Analyzing Analysis

In the testosterone-driven world of law enforcement, higher value is often placed on heads busted than on using one's head intelligently. Yet as funding for law enforcement is reduced, progressive law enforcement chief executive officers are realizing that analysis is critical to mission success. Even more importantly, the line investigators are beginning to realize it, too.

For a good example of how a law enforcement analysis program has evolved since its inception in 1973, read The Drug Enforcement Administration's Use of Intelligence Analysts, a 96-page report released by the US Department of Justice, Office of the Inspector General, Audit Division, in May 2008.

Now Posting on OpenCdA.com

Whitecaps posts will now appear on OpenCdA.com. Thanks!

Americans Who Spy

What motivates Americans who spy against the United States? What causes someone to provide information to his country's adversaries?

There is no one answer, because each agent's motivations are uniquely his or hers. There may be generalized categories of motivations such as ideology, money, duress, etc.

From time to time the Defense Personnel Security Research Center (PERSEREC) examines the cases of espionage committed by Americans and tries to better identify what motivates them to espionage. In March 2008 PERSEREC published the latest in its series of reports, this one titled Changes in Espionage By Americans, 1947-2007.

The PERSEREC reports are worth reading because they do reveal changing motivations. While we think of espionage as a crime against the nation, it is also a highly personal and unique crime. The observations about spies against the country may be equally valid about spies against a company.

Toilet Not Included

In early March 2008 the Coeur d'Alene Police Department announced publicly it wanted to build a public safety substation in Coeur d'Alene City Park. Instead of searching out and examining the underlying facts, our local newspaper, the Coeur d'Alene Press, dutifully reported the proposal and editorially cheered the idea. Among the substation's selling points: No toilets, no running water.

In a series of five posts on OpenCdA.com, Whitecaps digs deeper into the story. Here are links to each of the five posts:

Part 1 - Origin of a bad idea

Part 2 - How the City's public administrators tried and failed to justify an urgent need for the building

Part 3 - Who wins and who loses with this project?

Part 4 - Financial planning? Who needs responsible financial planning when you've got the LCDC Bucket-O-Cash at your disposal?

Part 5 - How the City could have met the project's objectives at far less cost and far more benefit to the taxpayers and participating agencies

The Mayor, the Coeur d'Alene City Council, and the Lake City Development Corporation Board of Commissioners badly let down Kootenai County taxpayers by agreeing to fund this wasteful project which need was never appropriately established.

All of us in Kootenai County whose property tax money helps enrich the LCDC need to pay closer attention to what the Coeur d'Alene Mayor and City Council and the LCDC are doing with our money. We need to be very afraid when any of them use the adverb "only" before a dollar sign. The numbers following the dollar sign come out of our pockets.

We need to demand that our local governments do much better strategic and financial planning so that our tax money is spent prudently on projects, goods, and services that benefit everyone, not just a few.

Public Corruption Update

Periodically Whitecaps links readers to the Internal Revenue Service’s Examples of Public Corruption Crimes Investigations, a report updated quarterly. The IRS is not the only federal law enforcement agency involved in public corruption crimes investigation. The Federal Bureau of Investigation (FBI) also has a prominent role in public corruption investigations.

Some news accounts have suggested that the FBI has reassigned many special agents from public corruption investigations to counterterrorism activities. Recently in San Francisco, Attorney General Michael Mukasey sought to comfort citizens and afflict corrupt officials by renewing his pledge to pursue public corruption. His comments were reported in an Associated Press story in USA Today headlined Mukasey vows corruption crackdown.

The US Department of Justice posted a press release dated Thursday, March 27, 2008. It was titled Fact Sheet: the Department of Justice Public Corruption Efforts. This press release includes both statistical data and anecdotal case studies. It explains the DoJ’s role in public corruption investigations, both foreign and domestic. (Note: The press release refers to the FCPA but doesn't explain the acronym. It is the Foreign Corrupt Practices Act.)

It would be a mistake to conclude that the IRS and the FBI do not work cooperatively on public corruption crimes investigations. Both agencies have unique and important jurisdictions and assets that make it much more efficient to team up on these investigations.

The Spitzer Investigation, Part 2

It is 8:30 AM in Coeur d’Alene, Idaho. Eliot Spitzer is expected to resign from his position as the Governor of New York within the half hour. Unless Spitzer has cut a deal with prosecutors, his resignation should not have any bearing on his prosecution for violation of federal currency transaction laws. Because Spitzer was formerly New York’s Attorney General responsible for prosecuting complex financial crimes, readers might think he would have been smart enough to evade the law. The banking laws have been written to make that kind of informed evasion more difficult.

Anyone with a bank account, anyone who moves money, is subject to transactional surveillance by US banks. For an entertaining (or alarming, depending on your point of view) take on this, listen to a National Public Radio report titled “Bank [sic] Scrutinize Even Routine Transactions” by Adam Davidson.

To have a better understanding of federal currency transaction laws, go to the Internal Revenue Service’s “Bank Secrecy Act” webpage and click on the various links that explain specific Bank Secrecy Act requirements to assist with education and compliance with the law.

If you’re really into money laundering, read the Office of the Comptroller of the Currency’s “Bank Secrecy Act / Anti-Money Laundering - Comptroller’s Handbook”. This little gem is 92 pages long, but it is easily read and understood. It is one of the better primers on money laundering. For example, the Suspicious Conduct and Transactions list begins on the report’s page 12 (page 15 of 92 on the .pdf paginator). That list identifies behaviors that should or could trigger a Suspicious Activity Report.

One of the more interesting crimes chargeable under federal law is “structuring” (31 USC 5324). It is a crime of evasion. This has been mentioned as one of the crimes for which Spitzer is being investigated. In simple terms, “structuring” means the person accused knew of the law and intentionally broke up one or more reportable financial transactions into smaller transactions to get their dollar value below the threshold that would have triggered a report required by law. For a detailed discussion of “structuring”, read “Structuring Financial Transactions to Evade Reporting Requirements - A Trap for Unwary Defendants Yet an Opportunity for Defense Counsel“.

Some readers may feel that the banking laws are too intrusive, that they allow too much official attention to be paid to the financial transactions of honest citizens, citizens who have no desire or intent to violate banking laws. The challenge faced by legislators and law enforcement is that not all citizens are honest. There are citizens who seek out ways to intentionally evade the financial transaction laws and violate them. Typically these violators are financially and legally astute. As violators become more skilled in violation and evasion, the tools available to law enforcement must expand to detect and prosecute the violators.

The Spitzer Investigation

By now most readers know that New York Governor Eliot Spitzer has been implicated as a client of a high-end prostitution ring. Some of our local public officials in Kootenai County and Coeur d’Alene, Idaho, might want to look at how the allegations against Spitzer came together.

Some of the details were disclosed in today’s New York Times article headlined “Revelations Began in Routine Tax Inquiry”. What may have begun as a routine income tax inquiry by IRS revenue agents, probably in response to a Suspicious Activity Report, was fairly quickly handed off to IRS Criminal Investigations (CI) agents and the FBI.

Most people have a fair, consumer-level understanding of the duties and responsibilities of FBI special agents. Fewer people understand the role of IRS-CI agents and how they and FBI agents work cooperatively to fight money laundering and other financial crimes.

Whitecaps’ post of January 25, 2007, was titled “IRS Criminal Investigations” . It introduced readers to the duties, responsibilities, and investigation methods used by IRS-CI agents. The links in that post are still active today.

Spitzer is in a lot of trouble. He was formerly the New York Attorney General. He had to know that his money was being used to support a criminal enterprise. He apparently took great care to avoid moving the money with wire transfers, and he also apparently took pains to conceal how he used the US mail to move it. Soliciting a prostitute is the least of the charges he may have to face. If he hasn’t already, Spitzer will lawyer up today.

Don't Push That Button!

I hope there’s more to this March 6, 2008, Spokesman-Review story headlined “Phone evidence accidentally erased”. In case the story link won’t connect (I’m not a subscriber to the S-R), here are the basic facts.

A man on trial for vehicular homicide was allegedly using his cellular telephone when the car he was driving collided with another vehicle. Five occupants in the other vehicle were killed. The cellular telephone, more accurately the information stored electronically in the telephone’s circuits, was likely to be evidence at the man’s trial.

But approximately a month ago prosecutors, accident investigators and attorneys for the defendant met at the Washington State Patrol’s Spokane office to examine evidence for defendant’s upcoming trial. During the course of that examination, defense counsel was allowed to handle the cell phone. The cell phone was then plugged in to a power supply, and defense counsel was further allowed to turn on the phone’s power. While defense counsel was handling the phone, the data created during the phone call in progress when the accident occurred was altered, by some counts erased. This was reportedly because the defense counsel had hit the phone’s ”send” button. The trial judge has determined that defense counsel did not intentionally destroy the evidentiary value of the data stored in the cell phone.

The newspaper story strongly suggests that while the cell phone had been properly booked into evidence, it had not been examined and analyzed by qualified evidence technicians trained and skilled in the recognition, retrieval, storage, and documentation of electronically stored evidence.

Why had the electronically stored evidence in that phone not been properly processed before the phone was handled in a manner that changed and maybe destroyed its evidentiary value? Procedures for properly preserving cell phone evidence were established in the mid-1980’s. I was personally involved in developing the techniques used by the US Secret Service, but other federal agencies including the FBI and Air Force Office of Special Investigations were doing it, too.

I suspect the prosecutor and the judge will have some serious questions about why the Washington State Patrol had apparently failed to process the electronically stored evidence before allowing the cell phone to be handled by anyone other than qualified technicians. Those would be the right questions to ask.

Addendum on 03-07-2008: The headline mentioned in the first paragraph of this post was the one used when the article was first posted on Thursday, 03-06-2008. The headline was changed this morning although the URL remained the same.

Arson On the Street of Dreams

Our local and regional public safety and government officials should closely follow the progress of the "Street of Dreams" fire investigations. Read carefully the Seattle Post-Intelligencer article headlined "Fire Destroys 'Street of Dreams' Homes." Readers will note there has been some social controversy in the Maltby-Woodinville area where these fires occurred. The controversy involves developments being built over an aquifer, cluster housing, and disagreements over local governments' efforts to manage growth.

Initial news reports focused on a banner found at one of the crime scenes. The banner suggested the fires might have been set by the Earth Liberation Front (ELF), a group whose methods have been characterized by the FBI as special interest extremism. However, the same P-I article reported, "FBI Assistant Special Agent in Charge Dave Gomez said the arsons fit the profile of an ELF attack, but cautioned that anyone could have set the fires and claimed it as an ELF action."

The P-I's story was accompanied by a series of photos of some of the fire scenes. One photo caption included this statement, "Eco-terrorists are suspected of using explosive devises [sic] to destroy or damage several Street of Dreams show homes, which burned in Woodinville on Monday."

Arson can be a very complex crime to investigate. Though motive is not an element of the crime (motive need not be proven to get convictions), it is of interest to investigators. It is often useful to use motivation as the ribbon on the package of physical evidence at trial. Motivation sometimes answers the "why?" question jurors often want to have answered. The Insurance Information Institute's "Topic - Arson" webpage gives a statistical breakdown of the most common motives for arson.

Readers who want to learn more about this complex crime and what motivates people to commit it may want to look at the interFIRE.org website. That site bills itself as, "...the complete resource for fire services, fire insurers, law enforcement and others whose duties involve arson investigation, fire investigation safety and fire scene training."

Good Questions

OpenCdA.com readers "steve" and "Stebbijo" asked some good questions about why alleged corruption in Coeur d'Alene has not been investigated. Their questions are good, because people observe things going on and intuitively know those things are wrong. The people who care enough about their community to stick their necks out and subject themselves to Coeur d'Alene's culture of intimidation complain to the proper authorities and then receive either unsatisfactory replies or no replies at all. Almost inevitably, these people begin to wonder if anyone is listening.

My post titled Good Questions on the OpenCdA.com website is an effort to try and explain why the apparent absence of action does not necessarily mean citizens' legitimate complaints have gone unnoticed.

The Kootenai County Prosecuting Attorney

Kootenai County Prosecutor Bill Douglas announced he will not seek reelection this November. Here are some questions for discussion:

• What is your understanding of the job of the Kootenai County Prosecutor? What do you believe the prosecutor’s duties and responsibilities are?
• What are your expectations for the person elected to that position?
• What do you consider to be the most and least important personal qualifications for the Kootenai County Prosecutor?
• Identify a candidate who has the professional qualifications you believe to be essential for the prosecutor’s position? Explain why that candidate is qualified.
• Over the next four years, what do you believe the most significant challenges for the Kootenai County Prosecutor will be?
• If you could give the new prosecutor one piece of advice, what would it be?

The Kootenai County Sheriff

Kootenai County Sheriff Rocky Watson announced he will seek reelection this November. Here are some questions for discussion:

• What is your understanding of the job of the Kootenai County Sheriff? What do you believe the sheriff’s duties and responsibilities are?
• What are your expectations for the person elected to that position?
• What do you consider to be the most and least important personal qualifications for the Kootenai County Sheriff?
• If you consider Watson to be professionally qualified to be sheriff, what are his strongest and weakest qualifications?
• If you consider Watson to be professionally unqualified to be sheriff, identify a candidate who has the professional qualifications you believe to be most important? Explain why that candidate is more qualified than Watson.
• Since 2000 what has been Watson’s greatest accomplishment and his greatest failure? Feel free to name more than one in either category.
• Over the next four years, what do you believe the most significant challenges for the Kootenai County Sheriff will be?
• If you could give the sheriff one piece of advice, what would it be?

The City Responds

In my February 15, 2008, post titled Better Than a Gold Watch, I expressed curiosity about the employee services consulting contracts given to three recent retirees (and their spouses) who had been employed by the City of Coeur d'Alene, Idaho.

My post titled The City Responds on the OpenCdA website provides the information I received from the City in response to my Idaho Public Records Law request. Because of the length of that post, I've linked to it rather than repost it here in its entirety.

The Big Loophole - Intentional Ignorance

In a press conference this morning, Idaho Attorney General Lawrence Wasden announced that the Idaho State Board of Education may have engaged in a non-knowing violation of Idaho’s Open Meeting Law. The AG’s decision is based on a recent Idaho Supreme Court decision which effectively allows intentional ignorance as an affirmative defense to alleged violations of that law.

One of the critical factors in applying the Open Meeting Law’s nullification and penalty portions is that the violation must have been “knowing.” That requirement arises from the Idaho Supreme Court case State of Idaho v. Rick Yzaguirre, Chairman, Ada County Board of Commissioners, Judy Peavey-Derr, Member, Ada County Board of Commissioners, Fred Tilman, Ada County Board of Commissioners.

The Attorney General’s entire report of his office’s investigation is available here.

The Idaho Supreme Court’s decision in Yzaguirre has created what may seem to be a nearly impossible standard for prosecutors to meet. They must prove alleged violators “knowingly” violated the law. In the absence of offenders’ writings and utterances, how do they demonstrate the violators knew they were violating the law?

AG Wasden insightfully recognized this and took steps to administratively close the loophole. The Ada County Board of Commissioners will be required to attend training in the Idaho Open Meeting Law.

Training in the Idaho Open Meeting Law, the Idaho Public Records Law, and the Idaho Ethics in Government Law ought to be mandatory before any Idaho elected or appointed official is allowed to assume a position of public trust. The State already has a statewide mechanism set up to provide training to these officials. It is the Idaho Peace Officers Standards and Training Academy. That academy has regional representatives who could be used to set up and even administer the training. After all, the AG’s office provides the booklet training material free to any requestor either in hard copy or online.

It is worth mentioning that a few years ago, The Spokesman-Review newspaper sponsored an Open Meeting Law - Public Records Law seminar in Coeur d’Alene. Attorney General Wasden and his deputy, Bill Von Tagen, presented the training on behalf of the AG’s office. Coeur d’Alene’s Mayor and City Council just could not find the time to attend. Perhaps they knew that if they attended, they might be held accountable for compliance.

The Idaho legislature needs to adopt AG Wasden’s “fix”: Require all public officials who are subject to these laws to attend certification training and periodic retraining. Remove the “intentional ignorance” defense from their arsenal of weapons of mass evasion.

Better Than a Gold Watch!

It must be great to retire from employment with the City of Coeur d’Alene and quickly have the City reward you and your spouse with an employee consulting services contract.

I was searching through some calendar year 2007 Coeur d’Alene City Council minutes and stumbled across these three items.

1. October 2, 2007, Coeur d’Alene City Council passed resolution no. 07-063 authorizing an employee consulting services contract with Wendy Carpenter and Tim Trout, wife and husband. Is Wendy Carpenter not the recently retired City police chief and her husband not the recently retired City code enforcement officer?

2. September 4, 2007, Coeur d’Alene City Council passed resolution no. 07-058 authorizing a contract for employee consulting services with Richard F. Suchocki and Georgia A. Suchocki, husband and wife. Is Richard Suchocki not a recently retired city engineer?

3. May 15, 2007, Coeur d’Alene City Council passed resolution no. 07-041 authorizing a contract for employee consulting services with Dan and Doris Cochran, husband and wife. Is Dan Cochran not a recently retired deputy fire chief?

It would be interesting to see what employee consulting services these retirees and their spouses are providing under these contracts. It would also be nice to know the dollar value of each contract.

Such a deal!

Genesis of a Federal Criminal Investigation

A growing number of people in Coeur d'Alene, Idaho, are expressing an opinion that the city government's urban renewal agency, the Lake City Development Corporation or LCDC, ought to be investigated by the federal government. One public perception is that local and state prosecutors and law enforcement officers lack the resources and may be politically compromised so they are unable to conduct such an investigation.

Unless the reader has been directly involved with a major federal white collar crime or public corruption investigation, it may be difficult to understand how such an investigation is launched, how much time it will take, and what resources will be required.

Many people rely on the news media and particularly newspapers to research and report stories based on allegations of public corruption or fraud, waste, and abuse of public money. But these types of investigations are costly for the newspaper just as they are costly for investigative agencies. It can be expensive for a newspaper to commit resources to the kind of coverage that would explain the genesis and execution of a major, long-term federal investigation.

The Seattle Post-Intelligencer from Seattle, Washington, has made the commitment in its series about the Port of Seattle. Most of the P-I's stories in the series were written by P-I Reporter Kristen Millares Bolt. The well-written stories and supporting documentation help us understand what it takes to get a federal criminal investigation started when the allegations and evidence are complex.

The P-I's reporting starts in late 2006 with an article titled Audit finds overbilling, bid dispute at port.

Another P-I article in late December 2006, this one by Investigative Reporter Ruth Teichrob, is titled Lax oversight at Port of Seattle. This article may be of particular interest to Coeur d'Alene residents who pay close attention to the LCDC and its personalities as well as to the elected officials who are expected to oversee the LCDC. The Port of Seattle is a municipal corporation in Washington in the same sense that the LCDC is a municipal corporation in Idaho.

Now fast forward one calendar year to December 20, 2007. Washington State Auditor Brian Sonntag released a 334-page performance audit report titled Port of Seattle Construction Management - Report No. 100008. The second paragraph of Sonntag's cover letter presenting the report reads as follows:

We are pleased to present the reports of that audit, which brings to light serious and pervasive issues in the Port's management of these [port construction] projects. According to the audit, the Port Commission provided insufficient oversight over contracting practices and the Port did not have adequate systems in place to protect taxpayer dollars from misuse, abuse, and misappropriation. To the degree the Port had these in place, they were not always followed.

The report's six major findings contain the kind of language that would most likely trigger an investigation. Those findings, in brief, are:

• Port construction management lacks cost controls and accountability.
• The Port circumvents competition requirements in violation of its own policies and sometimes in violation of state law.
• Port policies and Port management's interpretation of its policies result in a lack of transparency and thwart Commission oversight of construction management activities.
• Port construction management records are incomplete and disorganized.
• The Port fails to enforce basic contract requirements, resulting in delays, extra costs, and an inability to defend against claims.
• Port construction management is vulnerable to fraud, waste, and abuse.

With the blunt language in Auditor Sonntag's report, it is no surprise the P-I continued to follow up with more stories. It is also no surprise that on January 4, 2008, the US Department of Justice, Office of the United States Attorney for the Western District of Washington, sent a letter to Washington State Auditor Sonntag stating, in part, "Our office, in conjunction with federal law enforcement agencies, is conducting a criminal investigation of the Port of Seattle. This investigation is a product of your office's December 20, 2007, Performance Audit Report of the Port of Seattle."

The cited letter formed the basis for P-I Reporter Kristen Millares Young's January 8, 2008, story headlined Feds open criminal inquiry into port. The subhed read, "Audit alleging waste, fraud catches U.S. attorney's eye." The articles lead paragraph explains why. It reads:

The U.S. Attorney for Western Washington is conducting a criminal investigation of the Port of Seattle based on a state performance audit of the port's construction management, which found the port wasted $97.2 million during contracts active from 2004 to 2007.

The reader can reasonably ask, "Since the Port of Seattle is a municipal corporation, what gives the federal government investigative jurisdiction?" The overly simple answer is that the Port of Seattle receives federal money, so the federal government has an obligation to ensure that money is spent lawfully and according to the rules under which the money was disbursed. As noted in the cover letter from the contract auditor to state Auditor Sonntag: "POS [Port of Seattle] derives its revenues from airline rates and charges, ad-valorem tax levies, passenger facility charges, and federal grants."

What does this tell us about the genesis of a federal criminal investigation?

First, it tells us that the events ultimately alleged to be criminal often evolved from legal to illegal. The transformation from legal to allegedly illegal may take years.

Second, it tells us that private citizens may have an inkling, an intuition, that something illegal is going on, but they may not have the authority or resources to completely reveal the questionable behavior. It may take a government agency with authority of law, in this case the Washington State Auditor acting under his authority of Washington State Initiative 900, to fully analyze the facts and reveal the behaviors.

Third, it tells us that federal law enforcement agencies take the facts and conclusions in these types of reports seriously, particularly when it seems likely that federally supplied money was involved.

Finally, it tells us that once the investigation has started, it may again take a long time to conclude.

It's a long road from genesis to revelation.

Addendum 01-08-2008: The Seattle Times has also picked up on the story about alleged corruption in the Port of Seattle. It has run a story headlined Possible fraud at Port focus of criminal probe by Times Staff Reporters Jim Brunner and Bob Young. The Times story also reports "...cozy relationships between Port employees and contractors..." and "[current Port CEO] Yoshitani said the problems identified by auditors were not due to corruption, but to a hard-charging, get-things-built culture that sometimes flouted the Port's own policies." Only a thorough investigation will affirm or refute Yoshitani's assertion.

Addendum 01-09-2008: The Seattle Times story today is headlined Port tells panel it's making changes; auditors disagree. The lesson to be learned is that once the purported overseers lose the trust and confidence of the people, it is difficult to get it back. That's particularly true when the overseers say one thing yet fail to carry out their promises.

Addendum 02-13-2008: According to a Seattle Post-Intelligencer article today, "The Port of Seattle Commission will hire former U.S. Attorney Mike McKay to lead its internal investigation of the port in the wake of the state auditor's blistering critique of the port's construction management. "

So...What's the Problem?

Reporter Annie Linskey's February 13, 2008, Baltimore Sun article headlined Cameras turn lens on police activities says that some Baltimore police officers are upset their actions are being caught on video by citizens with cameras.

Why? What's the problem?

The police could have made a good argument that if someone with a weapon-sized object in his hand shows up at a serious or violent crime in progress, that person could distract the police. A camcorder held in one or both hands at eye height can easily and reasonably be misinterpreted to be a handgun. If the cameraman distracts the officer’s attention from a target with a real weapon, the officer’s safety is jeopardized. The officer’s choices have both been doubled. Instead of one possible target/threat, he has two. Which one is the more viable threat? In less than the time it took to read that last sentence, the officer can become either a shooter or a victim. The police could have made that argument, but they didn’t.

As long as the camera wielding citizens are not creating a threatening distraction, compromising ongoing investigations, or directly interfering with the officers, the officers have little to worry about.

As the article noted, citizen videos ought to result in law enforcement agencies paying closer attention to citizen's complaints. The videos may show officer misconduct, but they may also show its absence.

Videos help hold people accountable for their actions. The police have been using undercover videos for decades now to hold criminals accountable and to impeach criminals when they testilie. Time and again dashboard video cameras on patrol cars have substantiated officers’ proper conduct and refuted unsubstantiated allegations against them.

The police may be uncomfortable by being on camera, but turning the lens 180 degrees to enhance police accountabilty is appropriate. If they don't have anything to hide...