NOMINATIONS

WEDNESDAY, DECEMBER 30, 1970

U.S. SENATE,

SUBCOMMITTEE ON EMPLOYMENT, MANPOWER AND POVERTY,

OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C. The subcommittee met at 9:30 a.m., pursuant to call, in room 4232, New Senate Office Building, Senator Gaylord Nelson (chairman of the subcommittee) presiding.

Present: Senators Nelson, Kennedy, Mondale, Cranston, Hughes, Stevenson, and Javits.

Also present: Senator Schweiker.

Committee staff members present: Robert O. Harris, staff director; William J. Spring, professional staff member; Eugene Mittelman, minority counsel; and John K. Scales, minority counsel to the subcommittee.

Senator NELSON. The hearing will open this morning on the President's nominations to the Office of Economic Opportunity: Mr. Frank Carlucci, the Director; Mr. John Oliver Wilson, an Assistant Director; and Mrs. Carol M. Khosrovi, an Assistant Director.

Senator Scott, I see you are here to make an introduction.

STATEMENT OF HON. HUGH SCOTT, A U.S. SENATOR FROM THE STATE OF PENNSYLVANIA

Senator SCOTT. Yes, thank you.

Mr. Chairman and members of the subcommittee. I am very pleased to be here to speak on behalf of Mr. Wilson and Carol Khosrovi. I have known Mrs. Khosrovi, I can say, for some years well and favorably, but I am here primarily to speak by way of introduction and make a very strong commendation of Frank Carlucci III.

Mr. Carlucci is a former Foreign Service officer and a graduate of Princeton and the Harvard School of Business. He has served, as the committee knows, here in Washington with the Office of Economic Opportunity. He had had military service in that most superior of all branches of the Service, the Navy. He was in private business with the Jantzen Co. in Portland, Oreg. He was in the Post Management Office in the Department of State and has been Vice Consul and Economic Officer in Johannesburg, and served as Second Political Officer in Kinshasa in the Congo, and officer in charge of Congolese Political Affairs, Department of State, Consul General in Zanzibar, and Counselor of Political Affairs in Rio de Janeiro.

He is married and has two children. Having survived several perilous posts, I think he is the more qualified for service in a post perhaps more perilous than in any of those in which he has served.

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It is a pleasure to recommend him.

Senator NELSON. Thank you, Senator Scott. We appreciate your taking the time to come before the committee this morning. We will appreciate it if you will help get the Congress out of here at least within 24 hours, too.

Senator SCOTT. If not, as I said yesterday, we will bring the New Year in under proper security guard.

Senator NELSON. Mr. Carlucci, do you have a statement you wish to give?

Excuse me. Senator Schweiker has a statement.

Senator SCHWEIKER. Thank you, Mr. Chairman.

I want to say as a member of the full committee I am happy to join my senior colleague, Senator Scott, in presenting Mr. Carlucci, because he is a Pennsylvanian. I, too, concur that he has had an outstanding career as a dedicated civil servant. It is interesting to note he has twice received the Superior Service Award by the State Department, so I think he does come with an excellent background in Government service.

He has devoted his life to it, and I think after hearing his testimony and after hearing his presentation of his views, his philosophy in this matter, I think the committee will be satisfied that he is well qualified for the job.

I just want to support Senator Scott's statement.

Senator NELSON, Mr. Carlucci, you were confirmed by the Senate for your previous position a year ago, is that correct?

Mr. CARLUCCI. That is correct, Mr. Chairman.

Senator NELSON. Did you wish to present a statement?

STATEMENTS OF FRANK CHARLES CARLUCCI III, JOHN OLIVER WILSON, AND CAROL M. KHOSROVI, OFFICE OF ECONOMIC OPPORTUNITY

Mr. CARLUCCI. Mr. Chairman and distinguished members of the committee, I appreciate this opportunity to appear in connection with my nomination as Director of the Office of Economic Opportunity.

I have a statement, but I understand that with the press of business in the Senate time is short, and if you would prefer, I can submit it for the record, or go through it.

Senator NELSON. Go ahead and present it, however you wish.

Mr. CARLUCCI. During the past 18 months it has been my privilege to serve as OEO's Assistant Director for Operations, with responsibility for supervising regional offices, State and local government relations, community action, and Indian and migrant programs. In this role I have attempted to pursue a course which would strengthen the effectiveness of Federal, State and local efforts to fight poverty, while through responsible management enhancing broad citizen support for those efforts.

Throughout much of its brief history, OEO has been a subject of controversy and speculation. Criticism and praise can be found at virtually all points on the political spectrum. Dollar for dollar, OEO's programs are perhaps more widely debated and scrutinized than those of any other Federal agency.

This is as it should be. An agency on the cutting edge of social change is bound to be controversial. If we ever accede to the normality and relative calm of a traditional bureaucratic unit, it might well be that we are no longer serving our purpose.

Simply stated, our mission is to work on behalf of those whose voice has gone unheeded for too long in our society. A key element in this task is to make the institutions of our society-Federal, State, local and private-more responsive to the needs of the poor.

There are widely disparate views on how OEO should strive to fulfill this mission. Fortunately, most parties to that discussion disagree on techniques rather than on objectives. Hopefully such differences can be argued in a manner that does not impede progress on common objectives. I believe that OEO is doing an increasingly effective job. Allow me to cite some examples which support this view.

OEO's legal services program, expanded and strengthened in the past 2 years, is giving millions of poor Americans their rightful access to our system of justice. And it is doing more than that. Legal services is showing all Americans that our system is strong enough and flexible enough to be changed where necessary through peaceful, legal

means.

Mr. Chairman and distinguished members of the committee, the concept underlying legal services-access to justice for all Americans is one that I personally treasure, and one I will defend.

OEO's comprehensive health centers have charted new paths for delivering first-rate health care to poverty populations. Recently, as you know, 16 of the health centers were spun off to the Department of Health, Education, and Welfare, freeing OEO money for use in establishing still newer, and hopefully, even better means of delivering health care to the poor.

OEO's Senior Opportunities and Services, or SOS program, funded through Community Action Agencies, is providing desperately needed help to the aged poor-proportionately the fastest growing segment of the Nation's poverty population. SOS has enjoyed great success in generating private and public support: for every Federal dollar spent on the program, nearly 40 cents in public-private money or inkind services has been contributed.

OEO's programs for American Indians have been expanded. Funds for Indian economic development projects have been doubled. More than 60 of OEO's Community Action Agencies are now operated for and by Indians, while other agency funds have gone toward opening Indian-operated schools and a college, and Indian urban centers in seven cities.

OEO's programs for migrants, whose problems are as serious and difficult to address as those of any poverty group in America, including offering high school equivalency training for youngsters, an absolute necessity in breaking the poverty cycle; adult education and vocational retraining classes for adults; self-help housing programs, as well as day care, emergency food and medical aid, and mobile credit unions and health insurance plans.

OEO's Volunteers in Service to America, the VISTA program, has been a forerunner in efforts to promote organized voluntary action and involve more individual Americans in facing the poverty-related problems of our communities and our fellow citizens.

OEO is testing exciting new methods for linking our least fortunate citizens the poor who are also unskilled, or alcoholic, or addicted to drugs-with the rehabilitation and training they need to hold decent jobs.

OEO experiments with performance contracting in education should tell us whether or not the Nation's education establishment can and should refocus its success criteria on achievement rather than on teacher-pupil ratios and numbers of new classrooms.

The institution of tough new regulations and processes has tightened the agency's control over grants and contracts, is minimizing the potential for conflicts of interest, and has resulted in more competitive bidding while helping to end indefensible cost overruns.

OEO's nearly 1,000 Community Action Agencies, with which I am especially familiar, continue to constitute the agency's operational heart-and that heart, in my judgment, is beating more strongly, and more productively than ever.

The past 2 years have seen these local agencies strengthened from the standpoint of management, evaluation of their effectiveness, and newly won community support. The CAA's remain the unique institutions they were at the inception. They represent today an even more vital means of mobilizing all segments of the community into a partnership effort with the poor.

As you are well aware, the CAA approach has not always been universally accepted. In some cases needed support has been withheld by segments of the community that viewed the CAA as a threat to their own hegemony. In others, protest-style tactics used by the CAA's, or on their behalf, have served only to widen the gap between the poor and the nonpoor.

During the past 2 years OEO's leadership has repeatedly stressed the need for CAA's to serve as a catalyst for stimulating the broader community to action aimed at eliminating poverty. Again, it has been a case of facing up to the reality that all Americans must work together if poverty for some is to be overcome. By and large, the CAA's have responded well.

Along the same lines, OEO's leadership has insisted that the CAA's be more effective and responsible-action required to guarantee their acceptance by all Americans whose tax dollars support them, and to inspire trust in them by their poverty constituencies.

Some community action agencies have been closed when careful evaluation proved conclusively they were not serving the poor. Others have been helped to put their houses in order. But the majority have proven themselves effective and efficient in doing what they were intended to do: provide a workable mechanism for focusing the Nation's attention and resources on enabling the poor to lift themselves out of poverty.

While improving its own internal structure, OEO has mounted a major effort to strengthen its relations with other departments of the Federal Government, and with State and local governments. That effort is in keeping with OEO's role, as mandated by Congress and reemphasized by the President, as an intragovernmental spokesman for the poor. It also recognizes the reality that if this Nation is to address the problem of poverty, the effort must involve every institution, and not simply the OEO.

I am personally confident that OEO's present posture puts it in a position to be an increasingly effective part of the Nation's overall attempt to combat poverty and its devastating, unacceptable effect on human lives. And I am personally committed to doing whatever I can to help OEO serve the poor and thereby serve the Nation.

That concludes my statement, Mr. Chairman.

Senator NELSON. Thank you, Mr. Carlucci.

Are there any questions?

Senator JAVITS. Yes, I have some questions.

Senator NELSON. Go ahead, Senator.

Senator JAVITS. I thank the Chair very much for allowing me to question the witness immediately, as I am anxious to get to the floor to say something for our colleague, Senator Murphy.

I also wou'd like the record to show that were it not for the Chair, these hearings could not have been held at all. I think the nominees and the administration should know that, and were it not for Senator Yarborough's concurrence, and Senator Nelson's request, these hearings could not have been held at this time. I think it is a signal contribution to the public service and to the ability of the administration to function effectively that, not withstanding what must have been accepted as an entirely proper reason coming so late in the session, for not being able to conduct confirmation hearings, they nonetheless are being conducted. I think that point should stand first and foremost before we discuss all others.

Mr. Carlucci, you have an interesting career in respect of foreign as well as domestic service, have you not?

Mr. CARLUCCI. Yes, sir; I believe I have. I have enjoyed it. Senator JAVITS. You have served abroad with respect to precisely these problems, social and poverty problems?

Mr. CARLUCCI. I have, sir.

Senator JAVITS. Where did you serve?

Mr. CARLUCCI. In the Congo, in South Africa, in Zanzibar in 1964 and 1965, and Rio de Janeiro from 1965 to 1969, sir.

Senator JAVITS. In all those posts, you got along congenially and well?

Mr. CARLUCCI. I believe I did, Mr. Senator. I had some problems with the Government of Zanzibar at the time, but I think some of those problems could be attributed to the activities of the East Germans and the Soviets, but that is a rather long story.

Senator JAVITS. Your zeal for your work is what got you in trouble, wasn't it?

Mr. CARLUCCI. I think I had very good relations with the President of the country.

Senator JAVITS. Is it fair to say, and don't say it if it will hurt you, that you are relatively a nonpolitical official?

Mr. CARLUCCI. Senator, I consider myself a Foreign Service officer. Senator Scott did make one minor error. I am still a Foreign Service officer. Under the terms of the Foreign Service Act, a Foreign Service officer can accept a presidential appointment in any area of the Government. I intend to continue my Foreign Service career.

If the question is do I support the policies of this administration, particularly as they apply to the problems of the disadvantaged; the answer is a clear "yes."