The Federal Highway Program - Super-Graft on Superhighways

The Federal Highway Program - Super-Graft on Superhighways
April 1, 1961
April 1961
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IN 1975, Americans will have 111 million cars, trucks and buses. To keep these wheels rolling, the federal government has embarked on the biggest public-works project in history, spending billions of dollars for 41,000 miles of superhighways crisscrossing the nation. Millions of this money already, have been spilled over into waste, inefficiency and fraud. There is nothing secret about this.

Newspapers and Congress have uncovered scandal after scandal. But the revelations have not evoked the same indignation and outcries that scandals like the Dave Beck plunder of the Teamsters treasury have caused. Instead, much of the public has a boys-will-be-boys attitude about corrupt highways. When you spend 41 billion dollars in a public program, influential and impatient people say, you have to expect some tomfoolery, so let’s get on with the show. Americans want their highways in a hurry.

“When you have a program of this magnitude,” Rep. Gordon H. Scherer, (R.-Ohio), told the House last July 1, “you are bound to attract the chiselers and the grafters.” Carl A. Carpenter, Assistant Chief of Physical Research for the Federal Bureau of Public Roads, questioned closely about deficiencies in a road inspected by state officials who had accepted secret payments from the contractor, offered a House subcommittee on December 13 this analysis: “If we have to face these slight deficiencies in jobs that we have, I think they may be a lot easier to live with than extensive deliberation in this interstate program.” What about the money lost by the taxpayer? “The taxpayer is the same person who is eagerly waiting for this job to get done. . . .” Carpenter replied. And Al C. Church, State Highway Engineer for the Florida State Road Department, dismissed deficient roads and paid-off inspectors by noting, “If the taxpayers never get a worse job than that, they are going to be mighty lucky.”

These statements evolve from a national mood, a mood aptly summed up by Rep. John A. Blatnik, (D.-Minn.), who heads the House subcommittee investigating the highway scandals: “In the fourteen years I have been here, never has a multibillion-dollar tax program and construction program had such overwhelming confidence and support, not only in Congress, but from taxpayers all over America.”

Taxpayers are supporting the program because it promises to satisfy their hunger for cars and roads. If the program progresses, by 1972 superhighways will link 90 per cent of all cities with more than 50,000 population. A driver will be able to travel from coast to coast at sixty to seventy miles an hour without encountering a single stop sign, traffic light or railroad crossing. In the main, these highways, with entry only at selected places, will have four lanes, swelling to six and eight lanes near metropolitan areas. President Kennedy has predicted that “the interstate system when completed .. . will save at least 4,000 lives a year.”

The estimate of total cost has varied. When Congress approved the program in 1956, the Bureau of Public Roads figured the cost at $27.5 billion; Congress, raising the federal gasoline tax, agreed to put up 90 per cent, the states paying the rest. Since then, however, the bureau has raised its estimate to nearly $41 billion, and a controversy is brewing in Congress over President Kennedy’s proposals for levying taxes to meet the difference. In fact, some of the attempts to minimize the scandals stem from the fear of highway supporters that Congress, in disgust, will refuse to authorize enough money to complete the system by 1972.

HOW corrupt is the program? A veteran newsman has said that if an editor sent six reporters around the country digging up information, he could put half the country’s state highway officials in jail. The statement is no doubt somewhat exaggerated. But Blatnik’s subcommittee, in one of the fairest and most painstaking investigations of recent years, has quietly uncovered a depressing panorama of bumbling federal bureaucrats, bribe-taking highway engineers, chiseling contractors, fat-cat state commissioners and cracking roads in the federal superhighway system.

At its first hearings in February, 1960, the subcommittee unfolded a near-comic tale of bureaucratic ineptitude. The highway program had been sold to many Congressmen as a defense measure. The program officially is titled the National System of Interstate and Defense Highways. But truckers, assigned to cart missiles from California to Cape Canaveral, testified they almost never could move the Atlas and other huge weapons under the fourteen-foot clearances of the highway overpasses. Sometimes a driver would deflate the truck’s tires and move the Atlas under a bridge inch by inch while traffic on the highway backed up for twenty miles. On other occasions, the truck simply took an alternate, roundabout route.

For years, the Department of Defense and the Bureau of Public Roads had been unable to clear through their labyrinthine channels an agreement on a minimum height for bridges and overpasses. One unit of the Department of Defense told the Bureau in 1957 that fourteen-foot bridges were fine, while another ordered the production of missiles that could not clear these bridges. In 1959, the Department and the Bureau decided to study the matter further. But, while more study was under way, the Bureau continued to approve bridges with only fourteen feet of clearance. Suddenly, on January 27, 1960, when Blatnik’s investigators started probing the matter, the Bureau and the Department hurriedly reached a decision: all bridges and overpasses must have sixteen feet of clearance.

Since the start of the program, the Bureau of Public Roads had approved 2,259 bridges and overpasses on the fourteen-foot standard at a cost of $374 million. If the structures had had sixteen-foot clearances in the first place, the cost would have been only $18.7 million more. Reconstruction will cost $205.7 million — a clear waste of $187 million.

IN MAY, 1960, the subcommittee investigated construction of the thirteen-mile Skelly Bypass in Tulsa, Oklahoma, which had cost the federal government almost $6 million. After examination of the finished product, already starting to crack, the directors of a private engineering firm and private testing laboratory testified that the contractor evidently had billed the state for $524,689 worth of materials which he had never put into the road. Testimony revealed that. the contractor and the state engineers and inspectors had covered up the shortage by submitting false testing samples, making fraudulent bookkeeping entries, using improper scales, padding bills, adjusting record books and ignoring state specifications. There was no evidence, however, that the contractor had bribed the state engineers and inspectors.

But the subcommittee did hear testimony linking the contractor, Layman & Sons, with a State Highway Commissioner. Lee Olen Downey, a partner in the D & G Construction Company, testified that Commissioner Tom H. Kight was a silent partner in D & G when the State Highway Commission awarded a contract to Layman & Sons for a section of the Skelly Bypass. Layman & Sons immediately subcontracted half the sodding work to D&G.

Federal inspectors never uncovered any of this fraud. Even after the Tulsa Tribune, in a November, 1959, editorial, “Is Uncle Sam on the Job?,” questioned the worth of the road, the Bureau of Public Roads found nothing. Disturbed by the newspaper criticism, the Bureau ordered its regional inspector, Ralph Cecil Glover, to examine the bypass again. “No stone was left unturned in efforts to secure the highest type of performance from the contractor,” Glover wrote in his report. “. .. While accusations have been made .. . [they] have not been substantiated to date. Those making the accusations can hardly be said to be competent to judge such matters.” But Glover, following federal policy, simply had scrutinized the reports of the state laboratories and engineers — reports based on fake samples and fraudulent bookkeeping. He had not made a single attempt to test the road material himself.

Subcommittee counsel Walter R. May questioned Glover at the hearing:

Q. Did you accept those reports at face value?
A. Yes.
Q. You did not ever go behind those reports to determine exactly what was happening?
A. No.
Q. Does the Bureau of Public Roads expect you to go behind those reports?
A. No.

THE subcommittee turned to Florida in hearings last December. Testimony revealed that six contractors, who had handled Florida road contracts worth more than $70 million in the last four years, had distributed $54,000 to $75,000 in gifts to thirty-three Florida state highway engineers since 1956. These came in the form of secret cash payments, unrepaid loans, liquor, lumber, hunting licenses and bonuses for extra services. William L. Cobb, head of a large construction company, admitted he also gave gifts to state road officials in Georgia, Mississippi, Tennessee, North Carolina, South Carolina and Alabama.

Cobb told the Congressmen he deplored the practice and had ordered an end to it, but other contractors and state personnel professed to see little wrong with the gift-giving. Charles E. Bailes, Jr., general superintendent of Cone Brothers Contracting Company, said his firm had mailed state engineers secret payments of $25 a week to get “that little effort” the company needed to complete the job. “And I believe the payments helped,” Bailes said. “I am obligated to my company to do the best job I possibly can. ... As long as I didn’t engage in anything that I thought was faulty, I would employ many different things to get this accomplished.” One after another, the state engineers denied they had done anything improper to please the gift-bearing contractors.

BUT the subcommittee heard evidence that indicated laxity, at least, on the part of some of these paid-off engineers in seeing that the contractor met specifications. H.C. Weathers, Florida’s chief testing engineer, testified that he had found substandard material, poor workmanship and poor inspection on a $2.5 million strip of highway built by Cone Brothers near Tampa. Weathers said some of the deficiencies were serious. Rep. William C. Cramer (R.-Fla.), described the Howard Franklyn Bridge over Tampa Bay as rough and substandard. It had been built under the supervision of state engineer Joseph R. Maseda, Jr., who received $4,700 in four years from several contractors, including the Hardaway Contracting Company, which had built the bridge, “If this is the kind of bridge we’re building in America then there is something wrong with our standards,” Cramer said. In closing the hearing, Blatnik said he found “it difficult in the light of all the testimony to believe that the conditions prevailed without involvement of a quid pro quo, whatever its nature might have been.”

In its latest hearings, which ended March 10, the subcommittee, again spotlighting Florida, discovered that the state had lost hundreds of thousands of dollars because of the slipshod way it got rid of houses and other property on rights-of-way it had acquired. In many cases, the state paid a contractor to dispose of a house, which he proceeded to sell at a neat profit. For example, one contractor, Paul Slusher of Maitland, testified the Florida Highway Department had paid him to clear a house on an Orlando right-of-way for $100. He then sold it for $24,500. Testimony revealed that the state paid $103,000 for the removal of structures in Miami when it might have sold the property for $372,500. The loss to the state: more than $475,000. In contrast to this sorry situation, Frank Balfour, former chief of the rights-of-way division of the California Highway Commission, testified his state had made a 6 per cent profit on the sale and rental of properties it had acquired on rights-of-way since 1956. At the close of the hearings, Blatnik cautioned all states to get every possible dollar out of the houses and properties on lands they acquire for highway construction.

DESPITE the muck it has uncovered, the subcommittee still has not reached the core of corruption. The most damaging fraud in the program involves the $7 billion the states will spend to acquire rights-of-way.

A consulting firm hired by the Federal Bureau of Public Roads has produced a 200-page report on land appraisals in Massachusetts. The report is still secret, but, in a series of articles last May, The Boston Traveler said that an unnamed state official had put pressure on land appraisers to issue false, inflated evaluations. The Traveler said the estimates appeared to be 25 to 50 per cent too high. The subcommittee has opened an office in Massachusetts and its next hearings probably will focus on that state. In the meantime, the Bureau has refused to reimburse the state for its rights-of way purchases.

A scandal on right-of-way acquisitions also appears to be stirring in Florida. Last December 1, Al Rogero of the State Road Board admitted to a legislative committee that he was an unnamed partner in a group that had bought a tract of land in St. Petersburg which was later needed for a highway. Rogero testified that the group bought the land for $165,000 in 1956 and sold it for $240,000 a year later. Rogero’s fee: $24,000. But the official denied any conflict of interest. “I simply have refused to build a wall around myself and stop the purchasing, selling and developing of properties simply because I was a member of the State Road Board,” he testified.

The subcommittee has a host of other areas awaiting investigation: an evidently excessive use of expensive, private consultants by several states, including Massachusetts, Pennsylvania, New Jersey and Maryland; monopoly practices by suppliers of highway material, particularly in the West; collusive price-fixing among contractors, such as the subcommittee noted in Oklahoma, where sodders met in secret before submitting bids to the state; the care of homeless persons who have been bulldozed out of the way by highways cutting through large metropolitan areas; and waste such as the General Accounting Office found in Nevada, where three interchanges were built on a three-mile stretch of highway to handle an average of eighty-nine cars a day.

IT IS NOT difficult to spot the reasons why the Interstate Highway Program reeks of corruption. In a recent interview, Blatnik, in his precise, articulate way, outlined the causes. First, he noted, State Highway Departments traditionally have been close to the governor’s office. The departments have become centers for dispensing patronage and extending favors to contractors who contribute to the party treasury. Next, the states have poor recruitment policies and low salary scales. As Blatnik had pointed out in an earlier hearing, “You find some of these inspectors and even engineers working at a salary at which you couldn’t hire a good file clerk here for the wages they are getting back there.” To these men, a $25 cash payment, a loan, a turkey at Thanksgiving, a bottle of whiskey at Christmas, become formidable gifts. Finally, Blatnik said, there has been inadequate supervision both by the states and the federal government. In many cases, the states make no checkup at all. And, Blatnik emphasized, there has been “an utter failure by the Bureau of Public Roads to poke through the facade.” The Bureau traditionally never disputes the word of the state.

Anyone attending the hearings can sense certain attitudes that supplement Blatnik’s outline. An observer is struck, for example, by the corruptibility of small people: how simple it is for a man to participate in a system of bribery without a twinge of conscience or even a realization of his wrong. A business ethic also emerges from the testimony, a feeling by the contractor that anything goes so long as the job gets done and the profits pile up. When the ethic is questioned, the contractor reacts by despairing that Congressional investigators ever will understand the business world. This attitude evokes sympathy from highway bureaucrats, particularly state officials who like to feel that they understand the peculiar problems of the contractor and that this understanding allows them to wink when the contractor cuts corners to get the job done. An observer quickly senses that these state officials were totally unprepared to handle the billions of dollars suddenly put into their hands by the federal government. At the same time, a smugness, an almost lazy indulgence, is exhibited by federal bureaucrats as they talk vaguely of States’ rights while justifying their refusal to interfere with the machinery of the state, no matter how lax or stupid or corrupt.

But, knowing the causes of the trouble does not lead automatically to finding a solution. The subcommittee has not made any legislative recommendations and evidently does not have immediate plans to do so, even though the staff has drafted a tentative report. Most likely there will emerge limited proposals for revision of the income-tax laws to discourage gift-giving and increased appropriations to the Bureau of Public Roads for more inspectors. No radical change in the program is expected.

Any such change would stir enormous complications. In view of all the corruption, one logical change would be to slow up the program, at least until the states clean house. But this would ignore two factors: that the Administration is using highway funds to stimulate the economy and that the country, no matter how much the critics of Detroit decry a culture on wheels, actually will need the roads in 1975.

AN EVEN more logical change suggests itself. If the states can’t do a proper job, the federal government must wrest control of the highways from them. State officials recognize the validity of this threat to their power. At the annual meeting of the American Association of State Highway Officials last November 28, its president, David H. Stevens, warned: “If the states cannot satisfactorily demonstrate that they do have the ability to carry on the program in a proper manner, then the federal-state relationship will be further modified or eliminated. It will be a tragic day for the states if either should occur.”

If Congress does hand control of the highways to the federal government, the day could be somewhat tragic. The highway program will have proven that federal aid really does eventually become federal control. And the proof will drop new weapons into the laps of the enemies of such needed spending programs as federal aid to education, who have always argued that federal aid leads to federal control. For this reason, liberal Congressmen, no matter how appalled at highway corruption, will not find it easy to vote control to the federal government.

These complications, however, do not mean that the country is powerless to eliminate corruption from the highway program. The subcommittee’s hearings themselves have had some beneficial effect. State highway officials seem to have been attempting to tighten up the program on the state level, if only out of fear that Blatnik’s subcommittee may strike them next. The American Association of State Highway Officials has revised its handbook to suggest ways of eliminating some of the abuses uncovered by Congress. And the Federal Bureau of Roads, smarting from the barrage of Congressional criticism, has taken steps to initiate some realistic inspection.

But the subcommittee continually faces two obstacles as it tries to carry the story of highway corruption to the public. One is an undertone of Republican disparagement based on fears that the Democratic-controlled subcommittee will use the scandals to embarrass Republicans. (But during the Eisenhower administration, the subcommittee investigated Democratic state highway boards with as much vigor as it investigated the Republican-administered Bureau of Public Roads.) A second obstacle involves news coverage. Newsmen in Washington have tended to treat the hearings as regional stories. In this way, stories about the Oklahoma hearings were filed mainly for Oklahoma newspapers. The same was true of the Florida hearings, which made headlines in Florida newspapers and almost nowhere else. The subcommittee must share the blame for this. Its hearings generally have focused on a specific bit of wrongdoing in a specific area, instead of spotlighting corruption in several areas at once. If, in its next hearings, the subcommittee would show how fraud has infested right-of-way acquisition in several states and would call a parade of witnesses from areas all over the country, the press would suddenly grasp the national implications of the highway scandals and treat them accordingly.

The end of highway corruption will be signaled when the American people begin to realize that there is nothing normal or playful about contractors, state officials and speculators stealing millions of dollars from the federal government. Public indignation may be a more effective weapon than legislation in the battle against highway corruption. And the time for public indignation has come.

STANLEY MEISLER is a wire service newsman now stationed in Washington.

IN 1975, Americans will have 111 million cars, trucks and buses. To keep these wheels rolling, the federal government has embarked on the biggest public-works project in history, spending billions of dollars for 41,000 miles of superhighways crisscrossing the nation. Millions of this money already, have been spilled over into waste, inefficiency and fraud. There is nothing secret about this. Newspapers and Congress have uncovered scandal after scandal. But the revelations have not evoked the same indignation and outcries that scandals like the Dave Beck plunder of the Teamsters treasury have caused. Instead, much of the public has a boys-will-be-boys attitude about corrupt highways. When you spend 41 billion dollars in a public program, influential and impatient people say, you have to expect some tomfoolery, so let’s get on with the show. Americans want their highways in a hurry. “When you have a program of this magnitude,” Rep. Gordon H. Scherer, (R.-Ohio), told the House last July 1, “you are bound to attract the chiselers and the grafters.”...
IN 1975, Americans will have 111 million cars, trucks and buses. To keep these wheels rolling, the federal government has embarked on the biggest public-works project in history, spending billions of dollars for 41,000 miles of superhighways crisscrossing the nation. Millions of this money already, have been spilled over into waste, inefficiency and fraud. There is nothing secret about this. Newspapers and Congress have uncovered scandal after scandal. But the revelations have not evoked the same indignation and outcries that scandals like the Dave Beck plunder of the Teamsters treasury have caused. Instead, much of the public has a boys-will-be-boys attitude about corrupt highways. When you spend 41 billion dollars in a public program, influential and impatient people say, you have to expect some tomfoolery, so let’s get on with the show. Americans want their highways in a hurry. “When you have a program of this magnitude,” Rep. Gordon H. Scherer, (R.-Ohio), told the House last July 1, “you are bound to attract the chiselers and the grafters.”...
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