Alaska Public Offices Commission: Move reverses an earlier decision on senator's failure to report income from clients
By RICHARD MAUER and LISA DEMER
Anchorage Daily News
January 10, 2007
Outgoing state Senate President Ben Stevens should be fined the maximum penalty of $10,170 for failing for three years to disclose the names and payments of six clients of one of his consulting firms, the staff of the Alaska Public Offices Commission has recommended.
According to an APOC investigation made public Tuesday, the clients, all in the fishing industry, paid a total of $392,500 over the three years to Advance North LLC, a company owned 50-50 by Stevens and Anchorage fisheries lobbyist and lawyer Trevor McCabe.
In a separate case, the commission staff also recommended Stevens be fined the maximum -- $630 -- for failing to disclose more than $70,000 in deferred compensation he received as a director of Semco Energy, the parent company of Anchorage natural gas utility Enstar.
Both cases will come for decision before the bipartisan commission at its regular meeting later this week.
Before the latest investigation, Stevens already was known to be well paid for consulting work. He has disclosed payments of more than $1 million from Alaska and Seattle businesses with interests before the state and federal governments over the last five years. Many of those companies have benefited from earmarks and legislation delivered by Stevens' father, U.S. Sen. Ted Stevens.
Many of the companies newly disclosed in the APOC investigation were also seeking assistance before Congress or the federal government, including two that wanted changes in the recently passed renewal of the Magnuson-Stevens Act.
Ben Stevens, R-Anchorage, has repeatedly refused to say what he did for any of the consulting money. He didn't return calls for comment placed to his home or his state office in Anchorage on Tuesday. In his response to the APOC on Dec. 27, Stevens wrote that he had done nothing wrong and that all his activities were properly reported.
Stevens' office was targeted in search warrants executed by the FBI last summer. More recently, federal subpoenas served on fishing interests in Alaska and Seattle have named Stevens, McCabe and Advance North as subjects of the massive federal investigation into corruption in the Alaska Legislature. McCabe is a former congressional aide to Ted Stevens.
The Advance North case before the commission reveals a new set of clients of Stevens that hadn't been disclosed before.
The case derived from a complaint by Ray Metcalfe, a former Republican state legislator and long a foe of Ben Stevens.
Metcalfe had heard from a former salmon fisherman, Victor Smith of Friday Harbor, Wash., that the Southeast Alaska Seiners Association of Juneau had hired Stevens in 2004. But Stevens never reported the group as a client.
The organization, representing an economically depressed fishery, was trying to get money from Congress to buy out some of the fleet so the remaining vessels could earn more money.
In a decision in September, the commission appeared to reject the idea that Stevens was delinquent in disclosing anything related to Advance North LLC. The decision applied long-standing APOC rules on corporate ownership to the relatively new business entity known as a limited liability company: "Because the ownership interest of the Stevens family (in Advance North LLC) is at or below 50 percent, Sen. Stevens is not required to disclose the clients of this business relationship."
"In doing so, we erred," Brooke Miles, the commission's executive director, said Tuesday. "We can admit it."
LLCs closely resemble partnerships, Miles said. And legislators in partnerships and professional corporations, like law firms, must disclose their clients. If the clients have a "substantial interest" in state policies, the legislators must report their fees as well.
The APOC investigation turned up the contracts and payments from the seiners' association and five other companies or individuals. Several of the deals, like the seiner contract, provide for increased fees based on congressional or federal action.
All the contracts had strict confidentiality clauses. They listed Stevens as president of Advance North. And some of the contracts disclosed that lobbyists would be hired as subcontractors, paid out of Advance North's fees.
Two of the clients were related Seattle companies: Global Seas LLC and Mt. Mitchell LLC. Mt. Mitchell is a former government research vessel and Global Seas is in the seafood and vessel business. Advance North was to look for university, government or private clients to lease or purchase the Mt. Mitchell.
For the first year of the deal, 2003, Advance North was paid a retainer of $8,000 a month. If Advance North was credited with selling the boat, it would be paid an additional fee: $500,000 if the sale price was $10 million, and 12 percent of the price if it was $11 million or more.
The Web site for Mt. Mitchell says the ship is still associated with Global. A spokesman for the companies didn't return a phone call.
McCabe bought Stevens' 50 percent share of Advance North on Oct. 1, 2005.
Two other Advance North clients were participants in the Community Development Quota Program: the Bristol Bay Economic Development Corp. and the Yukon Delta Fisheries Development Association. They each made monthly payments to Advance North of $5,000 from June 15, 2004, to Dec. 31, 2005, not counting travel and other expenses to be billed separately.
The federal CDQ program provides a percentage of the harvest of halibut, crab, pollock and other fish to nonprofits in 65 Bering Sea and Aleutian communities. Advance North was directed to improve the CDQ program through amendments to the Magnuson-Stevens Act. The contract also calls for Advance North to "develop strategies" for governmental actions and to find "new opportunities" for the CDQ groups.
The sixth client disclosed in the APOC investigation is Richard Powell of Kodiak, who asked Stevens and McCabe to help him sell two crab vessels and his catch quotas by, among other things, changing laws and regulations. Powell paid Advance North $90,000 over two years.
Stevens' income from Semco, Enstar's parent company, came to light in an April 28 Daily News story.
Stevens was paid $35,000 a year for sitting on Semco's board and another $2,000 for sitting on the corporation's budget and audit committee in 2005. Plus, he received 7,000 shares of stock. The stock was worth $38,600 when the shares were released to him in June 2006, according to a letter from Semco to Stevens that was part of the APOC investigation.
But the public wouldn't have known any of that based on what Stevens reported to the APOC. In his original report to APOC covering 2005, he stated he was on the Semco board and that he was a shareholder, but not that he earned money from the company. When APOC, reacting to the newspaper story, asked him to report any income from Semco, he faxed a single-page amendment to his financial report that stated he received income from Semco, but not the amount.
Stevens maintained that because he chose to defer the energy company compensation for tax reasons, he didn't receive any income in 2005 so had nothing to report.
But Miles, the APOC director, said Alaska law governing legislative disclosures broadly defines income as "anything of value" and that the deferred pay and stock clearly fall into that category.
Daily News reporter Richard Mauer can be reached at rmauer@adn.com or 257-4345. Daily News reporter Lisa Demer can be reached at 257-4390 or ldemer@adn.com.
