[...]

A letter, dated October 30, was sent to the committee chairman by Deputy Assistant Customs Commissioner William Green, and he did not mince his words. The letter, which was to become known as the Green_Memo, was damming. It accused the Commerce Department of impeding cooperation in investigations, compromising customs and foreign government sources, and damaging Customs relationships with the allies. The Commerce Department, said the Green Memo, had contributed to problems affecting the national security.

The Department of Commerce hit back. It claimed that Customs had not always responded with help when needed, that it had initiated its own investigations without telling Commerce, and that if Customs seized shipments without proper technical knowledge to support those seizures it would be harassing legitimate exporters. Commerce stressed that all export control enforcement should be under one agency- the Commerce Department's Compliance Division, where controls were a priority. Customs was responsible for enforcing a number of laws, and its priorities were constantly being reassessed. (30)

Accusation and counter-accusation continued as, during the next few years, Congress became increasingly involved. The criticism from each side was bitter, but the most damning of all for Commerce came in May 1982, after an eighteen-month investigation by Senate staff members into the behavior of the Compliance Division. One special agent employed in the Compliance Division, who had served more than twenty years as a criminal investigator, told Senate staff that "the Kremlin's spy organization, the KGB, could not have organized tho Compliance Division in a way more beneficial to Soviet interests." (31)

The Senate investigators demolished the Commerce Department's claims that tho Con1pliunce Division was competent. "Our investigation found that ... it is an understaffed, poorly equipped, and in certain instances under-trained and unqualified investigative and intelligence unit." How could it carry out its function when it was overwhelmed with work? The division did not even have a "secure" telephone. Everyone knew about the problems, the Senate staff member told his committee; it was one of the worst kept secrets in the Executive Branch. But he had found no one who would come forward and tell the truth. "The highest leaders of our nation are led to believe that we have an export control capability when, in fact we don't." (32)

Most shocking of all to the assembled senators was a revelation by a former Compliance Division investigator that he was the only person responsible for ensuring that companies adhered to former President Carter's embargo on grain sales to the Soviet Union after the invasion of Afghanistan. Senator Sam Nunn of Georgia, a member of the Committee on Governmental Affairs, remarked; "So you have a major decision by the President of the United States on a major foreign policy issue involving the United States and the Soviet Union, involving all our allies, involving the credibility of our foreign policy and economic policy throughout the world, and you have the Commerce Department assigning one individual for enforcement purposes." Senator Nunn, who later introduced legislation to amend the Export Administration Act and transfer criminal enforcement from Commerce to Customs, said, "When [President Reagan] starts talking about the export of technical equipment that aids the Soviet Union, nobody tells him that they have eight inspectors covering all the airports and ports of the country in enforcing the Export Administration Act, do they?"(33)

The investigation met with resistance by government departments. Working agents and senior officials were candid - but insisted on anonymity. Both the FBI and the Justice Department refused to help evaluate Commerce, although there was a widespread sense throughout the affected areas of government that the Compliance Division was inadequate. Senator Nunn remarked: "So the attitude generally is what the President of the United States doesn't know about the inability of the Commerce Department to carry out his own policy doesnt hurt him, right? What the Congress doesn't know doesn't hurt them?" (34) Reports on the Commerce Departments relations with the Intelligence community were just as damming. The Senate investigation found intelligence on technology transfer to be insufficient, a commitment of, needed resources lacking, and the Intelligence community not organized to use information to block prohibited transfers. Intelligence sources told the Senate investigators that they had "virtually no communication with ... Compliance regarding ongoing investigations... There is a little feedback from Commerce regarding intelligence information it provides ... Compliance ... rarely seeks the expertise of the intelligence community. " (35)

The friction between Commerce s Compliance Division and the Customs Service eventually led to scarcely credible behavior by government officials. "Customs is doing its thing ... Commerce is doing its thing... and nobody is happy and it is costing the taxpayer over thirty million dollars," remarked Representative Don Bonker of Washington State, sponsor of the House version of the bill to amend the Export Administration Act. (36)

At the receiving end of the attack, Lawrence Brady did not flinch. The official who had said export administration was a "total shambles" was unswerving in his belief that Commerce should be the major body for enforcement of the Export Administration Act at home and abroad. In February 1983, he told skeptical senators that significant strides had been taken in correcting the deficiencies that had built up during the seventies. He now believed Commerce to be the equal of Customs in most respects. The Intelligence agencies had been asked to prepare current analyses of Soviet acquisition targets and methods: these were being read ·regularly by Brady and his staff. Budget and manpower had been increased; for the first time technical people were being hired as licensing officers. Commerce officials were being educated in how to use the control list, prepare license applications, and examine various licenses. Thirty-five highly trained criminal investigators had been hired, and a third of a million dollars had been spent on state-of-the-art surveillance equipment. (37)

But the main change was that a new Commerce Department office had been created. The much-criticized Compliance Division has been upgraded to office status. To head the new and expanded Office of Export Enforcement, Lawrence Brady had brought on board one of.the West Coast's most renowned attorneys in the technology-transfer field, the man who had prosecuted three well-known cases (38). Theodore Wai Wu was an assistant U.S. attorney in Los Angeles, where he was assistant chief of the Criminal Division and senior trial attorney for Customs and export control violations. Wu was not unpopular with the Customs agents with whom he had been in close contact during high-tech investigations, although had said, "He tended to get overenthusiastic." The story the agent told took place during one of the trials on technology transfer.

"He kept jumping up and down and shouting 'Objection! Objection!' The judge kept saying, 'Sustained.' At one point, Wu jumped up and shouted, 'Sustained!' 'That's my line, Mr. Wu,' the judge told him." (39)

Customs agents found him knowledgeable about technology; they admired that. And he was good at explaining technological complexities to juries. Wu was a graduate of the U.S. Naval Academy and had served on active duty in weapon and engineering assignments. He had done graduate work at Tufts University and got a J.D. at Boston University Law School.

Like Bob Cozzolina, Ted Wu believed that the first line of defense in controlling technology transfer was the private sector. "Tip-offs are critical. We rely on industry to give us leads." (40) Each of the cases he had prosecuted had been a result of information from industry. One of Ted Wu's main assets was the Commerce Department's newly acquired IBM 370 computer, storing the 300,000 existing export licenses and all the new applications. It had on-line tracking for all cases to proscribed destinations and details of computer exports to Western countries. It was to be upgraded throughout 1983 to store intelligence information and details on the foreign availability of technology. Accessible from the West Coast and New York, with eventual expansion to forty-seven cities, it would enable local investigators to check both destinations and users. Lionel Olmer, Under Secretary of Commerce for International Trade, told Congress in February 1983 that information in the computer would provide valuable help for the FBI, the CIA, and the Customs Service.

But the stronger the enforcement capabilities at Commerce, the more intense became the rivalry with Customs. At the heart of the dispute was the information stored on Ted Wu's computer. Customs agents complained that they were being denied access to the wealth of information in those memory banks, and this was hampering their investigations. Commerce officials were willing to give them details only on a case-by-case basis. Congress became aware of the problem in the spring of 1983. Under Secretary Olmer claimed at Senate hearings that a memorandum of understanding on sharing the information was about to be signed. However, it was a couple of months late getting off the ground.

"I understand you are negotiating the size of the table", said a senator.

"No, I don't think so," replied Olmer. "I'm not looking for a Nobel Peace Prize."

He was told it might be worth it.

"I do not believe there are any serious issues between us that would prevent us from getting a memorandum ... signed within the next week or so," replied Olmer. But he went on: "We've been criticzed ... for not giving ... Customs... information from the private sector which !s given to us in the course of ... applications for export .... There is an awful lot of proprietary information ... and we are simply not prepared to let it go without some understanding." (42)

At the center of the controversy was a clause in the Export Administration Act that protected proprietary commercial information obtained by Commerce. Customs Commissioner von Raab told Congress that the computer was closed to his agents because "apparently it contains some business confidential information." He said the use to which he might put the information would not cause problems. The State Department, after all, opened its files, and the Justice Department had, in fact, ruled that information that might be closed to the public was not closed to government agencies. Now, the Commerce Secretary had ruled that the information be made available; it was junior officials who were refusing to supply the data on anything other than a case-by-case basis. (43) Congress was told that the refusal by Commerce to open its files was unique to the Reagan administration. Theodore L. Thau, who from 1961 to 1972, was executive secretary of the Ex port control Administration Review Board in charge of the legal aspects of export control enforcement, had shared information with other government agencies. Thau was "surprised and shocked" that for the first time since 1949, when the act's confidentiality prrovision was adopted, the question of sharing information had arisen. (44)

The Exodus team became desperate for the licensing details. Aft shipments were seized at ports of exit, the Washington Command Center was obliged to wait until Commerce officials told them the licensing status of the equipment: the fact that copies of licenses were not included with shippers' export declarations infuriated them. Commissioner von Raab did not hesitate to express their concern. He told Congress that to speed the work of his team he did not need validated licenses with shipments; just photocopies. Twice a day one of his agents was obliged to walk across Washington's 14th Street from Treasury to Commerce, carrying details of the shipments seized by his team. "Commerce then decides what to do with the detentions," he said. (45)