RED PERSONNEL IN DEFENSE INDUSTRY

COMPETITION (IN WEAPONS

be two forms of defense facilities?the whollqu- -
and the privately owned, Government-supported 

3h other in the manufacture of competing weapone' 
mly service pride and sponsorship that played-a "i 
;e Air Force Thor and the Army Jupiter interment . .
Competition between the arsenal concept and the .19

merated within the Pentagon andin Washington 135,.

mended annually for defense am enormous and
1e charge of a munitions lobby. -
of commerce, municipal and State o?cials, labor H.1-

ns, the industries concerned and the GmignessnIen is.
reas all combine to exert pressures in favor O'f- 

A can. To anus ..
may be threatened with cancellation or cutback, tho' 

., WT or limits!) MILITARY: AND CIVILIAN
- ERSONNEL BY DEFENSE 
. .

ransom. JULY 21, 1959

Housn or REPRESENTATIVES,
:d 0mm INVESTIGATIONS on THE
onAnmnn Simmons,
. 'Washington, D0.
19. an, Hon.'F. Edward Hebert (chair-
transmittal Premise;

The'committee W: ein order. . .
seminlttee, this mormng?we have General Bradley
(?ail-lend gt the committee?s. "General Bradle will give
of'his know1edg1e and experience, as well as is present
.- .. mad the pompames ere resents. 
?mdley, Ithank you on eh'ali of myself and the committee

n. . .
his is advertised?sometimes at the expense or the . ..
gations and public opinion are mobilized, and comma
Calm, nonpartisan, and technical judgments become 
:on?ict-otE-interests' statutes involving retired-semis; 
narrow a frame for the pending investigation, as Mn;
3. So far, however, congressional discumionotr?ie' -
.on only upon this phase of the problem.
1. Douglas, of Illinois, for instance, has prod. .-.. 
ers who are employed by 88 companies that have 
panying statement by the Democratic Senator sheets
sly some sinister intent lay behind the facts.
Lt some of these of?cers have utilized their services:
{half or their employers. 
investigation will show that existing con?ict-ost- -.
set the retired service o?ieer. In the ?rst place, neg;
etirement?for other Government departments. with: - 
tirement pay. . 
In of the law, the Government 10% the servicesot;
tributions to make in the ?elds of administration, ht - 

:herskills.

RULE HELD DISORIMINATOBY

went-sweetie? . 
Jen Will Heel give you the oath, which We give every

?gu'ehnenly swear that" the testimdny you will give before this
. in the-matters now under consideration w?l be the truth,
?iqB-uthland nothing but the truth, so help you God 3 

. mm 1 do so solemnly swear. .
A in General Bradley, I. understand yen do have a prepared

-E,mmr- . .

,5 nm Anti. 1f the staMent, the mem-

com _ee wi no interrupt you until on have ?nished

'statement. Then they as]: you questihns if they" 90 de-

. 4 4: $131th general Ifounsel. The meni-
-I-- _rom In _m ii 1; -'11 I 

.. euthaus'ted thhir?questidhing. W1 ollow untal

or on THE ARMY omen n; BRADLEY

iscriminatiOn within the services. A retired BRAD - . . .
instance, istore sevefl?ely restricted in terms of hit; this $1 melrileligitg th: ?33911211131368 I
anArmy or Force 0 cer1301185 
)mmittee, therefore, can do the Nation a serviceif you are now gaCBd. lthink all of us realize this
.n perspective. It should recognize that the retired- -u -- an. The ansvver to this problem must be one which dill
1 part of a much better problem; that the rehab m??illterests Of'the Government (both by industry and Governance? that my?? e?ioers' on: the retired list whhnai'ea'e' a smile' ?mails 
'w -r si?llOWing. 011;? legislative process" "for 
the public interest. d' _erB many committees,? I have full faith in our committee
The committee stands adjourned until W. - - am sure that the legislation which rosults from these hoar-
?clock. . "if: wt the 'mterests of the Governinent and, at the same
at. 11:20 am, the subcommittee adjournedd any working with industry:

?ace, existing laws single out retired of?cers of the; 
s?but not retired members of the Reserve co? ..


:nlar ot?cer' is subject not only to the criminal code: 
punish those who conspire against the Grover-11ml
guilty of fraud, bribery, or deceit, He is also sub 
laws, regulations, and decisions of the Comptroller fl" 
hibitions are dated by the years or were passed de 5
rcumstances now ended. 
I

137

 

 

138 RETIRED PERSONNEL IN DEFENSE INDUSTRY

I am presently employed by the Bulova Watch Co. as chair-mm
the board of the watch company and as chairman of the board
the Bulova Research and Development Laboratories, a wholly-0 --
subsidiary. My total compensation from these two organizatidj .
$7 5,900 _a_year. In 1953 I went on the unassigned list and, folly 
that, I']01ned the Bulova Research and. Develo ment Laborato?i 
a salary a year. Following the dea of Mr. .Arde Bti . -
in March 1958, I was asked to become a director and chairman of I
board of the watch company. - -- 

During my active service I had been im ressed by the fact thu;
many of my friends died within 2 ears ailer retirement. I alga 
member an article which a . ears in the Saturday Evening 3?
several yearsago entitled ental Bends,? which explained Whig;
many people who had been active mentally all their lives had
cultyadjusting to a status of inactivity and consequently died 
soon aftiar retirement. I wanted to do something when I left 
duty which" would keep me mentally active and interested. I ch
job which, in my opinion, would continue to contribute to our ha . 
defense, because at that ti the Bulova Research and Develo
Laboratories, which had been established by Mr. Bulova at the t;
ning'jof the Korean "war, were engaged wholly in research and I
velopment on defense items. 

In 1930 to 1933, as a major and Chief of the "Weapons Section of 
Infantry School, I had 

occurred. This interest washeighten
that always needed betmr Weapons 1 .

During my entire military Career,.which began in 1911, I have-ht
had any ass1gmnent 'invOlvin'g' procurement of defense items. I "l a,
neverhadeny Pressure put ?upoh?m'e by any-011.9 staining to.
ting cf Contracts,?and??since my leavhig a?ctive dli'ty I have 
tempted to obtain a contract from anyone in the Defense Departli
or pr

?ured anyone for anyaeontract. In fact,'I manna h?dwg?h.
'1 . - . . 
realize that whenan of?cer-who has had'd'uties in connectlon -

prociirementdeave's "the service and goes with one, off the compailf.
been dealing-while on aetive duty there arises ..
question of "ethics and 'roper pretectien of'the Government,? -,
an o?icer who has ha procurement'duti?'gomg with any may: ..,
which does business with the Government presents a 
Government, to the com' any "with which he goes, and to hireself.? 
my opinion, noformer member Oi-th? {Goyernment should take-?n9.
vantage of his previous position to bring any in?uence on membs -,
the Defense .Department,vor any department of Government, 
contracts to thepompany with which? he is now a?iliated. .
I believe former members oflthe armed services. can contribn?h
great deal to industry. Many of them have had. extensive experiei:
1n administration, Organization,.and leadership._ Others have -.
scienti?c he of, value to __indn_stry. In qur? 
velopmen;t_ of new weapons and weapons systems, industry 
major role. Any knowledge ,?or ability held by former members 0 1I 
armed serviees_,may,be of great assistance in the more ra id day .i 
ment of any systems. For example, when'it comes time or Ad In 

-

?Emit?

ii?!

:5 ~93. it

 

PERSONNEL 1N INDUSTRY RETIRED PERSONNEL .139

lployed by the Bulova Watch Co. as chairman reti I think it would be a great mistake ifwe-prohibit
atch company and as chairman of the board . . skill and il?uiowlgd?gefto. some ?per?ana??g
resentmentsettles we we em 3: intensities. a ears-1953 I went onthe unassi ed list and, followj'; i. iamf?me; gffor the necessary rotection to the Govermnenta.

ilova Research and Deve' ment Laboratories .3 . - Time is another angle to this pro lem which involves the incentive
. year. Followmg the-dea of Mr. inrde Bale - dam to continue their careers. . When agrad-uate- of one ofour
asked to become a director and chairman of . dim}, academies ?nishes his compulsory duty of 3 or 4 years, he )3

1m any. . .. a' decision as ?to whether to resign or to make the servme 1118
I had been im ressed by the fact that:_. I It?d Witgametimes this is a very di?icult declmon. Most ofthese
died within 2 cars after "retirement. I also . 5 - - .men reaJize that if they remain in_ the semce they w1ll never
which a care in the Saturday Evening Pi L'ml?n abundance of goods, and 1f they want to make _money
.titled ental Bends,?_ which lained Wh - should get out and et into industry. However, thesemces do
ad been active mentally all their ives had . gag. advantages and incIucements which tend tokeep "most of these

status of inactivity and consequently died vg. . ?bers in the service. One of these inducements to stay on'is
t. I wanted. to do something when I left sag privilege. Many of them retire after 30 years? serV-
:ep me mentally active and interested. I chose - - at 3' com ratively early age. I feel that if there were some law
1ion, would continue to contribute to our nati?ij . it?, prob-i ited or unduly restricted their future employment 
hat time the Bulova Research and Develo a . 'a?d hays a tendency to make the of?cer decide to reSIgn much earlier

had been established bh _Mr. Bulova at the . not stay on until compulsory retirement.- In my eXpteiellcea the
war, were engaged __olly in research and-El. - _f?l?ess of an of?cer to his service increases? in proport10n to his
atoms. of service. I think you must give this facet of the problem

?i'cn-ycareful consideration in our ?nal decision; . .

.., consideration is that durmg an o?cer semce we
.. ?fmn ask him to take special courses to qualify for speclal Jobs. For
.. ?5 magpie; wesend o?icersto-schools to become more expert-1n summer?

a major and Chief of the -Weapons 8961;101:103 
hd worked very closely with the Infantry Boa__ 
etter mortars and automatic weapons and Iii?

in scienti?c and-technological advance'sas

est was _heightenedby the realization in coin? -i 1 Memories, law, .and-to-the Harvard Business School. compie-
ibetter weaponsasst-ti these courses permits the o?cer to render- more e?iclent semce
?litary Career, which began in 1911: I havens! ?13 .he-is on . active; duty. e-One of the inducements for an of?cer
nvolving 0f defense: itemS- _Ill' hig'hnefof these courses is that the. additional knowledge gaeneed'
re put upon?m'e by anyone ortaining. to the ?igbeot assistance. to him in obtaining clap1033:0811:t after he I'e-tll'BSa

115111109- 11137 193'th Waive lit? I have 1 - [in an Swee in restriction on his future employment would tend
ontract from anyone in the Defense Departtiieu I ?Emant?a these special courses which are sohelpful

foranyoontraot. In fachIWOuldn?t knowhc ?ihe?servicesn: MuIti-would a pear-that one of the situations which made 1t necessary

an ?new has-hisiiduties is have-these Bearings. is. that presented by any-retired- of?cer she-1.1%
he 36mm and, gOQS-Wligh 01.18, 9f the Goum? 3 sen Ziged inprOcurement, orprocurement policy,_taljzing a 1308115101!
dealmg'whlle 011 active duty there 9115.931. i?th gadgetry in which his knowledge and former. assoclationsma be

aproper'protection ofthq GOV?ernmenth I?f' i, Mlb?istance tohis employer. ,In suchyeases I feel that such anQo oer
ti ocurement "dutles ?01118 With any 60111]? have some restriction placed on any sales activity people
.

the Groverm .ientpresents {a problem-tog, hi the Defense Department. This might be accomplished by means
?111331137 119 goes: and to himself? [h slag: . Inmy. opinion most o?icers, because of their; highsense
ar'meznber should takes . e: "where not and .Would not violate this principl? anYhOW- But
13 P0531011. 1'0 any _m?uence 011 members-:1? 6' ?avor theserare cases in which this might not goYBrn, it mightbe

ant, 0_.r any department 0f Gpvernment, - #131119 here some time restriction. . .- .. . -. 
11y Whmh" he 13-119W a?hated. . . have. not discussed, all aspects of this matter. HOW-
emhers _oflthe armed services can contribute a have touched upon those which I think are the most important
-. Many of them have had extenswe expense! . we. onyo?mdnsidemtion.? .. .- -- . 
anization, and leadership. Others have 813809.117 you have studied all the





tibemf, may'I 'say that am sure that a_
0

ch: should be of value to industry. In 014113. 5315' . . .this. problem any legislation which you propose will be in
15P9113. and systems? Industry P13: .5 lit est interests of the Government and, at the same; time, notube
1?19ng ab?Ety 0 'W?ijuly restrictive on retired personnel. 1: . I - -
iof great 3331512341199 11.1 the. HIDE ralfnd Mr. HEBERT. Thank you very much, General Bradley.

Fer example, when?it comes time or Admln Mr. Courtney. 

 

 
     
 
    
  
     
   
  
  
  
  
  
 
   
 

30m? 'm DEFENSE INDUSTRY RETIRED PERSONNEL INDUSTRY 141
1airIIlan, the general has answered the 
Jmnlittee submitted, and I think it
ned it, that in addition tothe 1?galn' I111.
has, it would also appear that ere ares; 

towhom he contributes his time and. 1111.13; .

.sir.
111 generalize those, or would you read th 

0013mm (continuing gg. It would presently remove the effec?
Immet; as a result of the ange of duty.
9111161111, you have spoken of the subjecty of ethics as applied by re-

Io?eers, as a matter of personal discipline. DO you have any opinI-
do you have any recommendations .to the subcommittee con-
I mg a code of ethics which might be sug sted for observation by
- rather than the general code 0 ethics which applies Ito
. - tone in the Govermnent service? 
Ismael-11111.11.- Well, I would hope that the Of?cers would set

1e glad to read them into .
-- one code of ethica- without it being forced on them by some out-

:al will read them.

{twp
Lhave them. 3 E?s-gems to me that' in our train and In our devotion to our coiin-

.lresboilld have that feeling ourse ves, without it having been forced
4113;. That doesn?t mean that there may not. be violations OI it,

Sulova Watch Co. Foundation; the 2.1111 II gymcaseyou may want somel a1 restrictioli . 1. 
making; California Institute for Canoes I 1.1339 earns trying to" de?ne ?ethics; it 1s fer the corps oi O?icers,I
itution- of Washington; Committee on He. webs; as something they should establish themselves
ndation, Valley Forge; Grant Menumie?t' warmer. Asamatter? oI 
no for Jewish War Dead; the West 'r jeralIBs?DLsr. Yes, sir.:* . . .: .I1 1 . .
Columbia; and the President?s Cofnmi 311:. COURTNEY. Or, rather d1sE?llneofthecorps ofo?icers? 
ePhysically Handicapped. '11 re] BRADLEY It 1s very cult for me to understand how any
Mr. Courtney. rieould go back immediately after retiring and try. to do businem
Ith'eI." people that he has been working with. And I think most or
val, in the course of yoilr remarks your}~I .1 .111? out retired Of?cers feel exactly the same way.-

COURTNEY. I have no further questions. - 1
>criminal statutes?and I speak of the ?1-Qi'l- - 1&1erer Hess? II 1 =1er 
imposes a criminal penalty for violati _Hle Hess I just have a couple of. questions, Mr. Chairman, that I
it.

. toaskthegeneral. - 1:11
in turn has a special statute applieabi ?1111? are az?iretstar Ignore]; ,ar'eyou noti .I .
Marine o?icers, which calls for suspemit;

heralBsaDisr. s11? I 51:11
5r is engaged 1n selling to his departmeiit;

        
   
 
  

Iissoclation, national chapter; Boy S-

       
  
     
   
   
     
   
  
   
 
 
 
  
   
  
   
  
  
 
  
  
  
  
  
  
   
   
  
   
   
    
  
   
    
    



- :1 Hats. And as a ?ve-star general you are not on a named status?
?m1 BRAimYIeThai Wit 1 rshall, Gen
when a timel is en geste what Would era] MacArthur,
equate time tonguspend activaities by, a? rel ?375331;? Md- 0f 51510511515 that are ?ve Stud

-. 'e aresubjeet to call at any time And smile I went on the active
11,1 think I would have to base the anew. the has seen ?t to give me two jobs, one that lasted 11
ion of of?cers, the idea being that there v'v' and another one 13 months. Of course, he can give 'me a job
sonnel 1n the o?ice from which the maul-.1} lame today 01' any day he wants 130- :1 I

that 11?" [it we are subject to call at an tune; on any assignment of dut
awed to contact anyone bac in Mr. WHEBB :So that insofar as thly?s hearmg' is concerned, you. are ngl;

years Rn
n.mind . mserve. a?cerRetlmd 1 1 
principle more than an nge'lse. GmelralIMTBanY I am lint retired.-

hearings and?people ohav ve had
probably answer that better than Isl? $1133? I mean I?gfesciro?cer. 
MEDLEY. 5 all; 

cent, have never been contacted by; an" 

38811 in any procurement setupsz pres-g .F. :?a?lsgeflemi would; you mind naming the ?ve-star generals
THE {flyba- General BRADLEY. General Marshall General MacArthur, and my-
th high th :1 gain? Fli- 1nd: befofeihe resigned to run for I?resident, General Eisenhower.

iside meagiuige 06 m0? a ea?i?ntfursl- H1. HEs-s- Who were the admirals, lease?
erlng rage 3? ihmeral BRADLEY. The only two- wing, after. yesterday, Admiral
:?mgtt: and AdI?iI-sgl Halsey. Admiral Leahy and Admiral King were

1' Minn]? S. .7



      
    
  

 

 
  
  
 
 
  
  
 
 
  
   
  
    
   
 
 
  
 
  
 
 
   
   
 
 
 
 
 
 
  
 
   
  
 
  
  
  
 
 
  


1.42 m. DEFENSE INDUSTRY

Mr. HEss. Admiral King was also a ?ve-star admiral. 

General BRADLEY. Yes, sir. Also .. General Arnold was a ?ve-as
general in-thezAir Force. - i -. . .
MinHEss; Thatis all. 7 r2" .

Mr Mr. -Winstead. - . .. 

Mr General, on do think that it should be unify;
with all services, though, ether wezhave 2 or. 3 years as the- t'
limitation? - 

General BRADLEY. ?Yes, sir; I think it sh0uld be umform in, 7 
services. Whatever you gentlemen decide should be applled teas
services. Because that might be another step toward unl?catlon.

Mr. WINSTEAD. I a preclate your statement, that you were ass
that most of?cers-won live up to-the code of ethics. But still, as make
as we have, there might be a few possibilities that. a little 1e ati .-
along the line of 2 or 3 years might be wholesome in that ?el . 

1 .General Yes, sir. You hear all the talk about the reti .-
generals and retired admirals, but actually, probably one of then; 
valuable?the most valuable perSon can get, if theyxm 
somebody to go back to the Pentagom-wOuld be some captain 
major because he knows where all the papers are.

r. 2M1: WIESTEAD. That is ?ne, General. .That is all.

M. HBBERT. Mr. Fisher. 2 a? railway .. - 1; 

.Mr. General, there have bee some suggestions made ,tl; .
some eo 1e are inclined to overestimate. the in?uence orpower 
retimgogcers?o-called has-?beens; 5" - 2-: 
Would ou comment on how much power the might be able to; 
ercise-if tlirey' under-took to do it?? Hewmuch dgnger do you think: 2
actually involved in that? a; .-

Genera'l BRADIEY. As a matter ot factyl think: a2 lot: of poo la;
procurement would resent a former assdciate? con?ng around 
talking :bus'iness. I. would suspect'that in some cases they won 1.
domoreharmthangood. r- i 
amassed draw?the? line I. don?t knOW. "It depends?" on pexsonalj
Some people could- reliably: go "banana others would only meet ?El 
resentment 2and2~prd bly instead of getting a contract awould- 
theiloSsipf-a contract? a great'deal OEJ
Persona ityb'ig w: .3 si'??iznv as" 3w?:

Mr. FISHER. Well, your th' is; then, Ftha-t while it may; .
desirable to have somelimi?tation in terms :?of-2-or 3 are during w?i. 
a retiree could not engage in negotiating with the. 2' overmnent on ii
tracts that go to private industry, that 1t is equally important than? 
reserve the right to make use of the talents of'these tmineiexp?- 
enced o?icers who do ointo privatein? ustry? i 

General BRADLEY. es,sir. 

And I think the greatest make?s' because:
our'experlen-ce in administration and organization. - And-I -.
my own example?if I may take a minute, Mr. Chairman??

Please-do. 2. - --
--General BRADIEYJ Mr. Buldva built 11 the Bulova 'Watch Coils
about a dozen employees to. a. rather large organization of sedd .
thousand employees. He was a genius in the 'Watchmaking busin?j
He'never stopped-todra .aan oIganization chart. IEirery-bod ?went: 
him. It was a one?man organization. And he did a madam-5i: 

 
 



 
   


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144 RETIRED ransomn. m. DEFENSE .INDuser

General BRADLEY. Well, I don?t know whether you should pm . 
an of?cer from taking'a'job with some company with Which-kn]
done business. It is natural that they get to knoweach other.

The servicemen gets to know the eople in the industry: 1511.3:
to know their business, someWhat. g?he. man in thisindustry? .
know something about the "abilities and capabilities of the 
I can.? see Where it might be questiOnable. And -.I think tha?
up?,well, I would say that the .ethics'and the laws and the 1.
tions governing procurement in- most cases?and I would say 
tically all cases?would protect the interests of the 
the fact that he went with some company with which he has. 5
business is more or less. incidental, because he does business with" 
ofconi' aniessWas thinking about another. aspect of this. . 001nm.
lug1 the high standard of ethics aanongmilita o?icers, ?is theigr
ob Tgation on the Department of Defense .to thiesdisciplinar .a I
agaln'st a former o?icer or retired- o?icer whose conduct couljd. 
discredit onthe whole o?icer corps?? . 1 1" 

General BRADLEY. Well, certainly if it brought discredit, I .
the should be punished. -. .

point I thought you were ins-kin was: Should you or: 

of?cers going with any company. with ?ch they had done. 
while they were on active duty: That would be. rather sweep?

don?t know whether it would be neCessary or not.- It does raise it; 
tlon. I W111. grant you it raises?- a question as to whether Orv-m 
wasn?t. given the job .because? of Some favor he did the company'iri'

he was en active duty. - - . 
?Mr. HARDY. .That is the. question. Andi thought that Isen ..
your statement that you had observed situations which at least-=1 
the uestion of ethics on the part ofthe retired o?icer and I won
wheiiher under such a circumstance the service itsel 'had' a' resji
bility to the other o?icer's to take some sort-of disciplinary a?ctii .
General BRADLEY. Well, if there is any wrongdoing I would?
?Yes.? But there". is not necessarily any wrongdoing.- If you!
rove that he went with that company and got a job because" of; 
avor he had done that company '=-while on active uty,? certain! -
Should. be subject to disciplinary action. in:

Mr. HARDY. Well, of course, that is the real question. Andi
thing that prompted it had raised a similar-question the other.
with soineone who-was here, as to whether there had been an}! 
that a retired of?cer had been disciplined because of bad ethics,
I understood there had been no such case. 

Then that raised the question in my mind as to-whether
there had been-any reason for it or whether there had'just bi -
general policy to overlook it on the part. of the Defense Deitia'rt,

General I know of no speci?c violation, and kno-
no case where someone has been disciplined. .

a Then would you say that this present concern is 
out a basis? .
General BRADLEY. Not necessarily: I don?t happen to-know eta.
'2 Mr. HARDY. wen,- that is the (thing that sort of bothers me 1134:
bit. If there is a basis for the public concern over the abuse of-iif-
of ethics by retired personnel, why hasn?t the military found 11?

 

  
   
    
   
     
  
 
     
      
   
 
  
   
   
    
   
   
      
    
     
   
   
    
  
   
   
   
  
   
  
  
   
   
   
  
  
    
   
   
  
  
   
    
   
  
  
   
 

- PERSONNEL: DEFENSE INDUSTRY RETIRED PERSONNEL IN DEFENSE INDUSTRY 145
Well, I don?t know whether you should pro]

ng'a?gob "with'SOme company with which he? ..

a natural that they get to know each other.

ets to know the people in the industry. He; 

ess, Somewhat he man-in this-industry 5 - 

)ut the abilities and capabilities of the .-

. done something about it, themselves? Now, that is the question.
if. there is no such situation, then_the public 13 improperly
f. - If there 15, then it 15 a re?ection on the entire Depart-
of fense, in my judgment, because they. must have a responsi-
- ?to protect the ethical standards of their of?cer personnel, 1t
tl- seem to me. That was the pomt that I was to get you

i] might be questionable. A116. I think thati?ll. II 61115 on.

laI at the ethics and the laws Md?thei I W. Do you careto comment on that, General? 
curement most cases?and I would 'I?f?l BRADLEY. I thought I had given an answer. I sald I never
uld protecttheinterests of the Government - .. of any speci?c case where an o?icer had violated the ethics?

nt with some ?company with which he hash 
ess incidental, because he dees business With I

thinkin about another aspect of-this. Consi, 
rd of et 'cs among milita of?cers, "is-them 
apartment of Defense?to disciplina 
icer or retired o?cer whose conduct co *dEh i
.eo?icercorps?: 
FLESH, certainly if it brought discredit, I 51' 
. .1.- . '11- ?miir 
you were makingl-was: Should you-I . .
.ny company. with ich they had done. f"
active duty. That would be rather swee" 
it would be necessary :Or not. It does raise- as 
you it 'raises-a-question as to whetherforlf?g?i 
because of some favor he did the company-a --
. .. . -

something from a company, receiving a job because of some
i had done for the company, and consequently I know of no
- i ?lm has ever been disciplined for having done 1t. .
. Maybe this is a tempest 1n the teapot, Mr. Chairman.
. 'if"it isn?t a tempest in the teapot, then it must be that the De-
merit of Defense either has not paid close one attention to what
5 ion among its retired of?cers or 1t has dell erately overlooked
n?t know which, but at least it doesn?t leave a very healthy
.. . lion unless this whole-thing is just a lot. of smoke, wh1ch a lot of
Hare not inclined to believe. 
"3.51111 BRADLEY. Well, after collecting all the 1nformation before
. mhmittee, you might ?nd it necessary to 1nclude some time lag on
f. .
If that should be the case, General, then I begin to
. Questions about the performance of the top?ranking o?iclals 1n
.mpartment of Defense. Do you understand what I am talking
teams to me that if anybody should know, itD1s the Department
tense-of?cials. They ou ht to know what is gomg on among
former-of?cers and retir o?icers. And the haven?t seen any-
. f: . that would justify concern over ethical ormance: Appar-
least they have taken no action, so ma be we are Just off on
strong foot, Mr. Chairman. Maybe there 1sn?t anything to this
- that our colleague, Mr. Santangelo, raised on the ?oor.
I EIsn'Ea. Would the gentleman yield?
Yes. .
- - FISHER. I am wondering if there would be very much of an
of course, that is the real question. ARI wry-on, say, retired Members of Congress. I have known of _a
it i? had raised 3* similar question the 011135!" '{i'r'ho have resigned to take jobs in big industry because of their
73311319: as "to whether there had been any '1 ending talents, demonstrated during the course of debates and
had been disciplined 133051150 015 had Bthi??i . eration of legislation. They go into big busmess and get good
.d beenno 3110119359- . r. not'necessarily to come back and in?uence the Government, al-
:he vqu95ti?11 in .my mind asv-to Whether ?301' Ih there might be instances where they would be involved 1n cases
reason for it 301' whether there had-just ?h - "z?is'ions that would deal with the Government. . 
rlook it 0J1 the part Of the Defense De 35-2 I we have the problem running not only through the milltary re-
I know 0f no Speci?c violation, and kn?. but retired Congressmen, also, and people in other dl??erent
has been disciplined. rI- i, I I, I Iries.
would you say that this present concern '3 :0 1' hyou think that would be somewhat analogous? 
- .Ieral BRADLEY. I have tried to con?ne my remarks to ex-servme
. {1-39 or retired service peo lo. I realize that there 13 before your
I- aittee a big problem, ut I do not feel quali?ed to discuss 1t.
., fill". HARDY. I the gentleman will permit? And I have the
. Mr. Chairman.

is the question. And?I thought that Irsenz 
you had observed situations which at least? 
I on the part of-the retired o?icer; snail-woes! 
a circumstance the service itself'ha'd a; 
licers to takeIsome sortefdisciplinary antit- 
Well, if there ?is any wrongdoing Went! .
5' not necessarily any wrongdoing. If you
with that company and got a jOb because of 
hat oompany=wh11e on active duty, certaiz'I 
.isciplinary action. . -

Not I don?t hap en to?know; of 
that is the thing that sort '0 bothers me a! .-
is for the public concern over the abuse of: I 
personnel, why hasn?t the military found if .

 

146 RETIRED PERSONNEL IN DEFENSE. INDUSTRY

that particular point, would be cases,
parable cases. But there is this distinction, however. We in the- I
- ss do not have any disci ?nary rocedure that we can apply--
ormer colleague,-wh11e the efense partment does. 

Mr. FISH-ER. I think that is an appropriate observation in at

tion with my-statement. 

Mr. HEBERT. Are you ?nished, Mr. Hardy?

Mr. HARDY. Yes: 7 Thank you..-

a Mr. IHEBERT. =Well, contin that? line of thinkin I thin
would be Well to point out that tie Congress itself does ave ?at-p
bition on its former Members, in that a former Member is-?nj
lowed to lobby on the ?oor of Congress, Because a Member of 1"
gress has lifetime privileges [to-the ?oor of the House, it is the 
of the Hones that ?a former Member of Congress cannot en_" 
lobbying activities on the ?oor of the House. - 

. In other words, the Member? of Congress has the right to elite 
?oor at any time during his lifetime, and, of course, he couldstil 
certain Members of Congresson pending- legislation. Therefo? 
is prohibited from lobbying, although-of- course, there is not? 
plinary action and no penalty. But the rule of ethics there, assi? 
the Member of Congress is concerned, is that he is prohibited-in:
cussing pending legislation on the ?oor of the House.

In further connection with what Mr. Hardy has raised?he use.
expression of a tempest in a teapot. I reemphasize that it 
responsibility of this committee to make a determination fact that this question is a-tempest in a teapot or whethet 
not. It is our responsibility to determine Whether that-statem?
true or not. 

1 Now, of course, as far as a. tempest in a tealipt 's concerned,
as far as the public concern is involved, I thin that 
?ected in the vote on the Santangelo amendment, which at th'ai -
would have been adopted by the House if it had not been statedr .
this committee would explore this whole su?bject.

So that, then, re?ects itself on the Congress itself, 
occasion, by one vote, failed to adopt the Santangelo amendment 1 a
would have prohibited the ayment of any moneys to any ?rm, -
tractor, or corporation whic had on its payroll a retire gene: .
a retired adnnral within the last 5 years. The ?nal vote was
to 145.

The very closeness of that indicates that the Congres itself was
much concerned. And we must assume that the concern of the! 
gress re?ected the concern of the constituency of each individual i .
gressman, each of the 127 who did-vote in favor of that all-swee I
and all-encompassing amendment.

Now,,General, you are on active duty. What is your salary. 
retired?not a retlred, but as a general, of ?ve-star rank?

General BRADLEY. $20,543 ayear.

Mr. HEBERT. Do you receive any other perquisites or emolun
with that o?ice? 

General BRADLEY. No, sir. That is what I receive from the: 
Government.

Mr. HERERT. But you do have other?+-

 

148 RETIRED PERSONNELIN DEFENSE INDUSTRY

General BRADLEY. That is hard to de?ne and draw a speci?c
as to what is selling and what isn?t. 

What I had in mind in my statement was the actual discussi . .,
a speci?c contract?procurement, research, or whatever the 
happens to be.' You go-beyond that de?nit1on and I wouldn?t be -
to de?ne it. =21

Mr. HEBERT. You see the problem that confronts us?

General BRADLEY. Yes, s' .

Mr. HERERT. The word ?selling? is the key.

Now, you would say, for instance, a does out?we call it a r: .
out salesman on automobiles or real-estate, where the salesman act .
has the order book in-his-hand or the actual- contract-for th? 
in his hand and actually signs the contract. Would you sayFth .
alone would be the salesman, or would you also say that the indi?t
who assisted him, or if an individual did assist him, was also-a? .
man in" the articular transaction, of that nature? 

General BRADLEY. Well, certainly if the assistant who went 1;
with him extolled the good points of the car, and so on, I would
he certainly helped make the sale.

Mr. HERERT. -- He wouldbe-a salesman 

General BRADLEY. Yes, sir.

Mr. Now, Secretary Gates has testi?ed that in his op'ri
the No. 1 salesman of the company was the president and the-g.
salesman was the chairman of the board. You are chairman-ea 
board of Bulova. Do you consider yourself a salesman for Balsa

General BRADLEY. Well, maybe for watches, but not for defense,

Mr. HERERT. In that connection, the issue has been brought-ins
we may as well clear it up now, because the inference has cert: 
been here?that post exchanges and ships service stores handle; 
one type of watch, which of course they do not. We know it.? .
have you ever attempted to in?uence in any manner, shape, orlf-h
directly or .- 

General BRADLEY. Mr. Chairman, I am glad you brought that}
because the paper always prints the accusation and then, one:
the withdrawal of it isn?t news. With all due respect to our-sit
pa er people. 

ut after that came out, I went and found out?I never 
before?how our sales were made to post exchanges. And the Sal 
post exchanges are made through wholesalers around inithe va 
areas. For this area it is a wholesaler in Baltimore or Philadel-
I have forgotten which?I asked the question of our sales depa: 
but I have forgotten. Some wholesaler, some wholesale jewel" It.
makes the sales to the post exchanges in this country. And 
of the restriction on the price of watches that can be sold -
exchan es in this country, our sales in the Uni-ted States are g?l .
reducetf

Our head salesman tells me that the watch that has the biggest-g 
in the exchanges in the Washington area is one I hadn?t heard:
Whether or not anybody ut the pressure on them or not I don?t kl 
Certainly it wasn?t Bra ey, and it is not Bulova. Because, as I: v;
I didn?t know until this question came up how PX sales were made.
never tried to sell watches, either, for that matter. We have sales- 

 

   
  
   
 
   
 
  
   
 
   
     
  
  
    
 
 
  
    
    
  
   
 
   
  
  
   
   
   
    
 
 
 
 
   
  
 
 
   
     
  
   
   
    
    
  
  
  
 
 
   
  
   
  
     
   
  
 
  
  
 
 
  
 
  

PERSONNEL IN DEFENSE INDUSTRY
RETIRED PERSONNEL IN DEFENSE INDUSTRY 149
E. That is hard to de?ne and draw a speci?c 

gand what isn?t. 'but if somebody comes around to me and is interested

- . - l?lltateme.? was the actual d1scu33' --, ne I W111 put him In touch w1th the right person.
11m 1n my 11 1? General, I think you have made a very refreshing

1?procurement, research, or whatever the my .- 3. a 
on go beyond that de?nitlon and I wouldn?t be You sa1d you wouldn even know how to negotiate a

see the problem that confronts us? I. . ,1 BRADLEY- No, Sir; I wouldn?t. 

I. Yes, sir. Well, that 1s refreshmg, because 1n another area which
word ?selling? is the key. 'ttee is developing we haven?t heard anybody yet in un1iorm
1 say for instance, a close out??-we call it a . ?uf uniform, a civilian, who would admlt he dldn?t'l?lqw how
tomo iles or real estate, where the salesman ecu. 1d negot1ate a contract. rYet the record _13.replete Withthe
kin his-hand orxthe actual- contract-ior-the}. might having been the subject of loss of millions and millions
3tually signs the contract. Would you I5. mg} because of fa11ure_e1ther not to know how to negotiate the
salesman, or would you also say that the indjti. 1311? failing to negotlate 1t properly. Nobody has sa1d they
or iianindividual did assist him, was alsoaa HILowhowto.-= - . . w; .. 
lar transaction, of that nature? . Well, Mr. Chairman, I. gut 1n my statement ?Ihad
E. Well, certainly if the assistant who went-a}. Fleet! ion3procul?iement duty. If ha Would have tried to
the good points of the car, and so on, I would . But never havin had those dut1es,I d1dn9tth1nk1t was neces-
make the sale. take the time to earn how-tognegotiate a contract.? Eu 
wouldbeasalesman? .- 11211179 lawyers who check them for us, Weihave salesmen "who
Yes, sir. . ?martinis;- I- say?I wouldn?t knew how .toldoit; Bnt?I don?t
Secretary Gates has testi?ed that in his on.? 1- :thht is any re?ection 911? my as ano?icer 1n the ?Ai'my,
1 of the company was the president-and the-_ (1111398: - i-W 3: 
chairman of the board. You are - _the -'8Xl31'8:0111'-
Do you consider yourself a salesman for Balbviil . .sctivities'of the Army o?icer, partlcularly in. the higher. echelon,
r. Well, maybe for watches, but not for?defen?i. 6&qu upon _to attend many part1es'of a'difierent saturate?-
that connection, the issue has been brought in; . - thenngs?and you have attended them 1n
ear it uP now, because the inference has cert I 6317+, 1? any time you ever any .conversatlon 01? 
)st exchanges and ships service "stores handle; -
which of course they do not. We knew it: I
mpted to in?uence in any manner, shape, or -
Y3: Mr. Chairman, I am glad you brought. the
always prints the accusation and then, of cg -,
it isn?t news. With all due respect to our-"ii-

. nonversatiOn concerningethe pr?ocurement; (if eontract's?fatwtliese
13.3. I
grit] The actual negotiation-of'a-contract? "Its-a i- .
I?mean'actual contracts, or- discussing what the needs
f?vernme?nt happened'to beat the time?" Or sellin little
tie gan??lgt?jood will and good?relatiOns- at that time? sing the
'1 party or the golf course-hr a'little customer?gin as a vehicle?-
I am- talking about the game and not, the liquid,
would go in hand?to promote the product of an indi?
.gbm??any with themilitai?y? 

r- - :i?al RADLEE. - No, sir; I have never seen anything taking place
2 I thought was the "negotiation of a contract or-Jreally
A .g {germs or'nressuring anyone to enter into a contract Parties
fl Flhiarilysocia . Certainly ou can?t prohibit people from hold?
- nal contacts. Certainl ~i they use that occasion to get some
. the corner and sell im something, that would be unusual.
.. . avenever seen it. 

- HEBERT. That would be unusual for the military, but not un-
. - mthe accepted American practice of doing business.

J11 Hera} BRADLEE. Well, I haven?t been in business too long, sir.
5 They don?t invite you to any more parties since you
-. .. Bulova? 

,phfgiAdmiral Rickover in his testimony before this committee
. . acted- a system whereby every 6 months a report should be made
.- thaoi?cer 1nv1ted to parties or a re ort on who called on the o?cer
u. :llte Pentagon. What do you thin of such a suggestion?

came out, I went and found out?I never ii 
ales were made to post exchanges And the "sa' . ,1
a made throu wholesalers around Who esaler in Baltimore or Philadelq 
rhich?I asked the question of our sales departi- 
an. Some wholesaler, some wholesale jewel?;

the post exchanges in this country. And. -
)11 the price of' watches that can be sold 1111-,th
country, our sales in the United States are gr 

.an tells me that the watch that has the biggest
in the Washington area is one I hadn?t "eaigd
ybody ut the pressure on them or not I don?t 
Brad ey, and it is not Bulova. Because, as l.

I this question came up how PX sales were marl
watches, either, for that matter. We have sale

  



 

 
 
 
 

1-50 RETIRED pussomn IN INDUSTRY

 
 
  

General BRADLEY. I think you would have to break that:
two parts. Certainly, it woul

  
      

  
  
  

 

don .

be very; di?icult to keep a list .

the people you talk to at a party. In-fact, the best answer, to
i? woul be just not go toany more. - 

  
   
  
   
  
  

  
 

  

at would he impracticable and impossible, to keel!
of all the poo 
you meet and)

 

      

ought of it. It wouldnig] 

ecause most people after they are retired don?t qaf- .-

. They have been there too much get

- . did go around, they would be gj ..

General ot necessarily. As I say, I 0 into thed? 
about once a 05

weak, to in of?ce. I don?t see anyb y_ else. Iliavu
Invited around :to see other-people, but
ut. -

I don?t go. I - go into-myWouldn?t mind .-reporti-ng those Visits, although they havens 
.do?with my businessconneot?ions. sWe sometimes. go around"; 

I suppose to see our friends. Somebody from out of town might .
into the Pentagomand say?E?hello to- his 01 associates, without sing:
.ofedoingrany- usiness. with-them. But. he could report- that-a1} 
1f-that-isany safeguard. nnzj? 1
- . .ersttuan.rsMr.?Chairman. .. 3.: 

MP. . M:Winstead:w: .. w? 

Mr ;Wmsm13. asman :is contacted andtheg, 
sub 'ect matter comes up??I ow, we all know we go to these?pg
And I can?t-takeaway from ex-M ngress .

 
  
   

    

   
 
 
  
  

     
 
  
 

 
  
 
 
  

    
  
 

  
 
  

 
 
 

   
  
   
 
 
   
 

   
    
  
  

  

. - er HADLEY. I - see no objection ?to. it. It would havse-I'h

I aboveboa-?I-d, anywa . tshould be. - . . . 
r. WINSTEAD. ure. And you couldn?t reportevexy little 

. but you could re rt the main contacts. And, of course, contapti?
und to be ma with individuals. And I am wondemng?if, tbs.-

    
  
   

  
  

    
 
 
 

   
 
 
  

. sto me some type ofre ort m1 
some. I don?t lrnow how We are going to at is prob 
do have some contacts, Mr. airman, at is concernin all: 9"
just a little bit. I don?t know how you would handle it. Bgut its; 

ntaots with the various of?cers -
procurement agency might be wholesome. I am just wondering?I 

       

   
  

  
  
 
 
 
 

    
 
 

BRADLEY. I 
. port. . Because, as I say, if he goes In to contact someone on
it should be aboveboardand there shouldn?t be
hesitate to report, if that is what is wanted.

 
  
 
 
 
  
    
 
 
 
 
 
  

 
    
  
 
 
  
   
 
 
 
   
   
   
   
 
  
  
  
   
 
  
 
    
 
 
 
 
  
 
 
  
   
  
 
 
  
 
 
 
   
    
  
   
 
 
  
  





152 RETIRED PERSONNEL 1N DEFENSE INDUSTRY

compmy that would do that?if they would, maybe we should
something to keep it from happening?by some time lag when th' 
couldn?t go back In there and function in a sales capacity.

Mr. HEBERT. Now, you mention a time lag. By suggesting a tiQJ
lag or even any corrective legislation?I wanted to di??erentia??
between prohibitive legislation and corrective legislation.

Is it your feelin that such corrective legislation, laying down -
tain rules and guic?aposts along the road, would be helpful? Beca 
even if this'may-be a tempest in a? tea, t, the fact remains that so '34
people are concerned about the possibilities of abuse and anticipate?
?abuse. Do yen think it proper that legislation, corrective legislatio 
or legislation of the nature which I have described, should be enaetgzg'n
for the protection of the of?cer and the Government, both? 

General BRADLEY. Yes, sir. I realize that you have a problem, ml
think it shOuId be cerrected, and as on stated earlier, if there-3%
127 Members, of'Congress' that have eir doubts about _whethei;.j.og
not this code ofLe-thics is Working, then we had better do sometht:
toenforoeit. - 
So I think that Some legislation is clearly indicated. What it 
I frankly iden?t know. .But as I stated earlier, I am- sure thalij?q'i
gentlemen, ?'"after ?bdying this and getting all the infermatio?jyn:
can, Will propese something-which Will "-aCCOmplish: the purpose-"t 
answer this question. 1 -3

?Mr. H??BERTf?Of'cburse we recognise that. .We are? called um,
be Solomons, though many of us. admit that we have the wiscliiui? .y
Solomon. 

,vav is the chance to. demenstrat?e, I'think', that we do, with what: 
emeupinthisparticular'inquiss"General" BRADLEY. wen, I think, sir, the retired lggu
the ones I have talked ?to, .were very pleased when this mattei-ke 
referred to domin'ittm.? Because you usually come up 
answer on a committee. Butwhen you try to adopt somethingi'.
the ?oor-TWithout "hearings, you Sometimes do something hurried

which'may haveso'me it. But after heal-in these questjif 
before a committee?I a'm not'saying that you are golomons. Neil?,
of us are. ,But I have full faith in your coming up with sometli - -

 

  
   
    
 

which is practical and Will solve the problem. 

Mr, HEBEBT I am very glad to hear you say that, because the SPQII 
men-r?the accepted spokesmen for the retired military?andI .3111; .
ferring to service magazines and service organizations?have segiitl
to have anOther idea, from what I have read of their editorial as I.
ment, that we are here to crucify the retired of?cer and conduct -
kind of a spectacular circus maximus. Of course, that is not the inten
tion of the committee; and, despite our protestations along those l?t 
there are some undoubtedly who feel other than you feel and 
spreading that word among their people; and I am very glad to it .
you, a man of your stature and reputation, express yourself alt
that line. 

Any further questions from members of the committee?

Mr. HARDY. I have one more, Mr. Chairman.

Mr. I-IEDERT. Yes.

Mr. HARDY. General, just to clear up, which may possibly be,
incomplete observation: In connection with your statement that 3'

 

     
     
   
  
  
   
  
  
    
  
  
  
   
  
    
  
    
   
  
 
 
 
   
    
  
  
  
 
  
   
 
    
  
  
  
  
 
  
   
  
   
   
  
    
  
   
   
   
   
 
  
  
     
  
  
 
  
   
    

PERSONNEL IN DEFENSE INDUSTRY RETIRED PERSONNEL IN DEFENSE INDUSTRY 153

-. . :tknow how to negot1ate aocontract?and I believe you said you
. or had a procurement. assignment; but, nevertheless, you have
exercise considerable Judgment or take part in at least policy
.. .5 With respect to rocurement, haven?t you?

. - BRADLEY. Wel pohcy matters, yes. As Chief of Staff of

1.
11 1

Elli-?g That isthai'i?aI wlas thinking about.

ral. . .Y- 06 . in 37?1 suppose I had somethin to d.
the of pohcy. But as far as letting contractgto an;
. company, I never made any decision. You have people in
.2. ?w?g pectlon and your ass1stant secretary for procurement
Ii 3 - -
?1h8?1gm staff, I never dealt w1th any speci?c-company or on

do that?if they would, maybe we shoukiv
from happening?by some time lag when .
more and function in a sales capacity. 
you mention a time lag. By suggesting-3,41 
rrective legislation?I wanted to di?emm 
.egislation and corrective legislation. 
hat such corrective legislation, laying down .
osts along the road, would be helpful? Be;-
tempest 1n a" teapot, the fact remains that'- "g .
about the possibllities of abuse and antici i
it proper that legislation, corrective legis 
.ature which I have described, should teens
the of?cer and the Government, both?
Yes, sir. I realize that yogid have a prfo?blem, 
:orrected, and as on stat" earlier, i ?ieilgr' . Y.- Did you ever in that?ca act 11 . . .
~sumeammimm?mwm
:s 1s working, then we had better do_soniet_._ com any? par?

etal RADLEY- I don?t remember ever 
a: meedt?iany particular company. avmg made a decision

. HA- nor. 0 our partici ation with . .
polio lovely respect to procurement was
.- :i'al ming?llfes, sir.
. HARD . Y. reason I raised that was because in ta" -
referred to a 1:36qu a?cTIh who has been 
or procuremen wanted to be sure
mm 2 Well, the reasonIadded ?or rocurement 1' 
73"? because the procurement o?icer, thepactual mcgrimcgiit
,1a-usually a lower-rankmg of?cer that passes on at contract,
Ihere might be a two? or three-star admiral or general who would
if. - ?huge of overall procurement who would set the policy but
. . [Lt go over each contract. That is why I included ?procureinent
-- [Mmhzerhighr13Md take 1care pf a two- or three-star admiral

over a at
I mutually et iflto the details immanent Pmple? but Wh"
. at actually was thinking was somethin th 
- rmorein the nature th g_ a ap-
pus havetobe made nogv. type 0f weapons systems In 
331"? pompeting 35731391135 prOposed com tin com 
that are made at a very high legal w1gth reelilaeldtetottlliant
. .: .. tich W111 be and that as a consequence affects the
.. mat on as to Who the prune contractor would be. That is under

Rim arrangement you have now, I believe. Wouldn?t that be

in ..-, a1 BRADLEY. Well, it mi ht result For 

. . exam 1e If a -
IS psually some big aircraft company?is giiren the poli?e
-9 . Ih?at' eve op a certam weapon or a weapons system, the chances
"t1? en 1t comes tune to ct the contract you will let it there
se- ey have all_the knowledge on that particular one. 

. .??HAan 32'. That IS the thing at I was thinking abouteous eve 0 men 

m: In connection with your stgtement that commots 30mg on, and a de-



rne legislation is clearly indicated. Whip;
v. 'But as I stated ami Surei'?th? if;
lying this and: getting all the informaticgl?
Which? .

nurse'we rocOgniZe that. .We'arei-calleii - h?
many. of us. admit that we have" thelwi? ..

o. think, that we do, with Wit 3
ular in'quir?yJ. 1
Well, think, sir, the?re?redfof?cers,? pg?
ed,__to, were very pleased when this matter!
tee.? Because you usually come up Withi'a-
But when you. try. to adept someti? -
armgs, you Sometimes .do something 1qu 
a errorsinit.T But after? ?hearin :?these?que i-
-I am not saying that you "are olomonsuj," x;
Ire full faithjn your coming up with eerie--
1 will solve the problems 

rery glad to hear you say that, because the s; 
noke'smen for the retired milltary?and I
gazines and service 
from what I have read of their editori'_j_? 
to crucify the retired o?icer and conduc'? 
circus maxnnus. Of course, that is not thei --
and, despite our protestations alon those 5 
ubtedly who feel other than you gee} ail"!
among their people; and I am very 
stature and reputation, express yourself"

me from members of the committee?
one more, Mr. Chalrman.

 

I56 RETIRED PERSONNEL IN DEFENSE INDUSTRY

Mr. Chairman, have the copy of the paper here. You have}; .
stats of the advertisement before you.

I would ask that the advertisement be included in the report .uf
proceeding, Mr. Chairman. i" 

Mr.- I-IEDERT. It will be included. .

(The advertisement referred to is as follows 

MEITABY 

To advise?cemsel?report to high-level management on mili
they apply to long-range development planning. Must be, 
degree of speaking and writing ability. Military background with rang.?
Force colonel or Navy captain or higher, Experience on Jomt Stat! of ?it
Chiefs of Staff desirable. Mail Idsum? tb? 
Mr. J. A. Swanson
._Employment Of?ce .
North American Aviation, Inc.
4300 East Fifth Avenue
Columbus, Ohio

COURTNEY. j_ Now, Mr. Yahn, you have identi?ed ours 
the vice president in- charge of the I . ing?it
proper name, Columbus div1sion? 

Mr. YAHN. Columbus division yes, sir. .

Mr. COURTNEY. ?Just brie?y, so we may identify and 
what is going on, what is the nature of the work carried on?; 
Columbus div1sion 3 .1, - 

Mr.- YARN. At the Columbus division of North American?. 
en ged in buildin aircraft for the Navy.

. COURTNEY. ow, are you an independent division?

Mr. YARN. No, sir; we are not. We are part of North Am
Aviation, Inc. 

Mr. COURTNEY. Well, do you operate independently of 131193;? 
company in the performance of the contracts that you have.
descri-

Mr. YARN. In performance of the contract, we do operate ass:
arate integrated unit.

Mr. COURTNEY. As a separate unit?

Mr. YAHN. Yes, sir.

Mr. COURTNEY. But integrated with the whole company 3

Mr. YARN. That is right.

Mr. COURTNEY. And would the peo le who might be ex ected; j.

Spond to the advertisement which we have just read into redder
operating out of the Columbus division 3 .

Mr. YAHN. Yes, sir; they would. They would be operatingen 
out of the Columbus division. .

Mr. COURTNEY. As a separate unit, do you then bid upon -
negotiate or obtain contracts within the competence and capabilii-r . 
your plant? i

Mr. YAHN. Yes, sir; we do. We have our own research anddeg' . "g
ment group. We do submit proposals and bids and our s1gnatf, 
these proposals and the signature of contracts are, of course, an 
of corporate authorization.

Mr. COURTNEY. Now, Mr. Yahn, you were the vice president at
time this advertisement was inserted on May 7, 1959, were you not

Mr. YAHN. No, sir. I was assistant general mana er at that? 

I became vice president and general manager June 5, believe.

 

  
 
    
    

PERSONNEL DEFENSE Barman-ransomn mnusrsv 157
have the copy of the paper here. You have d3 ll . this advertisement.
:ement before you. . - . JEWMTE ys owmg

3:13: 61'inth be mcluded 1n the report "i So you are acquamted With the circumstances lead-
ill be included. the? advertisement and the purpose of the advertisement?

- . 'atiscorrect; es sir. . 
at referred to 18 as follows.) And Mr. Sivanson, whose name a pears 1n the ad-
. 5113331111; then, was under your supervision an still 1s; is that

      
 
 
  
 
 
 
   
   
    
  
 
 
 
  
   
  
 
 
  
    
     
 
    
 
 
    
  
  
   
   
   
  
   
  
  
   
   
  
  
 
 
 

MILITARY 

port to- high-level management on military ma
development planning. - Must be personable :Wi?i"
writing ability. Military background with . .. 
iptain or higher. Xperience on Join-t Ital! of tiny"
Mail resume to-- 
Mr. J. A, Swanson

Employment Of?ce .
North American Aviation, Inc.

- 4300 East Fifth Avenue

Columbus, Ohio

we Mn Yahm-- you have identi?ed 
Charge of the Columbu'ei?am I 53, 1mg 
us division? 
bus division yes, Sir- 
3t brie?y, so we may identify and. midi?
rat is the nature of the work carried 013- I.

- tis true' es sir. 
am And he; his acting for and in the name of this
. the time the advertisement was inserted, on May 7 3
That is correct.
E?mm Now, I believe?you seem to have a prepared state-
t, Mr. Yahn; dqyou? .. .
:1 ,ij. No, em; I do not, Mr. Courtney. We are here to answer
if mutant-1'13 that-the comm1ttee may have, and in response to your-
. at that we came here. 
COURTNEY I noticed a package you have. I don knows??
3 Yam You have asked for certain data and we have brought-

. Now, the ?rst question I wanted to ask, Mr. Yahn,
Sihee this appears to be an advertisement for ein?gpyment
- . undoi- the usual procedures of the Department of ones is
001111115115 dlvis?io? Of North American-a fd? tb?be' Charged as a cost allowance against Government con-
rcraft for the NaVy I latter whom the em loyee?on which he might be expected.-: to
v, are you an inde endent division? bf be identi?ed, WEI you state for the record whether 01":11013
.we are not. are part of North I. 'E??yertiseinent is to be paid for by cost allowance gag-Wang.
z-mfine?t?contract? i _.sme
if did look. into that, Mr. Courtneyybeeause-jat
sin your wire. We ?nd that the cost of this particular advertise-
?waspharged to our pro?t and was not charged to the costof
Tg-quimsiness- -- -

.


1, do you operate independently of til-54'
)rmance of the contracts that you hate

armance of the contract, we do Operate-as

. '9 'l'aiia'tion of tha if on wish we have two types of advertis=
separate ?mt? thi?allcd: institutid?al. that most contractors have,
- recmntinent advertising. And the one is charged to pro?t. The
ntegrated With the whole company 3 ?n - is
ht.

   
   
    
  

?4 charged tothe cost. of (101% business. . .

ti W, "the accountants apparen make these deciswns as they go
E, MT ?nd this one Was charged to pro?t. .

I. Mr. COURTNEY. Well this, then, would not be a cost allowance

Ur, Yann. This would not be a cost allowance against our contract.
.. it? I . Expenditure.

Hr. YARN. That is true, sir. 

19 Hr. Comer. Now, as to the subject matter of the advertisement,

vertisement as it istvritten and the type of employee who is
Q: - . to be engaged thereby, an expression of the com any?s policy

- . . . -. .. desirability of men with this character and ound?

)I-mt proposals and and our mgmaz" I amiafraid I didn?t get the whole uestion, Sir.

Signature 0f contracts are, of course, an .. . 09mm Is the advertisement which we ave just read the

- . . . 581i ?Of it, and the character of the individual whom you seek to

Mr. Yahn, you were the wee preS1dent ..

was inserted on May 7, 1959, were you no!? 

"lag?is that an ex ression of the company?s policy as to the de-

was assistant general manager at that . - . .11

p5? of having su an employee?
Ind general manager June 5, I believe. 

lent which we ve just read into
umbus division . .
211.837 would. They would be operating en 7"
mon.
separate unit, do you then bid upon 91:, :2 .
tests within the competence and capabi-I?ln

aivgvould the peo le who might be acted; 5:
he libs root
9

    
    
  
 
    
 
   
  
 
  

re do. We have our own research and'dem' .

     
     
 
   
 

415m. I can speak for the Columbus division, sir. And it is
to obtain this type of capability and serwce? from the

1 ?nines?.11

 

  

158 RETIRED PERSONNEL IN DEFENSE INDUSTRY .

Mr. COURTNEY. So, then, this is an expression of the comp] .,
policy. 
- Is it also an expression of the company?s needs in, this ?eld?

Mr. YARN. It 1s my personal opimon, Mr. Courtney, that it is .
needs in this ?eld. I guess I need to explain that a little bit.

The chief concern that we see today is the need to spend our ta.
for research and development and engineering study in suchfafm'
as it will prepare us to submit the best type of proposal ultima 
when competitive recluests for proposals are asked for by the milit;

We feel that available military people who have been trameii
strategy, who understand the needs of the type of weapons 
that may be required in the 5- or 10-year period in the futures?; 
that is what this job is for?are best able to guide us in the area wt? 
we are ending our money for research and development
- Mr. OURTNEY. Then this would be information prospectively;
be used in contracts which the company would hope to receiveei? .
for research and development or follow-on? .

Mr. YAHN. This would ultimately, we hope, result in contracts. . a I 
the real problem-is to work with the limited talent that you have; 
engineering talent, in the areas that ultimately lead to our, 
submit proposals which will be successful. And this is quite-"jag 
As weapons systems? complexity have advanced, it is necessarythai 
work on the r1ght sort of things, that we Spend our talent and our air."
ahead of proposals for those things winch the Governmentand-i 
country really will need.

Mr. COURTNEY. Then you would expect in this undertaking to, 
tain emplo ees whose knowledge of the lane of the Governing
for future eveIOpment or exploration, as case may be, would hfl. 
been acquired through the military service and through the posit .-
which he occupied in the milita service? .

Mr. Yes, sir; much 11ke that. We would expect that -
who have been trained in military strategy, trained in thinkinga?i-_
what will be needed to combat the enemy 5 or 10 years in the futu, 
those men will be best able to work with our people and try to visa .i 
phat type of weapons system will be required 1n these periods ini-

uture. -

Mr. COURTNEY. Then, your company would ex-pect to use this kangr 
edge or this talent acquired under the circumstances you hav?in?ica -
to ca on your business in the future?

Mr. Yes, sir.

Mr. COURTNEY. ow, were you successful in obtaining any! .-
sponses to this advertisement?

- Mr. YARN. Yes; we were. .

Mr. COURTNEY. Have you engaged anyone as a result of then .
vertisement? .

Mr. YAHN. No, sir' we have~not.

Mr. COURTNEY. Wh .
formation would be available to you. if you were successful-2&1
employin or did eniploy someone who had experienceon the jOi - 
sta of Joint Chiefs of Staif, which you say is desirable? 

Mr. YARN. Well, perhaps I can answer that this way. 

. ~.This particular position developed about 2 years ago, only._ 
havebeen engaged in the past 2 years in setting up a long-range plan-1

at particular talent would you say or what; . 

 

35- 
II.




.

gnu-u:


a -

as,

Emman-
1'21}. Yams

liyision. Vi

Wilts- We
"lit we are
[hit Way tha
[?9136 egarselv.

  
   
 
   
    
 
   
   
  
    
    
    
  
   
  
   
  
 
 
  
 
   
   
  

IN DEFENSE INDUSTRY
then, this is an expression of the com.

on of the company?s needs in this ?eld?
personal opimon, Mr. Courtney, that it is 
nose I need to explain that a little bit. 
is the need to, spend our ta] .-.
)pment and engineering study in sueha,?
. submit the best type of proposal ultinigii?.?
osals are asked for by the militq?

ry people who have been trained. 
pe of weapons systeu

Lt we see today

ate for prop

1d the needs 10-year in the future?gs
or?are best able to guide us in the area wli
)ney for research and development.

this would be information prospectivel 5?
ich the company would hope to receive 
ment or follow-on?
ultimately, we hope, result in contracts. ., i -
ork with the limited talent that you
Le areas that ultimately lead to our -. - .
will be successful. And this is quite' 
1plexity have advanced, it is A.
that we spend our talent and our 
ings which the Government and; 

 
    
 
    
 
 
  
   
  

you would ect in this undertaking 
Jiowledge of the lane of the Govermi] 
loration, as case may be, wouldIlIia?

tary service and through the posit". .-

  
   
  
  
   
   
     
   
  
  
   
  
 

.nuch like that. We would expect .I
1 military strategy, trained
Imbat the enemy 5 or 10 years in the futujI-I.
to work with our people and try to visual 3 -
stem will be required in those periods in -

your company would exPect to use this, . 3_
ad under the circumstances you savanna; -
.n the future 

you successful in obtaining any-

    
  
  
   
   

you engaged anyone as a result of that. 

particular talent would you say or.what;ii
ailable to you. if you were successful-3',
someone who had experience on the'jbi .
of Staff, which you. say is desirable?
ps I can answer that this way.
n_developed about 2 years ago, 5W.
east 2 years in setting up a long-range phi"?!

   
  
 
 

RETIRED PERSONNEL IN DEFENSE INDUSTRY 159

- And the of work that is done in this group 1s to
frog?ct the type system that be required 5 or
I in the future. And we set up long-range plans, And that

i. ?t this man would be doin that is to v1suallze and
m{?rth for our Columbus ivision what we expect 'w111 occur 
.y riod.
?$311111? Now, you Speak of a_ background with the rank of
Force colonel orINavy captain, or h1gher.
-- Lam. Yeaslr- .
5 it 1 note you excluded the Army from this.
YARN. No.
Do you or don?t you?
?i . 1333317; NO, sir; we do not exclude the Army. 
What particular talents would you expect to acquire
3311.,? EM an Air Force colonel or a Navy captaln, to the exclusmn off
.hf?r ranks in the service? 
YARN. I think that the part1cular pe of talent that we are
- I for is rather the ability to think an plan, than the particular
- . .5 service uniform the man previously wore. 
. Well I am thinking now of the gradatlon. You go
:?ii?Ow to the colonel and the captam in the Navy.
.j .. YAHN. Yes; well?_? . . . .
r' COURTNEY. ?That particular repository of Wisdom 1S there 1n
:r 
f5". YARN. I think it is merely, sir, the matter of having spent ?that

 
 

. time in the doing of this work.

1.. COURTNEY. Do you think that the lower echelons, the lower
15:" Is,'would not be possessed of adequate talent, exper1ence, or com-
?if. -YAHN. Well probably some of those are??

t, I am not trying to- aid small business, don?t mis-
.l [1 me.

i" Mr. Courtney, I think it is merely a matter of evaluating
w- applications. And that is what we have attempted to

- ?9 COURTNEY. Then this was an expression of general terms?
YAHN. Yes. An expression of experience

- f; COURTNEY. Rather than a limitation.

Thatjs correct, sir.

I F. - COURTNEY. You feel you have the competence to skeak for your

-- '1 generally in this ?eld, as to whether or not such talents are

-- Ir employed. . 

LI, YARN. o, sir; I don?t believe I can speak for industry as a



. COURTNEY. So you are con?ning your remarks to the policy of

1., experience and the needs of your division; is that right?

. Yes, sir. I am de?nitelycon?ning it to the Columbus

. non. We are concerned with the problem of our future develop-

$85 We are concerned with the problem of spending the money

5-: we are current] spending on research and development in the

i1 . _Wa-y tillat it can bene?t the country and-the Government, and we

nurse ves. I I

 

   
   
  
  
  
  
 
 
  
 
 
 
 
     
    
  
 
 
 
 
 
 
   
  
       
  
 
 
 
  
  
  
 
  

a? -

   
 
 
 
 
 
 
  
   
  
  
  

160 RETIRED PERSONNEL IN DEFENSE mnusrnx

Mr. COURTNEY. ow, when you speak of money, are you .-
of the money that would be used from Government research 
velocpilment contracts or are 1you speaking of the company?s own '1 .
?whi might be used to exp ore or exploit a potential ?eld?

Mr. YAHN. I am speakmg principally the company?s own
penditures.

Mr. CounTNEx. You think??

Mr. YAHN. Principally of the company?s own expenditures. '99?
have some few research and development contracts, ut they are- 

Mr. COURTNEY. I have no further questions.

Mr. HEBEET. Mr. Hess.

Mr. HEss. Mr. Yahn, the Columbus division of North Ameris;
did I understand you to say they enter into negotiations with the-N 
procuring o?cers or procuring people, the proc ment people?

'Mr. YAHN. Yes, Sir; they do. 

Mr. HEss. That isn?t handled through the west coast division
North American? 

Mr. YAHN. Well, the west coast negotiators partici ate to 39.13351 .
tent in these negotiations, but the prmcipal responsi ility rests 
the Columbus for the Columbus contracts. 

And that includes also research and development .7
acts

Mr. YARN. Yes, sir; to the extent that we have them.

Mr. HEss. And production contracts, also?

Mr. YARN. Yes, sir. . . . 

Mr. Have you at any time heretofore run an ad similar tn" 
ad that was carried in the Wall Street Journalon May 7 -

Mr. YAHN. I don?t know of any ad that wassimilar to it. We"?Mr. HEss. Asking for military ersonnel?

Mr. YARN. There was no ad at was like this one, sir.

Mr. Haas. Well, have you advertised at any time for military -
sonnel speci?cally? 

Mr. YAHN. I am afraid I couldn?t answer that exactl? 110094153??
though there was one ad back a couple of years ago, I on?t thunk 
used the words ?military personnel. To e?llain?I think it had
do with long-range planning, but I don?t 'nk it used the den!
?milit personnel.? I am speaking only from my recollection}; 

Mr. as. Is there at the present time a contract pending betjv- - '1
the Navy and some manufacturer in to research and devt 
ment that would make you run an ad s1milar to this ad?

Mr. YAHN. 0, Sir not at all. - .

There are no pendin contracts that would have anything tsI-?
with this ad, as such. Ibis ad is devoted entirely to the replaoe?t'li
of an employee?who was previously engaged in this same kind of 1er

ran plannin" .
15E: HEss. V?as he a military man? .
Mr. YARN. He was a milita man. 11?
Mr. Haas. He 1s retired now
Mr. YARN. Yes.
Mr. Retired from your employ?
Mr. YARN. Yes, from the Colum us division. 

run a few ads in the Wall Street Journal. 
1

fl



 

 PERSONNEL IN DEFENSE. INDUSTRY

STOW, when you speak of money, are you sp? 

would be used from Government research 3.112}:
ou speaking of the com any?s ,ownf

re or exploit a otentia ?eld?

1 speaking principally the company?s om.

You think-?

:ipally of the company?s own 
and development contracts,
have no further questions.

enditures. 
ut they areia 

ahn, the Columbus division of North Amelia
to say they enter into negotiations with the? 
procuring peOple, the procurement people? 
11-; they do.

 

  
   
    
     
    
     
    
   
 
 
  
  
   
 

RETIRED nv DEFENSE mnus'rsr 161

Egg Is it your intention to use this Air Force colonel or Navy
In actual negotiations for procurement of a contract?

YAHN- Not at all sir. 

Eng for Columbus?I don?t know all the 1?personnel 1n our
-"*divi810n5a but I feel con?dent that none of em_are milita

. l91 who are englaged in negotiations at all. And in Columbus,
a at the people are engaged 1n negotiatmn of contracts are

"fl I personnel-
- {Inga None of them?
A TEEN. . .
. ages. You have a number of military personnel employed,
?3 ii?
limit. We do have several, sir. . 
1 Hhsa "But none of them are engaged 1n contractmg With the

.sn?t handled through the west coast divi?st. - "meant?

    
   

Tm.- Negotiations with the Government come under a see?

the west coast negotiators partici ate to s, - as contract administration, and there is a pricing grou

ltiOIlB, but the principal responsi
on for the Columbus contracts.
lat includes also research and development?.

r; to the extent that we have them.
oduction contracts, also?

ility rests-f

time heretofore run an ad similar. .
in the Wall Street ournalon May 7? 
know of any ad that was similar to it. "Wu
Vall Street Journal. 
for military ersonnel?

was no ad ,at "was like this one, sir.
ave you advertised at any time for 1101111333.",

.fraid I cauldn?tanswer that exactl? .beca .- 
5 ad back a couple of years ag
tary personnel)? To ex 1
planning, but I don?

. 'nk' it used 
I am speaking

only from my recollection: 3.
at the present ?time a contract pend'
ards to research an
:e you run an ad Similar to this ad?

lanufacturer in

.in contracts that would have an 
his ad is devoted entirely to the replael 3;
ras previously engaged in the same kind of -.

. military man?
a milita man.

.?rom your em

the Colum us division.

  
   
 

ntract ro'ect administrators who do this ne tiating, an
$01319, tr}; best of my knowledge, and I thm?oham correct
are not military personnel and have not been m?ltary per-
.--. . 
Hines. You never called military personnel in to consult with
,3 to who they might contact in the military 
Tm Not to my lmowleg?e, we never have.
?u lime All right. Thatis .
?esta. Mr. Winstead?
NO.
HERBERT. Mr. Fisher?
:?FisnnR. Well, your procurement program comes under the
of your. contract administration? 
khan. Yes, sir. .
I The man for whom you advertised would not work in
i . ition?
That is true.
.Iis?nn. That is all.
Mr. Hardy? 5
HARDY. Mr. Yahn, I understood you to say that there 13 a
_r position now because the previous person who ?lled
1 ad is no longer in the Columbus divismn?
Yes, sir.
. And he was a military of?cer?
Yes, sir.
HARDY. And is he still with North American?
Fans. Yes, sir; he is transferred to our Los Angeles divismn.
HARDY. And what is his present scope of work? 
YARN. He is an assistant, I believe, on one of the programs in
division.
.IHARDY. On one of the programs: You mean one of the con-

 
  
   
  
  
   
   
 
 
   
 
   
  
  
   
     
    
   
    
   
 
    
    
  
  
   
   
   
  
   
   
 

in

ii, Yes, one of the major weapons systems.

- HARDY. One of the major weapons systems contracts?
YARN. Yes, sir.

. HARDY. Well, he is an operations man?

 

 

   

  

162 RETIRED PERSONNEL IN DEFENSE INDUSTRY

  
  

Mr. YAHN. I guess you would call him that, sir.
Mr. HARDY. Is that a Navy contract or an Air Force contracts
Mr. YAHN. That is an Air Force contract.
. HARDY. What was his rank?
Mr. YAHN. He was a colonel.
r. HARDY. He was a colonel??
r. YAHN. A colonel or a lieutenant colonel, sir.
Mr. HARDY. So he hasn?t retired from North American. Hg.
moved up.

Mr. YAHN. He has either moved up or transferred, sir.
Mr. HARDY. Well, which is it? 
. YAHN. I really don?t know the difference between the tire.
codes, you see, as to whether he got a substantial promotion. 
it was a promotion. But it was not a great promotion, as 
lection oes in this.

Mr. RDY. Although this ad appeared on May 7 you have
?lled that position?

Mr. YAHN. I beg your pardon, sir?
Mr. HARDY. You haven yet ?lled that position?
Mr. YAHN. No, sir.
Mr. HARDY. And I understood you to say you had quite a 
of replies. Could you say how many? 
r. YAHN. About 70 replies were received.
r. HARDY. Did you as a result of those 70 replies interview 
of those people?
YAHN. Yes sir. We interviewed I think some three-or; 
Mr. HARDY. We did you ?nd no one satisfactory, or did you?: ..
that job to anybody? 
r. YARN. We have not o??ered the job to anyone. We did 
number that we are very much interested in. . 
Mr. HARDY. Well, that job is still vacant. So it is not a mat! .. 
urgency, then, that it be ?lled.

. YAHN. It is planned to ?ll the job, sir, but we want to. 

  
  
 

Iv

 
  
 
 
 

:43.

 
   
 
 
  
 
  




   
    

 



h-
ne?.

i' -:

   
  
 

n.



    
   
 
 

 
 

  
 
    
    
     
    
 
    
   
 
 
   

  

   
 
  
 
 
 

  

 
   
     
  
  
 

  

 
  
   
   

  

  
   
  
  
 
 

    

  
 
     
     
 
  
 
   
      
       
 
    
    
    
 
 

  

 
  
   

  
     

 

  

   
  
 


with the best possible personnel. air. 
Mr. HARDY. How long since the former occupant of that posi Mr. .15

was transferred 3 .?iirt 
Mr. YAHN. Several months. I don?t know the exact date. 1a, 
Mr. HARDY. Do you have a written position description for:- I youi
1'01)? Mr. 
Mr. YAHN. Yes, sir. I Andgh
Mr. HARDY. May we have it? procure:
Mr. YAHN. I don?t know whether it is here. But we can certsE 1" Mr 
send it to on. forlsales
Mr. H?gnnr. Please do. Mr. 

Mr. YArm. I do not have it with me. But We will send it to 3' written
MILITARY ADTIBER on DESCRIPTION, DEVELOPMENT PLANNING 

COLUMBUS name 0
Mr. 

RESPONSIBILITIES .
This Do
Continually estimate the military posture of the United States from? H.
present time over the succeeding 10-year period. This will require observai?l 
and evaluation . Mr. 
1) the roles and missions of the military service; of 8.000111
2) available and projected weapons systems and

3) national and international political situations.

  

  
    
   
  
    
  
   
    
   
     
   
  
     
   
     
 
  
 
   
 
 
 
   
   
  
   
    
   
    
   
  
   
   
     
    
     
     
  
    
 

lD PERSONNEL IN DEFENSE INDUSTRY RETIRED PERSONNEL IN DEFENSE INDUSTRY 163

ess on would call him that sir. considerations in paragraph periodically report on the weapons
hat); Navy contract or an A,ir Force contract? ?uirements of ?lilture weapons systems whose development
. - .. ttothe cum us 

5 IS an Air Force contract. -w ?t?d?end in broad terms military product development strategy?,

at was his rank? df? Maintain 113,130]: at all levels of the Department of Defense in order colonel. - l. espousib?itieslnparagraphs and 
waits a colonel?? ?srin this liaison activity will be at high policy and planning levels. .
lonel or a lieutenant colonel sir Lclulfs'ovi 0: as required! ?gee aged h?g?lflsulta?? on {Sinners regarding m?l'
. 5.. and 1annl'ngopera ons queaan proc ures. . .

he hasn?t retired from North Amerlcan. Hg; "PLEgiaiitain 1liaison with the military sales department and engineering

5 ., . for the purpose of keeping current on design, study, and sales activities
as either moved up or transferred, sir. . sani?tarr 13mm?-

which is it? Mate and conduct studies leading to recommendations required in
. 
.11 don?t know the dl?'erence between the .. 581 and evaluate information as to source, credibility, and signihells?? . . .
whether he got 3' 31113513115131 promotlon. tn-ftlie 00111551112: fashion evaluated information to appropriate
7 3? .2 's'emina 9

But It was 1101: a great promotion, as my; . 1?:th members in the form of intelligence reports, or immedi-
g. receipt of important information which may have an impact on
tough the ad appeared on May 7 you had" ?lat? $311,955,
9 I, 

as a repository for information pertinent to military programs of

your pardon, sir i .- ??iz?olmbus Division.

haven yet ?lled that position?

AUTHORITY

racontactall sources, both company and external, necessary to the ful-
L?j' of'responsibili?es.

'..Y'1aimquest data of these sources.

?manger to represent deveIOpment planning department in area of re-
I ?ty-

11'.
I understood you to say you had quite a 
ou say how many? 

70 replies were received.
you as a result of those 70 replies inter-vie 



. . .. . . F'tary adviser is accountable to the department manager for his 13th
511'. We mtervlewed I some three-er. ?pt?cient and fruitful carrying out of responsibilities.

did you ?nd no one satisfactory, or did-3?91 . LHARDY. You have a lot of papers. I thought you might have

we not O?ered the gob to anyone. We did. 
rery much interests in.
{?at 'otlil is still vacant. So it is not a 111.11 
3 .

planned to ?ll the job, sir, but we want in
apersonnel. .
long since the fonner occupant of that =1 - 

i. YAHN. I know it is not in here.
'f Eisner. That description, of course, would be the description
3? the ad appeared, not after the ad appeared.
'l?hHN. That is true.
.- Which is the subject before the committee. 
,2 That is true.
HARDY. To whom did the previous occupant of that position
I
YARN. He reported to the manager of development planning.
.4. 1 wish his name? Is that??
. HARDY. No; the position is what I was thinking of there.
she hadg no responsibilities at all with respect to governmental i
.l'ments .

YARN. NO, sir. He was not charged with any responsibilities

.

'o

.1 months. I don?t knowothe exactodate. .-
au have a written positlon f: 

r.
1e have it? . 
know whether 1t 1s here. But we can can

negotiation or rocurement. I
do. . - @4301 Mr. ?haii-man, I would be interested in seeing the
at have 11: With me. But We Will send it.? position description. I
DESCRIPTION, DEVELOPMENT PLANNING Dmp3&5 -. .- HEEBERT. I think you also 001116. furnish the committee With the

COLUMBUS DIVISION

fifths individual who held that position.
. YARN. Allright, sir.
position was formerly occupied by Wallace S. Ford.
. .HgiRDr. Thank you.
. Eisner. I assume that North American has a uniform system 

RESPONSIBEITIES

ate the military posture of the United States 
cceeding 10-year period. This will require ohst.

missions of the ?military service 
projected weapons systems and
lternational political situations. -

i - Hating?

 

   
 
  
  
  
 
 
  
 
  
   
 
  
   
 
 
 
  
  
  
  
   
    
    
   
 
 
  
  
 
  
 
  
 
  
 
 
 
  
  
 
   
  
 

   
 

164 RETIRED PERSONNEL IN DEFENSE mousrsr

Mr. YAHN. Yes, sir.
Mr. HEBERT. In making its books up for the cost of a contrac-
Mr. YAHN. Well, I am afraid you are a little out of my ?eld.
Mr. Well, on ought to know. .
Mr. YAHN. We do vs a uniform system ofaccounting. 1cm; -
?Yes? to that. I think it varies with divisions, though, sir;
Mr. Hiienn'r. Well, by that do you mean to say that there'ig?
system of auditing and accounting in one division and another. -
of auditing and accountin in another division? 
Mr. YARN. Well, whath meant by that is, is that the nature rot 
accoun because of the nature of the business which is done?4;;
Mr. ERT. I am talking about Government business. Thatia - 
we are interested in. Is there a uniform system, a uniform pm,? 7
in all divisions as related to Government contracts, for charges aga .
that contract? 
Mr. YAHN. I believe I would have to refer that to our 
sir. I really now am outside my ?eld on this.
Mr. HEBERT. You are the manager of the division. You don?t-In
what was char cable and was not chargeable? 
Mr. YAHN. %Ve do haveat Columbus Division, sir, a uniform 
tem of accounting. .
. . HEBERT. ,Well, is that stem in consonance with the system
played by other divisions of orth American? .
Mr. YAHN. It is compatible, I am sure, because the are all
sembled and become a corporate ?nancial statement. gut sin
have the Rocketdyne Division, Atomics International Division;- 
some commercial work, I suspect?-? 
'Mr. HEBERT. I am not talking about commercial work. I am :1 'i

  
  
   
   
  
 

  
  
   
 
 
 

inglabout Government work solely and purely. 
r, YAHN. I am afraid I can answer, except for the Coluni 
Division sir. . 
Mr. Because if you don?t have the uniform system, Ii- 
that the Pentagon should put the ad in toget some new people 
Because they would have no uniformity of what is allowed 
is not allowed. . 
ow, do you know that as a matter of fact adVertisemmits foresig-
ployment is allowable as a charge to the contract? 
Mr. YARN. Yes, sir. 
Mr. HEBERT. In the Government operation? .
Mr. YARN. - Yes, sir.
Mr. HEBERT. Then why was this one single ad chargeable toipml?'
instead of to the uniform manner of charging to the contract.

as a part of our l?i?e?l?ar course of business.
- Mr. at is what I am trying to develop now. 
this ad so singular?

Mr. YARN. It so happens it was charged to pro?t, sir. Ami-.1
could only report the fact to you.

Mr. HEBERT. This you say?this was charged to pro?ts and "51?
to the contract?

Mr. YARN. That is true.

 

  
  
 
  
   
   
 
 
 
 
 
  
 
 
  
  
  
  
 
 
 
  
   
 
 
  
  
 
 
 
 
   
   
    
  
 
 
   
   
    
   
 
  
   
   
 
 
 
  
  

 

  
  
 
   
    
    
 
  
   
   
  
  
  
  
 
  
   
  
  
  
  
 
    
 
 
   
   

166 RETIRED PERSONNEL DEFENSE mnusrar

Mr. YARN. That is true; yes, sir. I

Mr. Is there any particular reason why you prefer Ber +5
on the Joint Chiefs of Staff Could it be?

Mr. YARN. I would say it is because of the excellence of . 
which is probably going to be learned by. the individual that has 

that of ex rience.

Mryl'luermr. Would it be possible you would Want to know. i
information that he carries with him from the planning, or $2 
participation in the Joint Chiefs of Staff Isn?t it a matter .offif: . 5a
that these plans go on and are projected into the future for yeah-.1 -

Mr. YARN. Yes, sir.

Mr. Hiram-r. Or were on atempt' to buy his knowledge of 
he learned on the Joint Chiefs of 8% and have that transposed?"
your own organization?

Mr. YARN. I think it is clear, sir, that we were attemptingth 
that kind of knowledge, so that we can come 11 with weapons sy?
which will effectively combat the enemy. ?nd it is that typii
research? 

Mr. -Hi?nBEu?r-. Of course, we are all ing to combat the enemy:
We are all for America and we are all ribr defense, but the 

uestion I asked you is weren?t you in effect attempting to buy? -

owled that this individual carried from his service?on the J?ui. .
Chiefs 0 Staff, where all papers were available to him? 

Mr. YARN. We were attempting to all his experience, sir.

Mr. Hanna-r. Well, that is correct. gYou were attempting mom; 
get the knowledge that he had gained with his exposure an assoc

    
 
 
 

tion with future 131 in order to guide yourselves, your comp:- 
into a preferred arcing? competition. Well, isn?t that the fact,? 
you are trying to do? 5? 

Mr. rm. Yes, sir. I think I said exact] that, that we we. .. Pg
trying to do the best job we can in the area di?icult planningga- 
engineering research and development that precedes by many yea] WE
sometimes 2 or 3, the time when a competition for a new design occui . 111' it:

Mr. H?mr. I don?t disagree with that. And I certainly do that r. the;
you for your frank statement. That you are not onl tryin to big! m,
the individual?s ability but you are trying to buy the knowledge tbi - - 919%
he acquired in a high echelon of secret and classi?ed planning. 

Any guestions of the committee? . Bug

Mr. OURTNEY. I have a further question, Mr. Chairman. Mai it'ih
Yahn, in view of your change of attitude toward the propriety 
chargin the cost of this advertisement to a Government contract anti
a cost owance?didn?t I understand you to answer my direct qu, . him
tion by saying that the individual whom you hired or would 
response to this advertisement would be to assist you in future plai? - pee}
ning, and if that be true would not the money that would be expendeg I coir.
for future planning, predesign competition, be the money of thgl' I 
company rather than that which would accrue from performing mm
Government contract? 35

Mr. YARN. Yes, sir. it

Mr. COURTNEY. Well, then, why would you seek to charge your . the:
planning money, your company planning money or expenses, againSf mag

a Government contract I
I

   
    
    
    
    
     
    

- PERSONNEL

DEFENSE musrar RETIRED PERSONNEL nv Invnusrnr 167
is true; yes, sir.
.ere any particular reason wh - 
(1s:-as a. Calditbe? you Prefer 53? 
. say 1t is cause of the excellence of 
ung- to be learned by. the individual thatphas I

YAHN- Well, I think the explanation lies in the. fact that both
an}, of developing and planning as well as such th1ngs as recru1t-
advertising are part of divis10nal or company burden and that
"In I til is distributed Government contracts to the extent that
'03- 12 I of time involve are 2.333 to pichi up ?shblihr?lfn. relat'
1d it be ossible ou woul - - URTNEY. Then, we we un ers 1n your 1ons
carries I\IIvith hinJi from tliiewgilamgn?i . ?rheoGovernment you charged the expenditure, the expenditures
Toint Chiefs of Staff Isn?t it a. matter: off I in furthering the company?s or the dun-31011. own busmess
1 ?Id are Projected into the future for yearg? contracts, rather than charging 1t to the expense
. business .
are on atempt' to buy his knowledge of "In AHN. I am not sure I understand your quest1on, Mr. Courtney.
1t efs of Sta and have that transposed . on rephrase 1t for me? 
12 Well, I w1ll ask you ?ne, then: Do you finance your
.m a work with your own funds or do you ?nance 1t Govern?
ds?
Eganm En eering study work, research, and development
ithat is consig-Idlred related to the type of busmess we are domg, 
. -Ias a matter of industry practice, even, is a part of the contractor 
ca and we are all or defense but the sped, .. ?.Fi'fnm; Within an engineering department you have direct labor
ls_weren?t you in effect attempting to yi I Indirect And people who are 1nvolved 111 study programs are
dIV1dual carried from his service on the 5511. -. ?r inf indirect. 
Papers were available to him? I - its the extent that you have direct work gomg 1n there, the Indirect
attempting to get all his experience, sir. .27? . to it. This is my understanding of the accountmg treat-
hat 1s correct. You were attemptin mo - . .15.. I if); it. . . .
he had gained with his exposure an ass?d' Iii-Ii ?at I would prefer, 1f we are. gomg 'to get into th1s area, 1f we
in order to guide yourselves your comp 1 - d?have our treasurer answer thisquestlon.
Well, isn?t that the fact, I . r. COURTNEY. Well, the quest1on 1s: As a matter of company
I .. [w and Government payments, whether or not the Government 1s
- I think I said exact] that, that we .mted, on your change of allocation of th1s. 1156111,.130 suppl funds
lb we can in the. area ofIdi?cult planni?gi i __ri?cruitment for the private or the prOJected business of com-
development that precedes by many I. - some timeinthe future. .
.e when a com etition for a new design as If] r: YARN. Well, 1t 1s my understanding, .Mr. Courtney, 1i we take
1sagree with amt. And I certainly dothaii' age of recrultment of engmeers, whic 1s gomg on contmuously,
ement. That you are not only tryin t6 6 cost of that recruitment of those engmeers the indirect cost to the Government contracts. If am cor--
. on it.
7311?. COURTNEY. I thought you made the distinction in this case.
if you don?t I think we will just let the record stand Just the way
3:3.

   
    
  
 
  
  
   
  
   
   
        
  
 
      
 

it is clear, sir, that we were attempting to ,5 

so that wecan come 11 with wea one 
combat the enemy. ?nd it is iihat ?3291. .

urse, we are all trfying to combat the snarl!

    
   
   
   
  
     
   
   
    
 
 
 
    
   
   
   
 
 
  
 
  
  
    
   
   
   
  
  
   
  
    
  
 
  
  
  
 

  

"til you fare tryingdtolbuy the know] ge
on.o secretan cassi?edl .
Ommttee? annmg
a further uestion Mr. Chairman. 
mange .of attitude tonard the proprietyEI'r
a vcrusement to a Government contract-I: -

i I. I._have another question, Mr. Yahn. Perhalps Mr. Swanson could
I understand you to answer my direct (111g; ..

mwer it if you have not the immediate know edge. I haven?t?asked
El?n-many questions yet.
I ithe responses which ou received, did you receive responses from
5 . is or of?cers who had been in the procurement ?eld and with whom
up" company had theretofore had dealings? Either one of you.

3. Mr; YARN. I don?t know whether Mr. Swanson has examined them
more carefully than I. If he has, I wish he would answer.
. r. COURTNEY. Whichever one of you can answer.

. YAHN. But I have gone over them, and I. recognize none of

?11938 pcolple as having to do with procurement. And I think I know
?Hist of people that we deal with in procurement.

ment would be to assist you in future plan.
vould not the money that would be expendi 
:des1gn compet1t1on, be the money of tlII
.t which would accrue from performing-II

hen, Why would you seek to charge you 
:pany plamnng or expenses, againlit

 

   
 
 
 
 
  
  
 
  
  
  
  
  
  
 
   
 
  
    
  
  
 
  
   
 
 
 
 
 
  
  
  
   
   
 
 
 
 
 
  
 
  
 
 
 
   
  

   
  
   
   
  
 
   
   
  

168 RETIRED 1N DEFENSE INDUSTRY

Mr. COURTNEY. Now with respect to the three that you say that
under consideration.

Mr. YARN. Yes, sir.

Mr. COURTNEY. An . of those three, or had any of those three 
in the rocurement ?e at any time in the last several tours ofi?a ..

Mr. . AHN. To the best of my knowledge, they have not. .

Mr. COURTNEY. What had been their ?eld? Let us understan.

Mr. YAHN. They have been engaged mostly. in lonlg-range plan-if
I I can?t. recall the details of their app cations, bug 
erally speaking these people did repl to the tone of the 
stress their knowled eof long-rangep lining. 
Mr. COURTNEY. 15nd those are the three that are presently-n, 
consideration 8

Mr. YAHN. Yes, sir. 

Mr. HEBERT. Just one ?nal question for the record. The 001E.
tee. is to,understand that you are representing North American 
tion CO. 2and are speaking for North American Aviation 
mo .

Mr. YARN. Sir, I eak only for the Columbus division, wh'i -
have knowledge of, ang not for the whole North American 006%,

Mr. HEBERT. Then would the policies of North American 'er
di?er?ent than the policies of the division in Columbus, which

Mr. YAHN. They mi ht differ from division to division. 
Mr. HEBERT. Well, et me ut it this way: If you are contragpf'
policy to North American, gTorth American Aviation, the pa 
Ody, would certainly make its own policy known to you.

Mr. YAHN. Yes, sir.

Mr. HEBERT. So the committee is to assume that the divisiggi 
Columbus of North American Aviation is the olicy of North ,3 
ican Aviation, because you have not been toldp otherwise. And i 
had been otherwise, in the natural course of events you would-?hm
been told otherwise. 80??

Mr. YAHN. We'll, Mr. Chairman, we have policies and many of t} 
are written and many of them are not. Each division eral mi 
ager is given considerable latitude. And in this particu ar case,
action and my remarks are based entirely on the Columbus divasi- --
and I cannot speak for the corporation as a whole.

Mr. Has Mr. Atwood, the president of North Ameri .. 
Aviation, taken cognizance of this ad?

Mr. YAHN. Mr. Atwood does know of the ad.

Mr. What was his reaction?

Mr. YAHN. I have not asked him for a reaction, Mr. Chairman.

Mr. HEBERT. What did he tell you about the ad 3 

Mr. YAHN. We discussed my coming down here and answering .. 
$8 uestions that the committee may wish to ask with respect -,

ea . 

Mr. He expressed no opinion about the propriety of 1311'
ad? Tell us. i
Mr. YAHN. Not in so many words, Sir.

  
 
  
  
     
   
  
 
 

 

  
 
 
  
  
    
   
  
    
   
  
 
     
    
    
    
    
   
   
  
   
      
  
       
   
   
  
    
     
  
   
 
  
 
     
    
 
    
  
  
 
  
  
    
    
    
 

ED .PERSONNEL IN DEFENSE INDUSTRY

ow with respect to the three that you say the 
n.

811?.

An of those three, or had an of those three 
a?eld at any time in the last sgveral tours of?? 
he best of my knowled they have not. 
What had been their ?geld? Let us undersea] 
have been en aged mostly in long-range plam .
n?t recall the details of their applications, but; 
:se people did reply to the tone of the ad and
I of long-range planning. 
Ed those are the three that are presently a .1.
air.
one ?nal question for the record. The com ..

that. you are representing North American 
peaking for North American Aviation 00;?

speak only for the Columbus division, Will
in not for the whole North American 0055;

would the policies of North American (in
Jolicies of the division in Columbus, whieh

nilght differ from division to division. 
l, at me put it this way: If you are contr-- 
nerican, _North American Aviation, "the pi 
make its on policy known to you. 7 
r.
he committee is to assume that the. divisi. 
American Aviation is the olicy of North
se you have not been toldp otherwise. An 
1n the natural course of events you wood I: 

Ir. Chairman, we have policies and manyofgt 
of them are not. Each division nera?lj j'
:able latitude. And in this particu?gr ca; ..
are based entirely on the Columbus diva-5,.
the corporation as a whol .
Mr. Atwood, the president of North Am- 
:ance of this ad 
vood does know of the ad.
was his reaction?
not asked him for a reaction, Mr. Chair-mas
lid he telI you about the ad .
:ussed my coming dOWn here and answer-in; 
a committee may wish to ask with reaped 



pressed no opinion about the propriety of T.

many words, sir.

.. I asked?recently when it was brought

a


E3. the propriety of this ad.
anti-intention .Mr. Chairman, to get available

thisad?
2? YAHIGI

lifH'JinEaT. Was there any

.I .:'11ave preferred that the ad would

. 
- k, at which time Admiral 



RETIRED ransomn nv naransa maus'rnv 169

- H?gm?'r. at in so many words; what did he say about the
""Tet ofthisadio 

. "d me He said 1t would be necessary for me to-come down as
. i-ted and to answer all the questions that the committee may have
ill" ??tgr. Mr. Atwood raised no objection to this ad?guy. The ad was not brought to Mr. Atwood?s attention until

muy?recentl .

3?
Hanan . I didn?t ask that uesetion. I don?t care how recently
(1 to his attention 
any opinion as to the propriety:l of the ad?

my appearance ere and the ques?

ood express
A d1scussed onl

YAHN. We

which might be raised. I did tell Mr. AtWood that I planned

. r?er 3J1 the questions the committee asked with respect to it: 
_HanaaT. I have asked you did Mr. Atwood express any 0131111011

He either did or he didn?t.

- (Yams. I think if the ad had been submitted to Mr. Atwood it
bly would have be

en not so worded, because it was?and this
e'ven have been true if it had been submitted to me. Because it
military personnel,
.2 farm the rep es we received those are the 1Eiype of personnel who
'7 459d, as opposed to contacting them direc y. These people??
Hanan. Did Mr. Atwood express any opinion as to the pro-

YAHN. I think??
Hanan. ?Yes? or?No.?

I don?t believe he did, in so many words. But I



indication in what he expressed that

thinkin about the propriety of the ad?

understanding of his feelin would be that he
not haveien so worded.

T. You could have answered that a long time ago.
I am sorry.

. Thatisallof the witness. .
committee will stand in recess until tomorrow mornm

- indicative of what he was
. YARN. My

at 10
arney, Lieutenant Comman er An-
Jr, and Commander Porter will be the witnesses.

Iv -'committee will go into executive session.
upon, at 11:52 the committee adjourned.)