Robert A.G. Monks Ram Island Farm Cape Elizabeth Maine 04107

The most important open question in my mind is whether a government sponsored entity can ever acquire a degree of legitimacy or credibility in the private sector so as to permit efficient interaction. Project Indigo suggests that SFC has failed to do so. If we cannot realisticly conclude that a cooperative relationship is feasible, aren't we driven to conclude that government must directly finance and/or operate special purpose facilities in areas that it considers to be in the national interest?

When we have decided on a philosophy and on the steps necessary to test it, then we will be able to conclude timing. If SFC is permitted a succession of one year extensions, it is clear to me that an RCS that is responsive to the requirements of Subparagraphs ¶¶ A through F will need several years. If on the other hand, the choice is "84" or "85" I would prefer directly to confront the limited scope of what our experience permits us to conclude and save the operating expenses post June 30, 1984. I feel that deferral up to June 1985 will not really give significant additional operating experience as a basis for the RCS. Of course, more time is always desirable. The only question is balancing costs and benefits.

#4 - Organization

Because the RCS is required to emanate from the Board of Directors, it would be preferable to have its preparation supervised by a committee of the Board. However, I fear that no Director has the time necessary to provide the leadership for such an undertaking (If any one does, I would support their chairmanship of an RCS Committee). It seems to me therefore practical to have the Chief Operating Officer develop a staff and program for this aspect of SFC's responsibilities, keeping in mind the particular needs for continuing involvement by the Board as a whole in developing the final plan.

I find at the present time that my experience at SFC gives me no unique knowledge as to ¶¶ B,C,D & F. I can't believe that the public interest is served by continuing our present levels of overhead so that I can hire consultants to give me a basis on which to develop insights to pass on to the Congress. Surely Congress can do that for itself, without the cost of our operation. Our management challenge has been to

Robert A.G. Monks Ram Island Farm Cape Elizabeth Maine 04107

organize the resources of SFC so as to develop a practical experience basis for the conclusions we are required to draw in the RCS. If we have not done so, we should recognize this shortcoming directly and (1) either submit a report frankly acknowledging the limitations of our experience or (2) commit ourselves to a process that will last substantially longer than June of 1985, but that will provide the kind of "hard" data that Congress probably intended (maybe, a little impractically). I really am very much opposed to trying to pass off second hand expensive speculation as a helpful contribution to the nation.

Finally, I very much enjoy the lecture series we're now engaged in. I would like to hear from the Congressmen, Senators and staff - past and present most involved in the ESA who can share with us all a wider perspective

Best Regards,

R.A.G.M.

I want to thank you for excusing me from hearings to be held by
you as Chairman of the Subcommittee on Oversight of Government
Management. July 29, 1983 is a very important date for me. It
is the time of a vital previously scheduled appointment requiring
my presence in Dallas.
Your consideration and thoughtfulness

is most appreciated.

I expect to attend the Corporation's Board meeting Thursday,
leaving immediately afterward for my appointment in Dallas;
however, I expect to arrive in Washington Wednesday and could
be available from approximately 4:45 o'clock p.m.

I considered my appointment to this position of part-time
director by the President and subsequent confirmation by the
Senate a great honor, privilege, and also an opportunity to
serve my country. The role of "part-time" director, in my
opinion, translates in the private sector to one elected by share-
holders to serve with others so elected to direct the affairs of a
corporation as set out by the Articles of Incorporation and Bylaws.
It suggests one should be generally informed, develop an aware-
ness and purpose, select top management, set goals, and require
accountability.

The Energy Security Act establishing the United States Synthetic
Fuels Corporation is not perfect legislation. However, after
becoming involved, I believe it reveals the care and concern of
Congress to efficiently and adequately encourage an industry so
vital to the economic and military strength of our country.
Government money is everybody's money and nobody's money.
The hazards and temptations it offers to its administrators and
potential participants is frightening. I am pleased we have been
able to operate on approximately 24% of the budget the Act allows.

24-125 0-83--16

The Honorable William S. Cohen
July 25, 1983

Page 2

Next month will be the first anniversary of the full Board of
Directors, the Fall of 1981 being the time of confirmation of a
sufficient number of directors to be a quorum. When one thinks
of assembling a staff of scientists, engineers, financial
professionals, and lawyers necessary to meet the challenges
mandated by the Act in such a short period of time it presents
quite a challenge. I think the foundation has been laid. I think
a few mistakes have been made as it is not possible to avoid
imperfection. I think the diversity of thinking on the Board
combined with the qualified talent assembled has and will continue
to correct mistakes and progressively strengthen the Corporation.
I would like to give credit for this to our Chairman and Chief
Executive Officer. I have absolute confidence in his capacity,
integrity, dedication, and loyalty. The responsibility of molding
a business Goliath that by law must have in place a diversity of
resources, diversity of technology, geographic distribution along
with suggested production goals--all of which must be achieved
with little or no impact on the environment--is unique.

I believe communication with industry in general and current project sponsors in particular is improving. This carefully molded Goliath has taken shape and is ready for its first steps. It appears the first award is imminent with subsequent awards practically mature and our comprehensive strategy due to Congress next Spring is underway and progressing in a timely manner.

I believe the development of this industry is vital to the welfare
of our country and the law providing for this is the least Govern-
ment intervention possible under present economic conditioning.
I further believe the encouragement provided private enterprise
is essential as economic conditions, tremendous capital outlays,
and long lead times required would never be undertaken without
this Congressional foresight.

REPORT ON

INTERNAL AUDIT OF FISCAL YEAR 1982
TRAVEL AND RELOCATION EXPENSES AND
EMPLOYEE ADVANCE ACCOUNTS

CONFIDENTIAL

AUDIT COMMITTEE USE ONLY'

by

The Office of the Inspector General United States Synthetic Fuels Corporation Washington, D.C. 20586

· May 1983