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be helpful to a decision as to the action to be pursued if Mr. Strobel would prepare a complete written statement of his relationship with the company of Strobel & Salzman. We so informed Mr. Strobel. At Mr. Strobel's request, I prepared a rough outline draft of such a statement setting forth the facts as he had related them to me as best I understood them, which I gave to him for his use in preparing the requested statement in final form. Attached as exhibit 2 is a copy of that draft.

During the course of our discussions with Mr. Strobel, he told Mr. Elliott and myself that he had made a complete disclosure of his situation to administration officials prior to his appointment and was advised that his situation was perfectly proper and that no change therein was necessary incident to his appointment.

At about the same time Mr. Strobel was requested to sign the so-called conflict of interest statement, and this was discussed by him with Mr. Elliott and myself. He was advised that a statement fully disclosing his private situation and his dealings with the Government (we had in mind a copy of the statement he was supposed to prepare and submit to the Corps of Engineers) should be attached to the conflict of interest which he should sign subject to such disclosure. It was our thought that this statement, verified to the extent considered necessary, would form a basis for an official opinion in the matter.

The statement was never submitted to Mr. Elliott or me.

After some time passed, without further developments to my knowledge, I inquired of Mr. Strobel as to what, if anything, he had done about the problem. Mr. Strobel informed me that he had conferred with his advisers and had decided upon a course of action somewhat different than had been discussed with Mr. Elliott and me. He did not disclose what that course of action was. Since that time neither Mr. Elliott nor I have been consulted by Mr. Strobel or by anyone else in this regard.

Neither the question of whether his personal situation was in conflict with his official interests nor the full facts upon the basis of which a legal opinion could be formulated has been presented for our official consideration until Friday, August 26, 1955, at which time Administrator Mansure requested us to ascertain the full facts and advise him, which we will proceed to do upon Mr. Strobel's return to the office.

I have reviewed the substance of the foregoing with Mr. Elliott, who tells me that his recollection coincides, generally, with mine.

J. E. MOODY.

EXHIBIT 1

AUGUST 4, 1954. STROBEL & SALZMAN,

New York 18, N. Y. GENTLEMEN : Reference is made to the recent appointment of Mr. Strobel as Public Buildings Commissioner and to the announcement by your firm that during his tenure of office your organization would be under the direction of Mr. Salzman.

The architect-engineer information form submitted in connection with recent modification to contract No. DA 49–129-Eng-350 indicates Mr. Strobel as a partner. Inasmuch as Mr. Strobel is now in Government service, it is necessary to ascertain whether during his leave of absence from your company he has disassociated himself from all future partnership profits resulting from Government contracts, including the Army hangars contract. Your early reply will be appreciated. Sincerely yours,

H. B. ZACKRISON, Chief, Engineering Division, Military Construction.

EXHIBIT 2

STATEMENT

The firm of Strobel & Salzman, architect-engineers, 70 West 40th Street, New York, N. Y., is wholly owned by the undersigned. Mr. Salzman is a contract employee whose duties and responsibilities are fixed by the contract and with whom, pursuant to the employment contract, a financial settlement is made once

each year upon the basis of company net earnings. All other company net earnings from all sources accrue wholly to me.

The company holds contract No. DA-49–129–Eng-305 with the Corps of Engineers, Department of the Army. The contract was entered into prior to July 1, 1954, the date I assumed duties as Commissioner, Public Buildings Service, General Services Administration. My company also holds other prime contracts with the Corps of Engineers and is subcontractor to other contractors with the Corps of Engineers and its intention is to compete for other prime and subcon. tracts with the Corps of Engineers and other Government agencies other than GSA.

While Mr. Salzman is responsible to me for the active day-to-day administra. tion and conduct of the company business including the performance of the Government prime and subcontracts, the primary company responsibility is mine and I confer and consult with Mr. Salzman (outside of my official Government hours of duty) as may be necessary to assure the proper performance of company business and I intend to continue to do so during my tenure as Commissioner, PBS.

My company has no contracts of any nature with the General Services Administration and will not compete for nor accept any such contracts during my tenure as Commissioner, PBS.

As Commissioner, PBS, I have no responsibility, direct or indirect, for the conduct of any of the affairs of Government agencies with which my company holds contracts and, of course, I would not conduct company business during official working hours nor use or seek to use any knowledge, information, acquaintances, etc., acquired by me in the performance of my official duties to the advantage or for the benefit of my company in its dealings with the Government.

PETER A. STROBEL,

MEMORANDUM FOR THE ADMINISTRATOR RE CONFLICT OF INTEREST-P. A. STROBEL

Supplementing memo of August 29, have reviewed compliance file on Mr. Strobel and his personnel file in Office of Management as instructed.

Compliance file discloses :

(1) memorandum of June 24, 1954, from Compliance to Personnel advising that in accordance with section 3 (b) of Executive Order 10450 a full field investigation had been completed and security clearance was given for Strobel to occupy sensitive position of Commissioner, Public Buildings Service. Extensive investigation preceded issuance of this memo but was directed toward security aspects rather than conflict of interests.

(2) Strobel first declined to sign standards of conduct statement.

(3) Strobel did sign standards of conduct statement on December 27, 1954, at bottom of which is notation : "see my memo re paragraph “No. 4 and No. 6; PAS." Paragraphs 4 and 6 referred to cover outside employment and outside connections. (Excerpt attached.) Memo referred to in notation appears to be memo of December 29, 1954 (copy attached) addressed to the Director of Personnel by Strobel declaring his outside interest in firm of Strobel & Salzman; stating that the firm will not directly or indirectly do any work connected with GSA ; and stating that he had relinquished active management of the firm.

(4) memorandum to file dated August 26 signed by Shacklette states that Strobel was urged on December 27, 1954, and again on August 9, 1955, to permit special agent to obtain list of Strobel & Salzman clients by examination of company records or at least that Strobel submit such a list. This memo does not expressly state that Strobel refused either request but clearly so implies and as far as I can learn list has not been made available.

The personnel file contains nothing of significance regarding the conflict of interest question in addition to that mentioned above.

(Signed) J. E. MOODY.

DECEMBER 29, 1954. To: Director of Personnel. From : Commissioner, Public Buildings Service. Subject: Standard of conduct.

On December 27, I filed the standard of conduct certification with the following note, “see my memorandum re paragraphs 4 and 6."

As a matter of record I want it understood that I have outside interests in the firm of Strobel & Salzman, consulting engineers (partnership), of New York

City, as well as real estate and farms investments. Strobel & Salzman will not directly or indirectly do any Government work connected with the functions of General Services Administration.

It is also a matter of record that I have relinquished active management of the firm of Strobel & Salzman.

P. A. STROBEL.

EXCERPT FROM STANDARDS OF CONDUCT FORM (GSA FORM 1179) 4. Outside employment.—The Director of Personnel in the central office and regional directors in regional offices are authorized to approve or disapprove requests to engage in outside employment. Except upon prior written approval of such official, or other official to whom approving authority has beeen redelegated, employees shall not engage in any outside employment or business activity, and in no instance shall approval be granted where such employment will involve conflict with Government interests. Employees shall not accept remuneration in any form from nongovernmental sources for the performance of official duties whether the time expended is a part of the normal working period, overtime, or off-duty hours.

*

6. Outside connections. Each employee shall submit to his immediate superior a report of outside connections, listing all personal or financial relationships which he has or formerly had with any person, firm, corporation, or other entity doing business with this Administration or which there is reason to believe might do any business with this Administration. The employee is responsible for the current status of this information. It is the responsibility of the immediate superior, upon receipt of such report, to forward it through appropriate channels to the Director of Compliance in the central office or to the Compliance Division representation in a regional office. Employees shall not take final action with respect to any matter in which such relationship or connection is involved unless specific written authorization is received from the Director of Compliance or the Compliance Division representative.

Mr. MALETZ. This is entitled “Conflict of Interest–P. A. Strobel." It has a heading, "Memorandum for the Administrator.” It reads as follows:

Although my recollection of the matter is not exact and I have no notes from which my memory can be refreshed, according to my best recollection the occurrence of events and my knowledge in this matter is substantially as follows:

Sometime in the latter part of 1955 Mr. Strobel discussed with Mr. Elliott and myself attached letter, dated August 4, 1954, which the firm of Strobel & Salzman had received from the Corps of Engineers.

That is exhibit No. 1. Possibly I should read exhibit No. 1 at this point.

Mr. KEATING. Now, I wonder if that is correctly stated to be the latter part of 1955 when he discussed this letter of August 4, 1954, and since this memorandum is dated August 29, 1955.

Mr. ELLIOTT. No. I am sure this is a typographical error.

Mr. MalETz. It should be sometime in the latter part of 1954, I should imagine.

Mr. KEATING. I should imagine so.
Mr. MANSURE. I think that is correct.

Mr. ELLIOTT. I can answer as to that. There was a typographical error in the making of some copies, one set of copies of that memo,

and the girl put in that early date there a “5” where she should have put a “4." The original memorandumMr. KEATING. This is a series of copies of the original then? Mr. ELLIOTT. Yes.

ner.

Mr. MALETZ. This is exhibit 1, dated August 4, 1954, letter from H. B. Zackrison, Chief, Engineering Division, Military Construction, to Strobel & Salzman, 70 West 40th Street, New York 18, N. Y.:

GENTLEMEN : Reference is made to the recent appointment of Mr. Strobel as Public Buildings Commissioner and to the announcement by your firm that during his tenure of office your organization would be under the direction of Mr. Salzman.

The architect-engineer information form submitted in connection with recent modification to contract No. DA 49–129_Eng-350 indicates Mr. Strobel as a part

Inasmuch as Mr. Strobel is now in Government service, it is necessary to ascertain whether during his leave of absence from your company he has disassociated himself from all future partnership profits resulting from Government contracts, including the Army hangars contract.

Your early reply will be appreciated.
Continuing with Mr. Moody's memorandum:

During this discussion Mr. Strobel gave us his version of his connection with the firm of Strobel & Salzman.

As I recall it, Mr. Strobel's situation, as outlined by him, was substantially as follows:

1. He was the full and complete owner of the company to whom all company net earnings from all sources accrued.

2. Mr. Salzman was a partner in name only and, in fact, was a salaried employee under contract.

3. Mr. Strobel had disassociated himself from active participation in the conduct of the affairs of the company but consulted with Mr. Salzman outside of official Government hours of duties and intended to continue to do so during his tenure as Commissioner of PBS.

4. The company held contract DA-49_129-Eng-305 with the Corps of Engineers which was entered into prior to the date he assumed duties as Commissioner of PBS and his company held other contracts with the Corps of Engineers and was subcontractor for or otherwise associated with other firms who had contracts with the Corps of Engineers.

5. His company intended to continue to compete for other prime and subcontracts with the Corps of Engineers and other Government agencies except GSA during the period of his tenure as Commissioner of PBS, but that he personally did not intend to act in such matters in behalf of his company.

6. His company has no contracts of any nature with GSA and would not compete for nor accept any such contracts during his tenure as Commissioner of PBS.

Mr. Elliott and I advised Mr. Strobel tentatively, and based upon his recitation of the facts, that we doubted whether he was in violation of the so-called conflictof-interest statutes. His particular concern at that point was whether he was a "Resident Commissioner" within the meaning of the so-called "officials not to benefit” clause (18 U. S. C. A. 281) included in his contract with Corps of Engineers. In our judgment he was not, and we so advised him.

We tentatively advised him further, however, that there did appear to be a question of ethics and public policy involved and that his situation possibly was in conflict with the attitude of Congress as reflected by their action in regard to certain officials of private corporations then recently appointed to public office. The Corps of Engineers' letter also raised a question as to whether there were Department of Defense regulations on the subject.

We emphasized that our advice was tentative and informal pending receipt of his written statement fully disclosing all pertinent facts and we suggested to Mr. Strobel that he prepare a complete statement of his company relationships and his dealings with the Government and submit same to the Corps of Engineers in response to their letter.

We further agreed to discuss the matter informally with Mr. John Adams, then General Counsel of the Army, and with Assistant Attorney General Lee Nankin, Department of Justice.

We advised Mr. Strobel that, of course, he should not personally participate in any negotiations with the Corps of Engineers or other Government agency to secure contract work or otherwise in behalf of the firm of Strobel & Salzman and we stressed the importance of this.

Mr. Elliott subsequently discussed the matter informally with Mr. John Adams. According to Mr. Elliott's recollection, Mr. Adams felt that it would be helpful to a decision as to the action to be pursued if Mr. Strobel would prepare a complete written statement of his relationship with the company of Strobel & Salzman. We so informed Mr. Strobel. At Mr. Strobel's request, I prepared a rough outline draft of such a statement setting forth the facts as he had related them to me as best I understood them, which I gave to him for his use in preparing the requested statement in final form. Attached as exhibit 2 is a copy of that draft.

Mr. Chairman, I will now ask to read this exhibit 2:

STATEMENT

The firm of Strobel & Salzman, architect-engineers, 70 West 40th Street, New York, is wholly owned by the undersigned. Mr. Salzman is a contract employee whose duties and responsibilities are fixed by the contract and with whom, pursuant to the employment contract, a financial settlement is made once each year upon the basis of company net earnings. All other company net earnings from all sources accrue wholly to me.

The company holds contract No. DA-49–129-Eng.-305 witn the Corps of Engineers, Department of the Army. The contract was entered into prior to July 1, 1954, the date I assumed duties as Commissioner, Public Buildings Service, General Services Administration. My company also hold other prime contracts with the Corps of Engineers and is subcontractor to other contractors with the the Corps of Engineers and its intention is to compete for other prime and subcontracts with the Corps of Engineers and other Government agencies other than GSA.

While Mr. Salzman is responsible to me for the active day-to-day administration and conduct of the company business including the performance of the Government prime and subcontracts, the primary company responsibility is mine and I confer and consult with Mr. Salzman (outside of my official Government hours of duty) as may be necessary to assure the proper performance of company business, and I intend to continue to do so during my tenure as Commissioner, PBS.

My company has no contracts of any nature with the General Services Administration and will not compete for nor accept any such contracts during my tenure as Commissioner, PBS.

As Commissioner, PBS, I have no responsibility, direct or indirect, for the conduct of any of the affairs of Government agencies with which my company holds contracts and, of course, I would not conduct company business during official working hours nor use or seek to use any knowledge, information, acquaintance, etc., acquired by me in the performance of my official duties to the advantage or for the benefit of my company in its dealings with the Government.

The CHAIRMAN. Is that letter signed by Mr. Strobel ?
Mr. MALETZ. No, it is not signed.
The CHAIRMAN. What is that?

Mr. MALETz. That is attached as exhibit 2. That was a draft prepared by Mr. Moody, as I understand it, on the basis of his discussions with Mr. Strobel.

Continuing with Mr. Moody's memorandum :

During the course of our discussions with Mr. Strobel, he told Mr. Elliott and myself that he had made a complete disclosure of his situation to Administration officials prior to his appointment and was advised that his situation was perfectly prepared and that no change therein was necessary incident to his appointment.

At about this same time Mr. Strobel was requested to sign the so-called conflict of interest statement and this was discussed by him with Mr. Elliott and myself. He was advised that a statement fully disclosing his private situation and his dealings with the Government (we had in mind a copy of the statement he was supposed to prepare and submit to the Corps of Engineers) should be attached to the conflict of interest which he should sign subject to such disclosure. It was our thought that this statement, verified to the extent considered necessary, would form the basis for an official opinion in the matter.

The statement was never submitted to Mr. Elliott or me.

After some time passed, without further developments to my knowledge, I inquired of Mr. Strobel as to what, if anything, he had done about the problem. Mr. Strobel informed me that he had conferred with his advisers and had de

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