newspaper. Two cars were roaring down main streets on the east side of Saginaw having a shootout. A fellow was shooting with a rifle at the first car. Neighbors in the area were diving for cover; a little girl got hit in the hand with a bullet. The man who drove the first car who was being shot at managed to escape. Later, he told the newspaper he had no idea why he was being shot at. That man was presently under indictment for narcotics trafficking, and our local press did not pursue that angle.

These are some of the things that have been happening in the Saginaw, Mich. area. Where has the Drug Enforcement Administration been? We found out that in 1974 the Drug Enforcement Administration sent an intelligence team into Saginaw, Mich. to get an assessment of the narcotics problem. We had to use the Freedom of Information Act to try to get part of that intelligence assessment out of the Government agency, so that we could try to get some coherent facts as private citizens about what was happening in Saginaw, Mich.

Here is what they concluded, and let me read to you from their confidential report. This report is dated July 2, 1974; it is entitled "Narcotics Trafficking in the Saginaw-Bay City Area." This is an internal document of the Drug Enforcement Administration.

It states here, "Addict Population: One, the addict population is unquestionably the highest that RIU-regional intelligence unitagents encountered in their geographical profiles of other cities in Michigan." Three different sources have placed the hardcore opiate population at between 4,500 and 8,000 users.

Two, the racial composition, broken down by percentage, of the Saginaw hard-core addict population is 55 percent black, 30 percent caucasian, and ten percent Mexican-Americans. Although the Mexican-American trafficker controls the distribution and supply of heroin in this area, they make up only ten percent of the total drug abusers in the community. Outside of the immediate metropolitan area of Saginaw, the heroin user level drops off to less than two percent.

The report continued on and took a look at drug prices in our community. The report continued on, stating that Saginaw, Mich. was, "the narcotic emporium of Michigan." The report ended up concluding that the Drug Enforcement Administration should authorize a branch office in the Saginaw, Mich. metropolitan area. The Drug Enforcement Administration never did.

In 1978 I met with Ted Vernier, who was the Director of the Drug Enforcement Administration office in Detroit, to ask him about this. At that time, Ted expressed a surprise that there was a narcotics problem in Saginaw, despite these reports. We later had a series of meetings with Ted and with other DEA representatives, including Pete Bensinger, and we found them to eventually be concerned about the narcotics problem in Saginaw. A second intelligence assessment team was prepared and brought in. We still have not been briefed as to what the result of that intelligence assessment was. We have had to find out through the grapevine what the DEA team turned up, and they concluded that because so many of the Mexican traffickers had been imprisoned because of vigorous action by the Michigan State Police, that Saginaw no longer really had a major heroin problem.

Well, there is one problem with that. A lot of those Mexican traffickers who were imprisoned because of the very good efforts of

the Michigan State Police are now getting out of jail, and they are back on the streets. One big one is a fellow named Francisco Zeferino Garnica, Jr.-a very important fellow, because at the time he was arrested in 1975, Michigan State Police people were estimating that he was bringing 2 to 3 kilos of high-purity heroin per week into our area. That is a hell of a lot of heroin. He is now back out on the streets; he just got out of prison very recently.

While I believe that the Drug Enforcement Administration has a problem with resources-and I genuinely do believe that I do believe that they have not spent nearly enough attention up in our area as they should have. I do believe that as the Mexican traffickers begin to get out of prison, we are going to see an increasing problem in our area.

Let me cover here just a couple of other matters, if I might. I know I am running over my time.

Senator DECONCINI. Mr. Clawson, do you have some charts you want to present to us?

Mr. CLAWSON. Yes; if we could have that easel set up, it would help.

Senator DECONCINI. I would like to see them.

Mr. CLAWSON. Let me pause just for a moment and we will put these charts up here.

[Pause.]

Mr. CLAWSON. As Mr. Cisky is putting the charts up on the easel, let me brief you about something that is taking place in our area. We have identified the following major organized crime factions operating in the Saginaw metropolitan area and the Flint, Mich. metropolitan area.

First, we have identified that there is a Black Mafia; it is a very loose confederation at the present time of policy operators, drug dealers, numbers racketeers, et cetera. There is no one, clear-cut leader; leadership roles seem to vary according to time and place.

However, one key figure in that is a man named Clarence Rice, who seems to lead a charmed life. He has had a number of narcotics convictions, but he has never served any real time in prison. He is located in Saginaw, Mich.

We have identified in the area a Mexican Mafia organization, with two key organizations, the Hernandez and the Torrez syndicates. We have identified in Saginaw, Michigan an organized crime syndicate known as the Billy Loiacano syndicate that we talked about earlier. Mr. Loiacano, by the way, recently was standing trial on Federal loan-sharking charges. The jury acquitted him of a couple of counts and declared a mistrial on the other counts, and he was going to have to be retried again shortly.

The funny thing was that his uncle, Tony Giacalone, who had also been indicted in that-before the trial, the evidence looked so strong that he copped a plea and got a 12-year prison sentence, but his nephew is back on the street.

We have identified an organization in the Flint, Mich. area known as the Shaheen organization, which is run by Joseph Shaheen, who we believe to be the leading figure in organized crime in the Flint, Mich. area. Mr. Shaheen is a nightclub operator; he has only one criminal conviction on his record, and that is a conviction

for contempt of court in 1970 for failure to testify before a grand jury investigating public corruption in the Flint area.

Mr. Shaheen reportedly is involved in gambling, narcotics and a number of other activities, according to the information made available to us through a variety of sources, but he has never been targeted out by a Federal agency for prosecution.

We have identified what is known as the Harry Mohney organization. This is an international pornography trafficking operation based in Durand, Mich., a small suburb of Flint, Mich. Harry Mohney is known to be the third largest pornography trafficker in the Nation. He recently was indicted as a result of some Miporn indictments of the FBI's in Miami.

Finally, we have identified an organized crime syndicate in the Flint, Mich. area which goes under a variety of names-among them the Wursing organization, which is believed to be run by a fellow named Craig Wursing. It is very interesting; Craig is up in his late twenties right now. About 6 years ago, he reportedly was stone-cold broke and had no money at all. Now he has resort properties outside of the United States; he has fancy cars and a big home, and he is believed to be running a $20 million a year cocaine and marijuana smuggling organization. His brother was recently indicted in Flint, Mich. for murder; the person who was murdered was his mother.

We have a series of charts detailed some organized crime activity in our area. The first chart is for the Elias Cortez organization. This was a multikilo, multiton heroin, cocaine and marijuana trafficking operation, headquartered in Lansing, Mich., which is about 80 miles

Senator DECONCINI. Mr. Clawson, I have to go vote in about 5 minutes. Can you finish up by that time?

Mr. CLAWSON. Yes.

This was a syndicate based in Lansing; it had operations in Mount Pleasant, Clare, and Saginaw, Mich. This organization was successfully prosecuted by a US attorney in Grand Rapids, Mich. in the Western District. Mr. Cortez is now serving a prison sentence, as well as some of the other people on the chart.

However, the financier of the organization, Richard L. Cor, a business executive from Lansing, Mich. that runs a construction company, was acquitted during the course of the trial, because the jury did not seem to believe the words of DEA informants, drug traffickers, et cetera, about the role that this man-such a respected man in Lansing, Mich. society-played in it.

The Elias Cortez organization was bringing marihuana up from Texas by the semitruckload full at the height of the organization. It operated nearly 10 years before the Drug Enforcement Administration and State police from the Lansing area targeted it for prosecution. Where was DEA? It was a class 1 trafficking organization.

[Chart No. 1 follows:]

Mr. CLAWSON. In the Metropolitan Saginaw area, we have prepared a chart identifying a number of organized crime figures. Many of these individuals are involved in narcotics trafficking; others are involved in syndicated gambling, loansharking, arson for hire, et cetera.

Among the key figures in the Saginaw area involved in narcotics trafficking are Clarence Rice, George Roach, Alfredo Salazar-and Salazar also has Mafia connections with La Cosa Nostra in Detroit-and Robert W. "Bob" Beets, who is considered a major fence in our area.

[Chart No. 2 follows:]