FBI’s Suite 604 Sting Takes Down Alaska Politicians
Alaska’s most shocking scandal broke in a hotel room just blocks from the State Capitol.
In 2006, FBI agents set up hidden cameras in Suite 604 of Juneau’s Baranof Hotel, where oil exec Bill Allen handed out cash to greedy lawmakers.
The 70-something CEO kept hundred-dollar bills ready in his pocket for politicians who came asking. Soon, the feds caught Rep. Vic Kohring begging for money and House Speaker Pete Kott bragging about killing an oil tax bill through lies.
The case took down six legislators and even U.S. Senator Ted Stevens.
Today, you can walk the same streets where Alaska’s “Corrupt Bastards Club” once did their dirty deals.
FBI Cameras Rolled in Juneau’s “Animal House”
The FBI set up shop just three blocks from Alaska’s State Capitol in spring 2006. Agents put tiny cameras and recording gear in Suite 604 of the Baranof Hotel in Juneau.
They watched VECO Corporation CEO Bill Allen meet with state lawmakers during talks about oil taxes. Politicians and oil folks called the suite the “Animal House.”
Allen kept bribe money ready, stuffing hundred-dollar bills in his pocket for quick handouts when lawmakers came looking for cash.
Lawmakers Embraced Their Corrupt Nickname
Lori Backes wrote a newspaper column in spring 2006 calling out 11 Alaska lawmakers who took big campaign money from VECO. Instead of feeling bad, the lawmakers jokingly called themselves the “Corrupt Bastards Club.”
They even made CBC hats and wore them at Juneau hotel bars during lawmaking sessions. VECO bosses handed out these hats like party gifts.
The name stuck among the group, showing how open corruption had become in Alaska’s capital.
Representative Kohring Asked for Help with His Debt
On March 30, 2006, Representative Vic Kohring walked into Suite 604 with money troubles. He told Bill Allen about his $17,000 credit card debt from medical bills.
Kohring worried the debt might hurt him if it went to collections. FBI cameras caught Allen counting out cash right there, saying “Let me count first here.”
Kohring took the money and asked, “What can I do to help you guys? Anything?” The whole exchange appeared on video.
Oil Tax Legislation Became the Main Target
Allen pushed for oil tax laws that would help build a huge North Slope gas pipeline. VECO spent the lawmaking session fighting higher oil tax rates, wanting a 20 percent rate that oil companies liked.
Allen and his VP Rick Smith held many meetings at the Baranof while FBI cameras recorded everything.
Oil companies needed clear rules before putting money into the big pipeline project, and Allen made sure friendly politicians helped them.
Former Speaker Bragged About Breaking Rules
Former House Speaker Pete Kott visited Suite 604 and told Allen how he killed an oil tax bill. FBI cameras caught him saying: “I had to get ‘er done. So I had to cheat, steal, beg, borrow and lie. ”
Kott openly talked about how he tricked other lawmakers and blocked bills that would hurt VECO’s business. Allen showed his power by telling Kott, “I own your ass.” Their casual corrupt talk showed how normal such deals had become in Alaska politics.
Cash Changed Hands on Camera
The FBI caught Allen counting out $1,000 and giving it straight to Pete Kott in Suite 604. The money went from Allen’s pocket to Kott’s hands while they talked about upcoming oil tax votes.
Allen kept his bribe money in his front pocket for easy access.
This scene became key proof in later trials, clearly showing the cash-for-votes deal between the oil boss and the lawmaker.
Senator’s Son Got $243,250 for Mysterious “Services”
Senate President Ben Stevens, son of U. S. Senator Ted Stevens, got over $240,000 from VECO for supposed “business services.”
Allen later said in court that the payments were for “giving advice, lobbying colleagues, and taking official acts” in the Legislature.
When reporters asked Ben Stevens what he did for the money, he snapped “I don’t have to say that. ” FBI wiretaps caught Allen bragging to oil execs about having “Pete Kott and Ben doing it” to stop tax bills.
Fake Invoices Covered Up the Money Trail
Allen paid Pete Kott’s Hardwood Flooring company $7,993 for work that never happened.
Both Allen and Rick Smith later told investigators the payment was really meant to get money to Kott’s son for campaign work. This trick let VECO send cash to lawmakers while creating paperwork that looked real.
The FBI found many similar setups during their investigation, showing how bribes got disguised as business deals.
VECO Boss Flipped After Breakfast Ambush
FBI agents confronted Allen on August 30, 2006, while he ate breakfast with Senator Fred Dyson. Allen didn’t know Dyson helped the investigation.
Allen quickly agreed to help to protect his three grown children from charges and save VECO.
From FBI offices in downtown Anchorage, Allen made recorded phone calls to lawmakers who had no idea they were being watched. His help marked the turning point that brought down many state officials.
Raids Targeted the Corrupt Bastards Club Gear
The FBI served about 20 search warrants across Alaska on August 31 and September 1, 2006.
Agents searched lawmaker offices and VECO buildings, looking for clothing with “Corrupt Bastards Club,” “CBC,” or VECO logos.
Six sitting state lawmakers had their offices searched, including Senate President Ben Stevens and Representative Pete Kott.
The raids brought dozens of FBI agents from the Lower 48, making the huge corruption case public for the first time.
Alaska’s Largest Political Scandal Brought Down 10% of the Legislature
Six state legislators went to prison, representing one-tenth of Alaska’s entire Legislature.
The FBI documented over $400,000 in cash and gifts flowing from VECO to various officials in exchange for favorable votes. Even U.S. Senator Ted Stevens was convicted, though his conviction was later overturned due to prosecutorial misconduct.
The case became Alaska’s largest political corruption scandal and completely changed how business works in the state capitol, bringing unprecedented scrutiny to the relationship between lawmakers and the powerful oil industry.
Visiting Alaska State Capitol Building, Alaska
The Alaska State Capitol Building at 120 4th Street offers free guided tours Monday-Friday at 1:30 PM and 3:00 PM from June through September.
Volunteers from Juneau-Douglas City Museum host these tours – just sign up in the lobby that day. You can also take self-guided tours weekdays from 7:00 AM-5:00 PM.
The 1931 building features original Federal architecture, an Elizabeth Peratrovich bust, and Alaska Native artwork. No security screening required.
This article was created with AI assistance and human editing.
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