Cliff Groh Speculates on Why Young and Ben Stevens Unindicted

Alaska attorney Cliff Groh, who's writing a book on the Ted Stevens' investigation and trial, has posted his speculation on why Don Young and Ben Stevens haven't been indicted yet.
Here are some of his key points, and then he fills a lot in between these lines.  Check out the whole post at his blog Alaska Political Corruption.

1. The Department of Justice appears to feel both singed and relatively short-staffed after the Ted Stevens case blew up and former legislators Pete Kott and Vic Kohring got out of prison. . .
The meltdown of the Ted Stevens prosecution and the continuing revelations of the prosecution’s failures have put a cloud over the lawyers best-informed about the Alaska public corruption investigation and dirtied up the government’s primary cooperating witnesses. . .

UPDATE (March 7): Bill Allen is less likely to be cooperative as a federal witness against Ben Stevens or Don Young if Allen comes to believe that the Anchorage police--or especially the federal government--is investigating him for allegedly committing sex crimes. . .

2. A controversy over the constitutionality over one of the feds’ primary weapons against public corruption has appeared to make them wary about bringing more complicated cases in this area. . .

3. The combination of his extensive financial disclosures and—perhaps—his relative invisibility on incriminating tapes may help prevent the prosecution of Ben Stevens, and Don Young’s apparent receipt of things of relatively little value may be aiding Alaska’s only Congressman avoid charges. . .

Again, you can read the Cliff's detailed explanation at his blog, Alaska Political Corruption.

Kott Trial Day 8 - Ben Stevens paid $200K for "Not a lot"

In addition to telling the court he paid for contractors who worked on Ted Stevens' Girdwood house for a couple of months, ex-CEO of Veco said he paid Ben Stevens for "Not a Lot" under cross examination. Here are my rough notes from the court room which is now on break. I'm going back in now.

Q: We’ve already talked about payments to Ben Stevens - as much as $200,000?
A: Can’t count time before he was in the senate. How long was he in the Senate?
Q: Do you know?
A: .....4 years.
Q: During that time did you pay him $200,000?\
A: $4000 a month.: Some questions about Ben Stevens, what did he do for Veco?
A: Not a lot. But I did talk to him about a marina in Sakhalin Island. Ben really good about ships. He was gonna go over with me. About the time, the valley trash stuff happened and he was battling that. And when he was done, I couldn’t go. I did do a little bit with him about the marian.
Q: Is it fair to say most of what he did was work on the pipeline.
A: Yes, I talked a lot to him about that. He studied PPT a lot. People would ask him about it. Cause Ben, he studied and a lot of those guys , a lot of your legislators, really didn’t study PPT and the gas pipeline, but he did.

Kott Trial Day 8- Veco Paid for Stevens Girdwood House Contractors

In this morning's testimony, former Veco CEO testified that he paid for Veco employees to work on Stevens Girdwood house for about a couple of months.

I had my laptop in the court today and here is my rough transcript of that exchange:

Q: One allegation, you helped Sen. Ted Stevens remodel his Girdwood house. You and Veco paid a number of bills for remodeling that house. Isn’t that correct?
A: You know, if you say material. I gave Ted some old furniture, but I don’t think a lot of material, some labor.
Q: So you paid some labor bills for Stevens house.
A: Yes.
Q: For contractors working on the house?
A: For Veco Employees?
Q: How many involved?
A: I don’t know, I didn’t see it ...I had to run Veco. Probably 1-4?
Q: For how long? Weeks or Months?
A: Probably a couple of months?
Q: In addition to supplying Veco employees working, did you supply any other assistance?
A: I told you about old furniture. That’s all I can, you know, remember. Uh...I hadn’t, I went by maybe a month or two, to see what they were doing. Most I was gone.
Q: You would go by every month or two to check?
A: yes.
Q: How long to complete from beginning to end? 6 months, a year?
A: I don’t know. Probably, maybe as much as six months.
Q: We’ve already talked about payments to Ben Stevens - as much as $200,000?
A: Can’t count time before he was in the senate. How long was he in the Senate?
Q: Do you know?
A: .....4 years.
Q: During that time did you pay him $200,000?\
A: $4000 a month.

Blogging Ted Stevens

While checking how people got to my blog, I found a link from Political Blogging - US Senators where you can look up any US Senator and see what people are blogging about him or her. The link above is to the Ted Stevens pages - 10 pages, each with ten trailers for blog postings that mention Stevens. Most are rehashed stories most aware Alaskans already know about. But the cumulative effect of scanning so many blogs is telling. Our senior senator is now an American symbol of corruption in the eyes of the rest of the world.

Drew Carey's comment in a YouTube segment at Government Bytes (National Taxpayers' Website) about hosting both the Price is Right and a new game show The Power of Ten is probably the most telling. His mention of Ted Stevens is so off the cuff, as though everyone should know what he's talking about.

I thought about it. You're giving away prizes all day and making everybody happy. I really can't complain. Honestly, my whole take on it has turned around now. Now I think you couldn't do better. Here's a car, here's some money. And it's not even your money. You're giving away money and getting credit for it. I feel like a congressman. I'm like the junior Ted Stevens.

While this Seattle Times article on a BooMan post on Taylormarsh.com writes about what a consummate politician Stevens is, the general tone is that a dark cloud now hangs over him.

Stevens is known for his blustery, sometimes combative demeanor in public.

But behind the scenes, he's acted as a dealmaker in an increasingly fractious Senate, orchestrating compromises and pushing legislation through committee.

Stevens' work on the Appropriations Committee, pushing earmarks to fund his projects and backing those of other senators, may help explain why Democrats aren't celebrating his potential fall.

As I said above, not too much that informed Alaskans don't already know and a fair amount of silliness at Stevens' expense. But it's a reminder to those of us who know how profoundly Stevens has positively impacted this state, that many people Outside only associate Uncle Ted with the 'bridge to nowhere' and tubes.

Ben Stevens Confirmed as Senator A

Lisa Demer reports today in the Anchorage Daily News:

Ben Stevens ID'd as Senator A

COURT FILINGS: Ex-legislator had only been named in news reports.

By LISA DEMER
ldemer@adn.com

Published: August 30, 2007
Last Modified: August 30, 2007 at 02:24 AM

In a court ruling this week, a federal judge identified former state Senate President Ben Stevens as an alleged co-conspirator in a bribery scheme involving legislators and oil field services contractor Veco Corp.

Though news reports named him months ago, it was the first time Stevens has been so named in a court document.

The development was just one of the intriguing pieces of information popping up in court filings as the public corruption trial of former Reps. Pete Kott and Bruce Weyhrauch approaches. It's set to begin Sept. 5.

"The evidence which the United States will present at trial will show that state Senator A is, in fact, Ben Stevens," U.S. District Judge John Sedwick wrote.

The indictment against Kott and Weyhrauch says Senator A conspired with them and two Veco executives to benefit the company.

In particular, the document describes a June 5, 2006, telephone conversation between the senator and former Veco chief executive Bill Allen. In the phone call, the two agreed that Weyhrauch came to support oil tax legislation favored by Veco because Allen had promised him legal work for the company. Weyhrauch is a lawyer.

Go to ADN for the rest of the story.

Seeing the World From Ted Stevens' View

The first amendment to the US Constitition, part of what's known as the Bill of Rights reads as follows:

Amendment I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Alaska's senior US Senator, and the senior Republican in the US Senate, Ted Stevens is currently under investigation by the FBI. Last week he met with the editorial staff of the Anchorage Daily News. They taped the session. Here is the last part where he gives his opinion of the ADN.

Stevens_4 imported by AKRaven



[for the other interview segments go here you'll see in the center column the choice of audio links in the picture.]




Perhaps the Senator and the editors agree on the role of the media, perhaps not, but they certainly have different views of whether the ADN is playing its role correctly.

We can hear in the tape the Senator clearly feels put upon and betrayed by the media.

You've been hanging me weekly.
Your guys, they taunt me.
They taunt me with questions no respectable reporter would ask a Senator if it's already said I'm not going to answer questions.

Based on what the ADN has written lately, they believe it is their job to report on the conduct of Senator Stevens, and that they have a responsibility to probe to find out why the FBI searched Stevens' home in Girdwood recently.

So does Stevens know he's got something to hide and he's just being belligerent to the editors when they ask him questions he doesn't want to talk about? Or does he believe that he's being hounded by the ADN and the FBI for no good reason other than being a good Senator who has done what he was elected to do?


The New York Times had an interesting story today about the Norfolk Four. It's about people who confess to crimes they haven't committed. The article argues that what the prosecutor told the jury in one of these cases

"People just do not confess,” Hansen told jurors in Tice’s second trial, “to something of this magnitude, this heinous, this vicious, without having participated in it. It’s just not natural; it’s just not reasonable.”

That is certainly the conventional wisdom.

In fact, the article says there are at least 49 cases where DNA or a later confession by someone else has freed people who confessed.

Deskovic, like many false confessors, said he believed his life was in danger and that his interrogation wouldn’t stop unless he told the police what they wanted to hear.

Nevertheless, studies of proved false confessions suggest a number of recurring markers including actual violence, threats of violence, threats of harsh sentences like execution and extreme duress brought about by isolation, sleeplessness and lengthy, high-pressure interrogation. Police interrogation is designed to be stressful and disorienting and to keep the suspect off-balance. Guilt is frequently presumed. Police may legally pressure suspects using fabricated evidence, phony witnesses and lies about DNA or polygraph results.

In some cases, people are so worn down physically and psychologically that they actually come to believe they might have committed the crime.

But he said in an interview (and in an affidavit) that Ford treated him like a criminal from the outset, poking him in the chest, yelling in his face, calling him a liar and telling him, falsely, that he’d failed a polygraph test and that a witness saw him go into the apartment. The police got him to “second-guess” his memory, Williams said. “They wear you down to the point that you’re exhausted. I just wanted the questioning to end.”

If people can believe, even for a short time, that they are guilty of crimes they haven't committed, surely it's easy to believe someone can believe he's innocent of crimes he has committed. Stevens has been threatened with harsh punishment, treated like a criminal from the outset by some, yelled at in his face. And I'm sure the 83 year old Senator often feels worn down to the point that he's exhausted. That he just wants the questioning to end.


Clearly, a US Senator who has fought for years to raise funds for campaigns, to steer money into his young state that was sorely lacking in infratstructure, and to generally fight for his constituents, will understandably lose patience with reporters who don't understand that sometimes you have to make compromises to get things done. You can't make an omelette without breaking an egg.

And reporters taking their first amendment right to a free press seriously, see their role as asking the hard questions about the Senator's behavior and the alleged favors he might have passed on to financial supporters, friends, and relatives.

In fact, as I listen to the tape, the editor sounds almost timid as he addresses the Senator who is anything but timid.

This conflict isn't new.

"Legal Foundations of Press Freedom in the United States" an essay on a US State Department website, by Jane E. Kirtley, Silha Professor of Media Ethics and Law at the School of Journalism and Mass Communication, University of Minnesota, includes the following early history of press freedom in North America.

In 1734, John Peter Zenger, a New York printer, was charged with seditious libel for having printed anonymous criticism of the colonial governor general in his newspaper, the Weekly Journal. After spending nearly one year in jail awaiting trial, he was acquitted by a jury who refused to follow the judge's instructions and convict him. Zenger's lawyer, a retired attorney from Philadelphia named Andrew Hamilton, convinced the jury that no man should be subject to criminal penalties simply for criticizing the government, especially when the facts he reported were true -- resulting in one of the earliest examples of "jury nullification" in what was to become the United States.

Ben's Friends Seem to All Have Money Ties to Dad

Roll Call says that Ben Stevens' new employer got lots of money from Dad.

New Employer of Stevens’ Son Has Reaped Millions in Federal Contracts
By John Stanton
Roll Call Staff
Thursday, Aug. 16, 2007; 3:08 pm

An Alaska-based transportation firm that recently hired the son of Sen. Ted Stevens (R-Alaska) has received more than $300 million in federal contracts over the past six years, many of which came from agencies over which Stevens has direct oversight authority in his current position as ranking member of the Appropriations Subcommittee on Defense, federal records show.

Veco Visuals

Here are a couple of visuals to go along with this morning's lead ADN story. Took these last night walking home from dinner. The building is at the corner of New Seward Highway and 36th Avenue.

FBI investigates science contracts awarded Veco

ARCTIC: $170 million in research contracts coincided with support for polar funding by Sen. Stevens.

By ERIKA BOLSTAD and GREG GORDON
McClatchy Newspapers

Published: August 16, 2007
Last Modified: August 16, 2007 at 10:03 AM

WASHINGTON -- The FBI is investigating the National Science Foundation's award of $170 million in contracts to the oil field services company that oversaw renovations on U.S. Sen. Ted Stevens' home.


The firm, Veco Corp., captured a lucrative five-year NSF contract in 1999 to provide logistics and support for polar research, although it had no previous experience in that field. During the same time period, Veco's top executive managed renovations that doubled the size of the longtime Republican senator's Girdwood home -- the scene of a July 30 FBI raid...

This picture was to show how fire weed can beautify even an ugly parking lot. Only just realized fire weed and a couple of spruce also can screen out a Veco Building almost.

You Can't Tell The Players Without a Program - Baseball Cards for Politicians

I lamented recently that we have better stats for baseball players than politicians. Well, the Anchorage Daily News published the beginnings of a program in today's edition. We can make our very own baseball cards for Alaskan politicians. I feel a little sheepish using so much from the ADN, but I've changed it a little. There are no names on the pictures. You have to guess which picture goes with which description. And I've added a picture they didn't have. You'll have to go to the ADN link to get the answers of who's who.

Tried and convicted, awaiting sentencing

- Former Anchorage state Rep. Tom Anderson. In December, he became the first person charged. On July 9, a federal jury convicted him of all counts of bribery, conspiracy and other charges connected with taking payoffs from Bill Bobrick, a lobbyist for a private prison company. Anderson worked as a consultant for Veco, the oilfield services and engineering company at the center of the broader investigation, although none of the charges against him concerned Veco. It was revealed during his trial that federal agents were investigating corruption in the Alaska Legislature as far back as early 2004. He’s awaiting sentencing.

Pleaded guilty

- Longtime Veco CEO Bill Allen pleaded guilty in May to charges of bribery, extortion and conspiracy for his dealings with four legislators: former Reps. Pete Kott, Bruce Weyhrauch and Vic Kohring, and former Senate President Ben Stevens (described in the plea as “State Senator B.”) The first three were charged; Stevens has not been. In addition, Allen admitted to paying a “bonus” in company funds to executives to illegally make campaign contributions in 2005 and 2006 to state and federal candidates. For more than two decades, Allen was a major political fundraiser for Alaska politicians. Resigned from Veco after his guilty plea.

- Veco Vice President Rick Smith, who ran the company’s government affairs operations and worked for part of the year out of a suite in Juneau’s Baranof Hotel that was being secretly monitored by the FBI. In May he pleaded guilty to the same charges as Allen. He admitted, with Allen, to making payoffs to elected officials and campaigns totaling more than $400,000. Resigned after plea.

- Lobbyist Bill Bobrick. A longtime lobbyist at the city level and one-time head of the Alaska Democratic Party, he pleaded guilty in May to conspiracy for bribing Anderson while working for a private prison company, Cornell Cos., and setting up a sham company to funnel him the money. He testified extensively against Anderson.

Charged and awaiting trial

- Former Alaska House Speaker Pete Kott of Eagle River. Indicted in May on bribery, extortion and conspiracy charges. Accused of taking payoffs and a promise of a job from Veco for helping steer an oil-production tax favored by the industry through the legislature in 2006. Aside from cash, he’s accused of being paid a “fraudulently inflated” fee by Veco for flooring work. Pleaded not guilty, trial scheduled for September.

- Former state Rep. Bruce Weyhrauch of Juneau. Charged in the same indictment as Kott, accused of switching his vote on the oil tax after receiving instructions from Kott and Bill Allen. An attorney, he’s accused of soliciting legal business from Veco in exchange for his vote. Pleaded not guilty, trial scheduled for September.

- Former Rep. Vic Kohring of Wasilla. Chairman of the Special Committee on Oil and Gas, indicted in May on bribery, extortion and conspiracy charges. Accused of taking cash and a loan from Veco executives and the promise of a job for a relative in exchange for supporting the company’s position on the oil tax. Was a member of the Legislature when indicted in May, and later resigned under pressure from constituents and Republican House leaders. Pleaded not guilty, trial scheduled for October.

Others connected with the investigations

- U.S. Sen. Ted Stevens. Has represented Alaska since 1968, making him the most senior Senate Republican in history. Stevens has come under political attack recently from fiscal conservatives and others for his use of earmarks to direct programs and money to Alaska. Some of the earmarks benefited his son Ben and a former aide, Trevor McCabe. Veco’s Allen oversaw a construction project in 2000 that doubled the size of Stevens’ home in Girdwood, and investigators have been trying to learn if at least some of that work was an improper gift.

- Former state Sen. Ben Stevens. In his plea agreement, Allen admitted making improper payments of $243,250 to “State Senator B” — an unmistakable reference to Ben Stevens, the former state Senate president. Ben Stevens had has office searched in the August 2006 raid and was later visited again by FBI agents seeking information about his fishery interests and benefits he may have received from legislation written by his father. He was paid hundreds of thousands of dollars as a consultant for various commercial fishing companies and groups, and chaired a federally funded panel that awarded grants to some of those entities.

- U.S. Rep. Don Young. Alaska’s sole U.S. Representative since 1973, Young has been widely reported to be under investigation over his own ties to Veco and use of earmarks, although details of what is being examined are unclear. Since 1989, he received more than $212,000 in campaign donations from Allen, Smith and other Veco executives, making the company by far his top contributor. One of Young’s aides has pleaded guilty in the Jack Abramoff lobbying scandal and Young himself has ties to the lobbyist. Young has come under political attack for adding earmarks to transportation legislation that would benefit a Wisconsin trucking company and a Florida real estate mogul, both of whom contributed to his political campaign. Young recently reported spending $262,000 in campaign funds on unspecified legal fees during the first six months of 2007.

- Trevor McCabe. Seward native and former legislative director to Ted Stevens, he became partner in a consulting business with Ben Stevens, and lobbied Congress on behalf of a Southeast salmon group that obtained federal funds from Ted Stevens. An attorney and lobbyist, McCabe has represented other seafood interests as well. With two partners, McCabe sold property to the Alaska SeaLife Center in Seward at a price substantially above its appraisal after Ted Stevens provided the money in an earmark.

- Frank Prewitt. Former state corrections commissioner who became a consultant to Cornell Cos., a private prison company that wanted to build a large prison in Alaska (at one time teaming with Veco). Prewitt was being investigated by the FBI in 2004 when he agreed to work for the government to root out corrupt legislators and lobbyists. He passed out money and recorded conversations, providing the foundation for the Anderson case.

- Sens. John Cowdery, R-Anchorage, and Donald Olson, D-Nome, also had their offices searched in August 2006, but have not been charged.

Are You One of the Four to Six Thousand Alaskans Who Matter?

In this morning's NPR piece (sorry, you have to go NPR and then listen to their ad before this plays) on Senator Stevens, Anchorage attorney, and author of Take My Land, Take My Life: The Story of Congress's Historic Settlement of Alaska Native Land Claims, 1960-1971, Don Mitchell, explained why Stevens' friends benefiting from federal spending doesn't prove wrong doing:

If you accept that there are only four to six thousand Alaskans in Alaska who matter in the political and economic sense, a large number of that relatively small number will be former Stevens staffers or personal friends of the senator. That goes with the turf of a very small state.

I have to think about this a while. Can it be true that less than 1% of the population of Alaska "matter politically or economically"? What exactly does it mean to "matter politically and economically?

We should note here that according to the author blurb on his book Sold American

Donald Craig Mitchell is a former vice president and general counsel of the Alaska Federation of Natives, organized by Alaska Natives in 1967 to fight for their historic land claims settlement. In private practice since 1984, he has been intimately involved, both before Congress and in the courts, in the development and implementation of federal Native policy. In 1997, he represented Senator Ted Stevens before the United States Supreme Court as amicus curiae in Alaska v Native Village of Venetie, which upheld Mitchell's view that Congress did not intend land conveyed to Alaska Native corporations to be "Indian Country."

So, I guess that since he represented Stevens in the Supreme Court, Don must be one of the Alaskans that matter. but let's put that thought on hold for a bit.



In the same NPR piece, former Anchorage borough Mayor Jack Roderick says

Bill Allen was the Outstanding Businessman of Alaska, so what do you do? You deal with them.

I couldn't find anything about "Outstanding Businessman of Alaska," but an ADN article on Veco says Bill Allen shared the Alaskan of the Year Award with former Gov Jay Hammond in 1994. I wonder if Hammond thought the award a little tarnished sharing it with Bill Allen. Just the other day I raised the question about who picks these awards and at least found out there's a non-profit called Alaskan of the Year, Inc. (It's mentioned in the first paragraph after the opening quotes and then in the *footnote) Trying to check on Allen's honor, I found that the State Chamber of Commerce give s this award. How are they connected to Alaskan of the Year, Inc.? Are they all part of the Alaskans who matter?


OK, it is true that we are a relatively small state in terms of population and people do tend to know each other. But friends of the Senator shouldn't get signficantly greater benefits from projects than the general public. And the general public's money shouldn't be steered to projects in order to benefit friends of the senator. I already posted about how Stevens earmarked $28 million for the Bill Sheffield Railroad Depot at the Ted Stevens International Airport that is only used by passengers of (mainly) Carnival Cruisea and other Carnival owned lines like Princess and Holland-America. Is that just the natural consequences of so few people who matter?

And what about Trevor McCabe, former Ted Stevens aide, and business partner of Ben Stevens (the son), and former SeaLife Center Board member? How did he happen to buy land in downtown Seward in 2003 that suddenly became so critical for a multi-agency center that Stevens earmarked money to buy that very land as reported in Wednesday's Anchorage Daily News? Just a matter of the Senator having too many friends so someone or other of his 4000 former staffers or friends will just happen to benefit? Why did he buy that piece of land? Why did Stevens earmark money to go to the SeaLife Center instead of the City? Why did the SeaLife Center buy McCabe's land with the earmarked money? Why not the City of Seward, which owns the SeaLife Center? I guess it was just a coincidence since the Senator has so many friends it's bound to happen now and then.

Stevens has brought many, many projects to Alaska. As people look closer and closer into each one, I suspect we will have many surprises, and maybe discover more and more of the 4000-6000 Alaskans who Matter. Maybe Don Mitchell can publish the list of the Alaskans that matter and the rest of us can just stop playing like we matter at election time.

But, I still have to think about what this means. If it's true, then maybe that explains why Mitchell is opposed to Native sovereignty - those folks simply don't matter. Or maybe he'd like to believe it is true. If it isn't true, why would Mitchell say it? And if it is true, does it have to stay true? And again, what does it even mean?

Bob Penney on the Web 2 - Philanthropist and Environmentalist

Google comes up with lots of Penney material related to the land deal, but for someone so prominent so long, there is precious little pre-land deal that comes up on Penney.

THE PENNEY CHALLENGE
Thank you Bob Penney and the Kenai Peninsula!
Bob has issued this Challenger Grant for the next three years to be matched for a total of $100,000.

-CHALLENGER LEARNING CENTER
Thank you to all who supported the Challenger Learning Center of Alaska in 2006!

Testimony of Mr. Robert C. Penney
before the U.S. Commission on Ocean Policy
August 21, 2002
Anchorage, Alaska

Introductory Remarks

The U.S. Commission on Ocean Policy has asked me to identify issues in my area of experience, and to make recommendations on how policies can be developed to resolve these issues. My experience is as an Alaska businessman who has worked closely with governmental processes for the past 51 years to promote stewardship of ocean and coastal resources, and especially the conservation of our fishery resources. My experience as a founder of the Kenai River Sportfishing Association, a conservation and sportsfishing advocacy group, has convinced me that protection of critical habitats is the foundation for proper stewardship of living marine resources. As co-founder of the Ted Stevens Kenai River Classic, I am proud to say sportfishermen through this event have raised more than $3 million during the last nine years for salmon habitat protection, public education and scientific research. My efforts to insure access of the sportsfishing public to these same resources has also taught me how little we know about the marine and marine-related environments, in spite of the many advances in knowledge in the second half of the 20th Century. As a final note on my experience, my special interest has long been the protection and sustained harvest of salmon, an animal that starts life in freshwater but goes on to gain nearly all of its adult weight in marine waters. Working with salmon has taught me that marine ecosystems do not stop at the shoreline. As the long-term fate of Alaska’s coastal watersheds is highly dependent on proper stewardship of coastal and ocean resources, my issues address marine, and marine-related ecosystems that cover both oceans and watersheds.

The rest is at the link.

We See What We Want To See

The Anchorage Daily News' lead editorial was on Ted Stevens today:

A sad day for Alaska

Alaskan of the Century draws scrutiny of federal authorities


It's a sad day for Alaska when a leader as influential and respected as Ted Stevens, 30-year veteran of the U.S. Senate, has his house searched by FBI and IRS agents.

Sen. Stevens has allowed a personal friendship to draw him into a potentially questionable arrangement with Bill Allen, long Alaska's most powerful and controversial political fundraiser.

When Sen. Stevens agreed to let his longtime friend Mr. Allen oversee remodeling of his Girdwood home, was Mr. Allen merely the project manager, or did he pay for part of the improvements?...

The editorial suggests that everything was fine until Stevens let Allen arrange things. People are complex. Rarely are they all good or all evil, usually some great mixture of good and not so good qualities. But when Stevens was named Alaskan of the Century in 2000 a good many of the warts were already visible. [Who chooses the Alaskan of the Century? As best as I can tell, a non-profit organization known as "Alaskan of the Year, Inc.*] But Alaskans tended to look the other way, smirk, or wink because Uncle Ted, as he's called here, consistently brought in the Federal dollars. I suspect no Alaskan who's been in this state for more than 20 minutes hasn't been impacted by Stevens. If they arrive at the Ted Stevens International Airport, if they get to ship things by mail at great rates to rural Alaska, if they drive the roads of most cities or towns, Uncle Ted has made their (I guess I should say 'our') lives easier than they otherwise would have been.

So as long as things were good, we didn't want to know too much. As long as Uncle Ted gave us our gifts when he visited, we smiled and said nice things about him. When the so called 'bridge to nowhere' campaign surfaced, some Alaskans were finally embarrassed enough to suggest that the money be sent back or to help Katrina victims . But the clues have been there for a while. We knew he had a nasty temper, or at least was a good actor, and used it to intimidate (is that the polite word for bully?) others. And if we didn't know things, the LA Times spelled a lot out in a Dec. 17, 2003 story on Stevens.

Senator's Way to Wealth Was Paved With Favors
by Chuck Neubauer and Richard T. Cooper


ANCHORAGE — He wielded extraordinary power in Washington for more than three decades, eventually holding sway over nearly $800 billion a year in federal spending.

But outside the halls of the U.S. Senate, which is a world of personal wealth so rarified some call it "the Millionaires' Club," Sen. Ted Stevens (R-Alaska) had struggled financially.

Then, in 1997, he got serious about making money. And in almost no time, he too was a millionaire — thanks to investments with businessmen who received government contracts or other benefits with his help.


Ted Stevens is chairman of the influential Senate Appropriations Committee.
Added together, Stevens' new partnerships and investments provide a step-by-step guide to building a personal fortune — if you happen to be one of the country's most influential senators.

They also illustrate how lax ethics rules allow members of Congress and their families to profit from personal business dealings with special interests.

Among the ways that Stevens became wealthy:

• Armed with the power his committee posts give him over the Pentagon, Stevens helped save a $450-million military housing contract for an Anchorage businessman. The same businessman made Stevens a partner in a series of real estate investments that turned the senator's $50,000 stake into at least $750,000 in six years.

As I was looking for this old article, I saw that others have found it too and published it now that Stevens is the center of so much attention nationally. To see the complete article, you can go to Commondreams.org. Getting it directly through the LA Times archive is much harder.


But my main point here isn't whether Stevens is good or evil. (I would never seriously ask such a question because as I said above, most people are far more complex than that.) Corruption at this level doesn't happen without the complicity of many people. We all knew, at the very least, that Alaskans were getting back far more money per capita than the people of any other state. And far more than we gave in taxes. We all knew that Uncle Ted had a great campaign war chest filled by lobbyists of all persuasions. Those of us who thought about it said things like, "Well, that's the way the game is played," or "If Ted doesn't get the money for Alaska, someone else will get it for their state," or "We are a small population in the biggest state, we have to use whatever means we can to get our fair share." Or some such argument.

At this juncture, when the power structure is being shaken up, can Alaskans of various political persuasions rally together and take a serious look at who we are and where we are going? Our Governor stood up to corruption. Her success is atypical of what happens to whistle blowers. But she did the right things at the right time and was rewarded for it. Can we as a state look at our financial situation - not as "what's in it for me," as the money flow from DC, or as our annual Permanent Fund Dividend checks - but as a way to fairly, competently, and efficiently allocate funds to those services and projects which are most needed and give us the most value for our dollar? Can we find ways to diminish the influence of professional lobbyists?

Now is the time to review whether the Permanent Fund remains a goody bag for individuals or we use its earnings as they were originally intended - to help pay for our collective state needs - infrastructure, education, police, maintenance of our land and resources, etc. The flow from DC is surely going to diminish. Our Permanent Fund is at $40 billion. Are we going to blow it? Or act collectively like responsible adults?

It is also time to reflect on what we knew, when, and what we chose not to know about Ted Stevens, Don Young, Bill Allen, and many others. What do we know about all our prominent politicians, business leaders, and educators and religious leaders as well? Do we individually have to the tools to distinguish between those who are sincerely and competently working in the public interest and those who use a facade of goodness to abuse our trust? And are we willing to not grab whatever we can from the collective pot?

This is one of those times of upheaval when we could make great changes. Or not.



*According to Taxemptworld.com , ALASKAN OF THE YEAR INC has been a charitible organization since July 1994 in Anchorage County [ok, this is a national organization that collects and posts non-profit registration forms from around the country and they don't know Alaska has boroughs instead of counties or that it is the Municipality of Anchorage, not the County] whose contact person is
RODNEY D LIND, and whose mailing address is
701 W 8TH AVE STE 600
ANCHORAGE, AK 99501-3468

A quick Google search discovers that 701 W. 8th Ave STE 600 is the office of the accounting firm KPMG Peat Marwick and that Rodney Lind asked the Board of Certified Public Accountants

for a waiver of the requirement that he earn 4
hours of continuing education in ethics for renewal of his CPA
license for the January 1, 2006 – December 31, 2007 renewal
period. He makes this request because he is licensed as a CPA in
two other states and receives continuing education in ethics in
those states.

The board denied the waiver

on the basis that Mr. Lind needs to be aware of changes in Alaska’s statutes and regulations.

OK, Rodney, I don't know you, and there is absolutely nothing here to suggest any wrong doing on your part. Asking to waive the ethics class requirements because you've already taken such courses in other states seems like a reasonable request. But since you are the contact person listed for the organization that selected Stevens as the Alaskan of the Century, there is a certain irony here that I just can't resist.

USA v. Thomas Anderson Day 5 (only day 2 for me)

U.S. District Court for the District of Alaska
Court Calendar for Friday, June 29, 2007
Current as of 06/29/20http://www.blogger.com/img/gl.link.gif07 at 8:00 PM


9:00 AM 3:06-CR-00099-JWS Judge Sedwick Anchorage Courtroom 3
USA vs. THOMAS ANDERSON
TRIAL BY JURY - DAY 5

[For those who aren't going to read all this - most of you I imagine - I'll just slip in what I found most interesting today. When Prewitt was being cross examined and he denied that doing this work for the government was in exchange for dropping other charges (he claimed there was nothing out there that could stick), Stockler (Anderson's attorney) asked, "How many other cases are you volunteering to assist? The Prosecutor objected, but the judge allowed it, and Stockler told him not to reveal any names. Prewitt said, six or seven. Let's see, we know of four indicted legislators, that leaves two or three more cases. Ben Stevens? John Cowdery? Who might seven be?]

I got there just after the afternoon session began. Prewitt was still on the witness stand, the Prosecutor was still showing tapes and transcripts, and asking Prewitt to interpret what was said in the tapes. At one point the judge addressed the government's attorney as Mr. Marsh, so my assumption yesterday that Bottini was the attorney was wrong. I'm guessing Mr. Bottini was the older (Mr. Marsh appears to be in his mid 30s or less) gentleman sitting at the government table. There were around 20-30 people in the observer section of the court this afternoon.

From what I could tell, the prosecutor was trying to establish

1. Anderson's eagerness to help Prewitt and Cornell with whatever they needed in the legislator. There's video tape of Rep. McQuire (now Anderson's wife) explaining how she to pressed Commissioner of Health and Social Services Joel Gilbertson to split the Certificate of Need process for imaging services from the process for Juvenile facilities (I think that was it) because they'd been lumped together and the whole process was being delayed because of problems in the imaging situation, not the juvenile facilities situation. Anderson also whispered to Prewitt while McQuire was talking to someone else that he hadn't told her about their arrangement. Of course, one could ask why he wouldn't tell her if he thought it was all on the up and up. And if he had told her, might she have stopped him? We'll never know.

Anderson was also asked to assist in getting a bill to change the requirement that the State Troopers had to do the transporting of prisoners, because they didn't want to and had 'subcontracted' that to Corrections who also didn't want to. In Anchorage Corrections subcontracted transport of Municipal Prisoners to the Anchorage Police Department, who also didn't want to do it. So Bobrick after talking to Mayor Begich came up with the idea to start a company to transport prisoners, but that would need legislation to allow the Troopers to subcontract that task. And Tom agreed to make that happen. No word about whether he did.


2. Anderson's need for additional money from Prewitt (He asked for and got another $2000 in addition to the money that was being passed on through Bobrick's Pacific Communications (I think that was the final name) Company. We saw photocopies of two checks he handed to Anderson, one directly to Anderson, the other to Bobrick. There was a long discussion that seemed to be initiated by Tom, that if he got money from a company that didn't have a lobbyist and it was less than $5000 he wouldn't have to report to to the Alaska Public Offices Commission. So he wanted to be sure this money came from a subsidiary of Cornell that didn't have a lobbyist. Prewitt, Cornell's lobbyist offered to write a personal check, Anderson said no, and Prewitt gave him the $2000 cashier's check. The video showed Anderson, hands out in front of him at the restaurant table making two mock bows to Prewitt after he gave him the check and saying, "I love it." At another point, Anderson says something like, I have no trouble raising campaign money, but what I really need is a job.


Paul Stockler, Anderson's attorney, was getting antsy, and after the jury left for the afternoon 15 minute break he addressed the judge about the schedule and when he would get to start cross examining Prewitt. He clearly didn't want the jury going home for the weekend without ever hearing anything from the other side. He was offered an hour today. His manner was much more aggressive than Marsh's, who is very deferential, but articulate. However, Marsh was clearly losing focus a bit this afternoon - having to go back to cover a tape or document he'd skipped over, and at one point someone walked into the courtroom and he turned to look over his shoulder to see who had come in. Stockler even addressed the judge as "Judge" at one point. I don't spend much time in courtrooms, but Marsh's "Your Honors" sound a lot more respectful to me.

When Stockler finally did get to start his cross examination of Prewitt at 3:45pm, he lit right into him and then he began to try to show Anderson's behavior in a more positive light. First he hit Prewitt with a series of incidents that he suggested he could have gone to prison for.

1. A $30,000 loan Prewitt, while Commissioner of Corrections, got from Allvest another firm that subcontracted with the Department of Corrections (I think that's what he said.) Prewitt said he got the loan and paid it back. Stockler: Is there anything in writing? Isn't it true it was a bribe? No. How did you pay it back? I worked for Allvest for four months - $7500 per month. Did you pay taxes on the $30,000? No, it was a loan. But you say you worked for it. No, I was paying him back. So, all of us could avoid paying income taxes by having our employer loan us our pay before, and then we'd repay it by working and not have to pay taxes?

2. Something about getting a job for a Mr. [DonStahlworthy (sp?) Stolworthy] who in 2004 was Deputy Commissioner of Corrections. Prewitt promised him a job when STahlworthy[Stolworthy] was fired.
I couldn't follow the specific details here. It was getting late and it appeared Stockler wanted to leave the jury with some questions about Prewitt before the weekend. [See Sunday, July 1 post post.
for update on Stolworthy.

3. Funneling $30,000 in campaign contributions from Cornell, a Houston based company,
to Alaskan legislative candidates who were friendly to private prisons. This was illegal because there was a limit on how much money candidates could get from contributors from Outside (of Alaska), so he would give it to them as an Alaskan.

4. Then raised questions about what deal he made with the Government so that he was now in the witness stand instead of the defendant's seat. Prewitt said that after working closely with the FBI for a month, and consulting with his attorney, he realized that he wasn't going to be subject to prosecution because of statute of limitations issues and I'm not sure why about the funneling contributions. And that he had volunteered to work for the government; he didn't have to. And it has been at great cost to his reputation and future employment to have all this publicly aired. Stockler kept challenging his claim there was no deal and said he needn't have volunteered and he would have spared himself all the humiliation.

5. An interesting bit of information emerged when he was asked how many other investigations was he cooperating on. Stockler told him not to mention any names. Marsh objected, but the judge allowed it. After a pause, Prewitt said, six or seven.

6. Established Prewitt was making $150,000 a year from Cornell to lobby, then asked whether Prewitt told Cornell he was working for the government. No. You didn't let them know you were in criminal trouble? I wasn't. You mean when the FBI knocked on your door, you didn't think you were in trouble? I don't think this was a good line of questioning since Stockler's client also had the FBI knocking at his door. If he's suggesting the FBI doesn't knock until they have something, then he could be hurting his own client. He also asked if Prewitt asked the government to pay him. He said yes, but they wouldn't.

Then Stockler focused on changing the jury's image of Anderson.

1. He wanted to show that Anderson was friendly and eager to please, not because Prewitt was paying him, but because that's his natural style. He asked Prewitt questions about an early meeting with Anderson before they knew each other at all, where Anderson called him FP (suggesting this was very familiar even though they didn't know each other well) and offered him assistance. And he didn't do that for money, but because he was that kind of guy and the issues were consistent with his principles. He didn't know Prewitt, hadn't gotten campaign contributions from him, and hadn't asked him for anything. Even though Bobrick had raised the notion of a campaign contribution, and Prewitt had said something like Tom shouldn't raise that now (because it is illegal for legislators to solicit campaign funding during the legislative session), Tom never asked you for a campaign contribution? Again, I don't think this was a good way to go, since Tom had earlier said that he didn't need campaign money, he needed a job. Prewitt's response was, that while he hadn't done anything for Tom, Bobrick, who was also a Cornell lobbyist, had done stuff for Tom and he was the one that introduced them here. (They'd had one prior meeting where Tom couldn't help Prewitt because he was supported by the prison employee's union that was opposed to private prisons. But when they split from the larger union, it was no longer a problem for him.)

2. He tried to portray the problem as Prewitt entrapping (he never used that term)Anderson. You and Bobrick concocted the sham company to funnel the money, Tom didn't. And he kept asking you to confirm that this money wasn't being paid him to do the legislative work. Stockler to Prewitt, "You could have said, Yes, the money is for you to fix my problems, and then Tom would have refused, and you wouldn't have had to humiliate yourself with all the publicity of this trial." The gist was, Tom was pushed into this by these older, more experienced mentors, at least one of whom is going to go scott free. But earlier they had established that Tom had a masters degree and law degree. In my opinion, a legislator should know better than asking lobbyists for legal advice.

And then it was 4:38 on the courtroom digital clock. The jury seemed much more interested in what was going on than they had been while the government painstakingly went through all the hard to hear and see tapes and transcripts.

Stockler asked for all of Monday to cross examine Prewitt. And then the Prosecutor will bring Bobrick to the witness stand.

[NOTE: YOU MAY HAVE TO HIT "OLDER POSTS" BELOW RIGHT TO GET THE FIRST ANDERSON POST - JUNE 28, 2007]

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.

More Anchorage Airport Railroad Depot Background

This comes from Andrew Halcro's website. Halcro was a Republican state representative from 1999-2003. On his site his biography says he is

President, Avis/Alaska (Statewide Family business owned and operated
since 1955) 2002-Present

He ran for governor of Alaska in 2006 as an Independent. He's sharp and talks straight. Below is his account of how the depot got built from a discussion of a candidate forum in Seward in March 2006. He's discussing John Binkley, then a Republican primary candidate for Governor.

Basically this is consistent with what I wrote earlier and fills in a few more details.

But the most amusing comments was his defense of the $28 million dollar cruise ship passenger depot at the Anchorage Airport. In fact, reconciling his comments to the audience on Friday with history, is a great lesson on how some politicians tend to lose memory when they run for office.

In the spring of 2001 while I was in the legislature I had my first conversation with John Binkley. He came to my office to address my concerns as a vocal critic of the railroad spending $28 million dollars of taxpayer money to construct a facility that was going to serve a limited use (cruise ship passengers) and be closed for 8 months a year.

During that conversation, Binkley who was the Railroad's Chairman of the Board and supported the rail depot, told me that the reason they went ahead with the project was that they didn't want to embarass Senator Ted Stevens by giving back the money. Even though the railroads own feasibility study raised questions about the project.

However on Friday, the rail depot turned from a "must do" to a "must have".

In his comments on Friday, Binkley defended the depot as a vision for the future. We built this so we could encourage commuter transportation and not have the roads clogged up with rental cars, eliminate the need for $56 million dollar parking garages (referring to the new Anchorage Airport car rental facility under construction) and to eliminate the need for expanding the Glenn Highway to four lanes. [Although Halcro has his rental car background on his biography on his webpage, and may assume that people know this about him, it would be nice if had made that clear for people who find this on the web and don't know. It doesn't change anything, but letting people know your connection to an issue a good habit to get into.]

Now lets stop here.

First, when the railroad board gave the rail depot the green light there was no car rental garage planned yet. Even so, would you rather have a $56 million private structure that generates millions in revenue or a $28 federally subsidized rail depot that's closed eight months a year?

Second, those rental cars clogging all the highways (unlike the tour buses from cruiseships) actually pay local and state taxes that reduce tax burdens of Alaskans. In Anchorage alone, the industry contributes almost $10 million dollars a year. Not to mention another $5 million dollars a year to the Anchorage Airport in concessionare and lease fees that help keep the airport open.

Third, I'm sure the 40,000 Alaskans a day that commute from the Mat-Su would love to know that John Binkley's vision for improved transportation in the region is based on them giving up there vehicles for a train ride.

Ironically, the railroads own economic feasibility study panned the idea of commuter rail to the airport due to a lack of railroad infrastructure, a sparse population base and the reality of infrequent trips.

But then again, anybody who would have taken the time to read the airport rail depot's feasibility study would have known that. But this was never an issue of what was best for taxpayers, this was about self interest.

In December 1998, a month after being elected to the State House I was invited to lunch with former Governor Sheffield who was head of the railroad at the time. I brought up the subject of the proposed rail depot. At the time, the railroad was still in the process of having a local firm conduct the feasibility study.

I told the governor I thought the project had a limited appeal and was a bad use of taxpayer money. However, it was very clear from his response that regardless of what the projected economics concluded, his was going to spend $28 million on the depot.

In December 2002, Sheffield and others sipped champagne as they celebrated the grand opening of the Bill Sheffield Airport Railroad Depot complete with a bronze bust of the former governor.

Today the rail depot is open on a regular basis only for cruise ship passengers from mid-May to September who pay nothing for the facility. The total yearly passengers are less than 50% of what their feasibility study projected they'd be by this date.

At least the next generation of taxpayers won't have to look down the tracks very far to see why they're inheriting an $8 trillion national debt.

All aboard.

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.

ADN Story: Fed's Eye [Ted] Stevens' Home Remodel

Someone said the other day that there are so many FBI agents in Anchorage working on the investigations of corruption that they keep bumping into each other.

Today the Anchorage Daily News (ADN) published another episode in the unfolding story - this is the first one that directly names the senior Republican US Senator Ted Stevens. Rich Mauer writes among other things:

How the Girdwood home fits in with the broader investigation, or what possible crimes are being investigated, is not clear. There was a brief, unexplained reference to residential remodeling in the government's statement of facts that accompanied Allen's and Smith's guilty pleas. The sentence, preceded by a listing of a dozen Veco-related enterprises around the world, said: "Veco was not in the business of residential construction or remodeling."

Asked whether that line related to the construction at Stevens' Girdwood home, Persons first said, "I'm sure it does." When pressed, he said he wasn't certain.

Bill Allen and Rick Smith are the two VECO, a key oil-field services company that has made significant political contributions, executives who have confessed to bribery, extortion and other misdeeds that were captured on tape in their Juneau hotel suite last year. One sitting and two very recent state legislators have been indicted and two state senators are mentioned in the indictments as Senators A and B. These are generally assumed to be John Cowdery and Ben Stevens, Ted's son.

Person's is a Stevens friend and neighbor who oversaw the construction while Stevens was in DC.

Augie Paone, owner of Christensen Builders Inc. of Anchorage, said in a recent interview that it was Bill Allen who hired him to complete the framing and most of the interior carpentry at Stevens' home. Before he could send a bill to Stevens for work in progress, he was directed to provide it first to Veco, where someone would examine it for accuracy, he said. When Veco approved the invoice, he would fax it to the Stevenses in Washington, he said.

Paone said that as far as he knew, Stevens and his wife, Catherine, paid his bills themselves. He said he sent at least $100,000 in invoices to the Stevenses in Washington. They paid him from what he said appeared to be a checking account opened for the project. The checks, imprinted with the couple's names, had single- and double-digit serial numbers, he said.

The project involved jacking up the existing one story house and building a new foundation and new first floor and then lowering the original house onto the newly built first floor. But there were problems in the construction.

Paone said he was called in late that summer to rescue the project.

"Bill Allen and some of the Veco boys, some of the Veco guys, were the ones that approached me and wanted to know if I could give them a hand," Paone said. "I did it more as a favor, you know. It's one of those things when somebody is the head, and packs that much power and asks you for a favor, it's kind of hard to say no."

Paone said that by the time he finished his work in late October or early November, he had sent Stevens more than $100,000 in invoices for his own work.

As I mentioned above, up to now we knew that the FBI was investigating VECO, the oil field support company, for bribery and extortion of Alaska legislators. The two top VECO executives have confessed and one sitting and two recent legislators have been indicted. Another former legislator was indicted last fall, but on what seems a separate issue. We also know that two more state senators have been investigated, but not indicted. These indictments are expected soon. One of the two is Ben Stevens, Ted's son.

In September 2005, Rich Mauer wrote

State Sen. Ben Stevens held a secret option to buy into an Alaska seafood company at the same time his powerful father, U.S. Sen. Ted Stevens, was creating a special Aleutian Islands fishery that would supply the company with pollock worth millions of dollars a year.

And since Bill Allen, the head of VECO, has confessed to various counts and worked out a deal with the FBI, we can assume that he also may have talked to them about who paid for remodeling Ted's Girdwood house.

And finally, since this is a Republican administration in DC, the skeptics can't say it is a Democratic witch hunt.

How did Carnival Cruise Lines get US taxpayers to buy them a $28 million train depot?

Our friends Harry and Michelle, former Alaskans, stayed with us a few days before catching a Princess Cruise to Vancouver yesterday. Yesterday morning I took Harry to the Ted Stevens Anchorage International Airport to return his rental car. We passed the Bill Sheffield Depot, which in 2004 won an American Institute of Architects Award.[Depot picture not my picture, from AKRailroad site]

Later we took them downtown to catch the bus to Whittier where they get on the cruise ship. Getting the tourists and their luggage from here to there is like an assembly line. I knew this already from taking other visiting friends to catch their buses to the cruise ships and from people who work for the cruise line.
You can get a sense of the enormity of the business from looking at all the luggage lined up at the hotel for just a few of one day's set of passengers.



But what got me thinking, and which you can't see completely on this picture, is the sign on the bus that says "Holland-America Tours" and the sign on the post to the right of Harry's head that says "Princess Tours." People had told me a lot of the cruises were all owned by the same company, so I started googling when I got home. Here's what I found.

The Princess Cruise Line, along with Holland America, is owned by Carnival, the largest cruise line company in the world, with a 2006 net profit of $2.279 billion In addition to Princess and Holland America, Carnival owns, as their website lists, "our brands:"

Carnival
Princess
Holland America
Cunard
Aida
Costa
P&O Cruises
Ocean Village
Seabourn
P&O Cruises Australia

Different financial sites lists their competitors as Royal Caribbean Cruises, the second largest, with 2006 net income of $633.9 million. The other two listed are TUI AG (a German firm) and Hong Kong based Star Cruises.

Alaskans heard a lot from the cruise industry prior to last fall's election because Ballot Measure 2 called for strict regulations of the cruise industry - including putting rangers on all the cruise ships to monitor them in Alaskan waters and requiring them to disclose the commission they get from Alaskan vendors they send passengers to. Despite a very expensive industry sponsored campaign against it, Ballot Measure 2 won. In this last legislative session there's been a lot of public concern because of legislative attempts to water down the new regulations. So, we aren't ignorant of the cruise industry and its influence. But I started thinking.

Back to the Bill Sheffield Depot at the airport. Anyone who asks a few questions knows that, despite the arguments when it was first proposed that supporters argued that it would help ease commuter traffic in Anchorage. The Alaska Railroad's 1998 Annual Report says about the Depot:

Anchorage International Airport
What It Is: A $28 million project to develop a state-of-the-art rail
station at the Anchorage International Airport. The station will be
the centerpiece of all passenger services development at the
Railroad, connecting Seward, Whittier and Girdwood, making
commuter services to Wasilla and Palmer a more viable option. (p.10)

In the Chairman's message it even gives a time estimate:

And by 2005, we hope to be
carrying commuters from the Matanuska-Susitna Valley and Girdwood into
Anchorage with safe, cost-effective, environmentally friendly rail transit.(p. 1)

The originally arguments that this train spur would help Anchorage commuters was never too convincing since it only would go from the airport to downtown and that's not where most commuter traffic goes. There's nothing here about cruise lines, yet today, in May 2007 the only people who ever use the airport depot to get on or off a train are cruise ship passengers.

While googling I found out that on May 7 of this year, Anchorage Daily News published a letter from a David McCargo of Anchorage:

"About a year ago I called Ted Stevens Anchorage International Airport to inquire about scheduled train service to and from downtown Anchorage. The person who took my call was not even aware that there was a train station at the airport, which started me wondering why we spent almost $30 million to build one. My next call was to the Alaska Railroad, which was worse than trying to get through to an airline representative in Bangladesh. After considerable persistence, someone finally called back to say that the only way that I could get to the airport by train was to book a cruise from Vancouver."

I further found a Railways enthusiasts' website that had a page entitled "Lines with obscure passenger services" with this interesting tidbit:


"Anchorage, Airport Branch Junction, AK - Anchorage Ted Stevens International Airport US28
This spur line - approx. 2 miles long - is used only by chartered trains for various cruise companies (including Holland America, Princess, Carnival, Royal Celebrity and Radisson). On days when a relevant cruise vessel arrives at Seward, a train leaves there for the airport in the morning (journey time 4½ hours) and returns at about 1330 from the airport to Seward to connect into the vessel's evening departure. Tickets are obtainable only from the cruise line concerned. Reported: August 2005"

So how did the cruise lines, Holland America, Princess Lines, and Carnival principally, get this $28 million depot and train spur between downtown Anchorage, and the ports of Whittier and Seward to take their passengers directly to the Anchorage Airport? Rattling some old brain cells and working google leads to this narrative.

Bill Sheffield (for whom the Depot at the airport is named) owned Sheffield Enterprises, which eventually was a chain of 16 hotels in Alaska and the Yukon.
1982 - Sheffield is elected Governor of Alaska and serves until 1986
1987 - Sheffield sold Sheffield Enterprises to Holland America. His number two man at Sheffield Enterprises, Al Parish, eventually became a vice president of Holland America.
And from the Alaska Railroad website we get the following:
April 1995
Former Governor Bill Sheffield is appointed to the Board of Directors and elected chairman.
1997
Former Governor Bill Sheffield becomes CEO and President of the Alaska Railroad and John Binkley is named Chairman of the Board of Directors.
1997
Alaska Railroad develops a program of projects with plans to build new depots and docks, improve rail infrastructure and modernize through new technology.
2001
Former Governor Bill Sheffield retires from the Railroad. Patrick K. Gamble, former Four Star Air Force general, named new CEO and President of the Alaska Railroad Corporation.

So, Sheffield has close ties with Holland America - which eventually gets bought by Carnival which owns most of the ships cruising in Alaska - because he sold his company to them and his number two man becomes a VP for Holland America. When he retires as governor he becomes head of the Alaska Railroad and pushes for a train depot (which bears his name) at the Anchorage airport. Uncle Ted, as Alaska's senior US Senator is affectionately called, gets $28 million funneled to Alaska from US taxpayers to build the depot at the Anchorage Airport (which bears his name.) Since it was completed in 2002 it has only been used by summer cruise line passengers and is closed most of the year.

Now I think Sheffield and Stevens believe that what they were doing was in the best interests of the State of Alaska. And most Alaskans appreciated the federal largess that Stevens has sent our way, though many have smirked a bit at some of the excesses like the train depot. But the so called "bridges to nowhere" have brought attention to the cumulative effect on the US budget of all the special earmarks Congress has slipped in. And in this case, there is a project whose sole beneficiary in its first five years has been the cruise ship industry.

Did I mention that Carnival and its subsidiaries also own in addition to the Sheffield Hotels, a series of Princess Hotels, where many, if not most, cruise passengers sleep when they are on land. And they own Grayline of Alaska which their cruise passengers travel in when they aren't on the railroad. And they steer their passengers to shore based shops and services for which they get a hefty commission. One of the reasons Ballot Measure 2 passed was to give passengers more information about the business relationships between their cruise ships and the businesses they recommend.

Oh, I forgot to mention that the Baranof Hotel in Juneau, where the Veco executives were taped by the FBI bribing Alaska politicians, is part of Holland Alaska.

June 7 update: For a more recent post on cruises see New Pirates of the Seven Seas
For more on the Airport RR Depot,
click here.