CONCERNING THE NOMINATION OF OTTO F. OTEPKA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00364R000500280002-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: August 16, 2000
• Sequence Number: 2
• Publication Date: May 15, 1969
• Content Type: OPEN

Approved For Release 20001107/"26 :'CIA-RDP71 B00364R000500280002-1
May 15, 1969
CONGRESSIONAL RECORD - Extensions of Remarks
of the expenditure table $2.8 billion for ci-
vilian and military pay increases. The Penta-
gon's share of that, for its employees in
and out of uniform (the Pentagon employs
nearly one-half of all the civilian employees
in the government) is $2.5 billion. When
that additional pay item is added, the total
for national defense is $83 billion, or better
then 56 cents of every dollar available. That
is a third (actually 36%) more than the 41
cents shown in the first budget chart.2
tributions to health and
boasted that outlays for
.n double the level prevail-
n his War on Poverty was
a 'LF+.e" .
8 ~yi 9eneral revenues. That is about
"
what it gives them, and gives less than it
takes.
The Welfare System and the War on Pov-
erty were admissions that social security was
abysmally inadequate. But Johnson's War on
Poverty was made to look far more extensive
than It was, and Nixon's revisions use the
same deceptive computations. "Our 1970 Re-
vised Budget," says a Budget Bureau state-
ment of April 14, "involves a 10 % increase
over FY '69 in spending for the poor (italics
in the original). This reflects our deep com-
mitment to the underprivileged." The Budg-
et Bureau statement did not explain, how-
ever, that this also represented a cut of $300
million in Johnson's poverty recommenda-
tions for fiscal 1970-nor that much of this
bloated estimate is padded out with normal
payments from social security.
8I can remember when a feature of the
annual federal budget presentation was a
chart showing how much was absorbed by
past, present and future wars.'This added
military expenditures, veterans' benefits and
interest charges, the last item because past
wars are the real reason for the public debt.
These three items In the 1970 budget total
more than $106 billion and will take more
than 70% of the general revenues. Secretary
Laird said the other day that much of the
Soviet Union's space activity was really mil-
itary. This is also true of our space program.
The funds spent on rocket boosters to reach
the moon also improve the technology of
mass murder by intercontinental ballistic
missile. If space is added to the other three
Items, the total is $110 billion, or almost 75%
of the $147 billion available,.
HOW THE FIGURES ARE PADDED
Johnson claimed he would spend $27.~ bil-
lion on "Federal Aid to the Poor". Nixon out
of that "deep commitment" revised this
downward to $26.9 billion. The biggest item
in Johnson's as in Nixon's, Federal Aid to
The Poor compilation (at p. 41 of the main
budget message volume) is $13.5 billion for
"Income assistance." My curiosity was piqued
by a discrepancy of almost $10 billion be-
tween this item and a passage at pages 42-3
of the Budget in Brief. This said that Fed-
erally aided public welfare would in fiscal
of 10 million individuals at a total st of
$7 billion. "The Federal share," it id, "was
$3.7 billion." When I asked the )3udget Bu-
reau Where the rest of the claimed figure of
$13.5 billion came from, I got this compila-
tion (in millions) :
Administrative expenses------------
$600
Old age pensions-------------------
6,300
R.R. retirement pensions------------
400
Unemployment insurance-----------
500
Veterans' Administration'----------
2, 100
Total-------------------------
9,900
'The Budget Bureau, when I asked what
the Veterans' Administration had to do with
the war on poverty, ?xplained that 80% of
veterans' pensions, 75,.% of veterans' sur-
vivors' pensions and 20 of other veterans'
benefits had been counte as "Federal Aid
to The Poor" in the Johnson table!
The figures given me were "Nunded" and
so the final totals do not quite'?knatch but
this $9.9 billion of "padding" explains how
that $3.7 billion in Federal welfare ilicome
assistance was made to look like $13.5 bil-
lion.
It is fortunate that few people on welfare
spend their spare time reading the Federal
budget. It would foment riots. The Budget
Bureau "press kit" for Nixon's revisions of the
1970 budget says these involve "hard choices"
and are part of the Nixon Administration's
"concern for the poor." Nixon added $300
million for dependent children but squeezed
$200 million of this out of a projected in.'
crease in our pitifully low old age pensions.
"For the aged," the same Budget Bureau ex-
planation says, "a 7% social security cost-
of-living increase is included in the revised
1970 budget." It does not explain that this is
a revision downward from the 10% increase
recommended by Johnson, nor that Nixon
also shelved Johnson's proposal to increase
the minimum from $55 a month to $80 a
month. There are 2,000,000 Americans-be-
lieve it or not-now expected to enjoy retire-
ment on $55 a month! Instead of getting a
$35 raise to $80 a month, they will only re-
ceive the general 7% Increase, though I was
told this would be "rounded off" so that in-
stead of a mere $3.85, they would get $4 or
$6 a month more. This could bring them up
to $60 a month. Thanks to the Adm inistra-
tion's concern for them, moreover, the re-
vised legislation "includes liberalization of
the social security retirement test" allowing
them to earn more outside income without
having it deducted from their pensions. The
liberalization turns out to be $120 a year,
about $2 a weeks and raises the ceiling on
allowed earning to $36 a week! What a dolce
vita!
Roughly a billion each was out out of so-
' The liberalization will allow a maximum
of $1800 a year without deductions. By com-
parison retired professional military men (20
years service) 'are allowed under the Dual
Compensation Act of 1964 to fill Civil Service
'jobs paying up to $30,000 and still collect
their full pensions, a privilege not given
other veterans. Under the new pay raise this
will mean retired army officers can draw up
to $50,000 a year in Civil Service pay and
pensions.
E 4039
cial security and out of the military budget
by Nixon. This symmetry of sacrifice is de-
ceptive. Before anyone starts dropping pen-
nies into cups for the Pentagon, I would like
to lift the curtain on another murky corner
of the budget. To evaluate the Nixon mili-
tary "economies" you have to go back for
another look at the Johnson budget for 1970.
This projected a drop of $3.5 billion in the
costs of our "Southeast Asia operations."
This was to be our first dividend on the road
to peace, the money to be saved principally
b , pding the bombing of the North. John-
son is leaking up his budget could have
allocated this $3.5 billion to welfare or to the
rebuilding of the cities. Instead Johnson's
budget allocated $4.1 billion more to military
spending unconnected with the Vietnam war.
This accounts for the fact that in his 1970
budget the cost of national defense rose by
more than half a billion dollars over 1969
despite the projected $3.5 billion drop in the
costs of the Vietnam war.
A MONSTER AT THE HEAD OF THE TABLE
This favored treatment of the military ma-
chine has to be seen against the background
of a figure revealed in the Nixon revisions.
His revised budget estimates for fiscal 1969
which ends next June 30 discloses that $7.3
billion had to be squeezed out of the normal
civilian and welfare operations of the govern-
ment in this fiscal year to meet the expendi-
ture ceilings imposed by Congress as a condi-
tion for voting the 10% surtax. This squeeze
over and above the original 1969 budget was
made necessary by an unexpected rise in cer-
tain "uncontrollable" items exempt from
mandatory ceilings. The biggest uncontrolla-
ble item was the Vietnam war which cost $3
billion more in fiscal 1969 than had been
budgeted for it. So all kinds of services were
starved in 1969 to meet the swollen costs of
Vietnam in fiscal '69. Yet when a $3.5 billion
drop in Vietnam war costs were projected. for
fiscal'70, the amount saved was not allocated
to the depleted domestic sector but to the
growth of the war machine.
Nixon's cut of $1 billion in military out-
lays can only be evaluated properly if you
first start by observing that it was a cut in a
projected $4.1 billion increase in military
spending. The cut came out of a lot of fat,
whereas the cut in health, education and
welfare, and domestic services, came close to
the bone and gristle. The.second point to be
made about the military.cuts is that they
represent no real overha t l of the bloated
military budget. Robert S. enson, former aid
to the Pentagon Com troller, recently
showed (in the March issu of The Washing-
ton Monthly) how easily 9 billion could be
cut out of military spen g without impair-
ing national security. ut the three main
"economies" cited b he Nixon background-
ers are sleight-of- and. One is "lower con-
sumption of ammunition in Vietnam". This
looks optimistic in view of the enemy offen-
sive and our own search-and-destroy mis-
sions; as in other years, this may be one of
those preliminary under-estimates which
turn up later in a supplemental request for
funds. The second "saving" comes out of the
shift from Sentinel to Safeguard, but the
reduction in fiscal 1970 will be at the expense
of -larger ultimate costs. Indeed while the
Nixon estimates show that Safeguard will
ultimately cost $1.5 billion more, McGraw
Hill's authoritative DMS, Inc., service for the
aerospace industry puts the final cost $4.3
billion higher, or a total of $11 billion with-
out cost overruns (which DMS expects). The
third "economy" cited is $326 million saved
(as a Washington Post editorial noted tartly
April 3) by "postponing procurement of a
bomber missile (SRAM) that doesn't yet
work." Like all else in the Nixon Adminis-
tration, the budget revisions represents
feeble compromises which give the military
machine priority over the growing urban,
racial and student crises.
Approved For Release 2001/07/26 : CIA-RDP71 B00~364R000500280002-1
 '`~ Approved For Release 2001/07/26 : CIA-RDP71 B00364R000500280002-1
E 404 CONGRESSIONAL RECORD -Extensions of , Remarks % /lay 15, 1969
CONCERNING THE NOMINATION OF
OTTO F. OTL3 PK Q
HON. JOHN M. ASHBROOK
OF OHIO
IN THE HOUSE OF REPRESENTATIVES
Thursday, May 15, 1969
Mr. ASHBROOK. Mr. Speaker, on
Tuesday of this week the Senate Judi-
ciary Committee, by a vote of 10 to 3,
voted to recommend, confirmation of
Otto F. Otepka as a member of the Sub-
versive Activities Control Board. In re-
cent weeks press accounts have sought
to link the former State Department
Necurity officer with certain organiza-
ons and individuals, as a result of
which a set of six questions was pre-
sented to the chairman of the Judiciary
Committee for further inquiry. The ques-
tions and the subsequent replies are part
of the hearings on the nomination of
Otto F. Otepka, which documents are on
sale at the Government Printing Office
at nominal cost.
I request that the questions relating to
the nomination of Otto F. Otepka and
the responses submitted thereto be in-
serted in the RECORD at this point:
NOMINATION OF OTTO F. OrEPKA, OF MARY-
LAND, To BE A ivIEM13ER OF THE SUBVERSIVE
ACTIVITIES CONTROL BOARD
U.S. SENATE,
Washington, D.C., May 5, 1969.
Hon. JAMES O. EASTLAND,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: In accordance with
the discussions at the Committee meeting
last week, we believe that before the Com-
mittee takes up the nomination of Otto
Otepka to the Subversive Activities Control
Board, there should be included in the print-
ed record information relating to the recent
questions raised about Mr. Otepka's finances
and connections. In particular we suggest
that the staff obtain from W. Otepka, and
from independent inquiry if necessary, the
facts on the following subjects:
1. Mr. Otepka's source of income, other
than his State Department salary, since 1961.
2. The precise sources and amounts of
financing for Mr. Otepka's legal fees, living
expenses, traveling expenses, and other ex-
penses since 1961.
S. Any formal or informal connections be-
tween Mr. Otepka and (1) Mr, Willis Carto,
(2) the John Birch Society, (3) the Liberty
Lobby, or (4) any other persons or organi-
zations actively associated with Mr. Carto,
the Society or the Lobby.
4. The accuracy of a report that Mr. Otepka
stated in response to questions about his
associations: "I am not going to discuss
the ideological orientation of anyone I am
associated with"; and, if the report is ac-
curate, Mr. Otepka's opinion as to the ap-
plicability of a similar standard to others
being considered for federal employment or
otherwise under inquiry in connection with
security matters.
5. Mr. Otepka's opinion as to the possi-
bility that individuals and groups of the
type generally described as "radical right"
or individuals or groups generally described
as "Nazi" might under certain circumstances
constitute a threat to domestic security.
6. The extent to which, the issues raised in
the preceding questions were investigated
and considered In the course of the Executive
Branch's pre-nomination procedures regard-
ing Mr. Otepka.
We are confident that all the members of
the Committee join us in feeling that fair-
ness to the nominee and to the public re-
quires that these matters, which have been rectly to Mr. Otepka's counsel, and checks
raised publicly, be aired and resolved within received by Mr. Otepila personally were
the Committee before it passes on the nomi- turned over by him to his attorney. Mr.
nation. We are hopeful also that Mr. Otepka Otepka did not cash any such checks, nor
will feel free to take this opportunity to receive or retain the proceeds therefrom:)
make any further comments he wishes re- Of these independent contributions, Only one
garding the office to which he has been nom- was in a very large amount, to wit: a check
inated and his suitability for it. for $2,500 received by Ot.epka's counsel on
Sincerely, April 21st, 1964, from Defenders of Ameri-
EDWARD M. KENNEDY. can Liberties, a non-profit corporation orga-
QuENTIN BURDICK. nized under the laws of the State of Illinois
JOSEPH D. TYDINGS. for the purpose of defending civil and human
PHILIP A. HART. rights. All other independent contributions
To: Senator Eastland-
From: J. G. Sourwine.
Subject: Inquiries of Senators Hart, Ken-
nedy, Burdick, and Tydings respecting
finances and connections of Otto Otepka.
In compliance with your instructions the
staff has obtained from Mr. Otepka, and from
independent inquiry as necessary, the facts
called for by the questions propounded.
The questions are repeated below seriatim,
and the facts obtained by the staff with re-
spect to the subject matter of each question
are set forth, immediately thereafter.
1. Mr. Otepka's source of income, other
than his State Department salary, since 1961.
Since 1961, Mr. Otepka has had income,
other than his State Department salary, only
from the following sources: (A) interest on
savings accounts and stock dividends; (B)
wife's salary as a school teacher (from 1965
only); (C) daughter's salary (during 1968
only); (D) director's fees (family corpora-
tion); (E) sum received by wife in 1966 by
gift and devise from her aunt.
2. The precise sources and amounts of fi-
nancing for Mr. Otepka's legal fees, living
expenses, travelling expenses, and other ex-
penses since 1961.
LEGAL EXPENSE
Total legal expense incurred in connection
with Mr. Otepka's case has amounted to
$26,135, of which $25,127 represented legal
fees and $1,008 represented reimbursement
of cash disbursement by counsel. These legal
expenses have been met by voluntary con-
tributions from more than three thousand
different contributors. Most of the contribu-
tions were in relatively small amounts, rang-
ing from $1.00 to $100.00. Over $21,000 of this
amount was raised by American Defense
Fund, organized in 1964 by James Stewart
of Wood Dale, Illinois (now living in Pala-
tine, Illinois) in compliance with the laws
of the State of Illinois.
Mr. Stewart volunteered his assistance,
after having read in the newspapers of Mr.
Otepka's intention to pursue fully all of his
administrative remedies, and to take his case
Into the courts, if necessary, Mr. Stewart ap-
pears to have made a full accounting for the
purpose of complying with State law, and
also has filed an accounting with the U.S.
Post Office Department.
American Defense Fund has no connection
of any kind with the John Birch Society, the
Liberty Lobby, or Willis Carto, according to
Mr. Stewart, who stated his Interest in the
Otepka case was sparked by a newspaper arti-
cle in September 1963, and that In the fall
of 1964 he undertook to raise money for
Otepka's defense after he learned that con-
tributions from other sources were not meet-
ing the growing legal expenses of the case.
Mr. Stewart said he acted as an individual
and without any assistance or prompting
from any organization.
All contributions forwarded by Mr. Stew-
art went directly to Mr. Otepka's counsel,
Mr. Roger Robb.
and $6,000) was paid by voluntary contribu- Otepka does not own