Evening star., 1946-08-11
Treasury Aides
Contract Roles
To Be Probed
Profits of o55 Pct.
Charged to Brokers
Without Plants
By Miriom Ottenbero

cases in which Treasury Depart
ment procurement officials al
legedly gave lease-lend contracts
to men who had no plants of
their own but made exorbitant
profits out of the deals, COM
mittee disclosed last night.
Involved in most of the cases, ac-
cording to this official, were three
Treasury Department employees who
were suspended last November on
charges of accepting favors from
contractors.
! Contractors in the cases were de-
scribed by the committee spokes-
man as "f1y-by y-night" operators
who had nothing in the way of as
sets but desk space. These con-
tractors, it was explained, found
jobbers to do the work cheap and
"the Government got stuck for the
difference.
Profits of 955 Per Cent.
Committee investigators report
edly have unearthed evidence that
gross profits on these deals ranged
as high as 955 per cent and that
the contractors gave week end par
ties to smooth the path of their
operations.
On several occasions, the COM
mittee spokesman said, contractors
repeatedly financed trips to a Hud-
son River retreat for Government
employees and their secretaries.
While the amounts involved In
these contracts were relatively
small-totaling about $1,000, ,0O0-
the spokesman said the committee
was interested because "a bad pro-
curement practice is just as bad
regardless of the size of the con-
| tract"
He indicated that the cases al
ready under study might lead to
an investigation of similar practices
in other agencies.
! The committee, he said, was in
terested In procurement in the
Maritime Commission, Reconstruc-
ton Finance Corp, and Defense
Plant Corp, as well as the War
Navy and Treasury Departments.
On the Treasury cases. the COM
mittee spokesman told of a former
bakery salesman who used two diff
ferent names, operated two COM
panies and received nearly a score
of contracts aggregating 100000
This person. according to commit
tee files, had nothing but an Office
a desk and a chair when he weni
after the contracts.
| The committee aide said this was
a more fragrant case than that ir
which the Carson brothers were
involved, since Henry Carson a
lease rented plant and hired it,
workers when he got a War De.
partment contract. The investigat.
ing committee recently turned ovel
its file on the Carson munition!
combine to the Justice Department
Treasury records. the committee
spokesman said, showed that one
contract was let for $22, ,48970 anc
farmed out by the contractor to {
manufacturer who produced The
items at cost of $2,39248 In an.
other case, according to the com.
mittee files, the Government paie
"a cents each for steel machine pin!
which were manufactured at a cos
of 3.6 cents.
Not Impressed" by Explanation.
i The committee, its spokesman
said, was mot impressed by thu
Treasury Departments explanation
that it had to tap previously untriee
sources to make lease-lend pur.
chases because the Army and Navy
exercised top priorities for all sort.
!; of equipment.
; procurement officials were SUP
posed to go to the source of th
materials, not work through broker
or contractors without plants" thu
committee official said. They cal
call it expediting but profits lik,
the kind these people made are 1
lot to pay for expediting."
Pointing to four thick folders, tn,
committee official said it might no
be necessary to hold many public
hearings on these cases because tn,
committees information was S,
; nearly complete.
When the three Treasury off
cials-a purchasing officer, his SUI
pervisor and woman employe il
one of the commodity groups-wer
suspended last fall, Clifford T
, Mack, director of the procurement
division, said hundreds of thousand
+ of collars worth of contracts ha,
been handled by the trio.
The gratuities the three were ac
> cused of accepting from contractor
took the form of dinners and hote
expenses, Mr.. Mack said.
While there was no evidence O
money changing hands, he said,
+ full-scale investigation was ordere
of every contract with which tn