By Margaret Bauman
Alaska Journal of Commerce

A federal grand jury in Washington, D.C., indicted Sen. Ted Stevens, R-Alaska, on July 29 on seven counts of failure to report gifts exceeding $250,000 from a private contractor for his chalet home in Girdwood.

The felony counts stem from a wide-ranging corruption inquiry into the relationship between Stevens and Veco Corp., which remodeled the residence. Veco was a privately held, Alaska-based corporation active in oil pipeline and construction services to the oil industry and the public sector worldwide. The company was generally not in the business of home remodeling or improvement.

Stevens, 84, the state's senior senator and an icon of Alaska politics, issued a brief statement saying he is innocent of the charges and intends to prove it.

The Justice Department said Stevens would be allowed to turn himself in, rather than face arrest. If convicted, Stevens could face up to five years in prison for each of the seven counts.

Bill Allen, chief executive officer and part owner of Veco, was a personal friend of Stevens. He pleaded guilty in May 2007 to making $243,000 in illegal payments to a lawmaker later identified as then-state Sen. Ben Stevens, R-Anchorage, Ted Stevens' son. The younger Stevens is one of several lawmakers under scrutiny for their relationship with Allen and Veco. Three state legislators with ties to Veco have been convicted.

Stevens has served in the Senate for 40 years, making him the longest sitting senator currently in office. He is engaged in a tight race for re-election against Anchorage Mayor Mark Begich, a Democrat.

Begich issued a brief statement calling the indictment of Stevens “a sad day for Alaska and for the senator after his 40 years of service to our state. The people of Alaska are resilient and strong,” Begich said. “I have great faith in our state and our people, and we will continue to move forward.”

Meanwhile, in accordance with Senate Republican Conference rules, Stevens said he has temporarily relinquished his vice-chairmanship and ranking positions until absolved of the charges. Stevens was the ranking member on the Senate Appropriations subcommittee on defense and the Committee on Homeland Security and Government Affairs subcommittee on disaster recovery. He was also the vice chairman of the Senate Committee on Commerce, Science and Transportation subcommittee on aviation operations, safety and security.

One of the most powerful members of Congress, he is known to affectionately to many of his constituents as “Uncle Ted.” Stevens has served in the Senate since 1968, bringing home billions of dollars in funds for a range of projects.

Stevens has been instrumental in the passage of numerous pieces of legislation benefiting Alaskans, including the Alaska Statehood Act, the Alaska Native Claims Settlement Act and the Magnuson-Stevens Fisheries Conservation and Management Act.

The seven-count indictment alleges that Stevens failed to disclose more than $250,000 in gifts he received from Veco, a prominent oilfield contractor, and its chief executive officer, Bill Allen, over a period of eight years.

The indictment is part of a larger investigation in which federal investigators are looking for links connecting some of the huge flow of federal dollars to the senator's son Ben Stevens, a former state senator, lobbyist and crab boat captain for a major fish processor.

When the elder Stevens got millions of dollars in funding for the Alaska Fisheries Marketing Board in 2003, Ben Stevens, who also worked as a consultant in the fishing industry, served as the first chairman of the board, and his clients were among the recipients of those marketing board funds.

The indictment said Stevens filed false financial disclosure forms for several years that failed to report items of value received from Allen and Veco. The purpose of the yearly financial disclosure forms is to disclose, monitor and deter conflicts of interest, to maintain public confidence in the integrity of the Senate and its members.

The indictment identified the gifts from Veco, including a new first floor, garage, wraparound deck, plumbing and electrical wiring his Girdwood chalet. Stevens also is accused of accepting from Veco the gifts of a Viking gas grill, furniture and tools, and of failing to report swapping an old Ford for a new Land Rover to be driven by one of his children.

The indictment alleges that beginning about May 1999, and continuing through August 2007, Stevens “knowingly and willfully engaged in a scheme to conceal a material fact, that is, his continuing receipt of hundreds of thousands of dollars' worth of things of value from a private corporation and its chief executive officer by, among other things, failing to report them, as was required, on Stevens' required yearly financial disclosure forms.”

“I have proudly served this nation and Alaska for over 50 years,” said Stevens, who earned the distinguished flying cross as a pilot in World War II. “It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form require by law as a U.S. senator.”

Stevens added that the impact of the charges on his family “disturbs me greatly.”

His campaign office, meanwhile, issued a statement saying that Stevens' campaign for re-election was moving full steam ahead.

“Our office has been flooded today with calls and e-mails from supporters urging the senator to press on,” said campaign aide Aaron Saunders. “The message from them is clear: Alaska needs Ted Stevens in the U.S. Senate.”

Alaska Gov. Sarah Palin said Stevens has dedicated his life to the betterment of Alaska, and that she shares Alaskans' concern and dismay at this turn of events. “News such as this rocks the foundation of our state,” she said.

Palin said she hopes state legislators do not let news of the indictment distract them from their work in the current special session.

“The state Senate is poised to make history this week, as it considers approving a license for TransCanada to move forward with an Alaska gas pipeline,” she said.

Sen. Daniel Inouye, D-Hawaii, issued a statement in defense of the Alaska Republican, a close personal friend. “In our legal system, a man is presumed innocent until proven guilty in a court of law,” Inouye said. “As far as I am concerned, Ted Stevens remains my friend. I believe in him.”

Senate Majority Leader Harry Reid, D-Nevada, said he's served with Stevens during his entire congressional career. “It is a sad day for him, us,” Reid said. “But you know, I believe in the America system of justice that he's presumed innocent.”

Sen. Lisa Murkowski, R-Alaska, said she was shocked by the indictment. “ I know Ted Stevens to be an honorable, hard-working Alaskan who has served our state well for as long as we have been a state,” she said. “As to the charges, we are at the beginning of the criminal process and there is a judicial procedure in place that will be followed.”

Rep. Don Young, R-Alaska, who has himself been tied to convicted lobbyist Jack Abramoff, called Stevens “one of the most effective and honest legislators I have ever worked with. He has worked diligently to serve Alaska and has fought to make life better for people in every region of our state. I hope people will not rush to judgment and will let the judicial process work. The process is based on being innocent until proven guilty,” Young said.

Patti Higgins, chair of the Alaska Democratic Party, said that Stevens' indictment shows just how much Alaska has been hurt by corruption. “Senator Stevens violated the public's trust,” Higgins said. “Senator Stevens should step down from his post in Washington. It's time for him to retire. Alaskans need representation in the Senate that they can trust.”

Higgins said Stevens has hurt Alaska, put the state in a position where Alaskans have virtually no representation.

State labor economist Neal Fried said it's likely Alaska will always be one of the top 10 states given spending priority for several reasons.

“The federal government owns most of the land here,” Fried said. “They have a special relationship with the Alaska Native population, there is a lot of potential resource development on federal lands, and we have a lot of coastline too.”

Because of defense concerns, coastal areas, a host of military and other projects in the state, federal funds will continue to flow, he said.

“Federal expenditures will remain a major piece of Alaska's economy, but that doesn't mean we can't lose ground,” Fried said.