As the trial of Alaska's senior senator gets underway in Washington this week, prosecutors are expected to paint a portrait of the allegedly cozy relationship between Republican Ted Stevens and one key oil company. Though the government has not charged Stevens with bribery or corruption, how the senator allegedly helped the Alaska-based VECO oil services company win contracts and earmarks will be at the center of trial.
As early as 1999, prosecutors allege in court filings, Stevens and his staff worked closely with VECO executives -- particularly CEO Bill Allen, who has pleaded guilty in connection with the probe -- and lobbyists to facilitate government contracts.
Among the key issues was a longstanding proposal for a natural gas pipeline in Alaska heavily support by VECO and Stevens. Federal law established in 2004 created a two part process for the pipeline: the first, requiring Alaska to negotiate a contract with oil companies and the second, requiring the federal government to review the agreement and issue permits. On Feb. 21, 2006, then Gov. Frank Murkowski announced that Alaska had reached an agreement but needed legislative approval.
To push this forward, VECO allegedly asked Stevens for help. The government intends to introduce a series of intercepted phone calls during January and June 2006 between Stevens and Allen. In them, the government wrote in court filings, Stevens said he would "take action to accelerate and 'whittle down' the federal permitting and review process after the state legislature passed the gas pipeline legislation." And, it said, Stevens pledged to get the Federal Energy Regulatory Commission to give the green light.
That's exactly what Stevens did, according to prosecutors. On July 7, 2006 Stevens appeared before the Alaska Senate Energy Natural Resources Committee and asked legislators to pass Murkowski's natural gas bill. Three days later FERC issued a report urging the same thing. (This proposal ultimately failed and was criticized heavily by Gov. Sarah Palin, who ran in opposition to the government's coziness to Big Oil and ultimately passed a different natural gas plan after her election.)
The pipeline was hardly the only issue on VECO's agenda. The company turned to Stevens when it ran into trouble with the Pakistani government over its promise to allow a subsidiary to build a pipeline to a power generation plant near Karachi. According to court filings, in a 1999 letter Allen asked Stevens to see if the World Bank would send a representative to upcoming meetings. A few weeks later, Stevens wrote a letter to then-president of the World Bank James Wolfensohm and asked the World Bank to lift sanctions against Pakistan, according to prosecutors' court filings.
It also asked for help to win a $40 million grant from the National Science Foundation in 1999. The next year the company won a $27 million contract from NSF.