On the night of Oct. 2, a group of about 10 prosecutors and FBI agents gathered for an all-hands meeting at the Bond Building on New York Avenue Northwest in Washington, D.C., the headquarters of the Justice Department’s Public Integrity Section.

Six days into the trial of Sen. Ted Stevens, R-Alaska, prosecutors realized they had failed to turn over a document that could aid the lawmaker’s defense. The group debated what to do with it.

U.S. District Judge Emmet Sullivan had already lashed prosecutors once for releasing a witness without telling him — or Stevens’ lawyers. Disclosing the information, an FBI document about the government’s chief witness dated February 2007, would likely dig the prosecution into a deeper hole with the judge.

It did. They turned over the document that night to Stevens’ Williams & Connolly defense team. The next morning in court, Sullivan was indignant. “How does the court have any confidence that the Public Integrity Section has integrity?” the judge asked.

Sullivan whacked the government with a violation for failing its obligation to provide potentially exculpatory evidence over to the defense in a timely manner. The judge’s rebuke triggered an internal Justice investigation that has since swelled to include an FBI agent’s whistleblower complaint, allegations that prosecutors presented false evidence to the jury and a contempt finding against three Justice lawyers.

The Williams & Connolly team, led by Brendan Sullivan Jr., pressed the judge repeatedly to dismiss the case. But in the end, Justice made the decision for him.

On April 1, Attorney General Eric Holder Jr. announced he was moving to dismiss the case with prejudice — five months after Stevens was convicted of public corruption charges. In its motion to dismiss, the Justice Department said it found more government evidence that Stevens’ lawyers should have received. The move to dismiss the case is more than an embarrassment for the Public Integrity Section. It presupposes a shake-up in the section’s leadership and invites a new era of heightened scrutiny from judges, defense lawyers say, though history shows prosecutors seldom face criminal charges for misconduct.

The Stevens case also gives prosecutors new impetus to err on the side of disclosure, a welcome prospect for defense lawyers who say the government has been increasingly comfortable with playing hide the ball in discovery.

“The more instances like this where disaster happens, maybe prosecutors will think more about turning over evidence instead of nitpicking around,” said Orrick Herrington & Sutcliffe white-collar litigation partner Michael Madigan. “Not only has the case been thrown out, now the prosecutors are under investigation. That’s certainly going to get the attention of prosecutors around the country.”

NEW INFORMATION

Holder had only been attorney general for 11 days when, on Feb. 13, Judge Sullivan issued his contempt holding against William Welch II, the Public Integrity chief; Brenda Morris, the principal deputy chief and lead trial prosecutor; and appellate section supervisor Patricia Stemler. Sullivan found the officials violated court orders to turn over internal documents tied to an FBI whistleblower’s complaint, which alleged prosecution and FBI misconduct in the Stevens case. Holder began reviewing the matter in earnest at that point, Justice officials said.

During an afternoon meeting March 31, he issued the order to scotch the indictment. A hearing is set for today.

The October incident was just the first instance where the Stevens prosecutors were accused of hiding exculpatory evidence from the defense team. Holder’s decision was based in part on prosecutors’ notes discovered by department veterans Paul O’Brien, David Jaffe and William Stuckwisch, who replaced the trial prosecution team after the contempt finding.

The three lawyers were preparing for an April 15 status hearing when they found notes from two prosecutors taken during an interview in April 2008 of the government’s chief witness, Bill Allen, a longtime Stevens friend and wealthy oilman in Alaska. The notes contradicted testimony Allen gave at trial regarding the value of renovations on Stevens’ chalet and to what extent Stevens was billed for the work. Stevens, who maintained he paid for all the work at his home for which he received bills, was accused of failing to report more than $250,000 in home repairs and gifts. The new information could have been used to undercut Allen’s credibility — a focus of the Williams & Connolly defense strategy.

Holder found that the prosecution failed its obligation to turn over information. “In light of this conclusion, and in consideration of the totality of the circumstances,” Holder said in a statement, the Stevens case should be dismissed.

SWITCHING LEADS

The announcement marked the end of a case fraught with problems. There was the juror who lied about her father’s death to jet off to California to watch a horse race, and another juror whose violent outbursts during deliberation caused further delay.

Even before Judge Sullivan’s many reprimands, before Brendan Sullivan and co-counsel doused the government with motion after motion to dismiss, the case had its kinks.

Days before Stevens was indicted, the Criminal Division’s top brass assigned Morris as lead prosecutor, current and former Justice Department officials say. Morris, who joined the Public Integrity Section in 1991, is admired among former colleagues as one of the best prosecutors in the section. The native Washingtonian and career prosecutor is known for her high energy and snap one-liners at trial.

But the move, the current and former Justice officials say, rankled Welch and the prosecutors who built the case — including Public Integrity trial attorneys Nicholas Marsh and Edward Sullivan. Marsh and Sullivan were Public Integrity’s point men on the ground in Alaska. Marsh was dispatched in 2004 — the same year he joined Public Integrity after a two-year stint at the New York offices of Hale and Dorr. Sullivan joined the section in 2006 from the department’s Commercial Litigation Branch and teamed with Marsh on putting corrupt Alaskans in prison.

By the time Stevens was indicted in July, Marsh, Sullivan and Assistant U.S. Attorneys James Goeke and Joseph Bottini had successfully prosecuted seven defendants in Alaska on corruption charges.

Objections to the last-minute move to add Morris were overruled by Matthew Friedrich, the head of the Criminal Division at the time, and Rita Glavin, his principal deputy, the officials say. Critics of the decision say prosecutors and agents lost valuable time familiarizing her with a case that hurtled from indictment to trial in about two months.

Stevens, in the throes of his seventh campaign for the Senate, wanted a verdict before Election Day.

MAKING HISTORY

The Stevens trial was a historic moment for the prosecution team. Until a jury found Stevens guilty of seven counts of false statements for concealing hundreds of thousands of dollars’ worth of gifts and home renovations on his Senate disclosure forms, no sitting U.S. senator had been convicted in 28 years.

But it’s the prosecutors who are now facing scrutiny. The lingering uncertainty about credibility could limit roles in pending cases, former Public Integrity lawyers say.

The Office of Professional Responsibility investigation will hinge on whether the prosecution team did anything intentional to thwart due process or whether mistakes were excusable lapses in judgment that happened amid the breakneck pace of the trial. If the OPR finds intentional misconduct, punishment could range from referrals to state bars to recommendations that criminal charges be filed. But former prosecutors say criminal charges are unlikely.

In recent years, Richard Convertino, a former assistant U.S. attorney in Detroit, was one of the few to be prosecuted for criminal misconduct — a case that was handled by the Public Integrity Section. Convertino, who was acquitted, noted in court filings that a prosecutor is more likely to be struck by lightning than to be indicted by the government for misconduct. (The brief reported that the odds of getting zapped are about one in 5,000, according to the National Weather Service; the odds of a prosecutor being indicted are one in 5,500.)

Convertino said he would like “to see the same level of vigor and investigative authority” of the Public Integrity Section turned on the Stevens prosecutors.

“If OPR does a full, fair, and honest investigation and they concluded that it was a mistake, it will never carry weight because it’s an internal investigation,” said Convertino, who maintains he was prosecuted for filing a whistleblower suit against Justice. “There needs to be some kind of fair and neutral assessment about what happened in that case.”

Several former Public Integrity officials, who declined to be named, say there’s going to be a leadership change to win back public confidence in the section. The Justice Department declined to comment on whether any of the prosecutors involved in the Stevens case had been taken off cases. The prosecutors who handled the case either declined to comment or didn’t return calls.

SULLIVAN’S WINNING HAND

Holder’s decision to drop the case is a hard-earned win for Williams & Connolly’s Brendan Sullivan. Stevens’ conviction would have amounted to the famed lawyer’s second consecutive loss in a criminal trial. He was lead co-counsel in the defense of former Cendant Corp. Chairman William Forbes, who was convicted of fraud in 2006 after two mistrials.

In closing arguments in the Stevens trial, Sullivan reached back to an image he used in the Forbes closing: Only a person looking at the world through a dirty lens could possibly convict the senator, he told the jury. The line didn’t work in Forbes — or in Stevens. But the loss in Stevens only lasted five months. Forbes is serving a 12-year prison sentence.

The press-shy Williams & Connolly released a statement soon after Holder’s announcement last week. Sullivan gave Holder high praise for dropping the case, calling the attorney general “a pillar of integrity in the legal community.”

Later that day, the firm called a press conference — another shock. Sullivan hurried through a crowd of reporters and positioned himself behind a lectern in the firm’s small ground-floor conference room. His partner Robert Cary stood beside him, stoically. “As many of you know, I never comment about matters in litigation,” Sullivan began. “Today is an exception.”

He then ticked off a list of the government’s sins: “violated the Constitution”; ignored “federal criminal rules”; contravened “applicable case law.” The event lasted four minutes. Sullivan and Cary then retreated to a side exit, as reporters shouted questions in their wake.

“How can he clear his name?” one reporter asked.

“His name is cleared,” Sullivan said. “He is innocent of the charges as if they’d never been brought.”

Lawyers in the white-collar criminal defense bar who closely watched the Stevens case say the reasoning behind Holder’s decision to dump the charges and verdict could benefit defense counsel in other cases. They say that the information that prosecutors failed to turn over to the defense consisted of prosecution notes — material that the government sometimes argues is exempt from disclosure.

“There isn’t going to be a gray area. If there is a judgment call, you make it in favor of the defense,” said Wendy Wysong, a former prosecutor and now a partner at Clifford Chance. The message Holder is sending, Wysong said, “is so much more important than the one case. This decision is going to have pretty serious ramifications.”

Stevens said in a statement that he “knew that there would be a day when the cloud that surrounded me would be removed. That day has finally come.”

The day has also come for him to decide whether he wants to pursue attorney fees — defense lawyers say Stevens easily shelled out at least $2 million — or walk away from the case as an 85-year-old former member of Congress who some could now see more as a victim of corruption than a scheming politician.

Going after attorney fees from the government is risky business for Stevens and his lawyers, who would have to convince Judge Sullivan that the prosecution was frivolous, said Michael Horowitz, a Cadwalader Wickersham & Taft partner in the business fraud and complex litigation group. “He may be best positioned now politically to leave the record as is,” Horowitz said. “He doesn’t need much more.”

This article originally appeared in Legal Times, a Legal affiliate based in Washington, D.C. •