Mr. GOODMAN. It's a function of the ICC at minimum to make the decision after the record has been developed. It is the responsibility of special counsel to make that record. Mr. DINGELL. The statute says the-I don't see where the statute says the ICC has to have a special counsel, or where they have to charge you with any particular responsibility. Maybe they've delegated that responsibility. Mr. GOODMAN. There's something in the statute about the ICC doing its job. Mr. DINGELL. Well, now, wait just a minute. Now, I have been in this business a few years myself, and I am keenly aware of the fact that the ICC has imposed upon it the duty to serve the public interest, and to regulate the industry in the public interest; and that duty imposes on the ICC all duties that are necessary to accomplish that end. Now, I don't have any problem with the philosophical concept of their hiring special counsel; I don't have any problem. I don't have any problem with the fact that they should pay a just compensation. I think the problem is they're paying him paying him the same as a cabinet official, and I don't have any objections to him having a staff. But I do have objections to having them hiring a contractor who's going to tell them what to do, and I object greatly to Members of Congress being told that they are looking forward to a long study, that they don't know when it is going to terminate, and that they don't know how much they're going to pay or anything else. But I recognize you can't see these things. Mr. GOODMAN. Well, let's approach it from this standpoint. Let's assume the Commission had gone the route of doing this in-house. Let's assume they hired sufficient staff to accomplish the task. The Commission would not have sat down and told that Commission staff how to proceed. Mr. DINGELL. I agree. They should not have. But here they're signing a contract. Mr. GOODMAN. Well, why should it differ now? Mr. DINGELL. Because you're dealing with somebody who's not a Government employee. This is the taxpayer's money that you're spending. Mr. GOODMAN. But wasn't this part of the problem in selecting special counsel? Wasn't this part of the problem that has been solved with the current special counsel, that you have a man of integrity? Mr. DINGELL. Well, let us reason together here. I've listened to that all afternoon, but I'm keenly aware of the fact that I as a Member of Congress have got to look after one of our errant children here, the ICC, which everybody agrees has not been doing the job. And things are so bad with regard to ICC that many folks around here have introduced legislation to abolish it. Now, I think this is the only ICC that we've got now. Mr. GOODMAN. Now, Mr. Chairman, I would like to, at that point, really, submit for the record an article I wrote in the Michigan Law Review, where I respectfully disagree with your estimate of what the Commission has accomplished. I suggested in this review article that over the past decade, the Commission, particularly in the rates area, has accomplished much which has been overlooked. Mr. DINGELL. Well, this is something in which honest men differ; I'm sure you understand that. But my problem is that as the proceedings commence, I intend to scrutinize them as they go forward. And I suspect you're going to be before one or more of my subcommittees from time to time as things go forward. Mr. GOODMAN. I welcome your scrutiny. Mr. DINGELL. But I want you to understand that the concern I have, and I'll be true with you-and my old daddy told me, "Son, trust everybody, but cut the cards," and that's what I'm doing today, cutting the cards. Mr. Powers? Mr. POWERS. That's all. Mr. DINGELL. Well, Mr. Goodman, if you have some more additional submissions that you would like to make, we'd be more than pleased to have them and we thank you for your patience and for your testimony in the gracious way in which you spoke. Mr. GOODMAN. Thank you. This article may be of some interest, and I would like to submit it. Mr. DINGELL. We would be pleased to receive it, and if nobody else around here would like to read it, I think maybe I would.1 Mr. GOODMAN. Thank you very much. Mr. DINGELL. The committee will stand adjourned subject to the call of the Chair. [Whereupon, the above-entitled hearing was adjourned at 5:13 p.m. April 14, 1973.] 1 The article has been retained in the committee files. APPENDIX A.-MISCELLANEOUS INFORMATION EXHIBIT NO. 1 INTERSTATE COMMERCE COMMISSION, Hon. JOHN D. DINGELL, DEAR CHAIRMAN DINGELL: As I sought to assure you during the course of the hearings on April 4, 1973, the Commission was appreciative of the opportunity to explain its reasons for negotiating a sole source, cost reimbursement type of contract with Senator Allott to serve as Special Counsel in our far reaching investigations into the railroad freignt rate structure and related matters. We are in the process of collecting the additional information you requested during the hearings and will forward it to you shortly. - In the meantime we are proceeding toward the completion of the Definitive Contract with Senator Allott and will endeavor to include the several items mentioned during the hearings. When the Definitive Contract is executed, we will send you a copy and will be pleased to answer your further questions, if any. Sincerely yours, GEORGE M. STAFFORD, Chairman. INTERSTATE COMMERCE COMMISSION, Hon. JOHN D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies, House of Representatives, Washington, D.C. DEAR CHAIRMAN DINGELL: Set forth below are our responses to the eleven items of information requested during the hearings before your Subcommittee on April 4, 1973. 1. The persons requesting consideration for the position of Special Counsel are listed in Exhibit No. 1. As we requested at the hearings, this list of names should remain confidential in order to avoid jeopardizing current employment or other business relationships.1 2. Insofar as the Commission requested, but was denied, funds for Public Counsel, as long ago as 1961, the Commission, in anticipation of contemplated rail mergers, voted to establish an Economic Counsel in the Bureau of Economics. The Counsel's function was to appear, as directed by the Commission, in selected cases of major importance for the purposes of assuring that a complete record, covering all facets of the public interest, would be compiled. A request for supplemental appropriations for fiscal year 1962 to staff such an office was denied by the Bureau of the Budget. Budget requests to provide funds for this project were submitted by us and denied by the Bureau and the Congress for fiscal years 1963, 1964 and 1965. Since then, the Commission has discussed but never formally acted upon a variety of proposals for establishing an office of public or consumer counsel, but no separate office has been established in the interim. 3. A copy of Vice Chairman Brewer's memorandum of February 26, 1973, advising that in the absence of objection, an order making Special Counsel Allott a party to proceedings would be entered, is attached as Exhibit No. 2. 1 The list of six names is regarded as confidential by the committee, at the Commission's request. (175) 4. Separate letters from each Commissioner will be sent to you indicating whether they were made aware of the candidates for Special Counsel and were kept advised of the discussions with the candidates leading to the selection of Senator Allott. 5. A biography of Doctor Norman Jones, attached as Exhibit No. 3, indicates that he was never associated with RMC, Inc. 6. An updated chart of the salaries and expenses of the Commission showing Congressional authorizations and OMB holddowns is attached as Exhibit No. 4. 7. A copy of the contract with RMC, Inc. and the amendment changing the contractor's name to RMC Research Corporation are attached as Exhibit No. 5. 8. A review of the transcript of the House Appropriations hearings on March 29, 1973, indicates that no statements were made concerning RMC's punctuality in report. (See pp. 1849-1853) As Mr. Rhodes testified before your Subcommittee, however, we have had no difficulties with RMC's reporting. 9. The Letter Contract with Mr. Allott, dated February 26, 1973, contains standard termination clauses in Articles 18, 19 and Section N, subsection h. 10. This Commission has had no other situation similar to the present contract for Special Counsel. Consequently, it has had no other occasion to correspond with Civil Service Commission concerning the preservation of an annuitant's retirement salary where he becomes an independent contractor with the agency. On or about December 1, 1972, Deputy General Counsel Cerra and other staff personnel discussed the independent contractor-annuitant concept with Civil Service Commission General Counsel Mondello and his staff. There are occasions where this Agency communicates with Civil Service Commission upon rehiring an annuitant. We forward Form 50 concerning such appointment action to Civil Service Commission with a short statement asking Civil Service Commission to make the appropriate change in salary to permit payment of the difference between the annuity and the salary level of the job for which the annuitant is rehired. 11. A list of the parties in Ex Parte No. 270 and related cases urigng appointment of Special Counsel is attached as Exhibit No. 6. If I may be of further assistance in supplying any additional information you may require, please let me know. Sincerely yours, Enclosures. GEORGE M. STAFFORD, Chairman. EXHIBIT NO. 2 OFFICE OF VICE CHAIRMAN BREWER, EX PARTE No. 270-INVESTIGATION OF RAILROAD FREIGHT RATE STRUCTURE Although I believe that I may properly enter the attached order in view of my administrative responsibility in these proceedings, considering the extraordinary nature of the action, I am circulating the proposed order for your review. In the absence of objections, on or before noon tomorrow, February 27, I propose to enter the order as soon as it will be appropriate. BREWER. SERVICE DATE, FEBRUARY 27, 1973. ORDER INTERSTATE COMMERCE COMMISSION EX PARTE No. 270-INVESTIGATION OF RAILROAD FREIGHT RATE STRUCTURE EX PARTE NO. 270 (SUB-No. 2)-INVESTIGATION OF RAILROAD FREIGHT SERVICE EX PARTE No. 271--NET INVESTMENT-RAILROAD RATE BASE AND RATE OF RETURN IN THE MATTER OF PARTICIPATION OF SPECIAL COUNSEL Present: W. Donald Brewer, Vice Chairman, to whom the above-entitled matter has been assigned for action thereon. It appearing, That this Commission has pending before it the most comprehensive and significant investigations of its long history; that the investigation in Ex Parte No. 270 was instituted to assess the totality of the existing railroad freight rate structure; that the proceeding in Ex Parte No. 270 (Sub-No. 2) was initiated to develop guidelines and performance standards for railroad service; and that the investigation in Ex Parte No. 271 was instituted in recognition of repeated challenges to the validity of the current method for determining the rate base for measuring the railroad's rate of return, and for the determination of a fair rate of return on a rate base; It further appearing, That recognizing the potential impact of these proceedings upon the national welfare and economy, and of the general public interest in the development of a comprehensive record, the Commission concluded that the independent, impartial participation of a Special Counsel and his staff was essential to the proceedings; and that there was precedent for such extraordinary measures in the appointment of the Honorable Louis D. Brandeis, prior to his appointment to the Supreme Court, as Special Counsel in the Five Percent Case, 31 İ.C.C. 351; It further appearing, That our preliminary report in Ex Parte No. 270, 340 I.C.C. 868, concluded, as follows: "The major first hurdle confronting the Commission in dedicing upon 'special counsel' and supporting staff is the matter of adequate funding commensurate with the importance and complexity of the issues to be developed herein. An effort will be made forthwith through official channels to obtain the necessary funds as a supplemental appropriation earmarked for this particular proceeding." |