Anchorage Daily News

Federal prosecutors have found a new reason to apologize over misleading information they've provided to the judge in former Sen. Ted Stevens' trial, and this time Stevens' lawyers are saying the government should be held in contempt.

In a letter to the judge dated Jan. 30 and made public Thursday, William Welch, head of the Justice Department's Public Integrity Section, said he erred when he said in January that government employees cited in an FBI agent's complaint alleging improprieties by government officials "want their story to be made public."

In fact, he wrote, not all of them gave their consent to having their names released Jan. 14 in a publicly filed copy of the eight-page complaint, though he didn't identify which ones.

In the complaint, agent Chad Joy accused a fellow agent and prosecutors of violating FBI policy and fair-trial rules in the wide-ranging public corruption investigation in Alaska and in Stevens' trial last year.

The new apology comes on top of a series of errors and misstatements made by prosecutors in connection with the complaint and other issues that arose during and after Stevens' trial.

In fact, Welch started his letter with an apology for an earlier "misunderstanding and misuse" of the phrase "whistle-blower" in connection with Joy's complaint -- and that was before he even revealed the newest misstatement.

How serious are the government's current problems? U.S. District Judge Emmet Sullivan hasn't expressed an opinion beyond obvious annoyance.

The basic facts of the case remain largely unassailed: that Stevens got tens of thousands of dollars' worth of gifts and services, primarily from the oil field service company Veco Corp. and its chief executive Bill Allen, didn't report them, then schemed to cover up his omissions.

But in a new motion filed Thursday on the collateral issues, Stevens' lawyers cited the latest material from prosecutors as additional grounds for their demand that Stevens' charges be dismissed over government misconduct, or that he at least get a new trial. And they added a new wrinkle: a request to Sullivan that the government be held in contempt.

"The government still does not get it. Over and over again, it has been caught red-handed making false representations to the Court and the defense," defense attorney Robert Cary said in his motion, filed publicly Thursday after initially having been submitted under seal Monday.

Not only did the government admit another error, Cary said, but it failed to comply with Sullivan's order of Jan. 21 to produce every communication in its files about Joy's complaint and to share that material with the defense.

SHIFTING POSITIONS

In the court documents put on the record Thursday, prosecutors acknowledged they weren't complying with the literal words of Sullivan's order but said they thought "other, more specific statements" by Sullivan required only a disclosure of communications related to whether Joy was a protected government whistle-blower.

That issue has been a subplot in the ever-growing post-trial din. Initially, when prosecutors sought to keep the complaint secret, they said he was a protected whistle-blower. When they sought to make the complaint public, they said he wasn't.

"The Government deeply regrets that the proceedings surrounding the Joy Complaint have escalated to this stage," said the most recent filing.

In explaining the shifting positions, prosecutors say now that the complaint was the sort that could lead to protection. But since Joy hasn't alleged any reprisals, he doesn't fall within the law that protects whistle-blowers, they said.

If the judge wants a larger disclosure or if he demands that sensitive attorney work-product documents be shared with the defense, the prosecutors asked they be given a two-week stay so they could decide whether to appeal.

In a new order docketed this week, Sullivan said he wasn't ready to determine whether the government filing conformed to his order. But he didn't seem very willing to give prosecutors more time.

"Moreover, for the reasons already stated by the Court in previous Orders and because much of the recent litigation is in response to the government's requests for relief and admitted misrepresentations, intentional or not, the Court will review further requests for extensions of time with disfavor," Sullivan wrote.

TROUBLE EARLY ON

Stevens' trial concluded Oct. 27. Even before the verdict, prosecutors got into trouble with the judge for not turning over evidence to the defense and for producing an inflated accounting of free work done for Stevens by Veco. Sullivan imposed sanctions on the government, stripping it of a small part of its case, but the jury appeared to have found more than ample evidence to convict Stevens on all seven disclosure counts.

Since then, Stevens' attorneys have taken two main approaches. They have said an accumulation of errors by the judge in interpreting the law and by the prosecution in its handling of the case should be sufficient for Stevens to get a new trial. And they've argued that government misconduct was so extreme that the judge should dismiss the case entirely. Now the latest filing adds a contempt citation to Stevens' proposed remedies.

"The government's excuse for this umpteenth alleged misunderstanding makes absolutely no sense," Cary said.

Prosecutors have acknowledged making mistakes but they said none were deliberate.

Joy's complaint, filed with the Justice Department in late November, has fueled the defense's post-trial effort, and Stevens' lawyers are demanding a full accounting in open court -- especially assertions by Joy that the government deliberately hid evidence favorable to Stevens.

Welch's letter also gives some insight about the internal fallout of Joy's complaint when a heavily edited version became public in December. It had a "negative impact" in the Anchorage FBI office, he said.

Many of Joy's complaints were against his co-case agent, Mary Beth Kepner, the lead agent in the corruption investigation.

"Special Agent Kepner has expressed her desire to have her name public and more importantly to release any and all information related to the allegations against her," Welch said.

During the first week in January, FBI agents from Washington, D.C., interviewed personnel in Anchorage, Welch said. The Washington agents told the interviewees that their statements eventually would be submitted publicly in court. But some Alaska personnel complained they didn't consent to their names being used in the Joy complaint when a less-edited version was refiled publicly Jan. 14 with the names of all government officials exposed, Welch said.

Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345.

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