Sunday Gazette-Mail from Charleston, West Virginia on July 11, 1976 · Page 25
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Sunday Gazette-Mail from Charleston, West Virginia · Page 25

Charleston, West Virginia
Issue Date:
Sunday, July 11, 1976
Page 25
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Page 25 article text (OCR)

Ill -July 11, 1976 Sunday Gawtte-Mail ---- '· Chirlnfin, WMt Virginia Rep. Passman Under Probe on Shipping Charges By William Robblu New York Timei Stnte* WASHINGTON-Rep. Otto E. Passman is under investigation by Agriculture Department agents for allegedly using his congressional powers to coerce foreign aid recipients to hire a favored shipping agency, according to government sources. Also, the sources said, the 76-year-old Louisiana Democrat recently took the case to that same snipping agency to the White House after the Agriculture Department delayed approval of one of the company's contracts. The approval was being held up because of an inquiry into reasons why a number of aid recipients had switched shipping agencies. Several of them had allegedly done so under pressure from Presman. * « « .' IN AN INTERVIEW, Passman said he had recommended the Washington-based §t. John Maritime Co. to the South Korean government, but denied using coercion. L Findings of the Agriculture Depart- jnent's investigative agents have been turned over to the Justice Department. .'. Passman, as chairman of the House Appropriations Committee's subcommittee n foreign operations, holds virtual veto 'power over aid allotments and, because of that power, commands respectful attention to his wishes both from countries that Jiope for help and from administration 'officials who seek his cooperation. " "For some governments, Passman's yontrol over aid is a power of life or , ·death," a federal official remarked recently. ; According to high government sources, (Passman acknowledged to agents of the ^Agriculture Department's Office of Inves- ;tigation that he warned South Korean offi- !cials, including President Park Chung ;Hee, that he would block further aid unless fthey took on St. John as their agent. V "They (the agriculture agents) were 'ready to read him his rights," one high /government source said. ": The same source said the agents had ·been deterred by higher officials who were ^concerned about possible legislative -re^percussions, including possible effects on "the then-pending foreign aid bill. r In the interview in which he says he was Basked whether he had used coercion, Pass- man's response was "My God, no. I wouldn't be fit to be a congressman if I made a threat like that." Passman's interest in St. John's success creates something of a mystery. He acknowledges supporting St. John for shipping agency contracts, but he said he was never met the owner of the company, Harry J. Smith Jr., except for one brief occasion in a Paris hotel lobby many years ago. Smith said in a telephone interview that he was happy to have the congressman's backing but did not fully understand Passman's interest. However, he added: "We think there is a good reason. We feel we are more competent and better prepared." The St. John Maritime Co., which also operates as St. John International Inc., has headquarters here and a branch office in New York. A number of agencies like St. John represent foreign governments in the chart- ering of vessels for aid shipments and other cargoes, Before South Korea's choice of St. John as its agent became effective last April, the Korean government handled its own ship charters through a mission based in New York. An aide at the Agriculture Department's office of the general counsel reportedly has given an advisory opinion that a threat to cut off aid unless a specific agency was hired would constitute extortion. «*« PASSMAN REPORTEDLY discussed the appointment of St. John on at least two of his visits to Seoul, one late last year and one early this year. When the Koreans finally agreed to name the concern as shipping agent but Agriculture Department officials delayed approval, he demanded a hearing on the matter with high administration officials. He discussed his complaint in the office of Lt. Gen. Brent Scowcroft, presidential adviser for national security. According to one high official source, Passman coupled his demand for imme- diate action with a mention of his work on the foreign aid bill, which his subcommittee then had under consideration. "You couldn't call it a threat to hold the aid bill hostage," the source said, "but everybody there knew aht he meant." Two other officials present at the meeting said they could not recall Passman's mentioning the foreign aid bill. Passman himself denied it, although he acknowledged taking his case to the high-level meeting. A number of shipping agencies are based in Washington, partly because much of their business involves shipments under the Food for Peace program, which is under the jurisdiction of the Agriculture Department. Contracts can be highly profitable to the agents, often running to more than $25,000 a ship, but shipping agencies are far from CONVENIENT LOCATIONS big business. According to one government source, the total taxable income of shipping agents from U.S. flag ships carrying Food for-Peace cargoes has been only a little more than $8 million for the last four years. The St. John Maritime Co. has been the most successful of all shipping agents in obtaining ship-chartering contracts with countries that receive aid under the Food for Peace program. Of 12 countries listed by the Agriculture Department as using shipping agents under the program, St. John Maritime and St. John International represent six. Passman reportedly has supported St. John in obtaining contracts with three of those countries. · He has also forced displacement of two other agents with whom aid-recipient countries had had long relationships, according to government and other sources. Otto E. 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