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 i'm 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 contractors, 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-
tons. BY representing several COM
agents sometimes boosted prices in the
same way as a conspiracy would have
done.
To evade government regulations
intended 20 eliminate men in bidding
| the agents sought to have manufac-
turers consider the broker Offices
branches Of the manufacturers busi-
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
if the favored client desired to bid.
Another favOrite scheme was to
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 bid
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 agent
instead Of resulting in low prices to
| 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 paiG
the largest commission. SO that he
could revise his bid before it was sub
mtted to the government by the agent
along with those of the competing
clients.
| I'm some instances the agents are
said to have put in their own bid in
competition with their clients, thus
playing sure for either a profit or a
commission.
Letters sent to manufacturers by
the agents recite the governments
desire that all contracts be made di-
rectly with manufacturers and say
that officials are frowning upon deal
ers, jObbers. and middle men, and for
this reason we are gradually discon-
tinuing the practice of bidding in our
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 a commission
basis, the business to be transacted on
the manufacturers stationery by the
commission concern and all mail for
the manufacturer to be addressed to
him at the brokers' office.
They ask for n supply Of the man
ufacturer's 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.