Mr. CAREY. Would the gentleman from Maryland yield at that point? Mr. MORTON. Yes. Mr. CAREY. Hopefully at this point we could introduce in the record now the entire recitation of allegations by the publisher of the Daily News and the responses thereto by the Governor. I believe that counsel now has completed his comparison of the responses of the allegations as made and the transcription of the allegations and the Governor's responses and I would ask, then, that at this point in the record counsel note the exceptions or note the differences, if there be any, for the benefit of the committee members; we would then have before us the entire document to which the gentleman from Maryland made reference. Governor PAIEWONSKY. Mr. Chairman, may I say in connection with that that the answers to this were prepared by the various departments and commissioners involved. I have read them carefully through and to the best of my knowledge and belief they are substantially correct? Mr. CAREY. Without objection, then, the counsel will read the errata or differences that may exist between the two documents. Mr. MCELVAIN. Mr. Chairman, comparing these here at the desk with the allegations contained in the June 12 issue of the Virgin Islands Daily News, I found that they were substantively accurate. There are a few minor differences which happen to be mostly a matter of style, or an a couple of occasions a matter of spelling. Throughout the list, for example, on printed issue of the Daily News, the first two words as a matter of style were all in caps, whereas in the Governor's transmittal, the first two words are just normally retyped. On pages 7, 12, 25, and 29, there are two or more allegations appearing, and I presume that these allegations are answered with one answer from the Governor. He might wish to comment on that. Governor PAIEWONSKY. This is correct. Mr. MCELVAIN. On page 7 there are three differences that I noted. They are all spelling differences or typographical errors in nature. The first one appears in allegation number 8. The Daily News spelled Governor "G-O-V-E-R-N-E-R's." The Governor's copy corrected that to "N-O-R's". In allegation number 10 on the same page, the Daily News copy had the words "to patronage", and the Governor's copy had the words "of patronage". On the same page again, allegation number 11 spelled the word incumbent "encumbent." The Governor's copy corrects that to "incumbent". Mr. CAREY. The Chair declares the role of the Governor is correct. [Laughter] Mr. MCELVAIN. On page 16, the Daily News allegation incorrectly spelled the word whether "W-H-E-H-E-R". The Governor's copy corrected that to "W-H-E-T-H-E-R". On page 18, the Daily News allegation capitalized in full the word "before". The Governor's copy did not capitalize the word in full. In the same allegation, the Daily News spelled the word government "G-O-V-E-R-N-M-N-T" and the Governor's copy corrected that to read "G-O-V-E-R-N-M-E-N-T." On page 22, the Daily News allegation number 22 had a comma be tween the word "action" and "thus". The Governor's copy omitted the comma. Mr. CAREY. Well, with those what you might characterize as trivial distinctions, it will then be the finding of the committee that the allegations transcribed are substantially in keeping with the allegations as originally addressed to the public print, and at this point the Chair is prepared to move that the entire record of allegations and responses be included in the record following the Governor's statement. Without objection, so ordered. (The document as referred to above and on p. 470 follows:) COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Hon. RALPH M. PAIEWONSKY, Washington, D.C., June 28, 1967. DEAR GOVERNOR PAIEWONSKY: The Subcommittee on Territorial and Insular Affairs will continue the hearings commenced on June 17 and 19, at Christiansted and Charlotte Amalie, respectively, on Thursday, July 20, 1967. Prior to my scheduling hearings earlier this month, I announced that at a later date officials of the Virgin Islands Government, the Virgin Islands Legislature, and the Department of the Interior would be given opportunity to testify on H.R. 7330, my bill to provide for the popular election of the Governor of the Virgin Islands; election procedures in the Virgin Islands, and general economic conditions in the Virgin Islands. Accordingly, we are inviting you, as Governor, to meet with our subcommittee at 9:45 a.m. on Thursday, July 20, in Room 1324 Longworth Office Building, Washington, D.C. to present your comments on the three aforementioned topics. Since we are scheduling four other witnesses we hope you will consolidate your presentation so as to give all persons scheduled an opportunity to be heard. Because of the considerable interest that has been stimulated by the earlier hearings, I suggest that 50, instead of the usual 25, copies of your statement be made available for distribution. With the kindest regards and best wishes. Sincerely, HUGH L. CAREY, Chairman, Subcommittee on Territorial and Insular Affairs. JUNE 9, 1967. Hon. RALPH M. PAIEWONSKY, Charlotte Amalie, St. Thomas, V.I. DEAR GOVERNOR PAIEWONSKY: The Subcommittee on Territorial and Insular Affairs has been provided a copy of the Daily News for Saturday, June 3, 1967, which sets forth on pages eight and nine "34 Reasons why a Bi-Partisan group of the U.S. Congress should take a careful look into the present conduct of the Government of the Virgin Islands before Congress votes on the Elective Governor Bill for the Territory." Inasmuch as some of the 34 items are matters of concern to the Subcommittee, I am asking that you prepare comments on those which relate to the Government of the Virgin Islands. Upon the convening of the Subcommittee hearings at Christiansted on June 17, I shall ask that the 34 items and your comments be made a part of the record. It is not my intention to give an undue amount of time to these matters but I do want to have comments to which my colleagues and I may refer. I am addressing a similar letter to President Ottley, asking him to prepare comments on the items that expressly relate to the Virgin Islands Legislature. With the kindest regards and best wishes, I am, Sincerely, HUGH L. CAREY, Chairman, Subcommittee on Territorial and Insular Affairs. Hon. HUGH L. CAREY, THE VIRGIN ISLANDS OF THE UNITED STATES, Chairman, Subcommittee on Territorial and Insular Affairs, Committee on Interior and Insular Affairs, Washington, D.C. DEAR CONGRESSMAN CAREY: In accordance with your request of June 9, 1967, I am pleased at this time to transmit 25 copies of my reply to the series of 34 allegations recently published by the Publisher of the St. Thomas Daily News. We have elaborated on the allegations concerning the Unclassified Service and 25 copies of my comments regarding these allegations are enclosed also for your information. Sincerely yours, RALPH M. PAIEWONSKY, Governor. FOLLOWING IS A LIST OF 34 ALLEGATIONS RAISED BY THE PUBLISHER OF THE VIRGIN ISLANDS DAILY NEWS AND THE ANSWERS TO THESE ALLEGATIONS BY THE GOVERNOR OF THE VIRGIN ISLANDS 1 Allegation: Determine whether the appointment of a major dairy farmer as Commissioner of Agriculture, with hundreds of acres leased from the government, constitutes a conflict of interest. Answer: The original leases to Mr. Hodge, while a member of the Legislature were made under the respective administrations of Governor Alexander (in 1955) and Governor Merwin (in 1960). The leases were revised and consolidated in 1966, with the approval of the FAA. The revised lease repealed the option previously granted to the lessee to purchase all of the property and in its place provided only for the right to purchase the 16 acre tract containing the Lessee's home and other improvements made by him. It also raised the annual rental from $500 to $1,000, and provided for one terminal date in 1980 thus coinciding with the original expiration date of the 1960 lease. Both the Federal and Territorial governments have the right to repossess all or any part of the lands for the purpose of making airport improvements or for other public uses. Mr. Hodge's qualifications as Commissioner of Agriculture and Recreation have not been questioned. His relationship to the Government as a lessee of its lands involves no conflict, nor has it in fact occasioned any inconsistency with his duties and responsibilities as Commissioner on the contrary, his intensive and extensive experience and commitment to practical, commercially feasible agriculture in St. Croix peculiarly qualify him to promote the general agricultural economy of the islands. 2 Allegation: Determine whether a privately constructed sewage plant at Estate Tutu was accepted by the government despite the fact that the Planning Board. the Public Works Department and the Director of the Bureau of Environmental Sanitation all disapproved it because it did not meet standards. Answer: The Department of Health passed upon the public health aspects of the plant and took one specific exception, having to do with the installation of a chlorinator at the plant. The Public Works Department recommended certain other mechanical modifications and additions to the plant, and went thoroughly into the question of discharge of effluence on the property of an adjoining owner. When all of these objections had been met by the developer, the sewage disposal plant was accepted by all concerned agencies of the Government. 3 Allegation: Determine whether the Governor used a sum of approximately $20,000 of taxpayers' monies to institute changes which should have been made by the developer of the plant before the system was accepted by the Government. Answer: This is simply not true. The developer made at its own expense all changes required by the Government, as a condition precedent to the Government's acceptance. 4 Allegation: Determine whether the number of persons employed by the govern ment is approximately 35% of the voters of the territory. Answer: As of June, 1967 there were 16,887 registered voters in the Virgin Islands. As of the same date there were 4,269 regular employees of the Govern ment, including both classified and unclassified employees. Thus, the number of government employees is 25.3% of the number of registered voters. However, this does not mean that government employees comprise 25.3% of the registered voters, since of such employees, 461 (or 10.8%) are disqualified from voting because they are either under the voting age of 21 or are resident aliens. Moreover, all government employees are not necessarily registered to vote and even more significantly, all qualified persons in the general public have not registered. 5 Allegation: Determine why the average cost of government to each man, woman and child in the Virgin Islands is $1,000 while the same cost of government-Federal, State and local-in the United States is $700. Answer: Using current population estimates of 60,000 the per capita cost of government in the Virgin Islands is about $850. The accuracy of the national average of $700 alleged by the publisher must be seriously questioned, since the U.S. cost of government (Federal, State and local) was on a per capita basis, $986.43 in 1963. This is the figure published in Statistical Abstract, 1965, p. 421. Based on the budget estimate for fiscal 1967 and on reasonable projections of State and local expenditures and of total U.S. population, it is estimated that for 1967 the per capita cost of government in the U.S. runs to $1,122.28. In any event the Virgin Islands figure is well below the national average, taking into account (1) tourist-day increments, and the demands which this occasion on governmental facilities, particularly health and hospital services, and (2) costs peculiar to the Virgin Islands not typical to mainland communities (e.g. three islands to service with separate plants, equipment and personnel; government operation of many functions such as power system and all hospitals, usually non-governmental in most communities). 6 Allegation: Determine whether Virgin Islands government is operating a lottery subsidized by the taxpayers. Answer: The lottery operated by the Government of the Virgin Islands is not subsidized by taxpayers money. Let us examine the situation in a typical fiscal year (FY 1967). Bill No. 2729 appropriated $63,126 to take care of the Director, Assistant Director, one cashier, five clerks and a custodial worker as well as materials, supplies, parts and contribution to the employee retirement fund. Aside from this usual appropriation, the lottery operation of itself is put on a self sufficient basis. For example, the operation of fiscal year 1967 produced $572,000 in gross sales and prize monies amounted to $416,565.65. The difference between gross sales and the prize monies was distributed among three funds: 1. Cancer Fund $36,000 2. Foster Care of Children $25,000 3. Day Care of Children $35,000 Presently, the accounting books of the Department of Finance shows a balance of $56,435 as a surplus amount to be made available to the areas of Health, Education and Welfare. 7 Allegations: Determine whether there has been an increase in the number of patronage appointments in the government service from under 100 in 1961 to currently over 800. 8 Determine whether expansion of the spoils system as practiced by the majority political faction with the Governor's cooperation has any adverse effect on the Merit System which all agree is the cornerstone of fair and equal opportunity in government. 10 Determine whether positions which are now exposed of patronage and the spoils system are positions which have nothing to do with policy, but are really technical, professional and career type positions. 11 Determine whether patronage conditions when attached to such as Building Inspector, Safety and Payroll Inspector, Wage and Compensation Officer and Planning Director subjects the incumbent employees to unreasonable political pressure which adversely affects the objective and impartial performance of their duty. 13 Determine whether the U.S. Department of Health, Education and Welfare has repeatedly taken exception to many of the positions which the Governor has allowed to be placed on the patronage list. 15 Determine whether the growing army of unnecessary assistant commissioners and deputy commissioners in a government the size of the Virgin Islands is a device to circumvent or undermine the Civil Service. Answers: These allegations proceed from the premise that "unclassified" employees must be equated with "patronage" appointees. This is fundamental error. There are presently 739 unclassified employees out of a total of 4,269 government workers. (The unclassified figure includes about 97 former Vicorp personnel taken over by the Government (not counting 232 former Vicorp employees now working with the Virgin Islands Water and Power Authority) whose positions could not be readily adopted to the classifications under the Personnel Merit System law.) Apart from the urgent realities of recruiting technical and professional personnel (admitted in effect by allegation 10) of which there is dire shortage in the islands, there are many complicated factors to be taken into account in considering the growth of the unclassified portion of the government rolls in the past six years. Largely, there is the problem arising from an inflexible classification any pay system in considerable need of revision. The creation of new departments, expansion of the functions of others, increased participation in federal programs, and the absorption of former federal agency employees under local agencies, has also involved the filling of many major policy making and supervisory positions. This administration has taken steps to preserve the principle and practice of the merit system in the face of these practical problems. On several occasions, in previous years, and again in the Governor's State of the Territory Message to the Legislature in January of this year, the administration's concern was expressed. Also, earlier this year, the assistance of the Department of the Interior was requested for a survey to determine the scope and nature of a full overhaul of the entire personnel system. When this professional survey by outside consultants is completed, this year all positions in the government service, except for top policy making offices, will be converted to the merit system. 9 Allegation: Determine whether most of the unclassified and a number of classified workers ranging from laborers and cooks to commissioners were active during election time garnering votes for the party during regular working hours. Answer: Undoubtedly a large number of government employees were active politically on their own time, after working hours, as would be true in any politically active and enlightened community. There may have been isolated instances where employees electioneered during working hours, but such is contrary to law and government policy. 12 Allegations: Determine whether the Legislature controls the appointment (and dismissal) of government employees, especially in the so-called unclassified service. 26 Determine whether the Governor acquiesces to the demand of the majority bloc in the Virgin Islands Legislature for ruthless dismissal of government employees for purely political reasons. 28 Determine whether political party clearance is a prerequisite for appointment of eligible candidates who qualify for employment under the Merit System. Answer: To the extent that any legislature controls the purse strings it can affect the positions that are available to be filled, and in the case of unclassified employees, it can abolish existing positions by failing to provide for their continuance in the yearly budgets. But the determination as to the appointments |