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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 (4 of 4)
Box: 1
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158
It is only by getting close to these that we can reach bevond the
streets and get out to the place where the influence and the other
illegality is takins place.
Mr. DRINAN. Well, do the middlemen graduate into informers? Pm
still confused about the middlemen.
Mr. WERSTER. No. 110. They do not graduate into informants.
We occasionally have informants who lead us to middlemen, but the
middlennan- let's just call him the subject of investigation.
Mr. DRINAN. All right. has the suspect. and all of it sudden now,
he's the one that's leadure Vey away from EN theft into alleged political
corruption. and you rely spon them, when you say they are not under
your control at all?
Mr. WEBSTER. He doesn' know that he's dealing with the FBI
OF law enforcement agency. He believes beln dealing with somebody
he enther can ripott or take money from in :: criminal sense.
Mr. brinan. And who decides now on the predisposition, the
question earlier that Mr. Roding asked. dest really wash unswered?
The middleman comes to one 143 your informants or agent. and says,
of think this public official this a prefisposition." Someone at the
Department of Justice or the FBI has TO sit in judgment and say,
"Yeak, W7 beheve this middleman and We re young to move on this."
Now by what norm IS that mide?
Mr. WEBSTER. He doesn't ordenarily SAY somebody has a predis-
position. He's probably 11 little more candid about that He's apt to
represent to us that he IS in his pocket or he is in his stable, OF that he
is known to have done this for some period of time, or he can be had.
There are a variety of ways that these things are expressed in cri-
minal terminology by one crummal dealing with someone that he
thinks is equally unsavory, So that we have the information. Then
within the time construnts that we have We can run our own check
and see whether there is any reason to beheve it's rehable or not
reliable: And we do this.
We don't 150 out in the neighborhood and ask, "What's the general
reputation of that person?" But We see whether there is any basis for
it.
In the particular case, you in part demonstrate your reliability by
producing, and these people produced, and they produced under
circumstances that : court can adjudicate in the future, and .I don't
think we should talk about that.
We (ry within the guidelines that We have and in the point of time
in which someone. some new person. IS coming into the conspiracy
or coming into the plan or the deal: to make -ure before we cause him
to commit an act which he would not otherwise commit. such us the
acceptance of a bribe. to understand in the clearest of terms what is
happening, and to make them cheit the promises in exchange for the
office and the influence of the office, before any money passes.
Mr. DRINAN. Well, Mr. Webster, that's not # very satisfactory
conclusion, birt before my time is up, Prof. Gary Marx of MIT has
written a very thoughtful article that the Members have here, where
he gives evidence that undercover operations actually increase crime.
He has statistics here where there is 11 stimulant for theft from the
sting operation, and where in one instance the DEA paid up to $400
over the ongoing price per ounce of cocume, and that apparently.
increased the traific in cocaine.
159
Would you like to make any observation on the evidence-and I
think it's growing evidence-that actually the undercover operation
stimulates crime in certain areas?
Mr. WEBSTER. I'm not privy to that article, or the facts that are
set forth in it. Mr. Heymann earlier mentioned that we try not to
create a setting which is unteal to the alleged cruminal or person about
to commit a criminal act.
Now, that's one benchmark of protection that we can take: As I
look at the undercover operations conducted by the Bureau, I see no
basis for saying that these operations contribute to crime.
In the Lobster case, for instance, Operation Lobster in Boston.
where we had such enormous hijar king of trucks and operations up in
your part of the world, Congressman Driman, that when We brought
the Operation Lobster down, there wasn't another hijacking for whit
was it, 6 months?
Mr. HEYMANN. It's been about 6 months.
Mr. WEBSTER. It had It very deterring effect on crime.
Mr. HEYMANN. Could I SILV a word in response to you. Congressman
Drinan? On your hist question, 1 would suppose that for a period of
time. and we could actually check it: it's rare, but We could probably
check this-1 would suppose that for a period of time there were
fractionally more hijackings in Boston because we were buving goods
and they didn't have to take them to New York, and then " very
substantial reduction to nothing thereafter.
The total effect would be 11 substantial reduction in hijacking.
On your question to Judge Webster on who finds predisposition, I
think the answer IS that though we will try to check before an offer
is made to anyone, there is no requirement that we find predisposition
in advance of making an offer in any undercover operation. Now we
are not talking about political us opposed to something else, and the
reason for that is because the only harm that the recupient of the offer
is exposed to is the harm of being made an illicit offer
Now I don't mean to say that's nothing, because it has serious
consequences. You don't know how you would react, you don't know
whether you would call the police or not. It is difficult, but the harm
is not a harm like having your house searched or your phone listened
to, or being called to give testimony.
The only harm is that someone makes you an illieit offer, and for
that reason, the courts have never required us to find in advance
predisposition. And although, as Judge Webster said, we might to try
and we will try, there are situations in which we can't-1 think you
people would agree we should not-if we are running an undercover
liquor operation in Iowa and a crook of unknown reliability, of unre-
liubility, comes up to us and MIVS, "There is 11 police captain here who
wants to sell you protection." I think that we ought to say, "Bring in
the police captain."
Now, that doesn't mean to do anything except that if a crook says
to us, a crook totally unrehable suys, "A police captain wants to sell
protection, he regularly sells protection to burs here." I think we
ought to say, "Bring him in."
But we ought to make sure then that the transaction is unequivo-
cally clear, and if he tries to sell protection, arrest him.
Mr. EDWARDS. Your time has expired.
160
The centleman from Missouri, Mr. Volkmer?
Mr. VOLKMER. Thank you. Mr. Churman. Pd like to get back to
that subject that the gentleman from Wisconsin and I discussed, and
I think it is very important to US to make a decision on it eventually,
and 1 believe you mentioned. Director Webster, that without the
$4.8 million for fiscal 1981, you would not be able to continue some of
your operations, and they had to be prematurely terminated.
Now 1 AM not going to nsk you-specifically as to any specific
operations. but what 1 want to know 15. is the increase meant to
continue only on existing operations, or also to start up new operations
us well?
Mr. WEBSTER. We have 8 number of proposals for new operations
that have gone through or have been going through the Undercover
Activity Review Committee process. The operations are not static,
they do close down, and new ones are started as we go along.
The 15 I mentioned were those that we terminated in order to stay
within, NS best we could, our tinancial constraints, and we did exceed
the 83 million by-1 think it's $310,000:
Mr. VOLKMER. Well, this has been approved by the Budget Office;
is that correct?
Mr. WERSTER. By our Budget Office?
Mr. VOLKMER. They have approved this 84.8 million?
Mr. WEBSTER. $4.8 million?
Mr. VOLKMER. Yes,
Mr. WEBSTER. Yes: I understand it's approved, all the way up
through OMB.
Mr. VOLKMER. So there HTo IL lot of people who agree with us, as I
do, that there is a positive use of these funds in combating crime in
this country, and I just want to tell you right now that I am in support
of the full amount.
The other thing I'd like to ask about is in the charter, you mentioned
also that during the process of effecting the guidelines in this area, do
you have a timeframe which you feel you will be able to have 11 final
draft on those guidelines?
Mr. WEBSTER. We are coming right along. I would have been
happy-1 know Mr. Heymann would have been happy-if we could
have said to you we already have them. We have been working on n
document-
Mr. VOLKMER. Well, we're still working on the charter, SO there is
no big hurry to get the guidelines.
Mr. WEBSTER. Well, the reason we are in IL hurry is because I have
been trying to bring the Bureau within the charter in every respect,
and when these guidelines are ready, the Attorney General is going to
promulgate them, with or without 11 charter.
We are very pleased with them. We've got about four or five minor
areas that didn't take something into account, or did take something
into account the wrong way, and we are working it out.
I am very optimistic about It. I am very pleased with the progress.
Mr. VOLKMER. Will I be able to receive a copy of those guidelines?
Mr. WEBSTER. You are saying when we are finished?
Mr. VOLKMER. When you are completed.
Mr. WEBSTER. Yes. I don't think there is anything confidential
in these guidelines, any techniques.
161
Mr. HEYMANN. I think there is no problem there, Mr. Volkmer.
Mr. VOLKMER. Thank you very much. I yield back the balance of
my time,
Mr. WEBSTER. I think you are comg to have 8 chance to look at
these in your oversight responsibility.
Mr. EDWARDS. Mr. Hyde.
Mr. HYDE. I thank the chairman for yickling Very briefly, for R
few seconds, I want to address a comment to Mr. Hevmann. Despite
my first question, I want the record crystal clear that minimum have total con-
fidence in the competence and the willingness of the tustice Department
to fully and fairly prosente public corruption cases. Your actions in
the Diggs case, in the Eilberg case, in the Flood FIRST, indicate to me
that you will prosecute all of these things without feat or Invor.
I genuinely am curious about the one case I inventioned earlier, hmt
I didn't want to leave the wrong implication. I have total confidence in
the Justice Department.
Mr. HEYMANN. Thank you, Mr. Hede:
Mr. EDWARDS. The testiniony of both the withesses was very
positive.
From your testimony, Judge Webster and Mr. Heymann. one
would thin : that all of thrise operations had worked only beautifully,
and SO why don't you tell US R bitle bit about an operation or two
that has been 11 disaster?
For instance, Front Load in New York, fiene much is that soing
to cost the taxpayers?
Mr. WEBSTER. I think it a little hit premiture to make assessments
about Front Load. That WAS an operation that preduted the Under-
cover Activity Review Committee. There are circumstances about
that case that lead me to feel that We don't have too much apologizing
to do for it.
It was an insurance case undercover program designed to discover
fraud in the insurance field. it has 8 legitimate objective. We en-
countered an errant informant, not 80 undercover agent, hut an
informant, who went off on his own under curcumstances that will
be reviewed in the course of Rtigation, I am sure. If your have not already
briefed the committee, we can certainly do SO.
I understand that the first please of litigation resulted in favor to
the Government. I am quite optimistic that there will not be a major
expense to the Government.
It was unfortunate. Ii Was at good program. It Wills Hawed, and I
believe that under our policy, one that I mentioned III my statement
this morning, that what went wrong there would not have occurred.
Now, Mr. Chairman, I don't want to represent, and I said we don't
have perfection in the investigation-I don't WHIT to represent that
we aren't going to make some mistakes. It's a little like the loan busi-
ness; if we don't make some mistakes, we are really not in business.
But the important thing is that we minimize those mistakes, that you
be satisfied as our oversight committee with the procedures that we
have in place, and that you be satisfied that when We do make mistukes,
we do something to see that those mistakes don't recur.
Mr. EDWARDS. Well, I believe that the gentleman from Massa-
chusetts put his finger on the problem I don't think we have resolved
yet, and that is the problem of these free-floating purveyers, multle-
men, or whatever they might be, often of dubious reputation, some-
times hoodlums who, while not working for the FB1, are certainly
162
working with the FBI, because they are the ones who bring cut the
leads. They are the ones who finger people. How do you control them?
What devices do you have for auditing their activities? In our private
conversations, we made it very clear, the chairman and 1, that a
number of innocent people have been damaged very severely by these
operators, by these indilemen.
Tell us what you are HOUSE to do in the future about controlling
their activities so that other Americans aren't severely damaged.
Mr. WERSTER. givens 1 would have to put uside the issue of the
damage, because that assessment is not in, and I don't want to
appear to be agreeing to II, but I do recognize that influence peddlers,
those who sometimes really have the capability and sometimes were
con men, do a great dest (r) damage.
They HIP already doing A great deal of damage, and they are the
people who onlise or induce public officials to sell their office and
breach their public trust, and they KP the principal menace in пот-
roboration and collaboration with these who are willing to go along
with their III
We are interested in them No subjects of investigation, and We in-
tend, when we investigate their, to develop evidence for their prose-
cution. and we 40. and we will.
To the extent that they make representations, you might be inter-
ested to know that the executive branch IS not immune from the same
types of representations by middlemen no to the amount of influence
they peddite, and WT investigate the executive branch just us vistor-
ously as we do legislators whom these people represent are in their
stable.
I don't think it's incumbent on HS in an undereover operation to
demand some type of specific proof of prior illegal activity by those
that these people my they have in their stable, I don't see that at all.
That would be inconsistent with the secnario of undercover. They
don't know that they are dealing with the FBL They are not under our
control, nor do they think they are under our control.
What We do try to do is identify the con men who are misleading
HIS in the attempt to np off whatever cover our undercover agent is
functioning under. and to Heal out those operatives, if they are not in
fact engaging in illegal activity.
In the Abscam case, again without trying to get into facts, there
were influence pedders-and there was a chain of them, one led to
another, there were others who introduced them. They were told con-
sistently not to bring anyone to the undercover agent. unless that
person Was prepared up Iront to make promises which would in IL legal
sense violate their trust.
We don't express it, obviously, to the middlemen in that sense,
but unless they were prepared to make these statements and assurances
up front, and to take the money personally, so that there could be no
opportunity for the middlemen. or at least minimized opportunity
for the middlemen to mislead the public official as to the purpose of
that visit.
Now, in at least one. mid maybe two, cases, that's exactly what
happened. But step two, which We instituted to control the operation.
was that in our handling of the situation. it Was made clear to the in-
dividuals that it was a criminal activity. OF at least an netivity which
that person could not in good conscience participate in, and he walked
out, and that's exactly what we intended.
163
So we had two things in place there:
One, don't bring 116 anybody who isn't prepared to be up front with
us: and two. if he comes, then it was our purpose and plan to make sure
before any money was passed to that person, that he understood the
criminal nature of the situation and that W de process was monitored
by U.S. attorneys watching the process and in It position to ent it of
if at any time our agent exceeded the bounds we had set for them.
Mr. EDWARDS. Well. we will continue to have a dialogue on this sub-
ject of these middlemen. They are of great concern to the subcom-
mittee.
Mr. WEBSTER. Of course, they are
Mr. EDWARDS. And 1 em personally not satisfied that some of them
at least are not ont of control and have been triggered by the FBI to
go on capers of their OWN with the result that innocent people are
injured.
My time is up, and / vield to the gentleman from New Jersey.
Chairman RODINO. Thank you very much for yielding.
Director. am intrizued by the bist satement you minle concerning
the so-called middlemen or purveyors. It seems to me that if you review
the statement you made, and I seem to recall it very clearly, you talk
about the middlemen bringing in someone who they SAN IS prepared
to engage in criminal conduct, to necept money.
Now I think you ought to reflect on the cases that you have had
before you. If you place that kind of reliance on the statement of the
middleman or the purveyor whose conduct in the past has been quess
tioned, and whom you say is already under investigation himself, it
seems to me that you are going to 11 grent extent to continue this kind
of an operation You continue to wonder about whether or not there
might be a leuk and an innocent person has been implicated, when
that person is not at all involved.
It seems to me that you have responsible people in the FBI, your
agents, who I think are responsible enough and expert enough in under-
cover activities to be able to review what that informant has or has not
said about such-and-such a person may be in his pocket, or words to
that effect, as you have said. Do you engage in this kind of further
review SO that the informant who has made this kind of statement to
you, SO that what he has had to say is really carefully weighed? Can
you recite that in the cases that you have conducted, this is what you
have actually done?
Mr. WEBSTER. If I understand the chairman's question I can cer-
tainly say yes, at various leveis, the reliability in the SPT:-P of whether
the statement made has It basis sufficient that we would have an obli-
gation to investigate further is assessed.
Now we have for cross-checking available 10 us within certain time
constraints- depending on how first the situation is breaking-we do
the best we can. We up the level of approval consistent with the indi-
viduals involved, and the sensitivities involved.
For example, in 11 number of these instances in Abscam, by both I
and the Assistant Attorney General, we were aware of and approved
the proposals based on the information furnished to us. Those of us
who live in 11 world of decency. at least among our friends and associ-
ates, sometimes find it hard to assume that envone who engages in
crime can tell the truth. But when he is telling the information to some-
one who he thinks is in league with him, that is sometimes the way by
184
which We get our very best info: nation consistently, in all types; not
just public corruption
But in other instimies, we have ome of the most important ones
now that #10 going the process, organized crime ligures deal-
Mr with our underenver agents, and telling us things that are true and
turn out to be urue.
be Piere has to be SUMP investigative judgment eirth What Mr.
Heymann pointed mit and what 1 pointed out, is the nature of the
controls that no have on entrapping innocent people. I can't guaran-
Lee that in an Operation Lobster, or even 4 sting operation. some
throcent person n't goths to walk in the door thinking that this is for
leth or have some sepprehension about it.
Fireve you the ground rules that we epply to try to minimize that.
We haven the interest or the taeilities to keep screening out people
benging on the door. because WP haven't taken the precaution to keep
them awar. We obvioisly inform the influence pediller that we
THE the FBI and we don't WHIVE him to britter any innocent people-!
don't mean to be leretions when that, Little We have to entry out the
cover, and the two cround rates are don't bring 11- anybody that
isn't going in been Bont with IN: and then we take the second ground
rule. which is to be sure that that's the case.
hairman Robtxo. That's why I would like te be convinced that
under your guidelines you able to say that you now have reason-
shile grounds to believe. based on the fact that you luive actually
scrutinized datin. not only what the purveyor has said, but what
other information you may have-1 would like to be convinced that
it isn't just the purveyor and some rumors-that the FBI doesn't 20
forward and then engage in this kind of operation, which when
ultimately disclosed and leaked, damages the reputation of innocent
persons.
Mr. WEBSTER. No one would like to convince you more than 1, Mr.
Chairman. In the course of these proceedings, I do want to emphasize
that in investigations particularly where we are trying to reach beyond
the streets and 10 out and reach the areas that all of you have been
telling us to go in, that we are not sitting HIS a grand jury. We don't
have to have probable cause, but we do have to have :: reasonable
suspicion and move on it.
1 know you don't usk for any more than that, but I hope we will be
able convince VOTE
Chairman RODINO. That's all Pm asking for, and if you can convince
me that that's the way you have been conducting these operations, I
would like to applaud you.
But I would also like to state that if you have undertaken to go
beyond that: that you have ackpowledged there is a mistake, because
I think that's the only way we are going to be able to proceed, where
mistakes are made and neknowledged, and that this thing can be a
kind of mutual cooperation. where we understand that you are en-
gaged in doing that which is done responsibly.
Mr. WEBSTER I heartity concur. Mr. Chairman.
Chairman RODINO. Beyond that, I'd like to ask one further question,
Director, regarding Operation Front Load: The chairman asked you
about the amount of money that might be involved in the event of
damage suits being successfully waged against you.
165
Was it not at some time stated by your department-and I can't
say who by-that there Was some thinking that it might cost the
Government some $5 milkon?
Mr. WEBSTER, I'm unaware of any such statement. 1 am informed
that one of the five sints have been dismissed. lie are very confident
about those lawsuits. There we a lot of numbers, you know. It only
costs 825 to the 11 lawsuit. and you can allege us many million dollars
as you want. hut we have thus far in ONE assessment of the damages
been accurate to date.
I will he And to brief the chairman on that
Chairman RODINO. Well. thank you very much.
Mr. Enwards. Because of the shortage of the time. We are come Le
operate under & brand new ride. 14 2-minute rule.
Mr. Hvile.
Mr. HYDE Well, that brings up an analogy. Jurize Webster, Lthink
we have all seen football cames on telev.sion. and wished that the
field judge or the referee could have the benefit of the television replay,
which we the spectators on so he coubi SPP exactly what happened.
not what he thought happened on the field, under the emotional
stress of the came.
Isn't it the that in criminal cases, many times you have to rely on
informants of dubious reputation. crimmals. corresporators, whose
credibility is easily attacked by defense counsel? Oftentimes you have
to grant immunity to someone who is involved in the very crime in
order to get evidence sufficient to prosecute.
This gives the defense attorney the opportunity to WHX poetical
about the purchased testimony. All of these obstacles are obviated. are
they not. by having the valeotape of the thinsactions, so questions of
identity. of what exactly was said in the surrounding circumstances
are there for the judge and for the jury? Isn't that true?
Mr. WERSTER. I believe that's correct, yes,
Mr. HYDE. Many times in political corruption mises, where the
crime is consensual and the activity is consensual. undercover tech-
niques are about the only method available to you. are they not?
Mr. WEBSTER. Well, bribery, gambling, prostitution. and other
consensual crimes are very much like adultery, rarely performed in the
public streets, and we have to take an undereover approach.
Mr. HYDE. I'm told that Secretary Stimson some years ago said,
"Gentlemen don't read other gentlemen's mail." Do you think
that if that were mandated in the FBI Charter that we could cope
with public or official corruption today?
Mr. WERSTER. That was in a different time. We now carefully
prescribe the circumstances, which are rare indeed, in which mail
can be opened. In the foreign counterintelligence field, those Marquis
of Queensbury rules really will not permit the type of success that
we have.
What I would rather focus on are the due process issues, to be sure
that the rule of law does apply, and if the law permits us to use decep-
tion as a means to get at someone SO buffered and so insulated that
he would not otherwise be found out, that we should be allowed to
do so, subject to oversight, subject to guidelines, and subject to our
internal procedures.
Mr. HYDE. I yield.
166
Mr. EDWARDS. Mr. Kastenmeier?
Mr. KASTENMEIER. Thank you, Mr. Chairman.
The reason I think these hearings are SO important is because
these techniques for which an increased amount of money is smight,
is relatively recent, and it seems by embarking upon them, we need
to know in terms of public policy what we are upon,
Mr. WEBSTER. Absolutely.
Mr. KASTENMEIER. As Dir as Congress being subject 10 this, there
is a difference, of course. Partly that suggested by the gentleman
from Ohio. Also the fact that while & number of Members in the last
20 years or 80 in the House and Senate have been prosecuted for crimes
effectively, this is the first time that a Federal investigation has pro-
ceeded through the birth k door involving it large number of Members
of Congress. Not even in conspiracy, that is not in relation one to
the other, and while, as Mr. Hevmann SILTS he asked rhetorically,
is there anything special shout public officials, the snswer being no,
except we really do have to freat them differently, he savs. I think
correctly, because We have the problem of not necessarily whether
this is or is not 00 abuse in the Abscan MISP, but in the future might
this be an abuse in the hands of another Justice Department, where
these decisions have to be made.
I, for example, Mr. Heymann, know that von de have a procedure
which I wonder whether is actually followed in each case here. That
is to say the U.S. attorney's manual mundates in every sensitive
case, a sensitive case involving it public figure, cleared at the top
level, the information to be sent to the Attorney General, to your
office, and to the deputy, and presumably there is a program for
clearance in each case.
Was it actually followed, however, in the Abscam case?
Mr. HEYMANN. I think the answer, Mr. Kastenmeier, is that is Was
not formally followed, and the reason for that is that although the
sensitive case reports, which is what we call those, only are made in
five or six or seven copies, I don't think that we would send around in
the Department five, six, or seven copies of any undercover
investigation.
The Attorney General was aware of the Abscam investigation, but
plainly the center of responsibility on the lawvers' side of the Depart-
ment of Justice was at my level He was certainly aware of it.
The other people who receive these sensitive case reports are the
Associate Attorney General. who handles the civil side. I assure he
Was not aware of it. The Deputy Attorney General, my immediate
boss, he Was aware of it.
Mr. KASTENMEIER. Well, I asked that question because it was my
information that it Was assiduously followed in this case.
Mr. HEYMANN. It is not intended to be a protection in the handling
of sensitive cases, Mr. Kastenmeier. If it were, it would raise all the
questions that Mr. Hyde commended HS earlier for avoiding. Then
you would way whenever you abve it political case, H goes shooting
right up to the political levels of the Department to be analyzed and
passed on there. The function of the sensitive case report is to make
sure that the people who are doing appointments, for example-and,
this has come up in one of these cases, not Abseam, but in Brilab,
according to the newspapers-that the people who are doing appoint-
167
ments of judges and U.S. attorneys know if there is an ongoing
investigation in the FBI and the Criminal Division. It is not to be 8
review for the proprety of the investigative steps or anything like.
that.
Mr. EDWARDS. Mr. Seiberling?
Mr. SEIBERLING. Thank you.
I hope that we will have a subsequent hearing. and perhaps several
sessions, su that we could really explore in depth the nature of the
guidelines the FBI has followed or his not followed, in view of the
fact that this subcommittee has before it the proposed FBI Charter
and must come to some kind of conclusion. 1 think perhaps it is
fortunate that these questions have arisen before we have approved B
particular legislative recommendation,
I note that in your interview with Mr. Rowan, Judge Webster, you
said this, and this is one of the questions I think we are going to have
to get into much more when we have further hearings. Leaving out the
parenthetical parts, you said:
When we have infermati 11 from a corping intermediary who is under inves-
rigation. that he has Mr. who will help in the stat project, we base
an obligation TH follow the that less). eard IN the investigation can
tiell you that we followed every lead when We slosed it down. There was nothing
left in the birtrel except with are call seam representations by intermediatives
I guess the word who has to be in there-
Who Want To produce people whose names were being trindied ansund, but
who had abselutely nothing to de with it, and could Not be produced by the
intermediaties.
Now, in fact, about luilf, just taking the Congressmen and basing it
on what We have read in the newspaper, about half of the Congressinen
and Senators who were contacted by intermediaries turned out not to
be leads: They were fulse leads; they were not correct. They turned
down any improper blandishment.
But I think we are going to have to know in very much more detail
to what extent this statement of n corrupt intermediary, which IS your
phrase. is deemed a sufficient basis for an attempt to entice a particular
person into committing a corrupt art. and we are going to have to
know to what extent you require corroboration and SO forth.
I think this applies whether the person is a public official or not.
The only difference is that a public official is constantly being ap-
prouched by people who want help from him. and legitimately so.
And what more, he has his reputation, which is everything. If his
reputation is beclouded. he is dead politically. and that's, of course,
true of 11 lot of people who are not public officials. Their reputation is
allimportant. So I do think that we have got to know what checks
there are on the use of corrupt intermediaries, which is your phrase,
to make sure that they do not put a cloud over the reputation of a
person who is not in Inct going to be predisposed. ns you have said.
I have used up my time, I see, but perhaps the chairman will let
you respond,
Mr. WEBSTER. We'll be happy to explore that. and Mr. Heymann
wants to add a postscript to what say, but 1, too, believe. and I
believe that most Members of Congress and most public officials be-
lieve with me, that those people are out there, they are hovering
around the offices of public trust, and that we do a service when our
leads from other sources take us in this direction and we follow it.
168
I want you to be satisfied with the guidelines that are in place, but
I think we both have a common interest in seeing what we can do to
get those people away from our institutions.
Mr. SEIBERLING. Well. as we have seen, honest officials do have
sensitivity, and when they smell II Tal, they are inclined to say, "This
is the end. I won't have anything more to do with it." It does bother
me, and I think it bothers all of us. that the Government itself would
be putting public officials in II position where they have to demon-
strate under circumstances where they are not even aware that they
are being tricked. they are not even aware that there is some kind of
investigation going on. they have to affirmatively demonstrate their
bonafides, and I think that raises some questions about the ability of
our system to function that are very, very profound, and need to be
curefully handled.
This isn't a simple thing. I sympathize with your problem. and I
want to see every corrupt instance brought to light and squelched, but
at the same time the mass of people and the mass of politicians, I
think are honest, and the problem of finding how to find out the
crooks and still not prejudice the honest ones is 11 very difficult one,
and we need to pursue it more.
Mr. EDWARDS. Mr. Drinan?
Mr. DRINAN. Thank you, Mr. Chairman
There has emerged from this conference the shadowy world of
middlemen. They are the new characters in Abscum now, and they
are corrupt intermediaries, and I have a lot of trouble with their moti-
vation. We learned the ground rule. You say to the middleman,
"Don't bring in anybody unless he is prepared to take money," and
in 50 percent of the cases, the middlemen are wrong.
Were the middlemen told that they were going to appear on tele-
vision, that they are going to be 11 feature in the trials that are forth-
coming? It seems to me that you owe a lot to these middlemen.
Furthermore, did they get compensation? Did they get promises of
immunity for prosecution? What is their motivation, when you say,
"Go out there and get somebody who will come in and commit a
crime on television": Who are these middlemen?
Mr. WEBSTER. I have to take issue with just about everything
you said. [Laughter.]
They are subjects of investigation. We did not ask them to go out
and bring us in people. We set at situation in which the undercover
agent represented that he was interested in buying favors. As far
as knowing that they are going to be on television, of course, they
don't know they are on television. That is the part of the investigative
technique that we are using to build 11 case against them, and anyone
who conspires with them to violate the law.
Mr. DRINAN. Well, sir, will they be immune from prosecution?
Suppose now that the name of this corrupt intermediary comes out
in the instance of IL Congressman who is vindicated, and his reputation
has been damaged. Does he have a right to find out who this character
was, the influence peddler, this faceless accuser, this corrupt inter-
mediary? Does he have the right to find out who he is and why he
brought him into the situation on W Street?
Mr. WEBSTER. That's u prosecutive discretion matter. I am looking
for no immunity, but I will turn it over to Mr. Heymann.
169
Mr. HEYMANN. I think certainly anyone who fits all those ad-
jectives ought to be prosecuted. [Laughter.]
Mr. DRINAN. Then how many are you going to prosecute?
Mr. HEYMANN. The answer. of course. Congressmun-Drinan, is
these people are, as Judge Webster said, just as much subjects of
investigation and likely targets of investigation as anyone else.
The lact of the matter is in any investigation, we make deals or
arrengements among the possible defendants in order to strengthen
our case with witnesses. the are likely in any investigation, political,
nonpolitical, anything that involves a number of people, to prosecute
some and not prosectite others.
Some of the people you are describing as middlemen-that was
originally my term-will undoubtedly be prosecuted. Others will
not: It's a standard arrangement.
I would like to take the opportunity to SHV one thing that goes to,
in a very narrow and careful WHE the question hairman Rodino and
Mr. Seiberling and maybe you. Father Drimin, have raised.
If we are running Operation Lubster and somebody comes To us and
says that somebody is 11 hijacker and II crook and tro good, unreliable
in 1 million wave, and he says, beheving that weare crooks and fences,
says, "Should 1 tell John Jones shout this? I think he IS in the hi-
jacking business."
Our answer. Mr. Seiberling. in particular, is that We ought to say
yes, even though the person who said to us, +1 think John Junes is in
the hijacking business," wasn't certain, and is generally unrehable,
but we ought to say to him, "Yeah, tell John Jones about this
Sure, there is some risk that John Jones will 50 out and bijack a
truck just because he knows about our feneing operation, but that is a
very small risk. and that leads me to the following very narrow, but
perhaps very important, point:
At the moment we say, Yes, CO out and tell John Jones about it,"
we don't have much basis for believing that John Jones is indeed a
hijacker of trucks. At the moment-ated this difference in time IN very
important-at the moment that John dones árrives with a truck at the
warehouse, we have a very good renson to believe he is a hijacker, and
let me explain very precisely why, We have been put onto John Jones
by somebody who wants to keep doing business with 115, and who
obviously has a relationship that he wants In maintain with John
Jones.
If we are simply careful enough to SITY the transaction here is going
to be absolutely plain, clear, and meontrovertible, we are going to pay
money for a hijacked load of goods, this con man, this nameless
informer, this man who has no hasis for credibility otherwise,, sud-
denly has high stakes in not bringing in John Jones unless John Jones
really is prepared to sell 11 truckload of goods for cash. He doesn't
want to disrupt his relationship with us by bringing in somebody who
isn't H hijacker or isn't selling the goods. He doesn't want towmbarrass
John Jones and disrupt his relationship with John Jones by bringing
him into a place where we are going to -ay, "OK, now, we are some to
take the goods, you get the cash." These are stylen goods.
By the time that man pushes the bell on our warehouse door, there
is every reason to believe that John Jones IS indeed 11 hijacker. At the
time we said, "Sure, go ahead and make the offer to John Jones," the
evidence may have been very thin:
170
Thank you.
Mr. DRINAN. Thank you, Mr. Chairman.
Mr. EDWARDS. Mr. Volkmer?
Mr. VOLKMER. Thank you. Mr. Chairman.
IN like 10 continue a little bit and then 10 to something else I was
going to start with because this is one of the things I wanted to bring
up,
I think there is # major musinderstanding by some members of the
committee as to how the maidleman, as to is called here. actually
operates, and that imsunderstarading seems to be that they view the
middleum as an operative of the FBI which he definitely is not. If
we look at it, let's say-eorrect me if I am wrong as 1 understand it.
H procedure. take the Lobster CHEC or Abscan or anything else. What
we have is a knowledge there is influence pedding
or something gentig on. and then we can know people who are in the
business. The FBI then sets up at: operation. unknown to those people
who are the as being FBI agents. Is that correct?
Mr. WEBSTER. That's correct:
Mr. VOLKMER. If they ever became knowleng FBI men, that blows
the whole things of course.
Mr. WEBSTER. That's correct.
Mr. VOLKMER. In is necessary, then. in operation, to keep them
from becoming suspicious: metal
Mr. WEBSTER. That's correct.
Mr. VOLKMER. 20 if you statted saving to them, "No. don't go see
him. we don't want you to YYYY latu, because he might be all right."
immediately the middlennin IS going to What's genting on here."
Is that correct?
Mr. WEBSTER. That's correct.
Mr. VOLKMER. 20, you ON have (4 tell him. "Well, that's
11 pretty good idea. Why don't you 20 ationn?" Because especially if
he's already brought in others: correct?
Mr. WEBSTER. That's right.
Mr. VOLKMER. I think we have to understand that. That's 11 basic
imperfection 111 the system. that's 21 necessary putt of the system. Is
that not correct?
Mr. WEBSTER. That's correct.
Mr. VOLKMER. Father Drinim of Massa husetts previously attuded
to in article by Guity Marx of MIT. I huxe taken the titule also to read
it, and It does point out sime impertections III the system of using
undercover. but also I think we must understand interesting
reading, by the way - and I don't think it's a profound CNSP against
undercover. That's my own viewpoint. It may be the opposite of the
gentleman from Mussachusetts.
1 view the question using undereover or not using undercover on
the basis that If wedon't H-P H. there Is game to Inc many. many major
criminals, crimes, comg undetected and improseruted: IS that not
correct?
Mr. WEBSTER. That's correct.
Mr. VOLKMER. 70 if we would shut It 40WTh all these things that
have been done in the must agustst crime would no longer be done?
Mr. WEBSTER. That's correct.
Mr. VOLKMER. Let mesisk you this Do you envision actually how
you would be able to catch some thieves? Take the Lobster operation.
171
Do you think the FBI operators could walk into an existing fencing
operation and be able to gather evidence against those who are selling
to the fence?
Mr. WEBSTER. It would be most improbable.
Mr. VOLKMER. Walk in colli. you've not a suspicion, somebody has
told you about it. you've got It reasonable ground to believe it.
I've just been handed a note that my time is up. The centleman
from Mussachusetts, I timed him at 6 minutes and 15 Securits, I just
concluded 2 minutes.
Thank you, Mr. Director. My time is up.
Mr. WENSTER I hope we won't go back to the mys, Mr. Chair-
man, when our agents walked into hars and ordered children of milk.
[Laughter.]
Mr. EDWARDS. Mr. Director. when 1 wis in agent. that's all we
ever drank. [Laughter]
Mr. Rodino?
Chairman RODINO. I just want to say thank you, but I will be
leeking forward to serutinizing those guidelines, your work rules. and
Pd like to leave this statement with you in parting.
Mr. Hevmenn. I think you ought to consider this because you
have been referring all along to Operation Lobster, and some other
sting operations. I can't. for the We of me. reconcile the kind of opera-
tion where crime atrendy has been committed as against these other
operations which were conducted where public officials were involved,
where representations were made by middlemen or purveyors, with
the kinds of inducements that we have rend about, which would sug-
gest that possibly a Member of Congress could be of help to the
district because of what someone might be able to invest in that par-
tienlar district.
1 don't understand how you could analogize one with the other,
because in one case, crimes have been committed or a crime has been
committed. or an overt act has been done. where the person who is
then prepared to commit the crime would have to say that he was
accepting stolen goods or hijacking.
That, to me. is 11 lot different, and that seems to really be the crux
of what bothers me of how you proceed with one and proceed with
the other which should have. I think, even at the beginning, given you
lots of pause as to the consequences. It's entirely a different kind of
case. It's entirely :1 different kind of setting, and one that is fraught
with SO much peril, that I am wondering whether or not it is being
given that careful serutiny, and that's what 1 am hoping that we are
going to be able to resolve as we go on. As 1 suggested to the chair-
man-1 think it was well stated by the gentleman from Ohio, Mr.
Seiberling-at some time in the future, some of these things may have
to be aired in executive session.
Mr. EDWARDS. This will conclude today's hearing. As the chairman
of the full Judiciary Committee suggests, Be will continue the subject
at a future date. We still have H number of questions to ask about
undercover operations, and/ir we pointed out earlier, undercover
operations are included in the charter that the subcommittee presently
has under consideration.
We thank both Judge Webster and Mr. Heymann for their appear-
ance here today.
Mr. WERSTER. Thank you, Mr. Chairman.
[Whereupon, at 12:30 p.m., the hearing was adjourned.]
172
APPENDIX 3
The changing FBI
The road
to
Abscam
JAMES Q. WILSON
II
I is inconceivable that J. Edgar
Heover would ever have investigated members of Congress to
gather evidence for possible prosecution. Hoover's FBI learned a
great deal about congressmen, and may have gone out of its way
to collect more information than it needed, but all this would have
been locked discrectly away, or possibly leaked, most privately, to
a President or attorney general whose taste for gossip Hoover
wished to gratify or whose personal loyalty he wished to assure.
The Bureau's shrewd cultivation of congressional and White House
opinion, effective for decades, was in time denounced as evidence
that the FBI was "out of control," immune from effective oversight.
Today, of course, the Bureau is again being criticized, albeit cir-
cumspectly, by various congressmen who complain of the manner
(and possibly also the fact) of its investigation of possible legisla-
tive bribery. Congressmen wonder whether the FBI is launched on
a "vendetta" against its erstwhile allies turned crities. Once again
there are angry mutterings that the Bureau is "out of control," this
time because it is using its most powerful technique-undercoyer
operations-to discover whether congressmen are corrupt,
It would be tempting to ascribe the changes in the Bureau's re-
lations with Congress to nothing more than personal pique amplified
173
4
THE PUBLIC INTEREST
into organizational vengeance. After years of congressional adula-
tion of Hoover and the FBI, the mood suddenly turned nasty with
revelations of how far the Bureau was prepared to go in using its
investigative powers to maintain political support. The list of
Bureau excesses is long. familiar, and dismaying; the wrath visited
upon it by several congressional committees combined a proper
outrage at abuse of power with a hint of romance gone sour. For
the FBI now to turn on those who had turned on it would be
precisely the sort of thing one might suppose a Hoover-style agency
might relish.
This is and what has bappened. No doubt there are some FBI
agents who are enjoying the sight of congressmen scurrying for
cover, but that was not the motive for "Operation Abscam." The
Bureau has in fact changed; and changed precisely in accordance
with the oft expressed preferences of Congress itself. Congressional
and other critics complained that the Bureau in the 1960's was not
only violating the rights of citizens, it was wasting its resources and
energies on trivial cases and meaningless statistical accomplish-
ments. Beginning with Director Clarence Kelley, the Bureau
pledged that it would end the abuses and redirect its energies to
more important matters. This is exactly what has appened.
This rather straightforward explanation is hard for official Wash-
ington to accept, and understandably so. Bureaucracies are not sup-
posed to change, they are only supposed to claim to have changed.
It tests the credulity of a trained congressional cynic to be told
that a large, complex, rule bound organization such as the FBI
would or could execute an about-face.
But the FBI is not just any bureaucracy, and never has been.
Next to the Marine Corps, it is probably the most centrally con-
trolled organization in the federal government. Its agents do not
have civil service or union protection, its disciplinary procedures
can be swift and draconian, and despite recent efforts to decen-
tralize some decision making, the director himself, or one of his
immediate subordinates, personally approves an astonishingly large
proportion of all the administrative decisions made in the Bureau.
Not long ago,' a decision to install sanitary-napkin dispensers in
women's lavoratories in Burcau headquarters could not be made
until Director William Webster endorsed the recommendation. FBI
agents have complained for decades about the heavy-handed super-
vision they received from headquarters; though that has begun to
change, the visit of an inspection team to an FBI field office con-
tinues to instill apprehension berdering on terror in the hearts of
63-565 0 81 12
174
THE CHANGING FUL: THE ROAD TO ABSCAM
5
the local staff The inspectors sometimes concentrate on the mi-
nutiae at the expense of the important, but whatever its defects,
niepicking insures that field offices will conform to explicit head-
quarters directives pertaining to observable behavior.
But even for the Bureau, the change in investigative strategy that
culminated in Operation Abscam was no casy matter. For one
thing, much of what the Bureau does is not easily observable and
thus not easily controlled by inspection teams and headquarters
directives. Law enforcement occurs on the street in low-visibility
situations that test the judgment and skill of agents but do not lend
themselves to formal review. Many laws the FBI enforces-particu-
larly those pertaining to consensual crimes such as bribery-place
heavy reliance on the skill and energy of agents and field super-
Visers who must find ways of discovering that a crime may have
been committed before they can even begin the process of gather-
ing evidence that might lead to 3 presecution. Relations between
an agent and an informant often He at the heart of the investigative
effort, but these are subtle, complex, and largely unobservable.
Finally, what the Bureau chooses to emphasize is not for it alone
to decide. The policies of the local United States Attorney, who
though nominally an employee of the Justice Department is in
reality often quite autonomous, determine what federal cases will
be accepted for prosecution and thus what kinds of offenses the
local FBI office will emphasize.
Changing the Bureau
Given these difficulties, the effoit to change the investigative
priorities of the Bureau was a protracted, controversial, and difficult
struggle, Several things had to happen: New policies had to be
stated, unconventional investigative techniques had to be autho-
rized, organizational changes had to be made, and new incentives
had to be found.
As is always the case, stating the new policies was the casiest
thing to do. Attorney General Edward Levi and Director Kelley
pledged that the Bureau would reduce its interest in domestic
security cases, especially of the sort that led to such abuse: as
COINTELPRO, and in the investigation of certain routine crimes
(such as auto theft or small thefts from interstate shipments) that
had for years generated the impressive statistics that Hoover was
fond of reciting. The domestic security cases were constitutionally
and politically vulnerable; the criminal cases that produced evi-
175
6
THE PUBLIC INTEREST
dence of big workloads but few significant convictions were un-
popular among the street agents. The man Kelley brought in to
close down virtually all the domestic security investigations was,
ironically, Neil Welch, then in charge of the Bureau's Philadelphia
office and later to be in charge of the New York office and of
Operation Abscam. In a matter of months, thousands of security
cases were simply terminated; hundreds of security informants
were let go, domestic security squads in various field offices were
disbande d and their agents assigned to other tasks. New attorney-
general guidelines clarified and narrowed the circumstances under
which such cases could be opened in the future. The number of
FBI informants in organizations thought to constitute a security
risk because so small that it was kept secret in order, presumably,
to avoid encouraging potential subversives with the knowledge that
they were, in effect, free to organize without fear of Bureau sur-
veillance.
Kelley also announced a "quality case program" authorizing each
office to close out pending investigative matters that had little
prosecutive potential and to develop priorities that would direct its
resources toward important cases. Almost overnight, official Bureau
caseloads dropped precipitously, as field offices stopped pretending
that they were investigating (and in some cases, actually stopped
investigating) hundreds of cases-of auto thefts, bank robberies,
and thefts from interstate commerce and from government build-
ings-where the office had no leads, the amounts stolen were small,
or it was believed (rightly or wrongly) that local police depart-
ments could handle the matter.
Headquarters made clear what it regarded as the "priority" cases
that the field should emphasize: white-collar crime, organized
crime, and foreign counteriatelligence. But saying that these were
the priorities, and getting them to be the priorities, were two dif-
ferent things. Permitting field offices to stop reporting on high-
volume, low-value cases did not automatically insure that the re-
sources thereby saved would be devoted to, say, white-collar
crime. For that to occur, some important organizational changes
had to be made.
The most important of these was to reorganize the field-office
squads. Traditionally, a field office grouped its agent personnel
into squads based on the volume of reported criminal offenses-
there would be a bank robbery squad, an interstate theft squad,
A fuller account of these changes can be found in James Q. Wilson, The In-
vestigators: Managing FBI and Narcotics Agents (Basic Pooks, 1978).
176
THE CHANCING Hilli THE ROAD TO AUSCAM
7
on auto theft squad, and so on., These squads reacted to the in-
coming flow of reported crimes by assigning an agent to cach case.
What we now call white-collar crime was typically the province
of a single unit-the "accounting squad" -composed, often, of agents
with training as accountants, who would handle bank complaints
of fraud and embezzlement. Occasionally, more complex cases in-
volving fraud would be developed; many offices had individual
agents skilled at defecting and investigating elaborate political,
labor, or business conspiracies. But attention to such matters was
not routinized because the internal structure of a typical field office
was organized around the need to respond to the reports of crimes
submitted by victims. Elaborate conspiracies often produced no
victims aware of their victimization or enriched the participants in
ways that gave DO one an incentive to call the FBL Taxpayers gen-
orally suffer when bribes are offered and taken. and innocent in-
vestors may be victimized by land frands, but either the citizen is
unaware he is a victim or the "Victim" was in fact part of the con-
spiracy, draw in by greed and lareenous intent.
Again Neil Welch enters the scene. The Philadelphia office was
one of the first to redesign its structure so that most of its squads
had the task, not of responding to victim complaints, but of iden-
tifying ("targeting") individuals, croups, and organizations for
intensive scrutiny on the grounds that day were suspected of being
involved in againized crime, pubject conspiracies, labor racketeering,
or political corruption. Though attached extry FM field office would
from time to time make events politicians or busi-
nessmen, the cases made in PNP tacolar for their
number and scope.
Weis, business.
men, police officers,
indicted and
convicted. The more ind
Sclown, the more
nervous accompliees, frightent Wowledgeable re-
porters would come forward to when have information that
spurred further investigations.
During the period when Welch and the Philodelphia office were
making headlines (roughly, 1975 to 1577), the rest of the Bureau
was watching and waiting. Experienced FBI officials knew that
under the Hoover regime, the only safe rule was "never do any-
thing for the first time." Taking the initiative could result in rapid
promotions but it could also lead to immediate disgrace; innova-
tion was risky. What if the allies of the powerful people being
indicted (one was Speaker of the Pennsylvania House of Repre-
sentatives) complained? Hoove: had usually rebulfed such com-
177
THE PUBLIC INTEREST
3
plaints, but you could never be certain. More important, how would
Bureau headquarters react to the fact that the number of cases
being handled in Philadelphia had dropped owing to the reassign-
ment of agents from the regular high-volume squads to the new
"target" squads? In the past, resources-noncy, manpower-were
given to field offices that had high and rising caseloads, not to
ones with declining statistics.
Kelley's response W.B clear he increased the number of agents
assigned to Philadelphia and save Welch even more important TO-
sponsibilities (it was at this Fitric that Welch was brought in head-
quarters to oversee the winding down of the domestic secrifity
program). There were on many H as to resolve and many appre-
housive supervisors to reassure, Not the momentain was gowing:
More and more field offices began to reurganize to give structural
effect to the priority-case program. aNd thus to an augressive stance
regarding white collar crime.
Emphasizing priority offenses
The incentives to comply with the emphasis on D irity offenses
came from within and without the Bureau. Inside, the management
information system was revised so that investigations and convic-
tions were now classified by quality as well as number. The crimi-
nal offenses for which the FBI had investigative responsibility were
grouped into high- and low, dority categories, and indi. idual
offenses within these categories were further classified by the de-
gree of seriousness of the behavior under investigation (for exam-
ple, thefts were classified by the amount stolen). It is far from clear
that the statistics generated were used in any systematic way by
Bureau headquarters-in the FBI as in many government agencies,
such data are often perceived as a "numbers game" to be played
and then forgotten-but at the very least these statistics reinforced
the message repeated over and over again in the statements of the
director, first Kelley and then William H. Webster: Go after white-
collar and organized crime.
Outside the Bureau, key congressmen were pressing hard in the
same direction. Nowhere was this pressure greater than in the
chambers of the Subcommittee on Civil and Constitutional Rights
of the House Judiciary Committee, chaired by Congressman Don
Edwards of California-who had once been, brieny, a member of
the FBI. This Subcommittee had become one of the centers of
congressional attacks on the Bureau. Kelley and Webster spent
178
THE CHANGING FEL: THE ROAD TO ABSCAM
9
hours answering questions put by its members, who included in
addition to Chairman Edivards, Elizabeth Holtzman of New York
and Robert Drinan of Missachusetts. The attack on the FBI's per-
formance began with criticism of the domestic security programs,
but came to include enticisms of the Bureau's weaknesses in the
area of white office This latter concern reflected, in part,
the Subcomenittee members' genuine conviction that white-collar
offenses were serious makes Butit also reflected the Subcommittee
meinbers' suspleted that the FBI was "soft" on "establishment"
crimes while being excessive iv preoceupied with subversion, and
thus inclined merify to 29 through the motions when investigating
the former and to put its heart and resources into inquiries Be
garding the latter. Thus, getting the Bureau to emphasize white-
collar crimes was BUT only good in itself, it was a way, the Sub:
committee seemed to Chink: of keeping it out of domestic security
work
In 1977, staff meisbers of the Subcommittee touced various FM
Hold off and spoke as well to several U.S. Attorneys. Their report
sharply criticized the FBI for continuing to devote manpower to
street crimes such as bank robberies and hijacking-all of which, in
the opinion of the staff, could better be handled by the local police.
In some cases, the staff claimed, the FBI's idea of white-collar
crime was welfare cheating and other examples of individual, and
presumably sinall-scale, frauds against the government. The staff
lamented the "reluctance on the part of FBI personnel, particularly
at the supervisory level, to get involved in more complex investiga-
tions that may require significant allocation of manpower for long
periods of time." And the report criticized the field offices for not
mounting more undercover operations.
Whatever shortcomings the FBI may have, indifference to con-
gressional opinion has never been one of them. The pressure inside
the Bureau to develop major white-collar-crime cases mounted.
The Bureau had always thoroughly investigated reported violations
of federal law whatever the color of the collar worn by the suspects.
Businessmen, politicians, and labor leaders had been sent to prison
as a result of FBI inquiries. But most of these cases arose out of a
complaint to the Bureau by a victim, followed by FBI interviews
of suspects and an analysis of documents. Sometimes wiretaps were
employed. The number, scope, and success of such investigations
depended crucially on the skill and patience of the agents work-
184 = case. One legendary FBI agent in Boston was personally re-
179
10
THE PUBLIC INTEREST
his tenacity, his ability to win the confidence of reluctant witnesses
and accomplices, and his knowledge of commlex Grandial
tions. Birt Rnding or producing large numbers of such agents is
difficult at best Far casier would be the elopment of investiga-
live techniques that could generate reliable evidence in large
amounts withint having to depend solely on an agent's ability to
"firs" a suspect, who then world have to territy in court against his
former collaborators.
Undercover operations
Onle <uch mothod was the undercover optiation: Varenties tents
in the Direct Enforcement Administration and in leal police de-
partments had always relied extensively on undereover agents
buying illegal drugs in order to produce evidence. Traditionally,
however, the FBI had shied away from these methods. Hoover had
resisted any techniques that risked compromising an agent by
placing him in situations where he could be exposed to adverse
publicity or tempted to accept bribes. Hoover knew that public
confidence in FBI agents was the Bureau's principal investigative
resource and that confidence should not be jeopardized by having
agents appear as anything other than well-groomed, "young execu-
tive" individuals with an impeccable reputation for integrity. From
time to time, an agent would pose as a purchaser of stolen goods,
but these were usually short-lived operations with limited objec-
tives. For most purposes, the FBI relied on informants-persons
with knowledge of or connections in the underworld-to provide
leads that could then, by conventional investigative techniques, be
converted into evidence admissible in court in ways that did not
compromise the informant.
The FBI's reliance on informants rather than undercover agents
had, of course, its own costs. An informant was not easily controlled,
his motives often made him want to use the FBI for personal gain
or revenge against rivals, and either he would not testify in court
at all or his testimony would be vulnerable to attacks from defense
attorneys. Moreover, it is one thing to find informants among bank
robbers, jewel thieves, and gamblers with organized crime connec-
tions; it is something else again to find informants among high-level
politicians, business executives, and labor leaders. An undereover
operation came to be seen as a valuable supplement to the infor-
mant system: Though created with the aid of an informant, it could
180
THE CHANGING FBI: THE ROAD TO ABSCAM
11
fally monitored by recording equipment, used to develop hard
physical evidence (such as photographs of cash payofis), and oper-
ated so as to draw in high-level suspects whose world was not
easily penetrated by conventional informants.
In 1974 the Law Enforcement Assistance Administration (LEAA)
began supplying money to make possible the now-farnous "Sting"
operations in which stolen property would be purchased from
thieves who thought they were selling to criminal fences. LEAA
insisted initially that a Sting be a joint federal-local operation, and
so the FBI became partners in these early ventures, thereby acquir-
ing substantial experience in how to mount and execute an under-
cover effort in ways that avoided claims of entrapment. In 1977,
the FBI participated in 34 Sting operations. Soon, however, the re-
quirement of federal participation was relaxed and the Sting be-
came almost entirely a state and local venture (albeit often with
LEAA money). After all, most of the persons caught in a Sting were
thieves who had violated state, but not federal, law.
The experience gained and the success enjoyed by the FBI in
the Stings were now put in service of undercover operations di-
rected at the priority crimes-especially white-collar crimes and
racketeering. During fiscal year 1978, the Bureau conducted 132
undercover operations, 36 of which were aimed at white-collar
crime. They produced impressive (and noncontroversial) results,
and led to the indictment of persons operating illegal financial
schemes, trying to defraud the government, engaging in union
extortion, and participating in political corruption.
Each of these operations was authorized and supervised by FBI
headquarters and by the local United States Attorney or by Justice
Department attorneys (or both). Among the issues that were re-
viewed was the need to avoid entrapment. In general, the courts
have allowed undercover operations-such as an agent offering to
buy illegal narcotics-as a permissible investigative technique, In
Hampton D. United States, the Supreme Court held in 1976 that
the sale to government agents of heroin supplied to the defendant
by a government informant did not constitute entrapment. In an
earlier case, Justice Potter Stewart tried to formulate a general rule
distinguishing a proper from an improper undercover operation:
"Government agents may engage in conduct that is likely, when
objectively considered, to afford a person ready and willing to com-
mit the crime an opportunity to do so." It is noteworthy that this
formulation appeared in a dissenting opinion in which Stewart
argued that the case in question had involved entrapment; thus, it
181
12
THE PUBLIC INTEREST
probably represents the opinion of many justices who take a reason-
this trict view of what constitutes entrapment. As such, it affords
ample opportunity for 9th doceover operations, especially those, such
as Abscain, in which lawyers can monitor agent activity on almost
a continuous basis.
Congress was fully aware that the FBI was expanding its use of
undercover operations. The House Appropriations Committee, as
well as others, were told about these developments-withont, of
course, particular cases then in progress being identified. Moreover,
Congress by law bad to give permission for the Bureau to do certain
things necessary for an undercover operation. These prerequis."
to FBI cover operations involve the right to lease buildings
or to enter Pito contracts in ways that do not divulge the fast that
the contracting party or the lessee are government agents, and
that permit advance payment of funds. Indeed, one statute pro-
hibits a government agency from leasing a building in Washington,
D.C., without a specific appropriation for that purpose having first
been made by Congress. If that law had been in force, the FBI
would not have been able to lease the Washington house in which
Operation Abscam was conducted. At the request of the FBI, how-
ever, Congress exempted the Bureau from compliance with statutes
that might have impeded such operations, The proposed FBI Char-
ter, now before Congress, would specifically authorize undereover
operations and would grant a continuing exemption, whenever
necessary, from the statutes governing contracts and leases.
Though the FBI learned a great deal about undercover opera-
tions by its early participation in Stings, Operation Abscam is not,
strictly speaking, a Sting at all. In a Sting, a store is opened and
the agents declare their willingness to buy merchandise from one
and all. Much of what they buy involv es perfectly legitimate sales;
some of what they buy is stolen, and when that is established, the
ground is laid for an arrest. Operation Abscam followed a quite
different route. It resulted from the normal exploitation of an in-
formant who had been useful in locating stolen art works. The
informant apparently indicated that he could put agents in touch
with politicians who were for sale; the agents accepted, and set up
Abscain by having an agent pose as a wealthy Arab interested in
buying political favors to assist his (mythical) business enterprises.
Several important congressmen, or their representatives, were
brought to the house used for Abscam and their negotiations with
the agents recorded. The operation is no different in design from
those used in many other cases that carned praise for the Bureau.
182
THE CHANGING FBI: THE ROAD TO ABSCAM
13
What is different is that in this case congressmen were apparently
involved and the operation was leaked to the press before indict-
ments were issued.
Cangress, kins enforcement, and the Constitution
For congressmen to be in trouble with the law is nothing new.
During the 95th Congress alone, 13 members or former members
of the House of Representatives were indicted or convicted on
criminal charges. Most if not all of these cases resulted from the
use of conventional investigative methods-typically, a tip to 3 law
enforcement officer or reporter by a person involved in the offense
(bribery, payroll padding, taking kickbacks) ho then testified
against the official. Law enforcement in such cases is ordinarily
reactive and thus crucially dependent the existence and volu-
bility of a disaffected employee, businessman, or accomplice. Oper-
ation Abscam was "proactive"-it created an opportunity for persons
to commit a crime who were (presumably) ready and willing to
do so.
Congress has never complained when such methods were used
against others; quite the contrary, it has explicitly or implicitly
urged-and authorized-their use against others. There is no small
element of hypocrisy in the complaints of some congressmen that
they did not mean a vigorous investigation of white-collar crime to
include them.
But it is not all hypocrisy. It is worth discussing how such investi-
gations should be conducted and under what pattern of account-
ability. An unscripulous Fresident with a complaisant FBI director
could use undereover operations to discredit political enemies, in-
cluding congressmen from a rival party. Hoover was a highly politi-
cal FBI director, but he saw, rightly, that his power would be
greater if he avoided investigations of Congress than if he under-
took them. Clarence Kelley and William H. Webster have been
stemly nonpartisan directors who would never consider allowing
the Bureau's powers to be put in service of some rancid political
purpose. But new times bring new men, and in the future we may
again see partisan efforts to use the Bureau. What safeguards can
be installed to prevent schemes to embarrass political enemies by
leaked stories is worth some discussion.
But there is a dilemma here: the more extensive the pattern of
accountability and control, the greater the probability of a leak.
The only sure way to minimize leaks is to minimize the number of
.83
14
THE PUBLICINTEREST
persons who know something worth leaking. In the case of Opera-
tion Abscam, scores of persons knew what was going on-in part
because such extensive efforts were made to insure that it was a
lawful and effective investigation. in addition to the dazens of FBI
agents and Nisir supervisors, there were lawyers in the Justice De-
partment and U.S. Attorneys in New York, Newark, Philadelphia,
and Washington, D.C., together with their staffs, all of whom were
well informed: Any one of them could have leaked. Indeed, given
their particin spensorship and what is often their background in
political activies, U.S. Attorneys are especially likely to be sources
of leaks more so, 1 should surmise, than FIV agents. 11; in order to
prevent abuse. of the Burden's investigative powers, ve ink rease the
number of supervisors-to for Nample, members of the
House or Senate othics committees-we also increase the chances of
leaks (to My withing of other ways by which such lave tigations
could to compromised).
In the meantime, the deliate will not be helped by complaints
that the Burcau has launched a "vendetta" against Congress or that
it is "out of control." It is nothing of the kind, It is an organization
that is following out the logic of changes and procedures adopted
to meet the explicit demands of Congress.
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