Justice Dept.: Drop Stevens corruption charges

WASHINGTON -- The Justice Department on Wednesday abandoned the controversial prosecution of former Alaska Sen. Ted Stevens, the longest-serving Republican in Senate history, after determining that government lawyers withheld key evidence from Stevens' defense attorneys at trial.

In an extraordinary admission contained in federal court documents, Attorney General Eric Holder asked that Stevens' October conviction be dismissed. Stevens was convicted on seven felony counts of lying on Senate financial disclosure forms by omitting more than $250,000 in gifts.

"After careful review," Holder said in a written statement Wednesday, "I have concluded that certain information should have been provided to the defense for use at trial. … I have determined that it is in the interest of justice to dismiss the indictment and not proceed with a new trial."

Justice's Office of Professional Responsibility is investigating the prosecution's conduct.

A hearing on the government's motion to dismiss the case against Stevens has been scheduled for Tuesday in a Washington, D.C., federal court.

"I always knew that there would be a day when the cloud that surrounded me would be removed," said Stevens, 85, who was awaiting sentencing when the government announced its decision. "That day has finally come," his statement Wednesday said. "It is unfortunate that an election was affected by proceedings now recognized as unfair."

Stevens lost his re-election bid to Democrat Mark Begich, who said Wednesday the government's decision was "reasonable."

"I always said I didn't think Sen. Stevens should serve time in jail and hopefully this decision ensures that is the case," Begich said in a statement. "It's time for Sen. Stevens, his family and Alaskans to move on and put this behind us."

Stevens' lawyers, however, issued a blistering statement, saying that the "misconduct of government prosecutors, and one or more FBI agents was stunning."

"This jury verdict was obtained unlawfully," said Stevens' attorneys Brendan Sullivan and Robert Cary. "Not only did the government fail to disclose evidence of innocence, but instead intentionally hid that evidence and created false evidence that they provided to the defense."

The government's reversal centered on prosecutors' dealings with star witness Bill Allen, the former head of an Alaska oilfield service company, Veco. Prosecutors alleged that Allen, who pleaded guilty to bribing state lawmakers, had provided most of the gifts and home renovations to Stevens.

New details contained in federal court papers Wednesday reveal that the government never provided the defense with prosecutors' notes from an April 15, 2008, interview with Allen, who estimated the value of renovations to Stevens' Alaska chalet at $80,000 — far less than the $250,000 the government had alleged.

The notes also suggest that a key conversation between Allen and Bob Persons, a friend of Stevens', introduced at trial may not have occurred. At trial, Allen testified that Persons told him Stevens may have asked for a bill for the home renovations, but the senator didn't really want one and was trying to "cover his ass."

The prosecutors' notes, according to the court documents, indicate that Allen recalled no such conversation.

"This testimony was false," Sullivan and Cary said in their statement. "Members of the prosecution team knew that it was false. Nonetheless, it was presented by the prosecution at trial in a manner to give it maximum 'bombshell' effect."