SEVERAL UNANSWERED QUESTIONS

The Subcommittee, then, was left with several unanswered questions. in the issue of Peroff's arrest. O'Neill said it was he who decided to have Peroff arrested. O'Neill said he ordered Dos Santos to make the necessary contacts with law authorities in Florida and New York. Dos Santos denied he did this. Secret Service Agent Peter Grant testified he knew nothing about how the arrest was effected. Yet his own memorandum of November 28 said that it was he who told another agent how to locate Peroff, information to be passed on to Florida police.

Moreover, Grant did concede that he called Connelly-but he said. he placed the call because another Secret Service official, Harris J. Martin, told him to. But Martin denied he told Grant to call anybody or do anything in connection with the Peroff warrants.

Complicating the matter even more was a conflict on the question of when John J. O'Neill learned for the first time of the existence of the warrants. O'Neill said he had no knowledge of them until July 18, 1973. But Dos Santos said O'Neill already knew about the warrants by July 18.

Chief Counsel Howard Feldmen asked Dos Santos:

After you talked with Agent Grant, did you discuss these outstanding warrants with O'Neill?

Dos Santos replied:

I think O'Neill had been made aware in advance that there were outstanding warrants (p. 290). [Emphasis added.]

When Philip Manuel asked O'Neill about Dos Santos' observation O'Neill said:

His [Dos Santos'] recollection is different from mine. My recollection is that the first time I found out about those warrants was when Mr. Valentine told me or Peter Grant told me (p. 593).

There was even confusion as to why O'Neill had Peroff arrested. First, O'Neill said it was because Peroff was a fugitive from justice. Then, O'Neill added another dimension to the decision, as he testified:

There was two parts to it. The first part is that he is a fugitive, that I am a law enforcement officer, and that if I know that a man is a fugitive and there aren't mitigating circumstances that he should be arrested. That was number one. The second reason is that when Peroff is in jail he has now lost a lot of his bargaining position and then we can talk to him again (p. 585).

Manuel asked O'Neill if by these remarks he meant to say that by having Peroff arrested it was hoped he would be more cooperative with DEA. "That is another part of it, yes, sir," O'Neill said (pp. 585,

43-085-75-10

BACKGROUND TO PEROFF'S ARREST STILL A MYSTERY

The Subcommittee failed to establish the precise details in the chain of events resulting in Frank Peroff's arrest. Many of these details remain a mystery.

But to DEA Administrator John R. Bartels, Jr., the explanation was simple. He told Senators:

On July 22, our New York office learned of Peroff's arrest by the New York Police which apparently resulted from an exchange of information between the Secret Service and Florida law officials (pp. 465,466).

Bartels explanation was correct as far as it went. But there was much more to Peroff's arrest than the "exchange of information" between Secret Service agents and Florida police. There was, for example, the fact that a DEA Group Supervisor, John J. O'Neill, believed himself responsible for setting in motion the machinery to have Peroff arrested.

Moreover, O'Neill testified that in giving the order to have Peroff arrested he did not think he was sacrificing any future use of Peroff as an informant.

Putting Peroff in jail was "worth doing," O'Neill said, because it would enable DEA agents to talk to him, to try to persuade him to be more cooperative, and, if it was then decided to use him as an informant again, "we could have made an approach to the authorities to have him work again." O'Neill explained:

I would presume when he was working for Customs that they had informed the Florida authorities that they were using a man that was wanted. If they had done it once, we could do it a second time (p. 586).

So, on that logic, O'Neill went ahead and had Peroff jailed. But O'Neill said he ordered Richard Dos Santos, his subordinate at the time of Peroff's arrest, to initiate the action leading to Peroff's imprisonment. O'Neill said he thought Dos Santos had followed those orders. When advised that Dos Santos denied initiating such action, O'Neill offered no explanation as to how the incarceration process for Peroff was begun.

Richard Dos Santos testified that, while he did not have anything to do with Peroff's arrest, he did nothing to stop it either. This point was brought out when Senator Huddleston asked Dos Santos about his July 18 phone call with Peter Grant of the Secret Service.

Dos Santos said he told Grant that Peroff was "involved in a particular investigation" but Dos Santos added, "I didn't make any representation to him that if he was arrested it would stop an ongoing investigation." (P. 348.)

Dos Santos said Grant was trying to extract from DEA "our recommendation as to whether this fellow should be arrested." (P. 349.) Dos Santos testified that he didn't say yes to Grant and he didn't say no.

"You just made no comment at all?" Senator Huddleston asked. "That is correct, sir," Dos Santos said (p. 349).

The matter was left up in the air, Dos Santos said, until later on when Dos Santos, or someone else from DEA, was to call back Grant and give approval or not give it to have Peroff arrested. But neither he nor any other DEA employee he knew of ever called Grant, Dos Santos said (p. 349).

Senator Huddleston said:

Yet it is fairly obvious that somebody had to tell the Florida authorities where Mr. Peroff was and where he could be arrested?

"Absolutely, yes. sir." Dos Santos said (pp. 349, 350).

But, adding to the mystery, Secret Service Agent Peter Grant denied he had anything to do with Peroff's arrest. "I didn't even know Mr. Peroff was arrested," Grant said (p. 841).

Dos Santos did not conceal his ill feeling toward Frank Peroff and his attitude that he didn't care whether Peroff went to prison or not. Dos Santos just wanted to be rid of the man. "There comes a point,' Dos Santos said, "when you say to yourself whether it is conscious or subconscious, this guy-we got to get the hell away from this guy... It is like being shell shocked." (P. 350.)

Dos Santos said, by July 18, 1973, he was prepared to let Peroff go to jail because Peroff had "created the conditions" that led to his imprisonment. Peroff had gotten himself into this predicament, Dos Santos said, and he, as his former control agent, was willing to "let the chips fall where they may. Let him do whatever the hell he wanted to do and talk to whoever he wanted to." (Pp. 351–353.)

Returning to the issue of what Dos Santos told-or chose not to tell-Peter Grant, Senator Huddleston said:

I still find it difficult to understand why you could hear a fellow suggest, whether it be a Secret Service man in the White House or not, that your key man in an important investigation might be arrested, or perhaps he asked, "Should he be arrested, or do you plan to have him arrested, or should you tell the authorities where he is so he can be arrested," and you made no reaction at all.

You didn't say, "That is a bad idea," or "a good idea," Is that correct?

"That is correct," Dos Santos replied (p. 353).

Senator Huddleston asked Dos Santos if his response to Grant would have been different if Peroff "was scheduled to leave the next morning for Costa Rica to pick up $300,000" from somebody like Robert Vesco (pp. 353, 354).

Dos Santos replied:

Yes, sir. Well, Senator I think if you are going to be hypothetical, you should also recognize that Mr. Peroff would not have called the White House to complain about government agents or government agencies, so the conditions would not have been there (p. 354).

Senator HUDDLESTON. The deal might have been arranged between the time he made his telephone call to the White

House and the time Mr. Grant called you. Suppose that had
happened.

DOS SANTOS. You are making it very difficult for me to dis-
agree with you, Senator.

Senator HUDDLESTON. You would have to say to Mr. Grant, then, wouldn't you, "We have something big coming tomorrow. Couldn't you at least hold off until the day after tomorrow?""

DOS SANTOS. Yes, sir.

Senator HUDDLESTON. But under the circumstances you didn't see any reason to offer an objection at all?

Dos SANTOS. I backed off from offering a recommendation. Senator HUDDLESTON. I think you said you did not give him any encouragement.

Dos SANTOS. That is correct, sir (p. 354).

GETTING PEROFF OUT OF JAIL

No matter who was or wasn't instrumental in having Peroff put in jail, the fact was that from July 22 to July 25 Peroff was in the Queens County House of Detention. Now federal agents were faced with the problem of getting Peroff out of jail. Again, though, the Subcommittee was confronted with considerable diversity of opinion from federal officials as to why the government decided to effect his release from prison.

Peroff testified that he learned the government would arrange his release from prison on the evening of July 24. That night, Peroff said, Dos Santos and Judy Peroff came to see him after regular visiting hours. Peroff said Dos Santos told him that he would get him out of jail only if Peroff resumed his informant role in the Bouchard inquiry-and if he did exactly what he was told. Peroff testified:

Dos Santos told me he would arrange my release his way, providing I agreed to continue the case exactly as I was told to. He did not want any explanations; he wanted only yes and no answers (p. 86).

The first thing Dos Santos wanted him to do was the one thing Peroff felt he most decidedly should not do-go to Montreal. Peroff said he tried to tell Dos Santos that he was expected in Costa Rica, that he had spoken with someone in the Central American nation July 20 and that final arrangements were being made for his arrival there. But Dos Santos insisted he go to Montreal-or stay in jail. Faced with those choices, Peroff said, he agreed to go to Montreal (pp. 86, 87).

His bail hearing the next day, July 25, was interrupted, Peroff said, when the prosecuting attorney asked the judge for a brief postponement because he had moments before received a call "that was very relevant to this case." (P. 87.)

His court-appointed attorney then informed him that the U.S. Department of Justice had intervened in the case and arranged for his release through a "gimmick bond," Peroff said. Peroff testified that the attorney told him that as soon as he was released from jail he was to meet Richard Dos Santos. Peroff said he was set free and Dos Santos. was waiting for him outside (p. 87).

Peroff said Dos Santos took him to the office of the Queens Deputy Chief District Attorney, Carl M. Bornstein. Bornstein asked Dos Santos if Peroff could be allowed to work for him on an inquiry his office was conducting. Dos Santos told Bornstein that Peroif might take on that assignment later but not now because Peroff "was leaving town right away," Peroff testified (pp. 87, 88).

Back at the Hilton Inn at Kennedy Airport, Peroff was reunited with his family. Dos Santos remained and the two men talked for several hours, Peroff said. It was agreed that Peroff would fly to Montreal July 27. Peroff said he called Conrad Bouchard and told him he was coming (p. 88).

THE BORNSTEIN AFFIDAVIT

On July 25, 1973, the day Frank Peroff was released from jail, Carl M. Bornstein was the Deputy Chief Assistant District Attorney for Queens County, New York. In that capacity, Bornstein arranged for Peroff to be set free.

Bornstein described how he came to arrange for Peroff's freedom in an affidavit given to William B. Gallinaro, Subcommittee Investigator, June 6, 1974.

Bornstein said that in late July of 1973, a DEA agent, Richard Dos Santos, requested a meeting with him. Bornstein said Dos Santos explained that a DEA informant, Frank Peroff, was being held in the Queens County House of Detention. Bornstein said Dos Santos explained that Peroff was working as an informant in "a major investigation of narcotics" and that the DEA was requesting Peroff's release from jail so that Peroff could return to the case.

From Dos Santos and from a review of court records, Bornstein learned that Peroff was being held in connection with a complaint and fugitive warrant issued in Florida. Bornstein said he then agreed to Dos Santos' request. Bornstein said he directed an Assistant District Attorney, Andy Donlevy, to handle the case in court and to arrange for Peroff's release on bail in a $25,000 personal recognizance bond. Bornstein said Peroff signed all the appropriate papers. Then he was set free.

Bornstein said while the necessary paperwork was being processed he and Dos Santos talked about Peroff's value as an informant. The idea was discussed that Peroff might be of use to Queens County prosecutors, Bornstein said, adding that Dos Santos was agreeable to this suggestion. Bornstein said:

Mr. Dos Santos further told me that it would be okay with him if we were to utilize Peroff and talk to him to develop information or evidence provided we did not utilize in such a way that he would have to testify in court. I told him we would appreciate this and I agreed that if he did provide this information we would not put him "up front."

Once he was out of jail, Peroff stayed on in New York for "a few days," Bornstein said. During these few days, Bornstein and Dos Santos talked again about potential uses of Peroff in Queens County police work. Then, Bornstein said, Peroff "left the New York area"