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Tales of oil industry's influence in Alaska

As federal investigation continues, and political figures are charged, a new oil-tax bill seeks to undo the industry's influence.

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In grainy, secretly recorded hotel-room videotapes, executives with Alaska's biggest oil-services company plot ways to craft an industry-friendly version of a pending oil-tax rewrite, brag about how they "own" key politicians and hand out wads of cash to lawmakers, who swear their fealty.

"Never forget who takes you to the dance," says former House Speaker Pete Kott, pointing to VECO Corp. Chairman and heavyweight Republican patron Bill Allen, in one of the tapes. "I had to cheat, steal, beg, borrow, and lie."

"Well, that will stay in this room," one lobbyist responds. Bursts of laughter ensue.

"I sold my soul to the devil, though," Representative Kott jokes later, to which Mr. Allen tells him: "Now I own [you]."

That 2006 conversation and others like it recorded by the Federal Bureau of Investigation have extended far beyond Juneau's elegant Baranof Hotel and its now infamous Suite 604, rented annually by the VECO oil officials. The tapes have been played repeatedly in federal court, on local news, and the Internet. The still-unfolding scandal, brought to light by a federal investigation years in the making, has forced Alaskans to ask serious questions about who is running their state.

The investigation covers vast political territory, including federal fisheries policies, budget earmarks, federal grants, and even ambitions for private prisons in Alaska – but most of what has been revealed so far involves the staggering amount of leverage the oil industry exerts over fundamental oil policy, including last year's oil tax.

Alaska has endured other scandals, says Jerry McBeath, a political science professor at the University of Alaska Fairbanks. But "in terms of the impact on the integrity of the state's institutions, this has been the worst."


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