The rapid
expansion of Ingersoll's Bureau of Narcotics and Dangerous
Drugs into the field of international narcotics control
cut directly into the territory of the Bureau of Customs,
in the Treasury Department. Until Attorney General Mitchell
declared new guidelines -in 1969, which expanded the
Justice Department's role in narcotics control and gave
Ingersoll's bureau preeminence in foreign (as well as
domestic) narcotics intelligence and operations, Customs
had a major responsibility for tracking foreign shipments
of narcotics, as well as other contraband, so that they
could be intercepted at the borders. Rossides interpreted
these new guidelines as Mitchell's initial move In a
"grand plan [to] centralize all the government's
Jaw enforcement activities-IRS included-in his Justice
Department." When Mitchell first broached this
idea of consolidating law-enforcement agencies, at a
cabinet meeting in 1969, Rossides was concerned that
this could upset the "separation of powers and
checks and balances" in government and, he noted
in a subsequent memorandum, raise "the spectre
of a national police force." At a less theoretical
level, Rossides wits also concerned that the stationing
of BNDD agents overseas would limit his ambitions for
expanding the Bureau of Customs.
He thus began a quiet
but effective campaign in Congress and the press (through
surreptitiously authored leaks) asserting that the Mitchell
guidelines would both seriously undercut the, antismuggling
role of Customs and wreak irreparable confusion in the
entire program to curtail narcotics. He argued in a
memorandum, "The Department of Justice, and its
Bureau of Narcotics, are supposed to enforce Federal
law within the United States, not usurp the job of Customs
in intercepting contraband shipments from abroad."
Even from a practical point of view, it made no sense
to Rossides for the BNDD, which had neither experience
in foreign relations nor bilingual agents, to conduct
overseas investigations and intelligence gathering which
formerly had been conducted by Customs. "We certainly
would not tolerate foreign agents working cases in the
United States," he wrote in the same memorandum.
Instead of "Americanizing the narcotics problem
by sending American narcs abroad," Rossides suggested
an interagency approach which would involve the Department
of State, the CIA, Customs, and the BNDD. He eventually
won the support of Secretary of State William Rogers,
who agreed it would be "ludicrous [to send] a policeman
in the Bureau of Narcotics to negotiate opium production
with the President of Turkey." Mitchell, however,
remained adamant, insisting that "all law enforcement
functions be located in the Department of Justice."
Rossides remained equally determined
to win a role for Customs in the heroin crusade, which,
even at this early date, seemed to Rossides to be "the
main area of action" in the Nixon administration.
He had appointed in 1969 two hard-driving and ambitious
former prosecutors, both of whom were very well acquainted
with the Rockefeller crusade in New York State, to assist
him in developing the Treasury Department's antinarcotics
program-Myles J. Ambrose and G. Gordon Liddy. Ambrose,
a charming New York lawyer, had devoted his career almost
exclusively to law enforcement and politics; twin pursuits
that are not always completely separable-working his
way up from an assistant U.S. prosecutor in the Southern
District of New York, to a commissioner on New York's
Waterfront Commission. After working behind the scenes
in President Nixon's 1968 election campaign, but not
being offered an appointment as U.S. attorney (his first
preference), he accepted the offer from Rossides to
be the commissioner of Customs-and, at forty-three,
he was the youngest person ever to hold that position.
Despite some doubts about his extreme politics, Rossides
acceded to White House request and appointed Liddy as
his special assistant for law enforcement, with special
responsibility for coordinating the Treasury Department's
narcotics program.
Continuing the head-on confrontation
with the BNDD, Rossides and Ambrose actively campaigned
in Congress for additional funds to modernize Customs'
attack on the narcotics problem. Ambrose was particularly
effective when he argued that the Bureau of Customs
had the "same size force as in Calvin Coolidge's
days," and still had not received modern equipment.
Congressman Thomas Steed, a Democrat from Oklahoma and
an admirer of Rossides, championed Customs' cause in
the House Appropriations Committee. Consequently, between
1969 and 1970 Customs' budget for narcotics interdiction
was quadrupled. The new resources were invested in a
computerized system, known as CADPIN, for collating
intelligence on narcotics traffic throughout the world;
helicopters and other interception equipment (including
heroin-detecting dogs); and an expanded force of agents
to pursue international smuggling investigations.
With Ambrose pressing in his
public speeches and press releases for the interagency
approach to narcotics, and Customs receiving increased
appropriations for its international investigations,
Ingersoll found that the BNDD and Customs were still
on a collision course. Rather than acting as the Supportive
agency In narcotics matters, as it was required to be
by the 1969 Mitchell guidelines, Customs was becoming
increasingly expansive in its antinarcotics policy,
and often not even informing the BNDD of its arrest
plans. In a number of cases Customs officers arrested
BNDD informers who were attempting to make a "buy"
of heroin from a Customs informer, and vice versa. Through
Mitchell, Ingersoll appealed to the White House to settle
the issue once and for all.
On February 5, 1970, President
Nixon, accepting Mitchell's counsel, issued a memorandum
which designated the Bureau of Narcotics and Dangerous
Drugs as the agency with prime responsibility for controlling
narcotics smuggling anywhere in the world, and Customs
was thus to give BNDD preeminence in narcotics control.
There was to be no further increase in the number of
Customs investigators overseas, and any Jurisdictional
disputes between the two agencies were to be resolved
by Mitchell, who was Ingersoll's main supporter. Clearly
Ingersoll had won a battle, at least in his struggle
to expand his agency.
Rossides, though blocked in
the international arena, decided to move into an entirely
new area of narcotics control: tax auditing and collection.
After several discussions with Mitchell and .J. Edgar
Hoover, it became clear to him that the FBI and the
Department of Justice's strike forces, which had been
established to pursue organized crime, had not been
involved at all in the suppression of the domestic narcotics
business. When he suggested at a meeting of Department
of Justice officials in 1970 that the FBI and the strike
forces might be redeployed against heroin traffickers,
he received only an icy stare from the FBI executives,
and the matter was not further discussed. Rossides realized,
however, that the Internal Revenue Service, which came
under his purview in the Treasury Department, was In
a unique position to fill this gap and pursue the major
domestic traffickers in heroin. The instrument would
be the net-worth audit, a procedure by which IRS accountants,
rather than examining the books and records of a suspect,
reconstruct his total expenditures by examining his
standard of living and comparing it with his reported
income. By subjecting suspected narcotics wholesalers
to such audits, Rossides believed it would be possible
for the IRS immediately to freeze their assets with
"jeopardy judgments" without waiting for trials,
and thereby to paralyze their business.
In early 1971 Rossides proposed
to John Connally, who had just been appointed secretary
of the treasury, that the IRS organize a pilot project
in Baltimore for scrutinizing the assets and returns
of narcotics suspects. Connally, a man of action, replied,
"Don't bother with the test program. Go national."
In the next few days Connally won the approval of the
director of the federal budget, Roy Ash, for two hundred
additional IRS agents who would be employed in the antinarcotics
program (the necessary appropriation was eventually
forthcoming from Congress). Rossides implemented the
plan by establishing a target-selection committee which
included representatives from BNDD, Customs, and the
IRS intelligence unit. All federal and local law-enforcement
agencies were requested to pass on to the committee
the dossiers of suspects. The committee would then evaluate
each case and pass back to the IRS those cases selected
for a complete tax investigation and net-worth audit.
Initially, executives at the IRS objected to the agency's
being used for any purpose other than tax collections.
They argued that the use of an outside committee to
select targets for IRS investigations was fraught with
the potential for political abuse, and that it would
establish a dangerous precedent. Rossides agreed in
principle, but believed that narcotics control was crucial
to the nation, and convinced the reluctant IRS officials
that he could effectively insulate the target-selection
committee from the influence of any other agency, including
the White House.
The Narcotics Trafficker Program,
as the IRS campaign was officially called, proved to
be an immediate success, In its first year of operation
IRS agents levied tax penalties of more than $100 million
against individuals suspected of being in the narcotics
business by local, state, and federal law-enforcement
agencies. In many cases, as soon as a suspect was arrested
on any charge, an IRS inspector immediately filed a
jeopardy assessment based on what he estimated very
roughly the suspect might have earned from the sale
of narcotics. If the suspect could not instantly pay
the assessment, the IRS would confiscate all his property
and savings (some $25 million was thus confiscated in
the program's first year of operation). Even if the
charges were subsequently dropped against the suspect,
the IRS did not necessarily restore the seized property.
In one case, for example, a National Airlines stewardess
suspected of dealing in drugs was arrested in Miami
for speeding. The police found a bottle in her possession
containing four pills. The IRS immediately filed a $25,549
lien against her, and confiscated her jewelry and savings.
Although the charges were dropped against the stewardess
(the pills were prescribed by her doctor), and neither
the police nor the IRS was able to produce any evidence
that she was involved in the narcotics business, under
the existing tax law she was unable to have the $25,549
tax assessment dismissed. In a very real sense the IRS
was converted into a highly unorthodox arm of narcotics-law
enforcement to strike at the "Achilles' heel of
the drug business," as Rossides put it.
The success, and unrestrained
effectiveness, of the IRS did not escape the notice
of the White House. Egil Krogh and the White House staff
pressed Rossides for a "more coordinated approach"
in which the Treasury Department's enforcement units
would be "aligned with White House policy."
Krogh repeatedly warned Rossides
that "we are at war," and that the president
"would not tolerate bureaucratic maneuvering"
in an area as Important as narcotics. But the stubborn
assistant secretary of the treasury steadfastly refused
to allow the White House to have any control over the
operations of the IRS and Customs, even to the point
of denying information to Krogh's staff. "My job
was to protect the autonomy of the Treasury Department's
law enforcement agencies," he explained subsequently.
"If Krogh or Ehrlichman wanted to run them, they
would first have to get Connally to fire me." And
that was not a feasible alternative. As relations between
the White House staff and Rossides deteriorated, Krogh
turned to Rossides's staff for assistance. Myles Ambrose.
impressed with Krogh's "efficiency in cutting through
bureaucratic red tape" and, more important, his
proximity to the center of power in the White House,
became increasingly. attracted to the White House group.
Gordon Liddy, who was, according to Rossides, "looking
to head a law enforcement agency," became an active
ally of Krogh's. (He was actually proposed in 1970 by
the White House for the directorship of the Alcohol,
Tobacco and Firearms control division of the Treasury,
but was rejected by senior Treasury officials.)
Not only was Liddy dealing
behind Rossides's back with Krogh, but he was openly
flouting the established policy of the Treasury Department
on a whole range of issues, including gun control. "The
situation was intolerable," Rossides explained.
"Liddy was acting as if he had independent authority
from the President." In the spring of 1971 the
deputy undersecretary of the treasury, Charles R. Walker,
decided that Liddy could no longer be retained in the
Treasury Department; he was given time to find a new
job, though. Krogh vigorously protested the firing of
Liddy, but to no avail-Rossides, Walker, and Connally
all stood firmly by the decision. After Liddy resigned
in July, 1971, Rossides, with powerful support in Congress,
intensified the effort to establish "an autonomous
role for the Treasury in the war against heroin,"
even if it meant continued skirmishes with Attorney
General Mitchell, Ingersoll's BNDD, and the White House.
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