Real Estate Investments

Financial Struggles Prompted Stevens To Seek Out Developer For Investment Deal

According to a Los Angeles Times report, Stevens had struggled financially prior to 1997, when “he got serious about making money,” and sought out developer, Jonathan Rubini. Stevens asked his brother-in-law, William Bittner, to contact Anchorage real estate developer, and sometimes Bittner business partner, Jonathan Rubini for an investment opportunity. Stevens gave Rubini $50,000, with 7.7% interest, into JLS Properties. As the Los Angeles Times describes it, “the deal began in characteristic Rubini fashion, with the purchase of an $11-million collection of what he called “ragtag” properties, whose out-of-state owners wanted to unload. Rubini quickly resold several of the properties to pay down debt.”

JLS Properties retained an office park near the Anchorage airport and a two-story office building downtown. Within three years Stevens’ equity grew to about $250,000. [Senator's Way To Wealth Was Paved With Favors, Los Angeles Times, 12/17/2003]

Stevens Performed Favor For Business Partner

Developer Jon Rubini and partners, including Sen. Ted Stevens’ brother-in-law, William Bittner, bid on a $450 million contract in 2000 to upgrade, expand and rent out private base housing on Elmendorf Air Force Base. The contract was “a big reach for us,” said Rubini, far larger than anything the developer had work on before. Stevens stated that he “strongly supported” privatization of military housing. [Senator's Way To Wealth Was Paved With Favors, Los Angeles Times, 12/17/2003]

When developer Jon Rubini needed more time to prepare his bid to the Air Force, he sent the senator a copy of the request letter and stated: “I purposely CC’d Sen. Stevens to send a signal to the Air Force that we would raise the issue with the Alaska delegation if the Air Force acted unreasonably,” Rubini said. Rubini received a two week extension and was told he won the contract. However, in September 2000, just before the deal was finalized, the Air Force backed out citing that Rubini’s group. “lacked capacity and adequate financing.”

Rubini filed a formal protest, wrote to Stevens for help and even flew to Washington D.C. After Air Force officials refused to see him, he visited Stevens at his senate office and private home, where “they watched one of the presidential candidate debates between Al Gore and George W. Bush.”

Stevens decided to involve himself in Rubini getting the contract, stating: “My involvement with the Elmendorf project was motivated to ensure that the Air Force moved forward.” According to the Anchorage Daily News, Stevens called Air Force generals. “Clearly, a phone call from Sen. Stevens does not hurt,” Rubini said, referring to the senator’s contacts with the Air Force on his behalf.

The Los Angeles Times described Stevens’ position at the time as chairman of Appropriation and an ex officio member of its Military Construction Subcommittee. The chairman of that subcommittee, Conrad Burns, one of Stevens’ fishing buddies, wrote to the secretary of the Air Force, F. Whitten Peters, in October 2007 with a threat to take away money for the Elmendorf privatization, and he arranged for a similar letter to go to the Air Force from the chairman of the corresponding House committee.

After Rubini paired up with one of the other bidders, Hunt Building Corp., in December of 2000 the Air Force awarded the contract to Rubini and his new partner. [Senator's Way To Wealth Was Paved With Favors, Los Angeles Times, 12/17/2003]

Rubini Received Stevens’ Help While Developer Made Him A Millionaire

According to the Los Angeles Times, while Sen. Ted Stevens was helping Rubini win the Air Force contract for military housing efforts on Elmendorf, Rubini was making Stevens a millionaire. During that time, Rubini acquired 30 acres in midtown Anchorage with plans of constructing office buildings. Rubini said JLS had accrued equity in the properties already owned and could help with the new financing, although Rubini could have chosen any number of groups of fellow investors to make the deal happen. Two buildings were erected on the property, Centerpoint I and Centerpoint II.

According to Sen. Ted Stevens’ financial disclosure reports, his initial $50,000 in JLS increased to between $750,000 and $1.5 million by 2003. Currently, Centerpoint I provides office space to the Arctic Slope Regional Corp., which pays $6 million a year on a 20-year lease. The company’s executive says he was not aware of Stevens’ ownership in the building until after signing the lease, but that it still would not have affected the deal.

Arctic Slope Regional Corp, the largest native corporation, was created with Sen. Ted Stevens’ help by passing the Alaska Native Claims Settlement Act. The Los Angeles Times connected this native corporation, which makes a fortune providing oil field services, with the fact that Stevens is fighting to authorize drilling from the nearby Arctic National Wildlife Refuge, where Arctic Slope owns petroleum rights to 92,000 acres. And because Stevens helped pass legislation allowing for native corporations to receive no-bid contracts, Arctic Slope and another Native corporation landed a $2-billion Pentagon deal.

An Arctic Slope subsidiary has paid William Bittner, Sen. Ted Stevens’ brother-in-law, $120,000 since 2002 to lobby on appropriations and government contracts, the same appropriations and contracts Stevens oversees as chairman of the senate Appropriations Committee. [Senator's Way To Wealth Was Paved With Favors, Los Angeles Times, 12/17/2003]