Alaska Dispatch

For former oil executives Bill Allen and Rick Smith, the new year won't start with good fortune but with prison time, the result of getting caught cheating Alaskans out of the honest work of their elected officials.

On Tuesday, Smith must turn himself in at "camp cupcake" in Oregon, while Allen is headed to Terminal Island in California. Their new lives will include bed and curfew checks, unremarkable food, fraternity-like camaraderie, and the chance to learn a new trade in work camp. More on this to come, but first let's recap how we got to this point:

The downfall of Allen and Smith -- former executives of the defunct oilfield services company VECO Corp., stems from federal investigators going after Alaska politicians, lobbyists and businessmen for bribery, money laundering and conspiracy crimes, with links to prison projects, re-election campaigns and efforts to purchase legislative votes to keep taxes low on the state's oil industry. Among those charged in the investigation were the two oilmen, a former governor's chief of staff, six former state politicians, and Ted Stevens, once the longest serving Republican in the U.S. Senate.

Allen and Smith, who pleaded guilty to bribery and doing favors for Alaska politicians, helped secure some of the feds' 11 convictions by allowing their phone calls to be recorded and taking the witness stand against several of their former friends and associates. As a result, they'll spend less time behind bars than the sum of their years cooperating with investigators.

But with a good-guy vs. bad-guy saga, the government's investigation has run into trouble over the past year. Stevens managed to turn the tables when federal prosecutors botched their handling of the evidence in his trial, including testimony from Allen. In the end, Stevens' convictions were set aside. Meantime, two other convicted defendants -- former state Reps. Vic Kohring and Pete Kott - are out of prison pending a review of whether they received fair trials.

And the piece de resistance for the accused schemers who have felt jilted by the legal system? Justice Department lawyers who went after these guys are now themselves under criminal investigation for prosecutorial misconduct.

If politics makes for strange bedfellows, make no mistake: federal prison does, too, as Smith will find out. The very same movers and shakers who once rubbed elbows in Juneau have already crossed paths at Sheridan Federal Correctional Institute in Oregon. Tom Anderson, a former state representative, was settled in at Sheridan by the time Kott arrived for his stay in 2008. The two even shared a room together, Kott said in an interview last week.

Sheridan is also home to a CIA agent-turned-Russian spy, as well as -- and fitting for Alaska -- a guy dubbed the "Spam King." Not the canned-meat product Spam associated with Alaska, but Internet spam. But forget sidling up to the likes of Rapper Marion "Suge" Knight; though he once graced the halls of Sheridan, his tour of duty there has come and gone.

The minimum-security men's work camp at Sheridan is designed to look like a college campus, but Kott says it feels more like military barracks. Inmates share doorless cubicles, four men to a room, and lights must be out by 10 p.m. That will be a departure from the long nights Smith was used to spending at the Baranof Hotel in Juneau with lawmakers, or with friends at The Petroleum Club in Anchorage.

It's not all bad, though. Kott describes Sheridan as a place where friends are made easily. A lot of guys like to spend their evenings watching sports, or shows like "CSI," "Dancing with the Stars," and "America's Got Talent."

But if you screw up and miss a bed check, access to the prized TV rooms is yanked, Kott says. As for Sheridan's predictable and uninspired cuisine, Kott rates it a five or six on a scale of 10. Smith can look forward to hamburger Wednesdays, chicken Thursdays, and something Mexican -- burritos or enchiladas -- on Saturdays.

Since Sheridan's a work camp, Smith will also need to get a job. On the inside there aren't a lot of options, and none pay well. Kott chose to work three short shifts a week cleaning the visitor's room, earning a whopping $2.08 per month. It kept his weekdays free to work out and spend time making leather purses and belts. Other jobs, like working in the power plant or the commissary, pay better -- $150 to $180 a month -- but require longer hours. Smith's in his 60s, so there's no telling if he'll want to take on the long shifts. Money earned can be used to buy retail goods like sweat suits, hats, gloves, shaving cream and razors, foil-sealed salmon, potato chips, candy bars, cereal, and aspirin and Tylenol.

Smith has 22 months to serve, but Kott suspects he could be out much sooner. Between good time and credit for any drug and alcohol programs he may enter, which earn inmates a year off their sentence, Kott thinks Smith could be out within the year. If so, that would amount to less than the nearly year and half of a 72-month sentence Kott himself has already served. (Kott's waiting to see if his case will be tossed due to the allegations of prosecutorial misconduct.)

As for Allen, he's headed to Terminal Island in California, a low-security male facility near Los Angeles. Once home to Al Capone, Charles Manson, Timothy Leary and G. Gordon Liddy of Watergate fame, Allen was assigned to Terminal Island because it's staffed and equipped to manage his health needs, including a pacemaker, according to the Bureau of Prisons.

Kott used to be close friends with Allen and Smith. Yet he says he doesn't hold any grudges against them for selling him out to the feds. Still, the sentencing disparities are a bone of contention. "Collectively they got less than I did. Either they got too little or I got too much," he said. And while the sentences are matters for the court to answer, other questions nag at Kott about Allen and why he cooperated with the government.

"I'd like to have 30 minutes alone with Allen," Kott says.

Contact Jill Burke at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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