STATEMENT OF PETER A. STROBEL COMMISSIONER OF PUBLIC BUILDINGS SERVICE GENERAL SERVICES ADMINISTRATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R004100060005-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: December 12, 2016
• Document Release Date: April 2, 2002
• Sequence Number: 5
• Publication Date: October 29, 1955
• Content Type: STATEMENT

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Dictated by Colonel White:
STAT
" In order not to be conspicuous, I asked I Ito have someone
monitor these hearings. This is a rough summary prepared by his man.
It is the only copy I have and I have not had a chance to analyze it in detail
in conjunction with my own files. I have asked Houston to get a complete
transcript of the hearings as soon as they are available. On pages 5 and 6,
I have red-lined some comments which might be meaningful. Your letter
to Mansure saying you had selected Harrison and Abromovitz was delivered
to GSA early on the morning of 4 August, and it was on the afternoon of the
4th of August that I met with Strobel and discussed the selection of Harrison
and A.bromovitz, as well as his desire to associate with de Young, Moskowvitz,
and Rosenberg."
~41o23'~
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At Washington, D. C.
On 26, 28 October 1955 the House Judiciary Committee of
the United States House of Representatives conducted hearings
relative to the activities of PETER A. STROBEL, commissioner
of the Public Buildings Service (PBS), General Service Adminis-
tration (GSA) that might involve "conflict of interest" with
the United States Government. The hearings on the above dates
were monitored and following is a brief resume:
After the opening statement by Representative CELLER
(Democrat of New York), chairman of the committee, who out-
lined the nature and scope of the inquiry, STROBEL was called
as a witness.
Before the questioning of STROBEL was commenced, he was
permitted to read a statement, which statement is attached
hereto and designated Exhibit "A". Then the formal question-
ing of STROBEL was commenced.
STROBEL's participation and interest in the firm of Strobel
and Salzman was then expanded upon. STROBEL advised that the
partnership was organized in 1945; that the partnership agree-
ment is renewed annually on the first date of the new year;
that STROBEL is the only partner who has any capital investment;
and that risk of loss, if any, falls on STROBEL. Further,
STROBEL stated that each partner is guaranteed a certain sum--
in the nature of a
drawing
account--and the remaining sum,
after expenses, is
divided.
The present contract calls for
90 per cent of net
profits
to STROBEL and 10 per cent to
SALZMAN. Sometimes there is an adjustment of the percentages
if some of the firm
's busin
ess has been obtained through the
contacts of SALZMAN. The firm is for all practical purposes
STROBEL's. At present it has thirty-two clients. Its jobs
average approximately $7,000 and it employed twenty to twenty-
two technical employees.
The first inkling that STROBEL had he was being considered
for his present position was in 1954 when he was requested by
the Republican National Committee of New York to submit a
brochure on his background and abilities. He was recommended
by HARRY SMITH, a friend frown New York who is in the photo-
graphic business.
On 1 April 1954 STROBEL cant to Washington and was appointed
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(on that date) as a 5 day week, 8 hour-a-day consultant to GSA.
The position of commissioner of the PBS was occupied by a party
who was about to retire, and STROBEL was entered on duty as a
consultant to await the vacancy.
On 1 July 1954 STROBEL was appointed commissioner of PBS.
STROBEL stated that the matter of his private engineering
firm was called to the attention of Mr.'MANSURE (administrator
of GSA and STROBEL's superior). In fact, STROBEL made it plain
to MANSURE that he could not accept the government appointment
unless he continued in the engineering firm inasmuch as it was
all that he had.
Counsel MALETZ (of the committee) asked STROBEL if he
didn't tell him (MALETZ) a few months ago that his connection
with the firm was checked through Attorney General BROWNELL
and TOM STEPHENS of the White House staff. STROBEL could not
remember telling MALETZ that. STROBEL stated that his "friend"
HARRY SMITH supposedly checked on the propriety of retaining
the interest in the firm and later advised STROBEL that it was
proper for him to continue in the firm of Strobel and Salzman.
STROBEL stated that he did not sign the GSA "standard of
conduct" form until 27 December 1954 which was some several
months after his appointment. He let the form lay on his desk
for several months. When he did sign it on 27 December he
made certain reservations about his interest in the firm of
Strobel and Salzman.
It was clearly brought out that STROBEL never received
any official approval, either written or oral, to engage in
outside activities of his firm.
STROBEL pointed out that after his entry into government
service he relinquished "active management" in his engineering
firm, and made this statement on the form that he submitted
on 27. December, noted above. He still received a weekly summary
of the business activities of the fizm from SALZMAN, and, em
hereinbefore noted, he still received a percentage of the profits.
STROBEL stated that during early 1955 he was requested
to submit a list of his firm's clients to the compliance divi-
sion of GSA. Several months elapsed and the compliance division
again renewed the request. Finally on 31 August 1955, STROBEL
filed a list of his firm's clients with MANSURE.
It was brought out that STROBEL recommended the archi-
tectural firm of Serge Petroff to a subordinate in PBS to be
hired for a "rush" remodeling job of a New York City building
that was to be partially occupied by the Immigration and
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Naturalization Service. This was in August 1954. As it turned
out I & N.S. abandoned glans to move into the building and the
Petroff firm was given 9,000 under an abandonment of contract
adjustment. It was admitted by STROBEL that his firm had hired
the Petroff firm for four other jobs during 1952-1954. STROBEL
justified the recommendation of the Petroff firm by stating
that it was a "crash" job which had to be accomplished; that
there was not sufficient time to follow the usual procedure
of obtaining bids; and-that he was personally acquainted with
the Petroff firm and he was confident that they could meet the
deadline. Also, STROBEL pointed out, that architectural firms
don't show much interest in remodeling jobs because that type
of work does not involve work of original design.
STROBEL admitted that he talked in 1955 with L. W. (Chip)
ROBERT (former Democratic national committeeman) of the firm
of Robert and Associates about obtaining a contract for the
firm of Strobel and Salzman on an incinerator project in
Dearborn, Michigan. The conversation took place in Atlanta
while STROBEL was there on government business. The Robert
firm had been a client of STROBEL's firm. Also, it was brought
out that the Robert firm was awarded a contract to make some
changes in the plans and specifications of a communicable
disease center in Atlanta and STROBEL had recommended the Robert
firm for handling the modifications. STROBEL justified the
recommendation by stating that the Robert firm had the original
contract for the disease center and it was both economical and
ethical to let the "modification contract" to it. The Robert
firm had all the original data in its office whereas another
firm would have to spend extra time and money to examine the
supporting data. Also, the ethics of the professions discourage
one architect from taking over the work of another.
A transaction involving the architectural firm of Chapman,
Evans and Delahanty of New York was discussed. This firm had
been a client of STROBEL's firm and it was awarded a New York
contract by PBS. Testimony disclosed that STROBEL made no
.recommendation to the party that handled the contract letting.
In addition, the party that let the contract (LAWTON of PBS
in New York) testified that he had no knowledge that the
Evans firm was a client of STROBEL's firm.
The above pertains to information developed in the hearing
for 26 October.
On 28 October 1955 Chairman CELLER opened the hearing by
advising STROBEL that the FBI had been called into the case to
investigate possible conflict of interest violations. The case
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was referred to the FBI by the Department of Justice on 4 October
1955, CELLER stated. STROBEL professed ignorance about the
FBI being called into the case.
At the opening of the session of 28 October, STROBEL stated
that he wished to correct the record. He stated that his per-
centage of split with SALZMAN was 65 per cent to STROBEL and
35 per cent to SALZMAN in 1953. In 1954 it was a 60/40 split
with the larger to STROBEL. STROBEL said that his income from
the firm ran approximately $60,000 in 1953 and $30,000 in 1954.
He expected it would be even lower this year.
It was brought out again that on 31 August 1954 STROBEL
submitted a list of his firm's clients to MANSURE. The request
had come from the compliance division of GSA. Two of the firms
appearing on that list were Carson and Lundeen, and Wilcox and
Erickson. It was brought out in questioning of STROBEL that
LUNDEW and WILCOX were appointed by PBS to a panel to review
the qualifications of architects on file in PBS's office.
Each received approximately $3,000.
A contract was introduced in the record between the Corps
of Engineers and STROBEL's firm dated 31 March 1954 for the
design of some helicopter hangars. This was one day before
STROBEL entered on duty with GSA as a consultant. STROBEL
explained that this contract had been in the negotiation stage
for a considerable time. After the contract was signed, the
Corps of Engineers wrote a letter to STROBEL's firm asking
if STROBEL had disassociated himself. STROBEL was questioned
by MOODY and ELLIOT of the general counsel's office of GSA.
Also, STROBEL discussed the matter with his "friend and advisor",
HARRY SMITH, who had the matter straightened out through JOHN
ADAMS of the Department of the Army's office. STROBEL never
heard any more about the matter, the contract was fulfilled
and the firm received payment.
There was testimony with reference to another matter
involving the Corps of Engineers. STROBEL testified that be-
fore he entered on government duty his firm had performed a
contract for the Engineers. In the course of the contract
the firm had to do additional work and were claiming $7,500
additional compensation. After entering on government duty
he made several trips over to the engineers--on his lunch hour--
to negotiate a settlement. The matter was settled for $3,000.
STROBEL explained his role by stating that he wast he only
person in the firm who knew all the details of the extra work.
One other man, who knew the details, was no longer with the
firm.
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At the afternoon session of 28 October 1955, the matter
of the Central Intelligence Agency's new building were dis-
cussed. This discussion took place between approximately
2:30 and 3:30, PM.
The questioning commenced with Counsel MALETZ asking if
STROBEL knew MORTON BLUMENTHAL. Yes, he was introduced to
him by MANSURE and had several meetings with him, one at the
National Republican Club of New York. BLUMENTHAL, it was
brought outs had some connection with the architectural firm
of Young, Moscovich and Rosenthal (hereafter shown only as
Young's firm.) STROBEL was vague as to what connection
BLUMENTHAL had in the firm.
Some time in December 1954 and January 1955 STROBEL had
some discussions with BLUMENTHAL regarding some business deal-
ings between STROBEL's firm and Young's firm. The two firms
on 27 May 1955 did enter into a $30,000 contract for a New
York private building. However, according to STROBEL the
contract was cancelled on 4 August 1955 when STROB learned
that Young's firm had a contract with GSA and there would be
a conflict of interest between STROBEL and the government.
It was also brought out that BLUMENTHAL had handled all the
negotiations for this contract.
It was also brought out that BLUMENTHAL had received a
$12,000 brokerage commission in 1955 for handling certain
details in connection with the renewal of a lease in New York.
DANIEL J. REISNER ( or RIESNER) of New York had collaborated
with BLUMENTHAL on the matter. From the testimony it appeared
that actually the brokerage fees to BLUMENTHAL and REISNER
were paid by the owner of the building and not by the govern-
ment, the lessee. The matter was brought out when the owner
had to file a schedule of expenses with GSA when the contract
was signed. STROBEL stated he knew nothing about this trans-
action.
STROBEL declared that there had been a tug of war between
GSA and CIA as to which agency would have the responsibility
of handling the contract for the plans and specifications for
the new $46,000,000 CIA building. In July 1955 GSA was re-
quested to furnish the names of qualified architects to CIA.
GSA has a policy of selecting local architects to handle
government projects, if it is feasible. In this instance--
because of the size and scope of the job--that policy was not
followed. Instead, GSA examined their files and made their
list of selections on a national-wide basis insofar as
qualifications were concerned. Other large projects were also
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also in the planning stage such as the State Department annex,
Smithsonian Annex, AEC building. STROBEL participated in the
selection of the list that was sent to CIA. The names of
eleven firms were sent to CIA and six of them, according to
testimony developed from STROBEL, were either clients, or
had been clients, of his firm, namely: (all phonetic spellings)
Urban, Brayton and Barrows; Kelly and Brussen; Harrison and
Abromovitz; Eggers and Higgins; Shree, Lamb and Harmon; Young,
Mosoovich and Rosenthal.
It was brought out through STROBEL that at the time the
name of Young's firm was sent to CIA that it had a contract
with STROBEL's firm. (note: this contract was cancelled 4
August 1955, according to earlier testimony).
The list of firms sent to CIA were from all over the
country.
The actual letter containing the list of architects (11)
that was sent to CIA was not placed in the record. The letter
that was placed in the record was directed to the Smithsonian,
but STROBEL stated that the same list was sent to CIA. Appearing
on the bottom of the above letter, which was placed in the
record, was a notation that it was sent to CIA.
STROBEL's testimony was interrupted to allow JOHN E. HILL,
director of the compliance division of GSA to testify regarding
the above letter. A heated argument developed between Chair-
man CELLER and Representative KEATING (New York) at this point.
KEATING wanted to cress-examine--as CELLER characterized it--
HILL but CELLER stated that it was not in order at this time.
HILL was dismissed as a witness. STROBEL resumed.
The testimony of STROBEL brought out that RAY DINEEN,
a special agent in the office of compliance and security of
GSA, had made a special request of STROBEL for the list that
was sent to CIA. No further discussion of this point.
A letter was introduced into the record to MANSURE from
ALLOT DULLES dated 3 August 1955 selecting the firm of Harrison
and Abromovitz for the CIA building. DULLES stated therein
that he was personally acquainted with HARRISON and his pro-
fessional reputation.
Placed into the record were transcripts of telephone
conversations between MANSURE and STROBEL on 4 August and a
day or two after. These conversations were principally con-
cerned with the selection of the architects for the CIA building.
The Harrison firm had been selected by DULLES but STROBEL
thought that the job was too large for one firm and that two
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or three firms should be associated on it. STROBEL, according
to the telephone transcripts, did not appear to be plugging
any other firm by name. MANSURE mentioned the name of BLUMENTHAL
and his firm (Young's firm) for consideration`,'fthe CIA job.
STROBEL said the Young's firm would require a strong local firm.
MANSURE mentioned that Young's firm had lost out on the AEC
job and should be considered on this one. From the transcript
it appeared BLUMENTHAL had been in touch with MANSURE in be-
half of the Young firm.
In the meantime MANSURE had checked back with DULLES who
advised that he still wanted the Harrison firm to handle the
All during the questioning STROBEL professed little
knowledge about BLUMENTHAL or his activities.
STROBEL testified that he met with certain CIA officials
shortly after 4 August 1955 and suggested the name of Young's
firm to work with Harrison's firm. It was a large project,
and more than one office should handle it. It would require
eighty full-time men working on the board at one time STROBEL
told the committee, and he did not know any single firm that
would take on such a job.
On 10 August 1955 GSA and CIA entered into an agreement
for the new CIA building, The Harrison firm was selected to
handle the architectural work. A letter, embracing that
agreement, was entered into the record.
On or about 12 August 1955 STROBEL advised Young's firm
that it was being associated with Harrison's firm on the
CIA building contract. STROBEL stated that it was done on
the recommendation of MANSURE.
A letter dated 18 August 1955 from Colonel WHITE of CIA
to GSA was introduced into the record. It advised GSA that
Young's firm had been placed in a very embarrassing position
by being associated in the project and that it should be
advised that it will not be employed on the CIA building with
Harrison's firm.
.LLe?"
A few days later AZiW DULLES advised GSA that he wished
to have the contract with Young's firm and Harrison's firm
cancelled.
STROBEL further testified that the matter of the CIA
building is back where it started--still a tug of war between
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GSA and CIA as to who has the responsibility for designing
the building.
Attached are certain newspaper articles designated as
Exhibits:
Exhibit B - 27 October 1955, WASHINGTON POST AND
TIMES HERALD
C - 28 October 1955, same newspaper as above
D - 29 October 1955, NEW YORK HERALD- TRIBUNE
E - 29 October 1955, WASHINGTON POST-TIMES
HERALD
F - 29 October 1955, NEW YORK TIMES
The above exhibits are attached only to the original
report, and not to the copies.
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STATEMENT OF PETER A. STROBEL
COMMISSIONER OF PUBLIC BUILDINGS SERVICE
GENERAL SERVICES ADMINISTRATION
My name is Peter A. Strobel and since July 1, 1954, I have been
Commissioner, Public Buildings Service, General Services Administration. I un-
derstand that this Committee would like to know something about me and what I
have been doing in Washington. I am very glad to appear before you this morn-
ing to make a statement and to answer any questions you may have.
Perhaps a word about my professional background might be in order.
This background is: Graduate civil engineer, 1925; worked as a draftsman, de-
signer and engineer with various firms from 1925 until 1937; 1937-40, chief
structural engineer, New York World's Fair; 1941, chief structural engineer for
Army Air Base, Jamaica, British West Indies; 1942-1943, chief engineer, James
Stewart & Co., Inc., New York; in 1943, I established my own practice as a con-
suiting engineer and in 1945 the partnership of Strobel and Salzman, Consulting
Engineers, of New York, was established.
Strobel and Salzman is a consulting engineering firm doing professional
work, that is, preparing plans and specifications for civil and structural en-
gineering work in connection with all types of buildings and structures. The
firm's clients consist of owners, builders, contractors, fabricators, architects
and engineers. The firm has been most fortunate in acquiring a very high type
of clientele. The bulk of the firm's business has been for private enterprise,
although to some extent we have of course participated in the defense efforts
of this country. Among the projects of our firm have been manufacturing plants,
armories, railroad stations, commercial buildings, shopping centers and depart-
ment stores, office buildings, hospitals, university buildings and laboratories,
schools, apartments, churches and airport structures. A speciality of the firm
has been hangars of many different types which involved a few inventions made
by us. During the war, several hundred hangars were fabricated from our design.
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.When I came to Washington, I gave up the active management of the
business. I did not come to Washington for personal gain. This h been borne
out by the fact that the net earnings of the firm fe*3 in 195 tlf of what
they were in 1953.
I laid down certain basic rules to govern Strobel and Salzman in their
activities, during my term of public office. I have followed these rules.
Among them are:
1. Strobel and Salzman would disqualify itself from taking on any
contract or subcontract which involved or came under the juris-
diction of the Public Buildings Service of the General Services
Administration.
2. Strobel and Salzman would not take on any new clients (who were
not clients or in the process of negotiation prior to my entry
into public office) even for wholly unrelated work, where the
new client was interested in or in the process of seeking a con-
tract or subcontract with the Public Buildings Service of the
General Services Administration.
3. Neither the firm nor I would have any financial interest, stock
or otherwise, in any architectural or construction firm.
When I took office it was my understanding that under the law the firm
of Strobel and Salzman might properly seek and accept contracts from agencies of
the Government other than GSA. Pursuant to this understanding, the firm has on
a few occasions made inquiries about the possibilities of obtaining such busi-
ness. I have made no such inquiries, and the fact is that since I took office
the firm has made no such contracts with any Government agency. The firm has
completed one such contract which was let before I took office.
As a result of the business activities of Strobel and Salzman and
their comparative success, I am acquainted on a professional basis with many
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3 -
outstanding architects, engineers, and contractors, some of whom might look to
GSA as a source of work whenever we have a building program. As the Government's
contracting officer in handling architect-engineer contracts for building proj-
ects, however, I can assure you that no favoritism has been shown to anybody.
For many years the following procedure has been followed in selecting architect-
engineers: Local architect-engineers are used to the fullest extent. We soli-
cit all registered architects in the area of the project. In some cases we
solicit all architects in the state. They are requested to submit questionnaires
and documentation about their organization, and their present workload, together
with photographs of work done, and other information that may be helpful in
judging their qualifications. They are then rated by a board of three qualified
men in the Public Buildings Service who submit their recommendations to me in
accordance with the ratings. The record shows that I have followed the recom-
mendations of this three-man board in every case. The only contracts awarded on
a selective basis are those for the professional services of architect-engineers;
all others are awarded on a competitive-bid basis.
The record shows that two clients of Strobel and Salzman, namely,
Serge P. Petroff and Associates, and Chapman, Evans and Delehanty, both archi-
tectural firms with offices in New York, have done some work for GSA since I have
been in office. The fact that these firms happened to be clients of Strobel and
Salzman had nothing whatever to do with their retention by GSA. I shall be very
glad to tell you all about these cases in detail if you wish.
There has never been any secret about the fact that I have an interest
in the firm of Strobel and Salzman and that I have devoted some time to its af-
fairs since I came to Washington. On no occasion, however, have I attended to
the business of Strobel and Salzman on government time. I have not used govern-
ment stationery for my private business, nor have I in any way used or sought to
use my official position to further the interests of the firm.
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I have cooperated in every way with the Staff of your Committee, making
all my files available to them, for I do not wish to have any misunderstanding
about my position in this matter. I am now glad, to the best of my ability, to
answer any questions which the Committee or the Staff may have.
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