Pete Kott Trial Day 8 - Rest of the Morning

U.S. District Court for the District of Alaska
Court Calendar for Friday, September 14, 2007
Current as of 09/14/2007 at 12:00 PM


9:00 AM 3:07-CR-00056-01-JWS Judge Sedwick Anchorage Courtroom 3
USA vs. PETER KOTT
TRIAL BY JURY - DAY 8



The rest of the morning was not quite as exciting as the Bill Allen's testimony. Summary:

1. Discussion among attorneys and judge whether the Government could ask Rick Smith what Pete Kott understood things to mean. Criteria the judge cited from other cases were
a. has to be helpful to the jury.
b. Should not allow to interpret clear statements as opposed to statements given in code.
2. Witness Karla Schofield - deputy director of Legislative Affairs testifying about a travel reimbursement Kott turned in about travel to DC for an Energy Council meeting in March 2006 (I think, could have been 2005). It wasn't totally clear where this was leading, though the discussion before was about his trip to DC to meet with Marathon Oil people on behave of Veco. So if that was the same trip, maybe that is relevance. I still want to know who paid for his trip to the Don Young Pig Roast. I guess if the state had paid for that they would have brought it up.
3. Witness Richard L. Smith, VP for Veco. Nothing popped out at me during the testimony, though it was basically pushing toward whether Veco promised Kott a job in return for doing Veco's work in getting the PPT and gas pipeline through the legislature.

Below are my notes as I took in the courtroom. It was easier to keep up when Allen was testifying because there were long pauses and he talked slowly. But the rest of the morning people responded much more quickly. I tried to keep the actual language as much as possible, but sometimes I had to skip along, shorten, etc. just to keep up with what was going on. Sometimes I had several A(nswer)s without any Q(uestion)s, which indicates there were questions and I tried to incorporate the questions into the answers. So this is pretty rough, but will give a reasonable idea of what when on in the court this morning, for anyone who wants more details.




10:40am

Simonian (Kott Attorney): It appears Rick Smith is going to testify. Pivotal is conversation where Pete Kott says “We need to get Marathon Oil”.
Judge: Let me rule first, then I’ll hear it. Haven’t had time for written ruling. But looked at cases. Concern will ask Smith to give his interpretation of tapes. Decision: It appears there’s no dispute. Correct: Smith can testify to what he heard or saw. Can testify what actions he took. Cannot testify what other understood. Leaves: Can he testify what he understood them to mean? Citing cases. Some cases say yes, others say no. Has to be rationally based on perception of witness - not expert. Also has to be helpful to the jury. Should not allow to interpret clear statements as opposed to statements given in code.

I conclude must be ruled on 701 and this can’t be done in a vacuum and I’ll hear you both out and give a ruling. Marsh shared the one and said there were others Exhibit 15, March 10 phone RS-PK - where Kott calls from DC to ask for Thurwacker’s number. That’s the basis of the wire fraud count, and the only basis, so critical. On page 3,
PK “we gotta take care of Marathon in this deal..
J: Let me hear from Mr. Marsh what he plans to ask what Mr. Smith understood.
M: Talking about PPT bill.
J: this is pretty obvious
M: But not obvious to juries. Not whether it was relevant to Veco.
J: Just ask him if Veco had a position regarding Marathon.
M: I agree but, Mr. Kott says, this is just a phone call. Smith’s interpretation different.
J: It’s clear, jury can figure it out. Mr. Smith doesn’t need to put words into Kott’s mouth. You can get at it different, but leaves jury to figure it out. That’s m ruling on that particular aspect.

10:53am Ready for jury.

Marsh: Govt calls
Swearing in Witness
Name: Karla Jayne Schofield - Juneau
Marsh: Tell us about yourself.
A: Grew up in Ketchikan? College outside. deputy director for Legislative Affairs Agency. Worked for State for 30 years. Responsible for bill drafting, teleconferencing, info offices around the state, etc.
Financial duties, oversee the office
Q: relates to travel?
A: I guess, process all the per diem, pay travel submitted by legislators.
Q: Ways sitting members of legislators can have travel paid for by state.
A: Yes, officers have money . Presiding officer or dept chairs and can approve own travel if it’s small amount. Leg Budget and audit and Leg finance committees, etc.
Q: Ex. 112. Do you recognize that document?
Q: What is it?
A: Travel to Washington DC March
Q: You indicated reimbursement to energy council? You know what that is?
A: Several leg go to, this is an annual meeting held in DC
Q: Does document contain about airline trip?
A: Shows between airfare and taxis we reimbursed $1,491 for that portion.
Q: Times he came and went?
A: Has itinerary?
Q: Times plane left?
A: March 9 Alaska Airlines arrived, departed March 11.
Q: Hotel records?
A: For DC and sEattle.
Q: For night or Mach 10 hotel in DC?
A: Yes
A: form shows their itinerary, sometimes asking for travel advance,
Q: form submitted to get money back when they travel. What’s that number?
A: total reimbursement
Q: How approved?
A: Kott chair of legislative council, can approve on travel.

Wendt:
Q: Trip for annual energy council meeting, correct?
A: Yes, several of our legislators attended.
Q: every year?
A: yes
Q: This 2006? No different from others, several others went as well.
A: yes
Q: In paper work, in order?
A: yes appeared to be
Q: complete?
A: yes
Q: also process per diem
A: yes
Q: get per diem in Juneau?
A get daily per diem and if they travel eligible for lodging portion
Q: Kott provide with any phone bills?
A: No he did not?
Q: Legislators allowed to make personal phone calls if they pay for it?
A: Yes.

Witness Excused.

Next Witness Rick Smith. 11:06am - waiting for him to arrive
11:08 Oath
Name: Richard L Smith
Please spell it:
A: Can’t hear it
Judge: Will give you hearing assistance.
Can you hear me?
Smith, 2013 Forrest Park Drive, Anchorage

Marsh: Morning, Can you tell us about where your were born, grew up.
A: Massachusetts, first 16 years lived across the US, father in Air Force
Came to Alaska at 16 in 1961
Education: West high school, several colleges over next few years, no degree.
Q: Employment history.
A: Beside early small jobs. 1964. Worked for AA Railroad on the earthquake. Gandy Master. Labor on railroad, putting ties in, from Anchorage to Whittier, mostly in Portage area.
Lager in 60’s Union Oil company as truck driver in California, Marketing for company. Early 70’s bicycle shop, store manager till late 70s. The distribut?? firm for oil company, eventually owned that. 1989 to Veco on oil spill, logistics management and supply.
Asst. Mangers for log. and supply on Valdez Oil Spill, in office as sales coordinator, salesman, later management sales and marketing. Then promoted to VP govt. affairs.
Q: STill work for Veco?
A: Resigned this spring
Q: point in time when met Bill Allen?
A: Yes, fall of 89
Q: relationship with BA change?
A: Early mid 90s, more time with BA, sales, with Anchorage Times, negotiating the sale of times to ADN.
Q: Started govt relations?
A: probably mid 90s. Bill asked me to help him with those areas, support people who believed in same causes we did.
Q: did your relationship with BA change again in that job?
A: oh yeah, we became best of friends in last 10-12 years, both socially and business.
Q: What did in GR?
A: Helping campaign strategies and fundraising for candidates. Mostly federal and state, little local.
Q: During this time, matters that came before state legs important? why?
A: Yes, Legislation that would affect oil and gas and mining industry, most natural resource extraction industry, we paid attention.
Q: Come to meet members of leg.?
A: yes, lots of them
Q: recall meeting PK?
A: yes, don’t recall the date?
Q: continuing relationship when he became member of legislature?
A yes
Q: Ask about BA? Relationship 92-present day? A: Yes Q: Motorcycle wreck
A: 2001
Q: Any changes after that?
A: Hit his head on pavement without helmet. Caused disconnect between though process and ability to verbalize that. Say, would say meat for fish, sometimes he would catch it. Only major change.
Q: Still today?
A: Yes.
Q: Aware of effort to build Gas pipeline and effect on veco?
A: We were very much for that, what our company does and did, were really for it parties agreed this the right time.
Q Wen BA interested?
A: Early 2000s, economics seemed to come together, raising gas prices, need for gas to re-inject in North slope going done. Perfect storm, first time in history of Alaska, all the entities, govt. admin, legislature, producers starting to see they could get together and do something to cause pipeline to be built.
A: around 2001-2002
Q: What steps Veco take?
A: decided to get proactive, now might be the time to introduce legislation that would get the project moving forward, bring parties together to discuss. Created piece of legislation that would resurrect old legislation to allow natural gas pipeline to be started.
Bill: Stranded Gas Act. We went to PK asked him if he could support a bill of this nature and move it along, he said yes. HB 519
Q: 2005-6 Veco still pushing?
A: yes
Q: One or more than one?
A: 2005 or so, numerous talks, admin entertained, Murkowski entertaining proposals to build a natural gas pipeline, other entities, North Slope producers, three majors, talking with admin, trying to make pipeline go forward.
Q: who were the three?
A: Exxon, Conoco, BP
A: Fall 05 apparent that Gov M. working to have something to deliver to 06 legislature
A: Hopeful it would make it in 05, but didn’t.
Q: Become aware of PPT sometime?
A: Yes, sometime during that 05 06 course of events, negotiations focused on admin and three producers. 3 concerned with fiscal certainty and some definition in legislation that would provide for tax structure on oil and gas that would give them a long term look on what costs would be on this project. When hit legislature when gov. introduced it called PPT
A: Working economics of massive project. Their contention, without a stable tax structure, they couldn’t work out costs over long term.
Q: What relationship did that legislation have to Nat. Gas Pipeline?
A: Put forward, without PPT, there would be no project agreed upon for NGP.
Q: You understood PPT nec before GP?
A: Very definitely.
Q: What steps did you take to push PPT?
A: Once we realized producers wanted that in place before NGP, we supported that position. Was Governors and Producers position.
Q: How PPT structured? How change the rtes?
A: General idea, I can’t explain details. Establish tax rate on oil and a credit rate on new development and capital investment on North Slope. Tax credit rate to promote more development for enhanced recovery on NSlope?
Q: Gov and producers agree on specific numbers?
A: As I understand it, last minute they agreed on 20%tax and 20%credit?
A: Yes we supported that, because producers were our clients. We felt it was a major increase over previous tax. Surprised they agreed.
Q: What do you mean, your clients?
A: We work for them on N. Slope?
Q: What does Veco do for them?
A: maintenance, handle equip, new construction, build modules, ship and install them, engineering design work...
Q: If pipeline build and PPT passed, more work for Veco?
A: Yes, even if not direct contract work, expand work to be done, very hopeful to get work?
Q: Contact with legislators to promote NGP? PPT?
A: Yes we did, push 20/20?
Q: Think need to push legislature to get 20/20 passed?
A: Yes
Q: Any House member that planned to rely on to get it thru?
A: Very definitely. Used Pete in a lot of those ways, he was very significant. Carried our water whenever we needed him.
Object to leading.
Allow now, but be careful.
Q: Mr. S: tell us more about how by 2005 and spring 2006 your relationship with kott.
A: Good friends, were for many years, still was. spent a lot of time with him in Anchorage, Juneau, on the phone.
Q: What things talked about?
A: Person things, and what was happening in L., developing NGP bill, politics of the state to make gas pipeline happen.
Q Go to Juneau fair amount?
A: To visit with legislators, our lobbyists, other industry lobbyists, other folks had same interest in developing pipeline
A: Stayed in Baranof Hotel, Yes, had room we kept on monthly basis. Room 604.
A: Yes we had meetings and gatherings in 604.
Yes (kott had been in 604 prior to 2005
Q: 2006 session, anyone in state senate you relied on to push 20/20?
A: Ben Stevens and John Cowdery.
Q: 9/05 - 8/06 were you aware of wiretap on your cell phone?
A: No
Q: Jan - Aug 2006 know FBI had audio and video bug in 604?
A: No
Q: Phone call you had with Kott Sept 26, 2005, recall?
A: Can’t pin the date down, had a little look at it I could probably tell.
transcript on overhead
Wendt: Object to transcript being displayed, shown to witness to refresh his memory.
Judge: ok
Transcript down.
Q: remember discussing prospect of job with PK?
A: Yes
Q: did PK ask you for a job? A You got it.
Q: prior to 2006 how you involved with job for PK?
A: We’d talked for several years, both BA and myself, and Bill had made a commitment after PK’s tenure quit or wasn't’ reelected, we’d have work for him.
Could have been with Veco, or ...elsewhere
He reminded me he needed a job, his job to get pipeline through
Q: recall asking PK what are you going to do in this conversation?
pause. yeah. I do remember that?
Q: Chris Knaus?
A: Worked for Murkowski admin, prior on PK staff
Q: After talking about Kott’s job, why start talking about Chris Knauss.
A: Pete repeated he wanted to be a lobbyist, talked about Chris being a lobbyist. He made light of Chris abilities, I said he was good. If Pete jealous, Chris already employed and he (Kott) was on the outside of Veco at that point.
Q: That time period ever hear PK reference Barbados
A: Oh yes, standing joke.
Q: Did Veco have project in B?
A: Yes, Fuel handling and storage systems. Fairly significant for Barbados. A year in negotiations to build a new prison for Barbados. Bill and myself had talked to Pete about that, an ongoing potential project.
Q: Ever refer to wanting work in Barbados. Think he was serious?
A: No, we couldn’t even fill that kind of position?
Q: Why do you think he brought that up?
Objections
Sustained
Q: Every hear PK reference Barbados in relationship to legislation?
A: I don’t recall.
Pause
Jury watching intently
Q: Ask about Gabrielle LeDoux
A: State rep from Kodiak
Q: 2005 concerned she might not support position?
A: yes
Q: conversations with Kott to get her on board
A: many times, felt PK had best relationship in legislature with Rep LeDoux, felt he could get it done.
Q: Felt you needed her support?
A: Not sure.
A: Yes he did (talk to her to get her online)
Q: As 2006 leg session started did you come to learn PPT going to be introduced? When
A: yes, late January.
A: at last minute producers agreed, we wanted to get it passed
A: very concerned, when go in with your best offer to 60 people let them put their fingerprints on it, very hard to hold it, Very concerned.
Q: 3/4/06 [11:52am] Come back soon Feb. 2006, conversations with PK about PPT?
A: Yes. A: how we would hold 20/20 provision together in legislature
A; Yes [asked Kott to do things]
About to start different subject, should we recess?
Yes.