Pete Kott Trial Day 13

U.S. District Court for the District of Alaska
Court Calendar for Friday, September 21, 2007

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9:00 AM	3:07-CR-00056-01-JWS	Judge Sedwick	Anchorage Courtroom 3
USA vs. PETER KOTT TRIAL BY JURY - DAY 13

When I got back to the courtroom after posting during the break, the Prosecution had canceled its rebuttal. So the judge told the jury that he'd thought that possibly they could hear the closing arguments today, but it was better to give both sides the weekend to prepare. He thanked them for listening so diligently, warned them not to talk to anyone about the trial, or to listen to tv or radio news, read newspapers covering the trial, or the internet. Then at about 10:45 he recessed them for a long weekend. We could hear a cheer from the hallway as the jurors walked out.

Then the judge asked how long the defense needed for the closing.
Wendt said, "As much time as the prosecution."
Judge Sedwick: "OK, five minutes for each."
Wendt: "That's fine with me."
Government said it had gone over a little in the last trial, so to be on the safe side they asked for an hour and a half.
Sedwick: Then 90 for the defense. And it's ok if you go 95, but I would like us to finish by noon. I don't want to go on into the afternoon.
They then agreed to meet after lunch today to settle the jury instructions.

I went to the Clerk's office to get the proposed jury instructions. I see now that what I got was Defendant Kott's Objections to Jury Instruction, NOT the judge's proposed instructions. Whoops. Good thing no one's paying for this. All right, this says,

The government has charged Pete Kott with one count of Extortion Under Color of Official Right, or the Hobbs Act, based upon four separate alleged benefits:

1. a promise of a job
2. $1000 in exchange for a campaign contribution to Frank Murkowski
3. $7,993 in inflated flooring to pay Pete Kott Jr. for rnning Kott's re-election campaign, and [I thought the Kott's did hardwood flooring. Is inflated flooring like walking on an air mattress?]
   
4. a poll for Kott's re-election campaign.

Well that's only one of the charges. So apparently they are satisfied with the rest of the language, or they submitted other objections. Anyway, here are photos of the language the defense would like for this charge. Now, it's 4:23, so presumably they have worked out the final language already. Click on the pictures to enlarge them.






Tonight is Erev Yom Kippur so this blog gets to rest until Saturday night at the very earliest.

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.

Is This Really a Story of Importance?

Tribal Fires linked to this TPM Muckraker post that begins like this:

Recently, Sen. Lisa Murkowski (R-AK) appeared in the news for purchasing property on the Kenai River at far below market value last year from Alaska businessman Bob Penney. It turns out, the plot is nearby one of her more notable earmarks: a three-mile stretch of road that abuts the property of about 50 residents, for which Murkowski has secured $6 million in federal funds since 2003.

If you read closely, you find out:

1. This was a project initiated by local home owners who didn't like the increase summer traffic going to a nearby federal wildlife refuge.
2. This probably wouldn't have affected commuting from LM's returned property or Penney's
3. Penney doesn't seem to be involved. The local advocates caught Murkowski's ear on a lucky plane trip.
4. It all began in 2002, well before, presumably, Penney offered the deal.

So, making a big deal of it - unless there's more to be uncovered - seems a like throwing meat to the lynch mob.

On the other hand, it sheds more light on the serendipitous way priorities are set and money is spent. A group of people living on a fairly remote road, though on or near the Kenai River, are upset about the dust and traffic on their road, that happens to end at a wildlife refuge and the Kenai River.

I can understand, especially in the age of Uncle Ted, their seeking federal money to help fix the road. But who sits down with the map of the whole state, its infrastructure, and the needs, and says, "These are the most critical roads, bridges, etc. that need money, that will give the most bang for the buck"? I know most federal and state agencies are asked to take that sort of approach in their budget planning. So it's the people whose project doesn't come in high on that list, who I suspect jump the queue and go directly to their legislators to get their projects funded. And with no one else to argue why the project isn't as important as those on the list, or should be funded some other way, the Senator can be persuaded and can also look responsive.

And those people are gonna vote for that sort of responsiveness.

One of the benefits of living in Alaska is that you can talk personally to your elective officials if you want. And when our Congressional delegation can slip in money that otherwise might have gone to Tennessee, well, then all the prioritized Alaska projects get funded, plus a few more. The voters of Tennessee should elect more capable Congressfolk. Or so goes the logic. I'd like to think about a legislator who asks, "So have you submitted this proposal to the DOT people who evaluate the state needs? If not, that wouldn't be fair to the people who have gone through the proper channels." That'll be the day.

But the facts presented in the story don't seem to have the taint that the headline and first paragraph suggest. Will this increase the value of Penney's property? Does the Alaska Fishing Classic use this road for their important guests? Maybe there is more here. But without that, no need for the teaser headline and opening paragraph.

Bob Penney on the Web - Board Member, Kenai River Sport Fishing Association

Yesterday I said we need to know more about Bob Penney. Here's a contribution, and I'll post more as I find it. [I'm not looking for current news about the Murkowski land deal, but other things that will help me understand who he is.]

Board of Directors
Robert (Bob) Penney

Work:
Penco, AK

Personal Info:
Married - Jeannie
4 Children
10 Grandchildren
Has lived in Alaska 50+ years.
Resides at River Presence - a private family fishing lodge on the Kenai River.
D.O.B. 05-03-32

Business Acitivties:
Self-employed businessman since age 26.
Owns and operates Penco, AK, a family owned real estate development company, which holds porperties in Alaska, California, Texas, Utah, and Washington.
Has been engaged with various retail businessmen in the Anchorage area.

Organization Affiliations:
Past President of the Anchorage Chamber of Commerce -1980
Co-Founder and past Chairman of Resource Development Council
Past board member of Anchorage Economic Development Commission

Fisheries Activities:
Founder, past chairman and present board member of the Kenai River Sportfishing Assoc.
Formed and helped fund HAB-PRO Habitat Preservation and Restoration efforts on the Kenai River
Founded and Chaired Kenai River Classic Sportfishing Tournament
Past member of the North Pacific Fisheries Managenment Council
Member of Alaska Sportfishing Assoc.
Lifetime member of Alaska Flyfishing Club
Partner/Owner Golden Horn Lodge - Dillingham
Shareholder - Trapper's Creek Smoking Company, a fish smoking, processor, retail and wholesale supplier
Long time advocate for public fisheries in Cook Inlet
A lifelong dedicated sports angler

"Grandpas's [sic] are here to take grandkids fishing"

Board of Directors, Kenai River Sport Fishing Association bio

Lisa Returns Property

The ADN headline today is "Murkowski returns disputed land." At least Lisa M. recognizes that some people could see this as a conflict. But apparently she still doesn't completely get it.

Murkowski said it was a heart-wrenching decision because she, her husband and their two sons -- all avid fishermen -- have long sought a place on the Kenai River.

And how is it that Bob Penney made the offer to her and not to me? Is it possible that one factor is that I'm not a US Senator who'd make a nice, useful neighbor? It's the same reason Tom Anderson got all those jobs where he didn't have to do too much.

Selling back the land was a good step. But it doesn't absolve her of any wrong doing. After all, if I rob a bank, and then when the cops appear to be closing in on me, I get remorseful and return the money, they aren't likely to dismiss the charges. It may affect the sentencing though.

On the other hand, I must say in Lisa's and other politicians' defense, people can get pretty ugly venting their anger. I'm sure much of the worst invective comes from people transferring their own self loathing. After all, if the ADN report is accurate, Lisa got bad advice from the Ethics Committee staff.

"Senate ethics says that if the properties are used for personal use, you don't disclose it," she said. She said she disclosed the mortgage for the property but not the transfer, based on advice from Ethics Committee staff.

Murkowski dismissed criticism that she used a Ketchikan bank with close family ties -- she once sat on the board, and her sister is a current shareholder and director. She and her husband received a two-year balloon mortgage known as an "equity lot loan" that can be rolled into a construction loan to build on raw property.

I think we all go to friends we know 'in the business' who we trust and think will give us a good deal. In the case of the bank, I suspect she would have gotten a special deal just because of her family connections to the bank, even if she weren't a prominent politician. Yet this form of 'privilege' where you get deals that aren't available to the average person, is the kind of thing that blinds the privileged to the realities of life of the rest of us who don't have that sort of connection. While I think it is relevant to investigate, I think the personal invective reflects more on those invecting than on Murkowski.


One danger is that people like Cheney and Bush who stonewall every step of the way, who attempt to destroy those who oppose them (ie outing Plame) get off through their bluffing, whereas people who step forward and try to make things right get punished. Though there is nothing in the ADN article that suggests Murkowski thinks she did anything improper. The only thing she seems to be concerned about is the public trust (translation: her electability).

"While Verne and I intended to make this our family home and we paid a fair price for this land, no property is worth compromising the trust of the Alaska people," Murkowski said in a written statement.

And she does fall into blaming her accusers:

"There are those who will do anything to bring down the strength of the Alaska delegation. I think that is a reality. I think what I do is to get up every morning and do the best job I can representing Alaskans. That's what I was elected to do."

USA vs. Thomas Anderson Day 6 (my day 3)

U.S. District Court for the District of Alaska
Court Calendar for Monday, July 2, 2007
Current as of 07/02/2007 at 10:00 PM


9:00 AM 3:06-CR-00099-JWS Judge Sedwick Anchorage Courtroom 3
USA vs. THOMAS ANDERSON
TRIAL BY JURY - DAY 6

You can see my posts on Day 4 and Day 5.

I didn't make to court til 10am when Stockler (Anderson's attorney) was still cross examining Frank Prewitt, the FBI's main wire in the case. Basically Stockler was going back over the transcripts, plus adding in some that apparently his office had made of tapes the FBI didn't make transcripts of, trying to get Prewitt to admit to some different interpretations of what was said:

1. That basically Anderson was a guy totally into politics who was eager to help, eager to please any constituent or even anyone coming in. Thus he helped out Prewitt, not for pay but because that is the kind of guy he is.
1. He did this by trying to show that Anderson helped Prewitt out before money was involved and going through the transcripts to show that Anderson hadn't asked for money.
   Prewitt's response was that Bobrick had asked for the money so Anderson didn't have to
2. That the things Anderson did for Prewitt were consistent with Anderson's values (supporting private enterprise, for example) and they were the kind of things that legislators do for lobbyists all the time.
1. He used Rep. Mike Hawker as a regular example - if you had written talking points or a letter to sign as though it were his own would you think there was something wrong?
   If you make a campaign contribution to someone you could ask him do these things and there would be nothing wrong?
2. So, what's the difference then between what Anderson was doing and these others?
   
3. Stockler asked Prewitt whether the work Anderson did to try to change the staffing levels at half-way houses wasn't just good government. Even though they didn't have the number of residents they were designed for, they had to continue full staffing which made no economic sense. But Commissioner Antrim was being bureaucratic and wouldn't budge or give a good reason for his position. [Antrim was a witness in the afternoon. I got the impression he was added to respond to this characterization.]
   Prewitt's response each time was: The difference is that he was working for me. Or I was paying him to do these things. [I would also note that the campaign contributions are reported to the Alaska Public Offices Commission, but these were secret even from Anderson's then girlfriend Rep. McGuire.
3. Anderson never asked for money, that he never considered the payments related to the work he was doing for Prewitt (see 1 and 2 above) and while he asked Prewitt at various times whether there was such a connection or there was a conflict, Prewitt never said yes. If he had, Anderson would have ended it there and Prewitt wouldn't have gotten what the FBI wanted. He challenged Prewitt to show where in the transcripts Anderson had asked for money.
1. Prewitt said he couldn't recall the specifics and would have to go through the transcripts, but that it was clear Anderson knew there was a relationship between the money and the work. And it wasn't his job as a lobbyist to give Anderson legal advice
2. Stockler also repeatedly asked Prewitt what the FBI told him to do or not do.
1. Prewitt: I was there to listen, ask questions.
3. Anderson didn't ask for money, because Bobrick was taking care of that and Anderson knew Cornell (the prison company Prewitt was a lobbyist for) really didn't care about the ads in the sham internet company that Bobrick set up to hide the source of the payments to Anderson.
4. He also tried to get Prewitt to say that Anderson didn't want it known he was working for Cornell because it would be politically damaging, not because it was illegal. He had some union support that he could lose if they knew he was working for Cornell. [Of course that is one of the purposes of disclosure laws, so voters know the potential conflicts of interest of the candidate.]
   
5. At another point, Stockler was trying to show that there was nothing in Anderson's past that would indicate that he was unethical and would accept illegal money. That caused the Prosecuter, Mr. Marsh, after the jurors left for the morning break, to say that since Stockler had raised this, an excluded part of the transcript which showed that Anderson had worked for Veco on contract "for doing nothing" (according to Bobrick) should now be brought in to show that there was something to indicate this. Marsh was allowed to bring this back in when he did the redirect with Prewitt later on.
6. Finally, Stockler worked to clear Lesil McGuire's name by getting Prewitt to say he had no reason to believe she knew anything about the arrangement Tom Anderson had with him and Cornell.

And then it was lunch break at noon.
Back in court at 1:30. Stockler finished the cross examination at 1:47 pm.
Marsh was up right away. I have to say, I've been impressed had how quickly the transitions go from one attorney to the next. Marsh worked to get Prewitt to reinterpret what had been said in the morning. It was clear that Prewitt is a witness for the prosecution. He did not let Stockler push him into anything he wasn't ready to accede. He would say, "I have to read the transcripts again before I can say that." He would disagree with Stockler's characterization. But for (Prosecutor) Marsh he was always supportive.

Marsh started by asking what his instructions from the FBI were. Did they set rules, parameters?

1. They identified specific persons of interest
2. He was not allowed to propose something illegal, just carry out my business as a lobbyist
3. He was instructed not to shut down any illegal proposals that came up. "It would have a chilling effect"
4. He was never told "you have to bag a legislator."

All this seemed to go to answer Stockler's point that he was proposing the illegal activity and that if he had told Anderson it wasn't legal, Anderson would have stopped right then.

They went on to:

1. Highlight times when Anderson did, in fact,
   
1. show he knew that the Internet Journal ads were not the reason Cornell was paying him (Anderson said, "Quit the BS on the banner [ads] thing.") and that in fact that Prewitt never saw any articles that Anderson or anyone else had written for it and he's pretty sure it never came to be
2. show places in the transcripts where Anderson did ask for money - particularly, the Nov. 16, 2004 meeting where Anderson came to Prewitt to complain that Bobrick was taking a big cut out of his money for himself and that he really needed money. Prewitt said rather than cut out Bobrick, he make an extra payment for Anderson. Another was where Anderson was asking if he should get out of the legislature (because the pay is so low) and work for Prewitt. Anderson answers his own question, "No, you want votes in the legislature."
   

Then Stockler asked another 15 minutes worth of questions of Prewitt.

At 3:25pm Mark Antrim, former Commissioner of Corrections was the witness. After giving a brief biography - first job after getting a BA in Justice at UAF, was as a Corrections Officer II for the State of Alaska in the 1980s and appointed as Commissioner by Gov. Murkowski. Palin asked him to resign and he is now back as a Corrections Officer II until retirement soon.

He gave a totally different view of the logic of the Half way house staffing levels. Stockler had argued and Prewitt hadn't argued[disagreed], that what Anderson did on this was simply good government to stop a blatant inefficiency of forcing the contractors to keep full staff when they had only a few residents. It was an example of how the work Anderson did was stuff any good legislator would do.

But Antrim's picture was much different. There was increased pressure to fill the halfway houses and so more prisoners who normally would be classed at a higher risk level were being sent to halfway houses and the number of 'walkaways' or prisoners who escaped [was going up fast]. A corrections employee had been sent out to audit all the privately run halfway houses [and] found that most had only one staff when they should have had three. The halfway house contractors - Cornell and two others - were told to get back to contract mandated staffing levels. One complied right away, but Cornell and another gave a lot of 'pushback.'

Although Anderson and Antrim had had good relations before, things were a little tense this time. Anderson wanted Antrim to make a supplemental budget request to increase funding for the halfway houses. Antrim said no. The head of OMB would laugh at him. Why would he ask for more money for something they already were paying for based on the contract with Cornell?

Stockler, in the cross examination, raised the question about Antrim and Hawker being like oil and water. Antrim thought that was a fair assessment, but added that before he left his appointment he told Hawker that in hindsight he was grateful for his close oversight - it had helped him run the Department better.

Finally, at 4:04 - Bill Bobrick began his stint as a witness. We'd heard a lot of about Bobrick to this point so it was interesting to see the actual person. I thought he walked in rather slowly, not at all eagerly. He was a lobbyist who lobbied the Municipality of Anchorage. He'd started construction work in Alaska after his third year of college, gotten into union work, executive director for the Democratic Party of Alaska, became a legislative staffer, and eventually realized that people would pay him to help them deal with the Anchorage Municipal Assembly. He's been doing that for 20 years. He met Anderson around 2001 when Anderson was on the school board and both worked as lobbyists for clients needing to deal with the Municipality of Anchorage. They hit it off and they saw a future lobbying business together after Anderson was out of the legislature. Anderson, a Republican would work in Juneau and Bobrick, known as a Democrat (though he's now registered Independent) would stay in Anchorage. [All this background on Bobrick was stuff he said when asked to give his background.]

And soon it was 4:30 and adjournment. It's late, and while I should proof this, I'm too tired to do it. So I'll post as is. I'd love to add some pictures, but you can't bring your camera into the court side of the Federal Building. There was an artist doing great drawings for Channel 4 in court in the morning.

USA v. Thomas Anderson

9:00 AM 3:06-CR-00099-JWS Judge Sedwick Anchorage Courtroom 3
USA vs. THOMAS ANDERSON
TRIAL BY JURY - DAY 4


Disclosure First: Tom was a student of mine a while ago. I don't remember when I talked to him last. However, I have been disturbed by this case since the beginning. I haven't blogged about this, in part, because I can't talk about anything I learned about Tom through our student/teacher relationship which is the only relationship I've had with him. I decided I should go to court and hear the evidence for myself. What I say here is strictly reporting what I saw in court, stuff anyone who went could have seen.




First, walking up to the court building, I saw someone being interviewed. I found out in court it was Tom Anderson's attorney, Paul Stockler. Inside, security took my camera, along with everyone's cell phones, until I got out. The courtroom had seating for about 120. I got there after the lunch recess and there were about 40 people in the audience, including a German couple whose Anchorage friend brought them. It was down to about 30 when the court was adjourned at 4:30.

The Situation. The Prosecutor Joe Bottini (I assume, since I got there after introductions, but I'm going by today's ADN story on yesterday's opening statements) [correction: it was Nicholas Marsh] spent the afternoon presenting audio and (one) video tapes. On the screen on the wall were the transcripts of what was being said, a yellow highlight following along, sort of a courtroom karaoke. Most were hard to understand and read along. One juror said it was too hard to hear. The judge reminded the jury several times that the actual audio, not the transcript, was the evidence.
On the witness stand was Frank Prewitt, former Corrections Commissioner who became a lobbyist for Cornell Companies, a Houston based private prison corporation. A bit of tape would be played. Then the Prosecutor would ask Prewitt what it meant. Prewitt was an articulate witness explaining it clearly. A couple of times Stockler objected that Prewitt couldn't know what Tom Anderson or Bill Bobrick (a key person on the tape) meant. The judge agreed he could say what he understood it to mean.

The People on the Tape:
1. Prewitt was, according to the ADN story, already being investigated. He was the man with the wire. He was a lobbyist for Cornell.
2. Bill Bobrick was the main lobbyist working with the Anchorage Assembly, a good friend apparently of the Mayor, and generally a supporter of liberal politicians. He was also portrayed today as a trusted mentor and adviser to Tom Anderson.
3. Tom Anderson was a Republican legislator, in his early 40s (The other two 15-25 years older I'd guess.) As it came out in today's tapes and Prewitt's comments, he was in financial trouble, needing $2000-2500 per month just for child support.


The Line of Argument

1. Cornell Companies needed four things:
A. A certificate of need for a new prison
B. A feasibility study saying they could provide comparable prison 'service' at less cost than the State of Alaska.
C. A positive review of the Whittier Procurement (Something - can't read my notes) for a joint venture with Cornell to build the prison. Apparently some legislators had questions about the process.
D. Get the private prison money that goes to the Department of Corrections back into its own BRU. Prewitt explained that a BRU is a Budget Review Unit. Money can be moved around within a BRU by a department, but not from one BRU to another. Private prison money had been in a separate BRU, but Gov. Murkowski had changed that and Corrections then had moved money originally allocated to private prisons to other accounts. They wanted the separate BRU again so private prison funds would stay for private prison stuff and couldn't be switched to other Corrections Department needs.


2. Bobrick was proposing to Prewitt on the tape, that Tom Anderson would be a good candidate for helping get Cornell's needs met.
A. He was a legislator, in the majority party, and could get appointed to the key committees relevant to the Cornell's needs.
B. He needed money.
[Today the prosecutor was trying to build the case against Anderson and we only heard from Prewitt. What was Bobrick's motive? He wasn't going to get any money out of this based on today's testimony - though the newspapers said a while ago that he kept a chunk of the payments for himself. The evidence today suggested that this was a way for him to get Tom badly needed funds, and that Tom was a rising star and in the future he would remember who helped him.]
C. Tom was 'a closer' and would finish what he started, he could be counted on.

The Scheme: Bobrick was setting up a quarterly electronic public policy newsletter that Tom among others (Brian Rogers was mentioned) would write for. It would be bi-partisan and they would sell advertising. Cornell would buy $24,000 worth of banner ads. Prewitt, on the tape, made it clear to Bobrick that Cornell didn't advertise because they got contracts from government. Thus they had no reason to spend money on advertisements. They didn't care about the newsletter, they cared about Tom helping them in the legislature. The prosecutor asked several times - did Bobrick think this was a real venture? And the answer was, "Yes, he thought he could make money off it." But from today's testimony it seemed clear that while they might set up a newsletter, the real purpose was to channel money from Cornell to Anderson. It would go to the Newsletter company (that had different names throughout the testimony) and the company would pay Anderson. No one mentioned yet whether there eventually was such an electronic journal, and if there was, whether Tom wrote any articles. The question about whether they thought there would be a real journal might be leading up to the fact that there was no such journal in the end and which would make the payments seem even shadier. But I'm speculating now.

Anderson's Rationale On the video tape of the breakfast at the Whale's Tail at the Captain Cook Hotel - all you could see were Tom's hands - Tom was saying something like, I don't see any problem here because I'm doing these things because they are the right things to do, not because of the contract. He gave an example of working against a tax on RV Rentals. I didn't say, I'm against this because my mom rents RVs (which she did), but because I had the facts and the figures to show it was a bad idea.

Many politicians have argued that the money they get in campaign donations isn't a bribe. People donate because they want to support someone who believes the same things they believe. And there is validity to that argument. The problem here, at least with the testimony given so far, is that money is passing hands, and there are some specific deliverables - the four items listed above at (1). And the creation of a company so the money couldn't be easily traced. And no one was planning to tell anyone else that Anderson was getting paid by Cornell. I can imagine that the promise of an answer to his financial problems helped Tom rationalize that he was doing nothing wrong. Of course, that is the whole point of conflict of interest - our perceptions get colored by the conflict. Which is why telling others allows less biased minds to weigh in on the matter.

That covers the key points I got in court this afternoon. There was one more interesting tidbit that is totally irrelevant to the case. When Bobrick and Prewitt were at breakfast without Tom as part of the banter, Bobrick said about Ben Stevens (US Senator Ted Stevens' son), "He's got his father's worst qualities, but not his brains." Oh, my what we say when we don't know the other guy is taping the conversation.

Actually, there may be some relevance to Ben Stevens here. Trying to prove to the jury that Anderson's consulting contract was just a cover to pay him to do Cornell's business may be practice for the anticipated Ben Stevens trial. (Though he hasn't even been indicted yet.)

And one more comment. It must have been even more bizarre to Tom than it was to me to watch these two men, one of whom purportedly was his trusted mentor, talking about him and setting him up to do this. Does he feel betrayed? Or does he look on Bobrick as looking out for him, helping him get much needed cash? And if the evidence eventually shows beyond a reasonable doubt that Tom is guilty, what about these other two, older, much more experienced men, who set Tom up? Why do they get to bargain with the FBI? Just because Tom is the legislator? It seems what they were doing was as bad or worse. But, not all the cards have been played, so let's hold off on a conclusion.




When I walked out, the TV truck was still there across the street.

Go to next day post.

The New Pirates of the Seven Seas

The googling I did on the earlier post on Carnival Cruise Lines has got me more interested in the whole cruise business. Of course, front page NYTimes stories on Ted Stevens and Don Young, also helped pique my curiosity. So here's a book of interest to Alaskans whose legislature has been tinkering with an cruise line initiative Alaskans passed last fall at the behest of the cruise industry. Of course, this is a good time to raise issues about campaign contributions in Alaska.

The book's called Cruise Ship Squeeze The New Pirates of the Seven Seas by Ross A. Klein published by a Canadian company, New Society Publishers. USD$ 17.95

I don't normally feature books here that I haven't read, but they do have a 5 1/2 page overview of the book available as a pdf file. And I'll offer some quotes here along with my comments. And Klein, a college professor, has published numerous articles and books on the topic, and even testified before Congress as an expert witness. He's not without credentials and expertise And he runs www.cruisejunkie.com, with information on environmental issues, health issues, crew issues, etc. It also says on the New Society website that he's been on 300 cruises. So if he's writing about cruise lines, I bet they're all tax deductible.

THIS BOOK IS ABOUT MODERN PIRATES— the ones who sail huge cruise ships from one port to another and offload thousands of day-visitors at a time.

OK, the Pirate title is kind of provocative and certainly tells us what the author thinks before we even open the book. So we know we have to read this book critically and skeptically. But at least I'm hoping it will give us some good leads and facts to check up on. And it can't be any more biased than the cruise industries ads all over Alaska last summer and fall trying to defeat the cruise regulation initiative. And I recognize the marketing value of a catchy title, so I've used it for this post.

Passengers buy tours ashore provided by local folks in the ports they visit, but the cruise ship keeps more money from the sale than is given to the person providing the tour.On top of this,the stores where passengers shop kick back substantial sums for the privilege of having cruise passengers in their place of business,ports often provide incentives for cruise ships to stop,and governments look the other way regarding cruise industry environmental practices.

So Alaskans seem to be a little ahead of the curve. Of course, Alaska is a general destination. While the cruises can play one Southeast port against another, as they do in the Caribbean, it would be hard to just drop out of Alaska altogether...I think. Anyway, the initiative has language to tell passengers what kind of cut the ships take on the tours booked on board and from the stores they send them to. Hmmm, our cruises often start in Vancouver (where this book was published.) I wonder if the initiative writers read the book, or even know the author. He teaches way on the other side of Canada. I'll have to check to find out who was behind the initiative and how they came up with the language.

The North American cruise industry earned more than $2.5 billion
in net profit in 2004.It pays virtually no corporate income tax and is exempt from
most laws in the countries that the ships visit.

I got the money in the previous post, but not the tax deductions.

Princess Cruises,Norwegian Cruise Line,and Royal Caribbean Cruise Line
all began operations in the mid to late 1960s.Carnival Cruise Lines was a latecomer,
starting in 1972.

Carnival was the leader in takeovers and mergers. It was smaller than Princess
and Royal Caribbean in 1988,but by 1990 it eclipsed both.It was unsuccessful in its
1988 attempt to take over Royal Caribbean, but succeeded in acquiring Princess
Cruises in 2003.

Didn't know the timing of taking over Princess. What about Holland-America? Maybe the train station at the Ted Stevens Anchorage International Airport was worked out before Carnival took over.

Chapter 3 looks at how the industry avoids taxes and how it uses
lobbyists, campaign contributions, and contributions from industry-controlled
foundations to influence political decision-making.In stark contrast to the Boston
Tea Party’s cry in the 1770s against taxation without representation, the cruise
industry enjoys representation without taxation. The industry exercises its influence in national politics as well as state,provincial,and local decision-making.

I found www.newsmeat.com before I found New Society Publishers. I was trying to see what kind of contributions Carnival made to Stevens or Sheffield. The Alaska Public Offices Commission doesn't seem to have its records on-line. But newsmeat popped up a long list of contributions by Micky Arison, 67, Chairman of Carnival Cruiselines and owner of the Miami Heat. According to newsmeat Arison gave $181,150 to Republicans, $115,650 to Democrats, and $101,500 to special interests for a total of $398,300 from April 11, 1986 to March 3, 2007. Don Young's first contributions from Arison are listed as November 11, 1980. Not sure what the date means (date of contribution or of report of contribution?) because Young got $1000 on that date for the primary and another $1000 for the general. And, of course, the election was over by November 11. Frank Murkowski shows up first in December 1991 for $1000 primary contribution. Theodore Stevens gets his first $1000 in primary money in July 1993. I can see I'm going to have to bite the bullet and learn how to go through the campaign contribution websites more efficiently. On this one I don't seem to be able to sort so I can look at what Arison gave specifically to Stevens, to Young, to Murkowski, etc. Then, there is Mrs. Arison, but she doesn't seem to have given to Alaskans. But this is only Arison's money, not Carnival money, or money from other Carnival owned companies or employees.

Chapter 4 focuses on a strongly held perception that cruise ships are “cash cows.”The cruise industry, its lobbyists,and its various regional trade organizations promote this view. It is based in part on consistent claims by the cruise industry,and adopted by many ports,that the average cruise passenger spends more than $100 in each port a ship calls upon.

Too bad I didn't save those ads that helped keep the Anchorage Daily News profitable last summer touting how much money each passenger brought to the State of Alaska.

A passenger today can have a cruise for a fraction of the cost 10, 20, or even 30 years ago, but additional onboard costs today are exponentially higher than in those
earlier days. And as passengers spend more money onboard, they have less to spend onshore. Unbundling helps the cruise line with its income, but undermines the potential income for ports on which cruise lines depend.

I've been wondering why some of the cruise prices in the newspapers seemed so cheap. Unbundling. And it seems, based on a few letters to the editors, that the cruises are specifically identifying Alaska's new passenger tax for passengers instead of bundling them invisibly in the whole price. Well, if they can do that, it shouldn't be so hard to unbundle the commissions they get from Alaska shops and tours required by the new initiative.

OK, enough for now.

Anchorage Daily News

Proximity is all important in the world. Yesterday I called Rich Mauer at the ADN to see if he'd be on a panel on legislative ethics January 20 that I'm helping with for Alaska Common Ground and the Alaska Women League of Voters. He won't be in town - he's headed to Iraq for six weeks! But later in the day I got a call from a reporter doing a piece on Gov. Murkowski's trip to Asia a month before leaving office. Was it ok for him to do this? Well, I can't answer a question like that, but I could discuss some factors to consider. If he had some projects to finish up that would benefit the state, then it could be a reasonable trip to make before leaving office. On the other hand, if he (and his entourage) are using the trip to set up business for after they leave office, then it would be a different story. Since I didn't have any details, I certainly couldn't make a judgment. If I were the reporter, I'd want to know what they accomplished. Did they get any contracts signed? Did they arrange any future programs between Alaska and Asia? He said they had stuff like, 'increased interest in Alaska trade." That's pretty vague, I replied, it is up to the Governor's office to document what they specifically accomplished. There are state ethics laws prohibiting doing business on projects you worked on while in office. Probably a year, don't know the details.

Well, on today's front page I saw this:

Farewell Asia tour cost state $100 grand
MURKOWSKI: Former governor says trip pushed trade and tourism.
By RICHARD RICHTMYER
Anchorage Daily News

Published: January 3, 2007
Last Modified: January 3, 2007 at 10:42 AM

Former Gov. Frank Murkowski's international trade mission in the waning days of his term cost the state about $114,000, according to expense records Murkowski and other state employees filed in connection with the three-nation tour.
In response to a request for information under Alaska's public-records law, the governor's office furnished a 1-inch-thick stack of receipts, travel authorization forms, itineraries and other documentation incurred by Murkowski and a dozen state employees who made at least part of the trip.
The paperwork shows a running tab of typical travel expenses: airfares, meals, lodging and ground transportation.
Gov. Sarah Palin said she was concerned about the trip's reported price tag.
For more go to: here.



Actually, not sure what you have to do to get into the story - the ADN has been making it difficult to get stories beyond the first week. This should be ok today, but I don't know about next week. So I'll give you a little from the end so you can see that Richtmyer did a reasonable job in conveying what I said.


The lack of specificity in the state's explanation raises some questions as to the value of the trip, said Steve Aufrecht, a University of Alaska Anchorage professor who has a particular interest in governmental ethics.
"It's up to (Murkowski) to tell us what he actually did," Aufrecht said. "Were any programs finalized, were any contracts finalized, or were they spending money to further private interests he's going to be pursuing after he's out of office?"
Murkowski has said he planned to set up shop as a business consultant in Fairbanks focusing on resource development and Asia.
In an interview before he left office last month, Murkowski said he hadn't lined up any clients yet. The October trip was one of many trips he made to Asia during a 26-year career as a U.S. senator and governor, so he already has plenty of contacts, Murkowski said.

So what has this got to do with proximity? Well, if I hadn't called Rich Mauer, he wouldn't have thought of me when Richard Richtmyer asked him about someone to call for his story.