and, as he understood it, went "to an undisclosed place" with Dos Santos.

Upon their return, Bornstein again met with Dos Santos and again they talked about how to utilize Peroff in local police inquiry.

During one of these discussions-either before Peroff went away or when he returned-the name Robert Vesco came up in the conversation. Bornstein described it this way:

Either during conversations before they left or in conversations that occurred shortly after they returned, the name Vesco was mentioned by Dos Santos. Mr. Dos Santos and I were talking alone and he mentioned the scope and magnitude of the drug investigation and told me in substance that Vesco was involved in it.

O'NEILL TESTIFIES ABOUT PEROFF'S RELEASE

DEA Group Supervisor John J. O'Neill said in the DEA-Customs inquiry that when Peroff was in jail Jady, Frank's wife, called him. She promised Frank would cooperate with DEA in the future and assured him that Peroff's "heart was in the right place," O'Neill said. His response, O'Neill said, was to tell Judy Peroff that it was Frank who had chosen to sever his association with DEA and if there was to be a reconciliation Frank-not DEA-would have to make the first overture.

Possibly moved by Judy Peroff's pleas, O'Neill told Dos Santos to talk to the Queens County District Attorney's office and see what could be done to help Peroff. But, O'Neill said,

. . . I wanted S/A Dos Santos to realize that the Drug Enforcement Administration would take no forceful action on Peroff's behalf. If Peroff was able to get himself out of jail we would be willing to cooperate; we would not go to the District Attorney and make a plea on his behalf, however, we would let the District Attorney know of Peroff's cooperation in the past with Customs and BNDD in Paris and with the Secret Service in Rome and also let the District Attorney know of our interests in other investigations that were pending. I am not sure how forceful S/A Dos Santos was, however, it must have worked because Peroff was again free on the streets and was again cooperating with this office in regards to Bouchard.

O'Neill elaborated on these points in his testimony before the Subcommittee. He said his supervisor, Wayne Valentine, discussed the fact that Peroff was in jail and that Valentine concurred in his decision to have Dos Santos ascertain what could be done to help Peroff (p. 588).

But, for the second time, Valentine was made to seem to "concur" in a major decision in the Bonchard inquiry but by his concurrence he was not truly involved in the decision itself.

The first occasion this uncertainty about Valentine's role in decisionmaking occurred when Valentine himself testified that while he had not himself participated in the decision to jail Peroff he did concur in it (p. 677).

Now it was O'Neill saying the same thing about Valentine's role in getting Peroff out of jail. O'Neill's remarks were contained in this exchange.

MANUEL. Did Mr. Valentine concur with your conelion

in this case as far as getting Mr. Peroff released from jail? O'NEILL. I would say yes.

MANUEL. Did he instruct you to do it?

O'NEILL. No, sir.

MANUEL. Did he instruct you not to do it?

O'NEILL. No, sir (p. 588).

In this instance the matter of Peroff's release from jail-the question of Valentine's concurrence, and what it implied, is academic anyway. Valentine denied he ever discussed with O'Neill, or anybody else, the possibility of effecting Frank Peroff's release from jail. Manuel asked Valentine:

Did you in any way instruct Mr. O'Neill to have Mr. Peroff released from jail once he was arrested?

VALENTINE. No, sir.

MANUEL. Were you aware that a DEA agent was in the process of or did in fact cause Mr. Peroff's release from the Queens County jail?

VALENTINE. No, sir.

MANUEL. You were not aware of that? Should you have been aware of that in your capacity?

VALENTINE. Not normally.

MANUEL. Should any of your superiors have been alerted to that, especially in light of the fact that this man had been calling the White House? To me this is not a normal circumstance when an informant calls the White House. I would think that everybody up and down the line would want to be briefed and aware of what was going on here. I take it from your testimony that that is not the case. Is that correct? VALENTINE. No, it is not correct.

MANUEL. Please explain to me in your own way exactly what happened.

VALENTINE. Without being able to recall the situation itself, I am sure I did brief the superiors once I found out the call was made to the White House. Insofar as getting a person out of jail that would cooperate with the government, the basic decision and recommendation is made by the agent who is developing his portion of the investigation.

In other words, he has intelligence or he has conferred with the individual who is under indictment, incarcerated or pending charges in either the state or federal court.

He evaluates the information in terms of what the charge is against the defendant being held and the potential as far as utilizing him as an informant for DEA.

At that point if he can proceed without the front office in a sense becoming involved he would discuss it with his group supervisor and then proceed.

If it came down to the point that, for instance, the U.S. Attorney would say fine, but we would like documentation, or if you are making a specific recommendation, this has to come in form of writing from a Regional Director.

But up until that level, the Group Supervisor, or supervising agent, has the responsibility and freedom to evaluate the information and determine the situation with a potential informant (pp. 677–679).

The manner in which Peroff was released from jail was also described by Dos Santos under questioning from Manuel. It went like this:

MANUEL. Is is not a fact that when you effected his release from the Queens County jail, you instructed him [Peroff] as a condition of his release that he must be cooperative! Dos SANTOS. That is correct.

MANUEL. Did you do that on your own authority, Mr.
Dos Santos?

DOS SANTOS. I think largely there was very little input from anybody with regard to the conditions of his release. Certainly, if he was to continue, as far as I was concerned, to cooperate with the government services we just couldn't have these wild telephone calls to the White House or to anybody else. We had to do our job. When you call the White House everybody starts to run.

MANUEL. Is that what happened in this case?

DOS SANTOS. How is that?

MANUEL. If someone calls the White House everyone starts to run.

DOS SANTOS. Well, I will tell you. I don't think anybody likes to take any heat. Apparently I felt that very little decision making was being effected by anybody other than myself. That is why I say from what I can recall it seems to me that I largely took it upon myself to effect his release (pp. 437,438). O'Neill, on the other hand, remembered himself being right in the middle of the decision-making regarding Peroff's release from jail. O'Neill told Senators:

I instructed Dos Santos to go to the Queens House of Detention to talk to Peroff to see if he did want to cooperate again. I also, it is my recollection, asked him to find out what Peroff was interested in, would he go to Canada. We did not make any decision to send Peroff to Canada until we had checked to the Canadians to see if they wanted him to come to Canada. The first part of the thing was to find out would. he go to Canada. The second part was after we found out would he go then would the Canadians want him. Once we found out that the Canadians did want him, we asked him if he would go. He said yes. So on July 27 or 27th he went to Montreal.

The second part of whose decision was it to go to Canada? It was a decision that the Canadians made with our talking to them about it (p. 611).

PEROFF WARRANTS WERE NOT VALID

The Subcommittee staff examined the procedures followed in issuing the two warrants that led to the arrest of Frank Peroff. The staff found that the warrants were not valid and should not have been drawn up in the first place. In addition, the warrant against Mrs. Peroff was also found to be invalid.

The Florida Department of Law Enforcement (FDLE), a state agency, has since rescinded all three warrants and the Peroffs are free of any warrants in Florida.

The two warrants against Peroff were in connection with two worthless checks he was alleged to have written in March of 1972. Subcommittee inquiry established that the worthless check allegations stemmed from a civil suit in which Peroff and two other businessmen were contesting the interpretation of a contract. In disputing the terms of the contract, Peroff stopped payment on one check and, on the other, provided for insufficient funds in his bank account the note was drawn on.

Neither of the two businessmen involved in the dispute with Peroff signed complaints against him in connection with the two checks. The disagreement was subject to civil litigation and as late as February of 1974 was not resolved.

The decision to issue the warrants, then, was made by agents of the Florida Department of Law Enforcement on their own initiative and was not based on any alleged criminal violation by Peroff. What, in effect, occurred was that agents of a state police agency, on their own initiative and in the absence of a formal complaint, alleged criminal behavior when, in fact, the matter was a contractural dispute subject to civil arbitration.

Regarding Mrs. Peroff, Subcommittee staff interviewed William Austin, a builder in Orlando and the person who alleged to authorities that Mrs. Peroff stole draperies from the home the Peroffs were renting from him.

In an affidavit given to Subcommittee Investigators William Gibney and William Gallinaro, Austin said he had falsely charged Mrs. Peroff with the theft of the draperies and that he had done so because he was under pressure from the Florida Department of Law Enforce

ment to take such action.

The Subcommittee staff found that all three warrants against the Peroff's were associated with an investigation by the FDLE of Frank Peroff to identify him as a figure in organized crime in 1972.

The Subcommittee staff also found in its investigation of the validity of the Peroff warrants that no federal agency ever checked with the Florida Department of Law Enforcement to determine the facts behind the issuance of the warrants or to determine what facts were available on Peroff and his activities prior to April of 1972.

In fact, the staff investigation into these matters revealed that the Florida Department of Law Enforcement did possess a substantial amount of information on Peroff, his associates and activities, which would have been beneficial to federal authorities who subsequently dealt with Frank Peroff.