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Mr. HUBBARD. The subcommittee now stands in recess. [Recess taken from 1:35 p.m. until 2 p.m.]


Mr. HUBBARD. The subcommittee will again come to order.
Our apologies for being later than we anticipated.

Our next witness is Hon. Richard J. Davis, Assistant Secretary of the Treasury, Enforcement and Operations.

It is a pleasure to have you, Mr. Davis, to testify before our subcommittee and it is a pleasure to have the visiting Members of Congress who are sitting in with us.



Mr. Davis. Thank you very much, Mr. Chairman and members of the subcommittee.

We are here today in response to your request for testimony concerning various investigations conducted by Treasury law enforcement agents into a series of firearms transactions in Miami, Fla. These investigations, which are still ongoing, have resulted in one indictment which is now pending in the southern district of Florida. Some aspects of this matter are now before the Grand Jury.

In appearing here today, there are two considerations about which the committee should be aware.

First: Because the underlying facts involve evidence in both a pending trial and an ongoing investigation, we are seriously restricted as to what we can say in public session. As described previously to the committee staff, our public testimony will be limited to describing those materials already formally in the public record. To do otherwise could jeopardize the ability of the United States to conduct the trial of this matter and to successfully complete these inquiries, consequences neither we, nor we are sure, the committee, desire.

Second: Since these events are still under investigation, the state of our knowledge is necessarily in flux and, as to some aspects, incomplete. With these cautions in mind, I would like to describe the current state of these investigations.

An indictment was filed in Miami charging Jose Pujol, an employee of Air Panama, Carlos Wittgreen, a Panamanian, Walter McComas, an exporter, James Howell, owner of Public Safety Associates, and Jose Alvarez, firearms dealer, with conspiring to violate the Gun Control Act by dealing in firearms without proper licenses and with failing to maintain required records.

Mr. Alvarez was also charged with certain recordkeeping violations. The transactions referred to in the indictment included .30caliber M-1 rifles, pistols and ammunition. The indictment states that a number of these firearms were transported to Panama. While an affidavit filed in connection with the arrest of Mr. Pujol quotes him as saying these weapons would be going to Nicaraguan guerrilla forces, the indictment does not contain this allegation and the case filed does not specifically relate to any export violations.

The affidavit also refers to the participation of the Panamanian Consul in Miami, Edgardo Lopez, in these violations. These documents are attached to my statement.

In addition, a related investigation is also in progress concerning certain weapons which were shipped from Miami to Panama under legal licenses issued by the Office of Munitions Control in the State Department.

The licenses authorized shipment of 250 weapons to Caza y Pesca-hunting and fishing--a company in Panama. Certain weapons traced to these shipments, we have been informed, have been seized in Nicaragua.

The purpose of this investigation is to determine whether there has been any criminal violation of the Arms Export Control Act by diverting weapons contrary to the terms of the license. Some of the weapons brought to this country by Nicaraguan officials in the last several days are involved in this inquiry.

This completes my prepared statement. Consistent with the limitations existing on what can be said in public session, I will be prepared to answer any questions you may have.

Mr. HUBBARD. Thank you, Mr. Secretary.

It is the subcommittee's understanding that a criminal action is pending in the U.S. District Court for the Southern District of Florida, regarding alleged conspiracies to wrongfully introduce firearms into foreign commerce, and that the pendency of that case will necessarily circumscribe some of your responses.

Is that correct?
Mr. Davis. That is correct.

Mr. HUBBARD. The Chair wishes to reiterate that the subcommittee will in no way jeapordize, undermine or influence that pending proceeding; and will make every effort to elicit facts already in the public domain which will not materially hamper the prosecution of that case.

With that understanding, would you please outline for the subcommittee the facts surrounding the issuance of the indictments in the case of U.S. v. Pujol?

Mr. DAVIS. As I referred to in summary form in my opening statement, that indictment was filed in the southern district of Florida. It was filed on May 9, 1979, and the arrests were made over the ensuing days of four of the five participants.

Generally, it describes and alleges that a conspiracy beginning on or about August 1, 1978, up to and including the end of January 29, 1979, took place and that these various defendants participated in that conspiracy which involved dealing in firearms when they were not licensees, and not, therefore, allowed to do so.

The indictment goes on to allege that these firearms or a substantial portion of them, were then transported in foreign commerce from Miami to the Republic of Panama.

I should say, however, as I referred to in my opening statement, that the offenses charged in this case are not export violations.

The indictment then describes in a series of overt acts, numbering 20, many of the various transactions in terms of numbers of firearms, in some cases giving a specific description such as the .30caliber M-1 rifles, and where they were purchased from, and who



the various people who participated in some of the meetings at various gun shops were.

As I say, the indictment is attached to my statement. And I think that summarizes the gist of what the offense is.

Mr. HUBBARD. The indictment alleges that the five defendants, including James Howell and Jose Antonio Alvarez, commenced purchases of firearms on August 8, 1978, and engaged in 20 separate transactions until January 29, 1979, in violation of section 371 of title XVIII United States Code.

Is that not correct?

Mr. Davis. It does start with transactions on August 8 and continues to the date you described. I am not clear that it is precisely 20 transactions, because some of the listed 20 items may overlap and relate to different stops relating to the same transaction.

Mr. HUBBARD. Mr. Davis, are you familiar with the affidavit filed in Miami Federal court by special agent Donald R. Kimbler of the U.S. Bureau of Alcohol, Tobacco, and Firearms, on April 27, 1979?

Mr. Davis. Yes, sir, I am.

Mr. HUBBARD. And can you share your knowledge of that with us?

Mr. DAVIS. That affidavit was prepared in support of an arrest warrant which was issued for Mr. Pujol. It describes a series of transactions involving Pujol, Mr Edgardo Lopez, the Panamanian Consul in Miami, and -

Mr. HUBBARD. Let's stop at that point.
You are referring to who now? Mr. Lopez?

Mr. Davis. That is right. The affidavit refers to a Mr. Edgardo Lopez.

Mr. HUBBARD. How do you spell his first name?

Mr. Davis. E-d-g-a-r-d-o. And he is identified in the affidavit as being the Panamanian Consul in Miami.

Mr. HUBBARD. The Panamian Consul in Miami?

Mr. DAVIS. According to the evidence, he was, at the time of these events.

Mr. HUBBARD. This was filed in Miami Federal court by special agent Donald R. Kimbler, U.S. Bureau of Alcohol, Tobacco, and Firearms?

Mr. Davis. That is correct.
Mr. HUBBARD. It was filed April 27?
Mr. Davis. That is correct.

Mr. HUBBARD. According to the Kimbler affidavit, Jose Pujol returned to the Garcia National Gun Shop with one, Edgardo Lopez, the Panamanian Consul in Miami.

In addition, the affidavit states, and I quote--do I quote correctly?-“Lopez signed ATF Forms 4473 for the weapons Pujol had ordered earlier. Pujol later returned and received the weapons he had ordered."

Is that correct?
Mr. Davis. That is correct.

Mr. HUBBARD. The affidavit also describes joint visits by Consul Lopez and Alvarez on November 7 and 9, 1978. Is that correct?

Mr. Davis. Yes. On November 8, 1978, Mr. Lopez again entered the Garcia National Gun Shop.

Mr. HUBBARD. According to the same Kimbler affidavit, agent Kimbler further indicated, and I quote:

Lopez stated to me that he has been involved in at least 7 firearms transactions with Pujol and Alvarez, which involved the purchase of over 200 firearms to be exported from the United States. Lopez said he had received such instructions from an official of the Panamanian G2, an intelligence agency for the Republic of Panama.

Did I quote this correctly?
Mr. Davis. You did quote the affidavit correctly.

Mr. HUBBARD. The subcommittee's investigative staff has been told that ATF special agent John Spiedell visited the Panamanian Consulate and interviewed Lopez, and it has been suggested to the staff that Lopez admitted to agent Spiedell that he had been active in an official capacity as an agent of the Panamanian Government when he carried out the weapons transactions described by agent Kimbler.

Would you please outline for the subcommittee the SpiedellLopez interview.

Mr. Davis. Because there is a pending trial here, I would really not be in a position to describe that interview, since that is not part of the public record.

I would refer again, however, as you previously quoted, that in the affidavit of Donald Kimbler, who works for special agent Spiedell and I believe was with special agent Spiedell, filed in Miami, he did make the statement you previously quoted.

Mr. HUBBARD. I quoted it correctly, and there was indeed an interview between Spiedell and Lopez?

Mr. Davis. That is correct.
Mr. HUBBARD. Where is Mr. Lopez now, Edgardo Lopez?
Mr. Davis. We do not know.
Mr. HUBBARD. He has disappeared?

Mr. Davis. I presume that he went back to Panama. He is a Panamanian citizen, and we presume he is in Panama.

Mr. HUBBARD. According to a May 28 story from the Miami Herald, written by Joe Crankshaw and Sam Jacobs:

Kimbler and Spiedell, an ATF supervisor, marched into the Panamanian consulate in Miami. They wanted to know what was up. They had lots of records.

Lopez, the consul, admitted he knew of about seven shipments. He said he had received instructions from an “official of the Panamanian G-2”, the agency supervises spies, security police, and military intelligence.

Lopez does not live in Miami anymore. He left in a hurry the day after the interview.

The G-2 official, it turned out was Colonel Noriega. It is easy to tell that he is in the spy business. The insignia on his stationary is a pair of binoculars.

Is that substantially correct?

Mr. Davis. Again, all that we can really say, is that, Mr. Lopez is quoted as having said that he received instructions from officials of Panamanian G-2, the intelligence agency of the Republic of Panama.

I don't think we can go beyond that, especially when we are responding to newspaper articles. I don't think that can be taken as confirming or denying particular aspects of it, because I think the committee would not want us to be selective and answer things only to our advantage.

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