Wiretaps suggest Stevens was cheap — but crooked?

WASHINGTON — Defense and prosecutors in Sen. Ted Stevens' criminal disclosure case wrangled over the admissibility of a wiretapped conversation Thursday where two of Stevens' friends spoke of his aversion to opening his own wallet.

"Ted gets hysterical when he has to spend his own money," Alaska restaurateur Robert Persons told the former chairman of oil-field services company Veco Corp., Bill Allen, in a conversation overheard by the FBI and quoted in court by a prosecutor.

Persons, founder of the Double Musky in Girdwood, Alaska, told Allen there was a reason for Stevens' reluctance: the senator "can't really afford to pay a bunch of money," he said.

The prosecutor, Assistant U.S. Attorney James Goeke of Anchorage, didn't cite a date for that conversation, nor was it directly connected to Veco's big remodeling project at Stevens' home in Girdwood. Rather, the conversation was about an investment by the three men and others in a partnership that owned a thoroughbred.

But the government said it illustrated a consistent pattern of behavior reflected in Stevens' seven-count indictment: that he took gifts that he should have disclosed. Stevens' defense attorneys said the conversation, and others the government is seeking to play to a jury, is irrelevant and prejudicial.

U.S. District Court Judge Emmet Sullivan didn't rule on the issue, one of several that defense lawyers and prosecutors argued about in open court ahead of the beginning next week of Stevens' trial on charges that he took more than $250,000 in labor, materials and furnishings from Veco and Allen starting in 2000, but failed to report the gifts on his annual Senate disclosures. The trial begins Monday in Washington, with at least two days of jury selection.

Allen has pleaded guilty to bribing state legislators and is expected to be a key witness against Stevens. Persons has testified before a federal grand jury under subpoena but has expressed reluctance to speak ill of Stevens, whom he still considers a friend. Persons lives above his Girdwood restaurant and routinely kept an eye on Stevens' home when Stevens and his wife, Catherine, were in Washington.

The open-courtroom conference Thursday before U.S. District Court Judge Emmet Sullivan was called to allow defense and prosecution to bring up unresolved issues of evidence, law and procedure. Sullivan decided some questions but left others for the trial itself.

Sullivan ruled that the Stevens' lawyers were entitled to review the medical records of Allen's 2001 motorcycle accident, when he suffered a serious head injury. Allen, testifying last year in Anchorage at the trials of two state legislators, said the accident impaired his speech but not his memory or intellectual ability. Sullivan ordered both sides to respect Allen’s privacy and not disclose anything publicly until he rules whether the medical in-formation is relevant.

Also for reasons of privacy, Sullivan said the government shouldn't enter as evidence all 2,200 pages of Stevens' personal financial information, including credit card receipts. The government said the records would show that Stevens never paid Veco for the items it purchased for him, but Sullivan said the government should find another way to prove that.

The Persons-Allen phone call was among eight recorded conversations of third-party conversations that the defense sought to keep from the jury. Defense attorney Robert Cary characterized the call as "triple hearsay" as it related to Stevens.

Stevens, Persons, Allen, Allen's son Mark and six other friends created a company called Alaska's Great Eagle LLC in 2004 to own race horses. Persons, who managed the partnership, was concerned about having to ask the others for more investment money.

In another call, Washington lobbyist Richard Ladd told Allen that Stevens had asked him to call to see if he could get a job for one of Stevens' sons.

The FBI began tapping Allen's phones in 2005 during the covert stage of its investigation of public corruption in Alaska. The investigation became public in a series of raids in August 2006. Among the targets was the legislative office of Ted Stevens' son Ben, then the president of the Alaska State Senate.

Sullivan again addressed Stevens' protections under the Constitution’s Speech-or-Debate Clause, which prevents prosecutions for normal legislative activities. Sullivan had earlier rejected a bid by Stevens to dismiss his indictment under the clause, but on Thursday said it still could bar the government from introducing some evidence. He told the defense it could make objections each night based on expected evidence to be in-troduced the next day of trial.

That led to a moment in the courtroom that sounded more like an Abbott-and-Costello, "Who’s On First" routine than an argument over evidence.The defense objected to the prosecution using a fish statue on Stevens' deck as evidence of an unreported gift. The statue was a gift to the Stevens library by the Kenai Sportfishing Association, Cary said.

Not so, said Edward Sullivan, a prosecutor in the Justice Department's Public Integrity Section. The bronze statue was worth $29,000. The Stevens library didn't really exist, he said.

The judge looked up and wondered why they were still talking about Speech-or-Debate issues. He's already ruled that Stevens wasn't protected by them.

“Fish statutes,” he said. Legislation on commercial fishing has been one of Stevens' specialities, but the question was a nonsequitor. After a moment of head-scratching, the courtroom erupted in laughter.