Six others testify for prosecution

In a sworn statement demanded by the judge in Stevens' trial, the head of the Justice Department's Public Integrity section said it was his decision to send Williams home because he and others in their office had serious concerns about his health.

Williams, who oversaw renovations at Stevens' home in Girdwood for Veco Corp. from 2000-2001, was scheduled to testify for the government in Stevens' trial but prosecutors sent him home the day the trial opened.

Monday, prosecutors drew the ire of U.S. District Judge Emmet Sullivan, who threatened sanctions and asked for a full explanation of what had happened. Sullivan said he was "flabbergasted" that the government team sent Williams home without telling him or the defense.

Stevens' team seized on the situation, calling for a mistrial and accusing prosecutors of withholding potential testimony from Williams that could help Stevens. They were especially interested in potential evidence that Williams worked far less on the home than the hours recorded in a report by the company's bookkeeper, who testified earlier.

But Welch said that Williams actually made himself available to the defense when he arrived in Washington, about Sept. 15. Williams said he called the firm and left his hotel and cell phone numbers, Welch said. They never called back, he said.

The government said it had planned to call Williams among the first of its witnesses. But when Williams met with government lawyers to prepare for his testimony, it was apparent he had "serious, health-related issues that warranted medical attention." Between his Nov. 7, 2006, grand jury testimony and the present, Williams had become "almost unrecognizable," prosecutors wrote in their filings.

"Mr. Williams had lost a substantial amount of weight, his abdomen was distended (and had been previously drained of excess fluid), he appeared jaundiced, his face was gaunt, he had substantially aged, he had chronic coughing spells, and he was frequently short of breath."

The dispute over Williams dominated the proceedings Monday, although jurors never heard any of the discussions. By Tuesday, though, the Williams matter seemed all but forgotten, aside from the filing of motions and affidavits.

The government breezed through six witnesses on its way to its main witness, former Veco chairman Bill Allen. Each of the six in some way was connected to unreported gifts to Stevens or his alleged efforts to cover them up.

The Republican senator faces seven felony counts of failing to report on his Senate disclosure forms more than $250,000 worth of gifts and home renovations, chiefly from Veco and Allen.

Among the witnesses was a reporter from Wasilla who had a tip that Veco had provided free construction services for Allen and the Stevens press aide who successfully fended off the questions.

Heather Resz, then editor of the Anchorage Chronicle, a weekly owned by Alaska Newspapers Inc., testified she got a strong tip about Veco and Stevens in 2003, but was unable to confirm it through public records or other sources.

She worked on the story, on and off, until 2004. About to give up, she called Courtney Boone, then press secretary for Stevens in Washington, she testified.

"Her initial reaction was that she assured me that the senator was an ethical man," Resz said. But there was one unusual aspect to that call. While Boone normally answered questions off the top of her head, in this case, she said she'd get back. It took two days.

Boone testified that when she got the call, she was "shocked" by the allegation. "I think I said, 'What, are you kidding? Seriously, are you kidding?' "

Boone demanded to know Resz's source and said she might not come back with any information at all unless Resz gave up the name. Resz refused.

Still, Boone knew the problem could be serious, she said. First she told Stevens' chief of staff, then went to Stevens directly. He too expressed shock, she said.

But then he told Boone to get in touch with his wife, whom he said had managed the household finances on the remodel. She also testified that Stevens' friend Bob Persons, the owner of the Double Musky in Girdwood who looked after the project for the Stevenses, called her about the project.

According to an e-mail account of that conversation Boone sent to Stevens, Persons told her the only thing Veco provided was some used pipe for the deck. The rest of the work was handled by Christensen Builders, Boone wrote.

Boone also told Stevens that another aide in his office had spoken with Allen about the call from Resz. Allen said he knew who her source was: "he is a disgruntled foreman who was fired a couple of years ago," Boone wrote.

Four days of testimony in the Stevens case so far shows that Persons knew Veco provided far more than used steel. He has yet to testify, though. The Stevenses paid Christensen about $130,000 for his work, but that was less than half the cost of the entire project, according to the testimony. The rest was picked by Veco.

Even though she knew that Veco provided something, the approved statement Boone prepared for Resz made no mention of the company, which managed the project and provided the architect, electricians, the plumber and carpenters, along with tens of thousands of dollars in material.

"It would've stirred up more questions," Boone testified. "This was a story I would've wanted to put a stop to."

The statement, as Resz read it to the jury, asserted that a general contractor -- presumably Christensen -- "handled all the subcontracting and supply work for the project."

Boone had succeeded. Resz never published a story.

"I closed the file and threw up my hands," Resz testified. "It's another dead end."