CONSULTING WORK: He will pay top amount for another case, APOC decides.
By LISA DEMER
Anchorage Daily News
January 12, 2007
The Alaska Public Offices Commission on Thursday agreed to fine outgoing Senate President Ben Stevens $5,000, less than half the maximum, for failing to disclose clients of his consulting firm to the watchdog agency.
In a separate case against Stevens, APOC approved the maximum penalty of $630 for Stevens' failure to report more than $70,000 in compensation from Semco Energy, the parent company of Anchorage natural gas utility Enstar.
Both cases arose from complaints brought by Ray Metcalfe, a former Republican state legislator and frequent critic of Stevens.
Legislators must report their finances to APOC so that the public can learn who is paying them and how much. While Stevens has disclosed more than $1 million in consulting income in the past five years, his filings left out other significant sources of income. APOC's investigation found that Stevens failed for three years to report names and payments of six clients of his consulting firm, Advance North LLC. The clients, all in the fishing industry, paid Advance North a total of $392,500.
The commission's staff members had proposed the highest possible fine: $10,170, or $10 a day for every day he failed to report the information. That maximum fine hasn't changed since the reporting laws were first put in place 30 years ago, according to Brooke Miles, the commission's executive director.
Advance North LLC is a limited- liability company that was owned 50-50 by Stevens and Trevor McCabe, an Anchorage fisheries lobbyist and lawyer who used to work as an aide to Stevens' father, U.S. Sen. Ted Stevens. McCabe bought Stevens' share Oct. 1, 2005. Some of the companies in the APOC complaint sought assistance before Congress or the federal government, including two that wanted changes in the recently passed renewal of the Magnuson-Stevens Act.
Stevens didn't appear at the meeting. He sent letters to the commission in which he said he didn't think he had to list the clients, or the nearly $400,000 they paid him, because he didn't have a "controlling interest" in the firm.
He reported his ownership of the firm every year since it was created in 2003 and APOC never asked him to reveal more, he said. That changed after Metcalfe's complaints.
In another complaint involving Advance North that was filed against Stevens in 2005, APOC issued a decision that said, "Because the ownership interest of the Stevens family is at or below 50 percent, Senator Stevens is not required to disclose the clients of this business relationship."
The commission staff made a mistake in its reasoning but not in its conclusion in that matter, Miles said. The case was over whether Stevens had to disclose his partner, McCabe. APOC correctly ruled that he did not have to do so but should have specified that it was because McCabe was not a family member, not because Stevens didn't hold a majority interest, said Chris Ellingson, APOC assistant director.
That decision was issued Sept. 12, 2006, long after all the reports at issue were filed.
State law on disclosures doesn't mention limited-liability companies, a relatively new type of business in Alaska, but that shouldn't allow "an end run around the provisions of that law," assistant attorney general Jan DeYoung told the commission. She said the law needed to be changed.
Anyway, the form that Stevens has filed year after year is clear, APOC Chairman Larry Wood said.
It specifies that legislators must report sources of income for limited-liability companies if the amount is more than $5,000. They also must reveal the amount if the client had state business.
But commissioner Claire VanSciver Hall argued to give Stevens a break by dropping the fine to $5,000, as the commission staff had itself been confused.
"I have a little bit of sympathy for Sen. Stevens," she said.
Commissioner John Dapcevich argued for the maximum fine because Stevens has a history of failing to provide the information on his finances. The commission needs to be tougher on sophisticated politicians, he said during a break. But in the end, he and the other four commission members voted for the $5,000 penalty.
Regarding Semco, the Port Huron, Mich.-based company that owns Enstar, Stevens maintained that he didn't have to reveal his compensation, because he had elected to defer it. After a Daily News story revealed the arrangement, APOC asked him to review his finance statements. He did, and on May 18, 2006, he faxed over a single-page amendment that said he was paid by Semco but didn't list the amount.
Miles said she calculated the $630 fine at $10 a day from the time the report was due to when he sent over the amendment. The commission decided to tell Stevens that he must still report the amount of the compensation and if he doesn't, there will be an additional fine.
Metcalfe tried during the meeting to force Wood to recuse himself from voting on the Stevens cases. Metcalfe argued that Wood, who is assistant general counsel for Alyeska Pipeline Service Co., couldn't fairly consider the issue because Stevens also has been paid as a consultant for Veco, the oil field service company.
"I find something horribly wrong with that," Metcalfe said.
But Wood said he didn't see a conflict, and other commissioners said they thought he could handle the cases fairly.
The fines against Stevens are "too little, too late," Metcalfe said after the meeting. "The horse is out of the barn. In fact, it got away."
• $5,000: For failing to disclose clients of his firm Advance North LLC over three years.
• $630: For failing to reveal more than $70,000 in compensation in 2005 from Semco Energy, the parent company of natural gas utility Enstar. He also must provide to APOC the amount of the compensation, even if it is deferred, or face additional fines.
