The FBI: Just How Incorruptible?

Attorney General Edward Levi let it be known that he considered the matter "extremely serious." To officials of the Federal Bureau of Investigation, Levi's comment was a monumental understatement. "Extremely serious in a pig's eye," said one. "It's a disaster." What the officials were referring to was a new investigation ordered by Levi into charges of corruption in the FBI'S ranks--for the first time in the bureau's long and virtually corruption-free history.

The hints of FBI wrongdoing began circulating late last year, soon after the House Intelligence Committee learned that there might have been irregularities in the granting of FBI contracts. Then, two weeks ago, the Los Angeles Times disclosed that Levi had rejected the FBI'S own investigation for not probing hard enough and demanded a brand-new inquiry, supervised directly by the Justice Department.

Poker Games. A witness at the House Committee probe stirred the original tempest. Martin Kaiser, a Maryland electronics manufacturer, told the committee that he shipped bugging devices to the FBI through the U.S. Recording Company, which since 1938 has supplied the FBI with electronic surveillance equipment. Owned by Joseph Tait, the firm operated as a "cut-out," or front, for the FBI'S purchase of eavesdropping equipment; the idea was to prevent targets of wiretapping--such as gangsters or spies--from learning the bureau's capabilities simply by examining government purchasing records. Kaiser said he discovered that Tait routinely hiked the price of the equipment he delivered to the FBI by more than 30%.

The House Committee--and soon the Internal Revenue Service--focused on the role of John P. Mohr, an assistant director of the bureau, who retired in 1972. Mohr headed the office at the FBI that bought the equipment. He also had close ties to Tait, who was a regular at the poker games organized by Mohr at the exclusive Blue Ridge Club in West Virginia's Shenandoah Mountains; but last November the club and some of its records were destroyed in a fire whose origin is still undetermined.

Last fall, on the orders of FBI Director Clarence Kelley, the bureau began a further inquiry into Mohr's activities. TIME has learned that the probe was quickly suffocated by the impenetrable blanket of secrecy under which Mohr operated.

Levi apparently became suspicious of the probers themselves after they decided at the end of an eight-week inquiry that Mohr had merely used bad judgment but had done nothing wrong. In the FBI, the men who supervised the investigation were known as "Mohr's clique." They included Associate FBI Director Nicholas P. Callahan, his two deputies, Thomas J. Jenkins and James B. Adams, Administrative Chief Eugene W. Walsh and Inspection Division Chief Harold W. Bassett.

Levi's dramatic decision to start a second investigation, with entirely new inspectors, TIME has learned, represented a deliberate and unprecedented decision by the Attorney General to strip his top deputies of their authority over the case. According to some FBI agents, Levi's decision shook up the bureau far more than the recent congressional inquiries into abuses of the FBI'S power. "Look," explained one agent, "the guys who sanctioned that report are the bosses of the FBI. They supervise the investigations, administrations and internal inspections of the bureau--the whole shebang. If they goofed, or whitewashed, or covered up a case as sensitive as that, what have they done with others?" This same cadre of officials, for example, failed last year to find the bureau man who, after the assassination of John F. Kennedy, ordered a Dallas agent to destroy a note written by Lee Harvey Oswald before the killing.

Swift Action. Levi's new probe will be completely independent of the Mohr clique. TIME has also learned that if any evidence is uncovered to show that the Mohr clique slanted the first report, Director Kelley is expected to take swift action against the group. In addition, sources have revealed that the probe has widened into other areas of possible wrongdoing. Among the charges being investigated:

> Some FBI officials received kickbacks on the business bestowed by the FBI upon Tait.

> Illegal transactions took place in the buying of cars.

> Questionable practices occurred in the administration of health and travel insurance programs for the FBI.

> The missing personal files of former Director J. Edgar Hoover, which were burned at the Blue Ridge Club fire, were said to include dossiers on U.S. Supreme Court Justices.

> FBI inspectors pressured Kaiser, the Maryland electronics manufacturer, to change his testimony about price markups before the House Intelligence Committee last fall, but Kaiser refused.

Both Tait and Mohr insist that there is nothing improper in their relationship. Their associates add that both "are cooperating fully" in the second investigation. However, Tail's firm will no longer function as an FBI "cutout" until the investigation is completed. Justice Department officials are now hoping that the new investigation may prompt Kelley to take a long step toward completing the housecleaning that began after J. Edgar Hoover's death in 1972.

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