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Anchorage Daily News

JUNEAU — Jim Clark — considered the most powerful non-elected person in Alaska’s state Capitol when he was former Gov. Frank Murkowski’s chief of staff — quietly told a federal judge Tuesday that he was guilty of fraud.

Appearing contrite after entering his plea in U.S. District Court in Anchorage, he told reporters that Murkowski never knew of the sleight of hand deals to hide campaign contributions from state regulators.

“He trusted me to do things the right way, and I didn’t,” he said.

It’s quite a fall for Clark, a man never afraid to wield his extensive political clout to his advantage, but now ensnared in a wide-ranging federal corruption probe that has also touched federal lawmakers.

Clark’s downfall proved to be his backdoor dealings with VECO Corp. executives to get his boss re-elected in 2006, hiding more than $68,000 in campaign contributions from state regulators to pay for polls and consultants in the failed bid for both men to keep their offices. Campaign laws prohibits such contributions.

About 10 hours before Clark entered his plea Tuesday, he e-mailed The Associated Press a statement, in which he apologized six times.

“It is ethically and morally wrong for a public official to violate Alaska’s laws under any circumstance,” Clark wrote.

“I should have drawn a line between my job and the campaign and simply left fundraising to the campaign fundraisers,” he wrote. “No one is more aware of my inappropriate conduct than I am. For this I sincerely apologize to all Alaskans.”

The letter’s tone comes in stark contrast to the confident, polished man who spent four years walking the halls of the Capitol in Juneau doing much of the heavy lifting for Murkowski, who has been unavailable for comment.

Clark never minced words, said current and former lawmakers. Nor was he afraid to interrupt a House floor session by ringing Speaker John Harris’ podium phone.

Those kind of calls are rare, but not unheard of. They don’t come from Gov. Sarah Palin’s administration, Harris said, but he added Clark’s calls didn’t change the course of any bill.

“One time I got a call about an issue and he asked me how I thought it was going,” Harris said. “I told him and he said, ‘That’s not acceptable. We won’t accept that.’ But, it didn’t affect how things went.”

The news of Clark’s plea jarred memories of the man’s take-charge style that some say found him beholden to the powerful oil industry as well as loyal to his boss and longtime friend Murkowski.

Former Democratic House Minority Leader Ethan Berkowitz, who served while Murkowski was in office, called the news tragic, but says he can’t forget what he called four years of bullying tactics.

“There was an unholy alliance of big oil, the Murkowski administration and the Republican operatives that treated the Legislature and state assets as their own private domain,” said Berkowitz, who is now running for Congress.

“They operated by threat instead of logic,” Berkowitz said. “You do better with people by persuading them, than when you try to bully them, but that’s what he did.”

Berkowitz said Clark once told lawmakers that if they didn’t pass a statewide sales tax, there would have to be cuts in social programs. And the hubris didn’t stop there, Berkowitz said. Even against the Legislature’s wishes, Murkowski bought a jet on the state’s dime so he could travel around Alaska and to the Lower 48 more quickly.

Clark, who also is an attorney, assisted Murkowski in negotiations with North Slope oil producers Exxon Mobil Corp., BP PLC and ConocoPhillips on tax and royalty terms with hopes of getting a gas pipeline built.

VECO Corp. executives Bill Allen and Rick Smith stood to benefit from a gas line project and courted a handful lawmakers to advocate for industry friendly legislation. VECO Corp. was the oil field services company founded by Allen.

Both Allen and Smith pleaded guilty to federal charges last year for bribing Alaska lawmakers in the ongoing federal investigation, which also has touched U.S. Sen. Ted Stevens, the longest serving Republican in the Senate.

Stevens is being investigated for a remodeling project at his home in Girdwood, a ski resort community on Anchorage’s southern edge. Allen has testified that he sent VECO employees to work on the house. Beyond saying he’s paid every bill presented him for the remodeling project, Stevens will not comment on the investigation.

U.S. Rep. Don Young, R-Alaska, also is the subject of a federal investigation that includes his campaign finance practices. Young’s re-election campaign last year spent $854,053 on legal fees, but he won’t disclose for what that money was used. Neither has been charged.