PREPARED TESTIMONY OF JOHN DION
ACTING CHIEF
INTERNAL SECURITY SECTION
CRIMINAL DIVISION
DEPARTMENT OF JUSTICE

BEFORE THE SENATE JUDICIARY COMMITTEE
SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT AND THE COURTS

April 12, 2000

Mr. Chairman and members of the Subcommittee, I am the Acting Chief of the Internal Security Section. I held that position in the fall of 1997 as the Peter Lee case was being considered for prosecution. As Mr. Keeney noted, I have devoted most of my career to prosecuting espionage cases. In all I have been involved in the prosecution of more than 70 defendants charged with espionage or other Internal Security offenses.

Let me discuss briefly the background of my involvement in the Peter Lee case. In August of 1997, I was advised by an FBI agent from headquarters that Lee had recently been interviewed by agents of the Los Angeles FBI office and was believed to have made false statements. I asked that steps be taken to get the United States Attorney's Office briefed on the case and I assigned Mr. Liebman, the line attorney in the Section with the most experience in espionage cases, to monitor developments in the investigation.

When we learned of Lee's admissions in his interviews with the FBI in October, I asked Mr. Liebman to travel to Los Angeles to work directly with Mr. Shapiro and the agents. Over the ensuing weeks, I had numerous conversations with Mr. Shapiro and I was kept apprised by Mr. Liebman of the inquiries being made on classification issues and the searches of open source materials.I should note that these inquiries are made in every espionage case considered for prosecution. In turn, I regularly briefed my supervisor, Deputy Assistant Attorney General Mark Richard on all significant developments.

On October 23, 1997, I attended a meeting at the Department, chaired by Mr. Richard to discuss the case with Mr. Shapiro and his supervisor, Mr. Drooyan, and agents from Los Angeles and FBI headquarters. The facts and the issues as we understood them at the time were discussed at length.

In late November or early December I received approval from Mr. Richard to authorize Mr. Shapiro to engage in plea negotiations with counsel for Lee in the following terms. Mr. Shapiro was authorized to seek a plea of guilty by Lee to a violation of 18 U.S.C. Section 793(d) for his 1985 disclosures and to a violation of the false statement statute, 18 U.S.C. Section 1001. As such a plea would require Lee to waive the ten-year statute of limitations, Mr. Shapiro was authorized to advise counsel that no final decision had been made as to the prospect of charging Lee with a violation of Section 794. I conveyed these terms to Mr. Shapiro by telephone.

In closing, I would note that we fully anticipated that Lee would receive a sentence of incarceration for his plea. I believe that Mr. Shapiro vigorously represented the government in the papers filed with the court and in his allocation. We were, of course, extremely disappointed in the sentence imposed. But I am proud that we put a stop to Mr. Lee's disclosures. And I am very proud of the work done in this case by Michael Liebman and Jonathan Shapiro.