How The FBI Conceals Its Payments to Confidential Sources
The FBI’s Secret RulesThe FBI’s Secret Rules
President Trump has inherited a vast domestic intelligence agency with extraordinary secret powers. A cache of documents offers a rare window into the FBI’s quiet expansion since 9/11.
In a Southern California courtroom in September 2014, defense attorney Jeffrey Aaron pressed an FBI informant named Mohammad Hammad about the hundreds of thousands of dollars in payments he’d received from the government.
“Did the FBI ever say, ‘Mr. Hammad, there’s a limit to how much we can pay you on one case’?” Aaron asked.
“No, sir,” Hammad answered.
“So as far as you know, there’s no limit to how much you could get paid on this case?” Aaron followed.
“I don’t know, sir,” Hammad responded.
“Is there a limit as to how much you could be paid working for, as an FBI informant, on all of your cases?”
“I don’t know, sir,” Hammad repeated.
Aaron was deploying a well-worn tactic among lawyers defending cases involving FBI informants: suggest to the jury that the informant is primarily motivated by money. Hammad had led an FBI counterterrorism sting in Southern California that targeted four men, including Ralph Deleon, a citizen of the Philippines, and Sohiel Omar Kabir, an Afghanistan-born U.S. citizen. By Aaron’s calculations, Hammad, who previously had been convicted of aiding a conspiracy to manufacture methamphetamine and was later released from immigration custody to help the FBI, had received $380,000 in government payments for his work on that one case alone.
Hammad isn’t the only handsomely compensated informant working for the U.S. government. Defense lawyers have long known that informants can earn tens of thousands, even millions, of dollars. Shahed Hussain, a prolific FBI informant, received $96,000 for his work in the Newburgh Four case. Naseem Khan collected $230,000 following a counterterrorism sting in Lodi, California. In the course of a 20-year career as an informant for the Drug Enforcement Administration, IRS, FBI, and Department of Homeland Security, Alex Diaz has taken in more than $4.9 million.
For the first time, we can now point to an internal government document that provides the framework for how informants are paid.
The FBI’s Confidential Human Source Policy Guide, a nearly 200-page manual classified secret and obtained by The Intercept, describes how payments to FBI informants are accounted for and authorized and how these payments can quickly become serious money.
The picture that emerges is of an approach that borrows some of the sophistication of modern banking. The bureau has devised a variety of ways to pay informants, including directly, before or after trial; via reimbursements; and through a cut of asset forfeitures. The guide provides some options that are clearly preferable when trying to sway a jury at trial, even as it explicitly disclaims selecting them for such reasons.
Dressed in his undercover Islamic clothing, Craig Monteilh was recruited by the FBI to spy on Muslims. (Photo by Gina Ferazzi/Los Angeles Times via Getty Images)
Craig Monteilh worked undercover as an informant for the FBI by spying on mosques in Southern California.
Photo: Gina Ferazzi/LA Times/Getty Images
The FBI’s Confidential Human Source Policy Guide makes clear what anecdotal evidence in criminal cases has suggested: Informants can make a lot of money working for the bureau.
A special agent-in-charge has the authority to pay each of his office’s informants up to $100,000 per fiscal year. However, informants may earn substantially more as long as each additional $100,000 is approved by successively higher levels within the bureau. With deputy director approval, according to the policy guide, an informant may earn more than $500,000 per year.
In addition to compensation, an informant may be eligible for 25 percent of the net value of any property forfeited as a result of the investigation, up to $500,000 per asset, according to the guide. This can be a particularly lucrative benefit for drug informants, whose cases sometimes result in the forfeiture of planes, boats, cars, and real estate.
Martin Stolar, a New York criminal defense lawyer, said large payments are a way for FBI agents to control informants, many of whom are criminals who might otherwise readily break an agreement. “They justify payments to informants by saying it’s for the greater need, for getting inside information,” Stolar said. “It’s dirty business, but it’s not illegal.”
Payments to informants are a thorny issue for the bureau, because agents know defense lawyers will use the payments to question the credibility of an informant while he or she is testifying, pointing to the money as a way of suggesting that the informant will say anything for a payday.
There are two types of payments available when a case is active: expense reimbursements and payments for services.
The policy guide allows for plenty of wiggle room in expense reimbursements, creating opportunities for agents to disguise service payments as reimbursements. The guide permits informants to be reimbursed for, among other things, housing costs, vehicles and transportation, meals, equipment, and even medical bills.
It’s in the interest of the FBI and prosecutors for payments to be seen as reimbursements, not compensation, according to Stolar. “What it looks like otherwise is a person whose testimony has been bought, just a straight-up bribe,” Stolar said. “If it’s described as an expense reimbursement, then it’s more defensible.”
The FBI policy guide implicitly acknowledges this temptation, instructing agents not to consider the effects at trial when paying informants. “In determining the way to classify a particular payment to a (source) as a service or an expense, the (case agent) should not consider whether or not that classification might result in a basis for an impeachment at trial,” the policy guide reads. An FBI spokesperson said that the bureau prohibits service payments from being classified as expense reimbursements.
Craig Monteilh, a bodybuilder who worked undercover as an informant for the FBI by spying on mosques in Southern California, said he received $177,000 from the FBI over a one-year period. Monteilh said that his compensation was disguised as expense reimbursements. He said he provided receipts for everything — rent, car payments, gasoline, medical bills, food, even for the steroids he was taking — to justify an $8,200 monthly expense bill.
“Most informants are criminals. So the FBI gets that,” Monteilh said. “They know that I’m going to get the bill for lunch, even if someone else pays for it, and I’m going to say I paid for it. That includes the movies, the theater, going to an Angels game — everything. I’m paying for everything, even though I’m really not.”
That’s how the informant payment game is played, Monteilh said, and the FBI is a sober and willing player. “Everything they do is based on covering something up if it goes to trial,” Monteilh said. “They always told me that 98 percent of cases do not go to trial, but if indeed this one does, then all these payments are for reimbursements.”
Monteilh and the FBI cut ties years ago, after he went public with claims of warrantless surveillance of Muslim communities. Monteilh’s information prompted the American Civil Liberties Union and others to file a class-action lawsuit against the FBI for alleged constitutional violations. The U.S. Department of Justice largely dodged the lawsuit by asserting the state secrets privilege.
Under oath and on the witness stand, Hammad, the FBI informant, described a similar method of disguising payments as reimbursement, though he was less forthcoming than Monteilh. He admitted that the FBI was paying his personal living expenses and even the maintenance on his car. Aaron, the defense lawyer, asked him about an FBI check for nearly $4,000 that was labeled “miscellaneous.” Hammad couldn’t remember what the payment was supposed to cover.
“You can’t remember receiving $3,806?” Aaron asked him.
“I can’t remember every penny I get,” Hammad said.
In addition to expense reimbursements and service payments, the FBI has a third, potentially more lucrative option for informants.
At the conclusion of a case, agents may offer “lump-sum payments” to informants, according to the confidential informant policy guide.
These payments must be approved by the special agent-in-charge. Their total size may be influenced by the value of any seized property.
Peter Ahearn, a retired FBI special agent who headed the field office in Buffalo, New York, said that in cases that go to court and require an informant to testify, lump-sum payments are generally provided after the trial. This practice saves the informant and federal prosecutors from having to disclose the full amount of compensation an informant will receive and thereby limits a defense lawyer’s ability to undermine the informant’s credibility. (The document does not specify the timing of these payments in relation to the trial.)
Ahearn described this as a long-standing practice at the bureau. He said agents are more likely to refer to these payments as “performance incentives” than “lump-sum payments,” the language used in the policy guide.
“Source payments come at the end,” Ahearn said. “That’s the way it’s always done. You never tell your source how much he’s going to get at the end of a trial. You just wink and nod, and say, ‘Hey, we’re going to take care of you at the end.’”
The wink and nod allow informants to testify, without fear of perjury, that they do not know if they will receive additional compensation from the FBI.
That’s what happened in Hammad’s testimony in Southern California. Aaron, the defense lawyer, couldn’t nail the informant down to answer whether he expected to receive one of the FBI’s lump-sum payments after the trial.
“Aren’t you hoping that you’ll get a bonus for your work in the case when the case is done?” Aaron asked.
“No, sir,” Hammad answered.
“You know of other FBI informants who have gotten bonuses, right?”
“You’ve gotten bonus payments in other cases, haven’t you?”
“Are you quite sure about that?” Aaron pressed.
“Not that I remember,” Hammad said, softening his position.
“So you could have gotten bonus payments; you just don’t remember?”
“I don’t recall,” Hammad answered. “I don’t remember.”