Staffers for Alaska Sens. Ted Stevens and Lisa Murkowski summoned officials from the Transportation Security Administration (TSA) to a meeting in Murkowski's Senate office last month to discuss awarding a multi-million-dollar, sole-source contract to Chenega Corporation, an Alaska Native firm that is represented by Stevens' brother-in-law.

The contract is to provide logistics support for more than 13,000 baggage and checkpoint scanners at 450 of the nation's airports. The contract's value has been classified by the TSA, an agency with the Department of Homeland Security.

The TSA had been preparing to bid the contract competitively next month, government officials say, but approximately two weeks after the October 19th meeting in Murkowski's office, officials in the Department of Homeland Security put that process on hold. A Homeland Security official, speaking on condition of anonymity, said the department had instructed TSA contract officials to consider "other alternatives" to an open bidding process.

Department officials told U.S. News that the only alternative now being considered is to award the contract to a Chenega subsidiary, Chenega Technology Services Corp. Stevens's brother-in-law, William Bittner, a partner in the lobbying and law firm of Birch, Horton, Bittner and Cherot, has acted as a financial advisor to Stevens. He also represents a number of Alaska Native Corporations, including Chenega. Chenega said that it did not use him in this case and he was not present in that meeting.

Bittner could not be reached for comment.

Stevens, in an interview, acknowledged talking to Bittner about some of the lobbyist's Alaskan clients. But he said he had no knowledge of the meeting in Murkowski's office until a week ago and added that he believes it was set up by her staff. "I want you to know that I never had any involvement at all," says the senator. "One member of my staff attended the meeting without my knowledge. . .I'm happy to take an oath."

Stevens office refused to name the staff member present at the meeting. The senator said his staff has been instructed not to advocate for specific constituents in gaining sole-source contracts, but said he did not believe the staff member involved did anything improper by attending the meeting set up on behalf of Chenega.

Chuck Kleeschulte, a spokesman for Murkowski, says the meeting was of the sort his office conducts all the time on behalf of constituents who are having trouble setting up meetings with agencies. Asked to name another constituent who had been helped in this manner, Kleeschulte said he could not recall a name. He then said he could not provide any names because of privacy concerns but called back with the names of several Alaska Native firms who had gotten the senator's office to facilitate "informational meetings" with agencies to discuss each firm's interest in specific contracts.

Jeff Hueners, the CEO of Chenega, said that his company first sought help after "getting the impression that [TSA] was going to go down their own procurement path." Hueners added that it is sometimes difficult to "get the attention" of contracting officials without bringing them to "such a forum."

"We thought they should look at Chenega Technology's option to sole-source it [because] we had just stood up an operation that was analogous in scope for Customs and Border Protection, a sister department," Hueners said. "We thought there were clearly some synergism both in terms of cost savings and operations efficiencies."

TSA officials declined to provide details of the meeting in Sen. Murkowski's office. Amy von Walter, a TSA spokeswoman, said: "The senators wanted to ensure Chenega's proposal would be evaluated during the procurement process. We advised that we will follow applicable procurement procedures." She then referred all other questions to Sen. Stevens office, which she said made the original request for TSA contracting and legislative affairs officials to attend the meeting.

The TSA contract sought by Chenega wouldn't be the first awarded to the firm on a sole-source basis by Washington. The Customs and Border Protection contract cited by Hueners is valued at $500 million. Several other firms that had planned to compete were unhappy about the sole-source award to Chenega.

Stevens, who wields enormous power as the chairman of the Senate Appropriations Committee, has been the subject of criticism for his advocacy of these Alaska Native Corporations because he and his family have business relationships with some of them.

The Los Angeles Times reported in December that one large Alaska Native Corporation, Arctic Slope Regional Corporation, pays $6 million a year for a 20-year lease at an office tower in Anchorage that is owned by Stevens and several other partners. Stevens was instrumental in Chenega Corporation and Arctic Slope Regional Corporation receiving a $2 billion sole-source contract from the National Imagery and Mapping Agency in 2001. The companies used $2 million stuck into the omnibus spending bill to prepare their proposal. According to published reports quoting agency officials, the money had been inserted after agency officials discussed with Stevens their interest in contracting with an Alaska Native firm. More recently, Stevens was criticized for inserting $2.5 million into the Defense Department spending bill, with the money earmarked to pay the family of Jacob Adams, the President of Arctic Slope, $15,000 an acre for one 160-acre tract contaminated by the Army. Asked by U.S. News of the status of this payment, Sen. Stevens spokeswoman, Courtney Schikora, said that another appraisal had been sought and that the wording of the bill had been changed.

Stevens's son, Ben Stevens, is a state senator in Alaska. But he also runs a consulting firm that is employed by Alaska Native firms, such as Cook Inlet Region Inc., which paid him $145,854 in 2002, according to financial disclosure filings with the Alaska Public Offices Commission.

Often called "Stevens Act" Corporations, the viability an increasing financial muscle of the Alaska Native Corporations is a direct result of Stevens legislation that has given them preferences in gaining federal contracts. These preferences–which have been broadened to include Native American and Native Hawaiian firms–go well beyond what is given to other minority-owned companies and allows them to gain government contracts of unlimited size without having to competitively bid them.

Asked if his relationship to both Alaska Native Corporations and to those representing them before the Appropriations Committee might be of concern, Sen. Stevens said absolutely not. "There is hardly anyone in Alaska that does not intersect with me because I am a senior senator in Alaska," he says. "One is my brother-in-law, one is my son. What are they supposed to do, drop anything I have business with? I have talked to people that Bill Bittner has brought to my office on various matters. There is nothing illegal about that."
–With Edward T. Pound