Mr. DOULDER. Here is an example from the April payments of 10 endorsements from the reverse side of the actual checks which, supposedly, represent 10 separate signatures but, in my opinion, all were signed by the same person. This writer, incidentally, in my opinion, was not one of the principal persons who perpetrated the frauds a month later that is to say, the series of checks dated May 24. I could go back and detail each of the frauds for the various months, but I think I have shown you enough to show that there was a consistent and ever-increasing percentage of fraudulent transactions as this program progressed-at least during the 5 months that I examined-January through the end of the program in May. The CHAIRMAN. You have actually examined and presented documents in evidence here for 5 weeks, haven't you? Mr. DOULDER. Five weeks representing 5 months. The CHAIRMAN. Five weeks in 5 different months. You took the last week in each month of this year while the program was in effect, just to get a spot check. I would say it is a substantial spot check on what was actually happening, what the records really reflect. Mr. DOULDER. Yes, sir. The CHAIRMAN. For how many weeks has this program been in operation? Mr. DOULDER. I believe since September. The CHAIRMAN. Let's get the weeks. You examined 5 weeks out of so many. Mr. DOULDER. That would be 4 months. The CHAIRMAN. Well, it is about 36 weeks or 40 weeks. In other words, you examined one week out of every six or eight. Mr. DOULDER. Yes. Mr. ADLERMAN. You didn't examine any of the signatures in 1967? Mr. DOULDER. No, sir; I did not. Mr. ADLERMAN. The program started about September of 1967, but we only took a sampling from January 1968 through May. The CHAIRMAN. All of these months you have referred to are in 1968. Mr. DOULDER. Yes, sir. The CHAIRMAN. You only examined in one center? Mr. DOULDER. Centers 1 and 2 for the Rangers. The CHAIRMAN. In the two centers of the Blackstone Rangers. Mr. DOULDER. Yes, sir. The CHAIRMAN. You did not examine any in the Disciples. Those are centers 3 and 4. Is that correct? Mr. DOULDER. That is correct. The CHAIRMAN. I don't know whether we should also go into that one or not. Both the Disciples and the Rangers were under the Woodlawn Organization? Mr. DOULDER. Yes, sir. The CHAIRMAN. Both were under the same project. I don't know whether there is any reason to think the others are any cleaner than this one or not, but they were all under the same program; is that right? Mr. DOULDER. Yes, sir. The CHAIRMAN. Of course, it would take a lot of time and expense to go into all of them, but would you say that what you have presented here should give us a fair sample of what those conditions really were, what prevailed there and what took place? Mr. DOULDER. I most definitely do, sir. The CHAIRMAN. You found the pattern in all of these 5 months, only you found it to be a progressive pattern, that the amount of fraud was increasing with each passing week. Mr. DOULDER. Yes, sir. (At this point, Senator Javits withdrew from the hearing room.) Mr. DOULDER. I have also the original records here. The CHAIRMAN. You have the originals here of all these charts that you have prepared? Mr. DOULDER. I have the last workweek of January, February, March, April, and May, for centers 1 and 2, the records that I have examined, which represents the time sheets, the yellow check receipts, and the original checks. The CHAIRMAN. Who was employed to check this program and evaluate it? Mr. ADLERMAN. The University of Chicago. The CHAIRMAN. The University of Chicago was employed to do what? Mr. ADLERMAN. To evaluate the program. The CHAIRMAN. How much was it supposed to be paid? Mr. ADLERMAN. $79,000. The CHAIRMAN. The Government is committed to pay out $79,000 to the University of Chicago to examine this project and evaluate it. Had an examination been made that would have enabled anybody to evaluate the project, could it possibly have failed to disclose some of the information you have given here this morning? Mr. DOULDER. I believe so. Many of the signatures or handwritings do not need an expert's eye to know they are two different people. The CHAIRMAN. I say could it have failed to disclose at least some of the fraud you have reported here this morning? Mr. DOULDER. No, sir. The CHAIRMAN. So the Government is out or obligated to pay some $79,000 for a supervision and an evaluation of this project. I am trying to ascertain whether they have earned their money. I want to see what good we got, what benefit we got. They may have made a report. They had not made a report when we first got into this thing. When did we find out about the report? Mr. ADLERMAN. June 10. The CHAIRMAN. It wasn't until June 10 of this year that they got a preliminary report, any report, from this institution that was employed to evaluate the project. I don't think we have a final report on the evaluation of it yet. The CHAIRMAN. We don't have a final report on it yet. Mr. ADLERMAN. I just want to make one comment, Mr. Chairman. 85-779 0-68—pt. 13 During the testimony of Nick Dorenzo, who was one of the top gang leaders of the Disciples, he testified that he was project director of center No. 4 of the Disciples. He testified that at one time 150 trainees were signed in to be paid, but only 35 to 40 were actually in the centers. This would bear out that there was a similar pattern in the Disciples. I would now like to call Dr. Dunne. The CHAIRMAN. As I understand it, this grant was made to the Woodlawn Organization. Could supervision and any examination or observation that would normally be applied and used for a Federal project, or for a project under the supervision of any community organization-if any supervision had been given to it could they possibly have not known or observed that these irregularities, that these frauds, were being committed? I am thinking about the Woodlawn Organization. We have heard it is a great organization. But we find they wanted to turn all this over to those gang leaders, which they obviously did. But I don't see how they made any supervision of it. Apparently they didn't. If they had, they would have found some of this going on. Mr. DOULDER. It starts with timesheets. The CHAIRMAN. The what? Mr. DOULDER. It starts with the irregularities on the timesheets. The CHAIRMAN. All they had to do was look at the time sheets! Mr. DOULDER. This is correct. The CHAIRMAN. This does not show positively where the money went, but there has been testimony here of kickbacks to the gang leaders, and that the trainees were dominated by threats and intimidation by the gang leaders who were operating these centers. It is pretty obvious to me, or at least a strong suspicion is created, that this money went to the gang leaders, went to the gang. I don't know where else it could have gone. Do you? Mr. DOULDER. No, sir; I don't. The CHAIRMAN. It is pretty obvious to me that this was a fraud which has been perpetrated on the Government from beginning to end. No one benefited from it, except the criminal element in these gangs. I don't see any other benefit from it so far. (The original documents from which Mr. Doulder prepared charts A through K were made an exhibit by order of the chairman.) (Documents referred to were marked "Exhibit No. 221" for reference, and may be found in the files of the subcommittee.) Mr. ADLERMAN. I would like to call Dr. Robert Dunne. The CHAIRMAN. Do you solemnly swear the evidence you shall give shall be the truth, the whole truth, and nothing but the truth, so help you God? Dr. DUNNE. I do. TESTIMONY OF DR. ROBERT E. DUNNE The CHAIRMAN. You are on the committee staff and you have been for a number of years? Dr. DUNNE. Yes, sir. The CHAIRMAN. Did you participate in this investigation? The CHAIRMAN. You may make your statement, whatever it is. Dr. DUNNE. The Office of Economic Opportunity awarded a grant to the University of Chicago to evaluate the job training program of the Woodlawn Organization, under the direction of Dr. Irving Spergel. Dr. Spergel's grant application was submitted in September of 1967, but it was not finally approved by OEO until January 29, 1968. The CHAIRMAN. He submitted a proposal for a grant for the University of Chicago to examine and evaluate this project. Dr. DUNNE. Yes, sir. Actually, he submitted several proposals with varying amounts of money ranging up to $400,000 for the evaluation. The CHAIRMAN. Not for this project alone? Dr. DUNNE. Yes, sir. The CHAIRMAN. What was that again? Say it again. Dr. DUNNE. He submitted varying proposals with varying amounts and varying durations to evaluate this for 1 year, 2 years, 3 years, or 4 years, but OEO told him he would have to limit it to under $80,000, so he submitted one for $79,933. The CHAIRMAN. To do what? Dr. DUNNE. To evaluate this program. The CHAIRMAN. When was that finally agreed on? Dr. DUNNE. It was agreed on in September, but the funds were not made available until the end of January of 1968. The CHAIRMAN. From January 1968 the funds were available. It had been approved and funds were available in January 1968? Dr. DUNNE. Yes, sir. The CHAIRMAN. $79,000? Dr. DUNNE. Yes, sir. The CHAIRMAN. From January to February, March, and April, and May, we got no tentative report, as I recall and we did not get one until we got into this investigation. They had no report when we called on them originally for a report on this evaluation. They had none. But sometime in June, 4 months or longer after they got the grant, they submitted some kind of a report? Dr. DUNNE. Yes, sir. The CHAIRMAN. But it is not a final report and not a full evaluation, as I understand it. Dr. DUNNE. That is right. OEO requested him in early June to please get something up. The CHAIRMAN. They did what? Dr. DUNNE. To tell them how the program was going, in early June. The CHAIRMAN. They made a request for a report early in June? Dr. DUNNE. Yes, sir; and he did a hurried report. The CHAIRMAN. He did a hurried report? Dr. DUNNE. Yes; and he delivered it on June 10 to OEO. The CHAIRMAN. What good was that service if it was not going to be evaluated, at $79,000, until after it was all over? Dr. DUNNE. The program was expected to continuate at that time. The CHAIRMAN. They had another application in to continue it? Dr. DUNNE. For several more years; yes, sir. The CHAIRMAN. Very well. You mentioned Dr. Spergel. Dr. DUNNE. He is a professor at the School of Social Service Administration of the University of Chicago, and the project director. The CHAIRMAN. What else is he? Is he a member of the Woodlawn Organization Advisory Board? Dr. DUNNE. I don't know. The CHAIRMAN. At that time was he? Dr. DUNNE. I don't know. The CHAIRMAN. I think he was. I think we can show that. We had a member of the advisory board getting $79,000 for his institution to make an evaluation. I will set the record straight. He was a member of the board, the advisory board, but when he got this grant then he resigned. But we got no report on it until after this investigation got started. We inquired for a report but they did not have it. What do you find with respect to him? Dr. DUNNE. Dr. Spergel, with the assistance of some graduate students who were working for their doctorate in sociology under him, began actual visitations to the four centers in December. Several visits were made by these graduate students each week to each center; and they submitted either a long form narrative report of their visit or completed a short questionnaire-type form, on what they saw and observed there. The CHAIRMAN. Do we have those reports? Dr. DUNNE. I subpenaed these reports which would correspond with those 5 weeks which we subpenaed the other records for. The CHAIRMAN. Correspond to the 5 weeks that have been testified to about the checks and the records? Dr. DUNNE. Yes, sir. I hurriedly reviewed all of the reports and they contain many statements stronger than those which I will read and many statements weaker. I only selected those for presentation covering those weeks for which Mr. Doulder testified, the last work week in January, February, March and April and May, any visitations made during those 5 weeks. The CHAIRMAN. At the proper place at the conclusion of Mr. Doulder's testimony I want to make as exhibits to this record all of the original documents from which he prepared these charts. They will be made an exhibit in one bundle for reference. They will be exhibit No. 221. They will all be supporting documents or backup documents of the charts. Dr. DUNNE. These reports, made to the University of Chicago evaluation group, were reviewed by me to see whether they confirmed or contradicted the apparent fraudulent attendance records. The visitations stopped at the end of March, but during the last week of January, the last week of February, and the last week of March, some 10 visits were made to centers 1 and 2 and reports made thereon. Incidentally, center No. 2 is the First Presbyterian Church. In a few cases there was a third record of attendance available to us, in addition to Mr. Doulder's timesheets and the visitation reports by the University of Chicago. The CHAIRMAN. Which center was the Presbyterian Church? |