Life during Wartime

Let the embezzling begin!

FEDERAL BUREAU OF Investigation director Robert Mueller finally stepped out of John Ashcroft's shadow last week, announcing plans to expand domestic spying and to launch a massive bureau-restructuring designed to tackle terrorists. Stung by the pre-Sept. 11 intelligence gaffes – and a very public slam by one of his own agents who had al-Qaeda premonitions – Mueller opted for a political quick fix.

The New York Times questioned whether Mueller, the former United States attorney for northern California, would be able to transform the FBI into the "kind of terror prevention agency that he foresees." Not surprisingly – we are, after all, an industry that loves to beat the clock on scapegoating – Sunday's pundit shows were filled with former FBI agents-cum-analysts speculating that Mueller might be thisclose to getting the axe. He had, after all, been on the job for a whole eight days when the terrorist attacks occurred.

Meanwhile, civil libertarians were freaking out about the surveillance scheme. I spoke to Marjorie Cohn, an associate professor at San Diego's Thomas Jefferson law school. "To cover up for their own incompetence the FBI is taking on massive, J. Edgar Hoover-like powers," Cohn griped.

For the most part, though, the long-term effects of turning the bureau into counterterrorism central haven't been discussed.

Immediately after the hijackings, the bureau pulled thousands of agents off their normal beats and sent them out to hunt down Osama bin Laden devotees and bomb-making, white supremacist wing nuts. Barry Portman, San Francisco's head federal public defender, is already seeing the results of that massive reorientation.

"We've seen a significant drop in [federal prosecutions of] that most traditional of FBI crimes: bank robbery," Portman said.

Certain law enforcement types figure this is a step in the right direction. "Congress has pushed more and more duties on the FBI," former San Jose police chief Joseph McNamara told Government Executive magazine in December. "Today's bank robber is not John Dillinger. It's the same person who holds up a 7-Eleven store. Let's let the local police handle these kinds of bank robbers unless there's some interstate connection or some unusual element."

In coming months we'll see the bureau, once famous for its territoriality, ceding jurisdiction for a whole range of crimes to other agencies. Portman expects the FBI will hand off gang cases to state and local cops and some of its drug investigations to the Drug Enforcement Agency.

Currently, the local U.S. Attorney's Office is sending 60 to 70 white-collar felons to the joint each year. We're talking about some spectacular scams. Take, for example, Enrique Perusquia, a former Lehman Brothers V.P. who last month pleaded guilty to a securities fraud scheme that cost investors $68 million. Or Keith J. Kim, who was recently indicted for an alleged $1.4 million insider stock-trading deal. Or Robert S. Gordon, an ex-Cisco Systems executive who allegedly made millions in illegal stock trades and stole more than $10 million.

I'm glad the feds are going after these apparently avaricious scumbags. Liberals love to bash the FBI – indeed, I spent 3,500 words doing just that last week (see "The Judi Bari Bombshell," 5/29/02) – but we should give the G-men props for taking on these cases.

After all, fighting crime in the suites is a fairly thankless job. Investigators often spend years amassing enough evidence to win a conviction only to watch some judge hand down a wimpy (no prison time) sentence. And unless a truly infamous tycoon is involved – a Mike Milken or an Ivan Boesky – the press doesn't even cover these cases.

With Mueller seeking to reinvent the FBI as some sort of domestic Central Intelligence Agency, we may see the feds quietly deep-sixing some white-collar cases. There's a certain irony here. Before Mr. Mueller went to Washington he headed up an ambitious effort in San Francisco to arrest white-collar criminals.