Key Witness Says He Never Billed Sen. Stevens for Renovations

CQ Politics.com | October 1, 2008

By Kathleen Hunter, CQ Staff2 hours, 14 minutes ago

The marquee witness in the federal corruption case against Sen. Ted Stevens testified Wednesday that he billed the senator for none of the labor or materials used to transform his small chalet into a two-story house.

Bill Allen, once a close friend of the Alaska Republican, testified that the company he used to head, VECO Corp., spearheaded the addition of a new first floor to what was then a basic A-frame cabin, as well as a number of supplemental upgrades — first- and second-floor decks, a garage, a new kitchen and a rooftop snow-melting system.

Allen said he never sent Stevens a bill — despite a written request for a bill from Stevens in 2002 — because another Stevens confidant advised him that he shouldn’t.

“Ted’s just covering his ass,” Allen quoted the other friend, Girdwood, Alaska, restaurateur Bob Persons, as telling him.

That conversation between Allen and Persons apparently was prompted by an Oct. 6, 2002, note from Stevens that prosecutors showed to the jury. In the note, Stevens wrote, “You owe me a bill … Friendship is one thing. Compliance with the ethics rules entirely different.”

Stevens cautioned Allen to “remember Torricelli,” a reference to former Sen. Robert G. Torricelli, D-N.J., who around that time was embroiled in a scandal involving illegal campaign contributions, and added “It just has to be done right.”

In that note, Stevens also said he had asked Persons, the owner of the Double Musky Inn, to talk to Allen.

It was in the conversation that followed the note that Persons, who Stevens had entrusted to oversee the renovation while he was in Washington, told Allen not to send a bill and that the request for an invoice was just for cover, Allen testified.

Allen testified that he also never billed Stevens after he received another written request for a bill from the senator Nov. 8 because of that conversation with Persons.

Prosecutors say Persons acted as a conduit between Stevens and Allen, whose employees were managing the day-to-day work on the Stevens’ house.

Allen said he “really didn’t want to” bill Stevens because he “wanted to help Ted.”

In the Nov. 8 e-mail, Stevens also thanked Allen for outdoor lighting that had recently been installed. Allen said VECO paid for the lighting.

“Many thanks for all you’ve done to make out lives easier and our home more enjoyable,” Stevens wrote. “The Christmas lights top it all.”

Shortly before noon, Allen began answering questions about services Stevens performed at VECO’s request - including writing to World Bank President James D. Wolfensohn in 1999 about a pipeline project in Pakistan - before, during and after the renovations at his home.

Wolfensohn has been named as a potential witness in the case. It is not clear which side wanted to call him.

Allen also testified that:

- He asked Stevens for help renewing a contract VECO had secured with the National Science Foundation

- Stevens traveled to Sakhalin Island in Russia in October of 1999 to attend a meeting about a proposed worker-training partnership that had piqued VECO’s interest and

- Allen in March 2006 enlisted Stevens’ help persuading state legislators to support then- Gov. Frank Murkowski’s plan to build the Alaska Natural Gas Pipeline.

Stevens is not accused of engaging in a quid quo pro with VECO or with anyone else. But prosecutors contend he was motivated to conceal gifts because he was afraid disclosure would arouse suspicion, given his efforts on VECO’s behalf.

Allen pleaded guilty in May 2007 to bribing as many as five state legislators. He is cooperating with the government in exchange for possible leniency at sentencing.

U.S. District Court Judge Emmet G. Sullivan instructed jurors that Stevens is not charged with any wrongdoing associated with his official work on behalf of VECO.

Help Stevens allegedly gave to VECO is expected be the focus of much of the rest of Allen’s testimony.

Three additional government witnesses, all FBI agents, are due to testify before the prosecution wraps up its case, probably Friday.

Improvements to the “Chalet” Both sides agree that before the renovation, the Stevenses had begun thinking about adding space to their Girdwood home.

Defense lawyers say Stevens paid $160,000, which he believed covered the entire cost of the addition, while prosecutors contend Stevens never paid a dime to VECO, which the government contends covered nearly $189,000 in materials and labor associated with the project.

Allen testified that Stevens first told him he was interested in expanding the house, which the senator calls “the chalet.”

Stevens wanted to jack the house up off its foundation and add a space underneath where his youngest daughter, Lily, and his grandchildren could stay. “It wasn’t going to be very fancy - just a room right underneath the cabin,” Allen said.

Allen said Stevens later told him his wife, Catherine Stevens, wanted to “put her fingerprints” on the home with a more elaborate addition. So Allen said he set up a meeting with Stevens and John Hess, an architect and engineer for VECO.

Hess testified earlier in the trial that he, Allen and Stevens met to discuss the renovation in the private back room of an Anchorage restaurant in the summer of 2000 and he later drew up the plans for the addition, which was completed in 2001.

Allen testified Stevens told him he had to pay for Hess’ services but never asked for a bill for Hess’ time and so Allen never sent one.

On the stand, Allen also discussed correspondence that he and the senator exchanged during the renovation. In one Sept. 24, 2000, e-mail, Stevens thanked Allen for his help in turning the house into a place where friends and family can stay over when the “weather’s bad, or the wine has been too plentiful.”

“You and Bob have been the spark plugs, and we’re very pleased with all you have done.” Stevens wrote.

Allen testified that it was clear to him Persons was the other person Stevens was referring to in the e-mail.

“You continue to amaze me the way you can keep so many balls in the air at one time … and I thank you for all you are doing on the house …. The plans now really please Catherine,” Stevens told Allen in a hand-written note dated Aug. 21, 2000, just as the renovations were about to begin.

Initial plans for the second-floor deck had to be re-worked, Allen said, because Catherine Stevens balked at the plans for a steel deck.

Allen also identified a picture of a bronze fish statue he said he and a group of lobbyists purchased and gave to Stevens. The government values the statue at $29,000 and contends Stevens never reported it. Allen said he, the senator’s son Ben and others later personally placed the statue on the chalet’s front porch.