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Do you have that writing on there?
Secretary FREEMAN. Yes; I have it.

The CHAIRMAN. Is the date of that notation, handwriting notation on this, the 22d of December 1961 following November 21 date on the letter?

Secretary FREEMAN. The one I have is dated December 22, 1961. The CHAIRMAN. That is correct. I assume it is identical and I will let you examine this, if you will, and see if it is identical with the copy, photostatic copy that I have.

am speaking particularly of the handwriting notation, Mr. Secretary.

(The document was handed to the witness.)

The CHAIRMAN. I am confident it is the same.

Secretary FREEMAN. It is the same.

The CHAIRMAN. The copy that you present may be printed in the record.

(The documents are as follows:)

EXHIBIT No. 11

Administratively confidential.

U.S. DEPARTMENT OF AGRICULTURE,
OFFICE OF THE SECRETARY,

OFFICE OF PERSONNEL,
Washington, November 21, 1961.

To: Joseph M. Robertson, Administrative Assistant Secretary.
From: John E. Francis, Chief, Review and Adjudication Division.
Subject: Billie Sol Estes-Candidate for proposed National Cotton Stabilization
Advisory Committee.

The attached memorandum summary from Mr. Huelskamp of an Agricultural Stabilization Conservation Service investigation made regarding subject is sufficiently derogatory in nature that I recommend against subject's appointment. I realize that he has not yet been tried for the alleged offenses and may not be guilty of any wrongdoing. However, since the matter has been referred for consideration of prosecution it appears advisable to drop his name from consideration until this matter is cleared up.

Please note also the brief digest of an FBI file attached:

"Re Billie Sol Estes, Pecos, Tex., possible Federal Reserve Act."

It would be appreciated if you would indicate whether you concur in this recommendation.

JOHN E. FRANCIS.

DECEMBER 22, 1961.

Mr. FRANCIS

(Through Carl Barnes):

Mr. Francis, after reviewing this entire matter carefully with the General Counsel's office and after a thorough review of the matter, I think that Mr. Estes should be appointed to this Committee.

JOE ROBERTSON.

U.S. DEPARTMENT OF AGRICULTURE,
OFFICE OF THE SECRETARY,

OFFICE OF PERSONNEL, Washington, November 21, 1961.

Administratively confidential.

To: John E. Francis, Chief, Review and Adjudication Division.
From: C. V. Huelskamp, Investigations Division.

Subject: Billy Sol Estes-Candidate for proposed National Cotton Stabilization
Advisory Committee.

In accordance with your verbal request of November 15, 1961, the file of the Investigations Division, ASCS, was reviewed on that date regarding Mr. Billy

Sol Estes. Mr. Norman Smith, Investigations Division, ASCS, Washington, D.C., made available the ASCS investigative file dated October 27, 1961.

It disclosed that 116 displaced cotton producers in Texas, Oklahoma, and Georgia made application through the Reeves and Pecos ASC County Committee to transfer a total of 3,123 acres from their allotment pool to land which they had purchased from Mr. Estes in the above Texas counties, which acreage was subsequently leased to Mr. Estes, who became farm operator.

These transactions were all based on a written contract which showed that the agreement was predicated upon the purchaser's successful transferring of his cotton allotment from the pool to the land being purchased from Mr. Estes. The contract also contained a provision that Mr. Estes, as seller, would lease the land for a period of 3 years at an annual rental equivalent, in most cases, to $50 per acre of the pool allotment.

An additional provision of the contract specified that in the event the purchaser was unable to make the first installment to Mr. Estes on a vendor's lien note, executed in connection with a warranty deed and deed of trust, the property would be returned to the seller and the purchaser would be released from all personal liability.

The C. & I. investigator interviewed 23 holders of such contracts in Oklahoma and only 3 maintained that they were making bona fide purchase of land and transfer allotment.

Six producers admitted the transactions were entered into solely for the purpose of selling the allotment. The remainder were noncommittal but admitted that the transfer would benefit someone other than themselves.

Seventeen Texas producers were interviewed and only two producers maintained that they were engaged in a bona fide transaction and five admitted the transactions were entered into solely for the purpose of selling their allotment.

Six displaced Georgia owners were interviewed and three said that they had no intention of purchasing land and transferred their land only to obtain the lease payment for their allotment. Three maintained that there was no fraud intended.

Fourteen Alabama producers were interviewed and five displaced owners said that they had no intention of purchasing land from Mr. Estes and entered into the contract merely to obtain lease payment for the allotment.

Mr. Estes has maintained, through his attorney, that prior to entering into these transactions they had discussed the entire procedure and regulations with county and State ASC officials and a representative of the Washington office, J. Taylor Allen, Provo, Utah, former Southwest Area Director, ASCS, who assured them that the procedure conformed with the regulations in every respect; that they had been told that the contract to purchase was a matter which involved only the two parties and would be of no concern to ASCS officials. Mr. Estes and his lawyer maintained that the purchaser is a bona fide owner of the land.

The C. & I. investigative report has been referred to the General Counsel's Office for their consideration.

C. V. HUELSKAMP.

Secretary FREEMAN. If the Senator wishes, I would add the part that I had quoted here, I think I got down to all except the last two paragraphs, plus the handwriting.

Senator MUNDT. What I wondered, it seems to me that you are talking about two memoranda, and I wondered if you had given us the text of both. As I understand, there is an attached memorandum, summary from Mr. Huelskamp.

Secretary FREEMAN. Yes, sir.

Senator MUNDT. What is that?

Secretary FREEMAN. This is a part of the document in the record. Of course, that was on what Mr. Francis based his judgment in making the recommendation.

The CHAIRMAN. Very well, you may proceed.

Secretary FREEMAN. The Under Secretary was consulted about this matter. He considered it concurrently with consideration of ASCS action on the problem of the transfer of pooled allotments.

Decision on the membership question was withheld pending disposition of the allotment transfer problem.

The CHAIRMAN. I want to make this memorandum that has just been admitted to the record, exhibit No. 11, so that we may have it readily accessible to us without going back to the record.

(The document referred to was marked "Exhibit No. 11" for reference and may also be found in the files of the subcommittee.)

Secretary FREEMAN. Continuing, the Under Secretary concluded that Estes' involvement in the transfer problem was not a sufficient reason for dropping him from the advisory committee. This conclusion was based on his view that it was a civil legal dispute which did not affect his qualifications to remain on the committee.

The CHAIRMAN. You speak of the Under Secretary there. Will you identify him?

Secretary FREEMAN. Mr. Charles Murphy.

Unfortunately, although this decision was made in good faith, it was a mistake, a fact demonstrated even more clearly by subsequent events. But let me repeat that, for this as well as for other matters, as Secretary of Agriculture, I assume full responsibility.

The CHAIRMAN. I might ask you at this point, and I think it would be well, this did not come to your personal attention at the time, did it, Mr. Secretary?

Secretary FREEMAN. No, sir, it did not.

The CHAIRMAN. This is a matter that was handled without your knowledge, but for which you say you take the responsibility, but I thought in fairness to you you ought to state whether it had actually come to your personal attention at the time.

Secretary FREEMAN. No, sir, it had not.

The CHAIRMAN. All right.

Secretary FREEMAN. Personnel involved in the Estes case:

Three members of the Department's Washington staff permitted themselves to be compromised by Estes' penchant for gift giving and personal favors. They have all been separated from the Department. In these cases, the standard of ethics and personal conduct which I believe to be essential in public office-or indeed, in private office— was violated. Disciplinary action was prompt and decisive. It will be no less prompt and no less decisive if additional instances come to light in the course of our continuing investigations.

I first received a rumor of the possible involvement of departmental personnel with Estes on April 10, 2 days before the court of inquiry in Texas brought the matter to public notice. The rumor was relayed to our Washington office by the Dallas ASCS office. A departmental investigator was on the plane that same day, en route to Dallas.

On the next day, April 11, again prior to public disclosure in the court of inquiry, our investigator interviewed salesmen at the NeimanMarcus store. They refused to give him information, and the store management indicated they would discuss the matter only if subpenaed.

On the following day, April 12, news dispatches reported that three employees of the Department had been alleged in the court of inquiry

proceedings to have accepted gifts of expensive clothing from Estes. The three were Emery E. Jacobs, James Ralph, and William Morris.

EMERY E. JACOBS, FORMER ADMINISTRATOR, STATE AND COUNTY

OPERATIONS, ASCS

Emery E. Jacobs: On the 12th of April when the allegation of Jacobs' involvement with Estes was made in Texas, Jacobs was in Denver, Colo., attending a meeting on official business. The Secretary of Agriculture was speaking at Newark, Del. At my instruction, he flew to Washington that day and met with me in my office at 10:30 the same evening. We discussed the charges that had been made and their implications and reached the understanding that Jacobs would resign. He did so on the following morning, April 13. Jacobs indicated to me that he intended to appear for the courts of inquiry in Texas in order to clear his name, but he did not do so. I understand that he has subsequently been interviewed by investigators of the Federal Bureau of Investigation and of this committee.

JAMES T. RALPH, FORMER TRAINEE FOR POST OF AGRICULTURAL ATTACHÉ, BEFORE THAT, ASSISTANT SECRETARY OF AGRICULTURE

James T. Ralph: Dr. Ralph was interrogated by a Department investigator in Washington on the afternoon of April 12, the day on which the charges were made against him in Texas.

On Monday, April 16, I discussed with him the allegations which had been made during the Texas court of inquiry proceedings. Ralph categorically denied that he had accepted gifts from Estes, and assured me that he would go to Texas and testify in the court of inquiry. I agreed that pending his testimony his status in the Department would remain unchanged. At the time, Ralph was in training for an assignment as Agricultural Attaché to the Philippines. Some time earlier, on the 20th of February, 1962, for reasons wholly unassociated with the Estes matter, he had been transferred from the post of Assistant Secretary of Agriculture. On April 20, 1962, Dr. Ralph testified at the court of inquiry in Texas. He categorically denied accepting any gifts from Estes. In light of his sworn statement to this effect, and pending the completion of investigations then underway, I felt that fairness required that I take no disciplinary action at that time and I permitted him to continue his training for the oversea post.

On May 15, I received information from the Federal Bureau of Investigation that Dr. Ralph had charged long-distance telephone calls against the credit card of Billie Sol Estes a fact which he had not previously disclosed. On that day I notified him that I was taking action to terminate his employment from the Department. Subsequently, I believe that Dr. Ralph appeared before the Subcommittee on Inter-Governmental Relations of the Committee on House Government Operations and that he cooperated fully with the Federal Bureau of Investigation and investigators of this committee.

WILLIAM E. MORRIS, FORMER ASSISTANT TO THE ASSISTANT SECRETARY William E. Morris: Morris was also interrogated by a Department investigator on the afternoon of the day the charges were made against

him in Texas. On Monday, April 16, 1962, it was announced during a press briefing by a departmental official that he had been suspended from the Department for failure to follow official instructions from his superiors. The action was taken because Morris, contrary to instructions, had neither appeared in the Department nor made himself available to answer questions concerning allegations made about his relationship with Estes.

In accordance with regular personnel procedure Morris was granted a personal conference with departmental officials on April 30, to review his suspension. On May 2, 1962, a decision was mailed to him by the Department stating that the charge against him was sustained; that he would be removed from the position effective May 18, 1962, and that he had the right to appeal the decision to the Civil Service Commission under the Veterans' Preference Act within 10 days of the effective date of the action. Such an appeal was filed and is now pending before the Civil Service Commission.

In addition to these three, several members of the field service of the Department have also been removed.

WILLIAM P. MATTOX, FORMER VICE CHAIRMAN OF REEVES COUNTY (TEX.) ASC COMMITTEE

William P. Mattox: During January of 1962, Mattox traveled from Pecos, Tex., to Washington, D.C., for the purpose, as he later stated it, of "talking*** about the problem of bracero labor." Mattox stated at a hearing before the Texas State ASC Committee on May 22, 1962, that Billie Sol Estes, John Dennison, and he traveled from Pecos to Midland, Tex., in a plane owned by Estes, then continued on to Washington by commercial airline. Mattox admitted that he was given expense money for the trip by Marcus Dingler, Pecos, Tex., and that his plane fare and hotel expenses were paid by Estes.

Senator MUNDT. Who is Marcus Dingler?

Secretary FREEMAN. Marcus Dingler was another Texan who also had some applications for transferred cotton allotments out of the eminent domain pool.

Senator MUNDT. And an associate of Estes or an independent operator?

Secretary FREEMAN. It is very difficult to know. I really don't know, Senator. They were operating in the same field, and I rather expect might have had discussions.

Mattox said that while the purpose of the trip was to discuss bracero labor, while in Washington he discussed cotton allotment transfers with Emery E. Jacobs, former Deputy Administrator, State and County Operations; William E. Morris, then assistant to former Assistant Secretary James T. Ralph; and at Jacobs' suggestion, discussed cotton allotments with Joseph Moss, Director of the Cotton Division.

During April 1962, accounts of Mattox's trip to Washington in January were carried by the press.

On May 8, 1962, Mattox was suspended as vice chairman of the Reeves County Committee by the Texas ASC State Committee, pursuant to section 7.28 of the regulations of the Secretary of Agriculture. The suspension was based on the information contained in the previ

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