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Then only to find out that the mayor has been told that they are going to get this project when I am told it will be another year before it will be approved.

Just what if we turned this around? If you came and asked us to approve the EDA Act, and we said, go and get another job because we are not going to extend the EDA Act. All of you, the 90 people working in Chicago in EDA in my State, if we told you to go get other jobs, you would discommode yourself; you may even move from the city, only to find out the day before you were here to testify we met in executive session and extended EDĂ for 2 years. What would you think of the Congress? What would you think of me as an individual Member! What would you think of this committee? You would say, am I living in America Is this a democratic society? Would you have a high regard for us?

Mr. FAGAN. Of course not, under those circumstances.

Mr. Gray. You have pulled worse than that on me many times, not once.

Mr. FAGAN. I can certainly understand the feeling that you had when you saw the information in the newspaper. I can only reiterate that we have no knowledge of how it got there, and the project was not released.

Mr. Gray. I am telling you, sir, that it is not only the West Frankfort project. I will be glad to show you lots of newspaper articles and lots of letters all following the same pattern.

As I have said, I have been one of the strong supporters of this program. I have sat here watching billions of dollars going to Appalachia, and I have the same type of coal mining people in my area, as they have in Appalachia. A hungry coal miner in southern Illinois is just as hungry as one in Tennessee or Pennsylvania or any place else. Instead of you people trying to take up the slack and approve more projects in those areas not covered by Appalachia, you have been lying dormant.

Is it a coincidence that these hearings on EDA started on the 22d of June, and that project was approved on the 21st of June, after I was being told it would be a year before it would even be considered?

Mr. Fagan. This reminds me of a story I heard last week, where I was being upbraided by a gentleman from Seattle who was saying that obviously a project that was pending in his area was not going to be approved because Governor Evans had been late in backing Mr. Nixon in the convention in 1968. There was nothing I could do to dissuade him of that. I did not really want to admit that maybe we are not politicians at all, but he was absolutely sure that that was the reason why the project was not going to be signed.

In terms of the West Frankfort project, the fact that the hearings were coming up had no bearing on it whatsoever. We happen to be testifying next week before some rather distinguished gentlemen in the Senate who have projects pending, and those projects are among the 35 that are sitting on the shelf and will not be funded until next year.

Mr. Gray. If you crank that in a computer, that application has been in 1,000 days. That approval happening on the day before the hearings started--and it has been pending now for 1,000 days, 3 years, but all of a sudden it is a meritorious project and approved.

I am glad to see it approved, and I do not care if Senator Percy gets all the credit all the time, as long as I can help my people. The point that I am trying to make here—and I hope it is indelible-is that I am tired of using the prestige of the Congress of the United States to quote an administration, in this case EDA, on a subject, and then find out that we are given misinformaion.

This is bad government. It is bad for you, it is bad for the future of the EDA, and also certainly, it is bad for the individuals such as Mr. Thompson and the others who give us wrong information. Politically, I could care less. After nine terms, if I have to ride my political stake on whether I get a project there or not, I am in bad shape to start with; so I could care less.

I am not here crying spilled milk or talking about politics, whether Senator Percy gets credit or not. I am talking about credibility.

I have undeniable, indisnutable evidence that I have just put in the record—and I have plenty more back in my files, if you want to look at them.

All I am asking: Are we going to continue on this same collision course of embarrassing this committee, embarrassing me as an individual Congressman who has been a friend of yours, and a friend of the program, or are we going to have some semblance of truth. When Mr. Thompson, who represents the EDA, tells us that our project is such and such, can we depend on that as being the gospel, or at least as close as he can get to the truth?

Certainly if there is going to be a 5-hour lead, then let us practice that, and let us be religious about it. If you are going to give the Senator advance notice, fine, give it to him, but if you are going to tell me that I am going to be notified the same day or the next day, whenever it is, I want to know that that is going to be the case; so I do not get caught lying to my people inadvertently back home, and that is what I am doing.

May I have come assurance?

Mr. Fagan. We will certainly make every effort to see that mistakes or what you will, such as this, will not occur again.

With your permission I would be very happy to have Mr. Dunne come down and work with your staff and go over the records of the various projects that have concerned you, as to what the problems have been, and perhaps to iron out any misunderstandings that have occurred in the past.

Mr. Gray. I would anpreciate that.

Mr. CLAUSEN. Mr. Chairman, I can more than appreciate the sensitivity of the question, particularly when it is your hometown. I think that this suggestion of Mr. Fagan of getting together with your staff is a good one. I do not know how best to approach this, but I do know this, that there are honest problems of communication within agencies. I think we have to agree to this. Second, from the standpoint of the policy question on announcements, I think you and I both agree, what is new? We have this.

Mr. GRAY. There is no doubt about it that during the Johnson administration we received advanced notice, but not a week before. I can assure you that if I did not get on the ball, when Senator Percy received notice, he might beat me to it. I am not quarreling with that. Mr. CLAUSEN. Part of our ingenuity as Members of Congress is to try to develop lines of communication of our own.

Within this past week, even with our own administration, but with other agencies, I had a similar situation. I had to bring to the attention of those handling the mechanical aspects of a given application, information that these people themselves should have found out.

It is the purpose of these hearings to find out about such situations. I think in many ways that there is a lot to be said. It would be nice, however, if we could get rid of this thing of having to be political. I think it would be very nice.

It is not our purpose, but it has been traditional. Each administration seems to play the game. It must have been very difficult for the fellows sitting down in the slot actually trying to carry out the policies.

I think maybe someday we can find ways and means of streamlining this kind of communication. I think what Mr. Fagan has suggested would be helpful, if you people could get together and try to work it out.

Mr. Gray. I am certainly amenable. However, this could not be a coincidence on 12 or 15 different occasions. That is all I am complaining about.

As I said, I am a strong supporter of the program, as you know. My people are the fourth largest taxpaying State in the Nation. We have had crumbs.

This is EDA action for the entire State of Illinois:
January 6, East St. Louis, $125,000 grant.

January 14, Greater Egypt Regional Planning and Development Commission, Carbondale, $46,489 grant.

January 26, West Side Chicago Development Program, $150,000 grant.

March 2, Mount Vernon, designated as district growth center.

March 18, National Insurance Association of Chicago, $151,000 grant.

April 5, Emil J. Paidar Co., to establish new management and account procedures, technical assistance study.

May 5, city of East St. Louis, $67,645 grant.
May 6, University of Chicago, $44,852 grant.
June 14, Pulaski-Alexander Development Corp., $40,000 grant.
June 16, Chicago Economic Development Corp., $75,000 grant.

Also June 16, Opportunities Industrialization Center of Illinois, $45,000 grant.

June 21, city of West Frankfort, $678,000 grant and $452,000 loan.

We are the fourth highest taxpaying State in the country, and in my district 17 of the counties have more than 6 percent unemployed, and between World War II and 1970, we have lost 250,000 people who have migrated from the area.

It is not a question of bonafide applications. I give you a town like Galatia with two coal mines just sitting there, but no water. That application has been in for 3 years. I went down with the mayor of Galatia to EDA. I went back 6 months ago; they keep saying we want to look at it.

There are all kinds of bonafide applications pending, yet here is a State that I say is sharing the burden of Appalachia, sharing the burden all over the country, yet all we get are crumbs.

Mr. Fagan. Mr. Chairman, as I am sure you are aware, we have to choose among many, many worthy and bonafide applicants all over the United States. We have some thousand designated areas, and we can really touch about only 300 of them in any 1 year. Perhaps this is just not your year. Your district over the course of years has had some 10 projects worth some $25 million.

Mr. Gray. You say you do not play politics, but over 50 projects were approved in the last 2 years of the Johnson administration, and there is only one in the 212 years of the Nixon administration. Is that coincidence ?

Mr. Fagan. I would suggest that your area come up with more and better projects as quickly as possible.

Mr. Gray. I just mentioned the Saline River has 4 billion tons, not million, of coal reserves. The Army Corps of Engineers, when figuring the benefit-to-cost ratio agreed that this project was highly feasible. This feasibility study took into consideration only the savings created by transporting the coal by barge rather than by rail. They did not take into consideration the savings which would be created for new industry.

I sent it over to your agency, asking for a little $200,000 study in order that we could expedite this project, save a full year for those people where unemployment benefits are running about 12 percent of the population, expedite it. That is the purpose of your agency, to upgrade the economy.

Here another Federal agency, the Army Corps of Engineers has said it is a good project, and you turn it down.

Name me a project in the United States where for $200,000 you could set up a project that could bring in something like $50 million a year in benefits. Name me one economically justified project in the country that would compare with the Saline River Basin project that you turned down.

Mr. Fagan. I am not familiar with the project.

Mr. Gray. That is what I mean. You are saying we ought to submit better projects. It is a question of when you sit down to cut up the pie, we represent the hard-core unemployment areas.

Mr. Podesta, who ran for Congress himself on a Republican ticket, knows we are being frozen out, and I am tired of it.

Mr. Fagan. I am sure there are some very good reasons why that project was turned down. We will be glad to supply them to you.

Mr. GRAY. I know what the excuses are. They are the standard: considering the overall requirements of the agency and the Government, yours just does not meet as high priority; considering the number of other projects, yours does not meet the criteria.

I know what the excuses are. There is a big difference between an excuse and a reason. There is no reason why that same area gets 50 projects under 2 years of the Johnson administration and only one project in 212 years of the Nixon administration. You just cannot equate that disparity except for the reasons I pointed out, that Mr. Podesta is freezing out southern Illinois, and I do not appreciate it.

Mr. Fagan. I am quite sure he will be anxious to discuss this with you when he returns.

Mr. GRAY. Are there any other questions or comments at all?
Mr. CLAUSEN. I do not think there is much left to say. [Laughter.]

Mr. Gray. I have served with you for 161/2 years and I do not go on these tangents often. I sat here and convinced myself that it was a mistake when the EDA officials failed to notify me the first time. The next time it occurred, I said again it's just another mistake. But, when it hit my own hometown on a project I have followed very closely, and in fact, requested a status report weekly, I realized it was no mistake. I have defended the President. I have said the Nixon policy, with this $2 billion deficit, compels the President to defer some of these projects. I took up for the President, and one of his agencies shoots me out of the saddle.

Mr. CLAUSEN. Sort of leaving this on a light note, Mr. Chairman, as you recall—after listening to this discussion, we could carry it on all day—you recall in the closing days of the hearings when we were discussing the three titles of our legislation, the EĎA, and the Appalachian Development Act, we all had a part in, more and more I am convinced that they should have taken my alternate proposal which was to increase the amount of the EDA program by $2 billion instead of the APW, in which case we could have had an accelerated program, making it all Appalachian.

Mr. GRAY. California is always way ahead.

Let me state for the record that our distinguished subcommittee chairman was called to the floor.

Mr. Fagan, I understand you have prepared testimony. If that is agreeable, we can recess for lunch, and Mr. Wright will be back at 2:30. He will be glad to hear you, I know, in a concise and deliberate manner.

Mr. CLAUSEN. I think the record should show we both missed a quorum call as we pinch-hit for our distinguished chairman.

Mr. GRAY. The subcommittee stands in recess until 2:30.

(Whereupon, at 1 p.m., the subcommittee was recessed, to reconvene at 2:30 p.m. the same day.)


Mr. Kluczynski. The hearing will come to order. The Subcommittee on Investigations and Oversight of the House Committee on Public Works will resume hearings on red tape. The first witness this afternoon will be Mr. Charles A. Fagan III, Deputy Assistant Secretary for Economic Development, U.S. Department of Commerce. Would you for the record, you have some associates with you, give their names to the reporter?

Mr. Fagan. Thank you, Mr. Chairman. I am accompanied this afternoon by Mr. Gerry Conroy, Deputy Chief Counsel for EDA, and by Mr. Thomas Dunne, special assistant to the Assistant Secretary.

Mr. KLUCZYNSKI. Mr. Fagan, may I ask if you have been sworn!
Mr. Fagan. Yes, I have.
Mr. KLUCZYNSKI. You may proceed as you desire.

Mr. Fagan. Thank you very much, Mr. Chairman. I have a statement which I would like to submit fur the record.

Mr. KLUCZYNSKI. You have a prepared statement?
Mr. FAGAN. Yes, sir, I do.

Mr. KLUCZYNSKI. Without objection, it will be made a part of the record in its entirety, and you may proceed as you wish, either summarize it or hit the high spots. The floor is yours.

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