Anderson, Robert B., to be Secretary of the Navy. Keyes, Roger M., to be Deputy Secretary of Defense__ III NOMINATION OF ROGER M. KYES TO BE DEPUTY SECRETARY OF DEFENSE WEDNESDAY, JANUARY 28, 1953 UNITED STATES SENATE, COMMITTEE ON ARMED SERVICES, Washington, D. C. The committee met, pursuant to call, at 10:10 a. m., in room 212, Senate Office Building, Senator Leverett Saltonstall (chairman) presiding. Present: Senators Saltonstall (chairman), Flanders, Smith (of Maine), Hendrickson, Case, Duff, Cooper, Byrd, Hunt, Stennis, and Symington. Also present: Senator Ferguson; William Darden and Verne D. Mudge, of the committee staff. Chairman SALTONSTALL. A quorum of the committee being present, the committee will come to order. The Chair at this point would like to insert in the record the formal reference of the nomination to this committee: 77] NOMINATION REFERENCE AND REPORT IN EXECUTIVE SESSION, Ordered, That the following nomination be referred to the Committee on Armed Services: Roger M. Kyes, of Michigan, to be Deputy Secretary of Defense, Chairman SALTONSTALL. The Chair would say this: Mr. Kyes' previous testimony already has been made public. It seems to the Chair that an exception to our usual rule of considering all nominations in executive session should be made with the remaining appointees to defense positions where their testimony has been made public. If there is no objection on the part of any member of the committee, the Chair will open the hearing to the public, hoping that the committee will not make any exception for the future, that is, will not make this a precedent for future hearings on confirmations, because the Chair strongly believes that they should continue to be held in executive session for obvious reasons. Is there any objection on the part of any member of the committee that the hearing on Mr. Kyes this morning be opened to the public? The Chair hears none. Will you open the door, please. Now, Mr. Kyes, you have told the Chair that you have a brief prepared statement which you believe will cover the subject that is of 1 interest to the committee. Would you care to read that memorandum or take it up in any way you see fit. STATEMENT OF ROGER M. KYES, NOMINEE FOR DEPUTY SECRETARY OF DEFENSE Mr. KYES. Sir, I didn't prepare this as a formal statement. I was trying to save the time of the committee by having notes that I could run down. Should I be confirmed, I hope I can operate in future with this committee on this basis. Chairman SALTONSTALL. The committee, the Chair knows, will be glad to hear you in any way you see fit to proceed. Mr. KYES. As you know, the last time I had the privilege of testifying before this committee no question was raised with respect to my disposing of my General Motors stock or any other stocks which I held. Since that time the question has been raised in connection with the confirmation of Mr. Wilson with respect to his stock holdings in General Motors Corp. Since, as Deputy Secretary of Defense, if confirmed, I will have virtually the same responsibilities as the Secretary of Defense, I immediately authorized Mr. Wilson to advise this committee that I would sell my stock in General Motors Corp. I, therefore, advise this committee that, if confirmed, I will sell all of my General Motors stock, with the exception of that portion which I may give to charity, and, in addition to this, I will dispose of my stock in Aeroquip Corp., Monsanto Chemical, Abbott Laboratories, General Mills, International Business Machines, Gulf Oil, Minnesota Mining & Manufacturing, and Cities Service without retaining any beneficial or reversionary interest. I believe that these are my only holdings which could possibly be related to any transactions that might take place with the Department of Defense. You will note that I plan to retain my holdings in the National City Bank of New York and the Fidelity Phoenix Fire Insurance Co. because I cannot possibly conceive of these involving any conflict of interest in connection with my position with the Department of Defense. A further question, however, was raised with respect to Mr. Wilson concerning the disposition of General Motors stock which might be received in the future under rights which accrue to him upon the termination of his employment as well as the dividend equivalents he might receive with respect thereto prior to the receipt by him of such stock. On this question, as it applies to me and involving as it does 1.150 shares of undelivered bonus stock, I subscribe to the same position taken by Mr. Wilson, and it is my personal belief that the stock will be converted into cash shortly and that the cash will be held and delivered subject to the provisions of the bonus plan. Chairman SALTONSTALL. In other words, Mr. Kyes, following the lead of Mr. Wilson and being in very much the same position as Mr. Wilson, you have sold all of your stock held in your name or in an agency's name of General Motors. You have sold all your other stocks except a bank stock and an insurance company stock, and you have stated to the committee that it is your firm belief that the stock to which you are entitled under the bonus plan will be sold very shortly. Mr. KYES. That's right, except that I have not sold the stock as yet because I haven't been confirmed, and I obviously will make no move until the Senate makes its decision with respect to my appoint ment. Chairman SALTONSTALL. Do you know of any possible conflict of interests between your position as Deputy Secretary of Defense and any private corporation with which you may be connected, if and when you become confirmed and sworn in as Deputy Secretary? Mr. KYES. I don't know of any possible conflict. As you see, I have tried my best to clear up everything, and if there is anything more, I just don't know of it. If there is any suggestion on the part of anybody as to something I haven't even dreamed of, I will be glad to look at that. I would like to be on the basis of full confidence with the Armed Services Committee. Otherwise I will be of very little value in testifying before you, in the future. Chairman SALTON STALL. The Chair believes he expresses the feeling of all the members of the committee that we will be happy, only too happy and glad, to work with you. Senator Flanders, have you any questions? Senator FLANDERS. No. It seems to me that Mr. Kyes has covered the whole ground in a very few words. Chairman SALTONSTALL. Senator Hunt? Senator HUNT. Mr. Chairman, I haven't any questions. I intend to vote with the committee with reference to Mr. Kyes' nomination. He is in exactly the same position, I see no difference at all between his situation and Mr. Wilson's, but I do have, Mr. Chairman, some hesitancy in giving my full approval to both the president and vice president of the largest corporation that we do business with moving in on one establishment of Government, the Defense Establishment. Now, these men are absolutely honest. I think they will bend backward to see that General Motors doesn't get favors, but it just doesn't seem to me good public relations or good policy, and that is all I have to say, Mr. Chairman. Chairman SALTONSTALL. Thank you, sir. Senator Smith? Senator SMITH. Mr. Kyes, you tell us that you will dispose of your stock if and when you are confirmed. Would you care to give us the date? Mr. KYES. Is it satisfactory to say before April 1? Senator SMITH. April 1. Thank you very much. Thank you, Mr. Chairman. Chairman SALTONSTALL. Senator Stennis? Senator STENNIS. Mr. Chairman, I regret that I was a few minutes late. This point might have been covered. It was raised. I was disturbed some as to Mr. Wilson. Now in disposing of this stock, is any of it going to your family? Mr. KYES. None whatsover. As I said in my statement, it will either be sold outright or be given to charity. Senator STENNIS. You have covered the point. All right. Mr. KYES. I might give part of it to charity. I am divesting myself entirely of any General Motors stock and I previously testified that my wife and my children have none. Senator STENNIS. Well, I want to commend you for your very fine statement there, and also your statement that you want the confidence |