-7 FRAUDS AND QUACKERY AFFECTING THE OLDER CITIZEN HEARINGS BEFORE THE SPECIAL COMMITTEE ON AGING UNITED STATES SENATE EIGHTY-EIGHTH CONGRESS FIRST SESSION Part 3.-Washington, D.C. JANUARY 17, 1963 Printed for the use of the Special Committee on Aging U.S. GOVERNMENT PRINTING OFFICE 94703 0 WASHINGTON: 1963 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington 25, D.C. -Price $1.00 f SPECIAL COMMITTEE ON AGING PAT McNAMARA, Michigan, Chairman GEORGE A. SMATHERS, Florida EVERETT McKINLEY DIRKSEN, Illinois CLAIR ENGLE, California BARRY GOLDWATER, Arizona HARRISON A. WILLIAMS, Ja., New Jersey FRANK CARLSON, Kansas MAURINE B. NEUBERGER, Oregon WALLACE F. BENNETT, Utah WAYNE MORSE, Oregon JACOB K. JAVITS, New York ALAN BIBLE, Nevada WINSTON L. PROUTY, Vermont JOSEPH S. CLARK, JR., Pennsylvania FRANK CHURCH, Idaho JENNINGS RANDOLPH, West Virginia EDMU!ND S. MUSKIE, Maine EDWARD V. LONG, Missouri WILLIAM G. REIDY, Staff Director JACK MOSKOWITZ, Oounael JOHN Guy MILLEa, Minority Counsel Part 1.-Washington, D.C., January 15, 1963. Part 2.-Washington, D.C., January 16, 1963. Part 3.-Washington, D.C., January 17, 1963. IH I TABLE OF CONTENTS CHRONOLOGICAL LIST OF WITNESSES Andrus, Dr. Ethel Percy, president, National Retired Teachers Association and the American Association of Retired Persons, accompanied by William C. Fitch, executive director, National Retired Teachers Asso- Page ciation and American Association of Retired Persons -265 Dixon, Hon. Paul Rand, Chairman, Federal Trade Commission; accom- panied by John N. Wheelock, Executive Director; Charles A. Sweeney, Chief, Division of Food and Drug Advertising; John Victor Buffington, assistant and legal adviser to the Chairman; and Fletcher G. Chon Assistant General Counsel, Federal Trade Commission -278 McCarthy, Hon Eugene J a U.S. Senator from the State of Minnesota 299 Larrick, Hon. George P., Commissioner; accompanied by W. B. Rankin, Assistant Commissioner; and Mr. Kinslow, Food and Drug Adminis- tration - 311 Cary, Hon. William L., Chairman, Securities and Exchange Commission; accompanied by Philip A. Loomis, Director, Division of Trading and Exchanges, Securities and Exchange Commission; and Arthur Fleischer, Jr., executive assistant to the Chairman, Securities and Exchange Com- mission -482 Parrott, Thomas, assistant director in charge of claims policy, old age and survivors insurance, Social Security Administration; accompanied by Alvin David, assistant director for program analysis; Miss Myrtle Helms; and Doyle Hagen of the staff, Social Security Administration 490 STATEMENTS Andrus, Dr. Ethel Percy, president, National Retired Teachers Associa- tion and the American Association of Retired Persons; accompanied by William C. Fitch, executive director, National Retired Teachers Asso- ciation and American Association of Retired Persons -265 Prepared statement - 275 Cary, Hon. William L., Chairman, Securities and Exchange Commission; accompanied by Philip A. Loomis, Director, Division of Trading and Exchanges, Securities and Exchange Commission; and Arthur Fleischer, Jr., executive assistant to the Chairman, Securities and Exchange Com- mission ----------------------------------------------- 482 Dixon, Hon. Paul Rand, Chairman, Federal Trade Commission; accom- panied by John N. Wheelock, Executive Director; Charles A. Sweeney, Chief, Division of Food and Drug Advertising; John Victor Buffington, assistant and legal adviser to the Chairman; and Fletcher G. Chon, Assistant General Counsel, Federal Trade Commission -278 Prepared statement -292 Fischer, Andrew F., O.D., administrative director, New Jersey Optometric Association Trenton, N.J., prepared statement -- 503 Greenspon, William, O.D., director, Department of National Affairs, Amer- ican Optometric Association, prepared statement - 502 Larrick, Hon. George P., Commissioner; accompanied by W. B. Rankin, Assistant Commissioner; and Mr. Kinslow, Food and Drug Administra- tion -311 Lutz, Karl B., prepared statement -_---------------- 504 McCarthy, Hon. Eugene J., a U.S. Senator from the State of Minnesota 299 Prepared statement --------- 300 Mondale, Walter P., attorney general, Minnesota, prepared statement, ap- pendixes A, B, and C -301 Parrott, Thomas, assistant director in charge of claims policy, old age and survivors insurance, Social Security Administration; accompanied by Alvin David, assistant director for program analysis; Miss Myrtle Helms; and Doyle Hagen of the staff, Social Security Administration -490 Prepared statement -------------------- - 497 Swenson, Mrs. Bennie Ree, Boca Raton, Fla., prepared statement -509 m I IV CONTENTS ADDITIONAL INFORMATION Articles entitled: "Food Facts Versus Food Fallacies," from Food and Drug Adminis- Page tration, Department of Health, Education, and Welfare -331 "Investigate Before You Invest," from the U.S. Securities and Ex- change Commission -488 "Over a Billion Dollars a Year Is Wasted on Cure-All Quackery- Beware," by George P. Larrick, Commissioner, Food and Drug Administration - _ 266 Letters from: Lutz, Karl B.. to Senator McNamara, dated January 21, 1963 ------- 504 Smith, Charlie T., Lafayette, La., to Senator McNamara, dated De- cember 30, 1962 - 515 Pamphlet entitled "Your Social Security Check," by the Social Security Administration, Department of Health, Education, and Welfare -494 Press releases from the Food and Drug Administration, Department of Health, Education, and Welfare, dated- May 5, 1961 - ------------------------------------------ 322 October 27, 1961 -323 November 27, 1961 - 324 December 7, 1961 -325 January 23, 1962 -326 February 2, 1962 -323 May 4, 1962 ---------------------------------------------- 325 May 20, 1962 -314 June 14, 1962 -320 June 21, 1962 ------------------------- 328 July 6, 1962 -327 August 3, 1962 -321 October 9, 1962 - 315 Recent enforcement actions in Federal courts involving food supplements - 443 FRAUDS AND QUACKERY AFFECTING THE OLDER CITIZEN THURSDAY, JANUARY 17, 1963 U.S. SENATE, SPECIAL COmmirrEE ON AGING, Washington, D.C. The committee met at 10 a.m., pursuant to recess, in room 4230, New Senate Office Building, Hon. Pat McNamara (chairman). Present: Senators McNamara, Randolph, and Muskie (acting chairman, presiding). Also present: Senator McCarthy. Committee staff members-iresent: William G. Reidy, staff director; Frank Frantz, professional staff member; Jack Moskowitz, counsel; John Guy Miller, minority counsel. Senator MUSKIE. The committee will be in order. We will proceed this morning with the witnesses scheduled. Our first witness is Dr. Ethel Percy Andrus, president of the Na- tional Retired Teachers Association and the American Association of Retired Persons. Is Dr. Andrus here? Would you come forward, please ? STATEMENT OF DR. ETHEL PERCY AINDRUS, PRESIDENT, NATIONAL RETIRED TEACHERS ASSOCIATION AND THE AMERICAN ASSO- CIATION OF RETIRED PERSONS, ACCOMPANIED BY WILLIAM C. FITCH, EXECUTIVE DIRECTOR, NATIONAL RETIRED TEACHERS ASSOCIATION AND AMERICAN ASSOCIATION OF RETIRED PERSONS Senator MusKIE. I notice that you have a prepared statement, Dr. Andrus. Dr. ANDRUS. Yes, sir. Senator MuUSUE. Is it your intention to read it? Dr. ANDRUS. Not entirely. Senator MusEE. You may present it in any way that you wish and in any case it will be printed in full in the record. Dr. ANDRUS. Thank you, sir. My name is Ethel Percy Andrus. I am president of the National Retired Teachers Association and the American Association of Re- tired Persons. These are two nonprofit, nonpolitical associations with a combined paid membership of more than 550,000 persons help- ing older persons help themselves. l would like at this time to present my fellow worker, William C. Fitch, the executive director of both of our associations. Mr. Fitch. 265 266 FRAUDS AND QUACKERY AFFECTING THE OLDER CITIZEN Mr. FITCH. Than you, Dr. Andrus. Dr. ANDRUS. I would like to commend the committee for its wisdom and vision in delving into the problem of exploitation of the aged. Nothing could be more invidious than the pressures that plague older persons and place their health in jeopardy and further deplete their reduced incomes. I appreciate this opportunity to share the information that our members have brought to our attention and to discuss some of the situations we have here encountered in the administration of our own program. The charlatans have been successful in the exploitation of older persons because many of the victims have been proud, have been em- barrassed, too embarrassed and too proud to admit that they have been unwisely led or have delayed exposing the quackery or fraud until it was too late to prosecute the offender, and so save themselves. The days of the medicine man are still very much with us in spite of all the research and scientific advances of our times. We were never more certain of this and the extent to which older persons had become victimized in the health field than we were fol- lowing the publication of an article in the August-September issue of our magazine Modern Maturity by the Commissioner of the U.S. Food and Drug Administration entitled "Cure-All Quackery." That was not the only article appearing. A page length and a little more than a page length was printed on food facts and food fallacies, and the mail fraud within the law, and another one in which we speak very definitely upon the administration of the food and drug services. (The article referred to previously follows:) OVER A BILLIoN DOLLARS A YEAR Is WASTED ON CuRE-ALL QUACKERY-BEWARE (By George P. Larrick, Commissioner of