ANCHORAGE, Alaska (KTVA-CBS 11 News) - The two men many consider Alaska's corruption probe's commander and lieutenant received their prison terms October 28.

U.S. District Judge John Sedwick sentenced former VECO CEO Bill Allen to three years in prison and $750,000 in fines.

Former VECO Vice President Richard Smith, who was also deeply involved in the corruption scandal, was sentenced to 21-months in prison and a $10,000 fine.

Sedwick called both men organizers.

"Activity which would have corrupted the legislative process in the state of Alaska," Sedwick said. "A representative democracy such as in the one in which we live depends upon a legislative process which is not corrupt."

But the


Advertisement

judge said Smith's role was not as serious.

"Unlike Allen, however, Mr. Smith wasn't in a position where he would eventually gain great wealth," Sedwick said. "Mr. Smith was like most of us working for wages."

Before the judge handed down his sentence Allen addressed the court. He spoke for about 12 minutes taking full responsibility for his actions.

"I'd like to apologize to you, to the people here in Alaska," Allen said. "Instead of me really helping them, I've pushed them down. Really, I thought I was doing right, but again, I went over the line."

Smith also apologized for what he called his, "Deep regret and shame for the actions that I've been involved in, which hurt and disgraced my family and friends...Alaska."

Allen was the prosecution's star witness in Alaska's wide sweeping corruption probe. In 2007 he, and Smith, plead guilty to extortion, bribery and conspiracy charges.

Allen and Smith said they gave cash to several lawmakers, locally and in Alaska's congressional delegation. Those lawmakers include former state Rep. Pete Kott, former state Rep. Vic Kohring and former Sen. Ted Stevens. All three lawmakers were convicted of corruption charges. Stevens had the case against him dismissed earlier this year. Kott and Kohring are both out of prison while their convictions are reassessed because of accusations the government did not disclose all of their evidence.

The convicted felons reminded the court of their cooperation with those cases.

"So Your Honor I respectfully, go ahead and sentence me. But kind of remember that I tried. I done some good," Allen said.

Smith said, "Since the day I was first contacted I've made every effort to work with and be involved with the federal agencies...to amend for these actions."

Allen's witness competency has been called in to question multiple times because he has said payments to those lawmakers were not bribes. Much of the two-hour proceeding was spent on the difference in severity between a bribe and gratuity. Sedwick said the facts were ambiguous and he had to be lenient on that charge.

The government had asked Allen be sentenced to 46-months in prison, but later changed their request to 41-months. For Smith, the Feds wanted two years. The judge says Allen's 36-month and Smith's 21-month sentences are adequate because they take into account Allen and Smith's FBI cooperation years, while also fitting their crime's severity.

The judge gave Allen the maximum $750,000 fine saying it was "clearly appropriate." Sedwick said he would have given Allen a larger fine if the law allowed him to. Allen sold VECO to Denver based CH2M Hill for $463-million in 2007.

During Smith's sentencing federal prosecutors mentioned former state Senate President Ben Stevens by name. Until now federal documents have only referred to Stevens as "State Senator B," saying VECO gave him $240,000. Stevens has not been charged.

The mention of Stevens' name makes it appear as though this corruption probe may be far from over.

Allen and Smith did not say anything as they left the courtroom. Allen drove away with an entourage of people filling up three SUVs. Both men will not report to prison until it is determined where they will serve their time.

To contact the Newsroom, call 907-274-1111.

Comment Ground Rules