"Senator CURTIS. He gave you that direction over the telephone? "Mr. REYNOLDS. Correct, sir. "Senator CURTIS. And it was intended to be vague and misleading because you knew and Baker knew that the $109,000 represented more than the actual premium for which he was billed, is that correct? "Mr. REYNOLDS. This is a hundred percent correct, sir. "Senator CURTIS. Yes; and you would you sent a letter along with it, didn't you? "Mr. REYNOLDS. Right, sir. "Senator CURTIS. And that letter begins: 'Enclosed is the invoice as agreed.' In other words, that was as agreed and directed to you by Baker? "Mr. REYNOLDS. Baker told me that he and Matt had agreed on the amount, and how I should bill it, sir. "Senator CURTIS. Why did they make it 35,000-and-some-odd dollars more than the true amount? "Mr. REYNOLDS. Well, I asked Bobby why we didn't round it out to even dollars. It looked a little foolish, and he said, "To throw anyone off who would later audit it.' "Senator CURTIS. What was the excess for? "Mr. REYNOLDS. It was to be given part to me for being the bagman. "Senator CURTIS. Yes. How much? "Mr. REYNOLDS. $10,000 additional premium which was the equivalent of what you would call the contingency reserve loss earned premium portion. In other words, had I written this through a company I represented I not only would have made the $10,300 commission, which is what they call local agent or broker's commission, but if you have good contracts and your loss ratio falls below a certain point, sir, the surety companies will give you a contingency reserve loss ratio additional earned premium because you have developed good accounts, and "Senator CURTIS. So you got the $10,000 out of the $73,000? "Mr. REYNOLDS. I got $10,300 and something as commission as shown on the "Senator CURTIS. Out of the 73? "Mr. REYNOLDS. Right, sir. "Senator CURTIS. And $10,000 out of the excess? "Mr. REYNOLDS. Out of the $35,000 plus; that is correct, sir. "Senator CURTIS. What was done with the balance of that? "Mr. REYNOLDS. I disbursed "Senator CURTIS. It would be in the neighborhood of $25,000. “Mr. REYNOLDS. $25,000 plus, more or less; right, sir. "Senator CURTIS. Yes. "Mr. REYNOLDS. I delivered to Mr. Robert G. Baker $5,000, or fifty $100 bills, on five separate occasions. "Senator CURTIS. When this $109,205.60 came to you, what did you do with it? "Mr. REYNOLDS. I asked Bobby could I give him the money then and he said 'No.' He said: 'Stick it in a bank which you normally do not use so any of these people snooping around would have one hell of a time finding it.' "Senator CURTIS. What bank or financial institution did you place it in? "Mr. REYNOLDS. In a building and loan because Bobby told me I could get interest on it. "Mr. REYNOLDS. Let's see; Citizens Building & Loan. "Senator CURTIS. Where is that located? "Mr. REYNOLDS. In Silver Spring. "Senator CURTIS. So far as you know their records bear this out? "Mr. REYNOLDS. Yes, sir. To the best of my knowledge. "Senator CURTIS. And you put in the entire $109,000? "Mr. REYNOLDS. $109,000. "Senator CURTIS. How did you get the $73-odd thousand out? "Mr. REYNOLDS. I had to withdraw funds from the Citizens Building & Loan, have them subsequently issue checks to me that I could deposit in Suburban Trust so I could pay Hutchinson, Rivinus for their bill. "Senator CURTIS. Now, and Baker told you that the political end of it, $25,000, wasn't to be turned over to him all at one time? "Mr. REYNOLDS. Bobby told me he could not take all of the additional money and he would instruct me at which point and how much he could take. "Senator CURTIS. What were those instructions that followed? "Mr. REYNOLDS. He told me that he would like $5,000 at a time, sir. But only to do it when he told me, and he told me under no circumstances to bring him a check from me or from the building and loan, but to take that check and go to another institution or to obtain cash for it. "Mr. REYNOLDS. The other 10 would be directed for political purposes as Bobby_and Mr. McCloskey saw fit, or to Bobby, and I was never sure, sir. "Mr. REYNOLDS. I think it is in the rec ord, sir, that from this amount Mr. Baker, even before I got the checks, had a check for $4,000 that I had drawn on my personal account. "Senator CURTIS. And that was by check? "Mr. REYNOLDS. That is correct, sir. "Senator CURTIS. And that is the one that is in the hearings of your previous testimony which has been released to the public? "Mr. REYNOLDS. That is right, sir. The handling of this expenditure in this manner was explained by William K. Stewart, vice president of McCloskey & Co., by the following testimony concerning the 1961 income tax return for McCloskey & Co., exhibit 37: "Mr. MCLENDON. Will you tell the committee whether or not in that tax return McCloskey & Co. included as an operating or, deductible expense the amount of $109,000plus, represented by the check of McCloskey & Co., to Don Reynolds Associates? "Mr. STEWART. Yes, sir; it is included as a cost of goods sold in the $34,848,000 figure on the first page of the 1120 form; form 1120, the second line." After obtaining a copy of the check showing the real amount paid by McCloskey, the committee had obtained a copy of the letter and invoice, exhibit No. 17, from Hutchinson, Rivinus & Co., to Reynolds regarding the McCloskey bond, and the invoice or bill, exhibit No. 18, which Reynolds submitted to the McCloskey Co. Mr. Reynolds testified that these invoices were made out according to the agreement that had been made for the padding of the bill so that it would carry extra funds for political contributions. The invoices are as follows: HUTCHINSON, RIVINUS & Co., Philadelphia, September 13, 1960. Re McCloskey & Co., bond No. 4S-40225, the Aetna Casualty & Surety Co., contract for construction of Columbia Stadium, Washington, D.C. Mr. DON B. REYNOLDS, President, Don Reynolds Associates, Inc. DEAR MR. REYNOLDS: In accordance with instructions from Mr. J. B. McHale, Jr., of this office, we enclose herewith our invoice for the premium of $73,631.28 covering per$10,031.56, or net owing us of $63,599.72. formance bond in connection with the abovecaptioned contract, less commission of Yours very truly, HUTCHINSON, RIVINUS & Co., Mr. MATTHEW H. MCCLOSKEY, Please authorize payment at your earliest convenience. Thank you very much. Most sincerely, DON B. REYNOLDS. (Invoice not printed in RECORD.) check itself is evidence that there was an The invoice cannot be impeached. The overpayment. Mr. Lawrence F. McQuaid had been con "Senator CURTIS. So you paid Baker $4,000 troller for the McCloskey Co. during the time out of that portion? "Mr. REYNOLDS. Yes, sir. "Senator CURTIS. Did you pay anybody else any part of that premium? "Mr. REYNOLDS. Subsequently I did, sir. I paid Mr. McLeod-William McLeod-$1,000 and a $500 payment that is also in testimony, sir. of this bond transaction. His testimony is McCloskey Co. was not misled by any words clear and direct. It shows that the on the invoice relating to public liability. Mr. McQuaid's testimony reveals the fact that the McCloskey Co. knew that no part of the expenditure of $109,205.60 was for any general liability insurance. It reveals the "Senator CURTIS. And how much total did fact that the McCloskey Co. treated the exyou give Mr. McLeod? "Mr. REYNOLDS. $1,500, sir." That there were irregularities is supported by the documentary evidence such as the check. Mr. McLeod, then an employee of the House, corroborates the fact that he got his money. Robert Baker, then an employee of the Senate, by taking the fifth amendment, refused to avail himself of the opportunity to deny any of the testimony concerning his participation, the commission, or the handling of funds that ended up as a political contribution to the Democratic Party. The McCloskey Co. paid the full amount; to wit, $109,205.60. They charged it off as a business expense and so deducted it for income tax purposes. Clearly it was not a "Senator CURTIS. What building and loan? business expense and it was not deductible. penditure as the cost of the bond. Mr. McQuaid's testimony is as follows: "Mr. MCLENDON. Mr. McQuaid, were you in the employment of McCloskey Co. in the year 1960? "Mr. MCQUAID. Yes, sir; I was. "Mr. MCLENDON. When did you terminate your employment? "Mr. MCQUAID. December 31, 1961. "Mr. MCLENDON. How long prior to December 1961 had you been in the employ of the company? "Mr. MCQUAID. A little over 4 years. "Mr. MCLENDON. In what capacity were you employed? "Mr. MCQUAID. Controller. "Mr. MCLENDON. What were your duties, what would have been the process by which generally? "Mr. MCQUAID. I was in charge of the accounting department. "Mr. MCLENDON. Did you have overall supervision of the entire accounting department during that time? "Mr. MCQUAID. Yes, sir. "Mr. MCLENDON. Some reference has been made here in prior testimony that McCloskey & Co., at that time, for tax purposes, were working on what is known as the completed contract basis, is that correct? "Mr. McQUAID. That is right. "Mr. MCLENDON. What does that mean? "Mr. MCQUAID. Well, that means that on these major jobs which last over a year or two in operation, all of the income and all of the costs are deferred until the year in which the job is completed, and then it is taken into the accounts. "Mr. MCLENDON. Then you determine whether there was a profit or loss, when the contract is completed? "Mr. MCQUAID. Yes, sir. "Mr. MCLENDON. Then, of course, whatever that determination is, is reflected in the income tax returns? "Mr. MCQUAID. Right. "Mr. MCLENDON. For the year in which the job is completed? "Mr. MCQUAID. Right. "Mr. MCLENDON. Mr. McQuaid, there is in evidence in this proceeding a document marked 'Exhibit 18,' which appears on page 156 of the record. Could somebody hand the witness a copy so he knows what I am referring to? You have it there, do you not? "Mr. MCQUAID. Yes, sir; page 156. "Mr. MCLENDON. Exhibit 18, appearing on page 156, part 2, containing the testimony of Don B. Reynolds, on December 1, 1964. It is in evidence, Mr. McQuaid, that that document was received by McCloskey & Co. and approved by Mr. William Stewart, who has testified in person, and then a stamp was placed on it, which you see there on the exhibit, giving the contract number and charge-I guess that is a code number, isn't it? "Mr. MCQUAID. That is a charge account code number, sir. "Mr. MCLENDON. Charge account code number, with the word 'approved.' It also bears a date stamped date-October 17, 1960, isn't it? these documents would have been handled in your accounting? "Mr. McQUAID. Well, I would say just about the way they apparently had been handled here. They would have been processed and charged into the particular job, which is this 403, the District of Columbia Stadium, and set up for payment at the appropriate time. The bill is stamped 'Paid, October 17, 1960,' and that is the date of the check that paid it. It seems to be all in order. "Mr. MCLENDON. If anyone had called your attention to the fact at that time, or raised a question-whether it was a fact or not that maybe this bill for insurance would be paid twice, what would you have done then? "Mr. MCQUAID. That it would be paid twice? "Mr. MCLENDON. Yes. "Mr. MCQUAID. I would do what I could"Mr. MCLENDON. That this check would be a duplicate payment-would constitute a duplicate payment. What would you have done? "Mr. MCQUAID. I would try to stop it. "Mr. MCLENDON. Sir? "Mr. MCQUAID. I would have tried to stop the duplicate payment. "Mr. MCLENDON. You would have stopped it, wouldn't you? "Mr. MCQUAID. I could not stop the payment, because I did not initiate the payment. But I would try to stop it by bringing it to the attention of those who would pay it. "Mr. MCLENDON. I am not trying to be facetious. What I mean is that as controller you would not have stood by and see it paid twice, without doing something about it. "Mr. MCQUAID. Not deliberately; no, sir. "Mr. MCLENDON. But it appeared to be perfectly regular. Is it true it was processed in all your records? "Mr. MCQUAID. Yes. "Mr. MCLENDON. And would finally be treated as an expense item in computation of income tax? "Mr. MCQUAID. It wound up in the proper slot in accordance with this coding, in our records. "Mr. MCLENDON. I believe that is all. "The CHAIRMAN. Senator CURTIS? "Senator CURTIS. Yes, Mr. Chairman. You made reference to the coding. What does that code show on this bill shown on page "Mr. McQUAID. I suppose it should be 60. 156? It is a little "Mr. MCLENDON. A little blurred. "Mr. McQUAID. Blurred; yes. "Mr. MCLENDON. Do you have any recollection that this particular document ever came to your personal attention as controller? "Mr. McQUAID. No, sir; I have no present recollection of ever having seen this document personally. "Mr. MCLENDON. In connection with that, the record also shows exhibit 20, which appears at page 171 of the printed record you have before you. It was a check of McCloskey & Co., signed by T. D. McCloskey, dated October 17, 1960, in exactly the same amount as the invoice which was marked 'Exhibit 18'-$109,205.60. Do you have any recollection that that check ever came to your personal attention? "Mr. MCQUAID. No, sir; I do not. "Mr. McLENDON. If the invoice and the check, as appear in this record, had come to your attention with a stamp on the bill and the information that Mr. Stewart had approved it, what would have been the method of processing it through your records? "Mr. MCQUAID. I am sorry-what would what? "Mr. MCLENDON. I say if this invoice had come to your attention bearing the stamp of approval, and the information that Mr. Stewart had approved it, and then you found the check which corresponded to the bill, "Mr. McQUAID. It shows C-403, which indicates the contract number assigned to the District of Columbia Stadium job, and a subcoding, 32. "Senator CURTIS. What does the 32 mean? "Senator CURTIS. Is she related to the management of the company? "Mr. MCQUAID. I believe so. "Senator CURTIS. Do you know? "Mr. McQUAID. I think so, but I don't know just by what degree of relationship. "Senator CURTIS. And her code directed that to be charged as all performance bond? "Mr. MCQUAID. Yes, sir. The code of account for that job—— The foregoing testimony is convincing proof that the overpayment on the bond was not an innocent mistake or goof. The McCloskey company, and even one of the McCloskey family, received the invoice, approved payment, and directed that it be charged to the performance bond expense. These facts are not denied by Miss Agnes McCloskey who coded the invoice "C-403" indicating that the expenditure was to be charged to the District of Columbia Stadium job and further subcoding it No. 32 which, in effect, directed that the full expenditure be shown as cost of the performance bond. These facts negate the claim of Mr. Matthew McCloskey that this traction was a mere goof. It was highly irregular. This performance bond transaction has been unanimously voted by the committee to be included in the material laid before the Attorney General for investigation, because that vote directed the Attorney General to examine the entire record in the investigation for possible violations of the law. Notwithstanding the fact that an overpayment was made for the bond, and that part of the excess may have been used for political purposes, and that it was improper to claim it as a tax deduction, and that an irregular payment was made to Robert Baker and William McLeod which are fully supported with documentary evidence, the majority of the committee makes the startling statement in their report: "On these aspects of the District of Columbia Stadium matter, the committee concluded, from the extensive testimony and documentary evidence, that no impropriety was committed by public servants or by McCloskey or his associates." The foregoing statement is not supported by evidence. In fact, all of the evidence indicates that the transaction contained wrongful, irregular, and fraudulent aspects which were in violation of law. We cannot concur in such a statement of the majority because it is contrary to all the facts. Finally, it should be noted that Senator COOPER requested that McCloskey & Co., their agents, Hutchinson & Rivinus, and the carrier, the Aetna Casualty & Insurance Co., "Mr. McQUAID. Which indicates the bond supply records to the committee for the purcosts on that job. "Senator CURTIS. The bond costs? "Mr. MCQUAID. Yes. pose of ascertaining whether there was any additional evidence to support or contradict the testimony of either McCloskey & Co., or "Senator CURTIS. Was the whole amount Reynolds, concerning the overpayment of the charged to bond costs? "Mr. McQUAID. Because that is the coding on it. it? "Senator CURTIS. Who put that coding on "Mr. McQUAID. The accounts payable clerk, I would assume. "Senator CURTIS. Who did? "Mr. MCQUAID. Well, the handwriting is familiar to me, but I would only be guessing. "Senator CURTIS. Whose handwriting is it? "Mr. McQUAID. It looks like the accounts payable clerk. "Senator CURTIS. His name? insurance premium. No such records were submitted to the committee by these companies. ing, beneficial, and cooperative efforts of Some of the details concerning the untir Senator JOHN J. WILLIAMS are covered elsewhere in this report, but we, at this time, would remind the Senate of the great contribution of Senator WILLIAMS in an effort to get the truth and the whole truth. IV. DON B. REYNOLDS A disturbing aspect of the Baker investigation was the continuing efforts to discredit witnesses who were willing to testify before the committee and whose testimony extended the investigation into new areas. This was the case with respect to Don B. Reynolds. The minority points out that testimony could not be reasonably expected from people of the highest character and integrity because people of that type were not associated with Mr. Baker in his improper activ"Mr. McQUAID. The accounts payable clerk. ities, or in other improper activities which came to the attention of the committee. Evidence had to be sought from people who were associated with him, or engaged in other improper activities. Mr. Reynolds was an associate and friend of Mr. Baker and engaged with him in certain business activities. We do not condone or approve his association in these activities. But his testimony upon specific issues before the committee, such as the McCloskey and Jenkins cases, was corroborated by other witnesses and by documentary evidence. His testimony upon these specific issues was relevant to the investigation. Yet the majority reached beyond these specific issues and, by the use of confidential records concerning Reynolds' life years ago-matters not relevant to the specific issues before the committee attempted to discredit his testimony. As contrasted with the treatment of other witnesses, the practice of discrediting the testimony of Reynolds is striking. It is clear from the record that other friends of Mr. Baker were engaged in questionable activities. Some of these friends who testified gave testimony favorable to him, and others claimed the protection of the fifth amendment. But their conduct did not arouse the moral indignation of the majority, and no effort was made by them to discredit these witnesses who gave testimony favorable to Baker. The committee had the right and the duty to weigh and test the testimony of all witnesses by proper means, and notably by making the effort to secure the fullest testimony on every relevant issue. But we do not believe it is proper or fair to take the extraordinary steps observed in this investigation to discredit a witness. Witness Reynolds has claimed that at one point the committee staff tried to harass and intimidate him. In a statement filed with the committee, Reynolds said that "When he (Chief Investigator Meehan) asked me who discussed the purchase of television advertising space with me and I stated that Walter Jenkins, and Walter Jenkins alone, had, he, the interrogator, thereupon threw a book on the floor and in a boisterous manner informed me that I did not discuss this with Walter Jenkins, that I had discussed it with Bobby Baker." That such an occurrence as Mr. Reynolds described did take place is confirmed by the minority counsel. Some of the testimony that Mr. Reynolds furnished during his appearance before the committee in December 1964 has never been, and probably never will be, released to the public. Yet, it is that unpublished testimony which has prompted efforts to discredit and destroy this witness. On page 1 of the Report by the Department of Justice on Testimony of Don B. Reynolds, it is stated that "The committee was in no position to conduct a serious interrogation of the issues raised or the veracity of the witness raising them." The Senate has passed not one but two resolutions specifically directing our committee to make a thorough investigation of this matter, and such a statement is in direct contravention with the mandate of the Senate. V. MORAL ISSUES The majority would not concur with the position of the minority that the committee under the terms of the resolutions had the duty to investigate the allegations concerning party girls and determine their truthfulness and determine whether they were used by Robert Baker or others in promoting their business activities and influencing Government decisions. As an illustration of the need to pursue all phases of Robert Baker's activities in order to fully investigate his business, financial and other activities, we cite from the committee hearings, part V, page 586, which sets forth quotations from a staff report on Paul Aguirre: "Mr. Aguirre thinks he first met Robert G. Baker in Baker's office in the Capitol Building, Washington, D.C., approximately 3 or 4 years ago when he was introduced to Baker by Warren Neil at that time. At first Mr. Aguirre stated that he had never had any business deals with Baker but just knew Baker socially. However, subsequently in the course of the interview, Mr. Aguirre did state that he had had business discussions with Baker concerning the organization of the Pasantic Corp., which was a company to be organized for the purpose of operating trailer parks. Mr. Aguirre said originally the plan was to have 10 members in the Pasantic Corp. "Baker brought Carole Tyler and Elli Rometsch with him from Washington to New Orleans on the May 1963 trip. Mr. Aguirre said he spent several days partying with them in New Orleans but denied going with them to Dallas and Miami. Mr. Aguirre said he knew Carole Tyler socially, had been to her house at 308 N Street SW., and had seen her many times in San Juan, P.R., with Bobby Baker. Mr. Aguirre stated that he didn't want to discuss Baker's private life saying, 'I'm sure Baker is paying dearly at home for this now.' "Mr. Aguirre reported that he and Warren Neil met Baker, Wilson Abraham, and Nick Popich in New Orleans in June 1963 and from there they went together to see the Patterson-Liston fight in Las Vegas. When asked about who paid the expenses, Mr. Aguirre said Baker picked up the check as often as any of the others of the group. "When asked further concerning Elli Rometsch, Carole Tyler, and the alleged parties,' Mr. Aguirre declined to discuss the matter further stating, "if I'm asked by the committee about this, I will deny it even if they have photographs. My wife is expecting a denial and she will get it. I'll take the 1st through the 28th.'" The foregoing report also states that Aguirre said Robert Baker made an appointment for him at the FHA, but that it wasn't fruitful. The report also recites that Baker and Aguirre looked over some property in Houston, Tex. A thorough investigation not only brings out the facts as to any wrongdoing so that appropriate legislation or other remedies may be applied, but also a thorough investigation clears up unfounded rumors and allegations. VI. THE WORK OF SENATOR JOHN WILLIAMS The most significant contributions made to the committee during the course of the investigation were made by Senator JOHN WILLIAMS of Delaware. In 1963, before the committee had even hired a full investigative staff, it was the work of Senator WILLIAMS that uncovered Baker's involvement with MGIC stock, with the Murchison-owned Haitian American Meat Co., and with the Reynolds Insurance Agency. It was Senator WILLIAMS who uncovered the Baker-Reynolds-McLeod-McCloskey connection with the performance bond on the District of Columbia Stadium. As we have stated heretofore, it was the individual efforts and evidence furnished by Senator WILLIAMS which reopened the Baker investigation and belatedly accorded the committee the opportunity to investigate the McCloskey stadium bond overpayment. The Sweet Water Development Co. matter and the San Rafael, Calif., bank charter were other areas developed by the Senator from Delaware. Without the evidence produced by Senator WILLIAMS, which evidence forced the majority to act, we doubt that the investigation of Robert Baker would have ever occurred. The minority would like to express an unqualified vote of thanks to Senator JOHN WILLIAMS for his untiring efforts in furthering the progress of this investigation. VII. RECOMMENDATIONS We recommend that the Senate Select Committee on Standards and Conduct, which was created by action of the Senate on the 24th day of July 1964, as proposed and offered by Senator JOHN SHERMAN COOPER, be activated forthwith. We are pleased that the majority has made this recommendation even though they opposed the creation of this committee. We wish to add the following recommendations: 1. We recommend that all congressional officers and employees be prohibited by law from serving as treasurer, or temporary treasurer, or custodian of any type, for the handling of any political fund, or funds, and that all congressional officers and employees be prohibited by law from soliciting and distributing political funds. 2. We recommend that Members of the Congress and all congressional officers and employees be prohibited from soliciting or receiving any compensation, for or on account of personal or professional services rendered or to be rendered by them, from any person having an interest in any congressional legislation, or any person having any matter pending before any bureau, agency, or department of the Federal Government. We also recommend that the payment by any such person of any such compensation to any such Member, officer, or employee for any such services likewise be prohibited. 3. We recommend that criminal penalties similar to those provided by existing conflict of interest laws be provided for violation of the foregoing provisions. Mr. CURTIS. CARL T. CURTIS. JOHN SHERMAN COOPER. Mr. President, we might look for a moment at the North American contract with the vending machine company. This contract had its origin perhaps 4 or 5 years ago. The Apollo contract of more than $1,400 million was awarded by NASA to North American Aviation in November or December of 1961. The majority of the Rules Committee were negligent in not looking into all possibilities surrounding Serv-U's being awarded the North American vending contract at almost the same time that North American was awarded the gigantic Apollo moon contract. For instance, Mr. Tucker testified concerning Serv-U that: The first information I had concerning the corporation was, I would assume, either late November or early December of 1960-61, when Mr. Baker mentioned the fact to me that there was a possibility that a group would go into the vending machine business, and would I like to be counsel for it, and they would pay me a retainer. When John Leland Atwood, president of North American Aviation, appeared before the committee he testified that Black first spoke to him about North American letting Serv-U have its vending business in October of 1961. Mr. Atwood also said that, "Mr. Black undoubtedly told me that Baker was interested in it"-Serv-U. At this point it is interesting to note that Serv-U was not even in existence in October of 1961, although at that time NASA was reaching a decision that the Apollo contract would be awarded to North American Aviation. Moreover, the North American plants Serv-U wanted to service were in California, yet the records of the California Secretary of State's office disclose that Serv-U only qualified to do business in that State on January 18, 1962. To make matters even more apparent, Eugene Hancock, at that time president of Serv-U, testified that in December of 1961 the company had neither vending machines nor employees. I quote from the testimony: Senator CURTIS. May I ask one question at this time? When did you first make your trip to see North American? and capital, and for that they made ap- Later on, after questioning by Senator The Black I refer to is Fred B. Black, an official of the North American Co. and its Washington representative, and also a stockholder in Serv-U. The great portion of the business of North American is done with the Government. This followed right at the time they had received this vast Government contract. Continuing reading: Senator COOPER. What I am getting at is Mr. BLACK. Well, it would appear so now, Mr. HANCOCK. I think it was in the latter business. part of December 1961. Senator CURTIS. How much equipment did Serv-U own on that date, vending equip ment? Mr. HANCOCK. None. The CHAIRMAN. Well, may I clarify a question for my own benefit? You would not purchase equipment for any contract until you got the contract; would you? Mr. HANCOCK. Well, yes, sir-you purchase equipment, but not that size; no, sir. The CHAIRMAN. In other words, would you buy a lot of vending machines without a contract or any place to put them? Mr. HANCOCK. Not too many; no, sir. We cannot understand and we do not know why the North American Co. would, in November and December of 1961, consider dislodging a reputable vending concern, Automatic Canteen, that had been successfully serving their plants for over 20 years, in order to take a chance on a new, untested, unincorporated, nonexistent company which had neither employees, nor equipment, nor capital, nor experience. On January 12, 1962, 6 days before Serv-U was licensed to do business in California, Mr. Hancock sent their vending proposal to North American. It is It is interesting to note that North American acquired no other proposals except Serv-U's. Thereafter, on January 30, 1962, this proposal was accepted and Serv-U signed a vending contract. Serv-U needed equipment, employees, Not surprisingly, Leland Atwood, president of North American Aviation, admitted that 95 percent of his company's work was with the Government. certain phases of the transaction-and there were several transactions-to prevent the calling of witnesses, and so forth. However, Mr. President, there are certain natural laws with which we cannot interfere. interfere. One of them is that truth will eventually out. Therefore, little by little, it is coming out. Let me say again that the Senate and the people of America are very much indebted to the distinguished Senator from Delaware [Mr. WILLIAMS] for his untiring work to give to the people of America an honest government in those spots where they do not have it now. I ask unanimous consent to have printed in the Record an editorial published in the Omaha World-Herald on Friday, September 3, 1965, entitled "Senate's 'Conscience'." There being no objection, the editorial was ordered to be printed in the RECORD, as follows: SENATE'S "CONSCIENCE" When the people of Delaware in 1946 elected Republican JOHN J. WILLIAMS to the U.S. Senate, he was the source of some amusement in the Nation's Capital. in chickenfeed. Some of the more worldly characters in Washington were certain that he would be far beyond his depth in the Nation's Capital. Mr. WILLIAMS was a farmer and a dealer It has been contended that Don Reyn- As reporter John Barron writes in the he had had with Baker and others about Mr. President, it is surely not coinci- contract. Let me make it abundantly clear that But, it is also true that this whole is- blot upon the good name of the Senate, "Detractors privately ridiculed him as a 'pious hick.' Top officials laughed when, working without investigators, funds, or power of subpoena, he started rounding up how they were running Government business. records and asking simple questions about "Some of them had to stop laughing when they found themselves on the way to the penitentiary." But sending Government officials to the penitentiary can be a hazardous business. A man who goes about throwing light into the dark corners of Government soon finds the hounds of corruption baying at his heels. For example, reporter Barron lists some of the happenings that have plagued Senator WILLIAMS in the 2 years since he unearthed the Bobby Baker scandals. Among them these: Carole Tyler, formerly Baker's confidential secretary, flew to Tennessee to announce to an assemblage of newspapermen that she had seen the principal instigator of the Bobby Baker hearings at 6:30 one morning with a young lady who was not his wife. She failed to point out that the young lady was the Senator's granddaughter. The Senator's mail has been intercepted and monitored. Someone sent to Mr. WILLIAMS a 4-page typewritten tale about how three Governcorrupt deal. It was a plant, made in the hope that the Senator would "go to the floor of the Senate with it," and thus discredit ment officials had made millions through a The Baker investigation was whitewashed and pigeonholed, but JOHN J. WILLIAMS remains on the scene, and as he said recently, "*** I am not about to be intimidated. In fact, my curiosity and determination grow as resistance intensifies.” In the election campaign last fall Senator WILLIAMS was the Member of Congress which the administration tried hardest to defeat. On the Saturday before election day, Presi dent Johnson went to Dover, Del., and appealed to voters: "Give me men I can work with." Delaware voters responded by giving Mr. Johnson a landslide victory, but enough Democrats split the ticket to return JOHN WILLIAMS to the Senate by more than 6,000 votes. So the man who has been called "the conscience of the Senate" will be there, God willing, at least until 1971. It will be interesting to observe what turn the campaign to discredit him will take next. Mr. CURTIS. I thank the distinguished Senator from Delaware for yielding to me. Mr. WILLIAMS of Delaware. I thank the Senator from Nebraska for his comments. I agree with what he has just said; namely, that the success of this vending machine company of Mr. Baker's depended entirely upon his ability to place the machines in factories and with companies that were doing business almost entirely on defense contracts. In order to operate in these defense plants Mr. Baker had to obtain from the Department of Defense a confidential security clearance. This security clearance for Baker was readily granted months after he had been fired from the Senate and had taken the fifth amendment before a Senate committee. Mr. President, I repeat questions can properly be raised as to why it was so easy to persuade the Defense Department that it should grant confidential security clearance to Bobby Baker's Serv-U Corp. after he had taken the fifth amendment repeatedly rather than answer questions in connection with some of his official activities while serving on the public pay roll. The Senator from Nebraska has just stated that eventually truth will out. I agree, and in that connection I repeat an observation that we learned long ago as a boy on the farm, that when whitewash is applied over dirt, it always peels. I am confident that as the whitewash of the Bobby Baker episode peels off the American people will no doubt be very much surprised. In general political philosophy, the Senator is a liberal. But his greatest strength is his dedicated independence of thought and action. He is neither easily frightened nor intimidated. His troubles now-if they can be called that are being promoted by civil rights organizations and preachers in Washington who dislike the Senator's determina tion to see that the welfare scandals in the Nation's Capital are cleaned up. We will leave to others to explain how the Senator's goal can be construed as a matter merely to comment further on some revelaof either civil rights or religion. We wish tions the Senator made last week: At a time when the parks and streets of Washington are littered with trash because not enough labor is available to do the work, welfare costs soar because of the claim that no job opportunities exist. This is a classic example of the Government's paying people not to work at a time when the Government itself complains about a shortage of labor. It can hardly be contended that the unemployed people of Washington lack the education and qualifications to stoop to pick up tion and qualifications to stoop to pick up trash and empty beer cans. A bishop, speaking at a giant rally called for the purpose of attacking the Senator, described Senator BYRD as "a little man, ented." This quite properly reminded Senhardhearted, biased and segregation oriator BYRD of the Pharisee who said, "God, I thank Thee that I am not as other men are." Where was this bishop, wondered Senator BYRD, where were these civil rights leaders during the past 4 years? What have they done to uplift the standards of decency and initiative among the people of Washington? One of the loudest speakers at the rally was a white woman who had given birth to a child admittedly fathered by a Negro man married to another woman. This woman and her child are on welfare. One can understand her zeal to attack a Senator who prothe distribution of welfare funds in Washington, D.C. The Senator pointed to a lot of little things which he considers related to the overall problem. For example, juvenile delinquents knocked out 27,689 window panes from the windows of schools in Washington. It cost $112,868 to replace them. Nearly 11,000 cases of gonorrhea were reported in the city-more than twice the per capita rate of most other cities in the United States. The serious crime rate in Washington increased 25 percent last year over the previous year. Automobile thefts increased by 56 perTRIBUTE TO SENATOR BYRD OF cent in a year's time. Murders increased by WEST VIRGINIA Mr. ERVIN. Mr. President, during a recent telecast, Jesse Helms, a commentator upon the contemporary scene, made some complimentary comments upon the candor and courage of our colleague, Senator ROBERT C. BYRD of West Virginia, in an editorial expression telecast by station WRAL-TV of Raleigh, N.C. I ask unanimous consent to have a copy of these comments printed in the RECORD. There being no objection, the comments were ordered to be printed in the RECORD, as follows: WRAL-TV VIEWPOINT We were commenting the other day upon the wave of violent protests slopping around the ankles of Democratic Senator ROBERT C. BYRD of West Virginia. As we observed, it is often the case that the most precise measurement of a man's worthiness is an examination of his enemies. 39 percent. He mentioned many groups of mothers with large numbers of illegitimate children. One group of 18 women had a total of 144 such children. Another group of 14 had 126 illegitimate children. Still another group13 mothers in this one, had an average of 10 illegitimate children each. All of them on public welfare. It is interesting, the Senator said of his him-"(they) have not marched in protest critics, that they have not-and let us quote against the fact that men, women and children are almost daily being robbed, beaten, raped and murdered on the streets of the Nation's Capital." We would say to the Senator: It may be interesting, but it's not unusual. It is curious to note what some Americans choose to protest-as well as what they choose to ignore. Still, the Nation owes Senator ROBERT C. BYRD of West Virginia a vote of thanks for standing up for what he regards as important. THE PEACEFUL SETTLEMENT OF THE RECENT STEEL NEGOTIATIONS Mr. MONDALE. Mr. President, the world has witnessed a magnificent example of the American free enterprise system in action. I refer, of course, to the peaceful settlement of the recent steel negotiations. As the President has said, all America negotiated that settlement. has cause to be grateful to the men who They bargained hard, and with skill and conviction, but they put the interests of the Nation first. As a result of the wisdom and responsibility they displayed, we have achieved one of those rare and happy situations when all are victors. Management has won, labor has won, and the country has won. The new steel agreement is good for labor. It provides fair and reasonable wage increases, both now and in 1967. As a result of the ratification of the interim increase granted last May, some to more than 350,000 workers. $25 million will be paid out immediately Workers in the steel industry have achieved an improved pension plan, a plan which gives everyone the right to retire after 30 years' service. Health benefits will be better than ever before, and working conditions will continue to improve. They can This settlement is a victory for management. In the absence of a destructive work stoppage in the industry, the steel companies will be able to maintain their competitive position. continue to meet not only the competition of other products which might otherwise substitute for steel but, most important, can continue to hold their own against steel producers of other countries. They can now move forward with their programs of modernization and capital investment which will improve their position in all these respects. Finally, this settlement is a victory for the entire country. It is a victory first because the settlement is noninflationary. The wage increases will raise employment costs per hour at an average rate of 3.2 percent a year over the 39month period since the expiration of the last contract. This is the precise average annual wage increase spelled out in Government's wage price guidelines. If all American workers were to receive an annual 3.2 percent increase in wages, and our average productivity per worker were to continue to rise at its present rate, the basic level of labor costs in the economy would remain stable. Thus, the settlement that has been reached both assures labor a fair share in the increasing productivity of the steel industry, and lays the foundation for continued price stability in that industry and, therefore, in the whole American economy. The period covered by the new contract extends for a further 35 months. Our last steel strike occurred in 1959. And so, with this settlement, we are assured peace in the steel industry for an |