Alaska Attorney General Craig Richards. (Photo by Josh Edge/APRN)U.S. Attorney General Loretta Lynch has declined to let the state act as federal prosecutors to pursue former VECO owner Bill Allen.Lynch, in a letter to her state counterpart, says the Department of Justice spent two years investigating Allen for alleged child exploitation before it decided it couldn’t bring charges, due to the weakness of admissible evidence.Because the feds decided the case did not meet their standards for prosecution, Lynch said it would be inappropriate to let the state prosecute the same case on its behalf.“This is the end of bringing a case against Mr. Allen for violating the Mann Act by the state of Alaska,” said State Attorney General Craig Richards. He says it’s possible a future U.S. attorney general might see things differently, but he says the chances diminish over time.“And I also just think that the practical reality is that internally within the bureaucracy of Justice, they’ve made the decision not to pursue the case,” Richards said. “So I think it’s probably a long shot that a new attorney general would take a different point of view.”Allen was once a powerful figure in Alaska business and politics, and he was the key witness in the public corruption case against U.S. Sen. Ted Stevens. Defenders of the late senator have alleged Allen lied on the stand in Stevens’s trial to avoid going to prison for child exploitation.U.S. Sen. Dan Sullivan was disappointed with Lynch’s decision, but he says it clears up one thing: “The lingering doubt that so many of Alaskans have had on whether or not there was any kind of Justice Department or FBI agreement to not prosecute Bill Allen in exchange for his testimony against Ted Stevens.”Lynch says there was no immunity agreement. Allen served time for bribing lawmakers and corruption-related crimes.Sullivan tried to bring an exploitation case against Allen in 2010, when he was state attorney general. Sullivan calls the evidence “ample” and he says it’s important to continue to try to prosecute Allen for his behavior with teens to show Alaskans that Allen doesn’t get off the hook because of who was.“This is somebody who had a lot of authority, a lot of power,” Sullivan said.State authorities concluded years ago that they lacked evidence to charge Allen with child sexual abuse under state law, which requires proving a victim’s age. They’ve been trying to get the U.S. Department of Justice to “cross-designate” them to act as federal prosecutors so they can charge Allen with sex trafficking under the Mann Act, where age doesn’t matter.Sullivan convinced Congress to change federal law to force the feds to grant such requests from states. The new law, though, says the DOJ can refuse the transfer of power if it would “undermine the administration of justice,” and Lynch cited that language in her denial of Alaska’s request.An attorney representing Allen has denied the former businessman knowingly had sex with an underage girl or transported girls for sexual purposes.