The CHAIRMAN. This letter is dated March 4, 1954. He refers here to Harry. Who is Harry?

Mr. LEV. That is me.

The CHAIRMAN. It is to Bernard Bloom. It is on Spencer Manufacturing Co. stationery, that is dated March 4, 1954, Bernard Bloom of Mid-City Uniform Cap Co., 2330 West Ceramak Road, Chicago, Ill. That is your place of address?

Mr. LEV. Čorrect.

The CHAIRMAN. Among other things he says:

Take 1 yard of perck and send it to the sponger that sponged the Van Heusen cloth. Have him cold water full London shrink this 1 yard and send same to

the Philadelphia Testing Laboratory to the attention of Uncle Fred.

Who is Uncle Fred?

Mr. BELLINO. Fred Tartatallia.

Mr. KENNEDY. Do you know Fred Tartatallia?

Mr. LEV. Yes, I knew him for years.

The CHAIRMAN. Then he says that, in parentheses

he said you know who that party is.

In other words, that you would know who Uncle Fred is. It implies that you said that Bernard would know who Uncle Fred was.

know Uncle Fred, don't you?

Mr. LEV. I have known him for years.

The CHAIRMAN. Then it says:

You do

You know who that party is. Advise them that this is the cloth that had gone into the manufacture of the item.

In other words, it was the same cloth that had been shrunk that had gone into the item whereas possibly the cloth that had gone in the item had not been shrunk.

Mr. LEV. No.

The CHAIRMAN. Why would it be sent to the testing laboratory with these instructions to have it done that way?

Mr. LEV. I have never in my life done anything of that kind, to send out one sample and then use something that is off color.

The CHAIRMAN. You say you didn't do it?

Mr. LEV. No; we had about 400 caps we were low-I will take it back; now it comes to my memory, now I think we must have got a contract for four or five hundred caps which specifications call for shrinking them. The specifications actually do not call for shrinking, but I wanted to make sure it shrunk.

That is the way we are putting them through, all shrunk so that we may be sure that after the cap is worn it will not shrink over again. That is why I mentioned to send over 1 yard and then the rest of it follows, of course.

The CHAIRMAN. Do you call that a manufactured letter?
Mr. LEV. I take it back. It just comes to my memory.
The CHAIRMAN. Was Rubin in your employ at that time?
Mr. LEV. What year was that?

The CHAIRMAN. March 1954, 15 months ago. He says down here in postscript:

I have not received your remittance for traveling expenses as outlined in my previous letter. Please take care of same.

Mr. LEV. That is what puzzles me altogether. I am on the borderline when he mentions this here.

The CHAIRMAN. I hand you a copy of another letter, dated September 15, 1953. It is a carbon copy of a letter addressed to Dear Harry. It is unsigned, but it was taken from Painter's file. Painter worked for you during that time, didn't he, in 1953 ?

Mr. LEV. Yes.

The CHAIRMAN. In what capacity?

Mr. LEV. He was an assistant to me.

The CHAIRMAN. Apparently this is a letter written to you and it pertains to the business of the company. It refers to an inspector and assistant inspector by the name of Tinucci. Do you remember him? Mr. LEV. Yes.

The CHAIRMAN. You know what he is talking about when he refers to Tinucci ?

Mr. LEV. I can remember his name, yes.

The CHAIRMAN. Among other things it says down here, "Don't put Tinucci on the spot."

Mr. LEV. What does that mean?

The CHAIRMAN. That is underscored.

Mr. LEV. What does it mean?

The CHAIRMAN. I pass the carbon copy of the letter to you for inspection and ask you if you received that letter from Painter? Did you receive the original letter from Painter?

(Counsel Pierce read the letter to the witness.)

Mr. LEV. I don't remember that letter, but it was written to me. The CHAIRMAN. Let it be made exhibit No. 101.

(Exhibit No. 101 will be found in the appendix on p. 1149.)

Mr. LEV. I can explain this letter.

The CHAIRMAN. Do you want to make any explanation?

Mr. LEV. Yes. When we got the contract we had-the canvas was stiff, semistiff, and soft, which the Navy could not control or nobody else in the world.

(At this point Senator Bender reentered the hearing room.) Mr. LEV. As soon as I came in I immediately ordered in 12 machines from Chicago.

The CHAIRMAN. I don't mean a long explanation about that.

Mr. LEV. In order to make all the three kinds of canvas to make uniform, and that is what we have done, we have overcome all these difficulties.

The CHAIRMAN. You think that is what the letter refers to?

Mr. LEV. It refers to the sizes. They have to select them, every one. The CHAIRMAN. You were shrinking them, making them too small, were you not?

Mr. LEV. It was not making small. The stiff ones come out perfect. Semistiff come out smaller and the soft still smaller, but the sizing machines would make them all uniform.

The CHAIRMAN. If it was necessary you could get deviations so that they would pass inspection; isn't that correct? Isn't that what the letter is about?

Mr. Lev. I never asked anything from the Navy about deviations.

The CHAIRMAN. Isn't that what the letter is about, telling you to get deviations so that the shipments can go through?

Mr. LEV. The letter says that, but I never went.

The CHAIRMAN. I didn't ask you if you went. That is what the letter is about, isn't it?

Mr. LEV. That is correct.

The CHAIRMAN. All right.

Mr. KENNEDY. We have a sworn affidavit from Julius Goldman who was one of our first witnesses which I would like to have permission to file in the record.

The CHAIRMAN. It may be filed and I will make it exhibit 102. That is an affidavit of a witness who testified here.

(Exhibit No. 102 will be found in the appendix on p. 1150.)

Mr. Lev, you will provide the addresses of these parties insofar as you can today when you leave.

Following that if you can send any more addresses of these folks on the list to whom you gave money, you will do so and send it to the committee staff or to me.

I think I said before that the transcript of this proceeding has been referred and will be referred to the Justice Department. The Chair makes that announcement. Also to the Commissioner of Internal Revenue so that they may examine the testimony and then follow up, in the course of the performance of their duty, whatever it is indicated they have a responsibility and a duty to perform as a result of the facts that have been developed in these proceedings.

The committee will stand in recess until the call of the Chair. (Thereupon, at 4:55 p. m., the subcommittee was recessed, to reconvene subject to call of the Chair.)

DEAR SIR: It is understood that on May 20, 1953, a contract was awarded by the Armed Forces Textile and Apparel Procurement Agency to Harry Lev for the manufacture of 6,823,428 sailor hats, white, enlisted men's, under Invitation for Bids No. TAP-30-352-53-560.

Information received reveals that this contract was awarded to an individual who has never manufactured or supplied this item to the Government before. It is also understood that he did not own or have under lease a plant in which these hats could be manufactured, but that he submitted a letter indicating that he intended to lease a building in Mayaques, P. R., suitable for the production of this item of apparel. I am informed that the contracting officer of your agency was notified, before the award was made, that this man could not acquire sufficient equipment in time to meet the delivery schedule contained in the invitation to bid. As you know, the manufacturer of sailor hats requires special equipment which cannot be procured on the open market, and skilled labor which he did not have available.

In view of the foregoing, I would appreciate a complete report being summitted to this committee, outlining the basis on which the evaluation of the bids was made, the reason for awarding the contract to this individual, the names of the officers and civilians who evaluated the bids, and the person who recommended that the award be made to Harry Lev. Information is also requested as to whether a performance bond was required of the supplier, the amount of the bond, and a statement showing the schedule of deliveries by date and quantity. I would appreciate it if you would include in your reply information as to whether the supplier has requested an extension in the delivery schedule and, if so, what action was taken on his request.

1. It is the distinct recollection of Maj. Eric C. Farnell, who was contracting officer of contracts awarded against subject P/D, that at the time negotiations were conducted with bidders under subject directive, bidders were given to understand that applicable packing specifications would be changed to call for 2 caps to a box in lieu of 1, resulting in 48 caps to a shipping container in lieu of 24.

2. The reasons for the proposed change were (a) that boxes were difficult to obtain and (b) that the savings effected as a result of this change would be reflected in lower award prices.

3. The intention at the time was to incorporate the packing changes into the contracts; however, it was overlooked, and contractors of necessity had to write