Evening star., 1918-06-19
WIDE SCOPE SHOWN
|NFRAUD SYSTEM
Self Confessed Contingent
Fee Agents in Federal Con-
tracts Ask Leniency.
LIGHT SHED ON AWARDS

Many self-acknowledged contingent
fee agents appeared today at the De
partment Of Justice to. explain their
operations and to ask clemency in any
action the department may take to
break up the exposed system of de-
frauding contractors and the govern
ment out Of millions Of dollars.
Many Of these agents heretofore
had been unknown to the department.
and this fact promoted the impress
sion that the system of making COM
missions out Of war orders Is even
more extensive than officials had be-
lieved.
Hundreds Of Inquiries Received.
Hundreds Of letters. kilograms and
personal calls came to Attorney Cen
eral Gregory and Assistant Attorney
General Huston Thompson. in direct
charge Of the campaign against the
contingent fee system. inquiring con-
cerning the legal status of contracts
already made, or the legality of
their maintaining Representatives in
Washington. Some admitted they had
sublet contracts, not knowing that
this was a violation Of the law.
Although no formal statement Of
policy was made by the Department
Of Justice. onicials fntimated that
leniency would be shown in all cases
where 1t was apparent that the con-
tractor or the commission agent
neither pretended to use nor actually
did employ any sinister influence in
obtaining orders.
New Evidence Discovered.
A corps of lawyers, working today
in the mass Of reports on raids made
on manufacturer offices, found con-
siderable new evidence of improper, il
not illegal. practices in connection
with the soliciting of government war
contracts. In many cases, it is un-
derstood, manufacturers have written
to Army officers who formerly held
positions with them or with allied
concerns. asking them to use influ-
ence in getting contracts.
All documents shedding any light
on the awarding of contracts for air.
planes or parts found in these papers
were referred to Charles E. Hughes,
who is conducting special inquiry
into aircraft production.
Lieut.. staley to Be Tried at Once.
Lieut.. James c. staley, under arrest
In New York on charges OF accepting
T2ynrnaf IN.
influence on the company's behalf. will
be tried Immediately by court-martial,
and the Information he has furnished
regarding other improper practices will
Department Of Justice officials today de-
cHned to say whether any further ar
rests are in immediate contemplation
Cabinet members and heads OF execu-
tive departments today took steps TO put
into effect the recommendations of At
torney General Gregory for insertion in
contracts to be made in the future Of q
clause binding the contractor not to pay
contingent fees or employ middiemen in
negotiating war order.
Guilty Men Face court-Martial.
Army or Navy officers found to be
implicated directly in the scheme will
be made subject to court-martial. it
has been announced by Secretaries
Baker and Daniels. Only in cases
where 1t appears there were care
fully planned plots to obtain money
from contractors through misrepre-
sentation will prosecutions be insti-
tuted, 1t was reiterated today by De-
partment of Justice officials. 1t is
expected the reports of the various
raids will show that in most cases
the agreement was not entered into
with sinister motives.
A bill prohibiting and annulling
government contracts secured by pay
ment or promises of a commission or
use OF influence and also contracts
made on the cost plus system was
introduced today by Senator Poin-
dexter of Washington and referred to
a Senate judiciary subcommittee.