Mr. ROBB. Now, one further question, Mr. Chairman. I am trying to hurry.

Mr. Strobel, Mr. Moody testified that he prepared for you a statement, a draft of a statement, for you to submit to the Corps of Engineers, I believe, concerning your partnership status; is that correct?

Mr. STROBEL. It was a draft that was supposed to be helpful to me in answering the question that had been raised by the Corps of Engineers due to the fact that I was at that time a Government employee.

Mr. FINE. Just before you ask the question, let us identify it. Is that the memorandum or the affidavit that was annexed to the first Moody report to Mr. Mansure?

Mr. ROBB. That is correct; a memorandum.

Mr. FINE. Yes.

Mr. ROBB. And Mr. Moody testified that you did not use that memorandum; is that correct?

Mr. STROBEL. That is correct.

Mr. ROBB. Now, tell us why.

Mr. STROBEL. I think the reason is this, as you have just heard from testimony by the gentleman from the Corps of Engineers, that it was decided to permit Strobel & Salzman to proceed with producing that work and completing it.

Mr. MALETZ. Could I ask one question?

Mr. Strobel, I am not clear yet. Are you the sole owner of Strobel & Salzman, or are you a partner?

Mr. STROBEL. I think it is pretty clear that Strobel & Salzman is a partnership. We have always filed all our tax papers and information on that basis. If I have at any time claimed I was the sole owner, that could be interpreted to mean that I personally would stand behind whatever responsibilities might be put on that company. Mr. FINE. You were guaranteeing performance when you said you were the sole owner?

Mr. STROBEL. That is right.

Mr. FINE. You were not talking about the legal effect of that arrangement between you and Mr. Salzman?

Mr. STROBEL. Yes.

Mr. ROBB. Now, Mr. Strobel, is it or is it not true that Mr. Salzman is guaranteed $15,000 a year?

Mr. STROBEL. That is correct.

Mr. ROBB. So if your net profit for the year was only $15,000, what would be his share of the net profit?

Mr. STROBEL. You cannot have a share of something that does not exist.

Mr. ROBB. It would be all of it; would it not?

Mr. STROBEL. Well, it would not exist. But he would get that much money. It could cost me that much money for the firm of Strobel & Salzman.

Mr. ROBB. Yes.

Thank you, Mr. Chairman.

May I at this time express to you

Mr. FINE. Yes. Before you do, do not forget to put in the record the income.

Mr. ROBB. We will do that.

Mr. FINE (continuing). That was requested of Mr. Strobel prior to and after he became the Commissioner.

Mr. ROBB. We will do that, sir.

And I thank the chairman for your very great courtesy.

The CHAIRMAN. Thank you, Mr. Robb.

Mr. ROBB. Thank you for your great courtesy.

The CHAIRMAN. It has been nice to have you with us, and I hope you will be with us again under more auspicious circumstances.

Mr. ROBB. This is the most pleasant congressional hearing I have ever attended.

The CHAIRMAN. The hearing is now adjourned as far as Mr. Strobel is concerned, and the committee will reconvene on Wednesday, November 2, at 2:30, when the committee will hear from Arthur Fleming, Office of Defense Mobilization.

(Whereupon, at 5: 35 p. m., the subcommittee adjourned to reconvene at 2: 30 p. m., Wednesday, November 2, 1955.)

(The following material was subsequently supplied for the record:)

Hon. EDMUND F. MANSURE,

NOVEMBER 4, 1955.

Administrator, General Services Administration, Washington, D. C. DEAR MR. MANSURE: You will recall you testified this past Monday, October 31, that you desired to withhold a determination of the propriety of certain activities of Mr. Peter A. Strobel, Commissioner of Public Buildings, from a conflict-ofinterest and ethical standpoint until you had had an opportunity to examine carefully the entire transcript of the hearings before our committee. In addition, you testified that you would defer taking any action in this matter pending your examination of all the testimony.

The key position which Mr. Strobel occupies in Government and the grave questions which have been raised concerning the propriety and ethics of his activities make it essential that this matter be resolved expeditiously. Prompt determination is particularly important in fariness to Mr. Strobel himself.

In view of these considerations, it will be appreciated if you will answer each of the specific questions hereinafter set forth on or before November 22, 1955. These questions should be answered not only in the light of general principles of propriety which are applicable to all Government employees but also in light of the GSA Code of Ethics, which is required to be adhered to by all GSA employees as a condition of employment.

The GSA Code of Ethics, technically referred to as a "Standards of Conduct,” recognizes that "the obligation to protect fully the interests of the Government demands the avoidance of circumstances which invite conflict between self-interest and integrity." It recognizes that "where an individual accepts employment with the Government, he assumes responsibilities over and above efficient and loyal performance of his assigned duties." This is because "in the eyes of the public, his personal conduct, both at work and at home, becomes a part of the reputation of the Government itself." The policy of GSA, as I understand it, is that "in all their dealings (GSA) employees shall so conduct themselves as to permit no possible basis for suspicion of unethical business practices." With this background in mind I should like to review the testimony briefly. The testimony before our committee, as you know, shows that Mr. Strobel has a 90-percent partnership interest in the New York consulting-engineering firm of Strobel & Salzman, which interest he has retained after his appointment by you to the post of Commissioner of Public Buildings on July 1, 1954. Strobel & Salzman employs some 22 technical persons. Its work consists in large measure of drafting plans and specifications for all types of structural work. Strobel & Salzman's clients are architects for the most part.

Although Mr. Strobel became Commissioner of Public Buildings, the primary company responsibility for Strobel & Salzman still continues to be his. Mr. Salzman is responsible to Mr. Strobel for the active day-to-day administration of the firm's business. Mr. Strobel continues to confer and consult with Mr. Salzman outside official Government hours of duty "as may be necessary to proper performance of company business." Ordinarily no new business will be

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undertaken by Strobel & Salzman unless Mr. Strobel's concurrence is first obtained despite the fact that Mr. Strobel is serving as Commissioner of Public Buildings.

The testimony shows that since Mr. Strobel became Commissioner of Public Buildings he has personally sought to obtain business for Strobel & Salzman from prospective clients, although that activity has "dwindled now to the point where it is presently not the case. In 1954 Mr. Strobel's income from Strobel & Salzman was $34,599 as compared to $86,946 in 1953 and $69,946 in 1952. Separate data is not available to indicate Mr. Strobel's income from Strobel & Salzman during the period from July 1, 1954 (when he became Commissioner of Public Buildings), to the present. The firm in recent months has been working on an overtime basis.

THE PETROFF CASE

In this case the testimony before our committee discloses that Mr. Strobel as Commissioner of Public Buildings "recommended" to a subordinate official in his agency that he award a Public Buildings Service contract to Serge Petroff who was at the very time a regular and active client of Strobel & Salzman. The testimony shows that while this was not an "absolute instruction" to select Petroff for the job, the subordinate inferred, on the basis of his discussion with Mr. Strobel, that he was to do business with Petroff and not with any other firm. Mr. Strobel made no disclosure to anyone in the agency that Petroff was a regular and active client of Strobel & Salzman.

The details are essentially these: Serge Petroff & Associates is a New York City architectural firm. It is also an active and regular client of Strobel & Salzman. In fact, in the last several years the Petroff firm has hired Strobel & Salzman to do jobs on the dates indicated with the fee as listed:

Dates Petroff engaged Strobel & Salzman for engineering work and fee agreed to be paid by Petroff to Strobel & Salzman

May 20, 1953: $9,400.

December 1, 1954: Not determined.

January 5, 1955: $12,000 (approximate).
August 31, 1955: $50.

On August 26, 1954, shortly after Mr. Strobel became Commissioner, a meeting was held in Washington, D. C., between representatives of the Public Buildings Service and the Immigration and Naturalization Service to present estimates and all pertinent facts so as to make alterations for a building at 70 Columbus Avenue, New York City, to be occupied by the Immigration and Naturalization Service. At this meeting it was agreed that the cost of alterations should be held to approximately $360,000 and that the work was to be completed as promptly as possible, with every effort to be made to meet a December 1 deadline. Among those present at the meeting were Mr. Strobel and Mr. Edwin H. Lawton, deputy regional director of GSA, New York City, in charge of Public Buildings Service activities in that area.

On the same day and after this meeting Mr. Strobel met with Mr. Lawton and instructed him to return to New York City that night prepared to negotiate a contract with an architect and a construction firm. Among other things Mr. Strobel indicated that he would call Serge Petroff and have him meet Mr. Lawton in New York City on the next day, August 27. Mr. Strobel also advised that the architect was to be instructed to start work immediately so that the weekend could be available to make scale layout drawings for estimation purposes.

The next day, August 27, Serge Petroff appeared at Mr. Lawton's office in New York City and agreed to start work immediately. A verbal contract was entered into that day whereby Mr. Petroff was to obtain a fee of $16,390. The project was subsequently abandoned. Mr. Petroff ceased work and was paid $9,200 by the Public Buildings Service for that portion of the work completed in accordance with the terms of the contract.

Although Mr. Lawton did not regard Mr. Strobel as issuing an "absolute instruction" to select Petroff, the fact is that when he left Mr. Strobel's office on August 26 he did not consider awarding this contract to anybody but Petroff, Moreover, Mr. Lawton testified "that Mr. Strobel inferred that (he) was to do business with Petroff and not with any other firm." Mr. Lawton testified that he "welcomed the suggestion from Mr. Strobel because of the time problem involved in the work." He also testified that "there are many architectural firms in New York City that are qualified to do this type of work and would undoubtedly have been willing to undertake it." Mr. Strobel informed no one in the agency

at the time that Petroff was a regular and active client of Strobel & Salzman ; indeed it was not until a year later that Mr. Strobel provided GSA with a list of Strobel & Salzman clients pursuant to your request.

In passing it may be noted that Mr. Strobel, in September 1954, offered Mr. Petroff the position of Director of the Design and Construction Division of the Public Buildings Service, which position, however, Mr. Petroff did not accept. Questions on Petroff case

It will be appreciated if you will furnish answers to each of the following questions concerning this Petroff matter:

1. Was it proper or improper for Mr. Strobel when Commissioner of Public Buildings to have recommended Mr. Petroff, a regular and active client of Strobel & Salzman, to do the work for the Public Buildings Service job in New York City? Was this a violation of the GSA code of ethics?

2. Was it proper or improper for Mr. Strobel when Commissioner of Public Buildings to have inferred to Mr. Lawton that he (Mr. Lawton) was to do business with Petroff and not with any other firm? Was this a violation of the GSA code of ethics?

3. Was it proper or improper for Mr. Strobel not to have advised officials of GSA at the time, that Petroff was a regular and active client of Strobel & Salzman? Was this a violation of the GSA code of ethics?

4. Was it proper or improper for Mr. Strobel not to have disqualified himself under the circumstances? Was this a violation of the GSA code of ethics?

THE FERRENZ & TAYLOR CASE

In this case the testimony shows that Mr. Strobel when Commissioner of Public Buildings solicited business for Strobel & Salzman from the New York City architectural firm of Ferrenz & Taylor. Subsequently Strobel & Salzman did obtain a contract from this concern. Ferrenz & Taylor, it may be noted, is interested in getting Government business from the Public Buildings Service.

The details are these: In 1948 Strobel & Salzman had attempted to secure work from Ferrenz & Taylor but without success. In November or December of 1954 Mr. Schwarz, business manager of Strobel & Salzman, made an appointment with Mr. Ferrenz to see him about the possibility of getting work on a New York City housing job. Mr. Ferrenz suggested that Mr. Schwarz bring Mr. Strobel along with him. Mr. Strobel, who was then Public Buildings Service Commissioner, went with Mr. Schwarz to see Mr. Ferrenz to try to get some business for Strobel & Salzman from Ferrenz & Taylor. Mr. Strobel, at the time he made this visit to Ferrenz & Taylor, presumed that they "like any other (architectural) firm might be interested in work" for the Public Buildings Service. Since Ferrenz & Taylor didn't have a housing job available Mr. Strobel and Mr. Schwarz left after submitting a brochure of Strobel & Salzman.

Mr. Strobel testified that after he and Mr. Schwarz "solicited business from Ferrenz & Taylor, Strobel & Salzman did obtain a contract from Ferrenz & Taylor in August 1955 calling for a fee of $18,000."

Ferrenz & Taylor, it may be noted, has indicated an interest in getting business from the Public Buildings Service. For that purpose it has submitted its brochure to the Public Buildings Service on July 30, 1955, and answered an agency questionnaire. At the present time it is being considered by the agency for work under the Public Buildings lease-purchase program if the occasion arises.

Questions on Ferrenz & Taylor case

It will be appreciated if you will furnish answers to each of the following questions concerning the Ferrenz & Taylor matter:

1. Was it ethical for Mr. Strobel when serving as Commissioner of Public Buildings to solicit business for his private firm from an architectural concern that might be interested in getting business from the Public Buildings Service? Was this proper or improper? Was this a violation of the GSA code of ethics? 2. Was it a violation of GSA's code of ethics for Mr. Strobel, the Commissioner of Public Buildings, to solicit business for his private firm without getting specific approval therefor from GSA officials in accordance with section 4 of this code?