36 months and $750,000, for, according to former VECO CEO Bill Allen’s new hot shot lawyer George Terwilliger, Allen’s runaway passion for former Alaska Governor Frank Murkowski’s secretly negotiated Petroleum Profits Tax (PPT). Terwilliger suggested to US District Judge John Sedgwick that Allen’s passion clouded his judgment and got the better of him, so much so, that he bribed Alaska legislators.
Remember the beloved PPT? That was the industrious scheme concocted by Murkowski and The Oil Producers behind closed doors. Alaska’s 4th Estate failed to explain it. Your morning newspaper, the Anchorage Daily News, never once called the PPT a NET PROFITS TAX! Nor did the ADN ever fulfill their social and unwritten pact to educate the public on something so basic, yet so vital!
The net profits game was not unique to the oil business. Corporate film studios employed it as a way of dangling a carrot in front of aspiring, young Hollywood creative types. For decades, it was standard practice; studios would use creative net profits accounting practices to siphon profits from successful blockbuster films and then show on paper how much money they lost. 5% of nothing is still nothing. Promised net profits were just empty pipe dreams. The Federal Courts finally got involved and the net profits scheme became a nefarious thing of the past…at least in the film business.
In Frank Murkowski’s Alaska, The Producers dusted off and resurrected Hollywood’s net profits scheme and changed the name to the PPT. The PPT would forever tie Alaska’s primary revenue stream to the efficiencies of the oil producers while simultaneously incenting them to be inefficient; that is, the higher their costs (INEFFICIENCY) they could deduct, the less their royalty payments would be (INCENTIVE) and therefore the less revenue for the state of Alaska (INDUSTRIOUS SCHEME).
Despite the tandem of strong-handed lobbying from Governor Murkowski combined with Bill Allen’s bribery of state lawmakers, and Ted Stevens yet-to-be-indicted son, Ben, presiding over the senate, the Alaska Legislature barely passed HB 3001 (the PPT) on August 10, 2006. Murkowski signed the bill into law nine days later. But, just like in Hollywood, the FEDS got involved and uncovered the plot. And, given the money at stake-hundreds of millions; in fact billions of dollars would flow either into state coffers or inflate the already record-high Producers’ profits. Had the PPT not been thrown out, the promised net profits would have literally become empty pipe dreams for Alaskans.
Just eleven days after the PPT became law, Allen was with Republican Senator Fred Dyson heading to breakfast when they were confronted by the FBI. Allen claimed during his sentencing statement to Judge Sedwick that after listening to the damning tapes he immediately decided to quit drinking and cooperate with the FEDS. The next day, August 31, lawmakers’ offices in Juneau were raided by the FBI. Politics in Alaska forever changed.
It’s been a while since the federal courthouse busied itself with anything related to the Alaska Corrupt Bastards Club. Blame the Bush DOJ and the botched prosecution of the slam dunk trial of former Senator Ted Stevens. Since the last time Bill Allen passed through courthouse security, he hired an infamous new gun. George Terwilliger was George W. Bush’s key lawyer during the fraudulent Florida Recount following the 2000 election. Remember the Brooks Brothers faux riot??? Yep; an associate of the Bush Crime Family right here in Anchorage representing Bill Allen at his sentencing.
36 Months and $750,000…
That’s the price Bill Allen will pay for his orchestrating the Corrupt Bastards Club. Given the sentencing guidelines meted out by Judge Sedwick, 36 months was just 5 months shy of the maximum recommended by the federal government. $750,000 was, in fact, the maximum fine Sedwick could impose, and, according to Sedwick, he would’ve imposed a higher fine if he could have because Allen’s crimes were motivated by greed. And besides, that’s how neighbors do one another.
But, you know, according to Allen’s counsel, the amount of money involved in this case was only “lunch money” compared to the billions being spent on health care lobbying in Washington DC.
I’ve attended most of the CBC trials: Tom Anderson, Pete Kott and Vic Kohring. I listened and watched enough audio and video surveillance tapes of drunken, corrupt legislators jockeying for positions of favor (read ASS KISSING) with Mr. Allen to last me, oh, I don’t know…at least 36 months.
These trials have been nothing short of high drama and tragic entertainment. I laughed out loud at Pete Kott confusing Viagra with Ambien and punctuating every sentence with a boisterous Larry-the-Cable-Guy “Get ‘er DONE!” And his desire to be a prison warden in Barbados was irony at its finest. Watching Vic Kohring on trial made me want to just pack him a lunch and give him a sandwich. He always reminded me of that really big 8th grader that shaves and ought to be a senior. There were also things that surprised me. I caught myself feeling this strange and surprising grandfather-like affection and empathy for fallen oil-services tycoon, Bill Allen…the same Bill Allen who published the Anchorage Times-an honest diatribe in that they never pretended to be anything other than a right wing rag; a rag I passionately disagreed with.
Given Allen’s age, 72, his health, and his immediate accountability and cooperation with the federal prosecutors, I understand Judge Sedwick’s 36-month sentence. I have no idea how they come up with those guidelines. I do know it wasn’t the minimum sentence nor was it the maximum. I believe, however, it was probably a reasonable sentence-all things considered. Compared to the reality deficient and forever unaccountable Tom Anderson, Pete Kott and Vic Kohring, Bill Allen seemed saintly. AND…Bill Allen never swore to uphold the public trust-something that Judge Sedwick failed to mention in justification of his relatively light sentence. A conspiracy of this magnitude requires extensive corruption on both sides; the bribers-Bill Allen and his family, former VECO Vice President Rick Smith and the bribees-Kott, Kohring, Senator B, Bruce Weyhrauch, Beverly Masek and John Cowdery; it’s kind of like being single and cheating with someone who is married. Who made a promise and took a vow?
That matters. The unmarried party is still immoral, but the married person wreaks more havoc. Of course, both are corrupt. In this case, the unmarried adulterer is Bill Allen and Co. The married vow takers and promise breakers are our legislators that swore an oath to uphold the Alaska Constitution and the public trust.
These trials have been an ugly stain on Alaska’s government and oil industry. And, judging by the prosecution’s comments in court this past week, we aren’t yet through. Ben Stevens has been implicated in recordings but has not yet been indicted. Bruce Weyhrauch received a delay courtesy of the 9th circuit court. Alaska Congressman Don Young has paid massive attorney fees with his campaign trust. There are others and yet even more questions. What is going on with Jim Clark? Who is he cooperating with and implicating?
And, more than anything else, the thing that nags and gnaws at me is the damning audio tape of ConocoPhillips President Jim Bowles instructing Bill Allen to get the “…House to go ahead and gavel out and finish up and get them out of town…” at the very moment the PPT was in danger and facing tough opposition. To me, the CBC points upwards from Bill Allen. It leads to The Producers; ConocoPhillips, ExxonMobil and BP. It was The Producers who were full-court pressing Allen to do their dirty bidding.
As a result of the corrupted PPT, the Palin Administration proposed Alaska’s Clear and Equitable Share (ACES). Palin’s initial draft had many of the same problems as the PPT. It was a net profits tax with unlimited deductions-contradicting her campaign promise to replace the PPT with a gross profits tax. The ACES bill that Governor Palin signed into law on December 19, 2007 was completely remodeled and tweaked by key legislative Democrats; Senators Hollis French, Bill Wielechowski, and Kim Elton, along with Representatives Les Gara and Beth Kerttula worked long hours to insure ACES would balance “maximum benefit for Alaskans” with Producer investment incentives. As a result, the Owner-State of Alaska immediately began earning its fair share of its resource wealth. Ironically, those same Democratic Legislators that helped Palin pass marquee legislation became the target of her ire from the time she was on the campaign trail until the day she quit. The McCain Campaign sent the “truth squad” to Alaska to viciously attack her former allies as they tried to understand and unravel Troopergate.
The local right wing talk radio jocks that dominate Alaska’s public airwaves and the Oil Producers have been crying foul ever since:
“We’re taxing ourselves out of jobs!”
“Investment is drying up on the North Slope!”
“We’ll never get a gas line!”
“Alaska’s closed for business!”
“Last one to leave turn out the lights!”
“We’re growing government!”
“We’re chasing investment out of the state!”
“We must repeal ACES before it’s too late!”
Well, once again, the right wing fear mongers were caught LYING. We have had nearly two years under ACES and guess what? Not only did the sky not fall, but, according to the October 18, 2009 issue of Petroleum News, at least one producer, ConocoPhillips, is doing more than just fine under ACES:
Alaska oil and gas production makes up about 12 percent of ConocoPhillips’ worldwide output. In the first quarter of this year, Alaska operations earned the company $240 million, or 29 percent of its worldwide exploration and production income.
In the second quarter, ConocoPhillips had $725 million in E&P worldwide earnings: More than 55 percent of that, $404 million, came from its Alaska business.
I may be Just A Girl From Homer, but when 12% of your business accounts for 29% of your income, I’d say that part of your business-ALASKA-is doing pretty well! And when that same 12% of your business accounts for more than 55% of your earnings in the next quarter…well I’d say that’s a pretty spectacular trend-or as my pop likes to say, “better than a poke in the eye with a sharp stick”; especially given the worst worldwide recession since The Great Depression!
Make no mistake. These right wing radio talk jocks are nothing more than oil company shills. They aren’t interested in Alaska’s constitutional mandate; that Alaska’s resources be developed for the maximum benefit of the people. They sit there, day after day and pollute the public airwaves with their anti-Alaskan, misinformed, fear-mongering drivel. They push their GOP ideology and they’re hardly entertaining-shilling rarely is. They’ve basically morphed themselves into an interactive infomercial for the hard-line right-complete with callers. It reminds me of those fake half hour gold informercials.
The best negotiated deals are those that are mutually beneficial. ACES, clearly, is a win-win. It’s good for Alaska and it’s good for The Producers. Anyone who says different is either just a whore with oil dripping down their chin, or The Producers themselves. The truth and proof lie in the income statements.
Now…how long, if ever, till the FEDS raid The Producers’ downtown offices?