Copyright 2008 AlaskaDispatch.com

Bill Allen, the oilman who remodeled U.S. Sen. Ted Stevens's house and is expected to testify against him at his trial starting Monday, has come under investigation for the second time in a year for allegedly sexually abusing teenage girls, Anchorage police confirmed to AlaskaDispatch.com on Wednesday.

Once a "Godfather" figure in Alaska's oil industry and a friend of Stevens's, Allen is under investigation for allegedly carrying on a sexual relationship with a teenage prostitute nine years ago, according to interviews with both police and the alleged victim. Late last year, Anchorage police reopened a separate teen-sex investigation against Allen but have since suspended that case.

A lawyer for Allen has denied the allegations against his client.

The claims threaten to taint the credibility of Allen, a star federal witness in the government's case against Stevens, who is accused of failing to disclose a quarter-million dollars in gifts he received from Allen and other friends. Lawyers defending Stevens have challenged federal prosecutors in recent weeks to turn over evidence related to any state criminal sex abuse or statutory rape investigations against Allen, according to a Sept. 9 court motion. In doing so, they are questioning whether the former oilman is receiving immunity from alleged sex crimes in return for his cooperation.

Allen has emerged as a central figure in a sweeping oil-political corruption scandal unfolding in Alaska. Last year, he pleaded guilty to bribery charges and agreed to help the Feds in their investigation in return for, among other things, a possibly reduced prison sentence and time to sell his oil-contracting firm, VECO Corp., which was purchased by a Denver-based firm  last year for $380 million. Allen's cooperation has already helped federal prosecutors score two bribery convictions against state lawmakers, and the government is likely to call him to testify against Stevens.

Jury selection for Stevens's trial begins Monday in a Washington, D.C., federal court.

In late July, Stevens was charged with seven counts alleging that he failed to report more than $250,000 in gifts on his Senate disclosure forms, the bulk of which, the Feds claim, resulted from a major renovation of his Girdwood, Alaska, home overseen by Allen and VECO workers. Prosecutors say Stevens did not pay for all of the project's costs. He has pleaded not guilty.

The trial comes as the 84-year-old senator -- the longest-serving Senate Republican in history -- is enmeshed in the toughest re-election campaign of his career, running for a seventh term against Anchorage Mayor Mark Begich, a Democrat. Meantime, national media have been fixated on Alaska since Gov. Sarah Palin joined Sen. John McCain as his vice-presidential running mate late last month. She's cast herself as an ethics reformist, vowing to clean up "good 'ol boy" politics in Washington.

The sex allegations dogging Allen are unrelated to Stevens's legal troubles. Still, criminal defense experts say the senator's lawyers could use the investigations to raise questions about Allen's credibility and any testimony he provides against Stevens. Federal prosecutors would argue back that Allen's problems have nothing to do with Stevens and should be kept from coming up in the trial.

"Prisons in America are populated by people who have been convicted by some pretty unsavory characters," said Ben Brafman, a well-known criminal defense lawyer based in New York. If the judge were to allow questioning of Allen about the sex investigations while on the witness stand, Brafman said, his lawyer might suggest he evoke his fifth-amendment privileges.

"The irony is that even if the allegations aren't true, there is no way to disprove them," Brafman said. "Either way, this is a person who comes off the witness stand who looks like damaged goods."

Stevens's lawyers and a spokeswoman at the U.S. Department of Justice declined interviews for this story.

Allegations could taint credibility