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Mr. STROBEL. It was handled by the Design and Construction Division,

Mr. FINE. And not by you personally?

Mr. STROBEL. No. I will admit I did discuss the basic list with the members of the staff.

Mr. MALETZ. Now, Mr. Strobel, after you and Mr. Schwarz solicited business from Ferrenz & Taylor, Strobel & Salzman did obtain a contract from Ferrenz & Taylor; isn't that correct?

Mr. STROBEL. That is correct.
The CHAIRMAN. What was the amount?

Mr. STROBEL. I don't know. I had absolutely nothing to do with negotiating that contract.

The CHAIRMAN. Was it about $18,000?
Mr. STROBEL. It could be; I can't answer it.
Mr. MALETZ. Is that correct, Mr. Schwarz!

Mr. SCHWARZ. I believe it is, more or less like that, depending on what work we would do.

Mr. MALETZ. Now, at this meeting, Mr. Strobel, that you had with Mr. Ferrenz, was there any discussion of Government business?

Mr. STROBEL. To my recollection, none whatsoever.

Mr. MALETZ. See if the facts that I will now state to you are correct as they occurred.

You and Mr. Schwarz visited Mr. Ferrenz in the latter part of 1954, to see whether Strobel & Salzman sould get some business from Ferrenz & Taylor; is that correct?

Mr. SCHWARZ. Something went before that, however.

Mr. MALETZ. Why don't you tell the whole story, Mr. Schwarz, as you understand it?

Mr. SCHWARZ. You are correct as far as you go, but there is something that went before that. I communicated with Mr. Ferrenz, because I got the list of housing jobs in the city of New York which were going to be let, and he made an appointment with me, but he said he would like to have Mr. Strobel along with me when I came to visit him.

From then on your statement is correct.
Mr. MALETZ. I see.

Now, subsequently, then, Strobel & Salzman obtained from Ferrenz & Taylor an $18,000 contract; is that correct?

Mr. SCHWARZ. That is correct.

Mr. MALETZ. Prior to that time, is it not correct that Strobel & Salzman had never received any business from Ferrenz & Taylor?

Mr. SCHWARZ. That is correct.

Mr. MALETZ. And is it not true that about 1948 Strobel & Salzman had attempted to secure business from Ferrenz & Taylor ?

Mr. Schwarz. The way to answer that question is that they, among others-a letter was written to Ferrenz & Taylor, or to him, as well as other people, in the course of our business, soliciting work. And if that is considered soliciting work, then the answer is "Yes." But that is one of many.

Mr. MALETZ. I see.

Now, Mr. Strobel, isn't it true that after Strobel & Salzman obtained this $18,000 contract—by the way, that was in 1955, was it not? What was the date of the contract—I will put it this way—with Ferrenz & Taylor?

Mr. SCHWARZ. We wrote our proposal on the 29th of June, and they, after getting clearance with the Board of Education of the City of New York, told us on some day in August, I havn't the exact date

Mr. MALETZ. August 1955

Mr. SCHWARZ. August 1955, that we would be acceptable as the engineers for that project.

Mr. MALETZ. Now, Mr. Strobel, isn't this correct: That Ferrenz & Taylor has formally asked for Government business from Public Buildings Service?

Mr. STROBEL. I would like to say that they have submitted their brochure and answered our questionnaire. And their name is, therefore, in our current file of the 90 to 100 architects.

The CHAIRMAN. They didn't submit the brochure and do that just for the sake of doing it; they did it for the sake of getting business, didn't they?

Mr. STROBEL. I would imagine that any architectural firm who is requested to submit such information would be more than happy to do So, with probably some expectation or getting some work.

I would like, Mr. Chairman, for the record to mention that since I have been Commissioner the firm of Ferrenz & Taylor is the only new client that Strobel & Salzman has obtained.

Mr. MALETZ. Isn't Chapman & Delehanty a new firm, since you became Commissioner?

Mr. STROBEL. That is correct; they are a new firm, though that negotiation was very active before that time. Even including that firm, I would say two new clients in the period of a year and a half is not enough.

Mr. KEATING. Is that below par?
Mr. STROBEL. It is away below par.

Mr. KEATING. In other words, how many new clients a year were they getting before you became actively identified with the Government?

Mr. STROBEL. I can't answer that by numbers, but some of these clients are one-shot operations.

The CHAIRMAN. Mr. Strobel, do you think it was proper for you in any way to solicit business for your own firm of Strobel & Salzman, from a firm that was interested in doing business with the Public Service Administration?

Mr. FINE. I object to the question, Mr. Chairman. There is no such testimony.

The CHAIRMAN. Or has it solicited from the Public Building Service Administration? Do you think that is proper?

? Mr. STROBEL, I don't think I quite got the question.

The CHAIRMAN. Do you think it is proper for you as the Commissioner to solicit business from a firm that, in turn, seeks business from the Public Service Administration, where you are Commissioner in that agency?

Mr. STROBEL. Well, as discussed the other day—let me say this: There could come a time if either negotiations, either the one by Strobel & Salzman with an outside firm, or the second negotiation by that firm with GSA, if they became actualities and approached, let us say, conclusion of contracts, at such a time would it be proper for me to disqualify myself in either one of the two cases? But I do not feel that such a situation has been reached at this point.

a

The CHAIRMAN. In other words, you feel it is not improper?
Mr. STROBEL. Not as it was done in this case, Mr. Chairman.
The CHAIRMAN. I didn't hear your answer.
Mr. STROBEL. Not as it was done in the case of Ferrenz & Taylor.
The CHAIRMAN. It was not improper in that case ?
Mr. STROBEL. That is the way I feel, yes.

Mr. FINE. The other day, Mr. Strobel, in answer to Mr. Keating's question as to whether or not, if you had new business, if you had been doing business with a firm and that firm had solicited specific business from the Government, from your agency where negotiations were being entered into, Mr. Keating asked you that question, what would you do? And I remember your answer was you would disqualify yourself.

Mr. STROBEL. That is correct.

Mr. FINE. And you say now that this Ferrenz situation was not that kind of a situation?

Mr. STROBEL. It had not reached that stage.

Mr. KEATING. And so long as you disqualify yourself from any connection with it, I think it would be unfortunate if the result of these hearings was to be that all of these architects—who I am told are the finest firms in the country-whose names have been dragged into this hearing, were barred from any and all Government work hereafter. The CHAIRMAN. No, that is not the question. The question is

, whether it is proper for Mr. Strobel to occupy the position he has in the light of all the circumstances, and the architects shouldn't be

punished, by no means. It is a question whether the delicacy of the situation warranted Mr. Strobel in disqualifying himself or continuing his activity.

Mr. KEATING. So long as he disqualifies himself, it would be unfortunate if all of these fine architectural firms are barred from all Government business because of these hearings.

The CHAIRMAN. I will ask the gentleman from Rochester this, if he wishes to answer: Does he think it is proper for the Commissioner of Public Buildings to solicit business from firms that might be doing business with him?

Mr. KEATING. No. It is not perhaps illegal, but it is unethical—it is unfortunate that a person is in that position, placed in a situation where he might have some conflict of interest, and he has to walk a very narrow line, just as Members of Congress do. And it may very well be that there are Members of Congress who are also members of the bar who have talked with people and had them at lunch, for the purpose of—without, of course, soliciting it, which would be contrary to the canon of ethics—but for the purpose of ingratiating themselves with some prospective clients. There are some Members of Congress actively practicing law today while they are still Members of Congress.

Now, you don't actively practice law unless you, in the most careful manner, make yourself so indispensable to prospective clients that they feel they can't do without you.

Now, those people may have business with the Government in some unrelated matter. And the question is, Are we going to say to a member of the executive branch just exactly the same thing as we must say as Members of Congress to our colleagues, “Now, you can't examine a title for, let us say, the X construction company, and you can't get a fee for that, because the X construction company down in Texas has a Government job. And so you or your law firm can't get a hundred dollar fee for examining the title on a piece of their property up in New York State."

Mr. FINE. If the gentleman would yield-
Mr. KEATING. Yes, I will yield.

Mr. FINE. The gentleman doesn't have to go down to Texas for a contract. Why couldn't it be that that very construction company has a bill before Congress on which a vote may be very important--and the gentleman will remember the roads bill, which we voted on only last year, or the gas bill, where six votes made the difference.

Mr. KEATING. That is right. It is difficult to know just where to draw the line.

The witness here in this case in question, at the request of a person that we call a prospective client, went with the man that is actively running his firm and talked with this man in general about business, I take it

Mr. FINE. Will the gentleman further yield?
Mr. KEATING. Yes.

Mr. FINE. Isn't the question here before us now whether Mr. Strobel ever dealt personally as the Commissioner with a former client of his, and gave him business? Isn't that the question we are trying to resolve?

Mr. KEATING. Whether he misused his position—it is more than that.

Mr. FINE. Isn't that the first question? And the answer to that is, Mr. Strobel said no, he did not, and further, if such a situation arosé he would disqualify himself.

The CHAIRMAN. You forget the Petroff case.

Mr. FINE. I don't want to forget any case. I thought the Petroff case had been cleared by the fact that there had been an unusal situation, and I think we mentioned that several times.

The CHAIRMAN. I would say that the statement of the gentleman from New York, Mr. Keating, is a very applicable statement. But I wonder whether or not it is proper for Mr. Ferrenz, say, who was then seeking business with Mr. Strobel as Commissioner of Public Buildings, to have Mr. Strobel in turn seek business with Mr. Fer

renz.

as that.

Mr. KEATING. Well, the point is that the evidence isn't just as simple The CHAIRMAN. And, in addition, Mr. Strobel got business from Mr. Ferrenz.

Mr. FINE. The difficulty, Mr. Chairman, with your statement is that you have included facts which are not in the record.

Mr. KEATING. And excluded facts which are in the record.

The CHAIRMAN. I don't agree with the gentlemen. I think I state the position exactly as it is.

Mr. FINE. Just so we can finish this thought, Mr. Chairman, I just want to get it clear in my own mind, is the chairman suggesting that no engineering firm, no member of an engineering firm, could ever be Commissioner of Public Works of the GSA?

The CHAIRMAN. I make no such suggestion. I suggest that the conduct of Mr. Strobel in soliciting business with Mr. Ferrenz at the time Mr. Ferrenz was soliciting business from him, and subsequently got—and subsequently he got business

Mr. KEATING. That isn't true; that isn't the evidence.

The CHAIRMAN. I say, the mutual solicitation that we have here, to my mind, was unethical, to say the least.

Mr. KEATING. If you will strike out what we have here, I would go along with you, “mutual solicitation.” You pat my back and I will pat yours; we have seen plenty of that in the Government in the past. And that would be improper and unethical, if he were soliciting business at the very time that Mr. Ferrenz' concern was soliciting Government business, and they were there and talking about the same thing, and saying “All right, I will give you my business, and you give me yours"; that would

just be unethical. The CHAIRMAN. Unfortunately, Mr. Strobel is placed in this position. But I think Mr. Strobel was rather careless in his conduct, to say the least. And I think he should have refrained from soliciting any business from this Ferrenz firm.

Mr. Rodino?
Mr. Rodino. Mr. Strobel, I think you made the statement-

Mr. KEATING. While we are talking about this, I think the witness should be permitted to explain his answer.

The CHAIRMAN. He will be permitted.

Mr. RODINO. I want to ask whether Mr. Strobel in answer to the question put to him a while ago with relation to the Ferrenz & Taylor inquiry, whether he did not say that he had some general knowledge that Ferrenz & Taylor was soliciting business from the Government.

Mr. STROBEL. No, I didn't.
Mr. Rodino. Or you assumed
Mr. STROBEL. No, sir, I didn't.

Mr. KEATING. What he said was that later he assumed that any big architectural firm would welcome doing business with the Government; that is my understanding of it.

Mr. RODINO. Would you state it so that that may be clarified, just what was the situation there at the time that there was solicitation of business of Ferrenz & Taylor, or did you then have any knowledge that Ferrenz & Taylor was soliciting business from the Government !

Mr. STROBEL. I have no knowledge of them soliciting business from the Government at that time or up to date.

As far as I recall, they have never called on me or even anybody in my office soliciting business from GSA. However, they are on our list of 90 to 100 architects which we established an up-to-date file on.

Mr. RODINO. When was that list submitted, that list of some 90 to 100 architects?

Mr. STROBEL. I think we started talking about that late in 1954. There has always been a certain list, but it was not up to date. Just when it was brought up to date I don't know.

Mr. SCHWARZ. I recall this year—to have it on hand after-no, let's see the time now—we knew when Congress went home last

year

that we were going to have a few large, prominent projects here in Washingto And it was from that time on that we started working on establishing this up-to-date list.

Mr. RODINO. In other words, this list was established without Ferrenz & Taylor having actually sought from the Government at that time to be included in such a list.

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