William Welch II, the former head of the Department of Justice’s Public Integrity Section who was nominally in charge of the ill-fated prosecution of Sen. Ted Stevens, has told associates he is leaving the DOJ, according to a report from National Public Radio.

His departure was confirmed today by a notice of his withdrawal in the prosecution of former Central Intelligence Agency officer Jeffrey Sterling, accused of leaking classified documents. The filing, in the United States Court of Appeals for the Fourth Circuit, said Welch is leaving for a “job in the private sector.”

Bill Welch (© 2009 The Republican Company

Welch has described his impending departure as a “retirement,” according to the NPR report. NPR said neither the DOJ nor a representative for Welch would comment.

Welch will leave the DOJ as the fallout from the Stevens case continues. A more than 500-page report by special investigator Henry F. Schuelke III revealed that Welch blamed then-Criminal Division leaders Matt Friedrich and Rita Glavin for much of the debacle. In particular, he said their decision to install his deputy, Brenda Morris, as leader of the prosecution essentially sidelined him, making him a superviser without full supervisory authority.

Having such internal conflict come into public view was undoubtedly painful for all involved. Welch seemed particularly stung by Schuelke’s assertion in a later congressional hearing that he had “abdicated” his responsibility, bringing a sharp rebuttal from Welch attorneys William W. Taylor III and Mark H. Lynch, asserting of Schuelke, “We are confident he misspoke.”

Welch has also come under criticism for his leading role in the Barack Obama administration’s crackdown on leaks to the media from government officials. His prosecution of National Security Agency whistleblower Thomas Drake fell apart, with former Justice Department spokesman Matthew A. Miller later conceding that “the outcome of the case probably shows that it was an ill-considered choice for prosecution, given some of the mitigating factors.”

Welch had been expected to lead the prosecution later this year of Sterling, the former CIA officer who is accused of leaking classified documents to a reporter for The New York Times.  That case, too, has been marked by assertions that DOJ prosecutors have not been entirely forthcoming in turning over material to the defense, as Main Justice reported.

Still the subject of inquiries on Capitol Hill, the Stevens affair produced accusations that some prosecutors intentionally withheld evidence that might have help the defense of the powerful Alaska Republican, who was convicted in 2008 of gifts in the form of home renovations from an Alaska oil-services tycoon.

Stevens lost his seat in the 2008 election. But Attorney General Eric Holder moved for dismissal of the charges after learning of missteps by the prosecutors. U.S. District Judge Emmet G. Sullivan of the District of Columbia, who presided over the Stevens trial, angrily denounced several prosecutors, declaring he had never seen such misbehavior in his quarter-century on the bench. (Stevens died in a plane crash in 2010.)

Welch is a Democrat from Massachusetts, where he burnished his reputation going after public corruption. But his aspirations to be United States Attorney in his home state were extinguished by the repercussions of the Stevens affair.

This article has been updated to reflect the filing today of Welch’s notice of withdrawal from the Jeffrey Sterling case.

The current issue of the Washingtonian magazine includes a long piece about the Obama administration’s controversial leak investigations – with a star turn by former Public Integrity Section chief William Welch II.

Bill Welch (© 2009 The Republican Company)

As Main Justice reported in April, Welch is now investigating leaks of government information to journalists, after stepping down as head of Public Integrity last year amid the crumbling of the public corruption case against ex-Sen. Ted Stevens (R-Alaska).

“Barack Obama hates leaks, and thanks to a tenacious prosecutor, the Justice Department is on its way to setting a record for leak prosecutions,” the Washingtonian wrote, referring to Welch.

Welch is leading the investigation into the identity of a source for New York Times reporter James Risen’s book, “State of War,” which included a chapter about a botched covert CIA operation in Iran. He is also prosecuting former National Security Agency official Thomas Drake, who is accused of providing a Baltimore Sun reporter with information about wasteful spending at the NSA.

Welch may also be tapped for a case against Fox News journalist James Rosen, who reported last June that U.S. intelligence officials warned Obama that North Korea might perform a second nuclear test in protest of a U.N. Security Council resolution condemning its latest test, the magazine reported.

The Washingtonian piece includes a large glossy photograph of Welch. It also discusses the controversies surrounding the Justice Department’s investigation, including the DOJ’s subpoena of Risen for information about his source.

Risen’s book, for example, details a failed covert military operation codenamed Merlin aimed at reducing the pace of Iran’s nuclear program. He described secret meetings, dialogue with operatives and intelligence gaffes, incurring the wrath of the CIA.

Welch was also assigned to the case against Drake, who was charged in June with violating the Espionage Act by disclosing information about NSA spending.

For months Drake lobbied internally against an agency decision to adopt costly intelligence software instead of a cheaper, promising alternative before eventually abandoning traditional channels, according to a profile by the New York Times. The government alleges he took secret NSA reports home, collected information from unwitting colleagues and sent tips via an encrypted e-mail account to the Sun reporter.

The irony is that Welch himself came under investigation in the Stevens probe because of the actions of a government whistleblower.

Following Stevens’ conviction in 2008, FBI agent Chad Joy filed a complaint alleging the lead FBI agent on the case engaged in inappropriate relations with the government’s key witness, including a meeting alone at a hotel room.

He also claimed that a federal prosecutor under Welch attempted to dissuade a defense witness from testifying to keep out evidence that would contradict a government witness’s testimony.

Joy asked for protection as a whistleblower, and during a December 2008 hearing, Welch and other prosecutors leveraged his request to argue the court should seal the case to protect his identity — the very argument he’ll attempt to counter in future leak cases.

Sealing the case would have kept Stevens’ lawyers from the material in question.

A month later, however, Welch reversed his argument, saying Joy should not be granted whistleblower protection. The judge asked for an explanation from Attorney General Eric Holder, writing in a letter that he believed several attorneys may have “withheld important information from the court,” the Washingtonian reported.

Holder moved to drop the case against Stevens after an internal DOJ probe found irregularities with evidence handling. U.S. District Judge Emmet Sullivan, who presided over the Stevens trial, granted the motion to dismiss and also ordered a criminal contempt of court investigation of the prosecutors, which is ongoing.

Amid the fallout, Welch left the Public Integrity Section to return to Massachusetts, where he continued to work in the Criminal Division.

Criminal defense attorney David Hoose told the Washingtonian Welch is a smart choice for the leak cases.

“Once he sets his sights on someone, he’s like a piranha,” he said. “He’s on them with everything he’s got. Yet at the same time, I would not expect him to cheat.”

Bill Welch (© 2009 The Republican Company)

The former chief of the Justice Department’s public corruption unit, who stepped down amid a criminal investigation of his team’s handling of the prosecution of former Alaska Sen. Ted Stevens, emerged Thursday as the lead prosecutor in a high-profile leak case.

William Welch II, who was chief of Public Integrity Section from 2007 to 2009, was named in a Justice Department news release announcing the indictment of Thomas Andrews Drake, a former National Security Agency official accused of providing classified information to a newspaper reporter.

Late last year, Welch returned to Springfield, Mass., where he had been an Assistant U.S. Attorney before joining the Public Integrity section as a deputy chief in 2006. He remains an employee of the Criminal Division with the title “Senior Litigation Counsel” but is based in the U.S. Attorney’s Office for the District of Massachusetts. The Drake indictment was filed in Maryland on Wednesday with Welch’s signature.

The department recently selected Jack Smith, a former Assistant U.S. Attorney in Brooklyn, to replace Welch as section chief. Raymond Hulser, who will be Smith’s Principal Deputy, has led the section on an acting basis since Welch’s departure.

Welch’s former Principal Deputy in the Public Integrity Section, Brenda Morris, who is also under investigation, left Washington under similar circumstances. In September, she moved  to U.S. Attorney’s office in Atlanta for personal reasons but is still identified by the department as Senior Litigation Counsel in the Criminal Division.

She, too, recently surfaced in a high-profile public corruption investigation involving Alabama lawmakers and gambling legislation.

The cases are the first public indication that the prosecutors have continued to handle sensitive matters for the department since Stevens’ conviction on false statement charges was thrown out roughly one year ago. A court-appointed prosecutor is investigating whether the six lawyers involved in the prosecution violated criminal contempt statutes by withholding evidence favorable to Stevens’ defense.

The department’s Office of Professional Responsibility is conducting a separate investigation. Both probes are near completion, people familiar with them say.

Nicholas Marsh, another member of the Stevens trial team, has also been in the public eye since his transfer out of the Public Integrity Section last summer. As a lawyer in the department’s Office of International Affairs, Marsh was involved in requesting the extradition of Roman Polanski to face sentencing in the U.S. for having sex with a minor three decades ago.

The Senate Judiciary Committee has released questionnaires for an additional five U.S. Attorney nominees. Information from their Office of Government Ethics disclosures will be added as it becomes available.

• Sally Quillian Yates, Northern District of Georgia
• Anne M. Tompkins, Western District of North Carolina
• William J. Hochul, Jr., Western District of New York
• Andre Birotte Jr., Central District of California
• William N. Nettles, District of South Carolina

Henry F. Schuelke III is nearing the end of his investigation of six Justice Department lawyers involved in the botched 2008 prosecution of then-Sen. Ted Stevens (R-Alaska), The Washington Post reports.

Judge Emmet Sullivan, of U.S. District Court for the District of Columbia, tapped Schuelke in April to determine whether the lawyers intentionally withheld material from Stevens’ defense. According to the Post, Schuelke has scheduled interviews with the six lawyers.

The interviews are expected to wrap up in January. Scheulke has already reviewed thousands of documents related to the case, which Attorney General Eric Holder moved to dismiss after learning of prosecutors’ lapses in sharing information and witness statements with the defense.

Earlier this week, Inspector General Glenn Fine said restoring confidence in the department in the wake of the Stevens case was among the department’s highest priorities. The Stevens debacle has prompted a series of reforms, including additional training for prosecutors.

The Justice Department on Thursday published the job announcement for Public Integrity Section chief, touching off a nationwide search for the next leader of the Criminal Division’s corruption-fighting squad.

William Welch II, who had been chief since early 2007, stepped down last Friday. He returned to the U.S. Attorney’s Office in Massachusetts, where he was an Assistant U.S. Attorney for more than a decade. Raymond Hulser is serving as acting chief of PIN.

Welch is under criminal investigation for his supervisory role in the public corruption case against then-Sen. Ted Stevens (R-Alaska). The Justice Department moved to dismiss the case earlier this year, after prosecution errors came to light. Brenda Morris, the former principal deputy chief, moved to Atlanta in September for personal reasons. Morris, who is also under investigation, remains a trial lawyer in the Public Integrity Section.

According to the announcement, the chief’s job fetches between $117,787 and  $177,000 a year. The application period closes on Dec. 2.

Here’s the job summary:

The incumbent serves as the Chief of the Public Integrity Section, reporting under the general supervision of the Assistant Attorney General for the Criminal Division and direct supervision of a Deputy Assistant Attorney General. The Chief provides leadership to the section within the Criminal Division that is responsible for overseeing the federal effort to combat abuses of the public trust by government officials.

The Public Integrity Section investigates, and, when warranted, prosecutes, corruption offenses involving public officials at all levels of government, election crimes, and campaign finance offenses. The Section leads the enforcement and regulatory communities in a coordinated, nationwide response to reduce public corruption across the country; develops and supports effective corruption reducing strategies and programs that can be deployed around the country; drives policy, legislative and regulatory reform; provides expert counsel in enforcement matters; and effectively collaborates with the 93 U.S. Attorneys’ Offices and with federal, state, and local law enforcement partners. The Section develops law enforcement networks and relationships, and by doing so, leads a dynamic, nationwide process that brings continuous improvement to the integrity of government.

Any takers?

Brenda Morris, who is under criminal investigation for her role as lead prosecutor in the dismissed case against former Alaska Sen. Ted Stevens, has left Washington and her position as Principal Deputy Chief of the Justice Department’s Public Integrity Section, according to department officials.

Brenda Morris is under investigation for her role in the dismissed Sen. Ted Stevens case. (Getty Images)

Morris, who remains a senior trial lawyer in the section, moved to Atlanta earlier this week for personal reasons, according to a person familiar with the situation. She began working out of the U.S. Attorney’s Office for the Northern District of Georgia on Sept. 21 and will be based there indefinitely.

“The department asked us to give her some space. We had an office, and we said, ‘Fine,’” said Gentry Shelnutt, the Atlanta office’s criminal chief.

The move represented a mutual decision by Morris and department leadership, one person familiar with the situation said. The parties agreed that Morris, who has been a Public Integrity prosecutor since 1991, and Principal Deputy Chief since 2006, could not carry out her managerial responsibilities from afar, so she shed her leadership role, this person said. The Principal Deputy position has not been filled.

A Justice Department spokeswoman said Morris would continue to handle a full caseload. ”Brenda is a valued senior trial attorney in the Criminal Division, and she continues to work on complex litigation matters across the country for the division,” said Laura Sweeney.

Morris came to the Stevens case late. The Criminal Division’s top brass assigned her as lead prosecutor days before the Alaska Republican was indicted in July 2008  on charges he’d failed to reveal on his Senate financial disclosure forms more than a quarter million dollars worth of gifts and home improvements from a political supporter.

Although Morris is widely admired for her trial skills, her last-minute appointment to the prosecution team grated on Public Integrity Section Chief William Welch II and the prosecutors who built the case, including then-Public Integrity trial attorneys Nicholas Marsh and Edward Sullivan, people familiar with the case have said. But their objections were overruled. Matthew Friedrich, the head of the Criminal Division at the time, and Rita Glavin, his principal deputy, wanted a veteran prosecutor first-chairing the trial, people familiar with their thinking have said.

In June, Marsh and Sullivan were transferred from Public Integrity to the Office of International Affairs, an assignment that keeps them out of the courtroom while Schuelke conducts his probe.

The longest-serving Republican in the Senate and a powerful member of the Senate Appropriations Committee, Stevens denied the charges. With a re-election battle looming, he moved for a speedy trial in hopes of clearing his name before voters went to the polls.

But last October, a jury in the District of Columbia convicted Stevens, then 85 years old, on seven counts. He  lost re-election last November to Anchorage Mayor Mark Begich (D) by fewer than 4,000 votes, or a 1.24% margin.

What appeared to be a major victory for the department soon turned into a high-profile embarrassment. A whistle blower, FBI Agent Chad Joy, accused the prosecution of mishandling evidence in this complaint. The trial judge, Emmet Sullivan, blasted Morris and other members of the prosecution team in a series of post-trial hearings and orders. In April, Attorney General Eric Holder moved to dismiss the case, concluding that prosecutors improperly withheld evidence favorable to Stevens.

After granting Holder’s request and voiding Stevens’s conviction, Sullivan appointed an outside counsel, Henry Shuelke III of Janis, Schuelke & Wechsler, to investigate Morris and her team for possible criminal contempt of court. PIN Chief Welch is also under investigation in the criminal contempt case. A parallel probe by the DOJ’s internal ethics watchdog, the Office of Professional Responsibility, is also underway.

Critics have said the team lost valuable time acquainting Morris with a case that sped from indictment to trial in about two months. But supporters say Morris added ballast  – despite the outcome — and Judge Sullivan publicly hailed her performance during closing arguments as among the best he’s ever seen.

Attorney General Eric Holder and other Justice Department leaders have been granted ethics waivers to allow them to review matters related to the botched Sen. Ted Stevens case, the White House disclosed Friday.

A team of Justice lawyers is under investigation for their handling of the public corruption case against the former senator from Alaska. U.S. District Judge Emmet Sullivan dismissed the charges against Stevens in April after a Justice Department review found that DOJ lawyers hadn’t made potentially exculpatory evidence available to the defense.

A special counsel appointed by Sullivan is conducting a criminal contempt probe of the DOJ lawyers, while the department’s Office of Professional Responsibility is conducting a parallel internal ethics review of the case. Two of the DOJ lawyers under scrutiny have hired counsel from the law firms where Holder, Criminal Division chief Lanny Breuer and Deputy Attorney General David Ogden were partners.

Administration ethics rules require Justice appointees to recuse themselves from official matters in which their former law firms represent parties. Holder and Breuer were partners at Covington & Burling LLP and Ogden at WilmerHale.

“[T]he particular circumstances surrounding these investigations are unusual, and present important issues even at this early stage of the process,” the letters from Assistant Attorney General for Administration Lee Lofthus said. “It is highly unusual to have an investigation by the court concurrent with an OPR investigation, and it raises jurisdictional issues and questions concerning the authority of the special counsel and the proper relationships between OPR’s investigation and that of the special counsel.”

Read the letter to Holder here, to Ogden here, and to Breuer here.

Patty Stemler, chief of the Criminal Division’s appellate section, is fighting a civil contempt finding by Judge Sullivan in the Stevens case. She is represented by WilmerHale’s Howard M. Shapiro and Mary Katherine Gardner. It is unclear who is represented by Covington. Covington’s Mark Lynch represents Public Integrity Section chief William Welch II (along with Zuckerman Spaeder LLP’s William Taylor.)

The waivers were issued in May. The White House disclosed them on Friday as part of a transparency effort. Norm Eisen, special counsel to the president for ethics and government reform, explained in a blog post here:

Several months ago, the public interest community suggested that we also make available in a central place limited waivers granted by other federal agencies besides the White House.  Today, we are releasing all ten such agency-granted waivers (none of which involve lobbying). The President’s Executive Order calls for an annual report to be completed in early 2010 that will include all waivers granted pursuant to the Order.  We are, however, pleased to make all of the pledge waivers granted to date by this Administration available now–more than four months early.

This article has been updated.

Justice Department lawyers last week chose not to withdraw corruption charges against two former Alaska lawmakers who argue that their convictions were the result of Brady violations, The Associated Press reported.

Prosecutors and attorneys for ex-state representatives Pete Kott and Victor Kohring couldn’t reach an agreement on how to move forward on the cases, according to court documents here and here. Now, it’s up to U.S. District Judge John Sedwick to decide in the next year whether they should get new trials.

DOJ lawyers told the court in June that they had discovered documents that should have been disclosed to defense counsel prior to trial. The former lawmakers are not serving prison time as they wait for the judge to rule in their cases.

Former DOJ Public Integrity Section prosecutors Nicholas Marsh and Edward Sullivan and Alaska-based assistant U.S. attorneys Joseph Bottini and James Goeke prosecuted the cases. The four lawyers, along with Public Integrity Section chief William Welch II and his Principal Deputy Chief Brenda Morris, are under criminal investigation for their roles in the bungled prosecution of former Alaska Sen. Ted Stevens.

Marsh and Sullivan were moved out of the Public Integrity Section to the Office of International Affairs earlier this summer. The other four prosecutors remain in their posts.

We’ve seen the first signs of life in Henry Schuelke III’s criminal investigation of the prosecutors who bungled the government’s case against former Alaska Sen. Ted Stevens.

Henry F. Schuelke III (photo by Susana Raab)

In a filing this afternoon, Schuelke asked U.S. District Judge Emmet Sullivan for the authority to take deposition testimony under oath and, if necessary, issue subpoenas to compel such testimony, as well as books, papers, documents, data or other materials that may be relevant to the investigation.

The filing asks permission to issue subpoenas to Public Integrity Section Chief William Welch II; his deputy, Brenda Morris; former PIN prosecutors Edward Sullivan and Nicholas Marsh (now lawyers in the Justice Department’s Office of International Affairs); Alaska-based Assistant U.S. Attorneys Joseph Bottini and James Goeke; FBI Special Agent Mary Beth Kepner; Bill Allen, the government’s star witness in the case; and his lawyer, Robert Bundy, of counsel at Dorsey& Whitney.

An FBI whistleblower accused Kepner, the lead agent on the case, of having an inappropriate relationship with Allen.

Sullivan promptly granted the order. Read it here.

The motion may suggest the next phase in Schuelke’s investigation, assuming the Justice Department has been cooperating fully with his requests for case materials. Sullivan dismissed the indictment in April and appointed Schuelke to handle the investigation after the government failed on numerous occasions to turn over materials that were potentially favorable to Stevens’ defense team.

The Justice Department’s Office of Professional Responsibility is also probing the Stevens case, and the Criminal Division is conducting a larger review of other Alaska-related public corruption prosecutions.

Click here for our recent profile of Schuelke.