Custom Officials' Conduct Queried in Hayward Drug Bust

Supervisor shot videotape for NBC News

By Jim Doyle Chronicle Staff Writer Saturday, November 9,1991

Undercover agents who secretly monitored a Hayward warehouse in the "China White" heroin case took unprecedented steps to help an NBC News crew shoot videotape footage of the federal probeŞleading defense lawyers to complain of governmental misconduct.

Attorneys representing the five people who now await trial on heroin smuggling charges in the recordİbreaking case assert that Customs Service agents wrongfully aided NBC, resulting in pretrial publicity that was damaging to the defendants.

During the investigation, a Customs Service supervisor used a NBC News camera to shoot network footage of undercover agents at four key areas, according to papers filed in U.S. District Court in San Francisco.

The arrangement had the blessing of top officials at Customs headquarters in Washington,the records say.

"Something's very wrong here," said John Runfola, a San Francisco lawyer who represents defendant Lucy Chen. "It runs the risk of interfering with my clients right to a fair trial."

The monthİlong surveillance of the Hayward warehouse followed the May 20 seizure of 1,080 pound of almost pure heroin at the Port of Oakland, "the largest heroin seizure in U.S. history.

The heroin, hidden in a load of plastic bags, was shipped aboard a container ship from Bangkok.

The government insists that its hands were tied in the matter because NBC learned of the heroin seizure and threatened to air a news story immediately unless it was given exclusive rights to videotape surveillance of the Hayward warehouse where the heroin was sent.

Customs authorities "agreed to the arraignment reluctantly and only because they considered the arrangement a lesser evil than immediate publication, which inevitably would have precluded successful investigation into the persons responsible for importing the heroin," Assistant U.S. Attorney John W. Kennedy said in court papers.

A San Francisco based Customs agent who did not want to be named said that the deal with NBC jeopardized the undercover investigation.

"When I heard about it, I couldn't believe it was happening. It could have really burned us," he said.

Customs supervisors met an NBC News crew at the San Francisco airport on May 23 and took them to the Hayward warehouse, court papers said.

In the next three weeks, the news crew returned several times to the warehouse to shoot footage of the suspects.

With permission from headquarters, Steve Davis, assistant special agent in charge of the U.S. Customs Service in San Francisco, agreed to use an NBC News camera to shoot footage of the inside of the warehouse.

He shot four "test segments" of agents at staging grounds, but later decided against filming the warehouse's interior for the network.

Instead the Customs Service tipped off NBC on June 20, the day the warehouse was searched and four defendants were arrested. NBC aired a report on the heroin bust that night, which included footage of the defendants' earlier visits to the warehouse, their arrests and surveillance shots from a helicopter.