Bill Allen Sentencing
[Bill Allen was sentenced today. In a previous post today, I've put up my notes on Mr. Allen's statement to the court. This post includes my notes on what transpired in court as best as I could keep track. Allen's statement is repeated in here. Rick Smith was also sentenced - 21 months and $10,000. I'll post on that later along with comments on both sessions. Picture is after sentencing, leaving the federal building. ]
U.S. District Court for the District of Alaska
Wednesday, October 28, 2009
| 8:30 AM | 3:07-CR-00057-JWS | Judge Sedwick | Anchorage Courtroom 3 |
| USA | vs. BILL J. ALLEN |
| (James Trusty) | (George Terwilliger) |
| (Kevin Gingras) | (Robert Bundy) |
| (Peter Koski) |
| IMPOSITION OF SENTENCE |
I got into the courtroom a few minutes late. Given predictions of possible snow I debated the bus, the bike, the car. Walking was out because I knew I couldn’t get up that early. In the end I decided to take the bike and get some fresh air on the way.
There were empty seats, but not many.
Most of this is pretty technical - how the guidelines work for sentencing. Based on various factors, sentencing is based on what level the defendant falls. Factors include the type of crime and then factors such as past record, cooperation with the prosecutors (a big deal in this case), remorse, etc. So that’s what most of this is about.
The sentence in the end was 3 years and $750,000 fine. I’ll give all the details here and then do another post where I’ll try to sort through what struck me as interesting.
Note: I typed as fast as I could, but the attorneys spoke faster than I could type. This is a rough approximation of what happened while I was in the courtroom. Judging from how I did in previous court sessions, this is maybe 60% of what was actually said, but you get the gist. But wait for the official court transcripts for the certain details.
Note 2: The names of all the attorneys are above. Bundy spoke most on behalf of Allen, but Terwilliger spoke at the end. For the Prosecution, I think Trusty did all the talking.
Very Rough Transcript:
8:34am
Objection lacks merit - would have reduced by 12 levels factual basis
2 other objections
1. use of guideline 2v1.1 relating to bribes rather that unlawful gratuities. If correct, adjusted upward by only 9 levels instead of 12
role in offense - 111-113 of pre-sentence report
Additional points
Both objected to discussion of James Clark, but I agree that Clark is bound n the conspiracy of PPT thus overruled
Beverly Masek and Stevens, US Rep A - will not be considered so nee not be addressed
Allen objections to info on scheme in 1980s using VECO employees to contribute to candidates. I think it relevant and should be included
Everything else supported by preponderance of evidence
2c1.1 - bribes 2c1.2 - gratuities - hear these arguments. My preliminary feeling is that gratuities applies
Account 1 - series of large payments made to State Sen. B - over extended period to insure in general in long run, not for performance of specific acts. Illegal gratuities, not bribes. If consider Kohring and Kott, if they were bribes, a small portion.
[Trusty:] Bribe v. Gratuity - nothing irrational the way court is approaching it. I would point out, first, that he has pleaded guilty to bribe e related nothing about out gratuities, it seems to me using the language that acknowledges quid pro quo - bribe
Q [Judge asking]: Focus on payments to State Sen B - not sure anything shows factual basis were bribes.
Prosecutor Trusty: I would submit Par. 4 p. ?? most operative - chronology describing the fact of payments and describing what is received in return. Less specific than PPT but does in fact indicate payments provided in exchange for giving advice, lobbying colleagues, and taking legislative acts. The bribe doesn’t have to be exclusively wedded to a single issue before the legislature. More of a standing retaining circumstance. Amount of years supersedes or extends beyond 200? legislature. Particularly 2006.
Other point - since each guideline is going to be grouped together ultimately, if some part is bribes and some gratuities, then at the end of the day, may end up with same sentencing.
Q: Count 2 carries maximum of 5 years, second 10
Prosecutor Trusty: I think you have those reversed.
Q: Directs court to use either one or the other without saying why.
Prosecutor Trusty: I think some is gratuities and some is bribes, overall loss amount/benefits amount is grouped, means the highest grouping controls.
Q: Your view, grouping two counts which are relevant - IRS count has no bearing ?
Prosecutor Trusty: Yes, Would be setting up two groups and ultimately grouping them anyway.
Q: The overwhelming payment here is for Sen B, and it seems warrant... ??
Allen Attorney: Bundy
Court given ability to choose which to use. Theres a huge difference here in the three levels in terms of dollar amounts - 10 or 12 level adjustment. To start at bribery amount 12 instead of 9 is a huge difference. When you have a guideline range that is changed dramatically like that, the court must find a clear and convincing evidence for that. We would say it is ambiguous.
Payments over 6-7 years - here the bribe should account for all of that.
Sedwick: I agree with Bundy that for 3 level difference need more certainty. I have no evidence the Sen B money was bribe - it may be, but no evidence. If ambiguous court is required to choose the more lenient.
Will use 2C1.2 - that difference is 3 levels.
Trusty: Will the court reflect our objection?
Sedwick: Yes
2.
Particularly video tapes I think the roll adjustment is correct.
Bundy: Roll adjustment - as in the pre-sentence report, what we saw in Kohring and Kott proceedings. Mr. Allen really wasn’t an organizer of much of anything. What occurred is people approaching Mr. Allen and asking for favors.
Sedwick: ARe you telling me there was no organization, no strategy?
Bundy: There was no organizing, strategy to talk to legislators to agree on one side, that was the strategy, lobbyists do that all the time, spending billions of dollars on health in DC now, What happened in this situation, because of Mr. Allen’s obvious desire to have PPT passed, he bellied that was the right way. and they knew his history of generosity, he was a sitting duck for these people. They came to him. Mr. Kohring had to approach, Mr. Kott had to approach.
Sedwick: What about 7 years of payments to SEn. B. Doesn’t that give us insight to what was in Allen’s mind?
Bundy: It is not illegal to pay a legislator to give advice. Nothing - Sen B was on the payroll before he became a Senator. To say Mr. Allen was an organizer way overstates his role. There was no secret he wanted to the PPT passed. The illegal solicitation was made by others. He didn’t solicit anyone. They came to him. He was vulnerable. They came to him.
Prosecutor Trusty: I would submit 4 levels is appropriate here. Question is whether Allen is a leader or organizer of a scheme.
Actions of Allen as the court knows them - reflective of court
Person in charge of doling out promises, favors,
The way others treat Mr. Allen - people who sit there and report, repeatedly to Mr. Allen. People Mr. Allen can look in the eye and say I own your hind quarters. That says something. Someone in that position wouldn’t be talked to in that manner.
I don’t know the role in 2007, but was a non-binding estimate. Being a manager, if the court went for 2 level adjustment suggests there is someone higher than the manager, and there simply isn’t one. He isn’t just one of the players. No one above. No middle ground, the scope of the scheme covers the fie participants - Allen, Smith, State Sen B, state Senators A and C.
Payments between 1995 and 2001 are not part of the criminal conduct. Consultation is not illegal, but sham consultation payments are.
When people look people n the eye and says he owns them, and he is the center of the conspiracy, no one higher than him, there is no question at all.
Judge Sedwick: I think it’s clear he was the leader, as Mr. X points out, there is no one else who could have been. It may be correct that some of the minions knew how to take advantage of Mr. Allen, but only because it was known he was willing to put lots of money into what he wanted.
Also indicate, that I disagree with argument in Bundy’s brief that it has to be proven by clear and convincing, but it is clear and convincing aNYway.
advisory from 78-97 months, this is before considering motion for downward adjustment, and he is eligible for downward because all five conditions have been met.
Mr. Trusty:
Mere threshold of making a motion, …. some highlights, undisputed . Mr. Allen made an immediate decision to cooperate, and he has cooperated in a proactive manner, testified, made himself available, about 71 consultations, consented and participated in consensual recordings, and close circuit tv in his home on about 11 occasions. Clearly, Mr. Allen is worthy of this and we have submitted a motion of 8 level departure. this is a bit different from custom of this court because it goes beyond the normal 50% standard in this court. But we think it is justified here. What makes them unravel is having an insider that makes them unravel. Mr. Allen did the right thing by way of cooperation. Also note the cooperation with Judge Sullivan. We filed a second amendment to the plea agreement, that Mr. Schuelke’s probe would be a component of the cooperation. We think it might have been covered by the original plea, but modified it just in case.
[As I understand it, Schuelke was appointed by Judge Sullivan in the Ted Stevens case, to investigate the allegations of wrongdoings on the part of the prosecutors.]
9:08
Administrative proceedings would not be part of the plea agreement or modified pa.
In our assessment, guilty pleas have been secured with Mr. Allen's cooperation. Mr. Smith was guided by Mr. Allen. Indictments of individuals. What should b e considered in the reduction -
I would suggest to the court it would be appropriate for the court to assume Mr. Allen will continue to be available - as in Weyhrauch case. That would also be determined. Rather than amorphous sentencing or excluding that.
Judge Sedwick: I assume that he will continue in that role with Mr. Weyhrauch.
I have accepted the letter form Mr. S?
Bundy: We maintain strenuously that Mr. Allen has been forthright with the govt.
Judge Sedwick: I assume that.
Bundy: Govt. papers misstated, policy in this district when rule 31.c that ordinarily in plea agreement, the court cannot go below or the govt. will drop the agreement. It will not be lower than ½ unless extraordinary cooperation has occurred. Were 311c agreement, ….??? then there is no such policy.
Judge Sedwick c1c c1b court is free It doesn’t matter.
Bundy: If this were ?? would not be constrained. No policy that prevents….
Judge Sedwick: One thing that sometimes come out where 5k1 motion, cooperating witness has run great personal risk of being assassinated or having family killed. I’ve had a case where one witnessed took a ten year minimum because he was so scared. Was Allen under such a risk?
Bundy: Not aware of such a risk, but the level of
Judge Sedwick: I understand that, but I don’t think any of the witnesses…
Bundy: None of the witnesses, but some deranged person in the community…..
Court knows from medical examination, it was much more difficult for him to go through the gigantic amounts of information.
Judge Sedwick: I’ve seen Mr. Allen testify, I understand.
Trusty: You talk about threat, we have no information that there was any such information about a threat, and of course we would have shared that info had we had it.
Judge Sedwick: didn’t suggest you hid information.
Govt. asked for 8 level reduction, Appears to be appropriate. In connection with some federal crimes, victims allowed to speak at the hearing. Unlike bank robbery, the crimes here have no individual victims, but rather the public at large. Mr. Ray Metcalfe has asked to speak. Since I find he has suffered no particular harm, I find he doesn’t have a right to speak as in various cases named….. So Mr. Metcalfe doesn’t have right to speak
Not hear from Attorneys. Also address amount of fine. I’m seriously considering maximum fine by law $750K
Bundy: I’d like to make sure, on the record, ???? Amounts attributed to Mr. Kohring. $17,000 that Mr. K asked of Mr. Allen and court found he was good for that request. But he never gave him, never loaned him, never did anything illegal to fix his medical or master card payment.
Judge Sedwick: Does it make any difference in the sentencing?
Bundy: I don’t think so. And Mr. Kott assess $???? for a job he never got, Amount court finally approved came from Mr. Allen’s testimony in the Kott trial - that clearly is not, based on the plea agreement, is not allowed to be used.
From Sen. B’s payment - most considered to be legal - all but about 10% should not be considered.
Judge Sedwick. That
Mr. Terwilliger: Thank you for giving me the privilege of appearing in this court before your honor.
Judge Sedwick: To be honest, jut about any attorney can appear here.
Mr.
1. Important but housekeeping
a. request that Mr. Allen serve his time in one of two federal prison camps - Sheridan Oregon or Tucson, Arizona, so he can have support of family without having to travel great distance.
We know how difficult this is, consider three factors:
1. alluded already by Bundy, Mr. Allen’s age and medical conditions
2. proportionality and balance - balancing the good in Mr. Allen’s life and what has been not good - violations of the law
3. Keen sense of justice
Age - 72 years old, going on 73. From both the PSR and Government recommendations, his normal life expectancy, not counting health problems, would have mr. allen spend ½ the rest of his life in jail. All the medications he takes, impaired cognitive functions, appreciate your comments, all are going to make his service of time more difficult than had he not had those conditions and ask you to take them into consideration.
Proportion and balance - Fair to say Allen created a record, that he is extremely hardworking, dedicated, goal oriented individual, Company he built from nothing with no education remarkable. Patriarchal with family and employees. I know you’ve looked at this. He’s done extraordinary things for people out of generosity. What happened here int terms of his involvement can be explained and not excused. he became focused on this pipeline on the benefits it would bring to Alaska, and allowed himself to turn his generosity into illegal behavior. Separating illegal from while there may be a body who view the pipeline or oil exploration may think not good for Alaska. He had views which are protected by the constitution. He allowed his goals to overcome his responsibility to obey the law. So, in doing what he did, he did cross the line.
All of that wrong has to be measured against what he did when he agreed to cooperate - a decision he made without an attorney
Public Corruption is indeed a serious wrong. I spent time in the Justice Department and understand the dangers of public corruption. I was arrested by your words - C has way of eroding democracy….” no one can disagree with that. What he did when he was confronted with this, in all cases where corruption is removed, it takes someone inside who can help out.
If prosecutors thought he was the worst, they wouldn’t have made a deal with him.
What got the job done, was not the surveillance and video, it was Mr. Allen’s corruption.
We understand public opinion is very strong, the ADN tells us.
I’m struck what the Federal system means in cases like this. Federal court have always stood as a bulwark against runaway justice. the most difficult task and awesome responsibility a judge can face is to decide a person’s face in the face of strong public sentiment. We ask you to consider this.
Mr. Trusty: Housekeeping, place keeping, my understanding that federal institutions carefully
Judge Sedwick: I’ve never turned down a recommendation to house someone near family
Trusty: Mr. T puts finger on key issue - balancing wildly conflicting interests. I don’t envy the court. I think Mr. Allen can be a very polarizing figure, may be a polarizing person himself.
Picture of man who loves family, supports family. I don’t dispute. Admirable upbringing from hard scrabble to responsible positions.
But has created a swath of harm by Mr. Allen’s corruption. Harmed institutions very visibly and calls for punishment.
Assume truth lies somewhere in between. Not useful in this case. Truth embraces the extremes. It’s really both his generosity and the harm of his corruption. A difficult balance. Reasonable minds can disagree.
Important to acknowledge cooperation to erode guidelines to where they are now. But also conflicting need for punishment because he was the center of the spokes of this wheel of corruption. Whatever word we want to use, corrosive, graft, this was very devastating to Alaska.
I heard a lot about Mr. Allen’s motivation. Something he didn’t intend evil, he was pushing what he thought was good for alaska, but how he pursued it became corrupt. There is some truth - that Mr. allen, in his mind, could justify his corruption.
But bribery requires out and out greed. They trade their honor for a pittance. The birbr the man who hands out the money, decides he wants the profit despite the harm.
[Allen watching closely.]
He made that decision, not as a one time event, but a regular, corrupt process, Years of affecting the political process.
We’re not blind that there was extensive cooperation. The system anticipates the cooperation that takes place. We don’t ignore the governments position. This calculation does not ignore the benefits of that cooperation. Also strikes a balance.
We know that our guideline range is now 33-41 months, Our recommendation was 46 months. May have said “in the vicinity” we think it appropriate, difficult balance. 41 months sentence appropriate.
Ability to pay is clearly in play here. We think the maximum fine of $750K is appropriate - makes a message. Appropriate component to impose that maximum fine.
We believe under all the tangled circumstances of his history and conduct. Imprisonment in 41 months, originally said 46, maximum fine.
Judge Sedwick: Mr. Allen, you have a right to speak:
Bill Allen: I can’t talk fast. I started. . . went to Alaska in 1968, it was good timing, They needed people like me to develop the Cook Inlet. Oil companies wanted me to go in and I did, I went , I was really wanting to do oil pipeline. I didn’t know anything about politics at that time. I could see we weren’t going to get any pipeline.
Boom in North Sea. I went there. 1000 people in platforms, So it came along pretty good. I also had VECO. Hard to take care of VECO here in Alaska and company in North Sea, Tough time doing both. I think we got the oil pipeline about ‘75 and so I started trying to sell my part of the company in the North Sea. I was successful. I took that money back to Alaska and put it on the Slope. I went up there, Done it myself. Took me a year to get all the shops set up. It was successful. So I both the timing was great. When I seen that we were going to produce about 2 million barrels a day. I thought, boy Alaska really needs to make sure that they keep that. I think Prudhoe producing about 2 million, about 20 % of the oil used in the Lower 48. From that Alaska really, good deal for Alaska. Look at all the buildings, libraries, roads. When I come up to Alaska in ‘68, they thought it was great, but some of the media didn’t like oil for some reason. I don’t understand why.
When I got . . and decided if i could help with oil, I hired a lobbyist. He said the best thing I could do is fundraisers for guys who have the same minds I have to protect oil and we have a pretty good tax here. It was really balanced. Anyway those fundraisers, we did a lot of good people, legislators About that time lobbyist and I parted ways and I got more personally involved in the political process. We needed ….. and that is the reason I thought about that time I hired Rick Smith to help with the fund raisers. He’s good at that. A little more than 2 years. Big war between Times and Anchorage Daily News. Had a bigger . . .than I had. . . I had [Anchorage Times] for about 15 years. What they thought - conservative people think When Murkowski was elected. I think he done a good job. Hard headed. Other than that he done a good job. Got the three producers together. Really got together I thought man I can really… All they wanted was clarity on their oil taxes and they would build the natural oil pipeline. And they would put more money in oil - heavy oil big job, West ??/, Almost as much oil as Prudhoe but hard to produce.
So we had a . . . between oil companies and state, They need to be married. It got close. Tried to push it too far, over the line. But I did. When they nailed me in 2006, it was a 30 Aug. 2006. They give me a tape that really embarrassed me. I can’t talk anyway. When they were taping it, hell I could tell I was half drunk. I didn’t like looking at myself.
I made two decisions. I was going to do the right things. I quit drinking. I haven’t had a drop of alcohol since 2006. I’m not an alcoholic, but you do a lot of drinking. Not as good as it should be.
I’d like to apologize to you, to the people here in Alaska. Instead of me really helping them. I pushed them down really. I thought I was. I worked with the govt. 2 years. It was like a job. We probably done five to seven days a week trying to get ready for all these trials. I couldn’t [work?] full time, because of what I had to do to help them. It was hard a lot of people who were my friends. So your honor, I respectfully, go ahead and sentence me. Try to remember I tried.
Judge Sedwick. Thank you Mr. Allen.
The lawyers and some of you in the auditorium who have been at previous trials know I need to consider certain factors.
Congress chose to list:
Par. Nature and circumstances of the defendant - that’s really two factors, here they go in two direction. The effect of corruption on political process affects us all Democracy doesn’t work if corrupt. We can see that around the world. We are blessed in a country where that isn’t true. We enjoy the benefits of a true democracy. Time to time we face corruption. So this is a very serious offense.
The characteristics of the defendant points in another direction. Though not all commendable. His participation in the political campaign work in the 80s show he tried to affect that process.
To affect politics now requires large amounts of money. Large advertising campaigns.
But Mr. Bundy and Mr. T’s comments and letters of support, he is a person who is generous and has done a lot of good in the community, so this factor is difficult to assess. The balance of the offense and characteristics of the defendant.
Some in the guidelines or a little higher are appropriate. Seriousness of the offense requires relatively stiff sentnce. PROMOTION g respect for the law, just. Mr. Allen does have some medical needs.
Defendant isn’t likely to pursue further criminal conduct. He didn’t have much eduction but is very intelligent. Anyone in Allen’s position would think twice bore engaging in the type of activity in which he was engaged. Conspiracy almost always unravels. You are putting your life in the hands of other people, who are by definition are criminals.
2. US Sentencing commission - level 20, category 1 = between 3-4 months, People will compare to Pete Kott and Vic Kohring. Big differences. Mr. Allen has cooperated. Mr. Kohring and Kott had the opportunity to cooperate and they refused. Also refused to take responsibility for their crimes. Not an appropriate comparison.
What Mr. Allen did is very substantial . Rare for government to recommend level less than ½. The only thing that would have made it stronger would have been if there had been threats against his life and family.
In this case, the person at the top of the pyramid who decided to cooperate. There are no real victims, but the people in this room, except perhaps the lawyers for DC. I’m directed by congress to impose a sentence that is no more than necessary.
Mr. T asked me to consider Mr. A’s health.
to achieve all the objectives, cooperation, 3 years of prison is required. Less than that would be insufficient. Greater than that doesn’t take into consideration his cooperation and his personal conditions and the difficulty he will face in prison. The people there are not dangerous, but it is punishment, it is prison. Their daily regimen is directed by others, not them. It is a miserable existence.
The fine. The crime here committed for more than one reason. I don’t doubt that he believes he was doing things for the best interest. But so do the people of opposing views, but they don’t commit crimes. Mr. A did commit a crime and it did involve a lot of money. Hundreds of millions if not billions of dollars for the people of the state. If that money had been left to the oil companies, Mr. A and his company would have gotten some of that money. 10s if not 100s of millions for his company.
If I were able to impose a larger fine I would. The maximum is $750K.
Sentence; 36 months on count 1, 2, 3, to be served consecutively, concurrently.
Probation.
Drug testing is suspended.
Required by statue, collection of DNA sample.
Submit to search of person, vehicle, place of employment on reasonable suspicion of contraband.
Until fine is paid, access to financial records.
Fine of $750K, Interest on fine will not be waived.
No fire arms.
Special assessment of $300
Conditions remain in effect until report to institution. Won’t report until told where to report.
Court advises me I said consecutively I meant concurrently.
In Sheridan, Oregon or Tucson.
In your plea agreement you waived your right to appeal. Normally , not appealable, but if you have some issue, you need to take it up in
