REQUESTS FOR INVESTIGATIONS TO OFFICE OF INVESTIGATION FROM GRAIN DIVISION-Continued

Senator CLARK. Can you tell us what your office, the Office of Investigation did about any of these 95 complaints?

Mr. PETERSON. Senator, I do not run the Office of Investigation. I am the Administrator of the Agricultural Marketing Service. Mr. Collins will have to respond for the Office of Investigation.

Senator CLARK. Fine.

Mr. COLLINS. Yes, sir. We are trying to identify the file numbers, and we are pulling the reports from the depositories, and we are making copies of them and will submit them for the committee.

Senator CLARK. To the best of your knowledge, nothing has been done about any of them?

Mr. COLLINS. Yes, sir. We have investigated these cases. I have some of our findings, which means that we did conduct investigations.

Senator CLARK. But you have no specific evidence that you could point to that you have really followed through on any of these and done anything as a result of those complaints?

Mr. COLLINS. We did investigations. We have to check the files to find out what kind of action was taken on them.

Senator CLARK. It seems to me if you had this under investigation for 2 years, as the Secretary indicated, that these complaints would have been looked into long before this hearing?

Mr. COLLINS. We are gathering it now, sir.

Senator CLARK. It seems to me that it should have been done long before. This has been under active consideration, you have been cooperating with the FBI for some 2 years. Why is this just now getting underway?

Mr. COLLINS. I do not know, but we are getting them together and we will have them shortly.

Senator CLARK. Have any licenses been revoked as a result of these 95 charges?

Mr. COLLINS. I would have to look at the files, sir.
Senator CLARK. You are not aware of any?

Mr. CAMPBELL. I think, Senator, the licenses that have been revoked are a result of the evidence that has been brought forward in the last 2 years, and as a result of the judicial process, and the licenses were immediately revoked as a result of that.

Senator CLARK. As a result of the FBI investigation?

Mr. CAMPBELL. The Inspector General also, Senator. I would have to say both, because the Inspector-I would like to clarify a point right there. Until we divided our audits and our Inspector General, our OIG was not accepted by the FBI, was not accepted by the judicial process, was not accepted by the U.S. attorney. We separated these two, the audit and the investigators, in January of 1974.

As a result of that separation, we have really been able to build what we think is an excellent investigative staff which is performing far superior to anything we had in the past. And they are accepted by the U.S. attorney, they are accepted to do the investigative work by the FBI, and we are really very proud of the changes we made there that does give some credibility to our investigative staff in the Department of Agriculture.

Senator CLARK. Mr. Under Secretary, I think the real test of whether the Department has followed up on this audit-and on the Nicaraguan complaint, which Mr. Peterson indicated he was aware

of and took some action on-the real test is to see what the Department did in specific cases mentioned in the audit. I would like to go into some of those.

As early as January 3, 1973, in regard to the Nicaraguan complaint on the quality of corn, it was reported by the Chief of the Grain Division that no Federal inspectors were stationed at the Public Grain Elevator in New Orleans. Only very recently we learned that several inspectors having responsibility for that same elevator were indicted.

Now, do these two facts have any connection with one another? Mr. CAMPBELL. I would like to identify Mr. David Galliart, who is Director of the Grain Division, Agricultural Marketing Service, to handle the question.

Senator CLARK. Right.

Mr. GALLIART. The question about our not having a Federal supervisory person at the public elevator?

Senator CLARK. The Public Grain Elevator in New Orleans.

Mr. GALLIART. Many times the Federal supervisor is not available when inspectors are performing the inspection service. We supervise inspectors on a random basis, and that, I suspect, is what Mr. Woodworth was responding to.

Senator CLARK. Well, I can understand why you would not necessarily always have a Federal inspector present, but it seems to me that if a specific report on the Nicaragua complaint named that elevator-namely, the Public Grain Elevator-that you would have had some suspicion that you ought to assign someone there. As far as you know, no Federal inspector was ever assigned there in response to the Nicaraguan complaint?

Mr. GALLIART. That is true.

Senator CLARK. Senator Humphrey and Senator Huddleston have both asked about this, but it is my understanding, according to your records, that in the last 10 years, you actually decreased the number of grain supervisions by more than half, from 170,000 to 65,000.

Now, if our overseas sales of grain have increased significantly in that period, why would you cut the number of inspections by more than half?

Mr. GALLIART. We have not decreased our supervision force by half. Senator CLARK. In the last 10 years?

Mr. GALLIART. Going back that far, it is possible, but the figures I have are from 1969 on, we have not decreased that much. We contributed, in terms of our budget, 182 man-years in 1962 toward supervision, and in 1974, we contributed 154 man-years toward supervision.

Senator CLARK. So you had declined from 182 to 154 man-years? Mr. GALLIART. That is right.

Senator CLARK. In the last 6 years?

Mr. GALLIART. That is right.

Senator CLARK. According to the records we have from the Department of Agriculture, the specific figures in the last 10 years are that the number of Federal inspectors has declined from 300 to 220, and that the number of grain supervision inspections decreased from approximately 170,000 to less than 65,000. Would you question those figures?

Mr. GALLIART. I do not have those figures.

Senator CLARK. Does that indicate an increased interest in the Department in good inspection, in your judgment, to decrease at that rate, using your figures or mine?

Mr. GALLIART. No; to answer your question.

Senator CLARK. What about the last 2 years? Now, you have had this under active investigation since the audit 2 years ago. Have you increased your staff or the inspections in that period?

Mr. GALLIART. We have increased it to the extent that we are able, and we have started a training program, and we will be bringing on about 25 new so-called recruits in about a month.

Senator CLARK. But that is all, even after the publicity?

Mr. GALLIART. That is right. Allow me to say this about our supervision: On the available records that we have, the records. that we used over the years, show that we were running about a 98 percent accuracy. In other words, if the licensed inspector was grading No. 2, our supervisors would also grade No. 2-98 percent of the time. The procedures for determining accuracy that we used through the years may not have been all that good, but we did use the procedures in making a judgment about how good we were doing our job. If that had a bearing on whether or not we added additional people, then we have to take that into account.

Senator CLARK. It seems to me that if it is a question of not being informed of the problem, it is one thing. But you have an audit, you have a great number of complaints, and yet you have not increased the inspection staff at all.

Mr. GALLIART. That is true.

Senator DOLE. Could I just ask what is the training period there? Mr. GALLIART. It will take us a year, from 1 to 3 years, to train the recuits as qualified graders.

Senator DOLE. These people are coming off the line in a month? Have they been training for a year? You said there would be about 25 ready in about 30 days?

Mr. GALLIART. These will be ready to train in about a month.
Senator DOLE. Oh, ready to train?

Mr. GALLIART. We are bringing in about 25 people.

Senator HUMPHREY. Just now bringing them in?

Mr. GALLIART. Yes.

Mr. PETERSON. Mr. Chairman, Senator Clark, may I interject for just a moment to say that Mr. Galliart has been the Director of the Grain Division since just the 1st of this June. And let me comment if I may, Dave, on the basis of the kind of supervision that has been performed in the Grain Division. In my opinion, those supervisions are not adequate and for this reason: The supervision is of the file sample; that is, the licensed inspector takes the sample from a lot of grain, and he runs that sample as an inspector to determine the grade to be given to it and, therefore, ascribed to the lot. The supervision has been to take the unworked portion of that sample rerun it to see if the findings by the supervisor agree with the findings of the licensed inspector, or the supervisor, the Federal employee, may take the worked portion of the original sample and check it out to see whether or not it conforms with the findings of the licensed inspector.

Now, that is what supervision has consisted of.

There are two things that I want to say frankly in my judgment, we have been deficient in, and I have indicated the steps we are trying to take to correct those deficiencies; one, we have not insisted that the designated agencies supervise their own employees. That is now being provided for. We are moving to require the designated agencies to fully supervise their own employees.

Senator HUMPHREY. Explain that in laymen's language. What do you mean by that?

Mr. PETERSON. I mean this, that the officially designated agency, whether it be a private individual, a corporation, a board of trade, or whoever, who employs the licensed inspectors and does the initial inspection work, have not been required to supervise their own people to see that the people were performing in accordance with the requirements of the U.S. Grain Standards Act.

Senator HUMPHREY. Do you require the training that you require for your own people?

Mr. PETERSON. We examine the licensee when he applies for a license, to determine that he is qualified to inspect grain on the basis that he can look at a lot of grain that has been run and come out with a finding that the assigned grade is the one that properly applies. But, that limited supervision, confined to examining the sample of the grain to determine whether it was inspected in accordance with the Grain Standards Act, is only one part of the supervision, and that is what I wanted to point up, Mr. Chairman. We have now taken steps to assure that supervision is fully complete.

Senator CLARK. Mr. Peterson, it is my understanding that you are responsible for the Grain Division, are you not?

Mr. PETERSON. I am responsible for eight program divisions in the Agricultural Marketing Service, Senator.

Senator CLARK. I did not ask how many. I asked whether you were responsible for the Grain Division?

Mr. PETERSON. That is right.

Senator CLARK. So, that responsibility in the Department goes from the Secretary on down to that level?

Mr. PETERSON. It goes from me to the Director of the Grain. Division.

Senator CLARK. And you assume that responsibility at your level, I assume?

Mr. PETERSON. That is correct, sir.

Senator CLARK. I think the great question for the Congress to decide, the paramount question, is whether the failure to respond to these 95 charges, to the Browning report, to all these things that have come to our attention, whether this is simply a matter of bureaucratic ineptitude or whether one can look higher in the Department for an answer. I think that is what this hearing is all about.

Mr. PETERSON. Senator Clark, it is easy for people to make charges and allegations. It is another thing to deliver on the line the facts to support them. And with respect to the 95 requests made to the Office of Investigation, then the Inspector General's Office, they were made to determine whether there were any facts to support the suspected irregularities. And so far as I am aware, in most of those instances, I believe all but three, and I do not have the details at hand, there were no facts to support the allegations upon which the request for investigation was based.