Evening star., 1934-12-23
CONTRACT PROBE
REPORTS WRITTEN
Findings Of House Military
Group to Be Presented
This Week.
BY REX COLLIER.

It's long investigation Of War De-
partment business methods completed,
the House Military Affairs Committee
this week will file with the clerk OF
the House reports expected by COM
rnittee members to result in drastic le-
gal and administrative actions.
Findings of the committee will be
incorporated In two distinct reports.
One, committee members indicated
yesterday, will deal with alleged irreg-
ularities in leasing to the Mercur Corp.
Of the wartime constructed Port
Newark warehousing base at Newark,
N. j., while the other will expose al
legged improprieties in negotiation OF
Army procurement and other con-
tracts.
Jury Action Predicted.
Grand jury proceedings here and
possibly in New Jersey are predicted
by committee members, with criminal
charges foreseen against two Army
officers on duty here. A former civil
ian employe of the War Department
Is involved in the Port Newark in
quiry.
In the report on military contracts
the committee will dispose OF its case
against Maj. Gen. Benjamin D. Fou-
lois, chief Of the Army Air Corps,
whose removal was demanded some
months ago in preliminary report
criticizing airplane procurement poll
cies.
Gen. Foulois vigorously fought in
his own defense and called on the
committee to supply him with all tes-
timony taken against him in executive
session and all documents bearing on
Air Corps procurement methods re-
ceived by the committee. The Air
Corps chief finally advised Secretary
Of War Dern he had failed to receive
the information he needed and Dern,
in a letter to the committee, dumped
the whole matter back into the lap OF
the House group. Recently the COM
mittee has indicated disposition to
wash its hands of the FouloiS case.
Financial Favors Reported.
The two Army officers who have
been under investigation by the COM
mittee are alleged to have accepted
financial favors from interests doing
business with the War Department in
violation of Federal statutes.
Evidence against the officers was
given largely in secret hearings, with
Assistant United States Attorney Allen
j. Krouse listening in by order OF
United States Attorney Leslie c. Gar
nett. Chairman John ]. McSwain OF
the committee is expected to confer
with Garnett this week regarding
grand jury plans.
One Of the officers. it is alleged, ac-
cepted money from a so-called lobby
ist.'' The officer and the lobbyist"
were questioned separately by the
committee recently and the former is
understood to nave admitted receiving
the money as loan" The lender
at the time was stationed in Wash
ington as a representative of certain
firms seeking War Department busi-
ness.
Fee Accordance Charged.
The other officer is accused Of ac-
cepting fees from corporations hav-
ing business relations with the War
Department. He was questioned by
the committee several months ago, and
agents for the committee subsequently
dug up a mass of documentary evi-
dence against him, it is said.
The committees report on Army
contract negotiations probably will be
spiced with reiterated criticism of lob
bying conditions as they existed at the
War Department when the inquiry
was opened. A startling picture Of
these conditions was furnished the
committee recently by a belated wit
ness, Frank E. Speicher, agent for a
leakproof tire firm. Speichers testi-
mony resulted in hasty summoning Of
more than a score of additional wit
nesses, some Of whose names were
mentioned in papers contained in
mysterious little black satchel" taken
before the committee by Investigators
A previous grand jury investigation
of Army contracts produced no indict-
ments, out prompted criticism by the
jury of lobbying conditions at the
War Department.