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    "title": "ABSCAM (4 of 4)",
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        "Records of the Office of Counsel to the President (Reagan Administration)",
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    "ocrText": "Ronald Reagan Presidential Library\nDigital Library Collections\nThis is a PDF of a folder from our textual collections.\nCollection: Roberts, John G.: Files\nFolder Title: ABSCAM (4 of 4)\nBox: 1\nTo see more digitized collections visit:\nhttps://reaganlibrary.gov/archives/digital-library\nTo see all Ronald Reagan Presidential Library inventories visit:\nhttps://reaganlibrary.gov/document-collection\nContact a reference archivist at: [email protected]\nCitation Guidelines: https://reaganlibrary.gov/citing\nNational Archives Catalogue: https://catalog.archives.gov/\n158\nIt is only by getting close to these that we can reach bevond the\nstreets and get out to the place where the influence and the other\nillegality is takins place.\nMr. DRINAN. Well, do the middlemen graduate into informers? Pm\nstill confused about the middlemen.\nMr. WERSTER. No. 110. They do not graduate into informants.\nWe occasionally have informants who lead us to middlemen, but the\nmiddlennan- let's just call him the subject of investigation.\nMr. DRINAN. All right. has the suspect. and all of it sudden now,\nhe's the one that's leadure Vey away from EN theft into alleged political\ncorruption. and you rely spon them, when you say they are not under\nyour control at all?\nMr. WEBSTER. He doesn' know that he's dealing with the FBI\nOF law enforcement agency. He believes beln dealing with somebody\nhe enther can ripott or take money from in :: criminal sense.\nMr. brinan. And who decides now on the predisposition, the\nquestion earlier that Mr. Roding asked. dest really wash unswered?\nThe middleman comes to one 143 your informants or agent. and says,\nof think this public official this a prefisposition.\" Someone at the\nDepartment of Justice or the FBI has TO sit in judgment and say,\n\"Yeak, W7 beheve this middleman and We re young to move on this.\"\nNow by what norm IS that mide?\nMr. WEBSTER. He doesn't ordenarily SAY somebody has a predis-\nposition. He's probably 11 little more candid about that He's apt to\nrepresent to us that he IS in his pocket or he is in his stable, OF that he\nis known to have done this for some period of time, or he can be had.\nThere are a variety of ways that these things are expressed in cri-\nminal terminology by one crummal dealing with someone that he\nthinks is equally unsavory, So that we have the information. Then\nwithin the time construnts that we have We can run our own check\nand see whether there is any reason to beheve it's rehable or not\nreliable: And we do this.\nWe don't 150 out in the neighborhood and ask, \"What's the general\nreputation of that person?\" But We see whether there is any basis for\nit.\nIn the particular case, you in part demonstrate your reliability by\nproducing, and these people produced, and they produced under\ncircumstances that : court can adjudicate in the future, and .I don't\nthink we should talk about that.\nWe (ry within the guidelines that We have and in the point of time\nin which someone. some new person. IS coming into the conspiracy\nor coming into the plan or the deal: to make -ure before we cause him\nto commit an act which he would not otherwise commit. such us the\nacceptance of a bribe. to understand in the clearest of terms what is\nhappening, and to make them cheit the promises in exchange for the\noffice and the influence of the office, before any money passes.\nMr. DRINAN. Well, Mr. Webster, that's not # very satisfactory\nconclusion, birt before my time is up, Prof. Gary Marx of MIT has\nwritten a very thoughtful article that the Members have here, where\nhe gives evidence that undercover operations actually increase crime.\nHe has statistics here where there is 11 stimulant for theft from the\nsting operation, and where in one instance the DEA paid up to $400\nover the ongoing price per ounce of cocume, and that apparently.\nincreased the traific in cocaine.\n159\nWould you like to make any observation on the evidence-and I\nthink it's growing evidence-that actually the undercover operation\nstimulates crime in certain areas?\nMr. WEBSTER. I'm not privy to that article, or the facts that are\nset forth in it. Mr. Heymann earlier mentioned that we try not to\ncreate a setting which is unteal to the alleged cruminal or person about\nto commit a criminal act.\nNow, that's one benchmark of protection that we can take: As I\nlook at the undercover operations conducted by the Bureau, I see no\nbasis for saying that these operations contribute to crime.\nIn the Lobster case, for instance, Operation Lobster in Boston.\nwhere we had such enormous hijar king of trucks and operations up in\nyour part of the world, Congressman Driman, that when We brought\nthe Operation Lobster down, there wasn't another hijacking for whit\nwas it, 6 months?\nMr. HEYMANN. It's been about 6 months.\nMr. WEBSTER. It had It very deterring effect on crime.\nMr. HEYMANN. Could I SILV a word in response to you. Congressman\nDrinan? On your hist question, 1 would suppose that for a period of\ntime. and we could actually check it: it's rare, but We could probably\ncheck this-1 would suppose that for a period of time there were\nfractionally more hijackings in Boston because we were buving goods\nand they didn't have to take them to New York, and then \" very\nsubstantial reduction to nothing thereafter.\nThe total effect would be 11 substantial reduction in hijacking.\nOn your question to Judge Webster on who finds predisposition, I\nthink the answer IS that though we will try to check before an offer\nis made to anyone, there is no requirement that we find predisposition\nin advance of making an offer in any undercover operation. Now we\nare not talking about political us opposed to something else, and the\nreason for that is because the only harm that the recupient of the offer\nis exposed to is the harm of being made an illicit offer\nNow I don't mean to say that's nothing, because it has serious\nconsequences. You don't know how you would react, you don't know\nwhether you would call the police or not. It is difficult, but the harm\nis not a harm like having your house searched or your phone listened\nto, or being called to give testimony.\nThe only harm is that someone makes you an illieit offer, and for\nthat reason, the courts have never required us to find in advance\npredisposition. And although, as Judge Webster said, we might to try\nand we will try, there are situations in which we can't-1 think you\npeople would agree we should not-if we are running an undercover\nliquor operation in Iowa and a crook of unknown reliability, of unre-\nliubility, comes up to us and MIVS, \"There is 11 police captain here who\nwants to sell you protection.\" I think that we ought to say, \"Bring in\nthe police captain.\"\nNow, that doesn't mean to do anything except that if a crook says\nto us, a crook totally unrehable suys, \"A police captain wants to sell\nprotection, he regularly sells protection to burs here.\" I think we\nought to say, \"Bring him in.\"\nBut we ought to make sure then that the transaction is unequivo-\ncally clear, and if he tries to sell protection, arrest him.\nMr. EDWARDS. Your time has expired.\n160\nThe centleman from Missouri, Mr. Volkmer?\nMr. VOLKMER. Thank you. Mr. Churman. Pd like to get back to\nthat subject that the gentleman from Wisconsin and I discussed, and\nI think it is very important to US to make a decision on it eventually,\nand 1 believe you mentioned. Director Webster, that without the\n$4.8 million for fiscal 1981, you would not be able to continue some of\nyour operations, and they had to be prematurely terminated.\nNow 1 AM not going to nsk you-specifically as to any specific\noperations. but what 1 want to know 15. is the increase meant to\ncontinue only on existing operations, or also to start up new operations\nus well?\nMr. WEBSTER. We have 8 number of proposals for new operations\nthat have gone through or have been going through the Undercover\nActivity Review Committee process. The operations are not static,\nthey do close down, and new ones are started as we go along.\nThe 15 I mentioned were those that we terminated in order to stay\nwithin, NS best we could, our tinancial constraints, and we did exceed\nthe 83 million by-1 think it's $310,000:\nMr. VOLKMER. Well, this has been approved by the Budget Office;\nis that correct?\nMr. WERSTER. By our Budget Office?\nMr. VOLKMER. They have approved this 84.8 million?\nMr. WEBSTER. $4.8 million?\nMr. VOLKMER. Yes,\nMr. WEBSTER. Yes: I understand it's approved, all the way up\nthrough OMB.\nMr. VOLKMER. So there HTo IL lot of people who agree with us, as I\ndo, that there is a positive use of these funds in combating crime in\nthis country, and I just want to tell you right now that I am in support\nof the full amount.\nThe other thing I'd like to ask about is in the charter, you mentioned\nalso that during the process of effecting the guidelines in this area, do\nyou have a timeframe which you feel you will be able to have 11 final\ndraft on those guidelines?\nMr. WEBSTER. We are coming right along. I would have been\nhappy-1 know Mr. Heymann would have been happy-if we could\nhave said to you we already have them. We have been working on n\ndocument-\nMr. VOLKMER. Well, we're still working on the charter, SO there is\nno big hurry to get the guidelines.\nMr. WEBSTER. Well, the reason we are in IL hurry is because I have\nbeen trying to bring the Bureau within the charter in every respect,\nand when these guidelines are ready, the Attorney General is going to\npromulgate them, with or without 11 charter.\nWe are very pleased with them. We've got about four or five minor\nareas that didn't take something into account, or did take something\ninto account the wrong way, and we are working it out.\nI am very optimistic about It. I am very pleased with the progress.\nMr. VOLKMER. Will I be able to receive a copy of those guidelines?\nMr. WEBSTER. You are saying when we are finished?\nMr. VOLKMER. When you are completed.\nMr. WEBSTER. Yes. I don't think there is anything confidential\nin these guidelines, any techniques.\n161\nMr. HEYMANN. I think there is no problem there, Mr. Volkmer.\nMr. VOLKMER. Thank you very much. I yield back the balance of\nmy time,\nMr. WEBSTER. I think you are comg to have 8 chance to look at\nthese in your oversight responsibility.\nMr. EDWARDS. Mr. Hyde.\nMr. HYDE. I thank the chairman for yickling Very briefly, for R\nfew seconds, I want to address a comment to Mr. Hevmann. Despite\nmy first question, I want the record crystal clear that minimum have total con-\nfidence in the competence and the willingness of the tustice Department\nto fully and fairly prosente public corruption cases. Your actions in\nthe Diggs case, in the Eilberg case, in the Flood FIRST, indicate to me\nthat you will prosecute all of these things without feat or Invor.\nI genuinely am curious about the one case I inventioned earlier, hmt\nI didn't want to leave the wrong implication. I have total confidence in\nthe Justice Department.\nMr. HEYMANN. Thank you, Mr. Hede:\nMr. EDWARDS. The testiniony of both the withesses was very\npositive.\nFrom your testimony, Judge Webster and Mr. Heymann. one\nwould thin : that all of thrise operations had worked only beautifully,\nand SO why don't you tell US R bitle bit about an operation or two\nthat has been 11 disaster?\nFor instance, Front Load in New York, fiene much is that soing\nto cost the taxpayers?\nMr. WEBSTER. I think it a little hit premiture to make assessments\nabout Front Load. That WAS an operation that preduted the Under-\ncover Activity Review Committee. There are circumstances about\nthat case that lead me to feel that We don't have too much apologizing\nto do for it.\nIt was an insurance case undercover program designed to discover\nfraud in the insurance field. it has 8 legitimate objective. We en-\ncountered an errant informant, not 80 undercover agent, hut an\ninformant, who went off on his own under curcumstances that will\nbe reviewed in the course of Rtigation, I am sure. If your have not already\nbriefed the committee, we can certainly do SO.\nI understand that the first please of litigation resulted in favor to\nthe Government. I am quite optimistic that there will not be a major\nexpense to the Government.\nIt was unfortunate. Ii Was at good program. It Wills Hawed, and I\nbelieve that under our policy, one that I mentioned III my statement\nthis morning, that what went wrong there would not have occurred.\nNow, Mr. Chairman, I don't want to represent, and I said we don't\nhave perfection in the investigation-I don't WHIT to represent that\nwe aren't going to make some mistakes. It's a little like the loan busi-\nness; if we don't make some mistakes, we are really not in business.\nBut the important thing is that we minimize those mistakes, that you\nbe satisfied as our oversight committee with the procedures that we\nhave in place, and that you be satisfied that when We do make mistukes,\nwe do something to see that those mistakes don't recur.\nMr. EDWARDS. Well, I believe that the gentleman from Massa-\nchusetts put his finger on the problem I don't think we have resolved\nyet, and that is the problem of these free-floating purveyers, multle-\nmen, or whatever they might be, often of dubious reputation, some-\ntimes hoodlums who, while not working for the FB1, are certainly\n162\nworking with the FBI, because they are the ones who bring cut the\nleads. They are the ones who finger people. How do you control them?\nWhat devices do you have for auditing their activities? In our private\nconversations, we made it very clear, the chairman and 1, that a\nnumber of innocent people have been damaged very severely by these\noperators, by these indilemen.\nTell us what you are HOUSE to do in the future about controlling\ntheir activities so that other Americans aren't severely damaged.\nMr. WERSTER. givens 1 would have to put uside the issue of the\ndamage, because that assessment is not in, and I don't want to\nappear to be agreeing to II, but I do recognize that influence peddlers,\nthose who sometimes really have the capability and sometimes were\ncon men, do a great dest (r) damage.\nThey HIP already doing A great deal of damage, and they are the\npeople who onlise or induce public officials to sell their office and\nbreach their public trust, and they KP the principal menace in пот-\nroboration and collaboration with these who are willing to go along\nwith their III\nWe are interested in them No subjects of investigation, and We in-\ntend, when we investigate their, to develop evidence for their prose-\ncution. and we 40. and we will.\nTo the extent that they make representations, you might be inter-\nested to know that the executive branch IS not immune from the same\ntypes of representations by middlemen no to the amount of influence\nthey peddite, and WT investigate the executive branch just us vistor-\nously as we do legislators whom these people represent are in their\nstable.\nI don't think it's incumbent on HS in an undereover operation to\ndemand some type of specific proof of prior illegal activity by those\nthat these people my they have in their stable, I don't see that at all.\nThat would be inconsistent with the secnario of undercover. They\ndon't know that they are dealing with the FBL They are not under our\ncontrol, nor do they think they are under our control.\nWhat We do try to do is identify the con men who are misleading\nHIS in the attempt to np off whatever cover our undercover agent is\nfunctioning under. and to Heal out those operatives, if they are not in\nfact engaging in illegal activity.\nIn the Abscam case, again without trying to get into facts, there\nwere influence pedders-and there was a chain of them, one led to\nanother, there were others who introduced them. They were told con-\nsistently not to bring anyone to the undercover agent. unless that\nperson Was prepared up Iront to make promises which would in IL legal\nsense violate their trust.\nWe don't express it, obviously, to the middlemen in that sense,\nbut unless they were prepared to make these statements and assurances\nup front, and to take the money personally, so that there could be no\nopportunity for the middlemen. or at least minimized opportunity\nfor the middlemen to mislead the public official as to the purpose of\nthat visit.\nNow, in at least one. mid maybe two, cases, that's exactly what\nhappened. But step two, which We instituted to control the operation.\nwas that in our handling of the situation. it Was made clear to the in-\ndividuals that it was a criminal activity. OF at least an netivity which\nthat person could not in good conscience participate in, and he walked\nout, and that's exactly what we intended.\n163\nSo we had two things in place there:\nOne, don't bring 116 anybody who isn't prepared to be up front with\nus: and two. if he comes, then it was our purpose and plan to make sure\nbefore any money was passed to that person, that he understood the\ncriminal nature of the situation and that W de process was monitored\nby U.S. attorneys watching the process and in It position to ent it of\nif at any time our agent exceeded the bounds we had set for them.\nMr. EDWARDS. Well. we will continue to have a dialogue on this sub-\nject of these middlemen. They are of great concern to the subcom-\nmittee.\nMr. WEBSTER. Of course, they are\nMr. EDWARDS. And 1 em personally not satisfied that some of them\nat least are not ont of control and have been triggered by the FBI to\ngo on capers of their OWN with the result that innocent people are\ninjured.\nMy time is up, and / vield to the gentleman from New Jersey.\nChairman RODINO. Thank you very much for yielding.\nDirector. am intrizued by the bist satement you minle concerning\nthe so-called middlemen or purveyors. It seems to me that if you review\nthe statement you made, and I seem to recall it very clearly, you talk\nabout the middlemen bringing in someone who they SAN IS prepared\nto engage in criminal conduct, to necept money.\nNow I think you ought to reflect on the cases that you have had\nbefore you. If you place that kind of reliance on the statement of the\nmiddleman or the purveyor whose conduct in the past has been quess\ntioned, and whom you say is already under investigation himself, it\nseems to me that you are going to 11 grent extent to continue this kind\nof an operation You continue to wonder about whether or not there\nmight be a leuk and an innocent person has been implicated, when\nthat person is not at all involved.\nIt seems to me that you have responsible people in the FBI, your\nagents, who I think are responsible enough and expert enough in under-\ncover activities to be able to review what that informant has or has not\nsaid about such-and-such a person may be in his pocket, or words to\nthat effect, as you have said. Do you engage in this kind of further\nreview SO that the informant who has made this kind of statement to\nyou, SO that what he has had to say is really carefully weighed? Can\nyou recite that in the cases that you have conducted, this is what you\nhave actually done?\nMr. WEBSTER. If I understand the chairman's question I can cer-\ntainly say yes, at various leveis, the reliability in the SPT:-P of whether\nthe statement made has It basis sufficient that we would have an obli-\ngation to investigate further is assessed.\nNow we have for cross-checking available 10 us within certain time\nconstraints- depending on how first the situation is breaking-we do\nthe best we can. We up the level of approval consistent with the indi-\nviduals involved, and the sensitivities involved.\nFor example, in 11 number of these instances in Abscam, by both I\nand the Assistant Attorney General, we were aware of and approved\nthe proposals based on the information furnished to us. Those of us\nwho live in 11 world of decency. at least among our friends and associ-\nates, sometimes find it hard to assume that envone who engages in\ncrime can tell the truth. But when he is telling the information to some-\none who he thinks is in league with him, that is sometimes the way by\n184\nwhich We get our very best info: nation consistently, in all types; not\njust public corruption\nBut in other instimies, we have ome of the most important ones\nnow that #10 going the process, organized crime ligures deal-\nMr with our underenver agents, and telling us things that are true and\nturn out to be urue.\nbe Piere has to be SUMP investigative judgment eirth What Mr.\nHeymann pointed mit and what 1 pointed out, is the nature of the\ncontrols that no have on entrapping innocent people. I can't guaran-\nLee that in an Operation Lobster, or even 4 sting operation. some\nthrocent person n't goths to walk in the door thinking that this is for\nleth or have some sepprehension about it.\nFireve you the ground rules that we epply to try to minimize that.\nWe haven the interest or the taeilities to keep screening out people\nbenging on the door. because WP haven't taken the precaution to keep\nthem awar. We obvioisly inform the influence pediller that we\nTHE the FBI and we don't WHIVE him to britter any innocent people-!\ndon't mean to be leretions when that, Little We have to entry out the\ncover, and the two cround rates are don't bring 11- anybody that\nisn't going in been Bont with IN: and then we take the second ground\nrule. which is to be sure that that's the case.\nhairman Robtxo. That's why I would like te be convinced that\nunder your guidelines you able to say that you now have reason-\nshile grounds to believe. based on the fact that you luive actually\nscrutinized datin. not only what the purveyor has said, but what\nother information you may have-1 would like to be convinced that\nit isn't just the purveyor and some rumors-that the FBI doesn't 20\nforward and then engage in this kind of operation, which when\nultimately disclosed and leaked, damages the reputation of innocent\npersons.\nMr. WEBSTER. No one would like to convince you more than 1, Mr.\nChairman. In the course of these proceedings, I do want to emphasize\nthat in investigations particularly where we are trying to reach beyond\nthe streets and 10 out and reach the areas that all of you have been\ntelling us to go in, that we are not sitting HIS a grand jury. We don't\nhave to have probable cause, but we do have to have :: reasonable\nsuspicion and move on it.\n1 know you don't usk for any more than that, but I hope we will be\nable convince VOTE\nChairman RODINO. That's all Pm asking for, and if you can convince\nme that that's the way you have been conducting these operations, I\nwould like to applaud you.\nBut I would also like to state that if you have undertaken to go\nbeyond that: that you have ackpowledged there is a mistake, because\nI think that's the only way we are going to be able to proceed, where\nmistakes are made and neknowledged, and that this thing can be a\nkind of mutual cooperation. where we understand that you are en-\ngaged in doing that which is done responsibly.\nMr. WEBSTER I heartity concur. Mr. Chairman.\nChairman RODINO. Beyond that, I'd like to ask one further question,\nDirector, regarding Operation Front Load: The chairman asked you\nabout the amount of money that might be involved in the event of\ndamage suits being successfully waged against you.\n165\nWas it not at some time stated by your department-and I can't\nsay who by-that there Was some thinking that it might cost the\nGovernment some $5 milkon?\nMr. WEBSTER, I'm unaware of any such statement. 1 am informed\nthat one of the five sints have been dismissed. lie are very confident\nabout those lawsuits. There we a lot of numbers, you know. It only\ncosts 825 to the 11 lawsuit. and you can allege us many million dollars\nas you want. hut we have thus far in ONE assessment of the damages\nbeen accurate to date.\nI will he And to brief the chairman on that\nChairman RODINO. Well. thank you very much.\nMr. Enwards. Because of the shortage of the time. We are come Le\noperate under & brand new ride. 14 2-minute rule.\nMr. Hvile.\nMr. HYDE Well, that brings up an analogy. Jurize Webster, Lthink\nwe have all seen football cames on telev.sion. and wished that the\nfield judge or the referee could have the benefit of the television replay,\nwhich we the spectators on so he coubi SPP exactly what happened.\nnot what he thought happened on the field, under the emotional\nstress of the came.\nIsn't it the that in criminal cases, many times you have to rely on\ninformants of dubious reputation. crimmals. corresporators, whose\ncredibility is easily attacked by defense counsel? Oftentimes you have\nto grant immunity to someone who is involved in the very crime in\norder to get evidence sufficient to prosecute.\nThis gives the defense attorney the opportunity to WHX poetical\nabout the purchased testimony. All of these obstacles are obviated. are\nthey not. by having the valeotape of the thinsactions, so questions of\nidentity. of what exactly was said in the surrounding circumstances\nare there for the judge and for the jury? Isn't that true?\nMr. WERSTER. I believe that's correct, yes,\nMr. HYDE. Many times in political corruption mises, where the\ncrime is consensual and the activity is consensual. undercover tech-\nniques are about the only method available to you. are they not?\nMr. WEBSTER. Well, bribery, gambling, prostitution. and other\nconsensual crimes are very much like adultery, rarely performed in the\npublic streets, and we have to take an undereover approach.\nMr. HYDE. I'm told that Secretary Stimson some years ago said,\n\"Gentlemen don't read other gentlemen's mail.\" Do you think\nthat if that were mandated in the FBI Charter that we could cope\nwith public or official corruption today?\nMr. WERSTER. That was in a different time. We now carefully\nprescribe the circumstances, which are rare indeed, in which mail\ncan be opened. In the foreign counterintelligence field, those Marquis\nof Queensbury rules really will not permit the type of success that\nwe have.\nWhat I would rather focus on are the due process issues, to be sure\nthat the rule of law does apply, and if the law permits us to use decep-\ntion as a means to get at someone SO buffered and so insulated that\nhe would not otherwise be found out, that we should be allowed to\ndo so, subject to oversight, subject to guidelines, and subject to our\ninternal procedures.\nMr. HYDE. I yield.\n166\nMr. EDWARDS. Mr. Kastenmeier?\nMr. KASTENMEIER. Thank you, Mr. Chairman.\nThe reason I think these hearings are SO important is because\nthese techniques for which an increased amount of money is smight,\nis relatively recent, and it seems by embarking upon them, we need\nto know in terms of public policy what we are upon,\nMr. WEBSTER. Absolutely.\nMr. KASTENMEIER. As Dir as Congress being subject 10 this, there\nis a difference, of course. Partly that suggested by the gentleman\nfrom Ohio. Also the fact that while & number of Members in the last\n20 years or 80 in the House and Senate have been prosecuted for crimes\neffectively, this is the first time that a Federal investigation has pro-\nceeded through the birth k door involving it large number of Members\nof Congress. Not even in conspiracy, that is not in relation one to\nthe other, and while, as Mr. Hevmann SILTS he asked rhetorically,\nis there anything special shout public officials, the snswer being no,\nexcept we really do have to freat them differently, he savs. I think\ncorrectly, because We have the problem of not necessarily whether\nthis is or is not 00 abuse in the Abscan MISP, but in the future might\nthis be an abuse in the hands of another Justice Department, where\nthese decisions have to be made.\nI, for example, Mr. Heymann, know that von de have a procedure\nwhich I wonder whether is actually followed in each case here. That\nis to say the U.S. attorney's manual mundates in every sensitive\ncase, a sensitive case involving it public figure, cleared at the top\nlevel, the information to be sent to the Attorney General, to your\noffice, and to the deputy, and presumably there is a program for\nclearance in each case.\nWas it actually followed, however, in the Abscam case?\nMr. HEYMANN. I think the answer, Mr. Kastenmeier, is that is Was\nnot formally followed, and the reason for that is that although the\nsensitive case reports, which is what we call those, only are made in\nfive or six or seven copies, I don't think that we would send around in\nthe Department five, six, or seven copies of any undercover\ninvestigation.\nThe Attorney General was aware of the Abscam investigation, but\nplainly the center of responsibility on the lawvers' side of the Depart-\nment of Justice was at my level He was certainly aware of it.\nThe other people who receive these sensitive case reports are the\nAssociate Attorney General. who handles the civil side. I assure he\nWas not aware of it. The Deputy Attorney General, my immediate\nboss, he Was aware of it.\nMr. KASTENMEIER. Well, I asked that question because it was my\ninformation that it Was assiduously followed in this case.\nMr. HEYMANN. It is not intended to be a protection in the handling\nof sensitive cases, Mr. Kastenmeier. If it were, it would raise all the\nquestions that Mr. Hyde commended HS earlier for avoiding. Then\nyou would way whenever you abve it political case, H goes shooting\nright up to the political levels of the Department to be analyzed and\npassed on there. The function of the sensitive case report is to make\nsure that the people who are doing appointments, for example-and,\nthis has come up in one of these cases, not Abseam, but in Brilab,\naccording to the newspapers-that the people who are doing appoint-\n167\nments of judges and U.S. attorneys know if there is an ongoing\ninvestigation in the FBI and the Criminal Division. It is not to be 8\nreview for the proprety of the investigative steps or anything like.\nthat.\nMr. EDWARDS. Mr. Seiberling?\nMr. SEIBERLING. Thank you.\nI hope that we will have a subsequent hearing. and perhaps several\nsessions, su that we could really explore in depth the nature of the\nguidelines the FBI has followed or his not followed, in view of the\nfact that this subcommittee has before it the proposed FBI Charter\nand must come to some kind of conclusion. 1 think perhaps it is\nfortunate that these questions have arisen before we have approved B\nparticular legislative recommendation,\nI note that in your interview with Mr. Rowan, Judge Webster, you\nsaid this, and this is one of the questions I think we are going to have\nto get into much more when we have further hearings. Leaving out the\nparenthetical parts, you said:\nWhen we have infermati 11 from a corping intermediary who is under inves-\nrigation. that he has Mr. who will help in the stat project, we base\nan obligation TH follow the that less). eard IN the investigation can\ntiell you that we followed every lead when We slosed it down. There was nothing\nleft in the birtrel except with are call seam representations by intermediatives\nI guess the word who has to be in there-\nWho Want To produce people whose names were being trindied ansund, but\nwho had abselutely nothing to de with it, and could Not be produced by the\nintermediaties.\nNow, in fact, about luilf, just taking the Congressmen and basing it\non what We have read in the newspaper, about half of the Congressinen\nand Senators who were contacted by intermediaries turned out not to\nbe leads: They were fulse leads; they were not correct. They turned\ndown any improper blandishment.\nBut I think we are going to have to know in very much more detail\nto what extent this statement of n corrupt intermediary, which IS your\nphrase. is deemed a sufficient basis for an attempt to entice a particular\nperson into committing a corrupt art. and we are going to have to\nknow to what extent you require corroboration and SO forth.\nI think this applies whether the person is a public official or not.\nThe only difference is that a public official is constantly being ap-\nprouched by people who want help from him. and legitimately so.\nAnd what more, he has his reputation, which is everything. If his\nreputation is beclouded. he is dead politically. and that's, of course,\ntrue of 11 lot of people who are not public officials. Their reputation is\nallimportant. So I do think that we have got to know what checks\nthere are on the use of corrupt intermediaries, which is your phrase,\nto make sure that they do not put a cloud over the reputation of a\nperson who is not in Inct going to be predisposed. ns you have said.\nI have used up my time, I see, but perhaps the chairman will let\nyou respond,\nMr. WEBSTER. We'll be happy to explore that. and Mr. Heymann\nwants to add a postscript to what say, but 1, too, believe. and I\nbelieve that most Members of Congress and most public officials be-\nlieve with me, that those people are out there, they are hovering\naround the offices of public trust, and that we do a service when our\nleads from other sources take us in this direction and we follow it.\n168\nI want you to be satisfied with the guidelines that are in place, but\nI think we both have a common interest in seeing what we can do to\nget those people away from our institutions.\nMr. SEIBERLING. Well. as we have seen, honest officials do have\nsensitivity, and when they smell II Tal, they are inclined to say, \"This\nis the end. I won't have anything more to do with it.\" It does bother\nme, and I think it bothers all of us. that the Government itself would\nbe putting public officials in II position where they have to demon-\nstrate under circumstances where they are not even aware that they\nare being tricked. they are not even aware that there is some kind of\ninvestigation going on. they have to affirmatively demonstrate their\nbonafides, and I think that raises some questions about the ability of\nour system to function that are very, very profound, and need to be\ncurefully handled.\nThis isn't a simple thing. I sympathize with your problem. and I\nwant to see every corrupt instance brought to light and squelched, but\nat the same time the mass of people and the mass of politicians, I\nthink are honest, and the problem of finding how to find out the\ncrooks and still not prejudice the honest ones is 11 very difficult one,\nand we need to pursue it more.\nMr. EDWARDS. Mr. Drinan?\nMr. DRINAN. Thank you, Mr. Chairman\nThere has emerged from this conference the shadowy world of\nmiddlemen. They are the new characters in Abscum now, and they\nare corrupt intermediaries, and I have a lot of trouble with their moti-\nvation. We learned the ground rule. You say to the middleman,\n\"Don't bring in anybody unless he is prepared to take money,\" and\nin 50 percent of the cases, the middlemen are wrong.\nWere the middlemen told that they were going to appear on tele-\nvision, that they are going to be 11 feature in the trials that are forth-\ncoming? It seems to me that you owe a lot to these middlemen.\nFurthermore, did they get compensation? Did they get promises of\nimmunity for prosecution? What is their motivation, when you say,\n\"Go out there and get somebody who will come in and commit a\ncrime on television\": Who are these middlemen?\nMr. WEBSTER. I have to take issue with just about everything\nyou said. [Laughter.]\nThey are subjects of investigation. We did not ask them to go out\nand bring us in people. We set at situation in which the undercover\nagent represented that he was interested in buying favors. As far\nas knowing that they are going to be on television, of course, they\ndon't know they are on television. That is the part of the investigative\ntechnique that we are using to build 11 case against them, and anyone\nwho conspires with them to violate the law.\nMr. DRINAN. Well, sir, will they be immune from prosecution?\nSuppose now that the name of this corrupt intermediary comes out\nin the instance of IL Congressman who is vindicated, and his reputation\nhas been damaged. Does he have a right to find out who this character\nwas, the influence peddler, this faceless accuser, this corrupt inter-\nmediary? Does he have the right to find out who he is and why he\nbrought him into the situation on W Street?\nMr. WEBSTER. That's u prosecutive discretion matter. I am looking\nfor no immunity, but I will turn it over to Mr. Heymann.\n169\nMr. HEYMANN. I think certainly anyone who fits all those ad-\njectives ought to be prosecuted. [Laughter.]\nMr. DRINAN. Then how many are you going to prosecute?\nMr. HEYMANN. The answer. of course. Congressmun-Drinan, is\nthese people are, as Judge Webster said, just as much subjects of\ninvestigation and likely targets of investigation as anyone else.\nThe lact of the matter is in any investigation, we make deals or\narrengements among the possible defendants in order to strengthen\nour case with witnesses. the are likely in any investigation, political,\nnonpolitical, anything that involves a number of people, to prosecute\nsome and not prosectite others.\nSome of the people you are describing as middlemen-that was\noriginally my term-will undoubtedly be prosecuted. Others will\nnot: It's a standard arrangement.\nI would like to take the opportunity to SHV one thing that goes to,\nin a very narrow and careful WHE the question hairman Rodino and\nMr. Seiberling and maybe you. Father Drimin, have raised.\nIf we are running Operation Lubster and somebody comes To us and\nsays that somebody is 11 hijacker and II crook and tro good, unreliable\nin 1 million wave, and he says, beheving that weare crooks and fences,\nsays, \"Should 1 tell John Jones shout this? I think he IS in the hi-\njacking business.\"\nOur answer. Mr. Seiberling. in particular, is that We ought to say\nyes, even though the person who said to us, +1 think John Junes is in\nthe hijacking business,\" wasn't certain, and is generally unrehable,\nbut we ought to say to him, \"Yeah, tell John Jones about this\nSure, there is some risk that John Jones will 50 out and bijack a\ntruck just because he knows about our feneing operation, but that is a\nvery small risk. and that leads me to the following very narrow, but\nperhaps very important, point:\nAt the moment we say, Yes, CO out and tell John Jones about it,\"\nwe don't have much basis for believing that John Jones is indeed a\nhijacker of trucks. At the moment-ated this difference in time IN very\nimportant-at the moment that John dones árrives with a truck at the\nwarehouse, we have a very good renson to believe he is a hijacker, and\nlet me explain very precisely why, We have been put onto John Jones\nby somebody who wants to keep doing business with 115, and who\nobviously has a relationship that he wants In maintain with John\nJones.\nIf we are simply careful enough to SITY the transaction here is going\nto be absolutely plain, clear, and meontrovertible, we are going to pay\nmoney for a hijacked load of goods, this con man, this nameless\ninformer, this man who has no hasis for credibility otherwise,, sud-\ndenly has high stakes in not bringing in John Jones unless John Jones\nreally is prepared to sell 11 truckload of goods for cash. He doesn't\nwant to disrupt his relationship with us by bringing in somebody who\nisn't H hijacker or isn't selling the goods. He doesn't want towmbarrass\nJohn Jones and disrupt his relationship with John Jones by bringing\nhim into a place where we are going to -ay, \"OK, now, we are some to\ntake the goods, you get the cash.\" These are stylen goods.\nBy the time that man pushes the bell on our warehouse door, there\nis every reason to believe that John Jones IS indeed 11 hijacker. At the\ntime we said, \"Sure, go ahead and make the offer to John Jones,\" the\nevidence may have been very thin:\n170\nThank you.\nMr. DRINAN. Thank you, Mr. Chairman.\nMr. EDWARDS. Mr. Volkmer?\nMr. VOLKMER. Thank you. Mr. Chairman.\nIN like 10 continue a little bit and then 10 to something else I was\ngoing to start with because this is one of the things I wanted to bring\nup,\nI think there is # major musinderstanding by some members of the\ncommittee as to how the maidleman, as to is called here. actually\noperates, and that imsunderstarading seems to be that they view the\nmiddleum as an operative of the FBI which he definitely is not. If\nwe look at it, let's say-eorrect me if I am wrong as 1 understand it.\nH procedure. take the Lobster CHEC or Abscan or anything else. What\nwe have is a knowledge there is influence pedding\nor something gentig on. and then we can know people who are in the\nbusiness. The FBI then sets up at: operation. unknown to those people\nwho are the as being FBI agents. Is that correct?\nMr. WEBSTER. That's correct:\nMr. VOLKMER. If they ever became knowleng FBI men, that blows\nthe whole things of course.\nMr. WEBSTER. That's correct.\nMr. VOLKMER. In is necessary, then. in operation, to keep them\nfrom becoming suspicious: metal\nMr. WEBSTER. That's correct.\nMr. VOLKMER. 20 if you statted saving to them, \"No. don't go see\nhim. we don't want you to YYYY latu, because he might be all right.\"\nimmediately the middlennin IS going to What's genting on here.\"\nIs that correct?\nMr. WEBSTER. That's correct.\nMr. VOLKMER. 20, you ON have (4 tell him. \"Well, that's\n11 pretty good idea. Why don't you 20 ationn?\" Because especially if\nhe's already brought in others: correct?\nMr. WEBSTER. That's right.\nMr. VOLKMER. I think we have to understand that. That's 11 basic\nimperfection 111 the system. that's 21 necessary putt of the system. Is\nthat not correct?\nMr. WEBSTER. That's correct.\nMr. VOLKMER. Father Drinim of Massa husetts previously attuded\nto in article by Guity Marx of MIT. I huxe taken the titule also to read\nit, and It does point out sime impertections III the system of using\nundercover. but also I think we must understand interesting\nreading, by the way - and I don't think it's a profound CNSP against\nundercover. That's my own viewpoint. It may be the opposite of the\ngentleman from Mussachusetts.\n1 view the question using undereover or not using undercover on\nthe basis that If wedon't H-P H. there Is game to Inc many. many major\ncriminals, crimes, comg undetected and improseruted: IS that not\ncorrect?\nMr. WEBSTER. That's correct.\nMr. VOLKMER. 70 if we would shut It 40WTh all these things that\nhave been done in the must agustst crime would no longer be done?\nMr. WEBSTER. That's correct.\nMr. VOLKMER. Let mesisk you this Do you envision actually how\nyou would be able to catch some thieves? Take the Lobster operation.\n171\nDo you think the FBI operators could walk into an existing fencing\noperation and be able to gather evidence against those who are selling\nto the fence?\nMr. WEBSTER. It would be most improbable.\nMr. VOLKMER. Walk in colli. you've not a suspicion, somebody has\ntold you about it. you've got It reasonable ground to believe it.\nI've just been handed a note that my time is up. The centleman\nfrom Mussachusetts, I timed him at 6 minutes and 15 Securits, I just\nconcluded 2 minutes.\nThank you, Mr. Director. My time is up.\nMr. WENSTER I hope we won't go back to the mys, Mr. Chair-\nman, when our agents walked into hars and ordered children of milk.\n[Laughter.]\nMr. EDWARDS. Mr. Director. when 1 wis in agent. that's all we\never drank. [Laughter]\nMr. Rodino?\nChairman RODINO. I just want to say thank you, but I will be\nleeking forward to serutinizing those guidelines, your work rules. and\nPd like to leave this statement with you in parting.\nMr. Hevmenn. I think you ought to consider this because you\nhave been referring all along to Operation Lobster, and some other\nsting operations. I can't. for the We of me. reconcile the kind of opera-\ntion where crime atrendy has been committed as against these other\noperations which were conducted where public officials were involved,\nwhere representations were made by middlemen or purveyors, with\nthe kinds of inducements that we have rend about, which would sug-\ngest that possibly a Member of Congress could be of help to the\ndistrict because of what someone might be able to invest in that par-\ntienlar district.\n1 don't understand how you could analogize one with the other,\nbecause in one case, crimes have been committed or a crime has been\ncommitted. or an overt act has been done. where the person who is\nthen prepared to commit the crime would have to say that he was\naccepting stolen goods or hijacking.\nThat, to me. is 11 lot different, and that seems to really be the crux\nof what bothers me of how you proceed with one and proceed with\nthe other which should have. I think, even at the beginning, given you\nlots of pause as to the consequences. It's entirely a different kind of\ncase. It's entirely :1 different kind of setting, and one that is fraught\nwith SO much peril, that I am wondering whether or not it is being\ngiven that careful serutiny, and that's what 1 am hoping that we are\ngoing to be able to resolve as we go on. As 1 suggested to the chair-\nman-1 think it was well stated by the gentleman from Ohio, Mr.\nSeiberling-at some time in the future, some of these things may have\nto be aired in executive session.\nMr. EDWARDS. This will conclude today's hearing. As the chairman\nof the full Judiciary Committee suggests, Be will continue the subject\nat a future date. We still have H number of questions to ask about\nundercover operations, and/ir we pointed out earlier, undercover\noperations are included in the charter that the subcommittee presently\nhas under consideration.\nWe thank both Judge Webster and Mr. Heymann for their appear-\nance here today.\nMr. WERSTER. Thank you, Mr. Chairman.\n[Whereupon, at 12:30 p.m., the hearing was adjourned.]\n172\nAPPENDIX 3\nThe changing FBI\nThe road\nto\nAbscam\nJAMES Q. WILSON\nII\nI is inconceivable that J. Edgar\nHeover would ever have investigated members of Congress to\ngather evidence for possible prosecution. Hoover's FBI learned a\ngreat deal about congressmen, and may have gone out of its way\nto collect more information than it needed, but all this would have\nbeen locked discrectly away, or possibly leaked, most privately, to\na President or attorney general whose taste for gossip Hoover\nwished to gratify or whose personal loyalty he wished to assure.\nThe Bureau's shrewd cultivation of congressional and White House\nopinion, effective for decades, was in time denounced as evidence\nthat the FBI was \"out of control,\" immune from effective oversight.\nToday, of course, the Bureau is again being criticized, albeit cir-\ncumspectly, by various congressmen who complain of the manner\n(and possibly also the fact) of its investigation of possible legisla-\ntive bribery. Congressmen wonder whether the FBI is launched on\na \"vendetta\" against its erstwhile allies turned crities. Once again\nthere are angry mutterings that the Bureau is \"out of control,\" this\ntime because it is using its most powerful technique-undercoyer\noperations-to discover whether congressmen are corrupt,\nIt would be tempting to ascribe the changes in the Bureau's re-\nlations with Congress to nothing more than personal pique amplified\n173\n4\nTHE PUBLIC INTEREST\ninto organizational vengeance. After years of congressional adula-\ntion of Hoover and the FBI, the mood suddenly turned nasty with\nrevelations of how far the Bureau was prepared to go in using its\ninvestigative powers to maintain political support. The list of\nBureau excesses is long. familiar, and dismaying; the wrath visited\nupon it by several congressional committees combined a proper\noutrage at abuse of power with a hint of romance gone sour. For\nthe FBI now to turn on those who had turned on it would be\nprecisely the sort of thing one might suppose a Hoover-style agency\nmight relish.\nThis is and what has bappened. No doubt there are some FBI\nagents who are enjoying the sight of congressmen scurrying for\ncover, but that was not the motive for \"Operation Abscam.\" The\nBureau has in fact changed; and changed precisely in accordance\nwith the oft expressed preferences of Congress itself. Congressional\nand other critics complained that the Bureau in the 1960's was not\nonly violating the rights of citizens, it was wasting its resources and\nenergies on trivial cases and meaningless statistical accomplish-\nments. Beginning with Director Clarence Kelley, the Bureau\npledged that it would end the abuses and redirect its energies to\nmore important matters. This is exactly what has appened.\nThis rather straightforward explanation is hard for official Wash-\nington to accept, and understandably so. Bureaucracies are not sup-\nposed to change, they are only supposed to claim to have changed.\nIt tests the credulity of a trained congressional cynic to be told\nthat a large, complex, rule bound organization such as the FBI\nwould or could execute an about-face.\nBut the FBI is not just any bureaucracy, and never has been.\nNext to the Marine Corps, it is probably the most centrally con-\ntrolled organization in the federal government. Its agents do not\nhave civil service or union protection, its disciplinary procedures\ncan be swift and draconian, and despite recent efforts to decen-\ntralize some decision making, the director himself, or one of his\nimmediate subordinates, personally approves an astonishingly large\nproportion of all the administrative decisions made in the Bureau.\nNot long ago,' a decision to install sanitary-napkin dispensers in\nwomen's lavoratories in Burcau headquarters could not be made\nuntil Director William Webster endorsed the recommendation. FBI\nagents have complained for decades about the heavy-handed super-\nvision they received from headquarters; though that has begun to\nchange, the visit of an inspection team to an FBI field office con-\ntinues to instill apprehension berdering on terror in the hearts of\n63-565 0 81 12\n174\nTHE CHANGING FUL: THE ROAD TO ABSCAM\n5\nthe local staff The inspectors sometimes concentrate on the mi-\nnutiae at the expense of the important, but whatever its defects,\nniepicking insures that field offices will conform to explicit head-\nquarters directives pertaining to observable behavior.\nBut even for the Bureau, the change in investigative strategy that\nculminated in Operation Abscam was no casy matter. For one\nthing, much of what the Bureau does is not easily observable and\nthus not easily controlled by inspection teams and headquarters\ndirectives. Law enforcement occurs on the street in low-visibility\nsituations that test the judgment and skill of agents but do not lend\nthemselves to formal review. Many laws the FBI enforces-particu-\nlarly those pertaining to consensual crimes such as bribery-place\nheavy reliance on the skill and energy of agents and field super-\nVisers who must find ways of discovering that a crime may have\nbeen committed before they can even begin the process of gather-\ning evidence that might lead to 3 presecution. Relations between\nan agent and an informant often He at the heart of the investigative\neffort, but these are subtle, complex, and largely unobservable.\nFinally, what the Bureau chooses to emphasize is not for it alone\nto decide. The policies of the local United States Attorney, who\nthough nominally an employee of the Justice Department is in\nreality often quite autonomous, determine what federal cases will\nbe accepted for prosecution and thus what kinds of offenses the\nlocal FBI office will emphasize.\nChanging the Bureau\nGiven these difficulties, the effoit to change the investigative\npriorities of the Bureau was a protracted, controversial, and difficult\nstruggle, Several things had to happen: New policies had to be\nstated, unconventional investigative techniques had to be autho-\nrized, organizational changes had to be made, and new incentives\nhad to be found.\nAs is always the case, stating the new policies was the casiest\nthing to do. Attorney General Edward Levi and Director Kelley\npledged that the Bureau would reduce its interest in domestic\nsecurity cases, especially of the sort that led to such abuse: as\nCOINTELPRO, and in the investigation of certain routine crimes\n(such as auto theft or small thefts from interstate shipments) that\nhad for years generated the impressive statistics that Hoover was\nfond of reciting. The domestic security cases were constitutionally\nand politically vulnerable; the criminal cases that produced evi-\n175\n6\nTHE PUBLIC INTEREST\ndence of big workloads but few significant convictions were un-\npopular among the street agents. The man Kelley brought in to\nclose down virtually all the domestic security investigations was,\nironically, Neil Welch, then in charge of the Bureau's Philadelphia\noffice and later to be in charge of the New York office and of\nOperation Abscam. In a matter of months, thousands of security\ncases were simply terminated; hundreds of security informants\nwere let go, domestic security squads in various field offices were\ndisbande d and their agents assigned to other tasks. New attorney-\ngeneral guidelines clarified and narrowed the circumstances under\nwhich such cases could be opened in the future. The number of\nFBI informants in organizations thought to constitute a security\nrisk because so small that it was kept secret in order, presumably,\nto avoid encouraging potential subversives with the knowledge that\nthey were, in effect, free to organize without fear of Bureau sur-\nveillance.\nKelley also announced a \"quality case program\" authorizing each\noffice to close out pending investigative matters that had little\nprosecutive potential and to develop priorities that would direct its\nresources toward important cases. Almost overnight, official Bureau\ncaseloads dropped precipitously, as field offices stopped pretending\nthat they were investigating (and in some cases, actually stopped\ninvestigating) hundreds of cases-of auto thefts, bank robberies,\nand thefts from interstate commerce and from government build-\nings-where the office had no leads, the amounts stolen were small,\nor it was believed (rightly or wrongly) that local police depart-\nments could handle the matter.\nHeadquarters made clear what it regarded as the \"priority\" cases\nthat the field should emphasize: white-collar crime, organized\ncrime, and foreign counteriatelligence. But saying that these were\nthe priorities, and getting them to be the priorities, were two dif-\nferent things. Permitting field offices to stop reporting on high-\nvolume, low-value cases did not automatically insure that the re-\nsources thereby saved would be devoted to, say, white-collar\ncrime. For that to occur, some important organizational changes\nhad to be made.\nThe most important of these was to reorganize the field-office\nsquads. Traditionally, a field office grouped its agent personnel\ninto squads based on the volume of reported criminal offenses-\nthere would be a bank robbery squad, an interstate theft squad,\nA fuller account of these changes can be found in James Q. Wilson, The In-\nvestigators: Managing FBI and Narcotics Agents (Basic Pooks, 1978).\n176\nTHE CHANCING Hilli THE ROAD TO AUSCAM\n7\non auto theft squad, and so on., These squads reacted to the in-\ncoming flow of reported crimes by assigning an agent to cach case.\nWhat we now call white-collar crime was typically the province\nof a single unit-the \"accounting squad\" -composed, often, of agents\nwith training as accountants, who would handle bank complaints\nof fraud and embezzlement. Occasionally, more complex cases in-\nvolving fraud would be developed; many offices had individual\nagents skilled at defecting and investigating elaborate political,\nlabor, or business conspiracies. But attention to such matters was\nnot routinized because the internal structure of a typical field office\nwas organized around the need to respond to the reports of crimes\nsubmitted by victims. Elaborate conspiracies often produced no\nvictims aware of their victimization or enriched the participants in\nways that gave DO one an incentive to call the FBL Taxpayers gen-\norally suffer when bribes are offered and taken. and innocent in-\nvestors may be victimized by land frands, but either the citizen is\nunaware he is a victim or the \"Victim\" was in fact part of the con-\nspiracy, draw in by greed and lareenous intent.\nAgain Neil Welch enters the scene. The Philadelphia office was\none of the first to redesign its structure so that most of its squads\nhad the task, not of responding to victim complaints, but of iden-\ntifying (\"targeting\") individuals, croups, and organizations for\nintensive scrutiny on the grounds that day were suspected of being\ninvolved in againized crime, pubject conspiracies, labor racketeering,\nor political corruption. Though attached extry FM field office would\nfrom time to time make events politicians or busi-\nnessmen, the cases made in PNP tacolar for their\nnumber and scope.\nWeis, business.\nmen, police officers,\nindicted and\nconvicted. The more ind\nSclown, the more\nnervous accompliees, frightent Wowledgeable re-\nporters would come forward to when have information that\nspurred further investigations.\nDuring the period when Welch and the Philodelphia office were\nmaking headlines (roughly, 1975 to 1577), the rest of the Bureau\nwas watching and waiting. Experienced FBI officials knew that\nunder the Hoover regime, the only safe rule was \"never do any-\nthing for the first time.\" Taking the initiative could result in rapid\npromotions but it could also lead to immediate disgrace; innova-\ntion was risky. What if the allies of the powerful people being\nindicted (one was Speaker of the Pennsylvania House of Repre-\nsentatives) complained? Hoove: had usually rebulfed such com-\n177\nTHE PUBLIC INTEREST\n3\nplaints, but you could never be certain. More important, how would\nBureau headquarters react to the fact that the number of cases\nbeing handled in Philadelphia had dropped owing to the reassign-\nment of agents from the regular high-volume squads to the new\n\"target\" squads? In the past, resources-noncy, manpower-were\ngiven to field offices that had high and rising caseloads, not to\nones with declining statistics.\nKelley's response W.B clear he increased the number of agents\nassigned to Philadelphia and save Welch even more important TO-\nsponsibilities (it was at this Fitric that Welch was brought in head-\nquarters to oversee the winding down of the domestic secrifity\nprogram). There were on many H as to resolve and many appre-\nhousive supervisors to reassure, Not the momentain was gowing:\nMore and more field offices began to reurganize to give structural\neffect to the priority-case program. aNd thus to an augressive stance\nregarding white collar crime.\nEmphasizing priority offenses\nThe incentives to comply with the emphasis on D irity offenses\ncame from within and without the Bureau. Inside, the management\ninformation system was revised so that investigations and convic-\ntions were now classified by quality as well as number. The crimi-\nnal offenses for which the FBI had investigative responsibility were\ngrouped into high- and low, dority categories, and indi. idual\noffenses within these categories were further classified by the de-\ngree of seriousness of the behavior under investigation (for exam-\nple, thefts were classified by the amount stolen). It is far from clear\nthat the statistics generated were used in any systematic way by\nBureau headquarters-in the FBI as in many government agencies,\nsuch data are often perceived as a \"numbers game\" to be played\nand then forgotten-but at the very least these statistics reinforced\nthe message repeated over and over again in the statements of the\ndirector, first Kelley and then William H. Webster: Go after white-\ncollar and organized crime.\nOutside the Bureau, key congressmen were pressing hard in the\nsame direction. Nowhere was this pressure greater than in the\nchambers of the Subcommittee on Civil and Constitutional Rights\nof the House Judiciary Committee, chaired by Congressman Don\nEdwards of California-who had once been, brieny, a member of\nthe FBI. This Subcommittee had become one of the centers of\ncongressional attacks on the Bureau. Kelley and Webster spent\n178\nTHE CHANGING FEL: THE ROAD TO ABSCAM\n9\nhours answering questions put by its members, who included in\naddition to Chairman Edivards, Elizabeth Holtzman of New York\nand Robert Drinan of Missachusetts. The attack on the FBI's per-\nformance began with criticism of the domestic security programs,\nbut came to include enticisms of the Bureau's weaknesses in the\narea of white office This latter concern reflected, in part,\nthe Subcomenittee members' genuine conviction that white-collar\noffenses were serious makes Butit also reflected the Subcommittee\nmeinbers' suspleted that the FBI was \"soft\" on \"establishment\"\ncrimes while being excessive iv preoceupied with subversion, and\nthus inclined merify to 29 through the motions when investigating\nthe former and to put its heart and resources into inquiries Be\ngarding the latter. Thus, getting the Bureau to emphasize white-\ncollar crimes was BUT only good in itself, it was a way, the Sub:\ncommittee seemed to Chink: of keeping it out of domestic security\nwork\nIn 1977, staff meisbers of the Subcommittee touced various FM\nHold off and spoke as well to several U.S. Attorneys. Their report\nsharply criticized the FBI for continuing to devote manpower to\nstreet crimes such as bank robberies and hijacking-all of which, in\nthe opinion of the staff, could better be handled by the local police.\nIn some cases, the staff claimed, the FBI's idea of white-collar\ncrime was welfare cheating and other examples of individual, and\npresumably sinall-scale, frauds against the government. The staff\nlamented the \"reluctance on the part of FBI personnel, particularly\nat the supervisory level, to get involved in more complex investiga-\ntions that may require significant allocation of manpower for long\nperiods of time.\" And the report criticized the field offices for not\nmounting more undercover operations.\nWhatever shortcomings the FBI may have, indifference to con-\ngressional opinion has never been one of them. The pressure inside\nthe Bureau to develop major white-collar-crime cases mounted.\nThe Bureau had always thoroughly investigated reported violations\nof federal law whatever the color of the collar worn by the suspects.\nBusinessmen, politicians, and labor leaders had been sent to prison\nas a result of FBI inquiries. But most of these cases arose out of a\ncomplaint to the Bureau by a victim, followed by FBI interviews\nof suspects and an analysis of documents. Sometimes wiretaps were\nemployed. The number, scope, and success of such investigations\ndepended crucially on the skill and patience of the agents work-\n184 = case. One legendary FBI agent in Boston was personally re-\n179\n10\nTHE PUBLIC INTEREST\nhis tenacity, his ability to win the confidence of reluctant witnesses\nand accomplices, and his knowledge of commlex Grandial\ntions. Birt Rnding or producing large numbers of such agents is\ndifficult at best Far casier would be the elopment of investiga-\nlive techniques that could generate reliable evidence in large\namounts withint having to depend solely on an agent's ability to\n\"firs\" a suspect, who then world have to territy in court against his\nformer collaborators.\nUndercover operations\nOnle <uch mothod was the undercover optiation: Varenties tents\nin the Direct Enforcement Administration and in leal police de-\npartments had always relied extensively on undereover agents\nbuying illegal drugs in order to produce evidence. Traditionally,\nhowever, the FBI had shied away from these methods. Hoover had\nresisted any techniques that risked compromising an agent by\nplacing him in situations where he could be exposed to adverse\npublicity or tempted to accept bribes. Hoover knew that public\nconfidence in FBI agents was the Bureau's principal investigative\nresource and that confidence should not be jeopardized by having\nagents appear as anything other than well-groomed, \"young execu-\ntive\" individuals with an impeccable reputation for integrity. From\ntime to time, an agent would pose as a purchaser of stolen goods,\nbut these were usually short-lived operations with limited objec-\ntives. For most purposes, the FBI relied on informants-persons\nwith knowledge of or connections in the underworld-to provide\nleads that could then, by conventional investigative techniques, be\nconverted into evidence admissible in court in ways that did not\ncompromise the informant.\nThe FBI's reliance on informants rather than undercover agents\nhad, of course, its own costs. An informant was not easily controlled,\nhis motives often made him want to use the FBI for personal gain\nor revenge against rivals, and either he would not testify in court\nat all or his testimony would be vulnerable to attacks from defense\nattorneys. Moreover, it is one thing to find informants among bank\nrobbers, jewel thieves, and gamblers with organized crime connec-\ntions; it is something else again to find informants among high-level\npoliticians, business executives, and labor leaders. An undereover\noperation came to be seen as a valuable supplement to the infor-\nmant system: Though created with the aid of an informant, it could\n180\nTHE CHANGING FBI: THE ROAD TO ABSCAM\n11\nfally monitored by recording equipment, used to develop hard\nphysical evidence (such as photographs of cash payofis), and oper-\nated so as to draw in high-level suspects whose world was not\neasily penetrated by conventional informants.\nIn 1974 the Law Enforcement Assistance Administration (LEAA)\nbegan supplying money to make possible the now-farnous \"Sting\"\noperations in which stolen property would be purchased from\nthieves who thought they were selling to criminal fences. LEAA\ninsisted initially that a Sting be a joint federal-local operation, and\nso the FBI became partners in these early ventures, thereby acquir-\ning substantial experience in how to mount and execute an under-\ncover effort in ways that avoided claims of entrapment. In 1977,\nthe FBI participated in 34 Sting operations. Soon, however, the re-\nquirement of federal participation was relaxed and the Sting be-\ncame almost entirely a state and local venture (albeit often with\nLEAA money). After all, most of the persons caught in a Sting were\nthieves who had violated state, but not federal, law.\nThe experience gained and the success enjoyed by the FBI in\nthe Stings were now put in service of undercover operations di-\nrected at the priority crimes-especially white-collar crimes and\nracketeering. During fiscal year 1978, the Bureau conducted 132\nundercover operations, 36 of which were aimed at white-collar\ncrime. They produced impressive (and noncontroversial) results,\nand led to the indictment of persons operating illegal financial\nschemes, trying to defraud the government, engaging in union\nextortion, and participating in political corruption.\nEach of these operations was authorized and supervised by FBI\nheadquarters and by the local United States Attorney or by Justice\nDepartment attorneys (or both). Among the issues that were re-\nviewed was the need to avoid entrapment. In general, the courts\nhave allowed undercover operations-such as an agent offering to\nbuy illegal narcotics-as a permissible investigative technique, In\nHampton D. United States, the Supreme Court held in 1976 that\nthe sale to government agents of heroin supplied to the defendant\nby a government informant did not constitute entrapment. In an\nearlier case, Justice Potter Stewart tried to formulate a general rule\ndistinguishing a proper from an improper undercover operation:\n\"Government agents may engage in conduct that is likely, when\nobjectively considered, to afford a person ready and willing to com-\nmit the crime an opportunity to do so.\" It is noteworthy that this\nformulation appeared in a dissenting opinion in which Stewart\nargued that the case in question had involved entrapment; thus, it\n181\n12\nTHE PUBLIC INTEREST\nprobably represents the opinion of many justices who take a reason-\nthis trict view of what constitutes entrapment. As such, it affords\nample opportunity for 9th doceover operations, especially those, such\nas Abscain, in which lawyers can monitor agent activity on almost\na continuous basis.\nCongress was fully aware that the FBI was expanding its use of\nundercover operations. The House Appropriations Committee, as\nwell as others, were told about these developments-withont, of\ncourse, particular cases then in progress being identified. Moreover,\nCongress by law bad to give permission for the Bureau to do certain\nthings necessary for an undercover operation. These prerequis.\"\nto FBI cover operations involve the right to lease buildings\nor to enter Pito contracts in ways that do not divulge the fast that\nthe contracting party or the lessee are government agents, and\nthat permit advance payment of funds. Indeed, one statute pro-\nhibits a government agency from leasing a building in Washington,\nD.C., without a specific appropriation for that purpose having first\nbeen made by Congress. If that law had been in force, the FBI\nwould not have been able to lease the Washington house in which\nOperation Abscam was conducted. At the request of the FBI, how-\never, Congress exempted the Bureau from compliance with statutes\nthat might have impeded such operations, The proposed FBI Char-\nter, now before Congress, would specifically authorize undereover\noperations and would grant a continuing exemption, whenever\nnecessary, from the statutes governing contracts and leases.\nThough the FBI learned a great deal about undercover opera-\ntions by its early participation in Stings, Operation Abscam is not,\nstrictly speaking, a Sting at all. In a Sting, a store is opened and\nthe agents declare their willingness to buy merchandise from one\nand all. Much of what they buy involv es perfectly legitimate sales;\nsome of what they buy is stolen, and when that is established, the\nground is laid for an arrest. Operation Abscam followed a quite\ndifferent route. It resulted from the normal exploitation of an in-\nformant who had been useful in locating stolen art works. The\ninformant apparently indicated that he could put agents in touch\nwith politicians who were for sale; the agents accepted, and set up\nAbscain by having an agent pose as a wealthy Arab interested in\nbuying political favors to assist his (mythical) business enterprises.\nSeveral important congressmen, or their representatives, were\nbrought to the house used for Abscam and their negotiations with\nthe agents recorded. The operation is no different in design from\nthose used in many other cases that carned praise for the Bureau.\n182\nTHE CHANGING FBI: THE ROAD TO ABSCAM\n13\nWhat is different is that in this case congressmen were apparently\ninvolved and the operation was leaked to the press before indict-\nments were issued.\nCangress, kins enforcement, and the Constitution\nFor congressmen to be in trouble with the law is nothing new.\nDuring the 95th Congress alone, 13 members or former members\nof the House of Representatives were indicted or convicted on\ncriminal charges. Most if not all of these cases resulted from the\nuse of conventional investigative methods-typically, a tip to 3 law\nenforcement officer or reporter by a person involved in the offense\n(bribery, payroll padding, taking kickbacks) ho then testified\nagainst the official. Law enforcement in such cases is ordinarily\nreactive and thus crucially dependent the existence and volu-\nbility of a disaffected employee, businessman, or accomplice. Oper-\nation Abscam was \"proactive\"-it created an opportunity for persons\nto commit a crime who were (presumably) ready and willing to\ndo so.\nCongress has never complained when such methods were used\nagainst others; quite the contrary, it has explicitly or implicitly\nurged-and authorized-their use against others. There is no small\nelement of hypocrisy in the complaints of some congressmen that\nthey did not mean a vigorous investigation of white-collar crime to\ninclude them.\nBut it is not all hypocrisy. It is worth discussing how such investi-\ngations should be conducted and under what pattern of account-\nability. An unscripulous Fresident with a complaisant FBI director\ncould use undereover operations to discredit political enemies, in-\ncluding congressmen from a rival party. Hoover was a highly politi-\ncal FBI director, but he saw, rightly, that his power would be\ngreater if he avoided investigations of Congress than if he under-\ntook them. Clarence Kelley and William H. Webster have been\nstemly nonpartisan directors who would never consider allowing\nthe Bureau's powers to be put in service of some rancid political\npurpose. But new times bring new men, and in the future we may\nagain see partisan efforts to use the Bureau. What safeguards can\nbe installed to prevent schemes to embarrass political enemies by\nleaked stories is worth some discussion.\nBut there is a dilemma here: the more extensive the pattern of\naccountability and control, the greater the probability of a leak.\nThe only sure way to minimize leaks is to minimize the number of\n.83\n14\nTHE PUBLICINTEREST\npersons who know something worth leaking. In the case of Opera-\ntion Abscam, scores of persons knew what was going on-in part\nbecause such extensive efforts were made to insure that it was a\nlawful and effective investigation. in addition to the dazens of FBI\nagents and Nisir supervisors, there were lawyers in the Justice De-\npartment and U.S. Attorneys in New York, Newark, Philadelphia,\nand Washington, D.C., together with their staffs, all of whom were\nwell informed: Any one of them could have leaked. Indeed, given\ntheir particin spensorship and what is often their background in\npolitical activies, U.S. Attorneys are especially likely to be sources\nof leaks more so, 1 should surmise, than FIV agents. 11; in order to\nprevent abuse. of the Burden's investigative powers, ve ink rease the\nnumber of supervisors-to for Nample, members of the\nHouse or Senate othics committees-we also increase the chances of\nleaks (to My withing of other ways by which such lave tigations\ncould to compromised).\nIn the meantime, the deliate will not be helped by complaints\nthat the Burcau has launched a \"vendetta\" against Congress or that\nit is \"out of control.\" It is nothing of the kind, It is an organization\nthat is following out the logic of changes and procedures adopted\nto meet the explicit demands of Congress.\n1.0\n28 25\nand\n3.2 22\n24\n2.0\n1.1\n1.8\n1.25\n1.4\n1.6\nPHOTOGRAPHIC SCIENCES CORPORATION\n220 BASKET ROAD\nPD 0 BOX 338\nAEHITER NEW DORK 14580\n210 205 1600"
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