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Jury Convicts Two In North Slope Corruption Trial

May 23, 1989

ANCHORAGE, Alaska (AP) _ A federal jury convicted two men of extortion, racketeering and fraud Monday in a billion-dollar North Slope construction boom in the early ’80s, the longest criminal trial in Alaskan history.

Lewis Dischner and Carl Mathisen were convicted of using their influential positions as advisers to former North Slope Borough Mayor Eugene Brower to take in millions of dollars in kickbacks and steer construction contracts to companies they secretly owned.

Dischner, 71, and Mathisen, 56, listened impassively as U.S. District Judge H. Russel Holland read the lengthy list of verdicts.

Dischner was convicted on 21 counts of racketeering, extortion, and wire and mail fraud, and acquitted on four income-tax charges. Mathisen was convicted on 22 counts.

″We’re obviously pleased,″ said U.S. Attorney Michael Spaan. ″We hope that it will change the way that business is done in Alaska.″

Dischner’s attorney, Douglas Pope, lashed out at Spaan and the team of state and federal prosecutors who handled the case, accusing them of railroading his client.

″There are some ambitious prosecutors who saw an opportunity to take Lew Dischner’s scalp and make a career out of it,″ Pope said.

Pope and Mathisen’s lawyer, Laurence Finegold, said their clients would appeal.

The complicated trial lasted more than seven months, and the 11-member jury deliberated for more than three weeks. One juror was dismissed after being injured in a horseback-riding accident.

Holland rejected defense requests for a mistrial, saying federal court rules allow 11-member juries under special circumstances.

Prosecutors said the two men pocketed $21 million while Brower was mayor from 1981 to 1984. They said $3 million came from their salaries, $9 million from contracts with companies Dischner and Mathisen owned and $9 million from a 10 percent fee assessed all companies doing business with the borough.

Prosecutors said payments to Dischner and Mathisen added $73 million to the cost of the borough’s massive contruction program, an attempt to provide 20th century amenities in the harsh arctic environment.

The government claimed Dischner and Mathisen manipulated Brower, an Eskimo leader they characterized as naive. Brower testified for the government as part of a plea bargain.

He admitted lying to the grand jury to protect Dischner and Mathisen, but said he had a change of heart when he learned the extent of their secret financial interests. Brower was sentenced to 30 days in jail and fined $5,000 for tax evasion.

Defense lawyers attributed the inflated cost of the borough’s capital construction to difficult working conditions, a rush to finish the work and the Brower administration’s desire to create jobs.

They admitted Dischner and Mathisen made money during Brower’s term, but insisted it was legitimate.

Government witnesses told of lavish gifts showered on Brower and other borough officials to cement Dischner and Mathisen’s influence.

Clothes, gambling junkets, boats, guns, sporting goods, expensive home- remodeling projects, cars and a flashy $45,000 diamond ring were among the currency of corruption, prosecutors and government witnesses said.

But defense attorneys said the gifts were misinterpeted because of profound cultural differences. They said Dischner and Mathisen were godfathers to Brower’s children, and that in the Inupiat society, sharing is fundamental.

Spaan said there will be a forfeiture trial to determine what, if any, assets Dischner and Mathisen will have to surrender to the government. No date has been set for that trial.

The two men will be sentenced in August or September, Holland said.

Dischner once was one of the state’s most powerful lobbyists. He was labor commissioner under the late Gov. Bill Egan, and a longtime labor and Democratic Party activist.

Mathisen has North Slope ties dating back to the early 1970s.

Others were snared with Dischner, Mathisen and Brower.

Former Public Works Director Irving Igtanloc pleaded guilty to tax evasion in return for his testimony. Three engineers and architects implicated in the investigation are scheduled to go on trial later this year.

The trial also triggered an ethics investigation into the activities of Democratic state Sen. Al Adams, who was chairman of the House Finance Committee with control over state spending in the borough during the early 1980s.

The murder trial of John Kenneth Peel in state court last year, which lasted six months, was the longest previous criminal trial.

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