David Ayres, then-Attorney General John Ashcroft’s chief of staff, apparently helped an associate of lobbyist Jack Abramoff secure $16.3 million in government funds for an Indian reservation jail in 2002, prosecutors said over the weekend.

The revelation that Ashcroft’s long-time top aide was involved in the controversial award for the Mississippi Band of Choctaw Indians came Sunday in this government court filing in the Kevin Ring case.

David Ayres (Ashcroft Group)

Ring is a former lobbyist who worked closely with the now-imprisoned Abramoff at Greenberg Traurig LLP in Washington. The ongoing Abramoff investigation has netted a slew of guilty pleas and one conviction from lobbyists, congressional aides, a congressman, and executive branch officials. Jury selection for Ring’s trial on public corruption charges is slated to begin today.

Ayers, who is now CEO of Ashcroft’s consulting firm, The Ashcroft Group, is not accused of any crime. But his name surfaced in connection with the notorious Choctaw jail last week, when Ring’s lawyers filed a motion asking U.S. District Judge Ellen Huvelle to compel the government to grant Ayres and his wife immunity to testify on Ring’s behalf.

David and Laura Ayres have indicated they will invoke their Fifth Amendment rights against self-incrimination if called to testify, a filing by Ring last week said. Ring argues he needs the couple’s testimony to refute government charges he offered them tickets to basketball games at the MCI Center in Washington with the intent of influencing David Ayres’s official actions. But prosecutors have declined to grant immunity, the Ring filing said. Read our previous coverage here.

“Neither Ayres has been willing to speak to the government, which consequently has no idea what either would say about those events,” the government said in its Sunday filing, which also noted that Ayres didn’t report the basketball tickets from Ring on his government financial disclosure forms.

It’s not entirely clear what’s going on here. The government’s refusal to grant Ayres immunity could mean he’s a target of the probe. But it didn’t allege in Ring’s 2008 indictment any direct connection between Ayres’s official actions and the basketball tickets he received from Ring.

Rather, prosecutors said they believe Ring was dangling perks before Ayres in order to secure his assistance in the future. “The evidence at trial will show that Ring hoped and intended that David Ayres would ‘pay … back’ Ring and his lobbying colleagues for those and other things of value,” Sunday’s filing said.

Ring, a former aide to then-Sen. Ashcroft (R-Mo.) in the late 1990s, was indicted in 2008 on broad charges he corrupted public officials in Congress and the executive branch by offering them free meals at expensive restaurants and tickets to concerts and sporting events in exchange for official acts. Access to Abramoff’s exclusive suite at the MCI Center was one of the draws for public officials, the government alleges. (The downtown Washington sporting and concert venue has since been renamed the Verizon Center.) Ring has denied the charges.

Part of the indictment focuses on Ring’s efforts to secure the jail grant for the Mississippi Band of Choctaw Indians, who had been Abramoff clients since 1995. Ring maneuvered to thwart a lower-ranking DOJ official’s recommendation that the $16.3 million grant for the jail be cut nearly in half, the indictment says.

In a Jan. 22, 2002, email to Abramoff marked “COMPLETELY Confidential,” Ring wrote that he’d heard the DOJ official in charge of the jail grant “had kicked the final decision on the jail upstairs” to more senior DOJ officials after pressure from Ring, the indictment says. Six days later, Ring held a teleconference with an unidentified “senior DOJ official,” the indictment says.

A few days later, DOJ awarded the tribe the entire $16.3 million grant, according to the indictment.

Afterwards, Ring lobbied the DOJ to grant a waiver from a requirement the jail construction project be awarded through competitive bidding, the indictment says.

In the filing Sunday, the government identified Ayres as a senior DOJ official who helped Ring secure the full grant for the jail. Moreover, the government said Ring later intended to seek Ayres’s help to circumvent the competitive bidding rules for the jail’s construction.

Ring, with Abramoff’s consent, gave Ayres tickets in March 2002 to the March Madness NCAA college basketball tournament at the MCI Center, prosecutors said in their Sunday filing. Ayres appears to be the unnamed DOJ official in the indictment about whom Ring emailed a lobbying colleague on March 16, 2002: “Glad he got a chance to relax. Now he can pay us back.”

Then in January 2003, Laura Ayres asked Ring for “several expensive tickets” to a professional basketball game at the MCI Center, telling Ring they were a birthday gift for her husband, the government filing said. Ring gave the tickets to her, with Abramoff’s approval, the filing said.

Ayres did not respond to a request for comment.

The Justice Department has blinked on Guantanamo.

The government now says it will no longer detain Mohammed Jawad as an accused war criminal, after holding him for nearly seven years. The Afghan, whose exact age isn’t known, is one of the youngest detainees at the American facility in Guatanamo Bay, Cuba. Human rights groups say he may have been as young as 12 when he arrived.

But in a notice filed Friday in federal court  in Washington, the government said it will continue to detain Jawad while the U.S. considers lodging criminal charges against him for allegedly throwing a hand grenade at U.S. officers in Kabul in 2002.

This is the first time the Justice Department has abandoned  its authority under the laws of war to detain a person at Guantanamo as an unlawful enemy combatant.  The government  did so after government lawyers acknowledged that Jawad was tortured at Guantanamo – and that his statements couldn’t be used as evidence.

In a July 16 hearing in Washington, federal judge Ellen Segal Huvelle called the case against Jawad “an outrage,” railing at government attorneys Kristina A. Wolfe and Daniel M. Barish of  the Civil Division’s Federal Programs Branch.

“Your case has been gutted, Mr. Barish,” she said, referring to the government’s inability to use statements obtained through torture. “[S]even years and this case is riddled with holes. And you know it. I don’t mean you. The United States Government knows it is.” Later, Huvelle said: “This is an unbelievable case.”

For now, the government’s stance means that Jawad, who was brought to Guantanamo as an adolescent, will be moved from Camp Six,  one of Guantanamo’s maximum security sections, to a less harsh setting at the facility.

If Jawad is not prosecuted in the U.S.  on charges of throwing a hand grenade and wounding two U.S. military officers and their Afghan translator in Kabul in 2002, he could be sent back home to Afghanistan, where he was first picked up by Afghan police after the attack.

In a statement Friday, Justice Department spokesman Dean Boyd said the department has to decide whether it had enough evidence to prosecute Jawad in criminal court.

Jawad’s lawyers think the move is designed to give the government more time to plan – in a case that’s long gone haywire.

Air Force Maj. David Frakt, who represents Jawad, said in an interview with Main Justice he has gotten information from “highly placed officials” in the Afghan government that  U.S. officials have been in talks with them about sending Jawad home.

He said the government has no lawful authority to hold Jawad at this point. And he said there’s no legal authority to extradite Jawad to the U.S. to be prosecuted.

Frakt said he and his co-counsel have been invited to meet with Justice Department lawyers next week to discuss Jawad’s case.

In the meantime, Jawad is the first person at Guantanamo to go from unlawful enemy combatant, to no longer an enemy.  Frakt said it’s an admission Jawad has been wrongfully detained for more than six years.

“They’ve never admitted that with anybody else,” he said.

Libby Lewis is a print and public radio journalist who formerly reported for National Public Radio.

A day after she declined to dismiss the government’s case against ex-Abramoff Associate Kevin Ring, U.S. District Judge Ellen Huvelle handed the government another win today.

Ring’s lawyers - Miller & Chevalier partners Richard Hibey, Andrew Wise and Timothy O’Toole - had moved to disqualify Public Integrity Chief William Welch II from case because he is under criminal investigation by a government witness. As we previously reported here , Welch voluntarily took himself off the case on June 9, though he will continue to be consulted to ensure the government fulfills its discovery obligations, according to court documents.

The judge had suggested  in a previous hearing that Justice should build a “wall” between Welch and the case against Ring, who is accused of lavishing lawmakers with free gifts, trips and meals, in return for helping his clients. Apparently, Welch’s partial recusal satisfied her.

“I don’t think there are any bias problems,” Huvelle said, swiftly denying the motion from the bench.

Welch is under investigation for his work on the prosecution of Ted Stevens, who’s case was dismissed after a fresh team of prosecutors dredged up documents — after trial — that could have aided in the former Alaska senator’s defense. U.S. District Judge Emmet Sullivan appointed Henry Schuelke III of Janis, Schuelke & Wechsler, to investigate Welch, his deputy, Brenda Morris, and four other prosecutors. The alleged conflict is this: Ring’s firm, Greenberg Traurig, hired Schuelke to conduct and internal investigation when the Abramoff scandal exploded in 2004. Now, he’s a key piece of the government’s case against Ring.

The Stevens case was invoked on numerous occasions during today’s hearing. Ring’s lawyers have made a broad request for communications among prosecutors and agents that would show what inducements cooperating witnesses recieved and whether they had been threatened. Huvelle was initially warm to the idea.

“I’m hoping these things don’t exist, but I’m not so stupid to think they don’t ever,” she said.

Prosecutors said the defense team’s request was unreasonable considering the scale of investigation. The government has six cooperating witnesses, who have been interviewed by around 100 agents and prosecutors from eight law enforcement agencies, said Public Integrity prosecutor Michael Ferrara. The government has already agreed to hand over all the memos and 302s from witness interviews,  which the defense could use to at trial, if they find inconsistent statements, Ferrara said.

After Huvelle understood the defense lawyers’ request to require the prosecutors to go beyond a search for e-mails and documents memorializing their discussions, she said simply, “I pass.” But she also she gave the defense team an opportunity to sharpen its request. The brief is due by July 1.

In a court filing late Friday night, the Justice Department disclosed that Public Integrity chief William Welch II voluntarily made the decision to pull himself off the prosecution team of a Jack Abramoff-related case. 

Welch’s partial recusal in the case came on June 9, the government filing said. That is nearly two months after U.S. District Judge Ellen Huvelle said during a court hearing that Justice should erect a “wall” to separate Welch from the public corruption case against ex-lobbyist Kevin Ring, and 10 days after Ring raised questions in a court filing about Welch’s handling of evidence during discovery.

The recusal did, however, come one day after Main Justice ran this story publicizing Ring’s allegations against Welch, who is also under criminal investigation by a court to determine whether he and other DOJ lawyers intentionally withheld exculpatory evidence from the prosecution team of then-Sen. Ted Stevens of Alaska.

The sparring between prosecutors and Ring has become increasingly tense. It also appears to be increasingly focused for both sides on winning the out-of-court public relations battle.

With the cloud of the Stevens investigation over PIN, Ring — a former associate of Abramoff accused of corrupting public officials and obstructing justice — is seeking to raise doubts about the section’s overall integrity in handling evidence. At the same time, the Stevens debacle has raised the stakes for the government in the Ring case. Another ruling that it had mishandled evidence would really smart.

The government has hit back at the defense team. This June 15 filing, for example, accused Ring of not reciprocating with the government in discovery sharing. 

In the brief filed Friday, the government said Welch has recused himself from the Ring case to avoid being a distraction:

It is apparent that the defendant will continue to use Mr. Welch’s supervision of the Public Integrity Section and the Stevens matter as an excuse for filing distracting motions.  Accordingly, Mr. Welch has determined to withdraw himself from supervision over the Ring prosecution. Mr. Raymond Hulser is now Acting Chief of the Public Integrity Section for the purposes of this prosecution.

The other strange wrinkle in this case involves Henry Schuelke III, the white collar investigations lawyer who just seems to be everybody’s good friend.

Ring lawyers raised conflict-of-interest questions about Schuelke, who will be a major witness against Ring and also happens to have been appointed by U.S. District Judge Emmet Sullivan to investigate Welch and other DOJ lawyers for possible criminal contempt in the botched Ted Stevens case. Ring is accused of lying to Schuelke during an internal investigation of the imprionsed lobbyist’s former firm, Greenberg Traurig. The firm hired Schuelke to conduct the internal probe in 2004.

Ring asked Huvelle to disqualify Schuelke from testifying against Ring, arguing that prosecutors might be reluctant to correct any misstatements by Schuelke for fear of angering the man who is also investigating Welch for criminal contempt. Other than Welch, only one other PIN lawyer is working on the Ring case, with the rest of the team from the District of Maryland. That PIN lawyer, Michael Ferrara, is not under investigation in the Stevens matter.

In the April court hearing, Huvelle expressed doubt that “Hank,” as she called Schuelke, would do anything that lacked integrity. Huvelle also noted in the hearing that Ring defense lawyer Richard Hibey is a friend of Schuelke. The government filing on Friday picked up that theme. It said:

The defendant has access to Mr. Schuelke, just as he would any other witness.  Lead defense counsel is known to be a long-time friend of Mr. Schuelke.  Indeed, defense counsel has admittedly already had a telephone conversation with Mr. Schuelke in which defense counsel inquired about his appointment as a special prosecutor.

The government also said in Friday’s filing:

It is not apparent that a lawyer of Mr. Schuelke’s stature would prefer to give uncorrected false testimony on the stand, rather than have his testimony corrected.  To “curry favor” with Mr. Schuelke, a prosecutor might be better served to refresh his recollection if that recollection were inaccurate, rather than leave a false statement uncorrected. 

The government added: “Mr. Schuelke’s testimony is important and relates to key issues in the overall case” against Ring.

One purpose of the government’s Friday night filing appears to be to correct the impression that Welch was “removed” from the Ring case. We reported here that Welch was taken off the case, and The Washington Post reported here that Welch and his deputy, Brenda Morris, who is also under investigation for criminal contempt, “have been moved into other roles” following the Stevens case and revelations that materials were withheld in other public corruption cases in Alaska.

The DOJ filing  in the Ring case says that Welch’s removal was voluntary.

However, the filing also says Welch ”will continue to be consulted whenever necessary to make sure that the government’s Brady, Giglio and other discovery obligations are being properly discharged,” according to the motion.

You mean, as he did in the Stevens case? Wow, what a mess.

A former associate of imprisoned ex-lobbyist Jack Abramoff said in a recent court filing that Public Integrity Section chief William Welch redacted exculpatory information from documents given to his defense during the discovery process.

The motion by lawyers for former lobbyist Kevin Ring, who is slated to stand trial in September on public corruption charges before U.S. District Judge Ellen Huvelle in Washington, raised the question of whether Brady violations by Public Integrity are “serial in nature.”

While it isn’t clear from Ring’s May 29  filing what exculpatory evidence Welch is alleged to have redacted, clues emerged in a hearing before Judge Huvelle in April. FBI interviews with Abramoff that were provided to the defense were “fairly heavily redacted” by Welch, defense attorney Andrew Wise of Miller & Chevalier said.

Michael Ferrara, a lawyer in Public Integrity, confirmed during the court hearing that Welch, his supervisor, had personally redacted the Abramoff 302s, as the FBI interview summaries are known. “The defense is correct. Mr. Welch did that,” Ferrara said.

The little-noticed filing by Ring underscores a big challenge for Public Integrity, a unit that’s basically been in melt-down since U.S. District Judge Emmet Sullivan in April ordered a criminal investigation into whether Welch and other DOJ lawyers intentionally withheld exculpatory information from the defense of then-Sen. Ted Stevens last year.

A DOJ review team found that government lawyers failed to hand over notes from an interview with their star witness that contradicted the witness’s sworn testimony at trial. At the request of Attorney General Eric Holder, Sullivan threw out the conviction and dismissed charges against Stevens for allegedly failing to disclose a gift in the form of home renovation services from a political supporter.  

Then last week, the Justice Department quietly transferred two lawyers who’d worked on the Stevens case out of the Public Integrity Section, The Washington Post reported. The lawyers were Nick Marsh and Edward Sullivan. But there’s been no apparent action against Welch, prompting “grumbling” among criminal division and other DOJ lawyers that lower-level line-attorneys are being made to take the fall, the Post reported. Indeed, the DOJ continues to issue news releases like this one and this one noting that Welch is head of the Public Integrity unit — not exactly tail-between-the-legs behavior. 

(Welch, by the way, had been angling to be named the U.S. Attorney in Massachusetts - aspirations that were obviously dashed by the Stevens debacle.)

The move to transfer Marsh and Sullivan came after the DOJ asked an appeals court to release from prison two former Alaska state lawmakers who’d been convicted in the department’s long-running public corruption probe in Alaska — the same investigation that snared Stevens. The department said it had uncovered instances of possible Brady violations just as it had found in the Stevens case.

Moreover, U.S. District Judge Paul L. Friedman ordered in December 2008 that the government turn over more information from FBI interviews with Abramoff to David Safavian, a former chief of staff in the General Services Administration who was also charged in connected with the lobbying scandal.

The judge said a book about the Abramoff affair contained information that arguably should have been turned over to Safavian for use in his 2006 trial because it was “favorable or potentially favorable evidence.” The Court of Appeals for the District of Columbia overturned Safavian’s original conviction and ordered a new trial. Safavian was convicted on retrial. . 

The wife and five children of imprisoned former lobbyist Jack Abramoff are living “just above the poverty line” and need access to a tax refund of more than $500,000 to pay off debts and help make ends meet, Abramoff attorneys told U.S. District Judge Ellen Huvelle in a filing yesterday, The Washington Post reported today.

Last month, the Justice Department took away his access to the funds that he was using to pay off the millions of dollars of his debt, The Post said. He has already used a “significant chunk” to help pay off bills including those from his attorneys and accountants, The Post said. He also used the funds to help repay loans he used to finance his stay in a federal prison in the Cumberland, Md. and help support his family which is now living on his wife’s salary of $38,000 a year, according to The Post.

Abramoff’s lead attorney, Abbe D. Lowell of McDermott, Will & Emery LLP, said the Justice Department was aware of Abramoff’s financial situation when he negotiated a plea deal in 2006 and it even helped process his tax refund, according to The Post.

“It could not have come as any surprise to DOJ that Mr. Abramoff would be receiving a tax refund DOJ officials repeatedly helped facilitate,” Lowell said in his court filing.

Last year, Huvelle sentenced Abramoff to a four year prison term for defrauding tribal clients. He was already serving a 5 year term for a prior conviction for fraud.

The Justice Department says that convicted lobbyist Jack Abramoff should not be allowed to use his tax refund of over $500,000 to pay back his lawyers, accountants and others because he has yet to pay restitution for the millions of dollars he defrauded from Indian tribes he represented, reports The Washington Post.

In prison since 2006, Abramoff received a $520,189 refund from the Internal Revenue Service on May 4.  Once the Justice Department was notified of the refund, it asked a federal judge yesterday to stop Abramoff from spending the money and account for the money he has already spent.

Under the restitution order by U.S. District Judge Ellen S. Huvelle, Abramoff and his former associate Michael Scanlon still owe more than $23 million to the Indian tribes.  While he’s not expected to make payments while in prison, “Abramoff was required by statute to apply the value of that refund to his restitution obligation, notwithstanding that the money was received while he was in prison and before the payment schedule had taken effect,” the Justice Department filing said.

But more than half the money is already gone, according to the article:

Among those paid out of the tax refund were Abramoff’s lawyers, including Lowell’s firm McDermott, Will & Emery LLP , which received $75,000. Another firm, Zuckerman Spaeder LLP, received $25,000 from the tax refund, the government said in its filing tonight.

Others paid were: $104,000 to Abramoff’s accountants, Mendelson & Mendelson; $87,500 to repay loans from Abramoff’s father; $50,000 to pay back state taxes in Maryland; $47,000 toward a Bank of America credit card balance; $22,000 for property taxes; $5,000 to repay a personal loan; $5,000 toward tuition expenses at Hebrew Academy; and $1,500 to repay a loan from the Franco Foundation.

The government pointedly noted a large portion of the refund “was spent before informing the government of its receipt.”

U.S. District Judge Ellen Huvelle indicated in a court hearing today she does not see a potential conflict of interest for Henry F. Schuelke III, the special prosecutor ordered by U.S. District Judge Emmet Sullivan to investigate  the Justice Department’s handling of the Ted Stevens case.

Among the prosecutors Schuelke is investigating in the Stevens matter is William Welch II, head of the DOJ’s Public Integrity Section. Welch also oversaw the indictment last September of former lobbyist Kevin Ring, who worked with lobbyist Jack Abramoff.  Ring’s lawyers raised the issue of Schuelke’s potential conflict before Judge Huvelle today, and whether Schuelke had informed Judge Sullivan of it.

Among the charges against Ring is that he lied to an internal investigator hired by Abramoff’s former employer, the law firm Greenberg Traurig. That investigator was Schuelke. Ring’s lawyers raised concerns that Schuelke could be called to testify in their case — which was supervised by the same DOJ lawyer Schuelke is also investigating for criminal contempt of court in the Stevens matter.

Huvelle told DOJ prosecutors Nathaniel B. Edmonds, Michael J. Leotta and Michael Ferrara, all of whom work for the Public Integrity Section and are supervised by Welch, that there should be a “wall” placed around Welch to ensure that he is no longer involved with the Ring case.

“That whole issue is so remote,” Huvelle said. “You should just clean it up.”

Huvelle also downplayed the question of what Schuelke told Sullivan. “There is no question [in] the idea that when Judge Sullivan asked him to [serve as special prosecutor]  it would in anyway help or hurt you,” Huvelle said to Ring defense lawyers Richard Hibey, Andrew Wise and Timothy O’Toole.

Huvelle also ordered the DOJ to turn over all potentially exculpatory material to the Ring to the defense by May 15.

May 29 will be the final day Ring’s lawyers can file motions before the case proceeds to jury interviews.

Correction: Nathaniel B. Edmonds is a prosecutor in the DOJ Criminal Division and Michael J. Leotta is an Assistant U.S. Attorney for the District of Maryland.