on page 6 of your testimony, you indicate the you strongly oppose section 3803. This section would import statutory limitations on the initiation of undercover operations and offering of an inducement or opportunity to commit a crime. Basically our objection to this part of the bill is that it imposes a specific inflexible standard on our investigative agencies and does not take into account the variety of situations arising from actual investigations.

It would be very helpful for us for you to detail some of those examples, and you may be able to convince me of the problem. I am not asking you to do it now, but it would be useful for the record to do that.

Mr. JENSEN. I would be happy to do that, Mr. Chairman. If I may just briefly comment on the general subject matter Senator Biden raises. I think this is a very important kind of consideration because the ethics by which our law enforcement activities and the Department of Justice carries out its responsibilities are critical. I do not think there is any question about that.

The prohibitions that are built in, some of them are external prohibitions. They come about by guidelines. They come about by statutes or they come about by the exercise of decisions by courts.

There is also an internal kind of prohibition and ethical standards that are implicit in this. I think that I would answer and respond to this question that there is a tradition that is implicit and it is not a personal sort of thing. It is not a personal kind of ability to say that as you look at the kind of conduct and the ethical standards that have been used by the FBI and the Department of Justice over time that they are the kind of standards that I think the American public can rely upon.

Senator MATHIAS. Thank you very much.

I am disappointed that we have not covered quite as much ground quite as fast as I had hoped we would this morning, but that is a frequent experience.

Senator BIDEN. Speed is not consistent with excellence, Mr. Chairman.

Senator MATHIAS. Well, let us hope we have the compensation. I, therefore, have to ask the afternoon's witnesses if they will be patient and bear with us for an afternoon session. As Senator Biden says, he and I have some other committee commitments that we have to carry out.

I would propose that we recess at this point and resume at 2:30, and at that time, we will meet not in this room but in Dirksen 226. [Whereupon, a luncheon recess was taken.]

Senator MATHIAS. Mr. Neal, I apologize for being a little bit late. I had to leave the Hill to go down to the Department of Transportation, and my transportation was not adequate.

Proceed as you see fit.

STATEMENT OF JAMES NEAL, ESQ., NEAL & HARWELL, NASHVILLE, TN, FORMER CHIEF COUNSEL, SENATE SELECT COMMITTEE TO STUDY LAW ENFORCEMENT UNDERCOVER OPERATIONS

Mr. NEAL. Thank you, Mr. Chairman.

Like the others, I appreciate the opportunity to appear here and give my views on S. 804. Unlike the others, I have appreciated the opportunity to work with you and the other members of the Senate select committee studying undercover operations in the past. I will be very brief and answer any questions that the chairman might have.

Senator MATHIAS. We have your full statement and that will, of course, appear in the record.

Mr. NEAL. I would appreciate that, Mr. Chairman.

S. 804 addresses one of the most dangerous and, in respect to certain criminal activities, one of the most effective law enforcement techniques available today, the undercover operation.

In my view, the proposed legislation represents a modest but in my judgment necessary legislative intervention in law enforcement activities.

Mr. Chairman, you know the number of hours we put in studying Abscam and many other operations, and I will not belabor that. It seems to me, though, that as a result of these activities and studies, I came to four conclusions in this area, and I believe these conclusions were shared by the staff and by every member of the committee.

The first conclusion is that undercover operations and the use of undercover operations by law enforcement agencies will always be controversial, involving as it does the use of deception, trickery, subterfuge and the offer of the opportunity to commit a crime, followed by the arrest and prosecution of the offeree if the offer is accepted.

Some people will never accept the necessity or the morality of such conduct, irrespective of its effectiveness, and I might add the controversial nature of the operation extends to the controversy that surrounds any effort by Congress to deal in this area.

We have already heard this morning some people say that this bill does not go far enough, others say the bill goes too far.

The second conclusion reached in this investigation was that undercover operations are, in fact, extremely effective, at least in those areas of criminal activity in which there is no identifiable victim, rather society at large is the victim.

As an indication of the effectiveness of the operation, in 1983, 316 undercover operations were conducted resulting in 889 convictions and approximately $80 million of recovered property.

The third conclusion I think we all reached is that, and I suppose this is due to its effectiveness, the use of undercover operations has increased enormously in recent years. In 1977, the FBI conducted 53 undercover operations. In 1983, the number had expanded to more than 316.

The fourth conclusion I think we all reached was that while they are very effective, undercover operations do pose serious risks to those values we all cherish, privacy, civil liberties, property rights, and reputations of the innocent.

They pose, in my judgment, another risk, serious but somewhat lesser perhaps, and that is the risk of corruption of the agents involved. Law enforcement agents involved in undercover operations, unless carefully trained and monitored, ultimately may become

what they have pretended to be in the execution of their undercover roles.

While we reached these preliminary conclusions, the committee and the staff reached the conclusion that the effectiveness of undercover operations nevertheless, outweigh their risks.

We then sought to determine if congressional action was necessary, and I think the conclusion was that it was. As a result S. 804 was proposed by the committee.

S. 804 suggests what seems to me a middle course between those who would leave the matter entirely to the existing judicial restraints and those who would allow use of this technique only after approval of a magistrate upon a showing of probable cause.

And S. 804, it seems to me, says, in effect, to the Department of Justice, "We confirm your right to continue to conduct undercover operations and we will give you the necessary tools to do the job. For the time being we will basically allow you to police yourself. You must keep in place certain guidelines, however, and those guidelines must contain certain safeguards both substantive and procedural."

Let me digress just a moment here to say that this morning the testimony was that existing guidelines now require reasonable suspicion before an opportunity to committee a crime is offered to an identified individual.

Mr. Chairman, in fact, they do not. As we found out in the course of our investigation, one of the problems with, for example, Abscam was that there was no reasonable suspicion. Whatever a corrupt middleman said or whomever a corrupt middleman said would take a bribe, they were brought in, in truth and in fact, willynilly.

Senator MATHIAS. In fact, in one case, as you well remember, it was kind of an afterthought. It was when one scenario broke down that another one was substituted.

Mr. NEAL. Immediately and without any pause for reflection. So this bill does say, "You must have guidelines and these guidelines must contain certain safeguards both substantive and procedural. You must not change these guidelines without prior notice to our oversight committee and you must keep our committees fully apprised of your actions, and finally we will hold you accountable for any abuses."

Š. 804 also provides a legislative basis for the defense of entrapment and one that is more logical and more easily applied than the existing doctrine.

I sincerely believe that legislative action is necessary and appropriate in this area, and I endorse the modest first step approach represented by S. 804. In fact, Mr. Chairman, the weakness of the bill is one that you have alluded to in the Congressional Record, and that is that it only pertains to components of the Department of Justice and does not take into consideration the enormously expanding undercover operations of other law enforcement agencies, for example, the Internal Revenue Service.

Mr. Chairman, before I stop, I would like to point out three things that were mentioned this morning that I think are inaccurate. No. 1, I have mentioned. The existing guidelines do not require reasonable suspicion that a person has committed, is commit

ting or is about to commit a crime before he is offered the opportunity to commit that crime.

They simply do not. The loopholes are just too great. Our standards, this bill, S. 804, would impose three standards, and it would require, and I think this is critically important, it would require high level action, making findings, making written or articuable findings that before you conduct an undercover operation, before you authorize it, you find in writing and set forth the facts that there is reasonable suspicion to believe that the initiation of the operation would detect ongoing criminal activity.

Then before you get down to the very controversial part of undercover operations, that is, offering the opportunity to a citizen to commit a crime so you can apprehend him and punish him, you must find and you must detail in writing your findings that there is reasonable suspicion to believe that this individual, this specific individual has committed, is commiting or is about to commit a particular crime.

And then the third and one the committee will obviously find very controversial is the standard that before you can involve certain areas, that is, media, privileged communication areas, you must find probable cause to believe that the criminal activity is going on and that this is the only way to get at it.

There again, you must find the articuable grounds and you must set them forth in writing.

And finally this bill would change, as I said, the law of entrapment. I think the law of entrapment now is illogical, as about four members of the Supreme Court have, at various occasions, articulated.

This law would put the emphasis on the nature of the law enforcement activity, and it would allow the judge to determine whether there is entrapment.

Thank you, Mr. Chairman. I appreciate the opportunity to appear before you. I wholeheartedly endorse this bill in recognition that it can be improved enormously, should be improved enormously through the factfinding process of committees.

But I can assure you as a man who has worked many years both as a prosecuter and now as a defense counsel, it is an area of considerable controversy in the country. Some people applaud undercover activities. Many people say they should be eliminated altogether.

But I think most would concur that some legislation is necessary. Thank you, sir.

[The prepared statement of Mr. Neal follows:]

PREPARED STATEMENT OF JAMES F. NEAL

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

Senate Bill 804 addresses the most dangerous, and

in respect to certain criminal activities, the most effective

law enforcement technique available today

the undercover

operation. This proposed legislation represents a modest,

but in my judgment, necessary legislative intervention in

law enforcement activities.

For much of 1982, I was Chief Counsel to the United

States Senate Select Committee on undercover

operations.

This Committee, chaired So ably by Senators Mathias and

Huddleston, was created in response to the criticisms and

praises heaped upon the most ambitious and publicized

undercover operation to date

ABSCAM. The work of the

Committee, however, was not limited simply to a review of

that operation. In recognition of the increased use of

this technique, as well as the controversy surrounding it,

the Committee reviewed tens of thousands of records generated

in a number of undercover operations, interviewed and took

the testimony of Department of Justice personnel involved

in these operations, both field operators and supervisors,

solicited and heard the views of legal experts, analyzed