April 12, 2000

Mr. Chairman, Members of the Subcommittee, I appreciate the opportunity to appear before you today in connection with the Peter Lee case.

I am the Principal Deputy Assistant Attorney General in the Criminal Division of the Department of Justice. At the time that the Peter Lee pled guilty I was the Acting Assistant Attorney General of the Criminal Division. In that position, I approved accepting a plea from Peter Lee on two felony counts, one under 18 U.S.C. 793(d) -- willfully transmitting national defense information to a person not entitled to receive it -- and the other under 18 U.S.C. 1001 -- false statements.

In a moment, I will return to that plea agreement. Before doing so, however, I would like to clarify the nature of the relationship between United States Attorneys' Offices and Main Justice with regard to espionage cases like that involving Peter Lee. The United States Attorney's Manual provides that in espionage cases, the United States Attorney must consult with, and seek approval from, Main Justice. USAM 9-90.020. The reason for this is clear: these cases are among the most sensitive and difficult faced by federal prosecutors. They require expert advice.

That expertise is located in the Internal Security Section of the Department of Justice. That the Internal Security Section has helped secure so many important espionage convictions over the years is due in no small part to John Dion, the Acting Chief of the Internal Security Section, who is one of the witnesses appearing before you today.

Although he would be too modest to cite his achievements to you himself, Mr. Dion is one of the most outstanding public servants I have known during my 49 years of service at the Department of Justice. Mr. Dion himself has served in the Internal Security Section for 20 years. During that time he has played a central role in this nation's most critical espionage cases.

John has been repeatedly recognized by both Republican and Democratic Administrations for his espionage prosecutions. In 1987, Attorney General Meese awarded Mr. Dion the John Marshall Award for Outstanding Achievement for his work on the prosecution of John Walker and his confederates for espionage on behalf of the Soviet Union. John received a second John Marshall award in 1997 for his work in two other prosecutions: those of FBI Special Agent Earl Pitts and CIA case officer Harold Nicholson for espionage on behalf of the Soviet Union and the Russian Federation. In 1995, the Director of Central Intelligence awarded John the Intelligence Community Seal Medallion.

John also has been consistently praised by the United States Attorneys and Assistant United States Attorneys who have worked with him. I would request that you make part of the record a letter sent to the Department by the United States Attorney for the Eastern District of Virginia praising John's role in the Squillacote prosecution. I also would request that you make part of the record two unsolicited letters sent to Senator Hatch by two former senior Assistant United States Attorneys who worked with John.

In short, I know of no prosecutor in the United States who has had more experience in prosecuting espionage cases than John Dion. But, of course, John does not work alone. The success of our espionage cases also has turned on the work of the younger trial attorneys in the Internal Security Section. One of the finest of those attorneys has been Michael Liebman.

Mr. Liebman graduated magna cum laude from the University of Michigan and with honors from the George Washington Law School, where he was an editor of the Law Review. After a clerkship, he joined the Department of Justice in the Honors program in 1990, the same year as Mr. Jonathan Shapiro. In addition to serving in the Internal Security Section, Mr. Liebman has been a Special Assistant United States Attorney, and is currently a Reserve Officer in the Army's Judge Advocate General's Corps.In his time in the Internal Security Section, Mr. Liebman has helped prosecute some of the nation's most important espionage cases of the 1990s. Those cases include: Steven John Lalas, a Department of State employee sentenced to 14 years for spying for Greece; Aldrich Ames, the CIA officer sentenced to life for spying for the Soviet Union and Russia; Robert Stephan Lipka, a former NSA analyst sentenced to 18 years for spying for the Soviet Union, and former DOD lawyer Theresa Squillacote, and her husband Kurt Alan Stand, who were sentenced just last year to 22 years and 18 years, respectively, for spying for East Germany, the Soviet Union, Russia, and South Africa. In connection with his role as a member of the Squillacote trial team, Mike was awarded last year the Attorney General's Award for Excellence in Furthering the Interests of National Security.

Mike is currently assigned to two of our most important cases: Wen Ho Lee; and the McDonnell Douglas export violations case. As the members of the Subcommittee know, Mike has had to put off his preparations for these critical prosecutions in order to prepare for these hearings. Indeed, as you are aware, Mr. Liebman was supposed to argue this morning on behalf of the United States in a hearing in the McDonnell Douglas case. In deference to the Subcommittee's request, however, the Department has made him available here instead.Let me just add this: As his record indicates, no one has ever suggested that Michael Liebman is afraid of a tough case. Mike Liebman has helped send more spies to jail than any other lawyer of his generation.

Needless to say, the efforts of the United States Attorneys' Offices are also essential to these prosecutions. We rely on the United States Attorneys' Offices for their outstanding trial lawyers and their knowledge of the local courts. You had as your witness last week Mr. Jonathan Shapiro, who, as you know, was one such outstanding AUSA. And, Senator Specter, you have had a chance to speak to his former supervisor, another highly experienced trial lawyer who at the time was the First Assistant United States Attorney in Los Angeles.

Let me turn now to my involvement in this case. My contact with the case was relatively brief. As Acting Assistant Attorney General, I was responsible for all matters coming before the Criminal Division - which is a tremendous volume of cases. Nonetheless, I do recall being briefed about this case by Mark Richard, who at the time was the Deputy Assistant Attorney General who supervised the Internal Security Section.

In his briefing, Mr. Richard made clear that he thought the proposed two felony plea was a good disposition of this case, since there were potential serious obstacles to prosecution. I relied heavily on the advice of Mr. Richard, who was a 30-year veteran of the Criminal Division, and who had supervised all of our espionage cases for much of that time.

As you know, Mr. Chairman, from my discussions with you, at the time I approved the proposed plea agreement I was not aware, so far as I recall, that it would call only for a short period of incarceration or would charge only an attempted 793 charge. Had this been our opening position in plea negotiations, I doubt that I would have approved it, particularly, the "short period of incarceration."

But I should add that this does not mean that I disagree with the ultimate plea agreement.

I stand by that plea. It is critical in plea negotiations to permit the local United States Attorneys' Office to have some leeway. Mr. Shapiro explained to you his reasoning in accepting the short period of incarceration language: that this was the best that could be hoped for given the sentencing practices of the courts in the Central District of California.

Indeed, since speaking to you I have been informed that the term "short period of incarceration" was a term of art in use at the time in pleas in the Central District of California. In making recommendations, the USAO could choose one of three alternatives: probation; a short period of incarceration; or a long period of incarceration. I certainly think that it was proper to allow the USAO in a decision that I understand was ratified by Mr. Shapiro's experienced supervisors in that Office -- to elect the alternative that reflected an assessment of what realistically could be achieved before the Court.

In closing, let me state the obvious: nobody wishes more than the Department of Justice does that Peter Lee had been incarcerated for his crimes. I promised you, Mr. Chairman, that I would look again at this case, and I have. After reviewing the record, I remain convinced that the plea negotiated here was a good one. It is my view as a 49- year career prosecutor that any trial might well have resulted in an acquittal in light of at least three factors: the subsequent declassification of the information Lee revealed in 1985; the information publicly available on the Lawrence Livermore Web Site, and elsewhere, relating to the disclosures Lee made in 1997; and the highly damaging statements of the Navy in the Schuster memorandum. As you are aware, of course, there are also factors that would have greatly complicated this prosecution that cannot be discussed in an open hearing. Mr. Dion and Mr. Liebman are prepared to discuss these factors in greater detail.

In short, in my judgment, Lee might have escaped conviction had he gone to trial. Instead, against the odds, we secured a plea to two felonies - one of which was barred by the statute of limitations. Even more importantly, we brought an end to the possibility that Lee might disclose further secrets. Imagine, if you will, that we had taken Lee to trial, and lost, allowing him to continue his employment. I dare say that we would be up here before you explaining how we could have such a result come to pass.

I understand that you, Mr. Chairman, and other members of the Committee may disagree with my analysis. But I hope that we all can agree that, while reasonable minds can differ about the likelihood of success of any prosecution, that is all that is at issue here - the disagreement of reasonable minds. Indeed, there was some such disagreement, obviously, at the time, between Mr. Shapiro, on the one hand, and his supervisors in the United States Attorneys' Office and at Main Justice, on the other.

But there was no abuse here; no bad faith of any kind. Instead, this is a case in which highly talented, and highly dedicated, public servants - including the two witnesses appearing before you today worked long hours, under difficult circumstances, in order to achieve the best result they believed possible for the United States. John Dion, Michael Liebman, Jonathan Shapiro, and the FBI agents who worked with them, all did their best to end Peter Lee's espionage career. They did end that career. In my opinion, we should be here to praise their hard work on this and many other espionage cases -- work that too often goes unrecognized. Our Nation is safer because of their efforts.