U.S. moves to dismiss ex-senator’s conviction

In a surprising reversal, Atty. Gen. Eric H. Holder Jr. on Wednesday moved to void the corruption conviction of former Sen. Ted Stevens of Alaska and ordered an internal review of the prosecutors, saying their case was riddled with impropriety.

The high-profile prosecution of Stevens, who at the time was the Senate’s senior Republican, has been criticized by the presiding federal judge. Holder said he was reserving judgment on whether lawyers in the Justice Department’s public integrity section had committed misconduct.

But, he said, the prosecutors had repeatedly failed to provide important and potentially exculpatory information to the defense team. One incident that came to light in a court filing Wednesday raised questions about the testimony of Bill J. Allen, Stevens’ onetime friend and the government’s key witness.

“In light of this conclusion, and in consideration of the totality of the circumstances of this particular case, I have determined that it is in the interest of justice to dismiss the indictment and not proceed with a new trial,” said Holder, who once served in the public integrity division.

Justice Department officials said they could not elaborate on Holder’s decision, citing U.S. District Judge Emmet G. Sullivan’s decision to schedule a hearing Tuesday, at which he is expected to approve the government’s request.

Holder’s decision will probably put new pressure on a division of the Justice Department that once was known for its professional pursuit of corruption, but which more recently has been accused of partisanship and excessive zeal in its prosecutions.

Stevens, 85, was indicted last year for failing to disclose more than $250,000 in gifts and improvements made to one of his Alaska homes. Throughout the trial, Sullivan voiced anger at the division’s top prosecutors, saying they had cut corners and concealed evidence from defense lawyers.

“How can the court have the confidence that the public integrity section has public integrity?” Sullivan said at one point. “This is not a trial by any means.”

Still, a federal jury convicted Stevens in late October. The Republican lawmaker lost his bid for a seventh Senate term the next week.

In February, Sullivan took the highly unusual step of holding in contempt William M. Welch II, the chief of the public integrity section, and his principal deputy, Brenda K. Morris, the lead prosecutor. Holder then brought in a team of investigators to look into the Stevens case.

In the court filing, Justice Department officials said they had found that one key piece of previously undisclosed evidence had been kept from the defense: portions of an April 15, 2008, interview between authorities and Allen.

In the trial, Allen testified that he had decided not to send a bill for all his work renovating Stevens’ home after meeting with Bob Persons, an intermediary for the veteran lawmaker.

Allen said Persons left him with the unmistakable impression that he was not supposed to charge Stevens, even though the senator had sent him a note requesting a bill. Allen said he was told to ignore the note because it was sent in order to protect the senator.

But Holder’s team of investigators discovered that while “no memorandum of interview or [FBI] agent notes” existed for the interview with Allen, two prosecutors who were there did take notes. And those notes indicated Allen said he “did not recall talking to Bob Persons regarding giving a bill to the defendant,” according to the motion seeking that the verdict be set aside.

“Upon the discovery of the interview notes last week, the government immediately provided a copy to defense counsel,” the Justice Department said. “Defendant Stevens was not informed prior to or during trial of the statements by Bill Allen on April 15, 2008. This information could have been used by the defendant to cross examine Bill Allen and in arguments to the jury.”

Stevens largely disappeared from public view after his conviction. On Wednesday, he said in a statement that Holder’s decision would allow him to get on with his life.

“I always knew that there would be a day when the cloud that surrounded me would be removed,” Stevens said. “That day has finally come. It is unfortunate that an election was affected by proceedings now recognized as unfair.”

Stevens’ chief lawyer, Brendan V. Sullivan Jr., was far more critical, saying that many prosecutors and at least one FBI agent had engaged in a level of misconduct in the case that was so “stunning” that it amounted to government corruption.

Sullivan praised the judge (the two are not related) for forcing prosecutors to turn over evidence to the defense that they had withheld. He also praised Holder and his investigators.

Sullivan said the investigators disclosed even more potentially exculpatory evidence last week, and that “we were sickened by it because it clearly told the story of government corruption, as they were hellbent on convicting a United States senator.”

“Not only did the government fail to provide evidence to the defense that the law requires them to provide, but they created false testimony that they gave us and they actually presented false testimony in the courtroom,” Sullivan said.

Asked at a news conference how Stevens could get his reputation back, Sullivan snapped: “His name is cleared. He is innocent of the charges as if they have never been brought.”

Some current and former Justice Department officials and legal experts disagreed, saying Holder stopped far short of clearing Stevens. They said Holder appeared to have acted on a totality of circumstances, including the discovery of problems and other misconduct, as well as Stevens’ age, fragile health and loss of political office.

But on Capitol Hill, many Republican senators expressed anger at the way their former colleague was treated.

“No question that if this decision had been made last year he’d still be in the Senate,” Senate Minority Leader Mitch McConnell (R-Ky.) said.

For former members of the public integrity section, Holder’s decision was news they did not expect to hear.

“Obviously, a shocking development and a huge disappointment for the office,” said Washington lawyer Peter Zeidenberg. “I don’t know what else to say except that I know the folks who tried the case and I have an extremely high opinion of their ethics and integrity.”

During the Bush administration, the office came under attack for bringing what many lawyers thought were questionable charges against prominent Democrats.

Among them was former Alabama Gov. Don Siegelman. His 2006 conviction did not involve taking bribes or accepting illegal campaign contributions, but rather the appointment of a wealthy donor to a state board. (Siegelman’s conviction was recently affirmed by an appeals court in Atlanta.)

Some of the criticism died down when prosecutors brought charges against Stevens, a prominent Republican.

To Joseph DiGenova, a Republican and former U.S. attorney in Washington, the hero of the day was Holder.

“This is a great moment for the Department of Justice. For the first time in a very long time, we have a real attorney general who can rein in a department out of control. Neither John Ashcroft, Alberto Gonzales or Michael Mukasey would have done this,” he said, referring to the three heads of the department under President George W. Bush.

“This prosecution changed the balance of power in the Senate, and it should never have been brought.”

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josh.meyer@latimes.com

david.savage@latimes.com

Richard Simon, Mark Silva and Rebecca Cole in the Washington bureau contributed to this report.

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(BEGIN TEXT OF INFOBOX)Prosecutorial missteps

During and after the trial of former U.S. Sen. Ted Stevens, U.S. District Judge Emmet G. Sullivan had harsh words for the prosecution and its legal allies and their numerous missteps. After the conviction, Sullivan held four Justice Department lawyers in contempt of court -- including public integrity section chief William Welch -- a rare move that signaled an escalating frustration with the prosecution.

Sept. 29: The prosecution sends back to Alaska a key witness, Robert “Rocky” Williams, a former VECO employee who oversaw renovations to Stevens’ Girdwood, Alaska, home. Sullivan excoriates prosecutors and threatens them with sanctions for not informing him or the defense about their decision not to call Williams to the stand.

“I find it very, very disturbing that this has happened, and am concerned about the appearance of propriety, or impropriety,” Sullivan said. “After all, this is the search for the truth, and people ought not to forget about that.”

Oct. 2: The defense requests a mistrial, saying prosecutors withheld exculpatory evidence when they failed to turn over FBI reports of interviews with former VECO Chief Bill Allen in which Allen reportedly said Stevens would have paid the full cost of the renovations if he had known about it.

An irate Sullivan temporarily suspends the trial and, after dismissing jurors, orders the government to turn over almost all of its files to the defense. Sullivan further lambastes the lead prosecutor, Brenda Morris, and says he does not trust the prosecutors to make full disclosure on their own.

“How does the court have confidence that the public integrity section has public integrity,” Sullivan said. “This is not a trial by any means.”

Oct. 6: In a bizarre scene at the end of the day, Sullivan catches Robert Bundy, lawyer to Allen, apparently signaling his client on the witness stand from the spectator section. After dismissing the jury, the judge threatens Bundy with contempt and expulsion from the courtroom.

“I couldn’t believe what I was seeing,” Sullivan said the next morning. “That’s borderline obstruction of justice.”

Feb. 13: After four Justice Department prosecutors ignored Sullivan’s order to turn over all documents to Stevens’ defense team related to a whistle-blower complaint, the judge holds the lawyers in contempt.

Requested by the defense in December as part of its motion for Stevens’ conviction to be overturned, the documents supposedly contained information about Chad Joy, an FBI agent assigned to the case who complained that the prosecution was not turning over evidence and that his FBI partner, Mary Beth Kepner, had an “inappropriate relationship” with Allen.

Source: Times wire services

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latimes.com/stevens

Circle of influence

Former Alaska Sen. Ted Stevens grew wealthy through contacts with businessmen who received government contracts or other benefits with his help.