FBI seized Stevens note

'OVER $130,000' PAID: Two pages to former federal prosecutor become part of probe into home remodeling.

10 Aug 2007 // FBI agents earlier this week retrieved a handwritten note by U.S. Sen. Ted Stevens to former U.S. Attorney Wev Shea in which Stevens said he and his wife paid "over $130,000" for the Veco-supervised renovations to their home in Girdwood.

The amount described in the note, dated June 7, is the only time Stevens is known to have put a figure on his out-of-pocket costs for the 2000 addition, which more than doubled the size of the house. Stevens told reporters last month that he paid every bill he received, leaving open the possibility that he wasn't billed for all the work. He has declined to answer any more questions.

If $130,000 is an accurate total, it would raise questions about how such a major renovation could have been accomplished within such a tight budget. The carpentry contractor alone said he was paid more than $100,000 by Stevens. Another contractor, who raised up the house to make room for the new first floor and built part of the foundation, said he too was paid by Stevens, though he didn't recall the amount. The earth-moving contractor who prepared the ground for the job also said he was paid by Stevens.

That would leave little if any left over for a range of other work that was done, everything from design to plumbing and electric to a new roof. As recently as this week, Stevens declined to answer questions about how the project was billed and financed.

Federal investigators are keenly interested in the matter as part of their three-year investigation of official corruption in Alaska. They've subpoenaed witnesses to testify about the project before grand juries in Anchorage and Washington, D.C., and the FBI and IRS conducted a 12-hour search of the home July 30, with agents documenting the addition in painstaking detail. According to the office of the Senate historian, it was the first time a sitting senator's residence was searched in the history of those agencies.

'SAD PORTION OF MY LIFE'

Stevens' note was a thank-you to good wishes from Shea on the eve of a White House dinner held in Stevens' honor on May 23. Stevens' remarks about the construction project were unsolicited.

"This is a sad portion of my life -- it will take time to explain," Stevens said in the two-page note. "Catherine and I personally paid over $130,000 for the improvements to our chalet in Girdwood. Someone -- or more than one -- keeps telling the FBI that's not so. Takes time to go back over five years to prove they are wrong."

In a briefing with Alaska reporters in Washington on July 16, Stevens appeared to leave room for a discrepancy between what he paid and the actual costs.

"We paid every bill that was given to us. Every bill that was sent to us has been paid, personally, with our own money, and that's all there is to it," Stevens said before cutting off questions about the house and the investigation.

The existence of the note was first reported Sunday in the Seattle Times. At 9:30 a.m. Monday, Shea said, two FBI agents on special duty here from Miami arrived at his downtown office and asked for the original. Shea turned it over.

In executing their search warrant on Stevens' home July 30, agents appeared to be as interested in the house itself as in removing anything inside. They used tape measures, still cameras, video cameras and even a special camera capable of producing 360-degree panoramas to document the dwelling and its fixtures.

With the curtains drawn, it was impossible for someone outside to tell what the agents were doing in the house.

But outside, agents scaled the building on ladders to take pictures of the aluminum roof and the ice-melting heat tape installed on it and in the gutters. They took detailed pictures of outdoor electrical fixtures, including those on a spruce tree in the front yard, and twice uncovered and photographed a stainless steel barbecue.

The house was expanded by jacking up the one-story building and adding a new ground floor with two bedrooms, a sauna, bathroom, a laundry room, game room, "mud room" and garage, according to plans filed with the city at the time.

Three contractors who discussed their role in the project with the Daily News in May would have absorbed most or all of the $130,000-plus cited by Stevens. Specifically:

• Augie Paone of Christensen Builders, the main contractor, said he was paid "more than $100,000" by Stevens for framing, other carpentry and some of the kitchen cabinetry and painting. Paone said he has testified about the project before a federal grand jury in Anchorage.

• Anchorage house mover Toney Hannah said he was paid by Stevens for jacking up the home, building a new foundation, then lowering the home on the new first story. He didn't recall how much he was paid and couldn't look up the invoices because they had been taken by the FBI.

• Girdwood contractor Bob Redmond was paid by Stevens for earth-moving work associated with the project, according to his stepmother, Jean Redmond. The FBI took his files as well, she said.

That leaves the project design, blueprints, Veco's project management, plumbing, heating and electrical work unaccounted for, as well as carpentry work performed before Paone was hired. In addition, a neighbor, Daryl Pederson, said a new aluminum roof was installed at the time, on a roofline with multiple peaks and angles. Whether the project included new appliances or other furnishings couldn't be determined.

Paone said he was hired by Veco's chairman at the time, Bill Allen, and said he submitted his invoices to Veco first before he was paid by Stevens. Paone said he observed mechanical contractors working on the heating system and plumbers on the pipes, but didn't recall who they were.

Paone said he has no idea if other contractors were paid by Stevens. "It's just that he was never around. He didn't know what was going on."

'DESIGNED BY JCH'

Four sheets of building plans submitted to the city for the project contained no identifying mark that would show who drew them or for whom the designer worked. However, the initials "JCH" were printed next to "Designed By" on all four sheets, along with a date of July 24, 2000.

The initials match John C. Hess, a Veco employee who works in the company's engineering group. Visited at his Anchorage home in June, he declined to talk about the Stevens project. Asked if he drafted the plans, he said, "That's possible." On Thursday, his wife, Jill, said the plans were his.

Hess was one of five current or former Veco employees listed on a subpoena summoning Girdwood resident and Stevens friend Bob Persons to a grand jury in Washington, D.C., in May. Persons, who took out the land use permit for the project, was asked to bring any information or documents connecting those five employees to the work on Stevens' home.

Allen has pleaded guilty to bribing Alaska legislators and violating tax laws and is cooperating with federal authorities in hopes of getting a reduction in his sentence and keeping other family members out of jail. The FBI had wiretaps on his phones and video surveillance of his lobbying hotel suite in Juneau for more than two years before the federal investigation broke into the open in August 2006 with raids on the offices of six legislators, including then Senate President Ben Stevens, Ted Stevens' son. Ben Stevens has not been charged.

Persons looked after the house when Stevens wasn't around, and was given power of attorney to act for the senator and his wife on the remodeling project. Shea, the U.S. Attorney for Alaska between 1990 and '93, got to know Persons 30 years ago when Shea was living in Girdwood and Persons owned a cafe. Persons since achieved acclaim with his Double Musky restaurant.

Shea found out from Persons that Persons, his wife, and other Alaskans were invited to the White House for a special dinner honoring Stevens on May 25 -- two days before Persons' date with the grand jury. It was among the tributes to Stevens this spring when he became the longest serving Republican senator in history. Shea faxed a letter to Stevens, praising his "commitment to Alaska," honoring his military service, and describing their mutual friendship with Bob and Deanna Persons.

In his June 7 reply, Stevens didn't mention the White House dinner but discussed his house.