben Stevens on September 18, 2006, seizing among other items documents related to the proposed natural gas pipeline and the oil and gas tax law which had been discussed in the
Alaska Legislature
The Alaska Legislature is the state legislature of the U.S. state of Alaska. It is a bicameral institution consisting of the 40-member Alaska House of Representatives (lower house) and the 20-member Alaska Senate (upper house). There are 40 Hou ...
during the regular and two special legislative sessions in 2006, as well as items related to his work on the Senate Ethics Committee and documents related to fisheries. Stevens disclosed to the ''
Anchorage Daily News
The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska.
The newspaper is headquartered in Anchorage, ...
'' that the FBI seized items during both searches of his office related to the Alaska Fisheries Marketing Board (AFMB), created under legislation by Ben Steven's father, U.S. Senator
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
, to distribute federal grants to promote Alaska seafood.
Ben Stevens had been chair of AFMB until early in 2006.
He had received consulting fees from at least three organizations that had benefited from the grants
— over $250,000 during the time he served on the board.
Other documents related to fisheries were also seized in the September 18 FBI search.
One of these was a copy of an affidavit by Victor Smith, a salmon fisherman from
Friday Harbor who alleged that Stevens had been paid by a seiners association to lobby his father and that he failed to disclose that income as required by Alaska law.
Private corrections
In October 2006, Rep. Vic Kohring's attorney,
Wayne Anthony Ross, provided the ''Anchorage Daily News'' with a copy of the search warrant that had been served on Kohring on August 31, as well as a list of items seized. The warrant showed that federal investigators were also interested in information related to developer Marc Marlow and correspondence between Kohring and the
Alaska Department of Corrections. Ross told the ''
Anchorage Daily News
The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska.
The newspaper is headquartered in Anchorage, ...
'' that his client had been questioned by the FBI about Cornell Companies' (purchased by
GEO Group
The GEO Group, Inc. (GEO) is a publicly traded C corporation that invests in private prisons and mental health facilities in North America, Australia, South Africa, and the United Kingdom. Headquartered in Boca Raton, Florida, the company's f ...
in 2010) effort, in cooperation with VECO Corporation, to build a
for-profit prison
A private prison, or for-profit prison, is a place where people are imprisoned by a third party that is contracted by a government agency. Private prison companies typically enter into contractual agreements with governments that commit pr ...
in
Whittier. That scheme failed due to gubernatorial and bipartisan legislative opposition. The ''Daily News'' observed, "Those documents, though lacking detail or context, suggest that the probe is wide-ranging and not focused on any one company, issue or individual."
Tom Anderson arrested on federal bribery and extortion charges
The observation by the ''Anchorage Daily News'' and other news organizations, that the probe had a wider focus than legislators' ties to the VECO Corporation, was confirmed on December 7, 2006, when outgoing Representative
Tom Anderson
Thomas Anderson (born November 8, 1970) is an American technology entrepreneur and co-founder of the social networking service, social networking website Myspace, which he founded in 2003 with Chris DeWolfe. He was later president of Myspa ...
- whose offices had not been targeted by the August and September FBI raids — was arrested on allegations of
extortion
Extortion is the practice of obtaining benefit through coercion. In most jurisdictions it is likely to constitute a criminal offence; the bulk of this article deals with such cases. Robbery is the simplest and most common form of extortion, ...
,
bribery
Bribery is the Offer and acceptance, offering, Gift, giving, Offer and acceptance, receiving, or Solicitation, soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With reg ...
,
conspiracy
A conspiracy, also known as a plot, is a secret plan or agreement between persons (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder or treason, especially with political motivation, while keeping their agree ...
, and
money laundering
Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
involving his support of a private corrections company. Anderson was accused of accepting money from the company, CorPlan, through a shell corporation set up by a lobbyist, identified in Anderson's charging documents as "Lobbyist A," and later identified as prominent Anchorage lobbyist Bill Bobrick, to disguise the source of payments. Unbeknownst to Anderson or Bobrick, their contact with the private corrections company was a confidential source of the FBI working undercover. According to federal prosecutors, the private corrections company — unidentified in the court documents but widely believed to be Cornell Companies — was not implicated in the plot, and had been unaware of the FBI investigation until Anderson's indictment and arrest. The confidential informant in the case was
Frank Prewitt
James Franklin Prewitt (January 31, 1949 - September 7, 2020) was an American attorney and government affairs consultant. He was a confidential source upon whom the Federal Bureau of Investigation (FBI) relied to help prosecute "Operation Polar ...
, a former commissioner of the Alaska Department of Corrections. After leaving state employ, Prewitt took positions first with
halfway house
A halfway house is an institute for people with criminal backgrounds or substance use disorder problems to learn (or relearn) the necessary skills to re-integrate into society and better support and care for themselves.
As well as serving as a ...
entrepreneur Bill Weimar, serving on his Allvest corporation board of directors, and subsequently with Cornell Companies, which bought out Weimar to establish its Alaska operations.
Court documents filed on March 22, 2010, in a criminal appeal indicated that Prewitt had been paid $200,000 for his assistance in investigating and convicting his former Allvest associates.
Subpoenas of fisheries businesses
Additional subpoenas were served on fishery executives involved with federal funding and the United Fishermen of Alaska who have had business associations with
Ben Stevens
Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State S ...
.
Figures of note
Indictment, arrest of Kott, Kohring and Weyhrauch
On May 4, 2007, former Representatives
Pete Kott
Peter Kott (born 1949) is a former Republican state representative for District 17 serving Eagle River, Alaska, in the Alaska Legislature for seven terms, from 1993 until 2007. He was Speaker of the House during his sixth term in 2003–2004.
On ...
(R-Eagle River) and
Bruce Weyhrauch
Bruce Weyhrauch is an attorney in Juneau, Alaska, United States. He is also a former representative in the Alaska State House representing Juneau's District 4. Weyhrauch has practiced at his own law office in Juneau for nearly three decades. ...
(R-Juneau) were arrested and charged with bribery, extortion wire and mail fraud. Then-Representative
Vic Kohring
Victor H. Kohring (August 2, 1958 – September 6, 2022) was an American politician who was a member of the Alaska House of Representatives. A Republican, he was elected to seven consecutive two-year terms beginning in 1994. Kohring represented W ...
(R-Wasilla) later turned himself in and was similarly charged. All three were arraigned in Juneau. Charges against the three involved allegations of soliciting and receiving money and favors from VECO chief executive officer Bill Allen and chief lobbyist and V.P. Richard L. "Rick" Smith in return for their votes on an oil tax law favored by the VECO that was the subject of vigorous debate during the 2006 legislative session and two special sessions in 2006.
Kott and Kohring were both convicted, but their convictions were later vacated due to alleged misconduct by the prosecuting attorneys. In 2011 both agreed to plead guilty. Prosecutors agreed to recommend both men be sentenced to time served and subject to conditions upon release.
Kohring lost his latest bid to appeal his conviction, turned down unanimously by an en banc hearing of the 9th Circuit Court of Appeals.
After federal charges were dropped, Weyhrauch pleaded guilty to a misdemeanor lobbying violation, his sentence was suspended, and he was fined $1,000. It was estimated he had spent $300,000 on his defense.
In 2016, the state senate's Select Committee on Legislative Ethics found that Weyhrauch had committed ethics violations a decade earlier and requested he pay a fine of $18,100 and write and publicize a letter of apology regarding the situation.
Two years later, the requests for the apology and payment of the fine were waived.
Of the original seven lawmakers who had their legislative offices searched, only Democratic State Senator Don Olson (D-Nome), who had refused a bribe, was not implicated in the scandal and helped the FBI to make their case.
VECO executives indicted, plead guilty
On May 7, 2007, VECO CEO
Bill Allen and Vice President for Community & Government Affairs Rick Smith pleaded guilty in U.S. District Court in Anchorage to charges of extortion, bribery, and conspiracy to impede the Internal Revenue Service.
In addition to the three politicians arraigned on May 4, the new court filings mention illegal payments made to a former state senator, named as "Senator B" in court documents, who received over $240,000 from VECO Corp. over several years, income which Senator B reported as "consulting fees." In the May 7 guilty pleas by Allen and Smith, they admit that the only work done by Senator B in exchange for the funds was advancing VECO's agenda in the state legislature. The only former state senator who matches the information contained in court documents about Senator B is former Senator
Ben Stevens
Benjamin Aavan Stevens (March 18, 1959 – October 13, 2022) was an American politician and political advisor who served as the Chief of Staff to the Governor of Alaska, Mike Dunleavy. He previously served as the President of the Alaska State S ...
(R-Anchorage), son of U.S. Senator
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
(R-Alaska). Ben Stevens was not indicted.
Another state senator discussed in the court documents, identified as "Senator A" in court documents, was identified by sources as John Cowdery.
On May 11, 2007, at a meeting of the VECO Corporation's board of directors and shareholders, Bill Allen resigned as the company's CEO and chairman of its board of directors, citing "the best interest of the corporation, all of our companies, and our many valued employees and customers." Allen's daughter Tammy Kerrigan replaced him as chairman of the board; a new CEO had not yet been chosen. At the same meeting, Rick Smith resigned from his position as vice president of community and government affairs. It was not clear from the VECO statement if Smith's position will be refilled.
Lobbyist Bill Bobrick charged, pleads guilty in Tom Anderson bribery probe
On May 14, 2007, William (Bill) Bobrick, a prominent municipal lobbyist in Anchorage, was charged with one count of conspiracy to commit extortion, bribery, and money laundering in the same scheme for which Rep.
Tom Anderson
Thomas Anderson (born November 8, 1970) is an American technology entrepreneur and co-founder of the social networking service, social networking website Myspace, which he founded in 2003 with Chris DeWolfe. He was later president of Myspa ...
was indicted the previous December. Bobrick was the creator of the shell corporation, Pacific Publishing, through which money was allegedly funneled to Anderson. Bobrick also received money through the scheme.
Bobrick appeared in U.S. District Court in Anchorage on May 16, where he entered a guilty plea. Bobrick was sentenced after the trial of Tom Anderson, scheduled to begin June 25, where Bobrick testified for the prosecution. Under sentencing guidelines, Bobrick faced a possible 2 to 2½ years imprisonment, but his sentence was reduced to six months in return for his cooperation with prosecutors.
In reaction to Bobrick's part in the corruption scandal, the Anchorage Assembly on May 22, 2007, unanimously approved a measure that prohibits individuals who have been convicted of a felony within the past 10 years of registering as a lobbyist with the Municipality of Anchorage.
US Senator Ted Stevens investigated, charged, convicted, and verdict vacated
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
was also investigated by both the FBI and IRS. Authorities investigated an extensive remodeling project done at the Stevens "chalet" in the small town of
Girdwood, Alaska. Unusual aspects of this remodeling project that were investigated were that the project was supervised by VECO, and invoices for the work on the residence were first sent to VECO before being sent to the senator. Some of the issues investigated were the extent of work done on the home, exactly who had paid the invoices from the construction contractors and their subcontractors, and the purpose and extent of VECO's involvement.
On the morning of July 30, 2007, agents from the FBI and the IRS raided the residence in Girdwood. Photographs and video of the inside and outside of the residence were taken. Wine bottles in the home were photographed as objects of interest. The raid continued well into the evening.
On July 29, 2008, just a day short of the anniversary of the Girdwood raids, Stevens was charged with seven counts of false statements on financial disclosures involving VECO, the oil services company in Alaska, and the renovations done on his home.
On October 27, 2008, U.S. Senator
Ted Stevens
Theodore Fulton Stevens Sr. (November 18, 1923 – August 9, 2010) was an American politician and lawyer who served as a U.S. Senator from Alaska from 1968 to 2009. He was the longest-serving Republican Senator in history at the time he left o ...
was successfully prosecuted in the District of Columbia. He was found guilty by a jury of all seven felonies against him. The case had been prosecuted by Principal Deputy Chief Brenda K. Morris, Trial Attorneys Nicholas A. Marsh and Edward P. Sullivan of the
Criminal Division's Public Integrity Section, headed by Chief William M. Welch II, and Assistant U.S. Attorneys Joseph W. Bottini and James A. Goeke from the District of Alaska. Eight days after the verdict, Stevens narrowly lost re-election to Anchorage's Democratic then-Mayor
Mark Begich
Mark Peter Begich ( ; born March 30, 1962) is an American politician who served as a United States senator from Alaska from 2009 to 2015. A member of the Democratic Party, he previously served as Mayor of Anchorage from 2003 to 2009.
Born in An ...
. He had held his seat since December 24, 1968.
On February 13, 2009, U.S. District Judge
Emmet G. Sullivan cited William M. Welch II, Brenda K. Morris, Patty Merkamp Stemler (Chief of the Justice Department Criminal Appeals Section), and another Justice Department attorney for contempt of court. Judge Sullivan amended the contempt citation on February 14, 2009 to remove the fourth attorney. The contempt citation was for failing to turn over to defense counsel for former Senator Stevens documents relating to a complaint by Chad Joy, a Federal Bureau of Investigation agent, alleging misconduct by prosecutors in the Stevens case. Judge Sullivan had ordered, on February 3, 2009, that the documents in question be given to defense counsel. In the contempt citation, Judge Sullivan described the conduct of the Justice Department's lawyers as "outrageous."
On February 16, 2009, the Justice Department stated in a court filing that it had removed six attorneys from "litigation relating to allegations of misconduct in (the case against former Senator Stevens)." The six attorneys were William M. Welch II, Brenda K. Morris, Nicholas A. Marsh, Edward P. Sullivan, Joseph W. Bottini, and James A. Goeke.
On April 1, 2009, Attorney General Eric Holder decided to drop all charges against Stevens after a review of the case turned up alleged evidence of
prosecutorial misconduct
In jurisprudence, prosecutorial misconduct or prosecutorial overreach is "an illegal act or failing to act, on the part of a prosecutor, especially an attempt to sway the jury to wrongly convict a defendant or to impose a harsher than appropri ...
, including failure to fully disclose potentially
exculpatory evidence in response to a
''Brady'' motion by Stevens' attorneys. Since Stevens had not yet been sentenced, Holder's action effectively vacated Stevens' conviction.
Prosecutor Marsh, although he had been removed as the team leader of the Alaska probe's prosecution, well prior to the Stevens debacle, had become episodically depressed as a result of the extreme length of the investigation into the conduct of the team involved in the Senator's case. This was exacerbated by his consequent reassignment to less favorable international duties, pending resolution of the inquiry, though he had anticipated complete exoneration. On September 26, 2010, not long after he returned from a trip to Europe, he hung himself in the basement of his home in
Takoma Park, Maryland
Takoma Park is a city in Montgomery County, Maryland, United States. It is a suburb of Washington, D.C., Washington, and part of the Washington metropolitan area. Founded in 1883 and incorporated in 1890, Takoma Park, informally called "Azalea C ...
.
Stevens meanwhile, 17 months after leaving office, died in a corporate executive airplane crash on August 9, 2010. He had been en route to a remote hunting lodge in western Alaska.
US drops Jim Clark corruption conviction
In 2008, Clark admitted that he was aware that Veco Corp had paid $10,000 for a political poll to gauge the popularity of then-incumbent Governor Murkowski, and was charged with "
honest services fraud
Honest services fraud is a crime defined in (the federal mail and wire fraud statute), added by the United States Congress in 1988, which states "For the purposes of this chapter, the term ''scheme or artifice to defraud'' includes a scheme or ...
". Before he was sentenced, the US Supreme Court ruled that the statute was drafted with unconstitutional vagueness and henceforth will only cover "fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who ha
not been deceived." Since Clark was guilty of neither bribes nor kickbacks, all charges were voided.
Bill Weimar pleads guilty to making illegal campaign contributions
On August 11, 2008, the ''Anchorage Daily News'' reported that Bill Weimar, a former operator of halfway houses for inmates in Alaska was indicted and charged with two felony counts alleging campaign finance violations. Weimar funneled money to an unnamed consultant for an unnamed state legislative candidate in 2004. Weimar agreed to plead guilty to the charges, and in exchange, prosecutors will ask for a reduced sentence, a nonbinding agreement that the judge is free to modify.
Weimar subsequently pleaded guilty in federal court in Anchorage. His sentencing occurred on November 12, 2008. Weimar was sentenced to 6 months in federal prison and ordered to pay a US $75,000 fine.
In 2010, Weimar who was on federal probation after serving six months in prison for illegal campaign contributions, allegedly forced sex on a six-year-old Sarasota girl. After being indicted on January 23, 2011, he fled to Havana, Cuba. From there he flew to Cancun, Mexico where he was arrested on his yacht and extradited back to Florida.
Jerry Ward implicated in probe
On December 15, 2008, the ''Anchorage Daily News'' reported that former Alaska state senator
Jerry Ward
Jerry Ward (born July 19, 1948) is an Americans, American politician and businessman.
Early life
An Alaska Native born in Anchorage, Alaska, Ward served in the United States Navy during the Vietnam War and was in the Navy Seabees. Ward was in the ...
had been implicated in the probe. Ward had been accused of a conspiracy involving Bill Weimar to accept an illegal $20,000 campaign contribution.
[Alaska's political corruption scandal reaped prison, vindication and uncertainty for the accused]
''Anchorage Daily News
The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska.
The newspaper is headquartered in Anchorage, ...
'', Jill Burke, February 11, 2011 (Updated June 30, 2016). Retrieved July 4, 2022. Weimar had a $5.5 million interest, contingent only on the approval and construction of a
Cornell Companies
Cornell Companies (NYSE:CRN) was an American corporation that operated correctional facilities, contracting them to state and local governments. The company's headquarters were located in Houston, Texas. On August 12, 2010, Cornell was acquired by ...
prison in Alaska. On August 23, 2004 he paid $3,000 by check toward settlement of a $20,000 invoice. Later that day he forwarded $8,500 in cash drawn from a
Polson, Montana
Polson (Salish-Spokane-Kalispel language, Montana Salish: nčmqnétkʷ, Kutenai language, Kutenai: kwataqnuk) is a city in Lake County, Montana, Lake County, Montana, United States, on the southern shore of Flathead Lake. It is also on the Flathe ...
bank by express mail followed a day later by $8,500 more in cash drawn from the same bank, according to court documents. Cash transactions of more than $10,000 daily mandate federal reporting per the
Bank Secrecy Act
The Bank Secrecy Act of 1970 (BSA), also known as the Currency and Foreign Transactions Reporting Act, is a U.S. law requiring financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laund ...
.
Bank Secrecy Act
''Investopedia
Investopedia is a financial media website headquartered in New York City. Founded in 1999, Investopedia provides investment dictionaries, advice, reviews, ratings, and comparisons of financial products such as securities accounts. Investopedia ha ...
'', Will Kenton, April 06, 2022. Retrieved July 4, 2022. Ward allegedly convinced a witness in the trial against Senator Ted Stevens to lie about an immunity deal in court to ensure that he was included in it and would therefore not be prosecuted. According to federal prosecutors, Ward had been under investigation for some time over his relationship with Weimar, who was convicted of two felony counts in the matter and sentenced to prison. While he was presumed to be under continued investigation, Ward was not charged.
Donny Olson refuses bribes, assists FBI
Democratic Senator Donny Olson was running for Lieutenant Governor in 2006. He was offered but refused a $25,000 campaign contribution, later cooperating with the FBI to bring cases against the conspirators.[
]
John Cowdery pleads guilty
On December 18, 2008 KTUU
KTUU-TV (channel 2) is a television station in Anchorage, Alaska, United States, affiliated with NBC. It is owned by Gray Television alongside dual CBS/MyNetworkTV affiliate KAUU (channel 5). Both stations share studios on East 40th Avenue in ...
Anchorage Channel 2, an affiliate of NBC
The National Broadcasting Company (NBC) is an Television in the United States, American English-language Commercial broadcasting, commercial television network, broadcast television and radio network. The flagship property of the NBC Enterta ...
, reported that John Cowdery
John Joe Cowdery (February 11, 1930 – July 13, 2013) was a Republican member of the Alaska Senate, representing the O District from 2001 through 2008. He was previously a member of the Alaska House of Representatives from 1982 through 1984, an ...
had agreed to change his plea from not guilty to guilty
Guilty or The Guilty may refer to:
* Guilt (emotion), an experience that occurs when a person believes they have violated a moral standard
Law
*Culpability, the degree to which an agent can be held responsible for action or inaction
*Guilt (law) ...
in exchange for some of the charges against him being dropped. As part of his plea agreement, Cowdery did not have to testify against other defendants in the case. No sentencing parameters were agreed upon as a result of this agreement. Cowdery subsequently pleaded guilty in federal court on December 19, 2008. Due in part to his age and alleged infirmity, he was only sentenced to 6 months of house arrest
In justice and law, house arrest (also called home confinement, home detention, or, in modern times, electronic monitoring) is a measure by which a person is confined by the authorities to their residence. Travel is usually restricted, if all ...
and fined US$25,000. Cowdery died on July 13, 2013.
Beverly Masek pleads guilty
On March 13, 2009, the ''Anchorage Daily News'' reported that former Alaska state representative Beverly Masek
Beverly L. "Bev" Masek (née Jerue) (born September 30, 1963) is an Alaska Native and an American former dog sled racer, and businesswoman. She was a Republican politician who served in the state legislature for several terms.
Early life, educ ...
had pleaded guilty to soliciting and accepting at least $4,000 in bribes from VECO Corp. Masek, who originally rose to fame by competing in the Iditarod Trail Sled Dog Race
The Iditarod Trail Sled Dog Race, more commonly known as The Iditarod, is an annual long-distance sled dog race run in early March. It travels from Anchorage to Nome, entirely within the US state of Alaska. Mushers and a team of between 12 a ...
while still known by her maiden name of Beverly Jerue, was first elected to the House in 1994. Masek represented a district consisting of the northern and western reaches of the Matanuska-Susitna Borough
Matanuska-Susitna Borough (often referred to as the Mat-Su Borough) is a borough located in the U.S. state of Alaska. Its county seat is Palmer, and the largest community is the census-designated place of Knik-Fairview.
The borough is part of ...
in the House from 1995 to 2005 before being defeated by Mark Neuman
Mark Neuman (born August 12, 1959) was a Republican member of the Alaska House of Representatives
The Alaska State House of Representatives is the lower house in the Alaska Legislature, the state legislature of the U.S. state of Alaska. The ...
in the 2004 primary election. Masek was sentenced on September 23, 2009.
See also
* Alaska Legislature
The Alaska Legislature is the state legislature of the U.S. state of Alaska. It is a bicameral institution consisting of the 40-member Alaska House of Representatives (lower house) and the 20-member Alaska Senate (upper house). There are 40 Hou ...
* Public Integrity Section
The Public Integrity Section (PIN) is a section of the Criminal Division of the U.S. Department of Justice charged with combating political corruption at all levels of government through the prosecution of corrupt federal, state, and local elected ...
* OpenSecrets
OpenSecrets is a nonprofit organization based in Washington, D.C., that tracks data on campaign finance and lobbying. It was created from a merger of the Center for Responsive Politics (CRP) and the National Institute on Money in Politics (NIMP). ...
Notes
External links
Alaska Public Offices Commission
Alaska Public Offices Commission home page.
Continuing coverage of Alaska's legislator scandal from '' AlaskaReport.com''.
"Alaska Political Corruption."
Continuing coverage on the corruption scandal from the ''Anchorage Daily News
The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska.
The newspaper is headquartered in Anchorage, ...
''.
"FBI Probe on Capitol Hill."
Continuing coverage on the corruption scandal from the ''Juneau Empire
The ''Juneau Empire'' is a newspaper in Juneau, Alaska, United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consist ...
''.
"Veco."
Continuing coverage about VECO Corporation
VECO Corporation was an American oil pipeline service and construction company until its purchase in September 2007 by CH2M Hill. As of that date, the VECO Corporation ceased to exist. Founded in 1968 as Veltri Enterprises by Wayne Ray Veltri, ...
from the ''Anchorage Daily News
The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska.
The newspaper is headquartered in Anchorage, ...
'', with particular emphasis on VECO's connections to the corruption scandal.
Lisa's Deal
Sen. Murkowski's Kenai River land buy looks fishy ''Anchorage Daily News
The ''Anchorage Daily News'' is a daily newspaper published by the Binkley Co., and based in Anchorage, Alaska. It is the most widely read newspaper and news website (adn.com) in the state of Alaska.
The newspaper is headquartered in Anchorage, ...
''.
Lisa Murkowski
Alaska has a new top political funder: Bob Penney. He is quite close to Senators Stevens and Murkowski.
Entire Alaska Delegation Contributed Earmarks To 3 Mile Road
To cover matching costs required by some of the federal money, Murkowski's father, then-Gov. Frank Murkowski ponied up another $325,000 in state fund
TPM Muckraker
''Anchorage Daily News'' story, published August 17, 2008, on the VECO sale.
''ADN'' story, published September 24, 2009, on the sentencing of Masek.
{{DEFAULTSORT:Alaska Political Corruption Probe
2006 in Alaska
2007 in Alaska
2008 in Alaska
Federal Bureau of Investigation operations
Political corruption investigations in the United States
Crimes in Alaska
Political scandals in Alaska