Senator LONG. Who wrote this letter? Mr. CHARLTON. Mr. Sheinman on behalf of Mr. Teitelbaum who worked in the same office, law firm. Senator LONG. And Mr. Teitelbaum was the U.S. attorney at that time in Pittsburgh? Mr. CHARLTON. Yes. Senator LONG. And he will testify here Thursday? Mr. CHARLTON. Yes. There really has been no manual as to how an undercover agent was to work and to develop cases in this area. If any manual ever existed it was a manual of experience that Mr. Charlton and Mr. Larkin developed. In their field the record shows that had to assume many identities, learn about many things and blend into the society. They were not dealing in these cases with upstanding law-abiding citizens. They were dealing with thieves, gangsters, gamblers, and other types of people whose only goal and interest was how to best violate the law. It was in this society that they had to blend and obtain evidence. From each thief they would obtain leads as to other law violators. Mr. Charlton had to make his own leads. He had outstanding success. You will note in the transcript of the proceedings that Mr. Charlton received commendations from the district director of the Internal Revenue Service in Pittsburgh and from many other districts. Mr. Charlton had to be quick witted and had to get the information. This is what he was doing in the instant situation. He met a man who had apparently recognized him, Mr. Ferraro. We developed in the hearing that Mr. Ferraro was a notorious character who was arrested on nearly every charge imaginable from sodomy to number writing. We developed that the city police who were involved here were led by Lieutenant James. Responsible officers of Internal Revenue thought that they could not believe Lieutenant James, because he had a reputation of working on both sides of the street. In other words, some lottery operations were raided by Mr. James, and others were left alone. What Mr. Charlton has done was to obtain information about one of the rackets that apparently flourished with the acquiescence of the police. Their only recourse was to destroy Charlton, and they have done so, not because of anything Charlton did, but because of the absurd action of the Inspection Service of the Internal Revenue Service. Mr. Charlton had often obtained information from people under many unusual circumstances. His supervisor, Mr. Green, did not want to discuss anything with Mr. Charlton over the telephone. Hence, when Mr. Charlton said to Mr. Green that "he had a surprise for him" these were new words, words that Mr. Green had not heard heretofore. The charge that Mr. Charlton received a bribe from Mr. Ferraro is without basis. The test of the regulations is not what officers sitting in an air-conditioned suite in the Federal building might think was a bribe. But the test is what does the man to whom the overture was made think? Senator LONG. Mr. Charlton, I wonder if you could dispense with the further reading of that letter, and we will place that letter in the record. (The letter referred to is as follows:) MORRIS, SAFIER & TEITELBAUM, Pittsburgh, Pa., June 23, 1964. Re BAR: LR Decision of the Commission's Philadelphia Regional Office sustaining the action of the Internal Revenue Service in removing George N. Charlton, Jr., from the position of criminal investigator (special agent), GS-12, $10,105 per annum, Treasury Department, IRS, Pittsburgh, Pa., on charges. E. T. GROARK, Board of Appeals and Review, U.S. Civil Service Commission, DEAR MR. GROARK: We received your letter dated June 12, 1964, on June 17, 1964, in which you inform us that if we desire to submit any additional material we may do so in writing. I should like to take this opportunity to point out to you what we feel are certain defects in the decision of the Internal Revenue Service and in the decision of Mr. Niles, the regional appeals officer. There seems to be no question that Mr. Charlton has been a valuable career employee with the Internal Revenue Service for many years. For several years he has worked in an undercover capacity and has developed more wagering tax cases than any other agent in America unless it was his coworker, Mr. Larkin. There really has been no manual as to how an undercover agent was to work and to develop cases in this area. If any manual ever existed it was a manual of experience that Mr. Charlton and Mr. Larikn developed. In their field the record shows that they had to assume many identities, learn about many things and blend into the society. They were not dealing in any of these cases with upstanding law-abiding citizens. They were dealing with thieves, gangsters, gamblers, and other types of people whose only goal and interest was how to best violate the law. It was in this society that they had to blend and obtain evidence. From each thief they would obtain leads as to other law violators. Mr. Charlton had to make his own leads. He had outstanding success. You will note in the transcript of the proceedings that Mr. Charlton received commendations from the District Director of the Internal Revenue Service in Pittsburgh and from many other districts. Mr. Charlton had to be quick witted and had to get the information. This is what he was doing in the instant situation. He met a man who apparently recognized him, Mr. Ferraro. We developed in the hearing that Mr. Ferraro was a notorious character who was arrested on nearly every charge imaginable from sodomy to number writing. We developed that the city police who were involved here were led by Lieutenant James. Responsible officers of Internal Revenue thought that they could not believe Lieutenant James because he had a reputation of "working on both sides of the street." In other words, some lottery operations were raided by Mr. James and other were left alone. What Mr. Charlton has done was to obtain information about one of the rackets that apparently flourished with the acquiescence of the police. Their only recourse was to destroy Charlton and they have done so, not because of anything Charlton did, but because of the absurd action of the Inspection Service of of the Internal Revenue department. Mr. Charlton had often obtained information from people under many unusual circumstances. His supervisor, Mr. Green, did not want to discuss anything with Mr. Charlton over the telephone. Hence when Mr. Charlton said to Mr. Green that he had a surprise for him these were new words, words that Mr. Green had not heard heretofore. The charge that Mr. Charlton received a bribe from Mr. Ferraro is without basis. The test of the regulations is not what officers sitting in an air-conditioned suite in the Federal building might think was a bribe. But, the test is, What does the man to whom the overture was made think? What did George Charlton honestly think when he was in this den of iniquity, doing his job for his country and Government. He testified that he was going to get a lead into more cases. Charlton knew his job and he was doing his job. For some reason, unknown to anyone, Internal Revenue Service thinks that George Charlton received a bribe offer. George Charlton went into this den of iniquity doing his job, the one assigned to him by the Government. The Government had pulled the rug from under this valuable agent. Second guessing in this case is easy. There is too much hindsight, but the only one that had any foresight was Mr. Charlton. Unfortunately, those planning to frame him were successful. The Internal Revenue Service has harmed itself. George Charlton did not receive a bribe offer within the meaning of the regulations, but the Internal Revenue Service through the Inspection Service to protect its "great" name has offered Mr. Charlton up as a sacrificial lamb. His sacrifice is not only a job but a life. How can a Negro who devoted the best years of his life to investigation work for the Government now find employment? What did he do wrong? In regard to charge two, the evidence obviously does not support a finding that he violated this charge. The hearing officer found that it was proper for Mr. Charlton to have possession of the number slips. Therefore how can the commission or the appeals officer in Philadelphia find that the evidence sustains the charge against him? The actions and findings are extremely naive. All of the testimony in the record indicates that it is not improper for the undercover agent to have the number slips in his possession. In fact, that is where they keep them until they file their final report. Mr. Larkin and experienced agents testified to this fact as well as Mr. Green, Mr. Charlton's supervisor. This procedure was found to be proper by the hearing officer. We have pointed out in our argument in our brief that undercover agents, so to speak, have to live and work by their wits. They have to get new cases from their old cases and having the number slips in Mr. Charlton's possession was a way of getting new cases. This has been a procedure followed by Mr. Larkin and enforcement officers in many fields of activities. Mr. Charlton, instead of being dismissed from service in this case ought to receive a citation from the department for meritorious work. We respectfully ask your honorable Commission to review our brief where we have commented on the evidence and consider this letter as our final closing statement to your Commission. We have asked heretofore why was Mr. Charlton dismissed, he did nothing wrong and the decision of the appeals officer only indicated that perhaps it would have been better if something else would have been done. Is Mr. Charlton to be judged by someone's 20-20 hindsight? It is very easy to have 20-20 hindsight, but has it been shown that anyone had better foresight than Mr. Charlton? Why has he been fired? We respectfully request that Mr. Charlton be reinstated and that this honorable Commission find that the charges against him have not been sustained by the evidence. Very truly yours, MORRIS, SAFIER & TEITELBAUM. Senator LONG. If you have another statement, it must be very brief. Because I must adjourn and go to vote. Mr. CHARLTON. The only other statement I have to make is that when the Commissioner stated this morning that he would rectify, in the future, things that should have been done, I hope he takes this into consideration before this case comes to court. Senator LONG. Thank you very much for being here. We have one other witness left, Mr. Dante Amobile, of Pittsburgh, who will be called tomorrow. We will be unable to finish today. At this time, the committee will stand in recess until 10 o'clock tomorrow morning. We will meet in this same room. (Whereupon, at 4 p.m., the hearing recessed, to reconvene at 10 a.m., Wednesday, July 14, 1965.) INVASIONS OF PRIVACY (Government Agencies) WEDNESDAY, JULY 14, 1965 U.S. SENATE, SUBCOMMITTEE ON ADMINISTRATIVE PRACTICE AND PROCEDURE OF THE The subcommittee met, pursuant to recess, at 10 a.m., in room 318, Old Senate Office Building, Senator Edward V. Long, of Missouri (chairman), presiding. Present: Senators Long of Missouri, and Burdick. Also present: Senator Scott; Bernard Fensterwald, Jr., chief counsel; Bernard J. Waters, Senator Dirksen's office; Charles H. Helein, assistant counsel; Gordon H. Homme, assistant counsel; Raymond C. Cole, Jr., chief investigator; Kathryn M. Coulter, special assistant; and Virginia Carlin, chief clerk. Senator LONG. The committee will be in order. Our first witness this morning will be Mr. Cresson O. Davis, Chief of the Intelligence Division, Internal Revenue Service, Pittsburgh. Mr. Davis, will you come around? Please raise your right hand and be sworn. Do you solemnly swear the testimony you give to this committee will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. DAVIS. I do. TESTIMONY OF CRESSON 0. DAVIS, CHIEF, INTELLIGENCE DIVI SION, INTERNAL REVENUE SERVICE, PITTSBURGH; ACCOMPANIED BY JOSEPH MCCARTHY AND ROBERT SPATZ, COUNSEL Senator LONG. State your full name. Mr. DAVIS. I am Cresson O. Davis, Chief of the Intelligence Division, Pittsburgh, Pa. Senator LONG. How long have you served in that position? Mr. DAVIS. Since April 1960. Senator LONG. How long have you been stationed in Pittsburgh? Mr. DAVIS. Since that time. Senator LONG. Where were you before that? Mr. DAVIS. Philadelphia. Senator LONG. How long were you there? Mr. DAVIS. About a year and a half in the Philadelphia district office. Senator LONG. How many agents do you have stationed with you in Pittsburgh? Mr. DAVIS. There are 37 special agents, sir, and 3 are just entering on duty, so there will be 40 all told, I think, by July, the end of this month. Senator LONG. Do you have other agents in that district or are you just in Pittsburgh, or is it the surrounding area? Mr. DAVIS. Senator, our territory includes western Pennsylvania and we have field posts at Erie and Johnstown. Senator LONG. Mr. Davis, for the record, will you please introduce the two gentlemen with you at the witness table? Mr. DAVIS. Yes, sir; this is Mr. Joseph McCarthy, counsel, and Mr. Robert Spatz, Internal Revenue Service. Senator LONG. Mr. McCarthy, are you with IRS? Mr. MCCARTHY. I am in private practice. I am his private counsel. Senator LONG. I understand. You were here, I think, and introduced to the committee yesterday. Mr. Davis, in the course of your work as chief of this division in Pittsburgh, have you ever taken part in the placing of any wiretaps on citizens' telephones? Mr. DAVIS. Not personally, sir. Senator LONG. Do you know of any that have been placed? Mr. DAVIS. Yes, sir. Senator LONG. Will you tell the committee what taps they were? Mr. DAVIS. The first tap with which I am familiar was one that was placed in 1961 in Wheeling, W. Va. Senator LONG. Is that in the Pittsburgh Division? Mr. DAVIS. No, sir, it is not. Senator LONG. That was another one before that time-that was before you were in Mr. DAVIS. No; this was after I was in, sir. Senator LONG. Do you know whether or not that was one of the taps Mr. Cohen referred to yesterday? Mr. DAVIS. Yes, it is. Senator LONG. Can you identify that tap any other way for our record here? We are not clear from Mr. Cohen's testimony and your testimony referring to the West Virginia tap as to just which tap this was. Could you tell us just whose phone was tapped at that time? Mr. DAVIS. Well, I actually do not know. I will give you the circumstances if you would like, sir. Senator LONG. If you will, please. Mr. DAVIS. We were investigating the Mannerino organization, which is outside of Pittsburgh and with connections in Pittsburgh, identified as part of the Cosa Nostra. They have national connections-Hot Springs, Miami, Los Angeles-this type of thing. They have been under investigation for years. We were investigating them in connection with income tax and also a gambling casino which was operating in New Kensington. In connection with this gambling casino in New Kensington which was operated by certain lieutenants of the Mannerino group, we were given information that they had a layoff headquarters in Wheeling which was the bookkeeping head |