ner that, in the end, contributed significantly to the failure of the Bouchard heroin inquiry. And, the staff concludes, Peroff was right when he said Federal agents did not properly investigate the VescoLeBlanc lead.

The Subcommittee staff finds that the allegation that Vesco or LeBlanc were prepared to finance the heroin deal should have been pursued in the most professional manner and the investigation should have been carefully documented as it proceeded. The staff finds instead that some Federal officials and agents conducted themselves in a highly unprofessional manner once the names of Vesco and LeBlanc came into the picture.

The most salient example of unprofessional conduct by drug enforcement personnel was that neither agents working the Bouchard inquiry nor officials supervising the case thought the Vesco-LeBlanc lead to be worthy of being committed to writing. The lack of records regarding this aspect of the case is a blatant violation of DEA rules. DEA's insistence that Peroff fly to Costa Rica in a commercial airplane rather than in a Lear jet is another instance of highly questionable judgment by drug authorities. Peroff without his Lear jet was of no value to Conrad Bouchard.

Ending Peroff's informant relationship with DEA may have been justified. The staff makes no judgment in that regard. But to desert Peroff and his family in the terminal of a major airport and give him no cover story to convey to Bouchard is not a professional way to sever a relationship with an informant. The Government-Customs first, then DEA-got Peroff into the narcotics investigation. Government had some responsibility for extricating him from it.

Having Peroff arrested and jailed shortly after he told the White House of his problems with DEA is another illustration of unprofessional behavior on the part of DEA. Even more questionable is the contradictory and inconsistent way DEA spokesmen testified about why and how it was that Peroff was actually arrested. From the testimony, it is impossible to determine just who made the decision to have Peroff arrested and why.

After Peroff's release from jail, DEA sent him back to Montreal. Again, this was a dubious course of action. Bouchard did not want Peroff in Montreal. Peroff didn't think he should be back in Montreal. The RCMP did not want him around. But DEA made the decision to send Peroff back to Montreal. The result was that Bouchard lost confidence in Peroff and any hope of making the heroin case was lost. The decision by the RCMP to reveal in public Peroff's informant status was an action certain to provoke controversy. Subcommittee inquiry did not extend to the actions of a sovereign nation. However, the staff finds that, as justified as it may have been in the eyes of Canadian authorities, identifying Peroff as an informant did put the lives of Peroff and his family in danger. DEA officials must have thought so, too, because they wasted no time in giving the Peroff's protection.

In addition, Canadian sovereignty precluded the subcommittee from pursuing another aspect of the Peroff controversy. This related to the interview the RCMP conducted with Conrad Bouchard on June 4, 1974. Serving two life terms for his conviction on heroin trafficking, Bouchard reportedly told the Mounties that he had lied to

Peroff about the drug scheme and the involvement of Vesco and LeBlanc in it.

The Mounties informed DEA of Bouchard's admission. And DEA Administrator John R. Bartels, Jr., notified the subcommittee, saying Bouchard's comments supported DEA's long-standing position that Peroff was being used by Canadian criminals and that there never was a big heroin conspiracy. According to this line of thought, Bouchard lied to Peroff to keep him nearby in case he wanted to flee. Canada in Peroff's Lear jet.

The subcommittee staff does not agree with Bartels. The staff finds. it odd that, under the circumstances. Bartels is so willing to accept as truthful the comments of a man who is serving two life terms. Bouchard might well say anything to Canadian authorities in order that they might shorten his sentence.

Moreover, it is unlikely that Bouchard, already in jail for one heroin deal, would volunteer the fact that he was planning a second drug transaction while his trial was going on. A more likely response by Bouchard would be to tell the RCMP that there was no second heroin plan, which is what Bonchard did.

If DEA personnel had documented the Bouchard case properly, they would not have found themselves in the position of seeking corroboration for their assertions from the likes of Conrad Bouchard. The irony of the DEA predicament is seen in the Bartels' position. First. Bartels says Bouchard lied to Peroff because Bouchard said he lied. Next, Bartels says Bouchard told the truth when he said he lied to Peroff. The staff wonders how Bartels is so sure of when Bouchard is telling the truth and when he is not.

The staff finds that the next illustration of unprofessional conduct by drug agents can be found in the joint DEA-Customs inquiry into the Peroff matter. As this staff study amply indicates, the joint inquiry is inconsistent and incomplete. Vital questions are not asked; key issues are not addressed.

A typical example of the failure of the joint inquiry can be seen in the inquiry's conclusion that federal personnel were not deficient in their work with Peroff on the Bouchard heroin case and that if anyone was guilty of not doing what he was expected to do it was Peroff himself for refusing to fly to Costa Rica. To arrive at such a conclusion about so complex an issue as the Costa Rica trip exhibits a lack of understanding of the facts or a determination to exonerate all federal agents of wrongdoing no matter what.

It is the subcommittee staff's major finding, therefore, that because of the unprofessional conduct of DEA personnel, drug enforcement authorities were precluded from going forward with the pursuit of the Vesco-LeBlanc lead. In addition, due to their unprofessional work, federal drug agents and officials were prevented from arriving at a satisfactory resolution of the Bouchard heroin inquiry itself.

Finally, this staff study demonstrates in detail an aspect of Government operations little known to the Congress or the American. people. The Government operation is Federal law enforcement and that little known aspect of it under examination here is the mannerin which Federal agents use undercover informants to develop criminal cases and, in turn, the way informants use the Government.

By the nature of dealing with undercover informants, the Government must usually do business with persons of questionable moral fiber. Law abiding citizens, for instance, rarely come upon information that might result in Government agents seizing 100 kilograms of heroin. Information of this type more frequently comes from individuals who, either directly or indirectly, are themselves engaged in drug or other illegal ventures.

Informants, even those in crime, may be motivated by the desire to help society or to cleanse a guilty conscience. They may be motivated by a desire to avenge past wrongs. But most of the time they are motivated by the prospect of a reward. For a price some are willing to betray friends and associates.

By the same token, however, sometimes the informant's motivation is not altogether internal. Sometimes-at least from the point of view of the informant-he may have been coaxed into his undercover assignment. He may have given authorities a small tip about a small crime and then the authorities want a bigger tip from him about a bigger crime. Agents may offer rewards that never materialize, or that, when given, are not as large as were promised. Conversely, the informant may insist no payment is large enough for the risk he encountered and will demand more and more money.

Thus, the relationship between the Federal agency and the informant is tenuous at best. Ironically, it is a relationship built on trust. Yet many informants are untrustworthy. They are selling out trusting associates for a price. Agents know this and must act accordingly. Government operatives who buy information from informants are engaged in dangerous and sensitive work. They perform an important service for their Government. Yet informants also work for the Government. They also perform a service but they have no practical avenue of appeal if they feel they have been wronged. Informants have no recourse but to accept whatever payment for their services Federal agencies decide to give them, for fear of being exposed.

When a law enforcement agency engages an informant, that agency functions in an environment in which there is almost total lack of accountability. For there is little control over the way the agency, its executives and its agents in the field use undercover informants. And. under ordinary circumstances, they do not answer to anyone about the way informants use them.

If, due to an informant's information, an arrest is made or a major heroin seizure is executed, the informant's role must be concealed. For the informant's protection and possibly future use, it must be that way. But if an arrest is bungled, if the heroin seizure is foiled due to an error of the agency, that agency is not always held accountable because of the clandestine nature of its work. It is conceivable that in a given unsuccessful police effort, only the informant and the agency with which he has worked know whether professional incompetence caused the failure.

The lack of accountability is a double-edged sword for Federal law enforcement agencies. Because of it, they can-and must-protect the identity and often the life of their informant. But, because there is little accountability, they have the unique capability, when convenient, to cover up their own failures, their own shortcomings, their own enmities and their own arrogance.

XIX. APPENDIX

CHRONOLOGY

January 15, 1972.-Canadian racketeer Conrad Bouchard was arrested by the Royal Canadian Mounted Police on heroin smuggling charges. Prior to this time Peroff was criminally involved with Bouchard in stolen securities and counterfeit money transactions. Peroff had known Bouchard since 1970.

March 13, 1972.-Frank Peroff went to the New York office of the Federal Bureau of Investigation with information about a counterfeit money plot in England. The FBI referred Peroff to the Secret Service office in New York where Peroff showed agents a bogus $50 bill and said it was part of a large collection of counterfeit currency being maintained in London by John Sidney Barnes. It was on this occasion that Peroff offered to help the Secret Service locate the plant where the counterfeit money was being printed.

March 24, 1972.-Harris J. Martin, at this time head of the counterfeit section of the Secret Service, and Frank Leyva, Chief of European operations for the Secret Service, met in London with Frank Peroff at which time Peroff provided information regarding the alleged counterfeiter, John Sidney Barnes. It was also at this meeting that Peroff was put in contact with Scotland Yard.

March 27, 1972.-Frank Peroff called Frank Leyva of the Secret Service to say that he no longer wished to cooperate with Scotland Yard in the Barnes counterfeit inquiry.

April 30, 1972.-Peroff came to Leyva's office in Paris and displayed a counterfeit $100 bill. Peroff identified the note as being part of a collection of counterfeit currency held by John Sidney Barnes and a Barnes' associate named Keith Jeffries.

May 11, 1972.-Peroff met in a Paris hotel with Leyva at which time the Barnes counterfeit case was discussed.

May 18, 1972.-Peroff, now in Sweden, called Frank Leyva in Paris to say that he was spending considerable amounts of his own money in connection with the Barnes counterfeit case. Peroff told Leyva he would visit him in Paris to work out "financial arrangements" with the Secret Service. Leyva said there would be no such talks since the Secret Service policy was that payments were made on a reward basis.

Summer of 1972. The Peroff family took up residence in Rome in a large house at 16 Via Barballo.

Early January 1973.-Peroff had a chance meeting with a man in front of the Excelsior Hotel in Rome. The man, known to Peroff as Louis, was an employee of Conrad Bouchard. Louis arranged for Bouchard and Peroff to discuss business in a series of long distance telephone calls between Peroff in Rome and Bouchard in Montreal.

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