But I think any job coming off of welfare into gainful employment starts a cycle, and we in industry are given people to work with who are negated in their thinking: "You don't want this type of work, wait until you find something more suitable."

But I think if we start the process somewhere. Getting the individual up in the morning and going to work, he can find a position in life.

We developed over 5,000 jobs off the MDTA and OJT program we had. These were shot out of the box by other agencies, which locked the individuals into a welfare state.

The only explanation I gave is that I have never walked into a restaurant or a hotel and seen a sign, "Closed for lack of help."

Somebody is doing these jobs, and paying taxes for others locked into a holding situation on welfare.

We are confronted with the same problems, getting back to the Hoffman program, that most other companies find. We have changed the operation. We have asked the Department of Labor to come in, and they have worked with us. We are constantly told we don't meet the terms of the contract, that we don't remain within the guidelines, but by making changes to the contract, by assimilating people into our plant on a slower basis rather than putting them in 30, 40, or 50 people at a time, the people in the plant become used to them and they become used to us, and are acclimated in a more feasible fashion.

We find that by spending more time with some individuals that we do with others, that it works for the betterment of the program. I think that the contracts should have more latitude. I think they should have more leeway. I think there should be a closer relationship between the parties involved, including NAB, of which we are a member, and the Department of Labor.

I think there should be more business-oriented people representing the Department, with a keener understanding of the type of problems we are confronted with.

In our situation, the Department of Labor people have come from the building trades, and they are not fully attuned to the inner workings of our industry. They have the old apprentice-type concept.

We had a problem at the plant that was corrected. All the hardcore trainees were designated. We wear a white frock coat and safetytype helmet. All of the trainees brought in the plant were given a red hat, and were immediately shot out of the box by all the other people involved, because this man was tagged as a so-called hardcore disadvantaged individual, and had two strikes on him before he started.

We are in the process of reeducating the supervisory help that this individual is no different than anyone else.

Our approach and theory is that we are willing to help anyone who is willing to help themselves. We feel if more restrictions are placed on the trainees, and have him carry his end of the load and not constantly look to the only source, which is us as industry, as being the one that is constantly scrutinized and monitored and checked, and asked why performances aren't met, and yet, the other component, the trainee, goes merrily on his way accounting to no

one. Without his cooperation, his 100 percent cooperation, we couldn't possible succeed.

To say that all of the people involved in a program have dropped by the board is not so. We have many success stories. We had the pleasure of having Senator Cranston participate in a graduation exercise. We awarded certificates of completion for completing 260 days of training.

In most instances this is the first type of award many of these individuals have ever received in their lives. It was heart warming and gave a certain sense of gratification and satisfaction from it.

But when you compare the success against the failures, there is a certain element that will divert and fall back on the other resources they have, where they can run away from the world.

I speak for myself, and our company, particularly. We have gone all out. We have taken them out of bed in the morning, driven them home at night, counseled them on weekends.

I have worked as many as 18 hours a day trying to solve their problems. Fortunately, as I say, the approach to immediate and gainful employment eliminates most of these social problems.

A man is not concerned about how he pays his rent or medical bill, or how he feeds his children. He is gainfully employed; he is contributing, has a sense of participation, is not held out from the JOB environment by being held in a classroom. He is immediately brought into the family of employees.

Then, the problems become very insignificant. It is just a question of possibly keeping up, although we deviate from the terms of the contract, and we will continue to do so, as long as the end result is

success.

Of those people now in the program, and we have approximately 85 or 90 on board, we have a retention factor of between 80 and 82 percent. That excludes of course, those who have either gone back to prison or who have left for other jobs.

We do follow up the people once they leave, and find out why. There is a lack of followup service by other agencies involved.

In going over some of the reports that were left by our subcontractor-what reports we managed to find-we found an awful lot terminated for absenteeism, and yet, no followup, no reason why he was absent.

In some cases, the man went back to jail, or he just expressed a desire not to continue in our particular industry.

Some of the jobs we train for, they are union, in fact all are union, they derive all of the union benefits. We have a 45 percent fringe benefit package that goes along with the jobs. Once they leave us, they can go into any one of the meatpacking plants, or the corner butcher shop, for that matter.

We expose the individual on a gradual basis, and try to fit the individual into what we think is best suited for him and what is best suited for the company, and make him feel that he is contributing something; and we, in turn, have given him something.

I think that just about covers all I have to say, Senator.

Senator NELSON. Thank you very much, Mr. Russo. We appreciate your coming.

Mr. Russo. It was a pleasure.

(Information subsequently supplied follows:)

SUPPLEMENTAL STATEMENT OF JOSEPH J. RUSSO, HOFFMAN BROS.
PACKING CO., INC., LOS ANGELES, CALIF.

One of the weak points of these programs, particularly where sub-contractors are involved, is when there is a breakdown of relations between the Prime Contractor and the Sub-Contractor. There is no place for help or relief to the Prime Contractor. He is told the problems are between he and his sub.

When proposals are structured and contracts issued, clearly showing a sub-contractor involvement, why does the responsibility rest fully with the Prime Contractor. The issuance of a contract by the Department of Labor, knowing full well that the sub-contractor is an integral part of the proposal, should make him legally libel as well. His performance and compliancy should be questioned just as fully. The Prime Contractor merely acts as a paying agent for the Sub-Contractor services, as required by the Department of Labor and made part of his perform

ance.

If, as the contract proceeds, trouble developes, the contractor has no one, nor place to go to for relief.

His problem becomes compounded by his enability in not being able to function.

In our particular case, all records were taken from the Project Office, which is accordance with the terms of the contract, should be our property. We have been asked to substantiate performance requirements, but in some instances have been unable to do so, based on these records which were removed - It left us having to respond to a regulartory agencies for an action that was caused by someone elses participation.

All records should be considered Government property and should be held only by the party having the final responsibility.

Agencies, involved in supportive services, in some instances, come recommended by the Department of Labor, or the National Alliance of Businessmen. Many are structured on a very flimsy financial base, being incorporated as "Non-Profit Corporations", and move in and out at will. The Prime Contractor, on the other hand, is required to assume all obligations, legally and morally. I would strongly recommend, that on any contracts, awarded, where the supportive services are to be subbed out, that a separate contract be written for said services. In this manner it would afford the Prime Contractor the privilege of selecting his input from any such sources and not be held responsible for their actions. In those cases where the Prime Contractor agrees to provide his own supportive services, his contract would be so structured. Where he later decides to eliminate contracted support services, his contract could be amended to embrace this position. It would eliminate many potential problems.

Senator NELSON. Our next witness is Mr. Richard Amador, Community Human Resources Agency, Los Angeles.

Senator Cranston has asked me to extend his regrets to Mr. Russo, Mr. Amador, and Mr. Terry; that he was on the floor of the Senate involved in an issue there and regrets that he couldn't be here for your testimony.

STATEMENT OF RICHARD AMADOR, DIRECTOR, COMMUNITY AND HUMAN RESOURCES AGENCY, LOS ANGELES, CALIF.

Mr. AMADOR. Mr. Chairman, thank you for the opportunity to be present to present my views here on the JOBS program.

I am Richard Amador, director of the Community and Human Resources Agency, a Los Angeles-based, non-profit community agency focusing on, the development of manpower programs, training, research, and executive-skills training. A more detailed statement on our agency can be submitted to you.

I am also secretary of the Mexican-American Industrial Community Council, an organization involving Mexican Americans, professional individuals primarily in the field of manpower training; and I serve also as president of the Mexican-American Manpower agencies in the Southwest.

I would be glad to answer any questions that you may have. However, I would like to first have the opportunity to respond to the remarks and statements that were made by the Hoffman Bros. Packing Co. representative. I must say that I did not get to see the correspondence until yesterday evening so my presentation is subject to further information, which I will submit at a later date and after the adjudication of the case before courts at this time.

In my experience with the MA2's, MA3's, 4's 5's, in the JOBS program series and as coordinator with a special task force in 1966 with President Johnson's Cabinet Committee on Manpower, this is probably the first time that we have ever come across the most uncooperative employer that we can think of.

The statements made by the company in response to a questionnaire appeared to viciously attack every party to the project except themselves. However, I would like to point out for the record that this is the second time that Mr. Russo has made statements which, if under oath, may have committed perjury. The last time in Municipal Court he made similar false, derogatory statements which could have led to perjury charges against Mr. Russo had the judge not ruled in our favor on a legal motion.

Reference is made now to the communications from Hoffman dated March 27, 1970 to this committee.

In Hoffman's remarks they stated:, "We definitely felt there was a misuse of Federal funds." The preliminary indication being that Hoffman is absolved of any wrongdoing.

Let me start with example 1.

The company was contracted by the Department of Labor to provide vocational education to 40 trainee slots. The contract was for total of 150 trainees. I am just using one example.

It was a contract to provide 40 trainees with 640 hours each of vocational classroom education (class theory) for meat cutters

(butchers). In addition, an additional 200 hours of nonproductive work (such as machines orientation) experience, for a total of 840 hours, or 20 weeks of vocational education.

During the months from August 1968 when the program started to May 1969 no such vocational education was provided, although Federal funds had been specifically allocated.

This appears to be a flagrant violation of the intent of the MA-3 program and misuse of taxpayers' funds. No other party involved in this project committed such violations.

Example 2: The company states that $78,000 was cut from their fixed-price contract since June 1969 after their breach of contract. They state that the cut was "in the number of hours of orientation and basic education."

Since termination of the subcontract components, if they were really talking about that, a reduction could have been in excess of $100,000. In addition to that amount, Hoffman could have received. another major cut because of their lack of commitment to provide Vocational education, nonproductive work orientation training, and other services which they have received pro-rated.

These components including trainee wages allocated for this specific period may have reduced the company's budget perhaps another $100,000 for a possible total reduction exceeding $200,000.

Example No. 3: Hoffman claims to have had their files and office "cleared of all files pertinent to the operation and to this day are attempting to secure this data."

In their correspondence to your committee dated March 27, 1970, the Hoffman representatives were fully aware-and again an indication of their misstatements-that their statements regarding these files have been rejected or not accepted in Superior Court.

This again is indicative of their misrepresentation before this committee.

Example No. 4: Hoffman states, "For an enrollment of 161 trainees we were left with 39. We became deeply concerned."

First of all, let me point out that the dropout rate can be substantially attributed to the following:

(1) Improper screening procedures by the company, although the agency made corrective suggestions but were disregarded by Mr. Arnold Kleinberg, the Hoffman project director;

(2) Insensitivity of company foremen company officials first gave excuses and then outright refused, to provide any sensitivity or orientation training to the foremen at the plant;

(3) Unwillingness of Hoffman officials to permit or provide program orientation of plant foreman;

(4) Trainee personal reasons; and

(5) Excessive absenteeism.

I would like to point out on that when Mr. Russo stated that the subcontractor gave excuses as excessive absenteeism on Department forms, I would like to point out that the subcontractor was not responsible nor was it the subcontractor's contractual responsibility to note on dol forms as to what were the reasons for the discharge of employees.

This was the company's responsibility and the project director at that time, Mr. Arnold Kleinberg-the company noted in their dis