Judge refuses to seal probe of Stevens prosecutors

WASHINGTON – A federal judge on Wednesday rejected arguments from four attorneys who prosecuted the late Sen. Ted Stevens to keep private a report that reveals details of their mishandling of the case, but said he will not hold them criminally responsible for their "ill-gotten verdict."

U.S. District Judge Emmet Sullivan ordered that a 500-page report into the Justice Department's botched corruption case against Stevens be released March 15, along with any written objections the attorneys targeted in the investigation wish to include.

Last November, Sullivan revealed that the special prosecutor he had appointed, Washington lawyer Henry F. Schuelke III, did not recommend criminal charges against any of the federal prosecutors despite finding widespread misconduct, at least some of it intentional. In an order Wednesday, Sullivan formally confirmed that he is accepting Schuelke's conclusions.

Stevens was the longest-serving Republican in the Senate when a jury convicted him in 2008 of lying on financial disclosure documents to hide hundreds of thousands of dollars in home renovations and gifts from wealthy friends, including a massage chair, a stained-glass window and an expensive sculpture. A few days later, Stevens lost re-election to the Alaska seat he'd held for 40 years.

Sullivan dismissed the conviction after the Justice Department admitted misconduct in the case, including withholding from the defense evidence favorable to Stevens. The withheld evidence included notes from an interview with the government's star witness that would have been favorable to Stevens' defense. The witness was Bill Allen, the millionaire founder of a major Alaska company that supported oil producers called VECO Corp. who testified that he oversaw extensive renovations at Stevens' home and sent his employees to work on it.

"The government's ill-gotten verdict in the case not only cost that public official his bid for re-election, the results of that election tipped the balance of power in the United States Senate," Sullivan wrote. "That the government later moved to dismiss the indictment with prejudice and vacate the verdict months after the trial does not eradicate the misconduct, nor should it serve to shroud that misconduct in secrecy."

Sullivan ordered the criminal investigation into the six Justice Department attorneys who tried the senator as he dismissed the conviction. At the time, he said he'd never seen such misconduct in 25 years on the bench.

Sullivan wrote Wednesday that he received motions from two of the attorneys under investigation by Schuelke to permanently seal the report, while two other targeted attorneys objected to the release without making a legal motion to stop it. He did not identify which attorneys made the filings, all under seal. He also said the Justice Department and the two remaining attorneys indicated they do not oppose its release.

Sullivan wrote that the attorneys opposed to releasing the report argued that because Schuelke's investigation was essentially the same as a grand jury investigation, it should be bound by grand jury secrecy rules, particularly since Schuelke is not recommending criminal prosecution. But the judge said the investigation was different from a grand jury proceeding in many respects, including that the subjects were publicly identified from the outset.

"While objecting generally to release of the report as unfair and prejudicial to the opposing attorneys' privacy and reputational interests, those attorneys have not specified any compelling interest that would meet their high burden to justify keeping the report under seal," Sullivan wrote.

Sullivan quoted the report as concluding that "the investigation and prosecution of Sen. Stevens were permeated by the systematic concealment of significant exculpatory evidence which would have independently corroborated (his) defense and his testimony, and seriously damaged the testimony and credibility of the government's key witness."

The judge also said the report found at least some of the concealment was intentional and that much has yet to be publicly revealed. But Sullivan said Schuelke is not recommending contempt charges because the judge never issued a direct order spelling out rules of evidence that the prosecutors disobeyed.

"Having appointed Mr. Schuelke to 'investigate and prosecute' criminal contempt proceedings as appropriate, the court accepts his findings and conclusions," Sullivan wrote. "The public can neither understand the basis for Mr. Schuelke's findings and conclusions, however, nor the basis for the court's decision to accept those findings and conclusions, without access to the report."

He also said public disclosure of the report is warranted because the public paid not only the cost of the trial, but the costs of the Schuelke investigation and the legal representation for the attorneys who were targeted by it.

"To deny the public access to Mr. Schuelke's report under the circumstances of this case would be an affront to the First Amendment and a blow to the fair administration of justice," Sullivan wrote.

Subjects of the criminal investigation were prosecutors Brenda Morris, Edward Sullivan, Joseph Bottini, James Goeke and William Welch, who did not participate in the trial but at the time supervised the Justice Department's Public Integrity section and had overseen every major public corruption case in recent years.

Another Justice Department attorney who was targeted in the investigation, Nicholas Marsh, committed suicide in 2010. Sullivan said a pleading on the report was filed on behalf of Marsh's estate, but the judge did not reveal what it said.

Alaska Republican Sen. Lisa Murkowski said in a statement Wednesday that she is exploring legislation to reform rules of evidence in criminal cases in response to the scandal.

"The legacy of the Stevens trial — not just in Alaska, but nationwide — has become bigger than one man; it's become a national example of abuse of power and a double-standard for the Department of Justice," said Murkowski. "I'm pleased that Judge Sullivan has decided that transparency is not merely the best option, but the only option if Americans are to regain the ironclad and fundamental trust in our justice system."