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Alleged Alaska murder plot revealed in botched Ted Stevens corruption case report

Amanda Coyne
Aaron Jansen illustration

By now, most Alaskans have heard about Bill Allen, the former oil chief executive who turned federal witness against a slew of Alaska state and federal politicians, as well as his alleged predilection for teenage girls, including, but not limited to, Bambi Tyree.

When federal prosecutors decided to leverage Allen as their lead witness against state lawmakers, as well as the late U.S. Sen. Ted Stevens, they knew about the teenage sex allegations. Failure on the part of the Feds to disclose to defense lawyers what they knew was in part why one of the state's biggest political corruption scandals imploded and has resulted in proposed and temporary suspensions of two prosecutors who had lived and worked in Alaska (one of them, Joe Bottini, has been assisting in the high-profile militia case unfolding now in Anchorage's federal courthouse).

A report released Thursday by the U.S. Justice Department's Office of Professional Responsibility, the branch’s internal watchdog, illustrates that the failure of federal prosecutors and FBI agents to disclose information about those predilections was glaring, and that analysis takes up a large portion of the 672-page report.

Bill Allen plots to kill nephew?

But only mentioned briefly is another page-jumping allegation from Allen's past. This one, about an alleged scheme to murder, is detailed in a single sentence in the report, along with a footnote.

The sentence and footnote reference an alleged plot between Allen and his son, Mark Allen, to kill Dave Anderson, Bill's nephew and Mark's cousin. Anderson was the self-proclaimed foreman on the 2000 remodeling of Stevens's cabin in Girdwood, which Stevens was later indicted over for not disclosing VECO's work on the project, as is required by senators in their financial disclosures.

Although there were rumors of the plot, it was only briefly mentioned in Anchorage's federal court when former state lawmakers Vic Kohring and Pete Kott were on trial for corruption in fall 2007. The murder plot didn't come up during the Stevens trial, which took place in Washington, D.C., in the fall of 2008.

At least two defense lawyers involved in the corruption trials say they didn't have the murder plot information, and others who did either didn't have the full details or chose not to pursue it when questioning Allen, who was lead witness for the federal government in virtually everything surrounding the Alaska corruption probe.

Allen is the one-time chairman of VECO Corp., an oilfield services company that was bought up by Denver-based CH2M Hill after Allen started helping the government. He was asked about the murder plot of his nephew on the witness stand in 2007 when he was testifying against Kott and Kohring.

In testimony, Allen denied he planned to kill Anderson, however. He just wanted to kick “his ass,” he said.

Bob Bundy, Allen's lawyer at the time and a former U.S. Attorney for Alaska said in a 2007 interview: "Bill was very upset but he was just talking. People talk about a lot of crap, you know, when they're angry, and I would hope that people would never take seriously a lot of crap I said if I was recorded on tape."

But the plot seemed credible enough that the Justice Department’s Office of Professional Responsibility noted the alleged conspiracy in its new report: “There is evidence that Allen seriously considered having Anderson killed.”

A corresponding footnote points to an affidavit written by Special Agent Mary Beth Kepner, who headed up the FBI’s Alaska political corruption investigation and sat by the side of prosecutors during many of the trials. Mark Allen’s name is redacted in the footnote, but is included in this account for ease of readability. Here’s Kepner’s affidavit, as quoted in the footnote:

(Bill Allen) and (Mark Allen) were so angered by David Anderson’s extortion that the two discussed having Anderson killed. For instance on December 21, 2005, ALLEN and (Mark) discussed how Anderson would ‘get hurt’ and that the two need to get ‘an alibi’ for when it happened. Later interceptions, however, revealed that ALLEN and (Mark) appeared to have abandoned this scheme, largely because of Anderson’s poor state of health and their belief that Anderson would die of natural causes.

The affidavit was written for a federal judge on Aug. 29, 2006, to secure search warrants across Alaska, including for state lawmakers' and VECO's offices. The next day, Allen began secretly cooperating with the FBI.

Under the rules, however, federal prosecutors were not required to turn over the complete affidavit to defendants and their attorneys. In the cases of Kott and Kohring, their lawyers had limited information of the plot. Other lawyers may have had limited information, too.

'Hillbilly shit'

Bill Allen and his nephew Dave Anderson's relationship is a long, complicated one, and their feud, as Anderson once described it, is some “some hillbilly shit.”

Anderson says he was once his uncle’s right-hand-man, a trusted employee, and heavily involved in Allen’s pet political projects, including remodeling the Stevens cabin. But in mid 2004, he suddenly had a falling out with his uncle. Allen’s girlfriend left him and started dating Anderson. Allen fired Anderson from VECO and ordered him to leave Alaska, according to interviews with Anderson in 2007, as well as letters between Anderson and Allen’s lawyer in 2005.

Anderson said that except for a brief trip to New Mexico, he stayed in Anchorage as Allen continued to threaten him and his girlfriend -- Kirsten Deacon, daughter of a former state lawmaker.

A series of letters and other correspondence provided by Anderson showed the dispute reaching a boil in fall 2005. The documents also reveal that at least Anderson thought the Stevens project and other work he did for his uncle might raise questions and should be kept quiet. Anderson claimed he never blackmailed Allen about such issues. He was seeking only a proper severance for his 25 years at VECO, he recalled in 2007.

That’s not the way Allen saw it, however. And “Uncle Bill,” as he was known, was so enraged that he threatened Anderson repeatedly.

Anderson said in interviews that he feared for his life, and that Allen once threatened to “stomp me into a mud hole.”

In a fall 2007 interview with future Alaska Dispatch editors, he claimed Mark Allen, his cousin, had warned him years earlier that Anderson might "end up like one of those torsos" that had washed up on Anchorage's Cook Inlet shores. In 2003, remains of two women washed ashore in Anchorage. The cases remain unsolved today.

But even after talking to the FBI and federal prosecutors, Anderson didn’t know about his uncle's alleged plot to kill him until Alaska Dispatch editor Tony Hopfinger (then working as an independent reporter) told him in fall 2007 that he had heard of it through a source and wanted his reaction. The source, however, never shared Kepner’s affidavit with Hopfinger.

Anderson believed the allegation and was angry the FBI and federal prosecutors never told him his life was endangered.

On top of that, he was so enraged with the Feds over their refusal to give him and Deacon's father -- former lawmaker Jerry Ward who had off and on corruption allegations swirling around him over the year -- immunity in the sweeping corruption probe in exchange for Anderson’s testimony in the Stevens case that he wrote to the judge.

He claimed to the judge that he had been promised immunity (he said much the same in interviews in 2007 and 2008), when he had not, according to the Justice Department's Office of Professional Responsibility’s report.

Conspiracy to commit murder?

Until the release of the report, few knew if the alleged murder plot was true.

Seattle-based lawyer Sheryl McCloud, who took over as former Alaska House Speaker Pete Kott’s lawyer after a jury found him guilty of taking bribes from Allen in 2007 (a case that also later imploded), did not know of the murder plot.

Had she had such information, she might have argued that Allen was engaged in a conspiracy to commit murder, which if nothing else, is something she could have used to question Allen’s credibility as a government witness, she said.

Further, Allen's son, Mark, as well as his two other adult children, were cut loose from the federal investigation in return for their father's cooperation.

Mark Allen was neither implicated in the corruption investigation nor ever charged with allegedly plotting to kill Anderson, his cousin.

Kevin Fitzgerald, who represented former state Sen. John Cowdery on a corruption charge, also said that although he was generally aware of the allegation of a murder plot, he never saw the affidavit. If he had reviewed it, he could have “possibly” used the allegation as exculpatory or impeachable material, particularly since Allen had already denied the murder plot on the witness stand during Kott’s and Kohring’s trials.

“By virtue of that response, it invites further inquiry,” Fitzgerald said.

Steve Wells, an Anchorage-based defense lawyer who works on federal cases but wasn’t involved in the Alaska corruption probe, wonders if the FBI and/or federal prosecutors used the alleged murder plot to flip Allen so that he would turn against their targets -- Alaska’s politicians.

“Conspiracy to commit murder will put you in prison for life,” Wells said.

Amanda Coyne is the co-author of “Crude Awakening: Money, Mavericks and Mayhem in Alaska," which details Ted Stevens’ political rise and fall, including how the U.S. Justice Department cut corners during his trial. Contact her at amanda@alaskadispatch.com