The State Department inspector general has found "serious management problems" but no evidence of "conflict of interest of improper personal gain, or of betrayal of the public trust" in the department's Foreign Buildings Office, according to a report released yesterday.
The four-page summary report said that there was "a presumption of favored treatment" in the awarding of some contracts by FBO, which manages the overseas buildings and embassies for the State Department.No examples were cited.
In addition, the report said that FBO is "vulnerable to pressure from various sources" and "failed fully to protect U.S. government interests in the administration of some of its contracts."
Former Secretary of State Henry A. Kissinger ordered an investigation of FBO following an Aug. 14, 1976, article in The Washington Post that quoted from State Department documents obtained through the Freedom of Information Act.
The article dealt with the relations between former Rep. Wayne L. Hays (D-Ohio), who headed a House subcommittee that supervisas State Department operations, and Orlan C. Ralston, a close Hays friends, who heads FBO.
The documents showed that Hays and Ralston traveled abroad 50 times in nine years, that a Mexican builder friendly with both of them received favored treatment in the award of $5 million in contracts and that Hays' father-in-law and a firm he works for received more than $42,000 in FBO contractors.
Without a spcific reference, the report said, "There were instances that raise questions concerning the judgment of certain FBO employees."