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United States. Congress. Joint Cavittee m
Dol nie Productim.

zos DoD-INDUSTRY RELATIONS: CONFLICT OF INTEREST

AND STANDARDS OF CONDUCT

HEARINGS

BEFORE THE

JOINT COMMITTEE ON

DEFENSE PRODUCTION CONGRESS OF THE UNITED STATES

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JOINT COMMITTEE ON DEFENSE PRODUCTION
(Created Pursuant to Public Law 774, 81st Congress)

WRIGHT PATMAN, Texas, Chairman

WILLIAM PROXMIRE, Wisconsin, Vice Chairman LEONOR K. SULLIVAN, Missouri

JOHN SPARKMAN, Alabama GARRY BROWN, Michigan

HARRISON A. WILLIAMS, JR., New Jersey
ALBERT W. JOHNSON, Pennsylvania JOHN TOWER, Texas

EDWARD W. BROOKE, Massachusetts
WILLIAM H. KINCADE, Staff Director
LEON S. REED, Professional staff Member

MARTHA BRADDOCK, Chief Clerk and Editor
J. MICHAEL HEMPHILL, Minority Professional Staf

(II)

CONTENTS

MONDAY, FEBRUARY 2

Robert E. Hampton, Chairman, U.S. Civil Service Commission, accom-

panied by Carl Goodman, General Counsel...

Robert Anderson, President, Rockwell International Corp., accompanied

by John J. Roscia, Vice President and General Counsel

Thomas V. Jones, President and Chief Executive Officer, Northrop Corp.;

accompanied by Eldon H. Crowell, Esq-----

TUESDAY, FEBRUARY 3

Alice Tepper Marlin, Executive Director, Council on Economic Priorities.

Dr. George M. Low, Deputy Administrator, National Aeronautics and

Space Administration; accompanied by Neil'Hosenball

, General Counsel;

and James Cummings, Director, Inspections and Security -

William P. Clements, Jr., Deputy Secretary of Defense; accompanied by

Richard A. Wiley, General Counsel, DoD; and Bernard P. Lynn,

Director, Defense Contract Audit Agency ---

APPENDICES

I. CORRESPONDENCE SUBMITTED FOR THE RECORD BY

MR. ROBERT HAMPTON, CHAIRMAN OF THE CIVIL

SERVICE COMMISSION:

Relating to the investigation by the Civil Service Commission

into alleged charges of favoritism in hiring of former employees

of Rockwell Corp. by National Highway Traffic Safety

Administration...

II. MATERIAL SUBMITTED BY MR. ROBERT ANDERSON,

PRESIDENT OF ROCKWELL INTERNATIONAL CORP.:

A. Letter from Mr. Robert Anderson to Senator William Prox-

mire, dated March 15, 1976.----

B. List of all facilities owned, leased or used by Rockwell Corp.

or its officials to entertain officials of the Department of

Defense or NASA, along with names of officials enter-

tained and costs...

C. Denial of leasing, owning or using hunting facilities in Labra-

dor or Arkansas..

D. List of members of Conquistadores, bylaws and rules.--

E. Additional questions and responses for the record relating to

Business Roundtable.--.

III. MATERIAL SUBMITTED FOR THE RECORD BY MR.

THOMAS V. JONES, PRESIDENT OF NORTHROP CORP.:

A. Northrop's corporate policy directive (CPD) ordering termina-

tion of entertainment of Government officials and related

policy niemoranda..

B. Detailed amplification of Mr. Whidden's job description;

description of duties of Maj. Gen. Winston Wilson, USAF
(retired): letter from Mr. F. W. Lynch, Northrop Corp.,
to Major General Wilson, dated September 23, 1975; de-
scription of duties of Mr. S. W. Towle, Jr.: letter from
Mr. F. W. Lynch to Mr. S. W. Towle, Jr., dated January 13,

1976..

C. Additional questions and responses for the record..

(III)

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IV. MATERIAL SUBMITTED FOR THE RECORD BY MR. W. P.

CLEMENTS, DEPUTY SECRETARY OF DEFENSE:
A. Letter from Mr. W. P. Clements to Senator William Proxmire,

dated January 22, 1976, with attachments, concerning
those who received letter of admonition for attending the

Northrop hunting facility ---
B. Final report of the Task Force to Enhance the Audit of

Contractors, Department of Defense, January 5, 1976..---
C. Amended Department of Defense standards of conduct direc-

tive, 5500.7..
D. Representative copy of Deputy Secretary of Defense letter to

contractors, list of addresses..
E. Representative copy of Deputy Secretary of Defense letter to

DOD project managers (letter from W. P. Clements to
George E. Jessen, USN Naval Air Systems Headquarters,
dated December 8, 1976)

list of addresses, and selected
replies from Mr. William Wyatt, Col. Frank Palermo, Jr.,
Col. George Murphy, Col. Garwin McCurdy, Maj. Gen.

Robert C. Mathis...
F. Copy of Department of Defense public affairs letter to non-

Government associations and list of addresses, dated

December 18, 1975..
G. Letter from Mr. L. Niederlehner, Acting General Counsel,

Department of Defense to Senator William Proxmire,
dated December 10, 1975, with attachments, concerning
DOD procedures and regulations implementing section 410

of Public Law 91-121..
H. Letter from Senator William Proxmire to Hon. William

Clements dated February 18, 1976, requesting material for

the record.
I. Letter from Mr. William Clements to Senator William

Proxmire, dated May 20, 1976_
J. Statement of Secretary of Defense Donald Rumsfeld on im-

portance of standards of conduct, April 8, 1976.
K. Information requested for the record in the hearing.

L. Responses to additional questions for the record..
V. FURTHER CORRESPONDENCE BETWEEN SENATOR

WILLIAM PROXMIRE AND SECRETARY OF DEFENSE
DONALD RUMSFELD RELATED TO ENTERTAINMENT
OF DOD OFFICIALS:
A. Letter from Senator William Proxmire to Secretary Rumsfeld,

dated March 17, 1976.--
B. Letter from Senator William Proxmire to Secretary Rumsfeld,

dated March 17, 1976.--
C. Letter from W. P. Clements to Senator William Proxmire,

dated May 27, 1976...
Vl. CORRESPONDENCE REGARDING PARTICIPATION OF

MR. BOBBY DALE PATTERSON IN EXECUTIVE INTER-
CHANGE PROGRAM:
A. Letter from Senator William Proxmire to J. Stanford Smith,

Chairman of President's Commission on Personnel Inter

change, dated March 19, 1976-----
B Letter from Mr. Allez E. Parmenter, Executive Director of

President's Commission on Personnel Interchange, dated
March 30 with attachments.

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431 435 454

456

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DOD-INDUSTRY RELATIONS: STANDARDS OF CONDUCT

AND CONFLICT OF INTEREST

MONDAY, FEBRUARY 2, 1976

U.S. CONGRESS,
JOINT COMMITTEE ON DEFENSE PRODUCTION,

Washington, D.C. The Joint Committee met at 10:10 a.m., pursuant to call, in room 5302, Dirksen Senate Office Building, Hon. William Proxmire presiding.

Present: Chairman Wright Patman, Senator William Proxmire, Representative Leonor K. Sullivan, Representative Albert Johnson, Senator John Sparkman, Senator John G. Tower, and Representative Larry Coughlin.

Senator PROXMIRE. The committee will come to order.

Mr. Hampton and Mr. Goodman, will you please stand and raise your right hand ?

Do you swear to tell the truth, the whole truth, and nothing but the truth so help you God!

Mr. HAMPION. Yes, sir.
Mr. GOODMAN. Yes, sir.
Senator PROXMIRE. The hearing will come to order.

This week's hearings by the Joint Committee on Defense Production have been called to inquire into Federal standards of conduct and conflict of interest regulations. They are the first in a series of hearings planned for the purpose of determining whether there are adequate safeguards against the waste of tax dollars and whether there is adequate enforcement of these safeguards.

Today's hearing is the direct result of the Joint Committee's ongoing investigation of hospitality and other corporate "freebies" pro vided to civilian and military officials of the Government. In this phase of the investigation, we are particularly interested in the efforts of Federal agencies and especially of the Department of Defense—to preserve the integrity of the procurement process through scrupulous observance and enforcement of applicable statutes and directives. The Joint Committee also wants to determine whether and in what ways current statutes might be improved, so that it can make recommendations to the appropriate legislative committees of the Congress.

We will be focusing in particular on the Department of Defense, not only because of the cost accounting standards provisions of the Defense Production Act, but also because the Department of Defense has by far the largest procurement budget of any Federal department or agency.

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