WAR CLAIMS AND RETURN OF ENEMY ASSETS WEDNESDAY, JUNE 13, 1956 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE AND FINANCE OF THE Washington, D. O The subcommittee met at 10 a. m., pursuant to notice, in room 414, House Office Building, Arthur G. Klein presiding. Mr. KLEIN. The committee will come to order. The Chair would like to make this announcement. We expect to hear the Chairman of the Commission, Mr. Gillilland today, and hope to complete his testimony today. We will obtain permission from the House to sit this afternoon if we do not finish this morning. Tomorrow the Department of Defense will testify. Then the committee will recess these hearings, unless we can finish them, until the week after next. Next week the entire committee will be holding executive sessions every day in an attempt to catch up on bills that have been reported out by subcommittees. If hearings on the particular legislation that we have under consideration today are not completed, I would like to suggest to the witnesses who want to testify to contact the clerk of the committee and determine on what date they can testify. As I pointed out last week, as soon as we finish this particular legislation, we will then go on to the general subject of war claims. Before we call the Chairman, our colleague, Mr. Ashley, has a statement which he has kindly consented to put in the record rather than read. That is with the understanding, Mr. Ashley, that if you care to you may testify after the Government witnesses have testified. Mr. ASHLEY. Thank you, Mr. Chairman. (Statement referred to follows:) STATEMENT OF HON. THOMAS L. ASHLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO Chairman Klein, and committee members, I am very pleased to appear before your committee and to testify in behalf of my bill, H. R. 9584. As you know, this measure would amend the War Claims Act of 1948, as amended, which provides for the payment of compensation to forme Korean prisoners of war for treatment they received in violation of the Geneva Convention of 1929. H. R. 9584, or legislation similar to it, is absolutely essential to correct and prevent flagrant abuses by the Foreign Claims Settlement Commission in the administration of the War Claims Act of 1948. Because procedures established and followed by the Commission have resulted in overt miscarriages of justice to hundreds of Korean veterans-and because this has been possible through a deliberate warping of established judicial processes-the legislation which I have introduced and which is pending before your committee provides that claimants shall be afforded the right to examine hostile evidence in the possession of the Commission and to examine and cross-examine witnesses, and it provides for judicial review of certain actions of the Commission. As you gentlemen know, the law establishing these prisoner-of-war benefits (Public Law 615, 83d Cong.) set up three conditions for eligibility. The law states that compensation shall be allowed to any prisoner of war "for each day on which he was held as a prisoner of war and with respect to which he alleges and proves in a manner acceptable to the Commission" the failure of the enemy to meet the conditions and requirements of the Geneva Convention relating to labor of prisoners of war, or the failure of the enemy to meet the conditions and requirements of the Geneva Convention with respect to inhumane treatment. The third condition is contained in the provision defining a "prisoner of war" as one who did not "voluntarily, knowingly, and without duress" give aid to or collaborate with the enemy. It has been the practice of the Foreign Claims Settlement Commission, in the case of all prisoners of war against whom no allegations of collaboration have been brought, to presume that the claimants were insufficiently fed and inhumanely treated during the entire period of their captivity. Generally speaking, these claims have been paid promptly and in full, without the claimants actually having to prove their eligibility. We now come to the situation which has prevailed with respect to the processing of claims of prisoners of war against whom derogatory information has been received by the Commission. In its effort to implement the act, as amended in the 83d Congress, the Foreign Claims Settlement Commission requested the various armed services to furnish any derogatory information they might have on veterans applying for benefits. I am told that three branches of the service the Marines, the Navy, and the Air Force declined to give this information to the Commission on the ground that it was classified. So with respect to the claims of former Navy, Marine, and Air Force POW's, the Commission processed and paid these claims without knowing what information, if any, there might be in the Defense Department files of a derogatory nature against the applicants. The Army, however, took a different position. They agreed to furnish information to the Commission, but in doing so, they pointed out that it was classified and they refused to lift the classification. Furthermore, it was made clear that this derogatory information was wholly unsubstantiated. Upon receipt of this secret and often hearsay information against a claimant, the presumption that he received substandard food and inhumane treatment has immediately been "suspended" by the Commission and the claimant thereupon has been required to establish his eligibility by affirmative proof. In other words, whenever the Foreign Claims Settlement Commission has received derogatory information against a claimant from the Department of the Army, it has immediately disallowed the claim and has shifted to the claimant the burden of proof of establishing either that he was not a collaborator or that he, in fact, actually received substandard food and inhumane treatment during each day of his imprisonment. Claimants who have requested hearings after having their claim disallowed on primary examination have been furnished a "summary of information" by the Commission which, to my knowledge, has been identical for each claimant. In each case, it states that the claimant "A. Assisted the Communist propaganda by "1. Writing and circulating peace petitions promoting Communist causes. "2. Writing and publishing articles containing information adverse and inimical to the interests of the United States. "3. Drawing cartoons which promoted communism and reflected adversely on the United States. "4. Participating in the preparation and dissemination of frontline surrender leaflets. "5. Attempting to influence prisoners of war to accept communism. "7. Actively participating in a group called "Yen-So-Yen" (workers) whose apparent mission was to interrogate and indoctrinate newly captured prisoners of war. "8. Serving as chairman of the camp peace committee. "B. Received the following preferential treatment from the hostile forces: "1. Better medical care than the other prisoners of war. "2. Better food and better clothing. "3. Better jobs. "C. Cultivated the friendship of and were overly friendly with the hostile forces. "D. Frequently visited the Chinese officials of the prisoner-of-war camp by invitation and voluntarily both day and night. "E. Was selected and approved by the hostile forces for the special jobs such as squad leader and chairman of the peace-appeal committees." These are the general charges which each ex-Korean prisoner of war must rebut if secret and unsubstantiated allegations against him have been received by the Commission. Actually, however, a claimant has had no real way of knowing whether he must affirmatively prove that he was badly treated and received substandard food, or whether he must prove that he was not a collaborator with the enemy, or whether he must prove both. In dealing with the issue of collaboration, the policy of the Commission is to be found in the memorandum from the General Counsel, Andrew T. McGuire, to the members of the Foreign Claims Settlement Commission, dated December 12, 1955. The document reads as follows: "It is suggested that in the disallowance of claims under section 6 (e) of the act in which collaboration is the issue, the decision be based upon the finding that the evidence is insufficient to warrant the conclusion that the claimant, while in prison, was not fed or treated as provided in the Geneva Convention of July 27, 1929. No reference, expressed or implied, need be made therein to any official document or report which the Commission may have considered." What the General Counsel's memorandum says is that the Commission may come to its conclusion on the basis of the issue of collaboration, and then write up its decision, in the same case, on the basis of another issue entirely; namely, the mathematical lack of eligibility; and, further, that the Commission in determining the issue of collaboration can use the unevaluated derogatory information supplied by the Department of the Army, hide this information from the claimant, and then pretend that this information never entered into its decision. That the Commission is following this outrageous and thoroughly dishonest policy is confirmed by a letter dated January 10, 1956, which I received from Mr. Whitney Gillilland, Chairman of the Foreign Claims Settlement Commission. With your permission, Mr. Chairman, I will submit this letter and others in their entirety for the record. This is what Mr. Gillilland has to say: "In order to expedite and uniformly process the claims program, the Commission established certain presumptions concerning the failure of the hostile forces in the Korean conflict to observe the standards set forth in the Geneva Convention of 1929 respecting food furnished to and humane treatment of prisoners of war. *** These presumptions, however, are rebuttable. If, during the course of the settlement of a claim, the Commission receives information to the contrary which appears to be credible, the presumption is then suspended and the claimant is thereupon required to establish his eligibility as required by the act." But despite what Mr. Gillilland says, at no time to my knowledge has the Commission requested a claimant to furnish mathematical proof of the number of days during his imprisonment on which he received improper food and inhumane treatment. When a claimant files a claim, he is asked only to certify his noncollaboration. But when the claim is denied upon primary examination (usually on the basis of derogatory information received from the Department of the Army), the claimant is given an enigmatic and inaccurate statement that "after consideration of all the evidence of record, including a summary of information from the Department of Defense," the Commission has decided that the claimant has failed to sustain the burden of proof as to his eligibility. The statement is enigmatic because it does not tell the veteran what precise burden of proof he has failed to sustain. And the statement is inaccurate because it says that the Defense Department summary of information is evidence of record. Clearly, if it is evidence of record, it should have been shown to the claimant. Yet, at no time is this information available to the claimant or to his attorney. When a veteran appeals from the primary examination denying his claim, he is given the abbreviated, noninformative list of charges based on the secret summary of information having to do with the issue of collaboration. He is asked to defend himself on these charges and is encouraged to bring affidavits as to his noncollaboration. At the hearing, the claimant may be asked vaguely as to what the food and treatment conditions were in various prison camps during 81964-56 -14 various periods of his captivity. But since he has not been advised to supply detailed information on bad food or improper treatment, he can only reply to vague questions with equally vague answers. It This is what has happened, and the record bears it out, Mr. Chairman. is on this farcical basis that a claimant is denied his appeal and given the excuse that he failed to supply proof of his suffering. Unfortunately, gentlemen, the confusion with respect to these star chamber procedures is compounded by the fact that the Foreign Claims Settlement Commission in a large number of cases has made partial awards, i. e., the Commismission has awarded compensation to a claimant for less than the total number of days of imprisonment multiplied by $2.50. It is my understanding that in each of these cases, derogatory information was received by the Commission against the claimant. In an effort to clarify Commission procedure in these partial-award cases, I directed the following question to Mr. Whitney Gillilland, Commissioner of the Foreign Claims Settlement Commission, in a letter dated March 28, 1956: "Where partial awards have been made, does the record show that the claimant has established his eligibility 'as required by the act' for those days covered by the partial award?" Mr. Gillilland replied as follows: "It seems to me that the award might be considered as amounting to that." If Commissioner Gillilland were completely honest, he would admit that in partialaward cases, secret and derogatory information has been received which has shifted the burden of proof to the claimant to establish that he did not "voluntarily, knowingly, and without duress give aid to or collaborate *** with a hostile force." If the claimant has been able to completely disprove collaboration, which under Commission procedure has been all but impossible, he has received an award in the full amount without any mathematical showing of eligibility based on bad food and inhumane treatment. For Commissioner Gilliland to say, by implication or otherwise, that partial awards have been made on the basis of a claimant being able to prove only a certain number of days of bad food and/or a certain number of days of inhumane treatment, is the height of fraud and deception. One of my constituents in Toledo, Ohio, received a partial award and I know for a fact that no evidence whatever was submitted by way of proof that he was badly treated or improperly fed on certain days during his period of incarceration. The fact of the matter, gentlemen, is that where there has been sufficient pressure brought to bear, or where there has been some question of doubt as to the extent of a claimant's possible collaboration, the Commission has come up with a partial award which has been falsely explained as having been arrived at on the basis of mathematical eligibility rather than the issue of collaboration. Because of limitations of time, I will not read to this committee the correspondence which has taken place between me and the Foreign Claims Settlement Commission. With your permission, however, I will attach to this statement several letters in which I pose questions to Chairman Gilliland and the replies which I received. You will note that the early responses were quite frank and friendly. Later replies to more pointed questions can only be described as masterpieces of evasiveness. Before closing, I would like to touch upon other procedural facets of the Foreign Claims Settlement Commission which, if widely publicized, would have long since incurred the wrath of the entire Nation. Take, for example, the Bruneio case (K-255431), in which the only member of the Commission who actually attended the claimant's hearing was overruled by the other two members who not only weren't there, but who didn't even have a transcript upon which to base their decision. Or take the Simpson case (K-255244), in which Mrs. Pace, who conducted the hearing, originally recommended full award of the claim. Commissioner Clay concurred in this decision. Mr. Gillilland, however, did not. So, Mrs. Pace was prevailed upon to change her mind—resulting in a 2-1 decision for a partial award. Was the decision by Mr. Gillilland and Mrs. Pace based upon a mathematical showing that the claimant suffered had food and inhumane treatment on a certain number of days? Or was it based upon Mr. Gillilland's conclusion that the presence of deragatory information against the claimant should preclude a full award? The answer is perfectly apparent and obvious. The really pertinent question then arises as to how a partial award can be given, without outright violation of the law itself, since it is based upon a finding that, while there is some evidence of collaboration, it is insufficient to preclude absolute denial of the claim. Interestingly enough, the Foreign Claims Settlement Commission has recently decided to abandon the practice of allowing partial awards. Was this because a partial award tended to brand its recipient as a partial collaborator-or was this scurrilous practive abandoned because it became generally known that it was utterly dishonest? One final illustration: Joseph Hammond, 415 Ascot, Toledo, Ohio, currently draws 40 percent disability compensation-10 percent for gunshot wound and 30 percent as a result of suffering during his imprisonment. He is a holder of the Bronze Star, Purple Heart, and Good Conduct Medal. He received an honorable discharge from the Army following his release from prison and on December 23, 1954, he filed his application for Korean prisoner-of-war benefits. The claim was denied at the end of November 1955. Hammond wrote and asked for a hearing and the statement of charges. The hearing was held in Washing before a hearing officer, a certain Mr. Kolish. According to Mr. Charles W. Stevens, assistant director of the national rehabilitation commission of the American Legion, who represented Hammond, the hearing was terminated before Mr. Hammond and his witness had presented all the evidence they intended to present. The hearing was terminated with the remark by the examiner, Mr. Kolish: "There is enough in the record now." The impression that Hammond had successfully made his case was shattered 4 days later when the Commission voted to deny his appeal. And yet it is an uncontested fact that at the time of the Commission's decision, no transcript of the hearing had been written up. The Commission's own rules provide that "hearings shall be stenographically reported and the transcript thereof shall be part of the record." But Mr. Gillilland writes me that the absence of a stenographic transcript is of no importance to the Commission in reaching its decision. Frankly, I don't know how a decision can possibly be made on the basis of the record when the record didn't exist until about 2 weeks after the decision was handed down. Mr. Gilliland answers this by saying that "Mr. Kolish and the stenographer who reported the testimony were available to advise the Commission as to what transpired at the hearing." Subsequently, a petition for a rehearing was filed on behalf of Mr. Hammond by his counsel, Joseph L. Rauh, Jr. The petition was promptly rejected on the grounds that the 12-month period for consideration of Hammond's claim had expired on December 23-the date of denial of his claim. But the Commission is not consistent. Since Mr. Hammond's petition for a rehearing was denied, the Commission has reopened at least 4 cases after the 12-month period and has given full or partial awards to claims which had been disallowed, in whole or in part, both upon primary examination and after hearing. Gentlemen, the legislation which I have introduced seeks to correct this deliberate and systematic injustice by requiring the Foreign Claims Settlement Commission to specifically inform a claimant of the reasons for disapproving his claim in part or in full. It gives the claimant or his attorney the right to examine the evidence which is the basis of the Commission's determinations, and its prohibits the Commission from considering evidence which cannot be examined by the claimant. Because many veterans have not been in a financial position to come to Washington to appear before the Commission, H. R. 9584 provides that hearings shall be held at a location not further from the claimant's residence than the capital city of the State in which he resides. The measure also gives each claimant the specific right to be represented by counsel, to have compulsory process to require witnesses to appear, and to cross-examine all witnesses on whose evidence the Commission has relied in denying his claim, or in disapproving it in part., Evidence given by any witness on whose evidence the Commission has so relied, and who is not available for cross-examination by the claimant, must be disregarded by the Commission in reaching its decision. Finally, the measure establishes the right of claimants, against whom adverse decisions have been handed down by the Commission, to institute proceedings for the review of such decisions by filing a written petition in our Federal district courts. It seems to me, Gentlemen, that the time has come to cut through the maze of fraud and hypocracy which surrounds the proceedings of the Foreign Claims Settlement Commission. Mr. Gilliland's pious protestations that "these are not adversary proceedings," and that no one prefers charges or makes accusations indicates a superficial understanding of these proceedings, to say the least. I find it more than a little extraordinary that Mr. Gillilland can say that "no one prefers charges or makes accusations," when he himself has signed hundreds |