WASHINGTON -- A special prosecutor will investigate whether government attorneys broke the law by failing to ensure former Sen. Ted Stevens received a fair trial, a federal judge announced Tuesday as he dismissed corruption charges and a jury's guilty verdict against the Alaska Republican. "In 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. "When the government does not meet its obligation to turn over evidence, the system falters."
U.S. Attorney General Eric Holder had asked Sullivan last week to dismiss the verdict and the indictment after acknowledging that prosecutors had failed to share with Stevens' attorneys notes from an interview with the prosecution's key witness that contradicted the witness's trial testimony. Withholding materials that could be helpful to criminal defendants has become a troubling Justice Department trend, Sullivan said, citing Stevens' case and that of a Guantanamo detainee who fought to have his medical records released to his lawyers.
The Justice Department's Office of Professional Responsibility is investigating the Stevens prosecution team for its handling of evidence during the trial as well as how it handled a post-trial whistleblower complaint from an FBI agent. Sullivan said, however, that he wouldn't be satisfied with an internal investigation that the Justice Department is unlikely to make public.
Sullivan has asked a former military judge, Henry Schuelke III of Washington, D.C., to investigate the conduct of six prosecutors in the case for potential criminal contempt and obstruction of justice.
They are: the head of the Justice Department's Public Integrity Section, William Welch; the lead trial attorney, Brenda Morris; two trial attorneys in the Public Integrity Section, Nicholas Marsh and Edward Sullivan; and two assistant U.S. attorneys in Alaska, Joseph Bottini and James Goeke.
"I have not pre-judged these attorneys for their culpability, and I hope the record will find no intentional obstruction of justice," Sullivan said.
Sullivan will file an order explaining how the special prosecutor will work and what sort of authority he will have. Sullivan said he made the appointment under Rule 42 of the Federal Rules of Criminal Procedure, which allows a judge to appoint an attorney to investigate and prosecute criminal contempt charges.
Sullivan said he reminded prosecutors repeatedly of their obligations to turn over to Stevens' legal team evidence that might help exonerate their client -- requirements that stem from the 1963 Supreme Court case Brady v. Maryland. Tuesday, Sullivan cited 10 missteps on the part of prosecutors during and after the trial and even referred back to his own remarks at the time, including his scold to prosecutors during the trial that "the fair administration of justice does not depend on the luck of the draw, a lucky day or a lucky continuance."
"We must never forget the Supreme Court's direction that a criminal trial is a search for the truth," Sullivan said. "I urge the president and the attorney general, as they select new U.S. attorneys, to obtain from those appointees their commitment to fulfilling these most important prosecutorial obligations."
Sullivan also announced that he would refer a complaint about the attorney for star witness Bill Allen to the U.S. attorney's office in Washington for investigation. Anchorage lawyer Robert Bundy, who sat in the courtroom while his client testified, was accused by the judge and several of Stevens' attorneys of sending signals to Allen on the stand. Bundy, himself a former U.S. attorney for Alaska, has denied the accusations.
'YOUR ACTIONS HAVE GIVEN ME HOPE'
The 85-year-old Stevens walked out of the courthouse Tuesday surrounded by well-wishers, including his three daughters. As they strode down the sidewalk with their arms draped around one other, they smiled and posed for the throngs of photographers assembled outside the courthouse.
"I'm going to enjoy this beautiful day," Stevens said when asked what he would do next and what message he had for Alaskans. Then, in a reference to his exuberant former Senate colleague, Sen. Robert Byrd of West Virginia, he added, "If I were Senator Byrd, I'd say, 'Hallelujah!' "
Other federal judges, lawyers and Stevens friends and supporters crowded into the courtroom along with dozens of reporters. Among the lawyers: John Dowd, the Washington attorney whose firm has been paid more than $1 million for handling the federal investigation into the office of Rep. Don Young, R-Alaska.
Stevens, whose 40 years in the U.S. Senate made him the longest-serving Republican in the body's history, lost his re-election bid to Democrat Mark Begich within days of the jury verdict.
The former senator spoke briefly at the hearing after his lawyer, Brendan Sullivan, spoke. Stevens thanked his legal team, saying that he was "deeply indebted" to them and is thankful "they were willing to take on this case." He also thanked his friends and family and, in particular, Judge Sullivan for repeatedly holding prosecutors accountable.
"Until recently, my faith in the criminal justice system was unwavering, but what some members of the prosecution team did nearly destroyed my faith," Stevens said, then told Judge Sullivan, "Your actions have given me hope that others may be spared."
Stevens also thanked Alaskans.
"As I traveled around the state, almost every Alaskan said, 'I've said a prayer for you, Ted,' " Stevens said.
The Justice Department twice on Tuesday apologized for its conduct.
"In analyzing that information, we reached the conclusion that in the interest of justice, the defense was entitled to a new trial," said Paul O'Brien, the head of the Justice Department team that was assigned to the case after Sullivan cited Welch, Morris and another government attorney with contempt for failing to turn over documents connected with a whistleblower complaint by an FBI agent. "We deeply regret this occurred."
O'Brien personally delivered the documents to Brendan Sullivan's law office. But while he was complimentary of the work of O'Brien and his team, no apology will ever be enough sufficient to make up for the wrongs done to Stevens, Brendan Sullivan said.
"Nothing can be done that will give the citizens of Alaska the senator they surely would have elected," he said.
FBI: INVESTIGATION CONTiNUES
All 13 of the defense attorneys who worked on the case appeared in court with Stevens -- five at the defense table with him and another eight in a row of chairs lining the courtroom. His family, including his wife, Catherine, and his daughters Beth, Susan and Lily, sat directly behind him in the front row of the spectator section.
A jury found the former Alaska senator guilty on Oct. 27 on seven counts of failing to disclose gifts, including home renovations, on his U.S. Senate financial disclosure forms. The government presented stacks of e-mails and other evidence that Stevens knew about the free services from Allen and Allen's company, Veco Corp.
Stevens was the largest target in an investigation of public corruption in Alaska that began in 2004. Eric Gonzalez, a spokesman for the FBI in Alaska, said Tuesday the inquiry is ongoing.
"For us, nothing's changed," Gonzalez said. "Our investigations are active and continuing."
Stevens' lawyer Brendan Sullivan said he was physically sickened when he learned that prosecutors had failed to turn over notes from an interview last April 15 with Allen.
Allen's company performed much of the work renovating the senator's Alaska home. Stevens' failure to disclose those renovations as gifts in the years they were made was at the heart of the charges against him.
Stevens had written a note to Allen in 2002 asking him to talk to Bob Persons, a mutual friend who'd overseen the work, about giving him a bill for the renovations. That note was to have been the underpinning for Stevens' defense.
Allen undercut that approach, however, when he testified that Persons had told him not to worry about a bill. "Ted's just covering his ass," Allen said Persons told him.
The testimony floored Stevens' legal team, Brendan Sullivan said. When he subsequently learned Allen had told investigators last April that he and Persons had never talked about the billing issue, Sullivan said, he went into "a silent rage."
His team was no match for "corrupt prosecutors" intent on manufacturing evidence from a witness, he said. Allen, who has pleaded guilty to bribing state lawmakers in Alaska, has yet to be sentenced.
"It's prosecution to win at all costs, and wrongdoing can flourish if that's the attitude of a leader," Sullivan said.
Four prosecutors -- two in Anchorage and two in Washington -- and one FBI agent were aware of the Allen interview, Brendan Sullivan said. But he added on Tuesday that he would be fair and point out that the lead prosecutor "may not have known" about the interview. It's unclear if he was referring to Welch or Morris.
Brendan Sullivan also told the judge that despite writing three times to former Attorney General Michael Mukasey with his concerns about prosecutors, he never heard from the Bush administration appointee -- not even so much as an acknowledgement that his letter was received.
"Shocking," Judge Sullivan said, "but not surprising."
Reporter Richard Mauer contributed from Anchorage.
Photos: Stevens verdict dismissed
By ERIKA BOLSTAD
ebolstad@adn.com