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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (May 9, 1963)
MEDFORD MAIL TRIBUNE. MEDFORD. OREGON THURSDAY. MAY . 1163 C 9 1 Investigators Seek Fraud and Mismanagement in Highway Work BY DANIEL RAPOPORT United Preii Int.rnitlonel Washington - (UPD - In a dingy suite on the fourth floor of a rickety onetime hotel, Investigators are beginning their fourth year of detective work on one of the govern ment's richest programs. They are the staff of the House Highways subcommit tee, a special unit set up to keep watch on a multi-billion dollar road-building plan that by 1972 is supposed to criss cross the. nation with 41,000 miles of high-speed, limited access expressways. The subcommittee began Its digging after the program had been going four years. It soon discovered that some parts of the big highway project were mired to the axel in mis management and in some cases fraud. It is impossible to estimate how much money the sub committee wijl save federal and state treasuries. But one subcommittee source says the savings already run well into the millions. Watt Lessened What Is more important Is the belief that from here on the amount of waste in the program will be lessened con siderably. "The greatest good we've done," said one subcommittee staff member, "is that we're in business and in the field. It has a deterrent effect." The subcommittee Is headed by Rep. Josn A. Blatnik, D-Minn. Its staff of 17 former FBI agents, ex-detectives, law yers and secretaries has head quarters in the George Wash ington Inn, a ramshackle, white stucco building that has been taken over by Congress. It is marked for destruction. But meantime it is used for office space by several House subcommittees. Money Involved Huge amounts of money are involved in the highways in vestigation. "Since the enactment of the Federal-Aid Highway Act of 1956 more than $29 billion has been committed to high ways projects in the United States," according to a com mittee report. Of that total the Federal government has put up $20.5 billion under formulas b y which it supplies anywhere , from 50 to 93 per cent of the funds. The stales make up the difference. During the next seven years the federal government will spend nearly $27 billion more on the highway program. Most of it will go toward comple tion of the interstate system, now targeted for completion in 1972 at a total of $41 bil lion. From the size of the money figures alone, it is apparent that there is much room for waste. But the possibility be comes even more likely when it is seen how thinly the su pervision is spread. While the federal govern ment supplies the bulk of the money to finance the road work, almost all of the con struction is supervised by the stales. Ana the stales, even more than the federal govern ment, were totally unprepared for the avalanche of funds and road building activities that overwhelmed them with the launching of the inter state system. Poor Management As a result, more money was spent than should have been on rights-of-way and con struction. Usually this was be cause of slippy management. Sometimes it was because of dishonesty. In one state the investiga tors discovered that impor tant field testing was not car ried out because state em ployees were not qualified for the work. In several states it was found that the men who appraise rights - of way lack ed the necessary experience. More glaring were the in stances of corruption unearth ed. There were payoffs to state inspectors who passed .sub standard work. There were private deals between ap praisers and property owners. The Blatnik investigators realized at the outset that they could not check the whole program. So they re coded to concentrate on cate gories, for example checking on right-of-way acquisition in two or three states. They did the same with other big ex penditures in road construc tion. Patterns Sun They found that patterns existed. One report said: "In the subcommittee's hearings concerning the state of New Mexico the subcommittee found conditions in that state to be virtually a carbon copy of those previously exposed in Oklahoma and Florida with respect to construction practices and to relationships existing between contractors and state personnel supposed to be supervising their work." The same report noted that the subcommittee uncovered a pattern in Massachusetts "similar to the one previously disclosed in Florida in the matter of state disposition of Improvements taken in con nection with right-of-way ac quired for federal aid projects. Hearings Held The subcommittee has held hearings on highway work i n five states: Oklahoma, Florida, New Mexico, Mass achusetts and West Virginia. A hearing on Arizona began April 30. Others can be ex pected. Here are the high lights of hearings - already held: Oklahoma - This was the first state investigation for the subcommittee staff. It chose for close scrutiny a sec tion of the inter-state system known as the Skelly bypass at Tulsa. Looking into com plaints of inferior construc tion it found that "controls were so lax that they were in fact almost non-existent in some phases and of question able value In others. ' One expert witness said defici encies in the road totaled $524,000. The staff also found that a highway commissioner had a hidden interest in a subcontracting firm which re ported above average net profits. Contractors Involved Florida - Here the subcom mittee concentrated on the re lationship between contrac tors and state personnel. It found that supervisors ac cepted tens of thousands of dollars in money and other things of value from contrac tors performing work under prime or subcontracts involv ing more than $60 million worth of federal aid highway projects." The subcommittee heard of one case in which the supervising state engineer on a $6.2 million bridge project was paid more than $3,000 for "professional services" by the contractor. "The end re sult," the subcommittee re ported, "was a structure with decks so rough that the (Fed eral) Bureau of Public Roads and the state have been re ceiving complaints ever since the bridge was open to the traveling public." Falls Apart New Mexico - The investi gators discovered conditions in this state "to be virtually a carbon copy of those in Okla homa and Florida." In addi tion, it was found that "con tractor influence" over the policies of the state highway department reached such a degree that there was evi dence that one contractor was able to choose what engineer was assigned to his project. The subcommittee thus de scribed the state's most pub licized road failure - the highway literally fell apart at the very time the state was accepting it." Massachusetts - mis hear ing exposed the state's right-of-way acquisition operation as pockmarked with incom petence and wrongdoing. Very few appraisers were qualified to do their job, and "the vast majority were employed on a temporary basis and obviously on the basis of the political strength they could c o m mand," the staff noted. "This was a situation of long stand ing and prevailed during both Democratic and Republican administrators." Hearings showed that state negotiators were shaking down property owners by offering them a higher price to? their property if they would pay part of the additional money to the em ploye. Th staff also noted that up until 1958 the state's right-of-way engineer was an acknowledged expert who had set up excellent procedures. The difficulty, the subcom mittee discovered, was that no one followed up to see that the procedures were carried out. West Virginia - This, the most recent hearing complet ed, also concentrated on right-of-way acquisition. Here the investigators found that "pur ported appraisals were a con- n y 1 1 COMPANION Del Davidson, a veteran of World War I and a victim of arthritis, has been confined to a wheel chair for about 13 years. A constant companion of Davidson's is "Blackie," a cocker spaniel who was abandoned as puppy. The dog is always seen with Davidson, a companion' ship encouraged by the Southern Oregon Humane Society during Be Kind to Animals Week this week. glomeration of deliberately distorted figures completely disregarding the essential and recognized approaches to de termination of fair market value." Subcommittee mem bers were critical of the fact that neither the state nor the bureau of public roads had done much about a 1059 bu reau appraiser's report that described the West Virginia system as "without doubt the least efficient right-of-way op eration I have ever encountered." Subcommittee investigators are convinced that similar practices have existed In many other states. But at the same time they are not condemning all of them and acknowledge that there are good highway administrations. In criiicizlng the manner in which Florida sold the homes thit it obtained during right of-way acquisitions, the sub committee staff said the state's record "contrasted sharply with the experience of the federal government with the same problem in California." Through the re- sale procedure, California was able to pay back 6 per cent of the money the federal government invested in the state's rights-of-way, while the Florida return was less than '? of 1 per cent. Hearing Results What have been the results of the hearings so far? In all the states that the subcommittee looked into, ac tion has been taken on a stale level. Procedures have been tightened up, personnel re placed and in some cases re organization has followed. There have also been state prosecutions but the most sig nificant legal steps taken have been by the federal govern ment. The Justice department ob tained Indictments against 14 individuals and two corpora tions in connection with the administration of the Massa chusetts highway program. All but one case has been heard and all of the defend ants were convicted of either perjury or conspiracy to de fraud the government. The department started Its investigation before that of the Blatnik subcommittee but a Justice department official said the evidence turned up in the congressional probe was instrumental in winning convictions. Hold Up Funds The federal government is also holding up the payment of $7 million to Massachusetts for property the state acquired in building highways. The bu reau of public roads is with holding the funds until an In dependent firm reappraises the property. In the bureau itself there have been some changes. Its supervisory branch has been beefed up and the bureau is demanding more substantia tion from the states than It did in the past before it allo cates funds. In addition, ac cording to a subcommittee in vestigator, the "bureau's atti tude has definitely changed." He said the bureau, originally dubious about the need for a broad Inquiry, now is giving the subcommittee the fullest-' cooperation and has shown, that it wants "to put its housa in order." The most important result ' of the hearings, In the opinion of the staff, is the effect that it has had on the states that have not been studied. "A lot of state officials ' have gotten out of their ivory towers," as one investigator . said, "and have come to the conclusion that it could also happen in their states. They're going through a period of self' examination." For Mother (For the New Baby) Choose From Our Infant Department PRICES GOOD THRU SATURDAY play pen Ui at pUy ptn or crib, Rg. 24.95 . JUMPER SWING ' Convt rti to eir st WYND 'N SWING Ra. 14.95. Wind Up Swin Kj car seat;;? M9" '8" $39 HIGH CHAIR CTDrtl I CDC ! 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