A Titan in Trouble

The Stevens trial exposed the inner workings of Alaska's cozy connection with the oil industry. Many of Alaska's lawmakers—including Gov. Sarah Palin in 2002—counted on Bill Allen for campaign contributions. A larger-than-life figure, Allen pleaded guilty last year to bribing state lawmakers and was the star government witness in Stevens's trial, telling jurors that Stevens knew his company was flipping much of the bill when it remodeled the senator's Alaska home in 2000.

Governor Palin has sought to distance herself from the powers that be in the state Republican hierarchy—part of the reformer credentials that attracted McCain's interest in the first place. If she and her running mate prevail next week, Alaska may yet have a powerful defender in high places in Washington. But if, as the polls suggest, they fall short, Palin will return home to a state in distress from political as well as economic shocks. Alaska, flush with billions of dollars in oil-surplus tax revenue, has largely escaped the housing foreclosures and other financial failures that other states are experiencing. But crude prices have been falling rapidly, pulling down with them the oil taxes and fees that fund some 90 percent of state government.

The prospect of losing Alaska's most powerful advocate on Capitol Hill amid the country's market meltdown has some long-time residents bracing for a bust.

"This place within 24 months is going to be a wasteland with Ted Stevens's demise," says Don Mitchell, an attorney and Alaskan historian who detailed the early years of Stevens's career in two books. "The party is over."

© 2008