The FBI Stings Congress

COVER STORY

A dismaying scandal--and difficult questions

Everybody was laughing at what was happening. It was like guys coming out of the bush, saying, 'Hey, give me some of the money.' They'd pay one guy and the next day five guys would be calling them, guys they didn't know. The tapes are hilarious."

So said a former federal prosecutor last week, but on Capitol Hill no one shared the amusement. Too many of "the guys" were members of Congress, and "the tapes" were both video and audio, catching the sight and sound of them accepting money to perform special favors. That, in any case, was the story being leaked by sources within the Department of Justice, which said the FBI had lured the lawmakers into the focus of hidden television cameras in the most sensational undercover operation it had ever conducted.

Dubbed Abscam, for Arab Scam, the 23-month investigation had cost some $800,000 and involved about 100 agents in an elaborate series of hoaxes and disguises. One of these dressed up in a burnoose and posed as a sheik named Kambir Abdul Rahman, whose millions were said to be "burning holes" in a Chase Manhattan account. Other agents in pinstripe suits served as the sheik's American emissaries, translating his gutteral commands and seeking ways to invest his money in New Jersey gambling casinos, East Coast port facilities and an American titanium mine. Along the way, the phony sheik and his aides sought to protect his investments by buying political influence in Congress, in New Jersey's Casino Control Commission, the New Jersey legislature and the Philadelphia city council. When the FBI sting ended, its supervisors alleged that the honey pot of Arab money had attracted one U.S. Senator, seven members of the House and two dozen state and local officials or their corrupt cronies--all stung by facing possible charges of accepting bribes or being caught in an illegal conflict of interest.

Stunned and saddened, leaders of Congress demanded all of the FBI evidence so they could conduct speedy investigations of their own to discipline or clear their accused colleagues. Just as adamantly, Justice Department officials insisted that grand juries must examine the evidence first, decide whom to indict for what, and send any criminal charges to trial. Simultaneous probes would only get in each other's way and make both branches of Government look inept, said Attorney General Benjamin Civiletti, and in the end might let all of the suspects escape punishment. The new scandal was hardly another Watergate, yet the inter-branch conflict was hauntingly familiar.

So, too, was the claim by civil libertarians that the investigators had leaked their findings to an overeager press, irreparably damaging the reputations of public officials before anyone had even been formally accused of a crime.

Yet Abscam did introduce a new controversy. Had the much-criticized FBI illegally or unethically enticed the lawmakers into committing crimes they would normally not have considered? "This smacks of a setup," claimed one leading Democrat in Congress. "A lot of guys feel that the FBI has got it in for this place." But why? No legislator could quite explain this "gut feeling" that, as another Congressman contended, the FBI was out "to get us." On the other hand, the agency seemed to have fearlessly bitten the hand that feeds it. The Congress had appropriated about $3 million for FBI undercover operations in the past year, and it now appears that the FBI, in an ironic way, returned some of that money to a few greedy members of Congress. Nevertheless, the "entrapment" issue and the massive and apparently deliberate leaks to the press were all legitimate topics of ethical concern and growing controversy (see ESSAY).

One point was not in dispute: the badly battered reputation of Congress, tarnished by numerous recent cases of individual misconduct, had been dealt a major blow. "The institution has been hurt," conceded House Speaker Tip O'Neill. "I'm very disappointed, discouraged and shocked," said Senate Majority Leader Robert Byrd. "I'm sick," declared Congressman Robert F. Drinan, who served on the Judiciary Committee that had voted in 1974 to impeach Richard Nixon. The actions of that committee were so impressive that 48% of Americans, according to a Gallup poll at the time, said that they approved of the way Congress was performing. Assaulted by more recent charges, including President Carter's repeated claim that Congress is a captive of special interest groups, the legislature's approval rating fell to a lowly 19% last summer.

(Only big business generally ranks lower than Congress.) Until the Abscam evidence is finally evaluated in the courts--and no indictments are anticipated in less than three months--cynics can say that their suspicions have been justified: all too many legislators are heedless of the national interest and also personally corrupt.

The FBI's dramatic undercover attack on white collar crime also left no doubt about a shift in priorities since the death of its first and legendary director, J. Edgar Hoover. Hoover liked to put emphasis on the showy crimes of his youth: bank robberies and kidnaping. In the political area, he concentrated on spies and groups that he considered leftist. He did not at all mind his agents picking up scandal, mostly sexual, about members of Congress; but he filed it away to use as a club over legislators' heads, sometimes even informing the Congressman of what he knew (promising as a favor to keep it quiet). And in undercover work, he relied heavily on paid informants. He did not want his agents to be sullied by posing as other than what they were: clean-cut types in impeccable white shirts.

In the post-Hoover era, Hoover's successors have sought to reform the agency. They banned such routine FBI tactics as illegal break-ins. First Clarence Kelley and then the current director, William Webster, steered the FBI away from such simple federal offenses as bank robbery into the more complex areas of white collar crime. This meant going undercover--and enduring the attacks that such operations can bring. Over the past two years, the FBI has been engaged in nearly 100 separate undercover operations --and with impressive results. Last year, these investigations produced 2,817 arrests, 1,372 convictions and the recovery of $318 million in stolen property.

These operations began with the FBI joining local police in setting up phony fence operations--often in storefronts. There stolen goods were readily purchased, and at the proper time the unsuspecting sellers were stung. The scams ranged from Operation Tarpit in Los Angeles, where the expenditure of $450,000 bought some $42 million in hot goods, with 256 arrests, to Operation Lobster in Boston, where agents recovered 17 huge truckloads of stolen goods that were stuffed with $3 million in loot. As a result, Boston area hijackings dropped from about 50 a year to only two since this sting ended in March.

It was through the recovery of stolen goods that Abscam started. It grew out of a rather routine undercover scheme in the New York area to recover stolen securities and paintings. In return for a favorable recommendation to reduce his sentence, FBI agents persuaded Mel Weinberg, a convicted swindler, to help them get thieves to resell their loot to the FBI'S fake fences. The agents used the ruse of claiming to represent a Middle East sheik interested in purchasing the stolen goods.

Informer Weinberg, however, held out a bigger prospect. He named two associates who, he claimed, had arranged shady deals with the mayor of Camden,

N.J., Angelo Errichetti. The undercover agents now sought guidance from their superiors on whether to follow Weinberg's leads into the complex field of political corruption. Neil Welch, the FBI's top man in New York City, readily approved. He had long wanted to press harder against white-collar crime. But Welch also needed higher approval, first from Francis M. ("Bud") Mullen Jr., a Washington superior in charge of all FBI investigations into white-collar and organized crime. Finally, Director Webster's approval was needed.

In March 1978 both officials gave their go-ahead.

With top level approval and ample funds now available, the FBI scam grew ever more elaborate. A swarthy agent, still unidentified, was picked to play the fictitious sheik, Kambir Abdul Rahman. Variously portrayed as being from Oman, Lebanon or the United Arab Emirates, the impostor set up temporary residence in a 62-ft. yacht that docked in several posh Florida marinas. As the flag vessel of the FBI'S secret fleet, the cruiser, seized by customs officials from marijuana smugglers, was first named the Left Hand and later the Corsair. "It gleamed with the predictable varnished parquet decks, teak paneling--and a wide variety of eavesdropping and recording devices. The landlubberly FBI crew who manned it, however, promptly blew out one of its engines--and thereafter pretended to be in great fear of punishment from the all-powerful sheik.

At the same time, the FBI provided its sheik with a phony business front called Abdul Enterprises, with offices in an undistinguished modern office building on Long Island. More imaginatively, the agents acquired an expensive two-story colonial brick house in a fashionable area of Washington, B.C. It was rented, for $1,200 a month, from a reporter for the Washington Post who had been assigned temporarily to New York City. The agents furnished the first floor with expensive antiques borrowed from the Smithsonian Institution and spent some $25,000 on renovations. These included an elaborate alarm system (to protect the antique furniture, the reporter-landlord was told), new chandeliers, other lighting fixtures, and a false ceiling in the basement--presumably to conceal TV cameras and microphones. On a visit, the reporter found a locked door off the base ment recreation room. The key, explained one of the new tenants, had been left at his office. In fact, the room contained television cameras and recording equipment. Neighbors on the quiet street were puzzled by the new tenants. Said one: "We thought it was a bunch of gays--all these good-looking young men, who kept changing."

Other operational sites were lined up: hotel suites at the Hilton Inn and the International Hotel, both at New York's Kennedy International Airport; an elegant suite at Philadelphia's Barclay Hotel; a condominium in the Regency Towers, along the seashore in Ventnor, N.J. For flexibility, another sheik was created, Yasser Habib. He claimed that he might one day have to flee his home country and seek asylum in the U.S. That asylum could be provided if a member of Congress would introduce a private bill, granting him special status to bypass normal immigration procedures. The sheik would, of course, generously reward any legislator willing to sponsor such legislation. (In past years as many as 7,300 private immigration bills had been introduced in the House, and such mere introduction could indefinitely postpone any deportation proceedings against an alien already in the U.S. After this rule was eliminated in 1971, the number of these bills dropped, to 662 last year. Full passage by both chambers of Congress is now required for admission of an alien to the U.S. outside of quotas.)

With the actors and stage sets in place, Abscam went into action. According to Justice Department sources, events unfolded as follows:

The agents sought out their first quarry, Camden Mayor Errichetti, 51, who is also a New Jersey state senator. Errichetti listened attentively as the undercover agents explained that their sheik was interested in investing money in the Camden seaport and might like to open a casino in Atlantic City as well. Television cameras put the scenes on tape as the mayor said he could help the sheik with his investments--for a fee of $400,000. Errichetti accepted $25,000 in cash as a down payment for his services, according to Government sources. To get a casino license, Errichetti said, Kenneth MacDonald, vice chairman of the Casino Control Commission, would need $100,000. When Errichetti and MacDonald later visited the Abdul Enterprises office on Long Island, the two officials picked up a payment of $100,000--an act duly recorded on video tape.

Errichetti soon escalated the level of action. He showed up last March at the Corsair, now docked in Delray Beach, Fla., to meet the legendary sheik Kambir Abdul Rahman face to face. This time he had with him New Jersey's four-term Democratic Senator, Harrison ("Pete") Williams, 60. Meeting in the yacht's salon, the visitors spoke to the sheik through an interpreter, a dark-complexioned agent who conveyed their words to the sheik in something approximating Arabic. Nodding and smiling under his burnoose, the sheik, who claimed to speak little English, managed to express his uncomplicated desires: he wanted to invest in land and casinos in Atlantic City, as well as in a U.S. titanium* mine in Virginia. But he was unfamiliar with the ways of politics and finance in the U.S. and needed the help of his experienced guests.

The Senator raised his voice to convey his clear concurrence and told the interpreter: "You tell the sheik I'll do all I can. You tell him I'll deliver my end." The deal that began that day took at least three more meetings over several months to complete. In Manhattan's Pierre Hotel, the sheik's aides agreed to invest $100 million in the titanium mine and to give Williams an undisclosed share of the mine's stock without charge. At a rendezvous in Arlington, Va., the Senator said he would talk to high officials in Government to seek military contracts to help the mine prosper. As he was about to catch a plane to Europe from Kennedy Airport, Williams accepted the stock certificates. They had been made out to a longtime associate of the Senator's, Alexander Feinberg, a New Jersey lawyer who had endorsed the stock, making it transferable to Williams. According to the Justice Department sources, all of Williams' transactions with the sheik's agents were filmed.

The ubiquitous Mayor Errichetti also introduced the sheik's pals to Howard Criden, a relatively obscure Philadelphia lawyer who had made big profits in real estate. When he learned of the sheik's desire to spread his vast wealth, the soft-spoken Criden was far from quiet. He passed the word to four members of Congress, all of whom succumbed to the FBI's sting.

One by one, Congressmen turned up at the FBI'S rented house on Washington's W Street, often with Criden at their side, to learn about the largesse of the second FBI sheik, Yasser Habib, the one who was hoping to find asylum in the U.S. Habib welcomed his visitors under lights so bright that the lawmakers squinted. These lights had been installed to facilitate the secret videotaping, but the sheik's aides explained that he kept them bright because he missed the blazing sun of his homeland. To each Congressman, the pitch was the same: the sheik feared trouble from radicals in his homeland and wanted assurance that he could find permanent sanctuary, if needed, in the U.S. He did not, of course, expect anyone to help him for nothing.

To the dismay and, indeed, the later disbelief of his colleagues on Capitol Hill, one of the legislators Criden got interested in the sheik was New Jersey Democrat Frank Thompson, 61, a most admired and respected member of the House. Although Thompson was not photographed picking up any cash, Criden accepted a satchel containing $50,000--and, according to Government sources, he was taped saying he was doing so for the Congressman. Thompson's own words of willingness to help the sheik had been recorded earlier.

A middleman expecting to be generously rewarded for his efforts by the sheik, Criden also brought Pennsylvania Democrat Raymond Lederer, 41, Pennsylvania Democrat Michael Myers, 36, and New York Democrat John Murphy, 53, into Abscam. Myers and Lederer were filmed accepting $50,000 each. Murphy, who has been under investigation by the House Ethics Committee, was more wary. In an almost comic scene, he sparred with Criden over who would pick up the suitcase of bribe money in a Kennedy Airport hotel; Criden lost, and walked out with the cash. Pennsylvania Democrat John Murtha, 47, went to the Washington house at Criden's urging and was taped agreeing to split $50,000 with other Congressmen, but never picked up any money.

Two Southern Congressmen found their way into the Abscam web through other intermediaries. South Carolina Democrat John W. Jenrette, 43, apparently was tipped off by a businessman-friend, John Stowe of Richmond. According to Government sources, Stowe was filmed accepting $50,000, and Jenrette was recorded later acknowledging receipt of the money. The only Republican tagged so far is Florida Congressman Richard Kelly, 55, one of the House's most erratic legislators. Kelly apparently learned of the available cash from a chain starting with a convicted stock swindler and leading through an accountant and an East Coast mobster, all three of whom had expected to acquire $50,000 each from Sheik Habib. Only Kelly, however, received a delivery. The cameras in the W Street house caught him stuffing $25,000--200 $100 bills and 250 $20 bills--into his suit, coat and pants pockets and asking: "Does it show?"

As greedy politicians at lower levels of government rushed to get their share of Abscam's bribe money, the FBI's operation was getting too complex and expensive. The agents had promised to hand over more money in bribes than they could deliver. At some point the spigot had to be turned off. "We found people climbing all over each other to get some of the action," claimed one FBI official. "We were mystified."

The FBI decided to shut the operation down on Saturday, Feb. 2. The agents knew that a number of news organizations had heard rumors about the sting and were about to break the story. They asked reporters for these organizations to hold off until some 100 agents could complete a rush of windup interviews on that Saturday.

NBC-TV had been dogging the story for two months--setting up two Winnebago vans near the FBI's W Street hideaway, photographing visitors through tinted windows. The crews could not turn heaters on in their vans be cause that would fog up the windows. "It was so cold the orange juice froze on a couple of nights," said one benumbed NBC reporter.

Neighbors had called police about a suspicious vehicle, but a quick-witted reporter shooed officers away by protesting: "What's the matter with you guys? You're screwing up our investigation." An NBC van was parked near Williams' home in Washington even before the FBI agents came to inform the Senator that he was a subject of investigation. And so the Senator's look of surprise and dismay appeared on prime-time television.

The most detailed early reports were in Long Island's Newsday and the New York Times, the latter's report apparently based on an internal--and normally secret--Justice Department document called a prosecution memo or "pros-memo." That is a prosecutor's chronological summary of a mass of FBI evidence, and copies are sent to relevant FBI officials. The published details of the Justice Department's information brought howls of protest from Congress and also from the American Civil Liberties Union. Attorney General Civiletti was outraged too; he promised a thorough internal investigation to find the leakers. The flood of pretrial publicity could jeopardize any prosecution the Justice Department tries to bring. But one veteran of such internal Government probes called them "fools' errands."

The leaked prosecution memo later turned out to be unfair in making no distinctions of any type among the potential bribery cases. Civiletti told the Senate Ethics Committee that some of the cases were sure to be prosecuted, while others might require more investigation and a few might prove too weak for indictments. Other Government sources later broke the cases involving the eight members of Congress into similar categories. The evidence was termed strongest against Williams, Jenrette, Kelly, Myers and Lederer; that against Thompson and Murphy was called weaker but still strong. Murtha's case, it was said, might possibly be dropped.

Regardless of the degrees of evidence, most of the accused members of Congress rushed to deny any wrongdoing. A few offered novel defenses. Jenrette said that when he met the Arab impostors, his memory was hazy because he had been drinking. "I was in bad shape," he recalled. "It was a full moon, and I had three drinks. Or I had three drinks and it was a half moon." His wife was somewhat supportive, adding: "Maybe they gave him so much to drink he said 'Oh yeah' to everything they asked. But he didn't come home with the $50,000." A New Jersey state senator, Joseph Maressa, on the other hand, readily admitted taking $10,000 in what he called "legal fees" and added: "It was like the Arabian Nights, the Ali Baba situation. The portrait that was painted was so convincing. It almost became patriotic to take their money. You know, let's take some of that OPEC oil money. It's our tax dollars."

The most disingenuous denial was given by Congressman Kelly to NBC's David Brinkley in a televised interview.

Kelly agreed that he had stuffed the money into his pockets, all right, explaining: "Ten thousand dollars in new hundred-dollar bills is little more than a half-inch thick." He said he put all of the cash, $25,000, into the glove compartment of his car. Then he placed it in a file cabinet in his office and spent $174 for small purchases like lunches. Finally, he gave all the rest back to the FBI. But why had he taken the money in the first place? The Congressman said he had done so as part of his own "investigation" of "the gangsters and gunmen" he had met in the W Street house who obviously were doing something "crooked." He said of the FBI investigators: "When they blew the cover on their case, they blew the cover on mine."

News of the FBI's ploy inspired several other politicians to proclaim that they had been enticed into the lawmen's game but had refused to play. Most of these had been approached by Joseph

Silvestri, a New Jersey real estate dealer whose pushy tactics aroused the suspicions of some of his intended clients, including three New Jersey Congressmen.

Among his other maneuvers, Silvestri told a wealthy socialite in Washington that, as he apparently believed, the sheik in the Washington house would be willing to contribute to political campaigns. Quite innocently, it seems, she passed the word to South Dakota Senator Larry Pressler, whose forlorn try for the Republican presidential nomination was then still alive but in need of cash. Silvestri drove Pressler to the sheik's house, where the candidate assumed he was to meet some men who had formed a legal political action committee. But when Pressler asked about their PAC, he was astounded by a counter-question: "What's a PAC?" When they offered to donate money anyway, Pressler backed off, saying: "Wait a minute, what you are suggesting may be illegal." Pressler quickly rejected any idea of a donation and walked out of the house. Later, FBI Director Webster called the Senator to say he had performed "beautifully" on the FBI'S video tape. Commented Pressler: "I find it somewhat repulsive that I'm on tape, but now I'm called a hero. It's a sad state of affairs when it's heroic to turn down a potential bribery situation." The fallout from Abscam was indeed a serious matter. Along with the further erosion of public confidence in

Congress, opponents of legalized casino gambling felt vindicated in their long-held cynicism about the ability of public officials to keep such high-stakes operations honest. Not only had one member of the New Jersey casino control commission apparently been caught taking a $100,000 bribe to help the FBI'S sheik get a casino license, but the FBI promptly notified the four remaining members that it wanted to interview them too about just how free the commission is from criminal influence.

The Abscam tapes allegedly also record Senator Williams boasting that he had used his influence with the commission to save one group of hotel developers $3 million, apparently by getting the commission's approval to renovate rather than rebuild a structure housing its casino. The company Williams had helped had employed his wife Jeanette, first as a director, then a consultant, paying her $18,000 a year. At the same time, Mrs. Williams served full-time at a $33,000 salary on the staff of the Senate Labor Committee, of which the Senator is chairman.

The events in Abscam's aftermath will certainly stretch out for months, probably even years. First the relevant Justice Department prosecutors must decide just which of the roughly 30 cases to pursue by seeking grand jury indictments. The department's plan seems to be to split up the cases, rather than consolidate them, and then present evidence to grand juries in New York, Philadelphia, New Jersey and Washington, D.C. Any trials of indicted officials would be months away--and there could be lengthy legal clashes over the admissibility, for example, of the FBI's video tapes.

Meanwhile, committees in both the Senate and the House may well continue to demand that the evidence against the members of Congress be yielded by the Justice Department. There is not much likelihood that they will succeed--and without such cooperation they have little or no case against their suspect members.

Actually, some of the Abscam victims might prefer to be judged by their colleagues in Congress rather than by criminal trial juries. Declares Leon Jaworski, who has been on both sides of such interbranch conflicts, as special Watergate prosecutor and special counsel to a House committee probing the Korea bribery scandal: "Congress has never done a very good job of investigating itself. The House committee should defer to a speedy and thorough investigation by the Justice Department."

Was Abscam an operation in which the FBI'S actor-agents got carried away by openly offering bribes and urging their acceptance? Justice Department attorneys admit that a few leading questions by agents might turn up on the many tapes, but they insist that the entire procedure was too closely supervised to be seriously tainted. For one thing, the first tapes were quickly reviewed by officials at the department's highest levels to see if the tactics used by the actor-agents in the field were proper. Moreover, each actual cash payoff was witnessed by a Justice Department attorney, who sat in an adjoining room and watched a closed-circuit TV monitor. In some instances, the attorney would telephone one of the agents serving the sheik, if the bribe suggestions were getting too bold. The agent picking up the telephone would be advised to ease the pitch.

Even as one House subcommittee announced plans to investigate the FBI'S internal ground rules for its sting operations, Director Webster expressed his belief that the FBI and Congress as a whole have compatible interests. Said he: "It's been my experience that public officials--say in Congress, for instance--want to get the rotten apples out. They're proud of what they are doing, and they are angered by anybody that is bringing discredit upon them by association."

He suggested that Abscam had not targeted individual public officials "just to see what they are up to, but grew instead out of investigative leads." That, he said, is "proper."

Abscam is not the only FBI operation to lead into higher levels of political corruption. TIME learned last week that another FBI sting called Brilab, for "bribery labor," had fooled the New Orleans Mafia boss, Carlos Marcello, into believing that two FBI agents actually were insurance brokers seeking a cut of the lucrative fees that they would acquire by selling health and welfare in surance contracts for state employees in Texas and Louisiana, as well as municipal workers in Houston.

Marcello, who claimed to have great influence in arranging such insurance, told the agents which politicians could be bribed--and readily accepted a $5,000 payment for his advice.

Marcello dined, drank and traveled with the disguised FBI men, laying out a trail of corruption that led to the staff of Louisiana Governor Edwin W. Edwards. Various state officials in Texas and local officials in Houston are also under investigation. Marcello further revealed to the agents a plot to bribe a federal judge in Los Angeles with up to $250,000 to fix a racketeering-murder trial of five Mafia figures. The judge was tipped by the FBI before he was approached by the plotters. The Brilab scam was shut down last week.

Apart from its covert schemes, the FBI's new interest in political corruption has concentrated on at least one other U.S. Senator: Nevada Democrat Howard W. Cannon. A court-authorized FBI wiretap on the telephone of Allen F. Dorfman, a former Teamster consultant who had long maintained influence over the huge pension funds of the various Teamster unions centered in Chicago, led agents to question whether Dorfman might have enticed Cannon into shaping a bill deregulating the trucking industry into a form more acceptable to the Teamsters. As chairman of the Senate Commerce Committee, Cannon was a key figure in any such legislation. Cannon's suspected payoff was to get Dorfman's help in purchasing valuable land owned by the Teamster pension fund in Las Vegas, where Cannon also has a home. But the deal was never consummated.

Says Cannon: "I've never heard anything more absurd in my life."

Just where the FBI's new activism in probing more sophisticated crime might lead--and whose white collar might be smudged--remains a great concern in Washington. Rumors persist that despite the leaks, not all of the Congressmen entangled in the Abscam net have yet been publicly identified. Thus, though all but one of the members of Congress pinpointed so far were Democrats, most Republicans cautiously refrained from making the new scandal a partisan political issue. An exception was Pennsylvania Republican Bud Shuster, chairman of the House Republican policy committee, who claimed, "History teaches that when one party is in power a long time, corruption increases. This is the result of one party's being in control of Congress for 25 years." Protested a Democratic House leader, Washington's Thomas Foley: "He wasn't saying that about Watergate." Insisted New York Republican Congressman Barber Conable: "There's no plus for Republicans in this. It's a bad show, and we're all going to lose from it." -

* Titanium is a high-strength, lightweight metal especially useful in aircraft construction. Demand for its use has been growing, and it is now in particularly short supply in the U.S. and Great Britain.

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