Maritime Administration officals insisted on joining industry and labor in creating a private promotional organization despite official warnings about the potential conflicts of interest involved. A House subcommittee disclosed yesterday.
According to documents turned up this week, the Commerce Department's general counsel repeatedly refused to give his clearance in 1971 to the Maritime Administration's membership in the proposed organization, the National Maritime Council.
Warning that "the potential conflicts and embarrassment are too great," William N. Letson, the Commerce Department's chief lawyer at the time, also refused to sanction the Maritime Administration's plans to provide the staff or executive secretariat for the council.
The Maritime Administration, the government agency that handles hundreds of millions of dollars a year in shipbuilding and operating subsidies, went ahead anyway, apparently on the strength of a memo from its own general counsel, H. Clayton Cook Jr., that the advice from higher up was "not binding."
The belated discovery of the documents by the Maritime Administration touched off a teaty exchange yesterday morning between Assistant Secretary of Commerce Robert J. Blackwell, the head of the Maritime Administration, and Rep. Benjamin S. Rosenthal (D-N.Y.), the subcommittee chairman.
The two already had been sparring over who was supposed to be doing the talking when Blackwell alluded to "several documents" submitted to the subcommittee that appeared to conflict with Blackwell's claims of "clear statutory authority" for participation in and support of the maritime council.
Until several days ago, Blackwell said of the memos, "We were not aware they existed."
"We've been told you held those documents back until the stories (about the subcommittee's inquiry into the National Maritime Council) appeared in the press," Rosenthal shot back.
"Who told you that, sir?" Blackwell demanded. "Would you like me to explain the situation?"
At that, Rosenthal called a brief recess, partly, he indicated, for the purpose of helping Blackwell simmer down and start letting Rosenthal ask the questions. But when the session resumed, the issue never came up again.
Blackwell told a reporter later, however, that "we just stumbled across them (the documents) in the office of an attorney (at the Maritime Administration) who had nothing to do with the subject." He said the memos were turned over to the Government Operations subcommittee Thursday.
The Rosenthal subcommittee opened its hearings on the maritime council Thursday by challenging the legality of a National Maritime Council advertising campaign that sought to produce a deluge of letters to Congress during last year's controversial maritime industry drive for "cargo preference," legislation.
The inquiry then broadened yesterday to raise questions about the close ties between the Maritime Administration and its business and labor constituency. Under questioning by Rosenthal and other subcommittee members, Blackwell reported that the Maritime Administration (Marad) provides staff services worth some $157,803 a year for the nonprofit maritime council. Marad also has paid $39,146 for travel expenses incurred in official attendance at maritime council dinner dances, forums and other functions over the past four years, the subcommittee was told.
Rep. Robert F. Drinan (D-Mass) pointed out that on Oct. 19, 1972, Blackwell himself had approved a staff attorney's recommendations that Marad keep a greater distance from the maritime council by a variety of steps, including the removal of Marad official Lewis Paine as, the council's executive secretary. Paine still holds the job in addition to his Marad duties.
Blackwell said he just hadn't get around to making the changes. "It's my fault," he told the subcommittee. "This was a very busy time."
"All six year?" Drinan exclaimed.