KTUU.com | Alaska's news and information source | Top Murkowski aide enters guilty plea

Top Murkowski aide enters guilty plea

by Jill Burke
Tuesday, March 4, 2008

ANCHORAGE, Alaska -- When a federal judge asked Jim Clark if the allegations against him were true, he replied "with great anguish and remorse I admit that they are."

After the hearing, Clark said he's doing four things to cope with his crime and current situation: admit guilt; take responsibility; apologize; and deal with the consequences.

He was once considered by many as the most powerful non-elected official in the state of Alaska. Clark has fallen from a high point in life, as the powerful go-to man at former Gov. Frank Murkowski's side, to convicted felon.

The former chief of staff pleaded guilty Tuesday to one consolidated count of fraud after finding himself implicated in the ongoing federal corruption investigation involving VECO Corp. executives and an ever-increasing number of state lawmakers and officials.

Clark has cut a deal. He's admitted guilt. And he has promised to cooperate with federal prosecutors by telling them everything he knows.

In return Clark is hoping to have nearly two years shaved off a prison sentence that could potentially be five years long, according to federal statutes.

Clark and U.S. attorneys acknowledged in court that the conspiracy was formed in order to protect common interests.

Those common interests were hatched in a private meeting in February 2006 between Clark, Murkowski and three of the state's major oil producers at the Atwood Building in downtown Anchorage.

When an agreement was reached in February 2006, Clark called the negotiations, "... one of the happiest moments of my life."

On that Saturday night, the administration finalized a deal with the oil industry to get Alaska's natural gas to market.

The meeting also left the governor beaming with pride.

"This is basically what I came back from the United States Senate to accomplish in Alaska," Murkowski said.

But protecting that deal meant pledging a new, lower oil tax rate than Murkowski had originally negotiated for. Prosecutors contend that this combination of deal-making and bargaining at all costs led Clark to commit felony crimes.

Stakeholders from the oil industry knew that in order to protect their interests, they had to keep Murkowski in the state's top office, since he was the only prospective governor in an election year who agreed to the lower tax terms.

A little more than three months after those closed-door negotiations, Murkowski announced his candidacy for re-election to the governorship.

As an oil services contractor to the three oil producers, VECO stood to make a lot of money on the gas line deal. What mattered to the producers, in other words, mattered a great deal to VECO executives Bill Allen and Rick Smith.

Clark admitted in federal court he allowed VECO to pay $68,550 for polls and consulting work on Murkowski's re-election, but intentionally withheld those payments from campaign finance disclosure reports.

He also admitted in court he knew those payments were illegal. He said he concealed them intentionally. He used his powerful position as the administration's chief of staff to push the favored, lower tax rate through the state Legislature.

It was the same 20 percent tax rate that the oil producers had agreed to in February.

Although he can't change the past, Clark says he will work with the FBI to make sure others are held accountable for breaking the public's trust.

"I think it was wrong of me to do and in retrospect I obviously regret getting involved in it at all," Clark said. "Obviously it's in the best interest of the state that whatever vestiges of an earlier culture be removed from the state and that we proceed going forward in a way in which people can have the utmost confidence in the conduct of all public officials."

Clark is continuing to cooperate. He will be sentenced in September. His plea agreement calls for him to serve between three and four years in prison.

Contact Jill Burke at jburke@ktuu.com