Mr. STEWART. These bills, Senator, are, as I say, several hundred thousand dollars. Do we have any with us? Mr. GITTIS. Pardon me, Senator, but they never have been asked for because they would be most unenlightening. There is no one bill that you can look at and find a $35,000 figure for. There is no one bill that you can look at and find a charge for the District of Columbia Stadium. Senator WILLIAMS. You can find two or three? Mr. GITTIS. Or you could find there would be a charge for the District of Columbia, which includes general liability insurance for the period covered by the bill for all work being done in the District of Columbia during that period. Senator COOPER. At some point the premiums due Aetna Insurance would have to be increased by the amount of insurance, general liability insurance, taken out because of this agreement that you had with Reynolds; wouldn't that be correct? Mr. STEWART. Well, Reynolds should have Senator COOPER. Answer my question. Wouldn't it be? Mr. STEWART. I don't follow you, Senator, on that; I am sorry. Senator COOPER. You said that you made an agreement with Reynolds that he would be the broker. Mr. STEWART. Broker of record. Senator COOPER. Hutchinson, Rivinus would write the policy. Senator COOPER. Aetna would write the policy for this additional general liability insurance that was to be taken out; isn't that correct? Mr. STEWART. Yes, sir. Senator COOPER. Well, now, at some point wouldn't Aetna have to know that they were furnishing additional general liability insurance? Mr. STEWART. They are not furnishing additional insurance, Senator. I think you are a little confused between what a broker isSenator COOPER. Don't say that. Mr. STEWART. Can I answer Senator COOPER. Answer my question. At some point Aetna would have to know that it was incurring additional liability. Mr. STEWART. We are automatically covered. Senator COOPER. And it was being paid for incurring that liability. Isn't that correct? Mr. STEWART. We are already, we are automatically, covered in all instances by Aetna in any case. They don't need any notification whatsoever. We are covered. When they come through and make an audit to ascertain, which they do on about a 3-month basis, I believe, to adjust, because it changes payroll and whatever, if you have extras on the job, they adjust the amount of the premium, and then we pay them. That was done on a citywide basis by them. Senator COOPER. That adjustment would be made at some point, wouldn't it? Mr. STEWART. Yes, sir; by them. They do that; we don't. Senator COOPER. You believe that Aetna would have a record showing this adjustment which represents the figure of some $36,000? Mr. STEWART. No, sir; not a figure of $36,000. The figure of $36,000 is the amount of general liability insurance estimated on this job, the beginning of the job. That figure will always be corrected upward or downward depending upon the amount of actual payroll, and even on the amount of the contract, increased or decreased. But that is done by audit by Aetna who does it directly on our books every 3 months. Senator WILLIAMS. That is the point I was making. It is done by audit after the original estimate, and you could not possibly, as I see it, have had this $35,000-some-odd figure. That is what I am wondering. Mr. STEWART. Sir, how do you think I could bid the job without knowing the general liability? Senator WILLIAMS. You have an estimate on it. Mr. STEWART. It would have to be awfully close. Senator CURTIS. How much did you pay Aetna for general liability on the District of Columbia Stadium? Mr. STEWART. On the District of Columbia Stadium I don't know. It would have been adjusted by audit. Senator CURTIS. Who does? Mr. STEWART. And it has never been on a job basis, so I don't have any idea, but it would have approximated this amount, I presume. Senator CURTIS. Does not anybody know what you paid for this general liability bond? Mr. STEWART. Exactly? Senator CURTIS. Now that it is all over? Mr. STEWART. No, sir. Senator CURTIS. No way to find it out? Mr. STEWART. I wouldn't want to say that, but it would be rather difficult at this date. Senator CURTIS. Well, suppose it is. A lot of things are difficult. Here are people's reputations at stake, contractor's reputation at stake. I have a simple question of what was paid to Aetna for general liability insurance on the District of Columbia Stadium. Mr. STEWART. The only one that can answer it would be Aetna, I suppose, Senator. We wouldn't. We don't maintain our records in that way, but Aetna might. You could ask them. They are the ones who make up the figures and send it to us, bill us. We never get into the audit. Senator CURTIS. And this thing here was made up recently? Senator CURTIS. Will you produce your original estimate? Mr. STEWART. Original estimate on the job? I don't have it, sir. Senator CURTIS. On general liability. Mr. STEWART. I don't have such a record, Senator. Senator WILLIAMS. Is this the Mr. STEWART. That would have been the thing Senator WILLIAMS. Is this, to the best of your knowledge, exactly what it was on the overall project? Mr. STEWART. On the District of Columbia; yes, sir. Senator WILLIAMS. District of Columbia. Mr. STEWART. Anywhere in the District of Columbia. you can make Senator WILLIAMS. Isn't it a strange coincidence that an estimate 3 years ago and come out to a penny as to exactly what this is? Mr. STEWART. I don't think it is unreasonable. Senator WILLIAMS. You don't think so. If you are so accurate that you were able to make an estimate in 1961 that came out right to a penny, $109,909.93 and right out to a penny, and now you come back and look it over and reaudit your books, and still come out right to that same figure, don't you have an estimate of your papers earlier? Mr. STEWART. You obviously don't understand. Senator WILLIAMS. No, sir; I do not. And I might say I have handled insurance for several years, and I think I know a little bit about insurance, about how insurance operates. Mr. MCLENDON. Would you let me try to straighten this out? Senator WILLIAMS. Yes, sir. Mr. MCLENDON. Mr. Stewart, I think the difficulty you are having is that you have not made it clear that the amount of general liability business that you agreed Reynolds was the broker for was the premium allocable to the District of Columbia Stadium. Mr. STEWART. Yes, sir. Mr. MCLENDON. And you used the regular rate of Aetna, and then took the figures, estimated figures for your stadium, and multiplied it and got this figure of $36,000 Mr. STEWART. Yes, sir. Mr. MCLENDON (continuing). Which was the amount allocable to the stadium. Mr. STEWART. Yes, sir. Mr. MCLENDON. Not a policy but the amount of the premium that was allocable to the stadium; is that right? Mr. STEWART. Yes, sir; that is exactly right. Mr. MCLENDON. So when you have made that calculation you made it upon the premium rates that your company pays everywhere except, as has been pointed out here, variations in cities. Mr. STEWART. Right, sir. It is the rate effective in the District of Columbia. Mr. MCLENDON. But this figure is only the amount that is applicable to the liability insurance on the stadium. Mr. STEWART. Yes, sir. Mr. MCLENDON. Is that right? Mr. STEWART. Yes, sir. Senator CURTIS. When was that done? Mr. MCLENDON. I was going to ask him. Let me have that calculation. When we interviewed you and the other representatives of the Aetna and McCloskey Co. we raised this question with you, did we not? Mr. STEWART. Yes, sir. Mr. MCLENDON. And was it ascertained that a certificate of insurance had been furnished to the armory? Mr. STEWART. Yes, sir. Mr. MCLENDON. At the request of Mr. Blaser, the contracting officer? Mr. STEWART. Yes, sir. Mr. MCLENDON. And did you furnish a copy of the policy, the general liability policy? Mr. STEWART. The certificate is in lieu of a policy. Mr. MCLENDON. Is what? Mr. STEWART. The normal procedure is you supply a certificate, not the policy. Mr. MCLENDON. The certificate is one thing and the policy is something else. This is Aetna's comprehensive liability policy? Mr. STEWART. Yes, sir; that is not supplied to anyone. Mr. MCLENDON. Sir? Mr. STEWART. That is not supplied to anyone except ourselves. We supply a certificate to evidence the fact that there is such a policy in existence. Mr. MCLENDON. But there is a policy under which you were protected by Aetna? Mr. STEWART. Yes, sir; that is this one here, sir; yes, sir. Mr. MCLENDON. The same thing I have here? Mr. STEWART. It is dated in 1958. Mr. MCLENDON. Yes. So let me ask you again now, is it correct that the only thing you and Reynolds had to do was to take the rate for this policy and compute the amount of the premium allocable to the stadium in the District of Columbia? Mr. STEWART. Yes, sir. Mr. MCLENDON. And what figure did you come out with? Mr. STEWART. Well, I came out with this figure here. I would have had to come out with a figure similar to this. I don't know whether I went that far. He was an insurance man. I acquainted him with the rate, I acquainted with him the amount of the estimated labor on the job and, of course, he already knew the amount of the contract. And they were the only elements you have to know to come up with $36,000. Mr. MCLENDON. Yes. Mr. STEWART. And he came his bill, when I received it, included both. It was aproximately right. It was a little low. Mr. MCLENDON. I notice the total on this summary estimate here which you furnished at the request of the staff is $109,909.93. Mr. STEWART. Yes, sir. Mr. MCLENDON. And the total on the invoice exhibit 18, isn't it?the total on the invoices rendered by Reynolds, exhibit 18, is $109,205.60, making a difference of about $700? Mr. STEWART. Yes, sir. (The exhibits referred to during Mr. Stewart's testimony may be found in the printed hearings, pt. 2, of Tuesday, December 1, 1964.) Mr. MCLENDON. Did Mr. Reynolds ever communicate with you after this conference you had with him when you and he made the calculation of what the premiums would be? Did he ever call you and ask you anything about the premium? Mr. STEWART. I can't recall ever having done so. I am sure he never did. Mr. MCLENDON. Before we get too far away from this, mark this as exhibit 29. |