Tax-exempt Foundations

Mr. HAYS. The reason I am so careful about this series of questions is that I want them to be exact because there is a considerable principle involved here, Mr. Dodd.

Mr. DODD. We have tried to be very exact, too, Mr. Hays.

Mr. HAYS. Well, that will come.

Now, I will repeat this question No. 6, I am sure that I am just doing this in order to get back on the track, because question No. 7 that I am going to ask you is the key question.

Number six, have yon not by omission or alteration set forth these conclusions in any way so as to mislead the committee or the public with respect to your findings?

Mr. DODD. No, sir.

Mr. HAYS. Your answer was "No, sir"?

Mr. DODD. That is right; yes, sir.

Mr. HAYS. Now, Mr. Dodd, I received several copies of your mineographed statement which you distributed publically last week. I was amazed to find that these include two significantly different versions of your public testimony. I just got a group of your first day's hearings, and I was going over them, and the thing did not seem to be exactly the same, and I got to comparing it more closely.

Upon close examination, it appeared to me that one version has been clearly edited and changed from the other.

Now, under oath, you just said that you had made no omissions or conclusions which might mislead the committee. I have not had time to analyze all of the variations between the 2 editions of the report, both of which you say set forth your conclusions of 8 months' study. Mr. DODD. May I ask a question, Mr. Hays?

Mr. HAYS. Let me finish this.

But I find, for example, this specific omission which would appear to have been made solely for the purpose of deleting a conclusion of your study, which would have been favorable to foundations.

Specifically, on page 10 of the undoctored version, you conclude that foundations' grants were not directly responsible for an alleged deterioration in the standards of American scholarships. The actual words used in the undoctored version, with reference to the purported deterioration, were:

Cannot be said to have been due directly to foundation grants.

On page 9, with reference to the charge of favoritism in the undoctored version, you conclude that

We analyzed thoroughly, what was favoritism in the mind of the critic seems to have been litle more than a reasonable response to circumstances.

Now, here is the question: Is it true that both of these favorable conclusions were deleted in the version which you subsequently gave to this committee on Tuesday, not having, as you said then, a mimeographed statement ready, and which you presented to the press?

Mr. DODD. To the best of my knowledge, as I sit here right now, both of those conclusions are in the report.

Mr. HAYS. They are in the report that you gave to the committee on Tuesday?

Mr. DODD. To the best of my knowledge, yes, sir, as I sit here now, because they were a definite part of it.

Mr. HAYS. Let me ask you this, Mr. Dodd: Are there two separate and distinct mimeographed statements that you purported to have made?

Mr. DODD. Not to my knowledge, sir.

Mr. HAYS. Not to your knowledge?

Mr. DODD. No. The mimeographed report, Mr. Hays, that I have here is

Mr. HAYS. I have in my hand, Mr. Dodd, two reports, with the same cover sheet on them. They are starting out with page i, and with an identical foreword, and that is page ii, it is identical. Then we come to page 1, part 1, page 1, and they are identical. And page 2 seems to be identical. Page 3 seems to be identical. Pages 4 and 5 are identical.

But we come over to page 6, and there are several deletions. The two things do not read the same. And from page 6 on, you cannot compare them because what is page 6 on one, on the Cox Committee criticisms, and that goes on for 3 pages in the undoctored version, is all on 1 page in the doctored version.

Mr. DODD. I can only answer it this way, Mr. Hays, that those are two of our findings, and were reported by me. Those two findings are as you have expressed them.

Mr. HAYS. Well, Mr. Dodd, is it or is it not true that these conclusions that I have read were cropped out of the document you read to this committee?

Mr. DODD. Not to my knowledge, sir.

Mr. HAYS. They were not?

Mr. DODD. No.

Mr. HAYS. Well, we will have to go into the actual hearings. But the version which purported to be the version that came to me on Tuesday is not the same as the one I got by accident when I asked for some extra copies, apparently.

The CHAIRMAN. Will you yield? I would assume that you had various working memoranda and data preliminary to reaching the final draft which you actually presented to the committee. Ordinarily that would be the case. I do not know whether it was in this particular instance or not.

Mr. DODD. There were many working papers, Mr. Chairman, out of which I distilled this report, sir, and the 2 conclusions to which Mr. Hays makes reference are practically engraved in my memory, because they are two conclusions, that you cannot hold foundations responsible directly for this supposed deterioration in scholarship, and the other one is that this charge of favoritism, while it is understandable how it grew up, does not appear to me to be anything more than just what Mr. Hays read, an understandable and logical response to circumstances. I can understand how the criticism grew up.

Mr. HAYS. Well, Mr. Dodd, if you recall last Monday, I was very much surprised, as was the chairman apparently, and I am sure the press must have been, to find that there were no mimeographed copies of your statement. You read, as I recall it, your statement from a looseleaf notebook.

Mr. DODD. I did, sir, and I read it just as you saw me read it, from my own carbon copy.

Mr. HAYS. Do you mean to tell me that you do not have any knowledge of the fact that there was a mimeographed statement like this prepared and then another one which are significantly different? Mr. DODD. I don't know of any two mimeographed statements, one of which contained that statement and another one which did not. Mr. HAYS. Well, I have a copy of each one which came up from the committee office, and they are mimeographed obviously on the same mimeograph machine, if we have to go into that.

Mr. DODD. As far as I am concerned, Mr. Hays, I personally have spent and concentrated entirely on the content of the report and the mechanics of it, I have not

Mr. HAYS. I thought there was a little something funny about it the other day, about the fact there was no mimeographed statement, and the thing sort of began to add up in my mind when I found these two different statements. I thought perhaps that it had been decided that you would not present your statement, but would change it.

Now, was there any editing done at any time prior to your appearance here?

Mr. DODD. Yes, sir; there was editing done.

Mr. WORMSER. Mr. Hays, may I interrupt?

Mr. HAYS. I want to ask Mr. Dodd, and then, Mr. Wormser, if you want to go under oath and have me ask you some questions I will. But I want to get to the bottom of who edited that and when. Mr. DODD. All right, sir.

Mr. HAYS. That is what I am interested in right now. Can you tell me on what day and hour these changes were made, Mr. Dodd?

Mr. DODD. I don't look upon them as specific changes, Mr. Hays, but Mr. Wormser and I first went over this report on Thursday morning, which would have been 10 days ago. I was in the process of editing it and tightening it up, but that was a normal editing piece of work. Mr. HAYS. That was not done after it was mimeographed? Mr. DODD. No, sir.

Mr. WORMSER. Mr. Hays, may I just suggest that Miss Casey can explain. Mr. Dodd does not know the circumstances. And if you will trade, for a moment, Miss Casey for Mr. Dodd, she will explain the mechanics of what happened.

Mr. HAYS. If you can put somebody on the stand who can explain this, I will be glad to have him do it.

The CHAIRMAN. May I interject an amplifying question, Wayne? During the period that you were formulating this statement and making the various changes which led up to the final draft, did you have any important consultation with anyone other than the members of the committee and the members of the staff involved?

Mr. DODD. None, Mr. Chairman.

Mr. HAYS. Before you leave the stand temporarily, Mr. Dodd, I want to make clear what I am trying to get at. I have gone over this. You say that this purports to be your conclusions, after long months of study. The one version has two very significant statements in it that the other does not. And what I am driving at is: How after long months of study can you suddenly throw out these two important conclusions?

Mr. DODD. I can readily understand the importance of the question, Mr. Hays. This report, if you will recall, at the committee meeting, was my effort to describe for the benefit of the committee the nature of

the work done, a description of its own findings in general terms, and the direction in which the facts tended to point.

That was the purpose of this report, and that report in my estimation should have had in it everything significant to be helpful to the

committee.

Now, the two questions and the two statements to which you make reference have in my judgment been an important aspect of it all along.

Mr. HAYS. Then you would say that you want in that the conclusion that foundation grants are not directly responsible for any deterioration in the standards of American scholarships?

Mr. DODD. That is my feeling, sir. Yes, sir.

Mr. HAYS. And you want in there, also, with reference to the purported deterioration, that it cannot be said to have been due directly to foundation grants?

Mr. DODD. Yes, sir. And the other has to do with this inferred criticism of favoritism.

Mr. HAYS. All right.

I would like to have whoever can explain these two mimeographed versions to take the stand, and I would like to ask some questions about it.

The CHAIRMAN. Do you solemnly swear that the testimony you are about to give shall be the truth, the whole truth, and nothing but the truth?

Miss CASEY. I do.

TESTIMONY OF KATHRYN CASEY, LEGAL ANALYST, SPECIAL COMMITTEE TO INVESTIGATE TAX-EXEMPT FOUNDATIONS

Mr. HAYS. Miss Casey, do you have any knowledge of two different mimeographed versions of Mr. Dodd's statement?

Miss CASEY. Yes, I do, may I explain

Mr. HAYS. Yes. I would like in your own words to have you tell us about it.

Miss CASEY. Well, at the time the hearings were set and it was decided that Mr. Dodd would present a staff report, it was thought that we should have mimeographed copies available. When the report was I thought close to its final draft, I will have to confess I jumped the gun and had the stencils cut. We ran

Mr. HAYS. Right there, when was that? Can you give us an exact date of it?

Miss CASEY. It was only Friday and Saturday, because we had quite a bit of difficulty getting the copies done by the duplicating office here in the Capitol.

Mr. HAYS. That was Friday and Saturday, prior to Mr. Dodd's appearance on Monday?

Miss CASEY. That is right. No distribution was made, and not even to the members of the committee.

Mr. HAYS. I am aware of that.

Miss CASEY. One reason Mr. Hays, was, that we were at the office until midnight Saturday, and I thought perhaps your office might be closed.

Mr. HAYS. I am sure it was. If it was not, it should have been.

Mr. HAYS. Do you mean to tell me that you do not have any knowledge of the fact that there was a mimeographed statement like this prepared and then another one which are significantly different? Mr. DODD. I don't know of any two mimeographed statements, one of which contained that statement and another one which did not. Mr. HAYS. Well, I have a copy of each one which came up from the committee office, and they are mimeographed obviously on the same mimeograph machine, if we have to go into that.