The CHAIRMAN. Did you ever meet him in New York?

Mr. STROBEL. Yes; I have met him once or twice in New York. The CHAIRMAN. Under what circumstances did you meet him in New York, where and under what circumstances?

Mr. STROBEL. I met him in New York, once in the National Republican Club.

The CHAIRMAN. That is a good place to meet a fellow.

Mr. STROBEL. I might have met him once or twice.

The CHAIRMAN. What did you discuss with him when you met him at the National Republican Club?

Mr. STROBEL. Mr. Blumenthal represented an architectural firm by the name of De Young & Moscowitz.

Mr. FINE. He represented, did you say?

Mr. STROBEL. That's right. That's my understanding.

The CHAIRMAN. As a lawyer or a business getter or what?
Mr. STROBEL. I don't know.

Mr. FINE. Mr. Blumenthal is an accountant, a CPA in New York, a member of the National Republican Club.

The CHAIRMAN. A CPA?

Mr. FINE. An accountant.

Mr. KEATING. Did you ever meet him at the National Republican Club?

Mr. FINE. I met him there and I don't doubt their conversation was about the food at that club.

Mr. RODINO. Was it good?

Mr. KEATING. No; it is terrible.

Mr. RODINO. The Republican Club?

Mr. KEATING. Yes.

The CHAIRMAN. Was Mr. Blumenthal ever a secretary to former President Herbert Hoover?

Mr. STROBEL. I have heard something about that. I actually can't confirm it.

Mr. MALETZ. I think you have indicated that Mr. Blumenthal has been acting as a representative for the New York architectural firm of De Young & Moscowitz?

Mr. STROBEL. That's right.

Mr. MALETZ. In December 1954 and January 1955 did you have any discussion with Mr. Blumenthal concerning a possibility of Strobel & Salzman getting business from De Young & Moscowitz?

Mr. STROBEL. Yes; I did. But the result was that Strobel & Salzman was not interested in obtaining any business from that firm. There was to my knowledge a case of a New York City housing job and also possibly a school. I can't quite recall that.

Mr. MALETZ. Is this not correct, that you had a discussion with Mr. Blumenthal concerning Strobel & Salzman getting some business from De Young & Moscowitz but the business that was initially available was not attractive?

Mr. STROBEL. No; that is not the true picture.

Mr. MALETZ. I will develop that at some length then in a few minutes.

Mr. FINE. The fact remains, Did you get any business from them? Mr. STROBEL. No; I did not, not at that time.

Mr. FINE. Did you get any since?

Mr. STROBEL. Later on, Mr. Salzman actually negotiated a contract with that firm. That contract was canceled, you might say on my orders, and the date of cancellation I believe was August 4, 1955.

I think it was the letter that the office wrote is self-explanatory in this respect that at that time then it became evident that the firm of De Young, Moscowitz & Rosenberg might be considered for a project out of GSA.

The CHAIRMAN. Considered for a what?

Mr. STROBEL. Considered for a project as architects and engineers. The CHAIRMAN. Was this in August 1955?

Mr. STROBEL. That is correct. On the basis of that possibility, I wrote to them, or I had Strobel & Salzman write to them, not to disqualify them for consideration, this contract which was on an unrelated proposition was withdrawn, was canceled.

Mr. FINE. Except for that there was no business relationship between you?

Mr. STROBEL. Except for that there has never been any business relationship of any kind between the firm of Strobel & Salzman and the architectural firm of De Young, Moscowitz & Rosenberg.

Mr. KEATING. When you discovered that they might be considered for Government employment of some kind, you terminated any relationship which your firm had entered into with them?

Mr. STROBEL. That is correct.

Mr. KEATING. Had you performed any work under that contract? Mr. STROBEL. No work had been performed under that contract. Mr. KEATING. Did you receive any compensation under that contract?

Mr. STROBEL. None whatsoever.

Mr. Chairman, may I read this letter? It is addressed to Messrs. De Young and Moscowitz.

GENTLEMEN: It has been called to our attention that yours is one of the firms asking consideration for architectural assignments for projects eminating from the Public Buildings Service of the General Services Administration. We do not wish to disqualify you from such consideration and would, therefore, ask that we be permitted to withdraw from our commitment to perform the structural engineering for the Fashion Institute of Technology project which you are doing for the board of education of the city of New York.

Would you be kind enough to advise the proper authorities in connection with the Fashion Institute of Technology of your changed arrangements.

Very truly yours,

STROBEL & SALZMAN, By JOSEPH SALZMAN.

Mr. KEATING. How much of a fee were Strobel & Salzman going to get under that contract?

Mr. STROBEL. If my recollection is right, it was just under $30,000. Mr. KEATING. And you gave that up voluntarily in order that this firm might not be disqualified from being considered for Government employment?

Mr. STROBEL. That is correct.

The CHAIRMAN. You felt that there would be an inconsistent attitude if De Young, Moscowitz & Rosenberg would get a contract from the General Services Administration because of your position as the superintendent of public buildings? Is that correct?

Mr. STROBEL. That is correct, sir. Furthermore, it would be inconsistent with the rules that I had laid down for Strobel & Salzman during my tenure in office.

The CHAIRMAN. You felt there was a conflict of interest, didn't you? Mr. STROBEL. That is correct.

The CHAIRMAN. Why didn't you feel that same conflict of interest in the other cases where contracts were given where you were giving contracts to architectural firms which were connected with the firm of Strobel & Salzman as had been testified?

Why did you take the attitude that you did in one case and not in the others?

Mr. STROBEL. What cases does the chairman refer to?

Mr. KEATING. That is the point I was trying to make. Which case, the Petroff case?

The CHAIRMAN. Take the Petroff case.

Mr. STROBEL. I hope that the Petroff case has been fully explained. And the matter of any possible conflict did not occur to me under the circumstances, because under no circumstances could I benefit directly or indirectly. But my recommendation of that firm was solely for the good and the benefit of the Government.

The CHAIRMAN. What about the contract you had with the Corps. of Engineers?

Mr. STROBEL. The contract with the Corps of Engineers was an old outstanding proposition that had been negotiated before I had anything to do with the Government.

The CHAIRMAN. That was entered into 1 day before you became. Commissioner of Public Buildings?

Mr. STROBEL. I should explain that even though that negotiation was made March 21, 1954, it is a project that had been discussed with the Corps of Engineers for a long period prior to that date.

Mr. FINE. The record ought to be corrected.

The CHAIRMAN. Please. I am conducting the hearing and I am chairman. You are out of order.

The execution of that contract with the Corps of Engineers was had after you became Commissioner of Public Buildings.

Mr. FINE. That is not the fact. That is what I am trying to tell you. You became a consultant with the organization, not the Commissioner.

The CHAIRMAN. A consultant. You were a full-time consultant, and the contract was executed after you became a full-time consultant to General Services Administration.

Mr. STROBEL. I believe that the date of the letter of intent or notification to proceed on the basis of the contract was negotiated March 31, was April 22.

The CHAIRMAN. That is right.

Mr. STROBEL. And the work was started immediately and rushed to completion?

Mr. MALETZ. Mr. Strobel, did you have any discussion in December 1954 or January 1955 with Mr. Blumenthal concerning the possibility of De Young & Moscowitz getting business from the Public Buildings Service?

Mr. STROBEL. No, I don't believe so.

Mr. MALETZ. Did Mr. Blumenthal indicate to you at any time that he was also interested in getting Public Buildings Service contracts for other clients of his?

Mr. STROBEL. No, he did not.

69220-55- -8

Mr. MALETZ. Did you know that Mr. Blumenthal visited Mr. Schwarz and Mr. Salzman in New York about January 4, 1955?

Mr. STROBEL. I think that is mentioned in one of Mr. Schwarz' reports to me.

Mr. MALETZ. Is that an accurate report?

Mr. STROBEL. I would assume so.

Mr. MALETZ. Were you apprised that Mr. Schwarz and Mr. Moscowitz went to see De Young & Moscowitz on January 5, 1955 to explore the possibility of Strobel & Salzman getting some business from De Young & Moscowitz?

Mr. STROBEL. Is that a question?

Mr. MALETZ. Yes. Were you apprised of that fact?

Mr. FINE. Were you apprised?

Mr. STROBEL. I might have known about that.

Mr. MALETZ. Do you know whether Mr. Schwarz and Mr. Salzman went to see De Young & Moscowitz at the suggestion of Mr. Blumenthal?

Mr. STROBEL. I don't know, that is possible.

Mr. MALETZ. Is that possible?

Mr. STROBEL. That is possible.

Mr. MALETZ. I show you a document dated January 5, 1955 and ask you if this is a true and accurate copy of a report sent to you by Mr. Schwarz?

(Document examined by witness.)

Mr. STROBEL. That's right.

Mr. MALETZ. Mr. Chairman, I ask that that document be placed in the record.

The CHAIRMAN. What is it?

Mr. MALETZ. This is a report from Mr. Schwarz to Mr. Strobel.

I went with J. S. this morning to De Young & Moscowitz (at their request) and we met both of them. They told us they had a New York City housing job located at 112th Street, between Park and Fifth Avenues. They also stated that as far as they know there will be only one more housing job awarded this year. The allowance for structural engineering is $29,500. They would like to know by Monday whether we are interested in this as they must submit the names of their engineers very soon now. Salzman will assemble some figures based on 1,450 apartments and the buildings being either 16 or 20 stories high. Moscowitz showed us his very preliminary sketch and he is laying the buildings out as a rectangle with center corridors similar to Sedgwick which we did for Skidmore. The next paragraph is immaterial. I will be glad to read it if you want, Mr. Strobel.

As far as De Young & Moscowitz are concerned I told them we were more interested in a private job rather than one for the city or the State. They told us they had only the housing job and the Fashion Center and they knew we were not interested in that latter one. Of course, Blumenthal told us they had a job in Indiana, and although they did not say anything about this one it might be the one we may be interested in.

The CHAIRMAN. That will be accepted in the record. (The document referred to is as follows:)

WEDNESDAY, JANUARY 5, 1955.

I went with J. S. this morning to De Young & Moscowitz (at their request) and we met both of them. They told us they have a New York City housing job located at 112th Street between Park and Fifth Avenues. They also stated that as far as they know there will be only one more housing job awarded this year. The allowance for structural engineering is $29,500. They would like to know by Monday whether we are interested in this as they must submit the names of

their engineers very soon now. Salzman will assemble some figures based on 1,450 apartments and the buildings being either 16 or 20 stories high. Moscowitz showed us his very preliminary sketch and he is laying the buildings out as a rectangle with center corridors similar to Sedgwick which we did for Skidmore. Butler called J. S. and told him they had Public School 101 in the Bronx and that the Board of Education was cutting down the fees on all jobs and he would like from us a very tentative figure so that he can use this in determining how he will come out on the job. I checked with Ratislovitch and he told me the Board of Education might cut $5,000 or $6,000 from the architectural fees this year. J. S. is reviewing this one and will probably give Butler a figure of onehalf percent to 0.55 percent, tentative, subject to whether there is any complication on the foundations. And the figure would be higher if concrete design is required.

As far as De Young & Moscowitz are concerned I told them we were more interested in a private job rather than one for the city or the State. They told us they had only the housing job and the Fashion Center and they knew we were not interested in that latter one. Of course, Blumenthal told us they had a job in Indiana, and although they did not say anything about this one it might be the one we may be interested in.

We went ahead full speed on Ethicon today and if Petroff feeds us information fast enough this job should go out in good order. If, however, there is any delay, we will have to find other work to keep the men busy.

Nothing more of any importance to report, except that it got a little colder today, but 20 degrees is not too bad.

Mr. MALETZ. Did you see Mr. Blumenthal the following week and tell him you would prefer not to take the city housing job at that time?

Mr. STROBEL. That is possible. I don't recall.

Mr. MALETZ. I show you a document dated January 10, 1955, and ask you whether this is a true and accurate copy of the report sent to you by Mr. Schwarz.

(Document examined by witness.)

Mr. STROBEL. That's right.

The CHAIRMAN. Read that please.

Mr. MALETZ. This is a report dated January 10, 1955, from Mr. Schwarz to Mr. Strobel:

I called Moscowitz this morning, and told him their housing job would not fit into our program and he said he would get together with us on another job sometime. I also called Blumenthal to tell him about it and he told me he spoke to you Sunday evening and you said we would prefer not to take that job at this time.

Is it correct that you had a conversation with Mr. Blumenthal that Sunday evening?

Mr. STROBEL. According to this I must have.

Mr. MALETZ. Do you recall the conversation now?

Mr. STROBEL. No, I do not.

Mr. MALETZ. Is it correct that you stated that you would prefer not to take the housing job at that time?

Mr. STROBEL. That is possible.

Mr. MALETZ. Did you tell Mr. Blumenthal that?

Mr. STROBEL. I don't recall.

Mr. MALETZ. Did you instruct Mr. Schwarz to call Moscowitz to turn down the housing job?

Mr. STROBEL. I might have.

Mr. MALETZ. Did you also ask Mr. Schwarz to also notify Blumenthal?

Mr. STROBEL. No, I don't recall that.

Mr. MALETZ. It is correct, is it not, that on May 27, 1955, Strobel & Salzman got a commitment from De Young, Moscowitz & Rosen