July 29 (Bloomberg) -- Ted Stevens of Alaska, the U.S. Senate's longest-serving Republican, was indicted by a federal grand jury in Washington on charges he hid hundreds of thousands of dollars in gifts from one of his state's largest corporations.
The senator, who is seeking re-election and proclaimed his innocence, was charged with seven counts of making false statements on his Senate financial disclosure forms from 1999 to 2006. He failed to report more than $250,000 in gifts and renovations on his house, prosecutors said. A legendary figure in Alaskan politics, Stevens, 84, has steered billions of dollars to the state from his seat on the Senate Appropriations Committee.
FBI agents raided Stevens's house a year ago as part of the corruption probe. The case will likely boost Democratic chances of winning an Alaska Senate seat for the first time in almost three decades if he remains a candidate, analysts said.
``I think it probably means the end of Ted Stevens's career,'' said former House Republican leader Dick Armey of Texas.
Democrats captured control of both houses of Congress in 2006 in part by accusing Republicans of a ``culture of corruption'' in their dealings with Jack Abramoff, the now- imprisoned Republican lobbyist. Stevens's case is unrelated to that federal probe of influence peddling.
Denying the Charges
In a statement, Stevens said he had never knowingly submitted a false disclosure form.
``I am innocent of these charges and intend to prove that,'' he said. In accordance with party rules, he temporarily stepped down from his posts as ranking Republican on the Senate Commerce Committee and the defense appropriations panel.
Alaska Governor Sarah Palin, a Republican, said news of the indictment ``rocks the foundation of our state.'' Stevens ``has dedicated his life to the betterment of Alaska,'' she said in a statement. ``I share Alaskans' concern and dismay at this turn of events.''
Today's indictment said Stevens ``knowingly and willfully engaged in a scheme to conceal'' gifts he got from Veco Corp., an Anchorage oil-services contractor, and its chief executive officer.
Prosecutors didn't charge Stevens with bribery, a crime that would require the government to prove he took official action in exchange for the gifts. Still, the indictment said Stevens used ``his official position and his office on behalf of Veco.''
Funding for Projects
Stevens and the company discussed obtaining funding for international projects, contracts and grants, as well as getting the senator's help for an effort to construct a natural gas pipeline, the court papers said.
The government said the gifts he received included improvements on a home in Alaska, new vehicles, furniture and a professional Viking gas grill.
Over six years, Veco and Bill Allen, its former chief executive officer, provided free labor and materials to renovate Stevens's house in Girdwood, Alaska, the indictment said. Prosecutors said the project included adding a full basement and a first-floor addition with bedrooms and a bathroom and Stevens often referred to the house as ``the chalet.''
Privately held Veco is now owned by CH2M Hill, a Denver- based global contracting firm. The parent company isn't involved in the investigation. Allen pleaded guilty last year to bribing state lawmakers and is cooperating with the government.
Remodeling Bills
Stevens told reporters last summer that he and his wife paid all the remodeling bills that were passed onto them.
Stevens has served in the Senate since 1968 and has held some of its most powerful positions, including chairmanships of the Appropriations and Commerce committees.
Virginia Republican Senator John Warner called Stevens ``a fighter'' and said, ``I hope this will turn out fairly.''
Between 1995 and 2008, Stevens directed more than $3.3 billion in pet projects, or ``earmarks,'' toward his state, according to Citizens Against Government Waste, a Washington- based nonprofit advocacy group. The organization calculated that in 2006, the federal money amounted to almost $500 per person in Alaska, whose population is just 670,000.
One particular earmark in 2005, termed the ``Bridge to Nowhere,'' earned notoriety for Stevens and Don Young, Alaska's lone representative in the U.S. House. While funds for the bridge -- which was to connect the town of Ketchikan to an island of 50 full-time residents -- were eventually canceled, the money became a symbol of excessive spending on special-interest projects.
Threatening to Resign
Stevens, undeterred by the negative publicity, threatened at one point to resign if the Senate rescinded the bridge money.
The senator is the latest lawmaker from Alaska charged in the federal political corruption investigation that began in 2004. Allen testified last year that he paid for part of a 2000 remodeling of Stevens's house.
The investigation has resulted in seven criminal convictions, including three former state lawmakers, two former oil executives, a lobbyist and the chief of staff of former Alaska Governor Frank Murkowski.
Politics played no part in the Stevens case, Matthew Friedrich, the Justice Department's acting criminal division chief, said at a news conference in Washington. ``We bring cases as prosecutors when we believe they are ready,'' he said. ``That policy has been followed to the letter in this case.''
On July 10, after Alaska state Senator John Cowdery was charged with conspiring to bribe another state lawmaker, Stevens said in a statement that he wouldn't comment until the investigation was complete.
Working for Alaska
``For over 50 years I have worked hard for Alaskans as part of our territorial, state and federal governments,'' Stevens said in the statement. ``And I will continue to do all I can to assure that Alaska's unique needs are met.''
Stevens faces six Republican challengers in an Aug. 26 primary election. Anchorage Mayor Mark Begich is among three candidates seeking the Democratic nomination. On July 21, Rassmusen Reports released a poll that had Begich ahead of Stevens 50 percent to 41 percent.
Kay Bailey Hutchison, a Texas Republican, was the most recent U.S. senator to be indicted, according to the Senate historian. She was charged in 1993 by a Travis County, Texas, grand jury with misusing state resources. A judge ordered Hutchison acquitted a year later.
That same year, Senator David Durenberger, a Minnesota Republican, was indicted on federal charges of misusing public funds. He pleaded guilty in 1995 to misdemeanor charges and was sentenced to one year of probation.
To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net.
To contact the editor responsible for this story: Michael Forsythe at mforsythe@bloomberg.net.
United States Senator Ted Stevens of Alaska has been indicted by federal grand jury on seven criminal counts for making false statements in his Senate financial disclosure forms. The longest-serving Republican in the Senate, Stevens is the highest-profile politician ensnared in the corruption scandal surrounding VECO Corporation and its executives' attempts to influence politics.

United States Senator Ted Stevens of Alaska
VECO, a subsidiary of CH2M Hill as of September 2007, is an oil pipeline and services company. It is alleged to have funded renovations to the Stevens home in Girdwood, Alaska in 2000. The renovations include a new garage and first floor, a two story wrap-around deck, as well as new wiring and plumbing. In 2007, VECO chief executive Bill Allen pleaded guilty to charges of extortion, bribery, and conspiracy.

The 28-page indictment alleges that Stevens "knowingly and willfully engaged in a scheme to conceal" gifts from VECO, which totaled "hundreds of thousands of dollars worth of things of value."

A press release was issued by Stevens' office in response to the allegations: "I am innocent of these charges and intend to prove that." And Stevens himself commented, "I have never knowingly submitted a false disclosure form required by law as a U.S. senator." Senator Daniel Inouye, a close friend of Stevens, commented: "As far as he's concerned, he's not guilty. And I believe him."

Stevens was reportedly caught unawares on Tuesday when the indictment charge was filed. "Apparently, the media knew about it before he did," Inouye stated, adding that he had just talked to Stevens. Ted Stevens was in a meeting with other Republicans when he found out about the charge.

Stevens is the longest-serving Republican senator in history and is up for reelection this November. Calls to his office in Washington for comment were redirected to a voicemail indicating that his "office is closed."

The United States Department of Justice says it has already obtained seven convictions in the case: Peter Kott, a former Speaker of the Alaska House of Representatives; Thomas T. Anderson, a former state representative; Victor H. Kohring, another representative; James A. Clark, chief of staff to the former governor of Alaska; William Bobrick, a lobbyist; Bill Allen, VECO chief executive; and Richard L. Smith, VECO vice president of government relations.