GSA: Washington's Most Durable Mess (Fortune, 1955)April 29, 2012: 9:00 AM ET
By Herbert Solow
Editor's note: Every Sunday, Fortune publishes a story from our magazine archives. In light of the controversy surrounding the General Services Administration's spending habits and the recent Congressional hearings on the subject, we go back 56 years to August 1955, when Fortune reported the GSA "just as much of a mess today as it was in 1952." It's safe to say that not much has changed in the last half-century.
The big General Services Administration has long needed a big cleanup. But GSA is still in the same sort of mess it was in when the Republicans took over. The main ingredients: favoritism, factionalism, sloppiness, and waste.
Three years ago the Republican party asked a chance to "clean up the mess in Washington." One aspect of the mess was the giant General Services Administration, purchasing agent and property manager for much of the U.S. Government. GSA's 25,686 employees buy, sell, construct, rent, lease, maintain, design, research, mine, manufacture, transport, store, and otherwise "service" most federal agencies outside the Pentagon (and in some respects the military, too). GSA holds almost $9 billion in land, buildings, automobiles, clerical supplies, and other physical assets ($4 billion more than General Motors' assets). Its purchases in fiscal 1954 came to $1 billion. GSA is, in effect, a vast, diversified commercial-industrial corporation in the government, and its operations touch thousands of enterprises outside the government. And GSA is in just as much of a mess today as it was in 1952.
The irony of this situation is not confined to the fact that the Republicans campaigned against messes. The mess that Truman left behind in GSA was especially susceptible to a businessman's cleanup, and the Eisenhower Administration is full of businessmen. To enrich the irony, the very conception of GSA as a consolidated service agency was Republican in origin, for Public Law 152, which created GSA out of several older agencies in 1949, was adopted on the recommendation of the first Hoover Commission.
The GSA mess arises mainly from messy appointments. True, Truman's appointee as Administrator, Jess Larson, an Oklahoma politician, has given way to Eisenhower's, an Illinois politician named Edmund F. Mansure. But this has brought no benefit to GSA. Nor has there been any net improvement in the echelon just below the Administrator. In short, the Hoover idea of GSA has never had a fair test.
The new Administrator claims there have been improvements in GSA. Mr. Mansure personally examines travel requisitions of his Washington staff; he encourages removing clips from waste paper; to limit phone talks, he has put three-minute egg timers on subordinates' desks. There are weightier changes, too. Among them are a promising scheme for lease-purchase of federal office space, the contracting to private industry of some property-management services, and simplified accounting. It is, in short, hardly possible to employ 25,686 people in so diversified an operation as GSA and fail to produce islands of positive achievement.
The mainland of GSA is, nevertheless, the most durable mess in Washington. It would take a congressional investigation to light up the whole of it, but this article aims to illuminate a number of corners. The story involves great U.S. corporations and marginal operators; oriental swindlers and Caribbean grafters; Chicago politicians; Washington influence-peddlers and fixers; Republicans and Democrats, and, above all, timeserving bureaucrats who are neither Republicans nor Democrats, nor yet honest mavericks, but just job holders, glowing with contempt for the U.S. taxpayer. Happily, the cast also includes some honest, capable, GSA employees, men harried, half underground, and hoping for better days.
If better days are to come, they will come only when the White House decides to clean up GSA. As of mid-July, the White House was quietly looking into GSA. Should it look hard enough, GSA might have a new Administrator before this article appears. In that event, this article may serve as explanation of a long overdue reform -- and as a report on what a new Administrator would be up against.
An expensive reputation
Fifty-four-year-old Ed Mansure, the first Republican Administrator of GSA, speaks of himself as a businessman. He says that he made "considerable money" in Chicago "and so I have a rather expensive reputation." Nobody has challenged his financial integrity. Superficially, Mansure seems to be a public-spirited citizen on a self-sacrificing tour of Washington duty, with plans for early return to his home state and an industrial career. But he has burned some bridges behind him. Two years before Mansure went to Washington in April, 1953, he had sold his business. Soon after his appointment to GSA, he disposed of his residence in plush, placid Libertyville near Chicago, home of Adlai Stevenson and of many Republican businessmen. Mansure is in politics wholeheartedly, and, if he can manage it, permanently.
Mansure actually was as much in politics as in business even before coming to Washington. True, he did preside over a $5-million-a-year upholstery and drapery-trim manufacturing enterprise inherited from his father. But from the time he graduated from Chicago's Kent College of Law, Mansure gave much time to the gamy politics of his native Cook County. He managed several local Republican campaigns and in 1937 became the party's state treasurer. He held posts on three state boards, to one of which he was appointed by Governor Stevenson, his neighbor across the road, and he was busy in the Illinois Manufacturers Association, Red Cross, the Chicago Crime Commission, and similar bodies. He backed Stassen for the presidency in 1948 and joined Chicago's Citizens for Eisenhower before the 1952 convention.
Mansure says that he puts merit above party ties, and he has, in fact, not fired a single one of GSA's holdover bureaucrats, either for cause (which abounds in GSA) or at pleasure (and he has this option in a number of important cases). Defining practical politics as "just back-scratching," he speaks with contempt of "civic do-gooders," characterizing their code as "hypocrisy."
Among Republican Mansure's cronies are "practical politicians" of both parties, including the no-do-gooder variety. He praises Jess Larson, his Democratic- predecessor as GSA boss. Larson was associated in an oil deal with the influence-peddler, Frank Nathan, one of the most memorable witnesses turned up by the King Committee investigation (1951-52) of income-tax scandals. But Mansure says that when he took GSA over, he sought out Larson for his views on personnel and operations. Soon after came the indignant resignation of GSA's Deputy Administrator Russell Forbes, a nationally recognized expert in public procurement and related matters, who had helped Hoover to conceive the GSA and who, after leaving GSA, was associated with the second Hoover Commission. Only one high-echelon GSA job has been given to a Republican since Mansure came in -- and that was at the instance of the White House.
"Ed Mansure," says a long-time Libertyville neighbor, whom Mansure cites as a character reference, "could easily get over his head in very shallow water." The explanation of the GSA mess is not so simple, however. For Mansure has the guidance of a highly experienced Chicago politician, the man who got him his job. This man is William J. Balmer of Chicago. In the words of a mutual acquaintance who has discussed GSA business with both men, Balmer has Mr. GSA in his pocket. Whenever Balmer walks in, Mr. GSA bows." Says Mansure: "Balmer is a king and holds court."
The silver fox
William J. Balmer, who got Mansure his job, is the boss of the 17th Ward Republican organization and vice chairman of the Cook County executive committee of the Republican party. In political clubrooms and in the Loop's Bismarck Hotel, where he can sometimes be run to earth, sixty-three-year-old Balmer is known, only in part because of his white hair, as the Silver Fox.
Balmer says he has been in politics "ever since I can remember." He managed "Big Bill" Thompson's second mayoralty campaign, was a commissioner in Big Bill's administration, perhaps the most corrupt in Chicago's fabulous history. During the war Balmer was much in Washington. Mansure says that at that time Balmer had "access to the White House." One of Balmer's main activities was wangling government orders to permit the production of civilian items barred by general regulations. Balmer says he believes in doing things for government employees who are helpful in getting contracts and who later "look at you, thinking 'he made all that dough out of me.'" He gets them hotel reservations, he says.
Mansure calls Balmer a "business consultant." Some others call him a trouble shooter, especially for people who, under Illinois law, must argue with an elected tax assessor about how much personal-property tax they shall pay. According to Mansure, Internal Revenue has investigated Balmer, "but has never found anything." "On finances, Balmer is one of the closest-mouthed persons I ever knew," says Mansure. "He has two accountants and he doesn't let one know what the other knows." He has been sued often by individuals, by a hotel, a bank, and the telephone company, for amounts from $30 to $5,500.
Mansure and Balmer have been acquainted since the Thirties, intimately acquainted since the 1950 county campaign. Mansure regards Balmer as a political genius. He once brought together Balmer and Edward Ryerson, a top Illinois businessman (Inland Steel), civic leader, and Republican stalwart. Says Mansure: "It was cat and dog." Mansure says that, for Ryerson, Balmer is "a moral question." But not for Mansure. "Without reservations," he says, "I admire Bill Balmer as a friend. I wish we had a dozen Bill Balmers in Chicago." Balmer often visits Mansure in Washington. Mansure's appointments to second-level GSA jobs are mostly Chicago Republicans close to Balmer.
Even before Mansure was publicly named for his job, it was being said in Chicago that henceforth Balmer would influence GSA contracting. And Mansure admits that Balmer has talked with him about GSA contracts. Among the instances that he says he can remember is the effort of a Moline, Illinois, architect to get a GSA contract for a Rock Island, Illinois, project, and the effort of a Milwaukee building-material manufacturer to sell his product to GSA.
Not all Balmer proteges get the deals they seek, but the Paint Products Corp. of Elgin, Illinois, is one that did. Through a friend, the company got in touch with Ed Moore, who is Balmer's partner in an insurance-brokerage business. Moore is chairman of the G.O.P.'s Cook County central committee. Through Moore and Balmer, Paint Products met John Skeen, director of the Chicago regional office of GSA. In the words of A. W. Johnson, president of Paint Products, the company "really got going through Mr. Balmer and Mr. Moore." They sold paint to GSA.
With a nice sense of timing, Balmer & Moore registered in Illinois as insurance brokers in May, 1954. Mansure had just set in motion a process that was to make available a good piece of insurance brokerage. For a projected $40-million overseas construction job, there was to be chosen a subcontractor who would have to buy a workmen's compensation policy. Now, thanks to Mansure, two-thirds of the brokerage fee is to go to Balmer & Moore. The contractor, hired ninety days after Balmer & Moore became registered brokers, is Snare-Merritt, now expanding the capacity of GSA's Nicaro nickel plant in Cuba. After all premiums are paid, the Nicaro commission of Balmer & Moore will be about $44,000. (The other one-third is to go to a Cuban broker who is actually to do the technical work on the policy.)
Mansure admits that Balmer discussed Nicaro insurance with him. And Balmer sent to Mansure one Erwin Shafer, a Balmer & Moore employee, whom Mansure in turn sent to his Nicaro operating officer. Later the agent revisited Mansure, finally telling him that "things" looked "pretty good." So they were. "Insurance," Mansure says, "is a byproduct of politics."
Balmer has also been interested in government surplus. For one set of surplus deals, a group of men including Balmer are now defendants in federal court in Chicago in a $400,000 fraud suit. The statute of limitations has run on criminal prosecution, but a civil action was brought last December by the Justice Department. In 1946, according to the complaint, the defendants induced veterans to permit use of their names so that Balmer and the others could fraudulently purchase unused trucks and other then scarce and much-sought items. Some of the defendants' agents, according to the U.S. attorney, were ex-convicts, one a counterfeiter. And when some of the veterans wanted to pull out of the scheme, they were threatened with violence.
At the moment the case is pending, and Balmer is trying to negotiate a cheap settlement. Balmer says that the alleged facts were known to the government when the Democrats were in power. As he sees it, the Democrats' failure to act shows that the present prosecution is political. He blames Senator Everett Dirksen of Illinois, an old opponent, for the action begun by U.S. Attorney Robert Tieken. But Tieken is an Ike appointee drawn by Attorney General Brownell from a top Chicago law firm -- Winston, Black & Towner.
Balmer's friend Mansure has interested himself in the case. He echoes Balmer's arguments and has asked the prosecutor not to press the suit, which he has characterized as "a shame."
Of Mansure's friend and sponsor Balmer, more later. Let us now take a look at some GSA operations with which, so far as FORTUNE knows, Balmer has no connection. None of these involves a spectacular sum of money. Taken together, however, they suggest the scope of the GSA mission and of the GSA mess.
From Laramie to Thailand
1. In March, 1954, GSA began to dispose of a surplus experimental alumina plant built during the war at Laramie, Wyoming, at a cost of almost $5 million. The procedure has been protracted over sixteen weary months. The initial range of bidding was set inordinately low by poor business tactics. GSA at first called for bids and got three. It took none. Later, after ten weeks of negotiating exclusively with Monolith Portland Midwest Co. of Los Angeles, California, GSA contemplated selling to them for $1,110,000. When GSA informed one of the other original bidders, Ideal Cement Co. of Denver, that its bid was to be rejected, Ideal raised to $1,200,000. GSA decided to take this bid. Then a congressional subcommittee under Democrat Jack Brooks of Texas investigated, and last spring it asked Mansure to call for new bids. Reluctantly he did so; Ideal offered $1,373,000, and apparently will get the property. But whatever happens, it is clear that GSA can get at least $173,000 more for the plant than it was ready to take before Brooks's committee acted.
2. The Brooks Committee is also looking into GSA's handling of a piece of land near Seattle, Washington, which was condemned by the government during World War II. According to GSA, it had a verbal understanding with the former owners to sell back to them. In June, 1954, Standard Oil of California asked GSA's permission to prospect on this land for oil. GSA refused. The reason given for denying the taxpayers a possible windfall is a high point in bureaucratic willfulness: to allow oil prospecting might disturb GSA's appraisal of the land!
3. In January, 1954, just before the Democrats took over the House, a Republican subcommittee issued a little-noticed report about four GSA tungsten developmental contracts given to mining companies in Thailand. Written in Larson's time, three contracts were still operational under Mansure. After the market price of tungsten began a sharp decline, the Thai contractors delivered ore that they had bought from lower-cost operators, rather than ore mined by themselves. This fraud ran over $1 million, and the committee headed by Representative Charles Brownson, Republican, of Indiana, condemned the "improper" administering and policing, as well as the "ambiguous language" of the contracts.
4. There was a $360,000 loss of critical stockpile material in an unsafe warehouse that burned up in May, 1953. With several sets of GSA inspectors at cross-purposes, the material was destroyed just as some of the inspectors had predicted it would be. In GSA there is internal argument over the blame, but the neglect is admitted.
Slow and sloppy
Now let us consider some broad criticisms, originating in other parts of the government.
1. Government agencies required to make certain purchases through GSA complain of slow service. In fact, the gap between GSA's receipt of an order for goods supposedly in stock and the date of delivery to the customer agency averages two weeks -- three times what GSA calls its "norm." GSA has never got around to performing for the Veterans Administration the procurement services that are part of its legal mission.
2. Although GSA is supposed to handle real property disposal, President Eisenhower felt compelled in December, 1953, to create a special Surplus Real Property Disposal Project, attached to the Budget Bureau, to stimulate and accelerate GSA's disposal work. But that work continues to drag. Until a few months ago, the Washington office of GSA did not even possess a full list of GSA's disposable real estate.
3. The inventory records of the critical-materials stockpile are not entrusted to GSA's Emergency Procurement Service, the stockpile operator, but to the Comptroller of GSA. Commissioner A. J. Walsh of EPS says he has trouble getting information he needs for operating purposes. He also says that the Comptroller's record-keeping staff is grossly inflated. In any case, nobody really knows what is in the $4.9-billion stockpile, as distinguished from what some invoices say is there, and Congress has called for a checkup.
4. Bidding procedures are often strange, as in the Laramie alumina case. At a recent House committee hearing, Representative Porter Hardy Jr., Democrat, of Virginia, proposed studying GSA's "general practice of submitting invitations for bids which are not invitations for bids, but are merely invitations to become eligible to negotiate." Others have also criticized these procedures.
5. When the second Hoover Commission and its task forces studied GSA, they praised its records management job, but found fault with almost every other operation they examined. Here are a few Hoover complaints: "Instead of creating one centralized, coordinated traffic organization ... GSA superimposed upon the already confused situation still another traffic agency .. . Those regulations on real property management which have been issued by GSA are not applied by other Executive agencies ... There has been no adequate inventory of the stockpile ... GSA does not provide adequate centralized direction and control in the management of government-owned and leased real property used by Executive agencies ... The potential economies and efficiencies … have not been realized."
The nickel fiasco
Perhaps GSA's messiest single mess is Nicaro nickel. Nicaro is a U.S. Government-owned nickel refinery built in the Cuban jungle during World War II, and shut down in 1947. Previous FORTUNE articles (April and June, 1952; June, 1953) have told how the reactivation of the Nicaro plant was botched by GSA in Jess Larson's time. For political reasons, it may be recalled, Larson chose as manager of the plant a Dutch company, Billiton, totally inexperienced in nickel production. The purpose was to please Robert Butler, then Ambassador to Cuba, a notable Democratic fundraiser. Butler, in turn, was anxious to please some Cubans (including a notorious grafter) who wanted to elbow their way into the Nicaro project. This elbowing Billiton was willing to accept, but otherwise Billiton did so badly with Nicaro that Larson was compelled to force them out. Thereupon the National Lead Co. took control, the Cubans remaining as junior partners with increased influence.
So much for Nicaro in Larson's day. Mansure's record is no better -- and he is responsible for all major decisions on Nicaro.
Production has never reached the level called for in the manager's contract with GSA. Even with nickel at a record price level, GSA -- the Hoover Commission has noted--loses money at Nicaro. Efficiency, as measured by unit costs and the rate of metal recovery, has lately declined. A promised byproduct, cobalt, has never been produced.
What is more, the whole arrangement is probably illegal. For Congress, as GSA's General Counsel, Maxwell Elliott, has told Mansure, gave GSA no authority to run a nickel plant beyond a trial period that ended more than two years ago. Mansure says Nicaro's legal status "is in a friendly tangle."
Despite all this, GSA began almost three years ago to prepare to expand Nicaro by 75 per cent at a minimum cost of $40 million, thus boosting the direct investment of the government in the risky nickel business to a total that may approach $100 million. The excuse is the severe nickel shortage.
The expansion has been wretchedly bungled. It was not undertaken directly by GSA through operating subcontractors, but by National Lead as a supervisory contractor for GSA. National Lead then let subcontracts to the operating architect-engineer and the operating constructor. In order to supervise its supervisor, GSA has retained a metallurgical-engineering consultant, Singmaster & Breyer, at a monthly fee of $3,500.
Expanding the fiasco
The company that actually does the building is a fifty-fifty partnership known as Snare-Merritt Co. Mansure explains that he felt "there should be two constructors for this big job." Actually, this job is smaller than the pioneering wartime job of building Nicaro, which was well handled by a single company. That company was Frederick Snare Corp., famous in Cuba for over fifty years as an American constructor. Now it is the Snare of Snare-Merritt.
The Merritt of Snare-Merritt is Merritt-Chapman & Scott, whose previous Cuban venture, a 1952 water-supply project, ended in a law suit. The boss of Merritt is Louis Wolfson, antagonist of Sewell Avery and manipulator of Capital Transit. At best, Merritt was superfluous. To elbow its way in, it got the help of National Lead. National Lead's main product is paint material and Merritt's subsidiary, Devoe & Raynolds, makes paint. National Lead pressed Merritt's cause with Mansure.
So, by the way, did Secretary of Air Harold Talbott. Says Talbott: "I met Louis Wolfson in 1948 when I was chairman of the Republican Finance Committee." Talbott was also a major Republican money-raiser in 1952, but says he "never heard of Wolfson" in that campaign. He says that when he backed Merritt, with Mansure, it was "casual, at a dinner party."
Merritt had another avenue to Mansure. For Lewis M. Schott, Merritt's executive vice president for administration, knows Bill Balmer. Schott used Balmer -- who is experienced in this sort of thing in the political field -- to solicit proxies in Wolfson's unsuccessful fight for control of Montgomery Ward. Knowing that Balmer was a friend of Mansure, Schott discussed with him the contract for Nicaro. Balmer in turn discussed it with Mansure. The discussion, says Mansure, was "casual, at a dinner party."
Dining out is a well-known feature of Washington life, of course, and what with one thing and another, Mansure decided that Merritt should get 50 per cent of the Nicaro deal. Snare glumly took what was left. The fee to Snare-Merritt is $1 million.
The deal has not been good for the taxpayer. Snare has staffed the top of the on-site operation with men experienced in Cuban and in Nicaro operations. But the purchasing side of Snare-Merritt has been increasingly dominated by Merritt, with the backing of National Lead and the blessing of GSA. Interestingly enough, more than $300,000 worth of material has been bought by Snare-Merritt from subsidiaries of Merritt-Chapman & Scott and of National Lead.
Slow and high
At least one contract, for big cranes, did not go to the low bidder but to Marion Power Shovel, a Merritt-Chapman & Scott subsidiary. Marion, which bid $230,800 and offered two-week delivery, prevailed over a Baldwin-Lima-Hamilton distributor, who offered three-week delivery but asked only $185,000. Marion delivered one crane four weeks late by dint of using a rebuilt motor instead of a new motor as originally called for. Delivery of the second crane has been even more seriously delayed.
Delays have been heaped upon delays. It took GSA almost five months to name National Lead as its prime contractor. National Lead consumed three months in coming to its curious choice of a Snare-Merritt partnership. At first this delay was ignored by GSA, though it constituted a breach of contract, then it was forgiven. There have been other delays: in starting a program of workers' housing; in completing a construction-progress forecast; in completing engineering design (a job let out to H. K. Ferguson Co., a subsidiary of Morrison-Knudsen). After one-fourth of the two-year contractual time period, only about one-sixteenth of Nicaro's expansion had been done, as measured by payments made. It seems impossible that the job will be finished on the date set as a target in the contract -- unless the estimated cost of $40 million is grossly overrun by crash steps. Already there has been an overrun of almost $500,000 in engineering costs -- 25 per cent.
How GSA got that way
The origins of GSA's many messes go back to the first Truman Administration. In 1947 Jess Larson, later to be Truman's GSA Administrator, was General Counsel of the War Assets Administration, later to be dumped into GSA. WAA was headed by Major General Robert M. Littlejohn, who had won high praise as Eisenhower's top quartermaster in the European theatre. But W AA was a businessman's job, not a general's. In 1947, a congressional investigating committee headed by Ross Rizley (since appointed to the chairmanship of the Civil Aeronautics Board by President Eisenhower) took a look at Littlejohn's WAA. Here are some of its findings:
Slow disposal, small money return, inadequate control of regional offices, "unbelievable conditions of bad organization," improper accounting, deceptive reporting, possible fraud, failure to inventory millions of dollars worth of desirable surplus property, loss of much inventoried property, inaccurate and misleading sales figures, the loss of quantities of sales documents, countrywide violation of prescribed procedures, repeated promotions of individuals who made serious mistakes. "The amount in money," the committee concluded, "which this administrative failure has cost the taxpayer is inestimable, but it is certainly enormous." A White House aide of the period (Truman's) summed things up: "Littlejohn did a messy job."
Eventually, Littlejohn quit and Larson took his place. The Rizley committee sent material to the Department of Justice for study of possible criminal or civil action against people involved in frauds. The department never took any action--for reasons that will be related below. And Larson left the WAA personnel undisturbed.
Many of the W AA bureaucrats had been the first castoffs of the war agencies in 1945-46. Yet many of them, because WAA at its birth had a problem of quick staffing, were given high grades and salaries. And in 1949 they were taken into GSA with full civil-service rights when Congress dumped WAA into the new GSA for liquidation and Truman made Larson GSA's first Administrator. Personnel of the other agencies merged into GSA remained largely on the operating level, but the WAA refugees moved into the new agency's vacuum -- central staff positions and regional directorships.
Today, seven of the ten regional directors of GSA are ex-WAA men. So are all but one of GSA's four staff office chiefs. So are many of their top aides; a couple of second-echelon men in Public Buildings; the assistant general counsel in charge of real property management and disposal activity. So are almost all the GSA people ever involved in the Nicaro fiasco. So is Mansure's confidential secretary, who used to be Larson's confidential secretary.
So is GSA's No. 2 man, Assistant Administrator Almon E. Snyder. When Larson was Administrator, Snyder was his office assistant. He was close to influence-peddler Nathan, who testified that he brought occasional delicatessen lunches to Snyder's office. Mansure recently promoted Snyder to be his Assistant Administrator at a salary of $14,800. "When I'm away," says Mansure, "Snyder has the authority to sign documents for me; he knows my thinking."
Within GSA there has been some courageous, but on the whole ineffective, opposition to the WAA crowd controlling most of the staff and regional offices. It has come from the chiefs of GSA's four main operating divisions.
All the operating chiefs, when Mansure took over GSA, were old hands who had been legislated into GSA: three commissioners -- A.J. Walsh (Emergency Procurement, the stockpile), W.E. Reynolds (Public Buildings), Clifton E. Mack (Federal Supply Service)--and Dr. Wayne C. Grover, the National Archivist.
All these men took part in an abortive revolt against the staff clique, during a strange interregnum of ninety days between the departure from the Administrator's office of Democrat Larson, in January, 1953, and the arrival, with spring, of Republican Mansure. The revolt was invited by the man who served during those ninety days as Acting Administrator -- Russell Forbes, the first GSA Deputy Administrator, the man who had helped the first Hoover Commission to conceive GSA, and a conscientious public servant.
When Larson left, Forbes offered the commissioners their first opportunity to register their critiques. He set up a Committee on the Cost of Staff Services headed by the National Archivist. The report described GSA as being in a situation where everybody is boss, nobody can be held responsible, and our chief Central Office characteristics are friction, confusion, paperwork, and delay. [Operations are] continuously hampered ... In the field, we encourage [expensive personnel] to engage needlessly in the make-work manufacture of administration to the tune of several hundred thousand dollars a year ... If the recommendations in this report are adopted, annual savings would run to nearly $2 million as a minimum."
Forbes did not subscribe to all expressions of the Grover committee report, finding some of them extreme. But Forbes was anxious to cut the GSA budget and economize wherever possible, and he welcomed the report's general line.
The WAA clique took alarm and leaked copies of the report--supposedly for the Washington brass only -- to regional directors. One copy turned up in the Chicago regional office. At that time Mansure, with his high hopes of getting the Administrator's job, was dropping in there regularly. John Skeen, ex-WAA and the man who later was to be helpful to Balmer's friends, Paint Products Corp. of Elgin, was then -- and is now -- Chicago's regional director. In the Chicago office Mansure saw the Grover committee report. He also heard it denounced.
When Mansure shortly thereafter arrived in Washington, to take over GSA, he addressed the agency's top-echelon men, both staff and operating. He was, he said, a personal friend of Larson. He made it clear that there would be no further encouragement of the type of criticism expressed recently by the operating chiefs. "I take full responsibility for shelving it," says Mansure of the Grover report. And he bore down on the operating chiefs and Deputy Administrator Forbes
Mansure so chastened Dr. Grover that even today the National Archivist will not discuss the episodes of the interregnum beyond saying that "some people" did not view his report as constructive. If Commissioner Mack's Federal Supply operation is fairly effective, the main reason is the close relationship between Mack and his field men, dating back to Treasury days. Mack manages to communicate with them out of channels, evading the regional directors, but Mansure now campaigns against "evening telephone calls" and similar desperate operating methods. Though Commissioner Walsh ostensibly has 700 stockpile employees under him, most of them have been put under the thumb of the staff clique in the central staff offices or in the regional offices. Commissioner of Public Buildings Reynolds took a pounding from the WAA clique, retired, and went to work for Webb & Knapp.
The successor to Reynolds as Commissioner of Public Buildings is Peter Strobel, a distinguished New York engineer who took the job on the urging of the White House and at considerable financial sacrifice. Strobel is not happy with the GSA setup. For one thing, Mansure has decentralized most of the records of the Public Buildings Service. Strobel is largely ignorant of the actions of his field men and the procedures they follow. He sometimes finds his efforts to control field operations impeded by Mansure's personal control of travel authorizations.
As for Deputy Administrator Forbes, who helped to father GSA, Mansure aimed to lift his administrative power. When Forbes, balked and disillusioned, was asked by the second Hoover Commission to serve as a consultant in November, 1953, he quit GSA "with pleasure."
The quality of justice
So the old WAA people have been riding high all through Mansure's regime. Though he slurs the loyalty of his operating chiefs ("They would still like to be the XYZ Service instead of a division of GSA"), he defends and pampers the WAA clique. He pooh-poohs the Rizley Committee report that condemned them so scathingly. True, the Justice Department never took action as a result of the Rizley Committee's suggestion, but when that has been said, how much has been said?
The Justice Department to which the Rizley Committee referred certain of its WAA findings, for possible criminal or civil action, was the Justice Department of Attorney General (now Supreme Court Justice) Tom Clark. Here is part of the picture of that notorious department as painted by a congressional investigating committee in 1952-53: shockingly inefficient handling of contract fraud cases, acceptance by department officials of favors from persons against whom they were supposed to be defending the government's interests, improper interference with the work of a St. Louis grand jury "to an extent which merits grave censure."
Responsibility for many of the conditions and events was charged to Assistant Attorney General Caudle. But the committee concluded that much of the blame properly belonged to his superiors. Among the superiors named as responsible was one Peyton Ford. From 1947 to 1951 Ford was Assistant Attorney General in charge of the civil division, then the chief assistant attorney general, and at times in 1950- 51 Acting Attorney General. Peyton Ford is today the law partner of Jess Larson, who was WAA's General Counsel when the Rizley material was sent to the department.
No suit was brought. In the Justice Department today, there is in the central files no "closing-out" memorandum as required by departmental regulations, to show why no criminal suit was brought. The papers were, as explained last month by a department spokesman, "just sent to the central files without ever being properly closed, either on a formal or informal basis." The date of the pigeonholing was sometime in 1950, when Peyton Ford was the second man in the department. And the criminal statute of limitations ran out in 1951.
For Mansure, the whole matter is closed. He says he has read only a part of the Rizley Committee report and none of the King Committee bearings. "If there are any skeletons in the GSA closet," says Mansure pleasantly, "I haven't looked for them, and you can quote me on that."
There remains the question: How did President Eisenhower ever get stuck with this Mansure? The answer goes back to the infighting before the Republican national convention of 1952.
One of the many politicians, big and small, who worked for Wesley Roberts and Herbert Brownell, top Ike tacticians, was Bill Balmer of Chicago. Balmer was what Roberts called his "gunner" for the Illinois delegation, before and during the convention. It was understood that on the second ballot Balmer could help swing more than twenty Taft-pledged votes to Ike. In the event at Chicago, Ike won on the first ballot, with Illinois going fifty-nine to one for Taft, but Gunner Balmer was credited with a good preparatory performance.
Right after the election, Balmer and Moore, using the letterhead of the Cook County Republican organization that they control, wrote to Brownell. In tones of familiarity, they asked for lVIansure's appointment to the GSA job. The letter was eventually forwarded to Sherman Adams, Eisenhower's chief of staff. Brownell, who as Attorney General has since fully supported the Chicago fraud suit against Balmer, raised no warning flag. Adams was also the recipient of letters in Mansure's favor that were forwarded by Roberts, who had become Republican National Chairman. Adams also received copies of favorable press articles, warm letters from businessmen and Congressmen, and an FBI field report that showed no blemish on the Mansure record.
In Chicago there was some opposition to Mansure, whose intimacy with Balmer had come under observation at the national convention. It is said to have been led by Edward Ryerson of Inland Steel and R. Douglas Stuart of Quaker Oats, the latter now Ambassador to Canada. Both these men are long-time acquaintances of Mansure. But, on balance, they made little impression. As a lawyer, private enterpriser, civic leader, and party stalwart, Mansure looked all right to Roberts, to Brownell, to Adams, and to the President. And Balmer, not yet hit by the fraud suit, was thought of by top Republicans as just another ward leader and preconvention "gunner"--if anyone thought of him at all.
Mansure got the GSA job. He had had it, as this article went to press, for twenty-seven months. How much longer he would have it was up to Mr. Eisenhower.