I think the quality of that board-and any board disagrees with some of the things that I recommend to them, and they should, and in most instances they are right-but whether or not I like it is immaterial.

Mr. WRIGHT. I do not think the question is whether you like the members. The question Mr. Cleveland asked, if I understand, is whether you think it is an effective board.

Mr. GIGOUX. Yes, sir.

Mr. CLEVELAND. Then your point is if you have to comply with this order, you will not have an effective board?

Mr. GIGOUX. I wonder whether I will or not, because if we just get a name for the name's sake-another problem in our particular area, when you go back to the geographic size to carry on business, we by our bylaws have to have a quorum

Mr. CLEVELAND. I want to stay with that point. I want to know. You just received this order, is that right?

Mr. GIGOUX. Yes.

Mr. CLEVELAND. Now, what do you have to do because you have received this order?

Mr. GIGOUX. We have a year to adhere to the requirements spelled out in this act.

Mr. CLEVELAND. You feel you are not adhering to this now?

Mr. GIGOUX. No, we do not have a percentage of minority representation. We have minorities on our board, very effective minorities, but we are going to have to significantly increase that, and by our bylaws, who am I going to go back to and say, well, we do not want you any more?

Mr. WRIGHT. This requires you to go to all the minority groups, including perhaps ad hoc groups that have just set themselves up for a particular political issue, and to give the names of the minority persons selected by the minority groups to serve as minority representatives?

I have had some observations, as I suppose all of us have in many areas of the country, of the development of various groups purporting to represent minority sentiment. If I might offer an illustration, San Antonio, Tex., has a predominantly Latin American population. For the first time in the history of our State that area is represented in Congress, and has been now for some years, by Henry Gonzalez, a very popular and much beloved Member of the Congress.

It is evident to me, as an observer, that Henry Gonzalez is a very much accepted person, highly acceptable to and representative of the constituency he represents. He keeps getting reelected by preponderant majorities. Notwithstanding this, there have sprung up in San Antonio little fringe organizations for the purpose of fighting Henry Gonzalez, and these are organizations which say that now that he has been elected a Member of Congress, he therefore is a member of the establishment, and no longer represents the minority, which in my humble judgment, is absolutely not true. I think he does an excellent job of representing all of the people.

Whereas 95 percent or more of the Spanish-speaking people of San Antonio idolize and actively support Henry Gonzalez, there must be a dozen different organizations representing the other 5 percent-and in that I think I am generous. These have set themselves up as ad hoc groups purporting to represent the minority. Manifestly they do not

do so. But if this directive is followed, each organization representing, in all, less than 5 percent of the minority people in the area, must be represented on your board of directors?

Mr. GIGOUX. That is right. That is the fact that I fear, because by virtue of the radical out-shouting and out-arguing and wearing somebody down to the point where that person throws up his hands. Let me be the first to state that I feel the radicals have served a purpose in this Nation in bringing to light a lot of the inequities that the minority have faced, and in this respect they have done the Nation a tremendous service. But I fear-and again I go back to what I have seen happen to the OEO boards-we lose the doers once these elements become involved in trying to do something.

Mr. WRIGHT. The whole goal and thrust of the civil rights movement from its inception, as I remember it, was to erase and eradicate the barriers that separate people by ancestry and to cause us to look upon people not for the color of their skin, or the origin of their surnames, but as people-all equal, all the same; each entitled to the same considerations and the same opportunities.

Do you feel that an order insistent upon representation of every ad hoc group that sets itself up may cause us to go counter to this and cause people to think of themselves not as Americans first, but as Mexican-Americans first, or Negro-Americans first, or Irish-Ameri

cans?

Mr. GIGOUX. In my opinion, yes.

Mr. WRIGHT. To that extent, is it not possible that the rigid requirements of this type may be flying directly counter to the great thrust of the American dream, which is that all men are men, and that all Americans are Americans, and entitled to be regarded for their individual worth?

Mr. GIGOUX. Yes; in relating this back to red tape, the example we get on how to fill this out, which goes out to the prospective public works project, is 13 pages long.

Mr. WRIGHT. You are referring to the affirmative action program of the EDA?

Mr. GIGOUX. Yes; for equal opportunity.

Mr. WRIGHT. We will make this document part of the record at this point.

(The document referred to appears in the appendix, beginning at page 647):

Mr. GIGOUX. We are adding another 13 pages onto our application which is already up to 200.

Mr. WRIGHT. Mr. D'Amico.

Mr. D'AMICO. In regard to the civil rights aspect, Mr. Chairman, may we offer as a package exhibit a group of papers including: One. "Economic Development Administration Civil Rights Fact Sheet";

Two," Model' Affirmative Action Program for Equal Employment Opportunity";

Three, "Excerpt from Title VI from Civil Rights Act of July 2, 1964";

Four, "Regulations of the U.S. Department of Commerce, Title 15, Part 8, Nondiscrimination in Federally Assisted Programs of the Department of Commerce-Effectuation of Title VI of the Civil Rights Act of 1964":

Five, "Regulations of the Office of Federal Contract Compliance. U.S. Department of Labor, Titie 41, Part 60-2, Affirmative Action Programs";

Six, "Regulations of Equal Employment Opportunity Commission, Title 29, Part 1607, Guidelines on Employee Section Procedures." Mr. WRIGHT. Without objection, all this material will be made a part of the record.

(The material referred to appears in the appendix beginning at page 646.)

Mr. WRIGHT. We have been talking heretofore about affirmative action program requirements upon the Economic Development Districts. You are required to develop an affirmative action program and submit it together with your recitation of how you have elicited representation from each of these organizations?

Mr. GIGOUX. Right.

Mr. WRIGHT. Now we are going to talk a little bit about the affirmative action program required by EDA of an applicant, which is something additional and different. But before we leave the first question, let me ask: Are the directors for your Economic Development District to be elected by the members of each of these ad hoc organizations, or are they to be appointed and, if so, by whom?

Mr. GIGOUX. Under the 7.06?

Mr. WRIGHT. Yes.

Mr. GIGOUX. I believe it says they will be the ones who appoint their representation.

Mr. WRIGHT. All right. Now, they mean any of the

Mr. GIGOUX. The consortium of the minority groups that are ascertained in this survey that you quoted.

Mr. WRIGHT. NO. 1, on page 4 of this document, requires you to give a listing of all political, civic, religious, fraternal, professional, and social organizations substantially representative of minority groups in the area served. How do you interpret the words "substantially representative?"

Mr. GIGOUX. I have no idea of what would constitute a substantial representation, whether it is a percentage of the total minority group or what, I have no idea.

Mr. WRIGHT. I have looked through this document, and have not found a definition or a clear statement with regard to that. It may exist, however, and perhaps later we may be able to ask representatives of the Economic Development Administration what is intended in that regard. But now may we go to the question of the affirmative action program required to be prepared and written by an applicant for a grant or a loan under the program?

Mr. GIGOUX. Under the guidelines a particular user of a facility financed under public works is required to sign form 503, which is an indication that he will conform with the Civil Rights Act. The county or city, also has to sign a 503, saying that any entity which comes into this industrial park-this is an example that is used-in the next 2 years must also sign the 503.

The form 612. which lists by category the type-whether it is professional, semiskilled, et cetera-lists by numbers the minorities who fill the training programs, and so forth. Then the latest affirmative

action program which requires the 13 pages to state how they are going to go about meeting these requirements.

I have been under the impression that an individual in this good country is innocent until proven guilty, but to me the affirmative action program is saying he is guilty. This is a classical example of additional red tape that he should not be required to fill out, because if he signs and says he will conform, and if he does not conform, the wage and hour group of the Employment Service, checking periodically, will pick it up. To me this should suffice without this other

exercise.

Mr. WRIGHT. In other words, you feel that by the simple affirmative declaration, swearing that he is not going to violate the law, it ought to be presumed that he is going to comply with the law! Mr. GIGOUX. In my opinion, yes.

Mr. WRIGHT. You do not see any reason why he ought to have to write a book to enlighten somebody as to the details of how he is going to comply with the law or why he ought to have to go beyond the requirements of the law?

Mr. GIGOUX. No, sir.

Mr. WRIGHT. Has this been an impediment in developing business loan applicants?

Mr. GIGOUX. The only one we have tried it out on, we did get; the Hanover Homes reluctantly did sign for the Walsenburg Industrial Park, but we had a national petroleum company that was planning a truck stop on the Interstate in Walsenburg, which is a redevelopment county, and he refused to sign it, and in essence, divorced himself then from the project, saying that we will build our truck stop at another location rather than conform and fill out this form.

He said the main reason is: We will lease this facility once it is constructed, and we cannot commit the individual who will be leasing it to the requirement.

So in answer to your question, yes, we have had one prospective approximately 25 man employer on a 24-hour service station for the truck stop on the Interstate, and there is no large service facility between Pueblo in fact, until you get to Santa Fe of this nature.

Mr. WRIGHT. This individual declined to locate it there because of these burdensome requirements?

Mr. GIGOUX. Yes, sir.

Mr. WRIGHT. Is this an example of a well intentioned attempt on the part of the administrators to carry out the intent of the Federal law but thwarting the development of an economic development program unintentionally by requiring so much paperwork?

Mr. GIGOUX. In my opinion, yes.

Mr. WRIGHT. Off the record. (Discussion off the record.)

(EDA submitted the following comments on Directive 7.06 and on the affirmative action program:)

Testimony concerning EDA Directives 7.04 and 7.06 at the Oversight Hearings of the Public Works Committee on June 23 may have created some misunderstandings in the minds of committee members.

For purposes of the record, we would like to clarify the following points:

1. At one point during the hearings, it was stated that the new Directive 7.06, which establishes minority representation requirements for EDA-assisted district

organizations, requires that all minority organizations in an area be inventoried and brought into the decision-making process.

7.06 requires that only those organizations which are "substantially representative" of the minority groups in an area shall be inventoried. Under the terms of 7.06, the district organization makes the determination as to what organizations are substantially representative, and submits the inventory to EDA for its review.

2. Testimony at the hearings indicated that a district organization has only a year to comply with the terms of 7.06.

Each district organization in existence at the time of the effective date of 7.06 is given 6 months in which to develop an adequate plan for meeting the minority representation requirements, and one year in which to actually implement its

plan.

3. One of the concerns indicated in testimony appeared to be that under the terms of 7.06, militant and radical groups would be allowed to take over an organization's membership.

As indicated above, 7.06 provides that the district organization shall provide minority groups which are "substantially representative" of the minority community with the opportunity to participate. EDA believes that this language precludes the possibility of a 'takeover' by radical groups which do not actually represent the minority community.

4. Another concern was that under the terms of 7.06. members of a district board would have to be removed in order to make 'room' for minority representatives.

7.06 clearly provides that minority representation may be accomplished "through natural turnover in the membership or expansion of the board and revision of the bylaws." There is no requirement or expectation that board members be removed to meet 7.06 requirements.

5. Testimony given at the hearings may have left the impression that the procedures established in 7.06 for the selection of minority representatives are totally inflexible.

7.06 provides that a district organization "may develop an alternate procedure if it believes that such a procedure will better achieve the minority representation requirements . . ." This language provides a district organization with sufficient flexibility in the application of 7.06 to meet any unique problems presented in its area.

At this point we would like to bring to the attention of the committee members that many of the questions raised concerning 7.06, including those listed above, have been answered and clarified in a "Questions and Answers" paper sent by Mr. Podesta to the EDA Regional Directors for dissemination to all district organizations.

6. At another point in the testimony, questions were raised with regard to the need for and the amount of time involved in preparing the forms required by EDA Directive 7.06, particularly the Affirmative Action Program.

Basically, there are two major equal opportunity forms required in the preparation of all applications for EDA assistance:

1. An assurance of compliance with Title VI of the Civil Rights Act of 1964, and

2. An assurance that the Job opportunities created will be made available to the unemployed and underemployed and minority groups.

In addition, certain recipients of business loan assistance and substantial beneficiaries of public works assistance are required to develop affirmative action programs. The definition and coverage of the affirmative action program concept was established in guidelines issued by OFCC in January, 1970 and published as 41 CFR. Part 60. In establishing its affirmative action program requirements, EDA has adopted these already established Federal guidelines.

Experience has shown us that, normally, not more than two days is required to develop an acceptable affirmative action program.

Mr. WRIGHT. Mr. Gigoux, the committee is appreciative of your coming. You are in a sort of middle position between the applicants or the community and the agency. We feel that you have been very helpful to the committee, and you should have a pretty good perspective from which to view the workings of this very vital program which was designed to help in a minimum amount of time the hard