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Contracts, we talked about that earlier this morning, did we not?

Mr. BLAIR. Yes.

Mr. FASCELL. Then we come to MAP-Germany Stockpile “B” Progress Payments—OSP--Germany, Bordeaux Air Depot, Rue Marbeuf Lease, $85 million, Aid to France.

What kind of aid does that report cover!

Mr. BLAIR. That is one of our earlier examinations into the military aid program here.

Mr. FASCELL. Is that report classified ?

Mr. BLAIR. It is a special report dealing with aid made available through funds allotted to ICA. In other words, your military aid, economic aid, and special funds made available through ICA. It is part of the overall

Mr. FASCELL. Is this part of the special funds made available to the President? They are not a subject of audit; are they?

Mr. BLAIR. Mr. Conrardy?

Mr. CONRARDY. It is subject to audit. They are funds set aside by the Department of State for so-called budgetary support, the purpose of which was used to finance the production of military end items. That matter was tied into the military assistance program and should be considered by the Department of Defense in its programing

Mr. FASCELL. Is that report classified ?
Mr. CONRARDY. That is classified "Secret,” yes.
Mr. FASCELL. The next one is SBCP.
Mr. BLAIR. Spanish base construction program.

Mr. FASCELL. Zaragoza Air Force Base. Then you have military assistance program for Spain, and others for Italy, France, Pakistan, Turkey, Germany, and EUCOM.

Mr. BLAIR. Reports have since been issued.
Mr. FASCELL. This EUCOM report I do not recall.

Mr. BLAIR. That is a unified command in Europe that controls the country MAAG's. That is the policy head here.

Mr. FASCELL. That is a separate report from the worldwide summary report?

Mr. Blair. It deals with a particular problem. If you read along you will see that in the title. It is the Redistribution of Excesses, and that has application across the board.

Mr. FASCELL. Talking about military equipment there?
Mr. Blair. That is right.
Mr. FASCELL. That report is classified!
Mr. BLAIR. Yes, sir.
Mr. CONRARDY. Confidential.

Mr. FASCELL. Would you supply for the record those reports in the first group, that is, which are in departmental headquarters in the United States on which a determination has been made that they should be submitted to Congress, so that we can have that in the record ?

Mr. BLAIR. All right. That is a decision not made by the European branch. That is a decision made back in Washington. I can ask the Washington office to make that information available to you.

Mr. FASCELL. If you would.
Mr. BLAIR. All right.

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(In lieu of the material requested, the Washington office of the General Accounting Office furnished a statement for the record as follows:)

During the hearings in Paris by the Legislative and Reorganization Subcommittee of the House Committee on Government Operations, Mr. Fascell requested that the General Accounting Office advise which of the reports listed on exhibit J of the report on History, Organization, and Operations of the European Branch, United States General Accounting Office, May 31, 1957, under the heading “Reports Submitted to Departmental Headquarters in Continental United States" (pp. 51 and 52) are to be submitted to the Congress. The use of this separate category in exhibit J was intended to represent the final action contemplated with respect to these reports, since under General Accounting Office standards we did not feel that the information contained in these reports was of sufficient significance or of such general application as to warrant consideration by the Congress, particularly in view of the actions taken by the administrative offices concerned after receipt of these reports.

For these reasons we do not contemplate that any of the reports listed on pages 51 and 52, except EB-AS-12 (B-118713) which was furnished in connection with a specific inquiry relating to the subject matter, will be forwarded to the Congress or its committees under our established reporting procedures.

Mr. FASCELL. It is a little bit out of the line of command, but it would help us out. Anyway, I sort of got the idea that maybe you ought to know which reports have been submitted to Congress.

Mr. Blair. We are informed. We receive the reports as they are issued, and the Office issues a monthly status report.

Mr. FASCELL. As to where each report is?
Mr. BLAIR. Right.

Mr. FASCELL. This subcommittee is charged with the responsibility and the jurisdiction of receiving all reports from the General Accounting Office. Were you aware of that?

Mr. BLAIR. Yes, sir.

Mr. FASCELL. Do you know of any reason why we should not have all reports from the General Accounting Office, no matter what their classification might be ?

Mr. BLAIR. Absolutely not. Insofar as I know, the matter of classification does not enter into that.

Mr. FASCELL. As to whether or not it goes to Congress?

Mr. BLAIR. Right. That is not one of the factors in the decision back home.

Mr. FASCELL. You see what I am getting at, of course. You have here a determination that a report will be submitted to Congress. Somebody in the General Accounting Office, primarily the Comptroller General, decides after it is recommended, in your opinion, whether or not the matter is significant or not. I do not want to second guess a professional, but I might disagree with what is significant. You might think it is minor and I might think it is very important.

Since this subcommittee does have that jurisdiction if we are not already getting it, Mr. Poland, I think we ought to see to it that we get a complete listing of all reports and we decide which ones we want of those already sent to us in the course of normal business.

Mr. POLAND. I think this listing shows the ones sent.

Mr. FASCELL. No, it does not. That is the very point I was getting in the record.

Does this brief include now all the reports and the recapitulation that you gave us a moment ago?

Mr. BLAIR. Yes.

Mr. FASCELL. Plus 37 in progress. We took a recapitulation just before

you came in, Mr. Michel. Mr. BLAIR. I believe, Mr. Chairman, a preceding committee of the House Government Operations Committee raised certain questions about certain reports sent over. In other words, strictly the information type of reports. The question was raised, why are you sending just information reports ?

I can be wrong on that, but I would like to point out that the matter of referral of reports by the Office over to the Hill is certainly under continuous review, but I believe that a preceding committee of the House raised that.

Mr. FASCELL. I think it was a military operations subcommittee. I am a member of that committee, too, and we got into the question of audits, surveys, and informational reports. There was a feeling on the part of some of the members that the committee was being snowed under with reports that did not mean anything. I respectfully have a difference of opinion.

Mr. BLAIR. I just wanted to point outMr. FASCELL. As a matter of fact, this is a technical detail that the staff can work out. Just so long as we understand that there is no policy that limits the reports made available to this committee.

Mr. BLAIR. The only limiting factor that I am aware of, on the basis of my discussions with the men back home, is the following: Is it of interest to the Congress and can they do anything with it! Every man here wants his report to be one that goes to Congress. We want to show them what we are doing.

Mr. FASCELL. If you screen them in the first instance, that ordinarily ought to be sufficient. If the Comptroller General screens them again, that would do it. All we are interested in is just being sure that we reserve the right for the congressional committee charged with the primary responsibility on these things of also having the opportunity of screening them. That is all I was getting at.

Let us get into the specific items now.
The military assistance problems are what I am interested in.

Mr. BLAIR. At the time we recessed, Mr. Chairman, for lunch, Congresswoman Harden posed a question as to the action the military have taken on the recommendations made. I informed her that we had not conducted any follow-up to find out what they had done. Mr. Conrardy informed me that the military have initiated certain corrective actions in areas called to their attention in the course of our review. I would like to call on Mr. Conrardy to place in the record the corrective action taken.

Mr. FASCELL. Mr. Conrardy?

Mr. CONRARDY. I can give several examples of a general nature as to action taken by the MAAG's. Our review of these country programs covered the 1957 and 1958 programs. The 1958 program has not yet been implemented so that if we could show something was improper, it would be possible for the MAAG to amend the 1958 program. This was done in several instances. The most specific example of an accomplishment known to us at this time has reference to a particular country that was using dollars to defray expenses that were eligible for reimbursement from local currency. They took immediate corrective action.

Mr. FASCELL. They took that action and you collected the money due us?

Mr. CONRARDY. That is right.

Mr. FASCELL. How much was that? Not exactly, but about how much?

Mr. CONRARDY. In excess of 1 million for the limited period that they reviewed.

Mr. FASCELL. In excess of $1 million for the limited period ?
Mr. CONRARDY. Yes. That is very clear and very specific.

Mr. FASCELL. Do you have any other such areas that you can tell us about?

Mr. CONRARDY. Nothing quite as definite as that. However, we have recommended in several instances that the force objectives upon which the military assistance program is founded be reviewed. I cannot be too specific because of the classification and I am trying to keep it general. We have been given assurance that these bases would be reviewed and, as a consequence, our reviews lead us to feel that these bases or force objectives may be reduced with a consequent reduction in the amount of military end item assistance required to meet mutual security objectives.

Mr. FASCELL. This last conclusion intrigues me. I do not see how you can arrive at that conclusion on the basis of the predicate laid down in your report. That is, that the force objectives are not realistic in terms of capabilities of the local country.

Mr. CONRARDY. That is correct.

Mr. FASCELL. When you re-evaluate your force objectives to get them down to capabilities, how does that affect the cost of the end military item to the United States?

Mr. CONRARDY. I would have to give a specific example, but I cannot think of a way to do it without making it classified.

Mr. FASCELL. Without relating it to a country or an item, give us an example.

Mr. Conrardy. If you would eliminate a complete force objective, then it would no longer be necessary to supply the related equipment or end items.

Mr. FASCELL. Let us translate that into the English language. If we said country X will no longer be required as a goal to maintain 20 divisions of ground troops, we have had this now so far for an objective for this country in the mutual security program, but we have decided, after thinking about it a while that the objective has been there for a good number of years and everybody knows that nobody intends to meet it and did not really need it. We just do away with it. Do I understand your conclusion to be that once we have eliminated that, that means we would not have to put the military money that would go into that assistance program into that country, which was primarily then, after you have done this, a political consideration, and not military?

Mr. CONRARDY. In the example you have given, that is correct, but in another instance where equipment has been programed in the 1958 program, to meet a particular force objective, for which we feel that corrective action would have been taken upon revision of that force objective. As I say, we have no assurance that that has taken place. There are indications that it has. This is all done at departmental levels. We are not in a position to give any thing more definito on it. At the time we left this particular MAAG, they had concurred completely in our views concerning the necessity for the force objective in question.

Mr. FASCELL. What you are saying to me-please correct me if I misunderstand, or misinterpret it—is this: That an evaluation of this military-assistance program has shown that in some instances force objectives were unrealistic or had no relationship to agreed roles or missions. None. None or very little.

That is what it says in the report which is unclassified.
Mr. CONRARDY. That would be a reasonable interpretation.

Mr. FASCELL. That sounds to me like something the Comptroller General already said. We are wasting a lot of money that is supposed to be important to the security of the United States.

Let us get into these other things. I wanted to take these items one by one and try to discuss them.

One of the things I wanted to discuss was the relationship of actual procurement to force objectives and another was the contribution of a country, an acceptance on the part of the country to the force objectives or the purpose of our program.

Mr. CONRARDY. We found that oftentimes the force objectives were such that the recipient country was either unable or unwilling to maintain those force objectives and, as a consequence, an indefinite liability was being placed upon us to maintain these objectives to meet mutual-security needs.

Mr. FASCELL. We could say that another way and that is this: A group of countries and the United States have arrived at a mutualsecurity program but with respect to certain countries we had not even yet achieved the basic agreement as to just exactly how far they would go and how much money they would spend. Notwithstanding that, we went ahead and carried the whole program.

Mr. CONRARDY. That is correct. No roles or missions had been established for some countries.

Mr. FASCELL. It was mutual security in some cases and in some cases it was just plain United States security in the judgment of somebody?

Mr. CONRARDY. Yes. Mr. FASCELL. That judgment was basically and obviously a military judgment. Of course, we cannot make that as a conclusive statement because it probably involved a question of foreign relations so probably the hand of the State Department is involved, too.

Mr. Poland points out a thing that is in this report, too. That is, is it not true that it is a responsibility of the MAAG group itself to initiate the program?

Mr. CONRARDY. Yes, that is one of the responsibilities of the MAAG.

Mr. FASCELL. In trying to relate this thing up or down, you have to start right where the responsibility lies and that is where the group in each country that is responsible for programing military assistance is involved; is that true?

Mr. CONRARDY. That is correct.

Mr. FASCELL. That is the basis on which the General Accounting Office makes its report. They did not go to the Defense Department in Washington to arrive at these conclusions ?

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