Why Did the Department of Justice and Bruce Weyhrauch Agree to a Deal?

Anchorage--



After almost four years of litigation over four felony charges alleging public corruption, federal prosecutors and former State Rep. Bruce Weyhrauch (R.-Juneau) agreed to a settlement of the case. The deal that was executed last week allowed the former legislator to plead guilty to a single state misdemeanor of knowingly allowing two unregistered lobbyists to lobby him when Weyhrauch was aware of a substantial probability that they were not registered. For this offense, a judge sentenced Weyhrauch Tuesday to a three-month suspended jail sentence and a $1,000 fine, and put him on a year of probation.



Weyhrauch’s case was the last of the cases arising out of the federal government’s POLAR PEN investigation into Alaska public corruption to be resolved at the trial court level. Why did the two sides come to this deal now?


Know right up front, dear reader, that Bruce Weyhrauch is the defendant in the POLAR PEN cases that I know the best. I have known him for about 30 years, and I have had numerous personal and professional contacts with him during that time. He and I have never spoken about this case, however, or had a conversation since his indictment in 2007. More on my experiences with Bruce Weyhrauch here.



Before this plea arrangement was announced and executed, I was planning to write a post on the things each side had going for it as the trial approached. That post now morphs into an analysis of the factors affecting the sides’ decision to make a deal. I’ll start with the background of the case before I discuss items favoring the prosecution, lay out what was good for the defense, set out the factors pressing each side for a pre-trial settlement, and end with some comments.



BACKGROUND



On May 3, 2007, the federal government filed a grand jury indictment of former State Rep. Bruce Weyhrauch (R.-Juneau). The indictment charged Weyhrauch with four felonies: extortion, bribery, honest services fraud, and conspiracy to commit those other three crimes.



The context for the charges was the Alaska Legislature’s consideration of the Petroleum Profits Tax (PPT) legislation in 2006, legislation that was heavily lobbied by Bill Allen and Rick Smith, executives of the giant oil-services corporation VECO. That company made substantial amounts of money through contracts with Alaska’s major oil producers, who would pay any higher taxes imposed by the State of Alaska.



The indictment alleged that Weyhrauch, an attorney and legislator first elected in 2002, agreed to help the VECO executives try to get their preferred version of oil tax legislation adopted in 2006 in return for a promise of future contract legal work.


Although it was originally scheduled to go to trial in September of 2007, the federal government delayed the case while making a pre-trial appeal of an evidentiary ruling from the trial court. The prosecution had announced that it wanted to argue that Weyhrauch was required to disclose his solicitation and discussions with VECO under a state statute providing that “A legislator may not…unless required by the Uniform Rules of the Alaska State Legislature, take…official action or exert official influence that could substantially benefit…the financial interest of another person with whom the legislator is negotiating for employment.” Under the prosecution’s theory, Weyhrauch was guilty of honest services fraud because he failed to disclose those discussions in violation of this law.



U.S. District Judge John Sedwick ruled that this law—AS 24.60.030(e)(3)—did not require disclosure, and prohibited the prosecution from presenting evidence or arguing to the jury that the law required the lawmaker to disclose his discussions with VECO executives about future contract work before taking official action regarding PPT legislation.



The Department of Justice apparently thought that this evidence was so important to its case against Weyhrauch that the prosecution held up the trial against him to pursue the appeal.



The case then sat on hold for almost three years as it wended its way through the courts. Bruce Weyhrauch’s name was then enshrined forever in the lawbooks when the U.S. Supreme Court issued a decision in his case and two others in June of 2010. The Supreme Court ruled that the honest services fraud statute did not cover the kind of undisclosed self-dealing that the prosecution alleged Weyhrauch engaged in.

After a series of other delays, the case was scheduled to go to trial starting May 9, 2011 in Juneau. Both sides made moves to prepare for the trial.



Then on Friday, March 11, documents were filed in state court in Juneau showing that the parties had agreed to end the case by having Weyhrauch plead guilty to the very substantially reduced—and unprecedented—misdemeanor offense of “participating in, aiding, or abetting a lobbyist engaging in activity as a lobbyist without being registered.”



Weyhrauch pleaded guilty on Monday and was sentenced on Tuesday morning. Weyhrauch’s lawyer Doug Pope said despite the government’s “pathetically weak case,” the prosecution had put Weyhrauch and his family “through a special kind of living hell.” At the sentencing hearing, Weyhrauch’s attorney Ray Brown said that his client had “spent over $300,000 in defense cost.” State District Court Judge Keith Levy stressed the importance of being faithful to the public trust as a legislator in denying the defense request for a suspended imposition of sentence, an outcome that would have allowed Weyhrauch to get the conviction wiped off his record if he successfully completed probation.



As he left the courthouse, Weyhrauch told reporters that "No citizen of this country should have gone through what I've gone through -- what the federal government, they've done to me, they can do to anyone.” He added that "I look forward to a bright tomorrow and spending time with my family."



THINGS THE PROSECUTION HAD GOING FOR IT



1. Undisclosed angling for work from VECO. Bruce Weyrhauch solicited VECO for contract legal work and discussed with VECO executives possibilities for that work while he was a state legislator working on PPT legislation in 2006, and never disclosed the solicitation or the discussions.


2. Working with VECO on oil tax legislation in ways that are arguably suspicious. Weyhrauch also communicated with Allen and Smith in ways that helped those executives in the legislative process on the PPT bill. The ways that Weyhrauch apparently helped the VECO executives allegedly included switching his vote on an amendment to the legislation after the government said he received “instructions” to do so from Allen and State Rep. Pete Kott (R.-Eagle River), a legislator working closely with Allen.


3. Crooked-appearing associates. Some of the people that Weyhrauch dealt with on the VECO legislation—including Allen, Smith, and Kott—look criminal and tawdry on tapes (including some videotapes) that the FBI made during its investigation into Alaska public corruption.


4. Other people’s comments suggesting Weyhrauch sold his office. In a telephone conversation captured by the FBI, Allen and State Senate President Ben Stevens (R.-Anchorage) agreed that Weyhrauch came to support VECO’s preferred version of the PPT bill because Allen had told Weyhrauch that VECO would give him contract legal work in the future. In other conversations away from Weyhrauch, Allen and Smith also made other comments that explicitly or implicitly linked Weyhrauch’s support for the VECO-supported version of the legislation to Weyhrauch’s expectation of future legal work from VECO.



5. Weyhrauch’s tough financial situation. It was widely known in the Capitol that the lawmaker was pressed for money in 2006, as the solo practitioner struggled to support three children in a house that had been renovated. The indictment alleges that while meeting with Allen and Smith to discuss future legal work, Weyhrauch told Allen that he "was not doing well financially."



6. Bad optics over “This is our floor” speech. During legislative consideration of the PPT bill, Rep. Ethan Berkowitz (D.-Anchorage), the House Minority Leader, angrily denounced outside pressures on the process. “This is our floor. Our floor,” Berkowitz said in a clip that was widely replayed. “No telephone call is supposed to change what we’re doing. No lobbyist is supposed to peer over the ruling and tell us to change our mind.” Weyhrauch got up to object and assert that Berkowitz’s characterization was incorrect. Regardless of the reason(s) that Berkowitz made that speech, the prosecution might have suggested that Weyhrauch’s hasty objection represented consciousness of guilt.


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The line above represents a division between things the prosecution could clearly have gotten before the jury (the points above that line) and things the government’s lawyers would have hoped they could get into evidence (the points below the line).


7. Alleged chiseling on per diem payments. The prosecution claimed that the lawmaker had repeatedly submitted “fraudulent” requests for payment for some legislative work compensated on a basis of time worked, apparently alleging that Weyhrauch had a pattern of seeking payment for work he did not perform. The trial judge prohibited the prosecution from introducing this evidence, but the government announced in pre-trial pleadings that it would be looking for other ways to get these allegations before the jury during the trial.


8. Other behavior in the legal arena that was arguably inappropriate. Weyhrauch took a fee from a company to seek executive clemency (often called a “pardon”) for a company that had been convicted of criminally negligent homicide. This representation for the firm Whitewater Engineering had Weyhrauch ask Governor Frank Murkowski to give this unusual relief, which Murkowski granted in the waning days of his administration. Although not prohibited by laws and rules then in effect regarding the conduct of lawyers and legislators, Weyhrauch’s conduct could be portrayed as evidence of poor judgment and a conflict of interest, as the Governor would clearly want Weyhrauch’s legislative assistance on other matters. Weyhrauch donated his legal fee from the company to a charity, apparently after the FBI’s search of the lawmaker’s office pursuant to a search warrant signaled that Weyhrauch was a target of the POLAR PEN federal investigation into Alaska public corruption.


9. Evidence suggesting that Weyhrauch should have known better. Before he became a legislator, Weyhrauch had been on the board of the Alaska Bar Association and had served as its President, positions in which he had participated in decisions about the imposition of professional discipline on other attorneys. Additionally, Weyhrauch—like Ben Stevens—served on the Select Committee on Legislative Ethics in 2005-2006.


THINGS THE DEFENSE HAD GOING FOR IT


1. No money changed hands. Weyhrauch got no money from VECO, and the government seemed to have no evidence that he linked any legislative assistance regarding VECO’s preferred version of the PPT bill to any future contract legal work from VECO.


2. Innocent explanations for Weyhrauch’s actions on oil tax legislation. The defense was prepared to present witnesses that Weyhrauch’s thinking about the PPT bill evolved for legitimate and non-corrupt reasons during 2006. Although the prosecution would have argued that a legislator can help a cause in ways other than voting on the floor—such as gathering intelligence and lobbying other lawmakers—the defense would have picked through the many votes legislators took on PPT bills during the regular session and two special sessions and pointed to at least one instance in which Weyhrauch had voted that year against VECO’s preferred position on the legislation.


3. Favorite arrow in prosecutor’s quiver blunted severely. The Supreme Court’s narrowing of the honest services fraud statute in 2010 took away a very important argument for the prosecution against Weyhrauch.


4. Shrunken government witness list. By 2011, the government’s witness list had gotten smaller, as the prosecution had indicated that it would not call Bill Allen to the stand. Additionally, the defense alleged that a lawyer for lead FBI agent Mary Beth Kepner had indicated that she would claim a Fifth Amendment privilege against self-incrimination if called to testify at Weyhrauch’s trial.


5. Tape shortage. Tapes of incriminating behavior and statements had been critical in the conviction of a number of defendants in cases arising out of the federal investigation, and Weyhrauch doesn’t show up on truly damning tapes the way a number of other defendants have. Weyhrauch never went to Suite 604, the “Animal House” headquarters of Allen and Smith’s lobbying operation in Juneau’s Baranof Hotel that was the scene of tapes that made a number of defendants look both guilty and crude.


6. Shaky law on disclosure. The government never alleged that Weyhrauch’s solicitation of legal work from VECO violated the ethical rules applying to Alaska lawyers, and Weyhrauch and his defense claimed that he was acting within the letter and intent of state law and legislative guidelines when he solicited work from companies with business before the legislature without disclosing it. Weyhrauch had told other legislators that he had sent out numerous letters seeking work from potential clients, and he told the Anchorage Daily News that other companies he solicited had business before the legislature.


7. The Department of Justice in full retreat. Disclosures of failures in meeting responsibilities to provide evidence to the defense have led to the meltdown of the prosecution against U.S. Sen. Ted Stevens and the release of former State Reps. Kott and Vic Kohring put the government’s investigation in a bad odor. Two probes into the prosecutors and the investigators in POLAR PEN have been going on for close to two years. Although touching on this sad and emotional subject could have been dangerous, the defense might have been looking for some way to get before the jury the suicide of former Department of Justice attorney and POLAR PEN point man Nicholas Marsh in an attempt to argue that he was trying to escape the consequences of his actions.


Weyhrauch’s defense attorneys had already filed a sealed document in federal court alleging “misconduct before the grand jury” that indicted him. Although we don’t know what would have come of that effort, the Department of Justice might have seen the continuation of litigation in the Weyhrauch case as another way unpleasant facts might have surfaced regarding the POLAR PEN prosecution.


With all these problems and concerns, the feds were looking to fold their tent. Letting Weyhrauch plead to a misdemeanor in state court was as close as the prosecutors could come to dumping the case without actually dismissing it. On the other hand, Weyhrauch’s plea to that misdemeanor stopped the meter running on his attorney bills, already over $300,000.


8. Home court advantage. By 2011, Weyhrauch’s lawyers had succeeded in getting the trial moved from Anchorage to Juneau, where at least some in the jury pool may have been exposed to positive information from the defendant’s political campaigns and extensive community service.


9. Minnow among the whales. One of the people the indictment alleges that Weyhrauch conspired with is former State Senate President Ben Stevens, who remains uncharged despite the federal government’s allegation that Bill Allen arranged to have VECO pay him more than $243,250 over five years for “giving advice, lobbying colleagues, and taking official acts in matters before the legislature.” Along with “Where’s Bill?,” another defense theme at a trial could be “Where’s Ben?”


10. Family man with good family. As his lawyers recognized, a jury might be affected by Weyhrauch’s three attractive children and his particularly nice wife.




An additional background factor playing into each side’s handling of the trial, particularly before a Juneau jury, would have been a mishap Weyhrauch experienced in his hometown nine days before he was indicted and arrested. Back in April of 2007, Weyhrauch was reported missing while alone in his small boat in the waters off of Juneau. He was found 17 hours later on an island with signs of hypothermia.

This unusual incident would likely only have come out openly in the trial if Weyhrauch had testified in his own defense. If he had taken the stand, he likely would have said the same things about the case that he told Richard Mauer of the Anchorage Daily News after the sentencing. In the rules that govern Alaska’s citizen legislature, there is no duty to disclose solicitation of work from a company like VECO, Weyhrauch said. “Once you represent somebody you disclose it.” He also said that his busy schedule of work and family responsibilities kept him from learning that Allen and Smith were corrupt. He said that the grueling schedule had led him not to run for re-election in 2006, a decision his lawyers have said that he made before he solicited work from VECO.


EVALUATION


Some of Bruce Weyhrauch’s conduct as revealed in this case was troublesome, but that doesn’t mean that it merited criminal punishment under the law. In the words of close observer Mark Regan, the charges against this former legislator “have been disproportionate to the gravity of his alleged wrongdoing.” (If an instance of questionable judgment was grounds for prosecution if it disappointed an old friend, it’s not clear when I would ever get out of prison.)


Given the large number of lawmakers who dealt in 2006 with Bill Allen and Rick Smith, it is of course odd that Bruce Weyhrauch stands as almost certainly the only Alaska legislator who will ever be convicted of the crime the Associated Press characterized as "letting unregistered lobbyists peddle their ideas to him." A good lawyer like Weyhrauch of course knows that being odd does not mean illegal and that selective prosecution is definitely common in American law.


On a personal level, it was nice to see LuAnn Weyhrauch smile on the video the Anchorage Daily News posted showing her and her husband leaving the courthouse after the sentencing. Bruce Weyhrauch has a lot of things going for him as he puts this terrible experience behind him, as he is smart, hardworking, and fiercely loyal to his family and friends. There is of course a terrible irony in that it was Bruce Weyhrauch’s search for income to support his family that has led to a case that has cost him at least $300,000 as well as a long walk through hell. You have to wonder how much he regrets running in 2004 for his second term in the legislature, and you have to wonder how much he would paid some higher power in 2006 to avoid going through the ordeal of the last four years.