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Thursday, July 10, 2008
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Alaska State Senator Indicted on Public Corruption Charges

WASHINGTON John Cowdery, a current member of the Alaska state Senate, was indicted on charges arising out of a federal investigation into public corruption in the state of Alaska, Acting Assistant Attorney General Matthew Friedrich for the Criminal Division announced today.

A two-count indictment returned by a federal grand jury in Anchorage on July 9, 2008, charges Cowdery with one count of bribery and one count of conspiracy. The indictment alleges that Cowdery and his co-conspirators, including Bill J. Allen, the former chief executive officer of VECO Corporation, and Richard L. Smith, VECO’s former vice president, corruptly offered and agreed to give financial benefits to another state legislator (State Senator A) to influence and reward State Senator A in exchange for State Senator A agreeing to perform official acts as a member of the Alaska State Legislature.

The indictment specifically alleges that VECO Corporation, which at the time was a multinational oil services corporation, had a significant financial interest in contracts with oil producers in Alaska and, consequently, supported certain oil and gas legislation pending in the Alaska state legislature in 2006. The indictment further alleges that, in exchange for $25,000 – characterized as political campaign contributions – Cowdery, Allen, Smith and others sought an agreement with State Senator A that would require State Senator A to vote in favor of the oil and gas legislation favored by VECO. Cowdery and the alleged co-conspirators agreed to this plan, according to the indictment, through a series of telephone calls and in-person meetings.

If convicted, Cowdery faces a maximum penalty of 10 years in prison on the bribery count and a maximum penalty of five years in prison on the conspiracy count, as well as a maximum $250,000 fine for each count.

An indictment is merely an accusation and defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.

To date, there have been seven criminal convictions arising out of the ongoing investigation into public corruption in the state of Alaska. Thomas T. Anderson, a former elected member of the Alaska House of Representatives, was convicted in July 2007 and sentenced to five years in prison for extortion, conspiracy, bribery and money laundering for soliciting and receiving money from an FBI confidential source in exchange for agreeing to perform official acts to further a business interest represented by the source. Peter Kott, a former Speaker of the Alaska House of Representatives, was convicted in September 2007 and sentenced to six years in prison for extortion, bribery and conspiracy. Victor H. Kohring, a former elected member of the Alaska House of Representatives, was convicted at trial in November 2007 for attempted extortion, bribery and conspiracy, and was sentenced to three and a half years in prison. Four other individuals, including Allen and Smith, have pleaded guilty to felony public corruption charges.

This case is being prosecuted by Trial Attorneys Nicholas A. Marsh and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, headed by Chief William M. Welch II, and Assistant U.S. Attorneys Joseph W. Bottini and James A. Goeke from the District of Alaska. The ongoing investigation is being led by the FBI and the Internal Revenue Service-Criminal Investigation.