Live from the Ted Stevens Trial--Day Four

September 25, 2008

Washington, D.C.--It was the street-smart counselor versus the trusted but mocking uncle.

The dramatic part of the Ted Stevens trial started today with opening statements.
To Brenda Morris, the lead prosecutor, the case is simple: Ted Stevens took hundreds of thousands of dollars in freebies and then concealed their receipt when the law required their disclosure so that he could “keep the flow of bennies coming.” Most of those benefits came from Bill Allen, CEO of VECO Corporation—a large oil-services corporation company primarily paid by big oil companies like Exxon—when VECO served as general contractor during extensive renovations of Stevens’ home in Girdwood, Alaska.

Ted Stevens’ lawyer Brendan Sullivan saw it differently. All the stuff Ted Stevens got and did not report was mostly the fault of an overeager Bill Allen, who kept giving Stevens stuff he didn’t want. The other problem, said the defense attorney was that Stevens’ own wife Catherine—responsible under family rules for paying the household’s bills—perhaps slipped up on the job.

Morris is a black woman, like the majority of the jury in this majority-black city. She is also polished and professional, and she gave her opening statement a definitely urban feel.
She laid out an array of gifts and goodies for the jury—more than $250,000 in work on “the chalet,” plus a generator worth $6,000, furniture, a massage chair worth almost $2,700, a permanently attached professional gas grille, a multi-drawer tool cabinet complete with tools, a sweetheart deal for a new Land Rover for Stevens’ daughter, and a sled dog. The U.S. Department of Justice has charged Stevens in a seven-count indictment for failing to disclose these benefits as legally required on disclosure forms Senators have to submit annually.

Prosecutors have listed in court filings and hearings a variety of other things of value allegedly received by Stevens, including a $29,000 bronze statue of a fish, a $3,200 stained-glass window, a $31,000 interest-free loan on a Florida condominium, and another discount on a new SUV—this one a Jeep Cherokee—for his daughter.

Morris, the principal deputy chief in the Department of Justice’s Public Integrity Section, pointed out that before beginning his home renovation project in 2000, Stevens had written a letter in 1997 complaining that he didn’t have the money to do the job. Then entered Bill Allen, said Morris, and Stevens used the company as “his own personal handyman service” while never paying Allen’s company VECO a penny.

Detailing all the things Stevens asked for and got from Allen and VECO regarding his home over an eight-year period, Morris said that “We reach for the Yellow Pages. He reached for VECO.”
Morris acknowledged that some of VECO’s accounting of all the benefits may not be perfect, adding “But hey, the cost is always good when the price is free.”

The veteran federal prosecutor painted Stevens as both savvy and shady. Morris called him a “career politician” who had been in the U.S. Senate for 40 years. “"You do not survive politics in this town for that long without being very, very smart, very, very deliberate, very forceful and, at the same time, knowing how to fly under the radar," Morris said. She also emphasized that Stevens had been in a partnership with Allen on a racehorse.

The deal with Allen on the Land Rover had Stevens get a brand-new SUV worth $44,000 in exchange for a 1964 Mustang and $5,000. Morris noted that there might be some dispute over the value of the Mustang, but she insisted that the important things were that the car was not in good shape and that Stevens himself had admitted around the time of the exchange that the value was far less than $39,000.

Stevens and Allen were both old school, said Morris, and part of being old school is reaching out to help your family. This was an obvious reference not only to allegations of Stevens’ successful efforts to get from Allen new SUVs for his daughter, but a job for one son and schooling for a grandson. (The hundreds of thousands VECO paid to Ted Stevens’ son Ben Stevens for consulting work is less likely to come up, as Ben Stevens—Alaska’s former State Senate President—certainly faces indictment himself and is not on the witness list of approximately 200 for this trial. Both Allen and Rick Smith, the VECO VP who was Allen’s chief political lieutenant, have sworn in court that Ben Stevens was among the public officials they bribed regarding oil tax legislation. Press accounts have reported that the federal investigation is examining consulting fees paid to Ben Stevens regarding federal fisheries legislation his father was heavily involved in.)

Morris tried to draw the sting by disclosing two of the warts on Allen before the defense had a chance to announce them. Allen is not a perfect person, she acknowledged, but instead a felon convicted of bribing Alaska state legislators on legislation to help VECO. (Morris didn’t elaborate, but her reference to that legislation adopted in 2006 touched one of the big unanswered questions triggered by the federal investigation. That question is what role the big oil producers had in VECO’s bribery of the Alaska lawmakers regarding legislation setting rates on a tax on oil production, which by definition is a tax that only the big oil producers had to pay. Those big oil producers—ExxonMobil, British Petroleum, and ConocoPhillips—were the big clients who provided the bulk of the work that allowed Allen to build VECO into a company with a billion dollars in annual revenue and more than 4,000 employees.)

Morris also talked briefly about a motorcycle accident in 2001 that left Allen with a brain injury. The prosecutor noted, however, that other evidence—such as e-mail messages between Stevens and Allen—corroborate Allen’s testimony.

One of the most intriguing aspects of the prosecution’s overview was the reference to a conversation—presumably tape-recorded—between Stevens and Allen after the heat was on. Stevens apparently said that the two were in this together, and one of them said nobody would die because the worst-case scenario was spending a lot of money on legal fees and a little time in jail.

The man in charge of keeping Ted Stevens out of the Stony Lonesome was masterful this morning. Brendan Sullivan reportedly bills $1,000 an hour, and he gave much more value than that in the hour he spoke in his opening statement.

Sullivan told a much different story than the prosecution did. His defense was essentially "IBOBB": Ted Stevens is not guilty because he is Isolated, Busy, Old, Beneficent, and Beloved.
Isolated--It was particularly hard to keep track of the renovation project, Sullivan said, when Ted and Catherine spend so little time in their official residence in Girdwood, 3,300 miles from their actual home in Georgetown. Sullivan estimated that Ted Stevens was "at home" in Alaska only six days in 2000 and 19 days in 2001, when VECO did most of the work on the house.

Busy—Ted Stevens is known as “the workhorse of the Senate,” and Sullivan said that “You don’t get a title like that unless you’re on the job every second.” Being so busy—and being a traditional kind of guy—Stevens operated under the saying that “when it comes to things in and around the teepee, the wife controls." So Stevens had his wife Catherine handle the finances on the renovation project, and if blame is to be allocated, she should get it, suggested Sullivan. Where Morris had a “Law and Order” vibe going, Sullivan wanted the jury to think of “Ozzie and Harriet.” (Oddly enough, Stevens apparently communicated with his wife about the project a lot through his Senate staff, so it was sort of like “Ozzie and Harriet” if the dad was completely consumed with his job as a big-time CEO.)

Pointing the finger at the wife is important in this case, because Catherine Stevens is not a Member of Congress and so cannot be prosecuted for the crimes of failing to disclose gifts or loans on the Congressional disclosure forms. (Several observers have wondered why the Department of Justice did not arrange to have the grand jury to indict Stevens for income tax violations as well as the Senate form disclosure violations, given that tax charges are famous—or notorious—for tripping up defendants in white-collar cases. The answer is past a minimum level that gifts are taxable for the donor, but gifts are never taxable for the recipient under U.S. law.)

To rebut the suggestion of prosecutors that a man like Stevens who oversaw the whole federal budget for years as chairman of the Senate Appropriations Committee should have been able to keep better track of the renovation of his official residence, Sullivan signaled that he would be pointing to those pressing Congressional duties as the reason he couldn’t take care of those personal responsibilities.

Old—Stevens doesn’t like it when he says it, Sullivan observed, but Stevens is 84 years old. Showing the many hours he has clearly spent with Stevens, Sullivan pointed out that when you’re 84, most of your real friends are dead. The attorney suggested that Stevens should not be held to the standard of a younger man.

Beneficent—Stevens wanted to do things for people. The whole point of the house project was to create room for visits from his 11 grandchildren, Sullivan said.

And Stevens did things for people in his professional life as well. Obviously concerned about what prosecutors would show about legislative favors that Stevens had done for VECO, Sullivan asserted that Stevens helped VECO like he helped all his Alaska constituents. Stevens pleaded “guilty” to any accusation that he did things in the Senate for VECO, Sullivan said. "If you hear evidence that he assisted Bill Allen or VECO in any way so those 4,000 employees could continue to work, they're right," Sullivan said. "There's absolutely nothing wrong with it. He's proud of it. Bring it on."

But Sullivan asserted that such beneficence did not extend to doing everything that was desired by Big Oil, the source of the money VECO made for Allen. Sullivan cited the time during discussions of construction of the Trans-Alaska Pipeline System that Stevens talked about a role for labor unions on the project. Somebody told the Senator that such talk would not make the big oil companies happy. Sullivan said that Stevens replied “I don’t work for Big Oil. I work for the people of Alaska.”

Beloved—Many people love Ted Stevens, and Sullivan offered a lot of good reasons for why that would be so. The Ted Stevens he knows is no crafty politician—no, he’s a former pilot for the Army Air Force who risked his life for his country in World War II and then came back to the USA to serve the public. Ted Stevens help get statehood for Alaska and then become one of Alaska’s U.S. Senators. Stevens loves Alaska and loves the Senate, Sullivan said. After a long and honorable life, why would he decide to become a criminal in his 75th year?

(As one friend pointed out, Sullivan did not mention that Stevens had been a lawyer for about 20 years before entering the U.S. Senate or that his legal career had included service as a federal prosecutor when he was U.S. Attorney in Fairbanks. Although these resume bullets are often cited in Alaska as reasons that Stevens is too knowledgeable to commit these crimes, Sullivan presumably omitted them out of a concern that jurors would wonder why such an informed person would allow himself to fall into the incriminating position the evidence will set out.)

Stevens never intended to get his home renovation done for free, Sullivan said. The Senator lined up the money to pay for the project by dissolving a trust to get $50,000 and by getting a $100,000 mortgage on the house.

Sullivan suggested that Stevens went in good faith to his old friend Bill Allen to find some good workers for the construction job and to get him to review the bills so that the Stevenses would “get a reasonable product for their money.” Stevens had every reason to trust Bill Allen then—Allen “was a pillar of the community, and a worthy friend as far as Ted Stevens knew.”

Sullivan's opening statement eschewed the obvious attacks on Allen as a brain-addled child molestor out to shade his testimony in favor of the prosecution to try to collect another $40 million held back from him when he sold VECO. Those assaults on Allen as Demented and Devilish will come during cross-examination of Allen and in the defense's closing argument, as Sullivan focused in his opening statement on all the reasons that Stevens was justified in relying on Allen to help him with the renovation of the chalet.

The biggest problem for Stevens in this case, Sullivan suggested during the opening statement, is that his old friend Bill Allen had too much affection for Stevens that Allen showed in inappropriate ways. Allen was eager—and overeager—to help Stevens in a whole bunch of ways. Allen gave Stevens furniture Stevens didn’t want (one piece even had a cigarette hole in it) and a fancy grille he didn’t want. Allen went hog-wild with $20,000 worth of rope lighting—apparently going outside the state to find it and even using a crane to install it—when all Stevens asked for was for Allen to arrange to put up Stevens’ own regular Christmas lights. Sullivan said Stevens “didn’t want “didn't want these things, he didn't need these things and he didn't ask for these things."

Allen directed a subcontractor to “eat” one bill for the subcontractor’s work on the house, Sullivan said, and the subcontractor was sufficiently afraid of Allen that he never told the Senator. Stevens did not know about much of the work VECO did on the house, and Allen apparently never sent bills for the work VECO did that Stevens did know about despite Stevens’ attempts to get Allen to do so. As a result, Stevens lacked the necessary intent to violate the law by not disclosing what Allen gave him, Sullivan said.

"Every bill submitted was paid….You cannot report what you don't know," Sullivan said. "You can't fill out a form and say what's been kept from you by the deviousness of someone like Bill Allen."

In the upcoming month-long trial, Sullivan and the other three Williams & Connolly lawyers in court will get additional opportunities to explain both why Allen wanted to help Stevens so much and why Stevens could not manage to stop the continuing shower of favors that Allen sprayed him with.

Sullivan explained some of the other work done by VECO as unbilled because of embarrassment on VECO’s part. VECO did some of the work on the house—such as on the heat tape system—because the company had screwed up the first time in a way that led a big slab of ice to slide off the roof and hit the garage. That portion of the work, Sullivan said, was justifiably not billed to Stevens.

The white-haired veteran of 40 years of law practice in Washington couldn’t relate as a peer to the jury the way that Morris could, but he could have fun batting away the allegation involving the sled dog. Sullivan was at his most mocking as he told how Stevens got two puppies at a charity event in Alaska, took them back to Washington, and then paid legendary Alaska musher Susan Butcher to take them when they got too big for him to handle. “It’s apparently a federal crime not to report a dog.”

Sullivan took one of his biggest risks by announcing that the defense would call character witnesses on behalf of Stevens. Sullivan said it wouldn’t just be a parade of big shots to impress a jury in Washington, D.C., but would go to the core of the case to show what an honest and good man Ted Stevens was as shown by the testimony of those who knew him well. The multimillionaire attorney acknowledged that these witnesses—Sen. Ted Kennedy and ex-Secretary of State Colin Powell are among those listed—were not part of the jurors’ regular experience, but those people were part of the world that he and Sen. Stevens inhabited. It was an impressive way to acknowledge the roles that power and privilege play in this case, the first time in more than 25 years a sitting Senator has faced trial in a criminal case.

After the sturm and drang of opening statements came the first two witnesses, who are the first of 200 who could testify. More on those tomorrow.