Mr. SCHIFINO. Yes, sir, I did.

Mr. ADLERMAN. What was the nature of your discussion?

Mr. SCHIFINO. At that time, as I said before, I was completely unfamiliar with the AID program, so my discussion was advising Mr. Mapes as much as I could as to the status or the nature of the transaction.

In this connection, I did have copies of the letters of credit which I took to Washington with me. I presented those to Mr. Mapes. I don't know whether I presented one or all of them, but I did indicate that there was a quarter million dollars worth and that they were all in the area of $9,500, somewhere in that amount.

I also advised him of the many importers involved, and also of the obligation of Mr. Higgins to deposit into the Swiss account certain funds.

Mr. ADLERMAN. At that time, when you discussed this with Mr. Mapes, did you tell him that each of the licenses were slightly under $10,000?

Mr. SCHIFINO. Yes, sir. I think that was evident-I am sure I had all the letters of credit with me. I am quite sure. It was evident by the letters of credit themselves.

Mr. ADLERMAN. What did Mr. Mapes say to that?

Mr. SCHIFINO. I recall showing them, because he made some reference which I don't know the significance of about the steel program whereby there were shipments made under certain amounts, where there were many shipments made under the $10,000 limit.

As I said, I don't know the significance of this at all, but I do remember this being said. He further indicated that this could be a problem if this was being done to circumvent the law, but he seemed to imply, as I recall, this was more of a Vietnamese problem, the problem of the importers, rather than a problem of Mr. Higgins.

Mr. ADLERMAN. He didn't think it was a problem for AID at all, is that right?

Mr. SCHIFINO. He didn't seem to be very concerned. I don't know whether he thought it was a problem or not.

Mr. ADLERMAN. Did somebody else come into the room at the time you were talking?

Mr. SCHIFINO. Yes, sir. But I do not recall. There was another gentleman, because I remember Mr. Mapes showing this gentleman the letters of credit and there was also discussion in his presence about the Swiss account.

Mr. ADLERMAN. Did you also advise Mr. Mapes at the time that you understood from Mr. Higgins that certain moneys were to be sent to Switzerland, to a Swiss bank?

Mr. SCHIFINO. Yes, sir.

Mr. ADLERMAN. And did he tell you at that time that was the concern of the Vietnamese Government and not the United States?

Mr. SCHIFINO. Yes, sir. He said it should be brought to their attention that moneys were going to a Swiss account because this was their problem.

Mr. ADLERMAN. Upon your return you wrote a letter to Mr. Mapes thanking him for his courtesy and so forth, and that is the letter we just put into the record.

Mr. SCHIFINO. Yes, sir.

Mr. ADLERMAN. After that, were you still unsatisfied as to the nature of this transaction?

Mr. SCHIFINO. More so, because at that point, sir, I had had the opportunity of reviewing the pamphlets and manuals which explained the AID program. These were furnished to me by Mr. Mapes.

Upon reviewing these I realized that there were several problems still involved. I advised Mr. Garcia that unless we had answers to these problems this was still a questionable deal, and I also advised Tom of the same thing.

Mr. ADLERMAN. As a result of that, did you send a letter to Thomas Higgins International?

Mr. SCHIFINO. Yes, sir, I did. I mentioned these points to Mr. Higgins and he advised me or he authorized me to communicate directly with Higgins International, and the result was, of course, that letter. Mr. ADLERMAN. I offer this, Mr. Chairman.

The CHAIRMAN. I present to you what purports to be a copy of the letter together with what also purports to be an original receipt for the letter from the addressee of the letter.

Will you examine this and state if it is correct?

(Documents handed to the witness.)

Mr. SCHIFINO. Yes, sir, it is.

The CHAIRMAN. What is attached to it?

Mr. SCHIFINO. I sent this registered mail and it is the return receipt. which I requested.

The CHAIRMAN. Who signed that receipt?

Mr. SCHIFINO. Sir, I can't answer that question.

The CHAIRMAN. There is a signature on it?

Mr. SCHIFINO. Well, there is a symbol on it.

The CHAIRMAN. A symbol?

Mr. SCHIFINO. Yes, sir.

The CHAIRMAN. What is the printed acknowledgement?

Mr. SCHIFINO. On top it is Thomas Higgins International, Saigon, South Vietnam, and a signature which looks like an F.

Mr. ADLERMAN. Is it a rubber stamp?

Mr. SCHIFINo. It is Doanh Tin Cuoc.

The CHAIRMAN. What is his name?

Mr. SCHIFINO. Doanh Tin Cuoc, I would imagine. That is on the stamp.

The CHAIRMAN. His name is stamped on it?

Mr. SCHIFINO. That is right. It was addressed to Thomas Higgins International. That is who I sent the correspondence to.

The CHAIRMAN. But he stamped on there his acknowledgement of its receipt and somebody put a symbol by it?

Mr. SCHIFINO. Yes, sir.

The CHAIRMAN. And it indicates that that company received it at the Saigon address?

Mr. SCHIFINO. Yes, sir.

Mr. ADLERMAN. I would like to have you read that letter in full, please.

Mr. SCHIFINO. It is dated April 25, 1966, addressed to Thomas Higgins International, Post Office Box 183, Saigon, South Vietnam.

78-726 0-67—pt. 1—8

(The letter is as follows:)

THOMAS HIGGINS INTERNATIONAL,
Post Office Box 183,

Saigon, South Vietnam.

APRIL 25, 1966.

GENTLEMEN: I am an attorney located in Jacksonville, Florida, U.S.A., and a client of mine of substantial means has been discussing with Mr. Thomas Higgins the possibilities of investing in his Company. However, upon reviewing all of the information available and the AID Regulations it would appear that certain problems may be raised by the AID Controller which could have an effect on the financial arrangements to which Higgins Enterprise has committed itself. I have discussed this with Mr. Higgins and he has authorized me to ascertain from you information with regard to the method of procurement and the position of Thomas Higgins International.

A question may be raised by the Controller of AID as to the method of procurement of the goods which are being sold by Thomas Higgins Enterprise to the Vietnamese importers. In this connection, it is not clear whether or not the provision of Section 201.24 of AID Regulation 1 requires the submission to AID of invitations for bids for the commodities being purchased. I realize that paragraph (b) of said section authorizes purchases of less than $5,000 ($10,000 for Viet Nam) on a single import license, however, the last sentence of paragraph (b) indicates that if the procurement is undertaken in amounts less than $5,000 ($10,000 for Viet Nam) for the purpose, or with the effect of evading the requirements of paragraph (a), the exemption from invitations for bids would not apply. In this connection, it is not clear to me at this time as to whether Thomas Higgins International is solely an agent of Thomas Higgins Enterprise, an importer, a distributor, either retail or wholesale, or a combination thereof. If Thomas Higgins International is to purchase from each importer its import quota, then AID may consider (1) that this is an importation of products having a total value in excess of $10,000 and/or (2) that Thomas Higgins International is in effect the importer of the goods. The latter raises the question (Rule 201.65) as to what expenses the AID Controller will recognize. Reference is also made to paragraph 4 of the Supplier's Certificate (Form AID) 281, a copy of which is attached.

I would appreciate an immediate response so that we may be able to expedite the shipment of Higgins products. You may desire, if you deem it necessary, to receive clarification from the AID administration at the American Embassy in Saigon.

Yours truly,

1 If this receipt is to be returned by air mail, put on it the conspicuous notation "Renvoi par avion" (Return by air mail) and the blue "Par avion" (via air mail) label or impression.

Si le présent avis doit être renvoyé par avion, le revêtir de la mention très apparente "Renvoi par avion” et de l'étiquette ou d'une empreinte de couleur bleue "Par avion."

To be filled out by the sender, who will indicate his address for the return of this receipt.

A remplir par l'expéditeur, qui indiquera son adresse pour le renvoi du présent avis.

POD Form 2865, Jan. 1959

To be completed
at destination
A compléter

of the country of destination, or, if tho regulations do provide by the ent of the office of destination, and
returned by the first mail directly to the ser. Ooit être sig par le destinataire ou par une personne y
autorisée en ertu des règlements du pays de destinos ponents le comportent, par l'agent du bureau des-
tinataire, et renvoyé par le premier courrier directement à l'expéditeur.
GPO: 1962-0-667888

The CHAIRMAN. What was the attachment?

Mr. SCHIFINO. Form 281.

Mr. ADLERMAN. So in the letter you wrote to Higgins International, you pointed out to them the possibility of a violation of the AID regulations?

Mr. SCHIFINO. Yes, sir.

Mr. ADLERMAN. Did you ever get a reply to that letter?

Mr. SCHIFINO. No, sir.

Mr. ADLERMAN. On the same day that you wrote the letter to Higgins International, did you write a letter to AID, addressed to Mr. Robert Elliott, Chief of the Price Analysis Branch?

Mr. SCHIFINO. Yes, sir; I did.

The CHAIRMAN. I hand you here what purports to be a carbon copy of the letter to which you have referred, and I ask you to examine it and state if it is a copy.

(Document handed to the witness.)

Mr. SCHIFINO. This is a copy of the letter; yes, sir.

The CHAIRMAN. Proceed.

Mr. ADLERMAN. What was your purpose in writing that letter to Mr. Elliott?

Mr. SCHIFINO. Again, to ascertain just the information for Mr. Higgins and for my client, Mr. Garcia, as to potential problems which may be encountered.

Mr. ADLERMAN. In this letter you did not state anything about possible violations of the AID Act, did you?

Mr. SCHIFINO. No, sir. As I said, I was still a novice at this, and I still am, as far as the AID program, and I wasn't sure of these problems. So I did not point out to Mr. Elliott in my correspondence to him the other reason being that I wanted to ascertain for myself just what the situation was.

Mr. ADLERMAN. However, you did refer to your visit to Mr. Mapes, is that correct? I think that is on the second page, the second to the last paragraph.

Mr. SCHIFINO. Yes, sir.

Mr. ADLERMAN. And you pointed out that you had visited him and that you would appreciate being advised as to any problems which might be encountered under the AID program because of the transaction set forth above, is that correct?

Mr. SCHIFINO. Yes, sir.

Mr. ADLERMAN. Did you get a reply to that?

Mr. SCHIFINO. No, sir.

The CHAIRMAN. Do you have any receipt for the letter?

Mr. SCHIFINO. No, sir. I do not have any receipt.

The CHAIRMAN. You did mail it but you never did receive a reply. Mr. SCHIFINO. That is correct.

Senator MUNDT. In your letter to Mr. Elliott did you make mention as in the earlier letter about the possibility of the $9,900 contracts might appear to violate the laws?

Mr. SCHIFINO. No, sir; I did not to Mr. Elliott.

The CHAIRMAN. You had already done that with Mr. Mapes before, hadn't you?

Mr. SCHIFINO. Yes, sir.

The CHAIRMAN. The letter may be printed in the record.

(The letter is as follows:)

Re Thomas Higgins Enterprise, Inc.

Mr. ROBERT ELLIOTT,

APRIL 25, 1955.

Chief, Price Analysis Branch, Financial Review Division, Office of Controller, Agency for International Development, Washington, D.C.

DEAR MR. ELLIOTT: On behalf of my client, Thomas Higgins Enterprise, I am writing you at the suggestion of Mr. Bacon of the Office of Controller of AID. Thomas Higgins Enterprise is a small company located in Tampa, Florida, which specializes in the manufacture of a battery additive and other related products. Thomas Higgins Enterprise has established a division in South Viet Nam to promote its products and is currently doing business in South Viet Nam under the AID program.

The background is briefly as follows: Mr. Thomas Higgins, Jr. met with certain Vietnamese business men and after several interviews the Vietnamese business men under the direction of a Mr. Donah Tin Cuoc entered into a contractual relationship, whereby a Division of Thomas Higgins Enterprise was established operating under the name of Thomas Higgins International. The duties of Thomas Higgins International consisted, among other things, of promoting the Company's products and soliciting the importers to import the Company's products. For its operations Thomas Higgins International receives a commission equal to ten (10) percent of the invoice price. In addition, Thomas Higgins Enterprise reimburses Thomas Higgins International for its operating expenses including salaries, advertising, etc.

The Vietnamese importers have commenced ordering the Company's products and the first shipment has been made. In response to Item 20 to Form 281, there has been inserted the ten (10) percent commission being remitted to Thomas Higgins International.

In view of the fact that the Company, Thomas Higgins Enterprise, is a relatively small company, it is not familiar with the AID program. Unfortunately, my knowledge thereof is also quite limited. I visited with Mr. Fred Mapes, Deputy Special Assistant for Small Business, State Department, Washington, D.C., earlier this month to seek information with regard to the AID program. Since such time I have been endeavoring to ascertain the relationship of the parties and the method of operations.