Ted Stevens has made me question the value of my friends, because I can tell you, I've never had friends as generous as Ted's. In fact, just about anytime Ted Stevens has been anywhere near anything that brings question to his honor as the Senior Senator from the Great State of Alaska, it seems we hear about another friend just doing him a favor, like any friend would.
Maybe it's time the FBI looked at a few of them as well.
Again, a little personal history.
As I mentioned Thursday, I had a very good career in Alaska until 1997, when I suddenly found myself unable to find work. It wasn't that there weren't jobs available, or that I wasn't qualified for those jobs; it's that most of the jobs were with Veco, and I had been a thorn in the Republicans' paw in the early and mid-1990s.
So, from 1997 to 2001, I had a very tough time getting work in engineering or industry. I floated from contract to contract, barely making ends meet, took time Outside to visit family... Basically, I didn't know what I was going to do.
Then, in late August of 2001, I got a phone call from an engineer who knew my position, telling me that a company he was working for needed a business writer. I interviewed and was hired, finally ending that four-year drought.
The company's name then was Alaska Petroleum Contractors. It was owned by a company called Natchiq, which was in turn owned by the Arctic Slope Regional Corporation.
The Arctic Slope Regional Corporation, for you Outsiders, is an Alaskan Native Corporation, created in 1971 by the Alaska Native Claims Settlement Act, or ANCSA.
Basically, ANCSA was a quick solution to an old dispute to land rights claimed by various Alaskan Native interests after Alaska's statehood. The crowning achievement of the act was the creation of the first 12 Alaska Native Corporations.
The act mapped out different regions across Alaska, based on both geographic and cultural factors. Members of the villages within a region were made Shareholders in their own corporation, after which they elected a board of directors and created corporate bylaws and controls, the same as any corporation, with the exception that shares in the company could not be sold on the market -- they had to stay with members and their progeny. Each company was loaded with capital from the settlement, and each was left to invest the money as it saw fit.
The Arctic Slope region included Barrow, Nuiqsut, Pt. Hope, and most of the rest of the North Slope, home primarily to the Inupiaq Eskimos. ASRC decided to invest its money into corporations within the state in order to allow the hiring and training of its own Shareholders. This, they felt, was the best service they could provide, and I can't think of a more honorable goal.
ASRC invested much of its capital into existing companies of various kinds -- most having something to do with oil services, engineering or construction. After buying a company, Shareholders with interest and ability could be hired and trained by these experienced companies.
This venture turned out better for ASRC than it did for most of the Regional Corporations. Because they bought already-successful companies, they continued to make money while giving opportunities to their Shareholders. And because they had invested in construction and oil services, and the producers and pipeline had to use their lands, ASRC found contracts easy to come by. By 2001, when I signed on, they had over $10 billion in assets, had over 3,000 employees, and were seeing over a $1 billion per year in revenue.
I began work just as excitement was growing over ASRC's new building. Instead of having these businesses spread out all over the place, ASRC had commissioned a trophy 10-story office complex in mid-town Anchorage. In 2002, many of the companies moved into the ASRC Building. Shortly thereafter, they reorganized into business units -- Natchiq and its subsidiaries became ASRC Energy Services.
I was looking around the building on the first day with my boss, one of several Vice Presidents, and was curious about the investment value. He told me the building was leased. 20 years, at $6MM/year.
I looked at him funny, but I didn't question it to his face. "Why," I wondered, "would a company with the assets to afford a $40MM building of their own instead commit to a 20-year lease? Why would they commit to paying $120MM over 20 years without a bit of equity to show for it at the end?" The whole thing just smelled a little funny to me.
So, back to Ted's friends. Ted has lots of good friends, remember? We've learned in just the last few weeks how far his friends will go for him -- taking care of his remodeling, for example.
One of Ted's very good friends is a man by the name of John Rubini. Rubini is a partner in JL Properties -- who by sheer coincidence, were also the landlords of ASRC's new building.
Rubini was such a good friend, that he allowed Ted to buy into JL for only $50K in 1997, and waived the usual risks and debt protection usually required of stockholders. Of course, what did Ted, Chairman of the Senate Appropriations Committee, ever do for John, except for allegedly steering a $450MM military contract right into JL's lap.
Another of Ted's very good friends is a man by the name of Jacob Adams. Jake was a legendary Inupiaq whaling captain -- who, by sheer coincidence, was also Chairman of the Board of ASRC.
Jake was such a good friend, that instead of buying land and building his own building, which his company could have easily afforded, he instead leased Ted's building for 20 years. Of course, what did Ted ever do for Jake, other than steer large military contracts toward Jake's company by reclassifying Native Corporations as "Small and Disadvantaged," eligible for 8A status -- usually reserved for very small minority- and woman-owned businesses. (Government contracts usually require that a percentage of the work of the Prime Contractor goes to 8A corporations.)
Oh, right. There was that one other thing. Jake's family had a few acres of land there on the North Slope, of course. During the cold war, there was a radar station built close to that land, and a few acres still had military clutter left. Rather than cleaning up those few acres, Ted inserted a $2.5MM rider to the military spending bill to buy the land from Adams and his two siblings. Because the Adams' were heartbroken at the loss of this precious land, Ted paid them $15,000/acre for 160 acres -- urban prices -- even though only a few of those acres were actually cluttered.
Oh yes... John, not to be outdone on the Friendship meters, decided to buy out Ted's share of the ASRC Building after only five years. Ted's investment: $50K. Ted's price tag: $872K. 1600% isn't bad for a five-year risk-free investment, eh?
So, friendship works something like this:
Ted, sitting on a pile of taxpayer money, hands a big chunk off to his friends, Jake and John.
John, sitting on a big pile of money from military contracts and the ASRC Building investment, hands off a big chunk of money to his friend Ted.
And Jake, sitting on a big pile of ASRC capital, forgoes normal business sense and hands a big chunk of money off to Ted and Rubini's JL.
When this was all developing in the late '90s-early '00s, all parties denied everything, and Ted was untouchable -- nobody would investigate any further. National ethics watchdogs were yelling for an investigation, but none ever ensued.
Ted is no longer untouchable. I think it's time we go back and take a closer look, and I truly hope the FBI would agree.