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Holder Asks Judge to Drop Case Against Ex-Senator
Justice Dept. Cites Prosecutors' Behavior During Stevens Trial

By Carrie Johnson and Del Quentin Wilber
Washington Post Staff Writers
Thursday, April 2, 2009

During the corruption trial of former Alaska senator Ted Stevens, federal prosecutors were chastised by a judge for letting a witness leave town. They got in trouble for submitting erroneous evidence and were reprimanded for failing to turn over key witness statements. An FBI agent has since complained about the prosecution team's alleged misconduct.

Yesterday, Attorney General Eric H. Holder Jr. announced that he had had enough. The Justice Department asked U.S. District Judge Emmet G. Sullivan to drop the case after learning that prosecutors had failed to turn over notes that contradicted testimony from their key witness.

The discovery by a fresh team of lawyers and their acknowledgment that the material should have been shared with Stevens's defense team led Holder, a former public corruption prosecutor, to conclude that the department's biggest public corruption case in a decade could not be salvaged.

Holder's decision invites tough new scrutiny of a unit that polices corrupt officials, and it could foreshadow a shakeup in the way the government prosecutes those crimes, according to lawyers who work on such cases.

Current and former department lawyers predict an overhaul that will sweep aside senior leaders in the Public Integrity Section, two of whom were cited for contempt of court by the Stevens trial judge. That ruling triggered an internal ethics probe that has produced an awkward situation in which prosecutors and FBI agents who worked side by side on the case are pointing fingers at each other, sources said.

The Public Integrity Section in recent years has lagged in personnel and investigative firepower, veterans of the office say. Its work has produced acquittals and second-guessing from judges, which may intensify after the Stevens debacle.

Stevens issued a statement saying he is "grateful that the new team of responsible prosecutors at the Department of Justice has acknowledged that I did not receive a fair trial and has dismissed all the charges against me."

Holder's decision could also benefit another Alaska politician, Rep. Don Young (R), who is the subject of a corruption probe. Inconsistencies by witnesses in the Stevens case could make prosecutors reluctant to use those same witnesses -- oil services company executives Bill Allen and Rick Smith -- in any case against Young.

And other ongoing investigations of members of Congress -- probes that have already been slowed by problems with collecting evidence and protecting lawmakers' constitutional privileges -- could grow more painstaking with additional oversight by department brass who want to avoid a repeat of the Stevens case.

Defense lawyers who represent public officials already are seeking to exploit the government's problems to help their clients accused of political corruption, three of those lawyers said yesterday.

Stevens, 85, was convicted in October, eight days before Election Day, of seven counts of making false statements on financial disclosure forms to hide about $250,000 in gifts and free renovations to his Alaska house. The Justice Department filing yesterday means that he can no longer be prosecuted on any charges stemming from those allegations.

On Capitol Hill, outrage was palpable among Republicans who believe the case cost them a Senate seat. Senate Minority Leader Mitch McConnell (R-Ky.) told reporters, "No question that, if this decision had been made last year, he'd still be in the Senate."

Former U.S. attorney Joseph diGenova, a Republican, praised Holder for making a tough call and reminding government lawyers that "the power to prosecute is the power to destroy. The significance of this misconduct is monumental."

Holder's decision to drop the Stevens case comes less than two weeks after a federal jury in Puerto Rico resoundingly acquitted the commonwealth's former Democratic governor, Anibal Acevedo Vila, of conspiracy and money laundering charges. Justice Department prosecutors charged Acevedo Vila last year, not long before indicting Stevens, in the midst of a tight reelection campaign that he ultimately lost.

Bradford Berenson, who worked on Vila's defense team, said public corruption cases demand acute judgment and sensitivity. "Too often they are tempted to indict marginal or ambiguous cases, and that's where they get into trouble, trying to present highly technical infractions to a jury," Berenson said.

Guy Singer, a former prosecutor, said Holder's decision "does not necessarily signify a belief in Senator Stevens's innocence, but it indicates serious concerns about the way the case was handled by both prosecutors and agents."

In his statement yesterday, Holder cautioned that an internal ethics review continues and that no determination has been made about the conduct of individual prosecutors. Calls and e-mails to several prosecutors in the case were not returned yesterday.

Sen. Arlen Specter (R-Pa.) last week announced his intention to investigate the way the government conducted the case. Judge Sullivan had been preparing to conduct evidentiary hearings in his own review of allegations of prosecutorial misconduct. After the Justice Department asked for the dismissal yesterday, Sullivan told both sides to appear in his courtroom Tuesday. He is likely to grant the request.

In February, Sullivan held three prosecutors -- William Welch II, Brenda Morris and Patricia Stemler -- in contempt for failing to comply with a court order. Welch is the head of the public corruption unit, and Morris was the lead prosecutor. Six members of the prosecution team eventually withdrew from the case.

Brendan Sullivan, Stevens's lead attorney, told reporters yesterday that "the conduct of the prosecution was stunning to me. They were hell-bent on convicting a United States senator."

Holder assigned a team of top department lawyers to review the case and said yesterday that he made the decision after a thorough review of the evidence.

In a three-page memo that accompanied the announcement, prosecutor Paul M. O'Brien said he discovered evidence that two prosecutors did not turn over notes from an interview in April 2008 with the case's key witness, Bill Allen. Those notes contradicted a critical piece of testimony Allen later gave at trial.

Allen is the former head of Veco, a now-defunct oil services company, and a close friend of Stevens's who allegedly gave him many of the gifts and funded most of the renovations to his house. At the interview in question, according to the notes, Allen said he did not recall talking to a friend of Stevens's about sending the senator a bill for work on his home, O'Brien wrote.

Under oath at trial, however, Allen testified that he was told by the friend to ignore a note Stevens sent seeking a bill for the remodeling work. "Bill, don't worry about getting a bill" for Stevens, Allen said the friend told him. "Ted is just covering his [expletive]."

Staff writer Paul Kane contributed to this report.

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