VECO chief pleads guilty in Alaska corruption case

By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - The chief executive and part owner of Alaska's largest oil-field services company and one of his vice presidents pleaded guilty on Monday to charges that they tried to bribe Alaska legislators to secure favorable state oil policies.

VECO Corp. Chief Executive Bill Allen and Richard Smith, vice president for community affairs and government relations, pleaded guilty to charges of bribery, extortion and conspiracy.

If convicted on all counts, each face as much as 20 years in prison and fines of $750,000.

The officials entered their guilty pleas in federal court in Anchorage on Monday after reaching plea agreements last week.

Arrested last Friday in Juneau were a current state legislator, Rep. Vic Kohring, and two former legislators -- Rep. Bruce Weyhrauch and former House Speaker Pete Kott. All three Republicans were charged with seeking money and jobs from Anchorage-based VECO in exchange for pushing the company's preferred version of an oil-tax bill.

If convicted on all charges, the legislators each could face as maximum of 70 years in prison and fines of up to $1 million.

"I own your ass," Allen told Kott, the former house speaker, according to the indictment released last Friday.

Allen and Smith admitted that they paid more than $400,000 in cash and benefits to lawmakers, including $243,250 over five years in so-called "consulting" fees to one state senator who never actually performed any consulting services outside his legislative office, according to documents filed in court.

"Two corporate executives have admitted to bribing several Alaskan lawmakers with hundreds of thousands of dollars in illegal benefits in exchange for official acts being taken on their behalf," Assistant Attorney General Alice Fisher said in a U.S. Justice Department statement.

"We will not only pursue corrupt public officials, but also individuals like Bill Allen and Richard Smith who venture to fill the coffers of our officials with corrupt payments in exchange for favors," Kenneth Kaiser, assistant director of the FBI's criminal investigative division, said in the Justice Department statement.

The offices of Anchorage-based VECO and six legislators were searched by the FBI last August and September in the probe. The lawmakers targeted by the search included former Senate President Ben Stevens, an Anchorage Republican and the son of U.S. Senator Ted Stevens.

The younger Stevens reported in state financial disclosure documents that he was paid consulting fees by VECO, but he did not describe the work performed.

The investigation is ongoing, Justice Department officials said.

At the state capitol in Juneau Monday, current House Speaker John Harris, a Valdez Republican, said the investigation had cast a pall over the legislature.

"I think we as a group here do not condone actions on behalf of legislators that cast a bad light on the institution," he said at a news conference.