Evidence concealed in Stevens corruption case, report says

WASHINGTON -- The government's botched corruption case against Alaska Sen. Ted Stevens was "permeated by the systematic concealment" of evidence favorable to his defense, a court-appointed investigator concluded in a report released today.

A jury convicted Stevens in 2008 on seven counts of lying on Senate financial disclosure statements. Days later, Stevens lost his Senate re-election bid. In 2009, federal Judge Emmet Sullivan threw out the conviction.

The 525-page report said the evidence prosecutors failed to disclose "seriously damaged the testimony and credibility of the government's key witness."

Stevens, who died in a plane crash in 2010, was accused of violating federal ethics laws by failing to disclose more than $250,000 in gifts and services he used to renovate his Girwood, Alaska, home. One of the key witnesses against him was former oilfield executive Bill Allen.

The report found that federal prosecutors made "astonishing misstatements" to Stevens' attorneys in an attempt to conceal information about their chief witness's role in pressing a child prostitute to sign a false declaration indicating that he never had sex with her when she was underage.

Prosecutors worried that this information might undermine his credibility in the case against Stevens and never disclosed it to Stevens' attorneys, the report says.

In addition, the investigation found that at least one prosecutor allowed Allen to lie in court. Allen's company paid for renovations to Stevens' home, and Stevens twice sent him letters asking to be billed for the work. Allen told jurors during Stevens' trial that the senator was "just covering his ass."

Allen testified that he had told investigators long before that Stevens didn't want to be billed, when in fact he revealed that information for the first time less than a week before the trial began. The report suggests that Stevens' attorneys could have used the fact to argue that his statement was false.

Assistant U.S. Attorney Joseph Bottini "knew the testimony was false and knew that he had an obligation … to correct that testimony there and then, but he did not," the report found. It said Bottini "endorsed and capitalized on Mr. Allen's false denial during his summation."

"The complete, simultaneous and long term memory failure by the entire prosecution team, four prosecutors and the FBI case agent, of the same statement about an important document made at the same meeting by their key witness in a high profile case is extraordinary," Schuelke's report said.

It said prosecutors fretted repeatedly over the notes in which Stevens asked to be billed, "but no cure for the problem created by those notes for the government's case was found until the week before the trial began when Mr. Allen's memory suddenly improved, after prodding" by an FBI agent.

Bottini's lawyer, Kenneth Wainsten, maintained in a letter released Thursday that "Bottini's conduct throughout the Stevens prosecution was ethical, proper, and in keeping with his reputation for unimpeachable integrity and fairness."

Catherine Ann Stevens, Ted's wife, released a statement saying the family is "shocked by the depth and breadth of the government's misconduct."

Brendan Sullivan, one of Stevens' attorneys, said the misconduct documented in the report went far beyond what he had anticipated.