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.

"I expected the worst, but the depth and breadth of the wrongdoing is shocking," he said. "It's the worst corruption in our generation at the Department of Justice."

The report was prepared at the request of Judge Sullivan by Washington attorney Henry Schuelke. Its findings had remained under seal since November while some of the prosecutors named in the case fought to keep it concealed.

The Justice Department has acknowledged that it failed to tell Stevens' lawyers about inconsistent statements Allen made to federal investigators. The Supreme Court has said since 1963 that prosecutors have a constitutional duty to disclose that type of evidence.

Schuelke's report said the prosecutors could not be charged with criminal contempt of court for their conduct because Sullivan had never given them a "clear and unequivocal" order that they "follow the law."

Justice Department spokeswoman Laura Sweeney said the department "cooperated fully" with the inquiry and is in the process of completing its own review of the matter.

Attorney General Eric Holder told senators at a hearing March 8 that the Justice Department's own investigation of what went wrong in Stevens' case is nearly complete and that the probe recommended disciplinary actions for at least some of the prosecutors involved. He said he intends to make as much of the department's investigation public as possible.

An investigation last year by USA TODAY found that the Justice Department usually took years to review instances of misconduct and that lawyers found by courts to have committed serious violations faced little risk of losing their jobs.