help us determine if something is of very little or no value, they can go through a quick sale provision, and allow for a quick disposition, so that we would not be storing worthless property.

Mr. FEIGHAN. Now you indicated that the 4-year contract is renewable each year.

Mr. BURROUGHS. That's correct.

Mr. FEIGHAN. At the option of the Customs Service.

Mr. BURROUGHS. That is correct.

Mr. FEIGHAN. And is the first year of the contract the 1986 fiscal year.

Mr. BURROUGHS. Yes, that is correct. There was going to be a startup period in 1985, but it took so long to go through the proposal process that the contract was actually awarded just prior to the end of fiscal year 1985, so indeed you are right-1986 will be the first year, and in fact they will not be operational until January 1986.

It takes that long to set up these procedures, to set up the storage mechanisms, and the subcontracts to have all of this in place. Mr. FEIGHAN. So they really have not disposed of any property yet under the terms of the contract?

Mr. BURROUGHS. That is correct.

Mr. FEIGHAN. And the contract is funded from what source? Are the forfeiture funds the funding mechanism for the contract?

Mr. BURROUGHS. That is correct. Initially, because they will be incurring costs prior to selling anything. They will not have any proceeds with which to balance off their costs, so, yes, the forfeiture fund initially will be providing the income for them to operate. Mr. FEIGHAN. And then you would anticipate each year a net profit of some sort?

Mr. BURROUGHS. Yes, indeed.

Mr. FEIGHAN. Have you projected what that might be for each year of the contract?

Mr. BURROUGHS. I have heard figures up to $50 million, but I would

Mr. FEIGHAN. That would be for the life of the contract. Mr. BURROUGHS. Not necessarily. We anticipate-just, again, a rough value, I would not like to put my name

Mr. FEIGHAN. I understand.

Mr. BURROUGHS. $750 million is the value that was guessed at, as to the value of the seizures we made, $750 million.

Mr. FEIGHAN. Thank you very much.

Commissioner, I know that you have invested recently in your regions, $3 million in radar and other communications equipment. That has all been funded out of the forfeiture fund; is that correct? Mr. KWAS. Yes, sir.

Mr. FEIGHAN. And is that equipment that has been installed operational?

Mr. KWAS. That will be all installed during fiscal year 1986. It has all been procured as a result of fiscal year 1985 forfeiture fund. Mr. FEIGHAN. And where would most of that equipment be used? What would be the installation points for most of that?

Mr. Kwas. Much would be on our own vessels that we have here in south Florida.

Mr. FEIGHAN. And I assume then it would be investments restricted to this region.

Mr. KWAS. No; there is forfeiture fund money being used on a nationwide basis, but I would think that most of it has been brought back into this region overall, because of the equipment that we do have down here.

Mr. FEIGHAN. And what is your expectation of that investment? What added capability will that give you?

Mr. Kwas. Well, we will certainly be able to outfit our vessels much quicker and much more efficiently than we have in the future without going through procurement trying to get appropriated funds, in a sense, in the budget procurement.

Mr. FEIGHAN. But in terms of I mean operational advantage? Mr. KWAS. Oh, it will provide a much greater and quicker presence out on the east and west coasts of Florida.

Mr. FEIGHAN. Thank you very much. Thank you, Mr. Chairman. Mr. HUGHES. The gentleman from Florida.

Mr. SHAW. I don't have any further questions, but it occurred to me when my friend Larry Smith was applauding you for the efforts that you have made that you have done a wonderful job in your designated task. I think we have made it very clear that the fact that we do take issue with you on this one area, is in no way to be interpreted as a condemnation of your intended purpose. You are doing a real fine job. We are very proud of you and I wanted you to know that.

Mr. HUGHES. Thank you very much.

I have no further questions except to say that I quite agree, but unfortunately when you have the kind of neglect that we have seen in these instances, it reflects very poorly upon the services. It does injure the reputation of the Customs Service, which has always enjoyed a very fine reputation. We look forward to your submission in 2 weeks, Commissioner.

Also, we would like to know a little more about the procedures that you have put in place. Many of us use the tickler system to make sure things don't fall through the cracks, and obviously you had some very serious procedural problems. I would like to know a little more about what kind of a system you have set up to deal with the various assets and the various categories, to make sure that I assume you have guidelines at this point as to when administrative forfeitures take place, within what timeframe, and when an auction is to take place. If you could share that with us we would appreciate that also in 2 weeks.

The procedures you set up deal with some of the problems you have had with your procedures.

Mr. KWAS. Yes.

Mr. HUGHES. Thank you very much.

Mr. KWAS. Thank you.

Mr. HUGHES. Oh, one more question. I did have a question. Have you run into a problem with titling vessels insofar as their certificate of origin and determining whether or not they are vessels that can be used after sale on the coastwise trade or what use the vessels can be put to?

Mr. FRIEDLAND. We certainly have. The Coast Guard documents these vessels and the Coast Guard regulations provide only tradi

tionally forfeited vessels will receive documentation. Now, in fact if it goes through judicial forfeiture, they would document it and you don't have a Jones Act problem, as you alluded to, but the regulations as they are presently written do not permit that and it is a problem, you are right. It is reducing the value at auction because we can't promise good title.

Mr. HUGHES. On administrative forfeiture?

Mr. FRIEDLAND. Yes.

Mr. HUGHES. If you could share with us some of the specific problems that you have had with particular vessels so we can get a flavor of the kinds of problems, and I ask that question because I anticipated that there would be problems. I wasn't aware of any specific problem areas, but I can see where we would have problems with the law as it is presently constructed. If you could share that with us, your thoughts, we would appreciate it, because we have got a number of other areas to deal with. There obviously is a need for some changes in existing law. We have dealt with some of the blind spots today, and so it may be that that is something that we ought to look at at the same time and try to correct it. Thank you very much.

Mr. Kwas. Thank you, Mr. Chairman.

Mr. HUGHES. Our third panel consists of James Russ, Albert Krieger and Neal Sonnett. Mr. Russ is testifying on behalf of the American Bar Association. He graduated from Marquette University with a A.B and Georgetown University, where he received a doctor of laws degree. He practices law in Orlando, FL, and has been very active in the American Bar Association, the Florida Bar Association and various other legal associations.

Mr. Krieger and Mr. Sonnett are testifying for the National Association of Criminal Defense Lawyers. Mr. Krieger has a bachelor of arts degree and a doctor of laws degree from New York University and is active in the private practice of law in Miami and a former president of the National Association of Criminal Defense Lawyers.

Mr. Sonnett is third vice president of the National Association of Criminal Defense lawyers of Miami, FL. He is a former assistant U.S. attorney in the southern district of Florida, and chief of their Criminal Division. He is president of the Metropolitan Bar Leaders Caucus of the American Bar Association, and former president of Dade County Bar Association.

Mr. HUGHES. All the panel members have very distinguished records in the practice of law, and we are delighted to have you with us today. We have your statements, which will be made a part of the record in full. We have read your statements, in fact. If you could summarize, we would be greatly indebted to you. Why don't we begin with you first, Mr. Russ.

STATEMENTS OF JAMES RUSS, ORLANDO, FL, ON BEHALF OF THE AMERICAN BAR ASSOCIATION; ALBERT J. KRIEGER AND NEAL SONNETT, MIAMI, FL, ON BEHALF OF THE NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS

Mr. Russ. Thank you, Chairman Hughes. As you have indicated, my name is James Russ. I am a criminal defense lawyer. I practice

in Orlando, FL. I would like to answer your question that you raised initially-what is wrong with the 1984 legislation as it applies to the forfeiture of attorney's fees? As you see from the ABA's resolution of last summer, what is wrong with it is that the U.S. Justice Department has interpreted it to mean that they have the authority to go out and caused the forfeiture of attorneys' fees, and to seek forfeiture of money attorneys legitimately receive for litigation costs. These forfeiture actions are not in a situation where the attorney is involved in crime or is acting as a banker or a sham or a fraud for his client to launder, to hide the proceeds of crime. These are forfeiture actions directed against legitimately earned fees, and legitimately received moneys that the lawyer uses to prepare for the litigation.

Now the question is, why is it wrong? In a few minutes-I assume I only have a few minutes-I would like to tell you at least three reasons why it is wrong. First of all, it is wrong because it impacts drastically upon the sixth amendment right to counsel. There is no privately retained lawyer in this country who is raising children and making mortgage payments who can commit himself to undertake an extended and complicated criminal cases in a Federal court, knowing that he cannot get out once he has made the commitment and expect to stay in business, if he anticipates his fees and his out-of-pocket costs are either going to be forfeited or he is going to be additionally going to be personally served subpoenas before the trial, during the trial, where he may be called upon to testify against his client, and after the trial and where he has to go back and defend against a forfeiture action in order to receive the fees and costs that have been paid to him.

Consequently, the threat that attorneys will have to defend against fee for forfeiture actions and other prosecution tatics such as issueing subpoena is going to bring about the eradication of the private defense bar as we now know it. Such tatics are impacting upon the client's right to have counsel of his choice, a right that the courts say is near absolute. The Government responds that no harm is due to the defendant because he will now be considered to be legally indigent. Therefore, a lawyer will be appointed for him or a public defender will be appointed to represent him. This reasoning raises the second reason as to why it is constitutionally wrong, as suggested by the interpretation. It is wrong because it impacts upon the fifth amendment guarantees to due process and equal protection under the law.

A criminal trial, is a fight. It is an adversarial experience. It has to be fundamentally fair. This is what the Constitution requires. This is what the courts say. It is not fair and it is not equally balanced, when the whole segment of the defense bar who are experienced, who are trained, who are educated, are now removed from the system, and replaced by the young, by the inexperienced and those who are learning.

The sixth amendment requires something more than simply a warm body possessing a bar admission card appear before the court of justice on behalf of a defendant. This brings me to my third and last point as to why it is wrong.

It is wrong as a matter of public policy. It is wrong as to the way we, as a nation, perceive our criminal justice system. We are not

talking about boats or airplanes or cars. We are not talking about a balance sheet, or whether we are making money or losing money. We are talking about the fundamental concept of liberty and the fundamental concept of justice. It is wrong when criminal defense attorneys are being run out of the criminal justice system. It is wrong when people who have the financial ability to pay for legitimate legal services must risk that the money they would otherwise use to pay for criminal defense services is all going to end up in the Government's pocket. It is wrong when any aspect of the criminal defense system is controlled by the Justice Department or there is any control by the government as to which lawyer is going to get in the case, which lawyer is going to stay in the case.

It is for all these reasons that Congress needs to make changes to clarify the Federal forfeiture law. You can make it right by simply amending the Comprehensive Crime Control Act passed in October 1984. The amendments should exempt legitimate attorneys' fees, and exempt legitimate attorneys' litigation costs, from the forfeiture provisions of this law.

Thank you.

Mr. HUGHES. Thank you very much. [The statement of Mr. Russ follows:]

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