Alaska probe aims at powerful US congressmen

ANCHORAGE, Alaska, Aug 1 (Reuters) A federal corruption probe in Alaska threatens to topple two powerful Republican figures in US politics over their oil-industry ties, even as the party seeks to regain seats in Congress next year.

Ted Stevens, the longest-serving Republican in U.S. Senate history, and Don Young, a Republican who has been Alaska's sole House of Representatives member since 1973, are ensnared in a graft investigation involving VECO Corp. the state's largest oil-services company.

For years Stevens, known widely as ''Uncle Ted,'' and Young have used their clout to secure billions of federal dollars for Alaska -- and drawn criticism as champions of wasteful ''pork barrel'' spending. Now they are accused of abusing that power, and Alaska may lose their patronage.

''To be fair, these guys were effective legislators for a long period of time,'' said former Alaska House Minority Leader Ethan Berkowitz, an Anchorage Democrat. ''It's just that that period is over. Even the Ice Age ends.'' Stevens and Young are up for reelection next year, and Berkowitz is among a growing crowd of young politicians mulling a challenge for one of the seats.

That would have been unthinkable a few years ago when Stevens was chairman of the Senate Appropriations Committee in control of federal purse strings and Young headed the House Transportation Committee, with authority over major infrastructure projects.

If the probe puts their once-safe seats in play, that could hurt Republican chances to overcome the Democrats' wafer-thin majority in the Senate or broader advantage in the House.

''It creates two obviously vulnerable seats, one in each chamber,'' Paul Light of New York University's Center for the Study of Congress said. Republican corruption and sex scandals helped Democrats capture Congress in 2006.

The Alaska investigation swirls around Young's and Stevens' relationship with Bill Allen, the former chief executive of VECO. It calls into question millions of dollars of budget items secured by the two lawmakers that benefited VECO.

Allen and a VECO vice president pleaded guilty in May to bribing Alaska legislators. They had maintained close ties with Stevens and oversaw the renovation of the senator's Girdwood, Alaska, home in 2000. Allen also raised money for Young's re-election campaigns.

FBI and IRS agents searched Stevens' house on Monday, taking photographs of the remodeled home. The senator has maintained his innocence while Young has not commented publicly.

''I OWN YOUR ASS'' Allen reveled in his influence, telling one state lawmaker in a conversation recorded by federal agents, ''I own your ass.'' So far, four former state lawmakers have been indicted and one convicted on bribery or other charges in a broad probe into ties between politicians and major Alaskan industries.

Advocacy groups have urged U.S. Senate leaders to strip Stevens of his committee posts, but even Senate Democrats said such a move would be premature.

''I think that we have to understand that we still live in America and someone has to be given the benefit of the doubt,'' Senate Majority Leader Harry Reid of Nevada told reporters this week.

Even before the public learned of Stevens' and Young's ties to VECO, Alaskan politics began shifting in response to the corruption scandal.

Last year, former small-town mayor Sarah Palin emphasized her record as a whistle-blower and corruption foe to soundly defeat incumbent Gov. Frank Murkowski in the Republican Party primary before going on to win the general election.

REUTERS RS KP2112