Veco's Chairman Allen used Sen. Stevens' home, witness testifies

WASHINGTON — Susan Covich found her father's house in Girdwood to be a convenient place to stop and spend the night during frequent trips between her home in Kenai and Anchorage, where between 2002 and 2004 she was furthering her own education and later attending to an ill friend's affairs.

But there were times, she testified in her father's trial Tuesday, that she arrived in Girdwood late at night to find strange cars in front of the chalet and people behind closed bedroom doors inside. One of those people would be Veco chairman Bill Allen, the oil-field contractor who helped renovate the place for her father and stepmother, Sen. Ted Stevens and Catherine Stevens.

Covich, a substitute teacher in the Kenai public schools, testified there were times that Allen appeared to have more control of the house than she did.

"I slept on the couch," Covich said of one such occasion when none of the five bedrooms was available. Allen appeared in the morning and told her she could move to one of the upstairs bedrooms, she said.

Another time, she said, "I was planning to make my stopover into my Dad's house," she said. "There were lights on, cars in the parking lot. It just got too creepy, so I just drove on."


Stevens is on trial on seven felony counts of failing to disclose about $250,000 in gifts and services on his annual financial statements. Most were from Allen and Veco and involved their effort to renovate and furnish Stevens' home.


With Covich's testimony, the first by a member of the Stevens family, the defense appeared to be making the point that Allen had himself in mind for some of the improvements he made to the home, and that Stevens didn't want all that Allen did. In one note from Stevens to Allen entered as evidence early in the trial, Stevens said he considered a $6,000 outdoor barbecue grill to belong to Allen, though Veco permanently plumbed it to a gas line on Stevens' upper deck and installed it there with a crane.

What could not be known Tuesday was how the jury would react to the assertion that Covich couldn't use her family's home on multiple occasions because Allen was there using his own key, apparently with the authorization of her father. There was no testimony about why Allen was there.

Covich also testified about another point that came up in the trial, this one involving her son. She confirmed that Veco got a job for her son, John Covich, on the North Slope, after he got out of a special high school program for troubled teens.

But, sobbing softly, Covich said her son had a "substance abuse problem" and "had some run-ins with the law because of that." When he begin missing the plane to the Slope, he was fired, Covich said, though Veco offered to take him back if he went straight.

That apparently happened in 2003, when Veco began paying his tuition and expenses to learn heavy diesel mechanics at the state vocational training center in Seward, she said.

"He survived the first semester, but right after Christmas he got back into abusing drugs again and was kicked out of the program in January 2004," Covich said. "He is residing in a correctional facility now."

State records show John P. Covich was locked up at the Wildwood Correctional Center in Kenai on April 29 for a probation violation with no set release date.


The defense has announced that Ted Stevens and Catherine Stevens will probably follow Covich to the witness stand later this week, though that could change. U.S. District Court Judge Emmet Sullivan said Tuesday that he expected the case to wrap up Monday with closing arguments and jury instructions.

It might have been possible for the case to go to the jury Friday, he said, but he doesn't like to start deliberations just before a weekend since the jury may feel pressured to reach a quick verdict.

That schedule would mean that the jury could return a verdict less than two weeks before the veteran Republican stands for re-election. He faces Anchorage Mayor Mark Begich, a Democrat.

In other testimony Tuesday, lawyers for the senator continued to attempt to sow doubt in the minds of the jury as part of their effort to prove the central theme of their defense: that the Alaska Republican thought he was paying every bill he was given for his home renovations.

They bolstered their case with testimony from Augie Paone, owner of Christensen Builders of Anchorage. The contractor did the bulk of the carpentry that doubled the size of Stevens' once modest A-frame.

Prosecutors are trying to show that Veco paid for much of the work, including the decks, plumbing and a complete electrical overhaul. To that end, jurors heard exhaustive testimony from Veco employees and tradesmen -- especially the electricians -- who worked on Stevens' home yet never submitted bills for their work.

But Paone, a defense witness, said Tuesday that even though he was primarily the carpentry contractor, he also purchased electrical and plumbing supplies -- and presented them as line items in his bills, with the complete invoices from suppliers as backup.

His testimony suggested Stevens and his wife could have thought they were paying for everything themselves, even though Veco paid for the plumber and electricians and at least some of the material, according to earlier testimony.

Paone said he was very careful to do everything by the book, knowing Stevens' position. After meeting with Allen in late summer 2000 to go over the project's parameters, they decided Allen would review his invoices before they were sent to Stevens.

Paone said Stevens' wife, Catherine, paid him promptly when he sent the first five bills.

But the sixth bill, for $19,818, is another matter. It's clear Stevens never paid it, but Paone's testimony about why was delayed by a legal dispute that led to the jury going home early Tuesday.

In their opening statements, Stevens' lawyers told jurors that Paone was told by Allen and the construction foreman Robert "Rocky" Williams that he was going to "eat that bill."

But prosecutors argued that Paone's testimony Tuesday seemed likely to contradict his own testimony to a grand jury, where he said that Allen never explicitly said he would "eat" the bill, but implied it. Allen also testified he never specially told Paone he was stuck with the bill.

The judge will make a decision this morning on how to proceed.


In other defense testimony Tuesday, Jeanne Penney, a close friend of Stevens' wife, Catherine Stevens, testified about a $3,000 stained glass window that she bought as a housewarming present once the Stevenses finished construction on their home. Prosecutors have presented evidence that Stevens never disclosed the window as a gift.

Tuesday, Penney stumbled when she described for whom the gift was intended.

"I gave her a gift. I gave them a gift," she said, adding, "The interest of that gift was primarily to my friend, Catherine Bittner Stevens."

She described her friendship with Catherine as predating Catherine's marriage to Stevens and as one of two women who can sit around for hours in their pajamas, drinking coffee and talking.

Two other character witnesses also testified Tuesday. Sen. Orrin Hatch, R-Utah, a Senate colleague since 1976, described his friend as a "fine, decent, honorable man."

"I'd rate him at the very top," Hatch said. "He's one of the true lions of the Senate, along with my friend Ted Kennedy. He's totally honest, totally straightforward, fights for his state like you can't believe."

Also on Tuesday, Double Musky owner Bob Persons took the stand briefly outside the presence of the jury while Judge Sullivan called Persons' lawyer, Eric Sanders, in Anchorage. Persons, listed as one of Stevens' final witnesses, had asserted his Fifth Amendment right to not testify when he was subpoenaed to the grand jury in Washington before Stevens' indictment, lawyers for both sides said in court.

But now, he was willing to testify on behalf of his friend, Stevens, and the judge wanted to be sure that Sanders had advised his client of the risks of self-incrimination. Sanders assured the judge that Persons knew what he was doing.

Persons has emerged as a key figure in the house expansion. His name is on the construction documents filed with the Anchorage city building department, and witnesses said he was a frequent visitor to the project. The government has introduced dozens of e-mails showing how he kept Stevens abreast of the work.


Sullivan ruled Tuesday morning that thousands of e-mails from Catherine Stevens' work account will be turned over to federal prosecutors, who first asked for them more than a year ago. The defense had fought to prevent the documents from being turned over on relevancy grounds and also under the spousal privilege doctrine, which generally prevents one spouse from testifying against the other in a criminal case.

Prosecutors argued that communications between the couple "will be relevant to show the material elements of the charges in the indictment, including defendant's knowledge, intent and motivation for concealing the benefits he received from Veco."

They added that "in particular, we anticipate that certain documents at the time of the renovations will reflect that both Catherine Stevens and defendant knew they had not paid for the Veco work, and documents thereafter will reflect that Catherine Stevens and defendant took steps in 2004 to mislead the press when the media was investigating the costs associated with the renovations."

Sullivan said he saw no reason for prosecutors not to have the documents, and he ordered Stevens' lawyers to turn them over. But after reviewing the e-mails during the day, prosecutors said Stevens' law firm had failed to turn over any from the most relevant time frame -- from 2001, when she started work there, to 2004.