on a salary, fee or commission basis, of persons specialized in making collections. RESULTS. The Department has advised that after careful consideration it has concluded that it is not feasible to have collection activities performed by private collection agencies, because there are many aspects in which debts owed to the Government differ from typical private debts. The employment of private agencies would make it difficult to maintain uniform standards and procedures, and it has reservations about the propriety of a citizen being dunned by private bill collectors for his debts to the Government. It has, however, endeavored to enlarge the collection activities in the U.S. attorneys' offices by seeking funds to employ 40 additional attorneys to engage in collection work in the several U.S. attorneys' offices (a request not granted by the Congress), and it has instructed each U.S. attorney to designate an assistant to assume charge of all collection activities within the office; and such designation has been accomplished in virtually all offices. COLLECTIONS GUIDANCE (Recommendation No. 1(d)): Establish general criteria for the guidance of U.S. attorneys in determining whether cases warrant closing for uncollectibility, and, require that cases closed for debtors' inabilities to pay be supported by memoranda justifying such actions, such memoranda to be reviewed by Department personnel. RESULTS.-The Department has advised that new detailed instructions have been issued to the U.S. attorneys concerning both pre- and post-judgment collection procedures and policies with guidelines for compromising, closing, and transferring cases to inactive status, including the determination of collectibility. A memorandum justifying the closing of any case for uncollectibility must be forwarded to the supervising division of the Department for review, except in delegated Civil Division cases (i.e., those involving $5,000 or less) in which a memorandum is to be placed in the U.S. attorney's file, subject to being spot checked in the course of the inspections and visits to U.S. attorneys' offices conducted by the Executive Office for U.S. Attorneys and the Civil Division. GENERAL LEDGERS (Recommendation No. 1(e)): Give consideration to the establishment and maintenance of general control ledgers on all claims and judgments outstanding in each of the U.S. attorneys' offices and in the Department of Justice. RESULTS. The Department has advised that those most actively concerned with collection matters believe that all of the basic information which a ledger would reflect can be obtained under its existing system from machine records, debtor index cards, and case files. Further, it keeps the referring agency currently advised of all judgments taken, payments received, and closings effected, so that the agency may keep its master records current, and the recommended ledger would be duplicative of agency efforts. The Department believes that control ledgers should be kept by the referring agency rather than by the Department, since it is primarily an accounting function and therefore more properly belongs to the referring agency. As the Department's system is perfected machine records, debtor index cards, case files-it says it will have sufficient records to properly discharge responsibilities in collection matters. JUDGMENT REPORTING (Recommendation No. 2): In computing its reports under the Budget and Accounting Procedures Act of 1950, the Department should determine and report the actual amount of judgments written off for uncollectibility. RESULTS. Because, as noted immediately above, the Department is of the view that since referring agencies keep ledgers of their own claims and judgments, which are carried by the agencies as funds owed to them (rather than owed to the Department of Justice), it should be the responsibility of the referring agency to report the writing-off of claims and judgments due to it. GAO AUDITS (Recommendation No. 3): In the interest of aiding the Department in improving its practices and procedures relating to collections of judgments, it is recommended that the Comptroller General of the United States: Cause audits to be made by the General Accounting Office of the collection activities of the litigating divisions of the Department and of any offices of U.S. attorneys deemed necessary, such audits to be followed by reports to be made available to the Department and to this committee. RESULTS. The Comptroller General has advised that the GAO has had the collection activities at the U.S. attorneys' offices in Boston, Mass., New York, N.Y., Chicago, Ill., and Los Angeles, Calif., and of the litigating divisions of the Department under review. A report on the GÃO findings will be prepared with copies to be made available to the Department and to the committee. The Department has advised that its Civil Division continued its expanded program of periodic visits to U.S. attorneys' offices to review and discuss the handling of matters, including judgment collections, within the Division's jurisdiction. In fiscal year 1965, 34 offices were visited; 52 visits are scheduled for fiscal year 1966; and it is planned that all offices in the continental United States will have been visited during the 3 fiscal years 1965-67, with the larger offices being visited annually. Further, attorneys from the Executive Office for U.S. Attorneys and from the Administrative Division have been instructed that as they make inspections of the various U.S. attorneys' offices they are to give particular emphasis to collection problems, with a view to improving collection procedures where necessary. SPECIAL FEDERAL HOME LOAN BANK BOARD SUBCOMMITTEE [House Rept. No. 447, 88th Cong, 1st sess.] (NOTE. The Special Federal Home Loan Bank Board Subcommittee was established in the 88th Cong. for the purpose of completing work which had been done by a similarly named special subcommittee in the 87th Cong. in investigating and studying the Federal Home Loan Bank Board's activities with respect to the Alice Savings & Loan Association of Alice, Tex. The activity of the special subcommittee terminated with the approval by the full committee on June 19, 1963, of the report referred to below.) INVESTIGATION AND STUDY OF THE FEDERAL HOME Sixth Report by the Committee on Government Operations This report is concerned with the operations and activities of the Federal Home Loan Bank Board (hereinafter referred to as Bank Board) as affecting an insured State-chartered savings and loan association-the Alice Savings & Loan Association, Alice, Tex.-and particularly with the series of events following an examination made jointly by the State of Texas and the Bank Board in 1958. The Alice Association came under the jurisdiction of the Bank Board by having its accounts insured by the Federal Savings and Loan Insurance Corporation, a constituent agency of the Bank Board. This is the second of two reports based upon hearings held by the special subcommittee during the 87th Congress. The other report dealt with the Bank Board's activities in connection with the First Federal Savings & Loan Association of Clovis, N. Mex. (H. Rept. 2494, 87th Cong., 2d sess.). The report presented a pattern of persecution and harassment of the Alice Savings & Loan Association and its principal officers by employees of the Home Loan Bank Board aided and abetted by the local U.S. attorney. The report found that the Federal Home Loan Bank Board had been seriously derelict in (1) failing to promulgate adequate rules and regulations for the operation of savings and loan associations and for the conduct and activities of associations' managements. (2) failing to establish adequate internal guidelines and controls for the activities of its employees and the operations of the agency. (3) allowing a few top employees to arrogate to themselvs instead of the Board, the responsibility for issuing instructions and policies governing the conduct of savings and loan associa tions and their managements. This has resulted in capricious and arbitrary supervision of the savings and loan industry. (4) failing to evolve definitions of terms, such as "self-dealing" and "conflict of interest," which it uses in relation to the actions of associations and upon which it bases actions against the associations. The committee stated: "Due to the background of the organizers of savings and loan associations this is a difficult and tenuous area where the Bank Board should exercise leadership rather than leave the industry to flounder and individuals to become innocently entrapped. Failure to chart the area has led to a situation where the Bank Board staff can blackmail and bludgeon associations and their officers for any cause or whim whatsoever." The committee found that the Alice Savings & Loan Association was persecuted and harassed because it had increased its dividend rate while other savings and loan associations in the area were reducing theirs. While this action was within the prerogative of the management and not prohibited by any rule, Bank Board employees undertook a course of action designed to force the association back into line even though the employees had no legal authority to act as they did. These actions included the instigation of a capricious prosecution, which was later dismissed, of the association's president, and illegally obtaining income tax returns of persons dealing with the association. Both of these actions involved the improper cooperation of the U.S. attorney. The report also pointed out that there was a serious question regarding the adequacy of standards and procedures used by the Bank Board to assure that qualified persons are hired for positions as examiners. The report found low qualification standards, failure adequately to investigate the backgrounds and qualifications claimed by applicants and weaknesses in the hiring, training, and promotion practices. The committee found that Bank Board employees were not adequately instructed regarding the laws applicable to State-chartered savings and loan associations, nor regarding the statutes and regulations applicable to the use of income tax returns. Similar lack of knowledge was found with respect to the local U.S. attorney and his assistant. The committee noted that the Bank Board had taken at least 12 actions, listed in the report, as a result of comments made during the course of the subcommittee hearings and in accordance with recommendations in prior committee reports. The recommendations of the report as listed below are followed, in each case, by a statement of the status on results, largely composed of current information from the Chairman of the Bank Board, transmitted April 29, 1966. RECOMMENDATIONS TO THE BANK BOARD The committee recommended that the Federal Home Loan Bank Board (a) immediately establish adequate guidelines and controls for the supervision and control of the activities of its employees and agents and the operations of the agency so as to prevent the |