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Friday, December 19, 2003 - Page updated at 12:00 A.M.

Alaska's Sen. Stevens used power to build wealth

By Chuck Neubauer and Richard T. Cooper
Los Angeles Times

AP
Ted Stevens, the Senate's senior Republican, exerts unparalleled influence in Alaska.
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ANCHORAGE — He wielded extraordinary power in Washington, D.C., for more than three decades, eventually holding sway over nearly $800 billion a year in federal spending.

But outside the halls of the Senate, a world of personal wealth so rarified that some call it "the Millionaires' Club," Sen. Ted Stevens, R-Alaska, had struggled financially.

Then, in 1997, he got serious about making money. In almost no time, he too was a millionaire — thanks to investments with businessmen who received government contracts or other benefits with his help.

Added together, Stevens' new partnerships and investments provide a step-by-step guide to building a personal fortune — if you happen to be one of the United States' most influential senators.

They also illustrate how lax ethics rules allow members of Congress and their families to profit from personal business dealings with special interests.

Among the ways that Stevens became wealthy:

• Using the power his committee posts give him over the Pentagon, Stevens helped save a $450 million military housing contract for an Anchorage businessman. The same businessman made Stevens a partner in a series of real-estate investments that turned the senator's $50,000 stake into between $750,000 and $1.5 million in six years.

• An Alaska Native company that Stevens helped create received millions of dollars in defense contracts through preferences he wrote into law. The company now pays $6 million a year to lease an office building owned by the senator and his business partners. Stevens continues to push legislation that benefits the company.

• An Alaska communications company benefited from the senator's activities on the Commerce Committee. His wife, Catherine, earned tens of thousands of dollars from an inside deal involving the company's stock.

Stevens, in a written response to questions, said that in all these cases his official actions were motivated by a desire to help Alaska, and that he played no role in the management of the ventures.

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"I am a passive investor," Stevens said. "I am not now nor have I been involved in buying or selling properties, negotiating leases or making other management decisions."

In these deals and others, Stevens' brother-in-law, William Bittner, played a pivotal role. An Anchorage lawyer and lobbyist, Bittner represents major business interests for whom the senator repeatedly has gone to bat. In one instance, Stevens engineered a $9.6 million federal appropriation that chiefly benefited a Bittner client, part of South Korea's Hyundai conglomerate.

Stevens tucked a single line into a must-pass appropriations bill that used federal tax dollars to buy Hyundai out of a coal-loading facility in Seward.

Stevens said he did it to lower the company's costs and keep it from canceling an agreement to buy Alaska coal. Bittner did not respond to questions.

Stevens' relationship with Bittner fits an increasingly widespread pattern in Washington: Senior senators do favors for special interests that pay hundreds of thousand of dollars in lobbying and consulting fees to senators' children, spouses and other relatives.

As the Los Angeles Times documented in a series of articles in the summer, Sens. John Breaux, D-La., Trent Lott, R-Miss., and Orrin Hatch, R-Utah, did favors for companies and groups that paid their sons as lobbyists and consultants. Sen. Harry Reid, D-Nev., has pushed through federal land trades and other provisions benefiting Nevada interests that employ his sons and son-in-law.

The newspaper also reported that Stevens continually had supported interests that paid his youngest son, Ben, hundreds of thousands of dollars as a consultant.

The senators all said their decisions on policy issues and legislation had not been influenced by their relatives.

But Stevens' dealings have carried him a step further. His official actions have helped individuals and companies from which he personally draws financial benefits, a six-month examination found.

His required financial statements have fallen short of complete disclosure — especially on the activities of a small investment corporation owned by his wife and her family, a company covered by the reporting rules.

The Senate has few ethics rules governing such arrangements. Although accepting expensive gifts and speaking fees is banned, the conflict-of-interest rules are much less explicit. For example, nothing clearly bars a senator from sponsoring legislation that benefits the clients of family members who lobby. Nor are senators prohibited from going into business with people receiving legislative favors.

Mainly, the Senate relies on an ill-defined injunction not to bring shame upon the body.

Senate Ethics Committee Chairman George Voinovich, R-Ohio, declined to discuss the issues raised by articles.

House Ethics Committee Chairman Joel Hefley, R-Colo., said he hoped to convene an advisory panel of current and former House Ethics Committee members next year to examine a variety of ethics questions, including how to address the issue of lobbying by relatives.

Today, Stevens is the longest-serving Republican in the Senate.

For more than 20 years, he has been chairman or ranking member of the Senate's Defense Appropriations subcommittee. Since 1997, he has been chairman or ranking member of the full Appropriations Committee, which must approve every dollar of federal discretionary spending each year.

Stevens' position as a senior member of the Commerce Committee adds to his clout — especially in telecommunications policy, which is under the committee's jurisdiction.

In Alaska, Stevens exerts unparalleled influence. No state is so dependent on federal dollars and decisions. The federal government still owns 60 percent of all its land, generates one-third of all jobs, and holds the keys to economic growth through regulation of its major industries — oil and gas, fishing, timber and tourism.

Federal spending in Alaska, known locally as "Stevens money," runs as much as 70 percent more than the national average on a per-capita basis.

Since his first day in the Senate in 1968, Stevens has delivered for Alaska.

Almost every institution, region and segment of the population in the state has benefited from Stevens' efforts, from its schools and social programs to its transportation system, its urban areas and the far-flung villages of Alaska's Native peoples.

Stevens continues to push for money and other benefits for Alaska interests — including nearly $400 million in pending legislation to help tourism, education, the environment, scientific research, roads, fisheries, the war against fetal alcohol syndrome and more.

But as Stevens has grown wealthy, some longtime supporters say the senator has become less willing to hear their views.

"I've been here a long time, and always had a great deal of respect for Sen. Stevens' enormous power and the good he's done for Alaska," said Terry Haines, a veteran commercial fisherman from Kodiak Island. "But lately he's become extremely rigid and doesn't seem to be listening to his constituents much."

"Money was never what Ted Stevens was about," one close associate said of Stevens' sudden focus on accumulating wealth. The associate attributed it to Stevens' age — he turned 80 last month — and to concern about his family.

Copyright © 2003 The Seattle Times Company

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