By Maria Henson

WASHINGTON - Rep. Bill Alexander, D-Ark., secured a commitment Wednesday from Attorney General Dick Thornburgh to look into allegations about a lack of action by the U.S. Attorney's office at Fort Smith regarding a drug probe in Mena.

Alexander discussed with Thornburgh the testimony of a former Internal Revenue Service agent who helped investigate money laundering and international drug smuggling out of the Mena Airport.

He passed along the written testimony to Thornburgh and received "strong assurance" from the attorney general that the matter would be examined further, according to Alexander's press secretary.

The former IRS agent, William Duncan, testified before a House subcommittee in July about how IRS attorneys allegedly pressured him to withhold information from Congress. Duncan alleged that there was a lack of action in the U.S. Attorney General's office in Fort Smith in the drug trafficking case.

Duncan was investigating the activities of the late Barry Seal, a convicted drug smuggler turned government informant. Seal operated out of the Mena Airport from 1984 until he was slain in February 1986 at Baton Rouge, La. The activities of Seal have been the subject of numerous federal and state investigations, none of which has resulted in criminal indictments. Alexander has said that Duncan was under orders from then-Attorney General Ed Meese's office in Washington to withhold information.

MISCONDUCT BY SENIOR MANAGERS IN THE INTERNAL REVENUE SERVICE

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Twentieth Report by the Committee on Government Operations, House of Representatives, One Hundred First Congress, Second Session, October 4, 1990.

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Washington : U.S. G.P.O. : For sale by the U.S. G.P.O., Supt. of Docs., Congressional Sales Office, 1990.

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GOV DOC # Y 1.1/8:101-800.

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The "senior-level Justice Department official" mentioned in this report who was alleged to have received a $400,000 bribe from Adler Berriman "Barry" Seal - the Louisiana drug smuggler who operated out of the Intermountain Regional Airport in Mena, Arkansas between 1982 and 1986 - was U.S. Attorney General Edwin Meese III (See former IRS Criminal Investigator William C. Duncan's letter to Congressman Doug Barnard, Jr., October 7, 1991, page 1, subsequently reproduced on page 309 of Continued Investigation of Senior-Level Employee Misconduct and Mismanagement at the Internal Revenue Service: Hearing before the Commerce, Consumer, and Monetary Affairs Subcommittee of the Committee on Government Operations, House of Representatives, One Hundred Second Congress, First Session, July 24, 1991, U.S. Government Printing Office, 1992).

The following excerpts are from pp. iii, 117-131.

LETTER OF TRANSMITTAL

_________

HOUSE OF REPRESENTATIVES,

Hon. THOMAS S. FOLEY,

DEAR MR. SPEAKER: By direction of the Committee on Govern- ment Operations, I submit herewith the committee's twentieth report to the 101st Congress. The committee's report is based on a study made by its Commerce, Consumer, and Monetary Affairs Subcommittee.

JOHN CONYERS, Jr., Chairman.

(iii)

2. THE DUNCAN CASE

This case involves a CID special agent from IRS' Little Rock District Office who was assigned to a major narcotics trafficking case in Arkansas. The case illustrates the type of impediments faced by Congress when conducting IRS oversight.

In the opinion of the agent, the narcotics case proceeded much too slowly due to the inaction of the U.S. attorney. Following unfavorable media reports of the case, a House Judiciary subcommittee scheduled hearings on the case and subpoenaed the agent to appear.

According to the agent, while he was being counseled on the parameters of IRC 6103 (Internal Revenue Code section dealing with disclosure of tax information) and Rule 6(e) (Federal Rules of Criminal Procedure section dealing with disclosures) in anticipation of the hearing, IRS Disclosure Litigation attorneys advised him

(1) not to give any personal opinion to the congressional subcommittee, even if asked to do so, on the U.S. attorney's handling of the case; and

(2) although he would be testifying under oath, to deny the existence of an allegation he had heard concerning a bribe of a senior-level Justice Department official. The agent protested to the IRS attorneys about this advice, and eventually threatened not to testify rather than perjure himself. Only then was he advised that he could provide an opinion and accurately answer any question relating to the alleged bribe, if asked.

A question about the alleged bribe was asked at the hearing, and the agent believes he would have perjured himself had he followed the original advice of IRS counsel.

This matter is relevant to the subcommittee's investigation for two reasons:

(1) It illustrates interference on the part of IRS in a congressional inquiry and an attitude of less than full cooperation with the Congress similar to what the subcommittee found during its investigation of IRS misconduct, and

(2) it represents an allegation of misconduct by senior and mid-level IRS officials and the failure of IRS to address it. The following discussion summarizes the facts and circumstances surrounding this case.

In early 1984, CID Special Agent William C. Duncan became involved in a Title 31 money laundering investigation of individuals believed to be associated with and/or doing aircraft modification and repair work for an international narcotics smuggling organization operated by Adler Berriman ("Barry") Seal. Barry Seal allegedly based his drug smuggling operation from 1982 to 1986 at Mena Intermountain Regional Airport, which is located outside of Mena, AR. Special Agent Duncan was an experienced and highly regarded CID agent, and was the IRS/CID representative assigned to a grand jury investigation of this matter opened in the Western Judicial District of Arkansas by U.S. Attorney Asa Hutchinson.

Assisting in the investigation were Thomas Ross, an FBI agent, and Russell Welch, an investigator for the Arkansas State Police. Mr. Duncan was assigned to the case until he transferred to the IRS Southeast Region in Atlanta in March 1987 to assume new duties.

In 1985, Asa Hutchinson resigned his position to pursue other career goals and was replaced by J. Michael Fitzhugh. At some point in the investigation, it became apparent to Special Agent Duncan and Little Rock IRS CID Chief N. Paul Whitmore that U.S. Attorney Fitzhugh was not taking the necessary actions to complete crucial investigative steps, such as subpoenaing and interviewing key witnesses and presenting important information to the grand jury.

Grand jury witnesses complained to the media about the lack of action and indictments on the case, and unfavorable reports on the lack of movement on the case began to appear. One media report suggested that U.S. Attorney Fitzhugh was directed by Washington to close down this investigation.

The House Judiciary Subcommittee on Crime became aware of these complaints and media reports, and scheduled hearings on the matter for early 1988.

Agent Duncan was subpoenaed to testify under oath before the Subcommittee on Crime.

In December 1987, IRS Disclosure Litigation attorney Mary Anne Curtin was assigned to advise Mr. Duncan on the parameters of Title 26, United States Code, section 6103, the Internal Revenue Code (IRC) section that restricts access to tax returns and return information, and Federal Rule of Criminal Procedure 6(e), the grand jury secrecy rule, in anticipation of his subcommittee testimony.

IRS attorney Curtin was assisted by IRS Disclosure Litigation attorney James Beyer. Mr. Duncan discussed the case over the phone with Ms. Curtin and Mr. Beyer on several occasions, and made his first trip to Washington in January 1988 with CID Chief Whitmore to further discuss the case and anticipated testimony.

Special Agent Duncan told Commerce, Consumer, and Monetary Affairs Subcommittee investigators that as Ms. Curtin began to advise him, it was quickly established that IRC 6103 would not be a problem because Mr. Duncan's was a Title 31 money laundering case. Further, Mr. Duncan and Ms. Curtin initially agreed to use the definition of Rule 6(e) that he used during the course of his grand jury investigation. However, it also became apparent to Messrs. Duncan and Whitmore that Ms. Curtin's role went beyond advice on IRC 6103 and Rule 6(e), and encompassed control over the nature, content, and tone of Mr. Duncan's testimony. Messrs.

Duncan and Whitmore allege that during the course of preparing for the Subcommittee on Crime hearing, Ms. Curtin advised Mr. Duncan to answer potential subcommittee questions in a way that would be misleading at best, and would cause Mr. Duncan to perjure himself, at worst. Ms. Curtin denies these charges, and has told subcommittee investigators that Mr. Duncan was not prevented from testifying to any issue, provided that he give the Subcommittee on Crime the basis for his statement.

Important Facts Relating to Attorney's Advice are Disputed: Key facts and circumstances surrounding IRS attorney Curtin's legal advice to Special Agent Duncan are in dispute. The first involves whether Mr. Duncan would be permitted to express his opinion on U.S. Attorney Fitzhugh's handling of the case.

Mr. Duncan told the Commerce, Consumer, and Monetary Affairs Subcommittee investigators he knew the Subcommittee on Crime would question him about U.S. Attorney Fitzhugh's conduct on the investigation. Mr. Duncan had some evidence of money laundering violations yet, in his opinion, Mr. Fitzhugh impeded his progress on the case by not issuing the subpoenas for critical documents he requested and needed to quickly and completely pursue the violations.

According to Mr. Duncan, U.S. Attorney Fitzhugh cited a lack of funds as the reason for not issuing the subpoenas, but CID Chief Whitmore noted during an interview with subcommittee staff that no other CID office reported such a funding problem. Mr. Duncan also told the subcommittee investigators that grand jury witnesses claimed they were not asked key questions in their appearances before the grand jury that the witnesses thought were crucial to the case.

Mr. Duncan wanted to relay to the Subcommittee on Crime his observations and opinions of Mr. Fitzhugh's inaction and ineptness, if asked.

Different accounts exist concerning the advice given by Ms. Curtin with regard to the actions of U.S. Attorney Fitzhugh on this case. Ms. Curtin maintains that she advised Mr. Duncan that it would be best for IRS and him personally if he testified only to "the facts" in the case. However, if Mr. Duncan wished to render a personal opinion on the conduct and progress of the case he could do so provided that he state clearly that it was his personal opinion and give the basis for this opinion.

In a written statement prepared in connection with this Commerce, Consumer, and Monetary Affairs Subcommittee investigation, Ms. Curtin explained that she gave the following advice to Mr. Duncan:

Before the employees [Duncan and Whitmore] came to the National Office in January 1988 to discuss in more detail their potential appearances before the Subcommittee [on Crime], I confirmed with my supervisors the legal parameters of their authorizations and the advice we were going to offer.

As to the legal parameters, the employees would not be authorized to disclose to the Subcommittee on Crime information protected by section 6103 of the Internal Revenue Code; information which would directly or indirectly identify a confidential informant, if any; or information protected by Fed. R. Crim. P. 6(e), as defined by the U.S. Attorney or the Department of Justice. Our best advice to the employees, as to any witnesses, was that they testify truthfully, listen carefully to the questions, answer accurately, and stick to the facts as they know them.

While we maintained a witness' best interests are served by confining his/her answers to the facts as s/he knew them, should either opt to offer his opinions, do so with an appropriate qualification that it was a personal opinion rather than an agency position.

Mr. Beyer told the subcommittee investigators that he witnessed Ms. Curtin advising Mr. Duncan that he should state the facts as he knew them and that if he (Duncan) wished to render an opinion, to be sure to state it as his personal opinion and not an agency position. Ms. Curtin told the subcommittee investigators that her last face-to-face meeting with Mr. Duncan prior to the day of his testimony occurred in early January, and said that she discussed issues relating to his testimony on several occasions over the telephone before Mr. Duncan's February 26 appearance before the Subcommittee on Crime. She denied that she counseled Messrs. Duncan and Whitmore on February 25, 1988 - the day before Duncan's testimony was to be given - or early on February 26 - the day of the hearings. Mr. Beyer also told the subcommittee investigators that his last face-to-face contact with Messrs. Duncan and Whitmore was in early January, and that he had his last telephone contact with Mr. Duncan in mid-February 1988. Mr. Beyer said he did not participate in any preparatory briefings immediately prior to Mr. Duncan's appearance before the Subcommittee on Crime.

Special Agent Duncan's and CID Chief Whitmore's account of these facts and circumstances differ markedly from Ms. Curtin's. According to Mr. Duncan, Ms. Curtin told him during a face-to-face meeting on February 25, 1988 - the day before the hearing - that IRS could not have its agents criticizing the actions of the U.S. attorney, even if asked by Subcommittee on Crime representatives about specific problems on the case. Mr. Duncan testified, under oath, at the Commerce, Consumer, and Monetary Affairs Subcommittee's July 1989 hearings that Ms. Curtin's orders were to testify only that "I would have done it differently."

Mr. Duncan told subcommittee investigators that Ms. Curtin advised him not to give his candid and personal insights into the case, even if asked, and even if he characterized them as strictly his opinion. It was apparent to Mr. Duncan that Ms. Curtin was extremely concerned that IRS could be involved in adverse publicity about the case, and her advice was designed to prohibit any potentially damaging statement from an IRS employee. According to Mr. Duncan's sworn testimony at the July 1989 hearings, after a particularly heated exchange in the final briefing process, Ms. Curtin told him that Bryan Slone, the Assistant to the Commissioner for Legislative Liaison, asked her how the briefing was going.

Ms. Curtin told Mr. Slone that Mr. Duncan was very frustrated with the U.S. attorney and the lack of progress on the case.

Mr. Slone reportedly told Curtin, "Well, Bill is just going to have to get the big picture."

Mr. Duncan interpreted this remark to mean that as far as the Commissioner was concerned, it would be best to do what Ms. Curtin told him to do, and that the Commissioner's office concurred with Ms. Curtin's attempt to limit his testimony. CID Chief Whitmore was present during Ms. Curtin's counseling that day, and concurs completely with Mr. Duncan's account of the advice given by Ms. Curtin. Messrs. Duncan and Whitmore testified under oath to this scenario at the Commerce, Consumer, and Monetary Affairs Subcommittee's July 1989 hearings.

The second major fact in dispute involves Special Agent Duncan's allegation that he was given improper and possibly unlawful advice by IRS attorneys. While reviewing case records in Arkansas in January 1988 in preparation for his testimony, Mr. Duncan received a telephone call from Arkansas State Police investigator Russell Welch.

Investigator Welch told Mr. Duncan that he had received a phone call from a former Deputy Sheriff concerning an alleged bribe of about $400,000 from the Barry Seal organization to a high-level Justice Department official.

The circumstances of this alleged bribe was that in return for the money the Justice official would see that the case against Seal would die a slow death. Thus, U.S. Attorney Fitzhugh's inaction on the case could be explained by the alleged bribe. Soon after he received this information, Mr. Duncan telephoned Ms. Curtin to discuss it.

Mr. Duncan has stated to investigators from the subcommittee and under oath at the subcommittee's hearings, that as a trained and experienced CID special agent, he knew that this allegation about a bribe to the Justice official was "incredible," and that he never represented this information as fact, substantiated, or corroborated. He only represented it to Ms. Curtin as information provided to him and others that the Subcommittee on Crime might question him about.

Mr. Duncan told this subcommittee that this matter of the alleged bribe was discussed at the February 25, 1988, meeting (the meeting that Ms. Curtin said never took place). Mr. Duncan told Ms. Curtin that he did not wish to volunteer this information to the Subcommittee on Crime or represent it as fact. However, if questioned about an alleged bribe or asked if he had any information along those lines, it was Mr. Duncan's intention to relate the phone call from the Arkansas State Police investigator and the information received.

According to Mr. Duncan, Ms. Curtin advised him that what he received from the investigator was not information because it was not substantiated. If asked about this phone call, Ms. Curtin advised Mr. Duncan to use these exact words, "I have no information." Mr. Duncan, at this subcommittee's July 1989 IRS misconduct hearings, testified, under oath, that this advice was provided by the IRS attorneys. Paul Whitmore, who was present at this meeting with Ms. Curtin, corroborated Mr. Duncan's testimony when he (Whitmore) also testified, under oath, at the July hearings.

Mr. Duncan was upset with this advice because he believed that it would cause him to perjure himself. At some point during the discussion with Ms. Curtin, Paul Whitmore explained to her that CID frequently receives telephonic information from informants, and that the information is placed on a Form 3949, titled "Information Item."

According to Mr. Whitmore's sworn testimony before this subcommittee, Ms. Curtin said that the name of the form should be changed because what is received over the phone in such circumstances is not information. Ms. Curtin, in her written statement to the subcommittee not only denied that this conversation with Mr. Whitmore took place, she stated she never saw Mr. Whitmore after the January meeting in Washington, DC. Mr. Whitmore has vehemently denied this assertion by Ms. Curtin.

Long and sometimes heated discussions followed concerning Ms. Curtin's advice. Mr. Duncan told this subcommittee at the July 1989 hearings that he was advised that IRS could not have an allegation about a bribe to a high-ranking Government official attributed in the newspapers to an IRS agent because it could be embarrassing and somehow tarnish the image of the IRS; thus, the "I have no information" advice.

According to Mr. Duncan he was still not satisfied with this advice, and asked Ms. Curtin for a second opinion from her superior. Ms. Curtin took Messrs. Duncan and Whitmore to the office of Peter Filpi, the Chief of the Disclosure Litigation Section. Ms. Curtin explained the situation and her advice for Mr. Duncan to state, "I have no information." According to Messrs. Duncan and Whitmore, Mr. Filpi agreed with Ms. Curtin and said what Mr. Duncan received on the phone was "not information, it's nothing."

After further heated argument, Mr. Duncan told Ms. Curtin and Mr. Filpi that if they insisted he had to make a false statement at the hearing, then he would refuse to testify. According to Mr. Duncan, after his threat not to testify, Mr. Filpi agreed to allow him (Mr. Duncan) to testify that "I have no knowledge - other than the phone call from the Arkansas State Police investigator." This is what Mr. Duncan wanted to tell the Subcommittee on Crime all along, and he was satisfied with this advice.

At the hearing, Mr. Duncan was asked about information relating to a bribe to a Government official, and he answered the question in that manner. However, had he not been persistent in his demand to be allowed to testify accurately and truthfully, he would have been in a position to commit perjury.

IRS attorneys' advice to Mr. Duncan to be less that truthful with a congressional subcommittee is certainly very disturbing, but it was not unique. During the course of this subcommittee's investigation of IRS senior-level misconduct, four different witnesses told the subcommittee that they were advised by IRS attorneys not to provide opinions or speculation relating to cases under review, and also to volunteer as little information as possible.

The Commerce, Consumer, and Monetary Affairs Subcommittee believes such advice is not proper because it denies congressional oversight committees important information from individuals who have a first-hand knowledge of program operations and specific incidents.

IRS' Reaction: Inaction and Denial. - Messrs. Duncan and Whitmore were very aware of the implications of Ms. Curtin's advice. Adhering to such advice would have caused Mr. Duncan to perjure himself. Hayden Gregory, Chief Counsel for the Subcommittee on Crime, told the Commerce, Consumer, and Monetary Affairs Subcommittee investigators that if Mr. Duncan had followed Ms. Curtin's initial advice, he would have perjured himself during the 1988 hearings by the Subcommittee on Crime.

Mr. Gregory said that he was aware of the alleged bribe and would have perceived a response of "I have no information" from Mr. Duncan as perjury.

Believing that Ms. Curtin's improper advice constituted a conduct violation or possibly a criminal violation, Messrs. Duncan and Whitmore decided to report her wrongdoing to their superiors. Messrs. Duncan and Whitmore told subcommittee investigators that immediately after Mr. Duncan's testimony on February 26, 1988, before the Subcommittee on Crime, they went directly to the Office of the Assistant Commissioner for Criminal Investigation and complained about the Disclosure Litigation advice to Joseph Pagani, then the Deputy Assistant Commissioner for Criminal Investigation. Messrs. Duncan and Whitmore gave Mr. Pagani a detailed briefing on the nature and scope of Ms. Curtin's advice.

Mr. Duncan told subcommittee investigators that upon his return to the Southeast Region, he also gave a detailed account of his concerns to David Palmer, the Assistant Regional Commissioner for Criminal Investigation; Al Freeland, the Assistant Regional Commissioner's Executive Assistant and Duncan's supervisor; Jean Pete, the Region's Disclosure Officer; Jack Morton, the Regional Counsel; and Melvin Benson, the Atlanta District CID Chief.

Mr. Duncan later relayed these concerns to Jimmy Martin, who succeeded Freeland as Executive Assistant. While these officials purportedly agreed with Mr. Duncan on the impropriety of Ms. Curtin's advice and apparently sympathized with his alarm over the dangers and risks such advice presents to IRS, none took action to contact Inspection or the Treasury Inspector General to prompt a formal investigation of the matter. According to Mr. Duncan, there is no way these officials could have misinterpreted the facts and circumstances he presented - they simply chose not to act on this serious impropriety.

This subcommittee became aware of this matter in early December 1988, when a senior CID agent, who requested anonymity, brought it and several other allegations of CID misconduct to the subcommittee's attention. The subcommittee arranged to interview Mr. Duncan on the telephone on March 6, 1989, and again in person on March 23, 1989, in Atlanta, GA, without the presence of Disclosure Litigation attorneys, at Mr. Duncan's request. On both occasions, subcommittee investigators spent hours questioning

Mr. Duncan on the specifics of the matter, and his account of the facts and circumstances did not change. On April 19, 1989, Chairman Barnard formally notified IRS of our interest in interviewing Messrs. Duncan and Whitmore "on their knowledge of IRS procedures and policies." Once the subcommittee's interest in Mr. Duncan was transmitted to IRS, an interesting series of events commenced.

The subcommittee staff director, the subcommittee investigators, and a minority staff person were working in Los Angeles on the Saranow case during the week of May 8-12, 1989. This trip was formally arranged with the knowledge of IRS officials, and Disclosure Litigation attorneys were present during the subcommittee's official Los Angeles interviews. On May 9, while the subcommittee staff was not in Washington, CID officials had Mr. Duncan report to the National Office to discuss the "Barnard subcommittee's" interest in interviewing him.

At this meeting were Bruce Milburn, the Assistant Commissioner for Criminal Investigation; David Palmer, the Southeast Assistant Regional Commissioner for Criminal Investigation; and Warren Harrison and John Jennings, technical assistants to Mr. Milburn. According to Mr. Duncan, he again gave his account of the facts and circumstances surrounding his work on the Seal case and Ms. Curtin's advice for him to testify falsely before the Subcommittee on Crime. Mr. Duncan was urged to reduce his allegations to writing and forward them to Inspection.

On May 25, about 2 weeks after this meeting, Assistant Commissioner Milburn sent a memo to Assistant Regional Commissioner Palmer in which he states, "These recent (emphasis added) allegations about events occurring some fifteen months ago are serious; they cannot be permitted to remain unresolved." Mr. Milburn goes on to state that he discussed Mr. Duncan's allegations with representatives of Chief Counsel and urged that Mr. Duncan ". . . reduce his concerns to writing and forward them for appropriate action directly to the Office of Inspector General, Department of the Treasury . . .". On the matter of the U.S. attorney's conduct on the Seal case, Mr. Milburn again advised that Duncan ". . . reduce his concerns to writing and report apparent misconduct by the U.S. Attorney to the Office of Professional Responsibility, Department of Justice . . .".

Mr. Milburn closed the memo by stating, "Please give Bill (Duncan) a copy of this memorandum and encourage him to resolve his concern by properly reporting his allegations."

Assistant Commissioner Milburn's statements were curious, since Mr. Duncan's allegations were not recent and Mr. Duncan claimed he conveyed his concerns about Ms. Curtin's improper and possibly illegal advice over a year before to at least seven CID officials in his chain of command. The memorandum implies this was the first time Mr. Duncan reported his allegations when, in fact, this May 9 meeting was at least the second time Assistant Regional Commissioner Palmer heard the allegations directly from Mr. Duncan.

Soon after Mr. Duncan's May 1989 visit to Washington, his allegations were made known to the Office of Chief Counsel, Disclosure Litigation Division. Based on IRS documents obtained by the subcommittee, on May 23 a meeting with the CID officials was called by James Keightly, the Associate Chief Counsel for Litigation, at the request of Peter Filpi, John Cummings, and Ms. Curtin of the Disclosure Litigation Division.

At the meeting, CID officials outlined Mr. Duncan's allegations and requested, on Mr. Duncan's behalf, certain Disclosure files, including copies of all memoranda to the file memorializing briefings or telephone conversations related to this matter. On June 2, Mr. Filpi forwarded to Inspection a memo outlining the results of this meeting and "a complete copy (as of this date) of our legal files concerning this matter."

Upon receiving these allegations from Disclosure Litigation, Ted Kern, the Assistant Commissioner for Inspection, turned the matter and Disclosure files over to his Internal Security Division on June 5. Mr. Kern's transmittal memo contains the following curious statement:

"From what I understand, Mr. Duncan is making allegations that he was not allowed to testify to certain things of which he had knowledge, however, the record of the hearing as I understand it shows that he did testify specifically on these matters." This statement presupposes that the major focus of Mr. Duncan's allegation was that he was not permitted to testify to his knowledge. However, Mr. Duncan has repeatedly stated that his allegation involves improper and possibly unlawful advice which, if followed, would have led him to commit perjury.

It is unknown whether Mr. Kern's erroneous and highly inappropriate statement resulted from his own reading of the matter or whether it came from a briefing by Disclosure Litigation officials. Either way, in the subcommittee's opinion, the statement in the transmittal memo was very prejudicial against Mr. Duncan's allegation and overall concern, and it was improper for Mr. Kern, the Assistant Commissioner for Inspection, to attempt to bias the IRS investigators in this manner.

Subsequently, the matter was turned over to the Treasury Inspector General for investigation. The Commerce, Consumer, and Monetary Affairs Subcommittee arranged to formally interview Messrs. Duncan and Whitmore on June 8, 1989. Mr. Duncan was interviewed first, under oath, and declined to have Disclosure Litigation attorneys accompany him at the interview.

For the third time, Mr. Duncan testified to the subcommittee, in detail, that Ms. Curtin advised him to report to the Subcommittee on Crime that he had no information about the alleged bribe to a Justice official, and that after he threatened not to testify, her instructions were modified by Mr. Filpi on February 25, 1988, to include the phrase ". . . other than a telephone call from an Arkansas State policeman."

He emphasized that as a special agent with 16 years of experience he realized that the allegation required substantiation, but he merely wanted to testify truthfully, if asked, that he had heard the allegation. Mr. Duncan again testified that Ms. Curtin advised him not to express his opinion about Assistant U.S. Attorney Fitzhugh's handling of the Seal case other than to say "I would have done it differently."

Mr. Duncan stated that in his opinion, the function of the Disclosure Litigation attorneys' intensive briefings before his appearance before the Subcommittee on Crime was to control his testimony and thereby limit that subcommittee's ability to oversee and scrutinize the integrity of the Seal investigation.

He complained about what he considered to be improper and illegal advice to everyone in the CID hierarchy. Mr. Duncan said they all agreed with his observations and viewpoint, but they did nothing. He did not report the allegation against Ms. Curtin to Inspection because it would only get back to the Commissioner's office and he had very little faith in Inspection's ability to perform a credible investigation of a senior IRS employee.

Mr. Duncan noted that once IRS officials realized the nature of this subcommittee's (Commerce, Consumer and Monetary Affairs) interest in his story, he was forbidden from reviewing IRS documents pertaining to the Seal investigation. CID Chief Whitmore was interviewed immediately after Mr. Duncan. Mr. Whitmore was also placed under oath, but opted to have Disclosure Litigation attorneys present during his testimony.

Mr. Whitmore corroborated Mr. Duncan's testimony that Ms. Curtin advised Mr. Duncan to state he had no information on the alleged bribe to the Justice official, and to state only that he would have conducted the Seal investigation differently than Assistant U.S. Attorney Fitzhugh.

Mr. Whitmore testified that Ms. Curtin told Mr. Duncan not to express his personal opinions but rather to state only facts.

Mr. Whitmore believes that Ms. Curtin was concerned that IRS might somehow be linked to bad publicity about the alleged bribe and the mishandling of a major drug trafficking case, and she was attempting to preserve the image of IRS - but at the risk of causing an agent to commit perjury. Mr. Whitmore characterized Mr. Duncan as a hard working, enthusiastic, conscientious agent whom he never knew to lie about or misrepresent any facts or circumstances.

Disclosure Litigation attorneys Lewis Carluzzo and Joseph Urban attended the Whitmore interview. These attorneys have attended dozens of subcommittee interviews during the IRS misconduct investigation ostensibly to protect the interviewees from making illegal disclosures of tax information. However, the subcommittee had long suspected that there was another motive behind IRS strongly encouraging its employees to have these attorneys in attendance - namely to report back to management the substance and progress of the subcommittee's investigation. The subcommittee's suspicions were confirmed after the Whitmore interview. On June 9, 1989 (the day after the Whitmore interview), IRS attorneys Carluzzo and Urban briefed Associate Chief Counsel Keightly on Mr. Whitmore's testimony against fellow Disclosure Litigation attorney Curtin. This conversation was followed up with a memo to Mr. Keightly dated June 13, 1989, which stated in part:

According to Whitmore: A third party source told Duncan that then [Justice official] was involved in criminal misconduct. Duncan viewed this as "information" which he wanted to provide to the Judiciary Subcommittee.

Ms. Curtin did not agree with this characterization, since Duncan had no hard evidence to back up the allegation. Ms. Curtin told Duncan that if the Judiciary Subcommittee asked Duncan if he had "information" on [Justice official], Duncan should reply that he did not. Whitmore and Duncan were not comfortable with this advice, and the matter was brought to the attention of Ms. Curtin's supervisor, Mr. Filpi. Mr. Filpi resolved the disagreement to everyone's satisfaction.

This summarization missed key points of Mr. Whitmore's testimony.

First, it does not acknowledge the long and heated debates between Duncan, Whitmore, Curtin, and later Filpi on what constitutes "information" and how potential questions should be correctly and truthfully answered.

Second, the matter was not resolved to everyone's satisfaction, as Messrs. Duncan and Whitmore complained about the nature of Ms. Curtin's advice to numerous CID officials at the time Mr. Duncan received the advice.

The memorandum went on to state that subcommittee investigators "pursued this matter as if Ms. Curtin directed Duncan to lie to Congress.

Whitmore never stated this to be the case, but in answering questions, he appeared on numerous occasions to adopt that premise." The memo later stated that the investigators ". . . often asked judgement-laden questions which appeared to be designed to lead Whitmore to a particular result, or to confirm a conclusion which they had already reached . . . Nonetheless, Whitmore did appear to confirm the suggestion that Ms. Curtin told Duncan to lie to and/or intentionally withhold information from Congress."

Mr. Whitmore was questioned about his interview by the Commerce, Consumer, and Monetary Affairs Subcommittee when he testified, under oath, at the subcommittee hearing on July 27, 1989. At the hearing the following exchange took place:

Mr. HASTERT. Mr. Whitmore, were you told about the memos