Sen. Lawton Chiles (D-Fla. said yesterday that "a lot of phone calls" were made by the Nixon White House to help a high-salaried presidential aide win a 1973 federal contract intended for struggling minority businessmen.
He made this charge at hearings by a Senate government spending subcommittee into allegations that federal programs to aid businesses owned by the "economically and socially disadvantaged" have been abused.
Quoting from an internal memo of the Small Business Administration. Chiles said that in late 1972 someone in the White House called the SBA several times to urge that contracts in this program be set aside for Antonio Rodriguez, a $39,000-a-year presidential assistant who was going into private business.
The memo by Loren Rivard, administrative assistant to then SBA Administrator Thomas S. Kleppe, did not identify the caller, Rivard, who lives in Baltimore, told The Washington Post yesterday that he had no recollection of the memo and could not say who called him.
Chiles also said Clifford Ryan , the SBA official handling Rodriguez application, had told subcommittee investigators that he came under heavy pressure from his superiors for a favorable decision on Rodriguez.
Despite an initial SBA finding that "he does not seem to be disadvantaged." Rodriguez, who is of Hispanic-American background, won a $75,000 no competitive contract to provide security services for the Department of Health, Education and Welfare.
The testimony about Rodriguez came as a parade of SBA officials admitted to the subcommittee that much of the $300 million in federal contracts set aside annually for minority businesses actually went to people with political connections or to blacks acting as fronts for white entrepreneurs.
These revelations prompted Rep. Parren J. Mitchell (D-Md.), chairman of the Congressional Black Caucus, to appear before the subcommittee to denounce "these white knaves and their black Judas Iscariots" for causing a threat to "the only meaningful federal program for building a strong, viable minority business community in America."
Calling the SBA's program "the jugular" of government efforts to aid minority businessmen, Mitchell expressed fear that a bad public reaction to the abuses might "severe the jugular and cause the whole thing to die."
In other testimony yesterday, two officials of the SBA's Richmond office contradicted previous testimony about a Petersburg, Va., case involving Richard D. Obenshain, former chairman of the state Republican Party.
Joseph Harris, a black charged Wednesday that white businessmen made him majority stockholder of a sand and gravel firm in order to get a $350,000 SBA minority business development loan, and then pushed him out of control and sold the business at a huge profit.
Harris said Obenshain, a Richmond attorney, had been engaged to push the loan through after it was initially refused by the SBA on the ground that Harris was a front for whites.
But Frank Nolte, a loan officer in the Richmond office, said there was a major difference between the two loan applications from Harris' company. Nolte said the initial request was rejected because Harris appeared to be a front and because the firm wanted a direct loan from SBA funds.
However, Nolte added, the second application was made through a Virginia bank and only required an SBA guarantee of the loan rather than an actual disbursement of federal funds. That, Nolte said, put the loan in a different category that did not require the borrowing firm to be under minority control.
Because of these changed circumstances, Nolte said, "the loan request was valid and would have been granted whether Harris was in the firm or not." Nolte added tha he never saw any sign of involvement by Obershain in obtaining the loan and was not aware of any pressures by Obenshain or anyone else for a favorable decision.[TEXT OMITTED FROM SOURCE]in question, but denied any wrong-doing.
Dunlap saw it differently.
"I kept saying no to a white-owned firm in [Hartshorn] Oklahoma - Oklahoma Aerotronics - because it was owned by a guy named Jim Rice," said Dunlap in describing the 1972 incident. "He said he was having trouble getting government contracts and wanted to be declared 'disadvantaged.'
"And he kept getting political phone calls and letters sent to me from the Hill, including from staff members of Carl Albert's. One day, Carl Albert called [former SBA Administrator] Tom Kleppe and myself to his office and there was Mr. Rice and he [Albert] insisted Rice be approved for 8 contracts.
"So Kleppe agreed to do it and asked me if there was some way it could be done . . . So I was assigned the task to write up a regulation. This was rather blatant political pressure."
Albert, contacted by phone, said, "The only pressure it amounted to was an effort to help a city in desperate circumstances in the county which has the highest unemployment rate in Oklahoma. If a congressman shouldn't try to do that I don't know how he would survive. I didn't try to do it through political pressure any more than anybody that tries to get a dam in his district."
A Senate subcommittee on federal spending heard testimony Wednesday and yesterday that white businessmen used blacks as fronts for getting minority loans and then took most of the profits.
In testimony yesterday, SBA investigator William Bolling said Dunlap - while still at SBA - took a $346 trip to Florida to look over a minority company in which he was offered 46 per cent of the stock at no cost.
Dunlap denied any wrongdoing. He said the deal, approved in writing by Kleppe, never came off.