HOUSE OF REPRESENTATIVES, GOVERNMENT ACTIVITIES SUBCOMMITTEE OF THE Hon. STEWART L. UDALL, Secretary of the Interior, Washington, D.C. DEAR MR. UDALL: The Honorable William L. Dawson, chairman, Government Operations Committee, has requested the Government Activities Subcommittee to examine further into certain matters discussed in a letter to him from Administrative Assistant Secretary D. Otis Beasley, dated February 15. That letter purports to respond to Chairman Dawson's letter of August 9 concerning the propriety of National Park Service regulations and practices authorizing Federal employees to receive, and requiring park concessionaires to furnish to them, free meals and other accommodations at reduced rates. I Mr. Beasley's letter takes the position that the Superintendent of Yosemite National Park acted properly in receiving 167 meals without charge from the concessionaire in that park on 98 occasions during a period of less than 29 months. Mr. Beasley's letter apparently justifies the Superintendent's receiving free meals as an exercise of his duty to make inspections of the quantity and quality of food served to visitors at approved rates. Please let us know whether you believe it is feasible for the Superintendent to make such inspections without receiving free meals. Also, please let us know whether you consider it essential to the performance of the superintendent's inspections that the concessionaire be required to serve such free meals to the superintendent's guests. II We believe that Mr. Beasley's response completely fails to respond to that portion of Chairman Dawson's letter of August 9 concerning the propriety of the Park Service regulations and practice authorizing Government employees to receive, and requiring concessionaires to furnish to them, free meals and other accommodations at reduced rates. (a) Chairman Dawson's letter did not criticize or even mention the Department's practice of reducing the employee's per diem when his meals and lodging are furnished by the concessionaire. Mr. Beasley's discussion on this point, therefore, is irrelevant. (b) The letter from Chairman Dawson stressed the importance of avoiding both conflict of interest and the appearance of conflict of interest which may arise when officials receive personal favors, gifts, or perquisites from private interests directly in connection with the performance of their official duties. Mr. Dawson pointed out that the Comptroller General, in a letter to your predecessor, had specifically suggested that your Department ought to reexamine the Department's practice in this regard. Mr. Dawson also pointed out that since Congress has approved legislation (H.R. 3279, enacted August 14, 1961, as Public Law 87-139) raising the maximum per diem, there is even less justification for Government employees getting from concessionaires free meals or reduced rate accommodations which create the appearance of direct conflict of interest between the employee's duty to protect the Government's interest in its relations with the concessionaire and the sense of personal obligation that a Government employee might feel when receiving personal benefits from the concessionaire. Mr. Beasley's letter wholly fails to respond to these points. Although he did transmit a pocket-size copy of the Department's regulations governing conduct of Department employees, I do not see its relevance to the issues discussed in Chairman Dawson's letter. Moreover, although Mr. Beasley also stated that the Park Service is now modifying its regulations to conform to the departmental regulations, he did not state how those modifications will in any way affect the particular points-free meals and reduced rate accommodations-discussed in Mr. Dawson's letter. (c) In addition, Mr. Beasley's statement that it would be "untimely" for the Department to comment on pending legislation now before the Congress wholly misconceives Chairman Dawson's reference to 18 United States Code 1914 and the conflict-of-interest bill (H.R. 8140) which the House passed on August 7, 1961. Mr. Dawson did not ask for comments on H.R. 8140 or any other pending legislation. His letter cited 18 United States Code 1914 simply because the Comptroller General recently stated that the furnishing of free meals and other accommodations to Interior Department officials in connection with the performance of their official duties might constitute a violation of the criminal provisions of that statute. Chairman Dawson referred to H.R. 8140 only to indicate that this pending legislation does not weaken, but would strengthen, the prohibitions in 18 United States Code 1914. It is, therefore, requested that you review Chairman Dawson's letter of August 9 in the light of the comments here made and let us have your views as to whether the Department plans to retain the existing regulations and practices under which the Park Service requires the concessionaire to furnish free meals and other accommodations at reduced rates to Federal employees. Sincerely, Hon. WILLIAM L. DAWSON, JACK BROOKS, Chairman. DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D.C., March 23, 1962. Chairman, Committee on Government Operations, DEAR MR. DAWSON: The Secretary has recently received a letter from Chairman Brooks, of the Government Activities Subcommittee, which is critical of my response to your inquiry regarding departmental practices affecting its employees in their relationship with park concessionaires. I wish to assure both you and Congressman Brooks that you may expect the same cooperation from me in this matter as I feel I have given your committee in the pilot study to determine estimated current day values of certain real property holdings of the Department. Steps are being taken to furnish to Congressman Brooks the additional information he has requested. Sincerely yours, Hon. JACK BROOKS, D. OTIS BEASLEY, Administrative Assistant Secretary. DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D.C., March 23, 1962. Chairman, Government Activities Subcommittee, House of Representatives, Washington, D.C. DEAR MR. BROOKS: I sincerely regret that my letter of February 15 to Congressman Dawson was interpreted as lack of cooperation on my part in the efforts of your committee to study certain aspects of the relationship between employees and the concessionaires of the National Park Service. There is enclosed a copy of my letter to Congressman Dawson assuring him of my fullest cooperation in this matter. The points raised in your letter of February 27 will be fully considered and you may expect additional information from the Department at an early date. Sincerely yours, D. Ons BEASLEY, Administrative Assistant Secretary. U.S. DEPARTMENT OF THE INTERIOR, Hon. JACK BROOKS, Chairman, Government Activities Subcommittee, Committee on Government Operations, House of Representatives, Washington, D.C. DEAR MR. BROOKS: As you were advised on March 23, the Department regrets that its letter to Congressman Dawson regarding certain aspects of the relationship between employees and concessionaires of the National Park Service has been viewed by your committee as a lack of cooperation on the part of the Department of the Interior. The Department has again reviewed the entire matter and has weighed carefully references in your letter of February 23, which was in reply to our letter of February 15. It is our desire that you be provided with all the information which you deem essential to the discharge of your committee's responsibility. In no way do we wish to give the impression that a full and complete response to your inquiry is being avoided. The Department believes it is neither feasible nor practical for the superintendent of Yosemite National Park to inspect the food operations of the concessionaire without eating in places where meals are served. While we have not made an exhaustive study of whether or not there is authority for the Government to reimburse the superintendent should he be required to pay for the meals which he eats during inspection visits, we know of no authority which would permit such reimbursement for the actual costs of his meals. It is important to recognize that the inspections are not for the purpose of providing a free meal for the superintendent, but to protect the public visiting the park. The public being well aware that the operations are conducted directly by the Government or by concessionaires will be demanding in that the quality of service as well as the cost of the service are in the public interest. The Department does not contend that it is essential to the performance of the superintendent's inspection that the concessionaire serve meals free to the superintendent's guests, and we know of no provision which requires the concessionaire to do so. If the concessionaire should decide not to accept payment for guests of the superintendent, it does not appear that it would be proper to deny the concessionaire this right. With regard to your inquiry as to the Department's views on the continuation of the practice of permitting Government employees to receive meals and other accommodations at reduced rates, we would like to advise you that this is a matter which has been considered over a long period of time. As you know, this question was submitted to the Comptroller General several years ago, and he ruled that the Department of the Interior is authorized to require the concessionaires to provide such services at reduced rates. In regard to this entire matter reference is made to hearings conducted by the Subcommittee on National Parks before the House Committee on Interior and Insular Affairs. Attention is specifically directed to the statements by the chairman of that subcommittee on pages 31, 32, 53, 54, 55, and 56 of the hearing record. Sincerely yours, D. OTIS, BEASLEY, Administrative Assistant Secretary. HOUSE OF REPRESENTATIVES, OF THE COMMITTEE ON GOVERNMENT OPERATIONS, Hon. STEWART L. UDALL, The climate seems especially poor for Federal regulators to receive free meals or anything else from persons they're regulating. Thought this matter warrants your personal attention and am enclosing copies of our correspondence and a staff memorandum. Would like to discuss this with you after you've looked over this material. JACK BROOKS, Chairman. MAY 18, 1962. To: Chairman Jack Brooks, Government Activities Subcommittee. A. Conflict-of-interest issue Mr. Beasley's letter appears to approve a practice of having concessionaires supply free meals (and possibly other accommodations or benefits) to Governmen employees who inspect and regulate the concessionaires' activities, and to their guests, saying "it does not appear that it would be proper to deny the concessionaire this right." This approach to the conflict-of-interest issue disregards the Government employee's duty to both act, and appear to act, impartially and uninfluenced by the sense of personal obligation which may arise from receiving personal benefits from the person whose activities he inspects or regulates. It also disregards the possible violation of 18 U.S.C. 1914 which penalizes any person who gives, and any Government employee who receives, "any contribution" to, or supplement of salary of, a Government employee for services performed by him for the Federal Government. B. Reimbursement for official costs Mr. Beasley's letter states that the park Superintendent must eat the food when he inspects the concessionares' food operations, and that such inspections are to protect the public visiting the park. His previous letter of February 15 (p. 2) cites the NPS Concession Management Handbook requiring the Superintendent to "exercise systematic and constant practical inspections to see that the quantity and quality of food served to the visitors are maintained at the rates he has approved." He thereby states that the Superintendent's eating of meals of the concessionaire is a part of the Superintendent's official inspection duties. Mr. Beasley's letter states he knows of no authority for reimbursing the Government employee for his costs in performing such duty. However, he admits that the Department has "not made an exhaustive study of whether or not there is authority for the Government to reimburse" the employee for the cost of meals required in the course of official inspection of the concessionaires' food operations. Furthermore, he does not say whether any effort has been made to obtain a ruling from the Comptroller General as to whether such reimbursement would be allowed. Since such costs are incurred in pursuance of official duty, it would seem elemental that the employee ought to be reimbursed for the costs of his official inspection meals, at least to the extent that such costs exceed the costs of his meals of similar quality eaten for his personal need. C. No justification or analysis Mr. Beasley's letter states that "this is a matter which has been considered over a long period of time," but does not specifically examine the issues or state the arguments for the practice. He states that the Comptroller General ruled several years ago that the Department "is authorized to require the consessionaire to provide such services at reduced price," but does not cite the decision or opinion containing such ruling. Inquiry indicates his reference was to the Comptroller General's opinion B-143189 of October 24, 1960. In that opinion the Comptroller General pointed out that the Secretary's authority to make rules and regulations relating to the use and management of the national park contained "wide discretion," and that the regulations contained nothing prescribing the terms and conditions under which contracts may be granted to concessionaires for operation of public accommodations in the national parks. Hence, the Comptroller General concluded that the Secretary has authority to include in concession contracts a requirement that concessionaires furnish meals, lodging, and transportation free or at reduced rates to Government employees on official business. However, the Comptroller General did not endorse the wisdom of the practice. Instead, the Comptroller General specifically suggested that if the Secretary of the Interior believes the practice "is not in the best interest of the Government," the Secretary could agree with the concessionaire to amend the contract to eliminate such practice. D. Hearings before Subcommittee on National Parks, House Interior Committee Mr. Beasley's letter directs attention to the statements by the chairman of the Subcommittee on National Parks, House Interior Committee, on six specific pages of a hearing record, but does not state what hearings they are or to what the chairman's statements pertain. Inquiry indicates that the references are to the hearings of April 5, 1962, concerning the proposed renewal contract for Yosemite Park & Curry Co. Examination of the six cited pages does not show that the chairman of that subcommittee approved the Department's practice of requiring concessionaires to grant free accommodations to Government employees. He merely pointed out that the Comptroller General had investigated (a) certain allegations of improprieties by the Superintendent and (b) the adequacy of the concession contract to protect the public interest, and the chairman stated that that investigation resulted from complaints by a disgruntled Park Service employee. The chairman also stated that he believed the Superinte dent's activities in relation to the concessionaire, Yosemite Park & Curry Co., were "exemplary." Such statement is not an approval of the Department's policy of permitting a park employee to receive personal benefit from the concessionaires whose activities he inspects or regulates. HOUSE OF REPRESENTATIVES, Hon. STEWART L. UDALL, DEAR STU: On May 21, I sent you copies of correspondence concerning the National Park Service regulations authorizing Federal employees to receive free meals and other accommodations from concessionaires regulated by the Park Service. Thought you might like to note the enclosed newspaper articles concerning some similar instances now being uncovered of Agriculture Department employees receiving free accommodations from those subject to their regulation or inspection. Looking forward to discussing this matter with you, I remain, Sincerely, JACK BROOKS, Chairman. [Washington Post, May 30, 1962] ESTES AUDIT DESTROYED, PROBE TOLD STUDY INADEQUATE, ACCOUNTANT IS SAID TO HAVE REPORTED (By Julius Duscha) House investigators were told yesterday that an accountant destroyed records he made for an audit of Billie Sol Estes' finances. The accountant, Winn P. Jackson of Lubbock, Tex., was quoted as saying that the audit was not "adequate." The Agriculture Department used the audit in determining the size of a bond on Estes' grain warehouses. ATTENDED ESTES DINNER In other testimony before a House Government Operations subcommittee investigating Estes's grain warehouse operations: Carl Miller, the Agriculture Department's official who set the bond on the Texan's warehouses, said that he attended a dinner in Washington given by Estes last May. Donald I. McCoy, a Department official who was sent to Texas to investigate Estes, told of being given the use of a chartered airplane by an Estes associate, of driving Estes' automobile on an inspection trip and of letting Estes pay for some of his meals. TESTIMONY ON BOND The subcommittee, which is headed by Representative H. L. Fountain (Democrat, of North Carolina) spent most of the second day of its hearings listening to testimony on the Texan's grain storage bond. Charges have been made that the Department set a lower bond for Estes than for other warehousemen. The charges were vigorously denied by S. R. Smith, who as Director of the Agricultural Marketing Service supervises the work of the Warehouse Act Branch which establishes the amount of the bonds. Miller headed the Branch until May 10 when he was transferred to another job. Smith told of the destruction of the accountant's "working papers" used in preparing an audit of Estes' finances as of December 30, 1960. Smith said that the Department did not learn the papers had been destroyed until last April 4, after Estes had been arrested. |