Bloomberg | October 27, 2008
By Cary O'Reilly and Nadine Elsibai

Oct. 27 (Bloomberg) -- U.S. Senator Ted Stevens was convicted of all seven felony charges of failing to report gifts from a company in his home state of Alaska, a possibly fatal blow to the career of the Senate's longest-serving Republican.

Stevens, 84, was convicted in Washington of making false statements on his Senate financial disclosure forms. He was accused of hiding more than $250,000 in home renovations and other gifts from Veco Corp., an Alaska oil-services company, Bill Allen, the company's founder, and other friends.

``It's not over yet,'' Stevens told his wife Catherine as they left the courtroom. Later, he said in a statement he is innocent and will ``fight this unjust verdict with every ounce of energy I have.'' He said he is still seeking re-election Nov. 4.

``This is obviously the worst possible outcome, not only legally but politically, for Senator Stevens,'' said Jennifer Duffy, who analyzes Senate races for the nonpartisan Cook Political Report in Washington. Even so, she said, ``Remember, this is a guy whose poll numbers went up during the trial.''

Stevens, a member of the Senate since 1968, is the first sitting U.S. senator convicted of a felony since 1981, when the late New Jersey Democrat Harrison Williams Jr. was found guilty of bribery and conspiracy. The false-statement charges carry a maximum prison term of five years.

`Do What's Right'

Alaska Governor Sarah Palin, the Republican vice- presidential nominee, said in a statement it was a ``sad day'' for Alaska and for Stevens.

``The verdict shines a light on the corrupting influence of the big oil-service company that was allowed to control too much of our state,'' Palin said. ``I'm confident Senator Stevens will do what's right for the people of Alaska.''

National Republican Senatorial Committee Chairman John Ensign of Nevada said in a statement he was disappointed to see Stevens's ``career end in disgrace.'' As a result of the jury's verdict ``he is properly being held accountable,'' Ensign said.

The Alaska Democratic Party called on the senator to resign immediately. ``He knew what he was doing was wrong, but he did it anyway and lied to Alaskans about it,'' a party statement said.

Stevens isn't required by law to give up his Senate seat. He can only be removed by a full Senate vote on a recommendation by its ethics committee. Such a process would likely take until next year and would move forward only if he is re-elected.

Speedy Trial

After being indicted on July 29 he sought a speedy trial in an effort to clear his name.

The Justice Department's investigation is continuing, Matthew Friedrich, acting assistant attorney general for the criminal division, said outside the courthouse after the verdict.

U.S. District Judge Emmet Sullivan delayed setting a sentencing date at the defense's request, and allowed Stevens to remain free without bail.

Stevens's conviction will likely boost Democratic chances of winning an Alaska Senate seat for the first time in almost three decades. He won the Republican primary in August with 63 percent of the vote after being indicted. He faces Democrat Mark Begich, the mayor of Anchorage, in the general election. An Oct. 7 Rasmussen Reports poll had the two statistically tied.

The verdict ``should elect Begich,'' Marc Hellenthal, an Alaska pollster and political consultant, said in a phone interview from Anchorage after the verdict.

`Tremendous Resilience'

Hellenthal said Stevens has ``shown tremendous resilience'' after being charged. ``The fact that Stevens was indicted should have elected Begich, but there was a backlash and Stevens picked up some support. I don't expect that to happen now that he's been convicted.''

A legendary figure in Alaska politics, Stevens has steered billions of dollars to the state from his seat on the Senate Appropriations Committee.

The case stemmed from a federal investigation of political corruption in Alaska that began in 2004 and has resulted in eight convictions or guilty pleas. Allen, the prosecutors' star witness against Stevens, pleaded guilty last year to charges of bribery and conspiracy. Stevens wasn't charged with taking bribes.

Prosecutors presented evidence that between 2000 and 2006, Stevens received improvements to his home and other gifts, including a Viking gas grill, a power generator, an Alaskan sled dog and a custom-made glass window, without reporting them on his financial disclosure forms.

Prosecutors said Veco and Allen provided labor and materials to install a first floor, garage, outdoor deck and other improvements to Stevens's home in Girdwood, Alaska, which he called his ``chalet.''

Stevens's Testimony

Stevens, in three days on the witness stand, testified that his wife was in charge of the home renovations and paid all the bills they received. His defense lawyers said the couple spent $160,000 on the renovations and that Stevens believed his financial disclosures were accurate.

Stevens insisted he never accepted as gifts other items delivered to his homes in Alaska and Washington, D.C., including a $2,700 massage chair, the gas grill and a statue depicting migrating salmon. Stevens said they were either loans or he didn't want them at all.

``We have lots of things in our house that don't belong to us,'' Stevens said when a prosecutor asked him about the chair.

Defense lawyer Brendan Sullivan called Allen ``a paid witness'' and said prosecutors ``twisted'' the evidence.

Earlier in the trial, the judge denied multiple requests from Stevens's attorneys for a mistrial or dismissal of the case over claims the prosecution withheld evidence.

The case is U.S. v. Stevens, 08cr231, U.S. District Court for the District of Columbia.