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Agency for International Development contract operations ..., Volumes 1-2 online

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Do you solemnly swear the testimony you are to give in the matter
before the subcommittee shall be the truth, the whole truth, and
nothing but the truth, so help you God?

Mrs. Gulick. I do.

TESTIMONY OP MRS. PRAHCES ANDERSOIT OTJLICE;, RESEARCH
SPECIALIST, RESEARCH, EVALUATIOH AND PLANNING ASSIST-
ANCE STAFF, AGENCY POR INTERNATIONAL DEVELOPMENT

Mr. Reddan. Please give the reporter your name and address.

Mrs. Gulick. Frances Anderson Gulick, 4702 De Russey Parkway,
Chevy Chase, Md.

Mr. Keddan. You are employed by AID in what capacity?

Mrs. Gulick. I am employed by AID as a research specialist in the
Research, Evaluation, and Planning Assistance Division. I entered
on diity about December 19, 1961.

Mr. Keddan. You were here in the room and heard the testimony
which preceded you ?

Mrs. Gulick. I did.

Mr. Reddan. Did you contact International Rectifier in connection
with the electronic cells ?



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92 AGENCY FOR INTERNATIONAL DEVELOPMENT

Mrs. GuLiOK. I did not contact International Eectifier personally,
and I do not believe I gave the indication that I had. My own judg-
ment in forwarding the memorandum sug:gesting that Hoflfman be
contacted was derived from the internal evidence of Mr. Hoke's cor-
respondence with them. I think probably they were a little more
frank with him than they might have been if we had given them an
invitation to bid for Government monev. The kind of indication they
gave when they were writing informally to a private citizen was tJiat
they had a lot of trouble with the experimental panel they had tried.
If they had that much trouble with what they tried with their own
money, I wasn't really prepared to offer to let them make the same
kind of errors with Government money. However, again, I did not
contact them directly.

Mr. Reddan. Mrs. Gulick, let us get back to International Rectifier.
You SOT you did not tell Mr. Dreany that you had contacted Interna-
tional Kectifier. Is that so?

Mrs. GuLiOK. I did not tell him I had contacted them.

Mr. Reddan. Did you tell him that anyone in REPAS had ?

Mrs. GuucK. I believe I told him they had been contacted in the
course of the development of this project and, as you will remember
from the testimony yesterday, this project had a long history before
REPAS undertook to sponsor it.

Mr. Reddan. Did AID have anything to do with it at that time ?

Mrs.GuucK. No.

Mr, Reddan. Did Mr. Hoke ever show you the letter from Interna-
tional Rectifier where they expressed great interest in this if they
could get someone to help finance it ?

Mrs. GuMCK. Yes. He also showed me the rest of the correspond-
ence which indicated they had doubts about the previous experiment.

Mr. Reddan. Was there other correspondence with them ?

Mrs. GuLiOK. I believe you have those in your files.

Mr. Reddan. I do not believe we do. Are they in Mr. Hoke's private
files, or did they g^ into the agency files ?

Mrs. GuLiCK. We have them in our agency files.

Mr. Hakdy. Did we not ask for the whole file ?

Mr. Reddan. We did.

Mrs. Gulick. I believe you have that.

Mr. Hardy. Let us see what we have. Maybe we have them and
did not recognize them.

Take your file down there, and see if she can help you find them, Mr.
Matan.

(Off the record.)

Mr. Reddan. We can explore this a bit later so we do not hold up
the committee at this point.

I would like

Mr. Hardy. Let me see where we are on these files.

Mr. Reddan. She has not had an opportunity to go through them.

Mr. Hardy. We will have to clear up this matter right now. Hand
this copy of the committee rules down there to Mrs. Gulick.

I want to call your attention, Mrs. Gulick, to the committee rules.

I do not know whether you are familiar with the rules. You are
entitled to have advice of counsel if you want to have it, because you



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AGENCY FOR INTERNATIONAL DEVELOPMENT 93

are under oath, and the committee will ask you some questions here in
a minute which we want you to be very careful in answering.

Mrs. GuLicK. Sir, I have been as careful as I can be.

Mr, Hardy. I am sure you have, but I want to call your attention to
the fact that you are under oath.

Mrs.GuLiCK. I knew I was under oath.

Mr. EUrdy. I am required to remind you of it.

Before we proceed with that, Mr. Reddan, and this does not have
anything to do with the point I just made, but it is your testimony
that the documents to which reference was made earlier were in the
files presented to the subcommittee. So, as far as you know, there has
not been anything withheld in connection with this matter?

Mrs. GuLicK. I have not seen the complete files the subcommittee
has. I believe I can find the letter which refers to it in Mr. Hoke's
files, and his testimony yesterday referred to a letter from Inter-
national Eectifier in which they expressed their concern about the
difficulty they had with the "Solar King" — a solar-powered electric
automobile. This is in the record.

Mr. Hardy. You are pretty sure that was in the documents which
we should have, anyway ?

Mrs. GuLicK. I do not know what documents the committee re-
quested. I believe I could find that letter.

Mr. Hardy. Maybe we did not do it in this case, and if we did not,
I want to fire somebody on my staff, but our usual procedure is to
request every document that relates to a particular subject so we can
determine whether or not it is relevant to our inquiry. If we did not
do^ that this time somebody has slipped up. If that is the case, then
this document, which apparently has some relevance, should have been
made available.

I think maybe we will defer a study of the files we have until a
little later so we can proceed.

We have another matter about which we should like to make in-
quiry. You may proceed, Mr. Reddan.

Mr. Reddan. Mrs. Gulick, I would like to show you a memorandum
for the files dated August 3, 1962. I ask you if you prepared that,

Mrs. Gtjlick. Yes, I prepared that.

Mr. Reddan. What was the purpose of that memorandum for the
files?

Mrs. GuT.iCK. Mr. Rothenberg had called Dr. Fei to ask him about
two items in connection with the National Geographic. Dr. Fei had
asked me to provide Mr. Rothenberg with the background on this file.
He had asked me to draw up a memorandum explaining what I had
just told him as a basis for explaining this to Mr. Rothenberg. I drew
up a draft prior to calling Mr. Rothenberg, and I talked to Mr. Hos-
kins, and Mr. Hoskins had me in a meeting in which we were dis-
cussing the problems and the various issues on the solar boat. Mr.
Hoskins said Mr. Rothenberg had called him, and he would call Mr.
Rothenberg and pass on the information to him. You will notice
this does say "draft." I did not call Mr. Rothenberg personally.
This represented an account or a memorandum of conversation I was
prepared to engage in with Mr. Rothenberg.

Mr. Hardy. What we have is a document in your file which, although
it says "draft," purports to reflect the details of a conversation which

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94 AQBNCY FOR INTERNATIONAL DEVELOPMENT

you allegedly had with a member of the staff of this subcommittee
' and which conversation never took place ; is that correct ?

Mrs. GuLiCK. It is not in my files. The original was given to Mr.
^Hoskins, who passed it over to Mr. Rothenberg.

Mr. Hardy. It was in Mr. Hoskins' files ?

Mrs. GuLiCK. Yes.

Mr. Hardy. As far as anybody reviewing that file would know, it
was an authentic document which reflected an actual conversation
which took place. Actually, it did not reflect any conversation at
all. Is that correct? Is it a customary procedure in that office to
write documents before an action and then put them in the files,
whether or not the action ever took place ?

Mrs. GuLiCK. No ; this is not a customary procedure.

Mr. Hardy. This document really worries me. If that document
had stayed in the files and we had not discovered it, it would have given
the appearance that a member of the staff of this committee had ap-
proved, this item. If that is not a self-serving approach to a matter
of this kind, then I do not know. That a governmental employee
should go to that extreme, unless there is a better explanation than
I have thus far received, I just do not imderstand it.

Mr. Eeddan. Does that memorandum say you had talked with
anyone else?

Mrs. GuLiCK. It says that I have talked with Mr, Deutschman.

Mr. Eeddan. Did you talk with Mr. Deutschman about this ?

Mrs. GuLiCK. I talked with Mr. Deutschman, so far as I can recol-
lect, on the 21st of June.

Mr. Eeddan. About this?

Mrs. GuLiCK. About our relations with the National Geographic.
I subsequently sent him a copy of our letter to the National Geo-
graphic and raised with him the question of our discussing a paper
with National Geographic with them.

Mr. Hardy. So, your testimony to this subcommittee is that your
reference to a conversation with Mr. Deutschman relates to one that
you had in the middle or latter part of Jime ?

Mrs. GuLiCK. It is my recollection that I also had another telephone
conversation with him earlier on the subject. I do not have the date of
that.

Mr. Hardy. Then your memorandum was not intended to reflect
the conversation you had with Mr. Deutscliman following your dis-
cussions with members of this subcommittee staff.

Mrs. Gtjlick. Pardon?

Mr. Hardy. To me, the memorandum left the implication that you
had had this conversation with Mr. Deutschman following discussions
which had been initiated by members of this staff.

Mrs. GuLiCK. I also did that.

Mr. Hardy. You had a conversation with Mr. Deutschman before
writing that memorandum and following the discussion with mem-
bers of this subcommittee staff ?

Mrs. Gui^iCK. Yes. I was giving you the date of the first conver-
sation which I had with him.

Mr. Eeddan. When was the second conversation ?

Mrs. GuLiCK. The second conversation was on August 3.

Mr. Hardy. With Mr. Deutschman?



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AGENCY FOR INTERNATIONAL DEVELOPMENT 96

M±s.GirLicK. Yee. ;

Mr. Reddan. Does it say you talked with anyone else, on the next
page? You just refer, to public infoitnation officer, I believe, at the
bottom of the page.

Mrs. GtjUck. The bottom of page 2?

Mr. Reddan. Yes. You do not have a name ; just a title.

Mrs. GuLicK. Yes, former public relations oflSlcer. I did not talk
with him myself.

Mr. Reddan. What does it say there ?

Mrs. GuLiCK (reading) :

- John Hcke said earlier discussions with National Geographic had preceded
AID sponsorship of this project, and the question of legaUty of receiving pay
had been checked at that time with the former public relations officer who had
said that regulations permitted payment under the circumstances contemplated ;
that is, private plus Army sponsoring of the project and the expedition.

Mr. Reddan. You say you did not talk to that individual ?

Mrs. GuMCK. No.

Mr. Reddan. Who did ?

Mrs. GuLiCK. Mr. Hoke would have talked with him. It was Mr.
Fred Blachly.

Mr. Hakdy. Does that memorandum indicate you talked Mdth him?

Mrs. GuLiCK. No.

Mr. Hardy. Our information from the National Geographic is in
complete conflict with your testimony with respect to your conversa-
tions.

Mrs. GuLiCK. Have you asked me, sir, about my conversations with
National Geographic ?

Mr. Hardy, lit me correct that. Our information from Mr.
Deutschman is in conflict with the information which you have given
with respect to conversations with him. Is he here ?

Mr. Reddan. He is in the hospital.

Mr. Hardy. I wish you would try to refresh your memory — ^because
I am afraid we are going to have a rather sharp conflict in testi-
mony before we get through — and see whether or not you are certain
that your recollection is correct. It has not been very long ago.

Mrs. Gtjlick. I have a memordandum in my files dated June 25
which was simply a covering memorandum, with the boxes "Per
conversation" and "For your information" checked, sending him a
copv of our letter of June 22 to the National Geographic, and a copy
of the general outline of the proposal.

Mr. Hardy. Maybe that was like this one — a telephone conversation
you intended to make and did not make. Can you be certain ? You
did not talk to Mr. Rothenberg.

Mrs. GuLiCK. I recollect quite clearly that I did not talk to Mr.
Rothenberg. I recollect clearly that I did talk to Mr. Deutschman.
That is all I can say.

Mr. Hardy. This was back in June that you are talking about —
or July ? What about in August ?

Mrs. GtJUCK. June 21 is the date I talked to

Mr. Hardy. How about since that time ?

Mrs. GtJLiCK. I recall talking to him at the time I was drafting these
notes.



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96 AOfiNCT FOB INTERNATIONAL DBVELOPIONT

Mr. Habdy. You do recall a conversation with Mr. Deutschman
about this matter in August f

Mrs. GuMCK. On the date that I wrote this. I called him again to
refresh my memory .

Mr. Reddan. And the date of that was August 3, is that right ?

Mrs-GuLicK. Augusts.

Mr. Hakdy. Are fliere other copies of that draft memorandum that
you have there!

Mrs. GuucK. There was one other carbon which I gave to Dr. Fei.
It is not in our files.

Mr. Hakdy. Dr. Fei, will you come up here, please, just a moment?
Sit right over there, if jou will.

Doctor, I do not believe you have been sworn. Maybe we had better
get you sworn, too.

Do you solemnly swear the testimonv you shall give in the matter
before the subcommittee will be the trutn, the whole truth, and nothing
but the truth, so help you God !

Dr. Fei. I do.

Mr. Hardy. Have a seat, sir.

TESTIMONY OF DB. EBWAKD C. YEI, ACTDIO DIB£CTOB, BESEAECH,
EVALTIATIOSr AND FLANNINO ASSISTAITGE STAFF, AOENCT FOB
INTEBNATIONAL DEVELOFUENT

Mr. Hardy. Will you hand him that memorandimi, please, Mrs.
Gulick. Doctor, have you ever seen that memorandum before, or a
COOT of it?

Dr. Fei. Yes, I have.

Mr. Hardy. Have you a copy of it in your files?

Dr. Fei. I believe I do.

Mr. Hardy. Were you advised that that memorandum reflects con-
versations which never did take place ?

Dr. Fei. Yes. I was called by a member of your staff by telephone,
and he said, "Do you know about the relationships with National Geo-
graphic ?" or words to that effect. I said, "Yes, I do. I recall writing
a letter to National Geographic.'' This was in the testimony yester-
day. He said, "Did you know Hoke was going to get paid for this?"
I said, "No, I did not know." I asked, "Is that correct ?" He replied,
"That is my understanding." He said, "Did you know that National
Geographic was asking for an exclusive on this ?" I replied I did not.
I think this would be helpful in terms of explaining what took place.

Mr. Hardy. I am interested in this memorandum solely. Doctor,
and if that is what we are talking about, I hate to go around Robin
Hood's bam so far, because we will not get back to the front entrance.
But go ahead.

Dr. Fei. When he asked these questions, I said, "No, I do not." He
said, "Will you check it out?" I said, "I certainly will check it out."

I immediately called Mrs. Gulick. I said, "I do not know of these
thin^. What is the problem?" She explained it to me, to my mind
a satisfactory explanation, which was simply : Problems are brought
to me when they are problems. When they are not problems, I do not
want to know about them. She said in her discussions with Mr. Hoke



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'AGIWCY FOR INTERNATIONAL DEVELOPMENT 97

and with Mr. Deutschman the problem, of whether Mr. Hoke was to
accept pay would follow the manual orders. So there was no prob-
lem there. Whether he should or should not accept pay was up to
the manual orders.

Secondly, she explained to me that as far as the publicity or the
exclusiveness, this was a problem that she had discussed with the
public information people, and they had explained, as far as they
were concerned, first of all, there was a misunderstanding of what
exclusive meant, but that certainly in the National Geographic pro-
posals it was all right; this does not preclude us using our own photo
and technical information as we saw fit. ^ ^

I said, "All right, since I did not know this, will you write this
down as a memo for the files, and also now phone up this gentleman
who called me." I have forgotten his name. "Will you please phone
this gentleman up, explainmg this?" She said, "All right, i will
write up this memo in draft." I said, "All right, do this."

During the following day, I believe — ^I may be wrong by a few
hours, but I think during the following day — all of this was occurring
almost at the same time — we went to a meeting in Mr. Grant's office —
I think it was Mr. Grant's office — and Mrs. GSick was there. During
the course of that meeting, before the end of it, Mrs. Gulick said —
incidentally, I had told her, "Draft this, and before you telephone back
to this gentleman on your staff, please contact Mr. Grant's office.
Since they are handling everything, they should know everything
that goes on."

At that meeting she told me, "I am not going to phone up this
gentleman now because I have just talked with the General Counsel."
We were all sitting around there. Before I got up to go, she said,
"We have talked to him and he said he would be handSng it." In
other words, he would make the direct call. I said, "All right."

Mr. Hardy. Then you instructed Mrs. Gulick to write a memoran-
dum on a telephone conversation before she made it?

Dr. Fei. No, I told her to write up a memo so that when she picked
up the telephone to call she knew exactly and was straight m the
story she told me exactly as she told it to me, and after she had checked
this out with General Counsel, and after the phone call, she would
redo the draft, including, I told her, "any more that developed in the
process of your telephone conversation." He will ask questions, and
you cannot know wnat questions he will ask you."

Mr. Hjlrdt. This is the most preposterous thing I have ever heard.

Dr. Fei. This is the way of being sure everything is clear. I ob-
viously told her she was to have this memo fully complete with any
subsequent conversations on the telephone that she would have with
your staff member. If he asked questions this should be reflected.

Mr. Hardy. If you have memorandums running all through files of
AID on alleged telephone conversations that never took place they
ought to be destroyed. I am surprised to find that you testify now
that you knew that this memo referred to a conservation that didn't
take place and you still have it in your file. It is a preposterous
situation to me. It is just as misleading as anything could be. I am
surprised about it.

Keference has been made to a meeting held in your office, Mr. Grant.
Did you take minutes on that meeting ?



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98 AGENCY FOR INTERNATIONAL DEVELOPMENT

Mr. Grant. No, Mr. Chairman.

Mr. Hardy. Did you participate in it ?

Mr. Grant. Yes, sir.

Mr. Hardy. Did you hear this reference to this telephone conversa-
tion which didn't take place ?

Mr. Grant. Here this morning?

Mr. Hardy. I am talking about the testimony. Dr. Fei testified
this took place in your office, if I understood correctly.

Mr. Grant. I don't recall this as a subject in the meeting. We had
a meeting, which I asked Mrs. Gulick, Dr. Fei, and Mr. Hoke to
attend so that I could find out what this research contract involving
the solar battery recharging centers was all about.

Mr. Hardy. You doirt recall any conversation about a telephone
call to members of this staff which took place while you were present?

Mr. Grant. Mr. Hoskins, who assists me, did have conversations
with Mrs. Gulick about that.

Mr. Hardy. Yes, because he is the man who made the phone call.

Mr. Grant. He is the one who knows about that. I don't recall it.

Mr. Hardy. I am quite disturbed about a memorandum being in the
files of an agency or a phone call which did not take place.

Thank you very much, Doctor.

Mr. Meader, do you have questions ?

Mr. Meader. I wanted to ask some questions about the approval of
this project at all.

Mr. Hardy. Just one moment further. Dr. Fei and Mrs. Gulick.

Mr. Meader. I want to preface my remark by saying I was not able
to be here all the time yesterday. I had a conflict with hearings of the
Judiciary Antitrust Subcommittee.

Dr. Fei, I would like to get certain things clear in my own mind, if
I can, and it seems to me you are the most responsible person in this
whole business. Are you the one who made decisions to undertake this
project?

Dr. Fei. Yes, sir, I am.

Mr. Meader. Just describe briefly what the project is and why you
thought it would be useful to our AID program.

Dr. Fei. May I ask Mrs. Gulick to do mis? She is my substantive
officer in this area of developing research in this field, so she knows
more of the technical aspects of this.

May I ask her to describe it? I would in effect be repeating what
our discussions were over a period of time.

Mr. Meader. But you take responsibility for it ?

Dr. Fei. That is right.

Mr. Meader. She had more detailed knowledge?

Dr. Fei. That is right. I cover different areas, all of which are
under my jurisdiction. I had asked her to be responsible for develop-
ing research in this particular area.

Mr. Meader. That is satisfactory to me.

Dr. Fei. Thank you.

Mrs. Gulick. When I came on duty in December of 1961, 1 think
it was on the 19th, I was assigned the job of developing a research
program on the problem of the shortage of power in rural areas. I
was not supposed to cultivate projects but develop a program to solve



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AGENCY FOR INTERNATIONAL DEVELOPMENT 99

a problem. The problem was the shortage of power in the rural areas,
not the cities but out in the villages where the big problem existed.

The first job was to find out what had been d!one in this field and
for that purpose I did review the f easibilitjr studies on the general
engineering studies for big power projects in about 10 or 11 of our
countries.

I also checked in with External Research Division, Department of
State, to see what kinds of other collateral research was done. I had
a collection of projects handed to me for evaluation as to whether or
not these would help further an exploration of the problem.

Mr. Hoke's project was not among those. I did not have that at the
beginning.

Mr. Meader. Before you go further, so we can determine your
capacity to evaluate rural power facilities, why don't ;^ou give us a
brief biogiaphical dietch, particularly your experience in and out of
Government relating to your position ?

Mrs. GuLiCK. I was an economist. I graduated in 1940. I got my
master's in 1941 from Fletcher's School of Law in diplomacy. I have
had about 12 years of experience as an intelligence research analyst
inside the Government beginning in 1941 to 1945 with the research
side of OSS and was with the Department of State. Most of that
was concerned with economic analj^sis of development, postwar devel-
opment problems of countries which since have become our under-
developed countries.

I went back to graduate work again at Fletcher in the field of inter-
national diplomacy, and subsequently, after a tour of duty with my
husband in Ireland, rejoined the Government in 1951, where I worked
first in the Intelligence Branch of State, again doing research in sup-
port of technical administration projects and problems.

Second, in AID itself, in the first research and evaluation unit which
had a short history of about 2 years, from 1953 through 1955.

Then I worked with the White House disarmament staff again as
a i-esearch analyst from 1955 until 1958. There was another year in
the Intelligence Branch in State, again doing research support on dis-
armament.

Following a tour of duty in Pakistan where my husband was as-
signed I came back to Washington and I applied for and was given
a job at the beginning of the development of this program in research
in problems of foreign assistance as authorized in the act of last year
under title V.

My experience has not been that of a contracting officer but of an
intelligence analyst. I have done in-house research.

I have been asked to solve problems and I did it, going first at the
problem and then developing the answer myself.

Mr. Meader. Perhaps we can shorten this a little bit by my stating
that I was a little surprised that foreign aid funds were being used
to develop and promote a speculative power source such as appears
to be the case in this entire inquiry.

I had not realized that foreign aid was being used for that purj)ose.



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