to the law, and the law I repeat again puts the full responsibility for supervision of this system in the Department of Agriculture.

Mr. CAMPBELL. Yes.

Senator HUMPHREY. There is no question about that. Anybody that is licensed by the Secretary, can have that license removed by the Secretary, and it says the Secretary may refuse to renew or may suspend or revoke any license after the licensee has been afforded an opportunity for hearing. The Secretary shall determine that such licensee is incompetent and has inspected grain for the purposes of this act by any standard or criteria other than as provided for.

Mr. CAMPBELL. And this is what we have been doing since we started the investigation in September 1973. We have been utilizing that authority. We have revoked licenses, but we cannot do it without gaining the information first. We first had to get the evidence to prove they had in fact violated the law and that is the reason we put our Inspector General on it. And I have pushed him regularly. I have met almost weekly with him telling him to continue to dig in and go after the evidence, and we have proceeded and have used that authority in that manner. But we had to have the information on the individuals first. We could not proceed and revoke a license without actually getting the evidence first.

Senator HUMPHREY. It seems to me, Mr. Under Secretary, that while all of that may be happening now-as it has become a matter of great public notice and deep concern-I repeat my original statement that there has been a considerable amount of dereliction of duty in not proceeding in a timely fashion when these matters were coming to the attention of the Department and they were coming to the attention of the Department. I repeat again., all of this loose type of inspection service which has resulted in this, these many incredible charges that have been made, all of this is the result of the failure of supervision and the absence of good law.

We have neither had a recommendation from your Department. for change in the law, nor have you ever come to this Committee or the House Committee that I know of and said look, the present law is inadequate, we have got improper activities going on out there, there are allegations of corruption and we need more authority. We need tougher penalties. Not once has that been brought to our attention, and that is why this emergency legislation was introduced, which you say that you do not want to have. You want to wait a little while. Mr. CAMPBELL. We appreciate very much the interest of this Senate committee, and we need your help. We do need legislation, but we want to point out that it takes quite a long period of time to train people. We also need to consider tenure of employment. We want to work with the committee, Senator. There is no backing off in that respect whatsoever. We need your help. Without your help we cannot correct this situation.

it.

Senator HUMPHREY. We understand that, and you are going to get

Mr. CAMPBELL. So we are asking for your help. But it would be very difficult to train permanent personnel under temporary law, Senator HUMPHREY. Let me ask you, have you been adding personnel for inspection or have you been reducing?

Mr. CAMPBELL. No, we have not been adding personnel in the Department of Agriculture at all. We have reduced

Senator HUMPHREY. I asked about the Inspection Service.

Mr. CAMPBELL. No; we have not added inspectors, sir.

Senator HUMPHREY. And this in spite of the fact that these reports indicated you ought to have more personnel, adequate funding. Your own investigating reports show this.

Mr. CAMPBELL. Senator, I do not think if we doubled our supervisory personnel that we could have prevented what happened from happening, very frankly.

Senator HUMPHREY. You don't?

Mr. CAMPBELL. I have been in regulatory work for a long, long time, and I have been in regulatory work at the State level, and when you are supervising nongovernmental employees in the manner in which this has been set up for many, many years, prior to the time that I got to Washington, D.C., I do not think you could double the amount of supervision work and prevent that from happening. Senator HUMPHREY. Even those that were licensed?

Mr. CAMPBELL. That is correct. Investigations are needed and the first time we really got evidence upon which we could act was when we got the investigating unit to go to work to ferret out the true facts in cooperation with the FBI and the U.S. Attorney. It was so bad that the offenders were taken to court by the U.S. Attorney. I think we have handled this in a very excellent manner. We would not be sitting here today had we not had this investigation.

Senator HUMPHREY. You would not be sitting here today if this was not exposed in the press, because we were not going to hear anything about it.

Mr. CAMPBELL. Yes you were, too.

Senator HUMPHREY. No; we were not. We were not getting any information.

Mr. CAMPBELL. We had the investigation and criminal proceedings going on.

Senator HUMPHREY. I know, but there were many of us here who did not know that this was going on at all.

Mr. CAMPBELL. I was surprised that the press did not pick this up earlier when the indictments were issued in August of last year. I was surprised that they did not get on it then. We had indictments, and it was in the press, and it was been known for a long time.

Senator HUMPHREY. Since it was in the press and has been known for a long time, why have you waited since a year ago, by your own. testimony here, to get us some remedial legislation?

Mr. CAMPBELL. We still had investigations going on, and some very serious matters that we wanted to dig out, and we did not want to upset or jeopardize the criminal proceedings, Senator.

Senator HUMPHREY. That would not have upset the judicial proceedings to propose a new law. It has never upset judicial proceedings to propose new law.

Senator Huddleston?

Senator HUDDLESTON. On the matter of effort devoted by the Department to supervising inspectors, the informatlon that I have indicates that back in 1969 when we were exporting only about 1.4 billion bushels of wheat the Department devoted 182 man-years to

supervision of the inspection system. In spite of the facts that the volume of exports was increasing tremendously and that you were getting complaints from your own people of improper actions and practices, by 1974, where the volume had increased over double to 3.4 billion, the man-years devoted by the Department to supervising the inspectlon system decreased from 182 to 154. This does not seem to me to indicate a serious effort on the part of the Department to stay on top of a situation where you had two factors involved, both which would require, it seems to me, increased supervision.

One factor was just this simple increase in volume, exporting over twice as much, and it seems to me that you are inspecting then twice as much, and that should require twice as much effort, or at least some more effort, maybe not in direct proportion. But, coupled with your own audit report, which came out in May of 1973, as Senator Humphrey just read, where you found numerous instances of licensed inspectors using unapproved procedures, it seems to me this should have caused the Department to double and redouble its efforts in the area of grain inspection.

Mr. CAMPBELL. Well, we did attack the items in that audit report. I will be glad to give a rundown on the recommendations and what has been done.

Senator HUDDLESTON. Did you do it with less personnel?

Mr. CAMPBELL. With the same amount of personnel we had at the time.

Senator HUDDLESTON. Working less, though.

Mr. CAMPBELL. There were fewer personnel than there had been there some 3 years previously, but we did not reduce the personnel at that time.

Senator HUDDLESTON. Well, less man-hours were used in spite of the increased volume and the increased complaints.

Mr. CAMPBELL. Well, we were doing twice the volume with the same supervision; that is correct.

Senator HUMPHREY. Senator McGovern?

Senator McGOVERN. Mr. Undersecretary, both Senator Humphrey and Senator Huddleston have alluded to serious irregularities that go back at least 6 years. I would like to know how those were handled. Were those reports made available to top officials in the Department, and if so, what did they do with them?

Mr. CAMPBELL. Very frankly, the first reports I had of any official nature was the audit report, and our investigation had immediately started thereafter, along with the FBI, which culminated in bringing forth the facts which caused the matter to be handled by the grand jury and the U.S. attorney.

Now, so far as the report of 1969 is concerned, that was not an audit report. That was a result of a trip overseas by lower echelon people in the Department, and that particular document, which is being called a report, was written by that individual to his supervisor or his superior at that time, and the date on it is January 8, 1969. I came to the Department about 2 weeks thereafter. I want to say that I never knew that report existed until this morning, very frankly. I hastily looked through it and read through it. It was not an official audit or an official investigation, so I do not think that report would have been sent on up to the top. I understand Secretary Butz had not seen it, I had not seen it, and I was not aware of that report.

Senator McGOVERN. The thing that puzzles me is that we have had these allegations of excessive adulteration of grain over a long period of time. I can remember them going back to the early 1960's-reports that we were losing markets to other countries because their grain was cleaner than ours and did not have as much foreign matter in it. I am curious as to why more has not been done about it. Maybe the Congress has been a little negligent, too.

Mr. CAMPBELL. Senator, I cannot answer that. I think the Congress and the Department both have been negligent. I will have to agree, because you said you heard the reports, and I have just told the chairman that I personally had to straighten out the grain shipments in Georgia because we were ordering No. 2 grain and getting No. 3 grain, and the poultry industry came to me, and I set up an inspection and grading system which we previously did not have, and we got that straightened out. So these are old, and I think that Congress and the Department both have been derelict.

But, we did not have any concrete evidence as to the irregularities until we initiated the investigations to dig in and find out what was going on.

Senator McGoVERN. You told Senator Humphrey that even if we doubled the number of inspectors it still would not get at the problem. Mr. CAMPBELL. We think the law needs to be changed, Senator. It would not.

Senator McGOVERN. In other words, is it the system that is wrong? You really cannot supervise 111 different agencies that are operating in this field?

Mr. CAMPBELL. The only power we have under the present law is to revoke the license.

Senator McGOVERN. Why do we not go to something like the meat inspection system where you have one Federal office that has the responsibility for insuring the sanitation, and the quality and the integrity of our grain? We are talking about enormous movements of grain here. Why should there not be a central inspection office under the Federal Government, funded with Federal funds?

Mr. CAMPBELL. Well, Senator, we are looking at that more closely than anything else as a solution, very frankly. We will come before this committee with a proposal at a very early date.

Senator McGOVERN. There was a story in the New York Times Sunday in which it was alleged that one Federal investigator was told, in effect, to stop rocking the boat when he got into the investigation of irregularities in grain inspection. Can you tell us what steps the Department is taking to determine the accuracy of that report?

Mr. CAMPBELL. I would have to turn and ask the Inspector General or somebody.

STATEMENT OF OTTO COLLINS, DEPUTY ASSISTANT DIRECTOR, OFFICE OF INVESTIGATION, U.S. DEPARTMENT OF AGRICULTURE

Mr. COLLINS. Yes, sir. We are getting a written report on that, and it will be submitted.

Senator McGOVERN. Can you tell us at that point who it was that told that inspector to back off?

Mr. COLLINS. No, sir. I do not know. But we will find out if it was a USDA investigator.

Senator MCGOVERN. There would be appropriate disciplinary action taken in the event that there is some wrong-doing involved here, as there would appear to be?

Mr. COLLINS. Yes, sir.

Senator McGOVERN. Mr. Under Secretary, one other question that I want to get into involves the food for peace program. To what extent do you think these irregularities, that have been reported with regard to commerical shipments, also carry over into our food for peace exports? I think it is easy to imagine a situation where a country that is getting either direct grants of grain from the United States or concessional sales would be less inclined to protest than a commerical customer, and yet it is very important to the well-being of the United States that our grain be clean, and adequate, whether we are using it for food for peace or to earn dollars.

Mr. CAMPBELL. Well, Mr. Senator, I would have to assume that if this is going on in the commercial trade that it would certainly be existing in the Public Law 480 shipments as well.

Now someone in the Department may have direct information as to the Public Law 480 shipments, but I would have to assume that since it is in a commercial area that it would be in the Public Law 480 area as well.

Senator McGOVERN. Is it not very likely that it might even be more flagrant there?

Mr. CAMPBELL. That is a logical conclusion based on your assumptions I think. But I could not say that it is occurring. We would have to submit that to you as to the comparability between the two, as to which was a worse situation.

Senator McGOVERN. Have either your people or AID looked at that particular problem as it relates to food-for-peace shipments? Mr. PETERSON. There has been no particular investigation of the Public Law 480 shipments to my knowledge, Senator.

Senator HUMPHREY. Give your name.

Mr. PETERSON. Ervin Peterson.

Mr. CAMPBELL. This is Ervin Peterson, Administrator of the Agricultural Marketing Service.

Senator McGOVERN. Is there any kind of system for spot checking or assuring the quality of our food-for-peace shipments? How is that handled? Is it the same kind of thing?

Mr. CAMPBELL. That is handled in the same way, and there is no difference because those shipments are handled by the private trade and not by the Government, so the shipments are handled exactly in the same manner.

Senator McGOVERN. Thank you, Mr. Chairman.

Senator HUMPHREY. Senator Dole?

Senator DOLE. I set forth in my statement the fears expressed by the chairman and others. Those of us who represent rural areas and grain producing areas are concerned about what happens for obvious reasons, at the same time the Department has made some inroads. As I recall, it was in 1968 when we had the same flap about grain standards. There was some legislative action taken, but apparently we did not do enough. So perhaps it is, as Mr. Campbell suggested,