To navigate this 120 page document, copy it to word then click on “edit” then “find” and enter DOC 1 and click on find next. Repeat to find the top of DOC 2, continuing doc through DOC 7. To navigate to references to Exhibit A, click on “edit” then “find” and enter the words “EXHIBIT A” and click on “find next.” To find the actual exhibit rather than references to it, use the “edit” “find” function and enter EXHIBIT AA, using double AA or double PP.

Not included in this menu are three CLOSING NOTES that have been added at the bottom of the document. One sheds additional light on the value of Ben’s secret option and the other sheds additional light on the litigation over the Division of Election’s decision to reject our recall petition. Search the words CLOSING NOTE, to find the top of each.

DOC 1,

THIS WAS THE FIRST COMPLAINT,
THE ONE THAT WAS REJECTED BY THE
ALASKA PUBLIC OFFICE COMMISSION (APOC)

ALASKA PUBLIC OFFICES COMMISSION
2221 E. NORTHERN LIGHTS, ROOM 128
ANCHORAGE, ALASKA 99508-4149
(907) 276-4176 FAX (907) 276-7018

Complaint

XX0 AS 39.50 Public Official Financial Disclosure Law
XX0 AS 24.60.200 Legislative Financial Disclosure Law
Office Use Only

Case Number:

1. Complainant (your name):
The Republican Moderate Party of Alaska.
1a. Telephone No.:

Voice No.: 907-344-4514
Fax No.: 907-349-1735
1b. Address (street, city, state, and ZIP code):
P.O. Box 233809, Anchorage AK 99523
1c. Representative (if represented) (include address and telephone nos.):
Ray Metcalfe, Party Chairman
2. Respondent (person, group, or entity believed to have violated the law):

State Senator Ben Stevens

2a. Telephone No.:

Voice 269-0200

Fax No.: 269-0204

2b. Address (street, city, state, and ZIP code):

716 West 4th, Suite 200
Anchorage, Alaska 99501
2c. Representative (if represented) (include address and telephone nos.):

3. Sections of law or regulation violated: Sec. 24.60.200 and Sec. 11.56.110

4. Description of violation (include the source of your information; attach additional pages, if needed):

Ben Stevens has reported the receipt of one million six hundred eighty thousand two hundred ninety-seven dollars of which one million three hundred fifty four thousand and forty-five dollars were paid to him following his appointment to the Alaska State Senate by an assortment of ten persons groups or corporations who he defines as clients. These Clients paid him for services he fails to define beyond “Consulting fees” in his “Conflict of Interest Report.”

Senator Ben Stevens’ fails to define what services he performs exchange for his consulting fees. This violates Alaska’s Conflict of Interest Disclosure Law (Sec 24.60.200) which requires that Legislators provide the public with details, when describing the nature of the services they are being paid. Such details are required to be sufficient to tell the reader what actual work was performed in exchange for the payment received.

One hundred seventy-six thousand and five hundred dollars of the one million six hundred eighty thousand two hundred ninety-seven dollars were paid to him by “Stevens and Associates,” a company wholly owned by Ben Stevens, and Ben Stevens not only fails to define his services beyond “Consulting fees,” he also fails to name the client who paid him.

The Public must know that legitimate work was performed and have sufficient details to discern if that work was within the scope of Ben Stevens’ professional qualifications. Given the gravity of any possible impropriety, it is imperative that the Alaska Public Office Commission insist on more than a personal opinion from Senator Stevens describing what he wishes others to believe he has done for his pay. I ask APOC to apply the standard used by Alaska’s Court system, defined in Court Rule 82 of Alaska’s Rules of Civil Procedure. Ben Stevens should be required to provide evidence of a work product and evidence corresponding hourly billing. Given the delay in reporting, Ben Stevens work product should be subjected to the standard of an IRS compliance audit in which the paying party is required to provide evidence of billing hours and work product received and approval for payment, supported by affidavits of persons employed by the payers of the consulting fees at the time they were paid.

In the event that demonstrable billing hours and work products evidence prove insufficient to reasonably warrant the payments received, I am requesting APOC forward this complaint, and any concerns and observations APOC may have, to the Alaska Attorney General’s Office of Special Prosecutions along with a request that they investigate to determine whether or not Senator Ben Stevens has violated Alaska Criminal Law (Sec. 11.56.110) regarding bribery for a political purpose. That statute reads: “A public servant commits the crime of receiving a bribe if the public servant solicits a benefit with the intent that the public servant's vote, opinion, judgment, action, decision, or exercise of discretion as a public servant will be influenced. Receiving a bribe is a class B felony.”

CC: Assistant Attorney General Clyde E. Sniffen in the Attorney General’s Office of Special Prosecutions, 1041 West 4th Avenue, Suite 200, Anchorage, Alaska, 99501-5903.

5. All available documentation concerning the alleged violations was received from, and remains in the possession of The Alaska Public Office Commission.

6. Yes, I do request expedited consideration.
7. I declare that I have read the above statements and that the statements are true to the best of my knowledge and belief.
By

(Signature) (Title) (Date)
8. See attached certificate of service confirming service by telecopier.

Subscribed and sworn to or affirmed before me at:

____________________________________________on ________________________________

________________________________________Signature ____________________________Title

DOC 2,

THIS WAS THE SECOND, AND FAR
MORE COMPREHENSIVE COMPLAINT
ALSO SEE ALL EXHIBITS BELOW.

ALASKA PUBLIC OFFICES COMMISSION
2221 E. NORTHERN LIGHTS, ROOM 128
ANCHORAGE, ALASKA 99508-4149
(907) 276-4176 FAX (907) 276-7018

Complaint

XX0 AS 39.50 Public Official Financial Disclosure Law
XX0 AS 24.60.200 Legislative Financial Disclosure Law
Office Use Only

Case Number:

4. Complainant (your name):
The Republican Moderate Party of Alaska.
1a. Telephone No.:

Voice No.: 907-344-4514
Fax No.: 907-349-1735
1b. Address (street, city, state, and ZIP code):
P.O. Box 233809, Anchorage AK 99523
1c. Representative (if represented) (include address and telephone nos.):
Ray Metcalfe, Party Chairman
5. Respondent (person, group, or entity believed to have violated the law):

State Senator Ben Stevens

2a. Telephone No.:

Voice 269-0200

Fax No.: 269-0204

2b. Address (street, city, state, and ZIP code):

716 West 4th, Suite 200
Anchorage, Alaska 99501
2c. Representative (if represented) (include address and telephone nos.):

6. Sections of law or regulation violated: Sec. 24.60.200 and Sec. 11.56.110
AS 39.50.030 (4), AS 39.50.100, AS 39.50.200(b), AS 39.50.030.24 subsection .030(a),

4. Description of violation (include the source of your information; attach additional pages, if needed):

See Attached:

5. All available documentation concerning the alleged violations was received from, and remains in the possession of The Alaska Public Office Commission.

6. Yes, I do request expedited consideration.
9. I declare that I have read the above statements and that the statements are true to the best of my knowledge and belief.
By

(Signature) (Title) (Date)
10. See attached certificate of service confirming service by telecopier.

Subscribed and sworn to or affirmed before me at:

____________________________________________on ________________________________

________________________________________Signature ____________________________Title

Description of violation (include the source of your information; attach additional pages, if needed):

COMPLAINT AND REQUEST FOR ENFORCEMENT

This complaint is a new complaint based on substantial and significant new information not available to the complainant at the time of the previous complaint filed July 14, 2005. Although some of the same questions are raised here again, the corroborating evidence of impropriety in previous accusations has increased substantially. Consequently, it would be inappropriate to include all of the evidence of newly discovered impropriety contained herein in an appeal without first giving APOC Staff the opportunity to respond to the new information below.

Alaska Statute 39.50.030(a) requires candidates for elected office to file disclosure statements containing an "accurate representation" of their financial affairs. State Senate candidate Ben Stevens filed a Legislative Financial Disclosure Statement that failed to disclose his chairmanship of a non-profit and failed to disclose several actual and prospective financial interests.

In a previous ruling, the Commission ruled that Senator Tom Wagoner had failed to report his position as an officer of a non-profit homeowners' association. APOC ruled that, because Wagoner had reported his ownership of a condominium within the complex represented by the condominium association in question and because he had cooperated fully with APOC staff, clearly, his omission was “inadvertent,” and consequently, APOC Commissioners elected to reduce Wagoner’s fine from $1,740, to $150.

Ben Stevens omitted his position as Chairman of the Alaska Fisheries Marketing Board, (AFMB) a non-profit corporation. He also omitted the fact that his control of the board is enhanced by the fact that the vice chairman of AFMB, Trevor McCabe, is his associate and/or business partner in other ventures and was formerly an aide, who specialized in commercial fishing issues, in Ben’s fathers Washington DC office. (See exhibit A, attached)

APOC’s forms and previous APOC rulings make clear that legislators are required to list profit and nonprofit boards on which they serve. Ben Stevens has demonstrated by his previous reports of non-profit board memberships, that he is and was well aware of his obligation to report his memberships on nonprofit boards, such as AFMB, to APOC.

Ben Stevens was appointed to the AFMB board in late 2003 and elected by the AFMB Board as its Chairman in November of 2003. Ben Stevens’ omission was far from inadvertent or inconsequential. Ben Stevens has effectively been placed in charge of $29 million of federally appropriated funds and the board he chairs is authorized to distribute said funds to his clients and former clients. Two or more of Ben’s clients and/or former clients to which AFMB was sending funds to, were or are in turn sending some of their income back to Ben Stevens in the form of “consulting fees” through the North Pacific Crab Association. (See Exhibit A & K & Ben’s disclosure) In Trident Seafood’s case, Trident makes payments to North Pacific Crab Association and North Pacific Crab Association makes payments to Ben Stevens. Such relationships are precisely the kinds of relationships APOC’s reporting requirements were intended to expose.

According to Ben Stevens’ Legislative Financial Disclosure Statements, The North Pacific Crab Association has paid Ben Stevens more than $128,000 over the past three years. Undisclosed during that same period of time, Ben Stevens, through his undisclosed chairmanship of the AFMB board, with the cooperation of his business partner as AFMB’s vice chairman, handed several million dollars to North Pacific Crab Association’s member Trident Seafoods. (See Exhibit A, B & C attached)

During 2001 and 2002, with Trident Seafoods as a member and Ben Stevens’ business partner Trevor McCabe as its president, the At-Sea Processors Association paid Ben Stevens $54,000. (See Ben Stevens’ disclosure and Exhibit E & M Attached) Trident Seafoods, during, or somewhere near this same time, was also paying both Ben Stevens and Trevor McCabe, Ben’s lobbying associate, as a lobbyist (See Exhibit E, F & L Attached)

The Ben Stevens chaired board also disbursed large sums of federal money to Icicle Seafoods. (See Exhibit A)

It was Icicle Seafoods who in December of 2001, bought 50% of Adak Fisheries LLC and provided the necessary capital for Adak Fisheries LLC to bring current its lease payments to the Aleut Enterprise Corp. Six months later, it was Icicle Seafoods who also signed the now infamous “secret contract” granting Ben Stevens his second “secret option” to purchase a 25% interest in Adak Fisheries LLC. (See Exhibit G & H) Note that his first secret option agreement was granted in 2000. (See Exhibit I)

Simultaneous with Icicle’s financial injections into Adak Fisheries LLC and signing Ben Stevens’ secret option agreement, not only was Adak Fisheries LLC able to bring Adak Fisheries lease payments current, Adak Fisheries LLC was also enabled to increase Ben Stevens’ “consulting fees” from $15,000 per year to $80,000 per year. (See Exhibit G, H, and Ben Stevens Disclosure) One year later, AFMB, the Ben Stevens directed board, began distributing large sums of federally appropriated dollars back to Icicle Seafoods.

It is highly doubtful that $29 million, or the obvious conflict, simply slipped Ben Stevens’ mind. More likely, it appeared so much like a kickback scheme that Ben Stevens elected to take the risk of not reporting his chairmanship of AFMB with hopes that no one would notice the above connections or dare report it if they did.

It appears that Ben Stevens deliberately concealed information that he was obligated to disclose and thereby clearly failed to meet the standard of “substantial compliance” with his obligation to provide the public with an “accurate representation” of his finances. (“Substantial compliance” is the standard adopted by the Alaska Supreme Court in Grimm v. Wagoner, 77 P3d 423)

Furthermore, Stevens knowingly refused to cooperate with an Oct. 7 request from APOC, to amend his APOC report covering 2003. Arguing that the Fisheries Marketing Board "was not a recognized or organized corporation in the state of Alaska in 2003," Ben made this argument even though in his disclosure to the Legislature earlier this year, he said his service on the marketing board began in September of 2003. (See Exhibit D)
• AS 39.50.060. Penalty For Willful Violation of Disclosure Requirements.
(a) A person required to file a report of financial or business interests under this chapter who refuses or knowingly fails to disclose required information within the time required in this chapter, or who provides false or misleading information, knowing it to be false or misleading, is guilty of a misdemeanor and upon conviction is punishable by a fine of not less than $100 nor more than $1,000, or by imprisonment for a period of not more than six months, or by both.
Sec. 39.50.030. Contents of statements.
(a) Each statement must be an accurate representation of the financial affairs of the public official or candidate ion is punishable by a fine of not less than $100 nor more than $1,000, or by imprisonment for a period of not more than six months, or by both.
(b) Any person failing or refusing to comply with the requirements of this chapter, in addition to the penalties prescribed, shall forfeit nomination to office and may not be seated or installed in office if the person has not complied.
Sec. 39.50.030. Contents of statements. (4) reads: “The identity and nature of each interest in real property, including an option to buy, owned at any time during the preceding calendar year by the person.”
Ben Stevens, through his option to purchase, had an option to buy an undivided 25% of a 30-year leasehold interest in a multimillion dollar improved real property; most likely all of the remaining useful life of the improvements. Ben Stevens’ option began in 2000, and was reaffirmed in July of 2002. (See Exhibit G & I) Clearly, it was not inadvertent forgetfulness that caused Ben Stevens’ to fail to report that he had an obligation to disclose his option to purchase publicly because he raises the issue of his obligation within his option to purchase in a paragraph labeled Confidentiality. Clearly, Ben Stevens failed to meet his statutory obligation set forth in AS 39.50.030 (4).
As demonstrated by the extent to which the media has determined it necessary to go, to attempt to provide the public with an “accurate representation” of Ben Stevens’ financial affairs, it is clear beyond question that Ben Stevens’ financial disclosures, prior to his election and throughout the duration of his term in office, were all willfully far short of the “substantial compliance” standard adopted by the Alaska Supreme Court in Grimm v. Wagoner, 77 P3d 423.

Ben Stevens’ omissions from his reporting obligations were neither trivial nor inconsequential. To the contrary, Ben Stevens’ omissions were willful, fraudulent and filed with intent to obscure the facts and deceive the public. The entirety of Ben Stevens’ Legislative Financial Disclosure Statements, from his first in September of 2001, to his last in March of 2005, each meet one or more of the deficiencies defined in Grimm v. Wagoner, defining the level of incompleteness a Complainant must demonstrate to seek a post-election enforcement action under AS 39.50.100.

AS 39.50.060(b) requires a chronic and willful abuser of the process to forfeit the election. I therefore ask the Alaska Public Offices Commission to conduct a thorough investigation of the allegations contained herein.

Remedies and points of law:

AS 39.50.060(b) requires that:
• Any person failing or refusing to comply with the requirements of this chapter, in addition to the penalties prescribed, shall forfeit nomination to office and may not be seated or installed in office if the person has not complied. Nominated, hired, or appointed officials, commissioners, chairs, or members of commissions or boards specified in AS 39.50.200(b) may not be confirmed by the legislature if compliance has not been made. In the case of elected officials, the lieutenant governor, or other certifying authority, may not certify a person’s nomination for office or the person’s election to office if compliance was not made within the time required. The nomination to office or election to office shall be certified to the highest vote getter for that nomination for that office or election to that office who has complied within the times required and who shall be declared nominated or elected. For purposes of this subsection, a person is considered to have complied within the time required if the person complies within 30 days after the due date established by this chapter.

In the event that APOC should determine that Ben Stevens’ omissions from his Legislative Financial Disclosure Statements resulted in either incomplete, fraudulently deficient reports, or should APOC conclude that Ben Stevens simply failed to meet the standard of “substantial compliance” adopted in Grimm v Wagoner, it is then APOC’s obligation to rescind its acceptance of Ben Stevens’ Legislative Financial Disclosure Statements as “complete or sufficient.”

To do otherwise would effectively establish a policy that enables any one who can successfully conceal their fraud beyond the day the Division of Elections certifies their election can also successfully evade the anti-corruption intentions of our election laws.

If Ben Stevens’ disclosure acceptance is rescinded, it is then APOC’s obligation to give notice to the Lieutenant Governor that the certification of Ben Stevens’ Election was based on information that failed to meet the standard of “substantial compliance” and the certification of Ben Stevens Election was therefore fraudulently obtained and should therefore must be reversed.

Ben Stevens should be ordered to forfeit his election because Complainant’s claims were not filed with APOC until after APOC had recognized Ben Stevens’ disclosure as complete. Based on incomplete information, APOC incorrectly advised the Lieutenant Governor and the Division of Elections, that Ben Stevens’ filings were adequate, before discovering that Ben Stevens’ Legislative Financial Disclosure Statement failed to meet the standard of “substantial compliance” adopted in Grimm v Wagoner.

Should such a determination be made, it is then APOC’s obligation to rescind its acceptance of Ben Stevens’ Legislative Financial Disclosure Statements as complete or sufficient. The Lieutenant Governor and the Division of Elections relied on APOC’s incorrect representations and consequently certified Ben Stevens’ election based on information that has since been proven erroneous. The certification of his election therefore must be revoked.

In the matter of APOC staff’s acceptance of “Consulting Fees” as an adequate description of compensation received in exchange for services rendered.

Ben Stevens has reported the receipt of one million six hundred eighty thousand two hundred ninety-seven dollars of which one million three hundred fifty-four thousand and forty-five dollars were paid to him following his appointment to the Alaska State Senate by an assortment of ten persons, groups or corporations who he defines as clients. These clients paid him for services he fails to define beyond “consulting fees” in his “Legislative Financial Disclosure Statement.”

Kjetil Solberg, the owner of Adak Fisheries, the largest single payer of Ben Stevens’ “consulting fees” has, through his own words, under oath, made it quite clear that he was paying Ben Stevens for the political influence Ben was able to deliver.

When Solberg, Ben Stevens’ Partner in Adak Fisheries LLC, was asked what he had paid Ben Stevens to do and whether or not he still needed Ben’s services, Solberg said:

• “Ben Stevens’ work for the company, for which the option was a partial reward, may be done. I don’t think there is a need for Ben to be an owner any more, because the reason why we wanted to set it up that way was so we secure the fish to come to the beach,” Solberg said. “But now we have all the security through my 100 percent ownership so our “political mission” is fulfilled.”

When Kjetil Solberg was asked if that “political mission” included getting pollock from Congress, Solberg said:

• “No – he was talking about cod and crab, and getting more fish from state waters through the state Board of Fish. “Adak is built on the back of cod, not the Pollock.” (See exhibit N)

Kjetil Solberg’s answer leaves no question that he believed he was paying Ben Stevens for his political influence.
When under oath before Superior Court Judge Michael Rindner Kjetil Solberg’s said "If we politically work together up here in Alaska we could secure our cod resource," Solberg told Superior Court Judge Michael Rindner, at times stumbling a bit in his adopted language. "If we can sit together, have Mr. Tillion, have Mr. (Ben) Stevens, and have the Aleuts and myself work together, we can secure that by maybe implement the state Board of Fisheries on an emergency basis -- Mr. (Ben) Stevens for us is very crucial in this process. If we cannot do that, if we don't work together, I believe that out-of-state harvesters will profit and we will lose."
As President of the State Senate, Ben Stevens has funding control and legislative oversight over the State Board of Fisheries and, according to Kjetil Solberg’s statement above, Ben Stevens was paid $320,000 to influence the decisions of the State Board of Fisheries.
On August 19, 2005, APOC staff issued an opinion that Ben Stevens’ was not required to provide any description of his payments for services rendered beyond “consulting fees.”

As is obvious from the all the above information, had Ben Stevens been required to explain his “consulting fees,” to APOC, much of what now appears may have been a series of criminal kickback schemes and felony influence peddling would have come to light years earlier.

As demonstrated by the extent to which the media has determined it necessary to go, to attempt to provide the public with an “accurate representation” of Ben Stevens’ financial affairs, and the number of times the media has ask Ben Stevens to answer the question “What did you do for the consulting fees?” it is clear beyond question that the term “consulting fees” falls far short of satisfying the requirements of AS 39.50.030.24 subsection .030(a) which requires disclosure statements to “be an accurate representation of the financial affairs of the public official or candidate.”

To allow such a standard would eviscerate any further purpose for APOC’s existence. Honest ethical politicians would abstain from such practices and soon be squeezed out of the political arena by far better financed willing peddlers of influence. The worst that society has to offer will be dredged from the bottom and elevated to positions of power through easily cloaked conspiracies with persons willing to pay “consulting fees” to anyone willing to do their bidding.

APOC’s future thereafter would be little more than a vehicle to provide cover for their corruption and Alaska’s state government would become one of the most corrupt states governments in the nation.

APOC staff’s August 19, 2005, opinion stating that the term “consulting fees” is an adequate definition of payments received for services rendered, was issued in response to a complaint that focused primarily on VECO’s payments to Ben Stevens of approximately $50,000 per year.

Unlike Ben Stevens’ relationship with the fishing industry, those seeking information about Ben Stevens relationship with the oil industry have not had the advantage of an ongoing related lawsuit from which to glean information. The questions surrounding Ben Stevens’ payments from VECO have gone unanswered in spite of repeated inquiries from news reporters in the television radio and print media.

However, the proof of payment demonstrated by Ben Stevens’ disclosure of having received “consulting fees” from VECO also equals proof of either a verbal or written contract to represent the interests of VECO.

VECO’s interests were well documented in 1999, when VECO led the organization of a $350,000 campaign seeking voter permission to redirect Permanent Fund Dividends to capital projects. The voter response to the VECO led effort was a resounding 83% “NO.”

Since the 1999 vote, VECO has paid $400,000 to six lobbyists and $195,000 to Ben Stevens in relentless pursuit of their objective of finding ways to fund government from Permanent Fund earning. Overcoming the political resistance to spending Permanent Fund earnings for government needs other than dividends would have the political effect of reducing political pressure to demand world market value for Alaska’s oil.

For a seated member of the Alaska State Legislature to contract with a privet person, to accept payment in exchange the use of his or her influence in the Alaska State Legislature, is a crime in the State of Alaska.

Reporters have repeatedly asked Ben Stevens define or demonstrate what kind of work he has performed in exchange for the payments he received from VECO. Thus far, Ben Stevens has been either unwilling or unable to define or demonstrate any work product that would pass legal scrutiny that he has produced in exchange for the payments he has received from VECO.

Ben Stevens has repeatedly argued that his employment with VECO prior to his appointment to the Alaska State Senate somehow excuses his continued employment with VECO. Prior to Ben’s appointment to the State Senate, Ben’s payments from VECO were in exchange for his services as a lobbyist. (See Exhibit J) If on new job description exists and no work product other than the continuation of advocating VECO’s political agenda exists, then the only remaining possible purpose for VECO to continue to pay Ben is for his continued services as a lobbyist. For a member of the Alaska State Senate to lobby the Alaska State Legislature on behalf of a paying client is a felony.

Over the past year, on one or more occasions, VECO has called upon Ben Stevens to host fundraisers organized by VECO and held at the Anchorage Petroleum Club. Said fundraisers were for the purpose of advancing VECO’s influence with the Republican Majority.

VECO’s objectives have not changed since the 1999 vote. (See Exhibits O & P)

In pursuit of VECO’s objectives, Ben Stevens took the politically risky step of attempting to pierce the political barrier of “raiding the Permanent Fund” a political feat commonly believed among most Alaskan politicians, to be political suicide.

In my previous complaint, APOC staff did not respond to the question regarding the one hundred seventy-six thousand five hundred dollars of the one million six hundred eighty thousand two hundred ninety-seven dollars that had been paid to Ben Stevens by “Stevens and Associates,” a company wholly owned by Ben Stevens his wife Elizabeth Stevens. In disclosing his income from “Stevens and Associates,” Ben Stevens not only fails to define his services beyond “Consulting fees,” he also fails to name the client who paid “Stevens and Associates.”

Contracting to advocate the position of two clients on matters of each client's mutually shared but conflicting interest is generally considered fraudulent and corrupt. Due to the conflicting interests of the State of Alaska and the Oil Industry, it is not possible for a consultant to simultaneously advocate the goals of the Oil Industry and the State of Alaska at the same time. By necessity, one of any two such promises has to have been made in bad faith.

The public must know whether or not legitimate work was performed for Ben Stevens’ above named clients. The public has a right to ask for and receive sufficient details to discern if that work was within the scope of Ben Stevens’ professional qualifications.

Given the gravity of any apparent impropriety, it is imperative that the Alaska Public Office Commission insist on more than a personal opinion from Senator Stevens describing what he wishes others to believe he has done for his pay. I ask APOC to apply the standard used by Alaska’s Court system, defined in Court Rule 82 of Alaska’s Rules of Civil Procedure. Ben Stevens should be required to provide evidence of a work product and evidence corresponding hourly billing. Given the delay in reporting, Ben Stevens work product should be subjected to the standard of an IRS compliance audit in which the paying party is required to provide evidence of billing hours and work product received and approval for payment, supported by affidavits of persons employed by the payers of the consulting fees at the time they were paid.

In the event that demonstrable billing hours and work products evidence prove insufficient to reasonably warrant the payments received, I am requesting APOC forward this complaint, and any concerns and observations APOC may have, to the Alaska Attorney General’s Office of Special Prosecutions along with a request that they investigate to determine whether or not Senator Ben Stevens has violated Alaska Criminal Law (Sec. 11.56.110) regarding bribery for a political purpose. That statute reads: “A public servant commits the crime of receiving a bribe if the public servant solicits a benefit with the intent that the public servant's vote, opinion, judgment, action, decision, or exercise of discretion as a public servant will be influenced. Receiving a bribe is a class B felony.”

I respectfully appreciate your serious consideration and attention in the above matter.

CC: Assistant Attorney General Clyde E. Sniffen in the Attorney General’s Office of Special Prosecutions, 1041 West 4th Avenue, Suite 200, Anchorage, Alaska, 99501-5903.
CC: Anu K. Mittal, Wash DC, US Government Accountability Office MittalA@GAO.gov
CC: Forman of the Grand Jury, C/O the Clerk of the Court 303k Street Anchorage AK

Exhibit AA

Salmon jet lures fund questions -
MARKETING: How has $29 million in federal money been spent so far?
Anchorage Daily News (AK)
October 6, 2005
Author: LIZ RUSKIN
Anchorage Daily News
Staff
Estimated printed pages: 5

The Alaska Fisheries Marketing Board, created by U.S. Sen. Ted Stevens in 2003, made a big splash this week with a high-profile project: a $500,000 grant to Alaska Airlines, mostly to paint a giant king salmon on one of its jetliners.
But what else the marketing board has bought with the $29 million in federal funds it has received isn’t so clear.
The law that created the board says AFMB must submit an annual report detailing its expenditures to the secretary of commerce. But the board’s executive director, Bill Hines, said he is not allowed to release the report to the public.
“A lot of that information is confidential and proprietary,” he said.
The board’s chairman is state Sen. Ben Stevens, R-Anchorage, who did not return telephone calls Wednesday.
His father, U.S. Sen. Ted Stevens, created the board in a 2003 appropriations bill, saying he wanted to help Alaska seafood compete against imported farm-raised stocks. The state’s commercial salmon industry was in crisis, with a value that had plunged 73 percent in a decade. The board was one of several initiatives aimed at reviving the industry.
Sen. John McCain, a regular critic of special funding programs Ted Stevens establishes for Alaska, took a shot at the marketing board when it was up for its second $10 million appropriation.
“Is there something wrong with these fish that warrants such an expensive program to convince us to eat them?” the Arizona Republican asked during debate last year.
The board’s structure, as Stevens established it in federal law, is unusual. The board is an independent nonprofit, and its members are appointed by the commerce secretary. Hines, the director, remains an employee of the National Oceanic and Atmospheric Administration.
The board’s money – about $10 million a year – comes from something called the Saltonstall-Kennedy Fund. The fund is derived from duties on imported fish and awards grants to develop American fisheries.
The Alaska Fisheries Marketing Board hasn’t produced an annual report for public review, Hines said.
It also has no official Web site, he said. Some of its meetings have been open to the public, he said, but the locations and meeting times aren’t advertised.
Hines did, however, provide a PowerPoint presentation that gave a general accounting of the board’s budget. The bulk of the money, $12 million, has gone to salmon processors, and more than half of that has gone to the processing titans: Ocean Beauty, Peter Pan, Icicle, Trident.
Hines said the board took a new “performance-based” approach with salmon marketing. Rather than award grants based on merit of individual proposals, the board offered grants based on the amount of salmon each processor had bought.
“It’s all based on the amount of fish purchased, so the more you purchase, the more you get,” he said.
The grants, though, do come with restrictions.
“They have to submit a proposal for how they would spend that money, and that proposal has to do with marketing,” Hines said.
Grantees have to file reports, which the board scrutinizes, he said. Information provided to the board is often sensitive, he said, because companies wouldn’t want competitors to know their plans.
The PowerPoint slides also show the board gave $4.5 million to the Alaska Seafood Marketing Institute, a state-chartered organization created in 1981, $3 million to a group that promotes Alaska ollock, and $1 million to promote herring in Japan. It also gave out numerous smaller grants.
Some of the grants, such as the money to promote a branding initiative called Genuine Alaska Pollock Producers or the Japanese herring campaign, have received attention in Alaska fishing circles.
Hines was willing to discuss how some of the companies proposed to spend their grants but said the full accounting was in the report he could not release.
“I am not allowed to just release that report,” he said. “That’s what I was told (when) I talked to folks in D.C.”
He didn’t want to be more specific about where the instruction came from.
“I don’t think that’s important,” he said.
He also said that the report didn’t belong to the board because he had filed the original, as required by law, with the Department of Commerce.
The Daily News has filed a formal request for the report from the Commerce Department and is awaiting a response.
Mark Vinsel, executive director of the United Fishermen of Alaska, said he’d like to be able to tell his members of the grants available through the marketing board.
“I’ve been looking forward to them having a Web site,” he said. “Without a Web site, I haven’t been able to regularly communicate to UFA’s 1,300-member e-mail list in the way we have with (other grant programs).”
Actually, the AFMB does have a Web site, although it’s still under construction.
The site alaskafisheriesboard.org contains information about the organization.
“It’s not an official Web site. It should not be launched,” Hines said when asked about it Tuesday. On Wednesday, the site was carrying a red disclaimer saying it was under construction and that “none of the information contained herein has been approved as official content.”
The site listed the agency’s 11-member board of directors and gave a partial breakdown of entities that received grants and for how much, although it doesn’t say what the grants were for. The AFMB board includes representatives of seafood companies, fisheries groups, Carrs/Safeway, Lynden Transport and former Ted Stevens aide Trevor McCabe, who is a business partner with Ben Stevens.
The official location of the agency’s office was also unclear. The bylaws on the unapproved Web site say the principal office is in Juneau, where Hines said he lives. Hines, though, said that the office is actually in downtown Anchorage and that the board pays for an apartment for him to stay in there. His business phone is his cell phone, he said, although the organization does have a phone in the Anchorage office.
He declined to disclose his salary, which is paid through the Department of Commerce. Hines said his board members do not receive salaries but are paid $500 per meeting, in addition to per-day expenses.
Ben Stevens, the board chairman, did not list his AFMB membership on his Alaska Public Offices Commission financial disclosure forms for the past two years. The APOC form requires legislators to list profit and nonprofit boards on which they serve. Stevens did list his membership on other nonprofit boards. He was appointed to the AFMB board in late 2003.
A spokeswoman for Ted Stevens said he recommended his son and other members of the marketing board to the commerce secretary for appointment, but she said the senator made his recommendations from a list Gov. Frank Murkowski sent.
The Alaska Airlines promotion is getting national attention, not all of it positive.
Sen. Tom Coburn, R-Okla., told ABC News this week that the money was a waste.
“I don’t think anybody’s going to buy Alaskan seafood because they see a fish on the side of an airplane,” he said in a segment broadcast Wednesday on “World News Tonight.”
Keith Ashdown, spokesman for Taxpayers for Common Sense, acknowledged the plane has a lot of “wow” factor. He e-mailed news of the publicly funded paint job, saying “We couldn’t make this up if we tried.”
Hines said the salmon jet has been a big hit. He called it a “flying billboard.”
“It’s advertising,” he said. “For four to six years, we’re going to have that plane flying our message.”
In fact, he said, he the message may outlive the board.
“In light of what’s going on today, with (Hurricane) Katrina, with Rita and other problems, I’m not optimistic that we’re going to get another appropriation this year,” he said.
The board was created when the market for Alaska fish was terrible, and it’s now much better, he said.
“We have fulfilled our mission,” he said. “We have run our course.”
Daily News reporter Wesley Loy contributed to this story. Reporter Liz Ruskin can be reached at lruskin@adn.com and Loy can be reached at wloy@adn.com.
Caption:
Sen. Ted Stevens
Caption:
Photo 1: ted stevens mug 11-03_100605.jpg
Edition: Final
Section: Main
Page: A1
Dateline: WASHINGTON
Copyright I 2005, Anchorage Daily News
Record Number: 903834910/06/05

Exhibit BB
Web posted Monday, November 3, 2003
Company aims at Asian market with candy-flavored salmon strips
By Laine Welch
For the Journal

Imagine a tender strip of smoked chum salmon with almond butter toffee flavoring. That is one of the products reportedly being pushed by Washington Governor Gary Locke during a trade mission to China. According to the News Tribune, the World Trade Center Tacoma packed samples of Ocean Candy All Natural Wild Salmon for the governor’s weeklong trip, hoping to impress Asian businessmen and make the jerky the next overseas sensation.
The concoction, which uses a secret formula created by Brown & Haley, Tacoma’s premier candy maker, won a 2000 Best of Show medal at the International Seafood Show in San Francisco. Creator Jack Prince said the idea came to him a few years ago when his previous careers as an Alaska salmon fisherman and fish broker in Los Angeles, and a later career brokering candy in China, crossed paths in his mind. “Candy and fish are big in Japan and elsewhere in Asia,” Prince said. “The idea I had was to swap out the brown sugar in the jerky recipe for natural candy flavoring.”
Working with his partner Mike Swenson, the men last spring formed Frontier Custom Foods Inc., and found a jerky maker who could handle the 13-hour cooking process. They enlisted help from the World Trade Center Tacoma, which has contacts to help nurture export markets with federal financial backing. Prince and Swenson’s goal is to produce 7,000 pounds a day, selling at a suggested retail price of about $1.69 for a 2-ounce pack. “It’s so good with a latte,” Prince said. “I want to try getting it into Starbucks. A lot of people like that sweetness in the morning without all the carbs.”
Other new seafood products making headlines at this year’s West Coast Seafood Show at the Long Beach Convention Center included caviar made from seaweed, salmon sausage and pepperoni and fried shrimp laced with pineapple. A big trend of the show was serving sustainable, “ocean-friendly” seafood, according to media reports.
The seaweed caviar is regarded as an alternative to the prized but endangered sturgeon roe. Gary Jonka of Noble Food, Inc. began manufacturing the imitation fish eggs just a few months ago. He compared his product to Ossetra, a pricey Russian caviar generally considered only one step below the renowned Beluga brand. Jonka said he’s marketing the product – a 4 ounce jar retails for about $10 – to Trader Joe’s, Whole Foods and Wild Oats.
Another product making a hit in more markets is salmon sausage and salmon pepperoni from Sea Products LLC of Kenai (the pepperoni can already be found at Whole Foods stores).
Robotic processing was also a popular draw at the Seafood Show. Large crowds watched the Vemag Robot 500 cut and shape food portions, then place them on a conveyor at an impressive pace. The Robot can form and cut crab cakes, for example, at a rate of about 130 portions a minute with a degree of accuracy of plus or minus 2 grams. Several distributors seeking to reduce expenditures on labor showed high interest in the Robot 500, said Jim Kerr, a salesman for Reiser, the Canton, Mass.-based company that makes the equipment.
Media covers crab
The red king crab fishery at Bristol Bay has gotten more attention from out of state media than ever before. Two reporters from the Seattle Post Intelligencer were providing daily reports from the F/V Exito, and the Discovery Channel had three camera crews covering the opening from two different fishing boats and a Coast Guard vessel. Reportedly, they got footage of the rescue of the crew of the F/V Raven that capsized at the start of the fishery. In 1999 the Discovery Channel did a program on the king crab fishery that proved to be one of its most popular shows.
Meanwhile, starting Oct. 15, a fleet of 252 boats braved gale-force winds to compete for the 15.7 million pound red king crab quota, up 70 percent from last year. The fishery was expected to last less than a week. Crabbers this year begrudgingly agreed to accept a price of $5.05/lb, down from $6.15/lb a year ago, the second highest price ever. In 1999, demand by Japanese buyers for red king crab to ring in the new millennium pushed the price to $6.25/lb.
Of the 250 boats that regularly participate in the Bristol Bay red king crab fishery (and the Bering Sea snow crab fishery), nearly 140 (55 percent) are home ported in the Seattle area. The value of the red and golden king crab fisheries, combined with snow crab, is estimated at $73 million to the region, according to the Alaska Crab Coalition.
Ben Stevens stumps for crab
The Seattle-based industry group that is pushing to gain the rights to purchase most of the Bering Sea king and snow crab harvest has put Alaska Senate majority leader Ben Stevens on its payroll. The Seattle Times reports that during the past two years, the North Pacific Crab Association has paid more than $80,000 in consulting fees to Stevens, a former crabber. “The crab association is largely funded by processing companies, including Trident Seafoods, Icicle Seafoods, Alyeska Seafoods, Norquest and four other operators. It is now focused on gaining congressional passage of a sweeping harvest reform that includes a controversial provision offering some two-dozen processors exclusive rights to purchase the Bering Sea crab harvest,” the Times reported. John Garner, the crab association’s director, said Ben Stevens is not being paid to lobby his father (Sen. Ted Stevens, R-Alaska) or any other officials in Washington. Instead, Ben Stevens is being paid to “network with the crab fleet,” Garner said.
Cruise ships should go wild
The Kenai Peninsula Borough Assembly believes cruise ships operating in Alaska waters should be offering their passengers wild Alaska salmon. The group intends to pass a resolution encouraging the seafaring tourist industry to do just that. Resolution 2003-112 notes the significant contributions made by the cruise ship industry to the economy of Alaska, and the opportunity for passengers to be exposed to the healthy benefits of Alaska wild salmon, reports the Peninsula Clarion.
One “whereas” clause takes aim squarely at Alaska salmon’s prime competition – farmed salmon. It notes “there is a vast health benefit difference between wild and farmed salmon, as farmed salmon are fed additives to develop the familiar pink meat color instead of the farmed ‘gray’ color, and farmed fish have been associated with pollution and with placing local wild fish populations at risk for disease.” The resolution also cites an increasing concern over the push toward genetic modification of farmed salmon.
Kodiak-based free-lance writer Laine Welch can be reached via e-mail at msfish@ptialaska.net.
Exhibit CC

Grant-seeking entrepreneurs sell salmon ideas
STATE: $10 million to help boost industry.

The Associated Press

(Published: December 8, 2003)
JUNEAU -- Pink salmon burger promotions and a plan to send Native-style smoked salmon to China are among the 111 proposals the state has received for its Alaska Salmon Marketing Grant Program.
The state plans to award about $10 million in marketing matching funds to private companies. The state received grant applications requesting more than $20 million, said Glenn Haight, fisheries development specialist with the Department of Community and Economic Development.
The program is part of Gov. Frank Murkowski's $50 million salmon-industry revitalization strategy, which has included aid for individual fishermen, aid for struggling communities, and economic-development grants.
The Major Grant Program is directed at larger companies, does not carry a funding limit, and requires a 50 percent match.
Mini Grant Program awards, which will focus on mid-sized companies, will range up to $200,000 and require a match of one-third.
Kake Foods teamed up with Tlingit and Haida Central Council and Raven's Table, a Yakutat smokery, in its request for $56,000 to market smoked salmon in China.
Don Bremner, a Central Council staff assistant, said a Chinese seafood company approached council staff and expressed interest in importing Native-style smoked salmon for distribution to Chinese schoolchildren.
The partners intend to start distributing smoked salmon strips and nuggets in Shanghai in hopes of expanding to other provinces, Bremner said.
Seattle-based Trident Seafoods submitted nine grant requests totaling more than $2 million. Most have to do with promoting the company's pink-salmon burger, said marketing director John Salle.
Trident requested more than $1 million for promoting its salmon burger at Costco, which already carries the product in the southwestern United States and has plans to distribute it in the Northwest.
Trident also proposed a salmon-burger promotion at Joey's Only, a Canada-based seafood restaurant franchise.
Exhibit DD

Stevens discloses board work -
ETHICS STATEMENT: Fisheries panel paid for plane's paint job.
Anchorage Daily News (AK)
October 29, 2005
Author: LIZ RUSKIN
Anchorage Daily News
Staff
Estimated printed pages: 2

State Senate President Ben Stevens amended his disclosure statement to the Alaska Public Offices Commission this month to list his membership on the Alaska Fisheries Marketing Board.
The board -- created in federal legislation by his father, U.S. Sen. Ted Stevens -- was in the news recently for funding the painting of an Alaska Airlines jetliner to look like a giant salmon. A follow-up story noted that Ben Stevens, chairman of marketing board, didn't report his membership on the public disclosure form legislators are required to file with APOC.
Stevens, in a telephone interview Friday, told the Daily News he did disclose his board membership when he was supposed to, but with the Alaska Legislative Ethics Committee, not with APOC.
The Daily News asked whether it was an oversight that he left the information off his APOC report.
"My answer to that is, why don't you go out and look at all the other legislators that have done the same thing?" he said.
Brooke Miles, executive director of APOC, said disclosure with the Legislature does not substitute for filing with her agency.
Legislators have to file certain forms with the Legislative Ethics Committee and other information with APOC. There is some overlap when it comes to reporting board memberships. APOC requires legislators to list every board they serve on. The Ethics Committee just requires disclosure of board service for an organization "that has a substantial interest" in the member's legislative activities.
Stevens, in response to an Oct. 7 request from APOC, amended his APOC report covering 2004 but not the one for 2003.
The Fisheries Marketing Board "was not a recognized or organized corporation in the state of Alaska in 2003," he wrote.
But in his disclosure to the Legislature early this year, he said his service on the marketing board began in September of 2003.
He told the Daily News that's when the secretary of commerce appointed him to the board "and it didn't become organized until the papers were filed and on record with the state."
Miles said he should have reported the information both years.
"If you're on a board, whether it's Alaskan or not, you're required to put it down," she said. "The statute doesn't say it has to be incorporated in Alaska."
Stevens said he is being unfairly singled out.
"The APOC filings are so complex and so convoluted nobody understands what you're supposed to file with them," he said. "You ought to go look through all 60 legislative APOC filings and compare them to the ones I filed and see who files them more accurately than me."
Reporter Liz Ruskin can be reached at lruskin@adn.com.
Caption:
Stevens
Caption:
Photo 1: SENSTEVENS_102905.jpg
Edition: Final
Section: Alaska
Page: B1
Dateline: WASHINGTON
Copyright (c) 2005, Anchorage Daily News
Record Number: 921919710/29/05

Exhibit EE

http://www.atsea.org/
OUR ASSOCIATION
The At-sea Processors Association (APA) represents U.S.-flag catcher/processor vessels that participate in the healthy and abundant groundfish fisheries of the Bering Sea/Aleutian Islands management areas and in the west coast Pacific whiting fishery. Our principal fishery is the mid-water pollock fishery – the largest fishery in the U.S. The ability to both harvest, and process at sea, allows us to produce affordable seafood products that meet the highest standards of quality. Our primary products are fillets, surimi (a fish paste used to make imitation crab and other analog products), roe and fishmeal.
The At-sea Processors Association is committed to working with fishery managers, scientists, environmentalists, and members of the fishing industry to ensure the continued health and sustainability of our marine resources. For an overview of conservation initiatives our association has championed, go to Issues Page.

APA MEMBER/VESSEL LIST
Company Vessels
Alaska Ocean Seafood, Inc.
2415 T Avenue
Anacortes, WA 98221
(360) 293-4677, Fax: (360) 293-6232 Alaska Ocean
American Seafoods Company
Market Place Tower
2025 First Avenue, #900
Seattle, WA 98121
(206) 448-0300, Fax: 448-0303 American Dynasty
American Triumph
Northern Eagle
Northern Hawk
Northern Jaeger
Katie Ann
Ocean Rover
Arctic Storm Management Group, LLC
400 North 34th Street, #306
Seattle, WA 98103
(206) 547-6557, Fax: (206) 547-3165 Arctic Fjord
Arctic Storm
Glacier Fish Co., LLC
1200 Westlake Avenue N., #900
Seattle, WA 98109
(206) 298-1200, Fax: (206) 298-4750 Northern Glacier
Pacific Glacier
Highland Light
3600 15th Avenue West, Suite 300
Seattle, WA 98119
(206) 216-0220, Fax (206) 216-0988 Highland Light
Starbound LLC
5470 Shilshole Avenue NW
Seattle, WA 98107
(206) 784-5000, Fax (206) 784-5500 Starbound
Trident Seafoods
5303 Shilshole Avenue NW
Seattle, WA 98107
(206) 783-3818, Fax (206) 781-7883 Kodiak Enterprise
Island Enterprise
Seattle Enterprise
American Enterprise
U.S. Enterprise

APA Staff Directory
Seattle
Kevin C. Duffy - Executive Director
Ed Richardson, PhD. -- Resource Economist
Michelle Savey -- Seattle Administrator
Allison Rhyder - Executive Assistant
Paul MacGregor -- General Counsel
4039 21st West, Suite 400
Seattle WA 98199
(206) 285-5139
apa@atsea.org
Washington D.C.
Jim Gilmore -- Public Affairs Director
1735 New York Avenue NW, Suite 500
Washington, D.C. 20006
(202) 661-3975
apa@atsea.org
Anchorage
431 West 7th Avenue, Suite 201
Anchorage, AK 99501
(907) 276-8252
apa@atsea.org
Dutch Harbor
Shirley Marquardt -- Community Affairs
P.O. Box 920021
Dutch Harbor, AK 99692
(907) 581-5880
smarquardt@ansi.net

APA ASSOCIATE MEMBER PROGRAM
With more than 60 participating companies, the APA Associate Member Program provides important networking opportunities for companies doing business with seafood harvesters/processors. In addition to fostering goodwill and good business between APA members and vendors, the program also keeps businesses informed about important issues and opportunities in the fishing industry.
Associate membership dues are assessed annually in January. The three categories of membership, based on an annual level of economic interaction with APA members are:
• A – Membership for doing business under $50,000/year: $500
• B – Membership for doing business from $50,000 to $500,000: $1,000
• C – Membership for doing business in excess of $500,000: $2,000
For more information or an application packet, contact APA.

Member List
How to become an APA Associate Member
Catcher/processor illustration
Contacting APA
Glossary of Industry Terms
BACK

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Exhibit FF

Insert lobbying report

1997 DATA ( 2000 Data • 1999 Data • 1998 Data ) ALSO AVAILABLE
TRIDENT SEAFOOD CORP

Lobbying Firms Hired By Trident Seafood Corp :
Lobbying Firm Hired Amount Spent Subsidiary(Lobbied For) Lobbyist
Robertson, Monagle & Eastaugh
<$20,000 - Gilman, Bradley D
Marks, Rick E

Stevens, Ben A
<$20,000 - Stevens, Ben A

INDUSTRY: Unknown

To find VECO/Stevens lobbyist info go to:

http://www.opensecrets.org/lobbyists/lobbyist.asp?ID=22731&year=1997

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1997 Data( ) ALSO AVAILABLE
STEVENS, BEN A
Total Lobbying Income: $30,000
Groups Which Have Retained Stevens, Ben A:
Client Business Total Spent Subsidiary (lobbied for) Lobbyist
Alaska Groundfish Data Bank
$0 Alaska Groundfish Data Bank Stevens, Ben A

Aleutians East Borough
$0 Aleutians East Borough Stevens, Ben A

City of Seward
$0 City of Seward Stevens, Ben A

City of Unalaska
$0 City of Unalaska Stevens, Ben A

Lynden Inc
$10,000 Lynden Inc Stevens, Ben A

Pacific States Marine Fisheries Comm
$0 Pacific States Marine Fisheries Comm Stevens, Ben A

Tom Casey Consultants
$0 Tom Casey Consultants Stevens, Ben A

Trident Seafood Corp
$0 Trident Seafood Corp Stevens, Ben A

VECO Corp
$20,000 VECO Corp Stevens, Ben A

Exhibit GG

Option Agreement can be viewed at: http://www.adn.com/images/pdf/option.pdf

Exhibit HH

BENS SECRET FISH DEAL
State senator helped steer Adak pollock to a company he had financial stake in
By RICHARD MAUER
Anchorage Daily News
Published: September 18, 2005
Last Modified: September 18, 2005 at 06:32 AM
State Sen. Ben Stevens held a secret option to buy into an Alaska seafood company at the same time his powerful father, U.S. Sen. Ted Stevens, was creating a special Aleutian Islands fishery that would supply the company with pollock worth millions of dollars a year.
The pollock allocation alone was projected to provide the company with $1.5 million in profits this year and $3.7 million in 2006, the company's founder said in an affidavit in March, before problems involving the company and the availability of fish cast doubt on those numbers. Under his deal, Ben Stevens would have been entitled to one-fourth of the profits of the company, Adak Fisheries.
During the time he held the option, the company grew in value from about $2 million to at least $8.5 million, according to an owner and court documents.
A copy of Ben Stevens' option agreement surfaced as one of hundreds of documents submitted in the last few months as evidence in several lawsuits involving the company, its owners, its landlord and government regulators.
In the past few weeks, Ben Stevens' attempt to obtain ownership in Adak Fisheries has been the subject of news stories on KTUU-Channel 2 and in the Daily News -- coverage denounced by Ted Stevens at a recent news conference.
The secret option was a surprise to officials of the Aleut Corp., the intended beneficiary of the pollock fishery, they said, when they learned of it late last year. The company, the regional Native corporation for the Aleutian Islands and the Pribilofs, had invited Ben Stevens to serve as a director of Aleut Enterprise Corp., its subsidiary charged with the economic development of the former Navy base at Adak.
As a director of Aleut Enterprise Corp., and without disclosing his conflict of interest, Ben Stevens voted to transfer the pollock rights to Adak Fisheries and argued against the Aleut Corp. claiming a larger share of the profits, according to Aleut officials in court testimony or interviews with the Daily News.
Ben Stevens has repeatedly declined to answer any questions from the Daily News about the option or any aspect of his activities involving fish processing at Adak or the Aleut corporations.
"My attorneys have advised not to discuss it because it's before the court," he told reporters two weeks ago.
Nevertheless, Stevens discussed the option on an Anchorage talk radio show last week and asserted he had no obligation to disclose it.
In a deposition Aug. 10, Aleut Corp.'s corporate counsel, Roger DuBrock, said he first heard rumors about Stevens' option in summer or fall 2004, after Stevens left the Aleut Enterprise Corp. board. He said he began worrying about the consequences if it were true and word leaked out.
"My concern is that if it ever became public knowledge that Sen. Ted Stevens got legislation passed for a pollock allocation that ended up getting assigned to Adak Fisheries, and that Ben Stevens, his son, had an ownership interest in that company, there would be all kinds of unfavorable newspaper reports written that might damage Senator Stevens and might damage Ben Stevens and might damage the Aleut Corporation," DuBrock testified.
TED STEVENS DENIES A LINK
There is no evidence that Ted Stevens created the pollock allocation to benefit his son. In angrily denying any such link, the elder Stevens told reporters on Sept. 9 that doing so would be a crime.
In fact, he said, he never discussed the pollock allocation with his son. He said he only learned of the option from recent news reports.
Stevens said he pushed the measure to spur the economic development of Adak.
"The people I talked to are (Aleut fish consultant Clem) Tillion and the (federal North Pacific fishery management) regional council people, and I'll be glad to show you the memos that (Senate staffer) Matt Paxton wrote to me back in '03," Stevens told reporters.
The next business day, Monday, when a Daily News reporter asked to see the memos, Stevens rescinded the offer.
George Lowe, Ted Stevens' chief of staff, offered Tuesday to go "off the record" to explain why Stevens now will not provide the documents, but the Daily News declined to accept the information under such a restriction.
Stevens' spokeswoman, Courtney Boone, said Stevens' offer to provide the documents was valid only during the course of the Friday press conference. Stevens said nothing about a time limit on access to the documents at the time, although he did say the press conference would be his last comment on his son's option.
A SECRET OPTION
Corporations often grant stock options to executives as an incentive for performance that raises the value of the stock. An option typically gives the holder the right to purchase shares at a specified price during a given period of time. The price may not be discounted at the time the option is given, but the option generally anticipates a rise in value.
Though Adak Fisheries was a limited liability company -- more like a partnership than a corporation with stock -- Ben Stevens' option was similar to a stock option. It gave him the right to buy a 25 percent stake in the fish processing company for an immediate payment of $50,000 and another $450,000 paid over time. The option does not specify an interest rate or term for the note.
Stevens had 29 months, until Dec. 31, 2004, to exercise the option.
Among the unresolved questions now subject to litigation is whether Stevens' option is valid.
Until two weeks ago, when a judge ruled in one of those lawsuits, Stevens was president of Adak Fisheries, for which he was paid $10,000 a month, according to a company owner's testimony.
Disclosure of Ben Stevens' option adds new political and ethical dimensions to a controversy that began in fall 2003, when a plan by Sen. Ted Stevens to allocate pollock to the Aleut Corp. surfaced in Congress.
At the time, Ted Stevens was chairman of the Senate Appropriations Committee, a powerful position from which he was extraordinarily able to push legislation through Congress. By attaching unrelated legislation to a vital spending bill and allowing it to go along for the "ride," he could bypass the usual process of introduction, committee hearings and waiting for debate to be scheduled on the Senate floor -- stopping points where opponents could slow, change or kill the measure.
The pollock allocation to the Aleut Corp. was such a rider.
The rider caught the attention first of Alaska reporters and then the national press because of Ben Stevens' known connections to that part of the fishing business.
Those connections were public because, under state law, Alaska legislators must disclose their business interests. Ben Stevens had reported that, between 2002 and 2004, his consulting company, Ben Stevens & Associates, received $280,000 from Adak Fisheries.
In addition, in 2000 and 2001, three related companies -- NorQuest Seafoods, Adak Fisheries Development Corp. and Adak Seafoods -- had paid $77,500 to his consulting firm.
Ben Stevens also reported his service on the board of directors of Aleut Enterprise Corp., for which he received a small fee.
In 2003, the media reported on Ben Stevens' consulting relationship with Adak Seafoods in connection with his father's pollock rider. At the time, Ted Stevens dismissed any connection between his fish rider and his son's consulting activity, and any criticism of their activities.
"I don't care what they say about me. My son's now a politician. ... He doesn't care what they say about him," Stevens said in one of those stories. "Neither one of us is getting rich. That's for damn sure. And we're doing what we think is right."
At the time, Ben Stevens' year-old option was still secret, Aleut officials said.
Adak Fisheries was growing quickly in value -- from an estimated $1 million to $2 million in 2002 to at least $8.5 million in 2004, according to one owner, Kjetil Solberg. As the value of the company increased, so did the value of Stevens' option.
And Adak Fisheries had the potential to grow much more, according to Solberg.
With the exclusive right to catch and process pollock, and the lease to do it at Adak, the company could ultimately be worth as much as $100 million, he said.
A Rider on fishing rights
The option eventually came to the attention of Adak Fisheries' landlord, the Aleut Corp., and raised conflict of interest concerns.
In the mid-1990s, the federal government began the process of transferring ownership of the decommissioned Navy base on Adak to the Aleut Corp. In 1997, the Aleut Corp. created a subsidiary, Aleut Enterprise Corp., to manage conversion of the base to civilian use. Ben Stevens was invited twice to join the board of directors of the Aleut Enterprise Corp., serving his longest stint from June 2001 until he resigned in July 2004, according to a company spokesman.
The Aleut Enterprise Corp. first leased some of its Adak real estate to Adak Fisheries on Dec. 28, 2001.
On Oct. 24, 2003, the rider allocating pollock rights to the Aleut Corp. was still pending in Congress but expected to pass. The Aleut Enterprise Corp. agreed to transfer the rights to those fish -- worth an estimated $10 million a year -- to Adak Fisheries as part of the lease agreement between the companies.
There were three directors of the Aleut Enterprise Corp. when it voted to assign those rights to Adak Fisheries. One of them was Ben Stevens, according to Aleut Corp. spokesman Curtis Smith.
Aleut Corp. chief executive David Jensen, who also serves as chairman of the Aleut Enterprise Corp. board, testified in a deposition on Aug. 9 that Ben Stevens never disclosed that he had an option to become a major owner of Adak Fisheries.
Jensen said when he found out about the option, in December 2004, he was "floored."
The secrecy surrounding the option was no accident. The parties to the deal pledged to keep it secret. In the section of the agreement headed "Confidentiality," it says:
"This agreement and its terms are to be kept strictly confidential, except to the extent necessary for any party to comply with public reporting or other requirements related to public service."
Though the language referring to public service suggests Stevens considered reporting the option in his required financial disclosures as a state senator, he never did. A spokeswoman for the Alaska Public Offices Commission said the law is unclear about whether disclosure of such an option is required.
ORIGINS OF THE DEAL
Ben Stevens was brought into the Adak deal by a plain-speaking Norwegian seaman who saw a big opportunity in a relatively untapped fishery. The Norwegian, Kjetil Solberg, recognized that Ben Stevens could be a powerful ally -- even before, he says, he knew Ben Stevens was the son of Sen. Ted Stevens.
Solberg, now 40, was born in the far-north Norwegian coastal town of Narvik and went to sea when he was 15. Later, he graduated from the Royal Norwegian Naval Academy and served in the special forces of the Norwegian navy.
After the navy, Solberg went into the sea-transport business, where he occasionally found himself in Alaska, picking up frozen cod for delivery in Europe. In Dutch Harbor in 1998, he ran into a fisherman who told him about Adak.
"He said if you go to Adak and build a fish plant there, you'll create the cod capital of the world. Naive immigrant as I was, I believed him," Solberg said, "but he was right."
With the end of the Cold War, the U.S. Navy was closing its sprawling base there, while the Aleut Corp., which hoped to obtain the site in a land trade with the U.S. government, was looking for economic partners.
"And I went home, and I looked at the globe," Solberg said. He saw the future.
"That's where you want to be if you want to do shipping in 2025 and fishing," he said. "It's a perfect location."
While an Alaskan might view Adak as the remotest of the remote -- 135 miles closer to the Kamchatka capital of Petropavlovsk than to Anchorage -- to Solberg, it looked like the on-ramp to a freeway connecting major ports on both sides of the Pacific.
"It's right there on the Great Circle (shipping route). Several times I crossed just south of Adak on my way from Japan, Tokyo Bay, to the U.S. Northwest and the Bay Area," he said.
Dutch Harbor, 450 miles east at the head of the Aleutian chain, is the nation's leading fishing port, serving the massive pollock fishery in the Bering Sea. To Solberg and the Aleut Corp., it wasn't a farfetched dream that the old Navy base at Adak could be transformed into another fishery hub well situated for transport.
Solberg flew to Adak in April 1998. He couldn't find a single fishing vessel, so he borrowed a rubber dinghy and a fishing pole and caught more cod than he dreamed possible.
"I was on top of an undetected chest of treasure," he said. "Cod is called 'the gold of the ocean' in Norway."
As he flew out of Adak, he drafted a letter to the Aleut Corp. expressing his desire to embark on a new line of work: fish processing.
By the end of 1998, Solberg had raised nearly $1 million by selling his Norwegian businesses and real estate, and moved his family to America. Within a year, with a Norwegian friend, Irgen Iverson, Solberg launched Adak Seafoods by converting an old Navy building at the edge of the Adak harbor into a processing plant.
In November 1998, the same Dutch Harbor man who told him about Adak introduced Solberg to Ben Stevens. Stevens had limited involvement in Alaska public policy at the time, primarily the politics of fishery regulation and marketing. He had fished for salmon in Bristol Bay and captained a crab boat in the Bering Sea.
When he met Solberg, Ben Stevens was building a career working with regulatory agencies and giving advice -- some of it on issues in which his father was involved. At that point, Solberg said, he didn't know who Ted Stevens was.
When Solberg did learn about Alaska's senior U.S. senator, he said, he didn't make the connection between father and son. In fact, Solberg was angry with legislation that Ted Stevens had recently pushed through Congress -- the American Fisheries Act. The law Americanized the fishing fleet nationwide and divided up the vast pollock resource of the Bering Sea and Aleutian Chain among competing U.S. fishing groups.
Because it based fishing rights on past catches, and the Navy hadn't allowed fishing near Adak, the law excluded Solberg and others from a potentially lucrative pollock fishery in the area.
"It was quite some time after I met him (Ben), I had to ask him if he was related to that guy over there that was doing all these terrible things to me. And he said, 'Yeah, that's my dad.' "
Ben Stevens' advice to Solberg was to buy and process under-used species like brown crab and cod from local waters and be patient about changing the law, Solberg said.
In 1997, the Aleut Corp. created the Aleut Enterprise Corp. Its president and chief executive was Sandra Moller, a civil engineer educated at the University of Alaska Fairbanks.
Leaders of the parent company thought it would be helpful for the subsidiary to bring in directors with special expertise, Moller, 41, said recently.
Both Ben Stevens, with his fishing background and family connection to Ted Stevens, and Art Hackney, an Anchorage political and marketing consultant, were named as outside directors of the Aleut Enterprise Corp. on Oct. 20, 1999.
Hackney served through early 2001, according to a company spokesman. Stevens left after a year and then rejoined the board June 7, 2001. Five weeks later, Gov. Tony Knowles appointed him to a vacant state Senate seat from Anchorage.
Solberg, meanwhile, had begun the first in a series of troubled partnerships.
He and his friend Iverson sold Adak Seafoods to the established Seattle company, NorQuest Seafoods, which then created a new company, NorQuest-Adak Inc. As payment, Solberg said, he got 45 percent of the new company. But NorQuest-Adak fell behind in its rent to the Aleut Enterprise Corp., and Solberg again assumed responsibility for the plant.
In December 2001, he found another Seattle partner, Icicle Seafoods Inc. Together they created another company, Adak Fisheries LLC, with each partner owning 50 percent.
The new company signed a new lease with the Aleut Enterprise Corp. on Dec. 28, 2001, agreeing to pay rent of $9,000 a month to start. Beginning in 2004, the lease required Adak Fisheries to pay an additional 30 percent share of its profits to the Aleut Enterprise Corp. after deducting the base rent and capital improvements.
CONSULTING AT $10,000 A MONTH
As a new state senator, Stevens was required to disclose his sources of income beginning in 2000. Those documents show that Solberg's companies had paid him $37,000 in consulting fees that year, an amount that increased in the ensuing years.
Solberg said Stevens was worth the money.
"The good thing with Ben is that he's extremely knowledgeable when it comes to fisheries," Solberg said. "He fished out there for several years, battled the same storms."
Solberg said Stevens worked as a consultant, helping him with regulatory issues and business, and traveled to Europe with him to meet fish buyers. Stevens didn't keep track of hours or prepare formal reports, Solberg said.
"He's sending me a lot of e-mails -- kind of reports," Solberg said.
Stevens was paid a flat fee of $10,000 a month.
In particular, Solberg said, Stevens went to bat for him on crab issues before the federal North Pacific Fishery Management Council "and the state, the Board of Fisheries," Solberg said. He said Stevens lobbied the state Fish Board on his behalf before he was a state senator.
Stevens did other tasks that could only be done in Anchorage while Solberg was out in Adak, including picking up fishermen at the airport.
"He was a friend who helped while I struggled," he said. "Maybe he believed in me. Who knows?"
The 46-year-old Stevens managed to get his work done despite other demands on his time, Solberg said.
"He is up at 4 o'clock in the morning working out, he can drink beer till after midnight and then be up at 4 o'clock in the morning. He does a lot. I can do a little stuff, but sometimes I need to rest a little bit, and both him and his old man -- Ben just keeps going."
On July 29, 2002, Solberg and Icicle offered Ben Stevens the chance to own part of Adak Fisheries.
They drew up an option that gave Stevens until Dec. 31, 2004, to pay $50,000 down, and $450,000 over time, to buy 25 percent of the company. His share would come equally from the other partners, whose holdings would be reduced to 37 ½ percent each.
The agreement was signed by Solberg, Stevens and Icicle president Don Giles.
The option document notes that Adak Fisheries had been formed with an initial investment of $2 million. Solberg said the company was probably worth half that much at the time Stevens obtained the option.
Reciting the reasons for granting the option, the document expresses hope that Stevens will help increase the company's worth.
"Stevens is a consultant with extensive experience in the Alaska fisheries and the skills to help increase the value of the company, and has consulted with Solberg regarding fish processing opportunities in Adak, Alaska, for several years," it says. "In recognition of Stevens' contribution to the company, and incentive for the further efforts on behalf of the company, Icicle and Solberg are prepared to grant Stevens the option as set forth in this agreement."
The company grew quickly, primarily on its cod processing, though it also processed halibut and sablefish. Valuable pollock was still off limits. In the first few months of 2004, the company showed a $2.3 million profit, Solberg has said, though it ended that year with a loss, primarily because of the business failure of a buyer in Norway that cost Adak Fisheries $900,000.
Solberg wasn't satisfied with just processing cod and other under-utilized species. As a finished product in the countries that eat salted cod -- mainly Norway, Portugal and Brazil -- it's a valuable food. But the best profit is in the final processing in Norway, Solberg said, not the preliminary freezing his plant was doing. Crab was much more lucrative, but the volumes were small, he said.
Getting a share of the valuable pollock catch dominated by the Seattle-based fleet could greatly improve his prospects. Pollock, a white-fleshed bottom fish, is highly valued in Asia.
"Ben and I worked very hard on getting the pollock allocation through Congress," Solberg said in an interview. "It's no secret."
Solberg said Ben Stevens gave him advice, but to his knowledge didn't personally take Adak Fisheries' case to Washington or to his father in particular.
For the allocation to pass into law, Solberg has asserted, it wasn't enough that the fish go to the Aleut Corp. The Native corporation also had to assure Congress that it had a solid long-term lease with Adak Fisheries specifically, or "it would not have been eligible for, nor would it have received, the allocation," Solberg's attorney said in a court filing in July.
At the time, Ted Stevens said giving the pollock to Adak was important for the state, for the Aleut people and for making use of a military installation that cost taxpayers more than $3 billion.
Aleut officials and Solberg stressed that processing the fish on shore would promote long-term stability for Adak's economy. There was only one onshore processor on Adak: Adak Fisheries.
In October 2003, with Ted Stevens' $10 million pollock rider pending in Congress, a deal was struck: The Aleut Enterprise Corp., with Ben Stevens voting as a board member, amended its lease to assign the prospective pollock allocation to Adak Fisheries.
In return, Adak Fisheries' base rent doubled to $18,000 a month and the company agreed to make additional investments in the processing plant.
Moller, the Aleut Enterprise Corp. president, said she wanted an additional change in the October 2003 agreement: a bigger share of profits after rent and capital investments were deducted. The original lease called for a 70-30 split of profits: 70 percent for Adak Fisheries, 30 percent for Aleut Enterprise Corp. She proposed a 50-50 split.
"Our argument was that there was a lot to do on Adak. Lots of improvements, lots of things that need to be done, and it's a partnership, 50-50," she said in an interview.
But Stevens, she said, "was instrumental" in convincing her to let Adak Fisheries keep 70 percent of the profits.
CONCERNS AT ALEUT
Moller said she and other Aleut officials knew Stevens worked as a consultant to Adak Fisheries, but they had no idea, even as he voted on her board, that he had a personal economic interest in the company.
"Kjetil came to a meeting we all had once, with Ben as his consultant, and I asked him, "Well, what's Ben do,' because I think he might've been on our board at that time, but I don't remember. He said, 'Oh, you know, lobbyist, and stuff like that.' "
By coincidence, on the day the Aleut Enterprise Corp. board was scheduled to assign the pollock rights to Adak Fisheries, a story appeared in the Daily News about Ted Stevens' pollock rider pending in Congress. The story mentioned Ben Stevens' consulting relationship with Adak Fisheries.
Moller said she read the story with concern. She said she expressed her worries to David Jensen, the Aleut Corp. chief executive and the chairman of her board of directors.
"This is blatant, front-page news," she recalled, urging him to get Stevens to "put it on the table."
Jensen took up her request, she said. During the meeting, Jensen asked Stevens directly whether he had any conflicts of interest other than his consulting income from Adak Fisheries.
Stevens said he didn't, Moller said.
The pollock rider passed in January 2004. Federal fishery regulators initially told the Aleut Corp. the company could obtain more than 15,000 tons of pollock in 2005 and the same in 2006, Moller said.
Despite the good news, Adak Fisheries was going through turmoil.
"They wanted to own everything themselves," Solberg said of his Icicle partners. "And I fought back and bought them out."
Solberg couldn't afford the takeover on his own, so he found another partner, Aleutian Spray Fisheries Inc., also of Seattle.
Cary Swasand, the chief executive of Aleutian Spray, testified recently that he first discussed buying into Adak Fisheries in a meeting with Solberg and Stevens on his boat in Seattle on May 1, 2004.
Swasand said he reluctantly agreed to buy in. He became less troubled, he said, when Solberg agreed that Aleutian Spray would have two votes on the Adak Fishery board to Solberg's one, giving Swasand control of the partnership.
So, in simultaneous transactions on June 3, 2004, Icicle sold its 50 percent share back to Solberg for $4.3 million, and Solberg immediately sold it to Aleutian Spray for the same price.
Solberg said he thought the 50 percent share was underpriced -- the company was probably worth $10 million at the time, he said.
If Solberg's estimate is accurate, it would mean the value of Stevens' option had grown from $250,000 to $2.5 million in less than two years.
Solberg said he told Aleutian Spray's president, Swasand, about Ben Stevens' option and Swasand agreed to honor it. Swasand has testified that he learned of the option during the meeting on his boat, but whether he agreed to honor the option is an issue to be decided in one of the lawsuits. Swasand, his attorney John Young and his son Chris, all of whom are deeply involved in Adak Fisheries today, have declined to answer questions about the option because of the ongoing litigation.
On Nov. 16, 2004, Stevens attempted to exercise his option, sending a $50,000 check to Swasand, according to court documents.
The check was still in the Aleutian Spray office in Seattle in December when David Jensen, the Aleut Corp. chief executive, paid a visit.
The 2001 lease between the Aleut Enterprise Corp. and Adak Fisheries had a 33-year life. But because it was signed while the federal government still owned the land, it required a complex cascade of real estate transactions involving five entities to remain in effect. The lease contained a clause saying it would terminate when the land transfer to the Aleut Corp. was completed. That clause also required the parties to negotiate a new lease with substantially the same provisions as the old, taking into account changed conditions.
'I WAS FLOORED'
The transfer of the Navy base occurred March 17, 2004. The Aleut Corp. declared the lease void and began negotiations on a new one. But the talks dragged on, which is why Jensen visited Aleutian Spray in Seattle in December of last year. He had thought that the Aleut Corp. might propose to take a 30 percent ownership stake in Adak Fisheries and reduce the rent to $1 a year, according to a Sept. 9, 2005, affidavit by Jensen in one of the court cases.
It was there that he first learned of Stevens' option, he testified in the deposition. He was shown the $50,000 check, No. 115, and Stevens' demand letter. That suspended any talk of ownership for the Aleut Corp., since it was suddenly unclear whether 30 percent of the company was even available, he said.
"I didn't say anything other than I was floored," he said. "I had no idea of it."
Jensen also was confronted with a significant ethical issue, he said.
"Had I known about an option or ownership issue, that would have been a real problem," he said at the deposition. As far as he had known, he said, "Mr. Stevens was a consultant for Adak Fisheries, not an owner."
"He was on the board of the directors of AEC (Aleut Enterprise Corp.) ... you can't be on the board and serving your own personal interests. That wouldn't have been acceptable."
Solberg said he and Ben Stevens discussed the option with Jensen when the three traveled to Europe together in summer 2003.
Jensen insisted in his deposition that he never knew about the option until last December. At one point in his questioning, Adak Fisheries attorney Bruce Johnston pressed Jensen about whether Ben Stevens disclosed the option at a meeting in Anchorage in 2003. Jensen held firm.
"I remember him coming and talking to Roger (DuBrock) and I in my office, and he wanted to have an arrangement with Solberg," Jensen said.
"Are you telling me, Mr. Jensen, that if Mr. Stevens were to testify that he did, in fact, tell you about that option, that you would say directly that he is lying?" Johnston asked.
"I would say that he did not tell me about an option," Jensen said.
"Are you telling me that if he were to swear that he told you that, you would swear in a counter sense that he was lying?" Johnston asked.
"I'm not going to call him a liar. I'm not going to tell -- I'm not going to say that I heard him say the word 'option.' Because I never heard 'option.' I have never heard that from him," Jensen said.
While Ben Stevens told reporters Sept. 8 that he couldn't discuss the case, last week he spoke by telephone to talk show host Dan Fagan on KFQD-AM and asserted that he had no requirement to disclose the option to the Aleut Enterprise Corp. The comments were rebroadcast Friday on KTUU Channel 2.
"I didn't own any interest" in Adak Fisheries, he told Fagan. "I owned an option that had to be granted. It was a right to buy under an agreement that the owners would agree to sell to me."
An expert on business ethics and the law, professor Daniel Kane of George Washington University in Washington, D.C., said conflicts involving outside directors like Stevens are not rare in business but are remedied by disclosure.
"He has a duty to tell the other directors," Kane said. "Why does it have to be a secret if it's up and up? ... It definitely could raise ethical questions of what the hell is going on."
Alaska corporate law also provides that directors must disclose conflicts to other directors and shareholders. Failing to do so opens the door to a lawsuit that could void contracts or transactions touched by the conflict of interest.
Moller, the Aleut Enterprise Corp. president, said she first learned about the option in December 2004. She was having coffee with Young, the attorney for Aleutian Spray, when he told her about it.
"I was astounded," she said. "He (Stevens) was on our board and he was apparently exercising a personal right into something that he should've been looking at as a board member. He should have at least disclosed it.
"A lot of what we did over the last five years at the board level was dealing with fisheries," Moller added. "We did have several meetings, throughout several years on what to do with the fish plant, everything from NorQuest to Icicle and Aleutian Spray."
As a board member, Stevens was privy to the discussions and voted on matters involving those Solberg companies.
Moller said Stevens signed a conflict-of-interest statement for his board service and in it failed to disclose the option.
APOC TO WEIGH IN
On Aug. 3 of this year, five days after the Daily News contacted his lawyer about the option and three years after he was offered it, Stevens asked the Alaska Public Offices Commission staff for the first time whether it was something he needed to report, according to Christina Ellingson, the agency's assistant director.
Ellingson said she told Stevens the law wasn't clear. While it specifically requires disclosure of options to purchase real estate, she said, the law doesn't specifically require the reporting of an option to buy a business.
Stevens argued to the public offices commission staff that he shouldn't have to report the option because it couldn't be sold and therefore "had no intrinsic value," she said.
Ellingson said she has sought additional documentation out of the court cases and expects the full commission to consider the issue of Stevens' option when it meets later this year.
On Dec. 23, 2004, Young returned Stevens' check and rejected his demand to exercise the option. Young's letter, entered as evidence in one of the court cases, acknowledged that Aleutian Spray's Cary Swasand knew about the option before he bought into the company. But Young said any agreement Swasand made was based on information about the company provided by Stevens and Solberg.
"As you are aware," he told Stevens, "many of those representations turned out to be inaccurate and the financial position and business prospects of the company are significantly different than what was represented to Mr. Swasand."
Those misrepresentations voided any obligation of Aleutian Spray to honor the option agreement, he said.
Relations between the Swasands, Solberg and Stevens deteriorated from there. In March, the Swasands agreed in principle to sell their 50 percent share to Solberg for $3 million, payable over two years. They said the deal was never completed; Solberg said it was.
Solberg, asserting he was sole owner of Adak Fisheries, accepted Stevens' $50,000 check on March 28 and honored the option, though Solberg's lawyer said he never officially transferred ownership, pending legal resolution of the competing claims.
On June 9, Aleutian Spray called a meeting of the Adak Fisheries board. It asserted its full control, firing Solberg as chief executive and declaring that Ben Stevens had no role in the company.
On June 15, Solberg filed documents with the state saying he was the 100 percent owner and chief executive and that Stevens had been appointed Adak Fisheries' president.
Meanwhile, the Aleut Corp. agreed to mediate the lease issues with Adak Fisheries.
On May 23, an Adak Fisheries attorney, Paul Davis, urged the Swasands and Solberg to keep their disagreements to themselves and present a "united front" to the Aleut Corp. and the mediator.
Referring to an earlier meeting between the Swasands, Solberg and the Aleut Corp., Davis wrote, "I advised all of you (Swasands and Solberg) that any further public divisiveness at this point in time would be effectively used by TAC (the Aleut Corp.) as an excuse not to negotiate a new lease, and would result in the death of AF (Adak Fisheries). I cannot be more serious in my advice to all of you. Whatever you have invested in AF is at complete and total risk of being lost."
But the relationships, if anything, got worse and more public. On June 16, Aleutian Spray sued Solberg and Stevens, seeking an order establishing that it is still the 50 percent owner of Adak Fisheries. Solberg counter-sued, asking that the alleged March sale be declared valid and seeking damages.
Adak Fisheries has sued the Aleut Corp., demanding reinstatement of the lease, and The Aleut Corp. is in court trying to evict Adak Fisheries.
Last fall, the federal government accused Adak Fisheries and Icicle Seafoods of violating federal crab quotas. The companies are in court fighting the government's proposed $3.4 million fine.
And the Aleut Corp. has sued Solberg for back rent.
The first phase of the ownership trial ended earlier this month with a judge ruling that Solberg had taken over Adak Fisheries illegally, restoring the 50-50 split between Aleutian Spray and Solberg. He voided Solberg's filing with the state that declared himself the sole owner of Adak Fisheries and Ben Stevens as president.
Solberg contends the Aleut Corp. wants to get rid of Adak Fisheries altogether and sell its pollock to at-sea processors. Moller and other Aleut Corp. officials say that's nonsense, they just want a stable company on Adak and hope to negotiate a deal with "the last one standing" after the court cases are resolved.
Somehow, seafood has continued to be processed at the plant under Solberg's supervision. That changed Thursday when Solberg turned the plant over to Aleutian Spray.
With the lease unresolved and almost all aspects of the Adak Fisheries management and finances tied up in litigation, it's unclear whether the company has any value today.
In a hearing on Aug. 22, Solberg was still looking ahead, thinking about how he could get more cod to the Adak fish plant by getting the state to open waters in the Aleutians with the help of Ben Stevens and Clem Tillion, the Aleut consultant and former state legislator.
"If we politically work together up here in Alaska we could secure our cod resource," Solberg told Superior Court Judge Michael Rindner, at times stumbling a bit in his adopted language. "If we can sit together, have Mr. Tillion, have Mr. (Ben) Stevens, and have the Aleuts and myself work together, we can secure that by maybe implement the state Board of Fisheries on an emergency basis -- Mr. (Ben) Stevens for us is very crucial in this process. If we cannot do that, if we don't work together, I believe that out-of-state harvesters will profit and we will lose."
Outside of court, Solberg said he wasn't suggesting that Ben Stevens would lobby the state Board of Fisheries, an agency over which he has funding and oversight responsibility as president of the state Senate. Instead, Solberg said, Ben Stevens would work with federal fisheries managers to reduce the cod take in the Bering Sea to offset an increased harvest from state waters.
Reporter Richard Mauer can be reached at rmauer@adn.com or at 257-4345.

Exhibit II

KODIAK DAILY MIRROR, Nov 4, by AP Reporter MATT VOLZ
Stevens defends his fish deal
By MATT VOLZ
Associated Press Writer
ANCHORAGE, Alaska (AP) -- The tiny, far-flung Aleutian community of Adak would seem an unlikely setting for the maelstrom that has centered around a fisheries consultant who also happens to be Alaska's Senate president and the son of a powerful U.S. senator.
When that senator, Ted Stevens, R-Alaska, handed the rights to the region's pollock fishery to an Alaska Native corporation two years ago, it was meant to build the economy of the struggling town of 69 people 1,300 miles away from Anchorage.
The pollock allocation has the potential to bring $10 million or more to Adak a year, and boost the bottom line of the seven-year-old Adak Fisheries, the company that would manage the catch.
But early this year, the deal imploded amid a struggle for control. Word got out that Stevens' son Ben, a highly paid consultant when he's not holding the gavel of the state Senate, had an option to buy 25 percent of Adak Fisheries. Moreover, Ben Stevens held that option while also a member of the Aleut Enterprise Corp.'s board - the board that voted unanimously to give its fish catch rights to the processing company.
The Aleut Corp. says Stevens never disclosed his option to them.
"The AEC board voted to allocate management of the pollock to Adak Fisheries, a company that was not only in line to benefit from the processing of that pollock, but a company which Mr. Stevens had a secret option to purchase a significant interest," said Curtis Smith, a spokesman for the Aleut Corp., who said the corporation had looked to Stevens as a trusted adviser and a friend.
Stevens until recently has remained silent on his involvement in the fish deal. In an interview last week with The Associated Press, he says there was nothing wrong or secret about his bid to own part of the company that he helped build, even if did benefit from fisheries legislation sponsored by his father.
"Because I'm Ted Stevens' son, am I not allowed to own anything?" Ben Stevens said. "I helped the company grow from a fledgling guy who was just literally standing at the dock, waving his arms, 'Come and sell me product.' I helped him recruit the product, I helped him grow, I helped him understand the industry. And they offered me a position in the company."
Stevens acknowledges that he was involved in the strategy on how to get the pollock fishery opened through Congress, but denies he had any contact with his father about the matter. He said his father knew about his consulting work with Adak Fisheries, which he publicly disclosed, but not about his option to buy into the company.
"I have all kinds of ownership in stock and real estate that my father doesn't have a clue about," Stevens said. "You don't tell your father every time you make a decision. I'm 46 years old."
Ted Stevens declined to comment through his spokeswoman, Courtney Schikora Boone, who said the senator had nothing to add apart from comments he made on Sept. 9. Then, Ted Stevens told reporters he never discussed the legislation with his son. It was Clem Tillion, an old friend of Ted Stevens and consultant for the Aleut Corp., who brought the proposal to him, Stevens said.
Tillion said he lobbied for the allocation, and Ben Stevens was involved with how the allocation was to be used in the Adak fish plant.
"I was talking directly to Ted Stevens. He wasn't going to deal with his son because of the problems it was going to cause," Tillion said.
Stevens became a consultant to the company in 1999, a year after it was formed. He said he was at first paid by contract, then put on a $10,000 a month retainer when NorQuest Seafoods entered as Adak Fisheries' first of three partners in 2001.
The early work that Stevens did for the company involved introducing the company's founder, Kjetil Solberg, to the players in Alaska's commercial fishing industry and helping him negotiate to bring fish to the Adak plant to process.
"I was helping them understand the regulatory environment, and how to navigate through it. To be successful in the seafood business, you don't have to be a good fisherman anymore, or you don't have to be a good processor anymore, you have to be able to understand the regulations under which you operate," he said.
Solberg said he gave Stevens the 25 percent option first in 2000, then in 2002, when Icicle Seafoods became a 50 percent partner.
"We were struggling and couldn't really pay him and he did a lot of work," Solberg said. "That was a way to pay him and motivate him."
From the beginning, years before the pollock allocation would move through Congress, Stevens and Solberg said Adak Fisheries and its predecessor, International Sea Group, had an exclusive deal with the Aleut Corp. to process cod and pollock for the corporation on Adak. The deal was written into the lease Adak Fisheries had with the Aleuts to occupy a former military installation transferred to the Aleuts in the 1990s.
Stevens says that proves that his vote as an AEC board member on transferring management of the pollock allocation to Adak Fisheries was nothing new.
Stevens said he verbally informed Aleut Corp. president Dave Jensen and counsel Roger DuBrock in an August 2003 meeting that he held the option. Further, he said, Adak Fisheries' lease with the Aleut Corp. had been restructured to fit the option.
"So I'm the one who made it public," Stevens said. "I don't understand why everyone is saying it's a secret deal. I made it public."
Smith said Jensen was not notified of the option. There were rumors, but "only when Dave saw the actual check from Ben Stevens in Seattle did he know that that option was for real," Smith said.
It was only after Aleutian Spray Fisheries, the last in the string of partners in Adak Fisheries, joined the company as a 50 percent owner in the summer of 2004 that Stevens decided to exercise his option, he said.
Stevens sent a letter and a $50,000 check as a first payment on the $500,000 option in November 2004.
Aleutian Spray argued that Stevens' option wasn't enforceable. Aleutian Spray approached Solberg that November to rework their agreement to cut Stevens out, but Solberg said no.
Lawsuits and countersuits erupted between Solberg and Aleutian Spray, the two owners or Adak Fisheries, as well as between the Aleut Corp. and Adak Fisheries.
After wrangling through court-ordered mediation, Aleutian Spray decided last month to sell its interest in Adak Fisheries to Solberg, making Solberg the sole owner.
The dustup between the Aleut Corp. and Adak Fisheries, in which the Native corporation was trying to evict the processing company, also appears to be over. Solberg last week said the two sides have reached an agreement in principle, and that Adak Fisheries is processing crab around the clock.
The main unanswered question is whether Stevens' option is valid. That will be the subject of the second phase of the court case between Aleutian Spray, Solberg and Stevens.
Stevens doesn't worry about the public perception of his involvement with Adak Fisheries.
"You put the facts on the table and just have to have faith that people are going to make the determination how they see fit," he said. "In the position I'm in if I were worried about public perception, I sure as hell wouldn't be serving in the Alaska state Senate."
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Exhibit J J

To find VECO/Stevens lobbyist info go to:

http://www.opensecrets.org/lobbyists/lobbyist.asp?ID=22731&year=1997

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Influence Inc 2000
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1997 Data( ) ALSO AVAILABLE
STEVENS, BEN A
Total Lobbying Income: $30,000
Groups Which Have Retained Stevens, Ben A:
Client Business Total Spent Subsidiary (lobbied for) Lobbyist
Alaska Groundfish Data Bank
$0 Alaska Groundfish Data Bank Stevens, Ben A

Aleutians East Borough
$0 Aleutians East Borough Stevens, Ben A

City of Seward
$0 City of Seward Stevens, Ben A

City of Unalaska
$0 City of Unalaska Stevens, Ben A

Lynden Inc
$10,000 Lynden Inc Stevens, Ben A

Pacific States Marine Fisheries Comm
$0 Pacific States Marine Fisheries Comm Stevens, Ben A

Tom Casey Consultants
$0 Tom Casey Consultants Stevens, Ben A

Trident Seafood Corp
$0 Trident Seafood Corp Stevens, Ben A

VECO Corp
$20,000 VECO Corp Stevens, Ben A

For more information go to
http://www.senate.gov/pagelayout/legislative/one_item_and_teasers/clientlist_parent.htm
then chick on the S and then page down to “Stevens & Assoc.”

Exhibit KK

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Web posted Tuesday, November 25, 2003

Alaska Digest
staff and Wire reports

Fisheries marketing board elects officers
JUNEAU - The new Alaska Fisheries Marketing Board has elected its officers and begun sketching out details on how to spend $8 million in federal funds.
State Sen. Ben Stevens, an Anchorage Republican, is the board's new chairman. Trevor McCabe of the At-Sea Processors Association was elected vice chairman, Kodiak fisherman Bruce Schactler was elected treasurer, and Kodiak fisherman and processor Duncan Fields was elected secretary.

Bill Hines, an international coordinator for the National Oceanic and Atmospheric Administration who has been nominated to be the board's executive director, said the board adopted bylaws at a meeting in mid-November.
"We developed and agreed to an approach on how to spend our remaining funds," Hines said.
The board received $10 million in Saltonstall-Kennedy funds, which are financed through taxes on U.S. seafood imports. The board turned over $2 million to the Alaska Seafood Marketing Institute. Hines said the board decided at the November meeting to use $6.5 million to target major retail and food service outlets.
Hines said the board would like to work with fishermen and retailers to raise customer awareness of and interest in Alaska seafood, particularly salmon.
"This is a very positive step to help to stimulate interest in Alaska seafood," he said.
He said the board hopes to have an action plan in January.

Exhibit LL

www.times.org
©2005 Cascadia Times
Ben and Ted’s Ethically Challenged Adventures
Ted Stevens' son, Ben, worked in the fishing industry for 15 years, working his way up from dockhand to captain of a crab boat. In 1994, Ben started his own lobbying firm in Washington, D.C., and began working for several fisheries-related companies among other clients. In 2002, Ben was appointed to the Alaska State Senate and is now the Senate’s majority leader. Over the years, the fishing industry and Ben-and-Ted have worked their connections to their own great reward:
Adak Seafood Interests
Ted sponsored legislation that granted the Aleut Corporation ownership of all pollock caught in the Aleutian chain, worth at least $10 million annually. Ben is on the board of directors of the Aleut Enterprise Corp., a subsidiary of the Aleut Corporation whose sole function is to develop the Aleutian pollock fishery. The corporation plans to build a processing plant at a former Navy base at Adak, located 400 miles west of Dutch Harbor. Two companies involved in the Adak fish project are Adak Seafoods and Adak Fisheries, which combined paid Ben $120,000 between 2000 and 2002 as a consultant.
At Sea Processors
In 1998, Ted sponsored legislation allocating 40 percent of the Bering Sea pollock catch to the 19-members of the Seattle-based At-Sea Processors Association. In 2001, Ted sponsored legislation making that allocation permanent. For 2001 and 2002, the At-Sea Processors paid Ben $54,000 in consulting fees.
Crab Boat Owners
In 2000, Ted included funding for the buyout of unprofitable crab boats after Ben was hired as a consultant by the Bering Sea Crab Reduction Fund, a trade association for crab harvesters. The crabbers paid Ben $42,500 for his work.
Pollock Industry
In 2000, Ted chose Southwest Alaska Municipal Conference (SAMC) to distribute $30 million federal disaster relief money following what he considered a "poor" fishing season. Most of the funds went to fishing companies, while the Pribilof Aleuts, who live in the center of Bering Sea fisheries, got nothing. SAMC paid Ben $12,800 for consulting work in 2000. During this so-called “disaster,” a near record 1.31 million tons of pollock were caught.
Seafood Marketers
In 2003, Ted earmarked $10 million to market Alaska seafood. His bill also required the military to purchase only domestic seafood. This benefited consulting clients who paid Ben $549,976 from 2000 through 2002. Ben is a board member of the Alaska Seafood Marketing Institute.
Trident Seafoods
In 2003, Ted attached a rider to a spending bill to benefit crab processors by creating quotas for how much of the harvest they were entitled to process. The North Pacific Crab Association, a processor trade group that supported the rider, paid Ben $56,000 for helping out. The rider gave about 24 seafood processors exclusive rights to purchase 90 percent of the snow and king crab harvest in the Bering Sea. Trident Seafoods, a lobbying client of Trevor McCabe — a former member of Stevens' staff — was awarded the largest share of the catch by the North Pacific Fishery Managment Council. One of the council’s 11 members is David Benson, a Trident employee in Seattle. A Native Aleut company based in the Pribilof Islands, which leases a major processing plant to Trident on St. Paul Island, received none of the processing shares. Brad Gilman, a friend of Ben's since fifth grade, also lobbies for Trident Seafood.
Sources: Alaska Public Offices Commission, Anchorage Daily News, Los Angeles Times
Cascadia Times 25-6 Northwest 23rd Place No. 406 Portland OR 97210
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Exhibit MM

The following transcript Trevor McCabe can be found at:
http://www.oceancommission.gov/meetings/aug21_22_02/mccabe_testimony.pdf

Mr. Trevor McCabe
At-Sea Processor’s Association
(Based on Meeting Transcript)
U.S. Commission on Ocean Policy
Alaska Regional Meeting
Anchorage, AK
August 21, 2002

Hello, my name is Trevor McCabe and I m the Executive Director of the At-Sea Processors Association. The APA is a trade association comprised of the seven companies that operate catcher processors in the Bering Sea pollock fishery. We employ more than 2,000 people, board 19 vessels and we harvest around 40 percent of Bering Sea pollock, the nation’s largest fishery. Our main productsare pollock filets, surimi roe and fish meal. We sell filets to the domestic and European markets and surimi roe and meal to the Asian markets. We’re U.S. owned and we represent the most significant ownership by Alaskans, in this case western Alaskans, as Morgan just mentioned, in the history of the ground fish fisheries off Alaska. With help from the CDQ program five of the six CFQ groups representing 23,000 Alaskans now own more than 25 percent of our fleet and we expect that they’ll own a majority of the fleet within five years. The first chart I have to present is on page seven of the handout. It shows the volume of commercial landings in the United States. It’s taken from the year 2000, the most recent year we have available from the National Marine Fisheries Service. As in most years the pollock fishery off Alaska represents about one-third of the entire national harvest of seafood. A portion of that is caught in the Gulf of Alaska but the Bering Sea Aleutian Islands pollock fishery generates counts for the bulk of the harvest. We’re about 25 percent of the nation’s entire seafood harvest alone in the Bering Sea Aleutian Islands pollock fishery. We believe it’s the best managed ground fish fishery in the world. My second chart illustrates the track record in the time since 1976 when Senator Magnuson and Senator Stevens and others succeeded in extending U.S. jurisdiction to 200 miles. We now have almost three decades of U.S. Management in which the pollock fishery has been like a long-term savings bond, a massive savings bond sustainably producing yield of between a million and a million and a half metric tons of pollock annually. While visiting Alaska I believe that you will hear from countless people about the ingredients involved in makingour fisheries management system successful in North Pacific. In my second chart I want to draw your attention to one of the most important ingredients, our conservative approach in setting annual catch levels. The dark shaded area of that chart represents the measured biomass of sexually mature age three plus pollock in the Bering Sea consistently in the 10 million metric ton 1
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range and even higher than this in 2001 and 2002 which don’t appear on the chart. The light dotted area, the small light dotted area at the bottom, represents the annual allowable biological catch, or ABC, which is recommended by scientists at the National Marine Fisheries Service, peer reviewed by Council’s science and statistic committee and then approved by the Council. In its history the Council has never exceeded the recommendations from its scientists. It’s after approving the ABC that the Council sets the total allowable catch, or TAC, which is equivalent to or in most cases less than the ABC but never exceeds the ABC. In addition to this approach the Council has adopted and adhered to an overall harvest cap of 2,000,000 metric tons for Bering Sea Aleutian Islands ground fish fisheries even when the science would support fishing levels above that cap. To lend some perspective to this approach, in the North Pacific it’s useful to compare it to New England and I’ll also compare it to Russia. In New England you’ve heard about the disagreement over the need for hard caps, for what wehave as a TAC where when you hit the TAC fishing stops for the year. That’s a little bit unusual for us because that’s been the way it’s been done up here. In Russia, if you look at the black bars on the chart, that’s our annual harvest. They -- their scientists believe that that bar could be twice as high as it is, more than twice as high. They believe that you can fish pollock at an exploitation rate around 30 percent or more and we’ve been fishing an exploitation rate of the mature fish around 15 percent. The proof is in the pudding. The big area behind the consistency of the biomass and the health of the biomass are the result of this management system that we have. According to pollock market research recently completed by Gunner Napp (ph) at the University of Alaska pollock fishery has now replaced Russian Bering Sea and see cod’s pollock as the largest single species fishery. Theirs has been in decline using that higher exploitation rate, ours has just been steady state. Had the Commission been formed and come to Alaska prior to 1998 instead of today the story of our successful management would have been marred by bitter allocative battles over access to the catch levels set by the Council. Those battles were resolved after almost a decade of bitter fighting by Congress in 1998 through the American Fisheries Act. Besides fixing loopholes in the U.S. ownership requirements for U.S. flagged fishing vessels the American Fisheries Act permanently divided the Bering Sea pollock harvest between the main sectors that participated. The next chart in the packet illustrates the divisions mandated by the AFA. These are the allocations that occur after the Council has set that annual total allowable catch. The AFA mandates that 10 percent be allocated to the six western Alaska CDQ groups that Morgan just spoke about and then an additional amount is taken off the TAC off the top for the pollock bycatch that will be used in the non-pollock fisheries. I wanted to draw your attention to this because some 2
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people don’t realize that every fish is accounted for in the North Pacific. The pollock that’s going to be used in the non-pollock fisheries comes out of that total allowable catch that the Council sets. With respect to the directed pollock fishery, which is the big bar on the chart that represents about 85 percent of the annual total allowable catch, the AFA divided this between inshore plants that receive fish from a fleet of about 100 catcher vessels, that’s 50 percent of it, 40 percent to the catcher processor companies that I represent and 10 percent to mother ships who also receive fish from a fleet of approximately 20 catcher vessels. That’s your largest fishery, the largest by volume in the country. And it’s the framework of the division among those sectors that allow the formation of cooperatives, fishing cooperatives, in 1999. Fishing cooperatives are binding contracts among fishery participants that establish the portion of a particular sector’s allocation that the participant can harvest. Th