Sen. Stevens Indicted in Alaska Corruption Probe

Original Link: http://www.cqpolitics.com/wmspage.cfm?docID=news-000002928658

By Kathleen Hunter, CQ Staff

Sen. Ted Stevens of Alaska, the senior Republican in the Senate, was indicted Tuesday by a federal grand jury in Washington on seven felony counts of making false statements on his financial disclosure forms.

The 28-page indictment — the latest in an ongoing probe of corruption in Alaska politics — claims Stevens concealed receiving more than $250,000 worth of benefits from oil services company Veco Corp. and its former chief executive, Bill Allen, from 1999-2006.

The benefits allegedly included substantial renovation and enlargement of his house in Girdwood, Alaska, household goods and automobiles that were significantly more valuable than ones he offered in exchange.

His home was raided in July 2007 by the FBI and the IRS, which was reportedly investigating whether Veco may have covered Stevens’ home renovation costs.

The indictment also claims Stevens used his Senate position to aid Veco at the request of Allen and other company employees.

Stevens, 84, an icon in Alaska politics since first winning his seat by appointment in December 1968, denied wrongdoing in a statement and said he was giving up his positions as ranking Republican on the Commerce, Science and Transportation Committee and two subcommittees.

“It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator,” Stevens said. “I am innocent of these charges and intend to prove that.”

Matthew Friedrich, acting assistant attorney general for the Criminal Division, said Stevens “will be allowed to turn himself in. He will not be arrested.”

Allen and former Veco vice president Richard L. Smith pleaded guilty in May 2007 to providing more than $400,000 in corrupt payments to Alaska public officials.

Two lobbyists and three Alaska state lawmakers have also been convicted in the scandal, including Peter Knott, the former speaker of the Alaska House, who was convicted of extortion, bribery and conspiracy last year and sentenced to six years in prison.

Colleagues Cautious
Stevens’ closest friend in the Senate and a fellow World War II veteran, Hawaii Democrat Daniel K. Inouye , said Stevens should be considered “innocent until proven guilty,” adding that the indictment should not impact Stevens’ ability to do his job.

Another fellow World War II and Senate veteran, John W. Warner , R-Va., said Stevens has “been a hero and a fighter, and he’s been a fighter for his country’s interests and a fighter for his state ever since.”

Sen. Stevens Indicted in Alaska Corruption Probe
Stevens, the longest-serving Republican senator in history, ranks seventh in all-time Senate seniority. He was chairman of the Appropriations Committee from 1997 to 2005 — except when Democrats held the chamber for 18 months in 2001 and 2002 — and remains ranking Republican on the Defense Appropriations Subcommittee. Stevens also is ranking Republican on the Homeland Security and Governmental Affairs Disaster Recovery Subcommittee.

Senate Republican Conference rules required him to relinquish those posts.

An Appropriations Committee aide said committee Republicans would recommend Thad Cochran of Mississippi take Stevens’ place on the Defense subcommittee. Cochran is ranking Republican on the full committee.

Earlier, outside watchdogs groups that had been critical of the Senate Ethics Committee’s failure to investigate allegations against Stevens hailed the Justice Department’s action and called on GOP leaders to strip him of his committee leadership posts.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said, “We think the indictment is overdue. We are very happy to see the Justice Department is taking action when the Senate wouldn’t.”

Added Steve Ellis, vice president of Taxpayers for Common Sense: “Senator Stevens is entitled to due process and remains innocent until proven otherwise. But considering his role as a powerful appropriator and ranking member of Commerce, Science and Transportation Committee, he should be immediately removed from those capacities.”

Among the favors Stevens was accused of doing for Veco in the indictment was helping the company win a federal contract to provide logistical support services such as transportation, clothing and housing to National Science Foundation outposts in the Arctic. Ellis said the 5-year contract was worth $170 million and Veco “had little experience in the area.”

The indictment also accuses Stevens of aiding Veco by securing funds for a new natural gas pipeline from Alaska’s North Slope region to Chicago in the fiscal 2005 military construction spending bill (PL 108-324).

Veco’s lobbyist on the pipeline issue, former Alaska Teamster official Gerald L. Hood, became local district director for Rep. Don Young , R-Alaska, on Nov. 1, 2006, the day after he stopped lobbying for the company, according to federal databases.

Stevens faced little electoral risk when he announced in 2006 that he would seek a seventh full term this year. But the ongoing scandal has eroded his support to the point where his likely Democratic opponent, Anchorage Mayor Mark Begich, leads in some polls.

Democratic Senatorial Campaign Committee Chairman Charles E. Schumer , D-N.Y., declined to comment on how Stevens’ indictment might influence what was already considered a pickup opportunity for Democrats.

“I feel bad for him and his family. That’s all I want to say today,” Schumer said.

Stevens also faces opposition in the Aug. 26 GOP primary from David Cuddy, a wealthy real estate developer who lost to Stevens in the 1996 primary after spending more than $1 million in personal funds, and five lesser-known candidates including Republican minister Gerald L. Heikes.

Sen. Stevens Indicted in Alaska Corruption Probe
Stevens’ campaign spokesman Aaron Saunders said the campaign is moving “full steam ahead. Our office has been flooded today with calls and e-mails from supporters urging the senator to press on.”

But in the aftermath of the indictment, CQ Politics is changing its rating of the Alaska Senate race from Leans Republican to Leans Democratic.