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Alaska
Department of Corrections
September 27, 2009 Alaska Dispatch
After 15 years of managing Alaska prisoners housed out-of-state, Corrections
Corporation of America (CCA) has lost its contract to Cornell Corrections.
Cornell's will charge the state about $19,446,000 a year to house 900 prisoners,
while CCA's plan would have cost $18,724,000 -- $722,000 less a year. Either way
the state will realize savings over the $20,669,000 it now pays through a
contract with CCA. The 770 inmates serving time at CCA's Red Rock Correctional
Center in Arizona will be moved late this year to Cornell's Hudson Correctional
Facility in Colorado, a 1,250-bed center now under construction. The move -- via
special U.S. Marshals Service planes -- is expected to cost Alaska more than
$200,000, Alaska Department of Corrections spokesman Richard Schmitz said. The
Department of Corrections denied a protest of the award filed by CCA attorneys,
who said they won't launch further appeal. In the protest, CCA attorneys Charles
Cole -- a former Alaska Attorney General -- and Stephen Williams argued that
Cornell Corrections of Alaska lacks the basic experience the state requires, and
that a preference system for Alaska-based bidders was misused. Cornell's bid was
more costly than CCA's for the three-year term, but a proposal evaluation panel
awarded Cornell's plan more points because of the company's status as an Alaska
entity. Points matter as a committee rates the proposals in several categories.
According to CCA's protest, the company gained more points than Cornell in five
other evaluation categories. In denying the protest, the state said Cornell
Alaska qualifies for two perks as an in-state company -- a bidder's preference
and an offeror's preference -- and that Cornell meets experience standards.
CCA's attorneys argue that Cornell's Alaska enterprise manages halfway house
centers and lacks experience housing federal prisoners. In its bid, Cornell
turned to its parent company, based in Houston, as the qualified service
provider. CCA's attorneys took issue with the state awarding Alaska preferences
to a business that would turn the contract over to its Texas parent company to
manage. Alaska has contracted with CCA since 1994 to house sentenced prisoners
out of state. Currently, 770 Alaska inmates are serving time away. Most have at
least year-long sentences. Meantime, the $240 million, 1,536-bed Goose Creek
Correctional Center is scheduled to open in 2012 at Point MacKenzie. The
medium-security men's facility, which is expected to alleviate Alaska's prison
space shortage, is being funded through bonds issued by the Matanuska-Susitna
Borough. The state will pay off the bonds by leasing the facility from the
borough, and will take ownership once the bill is settled. Cornell has tried for
years to solidify support for a private prison in Alaska, and became wrapped up
in a far-reaching probe into political corruption. The company's lobbyist, Bill
Bobrick, pleaded guilty on charges he tried to bribe Rep. Tom Anderson--who is
now serving time in federal prison himself-- to advocate for a private prison.
Cornell was not implicated.
May 3, 2009 Anchorage Daily News
To some shoppers, the recession means cheap cars, undervalued homes and discount
vacations. But bargain prisons? The Alaska Department of Corrections thinks so.
The department currently sends 868, or 20 percent, of its inmates to a private
prison in Arizona because it doesn't have enough prison beds here. The contract
with that rented prison is almost up, so Corrections is shopping around for a
better deal. "This is driven by our own want, our own need, to be responsible
with public money," said Corrections Commissioner Joe Schmidt. He said he's
looking for "what the market might offer us right now." The opportunity to grab
the $20 million-a-year deal from the current contractor, Corrections Corp. of
America, is attracting both private and state-run prisons. Alaska officials have
already visited potential sites in Colorado and Minnesota and expect to visit
more as the bids come in, Schmidt said. States like Nevada, in fiscal trouble
and considering releasing some of their own prisoners, are taking an interest.
Administrators of a new 464-bed prison in Hardin, Mont., say they plan to bid
for some of Alaska's business. Hardin made the national news recently when it
offered to house detainees from Guantanamo Bay. Greg Smith, head of an economic
development agency in Hardin, thinks the Alaska contract could create jobs in
his small town. He said he's been calling Alaska prison officials "as often as I
can without bugging them." "We would love to be able to take care of your
inmates," Smith said. Schmidt, whose department so far hasn't had to make
painful recession cuts, said the contract will go to whoever offers the best
deal for good security and treatment programs. "You see, we want to do more, but
we don't want to pay more," the commissioner said. Schmidt has been pushing the
department in a new direction since he was appointed by Gov. Sarah Palin in
2006, advocating for more inmate education, treatment programs and vocational
training. His goal, he says, is to reduce the state's high recidivism rate --
three out of five prisoners are re-arrested for a new offense after leaving
prison. The number of inmates in the United States boomed in the 1980s and
1990s, in part because of high crime rates and stiffened sentencing laws,
particularly for drug offenders, according to the Pew Center on the States.
Alaska's prison population also swelled during that time. In the mid-1990s,
Alaska started sending prisoners out of state to one of the many private prisons
that cropped up in response to the growth industry. The Red Rock prison in Eloy,
Ariz., currently holds medium-security inmates from Alaska sentenced to at least
two years, said corrections spokesman Richard Schmitz. The state pays
Corrections Corp. of America $61.63 per day, per prisoner. Additional costs,
such as travel and medical expenses make the real price higher, he said. It's
still cheaper than what the state pays for the maximum-security Spring Creek
Correctional Center in Seward. That works out to about $140 per day, per
prisoner, Schmitz said. The state doesn't like housing its prisoners Outside.
Families can't afford to visit, so prisoners don't get the support and
rehabilitative benefits of family connection, according to rehab experts. Guards
tend to be low-paid, and the state can't keep a good eye on how inmates are
treated day to day. Plus, the prisons are subject to the policies and laws of
the other state. Frank Smith, a vocal opponent of private prisons, thinks
there's more to Alaska's decision to switch contracts. The Arizona prison "is a
mess. It's always been a mess. Alaska has never been good at monitoring it,"
said Smith, a former Alaskan who works for Private Corrections Institute, an
anti-private prison group based in Florida. The people in the prison-for-profit
business "don't provide anything they don't have to absolutely provide," he
said. Commissioner Schmidt denies that, as do the people who run Red Rock.
They've had a good relationship with Alaska since 1995, they say. The company
expects to rebid for the contract.
July 14, 2005 Anchorage Daily News
A corporate shake-up appears to have killed controversial plans to put a boys'
psychiatric treatment center in the MacKay Building annex on downtown's eastern
flanks. Texas-based Cornell Cos., which underwent an upheaval last month,
has withdrawn its application to operate a 60-bed psychiatric center for teenage
boys in the three-story building on Fourth Avenue between Cordova and Denali
streets. Cornell officials did not return phone calls from the Daily News
on Wednesday. But news accounts say that an investment firm, Pirate Capital,
which owns 15 percent of Cornell, was unhappy with the company's financial
performance and took control of the board of directors in June.
Alaska Legislature
Cornell, VECO
January 29, 2011 Anchorage Daily News
Former Alaska halfway house mogul Bill Weimar, who pleaded guilty to conspiracy
and financial wrongdoing in Alaska's political corruption scandal, is being
sought by Florida authorities on a charge of child sexual battery. According to
the Sarasota County Sheriff's Office, an arrest warrant was issued for Weimar,
70, on Monday. The alleged victim was under 12 years old, according to warrant
information posted on the sheriff's website. The sheriff's office gave Weimar's
last known address as a boat slip at the prestigious Marina Jack's in Sarasota
harbor. A spokesman for the Sarasota Police Department, Capt. Paul Sutton, said
Friday that reports of Weimar living on a boat in a marina turned out to not be
true. A man answering the phone at the dockmaster's office at Marina Jack's said
a cabin cruiser was docked at the slip referred to in the warrant but that it
wasn't a residence. "We don't allow live-aboards here," he said. He said he
didn't know whether Weimar was renting the slip. The website of Crimestoppers of
Sarasota County posted a wanted picture of Weimar and gave his date of birth as
identical to the former Alaskan's. Sutton said the case against Weimar was being
investigated by a detective in the sheriff's office. Reached after work on her
cell phone, a spokeswoman for the sheriff's office said she couldn't get any
information about the case after hours. A friend of Weimar in Alaska, attorney
Jon Buchholdt, said Weimar lived on the west coast of Florida but he didn't know
the town. Buchholdt said he knew nothing about the accusations and hadn't spoken
to Weimar recently. The Seattle attorney who represented Weimar in his federal
criminal case in Alaska, David Bukey, said he also knew nothing about the
Sarasota allegations. Weimar was once the principal owner of the Allvest Corp.,
which had a chain of halfway houses around Alaska that contracted with the
Alaska Department of Corrections to house state prisoners, usually six months
before their terms were up. Allvest also had a drug and alcohol testing
facility. He sold the halfway house business to the national private prison
company Cornell Corrections Inc. He later partnered with Cornell and the
oil-field service company Veco in an effort to persuade the Legislature and some
Alaska communities to build a large private prison in Alaska. But that effort
was mingled with corruption. A legislative candidate's complaint to the FBI that
Weimar tried to hand him an envelope stuffed with cash became one of the
impetuses in 2004 for "Polar Pen," the investigation that eventually resulted in
indictments or guilty pleas of six legislators and U.S. Sen. Ted Stevens. One
case is still pending. The rest were convicted, though Stevens' case was later
thrown out over prosecutorial misconduct.
February 15, 2010 AP
State Sen. Johnny Ellis took to the Senate floor Monday morning to recognize the
behind-the-scenes work of a former state legislative aide who died last year.
Dee Hubbard became a confidential source to the FBI back in 2003 as it began to
investigate influence peddling in the state Legislature. Most people think of
the federal corruption investigation in Alaska as a probe of bribery associated
with oil taxes, but it began as "Operation Polar Pen" -- a private prison
investigation. And Hubbard was a crusader against private prisons. "She is the
person who very quietly with no fanfare remained anonymous throughout the FBI
investigation, the Veco scandal, the private prison scandal," said Ellis, an
Anchorage Democrat. She explained how the legislative process worked to FBI
agents and told them "who's who," Ellis said. "She was just a person there who
was interested in, as she always said, 'cleaning up Alaska politics,'" Ellis
said. "She was motivated by the right kinds of factors." If prosecutors later
made mistakes in pursuing cases, "it wasn't because of Dee," Ellis said. She
gave impeccable advice, he said. Hubbard was diagnosed with liver and kidney
failure in March and died in August. Her husband, Charlie, and two grown sons
are still struggling to cope with her death, Ellis said. Her contributions may
not be fully revealed for years, the senator said.
June 13, 2009 Anchorage Daily-News
Former Rep. Vic Kohring says he still supports private prisons even as his
enthusiasm clashes with his own observations from inside one, where he said
equipment went unrepaired, meals lacked fresh produce and prisoner welfare
appeared to take a back seat to saving money. "That's the downside of the
private-run facility," said Kohring, two days after he left the privately run
Taft Correctional Institution in Taft, Calif. "There was a certain amount of
indifference there." Kohring spent about 10 months at the low-security camp at
Taft following his conviction on federal corruption charges in 2007. He and
former House Speaker Pete Kott were freed last week while they argue that their
bribery convictions should be overturned because prosecutors failed to give them
favorable evidence uncovered by the FBI. Their first court hearing will be
Wednesday, though it will mainly deal with their conditions for release, not the
substance of their arguments. Kott was held in a prison camp owned and operated
by the U.S. Bureau of Prisons at Sheridan, Ore. Kott hasn't responded to
interview requests. Kohring was in the process of transferring from Taft to
Sheridan when release orders were issued Thursday by U.S. District Judge John
Sedwick of Anchorage. On Friday, after reporting to probation officers in
Anchorage, Kohring spoke extensively with a reporter about his year inside the
federal corrections system. Taft is a federally owned facility in the California
desert. It opened in 1997 as a demonstration project to test how private
companies could operate a federal prison. Wackenhut Corrections and Geo Group
Inc. held contracts there. In 2007, Management & Training Corp., a privately
held company based in Centerville, Utah, took over operations under a four-year,
$144 million contract. "It seemed pretty apparent they were cutting -- they were
trying to be ultra-efficient, cutting back as much as they could," Kohring said.
"If things would break down, they'd stay broken down for a long time -- exercise
equipment, telephones." Meals were loaded with carbohydrates, "too many
processed foods, not enough fresh produce," he said. "There was a lot of
complaints that the food there wasn't up to par, at least not in comparison to,
say, Sheridan." Kohring also said that medical care was inadequate. "I witnessed
some pretty bad injuries when I was in Taft there. Guys falling over, one guy
broke his femur, another broke his hip, one guy was punched in the face and he
had glass embedded in his eye and it took him about a day before they finally
took him to the doctor, at Bakersfield, in the hospital. It was horrid." His own
pre-existing back and neck injury, from a car accident, got him neither sympathy
nor care, he said. "My back didn't get any kind of attention at all, other than
ibuprofen. I was told by the director of medical to shut up ... They said no to
everything." He was warned that if he kept complaining, he'd wind up cleaning
the kitchen, he said. Carl Stuart, communication director for Management &
Training Corp., said Saturday that his company does what's required under its
federal contracts. Bureau of Prisons officials regularly inspect its operations,
and some contract prisons have full-time, on-site government monitors, though he
didn't know if that was the case in Taft.
November 10, 2008 Anchorage Daily News
Bill Weimar, who once ran a lucrative Alaska halfway house business and is now
retired and living in Montana, will face a federal judge Wednesday morning for
sentencing on two felonies. Weimar pleaded guilty in August to a role in a
scheme to illegally funnel $20,000 in 2004 to a political consultant for an
Alaska legislative candidate, knowing that if the candidate won, he would back a
private prison long sought by Weimar. Prosecutors want Weimar, 68, to serve a
year. Weimar's lawyer says a sentence of five months' incarceration and five
months of home detention, as proposed by the federal probation office, would be
fair. But Weimar asks that he be allowed to do five months of community service
rather than home detention.
August 12, 2008 Anchorage Daily News
Bill Weimar, who made his fortune off private halfway houses in Alaska,
pleaded guilty Monday to two federal felonies in U.S. District Court in
Anchorage. He admitted his role in a conspiracy to secretly funnel money to a
political consultant for an unnamed state Senate candidate, knowing the
candidate would back a private prison if he won. Weimar had a long-standing
relationship with the candidate running in the 2004 primary, a charging document
filed Monday said. Weimar held a "contingent interest" in a private prison
project worth $5.5 million, but only if the project was completed, the charges
say. He faces prison time in the plea deal and may have to forfeit "certain
property." Prosecutors estimate a sentence of 10 to 16 months. U.S. District
Judge John Sedwick isn't bound to that. He set sentencing for Oct. 29. Weimar,
who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing
investigation by the FBI and U.S. Department of Justice into political
corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont. At the brief
hearing on Monday, Weimar answered the judge's routine questions. Assistant U.S.
Attorney Joe Bottini outlined the two charges: conspiracy to commit honest
services mail and wire fraud, and illegally manipulating currency transactions
to avoid reporting them to the Treasury Department. Weimar has admitted paying
the consultant a total of $20,000 during the primary in August 2004 to cover
expenses for the candidate, without reporting the payments and without routing
them through the campaign. How do you plead? Sedwick asked. "Guilty," Weimar
answered, to each charge. LAWMAKER NOT NAMED -- For years, Weimar pushed plans
for a private prison in Alaska, but the project was always controversial and no
prison was ever built. A Democratic activist in the 1970s, Weimar later became
close to the Republicans who controlled the Alaska Legislature. Neither the
Senate candidate nor the consultant -- both accused of conspiring with Weimar --
is named in the charging document. Prosecutors declined to expand on it Monday.
But the candidate described in the documents, and in court Monday, appears to be
former state Sen. Jerry Ward. He didn't return phone calls or e-mail messages on
Monday. Ward, a Republican elected from Anchorage in 1996 and the Kenai
Peninsula in 2000, fervently pushed private prison projects as a legislator. The
charging document says the candidate running in 2004 had a long relationship
with Weimar, and held elected office part of that time. Ward and Weimar were
"buddies," according to a statement that former lobbyist Bill Bobrick, who
worked for Weimar, gave to the FBI in September 2006. Bobrick also has pleaded
guilty in the corruption investigation. He declined to comment on Monday. In
1997, a plan for a private prison in South Anchorage with Allvest and Veco Corp.
as partners crumbled under strong public opposition. As that project evaporated,
Ward emerged as the lead architect of a new plan to build private prisons in the
Mat-Su and Seward. "By God, this really solves the problem," Weimar was quoted
as saying at the time. In 2001, Ward signed on as the only Senate sponsor of a
House bill pushing a private prison on the Kenai. The charging document against
Weimar doesn't say whether the candidate won in 2004 and does not call the
person a legislator. Ward lost his seat in 2002 to Tom Wagoner. He was trying to
regain it in 2004, but lost in the Republican primary to Wagoner. SEATTLE
CONSULTANT -- In court Monday, Bottini told the judge the consultant was from
Seattle. Some of Ward's biggest campaign expenses in 2004 were more than $43,000
in fees charged by Madison Communications, an advertising and public relations
firm based in suburban Kirkland, Wash. Numerous calls left for Madison principal
Brett Bader on Monday were not returned. The charges against Weimar and other
court documents quote details of a number of telephone conversations he had with
the consultant and the candidate from Aug. 17 to Aug. 23, 2004. In a telephone
conversation on Aug. 17, 2004, the consultant told Weimar that the campaign was
having money trouble, court documents say. "I'm worried we're reaching the limit
now. I don't know where we find 10 grand unless (Candidate A) can get more in,"
the consultant said "There's no legal way to do that. At least not on that
scale," Weimar responded. Later that day, Weimar arranged to cover the next
advertising mailer for the candidate, and told the candidate so, the document
says. On Aug. 20, 2004, Weimar told the candidate of an unpaid invoice of
$20,000 with the consultant. The candidate's campaign funds were depleted, the
charges say. The candidate said he had only $300 to $400 left in his account. On
Aug. 23, 2004, Weimar made arrangements with the consultant to pay off the debt,
the charges say. He then called the candidate and told him "he would not be
receiving any further bills from Consultant A," the charging document says.
Weimar sent the consulting company a $3,000 check on Aug. 23, 2004, then sent
$8,500 in cash that same day by express mail, and another $8,500 cash the day
after, the charges say. "WE'VE MOVED ON" -- The charges also do not name the
private prison company, but Cornell Corrections Inc. tried to build a prison in
various Alaska communities, including Delta Junction, Kenai and Whittier. The
charging document describes the unnamed company's Alaska interests as halfway
houses, a planned juvenile treatment center, and a private prison project, and
that matches Cornell's interests. In 1998, in the midst of planning for a
private prison in Delta Junction, Weimar sold five Alaska halfway houses to
Cornell for $21 million. He also formed a partnership with Cornell to pursue the
Delta prison and subsequent deals for a private facility. One goal of the
conspiracy was to get the private prison company to give campaign contributions
to the candidate to help win election, according to the charges. A spokesman for
Cornell said the company was unaware of the charges but supports the
prosecution. The executives now in charge of Cornell weren't there at the time
of the events that involved Weimar, spokesman Charles Seigel said Monday.
Company records don't show any evidence of wrongdoing, he added. "We've moved on
and we are very different and have it behind us," Seigel said. Cornell also has
not pursued a private prison in Alaska for years and is no longer interested in
that, he said. "We're glad this investigation is going on but whatever was going
on or may have been going on in the past, that is not the Cornell that exists
now, both in the policy on the private prison as we've talked about and in
general about the way we do business." By 2004, Veco was no longer involved in
the prison project, Frank Prewitt, a former state corrections commissioner,
Cornell consultant and FBI informant, has said. ANDERSON INVOLVED -- The failed
private prison effort was also central in the government's case against former
state Rep. Tom Anderson, R-Anchorage, now in prison. At Anderson's corruption
trial last summer, Prewitt was a key witness who testified at length about his
undercover work to collect evidence against Anderson, and also about
questionable acts in his own past. From the witness stand, Prewitt said that in
1994 -- when he was corrections commissioner and Weimar owned Allvest -- he
accepted $30,000 from Weimar. Prewitt testified that he considered the money a
loan, which he repaid the next year, after he left his state post, by working
four months for Allvest for free. Weimar helped start Allvest in 1985, then
bought out his partners and turned it into a multimillion dollar corporation
with operations in Alaska and Washington state. Its government contracts were
worth an estimated $10 million a year. Allvest also operated a lab that did
contract urinalysis work, and used to run the city's Animal Control Center and
the Community Service Patrol. In 2002, Allvest was forced into bankruptcy
because of unpaid judgments in civil suits against the company. The bankruptcy
case eventually was settled.
November 27, 2007 Anchorage Daily News
State Sen. Lesil McGuire was accused Tuesday of making veiled threats to
dissuade a lobbyist from testifying in the corruption case against her husband,
former state Rep. Tom Anderson. The surprising information came up during the
sentencing hearing of Bill Bobrick, a once-prominent lobbyist who began
cooperating in September 2006 with the FBI in its investigation of corruption in
Alaska politics. In an interview after the hearing, McGuire denied making any
threats and said Bobrick was deflecting attention from himself onto her "on the
day of his reckoning with the public." Bobrick, 52, pleaded guilty in May to
conspiring with Anderson to push the interests of a private prison firm in
exchange for money. He funneled nearly $24,000 to Anderson, money put up by a
prison consultant who was working undercover for the FBI. In all, Anderson
received nearly $26,000. The prison company, Cornell Cos., didn't know about the
scheme, federal officials have said. U.S. District Judge John Sedwick ordered
Bobrick to serve five months in prison, followed by five months of house arrest
on the felony conspiracy conviction. That's the minimum sentence under federal
guidelines, which are advisory. It's far less than the two years to 30 months
that Bobrick would have faced if he didn't cooperate. And it's much less than
the five years that Sedwick sentenced Anderson to serve. The Republican who
represented East Anchorage in the Legislature for two terms also initially
cooperated with the FBI, then decided to fight the charges against him. He was
indicted in December 2006 and a jury convicted him in July of seven felony
counts including bribery and money laundering. Anderson reports to a federal
prison on Monday in Oregon.
November 22, 2007 Anchorage Daily News
Once-prominent lobbyist Bill Bobrick almost surely is going to prison. But not
for long. His sentencing on a single felony charge of conspiracy, part of an
ongoing federal investigation of political corruption in Alaska, is set for
Tuesday morning before U.S. District Judge John Sedwick. Bobrick has been
cooperating with the government, so will get much less time than the five years
slapped on the only other defendant sentenced so far in the corruption probe,
former state Rep. Tom Anderson. "I take full responsibility for my crime,"
Bobrick, 52, said in a brief telephone call on Wednesday. "I can never apologize
too much to my fellow Alaskans for the damage I have done to our political
system." Prosecutors are asking that he be sentenced to a year and a day, which
triggers a rule that requires he do all the time in prison, less only good time.
With good behavior, he could be out after about 10 1/2 months. They also want
two years of probation, prosecutors wrote in a memo to the judge. The defense
wants a sentence of less than a year and is asking that Bobrick be allowed to
serve at least part of it under house arrest or in a halfway house. That would
allow him to do community service as he's serving his time, which is what his
attorney said he really wants. Federal prisoners don't get "good time" for
sentences of less than a year. "Bobrick is not pleading for mercy," his
attorney, Doug Pope, wrote in his sentencing memorandum. "He is requesting that
the court credit him with providing substantial assistance to the government,
and give him a chance to atone for his crime." If he hadn't cooperated, he'd be
facing two years or longer for the conspiracy conviction under sentencing
guidelines. Bobrick is married and has lived in Alaska for 32 years. His wife is
in her third year of medical school. Pope filed in court more than 50 letters of
support, many trying to convince the judge to fashion a sentence that puts
Bobrick to work doing community service rather than serving time in prison. At
least six former Anchorage Assembly members and several law enforcement
representatives are among the dozens who wrote in. Bobrick's not the type to get
in trouble again, his supporters said. Many mentioned good work he's done as a
volunteer for years. They said he apologized to his friends, clients and
colleagues one by one long before his case became public. "I believe that Bill
Bobrick knows that his actions were wrong and that he is full of remorse about
the choices he made," wrote Jane Angvik, a former Anchorage Assembly member. She
met him in 1986 through political activity and has served on boards with him.
She wrote that she's talked with him about the crime and he wept as he described
his regret. "He said he had 'lost his way,' that he has changed, and that he is
prepared to accept whatever punishment the court deems appropriate." Bobrick
pleaded guilty in May to conspiring with Anderson to push the interests of a
private prison firm in exchange for money. He became one of the main government
witnesses against Anderson in a trial this summer. A consultant to Cornell Cos.
funneled $24,000 to Bobrick in the scheme, and Bobrick eventually passed almost
all of it on to Anderson. The consultant, former state Corrections Commissioner
Frank Prewitt, was working undercover for the FBI and Cornell knew nothing of
the bribes, officials have said. Until he was caught up in the ongoing,
multipronged FBI investigation last year, Bobrick was a powerful player in the
city. He didn't lobby the state Legislature but was active politically and
served as executive director of the Alaska Democratic Party in the late 1980s.
He then registered as a lobbyist in the municipality. For years, he had more
clients than anyone with city business. He's lost all that now. The FBI
confronted him in late September 2006 with secretly recorded telephone calls and
meetings about the scheme with Anderson. He began cooperating on Sept. 28, 2006.
The defense expects the government to agree that his help "has been as broad and
as extensive as the government requested, that his assistance extended beyond
the 'Cornell Corrections conspiracy' which was the subject of the Anderson
indictment and trial, and involved actively assisting in collecting evidence,
including recording conversations." Bobrick was vaguely threatened before the
Anderson trial, according to Pope. He described it as "contacts implying threats
of economic injury." "Those threats were credible," Pope wrote. "It is
reasonable to conclude that they were an attempt to influence Bobrick's
testimony or to dissuade him from testifying at all." Pope didn't provide
details but indicated in his memo that more information was in another filing,
which was not made public. The government is seeking a $5,000 fine. But Bobrick
no longer can make a living and should not be fined, Pope wrote.
November 13, 2007 AP
A former Alaska lawmaker convicted of seven counts of conspiracy and bribery
will begin his five-year federal prison sentence next month. Former Rep. Tom
Anderson on Monday told Anchorage television station KTUU that he will report to
a federal prison south of Portland, Ore., on Dec. 3. Anderson, 40, a two-term
Republican from Anchorage who chose not to run for re-election in 2006, was
convicted in July of taking nearly $24,000 he thought was coming from a private
prison firm, Cornell Industries Inc., in exchange for his assistance on
legislation. The money was supplied by the FBI through an informant under
contract to Cornell, Frank Prewitt, a former Alaska Department of Corrections
commissioner. Prewitt secretly recorded his conversations with Anderson and a
co-conspirator, lobbyist Bill Bobrick, between July 2004 and March 2005. Cornell
Industries was not aware of the bribery scheme or investigation. The 60-month
sentence fell within the presentencing report guidelines of 51 to 63 months.
Anderson was the first of four former Republican Alaska lawmakers arrested on
federal corruption charges. Former House Speaker Pete Kott was convicted in
October of conspiracy to solicit financial benefits, extortion and bribery. He
will be sentenced Dec. 7. Former state Rep. Vic Kohring was convicted earlier
this month of bribery, conspiracy to commit extortion and attempted interference
with commerce by extortion. He was acquitted of another count of interference
with commerce by extortion. Sentencing was set Feb. 6. The corruption trial of
former state Rep. Bruce Weyhrauch has been delayed.
November 7, 2007 UPI
The Alaska Public Offices Commission is coordinating with the U.S. Justice
Department to probe what Veco Corp. illegally did to benefit Alaska politicians.
The commission, which investigates campaign-finance violations, is focusing on
matters such as polls the oil-services company may have illegally bought for
legislators, as well as illegal Veco campaign contributions, The Anchorage Daily
News reported. The Justice Department, the FBI and the Internal Revenue Service
are conducting a widespread investigation into alleged political corruption of
lawmakers in the Alaska Legislature, focusing in particular on lawmakers'
official actions in connection with the oil industry, fisheries and private
corrections industry. Former Alaska lawmaker Pete Kott, accused of trading his
legislative influence for bribes, was convicted of corruption charges in the
scandal Sept. 27. Veco founder and Chief Executive Officer Bill Allen and Vice
President for Community and Government Affairs Rick Smith pleaded guilty May 7
to charges of bribery and conspiracy. Because of the chances of overlap between
the state and federal probes, the state commission is cooperating closely with
the Justice Department, particularly on the issue of subpoenas, the newspaper
said.
October 9, 2007 KTUU
For the first time since facing federal corruption charges, former Anchorage
Representative Tom Anderson is publicly admitting he broke the law. Anderson was
convicted on bribery and conspiracy charges in July. His admission comes about a
week before his sentencing. In a memo filed with U.S. District Court yesterday
(Monday), Anderson says "I accept full responsibility for the choices I've made
and the damge I've done...." Anderson's lawyer says he is seeking leniency -
specifically, no more than 33 months behind bars. Assistant U.S. Attorney Joe
Bottini says prosecutors will likely request a sentence of 5 to six years.
Bottini says it's too late for Anderson to acknowledge he did wrong, since he
could have pleaded guilty before the trial. Anderson was found guilty for taking
money he thought was coming from a private prison company. The nearly $26,000
actually came from an FBI informant who secretly recorded conversations with
Anderson and former municipal lobbyist Bill Bobrick.
September 19, 2007 KTUU
Cornell Cos. claims it will no longer attempt to sell projects here in Alaska.
The company has made big headlines in Alaska over the last several months as the
private prison firm used a decoy by government informant Frank Prewitt in
crafting a bribery scheme with former Anchorage lobbyist Bill Bobrick and former
Anchorage Rep. Tom Anderson. Both Anderson and Bobrick have been convicted of
corruption and bribery in the scheme. Cornell has tried building a private
prison in Alaska three times -- in Delta junction, Kenai and Whittier -- and has
been unsuccessful in each instance. Now Cornell CEO James Hyman said he's done.
"We understand how the [Department of Justice] had to use bait to get what they
needed. We are a little chagrined to be that bait," Hyman said. Although the
government successfully used Cornell as bait to take down Anderson and Bobrick,
the company was not involved in the kickbacks and knew nothing of Prewitt's
arrangement with federal agents. Instead, Cornell was simply part of an FBI
cover in order to keep the bribery framework it was monitoring with Anderson and
Bobrick believable. Unbeknownst to Cornell, Prewitt sought Anderson's help on
matters key to the company's future plans, including muscling through the
complex bureaucracy to prove to the state those projects were needed. During the
Anderson trial, Prewitt told the court he made an illegal campaign contribution
utilizing money from a former Cornell executive. After hearing that, Hyman said
the company wanted to ensure its activities in Alaska had all been above board.
Hyman said the company talked to current and ex-employees to try and discover
any wrongdoing. He said he is confident there have been no issues since he took
over in 2005 and said there's no evidence it happen in prior years either. Among
the projects Cornell was pursuing in Alaska, and Prewitt was using to snare
Anderson, was a new juvenile residential treatment facility for Anchorage. The
project suffered from poor community support for the Downtown location it chose
for a detention facility in addition to the paperwork and bureaucratic snags.
Cornell currently operates six halfway houses across the state, including three
here in Anchorage. A company executive announced that is where its focus will
remain for the foreseeable future. "We are not interested in the juvenile sector
here. We are not interested in building a private prison here or operating a
private prison here. That is not where we are going to focus," Hyman said.
Alaska Department of Corrections Commissioner Joe Schmidt said the department's
relationship with Cornell is still strong. "Right now, they want to work with us
instead of against us, and I think we have a pretty good partnership right now,"
Schmidt said. The possibility of constructing a private prison in Alaska was
taken off the table three years ago when the state legislature passed a bill
requiring any prison expansion in the state to be state-run and state-operated.
July 30, 2007 Anchorage Daily News
Federal law enforcement agents are currently searching the Girdwood home of
Alaska U.S. Sen. Ted Stevens, an FBI agent said. "All I can say is that agents
from the FBI and IRS are currently conducting a search at that residence," said
Dave Heller, the assistant special agent in charge of the FBI's Anchorage
office. The search began this afternoon, he said. It's the only such search
warrant currently being served, he said. He directed other questions to the U.S.
Justice Department's Public Integrity Section in Washington. A spokesman there
had no comment. Federal investigators and a grand jury looking into public
corruption in Alaska have been asking questions about a 2000 remodeling project
at Stevens' home, particularly the involvement of the oil field services firm
Veco. Three contractors who worked on the project told the Daily News that their
records had been subpoenaed by a federal grand jury, and others connected with
the work and with Stevens had been interviewed. One of the contractors who
worked on the job said he was hired by Veco CEO Bill Allen for the job, and
while his bills were paid by Stevens and his wife, Catherine, invoices were
reviewed first by Veco. Allen and a Veco vice president pleaded guilty in May to
bribery, extortion and other charges connected with paying off state
legislators.
July 10, 2007 KTVA TV
Cornell Cos., whose lobbyist became the federal government's chief witness in
the corruption case against former Anchorage Rep. Tom Anderson, wants it known
it had nothing to with the bribery scheme. The Texas-based corrections company
runs five halfway houses across the state. It hired lobbyist Frank Prewitt to
help advance its interest in those and other areas, including developing a
privately run prison in Alaska and a juvenile treatment facility in Anchorage.
Cornell says while Prewitt may have told now-convicted co-conspirators Bill
Bobrick and Anderson that the bribe money he had to offer was coming from
Cornell, in reality, the company says they had no knowledge of what was going
on. The company also claims it had no idea Prewitt was an FBI informant.
However, Prewitt did admit under oath that he had been implicated but not yet
charged in an illegal contribution scheme involving a Cornell Cos. executive in
2003. Prewitt testified he helped funnel $3,000 from that executive to an Alaska
politician that same year. The FBI has acknowledged the money Prewitt used in
the bribe scheme involving Anderson came from them and not Cornell. Cornell Cos.
Consultant Charles Seigel said the company does not support bribery.
July 10, 2007 KTVA TV
Alaska Senator Ted Stevens says he's worried about how a corruption
investigation could affect his run for re-election next year. The 83-year-old
Republican has drawn Justice Department scrutiny over a renovation project in
2000, that more than doubled the size of his home in Girdwood. The remodeling
was overseen by Bill Allen -- a contractor who has pleaded guilty to bribing
Alaska state legislators. Allen is founder of VECO Corporation -- an
Alaska-based oil field services and engineering company that has reaped tens of
millions of dollars in federal contracts. Allen is cooperating with the FBI. It
appears investigators are looking at whether VECO got anything in return for the
home improvement help. Alaska's senior senator is caught up in a larger probe
that included FBI raids last summer at offices of six Alaska legislators. Those
legislators include Stevens' son, Ben, who was then the president of the state
Senate. Ted Stevens told The Associated Press recently that, "The worst thing
about this investigation is that it does change your life in terms of employment
potential... "It doesn't matter what anyone says, it does shake you up. If this
is still hanging around a year from November, it could cause me some trouble."
Monday, a federal jury convicted former state Representative Tom Anderson on all
seven counts in a corruption trial in Anchorage. Anderson was charged with seven
felonies, including conspiracy, bribery, money laundering and interfering with
commerce, a charge connected to a demand for payments. Prosecutors said he
conspired to take money he thought was coming from a private prison firm,
Cornell Industries, Incorporated. The conspiracy called for Cornell to invest in
a Web-based public affairs newsletter that Anderson would write for, something a
private prison firm would not normally sponsor, as a way to pay off Anderson.
July 10, 2007 Anchorage Daily News
Federal jurors said they relied on former state Rep. Tom Anderson's own
words to convict him Monday of conspiracy, bribery and other charges related to
political corruption. Eleven jurors returned seven guilty verdicts around 1:30
p.m., finding Anderson, 39, guilty of all felony charges against him. Witnesses
testified Anderson took money to do the bidding of a private prison firm. In
all, Anderson received $25,838 in 2004 and 2005, witnesses said. The money was
supplied by the FBI through Frank Prewitt, a consultant for Cornell Cos., who
secretly recorded his conversations with Anderson and a co-conspirator, former
lobbyist Bill Bobrick. Juror No. 9 was dismissed Monday after a closed hearing
for reasons that weren't explained. Both sides agreed to go forward with fewer
than 12. Jurors at first were split over whether Anderson had been entrapped by
the government, said several reached after the verdict. Jury forewoman Wendy
Gilbert of Valdez said the key evidence came from a July 28, 2004, recording of
a conversation among Anderson, Prewitt and Bobrick -- the first after the
conspiracy began, according to the government. Jurors asked for it to be
replayed on Monday and found that Anderson had an idea of what was expected of
him from the start. "They started talking about what he could do for Cornell,"
juror Travis Gardner of Chugiak said. And when Anderson was asked about his
credentials, Gardner said, the first thing he said was that he's a legislator.
It didn't matter if Anderson would have taken the same actions anyway, such as
getting on key budget committees, because he accepted money for doing so, said
Gardner, 23. Another juror said she felt prosecutors presented a "substantial
amount of evidence." Asked what was key in their decision, juror Marie Gieryic
of Eagle River replied in an e-mail: "the recorded conversations of Anderson and
others." Those conversations, along with other evidence, showed "Anderson
understood he was taking part in illegal activities," wrote Gieryic, a mother of
three who works in a child care center. MESSAGE TO JUNEAU The verdict should
help "reinject ethics" into the Legislature and send a message "that there is a
significant price to pay for abusing the public's trust in this manner," she
wrote. Legislators need to think twice before they sell out. Anderson and his
attorney seemed stunned by the verdict. When the jury left the room, Anderson
uttered a weary sigh. "I'm devastated," he said. He said he'd appeal. "The
prosecution has criminalized being a legislator over this past year. And I think
I fell victim to that," Anderson said. Anderson's attorney, Paul Stockler said
Anderson will need to think over what to do next after consulting with his wife,
state Sen. Lesil McGuire, and a circle of advisers. "I'm speechless right now,"
Stockler said. "But when you go up against the government, you risk losing."
Anderson never tied the payment of money to any official acts as a legislator,
Stockler said. "He was always willing to help, and it had nothing to do with
money." For the reading of the verdict, the courtroom quickly filled with FBI
agents, prosecutors and staff members. McGuire wasn't there. She and other
friends and family came to the trial but couldn't get to the federal building in
downtown Anchorage in time after jurors announced they had reached a verdict,
Anderson said. McGuire was not accused of wrongdoing. In fact, prosecutors used
the fact that Anderson hid the payments from her as further evidence of a shady
deal. NO ENTRAPMENT With seven counts and an entrapment defense, the case was
particularly complex, said Gilbert, the jury forewoman. "There's a lot on the
line and a lot on your shoulders, and you want to make sure you do the right
thing," said Gilbert, a pipeline lab technician and mother of three. A common
thread for jurors was that none knew much about the case beforehand from news
coverage. In the end, jurors concluded Anderson had not been lured to commit
crimes by a government agent. He was not "entrapped." Juror Gardner, who works
for a trucking company, said the case was a lesson in Alaska politics. "I didn't
even know what lobbying was," he said. But it didn't make him cynical, he said.
Businesses should have a way to get their interests heard -- just not by paying
legislators, he said. The public corruption case against Anderson provided the
first real test for the FBI and prosecutors in their ongoing investigation of
Alaska state legislators. Three other politicians are awaiting trial, though the
schemes alleged in those cases are different. Those cases involve allegations of
bribes paid by executives with oil field services contractor Veco. Lawyers for
indicted former Reps. Bruce Weyhrauch and Pete Kott, whose trial is set for
Sept. 5, said the guilty verdict won't have any impact on their strategy because
the facts are so different. State Rep. Vic Kohring, whose trial is set for Oct.
22 and who is stepping down from his post next week, said he was saddened for
Anderson but that his own resolve to fight the charges against him had not
waned. Nick Marsh and Joe Bottini prosecuted the case against Anderson. They
didn't comment on the verdict, nor did the FBI in Alaska. The only government
statement came out of Washington, D.C. "Anderson has been held accountable for
his crimes thanks to the hard work of federal prosecutors and FBI agents, and
the Department of Justice will continue its pursuit of public corruption at all
levels of government," U.S. Assistant Attorney General Alice S. Fisher said in a
written statement. KEY WITNESS One of the government's main witnesses was former
lobbyist Bobrick. Gardner said jurors didn't find Bobrick that believable.
Bobrick pleaded guilty in May to conspiracy in the scheme and agreed to
cooperate with the government in the hope of getting a lighter sentence. Bobrick
told jurors about a series of checks he wrote to Anderson or his consulting
business that went far beyond the initial payments revealed before the trial:
$3,000 on Feb. 14, 2005, $1,500 on Feb. 25, 2005, and more, on into June 2005.
In all, Bobrick passed nearly $24,000 through to Anderson, and Prewitt gave him
another $2,000 directly, according to their testimony. Bobrick testified he had
an idea for a political Web site that he had hoped would become a real business
with Anderson, but it never did. Anderson was paid "for being a legislator,"
Bobrick told jurors. But, as jurors indicated, Anderson's own words were most
damaging. On a Nov. 16, 2004, recording of a meeting in his Anchorage
legislative office, Anderson brought up money and told Prewitt he didn't want to
split the next payment with Bobrick. Anderson served in the state House from
2003 to this year. He didn't run in 2006. U.S. District Court Judge John Sedwick
set sentencing for Oct. 2. Anderson faces certain prison time and significant
fines.
July 6, 2007 Anchorage Daily News
On June 13, 2005, an FBI agent left a message on then-state Rep. Tom Anderson's
cell phone asking for his views on an upcoming federal appointment because he
had been such a friend of law enforcement in the past. But when Anderson showed
up at the FBI building in downtown Anchorage the next day, he discovered that
was just a ploy. He was the target of an undercover FBI investigation. Huge
blown-up pictures from a five-hour-long Prince William Sound sailing trip on the
boat of Cornell Cos. consultant Frank Prewitt were on the wall. Agents played
secretly made recordings of his conversations with Prewitt and lobbyist Bill
Bobrick. The agents wanted to get Anderson to cooperate in its ongoing
corruption investigation. And for a time he did, prosecutors said. The defense
in Anderson's corruption trial wrapped up Thursday after five quick witnesses.
The case is expected to go to the jury today after closing arguments. Anderson
is charged with seven federal felonies, including bribery, extortion and money
laundering. Defense lawyer Paul Stockler maintained that Anderson never took any
legislative actions for money. He tried to portray Anderson as a man who had no
inclination to do anything shady but was lured in to doing questionable things
by the FBI. Anderson didn't take the stand. After court ended for the day on
Thursday, Anderson said he trusted Stockler's judgment in directing his defense.
With the case about to go to the jury, he said he felt anxious but didn't want
to say much. Earlier in the trial, Bobrick testified that he created a business
that was supposed to produce a Web site about Alaska politics. But he told
jurors that it ultimately became a sham used to funnel illegal payments from
Prewitt to Anderson. Prosecutors assert that the money was used to get the
legislator to do Cornell's bidding on halfway houses, a juvenile treatment
center and a private prison. Though Anderson was supposed to have produced
material for the Web site, witnesses have testified that he never did. Bobrick
has pleaded guilty and Prewitt worked undercover for the FBI, making recordings
"as a cooperating witness."
July 4, 2007 Anchorage Daily News
On the stand for a second day in federal court Tuesday, former lobbyist Bill
Bobrick told jurors that his idea for a political Web site started as a real
business venture in 2004 with then-state Rep. Tom Anderson. It wasn't supposed
to be a way "to bribe Tom Anderson or channel him funds. But it certainly ended
up that way," Bobrick testified. Ultimately, its only real purpose was to
disguise payments to Anderson, he told jurors. Anderson never did any real work
for the Web site and received the money "for being a legislator," Bobrick said.
The Web site never got off the ground. Prosecutors rested their corruption case
against Anderson on Tuesday afternoon after calling eight witnesses over four
days. The trial began June 25 with jury selection, which lasted 2 1/2 days.
Prosecutors contend that Bobrick's Web site business was used to funnel payments
from a Cornell Cos. consultant to Anderson so that he would do the company's
bidding on halfway houses, a juvenile treatment center and a private prison.
Anderson faces seven felony counts. Bobrick has pleaded guilty to conspiracy and
said he is cooperating with the government in the hope of getting a lighter
sentence. In all, Anderson received a total of $25,838, based on testimony about
various checks. That's much more money than was previously disclosed. The
charges list $12,838 in payments to Anderson. The FBI actually provided the
money. Cornell was unaware of any scheme, the government has said.
July 2, 2007 AP
Government informer Frank Prewitt had plenty of
chances to call off a scheme to funnel payments to former state Rep. Tom
Anderson but did not, Anderson's attorney contended in federal court Monday. In
a second day of questioning of the prosecution's star witness in the corruption
case against Anderson, defense attorney Paul Stockler hammered away at
conversations secretly recorded by Prewitt and his motives for doing so. Prewitt
is a former Corrections Department commissioner and a consultant for a private
prison company, Cornell Industries Inc. At least 10 times, Stockler said,
Anderson or the man he's accused of conspiring with, Bill Bobrick, posed
questions to Prewitt as to his comfort level with their plan to have Cornell
spend money on their proposed Web-based public affairs newsletter. Prewitt,
cooperating with an FBI investigation, acknowledged he did not halt their plan.
"My role was not to advise them as to what was and wasn't illegal ... My role
was to have conversations and see where they went," Prewitt said. Anderson was
arrested Dec. 7 and charged with single counts of conspiracy and bribery, three
counts of money laundering and two counts of interfering with commerce, a charge
connected to a demand for payments. He's accused of conspiring with Bobrick, a
former municipal lobbyist in Anchorage, to solicit and obtain money for
Anderson's influence as a lawmaker. According to prosecutors, the newsletter
company was a front for Cornell to pay Anderson money that could not be traced
directly to Cornell. Prewitt testified that Cornell, whose entire business in
Alaska comes through government contracts, had no use for advertising in a
newsletter or sponsoring it. Bobrick in May pleaded guilty to bribing Anderson.
Following testimony by Prewitt and former Corrections Commissioner Marc Antrim,
Bobrick took the stand for the last half hour of proceedings Monday. Stockler
contends Prewitt cooperated with investigators because Prewitt himself also was
being investigated, and that Prewitt steered recorded conversations with
Anderson to payoffs. In his cross examination of Prewitt, Stockler's questions
followed several themes: — Prewitt never gave his opinion that Cornell's
payments would be illegal or directly tied Anderson's help to them. — Even
before the alleged conspiracy, Anderson supported Cornell's interests. —
Anderson's interest in shielding his link to Cornell was connected to his
re-election and not offending corrections constituents whose jobs could be
threatened if Cornell's private prisons were built. Stockler also closely
questioned Prewitt on his instructions for recording conversations from the FBI,
and whether he was instructed to lie. Prewitt acknowledged one lie — his promise
to run the newsletter and payment scheme "up the flagpole" to the principles at
Cornell. He never did. "So that was a lie?" Stockler asked. "I guess that would
be true," Prewitt said. But Prewitt kept his composure as he methodically
responded to Stockler's other questions. He acknowledged that other lawmakers,
including Rep. Mike Hawker, R-Anchorage, had intervened for Cornell, even
fielding "talking points" composed by Prewitt for making Cornell's case. The
difference was, Hawker did not receive payments, Prewitt said. In some
instances, Bobrick's concern that Prewitt might consider the arrangement over
whether Prewitt considered the scheme a "bad idea" or "sleazy" was because
Bobrick was afraid it would jeopardize his own $5,000 per month annual contract
with Cornell, Prewitt said. In another, Bobrick expressed concern that Prewitt
would experience "sticker shock" over the amount of money requested — three
payments of $8,000. Under a questioning by Nicholas A. Marsh, a trial attorney
in the Public Integrity Section of the U.S. Department of Justice, Prewitt said
that acknowledging the illegality of the payments to Anderson or Bobrick would
have defeated the purpose of the investigation. "That would have had an
immediate chilling effect on the inquiry," Prewitt said. He denied that he was
ever told by the FBI that he had to "bag a state legislator." Marsh asked
whether Anderson had "many times" acknowledged that Cornell had no interest in
the newsletter and knew it was a sham. "No question about it, the purpose of
this arrangement was not the Web site?" Marsh asked. "No question," Prewitt
replied. In the half hour he was on the stand, under questioning from Assistant
U.S. Attorney Joseph W. Bottini, Bobrick had time only to lay out his background
as a construction worker, union official, director of the Democratic party and
legislative aide. Bobrick said he befriended Anderson in 2001 when Anderson was
a member of the Anchorage School Board and they eventually discussed going into
business. Anderson, a moderate Republican, would lobby in Juneau and Bobrick,
then a Democrat, in Anchorage. Anderson approached him in early 2004 and told
him he needed money. He asked Bobrick if he could find him contract work. "He
was my friend and I wanted to help him out," Bobrick said. He is scheduled to
continue testifying Tuesday.
July 1, 2007 Anchorage Daily News
A former deputy corrections commissioner whose name came up Friday in the
Tom Anderson corruption trial was working as an informant for the FBI in 2004
when he asked a prison company consultant for money, an FBI spokesman said
Saturday. Former Cornell Cos. consultant Frank Prewitt testified Friday that he
worked with deputy commissioner Don Stolworthy that year to develop a compromise
on competing bills to build a new prison. One measure could have led to a
Cornell-run prison in Whittier. The other, supported by the Murkowski
administration, pushed a state-run prison in the Valley. Prewitt, a state
corrections commissioner in the 1990s, testified Stolworthy told him he was
worried about losing his job because of union opposition to a private prison.
Prewitt said he assured Stolworthy that “people would be there for him” if that
happened. Prewitt told jurors that Stolworthy eventually began seeking money, as
a sort of insurance policy, if he lost his job. But he only did that because the
FBI asked him to, FBI spokesman Eric Gonzalez said Saturday. Stolworthy was
working for the FBI as a “cooperating witness,” he said. “We approached him out
of the blue,” Gonzalez said. “We asked for his help and he said he’d be glad to
help us.” Stolworthy “was squeaky clean,” Gonzalez said. The fact that
Stolworthy was working undercover for the FBI never came up during the trial on
Friday. Prewitt testified that he was shocked that Stolworthy was asking for
money and read him the ethics act. The FBI won’t discuss what evidence it may
have collected on Prewitt through Stolworthy. But in his opening statement on
Wednesday, federal prosecutor Joe Bottini said that Prewitt may have tried to
improperly influence a state corrections official. The matter came up because
Prewitt is the government’s star witness in the corruption case against
Anderson, a former state representative. Defense attorney Paul Stockler
cross-examined Prewitt on Friday about possible illegal activities in his
background and pressed him on whether he was just testifying against Anderson to
save himself. Efforts to reach Stolworthy Saturday were unsuccessful. When the
state issued a statement announcing his resignation in January 2005, it said he
accepted a job for the U.S. Justice Department as warden of a prison in Iraq.
Anderson’s trial resumes Monday as Stockler’s cross-examination of Prewitt
continues.
June 28, 2007 Anchorage Daily News
Prosecutors say Tom Anderson was a debt-ridden politician who sold his office
for $12,838 and knew exactly what he was doing. The defense says the real
culprit is former state corrections commissioner Frank Prewitt, who was under
investigation himself and exploited Anderson to save himself. Anderson was a
hard-working legislator who never took any official actions in exchange for
money, said defense attorney Paul Stockler. Jurors on Wednesday heard those
contrasting views as the two sides gave opening statements in the public
corruption trial of Anderson. The first witnesses will be called today.
Anderson, a two-term state representative who didn't run again in 2006, is
fighting seven felony charges including bribery, extortion and money laundering.
A jury of eight women and four men, plus four alternatives, was seated Wednesday
afternoon. They were picked from a pool of 102 after hours of questioning by
U.S. District Judge John Sedwick and lawyers spread over three days. Some
scribbled notes as the lawyers gave their opening statements. A small crowd of
spectators came to hear. A friend of Anderson's who has been collecting money
for his defense sat in, but Anderson's wife, state Sen. Lesil McGuire, didn't
attend. Jurors will be asked to absorb complicated information over the next few
days, prosecutor Joe Bottini told them. Neither of the central figures in the
case against Anderson -- Prewitt and former lobbyist Bill Bobrick -- are
"squeaky clean witnesses," Bottini acknowledged. Bobrick has pleaded guilty to a
conspiracy charge in the case and has agreed to testify against Anderson.
Bobrick came up with a scheme to create a phony company and use it to funnel
payments from the private prison firm Cornell Cos. to Anderson, prosecutors
assert. Cornell didn't know about the scheme, and after the FBI got involved it
provided the payments. PREWITT'S PAST: The other key witness will be Prewitt,
whose own flaws the prosecutor discussed at length. Prewitt, who became a
consultant to Cornell after leaving his state post, was being investigated for
various actions when the FBI confronted him in April 2004, Bottini said. He
agreed to help the FBI in its "broad public corruption investigation," the
prosecutor said. Anderson is one of four legislators or former legislators
indicted in the past seven months. Cornell had been trying for years to open a
private prison in Alaska, and Prewitt may have tried to improperly influence a
state corrections official regarding it, the prosecutor said. He also was being
investigated for a practice in political campaigns known as "conduit
contributions" in which someone gives money to other people to pass on to
candidates. That is done to bypass campaign contribution limits. Bobrick also
was involved in "conduit contributions," Bottini said. In addition, while
Prewitt was state corrections commissioner, he accepted $30,000 from a friend
who had business with the department, Bottini said. The government has no deal
with Prewitt that he won't be charged with any crime in exchange for his help,
but certainly he's hoping for a break, the prosecutor said.
June 22, 2007 Juneau Empire
Former state Rep. Tom Anderson, R-Anchorage, goes on trial Monday in
Anchorage, in a case which may be linked to the ongoing political corruption
investigation involving VECO Corp. executives and other state legislators. Also
involved, likely without her knowledge, may be Anderson's wife, Sen. Lesil
McGuire, R-Anchorage. Regardless of VECO's involvement, Anderson's attorney has
already begun preparing for a trial under increased public scrutiny of political
corruption cases. Paul Stockler, an Anchorage attorney representing Anderson,
has already asked a federal judge for permission to question potential jurors
about how much they know about "this and other well publicized cases." He also
wants to be able to ask about what they know about Anderson "or the other well
publicized witnesses." The FBI investigation in Alaska, led by the U.S.
Department of Justice's Office of Public Integrity became publicly known in
August of 2006. At that time FBI agents served search warrants on the offices of
six members of the Alaska Legislature, though not Anderson, as well as VECO and
other offices. Three of the six legislators and two top VECO executives have
been indicted on corruption charges. The executives have pleaded guilty, while
the legislators have pleaded not guilty and are awaiting trial. A series of
indictments, guilty pleas and legal maneuverings have kept those VECO-related
issues in the news for months. According to documents filed by U.S. attorneys to
outline their case, the investigation had been in the works for more than two
years before the raids. It was in the summer of 2004 that an unnamed lobbyist
with ties to Anderson approached a confidential source working undercover for
the FBI with a scheme to bribe Anderson, the documents say. The confidential
source's "efforts at the time were directed to other, unrelated investigative
matters," the DOJ documents said. It did not specify whether those matters
involved VECO. The charges against Anderson accuse him of using his position as
a legislator, including the chairmanship of the Administrative Regulations
Review, to benefit Cornell Companies, a Texas-based firm which operates private
prisons. In Alaska Cornell was seeking state approval to build a private prison
and a juvenile psychiatric treatment facility, as well as regulatory changes to
help its Alaska operations, which include a string of halfway houses around the
state. The court documents allege that Anderson pressured state officials, such
as former Department of Corrections Commissioner Mark Antrim, to benefit
Cornell. He also advocated for Cornell at a public meeting in Anchorage, but
said he was there not on the company's behalf but as chair of the regulatory
review committee. Cornell is not accused of any wrongdoing, federal and Cornell
officials have previously told the Empire. Prosecutors said they expect to take
a week to present their case.
June 19, 2007 KTUU TV
New details are emerging in the government's corruption probe against former
state Rep. Tom Anderson as attorneys prepare for his trial Monday. The
government has filed a trial brief laying out who is involved, how the pitch was
made and the meetings and actions it says Anderson took. Anderson's attorney
wouldn't comment on the details, but said he is outraged at the inclusion of
what appear to be references to Anderson's wife, Sen. Lesil McGuire. The brief
also makes it clear that other, unrelated investigations were underway when the
federal government's unnamed source was approached to participate in a bribery
scheme. Based on court records and sources close to the investigation, Channel 2
News believes the confidential source who allegedly recorded every move is
former lobbyist Frank Prewitt. Prewitt worked for Texas-based Cornell Companies,
a private firm looking to open a private prison in Alaska and a juvenile
treatment facility in Anchorage. The company also runs halfway houses throughout
the state. Anderson is accused of taking money from the government source on
behalf of Cornell in exchange for official acts. Another lobbyist, Bill Bobrick,
has already entered a guilty plea in connection with the scheme. He is expected
to testify at Anderson's trial. In the trial brief, prosecutors cite a recording
in which Bobrick tries to convince the informant the scheme was worth the money,
suggesting Cornell would have two legislators working for them in Juneau because
of Anderson's romantic involvement with another lawmaker. "Cornell would get two
legislators," Bobrick is quoted as saying. "You know, chair of labor and
commerce, and chair of judiciary ... That's the minimum we're going to have next
year." At the time, Anderson was dating Rep. Lesil McGuire, chairwoman of the
House Judiciary Committee. The couple went on to wed during the summer of 2005.
In its filing, the government goes on to cite a recorded conversation between an
unnamed state representative and the Cornell lobbyist. In it, the representative
talks about contacting a state commissioner overseeing regulations Cornell
needed help with. "Tom called me on the phone and he said, ‘I don't care what
you are doing, I need you to get on the phone right now ...'" states the brief.
The representative said Anderson asked for calls to be placed to the lobbyist
and the Cornell representative and goes on to say, "I was on the phone because
of Tom." During late 2004 and early 2005, Anderson joined subcommittees key to
Cornell's interests and, according to the government, pushed Cornell's agendas
without disclosing he was being paid. Anderson's attorney, Paul Stockler,
maintains Anderson's innocence and said they are ready to clear his name at
trial. Stockler also added that no allegations have been made against Anchorage
Sen. Lesil McGuire, and there is no indication she has done anything
inappropriate. There has been no public link between the prison case and other
corruption cases, including the VECO bribery claims. However, VECO Corp. and
Cornell do have a relationship -- in 2003, VECO and Cornell Companies teamed up
on trying to get a private prison built in Whittier.
June 19, 2007 AP
State Rep. Vic Kohring said today he will resign after nearly 13 years of
public service so he can concentrate on defending himself against federal
bribery and extortion charges. He told The Associated Press that he will leave
office July 19. "I take the job as a legislator very seriously, but my life is
on the line, so I have chosen to defend myself so I can prevail in court,"
Kohring said. "It's a very, very ugly decision to have to make, frankly."
Kohring said he plans to disclose his decision during a luncheon at the Greater
Wasilla Chamber of Commerce later today, as he previously announced. "The easy
route would be not face the people who supported me and not to face those people
who oppose me," said Kohring, a Wasilla Republican. "I could just issue a press
release and be done with it, but that’s not the right way to do it." Kohring and
two former state lawmakers were indicted May 4 on bribery and extortion charges
related to alleged dealings with Anchorage- based oil field services company
Veco Corp. Also charged were former Republican Reps. Pete Kott and Bruce
Weyhrauch. All have pleaded not guilty and have had their original July trial
dates pushed back to the fall. Federal prosecutors accuse the lawmakers of
selling their votes to Veco officials while they were considering a rewrite of
the state’s petroleum production tax, which could have levied a 20 percent tax
on profits and a 20 percent credit on capital investments.
June 17, 2007 Anchorage Daily News
A federal grand jury in Washington, D.C., heard evidence last month about
the expansion of U.S. Sen. Ted Stevens' Girdwood home in 2000 and other matters
connecting Stevens to the oil services company Veco Inc. As the far-reaching
federal investigation into corruption in Alaska politics spreads to Washington,
Stevens family friend and neighbor Bob Persons was ordered to appear before a
grand jury in Washington on May 25. The government directed him to produce
documents related to the work on Stevens' Girdwood house, especially to work
that might have been performed by Veco and contractors who were hired or
supervised by Veco. Another close associate of Stevens, Anchorage businessman
Bob Penney, testified two weeks ago before the federal grand jury in Anchorage
that has been gathering evidence in the corruption cases. The house expansion
project, first reported in the Daily News on May 29, more than doubled the size
of the home. The Stevenses had asked Persons, who lives above the Double Musky
restaurant he owns in Girdwood, to help them oversee the addition while they
were in Washington. The existence of the Washington grand jury investigation is
the strongest indication to date that Stevens himself has become a subject of
the wide-ranging federal probe that surfaced with FBI raids on state legislative
offices last August. Former State Sen. Ben Stevens, Ted Stevens' son, was among
the legislators whose offices were searched. Ben Stevens has denied wrongdoing.
The FBI said at the time that it also had executed a search warrant in Girdwood,
among other places, although the location of that search has never been
disclosed. VECO GUILTY PLEAS: The investigation by the FBI and the Justice
Department's Public Integrity Section has so far led to guilty pleas by former
Veco chief executive Bill Allen, former Veco vice president Rick Smith and
private-prison lobbyist Bill Bobrick. Four current or former state legislators
have been indicted and are awaiting trial on corruption charges, three for
taking bribes or attempting to take bribes from Veco, the other for taking
bribes from the private prison interest. How the Girdwood home fits in with the
broader investigation, or what possible crimes are being investigated, is not
clear.
May 29, 2007 Anchorage Daily News
The FBI and a federal grand jury have been investigating an extensive remodeling
project at U.S. Sen. Ted Stevens' home in Girdwood that involved the top
executive of Veco Corp. in the hiring of at least one of the key contractors.
Three contractors who worked on the project said in recent interviews with the
Daily News that the FBI asked them to turn over their records from the job. One
said he was called to testify about the project before a federal grand jury in
Anchorage in December. The remodeling work, which more than doubled the size of
the house, occurred in the summer and fall of 2000. The four-bedroom home, about
two blocks from the day lodge parking lot at the Alyeska ski resort, is Stevens'
official residence in Alaska. An old friend of Stevens in Girdwood, longtime
Double Musky restaurant owner Bob Persons, has been questioned by the FBI about
the project. He monitored the remodeling for Stevens and his wife while they
were in Washington, D.C. "I will be testifying. That's all I can tell you,"
Persons said in a brief interview last week. "It is an ongoing investigation
that I'm not supposed to talk to or see anybody about it." Persons would not
elaborate on whether he meant that he would testify before a grand jury, at a
trial, or both, or for whom. He said he believed Stevens did nothing wrong. Ted
Stevens and his wife, Catherine, declined to answer questions about the Girdwood
house. In a prepared statement issued by his office, Stevens said: "While I
understand the public's interest in the ongoing federal investigation, it has
been my long-standing policy to not comment on such matters. Therefore, I will
withhold comment at this time to avoid even the appearance that I might
influence this investigation." The FBI and the U.S. Justice Department's Public
Integrity Section, which are in the midst of a broad investigation of corruption
in Alaska, would not comment. "This is a pending investigation and we're just
not going to confirm or deny any aspect, any rumors, any allegations out there,"
said FBI spokesman Eric Gonzalez.
May 7, 2007 Anchorage Daily News
Bill Allen, a welder who took the Veco Corp. from a small Kenai oil-field
company to a billion-dollar international contractor and a major political
force, pleaded guilty Monday to bribing at least four Alaska legislators,
including former Senate President Ben Stevens. In a plea bargain with the
U.S.Justice Department’s Public Integrity Section, Allen and Rick Smith, Veco’s
vice president for community and government affairs, each pleaded guilty to
three identical felony charges — bribery and two counts of conspiracy. Both men
accepted responsibility for making more than $400,000 in illegal payments and
benefits to public officials or their families. More than half the money went to
Stevens in the form of phony “consulting” fees, the government charged. Stevens,
son of U.S. Sen. Ted Stevens, has not been charged. He was named in the plea
documents as “State Senator B,” but his identity was unmistakable. In return for
special consideration at sentencing, Allen, 70, and Smith, 62, agreed to
cooperate in the ongoing federal investigation. The government also promised to
not seek charges against Allen’s son Mark, a Veco official, his daughter Tammy
Kerrigan, or any other relative. The federal plea bargain doesn’t bar state
prosecutors from seeking additional charges against Allen and Smith. Both men
acknowledged violating state campaign finance laws in their plea. The plea deals
were formalized in secret last week and opened in U.S. District Court Monday
morning in unannounced back-to-back hearings before Judge John Sedwick, each
lasting about 40 minutes.
May 6, 2007 Anchorage Daily News
The chairman of a key state House committee was deposed and Alaska's most
important oil tax law fell under new scrutiny Saturday as lawmakers reacted to
the arrest of one current and two former legislators on federal corruption
charges. Rep. Vic Kohring, R-Wasilla, will lose his chairmanship of the Special
Committee on Oil and Gas, House leaders said. Kohring was charged with selling
his vote on oil taxes last year to oil field services company Veco. The House
committee had an important early role in shaping gas pipeline legislation this
year. Republican majority leaders placed Kohring in charge of the committee this
session, even though he was one of six legislators whose offices were raided by
the FBI in a Veco-related probe last fall. Kohring appeared before a federal
magistrate Friday in handcuffs to face charges of bribery, extortion and
conspiracy. Also appearing were two Republican colleagues from last year's
legislative session, Pete Kott of Eagle River and Bruce Weyhrauch of Juneau. All
three pleaded not guilty. In detailed indictments, the three were charged with
selling their votes and influence over other legislators for money and jobs
during the 2006 legislative session. The legislation in question was an overhaul
of the state's oil production tax, which pays for most of state government and
adds to the Alaska Permanent Fund. Veco wanted to keep the oil tax low and also
was pressing for construction of a gas pipeline from which it would profit,
according to the indictment.
May 5, 2007 Alaska Daily News
Three more state legislators were arrested on federal corruption charges
Friday, accused of selling their votes and influence to the oil field services
company Veco Corp. and its chief executive, Bill Allen, during last year’s
debate on oil taxes. Acting on felony indictments brought by the Justice
Department's Public Integrity Section, federal agents arrested the three
Republicans in Juneau — one a sitting legislator, Rep. Vic Kohring of Wasilla,
and two others who left office in January, Reps. Pete Kott of Eagle River and
Bruce Weyhrauch of Juneau. Each was brought in handcuffs before a federal
magistrate judge, and each pleaded not guilty to bribery, extortion and
conspiracy and was released on $20,000 bond. The charges carry penalties of
between five and 20 years in prison and $250,000 in fines. The indictments,
unsealed with the arrests, describe a conspiracy among the legislators, Veco,
Allen and Veco's vice president for government affairs, Rick Smith, to steer an
oil-production tax bill favored by the industry through the Legislature last
year. The bill was seen as a prerequisite for the North Slope oil producers to
agree to build a natural gas pipeline. Ultimately, Veco, Allen and Smith wanted
to see a gas line built that would help the company through contracts with the
oil companies, the indictments charged. Veco, Allen and Smith were neither
charged nor directly named in the indictments. But “Company A,” “Company CEO”
and “Company VP” are described in long passages in the indictments, and those
descriptions point unmistakably to them. Veco’s attorney, Amy Menard, confirmed
the identifications. Allen’s lawyer, Bob Bundy of Anchorage, wouldn’t comment on
what might be in store for his client. “Veco and Bill have cooperated completely
with the government’s investigation,” Bundy said. WADS OF CASH The charges
describe the three lawmakers seeking money, jobs or both for themselves or
family members, and Veco willing to oblige. Much of the activity described in
the charges took place in Veco’s suite in Juneau’s Baranof Hotel, Room 604,
during the 2006 legislative session. Direct quotes attributed in the indictments
to the three legislators and to Allen and Smith suggest the FBI conducted some
form of electronic surveillance in the room and perhaps on telephones as well.
Kott’s lawyer, Jim Wendt, said the room contained a hidden camera. He learned
about the surveillance when the prosecutors offered to make a deal with him.
They revealed snippets of their evidence, including video from inside a Baranof
room, Wendt said. FBI spokesman Eric Gonzalez wouldn’t confirm whether agents
used wiretaps or hidden cameras. A Baranof employee on Friday said the hotel
would not discuss the use of the suite.
May 4, 2007 Anchorage Daily News
Former Alaska state legislators Pete Kott and Bruce Weyhrauch have been
indicted by a federal grand jury on several counts of extortion, bribery, wire
fraud and mail fraud. Kott was arrested at home in Juneau around 9 a.m. Friday,
a spokesman for the FBI said. Weyhrauch was arrested later in the morning. Both
are being held in the federal courthouse in Juneau. FBI spokesman Eric Gonzalez
would not say if additional arrests are coming. "It’s a continuing
investigation," he said. Some of the charges against Kott and Weyhrauch involve
the Legislature’s consideration last year of a natural gas pipeline and a
petroleum production tax proposed by former Gov. Frank Murkowski. Kott, a former
House speaker from Eagle River, is accused of seeking and accepting bribes to
push positions favored by executives of a company that is not named in the
indictment. Weyhrauch traded votes for the promise of a job, according to the
charges. The company is referred to throughout the indictment as "Company A" and
is described as a privately owned company that "provided services to the energy,
resources and process industries" and "took an active interest" in the
Legislature. The indictment also refers to a prison in Barbados the company was
constructing. That description matches Veco Inc., a huge Anchorage-based
oil-field services company that has been active in lobbying the Legislature for
years. Kott lost his Eagle River seat in the state House in last year’s
Republican primary. Weyhrauch, an attorney, did not seek re-election to his
House seat representing Juneau. Both left office in January. Both were among the
six lawmakers whose offices were raided by federal agents in August as part of
an investigation into corruption. Kott was scheduled to be arraigned in Juneau
at 1:30 p.m. today. The indictment covers a period from September 2005 until the
end of August 2006. The Legislature considered the pipeline and oil tax
proposals during regular and special sessions during that time. Lawmakers in
both political parties reacted to the indictment today with disgust.
April 17, 2007 Anchorage Daily News
High up in City Hall on Friday, the Anchorage Assembly talked for hours
about road projects and budgets and the kind of things you usually don't sit
through unless you're paid to be there. Listening from the back of the room was
lobbyist Bill Bobrick. Four months after Bobrick was linked to a federal bribery
case that led to the indictment of Anchorage state Rep. Tom Anderson, he remains
one of the busier lobbyists of the city. He's got to earn a living, he says to
friends and acquaintances. He also tells them his role in the bribery case is
about to get bigger. "My understanding, real clear, is that Bobrick's going to
go in and plead guilty here real quick to a felony," said Assemblyman Dan
Coffey. Coffey said Bobrick told him just that after a late March town hall
meeting at a local school. Mayor Mark Begich, who was best man at Bobrick's
wedding in 1998 and has known him for more than 20 years, said the longtime city
lobbyist told him something less precise: "He told me he was going to plead. I
don't know what that means. And honestly, I didn't dive into it. That's an issue
that, again, doesn't relate to the city." Bobrick hasn't been charged with a
crime. He fits the description of an unnamed conspirator described in the
indictment of Anderson, who is accused of money laundering, bribery and
extortion. Public records show Bobrick as owner of a company that federal
prosecutors say was set up to funnel Anderson bribes. In exchange, Anderson
helped promote in the Legislature a private prison and juvenile treatment
facility, the indictment says. Anderson left office when his term expired in
January. Bobrick declined to be interviewed for this story.
January 14, 2007 Juneau Empire
Federal prosecutors who accused Rep. Tom Anderson of bribery and other
crimes say he also used another, unidentified legislator to carry out illegal
acts. While Anderson was advocating for Cornell Companies, a Texas-based
developer of private prisons, he also tried help Cornell win approval for a
juvenile mental-health treatment center in Alaska. To do that, he got another
legislator to try to pressure the state Department of Health and Social Services
to grant a certificate of need for Cornell's project, according to the Anderson
indictment. In competition with Cornell was North Star Behavioral Health
Systems, an Alaska nonprofit that already had operations in Anchorage and
Palmer. It was supported by a number of influential legislators, including
Senate Minority Leader Ethan Berkowitz, D-Anchorage, and Sen. Lyda Green,
R-Wasilla, president-elect of the Senate. The indictment says Anderson, an
Anchorage Republican, prevailed upon an "elected public official" to lobby for
the certificate. Documents obtained by the Empire show that Kohring was the only
legislator who wrote a letter in support of the certificate during the time
frame described in the indictment. Kohring did not return repeated phone calls
last week. In Kohring's letter to Health and Human Services officials, he wrote,
"It has come to my attention" that Cornell was seeking a certificate of need for
its project, but he didn't say how it had come to his attention. Anderson's
attorney, Paul Stockler, denied that the unnamed elected official was Kohring.
The only other letter to the state on behalf of the certificate was written by
Rep. John Harris, now speaker of the House of Representatives. Harris said he
did not recall how his letter came to be written. "I write letters for a lot of
people," he said. Harris said he didn't recall talking with Anderson about the
matter. "He and I were never close," Harris said. Prosecutors say in the
indictment that they have tape recordings of Anderson and the "elected public
official." In them, the official allegedly confirms that he contacted the
department commissioner at Anderson's request. Anderson already had been pushing
Cornell projects. Bringing in six-term representative Kohring or Harris, then
the Finance Committee chairman, may have increased Cornell's chances. The
company dropped the project, however.
January 9, 2007 Anchorage Daily News
Indicted state legislator Tom Anderson wants to delay the start of his trial
so his lawyer can better prepare. In a court motion filed Friday, Anderson's
attorney, Paul Stockler, wrote that he is still working his way through 20 discs
"which contain hours of audio and video recordings involving the defendant taken
over an extended period of time." The trial is now scheduled for Feb. 12, and
Stockler said he wants to delay it until April 23. The three-page motion
provides the first mention of video recordings in the FBI corruption
investigation of Anderson and other legislators. Anderson was indicted by a
federal grand jury in December on seven felony counts including money
laundering, extortion and bribery. The indictment contains a number of
references to recorded conversations between Anderson and two others: a
local-government lobbyist for a private corrections company and a confidential
source who had worked for the same company. The indictment doesn't specify
whether any of the recordings were on video. The indictment describes a
conspiracy that began in July 2004 in which the lobbyist set up a shell company
that existed to launder money to Anderson. The FBI gave money to the informant,
who passed it on to Anderson and the lobbyist in exchange for Anderson pushing
the interests of the corrections company. Anderson received less than $13,000,
according to the indictment. Anderson has pleaded not guilty to all the charges.
December 25, 2006 Juneau Empire
In 2004, a privately owned Texas prison firm had a problem in Alaska. Its chain
of halfway houses that took in prisoners under contract with the state
Corrections Department was struggling. It had facilities in Fairbanks, Bethel,
Nome and several Anchorage locations. Low occupancy rates were hurting profits,
especially in Anchorage. Cornell Companies, the Houston-based owner of the
facilities, also had some top lobbyists on their payroll, including a former
commissioner of corrections for the state. Also on its payroll was a key state
legislator, Rep. Tom Anderson, R-Anchorage, according to the U.S. Department of
Justice. The lobbyists' affiliation was legal, but Anderson's wasn't, according
to an indictment filed in U.S. District Court for Alaska earlier this month.
Anderson was arrested Dec. 7 on charges of bribery, extortion and money
laundering. He has pleaded not guilty. If convicted on all counts, he faces a
possible sentence of 20 years or more in prison and hundreds of thousands of
dollars in fines. Anderson was unavailable for comment for this article. On
federal wiretaps, two Cornell lobbyists were heard discussing efforts to bribe
Anderson, who they said was willing to be "our boy in Juneau" in exchange for
cash payments, according to the Department of Justice indictment. Cornell, whose
stock is traded on the New York Stock Exchange, reported revenues of $346
million last year. It was not identified in the indictment. Company spokeswoman
Christine Taylor confirmed the company had been notified of the Anderson
investigation by the Department of Justice. "We've been notified of the
indictment, but no wrongdoing has been alleged," she said. The indictment said
the company was unaware of the actions of its lobbyists. A confidential FBI
source had at various times been a lobbyist for the company. He used funds
provided by the FBI, not the company, for the bribes. He didn't notify Cornell
because of "the undercover nature of the operation," the Justice Department
said. "The corrections company was not implicated in the corrupt activities that
are alleged in the indictment," according to the Department of Justice press
release announcing the arrest. Tom Anderson: Anderson worked unsuccessfully to
help Cornell expand its private prison and juvenile detention operations into
Alaska but was more successful helping out the company's halfway houses. That
effort, not previously reported, is detailed in the indictment and in Alaska
Department of Corrections documents obtained under the state Public Records Act.
When Cornell's halfway houses were struggling, the company lobbyist approached
Anderson, who allegedly agreed to try to influence the Department of
Corrections. In exchange, Anderson apparently received thousands of dollars in
cash from the lobbyist. On Oct. 20, 2004, Anderson wrote a letter to
then-Corrections Commissioner Marc Antrim, urging more use of the halfway houses
and requesting a personal meeting. "Since private contractors only get paid for
occupied beds, severe underutilization creates serious budget challenges when
beds are left empty," Anderson wrote to Antrim on legislative letterhead. In the
letter, Anderson also noted that he was a member of the House Finance
Committee's Corrections Subcommittee. The indictment alleges that a lobbyist
wrote the letter for Anderson. On. Oct. 29, 2004, Antrim met with Anderson,
Department of Corrections records show. What happened in the meeting? "I'm not
able to comment on that," Antrim said in a phone call to his Juneau home. He is
no longer with the department. Antrim declined to say why he could not comment.
There are no indications that Antrim is under investigation. However,
prosecutors sometimes ask potential witnesses not to speak publicly about
matters that might come up in court. Federal investigators obtained bank records
showing that a Cornell lobbyist on Oct. 21, 2004, wrote a check to Anderson's
consulting business from Pacific Publishing, a company created by another
Cornell lobbyist. The check was purportedly for writing public policy articles
for a Pacific Publishing Web site. The indictment alleges that there was no web
site and that the money was laundered through Pacific Publishing to deceive the
Alaska Public Offices Commission. On the wiretaps, Anderson was overheard
acknowledging to the lobbyist that that payment and others were "not really for
your Web thing," the indictment states. The Department of Justice called Pacific
Publishing a "sham corporation" formed for the sole purpose of disguising bribe
money. In the 2004 fiscal year, Cornell received $12.1 million in state payments
for its halfway houses, $12.3 in 2005 and $12.4 in 2006, according to Richard
Schmitz, spokesman for the Department of Corrections. Alaska state law bars a
legislator from accepting money in exchange for official acts, but courts have
found the state Constitution's free speech provisions make prosecuting
legislators for such actions difficult. Anderson has been charged under federal
law, however. Federal investigators continued their investigation of Anderson
for more than two years after the Cornell lobbyist investigation, during which
time Anderson was re-elected to the House of Representatives. The U.S. Attorney
for Alaska did not say why it took so long to indict Anderson. Anderson chose
not to run for re-election this year and leaves office in January after serving
two terms in the House.
December 9, 2006 Anchorage Daily News
State Rep. Tom Anderson pleaded not guilty Friday to a series of federal
charges accusing him of selling his legislative office for $12,828 in bribes
from a lobbyist representing private prison interests. Anderson, a 39-year-old
Republican who has represented Muldoon's District 19 since he was elected in
2002, was ordered freed Friday by U.S. Magistrate Judge John Roberts on an
unsecured $10,000 bond after his arrest Thursday by FBI agents. Roberts said
Anderson could travel to Mexico on a previously scheduled vacation next week
with his wife, Republican state Rep. Lesil McGuire, who was elected to the state
Senate in November, and their infant son. The 18-page indictment against
Anderson said the lobbyist was secretly recorded July 21, 2004, boasting that
for a price, Anderson would be "our boy in Juneau." A week later, the same
lobbyist was recorded telling a confidential informant, "If I was a Soviet spy
and I was looking for a legislator to recruit, (Anderson) would be the one I'd
get." Anderson "needs the money," the lobbyist said. The government didn't
charge the lobbyist. He is identified only by the letter "A," but the facts in
the case point to Bill Bobrick of Anchorage, who represented Cornell Companies,
a private prison firm Outside. Bobrick didn't return messages left on his home
and cell phones Friday, and his business number wasn't working. On Thursday,
before Anderson's arrest, Bobrick said in an interview that he was getting out
of the lobbying business and was in the process of handing off his clients. He
cited "health issues" as the reason. Anderson, who did not seek re-election this
year and formally leaves office next month, is the first legislator charged with
corruption in office since two state senators faced charges in the early 1980s.
One, George Hohman, was convicted of bribery in 1981, while the other, Ed
Dankworth, successfully appealed his 1982 conflict-of-interest charges and never
faced trial. Anderson's seven-count indictment accuses him of going into league
with Lobbyist A to promote a private prison somewhere in Alaska and a private
juvenile treatment facility in Anchorage. In return for the money, it said
Anderson got himself appointed to legislative committees with jurisdiction over
prisons and treatment, lobbied other elected officials, agreed to align his
votes with the correction company's interests, wrote letters and publicly spoke
on behalf of company projects. Anderson disguised the source of the money in his
reports to the Alaska Public Offices Commission, the indictment charged. A
second private prison advocate secretly worked with the government to record
conversations of the lobbyist and Anderson. The informant, identified only as
"CS-1," used money provided by the FBI in the payoffs. The private prison
company was identified only as "Corrections Company" in the charges, but the
facts squarely match Cornell Companies Inc. of Houston, Texas, a publicly traded
corporation with facilities in 17 states. Cornell operates six halfway houses in
Alaska from its buyout of Anchorage-based Allvest Corp. With partners Veco and
Allvest founder Bill Weimer, Cornell failed to win public support for private
prison proposals in Anchorage, Delta Junction, Kenai and Whittier. The proposals
were all highly controversial in the communities, though they often sailed
through legislative committees. During a House Finance Committee hearing May 9,
2004, Rep. Eric Croft, D-Anchorage, said the effort was corrupting the state.
"What I see, over and over, is repeated sole-source, pre-arranged, heavy-money
deals that go to specific contractors. ... It's never been a clean, competitive
proposal," Croft said at the time, the only member of the committee to object.
"We are going to see somebody indicted and probably imprisoned over this series
of proposals." A prepared statement from the Justice Department released Friday
said the corrections company was never told about the payments to Anderson "due
to the undercover nature of the operation." It said the company "was not
implicated in the corrupt activities that are alleged in the indictment."
Christine Parker, a spokeswoman for Cornell in Houston, said, "There's nothing
that we knew of, or were aware of, until this indictment was issued." Anderson
arrived for his arraignment in federal court Friday wearing a bright yellow
jumpsuit with the word "PRISONER" across his back. His legs were shackled as he
rose for the judge alongside his defense attorney, Jeffrey Feldman of Anchorage.
The hearing lasted 19 minutes. His trial was set for Feb. 12. If the government
was making a point to other potential defendants in its ongoing investigation
into corruption, the message was tough. Nicholas Marsh, a trial attorney from
the Justice Department's Public Integrity Section in Washington, D.C., told the
court the charges carried penalties ranging from a maximum of five years and a
$250,000 fine for conspiracy to a maximum of 20 years and $500,000 for each of
three money laundering charges. Anderson was also accused of two counts of
extortion (20 years and $250,000) and one count of bribery (10 years and
$250,000). The activities alleged in the indictment took place long before the
coordinated raids of Aug. 31, when the FBI searched the offices of 10 percent of
the 60-member Legislature. Anderson's office wasn't among them, and it's unclear
how his case is related. Marsh, assistant U.S. attorney Joseph Bottini and FBI
agent Mary Beth Kepner, a leader of the corruption probe, left quickly after the
arraignment and declined to answer questions. The conspiracy alleged in the
indictment began in July 2004 and continued through the following March. It said
that Lobbyist A set up a shell company called Pacific Publishing that existed
solely to launder money to Anderson. The company would pay Anderson to write
articles about politics that would be published on its Web site, but Anderson
was paid without ever scribbling a line. CS-1 paid Lobbyist A $24,000 in three
payments. The cover story was that the money was for advertising on the Web
site, but they agreed the money was really for Anderson's pocket, with "A"
taking a sizable cut. The indictment said CS-1 had worked for the corrections
company as a lobbyist "at various times." The identity closely matches Frank
Prewitt, a former Alaska corrections commissioner appointed by Gov. Wally Hickel
and who later went to work for Cornell. In an e-mail exchange with the Daily
News on Friday, Prewitt suggested he was the source, though he stopped short of
confirming it. "At this time it is inappropriate for me to talk about the
voluntary role that I and others may have played in the Anderson investigation,"
Prewitt wrote. "Over the next year I believe you will find that this was only
the beginning of the end of a sad, but healthy chapter in Alaska history. My
prayers are with Representative Anderson and his family during this difficult
time for all." The first recorded conversation cited in the indictment occurred
July 16, 2004, when the lobbyist suggested to the confidential source that they
"try with (Cornell) to help out Tom Anderson." Five days later, the lobbyist
told the source that Cornell should hire Anderson through him. Rather than
report Cornell, with its interest in legislation and other government action, as
the source of the money, Anderson said he was paid for writing for the Pacific
Publishing Web site. Anderson himself was recorded Aug. 17, 2004, telling the
confidential source: "APOC only needs to know (Bobrick) pays me and then we're
all safe." The source paid the lobbyist the first $8,000 Aug. 19, 2004, the
indictment charged. Out of that, Anderson received $3,328, which he deposited
Aug. 23 into the account of his personal consulting firm, Alaska Strategic
Consultants. In a recorded call Oct. 20, 2004, the source told Anderson he had
prepared the next $8,000 payment and planned to pass it on to the lobbyist.
"Awesome. Awesome. I appreciate it," Anderson is quoted as saying. Anderson
received a $3,500 advance from that payment, the indictment charged. The source
made his last $8,000 payment on Dec. 21, 2004. Anderson got $4,000. But late in
the scheme, the indictment alleged, Anderson was showing signs of unhappiness
over splitting the money with the lobbyist. According to excerpts of recordings,
the confidential source appeared at first to encourage the disaffection, saying
it wasn't the lobbyist who was speaking out and voting for Cornell, but rather
Anderson. "I know," Anderson said. But then the source suggested the lobbyist
might become "estranged" if he were cut out of the deal. The source thought that
he could make a separate payment direct to Anderson. "If there's a way you can
think of that, that would be nice," Anderson replied. The source obliged,
handing Anderson a $2,000 check Dec. 21, 2004. The indictment said the check was
made payable to Tom Anderson.
December 8, 2006 Anchorage Daily News
A federal grand jury has indicted an Alaska lawmaker on charges of extortion,
conspiracy, bribery, and money laundering, federal officials said Friday. A
seven-count indictment was returned against state Rep. Thomas T. Anderson,
R-Anchorage, on Wednesday, assistant Attorney General Alice S. Fisher said.
Anderson was arrested Thursday, and was being held at the city jail. The
indictment charges Anderson with two counts of extortion, one count of bribery,
one count of conspiracy, and three counts of money laundering in connection with
the use of a sham corporation to hide the identity of the bribery payments,
Fisher said in a prepared statement. The indictment also alleges that Anderson
solicited and received money from an FBI confidential source in exchange for
Anderson's agreement to perform official acts to further a business interest
represented by the confidential source. The indictment alleges from July 2004 to
March 2005, Anderson and an individual described in only as "Lobbyist A"
solicited and received $26,000 in payments from an FBI confidential source in
exchange for Anderson's agreement to act on his behalf in the legislature,
according to the statement released from the U.S. Department of Justice.
Anderson and the unnamed lobbyist created a sham corporation to conceal the
existence and origin of the payments, and used the corporation to funnel a
portion of the $26,000 to Anderson, the indictment says. The FBI's source was a
consultant for a private corrections company located outside the state of
Alaska, and Anderson and the lobbyist initiated contact with that confidential
source in order to solicit bribery payments, the indictment alleges. The source,
however, never communicated any information to the corrections company due to
the undercover nature of the operation. The corrections company was not
implicated, federal officials said. If convicted, Anderson faces a maximum
penalty of 20 years and a $250,000 fine on the extortion counts; a maximum
penalty of 20 years and a $500,000 fine on each of the money laundering counts;
a maximum penalty of 10 years and a $250,000 fine on the bribery count; and a
maximum penalty of five years and a $250,000 fine on the conspiracy count.
Anderson was scheduled to be arraigned Friday, assistant U.S. Attorneys Joseph
W. Bottini said. It was not immediately known if he had hired a lawyer. Anderson
is married to former state Rep. and now state Sen.-elect Lesil McGuire, who did
not return messages left on her cells phones Friday. Anderson, who was elected
to the state House four years ago, did not seek re-election. He leaves office
this month.
October 9, 2006 Anchorage Daily News
When FBI agents searched the Wasilla office of Rep. Vic Kohring on Aug. 31,
they weren't just looking for documents related to Veco Corp., its executives
and ties to lawmakers. They also wanted information about developer Marc Marlow
as well as the state Department of Corrections. That element of the ongoing FBI
investigation emerged last week when Kohring's attorney, Wayne Anthony Ross,
provided a copy of the search warrant to the Daily News, along with the list of
items taken. Those documents, though lacking detail or context, suggest that the
probe is wide-ranging and not focused on any one company, issue or individual.
No one has been charged in the investigation, and federal authorities have
declined to discuss it except to say that it continues. The lead prosecutors are
from the Department of Justice's Public Integrity Section in Washington, D.C.,
which often handles government corruption cases. In all, offices of six
lawmakers have been searched, along with Veco offices and additional undisclosed
locations. Other lawmakers whose offices weren't searched have said they were
interviewed by the FBI. The warrant also sought all correspondence between
Kohring and the Alaska Department of Corrections. Ross said Kohring was
questioned by the FBI about efforts to build a private prison in Whittier. "He
indicated it was a facility that Cornell was hoping to build in the past and
that's apparently all they asked about that," Ross said. Cornell Cos. had teamed
with Veco in the private prison endeavor, which ultimately died last year after
the city of Whittier dropped its support. Along with those of Kohring and
Stevens, FBI agents searched offices of Sen. John Cowdery, R-Anchorage; Sen.
Donny Olson, D-Nome; Rep. Pete Kott, R-Eagle River; and Rep. Bruce Weyhrauch, R-
Juneau. Messages left for them were not returned. Kohring is the only one of the
six still facing an election battle in November. Kott lost in the primary,
Stevens and Weyhrauch aren't running again and the others aren't up this year.
What's known: • Dozens of FBI agents executed about two dozen search warrants
Aug. 31 and Sept. 1, though in some cases individuals agreed to the search. •
Six legislative offices were searched, and so was Veco Corp. Searches were
conducted in Anchorage, Juneau, Eagle River, Wasilla, Willow and Girdwood. The
office of Senate President Ben Stevens was then searched a second time, on Sept.
18. • One search warrant, provided by Sen. Donny Olson, said the FBI was looking
for "any and all documents" related to Veco, four of its executives and two
political pollsters, as well as information on Olson Air Service, among other
matters. When agents searched Stevens' office, they seized materials related to
controversial fisheries organizations. In the search of Rep. Vic Kohring's
office, agents also sought information on developer Marc Marlow and on the state
Department of Corrections. • The lead prosecutors on the case are from the
Justice Department's Public Integrity Section in Washington, D.C., which handles
public corruption cases. • No one has been charged. What's not known: • Perhaps
the biggest of the many unanswered questions is this: Who or what is being
targeted? • Authorities also won't say how many FBI agents or prosecutors are
working on the investigation, when it began, when it might end or how they are
proceeding.
September 29, 2006 Anchorage Daily News
Six executives for the Veco Corp., the company named in the federal
investigation into political corruption in Alaska, donated at least $119,000 to
the campaigns of candidates running for more than half the seats open in this
year's primary election. The total might have still been climbing had not the
FBI raided the company's corporate headquarters and the offices of at least a
half-dozen state lawmakers two months before the Nov. 7 election. Veco's total
in this election cycle is a little more than half the $200,000 its executives
generated for legislative races in 2004, but Veco money has suddenly become
unwanted across most of the political spectrum. Scores of Alaskans are regular
and generous contributors to political candidates, year after year. Developers,
construction company owners, doctors, lawyers, business owners, oil and gas
executives, retirees. Many give the candidates of their choice the maximum
amounts available in a given year -- $1,000 annually since 2003; $500 annually
starting next year under an initiative passed by voters in August. Veco's six
executive contributors -- chairman Bill Allen, president Peter Leathard, chief
financial officer Roger Chan, vice president Rick Smith, information officer
Thomas Corkran and personnel manager James Slack -- regularly donate to a
similar list of candidates, usually in the same $500 amounts and with checks
dated within a few days of each other. As is usually the case, almost all the
Veco money donated to candidates this year and during the 2005 interim year went
to Republicans, and the vast majority to incumbents.
September 24, 2006 Anchorage Daily News
Last month, state Rep. Tom Anderson testified before the Anchorage Assembly
in favor of Wal-Mart's plan for two stores in his old neighborhood. Assembly
chairman Dan Sullivan introduced him as Representative Anderson, but the
lawmaker for Muldoon corrected him. He was there representing the home builders
association, Anderson said. Anderson, who was a consultant before he was elected
to the state House four years ago, has never stopped making money on the side as
a paid adviser for clients who do business with state and local government. His
dual role may have surprised the Assembly in August. But it would not have
surprised some members of the Northeast Community Council, the neighborhood
group that opposed the stores. They recall seeing Anderson at their meetings all
though 2003. They assumed he was there as the local state legislator. But
Anderson's state financial disclosure form, filed the following year, revealed
he was also working as a $10,000 consultant on community councils and local
government for the oil field services and construction company Veco. "We are all
going, 'This is so bogus,' " said council president Peggy Robinson, who
publicized Anderson's Veco connection in an unsuccessful bid to topple Anderson
from his House seat in 2004. Now Anderson's role as a consultant to industry is
coming under scrutiny again, following last month's FBI searches of six
legislative offices seeking information on legislators' links to Veco. A rule
insisting on proper qualifications would probably have done little to crimp
Veco's employment of legislators. Stevens and Anderson were both consultants
before they ran for office. Arrangements between Veco and two other lawmakers
show up in state disclosure forms dating back to 2002. One was for a boat rental
from a fisherman, one was for legal work from a lawyer. In 2002, Veco paid
$17,600 to use a boat owned by Rep. Paul Seaton, R-Homer. The contract came in
the summer before Seaton, a commercial fisherman who owns several boats, was
first elected. He said his fish tender just happened to be available in upper
Cook Inlet when Veco needed a standby safety vessel during a short oil rig
construction job. The legal payments went to then-Sen. Robin Taylor, who got
into a jam with critics in his home town of Wrangell over that work. Taylor, a
lawyer and longtime chairman of the Senate Judiciary Committee, reported being
paid $15,700 for legal work by Veco in 2000, $19,300 in 2001 and $16,800 in
2002. He also served as city attorney for Wrangell during that period. Critics
accused Taylor of hiding his Veco ties when the city council considered taking
up a private prison project in 2001. Veco had been part of the consortium whose
prison plan had just been turned down in Kenai. Taylor insisted he had disclosed
his Veco ties on state forms and didn't need to announce them. Taylor retired
from the Senate and his private legal practice in 2003 and is now head of the
state marine highway system. He was among the current and former legislators
known to have been interviewed by the FBI in the current investigation. Taylor
said last week that he had never been lobbied by Veco over the prison. As far as
he knew, he said, Veco wasn't interested in a Wrangell prison. "It's a breach of
attorney-client privilege, but I can tell you up front: That client never talked
to me once about that project," Taylor said.
September 7, 2006 Anchorage Daily News
For two decades, oil man and political financier Bill Allen has been a familiar
presence in the halls of the Alaska Capitol. But toward the end of this year's
regular legislative session, the Veco chief executive may have taken that
familiarity a step too far. Allen was watching the state House debate oil taxes
on the next-to-last night of business in May when he began passing notes to
legislators across the railing of the small spectator gallery, according to Rep.
Harry Crawford, D-Anchorage. Rules say the public can pass notes through the
front door to be delivered by a page. Direct engagement from the visitor gallery
is forbidden once the speaker's gavel sounds. Crawford said he saw Rep. Tom
Anderson, R-Anchorage, carry several notes from Allen to other legislators.
Anderson has received Veco campaign contributions and has also reported $30,000
in consulting contracts with the company since 2003. Several other legislators
say their staff observed similar goings-on. "He was definitely directing traffic
back there," Crawford said of Allen. Veco's role in Alaska's political process
is under intense scrutiny now. Last week the FBI served search warrants on
legislative offices and others seeking a wide range of information related to
Allen and other Veco executives, including gifts to public officials. But much
of Veco's influence, dating from the early 1980s, comes from sources in plain
sight. This includes close to $1 million in state and federal campaign
contributions over the past decade as well as consulting contracts with
individual legislators. Veco's presence in Juneau is distinctive not just for
its role in helping finance many campaigns but for the personal role played by
Allen and several other company executives. Veco has hired top-drawer
professional lobbyists in the past, as it did while pushing for a private prison
between 1996 and 2002. But Allen, 69, is known for taking a personal hand in
promoting his priorities, in a manner often described as gentlemanly rather than
bullying. In 1996, the Legislature added a new twist -- anyone registering as a
lobbyist was barred from giving campaign contributions outside his or her home
district. The idea was to prevent favor-seeking lobbyists from working a
building full of people they'd given money to. Allen spent a lot of time in the
Capitol in 2002, pressing the Legislature to pay for a private prison in
Whittier (Veco was teamed with a national prison company, Cornell, to build the
project) and to authorize a property tax break for construction of a North Slope
natural gas pipeline. Allen was in the Capitol so much that APOC ordered him to
register as a lobbyist. Allen protested, saying business owners looking out for
their own interests should not be treated like professional lobbyists who
represent a variety of clients. Allen eventually complied, registering for 2002
and 2003 and reporting his hourly wage as $156.25. That meant he had to forgo
writing campaign checks in those years. (Not that candidates were starved for
Veco money: Other company officials gave more than $200,000 to state candidates
in 2002 alone.)
September 1, 2006 Alaska Report
The FBI served four more search warrants today in its
investigation of the relationship between lawmakers and oilfield services
company VECO Corporation, an Anchorage-based oil field services and construction
company whose executives are major contributors to political campaigns. Bill
Allen, owner of VECO, and his firm, were involved in a renovation of Alaska
Senator Ted Stevens' chalet in Girdwood in the recent past. The Associated Press
is reporting that the search warrants seek "from the period of October 2005 to
the present, any and all documents concerning, reflecting or relating to
proposed legislation in the state of Alaska involving either the creation of a
natural gas pipeline or the petroleum production tax." An Anchorage FBI
spokesman says that about two dozen search warrants have been executed so far,
including three today in Anchorage and one in Willow. No arrests have been made
as of yet. AlaskaReport has learned that a staffer in one of the offices raided
has been providing information to federal authorities. In an interview with KTUU-TV
in Anchorage, Wev Shea, a former U.S. attorney for Alaska says he knows who
created the climate that he alleges allowed corruption to flourish. "The
Republican Party is going to rue the day in this state for allowing Randy
Ruedrich (chairman of the Republican Party of Alaska) to remain as a chair. He's
bringing this party down and it's bad." KTUU also interviewed Rep. Eric Croft.
He says he saw this coming two years ago, during a legislative committee meeting
concerning VECO’s pitch for a sole-source contract award for a private prison.
"I said at the time, in 2004, on the Whittier proposal, someone's going to jail
over this 'cause I could see how corrupt the process was," said Croft,
D-Anchorage.
August 31, 2006 Anchorage Daily
News
Federal agents swarmed legislative offices around the state Thursday,
executing search warrants in a coordinated series of raids that appeared to
target the longstanding relationship between the oil-field service company Veco
and leading lawmakers. Above Anchorage’s 4th Avenue, FBI agents spent most of
the afternoon behind the closed doors and drawn blinds of the fifth-floor
offices of Senate President Ben Stevens and Senate Rules Committee Chairman John
Cowdery, both Anchorage Republicans. Through slits in the blinds, one agent in
Stevens’ office, wearing rubber gloves, could be seen packing away evidence in a
container. In Juneau, tourists and residents were greeted with the extraordinary
sight of FBI agents hauling out files form the Alaska State Capitol after
searching offices there. After the FBI searched his Wasilla office and
questioned him, Rep. Vic Kohring, R-Wasilla, the chairman of the House Special
Committee on Oil & Gas, said the investigation was focused on Veco. Other
legislative offices known to have been searched Thursday included those of Reps.
Pete Kott of Eagle River and Bruce Weyhrauch of Juneau, and Sen. Donny Olson of
Nome. Kott, a former House speaker, and Weyhrauch are Republicans. Olson is the
only Democrat in the group. FBI spokesman Eric Gonzalez said federal agents
executed about 20 search warrants Thursday, not all in legislative offices. The
warrants were executed in Anchorage, Juneau, Wasilla, Eagle River and Girdwood,
he said. Ray Metcalfe, a former legislator and the founder of the independent
Republican Moderate Party, said he has been trying to get the authorities
interested in what he described as the “corrupt” relationship between Veco and
the Republican-lead legislature, principally Ben Stevens. “I put all the stuff
in front of federal prosecutors a year and a half ago,” Metcalfe said Thursday,
clearly relishing the turn of events. “I laid hundreds of pages of detailed
information alleging bribery, and I distributed it to federal authorities, I
distributed it to the U.S. Attorney’s office, I distributed it to the (state
attorney general’s) Office of Special Prosecutions, and we held a demonstration
in front of the attorney general’s office that hardly anyone showed up for.”
Metcalfe attempted to initiate a recall campaign against Stevens, but his effort
was rejected by Lt. Gov. Loren Leman on legal grounds. After first announcing
he’d run for re-election in November, Stevens changed his mind in June and opted
to retire. Tamara Cook, a lawyer who heads the nonpartisan legal services
division of the Legislature, said Thursday evening that she reviewed a couple of
the search warrants at the request of legislators or aides upon whom they were
served. The search warrants allowed the FBI to search computers and office files
including financial records, she said. The warrants named Veco Corp., she said,
but could not say whether Veco was a target or whether the investigation
concerned oil taxes, its failed push to build a private prison in Alaska or
something else.
June 11, 2006 Anchorage Daily News
The response of Paul Doucette, the executive director of the Association of
Private Correctional and Treatment Organizations, complaining about the building
of a state prison in Mat-Su is somewhat ironic. For seven years, Cornell
Corrections, which had Mr. Doucette as its vice president, labored mightily to
stop the state from building a state-operated prison in Mat-Su as it tried to
foist off its own low-paying, dangerous Rent-a-Pen proposals in Wrangell, Sitka,
Ketchikan, Kenai, Delta Junction, Nome, Houston, Sutton and finally Whittier.
Democrats and good-government Republicans defeated their immensely expensive
lobbying efforts year after year, despite the dough Cornell shoveled toward its
efforts. This is all a matter of extensive record. Now Doucette is complaining
about the state closing one of Cornell's halfway houses in Anchorage. The
Department of Corrections is exploring far less expensive options such as ankle
bracelets to track those released conditionally or those less dangerous who are
diverted from prison in the first place. Doucette and APCTO are little more than
the public-relations arm of the for-profit prison industry, and their bleatings
and Tobacco Institute-type research should be given the credibility they
deserve: zero. --- Frank Smith, Private Corrections Institute, Bluff City,
Kan.
February 10, 2005 Anchorage Daily News
The governor is asking lawmakers for $116 million to cover this year's rising
costs of public services, including medical care for the poor and elderly, fuel
for state ferries and buildings, and fighting last summer's wildfires. An
increase in the contract rate for housing state inmates at a private prison in
Arizona means the Department of Corrections needs $2.3 million to cover its
higher costs this year, Frasca said. The daily rate went up 8 percent, from
$52.93 to $57.15 per inmate, said Richard Schmitz, spokesman for the department.
Alaska pays to house about 750 inmates at the prison, he said.
October 16, 2004 Salon
In any other election year, Alaska's conservative
electorate could be expected to chill Democratic hopes of taking over a United
States Senate seat held by a Republican incumbent. Republicans hold every
statewide elected office, enjoying a powerful base of support from the dominant
energy, fishery and development industries, as well as an ideological advantage
among the state's many gun-toting libertarians and fundamentalist Christians. But
this year is not like any other election year in Alaska, principally because of
what may well turn out to be a fateful mistake by Gov. Frank Murkowski when he
ascended to his current office from the Senate two years ago. In an act of
hubris that outraged critics across the political spectrum, the new governor
appointed his daughter Lisa Murkoswki to succeed him in the Senate.
In the Murkowski political clan, the father has become the
daughter's weighty albatross, and vice versa. For the past several months, the
governor and the senator have assiduously (and somewhat oddly) avoided public
appearances together. For obvious reasons they would prefer not to remind
anybody that they're related, at least not until after Election Day. Amazingly,
the official biography on her Web site neglects to mention the existence of her
father, the governor. But
the most generous donors to Murkowski's Senate campaign seem well aware of her
filial relationship to Alaska's most powerful public official. Major
corporations and other special interests needing favors from the governor have
poured money into his daughter's war chest. And perhaps not surprisingly, their
generosity has coincided with favorable action by the governor. But
for Lisa Murkowski, the truly big money has flowed in from Veco Corp., a major
Anchorage construction firm. Veco is not only the largest single donor to the
Republican senator but is regarded by many Alaskans as the most powerful company
in their state. While its interests are broad and varied, from the oil
industries to local construction, the Halliburton-like firm has an important
potential stake in one of the state's most controversial projects: a private
prison in the port town of Whittier that could ultimately cost the state more
than $1 billion. Alaska currently rents space for more than 700 state prisoners
at a privately run correctional facility in Arizona, under an arrangement that
harms convicts' families, while draining money from the state. Pressure to
ameliorate this situation has been growing. For several years, Cornell Companies
of Texas, a major corporate prison operator, has proposed building a new
privatized prison in Alaska. Their fortunes began to improve after they teamed
up with Veco in 2002. Facing opposition from state correction officials, unions
and local communities, Frank Murkowski declared his firm opposition to any
private prison construction when he ran for governor in 2002. Since taking
office, however, the senior Murkowski has gradually backed away from that
position over the past year. Although Gov. Murkowski's aides said he still
opposed the Veco-Cornell prison plan in the spring of 2003, he then turned
around and told legislators that the issue still required "further
study." This was a substantial victory for Veco and Cornell, whose
executives insist their plan would be cheaper than building and operating new
public prison space. By last April, Murkowski's aides were floating plans for a
"compromise" that would allow construction of the privatized prison,
financed by state bonds, if it met certain conditions imposed by state
authorities. What caused the governor to change his strongly stated opposition
to privatized prisons? He hasn't explained his shift yet. But in May 2003, a
prominent Anchorage architect named Mark Pfeffer met with his aides to promote
the Veco-Cornell prison project. Pfeffer had recently joined the prison
consortium, and he had also signed on as treasurer for Lisa Murkowski's
reelection campaign. Around that time, her father began to back away from his
pledge to oppose private prisons, issuing a vague announcement that his
administration would take a "fresh look" at the Veco-Cornell prison
plan. Meanwhile, money from Veco and its lobbyists has flowed into Lisa
Murkowski's campaign. The first $2,000 check from Veco chairman Bill Allen
showed up on May 13, 2003, only days after the Anchorage Daily News reported the
governor's shift on his project. Allen, who registered as a lobbyist in
Anchorage to push the project, has given regularly and generously -- as have
other Veco executives, whose total of $43,750 is Murkowski's largest single
donation. Lobbyists from Patton Boggs, which represents Veco in promoting the
prison deal, have given her an additional $12,000. The
pattern appears plain enough. While the Murkowskis pretend not to know each
other, the special interests that know them both have invested heavily in her
campaign while awaiting his nod.
May 8, 2003
Rival bills to build a mega-prison have been shelved in the Legislature for this
year, as the Murkowski administration says it wants to take a fresh look at
corrections issues -- including the relative costs of private and public prisons
-- before taking up the matter again. The pause appears to give new
breathing space to advocates of building a 1,200-bed private prison in
Whittier. Murkowski spokesman John Manly this week reiterated the
governor's opposition to the Whittier plan, which would create Alaska's first
private prison. Testimony this year over the rival Whittier and Mat-Su
bills featured conflicting and controversial cost claims, with Texas-based
Cornell Companies and the state corrections officials each processing their
approach would be cheaper than the other. But Manly denied a report this
week from a leading private prison backer that the administration plans to set
up a public-private working group to explore the prison issues. Cornell
consultant Frank Prewitt, a former state corrections commissioner and the
spokesman for a politically powerful consortium of prison-building companies
pushing the Whittier plan, told the Whittier City Council earlier this week that
the Murkowski administration had developed misgivings about cost estimates from
the state corrections department. Outlining late-session lobbying efforts
on the prison bills, Prewitt wrote in a memo to Whittier officials that
Murkowski had finally asked for a "time out" to set up an interim
committee to assess the administration's next move. Manly dismissed
Prewitt's account as the self-serving work of a partisan in the debate.
"It was nice of him to make an announcement for us," Manly said.
Despite strong support in past Legislatures, based partly on claims they could
save money, private prison plans have foundered in the face of local opposition
in South Anchorage, Delta Junction and Kenai. (Anchorage Daily News)
March 14, 2003
Backers of a proposed 1,200-bed private prison in Whittier are attacking the
Corrections Department argument that a state-run prison in the Matanuska-Susitna
Valley would be cheaper. "The question is whose figures do you
believe," said Sen. Gary Stevens, R-Kodiak, chairman of the Senate State
Affairs Committee. Gov. Frank Murkowski has endorsed the bill calling for the
state-run prison in Mat-Su. He opposed private prisons during his campaign, and
his commissioner of corrections, Marc Antrim, has said he believes prisons ought
to be run by the state rather than for profit. Antrim testified last month
that the state's costs under the Whittier private prison bill would be an
estimated $127.25 a prisoner a day. The proposal for a state-run prison would
cost $110.39, he said. Those numbers struck right at the heart of the
arguments from private prison backers, who claim it would be cheaper than a
government operation because of lower wages and benefits for prison workers and
other efficiencies. The cheapest option would be to leave the Alaska
prisoners in Arizona, state figures say. But persistent objections are raised
that having the prisoners thousands of miles from their homes is bad for
rehabilitation, and that the state's money is being exported. (Anchorage
Daily News)
February 19, 2003
Efforts to win state funding for a 1,200-bed private prison in
Whittier
are under way once again. But this year the prison has a new rival: a 1,200-bed
state-run prison proposed for Sutton in the Matanuska-Susitna Borough.
Both the private and public prison plans have powerful backers in
Juneau
. Gov. Frank Murkowski has not yet weighed in, but administration officials
appear to be leaning toward a state-run facility. Murkowski said during the
campaign that he opposed building a large private prison in
Alaska
. "There's no indication of a
change within the new administration or the Department of Corrections,"
said Portia Parker, assistant commissioner of corrections. "I don't see how
you're going to run a facility economically in
Whittier
. It's going to be very, very difficult."
Currently about 650 inmates are housed in a private prison in
Arizona
. Cornell has led a well-endowed
consortium, including
Anchorage
design and construction companies, that has been the only real contender for
the state contract. Under Cornell's plan, the city of
Whittier
would finance and own the new prison with bonds guaranteed by a long-term state
contract. But Cornell has lost some
powerful legislative backers to electoral turnover. Their new champion is
freshman Rep. Mike Hawker, R-Anchorage, whose
Hillside
district includes
Whittier
. "The governor has said he'll
be open and receptive to consider all suggestions from the Legislature,"
said Hawker, who introduced HB 55, the private-prison bill. He said opposition
to the private prison has come mainly from unions afraid of losing jobs.
Hawker faces a formidable bipartisan list of sponsors for the Mat-Su
proposal, SB 65, headed by Sen. Lyda Green, R-Wasilla, the co-chairwoman of the
Senate Finance Committee. The Mat-Su
area wants the jobs from prison expansion but has been clear about not wanting a
private prison, Mat-Su Borough manager John Duffy said.
We believe that correctional facilities should be operated by the public
sector. It's just like state troopers," Duffy said.
This year, Cornell has an undefined "teaming agreement" with
the Alaska Native Brotherhood of Juneau and is talking with other Native groups,
Prewitt said. (Anchorage Daily News)
January 17, 2003
Loren Leman stopped an initiative drive seeking to decriminalize marijuana,
ruling Tuesday that hundreds of signatures collected were no valid. Leman,
a former state senator who sponsored a bill in 1999 to turn back the state's
medical marijuana laws, said in a statement that the pro-marijuana group will
have to begin from scratch to get its measure before voters in 2004. The
proposed initiative would have asked voters in the August 2004 primary ballot to
decriminalize and regulate marijuana. (AP)
January 18, 2003
It looks like the legislature will be debating the merits of a private prison
again this year. Two Anchorage representatives are sponsoring a bill to
have the city of Whittier contract to have a 12-hundred bed private prison built
there. A similar bill failed to pass the Legislature last year. (KTVA.com)
October 21, 2002
James Price was driving to Ninilchik, where the state shut down a road
maintenance station this winter for lack of funding, as he talked about what's
wrong with Alaska's government. He's the only candidate opposing incumbent
Rep. Mike Chenault, a Republican and fellow Nikiski resident. The way he
sees it, special-interest groups back major candidates and get favors in return
that skew the state budget. A case in point, he said, was the private
prison proposal that polarized citizens on the Kenai Peninsula. Price led
a group opposing the prison project, and Chenault wrote legislation supporting
it. Voters turned it down in a special election. The borough mayor
and Assembly backed the project. "I looked at the prison as an
opportunity for economic development," Chenault said. (Anchorage
Daily News)
August 24, 2002
Calling them part an
organized effort to hurt his chances in Tuesday's
Republican Party primary race for Sen. District Q, Republican Sen. Jerry
Ward responded to statements made in three letters to the editor appearing
in Thursday's edition of the Peninsula Clarion.
"What
we have here is a last-minute letter-to-the-editor campaign,
orchestrated with the help of whoever places the letters (in the paper) who
is trying to generate a story, and controlled by Outside interests trying to
influence the election on the Kenai Peninsula," Ward said. "Sleazy,
last-minute attacks are not accepted well on the Kenai Peninsula, and I'm
sure that this one will not be either."
One
letter writer asked why Ward seemed "so fixated" on having Alaska
indebted to Cornell Corrections, the firm that worked unsuccessfully to put
a private prison in Kenai.
Another
letter writer, Frank Smith, who lives in Bluff City, Kan., also
questioned the connection between Ward, private prison backers and the
failure of the effort to bring one to Delta Junction in 1999. Allvest Inc.
and Delta Corrections Corp. entered an agreement with Delta Junction that
later ended up in a breach of contract suit settled out of court. Smith said
the attempt to put a private prison at Fort Greely ended up leaving that
community with a $1 million debt.
Peter
Hallgren, city administrator of Delta Junction, said it is a sore
subject in the community, adding that he did not want to rehash old details.
He
did not categorize what connection, if any, Ward had had with the effort
to put a prison at Fort Greely.
"The
city of Delta Junction wants to put the entire prison matter as far
behind it as it can and has no interest in engaging in election debates at
this point," he said. "There is no question we have a million-dollar
liability from the prison lawsuit settlement."
Hallgren
went on to say, however, that Ward did support a legislative effort
to provide relief for Delta Junction this year. (Peninsula Clarion)
July 5, 2002
Gov. Tony Knowles'
veto of a $1 million interest-free loan to the city of
Delta Junction caught city officials off guard.
The loan would have allowed the city to finish paying its $1.1 million
breach-of-contract settlement with Allvest Inc. and Delta Corrections Corp.
stemming from a failed effort to build a private prison at Fort Greely. The
money was due July 1.
Knowles' spokeswoman Julie Penn said a provision in the loan bill would
have
converted the loan to a grant if the city became part of an organized
borough. A
state bailout of a city's lawsuit could set a bad precedent, she said.
"The
state was not a party to the litigation," Penn said. (The Associated
Press State and Local Wire)
June 29, 2002
Democrat Gov. Tony Knowles signed into law a $2.4 million budget that funds
state government next fiscal year, but deleted millions in GOP projects.
"It makes a mockery of the cries for fiscal restraint," Knowles
said. Alaska's fiscal straits were a passing concern for the Legislature
this year as the state faces a $1 billion budget deficit in future years.
Among other projects Knowles vetoes Friday: A $1 million, no-interest loan
to Delta Junction to pay legal expenses for a lawsuit stemming from a plan to
build a private prison. (The Associated Press)
May
24, 2002
A private prison won't be going up in Whittier. The Whittier private
prison bill was one of the two measures favored by Anchorage oil field services
and construction firm Veco that faltered this season. The prison bill came
to close to passing. It made it through the House and through most of its
Senate committees but ran in the Senate Rules committee. (Anchorage Daily
News)
Alutiiq
Security and Technology
Wackenhut
April 26, 2005 Anchorage Daily News
A union with nearly 2 million government and
private-sector members wants the U.S. Department of Labor to investigate how a
$450 million contract awarded to an Alaska Native company is being handled. The
Service Employees International Union says at least 17 private security guards
employed by Alutiiq, a subsidiary of Kodiak-based Afognak Native Corp., plan to
file claims with the Labor Department saying they were shortchanged on pay.
Alutiiq says the union is misinformed and is engaged in a smear campaign with
the goal of increasing its membership. "This shows the peril of
subcontracting to a company that has low standards," said Stephen Lerner,
head of the union's building services division. He was referring to
multinational security giant Wackenhut Corp., Alutiiq's subcontractor. Wackenhut
is a subsidiary of Britain-based Group 4 Securicor, the world's second-largest
private security firm. Alutiiq, with Wackenhut, won a sole-source contract from
the U.S. Defense Department in August 2003 to provide armed guards at 18
military installations in the Lower 48, said Dick Hobbs, Alutiiq's executive
vice president for operations. The contract is worth $90 million annually and
can be renewed for up to five years, he said. No competitive bidding took place
because the contract was awarded under legislation authored by Sen. Ted Stevens,
R-Alaska, that gives Alaska Native corporations preferential treatment in
getting government work. Congress' intent was to give Alaska Natives a
competitive edge in business, and a growing number of the Alaska companies have
won billions of dollars' worth of contracts in recent years. The practice, under
fire from public watchdog groups, is currently being investigated by the
Government Accountability Office.
December
10, 2004 News & Observer
We commend your excellent Nov. 30 editorial and the
fine investigative report on Nov. 28 on the award of no-bid deals to Alaska
Native Corporations such as Alutiiq Security and Technology. We endorse your
call for urgent scrutiny of this system and the back-door access it affords
major defense contractors like Wackenhut Corp. to gain lucrative federal work by
teaming with Alutiiq as a subcontractor. Your reporters quoted an Army spokesman
who said that Alutiiq, with little experience in security, would have been
unlikely to win the contract on its own. But it gets even worse: Wackenhut was a
failed bidder in the second phase of contracts which were competitively awarded.
Only in this perverse "system within a system" can two losers become a
winner. If companies like Wackenhut can skirt competitive bidding processes,
taxpayers can have little confidence that we are getting value for money -- in
this case up to half a billion dollars Bill Ragen Deputy Director, Building
Services Division, Service Employees International Union Washington.
Chenega
Technology Services Corp.
March 8, 2005 Government Executive
Two members of the House Government Reform Committee have announced an
investigation into contracts awarded to Alaska native corporations without
competition. Rep. Tom Davis, R-Va., committee chairman, and Rep. Henry Waxman,
D-Calif., ranking member, wrote letters to the Government Accountability Office
and several federal agencies, citing press reports of large security-related
contracts worth up to $2.2 billion awarded to companies owned by natives of
Alaska. Contracts awarded to these corporations, which are classified as
disadvantaged, bypass the normal competitive process under a Small Business
Administration section, known as the 8(a) business development program. To
participate, businesses must be a member of an ethnic minority or show they are
disadvantaged in another way, and they must also be a small business. Drew
Crockett, a spokesman for Davis, said the letters focus on Alaska native
corporations because they do not face a money limit on contracts awarded without
competition. Other participants in the 8(a) program can only avoid competition
on contracts valued at $5 million for goods and $3 million for services. The
letters suggest that while Alaska native corporations receive the contracts,
much of the work is done by large subcontractors, which are not eligible for the
8(a) program. Those large companies, the GAO letter states, "should be
capable of obtaining federal contracts through the standard competitive
process."
Cordova
Center
Anchorage, Alaska
Cornell
November 21, 2008 AP
A 21-year-old Anchorage man has been indicted by a federal grand jury on charges
that he escaped from Cornell Corrections of Alaska. Federal prosecutors say
Jedediah Smith remains at-large since his Nov. 1 escape. Smith was first
indicted last month on charges of a felon being in possession of a firearm. He
was assigned to Cornell Corrections Oct. 14 by a federal magistrate judge.
Prosecutors say Smith faces up to five years in prison and a fine of $250,000,
or both, if convicted.
November 10, 2004 KTUU
A shooting in an Airport Heights apartment building
Tuesday night left one man dead, and his brother in custody. It was about 9:30
p.m. when police received a 911 call from a woman. Officers responded to an
Airport Heights apartment complex on Columbine Court near DeBarr Road and found
a man mortally wounded. The individuals turned out to be
brothers. Police say 30-year-old Ralph Landry was shot at least once in the
upper torso. He was rushed to Alaska Regional Hospital, where he died a short
time later during surgery. Police say it was Landry's younger brother who pulled
the trigger. “Through the investigation, we identified Calvin Landry, who's
about 23 years old, as a suspect in the homicide,” said Lt. Kris Miller.
Police actually had been looking for Calvin Landry long before
Tuesday’s shooting. “He has an outstanding warrant for escape, basically
walking away from a halfway house,” Miller said. Last July, Landry walked away
from the Cordova Center, where he was serving out a sentence for drunken driving
and theft. Now it appears he is in more serious trouble.
August 4, 2004
The man who managed an Anchorage halfway house is accused of sexually assaulting
an inmate. Charles Rubin, 41, was arrested last night at his home on
Elmendorf Air Force Base. Rubin was the security manager at Cordova Center until
last May, when, according to police, he lured a 23-year-old woman into an office
and coerced her into having sex. Police say the woman believed she would
be sent back to Hiland Mountain Correctional Center if she resisted Rubin's
advances. The Cornell Company, a private firm that manages the Cordova
Center, says it put Rubin on administrative leave the day after the assault was
reported. It says Rubin was fired a month later. (Ktuu.com)
August 22, 2002
Two 21-year-old men
who had walked away from an Anchorage halfway house were
arrested early Tuesday for an armed
carjacking, Anchorage police said.
James
M. Stark and Nathan M. Klinger were each charged with first-degree
robbery and first-degree auto theft, according to
papers filed in Anchorage District Court.
Both
men were escapees from Anchorage's Cordova House, said police. (Anchorage
Daily News)
January 23, 2001
A jury Monday ordered Allvest Inc.to pay more than $80,000 in actual damages
plus $1 million in punitive damages to five women who were sexually harassed or
assaulted by a guard at an Anchorage halfway house operated by the company. The
jury found Allvest guilty of negligence in the hiring, screening, training and
supervising of J.C. Lewis Jr. "There was no record that Allvest checked any
references," said Les Syren, a lawyer for the women. The state settled its
part of the case earlier this month, agreeing to pay a total of $45,000 to the
five women, Syren said. (AP)
Delta
Junction, Alaska
Cornell
April 17, 2009 News Miner
•Seven years ago, the Legislature approved a plan by Rep. John Harris to give an
interest-free $1 million loan to the city of Delta Junction to pay legal costs
related to a settlement over the establishment of a private prison. The
appropriation was contingent upon the city agreeing to give up $50,000 a year in
municipal assistance for 20 years. "They are getting a better deal than they
would at a bank. However, it is a loan that they have to repay,” Harris was
quoted as saying at the time. The loan would be forgiven entirely, however, and
be turned into a grant if Delta became part of a borough. But Gov. Tony Knowles
vetoed the measure, saying it would set a bad precedent for the state to bail
out a city over a lawsuit. Knowles relied on advice from the attorney general’s
office, which said, “Use of state money to pay a litigation-based settlement, in
which the state was not a party, raises significant legal questions as to
whether the expenditure would be for a public purpose. The retirement of a
preexisting debt confers no benefit on the public.” The idea that the loan would
be forgiven with the formation of a borough was also of dubious legal merit, the
AG said. In 2003, Gov. Frank Murkowski vetoed a $500,000 loan with the same
forgiveness clauses because of similar legal doubts, but he changed his mind the
next year when the Legislature approved a $1 million loan. He said he thought
the area should form a borough and the forgiveness provision encouraged that
step. The plan to create a borough was rejected by voters in 2007, but Delta
Junction has never stopped trying to get the loan forgiven. Harris has made
multiple attempts to redefine the loan as a grant. In early 2008, the city
council met with Harris and Sen. Gene Therriault. The minutes of the meeting
make reference to a comment by City Administrator Mike Tvenge: “He said the
no-interest loan from the state was appreciated because it saved the City from
technical bankruptcy but the city felt the state was part of the problem and
they should eliminate the debt.” The debt was the result of an out-of-court
settlement between the city and Allvest Inc., a private contractor that wanted
to build a prison a decade ago and had signed a deal with the city. During a
2007 council meeting, according to the minutes, member Louis Heinbockel “said he
felt the prison debt was a scam with the Knowles administration, the debt was
assumed by the city because of default from the state of Alaska. The state was
the prime mover on the prison and the city should not be spending $50,000 a year
to cover that debt.” Pete Hallgren, former city administrator, said he agreed
with Heinbockel. During the 2007 session, legislators approved language to
forgive the debt. But Gov. Sarah Palin became the third governor to issue a veto
on the topic after the attorney general’s office again raised constitutional
concerns. “Removing the contingency language of borough formation and converting
the loan to a municipal grant before a borough is formed may raise issues of
public funds being used to pay a preexisting debt and thus run afoul of art. IX,
sec. 6 of the Alaska” Constitution, said Attorney General Talis Colberg. Harris
told the Delta City Council last fall that he planned to speak with Colberg
about the prison loan. On Thursday, the latest attempt by Harris to get the loan
forgiven surfaced in language inserted into a budget bill, Senate Bill 75,
before the House Finance Committee. When asked for an explanation, John Bitney,
an aide to Harris, told the committee: “This is structured such that the loan
can basically be forgiven, if you will. The original language that appropriated
had the contingency that the forgiveness would come only if the community
incorporated as a borough. And as you can see that contingency is being removed
with this language.” There was no discussion about the merits of changing the
loan to a grant. In an e-mail today, Bitney said the language was offered by
Harris at the request of the city.
August 12, 2008 Anchorage Daily News
Bill Weimar, who made his fortune off private halfway houses in Alaska,
pleaded guilty Monday to two federal felonies in U.S. District Court in
Anchorage. He admitted his role in a conspiracy to secretly funnel money to a
political consultant for an unnamed state Senate candidate, knowing the
candidate would back a private prison if he won. Weimar had a long-standing
relationship with the candidate running in the 2004 primary, a charging document
filed Monday said. Weimar held a "contingent interest" in a private prison
project worth $5.5 million, but only if the project was completed, the charges
say. He faces prison time in the plea deal and may have to forfeit "certain
property." Prosecutors estimate a sentence of 10 to 16 months. U.S. District
Judge John Sedwick isn't bound to that. He set sentencing for Oct. 29. Weimar,
who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing
investigation by the FBI and U.S. Department of Justice into political
corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont. At the brief
hearing on Monday, Weimar answered the judge's routine questions. Assistant U.S.
Attorney Joe Bottini outlined the two charges: conspiracy to commit honest
services mail and wire fraud, and illegally manipulating currency transactions
to avoid reporting them to the Treasury Department. Weimar has admitted paying
the consultant a total of $20,000 during the primary in August 2004 to cover
expenses for the candidate, without reporting the payments and without routing
them through the campaign. How do you plead? Sedwick asked. "Guilty," Weimar
answered, to each charge. LAWMAKER NOT NAMED -- For years, Weimar pushed plans
for a private prison in Alaska, but the project was always controversial and no
prison was ever built. A Democratic activist in the 1970s, Weimar later became
close to the Republicans who controlled the Alaska Legislature. Neither the
Senate candidate nor the consultant -- both accused of conspiring with Weimar --
is named in the charging document. Prosecutors declined to expand on it Monday.
But the candidate described in the documents, and in court Monday, appears to be
former state Sen. Jerry Ward. He didn't return phone calls or e-mail messages on
Monday. Ward, a Republican elected from Anchorage in 1996 and the Kenai
Peninsula in 2000, fervently pushed private prison projects as a legislator. The
charging document says the candidate running in 2004 had a long relationship
with Weimar, and held elected office part of that time. Ward and Weimar were
"buddies," according to a statement that former lobbyist Bill Bobrick, who
worked for Weimar, gave to the FBI in September 2006. Bobrick also has pleaded
guilty in the corruption investigation. He declined to comment on Monday. In
1997, a plan for a private prison in South Anchorage with Allvest and Veco Corp.
as partners crumbled under strong public opposition. As that project evaporated,
Ward emerged as the lead architect of a new plan to build private prisons in the
Mat-Su and Seward. "By God, this really solves the problem," Weimar was quoted
as saying at the time. In 2001, Ward signed on as the only Senate sponsor of a
House bill pushing a private prison on the Kenai. The charging document against
Weimar doesn't say whether the candidate won in 2004 and does not call the
person a legislator. Ward lost his seat in 2002 to Tom Wagoner. He was trying to
regain it in 2004, but lost in the Republican primary to Wagoner. SEATTLE
CONSULTANT -- In court Monday, Bottini told the judge the consultant was from
Seattle. Some of Ward's biggest campaign expenses in 2004 were more than $43,000
in fees charged by Madison Communications, an advertising and public relations
firm based in suburban Kirkland, Wash. Numerous calls left for Madison principal
Brett Bader on Monday were not returned. The charges against Weimar and other
court documents quote details of a number of telephone conversations he had with
the consultant and the candidate from Aug. 17 to Aug. 23, 2004. In a telephone
conversation on Aug. 17, 2004, the consultant told Weimar that the campaign was
having money trouble, court documents say. "I'm worried we're reaching the limit
now. I don't know where we find 10 grand unless (Candidate A) can get more in,"
the consultant said "There's no legal way to do that. At least not on that
scale," Weimar responded. Later that day, Weimar arranged to cover the next
advertising mailer for the candidate, and told the candidate so, the document
says. On Aug. 20, 2004, Weimar told the candidate of an unpaid invoice of
$20,000 with the consultant. The candidate's campaign funds were depleted, the
charges say. The candidate said he had only $300 to $400 left in his account. On
Aug. 23, 2004, Weimar made arrangements with the consultant to pay off the debt,
the charges say. He then called the candidate and told him "he would not be
receiving any further bills from Consultant A," the charging document says.
Weimar sent the consulting company a $3,000 check on Aug. 23, 2004, then sent
$8,500 in cash that same day by express mail, and another $8,500 cash the day
after, the charges say. "WE'VE MOVED ON" -- The charges also do not name the
private prison company, but Cornell Corrections Inc. tried to build a prison in
various Alaska communities, including Delta Junction, Kenai and Whittier. The
charging document describes the unnamed company's Alaska interests as halfway
houses, a planned juvenile treatment center, and a private prison project, and
that matches Cornell's interests. In 1998, in the midst of planning for a
private prison in Delta Junction, Weimar sold five Alaska halfway houses to
Cornell for $21 million. He also formed a partnership with Cornell to pursue the
Delta prison and subsequent deals for a private facility. One goal of the
conspiracy was to get the private prison company to give campaign contributions
to the candidate to help win election, according to the charges. A spokesman for
Cornell said the company was unaware of the charges but supports the
prosecution. The executives now in charge of Cornell weren't there at the time
of the events that involved Weimar, spokesman Charles Seigel said Monday.
Company records don't show any evidence of wrongdoing, he added. "We've moved on
and we are very different and have it behind us," Seigel said. Cornell also has
not pursued a private prison in Alaska for years and is no longer interested in
that, he said. "We're glad this investigation is going on but whatever was going
on or may have been going on in the past, that is not the Cornell that exists
now, both in the policy on the private prison as we've talked about and in
general about the way we do business." By 2004, Veco was no longer involved in
the prison project, Frank Prewitt, a former state corrections commissioner,
Cornell consultant and FBI informant, has said. ANDERSON INVOLVED -- The failed
private prison effort was also central in the government's case against former
state Rep. Tom Anderson, R-Anchorage, now in prison. At Anderson's corruption
trial last summer, Prewitt was a key witness who testified at length about his
undercover work to collect evidence against Anderson, and also about
questionable acts in his own past. From the witness stand, Prewitt said that in
1994 -- when he was corrections commissioner and Weimar owned Allvest -- he
accepted $30,000 from Weimar. Prewitt testified that he considered the money a
loan, which he repaid the next year, after he left his state post, by working
four months for Allvest for free. Weimar helped start Allvest in 1985, then
bought out his partners and turned it into a multimillion dollar corporation
with operations in Alaska and Washington state. Its government contracts were
worth an estimated $10 million a year. Allvest also operated a lab that did
contract urinalysis work, and used to run the city's Animal Control Center and
the Community Service Patrol. In 2002, Allvest was forced into bankruptcy
because of unpaid judgments in civil suits against the company. The bankruptcy
case eventually was settled.
June 30, 2007 Daily News-Miner
When the red ink dried on Gov. Sarah Palin’s line-item budget vetoes, the
city of Delta Junction proved one of the big losers. “We came out with zero,”
said City Administrator Pete Hallgren. Palin cut $15,000 slated for a motocross
course, $45,000 for a youth activities facility, and $500,000 for street paving
and lighting. She also blocked a legislative decision to relieve a $1 million
debt stemming from a city settlement years ago with a company brought on to
convert unused military buildings at Fort Greely to a private prison. The
governor explained her vetoes by saying the first three projects were not state
responsibilities and the fourth raised legal concerns.
June 1, 2007 Daily News-Miner
State lawmakers have approved funding in the state’s capital budget to pay
off a debt of nearly $1 million owed by the city of Delta Junction. The debt
comes from the city’s settlement years ago with a company brought on to convert
unused military buildings at Fort Greely to a private prison. When the plan fell
through, the company sued for breach of contract, City Administrator Pete
Hallgren said. The city settled before the case went to trial. Delta paid off
$100,000 of the $1.1 million settlement, then asked the state for a loan to pay
the rest, he said. The state provided the loan, and the city has been paying it
back at a rate of $50,000 a year. “This year we asked if the state could forgive
the rest of the loan,” he said. Hallgren said he appreciated the loan
forgiveness, which he said would make it easier for the city to provide public
services.
July 26, 2004
The Interior city of Delta Junction will receive a $1.2 million no-interest loan
from the state to pay off a lawsuit settlement, under a bill signed into law by
Gov. Frank Murkowski. The governor's action last week comes a year after
he vetoed a similar proposal and two years after then-Gov. Tony Knowles did the
same thing. The loan will allow the city to finish paying its
breach-of-contract settlement with Allvest Inc. and Delta Corrections Corp.
stemming from a failed effort to build a private prison at Fort Greely. In
1998, the city and Allvest reached a contract to build a private prison on Fort
Greely, but the noncompetitively bid deal led to a public outcry. The city
then rescinded the contract in 1999, leading Allvest to file a
breach-of-contract lawsuit that was ended by settlement. Delta Junction has paid
$100,000 of the settlement and owes about $1.16 million. But city
officials have refused to keep making payments, arguing that the settlement deal
was contingent on them getting money from the state. That led to a second
lawsuit, which was recently decided in Allvest's favor. (AP)
November 8, 2002
An attorney in a
lawsuit against Allvest Inc., which attempted to open a
private prison near Delta Junction three years ago, has
filed a petition in U.S. Bankruptcy Court to force Allvest into involuntary
bankruptcy.
The
bankruptcy, if it occurs, would not mean the city of Delta Junction can
avoid paying the $1 million it owes Allvest from an
out-of-court settlement stemming from the failed prison project at Fort
Greely. The city paid $100,000 in the $1.1 million
settlement but has not paid the $1 million balance due last July 1.
Allvest,
meanwhile, also faces two lawsuits that allege its board of
directors defrauded plaintiffs in two 2001 court judgments
that held the private corporation responsible for wrongful actions. The
bankruptcy petition was filed by the attorney in one of
those cases.
Attorneys
Tim Dooley and Brett von Gemmingen, both of Anchorage, allege that
Allvest owner William C. Weimar sold Allvest
assets valued at more than $17 million and distributed most of those funds
to himself, with the transfer approved by the Allvest
board of directors: Weimar, Frank Prewitt and Robert Cronen.
"These
transfers were made with the intent to evade just obligations,"
Dooley alleges in his lawsuit, filed in August.
The
original lawsuits involved two separate cases.
In
April 2001, five women won a total settlement of about $1.25 million in
Anchorage District Court for sexual abuse at
Cordova House, an Allvest facility. The money the city of Delta Junction
owes Delta Corrections Group is to be paid into the
registry of the court in that case.
The
second suit involved the estate of a man who died after being picked up
as a drunk by Community Service Patrol, another
Allvest company. A jury in June 2001 found Allvest 60 percent at fault in
the man's death and awarded his estate more than $3
million.
In
Delta Junction, city officials had pinned their hopes on a bill by Rep.
John Harris, R-Valdez, to loan Delta Junction $1 million.
But
Gov. Tony Knowles vetoed the bill, saying it would have set a dangerous
precedent and would not have benefited Alaska
as a whole. (News-Miner)
June
3, 2002
In a lean
budget year, lawmakers still managed to find $1 million to pay
the
costs of an out-of-court settlement for the city of Delta Junction.
The money will allow the city to end a dispute with Allvest Inc., and
Delta
Corrections Corp. to resolve a $1.1 million breach of contract dispute.
The dispute stemmed from an abortive attempt to locate a private prison
at
Fort Greely in 1998. The city previously paid $100,000 to the company.
"As
far as the city is concerned, this will settle our obligation with
the
prison people and we are moving on from here," said Pete Hallgren,
Delta
Junction city administrator.
Under
terms of the deal, Delta Junction would receive a 20-year,
no-interest
loan from the state. The city would forfeit $50,000 from municipal
assistance
revenues it receives annually from the state.
The
capital budget now goes to Gov. Tony Knowles for consideration.
Knowles
spokesman Bob King said the governor will consider the merits of the
proposal
before acting.
"Here
you have a million dollar item that appeared with no discussion. We
don't know what the justification is," King said.
Allvest, which operated in Delta Junction as Delta Corrections Group,
successfully pitched the prison project to the city in 1998. Under the
plan,
Delta Corrections Corp. would have operated a prison built by the city on
lands
made available when Fort Greely realigned.
But in
early 1999, after elections had changed the complexion of the
Delta
Junction City Council, the city rescinded the contract that would have
made
Delta Corrections the recipient of the prison without competitive bids.
Allvest
sued, claiming breach of contract.
The
settlement agreement called for the city and the company to attempt
to
get $3 million from the federal government. The city was in line to
receive
funds in conjunction with the National Missile Defense system.
But
the money could not be used for the settlement, so the agreement
allowed
the city and company to agree to a $1 million settlement, Hallgren said.
Allvest
was the largest provider of halfway house beds in Alaska. The
company
is owned by Bill Weimer, who could not be reached for comment.
Weimer's
company will not immediately see the money. The company has at
least
one injunction against it for a lawsuit brought by five women who were
sexually
assaulted at the Cordova House in Anchorage.
The
women won a $1.2 million judgment against the company in Superior
Court
in Anchorage and that judgment has not been paid, said attorney Brent Von
Gemmingen.
Von Gemmingen said the company also owes about $3 million from another lawsuit,
casting doubt on whether the five women he represents will receive
payment. (The Associated Press and Local Wire)
Fort
Greely
Delta Junction, Alaska
Cornell
February 28, 2002
The cash-strapped
city of Delta Junction
has a $1 million debt due soon for its settlement of a
private prison lawsuit and is lobbying the state to
foot
the bill.
"The
city does not have the funds necessary to meet
this obligation," Delta Junction Mayor Roy Gilbertson
said in a letter sent to state legislators earlier this
session.
But
the request faces much skepticism in a
Legislature dealing with a projected billion-dollar
state
budget hole.
The
city's debt comes due on June 30. When asked
how Delta Junction would pay without help from the
state, City Economic Development Director Pete
Hallgren responded that discussions are ongoing.
"Our
attorneys are talking to the people we owe the
money to," Hallgren said.
Those
people are Allvest/Cornell Inc., the company
that sought to build a private prison at Fort Greely.
In
1999 the City Council had signed a contract to allow
Allvest to build the private prison at the shuttered
base just outside of town.
But
the prison proposal bitterly divided the small
highway community, and the City Council backed off
from the Allvest agreement amid controversy over the
lack of a competitive bid process.
Allvest
soon responded with a breach-of-contract
lawsuit, and the matter was settled out of court for
$1.1 million. The city has been able to pay just
$100,000.
Valdez
Republican Rep. John Harris, who represents
Delta Junction, said he feels an obligation to try to
secure the $1 million in state funds for Delta Junction
because he encouraged the city to settle the lawsuit. The city is
expecting to receive a large amount of federal funds from the Missile Defense
Agency. But that money is not allowed to be used for paying off prison
lawsuit settlements. (Fairbanks Daily News-Miner)
July 9, 2001
Voters in Delta Junction will go the polls Tuesday to decide whether two city
council members should be recalled. Organizers of the recall campaign
allege that Roy Gilbertson and Susan Kemp bungled the city's efforts to
construct a private prison and misappropriated Office of Economics Adjustment
funds to pay legal bills. The two remind voters that the prison project
was eventually found to be financially unfeasible for the city, and had the city
followed through on the original contract, it would still have failed.
"So much agony over the prison would have been avoided if an independent
financial feasibility study had been earlier funded," Gilbertson
wrote. (AP)
April 21, 2001
Delta Junction and a private prison company may have "settled" their
lawsuit by agreeing to ask the federal government to pay them $3 million, but
U.S. Sen. Ted Stevens wants to see more information. The city, acting as
the local authority to decide how the closed base (Fort Greely) should be used,
entered the contract with Allvest early in 1999. After council elections
that year, the city council voted to rescind the agreement. Allvest
sued. Under the settlement agreement, the two parties agreed to ask the
federal government to reimburse them $3 million for the planning work they did
on the project. Allvest is to take the lead in the request, according to
the settlement. About $2.5 million would go to the company and $500,000 to
the city. (AP)
April 18, 2001
The Delta Junction city council has agreed to end its foray into the prison
business and settle a lawsuit filed by Allvest, which had wanted to build a
private prison on Fort Greely. The settlement could cost Delta Junction as
much as $1.1 million. However, it may not cost either party a cent.
Both the city and Allvest hope the federal government will reimburse them a
total of $3 million for expenses incurred in planning the prison. The
settlement marks the officials demise of the prison plan, which was weakened
after studies questioned its profitability and the federal government decided
Fort Greely would make a prime missile defense system site. "Under
the settlement the city is out of the Delta prison and so is Allvest," said
Pete Hallgren, director of the city's Department of Economic Development.
(AP)
Hudson Correctional
Facility, Hudson, Colorado
GEO Group (bought Cornell Companies)
December 17, 2010 Fort Morgan Times
District Attorney Robert Watson has filed a request in Morgan County
District Court to revoke a personal recognizance bond for Jessica Rehn
of Fort Morgan. Rehn is accused of smuggling heroin into the Hudson
Correctional Facility and was arrested on a warrant on charges of
distribution and possession of a schedule 1 controlled substance and
introducing contraband into a correctional facility. Wesley Shandy, an
inmate in the facility, died of a drug overdose; cellmate James Stanley
is accused of providing Shandy with heroin and remains in the facility.
Both were serving sentences in the Hudson facility, a private prison, on
offenses in Alaska. Watson said Rehn was actively engaged in a
multi-state scheme, using the mail, to distribute drugs by personally
introducing it into the Hudson prison. The state legislature has
required a $50,000 bond for people charged with distributing schedule II
controlled substances unless there is showing of good cause to set a
different amount, Watson said in his motion. "As a direct result of the
defendant's criminal conduct, an inmate died," the D.A. said. Rehn
received the heroin by mail August 14 and smuggled two balloons of it
into the Hudson facility August 15 in her bra, slipping it to Stanley,
her boyfriend, during a kiss, Corey Fox of the Colorado Department of
Corrections said in an affidavit. After an August 17 interview with law
enforcement, Morgan County Sheriff's Office Investigator Jessica
Schlagel obtained permission from Rehn to search her car, and officers
found three balloons of suspected heroin and a mail envelope, Fox said.
The substance in the bags tested positive for heroin, Fox noted. Fox
said that Rehn told law enforcement officials Stanley had asked her to
bring drugs into the facility.
August 18, 2010 Greeley Tribune
An autopsy Tuesday failed to pinpoint the cause of death of an Alaskan
inmate at the Hudson Correctional Facility in southern Weld County.
Wesley Shandy, 44, was found dead in his cell Sunday morning at the
prison in Hudson, and the Weld County Coroner's Office performed the
autopsy. Chief Coroner's Investigator Mark Ward said there was no cause
of death shown in the autopsy, so they will have to wait for the
toxicology report. Toxicology tests will indicate if drugs were present
in the body and if they contributed to the death. It will take up to two
weeks to get the toxicology results in this case, Ward said. No other
information has been released. State agencies from Colorado and Alaska
are looking into the case. Investigators have not said if there were
signs of an assault or a struggle.
August 16, 2010 Denver Post
Authorities from a number of agencies are investigating the death of an
inmate from Alaska who was found unresponsive in his cell at Hudson
Correctional Facility in Weld County Sunday morning. Wesley Shandy, 44,
of Ninilchik was serving a 19-year sentence for manslaughter in the
death of his fiancee, felony drunken driving and witness tampering.
Hudson Correctional houses a number of Alaskan prisoners at the
1,250-bed medium security private prison operated by GEO Group of Boca
Raton, Fla. The company released a statement this afternoon. "The Hudson
Correctional Facility is cooperating fully with the Alaska Department of
Corrections, the Colorado Department of Corrections and the Colorado
Bureau of Investigation," according to the statement. A company
spokesman citing the investigation said by e-mail he could not comment
further.
April 30, 2010 The News Tribune
The security breach this month at a private Colorado prison holding
hundreds of Alaskans was caused by human error, according to Cornell
Companies, the prison owner and operator. A correctional officer in a
central area electronically unlocked the doors to the cells of 41
inmates around 1:20 a.m. on April 14, allowing the prisoners into the
pod corridors, Charles Seigel, Cornell spokesman, said Thursday. The
officer at Hudson Correctional Facility has resigned, Seigel said. The
company wouldn't release the officer's name. Cornell hired experts who
determined the problem was not mechanical, Seigel said. Seigel said the
officer was properly trained in security procedures and it's not clear
why he unlocked the cell doors. The pod holds inmates who were in
segregation, typically for behavioral problems or their own protection.
The lapse led to an uprising involving eight to 12 inmates, Seigel said.
When the cell doors unlocked, most of the inmates stepped out, looked
around and returned to their cells, according to Cornell. At least one
tried to assist authorities by describing on the intercom what was
happening. Two correctional officers in the pod barricaded themselves in
a staff office during the disturbance, which lasted about six hours.
Some of the inmates used a filing cabinet like a battering ram to try to
break into the office, Seigel said. The door was dented but they weren't
able to open it. In February, one inmate in the segregation unit punched
the assistant warden and broke his nose, Seigel said. That inmate now
faces new criminal charges, Seigel said. He said Cornell doesn't release
names of inmates and Colorado authorities weren't able to provide
details on Friday. Seigel said he didn't know how long the officer who
made the mistake had worked for Cornell. The prison only opened in
November, and most of the officers were new. Starting pay is $12 an hour
and would be higher for experienced officers, according to Cornell. The
state of Alaska contracts with Cornell to house Alaska inmates at
Hudson. The prison houses only Alaskans. At the time of the disturbance,
877 inmates were at the facility. Seigel said he thought at least a
couple of the instigators in the disturbance had been moved to a
Colorado institution. Corrections officials from Colorado and Alaska
also have been investigating what happened. The Colorado department's
private prison monitoring unit and inspector general's office are
involved, said Monica Crocker, spokeswoman for the Colorado Department
of Corrections. As a result of the breach and inmate uprising, Cornell
also is looking into making improvements in the security system, Seigel
said.
April 14, 2010 Denver Post
A disturbance at the privately owned Hudson Correctional Facility 25 miles
northeast of Denver International Airport was sparked when cell doors in a unit
housing 41 inmates from Alaska inexplicably opened early this morning. Charles
Seigel, spokesman for the Cornell Companies, which operates the prison, said his
company is investigating whether the doors opened at about 1:20 a.m. in the
prison's segregation unit because of an electronic malfunction or human error.
The segregation unit houses inmates who have disciplinary issues and have caused
problems, as well as inmates in protective custody, Seigel said. When inmates
realized the cell doors were open, many left their cells but most returned a
short time later. However, as many as a dozen began destroying sprinkler heads
and computers. They also tried to break out of the building by breaking windows.
Seigel said the inmates who vandalized the unit were housed there because of
disciplinary problems. The disturbance caused widespread water damage. The unit
was littered with water, paper and smashed computers. Seigel said that two
guards who were in the unit fled to a captain's office where they locked and
barricaded the door. He said some of the inmates outside the office tried to
protect the two guards in the captain's office. During the disturbance, which
lasted until about 7:30 a.m., the two guards were in constant communications
with prison officials and were able to watch what was going through windows,
Seigel said. Seigel said prison officials decided to let things cool down before
acting. At 7:30 a.m., the prison sent in its emergency response team. The team
used tear gas to subdue the inmates. No corrections officers were injured. But
Seigel said some of the inmates had bruises and abrasions. He said the
instigator of the disturbance suffered the worst injury, a cut hand. Seigel said
rioters will be charged under Colorado law. Seigel said the entire prison, which
houses 877 inmates from Alaska, is on lockdown, with all inmates remaining in
their cells. He said the lockdown will remain through at least Thursday. Richard
Schmitz, spokesman for the Alaska Department of Corrections, said the Hudson
Correctional Facility opened in November 2009. Only Alaska inmates are housed
there.
April 14, 2010 AP
A small group of Alaska inmates took over a section of the privately owned
Hudson Correctional Facility during a prison disturbance overnight. No injuries
were reported in the disturbance that happened late Tuesday or early Wednesday
at the prison owned by Cornell Companies Inc. Company spokesman Charles Seigel
says the disturbance involving about eight inmates has been brought under
control. The group damaged sprinklers, setting off a fire alarm. Additional
details were not immediately available. Cornell opened the 1,250-bed medium
security prison in November and houses about 1,000 inmates from Alaska. The
Colorado Department of Corrections, which oversees private prisons in the state,
has sent six investigators to the prison Wednesday. A telephone call seeking
comment from Alaska Corrections Commissioner Joe Schmidt Wednesday was not
immediately returned.
Kenai
Peninsula
Kenai Peninsula Borough, Alaska
Cornell
August 12, 2008 Anchorage Daily News
Bill Weimar, who made his fortune off private halfway houses in Alaska,
pleaded guilty Monday to two federal felonies in U.S. District Court in
Anchorage. He admitted his role in a conspiracy to secretly funnel money to a
political consultant for an unnamed state Senate candidate, knowing the
candidate would back a private prison if he won. Weimar had a long-standing
relationship with the candidate running in the 2004 primary, a charging document
filed Monday said. Weimar held a "contingent interest" in a private prison
project worth $5.5 million, but only if the project was completed, the charges
say. He faces prison time in the plea deal and may have to forfeit "certain
property." Prosecutors estimate a sentence of 10 to 16 months. U.S. District
Judge John Sedwick isn't bound to that. He set sentencing for Oct. 29. Weimar,
who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing
investigation by the FBI and U.S. Department of Justice into political
corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont. At the brief
hearing on Monday, Weimar answered the judge's routine questions. Assistant U.S.
Attorney Joe Bottini outlined the two charges: conspiracy to commit honest
services mail and wire fraud, and illegally manipulating currency transactions
to avoid reporting them to the Treasury Department. Weimar has admitted paying
the consultant a total of $20,000 during the primary in August 2004 to cover
expenses for the candidate, without reporting the payments and without routing
them through the campaign. How do you plead? Sedwick asked. "Guilty," Weimar
answered, to each charge. LAWMAKER NOT NAMED -- For years, Weimar pushed plans
for a private prison in Alaska, but the project was always controversial and no
prison was ever built. A Democratic activist in the 1970s, Weimar later became
close to the Republicans who controlled the Alaska Legislature. Neither the
Senate candidate nor the consultant -- both accused of conspiring with Weimar --
is named in the charging document. Prosecutors declined to expand on it Monday.
But the candidate described in the documents, and in court Monday, appears to be
former state Sen. Jerry Ward. He didn't return phone calls or e-mail messages on
Monday. Ward, a Republican elected from Anchorage in 1996 and the Kenai
Peninsula in 2000, fervently pushed private prison projects as a legislator. The
charging document says the candidate running in 2004 had a long relationship
with Weimar, and held elected office part of that time. Ward and Weimar were
"buddies," according to a statement that former lobbyist Bill Bobrick, who
worked for Weimar, gave to the FBI in September 2006. Bobrick also has pleaded
guilty in the corruption investigation. He declined to comment on Monday. In
1997, a plan for a private prison in South Anchorage with Allvest and Veco Corp.
as partners crumbled under strong public opposition. As that project evaporated,
Ward emerged as the lead architect of a new plan to build private prisons in the
Mat-Su and Seward. "By God, this really solves the problem," Weimar was quoted
as saying at the time. In 2001, Ward signed on as the only Senate sponsor of a
House bill pushing a private prison on the Kenai. The charging document against
Weimar doesn't say whether the candidate won in 2004 and does not call the
person a legislator. Ward lost his seat in 2002 to Tom Wagoner. He was trying to
regain it in 2004, but lost in the Republican primary to Wagoner. SEATTLE
CONSULTANT -- In court Monday, Bottini told the judge the consultant was from
Seattle. Some of Ward's biggest campaign expenses in 2004 were more than $43,000
in fees charged by Madison Communications, an advertising and public relations
firm based in suburban Kirkland, Wash. Numerous calls left for Madison principal
Brett Bader on Monday were not returned. The charges against Weimar and other
court documents quote details of a number of telephone conversations he had with
the consultant and the candidate from Aug. 17 to Aug. 23, 2004. In a telephone
conversation on Aug. 17, 2004, the consultant told Weimar that the campaign was
having money trouble, court documents say. "I'm worried we're reaching the limit
now. I don't know where we find 10 grand unless (Candidate A) can get more in,"
the consultant said "There's no legal way to do that. At least not on that
scale," Weimar responded. Later that day, Weimar arranged to cover the next
advertising mailer for the candidate, and told the candidate so, the document
says. On Aug. 20, 2004, Weimar told the candidate of an unpaid invoice of
$20,000 with the consultant. The candidate's campaign funds were depleted, the
charges say. The candidate said he had only $300 to $400 left in his account. On
Aug. 23, 2004, Weimar made arrangements with the consultant to pay off the debt,
the charges say. He then called the candidate and told him "he would not be
receiving any further bills from Consultant A," the charging document says.
Weimar sent the consulting company a $3,000 check on Aug. 23, 2004, then sent
$8,500 in cash that same day by express mail, and another $8,500 cash the day
after, the charges say. "WE'VE MOVED ON" -- The charges also do not name the
private prison company, but Cornell Corrections Inc. tried to build a prison in
various Alaska communities, including Delta Junction, Kenai and Whittier. The
charging document describes the unnamed company's Alaska interests as halfway
houses, a planned juvenile treatment center, and a private prison project, and
that matches Cornell's interests. In 1998, in the midst of planning for a
private prison in Delta Junction, Weimar sold five Alaska halfway houses to
Cornell for $21 million. He also formed a partnership with Cornell to pursue the
Delta prison and subsequent deals for a private facility. One goal of the
conspiracy was to get the private prison company to give campaign contributions
to the candidate to help win election, according to the charges. A spokesman for
Cornell said the company was unaware of the charges but supports the
prosecution. The executives now in charge of Cornell weren't there at the time
of the events that involved Weimar, spokesman Charles Seigel said Monday.
Company records don't show any evidence of wrongdoing, he added. "We've moved on
and we are very different and have it behind us," Seigel said. Cornell also has
not pursued a private prison in Alaska for years and is no longer interested in
that, he said. "We're glad this investigation is going on but whatever was going
on or may have been going on in the past, that is not the Cornell that exists
now, both in the policy on the private prison as we've talked about and in
general about the way we do business." By 2004, Veco was no longer involved in
the prison project, Frank Prewitt, a former state corrections commissioner,
Cornell consultant and FBI informant, has said. ANDERSON INVOLVED -- The failed
private prison effort was also central in the government's case against former
state Rep. Tom Anderson, R-Anchorage, now in prison. At Anderson's corruption
trial last summer, Prewitt was a key witness who testified at length about his
undercover work to collect evidence against Anderson, and also about
questionable acts in his own past. From the witness stand, Prewitt said that in
1994 -- when he was corrections commissioner and Weimar owned Allvest -- he
accepted $30,000 from Weimar. Prewitt testified that he considered the money a
loan, which he repaid the next year, after he left his state post, by working
four months for Allvest for free. Weimar helped start Allvest in 1985, then
bought out his partners and turned it into a multimillion dollar corporation
with operations in Alaska and Washington state. Its government contracts were
worth an estimated $10 million a year. Allvest also operated a lab that did
contract urinalysis work, and used to run the city's Animal Control Center and
the Community Service Patrol. In 2002, Allvest was forced into bankruptcy
because of unpaid judgments in civil suits against the company. The bankruptcy
case eventually was settled.
October 14, 2001
An expensive,
bitterly fought campaign over building a privately operated prison on the Kenai
Peninsula
wound up with a $305,000 price tag. Most of the money was poured into
advertising.
Voters said no by a nearly 3-1 ratio. The proposition lost 9,373 to 3,429.
Most
campaign funding, $162,000, was raised by a group called Concerned Citizens for
Responsible Economic
Development, representing Cornell and its likely business partners, KNA, Neeser
Construction Inc. and Veco Inc.
About
$50,000 of that was raised and spent in the last few days of the campaign.
Two anti-prison groups raised the rest of the money.
Peninsula Citizens Against Private Prisons, a grass-roots group that triggered
the ballot proposition, reported a
$42,000 infusion in the last few days of the campaign, raising its total income
to nearly $57,000.
The Kenai prison project was the third to fail to win local support since the
Legislature started pushing private
prisons in 1996.
Despite that track record, Ketchikan is considering pursuing the private prison
project. The Ketchikan Gateway
Borough Assembly is scheduled to discuss a possible feasibility study at its
regular Monday meeting, said borough
Mayor Jack Shay. (Anchorage Daily)
September 21, 2001
The Kenai City Council voted 4-2 Wednesday to approve a resolution that gives
qualified support for a huge private prison being proposed for the northern
outskirts of the city. If the 800- to 1,000-bed facility is built, it
would likely have to tap into the city of Kenai's water and sewer system --
triggering upgrades that could send the city seeking up to $12.8 million from
the state. (Anchorage Daily News)
September 9, 2001
Dollars contributed to the cause may vary by the thousands, but equal amounts of
passion have both sides of the prison issue running toe to toe. In
October, Kenai Peninsula Borough voters will decide whether the borough should
continue researching the possibility of constructing the state's first private
prison, an 800- to 1,000-bed medium-security facility. A team led by Cornell
Companies Inc. partnered with the borough earlier this year to plan and promote
the project. According to campaign summaries submitted to the Alaska
Public Offices Commission, the pro-prison group Concerned Citizens For
Responsible Economic Development -- CCFRED -- raised $39,000 in donations,
compared with $2,000 raised by Peninsula Citizens Against Private Prisons.
(Peninsula Clarion)
May 30, 2001
Despite his earlier criticism, Gov. Tony Knowles signed a bill into law on
Tuesday that brings Alaska closer to construction of its first private prison --
an 800-bed facility proposed on Native-owned land in Kenai. House Bill
149, sponsored by Rep. Mike Chenault, R-Kenai, authorizes the Department of
Corrections to enter into a lease agreement with the Kenai Peninsula Borough to
work with a private company that would promote, design, build and operate a
medium-security prison. Companies that run private prisons, like Cornell,
have become big factors in election campaigns in Alaska in recent years,
according to the Helena, Mont.-based National Institute on Money in State
Politics, a nonprofit, nonpartisan watchdog group. During the 1998
election season, Alaska was second only to California in the amount of money
spent on candidates by private prison companies and their employees.
Leading the pack was Corrections Corp. of America, which spent $353, 106 on
candidates. Second was Cornell, which spent $110,575, said Ed Bender of
the Montana organization and author of a study on private prison campaign
spending. An analysis of contribution records found that Knowles received
more money from people associated with Cornell and Allvest than any other
candidate in the country during the 1998 election, Bender said. Cornell
owns Allvest. Knowles received $6,375 from folks associated with Cornell
and Allvest, the report said. California Sen. Betty Karnette got $6,000
from the companies and Lt. Gov. Fran Ulmer received $5,500. Former Rep.
Ramona Barnes, R-Anchorage, was fourth on the list with contributions of
$5,000. (Anchorage Daily News)
May 2, 2001
State senators rejected an amendment Tuesday that would have required a proposed
Kenai Peninsula Borough prison to be put out to competitive bid, but removed a
provision for escalation of payments for prisoners tied to a cost-of-living
index. House Bill 149 authorizes the Department of Corrections to enter
into a lease agreement with the Kenai Peninsula Borough for an 800-bed,
medium-security private prison on the Kenai Peninsula. The borough has
entered into a partnership with Corrections Group North to build and operate the
prison. Corrections Group North includes Cornell Corrections Group, the
Kenai Natives Association, Livingston Slone Inc., Neeser/VECO as well as
lobbyists Joe Hayes and Kent Dawson. Private prison supporters say it is
important to bring Alaska prisoners home so they can be closer to their families
and improve their chances for rehabilitation. Sen. John Torgerson, R-Kasilof,
objected to the lack of competitive bidding on the project. "From my
understanding, there has been no discussion of what the actual cost is, "
he said. An amendment by Ellis taking out the provision boosting payments
to the prison based on a cost-of-living index was approved 12-8.
(Anchorage Daily News)
May 1, 2001
The Knowles administration has raised several last-minute objections to a bill
to allow a private prison in Kenai, saying the measure would tie the
administration's hands when it tries to negotiate a cost-effective deal.
In a letter sent Saturday to two key Senate leaders, Corrections Commissioner
Margaret Pugh complained the latest bill would force the state to pay operating
costs for the entire prison for five years, no matter how many of its 800 beds
are in use. Pugh said she wants flexibility to negotiate incentives like
those in Arizona, where the state's excess inmates are housed in a private
prison. The prison bill has passed in the House and is expected to go
before the Senate today. It would authorize the Kenai Peninsula Borough to
develop Alaska's first private prison with a pre-selected partner, Cornell
Corrections. Margaret Pugh said she is concerned that the prison bill does
not address the state's need for regional jail space or provide for adequate
competitive bidding. "It does not appear to require any cost factors
or comparisons for the design, construction or operation of a private
prison," she wrote. (Anchorage Daily News)
April 12, 2001
Some Republicans lawmakers from Kenai Peninsula have blasted a plan, supported
by a bill in the Legislature, that would allow a joint venture to build and
operate the state's first private prison near Kenai. In a letter to the
Kenai Peninsula Borough, Sen. John Torgerson of Kasilof, Rep. Drew Scalzi of
Homer and Rep. Ken Lancaster of Soldotna, criticized the entire process,
"from the plans and design, to the enabling legislation, to the
construction and operation of the development." The borough has not
determined what the project will cost, has not selected a site, and made it a
"sole source contract" by handing it to one operator without
competitive bids, the three Republicans said in a letter April 6. Instead
of putting the contract out to bid, asked companies to submit responses to a
"Request for Qualifications." It awarded points depending on how
the companies fared. But the prison group with the highest point total was
not selected. Awarding a construction bid without identifying the cost
"sounds like something the Pentagon would do," the legislators"
letter said. A bill sponsored by Rep. Mike Chenault of Kenai, which passed
out of the House Finance Committee on Tuesday, authorizes the Department of
Corrections to work with the Kenai borough on the prison project. The bill
states that "the Legislature expects" the cost to be 18 percent to 20
percent less than the average per diem rate for all state prison facilities and
should be about $89 per day per prisoner. But the costs are "only
intent language," the lawmakers wrote, "and we do not have numbers
from you to indicate that this payment will in fact defray the anticipated
costs." Since the borough isn't providing information on the
facility's bonding costs or potential operating costs, 'it's hard to determine
feasibility," they said. The City of Soldotna, meanwhile, has come
out against the plan. On April 4, the city council passed a resolution
stating that it supports the building of a new prison nearby, but is against the
plan to have it built and run by a private company. "The City Council
of Soldotna deems it in the best interest of the State that a prison should be
publicly run, and decisions not be based on insuring a return to
investors." (Anchorage Daily News)
MacKay
Annex
Anchorage
Cornell
November 27, 2004 Anchorage Daily News
A state commissioner on Friday announced a moratorium on
new medical services that require a state certificate of need. The moratorium
may delay two proposed residential psychiatric treatment centers in Anchorage
intended to serve troubled youths. Joel Gilbertson, commissioner of the
Department of Health and Social Services, said the moratorium was needed because
the state is in the midst of setting standards and approving regulations for the
certificate of need program. News of the moratorium
disappointed Cornell Cos., one of two corporations that have applied for
permission to build 60-bed treatment centers in Anchorage. Cornell is hoping to
turn the Mac-Kay Building annex in downtown Anchorage into a boys treatment
center. North Star Behavioral Health System wants to build a new center next to
its psychiatric hospital on DeBarr Road. "It
is definitely a setback for us," said Tim Marshall, western region director
of business development for Cornell. The company is paying around $30,000 a
month to lease the MacKay annex, he said. The delay is significant, he said.
October 7, 2004 KTUU
The
future of the MacKay Annex on Fourth Avenue has many nearby business owners
worried about their own future. Confusion about the
MacKay Annex started Tuesday when KTUU-TV talked with Paul Douchette, the public
relations director for Cornell Companies, the company that may lease the annex.
It said the residential psychiatric treatment center would house sex offenders,
among other boys with emotional or behavioral issues. But
during a follow-up the next day, Douchette changed his story. “I think I may
have said that to you yesterday, and when I called and checked this morning I
realized that I did misspeak,” he said. However, the residential
psychiatric treatment coordinator for the state Division of Behavioral Health
says, traditionally, residential psychiatric treatment centers do treat kids
with sexual issues. “Some of the kids who are in these residential facilities
may have some sexual acting-out behaviors,” said Pam Miller of the division.
“And those behaviors can be anything from exposure, to assault of other
children or other persons.” She
went on to say that some of the kids at the centers may be adjudicated, but not
all. “As a corporation, actually, we’ve not even made a yes or no decision
on whether we’re going to actually go through with the project,” Douchette
said.
Parkview
Community Center
Anchorage, Alaska
Cornell
May 22, 2006 Anchorage Daily News
One of Anchorage's four halfway houses is scheduled to shut down by July 1,
a loss of about 25 percent of the beds available here for housing low-risk
inmates. The Legislature directed the Department of Corrections to close
Parkview Community Center when it eliminated roughly $2.5 million from the
department's halfway house funding. Parkview is managed by Cornell Companies of
Alaska Inc. Its contract with the department for that facility expires July 1,
said Portia Parker, corrections deputy commissioner. On the surface, the
shutdown is puzzling: Aren't our jails and prisons overcrowded? And aren't some
800 Alaskans currently imprisoned Outside because there isn't room for them
here? All that is true, Parker said. The Legislature increased the corrections
budget by 11 percent overall to deal with prison crowding, and cuts somewhere
else had to be made. Halfway houses are "the one area where ... we did have some
room," Parker said. They aren't all always full, she said.
Red Rock Correctional Facility
Eloy, Arizona
CCA
October 20, 2011 Anchorage Press
Early this month the Alaska Supreme Court dished a helping of Oh-no-you-didn't
to the state department of Corrections. The department lost the appeal of an
inmate who, back in 2007, was punished with twenty days of "punitive
segregation"-twenty days in the hole-at Red Rocks Correctional Center in Elroy,
Arizona. The court found Joseph James was punished as a result of proceedings in
a privately owned correctional facility that ignored his rights to due process.
James was accused of threatening two people with bodily harm, but was not
allowed to questions his accuser. In fact, the staff member who initially
accused James of making threats did not write the report that resulted in James'
segregation. A second officer did that. James appealed his segregation and got a
hearing, inside Red Rocks, but the hearing was not recorded and even the author
of the report did not attend along with the hearing officer. James appealed to
the Alaska Superior Court, so by the time the state had an attorney on their
(ultimately losing) side of the case, James was able to spank Corrections
without even the benefit of an attorney. The court recognized that sometimes
prisoners, unlike free people charged with crimes in the United States, don't
always have the right to face their accuser. An inmate, the court decision says,
"is not entitled to the full panoply of rights due an accused in a criminal
proceeding." That's because prison authorities need to maintain order. They have
what the courts called "substantial institutional interest" in maintaining
order. But the James case was different for several reasons. One was that James'
punishment, solitary confinement, was among the most severe punishments a
prisoner could have. (Courts have also called revocation of good-time credit
"severe punishment" as well.) The Red Rocks employees claimed James' alleged
actions called for only a minor disciplinary hearing, so they went about James'
disciplinary action and appeal without allowing James to question his original
accuser. The court found that severe punishment was evidence of a serious
infraction. They've previously found that during an administrative appeal, an
inmate has a due process right to face their accuser if the infraction was
serious. A single hearing officer met with James when he protested his
segregation -but James told the court system that hearing was not recorded. The
hearing officer had the report about the alleged infraction, but the author of
the report was not present. During James' appeal to a state Superior Court, the
state told the court system the recording "was no longer available"-given the
various missteps any layman can watch the state's case erode while reading the
Alaska Supreme Court's 21-page opinion. One footnote in the Supreme Court
opinion says, "it is troubling" the state implied an audio recording "had been
misplaced or perhaps destroyed, when in fact, no such recording existed." (A
Corrections official referred the Press to an attorney in the Department of Law,
but the lawyer was not available Monday or Tuesday, the latter a state holiday.)
September 27, 2009 Alaska Dispatch
After 15 years of managing Alaska prisoners housed out-of-state, Corrections
Corporation of America (CCA) has lost its contract to Cornell Corrections.
Cornell's will charge the state about $19,446,000 a year to house 900 prisoners,
while CCA's plan would have cost $18,724,000 -- $722,000 less a year. Either way
the state will realize savings over the $20,669,000 it now pays through a
contract with CCA. The 770 inmates serving time at CCA's Red Rock Correctional
Center in Arizona will be moved late this year to Cornell's Hudson Correctional
Facility in Colorado, a 1,250-bed center now under construction. The move -- via
special U.S. Marshals Service planes -- is expected to cost Alaska more than
$200,000, Alaska Department of Corrections spokesman Richard Schmitz said. The
Department of Corrections denied a protest of the award filed by CCA attorneys,
who said they won't launch further appeal. In the protest, CCA attorneys Charles
Cole -- a former Alaska Attorney General -- and Stephen Williams argued that
Cornell Corrections of Alaska lacks the basic experience the state requires, and
that a preference system for Alaska-based bidders was misused. Cornell's bid was
more costly than CCA's for the three-year term, but a proposal evaluation panel
awarded Cornell's plan more points because of the company's status as an Alaska
entity. Points matter as a committee rates the proposals in several categories.
According to CCA's protest, the company gained more points than Cornell in five
other evaluation categories. In denying the protest, the state said Cornell
Alaska qualifies for two perks as an in-state company -- a bidder's preference
and an offeror's preference -- and that Cornell meets experience standards.
CCA's attorneys argue that Cornell's Alaska enterprise manages halfway house
centers and lacks experience housing federal prisoners. In its bid, Cornell
turned to its parent company, based in Houston, as the qualified service
provider. CCA's attorneys took issue with the state awarding Alaska preferences
to a business that would turn the contract over to its Texas parent company to
manage. Alaska has contracted with CCA since 1994 to house sentenced prisoners
out of state. Currently, 770 Alaska inmates are serving time away. Most have at
least year-long sentences. Meantime, the $240 million, 1,536-bed Goose Creek
Correctional Center is scheduled to open in 2012 at Point MacKenzie. The
medium-security men's facility, which is expected to alleviate Alaska's prison
space shortage, is being funded through bonds issued by the Matanuska-Susitna
Borough. The state will pay off the bonds by leasing the facility from the
borough, and will take ownership once the bill is settled. Cornell has tried for
years to solidify support for a private prison in Alaska, and became wrapped up
in a far-reaching probe into political corruption. The company's lobbyist, Bill
Bobrick, pleaded guilty on charges he tried to bribe Rep. Tom Anderson--who is
now serving time in federal prison himself-- to advocate for a private prison.
Cornell was not implicated.
January 27, 2009 KTVA
Alaska has a long history with tuberculosis. Over the years state and federal
governments have declared an all out war against the disease. Health experts say
they have it under control, but one rural family disagrees. The eye-team
investigates how an Alaskan inmate could have died from the disease while behind
bars. Tuberculosis, or TB, used to be a huge problem in our state, but health
experts say now, it is pretty well under control. So why, if TB is under control
did the disease kill an Alaskan inmate behind bars in Arizona? It is a question
his family is desperately trying to find an answer to. TB attacks the lungs and
nervous system. It is spread through the air when people who have the disease
cough, sneeze, or spit. "Occasionally villages will have an outbreak where quite
a few people get exposed and go on the INH treatment, but it is pretty rare in
the United States for someone to die from it," says Department of Corrections
Clinical Director Dr. Rebecca Bingham. But one family disagrees. They know the
disease can kill, because it killed 26-year-old Joseph Alexie while he was
behind bars within the Alaska Department of Corrections. "That Friday, he went
in for a checkup, and that evening those doctors called me and told me that they
cleaned him out and he was sleeping, and he did have TB," says Joseph's mother
Lizzy Alexie, "That whole week, he didn't wake up. They called me everyday and
told me how he was doing and that one day, they told me they were giving him 48
hours to live, and that's when I started crying." Alexie died December 9, 2008,
on is daughter's 5th birthday, while incarcerated at Red Rock correctional
center in Arizona. Red Rock is the facility the Alaska Department of Corrections
has a contract with to house Alaskan inmates. He was sent to jail for burglary
and attempted sexual assault. His family says no matter what his crimes, he
should not have died behind bars from a controllable and treatable disease. "He
always had a smile on his face," says his aunt Evelyn Colley, "His last words to
me were that he loved me very much. He said I love you just lots." Even though
he was exposed to TB as a little boy, Joseph's family says he never should have
died from it. "He kept going and trying to get checked up, but they kept sending
him away telling him it was bronchitis, or this or that, and they were just
giving him a wrong diagnosis every time, without really giving him any medical
attention." Says Myra Colley, Joseph Alexie's cousin. Though they are bound by
federal laws not to talk about the health of specific inmates, the clinical
director for DOC told us, if they would have known an inmate was that sick, they
would have treated him. "He was found too late," says Dr. Bingham, "When he
finally came to medical and said he was coughing and did not feel well, he had
already, apparently, been sick for a while without probably realizing that."
But, in the weeks leading up to his death Joseph Alexie's family says he called
them and said he was not feeling well. They say he even asked that they send him
his medical records that document his history with t-b. "Joseph made attempts to
get help long before his condition worsened," says his aunt. His cousin agrees.
"He had a feeling it was TB. He kept going and trying to get checked up, but
they kept sending him away telling him it was bronchitis, or this or that, and
they were just giving him a wrong diagnosis every time," says Colley. The family
says they are not the only ones who think Joseph's medical condition was not
handled properly. After Joseph died his mother got a call from a fellow inmate
in Arizona, saying the Arizona medical staff did not do enough to treat him. "He
told me, you know, it's not right, it wasn't right," says his mother. Though
they are bound by law not to talk about the details of the case, officials with
the DOC say Joseph didn't tell anyone he was feeling bad in time "He was found
too late," says Dr. Bingham, "When he finally came to medical and said he was
coughing and didn't feel well, he had already, apparently, been sick for a while
without probably realizing it. He was put in the hospital and treated as
aggressively as possible, but apparently, we are not quite sure why he died. It
is an unusual thing to happen." At least five new positive TB skin tests have
come up, but the state says there is no outbreak. When someone has a positive TB
skin test it does not necessarily mean they have the disease, only that they
have been exposed to it, and have the antibodies. "We tested everybody that was
around him. They had five conversations, and they are all on medication and they
are fine without symptoms," says Dr. Bingham, "We tested everybody that was
transferred up here from down there, and we have not had anybody that is
positive up here." So far, no one else has gotten sick. As for Joseph Alexie's
family, they say they wont get over his loss. "We are the same age. He is only
26," says Myra Colley, "He has a daughter just like I do. "With him leaving when
he did not even have to. Tuberculosis is so treatable. There is no reason
anybody should die of tuberculosis. It's just so unfair." Even though Joseph
Alexie was in Arizona when he died, he was governed by Alaska Department of
Corrections health standards. The DOC medical officials say any inmate with a
positive skin test will receive treatment to suppress the disease. It can take
six weeks to two to three months for a TB case to turn positive, and we are told
that the inmates that have been exposed to TB will be tested again in three
months. Joseph Alexie was set to get out of jail this June.
January 14, 2009 Eloy Enterprise
Two Alaskan inmates at the Red Rock Correctional Facility owned by private
prison company Corrections Corporation of America (CCA) in Eloy, were air-vac'd
to the Casa Grande Regional Center last Thursday evening with serious injuries
after the two were involved in an inmate-on-inmate assault. According to CCA
officials, inmate Darrin Jones attacked fellow inmate Larry Mikell with an
unknown weapon as Mikell entered the Fox Bravo Housing Pod Unit at the prison at
approx. 5:50 p.m. The assault initiated a free-for-all among another half a
dozen prisoners retaliating against Mikell's assailant. The incident was
contained to the one housing unit by responding staff and quelled within
approximately eight minutes. Currently, the Alaskan population at the facility
remains on lockdown status while CCA continues to investigate the cause of the
incident. As of press time, the wounded Alaskan inmates were still under
hospital care.
January 10, 2009 Anchorage Daily News
A prison shanking followed by an attack with a weighted sock at an Arizona
prison Thursday evening spurred a brawl among Alaska prisoners that ended with
two convicted murderers hospitalized with serious injuries, according to the
Alaska Department of Corrections and local police. Prison officials say Darin
Jones, 41, attacked Larry Mikell, 27, at about 5:50 p.m., prompting a group of
other prisoners to join the fracas in a unit housing Alaska prisoners at Red
Rock Correctional Center in Eloy, Ariz. The disturbance was caught on video,
which police in Eloy, Ariz., were examining in their investigation, said Capt.
Shane Blakeman. "It was pretty clear that the guy named Jones actually stabbed
Mikell," Blakeman said. "Once that happened, there was another inmate that had a
sock with something inside the sock, and he challenged Jones and he actually hit
Jones in the head with that sock." That's when Mikell's friends jumped in to
protect him, he said. Both men were taken to Maricopa Medical Center in Phoenix
to be treated for serious injuries, said Alan Bailey, special assistant to the
state Department of Corrections commissioner. They were in stable condition
Friday, he said. The motive behind the initial stabbing was not immediately
clear. "It looked like it was unprovoked, like the guy just came up to him and
stabbed him," Blakeman said. Prison officials say no other inmates were injured
in the subsequent uprising that appeared "protective" in nature. The inmate
wielding the sock was not named. The dispute took place in a unit that holds
about 60 of Alaska's 878 prisoners who are housed in Red Rock, Bailey said.
Following the fight, which was quickly quelled, all Alaska inmates were
restricted to their units until the investigation was complete, he said. Those
involved would be placed in administrative segregation, Bailey said. "We're
going to take all precautions necessary to ensure the safety of any
participants," Bailey said. "We cannot allow that kind of behavior to go on."
Blakeman said no charges have yet been filed. An Alaska corrections official is
also heading south to conduct an independent investigation, Bailey said.
Officials at Red Rock did not return calls seeking comment Friday.
January 9, 2009 Anchorage Daily News
A brawl broke out among Alaska prisoners in an Arizona prison Thursday
evening, leaving two of the antagonists, both convicted murderers, hospitalized
with serious injuries, according to the Alaska Department of Corrections. Prison
officials say Darrin Jones attacked Larry Mikell at about 5:50 p.m., prompting
about a half-dozen other prisoners to jump in the fracas in a unit housing only
Alaska prisoners at Red Rock Correctional Center in Eloy, Ariz., a private
prison under contract to house Alaska inmates.
January 7, 2009
Eloy Enterprise
At approximately 11:30 a.m. local time, a disturbance occurred in the South
Special Housing unit at the Eloy Detention Center. Some unit staff members in
the housing unit were assaulted by furniture that was thrown at them during the
incident. The assailants then began to cause property damage in the housing area
with the active participation of other detainees. The disturbance was
immediately contained to the one housing unit by responding staff and quelled
within the hour. Approved chemical agents were utilized by staff to enforce
lawful orders for active participants to cease their actions and return to their
cells. At the time of the incident, there were approximately 34 ICE detainees
assigned to the Special Housing unit. An investigation is underway to identify
the assailants and all active participants, as well as to determine the cause
for the incident. Further details are pending the outcome of those efforts.
Following standard procedures, the entire facility has been placed on lockdown
status, meaning that detainees are restricted to their housing cells until
further notice. "We would commend CCA for their professionalism in getting a
handle on the situation very quickly, and preventing something more serious from
happening," ICE Public Affairs Officer Vincent Picard commented early last week.
Surrounding CCA facilities were called to assist during the incident and the
Eloy Police Department and EMS were notified. According to Eloy paramedics who
arrived on scene with two ambulances, only one officer was reportedly injured,
and was treated in-house at CCA's Saguaro facility for a bump on the head, and
sent to the Casa Grande Regional Hospital as a precautionary measure.
February 22, 2008 Honolulu Advertiser
Hawai'i inmates at the Red Rock Correctional Center in Arizona have been locked
down for 10 days during a top-to-bottom shakedown of the prison prompted by two
recent drug overdoses of Alaska inmates, according to the Hawai'i Department of
Public Safety. About 65 Hawai'i inmates are housed at the private prison, but
are kept separate from the Alaska prisoners, said Public Safety Deputy Director
Tommy Johnson. Teams provided by prison owner Corrections Corporation of America
used drug dogs as part of the search of all staff, program, recreational,
medical, kitchen and living areas. Investigators discovered three grams of black
tar heroin and a list detailing prices within the prison for cigarettes,
marijuana and other drugs, Johnson said. The drugs were found in a part of the
prison occupied by Alaska prisoners, and no Hawaii inmates were involved in any
illegal drug activity, he said. Three Alaska inmates were placed in disciplinary
segregation for introducing contraband. Johnson said CCA investigators suspect
the drugs were being smuggled into the 1,596-bed prison via the mail, and have
tightened up on mail room procedures. The prison is expected to return to normal
operations Monday.
September 23, 2007 Daily News-Miner
The Eloy Police Department has ruled out natural causes as the cause of death of
an Alaskan inmate found unresponsive in his cell at the Red Rock Correctional
Center 25 miles south of Phoenix, said Capt. Shane Blakeman. Results from
toxicology tests on 36-year-old Rusty Hightower of Fairbanks are weeks away,
said Blakeman, whose agency is leading the death investigation. Hightower was
serving a life sentence for murder for shooting and killing cab driver Dale
Baurick, 23, during a robbery April 1, 1988, near McGrath Road, according to the
Alaska Department of Corrections and News-Miner stories from the late 1980s.
Hightower’s cell mate found him dead in their room after coming back from dinner
Monday night, according to Eloy police. Hightower’s body showed no signs of
trauma, Blakeman said. An autopsy last week confirmed that Hightower suffered no
physical trauma, Blakeman said in an e-mail. James West, who was in regular
telephone contact with Hightower, his brother, said he knew of nothing unusual
going on with the inmate. “That kid was healthier than crap,” said West, who saw
his brother last year. The Corrections Corp. of America, owner of the
newly-built Red Rock facility, is keeping quiet on the matter until Hightower’s
cause of death is determined. “Pending some resolution as to the cause of death,
we feel it would be premature and inappropriate to comment on these matters at
this time,” company spokesman Steven Owen wrote in an e-mail. The Alaska
Department of Corrections has sent an official to Arizona to monitor the probe
and to make sure the Corrections Corp. of America is adhering to its contract
with the state, said Richard Schmitz, corrections department spokesman.
September 19, 2007 AP
A Fairbanks man in prison for killing a cabdriver 19 years ago was found
dead in his cell at the Red Rock Correctional Center in Arizona. It is not yet
known how Rusty Hightower, 36, died, said Capt. Shane Blakeman of the Eloy
Police Department, the agency investigating the death. According to authorities,
Hightower’s cell mate found the body Monday evening after returning to the cell
from dinner. Efforts to revive him failed, police spokeswoman Amanda Villescaz
said Wednesday. “There was no sign of a struggle or anything,” Blakeman said.
“We’re waiting for the autopsy report to tell us what exactly he died from.”
Villescaz said an autopsy was expected to be completed by Thursday.
Whittier
Whittier, Alaska
Cornell
August 12, 2008 Anchorage Daily News
Bill Weimar, who made his fortune off private halfway houses in Alaska,
pleaded guilty Monday to two federal felonies in U.S. District Court in
Anchorage. He admitted his role in a conspiracy to secretly funnel money to a
political consultant for an unnamed state Senate candidate, knowing the
candidate would back a private prison if he won. Weimar had a long-standing
relationship with the candidate running in the 2004 primary, a charging document
filed Monday said. Weimar held a "contingent interest" in a private prison
project worth $5.5 million, but only if the project was completed, the charges
say. He faces prison time in the plea deal and may have to forfeit "certain
property." Prosecutors estimate a sentence of 10 to 16 months. U.S. District
Judge John Sedwick isn't bound to that. He set sentencing for Oct. 29. Weimar,
who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing
investigation by the FBI and U.S. Department of Justice into political
corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont. At the brief
hearing on Monday, Weimar answered the judge's routine questions. Assistant U.S.
Attorney Joe Bottini outlined the two charges: conspiracy to commit honest
services mail and wire fraud, and illegally manipulating currency transactions
to avoid reporting them to the Treasury Department. Weimar has admitted paying
the consultant a total of $20,000 during the primary in August 2004 to cover
expenses for the candidate, without reporting the payments and without routing
them through the campaign. How do you plead? Sedwick asked. "Guilty," Weimar
answered, to each charge. LAWMAKER NOT NAMED -- For years, Weimar pushed plans
for a private prison in Alaska, but the project was always controversial and no
prison was ever built. A Democratic activist in the 1970s, Weimar later became
close to the Republicans who controlled the Alaska Legislature. Neither the
Senate candidate nor the consultant -- both accused of conspiring with Weimar --
is named in the charging document. Prosecutors declined to expand on it Monday.
But the candidate described in the documents, and in court Monday, appears to be
former state Sen. Jerry Ward. He didn't return phone calls or e-mail messages on
Monday. Ward, a Republican elected from Anchorage in 1996 and the Kenai
Peninsula in 2000, fervently pushed private prison projects as a legislator. The
charging document says the candidate running in 2004 had a long relationship
with Weimar, and held elected office part of that time. Ward and Weimar were
"buddies," according to a statement that former lobbyist Bill Bobrick, who
worked for Weimar, gave to the FBI in September 2006. Bobrick also has pleaded
guilty in the corruption investigation. He declined to comment on Monday. In
1997, a plan for a private prison in South Anchorage with Allvest and Veco Corp.
as partners crumbled under strong public opposition. As that project evaporated,
Ward emerged as the lead architect of a new plan to build private prisons in the
Mat-Su and Seward. "By God, this really solves the problem," Weimar was quoted
as saying at the time. In 2001, Ward signed on as the only Senate sponsor of a
House bill pushing a private prison on the Kenai. The charging document against
Weimar doesn't say whether the candidate won in 2004 and does not call the
person a legislator. Ward lost his seat in 2002 to Tom Wagoner. He was trying to
regain it in 2004, but lost in the Republican primary to Wagoner. SEATTLE
CONSULTANT -- In court Monday, Bottini told the judge the consultant was from
Seattle. Some of Ward's biggest campaign expenses in 2004 were more than $43,000
in fees charged by Madison Communications, an advertising and public relations
firm based in suburban Kirkland, Wash. Numerous calls left for Madison principal
Brett Bader on Monday were not returned. The charges against Weimar and other
court documents quote details of a number of telephone conversations he had with
the consultant and the candidate from Aug. 17 to Aug. 23, 2004. In a telephone
conversation on Aug. 17, 2004, the consultant told Weimar that the campaign was
having money trouble, court documents say. "I'm worried we're reaching the limit
now. I don't know where we find 10 grand unless (Candidate A) can get more in,"
the consultant said "There's no legal way to do that. At least not on that
scale," Weimar responded. Later that day, Weimar arranged to cover the next
advertising mailer for the candidate, and told the candidate so, the document
says. On Aug. 20, 2004, Weimar told the candidate of an unpaid invoice of
$20,000 with the consultant. The candidate's campaign funds were depleted, the
charges say. The candidate said he had only $300 to $400 left in his account. On
Aug. 23, 2004, Weimar made arrangements with the consultant to pay off the debt,
the charges say. He then called the candidate and told him "he would not be
receiving any further bills from Consultant A," the charging document says.
Weimar sent the consulting company a $3,000 check on Aug. 23, 2004, then sent
$8,500 in cash that same day by express mail, and another $8,500 cash the day
after, the charges say. "WE'VE MOVED ON" -- The charges also do not name the
private prison company, but Cornell Corrections Inc. tried to build a prison in
various Alaska communities, including Delta Junction, Kenai and Whittier. The
charging document describes the unnamed company's Alaska interests as halfway
houses, a planned juvenile treatment center, and a private prison project, and
that matches Cornell's interests. In 1998, in the midst of planning for a
private prison in Delta Junction, Weimar sold five Alaska halfway houses to
Cornell for $21 million. He also formed a partnership with Cornell to pursue the
Delta prison and subsequent deals for a private facility. One goal of the
conspiracy was to get the private prison company to give campaign contributions
to the candidate to help win election, according to the charges. A spokesman for
Cornell said the company was unaware of the charges but supports the
prosecution. The executives now in charge of Cornell weren't there at the time
of the events that involved Weimar, spokesman Charles Seigel said Monday.
Company records don't show any evidence of wrongdoing, he added. "We've moved on
and we are very different and have it behind us," Seigel said. Cornell also has
not pursued a private prison in Alaska for years and is no longer interested in
that, he said. "We're glad this investigation is going on but whatever was going
on or may have been going on in the past, that is not the Cornell that exists
now, both in the policy on the private prison as we've talked about and in
general about the way we do business." By 2004, Veco was no longer involved in
the prison project, Frank Prewitt, a former state corrections commissioner,
Cornell consultant and FBI informant, has said. ANDERSON INVOLVED -- The failed
private prison effort was also central in the government's case against former
state Rep. Tom Anderson, R-Anchorage, now in prison. At Anderson's corruption
trial last summer, Prewitt was a key witness who testified at length about his
undercover work to collect evidence against Anderson, and also about
questionable acts in his own past. From the witness stand, Prewitt said that in
1994 -- when he was corrections commissioner and Weimar owned Allvest -- he
accepted $30,000 from Weimar. Prewitt testified that he considered the money a
loan, which he repaid the next year, after he left his state post, by working
four months for Allvest for free. Weimar helped start Allvest in 1985, then
bought out his partners and turned it into a multimillion dollar corporation
with operations in Alaska and Washington state. Its government contracts were
worth an estimated $10 million a year. Allvest also operated a lab that did
contract urinalysis work, and used to run the city's Animal Control Center and
the Community Service Patrol. In 2002, Allvest was forced into bankruptcy
because of unpaid judgments in civil suits against the company. The bankruptcy
case eventually was settled.
October 9, 2006 Anchorage Daily News
When FBI agents searched the Wasilla office of Rep. Vic Kohring on Aug. 31,
they weren't just looking for documents related to Veco Corp., its executives
and ties to lawmakers. They also wanted information about developer Marc Marlow
as well as the state Department of Corrections. That element of the ongoing FBI
investigation emerged last week when Kohring's attorney, Wayne Anthony Ross,
provided a copy of the search warrant to the Daily News, along with the list of
items taken. Those documents, though lacking detail or context, suggest that the
probe is wide-ranging and not focused on any one company, issue or individual.
No one has been charged in the investigation, and federal authorities have
declined to discuss it except to say that it continues. The lead prosecutors are
from the Department of Justice's Public Integrity Section in Washington, D.C.,
which often handles government corruption cases. In all, offices of six
lawmakers have been searched, along with Veco offices and additional undisclosed
locations. Other lawmakers whose offices weren't searched have said they were
interviewed by the FBI. The warrant also sought all correspondence between
Kohring and the Alaska Department of Corrections. Ross said Kohring was
questioned by the FBI about efforts to build a private prison in Whittier. "He
indicated it was a facility that Cornell was hoping to build in the past and
that's apparently all they asked about that," Ross said. Cornell Cos. had teamed
with Veco in the private prison endeavor, which ultimately died last year after
the city of Whittier dropped its support. Along with those of Kohring and
Stevens, FBI agents searched offices of Sen. John Cowdery, R-Anchorage; Sen.
Donny Olson, D-Nome; Rep. Pete Kott, R-Eagle River; and Rep. Bruce Weyhrauch, R-
Juneau. Messages left for them were not returned. Kohring is the only one of the
six still facing an election battle in November. Kott lost in the primary,
Stevens and Weyhrauch aren't running again and the others aren't up this year.
What's known: • Dozens of FBI agents executed about two dozen search warrants
Aug. 31 and Sept. 1, though in some cases individuals agreed to the search. •
Six legislative offices were searched, and so was Veco Corp. Searches were
conducted in Anchorage, Juneau, Eagle River, Wasilla, Willow and Girdwood. The
office of Senate President Ben Stevens was then searched a second time, on Sept.
18. • One search warrant, provided by Sen. Donny Olson, said the FBI was looking
for "any and all documents" related to Veco, four of its executives and two
political pollsters, as well as information on Olson Air Service, among other
matters. When agents searched Stevens' office, they seized materials related to
controversial fisheries organizations. In the search of Rep. Vic Kohring's
office, agents also sought information on developer Marc Marlow and on the state
Department of Corrections. • The lead prosecutors on the case are from the
Justice Department's Public Integrity Section in Washington, D.C., which handles
public corruption cases. • No one has been charged. What's not known: • Perhaps
the biggest of the many unanswered questions is this: Who or what is being
targeted? • Authorities also won't say how many FBI agents or prosecutors are
working on the investigation, when it began, when it might end or how they are
proceeding.
September 7, 2006 Anchorage Daily News
For two decades, oil man and political financier Bill Allen has been a familiar
presence in the halls of the Alaska Capitol. But toward the end of this year's
regular legislative session, the Veco chief executive may have taken that
familiarity a step too far. Allen was watching the state House debate oil taxes
on the next-to-last night of business in May when he began passing notes to
legislators across the railing of the small spectator gallery, according to Rep.
Harry Crawford, D-Anchorage. Rules say the public can pass notes through the
front door to be delivered by a page. Direct engagement from the visitor gallery
is forbidden once the speaker's gavel sounds. Crawford said he saw Rep. Tom
Anderson, R-Anchorage, carry several notes from Allen to other legislators.
Anderson has received Veco campaign contributions and has also reported $30,000
in consulting contracts with the company since 2003. Several other legislators
say their staff observed similar goings-on. "He was definitely directing traffic
back there," Crawford said of Allen. Veco's role in Alaska's political process
is under intense scrutiny now. Last week the FBI served search warrants on
legislative offices and others seeking a wide range of information related to
Allen and other Veco executives, including gifts to public officials. But much
of Veco's influence, dating from the early 1980s, comes from sources in plain
sight. This includes close to $1 million in state and federal campaign
contributions over the past decade as well as consulting contracts with
individual legislators. Veco's presence in Juneau is distinctive not just for
its role in helping finance many campaigns but for the personal role played by
Allen and several other company executives. Veco has hired top-drawer
professional lobbyists in the past, as it did while pushing for a private prison
between 1996 and 2002. But Allen, 69, is known for taking a personal hand in
promoting his priorities, in a manner often described as gentlemanly rather than
bullying. In 1996, the Legislature added a new twist -- anyone registering as a
lobbyist was barred from giving campaign contributions outside his or her home
district. The idea was to prevent favor-seeking lobbyists from working a
building full of people they'd given money to. Allen spent a lot of time in the
Capitol in 2002, pressing the Legislature to pay for a private prison in
Whittier (Veco was teamed with a national prison company, Cornell, to build the
project) and to authorize a property tax break for construction of a North Slope
natural gas pipeline. Allen was in the Capitol so much that APOC ordered him to
register as a lobbyist. Allen protested, saying business owners looking out for
their own interests should not be treated like professional lobbyists who
represent a variety of clients. Allen eventually complied, registering for 2002
and 2003 and reporting his hourly wage as $156.25. That meant he had to forgo
writing campaign checks in those years. (Not that candidates were starved for
Veco money: Other company officials gave more than $200,000 to state candidates
in 2002 alone.)
March 30, 2005 Anchorage Daily News
The city of Whittier is cutting its ties to Cornell Cos.,
a private corrections operator, finally ending a political battle over new
prisons that has held Alaska in gridlock for a decade. The Whittier City Council
voted 5-1 last week to drop its three-year effort to win state money for a huge,
privately run prison in the isolated port town. A Cornell spokeswoman said
that's the end of the line for the Houston-based corrections company. At this
point we're not going to be pursuing anything," Cornell communications
director Lisa Tauser said. "We're disappointed but we respect their
decision." Private prison advocates have been wielding influence in Juneau
since 1995, as proposals for private correctional facilities in Anchorage, Delta
Junction, Kenai and Whittier found favor among legislators. Two prison deals
were approved, and two others made it through the state House. Competing
proposals to build state-run facilities were pushed aside. But each private plan
eventually died, falling victim to local opposition, resistance from
correction-worker unions and skepticism from some state officials. Lurking
around each successive plan were complaints about backroom dealing. "What I
see, over and over, is repeated sole-source, prearranged, heavy-money deals that
go to specific contractors," Rep. Eric Croft, D-Anchorage, complained in a
hearing last year. "It's never been a clean competitive proposal."
History of private prisons in Alaska Plans
to build the first private prison in Alaska have set off controversy in recent
years: • APRIL 1997: Corrections Group North, a partnership between halfway
house operator Allvest and oil field service company Veco, withdraws plans for
controversial 768-bed medium-security prison in South Anchorage. Project is
scrapped days before city voters reject the plan by a 2-to-1 margin. • JANUARY
1998: Voters in Delta Junction approve plan by Allvest to build 800-bed prison
on former Fort Greely Army post. • AUGUST 1998: National prison company
Cornell Corrections Inc. buys Allvest for $21 million. • SEPTEMBER 1999: Delta
Junction City Council repeals contract with Cornell/Allvest. • OCTOBER 2001:
Voters on the Kenai Peninsula defeat a proposal, backed by Cornell, for an
800-bed private prison by a 3-to-1 margin. • MAY 2002: Plan allowing private
prison in Whittier, proposed by Cornell, passes House and stalls in Senate
during Legislature's closing days.• March 2005: City of Whittier cuts ties to
Cornell, and company says it has no plans to pursue a private prison in the
state.
May 23, 2002
Plans to build a big private prison in Alaska are dead again. But
private-prison backers say they're willing to try again next year, depending on
how things go in the November election. This year's plan for a 1,000-bed prison
in Whittier, the fourth such idea to hit the Legislature since 1996, passed the
House but stalled in the Senate in the session's final days. The
Legislature did clear up a lingering headache from one of those earlier private
prison proposals. Lawmakers agreed in the closing days to give a $1 million
no-interest loan to the city of Delta Junction to pay off a legal settlement
with Allvest Corp., the private firm that once had teamed with Delta to develop
a prison for the state. But the Knowles administration -- and several key
legislators -- preferred an alternative this year that would expand regional
prisons and jails. The administration's resistance toughened in the closing days
of the session, when Corrections Commissioner Margaret Pugh issued a letter
recommending a veto of the Whittier bill. Cornell will still follow the
local debate and continue to run six Alaska halfway houses, said company
spokesman Doucette. Delta Junction is glad to have the $1 million loan,
given that the legal settlement was due July 1, said city administrator Pete
Hallgren. He said the city has already undertaken a study of forming a local
borough, in part as a response to a flood of federal money now reaching the area
as part of the national missile defense project being built at nearby Fort
Greely. The former Army post was to have been the site of the private
prison. Delta Junction backed out of the deal with Allvest, the principal
company in the Delta Correction Group, amid local controversy over a lack of
competitive bidding. Allvest sued and won a settlement from the city.
(Anchorage Daily News)
May 21, 2002
Private prison bill
Special session resurrection should stay in committee
House Bill 498, authorizing a private 1,000-plus-bed prison in Whittier, has
come to life again as Senate Bill 2012 in the current
special session of the Alaska Legislature.
SB
2012 has been referred to the Rules Committee and then the Finance
Committee. If the goal of senators is to further
explore the pros and cons -- forgive the pun -- of a private prison in
Alaska, fair enough. But that's as far as this legislation
should go. As of Monday, lawmakers already were deep into overtime trying to
finish their work. And there's still the matter of
a special session to consider a constitutional amendment on subsistence.
This
is no time to push for a private prison in Alaska.
Whether
it's called HB 498 or SB 2012, this bill and previous attempts at
private prison projects have been exercises in special
interests. The need to increase Alaska's prison capacity is clear, with an
inmate population growing by 200 a year, but neither
special interests nor the desires of Whittier to boost its economy are
reason to rush to approve a private prison -- particularly
as a byproduct in a special session.
The
burden of proof must be on the backers of a private prison to show why
their proposal is beneficial to Alaska beyond the
interests of a relatively small group of people who would stand to profit.
They
haven't made a convincing case so far, and it
won't happen in the waning hours of this session. (Anchorage Daily News)
May 13, 2002
The Senate Finance Committee on Sunday night approved a bill for a private
prison in Whittier. With just two days left in the regular session, the
legislature faced a logjam of bills this morning, from the routine to the
historic. A bill authorizing a government-owned, privately operated
1,000-bed prison in Whittier was approved by the Finance Committee 6-3.
The city would contract with the state, and Cornell Cos. Inc. would contract
with the city. But the Knowles administration favors a more regional
approach to increasing jail capacity, said Margot Knuth of the Department of
Corrections. For example, 100 more beds each are needed in Fairbanks and
the Matanuska-Susitna Borough, Knuth said. "What you need are
regional beds where inmates who are pre-trial or who have short sentences can
stay." (The Juneau Empire)
May 13, 2002
House Bill 498 to authorize a private 1,200-bed prison in Whittier appears stuck
in the Senate Finance Committee. Alaska will be better off if it dies
there. Whittier's desire for economic life beyond tourism, boating and its
status as a unique light at the end of the tunnel is understandable. But
the state's primary interest is not Whittier's development. It's the
integrity, professionalism and security of its corrections system. Private
prison plans have gotten the boot twice before in Alaska, and legislation for
them has been an exercise in special interests looking for a home. Neither
special interests nor the desires of one community are reason enough to approve
a private prison. The need to increase prison capacity is clear. But
HB 498 is not the way to do it. (Anchorage Daily News)
May 9, 2002
Last Saturday, a line of just over a dozen cars paid $15 to drive single-file
through the Whittier tunnel. Whittier’s bane used to be its
inaccessibility. Now it’s the tunnel. But if the momentum in the state
legislature continues, what Whittier may soon have instead is a 1,000-bed
prison, the largest in the state – so big that it would dwarf Whittier’s
scant population. The prison would be owned by Whittier, built by Veco
Construction, and run by Cornell Companies, a private, for-profit prison
firm. Cornell, whose finances the Wall Street Journal recently likened to
Enron’s, has been down this road before. The company tried to build a
private prison in South Anchorage, Delta Junction and Kenai before coming to
Whittier. All of its previous efforts failed, as well as its overtures to
Wrangell and Ketchikan, at least in part because, given a say, a lot of
residents weren’t thrilled about having a big private prison in their
backyards, even in a big backyard. Mayor Ben Butler says that’s not a
problem in Whittier. Cornell Companies, his erstwhile partner, says
the solution is simple: just don’t give people a say. About
670 Alaskans are currently incarcerated in a private prison in Florence,
Arizona. If nothing else, the Whittier proposal would bring them home –
although, says Rep. Eric Croft, "Whittier is almost as remote as
Arizona." Cornell and Veco are lobbying heavily for a private
prison in Whittier. To that end, they’ve retained Kent Dawson, Mark Higgins
and Joe Hayes, heavy hitters in the capitol. The Whittier bill was co-sponsored
by Rep. Eldon Mulder, the house finance chair. Mulder’s wife, Wendy,
works for Hayes. Croft, who’s against the Whittier project, says he finds
that "disturbing" and "almost beautiful in a corrupt sort of
way." People from Anchorage and Girdwood will come to Whittier
for $13-an-hour jobs, said Cornell spokesman Paul Doucette. And if that doesn’t
work, Doucette says they can hire from Outside. Not likely, says Louise Green.
She’s the vice president for marketing at Corrections Corporation of America (CCA),
the nation’s biggest private prison contractor, which runs the private prison
where Alaska inmates are housed in Arizona. "They definitely won’t
be bringing people up from the Lower 48 to live in Whittier," Green
said. Staffing is just one hurdle. Management and Training Corporation (MTC),
another leading private prison contractor, didn’t bid on the Whittier
project because they thought the site was inadequate. Both MTC
marketing manager Mike Murphy and CCA senior director of business
development Kevin Ashburn said that the first things private prison
contractors look for is an adequate pool of potential employees, and
infrastructure: water supply, sewer systems, and nearby health and fire
facilities. Whittier has none of that, says state Department of Corrections
strategic planning coordinator Margot Knuth. "Of all of the proposals I’ve
seen, this is the worst," she said at recent state senate hearing. "It
requires a level of sophistication that Whittier doesn’t have. It worries me
and it should worry you. We could have a hundred-million-dollar embarrassment on
our hands." The way to prevent that is a feasibility study, says CCA’s
Ashburn. Cornell, said Ashburn, has "probably done a feasibility study. I’m
sure they would have. That should come first." No, said Cornell’s
Doucette: No feasibility study. But having a relatively uniformed, or
quiescent, citizenry seems to be part of Cornell’s plan. When Cornell was
courting Ketchikan, Frank Prewitt, a Cornell executive, and former Alaska DOC
commissioner, sent an email to Ketchikan real estate agents telling them how to
expedite the prison proposal. They needed to "select a local government
entity that is legally able, and politically willing, to sell revenue bonds
without a public vote," Prewitt wrote. Under the current plan,
Whittier will sell revenue bonds to help finance the private prison. Will the
people of Whittier vote on that? No, says Butler. "It’s
not a requirement," he said. "Because it’s not going to cost the
citizens of Whittier anything." (The Anchorage Press)
April 30, 2002
A bill clearing the way for a 1,000-bed private prison in Whittier was passed in
the House on Monday. The House voted 24-14 for the measure, which calls
for the state to contract with the city of Whittier to house state
inmates. Whittier would contract with Cornell Cos. Inc. to build and
operate the prison. Opponents said Whittier won't be easy for rural
residents to visit. If the concern is rehabilitation, they said, inmates
should be brought home to prisons nearer their own communities. This is
the fourth time a private prison proposal has come up in the Legislature.
Previous efforts, including one in Kenai last year, were derailed by community
opposition. Rep. Eric Croft, D-Anchorage, objected to the sole-source
selection process. He said he has seen four private prison proposals since
1996, with different justifications each time. But each time it involved
the same private prison company, he said, "with the same powerful,
influential people pushing it." "This is not about
privatization. This is about getting a lot of money to one entity,"
Croft said. "We wouldn't do this buying 1,000 pencils. But
we're going to do it with hundreds of millions of dollars."
(Anchorage Daily News)
April 17, 2002
A bill calling for a
private prison to be built in Whittier now
also calls for expanding a public prison in Bethel. The measure passed the
House Finance Committee on Tuesday.
The change could broaden support for the bill, although the
administration
and some legislators still don't like it.
The bill's chief backer, Rep. John Harris, R-Valdez, said he added the
96-bed expansion at Bethel because that seemed to be the highest priority
for the Department of Corrections.
Lawmakers are looking at several competing prison proposals.
Sen. Lyda Green, R-Wasilla, is sponsoring a bill that would have 11 cities
and boroughs float $190 million in bonds to build or expand prisons and
lease them to the state. The state would pay $72 million annually to operate
the prisons and make lease payments to the communities.
The
Knowles administration proposes to sell $117 million bonds to add 563
beds to prisons in Palmer, Bethel, Fairbanks and Seward and design future
prison expansions.
The Department of Corrections has opposed the private prison bill.
Language
stating that the Legislature intends to spend no more than $89 to $91 a day
on the Whittier prison is not binding, and the actual cost could be higher,
Knuth has said. (Anchorage Daily News)
March 26, 2002
The Alaska
Legislature has repeatedly tried to open the door for
profit-making prisons in the state. Each time
prison industry lobbyists have persuaded state lawmakers to give the idea a
whirl, local opposition has stymied the
project.
The
private prison industry refuses to give up, though. And it has a
powerful patron in House Finance Committee
Chair Eldon Mulder, whose wife works for a prison industry lobbyist.
Privatizing an important public safety function like prisons
makes no more sense than hiring Pinkerton
security guards to replace state troopers. A private outfit can undercut the
price of a state-run prison or state
cops, but the lower cost is made possible by our settling for lower quality
and less professionalism.
Alaska definitely needs more space in its jails and prisons. It's an
embarrassment to have to send 800 inmates
thousands of miles away to a private prison in another state. The
Legislature ought to give up its obsession with
building a private megaprison and support a more practical regional
expansion plan. (Anchorage Daily News/Opinion)
March 6, 2002
A House committee
looked at a plan Tuesday
to build a large private prison
in Whittier, while a Senate committee took up a
competing proposal to expand
state-run prisons around the state.
Frank
Prewitt, a consultant for Cornell Companies,
said that firm's proposal for a
1,200-bed private prison in Whittier would cost $44
a day less than a Knowles'
administration plan to expand existing prisons and
jails.
Administration officials said they're not sure
Prewitt used the right variables in
comparing state and private proposals, but they
could not be certain without further
analyzing his numbers.
Marvin Wiebe, senior vice president for governmental
affairs at Cornell Companies, said
the firm can do the job for less than the state
partly by providing less space for
prisoners and paying employees less.
Also,
it's more economical to put 1,200 prisoners in
one place than to add space to
prisons around the state, Wiebe said.
Compensation,
including benefits, will total $36,000
for a beginning correctional officer
with no experience, Wiebe said.
The
state, by contrast, pays its beginning
correctional officers about $48,400 with
benefits, said Bruce Richards, a special assistant
in the Corrections Department.
This
is the third time the Legislature has
considered a private prison. It approved
previous proposals for private prisons in Delta
Junction and then in Kenai, but both fell
apart in the face of community opposition.
The Senate State Affairs Committee took its first
look Tuesday at an alternative
proposal, Senate Bill 336. The Knowles
administration bill calls for floating a $117 million
bond to add 563 beds to prisons in Palmer, Bethel,
Fairbanks and Seward and design
future prison expansions.
"I think it's a wise use of state funds," said Steve
Sweet of Fairbanks. "I think it's
important for family members to be close to inmates
for visitation rights." (Anchorage Daily News)
January 24, 2002
Frank Prewitt
neglected to list his full credentials in his bio following
his Jan. 22 article in the Empire. If a used car salesman did what Frank
Prewitt just did, he would be fired for his lack of ethics. Yes, Cornell
salesman Frank Prewitt, the "former commissioner for the Department of
Corrections" who was fired from that post by Gov. Walter Hickel, neglected
to say that he is much more than a former commissioner and "practicing
attorney" in Anchorage. Mr. Prewitt is a full-time employee of one of the
largest campaign contributors in Alaska, Cornell Corrections. (Bill
Rogers/The Public Safety Employees Association)
January 14, 2002
The seeds of
Alaska's first private prison may have found fertile soil
in the economically barren city of Whittier.
On
Dec. 21, a 6-0 vote by Whittier's city council selected Cornell Cos.,
based in Houston to plan, promote, design, construct and operate a
minimum 800-bed medium security correctional facility. Not selected was
Corrections Corp. of America, which operates a facility in Florence,
Ariz., where about 800 Alaska prisoners are incarcerated because of a
shortage of bed space in Alaska prisons.
Whittier's
interest in a private prison came after 73 percent of Kenai
Peninsula Borough voters gave the Cornell-led project the cold shoulder
Oct. 2.
"We
thought that was about as strange as it could be," Whittier Mayor
Ben Butler said. "So we thought Whittier should give it a try, and we
started the process."
He
said Whittier views the prison as a way to save a "dying community."
"We
are not trying to debate the philosophical reasons between a
private- and a state-operated prison," Butler said. "What we're
trying
to do is get some economic development going in this town."
Paul
Doucette, Cornell's public relations spokesperson in Houston, said
Cornell stood ready to work with Whittier. He described the project as a
1,200-bed medium security prison, larger than the 800-bed facility
approved by the Whittier council.
Despite
voting for the partnership with Cornell, Whittier city council
member Arlen Arneson doesn't support the project.
"The
majority of (Whittier) people won't 'fess up to it, but 60 to 70
percent of them are against the prison, too," he said. "The simple
reason is that the ordinance was written to exclude a public vote. ...
There's
no public vote. Not even an advisory vote."
Arneson
also voiced concern over lack of a feasibility study.
However,
Butler said, "We don't have any problems with thinking the
prison isn't feasible. The contractor will do a site evaluation and that
will be a feasibility study."
In
1998, the Legislature authorized the creation of a private prison by
the city of Delta Junction at abandoned U.S. Army facilities at Fort
Greely. Corrections Group North, formed by Cornell and Weimar
Investments, worked with Delta Junction on that project. Pete Hallgren,
the executive director of Delta Junction's department of economic
development and the city administrator, said a $75,000 feasibility study
"indicated that there wasn't anywhere near enough money appropriated
under the enabling legislation to make it financially feasible."
Constructing
the private prison was not pursued, lawsuits were filed,
and Hallgren said, "We came out of the project defending against a
lawsuit by the proposed prison operator. We ended up settling the case
for $1.1 million."
Delta
Junction has paid $100,000. The remaining $1 million is due July 1.
"It's
more money than we've got," Hallgren said.
Jeff
Sinz, finance director of the Kenai Peninsula Borough, said the
borough invested $75,000 in the project
that was ultimately rejected by
voters. (Alaska Daily News)
November 15, 2001
Whittier would seem to be ahead of Ketchikan and Wrangell as the three towns vie
for a possible private prison development that would house 800 Alaskans now
incarcerated out of state. Frank Prewitt, a consultant for the Texas-based
Cornell Companies Inc., wrote last month that Ketchikan political leaders must
act quickly to promote a private prison project and sell revenue bonds without a
public vote. (Daily News)
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