Lawyers Warned Alyeska of Risks : Energy: The pipeline firm was told in January that it could face federal criminal charges as a result of its covert investigation of whistle-blowers.
Lawyers for Alyeska Pipeline Service Co. warned the company in January that it could face federal criminal charges as a result of a covert probe of whistle-blowers by its security firm last year, according to documents released Tuesday by the House Interior Committee.
Another document released during the second day of hearings into the spy caper revealed that a lawyer for the security firm, Florida-based Wackenhut Corp., had prepared a memo detailing the risks of aiming a covert investigation at a member of Congress.
Committee Chairman Rep. George Miller (D-Martinez) said he interpreted the report to refer to him, but Wackenhut and Alyeska have repeatedly denied that Miller or any member of Congress was ever the target of the probe.
The covert operation was ostensibly aimed at plugging leaks of sensitive documents from Alyeska--the consortium of seven major oil companies that owns and operates the 800-mile trans-Alaska pipeline--into the hands of Charles Hamel, a retired Virginia oil tanker broker and industry critic. Hamel has provided embarrassing environmental information about Alyeska to Congress, regulators and the media.
In hearings Monday and Tuesday, Miller’s committee has been asking whether the probe’s techniques violated state and federal laws, and whether it was intended to intimidate or silence critics. A final day of hearings is scheduled today.
On Tuesday, testimony came from George R. Wackenhut, chairman of the security firm that bears his name; the firm’s lawyer, William L. Richey; Alyeska President James B. Hermiller, and Alyeska’s chief of security, James (Pat) Wellington. All denied any illegalities.
But Hermiller admitted: “I don’t ever want to get involved in one of these things again. . . . You lose control. . . . The risk-benefit of these things are just not worth it.”
At times, the exchanges grew heated. Wellington demanded an apology from Miller for calling Alyeska “criminal” during a CBS “60 Minutes” broadcast Sunday. Richey accused Hamel of being an “extortionist.”
The committee released a 95-page report prepared by the Los Angeles law firm Paul, Hastings, Janofsky & Walker for Alyeska’s owners committee.
The report examined in detail the probe’s activities and whether they exposed the consortium to criminal or civil liability. Alyeska’s owners include British Petroleum, Atlantic Richfield Co., Unocal Corp. and Exxon Corp.
The report was prepared in January, four months after the owners committee abruptly decided at a meeting in Denver to “call off the dogs” and terminate the investigation, according to notes of the meeting obtained by the committee from Alyeska .
Among other things, the report concluded that Alyeska might face criminal charges in connection with a phony letter written by Wackenhut’s chief investigator in the case, Wayne Black, to obtain software worth $6,000 from a Hamel-owned firm, Management Information Technologies Inc.
The letter, which was sent over a fax line and resulted in the software being shipped to Black, opened Alyeska to “a federal prosecution . . . brought under either or both of the mail-fraud and wire-fraud statutes,” the report said.
It added: “A federal action could be brought under the interstate transportation of stolen goods statute, assuming the MITI software program is of value of more than $5,000 and was transported across state lines.”
In testimony, George Wackenhut said, “There was no intent to defraud,” adding: “Our outside attorneys don’t believe that the conclusions reached by this law firm (Paul, Hastings) are accurate.”
Meanwhile, a May 22, 1990, letter from Wackenhut lawyer Richey to Alyeska’s Wellington and Among other things, the letter discusses the legality of surreptitiously taping conversations with “the congressman” in Washington, Virginia and Maryland.
It concludes: “In light of the risks, we believe that additional research and analysis is necessary before you make a commitment to approve the use of covert operatives against a congressman or before you refer the matter to the FBI.”
The letter contained no clear recommendation against such a probe, though Richey testified that was the intended message.
Richey and George Wackenhut vehemently denied that Miller was ever a target of the secret probe. It was only when Hamel brought up Miller’s name in conversations with Black--who was posing as a sympathetic environmentalist--that the prospect of the covert probe touching on a member of Congress arose, they said.
Black immediately consulted Richey, who drafted the opinion, the lawyer said.
“Mr. Wackenhut met with Mr. Black the day after this was delivered, and he said, ‘I don’t need any more analysis,’ ” Richey said. “ ‘This has caught my attention, and we’re not going to do it.’ ”
But Miller saw it differently. “It appears to be much more of a road map through a thicket,” he said.
In other disclosures, the committee was told that:
* Wackenhut obtained the financial records of Dan Lawn, at the time an employee of the Alaska Department of Environmental Conservation, which has authority to regulate Alyeska’s operations.
* Wackenhut obtained detailed personal records, including a credit report, for a bartender in Valdez, Alaska, with whom Black and electronics expert Richard Lund had struck up a casual acquaintance.
