the Christmas holidays getting those contracts and helping get the Price Commission set up, then he came down and was made available to us and was extremely valuable because we had a short time in which to find out the best people or the best company that could perform these economic studies. We had to find them and do all of this and do this in a type or a mechanism which we had no great familiarity with. So then he explained how they negotiated the contracts, all the mechanics of it, and we informed the staff people and put out the RFP-Request for Proposals and got numerous responses to that, set up the best people in the Commission's bureaus who have an expertise in evaluating economic studies, and the methods that the various concerns, the firms would direct to accomplishing the goals which the Commission had announced in Ex Parte 270.

Mr. BREWER. May I ask here, how many people were on your evaluation committee?

Mr. DOLAN. We had a team of eight who initially evaluated all of the RFP's which came in. We had developed criteria for evaluating them and this team of econometricians, economists, math experts, cost-finding people, evaluated them, and sifted through the proposals and came up with the best ones, and we called those people, those firms, representatives of those firms, in and they made an oral presentation before the contract evaluation board. And, after that was over, we made a written memorandum evaluating the various proposals, the methods that they would proceed, the people they had on their teams, and then quite apart from this, the amount of money which they had bid on the contract. And then from that, RMC seemed to be the outstanding team, and this was sent up to the Commission for a vote with our supporting documentation.

Mr. DINGELL. All right, now, who wrote the official order for the investigation of freight rates and the subject areas that were to be studied in the RMC contracts?

That order was written by H. Ray Woltman, wasn't it? Wasn't it H. Ray Woltman that wrote that order for the investigation in freight rates and these subject areas that would be studied under this RMC contract?

Mr. DOLAN. H. Ray? No.

Mr. DINGELL. Didn't he write the order?

Mr. DOLAN. What order are you talking about?

Mr. DINGELL. The official orders for the investigation of freight rates and the subject areas that were to be studied under the RMC contract.

Mr. DOLAN. No.

Mr. DINGELL. Who did write that?

Mr. DOLAN. You're talking now before November 1971 when the Commission adopted the report in Ex Parte 270.

Mr. DINGELL. This is in the fall of 1971, right.

Mr. DOLAN. I was on the staff working on the various drafts which finally culminated in this document, the decision in November 1971. Mr. DINGELL. Did you work with Ray Woltman?

Mr. DOLAN. No, I did not.

Mr. DINGELL. Did you ever see him in connection with that?
Did he participate in it at all?

Mr. DOLAN. Not to my knowledge.

Mr. DINGELL. Not at all?

Mr. DOLAN. I had a couple of lunches with him because he's in the Bureau of Economics.

Mr. DINGELL. Did you have charge of this program, total charge? Mr. DOLAN. There were two reports submitted to the Commission, and there were memorandums from various offices and bureaus in the Commission because at that point we could not get a unanimity as to the next step, how to proceed with this investigation, and I took there ports and the submissions by the parties and put them together and formulated an initial draft report which was submitted to the Commission, and after various changes, it culminated in the decision which the Commission adopted November 5.

Mr. DINGELL. Well, maybe we'd better direct this question, then; to Mr. Cerra.

Mr. Cerra, you wrote a memorandum dated May 5, 1972, to Mr. Fritz Kahn, a copy of which was referred to the subcommittee by the GAO, and you said:

The possible conflict of interest problem involving a former Commission employee's (Harry Woltman's) participation in the invitation to bid on the studies to be developed for the above proceeding was discussed with Norman Jones, Woltman's replacement, and Bill Wilson, loaned from NASA, to write the contract. Then you go on to say:

18 U.S.C. 207(a) permanently prohibits a former employee from participating in any matter in which the United States has an interest and in which he participated personally and substantially for the government. Subsection (b) provides that such an employee may not, for 1 year after government employment has ended, represent any party in any matter in which the United States has an interest and which was within the boundaries of the employee's responsibility during his last year of his government service.

And then it goes on-well, we can-this whole document is in the record. I'm sure gentlemen, you are familiar with this, but in any event, then Mr. Cerra says as follows:

For the record, Mr. Woltman substantially participated in the initial stages of Ex parte 270 but resigned prior to any formulation of the specifics to be developed in the studies sought by the contract. Any possible protest that he has inside information will have to be met, when and if raised. This might delay our necessity to obligate the funds in this fiscal year resulting in a loss of the funds unless reappropriated. However, such a protest is doubtful and there is no way we could cut off this possibility from taking place. For this reason, I do not recommend that we seek an opinion of the Comptroller General or the Attorney General as to the legality of a contract with a former employee or a possible violation of the criminal conflict of interests statute.*

Mr. Cerra?

Mr. CERRA. Yes, sir. What is the question?

Mr. DINGELL. Well, what would you like to say?

Mr. CERRA. I don't know what to add other than what this memorandum says, Mr. Chairman.

Mr. POWERS. Well, did Mr. Woltman participate in the formation of the order or not?

Mr. CERRA. Well, I think the answer is he did not.

Mr. POWERS. Well, your language here says he did.

"For the record, Mr. Woltman substantially participated in the initial stages of Ex parte 270."

*See appendix B, p. 231.

Mr. CERRA. The initial stages of 270 were the determinations by the staff of what studies, perhaps, had to be made. There had been no formulations at this time. I do not have first hand knowledge of what he did do on Mr. Rhodes's staff, but this matter came to my attention when Mr. Norman Jones inquired whether Mr. Woltman would be in trouble with the conflict of interest statutes.

As my memo points out, those statutory prohibitions are personal to him and we told him he had better seek counsel to determine whether he might be in possible violation of title 18 of U.S.C. section 207. Mr. DINGELL. Well, it was sufficient, that you were sufficiently apprehensive when you wrote Mr. Kahn.

What did Mr. Kahn write back to you?

Mr. CERRA. Mr. Kahn didn't write anything back to me. This was a recordation of my conference with Mr. Bill Wilson and Mr Norman Jones of the Bureau of Economics. They had brought the. problem in and said was this a direct violation of title 18?

I pointed out what the law was, that it was personal to the employee, that the ICC does not enforce that, that it's the Department of Justice's prerogative, and that he had better check with the Department of Justice through his own counsel.

Mr. DINGELL. Well, in any event, where did Mr. Woltman come from before he came to ICC?

Mr. CERRA. I do not know, sir.

Mr. BREWER. Mr. Rhodes might be able to answer that.

Mr. RHODES. I can answer that, sir. He came from RMC.
Mr. DINGELL. Where did he come from?

Mr. RHODES. He came from RMC.

Mr. DINGELL. He came from RMC and went to ICC?

Mr. RHODES. Yes, sir.

Mr. DINGELL. What position did he have?

Mr. RHODES. He was chief of our research section.

Mr. DINGELL. He was chief of your research section and he came

from RMC.

What was his position at RMC, do you remember?

Mr. RHODES. I don't recall, He was an economist there.

Mr. DINGELL. By the way, did I swear you?

Mr. RHODES. You did not, sir.

Mr. DINGELL. Do you solemnly swear that the testimony you are about to give is the truth, the whole truth and nothing but the truth?

Mr. RHODES. I do.

Mr. DINGELL. All right, let's ask the question again.

Where did Mr. Woltman come from?

Mr. RHODES. Mr. Woltman came to us from RMC.

Mr. DINGELL. That was in 1970?

Mr. RHODES. Approximately. I couldn't tell you the exact date.

Mr. DINGELL. And what position did he hold at ICC?

Mr. RHODES. He was chief of our research section.

Mr. DINGELL. And that's in the Bureau of Economics.
Mr. RHODES. Yes, sir.

Mr. DINGELL. And how long did he stay at ICC?

Mr. RHODES. He left sometimes in the latter part of October of 1971.

Mr. DINGELL. Early 1971?

Mr. RHODES. No, the latter part of October 1971.

Mr. DINGELL. And where did he go?

Mr. RHODES. He went to RMC.

Mr. DINGELL. And when was the contract negotiated with RMC? Mr. RHODES. I believe it was in June of 1972.

Mr. DINGELL. And what is his position at RMC, do you know? Mr. RHODES. I don't know exactly what his title is. That could be determined. I don't have that at hand.

Mr. DINGELL. Counsel?

Mr. POWERS. In other words, as I understand it, you got an individual who was employed by RMC, leaves his job there, goes to work for the Interstate Commerce Commission, participates in a determination of what studies are to be contracted for on an independent basis, resigns from the ICC, and goes back to his former employer. They then submit a bid which it just turns out is the one that is acceptable, that he has worked on, and this matter is brought to the attention, apparently, of the General Counsel's Office, and there is not sufficient concern internally within ICC to seek either a GAO or an Attorney General opinion as to the legality of what has happened here.

Mr. RHODES. Well, sir, I don't think he was on our staff at the time the determination of what studies would be undertaken has been decided by the Commission.

Mr. DINGELL. Well, they were staff recommendations.

Mr. RHODES. He may have speculated, but I have no notion of what his speculations might have been, but the decision to go to the OMB for additional funds had not even been made when he left. Mr. DINGELL. No, but there were staff recommendations under consideration at the time that he left, were there not?

Mr. RHODES. I don't recall any staff recommendations for entering into outside contract work at that time. We had no money at that time, sir.

Mr. DINGELL. You weren't considering it at that time, Mr. Cerra? Mr. CERRA. The staff recommendations were in the form of draft reports that the Commission could adopt as to whether they should institute this investigation. I think that is what Mr. Dolan was referring to, and prior to November 5, 1971, when the Commission determined to initiate this type of investigation and follow it through, I don't know that there had been any determinations to contract with anybody at all.

Mr. DINGELL. Now, let me ask this question.

You scrutinized of the performance of RMC, and I have here before me something from the Office of Commissioner Brewer, dated June 20, 1972, and you say here as follows-this is paragraph 4: "One of the lesser factors that went into weighing proposals was performance of contracts for other Government agencies. An attempt was made to obtain an evaluation of RMC's and CRA's performance of contracts of similar scope and size." Then I quote here—I think this is of considerable interest-"RMC did not fare well in the comments received from some technical personnel of DOT about a contract for about $650,000 which is nearing completion."

Now, in fairness, Commissioner Brewer, about the decision, you went on to say, "However, DOT staff were unanimous in praising the competence of three of the top RMC staff members, including Lago and Nissen, who will be spending substantial amounts of time on ICC studies."

And you go on to put this in: "If RMC is selected we expect to minimize any problems by establishing a monitoring officer to keep in close touch with the contractor to make certain the studies are proceeding on the right track and within the cost constraints imposed." Then you went on to say as follows: "CRA received exceedingly good reports from other agencies which had used its services."

Now, I am troubled here. Here you had warning flags on RMC and no warning flags on CRA.

Mr. BREWER. I think I would have to say, at that point in time, with regard to choosing the contractor, we set up a procedure by which that would be done. Mr. Dolan, as I said previously, had been on Commissioner Walrath's staff in the early stages of this. He then came over to my office when I came on board as one of the members of my staff, but I acceded to Commissioner Walrath's wishes that he continue to use Mr. Dolan on a part-time basis on 270 because he had been familiar with it throughout.

Then, by action of the Commission which was referred to in some correspondence from the chairman awhile ago, to me, it was indicated that Mr. Dolan was the head of the task force to head this up. Mr. Dolan is an attorney, a very good attorney. I don't know how this Woltman came about, but I learned about it after a fashion or after a time, but apparently the task force was not sufficiently worried about it.

I believe, if I recall, Mr. Rhodes, that you and I had a discussion at which you said that Mr. Woltman would not have an active role in this, in accordance with this correspondence between Mr. Cerra and

Mr. RHODES. Yes, sir. In fact, we had no way of knowing what his participation was in the development of their proposal, nor did he appear as a project leader or in any way represent the firm in amy discussions that I had with them.

Mr. DINGELL. Yes, but he's vice president of RMC, is he rot? Mr. RHODES. Well, sir, I don't know what his corporate relationships are. I only know it in respect to our dealings with him in negotiation and subsequent to the contract. He does participate in the work. He is very skilled.

Mr. DINGELL. Well, let's assume he is vice president. We'll find out whether he is or he isn't. If he is vice president you have got to assume he's probably got something to say about the management of the firm.

Am I right?

Mr. RHODES. Well, sir, I cannot answer to that.

Mr. DINGELL. It's also fair to say that he's going to have something to say about the proposals that are submitted by the firm. Mr. RHODES. I would expect so.

Mr. DINGELL. We'd be pretty hard put to think that he wouldn't. Now, who was his successor?

Mr. RHODES. His successor was Dr. Norman Jones.