OFFICIAL VERBATIM TRANSCRIPT OF HEARINGS BEFORE SPECIAL SUBCOMMITTEE OF THE JUDICIARY COMMITTEE OF THE HOUSE OF REPRESENTATIVES IN CONNECTION WITH ITS STUDY OF THE ANTI-TRUST LAWS
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Document Number (FOIA) /ESDN (CREST):
CIA-RDP59-00882R000200380001-5
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RIFPUB
Original Classification:
K
Document Page Count:
434
Document Creation Date:
November 16, 2016
Document Release Date:
April 18, 2000
Sequence Number:
1
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Publication Date:
October 3, 1955
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Official Verbatim Transcript
Of .Hearings Before Special Subcommittee
of the Judiciary Committee of the
House of Representatives in Connection
With Its Study of The Anti-Trust Laws.
Pabl:.hrd by
THE BUREAU OF NATIONAL AFFAIRS. INC.
B NA 1231 24th St,Nt, N. W. Wosbingtow (7). O. C_
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C O N T E W T S
TESTIMONY OF :
Peter A. Strobel,
Commis:sioner or Public Buildinzs Service,
Accompanied by :
Roger Robb,
Counsel - Resumed
Sol Schwarz,
New York, New York
Edwin Ii. Lawton -- resumed.
(Afternoon 342)
John F.. H'&11,
Director of Compl ?an-ce D_v_s 1vn,
General Service:
Maxwell ti. Elliott,
General Counsel,
General Services Adralfistratlof
PAGE
249
301
321
-z65
406
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WO%s AND GOVERNI NJ' - AD'f L / RY GROUPS
247
Friday, O t obey ?8, :955
.
House of #'?epresentatIves
nt : ust Subcaitttee of the
.c.:.^.'ttee o:a t.nt- .:u 3tetery,
Wz shingtoon, D. C-
-_ The s::bcommittee Met- lursuant - . ati Journ` -. nt at :=
o'clock a . ri . , in Root! 3~ " "''. c' H u. i' ; ce Bu t fd i~~t: , zsone rab1e
Emanuel "el le-r. presidlncll,
Pr-~-: s?n~
and Keating.
Al-.,-, ^-^esent : He.?b~ rt ii. ; trobeI in fat :;4 to see any
eon: 1.ict -&,* i~~le: eft bit=.ec r. hl Fade rat duties ac:d hi eoatiriu
90 per cent lntcreat Is. ne .:.':; -_.e yc,r;sultiuj, f em :.E ariyrg hi.
name.
In the lost '_ ct.'), Pr Ch3 irr..4 , knows, there
w*0 PPPFbved Pror~R ~e se`2 0 113 :'CAA-RDP59=008ff 1 Ob~200 b~?-5 y cu'. `):' ' ? ist of
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compiled .
The Chairman. That will be accepted.
(The matter referred to 19 as roilowa : )
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The Chairman. Do you want that at the pc 1 nt -Oc- 4 I-'1d 1CQted
or now in the record?
W. Robb. It doesn * t make any u : ff?erent:e to ;ar wk.1ch..ver
wary ';ham" Oha it pr'- fers .
`.re Ch.t 1_-?tn2n . It w-111 be put in at this point. Strobe 1 . There ir: oz other point, t na : ~- though
tie testimony as it via.. given the other day is tf-hnlc::s 31Y
correct , the imprPSSicn that ha3 been -:.3Je by pralzman are each en7 the %
to a drawing account of $12,000 yearly",
Mr. Strobel. I don: t think so. I thinl.
Mr. Maletz. $15,000 a year.
Is it also not true that under the arrangement. the amount
of money remaining after- deducting froc-i the pro.'itu the drawing
accounts, is to be distributed 90 per cent to N".r. Strobel and 10
per cent to Mr. Salzman?
Mr. Strobel. That 15 correct.
Mr. Fine. Mme'. Chairman, before you ask and. 1 u.-t'-er questions
I want to clarify something you have just 5tate-1 In a~%?sr op`=niag
remarks. I would 111:e very much to ha ...- you, %U-. Robb, if y,t_-'_
will, provide this coc 1ttee v-1th your ccnte:*t = :%s
alleged violation or Section
783
IL *.:, gals
of T it ie 18 of t7ze Z,;n yted States
Code. In no far as It relates to tt. t claim ?~:.t - w:za pro:eCu-
ted before the Corps of EnCineea?3. I a.n not tor t.t s~ - 1 agree
with the Cha firma n there was a v i ota t A_.-n of the : & t 1 cn .
TIfte Chairman. I said tt.ere may be.
Mr. Fine. Yes, you said there =!2y be.
Mr.. Keating. The Liza irrr.3r= said t e:ao, rt _ In ')p1n1on
c oski 1 :^~ l s: tereat
The Cha irc:a n . That re fe ?z?Cd t c
statute, This. :eras 8 matte _?
!.h . fl bb. I should be _'Isu to t:xat. r' 'Itz 13+t iven it.
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s claim was Mr- Strobel' a own claim, his p"'- -u~ ='mss="1 ==
he Chairrn n . I think your interpretatiot'3 itf bound, but
many minds may differ on that. Let t a not get into legal av u-
ts. We would be very glad to get 'N -;UT- veraton of this, Ift-.
Robb:` I think it might be very enlightening tz th committee.
We w:L1-- be 'glad to have :Lt.
11r. Fine.
I want to clarify something that was 'crkth%~,ring
- me, Mr. Chairman. In the f ir?at paragraph of v-.:-u=' a.P't;z=ng atL'-
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much study up to now. If the statutes were construed to
prohibit what Mr. Strobel did, I take it it would mean that it
a partner In a firm had a claim for back income taxes or for an
income tax refund and he then tool: a Government job. he could
not make a claim for that incomf: tax refunc. after he came to
Washington, which I think would be a rather peculiar result.
I think the statute hzis been construea, air, t^ an that
person may not prosecute a claim ea 3n az:~o:it o+- motto--r ey for
some other individual or entity not for himacir. In th1 t;eae
rnent you used the words
- - you were re : ex Y:g '116-11'c- p: ?opri ety
4cz
trobel's "official conduct in recommending to your sub-
that he award an architectural contract to a very active
c - of your firm, namely, Serge Petroll." If I understood
f the last hearing. ilr. Strobel recommended Mr.
roff only because there was the need for rush In the f 1;%1ng
MEMMO-
the building on Columbus Avenue, and that qtr. Fetroff, lice
a L1 ot?icr a -c zit ~,- is , :yould be ;3O1.n#; the Coder, ,;ant a favor and
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not that it was a gain to Mr. Petroff personally.
The Chairman. There is nothing in the record to chow that;
etroff was doing the Government a favor.
Fine . I asked the question and it 1s in the record or
-71 Strobel and Mr. Strobel answered 1%i the atf trot lvc .
Mr. Robb. That is corruct .
-Mr. Strobel. I answered it th! ti.3y. It `xould not to a
favor to me, it would be a favor to the United -states Government,
assuring that we got out of o very tough Situ.at ;,*zr3 .
MI
Keating. I would 11kc to as.c a queati 2-n c.r two at this
Point, Mr-Chairman. The 61~,- htngtcn P;-st has y r j T "-"n an editorial
this mcrning...based upon th.- &vtdence to date n:--l b=-'' '?r = the
hearings are cam`lobed, in which they = :;,y, they re = to three
Incidents recently In the ne?:.:i ::hicl: trey any f ~~==atoms ot'ic2.9'i
laxness or Immorality- I tlilnk th~~,y .--ay h-n ='+ 1'- ~zk deal perhaps
to their point as to two of the three. 1 am rte, rr1r~ now to
the matter before us. T want to be --tirc that 1- h ."p this teetiesony
correctly to date which is tht. b-=ais upon whicn '=nis =dttc''ial
was written. it refers to the -. emar.c3ble abtu -ne==-J t%f Public
Buildings Commlasioner Peter A. strobe-1 In to see any
conflict cf interest bet::een h= redera 1 dut ie5 as.:1 ji= -: co. tinued
90 per cent interest the =Insulting, his
In the last Admini~t :?e1t a? tie Chair's '.:no +a. there
was no one more voc ife. 3u .3 : .~~.
~or:?u2"?tlo+r~, ab+ca t f'4tct of
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interest,
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aboxAt matters that were not only Illegal. but matters
;ghieh bore on the question of morality, which were unethtea l ,
and my posiicxvii 3.~ just exactly the same in this Administration.
ijowever, in individual cases, when a pa^cicular person is charged
it certainly 13 the uuty of this committee, which I know the
Chairman shares, to be sure that any person to fairly dealt
with and that no conclu3lun : are drawn which are unwarranted.
In discussing th . Strob-_-1's testimony this statement Is made:
"Mr. Strobel has -esyi f led thst he did work for the New York
firm and helped sever.--'! n f' its c 1 ients to obtain contracts after
he took hi3 Federal post."
That is the basis of their claim of lack or -.orallty.
Nor, am I ice. error- that the only ca-,--c- ;hex?e there is even
any evidence that you, Mr-. Strobel, helped any cl;ent to obtain
contracts was in the Petroff ca3e?
Mr. Strobel. That 13 correct.
Mr.. 'Keating. The other- case of an architect, some Evans,,
Chapman firm was zomething th= t you didn ? t even know was going
on. You had no hand in that ::hatevev and the contract was let
by a subordinate. -
Mr. Strobel. That is correct.
Mr. Keating- In other words, the use of "several" is
erroneous in the statement I read.
Mr. Strobel. That is right.
4r'. Keating. There ..3 only one ins :-Ir*ce , ":hat -3f' Mr. P?troy'? .
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and that is subject to the explanation which yo+a havd'- ,givers here.
W. Strobr'l. That is right.
W. Keating. that cane you did not to any way !trect
your "?..:.urdtnate, as he has testified, to employ Mr. retroft.
You simply made the suggest icf of his nacre
ae Oise who would do,
in your opinion, from experience, would do a satisi"actory Job
In a very limited time.
Mr. Strobel. That is correct.
Mr. Keating . In your ,'udgment, it .gas an unu3ua 1 situet ton;
am I correct?
Mr. Strobel. That is correct.
Mr. Keating. It says that y,-:)u continued your private
activities de: pits the clear provisions in the '.tan ard3 of
conduct of the parent Gene--al Services Administ j a t it~n, and then
It quotes the statement in that so-called code of ethics or
something of the General fevvlc es Adcnir.lstration. It says
"Mr. Strobel's insistence that he made hto o'..:tat! de connect-
ions known to his superiors constitutes an indl tt_er.t of laxity
in General Services Admir,i:;trat ion and the Dep3, t~~e!*t o.'
for permitting the activities to continue."
Juatlce
Now, as regards you personally, the witnf?s you did
when you signed this document, put down at the i f ?t t om thle atr.te-
went to the effect that you w,~ re going to rota 1. . It wa a under-
stood that you were to -retain your ter corsnec t = z3a,s, arid that
you made known to Mr. ~t-~ u:c?, tie Ar'-ntaletratov of GS=?, that
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you were going to retain it; Is that correct?
259
W. Strobel. That Is Y?ight.
The Chairman. When did you sign tiat document, Mr. Strobel?
W. Strobel. The document referred to swat be the one I
E1gned December 27, 1954.
The Chairman. Was that one year after yo%4:' a ppoir tmeft?
A1u?. Strobel. No, that would be five t..onthv after
The Chairman. Did you get written approval from anybody
to engage in the outside activities?
Mr. Strobel. No. I testified there was no written document
pointing out that situation.
Mr. Keating. It refers to the Department of Justice,
Indicating by inference that there Is an allegation on the part
of so'.Y'aeore that you have committed a criminal act, because that
13 the only time that the Department of Justice would comae into'
Play here. The Chairman ha: stated publicly that in his opinion
t.Zis did not constitute a violation of the confl i.t of interest
statute and certainly I agree with that. I think in Fairness to
you, those things should be brought out. It rat eg a tauch bigger
question, :whether anyone coming into Government employ should
give up completely all outside busIne3a connFrt ion3 and interests,
dispose of )-.is holdin~~s cr:d get out. That can be don+Y Somett+eses
with regard to a person who only has stock holdings in a company,
when It cannot be done by a person situated like you are, bolus
titc_ -;r a s'k p iar c 'f a bt._s 1.n? i3:; `w':. ch you hole b...t..e t it a to r*---tuz'n
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to. Perhaps that is what ?w:p must coQe to in Government in order
to divorce Governmen-c 1,~?tcpJe entir---ly frow any
possible t+pta --
tion to further their owri :zouisle- - interests as aga ln< t the
interests of the Govern:uent. if we e o come to that
o~ course,
It Is going to result in sc!ne deterioration in the caliber of
the people working for the Government.
It 1s going to mean that the only people that t=:~`-ec~ the
reservation clause to this code of standards fc*rm.
you
=:a~;; rn-l ee
questioned by your supi-r for as to t h proprt ty ^ 'Pi d
a question relative theretoO
Mr. Strobel. The question was asked by co?an .el the other
day if I had been requested to furnish around that t a-:~ a 31St.
of the firms, clients, zind I. think I a:.~'..erc'd to the best of my
recollection that I couI !. ?'.: x-e*:,e: be.-, :.,L_.t I `Nazi a--:cep later, in
further answer t' your gvcnt1an, I :caked by Mr. Xsn3ur I;
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would say about some time in late- July or early August --
Mr. Maletz. What year, Mr. Strobel?
263
Mr. Strobel. Of 055 -- to get the 11at of clients in, and
I did furnish that as fast as I could after that time.
Mr. Rodino. When did you furnish that list?
Mr. Strobel. It is dated August 30, 1955.
Nor. Rodino. When did you sign this reservation?
Mr. Strobel. I s- ..ed that December 27, 195k.
Mr. Rodino. Did Mr. Mansure at any time suggest to you
that the reservation was not in keeping with the code of ethics?
Mr. Strobel. No, 51r.
Mr. Rodino. And this 11st of clients was furnished to Mr.
Mansure some eight months -- you say in August of 1955 -- aoaae
eight months -
Mr. Strobel. That 13 right.
Mr. Rodino. That is all, Mr. Chairman.
Mr. Fine. Do you mein by your answer to Mr. Rodino on h18
quest ion that Mr. Mansure after December 27th never Veit that
your reservation was a violation or that affidavit?
Mr. Strobel. As far as I recall he did not bring up any
point until around August lst or some time In July.
Mr. Keating. Of this year?
Mr. Strobel. Of the a year.
Mr. Rodino. One furvhe.r auPrt ion. Mr. Strobel.. It seen
co re that from our pr-?vic ~s :ect1 ony you uz-c - tle+ ror quite
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a Ions time with the decision that you were to make as to whether
you would sign or not sign this code of ethics form, and that
any time durtng that period. prior to your actual Pii.gntng and
adding this reservatloes, did you then discus's with anybody
whether or not you should ctgn it In teat way os- add the reserva-
tion ci%-use?
lKr. ='trobet . No. As I te:it1 ft -d the nth&-r day,
particular form was on my ciF!:c for a long time.
Mr. Rodino. Yes.
Mr. Strobel. It got covered up ar:J I --
Mr. Rodl.no. What do you mean by "got cove:-ed ;ap"?
Mr. strotel. Under a pile of wor:c.
Mr. Rodino. It was an imp,,)rtent document?
Mr. Strobel That Js right. It was an lmp334-ta"t docue entt,
yes.
Mr. Rodino. Weren't you contacted during, th1:s Pe--1.11.0d o!t'
time by anyone req>esting that ynu Biers it or at 1Fc3;5.t tak-A aoeie
Mr. Strobel. X don't recall. I can't say whets er I was
contacted or nc-r.
I coo rem.-r1LPr that a rout t ne the .'?~ wn3 a ade
on the th?t hz not t A nets in a signed ::tatesetet, and
I was among them, and I was ur, ec' to :j1Sn it, ani that to how x
came about to sign it on Dec?cr_:b -r 27. ti,#ith reaervat'cns. Obviously
I could not sign that in rc i'-h -eithcut ora:,.tn : the reeer'+-atlon.
Mr. Rodino. Did the Of'f:ce cf Cerzpllence regae3t you to turn
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over a list of clients that you might have had?
5
Mr. Strobel. That was what I answered to burr `e. AS Cr
aas I can recollect that request.came later; however, that doesn't
mean that my memory couldn't ''a11 on that issue.
The Cha irtnzn . I would like to as.c you whether as Coc:eelaslon-
er of Pul llc Bui 1r31ngs you had, shall I zey, a very large real.
esta-cE organization
Mr. Strobel. Yes, I think .i would have to admit to that.
The Chai_?naiZ. Would you sny it 1S one of the largest in
the world?
MU-. Strobel. One or' the largest in the %Jtai-11.
The Cha trrca a . now r.-,any _?edera l bui idle ,s a s- you reepon -
sable for?
M--. Strobel. Appvo irately 5,000.
The Chairman. And how ~.?ny employees of L.,%e Public Build -
ings Service, ho., many does ;t have at the present time?
rft-. Strobel. I have in the central office here In iashtsg-
ton approximately 3 4 employees.
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The Chasid Fortse"00jW/0jrtIr%z82R000200380001-5
- IV
Mr, Strobel. That Is in Washington. We oprate throt h a
decentralized usthod and cover our operations thro h ten
regions. Tyre are a total of approximately 20,000 Public
Buildings Service employees in all the regions.
The Chairmen. Do you operate abroad, too, outside the
Continental thzited States?
1r,. Strobel. Yes, we have jurisdiction over some people
in Puerto Rico and Hawaii and Alas3:a.
Tile Chairman. In other words, would you oay, also, that
the selection of architects for lease-pt in
my handwriting.
Mr. Robb. Nor mime, ?h'. -eatin-.
The Chairman. Mr. Kilroy was here again.
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Mr . Fine . Mr. Chairman,, I would like to know whether or
not the photostats that Mr. Maletz prepared and turned over to
Mr. Schwarz contained these notations at the time they were turned
back to Mr. Schwarz .
Mr. Na letz . I havt received a number of documents from
11r . Schwarz -
Mr. Fine. Excuse me?
Limiting yourself to the original of the letter, you got
a letter, dic3n t t you, the original letter, didn't you?
1,1v. Ma letz . ? It was not an original letter, It woo u white
photostat which I received from Stz-~bel and Salzman. And we
sent that complete photostat to the Photo .service Office of
the Library of Congress.
11r. Fine. That photostat, the white photostata that you
got, do you recall whether It had any notations on it?
Mr. ?laletz. It did.
The Chairman. It has them on It. Read them youraelt and
Mr. . Ke a , in? . Are those the same notations that are on It
The Chairman- They are the same as on the black one.
Mr. Fine. That is the que3tion I would like Mr. Schwarz to
answer, whether or not the white photostat he gave: you -- or did
you give him a white photostat?
Mr-. Schwarz. I don e t remerber whether I did give him a white
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J
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Mr. Fine. Do you recall whether the white photc,3ta : was
the one which is now before Mr. Strobel?
Mr. Schwarz. This white photostat is a pnotostut of another
one which "I received from Mr. Maletz 4n Mor. C18Y ?
Mr . Fine. Did you give him that -ne, the one t t-: orf you
Mr. Schwarz . S do riot ret ,tuber whether t: 1s :ere as to that.
Mr. Maletz. Did you discuss that with Mr. Smitht
Mr. Strobel. I aright have done that,
Mr. Maletz. Do you recall now whether or not you did?
z lx- . Strobel. I probably did, yes,
Mr. Maletz. And what was the suture of your
with W, Smith?
Mr. Strobel. That, I don' t think I can reme her. beat .It
must have been in connection with the request made the *z'uy.
The Chairman. That is, the discussion very 2 AMILy was that
you would like to continue with this contract, and aoe'slotlns?
also with your intercet in Stroba1 and Sa1z*tf?
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Mr. Strobel. When I took office. I had met up certain rules
to govern Strobel and Salz=an. One of the basic rules was that
they of course in no way whatsoever could have an ythiz to do
with work comissg out of the GSA. at at that tier I thought the
office would have a right to do work for other government
agencies.
However, this contract we are talhisig about, wftloh was
negotiated before I took office, is the only prisee contract the
orrice has done. No other contract has been negotiated with
any other goveruMsut agency.
Mr. Maletz. Now, when did you d?a oues that with Mr.. Swlth?
Mr. Strobel. I don't know.
Mr. Maletz. Did you discuss tt once, twice, or a number of
times.
m-, Strobel, I east' t anewer to th;1t, because I d ou ' t see
that gentleman very otters, living down here.
Mr_ Maletz. Did you request Mr. .xnith to do anythi* about
this matter?
Mr. Strobel. No. I don't think I did, beo"use Lt eras being
handled by our lawyers be".
The Chairman. Hy your Sawyer, you mouse Mr. --
W. Strobel. The GSA lawyers,
Mr. lwa let z . Did you not tell the GSA Sawyers that you bad
decided to handle a mat tor, the Corp3 oS I atnaers matter, a
different way?
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1~ . Strobel . I aaig t !save said that, bRat to reaollec tioes
it wa a not done .
The etssirann . What did you UOsn by a different i y?
Mr . Strobel . Well. I might have gotten NW Own ].C al a4 tee
to handle thin problem.
The Chairmans. And you did, tbrougts Mr. Smith?
1dcr . Strobel. He Is not a lawyer.
Mr . Metletz. What was the reasons why You Mould dtsosssa the
mutter with W. . Smith?
Mr. Strobel. Well, I dose' t know of any speait1C rosavm ?
Mr. Maletz. Did you tell 00 this, that this I dIvIAhmsl,
your adviser, told you that he would make inquiries eon~ :stas
this mutter?
Mr. Strobel. I aright have told you that, but an far as it
worked vest, I don't think he did, ov I don't mow if be did,
Mr. Maletz. Was it a correct ntatemsnt mbon you ssado it
to me?
Mr. Strobel. I don' t Zanow.
Mr. Ma.letz. But you do say that you did tell me Mr. Strobel. I had diacuseions.
Mr. Muletz. --- that your adviser, lair. 3 1th, told y a that
he would make inquiries c one erns ng thie matter?
Mr. Strobel. Yed, I might have said that.
Mr. Maletz. And did you also tell we that Tour adviser
riald that he would endeavor to get the aseatter ats~es ovut
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with tht Corps of ere?
M-. Strobel. Kell. I sight hays said that* AS I said
before. I don't think he did anything whatsoever for me.
W, Ilaletz . How did you know that ?
M.. Strobel. Because X think it was sett led after OW.
Elliott and W. Moody talked with I. Ad&a a.
Mr. Maletz. The Liatter was eventually - straightealod out?
Mr. Strobel. It was straightened out, and w were permitted
to complete the contract.
Mr. Maletz. To your knowledg?, d1d Mr Sslth do as thI$
whatsoever to straighten this matter up?
Mr. Strobel. I don't believe he did.
fir. Maletz. Did he tell you that he would do oometh m to
straighten the =%tter out?
1Kr. Strobel. He might have said that, X don't ssvw.
Mfir. Maletz. He might have.
Mr. Strobel. Yea, he aslght have.
Mr. Maletz. Do you recall whether or not he indicated bat
steeps he would take to straighten the matter out?
'Av. Strobel. No, I don't recall that.
The Chaiz .Xa . Xs Mr. Lawton present?
Mr, Lawton, step forward. Ta1ce the etund, Mr . Lawton.
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TL$TXMONY OF Eno= He- LJWTON
The Chairman. You were sworn yesterday.
Mr. Maletz. W. Lawton, have you prepared a dstat1ed state-
ment concerning your knowledge of the se2eetiaad of Petrotf a
Chapman, Evans and Delahatsty?
Mr, Lawton. I did.
Mr. . 2daletz. Do you2mve the atateaeeutt before you?
?tr. Lawton. I do.
The Chairman. Would you care to read it?
Mr. Lawton. Read the entire Statement?
The Chairman. Yea, sir.
14r. Lawton. I, Edwin if. Lfsvtoss, Make this atatea~rst in
order to clarify may answers to questions asked by Herb !!slots:.
Counsel for the House Judiciary Subcoaumittee on October 27.s
1955.
I occupy the position of DeputyRegiona2 Director tot the
Public Buildings Service, Region 2, New York, N. Y., mZ have
been Deputy or Acting Deputy Sin~ese 1950. I aupporviso the
operations of a Design and Construction Division, a ButLidltws
Management Division, a Real Estate Divielon, a Reel Property
Dt aposal Division, and an off ice of the Natlossa2 Iz1uatrial
Reserve Division.
1Ky immediate superior to whoa I an directly respvUsible
IS Mr. Walter F. Downey, Regional Director or the Niw York
Region. The C----Ltssion P of Public Ns32d~.ags, of coesrise, is
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N r . Strobel who stipervta a the t?ohnioal operations of q
orria?
I have the authority as Contracting OVrioer to negotiate
contracts for architectural service without the approval of
any other individual. However, as a matter of praatloe I k a"
the Regional Director advised or any negotiations and I would
not enter into such a contract without at least the oral
approval or the Regional Director. IPurtboruore, wt n I have
consulted with Mr. Strobel or his predecessor as Commission r of
the Public Buildings Service, I have and would accept x'ecom^ snda-
tions and suggestions from then relating to technical matters but
would not necessarily be bound to exercise cp/ authority as
Contracting Orricer upon their inatructions'. Slaco occupy
the position of Deputy Regional Director or acting Deputy Ptoglam&I
Director, Pffi, the New York Region has entered Into only two
contracts for architectural service.
The Chairmen. At that point, as to the architectural
services other than those two, those architectural services were
rendered by your office?
Per, Lawton. I didn't hear the last part.
The Chair n. Other than those two you have mentioned, the
two contracts for architectural services, as to architectural
services required by your office, x:hcc I-v-rfor=ed those mrchitoctUral
services?
Mr . Lawton. Those , cerv ice n were portormed by cn tnsers
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employed by Regions 2.
323
The Chairnm get at is th.s. "you signed
a contract, or your office signed a contract, with Mr-. zetrott,
after you had received instruc t icna from. Washington t,- abandon
this project.
:dr. Lawton- That iz true. Thnt was the i .:zes~. z baton or
an old contract entered into with Petr..ff on tne 271h f August.
Mr. Maletz. That was a cox trbct ?-- the et:'ecti a date or
the contract was made retroactive to Auauat 27th?
Mr. Lawton. It was made effective to Au. ,u t :=; dz.
Mr. Keating. You felt you would be going nacc z~:j your word
if you d1.dn't mace a contract after ::avtng made tt.at c` ttment'-
Mr. Lawton. That is right-
The Chai .. an . Even a i ter the rvc_:: .:no abazsdoned ^;e was
informed that the work -
!'!r_Kesting. Sure, he had atven his word'.
Mr. Lawton.
ri?. e trcrr hat! ecru= feted certain .c:razea or
the work, all of which is doc, t.urer. ted ty his vou--her.
Mr. CoaldT- t *-
-1% -C'roft have billet:
Service f..>r se_?v Ices rer.de.?eu ?
bli D atldtnge
Mr. Lawton. He did bill them f_-r 5ervice3 rendered in
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accordance with the terms of the contract.
Nr . Ma letz . What I an getting at 1$, assuming that 0
33:3
contract had not been formalized, couldn't Petroff have atIll
b:Llled the Governinent or services rendered:
Mr. Lawton. Yea, he could.
Mr. !1aletz. In other words, it was not necessary to have
this formal contract e
Mr. Lawton. I consider that it is very destrade to
complete the formal contract in a case of that nature.
Mr. Maletz. Even after the entire project had been abandon-
ed.
1'. Lawton. The fact that INS abandoned thy-
the middle of it was not our doing.
ct In
Mr. Fine. Wasn't the reason that you wantsd the contract
formalized to limit the additions and to put in wr ittng the
times that you had agreed upon with Mr.
wouldn't be any additional change:
?etroft so that there
TM1r. Lavvton. That contract was prepared to wrtring before
the cancellation of the job, but it was r.ot in shape for foraaul
signature until after the actual cancc). L &tlon date.
Mr. Fine. There is one problet- that I would 11Ue to have
clarified, one situation, if you will. Counsel ror the coGMittee
asked you the cuestion, hypothetical question, as to w;hat you
would have done had you not had Petrotf in mind when you came to
Bow York. And you Indicated that you would Vnen have had to
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scour the markets or look for an architect. now long would
that have taken you?
3
Mr. Lawton. It would take a month under normal c ~Nnditlans
to select an architectural firm. It could not have been done
that way for this job.
W. Fine. It could not have been done?
Mr. Lawton. It could not have been done I r we were:- to
follow the time limit set by INS.
Mir. Fine. So in the beat interest of the kivernt.ent you
had to praceed the way you did?
Mr. Lawton. It was in my opinion, yes, air.
The Chairman. Here way a z-:nah jcb, this wu--z an emergency.
and then in addit tor. a number c-,: architects, you said. Could
have been hired for tt.e 'ob. And then suddenly there is no rush
about It, the job was ab - nd cned .
Mr. Keating. That was abandone by IKS.
Mr Lawton. Abandoned by IN; .
The Chairman. Abandoned by INJ?
Mr. Lawton. That is cJrr ect .
The Chairman. So that the rush app. ?eat ly was nu311fled
by abandoning It?
Mr. Keating. Yes. But this fellow ;.itng wv:3 swinging Into
action on tfte Public Bu11c=1nz5 peoples and z A111nZ them, You have
got to get this out". And they were t -yrtng
he wanted.
to s:omPiy Kith what
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Mr. Fine. I don't want - my question conrueed by the Cha 1.r=an .
I was talking about your talkine to Petrorr than vor- next day
and making arrangements with him orally. I am In-+t talking
about what happened a Pew weeks later, I said if you hzdn't
had Petroff the next day how long would it have taker, you to
hire any architects?
Mr. Lawton. To go through the norcial procedure it would
have taken a month, which we could not afford on thls job.
Therefore, I would have had to do the same thing with an
architectural firm.
Mr. Fine. And exactly what you did with Petrotf would
have been done with another firm?
Mr. Lawton. That is right.
Mr. Fine. E an. referrl:?g no, to entering into t::e written
contract even though INS had abandoned the project.
Mw.. Lawton. That to right, to sick within the t tme llalt
specified.
The Chairman. Ga ahead with your statci cnt ,
Mr.Lawton. I also discussed with Mr. Bergen.- representing
Janes L. King and Son. the general construction requirements
of the project and naked 1-f he was willing to undertake the work
on a coat-plus-fixed-fee contract. Mr. Bergen agreed to under-
take the work as soon as drawings and specifications beceae
available with the understanding that such drawings and speeIrlen-
ti.ons ?:ould be furniahed_ piecemeal and that certain phssea off" tht
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Mario Would be under a onet ruc t i.vn while other pha see were still
in the design stage . The p-`eparat tor: c4.f the construct 1o+n
contract was undertaken but was not c,:nausasated prl,,r *--.D the
cancellat i~,n of the work by INS.
On September 14, 1954, Mr. Strobel advteed me by telephone
to atop all construction wo. k but to continue th4e des,Zn work.
1Kr. Maletz. Excuse me, Mr. Lawt..n. Why did time a -.c you
to continue the design work If the project was aband~T t-d?
Mr. Lawton. I believe he did not have a co=pieta- abt ndon--
tent order at that time. He was in contact w:.tri IN-% at the
Washington level, and the abandonment order came later.
On September 24, 1954, Mr. Jitr4wser telephoned for Mr.
Strobel advising that IN=S had decided not to cuc- r*lete 'e
alterat i cn:3 and that it would therefore be nec e5 Nary t--, stop
all design and construct ion wo:^k. As .>I* the date of cancellation,
W. Petroff ceased work on th.e ?oject an A w.'s "paid $9. '>CO
for that portion of the wc:rk ccmpleted In accordance tu! th the
terms of the contract- The prel imint:ry work pe.-f.:.rcx+e'd by James
L. King and Son was also cancelled and their vou=. nera :4: th a
complete statement of the conOl t ions were fox-wardeJ to the
Comptroller ? s Office, Pegio:s 71, for payment. I h4a :e been advisee
that payment in the amount of ?, 165.7 4 has been approved by
GAO.
There were no telephol:e t ruse lons betwee:: m;'1t and N.
Strobel or anyone else i n tk.- C,,.::ntra 1 Gfftce between t se aeetitmg
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on August 26th at which time it was determined to undertake the
job and my contractual agreement wi-th Per. Petrorr. X had no
knowledge that either Mr. Petroff or 3amen L. K1nr, and Son had
been clients of or were negotiating for contracts with i.
Strobe l r s firm, Strobel and Salzman.
The procedure In contracting with 8?r. Petrott and James
L. .n'15 and Sor: di22't ed iti this easc- fray ao eta l pi'& eeduiie only
because of the time 11tnita'c # ' * for c ociplet ton of the a lteratlo3r'3s
as Imposed on GSA by INS, and the instructions from Mr. StrobeA
to take immediate action. Under normal procedures anti In the
absence of instructions from Mr. Strobel, a Mist or as?=hitectural
firms would have been prepared, a selection of the beat qualified
rirm would have been made, and a written contract entered Into
prior to commencing the work. Furthermore, the contract to,- the
l
construct ion work would have been executed on a c'?**-t It t ve bid
basis. Such normal procedure would have required five months
before construction worlc on the project could start, a :.ozz of
time which, on this project, was not feasible. ' htu was the
first negotiated architectural contract entered intp by Re,gton
2 since I received appointment as Deputy Regional Dtrect1on In
1950.
M?
The Internal Revenue Service in conso:.idat ing the bower
Manhattan District Office selected the 2d and 3d floors or 201
Variclc Street. Since this building is presently a warehouse
considerable alterations are rent tree for cohverelon to orrloe-
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ApjLprdid Fu el sea s v2e0(/5403enaAin~Pe59r-0W&V8W~?38$~~, fable to
SSnce
undertake the design of the alterations I determined to contract
the work to an architectural firm.
In June, 1955, I requested Mr. Willtan Boyd, Assistant
Division Chief, Construction and Repair Division, Re#$1 on 20 to
provide me with a list of architectural tires quaiirle-ci to des;
the alte.'ation3 required at :?01 Varick Steet from r+tai~~ a
selection would be made. Mr. 3oyd pr ov 1 ded me with the names
or York and Sawyer; Koepe'l l anicl Koepa l1 ; Lorimer flich; Chapman*
Evans and Delehanty; and SerZe P. Petroff, all
New York city.
Koepell and "toe?pell were reje: ted by me In consultatl.?:~,n with Mr.
Boyd as being below the qualit ie.;tiona c r the remain>nS tour,
all of which were considered t:> be on an equal level- I
discussed the proposed altE:? .~~n3 with each of the f o r flrua and
requested .vow them a lump :3uu price for the work.
Mr. Maletz. Now, Mr. lawton, is it not correc -- I don't
think thi3 point was clarifi i d yesterday -- thac Zha;-,--an, Evans
and Deler= my ?s proposal i:.it:.a1 :y was the hi 3-.e -t -
Mr. Lawton. That 15 1ndetc?rmir.F-. in my cpln:n
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Mr. Keating. He went all over that, and t said he
couldn't tell whether it was the highest.
Mr. Lawton. Mr. Otte Pose, Acting Director, Destgn and
Construction Division, Central Office, oubaoquently advised =e
that my procedure was verging on eompetition between the
architectural firms contrary to policy of the Americas Inotituce
of Architects, and advised me to select one f1rm and discuss a
price with them.
In the event that we were unable to arrive at a mutually
agreeable price Mr. Pose stated I should then select anotlu-.r
firm. I discussed the proposed firms with Mr. MioQael ]k%anx an,
Chief, Construction and Repair Division, Region 2, and Mr. Walter
F. Downey, Regional Director, Region 2, whereupon it was decided
that mince Mr. Petroff had had a contract with the offiee
recently he should be eliminated from the list.
The remaining three firms were then discussed and they being
equal as regards qualifications, Mr. Downey advised we to ,sta.rt
negotiations with the firm or Chapman, Evans axsd Delehanty.
I than met with Mr. De l shanty and Mr. ' Downey, and W, De lcI my
agreed to accept the work for a tee of $40, OOO, which we had
determined wma a proper fee for the work.
At no time during the negotiations with the architectural
firms did I discuss the selection oP Chapman, .Evans and
Delehanty with Mr. Strobel nor did 1 receive any Q teatti **J$
21'UL: him e ? ti er LsI:i.ttV1 n 01' r ? 3tt'0 1 t cotfl ~~S
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cosLSidera-
advised 6"19
tion. T. Was not aware that any of these firma had been
clients of Strobel and Salzman.
Mr. Boyd advised me that he had selected the five
architectural firms because he considered them well qualified.
to perform the work. W. Boyd advised that Mr . E)0 1011&n%7 of
Chapman, Evans and Delehanty "had visited his crfice 5om4 dart
previous to this award and requested infor!aation concorn3-ng
subsequent needs by GSA for architectural eer%ices-
Mx. Boyd was acquainted with the work of Serge Petroff
through his perr'ornsance or a previous contract and he was
familiar with the qualifications of Koepell s2r.i Koepell but
later determined, in discussion with me, that this latter firm
was not as well qualified for this type of project.
With regard to the fees submitted by the varlotss
architectural firma, Petroff subcnitted the low.. luv-p sism figure
or $40,000; Lorimer Rich sutinitted a figure of 145.000; York
and Sawyer $53,0001 and Chapman, Evans and Dalehanty submitted
an offer or 6 per cent or conett-uctioaz coats- offer
was indefinite c.nd under such percentage arranMewcat, t3 eIr tee
would not be definitely known until construction bids had been
received.
14b L-. Pine- May I ask a question.
I just want to gna e x o d r
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that contract?
Mr. Strobel. None whatsoever.
Mr. Chairman, may I read this letter? It in addressed to
Messrs. deYoung and floakowltz.
"Gentlemen:
"It hap been called to our attention that yours &s 091e
of the firma asking consid..rat:on for architectural ass.gn-
ments for projects ems natin3 from the Public Buildings Service
of the General Services Adx:iin1ctration. tie do not wish to
disqualify you from such consideration and wotild, therefore,
ask that we be permitted tc. withdvat from our corn .tt.ant
to perform the v tructural engineering for the Faahtofn
Institute of Tectu olugy project wh1ch you are doing for the
Board of Education or the City of Now York.
"Would you be kind enough to advise the proper
authorities In connection with the Fashion In:;t:.tute of Tech-
nology of your changed arrangements.
"Very truly yours,
"STROBEL AND SALZMAN
"by Joseph Salzman."
;1r. Keatsn3. Hc't much of a fee u re St_ obel and
Salzman going to ~etvunc! ..s:u c cont.?a %i .
,Mir. Strobel. If I recollactl.'r: r.:ght, it was just
under $30,000.
Mr. Keating. Ar.*_? ;, o ::.o Je tljat u? vulu.='4arl~.y .~
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order tha %oy:fg F griF a ?Wq&O tCJWRpj~( +18ii 0tfWM8C9RP2 being
considered for government employment?
Mr. Strobel. That is correct.
The Chairman. You felt that there would ba an snconsistzr:=
attitude if deYoung, Moskowitz and Rosenberg would set
? a contract from the General Services Admilistr3t =on because
of your position as the Supe- .:ntendent of Public huild_ngs?
Is that correct?
Mr. Strobel. That 1., correct, sir.
would ee incon3 ister,t with the rule3 that 1 yaad laid do,-in
for Strobel and Salzman during my tenure -d' oV ~~ .
The Cha = rman. Yuu felt there waa a ccnf2 rt o- interest
dldn:t you?
Mr. Strobel. That i3 correct.
The Chairman. Why didn: t you feel that r.:ime cowl-ct of
intere3t In the other cases where cor,tractE t e ~: gi'~en irahe-1 .w:ai read by tre f er~ortes?. )
Ur ~_-cb&' I tbirn" t at quf' t n, the Via: 1'c wc. tied,
would Imply that ;tro..3e-1 cnd would mai-c:- arl ~:?: =.'3 e-'i?o,?'l
to get su--h busI-n_ss, wh:.-i: =s nit the vase. l e po=>1ttcn I
have ta::F-r: is that I could con3_der 11L unfair 1- a::J
Salzman could not con 1nuF- to do bus S::ess with alts
Mr . :?'.:,s letz . Even tnough t^ose oi~? :_ li euts t.av ?sr~ e_?zaicen
to secu-^c: busines3 from Public Build _rit;:: = trv1 .
Mr. Strobel. Right.
Mr . .FIne . I assume that is t iecs up to the- answt-r ycu ~; ?.?r
to Cong_?--Sm.an Kt-ating and hi3'o_~'^.:z n 11er, th~.t. hoc:: disqua ll';,
yourself i f thcsc old c:.~sz ccaf: r?.; of y ,~:?.~ co *e In.
Mr. trobe l . That 3s crrect.
Mr. Fine. Bit If they c;1d obt ain busJ.ne3s 2'ro=.: ~r ebody-
else -
Mr . trobe 1 . It wouid not be for me .
Ur. Pine. T:iat would not ycur firm f":?::'.~ t o ng
business with them?
Mr. 5 --robe--- That `s --i~; -
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Mr . JRaletz . I have no further ques ors, -
The Chairman. Mr. Hill, would you cos0 forward. and Mr.
Elliott, also?
TESTIMONY OF JOHN E. HILL, DIRECTOR LN CO.M "-'-V's1 CE
DIVI,: IOH, QEN 'HAL 5 .= V.LCES ADMINISTR: TIC?4 - Plezusoed
Mr. Keating. I would like to ask you this. Mr. 31==1 . We
were pursuing the quest lc n of h:;w long you had been :s& the
department, andyou said since 1947, i94c- .
Mr. Hill. Since 19 - I have been with GSA-
Mr. Keating. Now, how my times (lid you confer with
counsel, Mr. Maletz?
Mr. Hill. Well, I caw
mameta probably e1 'at o: r ten
tithes, but it wasn't in the ratt.r`? c a conference erne :essart3 f.
Mr. Keating. And we:-e theac documents that he i3 us=n
here delivered by you here?
Mr. Hill. In a sense they passed through my hands. May
I say that we were instructed by the rick:'-nistvatora= office to
give the ecra tttee complete ecc.:e: at _Oa . When Mr. '~'=etz would
request files we would send po5:3tbiy
to New yG::t or to J4r
Strobel + s office or 5o1ae ether place within the Age.C and get
them for Mr. . ?a1etz .
Mr. Keating. And that was the instruOtlon5 Of YOU"
superiors?
14r. Hill. That IS jrlkt, -;Ir.
The Chairman. Did Mr. tr:-bo 1 al--o soy tl:nt you a)-,ould
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406
cooperate with this committee?
Mr. H111. As I understand It, yes, 31r-
Mr. St: obel . Mr. chairman, it would be outside of my
province to direct that particular Division to cooperate
no jurisdiet ion over that orfi,.-~e .
I ha %* e
The re,airman. Didn't you turn over your persona 2 Ciles?
Mr_ hill. I opened my files completely.
Mr. Keating. Now, that Is very refreshing, Mr. 11111. 1
conducted an investigation where we didn%t have that kind of
fine cooperation from the Executive Far anch. That is very fine.
But I want to pursue this just a little more. Did you have
instructions from your own superior that you have given, your
immediate superior,-, the head of the CompllCnce :;ecrJ rwo, 'Filth
reference to this irsvesttgati-~1rs?
Mr_ Hiil_ May I ray he--; 1h's std^*_ed, sir? A 'ter !4.?.
Strobel submitted his 113t of c 1 _ents the orrice of fo=p1tanCe
and Security immediately tnit i ate an inquiry.
Our initial purpos(- was merely to find out whether M.
Strobel's clients had received any contracts with GSA -- I don't
know where we would have gone from there -- just about the same
time the committee Initiated its investigation. And then we
were instructed --
Mr. Keating. Hot, did you know the committee was tntbting
an Investigation?
i'he C hair?man . T ~,c.~.- 4 ~~.:;; that I .Ottn ur1 s-z: tf-c:
n
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4 07
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Mansure, that we wanted all information
Mr. Keating. This is under oath. I would like hts testltacn,
rather than the Chairman's.
Mr. Hill I believe, if I recall
The Chairman. It zeeu . : athcr arzcttslcus atvj sta'aid a that
a member of the committee would voice :{b,;ect1oi&% tc a de4pa?teent
cooperating with a con&t itutatl committee of Cosa,-;re::o.
Mr. Keat ino . I wanted to see the*e
The Chairman. It eeemp to me yo:_. que3tl: n wa 9.. ;:ugr!.ng
the motives of thoce who gave us these dccusaent5.
Mr. Kea t itr- . I wouldn't Impugning the mot 1.vea .
The C~,.~.:iz?caf~rt _ I want to afford this gentlemen e % e _?y
protection. We asked for the documents and we got the docintaat$.
If we 8hculdn't have the docu:ierit3, that 1 But
we are entitled to the dccume::t3, and we have g~ttc-n t:.e dccu-
ments. And as a result of Mr. ?ansure, and I :r 1 1 :ay. ?. ery
frankly, of Mr. Strobel, who cooperated to the ,t h : e, ,: ee with
this committee, we got t:ie dr>.~:::r:3ents .
And so I want to c, ter him every conceivable 4vS3 5,P for
this.
Mr. Elliott, will. you raise your right ham 1, plerase. Do
you solemnly chear to tell the truth, the whole truth, and nothln,
but the truth, so help you Cod?
Mr. Elliott . Yea, 1.: . I wonder if I cc?uld be helpful
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4O$
TESTIMONY OF MAXWELL H. ELLtC1PT, GENERAL COUNSEL,
GENERAL SERVICES ADMINISTRATION
The Chairman. What is your name?
Mr. Elliott. Maxwell H. Elliott, General Counsel for the
Genex?al Services Administration.
I wonder if it would be helpful to the commI ttee If I ccul'd
explain our general policy with reference to r making inrorc attOn
available to Congressional corriittees. It is cur poll;-y, and
we conceive this to be the policy prevrelling under the = xecuti?:e
Orders, that we should make information readily available to
an equal ^oovd1nate branch of the Gov -:-nment, to wt, the and as when requested, subject, of cou_?se, to ; a:%a1ttcattcn
With respect to disclosure when they a:?. clan*31tl~id for s+ecu.-it
reasons and subject to the r*-iattveiy rare ci '-cuua Lance wh-re-
In the opinion of the Executive Branch disclosure t.-- a et-amtttee,
would p^ejudice the public Interest.
A question or that kind, if it ever comes up, we do not
decide ourselves, we go to the Attorney Genera!. and he perhaps
goes to the _ President . I wanted to clarity that. because cur
position with respect to Furnishing information to this co lt1Le4
In this case is no different than it is In turn ish ing intormat 1Ci.
to any other committee in any other c 9~es .
Mr . Fine. I thought that Mr. Key t'. ng trying to find out
just how the files were opened, w) ether or not there was a carte
b"_anche investigation t1rst trtade by Mr. ftul t2 . and Mr. N sletz
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plaked out the documents, and then Kr. Hill delivered theca in
accordance with Instructions.
Mr. Maxwell. I see, sir. I ween?t trying .to divert the
particular facts, but I think it would be helpful if we explained
our general policy.
Mr. Keating. Is that correct, is that the way= wt was done?
W. Elliott. How is that, sir?
Mr. Keating. The way Mr. Fine has indicated.
Mr. Elliott. Dlr. Keating, I can't testify as tc the detntlj
of how it was handled.
Mr. Keating. Mr. Hill, can you teatify a: to that?
Mr. Hill. Yes, sir.
Mr. t a letz would reque.t a certa # n Pile, acid I cud send
for the file and make it available to him. Frequently I could
not have reviewed the file at all.
Mr. Keating. And you would turn over the whole ft re?
Mr. Hill. Turn ovez? the complete file to 'Ml?. D`,a let2:,
knowing that it was not a se curlty file or classified file. And
Mr. Maletz would indicate the particular document, a copy of
which he desired.
Mr. Keating. Has that always been the practice in your
department?
Mr. Hill- I can't anawer that- It a 1wara has been the
practice, but I am sure it ha: always been the policy.
Mr. Keating. Tree pol 3c- ria:-:ing those riat'tera toll open
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410
to let counsel for a Congressional cumastttee come in .and examine
the rile and pick out anything he wants to?
Mr. Hill. I don't recall any instances to the ;:oz teary,
Mr. Keating. I don't know anything about Cni-ri -:ervtce:3.
As I say, when -I was : ha lrman or the committee mac l ng ---s"h an
investigation we were not allowed to see any flit-a, and were
required to pinpoint exactly what documents we wanted, and then
they would bc- examined and usually delivered to us.
It is very refreshing to find that. at the orebent Cc>nGress-
tonal committees are allowed to go -4nd loo' at the t1i.
and pick out anything they want.
The Ch::a irman . I wondered whether or not we could ;et the
same cooperation as we got f i-om the- Cur -r-a 1 Se-wives r.dctni ts:3 -
tion from the Department of Commerce. We have been enOeavorina;
for month to get certain documents and records lox-o= Mr. : eeeks'
Department, and we have an iron Curtain drasin aga inat us , asid
we cant get a thing there. And that teas atymled the worts or
this committee.
I didn't hear the gentleman fresu New Yoric
bemoaning the fact that we were treated that way. even dis-
courteously, i+ the .::et:r-9't.3ra He retuaed to g1ve
us any C: onc - tvab'a' infc'--c:at-ic'n
W o. Keating. The gentleman was trying at one flute to got
some documents -- I don't know the full story -- aoa documents
of a private agency that happenvd to be physically 'lo:ate+c d*wri
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in the office of the Secretary of Cocuaerce. And the secretary
felt that he couldn't very well disclose that any more than the
gentleman would want to disclose the files of his own Rents.
The Chairman. I am very happy to note that the ,gentle aan
from New York coreidera th.-- Business Advisory ount;t1 a private
agency. I understood that the Secretary of Cc,=imerce . I have 23--'O vision too. But I think *x:e had
better ;'-vi t b:z~17o~ 3 we ni_Yo the conclusions. I don't think anyone
here in`.eiids to t')3 advoc:,t--, I think everyone intendo to judce
fairly.
The Chairman. I think t.zre -- t41-
And then I received, throw;, h the I'.e:->1b1 i can lk tl,orsal C ,.: ,.:a.tttee,
a biography baekGrrounc3 on St-rebel. But with that I d1d
not receive
The Chain-man. You stay the ?;epuL? ,carp 2L-:t1on2l Co. lttee ?
Mr. Manoure. That is right. "::y I c .d not receive a
recommendation from t:zcri. aeyic has :cc;n tali: :?-facet ao
t i2rd person or out=SCer~ roc _-^r:c:=^~ =~ ~z-mob 3.. acs 3s
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505
no one that ever cartie to nw attention i'ront the outside or the
Government that recommended rec. Strobel to toe.
The Chairman. Did you have any discussion with =4.r.
Strobel prior to his appointment, regarding hiu Future relation-
ship with the New York engineering Firm of Strobel and S^.1z:vtn?
Mr. Mansure. Yes, sir. We discussed that, I thin., In
considerable detail- I explained to him that thin waa a ' u -
time job, there was a great responDibIlIty connected with it?
and that he would have to devote his tirr~ to the orlcratIon. I
did that because I realized tl t he held a very oriX.nent position
in the engineering field, and that coz:1fg into the Govern ont
was at a considerable sacrifice, as many, who have co=.5e Into tic
Government have made. And I think It %rats coz plote1y urcicr. toed
between us.
The Chairman. Would you mind talkinf; a little louder,
please.
Mr. roan save . I am sorry.
We discussed the matter in considerable detail, and I
explained to ?1x. Strobel that this 1za , an impo= ~ajs ,==iti n
with great responsibility, and that it mould be a ve 'y demafdint
job, and full-time work. And I don't think there t:a _-nr -
misunderstanding regarding t-:hat traz to be done. And thlz.,-. wags
before April, when he took the pos=ition as consultant.
The Chairman. Now, did Mr. Strobel toll you that he
sould coati-nue his participaticn in the Ixartx crujilp prorits or
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Strobel and Salzman?
Mr. i oua'e. Yen. It was agreed that he would participate
In the profits of the company. I knots nothing about to partner-
ship or the company, or how the protits were divided. But he
was not to take part in the activities of the company.
The Chai.z' ian. That in, he v.-ac not to take part in the
activities, but' you understood he u-tan to pax-ticipate In the
partnership protiti; ?
Mr. T-1ansure. Well, he .-ras to hold hic lntereat In the
partnership.
The ChaJri-aan. Did he toil you that he would continue to
seek clients, or pvocpcctive clients, of Strobel -
-I-Ir. Mansuro. No, that was not a hart or the diseuazion
at all.
The Chairman. Did he tell you he mitst aollolt business
from architechts for Strobel and Salzman?
Mr. Mansure. No. ThexDe vans no aL;reomcnt to that cttoct
whatcoover.
The Chairman. Did he at any time lnfor:n you he
intonded to prosecute a private claim for &t;?obel and before the Corps or EnC1neors ?
Mr. tlancure. I d1dn ?t even tmo.r aflythinC about that until
these hearinss commenced; I never heard of that before.
The Chairman. ITotz, IUD. Strotol h=z to of :od that bctore
assumini; his Government po=t hc? had ti7-.e cltutatlon elar3.tied with
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you regarding his relationship with Strobel and Salzman; 1s
5.07
that correct?
:?1r. Tlancure. That 1s correct.
If there t? :ac to be any co:s#lict between anyone that ?,ou`d
be doing busineos with the Public Builcln Z3 Sez"1ce or he
was to take no part in It.
, that car. be vezy easily explained. Dccau;e o ' 'E~i3e
T1o:?i
baclcgvovnd of Strobel and his #irr7, they !Jere es.iinently q? li#lec
to Judge engineering, rlxnaz er avchitectura? oxft
tion #irr.i that 'could be bidding on Govcrsirnent bu.:lnos::.
a 1
..c
wanted that :nzovrledge. And I Pelt that Just becauze #i.rm,
maybe because of thoir expcrie:ice or pro.m.i nonce, had done
businecn with his farmer firm, they should not ba barred !'rors
soliciting Government bucinecs. And _ r that cace, then, I or
someone in the Denartr.!ont that had nothinL to do 'ri the the oper-
atlon, would rule on %,rhether t,*ioy were qualif ed, and co #t:rth.
The Chairman. Did you (i1L3cuan tr:tth arrybod i in the
Attorney Genera? ' c Office the question of 1:r . St obel ' : po= sona1
arrangement t?r:Lth Strobel and Salzman?
i?Iansuve. No .
I vras under the impreosior. that ?ir. trobel's counsel had
taken the matter up and had a dvisecl hisa.
The Chairman. With whom?
Mr. Mansuve. Well; that is that I d1d not ltnow, that ho
.i ;;ccn z..?vice3 the t tzex-c r_o coni-3'_ct Ir h1z act. vitieo.
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You nee, lup unt. pr v Ci or I evf se"A l 603 QA-I Fv? 8 0
jfflfft 5e oromn a
tion or their partnership, or the activities of the firm
other than their buaines3 relationships.
The Chairman. Did ?1r. Strobel tell you that tiie utter
had been cleared with !?lr. ownall, the Attorney Ceneral ?
Mr. r!ansure. No, there was no rienticn of that, He 5a:Ld
that It had been c? eared, but no idcni:-? "'ication, and -ownall I s
name never camo into the cciscuc33.on at all, the ttornc.y General.
The Chairman. Did you take up the r. l;te:- of 12 r. Strobel
with the General Services Aci: ini stra tlon lc,al staff';
Mr. !4ansure : Yen, I did.
The Chairman. And will you tell us about that?
-
Mr. Tiansure . 1!ell, v we have a conflict or Interest state
m ont which we all slen, or anyono that c o_ics from outside the
Government Into the Govern:.-v--nt. And I discovored that in --
I want to get these dates correct -- that In Dceem bcr, 1954,
that conflict of interest staterient had been =fined condition-
ally, or with a reservation.
So I aakod our ConplIanco Depaz-tziont to check into it; at
the carne time I said that we should iZ~=~?e a lint of their clients.
Now, the reason for that was ail Co ciraplo. ; e felt that
we could be he _~_ u._i If via- had that 1 l::t . It was not in a critloc 1
vein that v.o asked for t1~1t: t, :.ut we felt that our buclnesa
beinc placed all over the UnItcc! Stator, that is, the Government
business, that It would be vary :~cs::ible for sc::embody to bid on
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509
a job unbeknown to the Coanaitis_=over, which would be handled
r:1thin one or our xeglons, that: miiht aon time gauge a source
of embarrasannent.
There was soma micundorutandint; rerci-ing the compiling of
that 11st, and we did not have the list until last AuWuzt,
P%uGu st of 1955.
Mr. tdaletz. 11r. Ilan-oure, I think you said that
Strobel sitied th?s code of ethics, ow otandardz coda, --)'n
December 27, 1934?
Mr. i?lansure. That its correct.
T?Zz. f'laletz. Could you tc-11 use thy he dic.in't t-%,-~?r-_:a~...~ thE..t Y ,--...z hove an- obl._gation and you have a tru: ec:s: p.
Ch=-tir az. You also believe, I ax urc, that in the eyes
oz' the ciubl It c the p---"-onal conduct of a G.werr?ment employee
becomes a part of the reputatIG.1 of -the Cove rnz==ent itae f, :is
that correct?
Mr. Mansure. I tir:.ll agree with that, and I thirst: partivular-
ly in GSA, because :re come in C=intact with all Gcvera.o=zt age.r.ci ec
as well as the public both.
The Chairman. Do you aubacribe to the prinelple that
Government employees in all their dealing= rust no Con_duet thet
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selves as to permit no possible basis for eusploiou of Uny un-
ethical business practices?
Mr. Mansura. I do. But I think that, that baste or suspicion
should be well rounded and-not gQnaral, because I am *% decd of
more things than over existed. Pe opl a Say tint they :nave Ha.naure
in their pocket, and have an In in G-3A. But If it '10 1%,=-m ed,
yes.
The Chairman. You would su'bcenibe to th, pr1netp1 e, Mould
you not, that the obligation to protc. t rul 1y the Xn r/e= r`a:3ta" or
the Government demands the avoidance cf c3 rcur. stances that %iould
invite conflict betv:een Self- 1ntcren - and ir-t'-Cr1ty?
Mr. Mansura. That to correct.
The Chalvman. Now, these principle: are set forth in your
Agency's Code of 'thi ca, and I think they are admit-able principles
a
Section 4 or the General Services Adm =n13trc tion Code of Ethic
requires prior written approval before any employee cr_n engage
in any outside business activlt~r. That 19 correct, 1: n't it'?
Mr. Mansura. That t s '1 s _:t _ And we en1 or-co th`t very
strictly.
The Chairman. rid Mr. Strobel obtain written approval :rroca
any General "?^ ~ _ cis s :Aml_nl strati! on off? elal to engage in private
business activity?
Mr. Nanouve. Well, not to my 1nlo1:1edge . But, Mr. Chals an,
he wasn't supposed to be enaaCed in outside business activity.
The Chaixin3rs. no was not cuppo^ed to have been?
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Mr. Mansure. WO .
53.3
The Chairman. low, you may that you were unaware that Mr.
Strobel did engage in outaido tuainess activity, In that correct-?
Mr. Mansurc. t.'el l , I vioul do' t %:ar_t to pass judgment on
that until I had a chance to review: the hearing' of this ccc2-
mittee. I don't know whether he did or t:hethe r he dl! dn_ : t, but,
of course our policy- vilthin GSA is not to eneago in outzide
business activities except where specic.l pcrsnit;slon `-az been
given, and then there is no conflict with the Govo n ont :.1 th?n
Governmont.
Mr. Maletz. ?Ir. Mansuvo, did you hoar the :e:itleaozy thia
morning concerning Ferrenz and Taylor?
Mr. Tdansure. I hoard a part of that- test! monyy, yes.
I.Ir. . ?1aletz. And I take It that ycu '.%c ar thz.t &I-r- Strobel
testified that he and Mr. 3ch:-t;crz did ao? i cit Fcrren : and Taylor-.7,
Mr. Mansure. I hoard that mart of it,
Mr. Maletz. fo:-r, vta !-ix-. Strobe1 Cuppo :e'.: to do th -- c
It In comnllcance with your Cote of rth1c for .?ir. to
engage in that activity?
The Chairman. That type cf activity.
Tor. Ma nsuro . of course, I don : t know .-:hat happened at the
meeting, but ?f It was solic''_tation or busineza, no.
M. Maletz . '.Mould you say that the sot icitatlon of by Mr. Strobel would constitute a violation of your Code of
`;a . 3U ?
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514
Mr. Mansura. Well, there would definitely be a conflict
in a person's judgment, and ba ai ca11y there would be a contl l clt
with our Code of Ethics.
The Chairman. Ilow, 3ectIon t, of the G-nora1 S erv1eea
Administration Code of Ethics regt:irc3 every employee, and
irrespective of the position he occur^'.es, to zub It to his
immediate superior a report of out3lde connections, 11at1ar all
personal or financial rolatlonchips :hi ch ht- ha n or formerly
had with anyone dolng bustne33 with the Gonvra1 -4er vica5
Administration, or which there '-s rca3 on to bel iov' night do * n r
business with the General Servlcoa J dmin_i8trati on. aT t In
correct, Isn't It?
Mr. Mansure. That to right.
The Chairman. And Section u al3o prohtb`.t: --v ry employee
to take final action with respect to any attar in :?3._,c:z such
relationship or connection 13 Involved until authoriza-
tion is received from the G--neral Serv; cea P,dmini3tratton Offlct
of Compliance, that is correct, 1 n't it?
Mr. Mansura. That is correct, ;l :3, a! r.
The Chairman. Trott, r?h:en Kr. : troba1 was First employed by
the General Servic*" A3;,s1Lr1::t:-ation I take it he did not auboit
a report of b+ts cnat3id e co^~:~ coons listing all financ'! al
relationships. And do you concld;,-r fallur.c to do so a
second violation of the Coda of Ethics of your ACancy?
Mr. ,'?ianex-a-c. Mr. Chairman, I don't lcnotr what you mean by all
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of his out sgroy`1S91e ~~~Q~~Bj,9-0~$QIk~~00~00A11-5~n = t o over,
any holdings that Mr. Strobel had; we discussed the
part.
The Chairman. Did he Curnl sh a list of all his tinancl =1
elati onships?
Mr. Mansure. T?o, t:e did not go into that.
The Chairman- When he c_ s sux ed his job?
1?Ir. 1.ansure. '.e did not Co into that, just the rli.:ct:=- =oxz
pertaining to his principal ounce of income.
The Chairman. But he did not subml c its -i na- r_c a?
shins in Coto to tr=o depc.?'t:7: ;:1t 5:~ ,n 1-z ~.3Sei:aE'ES =3; w~da=t- 3=
?oll, I cjon' t x::30:: ::hE L ?Z~: r ~i~ Z: 3a Ze
MY*. ~.1ansure. :l
Division has that or not,
r r..,..`2c n' t ::ant -o
-them, it ?.:ould be submitted to whet if ::e _;.avc
The Chairman. When a vio? aticn of th,3 Ccclr- of F1
to your attention that action do you take?
Mr. 1?lansure . Well, if the--a is a Viol atic3$_, of cou3':~'
we can't keep the person in Govornm. ent employment. But ::e have
to he ve grounds and justification for the violatior_. .
The Chairman. Did you take any action with reeferea:ce to
your lniowiodge of Er. Strobel : s possible outside activities?
Mr. Mansure. I beg your pardon?
The Chairman. Did you take any action with reteren.ce to
Mr. Strobel in that regard?
Mr. r.1ansurc'. W-111, tY-_ _ s it e
act's s=i?-ie?^, 1 .. r e- *,a :'are
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have juatA d?J s~ ~Q 0~3~ 1~4-RC P5 Q tO~~ 388Q~1c~ita? iry oy
previous statement, that if it J a wilful violation -- of acurse,
if it is something that has happened that ..a not deliberate, or
uhera the individual did not realize the zituat l on, that other
statement I made won 1d be a little too F;l-neal, because our Code
of Ethics covers ever-y body ' in GS % .
The Chairman. i-'ell, he m{ ght not have beets vtlf-il,
might have been with knowledge.
bu-0 1t
Mr. Mansure. troll, I %;ant to qual toy t mat b carpi 'tte have
some people that we permit to drive a taxicab, oir- oe? ~t sil= -
-But I just want to qualify thatf s-*Zatemcnt, bac4.uae it covers all
of our people now. tl
The Chairman. Now, turn t o the batter of thin ax~ased new
$k6 million CIA building. You have had some c:_par11cnc with
that, have you not?
Mr. Mansure. Yes, I have.
The Chairmen. And you would Say, vro:-l*.3 ;,-cu :t, ~ha that
is a very substantial job, and as I think has L ~an inc:icated by
statements by you in conversation z'ith Strobel, t2:at that would
be deemed an architectural plum, : z. that correct.
Mr. Mansura. Well, we feel it would be. That is a very
substantial construction.
The Chairman. Ant for ono z-eason_, b::,c_,u::r
ts:F3 architectural
fee will come to s came =1:i in th9 nc Chboh_ o< of $2 c 1 lllon, 1s
that correct?
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Mr. Maneure. 2 don't knot: what the roe would Cc=* to . But
it would be a substantlal roe.
The Chairman. Nona, the tosti?ony baforo our oowoltteo
indicates that Mr. Strobal, as Commissioner of Public Buildinf;s
participated In preparing a list for the CIA of eo-c.l.led out--
standing architects for the CIA job. Are you famlllar with
that 1i:zt ?
Mr. Mansure. Tio, I am noir Familiar i,-1th rho 3 { st, but I
ltinotr or the list. But 1 would 1 ike to cor_:%act that. I bel Cleve
that the list was prepared by -;he atai'f and not by Jr. "wtrAbel
personally.
The Chairman- Well, he t..stii'leu this morning that La
parts c; pated In the preparation of It.
Mr. Man3ure. ?-Toll, ho probably did.
The Chairman. now, the testimony a1:ao indlcatos that- ththe
list which Mr. Strobel partic1pz tcd in preparing comprise: some
14 architectural firms. Was I ; ever brouj;ht '::o your tterrt1O:n
that these 14 names
Mr. Manse e _ Not the ape -_1fic list, but ue have di :chased
that, because I have been In o_i these negotiations ever since
the beginning, there has been some oloundt:rstant in,g reear inl
the construction on It.
The Chairman. well, did you }mow that 14 of tho3c firms
I withdraw that.
Do you hncw -- and I t o3tit.J:?t,3 3e w;2c_-2 z :-d it
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515
was repeated this morning -- that four of the firms on that list
were at the very time the list s:ac ziont to the CIA active olienta
of Strobel ' a private firm?
Mr. Mansura. No.
The Chairman. Was that brought to your a2tontlon?
Mr. Mansure. No, I did not !:no-.s that. But I eti 11 feel
that even if I had knozm of tha-: t1nay zhouldn' :. have been k--pt
off the 11st if they were qualified.%nd that %,a ,ouid hz ve done
In a case like that ia, when it aurae to my attention, w?--,en t:e
time came for active consideration, V%u C7omia: ioner would not
take any part In the do cl aion on the Sole ct? on of the arch1teof
or the engineer.
The Chair n. rTc z, th3 teiit moues Ia also clear that- t;wa
additional firma on the fiat were old eliento of :iv. Ctrobel' a
fir T-,ere you aware or that?
!1r. Manoure. No, I was not.
The Chairman. The tont'Imony is also clear to the etrect,
that an additional tiro firms, the ones troei whom Mr. Strobel' a
Firm had tried in some c:sanner to Cet busin+ess3 " n t*' pz st, thus
making eight fins out of III with s:hi eh M. Strobel had bu$ir ocs
rolationshipa -- was that called to your attention?
Mr. Mansure. No, It r:acn: t called to ,my attent! on. But
I believe that there is an ancirc? to that. We haven't COV20 to
the point of neGotiatlon yet. nd I could definitely nay that
if we came to a point of n: ot3 a .ion It z.ould to called to ray
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The Chairman. By whom?
Mr. Mansure. By the Commissioner, or by aom? member of h.13
Starr.
Mr. Maletz. I'?'r.i?lansurc, at tiiat particular tiazo --- and that
,-;ay the =first part of Au u3L, ?955 -- Mr. Strobel lac Sao . =at e
available to GSA a lint o1? the c1 lent,-- of Strobel a.r_c a;:.1=a.:~'.,
1:n1 that correct':
,sir . F?Ian3ure. That 1 ~?~ ` ^ t . .: e got t ha t 1-1-3t on
!?ir . ?Ialetz . AuguDt 30, 195577
Mx-. 'L?iansua:-e August 0 tl , that J s cor 'oc c.
The Chaixman. T:otr, dlci lr. Strobe2. 1 nTo:m-i you
private business relation3hip--with the fir' 3 he v:as ~? :oc- ~:=rc -
Ing for Government bucine3^, c;id he inforc! -you?
Mr. !?Iansure. 1?'o hadn't 61 c cu s 3 eci i t . EL3 t did he
recommend any of these final, they r:ore just on the 113z; for
consideration. lie still 3.::.r_' t recommend.-r anyone on .he jo--
The Chairman.
Mrs. Mansuro
The Chairman.
Mr. 1'?Ian3ure .
The Cha"~rnar_.
Mx,. 2?lam ure .
The Chairman.
(Du ?4r.
That ::a a 11 st that -.:as sent t a Yes.
nd you c-ra _.:)t i::;.'ox ed by Iir. Strobel i
No, t: e d :i T? ,: '' r'u 3 # that.
I bag you l- pardon?
we did no4l di scusc that, no.
Now., In v"; CS?r of the testimony I have cit**d,
~t?r'ohc'1 ' `3 o: f4 c ~:.~ l'' :SG:t f_'1 thi
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520
proper or gelgj 21W/Q?/Q3 aClOf4W&%"WR&Q02@(SOQ@ to or 1tbics?
Mr. Mansure. Well, you are epeaking aboue the oonduct
regarding this list or firms?
The Chairman. 111s participation in the preparation of this
113t, and the submission of It to the CIA where these firms had
had business relationships with him, or intended bust .eaa relatlon-
ships, or were having relations with him at the very tine.
Mr. Mansure . Well, I %.,Ycxtld :-:ant to defer any decision on.
my part to the outcome of the h: arinCs of the committee and the
judgment of the conmml ttoe mombei-e, because in t1-_e first place I
don't have any background on whether any influence s:as used or
not, it would be a question of whether thoro was ir-Muence
involved In It_
Just because the firm --
The Chairman. I didn't mean to inwerrupt you.
Mr. Mansure . I say, ju=t becauso the firs happened to be
a client either In the past, o= was at present cn the list, Nr.
Strobel would not be in a pos! tton to make th finial on tht
Firm.
The Chairman. Aside from the final decision, do you think
It was proper morally for Strobel to inolud _ t_iowc names on
the list presented to the C_ .chore he aersonall r p^ rti eipated
In some way in preparing tlmt list?
Mr. tlansure. I don't want to avoid the answer to your
question, but I would hate very much to out theso firms of high
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standing in a position
The Chairman. No, not these time, no, there is notb.ing
against these firms. And I don't want to triply that. ':3 3 it
proper or improper for Mr. Strobel in the pr-eparation of this
list to put these firma on th$t 11st, or even to participate
_n the orocOssing of pu-;tines -Ur:ese narsc)rs o - ?
;.Ir. Mansure . 'Jell, with L h current
The Cha lrcian. !?'it'nout d1--closing It. ZO you.
Mr. h1an3urO. with the currznt dcve to-~mcnt3 I feel that '.??sz.t
should havo been done was, the matter Should have been called
my attention, and then lot me :-evlow the qualif1Catlon3 of the
firms and put them on the 113t or not.
The Chairman. But he did not do that"?
Mr. Mansure. No. And I think the reason for that pz-rt? 3
was due to the fact that it ~?:a:~ still In the rogotiatlon : t3ce,
because GSA at pre sent J L!3 not carryinG; on the pvo ;.ram for CIA.
they are handling that themselves.
The Chaim-man- Put It In she negra tiVe . d--s 11L p-'open 3'c:-
nim not to have called those facts to your attention?
Mr. Mansure. Well, I thinnkk that probably the reason by
didn? ti. do It was because, as I say, it ~?: =s sty! 11 in the ncgot?i='--
tion stage. I want to answer It this way. T's.ore 1:!; a feeling
within GSA that we are not going to handle the CIA project.
The Chairman. Now, your an3:JOr In not q?.iite responsive.
to hziv&i disclvr:ed tl_c
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information to you In the preparation of that list in which he
participated?
Mr. Mansure. Yoe, I would like to have had the infor atton
disclosed to me.
The Chairman. You would have liked to have hid it, but do
you think it was Improper for hici not to havt!- d 1aclczed It to
you?
Mr. rlansure. Well, I acs trying to ana,--oz 3- aun qv:-is-ation
because I think that the reaaon for It not doz=e is
because we were not at the point of docl eior . I believe 1t
Would be dIr clcaed to me ahon :?:e Came to the T o: nt of u;.* cting
architects and engineora.
The Chairman. He Should have disclosed It t7 Joy:?
Mr. Ma assure. when it cacao to the point or dectslon, yen.
The Chairman. Should he have d i a cl o3ed it to you %-:hen the
lint was submitted to the CIA?
Mr. Mansura- what I am trying to oay In ay razz.:.-~=- M=='~
I have a s3Lneefr33 t' 'e1ing that the x'c sozi the =ab:o ' :a&a nta.t
d srue:.ed .tth rse was becau a we 1~.:--v4 a pretty heavy workload
and were riot in, to the point beyond the atage on
any of these firma.
There were come firYas that ccnaidercd for It, but they
were not satisfactory to CIA.
Mr. Maletz. 4r. was 'mot In C (aplianco ~c! .h your
Code of Ethics for Mr. trobo1 to have part:Iclpated in preparl.ug
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a 11st for submission to the CI?% wit thout notifying you that eight
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of the 14 fires were ones .r th wtii eh Strobel and Ea1z z.:.n had
private business relation.nhipz?
!.!r. Mansura, Veil, T_ :~o _r1d ham to ask for a lei-.s3 opinion
on that.
Mr. Elliott, I dcn't '-rjo:: fr,_r ot_r Coda of sehethc'r
It .-could be or no' U.
Mr. Elliott as I tol'! you
T would pref'e: tQ de: cz- r.TI 2 1 e~ lr_i~:z L fc~e.!