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. 734).

Later in his testimony Viviani added:

The reason there was nothing in the Vesco narcotics 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).

But Peroff was not questioned before a grand jury. He was not even interviewed in a grand jury room (p. 737). Instead, Viviani questioned him with two other persons Frank Peroff was not inclined to trust: William Green, an investigator from Customs, and Edwin Stamm, an investigator from DEA.

Viviani said he served Peroff with the grand jury subpoena but did not put him before a grand jury because he did not want Peroff to use this procedure as leverage to force the U.S. Attorney's Office to give him protective custody. Viviani explained to Senators:

Mr. Peroff is a very knowledgeable guy. You know, in the September conversation, I basically laid out what the rules are for getting someone into protective custody.

One of those rules he knew to be a grand jury appearance or testimony before a grand jury. I was not about to put him in a grand jury and have him screaming to me to put him into protective custody. I just didn't need that grief.

If I put him in, he was very persuasive and he is a type of man to wear down and I am not about to be worn down (p. 737).

Subcommittee Chief Counsel Howard Feldman returned to the question of the propriety of serving a subpoena on a person and then, instead of putting him before the grand jury, interrogating him with DEA and Customs personnel standing by. Feldman observed, "It just seems rather unique." (P. 735.)

"It is not," Viviani replied, explaining that the DEA and Customs men-Stamm and Green-constituted a "watchdog committee” formed to observe the activities of federal agents. Sitting in on the Peroff interrogation, Viviani said, was a logical "starting point" for them, an opportunity to hear from Peroff just what his complaints were (pp. 735, 736).

THE TRUE PURPOSE OF THE SUBPOENA

Later in his testimony, Viviani gave more details as to how the November 9 session developed. It seemed that Green of Customs and Stamm of DEA wanted to question Peroff by themselves November 9 and Viviani was willing to let them. That was the purpose of the grand jury subpoena-to enable the DEA and Customs men to interrogate Peroff. Viviani never had any intention of putting Peroff before a grand jury.

But Peroff, who appeared at Viviani's office under grand jury subpoena, didn't know what Viviani, Stamm and Green had in mind. Peroff objected to Stamm and Green questioning him; at least Viviani should be there, Peroff said. As Viviani told Senators, "Mr. Peroff sort of didn't trust anyone." (P. 736.)

This discussion occurred between Subcommittee Investigator Philip Manuel and Assistant U.S. Attorney Arthur Viviani:

MANUEL. Prior to November 9, Mr. Viviani, did the members of the joint DEA-Customs Investigating team, Mr. Stamm and Mr. Green, I believe, request that you assist them in interviewing Mr. Peroff?

VIVIANI. I don't know. I think they wanted to interview. I think he, as I recall now, Mr. Manuel, and, sure, I would have said, "You can use my office and I will be present or I can find you another office and you can interview him yourself."

What happened was when he did arrive on the 9th, I suggested that I get him another office and they could sit down and talk to him.

As I recall, Peroff said no, he wanted me there. He felt more comfortable with me present and they sort of wrangled. They didn't want to interview him under those circumtances, claiming if he has a complaint, they are the investigators.

MANUEL. Prior to getting to that, in response to their request for your assistance in this regard, did you cause a grand jury subpoena to be served on Mr. Peroff.

VIVIANI. Yes, I did. I think he responded on the 9th. I think it was the return date of the grand jury subpoena. Yes. MANUEL. Was the grand jury subpoena served on Mr. Peroff for the purpose of having him available for interview by the DEA and Customs Investigating team?

VIVIANI. Probably by basic way of doing things, before putting somebody into the grand jury, I make sure that I speak to them and get what his testimony will be. I will have agents present, sure.

MANUEL. Why did you decide not to put him in the grand jury?

VIVIANI. Basically, I didn't want this guy claiming that he is now a "protected government witness." I just didn't want to have to brief Mr. Peroff (pp. 747-749).

Subcommittee Chief Counsel Feldman asked U. S. Attorney Curran if he was satisfied with the conclusions reached by Viviani and with the manner in which Viviani's investigation was conducted.

Curran replied:

Yes, sir, as those practices that relate to an allegation like this. We don't get too many. We get some. Yes, sir. Yes (p. 749).

Viviani wrote a memorandum November 12, 1973 in which he related that on November 9, 1973 Frank Peroff gave him two cassettes containing recorded conversations of Peroff talking on two occasions to Conrad Bouchard; and of Peroff talking on one occasion to Harold Audsley. Independent inquiry by the Subcommittee established that Harold Audsley is a known trafficker in stolen and bogus securities. Viviani noted in his memorandum that the tapes were re-recorded twice, one set for Peroff, the second set for Stamm of DEA and Green of Customs. The originals were placed in a safe, Viviani said.

Viviani wrote a memorandum November 13, 1973 on the November 9, 1973 interrogation of Frank Peroff conducted by Viviani, Stamm and Green. In this document, Viviani generally reviewed Peroff's account of his dealings with Conrad Bouchard in his role as an informant.

The November 13 memorandum came to no findings, conclusions or recommendations for further action by the U. S. Attorney, Southern District of New York. In effect, the Viviani memorandum was a recital of the Peroff story, from Peroff's own point of view, from January of 1973 to November 9, 1973.

If Viviani did any further inquiry into the Peroff allegations, he made no reference to it for the Subcommittee's edification-neither in documents submitted to the Subcommittee nor in his testimony at the Subcommittee's hearings.

PEROFF RECALLS VIVIANI INVESTIGATION

In his testimony, Frank Peroff described for Senators the investigation, as he saw it, which was conducted by Assistant U. S. Attorney Arthur Viviani.

Peroff said Queens County District Attorney Mike Armstrong listened to his story and his tapes. Armstrong, Peroff said, proposed two alternative courses of action-first, Peroff could contact Special Prosecutor Archibald Cox; second, Peroff could call on Paul J. Curran, the U. S. Attorney for the Southern District of New York (p. 96).

Armstrong, who knew Curran on a personal basis, thought Peroff should try the Curran alternative and present his case to the U.S. Attorney "on a man-to-man basis.” (P. 96.)

Peroff, agreeing with Armstrong, said it was his understanding that a meeting was set up with Curran, John R. Wing, Carl M. Bornstein and Inspector Richard Condon at which Peroff's allegations was discussed.

For this meeting, Peroff said, he turned over to Bornstein the tapes of his talks with Bouchard when Bouchard talked about Vesco as a backer of the heroin deal (p. 96).

The next day-Peroff did not say when these meetings occurred except that they were after August 1, 1973-Peroff went to the office of Arthur Viviani, an assistant to Paul Curran. Peroff said Viviani asked him about his previous informant work going back to the Paris heroin case in February of 1973 (p. 97).

"He did not seem overly interested" in the Vesco-LeBlanc lead was how Peroff described Viviani's response to the allegation that the two financiers were prepared to sponsor a $300,000 heroin buy (p. 97). In addition, Peroff said, Viviani advised him to obtain the services of an attorney and, for a moment, it appeared the interview would be terminated by the Federal prosecutor unless Peroff got a lawyer (p. 97).

Peroff said that Armstrong had assured him that he could trust Paul Curran's office to entertain, in an objective manner, the possibility that he, Peroff, was right and that DEA had deliberately undercut the Bouchard case. But, Peroff said, Armstrong's assurances were erroneous and Viviani "advised me that he was going to call in the agents involved immediately." (P. 97.)

Peroff testified that he told Viviani that if Viviani called in DEA and other drug agents that "I felt I could be in danger from both sides." (P. 97.)