The Substance and Thinking Involved in the Ted Stevens Indictment

Anchorage--

Here is the latest installment of my column for the Alaska Bar Rag, the official publication of the Last Frontier's lawyers.    It is one of a series of pieces on the Ted Stevens case.

The Substance and Thinking

Involved in the Ted Stevens Indictment

by Cliff Groh

The last Bar Rag column described how the Department of Justice ended up not charging U.S. Sen. Ted Stevens with the offenses of bribery, honest-services fraud, receipt of illegal gratuities, and conversion of government services prosecutors considered during a probe that ran at least 33 months.

This installment in a multi-part series on the Ted Stevens case looks at the counts of failure to disclose gifts and/or liabilities that did appear in the indictment handed down on July 29, 2008.   This piece also includes an examination of some of the other factors involved in the indictment.      

Charges:  Items, Dollars, and Years

Recall that the indictment charged seven felony counts of failing to report gifts and/or liabilities on disclosure forms required annually from each U.S. Senator.   The prosecution alleged that Ted Stevens failed to report such colorful gifts as a massage chair from Girdwood restaurant owner Bob Persons, a blue-eyed puppy and a stained-glass window from Alaska real estate developer Bob Penney, and a bronze salmon statue from the Kenai River Sportfishing Association.   That first gift—a vibrating lounger that stayed in Stevens’ home in Washington, D.C. for seven years while Stevens said he thought it was a loan—left a lasting image that hurt the defendant at trial.  

Yet the great bulk of the unreported gifts and/or liabilities contained in the government’s case came from the oil-services giant VECO and its long-time CEO Bill Allen in the form of renovation work, repair, and improvements at the Senator’s Girdwood home.   The indictment alleged that over a period of more than six years Stevens failed to report more than $250,000 in free labor, materials, and other things of value provided by VECO and/or Allen at the Girdwood residence.   Items on the government’s  list of “freebies” included hardwood floors, work on one deck and all the work on another deck, a roof over the second deck, a professional gas grill, a Jacuzzi, and other furniture.   The indictment included one more benefit going from Allen to Ted Stevens that was unrelated to the Girdwood residence, a car trade in which one of the Senator’s children allegedly ended up with a vehicle substantially more valuable than the vehicle the Senator put up as his part of the trade.

The benefits from VECO and/or Allen were loaded into the early years of the period covered by the indictment handed down on July 29, 2008.   The charging document stated that approximately $200,000 of those things of value came in the period between the summer of 2000 and the end of 2001 and that another approximately $55,000 worth of benefits came in 2002.    

Six counts in the indictment covered the annual reports filed for the six calendar years 2001 through 2006, and alleged that Stevens had violated a federal statute (18 U.S.C. Subsec. 1001(a)(2)) criminalizing the making of “any materially false, fictitious, or fraudulent statement or representation.”   A seventh count alleged a scheme by Stevens running from calendar year 1999 through calendar year 2006 to conceal his receipt of things of value from Allen and VECO.   That seventh count alleged that the Senator had violated 18 U.S.C. Subsec. 1001(a)(1), which targets one “who falsifies, conceals, or covers up by any trick, scheme, or device a material fact.”   

Limiting Elements of the Offenses Charged

This statute has two critical limiting features:   a required mental state and a restriction on the statements covered.  

The mental state on the counts differed.  In the six counts for individual years it was “knowingly and willfully,” and the mental state in the count for the alleged multi-year scheme was “knowingly and intentionally.”  

Except for listed exceptions, the statute covers statements “in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States.”   Importantly for lawyers, one of those exceptions is that the statute does not apply to a party to a judicial proceeding or that party’s counsel “for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.”   More importantly for this case, as to any matter within the jurisdiction of the legislative branch, the statute applies only in a limited set of circumstances, including “a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch.”

The Source of the Requirement to Disclose:  The Ethics in Government Act

The indictment alleged that the relevant false statements by Ted Stevens appeared in annual disclosure forms required by the Ethics in Government Act of 1978 (5 U.S.C. App. 4 Secs. 101-111).  That Act requires various federal officials, including Members of Congress, to file annual disclosure statements detailing, with certain exceptions, their income, gifts, assets, financial liabilities, and securities and commercial real estate transactions. This statute was a child of the reforms adopted after the Watergate scandals (as was the Public Integrity Section that spearheaded the prosecution of Ted Stevens).  Particularly because of its restrictions on outside income for Members of Congress, the legislation was highly controversial on Capitol Hill when adopted—one Member of the House told the New Yorker that the bill was so unpopular that the legislation would have failed 2-1 if put to a secret ballot.   

As a statute, the Ethics in Government Act was not a favorite of prosecutors, either.  In conjunction with the statute criminalizing some false statements, the adoption of the Ethics in Government Act made it possible to prosecute public officials for false statements on their disclosure forms, but such prosecutions were not common.  According to James B. Stewart’s 1987 book The Prosecutors, the Justice Department had adopted an informal policy that disfavored prosecution for disclosure violations “except in the most egregious cases.”   

The subjective state of mind required by the statute was the practical problem prosecutors often found with charging public officials with the crime of failing to disclose gifts, loans, and income.   Prosecutors were worried that juries would be sympathetic to a defendant claiming he or she just forgot the matters that did not appear on the disclosure forms.  As Stewart reported in 1987, prosecutors evaluating charges against a number of federal officials—including Attorney General nominee Edwin Meese—ended up declining to prosecute on disclosure violations based on fears of inability to approve the required criminal intent to conceal.    And it was of course the mental element that turned out to be where all the action was in the Ted Stevens case.

Shorn of any charges of bribery or honest-services fraud, the 

indictment against Ted Stevens seemed to many observers to contain only technical violations.   Alaska historian John Strohmeyer branded them “pussycat charges,” and Fairbanks newspaper columnist Dermot Cole suggested after the trial that all the government had proved was that Stevens “may have failed to fill out the paperwork correctly to report such gifts as a gas grill, massage chair, sled dog and ugly artwork.”

With Bill Allen pleading guilty to bribing Ted Stevens’ son Ben—and given the very close personal relationship between Bill Allen and Ted Stevens over a number of years—the federal investigators and prosecutors on the Polar Pen probe would disagree.  Although they would never say it this way publicly, it seemed like some of those prosecutors and investigators pursuing Ted Stevens saw the charges of failure to disclose as equivalent to the charges of income tax evasion that brought down notorious mobster Al Capone.

The indictment had some distinctive touches, including a number of official acts that Ted Stevens took to benefit VECO.   Prosecutors could have inserted the list to offer a motive for why Stevens wanted to hide his receipt of benefits.   The list also seemed to be a residue of the years the Justice Department spent investigating Stevens for crimes with a quid pro quo element, almost like spots left on a dish after a hasty handwashing.   

One of those listed official acts reads particularly odd to Alaska eyes.  The indictment’s statement that Ted Stevens “received and accepted solicitations…from Allen and other VECO employees” for “assistance on both federal and state issues in connection with the effort to construct a natural gas pipeline from Alaska’s North Slope Region” betrayed a certain cluelessness about political realities in the Great Land.   Everybody with the slightest understanding of how things work on the Last Frontier knows that Ted Stevens would have strongly supported the gasline if Bill Allen had never been born and VECO had never existed.

Some Additional Factors in the Indictment

The Justice Department’s motivations for bringing the charges against Ted Stevens triggered much discussion in Alaska and on Capitol Hill, both because of the big political impacts of the case and because decisions on white-collar crime cases involve more prosecutorial discretion than do blue-collar crime cases.      

It was the Justice Department in the administration of President George W. Bush that brought the charges against the longest-serving Republican Senator ever.   When the case melted down due to revelations of prosecutorial misconduct, however, some commentators pointed to the Democratic leanings of some of the government’s attorneys to account for the Justice Department’s handling of the case.    The evidence suggests that any accusation of Democratic partisanship is a bum rap as an explanation for either the indictment or the discovery violations.    Two of the biggest players—Public Integrity Section Trial Attorney Nicholas Marsh and Public Integrity Section Chief William Welch—were Democrats, but this shouldn’t matter and did not seem to matter in this case.  

A more relevant factor in the decision to indict Ted Stevens was a lack of focus and management by the Justice Department throughout the process.   As one experienced Alaska lawyer observed, the Public Integrity Section and the higher-ups in Washington never seemed to understand what they had in the “Polar Pen” prosecution, treating Alaska as a backwater even after a Congressional powerhouse became a target.    The best way to see this is to contrast the Justice Department’s handling of the Ted Stevens case with how federal prosecutors dealt in the 1990s with another powerful politician, U.S. Rep. Dan Rostenkowski, D.-Ill.

There were a number of similarities between the cases of the two Capitol Hill titans.    Each served in Congress for more than 35 years and ended up as legends at home.   Both were long-time chairmen of critical Congressional committees—Rostenkowski helmed the tax-writing House Ways and Ways Committee, while Stevens had served for years at the top of Senate Appropriations.   Each had their lengthy careers ended by charges arising out of investigations that initially did not target them (the probe of Rostenkowski was an outgrowth of an examination of irregularities in the House post office system, and he ultimately pleaded guilty to two counts of mail fraud and served 15 months in custody).    Each faced charges brought by the executive branch under the control of the same party as that of the defendant (Rostenkowski was indicted in May of 1994 during the Clinton administration).

There were key differences as well between the Rostenkowski and Stevens cases.   The Rostenkowski case was brought by the Washington, D.C. U.S. Attorney's Office, while that office was excluded from the Stevens case.   Rostenkowski was charged with an unexpectedly wide-ranging 17-count indictment that covered fraud and embezzlement, conversion of public funds to private use, witness-tampering, concealing a material fact from Congress, wire fraud, and aiding and abetting a crime.   Prosecutors charged Stevens, on the other hand, with an unexpectedly narrow set of counts alleging failure to disclose his receipt of gifts and/or his liability for debts.   

Most importantly, prosecutors substantially experienced in high-profile public corruption cases seemed to pay more attention to the Rostenkowski case for a longer period of time than the Stevens case.   As detailed in the New York Times, Eric Holder took over as U.S. Attorney for Washington, D.C. after the investigation into Rostenkowski had run on for a number of months.  Holder had previously prosecuted a Congressman in an Abscam public corruption case.  The new U.S. Attorney quickly instructed the chief of the office’s public corruption section—a prosecutor who had successfully brought cases against a governor and a federal judge—to drop or re-assign other matters and work full-time on the Rostenkowski case, and the indictment came approximately seven months later. 

Contrast that intensive focus of attorneys with extensive experience in high-level public corruption cases with that of the lawyers most actively involved in the Ted Stevens case before the indictment.   The smart and hard-working Marsh had only been a prosecutor for about a year when he started working on the Polar Pen probe, and he had no previous experience being in charge day-to-day of a high-profile public corruption case.    Assistant U.S. Attorney Joseph Bottini was a highly experienced federal prosecutor with a strong reputation for straight shooting, but had no experience in a case like the one against Ted Stevens.

Next installment:   The indictment’s curious timing and the false choice it represented

Did Payoffs Grease the Way for the U.S.'s Purchase of Alaska?

Anchorage--

Tom Kizzia has a front-page story in today's Anchorage Daily News discussing evidence that questionable payments--perhaps bribes--went to key Members of Congress to secure passage of legislation to buy Alaska from Russia in 1867.   This evidence comes from a new biography of Secretary of State William H. Seward. 

Norms were different back then, as shown in the historically accurate portrayal of political maneuvering in the new movie Lincoln.   The film shows lobbyists associated with Seward--and President Abraham Lincoln--dangle jobs in front of Members of Congress to get them to vote for the 13th Amendment to prohibit slavery.   It is even more clear that laws--and the enforcement of the laws--also were substantially different in the 19th century than they are today.   The magisterial book Bribes by John T. Noonan, Jr. points out that it was not until 1853 that it was against the law to bribe a Member of Congress, and there were no convictions before 1905.   Noonan cites the English observer James Brice's estimate in 1889 that about one-quarter of Congress took cash, stocks, land, or other property for their votes or committee actions. 

Why Were So Many Experts Surprised by Obama's Victory?--UPDATED

Anchorage--

A number of people have asked why so many presumably well-informed people--apparently including high-ranking people in the Mitt Romney campaign itself--were so surprised when President Barack Obama won re-election, particularly by the margin he did.    One of those asking was my sister, so I wrote this analysis for her.    I am taking my wife's suggestion to post a slightly edited version of that analysis on this blog.    

Despite a number of public polls showing the likelihood of an Obama victory, some analysts gave wildly incorrect predictions of a strong win for former Gov. Mitt Romney, the Republican nominee.   One example of such a terrifically inaccurate prognostication was that by the long-time political analyst Michael Barone.   This veteran columnist and co-founder of the seminal Almanac of American Politics wrote on Nov. 2 that Romney would win 315 electoral votes.   Barone gave a backup prediction in the same piece that subtracted Pennsylvania and Wisconsin from Romney's column and thus still had Romney winning the presidency with 285 electoral votes, 15 more than the 270 needed to gain victory in the Electoral College.   (Barone eats his crow here in the face of the President's victory, which now with the Florida recount showing Obama the winner in that state  makes his Electoral College total stand at 332.)  

This question of "Why were people surprised when Obama won?" is separate but related to the question of why Obama won, which would include factors such as the nation's changing demographics, the Obama campaign's superior get-out-the vote efforts (as conceded by Romney campaign staff), and the apparently more effective use of advertising by the Obama campaign and its affiliated groups.    Influenced by the commentators Josh Marshall and James Fallows, I offer this list of reasons for why there was so much surprise Tuesday night in the world of Fox News:

1.   As my son's Campaigns and Elections professor pointed out to that class, the economic fundamentals were not as negative for Obama as a number of commentators thought, particularly because the economy is improving and many voters blame George W. Bush for the disappointing economy.

2.   Some commentators predicting a Romney victory focused on a perceived momentum and an intensity gap favoring Romney in the last month of the campaign.   The problem was that at least in some cases this perception of momentum, enthusiasm, and intensity seemed to be sharply influenced by the facts that (a) those commentators themselves strongly disapproved of Obama's policies and (b) those commentators spent a lot of time talking with other people who strongly disapproved of Obama's policies and projected the feelings of their friends to the electorate as a whole.   (This last sentiment is sometimes known as "the living in a bubble and not knowing it" problem, (unfairly) associated with the former New Yorker film critic Pauline Kael's alleged reaction to Richard Nixon's sweeping victory in 1972.)

3.   More technically, some commentators thought that most of the polls showing a lead for Obama were skewed by assuming that the voting public would consist of more Democrats than Republicans.   Those commentators thought that was unlikely.  A good example of that "Most polls are skewed" view was the John Podhoretz column just before the election in the New York Post which relies on the Rasmussen and Gallup national polls, two organizations that consistently reported better results for Romney that many other polling outfits.   As Podhoretz notes, Rasmussen predicted in October 39 percent R and 33 percent D, and Gallup predicted in October 36 percent R and 35 percent D.

The exit polls showed that most of the polls conducted by organizations other than Rasmussen and Gallup were right--in fact, 38 percent of the voters identified as Democrats and 32 percent identified as Republicans.   

How did Rasmussen and Gallup get this so wrong?

I have heard four explanations.    The first is a huge racial mistake by Gallup, which assumed that 78 percent of the voters would be white.   Instead, the exit polls showed that only 72 percent of the voters were white.   Nonwhite voters were obviously much more likely to vote for Obama than white voters.

A second factor is that Rasmussen and Gallup missed how much self-identification as Republican has dropped in recent years, with possible explanations being unhappiness with George W. Bush's presidency or displeasure with perceived obstructionism by Congressional Republicans during Obama's presidency.

The other two explanations for why Rasmussen and Gallup thought the voters would be so much more Republican and/or white than actually occurred are rooted in technical deficiencies in the methodologies of some polls.   Rasmussen runs robo-polls through automated pre-recorded telephone calls, and federal law prohibits a computer from calling a cell phone.    People who have only cell phones and not land lines tend to be younger and more likely to be minorities than people who have only land lines.    It also appears that some polling organizations do not use Spanish-language interviewers, and that might produce a small but significant bias in critical states such as Florida and Colorado.

4.   Some commentators predicting a Romney victory pointed to the traditional rule in politics that undecided voters break late against the incumbent.   That traditional rule did not apply in 2012.   In fact, exit polls showed that most of the 9 percent of the voters deciding in the last few days went for Obama.       

5.   Romney led in many of the polls (and in the exit polls) among independents, and some commentators predicting a Romney triumph cited the traditional rule in politics that the candidate who wins independents wins the election.   Independents did go for Romney--the exit polls showed that Romney won independents by only 5 points, although that was a smaller margin than the Romney campaign was counting on.   But that 5-point advantage was also insufficient for Romney because of another problem with the traditional rule this year alluded to in Point 3 above--it is not true that independents are a group sitting equidistant between the two parties.   A number of self-identified independents are former Republicans who had stopped using that label.  As Josh Marshall has pointed out, a number of those newly self-identified independents were still likely to hold conservative views and may have stopped labeling themselves as Republicans out of a belief that the Republican Party favored too large a government.   That movement of Tea Party types away from describing themselves as Republicans weakened the predictive effect of the "independents control" rule.     

[November 11--Following a conversation with my son, this morning I updated this post and tweaked it for clarity.]

Alaskans, You Should Read This Before You Vote on the Constitutional Convention Question

Anchorage--

Proposition No. 1 on Alaska's ballot next Tuesday asks the voters to decide whether there should be a Constitutional Convention.   The Constitution itself requires that this question appear on the ballot every 10 years, and this is the year for that vote.

This is a deceptively simple question with big ramifications.   I have worked with Alaska Common Ground, an organization of which I am a board member, to develop a position paper on this issue.   Here is a link to it.

Alaska Legislative Candidate Discloses Apparent Bribe Attempt from VECO in 1996 Regarding Private Prison

Anchorage--

Richard Mauer of the Anchorage Daily News does it again, getting an Alaska State Senate candidate to reveal that in 1996 he was offered engineering contracts and "a whole bunch of money" for his re-election campaign to the Anchorage Assembly if the official would support the effort of the now-defunct oil-services giant VECO and other companies to build a private prison in South Anchorage.

The legislative candidate--Anchorage Republican and consulting engineer Bob Bell--told the newspaper that he turned down  the money and did not support the prison but also did not report this apparent bribery attempt to authorities.

Mauer's article includes this exchange:

"Told that the offer of an engineering contract in return for his support of the prison as an Assemblyman could be a crime, Bell replied:

'It is?'"

The Anchorage Daily News story also reports that Bell had released a list showing that the oil producer BP was the biggest client of Bell's engineering firm in 2011, and in fact had paid more than $1 million.  

These revelations have the potential of shaking up a State Senate race that is a critical campaign in the efforts of Gov. Sean Parnell and oil producers to engineer a majority in the State Senate friendly to Parnell's initiative to cut taxes on oil production in an attempt to stimulate that production. 

Tom Anderson Likely to Get Off Probation Early

Anchorage--

Federal probation authorities have made an unopposed request that ex-Alaska State Rep. Tom Anderson be released early from probation.    Richard Mauer of the Anchorage Daily News has the report on the request, which would shave about nine months of Anderson's sentence based on the former Anchorage Republican legislator's compliance with the terms of his supervised release, including a substance abuse program.

It is always seemed odd in some moral sense that Anderson--who is obviously not the most culpable figure in the federal probe into Alaska public corruption--has served the most severe sentence of any defendant in the cases arising from that investigation. 

How the Feds Started Investigating Ted Stevens and Moved Toward an Indictment

Anchorage--

Here is the next installment of my series of columns on the Ted Stevens case in the Alaska Bar Rag.   This latest piece will appear in the edition of the official publication for the Last Frontier's lawyers that is published this month.    

How the Feds Started Investigating Ted Stevens and Moved Toward an Indictment

by Cliff Groh

Our understanding of the Ted Stevens case has grown substantially in the past several months from the U.S. Department of Justice’s Office of Professional Responsibility (“OPR”) report on misconduct in that prosecution, which comes on the heels of the report of the court-appointed special counsel (“the Schuelke report”).  

There is so much in the record now about the Justice Department’s development of the indictment against Ted Stevens, in fact, that this piece—the second in a series of offerings on this highly significant case—is only the first installment of my columns on the charging decisions in that case. 

The following analysis presents facts and opinions based on the more than 2,000 pages contained in those reports and the responses and rebuttals to them.   This column also relies on information gained from my in-person coverage of the five-week Ted Stevens trial in Washington, D.C. in 2008, my continuing coverage of the post-trial litigation and other cases arising out of the “POLAR PEN” federal investigation into Alaska public corruption, and dozens of interviews with participants and observers.        

Contrary to what many Alaskans believe, a search of the record does not show a malevolent plot to prosecute Ted Stevens so as to remove him from the U.S. Senate for partisan reasons or to retaliate against him for some old personal slight.  The Justice Department’s handling of the case can be legitimately faulted on a number of levels—the timing was ill-advised, the organization was chaotic, the management was dysfunctional, and the discovery violations were deeply disturbing.    There does not appear, however, to have been an evil mastermind behind the charges against Ted Stevens.    My reporting and analysis backs up the reporting of the Wall Street Journal and the Washington Post in pieces published at the time of the collapse of the Ted Stevens prosecution in April of 2009 regarding the absence of what the latter newspaper called “base political motivations.”  

The Ted Stevens Case Grows Out of Operation Polar Pen, and Operation Polar Pen Starts with Private Prisons

Let’s walk through the process that brought the charges.   The investigation that brought down Alaska’s most important public official began not with an examination of a U.S. Senator’s home renovations and his mandatory annual disclosure forms.    Instead, the probe that led to the prosecution of Ted Stevens started five years before his indictment as an investigation into private prisons.   In the dry words of the OPR report, the U.S. Attorney’s Office in Anchorage opened that corrections-focused investigation in July of 2003 “after the FBI developed information that an Alaska private prison company and a lobbyist were corruptly influencing state legislators.”    In a nod to the Last Frontier correctional origins of the investigation, the probe was dubbed “Operation Polar Pen.”

The investigation began with the work of an FBI agent named Mary Beth Kepner.   Her blond hair and trim physique made her look a lot more like a soccer mom than one of the grim-faced feds famous from the days of J. Edgar Hoover.   (Indeed, her achievements as a college soccer goalie still live on the Internet.)   Starting in Philadelphia—where she investigated complex white-collar and organized crime cases—Kepner had been with “the Bureau” for more than 10 years when she opened Polar Pen while working in the FBI’s small Juneau office.   

The investigation grew in depth and scope after the federal government got Frank Prewitt—a former Alaska Commissioner of Corrections turned private prison lobbyist and consultant for Texas-based Cornell Companies—to become a cooperating witness.  Prewitt started recording (“wiring up”) on various Alaskans and provided information that allowed federal investigators to get wiretaps on telephones.    (Setting aside whatever immunity Prewitt’s cooperation got him for his own potential exposure as a defendant, it is striking that Prewitt received $200,000 from the federal government for his work; it is indeed odd that Prewitt couldn’t find room to mention that payment in a 167–page book he wrote about his experiences as an informant.)         

The Justice Department’s Top Corruption Fighters Get on the Case

As Polar Pen ballooned, the lawyers working on the probe changed.    The Anchorage-based U.S. Attorney’s Office started receiving assistance in June of 2004 from the Justice Department’s Public Integrity Section.    Given that the Public Integrity Section soon came to direct all the prosecutions growing out of the Polar Pen probe—including the Ted Stevens case—a little examination of that unit is in order.

The Public Integrity Section was founded in 1976 on a wave of reforms following the Watergate scandals.    By its official mission, it “oversees the federal effort to combat corruption through the prosecution of elected and appointed public officials at all levels of government.”    Staffed with about 30 attorneys, the Public Integrity Section has had some high-profile successes.    Notable achievements included the Abscam investigation in the late 1970s and early 1980s (which led to the convictions of six Members of Congress) and the more recent probe into super-lobbyist Jack Abramoff (which has led to the conviction of more than a dozen people, including a Member of Congress and several executive branch officials and Congressional staff members).     

The Public Integrity Section had traditionally been known as an elite outfit and a breeding ground for stars like Attorney General Eric Holder and Reid Weingarten, one of a number of the unit’s lawyers who went on to a well-compensated career as a criminal defense attorney for the rich and famous.   

By 2004, however, the Public Integrity Section was in the midst of some turmoil.  Heavy turnover dogged the section during most of the 2000s, with the New York Times finding that only a quarter of the prosecutors who had been with the unit at the beginning of President George W. Bush’s tenure remained there at the end.   

The comings and goings were particularly frequent at the unit’s top.   The Washington Post reported in April of 2009 that the Public Integrity Section had had five heads in the past six years.  

Nick Marsh Comes to Probe Alaska Corruption

The lead attorney on the ground for the Public Integrity Section—Nicholas “Nick” Marsh—was new to his job as well, and his part in this story is important enough that it’s worth sketching out his background.   A slender and intense man in his early 30s when he began work on the Polar Pen probe in 2004, Marsh had only become a prosecutor about a year before he started traveling back and forth between the “Main Justice” headquarters in D.C. and Alaska.   

The boyish-looking Marsh had been a high-flyer in his relatively short life.  After clerking for Fairbanks-based Judge Andrew Kleinfeld of the Ninth Circuit Court of Appeals, the native Kentuckian had worked for two old-line law firms in New York City, rising to junior partner at the second.   

Marsh wanted to be a prosecutor, however, reflecting a passion for public service and a strong impulse to mix it up.   That last quality showed up in his lettering in lacrosse in college, a fact at odds with the wonky vibe he displayed in court.   He joined the Justice Department in 2003 and was assigned to the Public Integrity Section in the fall of that year.   After he completed a six-month detail in the Washington, D.C. U.S. Attorney’s Office, Marsh’s supervisors in the Public Integrity Section put him on Polar Pen.  

Marsh’s assignment on the Last Frontier was definitely not full-time, as the young attorney juggled a variety of cases around the country.   The new hire impressed his bosses by handling three appellate cases his first year, according to the National Law Journal.    Marsh also worked in 2004 on the Mississippi-based prosecutions flowing out of fraud in lawsuits involving the drug fen-phen, and he was on the government’s courtroom team at a 2005 trial in New Hampshire over a Republican campaign official’s involvement in jamming the phones on a Democratic Party get-out-the-vote drive.   

The Justice Department approved a partial recusal of the Anchorage-based U.S. Attorney’s Office in September of 2004 that gave Marsh a particularly big role in the Polar Pen probe.   While giving four lawyers from that office the job to “monitor, manage, and direct the day to day operation” of Polar Pen, the Deputy Attorney General simultaneously assigned the Public Integrity Section “overall responsibility” for the probe, including “investigative and prosecutorial decisions.”

Bolstered by more than 17,000 intercepted conversations caught on wiretaps, the Polar Pen probe into Alaska public corruption expanded to cover allegations that VECO executives corruptly influenced state legislators over the construction of a natural gas pipeline and related petroleum tax legislation.    Polar Pen progressed to the point that federal officials investigated at least 19 people, according to a filing submitted by one of the prosecutors involved in the investigation, while Alaska journalist Bill McAllister reported in 2007 after news broke of the probe that multiple sources had told him that it would result in the indictment of 26 people.     

Polar Pen Zeroes in on Senator Ted Stevens

Back when Polar Pen was still covert, the probe started focusing on its most prominent target, U.S. Sen. Ted Stevens, an Alaska icon and Capitol Hill powerhouse who had held his Senate seat for more than three decades.   

The record isn’t clear about when the investigation began that focus on Ted Stevens.  Some observers thought that the Los Angeles Times started that ball rolling with two articles in 2003.   The first focused on the links between the lobbying and consulting clients of Ted Stevens’ son Ben and legislative assistance provided by Ted Stevens to those clients, including VECO.    Another LA Times story published that year headlined “Senator’s Way to Wealth Was Paved with Favors” laid out how Ted Stevens became a millionaire “thanks to investments with businessmen who received government contracts or other benefits with his help.”     

At Ted Stevens’ trial, prosecutors introduced evidence of assistance that the Senator had provided to VECO on a Pakistani pipeline project referenced in one of those newspaper articles; on the other hand, federal investigators never interviewed Chuck Neubauer, the journalist who did most of the reporting and research on the two Times stories.  

Another straw in the wind comes from a statement in a Wall Street Journal article by reporter Evan Perez in 2009 that the Ted Stevens case “was investigated for more than four years.”    Given that the indictment and trial both occurred in 2008, that would put the start of the federal probe into Ted Stevens at no later than 2004.

The Department of Justice’s official history—the OPR report—says that it was a monitored telephone conversation between VECO executives Bill Allen and Rick Smith on October 19, 2005 that shifted the spotlight of the federal probe onto Ted Stevens.    In that call, Allen and Smith discussed benefits VECO had provided to Ted Stevens in the form of renovations at Stevens’ Girdwood residence.    The OPR report then states:   “Thereafter, the government obtained additional information about the Girdwood renovations, noting that Stevens had not reported the benefits on his United States Senate Public Financial Disclosure Reports for the corresponding years.”

Whatever the precise date federal investigators started looking hard at Ted Stevens, it is clear that very shortly after that telephone call the leadership of the Anchorage-based U.S. Attorney’s Office wanted no part of the probe.    

On November 5, 2005, the Justice Department approved what the OPR report describes as an “office wide” recusal of that office based on the office’s concern “[g]iven the high degree of sensitivity of such an investigation and the controversy likely to be engendered by investigating such individuals in the close knit Alaskan community.”    

This recusal left the Public Integrity Section in charge of the federal probe into Alaska public corruption.   Despite that “office wide” recusal, the investigation also proceeded with the assistance of two Anchorage-based Assistant U.S. Attorneys, Joseph Bottini and James Goeke. 

In practice, this recusal made Marsh Polar Pen’s “top dog,” as veteran Anchorage attorney Jeff Feldman told New Yorker writer Jeffrey Toobin.  This development meant that Bottini—who had been a prosecutor for approximately 20 years—was effectively supervised on POLAR PEN by a lawyer with about 10 percent of his experience as a prosecutor.    

The Polar Pen prosecution team increased to four in 2006 with the addition of Edward Sullivan, who was immediately assigned to the probe upon his joining Public Integrity.   (Confusingly, three unrelated Sullivans played significant roles in the Ted Stevens case—there was Edward Sullivan the prosecutor, Emmet Sullivan the trial judge, and Brendan Sullivan the chief defense counsel.)   Edward Sullivan had been a lawyer for 10 years when he started on Polar Pen, and he—like Marsh and Goeke—had clerked for a federal judge.    (It is a telling social commentary that the OPR report details federal clerking experience of these three lawyers while omitting Bottini’s experience clerking for a state court judge.)    Despite Edward Sullivan’s impressive resume, his prosecutorial experience was zero.

The Grand Juries Hear Evidence, While a Logical Source of Help Goes Largely Untapped

The Polar Pen team presented evidence regarding Ted Stevens to grand juries between November of 2006 and June of 2008.   One grand jury sat in Anchorage, and the other sat in Washington, D.C.   Despite the use of the grand jury in the nation’s capital, the Washington, D.C. U.S. Attorney’s Office had no significant involvement in the Ted Stevens case.

This was too bad for the prosecution, particularly since the Justice Department was aiming for a possible trial in Washington.    As Washington Post reporter Carrie Johnson pointed out after the government’s case collapsed in 2009, the government’s path could have been smoother if the Washington U.S. Attorney’s Office had been part of the case, thereby adding “players who were familiar with the courthouse and the personality of the trial judge.”   Such a role for that office would have not been at all unprecedented in a major public corruption case.   The Washington U.S. Attorney’s Office ran the prosecution of U.S. Rep. Dan Rostenkowski (D.-Illinois), the long-time chairman of the tax-writing House Ways and Means Committee, that produced his guilty plea in 1996 and a sentence that put him in federal custody for 17 months.      

There are varying explanations for the lack of significant participation by the Washington U.S. Attorney’s Office in the prosecution of Ted Stevens.    That 2009 Washington Post story reported that prosecutors in that office “were consulted about the Stevens case starting in 2006 but declined to participate, thinking that the charges were shaky, according to sources familiar with the discussions.”    That article also stated that sources said “The assistant U.S. attorneys also considered overly aggressive the prosecutors' early plan, later abandoned, to get a warrant to search the lawmaker's D.C. area home….”

On the other hand, the OPR report suggests that it was the competition for glory that blocked the participation of the Washington U.S. Attorney’s Office, not that office’s perception that the Polar Pen team was on the wrong track with Ted Stevens.   

Glen Donath, an Assistant U.S. Attorney from the Fraud and Public Corruption Section of the Washington U.S. Attorney’s Office, did attend at least one grand jury session in Washington in April of 2007 regarding Ted Stevens.   The Public Integrity Section ran him off the case quickly, however.   Donath—who had previously served on the team defending President Clinton at the impeachment trial—ended his slight participation in the Ted Stevens case after Public Integrity officials communicated to him that he was not needed and that any role he would play would be minor and merely an accommodation to his superiors.    Edward Sullivan told OPR that Public Integrity Section Chief William Welch spelled it out more bluntly, conveying the message that Donath was “coming in late” and would be viewed as a “fifth wheel.”

Charges the Justice Department Considered

Contemporaneous media reports in the Anchorage Daily News, the Associated Press, and Roll Call showed that the federal government conducted a wide-ranging investigation of Ted Stevens and his close associates.   As detailed in that coverage and in interviews, this probe included an examination of legislative assistance Ted Stevens had provided that had benefitted his son Ben (who was by 2006 President of the Alaska State Senate), Ted Stevens’ former long-time legislative aide Trevor McCabe, and Anchorage businessmen who had engaged in real estate deals with Ted Stevens that the Senator bragged about publicly.   As part of this investigation, the FBI Interviewed former state legislator and activist Ray Metcalfe, who had accumulated evidence to support allegations regarding real estate transactions and fisheries legislation.   The Justice Department also perceived early on in the investigation that tax charges could be brought against Ted Stevens, and the OPR report says that IRS agents remained part of the prosecution team through the Ted Stevens trial.

In the end, however, the prosecution’s charges did not relate to real estate transactions, fisheries legislation, or income taxes, and the word “earmark” appeared nowhere in the 28-page indictment issued on July 29, 2008.   

Instead, the prosecution focused during the three-month period before the issuance of the indictment on five charges:  

--Bribery under 18 U.S. Code Subsec. 201(b)(2);

--Illegal gratuities under 18 U.S. Code Subsec. 201(c)(1)(B);

--Honest-services fraud under 18 U.S. Code Secs. 1341-1351;

-- Conversion of services of government employees for personal use under 18 U.S. Code Sec. 641; and

--False statements, by concealment under 18 U.S. Code Subsec. 1001(a)(1) and by omission under 18 U.S. Code Subsec. 1001(a)(2).

Except for the potential conversion charge—which concerned Ted Stevens’ alleged use of Senate staff members to pay the personal bills of himself and his family—all these potential charges would have related to things of value received by Ted Stevens and not reported on mandatory annual Senate disclosure forms.   Most of those things of value involved renovations to the Senator’s Girdwood home provided by Bill Allen and/or VECO. 

There’s a common problem with the three charges listed above regarding Ted Stevens.    Conviction under the bribery or illegal gratuities statutes requires “official acts” in connection with the crimes.   Honest-services fraud—a favorite arrow in the federal prosecutor’s quiver before the U.S. Supreme Court sharply restricted the reach of the statute in 2010—does not explicitly require a quid pro quo between the receipt of a specific thing of value and a specific official act.   With honest services fraud, prosecutors have tended to look to prove the defendant received a stream of things of value in exchange for a series of official acts.       

At least one line prosecutor pushed hard for the inclusion of one or more of these counts in the Ted Stevens indictment.     Higher-ups at the Department of Justice, however, seemed to perceive that Stevens had delivered so much for so many Alaskans over four decades that it was difficult to say that the Senator was motivated by gifts to do official acts.    Those supervisors appeared to understand that it was difficult to throw a rock in any populated place on the Last Frontier and not hit somebody who had benefitted from an official act of “Uncle Ted”—whether it was a local appropriation or intervention with the federal bureaucracy—and that the great majority of those who had received help from the Senator had never given him a penny in campaign contributions, much less gifts (and had certainly never given his son Ben a lobbying or consulting contract).

It would have probably fortified the Justice Department brass in their rejection of bribery/illegal gratuities charges/honest services fraud charges against Ted Stevens if they had been aware of a conversation the lead FBI agent on Polar Pen had with a journalist in May of 2008.   Mary Beth Kepner met with reporter Tony Hopfinger at a coffee shop in midtown Anchorage.    This meeting occurred more than nine months after the FBI had executed a search warrant on the Senator’s Girdwood home and in the final throes of the Justice Department’s decision on the indictment.   In the conversation—later recounted in Crude Awakening, a book by Hopfinger and Amanda Coyne, and in a recent interview with Hopfinger—Kepner speculated that Allen had bribed Ted Stevens by renovating the Senator’s house.   The FBI agent then asked the reporter:   “What do you think the quid pro quo was?”

Given that this conversation occurred after the FBI had been investigating Ted Stevens for at least 2.5 years and in the last 90 days before the Justice Department announced the indictment, it was surprising that the lead FBI agent on the Ted Stevens investigation would at that point ask a reporter in a coffee shop for that reporter's opinion on a critical element of a case against Ted Stevens.    (Then again, Kepner was known for her ability to get people to tell her things, and playing dumb is one well-known way to do that.)

The prosecutors also considered a charge of conversion.   This charge would have been based on evidence that the Senator had for years arranged for Senate staff members to work on the Congressional clock to pay from his personal account his family’s personal bills—including his wife’s credit card bills, the family’s regular household bills, and the bills for the Senator’s participation in a horse racing partnership.  The 1994 indictment against another Congressional titan—Rep. Rostenkowski—had included a charge of conversion of federal funds based on the Congressman’s alleged use of Congressional staff members working on federal time to perform personal services for Rostenkowski.    As laid out in a 2007 article by John Stanton in Roll Call, Ted Stevens’ alleged use of a Senate staff member making more than $150,000 annually to serve as his “personal bookkeeper” substantially exceeded the occasional de minimis personal tasks some Senators asked of their own Senate staff.

Although Polar Pen’s line prosecutors expressed to their superiors in the spring of 2008 their belief that the evidence and the law supported a conversion charge against Ted Stevens, those lower-level lawyers advised against pursuing such a charge because it would significantly distract from a prosecution based on the Senator’s alleged falsehoods in his annual disclosure forms.    (The prosecution did use evidence that the above-described Senate staff member routinely paid Catherine Stevens’ department store credit card bills while cross-examining the Senator’s wife at his trial.)

Next:    The charges of failure to disclose required financial information that the Justice Department finally settled on

Cliff Groh is an Anchorage lawyer and writer who has worked as both a prosecutor and a criminal defense attorney.   He has blogged about the “POLAR PEN” federal probe into Alaska public corruption for years at www.alaskacorruption.blogspot.com, which in its entry for May 14, 2012 features an expanded and updated list of disclosures.    Groh’s analysis regarding the Ted Stevens case has appeared in media as diverse as C-SPAN, the Los Angeles Times, Alaska Dispatch, the Anchorage Daily News, and the Anchorage Press.    The lifelong Alaskan covered the five-week Ted Stevens trial in person in Washington, D.C. in the fall of 2008.   He welcomes your bouquets, brickbats, tips, and questions at cliff.groh@gmail.com.   

More of My Writing on Another Alaska Topic

Anchorage--

Entertaining relatives the past two weeks has slowed down my distribution of this news.   A chapter on the Prudhoe Bay Curve and Alaska's fiscal system I wrote is in a book published this month by Palgrave Macmillan.    It is the second in a series of two academic books published this year on the Permanent Fund Dividend.    The first book was published in April, and it included three chapters I co-authored.    Here is a link to the book published this month:

http://www.amazon.com/Exporting-Alaska-Model-Permanent-Guarantee/dp/1137006595 

Tomorrow Is Ted Stevens Day in Alaska--Get Outside and Enjoy It

Anchorage--

Tomorrow is the fourth Saturday in July, and that means under a law enacted last year it is officially Ted Stevens Day.   

Confessed Briber Rick Smith to Get Off Probation Two Years Early

Anchorage--


Former VECO Vice President Rick Smith is scheduled to get off probation after only one year despite being ordered to serve three years of probation as part of his sentencing for his role in Alaska's biggest public corruption scandal.   Anchorage Daily News reporter Richard Mauer reports that Smith's probation officer has labeled him "a low risk to re-offend."

Former Head of DoJ's Public Integrity Section Calls for Discovery Reform While Observing that He Was Not Responsible for the Discovery Failures in the Ted Stevens Case

Anchorage--


William M. ("Bill") Welch II, the head of the U.S. Justice Department's Public Integrity Section during much of the investigation and all of the trial of U.S. Sen. Ted Stevens, has co-authored a commentary about the law regarding the process by which prosecutors provide evidence to the defense in federal criminal cases.   This process of sharing evidence is called "discovery."   


This piece by Welch and his lawyer has two points:


1.  The law of discovery in federal criminal cases should be reformed in ways that go beyond legislation proposed by U.S. Sen. Lisa Murkowski (R.-Alaska).    Welch urges changing the standards in the law to make relevance rather than materiality the focus in federal criminal discovery to "ensure more robust and complete discovery to the defense."


2.  The failures in discovery in the Ted Stevens case were caused by people above and below Welch in the Justice Department and not by Welch.   In Welch's telling, those people responsible for the failures in discovery include "the overworked prosecution team" led at the Ted Stevens trial by his own No. 2, Brenda Morris  (although Welch omits her name).     

Ted Stevens' Top Lawyer Complains of Insufficient Punishment for Prosecutors

Anchorage--


I am late to this because it appeared last week when I was out admiring the beauties of Prince William Sound and marveling at a giant snow pile in Valdez (more than 20 feet high as of last Friday).   Brendan Sullivan, Ted Stevens' chief defense lawyer, offers his analysis of the reports on prosecutorial misconduct against his client. 

Two Assistant U.S. Attorneys Appeal Suspensions Issued in Probe of Ted Stevens Prosecution

Anchorage--


As expected, Joseph Bottini and James Goeke, the two federal prosecutors facing suspensions in the Justice Department's investigation into the botched handling of the Ted Stevens case, have sought review of those suspensions.   The two government lawyers have filed appeals with the U.S. Merit System Protection Board.    Although neither of the appealing attorneys has filed a substantive pleading with this appeals board, expect two of the arguments to be that (1) it was unfair to discipline these two line prosecutors while letting their superiors off the hook for the higher-ups' role in the errors and omissions and (2) it was procedurally improper to take the decision on the discipline away from the   attorney who initially reviewed the matter and recommended no discipline.

The Big Questions in the Ted Stevens Case: Part I

Anchorage--

Here is my latest column for the Alaska Bar Rag, the quarterly publication for the Last Frontier's lawyers.


The Big Questions in the Ted Stevens Case: Part I



Cliff Groh


Confusion and misinformation continue regarding the Ted Stevens case, even in the wake of the release in March of a court-appointed special counsel’s report on the prosecutorial misconduct that produced the case’s dismissal and a debate about how discovery works in federal criminal cases.


Following an investigation that lasted well over two years, the report found that “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’ defense and his testimony, and seriously damaged the testimony and credibility of [Bill Allen,] the government’s key witness.” The prosecutors under scrutiny acknowledge that failures occurred in discovery, but deny any intent to conceal. Still to come is a report by the Office of Professional Responsibility (OPR), the Department of Justice’s internal watchdog unit, on the results of its own probe, and the OPR report might lead to sanctions for some of the prosecutors involved in the trial.


The release of the special counsel’s report written by Washington, D.C. attorneys Henry Schuelke and William Shields has sparked renewed interest in what occurred in this landmark case. This article offers answers to the most frequently asked questions about the bungled Stevens prosecution and the fall-out. What follows is based on my in-person coverage of the five-week trial in Washington, D.C. in 2008, my continuing coverage of the post-trial litigation and other cases arising out of the “POLAR PEN” federal investigation into Alaska public corruption, my review of the 525-page special counsel’s report and the hundreds of pages of responses and rebuttals it generated, and dozens of interviews with participants and observers. This series of questions and answers runs in rough chronological order, and it is the first installment of a series that will appear in the Alaska Bar Rag.


Why do people care so much about this case, more than three and a half years after the trial and almost two years after Stevens’ tragic death in a plane crash in 2010?


Ted Stevens was an Alaska icon and a powerhouse in the U.S. Senate. The scrappy lawyer won seven straight elections for the Senate as a Republican after his appointment to a vacant seat in 1968; the noted political analyst Michael Barone pointed out that at the height of his popularity Stevens carried every precinct in the state. Serving on the Senate Appropriations Committee for more than three decades and as chairman for more than six years, “Uncle Ted” showered so much federal funding on our young state that Alaska newspapers routinely used the term “Stevens money” without quotation marks to describe Uncle Sam’s projects and programs. As Stevens said in his farewell Senate address in 2008, “Where there was nothing but tundra and forest, today there are now airports, roads, ports, water and sewer systems, hospitals, clinics, communications networks, research labs, and much, much more.”


The legacy of the man tagged “the Alaskan of the Century” was more than the billions shipped from the federal treasury to the Last Frontier. Stevens played major roles in the enactment of the most significant Congressional measures affecting the 49th State. Those bills bearing the Stevens stamp included the legislation that created Alaska Native corporations (the Alaska Native Claims Settlement Act, or ANCSA), helped make Alaska’s fisheries sustainable, and allowed the construction of the Trans Alaska Pipeline System (TAPS). The Almanac of American Politics observed that “No other senator fills so central a place in his state’s public and economic life as Ted Stevens of Alaska; quite possibly no other senator ever has.”


The indictment in 2008 of Stevens on seven felony counts brought the first federal trial of a sitting U.S. Senator in more than 25 years. The case matched a prosecution trial team supervised by the Justice Department’s elite Public Integrity Section against a squad captained by the $1,000-per-hour Brendan Sullivan from the prominent Washington, D.C. firm of Williams & Connolly, renowned for its scorched-earth approach to white-collar criminal defense. The jury returned guilty verdicts on all counts that the trial judge overturned in the wake of post-trial revelations of the prosecution’s discovery failures. Along with triggering multiple investigations of prosecutorial misconduct, the collapse of the case brought calls for reform in the practices and rules governing discovery in federal criminal cases.


Looking at the trial provides lessons for litigators and those lawyers who actually try cases, and review of the post-trial litigation gives tips for attorneys in all areas of practice.


What was the nature of the relationship between Ted Stevens and Bill Allen, and why did the two men get so close?


The indictment against Stevens relied heavily on the Senator’s failure to report his receipt of things of value from Bill Allen and VECO, the Alaska-based oil-services and construction company that Allen built into a multi-national giant with close to a billion dollars in annual revenues. By the late 1990s, Stevens was very personally close to Allen. This relationship went way beyond discussions of politics or petroleum policy on long airplane trips and fishing trips with others.


Ties between Stevens and Allen got to the point that the two of them went on several one-on-one vacations the two men called “Boot Camps.” In these regular get-togethers, Stevens and Allen went off in the desert by themselves to try to shed a few pounds by taking walks and drinking wine in lieu of hard liquor. These “Boot Camps” continued after Allen suffered a brain injury in a 2001 motorcycle accident. The last of these retreats appears to have occurred in early 2006, less than eight months before Allen became a cooperating witness for the Justice Department against Stevens and a number of other defendants charged in cases arising out of the “POLAR PEN” probe.


While the motivations of Allen—a business titan with big North Slope contracts and the political point man for the major oil producers in Alaska—seem obvious in this relationship, Stevens’ reasons for getting so close to Allen are murkier. A pilot for the Army Air Corps who later graduated from Harvard Law School, Stevens’ closest friends tended to resemble him in being World War II veterans who became attorneys. Allen, on the other hand, was more than 13 years younger than Stevens and was never considered a candidate to become a lawyer. The rough-hewn welder-turned-tycoon was eight years old when Japanese officials signed the Instrument of Surrender on the battleship Missouri and 15 years old when he dropped out of high school. Moreover, Allen’s reputation was unsavory long before he admitted bribing state legislators and long before allegations about him engaging in sexual relations with underage girls became public (allegations which he has denied and for which he has not been charged). As longtime Alaska journalist Michael Carey noted of Allen, “You didn’t have to smell sulfur to know the devil was in the room.”


Stevens’ tight relationship with the multimillionaire magnate might stem partly or wholly from the Senator’s admiration for a rich self-made Alaskan, and observers have noted Stevens’ willingness as a lawyer to associate himself with people—including clients—who would not get a universal seal of approval. Those who prosecuted Stevens suggested that in becoming so personally close to the long-time VECO CEO Stevens also wanted to cozy up to an oilpatch insider who substantially funded Republican political campaigns, provided hundreds of thousands of dollars in lobbying and consulting income to his son Ben, and was eager to give the powerful U.S. Senator valuable gifts.


What charges did the federal government bring against Ted Stevens?


The Department of Justice filed on July 29, 2008 an indictment of Ted Stevens charging seven felony counts of failing to report gifts and liabilities on disclosure forms required annually from each U.S. Senator. Six counts covered the annual reports filed for the six calendar years 2001 through 2006, and a seventh count alleged a scheme by Stevens running from calendar year 1999 through calendar year 2006 to conceal his receipt of things of value from Allen and VECO. The mental state in the six counts for individual years was “knowingly and willfully,” and the mental state in the count for the alleged multi-year scheme was “knowingly and intentionally.”


The Ethics in Government Act sets a low dollar threshold for reporting gifts. The law required the disclosure of gifts from a single source if the aggregate value of the items received in a particular year exceeded a particular dollar value. For the calendar years 1999 through 2002, the requirement was to disclose gifts over a value of $260; for calendar year 2002, that dollar value was $285; for calendar years 2004 through 2006, it was $305.


In addition to charging Stevens with failure to report gifts in all seven counts, the indictment also charged the Senator with failure to report liabilities (debts) in each of the six counts tied to individual years. For each of those six years, the law required the disclosure of liabilities of more than $10,000 owed at any point in time during the calendar year. The prosecution’s theory in the indictment was that if the receipt of a particular thing of value was not reported as a gift for the calendar year in which it was received, that transaction was instead a loan that needed to be reported as a liability for that year and subsequent years.


The indictment alleged that Stevens received more than $250,000 worth of benefits that he failed to report. In terms of monetary value, the great bulk of the gifts and liabilities alleged in the indictment came from Allen and VECO as renovations and furnishings at a home in Girdwood owned by Stevens.


The indictment alleged that Stevens also received unreported gifts from others, including Alaska businessmen Bob Penney and Bob Persons, both friends of Stevens. At trial, those gifts turned out to include a stained glass window and a runty husky puppy alleged to have come from Penney as well as a $2,695 massage chair from Persons.


Questions Left to Answer


Why did the Department of Justice charge Ted Stevens with the particular charges in the indictment?


Why did the Justice Department in the administration of Republican President George W. Bush charge the longest serving Republican Senator ever less than four months before Election Day in his hotly contested race for another six-year Senate term?


Who made the decision to prosecute Stevens?


Who was in charge of the prosecution team at the trial?


How did there end up being more than twice as many defense attorneys as prosecutors working on the trial?


What were the arguments, strengths, and weaknesses of the prosecution and defense at the trial?


Why did Ted Stevens testify on his own behalf, and what effect did that decision have on the verdicts?


Why did the jury bring back guilty verdicts on all counts?


How did the prosecution fail in discovery, and why has there been no prosecution of the prosecutors identified as being responsible for the discovery violations?


How would the defense have used the evidence held back in the discovery violations to seek an acquittal on all counts?


Even if the prosecution had provided the defense all the discovery to which it was entitled, what is the likelihood that the jury would still have returned guilty verdicts on some or all of the counts?

----------------------


Cliff Groh is an Anchorage lawyer and writer who has worked as both a prosecutor and a criminal defense attorney. He has blogged about the “POLAR PEN” federal probe into Alaska public corruption for years at www.alaskacorruption.blogspot.com, which in its entry for May 14, 2012 features an expanded and updated list of disclosures. Groh’s analysis regarding the Ted Stevens case has appeared in media as diverse as C-SPAN and the Anchorage Press. The lifelong Alaskan covered the five-week Ted Stevens trial in person in Washington, D.C. in the fall of 2008. He welcomes your bouquets, brickbats, tips, and questions at cliff.groh@gmail.com.