Sen. Stevens indicted

Sen. Ted Stevens (R-Alaska) was indicted by a federal grand jury Tuesday on seven felony counts for concealing more than $250,000 in gifts from an oil services company.

The news that the longest-serving Republican senator in history faced charges from an investigation into his relationship with the VECO Corp. roiled Capitol Hill, sent the Senate Republican Conference into damage control, and cast serious doubt that Stevens would be able to win a seventh full term this fall.

{mosads}Though the 28-page indictment alleges that Stevens accepted home improvements, cars and other gifts in return for political action, he is charged only with making false statements on financial disclosure forms between 2001 and 2006.

Stevens, 84, was chairman of the Senate Appropriations Committee from 1997 until 2005, except for an 18-month period in 2001 and 2002 when Democrats controlled the chamber.

The VECO investigation has already produced convictions of Alaska lawmakers, oil executives and a lobbyist. The FBI and IRS raided Stevens’s home in 2007.

Stevens released a statement saying he never “knowingly submitted a false disclosure form required by law as a U.S. senator.”

“The impact of these charges on my family disturbs me greatly,” Stevens said in the statement. “I am innocent of these charges and intend to prove that.”

Justice officials said Stevens would not be arrested, instead allowing him to turn himself in. Stevens’s lawyer received a call from Justice officials Tuesday morning saying that an indictment had been agreed upon by a federal grand jury in Washington.

Stevens said in his statement that he has temporarily resigned his vice chairmanship of the GOP Senate conference as well as his ranking positions on the Commerce, Science and Transportation Committee and the powerful Appropriations Defense subcommittee.

VECO is Stevens’s second-biggest campaign contributor, according to the Center for Responsive Politics, giving him roughly $88,000.

Stevens could face up to 35 years in prison, with each count of making a false statement bringing up to five years of jail time. It is highly unlikely Stevens will face the maximum penalty if convicted.

{mospagebreak}“It is a sweeping felony provision that prosecutors frequently employ against government officials with disclosure obligations when there are allegations of misconduct,” said Kenneth Gross, an ethics attorney at Skadden Arps Slate Meagher & Flom.

Stevens is alleged in the indictment to have received renovations to his Girdwood, Alaska, home, including a new first floor, a new garage, a new two-story wraparound deck and new plumbing and electrical wiring.

Stevens also received a Viking gas grill, furniture and other home goods, the indictment alleges. He received a 1999 Land Rover Discovery, valued at roughly $44,000, that same year in exchange for $5,000 and his 1964 Ford Mustang, valued at less than $20,000.

The indictment quotes e-mails from Stevens and VECO contractors, with the Alaska Republican often thanking those involved in the renovations and saying he was “really pleased with all you have done.”

{mosads}During this same period, VECO executives were soliciting help from Stevens for federal grants and funds. For example, the longtime senator helped the oil services company with international projects in Pakistan and Russia, grants from the National Science Foundation to a VECO subsidiary, and assistance with construction of a natural gas pipeline from Alaska’s North Slope.

But Justice’s indictment of Stevens does not allege bribery by VECO, instead saying the senator knowingly concealed gifts from the company.

“He was also being solicited by VECO to do certain things, which he on occasion —which he or his staff on occasion did,” said Matthew Friedrich, acting assistant attorney general for the Justice Department’s criminal division. “The indictment does not allege a quid pro quo.”

Stan Brand, a former general counsel to the House, said that would be much harder to prove. “That’s an evidentiary burden. It is much easier to show that he concealed the relationship and the receipt of gifts from public scrutiny.”

By listing the actions Stevens took that benefited VECO, the Justice Department was showing cause for why the senator concealed gifts from the company. But by not charging Stevens with bribery, prosecutors should have a less difficult case to make in court.

“You cannot use a lawmaker’s legislative acts against him in a trial. That’s the result of the Jefferson case,” said Brand, referring to the ongoing corruption trial of Rep. William Jefferson (D-La.).

Stevens is only the 11th senator to be indicted. The last was Sen. Kay Bailey Hutchison (R-Texas) in 1993 on five counts alleging misconduct while working as state treasurer and preparing for her Senate campaign. She was acquitted in 1994.

Three have ever been convicted and one pleaded guilty.

Republican senators learned of the news about Stevens during a political lunch held off the Capitol grounds, at the National Republican Senatorial Committee headquarters nearby. And Republicans avoided the press afterward, including Minority Leader Mitch McConnell (R-Ky.), who made a brief statement without taking questions.

“Let me just say that the Republican Conference, like you, just learned of this news,” a somber McConnell said. “We’ll no doubt have more to say about it later.”

{mospagebreak}The indictment thwarted Republican momentum on gas prices, the No. 1 issue facing voters, and added further turmoil in an already tough election year for the GOP. Republicans later scrapped an afternoon press conference on gas prices.

Sen. Lisa Murkowski (R-Alaska), who spoke with Stevens Tuesday, said she was “absolutely shocked” and “very saddened,” but said that the senator should not resign his Senate seat.

Stevens was under investigation by the Senate Ethics Committee. Chairwoman Barbara Boxer (D-Calif.) released a statement with Vice Chairman Sen. John Cornyn (R-Texas) deferring the matter to federal investigators.

A fixture in the Senate since 1968, Stevens was seeking a seventh term this year. He is known as a notorious earmarker, funneling millions back home for pet projects, including the infamous Bridge to Nowhere.

{mosads}Alaska Democrats released a statement calling on Stevens to resign.

Sen. Daniel Inouye (D-Hawaii), one of Stevens’s closest friends in the Senate, said he was not surprised by the indictment of the Alaska Republican since “he’s been under questioning for some time.”

Most senators were quick to reserve judgment, saying he is innocent until proven guilty.

White House spokesman Tony Fratto said that President Bush “appreciates Stevens’s strong leadership on key issues. This is a legal matter that the Department of Justice is handling and so we’ll have to decline to comment.”

Democratic Senatorial Campaign Committee Chairman Charles Schumer (N.Y.), who spent much of 2006 railing against Republican corruption in Washington, offered only a brief comment, telling reporters, “I feel bad for him and his family. That’s all I want to say today.”

 J. Taylor Rushing, Aaron Blake and Sam Youngman contributed to this article.

Click here to download a pdf of the indictment.