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Abraxas I Youth and Family Services Center, Marienville, Pennsylvania
February 22, 2008 The Derrick
Two Philadelphia men were charged for their actions during separate
riots that broke out this week at Cornell Abraxas I in Marienville.
State police said Joseph Clark, 18, and Lenny Scott Cabrera, 18, were
involved in both riots that occurred at the facility Monday and Tuesday.
Clark was charged with one count of aggravated assault and two counts of
riot, police said. They said Cabrera was charged with two counts of
aggravated assault and two counts of riot. Both men were arraigned
before District Judge George F. Gregory in Tionesta. They were placed in
the Warren County jail on $25,000 bail. A preliminary hearing was
scheduled for Tuesday. Police said three juveniles involved in both
riots and five other involved in the Monday riot will face similar
charges.
January 11, 2007 The Courier Express
In a last-ditch effort to forestall a strike, representatives of
Abraxas I and members of PSSU Local 668 have agreed to meet Friday,
according to a press release issued by Abraxas Wednesday. Abraxas I is
planning to operate through any strike with qualified employees from
other facilities and all employees who want to continue to work,
according to the press release. "Any employee who wishes to work may do
so at the current wages, benefits and other terms or conditions of
employment," the release said. "Abraxas I will not implement its final
offer until an agreement is reached." Abraxas I has informed its
client-referring agencies about the strike and the company's plans to
operate in the interim. It has also decided to stop admitting new
residents and plans to accelerate the discharge of residents who are
approved for discharge by the courts, said the press release. On Jan. 3,
Abraxas Youth and Family Services received notification that the members
of SEIU Local 668 rejected the company's offer of Dec. 21. Local 668
also issued a 10-day strike notice, which indicates it plans to strike
at 12:01 a.m. Sunday. James Newsome, program director at Abraxas I,
said, "We are very disappointed that the union and its members rejected
this offer. It was a very fair offer given the economic realities of the
Youth and Family Services business. "Our most recent offer includes wage
increases ranging from 8.5 percent to 12.25 percent over the proposed
three-year agreement," he said. "While we propose increases in employee
contributions for medical benefits, our wage proposal also ensures that
all employees would receive a real wage increase to offset the increased
employee medical contribution. Our request for increased employee
medical contributions is consistent with what many unions and employers
have agreed to in the face of rising costs of health care." Abraxas I
proposes maintaining an HMO medical plan for current employees, but
employees hired after ratification would only be able to participate in
a PPO plan. Newsome said the HMO plan is a very expensive benefit. "The
only way we can continue to afford to provide the HMO is to make it
available for current employees only," he said. "The union recognized
the fairness of our economic proposals, because they told us that if we
were willing to agree to a union shop or fair share - union security -
they would recommend ratification. We refused to agree to a union shop
or fair share because we believe employees should have a right to decide
for themselves whether they wish to belong to the union and pay union
dues, not be forced to do so," Newsome said. Abraxas I houses
approximately 274 adolescents and provides drug and alcohol counseling,
as well as operating a private school, for its residents.
Abraxas Center, Forest, Pennsylvania
July 8, 2004 Morning Call
A Tamaqua 16-year-old, who was committed to a juvenile center after
being charged with shooting a friend in the face with a gun he stole
from a borough pawn shop, escaped after attending a funeral Wednesday,
police said. Duane R. Allen II was court-ordered to attend the
funeral and told two workers taking him back to the Cornell Abraxas
center in Marienville, Forest County, that he was sick, state police at
Hazleton said. The workers stopped about 2:30 p.m. at Pilot Truck
Stop in Sugarloaf Township, Luzerne County, where Allen fled from the
worker accompanying him to the restroom, police said.
Alaska Legislature
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 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.
July
1, 2005
In the closing days of the regular legislative session, Republican Sen.
Gene Therriault of North Pole amended an elections bill to allow big
corporate money into Alaska politics. Undeterred by the fact there had
been no public notice or public hearing, Senate Republicans approved the
change. But the state House balked, and the amendment was removed. A
triumph for democracy, right?
So what's Therriault really trying to do? Simple. Alaska law does
not allow corporations to make political contributions to candidates or
groups. Therriault wants to change that because the Republican Party
would get more corporate money than other parties. This is about nothing
more than fattening the Republican Party's bank accounts. Would it? You
bet. How do we know? Well, a court ruling allowed corporate
contributions for a brief period in 2001, and the Republican Party
mistakenly reported some of what it got: $25,000 from Veco, $12,000 from
Cornell Companies Inc., $10,000 from Gray Line of Alaska, $8,000 from
Philip Morris USA, $7,500 from Holland America and so on. Selfless
giving? Hardly. Veco and Cornell wanted a private prison; Gray Line and
Holland America didn't want a cruise ship tax; Phillip Morris didn't
want higher tobacco taxes. You get the picture. Alaskans don't want big
money in their state's politics. They've said so at the polls. But Gene
Therriault doesn't care about that. He wants the dough for his own
partisan purposes. Better keep an eye on him.
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.
Alexander Youth Services Center, Alexander,
Arkansas
(AKA Arkansas Juvenile Assessment and Treatment Center)
June 19, 2007 The Morning News
A new report identifying problems in the special education program
at the former Alexander Youth Services Center -- some of which were
previously identified in a 2005 study -- drew frustrated comments Monday
from legislative panels that oversee the state's youth lockups. "It
seems we're planning ourselves to death but we're not getting anything
accomplished," said state Rep. Bobby Pierce, D-Sheridan, during a joint
meeting of the House and Senate committees on children and youth. In a
report released this month, the state Education Department cites about
50 practices at the facility, now known as the Arkansas Juvenile
Assessment and Treatment Center, that don't comply with state and
federal regulations under the Individuals with Disabilities Education
Act. The department has directed the Division of Youth Services to
develop a plan of action for correcting the problems. Sen. Sue Madison,
D-Fayetteville, said that on visits to the facility in Saline County she
has been "extremely unimpressed" with the educational practices she saw,
which she said seemed to consist of youths playing on a computer. "Do we
have any way of determining if they're really learning something, or if
we're just letting a computer baby-sit them?" she asked. The House
chairwoman, Rep. Linda Chesterfield, D-Little Rock, said a lack of
sufficient information gathering is one of the problems highlighted in
the report. Chesterfield said scrutiny is needed for the educational
services the state provides to all youth in custody, not only those in
need of special education. Scott Tanner, ombudsman coordinator for the
state Public Defender Commission, testified that the Division of Youth
Services has had chronic problems with its education system at least
since 2000, the year he became an ombudsman. Education services at the
facility are provided by Group 4 Securicor, the private company that
took over operation of the facility in January. The state fired the
facility's previous operator, Cornell Companies, in November after a
state investigation found evidence that psychotropic drugs may have been
administered improperly to some youths as a restraint. The facility also
was investigated in 2005, after 17-year-old Lakeisha Brown died from a
blood clot in her lungs two days after complaining to staff that she
felt ill. Cornell was ordered to revamp some of its policies as a result
of that investigation. Madison asked Monday whether it would be more
appropriate for the education of youth in custody to be undertaken by
the state rather than a private company. Education Department attorney
Scott Smith said he did not believe it would. Trying to incorporate
students in custody into the state's public education system would
require compliance with numerous state and federal mandates that
currently are waived, he said. "The reason I ask is, there's something
wrong with the picture in my mind when you have state agencies .....
firmly committed to a free public education, and then we turn around and
hire a private company to deliver that," Madison said. "I just have a
hard time thinking that that's a good idea." Steve Jones, a former state
representative who recently became deputy director of the Department of
Health and Human Services, told the committee the Division of Youth
Services is working on a plan to correct the problems. Rep. Dawn
Creekmore, D-Hensley, noted that the division developed a plan of action
previously, after a 2005 report cited problems with the facility's
educational system. "It's time to quit putting plans of action on paper
and time to bring something to the table, take some action, physical
action, for improvement. These children are still here, and we're just
letting them down continuously, year after year after year," she said.
"It is children that the state Department of Education is all about, and
it is children that DYS is all about," Chesterfield said. "Somewhere the
bureaucratic -- we're not going to use the alliterative -- the
bureaucratic stuff, if you will, has got to be overcome for the
children." Jones assured the committees the division would achieve real
results.
January 11, 2007 Arkansas News Bureau
The state Department of Health and Human Services has agreed to
enter into a short-term contract with a company to operate the troubled
Alexander Juvenile Correctional Facility in Saline County, agency
officials said Wednesday. The agency has signed a $4.5 million contract
with G4S Youth Services in Richmond, Va., a division of the
British-based Group 4 Securicor, for the company to operate the facility
from Jan. 21 through June 30, DHHS spokeswoman Julie Munsell said. The
contract is pending approval by the Department of Finance and
Administration. At the end of the six-month period, the state will have
the option of renewing the contract for an additional year, Munsell
said. Munsell said no bids were taken because the agreement was reached
under emergency procedures. The agency considered the situation an
emergency because of safety and welfare concerns for the 143 youths at
the facility, she said. The state fired Cornell Companies, the
Pennsylvania-based company that previously ran the facility, in November
after a state investigation indicated psychotropic drugs may have been
administered improperly to some youths to restrain them. Munsell said
Cornell is still at the site, but the state has been in charge since
Nov. 3.
November 5, 2006 Arkansas Democrat-Gazette
An advocacy group that has been monitoring Alexander Youth Services
Center for months said Saturday that Arkansas isn’t meeting the mental
health, education and special education needs of the children at the
troubled facility as required by the U. S. Department of Justice and
state law. Problems at the center are systemic, said Dana McClain, a
senior attorney with the Disability Rights Center, a federally funded
Little Rock nonprofit that assists disabled Arkansans. “We don’t think
this is rehabilitation, and state law says it is supposed to be [for
youthful offenders ]. I think it’s punishment,” she said. “I feel like
these children are being set up to go to adult prison.” At some point,
she said, the youthful offenders at the lockup will get out, “and you
hope when they do they’ve got a better shot at being productive members
of society.” A draft copy of the group’s lengthy report detailing
“failures” at the center in Saline County was given to the Arkansas
Democrat-Gazette on Saturday — a day after the state unexpectedly ended
its contract with Cornell Cos. Inc., a Houston company that ran the
center for the past five years. An internal investigation found that
employees were “inappropriately” drugging youthful offenders with
psychotropic drugs to control bad behavior. The state was paying Cornell
about $ 10 million annually. News about the forced medications,
sometimes given without a doctor’s order, prompted some legislators and
others to renew calls Friday to shut down the state’s largest lockup for
youthful offenders. The Disability Rights Center report, which outlines
about 50 problems, is expected to be released publicly later this week.
McClain said her group will meet with the Department of Health and Human
Services on Monday to discuss the findings. Monitors for Disability
Rights have been making unannounced visits, as allowed by federal
statute, to the center at least three times a month since March. “Under
the contract these are things Cornell was responsible for providing,”
McClain said. “I hope [Health and Human Services ] doesn’t just address
that one issue [about the medication ]. This is a good time to do more
because they are starting anew.” The agency has been responsive so far,
McClain noted. Cornell, however, didn’t address some of the major
concerns that Mc-Clain said she repeatedly talked to company employees
about. Julie Munsell, Health and Human Services spokesman, said her
agency has received a copy of the report but she declined to comment
about the details until it is published and officials meet with the
group’s representatives. Health and Human Services is the umbrella
agency over the Youth Services Division, which now operates the youth
lockup. In general, Munsell said, the state has made many strides since
entering into a settlement agreement with the Department of Justice in
March 2003 after a federal investigation found civil rights violations
in the delivery of mental-health care, education, fire safety and
freedom of religious expression at the center. Still, more work is
needed, particularly with the center’s education system, she
acknowledged. “We do still struggle with education issues at Alexander,
and we’ve been working with the Department of Education to improve those
issues,” she said. “We will always strive to get to an ideal setting,
but it will take us time to get there.” The Justice Department hasn’t
visited the center since January. Over the years, the youths at the
Alexander center have complained that employees kicked, slapped and even
threatened them with death. Others killed themselves. One boy, known for
days to be suicidal, was able to hang himself a few years ago with a
bedsheet. An investigation later found that his guard didn’t check on
him. Another boy hanged himself in the same cell just a few months later
— just as the state hired Cornell to take over the facility and fix its
problems. And last year, a 17-year-old girl at the center died of blood
clots in her lungs. She complained to nurses and supervisors that she
was ill, but they didn’t believe her, even as she lay dying, according
to a subsequent investigation. Munsell said her agency plans to work
with the Disability Rights Center to address the group’s concerns. The
Department of Justice couldn’t be reached for comment Saturday. During
visits to the lockup, McClain said monitors found: Youths watching Harry
Potter movies during science class on more than one occasion. A student
sleeping on his keyboard, even though a teacher was sitting at a desk in
the same classroom. No teacher-led reading program, even though at least
50 percent of the youthful offenders at the center have difficulties
reading, and in some cases, can’t read at all. (An ombudsman who
regularly visits the center said the youths are supposed to use a
computer-based reading program at their own pace, but he has seen no
evidence that such a system has.
November 4, 2006 Arkansas Democrat-Gazette
Arkansas terminated its contract with Cornell Cos. Inc. to run the
troubled Alexander Youth Services Center on Friday after learning that
employees were drugging youths to control unruly behavior — in many
cases without doctors ’ orders, in violation of facility policy and
against the |