Alaska's governor may face impeachment for lease award

Gov. Bill Sheffield (D) is staring down the political fight of his life this week as he and the Alaska Legislature prepare for a showdown over his impeachment. The battle came upon the state suddenly. At a time when most residents, including politicians, would rather enjoy the salmon runs and the long hours of daylight, the Legislature is now confronting a grand jury report that says Governor Sheffield is unfit to hold office.

The state Senate will meet in special session Mondaycq to consider the grand jury's recommendation that Sheffield be impeached. The controversy centers on a $10 million state office lease in Fairbanks that was awarded, without a contract bid, by the governor's office.

The grand jury said Sheffield and others in his office improperly intervened on behalf of a Fairbanks union leader who owned a share of the building that was leased. Sheffield and his chief of staff, John Shively, then shielded their actions from investigators, the grand jury said.

While the jury said Sheffield may have committed perjury and demonstrated ``a lack of candor and a disrespect for the laws of this state,'' no indictments were issued.

Sheffield and Mr. Shively say they are shocked by the report and have denied they committed any crimes. Sheffield says he has acted in the public interest and has refused to accept Shively's resignation. His chief of staff has admitted lying to investigators and to throwing official documents in his wastebasket after a reporter asked to see them.

The grand jury report rocked the state when it was issued July 2. The 15-member panel, meeting in the capital city of Juneau, had been holding its secret proceedings since April.

The subject of the probe was no secret, however. Several months ago, the Fairbanks News-Miner reported it was denied access to state files on the lease because a criminal investigation was under way. On April 24, after some of those files mysteriously appeared at the office of the newspaper's lawyer, Sheffield hurriedly called a press conference to announce Shively would be taking a paid leave while the matter was investigated by a grand jury.

Over the next two months, there was no indication that the focus of the investigation had shifted from Shively to Sheffield. Only a momentary stir erupted when Shively returned to work at the end of May and when state Attorney General Norman Gorsuth, a Sheffield appointee and political confidant, announced a week later his intentions to quit when the grand jury's work was done.

Then on June 30, the Anchorage Daily News printed an article based on the carbon imprints of a court clerk's notes, found in a trash bin. The notes suggested that prosecutors thought they had the evidence to indict Sheffield but felt a conviction would be hard to obtain.

Then came the official report, itself an unusual outcome for a grand jury.

While Sheffield first expressed hurt and then a determination to fight it out, some legislators say they resent having the case dumped in their laps.

``The grand jury's request cannot be ignored, but we do feel put upon,'' says Sen. Jalmar Kerttula, a Democrat who was Senate president until January, when a Republican took over.

While the Legislature's lawyer says the grand jury report, if true, has uncovered misconduct in office, the Alaska constitution does not specify grounds for impeachment.

An impeachment vote requires the assent of 14 of the state's 20 senators. The House then sits in judgment, where 27 of 40 votes would be needed to remove Sheffield from office.

The proceedings are expected to last all summer. If Sheffield is ousted, the only person authorized to take over is Lt. Gov. Stephen McAlpine (D), who is also rumored to be the target of a separate federal probe.

Sheffield, like many other successful Alaska businessmen in the 1950s and '60s, came to the state in the postwar boom years. He eventually became part owner of the Sheffield hotel chain, which operates in Alaska and the Yukon. He ran for governor in 1982, his first bid for elective office, and financed his $1 million campaign largely through his own and borrowed money.

As governor, Sheffield hasn't succeeded in building many constituencies that might now rally to his defense. In fact, much has gone wrong, starting with one of his first acts -- traveling to the East Coast and Texas for campaign contributions from oil companies to retire his campaign debts. The trip, which raised $130,000, followed his announcement that he would no longer oppose a major federal oil lease sale off the coast of Nome.

That trip led to the appointment of the first special prosecutor during Sheffield's term. The prosecutor concluded no laws were broken, though he chastised the governor for poor judgment.

The Fairbanks lease was awarded after Shively narrowed the requirements until only one building could qualify. Lenny Arsenault, business manager of Plumbers and Steamfitters Local 375, owns about 2 percent of the building. The grand jury said he made frequent contact with Shively and the governor over the lease.