Where Does Palin Fit in Alaska's Culture of Corruption?

ANCHORAGE -- Alaskans are no strangers to political corruption. In the last year and a half, federal prosecutors have indicted seven politicians, three executives and a lobbyist on crimes of public corruption, including the ex-governor's chief of staff, five state senators, two oil services heads, and Alaska's senior U.S. senator, Ted Stevens. Shortly after Sarah Palin started her tenure as governor, the FBI raided the offices of a half-dozen state legislators, including that of then Alaska Senate President Ben Stevens, who has not been charged with a crime.

News cameras captured agents leaving the state Capitol with boxes filled with evidence -- including baseball caps with the logo of one Juneau clique: the "Corrupt Bastards Club." The CBCers were a group of a dozen state lawmakers who joked among themselves and with other public officials about their involvement with oil service firm Veco Corp., whose former chief executive, Bill Allen, and former vice president, Rick Smith, have both pleaded guilty to federal bribery charges. All 12 lawmakers received generous campaign contributions or consulting fees from the company.

Veco was interested in setting up friendly tax policies in the state for oil companies, whose drilling and exploration projects it serviced. The CBC started as a barroom joke after Lori Backes, the executive director of the good government nonprofit, All Alaska Alliance, questioned the financial connections between the 12 lawmakers and Veco in an op-ed published in the state's largest newspaper, The Anchorage Daily News, six months before the FBI showed up with warrants. The nickname was widely known in Juneau by the time Veco paid one of the legislator's girlfriends to embroider the logo on the hats.

Since the raids, three state legislators have been convicted of bribery charges over ties to Veco. Allen and Smith are cooperating with prosecutors.

Meanwhile, in Washington, each member of the state's federal delegation (all Republicans) -- Sen. Ted Stevens, Sen. Lisa Murkowski and Rep. Don Young -- is embroiled in scandal. For all three, the narrative is the same: Each stands accused of taking cash or gifts from a well-connected donor with deep interests in the federal earmark system.

Over the past week, I found myself asking Alaska residents and political insiders alike: Where does Gov. Sarah Palin fit in this culture of corruption? Palin is a member of the same Republican Party as those ensnared in a corrupt web, but somehow she seems like a completely different political animal. Palin moved into the governor's mansion in 2006 on a platform of reform and change, having developed a reputation as a whistleblower after calling out the chair of the state GOP and the state's Republican attorney general on ethics grounds. The answers I received show a candidate who staked her political fortunes on her claims of being a maverick. But while she has avoided some of the worst entanglements of petroleum industry bribery, her fierce sense of family loyalty has landed her in her own hot water.

One of the corrupting factors in Alaska is its extraction economy. In 2005, the gross state produce was $39.9 billion, according to the state census. Nearly 80 percent of the state's revenues came from oil extraction. Major international corporations make millions every year in Alaska through mining, fishing, and drilling. Three of the world's biggest petroleum companies, BP, Conoco Phillips, and Exxon Mobil operate in the state. Companies like Veco, which was bought by energy services company CH2MILL after news of the federal investigation broke last year, are interested in making sure that state tax laws and environmental regulations are as friendly as possible.

At the state level, the temptation for bribery is particularly strong. The state legislature is only required to meet 90 days out of the year. Most lawmakers have outside employment, but others find themselves underemployed. One recently convicted legislator, former Rep. Vic Kohring, was found guilty of bribery after an FBI videotape caught him asking Veco for help paying off a $17,000 medical bill he put on a credit card. Jurors found that the arrangement was in exchange for a favorable vote on an oil-tax plan that ultimately failed.

That's not to say oil companies don't also play a prominent role in federal politics. Energy companies are major campaign contributors to the federal delegations. Veco, for example, has given $88,000 to Stevens throughout his career. The company is also credited with hosting a yearly fundraiser for Young that has triggered a federal investigation.

In an attempt to uphold her reform persona on the national stage, Palin is handling her relationship with the Alaska federal delegation, particularly Sen. Ted Stevens, delicately. Palin once ran one of Stevens' 527 groups. She also relied on his endorsement when she ran for governor. Even in a state whose tolerance for corruption was waning in 2006, Palin still needed the nod from "The Most Famous Alaskan" to pull off a win.

But now Palin needs to stay at least arms-length from Stevens, who was recently indicted on charges of accepting hundreds of thousands of dollars in gifts from Veco Corp., without disclosing them on his Senate ethics forms. These gifts include the construction of a new first floor in his Girdwood home and accompanying home furnishings and a state-of-the-art Viking grill. The indictment alleges that at the same Stevens received these gifts, he used his official role to help the company receive a lucrative National Foundation Grant. He is also credited with intervening in the company's international dealings.

Palin is also dodging the state's junior senator, Lisa Murkowski, who inherited her seat from her father, Gov. Frank Murkowski in 2002. When Murkowski won the race of for Alaska governor that year, he was allowed to appoint someone to his vacant senate seat. He picked his daughter, who had been in the state Legislature for less than one term. Murkowski won her latest term at the polls two years ago. She had managed to keep her nose clean until last year when it was revealed that local rainmaker, Bob Penney, gave her a sweetheart deal on a piece of river-front property in his backyard -- literally. Murkowski sold the land back to Penney for what she paid when the news broke.

Less popular than Stevens, Rep. Don Young, a feisty and quirky character in the House, is under federal investigation for his connections with Veco as well. Specifically, federal agents are looking at an annual pig-roast fundraiser Veco executive Bill Allen hosted for Young at his home. Last year, Young was booed and oinked at as he arrived at the event. Young has spent nearly $1 million on legal fees since news broke he is under investigation. He has not been indicted.

All of the politicians who have fallen -- and those teetering on the edge -- have had money trouble. Campaign contributions and illegal gifts did them in. To sum up the problem as "greed" might not quite capture it, but it comes close.

Palin's problem, though, is not money. In fact, she raised taxes on oil companies in 2007. It was the first of such hikes in the state since 1989. Believe it or not, her troubles look more like Bill Allen's -- the Veco executive who pleaded guilty to bribing state officials. Allen has framed his actions as attempts to do the best thing for his family business. If bending -- or breaking -- the law was necessary to get the company ahead, he did it. For Allen, Veco and family were interchangeable. His devotion to both was the root of his problem and his downfall.

Palin's devotion to her own family has landed her in trouble with the state Legislature. A special investigator is looking into whether Palin fired her public-safety commissioner when he wouldn't oust a state trooper over a longtime family feud. The state trooper, Jim Wooten, was involved in a bitter divorce with Palin's sister. He was admonished after the Palins filed official complaints, though not fired. Palin revisited the issue when she took office, the safety commissioner, Walt Monegan, claims. Though the full report is not due for three weeks, e-mails from Palin and a tape recording reveal that the governor at least pressured the commissioner to fire Wooten, after she previously denied having done so.

Since being tapped to join Sen. John McCain on the GOP presidential ticket, Palin has hired a lawyer who is attempting to squelch, and at the very least stall, the investigation. The Anchorage Daily News ran an editorial last week saying investigators ought to issue a subpoena, forcing Palin to cooperate, like she said she would at the beginning of the investigation.

Palin's stall is a serious step away from transparency in the direction of the state's corrupt lawmakers. Considering her path to power, Palin should know that Alaskans' toleration of corruption has seriously diminished. This is apparent even in joking bumper stickers sold in the state. Several years ago, "We Don't Give a Damn How They Do it Outside," was the bumper sticker of choice. These days, since the FBI raids and Stevens' indictment, "Thanks, FBI" has cropped up. The tolerance for Allen's bribing of officials and officials' lapses has clearly dropped.

Palin's path to success in a state wrought with corruption was her reformer credentials.  If she wants to succeed politically, she needs to return to her reformer persona.

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