FACTS RE CONTRACTS AND MCCONE-KAISER RELATIONSHIP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000400030087-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 15, 2016
• Document Release Date: April 15, 2004
• Sequence Number: 87
• Content Type: REPORT

Approved For Release 2004/05/05 : CIA-RDP64B00346R000400030087-4
e Contract and McCone- eer Rei.ati
Mr. McCone and Mr. Kaiser together with a mimber of others were associated
in shipbuilding during the war. All such mutual undertakings were dissolved
shortly after World War 11, and many years prior to Mr. McCoue's appointment
Under Secretary of the Air Force, Therefore, his statewnt in June 1953
that he had no business relationship with Kaiser for may years, was correct.
The statement made on July 3, 1258, at the hearing before the Joint
Committee on Atomic Ek-eray regarding the Jointly owned cry to move bauxite
r Aluminum Cc Tauy was also correct-this cca pony was formed in mid-1956s
out of Mr. Mccone'e successful bid, in competition with a great many
ea, for a long-range contract to move bauxite for Kaiser Aluminum.
worn testimony received by a subcommittee of the House Armed Services
Committee, developed that the award of the C-119 contract to Kaiser-Frazer was
made by the Air Materiel Command, approved by the Air Staff and then approved
by Mr. Z& one as Under Secretary. This contract was necessary to meet a
Presidential Directive for a rapid expansion of airplane production capacity
and a directive of the Secretary of Defense to establish second sources for
all planes which were needed in quantity to meet mobilization requirements
decided upon after the outbreak of the Korean War.
Fairchild's Hagerstown capacity was employed to its limit and the
judgment was made by the Air Force, and approved by Mr. McCone that the
and source should be Will Run.
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 Approved For Release 2004/05/05 : CIA-RDP64B00346R000400030087-4
C=O
n Radio January 13, 1962
"He also awarded his wartime partner, Henry Kaiser, with a quickie
airplane contract at an eexhorbitant price, when he, McCone, became
VaUr Secretary of the Air Force. I
contract to the Kaiser-Frazer C as y for three times
Govex'nm r t was paying to the Fairchild Corporation."
" . Under Secretary of the Air Force he awarded a
1930 Kaiser had a heavy overhead, a factory at Willow R
which was closing down, and a large supply of machinery on, hand.
close associate with whom he had been engaged, in West Co
Jca McCune, got him off the ham. cConee produced a
contract to as utacture the C-119, or Flying Boxcar.
waxy U. article
continuing close financial connection with the Henry J.
to
1958, McCone said "Yeas I have sow business relati?>nshipa
er ia much as a jointly owned cam, 25% of which is owned
and by Kaiser Aluminum, has a long-range contract to transport
a bauxite from Jamaica to Baton Rouge"
Cone was being investigated regarding the C-119 contract
claimed, "I have had no business relationship with Kaiser
25, article
Under Secretary of the Air Force, had participated in awarding
airplane contract to Henry Kaiser, a former business associate.
der pronptly ran up the cost of producing the C-119 Flying
ly five times the previous price.
Approved For Release 2004/05/05 : CIA-RDP64B00346R000400030087-4