Mr. FLANAGAN. Did you know whether or not Mr. William Boyle was employed by this corporation at the time the loans were pending at the RFC? Mr. DODDS. No, sir; I had no intimation, I was entirely unaware of any connection that he had with it, if he had such a connection. Mr. FLANAGAN. I believe you previously testified that you had no calls from either Mr. Boyle or any representatives of the Democratic National Committee in connection with this case? Mr. DODDS. That is right, to the best of my recollection. Mr. FLANAGAN. Have you received any gifts or gratuities of any kind, other than possibly a casual lunch, either directly or indirectly, from the American Lithofold Corp., or any of its officials? Mr. DODDS. No, sir; I have not. I have never had lunch with any of them, if my recollection serves me correctly. I certainly don't recall it if I did. Mr. FLANAGAN. I have no further questions. Senator MCCLELLAN. No further questions. Senator HUMPHREY. I am sorry, Senator Hoey, but I arrived late at the meeting, and I prefer not to ask any questions. Senator HOEY. Well, I want to thank you very much, Mr. Dodds, for your appearance here, and I may say that this will be released to the press in the morning at 9:30 because you understood that the evidence would be available. Off the record. (Discussion off the record.) Senator HOEY. On the record. Mr. DODDS. I would like to mention the fact, and I think you know this, that I am supposed to go to St. Louis for the grand jury, and I suppose I will be at liberty to go? Senator HOEY. That is perfectly all right. Mr. WELSH. Thank you very much for Mr. Symington. Senator HOEY. We will meet again in the morning at 10 o'clock in the regular committee room. (Whereupon, at 4: 15 p. m., the subcommittee recessed, to reconvene at 10 a. m., Saturday, September 15, 1951.) INFLUENCE IN GOVERNMENT PROCUREMENT SATURDAY, SEPTEMBER 15, 1951 UNITED STATES SENATE, The subcommittee met at 10:20 a. m., pursuant to adjournment, in room 357, Senate Office Building, Senator Clyde R. Hoey (chair. man of the subcommittee) presiding. Present : Senator Clyde R. Hoey, of North Carolina; Senator John L. McClellan, of Arkansas; Senator Thomas R. Underwood, of Kentucky; Senator Karl E. Mundt, of South Dakota; and Senator Richard M. Nixon, of California. Also present: Francis D. Flanagan, chief counsel; Howell J. Hatcher, chief assistant counsel; William Leece, assistant counsel; and Ruth Young, clerk. Senator HOEY. The subcommittee will come to order, please. I will call Mr. Ernest B. Howard. Have a seat, Mr. Howard. I would like to state at the opening of the session today that the examination in the executive session yesterday afternoon was that of Mr. Chauncey Dodds, and that it was released at 9: 30 this morning to the press. The reason it was held in executive session was because of health and the danger of excitement to Mr. Dodds. Mr. Dodds had an attack on June 20, and had been out for 2 months, and his doctors felt that any excitement might be dangerous to him. It was held in executive session, but the full testimony was released at 9:30 this morning. Now, Mr. Howard, will you stand up, please, and hold up your right hand? Do you solemnly swear that the testimony you shall give in this cause shall be the truth, the whole truth, and nothing but the truth, so help you God? Mr. HOWARD. I do. TESTIMONY OF ERNEST B. HOWARD, BUSINESS LOANS DIVISION, RECONSTRUCTION FINANCE CORPORATION Senator HOEY. Have a seat, Mr. Howard. Will you give to the reporter your name and present address, please? Mr. HOWARD. My name is Ernest B. Howard. Do you want my home address? Senator HoEY. Yes. 81249-51-pt. 3-10 Mr. HOWARD. My home address is 2744 Woodley Place NW., Washington, D. C. Senator HOEY. What position do you hold with the Reconstruction Finance Corporation? Mr. HOWARD. At the moment? Senator HOEY. Yes. Mr. HOWARD. Frankly, officially, I do not know. In January, or up to January of this year I was Chief of the Business Loans Branch, which was abolished. I was told by Mr. Dodds that I had been reduced to examiner. I asked him what I should do, what would be my duty, and he said, "Just what you have been doing, and assist Mr. Ronan, who is taking over the job of consolidation of the four branches." I have been in that position since. I have had no official notification from personnel. Within the past few weeks I have been told that I had been made Assistant Chief of the Business Loans Division, which is a new set-up. Senator HOEY. How long have you been with the Reconstruction Finance Corporation? Mr. HOWARD. Since July 13, 1932. Senator HOEY. Prior to the position which you were holding at the first of this year, as Chief of the Business Loans Division, what was your connection with the Reconstruction Finance Corporation? What position did you hold? Mr. HOWARD. You mean beginning Senator HOEY. Prior, from the time you came until you held this position. Mr. HOWARD. I came in as a clerk in the treasurer's office. I stayed, well, I think I have it right here, a complete record, if you would like to make it part of the complete history from personnel, if you would like to make it part of the record. Senator HOEY. You have it listed there? Mr. HOWARD. Yes, sir; it is all printed. Senator HOEY. All right. You may place that in the record. (The document referred to will be found in the appendix under supplemental data on p. 1255.) Senator HOEY. All right, you may question, Mr. Flanagan. Mr. FLANAGAN. Mr. Howard, what was your position in the Reconstruction Finance Corporation in the late fall and early spring of 1948-49? Mr. HOWARD. 1948-49? Mr. FLANAGAN. Yes, sir. Mr. HOWARD. I was Chief of the Business Loans Branch. Mr. FLANAGAN. You were Chief of the Business Loans Branch? Mr. FLANAGAN. And generally what were your duties as Chief of the Business Loans Branch at that time? Mr. HOWARD. My duties were to see that work, when it came in, was handled properly, and handled promptly, that is, the applications, amendatory applications, and things pertaining to loans. Mr. FLANAGAN. Did you also have the responsibility of assigning cases to examiners in your division? Mr. HOWARD. It was my over-all responsibility, but it was delegated to Mr. R. G. Dickinson as to new applications, and the administrative end of it was delegated to Mr. W. A. Hendrick. Both of them were made Assistant Chiefs of the Business Loans Branch. Mr. FLANAGAN. Was a part of your job to work on the merits of a loan, or were your duties, for the most part, administrative? Mr. HOWARD. My duties-well, I would say in my job description, that all through this time, and even before that, my job was dealing with the public callers who came in, prospective borrowers, or people who were borrowers already. Now, I think that averaged about 60 percent of my time, which is reflected in my job description. Senator HOEY. Gentlemen, I must ask you not to take any pictures during the taking of the testimony. Would you like to have us stop now and give you an opportunity to take one picture first? All right. After this will you please take your pictures when the witness is first called to the stand. (Brief interruption.) Senator HOEY. All right. You may proceed, Mr. Flanagan. Mr. FLANAGAN. Mr. Howard, how long have you been acquainted with Mr. J. E. Toole? Mr. HOWARD. Sometime during the early thirties, I don't know. I think he came in later than I did into the Corporation, after 1932. I don't remember just when he came in. Mr. FLANAGAN. Did you consider Toole to be a close personal friend? Mr. HOWARD. Well, I don't know. I knew him very well. We were in the same room with about 25 or 30 other men. His desk, for a while, was only just right next to me. Maybe there were more men than that in the room. Mr. FLANAGAN. Do you recollect that in December 1948 Mr. Toole came in to see you about the American Lithofold Corp. loan? Mr. HOWARD. Specifically, no, but I can say that he did come in practically every time he came in to Washington. He came by to speak to me in some manner. Mr. FLANAGAN. Did he discuss the loan with you? Mr. HOWARD. Not the details of the loan, no, sir. Mr. FLANAGAN. You now say that he never discussed the details of this loan with you? Mr. HOWARD. Not as to the details of the loan. Mr. FLANAGAN. How would he discuss the loan with you? Mr. HOWARD. As to where it was in the process of being acted upon. Mr. FLANAGAN. In other words, he merely discussed the status of the loan? Mr. HOWARD. That is my recollection, sir. Mr. FLANAGAN. Do you have any recollection that he ever discussed the mertis or the details of that loan in any way with you? Mr. HOWARD. Not down to the minute details. He might have mentioned the loan, but as to the details, or what the set-up was, what they proposed to do, I don't recall ever talking to him about it. Mr. FLANAGAN. Referring to Mr. Toole's diary, there is an entry on December 22, 1948, and he states this: After lunch, Bill— and he is referring to Bill Rochelle, who was an examiner for the Reconstruction Finance Corporation After lunch, Bill and I called on Ernest Howard who suggested that Bill phone Charlie Alexander, agency manager in St. Louis, and tell him I was |