HEARINGS BEFORE THE SUBCOMMITTEE ON FOREIGN AGRICULTURAL POLICY AND THE SUBCOMMITTEE ON AGRICULTURAL PRODUCTION, MARKETING, AND STABILIZATION OF PRICES OF THE COMMITTEE ON AGRICULTURE AND FORESTRY NINETY-FOURTH CONGRESS FIRST SESSION ON GRAIN INSPECTION IRREGULARITIES AND PROBLEMS OF AND S.J. Res. 88 TO PROVIDE EMERGENCY AUTHORITY TO THE SECRETARY OTHER PURPOSES PART 2 JULY 8, 1975 Printed for the use of the Committee on Agriculture and Forestry 55-319 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1975 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 204 2 - Price $1.90 CONTENTS Brooks, William F., president and general counsel, National Grain Butler, J. T., chief grain inspector, Memphis Board of Trade, Memphis, Clark, Hon. Dick, a U.S. Senator from the State of Iowa- Dole, Hon. Robert, a U.S. Senate from the State of Kansas-. Heinkel, Fred V., president, National Farm Coalition_-_- Hill, Dr. Lowell, professor of grain marketing, University of Illinois, Hoelck, Ted P., owner and chief inspector, Hastings Grain Inspection, Jackson, Ralph T., executive vice president, American Soybean As- McGovern, Hon. George, a U.S. Senator from the State of South McNamee, Virgil A., chief grain inspector, Toledo Board of Trade, Toledo, Ohio, and director, National Association of Chief Grain Oliver, Alvin E., executive vice president, National Grain and Feed Riley, Francis M., president, TNR Enterprises Boaz, Ala.... Slater, Joseph, chief grain inspector, Davenport Grain Exchange, Davenport, Iowa, also secretary-treasurer, National Association of Vorhoff, Gilbert H., president, New Orleans Board of Trade, New Webber, Clyde M., national president, American Federation of Gov- Williams, Robert J., director, Illinois Department of Agriculture, Wood, George M., vice president, F. P. Wood & Son, Camden, N.C., also Letter from Undersecretary J. Phil Campbell, to Senator Talmadge, "Going Against the Grain," reprint from Quad-City Times-an inde- "Grain Inspection: Who? What?"-Federal Licensed Grain Inspectors Appendix B.-Selected information about inspections under the United States Grain Standards Act of 1916 administered by the Page Appendix C.-Volume of export inspections by kind of grain and export port_ 116 118 119 125 Appendix D.-Number of export inspections-all grains (by lots). Appendix F.-AMS grain division, referrals to OI 1964–75_- Appendix H.-Indictments stemming from grand jury investigations- 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, MARKETING, AND STABILIZATION OF PRICES, 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 |