Allegation on Billing Rebutted
Stevens Friend Denies Saying Invoices Were Not Necessary

By Del Quentin Wilber
Washington Post Staff Writer
Thursday, October 16, 2008

A close friend of Sen. Ted Stevens denied telling a business executive that he didn't have to bill the Republican lawmaker for extensive renovations to his Alaska house, rebutting a key allegation by federal prosecutors in the senator's corruption trial.

The friend, Bob Persons, is a central figure in Stevens's trial in federal court on charges that he lied on financial disclosure forms to hide more than $250,000 in gifts and renovations to his house in Girdwood from 1999 through 2006. Prosecutors allege that many of the gifts and remodeling work were financed by Bill Allen, a star prosecution witness and the former chief executive of Veco, a now-defunct oil services company.

Allen, a former friend of Stevens's, has testified that he approached Persons after he received a hand-written note from the senator in 2002 asking to be billed for a first-floor deck installed by Veco workers. The Veco executive testified that he then approached Persons, who told him to ignore Stevens's request because the senator was just "covering" himself.

Persons, a defense witness, denied he had said such a thing.

"Did you ever say to Bill Allen, 'Bill, don't worry about getting a bill, Ted is just covering' " himself? defense lawyer Robert Cary asked.

"No," Persons said. "That's crazy."

Prosecutors have alleged that Persons acted as a go-between for Stevens and Allen.

Persons owns the Double Musky Inn, a Cajun restaurant near Stevens's house. Because Stevens and his wife spend so much time in Washington, Persons kept track of the renovations and sent the couple constant updates via e-mail. Veco workers have testified that they helped transform Stevens's cabin into a two-story home with wraparound decks and a garage.

Although he helped the defense rebut Allen's testimony, Persons acknowledged that Veco did a lot of work on Stevens's home.

He read a litany of e-mails to jurors that he sent Stevens during the renovation period in which he complimented Allen and other Veco workers for their remodeling efforts. In one 2001 note, Persons told Stevens that a Veco foreman "is building this like a fine cabinet."

During cross-examination, prosecutors hammered at Persons for inconsistent statements he gave to a grand jury and in court yesterday. Persons also acknowledged that he told the grand jury that he had a bad memory.

Stevens's attorneys have asserted that the senator paid every bill he received for the renovations -- to a tune of $160,000. They have argued that Stevens's wife oversaw most of the project and that Allen hid other bills.

Stevens and his wife, Catherine, are expected to testify today.

A subcontractor, Augie Paone, testified for the defense yesterday that he was brought onto the project by Veco to do carpentry and concrete work, among other tasks.

He wrote up five invoices and sent them to Allen to review. The bills were passed on to Catherine Stevens, who paid him about $132,000 in five installments in 2000 and early 2001, Paone said.

However, Allen rejected the last bill, Paone testified. Paone said that Allen told him to "eat this bill, or look at it as a political contribution."

Paone testified that he later received payment for that last Stevens invoice, about $13,000, when he did remodeling work on Allen's home.

Under cross-examination, he acknowledged that Veco and Allen paid him to return to Stevens's home to fix a few things, add shelves and ski racks, and do some tile work on the fireplace.

Paone testified under cross-examination that Veco's role in the remodeling bothered him.

"I was concerned that the senator wasn't getting billed for some of that stuff, and I was concerned that something like this would happen," he testified, referring to the trial.

Paone said he did not recall telling an FBI agent that he thought Veco spent $100,000 on its portion of the job. But, he said, the project "was not being run correctly, and I could see how $100,000 could go into it."

Prosecutors have alleged that Stevens turned to Allen and the oil services company because they would do their portion of the costly project free of charge.

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