Senator CLARK. Why would the grain companies have a motivation-I am speaking now not of an individual bribe-but why would the grain companies have a motivation to get a ship in there immediately, or to certify it clean? You say because they are waiting and they have got the grain? Why would they want to? They would simply want to get it in there because they had the grain to move, and it was costing them money? Mr. BARRIOS. Right. That is correct. Senator CLARK. Now, I had a grain inspector-it was not you that I interviewed—who said that they used to do the reverse from time to time. If the ship was clean and they didn't have any place to put it, the elevator woud refuse to certify it clean. They would certify that it was dirty. Did you ever do that? Mr. BARRIOS. I have never done it, but I have heard that it was done. Senator CLARK. That way the company could avoid paying the demurrage on the ship? Mr. BARRIOS. That is correct. Senator CLARK. How much does the demurrage run a day? Mr. BARRIOS. It depends on the size of the ship and the upkeep of the ship, fuel, and the cost of operating the ship. It could run as much as $15,000, $17,000 a day. Senator CLARK. There would be quite a motivation for the company not to have to pay that demurrage? Mr. BARRIOS. For the company and also for the owners of the ship to get the ship certified clean. Senator CLARK. What did you get out of all of this other than a job? I mean did they give you any benefits one way or another for breaking the law day in and day out? What are the benefits to a person for cooperating? Mr. BARRIOS. Really, I didn't receive too much for this. It was mostly on a friendship-type thing. When I got into it as a sampler, we worked with the elevator personnel day in an day out over the years, so it was done mostly for friendship, really. Senator CLARK. Well, do you know of people that would benefit in small ways from cooperating? Were there any small benefits to people? Did you ever get paid any overtime for work you didn't do? Mr. BARRIOS. Yes; on one occasion, two other inspectors and myself at Bunge decided that we weren't getting enough payment for certifying this grain which was off grade, which we were loading on board the ships, so we went to the elevator personnel and told him that we would keep them in grade until we were compensated for doing this. Senator CLARK. In other words, you said you were going to hold them to the grade that they were actually loading on that ship unless they did what? Mr. BARRIOS. Unless they came across with some money. Mr. BARRIOS. About a week after we talked to the elevator supervisors, my chief grain inspector informed me and the other two inspectors that we were going to start getting 5 hours of overtime a week added to our salary in compensation for not being paid enough money. Senator CLARK. So they gave you 5 hours a week overtime? Mr. BARRIOS. Right. Senator CLARK. But you didn't work those 5 hours? Mr. BARRIOS. No; we didn't. Senator CLARK. They just paid you for that? Mr. BARRIOS. Right. Senator CLARK. Primarily because you leaned on them? Mr. BARRIOS. We leaned on the elevators, and that is how it came. through. Senator CLARK. Was that a common practice to pay people overtime for misgrading? Mr. BARRIOS. I heard rumors that it was done in other elevators. Senator CLARK. From time to time, it has been indicated that small favors were done for inspectors. They were taken on fishing trips by the grain companies or vacation trips. Did you ever experience that firsthand? Do you know whether that is true? Mr. BARRIOS. I, personally, haven't been on any fishing or hunting trips, but I know inspectors who have been on them. Senator CLARK. What would this involve? Where would they take them, fishing down the river? Mr. BARRIOS. Fishing out in the gulf, or they have taken them to Texas, particularly Cook Grain Co., hunting trips in Texas and Arkansas, and Mississippi. Senator CLARK. Just load people up and take them, at their expense, for a couple of days, a weekend? Mr. BARRIOS. A weekend. I would imagine it was at their expense. I haven't the exact knowledge as to who paid for the trips. Senator CLARK. You never went on any of those trips? Mr. BARRIOS. No: I didn't. Senator CLARK. Did you ever get any minor material benefits, or to your knowledge, did any of the other inspectors ever get any benefits? Mr. BARRIOS. I was told and heard of other things that inspectors did receive, but I have no direct knowledge. Senator CLARK. Now. did the sample procedures at Bunge differ any from the sample procedures at Cook? Mr. BARRIOS. It did as far as Cook Grain Co. Well, we had house inspectors at Cook. and we didn't have them at Bunge. As far as the sampling that we did, it was the same. Senator CLARK. Do you think that there is any way that private inspection agencies can be cleaned up so that they will inspect legitimately and legally? Mr. BARRIOS. Not as long as people who own these inspection agencies can make a profit off of them and push other people into helping them get this profit. I think that the private inspection agencies are looking out for their own benefit and not the benefit of the grain people. Senator CLARK. Well, would it be a normal practice in New Orleans to actually load grain from the elevator onto the ship without grading it at all, and then just certifying it, where it would just be put on the ship without sampling it? Mr. BARRIOS. Yes. sir, it happened quite a few times. Senator CLARK. So, as I understand your testimony, you are saying that it was a common practice for these private inspectors to simply certify whatever the company felt they wanted certified, and that grain would be loaded or inaccurately sampled. It wouldn't matter much. Apparently if you had the cooperation of a private inspector, this was a regular way of doing business? Mr. BARRIOS. That is correct. Senator CLARK. Now, while you were an inspector, did you allow grain with any poisonous or toxic substances to come into the elevator? Mr. BARRIOS. Yes: I did. Senator CLARK. Can you explain those circumstances? Mr. BARRIOS. Well, one inspector worked with me at the Destrehan Board of Trade, and Bunge Elevator discovered a barge unloading which contained crotalaria seeds, and he informed the chief inspector, and the other inspectors, of what he had found, and to be on the lookout for these barges. The elevator personnel told us that they were bringing in barges from Florida which could possibly contain the seeds, and whenever they would unload these barges, they proceeded to inform us that they were unloading the barges so we could be on the lookout for crotalaria seeds. On one occasion, I found a barge which contained 13 crotalaria seeds in a thousand grams, which well exceeds the limit. Senator CLARK. It is well over the legal limit? Mr. BARRIOS. Correct. Senator CLARK. What did you do about that? Mr. BARRIOS. I told my chief inspector about the sample. Senator CLARK. Is this Mr. Willis? Mr. BARRIOS. No; this is Mr. Sipes. Senator CLARK. Mr. Sipes? Mr. BARRIOS. Correct. He informed me that the barges were to be used for soybean meal, and to go ahead and grade the barges as normal, as if they didn't contain the seeds. Senator CLARK. So it got loaded into the elevator as a normal load? Mr. BARRIOS. That is right. Senator CLARK. Well, now, have any of these people that you have mentioned in your testimony, your supervisors, been indicted? Mr. BARRIOS. No; they haven't. Senator CLARK. They have not? Mr. BARRIOS. No. Senator CLARK. They are still in charge of the inspection at the Destrehan inspection agency? Mr. BARRIOS. Mr. Sipes has been removed of his duties at Bunge Elevator, and Mr. Willis has taken over both of those. Senator CLARK. They were both chief inspectors before? Mr. BARRIOS. They were both chief inspectors before, but now Mr. Willis is in charge of both elevators. Senator CLARK. Did you have any personal knowledge of short weighing of grain that would be coming into the elevator? Mr. BARRIOS. Not really. Senator CLARK. You were not involved in that? Mr. BARRIOS. I was not involved in the weight part of it. Senator CLARK. Did you ever hear that discussed by people who were responsible for it? Mr. BARRIOS. I heard some discussion since the investigation has been started, you know, that there were short weighings. Senator CLARK. But you have no personal knowledge of that? Mr. BARRIOS. No. Senator CLARK. Now, do you have any knowledge of bribes to elevator operators to agree to load ships out of turn, for example, so that they could avoid paying demurrage? Mr. BARRIOS. No; I don't. Senator CLARK. I think the last two questions that I would like to ask you, Mr. Barrios, is, No. 1, why are you testifying here? We asked you to testify, but from your point of view, why are you testifying? Mr. BARRIOS. Well, I am testifying here because I feel that I have been in a corrupt business. I can say it is corrupt since the time I started, and I really didn't feel good about what was happening when it started, and I just fell into the way of things, and I just want to get it off my shoulders. I feel like it is something I should come out and see that it is cleaned up. Senator CLARK. You have not been promised anything by anyone in return for your testimony? Mr. BARRIOS. No; I haven't. Senator CLARK. We appreciate very much your coming from New Orleans and testifying. Thank you. I wonder if Mr. Goeppinger is here. Is Walter Goeppinger of the Corn Growers Association here? I think he is going to testify. Do you want to come on over? Mr. Goeppinger, I wonder if you would give us your name and address and position, and make any statements that you might care to make about grain inspection and the pending legislation before this committee. STATEMENT OF WALTER GOEPPINGER, CHAIRMAN OF THE BOARD, NATIONAL CORN GROWERS ASSOCIATION, BOONE, IOWA Mr. GOEPPINGER. My name is Walter Goeppinger. My address is Boone, Iowa. I am a farmer, and live about 2 miles out of Boone. As you know, I am also chairman of the board of the National Corn Growers Association. I really didn't come in here today to testify. I came to listen, and it has been very interesting; however, you have asked me to testify now. Senator CLARK. We would appreciate any comments that you might have about grain inspection, any recommendations you might have about legislation. Mr. GOEPPINGER. I would say this, first of all, that our board of directors has discussed this, and we haven't taken a firm position as an association, a national position on the matter, because we wanted to hear more about it before we did, but I will give my own personal opinion. Senator CLARK. Yes; I think your experience would be helpful, please. Mr. GOEPPINGER. In talking with people in States other than Iowa about the grain inspection systems and the variances between them, and seeing those variances causing lack of regulation in some States due to their conditions there-I will give Wisconsin as an example. For many years Wisconsin has been one of our largest dairy States, and most of the corn there was used for silage, or feeding as grain to livestock. Wisconsin was not a surplus-producing State insofar as grain was concerned, and corn especially. Therefore, they didn't really need to have a grain inspection system because almost all of the grain was being bought and sold within the State. Local elevators' inspection system and their regulation, so far as grain was concerned, was never as complete as the State of Iowa or Illinois, which were always in the cash grain business and exporting. Wisconsin in the last few years has had a big dropout so far as milk producers are concerned, and they have become an exporter, but the laws and regulations have not been updated nor brought into line with the producers' situation as an exporter for exporting outside the State of Wisconsin into the domestic use or into international use. This is just one example. Now, speaking again, personally-and I say this with a certain amount of limitation because I don't claim expertise in the field of grain inspection-but from a producer's standpoint, I believe that we are not going to be able to really solve and get to the bottom of these problems unless there is a great strengthening in Federal regulation. I know that this is the direction that you have moved into, and I tend to agree with it. I believe that standardization is one very important facet of this, and also the great respect, and we might say fear, also, with which Federal laws are looked upon and complied with as compared to State regulations. This is exemplified many times in the pursuit of certain criminal activities. When the Federal Government enters the picture, there is a great deal more reticence on the part of people to violate laws. Therefore, both from the standpoint of standardization, and for the strengthening and respect of the law, I believe that the Federal route is probably the soundest one for us to go. Senator CLARK. Do you think you would prefer a Federal system rather than a Federal-State system, or a Federal-private system? Mr. GOEPPINGER. I think we may have to eliminate the private side. The private side could probably do a very good job if the people within it were willing to live within the regulations. The testimony we have had here this morning indicates that there is a tendency to vary, and it depends on who gets into the position of power as to how much that is going to vary. Within the State and Federal framework, I am sure that the States are going to have to have some part to play, but when it comes to actual terminal and port facilities, which includes containerized types of barges that are given their final loading along the upper Mississippi River, probably that is where Federal regulation and inspection has to become active. If the Federal is active at those points, it is going to back up into the interior of the State, also, because you can't deliver something that the Federal is going to grade at the other end that isn't going to comply. Maybe this may have a tendency to cause the local elevators to take a much tighter look at what the farmer produces, and some farmers are going to be unhappy with the way they are treated at their local elevator level. However, when it comes to the long range and overall benefits, and for the good of the farmer, I believe that we must put out a product that the buyers knows is quality. This is most important. If we produce something at the farm level which isn't right, it is our |