Posted by: shannynmoore | October 30, 2009

Pipe Dreams: Bill Allen, The Corrupt PPT and ACES From ASHES

fbi_veco-barbados-12536 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). Pipeline Bribe

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. barbados-corrupt-bastards-cap 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.pete_kott_trial

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? 

vic_kohringThat 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!”BP

“Investment is drying up on the North Slope!”

“We’ll never get a gas line!” 

“Alaska’s closed for business!”cplogo_redblack

“Last one to leave turn out the lights!”

“We’re growing government!” ExxonMobil

“We’re chasing investment out of the state!”

“We must repeal ACES before it’s too late!”

“SOCIALISTS!”

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.

FBI WarningThe 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?


Responses

  1. Don’t forget APRN.

    For many, many years they were on VECO’s payroll in the form of underwriting.

    APRN management was very cosy with BIll and his friends, including Carl, Ed, Ted and Joe.

    Former ARCO flak Susan Reed used to be on the BOD of KAKM until a job was created for her as the the GM at KSKA.

    No doubt KTUU and the ADN deserve their fair share of criticism for missing this story, but to be fair you should include APRN as well.

    Due to inept management, they too missed the biggest story in Alaska.

  2. Excellent piece, Shannyn! Fagan was screaming about ACES yesterday. Obviously, he hasn’t read The Petroleum News! This ought to put everything that comes out of his into question. Including his relentless and tiresome rants about Senator Begich!

  3. Shannon misses the point. ACES is mortgaging away Alaska’s future by imposing a tax burden that scares away long term investment. Without continued reinvestment, North Slope production will decrease at an escalating rate. Those who fish Alaska’s waters know what happens when “take” is too high – there are no fish for the future. Alaska government is doing the same thing to Alaska’s oil industry.

    • Bradford…Oil is STILL dripping down your chin!

      Did you read Shannyn’s article? Like the bottom part?

      You might want to take a look at the October 18, 2009 edition of Petroleum News. Here’s a summary:

      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.

      Hmmm…1st qtr; 12% of bus=29% income
      Hmmm…2nd qtr; 12%of bus=>55% earnings…

      And your point is??? ACES is sucking them dry? That’s a crock of CRAP! Their Alaska business is STRONG…

      Finally we have a fair royalty rate generating what our constitution mandates-maximum benefit for a fair share for the Owners of the resources-ALASKANS!

      ACES is a GREAT INVESTMENT landscape relative to the rest of the world. Alaska’s economy IS obviously dependent on resource development; the problem is the colonization and corruption of Alaska Legislators over the decades. Lawmaking shills have always looked after the Oil Producers’ interests at the expense of their constituents!

      Our permanent fund ought to be bigger than Norways. Theirs is 10 times ours because they have managed to get the maximum benefit for their citizens. During the ACES passage, many top oil analysts testified and pointed out that the tax rate is not necessarily the main factor Producers consider when determining investment. ACES, thanks to the Democrats, finally garners our fair share FOR ALASKANS while providing a strong investment climate for the Producers. THAT is why the 1st 2 quarters of 2009 were great for ConocoPhillips Alaska business. And…Alaska is certainly not the highest taxing state by a longshot. Certainly Alaska is an infinitely more agreeable business climate than Iraq, where The Producers have lined up to steal their oil!

      The fact of the matter is this: the raping and pillaging of Alaska’s resources at the expense of the citizens of Alaska is O-V-E-R!… Read More

      AND…here’s the deal in Iraq:

      In 2009, ConocoPhilips, Exxon-Mobil, and BP all agreed to produce Iraq’s oil fields for $2 per barrel and less while continuing to tell Alaskans they were curtailing investment and about to abandon Alaska for lack of profit from Alaska’s oil. At the height of oil prices, BP was saying the same while clearing $80 per barrel after expenses from Alaska’s second-largest field, the Kuparuk River field.

      With Alaska’s new tax structure, increased in 2007, ConocoPhilips, ExxonMobil, and BP are still easily clearing between ten and twenty times their Iraqi profit from their infinitely more secure investments in Alaska.

      Sorry Bradford, either you’re listening too much to Dan Fagan and Rick Rydell passing their oil shilling and whining off as a talk show or perhaps you are working for Big Awl…either way…you’re flat wrong.

      NEXT UP? Changing the mining corporate welfare give away to a respectable level that provides MAXIMUM BENEFIT to the shareholders of Alaska! 7/10 of 1% royalty on precious metals is a welfare program for these international mining rapists. They are next to start paying their fair share…

      • Kelly .. Thanks for your response. I did read all of Shannyn’s articie, and the Petroleum News article. What’s more, I understood their economic significance.

        Conoco’s results do not demonstrate that their Alaska business is strong. In fact, the results are bad for Alaska. Profits are high now because they are receiving current revenues without making new investments. Maintaining production on the Slope will require substantial new investment. See http://bit.ly/2O7LMW. If producers don’t make the investment, current expenses go down and profits go up. Conoco’s results are not a sign of a healthy situation; frankly, they are the sign of an industry moving into harvest mode — harvesting existing production with minimal reinvestment. The important numbers for Alaska’s future are the level of current investment in exploration and production on state lands; those numbers are going down, fast.

        As to your other point, I don’t listen to either Fagan or Rydell; my dial is usually set to NPR and I read often. Instead, my thoughts come from the perspective of seriously thinking and being concerned about the long term future of Alaska. As a statekholder in the outcome, I think it is worth the effort.

        In my view, as did Egan and others at the beginning of statehood, we should be thinking about what sustains Alaska for the next 50 years; it takes some thought to do that, rather than slogans, name calling and off the cuff reactions. But is important work and worth the effort.

        From that perspective, Alaskans should be concerned about the long-term effects of ACES and AGIA. For good or bad, oil is responsible for 90% of state government funds and one-third of Alaskan jobs. The wind down of the industry will result in increased taxes on the industries and citizens that remain, loss of jobs and a collapse in housing prices and small business as people leave the state.

        The Alaska constitution does require that state resources be developed for the maximum benefit of Alaskans. That requires government to keep in mind not only this generation of Alaskans, but also future generations. By adopting policies that drive reinvestment out of Alaska, state government is mortgaging Alaska’s future for short term gains. Hopefully, we will correct our course.

        To address what is going on in the real world I would suggest you read the recent New York Times article on the status of the oil industry — “Oil Industry Sets a Brisk Pace of New Discoveries,” http://bit.ly/2ZGMPK — and ponder seriously why it is that Alaska is mentioned only as a historic footnote. I look forward to continuing the discussion on Alaska’s future.

  4. Alaska is no longer a good place to invest. Our high taxes make us too high of risk. Take a look at the recent lease bids.

    Shannyn Moore has never worked on the slope, she doesn’t understand what it takes. Shannyn Moore isn’t an investor either.

    Shannyn Moore deserves to pay a state income tax or a state sales tax. And I have feeling she will be soon.

    • @Katie H.

      How the hell do you what Shannyn knows? Or whether she’s an investor or not…And why should that matter??? As ALASKANS…We’re ALL INVESTORS!!!

      I’ve never worked on the North Slope but I understand that the old Alaska royalty system that was put in place by corrupt oil-shilling politicians has siphoned off BILLIONS of dollars that should have gone into the Alaska Permanent Fund!

      Yours is an arrogant comment if there ever was one. Feel free to read what I wrote your oily buddy Bradford. ConocoPhillips’ Alaska property is kicking-ass relative to their other properties…AND The Producers are stealing Iraqi oil for $2 per barrel. $2 per barrel to extract oil in a war zone…EXPLAIN THAT!!!

  5. The ego and its money that believes bribery is for the public good also believes its righteous to exploit underage girls for sex. It’s a lot like animal abuse being a sign of future violence against people.

    Nothing about the underage girls Shannyn? Nothing?

    I guess oil tax legislation is more important to the liberals too, not just the FBI.

    As far as the high taxes on Alaskan Oil, I guess one wouldn’t bother to notice a press release from BP declaring a $3 billion reduction in spending in Alaska at the same time they sign an agreement to begin a $3 billion investment in offshore drilling in Libya.

    An agreement where they’ll pay upwards of 75% in production taxes (in exchange for releasing the Lockerbie bomber) just isn’t relevant to the whole “high taxes discourages investment” meme.

    Taxation without representation has the same implications in the reverse for those who believe in no taxes.

    How can one be truly represented without paying taxes?

  6. I love F.B.I so much & I admire them🙂

  7. yes.. I love F.B.I

  8. yes.. I love F.B.I


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