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Kott alleges prosecutorial misconduct

Aaron Jansen illustration

Prosecutorial misconduct brought down the case against former U.S. Sen. Ted Stevens this year, and former state Rep. Pete Kott argues the same type of behavior was so rampant during his 2007 trial that his case should also be thrown out.

In a motion to dismiss the case, filed in Anchorage's federal court late Thursday, Kott's attorney Sheryl McCloud points to a string of alleged incidents of withheld information, lying witnesses, and FBI agents and federal prosecutors shaping witness testimony to elicit what they wanted to hear on the stand, even if it contradicted prior interviews.

The filing is noteworthy for two reasons: It provides a gold mine of previously undisclosed details referencing the inner-workings of the Justice Department's sweeping investigation into political corruption in Alaska. Yet, at the same time, it sheds light on how the Feds became entangled with a witness accused of sexually abusing teenage girls and have now found themselves in trouble with alleged missteps.

Kott was convicted in federal court in fall 2007 for taking bribes while serving in the Legislature from former VECO Corp. chief executive Bill Allen, once a heavyweight in the state's lifeblood oil industry. Acting on a request by the Justice Department, a federal appeals court in San Francisco this summer ordered the release from prison of Kott and former state Rep. Vic Kohring, also convicted on bribery charges, and a review of their convictions because prosecutors withheld information from their lawyers.

More than 1,000 pages of documents were released to Kott's and Kohring's lawyers. And McCloud cites extensively from the withheld information in her motion to dismiss Kott's case.

Among the alleged misdeeds committed by the Justice Department, she claims the government failed to disclose Allen's entanglement in a series of child sex and prostitution investigations. McCloud claims newly released information would have been crucial during trial to help attack Allen's credibility and perhaps question his cooperation in the FBI corruption investigation.

McCloud also argues that prosecutors told Allen what to say when he testified against Kott. In her motion, she cites evidence turned over by the government recounting federal prosecutor Nicholas Marsh describing Allen as a "terrible witness." Marsh was concerned about statements Allen was voluntarily making, such as "Pete Kott was my friend" and "he never extorted me," which, McCloud claims, contradict Allen's testimony during Kott's trial.

Instead of letting the defense team know about those statements, McCloud argues, Marsh chose to coach and shape Allen's testimony, getting him to focus on how a future VECO job offer he made to Kott was linked to gaining the then-lawmaker's support for bills favorable to the oil industry during the 2006 legislative session.

Quoting from an email between Marsh and his superiors, McCloud notes he was skeptical about whether Allen's regained focus would hold during Kott's trial.

"I think he's in a good place right now, but the guy is like mercury on a plate glass window," the excerpt reads. "We won't know what we'll get until he takes the stand."

The mountain of new disclosures is a direct result of Ted Stevens' trial, in which Allen also testified. Stevens, then a senator, was charged last year for failing to report on his public disclosures more than $250,000 in home renovations and gifts he received from Allen, his company and others.

In that case, Allen testified that Stevens sent a letter asking for a bill for work on his home, but that Allen ignored the request at the urging of a mutual friend, who claimed Stevens' letter was only meant to create a paper trail. Yet, after a jury found Stevens guilty, the Justice Department disclosed that it found an FBI note showing that Allen didn't recall any such conversation with that friend.

The Justice Department acknowledged its error earlier this year and took the unusual step of asking the court to dismiss Stevens' conviction in spring.

Deeply angered by the latest straw in a string a failed disclosure demands throughout the case, the trial judge presiding in the Stevens case went on to order a special investigation into whether the team of six prosecutors -- three of whom were involved in the Kott and Kohring cases -- had committed any wrongdoing.

As Kott and Kohring sat in federal prison serving out jail terms for their bribery convictions, it didn't take long for their attorneys to demand full disclosure of evidence in their clients' trials.

According to McCloud, she then uncovered repeated failures by the government to disclose evidence favorable to Kott on every matter of substance in the case.

McCloud's 58-page motion was filed on the same day former state Rep. Bev Masek was sentenced to six months in prison after pleading guilty to conspiring to accept bribes from Allen in 2003.

Allen, the star witness in the government's corruption investigation, pleaded guilty to bribery and corruption charges in May 2007. He will be sentenced Oct. 28, unless prosecutors can justify why they need him longer for their investigations.

Bob Bundy, a lawyer of Allen's, did not return a call late Thursday.

Kott 'too proud' to accept gifts

Kott was convicted in September 2007 for taking bribes from Allen in return for supporting oil-tax legislation the previous year. The government's case rested on Kott receiving nearly $13,000 and a promise of a job from Allen in exchange for legislative favors.

But McCloud argues in her motion that the government suppressed interviews with Allen and former VECO executive Rick Smith prior to going to trial that would have helped refute those allegations. McCloud cites in her motion the following examples of suppressed evidence:

• In addition to serving as a state representative, Kott also owned a flooring business. The jury found that Kott received an extra $7,993 from Allen that was funneled through his business to pay for his re-election campaign, something that both Allen and Smith corroborated on the stand.

Kott testified the check was for flooring work on both Allen and Smith's homes. The suppressed evidence allegedly shows that during an interview, a "source," who Kott's motion says was likely Allen, said the money was a "bonus" for work that Kott had done on his floors previously because Kott had worked his "butt off."

• Kott testified that he received a $5,000 loan from Allen for a truck. The jury decided that it wasn't a loan, but rather a quid-pro-quo gift for Kott to influence the oil-tax legislation at the request of Allen and Smith. However, released documents supposedly show that in an interview, Allen told an FBI agent the money was, indeed, a loan.

"Pete never reimbursed (Allen) for the 5K," according to a note cited in Kott's motion, "Considered loan, but didn't push for it." Another person interviewed, who McCloud infers was likely former VECO executive Roger Chan, said that Allen would probably have given Kott the money, but that the then-lawmaker was "too proud" to accept such a gift.

McCloud also takes aim at Smith, who often worked alongside Allen when he lobbied lawmakers in Juneau from the hotel suite. According to notes from an interview that weren't disclosed to Kott's lawyers, Smith was having "significant psychological troubles," and an FBI agent feared he was suicidal before Kott's trial.

Documents also show that in preparation for former Rep. Vic Kohring's corruption trial, Smith didn't know if Kohring thought he was accepting bribes or gifts, and that he had to be prodded into saying that Kohring was accepting bribes. McCloud quotes from one government note that says, "...need to strengthen (Smith's) response re: bribes v. gifts..."

McCloud speculates that if the government was telling Smith to characterize payments as bribes in Kohring's trial, then the same might have happened during Kott's trial.

Allen 'unglued' over child sex allegations

Bill Allen has come under investigation at least twice since 2004 -- including one probe that may still be under way -- over allegations that he had sexual relationships with underage girls.

Drawing on FBI and police interviews, investigation reports and other documents released by the government, McCloud paints a detailed picture of Allen's alleged relationships with four unnamed child victims, raising questions of whether federal investigators suppressed the allegations to protect Allen's credibility as a witness and, perhaps, give him reason to cooperate in their corruption investigation.

According to McCloud's motion, "The government ... was fully aware that such evidence existed and must have known of its importance in two different areas: it showed prior acts of criminality, and it showed Bill Allen's desperate attempts to convince his victims to lie and protect him. Its newly released documents contain allegations and evidence that Bill Allen committed a multitude of primarily sex crimes against children, and that he sought to have them swear that he never committed such acts."

Although not named directly in the motion, one of the alleged victims is Bambi Tyree, who was a key player in a child-sex and drug ring busted up at former Anchorage businessman Josef Boehm's home in late 2003. Tyree, Boehm and two other men were federally charged in 2004 and ultimately pleaded guilty for their roles in a conspiracy to provide crack cocaine to girls as young as 13 in return for sex.

In early 2004, in the wake of the Boehm bust and acting on a tip, Anchorage Police detectives began investigating allegations that Allen had carried on a sexual relationship with Tyree when she was a minor. But detectives were soon asked by a federal prosecutor to halt their investigation because "it might interfere" with an investigation "involving Allen," according to a November 2004 memo written by Anchorage Detective Kevin Vandegriff, which is cited in Kott's motion.

In a closed hearing during Kott's trial, federal prosecutors asked U.S. District Judge John Sedwick to prohibit Kott's then-lawyer Jim Wendt from questioning Allen on the witness stand about Allen's "relationship" with Tyree, saying it "has no relevance whatsoever to this case," according to a transcript from the hearing recounted in Kott's motion.

Wendt was unaware of any connection between Allen and Tyree, or that the federal government had asked local police to drop their investigation, so he did not challenge the request.

McCloud argues that the questioning should have been allowed. "The government was aware of this problem with Bill Allen's past allegations of criminal conduct, his denials, and the allegations that he covered up, by at least March of 2007," more than four months before Kott's trial began, McCloud says in the motion.

She also claims that FBI Special Agent Mary Beth Kepner passed along to Allen information from conversations she had with Alaska Dispatch editor Tony Hopfinger while he was reporting on the corruption investigation and sex allegations against Allen. Hopfinger spoke to Kepner off and on for about a year until she came under investigation herself for alleged misconduct in the government's investigation earlier this year.

McCloud cites an interview with Kepner in which she says she sometimes used information gleaned from conversations with Hopfinger "to do some investigative things" or "prepare Allen" before a story was published. Kepner did not return a message left late Thursday.

"Allen would become unglued whenever an article would appear involving allegations related to the APD sexual investigation," according to an interview with Kepner recounted in Kott's motion.

McCloud concludes that, "Clearly, it was very important to Allen to keep that material quiet, and limited; it therefore would have provided an enormous incentive to cooperate in the first place."

Contact Jill Burke at, Tony Hopfinger at, and Amanda Coyne at

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