[Congressional Record Volume 147, Number 138 (Monday, October 15, 2001)]
[Senate]
[Pages S10676-S10679]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 PROHIBITING UNDERCOVER INVESTIGATIONS

  Mr. WYDEN. Mr. President, today I rise to say the national 
antiterrorism legislation passed by this body is in grave danger of 
being rendered useless. The bill passed by this body corrected an 
immediate and severe impediment to the undercover investigations that 
must be employed to shut down terrorism in our Nation. The 
antiterrorism bill passed by this body included legislation introduced 
by Senator Leahy, Senator Hatch, and myself that would untie the hands 
of Federal prosecutors in my home State of Oregon and remove the 
roadblocks that currently all but prohibit undercover investigations 
there.
  Unfortunately, the antiterrorism legislation passed by the House 
strips that provision and rips back open the enormous loophole that 
potentially makes Oregon a safe haven for dangerous criminals and 
terrorists everywhere.
  For more than a year now, State and Federal prosecuting attorneys in 
Oregon have been legally prohibited from advising or participating in 
law enforcement undercover investigations. Without advice of counsel, 
law enforcement operatives cannot conduct wiretaps, sting operations, 
or infiltrate dangerous criminal operations. Covert investigations in 
my State have been shut down for more than a year. If the Senate does 
not insist on antiterrorism language to restart these investigations in 
Oregon, the national antiterrorism legislation will not be national at 
all; it will cover 49 States and it will give dangerous criminals, 
including terrorists, not just a license but practically an engraved 
invitation to set up shop in Oregon with little fear of detection or 
apprehension through undercover or covert methods. It would endanger, 
not just the people of my State but all Americans.

  I wish to explain briefly how this situation came about. It started 
here in Washington in 1998. An amendment to the omnibus appropriations 
bill started the ball rolling in Washington, DC. A McDade-Murtha 
amendment required Federal prosecutors to abide by the State ethics 
laws and rules in the State in which they work. In Oregon, the State 
bar association enacted a disciplinary rule making it unethical for 
attorneys to take part in any practice involving ``deceit or 
misrepresentation of any kind.''
  When an Oregon attorney misrepresented his identity to investigate a 
claim, the State supreme court found him guilty of an ethics violation. 
The McDade-Murtha amendment backed that up. It became very clear no 
matter how vital the investigation, no matter how great the need, no 
matter how dangerous the criminals, attorneys--including Federal, 
State, and

[[Page S10677]]

local prosecutors--are simply absolutely not allowed to take a single 
step, not even to give advice, to help in an undercover investigation. 
If an undercover investigator cannot get advice from a Federal, State, 
or local prosecutor, that undercover investigator cannot go forward. It 
is that simple: no wiretaps, no sting operations, no infiltrating or 
gathering information on any criminal group no matter how dangerous 
their bent or how dastardly their plans.
  I have been working on a bipartisan basis for more than a year now 
with Senator Leahy and Senator Hatch. They have been very helpful, but 
the stakes are getting higher and the solution is more important than 
ever.
  Federal officials have informed me that criminals have admitted that 
they set up shop in Oregon because the McDade situation makes it easier 
for them to remain undetected and unpunished--even more particularly 
sophisticated criminals. But garden-variety criminals have recognized 
the opportunities the loophole allows, and certainly more sophisticated 
criminal elements and terrorists can as well.

  Criminals operating in my State involved in serious crimes such as 
child pornography, drug sales, and eco-terrorism have been breathing 
easier, safe in the knowledge that law enforcement will have a much 
tougher time catching them without the best weapon in the war against 
these criminals. Several important investigations have in fact been 
terminated or impeded.
  For example, the Portland Innocent Images Undercover Program, which 
targeted child pornography and exploitation, was shut down when the 
U.S. attorney's office informed the FBI field office it would not 
concur or participate in the use of long-used and highly productive 
techniques such as undercover operations and conventional monitoring of 
phone calls that could be deemed excessive.
  If unsophisticated criminals were aware of enough to be attracted to 
Oregon because of this situation, I am extremely concerned that more 
sophisticated criminals and terrorists are equally aware that they can 
exploit this loophole.
  The House-passed version of the antiterrorism bill undoes the 
important work that Senator Leahy, Senator Hatch, and I did on the 
bipartisan basis, because the House bill specifically excludes the 
language that would fix the McDade problem.
  I say today that that must not be acceptable to the Senate. This body 
must act, and act now, to find the solution. Senators Hatch and Leahy 
and I worked on a bipartisan basis with the FBI and the Department of 
Justice to introduce the language that would allow prosecutors in 
Oregon to once again advise, consult, and participate in legal 
undercover investigations with law enforcement agencies. But if it 
doesn't get done in this conference on antiterrorist legislation, my 
concern is it will not get done at all.
  When the differences between the Senate and House antiterrorism bills 
are taken up in conference, Senate conferees must insist that the 
McDade fix is in the bill that goes to the President's desk. Anything 
less would make this antiterrorism legislation a toothless tiger, 
seemingly strong but incapable of defending or protecting any 
Americans, including the language that could possibly allow Oregon to 
be an easy basing State for future terrorist attacks that would be 
devastating to our Nation.
  The terrorists made their homes in Florida and New Jersey before 
striking Americans in New York and Virginia. I don't want to find 6 
months from now that the terrorists made their homes in Oregon because 
this body failed in its resolve to shut them down in every State in our 
country. Leaving one State vulnerable makes each State in this country 
vulnerable.
  I implore the conferees, and indeed the Congress, to act swiftly and 
judicially to guarantee that our Federal prosecutors and investigators 
have these essential tools that they have asked us to support on a 
bipartisan basis so they can conduct covert operations that are 
necessary to prevent and prosecute criminals in terrorist acts.
  I conclude by asking unanimous consent that several news articles 
that highlight the concerns Senators Leahy and Hatch and I have on a 
bipartisan basis be printed in the Record.
  There being no objection, the articles were ordered to be printed in 
the Record, as follows:

                [From the Chicago Tribune, Aug. 4, 2001]

        Oregon Ethics Ruling Chided for Handcuffing Police Work

                          (By V. Dion Haynes)

       For the last year, police and law-enforcement officials say 
     they have been handcuffed by a state Supreme Court ruling 
     that all but prohibits undercover work, a staple of crime 
     investigations.
       Nationwide, sting operations--those involving paid 
     informants, surveillance and undercover officers--have become 
     the preferred weapon in the investigative arsenals of law-
     enforcement agencies battling crime. Typically, prosecutors 
     direct the operations to ensure that law-enforcement agencies 
     do not entrap suspects and do not break rules in gathering 
     evidence.
       But prosecutors reluctantly severed their ties to some 
     undercover investigations and disbanded others after the 
     Oregon's highest court ruled a year ago that prosecutors are 
     not exempt from state bar ethics codes prohibiting lawyers 
     from engaging in ``dishonesty, fraud, deceit or 
     misrepresentation.''
       While the ethics codes of most state bars forbid 
     dishonesty, Oregon is the only state to apply that rule to 
     prosecutors involved in undercover investigations in which 
     informants or detectives must misrepresent themselves.
       Undercover operations in Oregon have continued since the 
     ruling, but without legal advice from prosecutors.


                          ABA to address issue

       The American Bar Association, now meeting in Chicago, plans 
     to address a related controversy over a federal law requiring 
     Justice Department prosecutors to submit to state ethics 
     guidelines.
       Some criminal defense lawyers praise the Oregon Supreme 
     Court ruling, saying all lawyers should be subject to the 
     same standards. The ruling is helping rein in prosecutors and 
     investigators who often rely too heavily on undercover work, 
     they say.
       ``As a matter of public policy in a democratic system, 
     government lawyers should not be allowed to engage in deceit 
     while other lawyers are precluded from doing so by bar 
     disciplinary rules,'' said Steven Wax, a federal public 
     defender in Portland.
       But the FBI, U.S. attorney's office, Drug Enforcement 
     Administration, state attorney general, Oregon State Police, 
     county district attorneys and local police departments say 
     the ruling has curtailed their investigative work, hindering 
     their ability to fight narcotics, child-sex abuse, 
     prostitution, organized crime, housing discrimination and 
     consumer fraud.
       ``I think it's generally true that the worst criminals are 
     smart enough to hide their crimes and can only be found 
     through undercover operations,'' said Oregon U.S. Atty. Mike 
     Mosman.
       Oregon's court decision, in part, illustrates a long-
     standing, bitter dispute over whether Justice Department 
     prosecutors should be subject to local bar association ethics 
     codes in the states where they serve.
       The debate started during the first Bush administration and 
     continued in the Clinton administration, when the attorneys 
     general issued policies exempting federal lawyers from state 
     ethics codes.


                           Mc Dade Amendment

       Last year, Congress reversed a Justice Department policy 
     with the so-called McDade Amendment, which requires lawyers 
     and federal prosecutors in all states to comply with local 
     ethics and court rules.
       The law stemmed from concerns about ``how far should 
     government go in preventing crime,'' said John Henry Hingson, 
     a defense attorney in Oregon City, Ore., and a former 
     president of the National Association of Criminal Defense 
     Lawyers.
       ``Many Americans believe that undercover operations go into 
     entrapment,'' he added.
       The question of whether an ethical double standard exists 
     for government lawyers and defense lawyers arose in Oregon 
     with the case that prompted the August 2000 state Supreme 
     Court ruling banning misleading practices by prosecutors.
       Using the tactics of government undercover operations, 
     personal injury lawyer Daniel Gatti allegedly posed as a 
     doctor in phone calls to an insurance company he was planning 
     to sue, according to the Oregon State Bar.
       Citing the ethics code prohibiting lawyers from using fraud 
     and deceit, the state high court publicly reprimanded Gatti.
       The U.S. Justice Department asked that state Supreme Court 
     to exempt prosecutors from the code, but the court ruled that 
     the ethics code does not allow exceptions. The opinion 
     further forbade lawyers from encouraging anyone else to 
     participate in the misconduct.
       ``I have not authorized certain investigations or I have 
     shut down other investigations because I did not have a 
     prosecutor or U.S. attorney involved,'' said Capt. Jim 
     Ferraris of the Portland Police Bureau's drug and vice 
     division.


                         Drafting an exemption

       A state bar committee is drafting a rule change that would 
     exempt all prosecutors from the ethics code prohibition on 
     deception, thereby allowing them to again supervise 
     undercover operations. If it passes the bar's House of 
     Delegates next month, the proposed rule would go to the 
     Supreme Court for final approval. The high court early this 
     year rejected a similar proposal.

[[Page S10678]]

       The Justice Department is pressing Congress to repeal the 
     law requiring federal prosecutors to follow state ethics 
     rules and it is suing the Oregon State Bar over its 
     disciplinary code.
       Meanwhile, the American Bar Association is proposing a 
     change in state ethics codes that would preserve the federal 
     law's requirement that government prosecutors submit to state 
     disciplinary rules but would give the Justice Department 
     latitude in its investigations--with a court order.
                                  ____


               [From the Associated Press, Oct. 12, 2001]

 House Fails To Include Oregon Investigation Measure in Anti-Terrorism 
                                Package

                         (By Katherine Pfleger)

       Washington.--The House anti-terrorism package passed Friday 
     failed to include a measure designed to remove barriers faced 
     by federal attorneys conducting covert investigations in 
     Oregon, Including those into suspected terrorists.
       The measure, which the Senate approved Thursday, would have 
     lifted restrictions in Oregon that hinder federal prosecutors 
     from approving undercover operations to catch suspected 
     criminals.
       But Reps. Henry Hyde, R-Ill., and at least one other 
     congressman had the language removed from the House anti-
     terrorism package. ``I believe U.S. attorneys ought to obey 
     ethical requirements of the state,'' Hyde said Friday.
       As a result, Sen. Ron Wyden, D-Ore., said he worries that 
     Oregon could remain ``a safe-haven'' for terrorists and other 
     criminals. He sponsored the measure with Sen. Patrick Leahy, 
     D-Vt.
       Wyden's Chief of Staff Josh Kardon said the senator won't 
     discuss classified security issues.
       But ``I find it difficult to believe that he would be 
     putting this many hours into this legislation, with all that 
     is going on right now, if he don't believe that there is a 
     current threat to the nation's security,'' Kardon said.
       Kardon said withdrawal of White House support contributed 
     to the measure's downfall.
       The restrictions stem from an Oregon Supreme Court decision 
     that said all attorneys--including federal prosecutors--must 
     abide by Oregon State Bar ethics rules that prohibit deceit.
       A former senior Justice Department official, speaking on 
     condition of anonymity, said investigators have found 
     information about the court decision during searches of 
     suspects, unrelated to the terrorist investigation.
       ``If the ordinary garden variety of crooks know this, it 
     paints a bull's eye on the state,'' the official said. 
     ``Looking at what these guys did on Sept. 11, you can see 
     they paid attention to some pretty sophisticated things.''
       Four men with Oregon addresses are on an international list 
     compiled by anti-terrorism agencies that are tying to lock 
     down assets of those with suspected ties to the Sept. 11 
     terrorist attacks. It was inadvertently posted on a Web site 
     earlier this month by Finland's financial regulator.
       None of the men still live in the state.
       U.S. Attorney Michael Mosman, Oregon's top law enforcement 
     officer, wouldn't comment on whether the state court's ruling 
     was hampering any investigations involving the Sept. 11 
     terrorist attacks.
       However, Mosman said, more broadly the ruling ties the 
     hands of federal prosecutors working in Oregon, both in 
     state-specific cases or more sweeping national ones.
       ``Federal prosecutors are in a box with our sworn oath to 
     uphold the law, which doesn't allow us currently to do 
     undercover work, and our sworn duty to protect the public,'' 
     he said.
       For instance, Mosman said, in some cases investigators may 
     need to get approval from the U.S. attorney before using more 
     serious undercover techniques, such as wiretaps, but Mosman 
     is barred from participating.
       Charles Williamson, a member of the Oregon State Bar board 
     of governors, said he personally has concerns on his initial 
     read of Wyden's legislation.
       ``It may give federal prosecutors too much latitude,'' 
     Williamson said. ``Could they lie to a judge? Could they lie 
     to defense council in a case?''
       Wyden's legislation would have altered the ``McDade 
     amendment,'' pushed by Hyde and Joe McDade, a former 
     congressman whose reputation was clouded by an eight-year 
     racketeering case before he won acquittal in 1996.
       The amendment prevented federal prosecutors from using 
     investigative techniques such as wiretaps, undercover stings 
     and contacting company whistleblowers that are not barred by 
     federal law but are disallowed by some ethics rules enforced 
     by state and local bar associations.
       Passed this week, the House and Senate anti-terrorism 
     packages expanded the FBI's wiretapping authority, imposed 
     stronger penalties on those who harbor or finance terrorists 
     and increased punishment for terrorists, among other 
     measures.
       The two versions could go to a conference committee to iron 
     out the differences, or the Senate cold decide to simply vote 
     on the House legislation.
       Kardon said Wyden is outraged his measure isn't included in 
     the House bill.
       ``He has put the Senate leadership on notice that he plans 
     to fight to retain his legislation in the anti-terrorism 
     bill,'' Kardon said.
       Rep. Greg Walden, R-Ore., is considering a few options, 
     including efforts to get the legislation passed as a stand-
     alone bill, if necessary, said Dallas Boyd, Walden's 
     legislative assistance for defense.
       Meanwhile, Rep. Peter DeFazio, D-Ore., complained the House 
     bill was cobbled together overnight.
       ``A lot of people don't know what else was in there, 
     including me,'' he said. ``It was rushed though the House. 
     The process broke down.''
                                  ____


              [From the Portland Oregonian, Oct. 13, 2001]

                   House Bill Loses Oregon Provision

(By Ashbel S. Green--The Oregonian Staff writer Jim Barnett contributed 
                            to this report)

       The U.S. House of Representatives on Friday stripped a 
     sweeping anti-terrorism bill of a provision designed to allow 
     suspended federal undercover investigations in Oregon to 
     resume.
       The bill, which included the ``Oregon provision'' in the 
     version the U.S. Senate passed Thursday night, will head to a 
     conference committee, where representatives of the two 
     chambers will try to work out the differences next week.
       The Oregon provision would allow federal prosecutors to 
     supervise undercover operations, even if they required using 
     deceit.
       Sen. Ron Wyden, who proposed the Oregon provision after the 
     Sept. 11 attacks, and more recently inserted it in the anti-
     terrorism bill requested by President Bush, will fight to put 
     it back into the bill, according to his staff.
       Without the provision, ``in essence, the bill will be an 
     anti-terrorism bill for 49 states,'' said Josh Kardon, 
     Wyden's chief of staff.'' A bill that addresses only 49 
     states leaves the entire nation in jeopardy.''
       The provision would amend a controversial 1998 law that 
     requires federal prosecutors to comply with the laws and 
     state bar rules of every state in which they conduct 
     enforcement activities.
       That law, passed at the behest of Rep. Joseph M. McDade, R-
     Pa., and Rep. John P. Murtha, D-Pa., was designed to curtail 
     prosecutorial excessiveness. McDade was once indicted on 
     federal corruption charges but later was acquitted.
       Murtha and Rep. Henry Hyde, R-Ill., who are big supporters 
     of the 1998 law, demanded that the Oregon provision be 
     stripped out of the anti-terrorism bill, Kardon said.
       Molly Rowley, a spokeswoman for Senate Majority Leader Tom 
     Daschle, D-S.D., said the Senate would conduct a legislative 
     conference on the bill with the House early next week.
       Last year, federal law enforcement officials suspended many 
     undercover operations in response to an Oregon Supreme Court 
     ruling that prosecutors were excepted from state bar rules 
     against lawyers' lying.
       In 2000, the Oregon Supreme Court upheld a disciplinary 
     action against Daniel J. Gatti, a Salem attorney who 
     misrepresented himself as a chiropractor while investigating 
     whether to file a lawsuit.
       The Oregon State Bar responded in January by passing a rule 
     that allowed all lawyers to supervise undercover operations, 
     but the Supreme Court rejected the change.
       Last month, the bar passed a more limited rule that allowed 
     only government lawyers and legal aid groups to supervise 
     undercover operations. The Supreme Court has yet to decide on 
     that change.
       In the meantime, earlier this year the U.S. Department of 
     Justice sued the state bar over the rule, seeking to block it 
     from being enforced against federal prosecutors.
       A hearing in that case is scheduled for next month.
                                  ____


              [From the Statesman Journal, Oct. 13, 2001]

                      House Measure Ignores Oregon


  covert criminal investigations are hampered here by restrictive laws

       Washington.--The House anti-terrorism package passed Friday 
     failed to include a measure designed to remove barriers faced 
     by federal attorneys conducting covert investigations in 
     Oregon, including those into suspected terrorists.
       The measure, which the Senate approved Thursday, would have 
     lifted restrictions in Oregon that hinder federal prosecutors 
     from approving undercover operations to catch suspected 
     criminals.
       But Reps. Henry Hyde, R-Ill., and at least one other 
     congressman had the language removed from the House anti-
     terrorism package. ``I believe U.S. attorneys ought to obey 
     ethical requirements of the state,'' Hyde said Friday.
       As a result, Sen. Ron Wyden, D-Ore., said he worries that 
     Oregon could remain ``a safe haven'' for terrorists and other 
     criminals. He sponsored the measure with Sen. Patrick Leahy, 
     D-Vt.
       Wyden's Chief of Staff Josh Kardon said the senator won't 
     discuss classified security issues.
       But ``I find it difficult to believe that he would be 
     putting this many hours into this legislation, with all that 
     is going on right now, if he didn't believe that there is a 
     current threat to the nation's security,'' Kardon said.
       Kardon said withdrawal of White House support contributed 
     to the measure's downfall.
       The restrictions stem from an Oregon Supreme Court decision 
     that said all attorneys--including federal prosecutors--must

[[Page S10679]]

     abide by Oregon State Bar ethics rules that prohibit deceit.
       A former senior Justice Department official, speaking on 
     condition of anonymity, said investigators have found 
     information about the court decision during searches of 
     suspects, unrelated to the terrorist investigation.
       ``If the ordinary garden variety of crooks know this, it 
     paints a bull's eye on the state,'' the official said. 
     ``Looking at what these guys did on Sept. 11, you can see 
     they paid attention to some pretty sophisticated things.''

  Mr. WYDEN. Thank you, Mr. President. I yield the floor.
  The PRESIDENT pro tempore. The Senator from Arizona, Mr. Kyl, is 
recognized.
  Mr. KYL. Mr. President, I believe that among staff there is an 
informal agreement we would extend the morning business time for a 
period up to 5 o'clock, which would take us beyond the 4:30 time. When 
someone is ready to propound that unanimous consent request, I will be 
prepared to stop since my time will go beyond 4:30, which I understand 
is the current time. I thought I would note that. I will be 
particularly speaking after 4:30 based upon that understanding.
  The PRESIDENT pro tempore. Is there objection?
  Without objection, it is so ordered.
  The Senator is recognized.
  Mr. KYL. I thank the Chair.

                          ____________________