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APPENDIX C.-LETTERS FROM ICC

MEMBERS

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., April 17,1973. Hon. John D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies, House of Represent

atives, Washingion, D.C. DEAR CHAIRMAN DINGELL. During the course of the hearings on April 4, 1973, before the Subcommittee on Activities of Regulatory Agencies of the House Select Committee on Small Business, you expressed some concern as to whether each Commissioner was aware of the negotiations to secure public counsel and the arrangements with Senator Allott. This responds to your request for such information.

Before mentioning specific aspects of the overall area under consideration, I would like to stress that I was kept fully informed with regard to the Commission's decision to request funds for various economic studies and the hiring of a Special Counsel, the search for a Special Counsel and the contract with Senator Allott to perform that task.

The need for a thorough investigation of the railroad freight rate structure became apparent during the investigation into several general increase proposals by the railroads in Ex Parte Nos. 265 and 267, Increased Freight Rates, 1910 and 1971, 339 I.C.C. 125. It was quickly recognized, however, that such a broad investigation would require substantial funding. Since the Commission in the past had been unable to secure increases in its budgets to hire needed personnel such as service agents, it decided to request the Office of Management and Budget (OMB) to release certain funds for various economic studies to be conducted under contract, for the hiring of a Special Counsel also under a contract and to request supplemental appropriations where necessary.

The complexity and scope of the several proceedings under consideration (Ex Parte No. 270, et al) and the need for direct supervision over the contracting process, in my opinion, dictated the assignment of the administrative handling of these proceedings to a single Commissioner. Chairman Stafford assigned Vice Chairman Brewer to this task. This is a normal procedure within the Commission. For example, I, myself, have been assigned the administrative handling of important proceedings such as Ex Parte No. 241, Investigation of Adequacy of Freight Car Ownership. The latter investigation extended over a period of several years and required substantial personal attention on my part.

With the release of needed funds by OMB, the Commission sought the services of a suitable contractor to perform specified economic studies in connection with these proceedings. A number of firms responded to the contract offer. Resource Management Corporation (RMC) was selected from eight applicants. I was fully aware of all stages in the negotiations which led to the contract with RMC and I approved the proposed contracting with RMC. The economic studies are now

The search for, selection of and contracting with a Special Counsel required a more extended period. The Special Counsel would service a unique function in these proceedings by representing the public as contracted with parties such as the railroads, shippers, and other individuals or groups with specific interests. Vice Chairman Brewer requested the submission of names of likely candidates. A number of individuals were suggested by various members of the Commission, including, among others, Judge Henry Friendly, Senator Lausche, former General Counsel Robert Ginnane, several retired Federal Judges, and others in private practice. Those individuals were given careful consideration. But for various reasons which were brought to the attention of the Commission by Vice Chairman Brewer, they were either unable to accept the offer or did not meet the requirements of the contract.

under way.

The Commission was informed of the tentative selection of Senator Allott as Special Counsel by Vice Chairman Brewer on February 26, 1973, prior to release of that information to the public. Each member of the Commission was afforded an opportunity to object to the selection of Senator Allott. I agreed with Vice Chairman Brewer's proposed action to contract with Senator Allott.

In summary, the assignment of the administrative handling of these proceedings to Vice Chairman Brewer is in accord with standard Commission procedure. In the selection of and contracting with Senator Allott as Special Counsel, the Commission was kept fully informed at each stage of the search for a Special Counsel and given every opportunity to oppose the selection of a specified individual as Special Counsel or to propose another candidate. Yours truly,

RUPERT L. MURPHY,

Commissioner.

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., April 17, 1973. Hon. John D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies, Member, Subcom

mittee on Transportation and Aeronautics, Committee on Interstate and Foreign

Commerce, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: At the request of Chairman Stafford, I am setting forth herein my best recollections of the events leading to the appointment of former Senator Allott as Special Counsel in the Commission's investigation of the railroad freight rate structure and related matters in Ex Parte No. 270.

The report in Ex Parte No. 270 was approved on November 5, 1971. It announced that the Commission was "giving serious consideration to engaging special counsel.” This idea was discussed in a number of memoranda and drafts beginning in July 1971. A good deal of the work was done by Fred Dolan, now an Administrative Law Judge, then senior examiner on Commissioner Brewer's personal staff. Dolan headed a staff committee which included members of the staffs of Commissioners Walrath and Jackson, who were then members of Division 2, the division responsible for Ex Parte No. 270.

The expertise of Dolan, and the anticipated departure of Commissioners Walrath and Jackson, as well as uncertainties about the future of Commissioner Bush, made the choice of Commissioner Brewer to be in administrative charge of Ex Parte No. 270 a logical one. The appointment was made on March 29, 1972, and I was informed thereof at the time. Commissioner Brewer's memorandum of March 30 indicated he had not been particularly eager for this assignment.

By memorandum of March 29, 1972, Commissioner Brewer informed the Commission that Commissioner Walrath (whose former law partner is a Federal judge) was being requested to initiate correspondence with Judge Friendly to determine whether he would be interested in the job of special counsel. On the same date, the Chairman requested suggestions of other candidates. Subsequently, we were advised in Conference that Judge Friendly would not be available since he was not ready to retire from the active Federal bench. How that information was determined (direct contact with Judge Friendly or otherwise) is not known by

Other candidates were considered. Commissioner Bush suggested using Senator Lausche. I have no knowledge as to whether or not Senator Lausche was ever approached for this assignment.

I was told that Mr. Ginnane was approached but he declined because of a heart condition as well as the fact that he recently had joined a new law firm. In May of 1972, we considered an application from Leonard S. Goodman, then chief of the research section of our General Counsel's office.

I was aware of the negotiations with Congressman Springer but was told he had elected to become a Commissioner at the Federal Power Commission.

I am not aware of any discussion of possible utilization of retired Federal judges, but such discussion could have occurred when I was absent.

Tentative details of the funding of the special counsel project were discussed in memoranda as early as March 27, 1972. Commissioner Brewer from time to time told us informally of his negotiations with former Senator Allott.

I received on February 26, 1973, a copy of a draft order appointing Senator Allott as special counsel, which I could have opposed, had I been so inclined. I also received a copy of the Allott letter contract which didn't appear to require any action on my part.

me.

I do not recall any specific discussion of the Special Counsel's proposed $60,000 salary. However, I was not shocked by that figure since it works out to approximately $30 per hour, a reasonable amount when compared with the attorney fees requested and allowed in substantial rail bankruptcy cases which come to us from time to time.

In coming to our decision of November 5, 1971, we considered the following:

Not to be taken lightly is the obtaining of competent special counsel. To obtain someone from outside the Commission with the stature needed will take a sizeable sum of money. It is doubtful that a lawyer successful in private practice could be convinced to work for the Commission full time, giving up all other clients. [Staff memorandum of September 21, 1971, to Division 2] I trust you will find this information helpful. Sincerely,

ROBERT C. GRESHAM,

Commissioner.

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., April 18, 1973. Hon. John D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies of the House Select

Committee on Small Business, 2210 Rayburn Building, Washington, D.C. DEAR MR. CHAIRMAN. I testified briefly before your Subcommittee on Wednesday, April 4, and responsive to your question, as I understood it, as to whether I had voted on the Contractual Agreement between the Interstate Commerce Commission and former United States Senator Gordon Allott, I joined Commissioners Brown and MacFarland in saying "no.” It is my understanding that the Subcommittee desires clarification of that response.

My appointment to the Commission became effective on October 24, 1972. Very shortly thereafter, I was briefed thoroughly by Commissioner Brewer on the objectives sought by the Commission in Ex Parte No. 270. He informed me in detail of the efforts that had been made to retain Special Counsel of the highest possible calibre. He advised me further that negotiations were being conducted at that time with then Congressman William Springer..

My next recollection is that Commissioner Brewer advised myself and the other Members informally that negotiations with Mr. Springer had been terminated. I believe this happened in late December. Subsequently, in early January, I was informed by Commissioner Brewer that it was his intention to approach former Senator Allott. I recall that I responded with enthusiasm to the possibility of retaining Senator Allott as Special Counsel. On this point, my testimony would parallel that of Chairman Stafford. Having worked in the Senate in a senior staff capacity for many years, I came to know Senator Allott personally and to develop the highest possible regard for his integrity and professional competence. I consider, therefore, that I not only acquiesced in the retention of Senator Allott, but applauded the choice. As negotiations progressed, Commissioner Brewer was meticulous in keeping other Members informed and, in the course of events, I clearly understood that the total amount of the Contract was for $650,000.00, with compensation for Special Counsel not to exceed $60,000.00 per annum.

Subsequently, on February 26th, I received a memorandum from Commissioner Brewer, advising that a Letter Contract with Senator Allott had been signed and that, on a no-objection basis, an Order would be entered, naming Senator Allott as Special Counsel and making him a party to the proceeding. Copies of these documents were attached to the memorandum. I indicated my agreement by raising no objection.

In my judgment, the practice of assigning a single Commissioner administrative responsibility for a major investigation authorized by the Commission is in the best interest of orderly and efficient procedure. I can well appreciate the special demands on a Commissioner's time and energies, having been assigned such responsibility in connection with Ex Parte 293, The Northeastern Railroad Investigation, and I would comment that Commissioner Brewer has discharged this obligation both diligently and competently.

I appreciate having this opportunity to expand on my testimony before your Subcommittee. Sincerely yours,

CHESTER M. WIGGIN, Jr.,

Commissioner.

95-151-7316

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., April 18, 1973. Hon. John D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies of the House Select

Committee on Small Business, U.S. House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: This letter concerns a matter developed at the hearings on April 4, 1973, before your Subcommittee on Activities of Regulatory Agencies of the House Select Committee on Small Business. At that time, a question was raised as to whether the members of the Commission were kept informed of the negotiations leading up to the employment of Special Counsel and the contract executed with former Senator Gordon L. Allott.

I am writing to you today in order that the record developed before your Subcommittee may clearly reflect that since my original interim appointment, I have been apprised of both past and present developments in this matter. These developments include the assignment of administrative responsibility for Ex Parte No. 270 and related cases to Vice Chairman Brewer, a funding outline indicating that the total amount of the contract was $650,000, the solicitation of suggestions from each Commissioner of qualified candidates for the position of Special Counsel, consideration of a number of candidates, including Judge Henry M. Friendly, a number of retired Federal judges, and former Commission General Counsel Robert Ginnane, and discussions with former Senator Allott which concluded with an order naming him Special Counsel and designating him a party to this proceeding.

Vice Chairman Brewer distributed a copy of this order to each Commissioner before it was entered. If I had any objection to this order at that time, you may be assured that I would not have hesitated to voice such objection. I approved the order then and I ratify it now. Finally, I wish to state unequivocally at this time that I fully sypport Vice Chairman Brewer's handling of his considerable responsibilities for this complex proceeding.

If you have any futher questions, I stand ready to assist your Subcommittee in its review of this matter. Sincerely yours,

ALFRED T. MACFARLAND,

Commissioner.

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., April 19, 1973. Hon. John D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies of the House Select

Committee on Small Business, U.S. House of Representatives, Washington, D.C. DEAR CONGRESSMAN DINGELL: At the hearings before your Subcommittee on Activities of Regulatory Agencies, the question was raised concerning whether the members of the Commission were kept fully informed concerning matters involved in Ex Parte No. 270, and the related proceedings. I wish to state that I was fully apprised concerning virtually every aspect of these investigations, including our search for a Special Counsel.

I was informed that Chairman Stafford had assigned these proceedings to Vice Chairman Brewer for administrative handling. Matters of this importance are most always assigned to one Commissioner so that maximum progress is insured and the other members of the Commission can be kept informed of all developments.

Vice Chairman Brewer gave me and the other members of the Commission an opportunity to submit names to be considered for Special Counsel. I was aware that several individuals and retired Federal judges, including Judge Henry Friendly, former Senator Frank Lausche, former ICC General Counsel Robert Ginnane and former Congressman William Springer, were under consideration but had either declined the offer or were eliminated from consideration for other reasons.

We were also informed of the discussions with former Senator Allott which resulted with his being named Special Counsel. My office records indicate that Vice Chairman Brewer notified the Commission of the tentative selection of Senator Allott on February 26, 1973. Each Commissioner was given the oppor

tunity to raise any objection to the appointment. I was absent from my office because of illness on February 26 and 27, but I can state that I would have raised no objection to the selection. I will be happy to answer any other questions you may have on this matter. Sincerely yours,

VIRGINIA MAE BROWN, Commissioner.

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., April 23, 1973. Hon. John D. DINGELL, Chairman, Subcommittee on Activities of Regulatory Agencies, Select Committee on

Small Business, House of Representatives, Washington, D.C. DEAR CHAIRMAN DINGELL. This is in response to your request made at recent hearings before your Subcommittee for information as to whether each member of the Commission was kept advised of negotiations and developments respecting the retention of former Senator Gordon Allott as Special Counsel in connection with the Commission's freight rate investigation proceeding in Ex Parte No. 270.

As is so often done in cases of this magnitude and importance, this proceeding was assigned to an individual Commissioner for administrative handling. In this instance the assignment was given by Chairman Stafford to Vice Chairman Brewer. We were advised of this action by a memorandum from Chairman Stafford.

From the outset of his assignment, Vice Chairman Brewer was deeply concerned, over finding an able individual to fill the position of Special Counsel. He did, in fact, discuss with me personally on a number of occasions the kind of man we should try to find for the job. He was constantly on the alert for names of potential candidates. As his search progressed, he advised the Commission members in conferences and otherwise that he had discussed the matter with our former General Counsel, Robert Ginnane, that the rumored possible retirement of Judge Henry Friendly was being checked out, and of discussions with former Congressman William Springer and with former Senator Allott.

Judge Friendly would have, in my opinion, been an excellent choice, but as I recall, his retirement was not sufficiently imminent to meet our needs even if he were interested. I do not know whether any personal contact had been made with former Senator Frank Lausche, whose name had been mentioned and informally discussed as a possibility. To the best of my recollection, there was some question as to whether he would have been interested. With his knowledge of transportation, I am convinced that he, too, would have done a fine job. Also, had former General Counsel Ginnane been available, he would have received my enthusiastic and wholehearted endorsement. Probably no other member of the Commission was more interested than I in the possibility of former Congressman Springer filling the position. Since we are both originally from Illinois, I am more than just a little familiar with his career and his service on the Interstate and Foreign Commerce Committee of the House. I do not believe that we could have done better had he been sufficiently interested. Our only concern here was that of time it took a long time for him to decline.

With respect to Senator Allott, I had, as I have indicated, been informed that contacts had been made with him, and recall that Vice Chairman Brewer repeatedly advised us that discussions were continuing. I was aware of the amount of compensation involved, but felt that since we had to go outside of the Commission, the amount was not excessive. By memorandum dated February 26, 1973, Vice Chairman Brewer advised the Commission of Senator Allott's willingness to accept the position, and in the same memorandum indicated that in the absence of objection, Senator Allott would be designated as Special Counsel,

From my own standpoint, I had little interest in the political affiliation of any of the candidates. I do not even know Judge Friendly's politics. My primary interest and concern were the capabilities of the individual selected in view of the magnitude of the task and responsibilities to be assumed. I satisfied myself as to Senator Allott's background, and from my observations in personal appearances before him at hearings before the Senate Appropriations Committee, of which he was a member, I have every reason to believe that he will perform the duties of Special Counsel in a dedicated and superior manner. Sincerely,

DALE W. HARDIN,

Commissioner.

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