SUBCOMMITTEE ON AGRICULTURAL PRODUCTION, MARKETING, AND STABILIZATION OF PRICES OF THE COMMITTEE ON AGRICULTURE AND FORESTRY NINETY-FOURTH CONGRESS ON GRAIN INSPECTION IRREGULARITIES AND PROBLEMS AND S.J. Res. 88 TO PROVIDE EMERGENCY AUTHORITY TO THE SECRETARY PART 2 55-319 JULY 8, 1975 Printed for the use of the Committee on Agriculture and Forestry U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1975 DEC 1975 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 2042 - Price $1.90 SUBCOMMITTEE ON FOREIGN AGRICULTURAL POLICY HENRY BELLMON, Oklahoma GEORGE MCGOVERN, South Dakota WALTER D. HUDDLESTON, Kentucky DICK CLARK, Iowa RICHARD B. STONE, Florida EX OFFICIO MEMBER HERMAN E. TALMADGE, Georgia SUBCOMMITTEE ON AGRICULTURAL PRODUCTION, MARKETING, AND CONTENTS Statement of Page Brooks, William F., president and general counsel, National Grain 43 Butler, J. T., chief grain inspector, Memphis Board of Trade, Memphis, 107 Clark, Hon. Dick, a U.S. Senator from the State of Iowa. Hill, Dr. Lowell, professor of grain marketing, University of Illinois, 1 4 112 93 Hoelck, Ted P., owner and chief inspector, Hastings Grain Inspection, 13 Humphrey, Hon. Hubert H., a U.S. Senator from the State of 5 Jackson, Ralph T., executive vice president, American Soybean As- 107 McGovern, Hon. George, a U.S. Senator from the State of South 8 McNamee, Virgil A., chief grain inspector, Toledo Board of Trade, Oliver, Alvin E., executive vice president, National Grain and Feed Riley, Francis M., president, TNR Enterprises Boaz, Ala- Vorhoff, Gilbert H., president, New Orleans Board of Trade, New 108 Webber, Clyde M., national president, American Federation of Government Employees 109 Williams, Robert J., director, Illinois Department of Agriculture, 81 Wood, George M., vice president, F. P. Wood & Son, Camden, N.C., also 74 Young, Hon. Milton R., a U.S. Senator from the State of North Miscellaneous documents: Letter from Senator Humphrey to Hon. Elmer B. Staats, Comptroller 6 Letter from Senator Humphrey to Hon. Earl L. Butz, Secretary of 7 Letter from Undersecretary J. Phil Campbell, to Senator Talmadge, regarding S.J. Res. 88- 8 Going Against the Grain," reprint from Quad-City Times—an inde- 40 "Grain Inspection: Who? What?"-Federal Licensed Grain Inspectors Association, State of Iowa____ 41 Appendixes: Appendix A.-List of export elevators in each grain division field office circuit 113 Appendix B.-Selected information about inspections under the 115 Appendix C.-Volume of export inspections by kind of grain and Appendix F.-AMS grain division, referrals to OI 1964–75-- Appendix H.-Indictments stemming from grand jury investigations— Page 116 118 119 125 128 153 Appendix I.-Letter to Hon. Hubert H. Humphrey from Mr. Murray 184 GRAIN INSPECTION (Part 2) TUESDAY, JULY 8, 1975 U.S. SENATE, SUBCOMMITTEE ON FOREIGN AGRICULTURAL POLICY, OF THE COMMITTEE ON AGRICULTURE AND FORESTRY, The subcommittees met, pursuant to notice, at 10 a.m., in room 6202, Dirksen Senate Office Building, Hon. Dick Clark, presiding. Present: Senators Clark, Humphrey, Bellmon, Dole, and Young. Also present: Senator Curtis. STATEMENT OF HON. DICK CLARK, A U.S. SENATOR FROM THE STATE OF IOWA Senator CLARK. The hearing will come to order. Though I do not have a prepared opening statement, I would like to begin this hearing by relating some information about a trip that I just made to New Orleans to view the grain inspection system and the way the grain moves in that area. I would like to talk about that very briefly before we turn to the first witness. There have been a number of allegations made, some guilty pleas, some indictments of people at the New Orleans Port. Briefly put, there are eight major grain elevators in the New Orleans Port area. They are served by five private inspection agencies, some of which are described as profitmaking, and some as nonprofit; with all of them, certainly, a great deal of money changes hands. Of all the grain that goes out of this country, 38 percent goes through the New Orleans Port: 60 percent is corn, 35 percent is soybeans, and 5 percent is other grains. While in New Orleans, I talked with the U.S. attorney, Mr. Gallinghouse, and his assistant, who I think are doing an excellent job of leading an investigation which includes the Federal Bureau of Investigation, the USDA's Office of Investigations, and the Internal Revenue Service. I talked with people from the Grain Division, who have been very much involved in trying to analyze and to some degree, I think, clean up the situation in New Orleans with inspectors and weighmasters in the elevators; I talked with people in the Office of Investigations in the Department of Agriculture who had conducted some of the earliest investigations and since have either been transferred or retired. Although I do not think that this is the appropriate (1) |