Ted Stevens Prosecutors Hid Evidence Before Trial, Report Says

U.S. prosecutors repeatedly hid evidence in the failed public corruption case against the late Alaska Senator Ted Stevens while the Justice Department let the trial team go without supervision, according to findings by a court-appointed special counsel.

A 514-page report on misconduct in the case, which torpedoed the re-election of the longest-serving Republican senator, was filed yesterday in federal court in Washington, almost three years after a judge set aside Stevens’s conviction for omitting $250,000 worth of gifts from his financial disclosure reports.

“The investigation and prosecution of U.S. Senator Ted Stevens were permeated by the systematic concealment of significant exculpatory evidence, which would have independently corroborated Senator Stevens’s defense and his testimony, and seriously damaged the testimony and credibility of the government’s key witness,” special counsel Henry Schuelke III said in the report.

The appointment of Brenda Morris as lead prosecutor a few days before the indictment caused resentment on the government team and Morris responded by failing to supervise the prosecution, Schuelke said. During the case, she bypassed her supervisor, the chief of the public integrity section, in deciding what to provide to the defense, according to the report.

‘Effective Review’

Prosecutors also failed to conduct “a comprehensive and effective review” of government files for information that might have assisted Stevens’s defense as required by law. Still, Schuelke concluded the misconduct didn’t warrant criminal contempt charges because the prosecutors didn’t violate specific court orders.

While Stevens awaited sentencing in April 2009, Attorney General Eric Holder asked U.S. District Judge Emmet Sullivan to dismiss the case, after a department review discovered the evidence had been withheld. The investigation had begun during the administration of President George W. Bush.

Stevens, who served 40 years in the Senate, lost a re- election campaign in 2008. He died in a plane crash in 2010 at age 86.

“From the day new prosecutors came into this case and presented us with the information of government corruption we’ve been learning more all along and we’ve continued to learn more from that report,” Brendan Sullivan of Williams & Connolly LLP, who represented Stevens, said in an interview.

‘Memory Failure’

The report also criticizes the entire prosecution team for having “complete, simultaneous and long-term memory failure” when questioned by Schuelke about a meeting with the government’s key witness, Bill Allen, the owner of an Alaska construction company.

The government didn’t disclose to the defense that Allen changed his story about letters Stevens sent asking to be billed for renovations on his house. Allen told prosecutors for the first time a week before trial that the letters were just a scheme to make it appear Stevens intended to pay for the improvements.

The government then told jurors that Allen’s work on Stevens’s Alaska chalet was a gift the senator should have reported on his financial disclosure forms, without revealing to the defense that Allen never mentioned such a scheme in earlier interviews.

Holder cited discovery of prosecutor notes from one those interviews in the department’s request to dismiss the case.

Schuelke noted other instances where Joseph Bottini and James Goeke, then assistant U.S. attorneys in Alaska, withheld and concealed information from the Stevens defense team.

Witness Interviews

The report says the lead Federal Bureau of Investigation agent in the case, Mary Beth Kepner, failed to write memorandums of witness interviews that didn’t favor the government.

“The premeditated nature of the ethical and professional breeches are jawdropping,” Jacob Frenkel, a former Securities and Exchange Commission lawyer now with Shulman Rogers Gandal Pordy & Ecker PA in Potomac, Maryland, said in an interview.

“The report highlights this perception that prosecutors have abandoned objectivity in their duty under the law in favor of a win-at-all cost mindset,” said Frenkel, who isn’t involved in the case.

Bottini and Goeke remain federal prosecutors.

Kenneth Wainstein, a lawyer for Bottini, said in an e- mailed statement that his client’s “human errors have been miscast as intentional criminal misconduct.”

‘No Such Disclosure’

Goeke’s lawyer, Matthew Menchel of Kobre & Kim LLP, said his client “repeatedly and persistently” pushed to disclose information and was told by superiors that “no such disclosure” would be made.

“The real fault lies with those who were at the time the upper management of the Justice Department,” Menchel said in an interview.

In a March 8 letter to Schuelke, Morris said she relied on information from prosecution team.

Kepner’s lawyer, Michael A. Schwartz of Pepper Hamilton LLP in Philadelphia, didn’t respond to a phone message and e-mail seeking comment on the report.

The Justice Department’s office of professional responsibility investigated the conduct and “will endeavor” to make the findings public when the review is final, Laura Sweeney, a department spokeswoman, said in an e-mailed statement. Holder told a Senate committee March 8 the report is done and includes sanction recommendations.

The case is In re Special Proceedings, 09-00198, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Seth Stern in Washington at sstern14@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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