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Anchorage Daily News

Push for private prison was downfall


GUILTY PLEA: EX-ha~fway house official was accused in conspiracy scheme.
By TOM KIZZIA
tkizzia@adn.com
(08/12/0800:06: 10)

An inten~e political battle over private prisons in Alaska kept the state's jai!-building efforts tied in knots for a
decade, ending only in 2005 after complaints of str~>ng-arm lobbying helped turn legislative sentiment against the
idea.

A driVing force for privatizing prisons throughout that time was Bill Weimar, the former halfway house official who
pleaded guilty Monday in U.S. District Court to conspiring to make illegal payments to a legislative candidate in
2004.

Weimar was the principal spokesman for the first two private-prison proposals to surface in the 1990s, but faded
into the background after selli.n'g his halfway houses in 1998 to Cornell Corrections, a national prison company
based in Houston. @
Even as late as the summer of 2004, however, when the private prison idea was on its last legs, Weimar held a
substantial interest in the deal, standing to make $5.5 million if a private prison was ever built, according to the
federal charging documents filed Monday.

Among Weimar's private-prison partners,. at least for much of the time he was pushing the idea: Veco Corp .

Resorting both to raw political mu?cle and to high-flown sentiments about saving money and bringing Native
prisoners home, backers of the private prisons won legislative support for successive plans aimed at Anchorage,
Delta Junction, Kenai and Whittier. Two prison deals were approved, and two others made it through the state
House. Competing proposals to build state-run facilities were shoved aside.

But each private plan eventually died, falling victim to local opposition, resistance from prison guard unions and
skepticism from Republica!1 and Democratic governors. .

Meanwhile the number of state prisoners shipped to the Lower 48 because of inadequate space here grew to
more than 800. A new 1,500'-bed ~tate-run prison now being built in the Mat-Su Borough is intended to bring
many of those inmates back to Alaska.

Through the years, debate centered on whether inmates could be housed reliably and cheaply in a facility
designed and run by a for-profit firm. The stakes were high: a 25-year prison deal, worth $1 billion, wquld have
been the largest state-private contract in Alaska history. FBI _ Stevens-2006

PARTNERS INCLUDED VECO

Corrections Group North, the original design-buil~ joint venture pushing a private deal, included not only Cornell
and Weimar's company, Allvest, but the well-connected oil field services and construction firm Veco. Some of _
Juneau's top lobbyists worked for the cause, and they had strong advocates in the Legislature.

Among the elected leaders were the House Finance chairman, Rep. Eldon Mulder, R-Anchorage, whose then-wife
worked with Cornell lobbyist Joe Hayes, and former state Sen. Jerry Ward, wh() had ties to the Kenai Natives
Association, a Cornell partner. Ward's real estate firm managed pull tab parlors for the Kenai Native group.

With each· plan came complaints about backroom deals. 18'~

"Wnat I see, over a!1d over,-is-repeated sole-sourcei pre-arranged l heavy-money deals that go to specific
~ C;Qn!,,~ct()rs ..
It's neve~ been a clean, competitive proposal," Rep. Eric Croft, !?-Anchorage, complained in a
u (2.
2004 com~ittee he~ring. "We are~ing to see somebody indiCted and p~ably imprisoned over this-series of
prop~sals. .. V .V
.,1., ~

The first proposed private prison would have been built on Veco-owned land in South Anchorage. A contract was
approved by the House in 1997, but with a Senate vote pending the idea was withdrawn on the eve of a citywide
vote.

Anchorage voters went ahead to reject the idea'by a 2-1 margin -- what one AS,sembly member called "driving a
nail in the coffin."

The idea quickly rose again, with 'help from 'Ward, who put together. a plan for facilities in the Mat-Su and
Seward. The plan was publicly praised by Weimar, but was soon replaced by the idea of locating a private prison
at the mothballed Fort Greely near Delta Junction.

A deal with Allvest was approved in 1998, both by local voters and then the Legislature, But after Weimar
brought Cornell into the consortium that year, a change of sentiment in Delta Junction upended the contract. The
prison companies sued and won a settlement of $1.1 million.

LAST STAND IN WHITTIER

The prison backers bounced back, striking a deal with Kenai Natives Association and taking it to the Kenai
Peninsula Borough. The borough assembly invited proposals from other firms. Corrections Group North finished
second in the bidding, but was bumped to first on the strength of its proposed Native-owned location and its
political expertise.

The legislature approved th'e Kenai project in May 2001, but once again local opposition was rising. The borough
assembly decided to seek voter aPl?roval~ and when the project lost by a 3-1 ratio the plan died.

~Aftera brief dalliance in Wrangell, the~Cornell private-prison made its last stand in Whi~tier. The isolated Prince
William Sound port jumped on board within six weeks of the Kenai vote. But momentum in Juneau was beginning
to slacken. For three legislative sessions the private prison issue was debated without a decision.

By the summer of 2004, Veco was out of the consortium and the Whjttier plan was limping alo,ng. That's when,
according to the charges he pleaaed guilty to on Monday, Weimar made illegal payments to a legislative
candidate in return for th'e candidate supporting the project. The effort failed, and in March 2005 Whittier
announced It was done \:'lith. the pri~~m.

Cornell continued with its halfway houses in Alaska but said it was no longer .interested in pursuing a private
prison in Alaska.

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FBI - Stevens-2007

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Anchorage Daily News

Cowdery pleads not guilty


FEDERA~ CHARGES: Lawmaker's attorney says indictment a 'mistake.'
By SEAN COCKERHAM
scockerham@adn.com
(08/12/0802:12:32)

Anchorage state Sen, John Cowdery pleaded not guilty to federal corruption charges Monday after his lawyer
wheeled him into court in a wheelchair. -

U.S. marshals fingerprinted Cowdery and took his passport, and a magistrate allowed him to go free on $5,000
bond. U.S. District Court Judge Ralph Beistline will preside over Cowdery's trial, which is set for Oct. 6 in
Anchorage.

The 78-year-old Cowdery faces a maximum of 15 years ·in federal prison if convicted on the two corruption
charges. He is accused of scheming wi~h executives of Veco Corp. to try to buy the vote of a fel!ow state senator,
Nome Democrat Donny Olson, in order to keep state oil taxes down.

Olson has not been charged. He says he didn't get anyJhing from Veco and didn't do its bidding.

Cowdery said little in court Monday. Both he and his attorney, Kevin fitzgerald, declined to speak to reporters.
Fitzgerald told the magistrate that Cowdery continues to be employed by the state of Alaska as a legislator; He is
not running for re-election this fall. .

Cowdery hesitated before replying when Magistrate John Roberts asked his age. Cowdery, who suffers from
kidney problems, also looked over the'court's list of medIcations he's' on.

"Maybe that's all I'm taking, my wife knows more than I do," he told the magistrate.

Cowdery's Wife, Juanita, observed the arraignment from the public gallery. She was expressionless.

Three former Alaska state legislators have already been convicted and sentenced as part of the broa9 FBI
<;orruption probe into state politics. All of them pleaded not guilty and went to trial.

Federal prosecutor Joseph Bottini said in court he could turn over "voluminous" eVidence to the' defense this
week. He said Cowdery's lawyer first needs to give prosecutors a 750-gigabyte portable computer hard drive and
that it will take 24 hours to upload all the material. .

Prosecutors are expected to use FBI audio and video recordings .as evidence against Cowdery, just as in the
previous corruption trials of state legislators.
FBI - Stevens-2008
Former Veco executives Bill Allen and Rick Smith have pleaded guilty to bribing legislators to push through the
tax rate favored by oil companies that operate on the North Slope. They said in court papers that Cowdery was
part of the conspiracy.

Cowdery's lawyer, Fitzgerald, has said the government misinterpreted comments made by Cowdery and that tne
indictment "will be exposed for the mistake it is."

Cowdery, until recently, was one of the most powerful figures of the bipartisan state Senate majority, which
made him the rules chair, a position that gave him clout over which bills made it to the floor for a vote. Cowdery
resigned that chairmanship this spring.

He stepped down as head of the Legislative Council, which oversees administrative business of the Legislature,
affer tiis ind!ctment last month; _ ltl1 . q
..oJf._ r;>
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Anchora$e Daily News

~tevens trial belongs in Washington, prosecutors argue


VENUE: The jury can view photos rather than tou,r'his Girdwood home, they say.
By ERIKA BOLSTAD
ebolstad@adn.com
(08/12/0801:59:15)

Sen. Ted Stevens' trial should stay in'Washington, federal prosecutors insisted in papers fil,ed Monday, arguing
thafhearing.it in Alaska while the 84-year-old Republican campaigns for reelection could taint the home state
j!Jry pool.

They also argued that, fundamentally, the case against Stevens is based in the nation's capital. He faces seven
f~lonY'counts of knowingly taking home repairs and gifts worth more than $250,000 from the oil services
company Veco Corp. 'and failing to report them on his annual U.S. Senate disclosure forms from 2001 through
2006. ~

"Simply put, this is a case about a scheme to conceal, largely through the submission of false ·financi.al disclosure
forms to the United States Senate," Justice Department prosecutors wrote in a motion filed Monday afternoon.
The finalJcial ,disclosure forms were "created, reviewed, signed and filed in the District of Columbia, and a
substantial portion of Stevens' scheme'to conceal occurred'in-or around the',District of Columbia:'

U.S. District Court Judge Emmet Sullivan is scheduled to. hear the change-of-venue motion Aug. 20. Last week in
court, Sullivan promised the trial would be "fast but ... fair," to accommodate'Stevens' election schedule, and
" said he hasn't prejudged the senator's requ.est ~omove it:~oAlaska:_ But SuJlivan already h,as m~de plans to begin
. jury selection in Washington, D.C., on Sept. 22. The trial itself is set to b'egin two days later. '--

Stevens' lawyers have argued that most of the witnesses in the case are in Alaska. They also ar:gued that jurors'
should see Stevens' Girdwood'home, where Veco employees, inclUding CEO Bill Allen, oversaw renovations in
2000 that doubled it in'slze. .

,Mo~~ly" though"his lawyers said last week they're concerned that Stevens be able to continue campaigning
. pefore and d~rLilg"the trlat Stevens, who lias
tielcnl1e office
since 1968,faces six Re'publican' challengers'in the
Aug. 26 primary b~f6re moving on to the Nov. 4 general electio~.

WILL GAMPAIGNING TAINT :JURORS?

Last week, his lawyers said that if the trial remains in Washington, he would have "a minimal opportunity to
personally participate in the elec\oral process that will decide his professional future."
. .
But prosecutors said Monday that was a "substantial factor weighing heavily against transfer."
FBI - Stevens-2009
Since his July 31 arraignment, the senator has been traveling all over Alaska and· participating in campaign rallies
where he has "vocally proclaimed his innocence of the crimes charged' against him," prosecutors wrote in their'
motion.

Those claims have been Widely, rep'orted In the media, prosecutors said, and it's likely that.'Stevefls 'wilr"tontinlie
to offer explanations and characterizations of the factual and legal ,issues in the cas~."

That has consequences, prosecutors argued, especially if Stevens continues to campaign. during the trial. It has
potentia) to ta,int, the jury pool, but also could require that ~hey be sequestered and barred from TV, radio and
newspapers during the trial. Apart from the trial, that could limit jurors~ participation in the 2008 electoral
process as well, prosecutors argued.

T~hey also downplayed the.concerns Stevens' lawyers have expressed about transferring witnesses and evidence
'from AiaSka'to'wasiii'n9toii,-b"~:__-_' _ _ ' L-t11;t.-A-,J "-,r 3 b '20 - -V'1 ;;.,1Q( <£-
42 BOX~~ OF MATERIAL Q <:;!..
Wit,nesses cal"'feasily travel to Washington, D.C., the prosecutors argued, and nearly all of the evidence "will be
rendereq..in an ele~tronic format." There are 42 boxes of materials provided by Stevel1s to the government, the
motion noted, but those are in Washington.

For the same reasons, there's no need for a jury to see the house, prosecutors said. For one, the evidence will
include more than 1,000 high-resolution digital photos of both the Interior and exterior, they said in their motion.

"The Girdwood residence is not the 'scene of the crimes,' but is rather merely the subject of some, but not all, of
the defendant's false statements," prosecutors wrote. .

Prosecutors added that the precise value of the benefits Stevens is accused of receiving will not be the
predominant issue at trial. Instead, it ,will be "whether Stevens knew he received m.ore than $250 in benefits from
a source that he did not repay.'!

Prosecutors cite several other reasons for keeping the trial in Washington, D.C.:

• Stevens also is accused of failing to· disclose that he traded his vintage Ford Mustang and $5,000 to Allen in'
1999 for a new Land Rover Discovery worth about $44,000. The trade for Allen's Land Rover involved
correspondence and financial instruments sent from Washington, prosecutors said. And ultimately, Stevens' 1964
Mustang was also shipped from Washington, they pointed out.

• Much of the correspondence concerning renovations at Stevens' Girdwood home, including the transmission of
architectural drawings, e-mails and handwritten notes, was sent from Washington, prosecutors said.

• Although Stevens is not charged with bribery, the indictment against him details how Veco asked for assistance
with federal matters and how Stevens helped the company. It also lays out how Stevens received things of value
from Veco and failed to disclose them. In-their motion~ prosecutors said the requests for official acts that were
made of Stevens involved written correspondence and were sent to addresses anCl computer servers in
Washington.

• Prosecutors also pointed out that all three of the U.S. District Court judges in Alaska were nominatect and
confirmed by the U.S. Senate while Stevens was the senior senator from Alaska. Typically, a senior senator from
a state suggests -- or even endorses -- judges and other federal appointees.

• Finally, prosecutors also argued that Stevens actually lives in Washington, D.C.:

"Although Stevens maintains a residence in Alaska, there can be no legitimate dispute that for all practical
purposes, (he) lives and works in the District of Columbia. His spouse is an attorney at a law firm in the District
of Columbia, and the family owns a personal residence in the District of Columbia."

Prosecutors wrote that if the trial is in Washington, D.C., Stevens will "be able to maintain close contact with his
Senate office, and continue to live in his own home."

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Copyright @ Tue Aug 12 fS:34:S3 UTC~0800 20081900 The Anchorage Dally News (www.adn.com)

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Anchorage Daily News

Businessman Weimar -paid candidate to push prison


GUILTY PLEA: Fixation on building private prison brought him down.
By LISA DEMER and RICHARD MAUER
Anchorage Daily News
(08/12/0801 :34:41)

Bill Weimar, who made his fortune off private halfway houses in Alaska, pleaded guilty Monday to two federal
felonies in U.S. District Court in Anchorage.

He admitted his role in a 'conspiracy to secretly funnel money to a political consultant for an unnamed state
Senate candidate, knowin-g the candidate would back a private prison if he won.

-Weimar had a long-standing relationship with the candidate running in the 2004 primary, a charging document
filed Monday said. Weimar held a "contingent interest" in a private prison project worth $5.5 million, but only if
the project was completed, the char~es say. - _( } )

.He faces prison time in the plea deal and may have to forfeit "certain property." Prosecutors estimate a sentence
of 10 to 16 months. U.S. District Judge John Sedwick isn't bound to that. He set sentencing for Oct. 29.

Weimar, who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing investigation by the
FBI and U.S. Department of Justice into political corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont.

At the brief hearing on Monday, Weimar answered the judge's routine questions. AssistantU.S. Attorney Joe
Bottini outlined the two charges: conspiracy to commit honest services mail and wire fraud, and illegally
manipulating currency transactions to avoid reporting them to the Treasury Department.

Weimar has admitted paying the consultant a total of $20,000 during the primary in August 2004 to cover
expenses for the candidate, without reporting the payments and witnout routing them through the campaign.

How do you plead? Sedwick asked.

"Guilty," Weimar answered, to each charge.

LAWMAKER NOT NAMED

For years, Weimar pushed plans for a private prison in Alaska, but the project was always controversial and no
prison was ever built.

A q~mocratie_activist in the 1970s, Weimar later became close to the Republicans wb.of~ntrolled t~A1Laska
L e g l s l a t u r e . F B -Stevens· LO 1

Neither the Senate candidate nor the consultant -- both accused of conspiring with Weimar -- is.nam~d in the
charging document. Prosecutors declined to exp,and on it Monday.

But the candidate described in the documents, and in c;ourt Monday, appears to be former state Sen. Jerry Ward.
He didn't return phone calls or e-mail messages on Monday.

Ward, a Republican elected from Anchorage in 1996 and the Kenai Peninsula in 2000, fervently pushed private
prison projects as a legislator. .

The charging document says the candidate running in 2004 had a long relationship with Weimar, and held elected
office part of that time. "\~ '}.- _

~~ ~--- _:.~~----~- ------~-.".~----_....:


rt(Qfl-.-,4-;\/-1 S6?u'--~ ,. ~
Ward and ""l~lmar were "buddies," _according to a statement that former lobpyist Bill Bobrick, who worked for
Weim.~p, gave to the FBI in SepteOr 2006. Bobrick also has pleaded gO in the corruption investigation. He
declined to comment on Monday. _

In 1997, a plan for a private prison in South Anchorage with Allvest and Veco Corp. as partners crumbled under
strong public opposition. As that project evaporated, Ward emerged as the lead architect of a new plan to build
private prisons in the Mat-Su and Seward.

"By God, this really solves the problem," Weimar was quoted as saying at the time.

In 2001, Ward signed on as the only Senate sponsor of a House bill pushing a private prison on the Kenai.

The charging document against Weimar doesn't say whether the candidate won in 2004 and does not call the
person a legislator.

Ward lost his seat in 2002 to Tom Wagoner. He-was trying to regain it in 2004, but lost in the Republican primary
to Wagoner.

SEATILE CONSULTANT

In court Monday, Bottini told the.judge the consultant was from Seattle. Some of Ward's biggest campaign
expenses in 2004 were more than $43,000 in fees charged by Madison Communications, an advertising and
public relations firm based in suburban Kirkland, Wash.

Num~rous calls left for Madison principal Brett Bader on Monday were not returned:

The charges against Weimar and other court documents qupte details of a number of telephone conversations he
had with the consultant and the candidate from Aug. 1? to Aug. 23, 2004.

In a telephone conversation on Aug. 17, 2004, the consultant told Weimar that the campaign was haVing money
trouble, court documents say. .

"I'm worried we're reaching the limit now. I don't know where we find 10 grand unless (Candidate A) can get
more.in," the consultant said

"There's no legal way to do that. At least not on-that scale," Weimar responded.

Later that day; Weimar arranged to cover the next advertising mailer for the candidate, and told the candidate
so, the document says. .

On Aug. 20, 2004, Weimar told the ~andidate of an unpaid invoice of $20,000 with the consultant.

The candidate's campaign funds were depleted, the charges say.. The candidate said he had only $300 to $400
left in his account.

On Aug. 23, 2004, Weimar made arrangements with the consultant to payoff the debt, the charges say. He then
called the candidate and told him "he would not be r~ceiving any further bills from Consultant A,'~ the charging
document says.

Weimar sent the consulting company a $3,000 check on Aug. 23, 2004, then sent $8,500 in .cash that same day
by express mail, and another $8,500 cash the day after, the charges say. . .
FBI - Stevens-2012
"WE'VE MOVED ON"

The charges also do not name the private prison company, but Cornell Corrections Inc. tried to build a prison in
various Alaska communities, including Delta Junction, Kenai and Whittier. The charging document describes ~he
unnamed company's Alaska interests as halfway houses, a planned juvenile treatnient center, and a private
prison P!o~ect, and that matches Cornell's interests.

~---- -=------ ----- ---~ -.. ~


In 1998, inJne midst of. plann,ng for a private prison in_Delta Junction, Weimar sold five Alaska halfway houses to
Corne~f6r $21 million. He also forO a partnership with Cornell to pursQ'e Del~a prison and sUbsequel"lt /
deals for a private facility.
,
One goal of the conspiracy was to get the private prison company to give campaign contributions to the
candidate to help win election, according to the charges.

A spokesman for Cornell said the company was unaware of the charges but supports the prosecution. The
executives now in charge of Cornell weren't there at the time of the events that involved Weimar, spokesman
Charles Seigel said Monday. Company records don't show any eVidence of wrongdoing, he added.

"We've moved on and we are very different and have it behind us," Seigel said.
. .
Cornell also has not pursued a private prison in Alaska for years and is no longer interested in that, he said.

"We're glad' this investigation is going on but whatever was going on or may 'have been going on in the past, that
is not the Cornell that exists now, both in the policy on the private prison as we've talked about and in general
about the. way.we do business."

By 2004, Veco was no longer involve'd in the prison project, Frank Prewitt, a former state corrections
, ,
commissioner, Cornell consultant and FBI informant, has said.

ANDERSON INVOLVED

The failed private prison-effort was also central in the government's case against former state Rep. Tom
Anderson, ~-Anchorage, now in prison.

At Anderson's corruption trial last summer, Prewitt was a key witness who testified at length about his
undercover wqrk'to collect evidence against Anderson, and also about questionable acts in his own past.

From,the witness stand, Prewitt said that in 1994 -- when he was corrections commissioner and Weimar owned
Allvest -- he accepted $30,000 from Weimar. Prewitt testified that he considered the money loan, which he a
repaid the next year, after he left his state post, by working four months for Allvest for free.

Weimar helped start Allvest in 1985, then bought out his partners and turned it into a multimillion dollar
corporation with operations in Alaska and Washington state. Its governm~n~ contracts were worth an estimated
$10 million a year. ' ' ,

Allve~t
also operated a lab that did contract urinalysis work, and used to run the city's Animal Control Center and
the Community Service Patrol •.

In 2002, Allvest was forced into bankruptcy because of unpaid judgments in civil suits against the company. The
bankruptcy case eventually was settled.

FBI - Stevens-2013
Find Lisa Demer online at g,dn.c9m/£onta_c!L1deme.r or call 257-4390. Find Richard Mauer at
9dn.com/contactirmauer or call 257-4345. Daily News reporter Tom Kizzia contributed to this story.

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Anchorage Daily News

Feds reveal more in Stevens case


FILINGS: Prosecutors allege senator used inside help to profit from Florida condo.
By RICHARD MAUER
rmauer@adn.com
(08/15/0803:37:45)

Federal prosecutors offered a glimpse of previously unseen evidence against U.S. Sen. Ted Stevens in new court
filings Thursday, including allegations that Stevens used insider help to turn a secret $5,000 investment in a
Florida condo devel<;>pment into more than $100,000 in quick profits.

The government also dismissed assertions by Stevens that his conduct was shielded by the constitution as a
member of Congress, citing nine examples of Stevens' "errands" and requests involving Veco that had nothing to
do with protected lawmaking.

Among them: an intercepted telephone call in which Stevens discusses how his son Ben, then the state Senate
Pr~sident, pl~nned to push a bill favored by the oil industry as a prelude to gas development.

The new filings go substantially further than the indictment handed up against Stevens last month charging him
with seven counts of failing to disclose gifts from 1999 through 2006. Most of the alleged gifts were from the
former Alaska-based oil field service company Veco and its politically active chairman, Bill-Allen. Allen and Veco
vice president Rick Smith have pleaded guilty to bribing elected officials and are working with government
prosecutors and are expected to testify at Stevens' trial, tentatively scheduled to start ~ith jury selection Sept.
22.

Stevens demanded a speedy trial in hopes of a positive outcome before the November election, fn which he is
seeking a seventh full term. So far, the case is set for district court in Washington, though Stevens is a!:!king for a
change of venue to Alaska, where a more friendly jury 'might await him.

One of the government documents is a response to an earlier motion filed by Stevens seeking dismissal of the
charges on the basis of th~ Constitu_tion's_ Speech or Debate clause. That clause offers broad protection to
mefnoers of Congress from prosecution for activity in furtherance of legislation -- but it's not a blanket immunity.
Nor is the separation of powers doctrine, which Stevens' attorneys cited in another motion seeking dismissal
Thursday. .

The allegations concerning the Florida condo emerged in another document filed electronically by prosecutors
Wednesday night, hours after the court clerk closed for the day. That document also alleges that Stevens sought
jobs from Veco for a son and a grandchild and a'new Jeep Cherokee for his daughter Liiy in 2005.

The government says it plans to offer that evidence at trial as background, as proof of the crimes in the
indictment, and as evidence of a guilty conscience. Stevens wouldn't comment, but it's likely his legal team will
fight against introduction of the evidence as extraneous to the charges.
FBI - Stevens-2014
NEW ALLEGATIONS

While much of the government's case had emerged in newspaper reports long before the Washington grand jury
handed up the indictment, the allegations concerning Florida condo and Jeep Cherokee have never been aired.

The Florida transaction began in 2001, a year after Allen began renovating Stevens' Girdwood residence, and a
time at which Stevens was approaching the pinnacle of his po\:Ver in the Senate.

On Feb.A, 2001, Stevens and his wife, Catherine, signed a purchase contract with a development company about
to build a condo project in Florida, agreeing to buy a garden unit for $360,000. The contract was a standard one
and required a 10 percent down payment -- $36,000 -- but Stevens only _put down-$5,000,_the motion says.
- - ----- - --- _'1'\5
_ ___ ~ ~ }1 ",(4-'-!fNd3G~?o~~-- ~ ---:- - -~ - - -~I
The development company was on~escribed as "Company B." One of Company B's partners was "Person C," a
personal ~end of the Stevens, thV'ernment said.
. . 0
Rattler than require Stevens to put down the normal amount, Person C fronted the $31,000 in an interest-free
Joan that he paid to an escrow company "for the benefit of 'Theodore and Catherine Stevens,' " the government
said.

There was evidence that the Stevenses never intended to live in the condo but merely saw it as a qUick way to
turn a buck, the document says.

On Aug. 21, 2001, Person C wrote Stevens that the deal was about to turn out "as I told you." Though the condo
was still unbuilt, Company B had just accepted an offer on Stevens' garden apartment for $515,000 -- the same
one Stevens were offered for $360,000 six months earlier. The buyer would assume Stevens' liabilities.

It was after that buyout that the Stevens' repaid Person C for the $31,000 loan, sending a $15,000 check on
Sept. 12, 2001 and a $16,000 check on Dec. 11, 2001.

The government said Stevens was required to disclose any loan over $10,000 during 2001, but failed when it
came to the condo loan.
t

'~Although
Stevens knowingly carried debt on a $31,OOQ interest-free loan from his personal friend for more than
10 months duri~g 2001, Stevens did not list such a liability ~n his 2001 disclosure form/' the government said.

JEEP CHEROKEE

The vehicle transaction in 2005 follows up an earlier one in 1999 that is referenced in Stevens' indictment. In the
first deal, Stevens was looking for a car for his daughter, Lily, then 18. He was accused of not reporting the trade
of a 35-year-old Mustang worth $20,000, plus $5,000 cash, for a new Land Rover Discovery bought by Allen
worth $44,000 -- for a net benefit of around $20,000.

By 2005, Lily Stevens needed a new car, the government said in its filing Thursday. So Stevens returned to the
original source: Allen.

"Allen offered to get Stevens' daughter a new car in exchange for the 1999 Land Rover, and Stevens agreed," the
government said.

This time, the SUV would be a new Jeep Grand Cherokee. The deal was made between Stevens' daughter and a
Veco employee "for the purpose of hiding Allen's involvement in the transaction." Allen wrote a personal check to
the employee for $35,000, who bought the Jeep July 15, 2005, for a little more than $34,000 from a dealer.

Veco shipped the car to Seattle, paid the employee to fly to Seattle, pick up the car, and deliver it to Berkeley,
Calif. Lily Stevens earned her law degree at the University of California at Berkeley, according to her wedding
announcem-ent in May. •

Lily Stevens paid the Veco employee $13,000 plus her old car, valued at ~bout $9,000, for the $34,000 Jeep, the
government said. FBI - Stevens-2015

I
PHOENIX JOB
I

I - In March 2006, after the government had begun tapping Allen's phones, Stevens asked-a-Iobbyist to ask Allen for
a job in Phoenix for one of his three sons. The son was unnamed, but Walter Stevens, a multimedia management
spec;ialist, lived in Phoenix, at least in the 1990s.

In a recorded conversation, the unidentified lobbyist told Allen, "I saw (Sen. Stevens) at lunch and he asked if
you -- I'm lnot sure why he mentioned it to me -- but he asked me to, I think, find out if you had any business
contacts in Phoenix with respect to his son who is down there, who finds himself without a job at this point." The
lobbyist said Stevens mentioned Allen by name.

Allen ordered company-officials to find a jobfor-the.son in Alaska in the summer of2006;-the government said.
"Stevens' son accepted the position with Veco and also received a personal loan from Allen."
-- - - - _ . - - - - - - - - - - - - -----=------- --------~- --
GAS LINE
_J ,,~ e . ,
0
In anotbeF filing Thursday, this one in response to Stevens' assertion of his immunity as a congressman, the
government said Stevens' activities went well beyond his legislative role and should not be protected. One
example prosecutors cited was Stevens'pushing for state legislation on a proposed natural gas pipeline sought for
years by Veco. .

Stevens used his official position to try to get the state Legislature to approve construction of a gas line during
the 2006 legislative session, the new filing says -- a session already. shown to be tainted by corruption.

Between January and June 2006, the FBI secretly recorded telephone calls between Allen, Stevens, his legislative
staff and his son, then-state Senate President Ben Stevens. They discussed the gas line, then-Gov. Frank
Murkowski's negotiations with oil producers and legislation, the filing says. In one call, Stevens promised Allen he
would "whittle down" the federal permitting and reviews, the document says.

In a call on June 25, 2006, Stevens and Allen talked about hearings coming up before a state Senate committee
on which Ben Stevens served. Prosecutors say Stevens told Allen he was working with his s.on.

"I'ni gonna try to see if I, can get some bigwigs from back here to go up there and say, 'Look, uh, you just gotta
make up your mind, you g~tta get this done. There's no politics in it, there's necessity in it for the Federal
government,' Stevens told Allen, according to the filing.
II .

He asked how he could help Allen, and said he was going to try to get the Secretary of En~~gy and head of the
Federal Energy Regulatory Commission to Alaska regarding the need to act on the pipeline, prosecutors contend.

On July h 2006, Stevens traveled to Alaska and addressed the Senate cOl)1mittee, "urging it to cease infighting
and pass the,pipeline legislation before Iiguified natural gas monopolizes the marketplace," prosecutors ~ay.

Three days later, the Federal ~nergy Regulatory Commission issued a report with a similar message.

Daily News reporters Lisa Demer and Erika Bolstad contributed to this report. Find Richard Mauer online at
~dn.c.omLc.9nt~Lcjf.rm<!.u_eLor call 257-4345.

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FBI - Stevens-2016

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Anchorage Daily News

Stevens' defense team says case unconstitutional


TOO VAGUE: Lawyers ask judge to throw out charges that senator accepted money.
By ERiKA BOLSTAD
ebolstad@adn.com
(08/15/0802:04:56)

WASHINGTON -- Lawyers for Sen. Ted Stevens attacked the Justice Department case against him as
unconstitutional and asked a judge on Thursday to throw out charges the Alaska Republican accepted thousands
of dollars of home repairs and gifts and lied about them on his financial disclosure forms. .

Stevens' lawyers argued in motions flied Thursday that the charges against the 84-year-ol~ senator are vague,
that they violate laws on the statute of limitations and that they breach constitutional barriers meant to keep
executive branch inv~stigators from meddling in congressional affairs.

His lawyers also complained that although Stevens is not charged with bribery, the first count of the indictment
includes "blatantly inflammatory" language that suggests he accepted gifts and renovations from Veco Corp. in
exchange for legislative favors for the former Alaska-based oil services company. Jurors should not see that
language, !lis lawyers said in one of their motions. .

"The gratuitous suggestion of a qUid pro quo relationship would only serve to inflame the jLiry and create unfair
prejUdice against Senator Stevens," his lawyer, Robert Cary wrote.

.Stevens'
. -
lawyers submitted seven motions on Thursday, the deadline for filings
\
in an expedited trial schedule
granted at Stevens' request, so his case can be heard before the Nov. 4 election.

U.S. District Court Judge Emmet Sullivan will hold a hearing Wednesday to decide whether to move Stevens' trial
to Ataska. If the trial stays in Washington, jury selection is expected to begin, Sept. 22. The trial would begin two
day~ later.

Even as his lawyers prepare to def~nd s.tevens in court, he continues to campaign in Alaska for the Aug 26
Republican primarY.
.
Stevens'
- campaign
- -
-
on Thursday unveiled
, three teleVision commercials that will begin airing
throughout Alaska.

SEPARATION OF POWERS

In their motions, Stevens' lawyers raised"particular concerns about the first count of the indictment, which
sug'gested Stevens accepted gifts in exchange for helping Ve~o with federal legislative business.

His lawyers argued that a grand jury could have issued such an indictment only if it were shown evidence that
Violates what's known as the speech or debate clause -- a portion of the U.S. Constitution that limits what sort of
evidence executive branch· investigators can use when they probe acts by members of Congress. If a grand jury
heard evidence protected under the speech or debate clause, "the indictment in this case should be dismissed,"
Stevens' lawyers wrote. FBI - Stevens-201?

Investigators may have overstepped their authority by interviewing Stevens' past and current legislative staffers,
the senator's lawyers suggested ..

"Even if those staffers did not themselves testify before the grand jury, it is equally problematic if FBI agents
summarized testimony about protected information to the grand jury," his lawyers wrote.

In a similar vein, they argued that the indictment violated the separation of powers clause of the Constitution.
The alleged false state-ments and omissions that Stevens made in the financial disclosure forms are a matter for
the U.S. Senate to take up~ not executjve ~ranc;]1 inv~~tigato[~,. his lawyers argu.ed.. _ 1·Q t\:
'-- (~'1~~+-~~~~'Z.Q--~-_ - - - - -~-- - -
In several other motions, Stevens' lawyers accused prosecutors of being ~py ~nd imprecise about the charges
he faces. l.:~~ indictment accused Qvens of failing to disclose the receipV certain "things of value," his lawyers
wrot€'"(~ ~ .

"Yet the in~ictment does not describe the alleged falsity or concealment with any degree of specificity," they
wrote, calling it "fatal to the indictment."

"ALLEGATIONS ARE INSUFFICIENT"

Stevens' lawyers ask for prosecutors to file more detailed charges that specify the things of value mentioned in
the indictment, as well as the labor costs of Veco employees and contractors who worked on renovations in 2000
that doubled the size of Stevens' house.

They also want more specifics on the cost of materials that prosecutors allege weren't included in the invoices
sent to Stevens.

The motion also,suggests that the indictment doesn't adequately specify what sort of requests Veco employees
made of Stevens when they asked him to use his official opinion to help the company.

"These allegations are insufficient, as a matter of law, to provide Senator Stevens with fair notice of the charges
against him or to ensure that the grand jury properly returned an indictment in this matter," they wrote. "He is
constitutionally owed a statement of the specific charges against him, a requirement not satisfied by it recitation
of facts followed by general allegations."

The gifts Stevens is charged with accepting from 1999 to 2006 came during a renovation that doubled the size of
the Girdwood home he owns with his Wife, Catherine.

Veco employees and contractors performed architectural design services, put the house on stilts and installed a
new three-bedroom first floor,a finished basement, a garage, a Viking gas range and a wraparound deck,
,according to the indictment. . . .

Stevens paid a construction firm for its work, but the indictment accuses him of failing to fully reimburse Veco or
its,contractors -- even as he stayed closely involved in the progress of the work. 'Stevens has said he paid
$130,000 of the construction costs. .

Stevens' lawyers also argued Tl:tursday i.n ~heir motions that some of the charges he faces are outside of the
statue of limitations.

During the investigation, Stevens agreed to a statute of limitations that dat~s to May 9, 2002. Yet his lawyers
pointed out that the indictment alleges a scheme to conceal gifts by filing false disclosure forms that include the
calendar years 1999 and 2000. .

Sullivan will hear all motions in the case Sept. 10.

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FBI - Stevens-201B

Copyright @ Fri Aug 15 08:47:39 UTe-0800 2008190~ The Anchorage Dally News (www.adn.com)

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Anchorage Daily News

Evidence overwhelms Stevens lawyers


HELP: Defense team scrambling to sift through glut of legal materi~l.
By ERIKA BOLSTAD
ebolstad@adn.com
(08/14/0801:42:34)

WASHINGTON -- Lawyers for Sen. Ted Stevens, facing a stepped-up trial schedule, asked for help Wednesday
trying td make sense of more than 67,000 documents and 2,800 audio files that could end up as evidence
against him.

Prosecutors and lawyers for Stevens had a brief hearing Wednesday afternoon to decide how to handle discovery
materials the Justice Department is handing over to Stevens' defense team. That includes recordings of roughly
10,000 phone conversations.

Stevens, 84, faces a Sept. 24 trial on charges he knowingly took home repairs and gifts worth more than
$250,000 from the oil field services company, Veco Corp., and failed to report them on his annual U.S. Senate
disclosure forms. Next week, a judge wi,lI decide whether to grant Stevens' request to move the trial to Alaska.

Wednesday, one of Stevens' lawyers, Alex Romain, asked the government to provide more detail about 67,000
pages of documents they scanned electronically and handed over to the defense. Some of the documents don't
show where they begin and end, the defense complained. Those documents include bank records, spreadsheets
and evidence that was seized from Veco Corp. computers. .

Veco CEO Bill Allen and Richard Smith, a former vice president of community affairs and government relations for
the now-defunct company, pleaded guilty in May 2007 to making more than $400,000 in corrupt payments to
Alaska public offic.ials.

Allen's testimony has been key in other convictions in the ongoing public corruption investigation, which to date
has led to charges against 11 lawmakers, lobbyists and pusinessmen. Eight have been convicted or pleaded
gUi,lty. Three lawmakers, including ~t~vens, are awaiting trial.

Stevens' lawyers on Wednesday also asked to have better labeling on approximately 2,800 audio files, and the
government agreed to be mor~ forthcoming about who is calling or who is receiving the call, and when it was
made. The audio files include wiretaps of both cell phones and land lines, Stevens' lawyers said Wednesday.

The defense also wants "surveillance logs" used by investigators to determine when calls began and ended and
who is on the line.

With all the discovery materials, prosecutors said they would work with the defense to try to provide more
information. FBI - Stevens-2019

DISPUTES IN THE OPEN

The fast-moving trial calendar, sped up so Stevens could face a jury before the general election, means that
some of the tug-of-war that generally goes on behind the scenes in criminal trials is playing out in the courtroom.

They're the kind of issues that could generally be handled over the telephone, said U.S. District Court JUdge
Emmet Sullivan. In this case, though, Sullivan said he is anxious to be as transparent as possible because of the
high-profile nature of the trial and the intense media scrutiny.

When necessary, Sullivan said, he'll hold a hearing, but the speed of the case means that lawyers need to settl~
some of their disputes over potential evidence among themselves. /1'e..t.ti---4-....J ,..(~~<:V\ - 7q 5
"-I'm going to make myself available," he-warned the aefense and prosecu~ion~"but ~iS is an-.!s.=ue ~e~~esolv~d_~_
- - ------- ~=--=-----~-----------
by the att()rneys. II

If the·ca~~~emains
in WaShington9c., jury selection is scheduled to be~
Sept. 22, two days before the trial.
lawyersrolf both the defense and the prosecution. have asked to submit questionnaires to the jurors, so they can
review them and base their selection on their answers. .

Questionnaires are rarely used, Sullivan said, so he asked the lawyers to make plans to photocopy 30 to 40
copies of the answers submitted by· the estimated 150 jurors in the Initial pool. The" copies will be needed for
members of the I~gal teams.

PRETRIAL PUBLICITY

Meanwhile, Stevens' lawyers submitted a second brief Wednesday in support of their motion to move the trial to
Alaska. In it·they argued that holciing the trial in Alaska is "the only way.to permit Senator Stevens even a minor
role in his reelection campaign." Stevens, a Republican who h~s held his Senate seat since 1968 and has been
campaigning in Alaska, has attended only one of his court appearances since his indictment.

His attorneys continued to argue that most of the witnesses are in Alaska, as is one of the pieces of evidence in
the case: Stevens' home in Girdwood.

Stevens' lawyers also dismissed concerns by the Justice Department prosecutors that moving the trial to Alaska -
- while the senator campaigns there -- could taint the jury pool.

Stevens has "received positive and negative publicityJn Alaska and in the District of Columbia," his lawyers
wrote. "This publicity can be expected-to continue in,both venues during the trial. In either venue, the effects of
pre-tri~1 publicity can be addressed during jury, selection while the effects of publicity during trial can be
addressed by appropriate instructions to the jury."

Prosecutors ,argued ill a l'Dotic;>n filed -Monday that they believe the case is fundamentally a Washington, D.C.-
based one, since the case centers' on' disciosure form's'Stevens filed with the U.S. Senate.

.Find Erika Bolstad online at stdn.c9mLc9nta_cJLe_b_olsJ:.~td.or call her in Washington, D.C., at 202-383-6104.

CoPV.rlght @ Frl Aug 15 08:48:57 UTC-08PO 20081900 The Anchorage Dally News (www.adn.com)

FBI - Stevens-2020
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Alaska Politics
Potential questions for
This is the place to talk about Alaska
jurors in Stevens case politics _. state, local, national. Public life in
the Last Frontier may never have been
Posted by Alaska_Politics . more interesting than right now' .- the
Posted: August 19, 2008 - 2:13 pm broad and still-evolving corruption
investigation, a big election, a popular
From Richard Mauer in Anchorage ••
governor, powerful members of Congress
What potential Washington, D.C., jurors know about Alaska, under scrutiny, and the usual hardball
Alaska politics. Come here for news, tidbits
what they think about the oil industry, and whether they have
and information, and join the discussion.
reservations about sending an 84-year-old man to jail are all Keep your comments civil and on point.
questions on propos~d juror.questionnaires submitted for Avoid personal attacks. Do not use
review Monday in U.S. Sen. Ted Stevens' felony disclosure profanity. Posts that violate the Terms
of Use will be deleted. Repeat .
case. offenders will be banned.
Prosecutors and Stevens' defense attorney filed three separate
lists of questions to U.S. District Court Judge Emmet SU'lIlvan Alaska's Top Jc
- one they agreed on, and separate additions (government Contributors
here and defense here) they hoped to convince the judge to Health Care Servjc
Kyle Hopkins
Nurse Practition
use. Kyle Hopkins writes about Anchorage city
Providence Health
government and politics. He coverea last year's
Sullivan said he expects to begin seating a jury in Washington campaign for governor, and has brogged Aviation
on Sep. 22 - though Stevens is still hoping to move the trial extensively about Alaska politics for the past year. Loadmaster/.Ma 1
to Alaska, where undoubtedly the questions to potential jurors HE! grE!w up to Southeast Alaska and was ,a Lynden Air Cargo
reporter at the Fairbanks Daily News·Miner and
would be quite different. Anchorage Press. E-mail Kyle at Accounting/Bankir
khopkins@adn.com Cost' Price Analy
Anyone who's served on a jury will be familiar with most of the Bering Straits Na~
noncontroversial, joint questions: where do y60,work, do you
Human/Social Ser
know anyone in the courtroom, have you ever been convicted Behavioral Spec
of a crime, can you spare the time to sit in a courtroom (for Sean Cockerham Hope Comm~nity
four weeks), do you understand the presumption of innocence, Sean Cockerbarn writes about Alaska state legal
afforded any defendant? politics. He spent tllree years based in Juneau for Investigator
the Daily News berore joining the Tacoma News- Alaska Human Rig
But there were also questions unique to this case: have you Tribune two years ago to write about Washington
state politics. He went to Iraq twice for the News
ever had a vexing experience with home remodeling? Ever
Tribune, and previously wrote about Alaska
refuse to pay a contractor because the work was lousy? Both government and politics for the Fairbanks Daily Search J(
sides want to know, presumably because the renovations to News-Miner. Now he's back in Anchorage. e-mail
Stevens' Girdwood home starting in 2000 by the oil-field Sean at scockerham@adn.com Homes By REII
service company Veco are central to the case. The
government, in its seven-count indictment, alleged Stevens Light & Bright
like new 2 story ho
failed to disclose work and furnishing provided by Veco and its Erika Bolstad 3BR, 2.SBA, detach
chairman, Bill Allen. Erika Bolstad covers Alaska issues. including the. gar 'n Chugiak. $25
congressional delegation. from Washington, D.C.•
Several joint questions seek to find out if potential jurors are for McClatchy Newspapers. Before joining the
political active or read about politics, especially the insider bureau this summer, she spent seven years as a
Capitol Hill publications. Do they listen to talk radio, read reporter at the Miami Herald. where she covered
politics. government and the state legislature.. E-.
politicaJ blogs or go to Internet forums? The government, in mail E;rika at ebolstad@adn.com.
particular, wants to know if they read the conservative Drudge
Report or the liberal Huffington Post online.
Stev~ns' lawyers want to know wha~d of i~pression the
potential jurors have of Alaska in geUl. 'Their answers" by Archive Q
tlie#/

w-av, may provide a clue about the harm to Alaska of all Stevens: "You're damn right I can take Search ADN
the coverage - some Involving Stevens - of our famed care of myself.-" - 8/20/20081:00 am
Realtol
"Bridges to Nowhere," other earmarks and the corruption Judge could decide today whether'to try
investigation. -Stevens in Alaska· 8120/?008 5:36 am
Top Rentals
Stevens' lawyers are seeking permission to ask a similar "Captain Zero" ,,8119120086:18 pm
questiol1 about their impressions of Congress in general. Bailey put on leave - 8119120084:33 pm Admirals Cove
Potential questiol)S for jurors in Stevens East Anchorage: Th
The government wants to know if the IRS has ever gone after luxury apartment"
case ·8119120082:13 pm located In scenic Ar
them, in particular for the error of a spouse or tax preparer. Alaska!
'Running' (Updated) • 8/1812008 8~26 pm
.And then there are these proposed questions, also from the Vickers breaks out checkbook
government: In your course of employment/business,' have - 8/18/?008 3:04 pm
you ever given a gift to a vendor? In your course of Palin & Halcro interviews -81181200810:14 am
employment/business have you ever recelveCl a gift from Wall to wall· 811812008.7:06 am
another·business entity?
Is McCain rethinking his anti-ANWR drilling
And finally, the government wants to know whether Stevens' position? - 8/1612008 8:23 am
age would prejudice the outcome: "Would you have any "We come here for the edge, and we love Advance
difficulty finding an 84-year-old guilty of a crime if you knew the edge. But this is ridiculous."
~ 8/1612008 7:52 am
that a conviction might result in a prison term?" Top Autos
NO subpoenas for now· 8115/2008 8:00 pm _..... _.
-~- .

A hearing will be held at 11 a.m. Washington time tomorrow The campaign money race - 8/15120086:06 pm t~
on Stevens' request to move the trial to Alaska.
Palin interview - !!'15I2oo811:04 am
New information filed in Stevens case
See Today's Mortgage Rates ·8114120087:13 PIl\ -
Calculate Your New Mortgage Payment. See Rates-
No Credit Check Req. "Alaska Troopergate" • 8/1412008 2:00 pm
www.LowerMyBills.coro Motions flying in the Stevens_case
_(Updated with the motions themselves)
-8114120081;1:45 pm
No Time for School? Graduate Online
'Hi, this is Steve BranchfJower'
Get a Degree In as Few -as 2 Yrs- Graduate Faster -8/141200612:41 pm
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Raw feed: Palin (Updated)
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Get Your AA, BA, Masters or PhD at a Top Online
School. Start Now. - "Namely, specifically, most disturbing, is a
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• 6/13120069:36 pm .
Ads by Yahool The Bailey, phone call· 8/1312006 4:28 pm
full arch ive »
add new comment

14 August 19. 2008. ~1:36pm Jjacander


you make me sick
After all Senator Stevens has done, you Ingrates want to tear him down? Alaska wouldn't even be a state
without him--show some respect. he hasn't done anything wrong, so grow a backbone and defend him.
reply I flag this ,.
FBI - Steven 5- 2022
August 20. 2008 • 12:34am I zerocut
~HUH?-You talkin'-to-me? -
Stevens hasn't denied receiving any of th~ under-the-table "freebies" from Veco. His only ~omment
on the matter, so far, is that he "paid eveiy bill that was sent to him".

Did Steven's have acontract with Veco or Allen? (Don't think so! ... that would leave a paper trail).
Did Steven's ever question Allen or Veco as to why they were doing all that "free" work ... or that
they were doing it without being asked? (Don't think so ..... that would imply that he was aware of
the "gifts" h~ wasn't reporting).

Why-didn't Stevens justreportthe.gif!s?_ (Hl.Imm_mmm._m ()n)t's f?ce! the whole thing looks like
~dntJ'~t?teve~' lawye.. accuse P5eCutors of:smeat' Page 1 of3

p- •
'0
adn.com I Print Page II, Close Window I
Anchorage Daily News

Stevens' lawyers "accuse prosecu~ors of 'smear'


FILINGS: Defense says feds insinuate bribery despite no such charge against senator.
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
(08/26/0803:12:56)

Lawyers for Ted Stevens accused prosecutors Monday of attempting to unfairly try Alaska's senior U.S. senator
n~xt month by introducing "irrelevant and.prejudicial evidence" that has nothing to do with the disclosure
violations he's charge with.
,~(.h.l
,Defense attorney Robert Cary asserted that new issues raised by the government "in its unnecessary public
filing" nine days earlier have no place in the trial, scheduled to begin Sept. 22 in Washington, D.C.

I~Instead, they are an obvious attempt to smear the senator's character," Cary wrote.

Among those issues was an undisclosed $31,000 loan by a developer to Stevens in Q001 that let him turn a
$5,000 investment in an unbuilt Florida condo into a $100,OOO'profit, and a discount of more than $10,000 on a
Jeep obtained by the oil field services company Veeo for Stevens' adult daughter Lily in 2005.

And in another filing on Monday, Cary served notice on the government that he might attempt to question former
'!Ieeo ,chairman,.~i!1 Allen" t.he government's ,chief witness, about an Anchorage Police Department investigation of
him. Cary didn't provide details, but the Daily News and other media reported that Anchorage,police investigated
Allen for sexual abuse of a minor from allegations involving a girl who Was under 16. That investigation came up
in a closed-door hearing in the 'bribery trial of a state legislator in Anchqrage last year in which Allen was the lead
witness, but the jUry never heard the allegations.
viol.:.
.da2'~·said the government brought up the matter in a sealed motion in which it sought a ruling that any such
(Gross-examination of Allen would be "inflammatory and impermissible" under court procedure. Cary said the
government's"motion'itself was inappro'p'fiafely filea under'seal. - -, - . _." - ---

The defense filings came amid a blizzard of motions and'responses filed by both sides Monday in U.s. District
Court in Washington, the day before Stevens faces six challengers in today's Republican 'primary. The pretrial'
jockeying by the two sides is an effort to use the law, court procedures and the Constitution to their advantage
as the structure of the tria! takes shape.

U.S. District Court Judge ~mmet Sullivan has agreed to hear the case on an expedited basis to improve Stevens'
chances of a verdict before the general election Nov. 4.

Stevens insists he's innocent'and wiU be exonerated by a jury.


FBI - Stevens-2023

In one of his filings, Stevens argued that the government was unfairly trying to bring in evidence of bribery when
1.~*"C:!s only charging St,evens with failing to report more than $250,000 in gifts, mostly from Allen and Veco. _
- " "'..
... - - - -- - -- - - - - - '--- - - -- - -- -

·'~t utter illogic of the government's position reveals what is really going on," Cary wrote. "The government
-wl~nes to smuggle in suggestions of briqery.and q>rruption that i~ has not charged and cannot prove. The
indictment alleges no quid pro qUe:> for any gifts Sen. Stevens allegedly receiv,ed, but the government now asks
permission to introduce evidence of officiai actions in order to invite the jUry baselessly to infer just such a qUid
pro quo."

"PUBLIC SCRUTINY AND CRITICISM"


- - ,/

http;l!www.adn.comltbilv-printerlstoryISQS663.html 11~+-¥-(~6?O-~
,~.~-~----- ~-- -'-,-'
8/26/2008
f)
.adn.com f>tevens' lawyers accuse p~ecutors of 'smear' Q' Page 2 of 3
Foftheir part, prosecutors'lashed ~k at that argument. Prosecutors said ~l1e
evidence is crucial to establishing
motive. T.tle information it wants to-show the jury also details the close relationship between Stevens and Allen,
who had ready acc~ss to Stevens over the phone, in e-mail and in person. •

Their job iS'to show that Stevens "knowingly and intentionally" lied on his disclosure forms,_prosecutors wrote. To
do that, they need to prove a motive.

-~i6secutors argued in their motions that if Stevens had reported the gifts they accuse him of accepting but failing
Jo_~r,~port,
he would have faced questions that could have drawn media scrutiny as well as ethics complaints and a
~ossible
, ' ouster from office. '

He wanted to avoid "the negative conseque-nces flowing from such disclosure, particl!larly during a time frame
when the defendant had been engaged in performing offJcial acts for Veco and Bill Allen," prosecutors wrote.

In other words, it was necessary for him to hide how close he was to 'Allen, prosecutors said, because he "would
have subjected himself to public scrutiny and criticism regarding his ongoing rela'tionship with Veco and Bill Allen,
and the fact that he was laboring under a cOl1f1ict of interest."

"Most importantly, disclosure of the things of value and the negative repercussions flowing from that disclosl,Jre
would have threatened the defendant's future stream of things of value from Veco, Bill Allen and, others."
, ~ .

Prosecutors also countered arguments that the charges against Stevens aren't specific enough. Stevens '''cannot
credibly claim that he cannot understand the charges or prepare his defense," government lawyers wrote,
·.b~~.ause they are "exceptionally detailed."
·Prp.';)
';i:i1e,V,lcite one example: "Where the indictment charges that Stevens- received things of value at the Girdwood
I~giaence, the Ingictment sp.ecifically notes that the 'renov~tion work included jacking_ up and resting the house
on stilts, building a new first floor with two bedrooms ilnda'bathroom, renovating tne eXisting residence, and
adding a garage with workshop and'a seco'nd-story wraparound deck. 1II •

Also, while Stevens is entitled to know what charges he faces, prosecutors wrote that he is not owed an
explanation of "each and every detail of how (the case) will be prov~d."

They also dispute Stevens' claim that the indictment violated provisions of the Constitution's Speech or Debate
clause,-which bars the government prosecutors:from using speeches'and'iegislatiohintro-duced'b-y members of
Congress as eVidence. Prosecutors said that evidence protected by legislative immunity granted by tlie
Constitution was not shown to the grand jury that ultimately indicted Stevens.' -

"1he prosecutors who were involved in the grand jury proceedings are nof aware·of any evidence introduced to
.the grand jUry that reflects an act taken by Stevens, such as bills or statements on the floor of the Se/Jate, that
\~Qyld be considered protected. legislative activity."
t /lJf·

J;~~?~ Stevens'-c1aim that under the Constitution it's up to the Senate to police itself when it comes.to disclosure
fOles, prosecutors counter that the case "dOes not involve enforcement of internal Senate rules."
FBI - Stevens-2024
"It involves enforcement of an unambiguous rule contained ·in the criminal law: do not lie when r~quired by. law to
provide honest disclosure of assets." That was a law Congress-itself passed.

- "!STEVENS DID·NOTHING-IMPROPER"

On the matter of the evidence involving the Florida loan, the Jeep and other issues, Stevens' lawyers argued that
it would prejudice the jUry. In the case of the Florida loan in particular, "Sen. Stevens did nothing improper,"
Cary, his attorney, wrote.

The Jeep deal "is a misgUided attempt to impugn Sen. Stevens and his family before the jury," Cary argued.

in. its earli~r filings, the government inciuded excerpts of two e-mails Stevens sent to his friend Bob P~rsons, the
i :~tJ{. _ _. _._ . - ~

i:- ·~.~~Wfwww.adn.com/fb~v-printer/stOry/5_05663.html_ _ __ _ , ' _'_ _ _ 8/26/2008


:~9Jl.·c0mQ..Stevens'lawyers accuse p~ecutors of 'smear' n Page 3 of3
ip9ii}l~ Musky restaurateur in GirdWod. The government said Stevens w~cting guilty in those e-mails. The
~~.~.!=erpts.eited by the government suggested Stevens was asking Persons to be less than candid before a grand
;j'ury.

Persons kept an eye on Veco's renovations to Stevens' home in Girdwood starting in 2000, the majority of the
alleged unreported Veco gifts in Stevens' indictment.

Cary submitted two entire e-mails, which h~ said showed them to be inno~uous.

In one, dated May 17, 2007, Stevens advisesPersons to get his own attorney involved. Apparently Persons was
afraid of an indictment himself, and Stevens .said he needed a lawyer.

In the second e-mail, sent six hours after the first, Stevens again stressed tl]e important of legal counsel.

"If they know, you have legal advice, they will be more careful," Stevens said.
~"

~l~cns also prOVided some advice about how Persons should proceed.
dr./
~A'gain,don't let them rattle you and don't answer questions you don't know the answers to," Stevens said. "They
have lots of info from Bill," Stevens said, a likely reference to Bill Allen.

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FBI - Stevens-2025

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Anchorage Daily News

Stevens' lawyers want to block phone evidence


CORRUPTION CASE: Senator's team tries to get evidence tossed.
By ERIKA BOLSTAD
eb9Istad@adn.com
(09/03/0801:36:16)

WASHINGTON --'Lawyers for Sen. Ted Stevens signaled Tuesday they'll try to keep jurors from hearing as many
as 105 phone calls the FBI recorded as part of the investigation that led to the 84-year-old Alaska Republican's
indictment on corruption charges. -

The phone calls appear to be among the thousands of hours of secretly recorded phone taps and video
surveillance that have helped prosecutors land seven convictions and guilty pleas in the sweeping multiyear
probe of corruption in Alaska politics. In at least one of the cases, jurors said the recordings -- which showcase
crude talk and salty exchanges between lobbyists and state lawn:takers -- were key to their guilty verdict.

The senator goes to trial Sept. 24 on seven counts of lying on his annual financial disclosure reports about gifts
and home repairs he allegedly received from an oil services company and its CEO, Bill Allen. A judge granted an
expedited trial so that Stevens could face ajury before the Nov. 4 election. Stevens, who won a Republican
prfim"lry last: week, faces Anc~orage Mayor Mark Begich, a Democrat, in the general eleCtion.

Mis lawy.ers on Tuesday continued to shore up their d~fense of the senator, filing motions that criticized
prosecutors for a vaguely written indictment and for insinuating that Stevens took bribes. The governmerit
IIbDviously wishes to import ~hestench of a bribery prosecution into a case that is nothing of th~ sort,1I wrote
Stevens' lawyers.

Stevens' lawyers complained in documents t.hat prosecutors dumpe9)nore than 400 hours of video" al"!d audio
evidence on them last month, but little of it was related to Stevens. Only, 105 ~f the 2,800 Intercepted phone
calls feature Stevens, his lawyers wrote in motions filed Tuesday.

-Th_ey-qlso.~aid .the-J!Jsti<;~,Department
didn't specifically name the senator as_a'~targetedJnter:ceptee" inJhe
affidavits they submitted to a court seeking permission for wiretaps. As a result, they may to seek to keep a jury
from hearing those recordings, one of his lawyers, Robert Cary, wrote in motions filed Tuesday. They're asking
for detailed logs that show the government made every effort to 'avoid recording noncriminal conversations a'nd
people who wefefl't named in orders authorizing the wiretaps.

FLORIDA DEAL TIE-IN

Last we~k, his lawyers accused prosecutors' of unfairly introducing "irrelevant ana prejudicial eVidence" that has
nothing to do with the disclosure violations he-faces.
FBI - Stevens-2D26.
His attorneys are referring to how prosecutors revealed that a friend loaned Stevens $31,000 in,2001 that let him
turn a $5,000, investment i11 an unbuilt Florida condo into a $103,000 profit. He faces no charges in connection
with the allegation; .
-- -

'However, prosecutors argued Tuesday in their own motions that they intend to introduce the information at trial
because it is directly. related to charges he faces in connection with repairs to his home in Girdwood. Stevens took
out a line of credit on his Girdwood home to pay for \teco repairs, prosecutors said.
.' .
They said they'll be showing that even as Allen 'and Veco helped Stevens by "doing fre.e work on the Girdwood
residence," another friend helped defray the home repair expenses the senator paid to non-Veco workers by d
"providi~g .him '"Yith a virtually-no-risk real estate investment that cove!"ed Stev~ns' line of credit." . _ ~ b C\.
- -
; . Jhe ,informa,tioQ_q~9u_qh~."no-risk"Flgric.J9real eS~.§lte_ ~eal is "r.e!ev~nt tq _~~t(,!.9Ush_tng $t~Y~lJs'~n()wJ~q,g~ and
,q l(fl-~A-r'''''' l3GJl<>-1Vl <z..-
~~ .
int:ll~ .(QJc~ing"'his personal invOl1ents and financial sta.tus," prosecuo wrote.

SPEECH-OR-DEBATE CONFLICTS

Stevens' lawyers on Tuesday also continued to press their case for throwing out the indictment based on the
speech-or-debate clause of the U.S. Constitution, which bars the government,prosecutors from using speeches
and legislation introduced by members of Congress as evidence. Prosecutors said that evidence protected by
legislative .immunity granted by the Constitution was not shown to the grand jury that ultimately indicted
Stevens. . - -

But Stevens' lawyers said they believe the grand jurors did see protected material, and. they've asked for
permission to review transcripts of what prosecutors presented in the secret sessions.

That would mirror what government lawyers have done in the Rep. William Jefferson case, Stevens' lawyers said
in their motions. Jefferson, a Louisiana Democrat, faces bribery charges. In Jefferson's case, his lawyers were
given permission to review grand jury testimony of the congressman's legislative aides to determine whether
there are speech or debate conflicts. A judge reviewed the remaining transcripts for conflicts.

Prosecutors continued to maintain in their filings that that the evidence of "official or political actions" by Stevens
will "be limited to su'ch routinely admissible categories as constituent services or communication with government
agencies." .

U.S. District Court judge Emmet Sullivan will hear all of the pretrial motions next week. Sullivan has already
ruled that the trial will,stay in Washington D.C. instead of moving to Alaska.

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FBI - Stevens- 2027

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Anchorage Daily News

FBI taped more than 100 Stevens calls

By MATT APUZZO
The Associated Press
(09/02/08·13:37:29)

WASHINGTON - FBI agents taped more than 100 phone conversations involving Sen. Ted Stevens as part of their
public corruption investigation, Stevens' attorneys said today.

The-FBI's trove of secretly recorded conversations has already been the highlight of trials in Alaska, but the size
of its cqllection against Stevens has until now been unclear. The sometimes-graphic conversations between hard-
drinking o-i1 contractors and corrupt Alaska politicians helped the Justice Department send three state politicians
to prison.

The calls involving Stevens could be played in court this month when the Senate's longest-serving Republican
stands trial on charges of lying about hundreds of thousands of dollars in home renovations and other gifts he
received from an oil contractor.

The FBI did not tap Stevens' phone but did tap several phones belonging to contractors In the case. Out of 2,800
intercepted phone conversations, Stevens was recorded 105 times, his attorneys wrote in court documents.

Though Stevens is not charged with bribery, prosecutors want jurors to hear about a close relationship with
Stevens and Veco founder Bill Allen. They want to portray Allen as an influence-buyer with a direct line into
Stevens' offic~. Phone conversations between the two men could help that case.

His attorneys began laying the groundwork for a future argument that those calls should not be admitted into'
evidence. FBI agents can only tape conversations related to people or topics named.in a warrant. The Justice
Department did not name Stevens as a wiretapping target, his attorneys wrote, "yet it appears to have targeted
his phone call~,"

Stevens' attorneys object to the government's pla-n to present evidence that Stevens not only accepted gifts and
services from Veco but also used his Senate seat to help the company's interests.

"The government obviously wishes to import the stench of a bribery prosecution into a case that is nothing of the
sort," attorney Robert M. Cary wrote.

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FBI - Stevens- 2028


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Anchorage Daily News

US Senate has final' say if Stevens is convicted


CONSTITUTION: Only a two-thirds majority vote can expel a sitting me~b~r.

By STEVE QUINN
The Associated Press
(09/01/0801:49:51)

If Ted Stevens is convicted in his federal trial next month, his name will still appear as the .Republican candidate
for Senate on Alaska's November election ballot..

And if the 84-year-old Stevens then wins his seventh full term and refuses to resign, it could farrto his colleagues
to decid~ whether he should, be expelled.

"Once the jury has rendered a'verdict, the Senate has a constitutional right to consider the qualifications of the
member/, said Don Ritchie, an associate Senate historian.

It would take a two-thirds vote of the Senate to expel Stevens.

No sitting senator has been removed in 146 years. The last was-Indiana Sen. Jesse Bright in 1862.

Others facing expulsion, like Oregon Sen. Bob Packwood in 1995, resigneq before the Senate took a vote.

Stevens, whose'trial starts Sept. '22 in Washington, D.C., said it won't come anywhere near that.-

He will not discuss stepping down, withdrawing from the race or qu,itting the Senate. His plans are simply to first
win in court, and then at the polls. .

"Put this . down: That will never happen -- ever, OK?" Stevens said. "I am not stepping down. I'm going to run
through'and I'm going to win this election. .
,"
"Th'e coury: case is going to go on. 'Whether- it's finished or not, I'm still going-to run for re-election, OK?"

Federal prosecutors allege Stevens failed to disclose more than $250,000 in home renovations and gifts from
executives at oil services contractor Veco Corp.' .

Stevens, the Senate's.longest-serving Republican, has pleaded not guilty.

Ritchie said fellow seflators usually do not intervene while elections or court c~ses are pending.

"They've always waited until the legal process is complete and voters had their say," he said. "Once they're
elected, the only judge of qualifications to serve is the U.S. Senate."

Stevens satisfieq voters. from his party Tuesday, capturing 63 percent of the vote and defeating six opponents.

After winning his primary, Stevens quickly proclaimed the Nov. 4 election a "piece of cake."

Stevens faces a staunch opponent in November, Anchorage Mayor Mark Begich, who is popular and has the
backing of the national DemocratiqJarty. FBI - Stevens-2029

Begich will seemingly have the state to himself to campaign while Stevens is on trial in late September and early
October. OiD
I3egich in Hie campaign so 'far has avoided 'calling attention-to~he corruption charges, saying he. believes
/6
=~~========:-~_====::::::r1=f.(;:=;4:4:~-;;-_A/.~""~(,;;H~'2;;;o=---~~~,---,--,------,--=----===e.-,--,--------=, ~__ !
A!ask;Qs wiH vote for him, not necnarily against Stevens.
Y;J "I Q.
"What people want to talk about are issues of energy, of health care and of taxes. That's where I'm going to go,"
Begich said.

Steven$ has attempted to paint Begich as a liberal aligning with interest outside the state, including "extreme
environmentalists." .

If Stevens is re-elected after a conviction but then resigns from the Senate or is expelled, Alaska Gov. Sarah
Palin would. be required to call a special election.

,That's a relatively new provision in state law, driven when former U.S. Sen. Frank Murkowski won the
gubernatorial race in 2002 and then appointed his daughter, Lisa Murkowski, to his seat.

Alaska residents were upset with what they saw as nepotism. A voter initiative ended gubernatorial appointments
to vacancies in 2004, the same year Murkowski successfully won her first full term in the S~nate by defeating
former Gov. Tony Knowles.

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FBI - Stevens-2030
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Anchorage Daily News

Stevens lawyer seeks access to evidence

By RICHARD MAUER
(09/09/08 15:55:06)

An attorney defending Sen. Ted Stevens against felony disclosure charges argued in a filing today that the
government's failure to provide an advance look at evidence risks jeopardizing the, fast-approaching trial.

In a motion to compel the government to turnover the material, Robert Cary; accused prosecutors'of "dilatory
tactics" that could jeopardize Stevens' right to a fair trial.

The case is being heard in Washington, D.C., where Stevens files his annual financial disclosures. He's charged
with seven counts of i'ntentionally submitting false ones over the years by omitting gifts and benefits worth more
than $250,000 from friends and favor-seekers, chief among them Bill Allen, th~ former chairman of the oil-field
services company Veco.

U.S. District Court Judge Emmet ~ullivan has schequled a heari'1g tomorrow on at le?st a half-dozen significant
issues that have arisen over'the last month, including the motion filed today.

Though the motion was filed Tuesday, it was dated S,ept. 2, a week earlier. Cary didn't respond to an e-mail
message seeking clarification. .

: Cary' argued that Supreme Court decisions protecting defendant'rights require the government to turn over
evidence in its possession that could show Stevens wasn't guilty of the crimes charged. The defense also
demanded information that could be used to impeach government witnesses.

For instance,' Cary, demanded the government provide any information involvifl9 a state investigation of Bill Allen
for sexual abuse of a minor.

The'Deiily News reporte~ in' F§!Qruary, that !n 2004, Anchorage polic,einvestigated whether Bill Allen had sex in the
1990s Y"itli a girl wno was under 16, a felony without a statute of limitations. The case was closed at,the request,
of federal prosecutors when the girl, by then an adult, 'had become the chief witness in federal case involving a
sex-and-cocaine ring. A federal prosecutor told the Daily News last year that he feared the police would become
distracted by pursuing Allen, jeopardizing the drug and sex case already at hand~

Anchorage police reopened their investiga~ion in December, then suspended it when witnesses couldn't be
located.

In his filing, Cary demanded the government provide details about "the pendency of any investigation (into
sexual abuse by Allen), whether it was quashed, why it was quashed, and when it was quashed," because all that
is relevant to Allen's credibility.' FBI - St~vens-2031

"His cooperation with the government, and the n~tur.e of his, testimony,may well be:driven by-a belief; wlietner - --
, justified.or not; that his as'sistarice to'the government would guarantee him immunity or leniency in the state
investigation," Cary wrote. " .

Cary'also alleged the government knows about a "purportedly false affidavit" signed by David Anderson, :BiII
. Allen's'nephew and an expected witness. The affidavit, submitted in an unrelated case, contains a claim by
Anderson th'at "the government has provided him and his friends and family with a broad grant of immunity in
exchange for his testimony in this case." '

A'1derson hC!s ~old reporters thathe was one the. k~y ."YQr:!<.ers sent byAllen.!o fenovate·ary,d.furnish Ted Stevens'
.. home in Girdw,ood.starting in 2000. Aridersonlal:e'fnad a major falling-out with Allen over a girlfriend and other
. . ~, _~-~-~_ . _-, ~--''''14-''''04~;;;;''?~''70-:';-.;;0-~'--=--g.-O''1-
.;
issuesra~? ft,.lIen was quest.ioned ~g a trial last year whether he want~o kill Anderson. Allen denied it..
'/~ Y V
Cary also demanded any plea agreements the government may have entered into with Anderson and another
Veco worker on the Stevens home project, Rocky Williams. In an earlier filing, the Stevens defense team
acknowledged being told by the government there were no such deals. But they questioned whether there were
informal understandings.

Cary also challenged audio tapes made of intercepted phone calls of Sen. Stevens. He said that if Stevens wasn't
the. designated target in wiretap authorizations signed by a judge, the evidence contained in them should be
suppressed. But the government has so far failed to provide the necessary information about the recorded
conversations to make that'determination, he said -

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FBI - Stevens-2032
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Anchorage Daily News

Judge rejects move to dismiss Stevens charges

By ERIKE BOLSTAD
(09/10/08 13:59:,45)

WASHINGTON .-- All the bluster about "dilatory" tactics aside, it looks as though Sen. Ted Stevens will go to trial
in two weeks, as scheduled and in the midst of his re-election bid.

Lawyers for the Alaska Republican tried but failed Wednesday to have the corruption case thrown out on grounds
it is unconstitutional and that some counts in the indictment were outside the statute of limitations. '

Stevens, 84, faces seven felony counts of knowingly taking home repairs and gifts worth more than $250,000
from the oil field services company Veco Corp. and failing to report them on his annual U.S. Senate disclosure
forms.

Jury selection is scheduled to begin Sept. 22.

U.S, District Court Judge Emmet Sullivan ruled against most of the motions filed by Stevens' lawyers, including
one that would have stricken language in the indictment that suggests he accepted gifts and renovations from
Veco in exchange for legislative favors for the company.

Sullivan is expected to issue additional rulings on two key is'sues leading up to the trial. He will determine
whether evidence in the case violates constitutional separations that keep lawmakers from being prosecuted for
their legislative actions in the halls of Congress. He'll also rule,on whether prosecutors can introduce a wide array
of other evidence to boost their case, including showing that Stevens hid a $31,000 loan from a friend and then
parlayed it into·$129,250 in real estate gains, '

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FBI - Stevens-2033
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Anchorage.Daily News

Stevens' alleged gift list grows


EVIDENCE: $'l,OOO'sled dog among items not disclosed by senator, prosecution says.
By RICHARD MAUER
.rmauer@adn.com
(09/08/0823:53:41)

Federal prosecutors revealed more evidence Monday in their case' against U.S. Sen. Ted Ste'(ens, detailing a new
round of gifts that he allegedly failed
,
to disclose .between 2001
,
and 2003.

In a filing in U.S. District Court in Washington, D.C., the government listed the items as a $1,000 sled dog, a
$3,200 stained:-glass window and a $2,695 massage chair. They are In addition to the $250,000-plus in labor and
materials allegedly prOVided by the oil-fieid service company Veco Corp. when it renovated and furnished .
Stevens' Girdwood home starting in 2QOO.

Monday'S filings from each side asked U.S. District Judge Emmet Sullivan to adopt its version of the case to be
read to prospective jurors when they gather in two weeks for Stevens' trial in Washington, D.C. The statement of
the case is supposed to be a neutral rendition of the issues at trial, but each side clearly jockey~d for advantage.

Sullivan may choose one or the other, or draft his own version, steering somewhere between the advocates, who
also submitted competing
,
jury instructions Monday In advance of the trial. '
,

II') a separate motion, St~vens' at~orneys qs!<ed Sullivan to order the release of the medical records of Bill Allen,
the'71-year~old former chairman of Veco, who' suffered 'a head injUry in a, motorcycle' accidenfln'2:o6i. Alieni
who pleaded guilty to bribing state legislators and who is expected to be'the chief witness against Stevens, said
in testimony In state court last year that he had trouble speaking because of the accident, though he could think
clearly.

Stevens' attorneys disclosed they had sought a voluntary authorization from Allen to allow them to inspect his
medical records at Providence Alaska Medical Center in Anchorage and at ucLA Health Systems in Los Angeles,
where,he~was.treated by.a neurologist and .neurosurgeon. Allen's, lawyer, Bob Bundy,turned-tnem.down.

Stevens has contended he is innocent and will be vindicated by a jUry. He has asked for a speedy trial, hoping a
verdict in·his favor would be rendered before the November election. Stevens, the longest serving Republican
senator, is seeking his seventh full term; h~ faces Anchorage Mayor. Mark Begich, a Democrat, on Nov. 4.

The governm'ent took a half-page in their document to describe the Girdwood renovations, telling how a floor was
added to Stevens' home along with:a wrap-around deck, new rooms,
and major' eiectricai and plumbing work.

D~FENSE DISMISSES NEW LIST


FBI - Stevens-2034
In their version of the statement of the case, Stevens' lawyers devoted only a seven-word phrase in a single
sentence to the renovations. They used more words for the newly reported items, but spoke dismissively of .
~em. .

"The government further alleges that.Sen. Stevens knowingly and willfully failed to report an alleged gift of
stained glass, knowingly and willfully failed to report an alleged gift of a dog, and knowingly and willfully failed to
report an alleged gift of a chair/, Stevens' attorneys ,wrote. '

The chair wasn't just,a chait, the g,overnment said, but a $2,695 massage chair given to Stevens 'by a friend I)...
identified only as "Person A.. II The chair was placed in Stevens' home in Washington, it said., .- ~ OJ
The stained glass wasn't just stained glass either. It was a ":hand-designed, hand-constructed stained glass
window buH~,to specificat!ons,pn>vided,by,ttle defendant,and, his ~pouse,.but.paid: for.'bY ~Person,B',and .given to
(et "\A- -/.TN~(36''Z,,-~ <2-
I. St~ven~i'n ~001." o
~.

And the dog wasn't just a mutt from the pound. It was an expensive sled dog Stevens got from "Person B" in
2003. The government alleg'ed Stevens misrepresented the dog as a $250 gift from the nonprofi~ Kenai River
Sportfishing Association, a group closely associated with his friend, Bob Penney. In his 2'003 9isclosure, Stevens
said the dog was "an honorary award in recognition of public service" and that he had purchased its twlnJor
$250.

In asking for authority to subpoena Allen's'.medical records, Stevens' attorneys said that "understanding the
scope and severity of Allen's brain injury is highly significant to the preparation of the defense."

Citing his testimony in the trials of two legislators that resulted in convictions, the attorneys added, "History has
shown that, when Allen is called as a government Witness, the government typically begins by eliciting his
testimony that he was involved in a motorcycle accIdent in 2001 that impacted his speech, but otherwise left his
brain function unaffected. The defense is certainly entitled to test the accuracy of Allen's account and. determine
whether Allen's memory or ability to perceive were impacted when 'abput a quarter' of Allen's brain 'died' In the
accident," they said, using Allen's own descriptions of his injuries.

Find Richard Mauer online at ~dn.c.9mLcontact/.r:!!1aueror call 257-4345.

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FBI - Stevens-2035

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Ancnbrage Daily News

Stevens lawyers protest delays


EVIDENCE: Defense says tactics could jeopardize fair~ess.

By RICHARD MAUER
rmauer@adn.com
(09/10/0801:34:35)

An attorney defending U.S. Sen. Ted Stevens against federal charges argued Tuesday that the government's
failure to provide an advance look at evidence risks jeopardizing the fast-approaching trial.

In a motion to compel the government to turn over the material, Robert Cary accused prosecutors of "dilatory
tactics" that could jeopardize Stevens' right to a fair trial.

'But the government, which is prosecuting Stevens in Washington, D.C., on seven counts of filing false annual
financial disclosures, dismissed the defense claims as being "without merit."

U.S. District judge Emm~t Sullivan has scheduled a hearing today on at least a half-dozen significant issues that
have arisen over the last month, including the motion filed Tuesday. Stevens' trial is set to start with jury
selection on Sept. 22 and is expected to last about a month.

Under that. schedule, th~ trial would end just a week or so before election day, Nov. 4, when Stevens, the
Senate's longest serving Republican, is standing for his seventh full term against Anchorage Mayor Mark Begich,
a Democrat.

Stevens is accused of intentionally failing to disclose gifts and benefits worth more than $250,000 from friends
and favor-seekers, chief among them Bill Allen, the former chairman of th.e oil-field services company Veco Corp.
Allen has pleaded guilty to bribing Alaska legislators and will be one of the government's chief witnesses against
Stevens.

ALLEN INVESTIGATION

In his filing, Cary argued that the governrrfent's obligation to turn over evidence that would be favorable to
Stevens -- or damaging to the YJitnesses against him -- should include information about an Anchorage
investigation of Allen for sexual abuse of a minor.

The Daily News reported in February that in 2004, Anchorag~ police investigated whether Allen had sex in the
1990s with a girl who was under 16.. The case was closed at the request of federal prosecutors, when the girl, by
then an adult, had become the chief witness in a .federal case involVing a sex-and-cocaine ring. One of the feder:aI
prosecutors told the Daily News last year that he had-feared the police working on the federal investigation would
_become distracted by pursuing Allen, jeopardizing the drug and sex cas.e already at 'ffild.= Stevens-2036

Anchorage police reopened their investigation in December, then suspended it when witnesses couldn't be
located.

-Cary demanded the government provide details about "the pendency of any investigation (into sexual abuse -by -
Allen), whether it was quashed, why it was quashed, and when it was quashed," because all that is relevant to
Allen's credibility.

"His cooperation with the government, and the nature of his testimony, may. well be driven by a belief, whether
justified or not, that his assistance to the government would guarantee him immunity or leniency in the state
investigation," Cary wrote. . .~ ~o 4
But in its reply to Cary, filed shortly after 6:30 p.m. in Washington by Brenda Morris, principal deputy chief of the
Justice Department's Pub(Jc'IntegritySection, the government argu~dthat the sexual abuse-case shouldn't be
. - __' l1':1-~N-"U.?a..~ . __ Q ~
used to ~~p.each Allen. at the trial.a 0
"As thE!"Court knows/ the government has sought to limit cross-examination of Bill Allen concerning matters that
are hjghly inflammatory and prejudicial to the government/, she said. Nevertheless/ the government has already
provided some limited information about Allen to the defense/ and the defense could have read about the matter
in-the newspaper/ Morris said.

'FALSE AFFIDAVIT

Cary also alleged the government knows about a "purportedly false affidavit" signed by David Anderson, Bill
Allen's nephew and an expected witness against Stevens. The affidavit/ submitted in an unrelated case/ contains
a claim by Anderson that "the government has provided him and his friends and family with a broad grant of
immunity in exchange for his testimony in this case."

Anderson has told reporters that he was one of the key workers sent by Allen to renovate and furnish Stevens'
home in Girdwood starting in 2000. Anderson later had a major falling-out with Allen over a'girlfriend and other
issues, and Allen was questioned during a trial last year whether he wanted to kill Anderson. Allen denied it.

Cary also demanded any plea agreements the government may have entered into with Anderson and another
Veco worker on the Stevens home project/ Rocky Williams•. In an earlier filing/ the Stevens defense team
acknowledged being told by the government there were no such de,als. But the defense questioned whether there
were informal understandings.

Morris sai9 there wer~ none, and the defense knew it.

"Defendant's decision to petition the Court to compel production of nonexistent materials Is an abuse of process
and should be denied," she wrote. .

Cary also chall~nged audio tapes made'of intercepted phone calls of Stevens. He said that if Stevens wasn't the
designated target in wiretap authoriza~ions signed by a judge, the evidence contained in them should be
suppressed. But the government has so far failed to provide the necessary information about the recorded
conversations to "Jake that determination, he said.

Morris said the government provided everything that was required by law. And she ridiculed a demand by the
defense that the government turn over data that would identify each photograph taken in Stevens' house during
a government raid last summer.

"In support of this argument, defendant appears to claim that he can only understand, and thus make use of,
these photographs if he has a log identifying what thos~ photographs are," sh~ wrote. "But these photographs
are not murky, covert snapshots of an unknown crime scene; rather, they are photographs of the.defendant's
house. Again/ defendant is clutching at straws."

With its 22-page response, the government also filed 68 pages of letters and e-mails between prosecutors and
defense attorneys concerning the exchange of evidence. In one, there's a reference to videos taken from
cameras hidden in a kitchen and a living room, though there was no explanation.

That reference appeared to indicate the existence of previously undisclosed FBI surveillance cameras. Video from
inside Veco's suite at the Baranof hotel in Juneau played a significant role in convicting two state legislators last
year of taking bribes from Allen. '

FBI - Stevens-2037

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Anchorage Daily News

Judge orders Stevens prosecutor$ to simplify evidence

By ERIKA BOLSTAD
(09/12/08 15:45:31)

WASHINGTON - Sen. Ted Stevens' legal team complained that government lawyers had given'them unwieldy
electronic versions of more than 15,000 potential pieces of evidence in the Alaska Republican's corruption trial.

Now they'll be flooded with paper.

A federal judge today ordered that government lawyers turn over nearly everything on paper so Stevens' lawyers
can have it in a more work~ble format this weekend in time to prep'are for the senator's Sept. 24 trial.

"You'd have the same complaints if they gave you that information (in the same way), the same complaints,"
U.S. District Judge Emmet Sullivan told Justice Department prosecutors Friday, during an emergency hearing
called just a few hours,before it began.

Stevens, 84,.faces seven felony counts of knowingly taking home repairs-and gifts worth-more than $250,000
from the now-defunct oil-services company Veco Corp. and failing to report them on his annual Senate disclosure
forms. ,Jury· selection is set to begin Sept. 22 and the trial is scheduled to begin ~yvo' days later.

In their m_o~ion, Jiled this morning, Stevens' lawyers Alex Romain and, Robert Cary:complalned that the
goy-ernment's "ganiesmimship and 'hide-the-ball tactics' undermine the fairness of the upcoming trial."

Their specific complaint was that the government produced 15,038 pages without "load files," ,the electronic
equivalent of staples, pap~r clips and folders. There's no way to differentiate where one document begins arid
ends, Stevens' lawyers said.
\
They also were ~oncerned that some elec,tronic fj!~s_ wer~ "19,~k~9,:' \VbJ.ctllll.~an_s t.11~Y fa.')lloJ_search, tt!.em ,
a
electronically. To find a s-pecific document in l,608~page ~Ies!ro_nic file taKen from Y~co_ computers, they must
read the whOle tning b-ecause they cannot search-it eiectronically by key word.

Prosecutors were clearly frustrated with Stevens' lawyers, although they stopped short of using the
"gamesmanship" language employed by the defense te'am. His lawyers' concerns' could all have been addressed
without
. the emergency hearing,
-
argued Brenda
-
Morris, the lead federal prosecutor. '
.
"Just because he has 'U.S. Senator' before 'his name doesn't mean we have to drink out of a fire hose every time
they call us/' she said.

Not so fast, scolded Sullivan, who just prior to the Stevens' hearing heard a petition from a Guaotanamo detainee
who had been on a hunger strike for three years and whose lawyers were trying to wrest their client's medical
records from-the government. Stevens is getting the same deference all defendants get in his courtroom, Sullivan
saio, although the senator's request for speedy trial before the' election has moved things at a brisker pace than
, ,-most criminal trials. -- - - -- - ---

"This defendant's not being treated any differently than anyone else," Sullivan said._ "No other cases have been
moved. I wouldn't 'do that for anyone. I wouldn't do that for anyone because of their status."

But Sullivan seemed to be slightly annoyed, too.·On Wednesday, he told the lawyers to work out their disputes
among themselves and not bother him with trivial quarrels over evidence, and told them h'e wished they'd tried ?.
harder to avoid such hearings. 'b Q "/
FBI - Stevens-2038 ~

- -- -------------- --------------=-'-
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He was1e~",;,sy'mpathetic to a requr.-\by Stevens' lawyers to receive deta~ eVidence about when investigators
questioned certain witnesses. TheUno precedent for them receiving wh\.Are known as "form 302's,"· .
documeMs that detail the information gleaned by FBI agents when they interview witnesses, including the time
and place. They've already given Stevens' lawyers a list that has much of that information, Morris said.

"Yet another example


, of drinking out of that fire hose,"
"
she said.

Stevens' lawyers indicated that when Sullivan holds a hearing next week to discuss what eVidence will be allowed
at trial, they will work to exclude some photographic eVidence. They've asked for the "metadata" on thousands of
photos taken the day FBI and IRS agents raided Stevens' home in Girdyvood.

They plan to have an expert who has written a textbook on crime scene photography explain how certain camera
angles and lenses could make the home appear larger than it actually is, Cary said, describing it as a "small log
cabin."

Isn't it a "chalet?" asked Sullivan.

"It's a chalet, but it's modest," Cary said.

"We didn't call it a chalet; they called it a chalet," Morris said, adding that investigators "didn't take pictures to
make it look better." .

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FBI - Stevens-2039

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adn.com I Stevens loses attempt to have trial thrown out Page 1 of 1
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'~n.chorage Daily News


"::: :,~. -t ..
Stevens loses attempt to have trial thrown out

The Associated Press


(09/16/0813:52:37)

WASHINGTON, D.C. -- Alaska Sen. Ted Stevens has lost a final attempt to get his upcoming corruption trial
thrown out.

U.S. District Judge Emmet Sullivan ruled that the trial will start next week, with jury selection beginning Monday.

Stevens is charged with lying on Senate records abqut gifts and home renovations from Veco Corp., an oil
pipeline services company. Stevens, who is running for re-election, has pleaded not guilty and wants the trial
finished by Election Day..
~

Sfevens' lawyers had argued that the whole case is based on information related to his work as an Alaska
seF'!a.tor. They also said the government wants to introduce evidence that would require Stevens to talk about his
s:iftGlal work to defend himself. .
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Copyright @ Tue Sep 16 13:58:19 UTC-0800 20081900 T!le Anchorage Daily News (www.adn.com)

FBI - Stevens-2040

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Anchorage Daily News

Stevens court case still on, judge decides


RULING: Selection of jury begins Monday after final hearing.
By ERIKA 'BOLSTAD
ebolstad@adn.com
(09/17/0801:54:51)
t.
IWASHINGTON -- Sen. Ted Stevens won't be able to argue that evidence in the federal corruption case against
hirrrviolates constitutional separations that keep lawmakers from being prosecuted for their legislative actions in
the hMls
["
of
-
Congress.
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A federal judge on Tuesday turned down his lawyers' request to throw out the seven-count indictment against the
senator, and he said in a hearing that if evidence arises at trial that looks as though it violates what is known as
the speech-or-debate clause of the Constitution, he will consider barring it. '

But it was Stevens' lawyers' job to show he's entitled to immunity under the speech or debate clause aJ:\d they
failed to do so, said U.S. District Court Judge Emmet Sullivan. Previously, the senator's lawyers had suggested
that investigators could have overstepped their authority by interviewing Stevens' past and current legislative
staffers . - - -- -

Sullivan reviewed grand jury transcripts-to determine whether witnesses were asked, questions that would have
violated the _speecll or debate clause"which limits what sort of evidence executive branch investigators can use
when they probe acts'by-members of Congress. He said'he saw-a handful, but-it-was "in no'way p-ervasive."

J~~evens, in the mid~t of a re-election,bid, didn't attend the court hearing Tuesday~ However, he was in
\Vast)ingtbn D.C., in the Capitol. The 84-year-old,Alaska Republican faces Anchorage Mayor Mark Begich, a
rferri8crat;'in the Nov. 4 election.
'-,I'

Stevens faces seven 'felony counts alleging ,he knOWingly took home repairs and gifts worth more than $isO,ooo
from- thenow-defunct·oil-services=company-Veco·.Corp. and, Bill Allen, its- former CEO. Pros_ecutors .said_ that Allen,
who pleaded guilty to -bribing state lawmakers-in Alaska, is expected to be one of the first.witnesses in the case
against Stevens.

, Sullivan also said Tuesday he would allow evidence from prosecutors that details what Stevens did in his role as
.an officE?holder to help Veco. They include evidence he helped the company. land federal contracts and grants,
evidence he tried to influence the state in its efforts to build a natural 'gas pipeline, and communication between
his office and ~he company. -

Sullivan did tell prosecutors that they have until today to turn over redacted versions of what are known as "form
302s," the documents that detail the information gleaned by FBI agents when they interview witnesses, including
-.the time and place and what they unearth~d from their questions. FBI - Stevens-2041
::-\~

Tf{er:e,:are',hundreds of the forms, warned one of the prosecutors, Edward Sullivan. Allen alone "has been spoken
fOfrn.any;.many- times," Sullivan said. __ __, _ _. _ _ , _ _ __ _ _
,H
.
Tuesday's hearing was an effort to resolve disp~ted evidence before the trial; Sullivan cautioned th~t he wanted
as many of the questions settled before the trial as possible so they don't bog down its progress.

"This process has to be a meaningful one," Sullivan said. "I don't want to start this thing and still be doing it New
Year's Day." - ~O I
Sullivan will take up the remaining issues Thursday in the final pretrial hearing before th~ trial. Jury selection
-http://www.adn.cominews/politics/fbilstevens!v-pririte-ristOry/528512Jitml ,q '1+-f).,I\I-l '16 7.;) _ N\ - 9/171200~_
adn.com j Stevens court case still on)j"Udge decides Page 2 of2
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begins\Monday; the trial is set to J n two days later.

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Anc~orage Daily News

Lawyers a,rgue over wiretaps in stevens case

By RICHARD MAUER & ERIKA BOLSTAD


A~chorage Daily New~
(09/18/08 15: 10:27)

WASHINGTON - Defense and prosecutors in Sen. Ted Stevens' criminal disclosure case wrangled today over the
admissibility of a wiretapped conversation in which two of Stevens' friends spoke of his aversion to ope'ning his
own wallet. . .

"Ted gets hysterical when he has to spend his own money," Alaska restaurateur Robert Persons told the former
chairman of oil-field services company Veco Corp., Bill Allen, in a conversation overheard by the FBI and quoted
in court by a prosecutor. '

Persons, founder of the Double Musky Inn restaurant In Girdwood, told Allen there was a reason for Stevens'
relu<:tance: the senator "can'~ really afford to pay a bunch of money," he said. .

a
The prosecutor, assistant U.S. Attorney James Goeke of Anchorage, didn't cite date for that conversation, no~
was
I
it directly connected
• •
to Veco'~ Dig remodeling pr9ject at Stev.ens' home in Girdwood.
Ji.nl:,.
~9.S~,~~, t!1~ qmversatil?n was about a.n ir}-"estm_en~ by the. thr,e~ men. and o~h~rs in a partnership that. owned a
lh'qrgughOred. But the government.says it illustrated a consistent pattern of behavior reflected in Stevens' seven-
count indictment. Stevens' defense says the conversation, .and others the'government is seeking to play to a
JUrY, is irrelevant and prejudicial. -

The government has accu~ed Stevens of taking ,more than $250,000 in labor, materials and furnishfngs from
'Veco and Allen starting in 2000, then failing'to report the gifts on his annual Senate disclosures. His trial will
begin Monday in Washington with at least two days of jury selection.

Allen has pleaded guilty to bribing state legislators and is expected to be a key wi.tness against Stevens. 'p'ersons
has testified before a federal grand jUry under subpoena but has expressed reluctance to speak ill of Stevens,
whom he still·considers a friend. Persons lives above his Gir'dwood restaurant and routinely kept an eye on
Stevens' home when Stevens and his Wife, ~atherine, were in Washington.

The open-co~rtroom conference Thursday before U.S. District Court Judge Emmet Sullivan was called to allow
defense and prosecution to bring up unresolved'issues of evidence, law and procedure. Sullivan decided some
g~~~tions but left 'others for the trial itself. FBI - Stevens-2043
R9th~.-
~m(M~1i rUled that the defense was entitled to review the medical records of Allen's 2001 motorcycle acCident,
Wlien he'suffered a serious head injury. Allen, testifying last year in Anchorage at the trials of two state
'fegislators, said the accident impaired his speech but not his memory or intellectual ability. Sullivan ordered both
,sides to respect Allen's privacy and n,ot disclose anything publicly until he rules whether the medical information
is relevant·. - - - -- . - _. . -- _. - - - .. ,-- - - -

Also for reasons of privacy, Sullivan said, the government shouldn't enter ~s evidence all 2,200 pages of Stevens' ,
personal financial information,. inclUding credit card receipts. The government said the records would show that
Stevens never paid Veco for the items it purchased for him,but Sullivan said the government should find another
way to prove that. '

The Persons-Allen phone call was among eight recorded conversations of third-party conversations that the
defense sought to keep from the jUry. Defense attorney ~obert !=ary characterized the call as "triple hearsay;' as

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-Stevens, Persons, Allen, Allen's son Mark and six other friends created a company called Alaska's Great Eagle LLC
'hl';2004 to own race horses. Persons, who managed the partnership, was concerned about having to ask the
o~tl~rs for more investment money.
sUn!,1 ,. .-.
:j-J1it~flOther call, Washington lobbyist Richard Ladd told Allen that Stevens had asked him to call to see if he could
'get a job for one of Stevens' sons.

The FBI began tapping Allen's phones in 2005 during the covert stage of its investigation of public corruption in
Alaska. The investigation became public in a series of raids in August 2006. Among the targets was the legislative
office of Ted Stevens' son Ben, then the president of the Alaska State Senate.

Sullivan again addressed Stevens' protections under the Constitution's Speech-or-Debate Clause, which prevents
prosecutions for normal legislative activities. Sullivan ha'd earlier rejected a bid by Stevens to dismiss his
indictment under the clause, but on Thursday said it still could bar the government from introducing some
evidence. He told the defense it could make objections each night based on expected evidence to be introduced
the next day of trial.

Copyright © Thu Sep 18 15:20:35 UTC-0800 20081900 The Anc:h~rage Daily News (www.adn.c:om)

,- -
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FBI - Stevens-2044

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I: a~;i!~JUdge's rulings le~ towar~vacy Page lof2
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a,on.COIn Print Page I[ Close 'Window]

}\n~hora$e Daily News

Judge's rulings lean toward privacy


STEVENS: Sides dispute use of credit card records, Allen motorcycle injuries in trial.
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
(09/19/0804:11:09)

WASHINGTON -- Defense lawyers anq prosecutors in Sen. Ted Stevens' criminal disclosure case wrangled over
the admissibility of a wiretapped conversation Thursday where two of Stevens' friends spoke of his aversion'to
opening his own wallet.

"Ted gets hysterical when he has to spend his own money," Alaska restaurateur Robert Persons told Bill Allen, the
former chairman of oil field services company Veco Corp., in a conversation overheard by the' FBI and quoted in
court by a, prosecutor. i
.fC~ t,,-
~'~d~Sr'~(Qunder of Girdwood's Double Musky restau;ant, told Allen there was a reason for Stevens' reluctance:
The Senator "can't really afford to pay a bunch of money," he said.
. -

The prosecutor, assistant U.S. Attorney James Goeke of Anchorage, didn't cite a date for that conversation, nor
was it dir~ctly connected to Veco's remodeling project a,t Stevens' home'in Girdwood.

Instead, the conversation was about an investmel'Jt by th~ three fDefl and others in a partnership that owned a
thoroughbred race horse. But the government says it'illustrated a'consistent p,attern of behavior reflected· In
Stevens' seven-count indictment. Stevens' defense says the conversation, and others the governm~nt, is seeking
to play to a jury, is irrelevant and prejudicial.

The government has accused Stevens of taking mQre than $250,000 in labor, materials and furnishings from'
Veco and Allen starting in 2000, and then failing to report the gifts on his annual Sen,ate disclosures. His trial
begins Monday in Washington with at least two days of jury selection.

A!J~l'f has pleaded gUilty to bribing state legislators and is expected to be a key ·witness against Stevens. ·Persons
h1rs';~:~stified before a federal grand jury under subpoena but has expressed reluctance to sp~ak ill of Stevens,
wtlo'(hNiels~ill considers a friend. Persons lives above his Girdwood restaurant and routinely kept an eye on
~t'e\1ens"home when Stevens and his wife, Catherine, were in Washington.

PRIVACY ISSUES

The open-courtroom ,conference Thursday before U.S. District Court Judge Emmet.Sullivan was called to allow
defense and prosecution to bring up unresolved issues of eVidence, 'law and procedui=%I~~t¥!~~q8~g some
questions but left others, including that of the tapes, for the trial itself.

Sullivan ruled that the 'defense was entitled to review the medical records of Allen's 2001 motorcycle accident,
when he suffered a serious head injury. Allen, testifying 'Iast year in Anchorage at the trials of two state
- legislators, said the accident impaired his speech but not.his-memory- orintellectuaLability. Sullivan ordered both
sides to respect Allen's privacy and not disclose anything publicly until he rules whether the medical information
is relevant.

Al~~Hor reasons of privacy, Sullivan said the government shouldn't enter as evidence all 2,200 pages of Stevens'
p'~r5b'nal;fjnancial information, including credit card receipts. The government said the records would show that
st'e"~~ns never paid Veco for the items it purchased for him, but Sullivan said the government should find-another
0~~.:to prove that. '- . <; 0 '1
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{~\J.C~~ I·Judge's rulIngs lean towa~~pvacy Page 2 of2
The'Persons-Allen phone call was Ung eight recorded conversations oDd-party conversations that the
defense sought to keep from the jury. Defense attorney Robert Cary characterized the call as "triple hearsay" as
it related to Stevens. ' -

Stevens, Persons, Allen, Allen's son Mark and six other friends created a company called Alaska's Great Eagle LLC
in 2004 to own race horses. Persons, who managed the partnership, was concerned about having to ask the
others for more investment money.

In another call, Washington lobbyist Richard ladd told Allen that Stevens had asked him to call to see if he could
get a job for one of Steyens' sons. .

The FBI began tapping Allen's phones in 2005 during the covert stage of its investigation of public corruption in
Alaska. The investigation became public in a series of raids in August 2006. Among the targets was the legislative
~~fffc~ of Ted Stevens' son Ben, then the president of the Alaska State Senate. .
,'~;V, ~ I
1~i;;...
~.41!1yan again addressed Stevens' protections under the Constitution's Speech-or-Debate Clause, which prevents
p?osecution for normal legislative activities. Sullivan had earlier rejected a bid by Stevens to dismiss his
indictment under the clause, but on Thursday said it still could bar the government from introducing some
evidence. He told the defense it could make objections each night based on expected evidence to be introduced
the next day of trial.

------ --------------

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C.oPY~ight © Fri Sep 19 08:49:30 UTe-0800 20081900 The Anchorage Daily News (www.adn.com)
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Anchorage Daily News

Stevens wants to testify at his trial'


BUSY TIME: Alaska senator discusses state projects, economy before heading b~ck to D.C.•
By KYLE HOPKINS
khopkins@adn.com
(09/20/0804:02:17)

Sen. Ted Stevens said he intends to testify at his federal corruption trial, which begins with jury selection
Monday, but he said .the final decision will be up to his lawyers. .

Stevens spoke briefly.about the trial with reporters Friday in Anchorage whi,le talking about defense spending in
Alaska, the tanking economy and his plans for the next two months. .

The Republican senator is running for re-election even as he's scheduled to defend himself against seven federal
counts of failing to report gifts from th~ Veco Corp. He said he plans to return to A!aska several times In October,
but he will have to be back in D.C. a'day before scheduled court appearances..

The coming we~k will be a busy one for Congress, he said. "I intend to go from the court to the Senate and be
there every afternoon, evening."

Ste.vens listed several' Alaska projects in the defense spending bill now before Congress, including:

• $10 million to plan for a "coal-to-Iiqtlids facility" at E'ielson Air Force Base. The idea is.to convert coal into
aviation fuel. - '"

• $16 million for a "C-17 assault'landing zone" at.Fort Greely. Stevens said the landing zone would be.used by
the cargo aircraft in emergencies. .

• $10 million to "continue the modernization and expansion" of-the Port of Anchorage,

The Hill, a Washington newspaper, reported this week that Stevens topped the list of Senators with the most
earmarks-in the defense appropriations bill with a total of about $215 million in spending. - - -

Tne Republican presidential candidate, Sen. John McCain, and running mate Gov. Sarah Palin, have criticized
some earmarks on the campaign trail. But Stevens defended the military spending in Alaska -- it's been part of
his campaign message -- as nece~sary and forward-thinking. .

"Six of the seven largest armies in the world are in fact Pacific nations. We are going to see a buildup in this state
to keep us prepared to deal with the contingencies of this century," he said.
• ?
Stevens spent much of the press conference on the larger p~litical story this week. _.: the teetering global
economy.
FBI - Stevens-2047
- "I think we're on-the-precipice of-a meltdown," he-said.__

As the Bush admjnistration announced plans for a massive bailout that would see the federal government taking
over worthless mortgages and bad debt, Stevens said questions of what to do with the economy has the potential
. to engulf Congress. - ' .
. .
,
He said he'd recen~ly participated in a teleconference with Treasury Secretary Henry Paulson, who described the
Bush administration's plans. Stevens said he expected,the pla-n to be controversial but that Paulson "fairly well
_ convinced me this situation has reached the poin~ whereyou'either do something now, or wait for sometl;ling
." -worse.'" . .' _ . - S! 0
___ ~~. •[1f111--4-N-tJ62o.... ~
- - --- ===-====.:::::::===~~ -"-' -_._--~--~---_. .<2- .L
---~- - -----

At\eh.,9f.Q~eiMayorMark Begich, St~s' Democratic opponent in the Nov.nlection, said.Friday ~hat the
country's economic woes can be tr~d to the door of Congress and its la~f oversight.

"Now we're in a crisis mode, and I'm glad to see it seems on the surface they're going to work in a bi-partisan
way to hit this issue head on," Begich said. -

"But because they waited so long and because they weren't paying attention, taxpayers are going to pay a lot of
money for this."

Stevens planned to return to Washington D.C.· today.

"I expect to be home several times in October, and I pray to God that we're finished by November."

Find Kyle Hopkins' politicaf blog online at _~_dn.G9mLala_sk~p-.olitic_~or call him at 257;-4334:

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Copyrigh~ @ Mon Sep 22 13:55:15 UTC-0800 20081900 The Anchorage Dally News (www.adn.com)

FBI - Stevens-2048

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Anchorage Daily News

Powerful lawmakers on Stevens trial witness list

Associated Press
(09/22/0808:11:17)

WASHINGTON - Several powerful senators and former Secretary of State Colin Powell are among possible
witnesses at the corruption trial of the longest serving U.S. Republican,senator.

Jury selection began Monday in the trial of the Sen. Ted Stevens, who has represented Alaska for more than 35
years. A federal judge listed dozens of people who might be called at the monthlong trial.

Among them are Democratic Sens. Ted Kennedy, Patrick Leahy ,and Daniel Inouye. Republican Sen. Orrin Hatch
is also on the list, as is Powell.

Stevens, who took his 'seat in the courtroom before the proceedings commenced, is charged with lying in S.enate
financial disclosure records about' hundreds of thousands of dollars in gifts and home renovations he received
from Veco Corp, an oil services company. On Friday, he urged people to reserve judgment until all the evidence
is in.

The senator at the time repeated that "I am innocent of the charges against me, and I think the trial will show
that."

Veco employees normally build oil pipeline and processing equipment. But company workers also led the
renovation, of the senator's home, a project that was overseen by Bill Allen, a longtime Stevens friend and now
the government's star witness.

Stevens, 84, says he paid every bill he received. and has pleaded not guilty to all seven counts. The senator has
pushed to get his trial completed before Alaskans vote Nov. 4 on his re-election.

The 150 potential jurors will complete a multipage questionnaire behin9 cl9sed doors before being questione9 by
lawyers on their sUitability for the monthlong trial. .

Stevens, who is looking to Win a seventh, six-year term, is in a tough race against Anchorage Mayor Mark BegiCh,
a Democrat. The longtime Republican lawmaker will have to stay in Washington during the trial, while Begich is
free to campaign around Alaska.

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Anchorage Daily' News

Fight brewing in Stevens trial over CH2M Hill documents

By ERIKA BOLSTAD
(09/22/0809:31:20)

WASHINGTON -- The Colorado construction and engineering company that bought the oil ~ervices firm at the
heart of· Sen. Ted Stevens' corruption trial is trying to keep from handing. over documents sought by.the Alaska
Republican's defense team.

Lawyers for CH2M HILL, which purchased Alaska-based Veco Corp. last year, don't want to make public some of
the evidence sought by Stevens' attorneys, including documents that show how new company is cooperating with
the federal corruption investigation. .

Jury selection began today and will continue tomorrow. The' trial itself will begin Wednesday in earnest.

Stevens' lawyers are looking for three things: communications between the company and prosecutors concerning
the Veco sale, documents that detail whether the company would be prosecuted itself for misdeeds, and
information that would show whether the company-'s former executives benefited by cooperating with the federal
corruption investigation.

Those executives include Bill Allen, Veco's former CEO, who was convicted of bribing state lawmakers but hasn't
been sentenced yet. Allen is expeCted to a pivotal witness in the senator's trial, as are recordings between him
and Stevens. -

Lawyers for CH2M HILL say that they're not obligated to turn over any of the material requested by Stevens'
lawyers, wOo have already asked the Justice Department for it. Prosecutors have not turned it over either, saying
that it's irrelevant to their prosecution of Stevens.

"Unsatisfied with the government's decision not to produce this very same informatlon...the defendant now seeks
these items from -il nonparty in- a backdoor attempt to circumvenUhe-government's'discovery obligations;"
lawyers for CH2M HILL wrote. .

Stevens' lawyers counter that because Allen "apparently conducted numerous illegal activities through VECO,
which have led to h(s conviction and that of several Alaska state officials, CH2M HILL's pun;:hase of VECO could
have exposed it to potential criminal indictment. Although an indictment would bean unwelcome event in the life
of any corporation, for CH2M HILL criminal charges would be particularly devastatingi because it is a government
contractor and faces debarment if indicted."

They want.the ~ocuments because they hope to show at trial that Allen had a motiv¥~_tgt'JV~H~la~Brably" as
a prosecution Witness, Stevens' lawyers wrote.

CH2M Hill, an employee-owned company, bought Veco last September, and the formal stock-purchase agreement
was filed publicly with the Securities and Exchange_ Commission. The agreement showed that the Allen family and
two former Veco executives, Roger Chan and Peter Leathard, owned shares inVeco either- directly- or through-
trusts. - .

The Veco owners shareflln the proceeds according to their ownership percentages, with the Allen family together •
holding more than 80 percent, according to sales documents.

According to the CH2M Hill purchase agreement, the total value of the sale was $380 million. But after
adjustments, assumptions,of debt and the issuance of $15 million in CH2M Hill stock to Veco employees who
joined CH2M Hill, the.owners were left to divide $146 million in cash. .- CjJ ~

I; {"<-fA- -A-r/- ( '? C7 ~-.. #\ e


.J J • c;.:

Another $70 million was withheld tnpayable by 2010 -- a guarantee agan: hidden or unexpected issues
arising, in$:lueing the possibility th~eco could still be charged criminally\ia corporation.
,;;....

Allen has testified he tried to get immunity for the company but couldn't. In its SEC filing,'CH2M Hill said such an
event would be "potentially detrimental to CH2M' HILL's reputation in the business community or impact our
future business operations." The new owners said they would continue to cooperate with ongoing investigations
a
and have had "productive dialogue" with the U.S. Justice Department.

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FBI - Stevens-2051

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Anchorage Daily News

Stevens asks to leave courtroom for Senate

By ERIKA BOLSTAD and RICHARD MAUER


Anchorage Daily News
(09/23/0809:57:02)

WASHINGTON - A federaljudge warned Sen. Ted Stevens that it might not be the'best id.ea to leave the
courtroom during the first week of his corruption trial, but that If he is needed in the U.S. Senate, he'll explain
the senator's absence to jurors. .@
"I would be remiss if I didn't bring this to your attention," U.S. District Court Judge Emmet Sullivan told Stevens
just beJore jury selection began this morning. "I think it's possible that some jurors may think someone is too
busy."

His lawyer, Brendan Sullivan, wanted the judge to tell jurors that if Stevens is leaving, it is because he is needed
in the Senate to help address the looming financial crisis. But the judge told him he would say only that if
Stevens is absent, he would instruct jurors that the senator simply wouldn't be there, but that there was nothing
wrong with it and they should 'not speculate about it.

Jurors paraded quickly through the courtroom this morning as the selection of individual jurors got under way in
Stevens' corruption trial. By -12:30 p.m, (Eastern time), the judge had reviewed 14 jurors and dismissed five.

Those dismissed included a lobbyist with Republican ties who said he believed he has met Stevens before and
that he worried that his political ties would make it difficult to overcome his bias in favor of the Alaska senator.
The lobbyist, who represents home-based businesses such as Avon and Mary Kay,cosmetics, described himself as
"a political animal." He has never lobbied Stevens directly but has probably been at the same events, he to,ld the
judge.

"I think it woul9 be hard for me to say I wouldn't have some inherent bias," the lobbyist told the judge, adding
later, "You come into this with certain biases and beliefs, but first and foremost you have the task at hand."

"I appreciate your candor, thank you," the judge said.

Stevens' lead attorney, Sullivan, appeared eager to keep him.

"This man seems to be knowledgeable, maybe opinionated ... " his attorney said. "He's exactly the kind of
thoughtful, honest juror that can follow the law and instructions.

But prosec~tors wanted him out. FBI - Stevens-2052


"I believe he was, trying his best to be honest, but there is a struggle there... , He is a lawyer," said Brenda
Marsh, the lead prosecutor. "He has formed a bias in this case, he has indicated that in his line of work, ... and
he is very act.iveJn the ,Republican P~rty." '

The judge also let go another potential juror, a teacher and Christian Scientist who said she had religious
objections to sitting in -judgment on someone. He also dismIssed a young man who has college courses that begin
every evening at 4.

"We don't want you to miss any classes," the judge said, adding that he would defer his jury service until mid-
June. , .

I
- - - --
"That sounds pretty good," the juror said.

I ---------:---- ---- - - ~-- ----..-----


---- ---------
~~is1i1iss~d another juror who h~mily ties to .lawyers at Stevens' lav.t""ns, cmd one man who told him he .
thought it would be difficult to be ~because people in Stevens' position ~uld be "held to a higher standard."

"I feel t/:1at I already have·an opinion on the case. Two people·from the oil company have already pled guilty to
bribery," the man said. "I don't know how I would remove the things I've already read."

But most potential jurors remained in the pool, including a woman who Stevens' defense team objected to for:
saying she thought public officials are "supposed to serve the people ... and they're not above the law. They
should always remember the people they're supposed to serve."

When asked by the judge whether "the fact that the senator has been indicted ... would you view that as
wrongdoing on his part?

"Do I feellik.e that means he's gUilty? No," the woman said, a response that kept her in the jury pool.

Another juror, when asked about his response on a questionnaire as to whether he had ever witnessed a crime,
had this to say: "If you see someone smoking marijuana at a party, that's a crime." The judge kept him in the
pool.

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Copyright @ Tue Sep 23 11:20:18 UTC-0800 20081900 The Anchorage Dally News (www.adn.com)

FBI - Stevens-20S3

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_.;Fr0'!Y fvllKE .JONES <miamottley2@gmailn>
Sent 'Monday, September 22, 2008 6:59 ~
Subject f~werfUllawmakers on Stevens trial witness list
o
See bl09 towards tite end of the article.

http://www.adn.com/news/politics/fbi/stevens/st~fy/533357.html?mi_pluck_action=comment_submitted#Comments~Container

Powerful lawmakers on Stevens trial witness list

By ERIKA BOLSTAD and RICHARD MAUER


Anchorage Daily News

WASHINGTON - A witness list read to potential jurors this morning suggested that a bevy of Sen. Ted Stevens' high·profile Senat~ colleagues
would testify in his corruption trial.

The witness include his longtime friend and fellow World War II veteran Sen. Daniel Inouye, D-Hawaii, and three other Senate peers: Sen.
Patrick Leahy, D·Vt., S'en. Orrin Hatch, R·Utah, and Sen. Ted Kennedy, D-Mass. Former Secretary of State Colin Powell is also on the list. It
wasn't clear Monday whether the m~n are witnesses for the defense or the prosecution. •

Also on the list: a Fairbanks strip club manager as well as the underage former mistress of ~ne of the chief witnesses, Bill Allen, and the @
Anchorage Police Department detective who is investigating the relationship between the two.

Monday, Judge Emmet Sullivan issued an order allowing Stevens to duck in and out of the trial in federal district court in Washington, D.C., if
he has Senate business to attend to. It's not clear whether he can leave to campaign; the 84-year-old senator is up for re-election and on Nov.
4 faces Democrat Mark Begich, the mayor of Anchorage.

Jury selection in Stevens~ trial began today and will continue tomorrow. The trial itself will begin Wednesday. Stevens faces charges that he
took more than $250,000 in labor, materials and furnishings from Veco and its former CEO, Allen, but failed to report the gifts on his annual
Senate disclosure forms.

, Meanwhile, the Colorado construction and engineering company that bought Veco is trying to keep from handing over documents sought by the
Alaska Republican's defense team. - - -, -

Lawyers for CH2M Hill, which purchased Alaska·based Veco Corp. last year, don't want to make public some of the evidence sought by
Stevens' attorneys, including documents that show how the ne~ company is cooperating with the federal corruption investigation.

Lawyers for C2HM Hill said in a motion filed Monday that they believe Stevens' defense team is conducting a "fishing expedition" for three
things: communications between the company and prosecutors concerning the Yeco sale, documents that detail Whether the company would
-be prosecuted itself for misdeeds, and information that would show whether the company's former executives benefited by cooperating with the
federal corruption invesligatiqn; - .-

Those executives 'include Allen, who was convicted of bribing state lawmakers but hasn't been sentenced yet. Allen is expected to a pivotal
witness in the senator's trial, as are recordings by the FBI between him and Stevens.

Lawyers for CH2M Hill say they're not,obligated to tum over any of the material requested by Stevens' lawyers, who have already asked the
Justice Department for it Prosecutors have not turned it over either, saying that it's irrelevant to their prosecution of Stevens"

"Unsatisfied with the government's decision not to produce this very same information ... the defendant now seeks these items from a nonparty
in a,back-door attempt to circumvent the government's discovery obligations," lawyers for CH2M Hill wrote.

Stevens' lawyers cOllnter that because Allen "apparently conducted numerous illegal activities through Veco, which have led to his conviction
and t,hat of several Alaska state officials, CH2M Hill's purchase of Veco could have exposed it to potential criminal indictment Although an
indictment would be an unwelcome event in the life of any corporation, for CH2M Hill criminal charges would be particularly devastating
because it is ~ government contractor and faces debarment if indicted" '

They want the documents because they hope to show at trial that Allen had a motivation to "testify favorably"-as a prosecution witness,
Stevens'lawyers wrote. FBI - Stevens-2054
9H2M Hill, an employee-owned company, bought Veco last September, and the formal stock-purchase agreement was filed publicly with the
Securities 'and Exchange Commission. The agreement showed that the Allen family and two former Veco executives, Roger Chan and Peter
Leathard, owned shares in Veco either directly or through trusts.

The Veco owners shared in the proceeds according to their ownership percentages, with the Allen·family together holding more than 80
percent, according to sales documents.

ACcording to the CH2M Hill purchase agreement, the toial value of tlie sale was $380 million. But after adjustments, assumptions of_ de~land
1-- -._--- --~--~.- - - - -==---- ~°21-_oolW ~'-3,r:1cP_;S/-~.>._H~_ ,_ '1'''+ -It V~tJ' 70-"1"- ... ~J~ e.
the ;s!fuance of'$15 million in'CH2M Hill stoO Veco employees who jolned CH2M Hill, the Qrs were left t~ divide $146 million in' cash.
Another;$70 million was withheld but payable by 2010 -- a guarantee against hidden or unexpected issues arising, including the possibility that
a
Veco could still be charged criminally as corporation. '

Allen has testified he tried to get immunity for: the company but couldn't. In its SEC filing, CH2M Hill said such an event would be··potentially
detrimental to CH2M Hill's reputation in the business community or impact our future business operations: The new owners said they would
continue to cooperate with ongoing investigations anc~ have had a ·productive dialogue· with the U.S. Justice Department

BLOGS

I would suggest that the files be released as I am certain that these same files will also
contain a link to the further corruption carried out by VECO and Allen in regard to their
handling of two projects carried out il1 Barbados one being an ,Oil Storage facility and
the other being a prison in ,b()th cases the final price tag exceeded the quoted price in
one case by nearly three times the cost in the other by double the cost.

There is a VERY STRONG feeling on the island that VECO executives conspired with
Barbadian con artist to defraud the Barbadian taxpayers by vast sums of money with
kick backs arranged by Allen for the 4 Barbadian faciliators for ALL~N AND VECa.

See comments recently made by the new Prime Minister of Barbados The Hon Mr.David
Thompson during a speech that was delivered on Saturday evening by him to.
Barbadian~ living in Toronto -:

SECRET ACCOUNTS

PRIME MINISTER DAVID THOMPSON is convinced that millions of dollars "bizarr~iy


spent" during the previous Barbados Labour Party (BLP) Administration are now
stashed in 'foreign bank accounts.

'He did Qot'call any'namesbut'he made it-clear that he-hoped,one:day to be_able. to.tra~1<
down the bank' accounts and expose the culprits.

"Week ?lfter week in Cabinet, we unearth 'horror stories of how millions arid millions of
dollars. were spent in the mpst bizarre of circumstances," Thompson said as he
addr~ssed the Canadian f?rarich of the Democratic Lapour Party (DlP) in Toronto on
Saturday night.· . .

"This is 2008 and'it is'not easy to tap into a person's personal bank account and,find
necessary deposits, but I am saying tonight that the money that w~s spent so recklessly
in the past t4 years has not all dissolved into outer space, although much of it.js not in
Barbados.

"It is somewhere hidden and I intend to find some, if not all, of it," the Prime Mini~ter
said. . fBI - Stevens-2055

"We are not talking about a few hundred dollars here. We are not confusing ourselves'
with petty cash or other fine change. We are talking about millions and million~ of
dollars that could otherwise have gone into social, infrastructural and economic
developmentpo_licie~,,_~nq.:pr9j~ct~JQrjJ1e ~~neflt of-Barbadians," he charged.
- - ,- - - - ' - - - ,~--~~~.~ ~ ,
He
....
spo~e.of
o 0
irregularities at the Rural and Urban Development ~ommissions as well as
"straf~ge" Town and Country Planning decisions.

"You cannot begin to imagine what was going on in Barbados. You cannot begin to
imagine ttie depths to which governance ~ or lack thereof - sunk in Barbados," he told
the audience. .

The Prime Minister added that, as a consequence, the public service of Barbados was
"never as politicised".

"There are political operatives of the Barbados Labour Party at work in virtually every
department; charged' with frustrating and undermining every project/initiative of your
Government.

"Frequently, you discover situations where people are speaking freely about
transactions and undertakings for which there is no record on .file. It is only then you
know that something of the sort existed. The files are now nowhere to be found."

It is for this reason, he said, that his Administration, as promised in the DLP-manifesto,
has set up a Governance Commission to review and examine current loopholes in the
system of public administration in Barbados and to propose a series of reforms.

"I am not-arrogant and I don't.try to.be..1spent too long in OppositiQn not to have learnt
some lessons. 'But I apologise to no one - least of all the Barbados Labour Party - for
the length of time it

is taking to get it right."

Thompson, also spoke of other manifesto commitm~mts ~~~h a~ the proposed' Freedom
of Information Bill which he said had been p'resented to Cabinet last Thursday and
would soon be widely circulated and ultimately laid 'in Parliament.

Additionally, he said the Integrity In Publi~ Life legislation covering such issues as
declaration of as.sets, conflict of interest issues and the conduct of parliamentarians
would also be available within the next few weeks.

"This Government is in office for eight months and it is making this legislative
framework a reality. Others talked about it but instructively, never lifted a finger for 14
long years, to make it happen. Barbadians I11USt ask themselves why!"
.
FBI - Stevens-2056

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Anchorage Daily News

Stevens jury set to hear witnesses Thursday

By ERIKA BOLSTAD and RICHARD MAUER


Anc;:horage Daily N'ews
(09/24/0814:21:56)

WASHINGTON - The newly impaneled jury that will determine whether Sen. Ted Stevens is guilty of lying on his
financial disclosure forms will hear its'first witnesses Thursday in his corruption trial.

Firs~, prosecu.tors will outline their case against the 84~year-old Republican from Alaska. They're expected to call
three witnesses. Stevens' lawyers also will have an opportunity to outline their defense, including shortcomings
they hope to highlight- in the government case against the senator.

Stev~ns was' charged in late July with taking more than $250,000 in home repairs, labor and fumishings from a
defunct oil-services company, Veco Corp., and Bill Allen, its former chief executive/ and failing to report the gifts
on his annual Senate 'disclosure forms ..

The gifts he's accused of accepting inc!ude renovations to his home that lifted it from its foundation, added a
lower story and doubled its size. .

Among the first witnesses jurors will hear from Thursday is John'Hess, a Veco engineer whose initials are on the
,renovation plans,fiIed with the Municpality, of Anchorage's building department. Stevens called the home, an A-
frame in the resort community of Girdwood, his "chalet" 'in correspondence that will likely be entered as evidence
against him in the case. Veco, according to the Stevens indictment, paid for the design work.

Today, after a day and a h91f of jury selection, lawyers for Sen. Ted Stevens and federal prosecutors agreed on a
jury pool of 16, which includes four alternates.

The jUry is made,up of nine black women, three black men, two white women and two-white men - a mix that
more
reflects the pop'ulatio~ oi Wc;lsh{ngt()r1, 'D.~.~ wh'j(;h is Etlan 56' perceht'bla-ck.

It's a far different jUry from what Stevens likely would have faced in Alasl<a, had he been successful in moving
the trial to his home state. In Anchorage, U.S. Census figures show, the population is about 72 percent white, 6.5
percent black and about 8 percent Alaska Na~ive.

The D.C. jUry also is reflective of the city's professional class - 39 percent of the population has at 'least a four-
year degree. In Anchorage, that number is closer to 2;1 percent.

a
There's a third-grade teacher with 21 kids in her Classroom, woman who is the receptionist for a trade
association, a young man who works in the gift shop at a journalism museum, a man who oversees the operating
rooms at a hospital, a woman who keeps the books for the D.C. 'National Guard, another woman who compiles
criminal justice reports on wiretapping, and a man who works in drug counseling. FBI - Stevens-20S7

Half'of the jurors previously served on juries in federal or D'.C. courts; one man'was-a"grand juror. , ..

Stevens is-balancing his trial, his Senate duties and a,campaign against Democratic challenger Mark Begich,
Anchorage's mayor. Opening statements in the trial, which is expected to last three to four weeks. Stevens,. who
was indicted in late July, asked for the expedited schedule so there is a potential for the trial to wrap up before
the Nov. 4 election. '

Allen, 71, is expected to b~ the star witness in Stevens' trial, the culmination of four years 9f inquiry into
co~rup.tioniri Alaska politics. Allen, who's pleaded guilty to bribing state lawmakers in Alaska, has not yet been
sEmh~nce(CBut 'h'is coiIri:ro6ildestimOllY and secret'recordings and videos'of conversations were,key:.to the
-,-,- , -_'~ <~.
' - , _ • - '6 j 5 ,_ {7''f+,;(j/",..J36?o- ~ e.
" ~
JUS~e"'Department's seven succesQconvictions.
o
Allen and Veco vice president Rick Smith pleaded guilty in May 2007 to providing more than $400,000 in bribes
to public officials in Alaska.

The Jus.tice Department also won convictions of three former Alaska state representatives, all on bribery charges:
Tom Anderson, Pete Kott and Vic Kohring. One other state representative, Bruce Weyrauch, is awaiting trial, as is
current state Sen. John Cowdery.

In the same investigation, Jim Clark, onetime chief of staff to former Alaska Gov. Frank Murkowski, pleaded
guilty in March to one count of conspiracy and agreed to cooperate with the federal investigation. Former
Anchorage lobbyist Bill Bobrick also pleaded guilty in May 2007 to f~lony public corruption charges.

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FBI - Stevens-20SS
'''';~~~U:COffi'1 Alaska's ~ews O formation source I,FormergovernorCserts himself in... Page 1 of2'

Former governor reinserts himself in gas line talks

by Mike Ross
Monday, Jan. 28,2008

ANCHORAGE, Alaska -- After his own failure with the project,


former Gov. Frank Murkowski is again jumping into the gasline
debate. --- ..
..
Murkowski is back in Alaska. He said Monday he is meeting with
some of the major producers and the Palin administration's gas
Although he wouldn't say exactly what
role he's playing, Murkowskl met line choice, TransCanada, in order to get the project moving.
Monday afternoon with officials at
Conoco Phillips. (Phil walczak/KTUU·lV) •
"I feel as an Alaskan that I'm gonna do everything I can to help
bring this gas," Murkowski said.

Although he wouldn't say exactly what role he's playing, Murkowski met Monday afternoon with
officials at Conoco Phillips.

"We just can't wait for this process to go'into a long period of litigation -- time's a-wastin'," he
said.

Murkowski also says he plans to meet with BP, Exxon Mobil and TransCanada, the only pipeline
bidder that met terms of the Alaska Gasline Inducement Act legislation, according to the Palin
administration.

"The bottom line is to get this moving and how can we collectively work together to have the
producers, the owners of the gas and TransCanada come together with,the state of Alaska to get
this project underway," he said.

In the final months of his term as governor, Murkowski's gas line deal with the major producers
fell apart over concerns that he "gave away too much."

Many in the Legislature felt there weren't sufficient guarantees the pipeline would ever be built
within the context of his negotiations. Tax breaks given to the producers were too generous.

The former governor says he is not working for or representing any particular party involved in
the debate, though, and his efforts come as the tug-of-war between Gov. Sarah Palin and Conoco
Phillips continues.
FBI - Stevens-2059
Palin rejected Conoco's "non-conforming" pipeline construction application with a letter that
began with a quote from Albert Einstein that defined insanity as doing the same thing over and
over again and expecting different results.

- The company ran a full-page newspaper ad Sunday saying it's disappointed but not discouraged.,

"We do plan to continue with oLir public outreach. We plan to continue with our efforts to'move
this project ahead," said Conoco Phillips vice president Brian Wenzel.

The governor says she's committed to AGIA but isn't closing the door on Conoco.

http://www.ktuu.comlgloballstory.asp?s=77881048:Clien(r).pe=Pril1tabl~ 1129/2008
. .' ,trhu.com I Ahiska's'news ~nforma~ion source I FOnnerJgoveni0Qserts 4il11selfin;.~ .Page 2 of2

"We're not going to be stubbQrn," Palin said. "Some people characterize it a~'don't pull a
Murkowski' -- you put your he.ad in the sand ~.nd y,ou don't w~nt to hear from anybody. else.
We're goin~ to hear from oth~rs." ,

Contac~ Mike Ross at mLQ£s@/stUY.CQD1

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For more'lnformation on this site, please read our fIDla~li.~and J-e.rms....o1.Seryjce.

FBI - Stevens-2060

1/29/2008
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Anchorage Daily News

Jury se,ated in Stevens trial

By ERIKA BOLSTAD and RICHARD MAUER


Anchorage Daily News
(09/24/0810:20:23)

WASHINGTON - Lawyers for Sen. Ted Stevens ,and federal prosecutors have picked a jury in his corruption trial.
After a day and a half of jury selection, the pool,was narrowed to 12, with four'alternates.

Opening statements are set for Thursday morning.

The jury is made up of nine black women, three black men, two white women and two white men - a mix that
reflects the population of Washingt<?n, D.C., which is more than 56 percent black.

There's a third-grade teacher, a receptionist for a trad~ association, a young man who works in the retail store at
a journalism museum, a man who oversees the operating rooms at a hospital, a woman who keeps the books for
the D.C. National Guard, another woman who compiles criminal justice reports on wiretapping', and a man who
works, in drug counseling.

Five of the jurors previously served on juries; one man was a grand juror.

The 84-year:-old Alaska.Republican faces charges that he took more than $250,000 in labor, materials and
furnishings from 'a former oil-services co'mpany, Veco Corp., and' Bill Allen, its former chief executive officer, and
didn't report the gifts on his annual Senate disclosure forms. Opening arguments begin Thursday morning.

The senator is balancing his trial, his Senate duties and a tight re-election bid against Democratic challenger Mark
Begich, Anchorage's mayor. Opening statements in the trial, which is expected to last three to four weeks, begin
Thursday morning. Stevens, who was indicted in late July, asked for the expedited schedule so that there is a
potential for the trial to wrap up before the Nov. 4 election.

Allen, 71, is expected to be the star witness in Stevens' trial, the culmination ,of four years of inquiry into
corruption in Alaska politics. Allen, who himself has pleaded guilty to bribing state lawmakers in Alaska, has not
yet been sentenced. But his courtroom testimony and secret recordings'and videos of conversations were key to
the Justice Departme'nt's seven successful convictions. '

Allen and Veco vice president Rick Smith,- pleaded gUilty in May 2007 to' providing more than $400,000 in corrupt
payments to public officials fro.m the state of Alaska.

The Justice Department also won convictions of three former Alaska state rep'resentatives, all'convicted on
bribery charges: Tom Anderson, Pete Kott and Vic Kohring. One other state representative, Bruce Weyrauch, is
awaiting trial, as is current state Sen. John Cowdery.

In the same investigation, Jim Clark, onetime chief of staff to former Alaska governor Frank Murkowski, pleaded
guilty in March to one count of conspiracy, and agreed to cooperate,with,the federal investigation. Former
Anchorage lobbyist Bill Bobrick also pleaded guilty in May 2007 to felorw public corruption charges.
FBI - Stevens-2061
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Anchorage Daily News

Juror links to Steve.ns, jud9.e hard to avoid


:~"I:;LECTION PROCESS: Federal judge trims field to about 30.
'~¥J~RIKA BOLSTAD and RICHARD MAUER
t~!l'0rage Daily News
~f1!)i23/08 21:58:26)
WASHINGTON -- A federal judge began on Tuesday to shape the jury that will decide whether Sen. Ted Stevens
is guilty of lying about gifts o.n his annual Sena'te disclosL!re form,S.

Jury selection is set to finish early this morning/ but by the end of the day Tue~day/ U.S. DistriCt Judge Emmet
Sullivan had identified about 30 potential jurors. He asked 46 people whether they felt they could be impartial in
a case about a public official and whether they knew any of the people who could testify as witnesses in the
corruption case. He also asked many peopl~ if they thought they could be fair in d~clding their verdict even if the
defendant -- Stevens -- does not testify.

Just two potential jurors mentioned Stevens' home state. The Jather of Ju'ror 1885 -- none of their names were
used in open court --. was 90rn in. Alaska.
,
:-ili~~.~6j2 had failed to respond to a written juror question asking what he thought about Alaska/ so the judge
~~~:,hiril
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·-t~Y{I can say is/ Alaska is cold/, hesaicf;

The jury pool in some ways. showed what a small town Washington can be'~ Two jurors reported having direct
!=ontact with the judge in the past/ one as a lawyer representi'ng a telecommunications company/ the other as a
mother whose son was convicted of an unspecified crime. The lawyer remained on the panel/ while the mother/
who harbored ill feelings toward the couit/ did not.

Ana'sorifeon'e:who might'have watched-jurycselectionsin Anchorage·would· observe,a surprising. lack 9f.diversiW


for cosmopolitan Washington. Anchorage jury pools-often reflect·tt)e rich ethnic and racial diversity there/ where
. more than 89 languages are the native tongues of students in the school district or their families. The
Washington that showed up in Sullivan's courtroom was almost exclusively biracial -- African American and' white.
A single Asian -- a female lawyer -- was among the pool/ along with a man who might have been Hispanic.

,Wi~h government being the city's'main industry/bureaucrats/ clerks/ technology workers/ lawyers/ lobbyists and
~i1Wi:signals analyst" for the Defense Department swelled-the jury p o o l . . '
~~~ .
l'ht~~t~·· ,
~h:~!Of the lobbyists/ Juror 213.5/ even had a connection to Stevens. FBI - Stevens-2062

That juror is a corporate attorney with Verizon who practices before the FCC. The Senate Commerce .Committee/
. which Stevens chaired until Republicans lost control of the Senate in 2006/ has oversight of the FCC and Stevens
has a lot to say about who its chairman will be. The juror said he met Stevens professionally and. knew one of his
long-termaides-turned-Iobbyist/ Lisa· Sutherland. - -

Sutherland was listed Monday as a possible witness.

The lead prosecutor/ Brenda Morris/ asked the man if it wo.uld be a problem for his own career if he sat in
judgment on a jury determining whether a powerful senator is gUilty of a cri",'le.

The man told the judge it would not be a problem and survived the fjrst round of cuts.
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adn.com JJuror links to Stevens, jud~ard to avoid r\ Page 2 of 3
T/oof the potential jurors' had ex~nce witli corruption'inve?tig-ations. ~or 511 said a r~lative, a jUdge in
.pennsylvania, is now under investigation by the FBI for abuse of power. The juror said she h?ld become jaded,
'EH~~9idn't know if that would help or hUI\ Stevens. She was cut. .
'~~~ .

~~ 190"2 worked for Walter Fauntroy when he was the Dis'trict of Columbia's nonvoting delegate to Congress.
iStfu was subpoenaed by a g~and jury investigating Fauntroy and remembered being frightened before she
testified. In 1996, aft~r leaving Congress, Fauntroy pleadeq guilty to filing a false disclosure statement, the same
violation Stevens is facing. Juror 1902 remained on the Stevens panel.

About 56 percent of Washington is African American and just over 53 percent of residents are women. By the end
of Tuesday, the potential jurors in the pool of 30 or so included 13 black women. .

ABSENCE MIGHT BE A MISTAKE


.
The jurors paraded quickly through the courtroom, as Stevens sat quietly at the defense table with his laYJyers, a
frown fixed on his face most of the day. During sonie breaks in the proceedings, he checked his Blackberry for e-
mail messages in the airy modern atrium outside the courtroom. Stevens, the longest-serving Republican in the
U.S. Senate, left the proceedings about 15 minutes early to go to the Capitol, 'where votes were scheduled.
'\
;mR~~4-year-old senator faces charge~ that he toqk more than $250,000 in labor, materials and furnishings from
fQ~iijer oil:servlces company Veco Corp. and Bill Allen, its former chief executive officer, and didn't report the gifts
,~$.fWii)" annual Senate disclosure forms. The senator is balancing his trial, his Senate duties and a tight re-election
fJicfagainst his challenger, 'Anchorage Mayor Mark Begich, a Democrat.

Sullivan warned Stevens on Tuesday that it might not be the best idea to leave the courtroom during the first
week of his corruption trial but that if he's needed in the Senate, the judge will explain
. ,his absence to jurors.
"I would be remiss if! didn't bring this to your attention," Sullivan told Stevens just before-jury sel.ection-b.egan.
"I think it's possible that some jurors may think someone is too busy."

Stevens' lead attorney, Brendan Sullivan, wanted the judge to tell jurors that if Stevens is absent, it's becau~e
he's needed in the Senate to help address the looming financial crisis. The judge told him he'd say only that
Stevens simply wouldn't be there, but that there was nothing wrong with his absence and tlie jurors shouldn't
speculate about it. . .

-LOBBYISTS IN THE ,POOL


;'f.~'a,:.
.... .
'j" ,".• ~
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,Arlorner'la'wyer/lobbyist failed to make the'cut: a man with Republican ties who said he thought that he'd met
'Sl-ceU~ns before, and said he was worried that his political ties would make it difficult to overcome his bias in favor
~fthe.Alaska Republican senator. The lobbyist, who represents an association of home-based businesses such as
Avon and Mary Kay cosmetics, described himself as "a political.animal." He's never lobbied Stevens directly but
,probably. has been at the same .
events, he told "the
,
judge.

"l think it would be hard for me to say I wouldn't have some inherent bias," the'lobbyist told the judge. '
FBI - Stevens-2063
A bias from the other side was held by juror 86, who reported that his father was a lobbyist. He said he believed
people in public office should be held'to a higher standClrd, -and had com,e to the conclusion that "Stevens is
guilty." He also was struck from the pool.

a
The judge also let go another pot~ntial juror, teacher who is a Christian Scientist and said'she had reljQi6us
objections to sitting ,in judgment on someone. He also dismissed several jurors who worked the night shift or
were enrolled in college courses· that conflict with the five-day-a-week trial schedule. "
~~ . ' . . .
riJ:'." , . .
:~w.~'aon'twant you to miss any cl!3sses," the judge told one student.
:Lf~CiW' .~, .
f&'§~ Sullivan dismissed another potential juror who had famify'ties to lawyers at the firm whose attorneys are
representing Stevens. . '

http://www.adn.comlfrontlv-pririter!stoiy/535184.html 9/24/2008
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~~W.-Com,l Juror links to Stevens, jU~-hard to avoid
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~NiNGS ON THURSDAY . . o P!lge 3 of3

Most potential jurors remained in the pool, however, including a woman whom Stevens' defense team objected to
for saying that she thought public officials are "supposed to serve the people ... and they're not above the law.
They should always remember the people they're supposed to serve." .

The judge asked her about "the fact that the senator has been indicted .... Would you view that as wrongdoing
on his part?"

"Do I feel like that means he's guilty? No," the woman said, a response that kept her in the pool.

,Another juror, when he was asked about his response on a questionnaire to whether he'd ever witnessed a crime,
!;Ja9 this to say: "If you see someone smoking marijuana at a party, that's a crime." The judge kept him in the
,PPo.l,I':;
-, f·

l.ii.w-selection is expected to finish today. Opening statements in the trial are scheduled for Thursday morning.
. .

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FBI - Stevens- 2064

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adn.~om I P~9-secutor:'Stevens used ~o as his own 'handyman service'
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Anchorage Daily News

Prosecutor: Stevens used Veco ~s his.own 'handyman service'

By'ERIKA BOLSTAD and RICHARD MAUER


An~horage Daily News
(09/25/0809:11:13)
..
WASHINGTON - Sen. Ted Stevens used one of Alaska's biggest employers as his "own personal handyman
service" and never paid Veco Corp. for hU,ndreds of thousands of dollars' worth of renovations to his home, a
. federal prosecutor charged Thursday as she outlined the government's case for finding the. Alaska Republican
guilty of lying. on financial disclosure'forms.
, ,
"You'll learn that the defendant never paid Veco a dime for, the work on the chalet.. Not a penny," the Justice
Department's le~d prosecutor, Brenda Morris, told jurors in the opening minutes of Stevens' trial.

Stevens' lawyers countered'that he was not guilty and blamed Veco and its chief executive officer, Bill Allen, for
allowing costs to escalate without telling him what the expenses would be or even snowing him all the bills; Allen
'also installed fancy add-ons - Iike.a Viking gas,grill and,gaudy but pricey Christmas lights - that were /"J)
unr-ecessary and unwanted, Stevens' lawyer, Brendan ~ullivan said. ~ ~~

l~p'~b~'YA~ see the evidence ... you'll see he nad.no intent to violate the law, no intent t~,conceal anything," !:lis
" .Ia"!yer said. "He didn't' want thes.e things, he di9n'~ ask for these things. He told some of them to take them
. lSack. He never once hid anything." . .

Sullivan also hinted that jurors would hear uncomfortable and intrusive details about th~ relationship between the
84-year-old Stev~ns and his second wife, Catherine 'Stevens, whom Sullivan said opened,the.bank 'account they
established to pay for home renovations expenses.

"Catherine ran the financial part of the renovation," he said. "She was the person who opened the account,
. "reviewed-the-bills, she wa'sthe person who wrote the,check."

But prosecutors said that the jury will alsq hear from many of t~e people who did the work on Stevens' Girdwood
home, Morris said, referring to the A-frame cabin as the "chalet," as the ~~nator did: Morris said they will
describe how even though Stevens paid subcontractors with whom he didn't have a personal relationship, he
never paid Veco for its work, thanks to his close connections to the company's founder.
~ .

'rI~t!"e:<!e,fEmdant needed an eleCtrician, he contacted Veco. If the defendant needed a plumber, he· contacted
fh,~~gj~ll ?J:lft said. "We reach for the Yellow Pages, he rea'ched for Vec,o."
riJwy" . .
f"'~ , FBI - Stevens-20GS
Jurors also will hear: about a 2006 conversation between Stevens and Allen, who alreaay was cooperatmg with
federal authorities at that point. In the conversation, Stevens told Allen that the worst that could happen'to the
two was if anyone found what the company had done for him was that, they'd have to spend a lot of money on
lawyers - and perhaps serve a little jail time~

Stevens knew he was doing wrong, Morris said, and contractors who the government alleges worked for free on
the senator'.s home will testifY.that they were told not to talk about the work they were doing.

"One of the guys will tell you that he was told by Bill Allen to keep it quiet, that it would be bad if the public found
out," Morris said.

"This is a simple case about a public official 'who took hundreds and thousands of dollars' worth of free financial
_ i - . . , ' . -t!~ ~
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adn.com I PJ:Psecutor: Stevens usedQ' 0 as his own 'handyman service'
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,benefits, and then took away the Iic's right to know that information," vlorris said.
IlItH·"
.~,

',$.bW,ens, the longest-serving Republican U.;S. senator, f~ces seven felony counts of making false statements on
'tits-Senate financial-disclosure forms. In office since 1968, Stevens is up for re-election this year arid is locked in
:a tight battle with his Democratic opponent, Mark Begich, the mayor of Anchorage.

The senator is acc,:,sed of accepting more than $250,000 in home repairs, labor and furnishings from the now-
defunct oil-services company Veco and Allen. Among the gifts he's accused of accepting are renovations to his
Girdwood home that lifted it from its foundation and added a lower story, doubling it in size.

Allen, whose testimony will be the centerpiece of the trial, has pleaded guilty to bribing state lawmakers in
Alaska. He hasn't yet been sentenced. -

The judge cautioned jurors that what the lawyers said Thursday morning is merely a road map of the case, not
evidence. -,

'hThey simply are statements of wh 9t the attorneys expect the eVidence to be" and are designed to help the jury
\1~9?rstand what sort of case it'll be hearing, U.s. -District Judge Emmet Sullivan said.

~~~~minded the jurors that the law doesn't require the defendant to prove his innocence or present any
~'idence. Also, the judge added, the .jurors must rely only on the facts in the case and not judge Stevens based
on his race, religion, national origin or age.

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FBI - Stevens-2066

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Anchorage Daily News

Courtroom is set for dramatic Stevens 'trial


OPENING STATEMENTS: Jury has been picked,' and the first witnesses will take the stand this
rpqrning.
~Y¥RIKA BOLSTAD and RICHARD MAUER
Adcl10rage Daily News
(09/25/0801:07:16)

WASHINGTON -- With a jury seated Wednesday in the trial of Sen. Ted Stevens, opening statements and the first
_witnesses were set for this morning, lifting the curtain on what will be a historic courtroom drama.

Stevens, the first sitting senator to face a criminal trial since Sen. Harrison Williams, D-NJ., was convicted of
bribery in 1981, will be tried by a juiy of 11 women and five men, a panel that includes four alternates.
. ~
The jury is mainly a mix of white-collar professionals and bureaucrats, typic'll for this government-centric city.
They'll h,ave the job of determining whether Stevens, 84, who has represented'Alaska since 1968, is guilty of
seven counts of lying on his financial disclosure forms.

The government' will begin its opening statement after the jurors are sworn and give'n preliminary instrU<;:tions,
~~I?ected at 9:30 a.m. Washington time, '5:30 a.m. in Alaska.

l~~~ns".I,a~y~rs also will have an opportunity to outline theirgefel1se, i'1c1uging shortcomings th~y hope to
i - ?i9hlight in the government case against the senator.

Each side will have 75 minutes to introduce its case.

Stevens,was charged in July with taking more than $250,000 in home repairs, labor and furnishings from the
defunct oil-services company, Veco Corp., and Bill Allen, its former chief executive, and failing to report the gifts
on his annual Senate disclosure forms. The gifts he's accused of accepting include renovations to his home that
<- lifted-it from-its foundation/added a lower story; and doubled-it in size. • ,

Among the first witnesses'jurors will hear from today is John Hess, a Veco engineer whose initials are qn the
renovation plans ,filed with the city of Anchorage's building department. Stevens called the home, an A-frame in
the resort community of GirdwoQd, his "chalet" in correspondence that will likely be entered as evidence against
him. 'Veco, according
- to the Stevens indictment, paid- for the design work. .

'~~Qther former Veco worker, Derek Awad, is scheduled to follow Hess.


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The jury is made up of nine black women, three black men, two white women and two white men -- a mix that
reflects the popiJlation of Washington, which is more than ·56 percent African ~merican.

-- - It's a far diffe'fent jury than Stevens IiRely would have faced-in Alaska, had"he- been -successfuJ-in-moving the -trial
to his home state. In Anchorage, U.S. Census figures show the population is about 72 percent white, 6.5 percent
bla~k and about 8 percent Alaska Native.

The D.C. jury also is reflective of the city's professional class, where 39 percent of the population has at least a
four-year college degree. In Anchorage, that number is closer to,29 percent.

-Among the jurors chosen: a third-grade'teacher, a receptionist for a trade association, a young man who works
. , - <'l'~tt) ~
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adn:com I Courtroom is set for dra~ Stevens trial 0 Page 2 of2
inff~e';\\.~ shop at a journalism m~m, a man who oversees the operatiny rooms at a hospital, a woman who
i\\eeps the books for the National Guard, another woman who compiles criminal justice reports on wiretapping,
raM a man who works in drug counseling.
i~W'of
.,1
the jurors previously served on juries, either in federal court or Washington, D.C., courts; one man said
tiis only jury experience was as a grand juror. .

The trial is expected to last four weeks, a fact not lost on the jurors.

"My principal.won't be very happy," the third grade teacher told the judge. He offered to call the principal on her
behalf. . .

ALLEN AS STAR WITNESS?

In some cases, the jurors were asked to disclose their political leanings. One, a recent college graduate, said he
came from a very conservative Republican family whose parents are ardent Sarah Palin supporters. The man said
he flirted with a Republican organization in his sophomore year in college, but has since moderated his views and
recently went to Baltimore to see Barack Obama at a rally.
~' -

·$ttlitics-wise, I have no idea where I stand -- I'm still trying to figure it out," he said.

'~?~)uror said he didn't know much about Stevens but ~ad been listening to the radio as he drove to the
courthouse Monday in response to his jUry summons. He heard on the news that Stevens' trial was about to
begin. .

"It was IIke{ weird, I was like, that's interesting," he told the cO,urt.

Stevens is balancing his trial, ~is Senate duties and a campaign thousands of miles aWay against Democratic
challenger Mark I?egich, Anchorage's mayor.

Allen, 71, is expected to be the star witness in Stevens' trial, the culmination of four years of inqUiry into
corruption in Alaska politics. Allen, who's pleaded gUilty to bribing state lawmakers in Alaska, has not yet been
sentenced. But his courtroom testimony and secret recordings and videos of conversations were key to the
Justice Department's se'!en succe!?sful convictions.
j
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Anchorage Daily News

Senator's day in cour~


Prosecution tells of free work; defense says bills were paid
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
(09/26/0804:34:25)

WASHINGTON -- Sen. Ted Stevens used one of Alaska's biggest employers as his "own.personal handyman
selVite" and never paid Veco Corp. for hundreds of thousands of dollars in work done on his home, a federal:
prosecutor charged Thursday as she outlined the government's case for finding the Alaska Republican gUilty of
lying on financial disclosure forms.

"You'll learn that the defendant never paid Veco a dime for the work on the chalet. Not a penny," the Justice
Department's lead prosecutor, Brenda Morris, told jurors.

Stevens' lawyer,.Brendan Sullivan, countered that the senator is not guilty and that "every bill submitted was
paid." He blamed Veco and its chief executive officer, Bill Allen, for alloWing costs to escalate without telling
Stevens what the expenses would be or even showing him all the bills. Allen also installed fancy add-ons -- like a
'Viking gas grill and gaudy but pricey Christmas lights -- that were unnecessary and unwanted, Sullivan said.

"When you see the evidence ... you'll see he had no intent to violate the law, no intent to conceal anything,"
Sullivan said. "He didn't want these things, he didn't ask for the:se things. He told some of them to take then(j)
back. He never once hid anything." .

Sullivan also hinted that the jurors in coming days would hear some uncomfortable and intrusive details -- he
didn't elaborate -- about the relationship between the 84-year-old Stevens and his second wife, Catherine
Stevens, whom Sullivan said opened the bank account they established to pay for hqme renovations expenses in
2000.

Sullivan quoted Stevens a~ saying: " 'When it comes to things in and around the teepee, Catherine CPl1trols.' That
might be a little old-fashioned, but Ted's old-fashio'ned. -The most important thing to know is Catherine ran the
financial part (of their h~usehold.)"

That extended to the renovation, Sullivan said.

, "She was the person who open~d the account, reviewed the bills, 'she was the person who wrote the check."

Sullivan said the senator and ,his Wife paid five bills totaling about $160,000 to Augie Paone, owner of Christensen
Builders, for carpentry work. They "believed the bills they received were covering the cost of the renovation," his
lawyer said, adding that the project cost about $160,000.
FBI - Stevens- 2069
He added that when Paone prepared the sixth bill to send to Veco for approval, it wasn't paid. Paone was told by
Bill Allen and construction foreman Robert "Rocky" Williams that he was going to "eat that bill," Stevens' lawyer
said.

"Augie thought about calling the senator and saying, 'by the way, they won't pay the bill,' " Sullivan said. "He
didn't want to do that. He thought it would just be dangerous to go against Bill Allen."

Instead, Sullivan said, Paone was given a renovation job at Allen's home that helped him recover some of the
expenses of the Stevens work. The additional costs from the Stevens renovations were padded into the work at
Allen's home, SullivC!n said, "unknown by the Stevenses."

"This was an act by BiII.Alle_n to k~ep information from the Stevenses," Sullivan said. "Why? He thought tpe cost
was too high. If the renovations were really $166,000, how could you send ~ bilLfor aILthese_oJh~r costsrun up
I--~~------------______
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on .the.~eco':.bill when Ted and catOe were-3,000 miles away?"
, 0
Sullivan made a point to the jUry that the Girdwood house, though Stevens' official Alaska residence, is not his
and Catherine's primary home.

"They live here with us in the District of Columbia," he said. "That is their technical residence. They are lucky to
spend 20 days a year at that residence."

THE CASE AGAINST STEVENS

The jury also will hear from many of the people who did the work on Stevens" home in Girdwood, Morris said,
referring to the A-frame cabin as the "chalet," as the senator did. Morris said the workers will describe how even
though Stevens paid'subcontractors with whom he didn't have a personal relationship, he never paid Veco for its
work, thanks to his close connections to the company's chief executive officer, Allen.

"If the defendant needed an electrician, he contacted Veco. If the defendant needed a plumber, he contacted
Veco," she said. "We reach for the Yellow Pages, he reached for Veco."

Morris said jurors also will hear about a 2006 conversation between Stevens and Allen, who already was
cooperating with federal authorities at that point. In the conversation, they said the worst that could happen to
them if anyone found out what the company had done for him was that they'd have to spend a lot of money on
lawyers -- and perhaps serve a little jail time. In the conversation, they agreed they wouldn't "be killed,"
meaning that it wasn't a matter of life or death.

Stevens knew he was doing wrong, Morris said, and contractors whom the government alleges worked for free on
the senator's home will testify that they were told not to talk about the work they were doing.

"One of the guys will tell you that he was told by Bill Allen to keep it quiet, that it would be bad if the public found
- '. out," Morris said.

"This is a simple case about a public official who took' hundreds and thousands of dollars' worth of fre~ financial
benefits, and then took away the public's right to know that information," Morris said.

Stevens, the longest-serving Republican U.S. senator, faces seven felony counts of making false statements on
his Senate financial-:disclosure forms. The 84-year-old Stevens is up for re-election this year and is locked in a
tight battle with his Democratic opponent, Mark Begich, the mayo/:, of f\'1chor~ge.

The senator is accused of accepting more than $250,000 in home repairs, labor and furnishings from Allen and·
the now-defunct oil field services company, Veco. Among the gifts he's accused of accepting are renovations to
. his Girdwood home that lifted it from its foundation and added a lower story, doubling it in size.

Allen, whose testimony will be the centerpiece of the trial, has pleaded guilty to bribing state lawmakers in
,Alaska. He hasn't yet been sentenced.

SCENE IN THE COURTROOM


FBI - Stevens-2070
Stevens scowled throughout the government's 45-minute opening remarks, but he smiled during several portions
of his lawyer's remarks. Stevens listened through a set of earphones
. that enhanced the sound in the courtroom.
.
The system also allowed him to hear the private conferences at the bench between lawyers and the, judge.

As the trial began Thursday; both the courtroom and an overflow room were packed. The well in front of the
judge, where the two sides sit, was filled on the government side with FBI agents, additional prosecutors and
support staff. The defense side was packed with lawyers on the Stevens team ..

The first row on the defense side of the courtroom was reserved for Stevens' friends and family. His daughter
Beth sat at the end of the row and appeared to pay close attention to evei'ything that was said. Although his wife
came with-Stevens to his arraignment, she is a witness in his trial and cannot attend the proceedings until she. is
-called to testify.

I
On.the·o~he~ side of the courtroorrf"e first row was· filled with 'sketch art'" with huge pads covering their laps.
There l1ere two rows on 0l!e side U one row on the other for the media~ere was also a full crowd of suited
attorneys who came to check out the 'performance in openings by the two sides.

Throughout the morning session, a watch alarm periodically beeped from somewhere in the courtroom. When the
lunch recess finally began and Stevens was leaving the courtroom, he took off his plastic-band wristwatch and
handed it to one of his'lawyers.

"I only paid 30 bucks -- I don't.know how to turn it off," he said.

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Anchorage Daily News

Fir~t witness 'says h~ drew up the plans

By RICHARD MAUER and ERIKA·BOLSTAD


Anchorage Daily News
(09/26/0804:34:44)

WASHINGTON -- A Veco project manager testified that,his boss, Bill Allen, invited him to ·Iunch in a private
Midtown Anchorage dining room in 2QOO so he and Sen. Ted Stevens could plan the addition to Stevens'
Girdwood residence.
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The Veto employee, John C. He's, was the first witness in Stevens' felony dis'closure trial here. He was called to'
help p'rove the government's o~se that Alaska's six-term senator knew full well that Veco, the now-defunct oil-
field service company, was pa'ying for a major part of the renovations tha~ doubled the size of.·his home.

Steven~ is charged with failing to disclose more than $250,000 in gifts over six years, mainly from Allen and
Veco. Stevens says the charges are unfounded.

Hess laid the foundation for much the case that will unfold over the next few weeks, testifying for more than two
hours about the scope of the addition. His testimony was illustrated for the jurY with more than a dozen of his
own phqtographs"designs and blueprints of the project.

Hess(trained in draftiilg, engineering andarchitec:ture, wa_s followed by another wttn~ss, Derrick'Awad, also from
Veco, who testified that Allen dispatched him and another Veco w6rker to drive to 'Girdwood to shoverStevens'
deck in the winter of 1998 or 1999. In the fall of 1999, Awad and two other Veco »,orkers installed an emergency
generator for Stevens. . .
"
i
Bqth Hess and Awad, along with other Veco employees expec~ed to·take the. stand-today, are now employed ,by
i
the Denver-based engineering firm CH2M Hill, which bought most of Veco's assets from Allen, his three children
.and his two top ~~e~.ulilj~~ just over a year ago. '

'AssiGNMENT CAME FROM ALLEN

Hess' start on the project came when his manager summoned him to his office, he testified. The big b'oss, Allen,
wanted to see him, the manager told him. ' .

Within the next day or so, Hess met with Allen at Veco's executive offices in the Frontier Bt,Jilding o"n ~6th Avenue
in Anchorag~. '

"We sat down and discussed the project," he said. "I learned the project was a cabinP§jlt ~~2e-f!n.
Stevens.",. .

Allen said that Rocky Williams, a trusted Veco employee -- 'and a likely trial witness himself -- would be helping
- on the job. A few. days later, t1ess and Williams went to Girdwood to scope out the project. No one was home, but
Williams had'the key to Stevens'house: Biihat time, a plan was'fullyin place: They would· raise the single-:story _
home and build a new first floor beneath it. Hess went back to Anchorage and st~rted drawing up the designs,

Not long after that, he got a call from Bill Allen or Allen's secretary; linda Croft, directing him to come to lunch at
Jens' Restaurant, an upscqle place in a Midtown strip mall'. When Hess got there, he was led thro~gh the
restaurant to a private dining room, he testified. Stevens and Allen ,arrived a few minut!=s later; though Hess said
he didn't know if they had driven together. '

"Mr. AllenJntroduced me to Senator Stevens. He said I worked for Veco and that I would be helping with the
~}~modelingOf the 'cab'j'",""Hess' said. -=' <l ~~ . I'f ~,f-~A-N;..t36?Cr';Yl e.
, ", --- ---_.-==---==--------..~--~
.1'. .:...,.
Lunch lasted about 1 1/2 hours. H~istened for the first 45 minutes as PI'" and Stevens ·"caught up" with each
other:"It was two friends talking," l t t ' s a i d . . .V

"Halfway through the lunch, the subject changed. I started conversing with the senator"i Hess said;

STEVENS REVIEWED DESIGNS

Stevens told him that the main reason he and his wife, Catherine, wanted to expand the house was because their
grandchildren were spending time there, and there wasn't enough room, he testified. On some issues of de~ign,
Hess said, Stevens told him that he would defer to his wife.

From August through December 2000, Hess produced more designs, detailed construction drawings and
revisions. He said he phoned Stevens a couple times and faxed material to him at his Senate office in
Washington.

In one drawing introduced as eVidence, Hess had noted at the bottom that Bob Persons, the owner of the Double
Musky Restaurant in Girdvtood and a good friend of the Stevenses, would be the "ramrod" on the project.

Persons' name appeared on other documents introduced as evidence, including a file folder created by Hess for
the project that listed other names as well. On Aug. 26, 2000, Hess received a handwritten letter from Stevens
mailed to his Veco office. In the note, which was shown to the jUry, Stevens said he and Catherine were thrilled
by his effort.

"Now I want you to give us a bill for your work," Stevens wrote. "And, as Bob (Persons) and I have told you,
under our Senate rules I must pay you for what you have done,'We'lI be back in Anchorage in early October.
Hope to (illegible) you then."

!. Hess said he wrot~ b.Clck to Stevens and told him h~ needed to ask Veco for the bill, not him. He said he also
i mentioned the note to his bosses. Hess said he didn't hear from Stevens after that.

Under cross-examination by Stevens' lawyer, Hess said he couldn't recall exactly how he contacted Stevens and
had no copy of any correspondence. But he insisted he had done so.

The government alleged that Stevens never paid for Hess' time. In her opening statement earlier Thursday,
Brenda Morris, the lead prosecutor, said Stevens·exhibited a pattern of offering to pay bills, then never following
up with cash. .

While professional draftsmen usually include information on the plans that would identify themselves and their
company, Hess said, those identifiers did not appear on the Stevens project. Only his initials, "JCH," identified his
handiwork, including designs filed with the city bUilding department.

"I recall Bill Allen suggesting that we should just keep it simple," Hess said. "He didn't want Veco on there."

Hess was followed to the witness stand by Awad. Stevens was reported to be frightened by the possibility of a
massive power failure on New Years in 2000 -- the so-called Y2K bug -- s6 Veco 90u9ht him a $6,000 gas-
powered generator and a switch tha~ would automatically turn it on if the power failed, Awad said.

Awad said he and two other Veco employees picked up the generator, unpacked it, drove it to Girdwood and
spent about two days installing it in the back of Stevens house. They had to cut a hole through the foundation to
run a power cable inside, he said.
FBI - Steven 5- 2073

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Anchorage Daily News

Tradesmen detail Stevens 'chalet' renovation

By RICHARD MAUER and ERIKA BOLSTAD


Anchor:age Daily News
(09/26/0811:25:05)

WASHINGTON - Tradesmen who renovated Sen. Ted Stevens' home in Alaska in 2000 testified today about their
work as prosecutors began building a case that the Alaska Republican never paid a prominent oil services .
comp~ny for electrical and carpentry work on the so':'called "chalet."

Veco Corp. - whose executives were for years the leading campaign contributors to many Alaska political
candidat~s, including Stevens -.spent hundreds of hours devoted to work on the senator's home.
ry
In the second day of testimony, a series of electricians and carpenters described in detail how they jacked up the,
·Girdwood house, installed a new first floor and redid all of the electrical Wiring. In some cases, employees for

r
. . .
Stevens. faces seven felony counts of lying on his Senate financial-disclosure forms. The 84-year-old senator is
accused of accepting more than $250,000 in gifts from the now-defunct oil field seryice.s company, Veco~ and its
f~rmer chief ~xecutive officer, Bill Allen . Among the gifts h~~saccused of ac~epting are renovations to -'Jis
Girdwood home that lifted it from its foundation and added a lower story" doubling it in size.

Some Vf}co employees spent months at the Stevens home, according to testimony. Beginning in October 2000~
Roy D (tmer of Littleton, Colo., spent four months working six days a week, 10 hours a day, Installing electric
servi e in·the new·sections of the house and rewiring much of'the old. , " . ,

E ery morning, he'd drive to the Veco's facility at the port of Anchorage, sign in using his badge, then drive 45
miles to Girdwood. In the evening, he would have to "badge oue again back at the port before he could go home
to his hotel. Dettmer's pay at Veco at the time was between $27 and $29 an hour, plus overtime. Working a
schedule of six weeks on, two off, Dettmer said he 'spent about 400 hours on'the project. .

Assistant U.S. Attorney Joe-Bottini,of. Anchorage-walked-Dettmer, through 'h,is·tasks. The service-entrance had-
been at the· rear of the original house, but that was, now. 15 feet in the air. ,Dett'mer moved it-to the other side of
the house in the new garage Veco built, requiring all the old circuits to be extended. That doubled the electrical
capacity from, 100 amps to 200 amps. That meant the generator that had on'ly been inst?llled by Veco the year
before had ~o be rewir~d and moved as well~

Veto bought.the material from'an Anchorage supplier, Dettmer said. The new kitchen built by Veco on the second
floor also haa. to be wired. ' ,
.
Dettmer said he never met Stevens, but Catherine Stevens, the senator's Wife, caml=~~oiJg~ once.
supervisor, Rocky Williams, introduced him. - evens-
18;4Veco
"We said . Hi/'and
-
tnat was it," Dettmer said.

Doug, Ike,q Vecoelectrician,.described installing a back-~p generator at the residence in the-fall,of 1999; the-
year e ore the renova,tions that doubled the Stevens home in size.

A;7.estimated that he spent an estimated 20. to 24 hours on the job, including coming back a few days after he
and another Veco worker installed it to check on whether it was cutting on, automatically each week to recharge
the b~~teries.

The jourbeyman electrician, who was paid about $19.50 an hour at the. time, said he filled out:an "overhead
number""oJ{his tiniesheet, a code that described which client the 'work should be billed to. The number for the
Stevensjob,.wasn'tJor a,speCific client Iike.other; jobs. were, Alke said ..In'steao,Jt was 'an internal code used for
- ~a~ , 19'1.A-..A. -N-I"3t~o-~ ~
,

..:t~a>~;i assumed were accountinOposes, he said. O. .


stlve*ns' wife, Catherine, stoppe~by once to bring workers muffins, said another cQntractor, Mike aL~her,
carpenter with Christensen Builders of Anchorage. He also saw Stevens once, saying he was friendly and "talked
to everyone," Luther said. /

On his way out of the courtroom Friday, Luther waved to Stevens as hewalked past the senator at the defense
table.

Friday, both prosecutors and Stevens' attorneys also made slire to familiarize the jury with terms that are
second-nature to Alaskans, especially those wh.o work on the North Slope oil fields. One of Stevens' lawyers,
Robert Cary, asked Alke ~hat was a "hitch" on the North Slope.

"A "hitch" is just a rotation," Alke said. "It's slang. Six weeks on, two weeks off."

Alaska might be a very distant place for many of the jurors, but Gov. Sarah Palin's vice presidential candidacy
has made it more familiar than it once was. When Alke told the jury he was from her hometown of Wasilla, a
murmur of recognition shot through the coury:room.

Stevens, who has held office since 1968 and is the longest-serving Republican in the U.S. Senate, is in a tight re-
election contest with his Democratic opponent, Mark Begich, the mayor.of Anchorage.

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Anchorage Daily News

Stevens defense accuse"s prosecutors of subterfuge

By ERIKA BOLSTAD and RICHARD MAUER


, McClatchy Newspapers
(09/29/0814:14:11)

WASHINGTON -- Prosecutors stumbled Monday in their corruption case against Sen. Ted Stevens, drawing the ire
of a federal judge for sending home ~o Alaska a potential witness who has figured prominently in other people's
testimony but so far has not testified himself. .

Stevens lawyers asked for a mistrial and~ccused prosecutors of failing to .tell them everything they knew about a
Veco. worker named Robert "Rocky" \N,i(liams, who oversaw renovations at the Stevens GJrdw09d home in 2001.

U.S. District JUdge Emmet SUllivanZid there 'was no basis for a mistrial, but he said he was "fl~bbergasted"
with
how prosecutors had sent Williams' home without alerting him .or defense attorneys that he was no longer
scheduled to be a witness. Sullivan scolded prosecutors from the bench but out of earsh.ot or view of the 1Uryc:ef

"I find it very, very disturbing that this has happened, and concerned about the appearance, of propriety, o~
improprietY,",Sullivan said, stopping short of accusing government prosecutors of misconduct or a lapse in ethics
but threatening sanctions.,

- "";fter.all, this is the s.earch for the truth, ~nd people ought not to forget about t~.pt," said Sullivan, who asked
lawyers to give him briefs outlining what had happened. "This is a serious one; we're all officers of the court;"

The jury heard none of th~ dispute, meaning that it may, not have a bearing on the outcome of the trial.

Stevens, 84, faces seven f~lony counts of failing to report on his U.S .. Senate disclosure forms more than
$250,000 worth of gifts and home_ renovations, chiefly from Veco Corp. and its chief executive officer, Allen. The '
Alaska. Republican, who is up for re-election Nov. 4, asked for a speedy trial so he'd have the opportunity to clear
his !1a:rrle'befor~ then. - •

Williams, who worked for Allen, was originally set to be a government witness, but prosecutors decided in the
opening days of the trial flot to use him. It remains unclear why they no longer want him to testify, although he
spent extensive time in Was~ington, D.C., with Justice Department lawyers in preparation for the trial.

Lawyers from both sides discussed the issue with the judge privately but did .not elaborate in open court.
. Prosecutors did allude to Williams being "two weeks overdue" for.something.in Alaska, and,in court filings,
Stevens' attorneys refer to health issues that incl~de,"coughing episodes." FBI - Stevens-2076

Williams got in touch with Stevens' attorneys - at the direc~ion of prosecutors - after they released him as a
witness and sent him home to Alaska. The conversation they had over the weekend with Williams "casts the
government's decision to send him home - on the eve of Bill Allen's testimony - in a very different light," Stevens'
lawyers wrote in their filings. .

Stevens' lawyers say there's evidence Williams worked far less on the Girdwood home remodel tha.n other
<;.ompany employees have suggested 'in their testimony, including one of the c,ofnpany's bookkeepers who took
the stand Friday.

Such evidence could help' Stevens knock holes in the government's theory that-the Veco work done on his home '
was so extensive that he must have known he was getting benefits above and beyond the $160,000 his lawyers
. said he paid a separate contractor for the work done to double his home in size.

'!We got lucky;'" said one of Stevens' lawyers/-Robert Cary. ·"We ,got his lucky..that.he.changed.his.prJorposit!on <?f
_ - -- -
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B~'"t - I' 't4- -I-\-'" ,.1'3("20- ~. e
7
·notWantirig to talk to us."
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In cou;t filings, Cary said that "Mr. Williams informed defense counsel that he spent nowhere near eight hours,
per day, six to seven days per week, on the Girdwood home renovation project - in direct contrast to/the
timesheets that the government has placed in evidence to support its central theory that the unpaid cost of the
project to Veco was $188,000."

No one answered the door or the phone this morning at Williams' trailer in South Anchorage. A pair of pickup
trucks sat in the driv'eway, and what sounded like a TV could be heard playing from behind the door.

Prosecutors said they didn't intend to give the impression th'ey were hiding information and. apologized - but they
were caught off balance by the judge's ire.

"We're distressed that we're being accused of this," said the prosecutor who bore the brunt of the judge's
scolding, Nicholas Marsh.

"This was not a decision that came easily," said Brenda Morris, the lead,prosecutor in the case.

"It would have been very easy to get me on the phone," Judge Sullivan said.

The judge offered Stevens' lawyers a chan~e to re-question Cheryl Boomershine, the Veco bookkeeper who
testified Friday about how much money the company spent renovating the home in Girdwood. Boomershine was '
still in Washington this morning and available to come to court.

Jurors weren't told why there was a delay, although Sullivan had half-jokingly suggested to lawyers on. both sides
before the jury came in that he would tell them "the government hid the ball."

Instead, Sullivan joked ~bou~ the Redskins win on Sunday and told them simply that additional information was
available tnat wasn't available last week. Because Boomershine was still in D.C., they were able to bring her back
to the stand to allow attorneys to ask her more questions.

When Boomershine took the stand, Cary walked her through the time cards Williams filed in connection with the
project, trying to establish that all the time and money he spent on the Girdwood project may not have been 100
percent devoted to overseeing renovations at the Stevens home.

ltyou don't know whether Mr. Williams spent time working on other projects for Mr. Allen that had nothing to do
with Girdwood?"

"No," Boomershine said.

Prosecutors continued to build their case by bri.nging to the stand a series of tradesmen who worked on Stevens'
home.

A carpenter who was paid by Veco to build a deck testified he was told to·be discreet about the project when the
chief executive of an oil services company, Bill Allen, 'hired him in 2002. FBI _ Stevens-2077

"He said a certain amount of discretion would need to be used because it was the senator's house," and the
company was actually an oil services firm, not a genera! contractor, testified Brian Byrne, who oversaw the deck
construction.

Prosecu~or Joe Bottini asked Byrne ~hy he thought Allen would have said that.

"I'm not really sure, other than the appearance of impropriety I believe is what he was.concerned-about," Byrne
said.

Stevens showed a rare smile during the proceedings when Cecil Dale, an electrician, testified about how the
senator had given him a cigar the one time he met him. .
" -

IIHOW'W~:1:~'eCigar?1I asked Beth' ~art, one of Stevens' lawY,ers. 0-


"I ne%r smqked it," Dale said.

Kyle Hopkins of the Anchorage Daily News contributeg to ,this report.

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FBI - Stevens-2078
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Anchorage Daily News

Veco bookke~per: 'No .paper trail'

By RICHARD MAUER and ERIKA BOLSTAD


.Anchorage Daily N'ews
(09/26/0814:26:30)

WASHINGTON - Even as Veco,Corp.'was paying the bills for renovations on Sen. Ted Stevens' home in Alaska,
the oil services compa y covered up the na~ure of the work in its books, the corporate. bookkeeper testified
today.

Veco bookkeeper,-Cheryl. oomersnine testified that when she asked for an explanation for a $2,000 handwritten
expense claim from the co struction foreman, an attached note came back with the instructions that there should
be no written records. . "

The orders "no paper trail," c me from Bill Allen, the company's chief executiv~ officer, Boomershine said, and~
they were written on the back f the expense form submitted in connection with the 2000 renovation. of Steve
home. . .,

Boomershine also said that they assigned some costs to an account called "Girdwood Consultants." One of the
consultants, she testified, was a plumber. '

There's also no r~.cord that Stevens or his vyife ~yer reimburs~cI. the cornpC!xlY for al1Y cO-'lstruction costs for the
projects' that began in 1999, Boomershine said. 'Veco kept copies of deposits to its bank'account, Boomershine
testified, and the only checks that ever came in were reimbursements for two charter. flights originally paid for by
Veco.

Other tradesmen who renovated Stevens' home in Alaska in 2000 testified Friday about their work, as
prosecutors began building a case that the Alaska Republica.n never paid a prominent oil services company for
electrical and carpentry work on what Stevens called the "chalet."

Allen, who has already pleaded guilty to bribing state lawmakers in Alaska, is expected to ,testify Monday. Allen's
'testimony and secret recordings of conversations between him and Stevens are expected·to be the strongest
evidence in the government case against Stevens. The trial, which had been expected to take four weeks, is
moving so fast that prosecutors might finish their case in eight days. They sped through so many witnesses that
they had to scramble to schedu.le people to testify next week.

Friday, a series of electricians and carpenters described'in detail how they jacked up the home in Girdwood,
Alaska, and installed a lower story, and redid the electrical wiring. In some cases, employees for Veco Corp. --
whose executives were for years the leading campaign contributors to many Alask~ ~olitical candidates inclUding,
Stevens -- spent hundreds of hours devoted to 'wor~ on the senator's home. 81 - Stevens-207 g ..

Stevens faces seven felony counts of-lying on 'his Senate financial-disclosure forms. The 84-year-old senator is
accused of accepting more than $250,000 in gifts from the now-defunct oilfield services company and Allen.
Among.the.glfts.Stevens is accused of accepting ar:eIenovatiolJs~.to,his Gir:dwood t:1om~t that,Jif,te.c1Jt from its,
foundation and added a lower story, doubling it in SiZe,.

Some Veco employees spent months'at the Stevens home, according to testimony. Beginning in OCtober iooo,
Roy Dettmer of Littleton, Colo., spent four months working six days,a week, 10 hours a day, installing electric
service in the new sections of the house and rewiring much of the old. '

Every morning, he'd drive'to the Port of Anchorage, where he was assigned to work, sign in using his badge, t~en

..
drive 45 miles.to ~irdwood. In the evening, he wOl!ld have to "badge out" agail) back at the port before he could
go to hi~.hotel, D.ettr:ner~s pay at Vec() a~.the !il}1~ ~a_sbetw~~ i~;~~~;~ hl)i'i~u~.~i~~5orki~~
sChe~.~~~ O~\:iX weeks'on, two off, 'O'mer said he spent about 400 hours othe project.

Assisttt ~. Attorney Joe Bottini of Anchorage walked Dettmer through his tasks. The service en~rancehad
been at the rear of the original house, but that was now 15 feet in the air. Dettmer moved it to the other side of
the house in the new garage Veco built, requiring all the old circuits to be extended. That doubled the electrical
capaci'ty from 100 amps to 200 amps. That meant the generator that had been installed by Veco only the year
before had to be rewired and moved as well.

Veco bought the material from an Anchorage supplier, Dettmer said. The new kitchen built by Veco on the second·
floor also had to be wired.

Dettmer said he never met Stevens, but Catherine Stevens, the senator's wife, came around once. The Veco
supervisor, Rocky Williams, introduced him.

"We said 'Hi,' and that was it," Dettmer said.

Doug Alke, a Veco electrician, described installing a backup generator at the residence in the fall of 1999, the
year before the renovations that-doubled the Stevens home in size.

A!ke estimated that he spent an estimated 20 to'24 hours on the job, including coming back a few days after he
and another Veco worker installed the generator to check on whether it was cutting on automatically each week
to recharge the batteries.

The journeyman electrician, who was paid about $19.50 an hour at the time, said he filled out an "overhead
number" on his timesheet, a code that described which client the work should be billed to. The number for the
Stevens job wasn't for a specific client like other jobs were, Alke said. Instead, it was an internal code used for
what he assumed were accounting purposes, he said.

Catherine Stevens stopped by once to bring workers muffins, said another contractor, Mike Luther, a cClrpenter
with Christensen Builders of Anchorage. He also saw Sen. Steven~,once, saying he was friendly and "talked to
everyone."

On his way out of the courtroom Friday, Luther waved to Stevens as he walked past the senator at the defense
table.

Friday, both prosecutors and Stevens' attorneys also made sure to familiariz~ the jUry with some terms that are
second-nature to Alaskans, especially those who w.ork on the North Slope oilfields. One of Stevens' lawyers,
Robert Cary, asked Alke what was a "hitch" on the North Slope.

"A 'hitch' is just a rotation," A~ke said. "It's slang. Six weeks on, two weeks off."

Alaska might be a very distant place for many of the jurors, but Gov. Sarah Palin's vice presidential candidacy
has made it more familiar than 'it once was. When Alke told the jury he was from her hometown of Wasilla, a
murmur of recognition shot through the courtroom.

Stevens, who has held office since 1968 and is the longest-serving Republican in the Senate, is in a tight re-
election contest with his Democratic opponent, Mark,Begich, the mayor of Anchorage.. S 208
. t- BI - tevens- 0
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Stevens indicted
False .reports, not illegal gifts, are the issue in the case

(07/29/0823:20:49)

Tuesday's indictment of u.s. Sen. Ted Stevens was a grim day in Alaska's history. Before his legal
troubles, Sen. Stevens had a distinguished career of public service dating back before statehood.
Now the man once hailed as "Alaskan of the Century" faces federal felony charges for allegedly
filing false information on official forms about $250,000 worth of gifts, supplied by the man who
was at the time the state's most powerful political operative, Veco's Bill Allen.

It's a shame the career of such an influential Alaska figure has sunk to this point. Regardless of
whether he is convicted, Sen. Stevens showed bad judgment in getting so financially entangled
with a lobbyist and political power broker who had already had run-ins with the law.

The federal indictment does not charge Sen. Stevens with bribery. It does allege that Bill Allen and
Veco were seeking official actions from Sen. Stevens, and sometimes got them. But there was no
quid pro quo for all the gifts he took, according to federal aut·horities.
, '

Instead, what the indictment describes'is a relationship of mutualback-scratching between a


powerful insider and a powerful politician. Alaskans have seen too much of that already in the Veco
scandal and elsewhere -- and that may help explain why Sen. Stevens was behind in his re-election
race even before the indictment was issued.

It may turn out that what Bill Allen did for Sen. Stevens did not break federal corruption laws or
Senate ethics rules. Nonetheless, Sen. Stevens will have trouble explaining to Alaska voters why
th~y sl1oulc! ~olerate such cozy arrangements between their elected officials and insid~rs who want
to influ~nce them.

BOTTOM LINE: Legal or not, Ted Stevens' dealings with convicted lobbyist Bill Allen are a black
mark against his distinguished career.

Safe Harbor

Its record is reassuring FBI - Stevens-20S!

Safe Harbor Inn, a transitional housing motel at Fourth Avenue and Sitka Street, wants to expand
to the old Ramada Inn in Muldoon. Some potential neighbors are worried that crime will go ,up and
_ property values down, that Safe Harbor wilLbe a magnet for street drunks. Some also complain-
that they didn't know such a facility might be coming to the neighborhood.

First, Safe Harbor is no homeless camp. It's a motel for people who have bl?come homeless but
who are trying to put their lives back together and work toward permanent housing.

Guests can't just walk in off the street. They have to be referred by a sponsoring agency. Guests or

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adn..com I Sen. Ted Stevent)atement on his indictment
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An~horage Daily News


Sen. Ted Stevens' statement on his indictment

(07/29/08 13:45: 10)

Statement from Sen. Ted Stevens, R-Alaska, on his indictment:

"I have proudly served this nation and Alaska for over 50 years. My public service began when I
served in World War II. It saddens me to learn that these charges have been brought against me. I
have never knowingly submitted a false disclosure form required by law as a U.S. senator.

"In accordance with Senate Republican Conference rules, I have temporarily relinquished my vice
chairmanship and ranking positions until I am absolved of these charges.

"The impact of these charges on my family disturbs me greatly.

"I am innocent of these charges and intend to prove that."

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FBI - Stevens-2082

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_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~___ _ ------'--=='"-=----"~- - __- ~_~ _ ~ ~_ ~ 6~o O"V\,
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Anchorage Daily News

Details of indictment of Sen. Stevens

.c07/29/0811:15:53)

Details of the seven-count indictment charging Sen. Ted Stevens, R-Alaska, wIth failing to disclose
more than $250,000 worth of renovations on his Girdwood, Alaska, home and other gifts he received
from VECO Corp., an Alaska oil services company, an~ its founder, Bill Allen:

-From 1999-2006: Stevens knew he was required to list any gifts of nominal value on his yearly
financial disclosure reports and "knowingly and intentionally sought to conceal and cover up his receipt
of things of value by filing Financial Disclosure Forms that contained false statements and omissions
concerning Stevens' receipt of these things of value."

-Summer 2000 to end of 2001: "VECO incurred over $200,000 in materials, labor and other costs in
connection with the work that VECO employees and contractors performed at (Stevens) Girdwood
Residence. These costs included; but were not limited to, approximately $81,775.18 in materials,
labor, architectural design and services, and other costs from approximately June 2000 to December
31,2000, and approximately $110,153.64 in the first three and a half months of 2001 alone."

-2002: "The work performed by VECO employees and contractors at the Girdwood Residence included,
among other projects, the Installation of a first-floor wraparound deck, a plastic roof between the first-
and second-floor decks, a heat t~pe system on the roof of the Girdwood Residence, and the
installation and partial removal of rope lighting on multiple portions of the property. These projects
cost VECO approximately $55,000."

-2004-2005: "Stevens contacted Allen and VECO employees multiple times to request that VECO
employees or contractors perform additional tasks at the Girdwood Residence. These tasks included,
without limitation, the installation of multiple kitchen appliances and maintenance on the heat tape
system on the roof of the Girdwood Residence.... Stevens contacted Allen and VECO employees
multiple times to request that VECO employees or contractors perform additional tasks at the
Girdwood Residence. These tasks included, without limitation, roof and gutter repairs, electrical
wiring, and the replacement of sensors."

-2006:. Allen assigned workers to repair the boiler an~ neating system at the Girdwood residence.

-In each case, the inaictment says, Stevens knew that the work on the house he often referred to as
"the chalet" was done by VECO employees and contractors. Stevens, however, "never paid or
reimbursed VECO at any time for the cost of materials provided and labor performed by VECO and its
employees at the Girdwood Residence," the indictment said.

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Anchorage Daily News

Unreported gifts tripped up Stevens


NO BRIBERY: Government says senator wasn't in a payback game with Veco.
By ERIKA BOLSTAD
ebolstad@adn.com
(07/30/0801:07:46)

WASHINGTON -- Sen. Ted Stevens got something from Veco and toe oil services company got
something.from Alaska's senior Republican senator, according to Tuesday's federal indictment of
the veteran senator.

But what Stevens got was not a bribe; it,was his failure to report what he got that's the problem,
according to the indictment and one of the top Justice Department officials overseeing the case,
who spoke to the press Tuesday during a news conference.

"Bribery is not charged in this case," said Matt Friedrich, the acting assistant attorney generaUn
charge of thecriminaf division or'the Department' of Justice. "Bribery requires proof of a specific
agreement of a quid pro quo, of this for that. This indictment does not allege such an agreement."

The indictment lays out numerous examples of things that former Veco chief executive Bill Allen
'wimt.ed and got from Stevens, such as helpl~1I1ding 'niultimillion dollar, multiyear federal contracts
with the National Science Foundation and assistance with international V.eco projects in Pakistan
and Russia.

The indictment also very carefully lists the things that federal investigators say Stevens received
from Veco and Allen -- and then didn't disclose as gifts on the annual forms he's required to file
with the Senate detailing his personal finances.

Yet "the indictment does not allege a quid pro quo," Friedrich said.

In other words, what the indictment does not do is say that Allen and Veco gave Stevens those
things specifically in exchange for what the company wanted Stevens to obtain for them.

"Bribery and gratuity cases are tough," said Donald Smaltz, a California lawyer who was app'ointed
as an independent counsel to investigate then-Agriculture Secretary Mike Espy for allegations he
took gifts from growers who had business with his department. "This makes an easier case for the
government."
. FBI - Stevens-2084
The federal'bribery statutes require prosecutors to show that a public official got something of
value in exchange for a specific act that. benefits the person who is bribing them, Smaltz said.
Federal bribery charges also carry a penalty of up to 15 years in prison -- far stiffer than five years
for making false statements. Stevel"!s was charged with seven ~ounts ()( mak,il}g Jals'e?j:C1teIT1E~Jlts
- - - on his financial disclosure forms. ,- - -

Often, secret recordings are the only way to prove outright bribery, said Smaltz, whose prosecution
of Espy ended in an acq'uittal. He points to the infamous Abscam case of the late 1970s, where
investigators had videotaped surveillance of elected officials accepting bribes. That was the key to
their convictions, Smaltz said •

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,.. Another more recent example came in Alaska: the conviction of former Alaska state Rep. Vic
Kohring, who was seen on FBI surveillance tapes accepting cash from Bill Allen.

liThe only reason the government was able to make those cases, was because they were using
undercover tactics and jurors ... were able to see precisely what was said by whom," Smaltz said.
"It's very difficult for the defendants to weasel their way out of those cases.

Read Erika Bolstad on our Alaska Politics blog: adn,com/alaskapolitics.

Excerpts from the indictment

"Beginning in or about May 1999, and continuing to in or about August, 2007, in the District of
Columbia and elsewhere ... STEVENS, while a sitting United States Senator, knowingly and .willfully
engaged in a scheme to conceal a material fact, that is, his continuing receipt of hundreds of
thousands of dollars' worth of things of value from a private corporation and its chief execLitive .
officer. II

"... STEVENS· took multiple steps to conceal his continued req~ipt of things of value from ALLEN and
VECO, Duri.ng the nearly seven-year period in which STEVENS received multiple things of value
from ALLEN and VECO, STEVENS filed and caused to be filed false annual Financial Disclosure
Forms for the years i999 to 2006 that did not report STEVENS' receipt of any thing of value from·
ALLEN and VECO, either as gifts or as liabilities, as required."

"... STEVENS, while during that same time period that he was concealing his continuing receipt of
things of value from ALLEN and VECO from 1999 to 2006, received and accepted solicitations for
multiple official actions from ALLEN and other VECO employees."

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FBI - Stevens-2085

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Anchorage Daily News

Alaska Sen. Stevens indicted; 'I am innocent'

By LISA DEMER', RICHARD MAUER and ERIKA BOLSTAD


Anchorage Daily News
(07/30/0800:51:35)

A federal grand jury in Washington, D.C., indicted long-term U.S. Sen. Ted Stevens Tuesday on
seven counts of filing false financial disclosures, each a felony charge that carries a penalty of five
years in prison and an unspecified fine.

With the indictment, Stevens, an icon in Alaska politics, becomes by far the most powerful
politician charged in the broad, four-year federal investigation into public corruption in the state. To
date, three.state legislators, a high-level official in Gov. Frank Murkowski's administration, two .
businessmen and a lobbyist have been conVicted, while two legislators are awaiting trial.

Stevens said he will fight to save himself and his long career.

"I am innocent of these charges and intend to prove that," he said in 'a prepared statement. "I
have proudly served this nation and Alaska for over 50 years."

At a news conference in Washington to announce the indjctment, Matthew Friedrich, acting


assistant attorney general for the Justice Department's criminal division, said Stevens would be
allowed to turn himself in. Stevens' attorney, Brendan Sullivan of Washington, was notified of the
indictment Tuesday morning shortly before it became public, Friedrich said.

'THINGS OF VALUE'

The seven-count indictment charges Stevens with making false statements by failing to disclose
"things of value" he received from Veco Corp., the now-defunct Alaska-based oil services and
construction company, and from its chairman, Bill Allen, in a scheme that stretched over ~ight
years.

At the same time, according to the indictment, Allen and other Veco employees asked Stevens to
intervene on their behalf with the government, and Stevens sometimes obliged.

Stevens received substantial benefits from his relationship with Veco that he never disclosed, the
indictment charged: improvements to his home in Girdwood; an automobile exchange in which he
received a new Land Rover worth far more than his 35-year-old Mustang; and household
appliances.

The federal Ethics in Government Act requires' all senators to file financial disclosure statements-
detailing their transactions during the previous calendar year, including the disclosure of gifts
above a specified value and all liabilities greater than $10,000.

At the news conference, Friedrich said the case involved false disclosures, not bribery, and no
specific actions by Stevens in return for gifts were charged, even though the indictment mentioned
some Veco requests and the favorable responses by Stevens and his staff,
FBI - Stevens-2086
adn.com I Alaska Sen. stevCj indicted; 'I am innocent'

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:> Some of the solicitations were made directly to Stevens and included requests for help by Veco on
its international projects in Pakistan and Russia; requests for federal grants and contracts,
including National Science Foundation contracts worth nearly $200 million; and assistance with
efforts to construct a natural gas pipeline from Alaska's North Slope.

The indictment comes just as Stevens is in the political fight of liis life to win a seventh term. The
fallout was immediate: Under Republican rules governing indicted senators, he had to step aside
from two key committee positions he earned through longevity -- his co-chairmanship of the
Commerce Committee, which oversees fishing and telecommunications, and his ranking position on
the defense appropriations subcommittee, from which he has sent millions in earmarks to Alaska.

Even with his famed cl~ut in Washington at least temporarily diminished, Stevens vowed to
continue his campaign. His presumptive Democratic opponent, Anchorage Mayor Mark Begich,
wouldn't answer questions about Stevens' indictment.
.
YEAR AFTER GIRDWOOD RAID

Friedrich said the Justice Department followed its own rules in seeking an indictment when the
evidence y,ras complete and sufficient to bring charges. The political calendar wasn't considered, he
said.

Allen, Veco's former chief executive, and Rick Smith, thecompany's>former vice president of
community affairs and government relations, pleaded guilty May 7, 2007, to providing more than
$400,000 in corrupt payments to public officials from Alaska. Allen and Smith are cooperating and
have been key witnesses in two trials so far.

Back then, there were no direct references in the Allen and Smith charges to gifts they provided to
Stevens, though they admitted making corrupt payments of $243,250 over five years to Stevens'
son Ben, once president of the Alaska Senate. Ben Stevens has not been charged and has denied
wrongdoing.

The charges against Ted Stevens come almost exactly a ,year after an FBI and IRS raid on Stevens'
home in Girdwood, the first time those agencies had ever raidedCthe home of a sitting U.S. senator.
At the time-the agents-documented the renovations made in 2000 that were overseen by Allen and
managed by his employees and contractors. The renovations doubled the size of the home.

Stevens has refused to discuss the investigation, except to say he paid every bill he received
connected to the renovation. He has refused to elaborate about whether that answer implied he
knew of work on the house for which he wasn't billed.

The indictment said Stevens made "multiple false representations" to reporters, his friends and his
staff about what he received from Veco and Allen. While it's no crime·for an.official to lie to the
media, prosecutors charged that those statements were part of his long-term effort to conceal
Veco's gifts and benefits.
FBI - Stevens-2G8?
MORE THAN $200,000 ON RENOVATIONS

- From the summer of-2000 to about December-2001 i Veco spent more than $200,000 on the
Girdwood renovations, including materials, labor and architectural design, the indictment says.
Much of that effort has already been the subject of extensive media coverage based on interviews
with contractors, ex-Veco employees and Girdwood residents who witnessed the work.

For instance, Veco and Stevens hired a construction firm, identified only as "Construction Firm A" in
the indictment, for the renovation project. The company matches the description of Christensen

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r . Builders of Anchorage, whose president, Augie- Paone, told the Daily News in May 2007 that he was
hired by Veco but sent invoices to Stevens and that Stevens paid by personal check from a new
account.

The charges say Stevens never paid Veco anything for the materials or labor provided by Veco, its
employees and contractors but clearly knew that Veco did a lot of the work.

Paone said he fully cooperated with the government. The indictment echoes his assertions in the
interview, adding that Construction Firm A focused on carpentry"and finish work, and Veco
employees did much more.

PRAISE FOR VECO WORKERS

In an e-mail to Allen Sept. 24, 2000, Stevens was full of praise for Veco and its employees,
according to the indictment. "We've never worked with a man so easy to get along with as
(unnamed Veco employee). Plus, everyone who's seen the place wants to know who has done the
things he's done.... You and (Person A) have been the spark plugs, and we are really pleased with
all you have done. hope to see you and the chalet,soon. best teds." The indictment goes much
further than what was previously known and reveals that maintenance on the house extended into
2006. When something went awry~ the charges say, Stevens asked Veco for help much as
someone else might call a plumber.

By 2006, the concealed "things of value" topped $250,000,

The indictment has no reference to whether the government intercepted calls made to Stevens
from a.ny of Allen's or Smith's phones that were Wiretapped under court order starting in 2005.
Once Allen agreed to plead guilty, on Aug. 30, 2006, he placed several calls to public officials,
inclUding Stevens, in a sting effort. The content of those calls ha~ not been disclosed.

The 1999 vehicle exchange cited in the indictment concerned a new car for Stevens' "dependent
child," not naming the person. At the time, his only dependent child was daughter Lily.

Allen transferred a new 1999 Land Rover Discovery, which he had bought for$44,OQO,to Steyens.
a
In exchange, Steven? gave Allen, a car collector with love of Fords, a 'f964 M~~tang an(j $5,000..
But the Mustang was Worth less than $20,000, according to the indictment.

Lily Stevens, now 27, is the sole child of Stevens' marriage to his second wife, Catherine. Lily, a
law clerk in Washington, is engaged to be married in late August. A call to her Washington office
was not returned.

Stevens' first Wife, Ann, was killed in the crash of a private jet in Anchorag~ in 1978 that injured
Stevens. Ted and Ann Stevens had five children together, including Ben.
FBI - Stevens-20SS
ALASKAN OF THE CENTURY

Stevens, 84, is the longest-serving Republican in the U.S. Senate. From 2003 to 2007, he was
Senate president pro tem and third in line to the presidency. With political power thatincreased
with his longevity, Stevens came to represent Ala-ska's clout in Congress. In January 2000, Stevens
was named "Alaskan of the Century," and the Anchorage airport was renamed in his honor that
July.

That was also the year of the bulk of the Girdwood home renovations.

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~ • N.lask~'s other senator, Lisa Murkowski, expressed shock at the indictment in a prepared statement
tod,ay. '

"I know Ted Stevens to be an honorable, hard-working Alaskan who has served our state well for
as long as we have been a state," she said. "As to the charges, we are at the beginning of the
cril11inal process and there is a judicial procedure in place that will be followed."

Murkowski, a Republican, probably owes her election in 2004 to Stevens, She was trailing former
Gov. Tony Knowles in the polls until the final weeks, when Stevens began blitzing the state with
commercials saying he needed her beside him in Washington.

Sen. Daniel Inouye, D-Hawaii, Stevens' best friend in the Senate, said in a brief statement: "In our
legal system, a man is presumed innocent until proven gUilty in a court of law.... As far as I am .
concerned, Ted Stevens remains my friend. I believe in him."

Stevens and Inouye are both World War II veterans and call each other "brother." When Stevens
became chairman of the Senate Cqmmerce Committee in 2005, he named Inouye vice chairman
.
rather than the usual term "ranking member" afforded the senior member of the opposite party.
,

Inouye returned the favor last year when Democrats took over the Senate and he became
chairman.

Richard Mauer and Lisa Derner reported from Anchorage and Erika Bolstad reported from
Washington, D.C. '

Stevens' statement

JULY 29, 2008 - 12:40 PM

I have proudly served this nation and Alaska for over'50 years. My public service began when I
served in World War II. It saddens me to learn that these charges have been brought against me; I
have never knowingly submitted a false disclosure form required by law as a U.S. Senator.
.
In accordance with Senate Republican Conference rules, I have temporarily relinquished my vice-
chairmanship and ranking positions until I am absolved of these charges.

. The impact qf these charges on my. family disturbs me greatly.

I am innocent of these charges ~nd intend to prove that. FBI - Stevens-2089

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T~EFBINEWS BRIEFING
PREPARED FOR THE FEDERAL BUREAU OF INVESTIGATION BY BULLETIN NEWS 'M'M'.BULLETINNEWS.COWFB!

TO: THE DIRECTOR AND SENIOR STAFF


DATE: WEDNESDAY, JULY 30, 2008 7:00 AM EDT

TODAY'S EDITION
FBI News
Stevens Indicted On Charges Of Failure To Report VECO Gifts 2
The Error! Bookmark not defined.
FBI Helping Philadelphia Police Fight Crime In Violent Neighborhood 4
Counter-Te~rorism
Miller Testifies At Hamdan Trial About Interview With Bin Laden 5
Citing Pistole Speech, AI Haramain Seeks Reinstatement Of Lawsuit 6
Rand Study Questions Bush Antiterrorism Strategy 6
ACLU Claims Fusion Centers Lack Oversight, Threaten Civil Liberties 7
Three Environmental Activists Charged With ELF-Inspired Vandalism 7
US, Iraq Seen Moving .Closer To Security Pact'?
Iraq Reconstruction Costs Estimated At Nearly $120 Billion 7
US, Iraqi Forces Launch Offensive In Diyala Province 8
Political "Turf War" Said To Threaten Iraqi Oil Industry 8
10C Lifts Ban On Iraqi Athletes 8
White House Responds With ~Skepticism' To Pakistani Overture 9
US Envoy Expresses Concem About Northern Alliance Buildup 9
Friedman Urges Caution On Afghan Troop ·Surge." 9
Criminal Investigations
Former Newark Mayor Sentenced To 27 Months In Prison 10
Cuyahoga Commissioner Releases Details Of Evidence Sought By FBI 10
Donaghy Sentenced To .15 Months In Prison 11
Boston Police Officer Sentenced To Prison For Drug Protection Conspiracy 11
JUdge Rules New Mexico Securities Broker Should Be Banned For Paying Bribes.12
Five FLDS Members Arraigned In Texas On Child Abuse Charges 12
FBI Investigating Beating Death Of Illegal Alien In Pennsylvania 12
Michigan Student Will Not Be Charged Over Noose Incident 12
FBI Joins Investigation Into Noose Mailed To Orlando Commissioner 12
Indiana Police Investigating Cross Buming In Black Family's Yard 12 FBI - Stevens-2090
Masked Gunman Steals $500,000 In Jewelry From Salesman In Arkansa~ 13
Suspicious Devices Cause Bomb Scare At Ohio Post Offices 13
Boston Man Accused Of Kidnapping D~ughter "Very Elusive And Secretive." 13
Financial Crime & Corporate Scandals -
Banker Arrested In Argentina On US Embezzlement Charges 13
Former Enron Subsidiary CEO Agrees To Insider Trading Settlement 14
New York Judge Dismisses Fraud Suit Against UBS 14
Siemens Seeks Damages From Former Executives In Corruption Scandal 14
CyberCrime

-------------------"'---=-=-~-~-~-~,-,~~-
.1.
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.. us Child Porn Fugitive Arrested In Philippines 14
Other Washington News
Feinstein Still Questions Dismantling Of California Corruption Unit 14
IG Report Sparks Debate Over Propriety Of Political Hiring 15
ICE Probes Federal Employees Who May Have Obtained ~ake Diplomas 15
SEC Extends limits On Short Selling For Some Financial Stocks 15
FTC Pressures Food Industry To Stop Targeting Kids With Junk Food Ads 15
Lawmake~ Reach Deal On Safe Toy Legislation 16
Federal Judge Seeks SCOTUS Review Of Drug Dealer's Sentencing 16
International News
Karadzic Extradited To The Hague As Protesters March In Belgrade 17
Bush Meets With Chinese Dissidents 17
Bush Signs Bill Tightening Sanctions On Burma 18
Rice To Host Latest Round Of Mid~ast Talks 18
Rice Urges Iran To Accept Economic Incentive Package 19
Ecuador Calls For Closure Of US Air Base 20
The Big Picture:
Headlines From Today's Front Pages 20
Washington's Schedule:
Today's Events In Washington 21
FBI NEWS
Stev~ns Indicted On ChC[lrges Of Failure To ~eport VECO Gifts._ ABC World-News (7/29, story 4,.2:25,
Gibson,. 8.78M) reported, "Well, there was something of a political earthquake in the US Senate, todai A seven-count federal
indictment was filed against Senator Ted Stevens of Alaska, the longest serving Republican in the Senate, on charges he
concealed more than $250,000 of gifts and services from an oil company,. which helped renovate his home in Alaska: ABC
(Tapper) added that "Stevens resigned from his leadership po-sts in two key committees...after becoming the :11th sitting US
senator in American history to be indicted." .,. Matthew Friedrich, Justice Department Criminal Division: "These items were
not disclosed on Senator Stevens' financial disclosure forms, which he filed under penalties of perjury, either as gifts or as
liabilities." ~ .. Tapper: "His RepUblican colleagues, today, stood by him." Sen. Arlen Specter: "I've known Ted Stevens for 28
years, and I've always found him to be impeccably honest."
The CBS Evening ~ews (7/29, story 3, 1:30, Couric, 7.66M) noted that "for several years as President Pro Tem, he was
third in line to the presidency. But now...Stevens is facing criminal ch~rges: .., Friedrich: "These renovations are alleged to
have.included the addition of a new first floor.with multiple bedrooms and a bathroom as well as a finished'full basement."
CBS (Axelrod) added: "The feds say they've got Stevens for not including the work on federal disclosure forms, but
prosecutors stopped short of charging Stevens with actually taking a bribe, Another case whe~e it's not the crime, it's the
cover-up." Andrew Cohen, CBS News legal analyst: "We've seen this pattern over and over again with high-profile figures
from Martha Stewart to Lewis Libby, and now to Ted Stevens."
NBC Nightly News (7/29, story 4, 2:00, p., Williams, 9.87M) reported, "In a written statement, Senator Stevens said
today's indictment 'saddens' him, and that he has 'never knowingly submitted a false disclosure form." But analysts say this
could be a fatal blow to his political future." Chuck Todd, 'NBC News political director: "Senator Stevens was considered one
of the most vulnerable Republicans running for reelection in 2008. Now, with an actual indictment hanging over his head, it's
probably impossible for him to survive." Williams: "Prosecutors say they brought the charges when the case was ready, and
the Alaska election was not afactor." •
Fox Special Report (7/29., lead.story, 2:55,.Hume),reported, "The Justice Department says.Stevens falsified disclosure
statements and lied to investigators to cover it up. Steven says he is innocent." .., Fox News (Bream) noted that in an
interview Monday with Alaska Public Radio, Stevens said, "' really believe that' have nQt done anything that is wrong in the
process of my official activities: Bream: "Even though this is a Republican administration, the Justice Department wanted to
be very clear that this election year indictment is arriving now only because the case was ready for prosecution." Friedrich:
·Partisan politics should play no part either in what charges we bring or in things like, you know, the timing of indictment or
that type of thing. That policy has been followed to the letter in this case:
FBI - Steven 5- 2091

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The AP (7130, Jordan) reports that Stevens "is the first sitting U.S. senator to face federanndictment since 1993. He
declared, 'I am innocent of these charges and intend to prove that.'· The AP notes that the "indictment...caps a lengthy FBI
investigation that has upended Alaska politics and brought unfavorable attention to both Stevens and his congressional
colleague, GOP Rep. Don Young. Both are running for re-election this year." VECa founder Bill Allen "agreed to cooperate
with the FBI as part of a plea deal for a lesser penalty. That cooperation included letting the FBI tape his phone calls with
Stevens, though those calls do not appear as part of the indictment."
The Washington Post (7/30, A1, Johnson, Kane, 696K) reports, "Sen. Sheldon Whitehouse...said federal prosecutors
would be very careful about bringing such a highly sensitive indictment, especially in the months before an election. 'You go
over it and go over it and go over it, to make sure you got it right,' he said. 'It's more of making sure you've got it all right, and
then, in the DaJ's case, make sure you've got all the appropriate sign-offs from above,'" At yesterday's press conference,
"Friedrich said prosecutors closely followed internal protocols for bringing criminal charges against elected officials. 'We bring.
cases based on our evaluation of the facts and the law,' he said. 'We bring cases when they are ready to be charge, and
that's what happened here,' Stevens will be allowed to surrender to authorities on his own terms, Justice Department officials
said."
The Alaska Daily News (7/30, Demer, Mauer, Bolstad) reports, "With the indictment, Stevens, an icon in Alaska politics,
becomes by far the most powerful politician charged in the broad, four-year federal investigation into public corruption in the
state.... Stevens said he will fight to save himself and his 'long career." The Daily News notes, "At the news conference,
Friedrich said the case involved false disclosures, not bribery; and no specific actions by Stevens in return for gifts were
charged, even though the indictment mentioned some Veco requests and the favorable responses by Stevens and his staff.
Some of the solicitations were made directly to S,tevens and included requests for help by Veco on its international projects in
Pakistan and Russia; requests for federal grants and contracts, including National Science Foundation contracts worth nearly
$200 million; and assistance with efforts to construct a natural gas pipeline from Alaska's North Slope.,"
The Wall Street Journal (7/30, A3, Perez, Wilke, Carlton, 2.07M) reports, "The indictment unsealed Tuesday was
narrow, given the breadth of the year-long investigation by the Justice Department, FBI, Internal Revenue Service, and other
agencies. Beyond Mr. Stevens's alleged ties to VECa, the FBI is continuing to look into the involvement of Mr. Stevens and
his business partners in a variety of real-estate deals in Alaska and elsewhere, people close to the federalinvestigatiqn ~aid.
In addition, these people said, the FBI has been investigating whether business partners, friends or relatives may have
benefited from earmarks or other federal spending backed by the senator.,· The Journal notes, "In the indictment...
prosecutors didn't allege any quid pro quo in Sen. Stevens's relationship with VECO., However, prosecutors alleged that
during the time that Sen. Stevens concealed the gifts, he 'could and did use his position and his office on behalf of VECO,'"
The New York Times (7/30, Johnston, Herszenhorn, 1.12M) reports that the indictment "comes nearly a year to the day
after F.B.1. agents raided the senator's home as part of a long-running and expansive public corruption investigation in
Alaska. Mr. Stevens was informed of the indictment through a telephone call to his lawyer on Tuesday morning and was
allowed to surrender instead of being arrested. ... Mr. Stevens declared his innocence and his intention to fight the charges
against him in astatement posted on his Web site. 'I am innocent of these charges and intend to prove that,' he said.
The Washington Times (7/30, Lengell, 83K) notes, "Other members of Congress currently under indictment include Rep.
Rick Renzi, Arizona Republican, who is facing federai wire fraud and money laundering charges and is retiri.ng at the end of
this term, and Rep. William J. Jefferson, Louisiana Democrat, who was indicted on racketeering and bribery charges. Nearly
a dozen other members also have reportedly come under investigation for corruption." Senate Minority Leader Mitch
McConnell declined to comment 0" the accusations against Mr. Stevens." Senate Majority Leader Harry Reid "also said little
aboy,t Mr. Stevens' legal trouble, and would not indicate whether the Republican conference should ask the lawmaker from
Alaska to step down from the chamber." .
Roll Call (7/30, Yachnin) reports, "Stevens has previously asserted that he personally paid outside contractors for the
home renovations - FBI agents raided the property in 2007 as part of the ongoing investigation - although he has said
VECa personnel did review bills from those contractors. But Allen, who along with another .high-ranking VECa official
pleaded guilty in May 2007 to providing more than $400,000 in payments to Alaska state officials, has testified in court that he
used company funds to pay for some of the construction costs as well as provided company employees to perform the
remodeling work." However, Roll Call also notes that Friedrich said, "Thjs indictment does not allege a quid pro quo.~
.Q.Q (7/30, Hunter,- Staff) reports, "Stevens' closest friend in the Senate and a fellow World War II veteran, Hawaii
Democ~t Daniel K. Inouye, said Stevens should be considered 'innocent until proven guilty,' adding that the indictment should
not impact Stevens' ability to do his job. Another fellow World War II and Senate veteran, John W., Warner, R-Va., said
Stevens has 'been a hero and a fighter, and he's been a fighter for his country's interests and a fighter for his state ever
since.'" .
On PBS' NewsHour (7/29, Lehrer) the Washington Post's Carol Leonnig said, "What's alleged is a failure to disclose and

FBI - Steven 9- 2092

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concealing these gifts, which is very serious, but bribery is much more serious and much more difficult to prove. That is,
indeed, what prosecutors and investigators began investigating, concerns that the senator may have been receiving
something of value in aquid pro quo...but that is not what is charged. And that has, of course, caused a lot of discussion in
Washington today about whether or not the prosecutors essentially just didn't have enough evidence to prove it or didn't
believe that it occurred."
The Los Angeles Times (7/30, Hook, Murphy, 8331<) notes, "The high political profile that Stevens, 84, has established
could help him ride out, at least initially, the uproar triggered by his indictment Tuesday on charges that he failed to report gifts
worth a quarter-million dollars. The first threat to his hold on power will come next month, when he faces a challenge in his
state's Aug. 26 Republican primary. If he survives that, Stevens will face atough Democratic rival in November."
The Hill (7/30, Raju, Bogardus), Seattle Times (7/30, Bemton, 2171<), FinanciaLTimes (7/30, Luce), AFP (7/30), and
NPR's All Things Considered (7/29, Kaste, Norris) also report on Stevens' indictment, as did CNN, Fox News, MSNBC, CNBC
and Bloomberg TV throughout Tuesday afternoon and evening. Additiomilly, the AP (7/30, Davis), McClatchy (7/30,
Lightman) and the Washington Post (7/30, AB, Cillizza, Kane, 696K) analyze the expected political fallout for the GOP..
Stevens Delayed Lifting Of Pakistan Sanctions Until VECO Dispute Resolved. The Los Angeles Times (7/30,
Neubauer, 833K) reports that in 1999, the government of Pakistan was "desperate for the removal of powerful military and
economic sanctions imposed after the country conducted nuclear tests in 1998. Many hundreds of millions of dollars in trade
was at stake. Stevens was the chairman of the conference committee that was considering allowing that change. But first,
according to Capitol Hill sources, he made it clear that he wanted Pakistan to resolve a multimillion-dollar dispute" with
VECO. The company "is at the heart of the Stevens indictment handed down Tuesday" and prosecutors outlined hundreds of
thousands of dollars in financial favors VECO allegedly did for Stevens. What was less clear was what Stevens did for VECO,
though the indictment mentions - without elaboration -- that VECO asked for his help with projects in Pakistan and Russia,
among other favors."
Other Indictments Seen As Possible. The AP (7/30, Quinn) reports that Stevens "could be the biggest prize caught in
awidespread federal investigation into corruption of Alaska politics, but his indictment might not be the last. The offices of six
state lawmakers were raided two years ago, and all but two have either been charged or found guilty. The only exceptions
are Stevens' son, Ben" and Sen. Donny Olson." Rep. Don Young "is also under federal investigation and his campaign is
hemorrhaging money on legal fees with a primary against a formidable opponent, Lt. Gov. Sean Parnell, less than one month
away." The AP notes, "The FBI is investigating Young's fundraising practices. He has not been charged. Federal authorities
are also investigating an unrelated earmark for a Florida hig~way interchange sought by a developer who was also a
campaign contributor."
More Commentary. The Washington Post (7/30, A14, 696K) editorializes" "It is notable that prosecutors sought only
false-statement charges against Mr. Stevens for failing to report the alleged gifts; despite the language in the indictment about
Mr. Stevens's alleged help for Veco, he was not charged with the more serious offense of taking a bribe or illegal gratuity.
Nonetheless,theJacts as por!rayed in the indictment appear devastating Jar Mr. Stevens, who was,already facing Cil diffifuJt
reelection race this year." The Post adds" "Mr. Stevens said, in a statement posted on his Web site yesterday, that he was
'innocent of these charges' and had 'never knowingly submitted a false disclosure form.' We look forward, as we imagine his
constituents do, to hearing the senato~s explanation of how" exactly, he thought all these renovations were being financed."
The Wall Street Journal (7/30, A14, 2.07M) editorializes that the Stevens indictment "is another blow to the Republican
Congressional reputation for honest government .- as well as the party's chances of avoiding big losses in November. Minority
parties don't typically defeat a majority when more of their own Members are being indicted for corruption. ,'" If Mr., Stevens
insists on running again, Alaska Republicans will have a chance to render their own verdict in an August 26 Senate primary.
Some political hygiene would seem to be in order.,"
Meanwhile, New Republic senior editor Michael Crowley writes in a Washington Post (7/30, 696K) op-ed, "Stevens says
he is innocent, but if he's convicted, few tears will be shed in Washington. Stevens cultivated a tyrannical image, and
personalized politics to an extreme degree, dividing the world into friends and enemies and showing no mercy. This outlook
carried him to great heights. But, nourished by the culture of a Republican-dominated Congress, it eventually became toxic."

FBI - Steven 5- 2093


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Anchorage Daily News

Stevens' trial scheduled before election

By ERIKA BOLSTAD
ebolstad@adn.com
(07/31/0818:55:49)

WASHINGTON - Sen. Ted Stevens will have the opportunity to clear his name in a federal court
before the Nov. 4 election, but a judge seemed unlikely to move the case to his home state where
jurors might be more sympath~tic to the 84-year-old political titan.

The Alaska Republican made his initial appearanceThursday aft~rnoon in federal District Court in
Washington. He pleaded not guilty to seven counts of failing to disclose gifts investigators say he
received from Bill Allen, the former chief of the oil services company Veco.

The ' 84-year-old lawmaker, a former U.S. Attqrney, prosecuted wrongdoers in Alaska in the 1950s
and has filed briefs with the Supreme Court. But Thursday's court appearance was his first as a
defendant in a criminal case.

Stevens isn't trying to "ask for any special favors because he's a senator and served 40 years in
the Senate," said his lawyer, Brendan Sullivan. BiJt, "he'd like to clear his name before the election.
This is not a complex case. It should be one that moves quickly."

U.S. District Judge Emmet G. Sullivan set a tentative trial date of Sept. 24

"The reason for your request is not an insignificant one," the judge said. "I can appreciate why the
senator would like to have this matter commence and concluded before the election."

Stevens' attorney told the judge it was the first time in his career that he recalled asking for a
criminal trial to be moved at such a fast clip. On his way into the courthouse Thursday afternoon,
Stevens waved to the television cameras lining Pennsylvania Avenue, within walking distance of the
Capitol. He waited qUietly for the proceedings to begin and was greeted politely by the judge, who
welcomed him to the courtroom by saying "Good afternoon, senator."

Stevens said little during the hearing, but followed it closely. When it came time to enter his plea,
his lawyer did it for him. After the first segment of the hearing, Stevens left the hearing room with
his arms around his wife, Catherine, and one of his daughters, Beth. When it concluded, Stevens
and his family and lawyers took the elevator down to a side exit, where he was whisked away in a
black Cadillac.
.
Stevens' office issued a statement at the end of the day with the senator reiterating his innocence.

"I am humbled by all the outpouring of support, expressions of friendship, and. offers of prayers,"
the statement said. "This process has lasted for more .than a year, causing great distress to my
family and confusing the Alaskans who have put their trust in me for more than 40 years.

"When'all the facts come out at the trial, Alaskans will know that I continue to be a dedicated
public servant and that I am working hard for them every day."
FBI - Stevens-2094
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NEEDED: 500GB HARD DRIVE

Stevens is charged with making false statements about more than $250,000 worth of goods and
services that he allegedly received from Veco Corp., the now-defunct Anchorage-based oil services
and construction company, and from its chairman, Allen. The senator is the highest-profile
politician to be caught in the four-year-old federal corruption probe, which has led to the conviction
of three state lawmakers, a high-level official in Gov. Frank Murkowski's administration, two Veco
officials and a lobbyist. Two other state legislators are awaiting trial.

Prosecutors said they could be prepared to bring Stevens' case to trial at the end of September.
Brenda Morris, the lead Justice Department prosecutor on the case, also told the judge they could
begin handing over discovery materials in the case as soon as Stevens' attorney gave them a 500-
gigabyte computer hard drive.

Morris said the evidence they will share includes video and audio recordings and "consensual
monitoring," which is when one of the parties to a conversation has agreed to its recording but the
other person is unaware.

The need for such a large computer hard drive suggests that voluminous amounts of recorded
evidence will playa part in this trial, much as it has in other corruption cases brought in Alaska.

It's not clear whether prose!=utors will use recorded conversations between Stevens and Allen in'
court, but Allen's cooperation and that of the No.2 at Veco, Richard Smith, in the case has been
instrumental in other convictions. So have the surveillance videos and conversations recorded by
the FBI. . ,

The two pleaded guilty in May 2007 to making more than $400,000 in corrupt payments to public
officials from Alaska. Allen agreed to cooperate with investigators in return for leniency in his own
sentencing.

"It's generally understood up here that both Allen and Smith were engaged in a sting operation for
approximately six months after they agreed to cooperate," with federal investigators, said Doug
Pope, who represented one of theJobbyists who pleaded guilty, Bill Bobrick. He also represents
former state Rep., Bruce Weyhrau'ch; who is awaiting trial.

"A whole lot of telephone calls were recorded when they were talking to public officials," Pope said.
"I've listened to every tape they've produced, and some of which 'involve people who are involved
in the Stevens case. My take on it is that Allen and Smith were trying to set people up."

"ONLY THING THAT CONVICTED'VIC"

John Henry Brown, a lawyer for Vic Kohring, a former state representative, said that jurors
approached him after his client's trial and said that video evidence was what convinced the jury to
find him gUilty. '

"One of the jurors contacted us, and told us the only thing that convicted Vic was the last tape...
(when) Vic said, offhandedly to Bill (Allen), 'I won't vote on that if you don't want me to.' That was,
-really the only thing that convicted Vic,"'Brown said.

Brown also said that it could help Stevens to move the trial venue from Washington D.C. to
Anchorage, even though Judge Sullivan seemed disinclined to do so.

"I'm sure the (prosecutors) want to keep it in D.C. because everyone in Alaska loves Uncle Ted,"
Brown said.
FBI - Stevens-2095

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The judge set a hearing on Stevens' change-of-venue motion for Aug. 19, but questioned Stevens'
lawyer about why Stevens would push for such a motion when all parties had worked hard to find a
trial date-in Washington, D.C., that allowed the case'to be heard.before the election. .

Brendan Sullivan said that they thought about 90 percent of the witnesses in the case would be
from Alaska and that it would make it easier. If possible, they would like the judge to come to
Alaska, Stevens' lawyer said.

They-'re prepared to work around the geographic challenges, Morris said.

Stevens wasn't required to post bond, but he does have to surrender his passport and get
permission from the court if his duties as senator require him to lei:IVe the country. If convicted,
Stevens could face an unspecified fine and as much as five years in prison on each of the seven
counts.

Most of the alleged gifts to Stevens from 1999 to 2006 came during a renovation that doubled the
size of a house he owns with his Wife, Catherine, in Girdwood. The company's employees and
contractors performed architectural design services, put the.house on stilts and installed a new
three-bedroom first f1qor, a finished basement, a garage, a Viking gas range and a wraparound
deck, according to the indictment.

While Stevens paid a construction firm for its work, he never reimbursed Veco or its contractors,
even while staying involved in the progress of the work, the indictment said. Stevens also is
accused of trading his vintage Ford Mustang and $5,000 to Allen in the spring of 1999 for a new
Land Rover Discovery worth about $44,000, a car he told Allen he wanted for one of. his daughters.
Stevens' Mustang 'Na~ worth about $20,000 at the time, according to the indictment.

Meanwhile, as Stevens then served as the powerful chairman of the Senate Appropriations
Committee, Allen and VECO sought his help with international projects, grants from the National
Science Foundation and funding for a natural gas pipeline on Alaska's North Slope, the grand jury
charged in its indictment.

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FBI - Stevens-2096

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Anchorage Daily News

Stevens money a bit too tainted for some


GOP: Those facing re~election try to insulate themselves by donating funds obtained
from Stevens to charity.
By GREG GORDON
McClatchy Newspapers
(07/31/0801:25:56)
-
WASHINGTON ,.- Republican senators facing re-election challenges sought to insulate themselves
from indicted Sen. Ted Stevens on Wednesday by promising to donate to charity tens of thousands
of dollars they received from the veteran Alaska lawmaker's political action com~ittee.

Senate Minority Leader Mitch McConnell of Kentucky and Texas Sen. John Cornyn, the chairman of
the Republican Conference, h~d the way, with each disclosing that he'd relinquish $10,000 in
campaign donations from Stevens' Northern Lights PAC.

Minnesota freshman Sen. Norm Coleman, who's fighting to win re-election against comedian-
turned-politician AI Franken, decided to give away $20,000 that his campaign and his own
leadership PAC got from Stevens'PAC:;.

The GOP senators acted a dayaft~r Stevens was indicted on,' charges of lying to conceal more than
$250,000 in gifts from Veco Corp., a former Alaska oil services company at the center of a public
corruption scandal that already has netted seven criminal convictions.

North Carolina Sen. Elizabeth' Dole acted quickly on Tuesday, announcing that she'd give $10,000
from Stevens' PAC to a campaign to fight hunger.

,Freshman Sen. John Sununu:of·New:Hampshire made-a similar. decision-on-Wednesdayas-his


Democratic rival, former governor Jeanne.Shaheen, issued a press release charging that his re-
election campaign was funded,by $45,000 in "tainted" cash from Stevens and another $65,000
that the Alaska senator raised on his behalf.

Meantime, the Republican Party of Alaska on Wednesday disclosed that it's donated $34,500 it
received from Veco 'executives to a half dozen Alaska-based charities. The party received more
than $56,000 in donations from the company between 1997 and 2004, but spokesman McHugh
Pierre said that more than $20,000 of those funds had been spent when the corruption scandal,
became public in 2006.
FBI - Stevens-2097
Democratic Sen. Daniel Inouye of Hawaii, one of Stevens' closest friends, however, said he
wouldn't give away any of the $13,000 he received from Veco executives. He said he didn't solicit
the contributions, and "to my knowledge they were not made illegally."
- - - - -- - -- -- - -- - --~ - - -

Veco executives gave at least $35,OOO-to Stevens' PAC in recent years, Federal Election
Commission records show. Most of it came from former Veco CEO Bill Allen, who pled guilty last
year to making illicit payments to Alaska politicians and allegedly arranged for free renovation work
on Stevens' house in Girdwood. In all, Veco employees made more than $600,000 in political
contributions between 1993 and 2007,.virtually all of it to Republicans.

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In their effort to distance themselves from Stevens and Veco, the Republican senators are giving
away more money than the company's employees gave to Stevens' Northern Light~ PAC.

Republican senators, however, rejected calls to surrender money they received in previous election
cycles from Stevens' PAC, which,the GOP elder statesman routinely used to support his colleagues'
campaigns. .

Numerous Republican legislators last year donated to charities campaign money they received from
Allen and other Veco executives. But legislators Wednesday continued to try to draw an array of
ethical lines while trying to avoid any taint from the <;harges against Stevens. '

Sen. Lisa Murkowski, Stevens' Alaska Republican.colleague, receiv.ed $41,250 from Veco executives
for her victorious 2003-2004 campaign. Last year, she donated to charity $8,000 in donations from
Allen and former Veco vice president Richard Smith, who pleaded guilty to corruption charges last
year, but kept donations from other Veco executives. . .

Her spokesman, Mike Brumas, said Wednesday' that to give away donations from other Veco
employees would "impugn the integrity of a lot of good Alaskans."

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FBI - Stevens-20gB

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Anchorage Daily News

Sen. Ted Stevens to face judge in corruption case

By MAlT APUZZO
(07/31/0806:40:32)

Alaska Sen. Ted Stevens Is due In federal court Thursday to answer charges that he lied about
hundreds of thousands of dollars in gifts from an oil services contractor.

Stevens isthe Senate's longest-serving Republican and has been a dominant figure in
congressional politics for a generation. After being indicted on seven counts of lying on Senate
disclosure forms, Stevens was ordered to surrender in federal court and appear before a judge
Thursday afternoon. A throng of reporters and television crews awaited his appearance.

Stevens had been scheduled to appear at a pretrial services office earlier Thursday, to be
interviewed by court officials but, under an unusual arrangement, he arrived for that meeting
Wednesday afternoon, avoiding the media attention. U.S.. Marshal George Walsh, whose office is in
charge of booking defendants, said he was unaware of the arrangement until Thursday and was
disappointed that it would appear Stevens received special treatment.

Court spokeswoman'Jenna Gatski said Stevens made an early appointment with'a pretrial'services
officer. Though a judge's order called for Stevens to appear for that meeting Thursday, Gatski said
the pretrial office sets Its own schedule. Stevens appeared late Wednesday afternoon but within
business hours.

Stevens, a former federal prosecutor, has said little about the corruption investigation that has
dogged him for more than a year. Thursday's court hearing was likely to be no different. He was
e~pected to plea,d not guilty, but initial court appearances, are ,usually brief.

The indictment is a blow to the senator's re-election bid. Once a seemingly invincible political
figure, he now faces both Democratic and Republican challengers who hope his legal woes make
him vulnerable.

Some GOP colleagues have distanced themselves from Stevens. A spokeswoman for John McCain's
presid~ntial campaign said Wednesday that the indictment was a "sad reminder" that the next
president will have to work to rebuild the public's trust.

Nicolle Wallace said McCain and Stevens famously clashed over the appropriation process. McCain
regularly says on the presidential campaign trail that appropriations are subject to corruption that
causes voters to lose faith in government.

Stevens has steadfastly maintail1ed his innocence, 'and h,is campaign bas plec;lged, th~t St~\feo~ wJlI, ,
press on with his re-election race.

He would have to ask U.S. District Judge Emmet G. Sullivan for permission to travel. Stevens was
expected to remain free while he campaigns and attends to Senate business, but Sullivan was to
decide what rules the senator must abide by while he awaits trial.
FBI - Stevens- 2099

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Stevens, 84, is accused of concealing more than $250,000 in gifts and home remodeling services
he received from VECO Corp., a once powerful contracting firm. Two top VECO executives have
pleaded guilty to bribing state lawma~ers. The executives cooperated with the FBI and provided
information about Stevens.

If convicted, he faces up to five years in prison on each of seven counts.

The indictment stops short, however, of charging Stevens with bribery or other traditional
corruption charges. Despite winning cooperation from the VECa' executives and s~arching the
senator's home, the Justice Department said it could not prove a this-for-that corruption case.

His indictment is the culmination of an FBI investigation that for years has sent tremors through
Alaska's political system. Several state lawmakers have been charged and others, including
Stevens' son, Ben, remain under scrutiny.

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Anchorage Daily News

Stevens due" in court this morning

The Associated Press


(07/31/0808:51:51)

Alaska Sen. Ted Stevens is due in federal court Thursday to answer charges that he lied about
hundreds of thousands of dollars in gifts from an oil services contractor.

Stevens is the Senate's longest-serving Republican and has been a dominant figure in
congressional politics for a generation. After being indicted on seven counts of lying on Senate
disclosure forms, Stevens was ordered to surrender in federal court and appear before a judge
Thursday afternoon. A throng of reporters and television crews awaited his appearance.

Stevens had been scheduled to appear at a pretrial services office earlier Thursday to be
interviewed by court officials, but, under an unusual arrangement, he arrived for that meeting
Wednesday afternoon, avoiding media attention. U.S. Marshal George Walsh, whose office is iii
charge of booking defendants, said he was unaware of the arrangement until Thursday and was
disappointed that it would appear Stevens received special treatment.

Court spokeswoman Jenna Gatski said Stevens made an early appointment with a pretrial services
officer. Though a judge's order called for Stevens to appear for that meeting Thursday, Gatski said
the pretrial office sets its own schedule. Stevens appeared late Wednesday afternoon but within
business hours.

Stevens, a former federal.prosecutor, has said little about the corruption investigation that has
dogged him for more than a year. Thursday's court hearing was likely to be no different. He was
expected to plead not guilty, but-initial court appearances are usually brief!

The indictment is a blow to the senator's re-election bid. Once a seemingly invincible political
figure, he now faces both Democratic and Republican challengers who hope his legal woes make
him vulnerable.

Some GOP colleagues have distanced themselves from Stevens. A spokeswoman for John McCain's
presidential campaign said Wednesday that the indictment was a "sad reminder" that the next
president will have to work to rebuild the public's trust.

Nicolle Wallace said McCain and Stevens famously clashed over the .appropriation process. McCain
regularly says on the presidential campaign trail that appropriations are subject to corruption that
causes voters to lose faith in government.

Stevens has steadfastly maintained his innocence, and his campaign has Rledged that Stevens will
press on with his re-election race. - - -

He would have to ask U.S. District Judge Emmet G. Sullivan for permission to travel. Stevens was
expected to remain free while he campaigns and attends to Senate business, but Sullivan was to
decide what rules the senator must abide by while he awaits trial.
FBI - Stevens-2101

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a~n.com I Stevens due in cO this morning
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Stevens, 84, is accused of concealing more than $250,000 in gifts and home remodeling services
he received from Veco Corp., a once powerful contracting firm. Two top Veco executives have
pleaded gUilty to bribing state lawmakers. The executives cooperated with the FBI and provided
information about Stevens.

If convicted, he faces up to five years in prison on each of seven counts.

The indictment stops short, however, of charging Stevens with bribery or other traditional
corruption charges. Despite winning cooperation from the Veco executives and searching the
senator's home, the Justice Department said it could not prove a this-for-that.corruption case.

His indictment is the culmination of an FBI investigation that for years has sent tremors through
Alaska's political system. Several state lawmakers have been charged and others, including
Stevens' son, Ben, remain under scrutiny.

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FBI - Stevens-2102

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Anchorage Daily News

Supervisor says he erred about Veco labor costs

Anchoorage Daily News


(08/04/0801:25:06)

A former Veco employee backed away from an assertion in an interview published in Sunday's Daily News that
some !abor costs for the 2000 renovation of Sen. Ted Stevens' home in Girdwood were borne by an oil company.

David Anderson, who supervised the project for Veco, an oil field service company implicated in the government's
corruption investigation in Alaska, sai9 he submitted the time slips for the shop electricians who worked on the
Stevens house.

But on Sunday, he said he couldn't be s'ure how Veco accounted for the labor costs on its books.

Last week, Anderson said some of the labor charges were passed on to an oil company that was paying Veco to
build a North Slope module in its shop at the time, probably BP, though not necessarily with the knowledge of the
oil company. He affirmed that Saturday.

But on Sunday, Anderson said he was mistaken and only knew for sure that Veco covered the costs, not that they
were passed through to a Veco client.

:That accounting tooK place in a Veco office ou~side the scope of his job, he said Sunday.

Stevens was charged last week in a seven-count indictment with failing to disclose more than $250,000 worth of
gifts from Veco, mostly related to ren~>vations of his residence in Girdwood starting in 2000.

The indictment said Stevens failed to reimburse Veco for labor, materials and furnishings it provided Stevens
from 2000 to 2006.

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FBI - Stevens-2103
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'Anchorage Daily News

.Veco men sparked Stevens remo~el

By RICHARD MAUER
rmauer@adn.com
(08/03/0802:04: 591

Editor's note: Earlier versions of this story, online and in print, contained three paragraphs reporting' that ex-
Veco employee David Anderson said some of Veco's costs on the. Stevens house were passed along to an oil
company for which Veco was doing work. Anderson on Sunday said he was mistaken about this, and the three
paragraphs were removed from the story. Read a fuller explanation HERJ;. .

The idea to double the size of U.S. Sen. Ted Stevens' home in Girdwood by jacking it up and addin<g a new first
floor was hatched by Veco employees over drinks at the Alyeska Prince Hotel, according to tw'o of the
participants.
.
"This is what I'm thinking' -- I want to, expand Ted's house," then-Veco chairman Bill Allen told two of his trusted
employees, his nephew David Anderson and Robert "Rocky" Williams. "How can we do this?"

The conversation was recalled in interviews last week by Anderso'n and Williams, federal grand jury witn~sses
who may testify at Stevens' corruption trial scheduled ne,xt month. They said it took place in a suite at the
Girdwood hotel rented for the night by Allen, probably in the spring of 1999 or 2000, Anderson said.

Anderson said he eventually sURervised th~ start of the 2000 renovation project for Veco and continued to
respond to maintenance requests by Stevens and his wife over the next few years. He said Veco paid for most of
the work and' Stevens should have known it.

Williams said he too had a supervisory role on the project and that he made no effort to conceal his,employment
with Veco when Stevens came around. Anderson described his, recollections in a telephone interview last week
from his home in the Matanuska-SlJsitna Borough. Williams was interviewed at .his home in South Anchorage last
week and in 2007:

Stevens, who has represented Alaska in the Senate since 1968, was indicted Tuesday on seven federal felony
counts of failing to disclose on his annual financial statements more than $250,000 in gifts he allegedly received
from Allen and Veco starting in 2000. The Veco-organized house renovation, SUbsequent repairs and Veco-
supplied furnishings were central to most of the alleged violations.

Stevens says he is innocent and has vowed to fight for acqUittal. On Thuqiday, he asked for a speedy trial and
got it. A judge set a date of Sept. 24 in Washington, D.C.

Stevens has declined to answer questions about the ho'use except to once say that he'paid every bill he received.
His wife, Catherine, did not respond to e-mails to her husband's Senate and campaign offices for comment on
this story, and has preViously declined to discuss the Girdwood remodeling.

Bill Allen pleaded guilty in May 2007 to federal conspiracy, bribery and tax charges and agreed to cooperate in a
massive corruption investigation of Alaska politics. For the third time Friday, U:S. District Judge John Sedwick
granted a Justice Department request to continue Allen's sentencing, this time until at least February 2009. The
government's status report on Allen was filed under seal, prosecutors wrote, because "it discusses active criminal
grand jury i~vestigations and similar matters." . FBI - Stevens-2104

'BilL'S HOTSHOTTING'

The interviews with Anderson and Williams provide new details about the allegations in the Stevel1s indictment
from the perspective of two people involved in the construction project. Their stories.c1osely track the allegations
in the government's case, though in several·instances tney spoke'about work' and-furnishings provid~d to,the
. . . I Ct<1A:-IJr,.l -(3 (80-""'" )"37. <2..-.
Stevenses that were not directly mentioned in the indictment.

Anderson/ a ~ertifiedwelder by tra2 grew up with Bill Allen's son Mark i1Qnai. Bill Allen got his start there in .
the 1'970s/ with Veco getting contracts on the oil platforms in Cook Inlet. When Allen sold Veco last year/ the
company had annual sales of nearly $1 billion and 4/000 employees worldwide.

Anderson spent years working on the North Slope/ then moved to Anchorage in the 1990s when Veco opened a
metal fabrication shop in South Anchorage.

Anderson said Bill Allen began bri'1ging him into his inner circle/ first trusting him with making campaign
contributions that Allen would'iater -- and illegally -- reimburse with cash. Anderson said he built the giant
wheeled barbecue grill later used to roast pigs at fundraisers for Rep. Don Young. The cooker was originally built
for a party Allen planned to host for a Louisiana senator that was canceled/ he said.

"Pretty soon I'm out of the shop -- I'm doing all of Bill's hotshotting," Anderson said.

One of those jobs took him to a chalet on Northland Road in Girdwood -- the official Alaska residence of Ted
Stevens. Anderson wasn't sure of the year, but based on other documented events, it probably was 1999.

"I took a crew out there and we cleaned up," Anderson said. "Like a spring cleaning thing." Anderson had two or
three other Veco employees with him, and they spent four or five days removing downed limbs, taking out brush
and other tasks.

Ted Stevens wasn't there, Anderson recalled, but Stevens' Wife, Catherine, was at the home.
.
"Catherine kind of told us what she wanted done," Anderson said. "She was telling me, 'Let's get that out of
there, and that out of there."

Allen had ordered the cleanup and Catherine knew the crew.was from Veco, Andersl;>n said. "L~now she didn't
get a bill -- I kno'w because I was running the paperwork," Anderson said.

Before they were done, he said, Allen showed up.

'GIVE HIM SOME MORE ROOM'

"He was checking on it, and he brought Rocky (Willi~m)~) ou~, al1d (AII~Q) goes,. 'We need to talk,' " Anderson
said: They drove' over to the ne'arby -Alyeska Prince Hotel _.' now the Hotel Alyeska. Allen got a suite for himself
and rooms for Anderson and Wiliiams, the two ernployees said.

"We all met up there in Bill's stateroom," Anderson said. "Bill busts out the wine."

Allen had a question. "He goes, 'How can we expa.nd Ted's house? I want to give him some more room.' "

Anderson, in the middle of the yard work project, had been having a rough time convincing the neighbors to.
spruce up their own places/ he recalled. He said he told Allen that expanding the Stevens house horizontally
toward the prqperty lines of the quarter-acre lot· would only put it closer to the neighbors -- not necessarily a
good idea. .

"Me and RockY started talking about it -- why don't we just jack the house up? Which is what we di~.:'

In two interviews last year/ Williams recalled that at the time, there was talk of Stevens stepping down from the
Senate -- especially if he could win approval of oil drilling in the Arctic National Wildlife Refuge, a goal that has
proved elusive.

"Ted had actually wanted to retire a few years ag'o and Catherine never liked the original place," said Williams,
who said he had conversations with both about the house.
FBI - Stevens-2105
THE PLANS
Before any work could begin, Anderson said, a huge tree overhanging the stevens home had to be removed.
~, ~ -. 0 . 0 .
"I had to go in to Girdwood and I found these rustic-hippy tree cutters to come ou.t there and cut tha~ tree down.
That'was a big deal, cutting that tree down so that it didn't fall on the cabin," Anderson said.

The stump was about four feet in diameter; he said. Anderson didn't recall how much it cost to fell the tree and
buck up the logs. '

"It- was fairly spendy -- that was a big tree -- but Veco, not Stevens, paid for it," Anderson said. "Ted had
firewood -- they knew what was going on."

Anderson's next step was to get Veco engineers to design the addition. A Veco employee, John Hess, led the
team, Anderson said. .

"John Hess comes out, meets with me, meets with Rocky, and we started walking around· looking at stuff, kicking
it around -- how in the hell are we gonna d~ this?" .

The initials "JCH" are on the plans filed with the city's building department -- though the document~ themselves
have no reference to Veco, which, according to Anderson and the Stevens indictment, paid for the design work.

When the Daily News interviewed Hess in J.une 2007, he declined to talk about the Stevens project. Asked then
whether he drafted the plans, he said, "That's possible."

The city permits for the remodel were filed in July 2000 by Robert Persons, the Double Musky restaurateur and a
longtime friend of the Stevenses. Persons monitored the progress of the project when neither Ted nor Catherine
was around, Anderson and others said, and he is referenced in the Stevens indictment, though only as "Person
A."

-Persons didh't return several messages lefton his phone and in person at the Double Musky over the last two
weeks. In a brief interview in March, Persons said he doesn't doubt that Stevens believes hOe p-aid everything he
owed on the house. That's the way Stevens conducted business in a racehorse partnership managed by Persons,
he said: Whenever the partners were required to invest more cash, Persons said, Stevens.insisted on being the
first to put in.

"This shouldn't be happening," Persons said. "He's very strict about that sort of thing."

'A SAD PORTION OF MY LIFE'

Going through the Yellow Pag'es, Anderson found a house mover in Anchorage, Toney Hannah, to lift the house.

In an interview last year, Hannah said he first met with Ted and Catherine Stevens about the project in 1999, but
the work a~tually took place in the fall of 2000.

Once Hannah jacked up the house, Anderson said, "it was '!le, Rocky and Bob Persons, and we were putting in
floor joists." Allen dealt· with Stevens, he said. "I'm just the supervisor."
FBI - Stevens-2106
Hannah said in the interview last year that he sent a bil! to Stevens. Catherine paid by check, he said. He couldn't
recall how much and couldn't look up the figure, he said, because the FBI had his files.

Vecohired Christensen Builders for the carpentry work, owner Augie Paone told the Daily News·last year. Paone
said he sent his invoices first to Veco, then faxed them to Stevens, who paid by check. -He thought Stevens paid --
him at least $100,000 over the course of the project.

Paone's wife, Ruth, an officer of the company, said two weeks ago that neither she nor her: husband would
comment about the case now.

Stevens toRI reporters last year that he paid every invoice he received on the remodel.
.
"As apracticaLmatter,J will tell you. We palg every bill tha~ w~~ given to US,II Stevens tola reporters last July.

-~-- ----- ----


"Every bill that was sent to us has been paid, personally,- with our own money, and that's all there.is to it. It's our
own ,!:,on~y~.~1 0 . 0
In a handwritten note sent last summeno Wev Shea, the former U.S. Attorney for Alaska, Stevens said he paid
$130,000.

"This is a sad portion of my life -- it will take time to explain," Stevens said in the two-page note, which was
seized by the FBI after Shea told a Seattle Times reporter about it. "Catherine and I personally paid over
$130,000 for the improvements to our chalet in Girdwood. Someone -- or more than one -- keeps telling the FBI
that's not so .. Takes time to go back over five years to prove they are wrong."

In the indictment, prosecutors accused Stevens of misleading friends and staff about the Girdwood project, but it
doesn't say whether his note to Shea will be used as evidence of that allegation.

But the indictment appears to back up Paone's statements. It says invoices from "Company A," an apparent
reference to Christensen Builders, were sent to Stevens and paid by the senator by personal c~eck.

Those invoices, however, "did not include the labor costs of Veco employees and contractors and did not include
the costs of materials provided by Veco," the indictment says. Veco employees "installed electrical, plumbing,
framing, heating and flooring materials in the Girdwood Residence," as well as buying and installing fixtures and
appliances, the indictment says. Between the summer of 2000 and Dec. 31, 2001, those costs totaled more than
$200,000, the indictment says. . -

The electricians on the job were Veco employees, and the plumber, Mark Tyree, was a private contractor hired by
Veco, Ander?on said.

Veco absorbed the costs of material and Tyree's services, Anderson said.

A VECO JACKET

Among the electricians' tasks was to wire up a switch for a generator that would automatically turn on whenever
the power went out, Anderson said. Allen told him to buy an oversized power plant to install' in the back yard. It
was so heavy that Anderson had to order in a Veco crane from the shop to lift it over the garage from the
drivey/ay and set it in place in the back. -

It was another gift that Stevens got for free, ~nderson said. "I know, because I ran the paperwork -- I did all the
purchase orders." -

The generator is not mentioned in the indictment.

Anderson said he himself did some of the V~co-paid steelwork -- manufacturing a metal staircase -for inside the
home in the Veco shop, and making the external pillars that held up the second deck. Williams corroborated that
account.

"He's a welder, he knows how to design. He knew everybody at the fab shop," Williams said of Anderson.

Before the project was completed, Anderson had to leave for Oregon to attend to family matters after the death
of an aunt -- Bill Allen's sister. Williams stayed on the project.

Stevens himself inspected the work about three fimes that fall, Williams said. There was 1)0 secret about Veco's
involvement. .. .
FBI - Stevens-2107
.
"I wore a Veco jacket the whole tim~," Williams said. "This WqS n6 big covert deal."

According to the indictment, Stevens thanked Allen multiple times for work 9n the Girdwood house, starting with
the initial remodel. In 2000, the indictment says, Stevens sent Allen an e-mail praising a Veco employee whose
name was redacted from the indictment .

!'(W)e've never worked ~it~ 9 m.ClI1 s9 easy to get along-wlth.as [name of a VECO emploY.4?e], PI.us, .4?veryone
who's seen the place wants to know who has done the things rye's done: ..• You and [PERSON A] have been the
----- - - ------~_._- ------=---===-_..==----:--~~.
spark'plugs and we are really pleased with all you have done. hope to see you and the chalet soon."
." <:). '~.
Williams said Catherine Stevens wanted to put her touch on the place, w~ she and Stevens had bought as a
12-year-old hou~e in 1983.

"So she picked out the carpet, she picked out the tile," Williams said. "She made it her place and that was what
Ted wanted because I don't think he planned to be in politics at this point in time."

FALLING OUT WITH ALLEN

Anderson returned to Anchorage and resumed work on the home the following spring, he said, building the
ground-floor deck. The Viking grill, cited in the indictment as another gift from Allen to Stevens, was lifted onto
the upper deck and permanently plumbed to a gas line with solid pipe, Anderson said. Like the generator, it was
so heavy it took a crane to install.

"I knew them," Anderson said of Ted and Catherine Stevens. "Usually Catherine would c9me by. Ted didn't come
by that much," Anderson said. One day, there was a plumbing problem under the kitchen sink -- Anderson called
it a "blowout," using a term from the oil patch.

"Catherine called me and said, 'My god~ we've got to get this stopped.' I haq to drive out to Girdwood and fix it."
Anderson didn't remember the date, but said it was shortly after the renovation proj~ct was completed.

Anderson and Allen had a serious falling-out sometime after th~t. Anderson said that when he began dating one
of Allen's girlfriends, Allen became enraged and Anderson lost his Veco job. In one of the corruption trials last
year, the lawyer for former House Speaker Pete Kott attempted. to discredit Allen by asking him if he had ever
threatened to kill Anderson. Allen said he hadn't. Allen said Anderson w?s blackmailing him, but didn't elaborate.

Anderson denied bla,ckmailing Allen.

a
When Anderson moved to remote part of the Mat-Su Borough and adopted a low-key Alaska lifestyle, he
thought he was done with Allen, he'said. ' . -

Then one day a sedan appeared at his place. Inside were U.S. Treasury Department agents, he said. He'got a
. phone call from someone else -. an FBI agent who couldn't find 'the place. The agent was directed to the house.

T~at was Aug. 31, 2006 -- the dC!y teams of federal agents swarmed legislative offices in Anchorage, Juneau arid
'Wasilla: 'executingsearch warrants a'nd giving'thefil"st· public sigh that' a m'as'sive"hlvestigatioh Was unoel" way.
Agents had questioned Allen for the first tim~the day before.

Anderson said the agents wanted to talk to him as a key witness. He said he tol~ them he -had nothing to hide
and has 'been cooperating ever since.

Find Richard Mauer online at ~tdn.com/S.9ntaj:!/.rma_u~Lor call 257-4345.


FBI - Stevens-21GB
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Anchorage Daily News

Ex-Veco worker says t,e was mistaken about BP billing

Anch9rage Daily News


(08/Q3/08 19:04:21)

A former Veco employee backed away from an assertjon in an interview published in'Sunday's Daily News that
some labor costs for the 2000 renovation of Sen. Ted Stevens' home in Girdwood were borne by an oil company.

David Anderson, who supervised the p"roject for Veco, an oil field service company implicated in the government's
corruption investigation in Alaska, said he submitted the time slips for the shop electricians who worked on the
Stevens house. But on Sunday, he said he couldn't be sure how. Veco accounted for the labor costs on its books.

Last week, Anderson said some of the faDor charges were passed on to an oil company that was paying Veco to
build a North Slope module at the time in its shop, probably BP, though not necessarily with the knowledge of the
oil company. He affirmed that Saturday.

But on Sunday, Anderson said he was mistaken and only knew for sure that Veco coVered the costs, not that they
were passed through to a Veco client. That accounting took place in a Veco office outside the scope of his job, he
said Sunday. "

Stevens was charged last week in a seven count indictment with failing to disclose more than $250,000 worth of
gifts from Veco, most it related to renovations of his residence in Girdwood starting in 2000. The indictment said
Stevens failed to reimburse Veco for labor, materials and furnishings it provided Stevens -frol}l 2000 to 2006.

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-.
@ Mon Aug 4 08:33:12 UTC-0800 20081900 The Anchorage Dally
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FBI - Stevens-2109

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Anchorage Daily News

Veco hid constructi9n expenses .


STEVENS TRIAL: Bookkeeper says Allen wanted no paper trail.
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
(09/27/08 05: 12:28) ,

WASHINGTON -- Even as Veco Corp. was paying the bills for renovations on Sen'. Ted Stevens' home in
Girdwood, the ~i1 services company was concealing its activities in its own internal records, the corporate
~ bookkeeper testified Friday. .

Veco accounts manager Cheryl Boomershine testified that when she asked a c;o-worker to obtain the "who, when,
where and why" for a $2,000 expense claim for materials from construction foreman Rocky Williams, she got
back a note with 'orders that there should be no written records. .

"No who, per'Bill,"said the note, referring to Veco chairman Bill Allen. The "when" was August 2000 and the
"when~" was Girdwood, bu~ there would be no "why," wrote the. co-worker. @ .
"No paper trail per Bill' Allen per Rocky," she said.

Anyone examining the Veco books might have thought that the company was spending tens of thousands of
dollars' on business consultants, ·not Stevens. Testifying on the second, day of Stevens' trial for failing to disclose
more than $250,000 in gifts fr9m Veco, B90mer~h~ne said she ~re?lted an account'for the project called '
'''Girdwood Consultants." ' '- ,

One of the "consuitants," she testified, was a plumber named Mark Tyree.

And Boomershine said there's no record that Stevens or his wife ever reimbursed the company for any
.
construction costs for projects that began in 1999 with a back-up generator that cost
,
$6,300 plus labor.

Boomershine' now works for-CH2M Hill, which'bought Veco'last year and-has been cooperating with'the'
government. Boomershine said that at the FBI's request, she searched through all the backup copies of Veco '
deposits to its bank accounts; she testified she found only two checks from Stevens.

Both payments were for reimbursements for flights originally paid for by Veco. 'One check was dated Aug. 8,
2003, for,$420.28, for a round trip'betweem Anchorage and Kenai.

The other was dated Aug. 31, 2005, for'$l,710,41 for a flight from Phoenix to Roswell ~md Hobbs, N.M. Allen's
son Mark raises racehorses in Roswell, and there's a track at Hobb~.
" FBI - Stevens-2110 .
WORKERS TESTIFY

Other tradesmen who renovated Stevens' home in Alaska in 2000 testified Friday about their work, as
prosecutors began building a case that the Alaska Republican.never paid Veco for ele.ctrical and carpentry work
'on the -so"'caIIed "chalet~"- - - -- -- -- ' - -

Allen, who has already pleaded guilty to bribing state lawmakers in Alaska, was announced as the government's
sole witness Monday.

Allen's testimony and secret recordings of conversations between him and Stevens are expected to be the
strongest evidence in the go\,ernment case against ~tevens. The trial, wl1ich had been. expected to take four
weeks, is moving so fast that prosecutors might finish their case in eight days. They sped through so many
witnesses, that they had to scramble to schedule people
"
to testify -next week.
~
. -8'3
8"
'i DEPL~Eq WITNESS LIST o o
Seven witnesses, mostly from AI~ska, have testified so far. The case was moving at such an unexpectedly brisk
clip that prosecutors ran out of witnesses Friday, drawing the ire. of U.S. District Court Judge Emmet Sullivan.
Many times a day since before the trial even started, Sullivan has pressed his point that jurors deserve utmost
respect, and one way to honor them, he has frequently said, is to ensure they have as little waiting time as
possible.

Sullivan was incredulous when. the lead prosecutor, Brenda Morris, told him that more witnesses were flying in
from Alaska on Sunday. -The normally soft-spoken jUdge thundered back: Why were they not here already?

"I'm not going to tolerate it," he said, and threatened to decree that the government's case had concluded since
there were no more witnesses available.

After a 10-minute recess for the government to come up with a revised list ~f witnesses for Monday, Sullivan had
calmed when he re-entered the courtroom. The government present~d Allen's name and nine alternates.

Prosecutors also said they ,coul~ wrap up their case a week from Monday -- the eighth day of trial.. They initially
had predicted their case would take three weeks.

HOW THE WORK WENT

Earlier Friday, a series of electricians and carpenters described in detail how they jacked up Stevens' Girdwood
home and installed a first story, and redid electrical wiring.

Some Veco employees spent months at the Stevens home, according to testimony.

One y..ras Roy Dettm~r, of Littleton, Colo. Beginning in October 2000, Dettmer spel1t four months working six days
a week, 10 hours a day, installing electric service in the new sections of the house and rewiring much of the old.

Every morning, he testified, he'd drive to the Port of Anchorage, where he was assigned to work,. sign in using his
badge, then drive 4S miles to Girdwood. In the evening, he would have to "badge out" again back at the port
before he could return to the hotel where he lived when he was in Alaska. Dettmer's pay at Veco at the time was
between $27 and $29 an hour,. plus overtime, he said. Working a schedule of six weeks on, two off, Dettmer
figured he spent about 400 hours on the project.

Assistant U.S. Attorney Joe Bottini of Anchorage walked Dettmer through his tasks. The service entrance had
been at the rear of the original house, but that was n"ow IS,feet in the air. Dettmer moved it to the other side of
the' house in the new garage Veco built, requiring all the old circuits to·be extended. That doubled the electrical
capacity from 100 amps to 200 amps. That meant the generator that had been installed by Veco only the y.ear
before had to be rewired and moved as well.

Veco bought the material from an Anchorage supplier, Dettmer said. The new kitchen built by Veco,on the second
floor also had to be wired. .

Dettmer said he never met Stevens, but Catherine Stevens, the senator's Wife, came around once. Williams, the
Veco superVisor, introduced him.
FBI - Stevens-2111
"We said 'Hi,' and that was it," Dettmer said.
.
Catherine Stevens stopped by once to bring workers muffins, said another contra.ctor, Mike Luther, a carpenter
with Christensen Builders of Anchorage. He also saw Sen. Steven? once.

"He was a friendly kind of guy -- he was talking to everyone," Luther said

On his way out of the courtroom Friday, Luther waved to Stevens as he walked past the senator at the defense
table.' ' .

i-Both sides have triecrto educate the"jury aoout Alaska through"the iNitnesses, 'aski~gtheni t~ describe the North
L-~ --' ---'--... ~ - -~ - - .
Slo~, t~e<Kenai
~
.- ~
River, Girdwood a{)he like.'
o
But recent events outside the courtroom have also contributed familiarization, as was obvious when the first.
witness took th~ stand Friday. When Veco electrician Douglas AI.ke gave his hometown as "Wasillai" a murmur of
recognition rustled from the jury box to the spectator section. '

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FBI - Stevens-2112
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Anchorage Daily News

Stevens: Government is hiding evidence

By ERIKA BOLSTAD
ebolstad@mcclatchydc.com
(09/29/0808:12:57)

WAStlINGTON - Sen. Ted Stevens is accusing prosecutors of hiding evidellce from a potentia.! witness that would
a
help the Alaska Republican clear his name before the election, and asked judge to declare a mistrial in his
corruption case.

There's no basis for a mistrial, said District Court Judge Emmet Sullivan. But he was not happy with prosecutors
and how they had handled the matter. Sullivan scolded one of ttie prosecutors, Nick Marsh, from the bench this
morning, telling him "someone's treading some very shallow water here."

"I'm flabbergasted," Sul,livan said.

The senator's lawyers, who asked for a speedy trial so that jurors could reach a verdict before Alaska voters go to
the polls Nov. 4, made their accusations in a motion filed at 11:58 p.m. Sunday. Stevens faces seven felony
counts of failing to report on his U.S. Senate disclosure forms more than $250,000 worth of gifts and home
renovations, chiefly from Veco Corp. and its chief executiv~ officer, Bill Allen.

Stevens' lawyers say that prosecutors declined to tell them everything they knew about a Veco worker named
Rocky Williams, who oversaw renovations at the Stevens home in 2001. Evidence will show that Williams worked
far less on the home than other company employees have suggested in their testimony, Stevens' lawyers said,
including one of the,c'ompany's bookkeepe'rs who took the stand Friday.

Williams was originally set to be a government witness, but prosecutors decided in the opening days of the trial
not to use him. They discussed the reasons why with the judge privately, in a bench conference, but did not say
why in open court. They did allude to Williams being "two weeks overdue" for sometliing in Alaska. And in court
filings, Stevens' attorneys refer to health issues that. include "coughing episodes." .

That will help them knock holes in the government's theory that the Veco work done on Stevens' home was so
extensive that he must have known he was getting freebies above and beyond the $160,000 his lawyers said he
paid a separate contractor for the work. -

Stevens!,attorneys did speak to Williams over the weekend, after they learned that he wouldn't be a government
witness.

"We got lucky," said one of Stevens' lawyers, ~obert Cary. "w.e got his lucky that he changed his prior posi~ion of
not wanting to talk to us." FBI - Stevens-2113

In court filings, Cary said that "Mr. Williams informed defense counsel that he spent nowhere near 8 hours per
day, 6-7 days per week, on the Girdwood home renovation project - in direct contrast to the timesheets that the
gQvernment has placed in evidence to support-its central-theory-that the-unpaid cost of the project--to-Veco was
$188,000."

The judge" offered Stevens' lawyers a chance to re-question Cheryl Boomershine, the Veco bookkeeper who
testified Friday about how much money the company spent renovating the home in Girdwood. Boomershine was
still in Washington D.C.-Monday morning and is expected to return to the courtroom today. Now, the defense
team will be able to ask her questions that might help bolster their case. - (f.31

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Anchorage Daily News

Allen won't testify in disclosure trial today


WITNESS LIST REVISED: Former Veto boss might be pushed back until Tuesday.
By RICHARD MAUER
rmauer@adn.com
(09/29/0800:52:16)

WASHINGTON, D.C. -- Bill Allen won't be testifying today after all in Sen. Ted Stevens' disclosure trial.

On Friday, the government ran out of witnesses because the trial had been running faster than expected.

After being scolded by the judge for keeping the jury waiting, prosecutors announced that Allen, its chief witness
and the former chief executive of Veco Corp., would open the day Monday. Allen was in town, and his lawyer,
Bob Bundy of Anchorage, had been a regular pres~nce in the back of the courtroom -- even for pretrial matt~
before the case opened on Thursday. ~

But Allen's scheduled testimony was also marked with controversy and possible delay -- the scope of cross
examination remains undecided. Prosecutors are seeking to limit the kinds of questions that Stevens' attorneys
can ask Allen in an effort to impeach him. In particular, they want to prevent questions about Bambi Tyree, who,
as a 14- or 15-year-old, told friends she had sex wit~ Allen. She is now 27 and is listed 'as a potential defense -
witness.

The, defense says Stevens' right to confront the witnesses against him includes exploring wh~ther Allen believed
he wouldn't be prosecuted over Tyree if he agreed to plead guilty to federal public corruption charges and testify
against Stevens and others.

On Saturday, the government revised its witness list for today, putting Allen back at least until Tuesday and
probably later. He's replaced with a list of 14 other witnesses, including Courtney Boone, Stevens' former
spokeswoman, and several former Veco employees.

Tyree's father's name has come up several times in the trial already, but in a different context. Mark Tyree, who
died in 2005, was the Wasilla plumber hired by Veco to install the pipes, fixtures and heating in the renovations it
provided for Stevens on his Girdwood home. Earlierthis year, the Daily News reported that over the years, Allen
provided-gifts, including cars, for Bampi Tyree and her family.

Anchorage police h,ave an open investigation of Allen for sexual abuse of a minor involving Tyree and at least one
other woman.

'In a motion filed Friday, the government sought to limit the questions of Allen and two other government
witnesses, Allen's nephew, David Anderson, and his go-to problem solver, Rocky Williams, who worked as the
foreman at Stevens' house. Both Anderson and Williams "are rumored to engage in excessive alcohol
consumptic.>n," the government acknowledged. FBI - Stevens-2114

Prosecutors asked the judge to "limit questioning of these witnesses when the cross examination strategy behind
the questioning will serve no purpose other than to impair the search for the truth; harass,_annoy, Or humiliate
the witness; improperly inflame the jury; and unfairly prejudice the government's case against defendant."

Stevens' attorneys said that. the Allen investigations have already been publicly reported.

"The defense has no desire to sm~ar any government Witness," it wrote. "The Sixth Amendment, however,
ensures that a criminal defendant will be entitled to'explore his accusers' credibility and any motivation to lie."

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Anchorage Daily News

Prosecutors defend sending witness home to Alaska

By RICHARD MAUER and ERIKA BOLSTAD


Anchorage Dai!y News
(09/30/0811:50:20)

WASHINGTON - Prosecutors shed more light Tuesday morning on why they chose to send home Robert "Roc~y"
Williams and not use him as a witness in Sen. Ted Stevens' corruption trial.

a
The head of the Justice Department's Public Integrity section said in court filing that it was his decision to send
Williams home to Alaska because he and. others in their office had serious concerns about his health. Williams,
who oversaw renovations at Stevens' home in Glrdwood'for Veco Corp., was scheduled to testify in Stevens' trial
bu~ prosecutors sent him home the day the. trial opened. .

Monday, prosecutors drew the ire of U.S. District Judge Emmet Sullivan, who threatened sanctions and asked for
a full explanation of what had happe'ned. Sullivan. said he was "flabbergasted" that the government team sent
Williams h9me without telling him or the defense. - , (§)
Stevens' team seized on the situation, calling for a mistrial and accusing 'prosecutors of Withholding potential
testimony from Williams that could help Stevens. They wer~ especially interested in potential evigence that
Williams worked far less on.the home than other company ~mployees -have sugge~ted in ,their testimony,
including ,:>_n~ of the cqm~any's I:lookk~epers Who too!< the stand-I~st week.

Such evidence could help Stevens knock holes in the government's theory that the Veco work done on his home
was so extensive that he must have kn<;>wn he was getting benefits above and beyond the $160,000 his lawyers
said he paid a separate contractor for the work done to double his home'in size.

Prosecutors said that when Williams met with government lawyers to prepare for his testimony, it was apparent
he had "serious, health-related issues that warranted medical attention." BetweeQ his Nov. 7, 2006, grand jury
testimony and-the present, Willia-ms-h'cfd'become "~Hmostuhret-bgnizaljle," prosecutors wrote -in their-filings. --
• -4 • • 1 -

"Mr. Williams had lost a substantial amount of weight, his abdomen' was distended (and had been preViously
drained of excess fluid), he appeared jaundiced, his face was gaunt, he had s'ubstantially, aged, he had· chronic
coughing 'spells, and he was Jrequently short of b r e a t h . " . .

He was so sick that William Welch, the head of the Justice Department's public integrity section, said he could
hear Williams "wheezing and coughing" in the corridor in the Justice Department long before he walked past his
office. FBI - Stevens-2115

There was no nefarious intent in sending him home to Alaska, Welch said, and accused the Stevens defense team
'of "win-at-all-cost" tactics.

"At no time did the government intend to engage in any type of. deception," he wrote.

The dispute over Williams dominated the proceedings Monday, although jurors never saw any of the discussions.

The Republican senator- faces seven felony counts of failing to report on his Senate disclosure forms more than
$250,000 worth of gifts and home renovations, chiefly from Veco and its chief executive o~ficer, Bill Allen.
Stevens, who is up for re-election Nov. 4, asked for a speedy trial so he'd have the opportunity to clear his'name
before Election Day.

Allen,. the-star witness, just took the stand this afternoon.

'. --- ---"'-----


_____e-_
Four.~her""witnesses took the starnuesday morning, including Stevens'(:\ner press secretary, Courtney
Boone, who testified about inquiri~he had received from a reporter abeWwork done on the Stevens home. The
reporter, Heather Resz, had called to ask about a tip she'd received alleging that V~co had built a deck on
Stevens' home without paying for it.

Boone said that when she asked the senator about it, his response was "the same as mine. 'What?' Shock," she
said. "He said I'd have to talk to Mrs. Stevens about it because she handled the work that was done at the house.

Boone testified she was told by Stevens' wife, Catherine Stevens, that the work was done by Christensen
Builders. That contradicts evidence from a carpenter who told the jury yesterday that he was paid more than
$4,000 by Veco to build the lower deck.

Resz, who worked for a now-shuttered weekly paper owned by Alaska Newspapers Inc., read jurors the
statement she received from Boone. In it, Boone told Resz that Stevens' wife had taken out a line of credit to pay
for the addition, and that the "modernization of their chalet included work on their deck."

Res! said she thought she had run into a dead end and didn't pursue the story.

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FBI - Stevens-2116
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Anch~rage Daily News

Allen testifies in Stevens trial

By Richard Mauer and Erika Bolstad


Anchorage Daily News
(09/30/08 14:48:21)

WASHINGTON -- The self-made Alaska construction executive whose testimony could bring to an end the 40-year
U.S. Senate career of Ted Stevens took the stand today in the corruption case against his fqrmer fishing buddy
and friend.

Bill Allen, the founder of Veco Inc. and the star witness in Stevens' trial; spoke fondly and with admiration of the
84-year-old Republican senator from Alaska. ' • ~

"We kind of really liked each other," Allen said this afternoon as prosecutors introduced a photo of the two men
. .
catching a- king salmon. "Had the same thoughts. Ted really worked hard. Ted loved Alaska and I loved Alaska."

But Allen also began highlighting a pattern of gift-giving that is at -the heart of the government case. against the
senator. Stevens, the longest-serving Republican in the'Senate, is accused of failing to report on his annual
financiClI disclosure forms more than $250,000 worth of gifts and home renovations, chiefly froni Veco and Allen.

ProseciJtor Joe Bottini, an assistant U.S. attorney from Anchorag'e, asked Allen wh~ther Stevens ever paid him
!?ack'for the estjmated $5,OOO_to.$6,OOO cost of the backup generator the senator asked 'Allen tOJinstalrin 1999,
in advance of the Y2K sc;are. '

"No,'1 Allen said.

"To your knowledge, did, he ever pay Veco back for the generator?"

-- -- know"
"I .don't -- , Allen said. "I don't
,. - think.so."

Allen, 71, is a key figure in the case against Stevens., He and former Veco vice president Rick Smith pleaded
guilty in May 2007 to bribing state lawmakers as part of an effort to push through the Legislature an oil
production tax fav,orable to North Slope oil producers. Both are cooperating with the government; neither has
been sentenced.

In the three-and-a-half days of testimony leading up to Allen's turn at the stand, jurors have heard from ·former
Veco employees and others who described under'oath _work they did on Stevens' home. Prosec4tors say_ Stevens
never paid for $188,000 worth of renovations paid for by Veco, in_c1uding-a deck, an exterior'staircase and .
extensive electrical work. FBI - Stevens-2117
Allen, who will continue his te~timony tomorrow, began by telling jurors the story of his hardscrabble origins ahd-
how he worked his way from teenage welder in New Mexico to wealthy owner of one of Alaska's biggest private
employers. Veco was sold
_.- -
-
last
- - - - to ~h_e Colorado construction
year ~ -
firm CH2M HiII.for.$380-million. - ~ - -- - - -

He also ~xplained to jurors that his halting speech is the result of a brain injury from a 2001 motorcycle accident.
He testified he has nq memory problems but sometimes has difficulty speaking the words he is thinking.
- . '
Allen described meeting Stevens.for t~e first time in the early 1980s at fLindraisers and events for Republican
Frank Murkowski, who was running for.the U.S. Senate and went on to a teqn as Alaska governor. Allen spoke
wistfully of their former "close, personal friendship" and how they used to go to "boot camp" in the desert
Southwest --where they would walk around; eating little and drinking only wine, "trying to get some pounds off."

-
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Whil~il/e~testified, Stevens lookOown at the tC!.9Ie, writing. It didn't Qar the. two former friends ever made
eye C!ontact. _' -,

Allen also described a complicated 1999 transactiofl involving a new Land Rover he gave to Ste'(ens' in exchange
>for $5,000 and a 1964-and-a-half Ford Mustang. Stevens wanted to sell the Mustang and buy his daughter Lily a
car, Allen said. He offered to give Stevens a $44,000 Land Rover Discovery that'he had bought for one of his
grandsons but decided not to giv~ him because he was unhappy with him. .

Stevens estimated the Mustang was worth $25,000. Allen thought it was worth less, $15,000 to $20,000. When
asked whether he thought he had gotten a good trade, he. said, "Not at that time, no."

Bottini then asked why he entered the agreement.

"Because I liked Ted," Allen said. -

Allen's courtroom testimony and secret recordings he made of conversations with lawmakers and lobbyists were
key to the Justice Department's seven previous successful convictions in a wide-ranging federal probe into
corruption in Alaska po)itics. -

The Justice Department convictions include those of three former Alaska state representatives, all on bribery
charges: Tom Anderson, Pete Kott and Vic Kohring. One·other state representative, Bruce Weyhrauch, is awaiting
trial, as is current state Sen. John Cowdery.

In the same investigation, Jim Clark, onetime chief of staff to former Alaska Gov. Frank Murkowski, pleaded
guilty in March to one count of conspiracy and agreed to cooperate with the federal investigation. Former
Anchorage lobbyist Bill Bobrick, who also cooperated with prosecutors, pleaded guilty in May 2007 to a single
conspiracy count.

If asked during testimony, Allen will not be allowed to -specifically name one of the state lawmakers he pleaded,
guilty to bribing: former Senate President Ben Stevens, Ted Stevens' son.

In public c~,arging documents connected to Allen's own case, Ben Stevens is referred to as "State Senator B."
Allen himself named.Stevens specificaliy in testimony In the trials'last year of two Alaska legislators but h,as been
instructed by government lawyers not to call "State Senator B" by .name-during the proceedi.ngs. Ben Stevens has
not been charged with any wrongdoing.

Ted S,tevens, who is up for re-election Nov. 4 and faces a spirited Democratic opponent, Anchorage Mayor Mark
Begich, asked for a speedy trial so he'd have the opportunity-to clear his name before Election Day.

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FBI - Stevens-2118

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Anchorage Daily' News

Six others testify for prosecution


STATEMENT: Serious health concern cited as reason witness was sent home.
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
(10/01/0801:07:02)

WASHINGTON -- Prosecutors flatly rejected the claims ofSen. Ted Stevens' attorneys that government witness
Rocky Williams was sent home to Anchorage to prevent him from helping the defense. .

In a sworn statement demanded by the judge in Stevens' trial, the head of the Justice Department's Public
Integrity section said it was his decision to send Williams home because he and others in their office had sertous.
concerns about his health:

Wiiliams, who oversaw renovations at Stevens' home in Girdwood fQr VecpCorp. from 2000-2001, was scheduled
to testify for the'government in Stevens' trial but prosecutors sent him home the day the trial opened. Ci)
Monday, prosecutors drew the ire of U.S. District Judge Emmet Sullivan, who threatened sanctions and asked for
a full explanation of what had happened. Sullivan saicfhe was "flabbergasted~' that the government team sent
Williams home without telling him or the defense.' - ,

Stevens' team seized on the situation,-calling for a mistrial and accusing prosecutors of withholding potential
testimony from Williams that cquld. heJp Steven?. They were especially interested in potential evidence that
Williams worke-d far less on the home than the hours recorded'in a report by the company'.s bookkeeper, who
testified earlier.

But Welch said that Williams actually made himself available to the defense when he:arrived in Washingto,n,
about Sept. 15. Williams said he called the firm and left his hotel and cell phone numbers, Welch said. They
nev~r called back, he said.

The government saidit-had-planned to call Williams-among the first-of.its·witnesses. But when Williams mej:.with
government lawyers to prepare for his testimony, it was apparent he had "serious, health-relate-d is'sues that
warranted medical attention." Between his Nov. 7, 2006, grand jury testimony and the present, Williams had
become "almost unrecognizable," prosecutors wrote in their filings.

"Mr. Williams had lost a substantial amount of weight, his abdomen was dis'tended (and had been previously
drained of excess flUid), he appeared jaundiced, his face was gaunt, he had substantially aged, he had chronic
, .
coughin~i' spells, and he was frequently short of breath," . . .

The, dispute over Williams dominated the' proceedings Monday, although jurors never heard any oF'the
discussions. By Tuesday, though, the Williams matter seemed all but forgotten, aside from the filing of motions
and affidavits. • . FBI - Stevens-2U9

The government breezed through six witnesses on its way to its main Witness, former Veco chairman 'BiJI Allen.
Each of.the-six in.some.way~was connected. to-unreported.gifts to. Stevens. or .his. allegecf ~fforts .tQ c;over ~h~m up.

The Republican senator faces seven felony counts of failing to report on his Senate disclosure forms more than
. $250,000 worth of g-ifts and home r~novations, chiefly from Veco and Allen.

Among the witnes~es was a reporter from Wasilla who had a tip that Veco had provided free construction services
for Allen and the Stevens press aide who successfully fended off the questions.

Heather Resz, then editor 'of the Anchorage ChroniCle, a "Veekly owned by Alaska Newspapers Inc., testified she
got'a strong-tip;aboutVe~o:andStev~ns.in 2003,.but wasunable,t6 cOnfirl'D,it tl)roughp.!JPUc re~~r~~ .or ot~e.r
~ ~ 43 I tfLf4- -A.,J .... 13>670 -.,i/\ -,e.
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She worked on the story, on and off, until 2004. About to give up, she called Courtney Boone, then press
secretary for Stevens in Washington, she testified.

"Her initial reaction was that she assured me that the senator was an ethical man," Resz said. But there was one
unusual aspeCt to that call. While Boone normally answered questions off the top of her head, in this case, she
said she'd get back. It took two days.

Boone testified that when she got the call, she was "shocked" by the allegation. "I think I said, 'What, are you
kidding? Seriously, are you kidding?' "

Boone demanded to know Resz's source and said she might not come back'with any information at all unless
Resz gave up the name. Resz refused. '

Still, Boone knew the problem could be serious, she said. First she told Stevens' chief of staff, then went to
Stevens directly. He too expressed shock,-she said.

But then he told Boone to get in touch with his Wife, whom he said had managed the household finances on the
remodel. She also testified that Stevens' friend Bob Persons, the owner of the Double Musky in Girdwood who
looked after the project for the Stevenses, called her about the project~

According to an e-mail account of that conversation Boone sent to Stevens, Persons told her the only thing Veco
provided was some used pipe for the deck. The rest of the work was handled by Christensen Builders, Boone.
wrote.

Boone also told Stevens that another aide in his office had spoken with Allen about the call from Resz. Allen said
L he knew who her source was: "he is (,l disgruntled foreman who was fired a couple of years ago," Boone wrote.

Four days of testimony in the Stevens case so far shows that Persofls knew Veco provided far more than used
steel. He has yet to testify, though. The Stevenses paid Christensen about $130,000 for his work, but that was
less than half the cost of the entire project, according to the testimony. The rest was picked by Veco.

'Even though she knew that Veco provided something, the approved statement Boone prepared for Resz made no
mention of the company, lijhifh m~maged the project and provided the architect, electricians, the plumber and
carpenters, along with tens of thousands of dollars in material.

"It would've stirred up more questions," Boone testified. "This was a story I would've wanted to put a stop to."

The statement, as Resz read it to the jury, asserted that a general contractor -- presumably Christensen --
"hanaled all the subcontracting and supply work for the project."

Boone had succeeded. Resz never published a story.

"I closed the file and threw up my hands," Resz testified. "It's another dead end."
FBI - Stevens-2120
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Anchorage Daily News

Allen: Veco did work, didn't bill Stevens

By ERIKA BOLSTAD and RICHARD MAu"ER


Anchorage Daily News
(10/01/0808:30:51)

WASHINGTON _ Taking the stand for the second day, the former chief executive of the Alaska oil servic~s
company that renovated Sen. Ted Stevens' home continued to testify about gifts and help with renovations he
had given his longtime friend over the years. . .

Former Veco Corp. CEO Bill Allen, the star witness in the case against Stevens, was asked time and time again:
Did Stevens paid·for any of the work done by Veco? Did Stevens pay for the_eleCtrical work, the' plumbing? Did he
p~y to move the generator? Did he pay for the lower level deck? How about the electrical tape system that
itJelted ice off the roof? .

"Who did that work?" asked prosecutor Joe Bottini.

"Veco electricians," Allen said.,

"Who paid for the materials?" Bottini asked.

"Veco;" Allen said.

Bottini asked whether Stevens ever sought a bill for the work that had been done in 2002. Allen hesitated for a
few moments.

"I don't think so," he said slowly.

'Stevens, 84~ -faces seven felony- counts of-making false statements on -his financial-disclosure forms. The Alaska-
Republican is'-accused of hiding more than $250,000 of gifts from Allen and-others, chi~fly home improvements
that helped double, his home in size.

Bottini asked Allen to read portions of a note Stevens sent him iii October 2002, thanking Allen -for his work on
"the chalet." In the note, Stevens told him not to be "P.O.'d," but said that he needed to have a conversation
with one ofStevens' neighbors in Girdwood~ Bob Persons, a close friend of both who_helped oversee the
renovation of the senator's home: .

"You owe me a bill," the. letter from Stevens said: "Remember Torricelli, my friend. Friendship is one thing,
compliance with the ethics rules entirely different." FBI - Stevens-2121

Allen said he was unaware at the time what Stevens meant by "Torricelli." But Stevens was apparently referring
to former Sen. Robert Torricelli, D-N.J., who in 2002 was investigated by .the Justice Department for a~cepting
- improper-gifts from a .donor. The-investigation-dosed, but the Senate Ethics-Committee-reviewed the
investigative files and issued a public letter of admonishment to Torricelli, who then abandoned a re-election bid
and left the Senate.

Allen said he didn't send Stevens a bill or invoice after the note, but as promised in the letter, he did have a
conversation with Persons. Allen. testified that Persons told him, "Don't worry about getting a bill, Ted's just
covering his ass."

TlJen, realizing the language, might not be appropriate for ~he cOl:lrtroom, said "Maybe I shouldn't say-that."
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Sell it tcd;
Stevens' offer to pay was ,_ JJ4It""_
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WASHINGTON •• After spending nearly $200,000 of his
company's money-improving the Girdwood home of.Sen. Ted
Sti=vens, Veco chief executive Bil! Allen received a note from enlarge
the senator asking for a bill. Government Exhibit 172, a September 2000 e-
mail (rom Sen. T~d Stevens to Bill Allen, was
"I asked Bob P to talk to you' about introduced Oct. 1, 2008.
Story tools
this so don't get P.O.'d at him -- it
Comments (0)
just has to be done right," said-the Document exhibits .
E-mail a friend
Q~t. ~, ~9Q~,. h~nd~rJ~ten !10~, l,.etters,lega! Qocuments, ~tc.. ~ubmjlJe<l·as
Print
.~nt~r~d a,s.a pros~_cuti.on ex~.ibit ~vidence.
Digg this
Wednesday in Stevens' felony
-Seed Newsvine
disclosure trial.
Send link via AIM
r~----,:-rr~iJ
l. Exhibits from 10/20
Sure enough, said Allen, on the
Font size : A A
witness stand for the second day,
I AI Related Links
Bob Persons did talk to him. But PDF: E-mail from Stevens to Allen about
Persons, a good friend of both men and the owner of the home improvements
Double Musky restaurant in Girdwood, explained that the note Photos: Historical photos of Sen. Ted
wasn't to be taken ~eriously -- it's a wink and a nod, not a Stevens FBI - Stevens-2122
demand. to do the right thing. Photos: Sen. Ted Stevens gallery
Complete Alaska ~Iection coverage
"Don:t worry about getting a bill -- Ted's just covering his ass,"
Alaska Politics blog
Allen quoted Persons as saying. Then, briefly injecting a
-- --moment of fevity into an-otherWise tense morning, -Allen -The Ted Stevens investigation
turned to the jUry al)d said, "Maybe I shouldn't have said 'ass.' , Photos: Exhibits submitted as evidence
" The jurors c,racked up laughing.
More Sen. Ted Stevens stori.es »
Stevens' supposed request· for a bill came on a day,of damning judge sends Stevens jurors home for day
testimony by Allen. But the session was cut short at the lunch Stevens gets help from some friends
break by ~n unexplained issue involving a Nror. U.S. District .
Which Stevens will jurors judge? M
Court Judge Emmet Sullivan called a closed-door meeting with ~'2 D-
.St~vens·.defense rests It{ '{.+_It.v ~( 3
attorneys for both sides before recessing for the day. Whether
l~ . -'143 Testim~ny ends!n Stevens trial"
----------------

tha~ session was about the juror or 0 matters couldn't be


Q
Jearned.
;..-
But Sullivan said the trial would resume this morning with Allen back on the stand. The
government is expected to play three recorded conversations between Allen an,d Stevens that were
made in 2006 after Allen agreed to cooperate in the FBI's sweeping public corruption investigation
in Alaska.

Stevens is charged with seven felony counts of failing to report .more than $250,000 in gifts"
,mainly from Allen and Veco, between 1999 and 2006. Allen, the government's star witness, has
pleaded guilty to bribing Alaska legislators and is awaiting sentencing.

On Wednesday, Allen's second' day of testimony, he recited a litany of work he did for Stevens on
the house without ever getting paid.

Al,lEm was asked time and time again by assistant U.S. Attorney Joe Bottini: Did Stevens pay for
any of the work done by Veco? Did Stevens pay for the electricai work, the plumbing? Did he pay
to move the generat?r? Did he 'pay for the lower level deck? How about the electrical tape system
that melted ice off the roof?

"Who did that work?" Bottini asked.

"Veco electricians," Allen said.

"Who paid, for the materials?" Bottini asked.

"Veco," Allen said.

What about the steel d~c1<_ and stairs at th~ back of the, ~~_us~J Veco~

What about the steel log holder.

"I, think I had it fabricated at the shop," Allen said.

What about the new ste~1 deck ~>n the third story loft?

"That platform was'fabricated atthe-Veco shop," Allen'said.

Who paid for the ,folding metal escape ladder that went from the loft to the ground?

"Veco did."

Through Allen's testimony and notes and e-mails from Stevens, it became clear thatStevens knew
what he was getting -- and appreciated it.

"Many than~s for all you've done to make our living easier and our home more enjoyable," Stevens
wrote in a note to Allen dated Nov. 8, 2002. FBI - Stevens-2123

"When'l think of the many ways in which you make my life easier and more enjoyable, I lose
count!" he said-in the Oct. 2, 2002; note. "Thanks for all the work on the chalet.';

"Bill: Bob (Persons) has been filling us in on all the help you've given him on our (remodeling)
project," Stevens said in an e-IJ'laii on Sept. 24, 2000. "You and Bob have been the spark plugs
and we are really pleased with all you have done."

Stevens singled out Rocky Williams, the Veco foreman who oversaw the biggest part of the project
in, 2000 and 2001 -- jacking up the hous~ and adding a new firsnloor, a second-story kitchen and
a garage.
(

eve.ry~ne who's ,seen the place wanOknow who has done the ,things he's dOrQ, .
jn the November 200'2 note, Stevens repeated his requesdor a bill.
"Don't forget we need a bill for what's been done out at the ch()let," Stevens wrote.

Allen said he ignored him again. "I don't know why," he said.

Did you want to send Sen. Stevens a bill? asked Bottini.

"I really didn't want to," Allen said.

"Why not?" asked Bottini.

"Because I wanted to h~lp Ted," he said.

"Why?"'Bottini asked.

" 'Cause I like him," Allen said.

Allen began his day of testi'!lony recounting how he first heard that Stevens was dissatisfied with
his Girdwood home.

"I think we were on the plane and he said he needed more'room," Allen said. Stevens talked about
jacking up the cabin'and adding a large single room beneath it-- a-place for bunk beds primarily
for his grandchildren when they came to go skiing at nearby Alyeska Resort.

"I told him we had some jacks," Allen said.

Stevens eventually hired a house mover, not \ieco, to lift the house: But as Stevens' wife,
Catherine, warmed to the idea of the addition after initially wanting to sell the place, it became
clear the project needed an arChitect, Allen said.

"He told me that Catherine, that she wanted to be in the middle of it," Allen said. "Now she wants
to have ~ house. Before, she never did. (Now) she wants to put her fingerprints on it. He thought
that was good. She wanted to have a bigger. house."

Allen assigned an engineer wit" architectural experience to the project, he said.

Catherine Stevens rejected some ideas born from the oil fields where Veco normally worked. Allen
thought a grated steel deck on the second story was a great idea because snow would fall through
Instead of having to be shoveled. S.he thought it would make the hqme look, like an oil platform,
Allen said. So Allen assigned workers to build a wood deck on the second floor, and later another
deck on the new first floor to make the house look balanced.

And he fixed problems. With the project completed, he and S.tevens would hang out on the
ground-floor deck and smoke cigars, he'said. When it rained, "the J..ater would be coming down
your neck" through the upper deck. The solution? Veco workers put a roof of plastic sheeting
'between the two decks.
FBI - Stevens-2124
,-- Meanwhilei-Vecowas getting favors from Stevens,-Allen said.

Stevens il1tervened to get the World Bank to pressure the Pakistani government to pay Veco its
share of-profits it claimed it !'las owed on a pipeline there. Stevens intervened with the State
Department to pay for training Russians in building oil production modUles, a project approved but
never put place, Allen said. And Stevens acted on behalf of the company for an Arctic logistics
contract with the National Science Foundation, though Allen said he thought he would have been
successful without Stevens' help.

Stevens'-defense has said,thafhe was doing,nothing:more than helping,constituents:--_a normal c'


" - --
"

act~ity for se-nators. 0 0


,,~~related to Stevens, Allen testified about a previously undisclosed state legislator whom he had
, bribed, though he didn't provide the lawmaker's name. He also explained for the first time wl1at his
son, Mark Allen, might have done to put in him legal jeopardy had Allen not gotten him immunity.

The matter came up as Bottini asked Allen about his deal with the government. Asi~e from a
possible reduction in .his 9-to-ll year sentence if he coope~ated -- Allen said he didn't trust the
government to deliver -- he said his deal bought immunity for Mark and the re.st of his family.

When Allen was being debriefed by the· government, he said, he didn't mention a suspicion he had
about his son: that Mark "got money to this legislator." After that debriefing session, Allen sa[d, he
called his son to confirm it.

"Yes, Dad, I did," Allen quoted his son as saying.

"The next thing in the mornil!g, I got ahold of that agent and said I had, and that Mark had,"

Allen was directed by the judge not to name any legislator he admitted bribing, in part because
one of them w?s former Senate President Ben Stevel'!s, Ted Stevens' son. The judge ruled such an
assertion would be prejudicial to Ted Stevens. However, Allen'des~ribed the legislator whom he
and Mark had paid as "her."

So far, no current or former female legislators have been publicly identified as targets of the FBI's
investigation.

Contact the.reporters: ,rmauer@adn.com and ~bolst~d@~dp.cof!l'


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Sell it tod.
Stevens trial will continue,
judge rules
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
Published: October 2nd, 2008 02:08 PM Advanced se
Last Modified: October 2nd, 2008 06:56 PM

WASHINGTON - Prosecutors have seriously bungled evidence


and witnesses, but Sen. Ted Stevens' corruption trial will
proceed as planned, a federal judge ruled this afterno~m.
enlarge
l;>al)<I Verkooterel)) Associated Press
Thecase against the Alaska
Story tools -, In this artist's rendering depicting a scene from
Republican had threatened to the trial of Sen. Ted Slevens, R·Alaska, left, his.
Comments (0)
collapse earlier in the day when. his At~oroey Brendan, Sullivan, second from lert,
E·mail a friend attorney demanded a mistrial or speaks as Prosecutron Attorney B(enda Morris,
Print center right, and Judge Emmet G. Sullivan listen
dismissal of charges ,ove,r the
Olgg this on T/.lursday Ocl. 2, 2008,
government's fallure to turn over
$eed Newsvine
eVidenceJavorabl~to the senator.
Send link via AIM
f~MY~ooq Document exhibits
U.S. District Judge Emmet Sullivan Letters, legal doc-uments, elc. submitted as
was angered at prosecutors for their evidence.
Font size: A I A I A
handling of evidence that might
help Stevens' case but was "not persuaded" the violations
were serious enough to declare a mistrial. The trial will resume
I Exhibits from 10/20
Monday.
Related Stories
Judge Sullivan asked whether the defense attorneys wanted a Stevens trial will proceed
few extra days before continuing with the trial and suggested Stevens' offer to pay was ignored
they could make a new opening statement ~o jurors. FBI - Stevens-2126
Related Links
"Thank you for a~king, but we believe there should be a Alaska Politics blog:_ A new name in the
dismissal," said Stevens' chief lawyer, Brendan Sullivan. "If corruption investigation
not a dismissal, then a mistrial." Photos: Exhibits submitted as evidence.
-- -

The Ted Stevens investigation


The chief prosecutor in the case apologized and sailed her
Alaska Politics blog
team's oversight a mistake, though she asserted that Stevens'
rights weren't violated. The defense team was looking for Complete Alaska election coverage
weaknesses and found one, said Brenda Morris, the lead Photos: Sen. Ted Stevens gallery
_prosecutor on the Justice Department team, Photos: Historical photos of Sen. Ted
Stevens
"They're just trying to make a hole and seep into a crack," she PDf:: E-mail from Stevens to Allen about
said. home improvements
I q"l ti-'-A-"v-'" (}G '70-~~
-_... - .--------------------------------------"

l n
Dom you t'hink thay have good reasQo do
tudge!
th~t?" asked the
Q
More Sen. jed Stevens stories»
Judge sends Stevens jurors home. for day
The dispute began Wednesday night when prosecutors handed Stevens gets help from some friends
over notes by an FBI agent of an interview with the main
Which Stevens will jurors judge?
prosecution witness, Bill Allen, the former chief executive of
Veco Corp. Stevens is accused of not reporting more than Stevens' defense rests
$250,000 in free labor, materials and gifts he received, most Testimony ends in Stevens trial
of it from Veco, from 1999 to 2006.

The agent's notes, on a document known as a Form 302, quoted Allen as saying he thought that
Stevens would have paid a bill had he sent him one.

Allen is in the middle of his testimony, and he said Wednesday that he didn't send Stevens a bill
for tens of thousands of dollars in repairs and remodeling even though the senator had asked for
one at least twice in 2002. Allen testified that one of his good friends told him that Stevens was
just "covering his ass" in asking for the bills.

"I can't do my duty to defend my client if,the government does not abide by the instructions,"
Brendan Sullivan said today. He asserted that he would have delivered a different opening
statement last week' had he known what Allen had told the FBI agent.

"This can't be undone," he thundered, speaking directly up to the judge from a podium less than T

10 feet away. Clutching his chest, he sa.ld, "My heart's beating twice as f~st as it should be for a
66-year-old man. This can't happen in court."

AS he accused the prosecution of misconduct, Morris leapt to her feet and got within inches of him,
her voiced raised as well.

"He called .me out," she told the judge as he tried to calm the situation.

Walking back to the defense table, Brendan Sullivan ~aid, "I called her up, not out."

Morris admitted that she violated the judge's orders in not turning over the document; but not
Stevens' rights.. She said the defense was told that Allen had s~id that very thing in a letter on
Sept. 9,

A copy of that letter, filed by the defense Thursday afternoon, said:

"Allen stated that he believed that defendant (Stevens) would not have paid the actual costs
-incurred by VECO, even if Allen had sent the defendant an invoice, because defendant would not
have wanted to pay that high of a bill. Allen stated that defendant probably would have paid a
reduced invoice if he had received one from Allen or VECO. Allen did not want to give defendant a
bill partly ~ecause:he felt that VECO's costs were higher than they needed to be, and partly
because he simply did not want ~efendant to have to pay."
FBI - Stevens-2127
Morris said the letter was adequate information to the defense.

"He's getting a fair trial, believe me. You're getting a great fair trial," Morris said.

Judge Sullivan said he found the government's claims "unbelievable.'"

"It strikes me this is probably intentional," he said. "This is the government's chief witness!"

Before the trial, he'd ordere? prosecutors to turn over redacted versions of 302 forms.

Morris said the prosecution found that particular 302 as it was preparing for the next round of
witnesses. The agent who wrote it is scheduled to testify after Allen, and the prosecution would be
requir~d to .make !h~ rep(~1'!: avall.~ble to ~h~ defense at that time.
}Iniiiequ;remen\s to present materOo the defense, the government operateQder several
kindS of rules. In one, known as a "Brady" after the Supreme Court decision that created it, the
government is required to turn over evidence before the trial that would be favorable to the
defendant. A different rule, known as "Jenks," requires the prosecution to prOVide mOore deta~led
notes from agents at the time they testify. .

In addition, Judge Sullivan issued an order early in the case requiring the government to provide
more material to the defense than Brady usually requires.

Morris said that when members of the prosecution team were preparing Jenks material for the FBI
agent, Michelle Pluta, they realized that they should have given the document to the defense
sooner under the judge's order.

"We do realize this is a gross error," Morris said. "It wasn't done intentionally by any stretch of the
imagination. It was a human error."

The defense filed a heavily redacted version of the 302 Form, dated Feb. 28, 2007,. around 1:30
p,m. Thursday, with only a few sentences of Allen's interview'readable in the four-page document.

"The source (Allen) did not invoice STEVENS for the work that HESS (the project architect)
performed; however, the source believes that STEVENS would have paid an invoice if he had
received one."

In another part of the 302, Allen reported that he'd discussed a request by Stevens that he get a
bill for plumbing work that Veco did on his house in Girdwood, Alaska.

"STEVENS said 'ethics' (an apparent reference to the Senate Ethics Committee) was on his ass and
the source (Allen) needed to get him a':l invoice. STEVENS said he didn't want the, source to 99
through what JON RUBINI we'nt through witt{ their investment. The source did not provide
STEVENS with the requested invoice.",

the reference to Rubini concerned a real estate investment in Anchorage that Rubini and his
partner in Jl Properties, leonard Hyde, invited Stevens to make. Stevens' $50,000 investment
grew to about $~ million in six years and was the subject of extensive news. coverage. after Stevens
pushed the Air Force into approving a separate housing project of Rubini and Hyde's.
AOVERTISEME;NT

FBI - Stevens-2128

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Sell it todi
Related Stories
New name in federal Stevens trial will proceed
corruption' case
More Sen. Ted Stevens stories»
JUSTIN STIEFEL: Agent, interviewed him
Judge sends Stevens jurors home for day
involving Veco payment scheme.
Advanced se
By LISA DEMER and RICHARD MAUER Stevens gets help from some friends
Anchorage Daily News Which Steveris will jurors judge?
Published: October 3rd, 2008 05:00 AM
Last Modified: October 3rd, 200801:11 PM Stevens' defense rests
, Testimony ends in Stevens trial
WASHINGTON -- The name of yet another person emerged "
Thursday in the ever-broadening federal corruptio~ investigation: Justin'~~efel, the former chief of
~ -staff.and.campaign manger.for U.S. Sen. Usa Murkowski. ., - , -

Stiefel was interviewed by a federal agent over a payment scheme


involving Veco when he did work for former Gov. Frank Murkowski's re-
election campaign, and, p'fosecutors say in a footnote, "engaged in
criminal conduct." .

_S!ie(el's~<:onnection to the corruption case.was.disclosed.in a.defense


filing in the current case' against"Alaska Sen. Ted Stevens. Defense
lawyers, arguing for a mistrial in Stevens' case, attached tO,their motion
letters from prosecutors to the defense..

In their Aug. 25 and Sept. 9 letters, the federal prosecutors ha,ndling


the:corruption cases list evidence that the defense might use to
discredit'§overnment witnesses. Prosecutors have to provide that sort of
information under federal court rulings.

ClicktoeQlarge The filing indicated Stiefel might still be subject to prosecution. FBI - Stevens-2129 .
JUSlin Stiefel Government lawyers said he has not been promised immunity.

Story tools Stiefel has run his own Washington, D.C.-area lobbying firm the last few
Comments (0) years. Before he w6rked for lisa Murkowski, he was a top aide. to._
. Stevens~ - - - - . . - -- - -. - _. ~. •
E-mail a friend
Print
Digg this Reached by phone Thursday, Stiefel said he would have no comment
Seed Newsvine about the court revelations.
Send link via AIM
[@}iYYhl-lOOtl Prosecutors say Stiefel was interviewed June 3. He said he performed
consulting and polling work for Frank Murkowski's re-election campaign.
Font size: A IAI A Murkowski was trying (or a second term in 2006 but Sarah Palin beat
him in 'the Republican primary.
------''----_-_~_4'1 J'l _'1A ~<'l,J~ r~6.~.o ~M
AlStief;~'exPlainedit, Veco was supQd to pay Murkowski's polling companY_.fQtiefel's work,
-in edence laundering the source of the money, prosecutors say in the Sept. 9 letter..

"Stiefel stated he agreed with (Veco executive) Rick Smith to have Veco pay a polling company for
services performed by Stiefel and charged to the polling company. Stiefel stated this was ~one so
that payments would not go directly from Veco to Stiefel. Stiefel further stated he never received
any payment from Veco or the polling company."

Defense lawyers !>Iacked out much of the information in the Aug. 25 letter before filing it in court.
But they left a footnote about Stiefel.

"During the course of the investigation, the government independently I~arned that Stiefel had
engaged in criminal conduct. (Stiefel) also initially made a false statement to a government agent
during an interview. Stiefel later corrected the false statement during the same interview. Stiefel
has not been promised immunity from prosecution for this conduct."

The letter didn't say what polling company Stiefel was connected with.

Dav ittman, who-handled Murkowski's POlling~··


the last few weeks of the campaign, said
tie el n ver worke,d for him. Likewise, said Bil/ ~~~
ey, who wrote radio ar:!d teleVision ads for
Frank Murkowski. McConkey once was a big player'in AI ka politics, working for Republicans. He
now lives in Wisconsin, where he's a university instructor and operates a consulting business.

Veco Corp: is the former oil field services and construction company that has been at the center of
most of the Alaska'corruption cases. Smith, ~ Veco vice president, and Bill Allen, the, company
chairman, both have pleaded gUilty to bribing Alaska legislators. Allen is the government's star
witness in th'e, case against Stevens, accused of hiding about $250,000 in home improvements and
:- gifts, m.ost fro~ Allen al1_d_ Vec(). _

Lisa ,Demer reported from ";"nchorage and Richard Mauer from Washington, D.C. Contact them at
Idemer@adn.com and rmauer@adn.com.
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Sell it tad.
Stevens trial will proceed
NO MISTRIAL: Errors by prosecutors won't halt
proceedjngs, judge rules
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
Advanced se
Published: October 3rd, 2008 04:59 AM
Last Modified: October 3rd, 200805:00 PM

WASHINGTON -- Prosecutors seriously bungled tneir


obligations on evidence and witnesses but Sen. Ted Stevens'
corruption trial will proceed as planned, a federal judge ruled,
Thursday.
more
the case against the Alaska JOSE LUIS MAGANAfTheAssociated Press

Republican had threatened to Prosecutors Brenda Morris. Nicholas Marsh and


Joseph Bottini, frantto back, leave the U.S.
collapse earlier in the day when his District Court in Washington on Wednesday
attorney demanded a mistrial or October 2, ~008 after the day's proceedings in the
dismissal of charges over the trial of Alaska Sen. Ted Stevens. U.S. District
Judge Emmet Sullivan refused to grant the,
government's failure to turn over defense's request for a mistrial or dismissal after
evidence favorable to the senator, learning that the prosecution hal! faireg to turo·
over evidence that may have been favoraple to
U.S. District Judge Emmet Sullivan, Stevens.
who Thursday morning was furious
witr prosecutors, said. later in the
Document exhibits
day at a hearing that he was still Lellers, legal documents, etc. submitted as
angry but "not persuaded" that the evidence.
violations were serious enough to
declare a mistrial.
I Exhibits from 10/20 ::oJ
The trial, which" paused Thursday FBI - Stevens-2131
while the dispute over evidence was Related Stories
Story tools
resolved, will resume Monday. New name in federal corruption case
Comments (0) Stevens' offer to pay was ignored
Judge Sullivan asked whether the
e-mail a friena Stevens tdal will continue, judge rules
defense wanted a few extra days
Print
Digg this before continuing with the case, and Related Links
Seed Newsvine he suggested that Stevens' lawyers
could make a new opening PDF: Stevens' motion for mistrial
Send link via AIM
PDF: E-mail from Stevens to Allen about
~ "'YY"'I~oO!·1 statement to jurors. He even
home improvements
offered to tell the jUry that the new
Font size: A IAIA opening was made necessarily by a Photos: Historical photos of Sen. Ted
Stevens
government error.
Photos: Sen. Ted Stevens gallery
But th(}se ide:s were rejected by SteOs' chief lawyer,
Brerican Sullivan, who argued that "the il)tegrity of the
o
Complete Alaska election ~overage

proceeding has been breached." Alaska Politics blog


The Ted Stevens investigation
"Thank you for asking, but we believe there should be a Photos: Exhibits submitted as evidence
dismiss?!I," Brendan Sullivan said. "If n9t a dismissal, then a Alaska Politics blog: A new name in the
mistrial." corruption investigation

The chief prosecutor in the case apologized and called her More Sen. Ted Stevens stories »
team's oversight a mistake, though she asserted that Stevens' Judge sends Stevens jurors home for day
rights weren't violated. What was really happening, she said,
,Stevens gets help from some friends
was that the defense team was looking for a weakness in the
Which Stevens will jurors judge?
government's, position and found one, said Brenda Morris, who
heads the Justice Department trying the case. Stevens' defense rests
Testimony ends in Stevens trial
"They're just,trying to make a hole and seep into a crack," she
said.

"Don't you think they have good reason t.o do that?" asked the judge.

FBI FORM 302

It was the second time in a week that ~udge ,Sullivan has r~primanded the prosecution team. He
earlier became upset when the government sent a-keY'~itness home to Alaska without testifying
and without informing the court or defense until the man left town. Prosecutors said the man,
Rocky Williams, a foreman on the project to expand Stevens' home in Girdwood, was seriously ill.

_- -,The new dispute began,W~dn~sdaynight.w~enprosecutorshanded over notes ?In ~BI agent t<:>ok
oran interview with the main prosecution wit~ess, Bill Allen, the' former chief executive officer of
Veco Corp. Stevens is accused of not reporting more than $250,000 in fr~e labor, materials and
gifts he received, most of itJrom Veco, from 1999 to 2006.

The agent's notes, on a document known as a Form 302, quoted Allen as saying he thought that
Stevens would have paid a bill had he sent him one.,

Ailen is in the middle of his testimony, and hesaicrWednesda"y that he didn't send'Stevens a bill
for tens of thousands of dollars in repairs and remOdelirig even though the senator hac asked for
one at least twice in 2002. Allen testified that one of his good friends told him that Stevens was
just "covering his ass" !n asking for. the bills.

"I can't do my duty to defend my client if the government does not abide by the instructions,"
Brendan Sullivan said Thursday. He said he would have delivered a different opening statement
last week had he known what Allen had tol~ the 'FBI agent. .

"This can't be undone!" he'thundered, speaking.direc~ly up to the judge from a podium less than'
10 feet away. Clutching his chest, he said, "My heart's beating twice as fast as it should be for a
66-year-old man. This can't happen in court.'! '

As he accus~d the.prosecutiol) of misconduct, Morris leapt to her feet and got within inches of him,
her voiced raised -as well. - - - -- - - - - --
FBI - Stevens-2132
,iHe called me out," she told the judge as he tried to calm the situation.

Walking back to the defense table, Brendan Sullivan said, "I called her up, not out."

'Morris admitted that she viol~ted the judge's orders in not turning over the document, but not
Stevens' rights. She said the d~fense was told that Allen had .said that very thing in a letter on
Sept. 9.
A COP'l.3f.th~~ letter, filed by the deOe Thursday afternoon, said:
#1
0
"Allen stated that he believed that defendant (Stevens) would not have paid the actual costs
incurred by VECO, even if Allen had sent the defendant an invoice, because defendant would not
have wanted to pay that high of a bill. Allen stated that d~fendant probably woul'd have paid a
reduced invoice if he had received one from Allen or VEt:O. Allen did not want to give defendant a
bill partly because he felt that VECO's costs were higher than they needed to be, and partly
because he. simpiy did not want defendant to have to pay."

Morris said the letter was adequate information to the defense.

"He's getting a fair trial, believe me. You're getting a great fair trial," Morris said.

On Thursday morning, Judge Sullivan said he found the government's claims "unbelievable."

"It strikes me this is probably intentional," he said. "This is the government's chief witness!"

Before the trial, he'd ordered prosecutors to turn over redacted versions of 302 forms. Morris said
the prosecution found that particular 302 as it was preparing for the next rou'"!d of witnesses. The
agent who wrote it is scheduled to testify after Allen, and the prosecution would be required to
make the report available to the defense at that time.

.
'A GROSS ERROR'

In its requirements to present material to the defense, the government operates under several
kinds of rules. In one, known as a "Brady" after the Supreme Court decision that created it, the
government is required to turn over evidence before the trial that would be favorable to the
defendant. A differentrule, .known as "Jencks" from tile statute that created it, -requires the
prosecution to provide more detailed notes from agents at the time they testify.

In addition, Judge Sullivan issued an order early in the case requiring the government to provide
more material to the defense than Brady usually requires.' . '

Morris said late Thursday that prosecutors had reported their own Brady violation to the Justice
Department's Office of Professional Responsibility, which investigates allegations of misconduct by
its attorneys.

She said that when members of the proseclltion team were preparing Jencks material for the FBI
agent, Michelle Pluta, they realized that they should have given the document to the defense
sooner under the judge's order. . '

"We do realize this is a gross error," Morris said. "It wasn't done intentionally by any stretch of, the
imagination. It was a human error."

The defense team on Thursday afternoon received all 100 of the 302 Forms connected to the
Stevens portion of the sweeping Alaska corruption investigation. Most are just one page, Morris
said, but some are as long 13S 10 pages. It also received transc'ripts of all relevant grand jury .
~m~ . .

. FBI - Stevens-2133
Contact the reporters: rmauer:@adn.com and ebolstad@adn.com.
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Sell it tod.
Document exhibits
Defense renews its bid to Letters, legal documents, etc. subm1tted as
~vidence.
dismiss Stevens trial.
MOTION: Judge orders government to file its
response by 8 a.m. today.
I Exhibits from 10/20 3
Advanced se
By TOM HAYS
The Associated Press Related Links
Published: October 6th, 200801:44 AM Photos: Historical photos of Sen. Ted
Last Modified: October 6th" 2008 01:48 AM
Stevens
WASHINGTON -- Attorneys for Sen. Ted Stevens on Sunday Photos: Sen. Ted Stevens gallery
renewed their effort to get a federal corruption case against Complete Alaska election coverage
the veteran Alaska lawmaker thrown out, saying prosecutors Alaska Politics blog
manipulated the story of their star witness to undermine the The Ted Stevens investigation
defense. Photos: Exhibits submitted as evidence

"Until today, defense counsel have· More Sen. Ted Stevens stories»
Story tools
refrained from alleging intentional
Comments (0) Judge sends ,Stevens jurors home for day
misconduct by the government,"
e-mail a. friend the lawyers wrote in c6ur,t paR.ers. Stevens gets help from some ,friends
Print Which Stevens will jurors judge?
"We can no longer do so in good
Digg this
conscience." Stevens' defense rests
Seed Newsvine
Send link via AIM Testimony ends in Stevens trial
r~ /oIyy.... uoo!J U.S. District Judge Emmet G.
Sullivan rejected a similar bid for a mistrial or dismissal on Friday after
Font size: A IAIA prosecutors said they would share with the defense documents they
claimed were mistakenly withheld.

Stevens, 84, is charged with lying on senate financial C:lisclosure forms about more than $250,000
in home renovations and other gifts from oil pipeline magnate Bill Allen. The senator's trial is .
expected to continue today with Allen returning to the witness stand. FBI - Stevens-2134

The latest motion to end the trial says the newly disclosed documents show Allen originally told
investigators he believed Stevens would have paid for work on a mountain cabin if billed -- proof,
the defense says, that the senator never intended to hide anything.

Rather than turn over the first statement to the defense as required by rules of evidence, the
government "intentionally procured from Allen a contradictory state-ment" ,and then "concealed its
actions" from the court, the defense papers say.

There was no immediate response to messages left with the Justice Department, which is
prosecuting the case.
JUd~(i~ullivan late Sunday ordered Ogovernment to file its response by 8 a.mQday. He
,;scheduled a hearing on the defense motion for 9 a.m. .

Testifying as part of a deal in which he pl~aded guilty to bribing state legIslators, Allen has told
jurors he did not have the heart to bill his buddy for the work done by his company, Veco Corp.
Stevens sometimes asked for bills, Allen said_. But Allen said he was informed by a mutual friend
~hat the senator made the requests simply to cover his tracks.

Lawyers for Stevens say the lawmaker relied on his wife to pay tens of thousands of dollars in bills
on the remodeling project, and believed the job was above board. They claim Allen, who was
overseeing the work while the senator was away, kept Stevens'in the dark about the cost of extras
such as wraparound decks, a Viking gas grill and fancy outdoor lighting.

Much of Allen's testimony focused on construction at the ski chalet and what Stevens knew about
it. But the self-made multimillionaire also spun a folksy back- story of a deep kinship ultimately
destroyed by a sudden betrayal.

Allen, 71, spoke in a halting drawl that; he told jurors, was caused by lingering brain damageJrom
a motorcycle accident. He described his steady rise from an apprentice welder. in New Mexico to
owner of an Alaska-based company with 5,000 employees. He-said he first met the patriarch of
Alaska politics in the early 1980s while attending political fundraisers.

As the years went by, the pair grew close. They smoked cigars together at Stevens' cabin. They
fished for salmon. They fJew to the Lower 48 for "boot camp" outings where they gave up hard
liquor and heavy food for wine and light meals, and did lots of walking to get in shape.

"We ki,nd of really liked each other," Allen testified as Stevens sat at the defense table with a frown
e!ched on his Jace. "Had the_sa_me ~houghts .... Ted loved Alaska,and,1 lC?ved Alaska."

Handwritten notes from Stevens entered as evidence suggest the admiration was mutual. One note
thanked·Allen for the "many ways you make my life easier and more enjoyable."

Allen testified Stevens used his Senate seat to help VECO try to win lucrative government
contracts and oil deals in the late 1990s. Defense lawy~rs insist their client merely was doing his
duty to' assist a constituent.

By 2006, the FBI had Allen under investigation for lining the pockets of state legislators voting on a
pipeline project. After agents arrived unannounced at his doorstep that year, Allen agreed to
cooperate -- even letting them record phone calls with Stevens -- so long as they did not pursue
any charges against his family.

The investigators asked him "to help them to try to ge~ the guys I bribed, and they told me if I did
that they wouldn't mess with my kids," he said. "That was it, I guess."
AoVeRTlsEMENT
FBI - Stevens-2135
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Sell it tod.
Stevens to Allen: 'These
guys can't really hurt us'
By RICHARD MAUER AND ERIKA BOLSTAD
Anchorage Daily News
Published: October 6th, 200802:44 PM Advanced se
Last Modified: October 6th, 2008 02:44 PM

WASHINGTON - In secretly recorded telephone conversations


played in court today, Sen. Ted Stevens denied wrongdoing
and cursed at the federal agents who were raiding homes and
offic~s in Alaska as part of a sweeping corruption probe. enlarge
Jose LUIs Magana JAssociated Press
"I don't know what the (expletive) Sen. Ted Stevens arrives with his daughter Beth
Story tools Stevens at U.S. District Court in Washington
these guys are doing. We'll have to
Comments (0)
figure that out later," Stevens said Monday Oct 6, 2008.
E-mail a friend to Bill Allen, chief executive of the
Print
9i1 services firm Veco Corp. Document exhibits
Digg this
.Seed Newsvine Letters, legal documents, etc. submitted as
Send link via AIM But Stevens also offered up advice evidence.
on maintaining a good attitude in
ti NY Yhl-lOOlJ
the face of the investigation to
Allen, the man who - unknown to Exhibits from. 10/20
Font size: A I A I A
Stevens -- had agreed to testify
against the senator-in exchange for leniency in his own Related Stories
sentencing and the promise prosecutors wouldn't target his Defense renews its bid to dismiss Stevens
children. ,trial
FBI - Stevens-2136
They needed to maintain the attitude that "these guys can't Related Links
really hurt us," Stevens said to Allen. Listen to Allen-Stevens phone calls, with
transcrip~s
"They're not going to shoot us; it's not Iraq,.so what the hell," Photos: Exhibits submitted as evidence
Stevens said. "The worst that can happen to us is we wind up The Ted.Stevens investigation
with a bunch of legal fees and might lose, and we might have
Alaska-Politics blog
to pay a little fine, might have to serve a little time in jail. I
Complefe Alaska election coverage
hope to Chri,st it never gets to that, and I don't think it will."
Photos: Sen. Ted Stevens gallery
"I'm developing the attitude that I don't think I did anything Photos: Historical photos of Sen. Ted
wrong, so I'm going to go right through my life and ~eep doing Stevens
what I think is right," the senator said.
More Sen. Ted Stevens stories»
Two years after th'!t conversation, Stevens, now 84 and up for Judge sends Stevens jurors home for day
re-election,·is on trial·for·taking more than $250,000 in gifts - Stevens gets help'from some friends
-~-ge7) (q'1.-"".......~AJ ..... (~~?-O~_N\ ~~
.
chiefly from Veco -- and lying aboutl"'\n on his U.S. Senate
Which stevenO,.jurors judge?
financial'd.isclosure forms: V"
...
~ ~
Stevens' defense rests
Testimony ends in Stevens trial
The first of the·thre·e recordings played today in court as part
of Allen's testimony was made Aug. 31, 2006. That was one
day after the FBI searched Allen's home and office and he agreed to cooperate wjth investigators
in the Alaska corruption investigation. In 2007, Allen pleaded guilty to bribing state lawma,kers.

In conversations playe~ in c<?urt, Stevens told Allen the investigation was weighing on his mind so
heavily that he wasn't sleeping well.

"Well, I'm not getting much sleep when I think about all this (expletive) that's going down, about
four hours a night," Stevens said in the 2006 phone call. "But I'm going to survive. I just can't
figure out why these (expletive) are doing this thing to our friends."

The Alaska Republican also was equally insistent he had done no wrong, telling Allen that his own
lawyers had warned him about Martha Stewart, who Stevens described as going to prison not for
what she had done but because "she lied about a conversation she had with somebody."

"1 don't think we've done anything wrong,'BiII, 1 can tell you right now," Stevens said. "1 told my
lawyers 1 c,!,n't thin~ of a thing of we've done that's wrong."

On cross examination. later in the day, Stevens' main lawyer, Brendan Sullivan, zeroed in quickly
on the heart of their defense strategy: The senator is an honorable man who pays his debts and
would ,have written a check for the home renovations had· he known he owed Veco or Allen any
money.

"You never tried to bribe Sen. Ted Stevens, did you, sir?"

"No," Allen said.

"You knew you couldn't bribe Sen. Ted Stevens, could yo.u, sir?"

"No."

Allen's testimony, which-is at the center of the trial against Stevens, began last week. The trial
nearly derailed Thursday after Steyens' lawyers accused 'prosecutors of hiding evidence that Allen
might have said things that 'would have helped Stevens win his case. They included notes from an
FBI interview in which Allen told the investigator he thought Stevens would have paid a bill had he
ever sent him one.

U.S. District Judge Emmet Sullivan, furious with the government team, ruled that prosecutors had
bungled the evidence but that there was not enough misconduct to declare a mistrial or throw out
the charges.

The trial, on hold for two days last week, restarted this Il)orning with Allen's testimony. Before they
played the audio recordings, prosecutor Joe Bottini walked Allen through a series of questions
about gif~s he'd given Stevens, including furniture, a bed and free labor on repairs to his boiler in
2006. FBI - Stevens-2137
Allen testified.about fixing. the boiler in 2006 and how when he got the blll.from.Chugach Sewer·
and Drain, he didn't think it was right for Stevens to have to pay the labor costs since the plumber
had screwed up the installation. The invoice read, "Labor paid by Bill."

That caused problems, Allen testified.

"I didn't want that saying that I was going to take care of the labor," he said, saying that he talked
to mutual friend of Stevens' and his, Bob. Persons, about the invoice. ''It's going to be a mess, 1
didn't want this invoice going around for everybody, like a secretary, and Chugach Sewer and
Drain."
Stevens'dJd Inquire about the bill, AOsaid, but he never gave it to him.
p
0
(-

"Did he ever ask you how much the labor charges were'(" Botti~l.asked.

"Not that I can remember~ no," Allen said.

But Stevens' attorney elicited a slightly different response from Allen when he asked about the
exact same, invoice.

"When Ted Stevens saw that notation, on the bill that he got in Washington, he called your
secretary, Linda Croft, and told her to tell you he wanted the full bill, didn't he?" Brendan Sullivan
asked.

"Yes," Allen said.

"And your secretary called you and told you exactly what Ted Stevens said, am I correct?"

"Yes," Allen said.

Brendan Sullivan also asked him whether Stevens insisted on paying his share when they dined
together, and whether the senator reimbursed Allen when. he flew on a Veco charter. He also
brought up the racehorse stake the two had with other partners,

"Isn't it true that with respect to those little ventures you had, red Stevens always insisted on
paying all of them m,oney that was properly his share?"

"Yes," Ailen said.

Stevens' lawyer also. asked Allen whether he had told FBI agents that Stevens would he have paid
a bill if he sent him an invoice. "I had no idea how much, but'if it had been an invoice that was
fair, I think Ted would have paid it," he said.

The awkward question-and-answer session was slowed by Allen's claims he was having difficulty
hearing through the voice-amplification system he was using. He also sparred ~ith Brendan
Sullivan.

"You're not going to get me mad, are you?" Allen said.

"No," Sullivan said, adding that Allen would know if he were trying to provoke him.

"You're not going to get me mad," Allen said, smiling.

But Judge Sullivan was suspicious about Allen's demeanor and, on~e the jUry had gone home for
the day, called out to Allen's lawyer, Robert Bundy of Anchorage, in the audience. Bundy was
signaling to Allen, the judge said~ and threatened to hold him in contempt. He also suggested that
Allen wasn't being entirely trutl'iful about his hearing problems. FBI - Stevens-2138

"It's entirely Inappropriate; I can't imagine an attorney doing that," the judge said, adding later,
"It's clear to me what I saw. It's really disturbing.'"

Bottini, who is an assista'nt U.S. attorney In Anchorage; vouched for Bundy and said he had known
him for years., He "would be quite surprised if that was an intentional gesture on his part," Bottini
said. It didn't appear Allen was looking at Bundy at the time.

Outside the courtroom, Stevens' lawyers continued to hammer at Allen's credibility as a witness,
filing a second motion late Sunday asking the judge to declare a mistrial. This time, they accuse
the prosecutors of deliberate misconduct.and said they've manipulated Allen to elicit the testimony
most damaging to Stevens. .
Judge.5Uliivan will hold a hearing TuQY'or Wednesday on the new request foQistrial: The
jut1~e has already twice reprimanded the prosecution team. He earlier became upset when the
government sent'a key witness home' to Alaska without testifying and without informing the court
or defense until the mim left town. Prosecutors said the man, Rocky Williams, a foreman on the
project to expand Stevens' home in Girdwood, was seriously ill.

A()VI;RTISEMENT

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Sell it tad.
More Sen. Ted Stevens stories»
Partial.transcripts of
Judge sends Stevens jurors home for day
evidence on tape Stevens gets help from some friends
Published: October 7th, 2008 12:37 AM Which Stevens will jurors judge?.
Last Modified: October 7th,·2008 02:17 AM
Stevens' defense rests Ad,!anced se
Oct. 18, 2006, phone call between ex-Veco chief Bill Allen and Testimony ends in Stevens trial
U.S. Sen. Ted Stevens. It was played for the Jury Monday in
Stevens' trial.

TED STEVENS: I'm not going to let these guys get us in a position
Story tools where they can charge us with something just because we didn't do
Comments (0)' what they think we should'd9' They've got to go out make the case that
e-mail a friend we did something that is against the law. I don't think we have violated
Print
the law."
Digg this
Seed Newsvine
BILL ALLEN: I don't think we have either, Ted. But ... that lawyer has
Send link via AIM
grilled me and grilled me on what they think they can do. He talks to
[~ "lyy...!~~q
them, I don't."
Font size: A I A IA
STEVENS: That's, that's the way it should be. But as a practical matter,
the question is, what.can they convince the jury, uh grand jury, to
charge l,Is with? That's the problem. But.when I was a district attorney, I handled grand juries, lots
of them. They're funny people, but they also are pe9ple from within the community. And your
reputation and ~verything else comes into play, as far as grand juries are concerned ... We ought
to just cool it. I told Ben the same thing: just cool it, you know, go about our business and smile
and have a happy face '''. Do the things you used to do and just keep going. If it's a violation of
the elections law, that's a corporate violation. This thing, it shouldn't, it shouldn't get to your mind,
old buddy."
FBI - Stevens-2140
ALLEN: Well it has been, I'll tell·you."

STEVENS: .... You've got to get a mental attitude that these guys can't really hurt us. You know,
~ they're not going shoot us. It's not Iraq. What the hell? The worst that ,can be done, the worst that
can happen to us is we round up a bunch of legal fees and might lose and we might have to pay a
fine, might have to serve a little time in jail. I hope to Christ it never gets to that ... So I'm going
to go right through my life an? keep doing what I think is right:

More phone call excerpts

Sept. 10, 2006

!iTEVENS: Keep your heart going, keep yourself going, 'caus~ we got () fight ~ut there ahead of

"... ~~_' _"~. .' .1~~~,~~~··~·::L~~~~~~<?-~


ug. AE9 ~e're g'onna win it because Odn't do anything wrong. You've got a riOo spend all
t)ia morit;y you got to support the party you believe i n . , .
:.;s
ALLEN: Yeah, I know.

STEVENS: You remember that. No one can tell you you sperit too much money.

ALLEN: Right.

STEVENS: The question is whether you did something illegal and I don't think, you did. I have a
little problem about Rick Smith from some of the things 'I'm hearing. I don't know if you're hearing
that, but the things he's done down in Juneau may have been a little bit on the edge. Butwe'll
stick with him. I'm not tossing him-to the wolves, don't misunderstand me.

Oct. 18, 2006

STEVENS: When I was talking to my lawyers, they told me that we, we ought to avoid trying to
look like we'r~ meeting In a situation where we wouldn't be overheard or having no one with us.
They point out that, what's her name, that w9man that uh, who went to jail, Martha Stewart?

AL.LEN: Yeah.

STEVENS: She didn't go to, to jail because she did something wrong. She went to jail because she
lied about a conversation she had with somebody.

ALLEN: Uh huh.

STEVENS: They say we should have no problem ... we can meet, you know have dinner, or what
not. But we should not try to look like we're going' to try to try to keep things from the' world. And
he, they said we oughtto really lay low right now, because this grand jury is meeting. And if they
got wind that it looked like we were going try to, you know, do what they call obstruct justice, they
could call us before the grand jury on a different, different thing all together.

Aug. 31, 2006

(The day of the FBI raids of legislative offices and other locations in Alaska)

ALLEN: ....Yeah, hey Ted, I've been trying to get ahold of Ben. I can't get ahold of him. And uh,
the FBI got a warrant and searched my house and ... and the office...

STEVENS: For what?

ALLEN: Uh, With, with Ben and trying to figure out, y'know, what ... what kind of ... you know,
what, he done for us.

STEVENS: I see. Ok.


FBI - Stevens-2141
ALLEN: And ...

STEVENS: Well, I ...

ALLEN: And uh, they asked me what I done,on your house....

STEVENS: Yeah?

ALLEN: And I said, well, he's paid for everything and uh, you know, you 'don't ... you don't need
this problem again, Ted, but that's what they're, uh, talking me ... and J just told 'em I wouldn't
talk to, 'em.
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Sell it tad.
Stevens evidence on tape
played for jury
Senator maintains innocence in profanity-laced
conversations with friend working for the FBI
-_._-_:. -
Advanced se
By RICHARD MAUER and ERIKA BOLSTAD ., .... "'--.... ... .... -...._........ ... - .... --- .....
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Anchorage Daily News "'~.4.


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WASHINGTON -- In secretly recorded telephone conversations I


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played in court Monday, Sen. Ted Stevens denied wrongdoing
and spat out expletives to describe the federal agents who
were raiding homes and offices in Alaska as part of a sweeping enlarge
corruption probe.

"I don't know what the (expletive) Qocument exhibits


these guys are doing, we'll have to Letters. legal documents. etc. sobmitted as
evidence.
figure that out later," Stevens said
to Bill Allen, the chief executive of
the oilfield services firm, Veco Corp.
The jury heard the full-throated
I Exhibits from 10/20 3'
Stevens, profanity and all.
Related Stories
But the recordings also prOVided Allen's lawyer scolded by judge in Stevens
insight into how Stevens has trial
maintained his presence in Partial transcripts of evidence on tape
Washington and Alaska without Defense renews its bid to dismiss Stevens
shrinking in shame or tria.1
Click to enlarge embarrassment despite the long, FBI - Stevens-2142
Sen. Ted Stevens leaves U.S. Related Links
District Court 10 Washington, public investigation and then his
D.C , Oct 6, 2008, seven-count felony indictment in Listen to Allen-Stevens phone calls" with
transcripts
July.
Fees paid to Ben Stevens questioned by
Story tools Veco execs
Comments (0)
"You've got to get a mental attitude
PDF, Telephon~ evidence graphic
that these guys can't really hurt
E·mail a friend
us," Stevens told Allen on Oct. 18, Photos: Historical photos of Sen. Ted
Print Stevens
Digg this 2006, not knowing that Allen had
been secretly working for the FBI Photos: Sen. Ted Stevens gallery
.Seed Newsvine
Send link via AIM for: nearly two months. Complete Alaska election coverage
:~f HY-Y.:.l~q The Ted Stevens investigation
"You know, they're not gOing to Photos: Exhibits ,Submitted as evidence
Font size: A IAI A shoot us.. It's not Iraq. What the
- ~ --
hel!? Th~ ,~orst that can be done, thOst that can happen to
u!ifS we round up a bunch of legal fees and might lose and we Mor~ Sen. ,Ostevens stories»
might have to pay'a fine, might have to serve a little time in Judge sends Stevens jorors home for day
jail. I hope to Christ it never gets to that, and I don't think it Stevens gets help from some friends
will. But I'm developing the attitude that I don't think I did
Which Stevens will jurors judge?
anything wrong so I'm going to go right through my life and
Stevens' defense rests
keep doing what I think is right."
Testimony ends in Stevens trial'
The three audio recordings, totaling about 30 minutes, were
the first played in Stevens' felony 'disclosure trial, now entering its second full week of testimony.
Later this week, prosecutors say they plan to introduce recordings made on wiretaps on Allen's
phones before he knew he was a suspect.

The recordings are nothing like the videos in the trials last year, where Allen and another Veco
official could be seen reaching for hundred-dollar bills to stuff in the outstretched hands of state
legislators, who were later convicted.

Stevens, now 84 and up for re-election, Is on trial for taking more than $250,000 in gifts -- chiefly
from Veco -- and lying about them on his U.S. Senate financial disclosure forms.

Prosecutors finished their direct examination of Allen at the end of the lunch break Monday, and he
was handed over to chief defense counsel Brendan Sullivan. Over three hours of cross-
examination, Sullivan tried to chip away at the government's case.

The main theme was Allen acknowledging that Stevens would have paid at least a fair price for
much of the work.done on his home by Veco -- had Stevens been billed. Allen also told of how
some of the things he got for Stevens, like strands of outside house and tree lights for the winter,
or big piece,S of ,new and used fumit,ure, were not solicited by Stevens and may not have been
wanted. '

"You never tried to bribe Sen. Ted Stevens, did you, sir?" asked Sullivan

"No," Allen said.

"You knew you couldn't bribe Sen. Ted Stevens, could you, sir?"

"No."
, .
But the charges faced Py Stevens were not that he was bribed or that he asked to get something
for nothing, Rather, he's charged with failing to report gifts under ethics laws enacted by Congress.

Th~ main effort by the pro,secution so far has been to offer evidence that Stevens obtained tens of
thousands of dollars of valuable services, materials and useful items from Veco and Allen, and
knew about it. The defense so far has been that the government's accounting of those services
was overstated, that the gifts weren't wanted, that the work was faulty and that Stevens wasn't
given the opportunity to pay.
FBI - Stevens-2143
The first recording played Monday with Allen on the stand was made Aug. 31, 2006. That was the
day that the FBI conducted a coordinated series of raids on legislative offices, including the office
of Stevens' son, then-state Senat~ President Ben Stevens. It was also one day after Allen began
cooperating with federal authorities.

Allen's call appeared to be the first that Ted Stevens heard of the raids. Allen reached Stevens on
his cell phone while he was walking down a hill in San Francisco with his wife, Catherine.

Allen told him the FBI was asking about his "consulting" payments to Ben and Veco's renovations
to Stevens' house in Girdwood.

"And I just told them I wouldn't talk to them," Allen lied.


'l\(eah,O~. Good," said Stevens. He Q Allen he had an "inkling" something wa~,
but by his
descrip,tions in that conversation and others, seemed to think it was about Veco's campaign.
contributions, not gifts or, in the case of legislators, bribes.

In the Oct. 18, 2006, call, Stevens told Allen his son, in the last two months of his term, wasn't
able to get the investigation out of his mind and it was threatening to affect his family.

"He's got to stop being just so depressed because it'll spring over to the kids. He's going to do all
right. When his term finishes, we'll get some funds to help him pay his law firm, his legal fees. But
he's got a tough row to hoe," Steyens said.

In the Sept. 10, 2006, call, Stevens said he was also emotionally affected by the investigation.

"Well, I'm not getting much sleep when I think about all this (expletive) that's going down, about
four hours a ,night," Stevens said. "But I'm going to survive. i just can't figure out why these
(expletive) are doing this thing to our friends."

Stevens also was equally insistent he broke no laws.

"I don't think we've done anything wrong, Bill, I can tell you right now," Stevens said. "I told my
lawyers I can't think of a thing we've done that's wrong."

Allen's testimony, at the center of the trial against Stevens, began last week. The trial nearly
derailed Thursday after Stevens' lawyers accused prosec~tors of hiding evidence that Allen might
have said things that would have helped Stevens win his case. They included notes from an FBI
interview in.which Allen told the investigator he thought Stevens would have paid a bill had he
ever sent him one.

U.S. District Judge Emmet Sullivan ruled that prosecutors had bungled the disclosiJre of evidence
to the defense, but that there was not enough Il)isconduct to declare a mistrial or throw out the
charges.

The trial, on hold over the evidence question, resumed Mo"nday with Allen still on the stand, and
he'll be there again this morning for more cross-examination. Before prosecutors played the audio
recordings, ~ssJstant U.S. Attorney Joe Bottini of A~chorage walked Allen through a series of
questions about gifts he'd given Stevens, including furniture, a bed-and free labor on repairs to his
boiler in 2006.

Allen testified about fixing the boiler in 2006, and how when he got the bill from Cliugach Sewer
and Drain, he didn't think it was right for Stevens to have to pay the labor costs, since the plumber
had initially installed a circulation pump backward. On the invoice, it read "labor paid by Bill."

That caused problems, Allen testified.

"I didn't want that saying that I was going to take care of the labor," he said, saying that he talked
to mutual friend of Stevens' and·his, Bob Persons, about the invoice. "It's going to be a mess, r
didn't want this invoice going around for everybody, like a secretary, and Chugach.Sewer and
Drain."
FBI - Stevens-2144
Stevens did inquire aboiJt the- bill, Allen said, ~ut he never gave him i~.

But Brendan Sullivan, Stevens' attorney, elicited a slightly different response from Allen when he
asked about the same invoice in cross-examination.

"When Ted Stevens saw that notation, on the (parts) bill that he got in Washington, he called your
secretary, Linda Croft, and told her to tell you he wanted the full bill, didn't he?" Brendan Sullivan
asked.

"Yes;" Allen-said.
"AJ1d you~ secretary called-you and Sy~u exactly what Ted Stevens said, amQrrect?"
"Yes,"-Allen said.

When Allen built his own home and moved out of an apartment, he filled several rooms of Stevens'
home'with his old furniture. Allen, a tall, big man, had large, comfortable living room furniture that
overwhelmed the Girdwooq home, Allen acknowledged under questioning as monitors around the
courtroom displayed a particularly wide chair.

"You're not an interior decorator?'; Sullivan asked.

"NO," said Allen.

"Did they telLyou he (Stevens) couldn't sit in the chair because his feet didn't touch the ground?"

"NO, they were too polite," Allen said.

Sullivan also asked him abo~t whether Stevens insisted on' paying his share when they dined
together, and whether the senator reimbursed Allen when he flew on a Veco charter. I-!e also
brought up the racehorse stake the two had with other partners.

"Isn't it true that with respect to those little ventures you had, Ted Stevens always !nsisted on
paying all of them' money that was properly his share?"

"Yes," Allen said.

Stevens' lawyer also asked Allen whether he had told FBI agents that Stevens would have paid a
bill if he sent, him ~n invoice.. "I had no idea how much, but if. it ha~ be,en al)invoice that was fair, I
think Ted would have paid it," he said. "' - --

The awkward question-and-answer session was slowed as Allen complained of having difficulty
hearing through the voice-amplification system he was using. He also sparred with Brendan
Sullivan.

"You're not going to get me mad, are you?" Allen said.

"No," $ullivan said, adding that Allen would know if he were trying to provoke him.

"You're not going to get me mad," Allen said,·,smiling.

But Judge Sullivan was suspicious about Allen's demeanor. With the jury still in, he, pointed to a
lawyer in the front row of the spectator's section, Robert Bundy .of Anchorage, and said he saw him
signaling to Allen and demanded at once that he stop. A marshal moved to the aisle one row
behind Bundy and stood there till the next recess.

With the jury gone but.the room still filled with lawyers, reporters and other spectators, Sullivan
demanded Bundy, Allen'.s attorney, identify himself., Sullivan threatened Bundy with a contempt
citation and an ouster from thecourtrool"(l. FBI - Stevens-2145

n~t'~ eptirely in<il'p!opriate, I~can'tjmagine an attorney doingthat,lOthe ,judge said, adding later,
"It's clear to me what I saw. It's really disturbing."

Bottini, who is an assistant U.S. attorney in Anchorage, vouched for- Bundy and said he had'known
him for years. He "would be quite surprised if that was an intentional gesture' on his part," Bottini
said. It didn.'t appear Allen was looking at Bundy at the time.

Outside of the courtroom, Stevens' lawyers continued to hammer at Allen's credibility as a witn'!!ss,
filing a second motion late Sunday. asking the judge to declare a mistrial. This time, they accused
the prosecutors of delib~rate rni~C9J1duct alJd, sa!s' t.h~y'v~ _ma.liipul~ted Alien,to elicit the testimony
most d'!llJ.aging to Stevens.
"
J~dge Sullivan will hold a hearing today or Wednesday on the new request for a mistrial.
o
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Sell it tod;
Document exhibits
Allen's lawyer scolded by Letters. legal documents. etc. submitted as,
evidence..
judge in Stevens trial
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily ,News I Exhibits from 10/20
Published: October 7th, 2008 09:37 AM Advanced se
Last Modified: October 7th, 2008 09:43 AM Related Stories

WASHINGTON - The attorney representing Bill Allen, the star 'Stevens evidence on tape played for jury
witness in Sen. Ted Stevens' corruption trial, was scolded Defense renews its bid to dismiss Stevens /Jf 0.

further Tuesday morning by the judge overseeing the . trial ~


case.Anchorage attorney Robert B~ndy, who has been sitting Partial transcripts of evidence on tape
in the spectator section of the·' courtroom' in Washington while
Related Links
his client has been testifying, was accused Monday by the
judge of trying to signal to Allen on the stand and help him Alaska Politics blog: New poll shows
answer questions from a defense attorney. Stevens-Begich race virtual tie
Photos: Exhibits submitted as evidence
"I couldn't believe what I was The Ted Stevens investigation
seeing," U.S. District Judge Emmet Complete Alaska, election coverage
Sullivan said Tuesday morning; in
Ph()~os: ~en. Ted ?tev~ns g<lllery
something or' a sideshow before the
Photos: Historical photos of Sen., Ted
trial began for the day. "That's Stevens
borderline obstruction of justice."
PDF: Telephone evidence graphic
Bundy's colleague, Creighton Magid, Fees,paid to Ben .Stevens questioned by
Veco execs
said Tuesday morning that the
Anchorage lawyer and former U.S. Listen to Allen-Stevens phone calls, with
transcripts
attorney is "absolutely torn up by
t~is" and "vehemently" denied Related Audio Content FBI - Stevens-2147
signaling to his client.
More Sen. Ted Stevens stories»
Monday, at the close of proceedings
JUdge sends Stevens jurors home for day
b~t with the jury still in the
_Stevens gets help from ~gm~ friends
courtroom, Judge Sullivan-pointed,-
to Bundy, said he saw him signaling Which 'Stevens will jurors judge?
Story tools
to Allen, and demanded he stop. A Stevens' defense rests
Comments (0)
marshal moved to the aisle one row Testimony ends in stevens trial
E·mail a friend
Print
behind Bun~y and waited there until
Digg this the next recess.
,Seed Newsvine
Send link via AIM With the jury gone but the room still fi,lIed with lawyers, reporters and
l~ MYYhl-loOi.1 other spectators, Judge Sullivan demanded that Bundy,ide.ntify himself..
Tii~judgealso"threatenedBuridywitha contempt cita'tionand an ouster .
~_.__ ~. _._
.. ~. ~ ._~. ~ __ ~__ ~.Li c{4--A-tV---~!6~O~~~_8.-_
-- - -- ------

~,
I ~
)
from the Otroom. 0
Judg-lS~lIivan raised the matter again Tuesday morning, asking for Bundy to appear in the
courtroom"but he was not there. Magid spoke on Bundy's behalf and also said he would represent
Allen's interest in court today. .

Stevens' chief lawyer, Brendan Sullivan, said he wasn't planning to say anything about what his
own team had seen the ~ay before, but since the judge had brought it up, he would. Stevens'
- personal lawyer, Bob Phillips, told one of. the lawyers on the defense team Monday that he also ha~
observed some sort of communication between Bundy in the courtroom,and Allen on the stand,
Sullivan said in court Tuesday. .

"He was so distressed at what he saw, that he got up and signaled one of our young lawyers to
mention what h~d happened," Brendan Sullivan said.

Stevens' lawyer also said that'he received a call Monday night from Magid, asking him whether. he
objected to Bundy being in the courtroom during Allen's testimony. Brendan Sullivan told the judge
that he told Magid on Monday night that he didn't want Bundy in the courtroom.

But prosecutors vouched for Bundy, calling him a "stellar" attorney. The accusations by the
defense were just another "scurrilous" attempt to stir up trouble in the case and smear Bundy's
name, said the chief prosecutor, Brenda Morris. It will be in Alaska newspapers now, Morris said,
and will open up Bundy to the kind of hate mail she's received from people in the state.

Magid, too, said he was concerned, that it had already been mentioned in the Anchorage Daily
News. His colleague-is an honorable former federal prosecutor who sits on the ethics committee of
the Alaska Bar Association, Magid said.

"To have shotS taken at Mr. Bundy and him not in the po?ition to <!efend himself, I think i~
• fundamentally unfair," Magid said.

That's true, Judge Sullivan acknowledged. The judge also conceded it was also possible th~t
"maybe he was shaking his head in disbelief at something else."

Later this morning, when cross-examination of Allen resumed in the courtroom, Brendan Sullivan
asked Allen whether he had seen Bundy in the courtroom Monday, and asked whether Allen saw
hi~ nodd-ing- his h-ead wh~n he gave certain answers.

"No," Allen said, "no, he did not do that."

Judge Sullivan said he didn't want the issue to be a distraction from the trial, but also said he
wasn't content to let the issue rest and may ask for some sort of statement from, the other
attorney who witnessed the signals. He refused on Tuesday to rule out any sanctions.

Contact the reporters: ebolstad@adn.com and rma~er@adn.com.

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Sell it tod.
Document exhibits
Stevens friends plotted to letters. legal documenls, etc. submilled as
evidence.
cover bills
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News I Exhibits from 10/20
Published: October 7th, 2008 04:46 PM Advanced se
. Last Modified: October 7th, 2008 04:47 PM Related Stories

WASHINGTON - Sen. Ted Stevens' friends went out of their Partial transcripts of evidence on tape
way to help pay his bills, according to court testimony today, Defense renews its bid to dismiss Stevens
even conspiring to cover up how mUCh, they paid for something trial
as minor as plumbing repairs at his home, in Girdwood.
.
Stevens evidence on tape played for jury

Relate~ Links
"I'll just tell Ted to give me a
check," his friend Bill Allen said in a Listen to wiretaps played for jury Tuesday
conversation secretly recorded in~ Listen to Allen-Stevens phone calls, with
2006, by FBI agents investigating transcripts
corruptio.n in Alaska politics. Fees paid to Ben Stevens questioned by
Veco execs
"Y~u don't Pi:l'le,J:Q d~po?l~it, Y2l:1 PQf..;
. TEl!~phone
- - ----" .evidence
-.--- - -- graphic
--,

just have to make a copy of i~," s.'~!<J Photos: Historical photos of Sen. Ted
Stevens' friend Robert Persons, who Stevens
kept an eye on Stevens' home when Photos: Sen., Ted Stevens gallery
he was out of town. "Then if it ever Complete Alaska election coverage
did come up, you can say, 'I didn't
The Ted Stevens,investigation '
deposit that? Hell, I know I,did.' "
Click to enlarge Photos: Exhibits submitted as evidence
Sen. Ted Slevens leaves U.S.
District Court in Washington.
The telephone conversations, Related Audio Content FBI - Stevens-2149
D.C.• OCI. 6. 2008. played in court today near the end
of the prosecution case against the More Sen. Ted 'Stevens stories»
senator, came as close to a
Story tools Judge sends Stevens jurors home for day
smoking gun as Stevens' corruption
Comments (0) Stevens gets help from some friends
trial has had. Stevens, 84, 'is on
E-mail a friend
.Print , - _. tr@1 forJying.on hLs ,§enate financial Which Stevens will jurors judge?
Digg this disclosure forms about more than Stevens' defense'rests
Seed. Newsvine $250,000 in gifts and renovation~ to Testimony ends in Stevens trial
Send link via AIM his home in Girdwood in recent
b H';,y"I~OO!·1 years. The gifts were largely from Veco Corp. and its chief executive,
Allen, who now is the star witness in a corruption trial that's been under'
~-
Font size: A I A I A way since Sept. 22.

Prosecutors have been working to establish a case that time after time, Stevens took gifts even
t.~~ugh he knew,he shou~d have p.':li,d his own way.
./1 t.(A,-. -r:t;A)- (36/1. 0 - .N\
- - ~
But they'Ve,stumbled in their presenCns, and Stevens' defense team has accC them of
wiilittofding evidence that would have been helpful to the senator's defense. Stevens' lawyers have
tried twice now to have the charges thrown out and will argue again today in front of the judge for
a mistrial.

Today, Brendan Sullivan, Stevens' lead defense attorney, continued to tear into the government's
case when he cross-examined Allen, who has already pleaded guilty to bribing state lawmakers In
Alaska. Sullivan worked to leave jurors with the impression that Allen deliberately held back
information from Stevens about bills, and that the senator would have paid them had he ever been
sent an invoice.

Brendan Sullivan also sought to dismiss the idea that Veco got special benefits when Stevens came
to the company's defense over a pipeline in.Pakista!1, a labor training program for Russians, a
logistics contract with the National Science Foundation and· support for a proposed natural gas
pipeline.

Sullivan today questioned Allen about his plea deal with the government and the risks that his lack
of cooperation would disrupt the sale of Veco last year to CH2M Hill, the international engineering
and construction firm based in Colorado. The company withheld $70 million from the ca'sh they
paid the owners of Ve~o -- Allen, his three children and two top executives -- to protect against
contingencies( including the possibility Veco itself would be indicted.

But prosecutors came back swinging with the recordings this afternoon. Jurors paid close attention
to the conversations between Allen and Persons and openly guffawed at the salty exchanges.

Prosecutors also played conversations highlighting Stevens' legendary tight-fisted ness. Persons,
Allen and Stevens were part of a horse racing venture and it was d!fficult to pry money out of the
s.enator for it, his friends joked in their recorded.conversations. Even Stevens' wife,·Catherine,
acknowledged it, the two joked.

"As Catherine says, Ted gets hysterical when he has to spend his own money," Persons said,
chuckling. "He gets hysterical because he can't really afford to pay a bunch of money; I think."

"I know," Allen said.

One of the conversations shows the two were especially Irritated in e(lrly 200'6 after Allen sent a
plumber he knew to make emergency repairs to Stevens' boiler.. The plum6er sent an invoice ~or
his work with the notation "Labor paid by Bill" that Persons forwarded on to Stevens.

Stevens saw the notation and got annoyed, according to testimony. He sent Allen's secretary a~ e-
mail saying he wanted to pay the whole bill, including labor costs. Allen had had it split In two so
that he paid the $1,080 in labor and Stevens got the $1,187 bill for parts.

On Feb. 16, Allen called Persons to ask him why the bill went to Stevens marked w,ith "labor paid
by Bill."
FBI - Stevens-2150
"Oh (expletive), I didn't even see this, oh, labor paid by Bill. Ouch. I didn't see that, I'm sorry,"
Persons said.

"Oh (expletive)," Allen said;

"Well, it went straight to his house," Persons said.

"Yeah, but I got an email from ... that he's got to talk to me/, Allen said, "and I've already taken
care of that (expletive) bill."

"I just looked at that and I didn't.. .son of a bitch. I know you didn't, want him to know that, did
you?" Persons said.

-~--
. . _ " - -'----'" --- ----
~- -
"WeH,
i,' W
t.h~t, .•:md I didn't want eVerybQto know,'" Allen said. 0
Allen testified earlier in the day that although Stevens initially offered to pay him, Allen never sent
him an invoice, and Stevens never again offered to pay.

But he also testified that he thought Stevens wanted to pay. A,lfen said he remembered having a
conversation about the amount of work Veco had done on his house, as the two men were getting
into ~lIen's car outside the Double Musky Inn, the restaurant in Girdwood owned by Persons. "He
said, 'I know you're putting more work in there than what you're saying,' " Allen said.

Investigators had been recording Allen's conversations secr~tly for some time as part of their
investigation, but he was not aware of it until Aug. 30, 2006, when the FBI searched his home and
office and accused him of bribing state lawmakers. Allen agreed to cooperate with prosecutors and
record some conversations with Stevens.'Some of those were played during Monday's testimony.

The prosecution is expected to wrap up its case Wednesday, when the judge overseeing the'case
will also hear a motion by Stevens' legal team for a mistrial.
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Sell it tod.
Stevens jury hears of plot
to hide bills
STEVENS TRIAL: Senator's friends tried to cover
up plumbing w~rk. Advanced se
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
Published: October Stll, 2008 12:38 AM
La~t Modified: October 8th, 2008 11:49 AM.

WASHINGTON -- Two of Sen. Ted Stevens' best friends went


into a panic in 2006 when they learned a plumber had mailed more
a bill showing that one of them --Veco Corp. chief executive JOSE LUIS MAGNA/. The Associated Press
Bill Allen -- had paid more than $1,000 of his own money to fix Sen. Ted Stevens, R-Alaska, and his daughter
Beth Stevens arrive at the U.S. District Court in
Stevens' boiler. Washington Oct. 7, 2008.

The Feb. 16, 2006, telephone


Story tools conversation between Allen and Document exhibits
Comments (0) Double Musky owner Bob Persons, Letters, legal documents. etc, submitted as
e-mail a friend evidence.
intercepted in an FB! wir.etap an.d
Print played in court Tuesday, unveiled
Digg this
the two men plotting a cover-up of Exhibits from 10/20
Seed Newsvine
Send link via AIM the plumber's honest transgression
-- a scheme to first destroy the "
@iiMYYhHOOI·1 Related Stories
evidence, then create a cover story
Font size: A I A I A that would have reqUired Stevens' Consulting fees paid to Stevens' son
participation. questioned
Stevens evidence on tape played ,for jury
"We need to get the guy at Chugach Sewer & Drain to make Defense renews its bid to dismiss Stevens
that disappear from his records," Persons told Allen. Then, trial FBI - Stevens-2152
Persons said, working out the plot as he spoke, Allen should 'partial transcripts of evidence on tape
get Stevens to write a check to him for the exact amount.
Related Links
"You don't have to cash it -- just have it," Persons said. "You Alaska Politics 810g: First defense
don't have to deposit it, just have to make a copy of it..... And witness - Colin, P.owell - .
then if it ever did come up, you can say, 'I didn't deposit that? Photos: Exhibits submitted as evidence
Hell, I know I did. I don't know where it went.' " Both men The. Ted Stevens investigation
broke out in laughter at the thought of fooling a newspaper Complete Alaska election coverage
reporter or government investigator.
Photos: Sen. Ted Stevens gallery
Photos: Historical photos of Sen. Ted
Jurors laughed too -- but it was like the last laugh at two men
Stevens
caught in the act.
PDF: Telephone evidence graphic
'g55 listen to wiretaps played (or jury Tuesday
{ql-{A-""J>;IIJ- C;'6;o-..¥\
There-was no eVid~nce presented thQevEms ever wrote the
"p~;>ny check, but the two friends expressed no doubts he
o
Listen to Allen-Stevens phone calls, with
transcripts .
would if asked.
Related Audio Content
The phone call was the closest thing so far to a smoking g.un in
Stevens' felony trial. It closed out the seventh day of More Sen. Ted Stevens stories»
testimony, giving jurors something to think about overnight as Judge sends SteveQs jurors home for day
the government neared the conclusion of its case. Prosecutors
Stevens gets help from some friends
may present the last of their witnesses today.
Which Stevens will jurors judge?
Stevens is accused of seven counts of failing to disclose more Stevens' defense rests
than $250,000 in gifts and favors, mainly from Allen and his Testimony ends in Stevens tri~1
Anchorage-based oil-field service company, Veco.

DEFENSE CROSS-E>sAMINES ALLEN

Earlier Tuesday, Brendan Sullivan, Stevens' lead defense attorney, continued to tear into the
goverr:lment's case as he cross-examined Allen, who has already pleaded guilty to bribing state
lawmakers in Alaska. Sullivan worked to leave jurors with the impression that Allen deliberately
held back information from Stevens about bills, and that the senator would have paid them had he
,ever been sent an invoice.

Sullivan also sought to dismiss the idea that Veco got special benefits when Stev~ns came to the
company's defense over a pipeline in Pakistan, a labor training program for Russians, a logistics
contract with the National Science.Foundation and support for a proposed natural gas pipeline.

Sullivan on Tuesday questioned Allen about his plea deal with the goyernment and the risk his
non-cooperation would be to the sale of Veco last year to CH2M Hill, the international engineering
and construdion firm based in Colorado. The company withheld $76 million from the cash it paid
the owners of Veco -- Allen, his three children, and two top executives -- to protect against
contingencies, including the possibility Veco itself would be indicted.

At one point, Sullivan all but accused Allen of lying on the witness stand about a remark Allen
attributed to Persons. That came in testimony last week, when Allen told of receiving a handwritten
note from Stevens in 2002 thanking him for renovating his home in Girdwood.

In'that note, Stevens told Allen he wanted a bill for all of Veco's work. But Stevens also advised
Allen to talk about the bill with Persons, ~ neighbor who has looked after Stevens' home for years.

When Allen did, he testified, Persons told him: "Don't worry about getting a bill -- Ted's just
covering his ass."

The phone call four years later between Allen and Persons did nothing to discredit Allen's
FBI - Stevens-2153
testimony.

By February 2006, the FBI was deep in its investigation of public corruption in A'iaska, though
,nothing had surfaced pUblicly yet. The government had obtained wir~tap warrants for all of Allen's
phones and had been listening for months when the plumbing bill came up.

,PLUMBING PROBLEM

In earlier testimony, Veco electrician Jack Billings said he had gotten'called one evening to
Stevens' home in Girdwood over a failure of the heating system. Stevens and Allen were there
when he arrived from Anchorage:

Billings said he soon figured it was a plumbing problem, not elec rical. It was late to call someone,
but Allen told Billings to call his plumber: Charlie Hart of Chug h Sewer & Drain of Anchorage.

Hart·didn't sl'ecializein boiler~, ~l!t he figured the pr()~lem was the boiler's circulC!ting pum,,~ He
rePI~:e~ ~t, but put the new one in Oard. 0
"'''!~gota call later -- it was Bill Allen. We didn't help anything -- i,t made the situation worse,!'
Billings testified Sept. 30. Stevens had a fireplace to keep warm, and they decided to ~all Hart
back on a non-overtime basis.

Hart, testifying Tuesday after Allen, said he reinstalled the pump and put in a new pressure tank
and other parts. At Allen's request, he sent the $1,118 bill for the parts to Stevens by way of
Persons. He sent the $1,089 bill for labor and travel time to Allen at his Veco office.

The labor bill falsely listed the job site as 1644 W. 11th Ave in Anchorage -- Allen's home. The
parts bill sent to Stevens had this notation: "Repair Materials for Heating System. Labor paid by
Bill."

INTERCEPTED PHONE CALLS

Three intercepted calls were played to the jury Tuesday, all of them related to th~t bill.

On Feb. 2, 2006, Allen spoke to Persons and told him how he had split the bill and planned to take
care of the labor himself. In the same call, Persons discussed how famously tight Stevens was with
his money, referring to something he heard from Stevens' wife, Catherine.

"As Catherine says, Ted.gets hysterical when he has to spend his own money," Persons said. "The
flip side of it is, he can't really afford to pay a bunch of money."

Two weeks later, Allen got a call from his secretary, Linda Croft. She said that Stevens had sent
him an e-mail saying he just got his bill for parts from Chugach Sewer & Drain. "It says 'Labor paid
by Bill,'" SteVens wrote. "I should pay those plumbers. Please have someone send me a bill."

Wnen Allen spoke with Persons .Iater that day, .he told him about the e-mail.

"I faxed him a bill," Persons said. "Isn't that what you wanted .me to do?"

"What did it say about me doing it?" Allen asked.

"It doesn't say anything," Person~ said .. But then he decided to take another look at the bill.

"Oh s---, I didn't even see this. Oh, 'Labor paid by Bill.' Ouch. I didn't see that. I'm sorry," Persons
said. At least it went straight to Stevens' house and wasn't seen by anyone else, Persons said.

But Allen's secretary knew, and so did the plumber, the men realized.

"We don't need this thing floatIng around," Persons said. "You tell that guy that he needs to, if he's
got this bill in a file that he needs to get rid of it."

Only briefly did the two men discuss getting Stevens to actually reimburse Allen for that $1,080 he
paid. Rather, they decided to just tell Hart, th~ plumber, that happened. FBI - Stevens-2154

"Make him understand that Ted's paying for everything," Persons said. "That's the safest thing,
Bill."

That's when Persons came up with the phony check idea.

"Have Ted write you a check for that," Persons said.

"Huh?" said Allen.

"To have Ted write you a check for that. You don't have to cash it -- just have it."

"Yeah. Yeah," said Allen.

~---~--
- ~--------- -----=-~.-==--~
- ------------

"Aild.~hen if it ever cOf!les up, say seQ you, here's the check," Persons said. 0-
.." p' .
"That's the thing to do it, right there: "

"I'll call 'red and tell him, send you a check," Persons said.

The prosec~tion is expected to wrap up its case today, when the judge overseeing the trial will al~o
hear a motion by Stevens' legal team for a mistrial.

Contacfthe reporters: rmauer@adn.com and ebolstad@adn.com.


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Sell it tod.

Judge li-:nits evidence,


won't halt~trial
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
Published: October 8th, 2008 04:10 PM Advanced se
Last Modified: October 8th, 200804:11 PM,

WASHINGTON - The corruption case against Sen. Ted Stevens


suffered a blow to its credibility this afternoon when a federal
judge ruled that prosecutors erred and jurors won't be abl.e to
consider crucial ~vidence about the time two workers spent ,more
~renovating his house. JOSE LUIS MAGt{A I Tl)e Msocil.)ted Press
Sen. Ted Stevens, R-Alaska, and his daughter
Jurors will be told to disregard Beth'Stevens arrive at the U.S. District Court in
St9ry tools Washington Oct. 7. 2008.
evidence they've seen concerning
Comments (0) how much time two Veco Corp.
E-mail a friend workers, Robert "Rocky" Williams Document exhibits
Print
and Dave Anderson, spent Letters, legal documents, etc. submitted as
Digg this evidence.
r~modeling Stevens' home in
Seed Newsvine
Send link via AIM' G,irdwood in 2000 and 2001. They'll
r~MY~q
also be told that prosecutors knew
the hours Anderson said he worked
I Exhibits from 10/20
Font size: A I A I A could be inaccurate and yet still
presented it to the jUry as part of Related Stories
the $188,000 total that Veco accounting ,records show the oil Stevens jury hears of plot to hide bills
field services company spent on the Stevens remodel. . Partial transcripts of evidence on tape
Defense renews its bid to dismiss Stevens
"It's very troubling that the government would utilize records trial
the government knows were fa.lse," said Judge Emmet Sullivan Stevens evidence on tape played for jury
said. "And ,there's just no excuse fqr that whatsoever."
Consulting fees paid to Stevens' son
questioned FBI - Stevens-2156
Judge Sullivan made his ruling W~dnesday immediately after a
hearing on a motion tq throw out the case or declare a mistrial Related Links
-- the fourth such move DY Slevens' Washington, D.C.-based Listen to Allen-Stevens phone calls, with
defens~ team. Prosecutors had just,presented their final transcripts
witness, an FBI agent who walked jurors through dozens of e- Listen to wiretaps played for jury Tuesday
mails showing Stevens' awareness of the progress and the
PDF: Telephone evidence graphic
extent of the home repairs to his so-called chalet'in the ski
Photos: Historical photos of Sen. Ted
town. Stevens
Photos: Sen. Ted Stevens gallery
Stevens, 84, is on trial for seven counts of filing false
statements on the financial disclosure forms he's required to Complete Alaska election coverage
The Ted.5tevens investiQation ~
/q 1.{,4- -1'\-1\1 -l-~6J 0- ~"V\
--------
submit each y~ar as a U.S. senator. ~Alaska Republican is
Photos: EXhiOubmitted as evidence
accused of ~ccepting more than $25~0 in gifts and home
repaifs, mostly from Veco and its chief executive, Stevensi Alaska Politics Blog: First defense
witness - Colin Powell
former <;!9se friend Bill Allen.
~
Related Audio Content
Stevens' team, led by Brendan Sullivan, filed its motion fate
Sunday after tney had the opportunity to review more than More Sen. Ted Stevens stories»
300 FBI interview reports and 83 grand jury transcripts the
Judge sends Stevens jurors home for day
judge ordered government lawyers to turn over.
Stevens gets help from some, friends
The defense team got those documents last week after Judge Which Stevens will jurors judge?
Sullivan ruled prosecutors had dragged their feet in tUrl!ing Stevens' defense rests
over evidence that might be helpful to Stevens' case. That Testimony ends in Stevens trial
evidence included statements by Anderson that he thought
Stevens would have paid bills for repairs - had he ever been given an invoice.

"This is a criminal case with a career on the line, and the court lias responsibilities, the defense has
responsibilities, the government has responsibilities," said one of Stevens' lawyers, Robert Cary.
"Time and time and time again the government has not lived up to them."

The documents the defense, team received last week typically aren't turned over in their entirety to
defendants, but, skeptical that the government had turned over everything, Judge Sullivan had
prosecutors send them to Stevens' lawyers. The evidence showed that Anderson testified during a
grand jury that he was in Portland, Ore., at the end of 2000, even though he submitted timesheets
to Veco for work in Alaska on the Stevens place at the same time.

That chips away at the goverlJment claim that Veco spent $188,000 on Stevens' home, Stevens'
lawyers argued. The $188,006 figure was one of the first numbers jurors saw, when a Veco'
bookkeep,er testifiedin excruciating detail in the opening days 9f the trial about the total.expenses
the company's records showed had been spent on Stevens' home.

Prosecutors argued that they didn't think the Anderson time was an issue because there was a
whole list of traae~men -- many of whom have testified during the trial about the work they did at
Stevens' home - whose time wasn't reflected in the spreadsheet explained by the Veco
bookkeeper.

"There was a significant amount of time that Veco put in that never got put on that spreadsh~et,"
said Nicholas Marsh of the Justice Department's Public Integrity unit. "There's a ton of Mr.
AlJderson's time that never got put on that spreadsheet."

'But Judge Sullivan was especially incredulous that Marsh sat in on Anderson's ,grand jury testimony
two years ago and heard him say he wasn't in Alaska yet still presented the worker's timesheets as
accurate to jurors in the opening days of the trial

"We didn't look at the case that way," Marsh said as he explained his theory that there were
countless hours of work not reflected on the Veco spreadsheet. "I'm being very truthful." FBI - Stevens-2157

"You closed your eyes then," Judge Sullivan said. "You had tO,have closed your eyes to that
testimony. Someone on that team knew Anderson wasn't in Alaska, he was in Portland. Someone
on that team had an obligation to say, 'Something smells here.' "

It is the third major misstep by prosecutors, although it is only the first that will be evident to
jurors. Prosecutors were chided previously by the judge for sending Williams home to Alaska
without telling anyone. Williams, who was so ill that prosecutors were concerned for his life, wasn't
used as a prosecution witness although other witnesses have mentioned his name repeatedly.

Although the judge's ruling leaves the government's case against Stevens intact, jurors will be told
to disregard evidence because prosecutors failed in their obligation to disclose crucial information
to the defense team.

_ _ _ _ _ _ _ _ _-=....0= '~~~-~'~~~-~ -~,-~--.- - -,- -


In addition 'to the warning about theOounting records, th~Y'1I
be given a secorOstruction to
disre9ard all ~Yidence regarding an automobile "trade Stevens made with Allen. Judge Sullivan
decided to strike that evidence after Stevens' lawyers complained yesterday they were never
shown a"check that shows Allen paid $44,000 for a Land Rover. The SUV was traded to Stevens,
who gave it to his daughter, for the senator's 1964V2 Mustang and $5,000.

Stevens' team spent substantial time this week trying to prove that Allen didn't actually pay
$44,000 on the car but failed to land a "gotcha" moment because prosecutors came forward with a
cancelled checl< that showed he had paid that much for it. Angered, they filed their fourth motion
for a mistrial.

They should have been shown the check, Judge Sullivan agreed. He said he was surprised
prosecutors never entered it as evidence, since it could have boosted the credibility of Allen's
testimony.

Allen has already pleaded guilty to bribing state lawmakers in Alaska and is cooperating with the
government in exchange for leniency in his own sentencing.

The chief Justice Department prosecutor in the case, Brenda M()rris, told the judge that the swift-
moving nature of this trial was bound to lead to snags in turning over information to the defense.
Stevens, who has held office since 1968, is up for a difficult re-election bid and asked for a speedy
trial so he could have a verdict before voters make their decision about his future on Nov. 4.

But Judge Sullivan said speed was no excuse.

"It's not about the pace of litigation, it's about the fairness of the proceedings," he said. "We, don't
sacrifice fairness for expedience."
AOVERTISI;MENT

FBI - Stevens-21S8

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Sell it tod.
Judge tosses out -evjdence
in Stevens trial
Sullivan says government knew timesheets
were wrong but still tried to use them Advanced se
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
Published: October 9th, 2008 01:08 AM
Last Modified: October 9th, 2008 12:18 AM

WASHINGTON -- p,.rosecutors in the corruption case against


Sen. Ted Stevens suffered a blow to their credibility
WednesdaY.when a federal judge said their error required,him
to throw out some crucial evidence about the time two workers more
spent renovating Stevens' house. JOS~ lUIS MAGANA I Tile Associated Press
Sen. Ted Stevens, R-Alaska. takes a walk Oct. 8,
2008, during a break at U.S. District Court in
Jurors will be tol~ to disregard WaShington. D.C.
Story tools
evidence they've seen concerning
Comments (~) how m'uch ~ime two Veco Corp.
E-mail. a friend workers, Robert "Rocky" Williams· 'Document exhibits
i>dilt and Dave Anderson, spent Letters, legal documents, etc. submitted as
Digg this evidence.
remodeling Stevens' Girdwood
Seed Newsvine
Send link via AIM residence in 2000 and 2001.
[~ ;IYYhH<X;)!.l
They'll also be told that prosecutors
I Exhibits ffom 10/20 3
Font size: A I A I A ,knew that hours Anderson worked
Related Stories
were inappropriately calculated in
the $180,000 total that Veco accounting records' show the oil E-mails kept Stevens informed of progress
field services company spent on the Stevens remodel. Stevens evidence on tape played for jury
Defense renews its bid to dismiss Stevens
"It's very troubling that the government would utilize records trial .
the government knows were false;" said Judge Emmet Partial transcripts of eVidence on tape
Sullivan. "And there's just no excuse for that whatsoe~er." "FBI - Stevens-2159

J~dge
- - --

Sullivan made his ruling Wedn~sday right after a .' Related Links
Photos: Exhibits submitted as evidence
hearing on a motion to throw out the case or declare a mistrial
The. Ted Stevens investigation
-- the fourth such move by Stevens' Washington D.C.·~ased
Complete Alaska election coverage
defense team. Prosecutors had just presented their final
scheduled witness, an FBI agent who walked jurors through Photos: Sen. Ted Stevens gallery
dozens of e-mails showing Stevens' awareness of the progress Photos: Historical photos of Sen. Ted
and the extent of the Girdwood home remodeling. .Stevens .
PDF: Telephone evidence graphic
Hours after Sullivan's runngi'pros.~cutor:.s filed ,~.motion asking, F:ees paid,to,Ben.Stevens questioned by.
_ _ _ _v_ec_.o exe5'1~lj..-9-~~~_ L~bao-~ ~~
. ~.'-'-~' =====
him to,,~econsider, saying they couldf"\another witness -- a
Veco
~J
foreman' -- who would clarify th~ours worked on the
~o
Listen AllenOens phone calls, with
transcripts
job. they didn't name the witness, but they had originally
Listen to wiretaps played for Jury Tuesday
announced Williams, a foreman, would testify for the
government, but then sent him back to Alaska, saying he was Related Audio Content
suffering from health issues.
More Sen. Ted Stevens stories »
In that motion, the government also asked Sullivan·to not
Judge sends Stevens jurors home for day
point fingers at the government)n front of the jury.
Stevens gets help from some friends
DISCREPANCIES IN EVIDENCE Which Stevens will jurors judge?
Stevens' defense rests
Stevens, 84, is on trial for seven counts of filing false Testimony ends in Stevens trial
statements on the financial disclosure forms he's required to
submit each year as a U.S. senator. The Alaska Republican is accused of accepting more than
$250,000 in gifts and home repairs, mostly from Veco and its chief executive, Stevens' former
close friend, Bill Allen ..

Stevens' lawyers, lea by Brendan Sullivan, filed its motion Sunday night after they reviewed more
than 300 FBI interview reports and 83 grand jury transcripts the judge ordered government
lawyers to turn over. •

The defense team got those documents last week after Judge Sullivan ruled prosecutors had
dragg~d their feet on turning over evidence that might be helpful to Stevens' case. That evidence
included statements by Allen that he thought Stevens would have pai~ bills for repairs had he ever
been given an invoice.

This is a criminal case with a (Senate) career on the line, and the court has responsibilities, the
defensehas'responsibilities, the government has responsibilities," said one of Stevens··lawyers,
Robert Cary. "Time and time and time again the government has not lived up to them."

The documents the defense team received last week typically aren't turned over in their entirety to
defendants, but skeptical that the government had turned over everything, Judge Sullivan had
prosecutors send them to Stevens' lawyers. The evidence showed that Anderson testified to a
grand jury that he was in Portland, Ore., at the end of 2000, even though he submitted timesheets
to Veco for work in Alaska on th~ Stevens place at the.same time.

That chips away at the government claim that Veco spent $188,000 on Stevens' home, Stevens'
lawyers argued. The $188,000 figure was one of the first numbers jurors sC!w, when a Veco
bookkeeper testified in excruciating detail in the opening days of the trial about the total expenses
the company's records showed had been spent on Stevens' home.

Prosecutors argued that they didn't think the Anderson time was an issue because there was a
whole list of tradesman -- many of w'1om have testified during the trial al,>out the work they did at
Stevens' home.-- whose time wasn't reflected in the spreadsheet created by the Veco tiookkeeper.

"There was a significant amount of time that Veco put in that never got ~ut on that spreadsh~~l,,;- Stevens-2160
said Nicholas Marsh of the Justice Department's Public Integrity unit. "There's a ton of Mr.
Anderson's time that never got put on that spreadsheet."

But Judge Sullivan was especially incredulous that Marsh sat in on Anderson's grand jury testimony
two years ago and heard Anderson say he wasn't in Alaska, and yet still presented the worker's
time sheets as aq:urate to jurors.

"We didn't look at the case that way," Marsh said, as he explained his theory that there were
countless hours of work not reflected on the Veco spreadsheet, and that prosecutors never
vouched that the summary was anything more than a Veco business record. "I'm being very
truthful."

"You closed your eyes then~" Judge Sullivan said;'''You had to nave Closed your eyes to that
--,------=-_..
~.~. '-'- .. - . _ - _ . -
~-~.~- -
testimo,Qy. Someone on _that team kOnderson wasn't in Alaska, he ~as in pO~. Someone-
Q!"lthat team had an obligation to say something smells here.' " -
--
• .r ~

VEHICLE SWAP OFF LIMITS

The judge's ruling Wed-nesday represented the third major misstep by prosecutors, although it's
only the first that will be evident to jurors. Prosecutors were chided previously by the judge for
sending Williams home to Alaska without telling anyone. Williams, who was so ill that prosecutors
were concerned for his life, wasn't used as a pros~cution witness although other witnesses have
mentioned his nam~ so frequently -- and positively -- that jurors may think they know him.

Although the judge's ruling leaves the government's case against Stevens intact, jurors will be told
to disregard evidence because prosecu'tors failed in their obligation to disclose crucial information
to the defense team.

In addition to the warning about the accounting records, they'll be given a second instruction to
disregard all evidence regarding al"l automobile trade Stevens made with Allen. Judge Sullivan
decided to strike that evidence after Stevens' lawyers complained on Tuesday that they were never
shown a check that shows Allen paid $44,000 for a Land Rover. The SUV was traded to Stevens,
who gave it to his daughter, for the senator's rare 1,964 112 Mustang and $5,000.

Stevens' te~m spent substantial time this week trying to prove that Allen didn't actually pay
$44,009 for the SUV, introducing the window sticker with a price of about $42,125 and a dealer
invoice for much less. But they failed to land a "gotcha" moment because prosecutors came
forward with a cancelled check that showed that with dealer preparation and other charges, Allen
actually paid $44,339.51. Angered, they filed their fourth motion for a mistrial.

Stevens' lawyers should have been shown the check as soon as the government knew about it,
JUdge Sullivan agreed. He said he was surprised prosecutors never entered it as evide,nce, ~ince it
could have boosted the credibility of Allen's testimony. Allen has already pleaded guilty to bribing
state lawmakers in Alaska and is cooperating with the government in exchange for leniency in his
own sentencing.

The chief Justice Department prosecutor in the case, Brend~ Morris, told the judge that the swift-
moving nature of this trial was bound to lead to some snags in turning over information to the
defense. Stevens, who has held office since 1968, is up for a difficult r~-election bid and asked for
a speedy trial so he could have a verdict before voters f'!"lake their decision about his future on
Nov. 4.

But Judge Sullivan said speed was no excuse.

"It's not about the pace of litigation, it's about, the fairness of the proceedings," he s~id .. "We don't
sacrifice fairness for expedience."

Contact the reporters:. rmauer@adn.com and ebolstad@adn.com. FBI - Stevens-2161


ADVi;RTISEMENT
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Sell it tod;
Inouye tells jury he has
'absolute faith' in Stevens
By E;RIKA BOLSTAD and RICHARD M{\UER
Anchorage Daily News
Published: October 9th, 2008 02:50 PM Advanced se
Last ,Modified: October 9th, 2008 02:50 PM

WASHINGTON - One of Sen. Ted Stevens' oldest friends and


peers, a fellow World War II veteran and senator, led the
charge today to defend the Alaska Republican's character and
integrity.
more
Sen. Daniel Inou Hal(laii, the Jose Luis Magana-I Associated Press
Story tools
firs e ense w' ess in Stevens' Sen. Ted Stevens, R-Alaska, and his daughter
Comments (0) Beth Stevens, arrive at federal court in
corruption tria, told jurors that
E-mail a friend Washington. Thursday Oct. 9, 2008.
fellow senators have "absolute
Print
faith" in the 84-year-old. The two
Digg this
Seed Newsvine
.have been friends since Stevens , 'Document exhibits
Send link via AIM ,entered the Senate in 1968, ~nouy~ Letters. legal gocumenls. etc. submitted as
fi"MYYhHOoq testified, and are so close that evidence.
Stevens' youngest daughter, Lily,
Font size: A I A I A calls him 'Uncle Dan.' "
I
Exhibits from 10/20
"I can assure that his word is good. As far as I'm concerned,
it's good enough to take to the bank," he said of Stevens, Related Stories
whose friendship is such that the two call each other "brother." JUdge tosses out evidence in Stevens trial
Partial transcripts of evidence on tape
With Inouye,'Stevens' legal team began its defense, calling
witnesses who are famous, such as former Secretary of State Defense renews its bid to djswJss Stevens 2162
trial t'tH - ::>tevens-
Colin Powell, and many who are,famous in Alaska, such as
Stevens evidence (;10 tape played for jUry
David Monson, widower of Iditarod champion Susan Butcher.
E-mails kept Stevens informed of progress
Powell, referred to by the judge as "G~ne.ral Powell," will Related Links
testify Friday afternoon. He is among about 10 character
witnesses who Stevens' lawyers hope to introduce, but the Alaska Politics blog: A look at the
Stevens defense witnesses
judge is likely to limit them to three or so.
Listen to wiretaps played for jury Tuesday
Stevens is charged with seven counts of filing false statements Listen to Allen-Stevens phone calls, with
on the financial disclosure forms he's required to-submit each transcripts
y~ar as a U.S. senator. He's accused of accepting more than Fees paid to Ben _Stevens Questioned by
$250,000 in gifts and home repairs, mostly from Veco and· Its Veco execs
former chi~.f executive, Bi!lA!I~n, once a friend of Stevens and PDF: Tel~phone eVidence graphic,
.Photos: Historical photos of Sen. Ted
fer '(,.q--kAl- (:) b fjo- ~
th.-: star ~itness in the cas~ against 0 Stevens 0
Photos: Sen., Ted Stevens gallery
St~vens' lawyers began to chip away at evidence prosecution
Photos: Exhibits submitted as evidence
witnesses have.presented about gifts the senator is alleged to
have received over the years. This afternoon, they zeroed in The Ted Stevens investigatron
on a sled dog' Stevens' frjends bought him for $1,000 at the Complete Alaska el~ction coverag~
Kenai Classic auction in ~003.
Related Audio Content
Early in the trial, -Sullivan told how Stevens got one of the
More Sen. Ted Stevens stories »
dogs at-an auction and was so smitten with the puppy that he
bought. another one for about $250. But the dogs were t.oo Judge sends Stevens jurors home for day
much of a handful for Stevens in Washington, D.C., and he Stevens gets help from some friends
al'!d his wife decided to send them back to 'Alaska, where Which Stevens will jurors judge?
Monson and Butcher cared for them. Stevens and his wife sent Stevens' defense rests
two $500 checks for the dogs' care.
Testimony ends in Stevens trial

In an e-mail read Wednesday in court, Stevens haggled with his friend Bob Penney over how much
to value the dog on his financial disclosure paperwork, calling it a "GO disclosure form."

The dog sold at the auction was nearly worthless as a sled dog, testified kennel owner and Iditarod
champion Dean Osmar. He gave it to his friend, James Var:sos, the Alaska singer known as Hobo
Jim, to offer up at the auction, an annual charity fund raiser attended by political bigwigs.

"I think most people went home with things they didn't really want," Varsos said of the auction.

Prosecutors rested their case earlier in the day, with one fin~1 witness. U.S. District Judge Emmet
Sullivan decided to allow prosecutors to call David Anderson, a former welder who worked for Ve,co
Corp. and-supervised repairs that nearly doubled the size of Stevens' home if) Girdwood.

Anderson, who is' Allen's nephew, wasn:t scheduled to testify. But prosecutors, asked to allow him
after the judge overseeing the case determined that some of the evidence they presented about
Anderson's time on the project might have been inaccurate.

Stevens' defense team asked for a mistrial late Sunday, after they had the opportunity to review
more than 300 FBI interview reports and 83 grand jury transcriptS-the judge ordered government
lawyers to turn over. The def~nse team got those docum~nts la~.t w~~~ <!f~r N~g~ ~I!.iY~1'l [lJleg
prosecutors Iiad cragged-their feet on turning over evldenc-e that might be helpful to Ste'lens'
case. That evidence included statements by Allen that he thoug'ht Ste~ens -w~uld ha~e paid bills for
repairs had he ever been given an invoice.

The evidence showed that Anderson testified to a grand jury that he was in Portland, Ore., at the
end of 2000, even though he. submitted timesheets.to Veco for work in Alaska on the Stevens
place at the same time;

Incensed, Sullivan on Wednesday punished prosecutors by ordering that- jurors disregard the
testimony from a Veco bookkeeper about Anderson's time.
FBI - Stevens-2163
Jurors also were told to disregard evidence they've seen concerning how much time Veco
employee Robert "Rocky" Williams spent remodeling Stevens' home. They'll also be toid that
prosecutors knew the hours Anderson said he worked could be inaccurate and yet.still presented it
to the jury as part of the $188,000 total thafVeco accoUnting records show the oilfield-services
company spent on the Stevens remodel.

To compensate for the loss of evidence, prosecutors asked Thursday morning whether they could
a
have Anderson testify. Judge Sullivan gav'e reluctant OK over the objections of Stevens' legal
,team.

"They were sanctioned for their conduct," said one of Stevens' lawyers, Robe'rt Cary. "Reverse,
rewind and prete~d like it nev.er happened. We all understood that this ~ase was dOSi~g. This is an
·afterthought; it's an-attempt to pretend that-a' serious constitutional-error.never happ"ehed:"
BiJt"P;o~:cutors argued that AndersOtestimOny will "provide the jury, the paC and the court
Wi}ll' an alternative to sole reliance on any Veco" records. They also argued it was even more fair to
Stev~ns, because his attorneys would have an opportunity to cross-examine Anderson and show
jurors how he may have misled his bosses about the time he spent on the Girdwood renovations.

Anderson began his testimony midmorning Thursday. He testifie(j he was working as much as 10
hours a day, six days a week, "b~tween travel time and stuff," Anderson said. So was Williams, he
said.

Anderson detailed the work 'he and Williams did on the ~ome, including jacking it up to add a
bottom story.
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home for day Alaska Medicare patients-
Gun, fists, belt used in Sen. Stevens trial: Photo
rejected by doctors
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worries Yupik ties give Patins
Drug plea gives The campaign trail '
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Counting students a cruel
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Sell it tod.
Sen. Inouye. testifies for his
friend
STEVENS TRIAL: He says Alaska senator's word
can be "taken to the bank."
Advanced se
By ERI~ BOLSTAD and RICHARD MAUER
Anchorage Daily News
Published: October 10th, 2008 03:00 AM
Last Modified: October 10th, 2008 05:04 AM

WASHINGTON -- The Hawaii Democrat whom Sen. Ted


more
Stevens calls his "brother" opened the charge Thursday in
JOSE; LUIS MAGANA {The Associated Press
defense of the Alaska Republican's character, and integrity.
Sen. Daniel Inouye. D·HawaH, appeared
Thursday as a defense witness fOf Sen. Ted
Sen, Daniel Inouye, the first $levens.
Story tools
defense witness in Stevens'
Comments (0)
corruption trial and one of the few
E-mail a fdend sitting senators to have served Document exhibits
Print ~etlers. legal documenls. elc. submitted as
longer than Stevens, told jurors evidence.
Oigg this
that fe!low.senators have. "absqlute
Seed Newsvine'
Send link via AIM faith" in his 84-year-old RepUblican

~MY~
friend. The two World War II I Exhibits from 10/20
veterans met when Stevens entered
Font size: A I A I A the Senate In 1968 and discovered Related Stories
they had many bonds, Inouye
E-mails kept Stevens informed of progress
testified. They are so close that Stevens' youngest daughter,
Lily, calls him "Uncle Dan:" Stevens evidence on tape played for jury
Defense renews its bid to dismiss Stevens
"I can assure that his word is good, as far as I'm concerned, trial
it's good enough to take to the bank," .lie said of Stevens. Partial transcripts of evidence on tape
judge tosses out evidence in Stevens trial
Under cross examination, Inouye refused to be drawn into a
conversation about what he would think if he learned a person Related Links FBI - Stevens-2165
he had met had told a lie l!nder oath. Complete Alaskaoelection coverage_
Photos: Exhibits submitted as evidence
"I'm not inclined to respond to a hypothetical question,"
Photos: Sen. Ted Stevens gallery
Inouye said. "I don't operate that, way -- the people I meet
Photos: Hist()rical photos of Sen. Ted
have substance."
Stevens
PDF: Telephone'evidence graphic
With Inouye, Stevens' legal team began its defense. Today,
,they plan to call another famous character witness, former Fees paid to Ben Stevens questioned by
Veco execs
Secretary of State Colin Powell. Following Inouye on Thursday
were witnesses with some celebrity among Alaskans"like Listen to Allen-Stevens phone calls" with
transcripts
/9l.tA-rvv- lS6CJ. O-.-Y\., e
musher David Monson, the widower ~itarod champion
Susan Butcher, and the balladeer Ho~im.
Listen to ~iretalayed for jury T!Je~day
,v Alaska Politics blog: A look at the
Stevens defense witnesses
Powcll and Inouye are among at least 10 ch~m3der witnesses
that Stevens' lawyers said they hoped to introduce, but U.S. The Ted Stevens investigation
DistriCt Court Judge Emmet Sullivan said that many would be Related Audio Content
redundant. Most trial courts don't allow more than three,
government lawyers argued,·though judge Sullivan said he More Sen. Ted Stevens stories»
might allow as many as five. •
Judge sends Stevens jurors home for day
In eliciting testimony from a friendly witne~s, defense attorney .Stevens gets help from some friends
Brendan Sullivan was engaged in a much different encounter Which Stevens wiJrjurors judge~
with Inouye than the one Sullivan is famous for. Stevens' defense rests
Testimony ends in Stevens trial
In the 1987 Iran-Contra hearings, Inouye was the' committee
chairman and Sullivan was the attorney for Olliver North, one of the kElY targets of the
congressional investigation. Tired of hearing Sullivan answering for North, Inouye said that maybe
the'witness should speak for himself.

"Well, sir. I'm not a potted plant," Sullivan replied. "I'm here as the lawyer. That's my job.':

SlED DOG'S WORTH

St~vens is. charged with seven counts of filing false statements on financial disclosure forms he's
required to submit each year as a U.S. senator -- each amounting to a lie,on an oath signed with
his own hand, said Nicholas Marsh, a trial attorney with the Justice Department's Public Integrity
.Section.

• Stevens is accused of accepting more than $250,000.in gifts and hom~ repairs, mQstly (rom .the
defunct oil-field service company Veco and its former chief executive, Bill Allen, once a friend of
Stevens and the star witness in the case against him.

Stevens' lawyers began to chip away at evidence prosecution witnesses have presented ~bout gifts
the senator is alleged to have received over the years. Thursday afternoon, they zeroed in on a
~Ied dog bo.ught for $1,000 at a 2003 auction.

In his opening statements to the jury, E!rel)Jtan ~ullivan told how Stevens got orie of the dog's at'an
auction arid was so smitten with the puppy that he bought another one for ab9ul: $250. But the
dogs were too much of a handful for Stevens in W~shlngton, D.C:, and he and his wife decided to
send them back to Alaska, where Monson and Butcher cared for them. Stevens and his wife sent
two $500 checks to Butcher for upkeep.

~n' an e-mail read Wednesday in court during the government's case, Stevens haggled with his
friend, B~b Penney, over h.ow much to value the dog on his financial disclosure paperwork, calling
it a "GO disclosure form." The e-mails showed Stevens attempting to change the way he got the
dog -- not as a $1,000 gift from Penney, the Anchorage real estate developer and sportfishing
advocate who bid on the dog, but as a gift from the Kenai River Sportfishing Association, which
Penney·founded. FBI - Stevens-2166
Long after he got the dog, Stevens asked Penney to turn his auction bid into a.donation to the
as-sociati~n so that'the dog wouldn't appear to be ~orth as rriuch.

Hobo Jim -- James Varsos -- testified that well-to-do bidders at the association's annual Kenai
River Classic frequently bid up items out of all proportion because the money goes to charity.
Varsos said he has donated his own $60 co~boy hats to the auction and has seen them go for as
much as $450.

"I think most people went home with things they didn'~ really want," Varsos said of the auction.

Varsos, who helpecrout"anhe'dassic for abounO years; pjcke<;l'up the puppy,thatwas eventually

. - ="':::..c =========-=-o....c,--------,--
-----------

.
auctioned to Stevens from the Clam Oh kennel of musher Dean Osmar, an IdOd champion.
.
OSQ'lpr described the female as the "runt" of a litter who would normally be shunned by mus/lers
because it had blue eyes and white fur -- possible indicators of a genetic respiratory disease. It
might have been worth $50 or $100 as a pet, he testified, though he donated it to the association.

After acquiring the blue-eyed female, Stevens bought another puppy from Osmar for $250. It was
a better dog, he said. .

But Taz and Keely proved too big a handful for the Stevenses in Washington. They asked Monson
and Butcher for help.

"I agreed to take the sled dogs off their hands and take them back to Alaska," Monson testified.

VECO WELDER TESTIFIES

T~e final prosecution witness took the stand Thursday morning, just before the government rested
its case against the Alaska Republican. David Anderson, a former welder who worked for Veco
Corp. and supervised repairs that nearly doubled the size of Stevens' home in Girdwood, "'!as not
originally announced as a witness in the government case, but the judge allowed his tes~imony.

Anderson, who is Allen's nephew, was called after prosecutors had some of their evidence ruled
inadmissible by Judge Sullivan.

Through a Veco account manager, the government presented evidence that Veco spent $188,000
on the Stevens remodel between 2000 and 2001.

But d~fense attorneys discovered in reviewing government evidence belatedly sent them that
within that account manager's total were-hours for Anderson an9 another Veco supervisor, Rocky
Williams, that were worked elsewhere.

Judge Sullivan said the government knew some ~f those wages were inappropriately charged
internally to the,house project. As a sanction against the government, he told the jury to ignore
the entire
. ,to Williams and Anderson in the account m~nager's testimony.
costs attributed .
On the witness stand Thursday morn}ng, Anderson testified that he worked as much as 10 hours a
day, six days a week on the house project, So Qid Williams, he said.

Anderson detailed the work he and Williams did on the hom~, including jacking it up to add a
bottom story.

ContacUhe reporters: ebolstad@adn.com a_nd rmauer@adn;com.


ADVE_RTISEMENT

FBI - Stevens-2167

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Sell it tode
Powell testifie.s to Stevens'
high reputation
CHARACTER WITNESSES: All say senator is a
force for good.
Advanced se
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily.News
Published: October 11th, 2008 04:16 AM
last Modified: October 11th, 2008 05:24 PM

WASHINGTON -- Colin Powell, the retired rm eneral and


former secretary of state, took the witne s stand Friday on more
SUSAN WALSH I The Associated Press
behalf of U.S.·Sen. Ted Stevens, raised nis right hand and
Former Secretary of Stale Colio Powell leaves
swore to tel,! the truth. federal court in Washiogton, Friday, Oct. 10.
2008, afler testifying althe corruption trial of Sen.
"Gen. Powell, good afternoon," U.S. Ted Stevens, R·Alaska.
Story tools
District Judge Emmet Sullivan said
Comments (O)
to the biggest celebrity to testify as
E·mail a friend Document exhibits
a character witness for Stevens, on Lellers, legal documents, elc. submilled as
Print
trial on felony discJ()sure v!~lations. evidence.
Olgg this
"Sorry to keep you waiting
Seed Newsvine
yesterday."
Send link via AIM
!2J~V . .Il00q I Exhibits from 10/20
"It's all right, Your Honor," Powell
Font size: A IAIA said. • Related Stories
Sen. Inouye testifies for his friend
Speaking in a courtroom suddenly
packed with spectators and to jurors leaning forward in their E-malls kept Stevens informed of progress
seats, Powell recounted his long career, ending with his Stevens evidence on tape played for jury
"dabbl,ing in diplomacy," as he self-deprecatingly described his Partial transcripts of evidence on tape
four years as secretary of state. JUdge tosses out eVidence in Stevens trial

He then turned to Stevens, whom he has known for 2S years. Related Links FBI - Stevens-2168
Powell described Stevens as a "trusted individual" and a man Photos: Historical photos of Sen. Ted
with a "sterling" reputation. Stevens - - . -
PDF: Telephone evidence graphic
"He was someone whose word you-could rely on," said Powell. Fees paid to Ben Stevens questioned by
Veco execs
Stevens was honest with him, he said, whether the news was Listen to Allen-Stevens phone calls, with
good or bad. transcripts
Alaska Politics blog: A look at the
"He would tell me when I had no clothes on -- figuratively, I Stevens defense witnesses
mean -- and he would tell me when I was right and should go Photos: Exhibits submitted as
- .. evidence
{9'1A- -.-rtv' -('3G~ D-~
,tor itf'~owel"said: "He's a guy who,Qe said in the ir:lfantry, The Ted SteveOvestigatiOn
*e would take-on a long pa'trol."
.o? Related Audio Content
Steven~ was always a strong advocate' for basing soldiers 'and
military aircraft in Alaska, but when the Cold War ended and More Sen. Ted Stevens stories»
the Defense Department decided to cut military spending by
judge sends Stevens jurors home for day
25 percent, Stevens agreed that Alaska should share in the
pain of base closures, he said. Stevens gets help from some friends
Which Steven,s will jurors judge?
"He fights for his state ,but he also has the best interest of the Stevens' defense rests
country at he~rt/, PoweIL~aid. , Testimony ends in Stevens trial

Stevens, on trial for lying about gifts on financial disclosure forms, has the right during the defense
portion of the trial to ask character witnesses to speak on behalf of his "truthfulness and ver~city."
The first such character Witness, Sen. Daniel Inouye, D-Hawaii, spoke Thursday. Three others are
set to testify on Stevens' behalf, but the defense's wish to call Sen. Ted Kennedy was derailed by
Kennedy's setba~k in his fight against ~ brain tumor.

,Under cross examinatio,n, Powell said he had never been to Girdwood and has no independent
knowledge of the charges Stevens faces.

Stevens, 84, faces charges of failing to disclose more than $250,000 in gifts between 1999 and
2006. Most of that total is related to a major renovation project that'doubled the size of Stevens'
home in Girdwood, with much of the work allegedly done for free by an oil-field servic~ company
run' by Stevens' friend Bill Allen.

Julie Kitka, the presid~nt of the Alaska Federation of Natives, testified as someone who was
familiar with Stevens' work in Alaska on behalf of Natives.

" The AFN represents some of Alaska's biggest and most powerful corporations, like Cook Inlet
Region Inc. and Arctic ~Iope Regional Corp., w~ich have b,enefitted from special legislation by
Stevens. But when Kitka turned to the jury to describe the AFN" she said it was "something like the
NAACP," the civil rights organization.

The jury also heard fr~m several oth~r Alaskans who nave had P9sitive encounters with Stevens,
over the 'years, including a pediatric physician at the Alaska Native Medical Center in Anchorage,
Dani·Bowman. Stevens was in-sti'umental'iri arranging,im AirFor~e evacuation for aSicl< baby who
needed emergency treatment not available in Alaska, Bowman said.

"He didn't Ifsten to the rest of the question, he said, 'Yes I'll help you,' " she said, choking up with
emotion. "It was beautiful."

Two former heads of the Alaska AFL-CIO, Mano Frey and Jim Sampson, testified that Stevens also
was instrum~ntal in requiring that union labor be used in big proposed projects like the gas
pipeline or drilling in th~ Arctic National Wildlife Refuge. The oil industry and especially nonunion
Veco opposed such project labor agreements, Sampson testified.
FBl- Stevens-2169
That defense evidence was used to counter prosecution assertions that Stevens took up Veco's
agenda in Washington because of gifts he received.

-The d~fense team also called a private-real estateappraiser'and,two-assessors'from the


Municipality of Anchorage to testify on the value of the Veco addition to Stevens' home.

The city's valuation jumped $104,800 from·2001 to 2002 when the city took into account the
addi~ion, said municipal assessor Marty McGee.

That's less than athird of the cost of the actual work, according to earlier testilJlony. Stevens
himself paid about $160,000, and Veco spent about $180,00'0. .

1'4_cGe.e said ris figureswere,based on,an_i1ispection of.only fhe outside,of the,house,:and,he


ackn~edged under cross-examinatf"\hat city records apparently missed one r'\-oom that was
~dded. The cit.y's value is b~sed on w~ the property could be expected to seli f~not what it cost
to reno~~te,he said.

"A lot of times it costs a whole lot more to do the renovation work?" asked prosecutor Nicholas
.
Marsh.

, "That's possible," McGee said.

e The judge earlier rejected a defense theory Stevens would have received a benefit from Veco's
work only if it raised the appraised value of the Girdwood home. His lawyers have argued that the
value is zero under that theory.
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Drug plea gives The campaign trail
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Sell it tod.
Colin Powell: Stevens
reputation 'sterling'
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
Published: October 10th, 2008 11:28 AM Advanced se
Last Modified: October 10th" 2008 11.:28 AM

WASHINGTON - One of the nation's best-known retired Army


generals, Colin Powell, described Sen. Ted Stevens in court
today as a "trusted .individual" and a man with a "sterling"
reputation. ,more
SUSAN WALSH I The Associated Press
Former Secretary of State Colin Powell leaves
"He was someone whose word you
Story tools federal court in Washington, Friday, Oct. 10,
could rely on," said Powell, 2008, after testifying at the corruption trial of Sen,
Comments (0)
secretary of stat~ in Presiden~ Ted Stevens, R-Alaska.
E-mail a friend Bush's first term, who self-
Print
deprecatingly described.himself as
Digg this Document exhibits
someone who retired as the
:Seed Newsvine letters, legal Qpcumeots, etc. submitted as
Send link via AIM chairman of the Joint Chiefs of Staff evidence.
wrilYYM{O¢!J and then "dabbled a bit in
diplomacy."
Font size: A IA J A I Exhibits from 10/20 if
Stevens, on trial for lying about
gifts on financial disclosure forms, has the right to ask Related Stories
character witnesses to speak on behalf of his "truthfulness and
Judge tosses out evidence in Stevens trial
veracity." The first such character witness, Sen. Daniel Inouye,
D-Hawaii, spoke Thursday. Another three are set to testify on Partial transcripts of evidence on tape
Stevens' behalf, but the highest-profile witness, by far, will be Defense renews its bid to dismiss Stevens
Powell. trial FBI - Stevens-2171
Stevens evidence on tape played for jury
The former secretary of state said he had known Stevens for . E-mails kept Stevens informed of progress
2S years, mostly in the senator's role as the top defense Sen. Inouye. testifies for his friend
appropriator on a Senate defense appropriations committee. In
Stevens, "I had a guy who would tell me when I was off base, Related Links
he would tell me when I had no clothes on, figuratively, that Photos: Exhibits submitted as evidence
is, arid would tell me when I was right and go for it," Powell Alaska Politics blog: A look at the
said. "He's a guy who, as we said in the infantry, we would Stevens defense wit,nesses
take on a long patrol." Listen to wiretaps played for jury Tuesday
Listen, to Allen-Stev~ns phone calls, with
When asked outside of the courtroom after. his testimony transcripts
whether Stevens asked him personally to testify to his
Fees paid to Ben Stevens questioned by
charact~r, PoV!~lIsai9 h~ ~olJldn't rec?1I if it was the,senator,o~ Veco execs .
... ,....
-;;-one~~of hi~'lawyers. But he didn't thiOice about testifying,
, PDF: TelePhGvidence graphic
Po~1I saiCf.
Photos: Historical photos 0'( Sen. Ted
Stevens
"Not at all," he ?aid, snapping his fingers to signify it was a
snap decision. Photos: Sen. Ted Stevens gallery
The Ted stevens investigation
Powell's endorsement followed a morning of testimony from
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~ people who worked on Stevens' home and were paid by
Stevens and his family, or were aware of gifts he had received. More Sen. Ted Stevens stories »

The former chairman of a nonprofit in Alaska testified that he Judge sends Stevens juror!? home for day
was directed by a close friend of ~tevens to "create a paper . Stevens gets help from some friends
trail" that would ,show a husky puppy given to the senator was Which Stevens will jurors Judge?
worth one-fourth what the friend paid for it. Stevens' defense rests
Testimony ends in Stevens trial
Stevens, 84, faces charges of failing to disclose more than
$250,000 in gifts between 1999 and 2006. Most of that total involved a major renovation project
that doubled the size of Stevens' home in Girdwood, with much of the work allegedly done for free
by 'an oil-field service,company run by Stevens' friend Bill Allen.

The testimony Friday morning, on the 10th day of trial, was only about a dog, but it's also part of
the case against Stevens.

Ronald Rainey, a retired utility worker from Soldotna, was called by Stevens' defense to discredit a
prosecution contention that the blue-eyed husky was a $1,000 dog -- a value far in excess of the
$285 gift limit in effect for the Senate that year.

Rainey testified that the Kenai River Sportfishing Association gave the dog to Stevens, not the man
who bid $l~OOOfor it at the group's annual charity auction. The bidder was Bob Penney, an
Anchorage real estate developer, the founder of the association and Stevens' good-friend.

But if Penney bought 'the dog with his $1,000 bid, why did Stevens report it in his 2003 Senate
d.isclosure as a gift from the association ~ith a value of $250?

According to Rainey, Penney bid up the value of the dog. When the auction hammer came down,
he was the last-bidder.

"It was a joke," Rainey said. "We knew he got stuck with something he didn't want."

Rainey described Penney as the founder 9f the association. He still had huge sway over the group,
Rainey said. Penney proposed donating the dog back to the association; the association would then
-give it to someone who wanted it, Rainey said. That would be Stevens and his wife; Catherine, he
testified.

But .the document prepared by the association the night of the auction, shown to the jury earlier as
a prosecution exhibit, showed Penney won the bid and took the dog. The statement listed th _ St -2172
dog's fair market value as $500 and the paid-in-full bid as $1,000. FB1 . evens

On Wednesday, the government introduced an e-mail written by Stevens to Penney on May 2,


2004, 10 months after the auction, in, which he complained he was fjlling out his "GD disclosure
form" and had a problem with the dog. Penney couldn't give him the dog because it was worth
more than $285, Stevens said. He said the gift instead should be a present from the association.

"In May of 2004, Bob Penney asked you to create a paper trail concerning the sled dog?" asked
prosecutor Nicholas Marsh.

"That's correct," Rainey said.

An. e-mail introduced Friday from Rainey to Penney on May 6, 2004, said the association
considered the dog was a "thank-you" to Stevens for all his work on its behalf:
1-I ---
,.> . #0 \', ... r\ r'\
nyc:?did this because Bob Penney aW you to create a paper trail?" Marsh saiP

"Yes," said Rainey. But he said the documentation reflected the association's intent at the time of
the auction.

Earlier, the defense provided the names of 10 character witnesses it hoped would. testify for
~ Stevens. But the judge said he would only allow five, a mo~e usual number.

Another proposed witness, Sen. Ted Kennedy, D-Mass., is probably too ill to testify, the defense
sqid. The defense said it would like to call S~n. Orrin Hatch, R-Utah, former Transportation
Secretary William Coleman, former District of Columbia council member John Ray, Olympic
medalist and sportscaster Donna DeVerona and a fellow veteran from Stevens' World War II Army
Air Corps unit"Leroy Parramore.
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Document exhibits Sell it tod.


Prosecutors subpoena e- Leiters. legal documents. etc; SUbmitted as
evidence.
mails of Stevens' wife
SUBPOENA: Evidence sought, including
documents related to diamond earrings.
I Exhibits from 10/20 iJ
~dvanced se
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News Related Links
Published: October 12th, 2008 11:48 PM PDF: oe,fense motion to quash· subpoena
Last Modified: October 12th" 2008 02: 14 PM
Photos: ,Historical photos of Sen., Ted
WASHINGTON -- Even as Sen. Ted Stevens' trial approaches a Stevens
likely end this week, federal prosecutors are still attempting to Photos: Sen., Ted Stevens gallery
gather more evidence, including correspondence·between the Complete Ala~ka election coverage
Alaska senator and his wife, Catherine, as well as e-mails she Alaska Politics blog'
may have sent to 34 others about their home renovation and The Ted ~tevens Investigation,
gifts the senator may have received.
Photos: Exhibits submitted as evidence

The federal subpoena to Catherine More Sen. Ted Stevens stories»


Story tools
Stevens' law firm, dated Sept. 15,
Comments.(O) Judge sends Stevens jurors home for day
be~ame public over the weekend
E-mail a friend when Stevens' legal team asked the St~v~ns gets help froll) some frieflds
Print
judge in the case to prevent the Which .Stevens will jurors judge?
Digg this
government from obtaining Stevens' defense rests
.Seed Newsvine
Send link via AIM, thousands of documents from the Testimony ends in Stevens trial
law firm" Mayer Brown.
mfMY~!J
Font size: A I A I A Prosecutors are also looking for communications between her and
anyone with a U.S. Senate e-mail address, as well as documents
relating to anything of value given or provided to Stevens, his wife or his daughter, Lily. That
includes "any documents relating to diamond earrings," according to the motion: FBI - Stevens-2174

But Stevens' defense team doesn't want them turned over, accusing prosecutors of going on a
fishing expedition and saying in their motion that a "more oppressive, non-specific subpoena could
hardly be ima9ined."

The 84-year-old senator is on trial for lying on the Senate financial disclosure forms he's required
to file each year. He's charged with accepting gifts and home renovations worth more than
$250,000, chiefly from Veco Corp. and its former chief executive, Bill Allen, who was the star
witness for the prosecution.

The renovations in 2000 and 2001 doubled the size of the Stevens' home in Girdwood,
-transforming it from a small, A-frame cabin into a two-story retreat with multiple decks, a Jacuzzi
tub and a Viking outdoor grill. Prosecutors have been laying out a case that much of the work,
It:tvr;+.....A~-
inclu.~ing t~e decks as well as P1umOnd a complete el~ctrical overhaul, waQ for by Veco.

~JlIAL IN DEFENSE-PHASE
Stevens' trial, about to begin its fourth week, is in the midst of the defense phase. Prosecutors
rested their case last week and his defense team began building a case that the senator was
unaware that the renovations in question may have exceeded what he spent on it, an estimated
$160,000. Several character witnesses, including former secretary of state Colin Powell, have also
testified on Stevens' behalf. •

Stevens' attorneys asked to quash the subpoena over the weekend after one of the prosecutors,
Edward Sullivan, sent an e-mail asking for the documents the government had requested.

According to the filing, last year, prosecutors asked for and received more than 26,000 pages of
documeflts from Catherine Stevens' law firm. 'But the law firm didn't turn over communications
between Catherine Stevens and her hl!sband because spouses are generally protected by law from
having to provide evidence against eac~ other in criminal case, according to the filing.

Prosecutors asked for the documents again on Sept. 1S, just a week before jury selection began in
the case.

The law firm did a search and handed over three discs containing thousands of e-mails to Stevens'
defense team in early October, according to the filing. They reviewed them in search of privileged
conversations between husband and wife and found none, but also found "no relevant ones," wrote
one of Stevens' lawyers, Joseph Terry. The first 100 e-mails are about nothing more than "the
recent death of Mrs. Stevens\ mother; Lily Stevens' wedding; and grave illnesses of personal
friends."

Prosecutors on Friday night asked again for the e-mails, prompting Stevens lawyers to file a
motion as.king the judge to keep th~m from getting them.

NEW NAMES EMERGE

The government's subpoena also lists some names that haven't come up before in the case,
including Anchorage jeweler George Walton and his Alaska Gold and Dia"mond Co. and New York
socialite Marylou Whitney and her husband, John Hendrickson, formerly from Alaska. Whitney and
tiendrickson .have been involved in. the horse business with Stevens.

Also listed was Anchorage real estate developer Jon Rubini and' one of his companies, Centerpoint
LLC, in which Stevens was once an investor.

Stevens' lawyers also filed a motion Sunday night asking the judge to strike references to "the
public's right to know" when it comes to disclosure of financial information.

"Any such pUblic interest is irrelevant to the charges in this case, which are and must be based on
allegeq false statements to the government, not the public at large," Stevens' lawyers wrote. "Tl1e
government obviously. wishes to inflame the jury Y"ith assertions that the defendant has injured the
public at large -- including the jurors themselves -- by supposedly depriving the populace of
important information. This inflammatory suggestion should not be permitted."

Earlier, the defense successfully blocked the government from using the testim,ony otanadvocate
of public disclosure, Kent Cooper, about how disclosures are used by the media, public advocacy
groups and the public at large.

The trial, on break today for the federal Columbus Day holiday, is scheduled to resume Tuesday
morning. FBI - Stevens-2175

Contact the reporters:- ebolstad@adn.com and rmaL!er@ac!n.co~.


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Sell it tode
Allen used Stevens' home,
witness testifies
,COVICH: Senator's daughter says she found
Veco chief at chalet when father was away.
Advancec;l se
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
Published: October 15th, 2008 01:05 AM
Last Modified: October 15th" 2008 01:18 AM

WASHINGTON -- Susan Covi found.her father's house in


Girdwood to be a'convenien
, place to- stop
-
and.spend
..--
the night
"" ~

'during frequent trips between her home in',Kenai and enlarge


Anchorage, where between 2004 and 2004 she was furthering JOSE'LUIS MAGANAlTl)e Associated Press
her own education and later attending to an ill ~riend's affairs, Sen. Ted Stevens leaves the courthouse with his
daughters Beth Slevens, left, and Susan Stevens
Covich at federal court in. Washington. Covich
But there were times, she testified testified in court Oct, 14,2008.
in her father's trial Tuesday, that
she arrived in Girdwood late at
;nightto.find strange cars in front of, Document exhibits
the chalet and people behind ,closed Letters. legal docoments, etc. submitted as
evidence.
bedroom doors inside. One 9f those FBI - Stevens-2176
., people y,rould be Veco chairman Bill
Allen, the oil-field contractor who I Exhibits from·lO/20
helped renovate the place for her
father and. step~other, Sen. T~a
Related Links
~ Stevens and Catherine Stevens.
- <r.-. - i .. ;: :-::-:= -:- 'Photos: Historical photos of Sen. Ted
Covich, a substitute teacher in the Stevens
Click to enlarge
Susan stevens Covich testified Kenai public schools, testifie~ there Photos: Sen. Ted Stevens gallery
Oct. 14, 2008. were times that Allen appeared to Complete Alaska election coverage
have more control of the house Alaska Politics blog
Story tools than she did. The Ted Stevens investigation
Co'mments (0)"'· . Ph·otos: Exhibits submitted as evidence
E-mail a friend "I slept on the couch," Covich said
Print of one such occasion when'none of More Sen. Ted Stevens stories»
Digg this the five bedrooms was available.
Seed Newsvine Allen appeared in the morning and Judge sends Stevens jurors home for day
Send link via AIM told her she could move to one of Stevens gets help from some friends
i~HYVA'.J~q the upstaJrs bedrooms, she said. Which Stevens will jurors judge?
,Stevens' defense rest~
Font size: AI A I A Anothe'r time; she said, "I was T~stimony en~s in Stevens trial
,I'I,~!lning.tg mak~ !TIY. st()pov~r: in.to
(9·v(A-2..ivv- (s'~()~~
my Dad's house," she said. "There ~1i9hts on, c~rs in the parking lot. It jUSO too creepy, so
I just dro;!e on."
1:-
DEFENSE TACTIC

Stevens is on trial on seven felony counts of failing to 'disclose about $250,000 ill gifts and services
on his annual financial statements. Most were from Allen and Veco and involved their effort to
renovate and furnish Stevens' home.

With Covich's testimony, the first by a member of the Stevens family, the defense appeared to be
-making the point that Allen had himself in mind for some of the improvements he made to the
home, and that Stevens didn't want all that Allen·did. In one note from Stevens to Allen entered as
evidence early' in the trial, Stevens said he considered a $6,000 outdoor barbecue grill to belong to
Allen, though Veco permanently plumbed it to a gas line on Stevens' upper deck and installed it
there with a crane.

What could not be known Tuesday was how the jury would react to the assertion that Covich
couldn't use her family's home on multiple occasions because Allen was there using his own key,
apparently with the authorization of her father. There was no testimony about why Allen was
there. .

Covich also testified about another point that came up in the trial, this one involving her son. She
confirmed that Veco got a job for her son, John Covich, on the North Slope, after he got out of a
special high school program for troubled teens.

But, sobbing softly, Covich said her son had a "substance abuse problem" and "had some run-ins
with the law because of that." When he begin missing the plane to the Slope, he was fired, Covich
said, though Veco offered to take him back if he went straight.

That apparently happened in 2003, when Veco began paying his tuition and expenses to learn
heavy diesel mechanics at the state vocational training center in Seward, she said.

"He survived the first semester, but right after Christmas he got back into abusing dr~gs again and
was kicked out of the program in January 2004," Covich said. "He is residing in a correctional
facility now."

State records show John P. Covich was locked, up at the Wildwood Correctional Ce_nt~r in !<enai on
April 29 for a probation violation with no set'release date.

TRIAL WRAPPING UP

The defense has announced that Ted Stevens and Catherine Stevens will probably follow Covich to
the witness stand later this week, though that could change. U.S. District Court Judge Emmet
Sullivan said Tuesday that he expected the ~ase to wrap up Monday with closing arguments a'nd
jury instructions.

It might have been possible for the case to go to the jury Friday, he said, but he doesn't IikeF&I - Stevens-2177
start deliberations just before a weekend since the jury may feel pressured to reach a quick
verdict.

That schedule would mean thatthe jury could return a verdict less than two weeks before the
veteran Republican stands for re-election. He faces Anchorage Mayor Mark.Begich, a Democrat.

In other testimony Tuesday, lawyers for the senator continued to attempt to sow doubt in the
minds of the jury as part of their effort to prove the central theme of their defense: that the Alaska
Republican thought he was paying every bill he was given for his home renovations.

They bolstered their case with testimony from Augie Paone, owner of Christensen Builders of
Anchorage. The contractor did the bulk of the carpentry that doubled the size of Stevens' once
modest,A-frame.
---~----- -----
---- ------------------.

Prosecu.tr..rs are trying to show thatQ paid for much of the work, including tOecks, plumbing
al?p a complete electrical overhaul. To that end, jurors heard exhaustive testimony from Veco
employees and tradesmen -- especially the electricians -- who worked on Stevens~ home yet never
submitted bills for their work.

But Paone, a defense witness, said Tuesday that even though he was primarily the carpentry
contractor, he also purchased electrical and plumbing supplies -- and presented them as line items
in his bills, with the complete invoices from suppliers as backup.

His testimony suggest~d Stevens and his wife could have thought they were paying for evelY..thing
tl1emselves, even though Veco paid for the plumber and electricians and at least some of the
material, according to earlier testimony. .

Paone said he was very careful to do everything by the book, knowing Stevens' position. After
meeting with Allen in late summer 2000 to go over the project's parameters, they decided Allen
would review his invoices before they were sent to Stevens.

Paone said Stevens' wife, Catherine, paid him promptly'when he sent the first five bills.

But the sixth bill, for $19,818, is another matter. It's clear Stevens never paid it, but Pa.one's
testimony about why was delayed by a legal dispute that led to the jury going home early
Tuesday.

In their opening statements, Stevens' lawyers told jurors that Paone was told by Allen and the
construction foreman Robert "Rocky" Williams that he was going to "eat that bill."

But prosecutors argued that Paone's testimony Tuesday seemed likely to contradict his own
testim~ny to a grand jury, wh~re he s.ai~ that Allen never ~xplicitly said he would-"eat" the bill,-but
-implied it. Allen also testified he never specially told Paone he was stuck with the bill.

The judge will make a decision this morning on how to proceed.

OTHER TESTIMONY

In other defense testimony Tuesday, Jeanne Penney, a close friend of Stevens' wife, Catherine
Stevens, testified about a $3,009 stained glass win-doW that she bought as a housewarming
present once the Stevenses finished construction on their home. Prosecutors have presented
evidence that Stevens never disclosed the window as a gift.

Tuesday, Penney stumbled when ,sh,e described for whom the gift was intended.

"I gave her a gift. I gave tnem a gift," she said, adding, "The interest of that gift was primarily to
my friend, Catherine Bittner Stevens."

She.described her friendship with Catherine as predating Catherine's marriage to Stevens and as
one of two women who can sit around for hours in their pajamas, drinking coffee and talkinjBI - Stevens-2178

Two other character witnesses also testified Tuesday. Sen. Orrin Hatch, R-Utah, a Senate colleague
since 1976( described his friend as a "fine, decent, honorable man."

"I'd rate him at the very top," Hatch said. "He's one of the true lions of the Senate, along with my
friend Ted Kennedy. He's totally honest, totally straightforward, fights for his state like you can't
believe/

Also on Tuesday, Double Musky owner Bob Persons took the stand briefly outside the presence of
the jury while Judge Sullivan called Persons' lawyer, Eric Sanders, in Anchorage. Persons, listed as
one of Stevens' final witnesses, had asserted his Fifth Amendment right to not testify when he was
subpoenaed to the grand jury in Washington before Stevens' Indictment, lawyers for both si~es
said iO court.

-----------------'-,_.~-,~-~-~-~~-~-~~-~-~- ~--- ~ --
But n~~,;.hewas willing to testify onQalf of his friend, Stevens, and the jUdgQ~ted~o be sure
thjlt'Sanders had advised his client of the risk's of self-incrimination. Sanders assured the judge
that Persons knew what he was doing. -

Per~ons has emerged as a key figure in the house expansion. His name is on the construction
documents filed with the Anchorage city building department, and witnesses said he was a
frequent visitor to the project. The government has introduced dozel)s of e-mails showing how he
kept Stevens abreast of the work.

RULING ON E-MAILS

Sullivan ruled Tuesday morning that thousands of e-mails from Catherine Stevens' work account
will be turned over to federal prosecutors, who first asked for them more than a year ago. The
defense had fought to prevent the documents from being turned over·on relevancy grounds and
also under the spousal privilege doctrine, whi~h generally prevents one spouse from testifying
against the other in a criminal case.

Prosecutors argued that comm!Jnications between the couple "will be relevant to show the material
elements of the charges in the indictment, including defendant's knowledge, intent and motivation'
for.concealing the benefits he received from Veco."

They a~de9 that "in particular, we anticipate that certain documents at the time of the renovations
will reflect that both Catherine Stevens and defendant knew they had not paid for the Veco work,
and documents thereafter will reflect that Catherine Stevens and defendant took'steps in 2004 to
mislead the press when the media was investigating the costs associated with the renovations."

Sullivan said he saw no reason for prosecutors not to have the documents, and-he ordered
Stevens' lawyers to turn.them:over. But after. reviewing the.e-mails.duringtheday•. pr:osecutors.
said Stevens' law,firm had failed to turn over any.from the most relevant time frame -- from 2001,
when she started work there, to 2004~

- i

ContaCt the reporters: rmauer@adn.com and ebolstad@adn.com


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Sell it tod.
More Sen. Ted Stevens stories»
Stevens defense nears
judge ~ends Stevens jurors home for day
conclusion ,Stevens gets help from some friends
By RICHARD MAUER AND ERIKA BOLSTAD Which Stevens will jurors judge?
Anchorage Daily' News
Published: October 14th, 200805:03 PM Stevens' defense rests Advanced se
Last Modified: October 14th, 200805:03 PM Testimony ends in Stevens trial

WASHINGTON -- The jUry could begin deliberations Monday in Sen. Ted Stevens' corruption case,
.leading to the possibility of a verdict less than two weeks before the veteran Republican stands for
re-election in Alaska.

Stevens' laY'/yers should finish their defense late Wednescjay or


Story tools
Thursday, and prosecutors will have the opportunity to present rebuttal
Comments (0)
witnesses. They'II.1ikely have closing arguments Monday, said U.S.
E-mail a friend District Judge Emmet Sullivan; then, he'll give jurors the case.
Print
. Digg this
, Today, lawyers for the senator continued to work to sow doubt in the
,Seed Newsvlne
Send link via AIM
minds of the jUry as part of their effort to prov~ the central theme of
their defense: that the Ala~ka Republican thought he was paying every
r~MY~J
bill he was given for renovations to his home in Girdwood.
Font size: A IAIA
They bolstered their case with testimony from Augie Paone, the
Anchorage carpenter who did the bulk of the renovations that doubled
the size of Stevens' once-modest A-frame.

Stevens, 84, is on trial on charges that he lied on the Senate financial-disclosure forms he's
required to file eacti year. He's accused of failing to report gifts and home renovations worth more
than $250,000, chiefly from Veco Corp. and its former chief executive, Bill Allen, who was the
prosecutio.n's star witness. FBI - Stevens-2180
Prosecutors made the case that Veco paid for much of the work, including the decks, plumbing and
a complete electrical overhaul. To that end, jurors heard exhaustive testimony from Veco
employees and tradesmen -- especially the electricians -- who worked on Stevens' home yet never
submitted bills for their'work. .

But Paone, a defense witness, said today he was very specific about billing the Stevenses for
plumbing and electrical supplies, suggesting Stevens and his wife could have thought they were
paying for everything themselves.

Since Stevens is an elected official, Paone said, he was very careful to do everything by the book.
He met with Allen in late summer 2000 to go over the project's parameters.

"We'were both under the-,impression,that we were going to, based on the senator being an elected Q..
official, I ":'I~~ ,going to pres~nt all m Q to the senator or ~i11 to make sure heO exactly what'
he was gettmg," Paone said.
'-(
~

Paone said Stevens' wife, Catherine, paid him promptly when he sent the first five bills.

But when Paone beg~m to testify about the sixth bill, for $19,818, the jU,dge stopped him, based on
objections from prosecutors. In their opening statements, Stevens' lawyers told jurors that Paone
was told by Allen and'the construction foreman Robert "Rocky" Williams that he was going to "eat
that !:iii!."

prosecutors argued that Paone's testimony today seem~d likely to contradict his testimony to a
grand jury, in which he said Allen never explicitly said he would "eat" the bill but implied it. The
judge will make a decision Wednesday morning on how to proceed.

Other witnesses weren't quite as successful for: the defense as Paone. Jeanne Penney, a close
friend of Stevens' wife, testified about a $3,000 stained-glass window. that she bought as a
housewarming present once the Stevenses finished construction on their home. Prosecutors'have
presented evidence that Stevens never disclosed the window as a gift.

Tuesday, Penney stumbled w~en she described for whom the gift was intended.

"I gave her a gift. I gave them a gift," she said, adding, "The inte~est of that gift was primarily to
my friend, Catherine Bittner Stevens." .

One of Stevens' daughters, Susan Covich, testified about another alleged benefit Allen offered
Stevens: a pricey mechanical training course for Covich's son, Stevens' grandson. Allen helped
Covich's son get into a Veco job-training program when he was a troubled young man struggling
with addiction to drugs. She broke down as she described how her son, now incarcerated, lost his
jo~ with yeco, despite ~is fa,mily connecti(m~ ..

Covich also offered testimony designed to help boost another defense theme: that Stevens neither
needed nor walJted the gifts Allen was giving, and that they, were for the benefit of the Veco chief
when he used the Girdwood home.

She testified that she often stayed at her father's home in'Girdwood in 2002 when she was
traveling between college classes in Anchorage and her home three hours south. Allen was often
. there wheif she· arrive·d-Iate"at'nighf, s~e,said. One'time, there were cars in the driveway ~nd when
she went inside, all the bedroom doors were closed.

"I 'was planning to make my stopover into my dad's house," s~e said. "There were lights on, cars in
the parking lot. It just got too creepy, so I just drove on."

rwo other character witnesses also testified Tuesday. Sen. Orrin Hatch, R-Utah, a Stevens
colleague in the Senate since 1976, described his friend as a "fine; decent, honorable man."

"I'd rate him at the very top," Ha~ch said. "He's one of the true lions of the Senate, along wil:/}.,ply
. his state like you [£it - Stevens-21Bl
friend Ted Kennedy. He's totally honest, totally straightforward, fights for
,

believe." •

Stevens' wife is tentatively. scheduled to testify too, although the senator's lawyers haven't said
whether she will.

Stevens himself is at the end of the witness list, as a potential final Witness, but it remains unclear
whether he will actually testify.c judge Sullivan reminded Stevens .,. out of the presence of the jury
-. that he was under no obligation to do so.

"It's your choice. You don't have to say anything," Sullivan said this morning.

Sullivan ruled this morning that thousands of e-mails that Catherine Stevens sent will be turned
•,oyer,to fed~ral.prosetutors, ,wh~~d first,asked.for them more than a_year, ago.
Communications between Stevens aQer husband "will be relevant to thQterial ShO~
elernen't~fthe charges 'i~ the indict~ent, including defendant's knowledge, intent and motivation
for~ncealing the benefits he received from Veco," prosecutors argued.

They added that "in particular, we anticipate that certain documents at the time of the renovations
will reflect that both'Catherine Stevens and defendant knew they had not paid for the Veco work, ,
and documents thereafter will reflect,that Catherine Stevens and defendant took steps in 2004 to
mislead the press when the medi~ was investigating the cost~ associated with the renovations."

Stevens' lawyers had tried- over the weekend to. quash a Sept. 15 subpoena seeking the documents
from her law firm, Mayer. Brown.

Prosecutors had asked-for communications between Catherine Stevens and anyone with a U.S.
Senate e-mail address, as well as d9cuments relating to anything of value given or provided to Ted
Stevens, his wife or his daughter, Lily. That includes "any documents relating to diamond
earrings," according to a motion filed by Stevens' attorneys.

Sulliv~n said he saw no reason for prosecutors not to have the documents, and he ordered
Stevens' lawyers to turn them over.
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Sell it tod.
Contractor: Allen advised
not billing Stevens
By ERIKA BOLSTAD and RICHARD MAUER
_Anchorage Daily News
Published: October 15th, 200803:37 PM Advanced se
Last ,Modified: October 15th" 2008 03:3~ PM

WASHINGTON - It would have been "business suicide" to cross


the powerful'BiII Allen, testified the carpenter who renovated
Sen. Ted Stevens' home in Girdwood and who said he .was
bullied into not sending the senator a (inal $13,393 bill.
enlarge
Allen told him he'should "eat" the JOSE WI$ MAGANA fThe Associated Press
final bill from the homerenovations, Sel). Ted Stevens leaves the courthouse with his
said Augie Paone, who took the daughters Beth Stevens, left, and Susan Stevens
stand today as a defense witness in Covich at federal court in Washington. Covich
testified in Court Oct. 14,2008.
the senator's corruption trial. Allen,
the chief executive of Veco Corp.,
., an.oiL,field .services company·that ·Document exhibits' .
Leiters, legal documents, etc. submftteq as
was one of Alaska's largest private
evidence.
... employer~ before It was sold last
year, was overseeing renovations at
b Stevens' home in Girdwood in 2000
,~ and 2001.
I Exhibits from 10/20
Those renovations and other gifts Related Stories
are at the h.eart of the case against Allen used Stevens' home, witness
Stevens, whose corruption trial is in testifies
Story tools its fourth week. The 84-year-old FBI - Stevens-2183
Related Links
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seven felony counts of making false Alaska Politics blog: Will Stev.ens testify
E-mail a friend
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i~ "Iy-i:..~~qotl t<? testify Thursday, and the senator Complete,Alaska election coverage
himself might take the stand.
Font size ;A I A I A Photos: Sen. Ted Stevens gallery
During the lunch break today,
Photos: Historical photos of Sen. Ted
. Stevens got onto the witness stand Stevens
to determine whether he could hear and see the lawyers. He
also:tested the microphones. More Sen. Ted Stevens stories»
Judge sends Stevens' jurors h'ome',for day
~. 0 ,_. .~',q 1.-\.4-.4# -l':36 ;) D-~
s1~ve'1s: who's listed as the final defe witness, doesn't
)lave to take the stand. The judge ha? reminded hi(ll
o
Stevens 9,ets help from some friends
repeatedly that jurors aren't supposed to hold it against him if Which Stevens will jurors judge~
he doesn't. Stevens' defense rests
Testimony ends in Stevens trial
Paone testified today that I}e objected to "eating" the bill for,
work at Stevens' home and said so in a meeting with Allen, who told the carpenter he should "look
at it as a political contribution," Paone said.

"At first I was shocked," Paone said. "I also tried to hold on to my composure. I knew I was in a
bind, because I knew he had me in a spot where I really couldn't do anything."

Paone said he "thought about sending it over to the senator, but I knew it would be business
suicide. I knew that I was between a rock and a hard place. I thought it was wiser - or better
business sense on ,my side - to just leave it alone."

A few months later, Allen asked Paone's Christensen Builders to do work on his own house. 'Allen
padded the cost of his own renovations to compensate for the $i3,393 that Paone lost on the
Stevens remodel, the carpenter testified.

''The understanding was that I will do some work for you but you still owe me $13,000," Paone
said in court. "I was adamant that I was going to get paid for that bill that h~ owed me."

Stevens' legal team used Paone, who came across as a straight shooter:, to chip away at Allen's
credibility. Allen, who was the star witness for the prosecution, has pleaded guilty to bribing state
lawmakers as part of the wide-ranging corruption investigation that drew in Stevens. Allen hasn't
been sentenced yet.

One of the major themes of the defense case has been that Stevens and his wife pai~ all the bills
that they received, a'nd that Allen and other friends hid the true cost of the renovations, done
mostly while the couple was in far-off Washington. '

Yet some of Paone's testimony to a 2006 grand jury countered that theory, said prosecutor Joe
Bottini, an assistant U.S. attorney in Anchorage. He asked Paone to refer to what he told grand
jurors two years ago when the case was under investigation.

Didn't he go back to do additional work on the Stevens place?

He did, Paone said. He went back to work on the garage f1o,or as well as to build shelves, including
ski racks. '.ieco paid that $2,700 bill, Paone acknowledged. He also did some tiling on a fireplace at
Stevens' home, he said, and the $850 expense was charged to Allen as part of the renovation work
,Paone did on the Veco chief executive officer's home.

Stevens' team also tried to use one of the senator's neighbors, Bob Persons, to attack one of the
most memorable moments in the trial so far, when Allen told jurors that Persons said Stevens was
"just covering his ass" and wasn't serious When he asked for a bill in 2002 for work on his house.
FBI - Stevens-2184
Persons, who owns the Double Musky restaurant in Girdwood, had a power of attorney to obtain a
building permit on Stevens' behalf, oversaw the initial construction and handled bills for the family.
Stevens' attorney asked'him whether he, in fact, had told Allen that the'senator was "just covering
his ass" in asking for bills. Persons said he never said It.

"No," Persons said, adding under his breath, "crazy."

Persons, whose folksy mannerisms began when he took the stand and told the judge he'd rather
be fishing, got a mild scolding for joking with members of the jury while they were leaVing for their
afternoon break. The judge, warning Persons that he was to have no contact with jurors, asked
him what he said.
. hav~
"I.......saill,-rDo you a bathroom baQere?1 " Persons said,
~ - a question that eliGd chuckles
:,.even from Stevens, wh~ usually s.its stone-faced during testimony.
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Anchorage Daily News

Stevens friend testifies about billings


BOB PERSONS: Double Musky owner down'plays Veco role.
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
(10/16/0800:58:48)

WASHINGTON -- A few days before he was supposed to fly from Alaska to Washington and testify before a grand
jury in May 2007, Bob Persons, the owner of the Double Musky restaurant in Girdwood, met with, the
investigation's target -- U.S. Sen. Ted Stevens.

The unusual timing of that meeting, and Stevens' suggestions to him about the facts in the case tlie government
appeared to be bUilding, became a sUbject of Peq;ons' testimony Wednesday in Stevens' trial. . ,

Persons was testifying on behalf of Stevens, his longtime friend and Girdwood neighbor, accused in a seven-count
indictment of'failing to report more than $250,000 in gifts and services, prim'arily from the oil-field'service
company Veco and its chief executive, Bill Allen.

Allen organized and paid a portion of the remodeling, furnishing and repairs of Stevens' home starting from 2000
to 2006, according to charges and ,evidence in the case.
.(]2
Persons is expected to conclude his testimony this morning. The defense has. announced just two more
witiless'es: Stevens''Wife,Catherine, who the defense says was'incharge'of paying bills'and financing the
remodeling of the couple's Girdwood home; and Stevens himself. '

Though it projected an examination of Stevens of several hours and potentially involving dozens of eXhibits, the
defense can still rest Without calling him.

But as if to prove its intent, Stevens sat in the witness stand during a recess. Wednesday and tested his ability to
see thecomputer'monitor where exhibits aredisplayed'and to hear'questions from his attorney:spoken-in a·
. normal voice. Stevens, who is hard of hearing, has been listening to the-trial with the assistance of court-supplied
earphones, but he was without that aid in ~hE;! practice run.

Once the defense rests, the government can present rebuttal Witnesses, probably on Friday. Prosecutors said that
so far, they just have thre~, and they won't. be on the stand for long.

U.S. District Court Judge Emmet Sullivan said he hoped to conclude the case with closing arguments and
instructions to the jUry Monday.

PERSqNS DOWNPLAYS VECO ROLE


FBI - Stevens-2186
. U'nd~r friendly questioning by Robert CarY, on'e of Stevens' attorneys, Persons downplayed the role of Veco in the
main phase of the r~novations from late.summer 2000 to early spring 2001. That's when the size of home YJas
'doubled-"·-through the work of contractors paid by Stevens, and'from Veco workers;·whom ,he didn~t.

One of the trial's most memorable lines so far ~as uttered by. Allen in his tes~imony for the prosecu,tion two
weeks ago, when he reported on a key conversation he had with Persons in 2002. Stevens had sent a note to
Allen asking for a bill for Veco's work on the Girdwood house. But the note also asked Allen to speak with Persons
about that very request.

When he did, Persons told him the request was for shoyJ, Allen said.

,IIMr.:Persons,'did you'say·to Bill Allen~"BiII,..don't·worry about.getting a'bill -- Ted's.just-c~veringhiS"aSS?' ".<~ary.,


-~-' - ., ~"__ ' , ,tqY4--~-l~~~Y-1IV\.
, __ C2-.._,
.J
a;ked, quoting Allen's testimony._ 0
"No," Persons said. "Crazy," he added, under his breath.
o
But Persons' testimony under cross-examination, despite claims Qf a bad memory, played into the government's
assertions that Stevens was well aware of at least some of Veco's largesse on his behalf.

In May 2007, two months before the FBI raided Stevens' home for evidence of the Veco work, Persons was
summoned to a grand jUry that was meeting one floor below the courtroom where Stevens' triaris now under
way.

Before he left for Washington, Persons said, -he met with Stevens and told him the subjects the government was
interested in. Among the items listed on his subpoena were "generators" and "decorative lights of any type"
provided to Stevens.

"He said the generator really wasn't what he wanted," Persons recalled Stevens saying.

But the government has already presented testimony and exhibits showing that Stevens feared losing power,due
to the so-called Y2K bug between Dec. 31, 1999, and the new year. Veco paid to install a $6,000 generator with
an automatic starter that would fire it up if the power failed. Stevens expressed his thanks for the work -- and
never paid, according to the evidence.

Veco electricians and workers spent days installing rope lights around the house and buried a cable between the
house and a 60~foot-plus spruce tree so the tree could be lit from bottom to top. Persons told the grand jUry that
the Stevens family "hated the lights,:' he said Wednesday, especially the ones in the tree.

Prosecutor Nicholas Marsh reminded Persons how he told the_grand jUry that Stevens said that he had just
recently heard that Veco installed the lights.

"That's what you told the grand jury, because that's what Ted Stevens told you," said Marsh, who also was
Persons' interrogator before the grand jury.

Then Marsh asked Persons to read a note Stevens wrote to Allen on Nov. 8, 2002, thanking him for all the work
on the Girdwood home..

"The Christmas lights top it all -- our 60 foot tree lighted tothe .highest point!" Stevens wrote.

Persons also testified his home above his restaurant was among the places raided in a massive FBI operation
around Alaska on Aug. 31, i006. That's when six legislative offices were also searched, iricluding the offices of
the state senate president, Ben Stevens, T~d's son.

Persons agreed-to an interview by agents searching his house but told them he had trouble remembering things,
he said Wednesday. Reading from an FBI report of the encounter, Marsh said, the agents said Persons explained
he had a family history of Alzheimer's disease.

Then Why, Marsh asked, was he so good at remembering things from years ago during his examination by
Stevens' attorney?
FBI - Stevens-2187
"When I see something that refreshes my memory, it helps," Persons said.

Persons, whose folksy mannerisms began when he took the stand and told the judge he'd rather be fishing, got a
mild scolding for joking with the jUry while they were leaving for their afternoon br~ak. The judge, warning
Persons he was to have no contact with jurors, asked him what he said.

"I said, 'Do you have a bathroom back there?' " Persons said, a question that elicited chuckles even from
Stevens, who usually sits stone-faced during testimony.

'BUSINESS SUICIDE'
--- - ---------,------

.;:, -
Eiirlier Wednesday, Augie Paone, !O:arpentj-y contraCtor on the Stevem/~'\ovation, said Catherine ~tevens
paid his first five bills after they w~checked by Veco. But his sixth bill w'trtnever approved for submission to
Stevens, and Paone decided not to send it to Stevens himself. '

It would have been "business suiCide" to cross Allen, Paone testified in explaining why he was bullied into not
sending the senator a final $13,393 bill.

Allen told him he should "eat" the final bill from the home renovations, said Paone, who took the stand.
Wednesday as a defense witness. Paone, a residential specialist, said he was hireq by Allen when it becam~
apparent that Veco employees more use~ to oil-field work would be unable to complete the Stevens job before
winter set in. • ,

Paone testified Wednesday that he objected to not getting paid for his work at Stevens' home, especially after
shelling out the cost of materials and wages. He testified he told that directly to Allen.

Allen told Paone he should "look at it as a political contribution," paone testified.

"At first I was shocked," Paone said. "ralso tried to hOld on to my composure. I knew I was in a bind, because I
knew he had me in a spot where I really couldn't do anything."

Paone said he was out of his league. He had five employees, Allen about 5,000.

Paone said he "thought about sending it over to the senator, but I knew it would, be business suicide. I knew that
I was- between a rock and a hard place. I thought it was wiser -- or better business sense on my si<!e -- to just •
leave it alone. "

A few months later, Allen asked Paone's Christen.sen Builders to do work on his own house. Allen padded the cost
.",- 'of his qwri renovations to compensate for th,eA13,393 that p'aon~ I()st on the Stevel1s remodel, the carpenter
testified. .

"The understanding was'that I will do some work for you but.you still. owe me $13,000," Paone said in court. "I
was, adamant that I was going to get paid for that bill that he owed me."

The bill he submitted to Allen, and which Allen paid, had a "Girdwood line item for "invoice from last year,"
thoughit,didn't mention.,S.t~~~nJ> py n~me.

ALLEN'S CREDIBILITY ATTACKED

Stevens' legal team used Paone to chip away at Allen's credibility. Allen, who was the star witness for the
prosecution, ha's pleaded guilty to bribing state lawmakers as part of the wide-ranging corruption investigation·
that drew in Stevens. Allen hasn't been seritenceq yet.

One of the major themes of the defense case has been that Stevens and his wife paid all the bills that they
received, and that Allen and otherofriends hid the true cost of the renovations, done mostly while the couple was
in far-off Washington.
FBI - Stevens-2188
Yet some of Paone's testimony to'a 2006 grand jury countered that theory, said prosecutor Joe Bottini, an
assistant U.S. attorney from Anchorage. He asked Paone to refer to what he told grand jurors two years ago
when the case was under: in\l.~~tiga~Jon.

·Didn't he go back to do additional work on the Stevens place?

He did, Paone said. He went back to work on the garage floor as well-as to build shelves, including ski racks.
Veco paid that $2,700 bill, Paone acknowledged. He also did some tiling on a fireplace at Stevens' home, he said,
and the $.850 expense was charged to Alien as part of the renovation work he did on the Veco chief executive
officer's home.

In-hls_cross-exaniiriation, Bottini_co!-,ntered with the' argument that Stevens knew work-was I5Eling done that he
should have paid for 'but didn't. Work that'PaOJ1E{ did' after the'main remod!=I'wassomething-that StevensshoiJld _
~~---------
----
- - - - = - - - - - ---=--------'=------- - - - ~ - , - , - - ~ -~
0/
3.-
~ve.kn.oYm h~ needed to pay forOtini suggested. 0
"This additional work that you did, m'onths later, fixing the garage floor, putting the shelve's up in the garage, the
fireplace work, that was all work that anyone would notice, isn't it?" Bottini asked.

"I guess it would," Paone said.

~aone said his initial intent on taking the job was to fully doc!Jment everything, with extreme care, because of
Stevens' position. That plan fell apart in the end, he said.

'~Didn't you tell the grand jurors that you always thought that someday something like this might happen?"
Bottini asked.

"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;" Paone said.

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Copyright © Wed Oct 22 14:31:43 UTC-OSOO 2oosi900 The Anchorage Daily News (www.adn.com)

FBI - Stevens-2189

----_._--~~
---- . - -- - - ---------",

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Anchorage Daily News

Stevens' wife takes stan" for defense·

!?y RICHARD MAUER AND ERIKA BOLSTAD


Anchorage Daily News
(10/16/0808:40:32)

WASHINGTON - Jurors have seen photos of her home, heard from her friends, and seen dozens of checks she
wrote, but Thursday, they finally heard from the wife of Sen. Ted Stevens herself, as she began testifying as a
defense witness in her husband's corruption trial.

Catherine Stevens, a lawyer who appeared calm and poised while her husband's attorney, Robert Cary,
questioned her, took the stand to help support the defense theory that the senator paid all bills he was given in '
connection with the renovations. She often turned and spoke directly to the jury.

Stevens may testify himself this afternoon. The 84-year-old Republican is'on trial for failing to report more than
$250,000 in gifts arid services, largely from the oil-:field service. company Veco and its chief executive, his former
friend, Bill Allen. Most of ~he gifts are connected to home renovations that doubled the size of the Stevens cabin
in Girdwood.

Stevens' wife, who oversaw the financial details of the renovation work, said she' assumed that two Veco Corp.
employ,ees on the job site in 2000 and 2001 were being paid by the contractor doing most of the work, ~
Christensen Builders. lJ.y<:L
"He was working with Christensen Builders," Catherine Stevens said·of Robert "Rocky" Williams. "He was on the
job there. He was paid. by thell'1."

Same for David Anderson, another Veco employee working on their home, said Catherine Stevens.

"He was at the job site, I assumed he was working with Christensen Builders," she said.

Both. workers were on the Veco payroll, according to earlier testimony. And Catherine Stevens testified that when
she sent Williams a thank you gift certificate from Delta Airlines for all his work on their project, she sent it care
of Veco's office in Anchorage. -

"I don't know why, unless he asked that I sent it there," Catherine Stevens said. "He worked for Veco, I don't
know how long."

Earlier in the day, prosecutors wrapped up their cross-examination of Bob Persons, Stevens' longtime friend and
Girdwood neighbor, and a defense witness. Stevens' lawyers called him to strengtheps::r~i~~g~_~dhe
senator paid all bills he was given in connection with the renovations.

But prosecutors hit Persons hard both Wednesday and Thursday, pointing to inconsistencies in his testimony.
When one of Stevens' defense attorneys, Robert Cary, asked Persons about conversations he had with Allen,
- Persons said- he "re'minded Bill (Allen) of all the times that-the senator had told him that he haa to give him bills
for anything and everything that was done at, that house."

Yet when asked by prosecutor Nicholas Marsh if he ever actually got an invoice from Allen, ~ersons said no.

One of Stevens' defense attorneys, asked Persons to describe 'a February 2006 interview with two FBI agents.
T.he interview' was very confusing, Persons said. It "reached a point where I don't know w\1ether I was answering
questions or he was," Persons said, describing the demeanor of one of th~ two agents who interviewed him at his
home in Girdwood.

._----- =--..'
. , ~'-.~, ~~"==-:::.::.-_=-=_==--=-~=.-:c::"-':C:::'
~" . .
"-It ~~S;l~ bE!!i~g mentally wat~r-bf:\fed/ persons.saicl. "The g~y vy.asa~ Thatwas th~most hateful human
beirfg I e~r met in my Iife~ That g~ade rne-understand why .there~s a 'I~f innocent people in pr~so~."

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FBI - Stevens-2191
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Sell it tod.
Stevens Cln,swers charges:
'No sir:
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
Published: October 16th, 200801:24 PM Advanced se
last Modified: O~tober 16th, 200803:26 PM.

WASHINGTON -- Sen. Ted Stevens took the stand in his own


defense this afternoon, asserting in a dramatic and rapid-fire
exchange with his lawyer that he has done no wrong.
enlarge
"Senator, wl)en you signed those Dana Vetkouteren J AP
Story tools In this artist's rendering, Sen. Ted stevens, R-
forms, did you believe they were
comments (O) Alaska, -answer questions from his defense
accurate and truthful?" asked his attorney Brendan SUllivan as jUdge Emmet G.
E-mail a friend lawyer, Brendan Sullivan. Sullivan looks on at federal court-in Washington,
Print Thursday, Oct.. ~6, ~008. (AP Photo/Dana
Digg this Verkouteren)
"Yes sir," Stevens said.
Seed Newsvlne
Send link via AIM
"Did you ever intentionally file false
r~r r-ty'YAHOOl.I More Sen. Ted Stevens stories»
disclosure forms'?" his lawyer asked.
Font size: A IAIA Judge sends Stevens jurors home for day
"NO, I did not," Stevens said. Stevens gets help from some friends
Which Stevens will jurors judge?
"Did you ever engage in any scheme to conceal anything from
Stevens' defense rests
the Sen.ate?" Sullival1 asked.
Testimony ends in Stevens trial
"No sir," Stevens said.

The 84-year-old Alaska Republican is on trial for failing to repoit more than $250,000 in allepB'i _ St -2192
gifts and services, largely from the oil field service company Veco and its chief executive,.his evens
former friend Bill Allen..Most of the gifts are connected to renovations that doubled the size of the
Stevenses' home.

His testimony, which ended after 20-minutes when <:ourt broke for the day, followed that of his
wife, Catherine, who also testified as a defense witness:

Stevens is not required to take the stand, and jur~rs couldn't hold it against him if decided against
it, the judge warned him before he began his testimony.

"It's a privilege and a duty," Stevens said just before jurors entered the room to hear his
testimony.

Catherine Stevens/a.lawyer- who appeared calm and.poised while. her husband's attorne'(r?-o~ert
I '1 c..{ A-- - AN - I 3 b ~ 0'" .'V"\
----..-.- . - -- - -- ----------------,.

caJ questioned h~r, took the standOelP support the defense theory that th~k~senator
haC>paicr:air the bills he received in c~ction with the renovations of their Gird~ home. She
often(urned and spoke dire~t1yto the jury.

Mrs. Stevens, who oversaw the financial details of the renovation, said she assumed that two Vec<;J
Corp. employees who were on the job site in 2000 and 2001 were being paid by the contractor
that was doing most of the work, Christensen Builders.

"He was working with Christensen Builders," she said of Robert "Rocky" Williams. "He was on the
job there. He was paid by them;" .

Same for David Anderson, another Veco empl.oyee who was working on their home, Catherine
Stevens said.

"He was at the job site. I assumed he was working with Christensen Builders," she said.•

Both workers were on the Veco payroll, according to earlier testimony.

Catherine Stevens also testified tha~ when she sent Williams a thank-you gift certificate from Delta
Air Lines for his work on the project, she sent ·it in care of Veco's office in Anchorage.

"I doJi't know why, unless he asked that I send it there," Catherine Stevens said. "He worked for
Veco, I don't know how long."

Earlier in the day, prosecutors wrapped up their cross-examination of defense witness Bob
Persons, Stevens' longtime friend and Girdwood neighbor, who had a power of attorney to obtain.a
buildin"g permit on Stevens' behalf, oversaw the initial construction and handled bills for the family.
Stevens' lawyers called him to strengthen their theory that the senator had paid all the bills he was
given for the,renovations.

Prosecutors grilled Persons, however, pointing to inconsistencies in his testimony.

When Stevens attorney Cary asked Persons about conversations he'd had with Allen, Persons said
he "reminded Bill of all the times that the senator had told him that he had to give him bills for
anything and everything that was done at that house.,"

Yet when prosecutor Nicholas Marsh asked Persons whether he ever got an invoice from Allen, he.
said no.

One of Stevens' defense attorneys asked Persons to describe a February 2006 interview with two
FBI agents. The interview w~s very confusing, Persons said. It "reached a point where I don't know
whether I was answering questions or he was," Persons said, describing the demeanor of one of
the agents wl)o interviewed him at his home in Girdwood.

"It was like being mentally waterboarded," Persons said. "The guy was awful. That was the most
hateful human being I ever met in my life. That guy made me understand why there's a lot of
innocent people in prison." FBI - Stevens-2193

AOVi:RTISEMENT
~

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Anchorage Daily News

Sen.Steven~takesthestand
~enator voluntarily testifies in his defense on the same day his wife is cross-examined
By RICHARD MAUER and ERIKA BOLSTAD
Anchorage Daily News
(10/17/0805:03:20) -

VVASHINGTON -- Sen. Ted Stevens took the-stand in his own defense Tt1ursday afternoon, erasing any doubts
that he would finally break his public silence and answer at least some of the all~gations of misconduct dogging
him for the last two years.

After a day in which Stevens' wife faced sharp cross-examination, the jury 'returned from a late afternoon recess
to see lead defense attorney Brendan Sullivan al'}d Stevens standing at the defense table after everyone else sat
down.

The judge summoned the courtroom to orde~, then Sullivan announced: "We call'Sen. Ted Stevens."

With Stevens in the witness chair, his experienced trial attorney wasted no ~ime getting to the central issue of the,
case: did the 40-year veteran of- the Senate disgrace his career by filing falsE;! disclosl!res to hide some $250,000
in gifts between 1999 and 2006.

"Senator, wh!=!n you signed those forms, did you believe they were accurate and truthful?" asked Sullivan. @.
"Yes, sir," Stevens said.

,"Did you ever intentionally· file false disclosure forms?" his lawyer asked.

"No, I did not," Stevens,said.

"Did you
--
ever engage
- -
in any- scheme
--
to

conceal
- - -,..
any-thing'
-~ - ....... - - - -
from. Jb.e
~-=>-- •
S_enate?"
-- -- -
.Sullivan .asked.
.

"No, sir," Stevens said.

The 84-year-old Alaska Republican is on trial on seven counts of filing false seriate disclosures. Most of ~he
alleged gifts were from the Alaska-based oil field service company Veco, now defunct, and its chief executive,
Stevens' former friend Bill Allen. Most of the gifts are connected to renovations ,from 2000 to 2001 that doubled
the size of the Stevenses' Girdwood home, .

After the brief assertion of his innocence, Stevens' lawyer switched to a gentler line of inquiry: a 20-minute
autobiography that begari with Stevens' humble Depression-era origins in Indiana r outlined his World War II
career flying transports in Asia, and talked about his journey into law and public service. Stevens told the jury
about the plane crash in Anchorage that killed his first Wife, Ann, and four others. From the stand, Stevens
'acknowledged the only other survivor of the crash, Tony Motley, a former diplomat who sat with other Stevens
supporters in the courtroom Thursday.

Steven? is not required to take the stand, and jurors ~ould not hold it against him if he had,decided not to testify,
the judge advised the senator before he began his testimony. FBI _ Stevens-2194

But Stevens, a senator since 1968, faces not just jurors in Washington, D.C., but the first competitive race of his
Senate career back in Alaska. He has been stuck inside a federal courtroom for the past four y.reeks while 3,500
miles away,.the Democratic mayor of Anchorage, Mark Begich, has been campaigning to replace him .

.More than that, he has refused to discuss questions about his own integrity·thath~'1e aris~n ~.ince ~he F.BI.
____.__ . -' ~il.of· - - l~ c.{A.-k#.... (:3b~O--- ~_~e. __
investigat,~on of public corruption iOska surfaced with a coordinat~d seGof raids on Aug. 31, 200!5.
;;.; , ~

SEN~TOR IS ADAMANT ABOUT TESTIFYI~G

With the jury, out, U.S. District Judge Emmet Sullivan asked Stevens and Brendan Sullivan to stand before the
,bench and answer questions to ensure Stevens understood his right to n9t testifY. Stevens, once a territorial
prosecutor in. Fairbanks, was adamant about t~king the stand.

"It's a privilege and a duty," he said.

The court recessed for the day as Stevens concluded his autobiography. Brendan Sullivan said he had about two
hours of questions for his client when testimony resu~es this morning, then the prosecution will get its tur'n.

The case is expect~d to go the jury .early next week,.

Stevens was preceded on the witness stand by his second wife, Catherine, who played ,either a major role or
modest -role in the renovations, depending on which theory of the case to beiieve. The defense says she handled
the Stevens family finances and oversaw the home, but the government has introduced testimony and scores of
e-mails, notes and other contemporaneous documents that show Sen. Stevens himself commenting on details of
the Girdwood renovations ,by Veco ,employees.

Virtually every day for the first 12 days of trial, the government introduced evidence showing that Veco
employees -- particularly electricians and a plumber -- were on the job daily, that the" project's two supervisors,
Robert "Rocky" Williams C!nd Dave Anderson, were ~eing paid J)y Veco. Veco pr:.ovided much of the materials for
the renovation and all the later additions and some repairs and furnishings, according to the e~idence.

There has been no evidence that the Stevens ever paid Veco a penny for. the work. <

'On the other'hand, a parallel work team, from the home-buildin'g contraCtor Christensen Builders of AnchOrage,
also worked on the job, mainly doing the carpentry. 'The'Stevenses paid more than $100,000 to Christensen -- all
but one of their invoices. Christensen's final $13,000 invoice was,paid by Allen.

CATHERINE STEVENS STICKS TO HER STORY


.
In her testimony Thursday, Catherine Stevens acknowledged that 'Christensen Builders was recommended by
·Allen.How did·she-know"Allen-had enough experience with 'home contractors-to make' an' intelligent
recommendation, she was asked under cross examination.

"He had a firm involved in construction," she'said.

What kil1d of construction?

"I don't know. what he did," she said.

Does he build houses?,


FBI - Stevens-2195
Stevens replied that Allen's firm works on the North Slope, there were houses on the North Slope, so therefore' he
might have bUilt houses. .

'Every-other witness to testify about Veco's sc.ope of expertise said ifonly encompassed oll~fieid; Industriai and -
commercial work, though some employees had prior residential experience.,

Catherine Stevens acknowledged that Williams and Anderson worked on the project but asserted that she
believed they were being paid by Christensen -- even though she said she knew they were Veco employees
before, knew they were Veco employees later, and sent mail to Williams at the Veco offices.

"He was-working with Christensen Builder:s," she said of Williams. "He was on the job there. He was paid by
them."
The same was true for Anderson, ~dded. She said sh~ assumed she OaYing their wages in the
Christensen, bills she paid.
'~
V- ' -
:.-
She was the only witness in the case to offer such ~ theory.

Catherine Stevens, also an attorney and former prosecutor, stuck to her story. even under'cross examination by
the lead trial attorney for the government, Brenda Morris. She professed to' not know anything or have any
curiosity about the man who drew the architectural plans, a Veco engineer, including whether he was' qualified: .
She said she had no idea how a large deck appeared on the new first floor of her house a year after Christensen
,Builders finished their job -- work done by. Veco.
"I don't know who built the deck," Catherine ~tevens said. "We paid for the deck, I thought."

"Weren't you responsible for paying the renovations at the chalet?" Morris asked. "Who sent you a bill you
thought was paid?"

St~vens' wife said she called the bookkeeper in her husband's Senate office to see if a bill had come in, but then
said, "I forgot about it" and never followed up.

'IT WASN'T MY FURNITURE'

Under direct testimony, Catherine Stevens continually expressed anger over things she found in her house or
that were added in construction' -- items that came fron:'\'Allen. There'was the grated steel ,steps, built at great
expense by Allen's nephew, Anderson, so snow would fall through and not have to be shoveled:

What was her reaction when she saw it?

"I was extremely angry," she told defense attorney Robert Cary. She wan~ed wood.

What about the steel platform at the bottom of the steps?


.
"I was extremely upset because they were very dangerous," she said.

How about the big Viking grill that Allen's employees boug~t and installed on her deck with a crane?

"I' was angry-because I did not know how-it got'there."'For-some reason, though natural gas was "Illmbed
throughout her house, the fact that the grill used g~s also 'made her angry -- and fearful of fire.

"I did not want any kin,d of gas anything," she said.

How about the furniture Allen gave to her from the apartme'nt he was leaving?

"I was a very unhappy person when I saw it in my chalet," she said. "It wasn't my furniture, and my furniture
wasn't there." .
, . FBI - Stevens-2196
Under cross exahlination, she couldn't explain why, after seven years, she never got rid of the furniture she
disliked so m4ch, or why she didn't demand the contractors take out .the steel stairs, or tell Allen to, g~t rid of the
grill.

-- "YO'll make close to a nalfmillio'n aollars a year, wny can't you get tlli3t out of there?"'Morris asked: "Why does
Bill Allen have to get it out of there?"

She said it belonged to Allen.

"Then send it to the dump!" Morris said. "He doesn't know any better."

Morris, through.her questions, portrayed Catherine Stevens as a wealthy Washingtonian who treated Stevens'
office staff like servants. Stevens aide Barbara Flanders maintained
, -
her checkbook, Stevens acknowledged,
- - - ' . - .- - - .. .
~
paying ~1~ billsJrom Nordstrom, Oan Marcus and Sacks Fifth Avenue. S'
, e--' I, ' "
"Shei;vas your human ATM machine," Morris said, getting cash when shel1eeded. and sending it home in'Sen.
S~evehs' briefcase.

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Copyright ~ Wed Oct 22 14:29:08 UTe-OaOO 20081900 T1~e Anchorage Daily News (www.adn.com)

FBI - Stevens-2197

- -- - -.;..
- - - - -------O-------"""'"""""-"'7""""""'li

fl·" c;.~

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,Anchorage Daily News

Stevens bristles under cross-exa'mination

By ERIKA BOLSTAND and RI<:HARD MAUER


Anchorage paily News
(10/17/0815:38:05)

WASHINGTON - Throughout h'is four-week corruption trial, Sen. Ted Stevens has sat quietly, listening to
testimony from tradesmen about free home repairs and gifts, silent as the star witness told jurors that the Alaska
RePl:lblican was merely "covering his ass" wh~n he asked for bills.

But by late this afternoon, jurors had gotten a taste of the cranky 84-year-old senator who once called himself
"the meanest man in town."

"Aren't these e-mails really what you're doing, you're covering your bottom?" asked Brenda Morris, the lead
Justice Department prosecutor on his case, ,asking Steve'ns about how he handled a 2004 press inquiry into who
paid for his renovations." .

liMy bottom wasn't-bare, II, Stevens snapped 'back.

Stevens spent a grueling day on the witness stand, beginning with his lawyer gUiding him ~hrough nearly fo,ur
hours of testimony in tlie morning and early afternoon. In the final houfsof the day, Morris spent more than an
"hour on follow-up questJ9.n~.

The senator stuck with'the two prevailing themes of his defense: that he wanted none of the gifts he had been
given, and that his wife was responsible for the home ·renovations that led, in part, to his federal indictment.
Stevens is accu~ed of failing to disclose more than ,$250,000 in gifts, - including free labor - that helped do~ble
the square-footage of his modest A-frame cabin in Girdwood,

Stevens, whose 40-year career in the Senate has given him a temperament more accustomed to being the one
~oTn-g- the 'questioning; bristled' at haVing to waitto-be~asked.'He wasn't always-able to control-himself, and-he.
made his dispain forMorris Clear by occasionally responding-to her questions with 'inquiries of his own.

"'I think you better rephrase your question; your question is tautological," he lectured Morris in response to a
question about renovations to his· deck.

Stevens testified he and his wife wanted none Of the gifts and that they ,were especialiy annoyed wnen th~y
returned to their newly renovated home in 2000 and found'that Bill Allen, the chief witness against him,' had
replaced their furniture with used stuff of his own. '

"If you didn't want all these items, why didn't you just ask for your key back?" Morri[~~ke~~E:~~~-~tePn~t you
take away his key?" . ,

"H,e was a good friend, and I trusted him," Stevens·said.of Allen, former chief of Veco Corp., an oilfield-services
, compaiwand one of the largest 'private employers 'in Alaska'. "H'e did things- I didn't iike-and·I asked him, to
change and he said he would. But he didn't."

Earli~r in the day, under questioning by his own lawyer, Stevens had accused Allen of lying to jurors about
conversations the two had when they were still friends. •

Allen testified earlier in Stevens' corruption trial that he n~ver gave Stevens invoic~s for work done on the
senator's,home in Girdwood, even ~houg~ Stevens asked for them. Allen, who pleaded guilty last year to bribing
Alaska state lawmakers, agreed to testify in Stevens' trial and two others in exchange f~>r leniency in his own '
.~ ,sehtendng. '
Stevens di~puted Allenis account cl')2006 conversation in Arizona, wherl7-'ey were both vacationing on their
~rm'uI'/'boot camps" - get-togeth~n which th,ey would drink wine and' ~k'in the desert to shed weight. Allen
testified that he and Stevens talked about the need for the senator to receive invoices for the Veco work on the
house. But Stevens denied the conversation. '

":rhat's just an absolute lie - I heard if," Stevens said, referring to Allen's courtroom testimony. "It's just an
absolute lie."

Stevens also disputed Allen's acc.Qunt of a conversation the two had in Alaska at a restaurant owned by a mutual
friend in Girdwood. Stevens told him he was aware that his friend had done more work on the house than he was
letting on, Allen testified. .

That was "another falsehood," said Stevens.

Stevens also expanded on the "teepee" theory his .lawyer, Brendan Sullivan, first introduced in the opening day of
the trial. His wife was responsible 'for everything inside the teepee, Stevens said.

"What goes on inside" was up to Catherine, Stevens said. "Outside is my business."

When Stevens described his initial vision for renovating their cabin by adding a garage and a bunkroom on the
first floor, he testified that it wasn't what his wife wanted and, therefore, they came up with a more elegant
design. .

"When she said she didn't like that plan, ,there was a new plan, and there was no argument," Stevens said. "And
I wasn't unhappy about it. I was happy about that."

Catherine was in charge of all of it, Stevens testified. She'obtained the line of credit, maintained the checkbook
> for th~ir h<?lJse-rela~ed exp~nses a~nd r~ceivedall of the bills. She paid them all too, Stevens said.

"She got all the bills and paid all the bills," he said.

Yet Stevens himself demonstrated extensive knowledge of how much money was going into the project. He asked
his old law school friend, George Reycraft, to dissolve a trust worth about $50,000. to devote to the renovations.
He instructed his bookkeeper to open up a bank account with $10;000, and he and' his wife took out a line of
credit together. . .

Stevens - and not his wife - also met witn the Veco engineer who drew up tne plans for the house. Once the
drawings were complete, he wrote a note to the engineer asking for a bill, telling him that "under Senate rules, I
must pay you for what you have done," and adding, "Now I want you 'to give us a bill for your work."

He never got a bill from Veco or the engineer, John Hess, Stevens testified today, and could not find any record
of Hess replying to his letter. . . '

Stevens' wife had a differing version of the story Thursday, when she testified. Hess'.design was drawn up before
they hired their main contractor, Christensen BUilders, but Catherine Stevens testified she thought they were
payingJor the plans through Christensen Builders. FBI - Stevens-2199

. "I assume that it was part of the contract when we were paying for the construction of the chalet," she testified
Thursday.

"You just took a draWing from someone you never met?" asked the prosecutor.

"Yep," said Catherine Stevens.

The trial, which began Sept. 22 with jury selection, is likely to conclude Monday.

The jury could begin deliberations as soon as Tuesday.

I~--~~·· __·
o '0
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Anchorage Daily News

Senator spars with_ prosecutor


STEVENS TRIAL: He si!lYs he concealed nothing: There was nothing to conceal.
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
(10/18/0803:57:34)

WASHINGTON -- As it was, the witness chair was an unfamiliar venue for the senator of 40 years. But the
aggressive, hostile questions-Friday from a senior'government prosecutor landed hard on Sen. Ted Stevens,
famed for his short fuse.

Baited with rapid-fire challenges to his,integrity, honesty and credibility, Stevens mainly answered "yes" or "no"
before a jury that will soon be judging h'im, and keeping to his story that he didn't believe he received any gifts
from the oil-field service company Veco or its chairlT!an, Bill Allen. We...
Earlier Friday, questioned by hi~ own attorney, Stevens dismissed earlier testimony from Allen that the senator
once acknowledged owing the Veco boss money for the work. He calJed what Allen,said in court "an absolute lie."

By late Friday afternoon; jurors had gotten a taste of the testy 84-year-old senator, who once called himself "the
meanest man in town."

"Aren't these e-ri'lails really what you're doing, you're covering your ~ottom?" -asked Brenda Morris, the lead
Justice Department~pro~eq~tor: ()n his ca~e, asking_Stevens ab~ut how he,-handled a 2004 pr:ess inquIry into who
paid for his renovations. The question referred back to the most memorable'line ofttie trial, when Allen testified
Qct. 1 that ?tevens was just "covering his ass" in asking for invoices he had no intention of paying.

"My bottom wasn't bare," Steven-s snapped back at Morris.

Stevens spent a grueling day on the witness stand, beginning with his lawyer guiding him through nearly four
hours of testimony in the morning and early afternoon. Morris spent more than an hour on follow-up questions
before the trial recessed~for the weekend. Stevens is schedLiI~d To be oack in the witness chair Mohday morning.

Stevens is charged in a seven-count felony indictment with lying on Senate disclosure forms from 1999-2006 by
failing to report gifts, services and other beneJits. Most were from Veco or Allen,"both deeply involved In the
renovations on Stevens' official residence in Girdwood starting in 20QO.

Stevens' veteran defense a.ttorney, Brendan Sullivan, spent most of the direct ex~mination going over the list of
allegeq gifts item by item, with Stevens' specific refutation.

E-MAIL EviDENCE
FBI - Stevens- 2200
The process, used by both prosecution and defense, has become almost,a rite: The witness, in this case Stevens,
is directed to read a passage in an e-mail or note projected 6n monitors throughout the courtroom, including a
large number of flat-screen panels shared by jurors. Often the same correspondence is used by-the opposing
side, only witli aifferent empnasis. - -- - - - •-

By now, some jurors couJ~ probably r~cite by. heart the first three sente.nces of Government's Exhibit 509. It's
come up with both Allen and Stevens to prove the government's case that Stevens knew about the work Veco did
on his home, and by the defense to prove'Stevens' intentions were honest. .

The· exhibit is a- handwritten note from Stevens to Allen on Nov. 8, 2002 -- a few days after Stevens won his sixth
full term.

-'81D- {'7 t.t;r-k,iV,-{s(;;40-.-v\,


=======--~--:==:.....:.=.:..---::..;;;~===========:..::::..:...::===~c..~
__._
"Many th~nks for all you have donn make our living easier and our honQore enjoyable. The Christmas lights
topJt all -- our 80-foot tree Iighted~the highest point! II _.
Y -
The lights, in fact, have turned Into a key matter of contention. Veco installed hundreds of feet of rope lighting on
the house, then built an.underground cable to the spruce and "installed two electric boxes and weather-proof
outlets on the trunk. Veco workers ran the lights up the tree using a boom truck.

Despite the note, Stevens said he didn't like the lights and only wanted Allen to find someone to put up his own
small colored lights he stored in his garage. Some of,the strands he bought at post-Christmas sales, he said.

The third sentence in Government Exhibit 509 is: "Don't forget we need'a bill for what's'been done at the
Chalet."

Stevens never got a bill from Allen.

UNWANTED 'GIFTS'

The tedious list of refutations by Stevens during his direct examin,ation b~came quick fodder for Morris when sfle
opened her cross examination with a jolt. -

You didn't want the rope lights, she asked.

That's right, said Stevens.

•You didn't want the first-floor deck?

I said I didn't expect it, corrected Stevens.

You didn't want the plastic roof over the deck?

I didn't know about that, said Stevens.

You didn't want the steel staircase?

No..

You didn't want the gas grill?

No.

You didn't want the fish statue?

No..

You didn't know about the repairs to the garage? FBI - Stevens-2201

I did.

You didn't want the big blf3ck- furniture?

No.

You didn't want the tools?

No.

Stevens said all those items appeared without him asking, starting in 2001. He couldn't stop Allen from giving
them to Dim. 0 0
"If'~u didn't want all these items, why didn't you ~Sk for the key back?" Morris said.
"Because we .were still friends," Stevens said. "He was still using the place more than I was."

"You were the 'Lion of the Senate,'" she said, a sarcastic reference to character witness testimony earlier in the
week by Sen. Orr,in Hatch. "But you didn't know how to stop a man from putting stuff in your place?"

'~He was a good frie'ild," Stevens again said of Allen.

"He did things I didn't like and I asked him to change and he said he would," Stevens added later. "But he
didn't."

JUNK-YARD STAIRCASE

Stevens continually denied knowing that Veco itself provided any material or labor. But pressed on the grat~d
steel staircase, custom-welded by Allen's nephew, Stevens said that Allen told him it came from the junk yard
after it was removed from an oil platform

. Did Allen have a junk yard-in his home, Morris asked, or was it Veco's junk yard?

Stevens said he figured its cost was folded into the bills his wife actually paid to ol')e of the contractors,
Christensen Buildings. The·owner of-the company had earlier testified he had.nothing to do with the staircase.

Over the course of the trial, the Was~ington jury has had a crash c~urse in Alaskaology: the state's vast
distances arid regions, its unique Native corporations, dog'mushing, the Kenai River and salmon fishing, the
conflict between sport and commercial fishermen, Girdwood weath~r, roof gIJ:~ciation and heat tape, moose'on the
a
hfghwa-ys, -time'zones, Statehood, the unending number of people 'planning to came-to~Alaska-for year or two'
only to stay for decades, and lots more.

Stevens added two new ones.

While Stevens fI1ade several requests fc;>r bills over the course of the cabin renovation, Morris noted, why didn't
he ever ask for the price? The Veco architect who drew plans -- Stevens sent him a note at his Veco office; asking
fo"t a Dill. Yet Stevens- never:asked, before or after,·how much-the-plans would cost -- if:he was serious about
paying, why did' he not get'an estimate first, Morris asked. '

"I don't ask him about his hourly wage. I just asked him- for his 'bill. That's the Alaska way," Stevens said.

Did he check the architect's references, see whe,ther h~ was Iicens.ed? No, said' Stevens, he trusted Allen's
recommendation. .

Did he see whether the architect was bonded?


, FBI - Stevens-2202
"We don't require anyone to have a bond," Stevens said. "That's not the Alaska way."

the architect, John Hess, was a Veco engineer who testified that he drew up the plans on company time. Hess
sai~ h~ wrote Stevens back that he couldn't char~e for his time -- Stevens would have to pay Veco, he said.

Stevens said he never got that reply from Hess'.

Stevens bristled at times during the cross-examination, having to wait for a question before he could rep"ly.
Sometimes the judge intervened. Stevens showed his disdain for Morris' questions by occasionally-responding
with inquiries of his own.

"I think you better rephrase your question, your question is tautological," he lectured Morris in response to a
q~estion ~.boutrenovations to his deck. "
And
~~
fo~ a,brief moment, Stevens GMorris traded roles. 0
Mo;ri~ said he knew he was getting gifts when he sought a bill.

"If it's a gift, .why did I ask for a bill?" said Stevens, redirecting the question to Morris.

"To cover your butt," she replied.

"That wasn't..fair, ma'am," Stevens said.

WORKING ARRANGEMENTS

Earlier in the day, under questioning by his own lawyer, Stevens· had accused Allen of lying, to jurors about
conversations the two had when they were still friends.

Allen testified earlier il'1 Stevens' corruption trial that he never gave Stevens invoices for work done on the
.senator's·home in Girdwood, even though.Stevens asked for them. Allen, who pleaded guilty last year to bribing
Alaska state lawmakers, agreed to testify in Stevens' trial and two others in exchange for leniency in his own
sentencing. .

Stevens disputed Allen's accoun~ of a 2006 conversation in Arizona, where they were'both vacationing on their
annual "boot camps" -- get-togethers where they would drink wine and walk in the desert to shed weight. Allen
testified that he and Stevens talked about the need for the senator' to. receive invoices for the Veco work on the
house. But Stevens denied the conversation.

"That's jusfan absolute lie, I heard it," Stevens said, referring to A!len's courtroom testimo~y. "It's just an
absolute lie."

Stevens also expanded on the "teepee" ,theory his lawyer, Brendan 'Sullivan, first introduced in the ope'ning day of
the trial. His wife was responsible for everything inside t~e teepee, Stevens said.

"What goes on inside" was up to Catherine, Stevens said. "Outside is my business." That system suited them
• both, he said. '

Wh~n ?te'{~ns ~~~.criged his jnitial vision for renovating their cabin by adding a garage and a bunkroom on the
fir?~ floor, he te~~ified that I~ Wasn't what ti}s wife warffed and, 'therefore, they came up witil a more elegant
design.

"When she said she didn't like that plan, there was a new plan, and there was no argument," Stevens said. "And
I wasn't unhappy about it."

Catherine .was in charge of all of it, Stevens testified. She obtained the line of credit, maintained the checkbook
for their house-related expenses and received all of the bills. She paid them all, too, Stevens said. .

"She got all the bills and paid all the bills," he said.
FBI - Stevens- 2203
Yet Stevens himself demonstrated extensive knovyledge of how much money was going into the project. He asked
his old law school friend, George Reycraft, .to dissolve a trust worth about $SO~OOO to devote to the renovations.
He instructed his bookkeeper to open up a-bank account with $10,000, and he and his wife took out a line of
credit together. ~- -~ -,~ -

The trial, which began Sept. 22 with jUry selection, is likely to cqnclu.de Monday. The jury could begin
deliberations as soon as Tuesday. "

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Anchorag~ Daily News

Which.Stevens will jurors 'judge?


ARGUMENTS: Attorneys present
By ERIKA BOLSTAD and RICHARD MAUER
Anchorage Daily News
(10/2J/0820:35:23)

WASHINGTON - The man Alaskans have chosen to represent them in the U.S. Senate for 40 years was decried
I by prosecutors Tuesday as mean-spirited, sputtering liar who is so lacking in character th'at he'd blame anyone - .
including his wife - to avoid shouldering responsibility himself. •

Not so, countered defense attorney Brendan Sullivan: "They ask you ,to brand him a criminal, tarnish everything
he's done for 84 years, despite the fact the evidence is unrefuted that he's an honorable, tru~hful man."

Thus two, visions of Sen. Ted Stevens, 84, clashed-in sharp relief as a federal jury heard six hours of closing
arguments in his disclosure trial. Stevens, who's running for re-election, is charged in a seven-coun~ictment
of lying year after year about gifts ~nd benefits on his official Sel'1ate disclosure statements. ~e...

The central item is the renovation of his house in Girdwood from 2000 to 2001, in which'the oil-field service
company Veco, under chairman ~ill Allen, provided substantial labor and material.

But the government also brought in evidence of other'gifts from 1999 through 2006 from Allen, Veco, and friends
, B9b and Jeanie Penney and Bob ,Persons, owner of. t!'le Dou~,I~ M_usky re~taurant in Girdwood~, They include a
'powerful back-u'p ge"nerator, an outdoor gas range, an expensive massage chair, a puppy of sled-dog pedigree, a
stained glass window, furniture, tools and home repairs and improvements.

U.S. District Court Judge Emmet Sullivan said he will deliver about two hours of instructions to the jury this
morning before it retires for deliberations. Then, after a trial spanning nearly a month, the waiting begins.

Under court rules, prosecutors had two shots for their arguments, with the defense sandwiched in the middle.
Each'side'had three-hours'to"make its case. ' '-

GOOD FRIEND NAMED ALLEN

Joe Bottini, an assistant U.S. Attorney from Anchorage on loan to the Justice Department's Public Integrity
Section in its broa,d investigation of-public corruption in Alaska, began the government's case with a soft-spoken,
methodical rendition of its evidence. .-

Bottini re-introduced the players in the drama, leading with Allen.


FBI - Stevens-2204
"Ted Stevens had a good friend afld his name was Bill Allen," Bottini said. Stevens knew that Allen would give
him "hundreds of thousands of dollars of free benefits," Bottini said.

Bottini cut to a short au'dio clip -of Allen and P~rsons talking in a .wiretapped conversation.
- - . - -- -- - -- - - - - - - - -- - - -
-

"Ted gets hysterical when he has to spend his own money," Persons told Allen. "The flip side of it is, he can't,
really afford· to pay a bunch of money."

That's where's were Allen came in, Bottini said.

"Bill Allen was rich, Bill Allen was generous - Bill Allen was not hysterical about spending his own money/' Bottini
told the jury. .

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Th;: ca~e<st~r1;s in 1999, when Ste@, fearful of-a Y2K power failure, aSOAIIE~n to "hoqk up~-a generator.
In his t~timony, Stevens said he meant he wanted Allen to rent a smal! portable unit just for the period around
New Years Eve._ What he got was a generator that was lifted with a crane, installed in a permanent shed and
wired to the house with an automatic switch that started up' if the power went off -- a $6,OOO-plus set-up. The
next fall, when Veco began working on his addition, it moved the generator to the other side of the house and
put in a new transfer switch with double the rating.

,Stevens knew full well what he got, Bottini said, and never told Allen to get rid of it, or made an offer to pay for
it. Yet he never listed the generator as a gift. .

"He disclosed nothing because he didn't want anyone.to know," Bottini said. "Can you imagine what the press
would have done if he put it on that form? It would have been front-page news." The pressure frol1) the public
would have