COMMITTEE ON GOVERNMENT OPERATIONS

SAM J. ERVIN, JR., North Carolina, Chairman JOHN L. MCCLELLAN, Arkansas

CHARLES H. PERCY, Illinois HENRY M. JACKSON, Washington

JACOB K. JAVITS, New York EDMUND S. MUSKIE, Maine

EDWARD J. GURNEY, Florida ABRAHAM RIBICOFF, Connecticut

WILLIAM V. ROTH, JR., Delaware LEE METCALF, Montana

BILL BROCK, Tennessee
JAMES B. ALLEN, Alabama
LAWTON CHILES, Florida
SAM NUNN, Georgia
WALTER D. HUDDLESTON, Kentucky

ROBERT BLAND SMITH, Jr., Chief Counsel and Staff Director

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

HENRY M. JACKSON, Washington, Chairman JOHN L. MCCLELLAN, Arkansas

CHARLES H. PERCY, Illinois ABRAHAM RIBICOFF, Connecticut

JACOB K. JAVITS, New York JAMES B. ALLEN, Alabama

EDWARD J. GURNEY, Florida WALTER D. HUDDLESTON, Kentucky WILLIAM V. ROTII, JR., Delaware SAM NUNN, Georgia

HOWARD J. FELDMAX, Chief Counsel
DOROTHY FOSDICK, Professional Staj Director
STUART M. STATLER, Chief Counsel to the Minority

RUTH YOUNG WATT, Chief Clerk
ROLAND L. CRANDALL, Staf Editor

CONTENTS

Page

I. Introduction...
II. Chronology--

The Kissinger directives.
Worldwide grain situation.
Russians short of grain...
The negotiating scenario..
Moscow visits planned.
More news of Soviet crop failures.
Briefing the White House.
April 1972 Moscow meetings -
Report to the President.---
Russia faces spring drought-
Reports of two farm journals.
Palmby, Russians meet again..
Palmby resignation.-
An early U.S. position..
The Moscow summit.
New farm reports from Russia.
Talks begin in Washington...
America's largest grain sale is completed.
Reports on Russian grain situation.
Grain agreement is announced..
July 8 press conference-
Russians buy more wheat.
Russian wheat production..
More Soviet wheat buys..
“The Wheat Situation" in August.

The wheat subsidy -
III. The conflict-of-interest issue.-

The role of Clarence Palmby -
The pertinent dates.
The Fribourg meetings..
Formulating U.S. grain policy -
The job description.-
The New York apartment-
Palmby goes to Moscow..
Palmby accepts job..
Russians arrive in Washington.
Palmby helps entertain Soviets.
Palmby attends negotiations.
Contracts are signed.
Credit approved.
Palmby defends his role.
Pulvermacher's employment..
Justice Department findings prior to hearings.
Basis for Justice's findings -
The crucial conflict-of-interest question.
Referral to Justice..
Final disposition by Justice.

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IV. The wheat subsidy --

History and operations -
Subsidies exceed $300 million...
The absence of studies and evaluations.
GAO evaluation of export subsidy program.

Subsidy bookings alarm Agriculture and OMB.
V. The Government's knowledge of the sales..

The conflict in testimony --
Bernard Steinweg's recollection.
The July 3, 1972 meeting-..
Dr. Brunthaver's recollection...
The Steinweg version of the July 3 meeting -
Dr. Brunthaver's denial.
The July 3 telephone call.
Telephone call of July 6, 1972.-
When Secretary Butz learned of sales
Contacts of other companies in week July 3-8, 1972.
Contact by Louis Dreyfus Corp...
Contact by Bunge Corp.-
Contact by Cargill, Inc.--

Justice Department determination..
VI. The Commodity Exchange Authority and the Russian grain deal..

CEA responsibilities..
The pertinent issues.
Futures purchases on inside information.
Manipulations of wheat futures.

Erroneous reports..
VII. Profits and Prices..

Grain company profits.
Some farmers lose profits..

Prices to consumers climb..
VIII. Findings and conclusions.-
IX. Recommendations.
X. Appendix...

Pago

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