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regularities in the inspection, grading, and weighing of grain based upon his review of certain elevator records and discussions with Grain Division officials. The elevators mentioned in his memo are Bayside. Elevator, Reserve, La., and Mississippi River Grain Elevator, Myrtle Grove, La.

An Agricultural Marketing Service (AMS) official told Griffin that if the grain shown on each inventory sheet represented the grain loaded on the particular vessel indicated, it would be impossible to arrive at the grade shown on the document. Griffin posed questions in his memo suggesting possible irregularities. Files do not show that this memorandum from Griffin was reviewed or that any action was taken on it. James D. Whelan was Regional Inspector General during this period.

November 23, 1971.-A routing slip from Griffin to Supervisor Stephen Tokoly (now retired) forwarded a copy of an unsigned, undated request for investigation, with attachments, from the Grain Division to the Office of the Inspector General (OIG), which apparently resulted from Griffin's discussions with Grain Division officials. Griffin expressed concern that this request had not been sent to OIG (attachment 2).

S. D. Jones succeeded Whelan as Regional Inspector General in February 1972. Jones visited Louisiana and talked to Griffin who apparently discussed the grain situation with him.

April 7, 1972.-A routing slip from Regional Inspector General Jones to Griffin (attachment 3) indicated Jones had looked into the matter and that a decision had been made to "leave it to the Grain Division to see if an investigation is needed." Jones advised Griffin that he "would be hearing from the supervisor on it."

Griffin retired in about June 1972. In November 1972, he was recalled to duty in connection with a prosecution of another case he had handled. He apparently discussed the grain situation with Assistant U.S. Attorney (AUSA) Robert L. Livingston in New Orleans.

November 16, 1972.-AUSA Livingston wrote a letter to OIG (attachment 4), assessing the possible criminal acts and requested an investigation.

November 22, 1972.-OIG, Temple, Tex., scheduled an investigation (attachment 5).

November 29, 1972.-Memo of conversation between Assistant Regional Director P. H. Czarowitz, Temple, Tex., and William Gould, Operations, General Investigations, OIG. Headquarters, Washington, concerning question by an official, Agricultural Marketing Service, on the investigation scheduled (attachment 6).

January 9, 1973.—Supervisory Special Agent William Payne interviewed Griffin and obtained certain material from him. Payne then discussed situation with another AUSA, Stephen Mayo, who had succeeded Livingston.

February 8, 1973.-AUSA Mayo wrote OIG Temple (attachment 7) saying the facts were not sufficient to "show that inspectors were negligent in employment" and advised that further investigation was not needed.

February 16, 1973.-Payne summarized this activity and decision in a report issued February 16, 1973 (attachment 8).

U.S. DEPARTMENT OF AGRICULTURE,
OFFICE OF THE INSPECTOR GENERAL,
November 9, 1970.

File No. T-121-14.

Memorandum to: John P. Cunningham, ARIG, Temple, Tex.
From: W. W. Griffin, Special Agent.

Subject: Cook Grain Co. Grain Inventory Reductions-Bayside
Elevator.

During the examination of records at Cook Industries, Inc., Memphis, Tenn., in relation to the investigation entitled Cook Grain Co., Reserve, La., I discovered the attached six copies of records of inventory reductions (I/R) five from Bayside Elevator, Reserve, and one involving the shipment of Cook Grain Co. grain from Mississippi River Grain Elevator. Inc., Myrtle Grove, La. These six copies are representative of other similar documents in the files and are submitted for consideration of future action.

Copies of these documents have been referred to J. Lee Helton, District Director, Southern District. Grain Division, C&MS, New Orleans, La., and D. G. Dempewolf. Supervisory Grain Inspector, C&MS Grain Inspection Field Office, New Orleans for assistance in analyzation of the information contained.

Michael Ragen, vice president, Cook Grain Co., Memphis was queried as to the meaning of the documents and asked if the described grain on the inventory reductions sheets represented the grain actually loaded on the respective vessels.

Ragen denied that it represented the grain loaded on the vessels and stated it represented the grain taken into the elevator, processed and later exported. He advised that the grain was cleaned, demoisturized and that foreign material was removed to meet the required grade standards. He had no explanation as to why the I/R sheets would relate to a particular vessel and stated he knew very little about the export market.

Because this was not directly related to the assigned investigation no further inquiries were made. However, an investigation conducted by Special Agent Joel Gibson (deceased) came to mind and because of this the information was referred to Helton for his consideration.

Helton after consulting with Dempewolf was unable to offer a definite opinion as to whether an irregularity may exist but offered the following information:

The figures entered on the bottom of the listing of grain markoff's identified as average factors are correct figures for the weighted averages of each factor as computed by the methods recognized by the USDA Grain Inspection Division.

That if the grain shown on each inventory sheet did represent the grain loaded on the vessel that it would be impossible to arrive at the grade shown at the top of the page which in each instance is the same as the official grain inspection certificate related to the named vessel with the same date.

In the instance of the vessel M/V Younally and other vessels he noted that figures appearing in the right hand column of the I/R

could represent a discount figure for that particular portion of grain but stated this was conjecture only.

He intended to submit the documents to officials of the Grain Inspection Division in Hyattsville, Md., for their study and recommendation.

It is my own opinion that if the amount of grain of low grade or sample grade with such high total damage as shown in the six examples is representative of the average incoming grain (as represented by Ragen) then no amount of processing or blending can achieve the No. YC grade being represented on the official grain inspection certificates. This raises multiple questions, that is: Is the grain shown in the documents incoming or outgoing? If incoming how is it binned? If binned (stored) separately how is it processed before binning?

If outgoing, how is the grain blended in order to achieve No. 2 grade and particularly how is the high total damage removed or accounted for in the overall grade of the outgoing grain?

To be classified and/or graded as No. 2 YC the grain must meet certain criteria of each grading factor used to establish the grade, that is, test weight, moisture, total damage, foreign material, and heat damage as well as determination of odor, weevils, or live insect infestation. Of particular interest in these shipments is the percentage of total damage. In order to meet the standards of No. 2YC the grading factor for total damage must not exceed 5.0.

Examination of the I/R sheets shows a total of 4.904.487 bushels of grain under consideration, all of which has been classed as No. 2YC on the official inspection certificates as indicated at the top of I/R sheets. However of the 4,904,487 bushels only 2.235.624 bushels falls within the factor limitation for the grade. This is inclusive of the total bushels of Nos. 1, 2, 3, and 4 YC shown on the I/Rs.

Whether the grain is incoming or outgoing there still remains 2.$68.863 bushels of corn which does not meet the requirements for total domage factors for the grade of No. 2YC. To the best of my knowleige and information received from competent grain inspectors. there is no way to reduce or improve the total damage factor in corn with the exception of blending enough good corn to meet the factor

requirements.

In the shipments concerned the total amount of grain represented on the I/R sheets as meeting or exceeding all factor requirements for No. 2YC amounted to 1.841.884 bushels. It is inconceivable that any blending operation could achieve a No. 2YC grade if the grain described on the I/R sheets did in fact represent the grain loaded on the named vessel regardless of processing or blending unless a large amount of good grain was introduced.

In many instances remarks have been made to me that indicates that all Grain Inspection Field Offices receive complaints that incoming grain is graded hard and outgoing grain is graded easy. I have no basis of fact for this and make no representation as to the merits of the matter other than even were this true it could hardly account for the disparity in amounts or identification by grade. It is noted that a high percentage of the described corn is sample grade corn because of two or more factors as well as being described as sour or musty (odor). It is known that with proper conditioning and/or blending that odor may be removed from grain or render it undetectable so that it is eli

gible for the proper grade, however some 12,897,480 bushels of grain shown on the I/R sheets is identified as screenings or less than sample grade.

It is further noted that the grain shipped on the M/V Trans Gulf consisting of 602,000 bushels of No. 2YC with 14.0 maximum moisture allowed under the contract is under the auspices of Commodity Credit Corporation with the amount financed by CCC amounting to $739,417.21.

The I/R sheet relating to this vessel shows the moisture factor on the weighted average grade as 14.2 and the figure is encircled. The grain inspection certificate figures entered on the sheet shows Moisture as 14.0 with this figure encircled also.

It is noted that the period covered by the I/R sheets is from July 11, 1969, through September 25, 1969, and does not purport to be the totals of incoming grain into the house nor the shipments of grain from the house but is furnished to show the amount of low quality grain being handled by the elevator, and to raise the question of grain inspection quality by the responsible licensed inspection agency. Attachments.1

Question 25. Mr. Otto Collins promised to provide the name of the person in the USDA who told Mr. Willard W. Griffin to back off his investigation. Please provide this name, together with a written report on the matter, for the record.

Answer. The investigation initiated following publication of the newspaper article which alluded to this matter is still in progress. The allegation, as described, has not been substantiated and all employees who exercised supervision over Mr. Griffin in 1971-72 are to be interviewed. The report, when compiled, will be made available to the subcommittee.*

1 Many of the attachments cannot be printed due to illegibility. However, they are available for inspection at the committee upon request and appointment.

*The above-referred-to material will be printed in a separate book upon being received by the committee.

MATERIAL REQUESTED BY SENATOR DOLE FROM THE DEPARTMENT OF AGRICULTURE, JUNE 19, 1975

During the Grain Inspection hearing, June 19, 1975 (p. 105). Senator Dole requested the Department of Agriculture to comment on a series of articles published in the Washington Post, beginning March 9, by Don Morgan.

The response was not received, by Senator Dole, in time for inclusion in the June 19 hearing record.

The reply from Under Secretary Campbell follows:

RESPONSE TO SENATOR DOLE'S REQUEST OF JUNE 19, 1975, FROM UNDER SECRETARY CAMPBELL, U.S. DISTRICT ATTORNEY-JULY 9, 1975

DEPARTMENT OF AGRICULTURE,

OFFICE OF THE SECRETARY,
Washington, D.C., July 9, 1975.

Hon. ROBERT DOLE,

T.S. Senator,

Washington, D.C.

DEAR SENATOR DOLE: Pursuant to your request of the Department during my testimony before the Subcommittee on Foreign Agricultural Policy on June 19, I am pleased to enclose our comments on the Washington Post articles, "The Food Aid Business."

If you need additional information on this or any other topic, please let us know.

Sincerely,

[Enclosure.]

J. PHIL CAMPBELL,
Acting Secretary.

The Department has the following comment on the articles to which reference was made:

March 9, 1975. "Byzantine World of Cargo Contracts."-Much of the material used in this article was derived from private sources. The Department's direct involvement in the ocean transportation of Public Law 480 commodities derives from Public Law 664 (the Merchant Marine Act of 1936.) In accordance with that act the Department requires that at least 50 percent of all shipments are carried in U.S.flag vessels. Importing governments arrange for their ocean transportation, and pay foreign flag rates on all shipments, both U.S. and foreign. The Commodity Credit Corporation absorbs the "differential" between U.S. and foreign flag rates on shipments required to be transported on U.S.-flag vessels. The Department was involved in the issue relating to arranging ocean transportation for 60.000 tons of rice sold to Korea; that incident generally was reported correctly. March 10, 1975, "Opening Markets-Program Pushes U.S. Food."—

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