Judge Refuses to Dismiss Stevens's Indictment o... http://www.washingtonpost.com/wp-dyn/content...

10/2/2008 21:04

Judge Refuses to Dismiss Stevens's Indictment or Declare Mistrial

Prosecutors Wait Until Last Minute to Disclose Potentially Exculpatory Material
By Del Quentin Wilber and Carol D. Leonnig
Washington Post Staff Writers
Thursday, October 2, 2008; 6:28 PM

A federal judge refused this afternoon to declare a mistrial or dismiss corruption charges against Alaska Sen. Ted Stevens (R), ruling that his trial can proceed despite the
prosecution's belated disclosure of information that could aid Stevens' defense.

The ruling came after a surprise revelation late last night that Justice Department lawyers had not disclosed the potentially exculpatory information.

"Although the court is persuaded there is a...violation, the court is not persuaded that dismissal of the indictment or mistrial is the appropriate remedy," said U.S. District Judge
Emmet G. Sullivan. But he added that the government's actions had broken his trust in the prosecutors. and he ordered them to give Stevens' lawyers copies of all witness interviews.

"The court has no confidence in the government's ability" to meet its obligations to ensure a fair trial," he said.

Stevens,84, is charged with failing to disclose on Senate financial documents that an energy company executive who contributed to his campaigns also extensively renovated
Stevens's Alaska home without charging him for the work.

The potentially exculpatory material involves remarks by the executive, Bill Allen, a key prosecution witness, to FBI agents that he believed Stevens would have paid for the
renovations if Allen had ever billed him. Attorneys for the government did not disclose those remarks to the defense until late yesterday.

Sullivan said the information it not entirely new, and the defense can stress it when Stevens' attoreys cross-examine Allen. The once-powerful VECO chief is a longtime friend of
Stevens' and had sought the senator's help with company projects.

Sullivan ruled that government prosecutors had violated a critical requirement that they turn over potentially helpful information to the defense. Prosecutors said they would report
Sullivan's finding to the Justice Department's Office of Professional Responsibility to investigate their team.

Sullivan stressed that he remained "very disturbed" that government lawyers had previously blacked-out the statement from Allen that was favorable to Stevens when turning over
redacted evidence to the defense.

"I want an answer," the judge told lead prosecutor Brenda Morris. "How does the court have any confidence that the public integrity section has any integrity?"

In court this morning, prosecutor Brenda Morris acknowledged that the information should have been provided earlier but also argued that Stevens's lawyers could still cross-
examine Allen on what he had said.

"We admit we made a gross error, Your Honor," Morris said. ". . . But there is no harm to the defendant."

It was the second time this week that Sullivan has criticized prosecutors. On Monday, he said he was "flabbergasted" that the government allowed a potentially important witness to
return to Alaska, even though he had been subpoenaed to testify. Defense attorneys said the witness could have helped their case.

Allen, the former chief executive of an oil services company, is a longtime fishing and drinking buddy of Stevens's. He is the prosecution's star witness in Stevens's trial on charges
of lying on financial disclosure forms to hide more than $250,000 in gifts and renovations to his house in Girdwood, Alaska.

In court yesterday, Allen testified that his employees renovated Stevens's house and oversaw the work of other laborers. Over the years, Stevens's house grew from a one-story
cabin into a two-story house that Stevens called a "chalet," with two wraparound decks, modern electrical systems and a new garage. In later years, employees at Allen's now-defunct
company, Veco, also did repair work, Allen testified.

In court yesterday, Allen said Stevens -- who, at age 84, is running for reelection to a seventh Senate term -- never paid for the work.

Allen also said he never sent Stevens a bill for the renovations, which Veco documents valued at tens of thousands of dollars in labor and material. In 2002, Stevens sent Allen a
handwritten letter asking for a bill for a new first-floor deck installed by Veco employees.

"You owe me a bill. Remember Torricelli, my friend," Stevens wrote, referring to a campaign finance scandal involving Robert Torricelli, the former senator from New Jersey.
"Friendship is one thing. Compliance with the ethics rules, entirely different."

Stevens added that Allen needed to contact their mutual friend Bob Persons, who was monitoring the renovations because the senator spent so much time in Washington.

When he met with Persons, however, Persons told him to ignore Stevens's request for an invoice, Allen testified. "Bill, don't worry about getting a bill" for Stevens, Allen said
Persons told him. "Ted is just covering his [expletive]."

A month later, Stevens again requested a bill. But Allen ignored that, too. He said he didn't want to charge Stevens a dime for the work. "I wanted to help Ted," Allen testified.

"Why?" asked prosecutor Joseph Bottini.

"Because I liked him," Allen replied.

Prosecutors introduced the notes to show that the senator was aware of how much work Allen and Veco put into the house.

"When I think of the many ways in which you make my life easier and more enjoyable, I lose count," Stevens wrote to Allen in October 2002. "Thanks for all of the work on the
chalet."

Stevens's attorneys have argued that the senator and his wife paid every bill they received, a total of $160,000. Stevens and his wife -- she handled the financial arrangements for the
renovation -- thought that was a fair market price for the renovations, the lawyers have said.

The couple never learned about other potential costs because Allen hid them, the lawyers have said.

Allen has pleaded guilty to bribery and conspiracy charges in a widespread federal investigation of corruption in Alaska's political system. His testimony has led to the convictions of
two state legislators.
Judge Refuses to Dismiss Stevens's Indictment o... http://www.washingtonpost.com/wp-dyn/content... 10/2/2008 21:04

Prosecutors say the bills paid by Stevens came from a subcontractor who helped Veco build a new first floor and did other carpentry work in 2000 and 2001. Those bills,
prosecutors said, did not cover all the remodeling costs, and internal Veco documents introduced at trial revealed the company spent $188,000 of its own on the project over two
years.

Allen, 71, seemed to testify grudgingly about Stevens, one of the most powerful Republicans in the Senate. The former Veco executive also spoke haltingly and had trouble forming
some words, the result of a head injury suffered in a 2001 motorcycle accident.

Stevens first raised the idea of installing another floor in his house in 1999 so he could better entertain family members, Allen testified. He said he told Stevens that Veco, a 5,000-
employee company that serviced oil rigs, could handle the job.

Allen said he asked Stevens to help him on a variety of matters, from trouble with a pipeline investment in Pakistan to lobbying state officials over a project in Alaska. In the
Pakistan case, Stevens wrote a letter to the World Bank urging that its top officials become involved in the dispute. The issue was soon resolved, Allen testified.

In earlier testimony, Allen said he had Veco workers install a generator at Stevens's house in 1999 after the senator asked him for one in case he lost power because of the
millennium computer bug. Allen said the generator cost about $6,000.

That year, the senator also asked him to swap cars. Allen testified that he gave Stevens a new $44,000 Land Rover in exchange for a rare "1964 1/2 " Mustang worth at most $20,000.
Stevens also gave Allen a $5,000 check, the former executive testified.

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