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RED TAPE-INQUIRING INTO DELAYS AND EXCESSIVE

PAPERWORK IN ADMINISTRATION OF PUBLIC WORKS PROGRAMS

WEDNESDAY, JUNE 23. 1971

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT,
OF THE COMMITTEE ON PUBLIC WORKS,

Washington, D.O. The subcommittee met at 10:20, a.m., pursuant to recess, in room 2253, Rayburn House Office Building, Hon. James C. Wright (chairman of the subcommittee) presiding.

Mr. WRIGHT. The subcommittee will be in order. Our first witness for today is Mr. J. J. Gigoux, who is the executive director of the Southern Colorado Economic Development District.

Mr. Gigoux, will you come forward! The committee procedures require the taking of the oath prior to testimony. Therefore, do you solemnly swear that the testimony you will give before this subcommittee will be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. GIGOUX. I do.

STATEMENT OF J. J. (JIM) GIGOUX, EXECUTIVE DIRECTOR,

SOUTHERN COLORADO ECONOMIC DEVELOPMENT DISTRICT

Mr. WRIGHT. The chairman might state that we have had the opportunity to meet Mr. Gigoux on previous occasions, and have been very much impressed by his contributions to the work of the Southern Oklahoma Economic Development District program; now he is in southern Colorado as executive director of the economic development district. We are glad to have you, Mr. Gigoux, and you may proceed in any fashion you desire.

Mr. GIGOUX. I thought it was going to be an honor to be requested to appear before this subcommittee until I looked around and saw all the people sitting behind my back. Now I view it with mixed emotions. It reminds me of a 17-year-old girl who had been admonished by her mother to be back home by 10 o'clock, and who came in at 2 o'clock with the Gideon Bible under her arm. So I view this somewhat with the same trepidation.

Mr. WRIGHT. Those who sit behind you are the administrators of the program with which you work, I understand.

May I suggest, in order that the witnesses might understand, there begins at 10:30 an executive session of the full committee, and some of the members may be leaving. If they do, it is not because they are disinterested in what is being said.

I hope you will all understand, and I hope that the members, at the conclusion of the executive session, if it does not take all morning, will be able to come back.

Go right ahead, Mr. Gigoux.

Mr. GIGOUX. Although my board of directors approved my appearance before this committee, I want to make it explicitly clear that the statements I will be making today and the testimony that I will be giving is strictly that of Jim Gigoux, and my comments reflect my own personal assessment and evaluation, opinions and conclusions, based on my 5 years' experience as an executive director.

I refer to myself as a hired gun, because I feel that is what we are. We work for the local cities, counties, private organizations, and business entrepreneurs of the area which we serve. I have had the pleasure of serving with two different multicounty organizations, one the 10county SODA in Oklahoma. I have been with the EDA program since its early inception. I now serve as the director of the 19-county area in southern Colorado which encompasses a 33,000 square mile area in southern Colorado.

I personally believe that the EDA program is one of the best examples of creative, responsive, and participatory federalism to come out of the Congress in recent decades. It has given the rural decaying and stagnant areas of America the opportunity through the planning assistance program to hire people like myself who have some professional expertise to work with them in trying to look collectively at their mutual problems.

I feel the initial success of the economic development district program, over and above a lot of the Federal programs that have come down the pike, has been from its willingness to transfer moneys to a local board of directors who then in turn have the opportunity to hire the professional staff at their discretion, rather than him being a Federal civil service employee.

This board then also has the opportunity and the responsibility of determining its own problems, looking at its own goals, and aspirations, and initiation of programs and projects to rectify this with a minimum of Federal bureaucratic meddling. I think that this has been a success of the EDD program.

Since 1966 when I became associated with the program we have seen an increasing proliferation of requirements, no-no's, qualifications, reports, et cetera, and this seems to be the coming of age of a particular Federal program.

Contrary to and the antithesis of good bourbon, the older it gets, it seems like the worse it gets as we get into the Federal programs.

So, my comments today would not be confined to, although this is more or less concerned with EDA. I have several documents which I will submit for the record which indicate the same type of bureaucratic redtape involved with FAA, HUD projects, et cetera.

So, my comments and biases have been generated by my work with the local grassroots. I think this is what has made our country great, and this is the area where we have to become concerned. The comments are not meant as a carte blanc indictment of any Federal agency, and the factors here are the same as that of a marital dispute, that there are always two sides to every story, and as you walk around the other

side of the table and look at it from a program administration context versus our own concept from the local grassroots level, we have to moderate some of our considerations. Predicated on this are the comments I would like to have you consider in the things that I will try to get into.

I feel there are six or seven different types of bureaucratic redtape, and I categorize them as the following:

One, the multilevel massaging, and I think this comes into effect when we look at the regional level, the Washington level. They are massaged at the local level, they are massaged at the regional level, and they are massaged at the Washington level.

Mr. WRIGHT. Mr. Gigoux, do you mean that a local applicant for a grant or a business loan is massaged?

Mr. Gigoux. This is my feeling, yes. It has to go through the whole process of clearance, and then it is shipped off to another level where it is remassaged on the same format. I feel that this should be brought down, with some authority given to the local level.

The second category, which I think is the most flagrant category, I categorize as just inept bureaucratic bungling. I will try to give a few examples of some of these later on.

Mr. WRIGHT. The Chair just wants to be sure that we understand your meaning in reference to something being massaged. Is it the application that is massaged at these various levels? Mr. GIGOUX. This is my definition of it, yes.

Mr. WRIGHT. There were news stories recently about massage parlors in nearby communities, and some speculation as to what happened to the massagee following massage.

Mr. GIGOUX. I think it is apropos. (Laughter.] The third category I categorize as procrastination; just the unwillingness to take the bull by the horns, and make a decision, right or wrong, to proceed.

The fourth category is practical politics consideration, and I think there is very much concern with this. Walking around again to the other side of the table, as the program administrator faced with a limited financial program allocation, when he has to come before you gentlemen on the Hill for further appropriations, faced with the practical political considerations that he has to allocate those funds to those projects where he can get the biggest bang for the buck-he does have practical political considerations.

The fifth category I consider is partisan political considerations. You people as Congressmen and Senators up here do not escape a lot of the criticism in my opinion because I feel that in many instances the parties in politics have much more consideration on a particular project being funded than its economic reality or impact in an area. If the politics are right, the time frame and the red tape in some way can be out to a very short period. So, in this respect I blame a lot of it on the Congressmen and Senators for the partisan politics that are played when we are facing a life or death struggle down at the grass roots level.

The sixth category that I have come up with is legislative intent and/or authorization versus administrative policy. I think there are many examples of this particular type of bureaucratic red tape from

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the act itself. It is not bureaucratic redtape; it is policy decisions. As an example, we ran a survey in Huerfano County concerning the coal mine law that was written for the deep-shaft mines of West Virginia and Kentucky, a gaseous mine area. In Colorado we have slope mines. They do not have a gaseous condition, but yet these bureaucratic standards are applied uniformly across the United States, and as a result it has closed down all of the coal mines with the exception of CF & I Mine in Las Animas County.

In Huerfano County we found there will be a $750,000 one-time cost just to convert the homes in Huerfano County that are still using coal for heat and cooking. So this is going to have a significant impact on a redevelopment county. The bulk of the people who are still using coal for heat and cooking are the low income group, and the bulk of these families do not have the financial wherewithal to really get in and convert to a fuel that is going to cost them from 30 to 40 percent more.

So this is one example that I use where administrative policy and the act and the legislative intent, although it is not red tape per se, as viewed by the people at the local level it is red tape when it hits them, when they must conform with the uniform act that was written for some place else but is applied to the letter in that particular area.

The last category, which is intermingled-and a lot of these overlap—is just outright particular naivete. In this I feel there are three subcategories, from the people at the local level, the civil service employee, the lack of knowledge about a particular administrative policy, and the policies change.

VOTEC will be in this year, and about the time we get a VOTEC application, we will be told we are not funding these any more; so we are not kept abreast of administrative policy.

Mr. WRIGHT. By VOTEC you mean vocational technical training?

Mr. Giroux, Vocational technical training facility. I use this just as an example.

Another category--and I base this on my experience in Oklahomawhat is a good project in Oklahoma is not necessarily a good project in Colorado because of the difference in the types of incentives for an industrial plant to come in from the State tax incentives, et cetera.

We cannot compete in Colorado, because we have no industrial programs, with Arkansas, Oklahoma and Texas, but when we ship a project down, it seems as if it is evaluated on the same basis as a good project in Oklahoma, Arkansas, or Texas.

Tourism is a hard project to get funded, yet tourism is the largest industry in the State of Colorado, and I feel this is another example.

Mr. WRIGHT. If the Chair is not mistaken, there were some tourism projects funded in adjacent States Oklahoma, for example-and they were perhaps not very successful. Do you feel that this may have influenced the judgment of application evaluators and caused them to decline any assistance for tourist projects in Colorado?

Mr. Giroux. Yes, I think it is a carte blanc, and of course here again, walking back around on the other side of the table, from the program administrator standpoint, it is common knowledge that these are fiascos outright fiascos-in the economic return on the investment that has been made.

Mr. WRIGHT. You mean such as the ones in Oklahoma to which I referred?

Mr. Gigoux. Yes. So when the program administrator has to come back to you people here on the Hill for further appropriations-and this is common knowledge, they modify their policy decisions. But I think in the type of program we are looking at we have to look at each individual project as an individual project, and not as a stereotype.

This is not redtape per se, but here again when it comes back to our local grassroots people, they do view it as bureaucratic red tape.

Mr. WRIGHT. I think what you are saying then is that there ought to be a greater degree of flexibility, and the capability to evaluate whether something is going to work in one situation where it did not work in another.

Mr. Gigoux. That is right. Mr. WRIGHT. Colorado, for example, is a tourist-oriented State. Mr. GIGOUX. Yes. Mr. WRIGHT. Oklahoma is not. Mr. Gigoux. They are trying to get into tourism in Oklahoma, whereas in Colorado we are trying to accommodate tourism.

Mr. WRIGHT. Therefore, you feel naturally a tourist-related enterprise in Colorado would already have a market that it could serve, whereas one in Oklahoma would be groping for a market that does not exist.

Mr. Giroux. Yes, but here again, each project should be evaluated on the merits of its particular application.

One example that I will give of what I consider just inept administrative bureaucratic bungling is an example of our application for a continuation grant. Our fiscal year ends on February 1.

Mr. WRIGHT. This is a continuation grant for the Economic Development District ?

Mr. Ĝigoux. For the economic development district planning assistance program. It was submitted on November 17, 1970, requesting, and accepting the 10-percent cut. Our approval was received on March 24, a month and 24 days after our fiscal year began.

Now then, due to a situation that I inherited when I took the job, I had requested an audit by EDA of our financial situation, which we are in the prospect of ratifying, but I wanted the record clear for my own background to proceed with.

Possibly they were awaiting the result of this audit, but the thing that concerns me, from November 17 to March 24, our files reflect no correspondence indicating that our application should have been amended for increase or decrease, or whatever.

We finally received our fourth quarterly payment on April 21, 9 days before the end of our first quarter which began on February 1. Ordinarily we would have had to borrow money to operate on during this period, but due to the grace of Southern Colorado State College, with whom we are affiliated, we were able to operate without borrowing money during this interim.

I am at a loss to know why this type of time span is needed when we cannot get anything back. My former Congressman, who is now House Speaker, when I was in Oklahoma-and I think Congressman Evans will reflect the same thing-—I do not believe in bugging our Congressmen for things we do not have to. I feel that we should not have to call upon our Congressmen to get things through like this where this is the third operational year of our grant. But finally I did have to call on

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