Union Calendar No, 781 - - - - - 87th Congress, 2d Session House Report No. 1858 ILLEGAL ACTIONS IN THE CONSTRUCTION OF THE AIRFIELD AT FORT LEE, VA. SEVENTEENTH REPORT BYTHE COMMITTEE ON GOVERNMENT OPERATIONS JUNE 20, 1962.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed U.S. GOVERNMENT PRINTING OFFICE 72006 WASHINGTON :1962 COMMITTEE ON GOVERNMENT OPERATIONS WILLIdM L. DAWSON, Illinois, Chairman OHET HOLIFIELD, California CLARE E. HOFFMAN, Michigan JACK BROOKS, Texss R. WALTER RIEHLMAN, New York L. H. FOUNTAIN, North Carollna GEORGE MEADER, Michigan PORTER HARDY, JR., Virginia CLARENCE J. BROWN, Ohio JOHN A. BLATNIK, Minnesota FLORENCE P. DWYER, New Jersey ROBERT E. JONES, Alabamn ROBERT P. GRIFFIN, Michigan EDWARD A. QARMATZ, Maryland GEORGE M. WALLHAUSER, New Jersey JOHN E. MOSS, California ODIN LANGEN, Minnesota JOE M. KILGORE, Texas JOHN B. ANDERSON, Illinois DANTE B. FASCELL, Florida RICHARD S. SCHWEIKER, Pennsylvania HENRY S. REUSS, Wisconsin F. BRADFORD MORSE, Massachusetts ELIZABETH PEE, West Virginia KATHRYN E. GRANAHAN, Pennsylvania JOHN S. MONAGAN, Connecticut NEAL SMITH, Iowa RICHARD E. LANKFORD, Maryland % ROSS BASS, Tennessee LUCIEN N. NEDZI, Michigan CHRISTINERAYD AVIS.S laf Dtreelor JAMESA. LANIGANU, e~eralC oumeZ MILES Q. ROMNEYA,ssociate &nerd Counsel HELENM . BOYER,M inority Professional Raff J. P. CARLSONM,inority Coz~nseZ WILLIAM L. DAWSON, Clinois, Chairman DANTE B. FASCELL, Florida CLARENCE J. BROWN, Ollio KATHRYN E. GRANAHAN, Pennsylvania JOHN B. ANDERSON, Illinois NEAL SMITH, Iowa CLARE E. HOFFMAN, Michigan, Ex Oficio ELMER W. HENDERSONC,O lln8el ARTHURPERLMAN, I"~e~fk7of07 DANIELK AVANAUGIHn,~ eslioatcr VEROATCBA. JOHNSONC, lerk IRENDE. MANNINOC. lerk LETTER OF TRANSMITTAL HOUSEOF REPRESENTATIVES, Washington, D.C., June 20, 1962. Hon. JOHNLICCORMACK, Speaker of the House of Representatives, Washington, D.C. DEARM R. SPEAKERB: y direction of the Committee on Govern- ment Operations, I submit herewith the committee's 17th report to the 87th Congress. The committee's report is based on a study made by its Executive and Legislative Reorganization Subcommittee. WILLIAML. DAWSONC,hairman; m CONTENTS Page I. Introductory statement ......................................... 1 11. Findings and conclusions ........................................ 4 111. Recommendations--------------------------------------------- 15 IV. Commentary------------------------------------------------- 18 Conflicts in testimony- - - - .................... ------------- 18 Evasion of project cost limitations of title 10, United States Code, section 2674-------------------------------------------- Failure to justify the airstrip project as "urgently required"---- Falsification of purchase requests ---------------------------- Approval of the construction of a hangar ..................... Corruption from failure to enforce accountability -------------- Appendix I-References to documents and testimony referred to in find- ings and conclusions--------------------------------------------- Appendix 11-Statutes relating to possible violations of law in connection with construction of airfield at Fort Lee, Va- -- V S~THCONGRESS HOUSE OF REPRESENTATIVES { REPORT ad Xessiolz No. 1858. ILLEGAL ACTIONS IN THE CONSTRUCTION OF THE AIR- FIELD AT FORT LEE, VA. JUNE20, 1962.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. DAWSONf,r om the Committee on Government Operations, submitted the following SEVENTEENTH REPORT BASED ON A STUDY BY THE EXECUTIVE AND LEGISLATIVE REORGANIZATION SUBCOMMITTEE On June 20, 1962, the Committee on Government Operations had before it for consideration a report entitled "Illegal Actions in the Con- struction of the Airfield at Fort Lee, Va." Upon motion made and seconded, the report was approved and adopted as the report of the full committee. The chairman was directed to transmit a copy to the Speaker of the House. In January 1961 the Comptroller General sent to Congress an audit report entitled "Review of Programing and Financing of Selected Facilities Constructed at Army, Navy, and Air Force Installations, Department of Defense." This report was referred to the Committee on Government Operations. Since the staff of its Military Operations Subcommittee was tied up on other work, the chairman assigned the matter to the Executive and Legislative Reorganization Subcom- mittee to be investigated under the direction of the full committee staff. At the chairman's request, the Comptroller General assigned one employee, and at times two, to assist in the investigation. Two statutory duties of the Committee on Government Operations are involved: (1) Receiving and examining reports of the Comptroller General of the United States and of submitting such recommendations to the House as it deems necessary or desirable in connection with the subject matter of such reports, and (2) studying the operation of 1 References throughout this report to "Hearings" refer to "Illegal Actions in the Construction of an Airfield at Fort Lee, Va.-Hearings Before a Slfxommittee of the Committee on aovernment Operations, House of Representatives, 87th Cong., 2d Sess. 2 ILLEGAL ACTIONS IN AIRFIELD CONSTRUCTION AT FORT LEE, VA. Government activities at all levels with a view to determining its economy and efficiency. In some res ects the most serious ?matter dealt with in the Comp- troller ~eneraFsre port was the construction of the airfield at Fort Lee, Va., by the Quartermaster Corps. It appeared that a number of statutes and sections of the Uniform Code of Military Justice had been deliberately violated by several officers who had signed or con- spired in the signing of .documents falsely charging purchases of material and services used in constructing the airfield to other projects in order to hide the fact that both a statutory and an administrative limitation on funds was being exceeded; who had deliberately expended or conspired to expend moneys in excess of statutory and admmistra- tive limitations, and who had removed and destroyed or conspired to remove and destroy records which wouId have revealed their illegal actions to General Accounting Office auditors. The committee's investigation uncovered a number of other illegal and improper actions. It also demonstrated the existence of what may be called a "system" among officers of the U.S. Army under which subordinate officers felt compelled to go along with their supe- riors in the performance of acts which they knew were illegal and improper even after they had protested to their superiors regarding such illegality and impropriety, and under which the superiors felt they could compel such subservience on the part of the subordinates. These officers were disloyal to their public trust, to their subordinates, and to the Army. Conduct of this kind which brings into public disrepute high-ranking officers can only result in loss of confidence in the integrity of our Military Establishment. The operation of the "system" was further demonstrated by the failure of the responsible officers to bring court-martial proceedings against those guilti l' of the offenses, by their failure to investigate the matter except un er extreme pressure,. by their general reluctance to take disciplinary action, and by the= attempts to cover up and excuse the offenses rather than to get to the bottom of the whole affair. The Executive and Legislative Reorganization Subcommittee held 8 days of hearings on the Fort Lee matter in March 1962. The follow- ing persons testified, all under oath. They are listed in order of appearance: William A. Newman, Director, Defense Accounting and Auditing Division, U.S. General Accounting Office, accompanied by John Moore, attorney. Hyman Baras, supervisory accountant, U.S. General Accounting Office, on assi-gnment to House Committee on Government Operations. David C. Kelly, supervisory auditor, Norfolk Regional Office, U.S. General Accounting Office. Maj. Thomas S. Swartz, U.S. Army Reserve (retired), former assistant post enpeer, Fort Lee, Va. Lt. Col. Julian E. ylant, post enpeer, Fort Lee, Va. Col. James W. Connor, U.S. Army (retired) Col. Walter R. Ridlehuber, Director of Warehousing, Memphis General Depot, Memphis, Tenn. Col. Louis H. Shirley U.S. Army (retired). Robert G. ~ac~onaiCdh,i ef , Facilities Branch, Quartermaster General's Office. ILLEGAL ACTIONS IN AIRFIELD CONSTRUCTION AT FORT LEE, VA. 3 Lt. Col. William H. Jarrett, U.S. Army (retired). Col. Grant N. Healey, Quartermaster Corps, U. S. Army. Col. James C. Pennington, General Staff, Assistant Chief of Staff, G4, U.S. Army, Ryukyu Islands. Maj. Gen. Alfred B. Denniston, U.S. Army, commanding general, the Quartermaster Training Command, Fort Lee, Va. Lt. Gen. David W. Traub, Comptroller of the Army. Robert L. Tracy, legal adviser to the Comptroller of the Army. Col. James E. Godwin, Staff Judge Advocate, Headquarters, Second Army. Because the facts uncovered are so serious, the committee is making this separate report on the Fort Lee airfield construction. We intend to cover other items in the January 1961 General Accounting Office report in a later report to the House. H.Rept. 1868,87-2-8 1. The construction of an airstrip to cost $876,000 was included in the military construction program submitted by the Quartermaster Corps officials at Fort Lee, February 17, 1956, for the fiscal year 1958 and was not approved by the Army. The airfield project had also been turned down in 1955 for inclusion in the fiscal year 1957 military construction program. 2. Despite the disapproval of the airstrip item in the 1958 military construction progTam, officials at Fort Lee determined to build it any- way using funds appropriated for operation and maintenance and labor of troops borrowed from the Corps of Engineers at Fort Belvoir, Va. 3. (a) Applicable law authorized administrative approval of the use of operation and maintenance funds to construct an urgently required minor construction project the cost of which did not exceed $25,000. : (b) De artment of Defense Directive 4270.6 of October 10, 1957, paragrap 111. A. 2., required that in order to qualify for approval under section 408 of Public Law 968- ' the project [be] such that it could not reasonably have been anticipated in time for inclusion in the regular military con- struction program and completed prior to need. 4. On September 17, 1957, an individual project estimate on form DA5-25, submitted by Lt. Col. William H. Jarrett, post engineer, and approved by Col. Louis H. Shirley, deputy post commander, was submitted by Fort Lee to the Office of the Quartermaster General to gryo vide for the construction of a flexible pavement landing strip 75 1,500 feet, the minimum necessary qverruns, paved taxiways, and parking aprons, and including,a:r995-foot paved access road. This estimate provided for a total project cost of $110,095, of which $73,086 represented the value of labor and supplies on hand or available for which funds did not have to be requested. Funds were requested in the amount of $37,009 to complete the project. Subse uently, Lieutenant Colonel Jarrett was notified by an officer in the was%ngton office of the Corps of Engineers that the project estimate would not be approved because the funds requested exceeded $25,000 and be- cause the runway was only 1,500 feet long and the depth of the paving only 1%inches. The reason given at this time for reducing the funds requested was to keep the project within the $25,000 approval author- ity of the Chief of Engineers and to avoid having to secure approval by the Secretary of the Army under section 408. The decision to utilize operation and maintenance funds was made later when the a For references to documents and testimony supporting the findings and conclusions, see app. I; for elaboration of certain findings and conclusions, see pt. IV, infra headed "Commentary." a Public Law 968 84th Cong. sec. 408 (act of Aug 3 1956. 70 Stat 1016) and its successor provlsion 10 U.S.C. 2674 (act oi7~ept2. 195i. 72 Stat. 1437 1459): 60th brovisiods are brinted in app. I1of the rep&!; Hereafter in this report uhless btherwise indicated reference to 10 U S.C 2674 or merely to "sec. 2674 is intended to include &c 408of Public Law 968 84th Cong This se'ctiod also'authorizes administrati& approval of the use of mifitary construction funds for urgent'minor projects costing not more than $200,000. 4 ILLEGAL ACTIONS IN AIRFIELD CONSTRUCTION AT FORT LEE, VA. 5 revised project was approved. (See Findings Nos. 5 and 9.) This brought the $25,000 statutory limit referred to in the preceding para- graph into effect. 5. On November 1, 1957, Fort Lee submitted a revised project esti- mate again signed by Lieutenant Colonel Jarrett and approved by Colonel Shirley for the construction of a landing strip 75 by 2,500 feet with minimum necessary overruns, paved taxiways, and parking apron and including a 545-foot paved access road. The thiclmess of the paving was to be 2 inches. This estimate provided for a total cost of $141,537, of which $116,589 represented the value of labor or supplies on hand or available, for which funds were not requested. An amount of $24,948 was requested to complete the project. Lieutenent Colonel Jarrett, who was post engineer at the time, and Maj. Thomas S. Swartz, who was assistant post engineer (both now retired), testified that the figures in the revised estimate were arbitrary and were merely put down to meet the requirement for lowering the funds requested below $25,000. They testified that no attempt was made to secure accurate figures for the revised project estimate. In fact, they testi- fied that it was obvious to them and should have been obvious to others that the length of the runway could not be increased by 1,000 feet and the depth of the pavement increased by one-half inch and at the same time the amount of requested funds reduced by over $12,000. Colonel Shirley testified that he made no effort to ascertain whether the figures were realistic and did not question the incongruity of en- larging the project while at the same time decreasing the funds re- quested. In the memorandum transmitting the revised project request, it was indicated that the officials at Fort Lee would use the amount requested and then request more. However, in approving the request, the Quartermaster General placed limitations on the total amount of funds to be expended for the airfield project and desig- nated t h ~otp eration and maintenance funds would be used, thus also bringing the $25,000 statutory limit into effect. (See Finding No. 9.) Colonel Ridlehuber, the Fort Lee G-4 (Logistics) Assistant Chief of Staff, in a teletype of April 8, 1958, clearly recognized the limitation placed on the project in the Quartermaster General's approval. 6. So far as the committee could ascertain, there was no indication in the records of the Quartermaster Corps in Washington or at Fort Lee that the project was '(urgently required," as the statute demands. 7. The committee finds that Major Swartz and Lieutenant Colonel Jarrett presented a revised project estimate which they knew was not and could not be supported. Colonel Shirley, who approved the submission of both the original and revised project estimates, should have known that the project could not be enlarged in scope and reduced in cost in the manner indicated by the estimates. This fact should also have been obvious to the officials in the Office of the Quartermaster General and the Corps of Engineers who finally ap- proved the project. While it is conceivable that the approving offi- cers were only incompetent or negligent, the pattern of events indi- cated that they were all willfully conniving in the violation of the law. 8. On November 27, 1957, the Office of the Quartermaster General approved the revised project request for the airfield. Such approval was contrary to the provisions of Department of Defense Directive 4270.6 of October 10, 1957, cited under paragraph 3 above, because the project, having actually been included in the request for the 1958 6 ILLEGAL ACTIONS IN AIRFIELD CONSTRUCTION AT FORT LEE, VA. military construction program submitted by Fort Lee, failed to meet the requirement that it be such that it could not have been reasonably anticipated in time for inclusion in the regular military construction program. Since this clause in the directive defined the nature of urgency under section 408 of Public Law 968 of August 3, 1956, the approval of the project also violated the provision of that law that the project be "urgently required." 9. In approving the airstrip project, the Quartermaster General limited the total estimated cost to $141,537 and the total expenditure of operation and maintenance funds to $24,948 for supplies and indi- rect costs. The approval also provided that no work should be accomplished that would conflict with the ultimate completion of the airstrip in full accordance with the criteria for a standard Army airfield, contained in the applicable Corps of Engineers manual. The approval particularly required that all prescribed clearances for structures or other obstructions be maintained during present and future stages of construction. (See Finding No. 12.) 10. The responsible officials at Fort Lee violated the limitations in the approval and in the law, with respect to funds, as follows: (a) The operation and maintenance funds expended for materials and services were at least $66,605 or over $41,000 more than the $24,948 authorized. The total cost of the project, not including the hangar, was $508,305 or over $366,000 inore than the $141,537 author- ized as the total cost of the project. In addition, a hangar was con- structed costing about $28,000, which is properly chargeable to the project because it was part of the project as originally conceived. This would raise the total cost of the project to $536,373 and the total amount of operation and maintenance funds spent to over $94,000. The figures stated are the minimum ascertainable by the committee, for it is admitted that records were falsified and purchases charged to other projects. Some of these deceitful actions may have escaped detection. Further, the committee, the General Accounting Office, and the Army Audit Agency agree that $84,121, paid by Fort Lee out of operation and maintenance funds to provide for the transportation and per diem of engineer troop'rhhbor from Fort Belvoir, should also have been charged against the operation and maintenance fund limita- tion since clearly such funds were used for this purpose and were part of the cost of the project. In short, at a minimum, operation and maintenance funds totaling $15 3,000 were expended on the project despite the statutory requirement that a project built with operation and maintenance funds may not cost over $25,000. (b) The expenditures described in the preceding paragura. 8h ~pla.inly violated section 408 of Public Law 968,84th Congress (10 2674), and Revised Statute 3679, as amended (31 U.S.C. sec. 665). These sections are set forth in full in the appendix to this report. The officers directly responsible for these violations include: Col. Walter R. Ridlehuber, Col. Louis H. Shirley, Col. James W. Connor, Lt. Col. William H. Jarrett, Lt. Col. Julian E. Pylant, and Maj. Thomas S. Swartz. Also directly responsible in the case of the hangar are Col. James C. Pennington and Mr. Robert G. MacDonald. Detail on the hangar will be found in Finding No. 14 as well as under part IV, infra. 11. Besides the aforementioned illegal overage in operation and maintenance expenditures, the Fort Lee airfield project shows the