Alaska Gov. Sheffield’s Impeachment Inquiry Has Overtones of Watergate Scandal

Times Staff Writer

Not since Gov. Henry S. Johnston of Oklahoma lost his office in 1929 has a U.S. governor been removed by impeachment. That was 30 years before Alaska became a state, but this week, the Alaska State Senate convened to set into motion an impeachment inquiry that could cost Democratic Gov. Bill Sheffield his job.

Grappling for the first time with a bewildering array of questions that could lead to the governor’s removal, Alaska legislators are aware that they will set the standard for future governmental conduct in this rough-and-tumble state of frontier spirit and vast public wealth.

“We may find this is a tempest in a teapot, or we may find there is an impeachable offense,” said Sen. Joe Josephson, an Anchorage Democrat. “This is a very dramatic situation because it’s unpredictable.”


Legislators Apprehensive

“There’s apprehension (among legislators), and a strong desire to be on firm grounds so the precedents don’t come back to haunt us,” said Sen. Bettye Fahrenkamp, a Fairbanks Democrat. “. . . What happens here will be lived with by other governors for a long time.”

Alaska’s impeachment inquiry stems from what might be considered routine patronage politics in some places: the steering of a $9.1-million lease for state offices to a Fairbanks building in which one of Sheffield’s supporters and fund-raisers held an interest.

But a grand jury investigation into the lease has raised more fundamental questions.

“Did the governor lie?” asked State Rep. H. A. (Red) Boucher, an Anchorage Democrat, former lieutenant governor and primary election opponent of Sheffield. “That’s the same key question in Watergate with (President Richard M.) Nixon. Did he lie or didn’t he lie?”

Watergate Parallels

But that question is not the only Watergate overtone in the case:

--Samuel Dash, the chief counsel to the U.S. Senate’s Watergate select committee, has been hired by the Alaska Senate.

--Philip A. Lacovara, an assistant Watergate prosecutor, has been hired to defend Sheffield.

--George T. Frampton, a former member of the Watergate prosecution force, served as a consultant to the grand jury investigation.


The office lease matter took a serious turn on July 1, when the special grand jury investigating it, citing page after page of Sheffield’s failed memory in his testimony, declared that the governor is “unfit to fulfill the inherent duties of public office.”

‘Lack of Candor’

The jurors added that “Sheffield’s testimony reflects a lack of candor and a disrespect for the laws of this state.”

They recommended that a special session of the Legislature consider Sheffield’s impeachment. Last Monday, the Senate convened for a 74-minute session to begin its inquiry on whether to send an impeachment resolution to the Alaska House of Representatives for a full trial.

The Republican-controlled Senate referred the grand jury’s report and recommendation to its Rules Committee, which is to begin full hearings on the matter Monday. Some here say the committee is almost certain to send an impeachment resolution to the full, 20-member Senate.

“Then comes the $64 question,” Boucher said. “I think it’s going to be a squeaker. One or two votes will decide it.”

House Would Try Matter

Fourteen votes are required to send an impeachment resolution to the Democratic-controlled House.


For Boucher and some others, the overriding issue is not the lease manipulation itself, but the grand jury testimony by Sheffield, a 57-year-old first-term governor whose successful hotel chain made him a millionaire.

According to the grand jury’s 69-page report, Sheffield was a key player in the lease deal. It began as an effort to relocate a number of state offices in Fairbanks into one state office building. But before a bid proposal was made public, Joseph (Lenny) Arsenault, the business manager of the Fairbanks local of the Plumbers and Steamfitters International Union, asked Sheffield for and received a copy of the proposal.

Arsenault had raised $92,000 in 1983 to help pay off debts from Sheffield’s 1982 election campaign. The bulk of the campaign debt was to Sheffield himself, and that year the campaign committee repaid Sheffield, according to the grand jury, “several hundred thousand dollars to retire some of this debt.”

Fund-Raising Event

Then, on Sept. 15, 1984, the governor attended a fund-raising event at Arsenault’s home in Fairbanks that raised $13,000 for Democratic candidates.

Seventeen days later, Arsenault was in the governor’s office with Sheffield and his chief of staff, John Shively. They narrowed the bid requirements to eliminate all bidders except the Fifth Avenue Center, in which Arsenault had a 2% interest.

Much of the grand jury’s findings came from Shively’s testimony. Shively, who resigned July 10, first refused to testify before the grand jury. But under immunity from prosecution, he described his own and the governor’s activities.


Could Not Remember

Sheffield told the grand jury that he could not remember any meeting with Arsenault or any requests to narrow the bid specifications or any action by Shively to change the proposal itself.

“It’s highly probable that he was there,” Sheffield said of the Oct. 2 meeting with Arsenault in one of many passages cited by the grand jury, “but--and I know you’re interested in that date, and I went back to look at the calendar and there was nothing on the calendar.

“But that doesn’t mean that (Arsenault) wasn’t in the Capitol building.”

“Indeed,” the grand jury said, “Gov. Sheffield testified that he could think of no reason why the . . . bid documents might have been changed after Oct. 2, 1984, in spite of sworn testimony by Shively and Arsenault that Arsenault asked the governor to do so. . . .”

Governor Accused

The grand jury pointedly noted that “the evidence indicates (Shively) was acting on behalf of and pursuant to the desires of the governor and the governor’s supporters--and with the governor’s knowledge and encouragement.”

Even if Sheffield dodges impeachment, his troubles may not be over. The state provides for recall of office holders, and a gubernatorial election looms next year.

“The public is going to make the ultimate decision,” said Sen. Tim Kelly, an Anchorage-Eagle River Republican who is chairman of the Senate Rules Committee. “Through the Legislature, through recall or through the 1986 election, the public is going to make the ultimate decision.”