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I. INTRODUCTION

On April 28, 1974 in a Federal courtroom in New York City, former Attorney General John Mitchell and former Commerce Secretary Maurice Stans were found not guilty of conspiracy, obstruction of justice and perjury. The trial was one of the most sensational in American history. Never before had two Cabinet members been tried together on criminal charges connected with official or political duties.

The charges against Mitchell and Stans revolved around $250,000 in campaign contributions made to the 1972 re-election campaign of President Nixon. The money was from Robert Vesco, the internationally known financier. The Government prosecutors alleged that in return for the contributions Mitchell and Stans had sought to influence a Securities and Exchange Commission inquiry into Vesco's activities.

The grand jury that indicted Mitchell and Stans May 10, 1973 also indicted Robert Vesco. But Vesco was living overseas, dividing his time between Costa Rica and the Bahamas. Efforts to extradite Vesco failed. The Government, through its office of the U.S. Attorney for the Southern District of New York, went ahead with prosecution of Mitchell and Stans. Vesco remained abroad, a fugitive from justice. The trial began February 19, 1974 and ended 46 days later with the acquittals.

Robert Vesco, while avoiding prosecution, was conspicious by his absence. His name came up many times during testimony. And, after the jury's verdict was read, there was still considerable comment about Vesco. One juror, Clarence Brown, was quoted in the April 29, 1974 Washington Post as saying, “They (the Vesco people] wanted to get something going but I don't think that Stans and Mitchell fell for it. Vesco was trying to get to any top figure to embarrass the President.”

The same edition of the Post quoted a government prosecutor, John R. Wing, as saying, “I feel rotten. I feel very disappointed in the verdict. If we could have gotten Vesco back it would have been different." Wing's boss, Paul J. Curran, the U.S. Attorney for the Southern District of New York, told the New York Daily News of April 30, 1974 that Vesco "is not off the hook" and could still be charged in connection with crimes Mitchell and Stans had been acquitted of. Curran said that Vesco “is a fugitive from justice and certainly will be prosecuted if he should step foot in the United States, or move to a country from which he can be extradited."

Curran was referring to the Government's two unsuccessful efforts to have Vesco extradited, first from the Central American country of Costa Rica, then from the Caribbean nation of the Bahamas. The failure to have Vesco for the Mitchell-Stans trial was a set back to the Government's side.

In the fall of 1973-at a time when the Federal Government was trying to extradite Vesco and preparing its case against Mitchell and Stansma man came to the Senate Permanent Subcommittee on Investigations and said he had information to show that Robert Vesco was a principal in a $300,000 heroin smuggling conspiracy. He said the Federal Government knew about the plot but had deliberately sabotaged efforts to investigate the conspiracy and expose Vesco's role in it. He said the Federal Government was protecting Robert Vesco.

The man making these charges was Franklin Peroff. He got in touch with the staff of the Investigations Subcommittee October 4, 1973. Peroff, 36, was known to the Subcommittee as an associate of organized crime figures. Peroff's name had come up most recently in connection with the Subcommittee's inquiry into the role of organized crime in the traffic in stolen securities. But Peroff's reason for making contact with the Subcommittee now did not have to do with stolen securities. Peroff wanted to talk about Robert Vesco, heroin, government cover-up and his own sa fety.

Subcommittee Investigators Philip R. Manuel and William B. Gallinaro listened to Peroff's story. They recommended further inquiry. The Subcommittee Chairman, Senator Henry M. Jackson of Washington, authorized a preliminary investigation.

The Drug Enforcement Administration (DEA) and the Customs Service, the two agencies most affected by the charges Peroff was making, conducted their own inquiry when Peroff's allegations were made known to them by the Subcommittee staff. Begun October 16, 1973 and completed December 12, 1973, the joint investigation was headed by William Green of Customs and Edwin L. Stamm of DEA.

On December 13, 1973, a day after completion of the inquiry, a report was issued. Entitled “Investigation of Allegations by Frank Peroff Concerning Special Agents of the Drug Enforcement Administration and the United States Customs Service," the report exonerated Federal agents of dereliction of duty. If anyone had failed to live up to what was expected of him, it was Frank Peroff, the report concluded. The joint DEA-Customs report asserted:

This investigation is concerned with possible personnel dereliction since Frank Peroff alleged to the Senate Permanent Subcommittee on Investigations that Customs and/or Drug Enforcement Administration agents attempted to discontinue an ongoing narcotics investigation when Robert Vesco's name was mentioned; that agents threatened and intimidated him; that someone, presumably the agents, burglarized his apartment in an effort to recover tape recordings mentioning Vesco's name.

All agents involved in this investigation denied, under oath, the allegations made by Mr. Perofl.

The investigation did establish that when Vesco's name came up, Mr. Peroff, an extremely difficult person to manage according to the agents, was requested to fly to Costa Rica for the purpose of exploring and further developing Vesco's

alleged involvement and that Peroff refused to go despite the fact he was assured protection.

This investigation failed to uncover any evidence to substantiate the allegations. While the DEA-Customs inquiry disputed Peroff's allegations, the Investigations Subcommittee inquiry went forward. Executive hearings were held May 17 and 30 and June 7, 11, 12, 13 and 14, 1974.

II. PEROFF'S BACKGROUND

Opening their preliminary inquiry into Frank Peroff's charges, Subcommittee Investigators Philip Manuel and William Gallinaro interviewed Peroff extensively and looked into his background. They found that Peroff had a police record, was a friend and business associate of known criminals, had ties with organized crime, was an admitted thief and trafficker in stolen securities and, since 1972, had been a confidential informant for several federal law enforcement agencies including the U. S. Customs Service, the Secret Service, the Bureau of Narcotics and Dangerous Drugs and later the Drug Enforcement Administration.

Franklin Peroff–he has no middle name—was born August 1, 1936 at Fordham University Hospital in the Bronx, New York. His father, Sam Peroff, a native of Rumania, came to the United States in the early 1920's. A retired clothier, the elder Peroff now lives in North Miami Beach, Florida. Frank Peroff's mother, Minnie Furer Peroff, a native of Minsk in the Soviet Union, died in 1960. Frank Peroff has a brother, Murray Holiday Peroff of Miami, and a halfbrother, Philip Peregosky of New York.

Peroff dropped out of the High School of Music and Art in New York in 1953 and joined the Navy. He was given an honorable discharge in 1956 although he had faced a court martial for breaking into an infirmary in search of drugs he could sell on the street.

As a civilian, Peroff was arrested on a misdemeanor charge of breaking and entering in Fort Lauderdale, Florida, in 1959. He made restitution and the charges were dropped.

The Subcommittee was interested in Peroff's mental health. Peroff testified that when he left the Navy he had done "a little bit of drinking" but had settled down after a few talks" with a psychiatrist. Peroff said that today he is a non-drinker and has been for several years. Peroff said that in 1968 he suffered from "ulcerated colitis” and there was a possibility that he would have to have a colostomy, a surgical procedure affecting the colon. Fearful of the consequences of this kind of surgery, Peroff said, he received counseling from a psychiatrist in about seven or eight sessions "to quite me down." (Pp. 130, 131.) Peroff, 6 feet tall, weighs 270 pounds.

Peroff married Judy Deane Orr, then 18, in Fort Lauderdale on January 14, 1960. They have five children, ranging in ages from 14 to 7. Peroff was charged in 1965 with five counts of bankruptcy frand. He was indicted in Miami and arrested in New York. Prior to trial, three counts were dismissed and Peroff received a directed verdict of not guilty on the remaining charges.

Peroff told the Subcommittee that the 1964 charges came about when an enterprise he owned, the Miami Clothing Mart, went out of business and he filed for bankruptcy. Peroff said that as owner of the

NOTE.–Page references refer to the official stenographic transcript.

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