Evening star., 1947-11-22
SharpCriticisn1
OF GS| Voiced
BySenateUnit
Subcommittee AssuiIs
Loose Management
In. Incomplete Report

Sharp criticisms of numerous &C.
tivities OF Government Services
Inc, were voiced today in a tenta-
tive and incomplete report released
by the Baldwin subcommittee of the
Senate Civil Service Committee.
Most of the criticisms were di-
rected at the administration of the
huge agency which operates cafe
teriaS, snack bars and recreation IA
c1litieS here and in several States.
Loose management was charged
and responsible officials were said to
be In a position of trying to serve
two masters" The GSI status, the
report contended, had become that
of a commercial organization
rather than one devoted to any
noteworthy welfare purpose"
Senator Baldwin of Connecticut,
chairman of the subcommittee,
which conducted several months of
hearings earlier this year, empha-
sized that the report was mot COM
plete." Attaches of the subcom-
mittee said it might lead to pro-
posed legislation
FBI Studied Hearings.
The preliminary report said that
the Federal Bureau of Investigation
had examined records of the first
eight parts of the ten-part hearing.
The FBI finds, said the report, that
no investigation of GSI W the Fed
eral Bureau of Investigation would
be justified for the reason that it
does not seem probable that such an
investigation would disclose viola
tions of any Federal criminal STAT
utes."
At the time the Baldwin report
was written, the long range audit
of GSI by the General Accounting
Office had not yet been received,
1t was pointed out. But a financial
obligation of GS1 to the Federal
Government up to December 81, 1945,
was estimated by the Baldwin report
to be $478,0O0 whereas GSI con-
tended it owes the Government only
about S233,0O0.
These figures are substantially the
same as the findings of a General
Accounting Iffice report made public
this week.
Two More Reports Due.
Two more reports may be forth
coming from the Baldwin Commit
tee, it was said. The first would be
an official print of the GAO report
on GSI. The final report is expected
to be summation by the Baldwin
Committee with specific recommen-
dations growing out of the long
investigations by both the GAO and
the Baldwin Committee.
In the meantime, GSI itself has
been undergoing a considerable re-
organization. A new president, Maj.
Gen. U. S. Grant III, retired, chair
man of the National Capital Park
and Planning Commission, has taken
over as head of GSI.
In it's criticism of the purpose of
GSI the report says although dur
ing the first years of GSI'S existence
a considerable portion of its income
apparently was used for the welfare
of Government employees, it appears
that the sum to be used for that
purpose in recent years has been
negligible and that GSI's status
has become that of a commercial
organization rather than of one
devoted to any noteworthy welfare
purpose. Yet, GSI still pays no
Federal income tax, exemption
therefrom having been obtained
under provisions of = the Revenue
Act of 1886"
Operates 100 Units.
The extent of GSIs operations was
outlined at several places in the
Baldwin report. Outlining its
growth from its beginning as the
Welfare and Recreation Association
running cafeterias, the report says
GSI now operates 130 units. These
include 78 cafeterias and snack bars
and other facilities in the District,
Virginia, Colorado and
North Carolina. 1t also conducts an
activity known as its insurance di-
vision.
Up to the end of last year the
aggregate business of GSI was said
to have reached the figure of more
than $102,000,000. OF this total more
than $85,000,000 was in cafeteria
receipts. It's gross in 1946 was $12,-
726,700.
The Baldwin report cited many
instances which it claimed showed
"the unsatisfactory manner in which
GSI has kept its records" These
instances, the report said, may not
be swept aside as trif1ing or of no
because they clearly
demonstrate the loose manner in
which GSI has been permitted to
handle it's affairs
Divided Loyalty Seen.
Pointing out that some trustees
are Government officials, the Bald
win report said certain trustees
are constantly called upon to serve
two masters. In their official capac-
tiles they pass upon the same action,
which as members of the Board of
Trustees, they originally had taken.
Moreover, since inception of GSI,
its active members and trustees
have been in position to influence
the granting of additional conces-
sions and privileges to GSI and to
interpose in it's relations with the
Government, and thus have been in
positions of divided loyalty"
The Baldwin subcommittee re-
port has been filed with the Civil
Service Committee, headed by Sem
ator LANCER Other members are
Senators Flanders, Republican, of
Vermont and Johnston, Democrat,
of South Carolina.
n n HunE