Prosecutors won't call Allen in former legislator's trial

WEYHRAUCH: Case went to high court, is now back for trial.

July 28, 2010 

Imprisoned Veco chief executive Bill Allen will not be a government witness in the trial of former Juneau state Rep. Bruce Weyhrauch, according to a court memorandum filed Wednesday by Weyhrauch's attorney.

In his 13-page filing in U.S. District Court in Anchorage, Doug Pope said he was told by federal prosecutors that they had no intention of calling Allen, whose credibility has suffered since he was the chief government witness in three prior federal corruption trials.

Allen's most prominent role was in the 2008 trial of former U.S. Sen. Ted Stevens, where Allen told how he renovated Stevens' Girdwood home and bought him numerous gifts, none of which were disclosed by Stevens. His testimony was also crucial in sending former state Reps. Pete Kott and Vic Kohring to prison in 2007.

But much has changed for both the government's corruption investigation and Allen since then.

After a jury found Stevens guilty, the case against him fell apart when the Justice Department admitted it failed to turn over significant evidence to Stevens' attorneys, including FBI reports showing Allen's statements evolving over time. Allen's statements to FBI agents generally became more damning of Stevens as Stevens' trial date approached, according to interview notes that became public.

As a result of the Stevens' debacle, six prosecutors are themselves under investigation for criminal contempt by a special prosecutor. They, and FBI agents involved in the Alaska corruption investigation, are also under internal Justice Department investigation. That status of both investigations is unknown, except they appear to still be underway.

Allen pleaded guilty to bribery and tax violations before he testified in any trial, but he wasn't sentenced until a year after the Stevens trial. He's now serving three years at a federal facility in California, with a projected release date of Aug. 22, 2012.

It's unclear how the government would prosecute Weyhrauch without Allen, but there are other Veco officials they could call. Chief among them is Rick Smith, Allen's lieutenant for political affairs. Smith also pleaded guilty to bribery and was sentenced the same day as Allen, but only to 21 months. He's due for release July 20, 2011.

The government also has eavesdropped recordings of Weyhrauch, which they could validate using FBI agents.

Weyhrauch, a Juneau attorney and two-term Republican member of the House, had initially been charged with bribery, extortion, fraud and conspiracy in the same indictment as Kott. Among Weyhrauch's alleged criminal acts was his failure to disclose that he had solicited legal work from Veco before the end of the 2006 legislative session. Veco, a now defunct oil-field services company, was extremely active in that session, promoting petroleum tax changes beneficial to the industry.

Weyhrauch's case was separated from Kott's on the eve of trial when the government announced it would appeal a decision by the trial judge, U.S. District Judge John Sedwick, that Weyhrauch did not violate state law when he failed to disclose his solicitations of Veco.

The appeal went all the way to the Supreme Court. In June, the Supreme Court indirectly sided with Weyhrauch, making its final ruling in another case involving similar issues. It then sent the Weyhrauch case back to the 9th U.S. Circuit Court of Appeals to apply the related ruling, which is where that matter sits now.

The 9th Circuit told both sides to submit their briefs by Aug. 9.

Meanwhile, Weyhrauch's trial date of Sept. 13 has been pending in Sedwick's court. The judge scheduled a status conference for Friday so prosecutors and defense could argue whether the trial date should be vacated indefinitely.

Pope's filing was made in advance of the status conference. He argued for postponement until the 9th Circuit relinquishes jurisdiction. The government wants the case to proceed.

Pope said prosecutors told him about their decision to not call Allen in the course of discussions by way of e-mail, telephone and in person.

Pope also said he learned from prosecutors that they would not call the lead FBI agent in the corruption investigation, Mary Beth Kepner. Kepner hasn't testified in any of the other cases, but sat at the prosecution table during the trials. She has since been reassigned to other matters, the FBI says.

Pope said he might want to call both Allen and Kepner as defense witnesses. But he said in his memo to Sedwick that Kepner, still under investigation herself, might assert her 5th Amendment rights and refuse to testify.

Pope also said he has learned that after Weyhrauch's case was severed from Kott in 2007, the government continued to get grand jury testimony about Weyhrauch. Pope said he suspected prosecutors were unfairly trying to overcome issues they learned from evidence Weyhrauch's defense team shared with prosecutors when both sides believed they were going to trial with Kott.

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