Oil executive gets prison for bribery

ANCHORAGE, Alaska | The oil services executive at the center of a federal investigation of corruption in Alaska politics was sentenced Wednesday to three years in prison and fined $750,000.

Bill Allen, 72, testified on behalf of the government in three cases, including the trial of former U.S. Sen. Ted Stevens, Alaska Republican, whose charges were dismissed earlier this year when the Justice Department admitted it failed to turn over favorable evidence to Mr. Stevens’ defense team.

U.S. District Court Judge John Sedwick said Allen’s fine would have been higher if sentencing guidelines had allowed it. Allen’s prison sentence was revised downward because of his cooperation with prosecutors from the day he was confronted with evidence against him, and his acceptance of responsibility for the crime.

“Mr. Allen did the right thing by way of cooperation,” Judge Sedwick said.

However, the money that passed from Allen to state lawmakers harmed all Alaskans and threatened the Legislature as an institution, the judge said.

“Democracy doesn’t work when it’s corrupted,” Judge Sedwick said.

Allen’s trusted lieutenant, Rick Smith, a former VECO vice president, was sentenced to 21 months in prison and fined $10,000 for his role in bribing lawmakers.

The men pleaded guilty in May 2007 to bribery, conspiracy and conspiracy to impede the Internal Revenue Service. Their sentencing was delayed more than two years as they cooperated with federal prosecutors in cases against elected officials.

VECO Corp. was an oil-field services company that did millions of dollars in contracting work for oil producers, including project management, engineering, construction and maintenance. When Allen and Smith were charged, VECO had about 4,000 employees at projects around the world, with about half its business in Alaska.

Mr. Stevens was charged with lying on Senate forms about home renovations and gifts he received from wealthy friends. Allen testified he was the source, sending a VECO work crew to help change a modest A-frame cabin in Girdwood into a two-story home with wraparound decks, new electricity and plumbing.

Allen’s dealings with Mr. Stevens did not figure into his sentence. Instead, the terms were calculated on his role in bribing Alaska state lawmakers during petroleum tax deliberations in 2006. (Mr. Stevens’ corruption convictions were overturned in April after the Justice Department said prosecutors had mishandled evidence in the case.)

In phone taps and video images made at a hotel room rented by VECO in Juneau, the FBI recorded Allen promising favors to one key lawmaker for pushing favorable legislation and handing cash to another. With Allen’s testimony, former Alaska House Speaker Pete Kott and former state Rep. Vic Kohring, both Republicans, were convicted of accepting bribes. Both have been released from federal prison pending a review by Judge Sedwick as to whether their trials were tainted by prosecutors withholding evidence.