Stevens case closed, case against prosecutors open.

[dnalexander]

Stevens case closed, case against prosecutors open
April 07, 2009 1:17 PM EDT

WASHINGTON - A federal judge dismissed the corruption conviction of former Alaska Sen. Ted Stevens on Tuesday and took the rare and serious step of opening a criminal investigation into prosecutors who mishandled the case.

"In nearly 25 years on the bench, I've never seen anything approaching the mishandling and misconduct that I've seen in this case," U.S. District Judge Emmet Sullivan said.

Sullivan appointed a special prosecutor to investigate Justice Department lawyers who repeatedly mishandled witnesses and withheld evidence from defense attorneys during the monthlong trial. Stevens was convicted in October of lying on Senate forms about home renovations and gifts he received from wealthy friends.

The case cost Stevens a Senate seat he had held for 40 years. Once the Senate's longest-serving Republican, he narrowly lost to Democrat Mark Begich shortly after the verdict.

As Sullivan dismissed the case, Stevens turned to his friends and held up a fist in victory as his wife and daughters broke into loud sobs.

"Until recently, my faith in the criminal system, particularly the judicial system, was unwavering," Stevens told the court Tuesday, his first public comments since Attorney General Eric Holder announced he would drop the case. "But what some members of the prosecution team did nearly destroyed my faith. Their conduct had consequences for me that they will never realize and can never be reversed."

Sullivan appointed Washington attorney Henry Schuelke as a special prosecutor to investigate contempt and obstruction by the Justice Department team. Schuelke is a former prosecutor and veteran defense attorney who was tapped to oversee a Senate Ethics Committee investigation into influence-peddling allegations against former New York Sen. Alfonse D'Amato in 1989.

Sullivan said the matter was too serious to be left to an internal investigation by the department, which he said has dragged its feet looking into the misconduct. He criticized former Attorney General Michael Mukasey for not responding to complaints of misconduct in the case: "Shocking, but not surprising," Sullivan said.

In a criminal case, the prosecutors could face prison time and fines. The decision raises the question of whether the prosecutors, who include the top two officials in the department's public corruption unit, can remain on the job while under criminal investigation.

Subjects of the probe are Brenda Morris, the lead prosecutor in the Stevens case and the No. 2 official in the Public Integrity Section; Public Integrity prosecutors Nicholas Marsh and Edward Sullivan; Alaska federal prosecutors Joseph Bottini and James Goeke; and William Welch, who did not participate in the trial but who supervises the Public Integrity section.

Judge Sullivan repeatedly scolded prosecutors for their behavior during trial. After the verdict, an FBI whistleblower accused the team of misconduct and Sullivan held prosecutors in contempt for ignoring a court order.

The prosecution team was replaced and, last week, new prosecutors acknowledged that key evidence was withheld from Stevens. That evidence included notes from an interview with the government's star witness, contractor Bill Allen.

On the witness stand, Allen said a mutual friend told him not to expect Stevens to pay for the home renovation project because Stevens only wanted the bill to cover himself. It was damaging testimony that made Stevens look like a politician scheming to cover his tracks while accepting freebies.

But in the previously undisclosed meeting with prosecutors, Allen said he had no recollection of such a discussion. And he valued the renovation work at far less than what prosecutors alleged at the trial.

"I was sick in my stomach," attorney Brendan Sullivan said Tuesday, recalling seeing the new evidence for the first time. "How could they do this? How could they abandon their responsibilities? How could they take on a very decent man, Ted Stevens, who happened to be a United States senator, and do this?"

With the prosecution team now under the scrutiny Stevens felt for years, the 85-year-old smiled and posed for pictures with his family on the courthouse steps.

"I'm going to enjoy this wonderful day," he said.