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contracting people without my presence to see what interest you may have, what kind of a contract they may have.

At that time, the Senator retired to another room in my offices, the library, and he had with him Mr. Rhodes, and I believe Mr. Goodman and Mr. Wilson and maybe others, and they discussed it I believe most of the day. Then the discussion went on from there time and again. Sometimes there would be a week elapse, but we finally culminated with a letter contract on the 26th day of February.

Mr. DINGELL. At this point the Chair asks if Mr. Rhodes is the same Mr. Rhodes referred to by Ms. Dalgleish?

Mr. BREWER. Yes, sir.

Mr. DINGELL. In other words, he was the fellow who handed her the papers that later-determination and findings.

Mr. BREWER. No. Mr. Allen.

Mr. DINGELL. I mean Mr. Rhodes was the man on—who handed Ms. Dalgleish

Mr. BREWER. Mr. Allen did.
Mr. DINGELL. Mr. Rhodes.
Mr. BREWER. Mr. Allen.
Mr. DINGELL. Mr. Allen. I see.
Mr. BREWER. Mr. Rhodes is here. He heads up our task force.
Mr. DINGELL. Mr. Rhodes, sit down there and we will get to you.
You say it was Mr. Allen.

Mr. BREWER. I believe she testified to that. I don't know personally.

Mr. DINGELL. Very good. You may proceed, sir.
Mr. BREWER. I think that, unless you—that about brings it

Mr. DINGELL. Commissioner, this is an unfortunate question, but it has been one in the public press and one that troubles the Chair.

The New York Times carried a story on March 9 that Mr. Allott had arranged an appointive position for you in the Post Office.

Mr. BREWER. That is totally untrue. I would like to go back and relate the entire sequence under oath.

I started as a rural mail carrier in Kentucky in 1933. I might point out I was appointed by then Postmaster General Farley as a rural mail carrier and I carried the mail for 10 years and then became a postal inspector. The New York Times article commented on the fact that as a postal inspector I had to list my political affiliation. Being a lawyer such as you are, sir, and other gentlemen, I am sure you are aware of the fact that there was, and may still be, in the old Post Office Department before the reorganization, an Executive order probably issued by President Wilson that all postal inspectors must be equally distributed between two major political parties.

As a result of that, all applicants for postal inspector positions had to list on their application their political affiliation so that the administration could equally divide the inspectors and provide that the investigative branch was totally nonpartisan and I was involved in the apprehension of many people, some of whom had violated the Hatch Act.

I am a Kentuckian, born and raised in Kentucky, and as a postal inspector, I traveled all over the country, and Alaska, on criminal investigations, in addition to other duties.

In 1953, the Post Office Department decided to decentralize. Up until that time, practically all the official communications came to and practically all the decisions had to be made in Washington, and Jesse M. Donaldson, who later became Postmaster General, who was First Assistant at that time, who was Chief Inspector when I was a postal inspector, told me they were receiving 10,000 letters a day in the Bureau of Operations and if you remember, the Hoover Commission had recommended decentralization of the Post Office Department; and back as far as 1908 the Penrose Overstreet Commission of the Congress recommended the Post Office Department be decentralized into regions.

I was called in, together with nine other inspectors from the field, to help the consulting firm and the Post Office Department regionalize the system.

We created a first region, in November 1954, in Cincinnati, Ohio. We operated that region by postal inspectors until we got the bugs out of it in 5 months.

I was serving as district manager in Lexington and other inspectors were serving at various points around in those three States, Ohio, Kentucky, and Indiana.

Following that 5 months, the post office management satisfied we had the bugs out sufficiently to put in the next region which was Chicago. I then was put in charge of the program and later on helped create regional offices throughout the country and acted as regional director of the new offices of the Post Office Department at Boston, Atlanta, San Francisco, and in Denver which was the 14th of the regions to be created.

I had no friends in Denver. I was not acquainted with Denver. I knew no politicians in Denver. The Postmaster General called me in and said go out and take care of the Denver region and I will take care of any problems for you.

I went out and took charge of the Denver region. I knew no one. Senator Gordon Allott, I believe at that time, was a recently elected junior Senator. The senior Senator was Senator Millikin. If there was any congressional approval, it had to be between somebody in the Post Office and Senator Millikin, not me. I was a career Post Office official. I had never involved myself actively in partisan politics.

In 1961 when the administration changed, I found myself out of a job. I went to California in the banking business, came back to Denver in 1963, at the end of 1963, and took over as president of a company and operated that company until 1968.

I had no contact with Senator Allott per se. Senator Allott has never appointed me to any position any time anywhere. He did recommend me or sit by me when I was confirmed for this Commission, he and Senator Peter Dominick, as a courtesy, which I think most Senators do.

When I was confirmed for this Commission, they sat and recommended me to this Commission. Senator Allott to my knowledge never appointed me to anything.

Mr. DINGELL. I never said "appointed,” I am speaking of patronage.

Mr. BREWER. I have no knowledge of that. If there is such, certainly, if I had any patronage, it didn't work in 1961 after 29 years of Government service.

Mr. DINGELL. That is comforting for me to hear.
Mr. Powers.
Mr. Powers. In 1968, what did you do after you left the company?

Mr. BREWER. I went to New York and became Assistant Director of the Nixon for President Financial Committee.

Mr. POWERS. Did you hold any Government positions prior to your appointment to the ICC?

Mr. BREWER. Yes. For a brief period of time I was Deputy Administrator of SBA.

Mr. POWERS. When was this?

Mr. BREWER. I believe that, I was appointed to this Commission in July and I believe I went over on an acting basis in SBA in August the previous year.

Mr. POWERS. Of what year?
Mr. BREWER. It would be 1969.

Mr. PowERS. So you went to SBA as Deputy Administrator in August 1969? At that time, Mr. Allott was senior Senator from Colorado?

Mr. BREWER. Yes. But this is not a Presidential appointment. This was an appointment that was made by the Administrator of SBA.

Mr. DINGELL. It was a schedule C or schedule A, was it not?

So, essentially, it does require an affirmative push or clearance of a senior senator; is that correct?

Mr. BREWER. No; not in this instance, because I was sent there to do a special job and I was chosen to go over there to help work out a very difficult situation and I was called into the White House and they said go straighten out this, and I think you know what I am talking about. I hope you do. I can tell you in privacy sometime.

We had a problem that was quite difficult.

Mr. DINGELL. The committee is familiar with problems existing in that Agency for some years.

Mr. Powers.
Mr. POWERS. When did you leave SBA?

Mr. BREWER. I left SBA in June 1970, if my memory serves me correctly.

Mr. POWERS. Senator Allott did not recommend you for the position of Deputy Administrator of SBA; is that right?

Mr. BREWER. No, sir; absolutely.

Mr. POWERS. You had no contact with him prior to your appointment to SBA specifically regarding that?

Mr. BREWER. None whatever.

Mr. POWERS. Who was the Administrator down there then, Mr. Sandoval?

Mr. BREWER. Yes, sir.

Mr. POWERS. Mr. Brewer, how did you come to be the one who was assigned to find someone to carry out the position of special counsel?

Mr. BREWER. I believe you will have to ask our chairman that.

Mr. STAFFORD. It wasn't a question of him being assigned to find someone, to find the counsel. I asked him to serve as the administrative officer in charge of the 270, and this is not an unknown practice and he was in my opinion next on the list and there were no special

considerations given about who might end up being in some job or not in some job. That absolutely had nothing to do with it.

Mr. POWERS. When did this occur?
Mr. STAFFORD. Do you have the date?

Mr. BREWER. Yes. I have the communication here. I believe you have this group of copies of letters which we sent to you and the first letter was dated—I might say while we are looking at this, Commissioner Walrath who had been handling this was retired. That is one of the reasons it had to be reassigned.

On March 27, 1972, I wrote a letter to Chairman Stafford in which I said:

Supplementing my earlier report, I am happy to state that we have excellent indications that our request for funding for these proceedings will be granted probably with the understanding that some of the money be used in the area of cost funding.

Shall I read the entire letter?
Mr. POWERS. I am not familiar with it at all.
Mr. BREWER. It has been sent to you. The entire docket.
Mr. Powers. Do you have an extra copy of that?

Mr. BREWER. Yes, sir. In that we outlined the moneyfor funding; we outlined the entire study. We attached an appendix to it.

May I have an opportunity to read the appendix, which describes what we are trying to do?

Mr. POWERS. May I see what you are trying to read? I am just not familiar with it.

Mr. BREWER. I am sorry. I am sure we did supply it in the first original request that you made. I started at the bottom, sir, and worked in chronological sequence.

Gentlemen, the Chair notes this is probably as good a point to recess as we can get.

Is 2 o'clock acceptable to you?
Mr. STAFFORD. Fine.
Mr. DINGELL. Could we gather back again at 2?
Mr. BREWER. Yes.
Mr. DINGELL. Gentlemen, we thank you for your patience.

If there is no further business at this time, the committee will stand in recess until 2 o'clock.

[Whereupon, at 12:30 p.m., the subcommittee adjourned, to reconvene at 2 p.m. this same day.]

AFTERNOON SESSION

Mr. DINGELL. The subcommittee will come to order.

This is a continuation of the hearings begun earlier today on the subject of ICC and its authority for contracts and its authority to scrutinize and investigate rate matters and other things of concern to the Small Business Committee and to this particular subcommittee.

The Chair is pleased to welcome our witnesses back. The Chair observes that you gentlemen have all been sworn, and you will continue under the understanding that you will consider yourselves still under oath.

In fairness to the other members of the Commission, I think there is one question that needs to be asked, and gentlemen, I'd just as soon not bother swearing you individually on this one, I would just as soon do it in a group, so if you'll all come forward, we'll do that and we'll dispose of the other members of the Commission who have been gracious enough to be with us.

Ms. Brown, we're always glad to see you back before the committee.

You always improve the atmosphere, and if you would come forward a little bit and would everybody raise your hands.

Do you solemnly swear the testimony you'll give is the truth, the whole truth and nothing but the truth?

[A chorus of affirmations.]

Mr. DINGELL. If you would each please identify yourself to the reporter for purposes of the record, and the Chair has just one question.

Ms. Brown. I am Virginia Mae Brown, member of the Interstate Commerce Commission.

Mr. Wiggin. Chester A. Wiggin.
Mr. MacFARLAND. Alfred MacFarland.

Mr. DINGELL. Ladies and gentlemen, did you have any knowledge or participate in the formulation of the contract that is the subject of today's proceeding beyond the simple votes that you made with regard to whether or not the Commission would go in this matter?

Ms. BROWN. No.

Mr. DINGELL. Well, Mr. Powers reminds me, was there a vote on this contract in the Commission?

Was there ever a vote on the contract?
Ms. BROWN. I think the record shows what the voting was on.

Mr. DinGELL. Well, the committee thanks you and we appreciate your presence.

I assume your answer is the same or would be.
Mr. WIGGIN. To that question my answer would be the same, yes.
Mr. MacFARLAND. Yes, sir.
Mr. DINGELL. All right.
We thank you and you can consider yourselves excused.
We thank you very much.
Mr. Powers?

Mr. POWERS. Mr. Brewer, I guess when we left off this noon, you had handed up here some memorandums that occurred in March 1972, regarding your appointment to handle the matter of procuring Special Counsel and inviting other members to submit suggestions of names, possible selectees to be so contracted with, or at least to ascertain whether or not they were interested in negotiating on this contract. This is all restricted to March of 1972, according to these documents.

Have any other memorandums to the Commission been sent out to your fellow Commissioners under your name since that time, concerning the letting of this contract?

Mr. BREWER. Yes, there have been.

There is a memorandum dated May 11, 1972, addressed to the Commission, which I have before me here. I'd be glad to read it to you if you would like for me to, or I can hand it to you for the record.

Mr. POWERS. Can we submit that for the record?

Mr. DINGELL. Without objection, the documents will be inserted in the record at this point.

[The documents referred to follow:]

95-151473-8

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