April 7 (Bloomberg) -- A U.S. judge set aside the political corruption verdict that probably cost ex-Alaska Senator Ted Stevens re-election and ordered an investigation into whether prosecutors’ “shocking” conduct was criminal.
U.S. District Judge Emmet Sullivan said he had a duty to determine the “potential for obstruction of justice” by six federal prosecutors.
“In nearly 25 years on the bench, I’ve never seen anything approaching the mishandling, the misconduct, I’ve seen in this case,” Sullivan said in Washington at the outset of what he called “a dramatic day.”
Sullivan appointed a special prosecutor, Washington lawyer Henry Schuelke, to conduct the probe of the government lawyers. He ordered the Justice Department to share files with Schuelke to help him determine whether the prosecutors are guilty of criminal contempt.
The instances of misconduct are too serious and too numerous to be left to a Justice Department investigation that has “no outside accountability,” the judge said.
Public Integrity Section
Those to be investigated are William Welch II, chief of the Justice Department’s public integrity section, Brenda Morris, the principal deputy director, and four other members of the trial team. The section prosecutes public officials and government employees for corruption.
(Attorney General) Holder has declined to say whether the prosecutors committed any wrongdoing, saying he wants to await the results of an internal investigation.
The judge said he was frustrated with the apparent lack of progress in that investigation, saying, “to date, the silence has been deafening.”
“We would like to know if the AIG counterparty payments, as made, were in the best interests of the taxpayers,” lawmakers led by Cummings said in a March 25 letter to Barofsky.
Competing insurers including Ambac Financial Group Inc. and the predecessor of Syncora Holdings Ltd. reached agreements with banks such as Citigroup Inc. and Merrill Lynch & Co. to cancel similar contracts at discounts to their expected losses.
The Government Accountability Office said last month that the Treasury should demand that AIG seek concessions from banks as a condition of the latest U.S. aid.
“If such concessions are not considered to be in the government’s interest, the reasons should be clearly articulated and explained,” the congressional auditors said.