It was common knowledge, while the American University Experimental Station existed, that the Army conducted chemical warfare research and related activities in Spring Valley. The Experimental Station comprised an extensive area of about 500 acres.

Photographs of the area from 1918 to 1930 showed that much debris from the Experimental Station was left behind. As late as 1927, a few buildings, remnants of other buildings, and two inground structures with foundations around them still existed. Numerous large ground scars, cracers, and impressions of trenches remained.

During the World War I period, the local and university
newspapers periodically reported on the Chemical
Warfare Service's activities. One August 1918 article
reported the accidental gassing of a senator and his
family who lived in Spring Valley. Also, newspapers
reported in 1950 that the university found a bomb on
the grounds during a construction project.

In addition, in 1986, at the request of American University, the Army conducted research into the possibility that it had buried chemical munitions on univergity property. Meanwhile, the university maintained contact with Spring Valley residents (including Miller Companies) regarding the status of the proposed construction project. It's unlikely that Miller Companies was unaware of the investigations.

Also, when the construction crew discovered the minitions burial pit in January 1993, a 1920 vintage sign was also uncovered warning of "Danger-Poisonous Gas." This sign must have been posted on Miller Companies' property at one time, since it had owned the land since about 1926.

Obiective: To assess the validity of claims against the Army for damages resulting from the Spring Valley cleanup.

(Millar Companies' claim is contingent on the Army's negligence with respect to its handling of the Spring Valley operation. While we didn't find any negligence on the Army's part in its handling of Spring Valley, to answer this objective, we evaluated the validity of the amounts claimed by Miller Companies under the assumption that the Army was negligent.)

Conclusion: We couldn't assess the validity of 14 of the 17 line iteme included in the claim valued at $4,003,655 because Miller Companies didn't provide all necessary

supporting documentation. However, three line items claimed in the Land Investment Division section of the claim valued at $11,131,385 weren't valid.

In the Land Investment Division section of the claim, Miller Companies claimed it was forced to sell land in the Spring Meadows area below market value of $140,000 to $165,000 a lot. Spring Meadowe is a subdivision being developed by Miller Companies in Maryland. Miller Companies claimed it had to sell the lots in Spring Meadows to compensate for cash flow problems caused by a slow down in sales brought about by the discovery of munitions in Spring Valley.

In September 1992, 4 months before the discovery of chemical munitions at Spring Valley, Miller Companies entered into negotiations with another commercial real estate developer to market and sell 84 single family building lots in Spring Meadows to other builders. Correspondence between Miller Companies and the other developer showed they did this because there wasn't a market for Miller Companies' higher priced homes in Spring Meadows. Therefore, the sale of the lots in Spring Meadows wasn't related to the discovery of chemical munitions in Spring Valley.

Furthermore, the amounts of the offers submitted by builders, some of which were submitted in 1992 (before the discovery of munitions in Spring Valley), were in the same general range--$90,000 to $110,000. These offers indicated what the builders thought the property was worth at the time--about $50,000 a lot less than Miller Companies claimed.

We needed additional supporting documentation from Miller Companies to assess the remaining 14 line items.

As of the date of this report, Miller Companies hadn't provided all of the requested information.

Although we couldn't fully assess the validity of the claim for the 14 line iteme, portions of the claim itself appeared to refute the damages. For example, in a October 1994 letter to a third party claimant's attorney, Miller Companies' lawyers stated, "New and used homes have been selling. Accordingly, we can only assume that your clients' inability to market their home is a function of current market conditions."

To further substantiate items in the claim, we requested assistance from the Corps of Engineers' Real Estate Division. We asked division personnel to conduct title and deed searches of the burial pit property and to prepare an indepth trend analysis of Spring Valley real estate values. We made the request in an attempt to further corroborate:

Whether the deeds mentioned anything about the
munitions at the time title was transferred.

What type of warranties, if any, were given at the time Miller Companies purchased the land.

As of the date of this report, the Corpe was unable to comply with our request.

Mrs. MORELLA. You're just on call for questions right and so-
Mr. KIEFER. Right.

Mrs. MORELLA. And so now let me see, I have Colonel Fiala, but are you planning to testify? This is just a brief search for identity. All right. I know you're a special presence.

Raymond Fatz, Deputy Assistant Secretary of the Army for Environment, Safety and Occupational Health. Forgive the interruption. Thank you, sir.

Mr. FATZ. Good afternoon, Madam Chairwoman and Congresswoman Norton. I'm pleased to have this opportunity to appear before you to discuss Army activities at the formerly used defense site [FUDS], located in Spring Valley.

The Army's No. 1 priority for Spring Valley is to protect the health and safety of its residents. I have personally been to the site and have attended public meetings and have listened to the residents' concerns. We share their concerns and are committed to identifying and removing remaining contamination from defenserelated activities. Through a collaborative effort with the Environmental Protection Agency, the District of Columbia Department of Health, American University and the community, we will work to ensure that information on our activities is openly communicated and that the cleanup proceeds in a rapid and thorough manner. We will continue to do so until the community is satisfied that the cleanup is complete.

As you know, the Army has initiated a comprehensive sampling program at every residential property in Spring Valley to identify potential contamination. This effort was designed and is being undertaken in close coordination with our regulatory partners and the community. It is my hope that this effort and any necessary followon actions will provide a level of comfort to the residents that their property is safe for their families.

This is a highly complex project due to the nature of contamination, the fact that the area is so highly developed and is a residential community. The Army has worked closely with the District of Columbia, the EPA, American University and ATSDR since 1993 to share information and to coordinate plans and future actions. I believe that the Army has been forthright in providing information to all interested parties.

After the discovery of the munitions by a construction crew in 1993, the Army began extensive outreach to the community. We developed a public involvement and response plan that had the specific objectives of keeping the community informed, providing an opportunity to review and comment on work being conducted, and ensuring that the community concerns are integrated into the plans and actions. Today information is shared through community meetings, newsletters, status updates, a Web site and information repository at the Palisades Public Library.

This spring the Army established a restoration advisory board comprised of 14 community members as well as representatives from several involved agencies. The board provides an expanded opportunity for public input to the cleanup process.

The safety and well-being of the community are of paramount importance to the Army. I know that this may be a very difficult time for the Spring Valley residents. As a parent, I understand

their need to have confidence in the safety of their homes and yards. I want to assure you that the Army is committed to restoring that confidence. The Army is applying its best expertise and resources and technology to the situation. We will continue to clean up this site as comprehensively and effectively as possible in coordination with the regulatory agencies and the community.

I believe that the Army acted in good faith at every stage of this project, based on the information and technology available to us at the time. Nonetheless, it is now clear that some contamination went undetected despite our efforts.

Over the past 15 years, we have learned a great deal about the past practices dating back to World War I and how to better detect and characterize contamination. A review of our actions at Spring Valley will ensure that what we have learned is applied as we go forward investigating and remediating this and other sites.

I appreciate the opportunity to testify on this matter of importance. Thank you.

Mrs. MORELLA. Thank you very much.

[The prepared statement of Mr. Fatz follows:]