Campaign money could hurt Palin’s outsider image

Published 11:01 pm Tuesday, September 2, 2008

WASHINGTON — GOP vice presidential pick Sarah Palin accepted at least $4,500 in campaign contributions in the same fundraising scheme at the center of a public corruption scandal that led to the indictment of Sen. Ted Stevens.

The contributions, made during Palin’s failed 2002 bid to become Alaska’s lieutenant governor, were not illegal for her to accept. But they show how Palin, a self-proclaimed champion for clean government, has been part of an Alaska political system that is now under the cloud of an ongoing FBI investigation.

It’s the latest in a string of revelations that raise questions about whether Sen. John McCain’s presidential campaign had sufficiently investigated the background of Palin, 44, a little-known governor new to the national stage. Palin stunned delegates at the GOP convention Monday when she announced through the McCain campaign that her unmarried 17-year-old daughter, Bristol, is five months pregnant.

The list of potentially embarrassing details grew Tuesday:

n Palin sought pork-barrel projects for her city and state, contrary to her reformist image.

n Her husband once belonged to a fringe political group in Alaska with some members supporting sucession from the United States.

n The head of the firm hired to defend Gov. Palin in a state ethics investigation was previously her family’s lawyer and is permitted to bill the state up to $95,000 for work in the current case. It involves the dismissal of public safety commissioner Walt Monegan after he refused to fire a state trooper who had divorced the governor’s sister.

n She has acknowledged smoking marijuana in the past.

Defending his choice and the team that helped pick her, McCain said Tuesday “the vetting process was completely thorough.” Campaign advisers at the convention in St. Paul, Minn., said Palin filled out a survey with 70 questions including: Have you ever paid for sex? Have you been faithful in your marriage? Have you ever used or purchased drugs? Have you ever downloaded pornography?

McCain’s aides maintained that Palin was a finalist from the start.

But a senior Republican familiar with the search, who requested anonymity when speaking without authorization, said Palin had all but fallen from the radar until late in the summer when McCain — apparently unsatisfied with his working list — asked for more alternatives. Suddenly, she was a finalist.

When she was introduced as McCain’s running mate last week, Palin portrayed herself as a political maverick in McCain’s mold: “I’ve stood up to the old politics as usual, to the special interests, to the lobbyists, the big oil companies and the ‘good old boy’ network,”’ she said.

But Alaska’s first female governor has at times benefited from Alaska’s entrenched political system.

As Palin campaigned unsuccessfully in 2002 to become lieutenant governor, she received contributions from executives at VECO Corp., a powerful Alaska oil field services company. Company founder Bill Allen has admitted the company steers its donations through a “special bonus program” in which executives received money and the company instructed them to donate it to favored politicians.

Allen pleaded guilty to bribery and corruption charges. He admitted the program violated federal tax laws and said it was used to keep his political allies flush with cash.

“If they’re working with the oil industry, I’d like to help with their campaigns,” Allen testified last year in the corruption trial of a former state lawmaker.

Allen is cooperating in an FBI investigation that has already sent several state political figures to prison. He is expected to be the Justice Department’s star witness at Stevens’ trial later this month when he testifies about home renovations and other gifts he provided the longtime senator — gifts Stevens is charged with concealing on Senate documents.

Palin received $500, the maximum amount allowed by law, from Allen and VECO vice president Rick Smith. Several other VECO managers, including Pete Leathard, who came up with the idea for the special bonus program, also donated the maximum. Allen’s son, a VECO employee, also donated $500.

All the checks were donated the same day, except for Leathard’s, which was dated two days after the rest.

John Cramer, one of Palin’s treasurers for her 2002 campaign, said he doesn’t remember any indications that the money came from a special company program.

The donations aren’t evidence of corruption and Palin is not among the lawmakers under investigation in the VECO case. But they undermine arguments that Palin has broken from Alaska’s Republican machine, including Stevens.

“If you can take on Ted Stevens and that crowd in Alaska, you can handle the Russians,” Sen. Lindsey Graham, R-S.C, told “ABC News” this week.

But Palin didn’t reach the governor’s office picking fights with the Senate’s longest-serving Republican. She was a director for a nonprofit group Stevens set up to increase the number of Republican women in government. Stevens also campaigned for Palin in 2006 and appeared in a political advertisement for her.

Palin has had her share of run-ins with Stevens, including a dustup earlier this year in which Stevens accused Palin of not being enthusiastic enough about his efforts to bring federal earmark money to Alaska. She has also called on Stevens’ son, Ben, to resign as national committeeman for the state party.

She was among the first Alaska Republicans to urge Stevens to answer questions about the FBI investigation. But she did not urge him to resign after his indictment, as she did after a state lawmaker was indicted. She said Stevens “has dedicated his life to the betterment of the state.”