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FBI Raids Offices of 6 Alaska Legislators
Probe Looks for Ties With Oil-Field Firm

By Matt Volz
Associated Press
Saturday, September 2, 2006

JUNEAU, Alaska, Sept. 1 -- The offices of at least six Alaska state legislators, including that of the son of Sen. Ted Stevens (R), were raided Thursday and Friday by federal agents searching for possible ties between the lawmakers and a large oil-field services company, officials and aides said.

FBI spokesman Eric Gonzalez said 20 search warrants were being executed across Alaska, but he would not say where.

A copy of one of the search warrants, obtained by the Associated Press, links the investigation to a new production-tax law signed last month by Gov. Frank H. Murkowski (R) and to a draft natural gas pipeline contract that Murkowski and the state's three largest oil companies negotiated.

The warrant called for the seizure of documents concerning any payment made to lawmakers by Bill Allen and Richard Smith, executives of Veco Corp. Agents also looked for documents about contracts, agreements or employment of legislators provided by Veco, Allen, Smith and Veco President Peter Leathard.

Sought-after items named in the warrant included hats or other garments bearing the name "Veco" or the writing "CBC," "Corrupt Bastards Club" or "Corrupt Bastards Caucus."

Those are nicknames given to 11 lawmakers after a March opinion article, published in three Alaska newspapers, listed the contributions that legislators had received from top Veco executives, said House Speaker John Harris (R).

"I've heard it a few times," Harris said Friday, adding that "they were making fun" of the article.

In it, Lori Backes, executive director of the All Alaska Alliance, questioned whether the financial links between Veco and lawmakers created "undue influence" over the state's political process. Backes's group supports a gas pipeline proposal different from the one favored by Murkowski and Veco.

Harris said he saw Smith and Rep. Pete Kott (R) handing out hats at a Juneau hotel bar during a June special session, when lawmakers voted down an earlier Murkowski petroleum tax bill. But, he said, he did not see anything with "Corrupt Bastards Club" on it.

"All they had was 'Veco' on them," Harris said.

Veco staunchly supported the governor's production-tax plan, a version of which the legislature passed last month after twice rejecting it this summer. Lawmakers have also twice failed to pass legislation related to the governor's pipeline contract with BP PLC, ConocoPhillips and Exxon Mobil Corp.

Among the offices searched was that of Republican Senate President Ben Stevens, who has reported collecting more than $240,000 in consulting fees from Veco since 2000. Agents left his Capitol office Thursday with 12 boxes of documents labeled "Evidence" and loaded them into a vehicle.

Stevens could not be reached at his Anchorage home on Friday.

Ted Stevens's spokesman, Aaron Saunders, said Friday that he had no comment on the search.

Also searched in both Juneau and Anchorage were offices belonging to state Sen. John Cowdery (R), the Senate Rules Committee chairman; state Sen. Donald Olson (D); and state Reps. Kott, a former House speaker; Vic Kohring (R), chairman of the House Special Committee on Oil and Gas; and Bruce Weyhrauch (R).

"It's pretty bizarre," Cowdery said Friday. "That's all I know, it's pretty bizarre. I certainly haven't done anything wrong."

Olson issued a statement saying, "I am certain that I will not be a target of this investigation and that I have broken no laws."

Kohring said he cooperated and was told he was not a target of the investigation.

Calls to Weyhrauch and Kott were not immediately returned Friday.

Amy Menard, an attorney for Veco, said the company would cooperate with federal agents in providing the broad range of information they want.

"We have no information that would suggest that there have been any improper activities either by Veco Corp., Veco Alaska or any of the principals involved in those companies," Menard said.

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