Top business stories of 2007: from politics to health care, from worker shortages to real estate, it was a year full of news.

Alaskans encountered a wide range of experiences throughout 2007, including bad news in the political and business arena, exploration of the world's largest concentration of copper and gold, a shortage of skilled labor, the cooling of the real estate market, a mixed construction industry and escalating health care costs. This article revisits these top business stories of 2007.

BUSINESS AND POLITICAL 'SCANDALS' PLAGUE THE STATE

In perhaps the biggest story of the year, former Alaska State Rep. Pete Kott (REagle River) was found guilty of taking bribes from former VECO Corp. CEO Bill Allen--who testified that he also paid for some of Sen. Ted Stevens' (R-AK) home remodeling in Girdwood. (Editor's note: CH2M Hill acquired VECO in late 2007.)

Allen reportedly gave Kott cash and promised him a job with his company as compensation for helping to get a petroleum state tax law (PPT) passed that would encourage oil companies to construct a pipeline that would benefit VECO, according to Associated Press news. The former seven-term lawmaker from Eagle River, located just north of Anchorage, accepted almost $9,000--including a $7,993 check that he used to pay his son to work as his campaign manager. The company also paid for a poll at a cost of a $2,750, media report.

Kott, who served as House speaker for part of his 14-year tenure, was convicted on Sept. 25 of conspiracy to solicit financial benefits, extortion and bribery. He was acquitted of wire fraud. His sentencing hearing was set for Dec. 7. Kott could be sentenced up to 20 years in prison on the extortion charge, up to 10 years on the bribery charge and up to five years on the conspiracy charge, Department of Justice spokesman Bryan Sierra told AP.

Gov. Sarah Palin, a Republican, said it was "very shocking" to read the transcripts, hear the testimony, and see the revelation of proof of the rumors that had been circulating. "We are somewhat disheartened to see that evidence, but, at the same time, encouraged that the legal process is working as it should be," she said. "Justice is being served at the end of the day."

Kott is among a handful of Alaska lawmakers being investigated for corruption by the U.S. Department of Justice. Stevens--the U.S. Senate's longestserving Republican--and U.S. Rep. Don Young are being closely examined for their link to VECO Corp., media says. In addition, Sen. Lisa Murkowski (R-AK) is under scrutiny for land she purchased and sold back on the Kenai River.

The investigations will certainly cause Alaska to come under scrutiny from all fronts--from the voters whom the elected officials are serving and from across the nation from those who are making decisions on Alaskan's behalf, Palin said. However, she says: "My perspective is it's welcomed because we have to be given the opportunity to prove that we are putting Alaskans in front of any special interests. I welcome the opportunity to show Alaskans and Americans that our state is committed to doing things right."

Palin added that Alaskans shouldn't be completely dismayed over the investigations. "They should be encouraged to see this new administration and new legislature are determined to work together to build back that trust," she said.

Kott's case was based on wiretaps of three phones belonging to Allen and a former company vice president, Rick Smith. Other evidence included video recordings the FBI secretly obtained in a Juneau hotel room rented by VECO during the 2006 legislative session.

During Kott's two-week trial, Allen said he paid more than $400,000 to a number of elected officials and had VECO workers remodel the Stevens' Girdwood home. Stevens--who had not been charged as of October--has reported to the news media that he paid all the bills he received for the remodeling project.

Both Allen and Smith have pleaded guilty to bribing Kott and other lawmakers. VECO was positioned to reap millions of dollars in contracts if the state Legislature approved a revised crude oil tax (PPT) that encouraged investment. The Legislature passed the tax, which supporters had said was needed to entice major petroleum companies to commit to helping build a pipeline.

Palin has called for a re-examination of the revised crude oil tax approved by the Legislature when Kott and other lawmakers were being investigated. She is working to close loopholes in the state's existing oil tax system. "We can't keep up with the oil companies ... with their claims of credits and their expenses," she said. "We don't have a system to audit their expenses."

In addition, Palin would like the tax system to offer more incentives for new oil exploration and production, which would invite more competition on the North Slope and other parts of the state. The governor has proposed a new oil and gas tax plan, Alaska's Clear and Equitable Share (ACES), that is designed to do just that. ACES, Palin said, provides a better system for placing value on Alaska's resources and for generating additional revenue for the state than the Petroleum Production Tax (PPT). "ACES will fulfill the promises made to the State Legislature in PPT."

Palin also is advocating a fix for business and political ethics in the state. "I've funded an investigator for our public offices commission," she explained. "We've put some teeth into our laws by rolling out an ethics reform package, which was adopted by the Legislature. We're doing as much as we can to really show the commitment to Alaskans that we're doing things honestly and transparently."

PEBBLE MINE PROJECT CONTINUES EXPLORATION

The Pebble Project proceeded to develop throughout 2007, with the announcement of a new partnership agreement and continued drilling in the Pebble East deposit in Bristol Bay.

On July 31, Vancouver-based Northern Dynasty Minerals Ltd. entered into a partnership agreement with Anglo American PLC, the world's second-largest mining company. The two entities formed a 50-50 joint venture partnership known as Pebble Limited Partnership. "We are contributing the Pebble mineral claim," explained Pebble Limited Partnership spokesperson Sean Magee in an Oct. 3 interview. "They will invest $1.425 billion in project development costs."

The new partnership with Anglo-American is a very important milestone in the development of the project, Magee said. "Northern Dynasty had always believed it would partner with a global major," he explained. "Stakeholders in Alaska will see some substantial changes in the way the Partnership will be managed."

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The Partnership ultimately will consist of personnel from both companies, with a new senior leadership team to be based in Anchorage. Significant personnel and program announcements will be made in the coming months. In the meantime, mineral exploration, comprehensive environmental studies and stakeholder engagement activities at the Pebble Project continue unabated, Magee said.

The goal of the partnership is to engineer, permit, construct and operate a modern, long-life mine at the Pebble Project. The partners expect to complete a pre-feasibility study by the end of 2008 and the major permit application in 2009. Magee said: "The permitting process--which will involve 11 state and federal agencies--will last three years or more. The final decision point will be at least five years away or very likely further. Then we would go into a two- to three-year construction phase."

Situated in the Bristol Bay region of Southwest Alaska on state land designated for mineral exploration and development, Pebble is comprised of two adjacent deposits: the near-surface Pebble West deposit and the deeper, richer Pebble East deposit. It is one of the most important concentrations of copper, gold, molybdenum and silver in the world.

According to Northern Dynasty, responsible development of the Pebble Project could generate capital investment of between $3 billion or more, 1,000 high-skill, high-wage operations jobs for 50 to 80 years, hundreds of millions in annual mine operating expenditures and 2,000 jobs during the two- to three-year construction phase. Pebble could also create tens of millions of dollars in annual tax payments to state and local governments, as well as other spin-off benefits and business opportunities for Alaska. "Pebble has a tremendous potential to not only be a generator of new high-paying jobs, but it will also make a very valuable contribution to the state's economy," Magee said.

In an Oct. 4 press release, Northern Dynasty provided an update on drilling activities taking place at Pebble East. The release stated: "To date this year, 72,700 feet of core drilling has been completed in 17 holes. An additional six holes are in for assay. Drilling is ongoing with seven rigs working on new holes and two more rigs expected to be mobilized to the site this year. The drill holes are successfully confirming an accurate region of higher-grade copper-gold-molybdenum mineralization, which trends north-south for a distance of more than 9,000 feet and is open to the southwest and northwest."

A revised resource estimate for the Pebble East deposit isn't expected until early 2008, Magee said.

Northern Dynasty has maintained that its goal is to design a project that can operate safely while protecting important environment values and traditional ways of life, including the fisheries and subsistence resources so important to the Bristol Bay region. However, the project is not without its share of criticism and opposition.

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For example, Lt. Gov. Sean Parnell on Sept. 28 denied certification of a second initiative application (pushed by Anchorage businessman Art Hackney) related to water and mining because it contained an impermissible allocation of lands and water. An earlier initiative submitted April 15 was also denied by the lieutenant governor. "I think it's clear that the government of the state of Alaska feels that natural resource development is an important part of the state's past and future," Magee said. "We're pleased that they're not going forward--not just for our own project--but overall for the state's natural resource economy."

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