Alaska political corruption probe

The Alaska political corruption probe refers to a 2003 to 2010 widespread investigation by the Public Integrity Section of the U.S. Department of Justice, the Federal Bureau of Investigation, and the Internal Revenue Service into political corruption of nine then-current or former Alaskan state lawmakers, as well as Republican US Representative Don Young and then-US Senator, Republican Ted Stevens. Sometimes referred to as "The Corrupt Bastards Club" or the "Operation Polar Pen", the investigation focused on the oil industry, fisheries and for-profit prison industries.

By the spring of 2006, the FBI set up in a Baranof hotel suite just three blocks away from the capitol building in Juneau. From their position in the hotel suite, they gathered evidence, such as a videotape of VECO's CEO Bill Allen arranging paper money for legislators, and made other observations. By August 2008, the investigation resulted in indictments against six sitting or former Alaska Republican state legislators on corruption charges. In August 2008 US Senator Ted Stevens was indicted and, by October, he was convicted in Washington, D.C., on seven felony counts of failure to disclose gifts. The convictions, eight days before the November 2008 election, resulted in his narrow loss, after 40 years in the U.S. Senate, to Democrat Mark Begich. This makes him the most senior U.S. senator to lose a bid for re-election, defeating Warren Magnuson's record in 1980. His convictions were later set aside because of prosecutorial misconduct and the United States Department of Justice ended further prosecution.

In addition to the conviction of US Senator Stevens, two executives of the VECO Corporation, an oilfield services contractor, pleaded guilty to charges of bribery and conspiracy to impede the Internal Revenue Service. Alaska businessmen/lobbyists Bill Weimar (former for-profit halfway house owner) and Bill Bobrick, as well as Jim Clark, the former governor's chief of staff, also were indicted and convicted. Clark's guilty plea and sentence were later vacated before he was ordered to report to custody. That was followed by ex-Alaska State Rep. Bruce Weyhrauch's Supreme Court challenge to the honest services fraud statute. His case was decided on June 24, 2010, in association with the Skilling v. United States and Conrad Black case decisions. While the Court overturned the Skilling conviction, stating that the honest services fraud statute was not applicable to private citizens, the Court upheld, but narrowed the application of the honest services fraud statute by stating that it was applicable to public officials only, and remanding Weyhrauch's conviction to the 9th Circuit Court of Appeals.

Federal prosecutors later agreed not to retry Weyhrauch on felony charges in exchange for Weyhrauch's agreement to plead guilty to a single misdemeanor in an Alaska State Court. An Alaska state court judge then gave Weyhrauch a three-month suspended jail sentence and a $1,000 fine.