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Senator SYMINGTON. Just one thing I would like to ask, a question of Mr. Corey. At no time, verbally or in writing, have you ever received any instructions, directions, or consultation with any member of the Department of Agriculture incident to conflict of interest, is that correct?

Mr. COREY. That is right.

Mr. Chairman, now, I am not saying that these documents didn't come into the office.

Senator SYMINGTON. I understand that.
Mr. COREY. But they didn't come to my attention.

Senator SYMINGTON. And there was no personal letter or discussion with your superiors at any time incident to conflict of interest, is that right

Mr. COREY. That is right. Senator SYMINGTON. Mr. Goold, I notice in a newspaper article which I have where it says that after the resignation of the superior officer of Mr. Corey, that the matter was referred to the Department of Justice for further investigation. Do you know about that?

Mr. GOOLD. Yes; I do.
Senator SYMINGTON. Do you know what has happened to it?
Mr. Goold. No; I do not.

Senator SYMINGTON. Has there been any grand jury indictment brought against him?

Mr. GOOLD. I do not know.
Senator SYMINGTON. Has it ever been presented to a grand jury?
Mr. GOOLD. I do not know.
Senator SYMINGTON. Will you find out for the committee the status
of that situation?

Mr. Goold. Yes, sir; I shall be happy to.
Senator SYMINGTON. Senator Proxmire?
Senator PROXMIRE. Yes.

Now, the incident, the occasion for Mr. Corey taking action toward disposing of his holdings as he has testified is point 7 in the Code of Ethics which reads:

Engage in no business with the Government either directly or indirectly which is inconsistent with the conscientious performance of his governmental duties.

(The full text of the Code of Ethics will be found in the appendix at p. 430.)

Senator PROXMIRE. Now, I am asking you, Mr. Goold, if you can tell me if there has been any systematic, comprehensive attempt by the Department of Agriculture, anything discussed or contemplated, to interpret this which is vague language, is indefinite, so that these men who are in positions where they can get in trouble, in many cases innocently, can have some clear understanding of what they can do and cannot do.

Mr. Goold. Yes. I want to say this, Senator. The matter of conflict of interest has been under study in the Department of Agriculture for at least 2 years to my personal knowledge.

Senator SYMINGTON. Will the Senator yield? Isn't it true when the House committee asked of the Commodity Credit Corporation in June of 1958—the House committee under the able direction of Congressman Fountain of North Carolina--to check on possible outside interests, it was reported back to the House that an inquiry had been made and nothing found?

Mr. GOOLD. That is true.

Senator SYMINGTON. How can you correlate that with the statement made by Mr. Corey that nobody ever asked him anything about conflict of interest?

Mr. Goold. In response to the inquiry of Congressman Fountain the survey was confined to top officials in the Department of Agriculture in Washington, D.C., and I think if you want an opinion, I think that that was done at the Congressman's request.

Senator PROXMIRE. Now, if you would complete your answer to my question.

Mr. Gools. Yes, sir. The matter of conflict, as I say, has been under study for a long time in the Department of Agriculture. We realize that in a department that spends into the billions of dollars a year, there is ample room for conflicts to arise. We want to have the very best regulations we can.

First, we wanted to see what kind of a problem we had in this area of conflicts. Therefore, on the 31st day of December 1959, Mr. Benson approved a questionnaire to be sent to all employees in grade 13 and above, employees who may be in a position to influence the award of business. All those who had contracting or procurement authority and all those who enforced any regulation or granted any right to a business on behalf of the Federal Government, to execute a questionnaire which would state their pecuniary interests and would also state their outside employment.

We did this so that we could see what kind of a problem we had. We intend to move from this point on and develop as fine a standard as we can that all employees will be properly advised, that we in the Department will know that its responsibilities under this provision of law are properly administered, both for our own good and for the good of the public.

Senator PROXMIRE. If I might pursue this, in May of 1959, this notice was sent out.

Mr. Gooid. Yes, sir.

Senator PROXMIRE. Seven months later the Department of Agriculture sent out a questionnaire. Is that correct? ?

Mr. GOOLD. That is correct, yes.

Senator PROXMIRE. That is correct. And how long has it been since that

Mr. GOOLD. The agencies were instructed to have their surveys complete by February 1.

Senator PROXMIRE. Of this year!

Mr. Goold. Of this year. Due to the fact that there are roughly 15,000 employees involved, this survey is not 100 percent complete at this time. We are in the process right now, this very day, of completing the survey and evaluating the information that has come to our attention.

Senator PROXMIRE. Did you make the questionnaire available?
Mr. Goold. We can. I think we have, haven't we, Mr. Schmidt?
Mr. SCHMIDT. I believe so.
Mr. GOOLD. I think we have. If we haven't, we shall.

Senator SYMINGTON. At the request of the former distinguished Senator from Oregon who is representing the witness, we will recess the hearings. He is anxious to do something else, and I think we have about come to the end of this for the morning.

Mr. Counsel, will you see that Mr. Frank McGregor is called before this committee as soon as mutually convenient inasmuch as his name has been brought into the hearing by Mr. Corey, and will you see that Mr. Roberts—is that correct?

Mr. Goold. Yes, sir.

Senator SYMINGTON. Of the Department of Agriculture is also called before the committee as soon as mutually convenient, and the committee will now recess subject to the call of the Chair.

(Whereupon, at 11:15 a.m., the subcommittee recessed, subject to call of the Chair.)

INVESTIGATION OF GRAIN STORAGE OPERATIONS OF

THE COMMODITY CREDIT CORPORATION

WEDNESDAY, MARCH 23, 1960

U.S. SENATE,
SPECIAL INVESTIGATING SUBCOMMITTEE
OF THE COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D.C. The special subcommittee met, pursuant to call, at 10:30 a.m., in room 457, Old Senate Office Building, Senator Stuart Symington (chairman of the subcommittee) presiding:

Present: Senators Symington, Young of North Dakota, and Cooper.

Also present: Richard M. Schmidt, Jr., special counsel and George M. Kopecky, professional staff member.

Senator ŠYMINGTON. The committee will come to order.

At the last public hearing of this subcommittee on March 11, 1960, there was presented to this committee a factual story of corruption in Government.

We had before us evidence that one of the highest Department of Agriculture officials held a hidden interest in a company that was contracting with the Government. It was a clear-cut conflict of interest

case.

Almost as shocking as this official's behavior was the sworn testimony of the witness that he had never been instructed in regard to conflict of interest by his superiors in the Department of Agriculture.

The need for vigilance by the men directing our Governmental operations is so well established that it should need no further elaboration. But it appears the lesson needs to be told and retold.

The fact that a Department of Government, spending more than $5 billion a year, should not have taken all necessary steps to prevent conflict of interest among its high officials is a sad and serious defect; in either administrative competence, or administrative ethics, or both.

It was with this thought in mind that our subcommittee asked officials of the Department of Agriculture to appear before us to discuss actions, which would develop safeguards, in order to prevent further scandal of this type.

We have with us Mr. Ralph S. Roberts, Administrative Assistant Secretary, Department of Agriculture, and Mr. W. George Goold, Assistant Director of Personnel, in charge of Security and Investigations.

Mr. Counsel, who is your first witness?

Mr. SCHMIDT. Mr. Ralph S. Roberts, Administrative Assistant Secretary of Agriculture.

147

Mr. Chairman, the witnesses previously submitted to the committee a prepared statement which has been given to each member of the subcommittee.

Senator SYMINGTON. Mr. Roberts will be sworn, please. Mr. Goold, are you going to testify, also ?

Mr. GOOLD. I do not know, sir.

Senator SYMINGTON. Do you solemnly swear the information you give to this committee will be the truth, the whole truth and nothing but the truth, so help you God?

Mr. ROBERTS. I do.
Mr. GOOLD. I do.

TESTIMONY OF RALPH S. ROBERTS, ADMINISTRATIVE ASSISTANT

SECRETARY OF AGRICULTURE, AND W. GEORGE GOOLD, ASSISTANT DIRECTOR OF PERSONNEL, IN CHARGE OF SECURITY AND INVESTIGATIONS; ACCOMPANIED BY RALPH KOEBEL, ASSISTANT GENERAL COUNSEL; HOWARD PICKARD, ATTORNEY, OFFICE OF THE GENERAL COUNSEL; AND ERNEST C. BETTS, JR., DIRECTOR OF PERSONNEL

Senator SYMINGTON. Will you identify the people at the table with you.

Mr. ROBERTS. On my right, Mr. Chairman, is Ralph Koebel, General Counsel's Office, U.S. Department of Agriculture; on his right is Mr. Howard Pickard, General Counsel's Office on my left, Mr. Goold, of course, and on his left, Mr. Ernest C. Betts, Director of Personnel.

Senator SYMINGTON. Mr. Counsel, will you proceed.

Mr. SCHMIDT. Mr. Roberts, on March 11, 1960, Mr. Earl C. Corey testified before this subcommittee concerning a grain storage operation that he was conducting in Portland, Oreg., while serving as Director of the Portland Regional Office of the Commodity Stabilization Service.

Mr. Corey testified before the committee under oath that he was never given any instructions concerning conflict of interest by the Department of Agriculture.

What we would like to know is: Did the Department of Agriculture, to your knowledge, advise him of anything concerning conflicts of interest?

Mr. ROBERTS. Mr. Chairman, if I may, I would like first to say that I have a prepared statement which has been furnished to the committee.

Senator SYMINGTON. That is correct, Mr. Roberts.

I have read the statement and made it available to other members of the committee, and inasmuch as it is essentially a résumé of the rules and regulations of the Department, incident to this problem, it was suggested to you that we file it for the record and that you make it available to the press; as I understand it, that is satisfactory to you.

Mr. ROBERTS. That is, Mr. Chairman, if that is the wish of the committee.

Senator SYMINGTON. Thank you.

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