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The writer inquired as to whether or not Mr. Strobel gave any reason as to why he would not sign the form and Mr. Strawser replied that he gave no reason.
Mr. RODINO (presiding). What was the date of that memorandum? Mr. Moody. December 20, 1954.
Mr. MALETZ. It is correct, is it not, that Mr. Strobel did sign the form about a week later?
Mr. Moody. On December 27.
Mr. MALETZ. Mr. Chairman, I ask that this memorandum, dated
DECEMBER 20, 1954. To: B. I. Shacklette, Director of Compliance. From: Ralph Given, Special Agent. Subject: Standards of Conduct, Peter Strobel, Commissioner, PBS.
Mr. John E. Strawser, Administrative Officer, PBS, called the writer on the phone today and advised that Mr. Peter Strobel, Commissioner, PBS, had stated that he would not sign Standard Form 1179—Standards of Conduct.
The writer inquired as to whether or not Mr. Strobel gave any reason as to why he would not sign the form and Mr. Strawser replied that he gave no
Mr. MALETZ. Now, did you have several discussions with Mr. Strobel about the extent of his business relationships with Strobel & Salzman?
Mr. Moody. I am unable to remember at this point, Mr. Maletz, whether I had several discussions or one. I had at least one discussion with Mr. Strobel.
Mr. MALETZ. And you had one discussion on September 13, 1955, at which I was present; did you not?
Mr. Moody. That is correct, sir.
Mr. MALETZ. Now, did Mr. Strobel ever tell you that ordinarily no new business would be undertaken by Strobel & Salzman unless Mr. Strobel's concurrence was first obtained ?
Mr. Moody. That is my recollection of the substance of what he told you and me at the September 13 meeting. I don't know if those were his words.
Mr. MALETZ. Did you at any time ever tell Mr. Strobel that he should not participate in any contract matters which Strobel & Salzman had with the Corps of Engineers!
Mr. KEATING. Would you read that question, please?
Mr. MOODY. My recollection in regard to what I told Mr. Strobel is set forth in the memorandum from me that you have previously introduced into the record. It is substantially that, I believe, sir.
Mr. MALETZ. And what is your recollection?
Mr. Moony. We advised Mr. Strobel that 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 it.
Mr. MALETZ. I think your memorandum indicates, does it not, that you had at least one discussion with Mr. Strobel the latter part of 1954? I wonder if you could summarize in your own words just what the problem was.
Mr. Moody. Certainly. Mr. Strobel had consulted with Mr. Elliott and myself about a question that had come up in his mind, as far as I know, or knew at that point, as to whether he was a “resident commissioner" within the meaning of that term as it was used in article X of a contract he then held with the Corps of Engineers.
Mr. MALETZ. And what contract are you talking about now, Mr. Moody?
Mr. MOODY. That is the contract that is identified as contract No. DA-49–129-Eng–305. At that point, Mr. Strobel, according to my recollection, had received a letter of August 4, I believe was the date, from the Corps of Engineers regarding his financial interest in the firm of Strobel & Salzman.
Mr. MALETZ. And did the letter from the Corps of Engineers inquire as to whether Mr. Strobel would disassociate himself from his firm's profits in that Corps of Engineers contract?
Mr. Moody. Yes, it did.
Mr. MALETZ. I see. Now, did Mr. Strobel request you to take any action concerning this matter?
Mr. MOODY. As a result of our discussions, it was suggested by us that Mr. Strobel prepare a statement setting forth in full detail his relationships with the firm and his contractual relationships with the Corps of Engineers, and, after some subsequent discussions, he asked me, as I recollected, that I prepare a draft of a proposed statement for him to use in preparing that statement.
Mr. MALETZ. Do you know whether Mr. Strobel did send this statement to the Corps of Engineers ?
Mr. Moody. Mr. Strobel informed me that he did not.
Mr. MALETZ. Did he indicate why he did not send that statement to the Corps of Engineers ? Mr. Moody. According to my recollection, when the question came
he stated that he had decided to handle the matter in some other way.
Mr. MALETZ. Did he indicate what the other way was? Mr. Moody. No; he did not. Mr. MALETZ. I beg your pardon? Mr. MOODY. No; he did not. Mr. MALETZ. Now, did you or Mr. Elliott give Mr. Strobel a draft of a letter in answer to the Corps of Engineers’ letter of August 4?
Mr. Moody. No, sir. I gave him a statement, a draft of a statement which I had drafted for his use in preparing a letter.
Mr. MALETZ. Now, your memorandum indicates that Mr. Strobel informed you and Mr. Elliott that he had made a complete disclosure of the situation to administration officials prior to his appointment. Do you recall that?
Mr. Moody. Yes, sir.
Mr. MALETZ. Did Mr. Strobel at any time tell you the names of the administration officials to whom he had made such disclosure?
Mr. Moody. Not at the time we talked with him in August or September of 1954. He did in September of 1955.
Mr. MALETZ. And what did he say on September 13, 1955?
Mr. Moody. According to my recollection, Mr. Strobel advised me and
you that he had conferred with his advisers about the problem and he identified those advisers.
No. I am sorry. That is wrong. He said his advisers had told him that he had taken his problem up with administration officials, and he identified those administration officials.
Mr. MALETZ. And he indicated who these administration officials were?
Mr. Moody. Yes; he did.
Mr. Moody. Attorney General Brownell and a gentleman at the White House whose name escapes me at the moment.
Mr. MALETZ. Would that be Mr. Thomas Stevens?
Mr. MALETZ. Did Mr. Strobel state at the September 13, 1955, meeting that his adviser had informed him that Attorney General Brownell and Mr. Stevens had concluded that it would be perfectly proper for Mr. Strobel to continue to operate his engineering business during his tenure as Public Buildings Commissioner?
Mr. MOODY. I believe that is the substance of what Mr. Strobel's advice was.
Mr. MALETZ. Did Mr. Strobel at this September 13, 1955, meeting, that you and I attended, indicate any doubt that his arrangement, his private business relationship, had been cleared beforehand with the Attorney General?
Mr. Moody. Well, I didn't think so, Mr. Maletz; no.
Mr. MALETZ. Did you get the impression, on the basis of what Mr. Strobel had stated to you and to me, that Mr. Strobel was clear in his own mind that this matter had been cleared beforehand with the Attorney General?
Mr. Moody. Well, I think I would rather put it this way. I believe Mr. Strobel was clear in his own mind that he had been told that it had been cleared.
Mr. MALETZ. I see.
Now, do you recall that at this September 13, 1955, meeting, I asked Mr. Strobel who his adviser was?
Mr. MOODY. I do. Mr. MalETz. Did he name that adviser ? Mr. Moody. No; he did not. Mr. MALETZ. What did he say? Mr. Moody. I believe he told us that he would rather not identify him at that time, indicating that he was not a Government official or not an attorney.
Mr. MALETZ. Did he indicate during that September 13 discussion that he had discussed with his adviser the question of disassociating himself from his firm's profits in connection with the Corps of Engineers' contract?
Mr. Moody. Yes; he did, according to my recollection.
Mr. MALETZ. Did he indicate that his adviser was the same person who had recommended him for the job in the first place?
Mr. Moody. Yes; he did.
Mr. MALETZ. Did he indicate that this adviser was the same person who had consulted with the Attorney General concerning the propriety of Mr. Strobel's serving in a dual capacity?
Mr. MOODY. I believe he did.
Mr. MALETZ. Did Mr. Strobel state that his adviser had told him that he, the adviser, would straighten the matter out with the Corps of Engineers ?
Mr. Moody. I don't believe my recollection is quite that precise.
Mr. MALETZ. All right, sir. Would you indicate to us exactly what your recollection is?
Mr. Moody. You are speaking now about this particular problem raised by the Corps of Engineers ?
Mr. MALETZ. That is right.
recollection is like this, that Mr. Strobel indicated to you, in my presence, that after he had received this draft, that I had prepared and handed to him, he had discussed the problem with his adviser, and I believe it was Mr. Strobel's understanding, but at this moment I cannot recall his precise words, that that adviser was going to handle the problem for him.
Now, I am not clear in my recollection as to whether he indicated how he was going to handle it or not.
Mr. MALETZ. I see. Now, did you have conversations with Mr. Adams of the Department of the Army about this Strobel & Salzman contract with the Corps of Engineers ?
Mr. Moody. I did not.
Mr. MALETZ. Would you indicate to us the nature of those conversations?
Mr. ELLIOTT. Yes. Following the discussion with Mr. Strobel that is outlined in Mr. Moody's memorandum, I called John Adams and explained the problem to him as it is set forth in that memorandum. Mr. Adams told me he knew nothing about the case; he would endeavor to get the facts from the corps. He said that it would be helpful to him for a decision if he could have a complete statement of facts from Mr. Strobel as to Mr. Strobel's relationship and interest in Strobel & Salzman. I told him that we were already getting that, and it was concluded that when I got that statement of fact, I was to get in touch with Mr. Adams again; we were to go over it on the basis of the facts and, if appropriate, then the two of us would then talk to Assistant Attorney General Rankin.
Some weeks or days after that, Mr. Adams called me as I recall, it was on an entirely different matter—but during the course of the conversation, he asked me about this case, and I said, “Well, I still haven't gotten the statement of facts. I will find out about it."
I would say it was about 2 or 3 weeks after that that I met Mr. Adams at a dinner. As a matter of fact, it was a dinner of the National Security Industrial Association. I don't recall the exact date. I am guessing, in early November of 1954. And we were talking together about a number of things before dinner. He brought up this question again, and I said, “Well, John, I haven't gotten the statement of facts, and I think Mr. Strobel is going to pursue it in his own way. So there is no use of our discussing it any further. Just forget about it because I haven't got the facts to bring to you.
That is my total discussion with Mr. Adams on the subject.
Mr. MALETZ. Do you know, Mr. Moody, how this matter was finally resolved, this problem of the Corps of Engineers on the question that Mr. Strobel disassociate himself from his firm's profits in that transaction?
Mr. Moody. No; I do not, Mr. Maletz.
Mr. MALETZ. Now, Mr. Moody, turning to another matter, do you recall being consulted by persons in the New York office of the Public Buildings Service concerning renewal of a lease at 346 Broadway?
Mr. MOODY. I do.
Mr. MALETZ. Was there a legal problem in connection with that lease renewal ?
Mr. Moody. There was.
Mr. Moody. We were occupying the property at 346 Broadway under the terms of a 5-year lease, and the right to occupy expired as of June 30, 1954. We had advertised for bids to supply alternate space to the Government for the same purpose as that occupied at 346 Broadway. The only bid that was received was from the owner, the present landlord. Those were thrown out and new bids came out. In response to a subsequent invitation, again the only bid received was from the then landlord.
Mr. MALETZ. You advertised for a straight 5-year lease?
Mr. Moody. We advertised for a lease of space for a period of time up to 5 years the duration of which, as I recall now, was to be specified by the bidder, but there was a clause in the invitation that gave the Government the right of 30-day cancellation notice
Mr. MALETZ. I see.
Mr. Moody (continuing). No matter what period of time had been specified. The bid from the owners of 346 Broadway was sent down to the Washington office for approval to enter into a 5-year lease, which is required by our internal regulations, and they had proposed to accept the bid submitted.
On the examination of that proposed award in my office, it was disclosed that the bid by the owners of 346 Broadway was not responsive to the terms of the invitation for bid, in that the Government's 30-day cancellation right had been stricken. As such, there was no legal authority to make the award.
I discussed it a number of times with both people in Washington and people in New York and others.
Mr. MALETZ. Now, what happened ?
Mr. Moody. Well, upon the basis of my discussions with counsel in New York, a determination was prepared under a provision of our statute in circumstances where the facts support that a determination can be made, that no useful purpose would be served in advertising, and you can go ahead and conclude the lease on what we term “a negotiated basis."
Mr. MALETZ. Did you negotiate the lease on a straight 5-year basis without a right of 30-day cancellation?
Mr. MOODY. I believe that is right, sir; yes.
Mr. MALETZ. Let me ask you this. If you had advertised for a 5-year lease without this right of cancellation do you think you might have received more than one bid?
Mr. MOODY. On the basis of the facts as recited in the certificate of determination prepared by our New York office, I obviously con