[From the Minneapolis Tribune]

U.S. FARM SURPLUS HEAD QUITS-RESIGNS AFTER PROBE OF SOME OF HIS ACTIVITIES

(By Charles W. Bailey, Minneapolis Tribune staff correspondent) WASHINGTON.-The operating manager of the Federal Farm surplus stockpile resigned abruptly after the Agriculture Department began an investigation of some of his activities, the Minneapolis Tribune learned Tuesday.

Frank R. McGregor, Deputy Administrator for Operations of the Commodity Stabilization Service (CSS) which manages farm products acquired under the price-support program, resigned October 7.

McGregor is formerly from St. Louis, Mo.

Yesterday Ralph Roberts, Administrative Assistant Secretary of Agriculture, said that McGregor's resignation was submitted "after the Department confronted him with some facts which brought about his resignation."

Roberts said that the Department investigation which led to McGregor's resignation involved "outside business activities in part."

He said: "As far as the facts were known when the matter was turned over to the Justice Department, it is a private problem-as far as we know it does not involve transactions in Government commodities."

He emphasized that McGregor was not dismissed but resigned. "There was a situation which we felt justified administrative action," he said noting that there are types of actions by Federal employees that may make appropriate some administrative action even if criminal action does not appear warranted. Roberts would not go into detail concerning the "facts" presented to McGregor, saying that the case had been turned over to the Department of Justice "as cases of this sort always are which might involve some violation of law."

A Justice Department spokesman said that the case "had been referred over here and is under investigation."

McGregor submitted his resignation to Walter Berger, CSS Administrator, October 7, and made it effective that same day.

The Department made no announcement of the resignation until some days later when it named as successor, Andrew J. Mair, of Colorado. In the announcement of Mair's appointment, the Department said McGregor had resigned to return to private business.

Also figuring in the case, it was learned, was a private business operation under McGregor's name during the time he held Federal office.

The Washington telephone directory, issued before he resigned from CSS, lists a "Frank R. McGregor & Associates," with a downtown address and telephone number. Calls for McGregor at that number yesterday were referred to his home telephone. There was no answer at McGregor's apartment.

Boss LAUDED OFFICIAL WHO QUIT UNDER FIRE

(By Charles W. Bailey, Minneapolis Tribune staff correspondent)

WASHINGTON. A key Federal farm-surplus official who resigned under pressure 3 weeks ago received a farewell letter of high praise from his superior officer after he left the Department, the Minneapolis Tribune learned Thursday.

Frank R. McGregor, who resigned abruptly October 7 as Deputy Administrator of the Commodity Stabilization Service (CSS), received the letter a week later from Walter C. Berger, CSS Administrator.

In the "Dear Frank" letter, Berger said, "I don't know what I would have done without you" and referred to McGregor as a man "in whose ability and integrity I could have complete faith and confidence.”

McGregor quit after Ralph Roberts, Assistant Secretary of Agriculture for Administration, informed him that he was under investigation. The matter has been referred to the Department of Justice for further investigation.

Roberts' action followed by several weeks the questioning of McGregor by a House Government Operations Subcommittee, headed by Representative Fountain (Democrat, North Carolina), which has been probing operations of the Federal farm surplus handling and sales program.

McGregor's letter of resignation, sent to Berger, gave as the reason for resigning the fact that McGregor wanted "to return to private business."

This was also the reason given by the Department in its first public announcement of the resignation made at the time a successor was appointed.

In his reply, Berger praised McGregor's "unique capacity" and said this had been responsible for "a considerable increase in the efficiency of the CSS." Berger noted that McGregor last spring was one of only seven Agriculture Department officials to receive the Department's Distinguished Service Award.

The tone and content of the Berger letter, signed "Walt," appeared to contrast sharply with the attitude of Roberts, who earlier this week said that McGregor quit "after the Department confronted him with some facts which brought about his resignation."

Senator SYMINGTON. And you do not know what Mr. McGregor's activities were in this company known as Frank R. McGregor & Associates, 1000 Connecticut Avenue?

Mr. COREY. I had no knowledge and I have no knowledge of the company at all.

Senator SYMINGTON. He never discussed this company with you? Mr. COREY. That is right.

Senator SYMINGTON. Am I correct in my understanding that as the director of the Portland CSS office, you served in the highest administrative capacity of the Department of Agriculture outside Washington?

Mr. COREY. I have been told that, yes.

Senator SYMINGTON. I would like to say at this point that the Senator from Kentucky is entirely correct in his statement that someone from the Department of Agriculture should appear before this subcommittee. A gentleman from the Department of Agriculture was here this morning. Would you rise and identify yourself again?

Mr. GOOLD. Yes, sir. My name is W. George Goold-G-0-0-l-d. Senator SYMINGTON. Is there anybody else here from the Department of Agriculture?

Mr. GOOLD. To my right, Mr. Miles Horst, in the Office of the Secretary.

Senator SYMINGTON. Will you spell his name?

Mr. GOOLD. H-o-r-s-t.

Senator SYMINGTON. What does he do in the Office of the Secretary? Mr. GOOLD. His job in the Department is, as I understand it, to answer the requests of Congressmen for information concerning agricultural programs.

Senator SYMINGTON. As long as he is here, would you ask him if that is correct?

Mr. GOOLD. Is that correct?

Mr. HORST. Yes, sir; that is basically correct.

Senator SYMINGTON. Would one of you gentlemen notify the proper officials in the Department of Agriculture that, as soon as it is convenient for both the Department and this subcommittee, we would like to have a Department representative as a witness? Such appearance is necessary because Mr. Corey has testified he did not know anything about conflicts of interest, as was described in the regulations, and also because Mr. Frank McGregor, Deputy Administrator of Operations, was his superior for some time. Is Mr. McGregor still with the Department?

Mr. GOOLD. No, sir, he is not.

Senator SYMINGTON. Well, then, I suppose there is no use in asking you, but for the record, the committee will ask Mr. Frank McGregor to appear as a witness inasmuch as his name has been brought into the hearing because he was a former chief of Mr. Corey.

Mr. GOOLD. Yes, sir.

Senator SYMINGTON. Is there anybody else the Department of Agriculture would like to have appear as a witness in this matter?

Mr. GOOLD. I am prepared at this time to make a statement as to what we called to Mr. Corey's attention in regard to conflict of interest

matters.

Senator SYMINGTON. Thank you very much. If you will wait.
Mr. COREY. Mr. Chairman, could I

Senator SYMINGTON. Just a minute, please.

Senator Young?

Senator YOUNG of North Dakota. I would like to ask two or three questions.

What year did you leave the Department of Agriculture, Mr. Corey? Mr. COREY. January 22, 1960.

Senator YOUNG of North Dakota. I mean the first time.

Mr. COREY. Oh, in July or August, as I recall it, 1946.

Senator YOUNG of North Dakota. What year was that?

Mr. COREY. July or August, 1946. I don't have the exact date at hand, but it was in July or August.

Senator YOUNG of North Dakota. When did you return?

Mr. COREY. In July 1954.

Senator YOUNG of North Dakota. As a Foreign Agricultural Service employee?

Mr. COREY. That is right.

Senator YOUNG of North Dakota. Did that require civil service status?

Mr. COREY. Yes, sir.

Senator YOUNG of North Dakota. The position you held in Portland as director of Commodity Stabilization Service required civil service status?

Mr. COREY. Yes, sir.

Senator YOUNG of North Dakota. This was a civil service appointment, then?

Mr. COREY. That is right.

Senator YOUNG of North Dakota. Is there any requirement in civil service regulations that would prohibit you from holding stocks in some concerns doing business with the Department of Agriculture? Mr. COREY. There has never been any request of me, Senator, for any listing of my interest in anything.

Senator YOUNG of North Dakota. Could a Secretary of Agriculture appoint anyone but a civil service anyone except one who had civil service status—as a director of an office like this one in Portland?

Mr. COREY. That, Senator, is a question I think should be directed to somebody else, because I don't know that one.

Senator YOUNG of North Dakota. Did someone approach you to take this job, or did you ask someone for it?

Mr. COREY. In the latter part of 1954, I was in Foreign Agriculture Service, and spent about 3 months of it in Europe on a trade study, and when I returned to the States, I learned that Mr. Walter John

son, the previous director, had resigned, and inasmuch as that job is one that I held before, and it was home to me, I made application for it.

Senator YOUNG of North Dakota. Do you own stock in any other company doing business with the Department of Agriculture, particularly in the field of storing grain or handling grain?

Mr. ČOREY. Yes. I have owned stock in Archer-Daniels-Midland Co. since 1938.

Senator YOUNG of North Dakota. In any other company?

Mr. COREY. Colorado Milling & Elevator Co.

Senator YOUNG of North Dakota. How long have you held that? Mr. COREY. Well, I would have to look at my records, but I have held it for a long time.

Senator YOUNG of North Dakota. Did you hold that, too, while you were working under Secretary of Agriculture Wallace, Secretary Wickard, Secretary Anderson?

Mr. COREY. No, I didn't-I didn't hold it that far back. I did own stock in Archer-Daniels, though, at that time. I did own the CME stock when I was down here in Washington in the Office of Price Stabilization.

Senator YOUNG of North Dakota. Did anyone during all the time you were in the Department of Agriculture, any superior officer, ever ask you whether you held stock in a company doing business with the Department?

Mr. COREY. This document here, Senator, dated January 14-
Senator SYMINGTON. What year?

Mr. COREY. 1960-encloses the form on which all the employees of certain grades were required to list their stockholdings or whatever their investments might be, and this is the first time in my Government experience that I have ever been asked to spell out what my investments or my interests might be.

Senator SYMINGTON. Now, Mr. Corey-will the Senator yield— you are under oath and in your own interest I want you to be sure you are right in what you just said. You are confident of that, are you?

Mr. COREY. To the best of my knowledge, Senator.

Senator SYMINGTON. Thank you, sir.

Senator PROXMIRE. If the Senator would yield on that same point; have you ever been instructed in any way, either verbally or in writing, as to your conduct with respect to outside interests?

Mr. COREY. I don't recollect it, Senator.

Senator PROXMIRE. You have no recollection?

Mr. COREY. That is right.

Senator COOPER. Would the Senator yield on that point?

Senator SYMINGTON. If the Senator will yield, I just want to make

one more point.

You say you owned stock back in 1938?

Mr. COREY. Yes, sir.

Senator SYMINGTON. What was the stock?

Mr. COREY. Archer-Daniels-Midland Co.

Senator SYMINGTON. Was that on the big board?

Mr. COREY. It has been on the big board all the time.

Senator SYMINGTON. How many shares of stock are out?

Mr. COREY. 1,700,000.

Senator SYMINGTON. And you own how many shares of the stock of the 1,700,000.

Mr. COREY. Initially I owned 25. At one time I owned as many as 300. Presently I-in the last-I don't remember when I sold 125, but for quite some time I have had an interest of 175.

Senator SYMINGTON. What was your previous position in 1946, in the Department of Agriculture?

Mr. COREY. Up until 1946 I occupied the same position I did up until January 22. I don't recall what the title of it was at that time. Senator SYMINGTON. In 1946?

Mr. COREY. That is right; from 1940 to 1946.

Senator SYMINGTON. What was your position?

Mr. COREY. I had the same duties then that I had now except I don't recall what the title on the job was because they changed titles and grades and I don't recall what the title was.

Senator SYMINGTON. Between 1940 and 1946 you owned this stock? Mr. COREY. That is right.

Senator SYMINGTON. Did you ever tell anybody you had this stock? Mr. COREY. Nobody asked me.

Senator SYMINGTON. As we figure it out, you were making a salary in recent years of about $14,000 a year, is that about right?

Mr. COREY. That is about right.

Senator SYMINGTON. And your outside income, as a result of these additional participations, was $23,500 a year; was that about right? Mr. COREY. Well, not having-I will accept it in round figures. Senator SYMINGTON. And in the last year the staff worked out that the profits of this company, of Three State Warehouse, which you had a one-third interest in, from Government grain storage, was 117 percent of costs; is that about right?

Mr. COREY. I can't speak for the Department figures on it, because I never directed my attention to it and the books of the company I have never seen.

Senator SYMINGTON. Senator Cooper?

Senator YOUNG of North Dakota. I wasn't through.

Senator SYMINGTON. I beg your pardon.

Senator YOUNG of North Dakota. You said you held stock in the Colorado Grain Co.?

Mr. COREY. Colorado Milling & Elevator Co.

Senator YOUNG of North Dakota. How long did you hold that stock?

Mr. COREY. Senator, I can't tell you offhand but I have owned it for a long time.

Senator YOUNG of North Dakota. How much?

Mr. COREY. At one time we owned 200 shares. Presently we own 100. When I say "we," I mean my wife and I.

Senator SYMINGTON. Excuse me, Senator. At 11 o'clock the Senate is going to meet, as I understand it. There is a member of the Department of Agriculture here who would like to make a statement, is that correct?

Mr. GOOLD. I am available if you wish.

Senator SYMINGTON. I don't wish it unless you want it.
Mr. GOOLD. I would like to make a statement.