cluded that no purpose would be served, because we approved the certificate as to legal sufficiency. Mr. MALETZ. Mr. Moody, I show you a document, a photostatic copy of a document, and ask you whether you can identify that. Mr. MOODY. I know what it is. I can't identify it, because I have never seen the original. But I know what it is. Mr. MALETZ. Would you explain to the committee what it is? Mr. MOODY. This is a memorandum to one of the lawyers in the New York office dated July 15, 1955, and it is signed in the first name of the regional counsel of our New York office. Mr. MALETZ. Who would that be? Mr. MOODY. His name is Eugene Brennan. The lawyer to whom it is addressed is Paul Cirillo, although only his first name is used. In the notation at the top it says, "346 Broadway." Mr. MALETZ. What does the document say, Mr. Moody? Mr. MOODY. It says: PAUL: Spoke to J. Moody re this. He is going to General Accounting Office for an informal opinion as to justification for negotiation. because of outside interest and wants to be right. He thinks 9 of 203-C would be the exception, not and there is a word in quotes that I can't read. He will call you about it. Considers it a hot case There is an error in that citation. It is 9 of 302-C, and not 203. Mr. MALETZ. Did you tell Mr. Brennan in essence that this was a hot case? Mr. MOODY. Well, Mr. Maletz, that is Mr. Brennan's language, not mine. Mr. MALETZ. Surely. Mr. MOODY. This case received an awful lot of attention in the Washington office, because we were in the space; here it was 15 days after our rights to occupy had expired, and unless we were within our legal rights to make a determination to negotiate, we did not seem to be even close to formalizing our right to stay there. There was a lot of urgency about the case, and I unquestionably so indicated to Mr. Brennan, although he was as well aware of it as I. Mr. MALETZ. Now, do you recall stating substantially that this was a hot case because of outside interests? Mr. MOODY. I don't recall that, sir; no. Mr. MALETZ. Well, was it a hot case? Mr. MOODY. It was a hot case, in vernacular, but the pressure on me came from our Public Buildings people, who wanted to get this thing straightened out right here Mr. MALETZ. Do you have any idea as to what the outside interests referred to? Mr. MOODY. I received a telephone call on this case from Mr. Blumenthal. Mr. MALETZ. Mr. Morton Blumenthal? Mr. MOODY. I think it was, sir. Mr. MALETZ. And what was the nature of that call? Mr. MOODY. Well, by the time Mr. Blumenthal called me, I had probably had it on my desk in an effort to resolve this problem for as long as I am guessing now-8 or 10 days, and I am sure Mr. Blumenthal had been advised by either our Washington people or our New York people or someone with whom he had been in contact that I was the source of its delay, and the reason for it. And he called me on the telephone to ascertain what the problem was, and I told him precisely what the problem was. Mr. MALETZ. Well, let me ask you this. Did the fact that Mr. Blumenthal called make this a hot case? Mr. MOODY. The fact that the owner's representative called made it a hot case. The fact that it was Mr. Blumenthal meant absolutely nothing to me. Mr. MALETZ. You had no relationship with Mr. Blumenthal whatsoever? Mr. MOODY. None whatever. Mr. MALETZ. Did Mr. Strobel or Mr. Mansure ever discuss this case with you? Mr. MOODY. No, sir. Mr. MALETZ. Did you ever have any discussion with anybody else in GSA representing Mr. Strobel or Mr. Mansure about this case? Mr. MOODY. A number of people in the Public Buildings Service called me about this case. I was advised by one of them that Mr. Blumenthal had called him. I believe he had come to his office about it. Mr. MALETZ. Who was that, please? Mr. MOODY. That was Mr. Strawser, who is the administrative officer of Public Buildings Service. Mr. MALETZ. What did he say to you, sir? Mr. MOODY. Mr. Strawser? Mr. MALETZ. What did he say to you, sir? Mr. MOODY. I don't remember precisely, but that Mr. Blumenthal had been to his office on this case and was anxious to hurry up and get it cleaned up and get some decision made. Mr. MALETZ. I have no further questions, Mr. Chairman. Mr. FINE. No questions. Mr. KEATING. No questions. The CHAIRMAN (presiding). Is Mr. Rhind here? Will you raise your right hand? Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God? Mr. RHIND. I do. TESTIMONY OF HAROLD RHIND, ATTORNEY, CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY Mr. MALETZ. Mr. Rhind, would you please give the reporter your name and address? Mr. RHIND. Harold Rhind, attorney, Corps of Engineers. Mr. MALETZ. Would your speak up, sir? Mr. RHIND. Attorney, Corps of Engineers. Mr. MALETZ. You are employed by the Corps of Engineers; are you? Mr. RHIND. Yes. Mr. MALETZ. And what position do you occupy? Mr. RHIND. Attorney in the Legal Division. Mr. MALETZ. Mr. Rhind, are you familiar with a contract entered into on April 22, 1954, between the Corps of Engineers and the firm of Strobel & Salzman? Mr. RHIND. I am. Mr. MALETZ. Do you know when this contract was negotiated? Mr. RHIND. I do not know exactly when it was negotiated, no. Mr. MALETZ. I show you a document entitled, "Notes on Strobel & Salzman contracts," and ask you to examine it. I show you this document solely for the purpose of refreshing your recollection as to when this contract was negotiated. Mr. RHIND. My knowledge of the negotiation is that it was completed about the first of April. The exact date at which the negotiation was handled, I only know from this report, or other papers of that nature. Mr. MALETZ. You say about the first of April? Mr. RHIND. Yes. Mr. MALETZ. Do you know when this contract was executed? Mr. RHIND. Yes. It was executed on—may I look at the record? Mr. MALETZ. All right, sir. Mr. RHIND. It was executed on the part of the Government about May 3, and on the part of the contract or about May 17. Mr. MALETZ. That is 1954? Mr. RHIND. 1954. Mr. MALETZ. Now, was the Corps of Engineers aware of the fact that when this contract was executed Mr. Strobel was a Government employee? Mr. RHIND. Not to my knowledge. Mr. MALETZ. Now, if the Corps of Engineers knew that Mr. Strobel was employed by the Government, would it have entered into this contract with Strobel & Salzman? Mr. RHIND. I believe the answer to that is that we would not have. Mr. MALETZ. What was the amount of fee that Strobel & Salzman was to obtain? Mr. RHIND. The contract figure is $71,050. Mr. MALETZ. Now, you say if the Corps of Engineers had known that Mr. Strobel was a Government employee, it would not have executed the contract; and why is that? Mr. RHIND. Because it is the policy of the Corps of Engineers not to deal with Government employees under contracts. Mr. MALETZ. How long has that policy been in effect? Mr. RHIND. I would say that that policy has been in effect about as long as I have been associated with the Corps of Engineers, which is since 1943. Mr. MALETZ. Since when, sir? Mr. RHIND. 1943. Mr. MALETZ. Since 1943. Now, Mr. Rhind, when did the Corps of Engineers discover that it was as of April 1, 1954, that Mr. Strobel assumed a Government position? Mr. RHIND. At a meeting which you and I attended in Mr. Sacks' office, at which time you told us that he had taken a position as fulltime consultant, and that meeting was held on September 20. Mr. MALENTZ. September the 20th? Mr. RHIND. Of this year. Mr. MALETZ. Now, if the Corps of Engineers had known immediately after it signed the contract that Mr. Strobel was a Government employee, what action would the Corps of Engineers have taken? Mr. RHIND. I believe I should pass that question, Mr. Maletz, to Mr. Zackrison, as the man that would probably have made that decision or would have had more to do with that decision than I. Mr. MALETZ. Is Mr. Zackrison here? Mr. RHIND. Yes. The CHAIRMAN. Will you come forward, Mr. Zackrison? You might raise your right hand, please. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God? Mr. ZACKRISON. I do, sir. TESTIMONY OF HARRY B. ZACKRISON, CHIEF, ENGINEERING DIVISION, CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY Mr. MALETZ. Just give your name and your affiliation to the stenographer. Mr. ZACKRISON. My name is Harry B. Zackrison. I am Chief of the Engineering Division, Corps of Engineers. The CHAIRMAN. You have heard the question as propounded to your colleague, and that he asked that you might answer. Mr. ZACKRISON. I would like to have the question repeated. (Question read.) Mr. ZACKRISON. There are really two parts to that question, I believe. First, if the Corps of Engineers had known that Mr. Strobel was a consultant only and had no administrative or command responsibility in the Public Administration, that would be one answer. In that case, I do not believe we would have taken any action, provided that the delay as a result of negotiation might have been of importance in this particular project, which it was. I believe that in the circumstances of the delay inherent in selecting a new architect-engineer, in renegotiation, which would have involved a delay of 3 to 4 to 5 weeks, that if all we had known was that Mr. Strobel was a consultant to the General Services Administration, in that case I believe we would probably have continued the contract. However, that would have been subject to discussion first, of course, with the Legal Division as to the legality of the question; two, with my superior, General Tulley. Mr. MALETZ. Now, suppose the Corps of Engineers had known that Mr. Strobel was a full-time consultant and was going to occupy that position for several months preparatory to assuming a post as Commissioner of Public Buildings; what action would the corps have taken? Mr. ZACKRISON. The answer I first gave is also applicable here in the event that delay would be serious. We would have given a much closer look, of course, to the circumstances. We would first of all determine the legality. No. 2, we would have gone to the Office of the Chief of the Transportation Corps to determine the need for the facilities which the firm of Strobel & Salzman were designing. We would have also reviewed the need for Mr. Strobel's services in connection with this particular contract. Mr. MALETZ. I take it, Mr. Zackrison, your answer would be the same as Mr. Rhind's, that if you had known of Mr. Strobel's Govern ment position beforehand, the corps would not have signed the contract; is that correct? Mr. ZACKRISON. I cannot take that unequivocal stand; no, sir. I would have examined first, as I say, the legality; No. 2, the need for the conclusion or the furnishing of the services by Strobel & Salzman. In the event that that was of paramount interest to the Government, I believe we would have taken that course. On the other hand, if there were no need for these services within a given time limit, that we would have reconsidered. Mr. MALETZ. Now, Mr. Rhind indicated that it is the policy of the Corps of Engineers not to do business with Government employees. Mr. ZACKRISON. I believe Mr. Rhind is in error in that respect. It is the policy of the Corps of Engineers not to do business with any Corps of Engineers employees. There has been no stated policy, so far as I know, restricting the choice of a Government employee. As a matter of fact, it would have been subject to, let us say, discussion and determination prior to our selection of a Government employee. But this case has never come up before to my knowledge. Mr. MALETZ. I see. Now, if you had known that Mr. Strobel was a Government employee, would that have been kind of a red light to you to check this matter very carefully? Mr. ZACKRISON. It certainly would. Mr. MALETZ. And would you have had considerable doubt about signing a contract? Mr. FINE. I submit that he has answered the question. Mr. MALETZ. I think that is right. Mr. FINE. He can answer the question many ways. Mr. MALETZ. Now, Mr. Rhind, did you prepare a memorandum summarizing the events in connection with the Strobel & Salzman hangar contract, which is the one we are talking about, the Strobel & Salzman contract with the Corps of Engineers? Mr. RHIND. Did I prepare a memorandum? Mr. MALETZ. Yes. Mr. RHIND. Not that I recall. Mr. MALETZ. I show you a three-page document and ask you whether you can identify it. Mr. RHIND. I recognize this document. I did not prepare it. Mr. MALETZ. Who prepared it? Mr. RHIND. I believe Mr. Williams, in the Engineering Division, prepared this. Mr. MALETZ. Is Mr. Williams here? Mr. ZACKRISON. Yes. Mr. SACKS. Do you want him called? Mr. MALETZ. Mr. Chairman? Mr. SACKS. Do you want him? Mr. FINE. Will you raise your right hand, please? The CHAIRMAN. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God? Mr. WILLIAMS. I do. |