Shake-Up in L.A. Office of FBI Separates Command of 2 Units

In a major reorganization of the FBI’s Los Angeles office, the bureau’s foreign counterintelligence and white-collar crime divisions have been placed under separate commands for the first time.

The restructuring, completed in recent months, is the most significant change in a mass shake-up of upper management in the bureau’s Los Angeles office that began in the aftermath of the Richard W. Miller spy case.

In an unprecedented management turnover in the last year, the three former top aides to Richard T. Bretzing, who heads the 450-agent Los Angeles office, have either retired or moved to other jobs.

They have been replaced by four new assistant special agents who were handpicked by Bretzing with the approval of the FBI’s Career Board in Washington.

Bretzing said recently that the management changes and office reorganization were unrelated to the espionage case of Miller, the first FBI agent ever convicted as a Soviet spy.

FBI sources pointed out, however, that the Miller case dramatized the need for the key change in the office shake-up--the decision to split the white-collar and counterespionage units. Miller’s former boss had been responsible for white-collar crime as well as for all counterespionage operations.

Without directly criticizing Miller’s ex-boss, P. Bryce Christensen, who was transferred to Washington early in 1987 to help run the bureau’s foreign language training program, several top FBI officials said Christensen was overburdened in his dual role of running both white-collar crime and counterespionage.

Bretzing said he wanted to place the bureau’s white-collar division under a separate manager almost from the moment he took charge of the Los Angeles office in 1982 but needed time to build his case and was preoccupied first by the 1984 Olympics and then by the Miller case, which ended with Miller’s conviction in June, 1986.

“That decision was formulated not long after I got here,” Bretzing said. “White-collar crime is and has been the first priority of this office. This is the major white-collar crime office in the FBI.

“Bryce had foreign counterintelligence experience, but not white-collar experience. That was not his fault, but it presented a problem for him.”

To replace Christensen, Bretzing settled on two new assistant agents in charge--one for white-collar and one for foreign counterintelligence--in effect adding one new position to the FBI’s top management ranks in Los Angeles.

Background in Accounting

Heading the 125-agent white-collar division, which investigates crimes ranging from bank fraud to defense procurement kickbacks, is William J. Stollhans, 38, an agent for 15 years with an accounting background considered essential by the FBI for handling complex fraud cases.

Stollhans, the first of the new executives to arrive in early 1987, spent his previous four years in the FBI’s white-collar crime section in Washington and was familiar with the growing criminal fraud problem in Southern California. Like Bretzing, he saw it as an issue demanding undivided attention.

“We knew from Washington the white-collar crime in Los Angeles was growing and because of the Olympics and the Miller case there had been some distractions in dealing with it,” Stollhans said. “The span of control for Bryce was simply too great, and the white-collar problem kept getting bigger.

“Five years ago a $100,000 bank fraud was a big case. Today we don’t deal with them. A big case now is anything from $1 million to $40 million. This area of the country is just a hotbed for major bank fraud.”

Taking over from Christensen last April as the new head of the L.A. office’s terrorism and counterintelligence division was Harry J. Godfrey III, 42, an agent with 16 years experience, mostly in the counterespionage area. Godfrey had worked in Washington and San Francisco.

Since the Miller case, Godfrey said, the FBI has increased its counterintelligence strength in Los Angeles. But he said the defection of Miller, a member of the Soviet counterintelligence squad in Los Angeles, was only one of many reasons for the increase.

‘About Its Business’

“I didn’t walk into an office devastated by Miller,” he said. “I walked into an office that was about its business. After all, there have been other major cases out of here. L.A. has always been looked at as the large office where the (defense) targets are located, and yet we don’t have the diplomatic presence that San Francisco, Washington and New York have.

“We find our concerns are the co-opted and corrupted U.S. citizens and the illegals (Soviet spies) in the area,” Godfrey said. “There are also many official representatives of the Soviet and Eastern Bloc countries who have legitimate reasons to be here, and we want to make sure it stays that way.”

Completing Bretzing’s new management team in the last year are Jim E. Moody, 46, head of the office’s criminal and organized crime section, and Gary A. Lisotto, 46, the senior administrative agent in charge of the office with responsibility for overall administration and personnel matters.

“It was really unusual to have everybody leave and another group come in within the same year,” Bretzing said. “It is something the bureau tries to avoid. But there’s a lot of ‘up and out’ these days.

“What’s happened here may well happen in some other large offices in the next few years. We’re facing a period when two dozen and more of the top FBI officials in the nation are going to be eligible to retire.

“We are not competitive with local law enforcement or with private industry in terms of salary, and it’s a great concern to the FBI that we will lose some of our best people to private industry.”

$72,500 Annual Salary

As head of the Los Angeles office, Bretzing earns $72,500, the same salary paid to the head of the FBI’s New York office. He is eligible to retire in May when he reaches the age of 50 and must retire by the age of 55.

Bretzing is rumored to be considering retirement, but he refuses to confirm whether he might join other top officials who are thinking of leaving the FBI for jobs in the private sector.

“I have made no plans to retire, but that does not mean I’m ruling it out,” he said. “FBI people are not in this career to make a lot of money. They are very dedicated people. But when you have children--and I have seven--you have to consider the options.”