Indictment Threatens Stevens's Alaskan Legacy

In early 1953, Ted Stevens and his wife at the time, Ann, were headed up the bumpy Alaska Highway in their overloaded Buick. Stevens, who was 29, had left Washington, D.C., to take a job with a Fairbanks law firm. But he wasn't there to kick back and enjoy the wilderness. Within six months of arriving in Alaska, the Harvard Law grad was appointed as U.S. Attorney in Fairbanks. And thus began an epic political adventure that would dramatically shape the landscape of his adopted state.

Over the course of a political career spanning 55 years, Stevens shut down gambling halls on the Last Frontier and helped the territory win its statehood. He shepherded a settlement that protected the ancestral lands of Alaska's native people and ushered in the state's 1970s oil boom. Stevens drafted complex laws governing the Bering Sea's prolific fisheries—and as a master of the Senate earmarking game, helped Alaska secure tens of billions of federal money, which brought many Eskimo villages into the modern era. At 84, he has spent nearly 40 years in the U.S. Senate—making him the longest-serving Republican in Congress's upper chamber.

Now the journey that began on that bumpy stretch of road may be coming to an end.

On Tuesday, a federal grand jury indicted Stevens on seven counts of failing to report more than $250,000 in improvements to his Girdwood, Alaska, home on his Senate disclosure forms, as required by law. He is the first sitting senator to come under indictment since 1993—a case arising from an ongoing federal investigation into political corruption in Alaska, the largest in the state's short history. Stevens has asserted his innocence, and reminded residents of his long record of service to the state.

So far, federal prosecutors have scored seven criminal convictions. Among them are three former state lawmakers, two former oil executives, a lobbyist and the chief of staff of former Alaska governor Frank Murkowski. U.S. Rep. Don Young, a Republican and the state's lone representative in the U.S. House, is reportedly under investigation, although no charges have been filed, and he denies any wrongdoing. The indictment comes as Stevens is fighting to hold onto his Senate seat amid the toughest re-election contest of his career.

Stevens's home renovation was overseen by Bill Allen, a gruff oilman who founded VECO Corp., an international oil contractor based in Alaska that is now owned by a Denver firm. Allen is at the center of the sweeping investigation.

In 2006, while the Alaska Legislature was debating raising taxes on the oil industry, the FBI secretly documented Allen and another VECO executive as they bribed key lawmakers in a scheme to influence the vote and keep the tax hike to a minimum. In pleading guilty to bribery charges last year, Allen said that he was trying to look out for his clients―ExxonMobil, BP and ConocoPhillips―which VECO depended on for contracts.

Stevens is accused of allowing Allen to pay for much of the remodeling and expansion of his home. Stevens and Allen had been friends for years; the two even own a racehorse together. According to several former politicians and friends who have known Allen over the years, he liked to do favors for his buddies. He bought them dinner. He took them on trips. He had his employees work on their property.

In 2000, Allen dispatched a crew of VECO employees to jack up Stevens's small, weather-beaten house―it was known as "Ted's cabin" among friends―and build a new floor beneath it. The Feds claim Stevens didn't pay all of the construction bills. He's also accused of accepting unreported gifts from Allen, including a Viking gas grill and a 1999 Land Rover Discovery, which Stevens got in return for giving Allen his 1964 Ford Mustang and $5,000.

At the time of the work, Stevens was at the peak of his political power, chairing the Senate Appropriations Committee in a Republican-controlled Senate and overseeing the allocation of billions of dollars of federal spending. Unlike other Alaska lawmakers snared by the VECO investigation, Stevens is not charged with taking bribes from Allen. But his indictment offers a possible explanation of why he allowed an oil company to remodel his abode.

Federal prosecutors claim the senator "received and accepted solicitations for multiple official actions." These actions included funding requests for international VECO projects and partnerships in such countries as Pakistan and Russia, requests for federal grants and contracts for VECO, and the senator's governmental sway to help the oil industry in its effort to construct a multibillion-dollar natural-gas pipeline in Alaska.

While Stevens argues he has done nothing wrong, there is no doubt that the charges have tarnished his reputation, particularly among a younger generation of Alaskans who have little idea of the role he played in developing their state. Whatever happens as the case moves forward, his imprint here has been enormous.

Alaska is celebrating its 50th anniversary of statehood this year, and it's been just over 40 years since wildcatters discovered the state's giant oil fields. Stevens was there from the start. In 1968, Alaska Gov. Wally Hickel, now 89 and a legend in his own right, appointed Stevens after the death of Alaska Sen. Bob Bartlett. "I appointed him not because he was a friend but because he was a survivor," Hickel says. "I wanted a young guy who could be back in Washington for the next 20 or 30 years so we could gain some seniority to get things done up here. And that's what he did for us."

To Alaskans, he was affectingly known as "Uncle Ted." His legacy is seen everywhere in Alaska, from runway lights in villages to military bases to fishing and maritime laws to the revamped Anchorage International Airport named in his honor.

In 2000, Stevens was named "Alaskan of the Century." And he's been cited by more than one historian as the most influential politician in all of Alaska history, besting William H. Seward, the U.S. secretary of State who spearheaded the purchase of Alaska from Russia in 1867. (Seward endured harsh criticism during the throes of the Alaska purchase, with some Americans viewing the Last Frontier as a remote wasteland not worth the $7 million price tag; they dubbed the deal "Seward's folly.")

"Seward may have gotten Alaska, but there was no person as involved and influential in what was to become of this place as Ted Stevens," says Don Mitchell, an Alaskan historian who detailed the early years of Stevens's career in two books. "He has been at the center of most of the major political events since Alaska's creation."

Stevens, who survived a plane crash that killed his first wife, Ann, and has since remarried to a lobbyist, was in a tough re-election race even before the investigation heated up. His likely opponent in the fall (assuming he beats back several fringe GOP challengers in the Aug. 26 primary) will be Democrat Mark Begich, the mayor of Anchorage. Begich is the son of Congressman Nick Begich, who died in a plane crash with U.S. House Majority Leader Hale Boggs in 1972. Begich led Stevens 50 percent to 41 percent, according to a Rasmussen poll released last week―a sounding taken before the indictment was issued. And he'll have to make the challenge without the benefit of the largesse that VECO and its employees usually contribute to his campaigns. The blend of oil and politics that helped Stevens refashion a wilderness in his image now threatens to leave a permanent stain.