John P. Abbadessa, 1947-1962

Published by the Government Accountability Office on 1990-11-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United   States   General   Accounting   Office
                  History Program

November   1990
                  John P. Abbadessa
                  United   States   General   Accounting   Office
                  History Program
GAO                                                                 ,

November   1990
                  John P. Abbadessa


Published by the United States General Accounting Office,
Washington, D.C., 1990


          The History Program of the General Accounting Office (GAO) uses oral
          history interviews to supplement documentary and other original
          sources of information on GAO'S past. These interviews help provide
          additional facts and varying perspectives on important past events.
          Transcripts of the interviews, as well as the audiotapes and videotapes,
          become important historical documents themselves and are used in the
          preparation of written histories of GAO, in staff training, and for other

          Although the transcripts are edited versions of the original recording,
          we try to preserve the flavor of the spoken word. It should be under-
          stood that the transcripts reflect the recollections, impressions, and
          opinions of the persons being interviewed. Like all historical sources,
          they need to be analyzed in terms of their origins and corroborated by
          other sources of information. The transcripts in themselves should not
          necessarily be considered definitive in their treatment of the subjects

          John P. Abbadessa served GAO from 1947 to 1962. He progressed rapidly
          from a junior auditor to senior management positions of Director of the
          Transportation Division and Deputy Director of the Civil Accounting
          and Auditing Division. In this interview of Mr. Abbadessa, conducted on
          March 27, 1990, we have focused on his prominent role in leading GAO'S
          post-World War II activities from a largely voucher auditing process to
          more sophisticated audits of government financial and management

          Werner Grosshans
          Assistant Comptroller General
            for Policy

          iii                                                           GAO/OP-M-OH
John P. Abbadessa

             iv     GAO/OP-M-OH
Biographical Information

                    John P. Abbadessa served the United States General Accounting Office
John P. Abbadessa   from July 1947 to April 1962. He began his GAO career in the Corpora-
                    tion Audits Division and progressed rapidly, holding various positions in
                    the Civil Accounting and Auditing Division (CAAD).In 1959, he was
                    appointed Director of GAO'S Transportation Division and, from 1960 to
                     1962, he was the Deputy Director, C&AD.

                    Mr. Abbadessa attended schools in Washington, D.C., and in 1942
                    received a bachelor of science degree in business administration, cum
                    laude, from American University. Following service as a captain in the
                    U.S. Marine Corps during World War II, he received a master’s degree in
                    business administration from the Wharton School of Finance in 1947. He
                    is a certified public accountant (North Carolina, 1950).

                    Following his GAO career, Mr. Abbadessa served as Controller of the U.S.
                    Atomic Energy Commission until 1975. From 1975 to 1980, he was the
                    Director, Division of Budget and Finance, in the International Atomic
                    Energy Agency in Vienna, Austria. Since his return to the United States,
                    he has served as a management consultant for U.S. government agen-
                    cies, private corporations, and international organizations.

                    Mr. Abbadessa’s distinguished public service has been recognized on
                    many occasions. He received the Junior Chamber of Commerce Arthur S.
                    Flemming Award as 1 of the 10 outstanding young men in the federal
                    government in 1959. He holds the Atomic Energy Commission’s Distin-
                    guished Service Award (1970) and the National Civil Service League’s
                    Career Service Award for Sustained Excellence (1974). The Netherlands
                    Government cited him for outstanding international civil service in


                   Henry Eschwege retired in March 1986 after almost 30 years of service
Henry Eschwege     in GAO under three Comptrollers General. He held increasing responsibil-
                   ities in the former Civil Division and became the Director of GAO'S
                   Resources and Economic Development Division upon its creation in
                   1972. He remained the Director after the Division was renamed the
                   Community and Economic Development Division. In 1982, he was
                   appointed Assistant Comptroller General for Planning and Reporting.

                   Werner Grosshans is the Assistant Comptroller General for Policy. He
Werner Grosshans   began his diversified career as a government auditor in 1958 in the San
                   Francisco Regional Office and held positions of increased responsibility;
                   he was appointed Assistant Regional Manager in 1967. In July 1970, he
                   transferred to the US. Postal Service as Assistant Regional Chief
                   Inspector for Audits. In this position, he was responsible for the audits
                   in the 13 western states. In October 1972, he returned to GAO to the
                   Logistics and Communications Division. In 1980, he was appointed
                   Deputy Director of the Procurement, Logistics, and Readiness Division
                   and, in 1983, he was appointed Director of Planning in the newly cre-
                   ated National Security and International Affairs Division. In 1985, he
                   became Director of the Office of Program Planning where he remained
                   until 1986 when he assumed responsibility for GAO'S Office of Policy.

                   Roger R. Trask became Chief Historian of GAO in July 1987. After
Roger R. Trask     receiving his Ph.D. in History from the Pennsylvania State University,
                   he taught between 1959 and 1980 at several colleges and universities,
                   including Macalester College and the University of South Florida; at
                   both of these institutions, he served as Chairman of the Department of
                   History. He is the author or editor of numerous books and articles,
                   mainly in the foreign policy and defense areas. He began his career in
                   the federal government as Chief Historian of the U.S. Nuclear Regula-
                   tory Commission (1977-1978). In September 1980, he became the
                   Deputy Historian in the Historical Office, Office of the Secretary of
                   Defense, where he remained until his appointment in GAO.

                   vi                                                            GAO/OP-l&OH

Biographical                                                                      v
                      John P. Abbadessa                                           V
Interviewers          Henry Eschwege                                              vi
                      Werner Grosshans                                            vi
                      Roger R. Trask                                              vi

Interview With John                                                               1
                      Introduction                                                1
P. Abbadessa          Biographical Information                                    1
March 27, 1990        Early Assignments at GAO                                    3
                      Directing the Transportation Division                       4
                      Comments on the Corporation Audits Division                 6
                      Comprehensive Audits                                       11
                      Auditing the Reconstruction Finance Corporation            15
                      Audit of the Atomic Energy Commission                      17
                      Work on TVA                                                29
                      The Dixon-Yates Controversy                                33
                      Weitzcl-Campbell Relationship                              37
                      The 1966 Reorganization of GAO                             38
                      Recruiting and Training                                    41
                       The Post Office Audit                                     42
                       Interaction Between Civil and Defense Divisions           45
                       Decision to Leave GAO                                     46
                       The Zinc Case and Holifield Hearings                      50
                       Employment of GAO Officials at AEC                        52
                       Relationship With GAO Staff Auditing AEC                  54
                       Comments on Current Comptroller General                   57
                       Conclusion                                                59

Index                                                                             61

                      Vii                                                GAO/CCl&OH


A&B        Accounting and Bookkeeping Division
AEC        Atomic Energy Commission
All        American University
BOB        Bureau of the Budget
Btu        British thermal unit
CAAD       Civil Accounting and Auditing Division
CDA        Combined Development Agency
CPA        certified public accountant
DOD        Department of Defense
EEI        Electric Energy, Incorporated
FBI        Federal Bureau of Investigation
FHA        Federal Housing Administration
GAO        General Accounting Office
GE         General Electric
GSI        Government Services, Incorporated
IRS        Internal Revenue Service
NASA       National Aeronautics and Space Administration
OGC        Office of the GeneraI Counsel
OVEC       Ohio Valley Electric Corporation
R&C        Reconciliation and Clearance Division
R&D        research and development
RFC        Reconstruction Finance Corporation
TVA        Tennessee Valley Authority

Interview With John P. Abbadessa
March 27,199O

Mr, Eschwege    John Abbadessa, we are glad that you came back to GAO today, where
                you spent one of your many careers. The first 15 years, I believe, of
                your working life were spent here in GAO. I would like to introduce you
                to Werner Grosshans, the Assistant Comptroller General for Policy, and
                Dr. Roger Trask, who is the Chief Historian for GAO. We wanted to get
                together to talk to you about the impact-and it was a great one--that
                you made on GAO while you were here. In fact, some of your associates
                from that era told me that you were a really hard worker and the late
                Arthur Schoenhaut, when he came for a similar interview, told us that,
                in his opinion, you were probably the best accountant in town. That is a
                lot for Art Schoenhaut to say, isn’t it?

Mr. Abbadessa   Arthur was being kind.

Mr. Ekchwege    I will tell you a little story about when I came down here from New
                York. Charlie [Charles E.] Murphy told me to come to Washington just to
                look around because he was trying to entice me to come to work for GAO
                in 1955. He pointed to a door and said, “Now, see that door there. In
                there is a fellow by the name of John Abbadessa. He is one of our stars
                and he is working real hard.” I think you must have been on AEC[Atomic
                Energy Commission] work in those days. He used you as an example.
                Maybe you had a little bit to do with my finally coming to GAO in 1956
                because Charlie Murphy had a good sales pitch there, thanks to you.

                Before we get into some of the details, I wonder if you could briefly talk
Biographical    about your career at GAO, the different assignments you had, and your
Information     educational background when you came to GAO.

Mr. Abbadessa   Well, I went to high school here in Washington, D.C., at McKinley High
                School. Then I went as an undergraduate to American University [AU],
                also here in Washington, D.C. I didn’t have any money, and my parents
                didn’t have a lot, but I got a scholarship to American University. Amer-
                ican University had prelaw, preengineering, and premedicine. The only
                thing I could find that would lead to a career-I knew I wasn’t going to
                go more than 4 years to college-was accounting. I was pretty good in
                math. So I went into accounting. It turned out that being good in math
                didn’t help me much, but that’s beside the point.

                Page 1
               Interview With John P. Abbadessa
               March 27,199O

               Then 1 spent 4 years in the Marine Corps and, when I came back from
               the war, I decided 1 had better really find out what accounting was all
               about. So 1 went and got a master’s degree from Wharton. I visited
               Harvard first, but 1 wanted to do it in a hurry, in 1 year, and Harvard
               wouldn’t compromise. They mentioned Wharton, which I had never
               heard about. So 1 stopped at Philadelphia and went over to Wharton. 1
               told them I would like to get a degree in 1 year. At AIJ, I received a bach-
               elor of science, incidentally, rather than a bachelor of arts. AU didn’t
               have enough courses to enable a person to get enough credits for a bach-
               elor of science, so 1 took several graduate courses downtown. Wharton
               gave me credit for any course 1 had an A in, which was great, because I
               had all As. I got enough credits from Wharton to get a degree in 1 year.

               1 am unlike anybody else I know at GAO-it seemed like everybody had
               to be enticed to come. GAO sent out [Harry] Trainor or 0. Gordon Delk
               and had to talk people into coming to GAO. Well, 1 have lived in this city
               ever since 1930. I went to high school here, my family was her-e, and 1
               wanted a job in Washington. When I went to my adviser and told him 1
               was interested in Washington, DC., probably the government, he said he
               understood that the General Accounting Office was setting up a firm of
               WAS [certified public accountants] right in the middle of the government.
               He thought that 1 might be interested. This was in 1947.

               So I came down and 1 went in to see Delk right off the street. I gave him
               my background, which was just time in the service and some work at the
               railroads for about 6 months in the accounting department. However, I
               had good grades and a master’s degree from Wharton, and he welcomed
               me with open arms. So that is pretty much the educational part.

               1 might say 1 wrote my thesis under Dr. Maxwell, who was the Chairman
               of the Pennsylvania Board of WAS. 1 will never forget that, when he
               found out I was coming to the government, he called me into his office
               and really gave me the dickens. He said, “You are wasting a Wharton
               education going to work for the government. It is a haven of medioc-
               rity.” Actually, 1 had several pretty fair offers upon graduation from
               Wharton. We were the first graduating class after the war, and Wharton
               had a good name. But, anyway, that is how I came to GAO.

               What was the other part of your question? What did I do when I came to

Mr. Eschwege   Just very briefly-the        assignments.

               Page 2
                       Interview With John P. Abbadessa
                       March 27,199O

Early Assignments at
Mr. Abbadessa          Well, in the early days, my first assignment was the Federal Prisons
                       audit with a Levi Brantover. Then I worked at GSI [Government Services,
                       Inc.] with Tom Fickland. I went down to Fontana, Tennessee, where they
                       had some branch office accounting for GSI. I worked at RFC [Reconstruc-
                       tion Finance Corporation] for a while and at FHA [Federal Housing
                       Administration]. Then I got pulled off of FHA and assigned to our CPA
                       training course. The first year there I was an Assistant to Ted Freed-
                       lund, who ran the course [GAO staff technical training]. That was in 1950.
                       Then I ran the course in 1951 and 1952.

                       After that, we went out of business. We had two problems. In those
                       days, nobody would recognize government experience, or they had a
                       residency requirement for CPA candidates. Nobody in this area recog-
                       nized government experience. Some states would accept IRS [Internal
                       Revenue Service] and FBI [Federal Bureau of Investigation] service if you
                       were working in the accounting areas. We did some work with North
                       Carolina, and they recognized GAO experience. I think it is recognized
                       everywhere now. I’m not sure.

                       Also, North Carolina didn’t have a residency requirement, This class of
                       ours grew like mad. We had 55 people in 1950, 67 in 1951, and 111 in
                       1952. It was a tough course. We used to meet two evenings a week-one
                       evening we had a lecture and on the other we had a test-and then on
                       Saturday we also had a test. You had to work the problems sections of
                       the exam.

                       Anyway, in 1952, more than one-half of the CPAS who passed the exami-
                       nation in North Carolina were from GAO. The next year North Carolina
                       established a residency requirement. I got my CPA certificate from North
                       Carolina in 1950. The certificate is numbered with a three-digit figure.
                       It’s a low figure because 1950 is about 40 years ago.

                       We had a problem with Kaufman, who ran the Cades CPA Course; he
                       threatened to take us to court for unfairly competing with him. So we
                       wrapped it up. I think later, GAO paid for people to go to these courses.

Mr. Eschwege           Right.

                       Page 3
                 Interview With John P. Abbadessa
                 March 27.1990

Mr. Abbadessa    An interesting footnot,e my youngest daughter, who is a CPA, took a
                 refresher course at Cades on my recommendation some 30 years later.

                 Anyway, we had the training course for about 3 years. Then I went on
                 the AEC audit, about 195 1, and pretty much made a career of AEC Later,
                 about 1955, I was also assigned to the TVA [Tennessee Valley Authority]
                 audit. Later, when I became an Associat,e Director, I picked up the Post
                 Office audit.

                 [Comptroller General Joseph] Campbell called me up one day and said he
Directing the    was concerned about the Transportation Division and whether it fitt,ed
Transportation   in because it was kind of the last vestige of the old voucher audit. The
Division         Transportation Division was down on the fifth floor. They were a group
                 of real pros, relatively low graded, but there were 1,200 employees.

                 Mr. Campbell was very conscious of the budget. He wanted to reduce
                 staff who were doing voucher audits and build a professional staff,
                 while keeping the same budget level or, preferably, a lower one. So he
                 wanted me to make a survey of the Division and he said, “You can do it
                 either way. You can go in and audit it and give me your recommcnda-
                 tions on whether I should close it up and how or else I can make you the
                 Director.‘+ The top three people had left-Mr. [Hnrrcll 0.1 Iloagland and
                 his top two assistants. I didn’t want to go at all. 1 wasn’t interested in
                 transportation, but I said, “Well, if you want me to do it, Mr. Campbell, 1
                 will certainly do it. Make mcl the Director instead of doing a survey.
                 Then I would have one less person to argue wit.h.”

                 Ile said I could have anybody I wanted, so I pic:kcd a lad, Bob Floyd, to
                 be my assistant. We served there for about 10 months. While running it,
                 we had some great suc:cesses.l’he Congress had just passed a law setting
                 the statute of limitations ]on transportation audits] at 3 years. We were
                 way behind in t,hc audit when I got down there. So I put in some con-
                 trols, some reporting on production, and reorganized. Railroad used to
                 be the way everything was moved, and most ot’ the people were in rail-
                 road auditing. Trucks and airlines, however, were really being used
                 more than railroads, but Transportation didn’t have enough people
                 assigned to those audit.s. What had to be done was obvious. I shifted
                 people from rail to motor and airlines and adjusted the staff t.o the work
                 load. We caught up in the audit aiid continued to collect some $30 mil-
                 lion a year from carriers-nvercharges.      We didn’t lose any money due to
                 application of the statute of limitations.

                 Page 4
                Interview With John P. Abbadessa
                March 27,199O

                We also had some long-standing, major problems with the Railroad Asso-
                ciation from the transportation of material during World War II. There
                were big disputes and substantial money involved. There were a lot of
                new things, like jet fuel, that weren’t in the tariff. So the carrier would
                pick the highest priced commodity akin to jet fuel, and our people would
                pick the lowest price and, bingo, there was a dispute and a claim by the

                We settled these claims on an industrywide basis. Actually, we ended up
                in chambers, not in the court, with the staff of Felix Frankfurter, the
                specialists on transportation. They essentially told us, “Look, if you
                come to this court, you are probably going to lose.” I think they told the
                railroads the same thing-I’m guessing-because we were both ame-
                nable to settling it. Our problem was that we didn’t stamp the freight
                bills like we were supposed to for lend-lease material being shipped. The
                day before the meeting, our legal department said we had no case. They
                said to try to settle the claims by paying only 90 cents on the dollar.

Mr. Eschwege    What do you mean by the stamping?

Mr. Abbadessa   I’m not a really good technical man in transportation. I managed it. But
                one of the problems was that we were supposed to stamp each one of
                these freight vouchers to certify that it was in the war interest. We
                didn’t do it.

Mr, Eschwege    One of those bureaucratic things.

Mr. Abbadessa   That’s right and I was told, “Settle for 90 cents if you can.” I also had
                the flexibility to go to 95 cents. We got together with these elderly chaps
                from the railroads, and they made some kind of a statistical presenta-
                tion. I didn’t know much about transportation tariffs, but I knew a little
                bit about statistics. So I told them they didn’t have the universe correct
                and that their samples were flawed. I ended up making quite a speech on
                statistics. Finally, we settled the thing by paying only 50 cents on the
                dollar. That saved millions of dollars for the government.

                The third thing we did was reorganize the whole place. That was
                extremely interesting. Up to then, I don’t think I ever managed more
                than four or five people on an audit. I was the junior staff member for
                most of this time. Even when I had AEC and TVA, I had relatively small
                staffs. Suddenly, I had 1,200 people.

                Page 6
                     Interview With John P. Abbadessa
                     March 27.1990

                     Then I came back to CJLAD[Civil Accounting and Auditing Division], and I
                     was [Adolph T.] Samuelson’s Deputy for about a year or 2. Then AEC
                     offered me their Controller’s position and I accepted it.

Corrunents on the
Corporation Audits
Dr. Trask            Your first duty at GAO was in the Corporation Audits Division. I wonder
                     if you could comment on that-what      the Corporation Audits Division
                     did, the size and caliber of your associates, how that staff was recruited,
                     and the leadership of the Division.

Mr. Abbadessa        Well, like I said, the advisor at Wharton said they were setting up a CPA
                     firm in the government. It turned out he was right. I never regretted
                     coming to GAO, and, certainly, the Corporation Audits Division was a
                     really, really excellent organization. I think it was started because cor-
                     porations weren’t under much congressional control. I’m not even sure if
                     they were under GAO review. The Congress wanted to put them under
                     some kind of control.

                     It started in 1945, I think. Anyhow, I came in 1947. T. Coleman Andrews
                     had just left. Howard Rordner was still here but not for very long. Ted
                     Herz ran the RFC audit-he was here, but not for very long. Steve Ives
                     became the Director, and Irwin Decker became the Deputy. Personnel
                     was handled by Mel Werner, but Gordon Delk handled personnel when I
                     was here. Also, they had a whole group of grades 14 and 15. I'm not sure
                     whether we had assistant directors. Corporation Audits was heavily
                     salted with ex-Navy cost inspectors, who were stationed at the various
                     Navy plants. It seemed that they were all former Navy personnel,
                     although there might have been some former Army and Air Force types.

                     Most of them had public accounting experience and were 10 to 15 years
                     older than I was. Really, as a group, they were superb. I mean people
                     like Samuelson, [Roy] Lindgren, and Otis McDowell. There were some 8
                     or 10 of them, including [Ted] Westfall. So it was a good outfit. The staff
                     was relatively small. We were doing essentially commercial-type audits,
                     balance sheet verification, and the like. Most government corporations
                     had a requirement to have financial statements. They varied in quality.
                     TVA'S statements, for instance, were very, very good. Some of the other

                     Page 6
                -.                                                                              -
                     Interview With John P. Abbadessa
                     March 27,199O

                     ones weren’t nearly as good. That was the group, and they were, I
                     thought, absolutely superb.

                     I have often thought that starting with commercial-type audits, where
                     you audit payrolls and take inventory, gave me an excellent base in my
                     later career. I think-I’m  not being critical here-if I came into GAO
                     now, I would start at a high level of management activity. If you moved
                     on to a comptrollership or something like that, I think you would be
                     missing that type of basic accounting experience.

                     Anyhow, I found that the audit work for the first 3 or 4 years was
                     essentially commercial-type auditing. And it was very valuable. I did
                     payroll, As a matter of fact, I discovered “fraud” on my very first audit
                     of the payroll. The name on the payroll was one thing, but the check
                     endorsement was something else. That’s when I found out married
                     women usually change their names and my fraud case evaporated.

                     But I learned. When I went to Fontana, GSI was doing branch office
                     accounting for the Washington headquarters. It was a mess, absolutely a
                     mess, and I was given the job of reconciling it.

Mr. Eschwege         What is this Fontana you are talking about?

Mr. Abbadessa        GSI, as you know, used to run the government cafeterias. Fontana was
                     one of the TVA construction sites just a little bit north of Knoxville. They
                     made it a recreation facility and had horseback riding, swimming, and
                     all of that.

                     It was owned by GSI, and they had branch office accounting out of their
                     Washington office. We had to reconcile the accounts, and I spent hours
                     and hours. Finally, I got the difference down to, I don’t know, $14 or
                     something like that. I then went to the boss and said, “Enough is
                     enough.” He said, “lXo, it isn’t.”

                     So I went back and I got the difference down to about 32 cents. So 1
                     walked into his office and threw 32 cents on the desk and said, “I’m
                     through.” He said, “You’re satisfied?” I said, “Yes, sir.” He said, “How
                     do you know it is not $1,000,000.32 one way and $l,OOO,OOOthe other

                     But, I will tell you, the solution was simple. We set up a system where
                     they posted from copies of the same records that the home office used. I
                     learned two great lessons there. If you’re going to run an activity out of

                     Page 7
                lntewiew With John P. Abbadessa
                March 27,1990

                headquarters, you should post from the same documents; this is true
                even with computers nowadays. The $l,OOO,OOOeach way was also a
                valuable lesson.

                So I felt the Corporation Audits Division was an excellent outfit,
                extremely well staffed. I also think the training we received, while I’m
                sure it would be considered quite mundane, if not insulting, by the
                present staff, was very valuable indeed.

                Another thing that I think worked out pretty well is they had this initial
                cadre of fairly young people. At that time, to me, they were old. Nowa-
                days, I would say they were young. However, that source of personnel
                seemed to dry up. So GAO went to college recruiting and started bringing
                in younger people. GAO worked hard-later      I did some recruiting and I
                certainly worked hard-to get top people, although it wasn’t always
                that easy. The combination of that initial group, plus some fairly high-
                caliber college graduates, I think, served the Office well and essentially
                became the core of the Division of Audits after the Westfall review.

                Ted Westfall was the first Director of Audits. He didn’t stay very long;
                then Bob Long took over. He was also an excellent, excellent man. He
                had some problems, unfortunately, and when he left, Mose [Ellsworth H.
                Morse] took over the Division. Then they had a reorganization that
                broke the Division into Civil and Defense Divisions; Morse headed the
                Civil Division for only a short time. When they appointed him to head
                up Policy, Samuelson became the head of Civil, and Bill Newman became
                the head of Defense.

                Bill Newman, incidentally, was my supervisor in GSL He came around
                one time; I was working on something, and he asked, “Are you busy?”
                He was the big boss. The first time I’d ever seen him-tall, powerful-I
                said, “No, Sir.” Then he gave me hell for not being busy. Since that day,
                I have never said I wasn’t busy when somebody asked me. But Newman
                was a force, and I liked him a lot.

Mr. Eschwege     By the way, you mentioned T. Coleman Andrews before. Was he the
                 man who became Commissioner of Internal Revenue later on?

Mr. Abbadessa    Yes, I think so,

Mr. Eschwege     What grade would he have had in    GAO   when he headed the Corporation
                 Audits Division‘?

                 Page 8
                Interview With John P. Abbadessa
                March 27,199O

Mr. Abbadessa   Oh, I think the grade must have been a GS-15, because they didn’t have
                supergrades then and guys like Samuelson and others were 13s and 14s.
                Later, such positions ended up as GS-18s Assistant Comptrollers Gen-
                eral, and all that, but not in those days.

                But in answer to your question, Roger, I think it was an excellent outfit.
                Further, I think it was a very solid base from which the GAO of today
                has evolved. For one thing, though, it wasn’t all that well respected by
                outsiders. It wasn’t used much by the Congress. Later in the 1950s and
                the 1960s I think we made some real progress in that area with some of
                the work we did. I guess Ted Westfall with the Maritime Commission
                audit was an opening shot; Schoenhaut over there on public roads and
                the work we did at AEC and TVA started to generate some congressional
                attention and a lot of respect.

Mr. Grosshans   What was the relationship between the Corporation Audits Division and
                the rest of the divisions? Was there any cohesiveness or did you basi-
                cally do your thing and have your area of responsibility?

Mr. Abbadessa   Are you talking about the early days?

Mr. Grosshans   Right, the early days.

Mr. Abbadessa   I don’t think we were required to pay any attention to the other divi-
                sions. I think most people, certainly at my level, were hardly even aware
                of any division, except General Counsel. General Counsel was a major
                force. You had to get your report through General Counsel and, basi-
                cally, GAO in those days had two major missions. One was to determine
                the intent of the Congress, and the other was to exercise the authority
                we had to hold up payments. That was the big stick we had, and while
                we didn’t use it that much, it was always there. It was a heavily legal-
                ized organization when it came to reporting.

                Now, as far as the work we did, essentially we just worked on our own.
                When people started worrying about why our reports were taking so
                long to get out-which    was a curse in those days, and I suspect it still
                occurs-we were looking for some ways to shorten the time frame. We
                finally figured out that one of the reasons we were so slow-there were
                many-was the General Counsel’s review, which could take months,
                When they finally finished with a review, they practically wanted you
                to do a new audit to cover legal issues, So we started consulting with the
                legal people when we thought we might have a legal problem. Then
                some very good relations were established with the legal division.

                Page 9
                Interview With John P. Abbadessa
                March 27,1!390

                In the Corporation Audits Division, except for the Legal Division, we
                really didn’t have, certainly at my level, any contact at all with [E. W.]
                Bell’s audit group, R&C [Reconciliation and Clearance Division], A&B
                [Accounting and Bookkeeping Division], Transportation, Claims, Investi-
                gations, and Systems.

Mr. Grosshans   IIow big did the Corporation Audits Division get? Did you do most of the
                work out of headquarters, or did you have roving teams that did some
                of that work‘?

Mr. Abbadessa    I don’t know how large we got when we were Corporation Audits in the
                early days, but I know the answer to your second question. We were
                essentially traveling auditors. I must have spent 40 percent of the time
                on the road. Fortunately, I like travel, and I have continued to do so for
                the next 40 to 50 years. We did a lot of traveling. In those days, you
                couldn’t go by plane, so we went by train across country. Many times we
                would get sleepers, knock down a wall, and play bridge. I don’t know
                how many times I went across Texas, and it would take about 2 days
                traveling past sagebrush. Most of the travel was to major cities: Los
                Angeles, Denver, Chicago, Atlanta. I think there were some field offices
                 out there, but it wasn’t the formal structure it is now. We didn’t have
                 much to do with the field offices-as a matter of fact, later when GAO
                 set up a Field Operations Division and John Thornton headed it, the jobs
                we were on still didn’t have much to do with field offices. We did the
                jobs ourselves.

Dr. Trask       Just one more question about the Corporation Audits Division work. The
                American Institute of Certified Public Accountants apparently took a
                dim view of GAO'S approach to these audits, feeling that perhaps inde-
                pendent CPASshould do the audits. Do you recall that problem? Or was it
                not much of a problem‘?

Mr. Abbadessa   Well, again, you’re talking about when I was a GS-5,7, or 9. If there was
                a problem, I wasn’t aware of it. That they would have had concern
                doesn’t surprise me in the least. I’m a CPA. I passed the exam the first
                time. I have some serious problems with the Institute. I suspect they
                were more worried about protecting turf. If it made such comments,
                they were made before the Institute knew what it was criticizing, or, if
                they were made after the Division was set up, the Institute didn’t bother
                to find out what it was all about. Independence has been a byword from
                the day I walked into GAO, even in those days. When Joe Campbell
                showed up, I mean it, became almost a religion, emphasized maybe a
                little bit too much.

                Page 10
                       Interview With John P. Abbadessa
                       March 27,199O

Comprehensive Audits
Mr. Grosshans          You talked a little bit about the early days of the Corporation Audits
                       Division and some of the folks that you were bringing in. I guess that at
                       about the same time, Mr. [Lindsay] Warren, then the Comptroller Gen-
                       eral, thought seriously about how to change GAO from a voucher-flipping
                       organization to more of an audit- and maybe even an evaluation-ori-
                       ented organization. In 1949, he issued a memo decreeing that, “Hence-
                       forth, we will do comprehensive audits.” What did that mean to GAO in
                       1949, and did anybody know what was really wanted?

Mr. Abbadessa          A couple of things. First of all, I am not sure this idea came from the top
                       down, from Mr. Warren. I didn’t know Mr. Warren. I never met Mr.
                       Warren. My big jump in the pan came with the Dixon-Yates report, and
                       he had left just a few months before that.

                       If I had to guess and this is a fairly educated guess-I think the real
                       leader in this thing was Walt Frese. Frese had a group of good people up
                       there, such as Ray Einhorn and Reece Harrill. In the Corporation Audits
                       Division, there were some people who were program oriented in their
                       auditing, like Ted Westfall, and some who were strictly balance sheet
                       oriented, like my good friend, Samuelson. Mostly, you had a very per-
                       ceptive and sympathetic Frank Weitzel. I suspect the thinking primarily
                       came from Frese, Ray Einhorn, and Reece Harrill. Then Westfall was
                       given the task to review [GAO operations and organization], spent 6
                       months, came up with this overall organization, and became the head of
                       the new Division of Audits. Westfall did the survey and set up a job for
                       himself. However, Frank Weitzel was the person who made it happen.

                       What did the term “comprehensive audit” mean? I don’t know that I
                       have ever seen it defined. You heard operations audit, you heard pro-
                       gram-results audit, but in the final analysis, it became reasonably clear
                       very early that there was a desire to expand beyond the audits of corpo-
                       rations. There was a desire to spend less time on financial statement
                       verification. The initial thought was we would go in and review systems.
                       This is why I think Frese was involved. We would determine and test the
                       system. If that test gave you the right results, you accepted the financial

                       This approach grew like a tidal wave, and then we started getting into
                       the audits of contracts. They were a fairly inviting target. As we
                       expanded beyond the old line agencies and got into Am, NASA [National

                       Page 11
                Interview With John P. Abbadessa
                March 27,199O

                Aeronautics and Space Administration], and TVA, we encountered project
                and construction overruns. If you were alert at all and since you were
                going in with 20-20 hindsight, it made a lot of sense to do contract
                audits. Such audits received a lot of publicity, and I think that was
                attractive upstairs.

                Then we got into program-results audits. So while I don’t know where
                the term came from, I think the guidance and the intent were clear from
                the beginning, and I think things moved fairly rapidly in that area and
                in the right direction.

Mr. Grosshams   Did you do any comprehensive audits?

Mr. Abbadessa   Did I personally do any?

Mr. Grosshans   That’s right.

Mr. Abbadessa   Oh, yes, sir. I don’t know if it meets anybody’s criteria for comprehen-
                sive audits, but after the first 3 or 4 years, I was out of the financial
                verification area. At FHA, we had a lot of repossessed houses to deal
                with, and GSIwas a commercial-type operation as was Prison Industries.
                The best example was AEC. AX was a contracting agency. It had 2,000
                government employees, but 140,000 contractor employees. Savannah
                River was operated by DuPont, Oak Ridge by Carbide, and Hanford by
                GE [General Electric]. AEC gave policy program direction, but the contrac-
                tors conducted the activities. So that resulted in a lot of contract audits.

                TVA is a commercial-type activity, and, while they had very fine finan
                cial statements, we got involved in the coal contracting, construction,
                and power privilege. So I would say that most of my career with GAO
                consisted of, in quotes, “comprehensive” audits. I might add that I
                mainly defined what and how we were going to audit; nobody ever gave
                guidance or bothered me very much.

Mr. Grosshans   I think that is a good description of comprehensive auditing because,
                when I came in 1958, I was assigned to a comprehensive audit, We’re
                still trying to figure out what the comprehensive audit intent was and
                what we were supposed to do. I guess shortly after that, GAO concluded
                that comprehensive audits were not really what we were planning to do
                in the future. It was much more targeted. The types of things that you
                are describing get somewhat into the program side, and program results
                were much more targeted. This term “comprehensive” audit may have

                Page 12
                Interview With John P. Abbadessa
                March 27,199O

                given people the idea that this was a broadbrush approach to what a
                particular agency was supposed to do.

Mr. Abbadessa   I don’t have any idea of the origin of the term, but I think the intent was
                clear. It probably was the effort of some thinkers like Frese or Weitzel or
                somebody else to come up with some term that would clearly distinguish
                it from a financial audit, which was the bread and butter for the Corpo-
                ration Audits Division in the early years. This they accomplished.

Dr. Trask       Was the Corporation Audits work a kind of bridge to the comprehensive
                audits, between the old and the new? Did it have anything to do with
                comprehensive audits?

Mr. Abbadessa   I think up to 1945, the work was with centralized vouchers-stamping,
                warrants, verification, and reconciliation. I’m not sure what this work
                accomplished. Probably, it met the criteria of some kind of decent fund
                control, but they certainly didn’t get into the type of audits we do today.

                The Corporation Audits Division work you could look at as a bridge, I
                guess, but to me it was the starting point and the base for making com-
                mercial-type audits, and it was the business we were in for 4 years.

                Then, with the Maritime audit, we got into subsidies and rate analysis,
                and we weren’t working with financial statements, I doubt if Maritime
                had any financial statements. I think the idea then was, “All right, let’s
                expand into the activities of the rest of the government.” You certainly
                couldn’t do financial statement audits in most of these government agen-
                cies. So somebody came up with “comprehensive” audits. To me, it was
                a good term to mark a major change in direction from what the Corpora-
                tion Audits Division was doing, and I think it accomplished that

Mr. Grosshans   I think Samuelson, in his interview with Roger Sperry, probably had
                some pretty good insights into this when he pointed out that the finan-
                cial audits that you spoke of in the Corporation Audits Division started
                out looking at things more from the financial standpoint. But as they
                were getting into some of the other issues, auditors started to raise the
                question: Does this make sense? Did the inventories need to be the size
                that they were? Even though they were there, did we really need those?
                I think that was kind of a starting point to get into more of the agency-
                type audits and look at the issue of what we were getting for the money,

                Page 13
                Interview With John P. Abbadessa
                March 27.1990

                You mentioned Westfall’s Maritime audit. Of course, he got into the same
                issues. You know, it was: What were the subsidies for? Who got the sub-
                sidies? Were the recipients legitimate entities and entitled to those subsi-
                dies? I think what we had is probably an evolving approach to
                comprehensive audits, which became much more defined as we went

Mr. Abbadessa   Henry was kind enough to send me some of these previous interviews.
                Unfortunately, they arrived kind of late and I didn’t get to read Sam’s
                [Adolph T. Samuelson], and I don’t want you to take this statement
                incorrectly. I worked very closely with Sam, and I was his Deputy for a
                couple of years.

                Sam gave you an excellent statement, but he was one of the last people
                to get on board on this comprehensive audit idea. Sammy was a finan-
                cial statement auditor. I had some really major early battles with him
                over what we should be doing. When he was selected to head the Civil
                Division, you could see him grow into this. He had the background, he
                had the intelligence, he was just a superb Director, and he made a major
                contribution to this Office. My point is that we had people with varied
                backgrounds, and, while the intent was clear, the progress depended on
                who your key individuals were. Some weren’t that enthusiastic origi-
                nally. Later, it became a religion.

Mr. Grosshans   I know you already mentioned Frese and others who had a hand in
                enacting the Budget and Accounting [Procedures] Act of 1950. What did
                the act mean to GAO? Can you comment? Did you have any involvement
                in that at all‘?

Mr. Abbadessa   I certainly didn’t have any involvement. I was probably a grade 9. How-
                ever, I was always interested in the mission of the Office, and I followed
                it to some extent, but I had no real intimate knowledge. Certainly in
                those days, the key man on anything with the Congress was Frank
                Weitzel. I was always amazed when I got to know Frank Weitzel bettel-
                and I certainly did, at how he was so tied into the mission of this Office
                and how he, as a lawyer and with GAO basically a legal organization at
                that time, learned so quickly and so intently the value of audits. He was
                the major link during my time with the Hill and certainly with the
                Accounting Act of 1950. He was supported by guys like Frese and Bob
                Long, but I think the 1950 act is a monument to Frank Weitzel. Now, I’m
                not sure it was all his thinking, but he certainly sold it to the Congress.

                Page 14
                      Interview With John P. Abbadessa
                      March 27,199O

Auditing the
Finance Corporation
Mr. Eschwege          Well, John, you have already given us a list of the different audits you
                      were on, but we are going to get into some more of that now. One of the
                      earlier ones, although not the first one, was the Reconstruction Finance
                      Corporation audit that you were involved in. Did you head that up, or
                      were you a member of the audit staff?

Mr. Abbadessa         No. I was maybe a grade 9 or 11. I was a long way from heading it. It
                      was a good audit. I learned a lot. One of the things we had to do was
                      verify some collateral that RFC held.

Mr. Eschwege          It was a lending institution, wasn’t it?

Mr. Abbadessa         Yes. Well, they had lots of activities, but it was a lending institution,
                      also. It was a subsidizing agency; it was a World War II thing and it got
                      into synthetic rubber production, defense plants, lending, and other

Mr. Eschwege          Even housing, I think.

Mr. Abbadessa         Oh, definitely. But to point out what a great learning experience GAO
                      was, even though I was at a fairly low grade then, the Federal Reserve
                      Bank was holding the collateral on some loans. We went to New York to
                      make an audit, and we sat around all morning trying to get into the Fed-
                      eral Reserve Bank. I was amazed to see when we finally got in that, for
                      this collateral, Great Britain owned General Motors stocks and large
                      amounts of other blue-chip stocks.

                      Also, maintaining financial records I guess was practically impossible
                      during the war years, but we now had the responsibility of auditing
                      them. One of the major things that Westfall did, it was under Ted Herz,
                      was call us together once and hand out some financial statements. The
                      residual figure was the equity of the 1J.S.government. I asked how he
                      support,ed the equity figure. I always asked a lot of questions. I still ask
                      questions today because that is how I learn. I was really interested in
                      how we had come up with the figure.

                      Page 16
                Interview With John P. Abbadessa
                March 27,1!390

                I remember one time I went into the certifying officer, whom I held in
                great respect. I told him I was sorry we had a major finding. He said,
                “Major? How big.7” I told him, “Well, it was $3 or $4 million that came
                out of our review of the depreciation schedule.” He said, “Well, that’s all
                right. I don’t worry about those million-dollar things, I worry about the
                $30 things.” So I kept arguing with him. He had a hearing aid. So finally,
                he got tired of listening to me, and he turned it off and said, “You’re off
                the air, son.”

                But, to get back to Westfall and his financial statements-it came as a
                huge shock to me that the equity of the US. government was strictly a
                balancing figure without any support. We ran down all the assets we
                could and all the liabilities, and the balance was the equity of the U.S.
                government. Westfall said, in typical fashion, “This is it. From now on,
                these are the figures. We can support them.”

                I said, “Well, what about all the millions of dollars, trillions of dollars,
                that were spent during the war ?” It just all got wiped out. But when you
                think about it, it was probably the best thing that we could have done.
                At least from that point on, we had fairly decent statements to audit. I
                learned a lot from that. In later years, when I had an impossible situa-
                tion, I had the courage to worry less about the past and structure some-
                thing that made sense for the future.

Mr. Eschwege    RFC was one of the big corporations in those days.

Mr. Abbadessa   Oh, yes.

Mr. Eschwege    The biggest, except for the Commodity Credit Corporation?

Mr. Abbadessa   I suspect it was larger.

Mr. Eschwege    Larger than that?

Mr. Abbadessa   I think so. I don’t really know, but it was big. It’s the biggest of any of
                the activities I ever audited.

Mr. Eschwege    As I understand it, also, RFC management opposed GAO'S coming in there
                and doing the audit, more so than anybody. In other words, I think RFC
                was probably against corporation control.

Mr. Abbadessa   That might well be. It had a very flashy head, Jesse Jones, from Texas.
                Apparently, he was a pretty fair wheeler-dealer. On the other hand, I

                Page 16
                      Interview With John P. Abbadessa
                      March 27,199O

                      think some of the defense plants, the synthetic rubber, and some of the
                      other activities RFC operated were a real value in the war effort.

                      However, its accounting certainly wasn’t very good, and we were inter-
                      ested in accounting in those days.

Audit of the Atomic
Energy Commission
Dr. Track             One of the other audits that you were involved in in these years was, of
                      course, at the Atomic Energy Commission, What were the kinds of
                      things that you focused on there? What were the issues? Would you put
                      this work in the category of comprehensive audits as you understood
                      them at that time?

Mr. Abbadessa         Yes, clearly. It turned out AEC had a very good financial management
                      system-it prepared financial statements that were probably as good as
                      any of the corporations. Its original Controller was Professor [Paul]
                      Green from Illinois, and Walker Campbell headed accounting; he was a
                      mighty fine accountant. However, we weren’t that interested in the
                      financial statements.

                      I was assigned to the AEC audit in about 1951 or 1952. Our major efforts
                      were with its contracting and legislation, We made a lot of preliminary
                      surveys. You didn’t even have to be very bright to detect areas of weak-
                      ness, When we saw a construction project with a 200-percent overrun,
                      we figured that something was wrong someplace, whether it was the
                      original estimate or the project management.

                      We did get into some accounting, such as the allocations of costs in
                      establishing prices. Later, the big breakthrough for me, personally, was
                      the Dixon-Yates contract, which is a story in itself. While on that audit, I
                      was assigned to the Appropriations Committee and reviewed the Am
                      budget. Then I was assigned to the Joint Committee on Atomic Energy. I
                      was able to establish pretty good relations, which were valuable later.
                      When I ran the AECaudit, I used to visit with the Joint Committee staff
                      to determine the things in which they were interested.

Mr. Eschwege          Are you talking about running the audit, for GAO?

                      Page 17
                Interview With John P. Abbsdessa
                March 27,199O

Mr. Abbadessa   Yes. Running the audit of AEC for GAO. The Congress was always inter-
                ested in legislation. AECwas starting a nuclear energy industry, and it
                had numerous cooperative arrangements. We would find out what the
                Congress was interested in and the subjects on which they were going to
                hold hearings. We would then go out and audit those things. We would
                come up with reports before the legislation was passed or while it was
                being considered, and we built up a pretty fair reputation for assisting
                the Congress.

                Without going into a lot of detail, after you invited me in, I looked at
                some of our reports. [I worked on those audits] starting from 1952
                through 1958, and then I went out of [that] business because in 1959 I
                went to the Transportation Division. In 1953, Eisenhower had been
                elected President, and he wanted a review of the Truman budget. The
                administration brought in a lot of people from industry to make the
                review and attached a GAO man to each one of these guys from industry,
                I think to help translate the government jargon and to provide back-
                ground. I worked with [Charles Robert] Bob Fay from Pittsburgh Plate
                Glass. He was the Executive Vice President or the Comptroller or some-
                thing like that.

                We reviewed the Truman budget and came up with recommendations
                that ended up with a $540 million reduction in the AEC appropriations.
                In those days, we had field offices at Albuquerque, Oak Ridge, and Rich-
                land. We sent out a letter asking them for all of their suggestions, and
                they came in with several areas where they thought reductions could be
                made. Most impressive is that they did this in a 2-week period.

                This is from a letter that I wrote after the review was over:

                “I wish to acknowledge the important contribution made by our AEC Washington
                staff and by our field offices. As part of the AEC audit, the Washington staff had
                sent several letters to the field offices summarizing important points that were
                raised in the 1952 audit with instructions that the field offices ascertain during
                their current audits what steps AEC had taken to correct them and prevent their
                reoccurrence. With this work already done, I was able to write the field offices
                requesting this and other information and set a 2-week deadline. The field offices
                submitted reports which provided a wealth of specific examples which we used to
                illustrate areas where savings could be made ”

                The letter also listed the accomplishments.

                Page 18
                 Interview With John P. Abbadessa
                 March 27,199O

                 This ended up with a well-attended meeting with Congressman [John]
                 Taber. The Republicans then had control of both Houses of the Con-
                 gress. I think it was the last time. Mr. Taber was the head of the House
                 Appropriations Committee, and Mr. Phillips was the head of the House
                 AU: Appropriations Subcommittee. At the meeting with Taber were Mr.
                 Phillips of the Congress; Mr. Dodge, who was the Director of the Bureau
                 of the Budget; Sam Hughes, who was then with BOB;Mr. Strauss, who
                 was the Chairman of AEC; Mr.Nichols, who was the General Manager of
                 XC; Mr. Fay; and I. Ilntil then, AEC would not accept any of our pro-
                 posed reductions.

                 Even then, AEC didn’t accept all of them. It accepted about $400 million
                 worth of them. Mr. Strauss initially took a tough position against any
                 reduction and had the backing of the White House. However, when
                 Eisenhower came in, the administration added a big increase in the AEC
                 budget that. wasn’t in the Truman budget for the test that led to the H-
                 bomb. By making the reductions that we showed them, they could add
                 the increase that was necessary for the H-bomb test and stay just at the
                 Truman budget level without disclosing the test. Strauss lost this battle,
                 and the budget went on to President Eisenhower. During congressional
                 hearings, the additional reductions of $140 million were made based on
                 our findings.

                 Then in 1954, we had the Dixon-Yates affair, which maybe you want to
                 discuss separately.

Mr. Eschwege     Let’s discuss it separately, yes.

Mr. A bbadessa   In 1955, we issued the Ebasco report. On Mr. Campbell’s first day at
                 GAO,  I got called up to his office with Bob Long. Everybody told me I was
                 going to get fired because Mr. Campbell had voted for the Dixon-Yates
                 contract, and we had testified in the Congress against it. The Bureau of
                 the Budget, with Dodge, supported it; the Federal Power Commission,
                 headed by a gentleman named Kuykendall [Jerome], and Smith, their
                 chief accountant, had approved it; and everybody in town, except GAO,
                 had signed off on it. I had made the review and recommended several
                 significant changes in it that had been accepted. The day I walked into
                 Mr. Campbell’s office, he said he was glad to see me again, and he
                 thought that the changes I had recommended made a good contract even
                 better. IIe then said he wanted me now to review the EEI [Electric
                 Energy, Inc.] and ovk;c [Ohio Valley Electric Corporation] contracts,
                 which were power contracts of AEC that were awarded in the Democratic

                 Page 19
                Interview With John P. Abbadessa
                March 27,199O

                So I said, “Yes, sir,” but I was a little bit upset because up to then we
                had been pretty much politically immune. I thought, “Hey, this guy is a
                Republican.” He was Eisenhower’s Comptroller, I think, at Columbia
                University. We all wanted Frank Weitzel to become the Comptroller Gen-
                eral. However, it turned out Campbell wasn’t political. He was anything
                but political. Later I found a letter that showed it was actually Senator
                Clint [Clinton] Anderson [who requested the review]. This came out in
                February of 1955. I’m not sure when Mr. Campbell came over here, but
                it was in late 1954,

Mr. Eschwege    December 1954.

Mr. Abbadessa   December, yes. This newspaper article states “Capitol Hill may soon see
                a Democratic-led committee investigate contracts negotiated by the
                Truman Administration.” It was Clint Anderson, who was Chairman of
                the Joint Committee on Atomic Energy, who requested that GAO look at
                the contracts.

Mr. Eschwege    1955, right?

Mr. Abbadessa   Yes, 1955. We issued a series of reports and I learned another lesson. He
                wanted reports on the Ebasco, EEI, and OVECcontracts. I made a survey
                and said, “Well, we’ll issue it in three parts.” Well, I got out Part 1, but it
                soon became apparent I wasn’t going to get out Part 3, only Part 2. So
                since then, I never issued another report that said, “Part 1.”

                Anyway, we reviewed and issued the Ebasco report. Mr. Campbell was
                interested in newspaper articles concerning GAO reports. So we always
                sent them up to him. He read them all and initialed every one of them.
                Before it was over, we had a whole series of these power reports.

Mr. Eschwege    What did Ebasco do‘?

Mr. Abbadessa   Well, Ebasco did the engineering and construction for the Joppa [Illinois]
                plant, one of AEC’S major power suppliers. AECwas supplied by EEI, by
                OVEC, andby TVA.

Mr, Eschwege    Electric Energy [Incorporated] still exists today, I think?

Mr. Abbadessa   Yes. It’s a group of power companies that got together to run the Joppa
                plant. Ebasco had enormous cost overruns. The importance of Ebasco
                was that it was also selected to build the Dixon-Yates plant. To show
                you how independent Mr. Campbell was, we showed him the report in

                Page 20
Interview With John P. Abbadessa
March 27,199O

which we recommended that Dixon-Yates not use Ebasco. This report
turned out to be a real shocker. However, Mr. Campbell had read and
approved the report. He read all of my reports. He couldn’t have read all
the reports in the Office, but I guarantee you he read every report on
AEX,every report on TVA, and every report on the Post Office. Further,
he read them carefully and they would come back with little notes on
them, sometimes. Generally, however, he never tried to tell us what to
audit, and he never really seemed to care too much about what you
reported, but he was very concerned that you were right, To that end,
he would ask question after question.

In the face of GAO and other objections, the Dixon-Yates contract was
amended to limit Ebasco’s participation to design engineering. Then,
after we reported that they shouldn’t use Ebasco, this came out in one of
these newspaper articles:

“It is incredible that Comptroller General Campbell would have released this report
and would have made such recommendations unless he is seriously disturbed by the
decision of the Dixon-Yates group to have Ebasco design the project.

“But here we have the Eisenhower-appointed Comptroller of the United States
viewing with alarm, and prepared to document his fears, the relations of this
gigantic company with AEC through the Mississippi Valley Generating Company.
Even proponents of the Dixon-Yates contract must be astounded and dismayed by
such a development.”

That is a quote from the Denver Post [Apr. 10, 19551.

The point being made is that Mr. Campbell had approved the Dixon-
Yates contract. GAO was now making recommendations for improve-
ments and changes. They were accepted. One of the first audit reports
this man issued was to recommend that you don’t use Ebasco for Dixon-
Yates and that, to my way of thinking, took a lot of courage. Mr. Camp-
bell, however, did not lack courage.

Let me just run through this list. I can expand on any area you want. WA
expansion: we issued an audit report pointing out they were using their
revenues to build power plants. It wasn’t clear they had such authority.
We recommended that TVA seek an amendment to the law.

John Taber, a Republican from New York and Chairman of the House
Appropriations Committee, thought it was a wonderful report and said

Page 21
Interview With John I’. Abbadessa
March 27,199O

some very nice things about GAO in the Congressional Record. Mr. [Clar-
ence] Cannon, who headed the Democrats in the House and who was
very pro-public-power, took great umbrage to this same report and laid
it pretty much on Mr. Campbell; he thought the report was lousy. This
invariably happened when you issued reports in the public-versus-
private power area.

EEI and OVECpower contracts: this was another controversial     report. We
issued a report saying essentially that the power rates were reasonable
under these two contracts, but the contracts didn’t have protection for
the government in the future. The rates didn’t have ceilings, and they
were based on formulas that would allow these companies to walk away
with some pretty large profits. So what happens? The Wall Street
Journal, a good Republican paper, in its headlines, said, “Official terms
AEXelectric payments reasonable at plant.” The subheading: “But he
reports government is not fully protected against possible future hikes.”
The headline in the St. Louis Post-Dispatch, [a] good Democratic paper,
said, “Comptroller says AEC paid Union Electric excessive rates.”

These reports bring up something very interesting. I fought many a
battle in this agency, and I always seemed to be fighting them with the
wrong people-fighting     them with Samuelson, Mose Morse (particularly
with Mose Morse), and with legal-the Office of the General Counsel
(OGC).Anybody who stood in the way of my issuing a report the way I
wanted to had a battle on their hands.

One of my biggest and continuing battles was fought when comprehen-
sive audits first started, and the operative term around the Office was
“deficiency reporting.” The emphasis was on reporting deficiencies,
deficiencies, deficiencies. We looked at something that was go-percent
good but lo-percent bad-well, the Office view was you expected it to
be good, so we reported only on the lo-percent bad. As a result, we were
making enemies all over the government. Besides, I didn’t think it was
good reporting, based just on my own standards. So I worked very hard
for balanced reporting. That approach is what led to these more bal-
anced reports.

I would try to cover the full picture because I thought the Office wasn’t
doing the job it was supposed to do; it found one thing wrong, put 20
people on it, and gave it half a year’s thought when the poor guy making
the decision probably had a half hour to make it and one-tenth of the
information. To find one thing wrong and report it as wrong, without

Page 22
                Interview With John P. Abbadessa
                March 27,199O

                evaluating the rest of the program to set it in some context was, to me,
                not responsible reporting.

                So we at AEXworked very hard, and I would go out of my way to find
                something good to say. The other thing I did was to report only things
                that were factually correct-and this was essentially the philosophy of
                the Office. A report had to be factual, if nothing else; it could even be
                late, but it had to be right.

                Another part of my reporting philosophy was that I could have 10 find-
                ings, all valid, but in decreasing order of importance. I’d much rather
                report three blockbusters and forget the other seven because if I got into
                a congressional hearing, all I was going to hear about were the weaker
                findings, So I believe in hitting really hard, but I also believed very
                strongly in my reporting to evaluate the whole program and try to pro-
                duce a balanced report. That approach sometimes caused me real
                problems with Morse and Samuelson.

Mr. Eschwege    You mentioned Morse and Samuelson, but how did Mr. Campbell feel
                about this? Was he supporting Samuelson and Morse who wanted to zero
                in on the deficiencies?

Mr. Abbadessa   Well, Campbell was in a unique situation for many reasons. I do not
                know whose side he was on. It was never tested, to my knowledge. How-
                ever, if it had been tested, I’m sure I would have won. Anyway, no one
                was successful in changing my reporting approach.

Mr. Eschwege    Well, the reason I ask you that is because I was a young auditor in GAO
                back in the late fifties, and people like Leo Herbert always taught us
                that you don’t have the time to look at the whole program, so zero in on
                the deficiencies.

Mr. Abbadessa   Right; I was also told that.

Mr. Eschwege    Rightly or wrongly, I assumed that came right from Campbell.

Mr. Abbadessa   No, I don’t think so. First of all, I don’t think Mr. Campbell got involved
                in those kinds of determinations. My impression of Mr. Campbell was
                that he let the division directors do their thing. I think he was satisfied
                that he had essentially competent people. I think he realized this wasn’t
                public accounting. I think he got really enthusiastic about, quote, the
                “comprehensive-program-results-type         audits.”

                Page 23
                Interview With John P. Abbadessa
                March 27,1999

                To the best of my knowledge, he was probably closer to the AEC and TVA
                audits than any others. He never once suggested anything of that
                nature. He made some broad suggestions, but my observation was he
                didn’t tell any of the division directors what to do, but he was intensely
                interested in what went out in reports. If a report was critical, he
                wanted to be damn sure it was right. Further, if it was critical, he
                wanted it followed up with the congressional committee.

                But I felt very strongly about balanced reporting. I don’t think even fair-
                ness was my driving force. To me, it was a question of doing the job
                right. It seemed to me it was a cop-out to say what Mr. Herbert told you:
                “We don’t have time to do the whole program. Let’s just find out what’s
                wrong and report it.”

                To me, there is something wrong with that. I’m sure we didn’t learn
                everything about the programs we reported on, but I think we sure
                knew a lot more than most people did about other GAO reports that went
                out. I also think this reporting of deficiencies, although it happened
                after I left, finally led to flamboyant headlines and side captions in
                reports and the naming of people responsible for programs-and prob-
                ably was a major factor in leading to the Holifield hearings.

Mr. Eschwege    That type of reporting, too, was sanctioned by Mr. Campbell.

Mr. Abbadessa   That might well be. Like I said, that kind of thing happened about when
                I left; it was just starting. I know Mr. Campbell was interested in, “Who
                is responsible ?” He asked me that question many times. Just before I
                left, I was then Deputy, not doing audits, I was reviewing most of the
                Division’s reports; if Sam got angry with somebody, I reviewed that
                person’s report. That was the biggest threat he had. In my review of
                reports, I noted that they were starting to mention names. I was abso-
                lutely opposed to it.

                To go on with my list-we issued some reports at TVA on the Westing-
                house contract concerning whether there was a violation of the anti-
                kickback act. We also issued the Yankee [Atomic Electric Company]
                report at AEC, which discussed the first contract in a large program for
                cooperative arrangements with industry for generating nuclear power.
                Again, it was the private-versus-public-power issue. The private sector
                worried about an atomic TVA, and the public sector, I think, was pushing
                for an atomic TVA.

                Page 24
Interview With John P. Abbadessa
March 27,199fJ

Anyway, we issued a report with six recommendations to strengthen the
position of the government. It is an interesting report. There was an
article in the Chattanooga Times [Feb. 25, 19571 a long article. It said,

“The GAO report was rendered more significant by the fact that it could not be con-
sidered an unfriendly effort to find something wrong with the administration of the
program. The Comptroller General, Joseph Campbell, came into the government as a
protegee of AEC Chairman Lewis Strauss, the leader of the effort to leave atomic
power development to free enterprise. There is no reason to believe that Campbell
does not share the position of his ex-boss.”

That article is initialed “JC” with a question mark. I don’t think he
agreed with the Strauss reference.

The part in this article that is interesting is the quote:

“The criticisms of GAO were in fact so unanswerable that Strauss and the Commis-
sion immediately informed Campbell of their intention to adopt all of the recommen-
dations in the subsequent contracts that were signed with utility groups.”

This report illustrates the value of first finding out what legislation is
going to be considered and getting your views up there while they are
still helpful to the Congress. The General Manager of AEC,in commenting
on the Yankee report, was also fairly complimentary to GAO. I’m not
going to read all the nice things he said, but it can be summarized with:

“Senator Gore: Do you feel, and does the Commission feel, that the objections of the
General Accounting Office are going to be satisfied to the extent that this contract
can proceed without serious impairment?”

“Mr. Fields: I believe they can, yes, sir.”

The Chairman of the Committee congratulated GAO on its alertness on
these contracts.

“Mr. Fields [General Manager of AEC]: Mr. Chairman, the more arguments I have
with GAO before writing a contract, the better it is. As far as I know, the relations
with them have been excellent.”

 These kinds of comments helped build up some acceptance of GAO
 reports. The thing that is important here is that, with respect to timely
 reports, we were fairly successful at AEC,but this wasn’t true of all our
jobs. Later, when I became Deputy, I couldn’t understand why GAO

Page 26
Interview With John P. Abbadessa
March 27,199O

wasn’t looking at the agency budgets before they went to the Congress
to find out what was going to happen in the next couple of years and
audit against those activities. We did that at AEC. The other thing I ques-
tioned was why we didn’t review the negotiation of contracts and get
comments up to the Hill before the contracts were awarded, rather than
3 years later after a big overrun when it was too late to do very much.

I was told that most agencies wouldn’t let GAO look at budgets before
they were issued nor contracts before they were negotiated. This was
not an unreasonable position. However, we were fortunate at AEC
because we would just go to the Joint Committee and tell them, “Hey,
AEC has this contract, and we think they have some problems.” We then
received a letter asking us to look at it. NOW,the agency showed it to us.

I also audited CDA, Combined Development Agency, which was a com-
bine that came out of a Roosevelt-Churchill meeting in Canada for the
U.S. and the British governments to try to corner the entire world
supply of uranium during the war. It was a top-secret activity. The
United States paid two-thirds and England paid one-third. The Comp-
troller General was named the auditor. When Mr. Campbell came, he
named me his representative. We made an audit and issued a report that
resulted in a $175 million reduction in commitments to purchase ura-
nium ore from South Africa. This was in June of 1957. The United
States didn’t need to corner the world supply of uranium, and they
couldn’t do it anyway because Russia had a large supply of uranium
within its own boundaries.

In March of 1958, AEC proposed some legislation-we        always reviewed
any proposed legislation. If we saw a problem, we informally reported it
to the Joint Committee on Atomic Energy. AEC wanted to amend
Section 55 of its act to liberalize the exchange of information and mate-
rial with other countries.

We received a congressional request and issued a report. AEC wanted a
$200 million fund to buy plutonium. We said, “Hey, look. This is outside
of congressional control. AEC can go out on their own if you pass this leg-
islation.” AEC then agreed to reduce the $200 million fund to $50 million
and agreed to reduce the 15-year contracts to 7-year contracts. We said,
“There still isn’t adequate government control.” So AEC withdrew the
legislation completely.

This got GAO some real brownie points with Senator [John 0.1 Pastore,
who was then the Chairman of the Atomic Energy Committee and one of

Page 26
                Interview With John P. Abbadessa
                March 27,199O

                the real statesmen in the Congress. He wrote Mr. Campbell a letter and

                “On behalf of the Committee, I wish to thank you for the prompt attention you
                afforded my request and the thoroughness of your analysis. The ability of the Gen-
                eral Accounting Office to review and report on a matter as complicated and as spe-
                cialized as this one under consideration, particularly in the limited period of time
                that was available, speaks very well for the competency of you and your staff. You
                may be interested to know your letter has been placed in the record of the hearings
                and that the Atomic Energy Commission by letter dated March 7th, has now with-
                drawn its proposed amendment to Section 55.”

Mr. Eschwege    Can I ask you a general question?

Mr. Abbadessa   Sure.

Mr. Eschwege    In those years, we’re talking now the mid-fifties, I guess-

Mr. Abbadessa   1952 through 1958.

Mr. Eschwege    It seems to me it was unusual for a staff like GAO’S AEC staff to have
                such a close relationship with congressional committees. Did that
                happen anywhere else? I know this close relationship continued for
                many years.

Mr. Abbadessa   Senator Pastore said he was amazed that we could do this so quickly. In
                truth, we had the work done before we went up and told the Committee
                that the proposed legislation was flawed.

Mr. Eschwege    But you worked for the Committee. You worked with the Committee all
                the time. You knew what it wanted.

Mr. Abbadessa   Yes, and we worked at such communications very hard.

Mr. Eschwege    We didn’t do that for a long time.

Mr. Abbadessa   That is probably true for the rest of the Office.

Mr. Eschwege    At least in my area, it was not done in the 1950s.

Mr. Abbadessa   I think it was probably unusual. There were several factors involved.
                When I was an Assistant Director and running these jobs, initially as a
                grade 14, there was an enormous statistical race between Civil and
                Defense, as to who could get out the most reports. Sammy would push

                Page 27
tnterview With John P. Abbadessa
March 27,199O

each assistant director. I always had the least number of reports sched-
uled and the most time to do the audits, We would go into these meetings
and everybody would promise away their shirts, where they didn’t have
a prayer of meeting their projections. I would catch hell. “Is that all YOU
are going to do?” I’d say, “Damned right, that’s all I’m going to do. I
hope I can do this much.” However, although I had fewer reports, I
didn’t worry about statistics, I mean Sammy and Newman could play
that game forever. I stuck with doing what I thought the staff could do,
While we promised the least, we usually delivered what we promised;
most assistant directors did not do that. Also, we took great pride in
issuing high-quality reports.

Balanced reporting was another factor. Another area I pushed was rota-
tion of staff. When I first came to the Corporation Audits Division, rota-
tion of staff was normal, and I was on several of these small jobs. Later,
I realized this approach was really valuable because I got different expe-
rience on different jobs. When the Civil and Defense Divisions came
along, we started to get into program reviews, and there was more of a
desire to keep the same staff. The staff wanted it that way, for one

Samuelson was for rotation; however, a lot of pressure was building up
to get out reports. The staffs themselves, particularly the higher level
staffs, wanted to keep their good people. So Sammy was under a fair
amount of pressure. I think one of the things he appreciated when I
became his Deputy was that I restrengthened rotation. I really worked
on it. It applied mostly to the junior staff, because we had to worry
about some continuity on the job. As for the field offices, my limited
observation is that they tried to maintain continuity on all jobs,

Another area where there was a fair amount of disagreement was the
performance of systems work. I think Mr. Campbell closed up this area;
maybe you’re going to come to this later. However, regarding systems
work, nobody wanted to do it and, least of all, I think, Mr. Samuelson,
However, I was always looking for a place where we could take a step
forward, and I always tried to build GAO. So I got real hot on systems
work. I went to AEC and reviewed theirs. They had a pretty good system
to start with, which helped. During the review, we got down to three
issues on which the Controller of AEC: and I couldn’t agree,

Later, when I became the Controller of AEC, Art Litke was running the
AEXaudit for GAO. He came over right away and said, “Well, all right.
Now, you can do these three things.” I said, “Wait a minute. I can do two

Page 28
                Interview With John P. Abbadessa
                March 27,199O

                of them.” I forgot what they were, but I did them immediately. The third
                one, however, was to record depreciation in the budget. I couldn’t sell
                that within AEC or to anybody having any knowledge of budgeting. If
                you budgeted depreciation and got a cut, what would you do with the

                So I worked out a deal with Litke under which I would reconcile my
                balance sheet, which had depreciation, with my budget figures [without
                depreciation], and I’d put the reconciliation on page 742, where nobody
                on the Appropriations Committee would find it. This resulted in AEC'S
                becoming the first agency to get their entire accounting system
                approved by the Comptroller General. This approval, however, was the
                child of the systems work that we did when I was at GAO.

Work on TVA
Mr. Eschwege    John, while you were still assigned to the AEC audit, am I right, you also
                got responsibility for the TVA audit?

Mr. Abbadessa   Yes, I became responsible for both jobs, then at grade 14.

Mr. Eschwege    Yes. Then, of course, there was a good rationale for that in that they
                both had power activities.

Mr. Abbadessa   One generated electric power and the other one used it.

Mr. Eschwege    Right.

Mr. Abbadessa   AEC was TVA'S biggest customer in those days. It used about 76 percent of
                TVA'S power.

Mr. Eschwege    One thing I always heard about was the coal contracts at TVA and the
                audit that GAO made at that point; I think Gene Birkle helped you with

Mr. Abbadessa   He was on the job, and he was an excellent auditor.

Mr. Eschwege    Do you recall what the major issue was concerning the coal contracts?

Mr. Abbadessa   Well, regarding coal contracts, the only thing I remember just off the top
                of my head was that we had an inventory verification problem. When I

                Page 29
                Interview With John P. Abbadessa
                March 27,199O

                was in the Marine Corps, they had some kind of a gadget you could look
                through that [visually] raised the Washington Monument, producing a
                3-D Ithree-dimensional effect]. Also, I had read something in the Journal
                of Accountancy or someplace about air photographs, taking two pictures
                and laying them side by side to look down at them.

                We had been certifying to the coal inventory for years and I said, “Well,
                look, how do we know all that coal is there?” I went to Mose Morse, who
                was then the Director, and asked him if I could have authority to hire an
                airplane to take these types of pictures. Such requests were unheard of
                in those days. Mose, in typical fashion, asked a single question in two
                parts. How much would it cost? The answer was a few hundred dollars.
                What was the value of the coal inventory we were certifying to? The
                answer was umpteen million dollars. He said, “Go,” So we took our pic-
                tures and made our calculations. At first, we thought we had found a
                shortage, but TVA finally convinced us that the coal piles had been sitting
                there some 20 years and some of them had sunk below the ground level,
                This made sense, particularly since our shortage figures were relatively

                I was really impressed with TVA'S coal procurements. They used adver-
                tised competitive bid procedures. I remember attending an opening of
                the bids. It was the first time I had observed the awarding of contracts
                under sealed-bids procedures. They were all opened with the bidders
                present, and contracts were awarded on the spot to the lowest bidders. I
                think TVA was a very well run operation in those days.

Mr. Eschwege    Now, I understand that Mr. Campbell didn’t make too many visits to the
                audit sites, but in this case, apparently, he came down 1 day to TVA to
                visit you guys.

Mr. Abbadessa   Yes, it was more than 1 day. I do not know why Mr. Campbell selected
                TVA for a visit. Nobody ever knows what another person really thinks. I
                think Mr. Campbell had a very honest concern and conviction that there
                were problems at TVA. One of the few things he ever suggested that I do
                was to locate the original plans and objectives of TVA when it was estab-
                lished in 1933 and determine if they had fulfilled their long-range plan
                and objectives some 20 years later.

                He came down to TVA. They greeted him royally and he was very gra-
                cious. However, he was always concerned with the tremendous growth
                in the amount of electric power generated by steam. TVA was essentially
                established for hydropower generation, flood control, navigation, and

                Page 30
                Interview   With John   P. Abbadessa
                March 27.1990

                fertilizer production. They justified all of their steam-generated power
                because a steam plant was mentioned one place in the TVA act. This was
                a steam plant down at Mussel Shoals built to supply power for the fertil-
                izer plant. With that one reference, their lawyers said, “Build this

                I think Campbell legitimately wanted to learn, probably in a sense of
                fairness, more about TVA. Anyway, he came down. He was very inter-
                ested. We went through the power plants and TVA'S whole operation. He
                met with the [TVA] Board {of Directors]. The thing I remember best is I
                was a GS-14 on a per diem of about $6 a day or some ridiculous figure.
                On any trip I ever made for the government, I lost money. Anyway, TVA
                put us up in a fancy hotel. We had two huge rooms on the top floor and,
                when we went down to check out, the clerk said, “TVA has already paid
                for the rooms. This is gratis.” (Or something like that.) Well, Campbell
                wouldn’t buy that for 30 seconds, and he didn’t want any GAO staff
                member accepting anything from the client. So he reached into his
                pocket and paid his bill. Of course, I reached into my pocket, paid my
                bill, and blew my per diem for the whole 3-week trip. However, he had
                an unusual interest in TVA, and I think he had a concern. In my view, his
                trip was to learn more about TVA.

Mr. Eschwege    There was also-1 don’t know whether you were still there-legislation
                enacted authorizing TVA to engage an outside CPA firm to conduct the
                 financial statements audit. At that point, we sort of stepped back and
                just monitored the activities of these CPAS, who were auditing the finan-
                cial statements from then on.

Mr. Abbadessa   I don’t know what the source of your information is, Henry. My recollec-
                tion is that TVA used Lybrand’s in those days. That firm audited TVA'S
                financial statements before the Corporation Control Act was enacted.

Mr. Eschwege    They did already before 1945?

Mr. Abbadessa   Yes, they had been using public accountants. However, upon enactment
                of the Corporation Control Act, cost conscious as they were, TVA dropped
                its public auditing firms and went with GAO. TVA fought us all the way
                until Dixon-Yates. Then, suddenly, we became the hero down there for
                about a year until we testified against TVA on its self-financing legisla-
                tion. After that, we were in the doghouse again. In any respect, when
                TVA got its self-financing authority, it went back to CPA firms. To my
                knowledge, we never fought TVA on that decision. I’m certain we did not
                criticize them.

                Page 31
                Interview With John P. Abbadessa
                March 27,199O

Mr. Eschwege    No, I don’t think we fought it, but it was an interesting situation. Actu-
                ally, it relieved us from doing some of the work on the financial audit,
                and it also indicated that TVA felt it couldn’t go with a GAO-certified
                statement to the bank and say, “Here, underwrite these bonds for US."

Mr. Abbadessa   This was clear. TVA had to have independent Big Eight-type audits.

Mr. Eschwege    Finally, before we leave TVA, there was also a position GAO took, I think
                first on TVA, but then on most corporations, that a corporation should
                bear all the costs of the activities even if some of them are authorized
                under other appropriations. Do you recall that?

Mr. Abbadessa   Oh, very clearly.

Mr. Eschwege    They got Treasury money and so on. The interest on Treasury money,
                for instance, was really a cost to TVA.

Mr. Abbadessa   I testified on the TVA self-financing plan. This was legislation to make
                their power activity independent from appropriations. Basically, we had
                several problems with the proposed legislation. One was that we
                thought they should pay interest on their debt to the government. A
                second one was that, they should amortize the government’s debt. over a
                40-year period. Their law gave preference to the “co-ops” and “munies.”
                We were basically interested in getting somewhat equal treatment for
                the federal government.

                We won some of our points, not all of them. We won the interest issue
                hands down and, later, the repayment provision. The Public Works
                Committee to some extent made changes that met some of the objections
                of GAO. Senator Howard Baker, who was from Tennessee, supported
                us-he wanted the legislation, but he was also a compromiser and I
                think a very good statesman. He said, “I’ve listened to all the testimony
                of the General Accounting Office and Treasury, and I agree with two of
                the amendments suggested.” They were both ours. The amendments to
                which Senator Baker referred called for the Secretary of the Treasury to
                approve the timing of the bond sales, market condition, interest rates
                and the like, and the provision for payment of interest to the govern-
                ment. In addition, later, when the Committee amended the legislation, it
                also put in our repayment schedule.

                Here, again, I think GAO was successful in protecting the interest of the
                taxpayers. Herbert Vogel, who was the Chairman of the [TVA] Board,
                wrote the Comptroller General thanking him. We had transmitted to him

                Page 32
                  Interview With John P. Abbadessa
                  March 27,199O

                  a report in which we had some significant disagreements with TVA. He

                  “We appreciate not only your own continuing, personal interest in TVA, but also the
                  friendly and cooperative assistance of your staff. In my 35 years of government
                  service, I have never known a finer attitude of public service and understanding
                  than that which was demonstrated by your representatives and their relationship
                  with our organization. It has made us anxious to respond in kind, and the frank
                  discussions which have resulted have been most helpful.”

                   So I think that during this period, not just on this job, but on several
                  jobs, a concerted effort was made for high-quality audits, and recogni-
                   tion came to the Office from both our clients and the Congress that GAO
                   was doing what we should be doing. I’ve several other examples.

The Dixon-Yates
Mr. Grosshans     Several times now you have alluded to Dixon-Yates, Maybe we ought to
                  just clarify for the record what the issue was. This was a 1952 campaign
                  promise that Eisenhower made to try to commercialize more of the
                   activities that previously had been conducted by government. I guess
                  one of the first ones was contracting for power for Memphis, Tennessee.
                  The issue here was whether TVA would provide that or whether it would
                  be provided through other means. The administration favored the use of
                  commercial facilities. GAO got drawn into this whole issue from the
                  standpoint of conflict of interest, the legality of contracts, and so on.
                  Can you just elaborate a little more on what our interest in this was?

Mr. Abbadessa     Concerning Dixon-Yates, I could talk for about a week; as a matter of
                  fact, there have been two books that I’m aware of that have been
                  written on the subject. One of the books footnoted that on the evening I
                  testified in the Congress, my oldest daughter was born prematurely and
                  was immediately known throughout the Office as “Dixie Yatesy.”

                  I think you ought to look at three distinct phases and let me try to cover
                  them fairly briefly. This all started with Congressman Holifield writing
                  a letter to the Comptroller General saying, “Does AEC have the authority
                  to enter into the Dixon-Yates contract‘?”

                  Page 33
Interview With John P. Abbadessa
March 27,199O

AEC was buying power directly from two commercial utilities, EEI and
OVEC,and from TVA directly. This [Dixon-Yates] was different. This was a
plant in Memphis, Tennessee, selling power to TVA. That contract really
wasn’t AEC'S, but then TVA would furnish that power to AEC. Clearly, it
was a public-versus-private-power issue. People that were pro-public-
power were absolutely against the arrangement. They thought it was an
effort, at the least, to cripple TVA and, at the worst, to terminate it.

Now, actually, Eisenhower was the President, and for one Z-year period
we had a Republican House and a Republican Senate. So the Republicans
were the Chairmen of the Committees.

Okay. The letter came from Chet Holifield, a member of the Joint Com-
mittee on Atomic Energy, saying, “Does AEChave the authority to sign
the Dixon-Yates contract?” Bingo. The letter circulated through the
Office and landed on my desk; I was then a grade 13.

I looked up the law, which said, "AEC could buy power within transmis-
sion distance.” The distance from Paducah [Kentucky], where AEC was
going to use the power, to Memphis [Tennessee] was way beyond
existing transmission distances. So we said, “No, they don’t have the
authority. However, the President has the authority under the War
Powers Act to make the procurement if he wanted to.” I wrote the
answer and then forgot about it.

Three or 4 weeks later, I was taking my two children and my wife to a
picnic and, on that Saturday morning, there were big headlines: “GAO
questions Ike.” So I looked to see who in GAO had been involved in this
matter and it was me. The paper said that we had said they couldn’t
enter into the contract. Comptroller General Warren had just left. I had
never met Frank Weitzel, who was now the Acting Comptroller General,
but I met him that Monday morning. Fred Smith [Audits Division Assis-
tant Director] and I were called to his office. Fortunately, while we were
there and I was explaining to Weitzel that that wasn’t all we said but
that we had also pointed out the War Powers authority, Chet Holifield
phoned him and apologized because he had put out the press release but
didn’t make the distinction that Eisenhower had the authority. The
result was that Holifield got his headline, and I got off the hook with Mr.
Weitzel. End of subject. That was phase 1.

Phase 2: in a few months, Holifield wrote us again. He said, “Okay, it is
now legal because Eisenhower exercised the War Powers Act. Is this a
good economic deal for the government?”

Page 34
Interview With John P. Abbadessa
March 27,199O

I was assigned the task to review it. I did a lot of work on it. I ended up
saying it was not a good economic deal for a lot of reasons. The major
one was that it was a target-type contract under which the amounts of
profit they could make and costs they could recover depended on the
fuel efficiency, in Btus [British thermal units], the plant could achieve.
[The] Federal Power [Commission] was in this building; I walked down
and researched fuel efficiency. Every plant in the prior 10 years had
been built with a much higher fuel efficiency than was in the target. So
we nailed them with that, pointing out the excessive profit involved.
There were lots of other things wrong with it. The big problem was that
they got greedy-they     weren’t satisfied with just cutting in on the TVA

When I was drafting our report, I had a visit from a representative of
our Congressional Liaison Office. I’m not going to mention his name. He
put his feet on my desk and said:

“Now, look. I have been hearing rumors that you have problems with this contract. I
want to let you know this is greased all the way. We don’t want to make any waves.
The SEC, the Federal Power Commission, BOB [Bureau of the Budget], the President,
and everybody in town has signed off on it. Take that into consideration when you
are writing your report.”

I said:

“You’re out of your mind. I’ll write the report the way I see it based on the findings.
I’ll send it up for legal review and Congressional Relations review, and you all can
decide what you want to do. Just remember, everybody who has signed off on this is
in the executive branch of the government.”

So I wrote the report. This ended up with Frank Weitzel, Bob Keller,
[Lyle] Fisher, and I working on it for about 2 weeks. We were scheduled
for testimony. It was a Republican Chairman, so he put us on at night
hoping nobody would show up. The place was packed, primarily with
newspaper reporters.

This was the first time I had testified in the Congress. Weitzel did most
of the testifying. Weitzel was brilliant, absolutely brilliant. We had gone
over the findings and the report again and again. Lyle Fisher said, “I’ll
never know that contract as well as you do, but I am beginning to under-
stand it.”

The night before we testified, I prepared the statement for Weitzel. He
re-did it. I made it pretty tough. He made it even tougher. He smoothed

Page 35
                Interview With John P. Abbadessa
                March 27,1!BO

                out the language a little bit, but it was an uncompromising position
                against the contract.

                Warren had left. Weitzel was a definite candidate for the job of Comp-
                troller General. About 2:00 a.m. one morning about 2 days before we
                testified, Bob Keller said, “Frank, if you issue this report, you’re not
                going to be the Comptroller General.” Frank Weitzel said, “That might
                be true, but this is not a good contract. I’m issuing the report,” I had
                nothing but enormous admiration for Frank Weitzel.

                Anyway, we testified and the testimony pretty much blew AEC out of the
                water. The result was AEC changed the target and put in a more reason-
                able Btu level. AEC made numerous other changes to meet our objections,
                and the contract went on its way.

                Almost immediately after that, Mr. Campbell was appointed to be the
                Comptroller General. Dixon-Yates was proceeding when Mr, Campbell
                reported to GAO.

                The third phase was the conflict of interest, and Weitzel assigned some
                investigators to the thing. I was satisfied because we had ended up with
                probably the best power contract that the government ever had.

                So I was happy, but Frank Weitzel would not let go. He said, “There is
                something wrong here.” He was concerned about conflict of interest. I
                said, “Frank, I’ve been in this Office now for about 8 or 10 years. We
                have always had conflict-of-interest laws, but nothing ever happens. We
                are wasting our time. Let’s forget it.”

                That’s when he assigned the investigators to me. We went to work and
                we finally identified somebody out of Boston who made the conflict-of-
                interest case for us.

Mr. Eschwege    A fellow by the name of Winslow?

Mr. Abbadessa   Yes. Anyway, it turned out that he worked for the company that was
                financing the contractor, and we tied him in to a key Commission
                meeting because he had to sign the security book to get into AEC.We
                took that to Frank, and it was all over.

Mr. Eschwege    He was an adviser to Strauss, as I understand it.

                   Interview With John P. Abbadessa
                   March 27,1999

Mr. Abbadessa      Yes. He was on both sides of the fence. We concluded that it was an out-
                   and-out conflict of interest.

Mr. Eschwege       But you are saying Campbell was out of this while you were doing this?

Mr. Abbadessa      Oh, yes. Campbell absolutely would not touch Dixon-Yates. He signed
                   the Ebasco report, but he made the distinction that that happened after
                   he left AEC. The conflict-of-interest case was Weitzel all the way. Mr.
                   Campbell recused himself. Anyway, then it went to the Supreme Court
                   and the government won. The contract then was null and void.

Mr. Grosshans      There have been some allegations that the particular relationship that
                   you just outlined there-Weitzel’s involvement in Dixon-Yates-may
                   have had some impact on the Weitzel-Campbell relationship. Would you
                   care to comment on that?

Mr. Abbadessa      Well, like I said earlier, you never really know what is in a person’s
                   mind. I don’t know. There are certain things that I do know. This is
                   likely to sound conceited, but I’m the guy that tore up the Dixon-Yates
                   arrangement. Now, Weitzel testified, but I was sitting right next to him
                   and also testified. I must say I became a fair-haired boy of Campbell to
                   be perfectly honest about it. He never resented my involvement in
                   Dixon-Yates for a minute to my knowledge. In all his dealings with me,
                   he said, “You took a good contract and made it better.” Those were the
                   first words I heard out of his mouth. That, and “Go get these other con-
                   tracts.” When I brought him the Ebasco and EEI and OVECreports, he
                   signed them. I prospered under Mr. Campbell,

                   From my observation but not a lot of knowledge, there was a strained
                   relationship between Campbell and Weitzel. Weitzel had been the
                   number 2 person in that office for all the years I’d been there, and he
                   was a top-notch, superb number 2 person. He was, however, almost put
                   in a corner and there were strained relations. When I saw the two of
                   them together, they were always polite to each other. You never heard a
                   harsh word. Of course, you would never hear a harsh word from Frank
                   Weitzel, anyway. But I think Frank was hurt. I don’t know what the
                   reason was.

                   Page 37
                        Interview With John P. Abbadessa
                        March 27,199O

Dr. Trask               You don’t know why the relationship was strained?

Mr. Abbadessa           Absolutely not. I don’t know. It could be so many things. You know, I
                        think Campbell sponsored some legislation later to name his own
                        Deputy, When I work, I like to pick my own people, especially my
                        Deputy. You had a situation where Campbell didn’t pick him. Could that
                        be it?

                        Weitzel continued the Dixon-Yates investigation even after we had
                        issued the report. He proved it involved a conflict of interest. He was
                        right, but was that it?

                        Was he jealous of Frank’s obvious position of leadership? I think most
                        people on the staff probably would have liked to have seen Weitzel get
                        the job. I don’t know.

                        All I know is a lot of people say the strain was over the Dixon-Yates
                        controversy. I have some major reservations about this because I was
                        certainly as much involved in Dixon-Yates as Frank and I didn’t suffer.
                        Whatever the reason is, I don’t know. I personally think Frank Weitzel is
                        synonymous with the General Accounting Office. I think Mr. Campbell
                        came at a good time and played an important role. Why they had this
                        thing, I don’t know. I wouldn’t presume to guess.

The 1956
Reorganization of GAO
Mr. Eschwege            Okay. I think that is a pretty good synopsis of it. Let me just talk a little
                        bit more about the reorganization, as I call it, that took place under
                        Campbell in 1956. He created these distinct two Washington Divisions
                        and the Field Operations Division. Then, of course, he also had a policy
                        staff. Do you recall the purpose of doing that? Were you involved in it in
                        any way?

Mr. Abbadessa           Well, I wasn’t particularly involved, However, I think there were two
                        basic reasons. One, to my knowledge, GAO had done hardly anything in
                        Defense. We had a big Audit Division, and everything was oriented
                        towards the civilian side, but large amounts of the [government’s]
                        moneys were being spent on the Defense side. I think that might have

                        Page 38
                Interview With John P. Abbadessa
                March 27.1990

                been a reason-to bring more focus to Defense so we could look at more
                money. It made sense to me.

                The other reason was policy. You know, we were going down the road
                and had been stumbling a few years trying to find out what comprehen-
                sive audits were. I think probably Mr. Campbell wanted a policy group.
                He had a perfect candidate for it in Mose Morse who, in my judgment,
                was a real thinker. He loved policy, systems, procedures, and the like.
                He didn’t have the killer instinct of a Long or a Westfall or even a Samu-
                elson, not to mention a couple of young turks like Schoenhaut and
                Abbadessa. So I think that two Divisions were established more to break
                up a very large group; to give more coverage to Defense, which certainly
                happened; and to provide policy guidance, which also happened.
                Nobody asked me, “Shall we do it ?” I wasn’t involved. However, this
                was my observation.

Mr. Eschwege    Was it also a case where you were beginning to have all these audit sites
                and trying to differentiate between the executive branch’s different
                functions‘? At that time, it was really agencies that we were auditing,

Mr. Abbadessa   That’s correct.

Mr. Eschwege    We wanted to house these different audit staffs under a Civil and a
                Defense roof.

Mr. Abbadessa   Yes. Wasn’t it part of the 1956 reorganization when he set up the Field
                Operations Division and pulled in John Thornton to head it?

Mr. Eschwege    That’s right, The Field Operations Division, that was the next question.
                Yes, Campbell established that, too.

Mr. Abbadessa   Okay. Then, I think what you are saying makes sense, Henry. This is
                1956; [at that point] I had been around about 10 years. We had very
                little contact with field offices. Then, when Campbell set up Thornton,
                they started staffing, recruiting, and building up capabilities. I, person-
                ally, didn’t have much involvement with field offices.

Mr. Eschwege    Even after that?

Mr. Abbadessa   No. For one thing, WA was audited by Washington staff. Towards the
                end, the Atlanta office provided some staff. At AEC, we had a resident at
                Oak Ridge and a resident at Hanford. We had some field involvement out

                Page 39
                Interview With John P. Abbadessa
                March 27,199O

                of San Francisco because of AEC'S activities at Berkeley, Stanford, and
                the Livermore Lab. Mostly, the field offices supplied bodies. They
                weren’t involved with planning or report preparation. Those were Wash-
                ington-controlled audits.

Mr. Eschwege    Which meant sometimes you had to send a staff out there for a fairly
                long period of time.

Mr. Abbadessa   Not the staff. All the power contracts I did personally. I think the nature
                of the job and Mr. Campbell’s interest resulted in our dealing with very,
                very political-type or sensitive things. Things like public-versus-private
                power and trying to build an atomic energy industry with cooperative
                programs. The first time I testified in the Congress was on Dixon-Yates.
                After that, I can’t count the number of times I testified. I remember the
                first time I was a little concerned, and Frank Weitzel, the night before
                we testified, gave me some really good advice. He said, “On testimony,
                first of all, make sure you have your facts right.” Then he said, “We
                aren’t influenced by politics, but be aware of politics.”

Mr. Eschwege    Right, be sensitive to it.

Mr. Abbadessa   Yes. He also gave me some guidelines. “When you’re testifying,” he said,
                “if both sides of the aisle are praising you, that’s the best situation you
                can be in. If both sides of the aisle are giving you hell, relax. You’re
                probably okay. But, if one side of the aisle is giving you good praise and
                the other one is jumping all over you, look out. Be sure you are right.”
                That turned out to be pretty good advice. Of course, Frank was certainly
                the best person I ever saw give testimony.

Mr. Eschwege    There’s one other thing that I was told. If you don’t know something,
                don’t try to answer in a positive or affirmative way.

Mr. Abbadessa   I follow two rules when I testify. One, if you don’t know, say you don’t
                know. Two, be responsive to the question, but volunteer nothing. Be
                responsive. Volunteer nothing.

Mr. Eschwege    That I don’t know about. If you have some good information, you might
                want to volunteer it. But that was an Army concept: “Don’t volunteer.”

Mr. Abbadessa   Well, it was gospel at AEC, my friend. When people broke that rule, we
                usually ended up in trouble.

                Page 40
                 Interview With John P. Abbadessa
                 March 27,199O

Mr. Eschwege     So in your case, it did not decrease the travel, though, that was involved
                 in trying to do the fieldwork, whereas I think maybe one of the reasons
                 for creating the Field Operations Division was to get more of the field
                 involved in doing that work so that we wouldn’t have to live out of a
                 suitcase like Sammy’s group used to.

Mr. Abbadessa    I have probably understated the field’s role. It wasn’t involved in TVA. At
                 AEC,in those early days after Thornton was set up, we did use people at
                 Albuquerque, San Francisco, Chicago, Hanford, and Oak Ridge. How-
                 ever, we dealt more with them as an extended staff rather than through
                 the field office manager.

                 I know we used to have these meetings with Sammy and Thornton
                 because some assistant directors were fighting with the field managers
                 over whom they assigned to the audit. One thing we at AEC had going for
                 us was that we always had good people assigned in the field, because
                 they had to be cleared for security access and that cost money. I think
                 probably because of the nature of the job, the field staff was almost an
                 extension of my staff. However, I might be understating the case. They
                 certainly did work for us on these jobs.

Recruiting and
Mr. Eschwege     Lastly, I think you mentioned earlier, under Campbell, there was cer-
                 tainly a renewed or increased effort on recruiting and training people.
                 Now, it had started under Warren, I guess to some degree, as you

Mr. Abbadessa    Yes.

Mr. Eschwege     But Leo Herbert came in and established a whole new group for devel-
                 oping the staff and recruiting.

Mr. Abbadessa    Well, I’ll tell you. When I was the Deputy Director in CAAD under Samu-
                 elson, we did our own recruiting. Leo Herbert did not recruit for us
                 although he processed the paper. If he brought us somebody, we prob-
                 ably wouldn’t have used them anyway. Samuelson wanted to do his own
                 recruiting. This was essentially my job and I recruited extensively. I
                 went to Maryland, Duke, Kings College, Scranton, Providence, Wharton,

                 Page 41
                        Interview With John P. Abbadessa
                        March 27,199O

                        and other colleges, I recruited a lot of our best people. Come to think of
                        it, I also recruited when I was an Associate Director. I did it for about 3
                        years. Then I went into Samuelson and said, “I’m through.” He said,
                        “What do you mean you’re through ?” I said, “Look, every year I go out
                        there, those kids get younger.” I got a little bit tired of it, but Samuelson
                        felt very strongly on recruiting our own staff. Samuelson had his own
                        philosophy for running his Division, and it was close to the vest. He had
                        considerable respect for Morse, and we worked well with Policy. He rec-
                        ognized the need for legal review and we worked with Legal. However,
                        he wasn’t too big on any other division as far as I know.

The Post Office Audit
Dr. Trask               Before we talk about your work as Deputy Director of the Civil Division,
                        there is one more audit that I want to ask you about. You talked briefly
                        about your work with the CPA coaching course and the Transportation
                        Division, but another assignment that was important during these years
                        was the audit of the Post Office Department. I wonder if you could com-
                        ment on the kind of things that you were looking at.

Mr. Abbadessa           I didn’t bring any files today concerning the Post Office audits. About
                        three things come to mind quickly. One is GAO had terrible relations with
                        the Post Office when I took over that job. [Arthur] Summerfield was the
                        Postmaster General. The first report I issued was very interesting. We
                        made an audit and recommended in a report that the Post Office close
                        about 30 of these fourth-class post offices. Summerfield wrote back and
                        agreed with our report 100 percent. It was the first kind letter that GAO
                        ever got from Summerfield. Of course, he was leading us right down a
                        primrose path. One of those offices was in Lynn, Massachusetts, which
                        was in the district of [John] McCormack, who was then the Speaker of
                        the House. It was the best case I had because it was in a department
                        store, which was next-door to a full-size Post Office.

                        That report had been out about a week when Mr. Campbell called me
                        and said, “Mr. McCormack wants to talk to us.” We went to see Mr.
                        McCormack, who was very gracious and said lots of nice things about
                        GAO. Then he said something like, “Oh, Joe,” as he picked up our blue-
                        backed report, “What idiot wrote this report?”

                        I kind of saluted and said, “Here I is.” We then went through the report,
                        and he changed his tone and became very nice. He explained to us that

                        Page 42
                Interview With John P. Abbadessa
                March 27,199O

                he had all kinds of reasons why that Post Office shouldn’t be closed
                down; however, he never said, “Don’t close it down.” Finally, he said to
                Mr. Campbell, “Look, this is the Christmas season.” It was around
                November. “Can we leave it open until March‘?”

                So Mr. Campbell looked at me because he always let the staff man
                answer. “What do you think. 3” I said, “Yes, sir, of course.” When we left,
                I figured, “Hey, we won this one.” When we were riding back, Mr. Camp-
                bell said, “John, you’re going to follow up on this in February or March,
                aren’t you?” I said, “Yes, sir!” He said one word, “Don’t.”

Mr. Eschwege    Don’t?

Mr. Abbadessa   Don’t. Mr. Campbell had a reputation for independence and, in fact, he
                was very independent. He was very tough on independence with the cli-
                ents. He wasn’t, however, immune to the Congress.

Mr. Eschwege    In terms of the whole scheme of things, it was not a big thing‘? Just one
                little Post Office?

Mr. Abbadessa   Yes.

Mr. Eschwege    Do you know if it is still open?

Mr. Abbadessa   I have no idea.

Mr. Eschwege    Unless the store has closed. We made reviews of this after you left, too.

Mr. Abbadessa   Well, maybe you did. However, if it was closed, I bet it wasn’t until
                McCormack left office and wasn’t the Speaker of the House anymore.

                I can mention a couple of others. We issued one report that I thought
                was really good. We reviewed and identified three basic problems with
                the Post Office. They had large subsidies to the airlines, a non-
                cooperative union that resulted in inefficiencies, and rates for third- and
                fourth-class mail that were incurring an enormous loss The latter was
                offset to some extent by the first-class rate, but not nearly enough.

                We made a study of the Post Office operation over a 20-year period and
                prepared a chart. The study showed that the cumulative loss by the Post
                Office over this period of time, 15 or 20 years, just about equaled, in
                fact, was a little more than the increase in the national debt during the
                same period. There were obvious implications. If the Post Office had

                Page 43
                Interview With John P. Abbadessa
                March 27,199O

                broken even, there would not have been any increase in the national
                debt during that period. This report received a lot of attention, and it
                also got us another visit to the Hill. A Senator from South Carolina
                requested that Mr. Campbell and staff (me) come up, but he used a
                whole different tack.

                He was the Chairman of the Senate Committee for the Post Office or
                something like that. He complimented GAO very much and Mr. Campbell
                particularly. He then said that this situation was terrible and that we
                had to get the Post Office on a self-paying basis. He agreed that we
                ought to do something about this subsidy to airlines, which, in fact, was
                done. He also agreed on the union problem; however, I don’t know if
                they ever corrected that. But he really did not like the rate

                He had been well briefed. He told us that one of the reasons the third-
                and fourth-class rates had to be so low was that industry presorted the
                mail. Anyway, he admitted that this was an area where some big sav-
                ings could be made and that the Congress was certainly interested in
                that. He asked me, “You’re a young gentleman. How much experience
                have you had running a Post Office?” I told him, “None.” But I added
                one of Frank Weitzel’s favorite lines, “You don’t have to be a chicken to
                know a rotten egg.”

                It ended up with him saying, “We have to look into this,” He said he was
                going to set up a group to study rates and to report to his Committee and
                he did. He set up a very distinguished five-man study group, the
                Chairman of which was the President of one of this country’s largest
                publishing companies. As I remember, the other members had about the
                same degree of objectivity. As far as I know, nothing ever happened to
                the rates. The Post Office was indeed an interesting audit assignment.

Mr. Eschwege    What year were you on that audit, by the way? I couldn’t find it*

Mr. Abbadessa   This had to be around 1958. I was there about a year before I went to
                the Transportation Division. When I was an Assistant Director, I con-
                tinued to have the same jobs, AEC and TVA. When I was made an Asso-
                ciate Director, Sammy gave me the Post Office audit also.

                Page 44
                      Interview With John P. Abbadessa
                      March 27,1990

Interaction Between
Civil and Defense
Mr. Cfrosshans        A couple of quick items. You have already touched on it, but maybe you
                      want to say a few more things, that is, on the interaction between the
                      Civil and Defense Divisions. You mentioned that Sammy, of course, was
                      a strong individual. You already alluded to Bill Newman. Would you
                      care to say anything more about what the relations were like and how
                      your two big Divisions got together on key issues? Or did you?

Mr. Abbadessa         Well, the honest answer is we didn’t. I’m not quite sure whether it was a
                      personality conflict between Directors or whether it was normal
                      growing pains. Sammy had all the horses, but Bill Newman was starting
                      essentially from scratch. He pulled in some people from the field, and he
                      had some good people like Jim Hammond and Charlie Bailey. He also
                      recruited some young staffers, like Ken Weary. However, it took him
                      time to get started.

                      Samuelson was sitting there with a disproportionate amount of the
                      talent, and I think Newman had a disproportionate amount of the work.
                      But they just didn’t hit it off. When I was the Deputy, relations were
                      fairly cool. I got along great with Newman, with Charlie Bailey, Jim
                      Hammond, and the rest of them. So I ended up as the contact man for
                      Sammy. However, I never went over there with any negotiating room at
                      all from Samuelson.

                      I think sewman did a very good job. He certainly was energetic. In my
                      view, he wasn’t in Samuelson’s class as an accountant or an auditor. I
                      mean Sam was very competent. But Sam wasn’t in Newman’s class as
                      far as generating enthusiasm and attacking a problem. Bill was tough
                      with the client, and DOD [Department of Defense] was a tough client. I
                      think Sam was much more cautious and professional. Professionalism,
                      however, would probably have bought nothing with DOD. So I think in
                      their respective areas, they both did a good job.

                      I really think Newman did a superb job with some pretty heavy handi-
                      caps. In the final analysis, I don’t think it was all personality because
                      Sammy wasn’t all that good with Personnel, Leo Herbert’s group, or
                      Accounting Systems. He ran his shop and he ran it well. He also worked
                      hard and was very capable.

                      Page 46
                        Interview With John P. Abbadessa
                        March 27,199O

Decision to Leave GAO
Mr. Grosshans           You were Deputy and held several very, very important positions. Why
                        did you leave? You mentioned you went to AECfor the Controller’s posi-
                        tion. But that must have been a tough decision to leave GAO at the time it
                        was growing and a lot of things were happening.

Mr. Abbadessa           Well, looking back on it, it really wasn’t a tough decision at all. I was
                        happy at GAO. I was prospering and Samuelson was several years older
                        than I. I think I had a bright future with the Office. I did good work and
                        I liked the work. I loved it. However, when AEC approached me, several
                        things hit me all of a sudden. One was: Do I really want to do auditing
                        for the rest of my life?

                        One of the things I guess that bothered me with auditing was that it was
                        done a lot with 20/20 hindsight. I felt I was dealing a little bit with his-
                        tory. Also, I admired AEC. I think I would have done the same thing with
                        TVA. It is clear that I would stay in government, because I was committed
                        to government. I had received a large number of offers from private
                        industry and at a lot more money than I was making in the government.
                        Money, however, wasn’t really that important.

                        I felt fairly flattered by the AEC offer, not that I was lacking attention in
                        GAO, because I had beat up on AEC pretty badly, As a matter of fact, Bob
                        Keller said he took the offer as a tribute to the Office, as well as to me as
                        an individual, I think it was mostly that I just wanted to play a more
                        active role, I had been a “genius” for 15 years looking at things after
                        they happened and having a lot of advantages in making my *judgments.
                        I guess I was kind of interested in finding out, am I really that smart?
                        What would it be like to have to make the decisions, bing, bing, bing?

                        Well, that’s the real reason. It was something I wouldn’t have thought
                        of. It was not something I looked for, but it was something that when I
                        was offered it, it took almost no decision. Even I was a bit surprised.

Mr. Eschwege            Well, while we are on that subject, you mentioned that you had a very
                        close relationship with Joe Campbell, and I suspect it was partly
                        because he already knew you; he knew of your capabilities before he
                        even came here, based on the Dixon-Yates case and so on. But he was
                        very disappointed when you left, John. Is that an understatement or an

                        Page 46
                 Interview With John P. Abbadessa
                 March 27,199O

Mr. Abbadessa    It’s an understatement.

Mr. Eschwege     Why was that?

Mr. Abbadessa    Well, I don’t know why. Like, I said, you don’t ever really know what
                 goes on in another person’s mind.

Mr. Eschwege     You just mentioned that Bob Keller said that it was a credit to GAO that
                 AEC wanted you over there. Now, Mr. Campbell didn’t see it that way.

Mr. Abbadessa    No and I don’t know why. I guess he was just plain disappointed. I know
                 they contacted him and asked permission to talk to me, which he gave.
                 Later, at a lunch, he said, “They’re very provincial. Also, they have
                 insulted you.” He didn’t think I would be interested, but I was interested
                 the minute I heard about it. He told me, “Nobody paid any attention to
                 the [AEC] Controller.” He also told me that he had plans to promote me to
                 a GS-18 and combine the field and the foreign operations by setting up a
                 bigger organization.

Mr. Eschwege     You mean the regional offices and the branches?

Mr. Abbadessa    The foreign offices, right. He said it would be 6 to 8 months, but it could
                 be done immediately if that would help. Later, Keller said he had never
                 heard of such plans.

                 Anyway, I became persona non grata. At first, I think he hit the panic
                 button a bit and said the timing is terrible. He asked that I get as much
                 time as I could from AEC.When he figured out that I was serious, he
                 wanted me out of here “yesterday,” I had been to Harvard and had
                 signed this agreement where I had to reimburse the training cost if I left
                 GAO before 18 months. I hadn’t been in GAO the necessary 18 months. AEC
                 said they would pay the cost. So I had to sign something to cover that

Mr. Eschwege     I think there was a Comptroller General’s decision on this.

Mr. Abbadessa    To allow me to do it?

Mr. Eschwege     I think the first question was: Should you have to repay?

Mr. Abbaclessa   Right. As a matter of fact, GAO billed me something like $3,000, but I
                 never had to pay it.

                 Page 47
                Interview With John P. Abbadessa

Mr. Eschwege    Just to clarify, you had to sign an agreement that you would stay at GAO
                three times as long as the time you were up there ir! school. Failing that,
                you had to reimburse the government for the cost.

Mr. Abbadessa   Yes, I was up there about 6 months. Anyway, my obligation was 18
                months, and I was leaving after about 12 months. AEC said, “Hey, this
                isn’t a problem. We would be willing to pay for it.” Keller, I think, made
                the legal decision that, as long as I stayed in government, [my moving
                was acceptable]. I knew I was going to be in government for the rest of
                my career, so I didn’t have any trouble signing another agreement.
                Finally, once Campbell realized I was leaving, we never talked again.
                Never. All communication from him came through Samuelson and they
                were, I thought, petty things.

                About 3 years later, Schoenhaut called me and said Mr. Campbell said it
                was time to talk to me again, and he wanted to set up a meeting, but we
                never got around to it.

Mr. Eschwege    Why? He wanted a meeting?

Mr. Abbadessa   Yes.

Mr. Eschwege    You didn’t want it?

Mr. Abbadessa   Well, I wasn’t really excited about it. I had considerable respect for Mr.
                Campbell, and I admired his independence. He was a Comptroller Gen-
                eral who understood financial management. Of course, we have even a
                better one now. However, I didn’t think that my departure was well

                There was a party for me, and there must have been over 200 people
                there. But not one top person. I spent 15 years in GAO, I worked hard,
                and I think I had been a real asset to the Office. More importantly, I
                thought I had the right to go to any damn agency I wanted to.
                Schoenhaut was the only senior official who had guts enough to come to
                the party. Oye Stovall couldn’t come. Samuelson couldn’t come. Keller
                couldn’t come. Not even Frank Weitzel.

Mr. Eschwege    Well, there was no publicity for the party.

Mr. Abbadessa   That’s for sure.

Mr. Eschwege    It was all by word of mouth.

                Page 48
                Interview With John P. Abbadessa
                March 27,199O

Mr, Abbadessa   That’s true, also.

Dr. Trask       Was this a question of loyalty, do you think? I mean did Campbell think
                you were disloyal to the organization?

Mr. Abbadessa   Possibly, Again, you don’t know what people really think. Looking back,
                trying to see it from his side, I was a guy whom he treated well. I really
                think that going to AIX was the major factor. I know, once before, when I
                received the [ 1960 Arthur] Flemming Award [for being the outstanding
                young man in federal service], a West Coast steamship company, the
                Dollar Line, offered me a job. It was headed by a guy named Killian, who
                was a big Democratic supporter. It was a family-owned line. I’d received
                this publicity from the Flemming Award. So they flew me out to San
                Francisco and offered me the number 2 job to the President and
                Chairman of the Board, who was about 80 years old, to be the Executive
                Vice President. One of their questions was “Are you afraid of Ted
                Westfall?” because Westfall was with Grace Line, Inc., had come from
                GAO, and was doing good things. I said, “Hell, no. I used to beat Westfall
                in football pools, poker, and everything else.”                              f

                But Mr. Campbell gave me three pieces of advice. He said, “First of all,
                the salary is ridiculous. Ask for 50 percent more.” He said, “You’ll get
                it.” He said, “Then ask for an investment in their retirement system
                equal to the investment that you have in the government’s retirement
                system and you’ll get that.” He said, “Then ask for a 5-year contract,
                which they won’t give you.” So I asked them for the raise, which they
                met immediately. The retirement thing was no problem. As for the 5-
                year contract, they said: “What’s the matter? Don’t you have confidence
                in yourself?” I said, “Hell, yes, I’ve enormous confidence in myself.
                However, I don’t have confidence that with this family-owned line, some
                cousin won’t come along [and take over]. I just want an assured period to
                prove myself.” They finally ended up offering me a 3-year contract. I
                went back and told Mr. Campbell about the 3-year contract. He said he
                couldn’t believe it. However, I decided not to go.

                The point is that when we were going through this, he didn’t seem to
                have any objection to my going to private industry, so, I don’t really
                know what it was, but I suspect its being AEC gave him heartburn. All I
                know is I don’t think it was handled well and I felt that it should have
                been handled better.

                Page 49
                     Interview With John P. Abbadessa
                     March 27,199O

The Zinc Case and
Holifield Hearings
Dr. Trask            There are two or three other events we’d like to talk about. One that
                     happened when you were still at GAO was the abolition of the Office of
                     Investigations in 1956. Do you remember the factors that led to that?

Mr. Abbadessa        Yes. Presumably,      GAO   had gotten into some kind of trouble over some

Dr. Trask            The so-called “zinc stink,” involving an Investigations report which
                     apparently contained some incorrect information.

Mr. Abbadessa        My own personal view, and with absolutely no specific knowledge of the
                     zinc case, is that Mr. Campbell wanted GAO to be a CPA firm. He wanted
                     professional accountants in here. He didn’t buy a lot of the peripheral
                     activities. I know he wanted the Transportation Division out of GAO. I
                     suspect that Investigations wasn’t, probably in his eyes, pulling its
                     weight. I really know nothing except it was abolished. As a matter of
                     fact, we inherited some of the staff.

Mr. Eschwege         You mean on the audit side?

Mr. Abbadessa        Yes. We inherited some of their people, and some of them were pretty
                     good. The impression I have is the overall caliber of the staff didn’t fit in
                     too well with the growing mission of comprehensive audits, but they had
                     some savvy folks.

Dr. Trask            Another event that you tended to look at from two perspectives, both as
                     a former GAO person and at the time as Controller of the Atomic Energy
                     Commission, was the Holifield hearings of 1965, at which you testified.
                     What observations do you have on those events?

Mr. Abbadessa        Well, I thought that might come up, so I brought my testimony. I’m not
                     going to take up a lot of time, but let me mention several things. First of
                     all, without regard to Mr. Campbell, GAO, AEC, or anything else, I happen
                     to be a very strong believer in the value of audit. Agency managers
                     make decisions within a limited time frame and often without adequate
                     information. You get as much information as you can. Some people are
                     smarter in getting information than other people, but after you make the
                     decisions, you have to forget it and go forward. I always figure:

                     Page 50
               Interview With John P. Abbadessa
               March 27,199O

               “If 10 percent come back to haunt you, hey, that’s not too bad. Making a decisionis
               much better than doing nothing. If 50 percent comes back to haunt you, then you
               had better revalue how you are making your decisions.”

               The value of an audit is that the auditor has more time than the deci-
               sionmaker, he gets more information, and he comes up with findings
               from which you can learn and, if necessary, can take corrective actions.
               That is valuable.

               The second thing is that a big outfit, an independent auditor, particu-
               larly an outside one, is going to see things in a different perspective, and
               he or she can contribute valuable information. The third thing involves
               reassurance. In my case, I was a Controller with an outstanding staff
               and a great system of financial control, and I received praise like no
               other agency in the government, although I personally never really
               knew how good the figures or the financial results were. I did a lot of
               work, don’t misunderstand me, but it was reassuring when I got satis-
               factory results from my internal auditors or from a GAO report.

               The fourth thing is the cop-on-the-beat effect. Just the fact that there is
               a GAO is important, because I had attended Commission meetings where
               they worried, “Hey, what will the Bureau think? What will GAO think?
               What will the Congress think ?” The one they worried the most about
               was GAO because GAO could prove their findings if it went to the Con-
               gress. The Commission had a fair amount of respect for GAO, and I used
               the threat of GAO many times when I was trying to maintain good finan-
               cial management-even when I was not sure GAO wouId agree with me
               or would even find the problem.

               So when I was called [to testify], I met with the congressional staff and,
               while nobody ever said this, I think they felt I was out of sorts with GAO
               and would take that opportunity to throw some bricks at GAO.

               When I sent up my opening statement, which supported GAO, I was
               called up by the staff again and they weren’t happy. I can’t prove this,
               but I think the staff didn’t even want me to testify. However, Mr.
               Holifield said, “Yes.” I knew Mr. Holifield really well from Dixon-Yates
               and from the Joint Committee on Atomic Energy. I don’t know if you
               have a copy of this testimony.

Mr. Eschwege   Yes, it’s printed in the record.

               Page 51
                    Interview With John P. Abbadessa
                    March 27,199O

Mr. Abbadessa       Well, basically what I said was that GAO was a value to AEC in our run-
                    ning of that agency, and I meant it; it happened to be the gospel truth.

Employment of GAO
Officials at AEC
Dr. Trask           Just one other question and that is that after you went to AEC, both Art
                    Schoenhaut and Clerio Pin came over there to work for you. Were there
                    some particular reasons why you brought them over other than that you
                    had known them before?

Mr. Abbadessa       Well, two things. First of all, I didn’t go after Schoenhaut. Schoenhaut
                    called me up after Staats had been in GAO a while and said that he didn’t
                    want to work for him. I said, “Slow up. Slow up, Arthur. I know Elmer
                    Staats. I have worked with him.” I’d worked with him for about 5 years
                    when he was with the Bureau of the Budget. I said, “This is a very
                    capable man.” I said, “He knows government, you have a brilliant future
                    at GAO, and I don’t think you ought to leave.” So he accepted that.

                    About a month later, or 3 months, I received a very sharp call. He said,
                    “I’m leaving. You have the right of first refusal and don’t try to talk me
                    out of it.” So I said, “Arthur, I can always use a good man,” and he was
                    a good man. I felt the need for a Deputy, anyhow. I had three excellent
                    Assistant Controllers, but more and more of my time was being spent
                    upstairs, with BOB, and with the Congress. So I went to the Commission,
                    got the grade, hired him, and he came to AEC on a lateral transfer. I was
                    then an 18. He was a 17. So that’s how Arthur came to me.

                    Pin, I went after. Not for me, but for our biggest Division, the Reactor
                    Division, under a guy named Milt Shaw, whom you might know.

Mr. Eschwege        Yes.

Mr, Abbadessa       Even with all my power at Am, I couldn’t stay on top of Milt Shawls
                    operation. I thought it was desirable to get somebody in there who could
                    assist the Reactor Division in its financial management. I called up
                    Clerio and talked him into taking the job, He came over and then later he
                    came with my office. I was constructing a computer building when I
                    started getting into the computer business big time. I wanted Clerio to
                    track the construction because I wanted that baby on schedule and

                    Page 62
                Interview With John P. Abbadessa
                March 27, 1990

                within costs, Clerio did it. He also helped with the GAO reports. However,
                I never could really give Clerio enough work for his talents. He and
                Schoenhaut left at the same time.

Mr. Ekchwege    Well, the record should show that Schoenhaut came back to work for
                Elmer Staats on the Cost Accounting Standards Board. So he must have
                had some second thoughts about Mr. Staats.

Mr. Abbadessa   Well, that’s interesting. Elmer Staats called me and offered me that job.
                As a matter of fact, he offered me two jobs, but anyhow, that was one of
                them. The other was in a different time frame. I said, “Look, Elmer, I’m
                not good at writing policy, decisions, and standards. I’m a doer.” I was
                both busy and happy, I had a power structure, and I wasn’t the least bit
                interested in going back and writing standards I said, “But I’ll tell you
                who can do a good job, Arthur Schoenhaut.” This wasn’t in
                Schoenhaut’s testimony to your group that I read, but he might never
                have known it. “Schoenhaut,” I said, “isn’t really that happy here, and
                his talents certainly aren’t being fully utilized.” Staats wouldn’t accept
                my answer and asked me to give it more thought.

                I talked to Schoenhaut and he was very interested. Art had a somewhat
                unusual reason. He said, “Our profession has been around for 200 years
                and has never done this, This is my opportunity to make a real contribu-
                tion.” I said, “You’re out of your head, but if you want it, I’ll call

                So I called Elmer. I said, “Look, I’m not interested, but I still think your
                man is Arthur Schoenhaut, my Deputy.” He said, “He won’t work for
                me.” I said, “It’s another time, another scene, Elmer. Maybe you ought to
                talk to him.” I then knew Arthur was interested.

                So Schoenhaut talked with Keller and he ended up with the job. He did a
                superb job.

Mr. Eschwege    Yes.

Mr. Abbadessa   One of his standards gave away my independent R&D[research and
                development], but leaving that out, he did a superb job.

                Page 63
                     Interview With John P. Abbadessa
                     March 27,199O

Relationship With
GAO Staff Auditing
Mr. Eschwege         You had a different relationship with the GAO staff once you were at AEC
                     than you had when you were here. There was a fellow named Phil Bern-
                     stein who was in charge of the AEC audit for a while. When Mr. Samu-
                     elson left, we put out a little blue booklet. In that booklet, he said:

                     “Boy, it’s tough to work as a GAO Ass&ant Director at AK, not only do you have
                     to get your reports through the present Deputy DirecLor and Director of the Civil
                     Division, but you also havt: to deal with two former Deputy Directors and one Asso-
                     ciate Dire&or of that Division.”

                     He was joking, of course, but there was a lot of sensitivity over GAO
                     reports that came to you and your people in draft form, at least from
                     our staff’s point of view. They knew these reports would get a good
                     going over.

                     I am not saying this in any critical sense, but I think that it kind of
                     points out that GAO was listened to, at least, by some people over there
                     in AFT.

Mr. Abbadessa        There wasn’t any sensitivity on our side, because I had a very, very firm
                     policy. I encouraged discussion with the GAO staff. I encouraged the AEC
                     field people to have wrap-up meetings and to send me a write-up of each
                     one. We received draft reports, and they got absolutely top attention.
                     Essentially, they were handled by me when I first got to AEC. Then,
                     when Schoenhaut and Pin arrived, they made the reviews because I was
                     always busy. But I had a firm, firm policy, which was, Take a look at the
                     draft report and see if they are right. If they are right, let me know. I
                     can get corrective action before they can get the report out. Then get
                     them to put the corrective action in the report. Not promised action-
                     action taken. That washed the report away. If they weren’t right, then
                     fight with them and get them to withdraw; if you see an “It appears” or
                     “It seems,” man, you jump on that finding.

                     Schoenhaut and Pin were pros, and I had been around the track a few
                     times. The basic philosophy was:

                     Take advantage of GAO findings. If they are right, get the corrective
                     action and get the action included in the report. If they are wrong, tell

                     Page 54
                  Interview With Jnhn P. Abbadessa
                  March 27,1990

                  them they are wrong and fight them in the streets and fight them in the
                  alleys and, if necessary, we will fight them in the halls of the Congress.

                  That’s the way it was.

                  When draft reports were submitted for our review, they received
                  careful attention-that    is an understatement-at    the various manage-
                  ment levels that were affected, and, where we deemed it appropriate,
                  the recommendations were adopted and implemented. Further, I
                  believed the reports were so important that, apart from the considera-
                  tion given each finding at the location covered by the audit, it was our
                  standard practice t,o send all copies of published GAOreports concerning
                  .GX to each of our field offices. In transmitting the report, the Con-
                  troller, sometimes the Commission, directed attention to the deficiency
                  discussed and requested the field offices to assure through self-exami-
                  nation that similar deficiencies did not exist in their own operations. We
                  believed strongly in this.

Mr. Eschwege      I was going to say also, like you just said, that the benefit of’ that was
                  that you would take the corrective action. While some of our staff prob-
                  ably didn’t like your taking the zing out of t,hat report, we were able to
                  report to the Congress that not only were we right, but look, the proof
                  that we were right is that AK took the action. That, to me, was really
                  the best way of doing it.

                  But I do remember one time, John, and this is an isolated incident, when
                  I briefly had responsibility for the AEC audit. I walked in one morning
                  about 7:30 like I used to, and you were already sitting in my office.
                  Apparently, the staff couldn’t get agreement on the title of one report; I
                  think that it had to do with leaky containers.

Mr. Abbadessa     Oh, those would be t.errible words to put in a title. I don’t remember this,
                  but I wouldn’t live with that for 30 seconds.

Mr. Eschwege      I think t.hat’s why you came in to see me that morning. You made my
                  day that day. But we got some agreement on how to resolve that.

Mr. Abbadessa     It wasn’t with the words “leaky containers” in the title, I’ll bet.

Mr. Eschwege      No. It did concern some containers that were shipped, I think, by air to
                  different locations; they leaked.

                  Page 55
                Interview With John P. Abbadessa
                March 27.1990

Mr. Abbadessa   I don’t question that they leaked. I’m just saying I don’t think such
                words should be in the title of a GAO audit report.

Mr. Eschwege    Well, I was in a compromising mood that day.

Mr. Abbadessa   You’re a good man and you ran a tough audit, Henry.

Mr. Eschwege    We did okay. So our staff really had a good relationship, but they were
                always cautious to be sure that their previous relationship with you-
                and I’m sure you were, too-did not affect their views; when they were
                right, they would call the shots.

Mr. Abbadessa   I always thought they did and GAO had a good staff over there. It started
                with Litke, we had you, we had Bernstein.

Mr. Ekchwege    You had [Richard] Kelley. You had Pin.

Mr. Abbadessa   I don’t think Pin was on the AECaudit. I know Schoenhaut said he was,
                but I don’t think that he was.

Mr. Eschwege    Pin wasn’t out there at the site; John Milgate was. But Pin had overall
                responsibility for GAO’S audit at AEX and some other agencies.

Mr. Abbadessa   Milgate made a presentation out at Las Vegas once when we had all of
                our financial people at a meeting. [Let me read from the record.]

                “In commenting on Milgate’s presentation, Mr. Abbadessa emphasized that GAO usu-
                ally did a good job on running down factual information and that AEC should not try
                to defend a situation that is wrong. Getting the whole story and taking needed cor-
                rective action promptly is the only good answer to a GAO audit report on a case like

                Now, this happened at a field office with all my Directors of Finance.
                We also said as an overall evaluation, “We found that the audits by the
                General Accounting Office had been beneficial in bringing about
                improved management in AEC operations.” That was true.

                Page 66
                      Interview With John P. Abbadessa
                      March 27,19!30

Comments on Current
Comptroller General
Mr. Grosshans         John, we have covered an awful lot of ground here, and we certainly
                      appreciate the comments that you were able to add. Are there any areas
                      that you would like to comment on that we haven’t mentioned, or is
                      there anything that GAO has done since 1962 that may be of particular
                      interest to you that we haven’t talked about and that you would like to
                      mention before we wra.p this up?

Mr. Abbadessa         Since 1962, I’ve been busy doing other things, but I have always tried to
                      stay close to GAO and its activities. Staats invited me over two or three
                      times to talk to the GAO staff because he knew we had a pretty good
                      financial management system at AEC.He also invited me over to make
                      some presentations to the Cost Accounting Standards Board.

                      I am really not in a position to comment further on Staats. However, I
                      would like to comment on Chuck Bowsher. He and Schoenhaut wrote a
                      report once on cost-based budgets. I was in Vienna, Austria, and I sent
                      them considerable background material on AEC that they used. Chuck
                      Bowsher, as you know, really understands financial management, and
                      he really wants to improve it in the overall government. I was on a
                      couple of his task forces; however, he quit inviting me. I don’t know
                      why. Anyway, we talked him into changing GAO'S approach on
                      approving accounting systems. Instead of doing it based on the planning
                      for the system, the task force recommended waiting until implementa-
                      tion because what GAO looked at as a planned system seldom got imple-
                      mented. He bought that,

                      I was on another Committee that issued the two-volume report Man-
                      aging the Cost of Government in 1985. The Comptroller General made a
                      big drive on cost-based budgeting, integration of budget and financial
                      accounting, cost controls, and other improvements. In those early days, I
                      used to kind of tell the Comptroller General, “Hey, you have 15 years.
                      Push this harder.” Chuck Bowsher is an awfully nice guy, but I think
                      here lately he is getting tougher. I see him on TV now and he’s looking

                      There are two things that I really think I would like to see GAO do. One,
                      while it is good to talk about cost-based budgeting, cost integration, and
                      the like, you will never, never, never in this man’s government get good

                      Page 67
                interview With John P. Abbadessa
                March 27,1!#90

                financial management if you don’t have accounting and budgeting under
                the same person. I have repeatedly expressed this view to the Comp-
                troller General and to another man who came from [Arthur] Andersen.
                He has now left, but he did a lot of the two-volume report,

Mr. Eschwege    Fred Wolf?

Mr. Abbadessa   No, no. I talked with Fred, too. No, he was a younger guy, but he was a
                driving force. I think he’s left GAO. He came from Andersen, a real bright
                kid. [John Cherbini.] As a matter of fact, I complained to him so much
                about the issue that Chuck invited me up and said he agreed, but he
                didn’t want to bite off too much at one time. Having lived in the execu-
                tive department, I am absolutely convinced that if you don’t have the
                accounting and the budget functions under the same person, budget is
                going to get all the attention. However, the budget is not going to have
                the accounting support it needs, and it is not going to include estimates
                as good as there would be with accounting support-also, it makes more
                difficult the measurement of actual performance against budget esti-
                mates. These two activities have to be under the same person. I don’t
                care what you call him-the Controller, Chief Financial Officer, or what
                have you. My point is, if an agency has accounting in one area and
                budget in a different area, I don’t think a lot of the good things the
                Comptroller General is trying to do will get done. If there is one thing I
                would push for, that’s it.

                The second one, I mentioned to you earlier, Henry, and you said you are
                doing it. It involves GAO'S review of agency budgets. You know, I’ve been
                gone, what, 20 years?

                I have always thought GAO, even under Staats, who came from the
                Bureau of the Budget, missed the boat on solving its report issuance
                timing problem by not reviewing agency budgets. When I was here, we
                started an audit with the review of the agency’s enabling legislation.
                Enabling legislation is kind of a grandiose document, and it would be
                kind of hard to say an agency is not following it. You might occasionally
                get a specific example; however, I agree that it is the right place to start.

                But a budget is also a contract between an agency and the Congress-it
                ends up as a law, the appropriation act, and it is short-term. To me, the
                ideal audit approach is what we did at AEC. We reviewed the budget
                while it was being formulated to learn AEC'S program planning. If we
                saw something coming along that we thought was troublesome, we got
                together with Committee staff and arranged for a request for a GAO

                Page 68
                Interview With John P. Abbadessa
                March 27.1990

                review of that subject. Under such conditions, you can get out a report
                on a much better time frame.

                Except for those two issues, I can only applaud the current Comptroller
                General. Even as much as I admired Mr. Campbell -1 didn’t know
                Staats’s work that well--I think Mr. Bowsher is the Comptroller General
                that really understands financial management, is completely dedicated
                to it, and has been enormously successful. I would like to see him be
                even more successful. I watch the news and, nowadays, I see GAO getting
                involved more and more. I am very proud to have been a part of GAO.

Mr. Grosshans   I think that is a good place maybe to wind it up, unless Henry and Roger
                have anything else to add. I think that is a good summary.

Mr. Eschwege    I think it is a very good way to end this interview, and I thank Johnny
                for coming over here today. I am amazed at how much you remember
                and how much material you have brought with you today to help you
                remember things.

Mr. Grosshans   Roger would probably want to take a look at some of that

Mr. Abbadessa   With absolute assurance that I will get them back, you are welcome to

Mr. Eschwege    You can sort of point to different periods in GAO'S history and, certainly,
                this period from 1947 to 1962 might be renamed the “Johnny Abbadessa

Mr. Abbadessa   No, no way.

Mr. Eschwege    With a little overlap for Westfall and a few others.

Mr. Abbadessa   Westfall, Long, Mose Morse, Samuelson, Bill Newman, Schoenhaut-the
                list is a long one.

Mr. Eschwege    Certainly from the time I came here, John, in 1956 until 1962, you were
                the guy with the Flemming Award and the up-and-coming guy. I guess it

                Page 59
                Interview With John P. Abbadessa
                March 27,lSSO

                was a little bit of a shock to all of us that you left, but we weren’t angry
                with you for it.

Mr. Abbadessa   Thank you for inviting me. I have enjoyed it.

                Page 60

A                                                                        Coal contracts. 29-30
Abbadessa, J. (daughter), 4                                              Combined Development Agency (CDA), 26
Abbadessa. John P education, l-2: military service, 2; early             Commodity Credit Corporation, 16
   assignments at G’AO, 3-4; w&k in Transportation Division, 4-5;        Comprehenslve audits, 11-13, 14, 50
   work in Corporation Audits Divlslon, 6-10; travel, IO; comments on    Conaress. 6. 9. 14. 51. 55, 58
   comprehensive auditing, 11-14, Reconstruction Finance                 Con&ess~onal’Re~ord, 22;
   Corporation work, 15-17; audbts of the Atomic Energy                  Corporation Audits Division, &&IO, 13
   Commission, 17-19; power reports, 19-22, Dixon-Yates contract,        Corporation Control Act, 31
    19-20; comments on deficiency reporting, 22-23; congressional        II
   committees, 27; work on TVA audits, 29-33; anecdote about birth       Decker, Irwin, 6
   of daughter, 33; Dixon-Yates controversy described,, 33-37;           Defense Accounting and Auditing Division (DAAD), 8, 27-28, 38, 45
    relationship with Joseph Campbell, 37; congressional testimony.      Deficiency reporting, 22-23
   40; Post Office audit, 42-44; reasons for leaving GAO, 46, offer of   Delk. 0. Gordon. 2.6
   AEC job, 46; Campbell’s reaction to his departure, 46-47, 48,         Denier, CO, 10
   value of audits, 50-51; Hoilfield hearings, 50-52; employment of      Denver Posi, 21
    Clerio Pin and Arthur Schoenhaut, 52-53; relationship with GAO       Dixon-Yates contract, 17, 19, 20-21,33,51
   during tenure at AEC, 54-56; comments on Comptroller General          Dodge, Joseph M., 19
    Bowsher, 57, 59, career characterized, 59                            Duke University, 41
Accounting Systems Division, 45
                                                                         DuPont, 12
Accounting systems work, 29
Agency budget review, 58                                                 E
Air Force, 6                                                             Ebasco, 19, 20,21,37
Albuquerque, NM, 1%                                                      Elnhorn, Rav, 11
American Institute of Certified Public Accountants, 10                   Eisenhower: Dwight D., 18, 19, 21, 34
American University, I-2                                                 Electric Energy, Inc. (EEI), 19, 22, 34
Andersen, Arthur and Company, 58                                         Eschwege, Henry, vi
Anderson, Clinton, 19                                                    F
Andrews, T. Coleman, 6, 8                                                Fay, Charles Robert, 18, 19
Appropriations Committee, 17                                             Federal Bureau of Investigation (FBI), 3
Armv. 6                                                                  Federal Housing Admimstration (FHA), 3, 12
Atlania, GA, 10, 39                                                      Federal Power Commission (FPC), 19,35
Atomic Energy Commission (AEC), 1, 4, 5, 9, 11, 12, 17-19, 20, 21,       Federal prisons audit, 3
   22, 23, 24, 25, 26, 27, 28-29, 34, 36,39, 40,41, 44, 4647, 49, 50,    Federal Reserve Bank, 15
   52. 54.55, 58                                                         Field Operations Division, 10, 38, 39, 41
Atomic Energy, Joint Committee on, 17, 20, 26, 51                        Fields, Mr., 25
Audits, Division of, 8, 11, 38                                           Financial statements, 15-16
B                                                                        Fisher, Lyle, 35
Bailey, Charles, 45                                                      Flemming Award, 49, 59
Baker, Howard, 32                                                        Floyd, Bob, 4
Berkeley, CA, 40                                                         Fontana, TN, 3, 7
Bernstein, Phil, 54, 56                                                  Frankfurter, Felix, 5
Birkle, Gene, 29                                                         Freedlund, Ted, 3
Bordner, Howard, 6                                                       --Frese, Walter F., 11, 12, 14
Bowsher, Charles A., 48, 57, 58, 59                                      G
Brantover, Levi, 3                                                       General Counsel, Office of the (GAO), 9, 22
Budget and Accounting Procedures Act of 1950, 14                         General Electric, 12
Budget, Bureau of the (BOB), 19, 35, 58                                  Gore, Albert, 25
                                                  .~      .______ .-
C                                                                        Government Services, Inc. (GSI), 3, 7, 8, 12
Cades CPA Course, 3-4                                                    Grace Line, Inc., 49
Campbell, Joseph, 4, IO, 19-20, 21, 23-24, 26, 27, 30-31, 36-37, 38,     Green, Paul, 17
    39, 40, 41, 42-43, 44, 46-47, 48, 49, 50, 59                         Grosshans, Werner, vi
Campbell, Walker, 17                                                     H
Cannon, Clarence, 22                                                     Hammond, James H., 45
Chattanooqa Times, 25                                                    Hanford plant, 12, 39
Cherbini, John, 58                                                       Harrill, Reece, 11
Chicago, IL, IO                                                          Harvard Umversity, 47
Churchill, Winston S., 26                                                Herbert, Leo, 23, 41, 45
Civil Accounting and Auditing Division (CAAD), 6, 8, 14, 27-28, 38,45    Herz, Ted, 6, 15

                                                 Page 61

Hoagland, Harrell O., 4                                           Post Off ice, 21,42-44
Holifielcl, Chet, 34, 51                                          Program-results audits, 12
Holifield hearings, 24, 50                                        Providence College, 41
Hughes, Phillip S., 19                                            Public Works Committee. Senate, 32
internal Revenue Service (IRS) 3                                  Railroad Association, 5
Investigations, Office of (GAO)‘, 50                              Reconstruction Finance Corporation (RFC), 3, 15, 16-17
Ives, SteDhen, 6                                                  Richland, WA, 18
                                                                  Roosevelt. Franklin D., 26
Jones, Jesse, 16                                                  s
Joppa, IL, 20                                                     St. Louis Post-Dispatch, 22
Journal of Accountancy, 30                                        Samuelson, Adolph T., 6, 8, 9, 12, 13, 22, 23, 24, 27-28, 41, 42, 44,
Kaufman, Mr., 3                                                   Sav&&      d&r pi&t, 12
Keller, Robert F., 35, 36, 46, 47, 48                             Schoenhaut, Arthur, 1, 9, 47, 52-53, 54, 59
Kelley, Richard, 56                                               Scranton, University of, 41
Killian, Mr. 49                                                   Securities and Exchange Commission (SEC), 35
Kin s College, 41                                                 Shaw, Milt, 52
Kuy9(endall, Jerome, 19                                           Smith, Fred, 34
                                                                  South Africa. 26
                                                                  Sperry, Roger, 13
kindgren Roy 6                                                    Staats, Elmer B., 52,53, 57, 58, 59
Lltke. Art: 28.i9. 56                                             Stanford, CA, 40
Liver&ore Lab, 40                                                 Stovall. Ove. 48
Long, Robert, 8, 19, 59                                           .%Xrauss,-Lewis-L., 19, 25, 36
Los Angeles, CA, IO                                               Summerfield, Arthur, 42
Lybrand, 31
Lynn, MA, 42
                                                                  Taber John 19 21
M                                                                 Ten&see      \ia&y Authority (TVA), 4, 5, 6, 9, 12, 21, 24, 29-30, 31-32,
Managing the Cost of Government, 57                                  34, 41, 44, 46
Maritime Commission audit. 9, 13. 14                              Texas, 10
Maryland, University of, 41                                       Thornton, John, 10, 39, 41
Maxwell, Dr., 2                                                   Trainor, Harry, 2
Memphis, TN, 34                                                   Transportation Division, 4-5
Milgate, John, 56                                                 mkyyL#              59
Mississip i Valley Generatin Company, 21
Morse, El Psworth H., Jr., 8, 2 8 , 23, 30,41, 42, 59             Truman, harry’s,, 18, 19, 20
Murphy, Charles E., 1                                             U
                                                                  Union Carbide, 12
%Cormack John 42-43                                               Union Electric, 22
McDowell, C&s, 6 ’                                                Union of Soviet Socialist Republics, 26
McKinley High School, 1                                           United Kingdom, 26
lational Aeronautics and Space Administration (NASA), 11-12       Vienna, Austria, 57
Navy, 6                                                           Vogel, Herbert, 32
New York City, 15                                                 W
Newman, William A., 8,28, 45,59
Nichols, Kenneth D., 19                                           Wall Street Journal, The, 22
North Carolina, 3                                                 War Powers Act, 34
                                                                  Warren, Lindsay C., ll,41
0                                                                 Weitzel, Frank H., 11, 12, 14, 34,35-36, 37-39, 40,48
Oak Ridge plant 12                                                Westfall, Ted B., 6, 8, 9, 11, 16, 49, 59
Oak Rid e Th I. 18                                                Westinghouse contract, 24
Ohio “aI& Electric Corporation (OVEC), 19, 22, 34                 Wharton School of Finance, 2, 6, 41
P                                                                 Werner, Mel, 6
Pastore, John O., 26                                              Wolf, Fred, 58
Personnel Management, Office of (GAO), 45                         Y
Phillips, John, 19                                                Yankee Atomic Electric Company, 24
Pin, Clerio, 52-53,54, 56

                                                        Page 62
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