Court will accept Weyhrauch evidence

APPEAL: 9th circuit says state lawmaker must disclose conflict of interest even if law isn't clear.

November 26, 2008 

Federal prosecutors can go forward with the corruption case against former state Rep. Bruce Weyhrauch using evidence that he failed to disclose his efforts to get a job with Veco Corp., under an appeal court ruling issued Wednesday.

The 9th U.S. Circuit Court of Appeals sided with prosecutors, who had appealed a ruling excluding such evidence.

The case likely is headed back to Anchorage for trial. Efforts to reach Weyhrauch's attorney, Doug Pope, and federal prosecutors Wednesday afternoon were unsuccessful.

Weyhrauch, a Juneau Republican, was indicted in May 2007 along with former House Speaker Pete Kott over efforts by Veco and its chief executive, Bill Allen, to pass tax legislation favored by the oil industry. Weyhrauch, a lawyer in private life, was trying to get legal work from Veco, and his job-seeking effort got tangled up in Veco's lobbying for the oil-tax deal.

Just before the trial, U.S. District Court Judge John Sedwick ruled that federal prosecutors couldn't use his failure to disclose his job-seeking as evidence to prove he defrauded Alaskans of honest services because state law didn't clearly require such a disclosure.

The government appealed and Kott went on alone to trial in September 2007. He was convicted on three of four corruption counts against him. He is in prison and is appealing the convictions.

In its Weyhrauch decision, a three-judge panel of the 9th Circuit said that all citizens have a right to the honest services of their public officials, free from secret conflicts of interest, regardless of the limits of the law in any particular state.

"Accordingly, the government may proceed on its theory that Weyhrauch committed honest services fraud by failing to disclose a conflict of interest or by taking official actions with the expectation that he would receive future legal work for doing so," the judges said.

The panel noted that Sedwick's ruling didn't come out of the blue. Without guidance from the San-Francisco-based 9th Circuit, the Anchorage judge turned to a decision out of the 5th Circuit, in New Orleans, that "limits how much control federal prosecutors have over state public affairs by restricting federal criminal liability to conduct prohibited by the states themselves," the decision said.

But other appeals courts have ruled differently. The federal government has reason to be interested in what state lawmakers do, the 9th Circuit panel said. For instance, some industries regulated by states, including oil, are national in scope.

"Congress has a legitimate interest in ensuring that state action affecting federal priorities is not improperly influenced by personal motivations of state policymakers and regulators," the panel wrote.

Public officials have a broad duty to be honest, even when there's not a specific state law telling them how to proceed, the judges found. There's no hint in the federal law that Congress wanted geography to define what behavior is criminal, the panel wrote.

Other appeals courts generally have found two kinds of misconduct that amounts to the crime called "honest services fraud" -- taking a bribe while pretending to be independent and failing to disclose material information, according to the opinion.

"Because public officials may legitimately disagree over which of the many competing interests in society deserve support from the state, without transparency the public cannot evaluate the motivations of public officials who are purporting to act for the common good to determine whether they are in fact acting for their own benefit," the 9th Circuit panel said.

The evidence at issue relates to one of four charges against Weyhrauch. He also is charged with bribery, conspiracy and attempted extortion.

For the honest services fraud charge, prosecutors want to present evidence that includes: legislative ethics publications addressing conflicts of interest and disclosure; testimony that lawmakers typically disclose conflicts on the floor and that Weyhrauch never revealed he was negotiating for a Veco job; a description of ethics training that Weyhrauch received; and information that Weyhrauch served on the Select Committee on Legislative Ethics.

On another issue, the judges had harsh words for the prosecution over a procedural matter.

It took the government three tries before it complied with a law that requires a U.S. attorney to certify that a pretrial appeal is being made for legitimate reasons and not just to delay the trial. Because the federal prosecution of Alaska political corruption cases is being managed by the U.S. Justice Department's Public Integrity Section, there wasn't a U.S. attorney in charge and the appeal was not certified properly.

Ultimately, U.S. Attorney General Michael Mukasey authorized it, a year after the fact.

"We will excuse the government's confusion and allow it to supplement the record with the Attorney General's certification," the panel said.

However, the judges threatened to reject government appeals if prosecutors fail to comply with that law:

"We will not be so forgiving in the future."

Find Lisa Demer online at or call 257-4390. Find Richard Mauer online at or call 257-4345.

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