Posts Tagged ‘new trial’

More Allegations of Prosecutorial Misconduct in Sen. Ted Stevens Case

Wednesday, February 11th, 2009

prosecutorial-misconduct-2.png

First, a recap: Last July, former Alaska Senator Ted Stevens was indicted on seven counts of failing to report gifts he’d received, including renovations to his house in excess of what he’d paid for, but mostly goods and services from oil tycoon Bill Allen. Sen. Stevens pled not guilty, and with an election coming up he demanded a speedy trial to clear his name. The trial began on September 25.

Soon after the trial began in Washington, D.C, the prosecutors came under fire for sending one of their witnesses home to Alaska without letting the judge or the defense know. The witness, Rocky Williams, then contacted the defense team and told them that he’d spent a lot less time working on Stevens’ home than the renovation company’s records indicated. That severely weakened the prosecution’s argument that the company had spent its own money doing the renovations.

Then it came out that the government had withheld Brady material. FBI records containing prior statements of a witness had been handed over to the defense, but the prosecutors — Brenda Morris, Nicholas Marsh and Joseph Bottini (pictured) — had redacted parts of the statements that were potentially exculpatory. This wasn’t affirmatively exculpatory material, but it was impeachment material, and should have been turned over.

A memo from Bill Allen was discovered during trial, in which Allen stated that Sen. Stevens probably would have paid for the goods and services, had he been asked to. The prosecution claimed that their failure to disclose it beforehand was an inadvertent oversight.

The judge was reportedly angered by all this, stating with respect to the Brady material that “it strikes me that this was probably intentional. I find it unbelievable that this was just an error.” Nevertheless, the judge did not declare a mistrial, and on October 27 the jury convicted Stevens on all seven counts.

Then in late December, FBI agent Chad Joy went public with the accusation that the prosecutors really had intentionally withheld exculpatory evidence, and had intentionally sent Rocky Williams back to Alaska to conceal him from the defense.

Now, as the New York Times reports, Joy has come forward with additional allegations of prosecutorial misconduct.

In his latest whistleblower filing, Joy claims that another FBI agent conspired with the prosecutors “to improperly conceal evidence from the court and the defense,” as the Times puts it.

“I have witnessed or learned of serious violations of policy, rules and procedures, as well as possible criminal violations,” Joy stated in his affidavit.

With respect to Rocky Williams, Joy stated that the witness was sent back to Alaska not because of ill health (the reason given by the prosecution), but because after preparing him for testimony, the prosecutors decided that his testimony would help the defense case. Joy stated that Nicholas Marsh came up with the idea, after Williams fared poorly in a mock cross-examination.

Joy stated that the prosecution team also tried to hide the Bill Allen memo that stated that Sen. Stevens would have paid for the items if he’d been asked to. Rather than an accident, as prosecutors claimed at trial, Joy now alleges that it was intentionally withheld.

In addition, Joy claims that fellow FBI agent Mary Beth Kepner had an inappropriate relationship with the star witness, Bill Allen. She almost always wore pants, he said, but on the day that Bill Allen testified, Joy says she wore a skirt, which she described as “a present” to Allen. Joy also states that Kepner went alone to Allen’s hotel room. Although Joy’s redacted affidavit doesn’t say it specifically, the defense team now claims that Kepner and Allen appear to have had a sexual relationship.

Joy also claims that FBI agents received gifts from Allen, including help getting a job for a relative.

The judge, Emmet Sullivan, has ordered a hearing to be held in two days, this Friday the 13th, on whether a new trial is warranted. If the judge determines that Sen. Stevens did not receive a fair trial, he could very well scrap the conviction and order a do-over. It would be anyone’s guess, at that point, as to whether the prosecutors would actually try the case again.

Watch this space for future developments.

Can Skilling Get a New Trial?

Friday, January 9th, 2009

Jeff Skilling

On Tuesday, the Fifth Circuit ruled on Jeff Skilling’s appeal from his conviction in the Enron case, upholding the conviction, but sending the case back for re-sentencing. Skilling may be able to raise a Brady issue on remand, as well, so the case doesn’t seem to be over. The opinion is 106 pages long, so we will summarize the ruling and its meaning for you here.

Skilling challenged his conviction, on the grounds that the government’s theory of “honest services” fraud was wrong. The government’s case let the jury decide on three purposes of Skilling’s conspiracy, one of which was to deprive Enron of the honest services of its employees. Because the jury returned a general verdict, if any one of those legal theories was insufficient, then the verdict must be reversed.

Skilling focused on the honest services theory, arguing that it was insufficient because his actions were done to give Enron a higher stock price, so it was in the corporate interest. He didn’t act in secret, and wasn’t self-dealing.

In making this argument, Skilling relied on the Circuit’s previous Enron case, United States v. Brown, 459 F.3d 509. In that case, a loan secured by Nigerian barges was fraudulently booked as revenue. The defendants in that case were specifically ordered by their CFO, Andy Fastow, to carry out the deal. Not only did they believe that Enron had a corporate interest in the scheme, and was a willing beneficiary of it, but their superiors ordered and approved their actions. Furthermore, they were paid more depending on whether they successfully achieved the goal.

The Court held that Skilling’s reliance on Brown was misplaced. The Brown rule absolves low-level employees of liability for honest-services fraud when:

1) the employer creates a particular goal,
2) the employer aligns the employees’ interests with the employer’s interest in achieving that goal, and
3) higher-level management authorizes or orders improper conduct in order to reach the goal.

Here, the first two conditions were met, but the third was not. Condition 1 was met when Enron created a goal of meeting Wall Street earnings projections. Condition 2 was met as Skilling got paid more if Enron met those projections. But condition 3 was not met, as there was no evidence that anyone besides Skilling authorized his conduct. The Board tacitly approved several of the underlying transactions, but never authorized him to engage in fraudulent conduct.

Because the third condition was not met, the Brown rule does not absolve Skilling of his liability. His conviction was therefore upheld.

With respect to sentencing, Skilling argued that the district court got the Guidelines calculation wrong, and that the sentence is unreasonable under §3553. The Court didn’t get to the §3553 issue, because it held that the Guidelines calculation was indeed incorrect, and a court has to do the Guidelines right before the §3553 factors come into play.

Skilling appealed a §3C1.1 two-level enhancement for obstruction of justice, and a §2F1.1(b)(8)(A) four-level enhancement for jeopardizing a financial institution.

The §3C1.1 enhancement was based on a determination that Skilling perjured himself as to his sale of Enron stock right after he resigned from the company. He’d tried to sell his stock while still CEO, but it would have had to be reported. So he resigned, then tried to sell his stock. But then September 11 happened, and he wasn’t able to sell until September 17. Skilling testified to the SEC that his order to sell on September 17 was due to his concerns over the market’s reaction to 9/11. The judge decided that was perjury.

On appeal, skilling didn’t argue that it wasn’t perjury. Instead, he argued that the court should have suppressed his SEC testimony in the first place, because the SEC misled him as to the fact that the investigation was criminal in nature.

The Circuit, however, pointed out that suppressible evidence can still be used at sentencing, and none of the exceptions to that rule apply here. The Court also found no justification for the original perjury. So the two-level enhancement was proper.

The §2F1.1(b)(8)(A) enhancement was based on the finding that Enron’s retirement plans were “financial institutions” for the purposes of that Guideline. Retirement plans aren’t specifically mentioned in the Guideline’s definition, which enumerates a long list of included entities. Various kinds of pension funds are included, however. And the list does include a catch-all “any similar entity.”

With respect to “pension funds,” the Guidelines don’t define the term. But a pension requires more than just employee investment for later payout — a pension has definitely determined payouts. Here, the retirement funds didn’t have specific benefits, they were just there as a pool for funding any benefits that might be given. So the Court decided they didn’t count.

With respect to the catch-all, apart from pension funds, the Guideline definition lists classic financial institutions like banks, investment houses, and the like. The Court did not want to expand the definition to declare every corporate retirement plan to be a financial institution.

Because the retirement plans weren’t financial institutions, the four-level enhancement was improper. So Skilling’s sentence was vacated, and the case was remanded for resentencing.

In addition to these main issues, the Court also rejected Skilling’s other challenges to his trial. Giving a “deliberate ignorance” instruction was at worst harmless error. None of the other jury instructions were problematic. The venue was proper. There was no prosecutorial misconduct.

Interestingly, however, the Court specifically stated that Skilling can raise Brady issues on remand. An FBI interview note showed that Andy Fastow didn’t think he had discussed a certain list with Skilling. This was omitted from the formal “302” report provided to the defense. Skilling claims that Fastow was talking about a list of talking points that Fastow had testified at trial he actually had discussed with Skilling.

The Circuit found this troubling, but the trial court never saw the notes or ruled on this claim, so nothing could be decided on appeal. But the Court instructed that “Skilling must bring this claim to the district court before we can address it.”

Therefore, Skilling might be able to get a new trial! If Skilling can show that there was a Brady violation, this case could be far from over. The government claims that the list in question is unrelated to the case, however, so we’re just going to have to wait and see.