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Senator's Way to Wealth Was Paved With Favors

Circle of Influence

December 17, 2003|Chuck Neubauer and Richard T. Cooper | Times Staff Writers

ANCHORAGE — He wielded extraordinary power in Washington for more than three decades, eventually holding sway over nearly $800 billion a year in federal spending.

But outside the halls of the U.S. Senate, which is a world of personal wealth so rarified some call it "the Millionaires' Club," Sen. Ted Stevens (R-Alaska) had struggled financially.

Then, in 1997, he got serious about making money. And in almost no time, he too was a millionaire -- thanks to investments with businessmen who received government contracts or other benefits with his help.

Added together, Stevens' new partnerships and investments provide a step-by-step guide to building a personal fortune -- if you happen to be one of the country's most influential senators.

They also illustrate how lax ethics rules allow members of Congress and their families to profit from personal business dealings with special interests.

Among the ways that Stevens became wealthy:

* Armed with the power his committee posts give him over the Pentagon, Stevens helped save a $450-million military housing contract for an Anchorage businessman. The same businessman made Stevens a partner in a series of real estate investments that turned the senator's $50,000 stake into at least $750,000 in six years.

* An Alaska Native company that Stevens helped create got millions of dollars in defense contracts through preferences he wrote into law. Now the company pays $6 million a year to lease an office building owned by the senator and his business partners. Stevens continues to push legislation that benefits the company.

* An Alaskan communications company benefited from the senator's activities on the Commerce Committee. His wife, Catherine, earned tens of thousands of dollars from an inside deal involving the company's stock.

Stevens, in a written response to questions submitted by The Times, said that in all these cases his official actions were motivated by a desire to help Alaska, and that he played no role in the day-to-day management of the ventures into which he put money.

"I am a passive investor," Stevens said of his real estate dealings. "I am not now nor have I been involved in buying or selling properties, negotiating leases or making other management decisions."

All in the Family

In these deals and others, Stevens' brother-in-law, William H. Bittner, played a pivotal role. An Anchorage lawyer and lobbyist, Bittner represents major business interests for whom the senator has repeatedly gone to bat. In one instance, Stevens engineered a $9.6-million federal appropriation that chiefly benefited a Bittner client, part of South Korea's Hyundai conglomerate.

Stevens tucked a single line into a must-pass appropriations bill that used federal tax dollars to buy the company out of a coal-loading facility in Seward.

Stevens said he did it to lower the company's costs and keep it from canceling an agreement to buy Alaskan coal. Bittner did not respond to questions from The Times.

Stevens' relationship with Bittner fits an increasingly widespread pattern in Washington: Senior senators do favors for special interests that pay hundreds of thousand of dollars in lobbying and consulting fees to the senators' children, spouses and other relatives.

As The Times documented in a series of articles in the summer, Sens. John B. Breaux (D-La.), Trent Lott (R-Miss.) and Orrin G. Hatch (R-Utah) did favors for companies and groups that paid their sons as lobbyists and consultants. Sen. Harry Reid (D-Nev.) has pushed through federal land trades and other provisions benefiting Nevada interests that employ his sons and son-in-law.

The Times also reported that Stevens had continually supported interests that paid his youngest son, Ben, hundreds of thousands of dollars as a consultant.

The senators all said their decisions on policy issues and legislation had not been influenced by their relatives.

But Stevens' dealings have carried him a step further. His official actions have helped individuals and companies from which he himself draws financial benefits, a six-month Times examination found.

His required financial statements have fallen short of complete disclosure -- especially on the activities of a small investment corporation owned by his wife and her family, a company that is covered by the reporting rules.

The Senate has few ethics rules governing such arrangements. Although accepting expensive gifts and speaking fees is banned, the conflict-of-interest rules are much less explicit. For example, nothing clearly bars a senator from sponsoring legislation that benefits the clients of family members who lobby. Nor are lawmakers prohibited from going into business with people receiving legislative favors.

Mainly, the Senate relies on an ill-defined injunction not to bring shame upon the body.

Senate Ethics Committee Chairman George Voinovich (R-Ohio) declined to discuss the issues raised by The Times articles.

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