The prosecution in Evan Mecham's criminal trial is pushing a case "made out of smoke," the former governor's lawyer asserted on the first day of testimony.

Mecham's failure to report a $350,000 campaign loan was merely "an innocent mistake," defense lawyer Michael Scott told jurors in his opening statement Thursday.However, prosecutor Barnett Lotstein said in his opening statement that Mecham and his brother Willard, who was the former governor's campaign treasurer, purposely broke the law when they failed to include the loan from Tempe developer Barry Wolfson in a financial report.

"It was no oversight, no mistake," said Lotstein, an assistant attorney general. "No person looking at this report would have any idea that Barry Wolfson had anything to do with the $350,000 that came into the campaign."

The Mecham brothers, who are co-defendants, sat with their attorneys and declined to comment to reporters. The defendants' wives sat behind them as the first witnesses in the case testified in Maricopa County Superior Court.

About 90 minutes before the start of the trial Thursday, the Arizona Supreme Court rejected a defense bid to dismiss the charges or return them to the state grand jury for a new determination of probable cause. The defense has claimed the grand jury was misled by the state attorney general's office.

Mecham faces up to 22 years in prison if convicted on all six counts of perjury, willful concealment and filing false documents.

The Republican governor was removed from office April 4 when the state Senate convicted him of two unrelated impeachment counts. Mecham took office in January 1987.

Willard Mecham faces three similar counts and up to 9 1/2 years in prison if convicted.

Mecham long has contended the $350,000 loan was properly reported on his Dec. 5, 1986, financial report. He said it was included in a $465,000 lump sum that was listed as a contribution from himself.

"If you wanted to conceal a loan you could do it very easily," Scott said. "The prosecution's case is made out of smoke."

Lotstein told the jury that Mecham had a 1986 campaign theme "of being beholden to no one" and that the theme could have been harmed by public knowledge that a major part of his war chest came from a developer.