politan area, with membership from a broad range of Federal, State and local drug law enforcement agencies operating in that area. The UID has a small central staff housed within the DEA regional office and analyzes and disseminates intelligence information for the area. Field Intelligence Exchange Group (FIEG): The Cabinet Committee on Drug Law Enforcement has proposed that interagency groups be formed in 19 major cities to focus intelligence resources upon selected major trafficker targets. On August 20, 1976 pilot efforts to test this concept were begun in Chicago and Miami. Agencies participating include DEA, Customs, IRS, the U.S. Attorney's Office, INS, Coast Guard, FBI, Secret Service, ATF and representatives of State and local law enforcement. Despite this progress, much more needs to be done. Plans to further improve the dissemination of information are discussed in the next chapter. SECURING EFFECTIVE REMOVAL OF TRAFFICKERS Earlier, we discussed the progress being made in focusing Federal law enforcement resources on the arrest of major traffickers. Much of the progress we have made in improving our ability to apprehend these traffickers will be lost, however, unless major changes are made in the way our criminal justice system deals with drug traffickers after arrest. To deal with the failure to immobilize traffickers against whom substantial cases have been developed, President Ford proposed legislation in his April 27, 1976 special message which would: 1. Require minimum mandatory prison sentences for persons convicted of high-level trafficking in heroin and similar narcotic drugs. These minimum sentences-three years for a first offense relating to an opiate and six years for an offense following a previous conviction or for selling an opiate to a person under 21 years of age are intended to ensure that drug traffickers know that they will go to jail upon conviction. 2. Enable judges to deny bail in the absence of compelling circumstances for certain categories of notorious drug defendants. These defendants include those persons previously convicted of an opiate felony, persons on parole, probation, or other conditional release, non-resident aliens or persons in possession of illegal passports at the time of arrest, and persons convicted of having been fugitives. 3. Raise the value of property used to smuggle drugs which can be seized by administrative as opposed to judicial action from $2,500 to $10,000 and extend this forfeiture provision to include cash or other personal property found in the possession of a narcotics violator. 4. Make meaningful an existing provision which requires that any person planning to transport an amount exceeding $5,000 file a report, and that the report be filed prior to departure. 5. Reduce the opportunities for unloading of contraband by requiring owners or masters of small, privately owned boats to report their arrival to the U.S. Custom Service immediately, instead of within 24 hours. Enactment of this legislation would represent a major contribution to the Federal anti-narcotics effort. Securing enactment is thus one of the highest priority "open agenda" items discussed in Chapter 4. The problem of fugitives is significant: currently there are 2,547 Federal fugitives charged with drug-related offenses. Of these, 345 are Class I major traffickers. To help deal with this problem, the FBI will utilize resources available to them to assist DEA in apprehending major drug fugitives. In addition, the Department of State, the Immigration and Naturalization Service, U.S. Customs and the Criminal Division of the Department of Justice are developing plans for coordinating the controlled re-entry of drug law fugitives into the United States. These plans will include a review of existing extradition treaties with an eye toward strengthening them as necessary. Finally, to attack the financial resources necessary for narcotics traffickers' illegal transactions, in his April 27, 1976 Special Message on Drug Abuse the President directed the Secretary of the Treasury to work with the Commissioner of the Internal Revenue Service, in consultation with the Attorney General and the Administrator of the Drug Enforcement Administration, to develop a tax enforcement program aimed at key traffickers. To begin implementing that directive, the Administrator of DEA and the Commissioner of the Internal Revenue Service have signed a Memorandum of Understanding providing for exchange of information on major drug violators who may be guilty of tax evasion. So far, the names of 375 Class I drug violators have been sent to IRS field officials so that tax investigations can begin if warranted.18 In June 1976, a U.S.-sponsored resolution urging governments to make the financing of narcotics traffickers a punishable offense and to exchange information that would be helpful in identifying persons committing such offenses, was adopted unanimously by the United Nations Economic and Social Council. Action to this end should prove to be a significant step toward improved cooperation in narcotics investigations. In addition, the recently concluded U.S.-Swiss Mutual Assistance Treaty on Criminal Matters, which becomes effective in January 1977, should expedite the exchange of information concerning persons engaged in criminal activities, including alleged drug traffickers, even while the case is still in the investigatory stage. Exploratory discussions have been held or are underway in a number of countries with a view toward entering into mutual assistance agreements for exchanging information to disrupt the financing of international crimes. To provide specialized prosecutorial support to the program aimed at incarcerating major drug traffickers, the Attorney General has devoted greater resources to more extensive enforcement of the conspiracy laws of the United States. There are presently special controlled substances prosecution units in operation in the offices of 19 U.S. Attorneys throughout the country. The U.S. Attorneys were alloted additional personnel to staff these units so that prosecutors would be in a position to devote full time to major cases. In addition, DEA has established a headquarters staff to support conspiracy cases and has put greater emphasis on its Central Tactical Units which specialize in the development of major conspiracies. Both the Criminal Division of the Department of Justice and DEA monitor the activities of the prosecution units and conduct seminars to train attorneys and agents. In addition, DEA has a conspiracy investigation course for agents which is now being expanded to train personnel in the domestic regional offices. It should be clear from this discussion that we believe a great deal of progress has been made over the past 18 months in revitalizing and refocusing the Federal drug abuse program and putting it on a sound basis, but there is more we must do. This is the subject of the next chapter: "The Open Agenda." 4. THE OPEN AGENDA As indicated in the previous chapter, we have made progress in the past 18 months, particularly in the fuller utilization of Federal resources. Nonetheless, much remains to be done in all of the areas discussed there. Specifically, Federal enforcement efforts can still be more narrowly focused on high-level, interstate and international traffickers. The Internal Revenue Service, the Federal Bureau of Investigation and State and local law enforcement organizations can all contribute more to an overall enforcement program. We can do much more to encourage other nations to join us in this truly international struggle. We need to secure passage of new legislation aimed at improving our ability to put major traffickers in prison and at closing loopholes in the law which allow them to continue to prey on our young. And we need to enlist State and local vocational training services; and State, local and private organizations in a broad prevention effort. This chapter discusses the additional need for priority action in nine areas: Development of a national prevention strategy. Expansion of treatment linkages with both Federal and State and local criminal justice systems, other State and local community services, and alcohol treatment. Broadening of the program against amphetamine and barbiturate use. Removal of offenders from drug trafficking by improving postarrest prosecution and incarceraiton, and by attacking the fiinancial resources of traffickers. Improvement in intelligence support. Action to strengthen State and local law enforcement. Outlining of an overall framework for evaluating specific international programs. Review of sanctions imposed for possession offense. 18 There is a great likelihood that these individuals are routinely committing tax offenses, since they pay no taxes on their illegal income. Much of this “open agenda" is not entirely new and some of it has been called for explicitly before. These items remain on the open agenda because progress in implementing them has been slow or inadequate, program managers have been unable to mobilize the resources from organization which are outside their control, Congress has failed to act on proposed legislation or simply because they need continuing emphasis. All are important to the success of the Federal strategy. The fact that action on them has been called for before but not achieved should not deter us from renewing our efforts in these critical areas. * REMOVAL OF OFFENDERS FROM DRUG TRAFFICKING It has become all too clear that gathering sufficient evidence to prosecute a trafficker does not guarantee his or her removal from further trafficking. A trafficker may be operating in a foreign country, out of reach of effective U.S. prosecution, trial and sentencing. If they remain in the United States, indictment and arrest do not guarantee immobilization; they merely begin a long criminal justice process during most of which the trafficker is free to continue operating. At the end of this process incarceration may be relatively short." This failure to immobilize traffickers against whom a substantial case has been developed is very costly; in terms of wasted investigative resources and lowered morale, in terms of weakening the deterrent value of the law, and in terms of reduced public trust in the criminal justice system. Consequently, efforts to more effectively immobilize indicated traffickers are vitally important. The open agenda for improving performance in this area is discussed in two parts: Improving post-arrest handling in the criminal justice system. POSTARREST HANDLING BY CRIMINAL JUSTICE SYSTEM Now that Federal law enforcement agencies are demonstrating the ability to shift their focus to high-level violators, we must make significant changes in the way the criminal justice system handles major traffickers after arrest to capitalize on this progress. One necessary step is to enact better laws. The President proposed legislation in his April 27 Special Message on Drug Abuse which, among other things, is aimed at improving our ability to put major traffickers in prison. These proposals are now before the Congress. They should receive bipartisan support and swift passage. Enactment of these proposals will represent a major contribution to the national anti-narcotics effort. Increased attention to the problem of prosecution of major traffickers is also needed. The establishment of Controlled Substances Units (special drug prosecution units) in the United States Attorneys' offices in 19 cities has helped to focus prosecution resources on cases involving major traffickers. But all too often, limited prosecutorial resources have forced these units to be diverted to lower level drug cases, or even to non-drug cases. We understand that this diversion reflects competing needs for the services of experience prosecutors who normally staff these units, but they nonetheless hurt the drug program. We believe that there needs to be greater commitment of experienced attorneys to these uits. Specifically, we recommend that all existing Controlled Substances Units be staffed with experienced prosecutors and further that the United States Attorneys' offices which do not have Controlled Substances Units select one or more experienced prosecutors to work with DEA on major cases. Additional DEA conspiracy units should be developed and DEA should ensure close working relationships between designated agents and prosecutors' offices in all major cities. Training DEA agents in conspiracy techniques, already increased substantially, should be further expanded and U.S. Attorneys should receive regular briefings by DEA personnel on the drug traffic in their geographic areas. Finally, there also is a pressing need to increase the number of United States magistrates and Federal judges. We specifically endorse the recommendations concerning Federal judges and magistrates made by the President in his June 17, 1976 message to the Congress on crime. 7 Nationally. 55 percent of convicted Federal narcotics offenders received sentences of either less than three years of imprisonment, or probation. (FY 1975 data). FINANCIAL RESOURCES OF TRAFFICKERS By focusing on traffickers' fiscal resources the government can reduce the flow of drugs in two ways. First, high-level violators, usually well insulated from narcotics charges, can often be convicted for evading the taxes due on their illicit income. Second, since trafficking organizations require large sums of money to conduct their business, they are vulnerable to actions that reduce their working capital. Thus, the Internal Revenue Service (IRS) has a major-role that it can and must play in drug enforcement. In accordance with the Presidential directive to develop a tax enforcement program aimed at high-level drug traffickers, DEA and the IRS signed a Memorandum of Understanding on July 27 which provides for the sharing of information concerning suspected tax violations by major narcotics violators. Since signing the memorandum, DEA has provided IRS with an initial listing of 375 names of high level violators and meetings have been conducted in the field between DEA and IRS officials. All of this represents a good start: now the IRS must devote sufficient resources to ensure effective enforcement of the tax laws against high-level drug traffickers. If additional resources are necessary, they should be provided. In addition to action by the IRS, there are other measures which can be taken to deprive the trafficker of fiscal resources needed in his trade, or to use financial aspects of his operations to build a criminal case. They include the following: Enact the provisions of the President's proposed drug legislation which would: (1) raise the value of property used to smuggle drugs which can be seized by administrative, as opposed to judicial action (from $2,500 to $10,000), and extend this fortfeiture provision to include cash or other personal property found in the possession of a narcotics violator; and (2) make operative the current provision requiring a report whenever more than $5,000 is being exported. Pursue negotiations to bring about mutual assistance agreements with other countries for increased investigative access to information which could help disrupt the financing of narcotics trafficking. Expand the DEA financial intelligence project, which analyzes financial flow to and from a suspected violator to build a prosecutable case. Expand training in financial intelligence. The sophisticated methods used by high-level traffickers to move money and conceal profits require an equally sophisticated form of investigation. DEA's National Training Institute should work with the IRS to devise training courses for our analysts and agents in financial investigative techniques. B. COMMISSIONER ALEXANDER'S POLICY STATEMENT OF HON. DONALD C. ALEXANDER, COMMISSIONER OF INTERNAL REVENUE, BEFORE THE SUBCOMMITTEE ON COMMERCE, CONSUMER AND MONETARY AFFAIRS OF THE COMMITTEE ON GOVERNMENT OPERATIONS OF THE U.S. HOUSE OF REPRESENTATIVES, OCTOBER 6, 1975 Mr. Chairman and members of the subcommittee, I am pleased to have the opportunity of discussing with you my views regarding the crucially important issue of the Internal Revenue Service's role in law enforcement activities. Although this has been a topic on which I have spoken a number of times, and one in which my views are well known, it is most commendable that the Subcommittee has specifically provided for a hearing on this topic. While the subject has certainly come up in a tangential way in my many appearances on Capitol Hill, primarily through the questioning, it appears to me to be highly appropriate, especially at this time, for the subcommittee to focus on this topic directly. First, I want to make my position completely clear. I strongly support firm and comprehensive enforcement of the laws against tax evasion. Violations of these laws constitute serious crimes and should be so treated. As I have indicated before, sentences in such cases have not been uniform and have not been of sufficient severity. Also, I believe that our Intelligence Division and our special agents do a difficult job well. Most of them are skillful and dedicated people. A few, however, have let their zeal outrun their judgment and this has caused problems for the Service. Well before the current widespread congressional interest in investigative agencies and techniques, the Internal Revenue Service has been involved in the difficult process of reassessing its role in the law enforcement community. As I have noted previously, there has been, over the years, a clear tendency to bestow upon the Internal Revenue Service a wide variety of additional responsibilities, largely in nontax areas. I likened it to a Christmas tree-the IRS, like any good organizational heirarchy looks like a Christmas tree, and because of its reputation as a well managed and organized agency, the Federal planners have had a continuing desire, successfully effected in many cases, to hang a number of ornaments on our organizational tree which don't belong there. Not only does this alteration of the Service's originally contemplated function have a possibly deleterious affect upon sound tax administration, but when one contemplates the vast resources and powers of the Service (in the confidential information supplied to it, and the broad summons and collection authority it has), a significant potential for misuse does exist. As tempting as it may be for others in the Federal governmental community to recruit an agency possessing these powers and these resources, the Internal Revenue Service must always maintain a focused eye upon its central mission-the administration and enforcement of the tax laws. The success of this mission, in our context of a self-assessment system, depends upon the assistance and cooperation of the Nation's citizenry. We cannot be assured of the continuing presence of this essential ingredient unless the public has confidence in tax administration-in its fairness and efficiency and its devotion to its stated and articulated obiectives. I would like to discuss with you this morning some of the things the Internal Revenue Service has done, and is now doing, to ensure that the Service, in the information, it gathers, in the techniques it employs, and in the application of its powers and resources, is involved in matters that relate only to tax administration and enforcement. To some extent the attempt of the Service to limit its activities to those which are related to tax administration and enforcement has prompted a critical response. This criticism, which to a considerable extent fails to fully understand the actions the Service is taking and why it is taking them, |