Mr. CARON. Yes, they did, but by the time they got to the zoning approval, the bombings had already started, the murders, the assaults began and people became so intimidated that they just began moving out and it just went overnight, it just went downhill.

Senator DANFORTH. Did any of these places, the organized crime places, have liquor licenses?

Mr. CARON. Yes; they did.

Senator DANFORTH. They had State liquor licenses?

Mr. CARON. City and State, yes.

Senator DANFORTH. That is, they have to, in Kansas City, get both State and city liquor licenses?

Mr. CARON. That is correct.

Senator DANFORTH. At the State level, the supervisor of liquor control does deny licenses to people who are of bad moral character or who are known criminals or consort with criminals and so on. Is the same true in the city of Kansas City?

Mr. CARON. Yes; it is.

Senator DANFORTH. Were these people able to get liquor licenses? Mr. CARON. Yes, using front groups and using people representing them, using other members of their family who had no record, and there was no legitimate reason to deny them licenses, using wives, brothers and organization's own people who were front owners representing these different groups.

Senator DANFORTH. If they were able to get in by getting liquor licenses through front groups and by buying up businesses and by being able to put in whatever they wanted without any zoning ordinances, what is the purpose of bombing? It would seem to me that that would just destroy their investment. Why would they want to drive people away?

Mr. CARON. I think initially they were not trying to do that, Senator. I think they tried it initially, one time, and before they could even recognize what they had done, it had already intimidated some people that they just pulled out.

Senator DANFORTH. Why would they want to do that at all? Why would they want to do it once?

Mr. CARON. I can't answer that. I know they did it.

Senator DANFORTH. Was the first bombing the crater-type picture that we saw?

Mr. CARON. What was the first one, Larry?

Sergeant WEISHAR. The fire at the warehouse lounge is the first one. It was an individual that was trying to be his own man in the area. He wasn't cooperating, using the services.

Senator DANFORTH. What sort of cooperation did they want? Sergeant WEISHAR. If you have jukeboxes, cigarette machines, liquor services, services provided by outfit-controlled companies, and you don't this fellow neglected, did not desire to deal with these people and as a result he was burned out.

Senator DANFORTH. So the bombings were not caused by trying to move into bars and strip joints and so on; the bombings were caused by having people not use the right jukeboxes and whatnot?

Sergeant WEISHAR. That is a portion of it. You have to understand that there were a lot of incidences at the outset of the River Quay in which everybody was interested in it. I am talking about legitimate

owners; the public was attracted to the Quay. Various situations caused the decline in the patronage in that area. So there was an economic loss to a lot of these bars and at the final stages, the bars were not profitable. You could go down at night at primetime at 11, and find 12 patrons in a tavern that you know the fellow had over $150,000 investment in.

Senator DANFORTH. I am just trying to figure out the reason for bombing.

Mr. CARON. Senator, the bombings were preceded by several murders and the bombings really began as the Quay began to deteriorate as a result of the murders. The other reason for the effort to go toward the combat zone is very simple. It is economic. A hardcore magazine depicting, and I know this from research we have done, depicting child pornography, which sells for $8, $9, and $10 in an adult porno shop, wholesales for $1. Prostitutes make $300 and $400 a night. Watered-down liquor is served at these establishments. They make tremendous profits, way in excess of what a legitimate night club would make.

So the profits toward the kind of combat zone are worth the risk because there is such a tremendous markup in that activity.

The prostitutes are making $300 and turning most of it over to their pimps. After a while they are hooked on drugs and they work for nothing.

Senator DANFORTH. Did the legitimate business people attempt to get ordinances passed by the city council?

Mr. CARON. It started, as I said earlier, as Mr. Bonadonna will explain, it started in that direction, but by that time it was too late and the Quay started going downhill. It was just, I think everybody in Kansas City fell asleep at the throttle. I think that is a safe state

ment.

Senator DANFORTH. How did legitimate business people try to protect themselves?

Mr. CARON. Through the city council, through the ordinances, trying to keep the increase in the taverns from happening, and by that time the murders began to occur, the beatings, the killings, and business just dropped off.

Senator DANFORTH. You mean there wasn't any real effort at all to get ordinances passed or to attempt to stop liquor licenses from being granted!

Mr. CARON. That is correct.

Senator DANFORTH. It was just a flash in the pan kind of combat. Mr. CARON. That is correct.

Chairman NUNN. We are going to get into a good bit of this tomorrow with our witnesses who will be here and testify about some of the details of the tactics used and what the business community and the people, legitimate businesses, tried to do and how that didn't meet with success.

Senator DANFORTH. Thank you.

Chairman NUNN. Senator Percy's staff would like to ask some questions and we will defer to you at this time.

Mr. BERK. I just have one question for the chief. In 1978, we conducted an investigation and held hearings on arson for profit, in which this subcommittee has a continuing interest.

Mr. CARON. I can't hear you.

Mr. BERK. I am saying in 1978 we conducted an investigation and held hearings on arson for profit. We have a continuing interest in that subject. You mentioned that you recently received grants from LEAA which included money for vertical prosecution. I would like you to explain exactly what a vertical prosecution is and why this is of assistance to your efforts.

Mr. CARON. Recently we had a series of fires; we apprehended two suspects. Right at the time of the arrest and at the time of the fires we were able to we have a prosecutor who has been funded through this grant. That prosecutor arrived at the scene and works with us and directs our officers in all of the legal implications. That prosecutor will follow that case all the way up through the system and ultimately prosecute it in court.

In this case, it is a woman. She is intimately aware of the case; she recognizes what evidence we need and how it is to be used and works with us all the way through. This is the kind of thing that has to be done to get good sound prosecution, at least until our officers and our people are trained to the point they can handle it alone.

Senator DANFORTH. Can I ask one more question?

Chairman NUNN. Go right ahead, Senator Danforth.

Senator DANFORTH. Chief, you mentioned in your testimony that one of the first go-go bars that was established in this area was an organized crime establishment which had to close down its original place of business because of urban renewal, redevelopment, and therefore, they moved to the River Quay area and did it with a HUD grant. Is that right?

Mr. CARON. That is correct.

Senator DANFORTH. I suppose then that HUD will just participate in any kind of relocation, whether it is a topless bar or not? HUD would do that?

Mr. CARON. I don't think that is the only one. I think there are several more like that in Kansas City that are scheduled for significant HUD loans for relocations because they have destroyed 12th Street from Wyandotte to Central where they will put in a hotel. There are four or five of those places eligible for Federal money to be relocated. That is correct.

Senator DANFORTH. It doesn't matter who owns them or what they want to do with it?

Mr. CARON. Apparently not, Senator. That is true. They qualify for those loans.

Senator DANFORTH. What was that first establishment again?
Mr. CARON. Larry?

Sergeant WEISHAR. Doris Cammisano owned the bar at 12th Street called the Pink Pussycat and her license was transferred to the bar called the Sport.

Senator DANFORTH. Doris Cammisano is the wife of

Sergeant WEISHAR. Joe Cammisano.

Senator DANFORTH. Doris Cammisano, does she herself have a criminal record?

Sergeant WEISHAR. NO.

Senator DANFORTH. Does her husband?

Sergeant WEISHAR. He was convicted 2 years ago in connection with the intimidation on Mr. Bonadonna.

Senator DANFORTH. But prior to the relocation of the bar, did he have a criminal record?

Sergeant WEISHAR. Yes, sir. He did. That is why the license was in his wife's name.

Senator DANFORTH. That was the State license and also a local license?

Sergeant WEISHAR. Yes.

Senator DANFORTH. Thank you.

Chairman NUNN. Senator Percy requested we defer until 11:45 before we begin our next witness. We will take about a 5-minute break here and then come back for our next witness.

[Brief recess.]

[Members of the subcommittee present at time of recess: Senators Nunn, Eagleton, and Danforth.]

[Member present after the taking of a brief recess: Senator Nunn.] Chairman NUNN. Mr. Ouseley, could you give us your present position and tell us a little bit about your background?

Mr. OUSELEY. Yes, Senator. I am currently assigned to the Kansas City, Mo., field division of the FBI. I have been assigned to that Division since 1964. I have worked that entire time, that 16-year span, in the organized crime and racketeering field and I am in my 20th year as an FBI agent.

Chairman NUNN. We have heard Chief Caron refer to the violence in the River Quay area. Did this violence lead to a recent effort to investigate the Kansas City outfit by the FBI?

Mr. OUSELEY. The River Quay case was a catalyst for such an investigation initially. We assisted the Kansas City, Mo. Police Department in the local murder case involving David Bonadonna and that, then, quickly led to an expanded investigation into the extortion and tactics employed in the River Quay case we successfully brought to a conclusion. That was the catalyst for our stepping further into an investigation of the entire enforcement arm of the Kansas City criminal organization.

Chairman NUNN. Does the pattern of mob killings make it difficult for law enforcement to prosecute them successfully and to detect them?

Mr. OUSELEY. Senator, the pattern of these mob killings is designed for that very purpose. These killings have been meticulously planned down to the minutest detail and they are executed by people who are professional in that field. The effect has been to eliminate the risk to the killers themselves from the intended victims and eliminate the risk of law enforcement detection. Generally, where the intended victim cannot be lured to his death, which is the preferred manner of operation, then the victim must be stalked and his routine is documented so that they can select the proper location which is most opportune for safety and the execution of the plan.

[At this point, Senator Danforth entered the hearing room.]

Mr. OUSELEY. And what is interesting is that to stalk these victims they must employ many of the same physical surveillance techniques and use of equipment as law enforcement uses. We have found those

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techniques to be successful, not only in past killings, but in a string of killings that we based our investigation on.

Chairman NUNN. Has the FBI, at the request of the subcommittee, provided the subcommittee with affidavits filed in the Federal court relating to certain interceptions?

Mr. OUSELEY. Yes, we have, Senator.

Chairman NUNN. Is this one of the techniques you employed to investigate mob violence?

Mr. OUSELEY. The situation I just described that made the detection and development of evidence in gangland murders, made it abundantly clear that our only real avenue of penetrating this mob aspect and obtaining the necessary evidence would be the use of title III status which is the Federal electronic surveillance law and the affidavits you refer to, the first one was filed on May 5, 1978, in the western district of Missouri, designed and directed against mob violence, and we had virtually continuous electronic surveillance from that time, May 5, 1978, to February 14, 1979.

Chairman NUNN. Did this electronic interception disclose the mob plans to murder former mob associate named Carl Spero?

Mr. OUSELEY. The electronic surveillance most certainly did develop evidence of this particular planned murder. You have briefly, by way of just brief background, if you will, you have briefly been told about the Spero murder, and the slides were shown. Three Spero brothers were obviously marked for murder and were located at a bar in May 1978, all there at the same time and a most opportune situation. After the team went into the bar to carry out this contract murder, and the shooting was over, Mike Spero was dead, Joe Spero was wounded, and the third brother, Carl Spero, was left paralyzed after being shotgunned in the street as he attempted to escape.

By the fall of 1978, we were receiving information that we catalogued in our affidavits to the effect that Carl Spero once again had been marked for a gangland murder.

Chairman NUNN. He was the one that survived?

Mr. OUSELEY. He was the one that survived and had been left paralyzed. He had been marked for murder again in that an attempt on one of the ranking Kansas City criminal organization people, an attempt on his life had been laid at Carl Spero's doorstep. This made it abundantly clear that he must be eliminated once and for all.

Our electronic surveillance provided evidence of the various parts of the plan to kill Carl Spero. One segment of this plan was the importing of a specially designed weapon to be used in the murder, importing this weapon from Las Vegas, Nev.

Chairman NUNN. Did the electronic interceptions ever disclose an actual meeting of mob members to discuss the elimination of Carl Spero?

Mr. OUSELEY. Senator, on November 26, 1978, a meeting was held in the private residence in the Kansas City. Mo., area and at the outset of this meeting Nick Civella and Carl Civella, two of the ranking members of our organization, sat down together to discuss the situation involving Carl Spero. I don't think I can do much better at this point than to use their very words that we intercepted by a courtauthorized monitoring device and these are quotes, verbatim quotes,