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co's name to him in July of 1973 to indicate what an important investigation Peroff was being utilized in.

Bornstein said Richard Condon, then the Commanding Officer of the Queens District Attorney's Office Squad, was also present while Peroff described, from his own point of view, how federal agents had undercut a potentially explosive investigation.

At one meeting of the three men, Peroff played cassettes of conversations he had held with Conrad Bouchard. Hearing these tapes, Bornstein said, led Condon and him to bring Peroff and his allegations to the attention of the then Queens District Attorney, Mike Armstrong.

ARMSTRONG'S RECOMMENDATIONS

It was September of 1973 when Peroff told his story and played his tapes for Armstrong. Bornstein said Armstrong told Peroff the Queens County District Attorney's Office "had the most limited possible kind of jurisdiction in that the phone calls were made from Queens ..." Armstrong did not think the Queens District Attorney's Office should take up the Peroff allegations. Bornstein and Aimstrong recommended to Peroff that he take his story to the Office of the U.S. Attorney for the Southern District of New York.

This recommendation was made to Peroff, Bornstein said, because that office “already had an indictment outstanding against Vesco and because Peroff told us previously that he had some brief contact with John Wing:" Wing was the Federal prosecutor in the government case against Robert Vesco, John Mitchell and Maurice Stans.

Bornstein made the point that in having Peroff take his story to Federal authorities he, Armstrong and Condon were not expressing a judgment on Perofi's conclusion that the Bouchard heroin inquiry failed because Federal agents wanted it to fail—and they wanted it to fail to protect Robert Vesco.

Bornstein said he, Armstrong and Condon made a "concerted effort" to “keep our own opinion out of it.” Bornstein said the Queens County prosecutors encountered Peroff's allegations "on a professional footing" by treating his story as being accurate as to the facts only "but without giving weight or credence to the conclusion” Peroff drew. Bornstein added:

We believed the events that he narrated but we did not believe the investigation's end was a result of it having been

deliberately quashed. We did not feel we were in that position. Bornstein said that the Queens County District Attorney's Office had neither the enforcement powers nor the jurisdiction to pursue an inquiry of this consequence. The U.S. Attorney's Office, Southern District of New York, with its Federal mandate and its existing case on Vesco, was the more appropriate place for the Peroff allegations to be presented. So, for the second time, an effort was made to try to interest John R. Wing and others in the U.S. Attorney's Office in Peroff's allegations. But this time, instead of Peroff trying to get Wing's attention, the Queens District Attorney's office made the attempt.

Bornstein said Peroff turned over his taped conversations with Bouchard to Queens County prosecutors September 26, 1973. These were the tapes in which Bouchard asserted that Vesco and Le Blanc would finance the heroin buy. Bornstein said he and Inspector Condon took Peroff's tapes to the U.S. Attorney's Office that afternoon. There they met with Paul J. Curran, the U.S. Attorney for the Southern District of New York, and two Curran assistants, Arthur Viviani and Walter Phillips. Bornstein said he could not be certain but he thought Assistant U.S. Attorney John R. Wing also attended the September 26 meeting. Peroff was not invited to this meeting.

PEROFF TAPES ARE NOT PLAYED AT MEETING

The meeting lasted about an hour and a half, Bornstein said, and issues such as legal jurisdiction were discussed and "one of Curran's assistants” indicated he knew who Conrad Bouchard was.

Bornstein said he and Condon told the Federal prosecutors “everything that had been told to us by Peroff.” Bornstein said he brought along the Peroff tapes and "a small machine" on which to play them. But Curran and his assistants said they would rather listen to the tapes some other time. Bornstein said in his aflidavit:

The meeting ended with Mr. Curran and his staff thanking us for bringing this to their attention and with the clear understanding that they would be in touch with Mr. Peroff and me to set up a meeting between Peroff and members of the United States Attorney's Office and that they would listen to the tapes at that time. About a week after the September 26 meeting Bornstein received a telephone call from either Walter Phillips or Arthur Viviani; he could not remember which. Bornstein said he was informed that the Federal prosecutors had either "eventually set up a meeting with Peroff or that they were having "some problem getting in touch with Peroff.” Bornstein could not remember which he was told.

That phone call-coming to him sometime in early October of 1973was the last time he heard from Federal prosecutors in connection with Peroff while he was working for Queens County, New York, Bornstein said. In January of 1974, Bornstein quit the Queens County post and on March 11, 1974 he went to work for the U.S. Department of Justice as a Special Attorney in the Organized Crime and Racketeering Section.

BORNSTEIN'S SUBCOMMITTEE INTERVIEW

Bornstein noted, in swearing to this statement for the Subcommittee, that he was authorized to provide information to the Subcommittee by his superiors, William S. Lynch, Chief of the Organized Crime and Racketeering Section of Justice, and Henry E. Petersen, Assistant Attorney General in charge of the Criminal Division of the Justice Department.

At the session when Subcommittee Investigator William Gallinaro interviewed Bornstein, also present was William I. Aronwald, As

sistant Attorney in Charge, Joint Strike Force, Southern District of New York. Aronwald was present at the request of William S. Lynch.

In addition, Bornstein said in his affidavit that before being interviewed by Gallinaro June 6, 1974 he was directed by Aronwald to talk to Arthur Viviani. Of his talk with Viviani, Bornstein said:

I told him [Viviani] that I would be giving some form of testimony to the [Senate Investigations] Committee. He stated to me and helped me fix the date of September 26, that he recalled the meeting, he remembered my presence and Inspector Condon's presence, but that he did not remember Condon's name, he recalled being there with Mr. Curran and Mr. Phillips, he was not sure that Mr. Wing was there until I mentioned it and then he had some recollection of that. He said he remembered that we had told him of the incident at some length, we had told him about Peroff at some length, that we had the tapes with us, that they were not played then, I don't reinember right now whether he remembered the brief reference to possible venue-I think he did—and his recollection as to the understanding we had when we left the meeting was the same as mine as I indicated before.

CURRAN INITIATES INVESTIGATION

Paul J. Curran, the U.S. Attorney, Southern District of New York, testified before the Subcommittee June 13, 1974. Curran testified that following the September 26 meeting, he designated two areas which he felt should be investigated by his office in connection with the Peroff allegations.

First, Curran said, he wanted to determine if the Robert Vesco lead could be "resurrected" in the Bouchard heroin case (p. 741).

Second, Curran said, he wanted to determine if there was any truth to Peroff's allegation that federal agents had set out to deliberately "cover-up" the Vesco angle (p. 741).

To check out both of these areas of inquiry, Curran assigned Arthur Viviani, an Assistant U.S. Attorney working on narcotics cases.

THE VIVIANI INVESTIGATION

Viviani conducted the inquiry. It began September 27 and ended apparently November 13, 1973.

Viviani's findings were as follows: First, there was no possibility of resurrecting the Vesco lead. And, second, there was no effort by DEA to protect Vesco by sabotaging the heroin case.

Viviani came to both these findings without independent inquiry of his own or of U.S. Attorney's Oflice investigators. To arrive at his first conclusion, Viviani accepted the word of Frank Peroff. To arrive at his second conclusion, Viviani rejected the word of Peroff and accepted the word of DEA and Customs oflicials and agents.

This staff study will now review Arthur Viviani's procedures as he conducted his investigation.

VIVIANI'S FIRST MEETING WITH PEROFF

On September 27, Viviani and Peroff met from 1:30 p.m. to 3:30 p.m., Viviani said. He testified that Peroff spent the first 20 minutes of the meeting asking that he and his family be placed under protective custody.

Viviani refused to grant him protection. Peroff insisted. The discussion became spirited. Viviani explained to Senators:

My attitude was simply that I just don't buy a pig in a poke. If he wants to talk to me, he has to talk to me under my circumstances. It got to the point where I almost told him to get out of my

office (p. 730). Fortunately, for the sake of the investigation which U.S. Attorney Curran had directed, Peroff calmed down and Viviani did not order him out of his office. Viviani said that then Peroff related to him his career as a federal informant.

Paul Curran had posed two areas of inquiry for Viviani to examine. At the September 27 session with Peroff, Viviani was able to dispose of the first area. Peroff assured Viviani that the Vesco lead in the Bouchard heroin inquiry could not be "resurrected." (P. 731.) Viviani testified:

The junk case was dead. Mr. Peroff himself told me that (p. 731). Later in his testimony Viviani added :

The reason there was nothing in the Vesco narcoties deal was simply because as of the time I spoke to Mr. Peroff there was insufficient evidence to even present to a grand jury, number one.

Number two, I asked Mr. Peroff if it could be resurrected.
He said it could not (p. 751).
Senator Huddleston asked:

You relied entirely on his information?
Viviani replied:

He was the one who had the contact with Bouchard. Nothing could be done without him (p. 751). Thus, it was established in the mind of Arthur Viviani, on the basis of what Frank Peroff told him, that the Vesco lead in the heroin case was dead. And one-half of the inquiry called for by Paul Curran was completed.

VIVIANI AND DOS SANTOS CONFER On September 28, the day after he met for two hours with Frank Peroff, Arthur Viviani talked to Richard Dos Santos for about 30 minutes. The purpose of this meeting, Viviani said, was to verify Peroff's account of his informant work.

According to Viviani's testimony, Dos Santos did confirm much of what Peroff said about himself as an informant, except that

Peroff exaggerated by 15 pounds the amount of heroin he helped police capture in Paris the previous February (pp. 731, 732).

Dos Santos had told the Subcommittee that Peroff's hotel rooms and phone calls in Montreal had been bugged by the Royal Canadian Mounted Police. Subcommittee Chief Counsel Howard J. Feldman asked Viviani if Dos Santos had told him about that. “I don't recall that,” Viviani replied (p. 732).

Viviani testified that, according to Dos Santos, Peroff was in a constant feud with the government for money. Viviani told Senators:

I am trying to think. There was a constant squabble for money. I was getting the impression from Dos Santos that he [Peroff] was an informant who could not be controlled (p. 732).

VIVIANI RECOMMENDS DEA INVESTIGATE DEA

Now Viviani felt his investigation narrowed down to one question. “The only outstanding issue then,” Viviani said, "was did somebody purposely kill a case on Vesco?" (P.733.)

From late September through the third or fourth week in October, Viviani said, he considered this question. Meanwhile, he said, Peroff was pressuring him to decide there was a “viable case" to be made in the Vesco cover-up allegation. But, Peroff's pressure did not make a difference, Viviani said, adding that “I kept on putting him off.” (P. 733.)

By his testimony though, Viviani indicated that he did believe the matter was worthy of further investigation, but not by him and the U.S. Attorney's office-but by the Inspection Division of the very agency Peroff was directing his charges of cover-up against, DEA. Here was how Viviani testified on this matter:

Around, I have forgotten when it was, the third or fourth week of October, I telephoned John Fallon, who was DEA Regional Director, and laid out what the allegations were and asked him to pass it on to inspection.

Then I guess the best way to frame it insofar as that agency is concerned, because somewhere down the road, the end of October, apparently the Senate Investigations] Committee had received some word from Peroff. So we sat down and I interviewed Peroff, listened to the tapes, read the files

and read the report of investigation of inspection (p. 734). It was late October, then, when Viviani recommended to John Fallon of DEA that the DEA Inspection Section conduct an inquiry into Peroff's allegation of DEA cover-up. It was also in this period that Viviani received DEA and Customs records and files on Peroff's informant work. “I received them on November 1,” Viviani testified (p. 732).

PEROFF RECEIVES GRAND JURY SUBPOENA Frank Peroff, at Arthur Viviani's direction, was served with a subpoena to appear before a federal grand jury in New York November 9, 1973 (p. 735).

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