The Five-Percenters

Many a businessman, looking for Government contracts, has gotten lost in the bureaucratic jungle of Washington. But as every businessman should know, there are guides, known as five-percenters, to lead bewildered contract-seekers out of the swamp in a hurry. The guides, usually former Government officials or ex-Congressmen, know or claim to know the right people. For a retainer and 5% on the gross of any contract obtained, "influence" will be put to work. Few officials will admit that such influence exists, although it is part & parcel of the Governments patronage system. Only last month Defense Secretary Louis Johnson denounced the five-percenters and denied that influence counted at all; anybody, he said, could get a federal contract with the right bid.

"Dearest Friend." Last week the New York Herald Tribune snorted that this was not so. To prove its point, the Trib dug up a case history on one of Washington's five-percenters named James V. Hunt, an ex-Army officer and onetime War Assets Administration official.

The Trib told the story of Paul Grindle, an ex-Herald Tribune staffer and now a Massachusetts furnituremaker, who went to Washington a month ago hoping to sell furniture to federal agencies. There Grindle met Hunt and was quickly impressed by his "influence"; Hunt's offices were decorated with autographed photos of prominent politicos, including Harry Truman. Hunt rattled off the names of his "friends," including Presidential Military Aide Harry Vaughan ("my closest and dearest friend"), Louis Johnson, and others. Hunt, according to Grindle, claimed that he had swung many deals. Among them was the repurchase from the War Assets Administration of Long Island's Lido Beach Club by its prewar owners, for half of their selling price to the Navy. Hunt's commission: $102,500. (The owners later said it was only '$80,000.) Grindle agreed to pay Hunt $1,000 down, a $500 monthly retainer for a year, and 5% of any contract obtained. Then he told his story to the Trib.

Pen Pals. Hunt hotly denied that he had ever used any influence. He was "just an errand boy," he said, helping small businessmen to find their way around Washington's federal bureaus. Of course, he knew Harry Vaughan and had entertained him at a few cocktail parties, but he wouldn't think of asking him, or his other friends, to influence Government contracts. Though Harry Vaughan readily admitted their friendship, many of the other "friends" smiling down from Hunt's office walls promptly said that they didn't know him. They pointed out that it was easy to look like a man of distinction and influence in Washington; all anyone had to do was write Congressmen for autographed pictures and hang them on his wall.

Nevertheless, the Senate Executive Expenditures Committee and two other Congressional groups trumpeted that they would start investigating the five-percenters. That was a big job, since anyone who had kicked in for campaign funds, poured drinks for the right people or done the countless other things that made for influence in Washington, was equipped to be a five-percenter. But if the investigation should eliminate just a few of the five-percenters, and teach Government officials to steer clear of the influence boys, it would do a service not only to taxpayers but also to businessmen.

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