Anchorage Daily News

A key piece of the corruption case against former Rep. Bruce Weyhrauch was debated Monday in Anchorage before a federal appeals court panel.

Three of Weyhrauch's colleagues are in prison on corruption convictions, but 15 months after he was indicted, the Juneau Republican still is awaiting trial while the evidence question is decided. A fifth state legislator, Sen. John Cowdery, was indicted in July and is scheduled for his first court appearance next week.

At issue before the San Francisco-based Ninth Circuit Court of Appeals is evidence prosecutors want to use to show Weyhrauch deprived the public of his "honest services" as a legislator. A three-judge panel is in Anchorage this week on a number of cases, and it heard the matter.

Weyhrauch is charged with four federal crimes, all felonies: bribery, attempted extortion, conspiracy and honest services mail fraud.

Prosecutors say he committed mail fraud by failing to disclose he was in negotiations with Veco Corp. over a lawyer job at the same time legislators were considering a new oil tax pushed by Veco. In the indictment, Weyhrauch is accused of mail fraud for sending former Veco chief executive Bill Allen a letter in May 2006 seeking a job.

The defense says there was no requirement in state law for him to reveal negotiations before he even had a job.

Weyhrauch was supposed to be tried alongside former House Speaker Pete Kott last year. But before the trial began, U.S. District Judge John Sedwick ruled that prosecutors couldn't use evidence about his failure to disclose a potential conflict of interest to prove mail fraud. That was because state law didn't specifically require him to reveal the potential conflict, according to the ruling.

Prosecutors appealed.

Nicholas Marsh, a trial attorney with U.S. Justice Department Public Integrity Section, argued the case before the panel: judges Dorothy Nelson, Raymond Fisher and A. Wallace Tashima.

He told the judges that four other federal appeals courts around the country have ruled there is no requirement for an underlying state law requiring disclosure. Federal prosecutors can make a case on the idea that public officials have a duty not to conceal financial conflicts of interests, essentially as a matter of public trust, Marsh said.

Defense lawyer Douglas Pope told the judges that Congress never intended to reach into uncertain situations like Weyhrauch's. He didn't even have a Veco job, and Alaska laws "draw a distinction between existing and potential conflicts-of-interest for disclosure purposes," Pope wrote in his court filings.

Weyhrauch denies all the charges against him. He says there was nothing wrong in sending the letter to Allen, Pope has said.

Prosecutors want the appeals court to allow in evidence that they say would show Weyhrauch was familiar with conflict disclosure requirements. It includes:

• Legislative ethics publications found in Weyhrauch's possession that address conflicts of interest and disclosure;

• Testimony from a state employee that legislators commonly disclose conflicts on the floor, but that Weyhrauch never disclosed he was negotiating with Veco in 2005 and 2006;

• Testimony that Weyhrauch underwent ethics training; and

• Testimony that Weyhrauch served on the Select Committee on Legislative Ethics.

After the hearing, neither side would address the importance of the evidence. But last year, Marsh told Sedwick it was crucial in the case against Weyhrauch, a lawyer who never landed the Veco job.

Prosecutors originally wanted to try Weyhrauch with Kott, who was shown in surveillance recordings drinking and generally being cozy with Veco head Allen and vice president Rick Smith. Weyhrauch wanted to be tried separately.

But last September, after Sedwick's ruling, prosecutors changed course to support splitting the two cases. They asked that Weyhrauch's case be put on hold until the evidence question was decided. And that's what was done.

The prosecution also has to overcome a technicality, the judges noted Monday. Around the country, U.S. attorneys now are supposed to sign off on appeals, the judges said. But this case is being handled out of the Public Integrity Section in Washington, D.C. Marsh argued that William Welch, chief of public integrity, gave the OK for the appeal. Welch is effectively serving as an acting U.S. attorney for the Alaska corruption cases because the U.S. attorney here recused himself, the prosecutor said.

A ruling will come later.

Find Lisa Demer online at adn.com/contact/ldemer or call 257-4390.

ADVERTISEMENT