Mr. May. Mr. Wall, we have heard that the State paid for parcel 12 an amount of $18,920 in connection with the taking of that property. Did you arrive at a figure which the State should have paid for that property? Mr. WALL. My estimate of value was $12,000. Mr. May. We have learned that the road commission paid $14,793 for taking a portion of parcel 12–1. What should the State have paid for that taking ? Mr. WALL. $2,200. Mr. May. Showing that the State overpaid on that property $12,593. We have learned that the State paid for taking a portion of a parcel of 12-A, $12,191. What should the State have paid on that property, granting the loss of access ? Mr. Wall. You are speaking of the warehouse? Mr. May. Granting the loss of access of $3,000, in showing that the State overpaid on that $9,191—that would be an overpayment of $9,191? We learned that for parcel 14, a partial taking there, the State paid $73,070. What should the State have paid, Mr. Wall? Mr. WALL. Correct. We have heard today from four property owners. We have discussed eight properties. The State paid a total of $181,929 for the takings, most of them partial takings of those properties, $181,929. Mr. Wall states that, according to his studies, the State should have paid for those takings a total of $44,555, showing an overpayment by the State just on those eight takings of $137,374. As the hearings progress we will hear additional information relative to the remaining parcels on that Fourth and Neville Street project. Mr. WRIGHT. The Chair will observe that, according to Mr. Wall's retroactive analysis and appraisal, the State paid for these particular eight parcels almost three times as much as Mr. Wall felt they should have been purchased at. That is a very wide span of difference. The Chair shudders to think what would be the cost of acquiring the right-of-way throughout the entire system if that large a discrepancy were made on top side for payment of right-of-way. Will we have additional testimony available from Mr. Wall with respect to the other properties in this taking? Nr. May. Yes, Nr. Chairman. We hope to do that Monday. Mr. WRIGHT. Mr. Wall, you can be here with us Monday, of course, Monday afternoon, if it is agreeable to the other members of the committee, and we can plan to meet again at 2 o'clock on Monday afternoon. Mr. Robison, does that meet with your agreement? This is a very shocking instance of overpayment. If those figures represent an accurate amount that was paid, this is a very shocking instance. Mr. Wall is a competent, recognized civil servant and a man with great experience in appraising, and from these figures the indication is that only slightly more than one-third of the amount should have been paid for these properties. We will be very anxious to hear your opinion on the others of the 34 land takings in this whole area. The committee will stand in recess until 2 o'clock Monday. (Whereupon, at 5:47 p.m., the committee adjourned, to reconvene at 2 p.m., Monday, July 16, 1962.) RIGHT-OF-WAY ACQUISITION PRACTICES IN WEST VIRGINIA MONDAY, JULY 16, 1962 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON THE Washington, D.C. The special subcommittee met, pursuant to recess, at 2:25 p.m., in room 1302, New House Office Building, Hon. Jim Wright presiding. Present: Representatives Wright, Cramer, Fallon, Robison, and Schwengel. Also present: Walter R. May, chief counsel; John P. Constandy, assistant chief counsel; George M. Kopecky, chief investigator; George H. Martin, administrative assistant; Robert L. May, minority counsel; Kathryn M. Keeney, chief clerk; Salvatore J. D'Amico, associate counsel; George E. Burgess, investigator; A. Courtney Hayden, Jr., investigator; C. Murray Gold, General Accounting Office investigator; Richard J. Sinclair, General Accounting Office investigator. Mr. WRIGHT. The special subcommittee investigating the Federal-aid highway program will be in session. As we enter the second week of hearings on the policies and practices of the West Virginia Road Commission and the U.S. Bureau of Public Roads in administering and carrying out the acquisition of right-of-way for Federal-aid highways in that State, several facts stand forth in stark clarity. It has become painfully obvious that the procedures followed in acquiring this property were incredibly lax." Testimony has shown clearly that: (1) Officials appointed by the State to administer this program were too often utterly lacking in the experience necessary to qualify them for their responsible tasks. (2) Fee appraisers upon whose judgment State and Federal moneys were expended lacked both the professional qualifications and the specific training requisite to their work. (3) On numerous occasions these fee appraisers violated the most basic principle of independent fee appraising by comparing their findings prior to submission of reports and often submitting absolutely identical reports, thus denying the State any basis of comparison, the necessary foundation upon which to establish an intelligent decision as to value. (4) The political spoils system appears to have been rampant. Seven out of the ten district right-of-way agent positions changed hands with the changing of the State administration in 1957. The actual forms used at that time in making application for State jobs required a signed recommendation by the county chairman and the county committeeman for the particular political party then in control. Two district right-of-way agents employed to handle this responsible position for the State have admitted to the committee that they were not qualified in appraisal or right-of-way work and each has admitted that he received his appointment as a matter of political reward. (5) The U.S. Bureau of Public Roads, advised of procedural deficiences in this State as early as 1955 and again in 1958, failed to take decisive action to insist that the irregularities be corrected. The Bureau seemed content to serve primarily as a conduit for Federal funds without fully assuming the responsibilities of administration imposed upon the Bureau by the act. The committee has seen all too clearly that the above combination of factors can be extremely costly to the taxpayers. Testimony on last Friday adduced the conclusion that settlements made on only eight pieces of property in Beckley, W. Va., had exceeded fair value by $134,000. It almost staggers the imagination to contemplate how costly it would be to the taxpayers of this country and the several States if the method used in that instance had been generally followed throughout the Nation. Right-of-way acquisition represents a very considerable cost factor in the building of the Federal-aid highway program, since 730,000 individual parcels of land will be required for the completion of just the Interstate Highway network. If a $1,000 overpayment were involved in just 1 out of 10 of these cases, the excessive cost to the taxpayers would come to $73 million. It is obvious that if the procedure employed in the taking of these 34 properties under review in Beckley, W. Va., had been general throughout the system, the total excess cost would go well into the billions. The most charitable thing that may be said with respect to the episode involving J. Walter Stalnaker, the receipt by his son of $23,000 from the State in a 9-month period, and the process whereby these funds ultimately reposed in the father's bank account, is that this constituted extremely bad judgment. The Chair believes that the episode involving J. Walter Stalnaker, as acting in behalf of the Ashland Oil Co., in the acquisition of private property, while at the same time representing the State of West Virginia as district right-of-way agent, is a clear and flagrant case of conflict of interest of the type that should be prohibited by law, if indeed it was not so prohibited. It should be beyond dispute that this sort of thing must stop. It is a travesty upon the American public, who are paying for these roads. The essential question which naturally follows from such disclosures is the extent to which irregularities of this type may have been general |