Thursday, July 06, 2006

Ben Stevens Withdraws From State Senate Race

Incumbent State Senator Ben Stevens (pictured at left), who's represented Senate District N (Southport-Sand Lake section of Anchorage) since 2001, officially withdrew from the race yesterday (July 5th). See reports from KTUU, the Anchorage Daily News, and the Alaska Report.

In his announcement, Senator Stevens attributed his decision primarily to a desire to spend more time with his family. He found the time spent as a senator, to include the special sessions that are becoming an annual occurrence, to be increasingly burdensome. He also cited the desire to be there in person as his kids enter the vulnerable teenage years.

In the letter announcing his decision, he made no reference to the financial and ethical questions which arose during his tenure, and graciously refrained from any reference to his checkered relationship with some media outlets, particularly Channel 2 News and, to a lesser degree, the Anchorage Daily News. Just as graciously, he refrained from preferentially endorsing either of the two remaining Republicans in the race, Reps. Norm Rokeberg and Lesil McGuire, merely stating that both would represent the district well. He also revealed no future political intentions.

Both Representatives Rokeberg and McGuire expressed some relief over the decision. Rokeberg described it as clarifying a cloud hanging over the issue, and McGuire was concerned about voters torn between two incumbents. They expect to get down to some serious one-on-one campaigning.

Background: Stevens, who is the son of Alaska's senior U.S. Senator Ted Stevens, was appointed in 2001 to replace Drue Pearce, who departed to take a job in Washington D.C. with the Department of the Interior. This appointment was in part a tribute to his deft mangement of the Special Olympics when it was held in Alaska. He ran for election unopposed in 2002. However, the close interface between his business and political interests, while not illegal, generated questions, criticism, and an unsuccessful recall effort by Ray Metcalfe, a former state lawmaker and the founder of the now-dormant Republican Moderate party. KTUU Channel 2 News was particularly, persistently, and almost obsessively critical of Stevens, inducing Stevens to lash out at News Director John Tracy on one occasion.

When contacted by the Anchorage Daily News, Ray Metcalfe, who filed the recall petition, said he will continue to pursue his criticism of Stevens. He contends that Stevens tried to undermine the Alaska Permanent Fund because of his consulting work for VECO Corp., an oil field services company. In 1999, VECO supported a campaign seeking voter permission to use Alaska Permanent Fund money for capital projects, an effort voters rejected.

If the Permanent Fund was used for government expenses, Metcalfe contends, there would be less pressure on Alaskans to obtain the highest possible payment for natural resources from companies that use them. He said Stevens had a conflict of interest by serving in the Senate at the same time as working as a consultant for the company.

And Metcalfe has latched on to Stevens like a pit bull latches on to a bone. On June 22nd, during a 2 1/2 hour hearing at the Alaska Public Offices Commission, Metcalfe laid out his argument that for years Ben Stevens has been accepting back door bribes through the cover of consulting fees and illicit payments. Both are felonies under Alaska state law. Metcalfe alleges that Steven's has been paid $923,507 over the years in payments through the processors, various kickbacks, and funneled through the Alaska Fisheries Marketing Board (AFMB) set up by his father, Senator Ted Stevens.

According to another story from the Alaska Report, after a second APOC hearing on June 28th, two $150 fines were imposed. One was for failing to report his chairmanship of the AFMB in 2003, and the other for failing to report his ownership of an Option (known across Alaska as "a secret option") to buy 25% of Adak Fisheries for only $500,000, in the years 2004 through 2006 (the latter being for the calendar year 2005). Claiming technicalities due to changes in the law, APOC did not penalize Stevens for not reporting the option in 2002 and 2003

In December of 2005, APOC fined Stevens $150 for failing to disclose his chairmanship of the AFMB (year not specified, but other than 2003). The AFMB is a marketing board that has doled out millions of federal dollars to fishing interests. Metcalfe outlined how over $9 million of the Alaska Fisheries Marketing Board's salmon allocations went to firms who have membership in groups or otherwise directly pay (or have paid) Ben Stevens for consulting or other services.

And it was on November 16, 2004 that Stevens wrote a $50,000 check (number 115, Wells Fargo bank account) to exercise the option. In doing so, he attached a "NOTICE OF EXERCISE OF OPTION - CONFIDENTIAL" letter to Aleutian Spray Fisheries and Kjetil Solberg, the owners of Adak Fisheries, LLC. Therein, Stevens claimed that if they do not want to adhere to the option to own 25% of the company, then they should have to pay him "the value of my ownership interest" which "is therefore $1,625,000." This was interpreted as weakening the arguments Stevens presented to APOC in December 2005 about how valueless that option was.

In the Confidential letter (obtained from APOC records, as filed on August 12, 2005) Stevens outlines his role. The second paragraph read: "As you know, the Option Agreement was entered into because the owners of Adak Fisheries, LLC were 'seeking to increase its value' and because they wanted to give me an incentive to use my 'skills to help increase the value of the Company.' Under the terms of the Option Agreement, I timely paid the required consideration for the Option. It should go without saying that I also thereafter greatly increased the value of Adak Fisheries, LLC through the strategy I developed and executed relating to pollock."

Adding to the furor was the fact that Ben Stevens' father, U.S. Senator Ted Stevens, then chairman of Appropriations, inserted a rider into the 2004 Omnibus Spending Bill granting to Adak an allocation of pollock, and tied it to a requirement that Adak Fisheries LLC construct a plant of over $50 million.

Another unresolved issue is the fact that SEMCO, the energy company on whose board he sits, gave $120,000 in stocks to Stevens. This was also unreported to APOC, and, so far, APOC has not acted on this allegation, although Ray Metcalfe may pursue this issue in the future. However, Ray Metcalfe is also in a campaign to become the Democratic nominee to face Don Young. He's running against Diane Benson, Todd Hyde, and Frank Vondersaar; most likely, Benson will win, with Metcalfe finishing a close second. Given all these financial questions, and the ethical issues raised, it is understandable that Ben Stevens might want to withdraw, not because he did anything feloniously illegal, but that these issues would have completely hijacked the campaign, leaving little opportunity to discuss other issues, such as the gas pipeline contract. The reaction of Reps. Rokeberg and McGuire indicates they might be relieved at not having to make ethics a campaign issue.

Analysis: I believe Ben Stevens is sincere when he cites family issues as a major factor in his decision to withdraw. However, he probably was not in the mood to have his name dragged through the mud over the remaining APOC issues, particularly with Ray Metcalfe relentlessly dogging him.

However, assuming that all remaining APOC issues are resolved nonprejudicially, I find it difficult to believe that Channel 2 News won't have Ben Stevens to "kick around" anymore. Ted Stevens is up for re-election in two years. Ted Stevens is getting old, and beginning to show his age in his articulation. Two years is plenty of time for Ben Stevens to prepare a campaign to replace Ted, should Ted decide to step down. I would not be surprised if Ted decides to step down in 2008 if Ben is ready to make a run. And if Ben Stevens resolves his APOC issues nonprejudicially, two years is plenty of time for most of the electorate to forget about them; only the "supervoters" would remember those issues.

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