Mr. CONRARDY. We had had the benefit of the force objectives established by the Joint Chiefs of Staff and the Department program guidance. These are then reviewed and we determine whether or not the MAAG’s have complied with the program guidance promulgated by the Department of Defense.

Mr. FASCELL. The answer is that they have not? Mr. CONRARDY. The answer is that unreasonable interpretationsMr. FASCELL. And various interpretations. Mr. CONRARDY. And various interpretations. Mr. FASCELL. Of course, you also found out, did you not, in a review of this thing, that your objectives on military assistance programs in these countries obviously were not motivated strictly on the question of military?

Mr. CONRARDY. That is correct. We found that it was very difficult at times to segregate the political, economic, and military motivations behind our military assistance program.

Mr. FASCELL. Can you give us a little bit clearer idea of that?

Mr. CONRARDY. In the instance of one country, we found that the force objectives that had been established for that country were not so much for the purpose of maintaining effective military forces, so as to meet military situations, but rather, those force objectives were established for the purpose of meeting other military considerations such as the maintenance of United States base rights in that country,

Mr. FASCELL. How do you differentiate there? What is the technical difference? I do not follow you. Is it not true that the maintenance of a base is a part of your program?

Mr. CONRARDY. We feel that force objectives should be established only in those instances where some military value is to accrue from the establishment of such force objectives, or where there is some mutual defense role that has to be met.

Mr. FASCELL. Are you telling me that there are some cases where we are building bases in this command that have no relationship to military necessity! Is that what you are saying?

Mr. CONRARDY. Yes, that is true; not unrelated to military necessity, but unrelated to an agreed mutual-security mission.

Mr. FASCELL. If we are doing that, then it ought to be called what it really is. Is that what you are saying?

Mr. CONRARDY. Yes.

Mr. FascELL. We should not try to hide it under the guise of a military mission.

Mr. CONRARDY. Correct.

Mr. FASCELL. If we are doing that, I agree with you 100 percent. In this particular thing, again without being specific, are we talking about hundreds of thousands of dollars or millions or billions?

Mr. CONRARDY. We are speaking of hundreds of millions of dollars.

Mr. FASCELL. There, again, we want to make it clear that you are not evaluating the necessity of that particular program?

Mr. CONRARDY. No, we do not in any instance make any evaluation of the strategic requirements.

Mr. FASCELL. All you are saying is that if you are building whatever it is, do not say you are building it for mutual security purposes when you are not building it for those purposes, and label it as it should be labeled.

Mr. CONRARDY. That is correct.

Mr. FASCELL. The net effect of that would be, if you followed these recommendations, the total amount of appropriations programed for the military assistance aspect could be reduced considerably, would it not? Mr. CONRARDY. To meet strictly military purposes for mutual de

fense, yes.

Mr. FASCELL. On a percentage basis, without being specific, are we talking now in the area of 25 percent, 50 percent, 10 percent, or what?

Mr. CONRARDY. I have no basis for an estimate, but as a strictly personal guess I would say the percentage would be something less than 25 percent for the reason that these considerations more often come up in smaller, undeveloped countries than they do in the more developed countries.

Mr. FASCELL. It ought to be classed as straight economic assistance or whatever the proper designation for it is?

Mr. CONRARDY. That is correct. If it is strictly for political purposes, we feel it should be justified by political authority.

Mr. FASCELL. Obviously, if we are talking about a $2 billion program and roughly 25 percent of it ought to be in other categories.

Mr. POLAND. Has the MAAG ever indicated to you that the reason why they are called military assistance is to sugar up Congress enough so it will become palatable!

Mr. CONRARDY. No, that has never been indicated to me.
Mr. POLAND. It has to me.

Mr. FASCELL. It has to Congress, too, I can tell you that. We have scrutinized it very carefully. We have scrutinized it as carefully as we could.

I realize that after the report was made by the General Accounting Office we now have a pretty fair idea, after we were looking at the prospective programs, that we really bad no basis upon which to evaluate the operation. I think that is about the conclusion that the GAO came to, was it not?

Mr. CONRARDY. That is correct. We felt some long-range plans should be provided for reviewing the force objectives presently in effect by the Joint Chiefs of Staff.

Mr. FASCELL. What we are really saying then is that the way the thing has been operating it is impossible for the operators to evaluate how it has operated. If you cannot, as a GAO evaluate, based on the information that you got with your investigations, your surveys, and what not, Congress is not able to do so and how in the world can the Department evaluate it?

Mr. CONRARDY. That is correct. It would be worth while not only to Congress, but also to management officials in the administration of the program.

Mr. FASCELL. Furthermore, I believe that you went on in this report, did you not, to point out the fact that it was impossible for management to determine what was the most serious or urgent deficiency? That is, in any given area?

Mr. CONRARDY. Yes, we were not completely satisfied with the implementation of the priority system established to meet military needs within countries and as between countries. We felt that since because of limited funds, force objectives were fiscally unattainable, priorities should be applied in such a way as to make sure that the most important units to our national defense are provided for first.

Mr. FASCELL. What were the findings with respect to the capabilities of the recipient countries?

Mr. CONRARDY. Generally, we found that, in the instance of underdeveloped countries, military assistance was being granted to them in excess of their ability to utilize, absorb, and maintain military forces being established under the program.

Mr. FASCELL. In other words, the United States, as a part of its foreign policy, was forcing a military economy upon a country that did not want it? I am not asking you to say yes or no to that.

Mr. CONRARDY. Surprisingly, there are at least two instances where I have reason to believe that the countries would be willing to take on a greater military burden although they are currently incapable of maintaining the burden they now have.

Mr. FASCELL. That is the story of Johnny liking cake and eating more than was good for him?

Mr. CONRARDY. Yes.

Mr. FASCELL. A question was asked during the Comptroller General's statement which came out of the report and which I want to ask you again for the record. A series of very searching questions were asked and one of them was of very much interest to this committee and should be of interest to other committees of Congress.

If the Congress authorizes and appropriates the funds requested this year, what standards of accomplishment have been established so that the Congress will know next year, or in succeeding years, whether these funds have been used prudently?

The answer is that we just do not know at this point?
Mr. CONRARDY. That is correct.

Mr. FASCELL. We have finally proved to ourselves that which we have been afraid of all along: We in Congress have done the best we could but we have had to rely a great deal on somebody else's judgment with respect to actually appropriating and authorizing funds for this whole program. Of course, the proof of that statement is the fact that Congress has been extremely cautious in scrutinizing the whole program. The studies that were undertaken by the Senate and the House and the President's Committee, all of those were trying to cope with the problem without getting into specific details finally furnished by the General Accounting Office as a basis from which everybody could operate. We could have saved all of the money of those special committees, and surveys, and reports spent by Congress in an effort to get this same information.

Would you comment, then, in answering that question for Congress itself, how the budget presentation should be made, if it is going to be made, with respect to this program, anyway?

Mr. CONRARDY. We feel, Mr. Chairman, that long-range plans should be made by the military assistance authorities so that Congress will know the total cost of the program.

Mr. MICHEL. How long?

Mr. CONRARDY. Based on the force objectives established by the Joint Chiefs of Staffs and the Department of Defense programing criteria, it is possible to estimate the amount of modernization and maintenance that will be required in succeeding years to maintain these forces in being. We feel that such a long-range plan should be available at the time the congressional presentation is made so that the Congress will know at what stage of development these forces are in. We should also be able to determine whether the effectiveness of the forces is satisfactory at the current stage of programing

Mr. FASCELL. In order to accomplish that, we have to go on an accrued expenditure basis, is that not true?

Mr. CONRARDY. No, I do not believe it is necessary to go on an accrued expenditure basis although that would be desirable.

Mr. FASCELL. Highly desirable.

Mr. CONRARDY. Highly desirable. We could accomplish these purposes

Mr. FASCELL. By good management.
Mr. CONRARDY. Long-range planning.

Mr. FASCELL. Which is what you are talking about. In carrying out the point that Congressman Michel talked about, you are not talking about long-range appropriations without fiscal-year limitations. What you are talking about is just long-range planning so you are able to figure out what money you need to accomplish a goal ?

Mr. CONRARDY. That is correct; so we can determine how much additional assistance is required.

Mr. FASCELL. What you are recommending then is a management or administrative correction?

Mr. CONRARDY. That is correct.
Mr. FASCELL. Primarily?
Mr. CONRARDY. Yes.

Mr. FASCELL. That would be tied in with the most ultimate or desirable goal and that would be to tie that in with an annual expenditure base budget so that Congress would be able to determine measured performance each year against the ultimate objective; is that what you are saying?

Mr. CONRARDY. That would be very highly desirable.

Mr. FASCELL. There is one statement in this thing that I underline about 4 or 5 times. Data reported is inaccurate or untimely. Am I correct in stating then that it is the position of the General Accounting Office that the information from the Executive, from these agencies, was so bad that you really could not use it?' That is what it says. The data reported is inaccurate or untimely.

Mr. CONRARDY. I have no personal knowledge of what that statement makes reference to.

Mr. FASCELL. In the Comptroller General's statement he went on to say that a special Department of Defense working group has been studying the reporting system for military assistance programs. The Comptroller General goes on to say that reviews within the military department have shown that deficiencies exist in current reports on the military assistance program and some of the data reported is inaccurate or untimely. He says, "Our representatives have participated in the Defense working group reviewing the reporting system for the military assistance

program. Would that come under Mr. Wootton who has only been here 2 days! He has his hand up, I see, and he wants to talk.

Mr. Blair. Mr. Wootton worked on the program for the Washington staff, Mr. Chairman.

Mr. FASCELL. Obviously the statement is true. Tell us about it.

Mr. WOOTTON. Mr. Chairman, I supervised the examination of the foreign-aid program in the Air Force stateside in 11 different locations. I think probably the statement by Mr. Campbell that “some of the data reported is inaccurate or untimely" came from a report based on a review of the MAP at all levels and was developed and prepared in Washington. One of the things we were talking about is the accounting for, and the delivery of, materiel at three ports where the materiel is put aboard ship for transocean shipment. There seems to have been quite a delay in getting the shipping documents through from the shipping point to the port to be matched with the delivrey slips back to the shipping point. We are talking about the delay and untimeliness of that particular part of the accounting and reporting.

Mr. FASCELL. So much so that it was impossible to check out?
Mr. WOOTTON. Yes, sir.

Mr. FASCELL. What you are saying then, and I am paraphrasing it, is that everything would just stand. They loaded a boat, dumped it out, and they sent the boat back and that is all anybody ever did!

Mr. WOOTTON. If I may add something to that statement, military assistance shipments go into these three ports of embarkation along with all other shipments of the Air Force, Army, and Navy. The shipping documents are supposed to be marked "MÁP.” Again, it is the ability of the clerk who is preparing shipping documents. In the case of the Air Force at the 15 different locations from which they are making these shipments, they are lower grade employees who are doing this type of work. I have seen any number of the shipping documents which are made in duplicate, and usually marked "MAP" with pencil and sometimes with a rubber stamp. When they get to the ports, it is hard to decipher that it is a military-assistance program shipment and they change it to a regular Air Force shipment. Now keep in mind, getting back to the systems area, that the Air Force is operating two systems: One for military assistance and another system for its own shipment of materiel. Knowing that for military assistance shipments the services are going to be reimbursed at the time they secure evidence that the materiel has been placed aboard a ship for transocean shipment, and not until they can produce that evidence are they reimbursed. That is the difficulty that we are encountering.

Mr. FASCELL. They get reimbursed out of appropriated funds to the extent of funds that have been expended in local currencies?

Mr. WOOTTON. No, sir. They ship materiel which has been paid for from their own departmental funds subject to reimbursement from foreign aid funds.

Mr. FASCELL. That involves strictly a bookkeeping transfer?

Mr. WOOTTON. Yes. But they are making deliveries based on materiel that they have paid for from their own appropriations, based on anticipated reimbursement being secured from the foreign aid appropriations when the evidence of delivery has been effected.

Mr. FASCELL. The ultimate conclusion of that is, if they are sloppy in their bookkeeping, they are not going to be reimbursed out of other appropriations accounts ?

Mr. WOOTTON. That is true.