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Now, with respect to the numbers in the companies, in the 28 operating entities, if you take the A.T. & T. and include that in it, there are only in the 28, 644 employees out of over a million total employees by these companies. We have assets in the order of probably close to $70 billion plus revenues, which I have the statistics on, revenues for 1973 were $23.5 billion, in addition to $70 billion worth of property, or close to it.

The securities department's function, I might say, in areas like wiretapping and electronic toll fraud is a very minimal part of their overall responsibility. These 644 employees cover all of the companies. Now, of that, the number, because I have seen it bruited about in the press of our having a great many members of the Federal Bureau, we only have 42, 612 percent of our total force, are former members of the Bureau who are in security positions, and most of them are people of relatively short Bureau experience and such long telephone experience that although we don't think—and I don't mean to say it washes out their sins, because I am sure they are without sin, to be facetious for a moment-still, they are of long telephone experience.

And let me give you a figure that may interest you. We have the heads of our 28 groups, only two of the operating heads-the New England Co. and the Northwestern Bell Co. at the present timehave had any FBI background. The head in security and one in Western Electric, which is a non-Bell-I'm sorry, in A.T. & T. security, and the one in Western Electric, which is a nonoperating company, also are members of the FBI.

Now, let us look at their experience just to give you an illustration. New England Tel, 6 with the FBI, 20 with the telephone company; Northwestern Bell, it was 12 and 5. In the case of A.T. & T. it was 21 and 5. We have in addition-and of that, less than 1 percent of the force are retired FBI personnel of that 62 percent. The others are very short term.

We also have some 50 others, which would be 7.8 percent of the force, who have some law enforcement background, non-CIA. We only have one or two others who were in the Federal group, not that there is anything wrong, with reference to members of the CIA. I am sure they make very attractive security people. They don't seem to seek telephone company work.

Mr. KASTEN MEIER. There is nothing wrong with that, or being a former member of the FBI. As a matter of fact, several members of the Judiciary Committee are former members of the Federal Bureau of Investigation.

One of the reasons, to interrupt, however

Mr. CAMING. I'm sorry.

Mr. KASTENMEIER. And there is a numerical inconsistency here. There was a column in a news release, an AP release covered in the Washington Post last month on January 1, which indicates that the Bell System, the legal eavesdropping in the Bell System is done by the small, tightly organized group of not 644 employees, but 665 security agents. They control when, according to this article, when, where, and how it is done.

At least 76 members of that force are former FBI agents. You indicated 42. And then it refers to a spokesman for A.T. & T., and

then the next paragraph, the spokesman, Attorney H. W. William Caming, and so forth. So, I am wondering, how do you explain the difference?

Mr. CAMING. Well, understandably with the vast press of problems that the newspapers have in meeting the deadlines, and the various sources they gather from, some of whom are not necessarily thinking of the best interest of the public or the Bell System, these figures may have arisen. I know not the source. These are figures which I have had taken and prepared in great depth, effective January 1975, of the Bell System. These were responded to by each of the companies. This is fact, not allegation.

Mr. KASTENMEIER. I take it that the reporter obtained his information from what he thought was reliable sources, but not from you. I would only note that there is not a great deal of discrepancy.

Mr. CAMING. I will respectfully defer when you say from reliable sources. I cannot comment on that whether they were, but I do know that there is no question about this, Mr. Kastenmeier, this is fact. I can produce every name, and there are no others except this group that I know of that handle any function.

Now, if it appeared in the newspaper, I am sure that the reporter did think he had a reliable source, and it is a very highly regarded newspaper, but in fact, this is the statistical situation and I am powerless to say anything else, except express the facts.

Mr. KASTEN MEIER. Actually the deviation is minor, although 665, or 644, one referring to agents, and the other to employees, whether the 644 could not be referring to all as agents, I take it.

Mr. CAMING. May I say, as there are members of the Judiciary Subcommittee with an FBI background, there are members of the telephone industry with an FBI background who are not in any way connected with security. There are 20 to 25 of those.

Mr. KASTENMEIER. Well, no, the story says at least 76 members of that force are FBI agents.

Mr. CAMING. Well, all I'm saying is the facts are, so that you can rest assured what they, and we will be glad to, if you wish, produce every one of the 665 names, or whatever, 644.

Mr. KASTEN MEIER. That will be fine. Yes, we would request that for the purpose in following this matter up. That would be useful. In the nature of what annual expense is incurred by the Bell System, by A.T. & T. in maintaining this security force and in its operations? Mr. CAMING. I would have to have those figures assembled. I am not prepared. I think we would have to poll the individual companies. As you can recognize, we operate nationwide. The amount that we expend for this security force, in view of the major responsibilities in the area of prevention, in areas of indoctrination of employees, as well as detection of crime, make this a very small proportion of our total revenues of $23 billion a year.

Mr. KASTENMEIER. I appreciate that. One of the reasons I asked this, to give you fair warning, but I am sure you are able to assess it anyway, is because of the allegation made that while the company suggests that the blue-box problem is the major reason to maintain a security force of this size, that as a matter of fact, the cost of the force, even as imputed to the little blue-box problem, exceeds the losses that are attributed to it.

Now, without arguing that point

Mr. CAMING. May I respectfully address myself to that because I think that that statement is understandable, quite, Mr. Kastenmeier, but it has nothing to do with the facts, which I am sure you are most interested in. First, there was no imputation that the speaker is not at fault, nor that the major use of our security force is in electronic toll fraud. What I said was that if electronic toll fraud is not scotched like a snake wherever it appears, the losses could be of staggering proportions and you could see if one-half of the population had a blue box it would clog the facilities and destroy our ability to serve effectively.

But our security forces' functions overall are in the area of prevention, protection of property, protection of assets, there are many other types, coinbox larceny, credit card fraud, third billing fraud, the actual physical safeguarding, instruction of personnel, deciding how the property is to be supervised and protected. These are the functions of the security. The 644 do not devote themselves to electronic toll fraud. I repeat, they do not. It is a very small, select group in each company, and we are only talking of 644 in 28 companies which, due to my very poor mathematics, I hesitate to speculate on proportionately, but I think it's only about 25 to a company. We cover 48 States, and we are engaged in innumerable activities, court ordered wiretapping, for example, takes some personnel. Treatment of personnel. So that 644 in nowise reflects within each company those who engage in electronic toll fraud. It is a very small segment of that group. Most of this is done mechanically by computers, by testing gear. It is done by accounting departments, and it is done by receiving aid from informants.

We just did with reference to a gentleman who is well known for a bevy of beauties, and one of his beauties was using a blue box which got a great deal of publicity in the Los Angeles area. But the number of personnel of the 644 devoted to electronic toll fraud is a very small proportion, and the amount of savings in proportion to that is very substantial. The potential savings are beyond compare.

Mr. KASTENMEIER. Therefore, the company official of Southwestern Bell Telephone who was quoted in the press as saying that the security force of Southwestern Bell Telephone was essentially devoted to matters such as the little blue-box problem is probably incorrect and inaccurate.

Mr. CAMING. Yes: I think you have reference, without mentioning his name, to the ex-Southwestern Bell employee who is suing for some $29 million, and who has made many newspaper allegations.

We will respectfully respond to them. We are very carefullyMr. KASTENMEIER. I was not referring to him. I was referring to the defensive explanation on the part of a company official. His allegation was not that. The defensive response on the part of a company official in Southwestern Bell Telephone was that, well, we need all these security personnel for the little bue-box problem. But you are indicating basically your personnel are not used for that problem.

Mr. CAMING. I would say that certainly they are used for that problem, but from a Bell System-wide standpoint, and I think, for example, in the C. & P. company, we have Mr. Connor with us, it would be a good illustration that a very small fraction of their time, an im

portant fraction; just as it is with credit card fraud, coinbox larceny, a very small fraction of that time is devoted to blue-box fraud, and that is the system practice.

Now, in a particular area, or in a particular set of circumstances, the problem could be more acute than others, as in some cases we have areas where we have a great deal of coinbox larceny, and in other areas, like Madison, Wis., we have very little, is our experience, but this does not mean coinbox larceny is not a real problem in New York City.

Mr. KASTENMEIER. In conclusion, Mr. Caming, I would request, and, of course, it would require some time, I suppose, to accumulate the figure on the costs of the Bell System, and its subsidiaries in maintaining a security force, and the names, and at least superficially the background. I guess we are really interested in the Federal agency prior connection of certain of the security force people.

I gather Mr. Drinan still has some questions.

Mr. DRINAN. Yes; I do.

Mr. CAMING. May I, Mr. Drinan, just to clarify Mr. Kastenmeier's question, I would like to give the committee a full view. You have mentioned the Federal forces. If I may respectfully, I would like to also include any local or State officials. We have nothing to hide from this committee, and I would like to give the background on all of them.

Mr. KASTEN MEIER. That would be very helpful. I do not wish to impose something terribly difficult.

Mr. CAMING. It will take awhile. I have the figures right now, by the way, but I do not have the names of the individuals. If you want just the figures and the breakdown completely without the names. I can give you those.

Mr. KASTENMEIER. We will wait for whatever you have as a composite.

Mr. CAMING. In other words, you would like the names of each individual.

Mr. KASTENMEIER. We would.

Mr. CAMING. It will be a pleasure.

Mr. KASTENMEIER. I would also like, and here I think generalities would be all right, more or less the breakdown of overall devotion to certain tasks. For example, if 15 percent of the time is devoted to toll fraud cases, and 15 percent of the time is devoted to cooperating with Federal authorities and installing wiretapping devices, or whatever. Mr. CAMING. Zero in installing wiretapping devices.

Mr. KASTENMEIER. Well, whatever.

Mr. CAMING. I know, title III, court ordered, or the like, toll fraud or indoctrination of employees, and protection of plant.


Mr. CAMING. Certainly we'll give you the complete story of the entire overall.

Mr. KASTENMEIER. The mystique or the mystery of at least some of these so that we can determine to what extent some of the stories that have already appeared are correct or incorrect.

Mr. CAMING. It will be a pleasure, and if I may, I will work with Mr. Mooney and Mr. Lehman in providing the figures. Mr. KASTENMEIER. Mr. Drinan?

57-282-76-pt. 1- -17

Mr. DRINAN. Mr. Caming, I would think you would want a clear Federal statute to warn all people that the use of a blue box is a crime and that they can be prosecuted.

Have you people thought of seeking a Federal statute that would make it clear beyond a doubt that the use of a blue or black box is not merely a fraud on the phone company but it is a serious crime?

Mr. CAMING. Yes; we have. We have in a number of States statutes that say use, manufacture and possession, sale, advertising of blue boxes, et cetera, is a serious crime.

Mr. DRINAN. Would not a Federal crime

Mr. CAMING. That would be very helpful. We do use fraud by wire, section 1343 of 18 United States Code.

Mr. DRINAN. Why do you not propose a law. Maybe it will be less murky than the one that turned up in 1968. We are here to help you and to prevent all of the misunderstandings that may arise.

Now, reading the two or three cases here since 1968 that support your position, I would feel, and I think that you would, that you are going to have a different result some day, that if you continue to litigate this in the court, some lawyer is going to turn up with some angle on this thing that it seems to me that will say that you may not monitor because monitor is a euphemism for intercept. There is just no doubt about it, that the random monitoring means random intercepting, that you listen. And in the case, for example of the gentleman from abroad-what is his name, Mr. Shaw, that you, the telephone company, listened until you found the name of Mr. Shaw, and then you called in the authorities. Well, this must have occurred to you that when you think that this is happening, why do you not ask the Federal or State authorities to get a search warrant and go and try to get the blue box. That is the way of circumventing all of this. Mr. CAMING. We have, and I think this is well taken. I would like to thank you for the opportunity to present some legislation.

Second, we have employed that and we do wherever possible. However, because of its small size, portability, the fact that it is often used on a variety of telephones, it is very difficult to seize this in use, and unless you do that, possession is not illegal under Federal law.

Mr. DRINAN. Well, that is the whole point, you see, why do you not make possession-I take it that the blue and black boxes can be used for nothing else except to defraud A.T. & T.

Mr. CAMING. Exactly.

Mr. DRINAN. It seems to me that mere possession should be a crime, and then you can get a search warrant, and then the appropriate officials can go, and then this is destroyed.

Mr. CAMING. We still might require-and this would be very helpful-I am delighted, and I agree with you completely, it still may be necessary to have a very limited amount of recording in order to identify the criminal, in order to get the search warrant. In other words, we have to have a minimal probable cause, and that is our present philosophy. We do not stay on the conversation, and we do not record a large number of calls.

Mr. DRINAN. Well, one very technical point that perhaps you would want to submit something on this, but there is a device I understand, M220, by which you can preclude the necessity of actually intercepting or monitoring a call.

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