The Secret in the Stacks

The Army, Air Force, Navy, Marines, Library of Congress . . . Hold it -- when did bibliophiles get mixed up with the military? Last year, it turns out, the library began working covertly with the Pentagon to arrange consulting contracts on weapons projects as a way to hide Defense Department spending.

The startling connection was disclosed last week by June Gibbs Brown, inspector general of the Defense Department, in hearings held by Ohio Democrat John Glenn, chairman of the Senate Governmental Affairs Committee. Brown said the practice was designed to permit the Pentagon to avoid competitive bidding in hiring consultants, since this is not required of the Library. It also skirted a law requiring Government agencies to report how much they spend on consulting fees.

An additional $250 million in Pentagon contracts was laundered through the Department of Energy and the Oak Ridge National Laboratory in Tennessee. The Energy Department's inspector general, John Layton, said contracts at DOE were drawn so loosely that the department was forced to pay fully even when contractors defrauded the Government. Since January, 22 people, mostly defense contractors and consultants, have pleaded guilty to or been convicted of a variety of charges in the so-called Ill Wind investigation into procurement abuses.

The library went along with the deception, said Brown, because it got a 15% cut of the awards from the Pentagon. That amounted to $12.6 million in income for the library last year on $84 million in DOD contracts. Librarian of Congress James Billington, who ordered an internal investigation of the suspect contracts, directed that they be either canceled or transferred to the Pentagon.

The library loophole was just one of an array of misdeeds reported to the Glenn committee by some of the Federal Government's 23 inspectors general, whose semi-independent offices were created in 1978 to ferret out abuse in the departments and agencies to which they are attached. Glenn has been calling them to testify, spurred by the scandal at the Department of Housing and Urban Development.

HUD inspector general Paul Adams had repeatedly warned his boss, Secretary Samuel Pierce, about the problems and had been repeatedly ignored. Last week the Government Accounting Office reported that the losses in just one HUD program, the Federal Housing Administration, totaled $4.2 billion -- five - times the amount the Reagan Administration had conceded. That bill lands on top of the $300 billion or so needed to rescue the savings and loan industry -- another problem that Washington chose to overlook while the losses mounted.