Feds to drop charges against Clark

Posted: Sunday, October 10, 2010

Federal prosecutors have agreed to drop criminal charges against Jim Clark, former chief of staff for Gov. Frank Murkowski and a prominent Juneau attorney.

Federal prosecutors Friday told District Judge John Sedwick that the charge to which Clark pled guilty in 2008 is no longer a crime, following a U.S. Supreme Court ruling in an unrelated case last summer.

Clark did not return phone messages Friday.

As part of Clark's plea agreement, he had promised to testify against others involved in a bribery scheme under which then-VECO Corp. CEO Bill Allen sought support among state officials for lower oil taxes and a natural gas pipeline deal supported by Alaska's oil and natural gas leaseholders.

After the Supreme Court in June overturned the conviction of former Enron Corp. CEO Jeffrey Skilling under the federal "honest services" statute, Clark's attorney argued that his case should be dismissed as well.

Following Skilling's conviction being overturned, "the charge to which Mr. Clark pled guilty is no longer a crime," wrote Clark's attorney, Bruce Gagnon of Anchorage.

Gagnon did not return a phone message Friday.

Clark had pled guilty to soliciting money from VECO for Murkowski's re-election bid after Murkowski had successfully pushed through an industry-favored oil tax bill, and was attempting to get a natural gas deal.

According to the factual basis for the plea agreement, Clark worked with VECO executives to "facilitate a scheme in which VECO would pay approximately $68,550 in expenses related to the Governor's re-election campaign in a manner so that the public would be deceived and the payments would not be disclosed, as required by law."

Prosecutors though, used what was known as the "honest services" charge against Clark, alleging that he'd used United States mail and interstate wire communications in commission of the crime, but did not use a bribery charge.

United States Attorney for Alaska Karen Loeffler Friday acknowledged that the Department of Justice's prosecution had collapsed following the Skilling decision.

"The Information to which Mr. Clark pled guilty in this case charges him with engaging in an honest services fraud scheme that falls outside of the Supreme Court's new, narrowly tailored construction of that law," wrote Kevin R. Feldis, assistant U.S. Attorney.

And the plea agreement to which Clark pled guilty allows no other charges to be brought, Feldis wrote.

"The United States is bound by its commitment not to prosecute the defendant further for any offense arising out of the subject of the government's investigation," he said.

Prosecutors can only bring new charges against Clark if he were to violate the plea agreement, they said. His motion to dismiss the charge is not considered to be a violation.

Clark remains bound by his commitment to assist prosecutors as they request, Feldis noted.

Former Juneau Rep. Bruce Weyhrauch remains under indictment, and prosecutors have said they expect Clark to testify in his trial.

While federal charges against Clark may not be possible, it is not clear whether he might face state charges.

Alaska Department of Law spokesman Bill McAllister said they'd only just been notified of the dismissal.

"No one has had any time to address that, so basically 'no comment,'" he said.

Rep. Beth Kerttula, D-Juneau, praised the federal decision Friday.

"I'm really glad to hear that," she said.

She said Clark's seeking money for Murkowski "showed poor judgment," but that when confronted with what then appeared to be a violation of federal law he accepted responsibility.

"During this whole time frame of the prosecution, Jim is the only one who stood up and behaved honorably" in acknowledging what he'd done and assisting authorities, she said.

Weyhrauch successfully sought to have one charge against him, based on the honest services statute, dismissed. Other charges remain, and prosecutors have not yet said whether they'll proceed with those charges.

Murkowski was defeated in his re-election bid by Sarah Palin in 2006. After several Alaska legislators and others were convicted or pled guilty to corruption charges, Palin urged the Alaska Legislature to revisit the oil tax issue.

In response, they passed a new oil tax law she proposed called "Alaska's Clear and Equitable Share Act" during a special session in 2008.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.

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