Evening star., 1935-03-21
7 INDICTED HERE
ON FRAUD CHARGE
IN P.W.A. PROJECT
Three MiIIionaires Among
Group Accused-TWo For.
mer Workers on List.
CANAL SPECIFICATIONS
REVISION is CHARGED
Change Sought $4C0.000 Profit
for Those Named, Grand
Jury Is Told.

Seven men. including four reputed
millionaires and two former Federal
employees. were indicted by the special
District grand jury today on charges
of conspiring to defraud the Govern
ment in connection with the construc-
ton of a S5,O00,000 P. w. A. irriga-
ton canal in Texas.
Those indicted are:
Charles r. Oldberg. former engineer
examiner in charge of irrigation work
with the p w A. in Texas and the
West
William A. Harding of Raymond
vile, Tex. director of the Board of
Directors of Willacy County Water
Control and improvement District
Harding. graduate of the University
of Minnesota. is said to be one of
the wealthiest men in Southern Texas.
Leonard c. Hammond. vice presi-
dent of the Hammond Lumber Co.,
San Francisco, Calf.
Harry w. Cole. president of the
California Redwood Association and
vice president of the Hammond g.
Little River Redwood Co.. Ltd.
James p Barry of San Francisco.
engineer with the Hammond e. Little
River Redwood Co.
Contractor Is Accused.
Frank P. McElwrath of Corsicans.
Tex, a contractor and banker of that
city
Perry A. Welty, formerly engineer
examiner with the p. w. A. State
Office at Fort Worth. Tex.
The indictment, which sets forth %
overt acts by the defendants, was re-
turned after months of Investigation
which led agents of the Interior De-
partment into all sections of the coun-
try. 1t is the first major graft charge
made in connection with P. w. A.
activities.
Originally the irrigation plans called
for a gravity canal. 1t is charged in
substance that the defendants con-
spired to change these plans so that
a pressure system calling for approxi-
mately $50 miles of redwood pipe
would be installed
II these plans had been carried
through. the indictment charges. the
defendants would have made a profit
of approximately 100000.
Ickes Granted Fund.
The Willacy County district origi-
nally applied for a loan and grant
for construction of an irrigation canal
on what was known as the open or
gravity canal system. Oldberg ap-
proved these plans in Washington
and Secretary of Interior Ickes made
an allotment of S4.853,000 for the
project.
1t weS necessary that certain minor
changes be made before the money
could be paid out and the plans we're
sent back to Fort Worth, where they
were turned over to Welty. The Gov
eminent charges that instead of max
| ing these corrections. he sought to
have the plans rejected entirely in
favor Of the pressure system.
Shortly after recommending to his
superiors that the pressure system be
substituted. it is charged. Welty took
position as engineer with the Willacy
County district. which had been Of
fered him by Han ding.
The indictment alleges that Welty
after leaving the Government service.
combined with the other defendants
and entered into a conspiracy to have
only redwood pipe used in the $50
| mile pressure system. It is charged
that in an attempt to insure the use
of the redwood piping Welty and
Barry. the latter representing the
California lumber company. wrote the
new specifications with such terms
that no other material could compete
with the redwood
Job Offer Is Charged.
After the specifications had been
written on these terms, it is charged.
they were sent to Washington, where
Oldberg was supposed to approve
them. In this connection. it is al
legged, he had been promised $4,000
a-year job as engineer on the Texas
project if he would give up his $4,000
job with the Government.
The allegedly fraudulent conspiracy
was uncovered. however. before the
money had been granted, and Secre-
tary IckeS Immediately killed the
project.
The alleged conspiracy, in brief,
, rests upon four grounds:
/. An attempt to defraud the United
States of its right to have the ma
tional industrial recovery act admin
iStered in a fair and effective manner.
2. An attempt to defraud the Gov
ernment of its right to have contracts
let by competitive bidding.
8. An attempt to deprive the Gov
ernment of its right to contract freely
and fully in all matters concerning
its property and money.
T. An attempt to deprive the Gov
ernment of the honest and faithful
services of Oldberg.
Cole Hammond, Barry and Harding
are said to be millionaireS. United
States Attorney Leslie C. Garnett and
his assistant. John W. Fihelly, who
handled the actual presentation of the
case to the grand jury, said all the
defendants will be given a reasonable
time to appear voluntarily and answer
the Indictment. but that warrants will
be issued fol them If they remain out
of the jurisdiction.
The indictment was returned before