How ferry project, pushed by Sen. Stevens, floated
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The high-speed ferry will connect Anchorage to Port MacKenzie in the Matanuska-Susitna Borough at an estimated cost to taxpayers of $84 million. The project follows the same route as one of the two "bridges to nowhere," which the non-partisan Taxpayers for Common Sense and others spotlighted in 2005 as examples of wasteful projects promoted by members of Congress that benefit few people.
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In an e-mail to USA TODAY, the Office of Naval Research (ONR) said it did not request the funding. The Navy said it rejected Lockheed Martin's proposal for a similar prototype to transport military personnel and equipment, saying the project was not a high priority.
Stevens declined to be interviewed. His spokesman, Aaron Saunders, said the deal benefits taxpayers by providing a use for a Navy prototype that otherwise might be scrapped after a year. Saunders said the ferry will bring jobs and revenue to the borough, which has about 80,000 residents.
"This is a win-win for the military and the Mat-Su valley," Saunders said.
The ferry alone is now expected to cost $58 million, the Navy statement said. That's nearly double the Navy's original $29.9 million agreement with the shipbuilder.
The "biggest cost driver" has been its unique design, the Navy said. The design is complicated by a retractable center hull that is raised to reach high speeds and lowered to offload passengers and vehicles.
A former chairman of the Senate Appropriations Committee and its defense subcommittee, Stevens inserted nearly $50 million into defense and transportation spending bills between 2002 and 2006 for the project and related costs. Stevens added $20 million in this year's pending defense bill, according to the legislation.
One company that could benefit from the ferry is VECO Corp., the oil services firm at the heart of a federal corruption probe that led to an FBI search of Stevens' home July 30. The company, whose former chief executive is a business partner of Stevens, signed a letter of interest six years ago to open a manufacturing facility at the port once the ferry begins operations, which is now expected in 2009. Borough Manager John Duffy says VECO remains interested in building huge oilfield equipment at the port, where it built smaller equipment "modules" in 2005 and 2006.
VECO spokesman Tim Woolston declined to comment. Tom Maloney, the company's vice president of business development, told the Anchorage Daily News, in 2005 that the ferry — which can carry up to 26 cars and 150 people — would allow the company to bring workers to the site more cheaply and safely than driving them from Anchorage.
VECO chief executive Bill Allen and vice president Richard Smith pleaded guilty in May to bribing state lawmakers to limit a state tax on oil production and resigned. Allen testified in a related case this month that one of the lawmakers he bribed was Ted Stevens' son, Ben, a former state senator.
Allen also testified he oversaw renovations to Ted Stevens' Alaska home in 2000 that more than doubled its size, and had VECO employees do some of the work. Stevens said in a July interview with Alaska reporters that he paid all the bills he received for the construction. He has declined further comment on the probe.
Neither Ted nor Ben Stevens has been charged with wrongdoing.
Navy rejected similar ship
The ferry's design came from the world's largest defense contractor, Lockheed Martin, which also has ties to Stevens. Lockheed pitched the design to the Mat-Su Borough in 2002 after the Navy rejected its proposal.
With funds secured by Stevens, the borough paid Lockheed $2 million in 2003 to design the ship.
Lockheed's lobbyists include Stevens' brother-in-law, William Bittner. Lockheed paid Bittner and his law firm $420,000 to lobby on defense spending issues from 2002 through 2006, the firm's disclosure reports say. Bittner said he never lobbied for Lockheed on the ferry.
"Until you called, I had no idea Lockheed was involved in this project," Bittner told USA TODAY in an e-mail.
New ethics laws ban any senator or staffer from being lobbied by the senator's immediate family, which does not include brothers-in-law.
Campaign finance reports show Lockheed's political action committee, executives and lobbyists gave Stevens' political committees $63,650 during 2002 through 2005, when the first legislative-directed funding, known as earmarks, were awarded for the ferry project.
Lockheed spokesman Tom Jurkowsky said, "Lockheed Martin did not initiate any congressional support or lobbying efforts to secure funding for the program."
Contracting rules exempted
Once Stevens' earmarks directed the Navy to build the ferry, the ONR hired Alaska Ship & Drydock under an obscure type of agreement called "other transaction authority." Those agreements are not formal contracts and therefore are exempt from many federal contracting rules, such as those requiring detailed cost justifications.
The shipyard is reimbursed for its costs plus a guaranteed profit, according to the Pentagon announcement of the agreement.
Critics such as the non-partisan Project on Government Oversight (POGO) have said such arrangements are vulnerable to waste.
"Cost and pricing data should be available for auditors to review to ensure the government isn't being ripped off," said Danielle Brian, executive director of POGO.
*snip*Former Senate staffer Winslow Wheeler, who handled defense spending issues for three Republicans and one Democrat and is now with the non-partisan Center for Defense Information, said the ferry is an example of earmarks siphoning money from worthier defense projects.
"He's loaded up defense bills" with projects that have "no direct usefulness for national security," Wheeler said of Stevens
