Senator BAYH. Now, I want to make sure that we are talking about the same thing.

Your request to OMB was for how many more additional slots?

Mr. ALEXANDER. I think-I told you that I think it was 146. I will get that for the record. I don't have it.

Senator BAYH. And how many additional dollars?

Mr. ALEXANDER. I will get that for the record. It was about $15 million more.

[Subsequent to the hearing the following information was received:]

[EXHIBIT No. 13]

Question 5. Senator Bayh: "Can you tell us what the difference was in the amount for the last fiscal year and this fiscal year, as far as the budget request from OMB?"

Commissioner: "What we submitted to OMB?"

Senator Bayh: "Both."

Commissioner: "I would be glad to give you what we submitted to OMB and then what OMB had us submit to Congress, because they are far different."

Senator Bayh: "Your request to OMB was for how many more additional slots?"

Senator Bayh: "And how many additional dollars?"

Response. For the Intelligence Activity in fiscal year 1976, the Service's budget request to the Office of Management and Budget proposed an increase of 476 average positions and $11.9 million for staff increases which was reduced to 63 average positions and $3.0 million for the submission to Congress. Congressional action resulted in a further reduction of 35 average positions, though there was an increase in the dollar amount by $1.4 million to cover the cost of a Federal pay raise. In fiscal year 1977 the request to the Office of Management and Budget proposed an increase of 134 average positions and $4.5 million for staff increases which was reduced to zero and the activity was further reduced below the FY 1976 level by 387 average positions and $6.2 million for the submission to Congress.

Senator BAYH. You say now that OMB cut it by 300?

Mr. ALEXANDER. Over 300.

Mr. CLANCY. I believe 387 staff years. That includes both special agents and others, clerks or paraprofessionals.

Senator BAYH. How many dollars was that amount?

Mr. ALEXANDER. I think the dollar cut was about $5 or $6 million.
We're guessing now based on recollection.

Senator BAYH. Well, are you talking about positions and dollars for this special narcotics program?

Mr. ALEXANDER. No, sir. We're talking about the entire Intelligence Division budget.

Senator BAYH. Which encompasses what area?

Mr. ALEXANDER. That encompasses the special agents and the support of the special agents to cope with the tax evasion, whoever committed it, narcotics traffickers, organized crime figures, corporations, corrupt politicians, lawyers, accountants, doctors, farmers, businessmen, everybody.

We have more than 85 million taxpayers. Many of them comply; some of them don't. We have an obligation to those who do comply

to see to it that those who don't are found out and punished; and I'm sure you agree with that, don't you?

Senator BAYH. Of course, I do.

Have you made a supplemental request?

SUPPLEMENTAL REQUEST REJECTED BY OMB

Mr. ALEXANDER. We made one. It was turned down by OMB.
Senator BAYH. How large was the supplemental for?

Mr. ALEXANDER. It was about $20 million in this and the corporate slush fund area, Mr. Chairman. We combined them. There was another, about $8.5 million, for coping with the Employee Income Retirement Security Act.

Senator BAYH. Čan you explain to me what appears to me to be a remarkable inconsistency about the President-he gives us a very strong speech about what we need to do in the area of narcotics and narcotics control, then the President and his Office of Management and Budget sends decreased budget requests for both staff and dollar to the Congress?

Mr. ALEXANDER. I cannot comment on that, sir.

Senator BAYH. I think you are wise not to comment. However, I don't know how you are supposed to do the job unless you get the

necessary resources.

I would like for your staff to consult with my staff relative to what you feel is a necessary resource level in this area. And as a member not only of this committee but a member of the Appropriations Committee, I would like to take that up with the other committee. If the President won't do it, maybe we can.

Mr. ALEXANDER. We greatly appreciate that, Mr. Chairman.

I might point out that our supplemental was turned down, but we were told we could resubmit it in the fall, in September. Well, September is rapidly approaching, and you can be darn sure we are going to resubmit it.

Mr. GLYNN. I will contact your counsel, Mr. Chairman.
Senator BAYH. Yes, I wish you would.

During Commissioner Alexander's testimony before Senator Bayh's Subcommittee on August 5, 1976, the Senator asked that we consult with his staff as to the level of resources necessary for the Internal Revenue Service to discharge its responsibilities relating to narcotic traffickers (lines 17-19, page 61, of transcript). Pursuant to this, the following information is offered for consideration by the Subcommittee.

IRS experience with criminal tax fraud investigations of high echelon drug traffickers and racketeers indicates that each senior special agent, working with a revenue agent, can complete one to two in-depth "net worth" investigations per year.

During FY 1977, Intelligence supported by Audit, Chief Counsel, and Collection - intends to conduct criminal tax investigations on an estimated 500 narcotics suspects. This will require 890 average positions, including 300 special agents, 300 revenue agents, 65 average positions in Chief Counsel and Collection, and 225 other average positions in support roles. Staffing from Chief Counsel and Collection is required to fully effect this joint enforcement program. Attorneys from Chief Counsel provide legal advice and assistance early in each investigation to the agents involved. Revenue officers from Collection become involved in a case when collection of the tax due is in jeopardy, and when jeopardy or termination of taxable year assessments are made.

To accomplish this program, the following supplemental resources will be needed for FY 1977.

With these expanded resources, the Service would realize an additional 890 average positions in FY 1977. This would necessitate hiring about 1,198 new employees assuming an average entry-on-duty date of January 1, 1977 and a commensurate increase in positions. These additional positions would be reduced to some 890 in FY 1978, by attrition, thus maintaining the FY 1977 level of staff-year effort in FY 1978.

A FY 1977 budget supplemental for the Service in this amount is presently under review by the Office of Management and Budget.

Mr. ALEXANDER. Mr. Chairman, let the record show we are not here asking for additional money, because I am told not to. But I am pointing out the facts in response to your question.

Senator BAYH. Well, I think the record will show that I did ask the question. If there is anything that is the ultimate in irresponsible demagogery, it's those people who beat their chests and point out the problems of narcotics, the lives that are lost, the unscrupulous individuals involved, and yet they do not exercise their responsibilities to provide the resources to do the job. I doubt there is anything to be gained by saying more about this area.

MONETARY, INTELLIGENCE, AND NARCOTIC TRAFFICKERS PROGRAM

We got away from the question that I asked relative to the MINT problem-Monetary, Intelligence and Narcotics Traffickers program. Is it still operating?

Mr. ALEXANDER. We are drawing a blank here. Now, I have heard of that expression before, Mr. Chairman, but we will have to check to see to what extent it is our program, and being our program, to what extent it is still going. It might have been a particular project. Mr. CLANCY. I think I can answer part of your question: "Are we still involved in it ?"

Senator BAYH. It seems like you have already answered it.

Mr. CLANCY. If it's an intelligence program, I think I can say: "No, we are not." But whether we were ever involved in it, or to what extent, I am not familiar with it.

Senator BAYH. I have been advised that this was a task force designed to provide intelligence on schemes used by people to reinvest illegal money, gained from narcotics, in various legitimate resources and legitimate businesses-or to conceal assets out of the country.

Mr. CLANCY. I would be very interested in getting the facts on it. Senator BAYH. Well, if it isn't MINT, is there another program currently providing a special effort in this area?

People who make these illegal profits are untaxed and later they try to either invest these assets in this country in legal businesses, or spirit them out of the country. What is the IRS doing, if anything, to detect and prosecute these tax evaders?

[Subsequent to the hearing the following information was received.]

[EXHIBIT NO. 15]

Question. Senator Bayh: "Is [MINT] still operating?

Response. During the NTP program, the Intelligence Division obtained information that several targets and organized crime subjects were using the facilities of a Bahamian bank in a tax avoidance scheme. MINT was an acronym used to describe this phase of the NTP program, i.e., MONETARY INTELLIGENCE NARCOTICS TRAFFICKERS, which was initiated in November 1972. MINT was subsequently referred to as Project DECODE (Detection and Exposure of Concealed Overseas Deposits for Evasion). Finally, in an effort to avoid the use of acronyms to describe Service projects, DEODE was renamed Project HAVEN which more accurately described the project, i.e., the use of foreign banks for tax evasion.

Project HAVEN is a continuing investigation and the Department of Justice, with the cooperation of Chief Counsel and our Intelligence Division, is presently conducting Grand Jury proceedings in the Southern District of Florida.