The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1918-06-26
GRAFT PLANS EXPOSED.
METHODS OF CONTINGENT FEE,
CONTRACT AGENTS RE-
VEALED.
Department of Justice Finds Much
Valuable Information in Examining
Correspondence.

Washington, June 2O.-Methods
by which contingent fee contract
agents in Washington suppressed
competition in bidding on govern
ment war orders, inflated prices ma
nipulated bids and even double
crossed" their own clients by repre-
scnting competing contract ctors, were
uncovered today by the department Of
justice in examining correspondence
seized in raids on the contract brok-
ers' offices.
Some manufacturers paid thousands
Of dollars for purely imaginary ser
vices" of the contract agents who
often turned over confidential infor-
nation of bids to other clients or used
them to enter lower bids in their own
names, said a review of the findings
issued by Assistant Attorney General
Thompson in charge of the prosecu-
tions. BY representing several COM
petitive bidders at the same time
agents sometimes boosted prices in the
same way as a conspiracy would have
done.
To evade government regulations
intended TO eliminate men in bidding
the agents sought to have manufac-
tnrarC Si6ac hn
branches of the manufacturers bust
ness, supply the agent with letter
heads and authority to represent the
contractor direct.
Some letters to favored clients
said the department of justice an
nOuncement, contained promises not
to put in bids for certain other con-
Germs represented by the agent, nor
put them in touch with the business
if the favored client desired to bid.
Another favorite scheme was tC
get quotations or options from sew
eral manufacturers who were thus
eliminated from direct bidding
The agent with the advantage OF
this price knowledge would then bic
in his own name and if awarded the
contract proceed to fill it by exer.
cising the option given by the manu-
facturer who quoted the lowest price
to him. The benefits of competition
were thus appropriated by the agen,
instead of resulting in low prices tc
the government
Under another plan the agent pro
cured bids addressed to the govern.
ment from several concerns. These
prices were then communicated to the
favored bidder who presumably pait
the largest commission, so that he
could revise his bid before it was sub.
mitted to the government by the agen,
along with those Of the competing
clients.
I'm some instances the agents are
said to have put in their own bid ir
competition with their clients, thus
playing sure for either a profit or g
commission.
Letters sent to manufacturers by
the agents recite the government.
desire that all contracts be made di.
rectly with manufacturers and say
that officials are frowning upon deal
ers, jobbers. and middle men, and fol-
this reason we are gradually discon.
tinuing the practice Of bidding in ou,
own name.
| They suggest that the brokers
office be made branch Of the fac
tory, handle all business in the manu-.
facturer's name, put on commission
basis, the business to be transacted or
the manufacturers stationery by the
commission concern and all mail for
the manufacturer to be addressed tC
him at the brokers office.
They ask for n supply Of the man
ufacturers letter heads and state
that one of the first things they will
do will be to circularize government
purchasing officers, with whom we
are in tOuch.'"
IRISH AGITATOR ARRESTED.