Northern Exposure

Hillary Clinton and other Democrats recently returned hefty campaign contributions after learning that top "bundler" Norman Hsu was a fugitive. Now Republicans on Capitol Hill are wrestling with how to handle their own embarrassment: Bill Allen, a former oil executive who pleaded guilty in May to bribery and extortion charges and is the central witness in a massive FBI probe in Alaska. Allen provided key testimony leading to last week's bribery conviction of former Alaska speaker of the House Peter Kott, one of a group of local lawmakers who dubbed themselves the "Corrupt Bastards Club." Allen, who served as Alaska's Bush-Cheney 2000 campaign-finance chairman, testified that he paid $4,000 per month in consulting fees to GOP Sen. Ted Stevens's son and subsidized remodeling on the senator's house. (Stevens's home was raided by the FBI in July; he has denied any wrongdoing.)

According to court documents, Allen also told the Feds that, beginning in 2004, he gave bonuses to executives of his oil-services firm, Veco, to reimburse them for donations to federal candidates—a violation of campaign-finance laws. The Center for Responsive Politics reports that Allen and other Veco execs have given more than $363,000 in federal contributions since then, nearly all of it to GOP lawmakers and President Bush. The National Republican Senatorial Committee, which received a total of $75,000 from Veco execs, confirmed to NEWSWEEK it has donated $25,000 it got directly from Allen to a veterans' charity; Stevens is donating $18,000 from Allen and another convicted co-conspirator to charity but is keeping, for now, more than $50,000 from other Veco contributors. U.S. Rep. Don Young returned $38,000 from Allen that covered the cost of an annual "Pig Roast" fund-raiser, but he isn't giving back $70,000 in direct donations from Allen and Veco execs. A spokesman for Young declined to explain, saying, "It would be inappropriate to comment on an ongoing investigation."

–Michael Isikoff and Tony Hopfinger

© 2007