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ABSCAM (3 of 4)
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Records of the Office of Counsel to the President (Reagan Administration)
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: ABSCAM (3 of 4)
Box: 1
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
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98
long. lives undercover operations and all their problems and bene-
fits and issues. So he is just a critical party.
Now, what happens is, a proposal comes in and if these officials
with their various perspectives see a flaw in it, they modify it.
They send it back to the field. They say it was not quite satisfac-
tory in this fashion. See if you can come up with a safe way, with
fewer risks.
Often a proposal will bounce back several times before it is
finally judged to be sufficient. That's why at the final moment of
decision, it really is a consensus. It isn't something where they
have a vote and say 6 to 5. it's approved or rejected. It's a consulta-
tive process.
A consensus develops because. where there's problems. changes
are ordered. So that's why the reference in the guidelines to con-
sensus.
Mr. EDWARDS. Can I ask a question? How often does the commit-
tee meet?
Mr. MICHEL It varies, Congressman, depending on the volume of
new applications and renewals. It meets normally I think in the
FBI headquarters. And I think it meets on a very regular basis. I
can't tell you if it's weekly or biweekly or what. It meets on quite a
regular basis.
Mr. EDWARDS. Have you ever attended a meeting?
Mr. MICHEL. I have not.
Ms. COOPER Does the committee keep minutes?
Mr. MICHEL. Let me back up and answer both, to counsel's earli-
er question and something you alluded to, Mr. Chairman, the com-
mittee also includes senior officials from the FBI's Office of I egal
Counsel and it's service divisions, technical services. or whatever
So that all viewpoints and operations are brought to bear in that
one setting, all the various kinds of expertise.
Ms. COOPER. Well: it seems to me that it's very hard for this
oversight committee to really know what's going on. It sounds like
sometimes, OLC or other divisions of the FBI or the Justice Depart-
ment are included. but maybe not all the time.
Mr. MICHEL. No. no. The membership is the same except that
added to the normal membership. in the case of a particular pro-
pesal. would be one or two or perhaps three individuals whose
background relates to that particular proposal or the program it
came from. But the committee itself is not a rotating membership.
It's the same people and the same units of the FBI are represented
at all sessions of the committee. such as Legal Counsel.
Ms. COOPER. Well, what about the Office of Legal Counsel? The
operations that come to the Review Committee come to it because
of the existence of sensitive circumstances. Doesn't that normally
require some sort of evaluation of the legal and ethical problems
that are involved in the operation?
Mr. MICHEL. It's certainly a good idea. And the process actually
begins at the field office level. Every field office has its own in-
house legal adviser. When an undercover proposal is first fashioned
in the field office. that lawver reviews the legal implications. Then
it's submitted to FBI headquarters, either as you say because of
some indicia of sensitivity, or if it involves substantial dollars,
99
whether or not there's other kind of sensitivity, and then there's
further legal review there.
Now, where the committee. despite having some lawyers on it,
it's got the two prosecutors and it's got the FBI headquarters' legal
adviser on it. where even those lawyers have doubt about whether
the legal issue has been well enough analyzed. they take matters
up with the Justice Department's Office of Legal Counsel. And
they get formal opinions where necessary.
So : think the legal base is rather thoroughly covered in the
process.
Ms. COOPER. My question is. why aren't such members a perma-
nent part of the committee, if these questions are occurring and
constant in the policy decisions that are presented before the com-
mittee, rather than leave it to the permanent members who have a
different perspective than other divisions and parts of the Depart-
ment?
Mr. MICHEL. The FBI's Legal Counsel Division is represented on
a committee in all of its meetings.
Ms. COOPER. One of the permanent members is a representative
from the Office of Legal Counsel?
Mr. MICHEL Of the FBI. yes.
Ms. COOPER. What about the Justice Department's?
Mr. MICHEL. No. Because our experience has been the majority of
cases. we don't need to refer to the Justice Department's Office of
Legal Counsel. No one from that office sits on the committee.
Where necessary, issues are referred by the committee to the De-
partment's Office of Legal Counsel for advice and sometimes for
formal written opinions.
Ms. COOPER. What about the Office of Professional Responsibility
of the Justice Department and the FBI? Are they permanent mem-
bers of the committee?
Mr. MICHEL No.
Ms. COOPER. Why not?
Mr. MICHEL. Because it's not viewed as necessary. I don't even
recall any discussion of that, because the whole approach is to have
rather clear procedures now embodied in guidelines. And where
the direction is clear and appropriate. you avoid ethical questions.
You don't need somebody who's an expert in judging ethical fail-
ures. because you avoid failures in the first place by having sound
and clear limits set forth.
Ms. COOPER. Well. what's the purpose of having people of special
expertise on the committee if it isn't to have special sensitivity
about discerning the presence of those issues, a sensitivity that
other people might not have?
Mr. MICHEL. Well, I don't agree if you're suggesting that all
those officials from the Department and the FBI that I identified
lack judgment to grapple with the issues of sensitivity. I don't
think that's the case.
I think quite to the contrary: that the committee has demonstrat-
ed a very great sensitivity and a very fine judgment. In fact, the
FBI should get credit apart from its role in the committee. That is,
FBI headquarters frequently will not approve a proposal from the
field, at least not without changes, a di they send it back on their
own. It never even gets to the committee. So that the committee's
100
time is reserved for projects that are in rather good shape. I think
that supports the notion I'm suggesting. that there is good sensitiv-
ity among the membership of the committee.
Ms. COOPER. Well, I'm only suggesting that people who work in
one area have more knowledge and more sensitivity about the area
that they re used to working in.
Let me give you another example. One of the sensitive circum-
stances is the possibility or the probability of civil liability arising
out of an undercover operation.
That suggests, it seems to me, an awareness on the part of the
Justice Department and Attorney General that this is a serious
risk in many, if not all. undercover operations.
Why then does the committee not have a permanent member
from the Civil Division?
Mr. MICHEL. It is not a serious risk in many or all undercover
operations. The truth is the opposite. That it is rarely a substantial
risk that there will be appreciable civil liability.
And the reason is that we are very careful about that. There
were a few. very bad experiences. such as Front-Load. back in
earlier years.
But the kind of operations being undertaken now. rarely involve
substantial questions of civil liability.
Now, with regard to expertise in the Civil Division. that is avail-
able and resorted to. much in the same fashion as we sometimes.
when needed. refer matters to the Office of Legal Counsel.
Ms. COOPER. Let me ask you again what you didn't get a chance
to answer. Are minutes kept of the meetings of the committee?
Mr. MICHEL. Records are kept of its determinations. I don't be-
lieve that minutes are kept in the sense that a court reporter is
making a verbatim record of everything that we say.
Ms. COOPER. Would those records indicate who was participating?
Mr. MICHEL Oh, sure.
Ms. COOPER. Is anybody who is participating part of the group
that reaches a consensus? I don't want to say .ote. because it
doesn't sound like it's that formal.
But if someone is drawn into the committee from the Civil Divi-
sion, for example. or some other part of the FBI or-the Justice
Department normally doesn't sit on the committee. Do they take
part in the final decisionmaking?
Mr. MICHEL Well. they take part in the sense that the commit-
tee will endorse a proposal and forward it to the Assistant Director
or the Director, who is really the final approving authority, unless
anyone present and participating has substantial problems with it.
So whether or not a sometime member of the committee technical-
ly has a vote. it really isn't relevant. If he has problems with it. it's
unlikely that it will be endorsed by the committee and sent to the
Assistant Director or the Director for final approval.
Ms. COOPER Maybe I missed part of your answer. Did you indi-
cate whether or not the records that are kept indicate who partici-
pated in the deliberations of the committee?
Mr. MICHEL. I believe that they do. But I've not inspected the
records and SO I can't be positive about that.
Ms. COOPER. And would the records also indicate how often, at
what precise dates. the committee met in deliberating?
101
Mr. MICHEL. I assume SO.
Ms. COOPER. What kind of data is presented to the committee
from the field? What is the form of it?
Mr. MICHEL. Well, it is in writing. and it's gone through prior
reviews and the views of reviewing officials are also recorded.
The level of detail and the extent of the written discussion of
issues varies enormously, according to the particular operation and
how major and sensitive it is.
Mr. EDWARDS. Well, they just don't meet and chat about the
issue and reach a consensus. A careful record is kept of exactly
what went on and the views of the different people, and so on, is
that correct?
Mr. MICHEL. I think that's several yesses. I think in general, good
records are kept concerning the committee's review of a project. I
know that the facts about the project are elaborately written up.
And I would think that they are the most important part of the
matter because they discuss the issues.
And they get into matters like why the officials at lower levels
who approved it think the risk is acceptable, or that such and such
a problem has been controlled.
So that I think that if the question is: Could someone, looking
back at the total record with regard to operation X. be able to
reconstruct what issues were considered and how fully, and what
sort of thinking served as a basis of their resolution, I think the
answer is "Yes."
You would get a rather full picture.
Mr. EDWARDS. I think that's something that you ought to check
and advise us about, though. because I'm not sure that you're
certain of that.
Mr. MICHEL. I'm not certain what the minutes of the meeting, as
we're calling it, show, because I've not inspected them.
I am certain of the level of detail of the application papers. SO to
speak, because in several particularly sensitive operations, I have,
among some other Department officials, reviewed the full package.
And they are exceedingly detailed and thorough, and contain a lot
of analysis and discussion.
They frequently, for example, reflect extensive analysis by the
U.S. attorney in the District. That's part of the paperwork that
accompanies the package when it comes into headquarters in major
cases, at least.
Mr. EDWARDS. Thank you. Mr. Boyd?
Mr. BOYD. Thank you, Mr. Chairman. Have there been any civil
claims filed in connection with Abscam, Mr. Michel?
Mr. MICHEL. I don't know.
Mr. Boyr We're all familiar with the leaks which came out
during the early stages of the Abscara investigation and of former
Attorney General Civiletti's attempts to find the sources of those
leaks.
Could you tell us what has been done to eliminate the future
possibility of leaks, given the number of people involved in the
approval process?
Mr. MICHEL. Well, the first thing I would like to observe, because
it's been raised before, is that the implementation of the guidelines
will not add to the number of people with access to the facts of
102
sensitive undercover operations. That number will remain about
the same as before the guidelines.
Second, that number we always try to keep to a minimum, just
as in the context of classified information. agents try to limit
access by following the well-known need-to-know principle.
Third, as a result of some experiences in the past. some addition-
al steps have been made to eliminate marginally needed access.
Mr. BOYD. Those experiences you're talking about are the leaks?
Mr. MICHEL. Among others, yes.
Mr. BOYD. With regard to the guidelines and the potential viola-
tion of those guidelines, or a prior policy with regard to undercover
activities, what types of disciplinary procedures are normally fol-
lowed, and what kinds of sanctions?
Mr. MICHEL.. I'm glad you raised that. One of the witnesses
yesterday went into some length in his statement. to suggest that
guidelines weren't taken seriously, weren't complied with. weren't
enforced. had no sanctions, and SO forth.
I believe that the witness was actually talking about guidelines
involving New York City's police department rather than FBI
guidelines. But in any event. he raised that issue. I think that two
observations are in order on that score.
The first is, whatever other criticisms the FBI gets, or may even
deserve in some occasions, it is not an organization of rogue ele-
phants who go around breaking the rules. It's been suggested by
Prof. James Q. Wilson in a thoughtful article on undercover oper-
ations, that second only to the U.S. Marine Corps. the FBI is the
most rigidly disciplined organization from the standpoint of abso-
lute compliance with internal rules and regulations.
By the way, Mr. Chairman, that article you might want to con-
sider. I wouldn't request it. It's really up to you. you might want to
consider making that article by Professor Wilson a part of the
record.
It's called "The Changing of the FBI. the Road to Abscam." And
it appeared in the Public Interest in a recent issue.
The second observation, I make. Mr. Boyd, is that where an
FBI-excuse me. let me finish one other aspect first.
We've really had one very major compliance check on existing
guidelines. That was a check done at little more than a year ago, I
believe, of compliance with the undercover-I'm sorry-the inform-
ant guideline. And that was a studv done by some academic people.
I believe that the committee is familiar with it.
My recollection is that, that that study concluded. no surprise to
me, that the level of compliance was extremely high. and that the
occasions found where the guidelines were not followed were very
few, and very peripheral, and obviously, basically innocent in
nature.
So, I think. No. 1, that the guidelines are taken seriously, and
they are followed. and we have proof of that.
No. 2, there are sanctions. The real sanction that's involved here
is you can get fired. And FBI Directors have not hesitated to fire
people who committed substantial wrongdoing.
And my own opinion is that that's probably much more effective
than lots of other sanctions, if your job is on the line for breaking
103
the rules, and you're a disciplined professional. I think the reaction
is going to be that you'll follow the rules.
Mr. BOYD. Let me interrupt for a second to note that FBI person-
nel are excepted personnel and are subject to being fired without
cause unlike many Government employees.
Mr. MICHEL. Thank you.
Mr. BOYD. I have one other question.
Mr. EDWARDS. Take your time. Sure.
Mr. BOYD With regard to disciplinary activity for violations of
the guidelines, since these guidelines are rather new, there prob-
ably haven't been too many investigations for violations of them.
But if, in the future, when there are violations of these guide-
lines, there are investigations which result in sanctions, is it going
to be the policy of the Department to announce to the public, after
the fact, that investigations have taken place and that remedial
action has been taken?
Mr. MICHEL. I don't know what the policy on public announce-
ment might be. I think with regard to congressional oversight, that
the Department, as before, would provide some reasonable form of
access for committees and staff of how the rules and regulations
are enforced.
But I have no idea what the future policy might be on public
announcements about such inquiries.
Mr. BOYD. Thank you, Mr. Chairman.
Mr. EDWARDS. Mr. Michel. section (Bin) precludes the special
agent in charge from initiating an operation when an undercover
employee or cooperating private individual will be required to give
sworn testimony in any proceeding in an undercover capacity.
Do you mean that in some cases, the witness might be testifying
under oath, without revealing his real identity?
Mr. MICHEL. Well, the purpose of section B is to establish a
trigger of what things have to be sent to headquarters. That's what
that list of factors does-if one of those is likely to be present. Then
the matter has to go to headquarters. Can't be decided only by the
SAC.
Mr. EDWARDS. Well. under any circumstances, could the witness
be authorized to commit perjury?
Mr. MICHEL I think that the answer to that, under the Archer
cases and other cases, is basically no.
And I don't believe that listing this as a trigger factor was
intended to suggest that we're looking for opportunities to have
witnesses testify improperly.
Mr. EDWARDS. Now guidelines also permit the Director to ap-
prove operations that will involve the commission of crimes by the
agent or informant.
Is there any limit to what kind of a crime might be authorized?
Does it go as far as robbery, murder, or anything like that?
Mr. MICHEL. Of course not. And the point of reference would be
to the informant guidelines.
You'll recall that the informant guidelines provide that infor-
mants are to be told they may not engage in violence.
So, the general rule is a prohibition on violence. And the excep-
tions are limited.
104
And certainly, we are not going to have people going around
participating in armed robberies.
Mr. EDWARDS. Crimes are committed by agents from time to
time. I guess in- fencing operations or gambling or minor drug
operations, aren't they?
Mr. MICHEL. Those are good examples and common examples.
Ordinarily, they are relatively minor. Ordinarily, they are nonvio-
lent and ordinarily, our role in the criminal activity is primarily
passive in nature.
Mr. EDWARDS. Now, would these guidelines immunize the agent
who has committed the crime from prosecution by a State or
Federal court?
Mr. MICHEL. No. They couldn't as a matter of law and they
certainly weren't intended to.
Mr. EDWARDS. Mr. Lungren?
Mr. LUNGREN. The only thing Fd ask. Mr. Chairman, is I have
not had a chance to see Professor Wilson's article and I imagine
some other members of the committee haven't So I wonder if I
could ask that that be included in the record.
Mr. EDWARDS. Without objection, SO ordered.
[See appendix 3.]
Mr. MICHEL Thank you. Mr. Lungren.
Ms. COOPER. In your testimony, you indicate that the Justice
Department and the FBI has:
Systematically analyzed all major operations upon completion precisely for the
purpose of refining our undercover techniques. The lessons that could be learned
from the past are being learned and applied in present cases
My question is, Is the Justice Department now or does it intend
to review the record that is now being created in the undercover
operations cases which are being subjected to due-process violations
analysis? Reviewing that record with the eve toward determining
whether or not the guidelines or the principles embodied in the
guidelines have, in the past. been followed, or can be applied? Are
they realistic guidelines?
Mr. MICHEL. Well. our approach is to turn to all available
sources of information to help us improve our techniques. And that
includes not only our internal records about an undercover oper-
ation. but as in the case you referred to. the court records as well.
Ms. COOPER. The reason I ask is because, frankly, I read your
testimony today as not giving any credence to the kinds of asser-
tions and evidence that have been presented in the Abscam due-
process hearings. There is factual evidence that has been submitted
in those cases, which may or may not rise to the level of due-
process violation, but which certainly indicates serious problems
with the way the case was administered; for example, the failure to
keep written records, the failure to control informants in the con-
versations they had with the subjects, the ambiguity, sometimes
deliberate, caused by the failure of both informants and agents in
presenting inducements to make it clear the criminality of the
offer being made to the subject.
All these things have been presented to the courts. Now, again,
they may not reach the level of a due-process violation, but they do
indicate that there have been problems.
105
Does the Justice Department categorically deny those are prob-
lems that ought to be considered in refining the guidelines?
Mr. MICHEL. Counsel, the statement that I submitted to this
committee today was not intended in any way whatsoever to reflect
opinions about the facts alleged in the court proceeding. No. 1. I
don't know in detail the facts alleged. No. 2. I haven't formed
opinions myself. And No. 3. you, in any event, can't take any
position on that, while the matter is still under active litigation,
which it is.
So, please don't misunderstand. Nothing in my statement was
intended to reflect judgments on the credibility of witnesses who
testified in that court proceeding.
With respect to whether the FBI is interested and the Justice
Department is interested in undesirable events, even if they fall
short of running afoul of the law the answer is yes, of course we
are.
I testified earlier that one of the principles on which the guide-
lines were written was to not only meet the requirements, the
mandatory requirements set forth in the Constitution, but over and
above that, to have practices that avoided to the maximum extent
possible, untoward incidents and reflected sound law enforcement
policy.
Ms. COOPER. What is the body that would be or is there a body
that would be revising or considering revisions to the undercover
guidelines?
Mr. MICHEL. I don't know the answer to that question.
Ms. COOPER. Is the committee that you on still intact?
Mr. MICHEL No.
Ms. COOPER. I'd like to get a bit of clarification about the func-
tion of guidelines. You stated that you don't think that one of the
guiding principles was that the guidelines ought to be a catalog of
do's and don'ts. Rather, it ought to formalize sound procedures.
Now, in other guidelines, such as the domestic security guide-
lines, there are certain do's and don'ts listed. certain techniques
that are not to be used at certain stages that may be used in other
stages. It's not a question of simply affixing that responsibility on
higher authorities. There are definite do's and don'ts. Aren't there?
Mr. MICHEL. You're referring to the domestic security guidelines?
Ms. COOPER. Yes.
Mr. MICHEL. There are limitations in those guidelines on tech-
niques that can be used in less-than-full investigations. And the
limitations were imposed because of the peculiar risks in the con-
text of investigating groups that maybe involved extensively or
primarily in lawful activity.
And also because those guidelines, to a great extent, focus on
what we call future crime. That is, the group under investigation
under a domestic security guideline may not yet have committed
any crime, even an incipient crime like conspiracy.
Therefore, there are risks that are unique to that circumstance.
And those kinds of risks do not appear or appear to the same
degree in undercover operations.
Ms. COOPER. But there are other risks that, in fact, are enumer-
ated in the undercover guidelines?
106
Mr. MICHEL. There certainly are risks in undercover investiga-
tions and in other kinds of investigations, too. And if the question
is, well, since there are risks, there should be absolute do's and
don'ts, and our analysis, that for 18 months, developing these
guidelines, led us to the conclusion that unlike the domestic secu-
rity context, in the undercover context, it was neither feasible, nor
desirable or necessary. to have categorical prohibitions.
Ms. COOPER. Well, let me move on to another area. From the
perspective of this committee and the Appropriations Committee,
as well as the whole Congress. the most important, overriding
question is: Is it worth it? Do undercover operations really produce
results which justify all the intrusions and risks that the guidelines
SO well identify? And do they justify the expense and the use of
resources. which is increasing steadily at the Federal level, and
probably also on the State and local level?
We heard testimony from a sociologist who asserts that neither
the Justice Department nor anybody else really is making any kind
of objective, empirical analysis of whether or not these kinds of
operations deter crime or whether particular investigations can be
reached by more conventional methods.
What has the Justice Department done in the past to evaluate
the effectiveness of undercover operations?
Mr. MICHEL. Well. first, much of what Professor Marx said clear-
ly had to do with State and local police authorities and not with
the FBI. The FBI hás a very limited jurisdiction. And it's engaging
in undercover operations on an extremely selective basis.
Less than 1 percent of the FBI's annual budget is devoted to
money specifically earmarked for undercover operations. The oper-
ations are ones in which an assessment is made on a case-by-case
basis that it's worth it, though-it's worth the trouble, the money,
that the risks are not unduly high. that the benefits will justify the
whole enterprise. That's made in every case on a determination of
the facts of that particular case.
Ms. COOPER. But those judgments are made before the operation
starts, right? It's not an evaluation aft or the fact as to what kind of
results vou're getting.
Mr. MICHEL. Well, keep in mind that the officials making the
judgment on how worthwhile undercover operation No. 2 might be,
are the same officials who just reviewed what happened in under-
cover operation No. 1 that just finished, and they are the same
officials who authorized No. 1 in the first place.
So we would have to be asleep to not benefit from each operation
during its progress. And once it's completed. we do review them.
And we review them from many standpoints, including how worth-
while it was.
Now. I don't think there is anything that I can say that would
materially add to the testimony of Director Webster or the Assist-
ant Attorney General in charge of the Criminal Division before
this committee nearly a year ago They gave examples of past
undercover operations. And it seems to me clear on the facts of
those particular operations, that the benefits were enormous and
the risks were manageable and reasonable.
107
And my own opinion is it's not even a close question. That in
those particular questions, Operation Lobster and the rest. they
were clearly worthwhile.
Ms. COOPER. That's right. They presented that evidence. Since
then, there has been a good deal of subsequent analysis and evi-
dence to indicate that those conclusions may not be entirely valid:
for example, the Director talked about stolen certificates of deposit
that were recovered in a recent case. There is evidence, although
it's not proven yet, that those stolen certificates of deposit were. in
fact, created by an informant for the FBI in Operation Lobster, the
case which the Assistant Attorney General spoke about.
He also told the subcommittee about evidence that the crime
rate had fallen dramatically subsequent to the raids made in that
operation. What we don't know is whether that was a long-term
effect of the operation or whether there was any displacement. So
we don't have all the evidence on that.
The Dr Marx who was here vesterday, told the subcommittee
about a reevaluation of study that was done by the Justice Depart-
ment that measured the effectiveness of antifeneing sting oper-
ations. which showed a decrease in the level of crime. That
reanalysis was very critical of those conclusions.
We haven't seen that yet. So I can't evaluate it. But there does
seem to be a good deal of controversy about whether or not there
really is any body of evidence that the Justice Department has
collected to indicate the effectiveness of undercover operations in
general: not the measure of an undercover operation by the
number of indictments or convictions, which, of course. all success-
ful operations must lead to. but the question of how really it affects
the level of crime in a community.
Mr. MICHEL. Let me just make one response, which applies both
to the questions you've just asked and some that you asked imme-
diately before. The question is: Compared to what?
You say that there are risks to undercover operations, civil liabil-
ity, leaks, et cetera. All quite true. But those risks also are present
in most other forms of investigation.
Second. in terms of measuring the benefits, I don't find it myself
very convincing to say, well. we had 10 sting operations in a 2-vear
period in city x. And at the beginning of the period, the burglary
rate was so and so, and at the end of the period. the burglary rate
was so and so, plus 5 percent. Because, again. the question is:
Compared to what?
It may very well be that if the undercover operation had not put
all those burglars and fences in jail, that the burglary rate at the
end of the 2-vear period would have not been 5 percent more than
at the beginning. but it would have been 100 percent more. So you
have to be awfully careful that you don't deceive yourself with
analysis.
Now, I think that studies that may be done by scholars, by
research organizations, by the Department or by others, can be
valuable. And certainly, we would like to know more about the
impact of our investigative programs and prosecutions than we
sometimes know. I have no argument against that and I don't
minimize the potential value of that.
BLANK
INTENTIONAL
108
I do know that those studies and testimony of experts tends to be
valuable in proportion to the focus on accurately describing the
facts of real cases. I think it's so easy to be long on speculation and
long on analysis and short on facts. And where that's the case, it's
not very instructive.
Ms. COOPER. Why do you think that your undercover operations
are effective in controlling crime?
Mr. MICHEL. 1 don't mean to be flip, but in a sense, the answer
could be because they put people in jail, and they do it better than
other techniques. They do it better because the odds of conviction
are even higher. They do it better because the odds of pretrial
motions resulting in the case never getting to an adjudication of
guilt or innocence are vastly reduced. They do it better because
they focus on major actors and criminal enterprises by stripping
away the layers that ordinarily insulate those actors from effective
investigative pursuit.
I may say, too. that I do not agree about the implication of some
and the explicit testimony of Professor Chevigny that undercover
operations are more intrusive. It seems to me that they are far less
intrusive than most other significant techniques.
Again. I ask my question: Compared to what? Yes: an undercover
operation can, in some circumstances, be fairly intrusive. But com-
pared to what? Compared to wire tap? It seems to me a wire tap is
far more intrusive. The wire tap gets everybody who uses the
telephone. It gets every conversation. It's inherently indiscrimi-
nate. An undercover operation doesn't normally get into some-
body's political or religious beliefs.
When people come to our sting operations or our other oper-
ations. they come to talk about crime. We don't get involved as we
would dealing through informants, in peripheral aspects of their
life.
The part of the value of undercover operations is it allows us to
focus only on the criminal part of that person's life and not have to
be involved in the other part, which is of no use to us and involves
problems of privacy.
Mr. EDWARDS. Fd like, Mr. Michel, to get back just for a minute,
to the middleman. I'm not satisfied that these middlemen are
uncontrollable or that the guidelines have anything to say about
hov. these middlemen are uncontrollable.
And I think we have good evidence of it in certain aspects of
Abscam. We're certainly not going to discuss any of the specific
cases, except that one or two of these purveyors did go in a com-
pletely uncontrollable way and try to get certain people over and
over again and offer a lot of money over and over again, The mere
approaching and offering damaged these people who happened to
be in public life, personally, with their families, with their constitu-
ents, with their neighbors.
Now, what steps have been taken SC that that kind of loose-
cannon operation won't take place in the future?
Mr. MICHEL. Well, to some extent. the problem of cooperating
individuals can't really be solved, because people who make good
cooperating individuals or who make good informants usually are
criminals or closely involved in criminal activities themselves and
often are people of questionable traits.
109
But crime-fighting is inherently a little bit of a messy business.
You can't find useful informants who are boy scouts, who are
upright citizens. So, you, in the end, to some extent, face the choice
of you're either not going to fight crime. because there are these
unsavory characters who in giving you a report may be exaggerat-
ing or fabricating or doing crazy things themselves, or you proceed.
but you try to limit the risks. You try to hedge your bet.
Now. both with regard to classic informants situation and with
regard to cooperating individuals in undercover circumstances. we
proceed and we try to minimize the risks.
I think that you correct. that the cooperating individual poses
special problems. That is part of the reason why, where we can, we
prefer to have the middleman an unwitting middleman.
Look at some of the advantages to us of the unwitting middle-
man. If the unwitting middleman says that he can get a State
legislator to take a certain action in return for money, then we're
insulated from the implication that W had it in for that guy. No
one can say that we picked on Mr. So and So for some nefarious
reason. because we didn't identify him to begin with. The unwitting
individual did and did it having no idea that he's really talking to
the FBI. so the unwitting individual in some ways is safer and
provides a kind of insulation to charges of improper target selec-
tion. On the other hand, he's a little bit harder to control than the
cooperating individual.
And I think that the key point perhaps is this: We need to be
very sure that our cooperating individuals are not themselves
making any offers. If we can limit their role to being a middleman
in the sense of a broker who brings together two parties. then we
can get past the fact that the middle man may be lying or exagger-
ating or distorting or he's got it in for somebody and he's just
trying to get the fellow in trouble for some personal vindictive
reasons.
So we need to put very heavy emphasis on limiting the role of
the middleman and by being sure that all the operative conversa-
tions are ones that are taking place between the suspect and un-
dercover FBI agents, and not just between the middleman and the
suspect. 1 don't think that there's anything more that we can do.
And again, I think it's important to remember that the harm to
those individuals that you're referring to really was harm from
leaks. Whether or not there had been an undercover operation as
opposed to another kind of investigation, once there's an allegation
that SO and SO is corrupt. the harm to that person, where he's
totally innocent. someone is just misdescribing his activities. comes
from the leak more than from the method that the allegation was
acquired by.
So I think that much of the protection for wholly innocent people
has to come through further efforts to avoid leaks as much as
through further efforts to make sure that the controls on middle-
men are as tight as they can feasibly be made.
Mr. EDWARDS. I'm sure that you recognize the danger and that
you're substantially reexamining this particular situation.
Mr. MICHEL. Yes. we are.
Mr. EDWARDS. The scam within the scam has done great damage
and the cases that I referred to earlier are regrettable. and I'm
83-566 0 81 - 8
110
sure you regret them. Have you had high-level discussions in the
Department of Justice about this new philosophy?
When I was an agent many years ago. there weren't any such
operations. Mr. Hoover was very much against them because he
thought of what it might do to the agents themselves. what it does
to society. It is a sort of new philosophy, as some of our witnesses
have pointed out, in American law enforcement.
There are dangers of one American becoming suspicious of an-
other. A husband suspicious of his wife. employer. employee, a
business person wary of his competitor across the street, because
the competitor might have a secret agent in his storeroom or
something.
Now, are you thinking about the ngs like that over at the Depart-
ment and studying them. and are there courses given at Quantico
to FBI agents by professors and others SO that in-depth thought can
be given?
Mr. MICHEL. I think the answer to all of those questions is yes.
And I think that the whole motivation behind the guidelines was
to respond to the undeniable fact that there are risks and risks
mean that, in some circumstances, innocent people can be dam-
aged. And it's very important to reduce that to the smallest possi-
ble amount or to eliminate it entirely, where that's possible.
1 think it's ordinarily not possible to eliminate it altogether. But
I think it is possible to reduce it to an absolute minimum.
I think that when you read the guidelines, they reflect the con-
cern of the FBI and the Justice Department at all levels with
making sure that there are appropriate controls and procedures
and that we nave minimized the risks.
Mr. EDWARDS Well, an operation can 20 on for 6 months?
Ms. COOPER. Without approval.
Mr. EDWARDS. Without approval again. How do you know what's
going on in an operation in 6 months? Under the Domestic Secu-
rity Guidelines there is a review after 30 days, as I recall.
Mr. MICHEL. There is a little point of confusion on that, Mr.
Chairman. The review by the Attorney General or his designee of
ongoing domestic security investigations occurs annually.
Mr. EDWARDS. But an investigation has to stop after 30 days if
something further hasn't developed.
Mr. MICHEL Where you have a preliminary investigation only,
there's a time limit on it. Most investigations that amount to
much. under the domestic security guidelines. are full investiga-
tions. And they then come under that annual review.
I think the answer to your question. though. is that undercover
operations are under continuous review and not just within the
field office. As Director Webster indicated. the most sensitive ones
resulted in his being briefed on a very frequent basis about specific
details of a particular operation.
And needless to say, at only slightly lower levels of the FBI there
is continuous scrutiny of what's going on in those undercover oper-
ations.
So there are parallel tracks. There's the committee review track.
which focuses on events like initiation of the operation, and a
major change where it switches to a different compass coûrse. But
111
the other track is the regular chain of command supervision within
the FBI, and that's a very lively, fast track.
I think from my own experience that the FBI officials at head-
quarters keep an exceedingly close watch on undercover oper-
ations. The more sensitive they are, the closer the watch.
So if we sit back and say. hell. they only look at this every 6
months, that really isn't the case at all. They look at it every week,
sometimes every day. And they should.
The guideline references to 6 months really was simply to have
some automatic provision. Remember I said there were three trig-
gers? If the purpose changes. the scope changes, then you have a
review immediately. ne matter if it's only been approved for 30
days or 50 days or whatever.
Second, if you spending a significant amount of money. auto-
matically you have a review. So the 6-month provision was just to
have some automatic device. 50 that at a minimum. the operation
would get a complete new look at 6 months. But they are under
very close scrutiny on an ongoing basis. really on a daily basis.
And it's a shame. in a way, that the guidelines don't refer to
that. because it's easy to forget on just reading the text of the
guideline how close and frequent the review is.
Mr. EDWARDS. Mr. Boyd.
Mr. BOYD. With regard to sting operations as opposed to Abscam
tape operations. you indicated sting operations are the most fre-
quently used type of undercover operation. And I think you would
agree that there are other factors beyond the control of the FBI
which influence the effect which these operations have on deter-
ring crime.
I wonder if the Department or if the Bureau has access to or has
compiled any statistics to indicate. for example, with regard to the
sting operation in Washington, before the Abscam operation. the
percentage of convictions which were gained as a result of indict-
ments flowing from that operation, the number of recidivists who
were convicted, the extent to which these individuals were sen-
tenced and the actual time spent incarcerated. Because individuals
released after spending a short period of incarceration or time in
jail often are in a position to commit more crime.
Mr. MICHEL. Well. the answer to your question is, "Yes. those are
important things." Yes, we do some analysis of that sort. Anything
else, it's limited in scope and in coverage because our resources are
stretched very. very thin.
There are 800 or 900 fewer agents today than there were 5 years
ago. But the crime rate even of Federal crimes didn't TO down. It
went way up. And with our increasing effort to go after higher
level criminals and to get into some of the most difficult areas of
investigation, which are very time consuming, that just adds to the
burden on the resources.
So that, to some extent. like the committee. the Justice Depart-
ment has to depend on studies done by scholars and think tanks.
and SO forth But sure, we're i terested in those things.
We do some of that kind of analysis and, as I think you may
have been suggesting, one of the benefits of undercover operations.
in addition to increasing the odds of convictions. is that they result
112
in higher level figures, and I think generally result in much longer
sentences.
Mr. BOYD. Thank you. I have no further questions. Mr. chairman.
Mr. EDWARDS. Ms. Cooper?
Ms. COOPER. Thank you. I'd like to return to a point made by the
Chairman about the sensitive circumstances listed in section B. At
least on its face, the guidelines leave an inference that the sensi-
tive circumstances are not prohibitions. They' simply sensitive
circumstances that require an operation to be reviewed by higher
authorities. And therefore, it leaves the possibility that any one of
these sensitive circumstances can be approved. That is, an oper-
ation which has a possibility or probability of or certainty of em-
ploying one or developing one of the sensitive circumstances can be
approved.
Now, when the chairman asked you about the Archer situation,
about the possibility of an undercover employee perjuring himself,
you indicated that you thought that that could not-that was
against the principles of the case and, therefore, could not be
approved. Are there any other circumstances listed here that you
think fall into that category?
Mr. MICHEL. Well, first and most important. the guidelines are
not intended to and do not and could not authorize activity that is
against the law. The FBI. in effect. has to follow the law and also
follow the guidelines. Nothing in the guidelines is in derogation of
our obligation to follow the law.
So I was astounded by what I thought was one of the suggestions
of one of the prior witnesses that the guidelines authorize the FBI
to do things that are clearly illegal. I think that's preposterous.
That's certainly not what they re intended to do. They'r intend-
ed, in fact. to prohibit. as a matter of policy. some things which
would be legal, but which are too risky or are undesirable or
unnecessary.
So the guidelines basically are intended to be more restrictive
than the case law and the statutes, not less.
Ms. COOPER. Let me ask you about section H. which has to do
with undercover employees posing as attorneys, physicians, clergy-
men or members of the media. With the approval of the higher
ups, it seems that it is possible that those impersonations can be
used to develop a confidential relationship, one that is ordinarily
privileged under law.
Do the guidelines sanction an agent violating his own ethical and
professional responsibilities? For example. if the agent is an attor-
ney himself. posing as someone else's attorney and thereby getting
into a confidential relationship with the subject?
Mr. MICHEL. I guess the question is whether the guidelines over-
rule the cannons of ethics. The answer is "no."
Ms. COOPER. OK. Let me ask you something on a different issue.
During stage 2, which you described. where there were principles
but not formal guidelines. principles that were enunciated before
the subcommittee last March, how was the field made aware of
those principles? The field, that is, that was engaged in undercover
operations?
Mr. MICHEL. Well, by the normal FBI communications that
you're familiar with, airtels and letters and conversations, tele-
113
phone calls, meetings of various kinds, field inspections, special
visits on particular visits, conversations with Justice Department
officials here in Washington and with U.S. attorneys in the field.
Ms. COOPER. Is that the same sort of process you expect to use
with the formal guidelines?
Mr. MICHEL. I don't understand the question.
Ms. COOPER. How are you going to educate the people in the field
about the guidelines and make sure that they do understand them?
Mr. MICHEL The FBI is transmitting the text of the guidelines to
all field offices and units and engages in training of personnel in
those offices and units whenever there is some new policy or a
clarification of an existing policy or practice. And SO that's the
procedure that will be followed here.
The full text will be disseminated and it will be the subject of
training and seminar-type discussions. And it will. in due course,
become the subject of inspections, visits of field offices to be sure
that they re following them.
Ms. COOPER. Has the FBI's Inspection Division ever considered
undercover work other than from the perspective of whether or not
the agents are complying with regulations or understand the regu-
lations and guidelines?
Mr. MICHEL. I don't know.
Ms. COOPER. Is there any reason why they shouldn't?
Mr. MICHEL. I don't know the answer to that question or the
question whether there is any reason why they should. I guess the
considerations are how are all the other techniques they use work-
ing? How well they work. And I'm not an expert on that subject
and I don't have any well-informed views. So I don't think I ought
to just speculate or guess.
Ms. COOPER. Finally, Professor Marx speculated yesterday that at
least in some circumstances, undercover tactics may, actually, am-
plify the level of crime in an area, both by generating a market for
stolen goods, by generating capital which could be used in other
sorts of crimes, by generating motives, by creating scarce skills and
resources. and SO forth and so on.
How does the Justice Department know whether or not this is
happening or do you care?
Mr. MICHEL. Of course we care. And we know how it's happening
because, for example, if there is a given city that has very Ettle
burglary and no fencing operations. there is no point in us setting
up our own undercover fencing operation in that city. The kind of
place that's likely is one where we have clear information that
there are already 10 of them out there.
We're not creating a market. The market's already there and the
business is flowing. We're stepping in to cut it off.
Now, it may be that for a very short period after we step in and
before we lower the boom and put everybody in jail, that it's
possible that the number of fenced items would go up for that short
period. But our experience, I believe. has been that in the longer
run, there is a big drop in the traffic because a lot of the operators
are put out of business, put in jail.
Ms. COOPER. Do you base that last conclusion on evidence that
the Justice Department has put together?
114
Mr. MICHEL. We base it on information that we have access to
through local police and sometimes through our own files. We
don't, as I tried to indicate in answer to Mr. Boyd's question
earlier, conduct a lot of very comprehensive or detailed studies,
because we're net equipped to do that.
Mr. EDWARDS. Thank you very much. Mr. Michel. for very useful
testimony. We appreciate your coming up here today.
Mr. MICHEL. Thank you.
[Whereupon. at 11:45 a.m., the hearing was adjourned.)
APPENDIXES
APPENDIX 1
ATTORNEY GENERALS GUIDELINES ON FBI UNDERCOVER OPERATIONS
The following guidelines on use of undercover operations by the Federal Bureau
of Investigation are issued under authority of the Attorney General as provided in
28 U.S.C. Aler Sto, and SSN They are consistent with the requirements of the
proposed FBI Charter Act. but do not denend upon plassage of the AJ1 NOT their
effectiveness
Introduction
Definitions
General authority
Authorization of undervoter operations
A. Undercover operations that may ned be approved by the special agent in
charge because of fiscal eircumstances
B. Undercover operations that may not be approved by the special agent in
charge because of sensitive circumstances
C. Undercover operations that may be approved by the special intent in charge.
D. Approval by Headquarters Undercover Operations Review Committee, and
Director or Designated Assistant Directors. with concurrence of United States atter-
nev or Strike Force Chief. where sensitive or fiscal circunistances NEW present
E Applications to Headquarters
F. Undercover Operations Review Committee.
G. Approval by Director or Designated Assistant Director
II. Duration of authorizations.
I. Authorization of participation in "otherwise illegal- activity.
J. Authorization of the creation of opportunities for activity
K. Authorization of investigative interviews that are not part of 30 undercover
operation:
Monitoring and control of undercover operations
L Continuing consultation with United States attorney or Strike Force Chief
M. Serious legal. ethical: prosecutive. or departmental policy questions. and previ-
ously unforeseen sensitive circumstances
N. Emergency authorization.
O. Annual report of Undercover Operations Review Committee
P. Preparation of undercover employees
Q. Review of undercover employee conduct.
R. Deposit of proceeds, liquidation of proprietaries.
Reservation
INTRODUUTION
The FBEs use of undercover employees and operation of proprietary business
entities is a lawful and essential technique in the detection and investigation of
white collar crime, political corruption. organized crime. and other priority areas.
However, use of this technique inherently involves an element of deception. and
occasionally may require a degree of cooperation with persons whose motivation and
conduct are open to question. and 50 should be carefully considered and monitored.
DEFINITIONS
An "undercover employee." under these guidelines. is any employee of the FBI-
or employee of a federal. state or local law enforcement agency working under the
direction and control of the FBI in a particular investigation-whose relationship
with the FBI is concealed from third parties in the course of an investigative
operation by the maintenance of a cover or alias identity.
(113)
116
An "undercover operation" is any investigative operation in which an undercover
employee is used.
A "proprietary" is a sole proprietorship. partnership. corporation. or other busi-
ness entity owned or controlled by the FBI. used by the FEI in connection with an
undercover operation. and whose relationship with the FBI is not generally ac-
knowledged
GENERAL AUTHORITY
the The FBI may conduct undercover operations. pursuant to these guidelines. that
are appropriate to carry out its investigative responsibilities in domestic law en-
forcement.
Under this authority the FBI may participate in juint undercover operations with
other federal. state, and local law enforcement azencies; may seek operational
assistance for an undercover operation from any suitable informant. confidential
source, or other cooperating private individual: and may operate a proprietary on a
commercial basis to the extent necessary to maintain an operation cover or effec-
tiveness.
(2) Undercover operations can DP authorized only at the "full invistigation" stage
in Domestic Security Investigations.
AUTHORIZATION OF UNDERCOVER OPERATIONS
All undercover operations under these guidelines tall into one of two categories
de those undercover operations that can be approved by the Special Agent in
Charge (SAC) under his own authority, and 2 their undercover operations that can
only be authorized by the Director or designated Assistant Director. upon favorable
recommendations by the SAC, Bureau headquarters (FBHIQ) and the Undercover
Operations Review Committee Undercover operations in the Litter category are
those that involve a substantial expenditure of government tunds, or otherwise
implicate fiscal policies and considerations. Paragraph At Also included in this
latter category are undersover operations that involve what are termed "sensitive
circumstances In general, these are undercover operations involving investigation
of public corruption, or undercoser operations that involve risks of various forms of
harm and intrusion. (Paragraph BE Of course: Hh planning an underciiver operation.
these risks of harm and intrusion will be avoided whenever possible. consistent with
the need to obtain necessary evidence in a timely and effective manner.
A. Undercover operations that may not be approved his the special agent in charge
because of fiscal circumstances
to Subject to the emergency authorization procedures set forth in paragraph N.
the SAC may not authorize the establishment. extension or renewated an undercov-
er operation if there is a reasonable expectation that
a The undercover operation could result in significant civil claims against
the United States, either arising in tort, contract or claims for just compensa-
tion for the "taking" of property.
(b) The undercover operation will require leasing OF contracting for property,
supplies, services, equipment. or facilities for any period extending beyond the
September 30 termination date of the then current fiscal year, or with prepay-
ment of more than one month's rent; or will require leasing any facilities in the
District of Columbia;
(e) The undercover operation will require the use of appropriated funds to
establish or acquire a proprietary. or to operate such a proprietary on a com-
mercial basis:
(d) The undercover operation will require the deposit of unpropriated funds.
or of proceeds generated by the undercover operation. in banks or other finan-
cial institutions:
(e) The undercover operation will involve use of proceeds generated by the
undercover operation to offset necessary and reasonable expenses of the oper-
ation:
in The undercover operation will require indemnification agreements for
losses incurred in aid of the operation, or will require expenditures in excess of
$1500 for property, supplies. services, equipment or facilities. or for the con-
struction or alteration of facilities:
(g) The undercover operation will last longer than 6 months or will involve an
expenditure in excess of $20,000 or such other amount that is Set from time to
time by the Director. with the approval of the Attorney General. However, this
expenditure limitation shall not apply where a significant and unanticipated
investigative opportunity would be lost by compliance with the procedures set
forth in paragraphs D, E. F. and G.
117
B. Undercover operations that may not be approved by the special agent in charge
because of sensitive circumstances
Subject to the emergency authorization procedures set forth in paragraph N. the
SAC may not authorize the establishment. extension or renewal of an undercover
operation that involves sensitive circumstances. For purposes of these guidelines. an
undercover operation involves sensitive circumstances if there is a reasonable expec-
tation that:
tax The undercover operation will concern an investigation of possible corrupt
action by a public official or political candidate, the activities of a foreign
government, the activities of a relizious or political organization, or the activi-
ties of the news media:
in The undercover operation will involve untrue representations by an under-
cover employee or cooperating private md evidual concerning the activities or
involvement of an innocent person:
+0) An undercover employee or cooperating private individual will engage in
any activity that is proscribed by federal. state, or Incal law as a felony or that
is otherwise a serious crime-except this shall not include criminal liability for
the purchase of stolen or contraband goods or for the making of false represen-
nations to third parties in concealment of personal identity or the true owner-
ship of a proprietary:
d) An undercover employee or cooperating private individual will seek to
supply an Item or service that would be reasonably unavailable to criminal
actors but for the participation of the government;
An undercover employee or cooperating private individual will run a
significant risk of being arrested and Seeking to continue undercover:
0 An undercover employee or cooperating private individual will be required
tolgive sworn testimony in any proceeding in an undercover capaents:
An undercover employee or cooperating private individual will attend a
meeting between a subject of the investigation and his Power:
the An undercover employee or cooperating private individual will pase as an
attorney, physician, clergyman, 00 member of the news media. and there is a
significant risk that another individual will be led into a professional or conti-
dential relationship with the undercover employee or cooperating private indi-
vidual as a result of the pose:
in A request for information will be made by an undercover employee or
cooperating individual to an attorney, sicum. clergyman, or other person
who is under the obligation of a legal privilege of confidentiality. and the
particular information would ordinarily be privileged:
13* A request for information will be made by an undercover employee or
cooperating private individual to a member of the news media concerning any
individual with whom the newsman is known to have a professional or conti-
dential relationship;
to The undercover operation will be used to infiltrate a group under investi-
gation as part of a Domestic Security Investigation, or to recruit a person from
within such a group as an informant:
(I) There may be a significant risk of violence or physical injury to individuals
or a significan. risk of financial loss to an innocent individual.
C. Undercover operations that may be approved by the special agent in charge
en The SAC may authorize the establishment. extension or renewal of all other
undercover operations, to be supervised by his field office, upon his written determi-
nation, stating supporting facts and circumstances. that:
at Initiation of investigative activity regarding the alleged criminal conduct
or criminal enterprise is warranted under the Attorney General's Guidelines on
the Investigation of General Crimes, the Attorney General's Guidelines on
Domestic Security Investigations. the Attorney General's Guidelines on Investi-
gation of Criminal Enterprises Engaged in Racketeering Activity, and any other
applicable guidelines:
b) The proposed undercover operation appears to be an effective means of
obtaining evidence or necessary information: this should include a statement of
what prior investigation has been conducted. and what chance the operation
has of obtaining evidence or necessary information concerning the alleged
criminal conduct or criminal enterprise:
101 The undercover operation will be conducted with minimal intrusion con-
sistent with the need to cellect the evidence or information in a timely and
effective manner;
118
(d) Approval for the use of any informant or confidential source has been
obtained as required by the Attorney General's Guidelines on Use of Informants
and Confidential Sources:
(e) There is no present expectation of the occurrence of any of the circum-
stances listed in paragraphs A and B:
if) Any foresceable participation by an undercover employer or cooperating
private individual in illegal activity that can be approved by a SAC on his own
authority (that is, the purchase of stolen or contraband goods. or participation
in a nonserious misdemeanor). is justified by the factors noted in paragraph DD:
D. Approval by Headquarters Undercover Operations Review Committee, and Direct
for or Designated Assistant Directors with concurrence of U.S. attorney OF Strike
Force Chief, where sensitive or fiscal circunistances are present
The Director of the FBI or a designated A sistant Director must approve the
establishment. extension. or renewal of an undercover operation if there is a reason-
able expectation that any of the circumstances listed in paragraphs A and B may
occur.
In such cases. the SAC shall first make application to FBI Headquarters FBIHQ
See paragraph E below. FBHQ may either disapprove the application or recome
mend that it be approved. A recommendation for approval may De forwarded
directly to the Director or designated Assistant Director if the application was
submitted to FEIHQ solely because of a fiscal circumstance listed in paragraph
Arbi-ren In all other cases in which FBIHQ recommends approval. the application
shall be forwarded to the Undercover Operations Review Committee for considera-
tion. See paragraph E. If approved by the Undercover Operations Review Commit-
tee: the application shall be forwarded to the Director 06 designated Assistant
Director. See paragraph G. The Director of designated Assistant Director may
approve or disapprove the application.
E Applications to Headquarters
(1) Each application to Headquarters from a SAC recommending approval of the
establishment. extension. or renewal of an undercover operation involving circum-
stances listed in paragraphs A and B shall be made in writing and shall include.
with supporting facts and circumstances:
(a) A description of the proposed undercover operation. including the particu-
lar cover to be employed and any informants or other cooperating persons who
will assist in the operation: a description of the particular offense or criminal
enterprise under investigation. and any individuals known to be involved: and a
statement of the period of time for which the undercover operations would be
maintained:
the A description of how the determinations required by paragraph Creat-(d)
have been met;
(e) A statement of which circumstances specified in paragraphs A and B are
reasonably expected to occur. what the operative facts are likely to be. and why
the undercover operation merits approval in light of the circumstances, includ-
mg.
III for any foresecable participation by an undercover employee or cooperating
private individual in activity that is proscribed by federal. state, or local law as
a felony or that is otherwise a serious crime-but not including the purchase of
stolen or contraband goods or making of false representations to third parties in
concealment of personal identity or the true ownership of a proprietary-a
statement why the participation is justified by the factors noted in paragraph
D. and a statement of the federal prosecutor approval pursuant to paragraph
120
(ii) for any planned infiltration by an undercover employee or cooperative
private individual of it group under investigation as part of a Domestic Security
Investigation, or recruitment of a person from within such a group as an
informant, a statement why the infiltration or recruitment is necessary and
meets the requirements of the Attorney General's Guidelines on Domestic Secu-
rity Investigations: and a description of procedures to minimize any acquisition,
retention. and dissemination of information that does not relate to the matter
under investigation or to any other authorized investigative activity.
(r) A statement of proposed expenses;
tel A statement that the United States Attorney or Strike Force Chief is
knowledgable about the proposed operation. including the sensitive circum-
stances reasonably expected to occur: concurs with the proposal and its objec-
tives and legality: and agrees to prosecute any meritorious case that is devel-
oped.
119
(2) In the highly unusual event that there are compelling reasons that either the
United States Attorney or Strike Force Chief should not be advised of the proposed
Undercover Operation, the Assistant Attorney General in charge of the Criminial
Division, or other Department of Justice attorney designated by him. may substitute
for such person(s) for purposes of any authorization or other function required by
these guidelines. Where the SAC determines that such substitution is necessary. the
application to FBIHQ shall include a statement of the compelling reasons. together
with supporting facts and circumstances, which are -believed to justify that determi-
nation. Such applications may only be authorized pursuant to the procedures pre-
scribed in paragraph F. below. whether or not consideration by the Undercover
Operations Review Committee is otherwise required. and upon the approval of the
Assistant Attorney General in charge of the Criminal Division:
(2) An application for the extension or renewal of authority to engage in an
Undercover Operation should also cribe the results 50 far obtained from the
operation or a reasonable explanatio, 4 any failure to obtain significant results.
and a statement that the United States Attorney or Strike Force Chief tavors the
extension or renewal of authority.
F. Undercover Operations Review Committee
to There shall be an Undercover Operations Review Committee. consisting of
appropriate employees of the FBI designated by the Director, and attorneys of the
Department of Justice designated by the Assistant Attorney General IN charge of
the Criminal Division. to be chaired by a designee of the Director.
(2) Upon receipt from FBIHQ of a SAC's application for approval of an undercover
operation. the Committee will review the application. The Justice Department mem-
bers of the Committee may consult with senior Department officials and the United
States Attorney or Strike Force Chief. as they deem appropriate. If the Committee
concurs in the determinations contained in the application. and finds that in other
respects the undercover operation should go forward. see paragraph Fixe and (1)
below, the Committee IS authorized to recommend to the Director or designated
Assistant Director, see paragraph G. that approval be granted.
(3) In reviewing the application. the Committee shall carefully assuss the comtem-
plated benefits of the undercover operation, together with the operating and other
costs of the proposed operation. In assessing the costs of the Undercover Operation,
the Committee shall consider. where relevant, the following factors, among others:
tal the risk of harm to private individuals or undercover employees:
the the risk of financial loss to private individuals and businesses. and the risk
of damage liability or other loss to the government;
'g' the risk of harm to reputation:
(di the risk of harm to privileged or confidential relationships;
te the risk of invasion of privacy:
in the degree to which the actions of undercover employees or cooperating
private individuals may approach the conduct proscribed in paragraph .] below:
and
tg) the suitability of undercover employees' or cooperating private individuals'
participating in activity of the sort contemplated during the Undercover Oper-
ation.
(4) If the proposed undercover operation involves any of the sensitive circum-
stances listed in paragraph B. the Committee shall also examine the application to
determine whether the undercover operation is planned so as to minimize the
incidence of such sensitive circumstances. and to minimize the risks of harm and
intrusion that are created by such circumstances. If the Committee recommends
approval of an undercover operation involving sensitive circumstances. the recom-
mendation shall include a brief written statement explaining why the undercover
operation merits approval in light of the anticipated occurrence of such sensitive
circumstances.
(5) The Committee shall recommend approval of an undercover operation only
upon reaching a consensus. provided that:
tal If one or more of the disignees of the Assistant Attorney General in charge
of the Criminal Division does not join in a recommendation for approval of a
proposed undercover operation because of legal. ethical, prosecutive or Depart-
mental policy considerations. the designee shall promptly advise the Assistant
Attorney General and there shall be no approval of the establishment, exten-
sion. or renewal of the undercover operation until the Assistant Attorney
General has had the opportunity to consult with the Director;
(b) If. upon consultation. the Assistant Attorney General disagrees with a
decision by the Director to approve the proposed undercover operation, there
shall be no establishment, extension, or renewal of the undercover operat on
120
until the Assistant Attorney General has had an opportunity to refer the
matter to the Deputy Attorney General or Attorney General.
(6) The Committee should consult the Legal Counsel Division of the FBI. and the
Office of Legal Counsel or other appropriate division or office in the Department of
Justice about any significant unsettled legal questions concerning authority for or
the conduct of a proposed undercover operation.
G. Approv al by Director or esignated Assistant Director
The Director or a designated Assistant Director shall have authority to approve
operations recommended for approval by the Undercover Operations Review Com-
mittee. provided that only the director may authorize a proposed operation if a
reasonable expectation exists that:
to There may be a significant risk of violence or provered injury to individ-
unls:
the The undereover operation will be used to infiltrate 1 group under investi-
gation as part of a Domestic Security Investigation, PM 10 recript a person from
within such a group as an informant or confidential source. in which case the
Director's authorization shail include a statement of procedures to minimize
any acquisition, retention. and dissemination of information that does not relate
to the matter under investigation or to any other authorized investigative
activity: or
(e) A circumstance specified in parairaph America to reasonably expected to
occur, in which case the underrover operation may be implemented only after
the Deputy Attorney General or Attorney General nus specifically approved
that aspect of the operation 111 accordance with applicable law.
H. Duration of authorizations
+1) An undercover opration may not continue longer that is necessary to achieve
the objective of the authorization. nor in any event than 6 months without
new authorization to proceed
(2) Any undercover operation initially approved by a SAC must be reauthorized by
an Assistant Director or the Director, pursuant to paragraphs D-G. if it lasts longer
than C months or involves expenditures in excess of the amount prescribed in
paragraph Age:
I Authorization of participation in "otherwise illegal" activity
Nothwithstanding any other provision of these guidelines. an undercover employ-
ee or cooperating private individual all not engage. except in accordance with this
paragraph, in any activity that would constitute a erime under state or federal law
if engaged in by a private person acting without the approval or authorization of an
appropriate government official. For purposes of this paragraph. such activity is
referred to as "otherwise illegal" activity.
(1) No official shall recommend or approve an undercover employee's or cooperat-
ing private individual's planned or reasonably foresceable participation in otherwise
illegal activity unless the participation is justified in order
lat to obtain information or evidence necessary for paramount prosecutive
purposes: the to establish and maintain credititity of cover with persons associated with
the criminal activity under investigation: or
(C) to prevent or avoid the danger of death or serious badely injury
(2) Participation in any activity that is proscribed by it derive stat or local Law as
a felonv or that is otherwise a serious crime-but not- the purchase of
stolen or contraband goods OF the making of false representations in third parties in
concealment of personal identity or the true ownership of 1 proprietary- be
approved in advance by an Assistant Director on the recommentation of the Under-
cover Operations Review Committee pursuant to paragraphs DEG. except that the
Director's approval is required for participation in any otherwise illegal activity
involving a significant risk of violence or physical injury to individuals. Approvals
shall be recorded in writing
A recommendation to FBIHQ for approval of participation in such otherwise
illegal activity must include the yiews of the United States Attorney. Strike Force
Chief. er Assistant Attorney General on why the participation is warranted
(3) Participation in the purchase of stolen or contraband goods. or in a nonserious
misdemeanor. must be approved in advance by the Special Agent in Charge
Approvals by the SAC shall be recorded in writing.
(1) The FBI shall take reasonable steps to immimize the participation of an
undercover employee or cooperating private individual in any otherwise illegal
activity.
121
(5) An undercover employee or cooperating private individual shall not participate
in any act of violence. initiate or instigate any plan to commit criminal acts. or use
unlawful investigative techniques to obtain information or evidence for the FBI
(e.g., illegal wiretapping. tilegal mail openings, breaking and entering. or trespass
amounting to an illegal searcht
(6) If it becomes necessary to participate in other vise lifegal activity that was not
foreseen or anticipated. an undercover employee should make every effort to consult
with the SAC For otherwise Heigal activity that is a Play or a serious misdeme in-
or, the SAC can provide emergency authorization under paragraph N. It consulta-
tion with the SAC is impossible and there is an immedi ae and grave threat to life
or physical safety rincluding destruction of property through arson or hombing. an
undercover employee may participate in the otherwise Heral activity so long as he
does not take part in and makes every effort to prevent juy act of violence. A report
to the SAC shall be made at soon as possible after the participation. and the SAC
shall submit a full report to FBIHQ FBIHQ shall promptly inform the members of
the Undercover Operations Review Committee.
(7) Nothing in these unidelines prohibits establishing. randing, and me
secure cover for an undercover operation DV making tales representations to third
parties in concealment of personal identity or the use excership of 3 proprietary
reg., false statements in obtaining driver incenses, vehicle registrations, exempancy
permits, and business Incenses) when such action is approved in advance by the
apropriate SAC
(K) Nothing in puragraph PS or in products an undersive employee from taking
reasonable measures of self defense in an mergeney to titulact his own life or Nr.
life of others against force Sed transures Should He reported to the SAC
and the United States Strike Form Chief, or Attornies General
as soon as possible.
(9) If a serious incident of violence should secur in the course of a criminal
3. tivity and an undercover employee or Comperat PC private individual has partier
pated in any fashion in the criminal activity: the SAC Shall immediately inform
FBIHQ heade aners shall promptly inform the Assistant Attorney Gettera NE
charge of the Criminal Drvision.
J. Authorization of the creation of opportions es it that No trusty
(1) Entrapment should be scrupulously winded Entrapment IS the inducement or
encouragement of an individual to 4.7 illegal activity in which be would
otherwise not be disposed to engage
(2) In addition to complying with any Seal requirements before approving an
undercover operation involving an invitation to engage in diegal activity. the apr
proving authority should be satisfied that
tall The corrupt nature-of the activity is reasonably clear to potential subjects;
the There is a reasonable indication that the undercover operation will reveal
illegal activities; and
(c) The nature of any inducement is not unjustifiable in view of the character
of the illegal transaction in which the individual is invited to engage
(3) Under the law of entrapment. inducements may be aftered to an individual
even though there is no reasonable indication that that particular individual has:
engaged. or is engaging, in the dilegal activity that is properly under investigation.
Nonetheless, no such undercover operation shall be approved without the specific
written authorization of the Director. unless the Undercover Operations Review
Committee determines See paragraph F. insofar as practicable. that either
tall there is a reasonable indication. based on information developed through
informants or other means. that the subject is engaging. has engaged. or IS
likely to englige in illegal activity of a similar type: or
rbi The et prunty for diegal activity has been structured so that there IS
reason for believing that persons drawn to he opportunity. or brought to it, are
predisposed to engage in the contemplated illegal activity
(4) In any undercover operation. the decision to offer an inducement to an individ-
ual. or to otherwise invite an individual to engage in illegal activity, shall be based
solely on law enforcement considerations.
K. Authorization operation of investigative inter PICS that are not part of an undercover
Notwithstanding any other provision of these guidelines. routine investigative
interviews that are not part of an undercover operation may be conducted without
the authorization of FBIHQ. and without compliance with paragraphs C. D. and E.
These include so-called "pretext" interviews, in which an FBI employee uses an
alias or cover identity to conceal his relationship with the FBI
122
However, this author ty does not apply to an investigative interview that involves
a sensitive eircumstance listed in paragraph B. Any investigative interview involv-
ing a sensitive circumstance-even an interview that is not conducted as part or an
undercover operation- only be approved pursuant to the procedures set forth
in paragraphs D.E. E. and G. or pursuant to the emergency authority prescribed in
paragraph N. if applicable
MONITORING AND CONTROL OF UNDERCOVER OPERATIONS
L Continuent consultution with United States Attorney or states nine chief
Throughout the course est 45% undercover operate it that has been approved by
Headquarters the SAC shak consuit periodically with the United States Attorney:
Strike Force Chief, or Assistant Natorney General concerning the plans and tacties
and anticipated premems of the operation
M. Sertions legal, ethical secure. or as paremental poties and processes
A inforescyn sensitive curcumstances
to In any undersiver operatoon. the SAC shall consult with Headucarters when-
ever a serious legal. ethicat DI secutive. or Departmental pulicy question is present
ed by the operation FBHQ shall intorm the Department 01 Justice
members of the Underen or Operations Review Committee or 20% such question and
its proposed resolution.
12, This procedure shall allways be Reflewed H an operation is healy to
involve one of the circumstances listed and petrographs A and B and either a The
SACS involuation to FBH.Q 200 not contentivate the overrence of that circum-
stance. or by the undercaver operation approved by the SAC under bis own
authority. In such cases the SAC shall also Submit a written application for contin-
and authorization of the operation or (11) amendment of the existing application to
Headquarters pursuant to paragraph E
Whenever such a new authorization or attended authorization is required. the
FBI shall consult with the United States Attorney Strike Forde/Chief, or Assistant
Attorney General. and with the Department of Justice members of the Undercover
Operations Review Committee en whether 10 modify. suspend, or terminate the
undercover operation pending full processing of the application or amendment.
N Emergency authorization
Notwithstanding any other provision of these guidelines. any SAC who reasonably
determines that:
Fai an emergency situation exists requiring the establishment. extension, re-
newal, or modification of an undercover operation before an authorization
mandated by these guidelines can with due difigence be obtained. in order to
protect life or substantial property, to apprehend or identity a fleeing offender.
to prevent the hiding or destruction of essential evidence. or to avoid other
grave harm: and
the there are grounds upon which authorization could be obtained under these
guidelines. may approve the establishment, extension, renewal, or modification
of an undercover operation if a written application for approval is submitted to
Headquarters within is hours after renewed: or modified. In such an emergency
situation the SAC shall attempt to consult by telephone with the United States
Attorney, Strike Force Chref: or Assistant Attorney General, and with a desig-
nated Assistant Director. FBIHQ shall promptly inform the Department. of
Justice members of the Undercover Operations Review Committee of the emer
gener authorization. In the event the subsequent written application for approvs
al is denied. a full report of all activity undertaken during the course of the
131 cration shall be submitted to the Director, who shall inform the Deputy
Attorney General.
() Annual report of Undervoter Operations Review Committee
to The Undercover Operations Review Committee shall retain a file of all applica-
tions for approval or undercover operations submitted to it. together with a written
record of the Committee action on the applications and any ultimate disposition by
the Director or a designated Assistant Director. The FBI shall also prepare a short
summary of each undercover operator approved by the Committee These records
and summaries shall be available for inspection by a designee of the Deputy Attor-
ney General or of the Assistant Attorney General in charge of the Criminal Divi-
sion.
(2) On an annual basis, the Committee shall submit to the Director, the Attorney
General. the Deputy Attorney General. and the Assistant Attorney General in
charge of the Criminal Division. a written report summarizing Tal the types of
123
undercover operations approved: and the the major issues addressed by the Commit-
tee in reviewing applications and how they were resolved.
P. Preparation of undercover employees
Th The SAC or a designated supervisory agent shall review with each undercover
employee prior to the employee participation in an investization the conduct that
the undercover employee is expected to undertake and other conduct whose necess-
ty during the investigation is toreseeable The SAC or designated supervisory agent
shall expressly discuss with each undercover employee any of the circumstances
specified in paragraphs A and R which is rensonably expected to occur.
Each undercover employee shall be instructed generally, and in relation to the
proposed undercover operation: that he shall not perticipate in any act of vieience,
initiate or instigate any plan in commit criminal acts: use unlawful investigative
techniques to ebtain information or evidence: or engage in any conduct that would
violate restrictions on investigative techniques or FBI conduct contained in Attor-
ney General Guidelines or other Department potter; and that except in an emergen-
by situation. he shall not participate in any weal activity for which authorization
has not been obtained under these guidelines When the FBI learns that persons
under investigation intend to contrat a Vielent crime. any undereover employer
used in connection with the investigation schools De instructed 51 the to discourance the
violence.
02) To the extent feasible. a similar review be conducted by a Special Agent
with each cooperating private individual
& Review of undercover employee conduct
di From time to time during the course of the investigation. as IS practicable. the
SAC or designated supervisory agent shall review that actual conduct of the under-
cover employee, as well as the employee's proposed or regisonably foreseeable con-
duct for the remainder of the investigation, and shall make N determination which
er the conduct of the employee has been permissible This determination shall be
communicated to the undercover employee as AND as practicable. Any findings of
impermissible conduct shall be promptly reported to the Director. and consultation
with the Director shall be undertaken before the employee continues his participa-
tion in the investigation. To the extent feasible, a similar review shall be made of
the conduct of each cooperating private individual:
(2) A written report on the use of false representations to third parties in conceal-
ment of personal identity or the true ownership of a proprietary. for establishing.
funding, and maintaining secure cover for an undercover operation. shall be submit-
ted to the SAC or designated supervisory agent at the conclusion of the undercover
operation. A written report on participation in any other activity proscribed by
federal. state or local law shall be made by an undereover employee to the SAC or
designated supervisory agent every 60 days and at the conclusion of the participa-
tion in the illegal activity.
R. Deposit of proceeds; liquidation of proprietaries
As soon as the proceeds from an undercover operation are no longer necessary for
the conduct of the operation. the remaining proceeds shall be deposited in the
Treasury of the United States as miscellaneous receipts.
Whenever a proprietary with a net value over $50,000 is to be liquidated. sold. or
otherwise disposed of. the FBL as much in advance as the Director or his designee
shall determine is practicable. shall report the circumstances to the Attorney Gen-
eral and the Comptroller General The proceeds of the liquidation. sale, or other
disposition. after obligations are met. shall be deposited in the Treasury of the
United States as receipts.
RESERVATION
These guidelines on the use of undercover operations are set forth solely for the
purpose or internal Department of Justice eurdance They are not intended to, do
not. and may not be relied upon to, create any rights, substantive or procedural.
enforceable at law by any party in any matter. civil or criminal. nor do they place
any limitations on otherwise bawful investigative or litigative prerogatives of the
Department of Justice.
BENJAMIN R. CIVILETTL
Attorney General.
124
APPENDIX 2
FBI OVERSIGHT
TUESDAY. MARCH 4. 1980
House OF REPRESENTATIVES.
SUBCOMMITTEE ON CIVIL AND CONSTITUTIONAL
RIGHTS or THE COMMITTEE 0X THE JUDICIARY,
Washington, D.C.
The subcommittee met at 10 a.m., in room 2141, of the Rayburn
House Office Building, Hon. Don Edwards chairman of the sub-
committee) presiding.
Present: Representatives Edwards, Kastenmeier. Seiberling, Drinan,
Volkmer, Hyde, and Sensenbrenner.
Also present: Representative Rodino.
Staff present: Thomas P. Breen, counsel: Catherine LeRoy and
Janice Cooper, assistant counsel; and Thomas Boyd, associate
counsel.
Mr. EDWARDS. The subcommittee will come to order.
The gentleman from Wisconsin
Mr. KASTENMEIER. Mr. Chairman. I will ask unanimous consent
that these proceedings may be open 10 television and other camera
and video.
Mr. EDWARDS. Without objection, it is so ordered.
The hearing today has to do with the undercover operations of the
Federal Bureau of Investigation. The subcommittee is presently
considering the budget of the FBI for 1981. and the budget for 1981
has an increase in undercover expenditures from $3 million up to
$4.8 million.
We have two witnesses today, and I suggest that the judge, the
Director of the FBI, will go first, and then Mr. Heymann, and then we
will have questions after that. if that is agreeable with the witnesses.
At this time I vield to the very distinguished chairman of the House
Judiciary Committee, the gentleman from New Jersey, Mr. Rodino.
Chairman RODINO. Thank you very much. Mr. Chairman.
I am pleased to welcome the Director of the Federal Bureau of
Investigation, Mr. Webster, and the Assistant Attorney General in
charge of the Criminal Division. Mr. Heymann, this morning.
1 consider this a very important responsibility of the Judiciary
Committee, and especially of this subcommittee that is so ably chaired
by Mr. Edwards, the Subcommittee on Civil and Constitutional
Rights, and I believe that that subcommittee was appropriately
named because it has been a bulwark of strength in attempting to
assure that the agencies of Government entrusted with law enforce-
ment recognize that they have a very principal responsibility; that
is, not to overly intrude into the rights that are guaranteed in the
Constitution, the civil liberties that we all hold and cherish SO dearly.
125
This particular hearing, I believe, which is a hearing that was
scheduled some time ago by the chairman of the subcommittee,
is one that is, I think. very significant because it comes on the heels
of investigations that were conducted by the Department of Justice
and the FBI where many, many questions have been raised.
This committee. first of all, prides itself on-and I am talking
about the full Judiciary Committee-prides itself on acting responsibly
in all cases, and I think that the committee, MS a matter of fact,
showed that it cannot only Act responsibly. but is certainly very,
very anxious that the whole world know. This committee had before
it, 2 weeks ago, a resolution of inquiry, which the committee felt
was not responsible, which the committee reported adversely. and
the Congress, acting pursuant to the recommendation of that com-
mittee, did act also responsibly. I think the whole tenor of the argu-
ment was that while we want to assure that the Justice Department
is guaranteed all the tools necessary. and the funding, to go forward,
to ferret out criminal conduct in order to protect our society: at the
same time I think that we have the principal responsibility of assur-
ing, however, that the Department does not abuse that authority.
So I am especially interested. Mr. Director and Mr. Heymann,
in what you have to say, I say thei because on July 31, HS the sponsor
of the FBI Charter, I made the following statement prior to my
introducing that proposal.
I stated at that time that I was very pleased with what you are
attempting to do, and 1 direct this to you. Mr. Webster. because
the FBI had come under some criticism-and I think justly SO
for its past actions over the many years, and I stated then, and I'd
like to merely repeat that statement:
It would appear 16 the that the goal- of the American people are as follows:
that the focus of all FBI investigations is criminal conduct, and not activities
otherwise protected by the Constitution.
I went on to say that I did have concerns and reservations generally
about the absence of specific guidelines dealing with matters such
as the identity of informants. the use of various techniques in in-
vestigations, the retention and use of information, and the Bureau's
criminal records, and other areas wl .ch touch on sensitive questions
of civil liberties.
Then I also added:
Therefore, I am particularly pleased that the charter eails for the promulgation
of guidelines which will ANT forth with particularity the work rules in these and
other important areas.
I am confident that the Attorney General's guidelines, work
on which 1 have been made to understand has already begun, will
protect the full enjoyment of all constitutional rights, the freedom
against unreasonable intrusions, by whatever technology. while at
the same time providing safe. sound. and effective law enforcement.
I must say, Mr. Director, that while I made that statement in full
confidence that the work rules were going to be such that they would
deal with specificity, 1 would like to know at this time, and during the
course of the questioning, after listening to your statement, whether
or not you have, because I do have some grave reservations in my
mind as to whether or not if you do not have specific guidelines,
you can operate and do the job that is necessary in the area of law
83-566 81 - 3
126
enforcement, at the same time guaranteeing the constitutional rights
of individuals without intruding on their liberties.
Thank you very much, Mr. Chairman.
[The complete statement follows:]
STATEMENT OF CHAIRMAN PETER W. RODINO, JR.
I am pleased to have the opportunity to participate in this important aspect
of the work of the Committee en the Judiciary,
There has been some concern expressed to the effect that the Congress, and
this Committee, should do nothing until the current investigative effort of the
Department of Justice is complete. This view, if it prevailed, would mean an
abilication of this Committee's constitutional obligations to authorize funds for
and exercise legitimate oversight over the Department of Justice,
This Committee will not interfere with the process of pending cases, nor will
it tamper with or prematurely attempt to examine any evidence in such cases.
We have in the past and will continue to book at the process programs of the
Department of Justice and the Federal Bureau of Investigation. If we are to
provide appropriate funding, We must understand the DTORTANTS of the Department.
Undercover operations are difficult, often dangerous and, by their nature
difficult to control, Since these operations often involve activities by persons
not directly employed by the government we must assure oursives, to the ex-
tent possible, that all logical steps are being taken to control their activities.
The danger of improperly involving or implicating innocent citizens in these
sensitive investigations is a result which we have a duty to prevent if at all possible.
This Subcommittee has been teeply involved in hearings en the FBI Charter.
In July, when the Charter was initially introduced, I stated that certain concepts
which are embodied in the Charter would make the work of the FBI more nearly
conform to the desires of the American people, Two of the concepts which I dis-
cussed were (1) that investigative techniques Dr. examined with the requirement
for minimal levels of intrusiveness into protected activities and (2) that periodic
review of investigative activities be addressed.
These two concepts, I believe, go hand in hand, for without ongoing review and
guidance of investigative activities, there is the risk of intrusivensss and violation
of protected activities.
When 1 introduced H.R. 5030 the proposal for the FBI Charter), I particularly
emphasized that the focus of all FBI investigations should be criminal conduct and
that the proposed Charter provides a method for systematic accountability by the
Bureau. Our purpose today is to examine these precepts in detail to see if under-
cover activities conducted by informants adhere to the Charter's standards and to
such guidelines as the Attorney General has established for protecting the con-
stitutional rights of persons being investigated with respect to electronic surveil-
lance and all other aspects of undercover activities.
I am particularly concerned about the degree of ongoing review which the
Bureau and the Department utilize in their undercover activities. The process
through which the FBI Charter as introduced was forged involved detailed anal-
yses of, among other things, undercover operations. I will be very interested to
hear from our witnesses today about the degree to which current operations
have conformed to the proscriptions in the draft Charter. If there are inadequacies
in the Charter from a realistic day-to-day undereover operations perspective, it is
imperative that We understand these inadequales,
I welcome the opportunity to hear from our distinguished with ses on this
subject and look forward to continuing mutual effort to make our criminal justice
system the best that fair minds car. devise.
Mr. EDWARDS. Thank you, Mr. Rodino.
The gentleman from Illinois, Mr. Hyde.
Mr. HYDE. Thank you, Mr. Chairman.
I would like to welcome Director Webster and Mr. Heymann, and
express my gratitude to the chairman for his having scheduled hearings
on the matter of the FBI's undercover operations, commonly referred
to as sting operations.
We in the Congress have, as you know, Director Webster, only
recently become sensitized to the potential impact of undercover
operations, which the Bureau stages.
127
In fact, the chairman has been quoted AS saying that the Abscam
operation, just completed, would not have been possible under the
proposed charter.
My reading of that document, however, indicates to me that pro-
posed section 533(b) (1) specifically permits the Bureau to conduct an
investigation on the basis of facts or circumstances which "reasonably
indicate that & person has engaged, is engaged, or will engage" in a
criminal activity.
I invite you to confirm or correct my interpretation of that section
of the proposed bill.
In the course of this hearing, I expect to ask a number of questions
designed to establish the overall effectiveness of these operations, the
conviction rate relative to other investigations, and the investigative
costs per conviction, and similar questions.
I suppose parenthetically it's too much to hope that the cost ne-
counting that you will be required to make be applied to the Depart-
ment of Housing and Urban Development, or HEW, but we can hope.
I am also quite concerned. as you might suspect, about the extent
to which you do engage counsel to moniter these activities.
Now it seems to me that audio and video recordings, legally acquired
during these sting operations, constitute the best evidence within the
meaning of the rules of evidence, and most clearly demonstrate to a
jury the actual events in the particular case at bar us they occurred.
Video and audio recordings help to resolve many otherwise trouble-
some problems of identification, and exactly what was said or done,
and under what circumstances.
We are also concerned about the leaks which may well have prej-
udiced the rights and the reputations of some, but also which sebo-
taged, rather effectively, your ongoing investigation.
I look forward to hearing your statement and your response to my
concerns.
Mr. EDWARDS. The gentleman from Ohio, Mr. Seiberling.
Mr. SEIBERLING. Thank you, Mr. Chairman.
Mr. Webster and Mr. Heymann, I have read your draft statements,
prepared statements. I haven't read the final version. I presume there
are no major substantive differences; is that correct?
Mr. WEBSTER. Yes.
Mr. SEIBERLING. I noticed that in both statements, it is pointed
out that the FBI and the Justice Department are not prepared to back
off or to curtail investigations of this type.
I think that is a bit of & strawman, because I don't know anybody
who has suggested that you back off or curtail these investigations.
I certainly think that wherever you have any essonable or probable
cause to believe that officials or anyone elso are engaged in corrupt
activities, you have the obligation to go ahead and investigate those,
and pursue them to the end, as you say in your statement.
I am, however, concerned with some of the implications of the
techniques used. Perhaps this is 11 novel approach or perhaps we just
didn't know about it before now: but, in any event, we now have some
curtains drawn aside, and we have had revealed to us some of the
techniques that have been used in trying to ferret out possible violators
and possible corrupt officials.
128
I think we should not try to explore your activities in connection
with any of the people whom you have some reason to believe may
have been corrupt, and I don't think this committee should, as long
as there is a possibility of prosecution, but I do think that we can
investigate the processes used in connection with those who were the
targets of investigation and were not found to be corrupt, and those
names have been revealed in the newspapers, again perhaps unfortu-
nately, because it does put some kind of a cloud over them.
I think that we owe it to the Congress and to the country to ex-
plore the techniques and find out how it is that people who have
turned out to have no predisposition. to have no corrupt motives, to
have in effect not been enticed by any snares that were set, how they
could have been brought into, first of all, an investigation posture;
and second, how they could be brought to go to whatever houses or
other places where you had these video cameras and SO forth. and
what was used to entice them. We have one case of a Senator who, as
far as I can determine from the newspap or reports, was enticed by the
prospect of perhaps a campaign contribution: a perfectly legitimate
thing. Although when he found out that there was some sort of money
for possible legislation, why, he immediately turned it down.
ou have another one reported where a lawyer, not 11 Member of
Congress. but a lawyer. was approached on the possibility of some
Arab sheik hiring him on n retainer basis; again a perfectly legitimate
thing; and when he found out what the other conditions were, he said,
"Nothing doing."
Now we have other instances of Congressmen who were apparently
intrigued into exploring promises that there were some big investors
who wanted to invest in their district. Every single Member of Con-
gress wants to have investments in his district to help the employ-
ment situation and produce an expanding economy, and that is a
perfectly legitimate thing.
I really think we owe it to the country to explore to what extent
honest motives were used to suck people in to what might have been
a trap, had they turned out not be honest people. I think we ought to
explore it only in the case of those who turned out to be honest and
not to have corrupt motives. We must see how this could happen,
because I think that those cases carry the most serious implication
of all the very serious implications in this entire affair. If necessary,
I think we should go into secret session, if otherwise we would be re-
vealing methods of the FBI or embarrassing individuals.
I thank you, Mr. Chairman, for this opportunity to express my
mind on this very, very important subject.
Mr. EDWARDS. The gentleman from Missouri, Mr. Volkmer.
Mr. VOLKMER. I'd just like to briefly say that I wish to renew my
confidence in the Director, but I also have the same concerns us the
gentleman from Ohio who has just spoken, and it's not with just how
this applies to this one operation. but how it may apply to other
operations with other people throughout the country who are, I would
assume, innocent until proven guilty, and good people in their com-
munity, and how they. too, may be caught up into some type of opera-
tion, any type of operation, unless there is-and the thing I'd like to
focus on sometime, if not today or tomorrow, maybe 6 months from
129
now, or sometime when it can be, as to the management of these opern-
tions and how detailed that management actually is, and the scope
of involving people, because of the matter of Senator Pressler and how
that came about, and how the-well, some way enticement was
brought about, as the gentlemen from Ohio has pointed out, purely
legitimate.
To be honest with you, if somebody had walked up to me and said,
"Harold, I know some people who would like to give you $1,000 or
$500, even $100, for your campaign. There is is group of them down the
street, I'd like for you to come down and visit with them and talk to
them about your campaign," Mr. Director, I'm afraid that I'd say,
"Sure, I'll be glad to go down."
I don't think there are very many Members of Congress that
wouldn't. The same thing would apply to certain just private indi-
viduals, ns well as other purposes, business investments and what-
have-you. That's what concerns me.
Thank you very much. Mr. Chairman.
Mr. EDWARDS. Without objection. both statements will be made II
part of the record in full. and I recognize the distinguished Director of
the FBI. Judge William H. Webster.
[The complete statements follow:]
STATEMENT OF PHILIP B. HEYMANN, ASSISTANT ATTORNEY GENERAL, CRIMINAL
DIVISION, DEPARTMENT OF JUSTICE
Mr. Chairman and members of the subcommittee, I am pleased to here today
to discuss the role of undereover operations in federal haw enforcement. I would
first like to discuss why undercover techniques are 40 important to effective on-
forcement, and then to describe the legal and policy safeguards which We believe
set an appropriate role for use of the technique.
1. THE UNDERCOVER TECHNIQUE IS A LONG-ESTABLISHED AND CRUCIAL LAW
ENFORCEMENT METHOD
The term "undercover operations" embraces a wide variety of investigative
techniques which can successfully ferret out and deter a broad range of significant
crimes. Undereover operations span a gamut which may include: a police officer
posing as an old woman vulnerable to mugging or more severe physical attacks in a
park; agents infiltrating a drug-smonggling conspiracy intent on making controlled
narcotics buys from large-scale dealers; a.modest business front, such as a local
tavern, susceptible to extertion by local organized crime elements or official
inspectors seeking graft: or an elaborate, posh enterprise designed to recover
expensive stolen art, jewelry and other valuables. Such an operation may include
only a single agent or a single cooperating citizen or informant or it may involve
many agents, the use of video and-oral tape recordings, judicially-authorized wire-
taps, cooperation by several private individuals or businesses, and a number of
overt investigative techniques.
Undereover operations have been and will continue to be ffective in capturing
and convicting those engaged in both violent and economic crimes, including
narcotics trafficking, terrorism, labor racketeering, truck hijacking, ar-on-for-
profit, and white collar frauds, as well as political corruption. Judge Webster has
noted some of the Bureau's most recent successful operations in these areas. Other
federal investigative agencies such as the Drug Enforcement Administration, the
Department of Agriculture, and the Bureau of Alcohol, Tobacco and Firearms,
as well as local police forces also utilize undercover operations.
Judge Webster has mentioned the investigative advantages wt. h undercover
operations provide. In essence, they allow the investigators to pier e the carefully
constructed walls of secrecy and layers of insulation behind which the must
sophisticated and potentially dangerous criminals work. They permit investigators
to discern types of "consensual" crime which generally go unreported and in
which the victim is the public at large. If a night club owner bribes a local in-pector
to overlook fire code violations, in order to avoid more expensive repairs, neither
130
party is likely to report the criminal transaction. Without undercover techniques,
the matter may never come to public attention or may come only after a fire has
trapped and killen innocent patrons of the club. A. one writer puts it, consensual
crimes generally "do not announce themselves."
Fr. In the prosecutor) perspective, undercover operations are extremely effective
in adding us to identify, presente and convict the and to reduce the chances
that innocent parties will be valight up in the criminal process Undercover
operations permit 115 to prove our CLESES with direct. as opposed to circumstantial,
evidence. Instead of having to on inferences from facts developed after the
commission of a entime, we CAR rely on testimons from those who were direct
observers before, during and after the attempted commission of 3 crime. Nor are
we limited to the testimony of unsavory criminals and confisience men, whose
creditality may be questionable sind, in any event, can often be destroyed on
eross-examination by able defense counsel. Instead, through undercover tech-
niques, we can muster the testimony of créditle law inforcement agents, often
invented by unimpelschable video and oral tapes which graphically reveal the
defendant's image and veice engined in the conumission of crime. These techniques
aid the truth-fin-ling process be generally avoning of mistaken identity or
perjurious efforts by is witness to implicate an innocent person. With the aid of
the direct perceptions of government agents and in lisputable tapes, we are able
to determine whom to indiet and whom we should not charge. Similarly, a jury is
added in determining whether the charges have been adequately proven,
Recording the interplay of government agents and imsuspecting, putative
defendants is also of considerable assistance to the courts. In many cases where a
defen-lant seeks distinissal of an indictment OF suppression of evidence on the
ground of governmental miscominet, the court is forced to make difficult com-
parisons of credibility and accuracy of recollection between government witnesses
and the defendant. Bat when the challenged law enforcement conduct is largely
recorded, the court is in a superier position to determine whether the charges of
impropriety are justified.
Not only do undercover techniques enhance our ability to investigate and
prosecute crimes, but they also serve 35 a powerful deterrent against the com-
mission of future crimes, Operation Lobster, which the Bureau conducted in
conjunction with local law enforcement agencies under the supervision of the
Justice Department's New England Organized Crime Strike Force, was an effort
to combat truck hijackings plaguing the Northeast Corridor at a rate as high as
two to three per day. The operation involved having a Bureau undercover
operative pose as a broker of stolen bulk merchamise and THE a warehouse who re
the hijackers could bring their trucks and fence their stolen goods. Video tape and
sound recordings were used to monitor and record all business dealings at the
warehouse Af er approximately 22 months, the investigators believed they had
identified ali of the major hijackers and proceeded to arrest all those who had
fenced stolen loads with us. As a result, we convicted 50 individuals and recovered
$3 million in stolen property. But perhaps even more impressive is the fact that
after the arrests were made last March, there was only one reported hijacking in
the next six months. While the sureease stemmed in part from the fact that
many of the major hijackers are now imprisoned, it is also true that hijackers
have been made uncertain whether the fences needed to make their crimes profit-
able are genuine. They must worry that the fences may be in faet federal lawmen
who will at some future date arrest and prosecute them.
The same deterrent value is achieved whenever criminal actors are given reason
to fear that the person buying heroin, the businessman being extorted or the
persons effering brihes may turn out in fact to be undercover government agents.
The resulting risks and une rtainties will lead some to refrain entirely from the
contemplated crime and others to He considerable slower and more cautious in
dealing with strangers essential to the successful consummation of the criminal
endeavor.
2. THE LEGAL REQUIREMENTS FOR UNDERCOVER INVESTIGATIONS
ARE WELL-ESTARLISHED.
Recognizing the strong societal interest in undercover investigations, the federal
courts have repeatedly sanctioned use of the technique, For example, in United
States V. Russell, 411 U.S. 423 (1973), the Supreme Court upheld a conviction for
manufacturing illieit drugs even though the defendant had been supplied essential
chemicals by undercover federal agents. The Court specifically rejected the defend-
ant's claim that the Government was too deeply involved in creating the triminal
131
activity for which the defendant was convicted. Quoting Sorrells V. United States,
287 U.S. 435, 441, decided 3 half century earlier, the Russell Court noted: 'that
officers or employees of the Government merely afford opportunities or facilities
for the commission of the offense does not defeat the prosecution.'
Nor
will the mere fact of deceit defeat a prosecution,
*
for there are circumstances
where the use of deceit is the only practicable law enforcement technique avail-
able." 423 U.S. at 435.
This was what the Sorrells Court had recognized as well: "Artifice and stratagem
may be employed to eatch those engaged in criminal enterprises.
The
appropriate object of this permitted activity, frequently essential to the enforce-
ment of the law, is to reveal the criminal design; to expose the illicit traffic, the
prohibited publication, the fraudulent use of the mails, the illegal conspiracy, or
other offenses, and thus to disclose would-be violators." 287 U.S. at 441-442.
In its most recent decision in the area of undereover operations, Hampton V.
United States, 425 U.S. 4S4 (1976), the Court upheld the validity of an undercover
investigation in which, according to the defendant, the Government had sold
contraband heroin to the defendant through an informant, bought it, back from
him through undercover agents and then convicted him for the sale. In the decisive
concurring opinion, joined by Mr. Justice Blackmum, Mr. Justice Powell wrote
that the practical law enforcement problems posed by nareotics trafficking justified
a flexible response in detecting would-be violators, even by supplying a contraband
substance.
For the most part, in determining the propriety of undereover operations, the
courts have focused on the issue of entrapment. Under this doctrine, the key test
is whether the Government implanted the criminal idea in the mind of an other-
wise innocent individual and induced him to commit acts he was not predisposed
to commit. In entrapment, the focus is not SO much on governmental conduct as
on the mental state and prior behavior of the defendant caught 10 a eriminal deed.
As Chief Justice Warren stated in Sherman V. United States, 356 U.S. 369, 372
(1958):
"To determine whether entrapment has been established, a line must be
drawn between the trap for the unwary innocent and the trap for the unwary
criminal."
The decisions of the Supreme Court suggest that if governmental conduct in
an undercover operation reaches "a demonstrable level of outrageousness," such
conduct could bar a conviction on due process grounds, even where the defense
of entrapment is not technically available. But to date, the Supreme Court has
noted that neither supplying essential materials for a criminal enterprise, nor
supplying the very contraband whose sale was later punished, amounts to any
such overreaching. As Mr. Justice Powell stated in Hampton, "The cases, if any,
in which proof of predisposition is not dispositive will be rare." 425 U.S. at 495 n. 7.
Neither the Supreme Court nor other federal courts have established general
operational criteria for undercover operations. The courts have not required that
there be any threshold showing of probable cause or reason to believe that a
specific crime has been or will be committed or that a particular individual is
involved before an operation can be commeneed. Nor have the courts imposed
any rigid rules on investigative agents with respect to their behavior in establishing
and running an undereover operation.
Thus, under current case law, undereover operations will be sustained if they
are not SO outrageous as to offend the conscience and if they do not trap the
unwary innocent.
3. THE DEPARTMENT HAS ADOPTED ADDITIONAL SAFEGUARDS AS A MATTER OF
POLICY
As a matter of sound administrative policy, the Department observes consider-
ably more restraints than the bate legal requirements in establishing, monitoring
and executing its undercover operations. In the elaborate review process which
Judge Webster has described, the Bureau and the Criminal Division strive to
insure that each undercover operation is carried out in a manner which is fair,
unambiguous, productive of successful prosecutions, and which minimizes the
impact on or even the involvement with innocent persons.
As a first safeguard, we only initiate investigations, and we only use the under-
cover technique, when we reasonably suspect that criminal activity of 3 given
type or pattern is occurring or is likely to occur. If we open a store-front fencing
operation, we do so based on reasonable indications that the theft and sale of
stolen property is taking place in the area and could be effectively detected and
132
prosecuted through use of the technique. When a courageous FBI agent named
Walter Orrell was sent on a detail to the Bronx in 1976 to pose as the operator of
a new garbage collection business and to seek out customers, it was done based
on an urgent suspicion that extertionate practices were occurring in the refuse
collection industry. That suspicion was confirmed when the part-owner of a rival
company came into Mr. Orrell's office and threatened to pitch Mr. Orrell out the
window unless he stopped competing, a threat which was tape-recorded and
helped convict the extorter.
We impose on ourselves the requirement that there be a well-founded suspicion
of criminal activity in 8 sector or area before commencing an undercover opera-
tion, not only seause fishing expeditions may be unfair left also for the practical
reason that they would be wasteful of our searce investigative resources. We
are simply not in a position to commit precious manhours and resources to an
elaborate undereover operation unless we are fairly confident that in the end we
will be able to apprehend and convict those engaged in significant criminal
conduct.
We do not impose on ourselves any rigid requirement that we know the par-
ticular individuals involved in the pattern of criminal conduct before we begin
use of the undereover technique. Sometimes Be will know the likely identity of
a violator before undercover work isused. If a businessman comes to us and savs
that he has been offered stolen goods or that & licensing inspector has asked for
A gratuity, we can use the undercover technique by having the citizen complete
the transaction under surveillance. But in the real world, it is hard to intercept
many ongoing criminal transactions in that fashion because, 5d noted, many
serious crimes are consensual such as drug trafficking. loan-sharking, and in-
stances of official corruption), because the victim is afraid to come forward, or
because the victim may not even realize he has been injured (such as a company
shareholder whose company officers take kickbacks, or a union member whose
funds has been embezzled). Even when the identities of particular persons in-
volved in criminal activity are known, they will often only be intermediaries or
lower echelon participants.
Effective use of the undercover technique instead often requires that the violator
take steps to identify himself during the undercover operation. When we set
up a store-front or warehouse operation, sellers we never even knew were in the
business have come forward with stolen goods. When we put word out on the
street that we will fence stolen truck cargo OF stolen government food stamps,
the thieves announce themselves and their livelihood by walking in the door.
This self-identification can also occur through the intervention of criminal brokers
or intermediaries, who gain a living by functioning as catalysts to illegal deals
between prospective buyers or illicit goods and services and sellers looking for an
additional outlet. One example of such match-making occured in an investigation
in Pontiac. Michigan several years ago, where an undereover agent posed as an
individual interested in starting a numbers operation. He soon was approched
by a local union official who said that police protection would be required for the
operation and who thereafter brought several interested police officers to see the
undercover agent. Until that approach, we had not focused the investigation on
official corruption nor suspected the particular police officials who were later
convicted.
In some areas of law enforcement, it may be harder to structure an operation
SO that those with corrupt intentions take the initiative in coming forward, whether
in person or through the agency of 14 broker. Where operators in a criminal sector
are sophisticated and wary such as drug bankrolle who wait for drug importers
to come to them for financing. undereover agents may have to make the first
move and approach such possible financiers directly or through a broker. In cases
where we do not know the identities of the violators in is received pattern of
criminal activity and have to make the first move directly or through a broker,
or where we are met by the representations of an initiating agent of uncertain
reliability, we seek to take every possible precaution against involvement of the
innocent.
Such precentions involve a careful evaluation of anything we are told by inter-
mediaries about the possible interest of other persons in a criminal transaction,
and an attempt to check such claims to the extent practicable. Most important,
however, is the second major safeguard followed in every undercover operation,
of making clear and unambiguous to all concerned the illegal nature of any oppor-
tunity used as & decoy. This provides the strongest possible protection against
any unwitting involvement by individuals brought in by intermediaries or who
are encountered directly. We attempt to structure our undercover decoy trans-
133
actions by requiring overt participation on the part of all individuals. If 8 middle-
man offers to provide police protection for an undereover numbers parlor, we
would seek a face-to-face encounter with the allegedly corrupt policeman at
which the illegal nature of the quid-pro-quo would be made utterly clear. This
precaution not only elicits the strongest possible evidence of the knowledge and
involvement of principal offenders who usually insulate themselves through
middlemen, but also provides an important protection against any attempt by 8
middleman to use the name of an innocent person and against any inadvertent
involvement by persons located on the outskirts of an undercover operation. By
making clear and unambiguous the corrupt nature of any offer we make, the chance
of unwitting or gullible involvement by innocent individuals is strongly guarded
against.
A third important safeguard in undercover operations is our modeling of the
enterprise on the real world as closely as we can. The opportunities for Hlegal
activity created in the course of an undercover operation should be only about as
attractive as those which occur in ordinary life-because the object of a decoy
undercover operation is to apprehend only those eriminal actors who are likely
to have committed or to commit similar criminal conduct on other occasions.
Offering too high a price for studen goods in a feneing operation, or pressing a
licensing inspector too vigorously to "work something out" about a licensing
violation are inducements we would avoid for fairness reasons. Fairness and
practicality have an important coincidence here since overweening inducements
or too attractive rewards are also likely to be not believable, potentially alerting
criminal actors that something is amiss including the po-sibility of government
involvement.
In view of these safeguards and restrictions in carrying out undercover opera-
tions, we believe that most of the concerns raised by recent commentators about
undercover operations are easily answered.
Some commentators have suggested that undereover operations are improper
when they "create crime." This objection is probably not meant in a literal sense,
since whenever a local policeman walks through a park that night dressed as an
elderly Indy, in order to serve as a decoy victim for muggers, there is a risk that
a "new crime" will be created. When We organized our Bronx garbage collection
company as a decoy victim for extortion, again we were making likely the com-
mission of an additional act of criminal extortion.
Rather the objection probably gues to the sense that law enforcement activity
should never tempt into criminality persons who otherwise would have led law-
abiding lives. The important safeguard observed in our undercover operations of
modeling the operation on real-world situations-of making sure that any created
illicit opportunities, rewards, and inducements are proportionate to the real-
world illicit opportunities, rewards, and inducements an individual would be
exposed to-meets the nub of the issue of "creating crime." For by this safeguard,
we assure that the only individuals who take part in a decoy transaction are
individuals who are likely to have engaged in similar criminal conduct on previous
occasions or to have committed such crimes on future occasions, By observing
this principle of proportionality-modeling the real-world-we avoid creating
criminals out of law-abiding persons, and that is the must important part of the
argument about "creating crime."
The other intuition underlying the "creating crime" argument is the strong
sense that law enforcement activity, including undercover operations, should
avoid harming or burdening third parties, Certainl: any undercover activity
which posed A direct threat to the safety or well-being of third parties would be
exceedingly troubling. We are sensitive to this concern and are extremely careful
to monitor our operations to prevent third party harm. We commonly close the
operation if there appears to ba any significant chance of violent activity or
severe uncoverable financial loss to individuals.
Another argument made by some commentators is that undereover operations
are proper only when the decoy opportunity or solicitation attracts solely those
perons guilty of a prior crime. The example usually given is that of a property sting,
in which the Dogus fence will presumably attract only those people who have
engaged in the crimes of theft or receiving stolen goods. Again, I don't think the
argument is intended to be taken literally, since a policeman dressed as an elderly
lady has no way of knowing whether the mugger he apprehends engaged in any
prior crime before the attempted assault, and yet such decoy operations are
generally accepted, just as we may not know for sure in making an agreement to
buy narcotics from a street peddler whether he already possesses the narcotics.
134
One might also note in passing that the intuition as to property feneing is not a
perfect one; an individual may well condition his commission of a theft on the
knowledge there is usable fence nearby and hence those attracted by a fence are
not be definitor criminals prior to their interactions with the fence.
But the concern underlying the "prior crime" argument is again an important
one, and is similar to the "creating crime" argument. He don't wish law enforce-
ment activity of any sort to turn law-sbiding people into new criminals. The
attraction of a "prior crime" population to it bogus property fence seems con-
sistent with this precept. But the concern 18 also met By our safeguard policies
of keeping all decoy opportunities proportionate to these that exist in the real
world and by making sure that the illegal nature of the opportunity is clear and
unambiguous. These safeguards assure that the only individuals who take part
in decoy transactions are individuals likely to have engaged in similar conduct
on other occasions.
The same ethical intuition probably moves those commentators who have
argued that a factual predicate of probable cause concerning an individual's
involvement in criminal activity should precede any use of undereover techiniques.
For the reasons explained above concerning the difficulties in detecting and identi-
fring the parties to consensual crimes, We do not believe that a probable cause
standard as to individual involvement is remotely practicable-not to mention
that probable cause is the articulated standard for arrest and indictment rather
than the beginning of an investigation. But the intuition underlying the "probable
eause" argument-that the government should not make new criminals out of
law-abiding persons nor test people at will with temptations not otherwise occur-
ring in their livest is again that by Hill safeiguards of having all decoy opportunities
and attractions approximate to those existing in the real world and of making
clear and unambiliguous to all participants in a decoy transaction the corrupt and
illegal character of the activity.
4. THE UNDERCOVER TECHNIQUE is NO MORE INTRUSIVE THAN OTHER INVESTIGATIVE
TECHNIQUES
Although undercover projects are designed to pierce deeply into criminal
enterprises, the operations are the more intrative of the interests protected by the
Bill of Rights than are other available law enforcement techniques, Compare, for
example, a situation in which an individual voluntarily drives a truckload of stolen
goods to fence at a videstaped undereover warehouse, with any of the following
law enforcement methods: a search under judicial warrant of a home or business
which is carried out against the will of the owner; grand jury or trial testimony
compelled against friends and associates or even relatives: self-increminating
testimony compelled from an individual after being granted use immunity by a
court; a grand jury subpoena for voluminous doeu ments, physical evidence or
books and records which may concern an individual's private life; or court-
authorized electronic interceptions of private conversations OF telephone calls when
neither party has consented to the interception. In comparison with these Con-
stitutionally. and Congressionally authorized techniques, undereover operations
represent no greater intrusion into the zone of interests protected by the Fourth,
Fifth, and Sixth Amendments of the Constitution.
The essence of the undereover technique is to make use of a subject's willingness
to provide information and evidence voluntarily and intentionally to those who he
thinks are his eriminal confederates. It is the voluntary provision of information to
a confederate who, even if a private person. could well For expected to reveal the
information on some future occasion, see United States V. While, 401 U.S. 745
(1971), which makes this technique relatively unobtrusive. In addition. the
ability of undereover agents to focus the investigation on the precise criminal
conduct in question substantially limits the information gathered to that necessary
to complete the investigation. The intelligent use of underoever techniques in an
investigation can of ten produce sufficient evidence to prove 14 criminal case without
foreing the Government to use intrusive investigative methods such as search
warrants and court-authorized wiretaps.
The quality of evidence obtained by undercover operations adds substantially to
the due process of criminal trials. Often video-taped and recorded, the crimes can
be essentially recreated before the jury. Convictions are not centered on the
testimony of informants or on the powers of memory of untrained witnesses. The
certitude of the evidence improves the confidence of the public in the accuracy and
fairness of the judicial process.
135
As noted, the one significant danger of undercover operation is the risk of
bringing into the government-monitored criminal activities people who would not
otherwise engage in similar activities. As the Director and I have explained,
we strive to minimize these risks during the planning and execution of the opeTa-
tion. The Department will not authorize the prosecution of any individual unless
we confidently believe that he committed the criminal acts without undue solici-
tation or is predisposed.
Finally, the defense of entrapment is always available to a defendant at trial
where & jury can determine from all of the evidence, including perhaps videotapes
of the defendant's conduct, whether in Chief Justice Warren's words, the
fendant was "an unwary innocent" or "an anwary criminal."
5. UNDERCOVER INVESTIGATIONS OF POLITICAL FIGURES, WHILE POSING SPECIAL
PROBLEMS, SHOULD NOT BE SUBJECT TO DIFFERENT RULES
Lastly, I would like to address the special and delicate problems posed for law
enforcement in undereover investigations of public corruption. We are sensitive
to the potential for abuse when there is an intrusion by the federal executive
branch into the affairs of a co-equal branch of government. whether it be the
legislature or the judiciary, as well as into the affairs of a state or local govern-
ment. It would be intolerable if investigations were motivated by partisan or
political considerations or if investigations intruded in any meaningful way in the
lawful functioning of any branch of government. These concerns mean that hw
enforcement officials must net with scrupulous fairness, apolitically and cantionsly,
in carrying out their investigations.
But these concerns do not mean that WY can or should shanden our responsi-
bility to investigate and prosecute public corruption. Whether at the local. state
or federal level and whether in the executive, legislative or judicial branches,
public integrity has been and shall remain & high priority enforcement area of
the Department of Justice.
The reasons for this are simple and compelling. In order for the public to have
the necessary trust in its government, it is essential that corrupt misuse of public
office and authority be effectively prosecuted. Unhealthy disrespect for law is
generated when there is a perception of a dual standard, strict enforcement for
ordinary people and lackadaisical attitudes or worse for the powerful or prominent:
Further, our investigation of sophisticated organized crime, nareoties trafficking,
and white collar fraud schemes reveals that official corruption is often indis-
pensable to the success of these criminal ventures. Some investigations in these
criminal areas may lead us to evidence or at least allegations of serious public
corruption. Whenever the trail of an investigation leads to significant allegations
of public corruption, we must and will follow the evidence, no matter where and
to whom it may lead.
Often the only effective technique to investigate public corruption will be
undercover projects. Because of the consensual nature of bribe transactions and
other forms of corruption, it will often be very hard to gain evidence of the trans-
action, whether the transaction concerns the local police or Chicago electrical
inspectors. Even if one of the consensual parties does report the matter. when
the public official is a prominent, respected individual, reliance on the testimony
of a disreputable briber or an unsavory middleman will fre quently be unsatis-
factory as proof. The testimony of a credible government agent, or a consensual
recording or videotape of a transaction is far more probative and credible evidence.
In public integrity cases involving Congressmen. the recent Supreme Court
decision in United States V. Helstoski. 99 S. Ct. 2432 (1979) has only compounded
the difficulties of proving a corrupt transaction in the absence of undercover tech-
niques. The usual way we would prove an allegation of bribery, outside a
Congressional context, is to show that money was transferred more 15 less contem-
poraneously with the performance of an official act for which the money was prom-
ised. But Helstoski holds that under the Speech or Debate Clause references to an
already performed legislative act by a member of Congress cannot be introduced
in the government's case even in a prosecution for bribery. As the Supreme Court
acknowledged, "without doubt the exclusion of such evidence will make prosecu-
tions more difficult." 99 S. Ct. at 2439. In regard to past acts of illegal bribery,
that prediction of difficulty is certainly true. For although we can prove that money
passed (the quid), Helstoski prevents introducing evidence of the official act
(the que).
The only route of proof left open by Helstoski is testimony by a bribe-payer
about the promise alleged'y made by the Congressman. As noted above, an
136
avowedly corrupt bribe-payer will not enjoy much credibility as 8 witness. Hence,
the use of the undercover technique, making possible testimony from more
creaible law enforcement agents and evidence collected by consensual surveillance,
will take on central importance in any future investigation of alleged criminal
abuse of office by 8 member of the Congress.
The safeguards and techniques which are employed in our undercover operations
generally are and shall be utilized in investigations aimed at public corruption.
After the careful internal review procedures are satisfied, We will initiate an under-
cover investigation only where we have a well-founded reason to believe that
there 18 a pattern of criminality. There are only two ways in which any public
official will become the subject of an undercover investigation: if he is the object
of reliable, specific criminal allegations for which an undercover operation is an
appropriate method of investigation: or if, by a process of self selection, he volun-
tarily enters an operation. Just as we do not know which individuals will enter our
undercover warehouse with 8 truckload of stolen merchandise, NO we do not always
know or even suspect which municipal building inspector will show up in our
undercover bar to solicit 2. corrupt payment in return for a license. As in all under-
cover operations, any decry transaction in 14 public integrity case should be
structured se that its corrupt character is 115 clear and unambize us as possible and
should be modeled and proportioned as closely as feasible en the pattern of crita-
inality we understand to exist in the community. We must be fully satisfied that
the public official is soliciting and wiling to accept an Hingal payment in return
for dispensing a political favor. If it appears that the individual backs such intent
and has entered the operation on an innocent misunderstanding, perhaps gen-
crated by the misrepresentations of is deceitful non-governmental middleman, we
would not pursue the individual as a target of the investigation.
On the other hand, if we are satisfied of the individual's criminal intent, then
we cannot and will not shirk our responsibility to continue the investigation and to
prosecute, if warranted, regardless of how prominent or powerful the official may
No. In essence, the same protections which preciude OF minimize the possibility
that innocent people will be caught up in any type of undercover operation are
also use di to prevent an honest public official from being implicated in any under-
cover operation directed against public corruption. There is no valid reason for any
standards or procedures in political undercover operatio in different from those
employed in any other types of undercover investigations.
CONCLUSION
The undercover technique has been used successfully in labor racketeering,
white-coliar crime, narentics trafficking, political corruption. and many other
kinds of significant crime. We believe that as administered the Department, in
conformity with the legal and cover policy restraints described today, under-
cover techniques represent a minimally intrusive, powerfully effective weapon to
detect, combat and deter the most serious forms of crime in our society.
STATEMENT OF DIRECTOR WILLIAM II. WEBSTER, FEDERAL BUREAU OF
INVESTIGATION
It's a pleasure to appear before you today to discuss the FBI's undereover
activities.
The FBI makes use of the undercover technique in important cases where more
conventional investigative techniques give little promise of success. The tech-
nique allows us to reach berond the street to the manipulators, organized crime
leaders, and others too guarded or insulated to be observed in criminal activity
in public. A brief look past undercover cases illustrates just how effective
its use can he.
Our UNIRAC investigation, standing for Union Racketeering, was aimed at
corruption in the Longshoremen's Union in several Atlantic and Guif Coast ports.
The principal violations here included racketeering and extertion: payoffs by
shippers and warehousemen to union officials. It was a mutual arrangement and
one that had been in existence for some time. Direct investigation of the suspects
probably would have resulted in an attempt to cover up existing evidence. How-
ever, with the help of S. source and undercover Agents in Miami, we were able to
get hard evidence-tape recorded conversations of actual illegal transactions.
Ultimately, this case led to the indictment of 120 persons. Sixty-nine of these
137
individuals, including many union officials and business executives (and among
these, must recently, Anthony Scotto) have been convicted. and many others
await trial. These setivities impacted on millions of Americans who have been
paying inflated prices on a multizude of items passing over the docks.
In another undersiver case, 3 Weather Underground investigation, the stakes
were different. We were dealing with a small insular cell of individuals committed
to violent revelutionary acts. Twant our Agents were above to infiltrate the organi-
zation and remained metimers for four years. As a result. ther were able to warn
us of the organization plan to both the office of a California State Senator: We
made arrests shortly lictore the group put its plan into operation and effectively
prevented the violence from Redding:
In another undereover upsearti It entitled MODSOUN, MY targeted the mamu-
manufacturers and distribut ITS of "pirated" tance. records, and labels minne
with organized figures with ties in the recording industry in New Y TK
City. Working CAST of a date front export business operating at the retail sales
level. the FM was able to 8+420 $100 million of counterfeit tapes and recording
equipment as 10 different n- in five East Chast states. Todate, four subjects
have pled guilty, two offers have been indicted. and additional indictments
are anticipate
Other exception of undersiver spetations metude the original anti-fencing Sting
operation in Washington :- for yours smother anti-fencing operation in
Buffalo, New Yerk, that In terther receivery in a studen Rembrandt a joint FBI
300 ATF ration timested against an n-f reproit ritig which utilized the
RICO statute eventually resenting in stiff sentences to It individuals. $273,000
in finds. and the forfeiture of ever $450,000 in properry: and one very important
recent Carth We natural the KASP MIPORN Terrefer to on indercover investigation
into the permography industry in Miami and BE ties to organized crime. That
investigation health in August of 1977. It involved TWO undereover Agents who
spent two and one-half years working their way into the contidences of allegedly
some of the nation's major port graphy letsiness figures. Forty-five persons were
indicted (t> :1 result of that investigation. The same CREDIT vielded indictments
against another thirteen persons on film prating charges.
Eve given these examples to show the -rede and character of criminal investi-
gations to which we are applying the indereover technique. A- I indicated,
undereover operations are eften used to reach these serious violations that other-
wise may LU undiscovered and unpresented, That 1- particularly true where we
are dealing with consensual erities. Not long ago, We completed an undereover
investigation that led to the conviction of eleven individuals involved in 3 kick-
back scheme Smaller firms that sold materials to a large shipbuilding company
were paying off the larger company in order to keep its business, Without the
use of the undercover technique, the FBI could not have gotten inside to get
persuasive evidence of these transactions. 1. a matter of fact, twice previously
we had unsuccessfully attempted to investigate this scheme using conventional
investigative techniques.
Undercove: operations are effective. In Fi-end Year 1979, for example, under-
cover operations Ind to actual recoveries worth UNIT $190 million. In addition. we
estimate that almost $1.5 Billion worth of potential economic lesses were pre-
vented. Attest- arising from there type operations in that fiscal year totalled
1,048 with 1,326 convictions. Our funding for undereover operations during
Fiscal Year 1979 was 83 million. about one-half of one percent of our total budget.
For Fiscal 1950. our funding wish million while our request for Fiscal Year 1981
:- $4.8 million, about three-fourths of one percent of the total budget. This
increased request for Fiscal Year 1981 i- being made in order to continue our
operations without being forced to prematurely terminate some operations because
of lack of appropriated funding. Last year, 15 operations were terminated for
this reason.
These operations, however, often raise sensitive issues which I recognize must
be addressed. Therefore, the FBI has adopted specific undereover policies, and
an extensive oversight machinery to insure that each undercover operation is
carefully planned and conducted.
When an undereover project is proposed by a squad in one of our field offices,
our field office managers, the field legal advisor, and the Strike Force or United
States Attorney in that region review it and send their reports to Headquarters.
We consider the project's goals, the worthiness of its objectives, its costs, whether
the tacties proposed might involve entrapment or present other legal problems.
and the general propriety of proposed project tacties.
138
Many projects are rejected either DV field or FBI Headquarters managers.
Those that survive am submitted to an Undercover Activity Review Committeee
at Headquarters. This committee, comprised of representatives of our Criminal
Investigative, Legal Counsel, Administrative, and Technical Services Divisions
and of presentatives of the Department of Justice, reconsiders the same issues
before reaching a decision.
Many difficult questions come before this committee. One proposed operation
presented a sectratio in which the undereoyer Agent would pose as a "heavy" or
"mitscle." The committee considered the possibility that the Agent in this role
might be encouraged to commit violent Therisks were weighed: the committee
believed that violence-cinild He avoided he taking certain steps if the possibility
of violence arose. The committee approved the operation on the condition that
the undereover Agent he instruct * not to participate in any violent acts and that
FBI Headquarters be vivised of any potentially violent situations, In a second
ease, the field when proposed to use certain fraudulent documents as part of a
proposed cover. The committee determined, however, that the risk that under-
cover Agents could lose control of the cocuments and that they might be used by
sotneone who secured access to them Box the detriment of INTE innocent third party
was the great: The Gold office was directed to develop a different appreach. In
recognition of this particular problem area, a policy has now been adopted requir-
ing that the N-W of such documents must be approved by Headquarters.
In addition 10 this approval review process, special eare is taken to ensure that
our Agents are sensitive to the limitations and requirements of undercover work.
Before an operation is undertaken, FBI supervisors, the Special Agents in Charge
in the tield, and program managers at FBI Headquarters carefully screen all
undereover Agents tote certain that they are suited form their particular missions.
We also provide special training for those selected, with empliasis on instruction
in legal areas, including the issue of entrapment.
We take precautions to minimize potential problems. With adequate training,
the Agents involved are alert to sensitive issue areas. We want them to recognize
when lines are about to be crossed, and to know that when in doubt they must
seek the advice of their supervisors.
Once the review committee approves a project, the Bureau monitors it, both
at Headquarters and in the firld. When electronic surveillance or closed circuit
videotapes are used, we can examine the propriety of our Agents' conduct, and
the quality of the investigation as it progresses, And, of course, the results of the
surveillance and the tapes provide an opportunity for the courts to evaluate the
Agents' actions should they subsequently be challenged.
Perhaps it is also appropriate to note at this point that the proposed FBI
Domestic Charter contemplates the promulgation of guidelines for undercover
operations. We are currently working with the Department of Justice on these
guidelines and substantial progress has been made.
In the last few weeks, a number of concerns about undereover operations have
been raised. When aimed at property crimes or crimes of violence associated with
organized crime elements or terrorist groups, for example, few serious questions
has e been raised about the use of the undereover technique. There has been almost
unanimous approval in cases where : has been used to recover stolen property, to
identify persons who have committed known crimes of to prevent the commission
of planned criminal activities. In fact, Congress itself has recognized the value of.
this technique by expressly providing for exemptions from certain statutory re-
quirements through a certification process.
In cases involving consensual crime, however, particularly when public officials
are involved, We recognize the need for special orecautions. The investigation of
wrongdoing on the part of a public official is a particularly serious undertaking.
Our people are sensitive to the fact that reputations of public officials are delicate
and even the hint of an investigation can be harmful.
Sometimes a project may initially target one type of criminal activity only to
lead us into another equally as serious. When that occurs, even if it involves gov-
ernment corruption, the operation, after appropriate review and examination,
expands its focus. If we were not to follow these leads, we could justifiably be open
criticism for not doing our job.
We start our undercover investigations focused on criminality, not against
individuals or institutions. By creating a setting in which those who are predis-
posed to criminal activity find it convenient to deal, we may develop new leads.
The same basic criminal standard always applies. Before allowing an investigation
to expand, the Undercover Activity Review Committee must be satisfied that
139
there is a sound basis for doing SO. Therefore, it will again weigh all of the factors
it would consider when presented with any new proposal.
We are also-aware of the problems inherent in operations where our undercover
Agents are investigating subjects who are influence pediners HE middlemen claiming
to know others already willing to engage in criminal activity. Since these middle-
men do not know they are dealing with the FBI, or that they are the subjects of
investigation, it is difficult for us to monitor their activities, and, of course, they
are not under our control. We must, therefore, carefully evaluate any information
they provide to us as to the willingness of a third party to engage in a crime before
we proceed further and assure that if such a third party does meet with us he is
aware of the criminal nature of the meeting.
The recent unauthorized disclosures to the press on some of our undercover
operations are deplorable. These leaks are unfair to the subjects of the investiga-
tion whether or not indictments are eventually returned. They are also detri-
mental to the mission of the FBI and the Department of Justice. Leaks force the
premature abandoning of investigations: they tend to undermine strong cases.
They may also be dangerous to those conducting investigations.
The FBI and the Department are vigorously investigating these leaks to
determine the parties responsible. If. among the many government employees
who had access to this sensitive information, we find that any of our employees
is involved. he can expect to be severally disciplined at the least.
In summary, we must use the undereover technique with diseretion and care.
Whether it be the undereover technique or another rechnique, in every investi-
gative venture there are potential risks. A. I have in licated, we have developed
policies and procedures designed to minimize these risks. This is not to claim in-
vestigative perfection. But whenever mistakes, miscaleidations or misunderstand-
ings do occur, you may be sure that the lessons learned will be incorporated in our
future planning of operations,
Our experience tells us that the use of the undereower investigative technique
is vital in combating the two areas of crime that impact must seriously on society-
organized crime and white-collar crime. I am confident that the principles I have
discussed today, which we follow, will allow us to continue to meet these crime
problems in a manner consistent with the expectations of the American public.
TESTIMONY OF WILLIAM H. WEBSTER. DIRECTOR, FEDERAL
BUREAU OF INVESTIGATION. AND PHILIP B. HEYMANN. ASSIST-
ANT ATTORNEY GENERAL, CRIMINAL DIVISION. DEPARTMENT
OF JUSTICE
Mr. WEBSTER. Thank you, Mr. Chairman.
Thank you very much, Mr. Chairman and Chairman Rodino.
It's a pleasure to appear before you today to discuss the FBI's under-
cover activities.
The FBI makes use of the undercover technique in important cases
where more conventional investigative techniques give little promise
of success. The technique allows us to reach beyond the street to the
manipulators, organized crime leaders, and others too guarded or
insulated to be observed in criminal activity in public.
A brief look at past undercover cases illustrate just how effective
its use can be.
Our Unirac investigation, standing for union racketeering, was
aimed at corruption in the Longshoremen's Union in several Atlantic
and gulf coast ports. The principal violations here included racket-
eering and extortion, payoffs by shippers end warehousemen to union
officials.
It was a mutual arrangement and one that had been in existence
for some time. Direct investigation of the suspects probably would
have resulted in an attempt to cover up existing evidence.
However, with the help of a source and undercover agents in
Miami, we were able to get hard evidence-tape-recorded conversa-
tions of actual illegal transactions. Ultimately, this case led to the
140
indictment of 120 persons. Sixty-nine of these individuals, including
many union officials and business executives-and among these, most
recently, Anthony Scotto-have been convicted, and many others
await trial.
These activities impacted on millions of Americans who have been
paying inflated prices on a multitude of items passing over the docks.
In another undercover case, if Weather Underground investigation,
the stakes were different. We were dealing with a small insular cell of
individuals committed to violent revolutionary acts. Two of our agents
were able to infiltrate the organization and remained members for
4 years.
As a result. they were able to warn us of the organization's plan to
bomb the office of R California State senator. We made arrests shortly
before the group put its plan into operation and effectively prevented
the violence from occurring.
In another undercover operation entitled Modsoun, we targeted the
manufacturers and distributors of pirated tapes, records, and labels
along with organized crime figures with ties to the recording industry
in New York City. Working out of II storefront export business oper-
ating at the retail sales level. the FBI was able to seize $100 million of
counterfeit tapes and recording equipment at 19 different locations in
5 cast coast States.
To date, four subjects have pled guilty: two others have been
indicted; and additional indictments are anticipated.
Other examples of undercover operations include the original anti-
fencing Sting operation here in Washington a few years ago; another
antifencing operation in Buffalo, N.Y that led to the recovery of a
stolen Rembrandt-and 1 might add an aggregate of $500,000 in
stolen art treasures-n joint FBI and ATF operation targeted against
an arson-for-profit ring which utilized the Rico statute, resulting in
stiff sentences to 14 individuals, $273,000 in fines, and the forfeiture of
over $450,000 in property; and one very important recent case.
We named this case Miporn to refer to an undercover investigation
into the pornography industry in Miami and its ties to organized
crime. That investigation began in August 1977. It involved two under-
cover agents who spent 2½ years working their way into the confidences
of allegedly some of the Nation's major pornography business figures.
Forty-five persons were indicted as & result of that investigation.
The same case yielded indictments against another 13 persons on film
pirating charges.
I've given these examples to show the scale and character of criminal
investigations to which we are applying the undercover technique. As
I indicated, undercover operations are often used to reach those serious
violations that otherwise may go undiscovered and unprosecuted.
That is particularly true where we are dealing with consensual crimes.
Not long ago, we completed an undercover investigation that led to
the conviction of 11 individuals involved in it kickback scheme.
Smaller firms that sold materials to IL large shipbuilding company
doing business with the Government were paying off the larger com-
pany in order to keep its business.
Without the use of the undercover technique, the FBI could not
have gotten inside to get persuasive evidence of these transactions.
As a matter of fact, twice previously we had unsuccessfully at-
tempted to investigate this scheme, using conventional investigative
techniques.
141
Undercover operations are effective. In fiscal year 1979. for example,
undercover operations led to actual recoveries worth over $190 million.
In addition. We estimate-and granted, it is an estimate-that
almost 1.5 buskon dollars worth of potential economic losses were
prevented. Arrests RESIRE from these type operations in that fiscal
year totaled 1,048, with E826 convictions.
Our funding for undercover operations during fiscal year 1979 was
83 million, about 3 or percent of our total budget.
For fiscal 1080, our functions Was also 83 milkon. while our request
for fiscal year 1981 is 84.8 million, about ; of I percent of the total
budget.
This increased request for fiscal year 1981 is being mile in order to
continue our operations without being forced to prematurely terminate
some operations because or New of appropriated fundings Last year 15
operations were terminated for this reason.
These operations, however, often raise sensitive issues which I
recognize must be addressed. Therefore, the FBI has intepted specific
indercover policies, and an extensive oversight machinery to insure
that each undercover operation is carefully planned and conducted.
When an undercover project is proposed by 11 squad in one of our
field offices. our field office monagers, the field legal advisor, and the
strike force or U.S. attorney III that region review it and send their
reports to headquarters.
We consider the project's coals, the worthiness of its objectives, its
costs, whether the tacties proposed might involve entrapment, or
present some other legal problems, and the general propriety of pro-
posed project tactics.
Many projects are rejected either by field or FBI headquarters
managers. Those that survive are submitted to an Undercover
Activity Review Committee at headquarters. This committee, com-
prised of representatives of our Criminal Investigative, Legal Counsel,
Administrative. and Technical Services Divisions, and of three rep-
resentatives of the Department of Justice, reconsiders the same
issues before reaching 11 decision.
Many difficult questions come before this committee. One proposed
operation presented a scenario in which the undereover agent would
pose as a heavy or muscle. The committee considered the possibility
that the agent in this role might be encouraged to commit violent acts.
The risks were weighed: the committee believed that violence could be
avoided by taking certain steps if the possibility of violence arose.
The committee approved the operation on the condition that the
undercover agent be instructed not to participate in any violent acts,
and that FBI headquarters be advised of any potentially violent
situations.
In 11 second case, the field office proposed to use certain fraudulent
documents as part of " proposed cover.
The committee determined, however, that the risk that undercover
agents could lose control of the documents in that situation and that
they might be used by someone who secured access to them to the
detriment of an innocent third party Was too great.
The field office was directed to develop a different approach. in
recognition of this particular problem area, 21 policy has now been
adopted requiring that the use of all such documents must be approved
by headquarters.
53-566 0 51 10
142
In addition to this approval review process, special care is taken to
insure that our agents are sensitive to the limitations and requirements
of undercover work. Befere an operation is undertaken, FBI super-
visors, the Special Agents in Charge in the field, and program man-
agens at FBI headquarters carefully screen all undercover agents to
be certain that they are suited for their particular missions.
The also provide special training for those selected, with emphasis
On instruction in legal areas, in luding the issue of entrapment.
We take precautions to minumize potential problems. With adequate
training, the agents involved are ulert to sensitive issue areas. We
want them to recognize when lines are about to be crossed, and
to know that when in doubt, they must seek the advice of their
supervisors.
Once the review committee approves N project; the Bureau monitors
it, both at headquarters and in the field. it hen electronic surveillance
or closed cirent videotapes are used, we enn examine the propriety
of out agents conduct, and the quality of the investigation as it
progresses.
And, of course, the results of the surveillance and the tapes provide
an opportunity for the courts to evaluate the agents actions, should
they subsequently be challenged
Perhups it is ulso appropriate to note at this point that the proposed
FBI Domestic Charter contemplates the promulgation of guildelines
for undercover operations. We are currently working with the Depart-
ment of Justice on these guidelines and very substantial progress has
been made.
In the last few weeks, a number of concerns about undercover
operations have been raised. When aimed at property crimes or crimes
of violence associated with organized erime elements or terrorist
groups, for example, few serious questions have been raised about
the use of the undercover technique.
There has been almost unstitmous approval in cases where it has
been used to recover stolen property, in cases where it has been used
to identify persons who have committed known crimes or to prevent
the commission of planned criminal activities.
In fact, Congress itself has recognized the value of this technique
by expressly providing for exemptions from certain statutory require-
ments through 11 certification process.
In cuses involving consensual crime, however, particularly when
public officials are involved, we recognize the need for special pre-
cautions. The investigation of wrongdoing on the part of It public
official is It particularly serious undertaking. Our people are sensitive
to the fact that reputations of public officials are delicate and even
the hint of an investigation can be harmful.
Sometimes a project may initially target one type of criminal ac-
tivity only to lead us into another equally as serious. When that
occurs, even if it involves Government corruption, the operation,
after appropriate review and examination. expands its focus. If we
were not to follow these leads, we could justifiable be open to criticism
for not doing our job.
We start our undercover investigations focused on criminality, not
against individuals or intitutions. By creatir g 8 setting in which those
who are predisposed to criminal activity find it convenient to deal,
we may develop new leads. The same basic criminal standard always
applies.
143
Before allowing an investigation to expand, the Undercover Ac-
tivity Review Committee must be satisfied that there is 8 sound basis
for doing SO. Therefore, it will again weigh all of the facts it would
consider when presented with any new proposal.
We are also aware of the problems inherent in operations where our
undercover agents are investigating subjects who are influence peddlers
or middlemen claiming to know others already willing to engage in
criminal activity.
Since these middlemen do not know they are dealing with the FBI.
or that they are the subjects of investigation, it is difficult for us to
monitor their activities and, of course, they are not under our control.
We must, therefore, carefully evaluate any information they pro-
vide to us as to the willingness of a third party to engage in 11 crime
before we proceed further, and assure that if such a third party does
meet with us, he is aware of the criminal nature of the meeting.
Mr. Chairman, the recent unauthorized disclosures to the press on
some of our undercover operations are deplorable. These leaks are
unfair to the subjects of the investigation, whether OF not the indiet-
ments are eventually returned.
They are also detrimental to the mission of the FBI and the De-
partment of Justice. Leaks force the premature abandoning of investi-
gations; they tend to undermine strong cases. They may also be
dangerous to those conducting the investigations.
The FB1 and the Department are vigorously investigating these
leaks to determine the persons responsible. If, among the many
Government employees who had access to this sensitive information,
we find that any of our employees is involved, he can expect to be
severely disciplined, at the least.
In summary, we must use the undercover technique with discretion
and care. Whether it be the undercover technique or another tech-
nique, in every investigative venture, there are potential risks.
As I have indicated. we have developed policies and procedures
designed to minimize these risks. This is not to claim investigative
perfection, but whenever mistakes or miscalculations or misunder-
standings do occur. you may be sure that the lessons learned will be
incorporated in our future planning of operations.
Our experience tells us that the use of the undercover investigative
technique is vital in combating the other areas of crime that impact
most seriously on society-organized crime and white-collar crime.
I am confident that the principles I have discussed today, which
we follow, will allow us to continue to meet these crime problems in
8 manner consistent with the expectations of the American people.
Thank you, Mr. Chairman.
Mr. EDWARDS. Thank you, Mr. Webster. Mr. Heymann?
Mr. HEYMANN. Mr. Chairman, members of the committee, I will
summarize my testimony since it's been introduced in the record, and
let me begin by telling you what the outline of it is.
I am first going to pick up just a little bit on Judge Webster's de-
scription of the importance and the unique advantages of undereover
operations. Then I am going to summarize the bow which is fairly
clear. Then I am going to talk about three additional protections that
we-that means Judge Webster and the Department of Justice--
agree as a matter of policy we should have and do hav
144
Then I am going to talk about how undercover compares with
other investigative techniques in terms of the intrusiveness and in-
vasion of civil rights. And finally 1 am going to ask the question, is
there anything special about investizations that 50 to political figures,
either at the local, State, or Federal lovel
It sounds like & lot. but 1 will try to he at least decently brief.
The undercover technique itself is N very 6ld one. 1 sked my special
assistant to tell me what's the oldest USP of if that could find, and
she says it goes back at least to the "Adysser" and the hero of the
"Odyssey," appearing underrover to defect critifs If his household
when he returns.
It Was being used extensively toward the end of century,
There are out there, mill trains, pernography, IS not old
and familiar, but it is varied.
It takes such forms as It police Officer posing as an old woman,
vulnerable to mustimer or more severe physical intacks in Central
Park in New York: BS agents infiluation 8 consperacy,
or merely buying drues on the street of a mijor modest business
front such ID N local taken, susceptible to extortion or payoff requests
by the police: a jewelry fencing operation and an friend operation.
It his varied forms. h is ohi: it is estabinshed. It IS IMM another tech-
arque of the surt that searches, compelled testimons, interview,
scientific detection. electronic survenhance are. Ii 3 just another
technique, It is dramatic BOW because :1 has been raised in scule and
the size of the undereover operation by feernt activities.
It is not exclusively used by the FBL Director Webster mentioned
operations carried on with the Bureau of Meohoi, Tobacco and Fire-
arms. The Department of Agriculture has done undercover operations
of its own. DEA, of course, does them. Senator Mass in the Senate
ran his own undercover operation 4 years ago, and nen through New
York's medicaid clinics disguised as N potential enstomer, deriving
information.
From my point of view, they have three or four major advantages
as an investigative technique:
One: They emable us to get, as dinlye Webster's examples show,
into well-organized and serret, ongonez crimmal activities; criminal
activities that keep going and have # life of their own.
Second of all: Undercover activities are accurate. They generally
involve monitoring with either audio or audio and video equipment.
They do not put us in the position of relving on the tips OF testimony
of what are otten highly unrehable informants, con men. somebody
else out there. We end up with reliable determinations of what
happened.
I am going to argue extensively later that compared to other tech-
niques, they are nonintrusive. They don't do what the fourth amend-
ment allows us to do in terms of invading privacy, or what the fifth
amendment allows us to do in compelling cooperation. They are
nonintrusive.
Finally: They could have a very spectacular deterrent effect. We
quote with pleasure, and maybe with 100 much regularity, Operation
Lobster in the Boston area. In that operation we had a warehouse
offering to buy hijscked goods, ran it for a number of months, and then
arrested the hijackers. Hijacking has practically stopped in the New
England area. It has a substantial deterrent effect.
145
People who would engage in that activity not only worry about the
consequences of being eaight in the very moment they are engaging in
the activity: they have to worry thout whether they are dealing with
& Federal or State egent.
Many of these. incidentally, are nun with the cooperation and in
partnership with State and local law enforcement authorities. Opera-
tion Lobster is of that sort.
Let me move second to the law.
The liew, of course, 3 fumiliar to the members of the committee. We
are not free to induce 14 crime by one who is unwilling or not predis-
posed. We are free to give an opportunity to commit = clime to one
who is willing and really to take advantage of an opportunity.
The Supreme Court: in recent decisions- the Russell case. and the
Ham penn case- have attirmed that the Government, State or Federal.
can legally go quite five in providing that opportunity.
The test ultimately is whether we have created a specific occasion of
criminal activity or have created a whole new type or activity that
would otherwise not invo taken place.
In every case where the Government is operating as a decoy
victim or participant undercover, in every case that the entraptient
issue has ever been resert the particular crime only takes place because
the Government mgent IS buving drugs or he is III the park there to get
mugged. In every case, the particular eritine IS eansed by the Govern-
ment: the issue, though, is whether the type of erime would have
taken place without us.
The courts have not required that there be any threshold showing of
probable cause or reason to behave that 11 specific crime has been or
will be committed before we can engage in undercover or participate
in consensual activities.
The courts have never required that a partienlar individual be
shown to be involved before IIII operation can be commenced that
brings him in.
The courts have not imposed rigid rules on investigative agencies
with respect to their behavior in establishing and running an under-
cover operation.
The courts, in fact, have been quite lenient and open in recognizing
that deceptions and stratagéins are necessary for the investigation of
particular types of crities.
The Department has, as a matter of policy, adopted three require-
ments that the courts do not mst upon. I think I know Direc-
for Webster thinks-that these three requirements are essential. I
think. and the Director thinks, that additional proposed requirements
are not ensible or reasonable.
The first requirement, the first sufeguard that we have imposed, is
that we should only initiate an undercover operation, we should only
use the undercover technique when We reasonably suspect that crim-
inal activity of 11 given type or pattern is occurring or is likely to occur.
Note how that relates to the entrapment defense. The particular
type of activity we have to have some reason to believe is taking place
out there. That's what plugs US in to the charter, I believe, Mr.
Edwards.
If we open # storefront feneing operation. we do so based on some
kind of reasonable indication that theft and the sale of stolen property
146
is taking place in the area, and could be effectively detected and prose-
ented through the use of the technique.
When a courageous FBI agent named Walter Orrell was sent on a
detail to the Bronx in 1976 to pose No the operator of a new zarbage
collection business, and to seek out customers, it was done based on
an urgent suspicion that extortionate practices were occurring in the
refuse collection business.
Sure enough, someone caHHe soon and threatened to best him up,
Areatened to throw him OUR the window. That's the first requirement;
that we have If reasonable busis for believing Unit type of activity is
going on, the type of activity the undercover investigation is designed
to get at.
We do not impose any rigid requirement that we know the par-
ticular indivatuals involved in the pattern of criminal conduct before
we begin use of the undercover technique, This 2005 to the questions
Mr. Seiberling was asking in advance.
Sometimes we can know the individuals who are likely to be in-
volved and check out whether they are involved or not. On other
occasions, It plainly makes no sense it we set up a warehouse in Boston
to buy hijacked goods, we shouldn't have to know in advance who
will come into it and who won't come into it. That shouldn't be neces-
sary, and isn't necessary,
What substitutes, if you think about it hard, for probable cause in
that type of situation, what substitutes for knowing who's likely to
be sucked into an undercover operation is the fact that the operation
is self-selective. People don't come to our warehouse in Boston unless
they have selected themselves to take part in that hijacking fencing
scheme.
That requires. however, at second step, which is a second safeguard,
and it brings up questions that the chairman has raised.
1 am not saving that we have always done each of these things
perfectly. I am saying that I think we know what the right direction
here is to go.
The second safeguard requirement is that we have to be very clear
about what the nature of the illegal transaction is, that we are inviting
people to participate in. If people are going to self-select, and if the
self-selection is going to be a substitute for knowing anything about
them they ought to know what they are self-selecting themselves for.
If it's going to be a corrupt transaction, they ought to know that.
If it's going to be R mugging in Central Park, they ought to know
that.
One example of self-selection is an investigation we conducted in
Pontine, Mich. several years ago where an undercover agent posed
as an individual interested in starting a numbers operation. He soon
was approached be 11 local union official who said that police protection
would be required for the operation, and who thereafter brought
several interested police officers to see the undercover agent.
Of course, we had no basis for investigating the police before that.
Until that approach, we had not focused the investigation on official
corruption, or suspected that particular police officials were corrupt.
Still, it was proper when through of her contacts they were brought
to us.
The third major safeguard- the first is that we know there is some
activity out there. The second is that we make our own activities
147
unequivocal in terms of what we expect the person who might get
sucked into the operation to do.
The third is that we make, we model the transaction, the undercover
operation, whether it be a mugging in the park or 8 drug deal or a
corruption sting or a hijacking sting, ILS much as possible after reality,
to the best of our ability. That we don't offer inducements T promises
or attractiveness that the real world doesn't offer.
That, of course, makes sense, because the crooks won't believe us
if we don't model our transactions after reality: but it is also 8 guar-
antee of fairness, because n means that anybody who is brought in,
is brought in with the same type of temptation that we know is
floating out there.
The know that because we will not start an operation unless we
have reason to believe that 8 particular type of activity is going on
out there. Then we unequivocally model our activity, our temptations,
on the real world.
From there on, it is n combination of self-selection and what we
learn about individuals.
Let me move to the last two points very quickly.
INVESTIGATION
1 personally believe that the undercover technique compares very
favorably in terms of the mandate of this committee with other
investigative techniques. In terms of civil liberties and constitutional
rights, { think the undercover technique compares favorably not only
with electronic surveillance, but with searches, with compelled grand
jury testimony, with plea bargaining for evidence, with any of the
number of regular investigative techniques we use in the law enforce-
ment business.
Compare, for example, a situation in which an individual voluntarily
drives 11 truckload of stolen goods to a fence at a videot pe undercover
warehouse-that's how We arranged it in Operation Lobster-with
any of the following law enforcement methods:
A search under a judicial warrant of a home or business which is
carried out against the will of the owners. Searching the house of
people we think are hijackers. Much more intrusive; reaches the
family, reaches people who have nothing to do with the crime. Not
true when the man drives into our warehouse.
Grand jury or trial testimony compelled against friends and associ-
ates, or even relatives, bringing in the best friend of someone we think
is a hijacker and requiring that person to testify-girlfriend, boy-
friend.
We have a rule that we self-impose that we won't go for immediate
family members because it's too harsh. It's legal, but we don't do it.
But, friends, yes; girlfriends, boyfriends, yes.
No compulsion, no pressure. no tearing people apart by loyalty, and
no putting someone in a position where they have to testify at risk of
having their legs broken, for having testified.
Instead, a truckdriver driving a load ci goods into a warehouse
where his only complaint is that he was deceived into thinking it was
8 crooked operation, and it's really us.
A grand jury subpena for voluminous documents, physical evidence,
or books and records; again compelling peoplé, disrupting their lives.
148
We have to do it. We do do it. Investigations penetrate secrecy; not
necessary when N. true kdriver drives into our warehouse.
Court-authorized electronic interreptions of private conversations,
intrusions of the suft that we don't have to do with undercover
operations.
My point is very simple, I think in Name of civil rights and civil
liberties, as well as In terms od undercover is a very
desirable 101m of operation.
I haven't even metationed the net that is 11 name if you only convict
the guilty and don't convict the mineen. A titulal investigation
undercover increases the already men probituities that nan is what
will result.
Let nie close just by signing is word about this, about 1 question
that may lie somewhere in the to kground. I- there anything different
when the investization goes to public corruption, when 12 2008 into
bribery of electrical inspectors, which we have done in Charge Or
bribery of If State legislator, which was-done IN Battimore: Or it goes
to a cortript policeman in Potitier. Maid Or in Federal als, such
as HII INS official? Or to Members of Congress!
Well, the answer 34 THE Hiere :- something different, and the answer
is no, in the long BILL we shouldn't theat theni very differently.
It would, of course, be infolentile if invest zations were motivated
by partsan or political considerations. 1: world simply the extremely
destructive, the things destructive thing you chuld have of democracy
in the country,
That means that every investigation that goes into the political
area, State, local, Federal, has to be guaratized not to be turgeting
any individual on the busis of his OF her votuiz stance, postical party,
anything else.
What we do target on, what we can tatel 011, is either prior infor-
mation. which was true Ht the Baltimore State legislator ONE, or self-
selection. which was true in the rase of the Pontine, Mich. police
officer. Never in terms of whom we want, because we don't want
anybody.
As # matter of fact, there is R sense-and I want to mention it, in
which Judge Webster and I would sit and breathe N sigh of relief in
an investigation when we fuiled to get somebody. We don't want
anybody. He just want to be sure that we don't duck or step back.
At the same time: while We have to be careful that We are not dis-
torting the political process, picking on people for political reasons or
engageng in undercover operations that hight result Ift # legislative
act, in the changed behavior of a local city counerl or the State legis-
lature or the Federal Congress, We have to contrue to take extremely
seriously the problem of public corruption.
It is 1 high priority with ns. There are two reasons for it:
One IS the same respect for institutions that we threaten when we
bring one of these investigations, when they result in cases, will be
far more seriously threatened if all of us doin't make a major effort to
make dangerous, unpopular, unwise, any form of public corruption at
any level.
The second is many forms of illegal transactions can't take place
without at least local or State of Federal administrative public cor-
ruption. If we want to stop them, we have to be interested in stepping
the corruption, 100.
149
Now, the thing that makes political cases most difficult to conduct,
the reason why we have to treat them a little bit differently. is the
reputation of elected politicians and maybe of appointed. 100, are
their lives. It's my life, my reputation: and it's your life, your
reputations.
But in any investigation, those reputations NTC ON the line. The
renson why we can deny undereover wherever it core to # question
of public corruption is twofold:
One: That repatations of political ligures defend or appended are
on the line, whether we 11-0 undereover or not. They sue THE the litis
whenever we start receiving information from crinks who all often
wrong and sometimes right.
The other reason. is because there is precentally BH other way the
investigate charges of bribery and bribery 3 g impuely political
crime. We con't 401 investigate systematic bribery sections
inspectors in Inenzo withing come out there and effermed briths.
The reason is quite simple: Bribery takes place in = one-on-bras
situation. and it generally takes place Between # somewhed correption
ble latter and at somewliar reparable officed. executive or
local. State. or Federal.
We have to be $ participant in the has N2 heard
that such transactions were geme one having minde 1415 expiration
Its like those transactions its possible. and R+ unequityou.) possible,
if we are going to investigate públic corruption.
Thank you For ENTIME me DO much time, Mr. Charnen.
Mr. EDW ARDS. Thank you; Mr. Heymon.
We will be operating in the question-and-answer period strictly
according to the 5-minute rule.
The Chair recognizes the centleman from New harman
Rodino.
Chairman Robiso. Thank you very much. Mr. Charman.
Mr. Webster and Mr. Heymann, I want to commens you for
your statements, and I beheve that you have given US the kind of
information which IS young to be useful.
However, I do not believe that III this one hearing we are going
to be able to dispose of some of the questions that at inst I have,
and Pm sure many other members have. which eause US the concerns
that I think were very eloquently expressed by Mr. Seiberling.
I might staff off by saving that all of us appland your efforts III
attempting to get at white-collar crime, which think all 100 frequently
has been ignored and has been. I think, one of the greater burdens We
have had on society. I think it has gone undetected probably because
it hasn't been addressed ID it should have BPPIL We applied your
efforts in that area and in the public corruption area particularly
because of the indifference of the public to public officials. and the
mistrust, and the climate after Watergate. All of HS are aware and
applaud your efforts in that direction.
Again, though. what does bother me is that there would be carefully
erafted guidelines in these areas in order to prevent intrustons unto
civil liberties. Those of HS may differ as to what these and libertas
are. and WT may recite Supreme Court cases on how there latirade,
but I think we're got to be very careful here. I think that If funds-
mental to our democracy.
150.
And Director, in your statement, and again when you were being
interviewed on television by Mr. Curl Rowan, in answer to his state-
ment that he thought that what troubles people is they don't know
whetl er you're going out huring people, you sinded
I don't believe We are Inring peripter We are creating 11 setting in which those
who are predispose of to eriminal activity find it CONTE steat.
Now, you have set out, and Mr. Heymann has set out, some of the
requirements in some of the undercover operations. But who decides
this predisposition? Is this predisposition not a state of mind? Is this
predisposition not something that someone is going to make a deter-
mination about? And based on what?
Now you have stated that there are certain requirements, but it
still seems to me that we organally talked about criminal conduct and
criminal activity. and all I have heard through the arguments has
been that there IS reasonable groups to believe that there is this
criminal activity. We know that in some of the Sting operations, the
crimes are already committed.
Yet in some of the cases that were reported in the newspapers
recently involving public officies. there Invent been any criminal
activity. It seems to me that the setting WNS such as though we were
finding out whether some could Be lared who might be predisposed.
Now it's pretty difficult for me to accept that because somebody is
making a determination as to what the attitude or what the willing-
ness of 11 person might be who has never been involved in any corrupt
activity. You are relying totally on purveyors or informers who them-
selves are subject to great question as to whether or not they are
reliable.
Now who makes that determination about the predisposition? And
can you tell me whether your emalelines are going to be able to deal
with this with such care and specificity that you won't be involving
innocent people. You are going to be responsible for the leaks, 100,
because you set the whole thing in motion, and unfortunately damaged
reputations of the very people whom you do not want to damage.
In any event, Pd like to know, Mr. Webster, just how you answer
that.
Mr. WEBSTER. Chairman Rodino, I have already in my statement
expressed my disapproval and my distriay at the leaks. It has not yet
been determined who IS responsible for them, but certainly there is no
institutional responsibility for these leaks in terms of purposeful
leaking, and 1 hepe very much Hall we arrive at an early date at n
resolution of that question.
I think it is significant that with the number of long-term investi-
gations that we have underway ID our undercover capacity, this is
the only instance of 11 wholesale leaking.
We will try to improve that. We will do the very best we can, but
other investigations result in leuks. There isn't enything endemic
about undercover operations being leak prone. except that they, like
other investigations, frequently extend over 01 substantial period of
time.
Chairman Ronrno. But: Director. those leaks show, at least from
what 1 have been able to reach that in some of the undercover opera-
tions. the so-celled predisposition either did not exist, or what you
based it on, I don't know.
151
Mr. WEBSTER. Well, you're asking me, and I know we all have
agreed, and 1 have heard the public statements of Congressmen, and
you have read mine. we should not be talking about the specifics
of the Abscan investigation. That is going through the grand jury
process at the present time.
What is in the papers may OF may not be correct, or may or may
not be complete. can tell you that it is not complete.
To simply explore the fact situations of certain individuals who
were not indicted, without an overall examination of the entre grand
jury process and triel process. and the evidence that comes out in the
trial, to me would be an abrocation of your oversight respon-dilitities,
and I know you are not going to do that
Chairman RODINO. Well, Pm not zome to de that. Pm not referring
to those cases. m-referring to some cases that were leaked that you
yourself, the Department, has stated that these people were not the
target or subject of any investigation.
Mr. WEBSTER. In any type of investigation that involves lenks,
whether it's undercover or overt, We are going to be interviewing,
reviewing files of individuals, and uniny of those leads will prove to be
of no value, or an absence of criminality. But all of them are b sed upon
allegations, and We have historically had the province of are the
reliability of these ellegations.
Now, in terms of predisposition, predisposition is M ter that is
applicable to the defense of entrapment. That is offered by omeone
who admits his girlt, it, but says he wouldn't have done it Except for
being overreached and persuaded against his will to do something.
Predisposition R not the eriteria for the instigation of 11 criminal
investigation. I sand in my statement that we try to create .1 setting
in which those who are predisposed will come. because we are not
interested in having it whole bunch of people come III and be screened
out.
As 11 matter of fact, I think it will show when this one investigation
comes through how few indeed met that criteria. And, is Mr. Heymann
pointed out, not only do we try to go on the basis of the information
that we have where emiminality is indicated or alleged, but also in the
setting itself, we take extra precautions to be sure that anyone who
manages to come into that situation not predisposed, is quickly made
aware of the situation. so that he 3.5 in no doub: as 10 what he is doing.
And, in fact. the reports Hunt Congressman Sederling and you made
reference to about the Senator, 1 think. when the facts are known
you will have 1111 indication of the procedures that we put In place.
Because the effort was to be certain that no one was being trapped.
There would be no way in which the defense of entrapment could be
successfully raised and, in fact, again, I point out to you we are putting
ourselves on those tapes, as well US the individuals under investigation,
and those tapes are going to be before the court. and we know that if we
misbehave, the record will he there in technicator or black and white,
at least, for all the court and the jury to observe.
Mr. EDWARDS. Your time has expired.
Chairman RODINO. Thank you.
Mr. EDWARDS. The gentleman from Hinois, Mr. Hyde.
Mr. HYPE. Thank you, Mr. Chairman.
152
Mr. Heymann, on page 24 of your statement, you sand:
if AT and sati-fied of the individuals eximinal interest. than we cannot
and will n/At shirk OUR responsibility to distime the invistication and to proce-
euce, If warranted. regulation of New promises 3 powerful way be
Now you told us about the investiga ON of electriest inspectors in
Chicago: Tell me seam why you didn't investigate and prosecute
Dr. Peter Bourne in the White House
Mr. HEYMANY Pm wondering for minute, Mr. Havie, whether
it's appropriate for me to MY anviloing about that OF not.
Mr. HYDE Well, excuse me. Mr. Redina is objecting to the ques-
tion, and Mr. Edwards is ingrewing To the objection. 0344 I don't want
to einbarrass anybody, sea 1 will withdriew the question.
Mr. HEYMANN There 15 11 simple and the simple answer,
to the best of my knowledge, is that TO one IS proser Ried for sumilar
behavior. and that ought 10 apply 10 political figures, TOTAL
Incidentidly, # principle that RNT stares may for one in my
position to maintain. it's casy, MS you continuent j think, sonse
nowadays for someone NV III position in say here on shead and
prosecute a political future. Alministrative, executive 00 legislative,
State or Feviered.
It's hand to SILE let's not presente N political figure who may or
may not have technically violated the how IN a situation where no one
else would be prosecuted. That's the category that visitent believe the
Bourne matter IS in.
Mr. HAME Well, if that's so, that's fine. If that wash't a viola-
tion---
Mr. HEYMANN. It's not a matter of -wing it's not a violation.
Whether it Was or not. it's # matter of saving there are situations
where no one the would be prosecuted. and I believe in those SILIA-
tions, even if & polition there has violated the hav. he or she should
not be prosepted where 110 one else would be, simply because they
are political have
Mr. HYDE Well, you our understand the sensitivity 11 Republican
could have to It station like that, having endured the mudbath of
Waterzate.
Let me ask you mother question: Now the media has reported that
the Justice Department considers two of the Aliman cases work. Are
you checking to spp who nicite that evaluation and how that leiked?
In other words, if AVD were work, then SIX are strong IS that part
of your investigation?
Mr. HEYMANN. The answer 10 that is no. Mr. Hyde. There are
some leaks that seem to me to just sitilary belong to milly season"
and we have entered silly season I only 5 extremely badly about
leaks when they bear on the reputation of particular individuals. When
they are simply silly season leaks. I am HOS worried about them.
Mr. HYDE. I am & great believer in undercover operations, and I
would respectfully suggest 11 sting operation to eatch your leukage.
Mr. HEYMANN. It was indeed suggested to me seriously as part of
the leak investige
Mr. HYDE. There was a fascinating letter in the Will Street Journal
of February 14 by a professor at a theological seminary. He quoted the
153
Old Testament. He quoted Leviticus, chapter 19, verse 14: "Do not
put a stumblingblock before the blind."
And he said this means don't offer a Nazarite. who is prohibited
from drinking wine, a glass of wine.
Now those in Congress and public officials have taken an oath
freely to be the equivalent of teetotalers when it comes to corrupt
money. You don't see anything unjust in tolerating circumstances
where a public official is offered corrupt money, do you?
Mr. HEYMANN. I regard the situation, Mr. Hyde, of offering a public
official corrupt money with no predicate out there at all, no reason
for it, no operation suggesting it to us from the outside world, as right
on the line. It is plainly legal, it seems to me
It seems to me not unfair by the standards of things that we de
daily in the criminal business to expect an electrical inspector, a city
councilman, a major, 11 Governor, a Congressman, or an assistant
attorney general, to turn down what is plainly It bribe. It is not some-
thing that we have to be terribly concerned that people should accept
by mistake.
On the other hand, I believe that there should be either 11 reasonable
system of self-selection or SQ1HP basis for going forward. We are not in
the business of testing morality.
Mr. HYDE. I understand that.
May I ask you this, without compromising the present investiga-
tion: Can you tell us how the particular Congressmen who were in-
volved were selected? Or were they self-selected?
Mr. HEYMANN. Well, the only thing I can say is what 1 have said
before, and 1 am sure the Director has said before. and that is to the
best of our knowledge. no one in the Federal Government or working
for the Federal Government picked any of the individuals.
Mr. HYDE. Is the proposed charter that we are dealing with broad
enough to cover an Abscam operation such as we are dealing with?
Mr. HEYMANN. The proposed charter brondly authorizes undercover
operations subject to guidelines promulgated by the Attorney General,
and it is my view that there is no, and should be no, special category of
undercover operations that go to public integrity questions.
Therefore, my answer would be yes.
Mr. HYDE. Thank you. My time is up.
Mr. EDWARDS. The centleman from Wisconsin, Mr. Kustenmeter.
Mr. KASTENMEIER: Thank you. Mr. Chairman. I. Too, would like to
commend the Director of the FBI and Assistant Attorney General
Heymann from the Criminal Division for many of the operations which
have been successful in bringing people to justice.
That the Director of the FBI, Judge Webster, is being honored to-
night by the recording industry probably is largely because of Mod-
soun, the operation which stopped record piracy.
1 take it, however, that these are relatively new operations, that at
least while there is a historical use of undercover agents, that one can
point to, the amount of resources dedicated to the more recent opera-
tions are a new kind. What we know about in terms of experience is
relatively little.
I take it by suggesting, Judge Webster, that you were forced to
discontinue 15 operations because von didn't have the resources, it is
not criticism of Congress, since I think you came and asked for S3
154
million, and were not in fact denied resources in order to pursue those
operations: were you?
Mr. WEBSTER, No. that's absolutely correct. That was not intended
as a complaint. but simply to indicate that the reason for the increased
request for the 1981 budget-
Mr. KASTENMEIER. To min some perspective, I think the year be-
fore, it was S1 million. end then $ million in the present year, and
84.8 million.
Mr. WERSTER. L think we're had $3 million for actually } years,
1978, 1979. 1980, S1 million first. and then three $3, and then 84.8
is requested this year.
Mr. KASTENMEIER. Which I believe suggests & Unear upward curve
regarding these operations and what is intended. and therefore I
think it is important for its to look at them.
In terms of the notorney and sensationalism that comes out of these
operations. and the possible mibility to prevent or manage the leaks, I
think obviously you have n problem. Evidently the press in the country
is going to look for these stories in the inture with even greater inten-
sity and interest. Therefore, I wonder whether you have the ability
to maintain the secrecy required to protect your operations and to pro-
teet those innocently involved.
Mr. WERSTER. I certainly hope that we do. because they are too
important to give up for that reason alone. It is very important to us
that the integrity of these investigations be maintained throughout,
and including the period of grand jury investigations and trial.
Of course. once there is a grand jury investigation, it is very difficult
for those matters to remain unobserved by an alert press and media.
Very often in today's investigative journalism. though, which has
come to the fore in the post-Watergate era, we find that investigative
journalists are working the same territory that we are working, 80 that
it comes as no great surprise to us to find that they are there and aware
of some of the things that we are doing.
We had early reports in the Abscam case in October of last year, or
in the fall, from a newspaper who is not mentioned in the current list
of those who had the stories at the time we were conducting our overt
interviews.
It will be 11 problem for us, and we are addressing it seriously, but,
again, I don't believe this is endemic to undercover operations other
than a premature exposure of one can endanger some of our agents.
Mr. KASTENMEIER. Well, actually. while apparently the Attorney
General was looking for the source of the lenk, someone in a high place,
either in the Bureau or in the Justice Department. had to also make a
decision to manage that leak by further briefings and official leaking.
If we are to look at the most recent operation, all the information
could not have all come from the original leak. It had to have been
that someone made a judgment at the top to make an arrangement
with the press whereby they are briefed. in return for which they were
to suppress presumably, the breaking of a case. Isn't that it?
Mr. WEBSTER. I have no knowledge of that. It is my personal view
that the one leak in the New York Times was S0 complete that there
must have been access to Government documents which would not
have necessitated any further briefing or clarification.
I might say that on January 30, which predated the weekend in
which we brought this operation down, we advised our field offices
155
that there appeared to to some press awareness of what we were doing,
and urged them to intensify their efforts to keep the thing under control.
On Sunday, when the New York Times article came through, and the
Washington Post article VIIS available to me at my home, 1 contacted
the Attorney General We discussed the situation, and Monday
morning. the Attorney General issued his statement ordering an
investigation.
I <ent that statement to the field. I nko sent a personal statement
on holding tight. The following week I sent still snother communi-
cation to the field, and 1 have publicly stated my views of the impact
of this type of leaking.
We don't know that it was us or some other group or agency or
employees. It is 11 problem. It it # problem that involves questions of
ethical restraints by the press, not legislation and not regulation, but
decisions
Mr. KASTENMEIER. Judge Webster. then you are "saying that
perhaps the Justice Department #1 % high level made a determination,
surely somebody did, to fully inform the press, NO that a premature
leak wouldn't take place. Is that not the ease?
Mr. WENSTER. Are you talking about before the interviews took
place on February 2?
Mr. KASTENMEIER. Yes.
Mr. WEBSTER. 1 am not aware of that. I have participated with the
highest officials in the Department of Justice in the closing down of the
operation, the covert phase of the operation. and I am not aware of
that. It certainly did not take place within the Bureau.
Mr. HEYMANN. I agree with whit Judge Webster said, Mr. Kasten-
meier. It's worth pointing out that the Attorney General, Judge
Webster. and I, plus a number of other people are by now under oath,
having promised to take polygraph tests us to all we know about any
of those leaks.
I was told that I was free to take the polygraph test or not, but I
was to know that Judge Webster had already agreed to take one. I
think it's called coercion.
Mr. EDWARDS. The gentleman from Ohio, Mr. Seiberling.
Mr. SLIBERLING. Thank you, Mr. Chairman.
Mr. Heymann, you pointed out nt some length the success of many
undercover operations. including feneing and other operations of that
sort. But I think if we're going to understand the issue that we are
dealing with here, we've got to understand this difference between
those types of operations and the one that we are talking about
right now.
It seems to me the difference between undercover fencing operations,
for example, where the individuals come in to fence the stolen goods,
and this operation, or the operations that we are involved in, are
considerable.
In the fencing operation, the person who brings in the goods has
already been involved in n crime or crimes, that of receiving stolen
goods. He is also self-selected by coming in on his own.
Now if you are going to analogize that to what has happened here,
if the FBI or its middlemen went to an individual ho had not stolen
or received stolen goods, and attempted to put some stolen goods into
his hand, and let him know that they were stolen, and then told him
156
where to go to fence them, directed him to the undercover fencing
operation, that would not be sell-selection in the same sense. That
would be FDI-sele tion of that individual, and indect it would be the
FBI attentiting to cotrupt that individual by, first of all getting him
to knowingly uccept stown cools, and second, to come and fence them.
Now that's the missings to this signation: and a quite different, I
think, from the ones Unit you describe. Am i concect in that?
Mr. HEYMANN. don't Hank M. Mr. Scherling,
Mr. STITERLING, Well, please explain in what way that isn't a
good employ,
Mr. HERMANN. Let me take it in the steps that I think you take it
in. Mr. Seiberling.
First of all, there sre obviously many perfectly proper Stine under-
corer operat ons where we have NO (or believing the individual
has streetly comun Cied & ertite We Realing property. When a police-
man CRPS out in Fentral Park: dressed Eke R Title old lady and gets
integred, he they 2017 named by R new ser or un experienced
muster. I hope the bay of New York will arrest and pro-ecute in
either event.
The SHIP N true even when you think about It in 11 hijacking sting
type operation: I: world be nice to protent that the hijacked goods
have ciready been b meked at the time that we set up our sting
operation. but WP ran the state operation-we non the one in Boston
for about IS months. The fact of the matter is, people are going out
and hijacking goods, and then branging them to 118, knowing all the
while
Mr. SEIBERLING. May I ask you, are there any such operations where
the FBI first put the stolen goods II. the hands of the individual who
came in later?
Mr. HEYMANN. No. No operation that I know of, including this
one.
Mr. SEIBERLING. Yet that's what the FBI did in this case, ap-
parently, in trying to get individuals to accept bribes.
Mr. HEYMANN. There is 8 major difference, Mr. Seiberling, and
that is we have no agent going out and making contact, and I am going
to drift off in the general, because I don't want to bilk about the
Abscata investigation. i know of no case where an agent has gone out
and tried to persuade a political figure to take a bribe, which would be
the equivalent of teying to persuade him to take stolen goods.
Having smil that RIN If little bit worried about it, because there
is 11 reported case. attirmed without any difficulty by the courts, some-
thing called / wite of States V. Student, where an agent did offer 11 State
legislator money, having reuson to believe that the State legislator
had previously solicited money.
The situation that I think-the reason that 1 think you are picturing
a situation, Mr. Seiberling, that doesn't correspond to what we have
in mind is that W/ have Federal agents going out and contacting
individuals and not connected in any way with the Federal Govern-
ment. and with their friends and a-sociates who deal for them, and who
are themselves not connected in any way with the Federal Govern-
ment, conduct these operations.
If we are talking about-il we have an organized crime operation,
where a big organized crime figure is in the business of demanding
157
kickbacks, and if everybody knows that, and if he has friends and
associates who go out, who radiate ont from him and nsk for kickbacks
which eventually 20 to him, OME contact with these friends and assori-
ates is not foreing kickbacks on the organized crume figure.
It is only if the agent goes there and does 11 lot of fancy talking,
somebody will be responsible for 11, if they 20 and do a for of fathey
talking and inducing Then you've got a signation like the one you
described where stolen goods are put into sometions Initids
He don't have N situation where we have num agents doing If lot of
fancy talking and convincing.
Mr. SEIBERLING My time has expired.
Mr. Enw ARDS. The zentleman Massarlersetts, Mr. Drinkn.
Mr. DRINAN. Thank you, Mr. Churman.
IN like to explore the concept 01 middlemen, These are these very
mysterious characters, and the head of the FIN himself savs:
"The middlemen, of course, ate not under were control." Yes he lins
total control of this total operation. Well, who who these maidl-men?
Are they informants? Are they paid?
The Director also says that the middlemen. of course. do not know
that they are dealing with the FBL Well, where do these middlemen
come from, and how accurate is their information?
Mr. WEBSTER. Compressimin Drinan, I may have slipped into using
the word middleman just as-
Mr. DRINAN. It's crucial in your testimony.
Mr. WEBSTER. Yes I've used it. FIll stand by it.
Mr. DRINAN It's very vague, and it makes the atatined about the
whole program, when you shifted the focus from informants to middle-
men. Who are these middlenien?
Mr. WEBSTER. I'll be glad to answer Unit. Pa say the use of the
middlemen may create, as it has with you, a different perception than
we have of what this person is.
Very simply, the middleman is a subject of investigation, a target
of prosecution. In the Abscam case, we started in stelen artwork.
That investigation has already vielded over $1 million in actual recov-
eries. It took us through a chnin, the same people who were bringing
us thieves became involved in bringing us influence, people who were
willing to sell their office.
Now, whether it's it city or State-and we dul, we followed it
through. Corruption at the muscipal level. and then at the State
level, and then finally the same people who were the subject of our
investigation.
Mr. DRINAN. These are the middlemen?
Mr. WEBSTER. The middlemen.
Mr. DRINAN. Why are they the middlemen? Between whom are
they?
Mr. WEBSTER. They are the influence peddlers. those who make it
their business to deal with Congressmen willing 10 sell their office.
Mr. DRINAN. These are the crooks that you are after originally,
and now the whole thing has gotten away from art, and into politi-
cians, so you have taken the middlemen, who are allegedly crooks,
known crooks, and you accept their information about Congressmen.
Is that what you are saying?
Mr. WEBSTER. I'm saving that in the criminal world many of our
informants have been living criminal lives, but that does not take
away the reliability of their information.
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