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Alaska Senator's Home Is Raided
Stevens Scrutinized In a Wide Inquiry Into Corruption in the State

By Dan Eggen and Paul Kane
Washington Post Staff Writer and Washingtonpost.com Staff Writer
Tuesday, July 31, 2007

Agents from the FBI and the Internal Revenue Service raided the Alaska home of Sen. Ted Stevens (R) yesterday as part of a broad federal investigation of political corruption in the state that has also swept up his son and one of his closest financial backers, officials said.

Stevens, the longest-serving Republican senator in history, is under scrutiny from the Justice Department for his ties to an Alaska energy services company, Veco, whose chief executive pleaded guilty in early May to a bribery scheme involving state lawmakers.

Contractors have told a federal grand jury that in 2000, Veco executives oversaw a lavish remodeling of Stevens's house in Girdwood, an exclusive ski resort area 40 miles from Anchorage, according to statements by the contractors.

Stevens said in a statement that his attorneys were advised of the impending search yesterday morning. He said he would not comment on details of the inquiry to avoid "any appearance that I have attempted to influence its outcome."

Stevens, 83, who joined the Senate in 1968, has been considered one of the most powerful members of Congress for more than a decade, including six years in which he held wide sway over nearly $1 trillion in federal spending as chairman of the Senate Appropriations Committee. He is now the top Republican on the Commerce Committee, which has oversight of fisheries and other industries critical to his home state.

"I urge Alaskans not to form conclusions based upon incomplete and sometimes incorrect reports in the media," Stevens said. "The legal process should be allowed to proceed so that all the facts can be established and the truth determined." Brendan Sullivan, a prominent white-collar defense attorney representing Stevens, declined to comment.

The afternoon raid was conducted by FBI and IRS agents as part of a "court-authorized search warrant," FBI spokesman Richard Kolko said in Washington. He declined to provide further details.

Stevens is among more than a dozen current and former members of Congress who have come under federal investigation in the past three years over allegations related to their ties to lobbyists, defense contractors and other corporate interests. This week, the House and Senate are expected to approve ethics legislation that would require more disclosure of lobbying activities and contributions to lawmakers, among other changes.

This spring, Republicans and Democrats celebrated on the Senate floor when Stevens became the longest-serving Republican in the chamber's history. He has said he plans to run in 2008 for another six-year term.

A few weeks after that celebration, one of Stevens's closest political allies, Bill Allen, formerly the chief executive of Veco, pleaded guilty to bribing several members of the state legislature. One was an unidentified former state senator whose consulting payments cited in the plea agreement matched payments reported by Ben Stevens, a state lawmaker who is the senator's son. He left the state Senate last year.

The Alaska investigation has centered on Allen's efforts to bribe lawmakers by handing out wads of hundred-dollar bills in an effort to win favorable tax legislation in Alaska for a natural gas pipeline long sought by the energy industry and leaders of both political parties there.

In early June, Ted Stevens told The Washington Post that federal investigators had given him a document preservation request as part of the Veco probe, a request that he expected would lead to him turning over those documents to the FBI. He added that "my son is also under investigation." Stevens said then he had not been interviewed by federal investigators.

The inquiry has been run by the Justice Department's Public Integrity Section, overseeing a team of FBI agents and two assistant U.S. attorneys in Anchorage. The involvement of the IRS was not previously known.

Contractors who worked on Stevens's Girdwood home have told The Post and other media outlets that the remodeling project was overseen by Allen and other Veco executives. They said they provided evidence and testimony about it to a federal grand jury in Anchorage.

In addition, the Anchorage Daily News reported last month that a second grand jury was hearing testimony in Washington involving the Girdwood home project. The remodeling, which took place in 2000, involved putting the senator's one-story house on stilts and building a new ground floor, making it two stories.

Veco has received more than $30 million in federal contracts since 2000, according to a database search of FedSpending.org, which tracks contracts given to private companies. The largest contracts were for logistical services provided to the National Science Foundation.

Stevens spent more than $37,000 on legal fees in the second quarter of 2007, according to his campaign committee report. The payments went to Williams and Jensen, a law firm that has long served as his campaign counsel.

Stevens is not the only Alaska Republican to be spending large sums on lawyers, according to congressional financial disclosures. From April through June, Rep. Don Young (R) spent more than $262,000 on two law firms. A local office director for Young formerly lobbied for Veco, and Allen used to hold an annual fundraiser for Young.

Part of Allen's plea agreement included charges that he illegally laundered donations to federal officials by reimbursing company officials for contributions they made in 2005 and 2006 to campaign committees. In that period, Stevens and Young were the top recipients of Veco cash, taking in $37,000 and $30,250, respectively.

Allen also pleaded guilty to illegally underwriting the cost of political fundraisers. The Wall Street Journal reported last week that Young recently amended his campaign filings to show $38,000 in payments to Allen for "fundraising costs." Young has declined to comment on the Veco matter.

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