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United States Information Service (Missions).
United States Navy.
United States Operations Mission (ICA).
United States Public Health Service.
United States Representative for Military Assistance

in Europe.
United States Mission to the North Atlantic Treaty

Organization and European Regional Organizations. Western Area Command.



(A Review of GAO Activities in Connection With Certain

Federal Expenditure, Procurement, and Inventory Practices in Europe)




Paris, France. The subcommittee met at 10 a. m., American Embassy, Paris, France, Dante B. Fascell (acting chairman) presiding.

Present: Representatives Harden, Michel, and May. Also present: Christine Ray Davis, staff director; Orville S. Poland, general counsel; Orville J. Montgomery, associate counsel; John W. McGarry, assistant counsel; John R. Buckley, staff member; and John P. Carlson, minority counsel.

Mr. FASCELL. The meeting will come to order.

This is the Subcommittee on Executive and Legislative Reorganization, of the House Committee on Government Operations.

Our primary purpose is to discuss, inquire, and determine the operations of the European branch of the General Accounting Office and such activities that they may have participated in since the establishment of that branch.

The subcommittee recognizes that this is a very broad area covering many years of difficult work. We also recognize the fact, from preliminary staff work, that there are areas of this work which certainly need the attention of Congress. It is for that purpose that the subcommittee is here today in Paris and intends to make visits to branch offices, where necessary or desirable.

I might say at the outset that we appreciate very much the great courtesy that has been shown to all members of the subcommittee and the staff, particularly during the time that the staff was here before the subcommittee arrived. We appreciate the hospitality that has been extended to us. Our stay has certainly been a very pleasant one. In fact, it has gone so far that even the weather has turned out very nicely and we appreciate that, too.

Mrs. Harden is the senior member on the minority side.
Do you have any remarks that you would like to make at this point ?
Mrs. HARDEN. Thank you, Mr. Chairman.

I think you made a very fine statement and I certainly concur in all that you said and wish to take this opportunity to express my appreciation to Mr. Blair and his staff and to all of the people here in Paris who have contributed in making our stay a pleasant one.

Thank you.

Mr. FASCELL. We will ask Mr. Blair to join us at this point.

Do you have a prepared statement, Mr. Blair, or would you like to proceed otherwise?



Mr. Blair. Mr. Chairman, I do not have a prepared statement but I would like to make a few introductory remarks.

As the personal representative of the Comptroller General, it is my pleasure to welcome you on his behalf to Europe and to offer such assistance as you may require in your survey and your work in Europe. I want to welcome you personally on behalf of the European Branch and our staff members.

Mr. Chairman, I would like you to know that it has been most gratifying to work with your staff members. They have had a very difficult task and I think Mr. Poland established a record over here of 3 days and nights without sleep when he developed data for the subcommittee. Mr. Montgomery has been of particular help. As you know, he was the former Chief Counsel for the Branch. It has certainly been a pleasure to work with Mrs. Davis, Mr. Carlson, and Mr. McGarry.

It may now prove helpful to briefly describe to you the operation of the Branch. As you may know, it was established 5 years ago as a result of a survey made by the Office of European Operations of the executive agencies together with the interest of the Congress in establishing an office of the General Accounting Office in Europe for the purpose of surveying public expenditures.

Members of the Government Operations Committee and the House Appropriations Committee were particularly anxious to get the General Accounting Office established in Europe.

For that reason, also, it is a particular pleasure to work with your subcommittee.

You may want to develop information on our operations through specific questions, but I would like to introduce the principal staff members first.

Mr. Rosenberger, our Assistant Director, is responsible for the coordination of our audit, accounting, and investigative work.

Mr. Conrardy, supervising auditor, is our program supervisor for foreign aid programs, both military and economic. More recently he has been given responsibility for the supply program in the Army area.

Mr. Louis Hunter is our program supervisor for procurement activities across the board, for construction programs, and more recently has been given responsibility for supply programs in the Air Force area.

Mr. Coons is our Chief Counsel.

Mr. Socolar of our legal staff assisted in the preparation of the no-profit report that you are most interested in.

Mr. Donald Dawson is our chief investigator and then we have Mr. Wootton who has just recently arrived. He is our program supervisor for our systems development work as required by the Accounting and Auditing Act of 1950.

Mr. Taillon, our program supervisor for the Spanish base and other construction programs, is now in Madrid on temporary duty.

We welcome any questions, Mr. Chairman,

There is one other point that I might bring out as a procedural matter as discussed over the phone with you, which was also a problem for the preceding committee. That was the problem of classified information.

I would like to point out that our office does not originate any classified information but is the recipient or developer of classified facts from the executive agencies, military and civilian. We do, of course, have access to, and report on, classified information. By statute and by Executive order, as well as by the Comptroller General's order, we have to recognize the agencies' classification whether we agree with it or not. It is not within our purview to determine the proper classification imposed upon that information. The General Accounting Office does not have the authority to declassify data classified by the originating agency. That authority falls upon the head of the originating agency.

I might suggest for your consideration that when we do get into classified areas, it may facilitate the handling of your transcript if the reporter were to start another tape and put the classified material to one side. Mr. Montgomery can give you specifics on the problem we had previously in that respect.

Mr. FASCELL. Thank you, Mr. Blair.

First, let me ask some general questions regarding organization and operations before we get into detailed things.

How many field stations do you have?
Mr. BLAIR. Five field stations.
Mr. FASCELL. Where are they located?

Mr. Blair. We have a field station in Paris, one in London, one in Frankfurt, one in Madrid, and one in Rome.

Incidentally, our responsibility covers not only Europe but the Near East and North Africa. We cover the Near East and North Africa primarily with staff members from Paris. Again it depends on the workload and where the men are available.

Mr. FASCELL. How many countries is this branch responsible for?
Mr. ROSENBERGER. About 30.
Mr. FASCELL. What is the size of your personnel group?

Mr. BLAIR. We have an authorized staff of 64, but as of September 3 we had 52 on board. Our staff consists of auditors, investigators, systems accountants, and lawyers.

Mr. FASCELL. What is the area of responsibility, operationwise, for the branch ?

Mr. Blair. We are charged with the responsibility of carrying out all of the auditing, accounting, investigating, and legal responsibilities imposed by statute on the Comptroller General in the European countries, Near Eastern countries, and North Africa. We cover not only the military departments, but the civilian departments, also. You might say we cover the board. There is no exception to the responsibility imposed upon the European Branch or upon the office as a whole.

Mr. FASCELL. In other words, to get specific, the expenditures made by this Embassy-where we are meeting now—would be a field for

your staff?

Mr. BLAIR. That is right.

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