of the united statesarchive.gao.gov/f0302/108983.pdfto.the federal resources utilized in the...

Comptroller General OF THE UNITED STATES

Resources Devoted By The Department Of Justice To Combat White-Collar Crime And Public Corruption

This GAO study determines the resources (dollars and personnel) devoted by various units of the Department of Justice to investigation and prosecution of white-collar crime and public corruption.

The Attorney General has designated white- collar crime and public corruption as Justice’s top priority area along with narcotics and organized crime. The Federal Bureau of Inves- tigation has designated white-collar crime, organized crime, and foreign counterintelligence as its top priorities.

The Department of Justice estimated that about 5.1% of the resources expended in’ fiscal years 1977 and 1978 were spent on white-collar crime and public corruption.

The report was requested by the Chairman, Subcommittee on Crime, House Committee on the Judiciary.

I I 108983

gj J/f63 MARCH 19, 1979

COMPTROLLER QPNLRAL OC THE UNIT&D RATU

WISntllQTCN, D.C. -

B-179296

The Honorable John Conyers, Jr. Chairman, Subcommittee on Crime Committee on the Judiciary House of Representatives

Dear Mr. Chairman:

Your letter dated April 26, 1978, requested a comparative study'of the total Federal law enforcement resources utilized in the -detection, investigation, and prosecution of the so- called index crimes or street and violent crimes as opposed to.the Federal resources utilized in the detection, Fnvesti- gation, and prosecution of white-collar crime and political corruption.

Because most index or street crimes are investigated and prosecuted by St te and local resources, j,. the study Qoul d4h termine the resources (dollars and personnel) devoted by various components of the Department of Justice to the investigation and prosecution of white-collar crime

public corruption. The following Department of Justice components were contacted to determine the resources they have and were devoting to these areas:

1

--Federal Bureau of Investigation. (See app. I.)

' --United States Attorneys. (See app. II.)

--Criminal Division (Organized Crime and Racketeering, Public Integrity, and the Fraud Sections.) (See app. III.)

--Antitrust Division. (See app. IV.)

--Tax Division (Criminal Section.) (See app. V.)

--Civil Division (Civii Fraud Section.) ' L/---

(See app. VI.)

The information presented in these appendixes was derived from interviews with various Justice officials in each division and in the Department's Office of Management and Finance, and from reviewing computerized resource data at

B-179296

the Federal Bureau of Investigation. We verified only the Bureau's data. Subsequently, your office requested that information developed by your Subcommittee on the Law. Enforcement Assistance Administration be included in this report. This information is presented in appendix VII.

The Attorney General has designated white-collar crime

- .

and public corruption as the Department of Justice's top priority area along with narcotics and organized crime. The Federal Bureau of Investigation has designated white-collar crime (public corruption is a part of the white-collar crime program), organized crime, and foreign counterintelligence, as its top priority areas.

An analysis of resources expended showed that $111,558,572 and- $125,726,360 in fiscal years 1977 and 1978, respectively, were devoted to white-collar crime and public corruption by the six Justice components noted on page 1. This represented 16.3 and 16.8 percent of the $683,777,343 and $749,457,940, respectively, expended by these six components. In fiscal year 1979, five of the six components plan to devote $104,227,000 of their budgeted $661,945,000, or 15.8 perce t to white-collar crime and public corruption. The Executive 9 Office for United States Attorneys would not estimate the \ dollar amount of the United States Attorneys' budget that i would be devoted to white-collar crime and public corrup- 1 tion. $

<- The expenditures by the Justice Department components in fiscal years 1977 and 1978, to white-collar crime and

1 public corruption was approximately 5.1 percent of the

\

Department's total budget each year. The planned expenditures in 1979 by five of the six components is approximately 4.2 percent of the Department's total 1979 budget, exclusive of the United States attorneys. Appendix VIII contains a breakdown of the actual full-time employee positions and dollars expended for fiscal years 19?? and 1978 and approved for 1979 for all major components of the Justice Department.

More resources may be devoted to white-collar crime and public corruption than the above statistics show. A large portion of resources devoted to civil cases in the Antitrust Division are white-collar related; but since they are not handled as criminal matters, they were not included in this study. Thus, grants made by the Antitrust Division to aid States in antitrust enforcement efforts were not included in this report.

2

B-197296 ,-

As agreed with your staff, we did not obtain written comments from the Department of Justice on this report. However, we did discuss the information presented in the appendixes with Justice officials, and they agreed with the information presented. As arranged with your Subcom- mittee, we will provide one copy of this report to the Attorney General and one copy to the FBI Director with the stipulation that they not disseminate the report for 10 days or until released by you. Unless you publicly announce its contents earlier, we plan no further distribution of this report until 10 days after the date of the report. We will then send copies to interested parties and make copies available to others upon request.

We;: hope the information contained in this report will be helpful to you in your ongoing white-collar crime hearings.

Sincerely yours, A

of the United States

Contents

APPENDIX

I

II

III

IV

V

VI

VII

VIII

FBI

RICO

TURK Time Utilization Record Keeping system

Federal Bureau of Investigation

United States Attorneys

Criminal Division

Antitrust Division

Tax Division

Civil Division

Law Enforcement Assistance Administration

Department of Justice resources allocated by major components

ABBREVIATIONS

Federal Bureau of Investigation

Page

1

21

27

33

36

38

40

41

Racketeer Influenced and Corrupt Organization statute

APPENDIX I APPENDIX I

FEDERAL BUREAU OF INVESTIGATION

The Federal Bureau of Investigation (FBI) investigates possible violations of Federal statutes. If a possible violation of Federal law under its jurisdiction occurs, the FBI will investigate and present the case, if appropriate, to a U.S. attorney who will determine whether prosecution or further action is warranted. A breakdown by percentage of the FBI's investigative costs in the criminal area is shown on page 4.

The FBI has defined white-collar crime for its own use as:

"Those illegal acts characterized by deceit, concealment, violation of trust, and not dependent upon the application or threat of physical force or violence. They are committed to obtain money, property, or services; or to avoid the payment or loss of money, property, or service; or to secure personal or business advantage."

The following classifications within the FBI's investigative jurisdiction have been designated as white- collar crimes under the FBI's white-collar crime program:

-- 17 Veterans Administration. -- 27 Patent Matters. -- 28 Copyright Matters. -- 29 Bank Fraud and Embezzlement. -- 36 Mail Fraud. -- 46 Fraud Against the Government. -- 49 National Bankruptcy Act. -- 51 Jury Panel Investigations. -- 56 Election Laws. -- 58 Bribery; Conflict of Interest. -- 62 Administrative Inquiries. (See #62 p. 11.) -- 69 Contempt of Court. -- 72 Obstruction of Justice. -- 74 Perjury. -- 75 Bondsmen and. Sureties. -- 86 Federal Lending and Insurance Agencies. -- 87 Interstate Transportation of Stolen

Property--Check Cases and Fraud Matters. --119 Federal Regulations of Lobbying Act. --122 Labor Management Relations Act, 1947.

1


--125 --139 --141 --147 0-156 --159

Act --181 --186 --194 --195 --196

Railway Labor Act. Interception of Communications. False Entries in Records of Interstate Carriers. Housing and Urban Development Matters. Employee Retirement Income Security Act. Labor-- Management Reporting and Disclosure

of 1959. Consumer Credit Protection Act. Real Estate Settlement Procedures Act of 1974. Hobbs Act-- Corruption of Public Officials. Hobbs Act--Labor Related. Fraud by Wire.

On October 1, 1978, the following new classifications were added to the white-collar crime program:

--205 Foreign Corrupt Practices Act of 1977. --206 Fraud Against the Government--Department of

Defense. --207 Fraud Against the Government--Environmental

Protection Agency. --208 Fraud Against the Government--General Services

Administration. --209 Fraud Against the Government--Department of

Health, Education and Welfare. --210 Fraud Against the Government--Department of

Labor.

The FBI manual states that

1,* * * White-Collar Crime can be present in any of the classifications investigated by the FBI* * *."

The FBI has designated the white-collar crime program a number one priority. Public corruption is a priority area within the white-collar crime program. The organized crime program and the foreign counterintelligence program are also number one priority areas.

The classifications of white-collar crime where the FBI has spent 1 percent or more of its total white-collar crime investigative cost in fiscal years 1977 and 1978 are shown on page 5. In 1978, 2,338 subjects were convicted of felonies and 696 subjects were convicted of misdemeanors resulting from FBI white-collar crime investigations.

APPENDIX I

To investigate violations of Federal law under its jurisdiction, the FBI maintains 59 field offices. A breakdown of the percentage of investigative manpower devoted to white-collar crime in 1978 in each of these 59 field offices is shown on page 6.

Beginning in fiscal year 1977, the FBI implemented the Time Utilization Record Keeping (TURK) system which captures, by FBI classification, time spent by investigative personnel. (See pages 7-18). This time data provides the basis for distributing each individual investigator's salary to FBI classifications. The TURK system collects time data of all nonsupervisory special agent personnel and those support personnel involved in an investigative capacity in each of the 59 field offices. The actual time charged to an investigative classification is shown on page 19.

The FBI does not have a single classification for white- collar crime and public corruption because these violations can take place under many different statutes. Recent TURK . reports show that 19 percent of the work hours and cost charged to the Organized Crime Program under the Racketeer Influenced and Corrupt Organization (RICO) statute are related to white-collar crime and public corruption. These cases are handled by the FBI's Organized Crime Section instead of the White-Collar Crime Section. On October 1, 1978, the FBI surveyed all field offices to identify the pending public corruption cases. In this survey, 287 of the 892 identified public corruption cases, or 32 percent, were classified under the RICO statute.

Page 20 shows the cost in fiscal years 1977 and 1978 and the anticipated costs in 1979, including supervisory agents, clerical, travel, and other costs for white-collar and organized crime investigations.

3


Criminal Categories Where Investigative Resources Were

Spent by the FBI in Fiscal Years 1977 and 1978

Percent of total investigative-costs

1977 1978

White-Collar Crime (note a) 17.0 19.9 Organized Crime (note b) 8.5 12.3 General Interstate Crimes 11.9 10.7 General Bank Crimes 7.1 6.3 General Government Crimes 2.0 1.1 Civil Rights 1.9 2.0 Fugitives 9.4 6.9 General --Other 3.8 2.5

a/These figures have been adjusted upward to reflect the portion of organized crime that relates to white-collar crime.

b/These figures have been adjusted downward to reflect the portion of organized crime that relates to white-collar crime.

APPENDIX I ,”

APPENDIX I

FBI Categories Where 1 Percent or More of Its Total

White-Collar Crime Investigative Efforts Have Been

Directed (Fiscal Years 1977 and 1978)

White-Collar Crime

Percent of cost of white- collar crime effort

1977 1978

Veterans Administration Matters Copyright Matters Bank Fraud and Embezzlement Fraud Against the Government Bankruptcy Election Laws Bribery, Conflict of Interest Administrative Inquiry (See #62 p. 11.) Federal Lending and Insurance Agencies Interstate Transportation of

Stolen Property--check cases, confidence games, and fraud by wire

Labor Management Reporting and Disclosure Act of 1959

Interception of Communication Housing and Urban Development Matters Hobbs Act-- Pub1 ic Corruption Hobbs Act-- Labor Related Fraud by Wire (note a) Other White-Collar Crime Matters

Total

3 6

26 13

3 1

2, 1

31

1 1 5

2, (b) -3

i-m

2 3

24 17

2, 3 2 2

15

1 1 5 6 1

12 3

100

s/In fiscal year 1977, Fraud by Wire was part of the Interstate Transportation of Stolen Property.

b/Not available.

5


Percentage of Investigative Manpower Devoted to

White-Collar Crime/Public Corruption by FBI

Field Offices in Fiscal Year 1978 (note a)

Field offices Percent Field offices Percent

Albany 12 Albuquerque 15 Alexandria 16 Anchorage 22 Atlanta 19 Baltimore 13 Birmingham 21 Boston 15 Buffalo 13 Butte 17 Charlotte 20 Chicago 17 Cincinnati 20 Cleveland 19 Columbia 18 Dallas 26 Denver 16 Detroit 23 El Paso 11 Honolulu 10 Houston 18 Indianapolis 17 Jackson 24 Jacksonville 16 Kansas City 19 Knoxville 16 Las Vegas 14 Little Rock 18 Los Angeles 23 Louisville 13

Memphis Miami Milwaukee Minneapolis Mobile Newark New Haven New Orleans New York Norfolk Oklahoma City Omaha Philadelphia Phoenix Pittsburgh Portland Richmond Sacramento St. Louis Salt Lake City San Antonio San Diego San Francisco San Juan Savannah Seattle Springfield Tampa Washington, D.C.

30

l"g 19 26 14 24 28 10 11 26 22 17 28 17 17 17 18 17 24 18 15 13 21 16 13 23 14 9

a/This does not include any organized crime investigative - manpower cost which is related to white-collar crime

or public corruption.

6

,.


SyWu name The FBI Cc&al Records System. Syutcm htiw: a. Federal Bureau of investigation, J. Edgar

Hoover FBI Building, 10th and Pennsylvania Avenue NW., Wuh- ington, D.C. 20935; b. S9 field divisions (see Appendix); c. I4 Legal Attacba (see Appendix).

Cati of Wvldtt& cowred by tbe system: a. Individuals who relate in any manner to offtcial FBI investigations including, but not limited to suspects, victims, witnesses, and clorc relativa and asso- ciata that are relevant to an investigation.

b. Applicants for and current and former personnel of the FBI and persons related thereto that are considered relevant to an applicant mvmtigation, pmoMel inquiry, or persons related to personnel mat-

rind appointem to sensitive positions in the United and pemoaa related thereto that are considered

relevant to the investigation. d. Individuals who are the aubjazt of unsolicited information, who

offer unsolicited inform&on rcqwt assism, and make inquiries concerning record material, ‘including general correspondence, con- tacts with other agencies, b&nemea, mstitutions, clubs,-the public and the news media.

e Individuala, amociated with admbxistrative operrtions or services iucluding pertinent functiona, contrrtors and pertinent persons relat- dthcrcto.

(All manner of information conccming individuals may be acquired in connection with and relating to the.varied investigative responsi- bilitiem of the FBI which arc further described in “Cntegones of Records in the System.” Depending on the nature and scope of the investigation thkx information may mclude, among other things, per- aonal babita and conduct, financial information, travel and organiu- tbnal dilidon of individuals. The information collected is made a maiter of record and plac+d in FBI film.)

kcgcrke of rcwrdn la the qatcmu The FBI Central Recorda S~8tcm-The FBI utilii a centid rewrds rystem of maintaining it8

The FBI has 334 cRssitlcationa wzd in itr buic fling rystem. They pcmin primarily to Federal violationa over which the FBI

hr investigative jurisdiction. However, included in the 204 clamifl- lions arc monnc& the over 5;

applicant, and administrative matten to facilitate Nin# whunc. These cluriflcationr are u follows (the

word “okdae” following the name of the claaaification indicatea that documcntr are no longer being fded under this beading (al- tbouph information b mrinulned under this hading)):

1. Traininn Schools: National Academy Matters: PBI National AgdNy; A-

OnP licants. .Cpvera general infor+ion ~conccrnin

f * the

Academy, mcluding background mvesttgatiom o mdi-

2. Neutralit Mettcrs. Title 18 United Statea code Sections 9S6 mid 958-962: title 22. United &es Code. Sections i934 sod 401.

3. Overthiow or D&u&on of the Oovhnment. Title 18, United stata co& section 2385.

4. National Fiiutmr Act; Federal Firearmn Act; ststc Fii Control A&stance Act; Unlawful Porsessioa or Receipt of Firearms. Title 26, United States Code, Sections 1801-5812; Title 18, United States Code, Sectiona 921-928; Title 18, United Stata Code, Sections 1201-1203.

J. Income Taa. Cover violations of Federal income tax laws to the FBI. Complaints are forwarded to the Commimioner

tcmal Revenue Service.

Source: Federal Register, Vol. 43, No. 189 - Thursday, Sept. 28, 1978.

7


6. Interstate Transportation of Strikebreakers. Tie 18, United St&a c!ade, section 1231.

7. Kidnaping. Titk 18, Unitgd Stata Cock, SW&MIS 1201 md 1202. --

8. Migratory Bird Act. Titk 18, Unitad States Cede, Se&m 43; Title la, United Statem Code, !kctiom 703 tbrouSh 7f8.

9. Extortion. Title 18, United Sm!a Cule, Sectimw 876, 877, 87s. and 873.

laRedCms&t.lWkl8.U&tcdSmcsCadc,Scctiom7W~d 917.

11. Tax (0th~ than Iname). TW lAuddo coven mtllpkha umcunkg vbttkwv of Intcmd Rewtm hwu u they apply to otbuttbmelcQhdmchlcmltlty~hlcouKdpodtatua,

2391. 1s. Theft fium ItaeNme shipaent. Title 18. United States Code,

se&cm 6% ‘ritk 18. United Statea Cuk. Section 660; Titk 18,

profits. - 25. S&x?+ Service Act, Se1ective Trainin and v Act.

J z ~&~s9Statea Code, Section 462; TI e 50, Ullltad States *

24. h~tcmtete Tnnsporta+m ~.sa”cs Motpr Vehicie; hwmtate ;ozei$;’ s;&T”k t8, thmd T” code, See-

2?. Rtmt Matter. Tit& 35, United Stata Code 28. Copyright Matter. Titk 17, United States C&e, Sections 104

and los.

8


29. Bank Fraud and Embezzlement. Title 18, United Statea Cock, Sections 212, 213, 215. 334, 655.657. lW4.1006, loos, 1009, 1014, and 13% Title 12, United St&a Code, Section 172S(g). I

30, Interstate Qurrrntine Law. 1922-25. gubj@cta alleged vi&ton of Acl of February 15, 1893, M amended, n of pcsons atmicted with infectious diseases 8aK.s

arding interstate cnvct atso invotvcd uq-

tawfut transportation of animals, Act of February 2, 1903. Re&mb were ma& to Pubtic Health Service und the Department of Agticul- ture. *

3 1. White Slave Traffic Act. Title t8, United States Code, !&?iotu 2421.2424.

32. Identification ( Fingerprint Matters). T’hi8 clusificati coven general iqtfarmation conce* ldentif&&oo (fingerprint) tnattcn.

33. Uniform Crime Reportin inforpution cay- the.U. nit@

. This cta&!Ication covers gcaczal any Cfiy Repof& a per&c apm

gte of rtatuti~ of crtmuul v-totahona throughout the Umted

34. Viotation of Lacy Act. 192243. Unkwfur tram&Ma&ion aad

the FBIc-

olTicaa of that Agency. 36. Mait Fraud. TItle 18. United States Gide, Sectioa Mi. 37. F&e Clnima Against the GQV- 1921.22.. St&&t& 8&

mitted ctainls for allotma& luJcatioMl trang# c4xqJemtioeuvet emu8 under the sweet Bill. I..ettcn were galerauy referrut ekewllere (Vcteraas Bureau). Violators apprehended for vlow of A&k

i9. Falaety Claiming Citizen&ip.Title 18, United SMer cork; See- tions 911 and 1015(a)(b).

40. Pusport and Visn Matter. Titk 18. UttitaJ Stata C&G Set- tiotls 1541-1546,

41. Exploaivu (obsokteh TiUr 50, United SW Code, Section 121 through 144.

42; Deseltn; Daerter, Harboring. Ti rq Lhitad states Code, Sections 808 and 885.

session, or Sale of Emblema and Inzigs& Ilkgal Ma&&rue, Pp sasion,orWuringofCiDefeuaeinai~Miscet~F or Using Forged Grtificate d Diac~ from Mitiwy or N 73 Servig MisccBucous, FaIscly bhkinp OR For&q l4Sav4 MiBtary, or-P-W-F Department or Agmcy d tbe Umted 7

or Counterfeiting Se&’ of tata; h+s of bw &eat

SealoftheUnitedS~tacnofthcSealraftbePLcydedorthVia President of the United Stata; Utmutbo+d USC of “Jolmay Hori- 1011” Symbol; Unrmthorized VW of *Smokey Bear” Symbol Title 18, united statu code, .%ctioo 70& 703, arKt lot, mtk II, Uaited States Code, -Sections 701, 705, 707. and 71q T& * Uttited State& C&e, Section 182; Titk 50, Appendix, United Sua Code, seaionr 22&1; Title 46, United States code, Section 249; Tii 18, Utited States Code, Sections 498,499,506,709, 711, Ill& 712, 713. ad tlr; Tile 12, United Stztes Code, seaiqm 1457 mtd t?23q Title 22. United Statu Code, Section tSl8.

44. CiviI Rightq Civil Rights, Ekctiom Lmvs, Voting Rights Act, 196s. Titk 18, United Stites Code, !Jections 24f, 242, and 24% Titk 42, United States Code, Section 1973, Titk 18, United tites Cede, Section 243; Titk 18, United States Code, Section 244.

45. Crime on the High Seaa (Included stowawap on &Ma and aircraft). Titk IS, United States code, Secti- 7, 13, 1243, and 2t99.

9


47. hr&rsonarion, Tick 18, United States Code, Sactiona 91Z 913. 915, and 916.

48. Postal Vioktfoo (Except Mail Frsud). Tl& clasiffcacion covers hquidu concerning the Portal Service and complaints pertaining to the theft of mad. Such complaiqta arc either forwarded to the Post- muter Ckmml or the neareat Postal Inspector.

49. National Bankruptcy Act. Title 28, United Stata code, S& - - rioor 151.1Ji

SO.. Involuntary Sctliitadc and Slavery. U%. Conatitutio~ 13th Amend-r; lltk 18, United Statqs code, Sectiona Ml-1588, 241, and 242.

51. Jury P&l Investigations. This classification coven jury panel kv~oua which are reqtmted by the appropriate As&taut At- torney oenml Thtae irivati&ptioM can be conduct6d only upoa 4ucharequeataldconrjrtofanindicuandpmqtcheclL

. S2, w Robbery, Embezzkwat, Ilkgal E%muakn or Dcstruc- thl of clov- t Property. ri It& unit6d statea c4xk !kctjoas

,. 641, 1024, 1660.2112, and 2114. S?. Excma ProfIta 00 Wool. 1918. Subjects possibk violatori of

c~catioo covera com- phiat rs#lved oonce3ning amu and other marten involving unportation and entry of merchandise into and the exportation of uaedmndise fmm the United Stata. Compkkta lsrc referred to the lKamtdioffiofthev.s.cuatomaSnria&lb6- simm of clMtcml& waahington, DC.

5s. cQuBt6erkiriag. This cwetmp covua coupkin received oamahlq allqpd tdoktiona of count6rftiting of Lr.yunb-~ d other obii&kns and securities of tbc Gowsnm pkinb am r&led to either I& r3ircctor, U.S. t3emct !3avic6, or rhe ntamroillceoftbatA ency.

56. Election Lawa T% de IS, United Statea Code, Sections 241.242, ,245, 591, 591, 593. 594, 595, 5% s97, 590, 599, 4X, 601, 602, 603, 604, 6OS, 606, and 607; Title 42, United Stata Code, Section 1973; Titk 26, United Stata Code, Sectiona PO12 and 9042; Title 2, United swa cc& scaianr 431, 435 433, 434, 43% 436 437.43% & 441.

ST. War labas Diaputas Act (otwlete). Pub. L. 89-77th toll-

58. Bribery; Conllii of Interest. Title ;l!, Unital St& code, !3octha 201403.205211: pub. L. 89-4 and 89-136.

59. World Wir Adjuried Comgmasticm Act. 1924-44 Bureau of tivestigatkn WY cbarsul with the duty of investigating elkgad vioktiona of all sectiona of the World War Adjlrated Compensation Act (pub. L. 472, 69th Congress (H.R 10277)) with the esccpticm of uctkll7M

60. Anti-T- Tii IS, llnited Stata Gxk, Scctiouu l-7, 12-27, and 13.

61. Treason or Mispr&sn of Trump. Title 18, Uaitcd States Cede. Suxiona 2381.2382, 2389,239Q 756, and 757..

10


224, 304, and MS) Domaic Poliu coOperat& Ei Law (Title 40, United States Code, Sections 321, 3223 $

t-Hour-Day a, 326); Fair

Credit Rc and

rtin Act (Title 15, United Stats &tie, Sectiom 1681q 168lr ; F eral Cigwtte hbeling ud Adwerthin~ Act (Titk p”J

1s. United States Code, Section 1333); Fe&r& Judichry Invca ’ *;%;; tiom Kickback Racket Act (Title 18, United Stati Co&, Set

874k I.an& lX&ica Mattq Othex Vii and/or Mattas; Civil - Sui*Micce~ sowen’ and sailord clvu swd Act d 1940 (Title 50, A Act of 1930 v

ia, JJnhd’ States cak; ScoUcmc SlCMm Tariff itle 19, United Statea Code, Section 1-k Unrepotted

swlwe, shiplncnt of cim (Tiie 15, United s&tea c&k& Sec. tltma 375 ad 376), Fti Labor Stydvdr Act d 1938 (Wage amI How hw} (Titb 29, United Statw C&s !htha 201atl9k cat spimcy (Title 18, United Stata Code, Se&m 371 (form&y So&m 88, Tltk 18. United Stata code); e&ctive Septembcx 1,194Q.

63. Miscelheous-Nonaubvenive This’ chWkuW m correspondence from the pubh .which dear m% r&t8 to matters withill FBI jlldsdictioioa

65. Ejlpionagc Attorney General Cruidelirkr ott F ’ Counterin- % 11905. tdli encc; &emal Security Act of 1950; ‘Bxecuti~

6lLcbmt rativc M8tters. This chm&cath awcrw’sach m in lhq autimobil~

“pp 1 Rlattemuldvouchcn ’

6 . Rtsonnell Matters Tilis chifiqatkm &hxtna ltdgmmdi, verrtigatiogof appticaats for employmeut with& FB!. *

68. Alaskan Matten (tikte). Thir c!aaaifiitioo m WI Investigationa in the Territory of Alaska prior to its baxming a state. - .

69. Contempt of Court. Tie 18, United States Code, Sectha 401, 402, 3285, 3691, 3692; Title 10, United Statea Chic, Scctkm 847; ud Ruk 42, Federal Rules of Crimii Procedure.

70. Crime M Indian RmervaUon; Inducing cOmvcyroce of Indian Trust Land; Crime on Government Rcscrvati~ F&n-t or Theft of Indian Property. Titk IS, United Statu C&de, Secth~ 7 and 13.

71. Biils of Lad Act. Title 49, United States Code, Sectho 121. 72. Obwuctiot~ o Criminrl Investigations. Title 18, United St&a “Is

code, scctiolls 1503 tktrougll 1SlO. - _ 73. AedicaUon for Pardon After Comhtion of sin- arsd

A l&m for Executive Ckmency. Tbit dln&fIcatiot~ cobcentr the F&s background ’ mvatigath in cottneotioo with pardon .applica- tbm and reqwsta for exaxtive clemency.

74. Periurv. Title 18. United Statea code, Sectiow 1621, 16& and 1623. ” -

75. Bondsmen and Sureties Title 18, United St&s Code, Sstho 1506.

76. B&x P

Federal Prisoner; -Y

and Racuc; Probation Vii l&or: Pare e Violator: Man&torv Re case Violator. Title 18. United iStat& Code. Sectioni 751-757, iO73 Title .lB, United St&a’ Code, Sections 3651-3656; and Title 18, Urnted Statea Code, Sectiona 4202- 4207, 5037, and 41614166. I

77. Applicants (S&al Inquiry, Departmenti and &kr Gowni- oxat Agcncia, except those having special ckssifications). Thir cks- sihtion coves the background investigations conducted by the FBI in connection with tbe aforementioned positions. .

78. Ilkgal Use of Government Transportation Reque~. Title 18, United States Code, Sections 287, 495, 508, 641, 1001 and 1002.

79. Mig Persons. This classification coven the FBI’8 Identifice- bon Division’3 ahtarm in the locating of missing pemoos.

11


60. Laborwry Research Matters. At FBI H uutarthiSCkMi- flation is wed for L&oratory “t, research matters field &Ice Bka this cladiition COVE the FBJ’r public drain matted uld iavolva ~&bytbcM~the 6er1e public, Federal a+ State rgm-

“*i”“i

cewpoElrronr,thelPcmmcdladotba

81. 00 Hoardtag. 19334% Gold Hwding inveulgat&at COII- dwtcdinvrordrncewithmActofMsh9,1933andBxecative Order imned Angnst 28, 1.933; B”LU iomucted by Depummt to gdlipl fugerinvntt bonr m 193s under the Gold Raewe

J$ ooneywndcncc referred to Secret Serv- a!.

82. War Risk h8uraace (Natid Swiu Life losomoce~ (obro- l&e). Thir clnsifkrr~ coven itivatigationa conductsd by the FBI io c-anncctio11 with dvil au&s Bled tinder thir rtatutc

113.coulldCkirnrTjliB~tioncoverr,rsque8t8lor&nrsi- g8tionofa6eapeadiiiothconrtofclaimafKmlthe-t Attorney Clenual in chup d the Civil Division of’ tk Dqwtqatt

86:Fakal~MiIauuanw A endea &IS, United Surer Code. Sectioo 645; Title 18, United f tatea Code, Sectiona 212, W&,215, 216, 217. 657, 6S8, looa. 1011. 1013, 1014, 1907, 1908 aqd

87. Intentate Transportation of Stolea Property (Fraud by Wii Radio. or Tekvisiool. Title 18. united Stata Cuk Sa%ions 2311. 2314, i315, and 2318.’ .

88. Unlwful Flight ta Ad Prosccirtio~, Cusbd Ty

, or Confine ownt; Unlwfid Flight to Aqkl Giving Tcstunony. ~tle 16, United states code, !ledioN 1073 and 1074.

89. Asultia tioo statute. #

or Killing a Fekr8l Offkcr, cblppackrarl--- Wle 18. Uaited suter code Scctka 111. 1114. 2232

90. Irreglati L k!de!id Penal I~toriwr Tltli II. bited swc!a code, !%wjonB 17918nd 1792

91. Bank Bur&ry; Bank Luwty; Bank Robbers Tii 18, Uniti Statea code, Se&i-2113. -.

92. Anti-Ru;keteaiag; A. R., LM Act; A. R., Iatcrflerence witb ’ Clovemment C!0mmuk&0ns S

united states code, sectioa 323 r”“; A. R., Hoblm A& ‘Me 18,

, 93. Ascddniog Pi Ability. Thb clwificatioo w re-

quatrbytheDepsrtmen~oCJwticcfortheFB~toawrtaiar

94. Research Matters. Thir clamificatibn concerns all m CoTrc- qnmdena of the FBI with private individuals which dosr wt involve soy rubstantive violatioa of Federal law.

95. ‘Wmtory casea (Examinrrtion of Evideriaz in Other M Bureau Cases). This classifiation concerns eon-FBI ca8ea Where l

duly coostituted State, county or a municipal law eaforaownt agency in a criminal matter hw requested a0 c&i of evidm bi .the FBI Laboratory.

96. Alko A&iaot (obokte). Title 10, Unit&i Stata C&xk, See tioQ310. --

97. Registration Act. Title Ill. United States code, SecbbD 951; Title 22, United Stata Code, Sectiona 611621; Title SO, United States Code, Sectiorrr 851.857.

9%. Salmtage. Title 18, United Statea Code, Sectimu 215!-21% Title so, united stata code, s&km 797.

. Thin ctificdtioo coven 8 progrm industrial plants for the Piupole *of

ntonoftbosepLntrtoprewotego- 08ge nod snbotage.

100. Do& Security. This classification coven inv~ by the FBI in the domestic security field.

12


113. Pore@ Milky and Naval M&tem Tbir chaaific+ioa h 8 control lMc lltilhd M a rlklositolY for illteuigeaa illf- anl- culling f&gn military md omml- matter8 b&co down by anmpr.

114. Allen Pmprty c2lwudM Mattef (obKhte). Titk 5Q uoltal -sitMu lad& sectlolls 1 throuSh 38. Tw clasifkm~ covuu hvwti- g8tioMcorcdngowM!rsbipMdcolltrolofpopatysllb~to cl4imsMdli’ 8timulldertbi8dllte.

%ef 11s. Bond auk Bail JllmMr. -x-l& 18 united stata code, !tcdclu 314&3132. -

116. Lkpwtmmt of Energy AppIicm~ Depm%mmt of k&y, tilllpbyee nlis c~tioll coaxems bkkground inve#igations umduct.edincoamamlwithcmploymentwiththc~tof

119. FedemJ Re~l&omm of Lobbyiq Act. Title 2, United strta CQde, scctiolls 261-270.

120. Federal Tort Cl&m AC& Title 28, United Stata Code, spc- tiom 2671 to 2680. InvatiSationa UC conducted purmuann~-T RqKstfroaltheDc+mcntofJusticein~

&vammalt Fhpm (obsoktc~ I!%&utive Order %35. -

122. Labor Management Rehtions A& 19(7. Titk 29, United States Cbde. sedionr 161, 162, 176178 am& 186.

123. Sped hpiry, State pplrhnmt, Voice of America (U.S. Infoma~bn Center) (Fub. L. 402, hh Congfesa). This cfasifkicatiom _ covers loyatty and security invcsti~ on personnet employed by or under consideratoiu for employment for Voice of America.

13


appkanta of the Naiad Sacudt Raourccr Board. 127. Scnaitive Poaii in the b nital Stata &B Pub. L.

the Government. Execvtive order 104M 141. Fak Entrim ir Records al la&mate curim Title 47.

United Stata Code, Sectioo 220, Titk 49, United Statu code, Sets tioll20.

142. Ilkgai Umaf -Rr rrtk49, vaited StalesOY& sectia 1.

143. Intcmtatc Transportation of Gambling D&m. Tii ?S, Utdtcd Stata Cock, Sectiow 1171 thrcqb 1llKL

144 Ikntate Tmnqoatk of P&un-Made Goods. ‘liblc IS United States Code, Scctiona 1761 and. 1762.

147. Fedmd Homing Admii Matters Title ?!I, &htitcd state8 code, SwtioM ~010,709,657 end 1006; Talc 1% uni8ed smta code, scctiow 1715 and 1109.

14

,; ,, : . . ., ,,, .' >!I _:,: /;'.I : : ;,' ..:, '_ _. ,,. 11, ,- ;,*.5, ), '..,I,' " ;. .; ,f./, ; ,' .) ,~ ('


148. Memate ‘Ih#m of FircwocL T%k IS, United States G$ !kdon 036, ’

Dutru&~ of Aircraft or Motor Vehicle Titk 18, United strta’cod6, s6ctions 31 tbrougb 3s.

IX?. Harborin of Federal Fugitives, St&t& 151. (Rekrr IIf ’ qs6s received from CSC under. Pub. L. 298).

Am krr htW66tlO6d Dtv61OplU66~ Nrtm66t Of &l6r@’ (civil Commimionk National Acronautia and Spacx Adminktm-

tioq MM Sokncc Foundation; Pclrce Corps; Action; US. Arms Control amd mt Agtncy, World H+tb Oqanizatioq In- tetndmd Labor Chgmizat@ U.S Iaformatum Agency. Tlsis cks- sifhtbn 6ov6m refemIs from the Civil !krvicc Commission where

ChIti ud D+ammlmt A@mcy ml& tb? ulliled states -lion bF=Y.

Titk IS. United

of Unsafe Refrigcr+on. Titk 15,

MS. National Aeronautics and Space Act of 1958. Titk I&, United swacalk.ssaioa799.

154 Wdf&rc am3 Pen&m Ptnr Discloaurn Acct. Titk 29, Uaibxl state8 cade. Lkctica m14029, 1111, 1131, and 1141; Titk 16, thlitad st8WS cod6;seaiolrs 644.1027. Uld 1954.

157. ExtreQlkl M*t(en; civil ulual. This clastiifKxtion concerns PBI rcnpo+bifity tbr rqtorting information on civil disturbances or m Ttw FBL’, invcstig8tive rcsponaibihty is based on the Attommy OeartJ’r Chkklii for Reporting on Civil Disorders and Dtmsmamtiom hvolving a Federal Interest which became effective ApdLlm.

158. I&or-Mpllgemcsr Reporting and IXscIosore Act of 1959 @ecuby Matacr>(dkt6~ Pub. L 86257, s6ction SW.

139. ,L40”- Rcportiq mid Disclosure Act of t9f9 ~wtgtw&i h$zbz,Title 29, United States Cork, sections 501,

16fk Fe&al Train Wmck Stature Title 18, Unitad States Code, SrCrpllt992

161. Spnckl loquirks for White How. Congressional Committee msd Otbm Oovrrnmcnt Apmcks. This classif~ation covers investigations qnestnd by the White House, Congressional committees or ablx-t4$eacka

162 lntust@e Gambling Activiti This claseifkation covers infor- ma+ acqnkul concerning tba tmtnre and~scope of illegal gambling WtSVUGSbdrfkldOflkXk

164. Grimm Aboard Aii Titk 49* United States Code, Sections 1472 and 1473.

16s. Intcmmr# %us&on of Wagering ~nformatioa. Title 18, Ud!dSUtkSCQd&S6CtiOU1084.

166. hsmrstam Transportation in Aid of Rncketccring. Title 18, lhlitcd SW64 code, sddou 1952.

167. Destruotion of Interstate Property. Title IS, United States oak, secliom 1281 and m2.

168. Merate Tmnqortation of Wagering I’waphemalk Tuk 18. unit6d stala codk, seaios 1953.

169. Hydraulic hk6 Pluid Act (obsolete); 76 Slat. 437, Pub. L. 87.637.

l7@ ExtremM Mxmants (obsolete). Thjs classification concents individuals who provicld information on a continuing basis on var- iowsutrcmisttkmen&

15

APPENDIX I ,.

17?. Motor Vehicle Scat Belt Act (obdct6). Pub. L M-201, 80th

176. Aatwot Laws. Title 18, United states Code, section 24s.

m. Discrimination in Housing. Titk 42, United States code, Sk+ tions 3601-3619 and 3631.

178. IllteRtatc obscene or EJ#ma& Telephone Calla. Titk 47, uoimd sues code. s6cuoalz23.

179. Eawrtionate Cnxiit Traclartiar ‘&e to, Cl&ad 9faa Code, Scctioas 891-896.

MO. Desecration of the Flag. Title 18. United Statea GXIG &et&m 700.

18 1. c!onsuma Credit Protwtion Act Tiic 15 uaitcd swaa 6k- !3aztim 1611.

182. Ilk al olmbling Businew Ilk BtN6tion; bl egal Gambling Busir;err; edmtl???mz Stata C&de, Sect&a l9SS; Tide HI, United States Cktk Biztim 1511.

183. P, Influence and c!omapt w rirk bl. united states CodG !ktiolls 1961-1968.

184. Police Killings. This ClaMication wkxms inveatigati5m~ ductedbythcFBIupanvvritten~ItoslrbcllChiddPoliocar duly constituted head of the kzal agency to wtivd gWticipt6 iri the investigation of the killing .of a police officer. liIea6. mvdga- tionsarebasedonaPr&dentialDirc&vedataiJuncf.k971.

185. Protection of Foreign OtXcials and CMkials oocsh of *- United States. Title It. United Stat& Code, !kwtkms 112,970. 1lK 1117 and 1201.

186. Real Estate Settlement Procedurea Ad d EkX. Tii l2 United States Code, Section 2602; Title __ _-___ Section 2606: and Title 12 United States Code, Scctiou 2 * 187. Privacy Act of k4. CriminaL Title 5, United Statea w

Section 5S2a 188. Crime Resistance. Thii classifkatioa covers ‘FBI efforts to

develop new or improved approaches, techniques, SY~ sguig meat and devices to improve and strengthal kw anforcemcnt as mandated by the Omnibus Crime Control and !&k Stmeta Aa of 1968.

189. E@al Credit Opportunity Act Tide 1J, United e Qdt, Section 1691.

190. Freedom of’ Informaticra/Rivacy Acta This cksificatkm covcr~ the creation of a corms ndcnce tlkto preruw! r9d maintain accurate records concerning ti-2 handling of a requcata lol sworda. submitted pursuant to the Freedom of Information-Privacy Acta.

191. False Identity Matter?. This classificatioa awers the FBI’s gztutizd cxammatlon of cnmmal elements e&or&i to create false

192. Hobbs Act--Financial Institutions. Title 14 United slota Code, Section 1951.

193. Hobbs Act-Commercial Institutiona. Title IB, Waited- States Code, Section 1951; and Title 47, United States Code, Section 506.

194. Hobbs Act-Corruption of Public ORki&. Title lg, United States Code, Section 1951.

195. Hobbs Act--Labor Related. Title ld, United Statea Code, Section 1951.

196. Fraud by Wire. Title 18, United States code, section 1343. 197. Civil Actions or Claims Against the Govennmmt. Thk clrreifi-

cation covers all civil suits involving FBI matters and most administrative claims tiled under the Federal Tort Claims Acrvisiag ~MII FBI activities.

16

APPENDIX I

‘5, .,’ i ._ :: .,. _‘&. I: ; a


198. Crime on Indian Reservations. Title 1% Unitad Statu Co&, Sections 1151, 1152, and 1153.

199. Foreign Counterintelligence-Terrorism. Attorney General Guidelines on Foreiw Camterintelli~ence. Executive Grda 11905.

200. Foreign CotmterinteQence” Matters. Attorney General Guidelines on Fore&n Counterintelligence. Executive (Mu 11905.

201. Foreign Counterintelligence Matters. Attorney M Guidelines on Foreign Countenntclligencc. Executive order 11905.

202. Foreign C&nierintel!igence- Mattas. Attoney GcnemI Guideline on Foreign Countermtelligence. Executk Chler ll!XM.

203. Foreign Counterintelligence Matters. Attorney General Guidelines on Foreign Countenntefligencc. Executive G&r 11905.

204. Federal Revenue Sharing. This classification covaa FBI investigations conducted where the Attorney Geneml has been autbor- ized to bring civil action whenever her has reason to believe that a pattern or practice of discrimination in disbursement of fuodr under the Federal Revenue Sharing statute exists.

Files kept ip FBI Field Offices-Field offkes main&~ art&~ records that are not contained at FBI Headquarten tbit include I&I, index cards. and related material pertaining to cases in which there was no prosecutive action undertaken; perpetrators of violations sot developed during investigation; or investigation revealed akgatknu were unsubstantmtfxl or not within the invtigative jwkktiotl Of . -

* (3) Listings of individuaIa I pmt of an ovanll criminal intelhg~

datbvth6Fw..ThiswouldindudcDhoto~l.l~liataof llldiddn;b kttcnm eo be irlvolved in fk&al a&ity, iDchIding theft lbm iutust8tc shipmu& intemtate transportation of stolen property, MCI iudh+dursI in the uppm echelon of organized crime;

(4)I.au$#~~viduala incormedmwiththeFill’s~tct0 carry mat E’tedmd dircdvcs on January 8, 1943, July 24, 1950, December 15, 19% and February 1% 1976. which designated the FBI to carry out investigative work in matten relating to espiaor(lc, do- ad fkwcigu counterintelligence. Tb” li+ings “y include pbmgra@ abums and other listings contaimng Inogr?#lc data re- Ming mdividuals. This would include lists of identt led and sun- pctul foreign iuWigencc agents and informan@

17


18

APPENDIX I APPENDIX

FBI Investigative Resources Devoted to White-Collar

I

Crime in Fiscal Years 1977 and 1978 (note a)

White-Collar Crime Section

cost Percent of all Year Staff hours Percent (000 omitted) investigative cost

1977 N/A N/A $ 27,908 15.0 1978 2,630,403 18 31,024 17.0

1977 N/A N/A $ 3,685 2.0 1978 444,652 3 5,289 2.9

Organized Crime Section (note b)

Total Investigative Time and Cost Devoted to White-Collar Crime

1977 N/A N/A $ 31,593 17.0 1978 3,115,222 21 36,313 19.9

a/This data was taken from the TURK system reports and reflects only actual field office investigative time spent by investigative personnel (nonagent time represents less than one-half percent of the time and cost shown).

b/This represents 19 percent of the work hours and cost charged to the Organized Crime Program which the FBI considers to be white-collar crime and public corruption matters but; which is handled by the Organized Crime Section.

19

,

,: “.,,


FBI Resources Devoted to or Planned for White-Collar

Crime in Fiscal Years 1977, 1978, and 1979

1977

Agent Nonagent Total cost work years work years work years (000 omitted)

White-collar crime program 1,382 831 2,213 $ 64,800 Organized crime program

(note al 192 117 309 9,007

Total white-collar crime 1,574 2,522 $73,807

1978 White-collar crime program 1,412 857 2,269 $ 67,861 Organized crime program

(note a) 252 143 395 12,860

Total white-collar Crime 1,664 1,000 2,664 $ 80,721 -

1979 (planned): White-collar crime program 1,349 811 2,160 $ 67,043 Organized crime program

(note a) 242 138 380 11,974

Total white-collar crime 1,591 2,540 $79,017

E/This represents 19 percent of the work years and cost devoted within the Organized Crime Program which the FBI considered to be white- collar crime and public corruption matters, but which the Organized Crime Section handles.

20

: '. : :, , ., .',' _' :: .,,x ,', : I#. ,',_( .I,: : *) ', ' :, ', ~ ., ,:' (.:.', , *

APPENDIX II APPENDIX II

UNITED STATES ATTORNEYS

Within each of the 95 Federal judicial districts, the U.S. attorney is the chief law enforcement representative of the Attorney General. He enforces Federal criminal laws and handles most of the litigation in which the United States is involved. The Executive Office for U.S. Attorneys has estimated that, in 1978, 337 attorney work years, or 21 percent, were spent handling white-collar crime or public corruption matters.

The U.S. attorneys' offices do not have a time reporting system to show where attorneys spend their time. During fiscal year 1978, the Executive Office for U.S. Attorneys conducted four surveys at quarterly intervals from Decem- ber 7, 1977, to October 3, 1978, at each U.S. attorney office to estimate how attorneys were spending their time. The U.S. attorneys were to estimate their time on the basis of the 12-month period immediately preceeding the survey. The table on page 22 shows the cumulative average percentage of time and resources devoted to the white-collar crime and public corruption area by U.S. attorney offices as a whole. The chart on pages 23-25 shows the percent of attorney Ice-. sources devoted to white-collar crime and public corruption by each U.S. attorney office. Since the survey did not include support staff, the estimates of the total U.S. attorney office resources devoted to white-collar crime and official corruption is based on the same percentages the attorneys estimated they spent in these areas.

The chart on page 26 shows the cumulative average percentage of time spent in the appellate, criminal, civil, and antitrust areas in U.S. attorneys offices.

h

21


Estimated U.S. Attorneys' Resources Utilized in or

Planned for White-Collar Crime and Public Corruption

in Fiscal Years 1977, 1978, and 1979 (note a)

White-collar crime resources: 1977

Total attorney work years 223 Total nonattorney wlork years 244 Total dollar amunts (000 anitted) $ 14,692 Tbtal resources (percent) 14.31

Public corruption resources:

Total attorney work years Totalnonattormymrkyears Total amounts (000 anitted) Total resources (percent)

100 109

$ 6,550 6.38

White-collar crime and public corruption resources:

1978

233 246

$ 16,604 14.31

104 110

$ 7,403 6.38

1979

note a

note a

Total attorney work years Total nonattorney work years

323 353

Total dollar amounts (000 cmitted) $ 21,242 Total resources (percent) (note b) 20.69

Total U.S. attornev offices

337 356

$ 24,007 20.69

note a

Total work years 3,265 3,347 3,613 Total dollar amounts (000 anitted) $102,670 $116,028 $124,276

a/me Executive Office for United States Attorneys would not estimate - the fiscal year 1979 resources it plans to devote to white-collar

crime and public corruption. However, the Acting Director of the the Executive Office stated that if data was available, an increase would bs shown.

bJFbr cmiparative purposes , we applied the 1978 percentage developed by the Executive Office for United States Attorneys to resources used in fiscal year 1977.

22

APPENDIX II

Percent of U.S. Attorney Resources Devoted to

White-Collar Crime and Public Corruption

District

Alabama8 Northern Middle Southern

Alaska Arizona Arkansas:

Eastern Western

California: Northern Eastern Central Southern

Canal Zone Colorado Connecticut Delaware District of Columbia Florida:

Northern Middle Southern

Georg ia : Northern Middle Southern

Guam Hawaii Idaho Illinois:

Northern Eastern Southern

Indianat Northern Southern

Iowa : Northern Southern

White-collar Public crime

---------(percent

APPENDIX II

4 10

5

16

10 19

18 6

20 15

5 13 22 21

7

12 5 15 6 23 1

34 11 10 10

1";

(b) 11 30

13 9

10 20

(a) 10 (a) 2

10 2

(a) 3 4

A 5

14

A

(a) 6

(b) A 12

5

10 (a)

&/This district did not provide response to survey.

b/This district, included in initial survey dated Dec. 7, 1977, was not asked to identify percent of attorney time devoted to Public Corruption as a separate item.

23




District

Kansas Kentucky:

Eastern Western

Louisiana: Eastern Middle Western

Maine Maryland Massachusetts Michigan:

Eastern Western

Minnesota Mississippi:

Northern Southern

Missouri: Eastern Western

Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York:

Northern Southern Eastern Western

North Carolina: Eastern Middle Western

North Dakota Ohio:

Northern Southern

White-collar Public crime

---..-----(percent

‘(a)

14 11

(a)

9.5 1

26 (a) 10 23 16 10 25 10

9

(b) 10

1':: z 10 (b)

12 14

:9 10 20 35 15 24

8

22 10 26 21

10 24

Ilt

17 7

82 (bl

4

a/This district did not provide response to survey.

&/This district, included in initial survey dated Dec. 7, 1977, was not asked to identify percent of attorney time devoted to Public Corruption as a separate item.

24




District White-collar Public

Oklahoma: Northern Eastern Western

Oregon Pennsylvania:

Eastern Middle Western

Puerto Rico Rhode Island South Carolina South Dakota Tennessee:

Eastern Middle Western

Texas : Northern Southern Eastern Western

Utah Vermont virgin Islands Virginia3

Eastern Western

Washington: Eastern Western

West Virginia: Northern Southern

Wisconsin: Eastern Western

Wyoming Northern Mariana

Islands

.

1: 14 25

20 8

10 (b)

fi 6

10 10 10

El 17 10 22 15 (b) 10 10

1 20

5 (a) 21 6.5

17 15

11; 3

(bl (b)

2

cf,

~00.6 15 (b)

2.5 2

(a) 3 6

(a) .5

c/This district did not provide response to survey.

h/This district, included in initial survey dated Dec. 7, 1977, was not asked to identify percent of attorney time devoted to Public Corruption as a separate item.

25


U.S. Attorneys' Resources Spent on Appellate,

Criminal, Civil and Antitrust Activities

Percentage

a.9 Appellate

Criminal:

Public Corruption 6.38 Organized Crime 3.43 White-Collar Crime 14.31 Narcotics and Dangerous Drugs 9.79 Civil Rights 1.42 Government Regulations 1.66 Internal Security 0.40 Labor Management 1.26 Other 20.65

Total

Civil:

Defense of Monetary Claims Recovery of Money Enforcement Federal Civil

Programs Civil Rights Judgment Enforcement Foreclosures Habeas Corpus

Total 31.6

Antitrust

Total

59.3

10.86 4.92

6.03 2.84 2.17 2.77 2.03

2 2-

100.0

APPENDIX III APPENDIX III

CRIMINAL DIVISION

The Criminal Division of the Department of Justice is made up of several sections as indicated on pages 31 and 32. Within the division, the investigation and prosecution of white-collar crime and public corruption is handled mainly by three of its sections--the Criminal Fraud Section, the Public Integrity Section, and the Organized Crime and Racketeering Section. In fiscal years 1977 and 1978, the three sections' expenditures for white-collar crime and public corruption activities were $4,341,423 and $5,945,785, respectively, or 25 and 31 percent of the entire division's expenditures.

A brief description and actual cost data for these three sections for fiscal years 1977 and 1978 and authorized funds for 1979 follows.

Criminal Fraud Section

The Criminal Fraud Section has the responsibility to direct and coordinate with the U.S. attorneys the Federal law enforcement effort aimed at white-collar crimes and offenses. Crimes and offenses within the section's jurisdiction include conspiracy statutes, wire fraud statutes, and numerous false statement and false claim statutes. This section also has been given major responsibility for investigating and supervising all cases involving possible illegal overseas payments made by American corporations.

Public Integrity Section

This section, established in 1976, is the Department of Justice component with centralized responsibility for the Federal law enforcement program involving abuses of the public trust at all levels of government. This section's responsibility includes Federal prosecutive efforts involving (1) all crimes committed by Federal officers and employees during the performance of their official duties, (2) misuse of office by local and State governmental officials in violation of Federal laws, such as the Hobbs Act, Travel

27


Act, Federal mail fraud statute, and RICO statutes, and (3) violation of Federal laws involving the integrity of the franchise in campaign financing crimes arising under the Federal Election Campaign Act.

This section participates in the investigation and prosecution of significant cases on a national level, either solely or in conjunction with U.S. attorney offices.

Organized Crime and Racketeering Section

This section deals primary with criminal violations in approximately 12 areas when there is a connection to organized crime. Some of these violations are contempt, corruption, counterfeiting, drugs, extortion, firearms, fraud, gambling, labor racketeering, obstruction of justice, Rack- eteer Influenced and Corrupt Organization (RICO), tax, and theft. Section officials stated their efforts in corruption, fraud, labor racketeering, tax, and about 50 percent of the RICO cases were white-collar crime and public corruption related. To carry out its responsibility, the section has 14 strike forces in Boston, Brooklyn, Buffalo, Chicago, Cleveland, Detroit, Kansas City, Los Angeles, Miami, Newark, New Orleans, Philadelphia, San Francisco, and Washington, D.C., to investigate and prosecute these violations. Most of these strike force members are Department of Justice attorneys, but other Federal agency employees also partici- pate. In many of its cases, this section would be working with the FBI during the investigative stage and with the U.S. attorneys in the prosecutive stage.

White-collar crimes handled by this section generally deal with breaches of trust by those holding legitimate positions in industry or government to obtain a financial advantage by illegal means either for themselves or, in the case of private business, for the organization which employs them. It also deals with tax evasion.

This section provided the following examples of the types of white-collar crimes and public corruption cases it generally encounters.


Example 1

A president of a major midwestern bank was convicted of accepting payoffs from those associated with organized crime to make loans to their enterprises. The bank col- lapsed. The associate involved was convicted for the same offense in three separate Federal district courts. One of the loans was allegedly intended to be used to purchase a cache of firearms, although the individual involved was acquitted in the firearms prosecution.

Example 2

Organized crime figures have also recruited rings to obtain uncollectable loans from banks through false credit applications, which were "verified" by an accomplice- employee within the bank.

Example 3

Perhaps the major example of white-collar crime is the present inquiry into port practices along the Atlantic and Gulf Coasts. In some instances, the costs of landing goods in those ports has risen so high that some shippers prefer to land goods on the west coast and ship overland to the east. The recent indictment of 22 businessmen and officers of the International Longshoremen's Association in Miami is only a portion of the response to the problem. In addition, 14 other convictions have been obtained from Mobile, Alabama, to Boston, Massachusetts, on varying charges. The Miami case is illustrative, however, in that it includes allegations that the defendants controlled the waterfront industry in several Atlantic and Gulf' Coast ports through payoffs, kickbacks, buying and selling contracts, extortion, threats, intimidation, and bribes to labor leaders.

Example 4

Offenses in the labor union fund area ranged from a small embezzlement by a low-level union employee to million dollar thefts from the pension, health, and welfare funds of major unions by corporations unable to provide the benefits contracted for. One such case in Arizona involved losses of $5.5 million to the Teamsters and Laborers unions.

29


Example 5

Subversion of government employees can prove costly to taxpayers. Payment by contractors in one city raised the price of a water pollution abatement project by $6 million. Of this amount, $1 million was used as bribe money for the public officials involved.

Example 6

Another indictment has charged the mayor and three of the high-echelon officers of a city police force in New Jer- sey with running an illegal gambling operation and using their law enforcement powers to suppress competition.

Example 7

Even minor amounts of money can lead to irreparable harm. An employee of a major Federal investigative agency was convicted of leaking confidential investigative information to known racketeers. concerning the Federal investigation of them and their associates in return for $16,000.

Example 8

Also included in the scope of white-collar/organized crime is significant tax evasion. One example of this is the indictment of three former employees of four major Las Vegas casinos for "skimming" $21 million from slot machines in those casinos. The skim, which the casinos claim was employee theft, was apparently accomplished by resetting the coin-weighting machines to the culprits' advantage.

30

k


Criminal Division Resources Devoted to or Plannsd

Positions cent of entire coat6 Attorney Nmattorney Wcrkyears division

1977 Fraud section organiaed crfnle

and raoketaering

mlz-ity

$ 1,386,945 33 12 43 8.0

(note a) 39 ii

12.5

H r;rr 2%

Division total y/$17,390,564 401

1978 Fraud section organized crinre

and racketeering Publ~~;tegrity

$ 1,889,134 33 12 55 l.O.i-

(note a) 31028,144 59 51 16.0 5:4

z- zz

Division total d$18,958,034 397 307 640

1979kn:)):

Organized crime and racketeering

Public integrity Total

$ 2,397,ooo 50 20 64 9.9

(note a) 3,322,400 61 51 106 13.7 36

206

Division total d/$24,181,060 428 324 708

for White-Collar Crime in Fiscal Year5

1977, 1978, and 1979

Cost as per-

a/mperuditures represent 30 percent of the section's staff a& costs in 1977 and 40 percent - in I.978 and 1979, which is what officials of the Organized Crime ahd Racketeerirrg Section

Section estimated have been devoted to white-collar crime and public corruption activities.

@xpenditures have not been included for amm services ($2,011,000) hot distributed " the sections such as rental of space; guard services overtime, heating and air conditmhing; and camm purchases ($640,436) hot distributed to the sections, such as contracts for machine repair, copy machine rentals, an3 material fran the GSA supply store.

+xpehditures have not been included for cwtmn services ($2,113,000) and for cam-on pmzhases ($955,%6) within the Criminal Division which have not been allocated tothethreesectiohs.

dJEstimates for ccmm services and cumm purchases were allocated to the sections.

31

,.

APPENDIX' III APPENDIX III

Planned Efforts in Fiscal Year 1979 of Other

Sections Within the Criminal Division (note a)

Section

Cost as per- Permanent cent of entire positions division

Federal Appellate Activity Narcotic and Dangerous Drugs

Prosecutions Government Regulations and Labor Internal Security General Crimes Special Litigation Legislation and Special Projects Intelligence Executive Direction and Control Freedom of Information and

Privacy Acts Activities Organized Crime and Racketeering

Other Than White-Collar Crime

aa

39 5.0 31 4.7 38 4.8 37 5.4 20 2.2 35 4.2 35 4.2 73 7.6

14

141 20.6

10.9

1.4

a/This represents resources devoted to other than white-collar crime by the Criminal Division.

32

APPENDIX IV

ANTITRUST DIVISION

APPENDIX IV

The Antitrust Division is responsible for enforcing the Federal antitrust laws and for serving as the Federal Government's principal analyst of and advocate for competition policy. The division's estimates show that in fiscal years 1977 and 1978, $9,389,120 and $11,697,180, respectively, were devoted to white-collar criminal enforcement activities.

The antitrust laws are enforced by criminal prosecutions designed to punish violators for restraints of trade, most notably price fixing, and by civil suits for injunctive relief aimed at maintaining or restoring competitive condi- tions in the system of free enterprise, which the antitrust laws protect.

Assisting the Antitrust Division in its responsibility for enforcement and litigation activities are eight field offices in Atlanta, Chicago, Cleveland, Dallas,,Los Angeles, New York, Philadelphia, and San Francisco. At the end of 1978, ,approximately 215 of the division's 867 employees were located in field offices.

In response to the Deputy Attorney General's request for information on the division's white-collar crime program, a recent Antitrust Division memorandum reported that approximately 37 percent of the division's attorneys were devoted to criminal enforcement activities in fiscal year 1978. However, the memorandum points out that the decision to bring criminal rather than civil action is frequently discretionary and that much investigative work on what is ultimately filed as a civil case may, in only slightly different circumstances have resulted in criminal indictment and prosecution. It also points out that, even though an investigation has not resulted in criminal prosecution, it could still have a substantial effect both in enforcing adherence to the antitrust laws and in creating a substantial deterrent to future violations.

The division's 37-percent estimate was based on its computerized time reporting system. The estimate did not include economists and other support staff. Therefore, the estimates of the division's total resources devoted to white-collar crime on page 35 is based on the 37 percent.

33

,.

APPENDIX IV APPENDIX IV

Substantially more than 37 percent is devoted to the white-collar area, but in many instances, the case is pursued civilly instead of criminally for various reasons. Therefore, we did not consider these resources in this study.

The Antitrust Division also has the responsibility for administration of grants provided in Section 116 of the Crime Control Act of 1976 which authorizes the Antitrust Division to award grant funds for each of the fiscal years 1977-79 for improvement of State antitrust enforcement capa- bilities. Authorizations under this program amounted to $1 million in 1977, $10 million in 1978, and are estimated to be $10 million in 1979. These grant funds have not been counted as resources devoted to the white-collar crime area for this study.

APPENDIX IV APPENDIX IV

Year

1977 1978 1979

1977 1978 1979

Antitrust Division Resources Devoted to or

Planned for Whitecollar Crime in Fiscal Years

1977, 1978, and 1979

Personnelatend of the year Ccetaspercent devoted towhite-collar crime of entire

costs Attorney Emnunist Other lbtal division --

3/ $ 9,389,120 156 15 135 306 37 d 11,697,180 154 17 150 321 37 a/ 13,459,490 162 19 155 336 37

Ibtal division resources

q $25,376,000 421 40 364 825 y 31,614,OOO 416 46 405 867 - w 36,377,000 437 50 418 905

YIbis does not include anyof the Grant Programrmneygiven to States for enforcement of antitrust activities.

@his does not include $l,OOO,OOO for the Grant Program in 1977 or $10,000,000 each year for the Grant Program in 1978 and 1979.

Appropriated 1979 (note a)

Program areas within the Antitrust Division Work years

Federal Appellate Activities 31 Judgment Enforcement 38 Reduction of Private Ccnspira-

torial Conduct 231 Reduction of Oligopoly and

MonopolY 260 Antitrust Litigation for

Consumer Protection 25 Litigation Support Activities 172 Executive Direction and Ccnttil 131 State Antitrust Enforcement Grants 6

Ccstaspercent of entire division

2.3 3.2

27.6

38.7

2.1 15.0 10.5

.6

a/?his does not include any of the Grant Program money given to States for enforcement of antitrust activities.

35

.j

APPENDIX V APPENDIX V

TAX DIVISION

The Tax Division has responsibility for representing the United States and its officers in civil and criminal litigation arising under the Internal Revenue laws, other than proceedings in the United States Tax Courts. In fiscal years 1977 and 1978, $2,088,093 and $2,509,877, respectively, were expended for the enforcement of various white-collar crime offenses.

The division's primary missions are to aid the Internal Revenue Service in collecting Federal revenue, to deter willful deception through prosecution of criminal offenders, and to establish legal principles which will serve as nationwide guidelines to taxpayers and their representatives as well as to the Internal Revenue Service.

The Criminal Section of the Tax Division is the primary section that handles white-collar crime offenses. Fol- lowing are some of the offenses handled by the Criminal Section:

--Attempted evasion of tax or payment.

--Failure to file, supply information, or pay tax.

--False or fraudulent return, statement, or other document made under penalties of perjury.

--Fraudulent W-2 statement or failure to provide them to employees.

--False, fictitious, or fraudulent claims.

APPENDIXV APPENDIXV

Tax Division Resources Devoted to or Planned

for White-Collar Crime in Fiscal

Years 1977, 1978, and 1979

Year

Criminal Section resources Cost as per-

Positions cent of entire costs Attorney Nonattorney Work years division

1977 $ 2,088,093 48.9 22.9 71.8 18.1 1978 2,509,877 54.4 30.8 85.2 18.7 1979 3,250,OOO 61.1 27.7 88.8 17.9

Entire Tax Division resources

1977 a/ $11,561,470 224.2 201.0 425.2 1978 'E;/ 13,423,572 242.4 222.8 465.2 1979 z/ 18,168,OOO 300.2 248.8 549.0

a/Expenditures have not been included for ccmnon services ($905,000) and for camm purchases ($688,530) within the Tax Division which have not been allocated to the sections.

t+xpenditures have mt been included for cmn services ($1,042,000) and for catmm purchases ($967,498) within the Tax Division which have not been allocated to the sections.

jExpenditures for camon services and canmn purchases are included within the 1979 figures.

Planned Efforts in Fiscal Year 1979 of Other Sections Within the Tax Division

Section Cost as percent

of entire division

Federal Appellate Activities Litigation in Defense of

Monetary Claims Litigation for the Recovery of !bney Litigation to Enforce Federal

Civil Programs Executive Direction and Control

15.3

28.9 13.7

5.8 19.9

APPENDIX VI APPENDIX VI

CIVIL DIVISION

The Civil Division of the Department of Justice is made up of several sections A/ as indicated on page 39. The section expenditures for white-collar civil activities were $690,936 and $845,518 in fiscal years 1977 and 1978, which represent 5 and 5.2 percent, respectively, of the entire division's expenditures. In addition, the Civil Division had collections in fiscal years 1977 and 1978 totaling $6.1 and $4.3 million respectively.

The Fraud Section (now part of the Commercial Litigation Branch) has the responsibility of enforcing the False Claims Act, the Anti-Kickback Act, the Federal Property and Adminis- trative Services Act, and the remedies provided by common law which seek to preserve the integrity of the Government's civil programs. The purpose of this section is to recover money where the Government has been defrauded. The cases handled involve such violations as false billings by Govern- ment contractors designed to generate payments higher than justified; fraudulent applications for loan assurances and guarantees, especially from the Federal Housing Administra- tion and Veterans Administration; and Medicare and Social Security frauds.

In the False Claims Act cases, under which many of the cases in the section are handled, the defendant is liable for double the damages caused to the Government and $2,000 for each false claim submitted. If the single damage and statutory forfeitures are $60,000 or less, 2/ then the U.S. attorney's office has the responsibiliry for following up the case civilly.

&/The Civil Division, effective Sept. 5, 1978, reorganized its sections into three branches (Torts, Commercial Litigation, and Federal Programs). The Civil Division anticipates that this reorganization will enable it to employ specialists and will provide flexibility to shift its resources to areas of need.

z/This dollar limit was raised from $30,000 to $60,000 in Sept. 1978.

38

APPENDIX VI APPENDIX VI

Year

1977 1978 1979

1977 a/ $13,755,309 282 244 500.5 1978 6/ 16,323,334 299 258 556.4 1979 E/ 21,578,OOO 338 293 602.0

Civil Division Resources Devoted to or Planned

for the White-Collar Area in Fiscal Years

1977, 1978, and 1979

Civil Fraud Section resources Cost as per-

Positions cent of entire costs Attorneys Nonattorneys Work years division

$ 690,936 16 10.6 26.6 5.0 845,518 18.3 12.6 30.9 5.2

1,515,ooo 22 20 41.4 7.0

Civil Division resources

a/Expenditures have not been included for common services ($1,199,000) and for common purchases ($135,691) within the Civil Division which have not been allocated to the sections.

b/Expenditures have not been included for common services ($1,375,000) and for common purchases ($653,560) within the Civil Division which have not been allocated to the sections.

c/Expenditures for common services and common purchases are included within the 1979 figures.

Planned Efforts in Fiscal Year 1979 of Other Sections Within the Criminal Division

Section

Federal Appellate Activities Admiralty Claims Court of Claims Cases Patent Cases Torts Claims Commercial Litigation Economic Litigation Federal Customs Information and Privacy Litigation General Civil Foreign Litigation Judgment Enforcement Executive Direction and Control

Cost as percent of entire division

7.9 6.5 8.7 4.9

17.1 5.0 4.8 5.4 3.7

12.4 2.7 2.2

11.7

39

APPENDIX VII APPENDIX VII

Law Enforcement Assistance Administration

Funds Allocated for White-Collar

Crime and Organized Crime

Fiscal year Amount

Part C--Block Grants (White-Collar and Organized Crime only) (note a):

1977 N/A

1976 $ 5,130,984

1969-76 18,932,904

Percent of total

N/A

N/A

0.7

Part C--Discretionary Grants (White-Collar and Orqanized Crime only) (note b):

1977 $ 2,236,393 N/A

1976 4,574,699 N/A

1969-75 17,121,908 4.3

c/Part C --Block Grants awarded to the States during fiscal years 1969 through 1976 totaled $2,679,656,000.

h/Part C --Discretionary Grants awarded to the States during fiscal years 1969 through 1975 totaled $400,074,000.

40

,,'!I :,(' :I:/I- ;' 'J y:' ; :, ,) -'. ,, ',I . . ,. u: ; 'I, ,,,:

.*, ': ‘, ', : .:: _: i_,'. )/.I :, * ; . . : _, ,,. ,

APPENDIX VIII APPENDIX VIII

General khinistration GanaraL rsgal Activities Antitrust Division U.S. Attonwya U.S. nsrshsls support of U.S. Frismers Fees and Expenses of Wit-

IWSS-SS Camnmity raelaths Swvice IWed Sureau of Invasti-

gation Imnigration and Naturalh-

tion Sewice

TLiY" rcament Acbrinistrs-

797 2,426

907 3,547 2,136

S 22&44 71,283 27,678

102,670 64,002 39,682

810 2,486

920 3,687 2,245

$ 26,539 80,488 42,175

116,028 74,360 18,404

146

19,744

9,473

4,365 8,296

830

17,529 4,268

513,030

Federal prism System Law hforcm5ntAssi5tsnce

Mninistratim

146

20,192

10,071

4,365 8,706

900

18,623 5,057

244,349

168,091 280,933

646,864

553,111

283,116

183,620 310,311

734,926

Total 52,667 $21203,223 54,528 $2,446,?58

Departnr?ntof Justice Rem~~tiloCated

by t4ajor Canponcnts

(oallars in thowmds)

1977 actual 1978 actual 1979 enwted (note a) (mteb) (note bl

Positims Auwmt Poeiticm Aimmt Fositicns hmunt - - - - - -

aJ?Il?e hx@et of the U.S. GOVen'umnt, Fiscal Year 1979.

ty'lhe Buckget of the U.S. Government, Fiscal Yeer 1980.

(18160)

a20 2,752

977 3,757 2,328

136

19,876

10,991

4,213 9,475

697

56,028

8 28,474 90,550 46,311

124,216 72,424 25,100

20,000 5,353

561,341

299,350

192,953 360,400

646,488

$2,473,086 -

Single copies of GAO reports are available free of charge. Requests (except by Members of Congress) for additional quantities should be accompanied by payment of $1.00 per copy.

Requests for single copies (without charge) should be sent to:

U.S. General Accounting Office Distribution Section, Room 1518 441 G Street, NW. Washington, DC 20548

Requests for multiple copies should be sent with checks or money orders to:

U.S. General Accounting Office Distribution Section P-0. Box 1020 Washington, DC 20013

Checks or money orders should be made payable to the U.S. General Accounting Of- fice. NOTE: Stamps or Superintendent of Documents coupons will not be accepted.

PLEASE DO NOT SEND CASH

To expedite filling your order, use the report number and date in the lower right corner of the front cover.

GAO reports are now available on micro- E-7 fiche If such copies will meet your needs be sure to specrfy that you want microfiche

AN EQUAL OPPORTUNITY EMPLOYER

UNITED STATES GENERAL ACCOUNTTNC OFFICE

WASHI;NCTON, D.C. 20548

PQLTACE AWD FLL5 PAID

U. S. GtNI(RAt ACCOUNTING Of ?kr

THIRD CLASS