Mr. SCHWARZ. Not particularly. He told me that he knew Mr. Strobel, but he didn't tell me that he met with him or that he had any-he told me that he did have a conversation with him. Mr. MALETZ. I beg your pardon? Mr. SCHWARZ. He told me that he did have a conversation with him, but what the conversation was he didn't expose to me. Mr. MALETZ. Was that the first time you met Mr. Blumenthal? Mr. MALETZ. Did he tell you that he had a conversation with Mr. Strobel in Washington? Mr. SCHWARZ. He said that he had met Mr. Strobel in Washington. Mr. MALETZ. Now, he suggested that you go and see De Young & Moscowitz? Mr. SCHWARZ. That is correct. Mr. MALETZ. About what, about getting business? Mr. SCHWARZ. About the possibility of getting a job which was on the New York City list of housing jobs. Mr. MALETZ. Did you go see De Young & Moscowitz? Mr. SCHWARZ. I did. Mr. MALETZ. What happened? Mr. SCHWARZ. I went to see De Young & Moscowitz with Mr. Salzman, and we reviewed the job which he had, which was a housing job for the city of New York. And I told Mr. Moscowitz that we did not want that job. Mr. MALETZ. And what was the reason that you didn't want the job? Mr. SCHWARZ. Because it would not fit in with our program of work at that time. Mr. MALETZ. Now, did you get a job from De Young & Moscowitz subseqently? Mr. SCHWARZ. Subsequent to that, I told Mr. Moscowitz tentatively for his records, with the Board of Education for the City of New York, that we would be willing to do a job for them. Mr. MALETZ. And did you get a verbal commitment from De Young & Moscowitz to do that job? Mr. SCHWARZ. After approval by the board of education, we did get a verbal commitment. Mr. MALETZ. And when was that? Mr. SCHWARZ. To the best of my knowledge, that was in May or June I think it was in June of 1955.. Mr. MALETZ. And about what was the fee to be to Strobel & Salzman? Mr. SCHWARZ. The fee as established was an amount, I believe, of $29,000. Mr. FINE. Was that the contract that was canceled on August 4? Mr. MALETZ. That is right. Mr. KEATING. You never did get that fee? Mr. SCHWARZ. We never executed the work. Mr. KEATING. The contract was canceled? Mr. SCHWARZ. We canceled the contract, and we told him we were sorry, but we would like to be withdrawn as the engineers on that job. And nothing has happened with that particular job. Mr. KEATING. You never did get any money out of this? Mr. MALETZ. Will you tell the committee whether Mr. Blumenthal was helpful to Strobel & Salzman in getting the De Young & Moscowitz business? Mr. SCHWARZ. That is a difficult question. Mr. KEATING. What business? Mr. MALETZ. The $30,000 contract. Mr. SCHWARZ. No, he was not. Mr. MALETZ. He was not? Mr. SCHWARZ. No. Mr. MALETZ. I take it that all he did was arrange the initial contact; is that right? Mr. SCHWARZ. He arranged one conference with Mr. Moscowitz. Mr. MALETZ. And how many meetings did you have with Mr. Blumenthal? Mr. SCHWARZ. One. Mr. MALETZ. And you have never seen him since? Mr. SCHWARZ. I have never seen him since. I spoke to him on the telephone once. Mr. MALETZ. Now, Mr. Schwarz, was it your understanding that Mr. Strobel had relinquished all participation in the management of Strobel & Salzman when he came to work in Washington? Mr. SCHWARZ. Yes; I would say yes. Mr. MALETZ. That was your understanding? Mr. SCHWARZ. That was my understanding. Mr. MALETZ. I show you an undated memorandum and ask you whether this is a true and accurate copy of a report that you sent, or memorandum which you sent, to Mr. Strobel. Mr. SCHWARZ. Yes, that is an accurate photostatic copy of my memorandum to Mr. Strobel. Mr. ROBB. Mr. Chairman, may I inquire of counsel whether the check mark on here was made by him. Mr. MALETZ. I can say that the check mark was placed there by me. Mr. Schwarz, would you read the last paragraph? Mr. SCHWARZ. The last paragraph of this memorandum reads: I would like to suggest that if you are not able to get to see Zackrison that you call him to find out if there is anything doing on alert hangars or on any other work, and if so, we could arrange to send someone down to see him. Mr. MALETZ. Now, who was the Zackrison to whom you referred? Mr. SCHWARZ. The Zackrison referred to in this memorandum is Mr. Zackrison of the Corps of Engineers, Office of the Corps of Engineers. And he was one of the persons authorized to act for the contracting officer. Mr. MALETZ. He is a contracting officer for the Corps of Engineers! Mr. SCHWARTZ. Or is authorized to act for the contracting officers, yes. Mr. MALETZ. And what is the approximate date of this report, or memorandum, or letter, to Mr. Strobel? Mr. SCHWARZ. I don't recall the exact date of this thing, but I believe it was some time in 1954. Mr. MALETZ. Fifty when? Mr. SCHWARZ. 1954. I believe it was in 1954. Mr. MALETZ. It was after Mr. Strobel came to work for the Government, was it not? 69220-55-12 Mr. SCHWARZ. That is correct. Mr. MALETZ. Now, if it was your understanding that Mr. Strobel had relinquished all active participation in the management of Strobel & Salzman, why did you suggest that Mr. Strobel get in touch with Mr. Zackrison to discuss the possibility of getting work? Mr. SCHWARZ. Well, if such work were possible out of the Corps of Engineers, and if I thought, according to my memorandum-and I did not think it was illegal for Mr. Strobel to do what I suggestedthat it would be to our advantage in negotiating a contract if he could communicate with Mr. Zackrison. However, I am not familiar entirely with all the Government regulations pertaining to his job as Public Buildings Commissioner. Mr. KEATING. You wanted to find out whether it would pay you to come down here, a job pending that would pay you to come down here and see about; is that correct? Mr. SCHWARZ. That is correct. Mr. MALETZ. Mr. Chairman, I offer that report in evidence at this point. (The document referred to is as follows:) Corn was in the office this afternoon. Spoke about generalities for about 15 minutes. He is stopping at the Engineers' Club. He is traveling around this area but will not be around at any time when you are here. If you get to Omaha he would like you to get in touch with him in advance if you can. I presume Wagner called you on the phone today. I would like to suggest that if you are not able to get to see Zackrison that you call him to find out if there is anything doing on alert hangars or on any other work and, if so, we could arrange to send someone down to see him. Mr. FINE. May I ask a question, Mr. Strobel? Did you go to see this gentleman? Mr. STROBEL. To the best of my recollection, I did not call Mr. Zackrison, and I did not go to see him. Mr. MALETZ. I would like to say, Mr. Congressman, that the purpose of this questioning is only to elicit from Mr. Schwarz his understanding of Mr. Strobel's role in the firm of Strobel & Salzman. Mr. SCHWARZ. I would like to make one further remark about this. I don't know who told me about this, but somebody told me that there is an alert hangar program which is going to continue. And Strobel & Salzman did the original alert hangars for the Corps of Engineers, and I thought possibly there was some more work involved down there, and if we could get it we would like to get it. One more statement Mr. RODINO. Pardon me. Is that a special type of work, alert hangars? Mr. SCHWARZ. I would say that it was a special type of work; yes. Mr. RODINO. And your organization had done that work commercially? Mr. SCHWARZ. We had done the original standard alert hangar plans for the Corps of Engineers; that is correct. There is one more statement I would like to make. I never did get any reply from Mr. Strobel as to whether he did anything in connection with this memorandum. This was an informative memorandum to him, and I never did get any reply either written or oral. Mr. MALETZ. As I understand it, Mr. Strobel never did contact Mr. Zackrison about getting any original work; is that right? Mr. SCHWARTZ. I don't know. Mr. MALETZ. I direct your attention to a document dated July 2, 1955, and ask you whether this is an accurate copy of the report which you sent to Mr. Strobel? Mr. SCHWARZ. Yes; that appears to be a correct copy. Mr. FINE. What is the date? Mr. SCHWARZ. July 2, 1954. Mr. MALETZ. Now, is Mr. Strobel's handwriting on that document? Mr. SCHWARZ. Yes; it is. Mr. MALETZ. Will you explain the document to the committee? Mr. SCHWARZ. Well, this is a memorandum to Mr. Strobel, an informative memorandum to Mr. Strobel telling him-let me first read it through to be sure I am going to give the right answer-you want an explanation of this? Mr. MALETZ. Yes. Will you describe what this report is all about? Mr. SCHWARZ. This is an informative memorandum, I would say, to Mr. Strobel telling him that we billed up to 15-up to 25-percent of the work which we did on the helicopter hangars, and telling him approximately how we arrived at that amount, because of the fact that we had that we are bound to submit a bill for the amount of work actually performed on any Government or any other contract. And that is what is represented by the first part of this memorandum. Mr. MALETZ. Now, did Mr. Strobel indicate in this memorandum that he would take certain action about a possible extra? Mr. SCHWARZ. That is indicated in this memorandum; yes. Mr. MALETZ. Didn't Mr. Strobel, in this memorandum, indicate to you in handwriting that he would talk with Mr. Hench about a possible extra? Mr. SCHWARZ. Yes. Mr. MALETZ. And Mr. Hench is with the Corps of Engineers; is that not correct? Mr. SCHWARZ. That is correct. Mr. MALETZ. And then Mr. Strobel gave you some other instructions about money that was owed to you by another firm; is that not correct? Mr. SCHWARZ. That is correct. Mr. MALETZ. He said "Wait until August," is that correct? Mr. SCHWARZ. That is correct. Mr. MALETZ. Now, would this indicate to you that Mr. Strobel had relinquished all active participation in the management of Strobel & Salzman? Mr. SCHWARZ. The way I interpret it, it is indicated by everything that has been done up to the present time. The first part of this memorandum is informative. I went through some arithmetic figures, which he corrected me on when he wrote his note in connection with, that is in connection with the contract we are talking about at this moment, the helicopter hangars. And that, I would say, has nothing to do with the management or operation of the firm of Strobel & Salzman. Mr. MALETZ. Would the fact that Mr. Strobel spoke to Mr. Ferrenz with you about the possibility of getting work indicate that Mr. Strobel had relinquished all active participation in the management of Strobel & Salzman? Mr. SCHWARZ. The circumstances which led to seeing Mr. Ferrenz seem to indicate to me that he did not have anything to do with the management of the firm at the time when we saw Mr. Ferrenz. Mr. Ferrenz was the man who requested Mr. Strobel to be there. And Mr. Strobel was there, at Mr. Ferrenz's request. Mr. MALETZ. Is Strobel & Salzman presently working on an overtime basis. Mr. SCHWARZ. I have been away for a week and a half; I don't know. Mr. MALETZ. About a week and a half ago were they working on an overtime basis? Mr. SCHWARZ. Partly. Mr. MALETZ. I beg your pardon? Mr. SCHWARZ. They were partly on an overtime basis, depending on whether the work was required at that time. Mr. MALETZ. Were they working on an overtime basis, say, tember of 1954? in Sep Mr. SCHWARZ. I do not believe so, but I could not say definitely. Mr. MALETZ. To refresh your recollection you might refer to a letter, which I shall not put in evidence unless you desire us to do so, a letter dated June 27, 1955. Mr. ROBB. What was that date, sir? Mr. MALETZ. June 27, 1955. Mr. STROBEL. Before we get off of this memorandum dated July 2, 1954, I would like to point out that the matter that I indicated that I would talk to Mr. Hench about is an old warehouse contract that was negotiated and completed in 1953. Mr. MALETZ. And you had discussions with Mr. Hench about a claim for extras in May of 1955 too, did you not, under that old contract? Mr. STROBEL. That is what I followed up on in 1955; yes. Mr. MALETZ. Mr. Chairman, at this point I offer in evidence the report from Mr. Schwarz to Mr. Strobel dated July 2, 1954. |