Ted Stevens/Veco corruption investigation

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Alaska Sen. Ted Stevens was previously under federal indictment for his connections to a probe of Alaskan lawmakers and their relationship to the VECO oil company. Investigators are looking into the remodeling of Stevens' home in Girdwood, Alaska that involved top VECO executives. Former VECO chief executive Bill Allen, awaiting sentencing after pleading guilty to bribing Alaska lawmakers, spearheaded the remodeling project by hiring the contractors and directing them to send him the same bills that were being sent to Stevens.

On July 29, 2008, Department of Justice investigators announced a grand jury had indicted Stevens for seven counts of making false statements, alleging he failed to disclose $250,000 in goods and services, including the work done on his home, as required by the Ethics in Government Act.

On October 27, a federal jury convicted Stevens of "knowingly and willfully" making false statements on his Senate personal financial disclosure forms. He faces five years in prison for each count.

Subsequently, a federal judge threw out the conviction against him for prosecutorial misconduct.

See the main article on Ted Stevens for other information.


In 2006, Stevens' son Ben Stevens, who at that point was serving as president of the Alaska State Senate, had his offices raided by the FBI. Federal officials were reportedly seeking information surrounding his ties to VECO Corp., an oil field-services firm the Senator had aided in the past through earmarks.[1]

On May 7, 2007, VECO Corp.'s CEO, Bill Allen, and a vice president, Rick Smith, pleaded guilty to federal conspiracy, bribery and tax charges. VECO Corp. was also used in hiring contractors in the 2000 remolding of Sen. Stevens's Girdwood, Alaska home, leading to closer investigation by the FBI and Justice Department, although the senator had not been officially targeted in the investigation. The invoices for the work were sent through former VECO CEO Bill Allen to be approved before being passed onto Stevens for payment, despite the fact that Allen himself has stated "VECO was not in the business of residential construction or remodeling."[2]

In a June 6, 2007 interview with the Washington Post, Stevens disclosed that he had been asked by the FBI to preserve his records in cooperation with the ongoing Alaska investigation, and that he had hired lawyers regarding the matter.[3]

In mid-June, it was revealed that in May 2007 a federal Grand Jury examined Stevens's ties to VECO regarding the remolding of his Girdwood house, a clear indication that Stevens himself was becoming the target of the FBI's ongoing Alaska corruption investigation.[4] A close friend of Stevens, Anchorage real estate developer Bob Penney, also testified before a Grand Jury regarding the bribery scandal in Alaska. Penney invited the Senator to a a real estate investment deal that made Stevens hundreds of thousands of dollars, and is also a member of an Alaska investors group called Alaska's Great Eagle which bought a race horse with both the Senator and former VECO CEO Bill Allen.[5]

On June 19, it was revealed by a lawyer close to the case that former aides to Stevens on Capitol Hill were being questioned by the FBI regarding the Senator's ties to Bill Allen and VECO Corp.[6]

In mid-July 2007, Stevens' approval rating, according to a poll conducted by Ivan Moore, dropped to just under 45%, while 44% of respondents stated a favorable opinion of the Senator. Previous approval ratings, between September 2005 and April 2007, ranged from 58 percent to 63 percent, demonstrating a significant change since Stevens came under investigation.[7][8]

House raided

On July 30, 2007, the FBI and the IRS raided Stevens's home in Girdwood, Alaska. The house had been in the news before because VECO, an oil company previously uninvolved in home construction, renovated the home to add another story to it for Stevens. The raid was a continuation of the probe into the relationship between Stevens and VECO.[9]

Stevens stated that the investigation would not hinder his service to Alaska and called for Alaskans "not to form conclusions based upon incomplete and sometimes incorrect reports in the media. The legal process should be allowed to proceed so that all the facts can be established and the truth determined."[10]

Construction deal note

A note found after the FBI raided Stevens's Girdwood home revealed an estimate of how much Stevens had paid for the renovations to the house.[11] In the handwritten note, Stevens wrote,


Dear Wev
My staff tells me I did not respond to your May 23 letter. I truly believed I did as I answered a series of "thank yous" from people who wish us well in these hours of strife.
This is a sad portion of my life -- it will take time to explain. Catherine and I personally paid over $130,000 for the improvements to our chalet in Girdwood. Someone -- or more than one -- keeps telling the FBI that's not so. Takes time to go back over five years to prove they are wrong. I do appreciate your comments.
My best


This number appeared to be a suspicious estimate, as it was reported that the carpentry work alone cost $100,000. This would mean that the rest of the construction, including raising the house to make room for the new floor, moving earth to prepare the ground for construction, plumbing work, electric work, and roofing all was either done for less than $30,000, a very good deal, or was paid for by other sources.[13]

Calls for Stevens to step down from committee spots

Following the July raid of Stevens's home, the watchdog groups Taxpayers for Common Sense and Citizens for Responsibility and Ethics in Washington (CREW) called for Stevens to temporarily step down from his seat on the committee that funds the Justice Department while he is under investigation.[14] CREW director Melanie Sloan commented,

"Senators should follow the lead of their House colleagues and require anyone whose property has been searched in connection with a criminal probe to relinquish his plum committee post. Senator Stevens, who sits on the subcommittee responsible for funding the Justice Department, which is conducting a probe into his potentially criminal activities, should immediately resign his position on the Appropriations committee."[15]

F.B.I. investigates Veco contract

In mid August, the F.B.I. began investigating a $170 million contract given to Veco to provide the National Science Foundation with polar and arctic research support. Just as Veco had no history of home construction before building additions to Ted Stevens's home, they also had no experience in polar and arctic research support.[16]

At the time, no evidence had been unearthed to prove Stevens was responsible for securing the federal contracts for Veco, though as a senior member of the Senate Commerce Committee, he would have had authority over such funding.[17]

Allen testifies Veco's involvement in Stevens' Home Renovation

Former CEO Bill Allen acknowledged that the more than $400,000 he admitted spending in the bribery charge included the work done at the home of Stevens. "I gave Ted some old furniture," Allen said. "I don't think there was a lot of material, There was some labor." He then added that the labor came from Veco employees and that he paid for these bills.[18]

FBI taped conversations between Stevens and Allen

On September 21, 2007, it was revealed that the FBI had secretly taped conversations between Sen. Stevens and VECO executive Bill Allen. While sources revealed that Allen had agreed to taping conversations with Stevens after he was confronted with evidence that he had bribed Alaska legislators, it remained unclear as to what the content of the conversations were as well as how many conversations were recorded. Allen had pleaded guilty to bribery and has since been a key witness in cases against Alaska lawmakers.[19]

Committee has authority to listen to tapes

The Senate Ethics Committee had authority to listen to the FBI tape recordings. In a 1981 court ruling, a federal judge declared that Senate Ethics Committee investigators fall within the legal definition of federal law enforcement agencies and must be granted access to legally obtained wiretap evidence, even when the Member involved has not been indicted. With that ruling, the Ethics committee would have a strong case if it decided to hear the tapes. However, it is still unclear whether or not the panel will even press for the tapes. [20]


In July 2008, Stevens was charged with seven counts of concealing information on his financial disclosure forms. The indictment alleges violation of the Ethics in Government Act, and that Stevens concealed more than $250,000 in good and services. The items included additions to his home, household items, and vehicles. Stevens allegedly accepted the gifts and services from former Veco CEO Bill Allen, who was seeking assistance from Stevens at the time. The indictment did not charge bribery or allege quid pro quo. Under the Ethics in Government Act, members of Congress must report and disclose large gifts and debts.[21]

Stevens steps down from leadership positions

Following his indictment on July 29, 2008, and in keeping with party rules, Stevens stepped down as the top Republican on the Commerce, Science and Transportation Committee; the Defense Appropriations Subcommittee; and the Homeland Security and Governmental Affairs Subcommittee on Disaster Recovery. Senate Republican Conference rules require that “in the event of an indictment for a felony, the chair/ranking member or elected member of the leadership shall step down until the case is resolved."[22]

Prosecutors Reveal New Evidence

On August 14th, federal prosecutors revealed new evidence against Sen. Ted Stevens (R-Alaska). Among the allegations was the claim that, in 2006, Stevens offered to use his Washington connections to push a stalled pipeline project in his home state of Alaska. The claim was supported by the transcript of a private conversation that took place between Stevens and VECO founder Bill Allen, in which the Senator said "I'm gonna try to see if I can get some bigwigs from back here to go up there and say, 'Look, uh, you just gotta make up your mind, you gotta get this done."[23] Though the pipeline was never built, prosecutors charged that VECO frequently turned to Stevens in order to obtain government contracts and grants. As evidence of the Stevens' malfeasance, prosecutors pointed to thousands of dollars in undisclosed gifts given to the Senator by VECO. [24]


Defense motion to dismiss denied

A motion by Stevens' lawyers to dismiss the case was denied on September 29, 2008. The attorneys had argued the prosecution had withheld vital information from the defense team: the testimony of a worker whose timecards were cited by a prosecution witness. The judge granted the defense another opportunity to cross-examine that witness, Cheryl Boomershine, a former bookkeeper for VECO Corp.

Boomershire said she could not verify that a former VECO employee worked the hours recorded on a timesheet related to construction on Stevens' house.[25]

Judge throws out evidence

On October 8, presiding judge Emmet G. Sullivan ordered evidence in the trial struck from the record. This included records that showed Stevens had exchanged $5,000 in cash and a 1964 Mustang worth $20,000 for a $44,000 Land Rover. The exchange occurred in 1999, when Stevens acquired the "brand-new" Land Rover from Bill Allen, the former head of VECO Inc. Judge Sullivan also threw out records showing when two former VECO employees billed Stevens for work performed on his home.

Defense attorneys for Stevens again sought a mistrial, and asked that Sullivan dismiss the seven felony charges the Alaska senator faces. They have argued repeatedly that the prosecution withheld evidence crucial to Stevens' defense. Sullivan refused to declare a mistrial, but issued a stern warning to the federal prosecutors trying the case.[26]

Extension granted

Judge Emmet G. Sullivan granted a last-minute extension to the Justice Department, allowing the prosecution to present a witness that could present evidence similar to that thrown out by Sullivan earlier in the trial. Prosecutors would be allowed to call Dave Anderson, a former Veco Corp. employee, to the stand. Anderson was at the worksite for Steven’s Alaska home when it was remodeled in 2000 and 2001. The government said Stevens failed to disclose the renovations as required by federal law.[27]


On October 27, Stevens was convicted by a federal jury on seven counts of "knowingly and willfully" making false statements on his Senate personal financial disclosure forms. Stevens faced up to five years in prison for each of the seven counts, though sentencing guidelines recommend less time. At the time of his conviction, Stevens was 84 years old and in his sixth term in the Senate. Under Senate rules, Stevens did not have to resign. However, at the time he was in a virtual tie against Democrat Mark Begich in his bid for a seventh term.[28]

Subsequently, a federal court threw out the conviction based on prosecutorial misconduct.

Articles and resources


  1. Justin Rood, "From D.C., Alaska Senator Keeps An Eye (and A Hand) Out For His Son" TPM Muckraker, September 1, 2006.
  2. "Investigators eye remodeling at home of Sen. Ted Stevens" Associated Press (delivered by the Seattle Post-Intelligencer), May 29, 2007.
  3. Paul Kane, "Sen. Stevens Told to Keep Records for Graft Probe" Washington Post, June 7, 2007.
  4. Richard Mauer, "Grand jury examines Stevens' ties to Veco," Anchorage Daily News, June 17, 2007.
  5. Laura McGann, "Stevens' Friend That Testified Is Also Business Partner," TPM Muckraker, June 21,2007.
  6. Matt Apuzzo, "Sen. Stevens aides questioned in probe," Associated Press (via Yahoo News), June 19, 2007.
  7. "Poll shows new low in Steven's popularity," Associated Press (via Juneau Empire), July 16, 2007.
  8. Laura McGann, "Stevens' Popularity Sinks To New Low," TPM Muckraker, July 16, 2007.
  9. Elana Schor. "FBI raids Sen. Stevens's Alaska home," The Hill. July 31, 2007.
  10. Elana Schor. "FBI raids Sen. Stevens's Alaska home," The Hill. July 31, 2007.
  11. Laura McGann, "Stevens Thank You Note Shows Low Cost for Home Job," TPM Muckraker, August 10, 2007.
  12. Laura McGann, "Stevens Thank You Note Shows Low Cost for Home Job," TPM Muckraker, August 10, 2007.
  13. Laura McGann, "Stevens Thank You Note Shows Low Cost for Home Job," TPM Muckraker, August 10, 2007.
  14. Paul Kiel. "CREW: Stevens Should Step Down from DoJ Committee Spot," TPM Muckraker. July 31, 2007.
  15. Paul Kiel. "CREW: Stevens Should Step Down from DoJ Committee Spot," TPM Muckraker. July 31, 2007.
  16. Laura McGann, "FBI Scrutinizes Unlikely Veco Contracts," TPM Muckraker, August 16, 2007.
  17. Laura McGann, "FBI Scrutinizes Unlikely Veco Contracts," TPM Muckraker, August 16, 2007.
  18. Laura McGann, "Allen Admits Veco Employees Worked on Stevens' Home Renovation," TPM Muckraker, September 17, 2007.
  19. Matt Apuzzo, "FBI tapes Stevens calls as part of sting," The Associated Press, via TPM Muckraker, September 21, 2007.
  20. Emily Pierce, "Panel Has Claim to Stevens Tapes," Rollcall, October 1, 2007.
  21. Carrie Johnson, "Sen. Ted Stevens Indicted in Alaska Corruption Probe," The Washington Post, July 29, 2008
  22. Kathleen Hunter, "Stevens Surrenders Committee Posts," CQ Today, July 29, 2008.
  23. Matt Apuzzo, "Prosecutors: Senator helped oil contractor," Associated Press, August 15, 2008.
  24. Richard Mauer, "Feds reveal more in Stevens case," Anchorage Daily News, August 15, 2008.
  25. Kathleen Hunter, "Judge Scolds Prosecution But Denies Stevens’ Mistrial Request," CQ Politics, September 29, 2008
  26. Manu Raju, "Judge deals blow to case against Sen. Stevens," The Hill, October 8, 2008
  27. Manu Raju, "Prosecutors win extension in Stevens trial," The Hill, October 9, 2008
  28. Conor Kenny, "Ted Stevens Convicted on All Counts in Corruption Trial," PRWatch.org, October 27, 2008