Friday, December 07, 2007

Kott Trial - Kott Sentenced to 72 Months

Peter Kott was sentenced today to
  • 72 months in Federal Prison. All terms to run concurrently.
  • 3 years supervised release
  • $10,000 fine
The government requested that he be remanded immediately because of minor infractions on his recent trip to Las Vegas (they mentioned that he didn't give his itinerary or phone numbers) The judge rejected this saying the issues were minor, he was not a flight risk, and that he will be in prison a long time and the holidays are coming up.

The judge had ordered Kott to surrender in Anchorage, but the defense argued that this would require him to probably spend time in the local jail. The government nothing to say on this and the judge agreed to let him self report to federal prison, but he would have to pay his own fare and there was no guarantee it would be at Sheridan, the nearest federal prison.

The judge rejected the defense request for the judge to ask for alcohol treatment in prison. The government argued this was a ruse to get a lowered sentence (participation in such programs count toward lowering a sentence).

Court adjourned about 10:20am after starting at 8:30am.

I'll spell check my messy and incomplete 'transcripts' then add them to this post. Probably 30 minutes more.

[11:43am It's taken me more than the 30 minutes. Here are my 'transcripts' - they are NOT accurate, but just a sketch of what was said. I'll add more comments in a second post]

December 7, 2007 Kott Trial
8:33am Judge seems to still have a cold, but sounds almost ok

Judge Sedwick: US objects to pre-sentence report - based on prop there were multiple bribes
Total value of benefits
Lack of two level upward adjustment
Implicit objections to others

Par. 100 description of when he wasn’t drinking
He has ability to pay a fine
That his lawyer didn’t make any suggestions to ??
Implicitly to 77 and 148 about upward adjustments

Additional, Mr. Wendt?
Court mention par 67

Par. 167 irrelevant - don’t have impact on sentencing.
Others - all statements of fact are supported and adopt them
Objections in order

[US Senate candidate Ray Metcalfe, Anchorage Assemblyperson Allen Tesche in the courtroom]

Mr. Wendt has laid out concerns:
Goeke: Mr. Kott asking for job from Allen - before jury, Allen in tape: ‘What do you really want to be?’ Kott: ‘A lobbyist for Veco.’ Allen: ‘You have it.’

Wendt: [defense attorney] This conversation very late in the recordings. Even this late, Allen didn’t know what Kott wanted. He simply answered honestly. He didn’t ask for help. Record complete with joke about Barbados.

Judge: I do find evidence in the record about seeking a job. - Discusses back and forth. Passage of PPT suggests that Kott failed to deliver and lost primary, reasonable that he not ask for job.

Payment of $5000 as a bribe. Fair to begin that defendant doesn’t dispute the $5K. Need to determine proper characterization of the $5K

Goeke: [Prosecutor] Testimony by Kott - he tried to characterize it as a loan, which is flatly contradicted by his testimony. He called it a loan, but made no attempt to pay it back even though he had the cash. Solicited more funds while had this loan. Based on the facts that Mr. Kott has established, it was clearly a bribe.

Wendt: I believe mr. Goeke is incorrect. He didn’t receive $5000 [?] while he was working for Veco. They have burden of proof to produce evidence or proof. No evidence provided at trial. They can’t come in with arms folded and say this is so. The only evidence is Kott’s saying it was a loan. There doesn’t have to be a written contract between friends. Burden on the government.

Judge: Both agree on $5000. I think the evidence that it was a bribe is insufficient. Allen and Kott were close friends and Allen admired Kott’s work ethic. To Allen, $5000 is not very much money, so he literally probably didn’t care if he didn’t get it back. To Kott, it was fairly significant. Probably he did think of it as a loan. This explanation is just as persuasive as the argument it’s a bribe. But I will keep the $5000 in the calculation of the value.

Ample room to argue about other matters.

Wendt: Multiple bribes issue - my argument would be - a person is expected to act in a certain way, then they receive a bribe, then they carry out what they are supposed to do. Then it turns out to be more difficult, so requests more. That would be multiple bribes. These are all instances after the PPT legislation. Wasn’t situation where we will keep giving you money so you will carry out what you are supposed to do. A bribe can be a payment to do something or a reward for something done. The argument then is he didn’t receive one reward, but multiple rewards over time. But wasn’t …. Fact that rewards came at different times. They aren’t separate instances … These are gratuities, not bribes. The $1000 should not be considered a bribe. That was payback for making $1000 donation.
Gifts because he liked PKott. Not bribes, gifts.

Goeke: I heard Mr. Wendt say that Mr. K was not guilty. The jury found these were bribes. Wendt wants to tether it back to PPT as a whole. But trial showed there were multiple events, amendments, in the course of that legislation. Tried to adjourn legislature, lobby other legislators, etc. These were all separate acts. Allen’s testimony about 519 in prior sessions. “We introduced that through Mr. K”.
Benefits in different ways - poll, money in fraudulent polling bill, cash for campaign contribution to Murkowski. It was a benefit - $1000 in his pocket he didn’t have before. These were motivation to keep Kott going toward the goal. They kept up until the very last moment. He was there till the very end. Helping in different ways at different times. The jury heard all this.

J. Sedwick - While I do agree the most relevant case is 9th circuit 3 factors to determine multiple
1. Whether all payments for single action
2. Installments
3. Method

Three distinct actions, thus multiple bribes

Goeke says different acts and different bribes - I disagree - but all of this was done because of Veco’s interest to have PPT at certain level. Room to argue that solicitation for job is separated in time and so should be considered differently. I think with respect to even that, continuing vitality was attributed to VECO wanting to have PPT passed at certain level. Don’t look like installments, but still related to single purpose.
Method: Whether same different or same payee.
Conclusion there were not multiple bribes. True, diverse ways and multiple forms, but disguised in different ways. Not multiple bribes, but hiding.
So, not multiple bribes.

Total value calculation. In pre-sentence report four levels in sentencing.

Wendt: Thank you your honor. Unable to find court precedent. Best I had was net value. If the court considers the job offer, only fair way is to say, how much is the job worth in money - net value. Examples of net value of contract. Here net value of job.
If a person is a lobbyist, don’t understand why the court feels the lobbyist would work 12 months out of the year.

J: Don’t have to argue that, I agree.

Wendt: Aren’t many special sessions, not all for oil and gas issues. Amount lobbyist gets paid is public record, available at APOC, on line. I’ve obtained record for lobbyist - Paul Richards - received $3000 per month in 2007. Even if we take Bill Allen’s testimony of $6000 month, for three months, we get $18,000. You make money by getting other clients, not just one. If he took this job, he would have to give up his hardwood flooring job. Net value has to subtract what he would have made in his hardwood flooring job. I would argue it wouldn’t make him more money, just he liked the job better.
Popular belief that lobbyists get hundreds of thousands isn’t true. Compared to Mr. Richards who would get $9000 minus $6000 for hardwood flooring = $3000. Difference is not getting hands dirty and get paid.

Marsh: [Prosecutor]
1. Evidence used: Best evidence the court can get. Not evidence about another lobbyist, but testimony at trial, under oath, subject to cross exam, about how much Allen intended to pay kott. That was $6K. It would be a multi year arrangement. The probation office was far from aggressive. They could have picked a higher amount for a number of years.
2. Limits of job. Legislature going to 3 months wasn’t even contemplated at that time.

J: Legislator can’t become a lobbyist for 3 years?

M: At the time it was 1 year. Not just lobbyist, but also consultant. Kott said, “I’m gonna be a consultant, like Knauss.”

J: The individual named - used both terms.

M: He did both. Maybe a deferred payment. Nothing suggests a deferred payment is not a bribe. “The value of the benefit received or to be received.” Mr. Allen told us under oath what he believed those figures to be. There is nothing to prevent the court from ruling this. One other thing. Net value. It seemed plain from the testimony, that Kott wanted this job to stop doing the hardwood flooring. The whole point was to change his job. Mr. Allen understood and believed, that if Mr. Kott did lobby for Veco, it would give Kott the cache to solicit other clients.
Not limited to session Many things a legislator can do outside of the session.

J: Difficult topics, both argued well. I couldn’t find case law either.

1. Undisputed $7,993 should be included. $1000 should also be included. Wendt’s argument didn’t hold water. Got benefit of contributing to Gov M’s campaign. Jones contribution to Brown’s campaign - worth $1000 to Jones. Allen’s $1000 was on top of that.
2. Same kind of problem several times, but in different context. Difficulty in calculating value in drug cases. Meth lab case about how much meth could this lab have produced. Very difficult. But one theme that also applies here. Appeal Courts have said, when you are estimating you have to err on the side of the defendant, after all, these are just estimates. We don’t know how long he would have been a lobbyist if he continued on that career. Wendt makes a point, but Marsh does too. If you had one good client, you could attract other clients.
Mr. Allen’s testimony does support $6000 prop, but not necessarily 12 months a year. Also consider a job, no matter how much people expect it to go well at the outset, may not. Kott had serious alcohol problem. Evidence lobbyists and legislators, maybe he would have overcome his dependency on alcohol, but could also have gotten worse. Multiple years is speculation. I find the lobbying job worth
$18,000 -
$29, 743 which - $7,500 each for 2 polls
Between $10 and 30K - four levels. Even if I hadn’t included the lobbying job, it would be the same. The $18K for lobbying
[Note: I missed something here because the math doesn’t add up for me. My notes explicitly include from the judge:
$1000 for campaign contribution reimbursement I’ve got
$15,000 (two polls) [I only remember one poll for $7500]
$18,000 (value of future job)
$5000 (for truck loan)
$7.993 (for flooring bill padding)
That comes to $46,000. But the judge said the total was $29,743. For the sentencing guidelines that falls within the $10,000 - $30,000 level in the guidelines. If there were only one poll and we deduct $7500, we’re well above $30,000. I’m confused by what the judge did and did not count in calculating the total amount received.]
3. Upward adjustment. First from Government.

Marsh: Organizer leader, manager, supervisor of criminal activity. While true that push from Allen and Smith predominantly, and Kott tasked to Lt if not more, by Allen and smith, but also to go out to make sure other people would do things. LeDoux confirmed that she did speak several times. Also Weyhrauch, when he moved to adjourn it was because Kott asked W to do so. Another example of Kott taking orders, sometimes on his own, went out to get others to do their bidding.
Wendt: This relates to leaders, managers, and supervisors ….. In this case Allen was leader, Smith a manager, STevens might have a roll, but wasn’t taking orders from Kott. LeDoux said he wasn’t doing anything different from other legislators. That’s what we do. I look at this as borderline frivolous. Bit was Allen and Smith. Kott wasn’t leading or organizing anyone. I just don’t see it.

J: I don’t characterize the argument as frivolous. But I don’t buy it. He did it because he was corporal or sergeant, not Lt. Or captain. Overruled.

4. Last guideline issue 9:25am whether he committed perjury
Wendt: Little to say more than I have written. He was on the stand for hours. He never denied that payments were made. He said they were - payback for contribution to M campaign. You can find it was a bribe, but it’s not perjury. The only thing is about whether future flooring work could have been done. Jury could have found them guilty. He was willing to do it fro free. Mr. Allen agreed to that. He does flooring for others for free or to pay back other favors. No perjury. He may have been looking at the facts through his own interpretation. Never said black was white. Grey area here of what is right and wrong. Clearly jury found against us, but that is not perjury. He testified truthfully about many things. Who can doubt he would do future flooring work for more money. HE didn’t testify the poll wasn’t done, just that he didn’t care about it. Mr. K’s position was, if you are doing a poll, thanks very much. He merely said, he didn’t receive the poll himself.

[Kott’s family - son (I think), daughter, Debora Stovern in court]

Goeke: He did commit perjury and got others to. Flooring, concocted story about what it was for, for work at Smiths and Allens house in future. The jury rejected it in the verdict. Smith said he knew nothing about it. Ms. Stovern said they made the invoice after the fact. That is …….. Perjury.

To the last day, about how he voted, that’s why he said he voted no. Mr. Kott talked about Mr. Moses. He would have voted to reopen the session. Directly ,,,,, told jury he came to decision of conscience. Couldn’t explain why voted no and only changed it after the final vote. Jury didn’t buy it. That’s the perjury.
But also lied to tribunal. Less a material matter, but cash bond at end of the trial. Kott said he didn’t have the money for that. Mr. Stovern, subordination of perjury. Kott’s comments about invoices, contradicted by Allen and Smith, plainly false. And jury had to find it so.

J. 1. False statement under oath in court
2. Material matter
3. Willfully, not by mistake,

I find it easy to conclude perjury for $7,993 and wouldn’t be surprised if Goeke said it was frivolous, but Wendt made it in good faith. I am completely convinced Mr. K made false testimony, willfully, under oath. Carefully crafted to deceive the jury.

24 and not 28

Any victims who wish to speak? NO

Wendt: Nature of offense and character of the defendant. Offense, unusual compared to others. Usually, receive money or benefits for themselves. Here
Poll he didn’t want
$7,793 went to son
$1000 check he’d written
Vague talk about a job

Not the same as finding $90K in his freezer. Nature of this offense makes it different. Not doing something for someone that directly harmed someone else. Normally, someone is paid for getting a contract. If ABC gets contract, other construction company doesn’t get the contract. He was a pro development person. He was just supporting the governor's proposal, that would have, we would hope, get a gas pipeline.
As it turns out there is harm because of the criminal investigation, but no direct harm because of what he did.

Has subtle characteristics that should stand out. From letters.
Gone out of his way to help people with no power fairly.
Flooring for free to people with power
Treated aides well. Treats garbage man and governor fairly.

He deserves a bit a break under 3553: apply penalty sufficient but not greater than necessary. Mr. Kott was a thoroughly decent man, doesn’t need to go to jail for ???months. Public service in politics doesn’t differentiate him. Air force does. Father worked in GM and he did very well. Then he met Mr. Allen. Genuine friendship. Mr. A has some bad points to personality - pays people to get things and doesn’t follow the rules. Also very seductive. Also worked up from poverty. Two individuals from same political philosophy. Formed friendship. Lived with Allen for three months. With someone in excess of $100 million. Still getting up early to do hardwood flooring. Didn’t ask for a dime. He was almost embarrassed to ask for a job. He knows that Allen gave others a job - Stevens and Anderson. Defendant who was almost seduced into this. I know he was an adult man and that’s no excuse. In some ways Allen is very charming, and he wanted the same things allen wanted. I would argue to the court, nature of the offense, nothing for himself and characteristics and value system, should result in sentence that is lower than guideline the court has found. Finally Kott is not a young man - 58 - he’ll be past 60 when he gets out. No need to to protect public. Five years would be enormous for him. Please, this is not a bad man.

Fine issue? Now that level 24, minimum is less, from $10-100K. We would argue for no fine. Yes, Mr. K has saved up some money. Still married to his wife. She has some interest in. He won’t be putting in hardwood floors at 60. He could certainly pay the fine, it would leave him very little when he gets out.

Marsh: I find it interesting when discussing the value of the Veco job that they ask you to consider net worth of hardwood flooring job, but now say he couldn’t do hardwood flooring in two years.

Any public corruption case strikes a blow about faith in political system. Those are normal cases. But when prominent and powerful member, when that person is caught on tape soliciting bribes that affects billions of dollars of taxpayer money. We agree that it is unusual, extraordinary, egregious behavior. Corrupted the views of the public that had to watch what was really going on with that bill.

Many defendants ask for leniency based on circumstances or nature of crime. In neither of those can he take advantage of arguments. He’d made something of himself - former officer in the military. Classifying secure documents. Had profession. Job. Former career. Family. Ten years in legislator. Not a victim of extenuating circumstances, He did it himself.

These were multiple bribes, obvious steps at concealing, and perjury, purpose to gerrymander tax rate of money coming off the north slope. We all know the oil is increasing and revenue is significant. Purpose was to keep the tax rate lower. Second, we submit that facts and way it came about makes it extraordinary.

Brazen - beg, borrow, steal, sold my sole to the devil. Bragged about lengths to which he would go to make good for bribes.

Most disturbing, statements he made about his constituents. When he didn’t know people were looking - tape - I’d vote for 30% tax if it weren’t this man here. He could tell constituents whatever I want, I use them, I abuse them. What is the impact of former speaker of the house saying I use them I abuse them? There is no way to quantify that harm. This does take this out of the sentencing guidelines. We disagree this was not all because of Bill Allen’s seductiveness.

Mr. K’s sentence has already been compounded because of his perjury at trial. And to deter and punish - his own and son’s testimony ….. I’ll try to contain myself on the idea there is no direct harm. Unbelievable to think there was no harm by those who tried, thru bribes to affect the PPT. That that is less criminal than sending $30,000. It didn’t go to contractors, it went to state of alaska. Billions.

Kott had enough money to pay his son $8K, but he didn’t. He asked for money from allen.

3553a6 - unwanted sentence disparity between different defendants. When you compare the conduct - Mr. Anderson’s conduct pales in comparison to Mr. Kott’s. He did all sorts of things - detailed - shut down whole House to shut down for Allen. This deserves a much more significant sentence than what Anderson received.

This is a bout choices. Unlike many here. Mr. Kott didn’t have to be here. He wasn’t forced into legislature because he didn’t have enough money. He chose this. He sought it multiple times. Weyhrauch offered things of value in exchange for doing their bidding, that it was his choice. We submit that sentencing range set for in the level 28 is the bottom level and ask the court to depart upward at the high end of 28 - 97 months. ????

Mr. Kott:

I want people of AK to know I’m deeply sorry for my actions and words. All my actions, I truly felt I did in the best interests of the State of Alaska. My statements away from the floor of the legislature, I deeply regret and apologize. I hope that the opinion of me will soften over years. Always been my goal to bring out the potential of the state. To the court I apologize for being here and taking up your time.

J: Thank you Mr. Kott. This court directed by congress to consider:

1. Nature and circumstances of the offense - Mr. Marsh has the better argument. This Offense has cause people to questions the whole political system of Alaska. Causes us all to wonder what really goes on in Juneau. Maybe Kott in his heart of heart really believes. Whether right or not, but needs to be decided in legislature free of the influence of allen and smith. Whether their view is correct or not, it is driven by greed. He knew he need to do the bidding of his customers rather than the publics. I don’t know if 20/20 was the best legislation. I have no way to know. But it should have been decided on its merits free of Allen’s influence. Money involved was indeed hundreds of millions if not billions of dollars. Of interest to everyone in the state of Alaska. Every PFD recipient.

2. Surprising that Kott convicted with the crime he was convicted. Given his background and air force. Such service is so we can live in society that is free and democratic. So all the time he spent to defend that political process, came to naught because he joined those who would corrupt it. History would support modest sentence, but the nature of the offense os substantial that his own previous history is much outweighed.

3. Promote respect for justice and crime committed
At sentencing level or even higher justified. Defer others in the future. Allen may be seduced Kott, but Kott has considerable experience. There are always people, often with money, who can overcome people. Need to stiffen some backbones. Need to put priorities in order, public first over close friends.

4. Special needs - medical care, education. No specific. Can’t describe him as middle age, but no particular needs. Can be provided in institutional setting

4. Protect community from Kott. I’m convinced Kott isn’t going to indulge in criminal conduct in future. Only possibility is alcohol abuse. Not significant risk

6. Range 51-6? Months - Disparity. Guideline is usually the best way to do that. But here we have related cases. Mr. Anderson’s sentence has to be acknowledged and Marsh is correct that although Anderson’s conduct bad, Kott’s was even worth. Kott has some stature. Anderson was basically a lightweight. Kott was a leader among our elected officials. So I think significantly above Anderson's and guidelines is warranted.

7. Restitution not relevant here

Looking back at the trial and everything and consider to apply a sentence sufficient but no more than necessary 72 months is sufficient. Gov’s 97 is more than sufficient.

72 months all terms to run concurrently
3 years supervised release concurrently
No firearm, controlled substances - waive drug testing. Only substance abuse problem is alcohol.
Participate in treatment program. Testing for alcohol use.
Cooperate in collection of DNA
Assist on financial information
Not possess
I find he does have ability to pay fine - $10,000 immediately - installments ok. Interest not waived. And special assessment of $300.

I don’t believe Govt. Is seek remand at this time.

Goeke: We are. Have notified Wendt prior. Aware that he made trips to Las Vegas. He is not being compliant

J: Didn’t give itinerary or phone numbers. Agree not compliant. Not right, but not as serious that usually makes remand.

Goeke: We agree we didn’t ask for remand before sentencing. But - not danger to the community..

J. Your real concern is flight

G: Appropriate, some concern with flight. Be truthful. Not only time secretive about whereabouts, about funds.

W: For the record, I’m the one who said he didn’t have funds, and he didn’t. Regarding the memo….I just saw this today, didn’t know about this. I would like to listen to the tape. Mr. Kott says he gave them his cell phone number.

J: That isn’t enough, but there are further allegations

W: Anderson wasn’t remanded. No issue here

J: I agree. If no danger of flight. Especially at holiday season. He’s going away for a long time. Government’s request for remand is denied. But, if there are any violations of stipulations, you will be. Do you understand Mr. Kott. You need to surrender here in Anchorage. Until facility designated. Any recommendations.

W: We would suggest Sheridan.

J. I do recommend Sheridan because that is the closest to his family.

G: Count one has ????? OK will be served concurrently.

W: We would request that he self report to Sheridan. If he reports here he will be in the jail here.

G: no problem

J. I will amend that. Mr. Kott that means you have to pay your own way there. And it may not be Sheridan. I’ll recommend it.

W: Court has recommended for alcohol treatment. We ask that the J ask for that from the BOP.

J: Govt. Have a position on that?

G: I believe that is based on attempt to lower the sentence. I have yet to hear Mr. Kott talk about that.

J: I agree Mr. K won’t have alcohol while incarcerated and he’s a smart man and can deal with that problem when he gets out.

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