Crime and Corruption Across America, 1972-1988
|Crime and Corruption
night guard at the Watergate Complex was making his rounds early one Saturday morning when he came across an exit door that had been taped open. He was immediately suspicious.
It was June 17, 1972, and he’d just uncovered what would become the most famous burglary in U.S. history.
Five men were arrested by police a few minutes later for breaking into the Democratic National Committee Headquarters inside the Watergate. Police also found fake IDs, bugging equipment, and lookouts in the motel across the street.
Things snowballed from there. President Richard Nixon’s reelection campaign had not only been caught committing an illegal political dirty trick, but the administration reacted by lying and covering up the crime and others. Two years later, President Nixon resigned rather than face certain impeachment.
From the moment that police realized the Watergate break-in was no ordinary burglary, the FBI was on the case. But the timing couldn’t have been worse. It had been less than five weeks since J. Edgar Hoover—the only Director FBI employees had known—had died in his sleep. For years, criticism of the Bureau and Hoover had been building. There was dissatisfaction with Hoover’s age, increasing political disagreement over the Bureau’s tactics and techniques, and widespread unease over the chaos and violence of the late 1960s.
Now, the FBI was about to become involved in the most politically sensitive investigation in its history.
During the Watergate scandal, the FBI faced political pressure from the White House and even from within its own walls—Acting Director L. Patrick Gray was accused of being too pliable to White House demands and resigned on April 27, 1973. And throughout, a high-ranking official—dubbed “Deep Throat” and ultimately identified in 2005 as FBI Deputy Director Mark Felt—was leaking investigative information to the press.
Still, FBI agents diligently investigated the crime and traced its hidden roots, working closely with the special prosecutor’s office created by the Attorney General and with the Senate Select Committee on Presidential Campaign Activities. Nearly every Bureau field office was involved in the case. Agents prepared countless reports and conducted some 2,600 interviews requested by the special prosecutor. The FBI Laboratory and Identification Division also lent their services. In the end, the Bureau’s contributions to unraveling the Watergate saga were invaluable.
In the midst of Watergate, the Bureau had gained new leadership. Clarence Kelley, a former FBI agent and Kansas City, Missouri, Chief of Police, took office on July 9, 1973. Kelley had the tough task of moving the FBI into the post-Hoover era. He did an admirable job of restoring public trust in the agency, frankly admitting that mistakes had been made and leading a number of far-reaching and necessary reforms.
In response to criticism of the Bureau’s Cointelpro operation, for example, he reorganized FBI intelligence efforts. In February 1973, the General Investigations Division took over responsibility for investigating domestic terrorists and subversives, working under more strict guidelines and limiting its efforts to actual criminal violations. The Intelligence Division retained foreign counterintelligence responsibilities but was renamed the National Security Division.
Kelley’s most significant management innovation was shifting the FBI’s longstanding investigative focus from “quantity” to “quality,” directing each field office to set priorities based on the most important threats in its territory and to concentrate their resources on those issues.
And what were those threats? During the 1970s, domestic terrorism and foreign intrigue remained key concerns, as the radical unrest of the 1960s had spilled into the next decade and the Cold War was still raging. The FBI had its hands full with homegrown terrorist groups like the Symbionese Liberation Army—which wanted to lead a violent revolution against the U.S. government and kidnapped newspaper heiress Patty Hearst to help its cause—and the Weather Underground, which conducted a campaign of bombings that targeted everything from police stations to the Pentagon. And spy cases still abounded—from the “Falcon and the Snowman” investigation that uncovered two former altar boys from wealthy families selling secrets to the Soviets…to “Operation Lemon-Aid,” where the FBI used a double agent to unmask Soviet diplomats working as KGB spies.
Organized crime was certainly nothing new in America. The Italian imported “La Cosa Nostra”—literally translated as “this thing of ours”—had come to the nation’s attention in 1890, when the head of the New Orleans police department was murdered execution-style by Italian and Sicilian immigrants. In the 1930s, Charles “Lucky” Luciano had set up the modern-day La Cosa Nostra, creating the family structure (led by “dons” or “bosses”) and ruling body (“the Commission”) and running the entire operation like a business.
By the 1950s and 1960s, organized crime had become entrenched in many major cities, and the collective national impact was staggering. Mobsters were feeding American vices like gambling and drug use; undermining traditional institutions like labor unions and legitimate industries like construction and trash hauling; sowing fear and violence in communities; corrupting the government through graft, extortion, and intimidation; and costing the nation billions of dollars through lost jobs and tax revenues.
Though somewhat limited in its authorities, the Bureau had begun targeting mobsters early as the 1930s, using a mixture of investigations and intelligence to break up mob rackets. Following revelations at Apalachin, New York, the FBI had stepped up its efforts. By 1970, the FBI had gained some important new tools to go after mobsters—including court-authorized wiretaps, jurisdiction over mob-infiltrated businesses, and the ability to target entire crime families and their leaders instead of just bit players and isolated wise guys.
In the mid-1970s, the FBI began pioneering some tools and strategies of its own. It started turning high-level mobsters into secret informants, breaking the code of silence, or “Omerta,” that had protected top Mafioso for so long. And it began using long-term undercover operations—governed by new guidelines and policies—to penetrate the inner circles of organized crime. The courageous work of undercover agents like Joe Pistone—who almost became a “made” Mafia member while gathering invaluable intelligence as “Donnie Brasco” for nearly six years—and of cooperating witnesses like businessman Lou Peters—whose Cadillac dealership became the basis for a long-term operation that targeted the Bonnano crime family in California—injected new energy into FBI investigations and intelligence work.
Using these strategies and tools, the Bureau started racking up unprecedented successes against organized crime. Beginning in 1975, for example, a case code-named “Unirac” (for union racketeering) broke the mob’s broad stranglehold on the shipping industry, leading to more than 100 convictions. In a two-part operation launched in 1978, the FBI struck a major blow against organized crime leadership in Cleveland, Milwaukee, Chicago, Kansas City, and Las Vegas through an investigation that uncovered the mob’s corrupt influence in Las Vegas and in the Teamsters Union. And in the 1980s, the groundbreaking “Commission” case led to the convictions of the heads of the five Mafia families in New York City—Bonnano, Colombo, Gambino, Genovese, and Lucchese.
From 1981 to 1987 alone, more than 1,000 Mafia members and associates were convicted following investigations by the FBI and its partners, decimating the hierarchies of crime families in New York City, Boston, Cleveland, Denver, Kansas City, Milwaukee, St. Louis, and the state of New Jersey. The Bureau also disrupted the activities of other organized criminal groups, tackling outlaw motorcycle gangs like Hells Angels and various Asian criminal enterprises that were beginning to take root in America.
At the same time, the FBI was tackling white-collar crime in a more systematic, comprehensive way.
The term “white-collar criminal” had been coined in 1939 by an American sociologist named Edwin Sutherland; a decade later, he defined a white-collar crime as one “committed by a person of respectability and high social status in the course of his occupation.”
From the days of Charles Ponzi—whose bogus investment scheme in 1919 has been replicated thousands of times since—white-collar crime has evolved into a significant national threat. Over time, more and more Americans have traded their factory and farm jobs for a seat in corporate America; by the beginning of the 21st century, some 60 percent of all workers had white-collar jobs, up from 17 percent a century earlier. White-collar crimes today include everything from anti-trust violations to bank fraud, from embezzlement to environmental crimes, from insider stock trades to health care fraud, from public corruption to property and mortgage scams. These crimes siphon billions of dollars from the pockets of the American people, hurt the economy by undercutting consumer confidence and legitimate commerce, and threaten the very health of our democracy.
Among white-collar crimes, public corruption remains the most insidious. Watergate had opened the nation’s eyes to the seriousness of crime in government, and the FBI became convinced that it must be a leader in addressing the problem. Using many of the same tools as in its battle against organized crime, including large-scale undercover operations, it began working to root out crookedness in government.
One major undercover operation, code-named “Abscam,” led to the convictions of six sitting members of the U.S. Congress and several other elected officials in the early 1980s. “Operation Greylord” put 92 crooked judges, lawyers, policemen, court officers, and others behind bars in the mid-1980s. The “Brilab” (Bribery/Labor) investigation begun in Los Angeles in 1979 revealed how the Mafia was bribing government officials to award lucrative insurance contracts, and a major case called “Illwind,” culminating in 1988, unveiled corruption in defense procurement.
Other kinds of white-collar crime began to mushroom in the 1980s. As the United States faced a financial crisis with the failures of savings and loan associations during the 1980s, for example, the FBI uncovered many instances of fraud that lay behind many of those failures. In the coming years, frauds involving health care, telemarketing, insurance, and stocks would become major crime problems.
All during this time period, the FBI also had been expanding its capabilities and technologies and integrating new responsibilities into its work.
In 1978, the same year that Judge William Webster became Director, for instance, the Bureau began using laser technology to detect nearly invisible or “latent” crime scene fingerprints. At the new, modern FBI Academy, the Behavioral Sciences Unit pioneered work in criminal profiling—applying psychological insights to solving violent crimes. In 1984, the National Center for the Analysis of Violent Crime was established to further this research and to provide services to local and state police in identifying suspects and predicting criminal behavior.
In 1982, the FBI was given concurrent jurisdiction with the Drug Enforcement Agency over federal anti-narcotics laws, which led to stronger liaison and division of labor in tackling the growing drug problem in America. That same year, following an explosion of terrorist incidents worldwide, Director Webster made counterterrorism the FBI’s fourth national priority. The Bureau was ready: it had already begun building new partnerships and skills to respond to and prevent both domestic and international terrorist attacks. The first Joint Terrorism Task Force in the nation, for example, had been created with the New York Police Department in 1980 to serve as the front-line defense against terrorism in the city. And in 1983, the Bureau had stood up a specially-trained Hostage Rescue Team to use negotiation and tactical response techniques to save lives during terrorist attacks and other hostage situations.
By this time, Director Webster had left the Bureau—he was asked to serve as the Director of Central Intelligence and head of the CIA in the summer of 1987. He was replaced later that year by another federal judge, William Sessions, who would oversee the Bureau as the Cold War ended and its priorities gave way to the challenges of a multi-polar, globalized world.