Alaska state Senate candidate's firm received more than $1 million from BP
10/04/2012 6:52 AM
10/04/2012 7:48 AM
After initially declining to disclose the clients and the fees they paid to his engineering firm, state Senate candidate Bob Bell on Wednesday released a list showing that oil giant BP was the largest client of Bell and Associates in 2011, paying over $1 million.
And in an interview on the subject, Bell disclosed that when he served on the Anchorage Assembly, he was offered engineering contracts and "a whole bunch of money" for his reelection campaign in 1996 if he would support the effort by oil-field contractor Veco and other companies to build a private prison in South Anchorage. Bell said he rejected the money and didn't support the prison but also said he didn't report the apparent bribe attempt to authorities.
In his filing Wednesday and in the interview, Bell didn't say exactly how much his company was paid by BP. The Alaska Public Offices Commission doesn't require disclosure of precise amounts, only ranges. In the case of income in the millions of dollars, a public official or candidate only has to say it's $1 million or more.
But Bell, a Republican, acknowledged in an interview that the oil industry played a significant role in his firm's $7.7 million in receipts for 2011, and that relationship continues today. For instance, his firm will do survey and other work at Exxon's Point Thomson field when it's developed, he said.
The client list also shows that Bell's firm also did hundreds of thousands of dollars of subcontract work for companies that work on North Slope projects.
The disclosure raises significant conflict of interest questions related to Bell's candidacy. Oil taxes are one of the key issues in the Senate election and will likely be at the top of the agenda when the 28th Legislature convenes in January.
'THEY APPROACHED ME'
Gov. Sean Parnell, House Republicans and supporters of the industry want to cut the state's taxes on oil production to encourage producers to drill more wells in older fields and stem the decline in oil through the trans-Alaska pipeline.
Bell's opponent in November, Democrat Hollis French, was a leading member of the Senate bipartisan coalition that blocked a House bill to cut oil taxes. French and other senators said the bill passed by the House would have cut $2 billion a year in state revenue without requiring the industry to do more in Alaska. The coalition instead offered a deal that would only reduce taxes on "legacy" fields like Prudhoe Bay if producers increased production over baseline amounts. That proposal died in the Legislature.
Bell has received strong support from the oil industry and Alaska companies that do business with it, but he said he wouldn't support a tax cut that didn't also lead to increased oil production. The House bill that died in the Senate "is a good place to start" but wouldn't have gotten his vote as written, he said.
The French-Bell contest is taking place in Senate District J, covering West Anchorage, Turnagain and Sand Lake.
In the interview, Bell rejected any notion that he would be influenced by money paid by clients to F. Robert Bell and Associates, the civil engineering firm he helped found nearly 40 years ago and which he still runs as president and chief executive.
"What it gets down to -- do you have the strength of character to be able to represent people and not be biased by what goes on around you?" Bell said. "I proved that when I was on the Assembly. A good example would be that prison that Veco wanted to put in South Anchorage."
Veco, once Alaska's biggest oil field contractor, teamed up with other companies in the mid-1990s to propose building and operating a private prison. One of the first places they suggested for the prison was South Anchorage.
"They approached me and said we got a whole bunch of money here for your re-election campaign and we'll give you the engineering contracts and everything," said Bell, who was running for his second Assembly term in 1996. "And I said, 'Ain't going to happen. Nobody in South Anchorage wants that prison there and I represent them and it ain't going happen.' "
But Bell also said he didn't go to the FBI. Told that the offer of an engineering contract in return for his support of the prison as an Assemblyman could be a crime, Bell replied:
Years later, the FBI learned of bribes and bribe offers to legislators over a private prison and opened an investigation called "Operation Polar Pen." By 2006, the investigation was looking into the effort by Veco, an oil field contractor, to hold down state oil taxes through bribes of legislators. Six legislators were eventually convicted of federal and state charges stemming from the investigation.
Bell said his business dealings with oil company clients would be an asset, not a liability, as a state senator.
"We're proud of the fact that we do business with the oil industry," he said. "We've been doing business with them for many years. I have negotiated millions of dollars worth of contracts with those guys. I know how to negotiate with them."
Bell's disclosure of his clients and their payments came as a result of a complaint to the Alaska Public Offices Commission by a resident in his district, Edward Cullinane. Bell's initial report failed to list any clients of Bell and Associates and didn't disclose how much money the firm made in 2011 -- only that his salary there was between $200,000 and $500,000, and that he collected a similar range of income from the company as interest, a result of converting the firm to employee ownership through a trust.
"You have a right to know by the law where he is getting his money from," Cullinane said in a brief interview.
In his complaint, filed Aug. 10, Cullinane said the missing information "is essential in allowing voters to make an educated choice about the individual on their ballot. The information must be placed before the voters in his district." Cullinane said he received assistance in filing the complaint from attorney Joe McKinnon, a former Democratic lawmaker.
In responding to the complaint, APOC director Paul Dauphinais said in a report Sept. 6 that the law required Bell to disclose the clients, but recommended that the $1,040 maximum fine be reduced to zero because the law was changed last year. The previous regulation would have required Bell to only disclose clients if he were owner of the firm. The rules were changed in 2011 to also require disclosure if he had effective control of the company.
Bell said he thought the change of ownership of Bell and Associates in 2007, when he sold the company to the employee trust, absolved him of having to list his clients. After Dauphinais' Sept. 6 letter, he refiled his report, listing the clients, but not disclosing how much they paid.
On Sept. 19, Dauphinais revised his report, saying Bell was still in violation for not disclosing the fees.
Bell said he wasn't resisting the commission, but had needed to resolve confidentiality agreements with clients.
"So I made some calls and everybody said, 'We're good,' " Bell said.
Bell said his salary from the engineering firm was $200,000 in 2011 and was not affected by income from any client, including BP.
The recommendation that Bell not be fined will be taken up by the bipartisan commission before the Nov. 6 election, Dauphinais said.
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