Exhibit 9-Letter from W. H. Hingher, special consultant, medical supply, Exhibit 12-Invitation, bid, and award, contract No. GS-03P-287 (EC), Special program contract terms, revised July 15, 1949. Telegram, Bureau of Federal Supply, January 19, 1953. General conditions for special program contracts, revised November Exhibit 13 Letter from F. C. Sinton, acting chief, New York district, Retort Pharmaceutical Co., Inc., to S. G. Morgan, December 10, 1952- Exhibit 14-Letter from F. C. Sinton, acting chief, New York district, Retort Pharmaceutical Co., Inc., to S. G. Morgan, March 27, 1953---- Exhibit 15-Letter from F. C. Sinton, acting chief, New York district, Exhibit 16-Memorandum to E. Keith, Chief, Examinations Branch, Page 25 131 27 Exhibit 17-Memorandum to William H. Hingher, July 8, 1953. Exhibit 18-Staff-prepared schedule showing dates contracts were closed, Exhibit 19-Letter from Nathan F. Fuller, General Services Administra- 54 56 ·Exhibit 20-Memorandum from Chief, Inspection Branch, Section 2, to Exhibit 21-Memorandum re contracts GS-03P-65 (EC), GS-03P-287 Exhibit 22-General Services Administration procurement, fiscal year Exhibit 23-Schedule of tabulation of bids on hexylresorcinal contracts. Exhibit 24-General Services Administration requisition No. ECA-93-370, H201-2201-2, amendment No. 1 to contract GS-OOP-16149 (EC) Exhibit 25-Airgram from J. O. Raffety, and Lt. G. F. Pollock, Saigon mission, to Foreign Operations Administration, Washington, D. C., Exhibit 26-Requisition No. ECA-95-370-00-H201-2229, to General 36 Exhibit 27-Requisition No. MSA-95-370-00-202-2273, to General 39 Letters from Retort Pharmaceutical_Co., Inc., to General Services 1952 Exhibit 28-Telegram from J. W. Peed, Federal Supply Service, General Exhibit 29B-Letter from J. W. Peed, contracting officer, Federal Supply Exhibit 30-Letter from F. C. Sinton, acting chief, New York district, Exhibit 31-Letter from Murray Miller, Retort Pharmaceutical Co., Inc., to United States Food and Drug Adminisgrator, New York, N. Y., Exhibit 32-Letter from Murray Miller, vice president, Retort Pharma- Exhibit 33-Hexylresorcinol (pill-shaped tablets), test procedure. 47 55 57 58 76 78 FOREIGN AID PROCUREMENT: HEXYLRESORCINOL PURCHASES FOR INDOCHINA THURSDAY, JULY 22, 1954 HOUSE OF REPRESENTATIVES, INTERNATIONAL OPERATIONS SUBCOMMITTEE OF THE The subcommittee met, pursuant to call, in room 1501, New House Office Building, at 10 o'clock, a. m., Hon. Charles B. Brownson, chairman, presiding. Mr. BROWNSON. The meeting of the International Operations Subcommittee will come to order. On June 17, 18, and 23 of this year the Subcommittee on International Operations held hearings concerning the extent and effectiveness of the end-use controls maintained by the Foreign Operations Administration in administering the nonmilitary phases of our foreign-aid program. The basic purpose of Foreign Operations Administration's system is of course to insure that the millions of dollars of United States financed commodities shipped abroad annually are satisfactory in quantity and quality for the purposes intended, and actually used abroad for the purposes intended, and are otherwise handled in accordance with existing legislation, Foreign Operations Administration regulations, and intergovernment agreements. During the hearings witnesses for Foreign Operations Administration reviewed several cases which were indicated as exemplary of some of the problems encountered by Foreign Operations Administration in its efforts to effectively police its worldwide program. One of these cases involved the financing in late 1951 and early 1952 of some 3 million vials of hexylresorcinol pills, or a total of 15 million pills, which were purchased from the Retort Pharmaceutical Co., of New York, at a cost of approximately $400,000 for use in Indochina in the correction of round- and hook-worm conditions. Only a small portion of the pills, however, was actually used. The large bulk of them was left unused in Indochina warehouses where we understand they still remain. According to Foreign Operations Administration witnesses the pills were to have been manufactured with a tough gelatin coating to prevent burning the mouths and throats of patients. Testimony was received, however, that the pills as accepted and delivered abroad had inferior coatings in this respect; moreover, with the passage of time the coatings are actually absorbing the hexylresorcinol itself. In view of the fact that the pills costing $400,000 are apparently still rotting in warehouses in Indochina and in consideration of the 1 assigned jurisdiction of this subcommittee to examine overseas operations and expenditures of the Government, other than military, from the standpoints of efficiency and economy, the subcommittee voted to conduct a full investigation of this particular case. Certain facts have already been established in the earlier hearings. FOA financed this project and specified the proper coating for the pills. The actual buying, however, was done through the General Services Administration at the request of FOA. Before the pills were shipped to Indochina, GSA had them inspected and analyzed by the Food and Drug Administration. It was not determined whether Food and Drug examined them for the toughness of the coating. The General Services Administration, the Food and Drug Administration, and the Retort Pharmaceutical Co. were not represented at our previous hearings, and it was not possible at that time to definitely fix responsibility for the manner in which this procurement was handled. We hope the testimony we are to receive today will definitely disclose why this program failed with a resulting loss to the Government and to the American taxpayer. The first witness we will hear today will be Dr. Lewis C. Robbins, Chief, Near East, Africa, and South Asia Branch of the Public Health Division of FOA. Is Dr. Robbins here? Dr. ROBBINS. Yes. Mr. BROWNSON. I think, Doctor, if you would step up to the other side of the table, facing the reporter, it would probably enable your testimony to be recorded most advantageously. Will you stand and be sworn, please? You solemnly swear that the testimony you will give in this hearing will be the truth, the whole truth, and nothing but the truth, so help you God? Dr. ROBBINS. I do. Mr. BROWNSON. Be seated, please, and give your name and official title to the reporter. TESTIMONY OF DR. LEWIS C. ROBBINS, CHIEF, NEAR EAST, AFRICA, AND SOUTH ASIA BRANCH, PUBLIC HEALTH DIVISION, FOREIGN OPERATIONS ADMINISTRATION Dr. ROBBINS. My name is Dr. Lewis C. Robbins, and I am Chief of the Near East, Africa, and South Asia Branch of the Public Health Division, and I am acting as the Far East Branch chief at the moment. Mr. BROWNSON. Doctor, would you give us some background data about yourself, and particularly, about the period which we are considering, from August 1950 until September 1, 1952? Dr. ROBBINS. Yes. I happened to be assigned to Indochina at this time, and arrived on August 15, 1950, as Chief of the Public Health Division. One of our mission jobs was to find out how we could strengthen the Vietnamese Government services, but I think a more important aspect at the time was to help this Government and specifically the Ministry of Health, provide to the people effective services, so that they would be receiving aid for their real needs, and would not stay on the fence or go over to the Viet Minh side, but would stay on the Vietnamese side. The military situation, as you remember, was deteriorating, and it was about this time-about in September of 1950, a month after I arrived that a key post up on the Chinese border fell, and there was a great deal of concern at the time as to just how long we would stay. So, there was a great deal of interest in getting support and help to the people. One of the directors which we had from Washington came from Mr. Griffin, who was the Far East Chief of ECA, at the time, and I remember a phrase that he gave us: "Develop programs that will affect 1 million people at a crack;" he wanted to get services to the people so that they could be influenced. We were not especially interested in the city people, but in the villagers, because they comprise 80 percent of the population. Eighty percent of the people there live in the villages. We spent the first 6 months in getting a couple of programs started as, for instance, a program on malaria, but largely our time was spent in the survey of the needs and trying to find out what the chief problems were. Out of this, and especially from Dr. Thin, medical chief of Haiphong, and Dr. Choumara, French chief of the PMS or Mountain Region, they recommended that we find some way to get medical care to the villagers, and provide some kind of simple medical care. One of the desires was to provide safe but effective drugs for common conditions-conditions that a first-aider could be quickly trained to give. We developed a pilot program with the Ministry of Health to find out how these first-aid stations would do, and these were developed in five villages. This is where our hexylresorcinol program came in. We wanted to treat roundworms, and hookworms. We found that 80 percent of the villagers had either roundworms or hookworms or both of them. So, 80 percent of the people were affected by worms which could be influenced by a vermifuge. Since hexylresorcinol costs so much, about 30 cents a treatment at the time, we chose instead tetrachlorethylene and oil of chenopodium. We knew it was somewhat dangerous at the time, but administered properly it should not be dangerous. However, we tried it in five villages. We had trouble in two cases. We are not sure what caused it, but there were two deaths, and because of the possibility that it could have been the treatments, we immediately discontinued this tetrachlorethylene and oil of chenopodium. Even though it was cheaper, we left it out. However, we had to have an impact in our program. This was about in April 1951, that we discontinued the use of oil of chenopodium and tetrachlorethylene. We felt we had a wonderful possibility here for an impact program of reaching the people with effective services. So, we continued to talk about hexylresorcinol and, finally, it was reconsidered when more funds were available, in July. There was a conference in Bangkok in August of 1951 at which time we talked to the Public Health people from Washington, and Mr. Higher, about the possibility of using hexylresorcinol. Mr. Hingher brought out the fact that now hexylresorcinol could be purchased more cheaply, which greatly elated us, and we went back and immediately ordered hexylresorcinol. That was on August 13. The Bangkok conference was in August-the week of August 5-and on August 13, 1951, we asked our procurement people in STEM in the mission to purchase it. I think it is well to point out that we were ordering from the Army catalog the crystoids, which is a Sharp & Dohme product, and it was this Sharp & Dohme product that we thought we would get, because that is actually what we requested. One year later the first shipment of hexylresorcinol arrived. That was on July 22 of 1952. At the same time that the stuff arrived, or 2 days later, we got a letter from Mr. Hingher saying to supervise the administration of this hexylresorcinol carefully because the drug could cause mouth burns. Then, my replacement arrived on September-well, he arrived on August 12 and I turned over my duties on September 1. So far as I was personally concerned, I stayed with him at Saigon until October 1. After that I was out of the picture, and do not have a personal knowledge of what happened. Mr. BROWNSON. Doctor, here are two exhibits, Exhibit 1 and Exhibit 2, in the subcommittee's hearings. Exhibit 1 is a photostat of contract No. GSOOP-16154-(c) between the General Services Administration and the Retort Pharmaceutical Co., dated November 23, 1951, for medicinal and pharmaceutical preparations including 1.5 million vials containing 5 hexylresorcinol pills each, at 14.2 cents a vial, or a total of $213,000. Exhibit 2 is a copy of Contract No. GSOOP-16436, dated February 27, 1952, between the General Services Administration and the Retort Pharmaceutical Co., Inc., for pharmaceutical preparations, including 1.5 million vials each containing 5 hexylresorcinol pills, at 11.75 cents each, for a total of $176,250. (These exhibits are set forth in the appendix on pp. 108-131.) Can you identify those documents as the orders resulting from this request which you made? Dr. ROBBINS. Yes, sir; that is right. Mr. BROWNSON. According to your testimony, you were Director of Public Health of the MSA mission in Indochina on November 23, 1951, when the Government contracted to purchase these pills; is that correct? Dr. ROBBINS. That is right. Mr. BROWNSON. To the best of your recollection and any data which you may have brought with you in addition to the discussion which you have already given us, can you indicate the basis on which 1.5 million vials were justified, and how you planned to dispense them? Dr. ROBBINS. Yes. We planned to establish 5,000 first-aid stations in Indochina. That included Vietnam, Laos, and Cambodia. We were counting on an expansion of the secure area. We were counting on French victories to expand the liberated area and when those did not materialize, actually we only established about 2,000 first-aid stations, but the 5,000 first-aid stations would have provided, in a year, hexylresorcinol cap |