Stevens case closed; prosecutors under fire

updated 7:54 p.m. ET April 7, 2009

WASHINGTON - Pumping his fist in triumph, former Alaska Sen. Ted Stevens swapped places with his prosecutors Tuesday, his corruption conviction dismissed and his accusers suddenly facing criminal investigation themselves.

It was a stunning turnaround for one of the legendary fighters in Senate history, a man known for a temper that matched his Incredible Hulk neckties. Run out of office following the conviction last October, Stevens gave his long-awaited victory speech in court as a judge wiped away the verdict.

The prosecutors, who around this time would normally be arguing for Stevens' prison sentence, were not in court. Kicked off the case following repeated accusations of withholding evidence, they're now the subject of a criminal contempt probe.

"In nearly 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.

Case cost Stevens his Senate seat
Sullivan appointed a special prosecutor to investigate Justice Department lawyers who repeatedly withheld evidence from defense attorneys and the judge during the monthlong trial. Stevens was convicted in October of lying on Senate forms about home renovations and gifts he received from wealthy friends.

The case cost Stevens, 85, a Senate seat he had held for 40 years. Once the Senate's longest-serving Republican, he narrowly lost to Democrat Mark Begich soon after the verdict.

Now, the case could prove career-ending for prosecutors in the Justice Department's public corruption unit.

After Sullivan dismissed the case, Stevens turned to his friends and held up a fist in victory as his wife and daughters broke into loud sobs.

"Until recently, my faith in the criminal system, particularly the judicial system, was unwavering," Stevens told the court Tuesday, his first public comments since Attorney General Eric Holder announced he would drop the case. "But what some members of the prosecution team did nearly destroyed my faith. Their conduct had consequences for me that they will never realize and can never be reversed."

The unraveling of the case overshadowed the facts of a trial in which Stevens was shown to have accepted thousands of dollars in undisclosed gifts.

Sullivan appointed Washington attorney Henry Schuelke to investigate contempt and obstruction by the Justice Department team. Schuelke is a former prosecutor and veteran defense attorney who oversaw a Senate Ethics Committee investigation into influence-peddling allegations against former New York Sen. Alfonse D'Amato in 1989.

Mark Wilson / Getty Images Ted Stevens walks with is daughters as they leave the Federal Courthouse, April 7, 2009 in Washington, D.C.

Sullivan said the misconduct was too serious to be left to an internal investigation by the Justice Department, which he said dragged its feet before investigating. He criticized former Attorney General Michael Mukasey for not responding to complaints: "Shocking, but not surprising," Sullivan said.

He worried aloud about how often prosecutors withhold evidence, from Guantanamo Bay terrorism cases to public corruption trials. He called on Holder to retrain all prosecutors in the department.

The decision to open a criminal case raises the question of whether the prosecutors, who include top officials in the department's public corruption unit, can remain on the job while under investigation. The investigation carries the threat of prison time, fines and disbarment.

Investigation into other public officials
It also threatens to derail the investigation into other public officials, including Rep. Don Young, R-Alaska, who has been under scrutiny by the same prosecutors now being investigated. Young's lawyer attended Tuesday's hearing but said nothing after it ended.

Subjects of the criminal probe are lead prosecutor Brenda Morris, the department's No. 2 corruption official and an instructor within the department; Public Integrity prosecutors Nicholas Marsh and Edward Sullivan; Alaska federal prosecutors Joseph Bottini and James Goeke; and William Welch, who did not participate in the trial but who supervises the Public Integrity section and has overseen every major public corruption case in recent years.

Judge Sullivan repeatedly scolded prosecutors for their behavior during trial. After the verdict, an FBI whistleblower accused the team of misconduct and Sullivan held prosecutors in contempt for ignoring a court order.

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