FBI'S UNDERCOVER OPERATIONS ON HOLD BECAUSE OF COURT RULING

PORTLAND, Ore. -- For nearly a year, the FBI and other law enforcement
agencies have been handcuffed in Oregon, constrained from launching
undercover operations as basic as sending an agent to buy drugs from a
suspected dealer.

The reason is an Oregon Supreme Court ruling that all attorneys --
prosecutors included -- must abide by state ethics rules against the use of
deceit.

Under Justice Department policy, undercover activities by federal agents
must be approved by prosecutors in the U.S. attorney's office. Since the
Aug. 17 ruling, the U.S. attorney's office in Portland has suspended some
undercover operations and has not approved any new ones for fear of
disciplinary action from the Oregon State Bar, which can disbar members.

"I consider this the single greatest challenge as U.S. attorney in Oregon.
It's a terrible problem," said Mike Mosman, interim U.S. attorney.

The FBI said the cases hampered include an undercover operation against
Russian mobsters, an investigation of adults who go into Internet chat
rooms to try to lure children into having sex, and a probe of a check fraud
scheme involving more than $1 million in losses in four states.

Beth Anne Steele, an FBI spokeswoman in Portland, said that because of the
ruling, if the FBI wanted to bust a drug dealer, "we'd have to walk up and
say: 'I'm an FBI agent. Here's $10,000. I'd like to buy some coke.'"

Caused by unrelated case

The ruling was triggered by an ethics case that had nothing to do with
prosecutors.

In 1998, the bar ruled that an attorney had violated ethics rules by posing
as a chiropractor while preparing a lawsuit against an insurance company.
The rules say lawyers must not engage in "dishonesty, fraud, deceit or
misrepresentation."

The state Supreme Court backed the bar last August. But the court went even
further.

Before the ruling, the Justice Department had asked the court to grant an
exemption for prosecutors to get involved in undercover operations. But the
court said the ethics rules apply to all members of the bar without exception.

Now, it's not just federal agents who are feeling the squeeze.

The state Attorney General's office has suspended undercover operations by
its consumer fraud and organized crime units.

County and city prosecutors are not directly involved in undercover
operations as often as federal prosecutors. But many are not even giving
advice to local law enforcement agencies about undercover operations.