Girdwood, Alaska - It is, according to federal prosecutors, the scene of the crime. But as potential illegal payout, it appears a paltry trade for what could be the ruin of Alaska Sen. Ted Stevens's long legacy of public service.

The modest chalet-style house on a dirt road south of Anchorage has peeling brown paint, a front lawn in need of mowing, and a pair of handmade campaign signs. The house, the official Alaska residence of Senator Stevens, was expanded and remodeled through unreported gifts from VECO Corp., a company that was once a giant in both the Alaska oil fields and the halls of political power, according to a federal indictment issued in Washington Tuesday.

The charges against Stevens are part of a federal probe of political corruption in Alaska that so far has sent three former state lawmakers to prison. The investigation is forcing Alaskans, who receive more federal funds in earmarks per person than residents of any other state, to take a harder look at their heavy reliance on US tax dollars and to ask whether the mutual back-scratching that has long characterized business and politics here needs to be reconsidered.

With Stevens's indictment, some see an end of that era. Others predict it may also end the career of an Alaskan icon who has dominated the political scene since territorial days.

"The phrase that comes to mind is 'sic transit gloria.' It is the end of an era," says Jerry McBeath, a University of Alaska Fairbanks political scientist.

The indictment, the first issued against a sitting senator since 1993, charges Stevens with seven felony counts involving a failure to report gifts, worth more than $250,000, bestowed from 1999 to 2006 by VECO and its chief executive – mostly in the form of materials and labor used to double the size of his Girdwood home. While Stevens is not charged specifically with taking bribes, the indictment alleges that he helped steer lucrative federal contracts to VECO and took other actions that benefited the company.

Though the most powerful figure entangled so far, the senator is not likely to be the last. His son, former state Senate President Ben Stevens, has been fingered in court testimony by VECO executives as the recipient of $243,000 in VECO bribes that they said were disguised as payments for "consulting" work.

The elder Stevens, the longest-serving Senate Republican in history, proclaimed his innocence in a terse statement Tuesday. "I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. Senator," said the statement, released by his Senate office.

He also said that in line with Senate GOP rules, he would temporarily give up leadership positions. Stevens is a senior Republican on the Commerce Committee and Appropriations Committee.

His campaign issued a statement as well, insisting that his bid for a seventh term, in which he was already lagging in the polls against popular Anchorage Mayor Mark Begich, "is continuing to move full steam ahead."

After being appointed to office in 1968 and coasting to victory in every Senate election since, an indicted Stevens is now the decided underdog against Mayor Begich, a Democrat, and may not even survive the Aug. 26 GOP primary, says Ivan Moore, a pollster and political consultant who generally works for Democrats.

"Is Ted Stevens going to win in November? No. Is Ted Stevens going to win the Republican primary? He could, but I think it's unlikely," says Mr. Moore.

In fact, within minutes of the indictment, the Congressional Quarterly changed its rating of this race from Leans Republican to Leans Democratic.

"Even before the indictment, this race was already very competitive," says Jennifer Duffy, who tracks Senate races for the Cook Political Report in Washington. "What some people don't appreciate is that Senator Stevens has a primary race, and now it might be tougher to see him come out of it."

For Alaska, it would be a seismic shift.

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