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By this letter I am formally transmitting to you a copy of the Report of the Subcommittee on Crime on its oversight investigation of the United States Department of Justice's prosecution of E.F. Hutton for mail and wire fraud.

As you know, the Subcommittee conducted a detailed and intensive investigation of the Hutton matter. This effort provided a comprehensive review of the handling of a major white collar crime case. The Hutton case was chosen as representative of a number of recent white collar crime cases either where no individuals were charged, or where charges and/or penalties appeared less stringent than appropriate to the facts of the matter.

At the end of the investigation, the Subcommittee wrote a lengthy analysis of Hutton, including a careful description of Hutton's conduct and of the Department's legal and strategic positions.

The conclusions set forth in the Report are all carefully supported by documents provided by Hutton, the Department, and various others with knowledge of the case, and by the Subcommittee's independent investigation and interviews with those involved.

As Chairman of the Subcommittee on Crime I have gone to great lengths to conduct the business of the Subcommittee on a bipartisan basis, and to always accommodate the various positions and views held by all of the members of the Subcommittee. I have carried this philosophy over into the full Committee, seeking a bipartisan resolution to difficult procedural and substantive issues. I take great pride in my responsibilities as a member of this body and this Committee. I strongly believe that, as an

Honorable Peter W. Rodino, Jr.
Page Two
April 2, 1987

institution, the United States House of Representatives is entitled to great respect, and that, as privileged members of this body, we must treat each other with dignity.

I have carefully considered the dissenting views to the Subcommittee Report and am profoundly sorry to say that I do not believe that they meet the standards that this institution deserves. There is always room for political disagreement, both profound and small. In fact, our political system is premised upon and gathers great strength from the expression of a diversity of views. This diversity can thrive only in an environment of mutual respect.

My concern about the dissenting views relates both to their substance and tone. It would serve no useful purpose to remark upon every instance of factual misrepresentation and personal effrontery. However, the implication that I did not support the Comprehensive Crime Control Act when, in fact, no one in the Congress worked harder for its passage, stands out as particularly offensive. I have enclosed with this letter selected quotations from the dissent that I found especially egregious, with commentary where needed. Otherwise, I believe, the tone speaks for itself.

My intention during the 100th Congress is to continue to conduct the business of the Subcommittee in a bipartisan manner, and to seek the views of all of its members. This is, as you know, a two-way street. I hope that, in this new Congress, the minority members of my Subcommittee will join me in this effort. As you know, Mr. Chairman, there are too many worthy and important tasks before us to be distracted by partisanship and needless divisiveness.

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SELECTED QUOTATIONS

I have commented on these quotations only where I felt it was absolutely necessary to supplement the facts set forth and the views expressed in the Report. Otherwise, the Report is more than sufficient to indicate the fallacies in these statements. 1) *The report insinuates, but fails to demonstrate a connnection between the grand jury extension and a lunch shared by Mr. Fomon and william French Smith

[T]his report includes a great deal of unsubstantiated speculation and insinuation

We agree that the occurrence of this lunch raises ethical questions concerning Mr. Fomon's conduct, but we fault the report for an obvious attempt to make a political mountain out of a molehill

This is hardly within the scope of legitimate oversight."

COMMENT: The dissent spent 10 pages discussing the
luncheon; the Report 7 paragraphs. The dissent refuses
to admit that the Report concluded that the luncheon
had no connection to the extension.

2) " The Subcommittee dangled (the luncheon) before the press for many months despite a total lack of evidence of this claim beyond mere speculation."

3) * The Subcommittee's request for documents involved too little recognition of the legal issues and the balance of power between two branches of government. The Subcommittee's absolute refusal to recognize the difficulties created by its requests for grand jury documents is the reason that this oversight investigation has dragged on for fifteen months. The report's smug enjoyment of the Subcommittee's attainment of the 'upper hand' in this dispute is not flattering, is not in the best interests of the criminal justice system or the people it serves, and fails to resolve the Federal Rule of Criminal Procedure 6(e) dilemma."

4) "If this Subcommittee is unhappy with the tools that Mr.
Murray was forced to use, it should have changed the law earlier.
We note with some chagrin that the Chairman of this Subcommittee,
Mr. Hughes, with Mr. Morrison, Mr. Smith, Mr. Feighan, and Mr.
Staggers, voted against the Comprehensive Crime Control Act which
contained major criminal law reforms including the new bank fraud
statute, the criminal injunctive provision used in this case, and
vastly upgraded fines not available to the prosecutors of
Hutton. The dissent goes on to describe the process by which
the Senate version of the crime bill was brought to the floor of
the House, and states that "(a)ll members (of the Subcommittee)
voted for the Continuing Resolution except Chairman Hughes."

COMMENT: There is no member of Congress who worked
harder for the passage of the Comprehensive Crime
Control Act than I did. I drafted many of the

Selected Quotations, Page 2

provisions of that Act, and processed them through the
House, often against strong opposition and great odds.
As the minority members well know, the votes they so
unfairly cite related solely to the procedural issue of
how the bill was to be considered by the House. They
are irrelevant on the issue of support for the Act
itself.

Furthermore, the Subcommittee was not unhappy with the tools Mr. Murray was forced to use. It was unhappy that he

did not use the ones he had. 5) "It is somewhat ironic that the report appears to be soft on these fraudulent practices that we addressed in our tough crime law in 1984. We note that most members supporting this report also voted against the Comprehensive Crime Control Act."

COMMENT: See 4 above. 6) "The Subcommittee's attitude [toward the Department) is merely a shortsighted form of bullying." 7) *We find little resemblance between the actual case and the Subcommittee findings." 8) "[T]o criticize the (restitution) formula the prosecutors developed is, once again, nitpicking and second guessing." 9) "Contrary to what the tenor of this report indicates, the prosecutor cannot indict based on what is politically expedient or popular. .. 10) "Our biggest complaint is that the Subcommittee refused to acknowledge that the language in Rule 6(e) does not permit servitude to Congressional oversight." 11) "The Subcommittee on Crime (was willing] to run roughshod over the prosecutors' duty to maintain grand jury secrecy. . 12) * The Subcommittee maneuvered the Department of Justice into this untenable position (choosing between contempt of court and contempt of Congress) in an effort to prove the point that it had the upper hand. We believe the exercise was one of bad government . 13) "(0)ver our objections the House Judiciary Committee has consistently denied the Department of Justice requests for additional prosecutorial resources. To the extent that limited resources are a problem, the Committee is responsible."

COMMENT: As the minority members well know, as
Chairman of the Subcommittee on Crime, I have

Selected Quotations, Page 3

consistently supported requests for additional
resources for all of our law enforcement agencies.
Furthermore, as they should also know, the ultimate
decision about such resources lies with the
Appropriations Committees of both the House and the
Senate, not with the Judiciary Committees of those
bodies.

14) "The report 'arm chair prosecutes' (and) 'Monday
morning quarterbacks' (the case)."
15) "Although the Department of Justice was invited to testify
at the June hearing, which was subsequently cancelled, the
prosecutors were not permitted to tell their story until
December, 1985. Even then, the prosecutors were not permitted to
explain the complicated facts of the case or the relevant law."

COMMENT: The Department of Justice submitted its
written statement and a summary of the case to the
Subcommittee (including the minority members) in June
1985. Between June and the end of the investigation,
the Department briefed me and the Subcommittee staff on
several occasions. In addition, and obviously, they
briefed the Subcommittee in detail during their public

testimony in December 1985. 16) "[T]he Subcommittee began the public hearing process with no cogent explanation of Hutton's acts and practices

since an understanding of the facts is so critical to any reasonable analysis of the Hutton prosecutive effort, we have adopted, in substantial part and present here, the factual summary of the case originally contained in the prepared statement of Assistant Attorney General Stephen S. Trott.

COMMENT : As all of the members of the Subcommittee
agreed at the inception of our investigation, a primary
purpose of the investigation was to develop the facts
through both Hutton and the Department. At the outset,
as noted above, we had already been provided with the
Department's explanation of Hutton's acts and
practices. The initial hearings were thus devoted to
further developing the facts through the testimony of

other interested parties. 17) "Much of the misunderstanding and frustration would have been averted if the Subcommittee had permitted the Department of Justice to testify early in the Subcommittee investigation. The Department would have clarified the distinctions between the various overdraft practices and the criminal liability of the corporations and individuals for such schemes and thereby averted the members' frustration and the factual misunderstandings that occurred in the press from June, 1985 until December, 1985.

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