Prosecutors concealed evidence in Ted Stevens case, report finds

Federal prosecutors and agents concealed key evidence, suffered a collective memory lapse that strains credulity and were hampered by internal politics, poor supervision and a crushing deadline, judicial investigators concluded in a blistering 514-page report examining the bungled high-profile corruption trial of the late senator Ted Stevens (R-Alaska).

The report is a detailed accounting of what went wrong in what once seemed like a promising prosecution of the long-serving senator on corruption charges. It provides new details about what it called the “systematic concealment of significant” evidence from Stevens’s attorneys.

Still, prosecutors are not likely to face criminal charges. That’s because U.S. District Judge Emmet G. Sullivan, who presided over the 2008 trial and appointed a special prosecutor to investigate potential misconduct, never issued a “clear and unambiguous order” telling the Justice Department to turn over such exculpatory material, the report states. Still, prosecutors are required to give defendants information that might help their case or undermine the credibility of government witnesses.

Prosecutors may face potential discipline from the Justice Department, which is conducting an investigation of their conduct. That probe is in its final stages, officials said.

Stevens, who died in a plane crash in 2010, was convicted in 2008 of corruption charges and weeks later lost his bid for reelection. In April 2009, Sullivan tossed the guilty verdict in response to a Justice Department motion seeking dismissal of the case in light of the revelation that its prosecutors had withheld information from the defense.

The judge also appointed Henry F. Schuelke III and William Shields, both well-respected defense lawyers, to conduct an independent investigation of potential prosecutorial misconduct. They interviewed key players and reviewed more than 128,000 pages of records to reach their conclusions.

Besides delving into evidentiary lapses, Schuelke and Shields also painted a picture of sloppy management in the Justice Department’s Public Integrity Section, which led the prosecution under enormous pressure and a tight deadline.

The indictment was unsealed in July 2008, and Stevens shocked the Justice Department by seeking a speedy trial, which began in September. As the trial approached, prosecutors scrambled to fix a critical database that had crashed and left the review of records to FBI and IRS agents who were unfamiliar with the case or the rules about what needed to be turned over to defense lawyers.

Internal politics also came into play. When a new prosecutor was tapped to lead the trial team, another felt as if he had been slapped in the face and pondered quitting. The new lead prosecutor, Brenda Morris, later told the judicial investigators that there was so much tension that the trial was “a horrible, horrible, horrible experience” and that she exercised little supervision because she didn’t want to further wound the feelings of her subordinates. The report found no evidence that Morris and the head of her unit, William Welch III, withheld evidence or engaged in misconduct.

The heart of the report delved into three instances in which prosecutors should have turned over helpful — and required — information to Stevens’s lawyers.

They involved Bill Allen, a close friend of Stevens’s and the former chief executive of Veco, a now-defunct oil services company. Stevens was indicted on seven counts of making false statements on financial disclosure forms to hide about $250,000 in remodeling work on his Alaska home that prosecutors alleged was supplied by Allen. The work transformed a small cabin into two-story house with a garage, a whirlpool and two wraparound decks.

In 2002, Stevens sent Allen a note: “Thanks for the work on the chalet. You owe me a bill . . . Friendship is one thing — compliance with these ethics rules is another.” Stevens added that one of his friends, Bob Persons, was going to talk to him about an invoice. At trial, Stevens testified that he paid every bill he was given and never intended to receive free renovations.

Prosecutors argued that the note was an effort by Stevens to cover himself because he never intended to pay for the renovations. At trial, Allen dramatically testified that Persons told him to ignore the letter. “Ted is just covering his [expletive],” Allen testified that Persons told him.

But the testimony contradicted what Allen had previously told prosecutors and an FBI agent. In an interview a few months earlier, Allen said he did not remember having spoken to Persons about the note and also claimed his company’s work on the chalet was valued at about $80,000, not $250,000 as alleged. Although prosecutors documented Allen’s comments in their notes, they did not pass along the information to defense lawyers. They told Schuelke and Shields that they did not remember ever showing him the letter or his response, a memory lapse that the report called “extraordinary” and “astonishing.”

Attorneys for the prosecutors criticized in the report — Nicholas Marsh, who worked in the public integrity unit and committed suicide in 2010; as well as Joseph Bottini and James Goeke, both assistant U.S. attorneys in Alaska — argued that the findings were flawed.

“Nick Marsh acted at all times in complete good faith, with a keen appreciation for his ethical obligations,” Marsh’s attorney, Bob Luskin, said in a statement.

Ken Wainstein, an attorney for Bottini, said the judicial investigator “drew conclusions when there was no evidence of intentional misconduct.”

Matthew Menchel, an attorney for Goeke, said his client pushed to disclose information. He blamed high-ranking Justice Department officials who rushed the case.

Sari Horwitz covers the Justice Department and criminal justice issues nationwide for The Washington Post, where she has been a reporter for 30 years.

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