[Undated, unattributed news story.

Washington --

A Senate investigator testified today that despite payments of $63,947 to a University of Chicago professor to evaluate the effectiveness of a large poverty grant to two Chicago street gangs, virtually nothing has been done under the contract.

John J. Walsh, an investigator for the Senate permanent sub-committee on investigations, said the money was paid by the Office of Economic Opportunity to Dr. Irving Spergel, a professor in the school of social service administration.

Walsh testified publicly before the committee today.

‘Doesn’t Make Sense’


After hearing Walsh’s testimony Sen. John L. McClellan [D., Ark.] subcommittee chairman, said angrily:
“It doesn’t make sense, this squandering of taxpayers’ money.”

McClellan charged that information to the subcommittee indicates that funds expended in the program “may have been almost completely wasted.”

McClellan charged poverty funds were used to enlarge and strengthen gang membership rather than for education and job training.

Walsh told this story:

On Jan. 4, 1958, the OEO awarded a $79,000 contract to Dr. Spergel to find out whether a $927,341 poverty grant to the Blackstone Rangers and the East Side Disciples was fulfilling its intended purpose: to provide basic education and employment opportunities to about 800 gang members of the two street gangs.

Report Due in April

A progress report was due from Dr. Spergel on Apr. 4, and a final report is scheduled for Aug. 4 -- less than two months after the poverty grant is scheduled to expire June 30, Walsh said.
The investigator said that as of June 10, the OEO told him that they had received no report from Spergel. A final payment of $15,986 on the $79,000 contract is scheduled to be made Aug. 1, Walsh added.
Dr. Spergel is now at Tulane university, New Orleans, and could not be reached for comment on Walsh’s testimony.

“Practically Nothing Done”

Walsh said an investigation by his staff “indicated that practically nothing has been done under this contract.”

Walsh’s testimony brought an angry response from McClellan, who said:
“Something is wrong here. It seems to me that this is a terrific amount of money to be paid for only two reports on a grant of less than a million dollars.”
Then he added: “It doesn’t make sense, this squandering of American taxpayers’ money.”
Walsh said that on June 2, 1967, when the original $927,341 poverty grant to the two gangs was approved, the OEO indicated that an evaluation contract would be placed with an outside agency within 60 days. He continued:

“The purpose of this outside evaluation was to provide current information to the Office of Economic Opportunity as to the progress of the project, for use as a basis for cancellation if it appeared the program would not be successful.”
However, Walsh added, the contract was not executed until early this year, six months after the street gang project got under way.

“Peace Payoff” Charged

McClellan has charged the grant was used to enlarge and strengthen the membership of the two gangs. He said the operation of the program was turned over to gang leaders as a “payoff” to buy peace on Chicago’s south side streets.

The testimony then turned to another OEO grant in Chicago.

Walsh said a contract was made by The Woodlawn Organization [TWO] with the Urban League. It was planned to recruit 800 youths between the ages of 16 and 25 from the two street gangs, eventually to place them in jobs.

As of April 30, The Urban League had spent $45,597 of the $84,000 contract, said Walsh.


Unable to Fill Jobs

Only 83 trainees had been placed in jobs as of May 17, Walsh said. Fifty-three of these youths are still employed, while 30 have quit they jobs for various reasons, Walsh said.

The investigator told the subcommittee that The Urban League had advised The Woodlawn Organization that they had a total of 204 job openings, but were unable to fill these jobs from the ranks of the trainees, Walsh added.

Since the training program for the two gangs began, 499 youths have been recruited into the project, Walsh said. He added that 254 have dropped out of the program without completing training, 83 were placed in jobs, 2 returned to public schools, and 160 are still on the rolls.

Paid to Attend Classes

The program provides for payments of $45 a week to each trainee for attending classes for 5 hours daily, 5 days week, Walsh said. Trainees with dependents are paid additional allowances of $5 per week per dependent to a maximum of $10 plus the $45.

Trainees who live more than 3 blocks from one of the 4 centers established for the classes are paid an extra $3 a week for transportation. Thus a trainee could get a maximum of $58 a week for 25 hours of class attendance.

The senator said gang leaders and members were employed as supervisors and teachers in the education centers and it appears that “supervision and control of operations have been extremely inadequate.”
A large percentage of those hired as instructors have arrest records for serious crimes such as murder, rape, and strong-arm robbery, McClellan said.

The senator noted that one of the principal leaders of the Blackstone Rangers, Eugene Hairston, was convicted on May 29, 1968, of soliciting a group of teen-age gang members to murder three men. The crime occurred after the OEO grant, McClellan added.

Target of Criticism


Among the witnesses to be heard today are Winston P. Moore, superintendent of the Cook county jail and a former psychologist who worked with Chicago gangs, and Lt. Edward L. Buckney, in charge of the gang intelligence division for the Chicago police department.

Leaders of the Rangers, the largest and most notorious of the two Chicago gangs, are expected to be subpoenaed for appearance before the subcommittee. Although the Senate hearing is aimed at finding exactly how the $927,341 was spent on the Chicago gangs, it could prove to be embarrassing to the OEO, already a target of Congressional criticism, especially among southern senators and representatives.

Meet after Riots


Testimony is expected to disclose that a Chicago OEO leader organized a secret meeting between Negro militants from the Los Angeles Watts area and leaders of the Blackstone Rangers in the Pick-Congress hotel in Chicago last July 25.

Committee investigators said the meeting occurred just after the Detroit riots and was arranged by Jerome S. Bernstein of the OEO’s manpower division in the hope of heading off possible gang violence on Chicago’s south side that could spark rioting.

Mayor Daley, informed of the OEO sponsored meeting, reportedly was so angered that he phoned Sargent Shriver, head of the OEO at that time, to protest. Berstein subsequently was fired and has appealed to the federal civil service commission to get his job back.

Bernstein said that the purpose of the meeting was to get the California militants to persuade the Chicago gang to refrain from sparking violence.

The meeting was uncovered by a hotel security man who questioned the arrival of five poorly dressed Negroes.

Police questioned Bernstein and the youths. No formal arrest was made although the gang members were carrying guns, marijuana, and pep pills.

The Senate investigation found that leaders of the two gangs, few of whom even finished high school, were paid as much as $6,500 a year to serve as “instructors” for the education and employment opportunities program.

McClellan said that despite the alleged “payoff” made to the two Chicago gangs to buy peace on the city streets, there have been at least 28 killings involving the gangs this year alone.