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.

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