Jail is a risk, Stevens warned friend

WASHINGTON — In October 2006, a longtime loyalist of Sen. Ted Stevens called him up with a big problem: The FBI, he said, was breathing down his neck about a makeover of the senator's mountain cabin.

Stevens responded by cautioning the friend, Bill Allen, that they "ought to lay really low right now" and "stick this out together."

Unbeknown to the veteran Alaska lawmaker, Allen had already agreed to work with investigators and secretly tape their phone calls — evidence made public for the first time Monday at Steven's corruption trial.

Stevens, 84, is charged with lying on financial-disclosure forms to conceal more than $250,000 in cabin renovations and other gifts from Allen and his oil-pipeline firm, VECO.

On tape, the senator tells his drinking and fishing buddy he's worried about the appearance of wrongdoing and even warns that they might be under surveillance.

"I think they're probably listening to this conversation right now," he says.

"We might have to pay a fine and spend a little time in jail," he continues. "I hope it doesn't come to that."

But Stevens also repeatedly asserts his innocence.

"I don't think we've done anything wrong," the senator says in one conversation. "I'm not afraid of them at all."

The audiotapes were played for the jury during testimony by Allen, who pleaded guilty to bribing state lawmakers and agreed to testify against Stevens in exchange for immunity for his family and a possible break at sentencing.

There are no bribery charges against Stevens — a point that defense attorney Brendan Sullivan sought to drive home during a cross-examination of the government's star witness that ate up the afternoon and was expected to continue this morning.

"You never sought to bribe Senator Stevens, did you sir?" he asked.

"No," Allen replied.

Stevens says he asked Allen to oversee the project while he was in Washington but insists he sought to pay all the bills and had no idea his friend was absorbing most costs himself.

Stevens, a patriarch of Alaska politics for generations, hopes to clear his name with an acquittal before voters go to the polls next month to vote on whether to return him to a seat he's held for 40 years.