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From the Alaska Bar Rag: How did Ben Stevens skate?

Cliff Groh

Editor's Note: Anchorage attorney and writer Cliff Groh is a columnist for the Alaska Bar Rag, the official quarterly publication for the Last Frontier's lawyers. Groh submitted this piece to the Alaska Bar Rag several hours before the news broke that former Alaska State President Ben Stevens (R-Anchorage) would not face charges in the federal investigation into public corruption in the Great Land.

Judging by what has happened in court, Ben Stevens might argue that he was an honest man wrongly dragged into the Last Frontier’s public corruption scandals.

After all, the man who only a half dozen years ago seemed set to be the next Alaska Governor or U.S. Senator was the only state legislator in 2006 whose offices were searched by the FBI who did NOT become either a criminal defendant or a cooperating witness.

But you have to wonder.

Accounts of the actions of Ben Stevens in the seafood industry as a consultant, lobbyist, investor, and member of a federally funded non-profit board while his father Ted was in the U.S. Senate read like textbooks on conflict of interest. While continuing to deny wrongdoing, Ben Stevens was by his own account under investigation by four federal agencies in 2007.

Yet the eight-year-old federal investigation into Alaska public corruption has not produced a charge against Ben Stevens, and I will eat my baseball cap if he is prosecuted in that probe. [Update: Several hours after this column was submitted to the Alaska Bar Rag, the Anchorage Daily News reported that the Department of Justice has advised former Alaska State Senate President Ben Stevens that the ex-lawmaker will not face charges in the federal investigation into public corruption in the 49th State.]

Why didn’t that dog bark?

We must clear substantial underbrush in answering this question. Understand that nothing in this analysis is based on inside information from decision-makers within the federal government. Recognize that nothing written here is intended to accuse anyone of committing a crime. Ignore the controversy stirred by Ben Stevens getting more than $715,000 for three years of part-time work as chief executive of the 2001 Special Olympics World Winter Games. Set aside any surprise over the fact that he served four years on the Select Committee on Legislative Ethics.

Let’s skip any sense of regret or Schadenfreude about this obviously intelligent and hard-working man’s meteoric career in business and public office, folks, and just focus as lawyers on how Ben Stevens escaped criminal charges.

It is not enough to whistle the Creedence Clearwater Revival song lyric “I ain’t no senator’s son.” Whatever protection (as well as career promotion) was afforded by having Ted Stevens as a father seemed to be over by 2008, when the iconic U.S. Senator got charged in a case that generated guilty verdicts on seven felonies before imploding less than six months later.

Nor does it work to suggest — as some observers have — that Ben Stevens made his own deal with the feds to give him immunity from prosecution. It’s not just that no evidence exists of such an agreement—there appears to be nothing that the former Anchorage Republican lawmaker ever gave the Justice Department to make such a deal plausible.

No, Ben Stevens’ avoidance of prosecution in the “Polar PEN” probe seems to stem from a combination of luck, prudence, and hiding in plain sight.

Ben Stevens caught a big break when the Justice Department did not include him in the first wave of defendants charged in May of 2007 with crimes associated with VECO executives’ corruption of state legislators over oil-tax legislation debated the previous year. This omission might have been caused in part by the feds seeing the potential prosecution of Ben Stevens as a bargaining chip they could play later in the negotiations with his father.

Yet time did not turn out to be kind to the federal investigation into Alaska public corruption. The feds charged Ted Stevens without charging Ben Stevens, and the probe’s fortunes soured quickly after the jury returned guilty verdicts against Ted Stevens in October of 2008. The Ted Stevens prosecution collapsed in April of 2009 in the wake of revelations of failures to provide discovery, putting the government employees best informed about “Polar PEN” under investigation themselves. Additional disclosures have dented the credibility of Allen and Smith, two of the prosecution’s key witnesses in previous trials. Last year’s U.S. Supreme Court decision in Skilling v. U.S. sharply pruned the scope of the honest services fraud statute, a favorite weapon wielded by federal prosecutors in public corruption cases that was used against half of the 12 defendants charged in the “Polar PEN” probe.

The prosecutors might well have perceived additional problems with charging Ben Stevens even back when the feds were flying high in 2007, however. The combination of what appears to be his relative invisibility on incriminating tapes and his extensive financial disclosures may have saved him.

Ben Stevens received almost a quarter of a million dollars in fees from VECO while he was in the State Senate and also took positions as a legislator on oil taxes that VECO wanted him to take, but those facts do not by themselves constitute a crime. What was going on in Ben Stevens’ mind is where the action is in prosecuting him, as it often is in public corruption cases. (That’s also true in the broader category of white-collar crime cases, like that of his father.)

Prosecutors have found that the best way to show that a defendant in a public corruption case has criminal intent is by playing tapes that show him saying and/or doing things that make him look guilty. All the defendants that juries have returned guilty verdicts against in the Alaska public corruption cases have had damaging tapes of them played in front of the jury.

Tapes tend to trump other evidence. As one former federal prosecutor observed, the government attorneys in the “Polar PEN” cases sometimes seemed primed merely to walk into court and push “PLAY,” and the feds might have thought they didn’t have enough incriminating tapes on Ben Stevens to go forward.

Unlike other legislators convicted in the probe, Ben Stevens might not have frequented the infamous VECO-rented Suite 604 in Juneau’s Baranof Hotel that the FBI bugged to such effect. Whether this conduct flows from a sensible desire to stay away from that “Animal House” atmosphere or from the family needs of a father of four, Ben Stevens’ apparent lack of a starring role in the FBI’s greatest hits has served him well.

Aside from whatever the more than 17,000 conversations the feds intercepted in the “Polar PEN” probe may show about Ben Stevens, there is another problem the feds have in prosecuting him on offenses involving either VECO or fisheries. That problem is the fact that the former State Senator apparently disclosed all the income he collected for consulting and/or lobbying that he was legally required to disclose. You might think his conduct was unseemly and unsavory, but it’s likely that Ben Stevens would say that he is just a hard-working businessman who laid bare his income as the law required, both when he served as a federal lobbyist and later when he served as a state legislator.

As to all that money from VECO that came in to the legislator when his work product may look minimal or even non-existent, Ben Stevens might well say that he thought he was on retainer — a retainer that allowed Bill Allen to call Ben Stevens about work for VECO anytime 24 hours a day, seven days a week. Ben Stevens might add that it was not his problem that Allen seemed to call him so infrequently to work on matters such as advice on salvaging vessels.

Observers might point to the $983,807.66 in fees that Ben Stevens reported receiving for business services and/or management services from VECO and fishing interests alone during the five full calendar years he served as a legislator in comparison to the relatively small amounts involved in the cases that sent other lawmakers to prison. The sheer amount of money, however, is not all that matters.

A common thread in the cases against the state legislators convicted at trial in the “Polar PEN” probe was what juries saw as clumsy attempts to conceal benefits: a bogus flooring invoice submitted by former Rep. Pete Kott (R-Eagle River); a request to hide help on a credit card balance by former Rep. Vic Kohring (R-Wasilla); a phony Website in the case of former Rep. Tom Anderson (R-Anchorage). The contemporaneous cover-ups helped the juries find the guilty intent. (Reversals on appeal of the convictions of Kott and Kohring have led to re-trials being scheduled for late this year.)

With Ben Stevens, on the other hand, there appeared to be no subterfuge — all the income seems to have been reported. Although paper trails are often seen as trouble, a particular kind of paper trail — one shorn of detailed descriptions of tasks performed or time spent working — appears to have helped keep Ben Stevens out of trouble. The system could not handle that hiding in plain sight.

You might think that the story of Ben Stevens is a prime Alaska example of the maxim of columnist Michael Kinsley to the effect that the real scandal is not what’s illegal — it’s what’s legal. You might also think that not prosecuting Ben Stevens after getting Allen and Smith to plead guilty to bribing him might pose a particular public relations problem for the Department of Justice, but such a result would be neither illegal nor unprecedented. One well-known irony that involved verdicts by juries rather than the exercise of prosecutorial discretion comes from the notorious Teapot Dome scandal of the 1920s. Albert Fall was convicted for taking a bribe from oilman Edward Doheny while serving as Secretary of Interior, but Doheny was acquitted of the charge of bribing Fall.

Cliff Groh has reported on Alaska's political corruption scandal and covered Ted Stevens' trial at his blog, alaskacorruption.blogspot.com, where this commentary first appeared. Conversations with numerous people — including Anchorage lawyers Mark Regan and George Freeman — have sharpened the author’s thinking on this column’s subject. Groh is a lifelong Alaskan and attorney with a private practice in Anchorage. Groh worked as a prosecutor for the Alaska Department of Law, and he has conducted jury trials in Anchorage, Unalaska, St. Paul, Sitka and Sand Point. He has also served as the Special Assistant to the Commissioner of Revenue, where he worked successfully for the revision of oil taxes enacted in 1989 that raised taxes on the Prudhoe Bay and Kuparuk fields. He was the principal legislative staff member when the Permanent Fund Dividend was created. He is conducting research for a book on public corruption in Alaska.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch. Alaska Dispatch welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com.