[Vision2020] Kott Explains $30,200 FBI Found in His Closet

[Tom Hansen]

Some people simply epitomize the term "corrupt".

>From today's (September 19, 2007) Anchorage Daily News at:

http://tinyurl.com/2uz3pg

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Kott explains $30,200 FBI found in his closet 
'MY MONEY': He says he saved per diem checks and that $7,993 from Bill Allen
was a flooring job advance. 

By LISA DEMER and SEAN COCKERHAM
Anchorage Daily News

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http://tinyurl.com/yqonxk
An embroidered Veco hat with the initials CBC for "Corrupt Bastards Club"
was entered into evidence in Kott's trial.

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When the FBI last summer searched the Juneau condo that then-state Rep. Pete
Kott shared with his girlfriend, agents found more than $30,000 in cash on
the shelf in his closet, a prosecutor disclosed during questioning Wednesday
in Kott's corruption trial. 

That was the biggest revelation of the day in U.S. District Court and it
came out when a defense witness -- Debora Stovern, Kott's long-time
girlfriend -- was on the stand. She also talked about embroidering hats with
Veco Corp.'s logo on the front and the initials "CBC" -- for Corrupt
Bastards Club -- on the back.

The main witness Wednesday was Kott, the former Republican House Speaker
from Eagle River. He took the stand in his own defense around 11:30 a.m.,
denying he took bribes and talking about his start in Alaska politics in
1992, the friendship he soon formed with Veco chief executive Bill Allen and
his role in passing a new oil tax in 2006.

On the witness stand, Kott, wearing a dark suit, a red tie and glasses, came
across as serious and hardworking. He seemed like a different man than the
hard-drinking, crude-talking wheeler dealer who appears on secretly made
recordings played by prosecutors earlier in the trial. On those tapes, he
promises Veco executives time and again that he'd "get 'er done" on the oil
field services company's behalf. 

He is accused of conspiring with Allen, former Veco vice president Rick
Smith and others to push through a new oil tax favored by Veco and North
Slope oil producers. Allen and Smith have pleaded guilty to bribing Kott and
three other legislators and are cooperating with the government.

In earlier testimony, Allen and Smith named Kott as one of the lawmakers
they bribed.

As Kott testified Wednesday, Stovern, his daughter Pamela, and his
daughter-in-law Cynthia listened from the front row, right behind the
defense table. 

THE MONEY IN THE CLOSET

Right off the bat Wednesday, Kott told jurors that the $30,200 cash was his.
It accumulated over 2 1/2 years as he cashed the checks legislators receive
for daily living expenses while in Juneau or otherwise working, he
testified.

"Absolutely it was my money," Kott said.

He'd let the checks stack up, then take them to the bank and cash them, he
said. Some of the money came from hardwood flooring jobs too. Kott and his
son own Kott's Hardwood Flooring.

His defense lawyer, Jim Wendt of Anchorage, asked whether any of the $30,000
came from Allen or Smith.

Kott hesitated for a moment. He said he wasn't sure whether some of the $900
that Allen gave him one night in Suite 604 of Juneau's Baranof Hotel ended
up in that stack. Allen counts out the money in one of the video recordings
secretly made in the suite that served as Veco's Juneau headquarters.

Kott testified that the money was payback for a $1,000 contribution he had
just made maybe a couple of days before to then-Gov. Frank Murkowski's
re-election campaign. But when Allen testified earlier in the trial, he
said: "I just gave it to him."

Kott told jurors about growing up in Flint, Mich., the son of a General
Motors plant supervisor. He started working the assembly line right after
high school too, but after a couple of years enlisted in the Air Force. He
married his children's mother in Taiwan. Their relationship is strained,
Stovern told jurors. They haven't yet divorced.

His military career spanned the next 22 years and brought him to Alaska in
1984. He has a master's in public administration and started teaching
political science classes at Wayland Baptist University. A student gave him
the idea to run for the Eagle River House seat in 1992.

Early on, he met Allen through the late and powerful Rep. Ramona Barnes. She
took Kott under her wing like a mother hen, calling him her nephew.

Allen and Kott hit it off, Kott told jurors. They both wanted to develop
Alaska's natural resources; they both came up doing hard physical work. 

"Hands on, just trying to scratch through. Obviously Bill scratched through
a lot better than I did," Kott said.

And there was more.

"Bill was kind of by himself," Kott said. "We both had some of that in
common."

Kott said he could drop in at Allen's house anytime and sometimes regretted
it -- showing up when the older man was already in bed. He guessed he had
been there 200 times.

Smith was a friend too, but not at the same level, Kott told jurors. He's
only been to Smith's house in Anchorage a few times.

It was his girlfriend, Stovern, who began the day on the witness stand. She
wore a cobalt blue dress and came across as friendly and at ease. She never
seemed flustered, even under intense cross examination by prosecutor James
Goeke.

Under questioning by defense attorney Wendt, Stovern said she met Kott about
six years ago while attending legislative committee hearings as a state
employee who worked in occupational licensing. About 3 1/2 or four years
ago, he began living in her condominium whenever he was in Juneau.

She no longer works for the state. She handles the bookkeeping for Kott's
Hardwood Flooring and works alongside Kott installing, sanding and finishing
wood floors. She also filed the campaign finance reports for Kott's races in
2004 and 2006.

'CORRUPT BASTARDS CLUB'

Under cross examination, Stovern testified she made the highly publicized
"Corrupt Bastards Club" hats seized by the FBI at the Juneau condo.

She embroidered 100 hats with the Veco logo on the front and added a CBC
logo to the back of about a dozen. 

Goeke asked what she told the FBI that the initials stood for when federal
agents searched the apartment in 2006 and questioned her.

"I told them my understanding was this CBC, it was corporate bastards club
or something like that. I told them my understanding it was a barroom joke
made in response to some kind of opinion piece," Stovern said.

Did she mean "Corrupt Bastards Club?" Goeke asked. She said she did. 

Stovern testified she was "very indignant" herself about the newspaper
opinion piece, which said legislators who accepted Veco campaign
contributions were being unduly influenced. 

She said that she, Kott and Smith were joking about it in the bar at the
Baranof Hotel in Juneau. Someone came up with the name "Corrupt Bastards
Club" in jest, she said.

Federal prosecutors had a box full of the hats in court. They entered a red
one into evidence as Exhibit 208. 

Veco paid her $900, or $9 for each hat she embroidered. But she didn't make
a lot, because the hats cost her $3 each and she had to cover FedEx
shipping, thread and other expenses. Kott delivered the hats to Smith, she
told jurors.

A central issue in the trial concerns $7,993 that Allen paid to Kott's
Hardwood Flooring. Jurors now have heard three conflicting stories about it.

Kott and Stovern on Wednesday both told jurors that the $7,993 payment was
an advance for future flooring jobs for Allen and Smith. 

Kott's son, Peter M. Kott, told jurors on Tuesday that the money was an
advance for flooring work for Smith and a woman he identified as Sharon
Durant. Neither Kott nor Stovern mentioned Durant. The younger Kott needed
the advance so he could take time off from the flooring business and work on
his dad's re-election campaign in 2006, he testified. Kott lost in the
primary.

But both Allen and Smith testified that the money wasn't for future flooring
work. It was intended solely to allow Kott's son to work on the campaign,
they testified. Smith called the payment illegal.

Goeke asked Stovern if she would be surprised to learn Kott had $30,200 in
cash laying around. She said he did a lot of business in cash but didn't
know he had that much. 

Goeke wondered why Kott wouldn't just have paid his son to be his campaign
manager out of his own cash.

"The money was meant for living expenses," Stovern responded.

Another issue that came up Wednesday concerns a political poll for Kott's
campaign in 2006 that Veco paid for. Kott told jurors he got no benefit from
it.

Wendt introduced into evidence campaign literature dating back several
elections to show Kott used the same themes for years. Kott told jurors he
didn't change his strategy as a result of the poll, which showed him behind.

Kott continues testifying on Thursday. The case may go to the jury on
Friday.

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Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho

"We're a town of about 23,000 with 10,000 college students. The college
students are not very active in local elections (thank goodness!)."

- Dale Courtney (March 28, 2007)