Personal services The estimated average employment of permanent personnel for 1963 is distributed as follows: The total average estimated employment of 130 for 1963 includes the equivalent of 7 full-time employees to cover the part-time instructors. GENERAL ACCOUNTING OFFICE AUDIT RECOMMENDATIONS The General Accounting Office has made commercial type audits of our records each fiscal year since 1945 pursuant to Corporation Control Act (31 U.S.C. 841) without any exceptions that have not been resolved. The audit report for fiscal year 1960 (H.Doc. 80, 87th Cong., 1st sess.) did not contain any recommendations to the Congress. The General Accounting Office report states in part that: "The General Accounting Office has made an audit of Federal Prison Industries, Inc., for the fiscal year ended June 30, 1960, pursuant to the Government Corporation Control Act (31 U.S.C. 841). The scope of the audit work performed is described on page 13 of this report. Our audit disclosed no deficiencies or irregularities requiring special comment. "Federal Prison Industries, Inc., is a wholly owned Government corporation created by the act of June 23, 1934 (48 Stat. 1211; 18 U.S.C. 4121), and is operated as a funtion within the Department of Justice under the general direction and supervision of the Attorney General. The corporation conducts industrial operations in the Federal penal and correctional institutions for the purpose of providing employment for physically fit inmates. These operations are designed to give the inmates an opportunity to acquire knowledge and skill in trades and occupations that will enable them to earn a livelihood upon release. This opportunity is also extended to inmates in the military disciplinary barracks at Fort Leavenworth, Kans. The goods, articles, and services of the various factories and shops are sold to other Government agencies at prices not in excess of the current market price for similar products and services. "The corporation also conducts a vocational training program for qualified inmates in connection with the institutional and industrial activities. A placement service is operated to assist inmates in obtaining employment upon release." The corporation has carefully considered and reviewed with officials of the General Accounting Office their recommendations for improvement of procedures and practices. Those items having application have been adopted and those items which the corporation feels have no application, insofar as our operations are concerned, have been resolved with the General Accounting Office. Mr. ROONEY. These pages indicate that the request is for an authorization of $584,000 for administrative expenses and $1,147,000 for vocational expenses. This would be an increase of $40,000 over the present fiscal year in administrative expenses and $109,000 over the amount appropriated in the current fiscal year for vocational ex penses. What have you to say about this, Mr. Bennett? Mr. BENNETT. This is the authorization for administrative expenses, vocational training expenses, and so on, to be paid from the earnings of the Federal Prison Industries Corporation, which is the organization which operates industries which manufacture things for use of other Government departments. We have had a highly successful year this past year with gross earnings of about $6,300,000 against total sales of nearly $35 million. We have paid into the Treasury already a dividend of $4 million, and it may be there will be an additional dividend paid. Mr. ROONEY. That is for 1961 ? Mr. BENNETT. This present year; yes, sir. Mr. ROONEY. Was the $4 million to which you referred in the current year or last year? Mr. BENNETT. In the current year. Mr. ROONEY. How much did you turn into the Treasury in fiscal 1961? Mr. BENNETT. The President requested that we use any funds available to accelerate the purchase of raw materials during the hard times, so we used that fund to purchase those materials. The administrative expense limitation here for 1962 is $544,000, and the estimate for 1963 is $584,000. This extra $40,000 will allow us to maintain our 1962 employment level and cover increases in routine administrative costs, such as travel expenses, and so on. We also requested authorization to raise the vocational training expense limitation by $109,000. This additional money will enable us to hire a few more vocational instructors and purchase some additional training materials so we can continue to intensify our vocational training for these younger prisoners. May I say we have some 8,000 juveniles and youth offenders in our institutions, and one of the greatest needs they have is for vocational training and the learning of some skills. It is from the earnings of this corporation that the Congress has authorized us to employ the help. The basic authorization requires that we obtain the approval of this committee before we can spend any of the earnings of the corporation, and that is the reason I make this request the increased number of young offenders we are receiving in our institutions. INCREASE IN ENGINEERING AND PLANNING POSITIONS Mr. ROONEY. At page 31-4 of your justifications, with regard to the $40,000 requested increase in the administrative expense fund, you state: The increase of $40,000 covers $14,000 for two authorized engineering and planning positions which were lapsed in 1962, $16,000 to maintain the 1962 employment level, plus upgradings for six Industries agents, and travel expenses. This committee never has cut any of the requested funds for engineering and planning positions; is that right? Mr. BENNETT. That is right. We have been unable to recruit them up to this point. Mr. ROONEY. If you were given the money for these people last year, and if you did not spend the money, why would you have to lapse these figures? You have a cumulative approach to all these things. Just because the money is appropriated, if it is not used you cannot see turning it back. Mr. BENNETT. It stays in the account. Mr. ROONEY. We gave you the money for these two engineering and planning positions last year. You did not fill them. Now you come along and you want money for them. Mr. WILKINSON. Mr. Chairman, we are requesting permission to expend this money. It was not appropriated, sir. Mr. ROONEY. Certainly it was appropriated. It was authorized. Mr. WILKINSON. It was authorized for expenditure, yes, sir, but it remains in the till, so to speak, and it will become part of the dividend and our working capital. We have an approximate $4 million working capital and that remains part of that. Mr. ROONEY. Then you do not need an increase in the authorization. You already had the authorization last year for these two positions. Is that right? Mr. WILKINSON. Yes, sir. Mr. ROONEY. Why do you need this money on top of that? Mr. WILKINSON. We would need to continue it from year to year. As I understand it, we must have that continued authorization. Mr. ROONEY. I do not think you do at all. The authorization is now up to Mr. WILKINSON. Do we not need to have an approval and continuation of that authorization year by year? Mr. ROONEY. The authorization now is up to $544,000, which includes the two employees you want to obtain. Is that right? Mr. WILKINSON. I assume it is, sir. Mr. ROONEY. You withdraw? Mr. SMITH. This is perhaps erroneously stated. I think what should have been stated is $30,000 to maintain the employment level. That is what it amounts to. I do not know why the $14,000 was separately stated. Mr. ROONEY. It is $16,000 to maintain the employment level and upgrading, and $10,000 for travel expenses as the result of Public Law 87-159. Mr. SMITH. What I am saying is that I believe it should have been $30,000 for the 1962 employment level. Mr. ROONEY. How could it be $30,000? Your own figures say $26,000. It is $16,000 for the employment level. Mr. SMITH. I think the two figures should be added, the $16,000 and the $14,000. I think those positions were lapsed because of lack of funds. I will have to check on that to be sure but it appears to me that is the situation. Mr. BENNETT. Let Mr. Smith write a note and explain it, Mr. Chairman. Mr. ROONEY. That is it, then, gentlemen. Mr. BENNETT. Thank you, Mr. Chairman. FRIDAY, MARCH 30, 1962. STATEMENT BY AMERICAN LEGION REGARDING FEDERAL BUREAU OF INVESTIGATION Mr. ROONEY. We shall at this point in the record insert a letter under date of January 11, 1962, to which is attached a resolution of the American Legion with regard to the appropriation request for the Federal Bureau of Investigation. We are pleased to learn that once again they are not opposed to the appropriations requested for that highly important Bureau. (The letter and attachment follow :) Hon. JOHN J. ROONEY, THE AMERICAN LEGION, Washington D.C., January 11, 1962. Chiraman, Subcommittee on State, Justice, and Judiciary, House Appropriations Committee, The Capitol, Washington D.C. DEAR CONGRESSMAN ROONEY: I am writing to you in connection with hearings to be held by your subcommittee, during which consideration will be given to the budget request for the Federal Bureau of Investigation. As you know, the American Legion has always supported adequate funds for this Bureau, the most recent resolution being Resolution No. 132, adopted at the 1960 national convention, a copy of which is enclosed. We are not asking for the privilege of a personal appearance but we sincerely ask you and the members of your subcommittee to give this matter favorable consideration. In addition, we respectfully request that you incorporate this letter and the resolution in the record of the hearings. Thanking you for any consideration you may give to this request, I am, Sincerely yours, MILES D. KENNEDY, Director. 1960 NATIONAL CONVENTION OF THE AMERICAN LEGION HELD IN MIAMI BEACH, FLA., OCTOBER 17-20, 1960 Resolution No. 132. Committee: Americanism Commission. Subject: Organize support to combat communism. Whereas it is self-evident that the world conspiracy of communism has as its main objective the subjugation of all free governments everywhere, and endeavors to accomplish this through subversion, treaty breaking, and the creation of chaotic conditions; and Whereas as wartime veterans we are determined that our freedom, gained at such great cost, shall be maintained so that not only we but all other nations may not succumb to communism: Now, therefore, be it Resolved by the American Legion in national convention assembled in Miami Beach, Fla., October 17-20, 1960, That as evidence of our unity of national purpose we pledge our unqualified support to the national administration in its efforts to deal with communism in whatever manner it may deem necessary; and be it further Resolved, That proper support and funds be provided to the Senate Internal Security Subcommittee, the House Un-American Activities Committee and the Federal Bureau of Investigation, to successfully wage this fight. LIST OF WITNESSES Abell, H. W. Page 103 Andretta, S. A. 1, 23, 36, 39, 47, 52, 73, 103, 174, 191, 203, 281, 581, 613, 623, 626 Bassford, P. J. Bennett, J. V. Brown, J. C.. Butts, E. R 203 626 1, 36, 39, 52, 103, 174, 203, 626 1, 36, 39, 52, 103, 174, 203, 626 Chappell, R. A. Finucane, T. G. Francis, D. Geoghegan, W. A.. Hoover, Hon. J. Edgar. Kennedy, Hon. R. F. Lane, J. D Loevinger, Lee. Marshall, Burke. Maxson, W. P. Miller, H. J. Modlin, P. H. Mohr, J. P. Oberdorfer, L. F. Orrick, W. H., Jr. Palmer, C. W Prettyman, Hon. E. B. Sanford, Mrs. A. M. Smith, P. G... Sugarman, J. M. Tadlock, C. G.. Tolson, C. A. Wilkinson, F. T. Willis, Bennett_ |