TESTIMONY OF ROBERT E. McMILLEN, SPECIAL COUNSEL OF THE CAST IRON SOIL PIPE INSTITUTE; ACCOMPANIED BY DALE G. O'NEAL AND RICHARD C. MORRIS, DISTRICT MANAGERS OF THE INSTITUTE

Mr. McMILLEN. Mr. Chairman, my name is Robert E. McMillen, special counsel for the Cast Iron Soil Pipe Institute, whose main office is located at 2029 K Street NW., Washington, D.C. With me are Dale G. O'Neal and Richard C. Morris, both district managers of the institute.

Mr. Chairman, I have a prepared statement and request that it be included in the record.

Mr. KLUCZYNSKI. Without objection it is so ordered.

Mr. MCMILLEN. We are very grateful, Mr. Chairman, for this opportunity. We have a serious problem and it is very encouraging to find members of Congress who are willing to listen to this side of the story-part of which you have heard from a previous witness, Mr. Tobin-and really go ahead and do something about it.

It isn't a problem peculiar to Chicago or the State of Illinois, but this is certainly an appropriate setting. When it comes to good plumbing, one immediately thinks of the city of Chicago where, under your fine city administration, you have an outstanding plumbing code and capable contractors and journeymen and a high standard of plumbing work that are the envy of the Nation and the world.

I think that when we think of good plumbing in the city of Chicago, we must think of the late Stephen F. Bailey, for many years business manager of the Chicago Journeymen Plumbers Local 130, a fine man, who lent a great deal of dignity and prestige to his organization and to the plumbing trade.

We have three major points. One is that HUD in its so-called code reform activities, its effort to break down local codes is acting first of all illegally. But even granting that their activities are what Congress intended, they nevertheless discriminate in favor of plastic pipe and against its competitors, one of which we are.

If we can't have equal protection under the law, at least give us equal protection outside the law, which is to say, equal protection under a Federal agency operating outside the statutory limits fixed by Congress.

Our second major point is that HUD is forgetting the consumer. By the consumer in this case, we don't mean the wholesaler and indirectly the plumbing contractors who are our customers, but the home buyer who must live and pay out his hard money on a mortgage for 30, 40 years on a plumbing product that is installed. He is the ultimate consumer, the consumer who really matters.

And finally we think that the HUD program, even granting its legality for the sake of argument, is not a constructive solution, that it does not represent constructive progress toward a solution to the problem of how you get factory-built housing accepted and installed at the local job site. We believe that this problem calls, not for administrative action in the shadows, not for the use of some shadow government, such as the so-called model code organizations, but rather a full forthright facing of the problem by Congress, which is the legis

lative body of the United States. We also favor retention of inspection at the job site after the factory-built house is set in place.

We maintain a staff of representatives such as Mr. O'Neal and Mr. Morris. One of their major assignments is to go from city to city and county to county and secure acceptance of our products in the local plumbing codes. For many decades our competitors have done the same. This was the way it was done until HUD came on the scene telling local communities that they had to make their codes permissive, throw out their existing codes and substitute others of HUD's own choosing. And as I say, a result of this has been that HUD has been very, very active in promoting plastic pipe for drain, waste, and vent applications and they haven't been promoting our new developments-the innovations that our industry has come up with to meet the competition of DWV plastic pipe-I mean the CI No-Hub and CI compression gasket systems, which replace the lead and oakum method.

Mr. ROE. Is this a money-saving device for the consumer?

Mr. MCMILLEN. There are two devices or methods, both cheaper than the lead and oakum method.

In my prepared statement, I have called attention to two specific instances of HUD discrimination. One is Metropolitan Dade County, Fla. Miami and vicinity-where a plumbing contractor by the name of S. Frank Graves charged-the report is in your subcommittee filesthat HUD pushed plastic, bituminized fiber, asbestos cement, and concrete, and then later receded from pushing the three types other than plastic

But the report doesn't indicate that HUD promoted our product. And the State of Kentucky is even a more glaring example. It is a fait accompli, and is illustrated in the exhibits and attachments which I would like to submit and request that they be incorporated in the record.

Mr. KLUCZYNSKI. Without objection, it will be so done.

Mr. McMILLEN. We have just learned, Mr. Chairman, that as recently as 2 days ago, Wednesday, September 16, the Kentucky Plumbing Code Committee met in Frankfort to consider approval of the CI NO-HUB and CI compression gasket systems. Despite the presence of a quorum, the committee once again decided to postpone action. They have been giving us the runaround for the past 4 months. HUD moved heaven and earth to force acceptance of plastic pipe in Kentucky, but they have not so much as lifted a finger to help get our systems approved. This is absolutely unpardonable.

(The prepared statement follows:)

STATEMENT OF ROBERT E. MCMILLEN, SPECIAL COUNSEL, CAST IRON SOIL PIPE INSTITUTE

Mr. Chairman and Gentlemen of the Subcommittee, my name is Robert E. McMillen, Special Counsel for the Cast Iron Soil Pipe Institute, whose main office is located at 2029 K Street, N.W., Washington, D.C. 20006. With me are Dale G. O'Neal and Richard C. Morris, both District Managers of the Institute. The Cast Iron Soil Pipe Institute is a trade association whose members produce 95 percent of the total output of cast iron soil pipe and fittings in the United States. Our industry is characterized by a preponderance of small business firms and our customers are plumbing wholesalers and indirectly the plumbing contractors of America, two groups likewise characterized by a very high percentage of small businessmen.

Our appearance here today is for the purpose of giving further testimony on a matter set before you earlier this year, namely, the problems created for small

businessmen by the converted campaign of the U.S. Department of Housing and Urban Development to downgrade the building, plumbing, electrical and fire prevention codes of this nation. HUD is simply going all out to force every city and county having a Workable Program for Community Improvement to throw out its present codes and adopt other codes to HUD's liking as a necessary condition for receiving Federal loans and grants.

This creates enormous problems for producers of cast iron soil pipe. It creates enormous problems for other small businessmen who install our products in drain, waste and vent systems, and who have grown accustomed over the years to play a very large and very responsible role in the formulation of plumbing codes in their respective communities.

Mr. Chairman, we thank you for this opportunity. We are especially gratified that you have allowed us to testify at this hearing in the great city of Chicago, this bustling, friendly metropolis of the Midwest. Any city in the United States would have been an appropriate setting for this story, for it is recreated again and again in every city hall and every county court house in the land, whenever some uninvited bureaucrat from Washington enters upon his unhallowed mission to cheapen and devalue what a local community has created in its pursuit of happiness and fullness of life.

But surely, when the subject is good plumbing, there is no more appropriate place to examine the matter than here in the city of Chicago where, under the fostering hand of an excellent city administration, are found a plumbing code, a plumbing industry and a quality of plumbing work unexcelled anywhere in the world.

And surely also, Mr. Chairman, Chicago's leadership in plumbing is a living tribute to the memory of a great and good man, the late Stephen F. Bailey, for many years Business Manager of Chicago Journeyman Plumbers Local Union 130. If the plumbing trade ever deserved to be called humble, it can be no longer, for no walk of life can be called humble which has merited the lifetime dedication of a man like Steve Bailey.

THE ARGUMENT

Our Institute contends that HUD in its code-cracking activities:

1. Discriminates unfairly by pushing plastic pipe for drain, waste and vent (DWV) systems unfairly in compettion with our vastly superior systems, CI No-Hub and the CI Compression Gasket.

2. Victimizes the consumer.

3. Offers no constructive solution to the problems of factory-built housing and local codes, which call for action by Congress with retention of on-site inspection.

Certain preliminary observations may be in order.

First, we are not concerned with Operation Breakthrough and the authority of HUD to require exemptions from local ordinances for prototype projects under the so-called Anderson amendment, Section 417 of Public Law 91-152.1

The HUD code program which is part of the Workable Program requirement is founded on Sections 101 (a) and (c) of the Housing Act of 1949 as amended, 41 U.S.C. § 1451 (a) and (c).

Second, testimony was presented to this Subcommittee earlier this year by John P. Frank, an attorney in Phoenix, Arizona, to the effect that HUD is clearly exceeding its statutory authority and clearly acting contrary to the intent of Congress in requiring state and local governments to make changes in building and related codes as a condition precedent to obtaining recertification of their workable programs. Frank made the point that the authority contained in Section 101 (c) permits the HUD Secretary to require only a minimum standard housing code, which is something quite apart from a building, plumbing, electrical or fire prevention code. "Housing codes' differ in scope, purpose and underlying policy from building, plumbing, electrical and fire prevention codes."2 Obviously, HUD has chosen not to adopt this interpretation and has preferred instead to follow one of its own devising. It just so happens that the HUD interpretation opens the door to bureaucratic control over the contents, not only of all housing and building and related codes in the United States, but also all zoning codes and planning ordinances, and by control of such codes, the

1 Rural and Urban Problems of Small Businessmen," Hearings before the Subcommittee on Small Business Problems in Smaller Towns and Urban Areas of the Select Committee on Small Business, House of Representatives, 91st Congress, Second Session, Vol. 1, pp. 15-17.

2 Ibid., pp. 113-115.

entire building industry and the totality of all land use and development. There is much to suggest that such is the summit of the HUD ambition; we do not believe that Congress ever intended for a single moment to give HUD that kind of control, even over the building and related codes, to say nothing of the rest. As a third prefatory note, the Workable Program requirement itself has fallen into disfavor in high places. If a city does not have a certified workable program, or if recertification is denied, the city is ineligible for certain forms of federal financial assistance, frequently amounting to millions of dollars.

This adds up to a Federal carrot of monumental size. To the democratically elected local officiai the carrot is often a stone club. On June 17 of this year, the United States Conference of Mayors called for repeal of the Workable Program requirement.*

The President's Task Force on Low-Income Housing made the same recommendation in its final report. The Task Force said:

It becomes increasingly apparent that the concept of the workable program, though conceived with constructive intent, is in practice all too often a barrier to getting action on housing for the very poor. Also, local approval can and often does prevent the use of federal programs-public housing, rent supplements and leasing-where they are urgently needed.*

Since the Workable Program defeats the purpose of providing low cost housing for the poor, in the estimate of President Nixon's own Task Force, we join the Conference of Mayors and the Task Force in calling for its speedy repeal,

Hard experience of the facts of life in Washington suggests that this may not happen tomorrow and that HUD will not easily let go of a program which holds the key to control over so vast and important a part of American life.

In that event, our position is-and we are going to be very inflexible about this that HUD must exert as much effort to promote our CI No-Hub and CI Compression Gasket systems as it does to promote approval of plastic pipe for drain, waste and vent (DWV) application. Exhibits are attached for the use of the Subcommittee and inclusion in the record.

The technology of our two methods of joining cast iron soil pipe will be explained more fully by my colleagues. Briefly, both the CI No-Hub method and the CI Compression Gasket method substitute a neoprene rubber gasket in the place of the time-honored lead and oakum method of joining cast iron soil pipe. In addition, CI No-Hub makes use of a stainless steel clamp. Both are cost-saving substitutes for the lead and oakum method, and each in its own right constitutes a response of the cast iron soil producer to the challenge posed by cheaper plastic substitutes.

Our Institute maintains a staff of field representatives, one of whose duties is to strive constantly for acceptance in local codes of both the CI No-Hub and CI Compression Gasket system. Until HUD intruded itself into the plumbing code picture, this was the traditional method by which any plumbing or other building material producer obtained code approvals for his products. There is this difference, however, that we consider the lead and oakum method the safest, surest and highest quality method. Where a city or county rejects our application for code approval of the newer methods, we keep trying but we do not run off to Washington and beg Big Brother to violate that local codeunless Big Brother is bent on violating that code in the interest of our competitors.

Today we are faced with a situation in which HUD is coercing local governments to approve plastic pipe for DWV use, but is not at the same time extending any effort on behalf of our own CI No-Hub and CI Compression Gasket systems. This is wrong. While our industry does not pay as much money in taxes as the giant oil, chemical and rubber manufacturers who dominate the plastic pipe industry, we do pay as much as we are required to pay under the law and we demand in return equal protection under the laws. When an executive agency is operating outside the authority conferred upon it by Congress, and in violation of the intent of Congress, and we are getting hurt, then we are going to demand equal protection outside the law.

If HUD is going to favor one DWV piping material over others, then clearly it should be pushing CI No-Hub and the CI Compression Gasket, since these cast

3 "Housing and Urban Development Legislation of 1970," Hearings before the Subcommittee on Housing and Urban Affairs of the Committee on Banking and Currency, United States Senate, 91st Congress, Second Session, Part 1. p. 560.

"Toward Better Housing for Low Income Families." The Report of the President's Task Forceon Low Income Housing,, May 1970, p. 11, proposal no. 23.

iron systems are serviceable and adequate to protect the public health and safety and welfare, whereas the various varieties of plastic are not.

Two instances have come to our attention in which HUD clearly pushed plastic pipe and not our No-Hub and Compression Gasket or apparently any other competitive material. One is Metropolitan Dade County, Florida, where a plumbing contractor by the same of S. Frank Graves furnished this Subcommittee with an extensive report charging unethical collusion between between HUD regional officials in Atlanta and a representative of the plastic pipe industry. That report is in the Subcommittee files and we request that it be made part of the record of this proceeding. Graves charges, among other things, that an official in HUD's regional office in Atlanta pushed plastic pipe, but not competing materials such as bituminized fiber, asbestos cement, and concrete. He cites a letter of April 17, 1969 from the official in question, urging approval of all four kinds of nonmetalic pipe and fittings in DWV systems. He charges that HUD later receded from insisting on approval of the three types other than plastic.

Representatives of those three other industries are welcome to speak for themselves. Our information is that HUD at no time insisted on a code approval for CI No-Hub and the CI Compression Gasket. Actually, our two methods do enjoy in Dade County what is known as a product approval. That is to say, the appropriate administrative authority will permit their installation, but they are not specifically approved in the text of the code. The same kind of product approval was extended to plastic, and the time limitation on that approval was removed at the insistence of HUD. The present situation therefore is that, while it is perfectly lawful to use plastic pipe and fittings in Metropolitan Dade County, this is not enough to please HUD. Recertification of the county's Workable Program is being held up while HUD holds out for a full code approval for plastic.

Gentlemen, is it indecent of us to hope that HUD, even while it contributes its share to the general loss of respect for law and order by playing fast and loose with the intent of Congress, will do the same for us? Jobs are at stake. Thousands of hard dollars are at stake. Are we asking too much?

HUD's plastic pipe promotion program has meant millions of dollars to that industry. Actually no amount of private money could buy what HUD has done for plastic, because no private industry, by itself, is in a position to say to every local community in the country: Do thus and so or lose millions of dollars in Federal aid.

It is really a form of welfare for the undeserving rich. A glance at roster of plastic pipe producers reveals the names of some real giants of the petrochemical industry-Mobil, Dow, Monsanto, Goodrich, Goodyear, Uniroyal-to name a few. These names represent the kind of economic power which can influence the course of government. Add the traditional influence of the homebuilder with HUD, and the fascination of that agency with factory-built housing, and our little cast iron soil pipe industry is simply up against forces it is powerless to cope with. This is why we turn to your committee as a group interested in helping small business. Another glaring example of HUD discrimination is the State of Kentucky, where refusal of the legislature to make one of HUD's favorite model codes, the BOCA Basic Plumbing Code, the state plumbing code merited a letter of concern from Secretary Romney to the Governor. The Secretary threatened to cut off federal grants to Kentucky communities unless state administrative agencies either replaced the existing state plumbing code with a HUD-approved model or revised its code to eliminate provisions HUD did not approve of.

The HUD regional office in Atlanta then served the State Department of Health with a list of 38 specific changes it was demanding in the Kentucky code. The net result as of the present moment is that plastic pipe has been approved for DWV whereas CI No-Hub and the CI Compression Gasket have not. This is an unbelievable, outrageous, intolerable abuse of a federal trust. It cries out loud for immediate rectification to every taxpaying American citizen who derives any of his income by being a stockholder, official or employee of a cast iron soil pipe manufacturing firm, or who otherwise has any economic dependence upon the health and prosperity of our industry.

The case is documented with three published articles which are submitted for the record. We solicit your assistance in bringing forceably to the attention of HUD that in all common decency and fair play it has a clear duty either to:

1. Promptly inform appropriate Kentucky officials that the requirement of making or retaining any plumbing code changes as a condition of having Workable Programs in that state recertified has been rescinded; or