Comptroller General Elmer B. Staats told the Senate's subcommittee on separation of powers yesterday that such a decision might be indicated in House and Senate action on appropriations bills, most of which have yet to be cleared. The alternative, he said, would be that the validity of the so called "Philadelphia Plan" might be presented to the courts or come up through a protest to the Government Accounting Office by a firm denied federal business.

An aide to Staats told the subcommittee's chairman, Sen. Sam J. Ervin Jr., D-N.C., however, that legal action could produce "a stalemate." Although questions involving payments under such construction contracts would come to the GAO, which considers the Philadelphia Plan illegal, court action would be handled by the Justice Department which has ruled the plan is proper.

MUST MEET GOALS

The Philadelphia Plan requires federal contractors so far only in Philadelphia-to agree to meet goals for minority employment when they submit bids on projects involving federal funds.

Although Ervin and other critics of the plan contend it sets unlawful racial quotas, the Labor Department maintains it only requires "a good faith effort" to meet minority hiring "goals." In an exchange with Staats, Sen. John L. McClellan, D-Ark., charged that "goal" is just a subterfuge to achieve a "quota." "It's a way of achieving the same objective," Staats said. McClellan insisted his word was more accurate, however.

In other testimony as the subcommittee concluded two days of hearings of the controversial plan a spokesman for the AFL-CIO put organized labor on record against the Labor Department's minority hiring plan.

C. J. Haggerty, president of the AFL-CIO Building and Construction Trades Department, told Ervin the AFL-CIO is "unalterably opposed" to a quota system for promoting minority hiring.

"The essential vice of the quota system is that it makes the arithmetic of numbers superior to considerations of qualifications for employment," he said.

DENIED BY OFFICIALS

In earlier testimony, both Labor Secretary George P. Shultz and Jerris Leonard, chief of the Justice Department's Civil Rights Division, denied that racial quotas were involved.

Staats' call for determination by Congress of the validity of the Philadelphia Plan led Ervin to assert that Congress already has prohibited such procedures. "I don't see how Congress could make a clearer statement than it did in the 1964 Civil Rights Act," Ervin said. The act bans preferential treatment to correct racial imbalances.

Staats said he considered it clear that the executive branch is asserting power to use federal funds in a way "not authorized" by Congress.

Under questioning by Ervin, Shultz agreed the plan involves attention to racial factors, but he said this is necessary to promote minority hiring.

The department plans to extend the plan to other cities. It now reaches only six construction trades involved in federal construction projects in the Philadelphia area.

[From Business Week, Nov. 15, 1969]

LABOR-SHULTZ JOB PLAN FOR BLACKS HITS SNAGS

With a warning that "the time for action has come," the Nixon Administration is taking tough steps to create more construction jobs for blacks in Chicago, Seattle, and elsewhere. The objective is to wipe out "patterns or practices of discrimination" where they exist and to bring about "realistic minority employment opportunities."

The goals are not new ones for the Administration. Even before he took office as Secretary of Labor, George P. Shultz set "problems of race and employment" at the top of his list of priorities for policymakers and researchers. He has never shuffled that objective much lower in his pile of problems.

"Philadelphia Plan."-But setting an objective and taking effective corrective moves to reach it are different matters altogether. Last June 27, Shultz undertook to impose minority-hiring goals on federal construction contractors on

projects in the Philadelphia area. A "Philadelphia Plan" was announced as "the first of similar plans to be set up in other major cities." Philadelphia was chosen for a test run because, the Labor Dept. said, a number of building trades unions there "have been operating without significant minority participation." The initial order specifically listed seven craft unions involved in ironwork, plumbing and pipefitting, sheet metal work, steam fitting, electrical work, roofing and waterproofing, and elevator construction.

The order provided that a contractor who submits a bid for federal construction work "must include in the bid an acceptable affirmative-action program" against race bias, with "acceptable goals for the use of minority manpower." According to the Labor Dept., this does not require hiring quotas or preferential hiring; instead, the object is “a responsible, hometown solution to minority job problems.” Unions balk.-Construction unions have not interpreted the plan in that way— and the result has been intense labor opposition. To the unions, the plan is "highhanded and ambiguous" and a violation of the Civil Rights Act of 1964, which bars employment quota systems. They say the plan "can only increase the cost to contractors, to the detriment of all affected trades," because it cannot-no matter how worthwhile its goal-"produce instant mechanics, regardless of color."

More is involved for the unions, however: They fear an undermining of apprenticeships, seniority, and other jealously regarded programs.

To civil rights groups, the Philadelphia Plan is a questionable device that depends on "voluntary compliance" and lacks "firm assurances that sufficient numbers of blacks will get jobs." The Labor Dept. found it had a plan that it could not sell easily to either side.

Alternatives.-Nevertheless, the department has stuck to its fight despite controversy and setbacks. It has formalized the Philadelphia Plan and may extend it soon to Detroit and Boston on a modified basis. And it is hoping that someone in Philadelphia may take the original plan into court as a first step toward resolving questions about its legality.

The need for this was emphasized repeatedly in two days of public hearings last month by the Senate subcommitee on separation of powers, chaired by Senator Sam J. Ervin, Jr., (D-N.C.). Like similar hearings on the National Labor Relations Board a year ago, the Philadelphia Plan hearings appeared to be primarily a forum for Ervin and Senator John L. McClellan (D-Ark.), both sharply opposed to the plan.

Ervin called the hearings on the ground that the Philadelphia Plan set racial hiring quotas, violating the 1964 Civil Rights Act. "We cannot allow our legal principles to be frittered away by manipulation of the law," Ervin said in opening the hearings. "Our purpose will not be to debate the wisdom of the Philadelphia Plan, although its wisdom has been challenged in the Congress and in the streets of Chicago, Pittsburgh, and Seattle." Ervin then proceeded to spend the next two days doing just what he said he was not going to do.

Defense.-Shultz and Jerris Leonard, Assistant Attorney General for Civil Rights, both defended the plan, insisting that it did not involve quotas, but set "specific goals" or "ranges" for minority hiring.

The General Accounting Office has ruled the plan illegal and has said it will refuse to authorize payment on any contract involving it. GAO's chief, Comptroller General Elmer B. Staats, told the Ervin hearings that the controversy resulting from the GAO ruling might scare off prospective bidders on other such contracts. "We hope that, as a result of these hearings, there will issue from Congress a clear and unequivocal indication of its will in this matter by which all parties concerned may be guided in their future actions," Staats said.

Staats this week sent letters to federal agencies reaffirming the GAO position; he warned that his office might stop payment on any contract based on the plan. Shultz and Leonard both emphasized that no contractor would lose his money if he showed a "good faith" effort to meet the minority hiring goals but failed. Only those who blatantly refused to try would be blacklisted, they said.

Other tactics.-Meanwhile, the Labor Dept. is shifting to other tactics until the Philadelphia Plan can be shored up effectively. It has put aside a search for "hometown solutions" in Chicago and Seattle, and has taken steps that could force contractors to hire more blacks-or risk losses of many millions in federal construction contracts.

In Chicago, the department's Office of Federal Contract Compliance (OFCC) ordered pre-award conferences with 17 contractors on hiring practices. It passed along the word that unless it could be convinced that there was no bias, contracts

might be barred—a step that has not been taken since the OFCC was created by executive order five years ago.

Assistant Labor Secretary Arthur Fletcher, who heads the civil rights enforcement for the department, said the Chicago action "results from informational hearings that the Labor Dept. held in Chicago in September, when the employment of minorities in performing federal construction work was investigated." Protests. The hearings last September touched off two days of demonstrations by white construction workers protesting the integration effort.

Fletcher said the Seattle lawsuits were also the result of a department investigation into the situation there. Named in the lawsuits were unions of ironworkers, electrical workers, plumbers and pipefitters, sheet metal workers, and operating engineers. The action was taken against the unions, Fletcher asserted, because they were the "roadblock" in the path of a solution worked out by local officials.

[From the Philadelphia Inquirer, Oct. 27, 1969]

PHILADELPHIA PLAN FACES 2-DAY HEARING BEFORE SENATE FOE
(By Jerome S. Cahill)

WASHINGTON, Oct. 26.-The Nixon administration's program to open predominantly white building trade unions to minority craftsmen will undergo two days of expectedly hostile examination this week by a Senate subcommittee.

Senator Sam Ervin (D., N.C.), chairman of the Subcommittee on the Separation of Powers, believes the job program as embodied in the so-called "Philadelphia Plan" is usurpation of congressional authority by the executive branch-and is illegal.

Ervin has summoned the administration's architects of the Philadelphia Plan, as well as spokesmen for the building industry and labor unions, to two days of hearings.

WITNESSES LISTED

Harry P. Taylor, executive director of the General Building Contractors Association of Philadelphia, is on Monday's witness list. Senator Hugh Scott (R., Pa.), Senate Republican leader, will submit a written statement Tuesday, defending the plan but is not expected to testify.

Appearing for the administration will be Jerris Leonard, head of the Civil Rights Division of the Justice Department, and Labor Secretary George P. Shultz. They will testify Tuesday.

Also scheduled that day are Louis Sherman, general counsel for the Building and Trades Division of the AFL-CIO, which opposes the plan, and Elmer B. Staats, Comptroller General and head of the General Accounting Office, who ruled last year that an earlier version of the Philadelphia Plan violated the Civil Rights Act of 1964.

Ervin contends the revised Philadelphia Plan is no less in conflict, even though it proposes minority hiring "goals" rather than the outlawed "quotas." Senator Paul Fannin (R., Ariz.) will testify Monday. He is the author of a bill to suspend the executive order on which the Philadelphia Plan is based.

FIRST SUCH CONTRACT

The Philadelphia Plan-so named because the order instructing its use in Federal construction, resulted from a job study made of the city's labor marketrequires contractors to hire or show "good faith” in hiring a percentage of minority workers in seven trades.

The percentages, effective Dec. 31, 1970 are: Sheetmetal workers, electricians and elevator construction workmen, 4 to 8 percent; steamfitters, plumbers and pipefitters, 5 to 8 percent, and ironworkers, 5 to 9 percent.

By 1973, the percentage range is to rise to 23 to 26 percent in all seven trades. The first contract specifically directing the plan's use was awarded last Tuesday for the steel frame construction of a new building at Children's Hospital, 1740 Bainbridge Street.

37-693-70-21

[From the Philadelphia Inquirer, Oct. 28, 1969]

BUILDER ASSAILS QUOTA SYSTEM IN PHILADELPHIA PLAN

(By Jerome S. Cahill)

WASHINGTON, Oct. 27.-A spokesman for the General Building Contractors Association of Philadelphia told a Senate subcommittee that the revised Philadelphia Plan on minority hiring represents an illegal racial quota system of employment.

Harry P. Taylor, executive director of the 104-member association, said the new plan's requirement that contractors fulfill minority "ranges" was merely a "camouflage" for racial quotas of the type outlawed in the Civil Rights Act of 1964.

DIFFERENCE CLOUDED

Testifying before the Senate subcommittee on Separation of Powers, headed by Sen. Sam Ervin (D., N.C.), Taylor said he was never able to get government officials to explain to him the difference between "ranges" and "quotas". He added that he saw no difference between the two, and Ervin agreed.

"Sometimes words are used to conceal, rather than reveal, meanings," the Senator said.

Taylor's testimony came as the subcommittee opened two days of hearings on the plan, which is designed to open predominantly white specialty trades in the Philadelphia area to minority craftsmen by requiring government contractors to take affirmative action to integrate their work forces.

The Nixon Administration introduced the plan this summer after an earlier plan drafted by the Johnson Administration was ruled by the General Accounting Office to be in violation of Title 7 of the 1964 Civil Rights Act.

PLAN DEFENDED

Sens. Jacob K. Javits (R., N.Y.) and Edward Brooke (R., Mass.) appeared before the subcommittee on Monday to defend the revised plan. The opposite view was expressed by Rep. Roman C. Pucinski (D., Ill.) and by Thurman Sensing, of Nashville, Tenn., executive vice president of the Southern States Industrial Council.

Asked by the subcommittee staff if there had been any "harassment" of Philadelphia contractors by the Labor Department in its implementation of the original plan, Taylor replied that on one occasion, the department accepted a job commitment for one project and a week or two later rejected the same language on another.

Philadelphia area contractors were fearful, Taylor went on, that they would not receive an impartial hearing on their "good faith" efforts to hire minority workers because "the judges will be the same people who administered so enthusiastically the original Philadelphia Plan.

"And I hardly consider them to be impartial."

SPIRIT QUESTIONED

When Ervin asked if some of the government compliance officers went about their work like "crusaders, with a mission to perform,” Taylor replied that, “In certain cases you could go further than that."

Taylor retraced for the subcommittee the association's efforts over the year to bring minority workers into their payrolls, but he said this effort has had limited success because of training shortcomings on the part of minority apprentice candidates.

He said minority workers should receive more training so as to qualify for union membership, and if the union entrance requirements are overly stringent, "they should be made realistic,” he said.

[From the Philadelphia Inquirer, Oct. 29, 1969]

U.S. THREATENS SUITS TO BACK PHILADELPHIA PLAN

(By Jerome S. Cahill)

WASHINGTON, Oct. 28.—A top Justice Department official hinted Tuesday that the government may have to institute legal action against Philadelphia craft unions deemed to have excluded blacks systematically from their membership rolls.

Jerris Leonard, head of the Civil Rights Division at the department, dropped the hint in the course of a lengthy defense of the Philadelphia Plan, the Administration's program for more minority hiring in the building industry.

Leonard insisted in the course of his testimony before the Senate Subcommittee on the Separation of Powers, headed by Sen. Sam Ervin (D., N.C.) that the Philadelphia Plan did not violate Title 7 of the Civil Rights Act of 1964 because it stopped short of imposing hiring quotas prohibited by the law.

PRECEDENT FOR ACTION

Leonard conceded the Justice Department had legal authority to act against unions discriminating against minorities and that it had done so in a Chicago suit. Asked by Ervin why the department had not acted against Philadelphia unions, Leonard replied that "it may well be" that the department "may have to bring" suits against the unions.

However, the Justice Department lawyer made it clear that the Administration preferred to rely on the Philadelphia Plan to bring unions and contractors into voluntary compliance with anti-discrimination laws.

The Philadelphia Plan applies to six construction unions in the Philadelphia area which the Labor Department found to have less than a 2-percent minority membership. The six are the Ironworkers, Sheet Metal Workers, Electricians, Plumbers and Pipefitters, Steamfitters and Elevator Construction Workers.

"GOOD FAITH" REQUIRED

As implemented by the Labor Department last month, the plan requires contractors to demonstrate a "good faith effort" to meet minority-hiring goals within specified ranges over a four-year period.

Comptroller General Elmer B. Staats told the subcommittee that the distinction between illegal quotas and goals was "largely one of semantics." Staats, who heads the General Accounting Office, said there was "no question" that the plan was illegal. If it remains in effect, he said, GAO is prepared to disallow payments to contractors operating under its terms.

ALTERNATE APPEAL

Staats appealed, in the alternative, for Congress to speak clearly against the plan. He said this could be done by attaching a rider to any of the appropriations bills now pending in Congress.

[From the Washington Post, Tuesday, Oct. 28, 1969]

ERVIN ASSAILS PLAN ON MINORITY HIRING
(By William Chapman)

The Labor Department's controversial Philadelphia Plan to increase the hiring of minorities on federal contract jobs was denounced yesterday as a case of discrimination in reverse.

Sen. Sam J. Ervin (D-N.C.) opened two days of subcommittee hearings on the plan by insisting it forces contractors to "discriminate against workers who are not members of any minority group."

Ervin's view was disputed by nine liberal senators, led by Sen. Jacob J. Javits (R-N.Y.), who contended the plan is both legal and fair.