The Daily Alaska empire., 1951-01-19
PALMER DEAL IS
 TAKEN UP
Two Applications Investi- qated = CAA Officials
 Giving Testimony
By FRANK w. vAILLE

 WASHINGTON, Jan. 19 = R = Members of Senate Investigating Committee are probing into what they said appeared to be slip shod" and nasty" methods of the Civil Aeronautics Administration in the approval of federal grants for airports.
 The subcommittee is inquiring into purported irregularities in con- nection with the allocation of fed eral funds for a field at Palmer, Alaska.
 The investigation resulted from the Alaska Aeronautics Commis- sion's rejection of one CAA-ap- proved grant for the Palmer field and it's subsequent submission of a second application in which the value of the airport land was in creased from $5,500 to $150.o00
 The second application also ob- tained CAA approval but no federal funds have been transferred under 1t.
 Variations Noticed
 The variation between the two applications increased approved federal participation in the Palmer field from 4.750 to $l45. .125, Com mittee counsel said.
 The committee members directed their principal questions at what efforts had been made by the CAA to verify land values claimed in the applications and to check owner ship of the land involved. CAA of ficials called as witnesses said no such checks had been made.
 Land Involved
 In its initial request the Alaska Commission said it owned one tract of the land involved and was nego- tiating for the second. Its later re- quest said none of the land actually was owned by the commission and that it would cost $150,000
 Edward G. Fisher, airways engi- neer for the CAA's Eighth Region at Anchorage. told the committee yesterday afternoon that he had apparently misunderstood the ques- tion" when he testified earlier that it was obvious" to him the com mission was attempting to recover construction costs incurred before any federal aid was asked when it submitted its second application, including the increased land values.
 No "Subterfuge"
 He said he did not consider that any "subterfuge" was being used that the commission reasoned that as long as previous construction costs were not allowable under the federal airport act it would put in for the value of the land which it had not entered in the original ap- plication.
 Several CAA officials testified it was not required under the agency's operational procedure that an ap- plicant for funds show holding of title to the property involved or that improvements had been made until the applicant asked that the government make an initial pay ment on any grant.
 Chris Lample, CAA Administra- tor for Alaska's public airports. tes- tified 1t was permissible under CAA interpretation of the federal air port act for an applicant to apply for grants based on the property value as enhanced by construction improvements even though it was not permissible to include the cost of those improvements as such. He denied ever having talked with any territorial official concerning means of getting around" the re- striction on inclusion of improve ment costs.
 Also testifying yesterday were William Conover, Operations Off, cer for the CAA in Washington; and Joseph Fitzgerald, regional CAA at torney in Anchorage. Two territorial officials-George Schwamm, Alaska Aeronautics Com mission Director, and Stanley Mo- Cutcheon, Commission Counsel - and Roland Snodgrass, Secretary of the Palmer Aeronautics Committee, were to testify today. SCHWAMM TESTIFIES