Posts Tagged ‘Criminal Investigations Division’

Alaska Senator Ted Stevens Indicted; Department of Justice Makes a Statement

July 31, 2008

So, on Tuesday night, news broke that Ted Stevens (or “Uncle Ted” as he’s sometimes referred to in Alaska) (R-AK), who I love for his firey personality, but strong disagree with on many issues (pork barrel spending, his stances on abortion, to name a couple), was indicted for seven felony counts of making false statements on Senate financial disclosure reports between 1999 and 2006.  He is accused of concealing over $250,000 worth of house renovations and gifts from VECO Corp.  A copy of the indictment can be found here.

If convicted Stevens could face up to 5 years in prison for each count, but I doubt that a man of his importance would actually get that sentence (even his age could play a factor).

Representative Don Young (R-AK), is also taking some heat for fundraising involving VECO.

The founder and former CEO of VECO, Bill Allen, took a plea deal on his charges of bribing state lawmakers, and has cooperated with the FBI, which prompted the Stevens investigation.

Here are some quotes:

  • Stevens is “one of the most effective and honest legislators I have ever worked with.  He has worked diligently to serve Alaska and has fought to make life better for people in every region of our state.  I hope people will not rush to judgment and will let the judicial process work.  The process is based on being innocent until proven guilty.”  Representative Don Young (R-AK)
  • “It’s a sad day for him, us, but you know I believe in the American system of justice, and he’s presumed innocent.”  Senate Majority Leader Harry Reid (D-NV)
  • “The president has been working with Senator Stevens for many years, and he appreciates his strong leadership on key issues.  This is a legal matter that the Department of Justice is handling, and so we will not comment further on it.”  Dana Perino, White House press secretary
  • “All of us have times that we have to deal with that are tough.  I wish him the best.”  Senator John Warner (R-VA)
  • “I’ve known Ted Stevens for 28 years, and have always known him to be impeccably honest.”  Senator Arlen Specter (R-PA)

And here we have some longer statements.  First is the statement from Senator Ted Stevens:

Statement from Alaska Senator Ted Stevens
 

I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. Senator.
 
In accordance with Senate Republican Conference rules, I have temporarily relinquished my vice-chairmanship and ranking positions until I am absolved of these charges.
 
The impact of these charges on my family disturbs me greatly.
 
I am innocent of these charges and intend to prove that.

And here is the statement from Department of Justice, given by Matt Friedrich, acting attorney general of the Criminal Division:

Good afternoon. My name is Matt Friedrich, and I am the acting assistant attorney general for the Criminal Division. With me here today is Steve Tidwell, who is an executive assistant director at the Federal Bureau of Investigations [sic]. Also with me is Victor Song, who is the deputy chief of the Criminal Investigations Division of the Internal Revenue Service.

Earlier today, a federal grand jury here in the District of Columbia returned an indictment charging United States Senator Ted Stevens of Alaska with seven felony counts of making false statements.

The charges relate to false statements that Senator Stevens is alleged to have made on his mandatory financial disclosure forms filed for calendar years 1999 through 2006.

According to the indictment, as a member of the United States Senate, Senator Stevens was required to file financial disclosure forms with the secretary of the Senate. A primary purpose of such forms is to disclose, monitor and deter conflicts of interest and maintain public confidence in the United States Senate and its membership.

These forms, which are publicly available, require the person filing them to disclose, among other things, whether or not the filer had received any gifts, or had any liabilities or debts.

As to gifts, the filer was required to disclose gifts from any single source over a particular threshold amount that varied year by year. For example, between 2003 and 2006, that threshold amount was $305, such that anything over that amount was required to be disclosed.

As to liabilities, the filer was to — was required to disclose any liability or debt owed by the filer or his spouse or dependent children in an amount greater than $10,000, as well as the identity of the individual or entity to whom each debt was owed.

The indictment charges that while he was sitting as a United States senator between 1999 and 2006, Senator Stevens accepted gifts from a privately held company, known as VECO, its chief executive officer and others.

VECO was a [sic] oil field services company and operated on an international basis. VECO was one of the largest private employers in the state of Alaska.

The gifts Senator Stevens is alleged to have received include substantial amounts of material and labor, used in the renovation of a private residence which Senator Stevens and his wife own, located in the town of Girdwood, Alaska.

These renovations are alleged to include the addition of a new first floor with multiple bedrooms and a bathroom, as well as a finished full basement.

VECO contractors and employees performed a significant portion of these renovations. For example, VECO and its employees and contractors are alleged to have provided architectural designs for the renovation; assisted in lifting up the residence and installing a new first floor; installed electrical, plumbing, framing, heating and flooring materials; installed a first-floor wrap-around deck; installed a plastic roof between the first and second floor decks; installed a heat-tape system on the roof; and performed gutter repair and electrical work.

The indictment also alleges that Senator Stevens received other gifts from VECO and its CEO, including household goods, furniture, a new Viking gas range, a tool storage cabinet and an automobile exchange, in which Senator Stevens received a new vehicle worth far more than what he provided in exchange.

According to the indictment, the total amount of gifts that Senator Stevens is alleged to have received over the duration of the offense is greater than $250,000. Also according to the indictment, these items were not disclosed on Senator Stevens’ financial disclosure forms, which he filed under penalties of perjury, either as gifts or as liabilities, and further, that Senator Stevens did not reimburse or repay VECO or its chief executive officer for these items.

I would ask you to keep in mind a few final points before I close. First, let me remind you again that what I have described today are allegations which have been made in an indictment returned by a federal grand jury.

In terms of where we are now, procedurally, in this case, we are at the very beginning of the criminal process because an indictment has just been returned.

Like any other criminal defendant, Senator Stevens is presumed innocent unless and until he is proven guilty in a court of law.

Second, in terms of answering any questions that you may have about the indictment, I’m going to need to stick to the four corners of the indictment, and I will not be able to go beyond what the indictment alleges, in answering questions that you may have about the specifics of the charges announced today.

As you may know, in about 2004, federal law enforcement agencies began an investigation into public corruption in the state of Alaska.

The fact of this investigation became publicly known with the execution of search warrants at VECO and other locations in Alaska, in August of 2006.

To date, that investigation has resulted in seven convictions. Among those who have been convicted are Pete Kott, the former speaker of the Alaska House of Representatives; Bill Allen, the former CEO of VECO; and Richard Smith, a former vice president at VECO; William Babrick (ph), a former lobbyist in Anchorage; and Thomas Anderson, a former lobbyist — excuse me — and Thomas Anderson, a former Alaska state representative.

That investigation is continuing.

Finally, I would like to thank the team assigned to this investigation, which includes prosecutors from the public integrity section of the criminal division, as well as AUSAs, assistant United States attorneys from the Alaska U.S. attorney’s office.

It also includes from the FBI agents from the Anchorage field office and from IRS CID agents from their Seattle field office.

With that, I’m happy to take some questions.

QUESTION: Matt, if Senator Stevens is convicted, what’s the maximum penalty that he would face?

FRIEDRICH: You know, I know a lot of times when a department issues releases, they will issue a statutory maximum, which is taken by the statutory max per count and multiplying it by the number of counts. That is usually something grossly in excess of whatever any sentences that ultimately comes down. So I don’t — you can look that up, I don’t want to start trumpeting what the statutory max — max would be.  [It's 5 years per count.  7 x 5 would be 35 years.]

QUESTION: Why did the Justice Department go after disclosures as opposed to other statutes — the tax statute or gift ban statute? Why did you all go after disclosures?

FRIEDRICH: You know, in terms — I guess the best way to answer that, in terms of woulda, shoulda, coulda on other charges, again, as I alluded to, I really need to stick to what’s charged here in terms of the indictment.

The indictment is pretty detailed. I think if you take a look at it, it lays out pretty clearly what our basis is for what we brought.

QUESTION: A follow on that: Is there any kind of statute of limitation issue that dealt with what statutes you all went after in charging?

FRIEDRICH: We always need to pay attention to statute of limitations. Beyond that I’m not going to count it.

QUESTION: To put it another way, you could charge false statements. But in your press release, you alleged that he used his position on behalf of VECO, suggesting a quid pro quo. Can you help us square that?

FRIEDRICH: Let me refer you to paragraph 17 of the indictment, which alleges that at the same time that Senator Stevens was receiving these things of value — over that same time — he was also being solicited by VECO to do certain things, which he on occasion — which he or his staff on occasion did.

FRIEDRICH: The indictment does not allege a quid pro quo.

In the back. I’m sorry. In the red.

QUESTION: This is a sitting senator, and obviously it’s unprecedented to have a raid on his home. How far up the chain did you have in terms of the politics of indicting someone of this stature?

FRIEDRICH: I guess what I would say is, we followed the course that we follow internally in terms of getting indictments approved. Beyond that — beyond that, I’m not going to comment.

In the back. Yes, sir?

QUESTION: Can I ask a question, follow up (inaudible)? I know you have an IRS guy here. Why didn’t (ph) Stevens report these gifts as income. Since he wasn’t disclosing them on his financial disclosure form, why wouldn’t that be a tax violation if he didn’t do that?

FRIEDRICH: Let me answer that question this way. Without reference to this case, my understanding, as a general matter, gifts are not reportable — are not required to be reported as income on tax forms. Income and other things are, but not gifts.

QUESTION: (OFF-MIKE) as gifts, he wasn’t disclosing these.

(CROSSTALK)

FRIEDRICH: On his ethics — on his — according to the indictment, on his ethics forms, yes.

QUESTION: Did he report these on his tax returns? Like improvements to a house would be income, wouldn’t it?

FRIEDRICH: I’m not going to comment on the senator’s tax returns.

Yes?

QUESTION: Can you explain the difference between a quid pro quo and what’s alleged in the indictment?

FRIEDRICH: This indictment charges violations of the false statement statute, which 18 USC 1001. The bribery statute is found at 18 USC 201. And without, you know — again, bribery is not charged in this case, as I mentioned earlier. Bribery requires proof of a specific agreement of a quid pro quo of this for that. This indictment does not allege such an agreement.

QUESTION: Were there any discussions with Stevens or his lawyers about a possible plea deal?

FRIEDRICH: I’m not going to discuss — as a matter of policy, we wouldn’t discuss any such potential discussions. I wouldn’t read into that whether they have occurred or not. I simply can’t comment — can’t comment on it.

QUESTION: Matt, following that…

FRIEDRICH: Yes?

QUESTION: … has he made arrangements to turn himself in? What’s next?

FRIEDRICH: My understanding is he will be allowed to turn himself in. He will not be arrested.

QUESTION: Have arrangements been made for a court appearance at this point, do you know?

FRIEDRICH: That’ll be coming shortly.

QUESTION: Is he turning himself in, in D.C. or in Alaska?

FRIEDRICH: I’ll defer to the bureau on that.

TIDWELL: A summons will be issued, and it’ll be worked out, what is most convenient for everyone regarding that and regarding the initial court appearance.

QUESTION: Is he in D.C. now?

TIDWELL: I do not know if he is in D.C. now.

QUESTION: Do you know when and how he was informed by the government of the grand jury indictment?

TIDWELL: Yes. His attorney received a call earlier today. And I’ll leave it at that.

Any other questions? Yes?

QUESTION: Just, with the guidelines and the sentencing structure with someone of the senator’s age, if you could talk about how that works, if someone becomes, you know, too old to have to serve that kind of time, if he’s looking at five years under false statements?

TIDWELL: Ultimately, we are — you know, again, we are at the very beginning phase of the process to talk about sentencing. It isn’t something I really am really comfortable with.

I will say, generically, you know, ultimately that’s something that would be up to a sentencing court.

QUESTION: Can you say anything about whether the senator cooperated at all with this investigation?

TIDWELL: Again, I have no comment on that, one way or another. I would urge you not to read anything into that, one way or another. I simply can’t confirm or deny that either way.

QUESTION: Can you elaborate on what sort of cooperation of Bill Allen provided?

TIDWELL: Bill Allen — Bill Allen entered into a plea agreement. That plea agreement is publicly available to you. It’s a public record in Alaska. You can go and look at it and see for yourself what the terms of that plea agreement are. He is cooperating with the United States.

QUESTION: How long is the investigation going on?

TIDWELL: Is that — speaking of the global investigation, the federal agencies have been conducting in Alaska since about 2004, roughly.

QUESTION: Can I ask just one thing? In an election year, I wonder if you might address, just generally, whether or not the department takes special care or follows other particular procedures, in order to influence (ph) the outcome of an election, you know, given the public corruption (inaudible) in a presidential election year, just speaking generally?

TIDWELL: Let me say a few things in response to that.

One, when we bring cases as prosecutors, we bring cases based upon our evaluation of the facts and the law. And we bring cases when they are ready to be charged, and that’s what has happened here.

I would refer you, as a general matter, if you recall, Judge Mukasey issued guidance to federal prosecutors earlier this year in the form of a memo dealing with election year sensitivities.

And while I’m paraphrasing what the memo says, the gist of it is that politics should play no part — partisan politics should play no part either in what charges we bring or in things like, you know, the timing of an indictment or that type of thing.

That policy has been followed to the letter, in this case.

I really don’t have much to say at this point.  I think anybody who has this much pork barrel spending and this many pet projects on their record is asking for legal trouble.  When you try to give money to your district and companies in your district, bad things happen – intentionally or unintentionally.  Innocent until proven guilty, but the voters may not be saying this in the primary.  For now, I’ll hold off on commenting on the primary until some more details come out.

I hope the allegations are false (I never like seeing people commit crimes), but if they’re true, he has to be punished.

Done Ranting,

Ranting Republican
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