16 1 "(c) The defense provided by this section must be estab2 lished by a preponderance of the evidence and shall be deter 3 mined by the court.". 4 (b) The table of sections for chapter 1 of title 18, United 5 States Code, is amended by adding at the end thereof the 6 following: 7 "16. Entrapment.". SEC. 4. (a) Section 2680(a) of title 28, United States 8 Code, is amended by striking out "Any claim" and inserting 9 in lieu thereof "Except as provided in section 3804 of title 10 18, United States Code, any claim". 11 (b) Section 2680(h) of title 28, United States Code, is 12 amended by striking out "Any claim" and inserting in lieu 13 thereof "Except as provided in section 3804 of title 18, 14 United States Code, any claim". S 804 IS SUMMARY OF PROVISIONS OF UNDERCOVER OPERATIONS ACT OF 1983 NOTE: The provisions of the Undercover Operations Act of 1983 are based upon the legislative recommendations of the Select Committee to Study Law Enforcement Undercover Activities of Components of the Department of Justice (the "Select Committee"). These recommendations are summarized in Chapter Four of the Select Committee's Final Report (S. Rep. 97-682), and discussed in more detail in Chapter Eight of that report. The Undercover Operations Act of 1983 consists of six basic features: I. (1) authorization for undercover operations; (2) limited exemption of undercover operations from certain legal restrictions; (3) administrative guidelines and reporting requirements; (4) prohibited undercover operations (threshold requirements); (5) compensation for injuries; (6) statutory entrapment defense. AUTHORIZATION FOR UNDERCOVER OPERATIONS (See proposed 18 U.S.C. Sec. 3801(a).) Although law enforcement components of the Department of Justice have increasingly relied on undercover investigative techniques in recent years, there is no express statutory authority for these agencies to engage in undercover operations. Certain aspects of undercover activity (e.g., procuring false identification, operating proprietary businesses) may in fact be contrary to specific prohibitions of Federal law. Rather than continue the present reliance on strained interpretations of various statutes to legitimize undercover operations, the Undercover Operations Act would explicitly declare the authority of Justice Department agencies to engage in law enforcement undercover activity, subject to compliance with applicable law, including the strictures of the Act itself. II. LIMITED EXEMPTION FROM LEGAL RESTRICTIONS (See proposed 18 U.S.C. Sec. 3802) Some Federal laws, while serving a useful purpose, inhibit or foreclose the use of undercover techniques. The Federal Bureau of Investigations (FBI) has received temporary exemptions from some of these laws at various times, beginning in 1978. The Undercover Operations Act would provide limited permanent exemptions from these restrictions for all Justice Department components engaged in undercover operations, in the context of increased administrative control and Congressional oversight of these activities. Five major types of restrictions are involved. A. Procurement, leasing and contracting As a rule, Federal law prohibits government agencies from entering into multi-year leases of property or from entering into any property leases in Washington, D.C. Government agencies are also required to insert into all contracts specified clauses concerning conflicts of interest, access to records, and other matters, and are prevented from purchasing real property in some instances. It is often necessary for an entity such as an undercover proprietary to lease or purchase property, or to contract for goods and services, in the context of an undercover operation. The exemptions provided by proposed section 3802 (a) would put these transactions on a sound legal footing. B. Establishment of proprietaries Commonly, law enforcement agencies set up businesses as fronts for the conduct of an undercover operation. The legal authority of a Federal law enforcement agency to create a corporation without Congressional approval is quite dubious. Proposed section 3802 (b) would clarify the authority to establish and operate proprietaries. C. Use of income to offset expenses Federal law requires that all funds received by any government agency be paid into the Treasury "without any abatement or deduction." Strict application of this requirement to undercover operations, since the expiration on February 1, 1982 of a temporary exemption, has sharply curtailed use of the undercover technique, because all expenses of undercover businesses must be paid from appropriated funds, regardless of any income generated by the business itself. Proposed section 3802 (c) would provide a limited exemption from this restriction. Proceeds generated by the operation of a proprietary may be used to offset reasonable and necessary expenses of that proprietary, but not of any other aspect of the undercover operation, nor of other undercover operations. All other proceeds, and all "profit" from the proprietary, must be deposited in the Treasury. These provisions would increase the efficiency and reduce the public expense of undercover operations, while retaining necessary fiscal controls. D. Bank deposits Federal officers are generally prohibited by law from depositing public funds in a bank. Yet this is often necessary in an undercover operation, either to maintain the cover of agents or of proprietaries, or to allow undercover operations to demonstrate their financial capabilities to would-be cohorts. Exempting undercover operations from the generally applicable strictures, as in proposed Section 3802 (d), would not threaten the purposes underlying these statutes, and would remove an unnecessary impediment to vigorous law enforcement. E. Indemnification of cooperating parties banks, insurance The cooperation of legitimate businesses companies, and other firms is vital to the success of many undercover operations. But such cooperation involves risks, and many businesses are deterred from assisting undercover operations by the prospect of potential financial liability. Proposed section 3802 (e) would authorize the Justice Department, with the personal written approval of the Attorney General or Deputy Attorney General, to enter into agreements indemnifying cooperative individuals or entities for their services and for losses incurred. Finally, it should be noted that the proposed exemptions from legal restrictions are not automatic. component could avail itself of these authorities only when reasonably necessary to carry out a properly authorized undercover operation, in accordance with agency guidelines and other pro visions of law. III. ADMINISTRATIVE GUIDELINES AND REPORTING REQUIREMENTS (See proposed 18 U.S.C. Sec. 3801 (b) and (c), and 3805) While the FBI has, in recent years, promulgated detailed guidelines for undercover operations, other Justice Department agencies which use this technique have far less comprehensive regulations; and there is no statutory requirement that any such agency have any guidelines. These sections of the Undercover Operations Act would require the Attorney General to promulgate guidelines for each law enforcement component which is authorized to conduct undercover operations. While the details of the guidelines would be left to the Attorney General, the bill specifies the subjects to be addressed, including procedures for initiating, modifying, or terminating an undercover operation, and standards for determining when targets will be offered an opportunity to commit a crime. The guidelines must also establish an Undercover Operations Review Committee (UORC) for each agency, with representation from the FBI and from the Office of Legal Counsel of the Justice Department. All guidelines, or amendments thereto, must be submitted 30 days in advance of promulgation to the House and Senate Judiciary Committees. Proposed Section 3805 would strengthen Congressional oversight of undercover operations by requiring a detailed annual report to the Judiciary Committees on all closed undercover operations, and on all operations which had been open for two (See proposed 18 U.S.C. Sec. 3803) This section of the Act would establish statutory standards for the initiation, maintenance, expansion, or renewal of an |