Wednesday, October 1, 2008

Live from the Ted Stevens Trial--Day Eight

October 1, 2008

Washington, D.C.--He has slowed down and clearly seen better days, but Bill Allen can still pack a punch.

The former CEO of an international oil-services contracting firm turned felon and cooperating witness shook up the trial of U.S. Sen. Ted Stevens today with a simple statement he quoted from Stevens' watchdog on a home remodeling project.

"Aw Bill, don't worry about getting a bill. Ted's just covering his ass."

Allen said that he was quoting Stevens' friend Bob Persons, who came to see Allen after the then-head of VECO Corporation got a note from the Senator in 2002 asking Allen to bill him for renovations done at Stevens' chalet in the ski town of Girdwood, Alaska.

The note from the veteran Senator was consistent with earlier notes that he sent asking to be billed over the work VECO did on the house over an eight-year period that the federal government has alleged that Stevens took for free and never reported as required.

This handwritten missive on Senate stationery, although, carried a dash of history with it:

Dear Bill--

When I think of the many ways in which you make my life easier and more enjoyable, I
lose count!

Thanks for all the work on the chalet. You owe me a bill--remember Torricelli, my friend.
Friendship is one thing--compliance with the ethics rules entirely different. I asked Bob P
to talk with you about this so don't get PO'd at him--it's just has to be done right….It just
has to be done right.

Hope to see you soon.

My best


Allen didn't understand the "Torricelli" reference at the time, but Stevens knew what he was talking about. The Senate Ethics Committee admonished Sen. Robert Torricelli, D.-N.J., in 2002 for accepting and failing to disclose expensive gifts from a campaign contributor, and Torricelli then dropped his re-election bid. (Torricelli announced his withdrawal, oddly enough, precisely six years ago today.)

But any understanding Allen had that Stevens wanted to pay for VECO's extensive work evaporated when Bob Persons, the Senator's close friend and designated monitor of the remodeling, came to see Allen shortly after he got this note. Allen testified that Persons said that Stevens didn't mean what he said in the note, and Allen should forget about actually billing the Senator for the work Allen had directed VECO to do. (Allen immediately apologized for using the word "ass" in court.)

The question of whether Stevens' failure to pay for the approximately $200,000 in free work the government has alleged VECO did on Stevens' house is more the result of Allen's overzealousness or Stevens' deceit is at the heart of the case. Prosecutors charge that VECO did $50,000 worth of that work shortly before Stevens sent the "Torricelli" note and Bob Persons allegedly told Allen that Stevens wanted Allen to ignore it.

Testifying for the second day of what will be at least three days and may go longer, Allen started the story of VECO's involvement with Ted Stevens' chalet with an account of a conversation in 1999 during one of their frequent plane rides together. Stevens told Allen in 1999 that the Senator wanted to expand his official residence in Girdwood so that his daughter could bring her friends there to ski.

Allen told Stevens that VECO could help with the project, and so began VECO's big role for the next eight years in remodeling, repairing, and maintaining that home.Allen described how the scope of work changed over time from a simple expansion of the house after Stevens told him that his wife Catherine had gotten involved.

Allen detailed how VECO provided for free at Stevens' chalet plumbing, electrical, and lighting work as well as the moving and rewiring of a VECO-supplied generator. The prosecution introduced into evidence a number of e-mail messages from Ted Stevens to show his close attention to the progress of the remodeling project.

Even after the renovations were done in 2002, Allen told the jury that he had repeatedly sent out VECO employees to the chalet to do maintenance and repair work on items such as the boiler, the "Insta-Hot" water-heating devices, and heat tape system.

The long-time chief of VECO—which Allen sold last year to CH2M Hill—also described various things Stevens had done for Allen as a Senator. Those helpful acts included leveraging the government of Pakistan to allow the payment of a dividend VECO on an investment the company had made in a pipeline in that country. Stevens also assisted on VECO's rebidding for a National Science Foundation contract. Allen said that Stevens had also helped with VECO's efforts to get the Alaska legislature to adopt petroleum taxes set to the liking of the Big Three oil producers, Allen's main clients in Alaska.

The jury will presumably rely a lot of their reading of Allen as a person in deciding whether the essential truth of this case is that Allen gave Stevens a number of things Stevens didn't want or whether Stevens hid his receipt of things he got for free.

The Allen the jury saw is a man who looks older than his 71 years. He—like Sen. Stevens—wears earphones to help him hear what is said in court, and he talks slowly and frequently asks questions to be repeated. An odd moment came this morning when the prosecutor questioning him put a document in front of him and Allen searched his pockets for his glasses before figuring that he was wearing them already.

Allen is an admitted corruptor of lawmakers. He described today how he bribed a number of Alaska state legislators to get them to support the industry-friendly version of petroleum taxes he favored, and he faces jailtime likely to be at least nine years. (Allen didn't say that one lawmaker he has admitted bribing is Ben Stevens—Ted Stevens' son and the former President of the Alaska State Senate—because the judge has accepted the defense's argument that such an identification would tend to inflame this jury against Ted Stevens.)

On the witness stand, however, Allen seems neither sinister nor slick, much less the personification of evil you might imagine from the crimes he has admitted committing. Given Allen's mild manner, humble background, and disability-affected speech, jurors might well be wondering how this slow-talking old man ever built from scratch an international contracting company with more than 4,000 employees.

It's worth considering, however, that some would rate Allen's rise to multi-national corporate kingpin as even more improbable than Stevens' ascent to Senate powerhouse. Allen was a high-school drop-out, while Stevens was a graduate of UCLA and Harvard Law School.

Jurors might also wonder how the CEO of a global industry titan could ever find the time to attend so closely to the personal affairs of a friend's home more than 40 miles from company headquarters. Although the value of all the things VECO gave to Stevens in the home renovation were chump change—less than a rounding error—to a corporation with close to $1 billion in annual revenues, the CEO did devote many hours to one house.

Allen left the Alaska observers buzzing by his reference in testimony to a female legislator that he has told the FBI he has paid money. Lists of future indictees in the burgeoning Alaska public corruption scandal have not typically included women.The trial ended early today when the judge announced the need to accommodate a juror—presumably a reference to some medical or family problem that should be resolved soon.

Testimony resumes tomorrow with Allen on the stand. The jury will hear tapes of conversations between Stevens and Allen made by government agents. At least one of those tapes was made after the FBI confronted Allen and convinced him to cooperate with the investigation, so Allen presumably was under orders to try to get Stevens to incriminate himself.

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