grain firms, are particularly vulnerable to being influenced to certificate grain improperly or to be less than fully objective in the application of sampling and inspection procedures.

Supervision is also a problem. The use of unapproved and inadequate inspection procedures can occur in the absence of close Federal supervision. Knowledgeable persons can manipulate grain flowing through mechanical samplers to substitute "house" samples for official samples. And in the case of export grain, such substitution can be effected without major concern for detection because after the grain passes the point of sampling, it is no longer scrutinized unless we note some problems with the grain or its loading.

Insofar as our authority permits, the Department has taken aggressive action to correct deficiencies in the inspection system uncovered in the ongoing investigations. These include:

Reorganization of the Grain Division of the Agricultural Marketing Service in 1974, and installation of new leadership. Initiation of a training and recruiting program to hire and upgrade present personnel. Shifting of personnel to meet changing workloads on a continuing basis.

Providing for triennial relicensing examinations for employees of official inspection agencies-with the first renewals commencing March 1972. Establishing more precise criteria for licensing personnel for performance of stowage examinations. Written examinations are required for such licensing, effective since September 30, 1974. Prescribing revised tours of duty for Federal employees to provide more effective supervision.

In addition, we have published proposed amendments to regulations under the U.S. Grain Standards Act to provide for:

A. The use of approved mechanical sampling equipment in export elevators.

B. Increased supervision of shiplot grain during loading. Present regulations do not provide for stopping of the loading of a vessel for the purpose of supervision.

C. Applications for designation as an official inspection agency to show the names of officers and include a copy of articles of incorporation. By this means we expect to check for possible conflicts of interest by applicants and to refuse designation where conflicts are found to exist.

Also, the AMS Grain Division developed and is operating on a trial basis a system for monitoring inspection accuracy, using statistical tolerance and computer analyses to identify grading trends, departure from norms, and to alert supervision to a need for corrective action.

Finally, when the Grain Division received information sufficient to warrant suspension of licensees as a result of the ongoing investigations, that was also done.

Mr. Chairman, we are very proud of the professional law enforcement work accomplished in this cooperative effort which is helping us and this body find the deficiencies in our current inspection system and develop solid recommendations for corrective action.

My final point concerns Senate Joint Resolution 88. It would provide interim authority for strengthening the present grain inspection system. The Department strongly feels that any legislation resulting from these hearings should give USDA permanent authority. An

extensive training program will be required in any revised system for grain inspection. We don't believe it is possible to recruit and train competent people on a 1-year basis to perform technical tasks of either inspection or supervision, particularly when tenure of employment would be less than 1 year.

In conclusion, the Department is looking at alternative approaches to strengthen the grain inspection system on a permanent basis. While we are sympathetic to a number of items in the resolution, we urge that the Congress defer action until we come forward with our proposals for long-range legislation, which will be quite soon. At that time we will gladly sit down with the committee to consider the proper form the final legislation should follow.

Mr. Chairman, this concludes my statement. We will gladly respond to any questions the committee may have.

Senator HUMPHREY. Thank you, Mr. Campbell. We will discuss with you the emergency legislation.

Let me just make this commentary, that your attitude about the emergency legislation to me typifies the attitude of the Department to this whole subject of grain inspection: delay and inaction.

I have here what is known as the Browning report. In 1969 Mr. Browning was a member of the U.S. corn and sorghum situation team visiting the United Kingdom and Western Europe from January 7 to the 22. He brought out the very same problems in this report that we have had reported in the New York Times, the Des Moines Register and the other newspapers.

For example, he says;

The Grain Division should make doubly sure there is no bribery of inspectors or falsification of certificates or misgrading of grain or improper sampling. We should have the manpower and the funds to supervise and keep under surveillance on weekends and night loading at these export points where foreign complaints indicate the lower grade grain was loaded.

At the end of this report he also says, "After listening to complaints for 3 weeks," and I want to underscore that this man is a person that made a special visit and tour to look at alleged complaints, or allegations about the grain inspection system-he says in conclusion:

After listening to complaints for 3 weeks, and seeing the look on people's faces and their eyes when they accused the inspection system of being subject to bribery, I cannot stress too strongly the part good inspection practices, constant supervision and quality control must play in helping this country retain overseas grain markets.

There is a man that is interested in the grain markets, and this is a private individual that is looking at this.

You say that the present inspection system just does not permit the kind of control, that the present inspection laws do not permit the kind of controls that the Government ought to have, and you are going to make some strong recommendations. Well, let us take a look at the law. It is unfortunate that the inspection system has permitted this kind of hanky-panky business which has interfered with economic policy of this country; the promotion of exports and the assurance of an adequate and quality product.

What are these orders, what are the authorities of the Secretary under Public Law 90-487 adopted August 15, 1968, when the Congress itself, not on the initiative again of the Department, but the Congress

comes in and says we have to do something about the law. This is section 8:

The Secretary is authorized to issue a license to any individual upon presentation to him of satisfactory evidence that such individual is competent, and is employed by an official inspection agency to perform all or specified functions involved in official inspection; to authorize any competent employee of the Department of Agriculture to perform all or specified functions involved in supervisory or appeal inspection or initial inspection of United States grain in Canadian courts; and to license any other competent individual to perform specified functions involved in official inspection under a contract with the Department of Agriculture.

These persons that have been licensed by the Department are for all practical purposes public employees. And the authority of the Secretary, again, section 9:

The Secretary may refuse to renew, or may suspend or revoke any license issued under this Act whenever, after the licensee has been afforded an opportunity for a hearing, the Secretary shall determine that such licensee is incompetent, or has inspected grain for the purposes of this act by any standard or criteria other than as provided for in this Act.

In other words, the Secretary can remove the license. The Secretary has the responsibility to see that the inspection services are honorable, that they are effective, and that they are timely, and that they perform a public service.

Here is section 10:

The Secretary may (for such period, or indefinitely, as he deems necessary to effectuate the purposes of this Act) refuse to provide official inspection otherwise available under this Act with respect to any grain offered for inspection, or owned, wholly or in part, by any person if he determines (1) that the individual (or in case such person is a partnership, any general partner; or in case such person is a corporation, any officer, director, or holder or owner of more than 10 per centum of the voting stock

And it goes on down here. In other words, he can refuse to even provide any form of inspection. There is a great deal of authority for the Secretary.

I have to say to you in all candor that the statement that you have read indicates that somehow or another that this is a situation that has been developed over which you have had no control. I do not buy that, quite frankly. You have had control. Not as much as I think you ought to have, but you have not made any recommendations to the Congress for any further authority. We have not had any recommendations sent over to this committee. Senator Talmadge has not had any recommendations. He has been chairman here since I have been back on this committee. There has never been anybody from the Department that has come over and said, here is the Browning report,. we need some more authority, or here is our audit.

And then there is the audit report of your own Department, and what does it say?

Some of the new regulations as issued in 1969 need to be implemented in the interest of strengthening the program. Some regulations have been officially postponed by announcement in the Federal Register while others have been neither officially postponed nor implemented. Also, some difficulty has been encountered in getting instructions written and/or released and taking corrective action on certain conditions in a timely manner. The overall system for issuing, reviewing, updating and rescinding instructions needs improving and additional instructions are needed in some areas to provide more uniformity among the different field offices.

Some Agricultural Commodity Graders and/or Licensed Inspectors were using unapproved shortcuts in performing official grain inspections, not verifying the stowage of grain being loaded aboard a ship, not adequately safeguarding official samples and certificates in a manner which would maintain their integrity, and not check testing mechanical samplers in accordance with instruction. Present reporting instructions are not being followed by some field offices. Also, more effective supervision of the licensees at the Farmers Export Elevator, AMA Louisiana is needed.

If the Department thinks it needs some laws, it should have been here, Mr. Under Secretary. This situation is not just by accident. It is the lack of supervision, and I do not care what kind of a nice statement we get, the simple truth is that somebody has not been taking care of the shop. That is what these two reports reveal. This Browning report was a very caustic one, and I am sure you have all read it, but not one-you said yourself that you did not want to come to the Congress with it. Well now, you say you need new law. You knew all about this. We knew all about this. The newspapers have been writing about it. Surely the Department knew about it. It was getting reports from field offices.

Mr. CAMPBELL. Senator, all of this investigation results from our initiative. The reason this hearing is being held is because of the activity of the Department.

Senator HUMPHREY. No.

Mr. CAMPBELL. The Department initiated a full audit of the grain inspection operation in 1973. As soon as the audit came in, we began our investigation with our investigators in order to ferret out the problems. And it is only on the initiative of our investigative units in cooperation with the FBI and U.S. attorney that this matter went to court. We went to court last November, which is in my report Convictions were obtained largely as a result of the initiative of the Department of Agriculture. Otherwise, you would not know all of the information which you have on hand.

Senator HUMPHREY. Well now, let me see about this. You have indicated the many activities that the Department has had underway in recent years to investigate and improve your grain inspection system, and you said you initiated this. Mr. Graziano, the Director of your Office of Investigation, indicated in a statement made to this committee staff on May 23 that the USDA did not really begin a broad and thorough inquiry into the entire inspection system until it found that the Federal Bureau of Investigation was inspecting theft of the grain early in 1974, and I have, as I mentioned, a copy of the Browning report and the audit report done in 1973, and I intend to get copies for this committee. We have been authorized by the full committee to obtain other internal studies which have been done over the years.

Mr. CAMPBELL. Senator, we certainly will provide all of those for you, anything that you desire.

Senator HUMPHREY. That was Mr. Graziano's statement, sir.

Mr. CAMPBELL. I did not hear Mr. Graziano's statement. My information is the FBI started in 1973 as well as did our Office of Investigation, but they were investigating two entirely different subjects, and then they immediately got together and began cooperating. They then went to the U.S. attorney, and got him involved, and the U.S. attorney has been coordinating the Office of Investiga

tion and the FBI ever since. About 75 percent of the work which has been accomplished, according to information provided to me, has been by Department of Agriculture investigators, and about 25 percent by the FBI.

Senator HUMPHREY. May I say that I recognize that the Department has been busy of late. But I still do not understand, since you have known about these irregularities which were no secret according to your testimony, why you were not here asking us for some additional authority?

Mr. CAMPBELL. When we, through the investigations that were going on, found out how bad it was, we thought our first priority was to dig in and really get the truth out, and that is what we have been doing. And that is why the information is out, and that is why the reporters were able to go out and write their stories such as in the New York Times and the Des Moines Register. The information they got was as a result of the efforts of the U.S. Department of Agriculture, FBI, and grand jury, under the direction of the U.S. attorney.

Senator HUMPHREY. But it was kept very close, and they had toget it in a secretive manner.

Mr. CAMPBELL. As long as we are working with the U.S. attorneyon potential criminal violations it has to be that way, Senator. We cannot proceed otherwise with such an investigation involving criminal judicial procedure, and we have to insist on that otherwise any subsequent criminal prosecutions may be jeopardized. We hopethat the committee understands this.

Senator HUMPHREY. We understand it.

Mr. CAMPBELL. I believe you do understand this.

Senator HUMPHREY. We understand that. My point is, Mr. Under Secretary, that this is not something that has just blossomed over night.

Mr. CAMPBELL. I have to agree with the Senator on that.
Senator HUMPHREY. You had information.

Mr. CAMPBELL. The information we had that was concrete has been developed since September 1973.

Senator HUMPHREY. There have been innumerable complaints and many of us have known about them.

Mr. CAMPBELL. There have been complaints, and I listed them in my statement.

Senator HUMPHREY. The Department was negligent.
Mr. CAMPBELL. The complaints-

Senator HUMPHREY. In not acting on those complaints.

Mr. CAMPBELL. The complaints go back for 20 years, and I had to straighten out complaints when I was still commissioner of agriculture in Georgia. I had to set up a State inspection system there in order to make certain that the broiler industry and the poultry industry. in Georgia were getting the type of grain that they were ordering, and I did that with State employees because of that situation at that time.

Senator HUMPHREY. Mr. Under Secretary, you have outlined for us the sort of Rube Goldberg type of inspection system which we have, the State inspection, private inspection, the chambers of commerce and the boards of trade. But the simple fact is that when you get down