Americans who think that the war on terror is making them "safer" will think again when they read the results of an extraordinary and shocking investigation conducted over a six-month period by the Seattle Post-Intelligencer published Wednesday and Thursday.[1]  --  The investigation analyzed "more than a quarter-million cases touched by FBI agents and federal prosecutors before and after 9/11."  --  It showed that because of diversion of resources to the so-called "war on terror," "Thousands of white-collar criminals across the country are no longer being prosecuted in federal court — and in many cases, not at all — leaving a trail of frustrated victims and potentially billions of dollars in fraud and theft losses," Paul Shukovsky and a team of Seattle Post-Intelligencer journalists reported.[1,2,3,4,5]  --  Washington State is particularly exposed, they said....


1.

THE TERRORISM TRADE-OFF

Seattle Post-Intelligencer
April 12, 2007

http://seattlepi.nwsource.com/specials/fbi/index.asp

Thousands of white-collar criminals across the country are no longer being prosecuted in federal court -- and in many cases, not at all -- leaving a trail of frustrated victims and potentially billions of dollars in fraud and theft losses.

It is the untold story of the Bush administration's massive restructuring of the FBI after the terrorism attacks of 9/11.

2.

SEATTLE FBI OFFICE SEVERELY UNDERSTAFFED
By Daniel Lathrop

** The number of criminal cases handled here by the agency is off sharply **

Seattle Post-Intelligencer
April 12, 2007

http://seattlepi.nwsource.com/national/311045_fbistaffing11.html

The FBI field office in Seattle, already stretched thin by anti-terrorism operations, is seriously understaffed compared with others around the country.

To be on par with the national average, Western Washington needs 53 additional special agents, for a total of 186, a Seattle P-I analysis shows.

Seattle, Atlanta, and Detroit each host field offices staffed with fewer special agents per capita than those in other states, despite those cities' significance to commerce, industry and even national security.

While nationwide there are four FBI agents for every 100,000 people, the figure in Washington state is only 2.1 agents, according to the P-I's analysis of data from the Bureau of Justice Statistics.

Discounting large agent concentrations in New York, Washington, D.C., and Virginia, which house national squads, administrators and the FBI Academy, the average rate is three agents per 100,000 residents. >{? The FBI is leaving Washingtonians especially vulnerable, and Congress or the Bush administration should take action to boost the number of agents assigned here, said Washington Attorney General Rob McKenna.

"It's disheartening to hear," he said. "I believe that -- given the large numbers of terrorist targets, our position on an international border, our port issues -- that our state ought to have a disproportionately high number of agents, not a disproportionately low number."

That opinion is shared by Seattle police Chief Gil Kerlikowske.

"I couldn't tell you how strongly I think a lot of local law enforcement officials feel there is a need for more staffing for the bureau here," he said.

Washington's ferry system has been identified as a top target for terrorists, and the state is one of the few places where an al-Qaida terrorist has been captured. This state is also home to the country's biggest manufacturers of commercial aircraft and heavy trucks, the world's biggest software company, Trident nuclear submarines, the Hanford Nuclear Reservation, an Army base, two Air Force bases and Navy home ports for two aircraft carrier battle groups.

Thirty-four states had higher per capita totals than Washington, as does the commonwealth of Puerto Rico, a U.S. dependency without voting representation in Congress or in the electoral college. The tropical island has 151 agents for a population of fewer than 4 million, while Washington has more than 6 million residents but only 133 agents.

Arizona, Alabama, Maryland, Louisiana and Tennessee all have more agents than Washington despite having smaller populations.

Many of the inequities are longstanding, but they have taken on a new importance since the FBI reoriented itself to counterterrorism after 9/11. In the states with fewer agents, the FBI appears to have been less able to continue crime-fighting at historic levels.

In Washington, the number of criminal cases handled by the FBI have precipitously declined: down by half overall and 88 percent in white-collar categories.

In California, which boasts more special agents than any other state per capita and in absolute terms, FBI criminal cases declined 10 percent and convictions declined 58 percent.

The data analyzed by the P-I are from the Census of Federal Law Enforcement released last year and covering staffing as of 2004. They are the most recent data available on the issue. The FBI field office in Seattle has not grown significantly since then.

[GRAPHIC CAPTION: FBI agents per capita]

3.

THE FBI'S TERRORISM TRADE-OFF
By Paul Shukovsky, Tracy Johnson, and Daniel Lathrop

** Focus on national security after 9/11 means that the agency has turned its back on thousands of white-collar crimes **

Seattle Post-Intelligencer
April 12, 2007

http://seattlepi.nwsource.com/national/311046_fbiterror11.html

Thousands of white-collar criminals across the country are no longer being prosecuted in federal court -- and, in many cases, not at all -- leaving a trail of frustrated victims and potentially billions of dollars in fraud and theft losses.

It is the untold story of the Bush administration's massive restructuring of the FBI after the terrorism attacks of 9/11.

Five-and-a-half years later, the White House and the Justice Department have failed to replace at least 2,400 agents transferred to counterterrorism squads, leaving far fewer agents on the trail of identity thieves, con artists, hatemongers and other criminals.

Two successive attorneys general have rejected the FBI's pleas for reinforcements behind closed doors.

While there hasn't been a terrorism strike on American soil since the realignment, few are aware of the hidden cost: a dramatic plunge in FBI investigations and case referrals in many of the crimes that the bureau has traditionally fought, including sophisticated fraud, embezzlement schemes and civil rights violations.

"Politically, this trade-off has been accepted," said Charles Mandigo, a former FBI congressional liaison who retired four years ago as special agent in charge in Seattle. "But do the American people know this trade-off has been made?"

Among the findings of a six-month *Seattle P-I investigation*, analyzing more than a quarter-million cases touched by FBI agents and federal prosecutors before and after 9/11:

* Overall, the number of criminal cases investigated by the FBI nationally has steadily declined. In 2005, the bureau brought slightly more than 20,000 cases to federal prosecutors, compared with about 31,000 in 2000 -- a 34 percent drop.

* White-collar crime investigations by the bureau have plummeted in recent years. In 2005, the FBI sent prosecutors 3,500 cases -- a fraction of the more than 10,000 cases assigned to agents in 2000.

In Western Washington, the drop has been even more dramatic. Records show that the FBI sent 28 white-collar cases to prosecutors in 2005, down 90 percent from five years earlier.

* Civil rights investigations, which include hate crimes and police abuse, have continued a steady decline since the late 1990s. FBI agents pursued 65 percent fewer cases in 2005 than they did in 2000.

* Already hit hard by the shift of agents to terrorism duties, Washington state's FBI offices suffer from staffing levels that are significantly below the national average.

While other federal agencies have stepped in to pick up more of the load in drug enforcement, and the FBI has worked to keep agents on Indian reservations, the gaps created by the Bush administration's war on terrorism are troubling to criminal justice experts, police chiefs -- even many current and former FBI officials and agents.

"There's a niche of fraudsters that are floating around unprosecuted," said one recently retired top FBI official, who spoke on condition of anonymity. "They are not going to jail. There is no law enforcement solution in sight."

In most cases, local law enforcement agencies haven't been able to take up the slack.

Seattle police Chief Gil Kerlikowske said his department isn't as equipped to handle complex white-collar investigations -- particularly when officers must also join anti-terrorism efforts and when federal funding for local police departments has shrunk.

Whether the solution is to hire more FBI agents or shift some away from the counterterrorism effort, he said, more resources should be devoted to solving white-collar crime.

"This is like the perfect storm," Kerlikowske said. "It's now five years later. We should be rethinking our priorities."

A solution can't come soon enough for a growing number of discouraged fraud victims: A 75-year-old Issaquah woman who was allegedly swindled out of more than $1 million. A cancer patient whose identity was stolen from a Seattle hospital. People who fell victim to a nationwide investment scam worth about $70 million.

They all sought the FBI's help. They got little or none.

"As far as I'm concerned, the FBI has no interest in protecting people from these kinds of crimes," said Lloyd Martindale Jr., a Bellingham man who put $500,000 into an investment con and is still fighting to get some of it back. "They were not responsive to this at all."

If the FBI had continued investigating financial crimes at the same rate as it had before the World Trade Center came down, about 2,000 more white-collar criminals would be behind bars, according to the P-I analysis, which was based on Justice Department data from 1996 through June 2006. Since 9/11, the number of white-collar convictions in federal courts has dropped about 30 percent.

White-collar crimes often affect the people least able to afford it -- lower-income and elderly people, according to Peter Henning, a former Justice prosecutor who teaches law at Wayne State University in Detroit. "If you keep it small, and act quickly and get out of the jurisdiction, you can avoid being prosecuted," he said. "Scam artists know that."

Large numbers of FBI agents also were transferred out of violent-crime programs because bureau officials knew that local police -- who have overlapping jurisdiction in violent crimes -- would have to help.

The retired FBI official said the Bush administration is forcing the bureau to "cannibalize" its traditional crime-fighting units in the name of fighting terrorism.

"The administration is starving the criminal program," the former official said.

[GRAPHIC CAPTION: Cases and convictions] 'FAIRLY AWFUL SITUATION'

Margarita MacDonald, a 75-year-old widow who has Parkinson's disease, may never get back more than $1 million from a man who helped her with household tasks and then allegedly betrayed her trust.

She was nearly deaf, all alone and living in Canada when he befriended her. He began helping her with chores and errands in exchange for room and board. He won her trust and persuaded her to move to Issaquah with him.

The man told her that he had her best interests at heart, but he began manipulating her, persuading her to sign documents and threatening that he wouldn't bring her food or medicine if she didn't do what he wanted, MacDonald stated in court documents.

He gradually stole about $1 million from her, buying furniture, electronics, jewelry -- even vacations to Banff, Alberta, and Hawaii, she wrote.

Larry Gold, a lawyer in Vancouver, B.C., who represented her, called the Seattle office of the FBI in January 2005. The duty officer seemed interested and told him to put the information in writing, he said. "It was a fairly awful situation, and I thought they might be interested in it," Gold said. "What can I say? They weren't."

Frustrated, Gold sought help from Issaquah police, but Lynnwood attorney John Tollefsen took over the case and made getting MacDonald's money back, not prosecution, his main priority. He is still fighting to help MacDonald get back her savings.

A judge ordered the man to pay MacDonald more than $1.4 million last year. The man filed for bankruptcy. He hasn't been charged with a crime.

'DEAD ON ARRIVAL'

Tensions were growing inside Robert Mueller's inner circle. In the months after 9/11, when the first waves of agents were funneled into counterterrorism, the FBI director was made aware of the consequences to come.

Without a major influx of new agents, there was no way to maintain the bureau's grip on a long list of traditional crimes, particularly time-consuming fraud investigations.

Mueller asked for help from two attorneys general -- John Ashcroft and his successor, Alberto Gonzales -- only to be rebuffed each time.

"We were told to do more with less," said David Szady, a former FBI assistant director who stepped down last year as head of counterintelligence.

"There was always discussion on backfilling," Szady said. "Always the push that we need to ask for more bodies."

[INSET CAPTION: Special agents]

Dale Watson, who left in 2002 as the FBI's executive assistant director over counterterrorism programs, also blames the White House Office of Management and Budget and the Justice Department for failing to heed the warnings.

"The budget should be backfilled with additional agents," Watson said. "We've got to do this. But you could request 2,000 agents for white collar, and it would never see the light of day at OMB."

By the time the bureau started putting together its fiscal 2007 budget in mid-2005, "we realized we were going to have to pull out of some areas -- bank fraud, investment fraud, ID theft -- cases that protect the financial infrastructure of the country," the retired top FBI official said.

Also in 2005, the FBI sent a five-year, strategic plan to the Justice Department that Szady called "the director's attempt to get this agency where it needed to be, including a robust criminal footprint. I know for a fact that the Justice Department beat that down. It was dead on arrival."

A report in September 2005 by the department's inspector general asserted that in addition to the 1,143 agents transferred away from traditional crime programs, the FBI used 1,279 agents on counterterrorism work, even though they were on the books as criminal-program agents. The inspector general concluded that the FBI "reduced its investigative efforts related to traditional crimes by more than 2,400 agents."

More recently, scaled-back staffing requests weren't granted. In fiscal 2006, the bureau sought 250 to 350 new agents. It was given money for fewer than 75, a former official said. Over the past eight years, the ranks of FBI agents have increased, from about 11,000 to 12,575, and virtually all have been assigned to anti-terrorism duties, records show.

[GRAPHIC CAPTION: Breakdown of cases nationwide]

Officially, the Justice Department and the Office of Management and Budget assert that traditional criminal enforcement by the FBI hasn't suffered in the wake of 9/11. They say federal law enforcement agencies are working more efficiently to compensate for the continuing emphasis on homeland security.

"The administration strongly disagrees that the FBI has been anything less than effective in the years since 9/11 in combating domestic crime issues," said OMB spokesman Sean Kevelighan. "We have worked to achieve a balance between the FBI's homeland security and criminal investigative missions."

"We'll just abide by what the president's budget is," said FBI Assistant Director Chip Burrus. "We work a lot smarter than we have in the past."

Mueller, Gonzales, and Ashcroft declined to be interviewed for this story.

Burrus acknowledges that the bureau has reduced its efforts to fight fraud. He likened the FBI's current fraud-enforcement policies -- in which losses below $150,000 have little chance of being addressed -- to "triage." Even cases with losses approaching $500,000 are much less likely to be accepted for investigation than before 9/11, he said.

There is "no question" that America's financial losses from frauds below $150,000 amount to billions a year, Burrus said. The top security official for a major American bank agreed, saying unprosecuted fraud losses easily total "multibillions."

Citing the new policy, an informed source said the Seattle FBI office would have rejected the MacDonald case, despite the million-dollar loss, because she was the only victim.

Experts say American consumers are paying for banks' and businesses' fraud losses; they are passed on through higher interest rates, bank fees and retail prices.

Enforcing civil rights laws has been a core FBI mission since the Johnson presidency, but after 9/11 those efforts declined substantially. The number of cases brought by the FBI to federal prosecutors for any reason -- from getting subpoenas to seeking charges -- fell 65 percent between 2000 and 2005, the P-I found.

[GRAPHIC CAPTION: Breakdown of cases in Western Washington]

While the FBI disputes the degree of the decline, the bureau's own figures show drops in cases investigated, indictments and convictions -- particularly hate crimes. Civil rights cases against local police -- including allegations of brutality and misuse of power -- also dropped following 9/11, but FBI data show a rebound in indictments and convictions since 2005.

There were 24 percent fewer agents working on civil rights cases in 2004 than in 2000, according to the 2005 inspector general's report.

Sarah Dunne, legal director of the American Civil Liberties Union of Washington, said the decline in civil rights investigations means "people's rights are not protected."

"It's been sort of sad to see," said Dunne, a former trial attorney in the Justice Department's Civil Rights Division. "What type of message is the Bush administration sending if they say this is not a significant concern?"

Increasing counterterrorism and security efforts may actually lead to more situations in which police are violating people's civil rights, said James Bible, president of the Seattle-King County branch of the National Association for the Advancement of Colored People.

"We're essentially put in a place that we're sacrificing civil rights in the name of security," Bible said. "It would seem that, as we build one, we necessarily have to build the other."

John McKay, the former U.S. attorney for Western Washington, said he is surprised that the FBI's post-9/11 trade-offs weren't addressed years ago.

"I can't figure out for the life of me why, with the war on terror, asking for more FBI agents isn't a priority," said McKay, who was one of eight U.S. attorneys fired last year by the Bush administration. "If the president of the United States, a law-enforcement Republican, is not going to propose an increase in FBI agents -- what Democrat will? There's plenty of blame to go around."

One leading Democrat, Sen. Joe Biden of Delaware, introduced legislation in February that aims to address the problem. The bill calls for hiring 1,000 agents at a cost of $160 million a year.

"There's no doubt that fighting terrorism should be a top priority for the FBI, but we can't forget about the risk to our neighborhoods from everyday crime," Biden told the P-I.

"To add insult to injury, President Bush hasn't replaced the FBI agents who transitioned over from working criminal cases to counterterrorism," he said. "The FBI is at a breaking point. ... They're overworked and overburdened and, frankly, they need some relief."

'RISK-FREE CRIME'

Eric Drew was near death when someone stole his identity. Weak and in intense pain from leukemia and chemotherapy, he was about to have a bone-marrow transplant at a Seattle hospital in 2003 when collectors began calling, demanding payments on credit-card accounts he'd never opened.

He got little response from Seattle police and called the FBI. There, he said, a duty officer told him the FBI was focused on national security and didn't deal with fraud anymore.

"Basically, I was in the hospital dying, and nobody would lift a finger or even take a statement from me," he said.

Drew was furious. After his transplant, though sick and weak, he tracked down the culprit himself. He got the Seattle addresses where some of the fraudulently purchased merchandise had been shipped, and he found surveillance footage from a hardware store where some had been bought.

A local TV station picked up on his cause and aired footage of the thief using a credit card opened in Drew's name. Tips flooded in to Seattle police, and the guy turned himself in, Drew said.

The culprit was Richard Gibson, a hospital worker at Seattle Cancer Care Alliance who had had regular contact with Drew during his hospital stay.

Drew, 39, said the FBI finally took the case -- but only after it became a public spectacle that a dying man couldn't get law enforcement to help him. Once the FBI took over, Gibson was swiftly prosecuted.

Drew, who is now cancer-free after a 2004 stem-cell transplant, believes that the FBI is the best agency to handle most identity-theft cases because they often cross state lines.

But for now, he said, the message from the FBI and other law-enforcement agencies is unsettling: "It's a risk-free crime. Go out and steal identities. No one will come after you."

CRIME SQUADS TAPPED

In the late 1990s, the FBI in Seattle had at least 16 agents working on two white-collar crime squads.

"It was like one-stop shopping," said Jason Moulton, a former FBI official who ran one of those squads. "SPD was there, the IGs were there, the Department of Financial Institutions was there. IRS was there. They all had desks in the space. We were running (wiretaps), doing complex cases."

All of the agents "were extremely busy," and there were still plenty of cases they couldn't get to, Moulton recalled.

By last summer, the effect of shifting agents to anti-terrorism squads was clear: The FBI's white-collar effort had been whittled down to four agents statewide. Hard-pressed agents are now routinely urging banks or lawyers representing victims to do most of the investigating themselves. Even then, the FBI won't necessarily pursue criminal charges.

A few years ago, a Shoreline couple with a home-repair business allegedly used phony financial information to get Columbia Bank to loan them more than $2 million and then stopped paying it back.

The bank sued, and a King County Superior Court judge ordered the couple to pay more than $1.6 million. The couple moved to Colorado and declared bankruptcy. There, a judge found that the man -- and to a lesser extent, the woman -- purposely deceived the bank.

A dogged Columbia Bank investigator put the case together in a nice package to hand off to the FBI for possible criminal charges, according to an FBI agent. The bureau, however, declined to take the case.

The FBI also declines to investigate most cases of an increasingly common financial crime that can leave victims financially and emotionally drained: identity theft.

"When cases come in that you have to decline, you are supposed to find a home for them," an FBI agent in Seattle said. "But you've got a lot of balls in the air. You have so much you are trying to do with so little resources."

Seattle police say they have been investigating more white-collar crime cases in recent years -- partly because the FBI is handling fewer, and partly owing to an explosion in identity theft and Internet-related crimes.

"We're now really having to make hard decisions about which cases will get worked, and when," said Lt. Mike Edwards, who supervises the Fraud, Forgery and Financial Exploitation Unit.

King County sheriff's detectives have also struggled to investigate an increasing number of fraud cases without FBI help, Sgt. John Urquhart said.

There are many reasons why federal agents are better suited than the locals to conduct complex fraud investigations. The FBI has agents around the nation and the world to run down leads. Even if a local detective could get her chief to approve an investigative trip across country, she has no jurisdiction in another state.

If agents need to subpoena business records, they simply call a federal prosecutor, who can get an order easily. That's not true in many state jurisdictions, including Washington, where it can take a couple of days for the prosecutor to prepare documentation and present it to a judge for a subpoena. Federal agents can obtain warrants for wiretaps; local officers in Washington cannot, except in rare circumstances. Locals need a court order for a body wire; federal agents don't. FBI agents can record telephone calls if one party consents without going to a judge; locals can't.

[GRAPHIC CAPTION: Crime vs. punishment]

And federal sentences for white-collar crimes are generally tougher than those meted out in state courts. In Washington, for example, the average federal money-launderer was sentenced to 35 months in prison in 2006, while the average state court sentence was probation.

The difference in penalties means that not only are fewer people getting prosecuted for white-collar crimes, they are also serving less time behind bars. And just when coordination among state, local and federal law enforcement in Washington and other states needed to be at its best, there were signs of major breakdowns.

In 2001, the FBI office in Seattle launched the King County Fraud Investigation Team, which included investigators from the Seattle and Bellevue police departments, the King County Sheriff's Office and the Secret Service. Less than two years later, the bureau dissolved it, according to a Seattle-area fraud investigator.

About the same time, FBI supervisors in Seattle also stopped attending monthly meetings where they talked about fighting fraud with executives from major retailers, such as Nordstrom and Costco.

Said one agent: "What did we bring to the table? We got out of that game. Why go and give them a no?"

But the bureau's new mantra of doing more with less seems to be paying off in the handling of bank robberies. The five FBI agents in Seattle that had been assigned to bank heists have been reduced to one, but there are no complaints of languishing cases. The conviction rate last year was a lofty 85 percent.

Special Agent Larry Carr now works with local detectives to coordinate the investigations and determine whether defendants will be prosecuted in state or federal court. Increasingly, the cases are going to King County Superior Court.

"It is a testament to doing a lot more with a lot less," Carr said.

SCAM ARTISTS UNPUNISHED?

A few years ago, more than 1,000 people across the country invested roughly $70 million in a scam known as Resource Development International, led by two men who set up headquarters in Tacoma.

Though victims in Washington urged the FBI to investigate, the two men didn't face federal charges -- or even a criminal case here in Washington, where they ran the scam.

The district attorney's office in Santa Clara County, Calif., ended up taking on the case after an elderly victim in the San Jose area came forward. Deputy District Attorney Paul Colin prosecuted the kingpins, John and David Edwards, a father-and-son team who are now serving 27-year sentences in state prison, and two other men who had sold the investments to people in California.

But dozens of others were involved in the scam -- six to eight people who worked in the Edwardses' office, and 50 to 100 people who sold the phony investments across the country, Colin said. Most haven't faced charges. That includes nine Washington men who, according to the state Department of Financial Institutions, sold more than $6.6 million worth of the sham investments to 53 people in Washington.

"If the feds had taken this on, it might have been caught sooner, and more of the people who assisted the Edwardses might have been brought to justice," Colin said. "These scams happen every day to the rich and the poor, and they should be a priority of law enforcement -- particularly at the federal level."

After trying several times, Lloyd Martindale Jr., one of the Washington victims, finally got an FBI agent to meet with him in August 2002. The agent showed up late, explaining that he'd been out late dealing with terrorist activities and border issues, he said.

"He wanted my evidence and a description of my role," he said. "It sounded like the FBI was going to take this thing."

[PHOTO CAPTION: Tacoma retiree Dick Mansfield put money into an investment that promised 4 percent interest each month and that turned out to be a sham. He told a special agent in the FBI's Tacoma office of investing $175,000 from his state pension. "She did listen to me," he said, "but nothing ever came of it."]

Retired Tacoma schoolteacher Dick Mansfield, who said he was persuaded by one of the scam's "slick operators" to invest $175,000 from his state pension, also finally got a special agent at the FBI's Tacoma office to hear his story.

"She did listen to me," he said, "but nothing ever came of it."

Gina Davis, supervisory special agent of the Tacoma office, said they didn't act because an FBI office in California was already investigating the investment scam. But John Gliatta, supervisory special agent in Fresno, Calif., said their investigation was limited to two men in the Fresno area. One was charged with perjury and sentenced to probation.

Mansfield and Martindale believe that many more people should have been prosecuted, and Mansfield still struggles to explain how devastating it is "to have your future ripped off."

"I feel angry that we don't have a culture that sees the horror of financial theft," he said. "It is horrendous. It is not taken seriously."

WEB LINKS

To learn more about the effects of FBI's post-9/11reorganization:

# The inspector general's report on "The External Effects of the Federal Bureau of Investigation's Reprioritization Efforts": usdoj.gov/oig/reports/FBI/a0537/index.htm

# The IG's report on "Internal Effects of the Federal Bureau of Investigation's Reprioritization": usdoj.gov/oig/reports/FBI/a0439/index.htm

# General Accounting Office reports on the "FBI Transformation": gao.gov/new.items/d041036.pdf (PDF)

P-I reporter Paul Shukovsky can be reached at 206-448-8072 or This email address is being protected from spambots. You need JavaScript enabled to view it.. P-I reporter Tracy Johnson can be reached at 206-467-5942 or This email address is being protected from spambots. You need JavaScript enabled to view it..

4.

THE SUCCESS OF COUNTERTERROSIM EFFORTS DIFFICULT TO EVALUATE
By Paul Shukovsky

** But FBI agents say they are tra Seattle Post-Intelligencer
April 11, 2007

http://seattlepi.nwsource.com/national/311085_terrorside11.html

There have been documented successes, some embarrassing failures, high-profile arrests and one costly public apology.

There also has been no second terrorism strike on American soil.

But assessing whether the FBI has actively prevented such a tragedy is virtually impossible. Counterterrorism operations across the country are so shrouded in secrecy that the bureau won't even say how many agents are assigned to them.

[GRAPHIC CAPTION: Special agents]

Some "disruptions" -- FBI jargon for interrupted suspected terrorist activity -- are never disclosed at all.

One thing is clear, according to special agents who spoke to the Seattle P-I on condition of anonymity: They are exhaustively tracking leads.

Joint Terrorism Task Force squads, comprising investigators from the FBI, other federal agencies and local law enforcement, are the foot soldiers in the war on terrorism's domestic front. While every agent carries a caseload, they are also constantly "shagging down leads" from a variety of sources, including the National Security Agency's controversial wiretap program.

Field agents grumble that FBI headquarters is constantly issuing directives, trumping the street wisdom of local agents. Said one: "We don't have the time to respond to the trends we recognize because we're too busy responding to the trend du jour."

The agent suggested that efforts to prevent another terrorism attack are sometimes excessive, especially when it comes to electronic surveillance.

"A lot of monitoring is going on that is not warranted," the agent said.

The FBI's track record in the Northwest, echoing the country as a whole, is mixed.

One of the biggest triumphs came well before the terrorist attacks, in 1999. U.S. border guards in Port Angeles arrested a nerve-racked Algerian, Ahmed Ressam, and found a trunkload of explosives in his rented car. Ressam, authorities learned later, was part of a plot to bomb Los Angeles International Airport on the eve of the millennium. After 9/11, Ressam provided the FBI with a wealth of information about the terrorist underworld.

In 2002, the FBI office in Seattle arrested James Ujaama, breaking up a plan to start a terrorist training camp in Bly, Ore., with links to al-Qaida. He could have been sentenced to as much as 25 years in prison for helping the Taliban with training, computing services and facilities, but instead was sentenced to two years behind bars in return for his ongoing cooperation with investigators.

Local authorities credit increased vigilance for possibly thwarting a strike in 2004 on Washington's ferry system -- deemed a top terrorist target today. Coast Guard intelligence officers reported that "two Middle Eastern males were observed studying the schematic" of one of the ferries during a cruise and abruptly walked away when an employee approached.

A license plate check revealed that the pair's vehicle was also suspicious -- rented by someone who had given a fictitious business address. No arrests were made, but the episode was one of several deemed "highly likely" to be "preoperation planning" for an attack.

State and federal agencies responded by taking steps to improve ferry security -- introducing bomb-sniffing dogs, barring unaccompanied freight and adding surveillance equipment. State Patrol troopers began riding the ferries, and heavily armed Coast Guard SWAT boats began accompanying vessels.

The case of Rainier Valley barber Ruben Shumpert -- also known as Amir Abdul Muhaimin -- is less clear.

In November 2004, the terrorism task force raided a dozen locations around Seattle, arresting Shumpert and 13 others. Task force agents branded the Crescent Cut Barbershop "an anti-American training ground for Muslims."

Shumpert, an ex-convict who converted to Islam, was never charged with a terrorism-related crime. He was released in November 2006 on personal recognizance pending sentencing on weapons and counterfeiting charges, only to flee to Somalia.

Others arrested were African immigrants from Islamic countries accused of immigration fraud, or American Muslims accused of bank fraud. None faced terrorism charges.

The raided barber shop was frequented by Abrahim Sheik Mohamed, the imam of a local mosque. Federal agents asserted that he raised money for the Islamic holy war against the West. But he was not charged with a crime -- just with lying on his immigration papers.

At an immigration hearing, which has looser standards of evidence and proof than criminal courts, FBI agent David Rubincam testified that he heard from four confidential sources that Mohamed once belonged to al-Itihaad a-Islamiya, a Somali group that the State Department has labeled a terrorist organization.

A federally protected witness with a history of multiple felonies told the immigration judge that he heard the imam preach in a "derogatory" fashion about a nearby Jewish neighborhood and synagogue. "That one day we'd have to take the neighborhood and if it was by force -- so be it, God willing."

Mohamed was deported.

The biggest FBI blunder in the Northwest to come to light was the case of Oregon lawyer Brandon Mayfield. Agents arrested the Muslim convert after the FBI incorrectly matched him to a fingerprint lifted from a bag of explosive detonators linked to the March 2004 train bombings in Madrid, Spain, that killed 191 people.

In settling the case later, the government apologized to Mayfield and agreed to pay $2 million in damages.

"I look forward to the day the Patriot Act is declared unconstitutional, and all citizens are safe from unwarranted arrest and searches by the federal government," Mayfield said after the settlement was announced.

Internationally, the three main legs of America's intelligence community -- the FBI, the CIA and the military -- have worked together to capture most of the 9/11 terrorists, with Osama bin Laden a notable exception.

Nationally, the bureau has had some limited success: the dismantling of a massive cigarette-smuggling ring stretching from North Carolina to British Columbia that provided money to Palestinian terrorists; the six young Yemeni Americans from the Buffalo, N.Y., area who were arrested and charged with providing material support to terrorists.

Over the past 5 1/2 years, there've been plenty of alerts -- but no acts of terrorism. Are we lucky, or are our counterterrorism efforts paying off?

Asked a former FBI agent: "How do you measure that deterrence factor?"

P-I reporter Tracy Johnson contributed to this report. P-I reporter Paul Shukovsky can be reached at 206-448-8072 or This email address is being protected from spambots. You need JavaScript enabled to view it..

5.

FBI BLASTED FOR CUTS IN CRIME FIGHTING
By Paul Shukovsky, Tracy Johnson, and Daniel Lathrop

** Democrats express outrage over transfer of agents to terrorism focus **

Seattle Post-Intelligencer
April 12, 2007

http://seattlepi.nwsource.com/national/311275_fbiterror12.html

Leading Democrats in Congress blasted the Bush administration on Wednesday for raiding the FBI's criminal program in the wake of 9/11 -- authorizing huge staffing cuts there that caused thousands of cases to fall through cracks nationwide.

Sen. Patty Murray, D-Wash., expressed outrage over the wholesale transfer of FBI agents to counterterrorism operations without any plan in place to pick up the slack.

"Americans expect us to do both -- both fighting terrorism and the domestic criminal priorities that have always been the mission of the FBI," Murray said. "We can't expect them to do it with no increase in resources, and that's what the Bush administration has done.

"Their budgets haven't increased to take on the new mission of terrorism while continuing to do criminal work at the same level."

Sen. Joe Biden, D-Del., agreed, saying the FBI "cannot abandon its traditional crime-fighting obligations."

The FBI's ability to investigate a number of crimes, ranging from fraud to hate crimes, has been strained by a continuing shift of agents to duties aimed at preventing another terrorist attack on American soil, the Seattle P-I reported Wednesday.

There have been sharp drops in the number of traditional criminal cases being brought to federal prosecutors across the country, according to a P-I analysis of more than a quarter-million criminal cases. White-collar and civil rights investigations showed some of the biggest declines since 2000.

The story detailed how the administration responded to 9/11 by shifting more than 2,400 criminal agents to counterterrorism without backfilling criminal squads. Successive attorneys general -- John Ashcroft and Alberto Gonzales -- rejected FBI appeals for more agents.

Biden, a Senate Judiciary Committee member, has introduced legislation to hire 1,000 FBI agents for criminal programs and to restore federal aid to local and state law enforcement agencies. Biden was unable to win passage of the bill in the previous Republican-led Congress.

Murray said Wednesday that she will support Biden's legislation. "If we are going to require the FBI to do the terrorism-related issues," she said, "we have to give them the resources to do the rest."

Pennsylvania Sen. Arlen Specter, the committee's ranking Republican, did not return calls seeking comment.

Washington Attorney General Rob McKenna, the state's highest-ranking Republican, said he is "very concerned that fewer financial crimes are being investigated by the FBI, in part because Washington ranks in the top 10 states for identity theft."

"The only real solution," he said, "is for the federal government to fill vacancies in the U.S. Attorney's Office and to increase staffing in the FBI's Seattle office. If you don't have the bodies to do the work, the work won't be done."

McKenna said he plans to bring up the issue of FBI resources next week when he travels to Washington, D.C., to meet with the state's congressional delegation.

Seattle police Chief Gil Kerlikowske suggested that the Justice Department could go after white-collar criminals by training and funding local police detectives to help investigate them.

Rep. Jay Inslee, a former prosecutor, said he blames the shortfall of resources for the FBI on vast amounts of money spent on the Iraq war. The Seattle-area Democrat promised to work to get the agents needed to return the FBI's criminal division to pre-9/11 levels.

"We've got to insist on restoring those cuts," he said. "One of the ways we can do that is redirecting the $85 billion going into the sands of Iraq."

Rep. Jim McDermott, D-Seattle, said he is "angry over what the P-I uncovered," particularly major declines in FBI enforcement of a wide range of financial crimes, including mail, bank, insurance and wire fraud.

"You don't make America safer by weakening criminal divisions in the FBI, the front line of defense inside America, to bolster anti-terrorism efforts," McDermott said. "By transferring agents and not replacing them, the administration has opened new holes in our defenses, and that is a patently absurd strategy."

Republican Rep. Dave Reichert said the FBI needs to be staffed at a level that allows it to do its traditional job in white-collar crime. "They need additional resources," the former King County sheriff said.

The reallocation of agents following 9/11, however, forced the FBI to make long-needed changes, such as allowing other law enforcement agencies to take bigger roles in investigating bank robberies, drug trafficking and firearms violations, Reichert said.

It's no surprise to Annie McGuire -- chief executive of Fraud Aid, a non-profit victims' advocacy organization -- that the FBI doesn't have enough agents assigned to white-collar crime.

"Without the threat of the FBI, domestic fraud rings are running amok," she said. "The general feeling out there among people who have been defrauded is that nobody is going to do anything."