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(The memorandum follows:)

August 11, 1967. MEMORANDUM. From : Mrs. Thomas Herlihy, Jr., President. To: Mr. George Johnson, Executive Director. Re: Federal OEO regulations and their application to the Community Services

Council Summer Youth Project, 7-31. Your attention is called to the fact that certain personnel policies and procedures as outlined in Community Action Memorandum No. 23-A bave not been followed in the above project, namely :

Part A. Standards Governing the Selection of Personnel for Employment in

OEO-Assisted programs. Part C. Rules Governing Conflict of Interest and Nepotism. For the record, on June 16th, 1967, representatives of the groups and agencies having an interest in the above project were informed by me in answer to a direct question in regard to hiring persons with criminal records that there was no prohibition against hiring persons who had been convicted of crimes, but each such case must be judged on its merits. Again on July 21st, at a meeting I had with James Baker and Arthur Calvin, Executive Director of Community Services Council, I asked the question of wby the questions on the employment applications regarding criminal convictions had been deleted without the knowl. edge and consent of CAGW. As a result of this discussion both men agreed to get this information from the employees of the project. As far as I know we have no record of this having been done.

In regard to Part C, I have had a number of discussions with Arthur Calvin to the effect that employees of the summer youth project could not act as the policy making group and outlined for him the same procedure we used for People's Settlement Association to provide a policy making body that would meet OEO requirements. The fact remains however that the core group of “WYEAC" who are now the paid staff of the project selected the Director and other members of the staff and according to my information this group is in fact the decision making body of the project.

Since it is the responsibility of CAGW to see that Federal OEO regulations are followed by delegate agencies and since there is a question whether the above project is in conformity with the regulations cited, I am requesting that as Executive Director of CAGW you make a determination of:

1. Is the Summer Youth Project of the Community Services Council in compliance with Memo 23-A ? 2. If it is not in compliance,

a. Has a waiver been requested, granted or denied ?

b. What steps have you taken to bring the project into compliance? Please report on this matter to the Executive Committee at its meeting on September 6th.

The CHAIRMAN. Go ahead.

Mrs. HERLIHY. On August 22 I sent a letter to Mr. Leslie A. Minkus, regional counsel, Mid-Atlantic region, OEO, Washington, asking him if memorandum 23-A was being enforced in regard to hiring persons with criminal records and those convicted of serious crimes, and also rules regarding conflict of interest and nepotism. His answering letter dated August 30 stated that these rules were still in effect.

The CHAIRMAN. This you got from OEO on August 30, after all this other information had been available, and OEO stated that the rules were still in effect?

Mrs. HERLIHY. I had sent a particular inquiry to Mr. Minkus asking if they were still enforcing this regulation. He wrote back and said “Yes."

I wanted the record to show that they were enforcing this regulation.

The CHAIRMAN. Which specific regulation do you refer to-about the criminal records?

Mrs. HERLIHIY. The two parts of the memo 23-A, the criminal records and the rules regarding conflict of interest and nepotism.

The CHAIRMAN. He wrote you on August 30 that the rules were in effect?

Mrs. HERLIHY. Yes. The CHAIRMAN. Being in effect and being enforced may be two different things.

Mrs. HERLIHIY. That is right.
The CHAIRMAN. Not necessarily synonymous.
Mrs. HERLIHY. No, sir.

The CHAIRMAN. What did you find the condition to be with respect to whether the rules, although in effect, were being observed or en forced?

Mrs. HERLIHY. It was at this period, Senator, that I was trying to get the information from WYEAC and from the sponsoring agency about their criminal records, their disclosure.

At this time also the OEO had sent Mr. Pitts in for this investigation and our investigation was taking place throughout this period of August.

We had not yet had a report from either the Washington investigator or

from our own local investigation. The CHAIRMAN. All right, proceed.

Mrs. HERLIHY. On August 24 I met with Miss Joan Haner and Mr. Mello Cotton in Washington and we spoke again of the difficulties with the WYEAC project on their noncompliance in regard to the criminal records and the lack of separate policymaking boards.

The CHAIRMAN. Now, Miss Haner and Mr. Cotton were officials of OEO here in Washington ?

Mrs. HERLIHY. The regional office of OEO right here in Washington.

The CHAIRMAN. Did you come to Washington to talk to them about it?

Mrs. HERLIHY. Yes, sir.
The CHAIRMAN. You made your report in person to them?
Mrs. HERLIHY. Yes. But they already knew about this beforehand.
The CHAIRMAN. Proceed.

Mrs. HERLIHY. Henry W. Kohl, general secretary of the YMCA, sent me a letter dated August 31 in which he said that

The CHAIRMAN. You skipped one sentence there. You said with them you also discussed the charges made by two members of the General Assembly of Delaware and the steps CAGW had taken to get someone to investigate them.

Mrs. HERLIHY. Yes, sir. We discussed that as well.

The CHAIRMAN. So they knew the charges were being made from sponsors?

Mrs. HERLIHY. That is right.

The CHAIRMAN. And some effort was already in process to try to get it investigated.

Mrs. HERLIHY. They knew that.
The CHAIRMAN. You discussed that with them at the time.
Mrs. HERLIHY. That is right.
The CHAIRMAN. Now proceed with Mr. Kohl.

Mrs. HERLIHY. Henry Kohl, general secretary of the YMCA, sent me a letter dated August 31 in which he said that representatives of WYEAC met with eastern regional staff members of the Office of Economic Opportunity in Washington, D.C., on Monday, August 28, at which time WYEAC was encouraged to do the following:

"1. Ask for the continuation of the present grant under the sponsorship of the Community Services Council, to the extent that funds are available;

"2. To submit its new project on an annual basis, under the sponsorship of the YMCA.”: After receiving the above letter from the YMCA I called the regional office in Washington and talked with Mr. Sanchez, the director. He claimed that he had not encouraged WYEAC, he had told them what to do. I asked him if he had spoken to them about their noncompliance with Federal regulations and he said he had not done so, they knew they were not in compliance. I wanted to know why in light of my discussion with Joan Haner and Mello Cotton he would want to encourage WYEAC. He said he had a responsibility to talk with all groups who came to him for information. In a letter to Mr. Sanchez following this telephone conversation I told him he had an equal responsibility to tell those groups that in order to get Federal funds or to continue to get Federal funds they must comply with the Federal regulations, that as an official representative of the Government this responsibility should be one of his major considerations. I pointed out again that in the face of information given to members of his staff and the investigation of WYEAC then in progress I could not understand his advice to WYEAC and I reaffirmed my stand in the telephone conversation held with him a few days before.

Senator, I have a copy of that letter, also.

The CHAIRMAN. That letter may be printed in the record at this point. (The letter follows:)

SEPTEMBER 8, 1967. Mr. LEVEO V. SANCHEZ, Director, Mid-Atlantic Region, OBO, Washington, D.C.

DEAR MR. SANCHEZ: I am enclosing a copy of Mr. Henry Kohl's letter dated August 31, 1967, which gave rise to my telephone call to you on September 5th. As you know, I met with Miss Joan Haner and Mr. Mello Cotton of your staff on Thursday, August 24th at which time I expressed reservations about the project which is the subject of Mr. Kohl's letter and also spoke about the diffculties we were having locally because of this project.

During our telephone conversation, you claimed you did not "encourage" the representatives of WYEAC, you "told" them what they should do. When I asked you whether you had spoken to them about their non-compliance with federal regulations you answered that you had not done so—that they know they are not in compliance.

If as you say you have a responsibility to talk to all groups who come to you for information, in my opinion you have an equal, perhaps a greater, responsibility to tell those groups that in order to continue getting federal funds or to get additional federal funds they must comply with federal regulations. As an official of the government this responsibility should be one of your major considerations.

As for your telling the WYEAC group to ask for the continuation of the present grant to the extent that funds are available, is it your policy to continue funding a project which is in violation of federal regulations, or advise a group to apply for funds under a different structure when that group has not yet complied with federal requirements under its present structure?

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Your advice to this group in the face of the information I gave Miss Haner and Mr. Cotton, and your ignoring the fact that an inspection of this and other aspects of the CAP program is still in progress is hard to understand. Under the circumstances I have no choice but to make this situation known to the Governor of Delaware and to the members of Delaware's Congressional delegation. Very truly yours,

Mrs. THOMAS HERLIHY, Jr. The CHAIRMAN. What you are saying, if these facts are substantiated or if true, is that from the very inception of this the officials here in Washington were given warning, they were advised over and over that this group was not in compliance with their rules, and when you wrote them about it they wrote you back and said those regulations were still in effect.

When you called about it he said, in effect, to ignore them. That is the effect of what happened, is it not?

Mrs. HERLIHY. Yes, sir.

The CHAIRMAN. You were trying all the time to get the thing started on the right track, to get it in compliance with the rules and the regulations that emanated from Washington, that were the standard rules and regulations for the project. Mrs. HERLIHY. That is right.

The CHAIRMAN, The office here in Washington, according to you,
was not only ignoring those regulations but encouraging them to re-
submit another application without regard to compliance with the
regulations of the OEO?
Mrs. HERLIHY. That is true.

The CHAIRMAN. That is exactly what happened?
Mrs. HERLIHY. Yes, sir.

The CHAIRMAN. Só the folks responsible here in Washington can't
say they didn't know, that they didn't have information that their
rules were being violated and they cannot now say, according to your
testimony, that they did not encourage them, notwithstanding that
they were not in compliance and apparently were not going to com-
ply, to go ahead and send in another application and get more money.
Mrs. HERLIHY. Yes, sir.
The CHAIRMAN. Proceed.
Mrs. HERLIHY. On September 6, the executive committee of Commu-
nity Action in response to the request that an extension of time beyond
September 30 be given to the WYEAC project, voted to recommend
to the board of directors that extension be granted with the provision
that WYEAC be brought into compliance.

The CHAIRMAN. So they recognized then it was not in compliance?
Mrs. HERLIHY. That is right.
The CHAIRMAN. Proceed.

Mrs. HERLIHY. The board of directors of Community Action at the same meeting by vote of 18 to 15 approved a year-round request for funds by the YMCA on behalf of WYEAC.

The CHAIRMAN. That was a close vote. Why was there so much opposition?

Mrs. HERLIHY. In the first place, it had been the recommendation of the executive committee that we would not take up the matter of this application at that September meeting, that it had to go through a screening process or screening committee, and that WYEAC should be brought into compliance before we acted on the year-round program.

But one of the members of the board put the motion to a vote and the board split on this, 18 to 15.

The CHAIRMAN. There was quite a division at the time.
Mrs. HERLIHY. That is right.

The CHAIRMAN. The board apparently shared your view that this thing should be brought into compliance.

Mrs. HERLIHY. That is right.

The CHAIRMAN. So, by that very small majority, they were able to get the action of the board, the approval and the recommendation that it be continued.

Mrs. HERLIHY. That is right. I felt it was a close vote, Senator. The CHAIRILAN. Proceed.

Mrs. HERLIHY. Actually, Senator, in early November it is my understanding that Mr. Shriver-in response to a letter from Congressman Roth acknowledged that WYEAC was in violation of OEO regulations and that no decision had been made as to further funding.

The CHAIRMAN. That seems to be a practice down there. Although they knew about all this trouble out in Chicago with the Woodlawn project, the application came in and no decision was made. I don't know how much encouragement was given, but the application was certainly here. They knew all of this was going on and it took them several months before they took any action to deny it.

I don't know what it takes to make proper decisions down there. It takes a public hearing, to expose all of this mismanagement, this inefficiency, and sometimes downright corruption such as occurred in Chicago, in order to jar Washington to meet its responsibility.

If we don't expose some of this, apparently they just go on and this thing will continue indefinitely. It is senseless for us to be required to leave other important business to have a hearing over some $282,000 and expose how our Government is operating these programs.

Apparently the inefficiency, the mismanagement, and indifference, and don't care attitude prevails.

I am sure it is exasperating to American citizens to see their money handled in this way, the taxpayer's money. We keep raising taxes, we keep going further in debt. Then we find an operation of this kind in which, instead of taking money and using it to train people who want to work, to help people who are literally in distress and to put it to some constructive use, to make some expenditure out of it that will contribute to the progress of human welfare—why, they take it with indifference; apparently they dish it out to irresponsible people and people who apparently have no respect for law and order.

I am sure the American people disapprove. I would think at least the quality of our citizenship is yet such that they cannot help but be resent ful of this which is, in a sense, a betrayal of public trust in the use of their tax money; and especially at a period in the history of our Government when we are going further and further in debt and need more and more revenues to meet the actual, inescapable, and responsible obligations of our Government.

I think it is a sad commentary that we find apparently the lack of dedication and responsibility among Government officials in an ageney of Government with respect to the handling of the taxpayers' money in programs that could be made constructive and helpful.

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