Date: 1982-05-20
Speaker: WAYNE SCHLEY (republican)
Chamber: S

Staff Director. Subcommittee on Civil Service and General Services. Committee on Governmental Affairs. U.S. Senate. Washington. D.C. DEAR WAYNE: During our February 16 meeting you expressed interest In two of our recent misrepresentation cases and inquired as to how the provisions of 8. 1407. if enacted. would have been of assistance in these cases. Our complaint against Alaska Employ. ment. P.S. Docket No. 7/166. was filed in March. 1980 and resulted in a final decision favorable to the Postal Service (copy enclosed) on April 30. 1981. The promoter offered for sale information concerning the alleged availability of attractive employment in Alaska. Our case consisted primarily of testimony from witnesses familiar with the Alaskan job market that the employment opportunity the promoter described did not exist and that its ability to assist persons seeking Alaskan employment was minimal. In Classified Reports. P.S. Docket No. 12/ 178. we contend that the promoter promises to provide. but does not. information which will allow anyone to obtain free money and automobiles from the Government. Our complaint (copy attached) was filed on December 1. 1981. A hearing was held February 89. 1982 and the case is awaiting an initial decision by the Administrative Law Judge. Our case consisted primarily of the testimony of persons from the Government agencies which administer the major entitlement programs to the effect that only persons meeting particular eligibility requirements. and not just anyone. would be entitled to benefits under the programs they administered and that "free" automobiles were not available. These cases are difficult to prove under the existing misrepresentations statute (39 U.S.C. J 3005). We are confronted with necessity of proving that the respondent cannot do what its advertising claims but have no authority to gain access to its records of what it is. in fact. doing. In the Alaska Employment case we had to prove that the job market in Alaska was not as respondent claimed and that respondent could not provide leads to the desirable jobs it described. This was eventually accomplished after substantial delay and expenseIncluding bringing witnesses from the Alaskan government to Washington. Similarly in Classified Reports we expect to prove from the testimony of witnesses familiar with the major Government entitlement programs that no Government entitlement program offers the benefits respondent claims. Unlike many of our other cases where experts are called upon to testify that generally accepted scientific principles disprove the respondents claims for Its products. cases like the above require that we prove that the promoter is not doing something that is scientifically possible without the advantage of commonly available investigative tools that would allow us to determine what the promoter is. In fact. doing. Ultimately we can prevail but the process is dilatory and consumers may continue to be fleeced while we develop our case. The written demand provisions of S. 1407 (Section 413) would allow us promptly to determine the truth or falsity of the claims in cases like the two described above. In Alaska Employment we could have demanded any records which demonstrate the existence of the job opportunities the promoter claimed. In Classified Reports we could have demanded documents identifying the entitlement program(s) the promoter alluded to and the names of any of its customers who had actually received the benefits it claimed were available. In all likelihood. the use of such authority would have resulted in the informal settlement of these cases very early in the investigative stage and the public would not have continued to sustain losses during the course of our proceedings. Please let me know if I may be of further assistance. Sincerely.