abuses by the Office of the Inspector General of the U.S. Treasury Department at my request of the Justice Department.

These abuses and the flagrant interference by the IRS in the political process prompted the top-rated TV investigative program "60 Minutes" to do an expose on November 15, 1981, after 6 months research and over the protests of the IRS and its legislative friends to whom no amount of evidence against that agency's improper activities seems adequate.

ILLEGAL ELECTRONIC SURVEILLANCE AND JURY MANIPULATION

I would particularly like to discuss at some length two incredible issues-that of jury manipulation and illegal electronic surveillance. I urge you to examine the question of bugging citizens who are of interest to the IRS only because they protest or resist taxes. If there is a crime involved, I think that we can all concede that any such wrongdoing is not in the same class of gravity as the drug-related crimes, which often include murder and other forms of violence, where the IRS has defaulted on its obligations.

We in the Congress have been very sensitive in recent years about violations of individual privacy, yet I now present to you a piece of paper which opens a Pandora's box of questions. I refer you, Mr. Chairman, to exhibit No. 1 in section A. Here is yet another case where it seems only the IRS can outlandishly abuse the commonly accepted rights of our citizens.

Here is a letter in which the IRS asks the permission of the Justice Department to violate the privacy of a group of individuals where the IRS itself concedes that the people are not even being bugged for suspicion of a crime. They are in fact being bugged to trace assets, by the letter's own admission.

Now here are a few of the questions which arise.

Where does a minor functionary in the Justice Department get the power to grant another agency the authority to violate people's privacy?

Does the number on the authorization indicate that this was the 824th such violation in that year? Or does it mean only that it was the 824th requested and granted to the IRS alone?

What, if any, verification was made by Justice of the allegations made on behalf of the IRS? The whole world has known for years that the principal, if not the sole, suspect in the murder of Judge Wood was a drug dealer named Sonny Chagra, who, with fine irony, is under indictment for that murder while we sit here. Does not that simple fact suggest to even the most naive that the entire letter is a tissue of fabrication written and simply endorsed as a justification for illegal bugging?

If there were any doubt, I offer an article from the Washington Post of April 16, also in the dossier in which FBI Director William H. Webster states that the investigation into the murder of Judge Wood took 3 years, cost several million dollars and centered on Chagra from the start.

Mr. Clancy's letter implies that these Colorado tax protesters killed Judge Wood at a time when the Justice Department was in the process of building a case against the drug dealer Chagra. Mr. Wilens either knew the letter was a phony or just could not be

bothered to do the most elementary check. I remind you that Mr. Wilens was arrogating the authority to violate the basic civil rights of these targets.

The request and the authorization bear the same date, October 26, 1979. What does this say for the respect for the rights of citizens by the Justice Department charged with the specific duty of protecting them.

But now look at the letter from the point of view of the sender, the IRS Director of the Criminal Investigation Division, Mr. Clancy. Here is the top criminal investigator for the IRS, the Service which never tires of telling Congress of its sensitivity to the rights of the citizen.

First, Clancy wants the bug for the sole and specific purpose of tracing the target's assets, a basis which boggles the mind. Should we draw the obvious conclusion that when IRS wishes to trace a person's assets that illegal bugging is an acceptable procedure?

Passing over several points which could be mentioned, let me direct your attenton to the last full sentence on the first page. In referring to "nontelephonic conversations," Mr. Clancy fairly shouts that the IRS already had a telephone bug in place. By what authority? Did Wilens ever inquire as to the fact and/or legality of such a bug? Apparently not.

A correspondence between the two most powerful agencies of Government, possessed of the capacity to oppress the citizen the most, treats the citizens and their rights as nonexistent. I might mention this is not the only document available. I think I brought this to your attention earlier in hearings late last year in which it was shown the type of individual they were relying on who had been in a state mental institution and also had threatened the life of a law enforcement officer.

Here the Internal Revenue Service was in the process of apparently, according to deposition, making a deal to let that person off for the privilege of being electronically wired for IRS purposes.

Mr. Clancy says that these Colorado types killed a Federal judge in Texas "some time back," on the alleged motive that he had sentenced a tax protester to 45 years. You should remain aware that the IRS is intimately involved in every case, civil or criminal, in which tax administration is involved. The IRS knows in detail what happened in every tax case everywhere in the United States. I telephoned the U.S. attorney's office in San Antonio and spoke to the attorney who handled tax cases for the Government during the time involved. The facts are that the policy in Judge Wood's court was to sentence criminal tax violators generally to 1 year. In many cases, sentence was suspended. In some aggravated cases, the prison sentence was as much as 3 years.

The U.S. attorney most familiar with the cases at the time cannot remember one single case that exceeded 3 years. Plainly, Clancy had to be lying to justify for himself and Wilens the violation of the rights of the targets.

Clancy ultimately says that, pursuant to his own authority, he authorized the use of electronic surveillance and asks for endorsement from Wilens to extend the activity for 30 days.

Let me address what I think will be the main line of defense by IRS for this abuse. The argument will be that this is, after all, only

one case. It is pretty thin to hang an entire collection system for one misstep. This is the standard IRS line whenever they are caught anywhere doing anything improper. Oversight subcommittee staff members used this very line on me when I tried to bring them the early results of my inquiries.

What is plain is that this is not the only case-it is the only case where the offended taxpayer has caught Justice and the IRS redhanded. It is obviously the 824th case in that year of 1979. The letter has all the earmarks of a routine communication. Witness the same day authorization without even the appearance of verification by Wilens.

It accuses these targets of murder and conspiracy to commit murder, yet both the writer and the addressee had to be operating under the secure knowledge that this was all window dressing for an illegal electronic surveillance. Otherwise, no self-respecting bureaucrat would ever pass such a letter without checking, reporting to superiors, and taking a whole host of other self-protective actions.

As I have already pointed out, Wilens knew or had the obligation to ascertain that the IRS targets were not involved in the Wood murder. He passes over the clear signal of an illegal telephone tap, and treats an allegation of conspiracy to commit double murder as run of the mill. Everything about the letter indicates that it is one of a number of such authorizations, part of a routine system of Justice Department rubber stamping of illegal acts by the IRS.

At minimum, the existence and circumstances are sufficiently revealing to require further investigation. The number of such authorizations, the relationship between the IRS and the Department of Justice, and the real or fraudulent claim of the statutory right to make such surveillance should be determined by this subcommittee.

I believe this matter is of such magnitude that Wilens and Clancy should be brought here to this room today and required to justify under oath the acts described in this letter-and it should be done just as though they were ordinary citizens and not important Government officials.

Now, as to jury manipulation, Mr. Chairman: Several months ago one of my aides received a phone call from South Dakota from the wife of a man who had just been convicted of a tax crime and sentenced to jail. She claimed that the U.S. attorney had access to information on the personal tax situation of the jury which heard her husband's case.

My staff contacted the attorney who defended the man. We were told that the attorney was embarrassed to raise the issue since he considered that even a question implying that the U.S. attorney had such information would be an accusation of improper conduct. Nonetheless, in a pretrial conference with the judge and the U.S. attorney, he asked whether the U.S. attorney had obtained such information. He learned to his amazement that, indeed, the U.S. attorney had information on every juror called for jury duty at that court during that time period, whether the cases to be heard were on tax matters or other crimes.

I raised the issue with the Justice Department by a letter, a copy of which is in the dossier. A member of my staff was directed to

the Legal Support Services Section at the Department of Justice where he interviewed a Ms. Georgia McNemar, who was in charge of that section. The lady admitted that the practice of "requesting information" was "universal" and that it was sanctioned by title 26, United States Code, section 6103(H)(5). A later letter from the Justice Department, also in the dossier, reiterated that justification.

Mr. Chairman, some members of the subcommittee may recall a limited discussion of this matter in December during my previous appearance here. However, it is important to discuss in more depth, the several issues apparent in this allegedly authorized practice. First, the statute only authorizes a request, in writing, from the U.S. attorney to the IRS on an individual juror. However, there is reason to believe that these requests are not in fact, in writing, and even if they are, they are admittedly for every member of the venire panel.

Second, the statute authorizes such a request only in cases involving tax administration, that is civil or criminal tax cases. Sɔlicitation of such information as to any other juror remains a Federal crime of illegal disclosure, even for officers of the IRS or members of the U.S. attorney's office. Therefore, it appears that the information which Justice concedes it asks for and gets is outside the statute, and therefore given and received feloniously.

Third, after this matter came to my attention, my office made inquiry of a relatively large number of attorneys active in Federal trial work. They were unanimously unaware of the existence of the statute or of its common use by the U.S. attorney anywhere. They were also universally appalled at the existence or use of such a practice, especially since, by the terms of the statute, defense counsel could not get any such readout on an entire jury venire panel. According to the Administrative Office of the U.S. courts, during the period from July 1, 1980 to June 30, 1981, 648,929 persons were called on venire panels around the country. Under the interpretation placed upon the statute by the IRS and the Department of Justice, this is the number of people whose tax situation is explored by Justice and the IRS each year on the exclusive grounds that they are compelled to appear for Federal jury duty.

All of the invasion of privacy involved in this procedure is without the knowledge or consent of the jurors.

Fourth, Justice and IRS claim that only the single question and the yes or no answer authorized by statute has ever passed between the two agencies. I strongly suspect, but cannot yet clearly prove, that this self-serving disclaimer is false. My suspicion is based on the allegation of the South Dakota defense attorney that he saw a computer printout of jurors, not just a yes or no.

In addition, over years of inquiry I have learned that when the IRS is caught in the act, it will never ever admit the obvious, so strong is its reflex for self-protection. I urge the subcommittee to determine to its own satisfaction, through its inherent powers to acquire information, just what has in fact been passing between the IRS and Justice under the putative authority of section 6103(H)(5).

Fifth, the need and purpose of the statute defy explanation. A simple yes or no as to whether the prospective juror has been au

dited or investigated is relatively meaningless. If the tampering with jury makeup is restricted to excusing jurors who have been audited, it is killing a gnat with a sledge hammer. If there is more, let the Congress tell the people that tax-return confidentiality is a sham.

I tell you frankly that I and the Association of Concerned Taxpayers propose to tell the American people that jury duty entails letting the prosecutor rummage around in their tax returns. I am convinced that restricted to its terms the authorization of section 6103(H)(5) is meaningless and that the involved agencies admit that they go far beyond and even violate its verbal scope.

Should a prudent man, knowing the reputation of the IRS and the growing suspicion about the integrity of the Department of Justice, doubt that the information passed is considerably more detailed than a yes or no? This subcommittee must at some time look at the IRS monstrosity which it is charged with overseeing. With this Nation's tax collection system in such a state of ineffectiveness that it is on the verge of collapse, now may be the last useful time to launch such an investigation.

SUMMATION

Now, Mr. Chairman, let me put what I have been saying in some perspective. Over the past few years the IRS has been caught redhanded in illegal wiretaps; in the excessive use of force on taxpayers; in illegal searches and brutal and unjustified seizures. They have, contrary to law, maintained lists of those whom the agency has decided are enemies of its survival.

They have regularly used their privileged information, gleaned from returns the taxpayer is forced to provide, in illegal ways against anyone they choose, from the ordinary citizen to the public official. They have systematically interfered in the political process as in the cases of Senators Montoya and Long and others.

None of that sorry record is new to most citizens of this country who have lived with the reign of terror. There are those who object when I call it a reign of terror, but 15 years ago, Donald Alexander, then Commissioner of IRS, spoke of instilling fear in the citizens as a necessary part of the tax collection process, an attitude which has continued with subsequent commissioners. Strangely, there has been little or no outcry in Congress about subjecting the people to such a stimulus.

In fact, if there is a surprise in all this record, it is not the abuse of power by the IRS, rather it is the utter failure of the Congress to do anything at all to stem that abuse of power. Both from inside the IRS and from its victims, the record is clear that such abuse of power exists and is rampant.

Mr. Chairman, there is in your dossier a folder with a number of segments from the Congressional Record called "The IRS Strikes People Everywhere" and I invite you to look at this for a good cross section of the kinds of complaints that we have been getting.

Yet in the past 10 years, with the exception of a few weak provisions in the Tax Reform Act of 1976, the Congress has increased rather than decreased the powers of the IRS and decreased the protection of citizens.