GAO May 1992 Proposal to Clarify •Provides general FBI wiretapping needs to maintain • Specifies industry responsibilities and time limits • Gives Justice authority to GAO What Is Not Addressed in Proposal Specifics on what is full •Draft May 1992 wiretapping • Who pays for the cost of solutions ORGANIZED CRIME APPENDIX The President's Commission on Organized Crime stated the following conclusions in its report, The Edge: Organized Crime, Business and Labor Unions: • If unchecked, organized crime can take over, own, and operate legitimate business. It can also control entire industries. The ways in which industry can be affected are by the increased price of items due to theft, bribery (kick-backs), price fixing and the control of trade. • The control of the marketplace by organized crime is also obtained by tile control of unions and by monopolizing power in specific industries. • Through the control of unions, payoffs can be demanded to ensure labor peace. Businesses comply with the labor union's demands rather than lose profits or lose business. Another deleterious effect of organized crime control is through the illegal utilization of union funds. At the time of the report of the PCOC, union benefit funds had cumulative assets of over $51 billion. Influence in the unions on a local level, if strong enough, may lead to control of the union at the international level. • The costs of labor racketeering are hard to trace. The Commission estimated that millions of dollars in workers' labor union dues were stolen from the unions through embezzlement, lost through illegal loans, and taken through extortionate and illegal fees paid to trust and service fund providers. As a result, the U.S. public is forced to pay higher commodity costs because of organized crime's control. Examples cited by the Commission of the various types of economic loss are: • Amalgamated Local 355, an independent union in Queens, New York, lost nearly $2 million in a kickback and embezzlement scheme in the mid-1970's. The scheme involved the union's secretary/treasurer and a well-known real estate developer. The control of the concrete industry by the LCN in New York, as brought out in the LCN Commission indictment, was demonstrated in evidence which showed that over the period 1981-1984, the 2 percent skim collected on the total cost of poured concrete, on the delivery of it to the job site, and on the attendant labor costs could range anywhere from $1.6 to $3.5 million. This figure was estimated on the control of the concrete industry alone. Increased construction costs then lead to higher overall building project costs and increased rental rates, etc. Essential evidence supporting this prosecution was derived from electronic surveillance. Through the utilization of electronic surveillance, Federal and state investigations continue to have a significant impact upon organized crime groups. In Fiscal Year 1991, at the Federal level, there were 239 recorded convictions and 246 indictments of LCN members and associates. In addition, civil RICO complaints spawned by the criminal investigations were filed against 25 individuals and/or entities, and judgments were entered against 23. Aggressive use of the seizure and forfeiture provisions of the RICO statute yielded $17,554,865. Over $11,779,106 in fines were levied against convicted individuals; recoveries and restitutions totaling $22,881,539 were obtained; and $7,044,625 in potential economic losses were prevented. A few recent cases, wherein electronic surveillance played a critical role, illustrate the importance of maintaining the efficiency of this investigative technique. • Commercial seafood and longshoremen dock-loading industries. For over 70 years, organized crime, and particularly the Genovese LCN family, had dominated and controlled the Fulton Fish Market and its immediate environment in New York City. Through electronic surveillance which spanned over two years, the government acquired substantial evidence as to the influence and control of organized crime in the seafood industry and the labor unions related to it. As a result, in October 1987, a civil RICO complaint was filed against the Genovese LCN crime family, certain unions controlled by organized crime, and a number of LCN members and associates. In 1988, in a landmark RICO decree and judgment, the Fulton Fish Market was placed under the oversight of a court-appointed administrator. Judgments in this civil RICO action permanently bar the Genoves LCN crime family and other defendants from having any future dealings in that seafood market. Although it is difficult to quantify the impact of the government's intervention into this industry, the enormous economic and social costs associated with the LCN's control of this market have been significantly reduced. Illegal activities such as hijacking, gambling, robbery, burglary, loansharking, extortion, murder, narcotics trafficking, and labor racketeering flourished in the Market's environment while under the dominion of the LCN. These activities have dramatically abated with the imposition of the consent and default judgments. The court-appointed administrator and other independent sources of information, such as the media, report that the Fulton Fish Market has sales approximating two billion dollars annually. Seafood that passes through the market is bought and sold throughout the United States. Illegal activity at the Market has inflated seafood costs by $1-2 dollars per pound and virtually every household in America has absorbed that cost. By a conservative estimate, the American public has been spared literally millions of dollars in increased seafood costs as a result of this investigation. • International Longshoremen's Association. This investigation focused primarily upon corruption on the New York and New Jersey waterfront the second largest port in the world. The civil RICO. complaint names as defendants the International Longshoremen's Association (ILA), their executive boards, six local labor unions, and 32 present or former officials of these ILA locals, 21 of whom are identified as members or associates of the Gambino and Genovese LCN crime families, and the "Westies" criminal gang. Twelve additional individuals are identified in the complaint as members or associates of the Gambino and Genovese LCN families and the Westies, and several employers in industries affecting waterfront commerce are named for purposes of obtaining adequate relief. The complaint alleges that the LCN figures have used these locals and their various affiliated benefit funds to conduct a pattern of racketeering activity on the waterfront, which includes murder, extortion, embezzlement of union funds, illegal labor and benefit fund payments and mail fraud. To prove such wide-ranging conspiracies, the type of evidence needed typically requires substantial reliance upon electronic surveillance-based information. These investigations, which heavily relied upon electronic surveillance, demonstrated an extraordinary breadth of control by the Genovese LCN family over waterfront activity that extended from the New York-New Jersey piers all the way to the Port of Miami. This pervasive control by organized crime over the waterfront extends back to the turn of the century. Organized crime obtained this control by its early recognition that to transport goods to the eastern seaboard, markets often required passage through the New York/New Jersey waterfront, and that this transportation terminal point presented a labor intensive bottleneck. To control waterfront labor, thus, was to exercise tremendous leverage over the entire shipping industry, effect the commerce of a huge section of the American economy, and ultimately to drive up prices of a myriad of commodities sold in the United States. There are numerous other examples where, through the use of court-ordered electronic surveillance, major economic harm was abated. The nationwide investigation into organized crime-labor racketeering influence in the union health and dental care industry has resulted in the termination of frauds and kickbacks which cost unions and insurance companies millions of dollars. In one investigation, sixteen different FBI field offices were involved, eight of which conducted extensive electronic surveillance. At the conclusion of the investigation in September, 1988, seven separate Federal Grand Jury indictments were returned in Atlanta, Chicago, Baltimore, San Diego, and San Francisco, charging ten individuals and five corporations with numerous Federal violations including RICO, conspiracy, mail fraud, wire fraud, and labor racketeering. As a result of this investigation, ten health care executives were convicted, the U.S. Public Health Service changed its bidding procedures nationwide, SAFECO Insurance Company terminated its practice of paying double commissions to insurance agents nationwide, and spin-off investigations resulted in the conviction of a Federal judge and two labor-related, organized crime leaders. Electronic surveillance was extensively utilized in the landmark civil RICO investigation called "Liberatus" which resulted in the formal break up of LCN control over the nation's largest union, the International Brotherhood of Teamsters. The LCN's grip over this union had been intact since the 1950's. As a result, for the first time in decades the nation's largest union is free from organized crime control and corruption, and the continued pillage of union funds has ceased. NATIONAL ASSOCIATION OF ATTORNEYS GENERAL ADOPTED SUMMER MEETING JULY 8-11, 1992, PITTSBURGH, PENNSYLVANIA RESOLUTION SUPPORTING LEGISLATION TO CLARIFY THE RESPONSIBILITY OF TELECOMMUNICATIONS COMPANIES TO ASSIST LAW ENFORCEMENT WITH COURT-AUTHORIZED ELECTRONIC SURVEILLANCE IN LIGHT OF NEW TECHNOLOGIES WHEREAS, one of the most important and effective tools used by federal, state and local law enforcement in the investigation of criminal activities is the court-authorized interception of communications or wiretapping; and WHEREAS, 37 states and the District of Columbia, Puerto Rico and the Virgin Islands have enacted legislation authorizing their state and local law enforcement agencies to conduct court-authorized electronic surveillance in criminal investigations; and WHEREAS, approximately 60 percent of the court-authorized wiretaps conducted annually in the United States are by state and local law enforcement agencies; and WHEREAS, federal and state electronic surveillance statutes set forth a procedure for obtaining judicial authorization to conduct electronic surveillance and require the telecommunications industry and others to provide law enforcement with "all information, facilities, and technical assistance necessary to accomplish the interception," 18 U.S.C. §§ 2518(4) and 3124(a)(b); and WHEREAS, the telecommunications industry is introducing, and has introduced, a number of advanced technologies, including digital technology which facilitates the simultaneous transmission of multiple commingled communications, impeding the ability of law enforcement to lawfully intercept specific communications to the exclusion of all other communications not the target of electronic surveillance; and WHEREAS, modifications to certain of these advanced technologies are required so that law enforcement can continue its use of court-authorized electronic surveillance to intercept the communications of persons engaged in criminal conduct, to the exclusion of others; and WHEREAS, legislation has been proposed that requires telecommunications and other electronic communication service providers, when authorized by law, to provide law enforcement with the capability of intercepting the entire content of communications of persons engaged in criminal conduct, to the exclusion of all others, regardless of the technology involved; Now, therefore, be it resolved that the National Association of Attorneys General: 1) Supports legislation which requires telecommunications and other electronic communication service providers, when authorized by law, to provide law enforcement with the capability of intercepting the entire content of communications of persons engaged in criminal conduct, to the exclusion of all others, regardless of the technology involved; and; · 2) encourages Congress to adopt such legislation; and 3) authorizes the Executive Director and General Counsel to transmit these views to the Administration, the Congress and other interested organizations and individuals. Abstains: Attorney General Chris Gorman NATIONAL DISTRICT ATTORNEYS ASSOCIATION RESOLUTION CONCERNING THE DIGITAL TELEPHONY AND COMMUNICATIONS PRIVACY IMPROVEMENT ACT WHEREAS, one of the most important and effective technique's used by state, local and federal law enforcement in the investigation of complex and life threatening criminal activities is the court-authorized interception of otherwise private communications (wiretapping), and WHEREAS, 37 states and the District of Columbia, Puerto Rico and the Virgin Islands have enacted legislation authorizing their state and local law enforcement agencies to conduct court-authorized electronic surveillance and establishing administrative and judicial oversight procedures to ensure the protection of privacy interests; and WHEREAS, approximately 56 percent of the court-authorized wiretaps conducted annually in the United States are by state and local law enforcement agencies; and WHEREAS, both federal and state electronic surveillance statutes set forth a procedure for obtaining judicial authorization to conduct a wiretap and require the tele |