Evening star., 1938-01-06
BY WILL p. KENNEDY,

duthority OF l1U.'
BY WILL P. KENNEDY.
Officials of the Home Owners Loan
Corp. were taken to task sharply by
Chairman Woodrum and other mem
bers of the subcommittee conducting
hearings on the independent Offices
appropriation bill. reported to the
House today, for the contribution of
SAC, 1000 from administrative appropri-
ations for group health insurance
without specific authority.
Horace Russell, general counsel for
the corporation, contended the cor
porations organic act, using "the Wild
est language ever used in q Federal
statute" gave broader discretion than
customary" He argued that the cor
poration, contracted with Group
Health Association, Inc, in the in
terests of economy and efficiency
through reducing sick leave and keep
ing employees in better health to per-
form their duties. The limit of such
authority, he said, lis whether the ac-
tivity contributes substantially to &C
complishing the purposes of the cor
poration, saves it money and enables it
to operate more efficiently"
Woodrum Hits Farce
On principle. Chairman Woodrum
and other members Of the subcommit-
tee objected. Mr.. Woodrum declared
1t was a perfect farce" for the Appro-
priations Committee to pass on appro-
priations with administrative officers
spending them as they saw fit. He said
he did not understand how q depart
ment could justify expenditures for
something as foreign that
was not in the minds and certainly
could not have been in the mind of
any member of this committee or the
budget when they passed on this ap-
preparation"
Questions by Representative Wig
ellsworth, Republican, of Massachu-
sets emphasized that there is no real
pre-audit or post-audit of the trans
actions of the H. o. L. c. John H.
Fahey, chairman of the Federal Home
Loan Bank Board, said that the con-
troller generals Office never has made
a complete audit of the operations OF
the corporation" When Mr.. Wiggles-
worth protested-"No audit compara-
BILE to what they make with respect to
other Federal agencies?"-Mr. Fahey
replied: mo. AS matter of fact. it is
a question if they make one anywhere.
I doubt II they have the staff that
would make it possible for them to do
So"
The work Of the Group Health As
sociation, which started its clinic at
1928 I street NV. with the Federal
NEST egg" of $4,000 on November l,
was explained to the subcommittee.
The value of time lost through sick
ness of H. o. L. c. employees is esti-
mated at S500,000 a year, Of which
100000 is at the home Office in Wash
ington. Part of the $4,000 Federal
nest egg" was used in remodeling
building in room of which the H.
o. L. C. established clinic. claimed
to be the finest clinic of the sort in
the city"
Equipment Supplied.
Part of the funds went for equip
ment. The medical director is DR..
Henry Rolf Brown, who in recent
years was in charge of all the hospitals
of the Veterans Administration
throughout the country. He is full
time employe at salary of $1,000
year, paid out of dues paid by Federal
employees. The health center also en-
ploys four other doctors. five or six
nurses and several laboratorians. The
membership dues are $220 for an in
dividual member and $3.50 for FAM
lily member per month.
Mr.. Russell said THE Home Owners
Loan Corp. made contract binding
itself to pay $4,000 to Group Health
Association, Inc.
"The association, voluntary mem
bership corporation, controls and directs
its affairs. employs its staff, and con-
ducts its clinic to look after the health
of the members" he continued. 1.-THE
present membership is near 900.
Function Defended.
Chairman Woodrum asked Mr..
Russell: do you think that as a legal
proposition you can say that the con-
tribution Of $4,000 through q health
clinic like this is within the general
purposes and the necessary functions
of the Home Owners Loan Corp. ?"
Mr.. Russell replied yes"
The service of the clinic includes
surgery, it was explained, and the
first case was to remove the appendix
Of q young man who was working
for $1,100 a year and sending money
home to his mother.
Prodded by Mr.. Woodrum, Mr..
Russell admitted he thought that If
the board were convinced its low
salaried employees could not be kept
sufficiently nourished without estab-
fishing a store selling the food at a
cheaper price, ut could establish q
store"
Representative Fitzpatrick said that
whether 1t involves . principle or
not, think it Is q good investment.
I think the money has been well
spent"