September 20, 2005
Tuesday

ANCHORAGE, Alaska - State Sen. Ben Stevens held a secret option to buy into an Alaska seafood company at the same time his powerful father, U.S. Sen. Ted Stevens, was creating a special Aleutian Islands fishery that would supply the company with pollock worth millions of dollars a year.

The pollock allocation alone was projected to provide the company with $1.5 million in profits this year and $3.7 million in 2006, the company's founder said in an affidavit in March, before problems involving the company and the availability of fish cast doubt on those numbers. Under his deal, Ben Stevens would have been entitled to one-fourth of the profits of the company, Adak Fisheries.

During the time he held the option, the company grew in value from about $2 million to at least $8.5 million, according to an owner and court documents.

A copy of Ben Stevens' option agreement surfaced as one of hundreds of documents submitted in the last few months as evidence in several lawsuits involving the company, its owners, its landlord and government regulators.

In the past few weeks, Ben Stevens' attempt to obtain ownership in Adak Fisheries has been the subject of news stories on KTUU-Channel 2 and in the Daily News - coverage denounced by Ted Stevens at a recent news conference.

The secret option was a surprise to officials of the Aleut Corp., the intended beneficiary of the pollock fishery, they said, when they learned of it late last year. The company, the regional Native corporation for the Aleutian Islands and the Pribilofs, had invited Ben Stevens to serve as a director of Aleut Enterprise Corp., its subsidiary charged with the economic development of the former Navy base at Adak.

As a director of Aleut Enterprise Corp., and without disclosing his conflict of interest, Ben Stevens voted to transfer the pollock rights to Adak Fisheries and argued against the Aleut Corp. claiming a larger share of the profits, according to Aleut officials in court testimony or interviews with the Daily News.

Ben Stevens has repeatedly declined to answer any questions from the Daily News about the option or any aspect of his activities involving fish processing at Adak or the Aleut corporations.

"My attorneys have advised not to discuss it because it's before the court," he told reporters two weeks ago.

Nevertheless, Stevens discussed the option on an Anchorage talk radio show last week and asserted he had no obligation to disclose it.

In a deposition Aug. 10, Aleut Corp.'s corporate counsel, Roger DuBrock, said he first heard rumors about Stevens' option in summer or fall 2004, after Stevens left the Aleut Enterprise Corp. board. He said he began worrying about the consequences if it were true and word leaked out.

"My concern is that if it ever became public knowledge that Sen. Ted Stevens got legislation passed for a pollock allocation that ended up getting assigned to Adak Fisheries, and that Ben Stevens, his son, had an ownership interest in that company, there would be all kinds of unfavorable newspaper reports written that might damage Senator Stevens and might damage Ben Stevens and might damage the Aleut Corporation," DuBrock testified.

There is no evidence that Ted Stevens created the pollock allocation to benefit his son. In angrily denying any such link, the elder Stevens told reporters on Sept. 9 that doing so would be a crime.

In fact, he said, he never discussed the pollock allocation with his son. He said he only learned of the option from recent news reports.

Stevens said he pushed the measure to spur the economic development of Adak.

"The people I talked to are (Aleut fish consultant Clem) Tillion and the (federal North Pacific fishery management) regional council people, and I'll be glad to show you the memos that (Senate staffer) Matt Paxton wrote to me back in '03," Stevens told reporters.

The next business day, Monday, when a Daily News reporter asked to see the memos, Stevens rescinded the offer.

George Lowe, Ted Stevens' chief of staff, offered to go "off the record" to explain why Stevens now will not provide the documents, but the Daily News declined to accept the information under such a restriction.

Stevens' spokeswoman, Courtney Boone, said Stevens' offer to provide the documents was valid only during the course of the Friday press conference. Stevens said nothing about a time limit on access to the documents at the time, although he did say the press conference would be his last comment on his son's option.

Though Adak Fisheries was a limited liability company - more like a partnership than a corporation with stock - Ben Stevens' option was similar to a stock option. It gave him the right to buy a 25 percent stake in the fish processing company for an immediate payment of $50,000 and another $450,000 paid over time. The option does not specify an interest rate or term for the note.

Stevens had 29 months, until Dec. 31, 2004, to exercise the option.

Among the unresolved questions now subject to litigation is whether Stevens' option is valid.

Until two weeks ago, when a judge ruled in one of those lawsuits, Stevens was president of Adak Fisheries, for which he was paid $10,000 a month, according to a company owner's testimony.

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