Oil, Money and Politics on Display at Stevens Trial

Sept. 21, 2008— -- The government's case against Republican Sen. Ted Stevens, got underway Monday in Washington D.C. with jury selection, and could reveal details about politics in Alaska and connections between an oil company and Alaska's senior senator.

Stevens, who is in the middle of a re-election campaign, was hit with a seven-count indictment on July 29 that accused him of lying on financial disclosure forms he was required to file with the U.S. Senate and concealing things of value he received from the oil services firm Veco and company CEO Bill Allen, who a personal friend of the 84-year-old Stevens.

Allen and former Veco vice president of community affairs and government relations Richard L. Smith pleaded guilty in May 2007 to providing more than $400,000 in corrupt payments to public officials from the state of Alaska.

Stevens, who is the longest-serving Republican in the Senate, arrived at the courthouse just before 9 a.m.

The pool of 150 potential jurors filled out questionnaires designed to give them the opportunity to disclose any conflicts of interest or associations with potential witnesses listed by the judge. That list includes four U.S. Senators: Orrin Hatch, R-Utah, Daniel Inouye, D-Hawaii, Ted Kennedy, D-Mass. and Patrick Leahy, D-Vt., as well as former Secretary of State Colin Powell.

Among other items, Stevens is accused of concealing $250,000 worth of gifts and renovations to his Girdwood, Alaska, home that were allegedly paid for by Veco.

The government alleges that Veco sought assistance from Stevens to obtain funding for oil projects including international projects in Pakistan and Russia and the establishment of a natural gas pipeline from Alaska's North Slope. Veco was acquired by global engineering firm CH2M Hill in September 2007.

Stevens' lawyers asked for a speedy trial so the senator could potentially clear his name before the November elections. The trial is expected to last three to four weeks.

At the time of his indictment, Stevens said in a statement, "I have never knowingly submitted a false disclosure form required by law as a U.S. senator. ... I am innocent of these charges and intend to prove that."

Stevens' defense team is expected to assert that Stevens did nothing wrong and seek to question the reliability of Allen's memory after he suffered a major head injury in a 2001 motorcycle accident when he was not wearing a helmet.

Stevens' defense already has lost a pre-trial battle, however -- a bid to get the case reassigned to a judge in Alaska.

Aside from the allegation that Stevens accepted the renovations to his house, the government claims Stevens received additional things of value, including a $44,000 1999 Land Rover Discovery that Stevens exchanged with Allen for a 1964 Mustang and $5,000.

According to court documents, the government also alleges Stevens never claimed the followings gifts allegedly given to him by unidentified individuals: "a $2,695 massage chair, from Person A ... a $3,200 hand-designed, hand-constructed stained glass window, built to specifications provided by the defendant and his spouse, but paid for by Person B and given to Stevens in 2001. Neither were reported on his 2001 Financial Disclosure Form … and … a sled dog, valued at approximately $1,000, given to the defendant by Person B in 2003, which the defendant misrepresented on his 2003 Financial Disclosure Form as a $250 gift from an Alaskan nonprofit charitable organization."

In court proceedings this week, the government also referenced a $29,000 fish statue that was given to the senator, defense lawyers have said this was not relevant and was meant to be in in a library bearing Stevens' name. The prosecution noted the statue was on the porch of the senator's home.

Judge Emmett Sullivan has also ruled that the government can present evidence relating to real estate deals Stevens allegedly made in Florida that he also did not report on his Senate financial reports.

In court papers filed by the government, the prosecution noted, "At trial, the United States will seek to introduce evidence that, between 2001 and 2003, Stevens was intimately involved in a Florida real estate transaction with another personal friend. After an initial investment of only $5,000 by Stevens, Stevens' friend sold his real estate interest only six months later, with an eventual gross profit to Stevens of more than $100,000."

The government has proposed a total of more than 1,000 exhibits that could be submitted into evidence at trial.

The government's case is expected to rely on financial statements and records of Stevens as well e-mails and intercepted conversations recorded by the FBI between Stevens and Allen.

The government likely also will attempt to show that Stevens knew he did not accurately file the financial forms and was concerned about individuals who were called to testify before the grand jury in the investigation.

Court documents filed by the prosecution revealed e-mails that Stevens sent to a witness, identified in the documents as Person A, who was called before the grand jury. In an Aug. 14 court filing, the government noted that "by mid-May 2007, Stevens learned that Person A had been subpoenaed to testify before a grand jury in D.C. On May 17, 2007, Stevens sent Person A two e-mails that discussed Person A's upcoming grand jury testimony. In the first e-mail, Stevens told Person A that 'I hope we can work something out to make sure you aren't led astray on this occasion.' In the second, Stevens was more explicit: 'don't answer questions you don't KNOW the answers to.'"

The statewide corruption investigation has also tarnished Stevens' son, Ben, a state senator. The FBI searched Ben Stevens' state offices in August 2006, though the younger Stevens has not been charged with a crime and has said he did nothing wrong.

Stemming from the Veco investigation, there is an ongoing FBI-Justice Department investigation into public corruption in the state of Alaska that has resulted in eight convictions to date -- with three outstanding cases, including the senator's.

The other cases involve John Cowdery, a current member of the Alaska state senate, who was indicted on July 10 and is also awaiting trial (no trial date has been set yet); and Bruce Weyrauch, an attorney and member of the Alaska house from 2002 to January 2007, who was indicted in May 2007.