Wednesday, December 23, 2009

Year-End Roundup of Comings, Goings, and Doings in POLAR PEN [UPDATED]


Disgraced briber and former VECO executive Rick Smith is set to enter prison next month to start serving his sentence. As reported by Jill Burke of, ex-VECO Vice President Smith has been ordered to prison starting January 12. Smith will begin serving his 21-month prison sentence at Sheridan Federal Criminal Institute in Oregon, a medium-security facility that also holds ex-State Rep. Tom Anderson (R.-Anchorage) and also held former Rep. Pete Kott (R.-Eagle River) until Kott’s release this summer while a judge sorts out allegations of prosecutorial misconduct.

Smith’s former boss Bill Allen is still in limbo as to when his three-year sentence starts, as Richard Mauer has reported in the Anchorage Daily News that federal officials are still figuring out where the multimillionaire former VECO CEO will go. [SEE BELOW FOR UPDATE.]

Reaching even farther back to catch up, the New York Times has reported that Department of Justice attorney Nicholas Marsh has been working in his new Department of Justice job to get filmmaker Roman Polanski extradited to the U.S. to face sentencing for having sex with a minor more than three decades ago.

A former prosecutor of ex-U.S. Sen. Ted Stevens and other defendants in the federal probe into Alaska public corruption, Marsh left DoJ’s Public Integrity Section after the Ted Stevens prosecution collapsed in April. The lawyer was re-assigned to the lower-profile Office of International Affairs to handle extraditions, including that of the movie director who has long been a fugitive in Europe.

Some might detect irony here: As the former go-to guy on the ground in Alaska on the POLAR PEN investigation, Marsh spent a lot of time with Bill Allen, who for years has fought off allegations that he had sex with underage girls.

Merry Christmas.

UPDATE--Jill Burke of has kindly pointed out that her publication has previously reported that Bill Allen is going to federal prison on January 12, the same day as Smith. In a story that I had seen and then somehow missed upon looking again, the Alaska Dispatch reported that Allen is headed for Terminal Island, a low-security facility in California set up to handle prisoners with medical issues.

Tuesday, December 15, 2009

Feds Used "Honest Services Fraud" Statute in Half of the "POLAR PEN" Cases


Readers have asked what effect an elimination or trimming back of the “honest services fraud” statute at issue in Bruce Weyhrauch’s appeal on which the U.S. Supreme Court heard oral argument last week would have on the prosecutions in the Alaska investigation into public corruption.

Twelve people have been charged criminally in this investigation. Of those 12, six have been charged under the statute being challenged. In addition to former State Rep. Weyhrauch (R.-Juneau), those six are: former State Rep. Pete Kott (R.-Eagle River), who was acquitted of that charge at trial; Jim Clark, former Chief of Staff to Gov. Frank Murkowski; Bill Weimar, former private prisons magnate; former VECO CEO Bill Allen; and former VECO Vice President Rick Smith. By the same token, former U.S. Sen. Ted Stevens, former State Rep. Vic Kohring (R.-Wasilla), former State Rep. Beverly Masek (R.-Willow), former State Sen. John Cowdery (R.-Anchorage), former State Rep. Tom Anderson (R.-Anchorage), and former lobbyist Bill Bobrick never faced an honest services fraud charge.

Of those six, only Weyhrauch has neither pleaded guilty or been tried already. The jury convicted Kott of other crimes while acquitting him of the charge of honest services fraud; whatever else happens while U.S. District Judge John Sedwick sorts out the allegations of prosecutorial misconduct in the trial, the acquittal means that Kott can’t be retried on that count. Allen and Smith pleaded guilty to multiple counts along with a single count each of conspiracy to commit honest services fraud as well as other crimes, and for a variety of reasons are unlikely to appeal based on a favorable U.S. Supreme Court ruling. Weimar has served the prison portion of his sentence, and also seems an unlikely candidate to try to rely on such a ruling. Clark has pleaded guilty to a single count of conspiracy to commit honest services fraud, and depending on the U.S. Supreme Court’s decision on the statute he might have a defense.

The uncertainty over the legal standing of the honest services fraud statute might also be affecting the Alaska corruption investigation by causing the Department of Justice to hold off on adding to the number of defendants. A reader has pointed out that this uncertainty may have helped block the prosecution against former State Sen. Jerry Ward (R.-Anchorage), whose unsuccessful 2004 legislative campaign has been identified in media accounts as the recipient of illegal campaign contributions from Weimar. The questions hanging over the future of the honest services fraud statute may also contribute to the reluctance of the feds to prosecute former State Senate President Ben Stevens (R.-Anchorage) and U.S. Rep. Don Young.

Sunday, December 13, 2009

What You Should Be Reading this Morning


Richard Mauer has a long and extensively reported article in the Anchorage Daily News this morning on the allegations of Bill Allen's crimes with underage girls and attempts to cover them up. The story covers the tortuous history of investigations into those matters and comes complete with a photo gallery and a timeline graphic (the latter apparently not available on-line). In addition to mining documents released in the Ted Stevens and Pete Kott cases, Mauer gets a former teen-aged paramour and her brother on the record with some juicy quotes. The article is called "Alleged cover-up threatens Allen's credibility," and you can find it at on the Internet.

Saturday, December 12, 2009

Karen Loeffler Sworn in as U.S. Attorney for Alaska


The District of Alaska got a new top lawyer yesterday, as Karen Loeffler shed the “interim” tag at a ceremony featuring several figures in the Alaska public corruption investigation.

It was odd to see Bill Allen’s lawyer Bob Bundy and Frank Prewitt’s attorney Mike Spaan sitting in places of honor in the jury box in the jam-packed federal courtroom, but their prominent roles showed how our system works. People like Allen and Prewitt in big trouble with federal prosecutors often reach for former U.S. Attorneys if they can afford those pricey counsel, particularly if they want to make deals.

Spaan hired Loeffler more than 20 years ago, and Bundy also served as her boss in the U.S. Attorney’s Office in the 1990s. I have apparently known her even longer, as she and I worked together in 1986-87 in the Anchorage District Attorney’s Office.

Another person I met while working at the D.A.’s Office spoke at length in what is formally known as an “investiture.” Joe Bottini long ago left his post as a law clerk to become an Assistant U.S. Attorney, and yesterday he read the remarks by two other former U.S. Attorneys who would not make the ceremony. Bottini is better known to readers of this blog as one of the prosecutors in the “POLAR PEN” federal investigation into Alaska public corruption, most notably on the trial team in the five-week trial against then-U.S. Senator Ted Stevens. Standing at a lectern saying nice things about his boss was certainly a more pleasant experience than spending hours and hours with his Washington, D.C. attorney defending him in the ongoing probes of prosecutorial misconduct in the Ted Stevens case.

As noted by the speakers, intelligence, hard work, and practical instincts helped Karen Loeffler reach a long-held goal. Some observers also mentioned her fanatic interest in the outdoors, but it worth teasing out how the lifelong dedication to physical activity helped this former Dartmouth College tennis captain and varsity downhill skier become such a trial lawyer and litigator.

Litigation has been called a blend of sports, theatre, and politics, and it seems to help in litigation to have a background in playing sports. A lot of good trial prosecutors, in particular, have backgrounds in football, hockey, or other physically aggressive activities.

To succeed consistently at any regulated contest, you’ve got to want to win, know how to win, and understand how to win within the rules. Participation in competitive sports imparts these lessons in memorable ways at an early age.

Wednesday, December 9, 2009

Public Forum on 90-Day Session Limit Thursday Evening


Admit it: You're reading this blog probably because you care about Alaska.

Tomorrow night you have a FREE chance to learn more and participate regarding public policy on the Last Frontier.

Alaska Common Ground presents a public forum Thursday (tomorrow) evening on the 90-Day Legislative Session Limit. The forum will address questions about the workings of that limit and the effects on public participation and deliberation.

It's all happening at the Wilda Marston Theatre at the Loussac Library at 3600 Denali in Anchorage. It runs from 7 p.m. to p.m., and will be moderated by long-time TV anchor John Tracy. Panelists will include Reps. Jay Ramras of Fairbanks and Paul Seaton of Homer as well as lobbyists Ray Gillespie and Pat Luby of AARP and Dave Donaldson of the Alaska Public Radio Network. Cosponsors are AARP, the League of Women Voters, AKPIRG, and Commonwealth North.

More information is available at on the Internet. I am a board member of Alaska Common Ground, and I hope to see you there.

Tuesday, December 8, 2009

A Big Test for a Big Weapon: The U.S. Supreme Court Hears Oral Arguments on "Honest Services Fraud" in Bruce Weyhrauch's Case


The federal investigation into Alaska public corruption has already helped elect Sarah Palin Governor, produced legislation that has brought the 49th State’s coffers $4 billion in extra oil tax revenues, led directly to the end of the 40-year U.S. Senate career of Ted Stevens, and generated controversy about the way federal prosecutors provide evidence to criminal defendants.

Now the “POLAR PEN” probe may help lead to a major change—or even the elimination—of a significant weapon the federal government uses to fight public corruption.

This morning the U.S. Supreme Court heard oral arguments on the case of ex-State Rep. Bruce Weyhrauch (R.-Juneau). The former legislator solicited a job with the oilfield-services company VECO and then allegedly took official actions—including changing his vote on an oil-tax matter VECO cared greatly about—without disclosing his interest to the legislature. A grand jury indicted Weyhrauch in 2007 for “honest-services fraud” as well as other crimes, but his trial was derailed when the District Court judge ruled that the prosecution could not introduce evidence of Weyhrauch’s failure to disclose his employment negotiations with VECO because no state law required a legislator to make such a disclosure.

(At this point I need to make my own disclosure: I have known Bruce Weyhrauch for almost 30 years and worked with him during the period I had probably the most fun ever on a job, although I have never discussed this case with him.)

Weyhrauch’s is one of three cases the Supreme Court has taken this year that concern the federal statute that makes it illegal to use the mails or other interstate communications systems for a scheme to defraud, including a scheme to “deprive another of the intangible right to honest services.”

Although brief and seemingly even modest, that law packs a powerful punch. The “honest services fraud” statute is a main—maybe the main—law the federal government uses to charge people with crimes related to public corruption. Other prominent public corruption cases involving this law include prosecutions of convicted uberlobbyist Jack Abramoff and former Illinois Gov. Rod Blagojevich, who still awaits trial.

The Justice Department has also employed the statute to go after a number of big-name corporate defendants, as shown by the Supreme Court’s decisions to hear the appeals of convicted media mogul Conrad Black and former Enron CEO Jeffrey Skilling. Black’s oral argument was also this morning—just before Weyhrauch’s—and Skilling’s will occur next spring.

Along with being important, this law is also highly controversial. Prosecutors and government watchdog organizations argue that the law is needed because it’s hard to prove that a public official took a specific official action as a quid pro quo for a specific bribe, and that without this law it would be difficult to eradicate the cozy culture of favors and gift-giving between public officials and lobbyists.

The Washington Post reported before the oral argument that the Citizens for Responsibility and Ethics in Washington (CREW) said the law is an "indispensable prosecutorial tool for fighting public corruption." (The newspaper also noted that CREW asserted that the feds need to be active in bringing public corruption cases against state and local officials because "state prosecutors may be reluctant to bring charges against their political allies or supporters.")

Critics, on the other hand, contend that the law is vague and overbroad—that is, it’s hard for anybody to know what is illegal. One of the most vocal critics of the statute is Supreme Court Justice Antonin Scalia, who has written that the provision "invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate C.E.O.'s who engage in any manner of unappealing or ethically questionable conduct."

Justice Scalia wrote last year that the law was so loose that it could be interpreted to "cover a salaried employee's phoning in sick to go to a ballgame."

Judging from the transcript of the oral argument in the Weyhrauch case and early reports on the oral argument on Black’s case, it appears that the Court is sympathetic to the critics.

The Associated Press reported that Justice Stephen Breyer said he worries that the Department of Justice’s interpretation of the statute makes criminals out of vast numbers of workers, including possibly employees who read a newspaper on the job.

Justice Scalia called the law "a mush of language" and complained that the vagueness allowed government lawyers to pursue a “great variety of pushing the envelope prosecutions.” Noting the different ways federal prosecutors have used the law, Scalia said “If the Justice Department can’t figure out what is embraced by this statute, I don't know how you can expect the average citizen to figure it out.”

Weyhrauch’s lawyer Donald Ayer argued that prosecutors were seeking to hang Weyhrauch for failing to disclose the solicitation of legal work from VECO because the government lawyers “couldn’t prove their bribery case.”

Aiming to fight off charges that the statute was too broad, Justice Department attorney Michael Dreeben asserted that the core set of violations it covered were bribes, kickbacks, and “undisclosed conflicts of interests when the official takes official action to further that interest.”

Commentators do not expect a decision in Weyhrauch’s case for at least five months. Given that prosecutors thought that putting the disputed evidence before the jury was so important that they decided to hold off on the trial until the appeal was over, if the Court rules against the Department of Justice the government might dismiss the case. The tenor of the oral arguments in the Black and Weyhrauch cases today suggests that the Court will limit the law’s application in some way if the statute is not struck down entirely.

Of the 12 people charged in the federal probe into Alaska public corruption, Weyhrauch's case is the only one left unadjudicated on the merits. (Jim Clark, former Chief of Staff to ex-Gov. Frank Murkowski, has pleaded guilty but still awaits sentencing, ostensibly because he might be needed to testify against Weyhrauch in a trial.) District Court Judge John Sedwick has strongly suggested that Weyhrauch's case will be the last to be adjudicated in this investigation--although the judge's assessment did not include the possibility that prosecutors will be charged for their own failures in turning over evidence.

For a good review of the briefs in the Weyhrauch case, look at on the Internet. To see the Weyhrauch oral argument transcript, look at on the Internet.

(Thanks to Mark Regan for tips on the links.)