Senator JAVITS. Is there any particular one of these crimes, the classic syndrome of loan-sharking, prostitution, gambling, narcotics, that concentrates in particular areas, like New York? Do you have any particular concentration in one of the major activities of organized crime?

Mr. WEBSTER. I believe we can identify those that are particularly active and vigorous in New York. For many years we used to focus primarily on gambling because of large number of gambling groups there, and some of our organized crime statistics, frankly, were based on some of these smaller bucket shop units that met minimal threshold criteria for organized crime. We are now limiting our interests in smaller gambling units in order to push our resources into the higherups. It is still a factor in the New York area.

Senator JAVITS. On the Freedom of Information Act, which, as I say, is a new thing that is creating some problems, there are exemptions from disclosures for law enforcement investigations and respecting the names of informants. Given these exemptions, what else about the law-the purpose of this hearing is also to decide on changes in the law-what else is giving you problems?

Mr. WEBSTER. We have found that the exemptions are not sufficiently clear to permit us to excise on a word-by-word basis with sufficient certainty so that we can satisfy the perception in the minds of the public, including informants, that we are, in fact, protecting confidential information.

The law provides that we can withhold or exempt information which will identify an informant. If the statement in the report or document refers to a green sedan, our people working in our Freedom of Information section cannot know with certainty that it would affect or would identify the informant. The green sedan may well stay in or not be excised in the report.

One suggestion I made was a very simple one and that was simply modify the language of Exemption 7. If the standard was whether it would tend to identify the informant, that would give us a little more discretion in the first instance. Once it goes out, there is no way of recapturing it, but the same appeal procedures, the same administrative appeals, the same court procedures to see if we are overreaching the exercise of our discretion would still be there.

In the most sensitive areas, such as terrorism, organized crime, and foreign counterintelligence, we have asked for an alternative, an absolute ability to withhold those documents in order that we might be sure and those who supply information to us might have confidence that we can protect them.

Senator JAVITS. And that is your recommendation for change?
Mr. WEBSTER. Yes, it is.

Senator JAVITS. Any other?

Mr. WEBSTER. Well, we have about seven, but those impact most heavily upon the organized crime area. Others have to do with permitting us to respond to the large wholesale requests for thousands of documents on a separate track than those who simply want their own file.

Senator JAVITS. Have these been submitted?
Mr. WEBSTER. Yes, they have.

Senator JAVITS. To whom?

Mr. WEBSTER. They have been submitted to the chairmen of the various oversight committees and individuals who asked for them in the past.

Senator JAVITS. Including this committee?

Chairman NUNN. We have had testimony on this on many occasions. I am not sure it has been submitted formally. If it is not, I would like to get it for the record.

Mr. WEBSTER. I would be happy to supply it.

[The information furnished appears in the appendix beginning at page 235.]

Senator JAVITS. The other thing I would like to ask you, there is sort of a tradition in the United States about these organized crime groups. The word "Mafia“ is used so loosely. Has anything else surfaced, some new groups, some more modern connotation as to where this field extends?

Chairman NUNN. Senator Javits, that is a subject we are going to go into in a good bit of detail tomorrow. I would like to be able to put it in its proper context with a series of questions. If you could defer on that?

Senator JAVITS. Sure.

Chairman NUNN. I think it is an extremely important question and ought to be put in perspective.

Senator JAVITS. No further questions.

Chairman NUNN. Thank you very much. Senator Sasser?

Senator SASSER. Thank you, Mr. Chairman. Mr. Director, in your opening statement, you mentioned that some 1300 special agent-years are being devoted to fight organized crime. My question to you is what percentage of the FBI's work capacity does this figure represent?

Mr. WEBSTER. It represents about 22 percent of our total field

resources.

Senator SASSER. Do you give as much priority toward organized crime as you do-I think you mentioned three priorities the FBI is presently concentrating on. One is organized crime, the other is white-collar crime, lastly, counterintelligence. Do you give any more priority to organized crime than you do white-collar crime?

Mr. WEBSTER. The counterintelligence figures are classified, but we presently have about 23 percent of our field resources in whitecollar crime.

Senator SASSER. You also mentioned in your opening statement that organized crime has an adverse impact on the national economy, that the activities of organized crime itself can be and are, I think, in some instances highly inflationary. Can you give us some estimate of the magnitude of organized crime on the national economy? What is the fiscal impact of organized crime on the economy? Does it affect the economy?

Mr. WEBSTER. Well, there have been many, many estimates. I do not know that we have one that we have any particular confidence in. It is in the billions annually. I will attempt to supplement this with whatever records are available. I don't have a great deal of confidence except that I do know it is large and I do know that it is in the billions. If you, in the aggregate, measure the kinds of extortion it practices.

the result in inflated prices, if we measure the loss to the economy of tax-free activities, cigarette smuggling, for instance, all the monies that are coming into this country without benefit of any type of regulation and in crime, the cost of crime that is generated by those who are addicted to narcotics and are engaging in street crimes to further their interests, all those factors would produce a staggering figure of total impact on our national economy.

Senator SASSER. Mr. Director, you indicated that there was in the Southeastern United States a highly organized and sophisticated narcotics cartel. I have not heretofore thought that organized crime operates to any great extent in the Southeastern United States. Can you localize the areas in which organized crime is operating with these sophisticated narcotics cartels and why are they operating in that particular area?

Mr. WEBSTER. I can. I would prefer to defer to some of our experts who will be testifying in more specific detail, but I can give you two or three principal reasons. One, which is a lesser reason, is that there are more and more organized crime figures who are spending more and more time in the Southeast. The other reason, which is probably the main reason, is that this has become the landing point of entry for major narcotics sources, particularly coming in from Colombia. Banks are being used in the Southeast to launder the money that is flowing from other parts of the country to pay for these narcotics. Senator SASSER. Thank you.

Chairman NUNN. We will be getting into that question in considerable detail tomorrow and in subsequent hearings.

Senator SASSER. I would like to pursue that subject in some detail. Mr. Chairman. With that prospect, I will foreclose further questioning of the Director.

Chairman NUNN. Senator Cohen.

Senator COHEN. Thank you, Mr. Chairman.

Mr. Director, the chairman asked you if you thought it would be valuable if we were to investigate the types of vulnerabilities that either businesses or unions have that make them prey to organized crime. The question that I would have is do you have any evidence that lead you to believe that certain unions have organized local law enforcement officials of departments or police departments so that there is, in fact, a direct or indirect degree of control, by organized crime through the various unions, over law enforcement.

Mr. WEBSTER. I am not sure of the route you are taking me, Senator, but I think we are in agreement.

Senator COHEN. Let me go back. You indicated that organized crime may, in fact, have infiltrated certain labor unions.

The next question I have is, have certain labor unions infiltrated local law enforcement officials of departments or local police departments to the extent certain unions might, in fact, be said to exercise either direct or indirect control over law enforcement policy or conduct? Is such conduct, in fact, being controlled by the organized crime? That is a matter which is of some concern in my own State.

Mr. WEBSTER. I am trying not to generalize about a very complex condition. I think it would be more fair for me to say with confidence that we do have evidence both of union infiltration and infiltration

of law enforcement or corruption of law enforcement officials by the same organized crime units.

So that in effect, the combination of corrupting control of law enforcement and corrupting influence within unions gives that additional leverage. The reason I am qualifying it is I am not prepared to say the unions themselves have control over local law enforcement, unless you want to say that indirectly through the influence of affiliations and allowances of organized crime makes that exist.

[At this point Senator Percy withdrew from the hearing room.] Senator COHEN. What do you do about that?

Mr. WEBSTER. We investigate and prosecute.

Senator COHEN. How many prosecutions have there been in this field in the last 2 years?

Mr. WEBSTER. Well, the numbers that I gave you in organized crime generally is 600 to 700 convictions. Many of these investigations are now being operated undercover where we were before not trained or in a position to do that as a matter of policy or practice.

We are making very significant progress, and I can think of at least two important investigations currently underway where this is exactly what we are going to be doing.

Senator COHEN. Could you supply for the record then a list of investigations that have been conducted in the past leading to convictions in those areas we just talked about-infiltration by organized crime into unions that in turn control or have an impact upon local law enforcements?

Mr. WEBSTER. I will be glad to undertake that.

[The information supplied by the FBI appears in the appendix on page 388.]

Senator COHEN. Second, with respect to your statement about 600 convictions, I would be happy if you could provide the committee with a list of types of sentences handed out. During our chop shop hearings, we found very few law enforcement personnel devoted to this particular field of crime because the public was treating it as sort of a social problem or disease where the insurance company would pay for the stolen cars. There was very little effort made.

[At this point Senator Percy entered the hearing room.]

Senator COHEN. Also, we found there was a very remote chance of being caught, and even a more remote chance of being convicted. Once one was convicted, a very light sentence was imposed. The rewards were quite great, the money realized and the punishment was minimal in comparison, so the risk was far out weighed.

When you say you obtained 600 convictions this past year, exactly what were the convictions and what were the sentences?

Mr. WEBSTER. I will be glad to supply that for you. I believe with the advent of the more effective use of the RICO statute and reinforcing the use of that statute in the courts, we are seeing more severe penalties being imposed whenever we make use of that statute to go after organized crime.

[Additional material furnished was marked "Exhibit A" for reference and may be found in the files of the subcommittee.]

Senator CoHEN. That is all I have.

Chairman NUNN. Senator DeConcini, we are delighted to have you with us today. We will be pleased for you to participate.

Senator DECONCINI. Mr. Chairman, I thank you for the time. Realizing I am not a member of the committee, I will be as brief as I can. I thank you, Mr. Chairman and Senator Percy, for the invitation.

I have a couple of general questions for the judge. In your estimate. how successful has the effort been on the Federal level of reducing organized crime influence in the United States?

Mr. WEBSTER. I think that this has been one of the most difficult areas and probably one in which successes have not been spectacular in the sense that our real objective in organized crime is to reach the top.

That has been difficult because of buffering and insulation that protects the top figures. Early on, there was a problem of actually identifying the top figures. So that if you were to ask me over the last decade how successful we have been, I would say not as successful as the FBI would have liked to have been.

You are asking where do we think we are going at the present time, I think the curve is going up because we have been more successful in identifying our targets, and we are using techniques that were not used successfully or at all in the past. We have demonstrated the validity, the effectiveness of undercover work, for instance.

We now have enhanced our ability to analyze, which was not really present in the past, through the use of computer technology, the organized crime information system, which is a program we have had on various major investigations which went on line April 15 in Detroit and in a very short while will be in all of the major cities where organized crime is present.

The commitment of resources is there. We moved more of our troops into this field than we have in the past. So the promise is considerably brighter.

Senator DECONCINI. Over the last decade, would you say. generally, the Federal effort had not been very successful?

Mr. WEBSTER. Well, it is a question of relative to what? Organized crime continues, the same family units are still in existence. We have

some new ones now.

Senator DECONCINI. Relative to the growth in organized crime and what you think it is, would you say the effort has not been very successful?

Mr. WEBSTER. The effort on the resources that were available and the know-how probably has not been as productive as all of us would have liked to have seen it, but as I mentioned earlier, we have marshaled our resources now in this direction and we are beginning to see some very real returns coming through. We will see some this year. Senator DECONCINI. Judge Webster, as part of the marshaling of the resources and giving more direction effort toward organized crime. what is the Bureau doing to increase cooperation among Federal law enforcement agencies, and if they are, among local law enforcement agencies?

Mr. WEBSTER. I mentioned earlier that joint cooperation of Aleohol. Tobacco, and Firearms, which was very productive. We have been