STEAMSHOVEL AT THE TREASURY
Steele, Addison
Steamshovel At The Treasury By ADDISON STEELE Washington, D. C. AS THE WAR moves on, the moneymakers become progressively less cautious and more grasping. As we get over the production hump, the...
...The alleged objective of the Act is to pay off the contractors and sub-contractors quickly, reimbursing them for all losses on goods which-the Government no longer wants to purchase...
...contractors and the Government is encouraged to pay off the amounts of these settlements without any review at all...
...This will be bad enough in every instance...
...6g) In other words, if a contractor did not ask for everything under the sun when he made his contract, his oversight is repaired for him at public expense by the generosity of Congress and the Administration...
...Baruch's hand runs the steamshovel that is about to ladle gold for the war contractors out of the Treasury...
...Any "reasonably necessary" expenditure of the contractor is to be paid, without any indication of what these words mean...
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...As we get over the production hump, the multi-million dollar contracts may be fewer, but they will be replaced by multi-million dollar termination agreements, and recent action assures that in paying off the war contractors, virtually all the restraints are to be thrown overboard...
...ment and a prime contractor or between a prime contractor and a sub-contractor, does not provide for as much profit on termination as this Act would allow, the contract is to be revised upward...
...Discharging The Policeman 6The Government is specifically required to pay ? some claims twice...
...This wholesome objective is cited to refute every criticism of the Act...
...7f) 7The Government must advance between 90 per ? cent and 100 per cent of the amount due a contractor before it has an opportunity to determine what that amount is...
...6c) 3The Act lists every item of cost to be paid which ? ingenious brains could devise, and then sets no standard at all by which those costs are to be calculated...
...16) The Senate passed this bill without a roll-call vote...
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...8) 8The Government is to guarantee any bank loans ? made by private banks to contractors...
...Several months ago The Progressive carried the story of Baruch's plan to turn all the war plants over to a handful of monopolists...
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...The contractor may be penalized for over-estimating his claim, says one sentence—¦ but the next provides for cancellation of the penalty...
...Under it, the Government must foot any bill the prime contractor and the sub-contractor agree upon between themselves...
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...It will be highway robbery when the sub-contractor is a corporate affiliate of the prime contractor, as so often happens, for in these cases the more the prime contractor yields to the sub-contractor's demands, the more it profits itself...
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...The Congress, over Progressive objections, has put the gold on the sidewalk and discharged the policemen...
...Now we can report that his contract termination program, approved by Congress, signed by the President, and effective since July 21, will turn the public cash box over to the same group...
...6d) The language is broad enough to require the Government to pay for the contractor's cocktail parties at the Statler Hotel in Washington, and this will probably be done...
...ceding section- and all the other "hurry, hurry, hurry" provisions of the Act, the Government can never subsequently review the settlement and scale it down to proper proportions unless it can prove the technical and highly difficult offense of fraud...
...The House passed it, 326 to 21, with Progressive Congressmen Hull and Sauthoff among the 21 in opposition...
...6b) 2No matter how great the errors caused by the pre...
...In other words, the Government must accept the contractor's estimate...
...After the war, the Government will no longer need the guns, ships, munitions, and other goods still being produced, and will terminate the contracts...
...The Act specifically provides that the more "reliable" (which will probably mean "the bigger") the contractor involved, the less the review shall be...
...10) 9The Comptroller General, the agency which nor...
...It is Bernard Baruch who is at the helm in the great raid again...
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...Here is a list of specific provisions aimed at giving away more of the public money than the Government owes: 1Contractors may be paid off on the basis of their ? actual costs, but this need not necessarily be done...
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...4If any war contract, whether between the Govern...
...If the agency prefers, it may use "standard, average, or Jmated" costs...
...5The prime contractors may settle with the sub...
...It must be understood that the Act deals with about $200,000,000,000 worth of war contracts...
...that is, where the Government pays a prime contractor which in turn should pay its own sub-contractors but fails to do so, the Government must pay off the sub-contractor also...
...These contracts are made between the Government and the prime contractors (General Motors and du Pont, for example), which in turn let portions of the work to subcontractors who may themselves further subdivide and sublet...
...mally reviews all Government expenditures to determine that only proper payments are made, is expressly excluded from exercising its normal function...
...The eventual job may be done under a layer of contracts seven or more tiers deep...
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...7) This clause will cost the Government more in improper payments than all the rest of the Act put together...
...Specific Provisions Through 25 pages of extremely technical language, the contract termination statute produces this effect, though never directly stated: "If your business is big enough you can have all the public money you can carry...
Vol. 8 • August 1944 • No. 33
