TESTIMONY OF EDWIN H. LAWTON, DEPUTY REGIONAL DIRECTOR, REGION 2, PUBLIC BUILDINGS SERVICE, NEW YORK CITY

The CHAIRMAN. You may proceed. Will you give your name and your address and your office?

Mr. LAWTON. I am Edwin H. Lawton, deputy regional director of Public Buildings Service, region 2, New York City, 250 Hudson Street. Mr. MALETZ. Mr. Lawton, you are deputy regional director, you say, for the Public Buildings Service?

Mr. LAWTON. Yes.

Mr. MALETZ. Did there come a time, Mr. Lawton, when the Immigration and Naturalization Service proposed abandoning Ellis Island and moving into a building at 70 Columbus Avenue, New York City? Mr. LAWTON. Yes, sir; they approached us in New York to

Mr. MALETZ. Was it necessary to make extensive alterations at the Columbus Avenue location to provide these quarters for the Immigration and Naturalization Service?

Mr. LAWTON. They wanted extensive alterations on two floors of 70 Columbus Avenue.

Mr. MALETZ. Was a meeting arranged in Washington, D. C., for August 26, 1954, for representatives of the Immigration and Naturalization Service and GSA?

Mr. LAWTON. That is right.

Mr. MALETZ. Was the purpose of this meeting to present estimates and all pertinent facts?

Mr. LAWTON. Yes. There had been many changes made in the preliminary requirements of Immigration and Naturalization Service, and this was to make a final decision as to what should be done there. It was a meeting with Immigration and Justice officials.

Mr. MALETZ. Did you actually attend this meeting?

Mr. LAWTON. I was there.

Mr. MALETZ. And was Mr. Strobel present?

Mr. LAWTON. He was there.

Mr. MALETZ. Were any decisions reached at that meeting?

Mr. LAWTON. We decided that we would go ahead with the alteration work.

Mr. MALETZ. Now, at the conclusion of this meeting, did Mr. Strobel give you any instructions with respect to the selection of an architect and a contractor for this project?

Mr. LAWTON. No, sir; he gave me no instructions as such. We had a discussion at the end of the meeting, because time was a very important factor in this job. In order to complete it by the end of December, it meant that the work had to be undertaken immediately, with no further delays. He asked me at that time if I knew of some architects in New York that I could discuss the job with on the basis of a negotiated contract, proposed design work. I told him "No," but I could make up such a list. It would take several days, but we would start on it right away.

He said, "Well, I know of several firms in New York City, and Serge Petroff is one that can do the job, I am quite sure; I suggest that you talk to him," which I did, on the next day.

Mr. MALETZ. Did Mr. Strobel indicate to you that he himself would call Serge Petroff?

Mr. LAWTON. He said he would have Mr. Petroff meet me in New York on the following day, which was Friday.

Mr. MALETZ. Did he tell you then that he wanted you to have Petroff get started?

Mr. LAWTON. No; he did not say that.

Mr. MALETZ. Mr. Lawton, I show you a handwritten memorandum and ask you whether this is a memorandum you yourself prepared. Mr. LAWTON. Yes; that is my handwriting.

Mr. MALETZ. May I have that, sir?

That is a memorandum which you yourself prepared. And that is the original copy; is it not?

Mr. LAWTON. Yes.

Mr. MALETZ. I read the third page of this memorandum:

Meeting in Washington, D. C., with Mr. Loughren and Mr. Ford of I. & N.that is Immigration and Naturalization Service?

Mr. LAWTON. That is right.

Mr. MALETZ (continues reading):

and Mr. Strobel, Mr. Nagel, and myself of GSA. Decided to undertake the necessary alterations to permit detention quarters at 70 Columbus Avenue. The entire 10th, 11th, and 12th floors would be required to provide required space for these quarters. The roof would also be required for a recreational area. It was agreed that I. & N. would reimburse GSA for alteration expenses up to about $360,000, the exact amount to be determined after more details had been worked out at regional level. I. & N. declined to agree to reimburse GSA for rent for the sixth floor which was given up by AEC and reassigned to I. & N. but agreed to discuss the matter with high officials of I. &. N.

Mr. Strobel instructed me to return to New York City that night to prepare to negotiate a contract with an architect and a construction firm. He directed L. L. Hunter, D. & C., to give me samples of approved negotiated contracts to use as guide and to assist me in any way necessary.

He indicated he would call Serge Petroff in and James King & Son, a construction firm, to meet me in New York City August 27. He also advised that the architect was to be instructed to start work immediately so that the weekend could be available to make one-half-inch scale layout drawings for estimating purposes.

I. & N. representatives reiterated that the alteration work must be completed in time to permit evacuation of Ellis Island before December 1.

August 27. Discussed alterations with Serge Petroff, architect, and Joe Bergen, representing James King & Son, construction contractors. Mr. Petroff agreed to start work immediately and provide preliminary plans to James King & Son for construction estimates.

Is that an accurate account of what transpired?

Mr. LAWTON. That is an accurate account of what transpired. But I was not instructed by Mr. Strobel to make a contract with Mr. Petroff. Mr. MALETZ. Did you not tell me on the telephone that you had a meeting with Mr. Strobel and that Mr. Strobel instructed you to return to New York that night and to have Mr. Petroff get started the next day?

Mr. LAWTON. It is correct to the point that I was told by Mr. Strobel to return to New York that Thursday night, and that he would have Mr. Petroff in my office Friday morning.

Mr. MALETZ. He told you he would have Mr. Petroff in your office the next morning?

Mr. LAWTON. That is right.

Mr. MALETZ. Then is it not true that Mr. Strobel decided to have Mr. Petroff assigned the contract?

Mr. LAWTON. I can't say that he decided that. Mr. Petroff decided the contract. He arranged a meeting between Mr. Petroff and myself where the contract was subsequently negotiated.

Mr. MALETZ. And you subsequently negotiated the contract?

Mr. LAWTON. I did.

Mr. KEATING. Does counsel construe that memorandum as saying that he instructed him to get this particular architect? I wish you would read again that place where it said "instructed" because I listened very carefully to that.

Mr. Scorr. In addition, bearing in mind that Mr. Lawton has specifically stated he was not so instructed.

Mr. MALETZ (reading):

Mr. Strobel instructed me to return to New York City that night prepared to negotiate a contract with an architect and a construction firm. He advised L. L. Hunter, D. and C., to give me samples of approved negotiated contracts to use as guides and to assist me in any way necessary. He indicatedyou are referring to Mr. Strobel—

He indicated he would call Serge Petroff in and James King & Son, a construction firm, to meet me in New York City August 27. He also advised that the architect was to be instructed to start work immediately so that the weekend could be available to make one-half-inch-scale layout drawings for estimating purposes.

Mr. KEATING. "The architect," whoever he might be.

Mr. MALETZ. That is right.

Now, Mr. Lawton, did you actually consider any other firm apart from Serge Petroff?

Mr. LAWTON. No, sir, I did not.

Mr. MALETZ. And why was that?

Mr. LAWTON. Because of the time limitation, primarily. I talked over the job with Mr. Petroff, and was satisfied that he could undertake the work and perform it in the time requirements that I specified. His price was satisfactory to me.

The CHAIRMAN. That statement of Mr. Lawton will be received in the record.

(The memorandum referred to is as follows :)

August 13: I. & N. submits their plans for alterations at 70 Col. Ave. August -: Advised C. O. that work could not be completed prior to May and that with limitation by I. & N. that approximately $400,000 would be available if the move is accomplished prior to December 1, reduced by $3,000 per day for each day thereafter.

August 18-25: Estimate submitted to I. & N. for $448,742. I. & N. advised this too high. Changes were made in plans resulting in estimate of $422,432. This, too, was too high for I. & N. and they requested changes to reduce estimate to $125,000. This proved to be impossible and the lowest estimate reached was $133,673. It was pointed out to I. & N. that they would not be satisfied with the work reflected by this estimate and that GSA was not desirous of undertaking the work within this limitation. When this information was forwarded to the Washington office of I. & N., a meeting was set up with Washington office of GSA and I was requested to be present with estimates and all pertinent information on August 26.

August 26: Meeting at Washington, D. C., with Mr. Loughran and Mr. Ford of I. & N., and Mr. Strobel, Mr. Nagle, and myself of GSA. Decided to undertake the necessary alterations to promote detention quarters at 70 Col. Ave. The entire 10, 11, 12th floors would be required to provide required space for their quarters. The roof would also be required for a recreational area. It was agreed that I. & N. would reimburse GSA for alteration expenses up to about $360,000, the exact amount to be determined after more details had been worked

out at regional level. I. & N. declined to agree to reimburse GSA for rent for the 6th floor which was given up by AEC and reassigned to I. & N., but agreed to discuss the matter with higher officials of I. & N.

Mr. Strobel instructed me to return to New York City that night prepared to negotiate a contract with an architect and a construction firm. He directed L. L. Hunter, D. and C., to give me samples of approved negotiated contracts to use as guides and to assist me in any way necessary. He indicated he would call Serge Petroff in and James King & Son, a construction firm, to meet me in New York City August 27. He also advised that the architect was to be instructed to start work immediately so that the weekend could be available to make one-eighth-inch-scale layout drawings for estimating purposes.

I. & N. representatives reiterated that the alteration work must be completed in time to permit evacuation of Ellis Island before December 1.

August 27: Discussed alterations with Serge Petroff, architect, and Joe Berger, representing James King & Son, construction contractors. Mr. Petroff agreed to start work immediately and provide preliminary plans to James King & Son for construction estimates.

September 1: The PBS estimate was reviewed and changed to meet requirements of I. & N. as expressed at the August 26 meeting in Washington, which resulted in a final estimate of $322,103. This estimate and a description of the work to be performed was agreed to and signed by Lawton for GSA, and Walls, of I. & N., while the agreement letter and the job order in the amount of $322,103 was signed by Sol Marks, acting district director, I. & N.

The commission of I. & N. in a letter to the Administrator of GSA authorized the necessary alteration at 70 Col. Avenue to provide detention quarters and agreed to reimburse GSA for the cost, including necessary alterations on the lower floors. However, he declined to reimburse GSA for the increased floor space or for the additional utility changes.

September 7: Preliminary architectural plans of 10, 11, and 12 floors and the roof, door schedule, miscellaneous details and specifications, were received from the architect and made available to James King & Son for use in preparing estimates.

September 10: I. & N. furnished list of plumbing fixtures they proposed to furnish from Ellis Island. The required information on kitchen equipment was not made available.

The preliminary architectural drawings were reviewed with I. & N. and the necessary changes agreed upon.

September 13: Park Agency, Inc., acting for the owners of the building, advised that they were opposed to using the building for detention quarters, as they regarded it as unauthorized use of the premises.

Reviewed contractor's estimate. The general construction estimate was in line with GSA preliminary estimate, but the mechanical estimate was much higher. To bring the cost within the agreed figure, it was necessary to curtail much of the mechanical work. This brought the final estimate to $314,458.

September 14: Telephone instructions were received from Mr. Strobel to hold up any further construction work, but to continue the design work.

September 16: Received final architectural plans for 10, 11, and 12 floors and

roof.

September 21: Determined the amount of the lump sum to be paid the architect for architectural and engineering services.

September 24: Telephone instructions were received from Mr. Strauser, speaking for Mr. Strobel, stopping all work on the project.

The architect and construction contractor were so advised by telephone. September 27: An approved draft contract for architectural services was received from Mr. Strobel. Telephone instructions were to cancel the contract immediately after execution.

The CHAIRMAN. I want to ask Mr. Strobel a question.

Did you feel that you should have disqualified yourself in this transaction?

Mr. STROBEL. I beg your pardon?

The CHAIRMAN. Did you feel that you should have or should not have disqualified yourself in connection with Serge Petroff?

Mr. STROBEL. I had only one thing in mind, and that was for the Government to get this particular project on the road as fast as possible, and knowing that the project was not necessarily an attractive

proposition for any architect, I don't think it entered my thought that there might be any conflict whatsoever. It was a matter of getting a job done, and that is how I made my reputation, that I can get work done.

The CHAIRMAN. You felt there was no conflict, despite the fact that you had had relations with Serge Petroff and your firm had been working with him as indicated by the testimony?

Mr. STROBEL. I felt there was no conflict, and I will restate that there was only one thing in my mind, having gone through the whole process of getting this project in line, getting it done in time. It became so urgent that, as it is mentioned, it was even a matter of getting somebody that would be willing to work that very same weekend.

The CHAIRMAN. Go ahead, Mr. Maletz.

Mr. Scort. Could I ask a question here?

The CHAIRMAN. Mr. Scott.

Mr. SCOTT. Mr. Strobel, did you receive any profits whatsoever from the Petroff transaction?

Mr. STROBEL. No.

Mr. SCOTT. Did your firm, Strobel & Salzman, receive any profits whatsoever from that?

Mr. STROBEL. They had absolutely nothing to do with it.

Mr. SCOTT. And referring to section 281 of the law, as a Federal employee, let me ask you the question directly: Did you directly or indirectly receive any compensation for services rendered in any matter in which the Government had an interest?

Mr. STROBEL. In connection with this project?

Mr. Scort. In connection with the Petroff project.

Mr. STROBEL. None whatsoever.

Mr. SCOTT. That is all I had.

Mr. MALETZ. Now, Mr. Lawton, how many projects have been assigned to private architects in New York City since July 1, 1954? Mr. LAWTON. Two.

Mr. MALETZ. And was the Columbus Avenue project, in which Mr. Petroff engaged, the first?

Mr. LAWTON. That is right.

Mr. MALETZ. Did Mr. Strobel inform you at any time that Petroff was a client of Strobel & Salzman?

Mr. LAWTON. No.

Mr. MALETZ. Would you say in effect that Mr. Strobel recommended Serge Petroff to you as a capable architect?

Mr. LAWTON. He recommended Petroff to me as a capable architect. Mr. MALETZ. Did he recommend anybody else for your consideration?

Mr. LAWTON. No.

Mr. MALETZ. In other words, I take it this occurred on August 26, this meeting?

Mr. LAWTON. That is right.

Mr. MALETZ. And Mr. Strobel then indicated to you or recommended Serge Petroff to you?

Mr. LAWTON. That is correct.

Mr. MALETZ. And did Mr. Strobel indicate to you that he would call Mr. Petroff and ask Mr. Petroff to be in your office the next morning?