Then, to light a fire under the issue, Chairman Hardy disclosed enough information to make it obvious that he was on the trail of multimillion-dollar scandals in the handling of foreign aid in Peru. He revealed that 2 million dollars in U.S. funds were spent on a farm-to-market highway which led only to unarable mountainous land. It was started before plans were completed, plans were changed while it was being constructed, and the funds ran out when it was only half finished.
He also told about an irrigation project built at Pampas de Noco. It cost $125,000 of Americans’ money, but it didn’t work because there simply was not enough water available in the area to make use of the projected irrigation works.
John R. Neale, director of the United States Operations Mission in Peru, had acquired a $200,000 interest in a ranching corporation that received aid under the U.S. program. Although Neale had resigned in 1958, there were indications that key ICA and State Department personnel had protected him from a thorough investigation for months.
Hardy revealed widespread irregularities in the 14-million-dollar drought relief program in Peru. He had testimony that as much as 60 per cent of the so-called “drought relief” went into unauthorized channels and was no help to the drought victims.
Chairman Hardy made certain that President Kennedy was apprised of the nature of the mismanagement and fraud being hidden by the State Department. The reaction was fast, and the Rusk letter of instructions was slapped down by the White House on direct orders from President Kennedy.
Brooks Hays, the former congressman and Assistant Secretary of State for Congressional Relations, assured Chairman Hardy that the Rusk instructions would be rescinded, the documents released, and witnesses freed to testify.
Witnesses called by Hardy a week later, on March 29, did testify freely. These witnesses produced a letter from State Department Legal Counsel Abram J. Chayes instructing them to forget the whole thing. Chayes wrote:
“The instructions contained in the letter of March 21, 1961, addressed to you by Secretary of State Dean Rusk, are hereby withdrawn. In view of this fact, I would appreciate it if you would return the letter to me and treat it as though it had not been sent.”
Nothing that Chayes could write, however, could erase from some people’s minds the memory of this clumsy and arrogant effort of the State Department to withhold. To ensure its perpetuity, Representative Meader rose on the House floor two weeks later, on April 17, to recite the story for the Congressional Record.
“In recent years, ambitious bureaucrats have concocted and promoted the so-called doctrine of ‘executive privilege,’ which, in my judgment, is a myth,” Meader said. “In my view, there is no right or power in the executive branch of the Government to decide what facts Congress needs concerning the conduct of the public business.... That decision is clearly and properly a legislative decision.”