Major HORRIDGE. Well, they furnish the same men under that contract. Senator BREWSTER. Are there just three titles? Major HORRIDGE. Yes, sir. Senator BREWSTER. I think you can just classify the thing under the three titles, then, as to the fee, the lump sum, and the out-ofpocket expense. I thing that is the way we usually classify it so that we will know what has been their net on the payments. Mr. FULTON. You gave the architect-engineers' fees of H. K. Ferguson on the Wolf Creek project, and I have here an amount which you didn't have of the Milan ordnance, which is $45,150, so that for architect-engineering fees for the two projects, the H. K. Ferguson Co. would get $123,170, if they don't claim any increase by reason of the increased work. Would you tell us from your observation what nonreimbursable expenses they sustained to get that amount? Major HORRIDGE. The architect-engineers only? Mr. FULTON. Yes. Major HORRIDGE. Practically none. Mr. FULTON. Now, with respect to the contracting fees, the Ferguson-Oman Co. got an allowance of $162,777 for the Milan ordnance in addition to the amount you referred to for Wolf Creek, which I believe totals $494,900 for the contractor's fee. Would the same answer apply with respect to the nonreimbursable expense there? Major HORRIDGE. No, sir. Mr. FULTON. What nonreimbursable expense did they have? Major HORRIDGE. The main ones would be the representative, their project manager. Mr. FULTON. Mr. Atkin? Major HORRIDGE. Yes, sir; Mr. Atkins; and interest due on money borrowed. Mr. FULTON. You mean by that that there is a time lag between the time that they do work and the time that the Government would pay them for the work during which they might have to borrow money and pay interest on the money so borrowed? Major HORRIDGE. Yes, sir. The CHAIRMAN. That is all, Captain. At this point we will place in the record these papers, containing data on these projects from the time they began. (The document referred to was marked "Exhibit No. 151" and appears in the appendix on p. 3273.) The CHAIRMAN. Is Mr. Thomas in the room? Mr. Helzel and Mr. Bouck have not appeared because of the fact that the Army didn't get them here on time, but I am sure that they are on the road and that they will be here to testify. Is Mr. Stirling here? Mr. Stirling, I understand, has been transferred to Alabama. He, also, will be here at a later date, I imagine. Mr. Harrison? Lieutenant Pennington? We will take him. It is very, very necessary when this committee subpenas witnesses that they be on hand. Have you been sworn? Lieutenant PENNINGTON. No, sir; I haven't. The CHAIRMAN. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth in the testimony you give before this committee, so help you God? Lieutenant PENNINGTON. Yes, sir. The CHAIRMAN. Be seated, Lieutenant Pennington, and give your title and connections with the plant to the reporter. Lieutenant PENNINGTON. First Lt. Richard L. Pennington, Ordnance Department. I am assigned to the Wolf Creek Ordnance Plant. TESTIMONY OF LT. RICHARD L. PENNINGTON, ORDNANCE DEPARTMENT, UNITED STATES ARMY, WOLF CREEK ORDNANCE PLANT, MILAN, TENN. LABOR FEES The CHAIRMAN. Lieutenant Pennington, I understand that you conducted some extensive investigations into labor rackets, shakedowns, and patronage on this project. I would appreciate it if you would make a statement of the substance of your investigations for the record. Lieutenant PENNINGTON. Yes, sir. The term "labor racket" is a misnomer. The unions themselves are not involved in these rackets. It is a case of a number of the foremen and a superintendent who were shaking down the men under them, and there was no connection with the union. Senator BREWSTER. Was this a union job? . Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. Every man had to be a member of the union. to get a job? Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. What was the average pay for joining? Lieutenant PENNINGTON. There was quite a number of crafts involved. I have a list of the dues, assessments, and so forth. Senator BREWSTER. Would you give three or four of the chief crafts; carpenters, for instance? Lieutenant PENNINGTON. The cost of their card was $35, for carpenters. Senator BREWSTER. That was the joining fee? Lieutenant PENNINGTON. That is right. The cost of the working permit was $2 a month. Senator BREWSTER. Working permit? What does that mean? Lieutenant PENNINGTON. That was the cost required of a man who already was a member of the union when he came. Senator BREWSTER. He might be a member somewhere else, and in order to get a permit to work here, he had to pay $2 to the local union. Lieutenant PENNINGTON. That is right. Senator BREWSTER. Would you give a few other similar items in the other crafts? Lieutenant PENNINGTON. The sheet-metal workers, $125, monthly dues $6. Senator BREWSTER. What? Lieutenant PENNINGTON. In Sheet Metal Workers International Association No. 4, the cost of the card was $125, monthly dues $6. Senator BREWSTER. Was that in addition to the joining fee or was that the working permit? Lieutenant PENNINGTON. That was the joining fee; yes, sir. The CHAIRMAN. The $125 was the joining fee, and $6 a month was the privilege to work. Is that right? They had to pay $125 and then $6 a month, too. Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. They had to pay both? Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. Was that to the local union or to the international? Lieutenant PENNINGTON. That was to the local union. I don't know how much of that was taken back. The CHAIRMAN. How many of these metal workers did you have down here? Do you know? Lieutenant PENNINGTON. No, sir; I couldn't say offhand. Senator BREWSTER. Don't you have a rough idea? It would go into hundreds, I guess. Lieutenant PENNINGTON. Yes; it would. Senator BREWSTER. Thousands? Lieutenant PENNINGTON. No, sir; it would not. Senator BREWSTER. How many carpenters? Lieutenant PENNINGTON. I couldn't say. The number varies quite extensively. Senator BREWSTER. Do you know how many were employed altogether? Lieutenant PENNINGTON. Well, about 15,000 men. Senator BREWSTER. Fifteen thousand? Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. Who would have the figures as to the totals? Senator BREWSTER. Yes, sir. Lieutenant PENNINGTON. In each craft? Senator BREWSTER. Yes. Lieutenant PENNINGTON. Well, the time department would have that. Senator BREWSTER. Yes. Do you know what the production turnover was on the job? Lieutenant PENNINGTON. No, sir; I don't. Senator BREWSTER. You say there were 15,000 employed altogether? Lieutenant PENNINGTON. That is right. Senator BREWSTER. In the whole course of the project? Lieutenant PENNINGTON. Yes, sir; that was the peak of the employment roll. Senator BREWSTER. That was the peak. Then you employed a great many more individuals than that. Lieutenant PENNINGTON. Yes, sir. I imagine around 20,000 in all. Senator BREWSTER. What were some of the other fees for joining? You have given carpenters and sheet-metal workers. The CHAIRMAN. What did the cement finishers have to pay? Lieutenant PENNINGTON. No cost. The CHAIRMAN. They had to pay $80 in order to get a chance to work and didn't have to pay a monthly fee. Is that right? Lieutenant PENNINGTON. They had to pay $3 a month dues. The CHAIRMAN. How many cement finishers did you have on the job up there? Do you know? Lieutenant PENNINGTON. At the peak I think there were three or four hundred. Senator BREWSTER. What about common laborers? Were they also of a union? Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. What was the fee there? Lieutenant PENNINGTON. $8.50. That included 3 months' dues. Senator BREWSTER. And what were the dues after that? Lieutenant PENNINGTON. $1.25 a month. Senator BREWSTER. Did you make an investigation as to the cernent finishers to find out whether there were other payments being extorted from the men other than that referred to, the $80 initiation fee? Lieutenant PENNINGTON. Yes, sir. There were collections of 5 percent of the weekly check. Senator BREWSTER. Was that 5 percent of their weekly wage paid to the union or to the business agent? Lieutenant PENNINGTON. It was paid to the business agent. Mr. FULTON. That was Mr. Hugo Glatt, was it not? Lieutenant PENNINGTON. Yes, sir. Mr. FULTON. We have affidavits from several individuals that he was collecting from them 5 percent of their wages. Lieutenant PENNINGTON. Yes, sir. Mr. FULTON. Did you ever take that matter up with Mr. Glatt? Mr. FULTON. Was the practice stopped? Lieutenant PENNINGTON. No, sir. It hasn't been stopped. Mr. FULTON. It still continues? The CHAIRMAN. It still continues on the job? Lieutenant PENNINGTON. Yes, sir. The CHAIRMAN. He is shaking these people down for 5 percent of their pay every week for himself? Lieutenant PENNINGTON. Well, he collects the money. I can't tell what he does with it. The CHAIRMAN. How much does that amount to? Lieutenant PENNINGTON. I think about a thousand dollars a week. Senator BREWSTER. And what justification does he give for this? What is his service? Lieutenant PENNINGTON. He claims to have the minutes of a meeting of the local there in which this 5 percent was voted by the members for assessment. Senator BREWSTER. So that is in addition to the initiation fee and to the working permit fee? Lieutenant PENNINGTON. Yes, sir. Senator BREWSTER. That is on the side? Lieutenant PENNINGTON. Yes, sir. The CHAIRMAN. What happens to a man if he doesn't pay this 5 percent? Lieutenant PENNINGTON. Some of them keep on working. Lieutenant PENNINGTON. Yes, sir. The CHAIRMAN. What happens to the rest of them? Lieutenant PENNINGTON. I haven't any record of any man being fired because he didn't pay this 5 percent. The CHAIRMAN. Do you think he would be fired if he didn't pay it? Is that the policy of the contractor, to allow a performance like this to take place on a Government job? What is the matter with the contracting quartermaster that he is allowing this to go along and doing nothing about it? Lieutenant PENNINGTON. The unions themselves are taking care of this matter. The CHAIRMAN. It seems that they are very much taking care of it. A thousands dollars a week for nothing in the world but plain racketeering, in my opinion. What other shake-downs have you got out there beside that? You said something about foremen shaking down the men to get the work. What about that? Lieutenant PENNINGTON. Well, these men have been given a preliminary hearing, and their trials are set for next month. The CHAIRMAN. Oh, they are being prosecuted? Lieutenant PENNINGTON. Yes, sir. The CHAIRMAN. Good. Senator BREWSTER. That is the foremen? Senator BREWSTER. And how did they operate that racket as far as you would be free to testify on it? Lieutenant PENNINGTON. They use their positions of authority to ask the men to pay them so much, sometimes so much a month, sometimes so much a week, for purposes of keeping their jobs. Senator BREWSTER. Kick-backs? Lieutenant PENNINGTON. Kick-backs. Senator BREWSTER. And they were likely to be fired if they didn't pay it? Lieutenant PENNINGTON. That was the threat; yes, sir. The CHAIRMAN. Were any of them fired for that reason? Mr. FULTON. Will you describe some of those practices as to how they were accomplished? Lieutenant PENNINGTON. Well, the foreman, through his representatives, made these collections. The representatives would tell the men that it was customary to give a present to the superintendent, that it was done on other jobs and they saw no reason why they didn't do it here. They called it a token of appreciation of being allowed to work. And when the men objected by saying they didn't see any need for it, that he was working the same as they were, "Well, you either do it or else." That was the usual formula. Senator BREWSTER. How did these men secure the jobs in the first instance? Was it necessary for them to see any outside agency or representative? Lieutenant PENNINGTON. Except to go through the union, there was no other outside agency. |