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DOJ Denies Alaska’s Bid for Sex-Crime Probe

ANCHORAGE, Alaska (CN) - U.S. Attorney General Loretta Lynch said she won't allow Alaska prosecutors to investigate allegations of sex crimes involving the former chief of an oil field services company.

"I have concluded that it would undermine the administration of justice to grant the request, because this case does not meet the standards of the principles of federal prosecution," Lynch wrote in a letter sent Tuesday to Alaska Attorney General Craig Richards.

Bill Allen, now 80, was the head of oil field services company Veco before becoming the federal government's star witness in several highly publicized corruption cases where he admitted to offering cash and other bribes to lawmakers involved in a potential rewrite of Alaska's oil-tax laws.

One of the highest profile cases involved now-deceased U.S. Sen. Ted Stevens, who was found guilty of ethics violations in 2008 - many involving favors from his friend Allen. But claims surfaced during the trial of Stevens and others that Allen had a long history of paying for sex with minors, leading many in Alaska to speculate that Allen was offered immunity for sex crimes in exchange for his cooperation to prosecute Stevens.

Lynch's letter came in response to a Feb. 5 letter from Richards with the backing of the state's congressional delegation including Sen. Dan Sullivan, who was Alaska's attorney general at the time of the Stevens trial. Sullivan had tried to investigate victims' claims, one of whom claims Allen flew from Seattle to Alaska for ongoing paid trysts while she was temporarily living out of state.

"If the government made a deal with Bill Allen, it would constitute a scandal of the highest order and those who decided that prosecuting Sen. Stevens was a higher priority than seeking justice for abused children should be exposed," Sullivan said during a press conference in February.

Frustration prompted Sullivan to spearhead passage of a 2015 amendment to the Mann Act, which makes it a felony to bring someone across state lines for prostitution and imposes enhanced penalties when the victim is a minor. Sullivan's amendment forced the Justice Department to give a "detailed reason" for rejecting Alaska's cross-designation request.

Lynch noted that Alaska's prior requests to open its own investigation into Allen - in 2010 and 2012 - occurred before passage of the Mann Act amendment allowing states to be cross-designated, and before Lynch took over as attorney general.

However, Lynch wrote that those decisions were "not based on any non-prosecution promise, or agreement between the government and Mr. Allen."

She pointed to the thoroughness of the investigation and that "it should go without saying that the Criminal Division would not direct the Child Exploitation and Obscenity Section to expend considerable resources during an almost two-year investigation had the department been bound by any agreement not to prosecute [Allen] if we believed charges were appropriate."

Sullivan issued a statement in response to Lynch's letter, saying, "I find it incredibly frustrating that it took the threat of violating a new federal law for the Department of Justice to finally and directly answer a question that Alaskans have been asking for years.

"There was ample evidence in this case to allow the state to investigate and prosecute Bill Allen. But the Attorney General of the United States is saying that doing so would undermine the administration of justice - claiming that because the DOJ previously decided not to cross-designate the state, the DOJ was required to deny the state again. Such circular reasoning obscures what this case was about in the first place."

Richards expressed his disappointment in a phone interview with Alaska Dispatch News.

"What is the potential downside of letting the state of Alaska apply its resources to see if it can put a case together?" he asked. "We felt strongly that if we were able to pursue it, we had a good chance of making the case. So it's a disappointment we were denied that chance."

Lynch's letter ends Alaska's third bid to prosecute Allen.

"The proper administration of justice requires consistent application of principles regarding the circumstances in which federal prosecution is initiated," Lynch wrote.

She went on to note her department's commitment to working with state partners and steps it has taken to "demonstrate its commitment to fighting child exploitation in [Alaska]." Lynch explained that she provides this information "not only because it is important, but also because it provides critical context about my decision not to grant your request."

Richards said the effort isn't necessarily dead.

"There would be nothing that would keep another attorney general to ask another U.S.

attorney general in the future," he told the newspaper. "I wouldn't be surprised if a few years down the road, another attorney general gives this a try."

For his part, Bill Allen issued a statement through his attorneys denying any wrongdoing.

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