sugar you are holding here? You say our $250 million worth of prospectuses by your committee will give you the little $2 million project; after these are approved by the House Public Works Committee, we will recommend to the Appropriations Committee a reprograming which will permit us to proceed with the construction of the Carbondale Post Office shortly thereafter. Do you deny this? Mr. LEHNE. No, sir; that has nothing to do with the present site. Mr. GRAY. You said in June of 1970, a team visited Carbondale. Mr. LEHNE. I know I did. Mr. GRAY. Well, why then would you come back and say we will start construction in 60 days, my friend, because you know if you had any idea of changing sites at this juncture, you would not have told me and the Appropriations Committee you would be ready to go in 60 days. You would say instead: "We are considering alternate sites that may delay the project." Mr. LEHNE. Perhaps I was misinformed, but I understood you to say I had written the letter that the present site was still adequate. Mr. GRAY. This is it. It does not mention anything about the site, does it? Mr. LEHNE. Mr. Gray, may I read it? Mr. GRAY. You sent a team to visit Carbondale. Mr. LEHNE. Yes. Mr. GRAY. Did they not look at the site? Mr. LEHNE. They looked at the Carbondale site to determine the probable location of facilities. Mr. GRAY. Right; and they came back and said we find them adequate, and not only find them adequate, but updated the priority to proceed. Mr. LEHNE. It is in this letter? Mr. GRAY. I just read it to you. Mr. LEHNE. We said it raised the priority of the need for a facility in Carbondale; that is what that letter said. Mr. GRAY. Well, is not the site an integral part of the facility? How could you know what the needs are without looking at the site! Mr. LEHNE. We have a lot of needs. Mr. GRAY. I would hate to think you would send team out, with the taxpayers paying the transportation, and would go out and meet in a restaurant someplace and have a few drinks and decide this is the time to go ahead and build the building. Here, read this telegram. Mr. LEHNE. I would like to read it. Mr. GRAY. I have never heard of anything like this. We could talk all day on Carbondale. You have had your chance but I have heard no rationale as to why the taxpayers are now burdened with two locations and probably going to sell one of them for a loss, all for no reason. Let's move on to the Virgin Islands. We heard testimony here this morning from the GSA that they were ready to go with plans, in fact they had spent over $88,000 on plans for a multiple purpose facility in the Virgin Islands at Charlotte Amalie, almost $100,000. I have a memorandum obtained from your files that shows you personally visited Charlotte Amalie. The population in that whole island of St. Thomas is 16,000. Now, they really have a growing problem there. We have 38,000 students alone in Carbondale, in addition to the other population in the city, but you did not feel it was important to go to Carbondale. But you did, in March 1970 go to the Virgin Islands. Now, I am not critical of that. I like to take trips, too, but the analogy I am drawing here is the fact that the space needs were so great that in April of 1970 in the Virgin Islands you took an option, a verbal option on a tract of land even before you had permission of the General Services Administration to pull out of this commitment for a joint project. I have a memorandum dated in April that shows that you instructed your real estate division of the New York office to go down and to sign an option for what you had taken as a verbal option. Now, I have never heard of a verbal option on real estate. I had the GAO look into this matter and I am quoting from their report to our committee: On the basis of our examination of the Postal Service and its regional office files and interviews with postal and other officials we were unable to conclusively determine how the site came to the attention of the Postal Service. Now, for the record let me state that a contract has been signed to acquire a small 312-acre tract of land, not in the business district of Charlotte Amalie, but a mile and eight-tenths from it on a 45-year lease at $35,000 a year and they are now estimating that the building to go on that site, the rent will cost about $125,000 per year. Now, visualize this: Over $150,000 of the taxpayers' money last year for a single purpose facility when we own the site at the other location and the money was going to be in fiscal 1972, this year. And all of a sudden the General goes down to the warm breezes and comes back with an option on a site that is not even in a central location, orders the New York regional office to go ahead and duplicate, and then he goes over to GSA and asks permission to pull out of their good multipurpose project. I wonder what would have happened if GSA had said "No." Can you visualize sticking the taxpayers for what will be at least $150,000 a year for the next 20 years on a noncancellable lease and five renewable options for 45 years and let GSA proceed with the building that they have contemplated at a cost of $6 million or $7 million in a little community? I could get a bigger crowd at a fight on the street out here than you will find on the average street in Charlotte Amalie. Yet, the justification is so great that the General comes back and signs up the taxpayer with a $36,000 noncancellable lease for a little 3-acre tract of land with no improvements on it. If that was not enough they now have redesigned it to have some kind of a facade down there to look Dutch or something and that is going to cost about $100,000. So here we are. Add this up and see what it is costing the American taxpayer to put up just a postal handling facility in a little island that only has 16,000 inhabitants on the total island, not just in Charlotte Amalie. I think the population there is like 6,000 or 7,000. Yet, since 1966 we have been trying to get a sectional center to work for 100 towns in Southern Illinois and Illinois is the fourth largest taxpayer in the Nation, and we still have not built a facility. In the Virgin Islands, this new Postal Service has such a high priority that they are going to invest all this money to immediately get a big facility going. I know the General is going to say, "Look at all the tourists that visit down there and they all mail packages." We have more students at the Carbondale University on any given day, and certainly no one writes any more than students writing home for money, than you will have down in the Virgin Islands. Most of those people are commuters who stay on the mainland or at Puerto Rico and go home at night. There are only five or six hotels on the entire island. This is the type of waste that and I abhor and I want the record to show that I think it is a disgrace and that some of us in the Congress now can only sit by and say, "I told you so." General, could you tell us who made the decision to select that site in the Virgin Islands? Mr. LEHNE. Well, I was there as you indicated. There were real estate men that had been there before. It was a combined decision. I was responsible for it. Mr. GRAY. Did you take a verbal option on that property? Mr. LEHNE. We discussed it with the present people who were in trust of that property, the fact before he would let it go, before any other use he would contact the Post Office Department to see whether or not we could formalize our needs. The needs for the Post Office Department, Mr. Gray, as you well know are not decided by the people building the building, the operational needs; the people who mail the mail and determine what the priorities are do that. Mr. GRAY. But would you believe, though, that an island with 16,000 inhabitants should have a higher priority than a congressional district with 468,000 people, because Carbondale, getting back to that, is a sectional center working mail from my whole congressional district, and we haven't had this kind of priority of jumping on a plane and getting an option and getting a building built. We have been trying since 1966 when Congress said we recognize the need in Carbondale and here we are just getting under construction. Mr. LEHNE. The Charlotte Amalie project started long before 1964. Mr. GRAY. I am talking about when the Post Office Department jumped into it. Mr. LEHNE. I think the Post Office people were the ones who found the site and turned it over to GSA. As Mr. Kreger indicated, it was a combined POD-GSA project. Mr. GRAY. Are you telling us that some of your real estate people recommended the site that you took a verbal option on? Mr. LEHNE. Mr. De Jesus I believe was his name. I do not have the correct pronunciation. Mr. GRAY. While there, how many other locations did you inspect? Mr. LEHNE. I do not know. I certainly discussed this with Mr. Medico. It is not the only site I looked at. I looked at quite a few other sites. Mr. GRAY. Privately owned sites? Mr. LEHNE. We contacted the Virgin Islands Governor's office and they took us around and showed us the sites available in the community. Mr. GRAY. Did you look at some of the Redevelopment Land Agency fill projects down there where land is going to be available and close to the dock where you would have access to water transportation and close to highways? Mr. LEHNE. We looked at those facilities, but we were told the land was not available. Mr. GRAY. How much time did you spend in actually looking at the different sites, not to be personal, but to get an idea as to how much of an evaluation really went into each site? Mr. LEHNE. I think I was in the Virgin Islands a total time of something like 4 days and that includes visits to St. Croix and St. John, also. Mr. GRAY. And you are telling this committee you did consider other sites? Mr. LEHNE. Yes; I did. Mr. GRAY. Can you tell this committee why you decided to give a verbal option for a lease instead of going back to New York and doing in the Virgin Islands what you are doing in other places, using condemnation and taking the site? Why lease instead of purchase? Mr. LEHNE. This decision as you know, as you well documented in February or March of last year, at that time we had expected this facility would have been built, but under contract. I mean there have been delays as you indicated in the Planning Commission in getting approval for the building. The people in the Virgin Islands did not like the original design. They have been modified to make them perhaps more adaptable to the community. Mr. GRAY. What I said was you came back following a 4-day stay in the Virgin Islands and decided you should take a lease, because according to a copy of the report I have here, the instruction to the New York office was to lease, not to buy. Why did you choose to spend $35,000 a year for a small 3-acre tract instead of paying $300,000 or $400,000 for the land? Mr. LEHNE. The land was not for sale. Mr. GRAY. Neither was the land you took in Carbondale for sale. Mr. LEHNE. We do not like to use condemnation unless it is a last activity. Mr. GRAY. Why did you use it on us? Mr. LEHNE. I was not here. Mr. GRAY. I am talking about the Department. Mr. LEHNE. I do not know, sir. Mr. GRAY. Well, it is the policy of the Department to make one call on the owners and if that one call results in a refusal of the owner to sell, it immediately goes to the Justice Department and the U.S. attorney for condemnation. You cite me one location where you visited an owner more than once or twice. I have never found one. Mr. LEHNE. That I, personally? Mr. GRAY. I am talking about your realty division. You always go to condemnation if you cannot reasonably get together with the owner who says I refuse to sell. Mr. LEHNE. It is not after one visit. Mr. GRAY. Well, I can get affidavits in the case of Carbondale and I am talking about the department. One 5-minute visit with the owners. Do you want to sell? No. Well, then, condemnation. That is what happened in New York also. Mr. LEHNE. I cannot answer that. I was not here. Mr. GRAY. You can answer my question as to why you chose a very high $35,000-a-year lease on a small 3-acre tract instead of buying it outright. In 10 years you could own that site for what you are going to pay and you have a 45-year lease now. Mr. LEHNE. We have options to buy. Mr. GRAY. And each year it goes up by 5 or 10 percent of course; no telling how many hundreds of thousands of dollars when you do get ready to buy it. I just wonder why the hasty decision on meeting in the Virgin Islands instead of coming back and thinking this out rationally because the memorandum you sent to the New York office was dated the day after you got back and it says in accordance with my verbal commitment go down and sign this up. Mr. LEHNE. I do not quite believe this is a fair statement of my memorandum. Mr. GRAY. I will be glad to show you copies if I can find it here. Mr. GRAY. Anyway, your memorandum to the New York office is dated prior to your letter to GSA to withdraw. Mr. LEHNE. We had discussions with GSA before I went there. Mr. GRAY. Your discussions, according to your memorandum from your own files said you talked to Commissioner Sampson about getting funds but not about withdrawing from the project. Mr. LEHNE. What we have been attempting to do is get commitments as you heard this morning. Mr. GRAY. Right. Mr. LEHNE. Whether or not buildings are going to be included in certain fiscal year programs and we have been attempting to ask those questions, I have personally to Mr. Sampson. I asked the Commissioner when he was here before and the mail has to be moved. The operational people want a facility to move the mail. Mr. GRAY. Well, I am still not able to get a definite answer to my question. Mr. LEHNE. Would you restate it, then? Mr. GRAY. I would just like to know why the taxpayers are going to be saddled with a 45-year lease with $35,000-a-year lease on the land and a $125,000 lease on the building when it is your policy to purchase property. If you could not get an owner to sell you condemn it. Mr. LEHNE. In February and March of 1970 we did not have the Postal Reorganization Act. We did not have the funds that we could own our building the way we have now. The operations people had |