Mr. FRANDSEN. The total work that was done during that period of time did not exceed $3,000 in your estimation, is that right? Mr. GIBSON. That's right.

Mr. FRANDSEN. You also indicated that during the staking operation Mr. Schauss told you to get the wood in the ground because he was concerned about other oil companies coming in and staking the area, and then said that you would come back and finish up later. Is that correct?

Mr. GIBSON. That is correct.

Mr. FRANDSEN. Did anyone ever come back and finish them by properly staking the claims?

Mr. GIBSON. No sir; not to my knowledge.

Mr. FRANDSEN. Were you out there in the succeeding years? Mr. GIBSON. Yes.

Mr. FRANDSEN. You would have known if anybody came back and completed the staking?

Mr. GIBSON. Yes.

Mr. FRANDSEN. Did anybody ever come back with the drilling rig and do the required amount of validation work?

Mr. GIBSON. No.

Mr. FRANDSEN. Thank you, Mr. Chairman. I have no further questions.

Mr. LUKEN. Mr. Wunder?

Mr. WUNDER. Mr. Gibson, you testified that during the course of one of the conversations that you had with Mr. Schauss in the last 3 weeks, he told you not to mention Utah. Is that correct?

Mr. GIBSON. That is correct.

Mr. WUNDER. Did he tell you why you were not supposed to mention Utah?

Mr. GIBSON. No.

Mr. WUNDER. That is all he said, "If you talk with these guys, don't mention Utah?"

Mr. GIBSON. That's right.

Mr. WUNDER. Didn't you ask him what was wrong about Utah? Mr. GIBSON. I didn't ask him.

Mr. WUNDER. Another aspect of your testimony was that the Mexican crew that you had were illegal aliens, is that right?

Mr. GIBSON. Yes. I had 9 at one time and 11 out there at one time.

Mr. WUNDER. How did you know that they were illegal aliens? Mr. GIBSON. I hired them.

Mr. WUNDER. Where did you hire them?

Mr. GIBSON. In Casper, Wyo.

Mr. WUNDER. Did you ask them "Are you illegal aliens?"

Mr. GIBSON. I didn't ask them because I can't speak Spanish, but I had a boy with me who could. Truthfully speaking, it would not have made any difference because I could not use the hands around Lander and Casper, Wyo. All I could get there were wineheads and drunks. These were the best hands I could get ahold of. Mr. WUNDER. I can understand that, but you testified that they were illegal aliens. How do you know that they were illegal aliens? Mr. GIBSON. Most of them I mailed their checks for down in Chihuahua. They were from Chihuahua. Some of them were out of Chihuahua City. I would mail them the money and I would cash

their checks for them. They couldn't sign them and they had no drivers' licenses or nothing like that, so we would cash their checks. I helped them get money orders so that they could send money home. They would only keep $15 or $20 and send the rest of it home. They were being paid $140 a week.

Mr. WUNDER. You were paying them by check?

Mr. GIBSON. Yes.

Mr. WUNDER. You concluded that they were illegal aliens because you were helping to send money to their families in Mexico? Mr. GIBSON. Yes. They were eventually picked up in Utah by the immigration authorities in Bluff, Utah.

Mr. WUNDER. Oh, I see. That's how you know, by virtue of the fact that they were picked up later?

Mr. GIBSON. Yes, they were picked up by the Immigration authorities.

Mr. WUNDER. All of them?

Mr. GIBSON. Yes.

Mr. WUNDER. They were sent back to Mexico?

Mr. GIBSON. Right.

Mr. WUNDER. I want to go back to the map that we talked about earlier. That is the one that was in your safety deposit box.

When Mr. Schauss gave you this map, were you there when he prepared this map?

Mr. GIBSON. Yes.

Mr. WUNDER. You watched him do it?

Mr. GIBSON. Yes.

Mr. WUNDER. Upon completion or during the course of his making this map, he told you to go out and perform what was indicated on the map and to do what the map said to do? Is that right?

Mr. GIBSON. He told me what?

Mr. WUNDER. Let me try it this way.

You and he were together. He was drawing a map for you. Is that right?

Mr. GIBSON. Right.

Mr. WUNDER. What did he tell you he wanted you to do at that time?

Mr. GIBSON. He picked out a certain depth that he wanted some cuttings put in.

Mr. WUNDER. Did he tell you why he wanted you to do this? Mr. GIBSON. I did not ask him.

Mr. WUNDER. What did he tell you?

Mr. GIBSON. No.

Mr. WUNDER. You didn't ask him, "Why do you want me to do this?"

Mr. GIBSON. I wasn't interested in it. I didn't want no part of it. Mr. WUNDER. You didn't ask him why he wanted you to do this? Mr. GIBSON. No.

Mr. WUNDER. Is there anything special about this particular claim that you know of that would interest us or that we should know?

Mr. GIBSON. I can quote one thing. I believe they found about half an inch or an inch of ore in this hole and that is as far as I know.

Mr. WUNDER. To your knowledge was he showing this particular claim to another person?

Mr. GIBSON. No. All I know is what they logged.

Mr. WUNDER. Did anybody subsequently buy this claim or take an option on it, to your knowledge?

Mr. GIBSON. No.

Mr. WUNDER. Thank you, Mr. Chairman. I have no further questions.

Mr. LUKEN. If you did what that map directed you to do, would that fool a geologist?

Mr. GIBSON. No. It would fool no one. It would be almost stupid to do something like that because a major company would not touch it with a 10-foot pole. If they bought it, they would drill around a hot hole.

Mr. LUKEN. So a buyer who knew what he was doing would be able to see right through it. Is that right?

Mr. GIBSON. Yes;

Mr. LUKEN. But an unsuspecting, innocent, untrained buyer might be fooled. Is that right?

Mr. GIBSON. That is right.

Mr. LUKEN. Somebody like some of us up here?

Mr. GIBSON. Well anybody who bought any part of that would know what they were doing.

Mr. LUKEN. It was eventually purchased. Did you know that? Mr. GIBSON. If it was, I don't know anything about it.

Mr. LUKEN. It was purchased by Washington Public Power along with many other claims.

Is there anything further?

Mr. Frandsen?

Mr. FRANDSEN. Thank you, Mr. Chairman.

I have one further question for Mr. Gibson. You are being presented by the staff with a map of Wyoming showing the Red Desert area with certain claim groups located on it.

For the record, I will read the names of the groups and could you identify whether you were the individual who staked or supervised the staking of those claim groups?

Mr. GIBSON. Yes.

Mr. FRANDSEN. The Pic, the Cow claims, the MK claims, the Poco claims, the M claims, the Poe claims, the Zig claims, the Mat claims, the Rob claims, the R claims, the Ben claims, the C claims, the Charley claims, the SL claims, the Bill claims, the Joe claims, the RK claims, the To claims. Did you stake all of those claims? Mr. GIBSON. Yes.

Mr. FRANDSEN. Did you also stake the alternate claim groups sections?

Mr. GIBSON. There is one correction there. On the Mat claimswas that mentioned?

Mr. FRANDSEN. Yes.

Mr. GIBSON. I staked only part of those.

Mr. FRANDSEN. Yes, I see.

Did you also particiate in the staking of what is known as the alternate claim groups which were the railroad sections?

Mr. GIBSON. Yes.

Mr. FRANDSEN. I would note for the record that the claims group you have identified total approximately 18,000 claims. Thank you. Excuse me, I have just one more question.

Did you select the names of the claim groups, Mr. Gibson?
Mr. GIBSON. Yes.

Mr. FRANDSEN. No further questions.

Mr. LUKEN. The present witness will be excused for the moment, but he is subject to recall by further notice. That means that you are still under subpena and that we may notify you at a later time to come in without issuing another subpena. That is what that

means.

But for the present time and until further notice, you are excused.

We thank you very much for your testimony.

Mr. LUKEN. Mr. Schauss. We will recall you again.

In case I shouldn't mention it later, what I have just said about the previous witness applies to the other witnesses who are here under subpena. When you are excused today, you will be excused until further notice, but you will not be released from the subpena as yet. Any questions about that?

TESTIMONY OF RALPH SCHAUSS, CHAIRMAN OF THE BOARD, FREMONT ENERGY CORP., DENVER, COLO., ACCOMPANIED BY THOMAS J. CONSTANTINE, COUNSEL-Resumed

Mr. CONSTANTINE. I think Mr. Schauss was planning on returning to Wyoming today. Does that mean that you want him to stay? Mr. LUKEN. No, it doesn't. It means that he is still under subpena, and we will give him a reasonable time to appear upon further notice but there will not be another session today. At least at this time we do not anticipate that we will have another session scheduled tomorrow or Monday or in the near future.

Mr. ATKISSON. I want to remind you that you are still under oath.

In view of the testimony you have just heard from Mr. Gibson, you stated that he had worked for you originally having been hired by Mr. Matlock. He left your employ, and he further stated that he did not follow the legal requirements in staking thousands of claims in the Red Desert area on your behalf. He filed an affidavit for assessment work that was not performed and the rest of the statements he has made, so would you now care to correct your own testimony as to any material fact.

Mr. SCHAUSS. I would like to explain some things that have been left unsaid.

Mr. ATKISSON. I think we should give you that opportunity.

Mr. SCHAUSS. First of all in hiring Mr. Gibson, we realized that he would be working mostly unsupervised. My other associate, Mr. Stevens, who in fact never went to the field, was concerned about this.

Mr. Gibson was working under contract. He gave us an affidavit that all of the claims that were staked were properly staked, and he was given a bonus and an interest and a royalty in the property. Mr. ATKISSON. I take it then, Mr. Schauss, that you are denying categorically ever having told him "not to worry about" it when he

brought it to your attention that the claims were improperly staked?

Mr. SCHAUSS. Again it comes back to what "properly staked" means. It is normal when you are staking property in order to keep your competitor out, to put your discoveries up first.

Mr. ATKISSON. So you are conceding then that you only put in two stakes when seven were required?

Mr. SCHAUSS. I am not conceding that.

Mr. ATKISSON. How many stakes did you have put in there? Mr. SCHAUSS. I never gave him any specific instructions. He did eventually give us an affidavit stating that all the work was properly done.

But it is normal to put up a discovery post and then later come back and put in the corners and other things.

Mr. ATKISSON. How much later?

Mr. SCHAUSS. You have 60 days to do this within this period of time.

Mr. ATKISSON. Did you do it within the 60 days?

Mr. SCHAUSS. If Mr. Gibson did it or not, I cannot swear to it. Mr. ATKISSON. He also testified that you went out there once or twice a month to supervise him. Are you denying that?

Mr. SCHAUSS. Oh, yes. I went out there several times. Most of my time was devoted to prospecting and figuring out areas to stake and walking canyons and this type of thing. I was also making scintillator readings and a certain amount of mapping and this sort of stuff.

Mr. ATKISSON. So you didn't look at the claims he was staking, is that right?

Mr. SCHAUSs. The claims that I saw him stake I saw nothing improper because here were the discoveries. You could look down a line of rows and here was a big line row of discoveries with a notice on them and so forth.

Mr. ATKISSON. Look, you could readily see, being out there, whether or not the claim had seven stakes on it or two, couldn't you?

Mr. SCHAUSS. You might have a row of discoveries that had only been put in there for a week and then may come back later on-6 weeks, or 5 weeks, or 2 weeks later-and put the sides, centers and ends in.

Mr. ATKISSON. Mr. Schauss. You, yourself, just said that you have 60 days to complete the work. Was it done or was it not done? Of your own personal knowledge was it?

Mr. SCHAUSS. I told those two gentlemen, those two investigators, several weeks ago that I would not and could not state that every claim was properly staked and every claim was properly valid because I could not supervise it.

Mr. ATKISSON. Would you accept the figure that 5 percent were? Mr. SCHAUSS. It was much more than 5 percent because I saw them.

Mr. ATKISSON. Did you ever tell Mr. Gibson not to worry-first of all, did he ever approach you and indicate to you that the staking was being done improperly? He just testified to that under oath.

Mr. SCHAUSS. It is customary to walk claims with a compass and put the post in. Eventually, if you ever want to find ore, then you