unlawful the receipt or use of income from "racketeering activity" or its proceeds by a principal in commission of the activity to acquire an interest in or establish an enterprise engaged in interstate commerce, (2) prohibiting the acquisition of any enterprise engaged in interstate commerce through a "pattern" of "racketeering activity," and (3) proscribing the operation of any enterprise engaged in interstate commerce through a "pattern" of "racketeering activity.” "Racketeering activity" is defined in terms of specific State and Federal criminal statutes now characteristically violated by participants in organized crime.3 A fine of $25,000 or imprisonment for not more than 20 years is provided for a violation. In addition, provision is made for the criminal forfeiture of the convicted person's interest in the enterprise engaged in interstate commerce. As in civil anti-trust cases, the district courts are authorized to prevent and restrain by civil process violations of the above standard by, among other things, the issuance of (1) orders of divestment, (2) prohibitions of business activity, and (3) orders of dissolution or reorganization. Provision is made for nationwide venue and service of process, the expedition of actions, civil investigative demands, and the use of court order electronic surveillance and its product. No major opposition to the provisions of this title has developed. Title X-Dangerous Special Offender Sentencing This title provides for increased sentencing (up to 30 years) for dangerous special offenders, defined to include (1) a three-time felony offender who was previously incarcerated, (2) an offender whose felony offense was a part of a pattern of criminal conduct which constituted a substantial source of his income and in which he manifested special skill or expertise, and (3) an offender whose felony offense was in furtherance of a conspiracy with three or more persons to engage in a pattern of criminal conduct in which he would occupy a management level position or employ bribery or force. Application of the special term is predicated upon a charge by the prosecuting attorney and is heard before the court following conviction. Provision is made for assistance of counsel, compulsory process, and cross-examination of witnesses. The substance of presentencing reports must be disclosed, but no limitation may be placed on the evidence the court may consider in imposing such sentence. Review may be had of the sentence by both the Government and the defendant, but the Government must exercise its option to seek review a least 5 days before the expiration of the time for review by the defendant or not at all. Abuse of the right of review by the Government is made grounds for dismissal. Title X also codifies the right of a federal court to consider the fullest information in determining an appropriate sentence, and establishes within the F.B.I. a central repository for admissible conviction records. Senator Kennedy's effort to limit special sentencing under title X to the offenses listed in title IX rested on his argument that the concept of special offender senencing is novel and should receive limited application, confined to organized crime cases. He pointed out that, where certain additional requirements are met, title X could result in a thirty-year sentence for a defendant being convicted, for the first time, of a felonious conspiracy. He argued that the title could be applied to political activists, and offered to accept virtually any list of organized crime offenses which I might propose. I argued, however, that the title drew upon time-honored recidivist laws and model legislation supported by august professional authorities, including the American Law Institute, the Presidents' Crime Commission, and the National Council on Crime and Delinquency none of which have suggested that special offender sentencing be limited in its application to any list of offenses. I also argued that the application of title X is sufficiently restricted by its criteria for special sentencing, such as the requirements that a "pattern" of crimes have been commited or contemplated. Finally, I concluded that any list of offenses would provide loopholes that might benefit only the criminal. Senaor Hart's attempt to impose upon special sentencing proceedings the rules of evidence properly used at trial would not also have substituted "beyond a reasonable doubt” for “preponderance" as the standard of persuasion, but he 2 As now drafted, this definition includes the collection of an unenforceable debt, which, unintentionally, has the effect of severely curtailing lawful gambling in Nevada. In this connection, therefore, Senator Hruska and I have been in contact with Chairman Celler and have urged that clarifying language be added to Title IX. argued that collateral issue as well. On the issue directly raised by his amendment, he emphasized the fact that distinct factual issues are determined in the special sentencing proceeding, and that very long sentences rest on such determinations. I relied upon existing Supreme Court precedents approving the use of information not tested by the rules of evidence in ordinary sentencing and model acts supporting its use in special sentencing, noted that a defendant is proved guilty of a felony beyond a reasonable doubt before the title X proceeding begins, and repeated the Supreme Court's insistence that sentencing courts have access to the fullest information possible. See, e.g., Williams v. New York, 337 U.S. 241 (1949), a major decision that would have been set aside by Senator Hart's amendment. I also agreed with Senator Case's observation that special offender sentencing is a "half-way-house" between trial and sentencing, and noted that title X provides half-way procedures, beyond those that are normal in ordinary sentencing, such as limited cross-examination and appeal.* Senator MCCLELLAN. I also have some other material to go in the record. I begin with this observation, Mr. Chairman: We referred to, and rightly so, constitutional problems and issues that arise in legislation of this character as well as almost all legislation. What I say to you today is that the crime situation in America is so critical and particularly so, I believe, with respect to organized crime, because organized crime supports and promotes unorganized crime: the victims of organized crime, for example, commit crimes in order to support their drug appetites and so forth. This situation is so critical in my judgment that today it is incumbent upon the Congress of the United States to provide every legal tool within the framework of the Constitution that can be made available to our law enforcement officials to combat organized crime. This bill does not contain all of those tools. It does contain some of them that I feel and that the Senate has found are urgently needed. I would like to express to you again my own feelings of urgency concerning this legislation. The social poison for which S. 30 is intended to be an effective antidote has already crippled or weakened vital organs and centers of our body politic, and it is still spreading and spreading rapidly. Unless we act effectively, and with dispatch, organized crime may well destroy the social, political, economic, and moral heart of our Nation. Never in the history of America has organized crime had greater adverse impact and widespread control over the social, political, and economic lives of our citizens and institutions than it does today. Never has the national criminal syndicate known as La Cosa Nostra managed with greater success than now to maintain profitable operations in so many areas and in such a variety of illegal interprises. Let me illustrate this problem. One of those enterprises, of course, as we all know, is trade in narcotics. Just last year, skillful implementation by the Federal Bureau of Narcotics of the electronic eavesdropping authority granted to Federal courts in title III of the 1968 Safe Streets Act afforded the public a small glimpse of the deep involvement of the Cosa Nostra leaders in the importation and wholesale distribution of hard narcotics, such as heroin and cocaine. By conducting limited wiretapping under Support for the position reflected in Title X was recently offered by the California Supreme Court In Re Martinez, 6 Cr. L. Reptr. 2361 (1-23-70), where they held that Fourth Amendment exclusionary rules are inapplicable to parole revocation proceedings, since the need there to protect society from crime outweighs the deterrent value of suppression on illegal police conduct. judicial supervision on two Washington, D.C., telephones, law enforcement officers were able to seize large quantities of cocaine and cash and to arrest 41 persons involved in a massive scheme of distribution of hard narcotics. Included among those arrested were two identified members of the Cosa Nostra family of Vito Genovese, a lawyer, a real estate broker, and a Metropolitan Police officer. We must not permit illicit operations such as this, sapping our vital strength as a society, to continue to plague and endanger this Nation. There are ample grounds, moreover, for fearing that the 1970's, like the 1960's, will be a decade of expanding use of dangerous drugs, in both disadvantaged and privileged groups of young people. Among our highest priorities, therefore, must be to prevent further personal tragedies to prevent enslavement of young people to addictive drugs and to eliminate the resulting social tragedy that, each night, causes whole cities virtually to be trapped in their homes by fear of street violence at the hands of drug addicts and others. The desperate plights of the direct and indirect victims of narcotics addiction, must not, however, cause us by contrast to minimize the social harm done by the Mafia's control over its biggest single illegal activity: unlawful gambling. Cosa Nostra informant Joe Valachi, who once ran a numbers racket, paying, as he testified, as I recall, the typical 500 or 600 to 1 odds-I think he admitted that the odds against winning were actually 1,000 to 1-described well the impact. of organized gambling on its direct victims when he said: "It's poor people that play the numbers; and if you want the truth, most of them play because they are desperate for money and they don't have no other way to get it." Badly needed money is all too often drained away from needed food, clothing, shelter, education, and medical care. We must recognize, too, that La Cosa Nostra's control of gambling ravishes the entire society, not merely the gamblers, since the $6 or $7 billion profit organized gambling operators earn each year bankrolls not only the Mafia drug trade, but organized crime's infiltration of legitimate business and other activities, and this is one of the Nation's most serious criminal justice and economic problems. The effect that mob money and methods have on formerly legitimate businesses is well illustrated by the mob takeover of the air freight trucking industry at Kennedy Airport, N.Y., which has recently received much publicity. In that case, organized criminals acquired control both of the unions and of the truckers' trade association, and used those positions in effect to get cuts of the businessmen's profits, the workers wages, and the shippers' freight charges. In addition, the mob members took advantage of their opportunity to steal goods shipped by air freight. And annual thefts jumped 100-fold in 5 years, from $45,000 to $4.5 million. While the money often is channeled through those who are addicted to gambling or drugs, it is often channeled through them direct to the Cosa Nostra. Actually, the financial victims or the people who really pay for it are the people who are robbed, the people who are burglarized. They pay it in insurance premiums to the insurance companies. So the poor are not just the victims. Society and our economy as a whole are victims. Of course, we all know that the Mafia can operate successfully on the scale that it does, only because of the connivance and incompetence of key law enforcement personnel. Again, we have recent illustrations of the way in which our governments are corrupted in the disclosure by the Justice Department of a conspiracy through which the chief of intelligence of the Columbus, Ohio, Police Department received $40,000 over a 3-year period and some patrolmen received about $250 per month for failing to close a known numbers operation, and the scandalous allegations of pervasive corruption among some New York police officers. The Columbus situation was discussed in a recent exchange of letters between Assistant Attorney General Will Wilson and myself, which I should like, Mr. Chairman, to offer for inclusion in the record in the appendix of my remarks. The CHAIRMAN. Without objection, it is so ordered. (The documents referred to follow :) Hon. JOHN MITCHELL, Attorney General, U.S. Department of Justice, Washington, D.C. JANUARY 7, 1970. DEAR MR. MITCHELL: In the Department's testimony before the Subcommittee on June 3, 1969, in reference to S. 2022, mention was made of several corruption investigations in which the Department expected that although criminal activity could be shown, an insufficient federal nexus was present. It is my understanding that one of these prosecutions, U.S. v. Ryan, which was brought in Columbus, Ohio, has now been completed, and a verdict unfavorable to the government was returned. It would be appreciated if you could inform me of the facts and circumstances surrounding this prosecution. With best regards, I am, JOHN L. MCCLELLAN. DEPARTMENT OF JUSTICE, Washington, February 9, 1970. Hon. JOHN L. MCCLELLAN, Washington, D.C. DEAR SENATOR: This is in response to your letter of January 7, 1970, requesting information on a recent criminal case, United States v. Jerry G. Ryan, Jr., (Cr. No. 9253), brought to trial by the Department of Justice in Columbus, Ohio. The corruption uncovered by our grand jury investigation in Columbus, Ohio, amounted to an organized and sophisticated scheme of long duration in which officers of the Columbus Police Department, including the chiefs of the vice and intelligence bureaus and nearly all sergeants and patrolmen assigned to the vice squad, would solicit, demand and receive money bribes from the five major numbers operators conducting gambling businesses in the Columbus metropolitan area. In exchange for these payoffs, the gamblers were assured of a relaxed enforcement policy of all city and state gambling laws and protection from and warnings of federal investigations designed to uncover federal violations related to these gambling activities. Our proof, offered through the testimony of (1) immunized gamblers who made the payoffs to the police, (2) immunized policemen who received these payoffs and disseminated them to the eight policemen who were defendants in the trial, and (3) tape recordings of actual payoffs made to certain of the policemen by the gamblers, undeniably established the existence of the payoffs in return for no arrests of these gambling operators. At a minimum, the Chief of Intelligence received $40,000 over a three year period and patrolman on-the-beat received approximately $250 per month. The report of the Senate Committee of the Judiciary on the "Organized Crime Control Act of 1969" (No. 91-617) at page 72 makes reference to a corruption situation existing in a major midwestern city. This reference was in fact to these occurrences in Columbus, Ohio. As noted in your letter, Department of Justice testimony before the Subcommittee on June 3, 1969, indicated an insufficient federal nexus in this corrupt Columbus, Ohio, situation. Further investigation into these matters by the grand jury did finally establish a predicate for charging federal crimes. The evidence by implication and inference (there was no direct evidence on the point) disclosed that the bribed officers of the Columbus Police Department upon learning of an Internal Revenue Service investigation into the Columbus gambling activities, undertook to frustrate and impede this federal investigation. The motives of the corrupt policemen were to protect the sources of their illegal monthly payoffs. Consequently, the police surveilled the Internal Revenue Service agents, arrested two special agents and the Department of Justice attorney in charge of the investigation (who were acquitted of the trumped-up charges), and warned the gamblers of impending federal raids, thereby totally frustrating the federal criminal investigations designed to uncover tax and interstate gambling violations. In order to bring federal charges against these policemen in the absence of federal statutes prohibiting a scheme of bribes as described in this letter, they were charged with violation of 18 United States Code, Section 371 (conspiracy). In essence, the indictment charged these individuals with “conspiring to defraud the United States," to wit: that the protection from and warnings of the federal investigation given to the gamblers impeded and frustrated, e.g. defrauded, the United States. This prosecution was meritorious in light of actions of the police which were affording protection to numbers operations with the annual gross of multi-millions of dollars. The daily intake of one operator, Frank Baldasarro, was believed to exceed $15,000. The trial on these charges consumed six weeks in November and December, 1969, and the jury returned verdicts of acquittal after deliberating four days. In final argument to the jury, the defendants conceded the payoffs but asked the jury to return not guilty verdicts on the grounds no federal violation had been proven. While reports of the jury deliberations reaching our office stressed the inability of the jury to find beyond reasonable doubt the existence of the sophisticated inferential conspiracy to defraud the United States, there was no other federal charge available to the federal grand jury upon learning of the facts of this case. Sincerely, WILL WILSON, Assistant Attorney General. Senator MCCLELLAN. We should be moved to curb this crime and corruption simply by compassion of the victims. That alone would be a sufficient and a worthy motive. We must pity the suffering of narcotics addicts, we must respond to the frustration of the poor who waste their meager earnings on gambling, we must understand the discouragement of honest workers cheated out of their labors by labor corruption, where labor is associated with and becomes under the influence of organized crime, the Cosa Nostra. We must comprehend the helplessness of honest businessmen unable to compete with a wealthy and ruthless cartel of criminal entrepreneurs. The individuals victimized in those various ways cry up to us today for help and humanity compels us to heed them and to respond. But the overriding consideration is that these criminal activities pose a danger which no civilized society can long endure. Citizens become disillusioned by the example of hoodlums and the corrupted officials who operate with impunity. They lose respect for law, for our institutions, and even for our basic values. They lose confidence in our system of justice. Angelo (Gyp) De Carlo, a Cosa Nostra member, put the problem succinctly in a conversation that was overheard in an FBI electronic surveillance recently ordered disclosed by a New Jersey Federal Court. In a conversation, Harold (Kayo) Konigsberg, reputed loan |