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INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
HEARINGS'-—'-^
BEFORE^THK . . ,
SELECT COM&ITTEE
ON IMPEOPEli ACTIYITIES IN THE
LABOR OR MANAGEMENT FIELD
EIGHTY-FIFTH COXGRESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 74, 85TH CONGRESS
APRIL 24, MAY 8, 9, 10, 13, 14, 15, 16, 17, AND JUNE 4, 1957
PART 7
Printed for the use of the Select Committee on Improper Activities in the
Labor or Management Field
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1957
Boston Public Library
Superintendent of Documents
JUL 1 8 1957
SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABOR OR
MANAGEMENT FIELD
JOHN L. McCLELLAN, Arkansas, Chairman
IRVING M. IVES, New York, Vice Chairman
JOHN F. KENNEDY, Massachusetts KARL B. MDNDT, South Dakota
SAM J. ERVIN, Jh., North Carolina BARRY GOLDWATER, Arizona
PAT McNAMARA, Michigan CARL T. CURTIS, Nebraska
Robert F. Kennedy, Chief Counsel
Ruth Yodng Watt, Chief Clerk
n
CONTENTS
Area: Portland, Oreg.; Seattle, Wash.
Page
Appendix 2443
Testimony of —
Adlerman, Jerome S 2236
Beck, Dave, Sr 2038,2374
Beck, Dave, Jr 2418
Bellino, Carmine S 2135,2232,2309,2324,2338,2369
Burke, A. M 2289,2310
Childres, Mary 2006
Condon, Arthur 2283
Duffv, LaVern J 2:i51
Fields, Raymond H 2338
Fruehauf, Roy - 2197,2240
Gassert, Norrhan 2357,2407
Hedlund, Donald 2129,2163
Ingamills, Dwight David 2071
Krieger, Stewart O 2047
Landa, Alfons B 2255
Levine, Irving J 2058
Linton, Jess W 2189
Loomis, Fred P 2104
McDonald, Donald D 2358
McEvoy, Joseph 2430
Miniellv, George 1992,2013
Newell,^ George 2315,2324
Salinger, Pierre G 2072
Salisbury, Franklin C 2343
Seymour, B. M J 2212
Sullivan, Mortimer Allen 2216
Weeks, Kathleen Lucille 1999
Wilson, John L 2083
EXHIBITS
Introduced Appears
on page on page
136. Statement of Kathleen Weeks as made on March 9, 1957_. 2006 2443-
137. Teamster funds expended through Stewart Krieger in con- 2450
nection with operation of private companies in which
Dave Beck was interested 2058 (**)
138. Telegram dated January 15, 1947, ^to Mr. Carroll, execu-
tive office, Anheuser-Busch Brew^ery, signed by Dave
Beck 2074 (**)
138 A. Telegram dated January 16, 1947, to Dave Beck, Alcazar
Hotel, Miami, Fla., signed by J. J. Carroll, vice presi-
dent, Anheuser-Busch 2074 (**)
138B. Letter dated April 24, 1947, to Irving J. Levine, K. & L.
Beverage Co., Seattle, Wash., from J. J. Carroll, vice
president and sales manager of brewery division,
Anheuser-Busch 2075 (**)
138C. Interoffice memorandum of Anheuser-Bush, dated June
22, 1948, from J. J. Carroll, to Mr. W. L. Suj^cott, sub-
ject: K & L Beverage Co 2076 2451-
138D. Interoffice memorandum of Anheuser-Busch, dated May 2452
23, 1950, from Jay R. Rideout to Earl Memory 2077 2453
138E. Interoffice memorandu.m of Anheuser-Busch dated De-
cember 6, 1 950, from Jay R. Rideout to John Flannigan. 2078 2454-
2455
IV
CONTENTS
EXHIBIT S— Continued
Introduced
on page
138F. Interoffice memorandutn of Anheuser-Busch, dated Octo-
ber 11, 1950, from Jay Rideout to John Flannigan, sub-
ject: K. & L. Beverage Co. operations 2078
138G. Handwritten notes of a meeting found in the files of the
Anheuser-Busch, Inc., with the initials ' J. F." 2080
138H. Interoffice memorandum of Anheuser-Busch, dated Octo-
ber 17, 1950, from Jay R. Rideout to John Flannigan_-_ 2080
1381. Interoffice memorandum of Anheuser-Busch, dated
November 20, 1950, from Holland B. Thomas to John
Flannigan, subject: Seattle, Wash., territory 2080
138J. Interoffice memorandum of Anheuser-Busch, dated
November 10, 1950, from Jay R. Rideout to Holland
B. Thomas, subject: Wholesaler change, Tscoma.
Wash 2080
138K. Interoffice memorandum of Anheuser-Busch, dated
November 22, 1950, from John Flannigan to Holland
B. Thomas, subject: Seattle, Vfash 2081
138L. Letter dated March 4, 1952, from Roy Lanphere, credit
department, Anheuser-Busch, to Irving Levine, Iv. &
L. Beverage Co 2082
138M. Interoffice memorandum of Anheuser-Busch, dateri
June 10, 1952, from Jay R. Rideout to John Flanigan,
subject: Shipments, territory No. 48 2082 246';
139. Memorandum dated October 16, 1952, to E. Kalbfleish 24(
signed by R. A. Rawozza of the tax department re ac-
quisition of B & B Distributors, Inc 2103 24(
140. Handwritten letter dated September 16, 1953, to Dave
Beck from Fred P. Loomis re Burke, Hession & Don
conversation with regard to reentering tlie mortgage
business 2109 (**)
141. Handwritten letter undated from Dave Beck to Fred P.
Loomis in reply to letter of September 16, 1953 2111 (**)
142. Letter dated October 22, 1953, to Fred P. Loomis from
Benjamin Levinson, president, Michigan Mortgage
Corp., re purchase of Government-insured mortgages. _ 2114 24'
142A. Letter dated October 22, 1953, to Dave Beck from Ben-
jamin Levinson, president, Michigan Mortgage Corp.,
re purchase of Government-insured mortgages 2114 247!
143. Memorandum dated December 3, 1953, to Dave Beck 24'
from Fred P. Loomis 2118 247:
144. Page taken from the loan proposal showing correction 24'
made in financing fee in connection with construction
of Hawaiian Towers 2122 24^
145. Memorandum of telephone conversation dated February
5, 1955, between Fred Loomis and Don Hedlund re
financing fee in connection with proposed Honolulu
loan 2123 (**)
146. Letter dated February 10, 1955, from Fred Loomis to
Dave Beck re Honolulu loan application 2124 {**)
147. Letter dated February 16, 1955, from Dave Beck to Fred
Loomis accepting Mr. Loomis' resignation as adviser__ 2125 247(
148. Document dated September 10, 1954, appointing Dave 24';
Beck to do the purchasing of mortgages for the team-
sters 2133 24'
149. Application for approval as FHA mortgagee, dated
October 16, 1953, signed by National Mortgage Co.
by Sherman S. Stephens. -__"' 2133 247t
150. Letter, undated, to Sherman Stephens, National Mort- 24J
gage, from Dave Beck, re mortgage loans 2134 24?
151. Letter, undated, to Sherman Stephens, National Mort-
gage, from Dave Beck, re mortgage loans 2134 245
152. Ivetter dati'd Octol)er 16, 1953, to Sherman Stephens from
Dave Beck re approval of a line of credit for National
Mortgage 2135 (**)
CUNThNTS V
EXHIBITS— Continued
Introducod Appears
on page on page
Memorandum for credit file dated November 3, 1953,
found in the files of the First National Bank of Seattle. 2135 2483
lietter dated December 31, 1953, from Don lledlund to
Dave Beck reference to loan purchasc^d for the Inter-
national Brotherhood of Teamsters 21 38 {**)
Bill rendered by Don Hedlund, dated December 31, 1953,
and check No. 9135 showing amount paid 2139 2484-
Three checks from the Investment Co. payable each 2485
S2,500 to Dave Beck, Simon Wampold, and Don
Hedlund 2140 2486-
Check No. 26504 dated December 22, 1953, from Melvin 2488
F. Lanphar & Co., mortaiage bankers, Detroit, pavable
to the Investment Co. in the amount of $7,523.34 2141 2489
I^etter dated Novemxber 24, 1953, from Sherman S.
Stephens, secretary-treasurer. National Mortgage,
Inc., to Dave Beck, re acquiring GI mortgage loans___ 2141 2490-
Note to Mr. Mullenholz, dated Januarv 5, 1954, signed 2491
by Marcella Guiry, Mr. Beck's secretary !„__ 2142 2492
Letter dated November 2, 1953, to John F. English and
Dave Kaplan from Dave Beck re Joseph McEvoy as a
one-third stockholder in the National Mortgage Co 2142 2493
Letter dated November 6, 1953, from John English to
Dave Beck re approval of the use of National Mortgage
Co. in placing and servicing of mortgage loans 2142 2494
Letter dated November 6, 1953, from David Kaplan to
Dave Beck re approval of the use of National Mortgage
Co. in placing and servicing of mortgage loans 2142 2495
]\lemorandum dated October 29, 1953, to Dave Beck and
Simon Wampold re the Investment Co 2143 2496
Partnership agreement, dated September 1953, between
Don Hedlund, Dave Beck, and Simon Wampold 2143 2497-
Summarj' of transactions on purchase of loan from 2500
FNMA, dated September 30, 1954 2145 2501
General ledger sheets of the Investment Co. account on
the ioooks of National Mortgage, Inc 2145 2502-
Sellers statement, purchasers statement, audit' statement, 2503
and certificate of loan disbursement relating to Arthur
E. Cooper loan from teamsters through National Mort-
gage, Inc 2146 2504-
165. Three checks dated November 5, 1954, payable to Dave 2508
Beck, Don Hedlund, and Simon Wampold each in the
amount of $4,308.12 2149 250^
166. Letter dated August 22, 1956, to Henry Roine, National 2511
Mortgage, from William T. Mullenholz, comptroller, re
teamsters' purchase of 42 real estate contracts from
B & V Development Co 2155 (**)
167. Letter dated July 26, 1954, from Don Hedlund to Thomas
Flynn, chairman, eastern conference, re policy on Pon-
tiac automobile 2166 2512
168. Letter dated December 2, 1955, from Don Hedlund to
Dave Beck enclosing check in the amount of $175,000
covering mortgage loan 2174 (**)
169. Affidavit of Vincent D. Miller, Sr., of Seattle, Wash 2176 (**)
170. Letter dated April 26, 1955, to Edward F. Lambrecht,
Lambrecht Realty Co., Detroit, from Dave Beck, re
purchase of $759,000 of VA loans; letter dated June 6,
1955, to Edwarcl Lambrecht from Dave Beck; letter
dated August 5, 1955, to Don Hedlund from Edward
Lambrecht; memorandum dated September 19, 1955,
to Henry Roine from Don Hedlund re T. J. Bettes Co.
checks; letter dated October 3, 1955, from Don Hed-
lund to Max L. Bates of T. J. Bettes Co 2177 2513-
2520
VI CONTENTS
EXHIBITS— Continued
Introduced Appi
on page on p
171. Earnest money receipt and agreement dated April 21,
1954, signed by Linton Construction Co.; void check
for $1,000 payable to Bob Wetter Realty Co.; affidavit
and real estate sales tax receipt of National Mortgage
Co 2191 255
172. Check No. 2044 dated April 11, 1955, in the amount of 21
$163,215 payable to Bert Seymour signed U. H. Roine,
National Mortgage, M'ith notation "apply on Dave
Beck note" 2221 2t
173. Chart showing involvement of Brown Equipment Co.,
Manufacturers Trust Co., Roy Fruehauf, Associated
Transport Co., and Dave Beck in the loan of $200,000- . 2224 2t
174. Toy truck modeled after Fruehauf trailer trucks manu-
factured i)j' Miller-Irouson Co. and sold through the
Union Merchandising Co 2232 (*)
175. Letter dated November 14, 1953, to secretaries of all local
unions signed by Dave Beck, re to}- trucks and adver-
tisement printed in the International Teamsters (union
paper) on December 1953 promoting sale of tov
trucks 1 2237
176. Telegram dated December 14, 1953, from Dave Beck to
Jack Hemingway, local 98, re toy trucks 2237
177. Telegram dated December 9, 1953, from Dave Eeck to
Jack Hemingway, local 98, re toy trucks 2238 (**)
178. Telegram dated December 11, 1953, from Dave Beck to
Gordon Conklin, Joint Council 34, St Paul, re tov
trucks -■ ■_ 2238 (**)
179. Telegram dated December 11, 1953, from Dave Beck to
Frank H. Ranney, local 200, IMilwaukee, re toy trucks._ 2239 (**)
180. Letter dated October 29, 1954, to Raymond Cohen, local
107, Phialdelphia, from Dave Beck", re tov trucks 2240 251
181. Letter dated October 29, 1954, to Larry McGinley, Joint
Council 73, New-ark, N. J., re toy trucks 2240 25!
182. Letters dated October 29, 1954, from Dave Beck to
different local unions regarding the promotion of tov
trucks _■_ 2240 (*)
183. Letters dated January, February, March, May, and June
1956 to Roy Fruehauf, Raoul Massardy in the Paris
cffice, and replies to and from Dave Beck in connection
with furnishing car and chauffeur for Dave Beck's niece
to tour Europe 2243 (*)
184. An itemized account of the cost of services furnished Dave
Beck and members of his family by Fruehauf France. _ 2244 (*)
185. Telegram dated May 23, 1956, to Roy Fruehauf from F. V.
Bistrom 2245 25:
185.'^. Letter dated September 6, 1956, from Dave Beck to Roy
Fruehauf, re use of trailer for Sunset Distributing Co_- 2245 251
186. Promissory note dated Jime 22, 1954, to order of Fruehauf
Trailer Co. for $175,000 with interest, signed Brown
Equipment & Manufacturing Co 1 2248 25!
187. Letter dated December 8, 1953, from Alfons Landa to
Dave Beck, re Fruehauf Foundation buving Fruehauf
stock .' 2266 25;
188. Newspaper clipping from the Chicago American dated
March 31, 1955, indicating teamsters had organized
Montgomery Ward 2276 25;
189A. Memorandum dated June 28, 1955. re Fruehauf-Boston
strike from the file of Alfons Landa 2280 25;
189B. Memorandum dated June 29, 1955, re Fruehauf strike
from the file of Alfons Landa 2280 25;
189C. Memorandum dated July 5, 1955, re Fruehauf-New
England strike from the file of Alfons Landa 2280 25;
CONTENTS Vn
EXHIBITS— Continued
Introduced Appears
on page on page
189D. Letter dated August 2, 1955, from Arthur D. Condon to
Wallace N. Barker, vice president, Fruehauf Trailer
Co 2280 2539
189E. Memorandum dated August 11, 1955, re Fruehauf from
the file of Alfons Landa 2280 2540
189F. Memorandum dated August 15, 1955, re Fruehauf from
the file of Alfons Landa 2280 2541
189G. Memorandum dated August 17, 1955, re Fruehauf from
the file of Alfons Landa 2280 2542
190. Memorandum dated April 12, 1951, to H. W. Brower from
A. M. Burke, manager, mortgage loan department, re
borrower Dave Beck and Dorothy Beck 2294 2543
191. Memorandum dated March 14, 1955, to H. W. Brower
from A. M. Burke, re loan 48716, borrower, Dave Beck
and Dorothy Beck 2296 2544-
192. Copies of appraisal of property made by Occidental In- 2545
surance Co 2297 (*)
193. Letter dated February 28, 1952, from Dave Beck to Mr.
Hession, of Occidental Life Insurance Co., Los Angeles,
Calif 2302 (**)
194. Letter dated April 16, 1952, re John F. Miller from A. M.
Burke with copy to Simon Wampold, re Union Avenue
property 2304 2546
195. Letter dated April 18, 1952, from A. M. Burke to Dave
Beck, with attachments, re property at 2239 Vista Del
Mar Place 2306 2547-
196. Letter dated Januarj' 13, 1955, from Sherman Stephens, 2550
National Alortgage, Inc., to Thomas Hession, Occi-
dental Life Insurance Co., re Criterion Films, Inc 2307 2551—
197. Letter dated January 17, 1955, from Thomas Hession, 2552
Occidental Life Insurance Co., to Sherman S. Stephens,
National Mortgage, Inc 2307 (**)
198. Letter dated February 17, 1955, from H. F. Fleharty,
National Mortgage, Inc., to V. G. Witt, president,
Criterion Films, Inc 2309 2553-
198A. Handwritten notes from the files of National Mortgage 2554
Co. in the Criterion Film folder, re special meeting of
the board of directors 2310 2555
198B. Corporate resolution of authority prepared by the Na-
tional Mortgage Co., dated March 17, 1955 2310 2556
1980. Letter dated February 25, 1955, from Sherman Stephens,
National Mortgage Co., to Thomas Hession, Occidental
Life Insurance Co., advising of the opening of a special
bank account 2310 2557
198D. Card showing special bank account opened with notation
from Hedlund to Stephens 2310 2558
198E. Memorandum dated February 14, 1955, from the mort-
B loan department of the Occidental Life Insurance
to the investment committee, with attached list of
various pictures produced by Criterion Films 2310 2559-
199. Appraisal of an office and warehouse building at 4585 2563
South Alameda Street, Los Angeles, for Fred P. Loomis
by Charles J. Lick, dated October 1, 1953 2311 (*)
200. Handwritten notes by A. M. Burke in connection with
loan request by Dave Beck for K. & L. Beverage Co_- 2314 (*)
201. Statement of George C. Newell made to Peoples First
Avenue Bank, Seattle, that he was operating as City
Amusement Co. and bank statement dated l3ecember
31, 1954, February 4, 1955, and March 24, 1955, and
deposit slip for $1,000 dated March 10, 1952 2318 2564-
202. Document taken from the records of local 174, in Seattle, 2567
result of statistical division and broker meeting with
Occidental Life Insurance Co., dated January 12, 1956. 2338 2568
S
VIII CONTENTS
EXHIBITS— Continued
Introduced Appears
on page on page
203. International Brotherhood of Teamsters minutes for the
year 1949 of the executive board meeting in which there
was information pertaining to the purchase of property'
from American Legion and fee to be paid in connection
with purchase 2352 (*)
204. Bill submitted by Nathan Shefferman, dated June 20,
1949, to the teamsters for services rendered in the
amount of $12,000 2353 2569
204 A. International Brotherhood of Teamsters check No. 691
payable to Nathan Shefferman in the amount of
$12,000 2353 2570
205. Schedule of the assets and liabihties of the Joint Council
Building Association No. 28, as of January 1, 1954 2360 2571
206. Memorandum from William MuUenholz, comptroller,
stating amoimts paid for retainer fees bv order of Dave
Beck 1 2369 (**)
207. B & B Investment Co. check No. 574 dated May 6, 1957.
pavable to International Brotherhood of Teamsters in
the amount of $12,987.51 and signed by Dave Beck_,, 2370 2572
208. Thirteen points documenting that Dave Beck "took"
rather than "borrowed" the more than .$300,000 from
various teamster union funds in Seattle 2371 (**)
209. Financial statement of Dave Beck dated Februarv 7,
1952 :.._ 2371 2573
210. Financial statement of Dave Beck dated September 26,
1952 2371 2574
211. Form 990 filed by Western Conference of Teamsters for
the vear 1954 and worksheet showing loans receivable
in total amount of $232,556.14 2372 2575-
212. Folder of bills and invoices showing purchases for Dave 2578
Beck, Jr., which were paid out of union funds and
which exceeded .$5,000 2429 (*)
213. Statement of salary recsived by Dave Beck, Jr., from the
International Brotherhood of Teamsters for the years
1954, $5,000; 1955, $12,000 and 1956, $12,375.. __" 2430 (*)
214. Expense vouchers submitted and amounts received by
Dave Beck, Jr., frosn the International Brotherhood of
Teamsters for the years 1954, 1955, and 1956 2430 (*)
215. Certificate of title of a 1955 Mercury station wagon which
is registered in the name of Southern Conference of
Teamsters 2439 (*)
216. Amounts received for alleged expenses by Joseph McEvoy
from the International Brotherhood of Teamsters for
the years 1954, 1955, and 1956 2439 (*)
217. Documents dealing with the purchase of a 1955 Mercury
station wagon paid for by the Southern Conference of
Teamsters and sold by Jackson Motors, Inc., Chicago. 2439 (*)
Proceedings of — ■
April 24, 1957 1991
Mav 8, 1957 2037
May 9, 1957 . _ 2071
May 10, 1957 2129
May 13, 1957 . . 2197
May 14, 1957 _ . . __ _ 2255
May 15, 1957 _ _.. 2289
May 16, 1957 2357
May 17, 1957 __ .. _ __ . 2407
June 4, 1957 2417
*May be found in the flies of the select committee.
**May be foimd in the printed record.
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
WEDNESDAY, APRIL 24, 1957
Unused Saitss Senate,
Select Committe'e on Improper Activities
IN THE Labor or Management Field,
Washington^ D. G.
The Select Coininittee met at 10 a. m., pursuant to Senate Resolu-
tion 74, agreed to January 30, 1957, in the caucus room. Senate Office
Building-, Senator John L. McClellan (Chairman of the Select Com-
mittee) presiding.
Present: Senator John L. McClellan, Democrat, Arkansas; Senator
Barry Goldwater, Republican, Arizona.
Also present: Robert F. Kennedy, Chief Counsel to the Select
Committee ; Jerome Adlerman, Assistant Counsel ; Alphonse F. Cala-
brese. Investigator ; Ruth Young Watt, Chief Clerk.
The Chairman. The committee will be in order,
(Members present at the convening of the session were Senators
McClellan and Goldwater. )
The Chaiioian. We resume public hearings this morning in one
aspect of the Portland, Oreg., inquiry.
During the course of public hearings some weeks ago on condi-
tions that prevailed in Portland, Oreg., we had as a witness Mayor
and former Sheriff Schrunk, of Portland. At that time the mayor
submitted an affidavit from a witness or purported witness whose
testimony according to the affidavit would have refuted some of the
testimony that was before the committee at that time by witnesses
Avho appeared and testified under oath.
Thereafter it was stated that other parties in Portland had infor-
mation that was of great value and would repudiate some of the
evidence that had been given against Mayor Schrunk and others.
It will be recalled at that time some affidavits were submitted by
Clyde Crosby and the committte was asked to place them in the
record. During the course of the hearing that day, we had members
of the staff get in touch by telephone with one of the parties whose
affidavit they desired to sulDmit. In that telephone conversation they
repudiated the affidavit.
Therefore, the Chair instructed the staff to make every effort to
contact those who had given these affidavits and get a statement
from them or ascertain what their testimony would be.
The staff finally succeeded. We have them here today to give
their testimony rather than to take tlieir affidavit.
I think during the course of these hearings it may be borne in mind
that these witnesses who appear today are the witnesses primarily of
1991
1992 IIVIPROPER ACTIVITIES IN THE LABOR FIELD
Mayor and former Sheriff Schrunk and Clyde Crosby. It was at
their insistence that their affidavits be accepted that the committee
become interested in them to find them and bring them in here and
have them testify in person.
Subsequently during the course of that hearing, \ve also received a
letter from a deputy sheriff under Sheriff Schrunk in which he claimed
to have personal knowledege of many facts that he thought would be of
interest to the committee. We will also have him as a witness today.
It is the purpose of this committee at all times, I hope, to be fair
to witnesses and to be fair to those against whom adverse or derogatory
evidence is given. But there is also a duty that the committee owes
itself and owes to the Congress and owes to the public, and that is not
to let those who would willfully do so, or purposely undertake to do so,
impose on the committee.
To make certain there is no imposition by affidavits or purported
affidavits that might not be truthful, we have the witnesses present
today.
Mr. Counsel, is there any statement you wish to make ?
Mr. Kennedy. Just on the question, ]\Ir. Chairman, of your state-
ment where you said we contacted one of the individuals who made
affdavits and he repudiated it. What we did was that we contacted
someone who had firsthand information regarding the subject matter
of the affidavit, and it was repudiated, or the information we received
showed the affidavit to be false.
The Chairman. Let the record be corrected on that point. The
Chair was speaking from recollection and we have had so many affi-
davits and so many reports that were not exactly accurate, it is
difficult to keep them clear.
All right, is there any further statement ?
Mr. Kennedy. I do not believe so.
The Chairman. Call the first witness.
Mr. Kennedy. That would be Mr. George Minielly.
Mr. George Minielly wrote a letter on March 9, 1957, stating that
he had some information tliat would be helpful to the committee. Mr.
George Minielly, Mr. Chairman, also was the one that took the state-
ments of the witness who is going to appear later today.
The Chairman. Mr. Minielly, come around, please, sir.
You do solemnly swear that the evidence you shall give before this
Senate Select Committee shall be the truth, the whole truth, and
nothing but the truth, so help you God ?
Mr. Minielly. I do.
TESTIMONY OP GEOEGE MINIELLY
The Chairman. Will you state your name, your place of residence,
and your business, please ?
Mr. Minielly. George Minielly deputy sheriff Multnomah Coun-
ty, State of Oregon, Portland.
The Chairman. Mr. Minielly, have you talked to members of the
staff regarding j^our testimony today ?
Mr. Minielly. I talked to Mr. Kennedy a few minutes this morning.
The Chairman. You earlier wrote the Chairman a letter, did vou
not?
Mr. Minielly. Yes, sir.
IMPROPER ACTIVITIES EN THE LABOR FIELD 1993
The Chairman. Advising the committee th.at you 1i;k1 some im-
portant information i
Air. MiNiEixY. Yes, sir.
The ('iiAiRiMAN. That letter was dated March 9, 1957, and will ha
]>rinted in the record at this point.
The Vv'itness then may be interro«)cated about it.
(The letter is as follows :)
March 9, 1957.
lion. .ToHN L. McClellan,
Senate Caucus Room, Washington, D. C.
Dear Senator McClet.la?; : Enclosed is a statement which I believe will be
helpful to you in the deliberations of your conmiittee. I am one of the people
mentioned by Arden X. Pangborn, editor of the Oregon Journal, who can give
firsthand Information concerning the allegations made against Mayor Terry D.
Schrunk.
I have served as deputy sheriff for Multnomah County for 27 years. During
the time Mayor Schrunk was sheriff of Multnomah County, I acted as his special
investigator. I believe I can supply your committee with relevant information on
the following matters elicited in testimony :
1. I am familiar with the events leading up to and subsequent to the so-called
raid on the 9212 Club on Denver Avenue on the morning of September 11, 1955.
I have had several conversations with Clifford O. Bennett concerning the oper-
ation of the club. I met with him in Vancouver, Wash., when he denied in a
signed statement that he ever paid any money to Mr. Schrunk or his deputies.
2. The enclo.sed statement was made in my presence by Lucile Weeks and
witnessed by her companion, Mary Childress, whom I arrested on district court
warrants on charges of burglary in a dwelling. I was sent to Laredo, Tex., by
Stanley MacDonald, superintendent of the criminal and identification division
of the Multnomah County sheriff's oflfice. I was accompanied by my wife,
Evelyn. During the return journey to Portland the two women started talking
and gave me information concerning Elkins' narcotic addiction, witnessing the
making of tape recordings in the Clark residence, and their association with
Elkins in the prostitution racket. These were subsequently made in the S3-page
statement now believed to be in your possession, and today made a sworn state-
ment in the presence of a notary public.
3. I led the raid on the home of Raymond F. Clark, Elkins' employee, on
the night of May 17, 1956. I was armed with a search Warrant signed by District
Judge John Mears, and the raid was conducted in a lawful manner. On the
premises we found 27 slot machines, a large quantity of wiretapping equipment, 2
dozen obscene party records, 5 spools of tape records, and a minophoue small wire
recorder.
This is just a sample of matters of which I have firsthand knowledge. All
that I know about events in question would be too long to detail here.
Very truly yours,
(Signed) George Minielly,
803 Multnomah, County Courthouse,
Criminal Divison, Portland, Or eg.
The Chairman. Mr. Minielly, you knoAv and you are advised, I pre-
sume, of the rules of the committee that you are entitled to counsel
if you desire to haA'e counsel present to advise you of your legal rights
while you testify ?
Mr. Minielly. Yes, sir.
The Chairman. Do you waive counsel ?
Mr. IVIiNiELLT. Yes, sir.
The Chairsian. All right, Mr. Kennedy, yoli may proceed.
Mr. Kennedy. Mr. Minielly, you have some firsthand information
that could be of help to the comlnittee. I think that you made state-
ments such as that, that you do have some information that would
be helpful. Do you have some that could be helpful to the committee ?
Mr. Minielly. I am the officer that was in charge of a search war-
rant performed at the residence of Ray Clark on May 17, 1956, where
1994 IMPROPER ACTIVITIES IN THE LABOR FIELD
tape recordings were seized that are now in Federal court, in the city
of Portland.
I am also the officer that went on an extradition matter and returned
two women from Laredo, Tex., that had been brought out of Mexico
City by the Federal Bureau of Investigation and turned over to the
Federal Bureau of Investigation by the Mexican authorities for
unlawful flight to avoid prosecution.
Mr. Kennedy. What are those two women's names that you brought
back?
Mr. INIiNiELLY. Mary Childres and Lucille Weeks.
Mr. Kennedy. Mary Childres and Lucille Weeks ?
Mr. MiNiELLY. Kigiit.
Mr. Kennedy. You went down to Texas and brought them back?
Mr. MiNiELLY. Yes, sir.
Mr. Kennedy. You were present when a statement was made by
them?
Mr. MiNiELLY. Yes, sir.
Mr. Kennedy. And the statement particularly by Miss Weeks
stated that Mr. Elkins was involved in prostitution, is that right, and
received earnings of prostitutes?
Mr. MiNiELLY. Yes, sir.
Mr. Kennedy. And that he took narcotics ?
Mr. MiNiELLY. Yes, sir.
Mr. Kennedy. And that she had seen the tapes that were later
played here before the committee, and she had seen some of those tapes
being doctored ; is that right ?
Mr. MiNiELLY. Well, her explanation of doctoring was playing 1 as
I understand, 1 type against the other, and to stop 1 machine against
the other, and a wire against the tape, and so on.
Mr. Kennedy. Now, did you ever urge ether one of those girls to
make statements such as those? Did you urge them to make those
statements ?
Mr. MiNiELLY. We had lots of conversation on the trip returning
from Mexico, and I asked them if they Avished to make a statement to
that effect, telling me, it was hearsay, and they said, "Yes," they would
make a statement.
Mr. Kennedy. Did you make any promise to them that if they
would make those statements, that things would go easier with them ?
Mr. Minielly. No, sir.
Mr. Kennedy. Did you ever give them any money during that
trip?
Mr. Minielly. No, sir. I fed them well, but actually gave them
no cash.
Mr. Kennedy. Excuse me?
Mr. Minielly. I fed them well. They were hungry and they had
good meals at every stop.
Mr. Kennedy. But you never gave them any money ?
Mr. Minielly. No, sir.
Mr. Kennedy. And you never made any promises to them ?
Mr. Minielly. No, sir.
Mr. Kennedy. Now, tell me this : You were aware that when Mayor
Schrunk offered these affidavits and then when Mr. Clyde Crosby,
international organizer of the Teamsters for Portland, offered these
IMPROPER ACTIVITIES IN THE LABOR FIELD 1995
affidavits, that this conimittee was anxious to get ahold of these girls;
were you not ?
Ml". MiNiELLY. I had no information of that myself personally at
all, and I don't know Mr. Crosby.
Mr. Kennedy. 1 am not asking whether you know Mr. Crosby. I
am asking whether you learned or heard that this committee was
anxious to get in touch with those girls.
Mr. ^IixiELLY. ]Miss Weeks told me that she was supposed to call
\ oui- office, ^Ir. Kennedy, and gave me a phone number and extensions
wliich she said that she had received from Kay Clark's wife, Gerrie
Clark, and she was to go over to their residence and call you on that
phone number and that you would take care of everything if they
had made a statement, and so on. You would take care of it and if
they hadn't made a statement, not to make a statement, and also
named Mr. Williams, whom I don't know.
Mr. Kennedy. You knew Mr. Williams to be a representative of the
committee staff out there ?
Mr. MiNiELLY. I learned that later, sir.
Mr. Kennedy. Did you urge them, as a law-enforcement officer
yourself, to get in touch with this committee ?
Mr. ]MiNiELLY. I did not.
Mr. Kennedy. Why didn't you do that ?
Mr. MiNiELLY. That is beyond my duty, and I have no reason, and
I am not their attorney.
Mr. Kennedy. Did you urge them not to get in touch with the
committee '.
Mr. MiNiELLY. Xo, sir.
Mr. Kennedy. Did you tell them at all that they would be in diffi-
culty or in trouble if they got in touch with tlie committee?
Mr, MiNiELLY. Xo, sir.
Mr. Kennedy. Did you tell them that the committee or me per-
sonally liad mistreated Mr. Bennett, and that the same thing would
happen to them if they got in touch with the committee?
5lr. ]Minielly. I don't recall any such statement.
Mr. Kennedy. Well, you would recall it if you made such a state-
ment : wouldn't you ?
Mr. MiNiELLY. I think we all heard your treatment of witnesses on
television and radio, and that v\'as obvious.
Mr. Kenni:dy. Did you tell them that I had mistreated Mr. Bennett,
and that I had physically threatened Mr. Bennett, and that the same
thing would happen to them ?
Mr. MiNlELLY. No.
Mr. Kennedy. Did you urge them at all not to get in touch with
the committee ?
Mr. MiNiELLY. No, I didn't urge them not to get in touch with the
committee.
Mr. Kennedy. Did you say anything to them about the fact that I
had run Mr. Bennett out of the city, and, therefore, they had better not
get in touch with the committee and otherwise they would be in
trouble ?
Mr. MiNiELLY. I don't recall telling them they would be in trou-
ble with the committee if they got in touch with them.
Mr. Kennedy. You would remember if you said that to any person?
Mr. MiNiELLY. I would remember that.
1996 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. So you never told them not to get in touch with the
committee ; is that right ?
Mr. IMiNTELLY. As I recall it, I advised them or I told them I didn't
think it was a good idea for them to go over to Clark's house.
Mr. Kennedy. But you never made any statement about not getting
in touch with the committee ?
Mr. MiNiELLY. Not that I recall, sir.
Mr. Kennedy. Well, I thought originally you said you hadn't, and
now you said you can't recall having made such a statement. Do
jou think it is possible you did make such a statement ?
Mr. MiNiELLY. I don't recall making any such statement,
Mr. Kennedy. You would recall it if it happened, w^ouldn't you ?
Mr. MiNiELTA'. I say again I don't recall making any such statement.
Mr. Kennedy. Do you think it is possible that you would have made
such a statement?
Mr. MiNELLY. I don't think so.
The Chairman. Since you wrote us that you had firsthand informa-
tion, is there any other testimony that you want to give ?
Mr. MiNiELLY. I have had several conversations with Jim Elkins
before he was out here, and since he was out here, if you are interested
in that.
The Chairman. Do you know the nature of the inquiry ? Is there
anything pertinent to the inquiry ? I haven't talked to you, and you
wanted to testify apparently, and so you are here. Proceed.
Mr. MiNiETj.Y. I think it would be an interesting sidelight to this
accusation of INIayor Schrunk in a bribery charge out there, at the
Kenton Club.
Jim Elkins told me again for the second time the other day in the
hallway of the Federal court in Portland, Oreg., that that story was
the "biggest bunch of bunk I had ever heard," and he spent around
$1,000 to find out whoever started such a story.
The Chairman. What story ?
Mr. MiNiELLY. Of the bribery of money dropped on the streets of
Kenton.
The Chairman. You mean to say he told you that he had lied on
the Avitness stand here ? Is that what you are saying?
Mr. MiNiELLY. He didn't say he had lied on the witness stand. He
said that story was without foundation, and he would always say that.
The Chairman. That wasn't the way he testified. You Imow that,
don't you ?
Mr. MiNiELLY. I heard him testify.
The Chairman. Now you are telling us that Jim Elkins got back
out there and came to you and told you in effect that what he had testi-
fied to here was not triie. Is that what you want to tell us ?
Mr. MiNiELLY. He told me before he ever came here that that story
was without foundation.
The Chairman. Had he told you that before you wrote this letter,
on March 9 ?
INIr. MiNiELLY. Yes, sir.
The Chairt\l\n. All right now let us go back to the March 9 date.
Tell us anytliing you knew at the time that you wrote this letter that
you thought was information that this committee should have, oi- would
you regard that as mistreating you to ask you to do that.
IMPROPER ACTIVITIES IN THE LABOR FIELD 1997
Mr MiNiEixY. Jim Elkins told me in the Multnomah County court-
house outside the door of Circuit Judge Frank Lonegan, in his tone of
voice, he said to me, "Mac, we didn't pay anybody $500 and we don t
pay to b-e closed up. We pay to stay open." And he repeated that
statement here just last week in the Federal courthouse.
That is all I have to say regarding that matter.
The CiiAiRMAX. Is there anything else ? From your letter here.
I thouiiht that you had some very valuable information.
Mr. MixiELLY. The information that I have is testnnony I have
taken, and statements from individuals such as the Weeks woman,
and I have two other statements in my folder here of the man who
has never been talked to. And he is a procurer and he is ni custody
and he has been in prostitution rackets some 10 years, and he made a
signed sworn statement regarding his activities in the city of Portland.
The Chairman. AVho was present when you took this affidavit from
these girls ? -, ^ • ■,
Mr. MiNiELLY. They made two separate statements, and which one
do you have reference "to, sir ? Is that the large one ?
the Chairman. I have reference to the one that you sent us on
May 9, 1957. ^ ,
Mr. MmiELLY. That is the signed sworn statement, and they made
one originally to a court reporter without signing it.
The Chairman. It shows to have been signed before Bernice H.
Lee, notary public, and witnessed by you and by Evelyn Minielly
and Douglas Baker. Who else was present when this affidavit was
signed ? , .
Mr. Minielly. I believe those are the persons who were present,
the official court reporter, notary public, my wife, and myself, and
Douglas Baker.
The Chairman. ^Vlio is Douglas Baker?
Mr. Minielly. He is a reporter for the Oregon Journal.
The Chairman. A reporter for the Oregon Journal ?
Mr. Minielly. Yes, sir.
The Chairman. Wliere was this statement taken ?
Mr. Minielly. In Multnomah County courthouse.
The Chairman. Who asked the questions ?
Mr. Minielly. I believe I did.
The Chairiman. You asked the questions to get the statement, is
that right; to get the affidavit?
Mr. Minielly. Yes, sir; most of them.
The Chairman. And suggested what went into it, from the answers
that thev gave? . » , . t i i
Mr. Minielly. I didn't make any suggestions of what should go
into it. It is their story and it is not mine, and I am not familiar
with that type of statement.
The Chairman. It is their story ?
Mr. Minielly. Yes, sir.
The Chairman. Are there any other questions?
Mr. Kennedy. I suppose when vou submitted it to the committ'^'^
you felt that this was an affidavit' of someone who was reliable and
could be trusted? ^ , ,. o j. ^i >. 4.
Mr MIN^:LLY^ As I have stated before, I beli<n^e that the state-
ment from Lucille Weeks is just as reliable as any statement from
1998 EVIPROPER ACTIVITIES IX THE LABOR FIELD
Jim Elkins or Ray Clark. They are all hit by the same brusli, and
that is my personal opinion.
Mr. Kennedy. But you submitted it, and you were the one who
sent it on to the committee ?
Mr. MiNiELLY. I mailed that to the committee ; yes, sir.
The CiTAiKMAN. At whose instance? Wlio asked you to get it and
mail it to the committee ?
Mr. MiNiELLY. The district attorney's office I believe mailed a pre-
vious statement of some 70 pages, that the g-irls made on the day of
their return from Laredo, Tex., which was taken by the same court
reporter but not signed by the person giving the statement.
The Chairman. You mean Mr. Langley's office asked you to get
tliis statement ?
Mr. MiNiELLT. Yes, sir.
Mr. Kennedy. Just on that, you said that Mr. Elkins said that he
would pay $1,000 to try to prove what ?
Mr. MiNiELLY. I didn't say Mr. Elkins would pay $1,000. He told
me that he had already spent $1 ,000 to find out who started that story.
Mr. Kennedy. To prove Mayor Schrnnk was innocent then, I
take it?
Mr. MiNiELLY. I didn't say that, either. He said he would spend
$1,000 to find out where that story originated.
Mr. Kennedy. What would be the point of that ?
Mr. MiNiELLY. Well, he has always said that was fantastic, any-
body to throw a bundle of currency on the street with two or three
hundred people milling about.
Mr. Kennedy. Why would he want to spend $1,000 ?
Mr. MiNiELLY. You will have to ask Mr. Elkins that.
Mr. Kennedy. Did you ask him, or did you follow it up to find out ?
Mr. MiNiELLY. No, sir.
Mr. Kennedy. You weren't interested ?
Mr. MiNiELLY. No, sir. I am interested, but not to the point of
Mr. Kennedy. Asking him a question ?
Mr. MiNiELLY. I asked him a question.
Mr. Kennedy. Would you ask him why he was spending $1,000 ?
Mr. Minielly. No; I didn't go into that, because I don't believe
that.
The Ciiair:v[an. All right.
Mr. Kennedy. Would you stand aside for a few moments ?
The Chairman. You may be recalled.
Mr. Kennedy. Mrs. Kathleen Weeks.
The Chairman. Will you be sworn ?
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the trutli, the whole truth, and nothing
but the truth, so help you God ?
Mrs. Weeks. I do.
IMPKOPF.R ACTIVITIES IN THE LABOR FIELD 1999
TESTIMONY OF MRS. KATHLEEN LUCILLE WEEKS
The CiiAiiniAX. State your name, and your place of residence, and
your business or occupation.
Mrs. Weeks. Kathleen Lucille (^ooper Weeks, and at present I
don't have a permanent address, but my mother's address is Klamath
Falls, Oreg., but I have been staying- in Portland. My profession^
I am a known prostitute.
The Chairmax. Have you talked to members of the stalf of the
committee ?
Mrs. Weeks. Pardon ?
The CiiAiRMAx. Have you talked to members of the staff of the
committee regarding your testimony ?
Mrs. Weeks. Yes, sir ; I have.
The CiiAiRMAx. Have you been advised and do you understand
that you have a right to have counsel present when you testify ?
Mi's. Weeks. Yes, sir ; I do.
The CiiAiRMAx. Do you waive counsel ?
Mrs. Weeks. Yes.
The Chairmax. Mr. Kennedy, you may proceed.
Mr. Kexnedy. Are you Mrs. Weeks or Miss Weeks ?
Mrs. Weeks. Yes ; Mrs. Weeks.
Mr. Kexx^edy. You have been arrested a number of times, as I
imderstandit?
Mrs. Weeks. That is right.
Mr. Kexxedy. For vagrancy and for prostitution ?
Mrs. Weeks. Just prostitution ; and no vagrancy.
Mr. Kexxedy. And as I understand it, also, you at the present time
are taking narcotics ?
Mrs. Weeks. Yes, sir.
Mr. Kexxedy. ]\Irs. Weeks, in September or October, I believe of
1956, or around that time, you were in Portland, Oreg., and there was
a burglar}- of Mi-. Ray Clark's home.
Mrs. Weeks. It was around August.
Mr. Kexxedy. Around August of 1956 ?
Mrs. Weeks. Yes, sir.
Mr, Kexxedy. There was a robbery, or a breaking in of Mr. Ray
Clark's home; is that right?
Mrs. Weeks. Yes, sir.
Mr. Kexxedy. And some furs and some jewelry were taken ?
Mrs. Weeks. That is right.
Mr. Kexxedy. You were questioned at that time with Mary Childres
on the question of whether you were involved ?
Mrs. Weeks. Whether we were involved ; yes.
Mr. Kexxedy. Were you arrested at that time ?
Mrs. Weeks. Xo.
-pt. 7-
2000 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kexnedy. After you were questioned or some time after that,
you went down to San Francisco ; is that right ?
Mrs. Weeks. That is right.
Mr. Kennedy. And after that you went down to Mexico?
Mrs. Weeks. That is right.
Mr. Kennedy. Did you learn when you were in Mexico or did some
of the authoi'ities approach you in Mexico and make arrangements for
you to come back into Texas?
Mrs. Weeks. We were arrested and deported.
Mr. Kennedy. You were arrested and deported ?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. That was in Mexico City ?
Mrs. Weeks. That is right.
Mr. Kennedy. Wlien you got over the border into Texas you were
taken into custody there ?
Mrs. Weeks. That is right.
Mr. Kennedy. And you were put in jail in what city ?
Mrs. Weeks. Laredo, Tex.
Mr. Kennedy. How much time did you spend in jail ?
Mrs. Weeks. It was 2 weeks or a little over.
Mr. Kennedy, And then did Mr. George Minielly come down and
pick you up ?
Mrs. Weeks. Yes.
Mr. Kennedy. Did he make a statement to you at that time as to
why you were being brought back to Portland ?
JNIrs. Weeks. Well, he said that they were taking us back to Port-
land on the warrant for the burglary, but he also told us that they
weren't interested so much in the burglary as the information that I
might have pertaining to Elkins, Rogers, and Ray Clark.
Mr. Kennedy. Now, Ray Clark, as you are familiar, is the one that
made the tape recordings in Tom Maloney's apartment ?
Mrs. Weeks. I know Ray Clark, and I don't know if he took or made
any recordings or not, but I know Ray Clark.
Mr. Kennedy. Mr. Minielly said they were primarily interested in
Ray Clark and Jim Elkins ?
Mrs. Weeks. Yes ; they said they were going to clean the scum out
of Portland.
Mr. Kennedy. Now, did he make arrangements to take you into
custody, you and jNIary Childres, and drive you back to Portland,
Oreg.
Mrs. Weeks. Yes, sir.
Mr. Kennedy. Could you tell us what conversations took place on
that trip back to Portland ?
Mrs. Weeks. Well, he just let us know that if we did not want to
cooperate with him, he could make it very hard for us, pertaining to
our robbery and the fact that we had used narcotics.
Every time he would ask a cjuestion, he would ask it with an answer
at the same time, so that he woul<l make it very clear as to what he
wanted you to answer him.
Mr. Kennedy. Ultimately you made a statement in front of Mayor
Schrunk that Mr. Jim Elkins was involved or took narcotics; is that
right, that you had seen him sniff it ?
Mrs. Weeks. I said that, ves; but it isn't so.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2001
Mr. Kennedy. Now, the secoiul thing yoii also said to him that you
had seen him take money from prostitutes.
Mrs. Weeks. Yes, I said tliat. too.
Mr. Kennedy. Is that true ?
Mrs. Weeks. No.
Mr. Kennedy. And that you also said that you had seen him or Ray
Clark doctor some of the tapes that were submitted here before the
oommittee.
Mrs. Weeks. Yes, I also said that; but that isn't so, I only saw
Mr. Elkins one time.
Mr. Kennedy. You have only seen him once?
Mrs. Weeks. That is right.
Mr. Kennedy. So the statement that you had seen him a great num-
ber of times and that you had seen him sniff this dope or narcotics,
is untrue; is that right?
Mrs. Weeks. That's right.
Mr. Kennedy. Could you tell the conmiittee why you made a state-
ment that ^^•as untrue or wlw you swore to the statement which was
ultimately submitted to Mayor Schrunk and Mr. Crosby to this
committee ?
Mrs. YfEEKS. It was like I said. They made it very plain that if I
didn't, I would be in Salem for 6 months or longer, and I would be
held for interrogation and investigation and would possibly go to the
])enitentiary for something I didn't do.
Mr. Kennedy. "NYliat did they say about Salem that you did not
want to be sent there ?
Mrs. Weeks. Well, Mr. Minielly told us, and he said, "You know,
you can go to Salem and be committed to Salem for using narcotics."
Mr. Kennedy. Is that the hospital for the insane ?
Mrs. Weeks. Yes, and for acldicts,
Mr. Kennedy. Did he indicate to you that if you did not give this
statement that you could be sent to the hospital for the insane?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. Did he suggest to you, Mrs. Weeks, what you should
say in this affidavit?
Mrs. Weeks. Like I said ; every question, he would ask it with an
answer at the same time, like he would say, "Well, you are living at
the Clark's house. You must have seen Clark messing with tapes,
didn't you?" And then he would go on and he started to describe
the mimeophone machine and before I could say whether I had seen
it or not.
He told me, he said, "That is the one I got in the raid ; that is the
one tliat belongs to the State or the county."
Mr. Kennedy. Could you give us any other information ?
Mi-s. Weeks. Every question that he asked, like I said, had an
ansv/er with it at the same time.
Mr. Kennedy. Did he say anything about your cooperating with
him and that he would be able to cooperate with you ?
Mrs. Weeks. Well, he told us that if we played ball with him, he
would play ball with us.
Mr. Kennedy. Now, when you arrived back in Portland, was your
case ever presented to a grand jury?
Mrs. Weeks. No: it hasn't been as yet.
2002 impropp:r ACTI^ITIES in the labor field
Mr. Kennedy. And you were brought back to Portland allegedly
because of this burghary ?
Mrs. Weeks. That's right.
Mr. Kennedy. And it has not been presented to the grand jury ?
Mrs. Weeks. No.
Mr. Kennedy. Was your bail fixed at that time 'i
Mrs. Weeks. Yes. At the time it was $5,000 when they arrested
us and they told us that they would drop it, which they did ; and they
dropped it to $1,000.
Mr. Kennedy. After you made these statements ?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. Now, did Mr. Minielly also make arrangements for
you to go on television during the period these committee hearings
were going on, to make statements about Mr. Elkins ?
Mrs. Weeks. Yes, sir, he did.
Mr. Kennedy. Would you tell or describe that to the committee?
Mrs. Weeks. Well, he called us and talked to me on the telephone
and said that he wanted to take us to town to buy us some clothes.
When we got to town, well, it was the televisian.
Mr. Kennedy. x\nd you went on television at that time ?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. And you made statements about Mr. Elkins ?
Mrs. Weeks. Yes, sir. There were no names. It was inferred in
such a way that it was clear that everybody had to know.
Mr. Kennedy. And those statements at that time were untrue (
Mrs. Weeks. That's right.
Mr. Kennedy. Now, were the clothes purchased for you?
Mrs. Weeks. No.
Mr. Kennedy. Did Mr. Minielly ever give you any money?
Mrs. Weeks. Yes ; a number of times.
Mr. Kennedy. How much money did he give you and Marj*
Childres?
Mrs. Weeks. I don't know really the exact amount he gave us. He
gave us $100 or so, I imagine, and he would give us $20 and then
he might give us $10 and then $20.
Mr. Kennedy. Did he give you any money after you appeared on
television ?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. How much money did he give you ?
Mrs. Weeks. He gave us $20 the day we appeared.
Mr. Kennedy. AVlien this committee was looldng for you, when Mr.
Williams who was our representative out there was trying to contact
you, did Mr. Minielly have any conversations with you at that time?
Mrs. Weeks. Well, I didn't know who it was at the time and I men-
tioned the name.
Mr. Kennedy. Did you understand that I was trying to contact
you ?
Mrs. Weeks. Yes. When I mentioned Mr. Williams' name, Mr.
Minielly got very unhappy and he said that that must be the inves-
tigator and he told me that there was no need contacting him.
Mr. Kennedy. He said there was no need to contact us ?
Mrs. Weeks. That's right.
Mr, Kennedy. Did he say anything about anybody else or what
had happened to anyone else ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2003
Mrs. Weeks. Well,lie told Miss Cliildres and I that Mr. Bennett
when lie came out here to testify before the committee — tliat you had
told liim that if he didn't keep his mouth shut he wouldn't get out of
town.
Mr. Kexnedy. That I had told him what ?
Mrs. Weeks. That if he didn't keep his mouth shut he wouldn't
o-et out of town.
Mr. Kennedy. lie wouldn't get out of town ?
Mrs. Weeks. That's right.
Mr. Kennedy. And did you get the inference at that, that the same
thing would happen to you if you got in touch with the committee?
Mrs. Weeks. Well, I didn't think that myself, but I mean that is
what he was saying about Mr. Bennett.
Mr. Kennedy. Now, you ultimately went up to Seattle, is that
correct ?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. And then you were brought down from Seattle and
arrangements were made for you to be brought down from Seattle
to Portland.
Mrs. Weeks. That's right.
Mr. Kennedy. And you appeared before a grand jury in Portland^
Mrs. Weeks. That's right.
Mr. Kennedy. Just recently ?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. Did Mr. Minielly contact you prior to the time
that you came down to Portland ?
Mrs. Weeks. Well, Miss Cliildres talked to him on the telephone
the night we got picked up. It was on a Friday and we had heard
that the grand jury was trying to contact us ancl she called Minielly
to try to find it out and he told her just to stay away.
Mr. Kennedy. He told her to stay away from the grand jury?
Mrs. Weeks. Yes.
Mr. Kennedy. Did you have any conversations with him after-
ward— after you got down to Portland ?
Mrs. Weeks. jSTo.
Mr. Kennedy. Were you ever urged by Mr. Minielly to bring kid-
naping proceedings against anyone ?
Mrs. Weeks. He called out to the house the day w^e got home and
he talked to Miss Cliildres on the telephone and I didn't talk to him.
Oh, we did see him after that, too.
We went up to the county courthouse the day we got released from
the grand jury, and he mentioned that we should bring kidnaping
charges against the Seattle police.
Mr. Kennedy. Mr. Minielly suggested you should bring the kid-
naping charges against the Seattle police?
Mrs. Weeks. Yes, sir.
Mr. I^nnedy. After you prepared this false affidavit and swore
to it and it was submitted to the committee — ^would you tell the com-
mittee why you decided to change your testimony as you are doing
before this committee ?
Mrs. Weeks. Well really we were influenced more by Miss Cliil-
dres' brother than anybody else. He said that we were crazy to be
jeopardizing ourselves and that we should go ahead and tell the
truth regardless of whom it hurt.
2004 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Who is her brother; Mary Ch.ildres' brother?
Mrs. Weeks. Well, he is a seaman, Mr. Blackman.
Mr. IvENNEDY. He is the one that urged you to come forward and
tell the truth?
Mrs. Weeks. Yes, sir.
Mr. Kennedy. And then did Mr. Minielly tell you why he wanted
these statements made in this manner?
Mrs. Weeks. Pardon me ?
Mr. Kennedy. What the reason w^as that he wanted these state-
ments made.
Mrs. Weeks. Well, he made it very clear ; I forgot the exact words
he used. But he said that Elkins had been running the place long
enough and that it was time that all of the money quit going into
one pocket.
Mr. Kennedy. Was there anything said about Mr. Sclirunk's dif-
ficulties, Mayor Schrunk's difficulties ?
Mrs. Weeks. No.
The Chairman. The Chair presents to you an affidavit purportedly
signed by you and by Mary Childres, dated the 9th of March 19.57,
authenticated by Bernice Lee, notary public for Oregon.
I ask you to examine this document and state whether that is the
affidavit that you signed at the instaiice of Mr. ]^Iinielly.
(A document was handed to the witness.)
]Mrs. Weeks. Yes, sir.
The Chairman. You have examined the document the Chair pre-
sented to you ?
Mrs. Weeks. Yes.
The Chairman. Wliat is that document?
Mrs. Weeks. Well, it is tlie statement that I signed the Saturday
that the statement was given to the newspaper.
The Chairman. I did not understand you.
Mrs. Weeks. It is the stiitemerit tliat was signed the Saturday
that tlie statement was given to the newspaper.
The Chairman. Is that the affidavit that you signed ?
Mrs. Weeks. Yes.
The Chairman. Are those statements in that affidavit true?
Mrs. AVeeks. No. About the only one in tliere that is true and it
isn't the way it is said there, is the fact that I did live at Gerrie's
house and slie was a friend of mine, and the fact tliat she did take me
to Seattle, but I mean it wasn't for innnoral purposes or anything,
and it was just a friend doing a friend a favor.
The Chairman. The otlier statements in tliere regarding Mr.
Elkins, are they true or false ?
Mrs. Weeks. False.
The Chairman. Why did you give that affidavit?
Mrs. Weeks. As I said earlier, I mean I know that it isn't or
shouldn't be an excuse, but I knew if I did I wouldn't be sent to
Salem for 6 months and also I wouldn't be sent to the penitentiary
for something I didn't do.
The CTiAiR:\rAN. So you felt that you were in danger of going to
tlie penitentiary for something you did not do, and also in danger of
being sent to Salem for 6 months for using drugs; is that correct?
Mrs. Vv'eeks. Yes, which we weren't taking at the time, but like Mr.
Minielly told us, regardless of whether you are now or not, you still
IMPROPER ACTIVITIES IX THE LABOR FIELD 2005
liave evidence that you have, and that is ^ood enough to send you to
the hospital.
The Chairmax. You felt that lie deliiiitelv could send you to
Salem ?
Mrs, Weeks. I knew he could.
The Chairman. You knew he co\ild?
Mrs. Weeks. Yes sir.
The Chairmax. And ,you felt yon might be sent to the penitentiary
for a burglary that you didn't commit ?
Mrs. Weeks. That's right.
The Chairmax. And those threats were held over you?
Mrs. Weeks. That's right.
The Chairmax. And it was because of those threats that you signed
the affidavit?
Mrs. Weeks. That's right.
The Chairmax. Now, wlien did you decide that you ought to
repudiate that affidavit?
Mrs. Weeics. Well when we went to Seattle ISIiss Childres and I
were talking about it and we had had it in our mind but I guess we
needed a little shove and then her brother gave us that extra little
shove.
The Chairman. So you were not induced to change your testimony
primarily by anyone associated with this committee?
Mrs, Weeks. No.
The Chairmax. It was after you had made up your mind to tell
the truth that the coiumittee was able to get in touch with you ?
Mrs. Weeks. That's riglit.
The Chairmax^. Now, all during the time that you were in the
control or under the influence of Mr. Minielly, you knew at that time
that the committee had been trying to reach you; did you not?
Mrs. Vv^eeks. Yes. ' .
The Chairmax. Did you tell him that, that the committee was
trying to find you and to contact you ?
Mrs. Weeks. Well, I told him I was supposed to call ]Mr. Kaplan
and Mr, Williams was looking for me. But I did not know Mr.
Williams, who he was at the time.
The Chairman. You did not know who he was at the time?
Mrs. Weeks. And Mr. Minielly told me that was probably the in-
vestigator for the committee.
The Chairmax^. He is tlie one who suggested that Mr. Williams
was probably an investigator of the ^committee ?
Mrs. Weeks. That's right.
The Chairmax. I read a statement here from the Oregon Teamster
dated Thursday, March 28, published at Portland, Oreg., and it has
headlines, "Select Committee Selects Jim Elkins, Kangaroo Court
Held in Senate Office Building."
Among other things it says :
* * * and the committee has not or will not allow this testimony to be dis-
puted. They have even gone a step further by refusing to allow documented
evidence showin^^ Elkins as the head of the prostitution ring in this city to be
introduced into the record.
I am of the opinion that this statement in this paper refers to the
document that has been presented to you. So I am giving an oppor-
tunity for the document at this time to be filed as an exhibit, exhibit
2006 I^^rPROPER ACTIVITIES IN THE LABOR FIELD
No. 136, for reference. You have identified it and stated wliat the
facts are in connection with it.
(The document referred to was marked "Exhibit No. 136" for
reference and will be found in the appendix on pp. 2443-2450.)
The Chairman. I am not particularly concerned about what some
paper may publish or what somebody's views may be, but I shall al-
ways be concerned about being fair and giving anyone an opportunity
to testify if he has pertinent information that might be helpful to the
committee and might relate to the subject matter under inquiry.
But I am going to consistently be alert to any attempt to impose
upon this connnittee by activities and efforts such as, according to your
testimony and other testimony, was made in this instance.
So I want you now, before you leave this witness stand, to search
your soul and your integrity, whatever you have, and state once,
finally and for all whether you told the truth in this affidavit or if
you have told the truth here this morning.
Mrs. Weeks. Well, the affidavit is false. What I have told you here
is true.
The Chairman. Are there any further questions ?
All right, you may stand aside for the present.
Call the next witness.
Mr. Kennedy, Mrs. Mary Childres.
The Chairman. Will you be sworn, please.
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth and noth-
ing but the truth so help you God ?
Mrs. Childres. I do.
TESTIMONY OF MKS. MARY CHILDRES
The Chairman. Please state your name.
Mrs. Childres. Mary Childres.
The Chairman. Your place of residence?
Mrs. Childres. 3304 SE. 51st Street, Portland, Oreg.
The Chairman. And your business or occupation ?
Mrs. Childres. I am unemployed and I am a housewife. I haven't
been working lately. I am not a prostitute.
The Chairman. Thank you very much. All right, you understand,
of course, that you have a right to have counsel present if you desire.
Do you waive counsel ?
Mrs. Childres. Yes, sir.
The Chairman. May I inquire if you have discussed with mem-
bers of the staff of the committee, the information that you have to
give ?
Mrs. Childres. Yes ; I have.
The Chairman. All right. You may proceed, Mr. Kennedy.
Mr. Kennedy. In the past, you have been arrested for prostitution,
is that right ?
Mrs. Childres. In 1933, once.
Mr. Kennedy. That is all ?
Afrs, Childres. That is right.
Mr. Kennedy. And then on narcotics? You have taken narcotics
in the past and as I understand it you have taken treatment ?
Mrs. Childres. Yes, sir.
IMPROPER ACTIVITIES IX THE LABOR FIELD 2007
Mr. Kexnedy. Lately, and you are under doctor's orders, and you
are trying to break the habit of narcotics ?
Mrs. Childres. That's right.
Mr. Kennedy. It was through your brother and a union attorney,
is that correct, out in Port hind, Greg., that you and your companion,
Kathleen Weeks, came forward and told this story now, is that
right?
Mrs. Childres. Yes, sir.
Mr. Kennedy. Was the attorney working for a unien in Portland?
Mrs. Childres. ILWU.
Mr. Kennedy. And that is the International Longshoremen's
Union?
Mrs. Childres. Yes.
Mr. Kennedy. And he is the one that urged you to come forward
and tell the true facts ?
Mrs. Childres. Yes, sir.
Mr. Kennedy. Now, you were questioned, as your companion was
questioned, in September and October of 1956, regarding this
burglary ?
Mrs. Childres. Yes, we were.
Mr. Kennedy. And then you took the trip down to San Francisco
and ultimately went to Mexico City and you w^ere deported from
Mexico City and went to Laredo, Tex., and i)ut in jail at that time?
Mrs. Childres. Laredo, Tex., yes.
Mr. Kennedy. And then Mr. Minielly came down and picked you
up and you drove back to Portland, Oreg., with him, is that right?
Mrs. Childres. Correct.
Mr. Kennedy. Now, Mrs. Weeks has testified before the committee
that it was suggested to her what testimony she should give and what
statements she should make about Jim Elkins. Is that in accordance
with your position on this ?
Mrs. Childres. Yes, it was. That is the way it was.
Mr. Kennedy. Is that the way it happened ?
Mrs. Childres. Yes.
Mr. Kennedy. Was it suggested to her and to you wliat should be
said?
Mrs. Childres. Well, tlie statements were made l)efore the ques-
tion was asked.
The Chairman. I will ask the photographers to suspend until the
witness concludes her testimony; obviously it is distracting her.
Mr. Kennedy. This was on tlie trip back from Laredo ?
Mrs. Childres. Yes.
Mr. Kennedy. Back to Portland, Oreg. ? It was Mr. Minielly who
was driving at that time ?
Mrs. Childres. Yes, sir.
Mr. Kennedy. Would you describe what happened?
Mrs. Childres. Well, Mr. Minielly, when he entered the Laredo jail
to S]}eak with us in regard to our coming together to take us back, his
opening statement was:
Well, girls, you know we are here to take yon back for the burglary, but that
is not the pitch. The pitch is we want to know what you know in regard to
Elkins and Rogers and Clark.
Well, in my particular instance it made no difference because I didn't
know of them and so the conversation was directed to Miss Weeks.
2008 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mi\ Kennedy. Were there suggestions made on tlie trip back, the
3- or 4-day trip back to Portland?
Mrs. Childres. Yes. He wonki say, "Jim Elkins uses narcotics
and so you lived tliere and you must know it,'' In other words, he
Avould say what they do or did or what he wanted to know, and then
tell her to tell him, to substantiate it.
Mr. Kennedt. He was making suggestions as to what should be
said?
Mrs. Childkes. That's right.
Mr. Kennedy. And the same thing as fai- as jirostitution was con-
cerned?
Mrs. Cttildres. Prostitution and narcotics, yes.
Mr. Kennedy. And he made a suggestion or statement that Mr.
Elkins was involved in prostitution?
Mrs. Childres. Yes, narcotics and prostitution, yes.
Mr. Kennedy. When you got back to Portland, were you met there
by Mayor Schrunk?
Mrs. Childres. Right.
Mr. Kennedy. And you came to his office ?
Mrs. Childres. No, District Attorney Langley's office, wih Deputy
Prosecutor Lonegan and the Mayor Schrunk.
Mr. Kennedy. And the mayor came oyer, is that right ?
Mrs. Childres. Yes, sir.
Mr. Kennedy. That was on Sunday afternoon ?
Mrs. Childres. Two o'clock on Sunday afternoon.
Mr. Kennedy. At that time a statement was given, an 81-page state-
ment?
Mrs. Childres. Yes, well, Mr. Minielly called Mayor Schrunk about
an hour out of Portland and advised him when we would be there to
have him meet us.
Mr. Kennedy. Now Mr. Chairman, that statement is the statement
that was submitted originally by Mayor Schrunk here at the hear-
ing.
The Chairman. Do you have that statement ?
Mr. Kennedy. That is the statement that Mayor Schrunk began
to read from on March 8.
Mrs. Childres. I don't remember when it was signed; that is the
question in my mind.
Mr. Kennedy. On page 647 Mayor Schrunk made reference to
that and he brought out the fact it had not been sworn to.
Mrs. Childres. No, because it v/as just in shorthand when we left
the office and I have never seen it since.
Mr. Kennedy. Ultimately steps were taken to get tliis in affi-
davit form ; is that right ?
Mrs. Childres. Yes. But I mean — I don't know — is my signature
on that particular statement ?
Mr. Kennedy. I don't believe so.
Mrs. Childres. I don't see how it could be because I don't remem-
ber ever seeing it again.
The Chairman. This was offered, but it was an unsigned state-
ment. It purported to give questions that were asked you and the
other witness.
Mrs, Childres. Miss Weeks, yes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2009
The Chairma]s'. Purporting to give questions asked you and your
answers thereto, and it was unsigned and, therefore, the committee
would not accept it. But that as I understand was given where?
Mrs. Chii.dres. In the attorne3''s office, prosecutor's office, in Port-
land, at the courthouse.
Mr, Kennedy. In District Attorney Langley's office?
Mrs, Childres, Yes.
Mr, Kennedy, In Langley's office ?
Mrs, Ckildres. Yes, sir.
The Chairman. And then the next day or a few days thereafter,
you gave the affidavit ?
Mrs. Childres, No. Like I say, I never saAv it again after that.
But Deputy Prosecutor Lonegan came out to the jail where we were
in jail a couple of days before our bond was made, and he had anotlier
statement that he took that day about wiretapping and so forth.
That statement Miss Weeks signed and he asked me to sign it as a
witness. But this original one, this 80-page one that you were speak-
ing of, the last time I saw that and I tliinlv the last time she saw it
unil now was when the lady M'ho took the notes had it, but it was not
typed up,
Mr, Kennedy. That later statement, Mr. Chairman, was offered by
Mr, Clyde Crosby, on March 15, the one that was sworn to. It was
offered by Mr. Clyde Crosby on that date.
Now, were there any threats of any kind made to you that if this
statement was not made, what would happen to you ?
Mrs. Childres. The way it was put was like this : "If you will play
ball w4th us, we will play ball with you, and we can make it hard on
you or we can make it easy on you."
Mr. Kennedy. Was there discussion about anything specifically?
Mrs. Childres, Well, in regard to Salem, there is a law in Oregon
for anyone who uses or who is addicted or uses drugs, they can send
you to Salem just on the marks on your arms or hands.
Even if they are old or new they can do as they feel about it.
Mr. Kennedy. Could you have been sent to Salem ?
Mrs. Childres. That's right.
Mr. Kennedy. During that time, did they take steps on your bail
to make any promises to you about your bail ?
Mrs. Childres. Mr. Lonegan, the deputy prosecutor, the day he came
out with the statement about wiretapping, I asked him and I said,
"^'Well, aren't you going to have this 'bail cut because it is exorbitant
for the charge and everything, $5,000?" And so he said, "Syre, we
will cut it to $500." And I said, "Well, that is going a little too
ridiculous." And so finallv he said, "$1,500 or $1^000," and I said,
"Well, $1,000," and that is where it was cut,
Mr. Kennedy. Was that again based on vour cooperating with
them?
Mrs. Chh^dres. Yes.
Mr. Kennedy. Did they ever make arrangements for you to appear
before a grand jury?
Mrs. Childres. No, we have never even had a preliminary hearing.
Mr, Kennedy, Did you understand or did they tell you that nothing
would be done about the burglary charges ?
Mrs. Childres. Well, when I mentioned that I thought I should get
an attorney because mv friend had one retained for her, he said, "That
2010 IxMPROPER ACTIVITIES IN THE LABOR FIELD
is unnecessary. It is not ^oing to be an^tiiing and you don't need an
attorney. Tliere is not going to be anything to it, so it is not necessary
to retain one.'*
Mr. Kennedy. During tliis period of time, did they keep narcotics
away from you and Miss Weeks ?
Mrs. Childres. Oh, yes. We were in custody, in jail.
]Mr. Kennedy. Was there any suggestion that if you went along^
with the statement tliat you coukl get narcotics?
Mrs. Chiedres. Oli. no, )io. In fact we really weren't interested
because a month had gone by by that time.
Mr. Kennedy. Did he give you any money ?
Mrs. Childres. Yes, on different occasions.
Mr. Kennedy. How much money approximately did you receive?
Mrs. Childres. I would say around $100.
Mr. Kennedy. That was from Mr. Minielly ?
Mrs. Childress. Yes, it was.
Mr. Kennedy. Did you receive money from anyone else?
Mrs. Childres. No.'
Mr. Kennedy. Were any gifts given to you, or any bills paid?
Mrs. Childres. No.
Mr. Kennedy. You appeared on television, did you not, while these
hearings were going on?
Mrs. Childres. Yes, sir.
Mr. Kennedy. Who n^ade the arrangements for you to go on
television ?
Mrs. Childres. Mr. Minielly.
Mr. Kennedy. ^Yhi\t did he say to you at that time ?
Mrs. Childres. He seemed concerned about the position Mr.
Schrunk was in here, and lie thought that the statements that had been
taken and everything would be to his advantage and also, let the people
of Portland know, and it would help his situation. That was his
reason for taldng us, Mr. Schrunk's situation.
Mr. Kennedy. It was the difficulty Mayor Schrunk had gotten into?
Mrs. Childres. Gotten into here, "yes, sir.
Mr. Kennedy. And Mr. Minielly made the arrangements ?
Mrs. Childres. Yes, sir.
Mr. Kennedy. Did he give you any money ?
Mrs. Childres. After that,^ we came from the television office and
I believe he gave us $20.
Mr. Kennedy. The committee was trying to contact vou, what aliout
that? ■ ^ "
Mrs. Childres. Of course we knew who you were.
Mr. Kennedy. You had a message that'l was trying to contact you
and you were to call me collect, is that right ?
Mrs. Childres. That's right, and so we told him, and as a matter
of fact we more or less asked him what he thought we should do about
it. And he told us to ignore it because Mr. Bennett had been here and
that you had told Mr. Bennett that if he had anything to say, he
would never get out of town alive.
Mr. Kennedy. That I personally had told him that?
Mrs. Childres. Yes. And that you were related to the Oregonian
in Portland someway— your family or something— and so that should
tell us what side of the fence you were on.
Mr. Kennedy. But he told you at that time to stay away from us ?
IMPROPER ACTWITIES IN THE LABOR FIELD 2011
Mrs. Childkes. Yes.
Mr. Kennedy. Were you also told to stay invay fioin the o-raiid
jury in Portland?
Mrs. Childres. Yes. I called luni when I heard the grand jury
was tryino- to contact us, and he said, ''Well, go some place and hide.
Do sonietiiino-."' And I said, "Where are we going to go? I am not
going anyAvhere." And we stayed there and they came and got us.
Mr. Kennedy. This was when you were up in Seattle ?
Mrs. Childres. Yes, sir.
Mr. Kennedy. And he told you to hide from the grand jury which
was looking for you at that time ?
Mrs. Childres. Yes, sir.
The Chairman. That was the Portland grand jury 1
Mrs. Childres. Yes.
The Chairman. And where did he tell you that ?
Mrs. Childres. I called him from Seattle, and I talked to him at
his home in Portland.
The Chairman. That is Mr. Minielly?
Mrs. Childres. Yes, sir.
The Chairman. And you called him and talked to him ?
Mrs. Childres. I did.
The Chairman. He is a deputy sheriil ?
Mrs. Childres. Yes, sir.
The Chairman. And you told him where you were ?
Mrs. Childres. Yes, sir.
The Chairman. And that you understood the grand jury of Port-
land wanted you ?
Mrs. Childres. Our bondsman told me.
The Chairman. I beg your pardon ?
Mrs. Childres. My bondsman, who is a Seattle firm, had con-
tacted us and told us that the grand jury was trying to locate us for
our appearance.
The Chairman. In other words, your bondsman had acquainted you
with the fact that the grand jury was trying to locate you and
wanted your testimony ?
Mrs. Childres. That's right.
The Chairman. So then you called Mr. Minielly ?
Mrs. Childres. I did.
The Chairman. And you told him that you understood the grand
jury wanted you ?
Mrs. Childres. Yes.
The Chairman. And what did he say ?
Mrs. Childres. He said, "Well, you had better go some place and
get out of that hotel room fast." And I said, "I don't know where
to go." And he said, "Go someplace and hide," and I said, "I am
not going any place."
The Chairman. Knowing that the grand jury wanted you, he
advised you to hide ?
Mrs. Childres. That's right.
The Chairman. To get away ?
Mrs. Childres. Until it had convened or it was supposed to be over
in a few days.
The Chairman. Until it was over?
Mrs. Childres. That's rigrht.
2012 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. He did not want you before the grand jury ?
Mrs. Childres. No.
Mr. Kennedy. After you appeared before the grand jury, did he
urge you to bring kidnaping proceedings against the Seattle police?
Mrs. Childres. He did ; but it seemed the way he explained it he
wasn't so concerned with the Seattle police ; it was an effort to put a
reflection on the grand jury that we had been brought before because
he felt it was at their insistence that that would be a reflection on them.
Mr. Kennedy. Do you have any information at all that Mr. Elkins
uses narcotics?
Mrs. Childres. None. I don't know the man.
Mr. Kennedy. You do not even know Mr. Elkins ?
Mrs. Childres. No, sir.
Mr. Kennedy. And do you have any information or firsthand
knowledge that Mr. Elkins is involved in prostitution ?
Mrs. Childres. I have not.
Mr. Kennedy. And have you any firsthand information that Mr.
Elkins doctored any of the tapes? Did you ever see anything like
that?
Mrs. Childres. No ; I haven't.
Mr. Kennedy. You do not even know Mr. Elkins ?
Mrs. Childres. I am not acquainted with him at all.
The Chairman. We will present to you exhibit 136. The Chair
presents to you exhibit 136 an affidavit given by Mrs. Weeks on March
9. Were you present when that affidavit was made ?
Mrs. Childres. Yes ; I was.
The Chairman. I note you signed it, did you not?
Mrs. Childres. Wait just a minute.
The Chairman. Look on the last page and see if your signature
is on it.
Mrs. Childres. Yes. I signed it as a witness. Yes; as a witness.
The Chairman. You signed it as a witness ?
Mrs. Childres. That's correct.
The Chairman. You were present during the time that affidavit
was being taken ?
Mrs. Childres. Yes; I was.
The Chairman. Did you hear the questions asked and the answers
given?
Mrs. Childres. Yes; I did.
The Chairman. Do you remember the contents of the affidavit?
Mrs. Childres. After going through it, I do remember now.
The Chairisian. You did not sign it as an aiHant. You only signed
it as a witness ?
Mrs. Childres. That is correct.
The Chairman. Do you have any knowledge of any of the facts
contained in that affidavit ? Do you know whether any of those state-
ments regarding ]\Ir. Elkins and the other substantial matters of it
are true or false ?
Mrs. Childres. T wouldn't know.
The Chairman. You would not know ?
Mrs. Childres. No.
The CiiAiR.MAN. In other woi-ds, vou know nolhinof of those facts?
Mrs. Childers. Not one thing.
The Chairman. You could not testify to them or refute them?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2013
Mrs. Childees. I could not, no.
The Chairman. Are there any other questions ?
Mr. Kennedy. That is alL
The Chairman. All right, you may stand aside.
Thank you very much.
The Chairman. Bring Mr. Minielly back. Come around, please,
Mr. Minielly.
TESTIMONY OF GEOEGE MINIELLY— Resumed
The Chairman. Mr. Minielly, you have heard Mary Childres and
Lucille Weeks testify, have you ?
Mr. Minielly. I have.
The Chairman. All right, is there any comment you wish to make ?
Mr. Minielly. I certainly have.
The Chairman. Proceed.
Mr. Minielly. This is the greatest hoax ever pushed on the Amer-
ican public. If tliose girls didn't make tliose statements, where did
that information come from ?
I don't know any dope j^eddlers and I have never been in any
houses of prostitution, and I don't know the peddlers in Seattle and
I don't know the colored peddlers in the city of Portland, and I
don't know the colored peddlers that furnished them narcotics in
Mexico City.
The Chair:man. Let me ask you this : These girls are under in-
dictment, are they not ?
Mr. Minielly. Yes, sir, and so am I.
The Chairman. Well, you may be. And they were in your charge
and you had custody of them ?
Mr. Minielly. Yes, sir.
The Chairman. You had them in jail, is that correct?
Mr. Minielly. That is correct.
The Chairman. And they made bond, and they were released?
Mr. Minielly. That is correct.
The Chairman. What are the charges against them?
Mr. Minielly. Burglary in dwelling.
The Chairman. Burglary in a dwelling ?
Mr. Minielly. Yes.
The Chairman. Who initiated those charges against them?
Mr. Minielly. The district attorney's office.
Tlie Chairman. That is JSIr. Langley ?
Mr. Minielly. His deputy, Oscar Howitts, signed the informa-
tion.
The Chairman. Well, Mr. Langley is responsible. When you
say district attorney, you mean Langley 's office?
Mr. Minielly. Tliat is right.
The Chairman. The grand jury has been in session how long out
there ?
Mr. Minielly. Tlie attorney general's office has controlled the
grand jury for the past 3 or '4 months, and the district attorney's
office has over 200 felonies in the county jail waiting for the grand
Tlie Chairman. Did Mrs. Childres call you from Seattle regard-
ing her appearance before the grand jury ?
2014 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. MiNiELLY. She did.
The Chairmax. What did you tell her 'I
Mr. MiNiELLY. She wanted to know from me if I was looking for
them to appear here in court, in Portland, I mean, and I said 1 was
not. And she said, "There are two men here according to the hotel-
keeper that are looking for us," and she said, "They are not from
your office?" And I said, "Not to my knowledge,'' but I said, "They
may be from the attorney general's office. This madman Kaplan
is handling the grand jury and he may have sent two men up there
looking for you. As I told you, if you go before the grand jury and
they bring you back to the city of Portland, all I ask of you is to
tell the truth," and that is all I have ever told those women, is to
tell the truth.
The Chairmax. Who did you inform that she had called you?
Mr. MixiELLY. Kaplan of the grand jury. He called me in at
night at 11 : 30, two nights later to appear before the grand jury,
from 11 : 30 at night until 1 : 30 in the morning.
The Chairmax. Did you tell the grand jury where she was, and
wdiere they could be found ?
Mr. MixiELLY. I told them they were in Seattle, and the only way
I knew to find them was to contact Mr. Lyman, the bail bondsman
in Seattle, and I didn't know where they were.
The CnAiRiiAX. Then apparently their bondsman was contacted,
wasn't he ?
Mr. MixiELLY. Apparently.
The Chairmax. Isn't that what she told you, that lier bondsman
had said she was wanted in Portland?
Mr. MixiELLY. She told me someone had been at the hotel accord-
ing to the hotel manager.
The Chairmax. Are there any further statements you want to
make ?
Mr. MixiELLY. Well, as an officer of 27 years' experience, I have
never had a reversal of a signed sworn statement in all of my life
to this extent. I w^as told before I arrived here in Washington that
the girls had been threatened with perjury unless they reversed
their story by this Mr. Kaplan, running the, county grand jury for
the attorney general's office, and he has threatened me and threatened
other witnesses, and so I expected this testimony when I came here
today.
But I stand on my record and my testimony.
The Chair:max. Do you think that the committee has been un-
fair to you or to them ?
Mr. MixiELLY. No, you are throwang the questions as you see them,
and I expected a hatchet job when I came here, because I was warned
what liad ha})])eiied in Portland before I got here, and these girls
were taken care of before they ever came here. It is their story.
The CriAiR:NrAx. By whom? What do you mean, "taken care of"?
Mr. MixiELLY. I t)elieve Mr. Kaplan has threatened them with
perjury unless tliey reversed their stories.
The Chairmax. Who?
Mr. MixiELLY. Mr. Kaplan, the assistant attorney general of the
State of Oregon, who sat on the grand jury in Multnomah County
Courtlioiise foi- the past 2 months.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2015
The Chairman. That is just a belief, and do you have any proof
of it ?
Mr. MiNiELLY. It is hearsay with me. The city police in Seattle
told a newspaperman they were threatened with perjury by Kaplan
unless they reversed their story, and he had an indictment ready to put
out for them. He indicted liie for larceny from the dwelling when
I had a legal search warrant, when I had those tapes on May 17 of
last year. The error I made was I didn't put the tapes on the receipt
thatl gave to Ray Clark, due to the fact that I had hauled the tapes
out to the car after 10 minutes of fighting people in the house news-
papermen and getting tapes, and I locked them in the prowl car in
front of the door for safekeeping and I turned them over to Sheriff
Schrunk to lock in the safe and I went home and went to bed.
When I returned, there were 4 or 5 men in Schrunk's office at 3 or
4 o'clock in the morning. When I returned I gave him a list of deputy
sheriffs and their occupations and where they lived, and what shift
they worked, found in the Clarks' residence in the bedroom, and I
had mistakenly carried it home with me, and Schrunk wanted that
document.
And so I returned at 3 o'clock in the morning, and gave hmi the
document and heard these tapes playing for about 5 minutes, and
that is all I have ever heard those tapes played, and I never owned a
tape recorder.
Also they indicted me for conspiracy with the Oregon Journal
management, the editors, and so on for copying those tapes, or words
to that effect, and I have never touched them or had anything to do
with them outside of the custody of them.
The Chairman. How long was it after you left, after you were
hearing them played, before the Oregon Journal got them and copied
them ? Was it the same night or the next day ?
Mr. MiNiELLY. That is my understanding, but I wasn't present.
But I a.m still indicted for being a party to it because I seized them
with a legal search warrant signed by a judge.
The Chairman. I am sure that you will be able to make proper
defense to whatever charges are against you.
Mr. Minielly. I am not worried about that.
The Chairman. You will have that opportunity.
Mr. Minielly. I am not worried about going to court because it
is ridiculous, the whole thing is ridiculous. That is what I am trying
to point out to you. Elkins is still calling the shots.
The Chairman. Do you think he is still calling the shots out there?
Mr. Minielly. I am' positive of it. I have been around that town
all of my life and I have been an officer for 27 years.
The Chairman. When we asked you to come here and testify after
you had written you had pertinent information, and when we finally
found these other two witnesses, the Childres woman and the Weeks
woman and brought tliem here, you don't think Elkins Avas calling that
shot, do you ?
Mr. Minielly. I certainly do. All you have to do is read ^hat
testimony, and you can see that I didn't write those stories, and I don't
know those people and I couldn't tell you.
The Chair:man. One of them said she doesn't even know Elkins,
and the other one says she had onh^ seen him one time.
S0330 — 57 — pt. 7 3
2016 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Mtnielly. I never saw tliem with Elkins but they told me
they had been in the house and I don't think Mary Chikh^es does know
him very well, but the little oirl knows him very well. It was her
story that she had sniffed heroin from the same spoon with him. In
my own personal opinion the man is a user and I have seen him
charged so heavy he couldn't open his eyes time and again.
The Chairman. "WHiat did you do about it ?
Mr. INIiNiELLY. What can I do about it ? I am not a doctor.
The Chairman. You are an officer, are you not ?
Mr. Mtnielly. You have to have evidence and you have to find the
stuff on him.
The Chairman. You had the evidence when he was under the influ-
ence of it and you saw that condition.
Mr. INIiNiELLY. Not as I understand it. We have Federal narcotics
officers who have been there for years and they haven't done anything
about it, and so I am not going to stick my neck out.
The Chairman. You wouldn't stick your neck out ?
Mr. MlNIELLY. No.
The Chairman. You would stick your neck out to go out and get up
this testimony for the district attorney's office, wouldn't you ?
Mr. IMiNiELLY. That is my job as a detective.
The Chairman. Isn't it your job to arrest those guilty of violating
narcotics laws as well ?
Mr. MlNIELLY. It sure is if you can catch them.
The Chairman. You caught him and you saw him.
Mr. MlNIELLY. I never saw him take the narcotics.
The Chairman. You saw him under the influence of it, you said.
Mr. MlNIELLY. That is my opinion. Thousands of people saw him
on television, and at the airport when he returned to Portland, while
he was there and returned that weekend, and saw him on television.
The men that were close to him said he wasn't intoxicated.
The Chairman. Do you want to get something straight ?
Mr. Elkins is not rimning this committee.
Mr. MlNIELLY. I didn't say he was.
Tlie Chairman. Otherwise you wouldn't be here. He is not calling
the shots. He didn't send for you.
Mr. MlNIELLY. I have perfect confidence in you, sir.
The Chairman. Thank you.
Are there any other questions?
Senator Goldwater. Mr. Minielly, you testified before, in answer
to a question from the counsel, that you had not given these girls any
money during the trip from Laredo to Portland or at any time. Now,
the young ladies on the witness stand under oath testified that you
had given them amounts of money that might total $100. How would
you answer that now ?
Mr. Minielly. Let me tell you, sir, when I arrived in Laredo, Tex.,
there were 2 sick girls with arms full of needle marks, and they had
been in custody some 12 days in practically a dungeon. They asked
me if I would "pay their matron $3.50 they owed for milk, eggs, and
whatnot that she had brought in from the outside to help them recover
from their illness, their withdrawal. I gave that old Mexican matron
a $5 bill and she didn't have any change so I told her to keep it. That
was because she had earned it.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2017
It was 96°, and I am driving an old automobile and the heat
was intense and the girls were sick, and I bought an icebox and put
it in mv car. And I carried food and we could have it for sandwiches
and chicken, and tuna fish, and Coca Cola, and pops and so on every
time we stopped. Those girls had the best of food— ham and eggs,
and steaks and roasts. I tried to treat them like human beings.
The older one complained that she had a bladder ailment or some-
thino- and gave me a name of some pills she wanted, and so I stopped
at a^drugstore somewhere in lower Texas there and I went to the
dru«>-gist and I said, "What is this stuff?" And he told me it was
for "a bladder or kidnev ailment and I said, "There is no narcotics
involved ?" and he said "No." And I said, "All right, I will buy it,
and it cost me $1.50. . -r^, -n. rr. a
I put those two girls in jail the first night out m El Paso, lex., and
it took me an hour to get them booked in and I told them I wanted them
out at r. o'clock in the morning and I Avas driving 14 or 16 hours a day
to get l)ack.
I went to the jail to get them about 4 o'clock in the morning and it
took me about an hour to get them released because everyone was
asleep.
Thereafter I kept them in a motel rather than go up in the ]ail, just
two more stops is all, in llickenburg, and Williams, Calif.
I fed tliem good and they were talking a stream and what the little
one couldn't remember the older one needled her and told her what
to say and I made a lot of notes. I knew when I started on that
extradition matter that these people vn ere involved in the Elkins thing
and worked as prostitutes, the young one for him for numerous
montlis. That was the information that I had.
Tliere was nothing personal.
She told me about that association, and who she saw, and tlie whole
story about lier addiction to narcotics, and their associates in the use
of narcotics. That is their story, sir, and not mine. I took tlie story.
Senator Goldwater. Could we get back to the question I asked
you ? Did you give them any money in the sums that they mentioned,
that would total $100 or thereabouts, and forget what you spent on
them : you testified to (hat eft'ect before.
Mr. MixiELLY. T never gave tliem any money. I believe I lent that
gal $20 which she said she would pay me back. They had no clothes
or food, and I don't know who bought them those rags they had on
here, but they were never dressed like that before.
Senator Goldv\^vter. Who did you lend the $20 to?
Mr. MiNiELLY. I gave them $10 apiece for groceries.
Senator Goldwater. Did you lend it to them ?
Mr. Minielly. I loaned it to them, and I never gave anybody any
money, and I don't have any money to give away.
Senator Goldwater. All of tlie monev tliat left voui- luinds lo them
was $20; $10 each?
Mr. Minielly. That is what I recall.
Senator Goldwater. Now remember you are testifying under oath
just the same as they are.
Mr. Minielly. And I feel sorry for them, because I have a con-
science and they apparently don't know, because I am not a liar. That
is their story, and not mine, and I stand on my 27 years record as a
2018 IMPROPER ACTIVITIES IN THE LABOR FIELD
]-»ol iceman or deputy sheriff and I have been in United States Navy
intelligence, and to sit here and listen to people like this, and have a
thing like this back up on you is ridiculous, and I don't think that
you people will buy it.
Senator Gold water. You say that they are perjuring themselves
when thev testified to that ?
Mr. MiNiELLY. I certainly do. Every word of that statement is
theirs, and not mine.
Senator Goldavater. Let me ask you another question.
I believe Mrs. Weeks, the first witness, testified to the effect that you
removed them from the jail telling them that you would buy them
clothes and that when you got downtown with the girls, you were
at a television station, and they went on the air. Is that according
to your memoi'y ?
Mr. MiNiELLY. I recall that now, as you mentioned it. That girl
didn't have shoes, and she had borrowed shoes from some colored
woman they were staying with, and I think they were some kind of
Indian moccasins four sizes too big, and it had been raining, and I did
say, "For heavens sake, I'll take you to J. C. Penney or someplace
and buy you a pair of shoes for $5 or $6."
I took her to the television JDecause they requested their presence,
and when I talked to them and asked if they wanted to appear on tele-
vision she said they did.
Senator Goldwater. Did you ask them before you took them down
if they wanted to be on television ?
Mr. MiNiELLY. Yes.
Senator Goldwater. And they knew about the purpose of the mis-
sion?
Mr. MiNiELLY. Why, certainly.
Senator Goldwater. And they were testifying falsely then when
they testified that they were taken downtown on the assumption that
you were going to buy clothes for them ^
Mr. Minielly. Certainly.
Senator Goldwater. Now let me ask you one other question. The
question was asked you by the counsel in several instances whether
or not you threatened these girls in any way to obtain this testimony.
You said that you did not.
Now, the girls when they were on the stand under oath, the same
as you are, testified to the effect that you did threaten them.
Mr. Minielly. Sir, I have never threatened anybody in my life, and
my reputation will stand that. And I have had a lot of vicious crimi-
nals, and I have handled homicides, murders, and kidnaping, burgla-
ries, thefts of all kinds, and I rode a motorcycle in 1930, up to a prowl
car, to detectives, and I don't threaten anyone. I try to explain to them
why and wheref or if they are wrong.
I didn't threaten them, and I made it plain that I was in no position
to help them in the courtroom or monetarily. And not only, on top of
that they have told me they have been questioned before this grand
jury regarding the same article, and Mary Childres told me that she
made it very plain to Mr. Kapan that I did that, that I made it very
plain to them that there was no chance of me doing any good for them.
I could recommend to the district attorney that they reduce their bail,
Ijecause bail is nothing more than ai)pearance in court, and the girls
were broke and they had to rely on their brother and friends, and
IMPROPER ACTIVITIES IN THE LABOR FIELD 2019
the friendsliip of the bail bondsman that had known Mary Childres
for years in Seattle, Wash., to assist her in gettnig out of ]ail.
Senator Goldwater. Yon did not offer threats m any way « When
I say threats, I do not mean threat of physical violence or personal
harm, but the threat of probably changin<r the charge to a more
Mr MiNiFXLY. Sir, you, as an attorney, know better.
Senator Goldwater. I am not an attorney. I have respect for them.
I am glad I am not one of them. . , , , n^i ^
Mr MiNiELLY. I have nothing to do with the charge. The story
about the penitentiary ; you can't send anybody to the penitentiary un-
less it is a year or more. I have nothing to do with that. 1 hat is up
to the prosecution and the judge giving sentence. So I never made
such statement as that. , i ,. i j- 4.
Senator Goldwater. From your knowledge ot law enforcement up
there, is it true, as these girls testified, that you can be sent to Salem
for merely having needle marks or cut marks on your arms, even it
thev are old .
Mr MiNiELLY. There is in addition an addict law that a person
known to be a user of narcotics can be booked for being a user of nar-
cotics and sent to the State hospital and take the cure Most ot them
take it voluntarily when they are picked up and talked to.
I have taken several of them down of their own free will and they
have signed it themselves without any charge. They spend usually
90 days, 4 months, but I have yet to see one stay with it.
Senator Goldwater. AVliat .do you think has happened to cause
these girls to change their minds? Tell us because we would like to
have some leads. We would like to know where to look. We get
two different stories this morning.
We would like to find out whether you are telling the truth or they
are telling the truth. , -, ., rr^i ■ 1
Mr. MmiELLY. I am 55 years old and I have had it. These girls
when they came back they had a lady attorney named Eve Elliott, a
very respectable lady attorney, with very good reputation m the city
of Portland. They had been back and forth to Seattle 2 or 3 times,
how they got up there, how they got back, I don't know.
What they are doing up there, I don't know, but they know then-
way around in Seattle. They both have worked up there as prostitutes
according to their story. -, ,, -, , v
I don't know that ; I haven't been up there and talked to the police
from Seattle, but from their own co^iversation I know they are well
known in Seattle and like it up there.
They called me numerous times, what goes. I tell them what goes.
There' is no question in my mind that Elkins is calling the shots m
the city of Portland and operates that grand jury in the county seat
of Multnomah County and the attorney is backing him up to the
hilt, especially Kaplan.
Senator Goldwater. Who is Kaplan?
Mr. MiNiELLY. He is deputy attorney of the State of Oregon and
going to a psychiatrist by the name of Dr. Bookeldorf.
Senator Goldwater. Is Dr. Bookeldorf in Portland?
Mr. MiNiELLY. Yes.
Senator Goldwater. How old a man is Kaplan ?
Mr. MiNiELLY, About 40.
Senator Goldwater. Why do you suspect him of being odd ?
2020 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. MiNiELi.Y. I have stayed in that grand jury room. They called
me four times, the last time in the middle of the night, which is most
unusual.
He cross-examined me for 4 and 5 hours at a time over all these
things I have done. I swear to tell the truth, so help me God.
When I walk into this room I don't w^ant the fifth amendment, I
don't want an attorney as I have done nothing wrong.
He cross-examined me until I got so dry that I almost went to
pieces. I told the guy, "If you don't let me out of here at 5 o'clock,
I have been here all day ; I am going to walk out of here."
He said "You try to walk out of here."
"If you try to stop me I will knock you across the room."
The next day the same thing, asking questions, accusing me that I
buy these women narcotics on the way back, that I furnished them
money to buy narcotics on the way back here.
He had me almost frantic. He took me down to the judge, at his
request, not mine. Judge Crawford wanted to know what goes. The
judge asked the foreman, "What is the trouble ?"
"We w^ant to complain about the way this attorney representing us
is treating this witness here, Mr. Minielly."
That man Kaplan said to the judge, "Your honor, I was reported
sometime ago by a witness of mistreatment and I almost lost my
job. I don't like it. This man told me I was running a kangaroo
court. So I thought I would bring him down here to let him tell you
the story."
I said, "Your Honor, I didn't ask to be brought down here, but I
can take care of myself. I will tell you what that man is doing to me."
I told him what he was trying to do — put words in my mouth.
I said, "He is not representing the State before the grand jury.
He is trying to persecute me and prosecute me. Yet he tells me he
is not trying to indict me. Now he turns around to indict me. I am
out on $5,000 bail now. I have never been arrested in my life. Yet
I am out on $5,000 bail. They even reduced bail for larceny of a
dwelling and seizures of these tapes. The face of the warrant was
signed by a judge. Also with conspiracy about these tapes with which
I had nothing to do. That is beside the point here. You people are
not interested in that.
I am telling you about this man Kaplan. He is the one that has
arranged with these girls to change their story aboutface
Senator Goldwater. Are you sure of that ?
Mr. Minielly. That is my opinion. I am not sure of anything
nowadays.
Senator Goldwater. Can you suggest any way we might be able to
prove or disprove that statement? Are there people you can name
that we might contact regarding that statement?
Mr. Minielly. A scribe told me that this captain of the police
Senator Goldwater. Who told you ?
Mr. Minielly. A newspaper man. Bud Crick.
Senator Goldw^ater. ^Yho does he work for ?
Mr. Minielly. Oregon Journal. He said he had contacted this
man in Seattle.
Senator Goldwater. Contacted Kaplan ?
Mr. Minielly. No, Captain Ramone of the Seattle Police Depart-
ment. He told him he understood these girls were to be picked up
IMPROPER ACTIVITIES IN THE LABOR FIELD 2021
and brought back to Portland and if they didn't reverse their story,
or their original testimony— they had been before the grand jury
4 times, and stuck to their story the first 3 times.
Mr. Kennedy. Are you saying that as a fact ?
Mr. MiNiELLY. I am saying it as hearsay evidence.
Mr. Kennedy. I talked to Captain Ramone when I was out in
Seattle because we were looking for these two girls.
Do you state under oath here before the committee that that is
what Captain Ramone said ?
Mr. Minielly. He didn't say it to me.
Mr. Kennedy. You were told that 'I
Mr. Minielly. Yes.
INIr. Kennedy. Now, will you state under oath, you said about
Mr. Kaplan going to a psychiatrist; he was a mental case; is that
right ?
"^JVIr. Minielly. That is also hearsay, with me.
Mr. Kennedy. You said he is a mental case ?
Mr. Minielly. That is my
Mr. Kennedy. You said that before the committee. You have made
that statement about an assistant district attorney in Portland, Oreg.,
who is not here to defend himself, and named the doctor he is going to.
Would you make that statement outside this committee room so
that if it is false you can be sued for libel ?
Mr. Minielly. I made this statement
Mr. Kennedy. Will you make the same statement that you have
made before this committee, outside this committee room, about Mr.
Kaplan ?
Mr. Minielly. No, no ; I am not crazy.
Mr. Kennedy. Then don't make statements like that. Don't come
before this committee and make statements about people who are not
here to defend themselves.
Mr. Minielly. That is my opinion. I still stand by my opinion as
far as the way he treated me.
Senator Goldwater. Do you think Mr. Kaplan is a little crazy?
You testified to the fact; in fact you mentioned the doctor's name. I
still would like to know more specifically who is responsible for these
girls changing their testimony. Is it Mr. Kaplan alone ?
Mr. Minielly. Let us aet back now to the attorney
Senator Goldwater. Will you answer the question ? Is Mr. Kaplan
the only person responsible for these girls changing their testimony,
according to your knowledge or what you have heard ?
Mr. Minielly. He is the basis.
Senator Goldwater. You say that on hearsay, that is
Mr. Minielly. That is my opinion.
Senator Goldwater. '\^^io would be the person back of him that
pushes him to make these girls change their testimony ?
Mr. Minielly. It is my opinion the Elkins mob is still calling the
shots all the way down the line from the attorney general himself.
Senator Goldwater. You think that Mr. Elkins controls the attorney
general of the State of Oregon ?
Mr. Minielly. It sure looks that way to me.
Senator Goldwater. Do you think he controls the Governor ?
Mr, Minielly. No.
2022 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Goldwatek. Do you think he controls the sheriff of the
county ?
Mr. MiNIELLY. No.
Senator Goldwater. Does he control you ?
INIr. MiNIELLY. No ; I should say not.
Senator Goldwater. The county attorney?
Mr. MiNIELLY. No.
Senator Goldwater. The police chief ?
Mr. MiNIELLY. Not the present police chief.
Senator Goldwater. Any of the judges?
Mr. MiNIELLY. I don't believe so.
Senator Goldwater. Then he only controls the attorney general
and Mr. Kaplan ?
Mr. MiNIELLY. That is my opinion, the way the grand jury has been
going, sir.
Senator Goldwater. Would the attorney general have pressured
Mr. Kaplan to have these girls change their testimony ?
Mr. MiNIELLY. I did not get the question.
Senator Goldwater. Would the attorney general have pressured Mr.
Kaplan to have these girls change their testimony ?
Mr. MiNIELLY. Your guess is as good as mine.
Senator Goldwater. I would not want to even take a shot at guess-
ing. I do not even know the attorney general.
You see, what I am trying to get at is who is the man behind all of
this. If you say you suspect the attorney general is involved, who is
big enough in the State of Oregon to put pressure on the attorney
general ?
That is a prettv high office.
IsMr. Elkinsthatbig?
Mr. MiNIELLY. That is my opinion, sir. It has been for 25 years.
Mr. Kennedy. You have known Mr. Elkins for 25 years?
Mr. MiNIELLY. Known of him. I never met the man until August
last year when I had the duty of serving a subpena on the man.
Mr. Kennedy. You have found him a rather dangerous character?
Mr. MiNIELLY. No, he is not dangerous. Anything but dangerous.
Mr. Kennedy. Well, he controls all these people?
Mr. MiNIELLY. That is my opinion.
Mr. Kennedy. You are a police officer?
Mr. MiNIELLY. I am a deputy sheriff, I am not a police officer.
Mr. Kennedy. He is a rather dangerous figure out there if he can
do all these things.
Mr. MiNIELLY. Wlien you say dangerous, I always think if a man
dangerous as one you would be afraid to arrest or accost, but he is
not; he is very meek.
Mr. Kennedy. Have you ever received any gifts from him ?
Mr. MiNIELLY. No.
Mr. Kennedy. Never received any money ?
Mr. MiNIELLY. No, sir; no.
Mr. Kennedy. Never received any whisky?
Mr. MiNIELLY. No, sir. One day in his presence
Mr. Kennedy. Wait a minute, Mr. Minielly. Did you receive any
whisky, or not ? You said, "No, sir." Is that answer correct?
Mr. MiNIELLY. That is correct.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2023
Mr. Kennedy. Did you receive any whisliy indirectly from liim
through anyone else?
Mr. MiNiELLY. Pat Hanan, the attorney.
Mr. Kennedy. Go ahead. . ,r -r.i, • i .c
Mr. MiNiELLY. Pat Hanan, who represented Mr. Elkms and tour
others that I had called Pat to have in his office one day when I had
indictments to serve on all five of them. They so appeared, and I
went down to the office and served the indictments. As we lett, 1 at
Hanan pulled out of the desk drawer and presented me a quart ot
whisky.
I said, "What is this?" . .-, .t ^r ^ ,^
He said, "Just a gift. I like the way you handle this. 1 on don t
run my clients all over town and send officers out to arrest them.
I want to make a little present." . n- ^ j
I said, "On those grounds I will accept it, but I am not obligated
to anybody."
Mr. Kennedy. You took the whisky ?
Mr. MiNiELLY. From Pat Hanan.
Mr. Kennedy. Did you make arrangements before you went up
there that if he gave you a couple of bottles of whisky you would serve
the warrants up there rather than any place else?
Mr MmiELLY. That is not a very good question for a man ot your
caliber to ask. That would be furthest from the truth. Please try
not to do it again. I buy my own whisky if I want a bottle of whisky.
Mr. Kennedy. , Will you answer the question ? ^ ,^ -.^ -,
Mr. MiNiELLY. There was no such arrangement made, Mr. Kennedy.
Mr. Kennedy. You have been working for Sheriff Schrunk for
^ Mr. Minielly. I believe he took office in 1949 and left the first of
January 1957. . „ ^ . i , ,• g
Mr. Kennedy. Have you been his chief deputy since what time i
Mr. Minielly. I am not chief deputy. I am just a detective.
Mr. Kennedy. Did you have any title, from Mr. Schrunk when
he was sheriff ?
Mr. Minielly. I was known as special investigator under the Civil
Defense Act since 1950. I have a letter in my pocket if you would
like to read it.
Mr. Kennedy. I don't.
Mr Minielly. Appointing me as a detective to work in conjunc-
tion with the FBI, railroad detective, city police and so on, in investi-
gation of subversives in Multnomah County. , . o ttt
Mr Kennedy. Did you have some special relationship ^ Were you
a higher detective than the rest? Were you special assistant to
Schrunk?
Mr. Minielly. No, sir.
Mr. Kennedy. You were not?
Mr. Minielly. No, sir. The pay was the same as the other detec-
tive.
Mr. Kennedy. I am not asking about the pay.
Did you have some special title? ^ .
Mr. Minielly. Other than I just stated, I was an investigator.
Mr. Kennedy. For Mayor Schrunk ?
Mr. Minielly. Yes, sir.
2024 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. IvENNEDY. That is from 1949 or from when?
Mr. MiNiELLY. August 8, 1950.
Mr. Kennedy. Have you any other source of income other than
your position with the sheriff's office?
Mr. MiNiELLY. About 4 years, up until 2 years ago I used to be a
house detective up in the Multnomah Kennel Club dog racing for a
60-day meet each summer.
Mr. Kennedy. You used to work at the dog track?
Mr, INIiNiELLY. Yes, sir.
Mr. Kennedy. What did you do ?
Mr. MiNiELLY. A house detective, mingling with the crowd watch-
ing for pickpockets.
Mr. Kennedy. What did you receive for that?
Mr. MiNiELLY. Fifteen dollars a night.
Mr. Kennedy. Did you perform any other duties up there?
Mr. MiNiELLY. I have been officer in charge of the Multnomah
Municipal Stadium for the past 15 years, in charge of all police hired
for all
Mr. Kennedy. Did you do anything else at the dog track ?
Mr. MiNiELLY. No, sir.
Mr. Kennedy. Do you have any otlier source of income other than
the dog track and your job in the sheriff's office ?
Mr. MiNiELLY. I own a signboard on some property on the east
side of the river that pays $150 a year, I believe, from a signboard
company, on a vacant lot that was my home whei> I was a cliild.
Mr. Kennedy. $150 a year?
Mr. MiNiELLY. Yes, sir.
Mr. Kennedy. Have you any other source of income over the period
of the past 6 years?
Mr. Minielly. I receive $20 a month additional to my regular
salary for this civil defense deal wliich is in addition to my regular
checks as a county detective.
Mr. Kennedy. Any other sources of income ?
No, sir.
Nothing else?
No, sir.
Never received moneys from anyone else?
I have a sister that has given me $100 at different
What does she do ?
Stock and bond investment business.
Mr. Kennedy. Why is she giving you $100 ?
Mr. Minielly. To help me out, occasionally — to help pay for a new
refrigerator here a couple of months ago.
Mr. Kennedy. That is from your sister?
Mr. Minielly. Yes.
Mr. Kennedy. Over the period of the past 5 years how much money
have you received from your sister?
Mr. Minielly. Possibly a couple of thousand dollars.
Mr. Kennedy. To help you out?
Mr. Minielly. Yes.
Mr. Kennedy. Did that money come from her or did it come from
anyone else through her ? Did it also come from her ?
Mr. Minielly. Also come from her.
Mr.
Minielly.
Mr.
Kennedy.
Mv.
Minielly.
Mr.
Kennedy.
Mr.
Minielly.
times.
Mr.
Kennedy.
Mr.
Minielly.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2025
Mr. Kennedy. Was it money sent to you through her ?
Mr. MiNiELLY. Sent to me ; no.
Mr. Kennedy. Was it given to her as a gift to you ?
Mr. MiNiELLY. It was not given to her at all. It was her money.
Mr. Kennedy. It was her money?
Mr. Minielly. Her money.
Mr. Kennedy. Do you have any other source of income ?
Mr. Minielly. No, sir.
Mr. Kennedy. Never received any other money?
Mr. Minielly. No, sir.
Mr. Kennedy. Now, were the moneys you received from your sister
in check or cash ?
Mr. Minielly. It was usually cash.
Mr. Kennedy. Have j^ou any other source of income the last 6 years
other than what you have stated ?
Mr. Minielly. No, sir.
Mr. Kennedy. Do you know Mr. Art Erskine?
Mr. Minielly. I don't recall anybody by that name.
Mr. Kennedy. Do you know any Erskine?
Mr. Minielly. No, sir.
Mr. Kennedy. You do not?
Mr. Minielly. No, sir.
Mr. Kennedy. Have you ever heard of Mr. Erskine who runs a
book?
Mr. Minielly. No, sir.
Mr. Kennedy. Never have?
Mr. Minielly. No, sir.
Mr. Kennedy. Do you know Bud Milletti ?
Mr. Minielly. There was a Bud Milletti in Portland 4 or 5 years ago
that had some kind of place downtown which I never was in.
Mr. Kennedy. Did you receive any money from Bud Milletti ?
Mr. Minielly. I certainly did not.
Mr. Kennedy. Never received anything from him ?
Mr. Minielly. No, sir.
Mr. Kennedy. Never at any time received any money from Mr.
Milletti ?
Mr. Minielly. No, sir.
Mr. Kennedy. Have you ever been out to the Columbia Edgewater
Golf Club? Would you think carefully in your answers now?
Mr. Minielly. I certainly will. I used to go in the club, the Edge-
water Golf Club, 10 or 15 years ago, when I was a uniform officer on
patrol and I have not been in the club, the Columbia Edgewater Golf
Club, since that time.
Mr. Kennedy. Did they ever have any slot machines at that club?
Mr. Minielly. They did.
Mr. Kennedy. Did you ever have any conversations with anybody
from that club about the slot machines?
Mr. Minielly. No, sir.
Mr. Kennedy. Never did?
Mr. Minielly. No, sir.
Mr. Kennedy. These slot machines were allowed to continue there?
Mr. Minielly. No, sir. Would you like me to explain ?
Mr. Kennedy. I will ask the questions.
Were they allowed to continue there ?
2026 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. MiNiELLT. No, we raided them.
Mr. Kennedy. You closed them up?
Mr. MiNiELLY. Never closed the golf club ; no, sir.
Mr. Kennedy. What did von do ?
Mr. MiNiELLY. I think it was July 2, 1950, I personally visi+ed the
Alderwood Country Club, the Kiverside Golf Club, and Columbia
Country Club on a Thursday, July 3. I returned to the county court-
house and T signed search warrants for all three clubs, possession of
illegal slot machines. I returned to the courthouse and got possibly
9 or 10 men together and raided all 8 clubs.
We seized machines out of Riverside Club and Alderwood Country
Club. Alderwood is the club that I personally went through. And the
Columbia Country Club apparently got word of the raid and they
moved their machines before the officers arrived there.
Mr. Kennedy. They got word from someone ?
Mr. MiNiELLY. Apparently.
Mr. Kennedy. That the raid was going to take place ?
Mr. MiNiELLY. Apparently.
Mr. Kennedy. And there weren't any machines there?
Mr. MiNiELLY. That is right.
Mr. Kennedy. Then wliat happened ?
Mr. MiNiELLY. The machines were seized at Alderwood and River-
side.
Mr. Kennedy. They were never seized from Columbia?
Mr. MiNiELLY. Columbia Country Club. The last time I checked
with the Federal Bureau of Stamps and Internal Revenue there were
no machines.
Mr. Kennedy. Did you go out there another week or 2 weeks to
find out if they had machines there ?
Mr. MiNiELLY. No, sir.
Mr. Kennedy. Never bothered to find out after that ?
Mr, MiNiELLY. I personally did not ; no sir.
Mr. Kennedy. Did vou make arrangements so somebody would
fmd out ?
Mr. MiNiELLY. That is a very hard club to get into. That is a mem-
bership club and you don't wallv in there.
Mr. Kennedy. You knew they had machines. Did you make ar-
rangements to have another raid up there ?
Mr. Minielly. No, sir.
Mr. Kennedy. Did you know Mr. Eddie Hogan ?
Mr. Minielly. I met an Eddie Hogan about 5 years ago that was a
pro at the Riverside Country Club.
Mr. Kennedy. Did you meet Mr. Eddie Hogan when he was con-
nected with the Columbia Country Club ?
Mr. Minielly. Never did. I never knew he was associated with
that club.
Mr. Kennedy. You met him when connected with what club ?
Mr. Minielly. Riverside.
Mr. Kennedy. Did you ever have any discussioiis with him about
slot machines ?
Mr. Minielly. No, sir.
Mr. Kennedy. Did you ever have any discussions with him ?
Mr. Minielly. No, sir.
Mr. Kennedy. Ever receive any moneys from him ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2027
Mr. MiNiELLY. No, sir.
Mr. IvENNEDT. Never at any time?
Mr. MiNiELLY. No, sir.
Mr. IvENNEDY. Did you ever receive any money from the Columbia
Golf Club?
Mr. MiNiELLY. No, sir.
Mr. Kennedy. Never received $1,500 from them?
Mr. MiNiELLY. No, sir.
Mr. IvENNEDY. What about the other club that you mentioned ; what-
are the other two clubs ?
Mr. IVIiNiELLY. Alderwood and Kiverside.
Mr. IvENNEDY. Did you ever receive any money from Riverside ?
Mr. MiNiELLY. I never received money from any club or anyone
else.
Mr. Kennedy. Wliat is your answer ?
Mr. MiNiELLY. No, sir.
]Mr. IvENNEDY. Did you ever receive any money from anyone at the
Riverside Club?
Mr. MiNiELLY. No, sir.
Mr. KJENNEDY. When you went down to Laredo, Tex., did you
receive any money before you went down there ?
Mr. MiNiELLY. Yes, sir.
Mr. Kennedy. Whom did you receive the money from ?
Mr. MiNiELLY. Mr. Langley, district attorney gave me a district
attorney's check for $450.
Mr. IvENNEDY. Was there an indictment against these girls at the
time ?
ISIr. IVIiNiELLY. It is my understanding they were returned on an
extradition matter.
Mr. Kennedy, Could you answer the question ? Was there an in-
dictment outstanding against them at the time ?
Mr. MiNiELLY. Not to my knowledge.
Mr. IvENNEDY. Have you ever gone out of a State when there has
not been an indictment to get witnesses, to bring witnesses back when
there has not been an indictment?
Mr. MiNEELLY, I don't recall.
Mr. Kennedy. Can you recall you ever did anything like this
before ?
Mr. MiNiELLY. No, sir.
Mr. Kennedy. You cannot recall any other instance?
Mr. MiNiELLY. No.
Mr. Kennedy. When they were brought back to Portland did they
receive a hearing ?
Mr. MiNiELLY. Not to my knowledge.
Mr. Kennedy. I don't understand, when you are so interested in
going down there and getting them for this burglary and brought
them all tlie way back there, why they didn't get a hearing.
Mr. MiNiELLY. I am a detective under orders. I do what I am told
to the best of my ability. I am not running the district attorney's
office. That is their job.
Mr. Kennedy. Did that seem unusual to you ?
Mr. MiNiELT.Y. Yes: I think anyone should be entitled to a liearing
in a very short time after incarceration.
2028 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You went all the way down there on an important
matter, it must have been important, it was an unusual circumstance
that you went down there in the first place. You brought them all
the way up to Portland and lowered their bond from $5,000 to $1,000.
Mr. MiNiELLY. I had nothing to do with lowering the bond.
Mr. Kennedy. You went down there. You made the arrangements
to bring them up.
Why didn't they take further action against them if they felt they
were guilt}' of this robbery or burglary ?
Mr. Minielly. That is not my position, Mr. Kennedy.
Mr. Kennedy. Tell me this: Do you usually make arrangements
for witnesses to go on television ?
Mr, Minielly. That is the first time I was ever on television in my
life.
Mr. Kennedy. Did you usually make arrangements for witnesses
to go on television ?
Mr. Minielly. I never requested anything like that before.
Mr. Kennedy. Do you ordinarily take people out of a jail to send
them up?
Mr. Minielly. They weren't in jail.
Mr. Kennedy. They were not ?
Mr. Minielly. No, sir.
Mr. Kennedy. But they were in Portland and they were under your
custody.
Mr. Minielly. They were out on bail.
Mr. Kennedy. Do you usually make arrangements for people out
on bail to go on television ?
Mr. Minielly. That was the first occasion I have ever had of any
such situation.
Mr. Kennedy. You went on television yourself ?
Mr. Minielly. Yes, sir ; I was told to go up there by the sheriff.
Mr. Kennedy. Who was the sheriff?
Mr. Minielly. Sheriff Langley.
Mr. Kennedy. Did you receive any moneys for going on television?
Mr. Minielly. No, sir.
Mr. Kennedy. Didn't receive anything?
Mr. Minielly. No, sir.
Mr. Kennedy. These two girls testified you advised them to stay
away from the committee when we were trying to locate them. Do you
say that is untrue ?
'Mr. Minielly. That is untrue because I never understood that the
committee ever wanted them.
Mr. Kennedy. You didn't know that we were looking for them?
Mr. Minielly. I don't see how you could be looking for them and
not find them. They were in Portland.
Mr. Kennedy. Let me ask again: You say you never understood
that we were looking for them ?
Mr. Minielly. That is correct.
Mr, Kennedy. Could I have that statement ?
Senator Goldwater. "\Aniile you are getting that, may I ask a
question ?
You are a deputy sheriff; is that correct?
Mr. Minielly. Yes, sir.
Senator Goldwatek. Is that a full-time job?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2029
Mr. I^IiNiELLT. That is a full-time job. I am in civil service. I have
^""m/^'kennedy." Here is a statement that she made-Kathaleen
Weeks— and you were present and your wife was present.
I read from page 4 :
She called me at a friend's house-
that is Mrs. Clark—
and told me that Raymond Clark had just called her from Washington DC.,
and they ?ot word I had given a statement. Mr. Schrunk had said I had given
a statement. She wanted me to call Mr. Robert Kennedy m Washington, D. C.
at National 8-3120, extension 1653 or extension 16o2—
You say you never knew about that '^ „ -r , ^
Mr MiNiELLY. I knew about that phone call. I have my notes
here the day she gave them to me from the notes she had in her
^"^Mr.^KENNEDY. Just answer the question. You knew we were
^ Mn^MmiELLY. My understanding is you wanted to talk to her on
the phone, ... n i 9
Mr Kennedy. You knew that we were looking tor her ?
Mr. Minielly. If you were looking for her— they were before
the crand iury 3 or 4 times in the past 3 weeks. ,.,,,.
Mr IvENNEDY. You knew we were looking for her while this com-
mittee was in session, did you not? You stated earlier that you did
not know that. Now, do you want to correct your testimony (
Mr. Minielly. I still say that I understood they were to call you
at your office in Washington. That is all I knew.
Mr. Kennedy. Then you knew we were looking tor her «
Mr. MiNLELLY. That is my answer. . , , ^ .
Mr. Ivennedy. You knew we were looking for her. Do you want
to correct your testimony ?
Mr. Minielly. No, I don't want to correct my testimony.
Mr. Kennedy. Even though she made the statement that I wanted
her to call ?
Mr. Minielly. That is correct. n c tt
Mr. Kennedy. Did you make arrangements for her to call ^ Here
is a Government agency trying to locate these girls. You are a
deputy sheriff. Didn't you want here to call so that she could assist
the committee?
Mr. Minielly. I didn't make the arrangement.
Mr. Kennedy. Wliy didn't you say, "You had better call. The
committee is looking for these girls" ? , . , , . ^ j
Mr. Minielly. They have an attorney to advise them what to do.
Mr. I\j:nnedy. You just made arrangements for them to go on
television?
Mr. Minielly. The television man requested me to see it they
would come up there. I asked them. They submitted. I drove
them from the house they were staying at up to the television
station. , , , .,^
Mr. KENNEDY. What I am trying to get at is that the committee
of Congress is looking for 2 people and the television station is look-
ino- for"2 people — you make arrangements for television, but not for
a committee of Congress.
2030 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. MiNiELLY. That sounds very good, the way you put it, but I
didn't know where these girls were after they lett Portland.
Mr. IvENNEDY. That is not what I am talking about. You knew
where they were because you were talking to them. You were talk-
ing to them on television.
Mr. MiNiELLY. They were at a Portland address at that time.
Since then they had left there and gone to Seattle.
Mr. IvENNEDT. Let us take it up to March 15. I am talking about
when the committee was in session, they stated to you that they were
looking for them. You also told them about Mr. Williams.
Here is a statement in here that Mr. Williams, our representative
in Portland, was looking for them. You made no arrangements or
didn't even encourage them to get in touch with us, but you did en-
courage them to go on television.
Was there a lawyer present when you had them give this state-
ment ? You said they had an attorney so they could go to him. Was
the attorney present when they gave this statement ?
Mr. MiNiELLT. Not that I recall.
Mr. Kennedy. Didn't you want to make arrangements to make sure
they were protected by an attorney, or had an attorney there?
Mr. MiNiELLY. There wasn't an attorney present.
Mr. Kennedy. You said they had an attorney to advise them.
Mr. Minielly. I never talked to the lady.
Mr. Kennedy. That is the testimony you gave before the commit-
tee.
Mr. Minielly. They had an attorney — Frank Posey.
Mr. Kennedy. You said they had an attorney to advise them.
Mr. Minielly. That is correct. They told me they had an attor-
ney.
Mr. Kennedy. You said
The Chairman. Do you know whether their attorney advised them
with regard to this affidavit?
Mr. Minielly. No, I don't know anything about that.
The Chairman. You knew at the time they had an attorney ?
Mr. Minielly. They told me they had.
The Chairman. You knew at the time this committee was trying
to get in touch with them ; is that not correct ?
Mr. Minielly. I didn't understand that this committee wanted to
get in touch with them back here. A telephone call
The Chairman. Let me put it this way : get in contact with tliem.
Wlien you telephone somebody, you expect to get in contact with
them. There is no use to split hairs over these words. You knew this
committee wanted to contact them. They s\Yore to it right before you.
You knew it.
Mr. Minielly. They mentioned the telephone.
The Chairman. Why do you not say you knew it ?
Mr. ISIiNiELLY. I had the telephone number written down.
The Chairman. You knew also they had an attorney; did you not?
Mv. Minielly. They told me they had an attorney.
The Chairman. They told you that ?
Mv. Minielly. Yes, sir.
The Chairman. You knew this committee was trying to contact
them?
Mr. Minielly. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2031
The Chairman. You take them up there and get this affidavit with-
out notifving their attorney, without giving them an opportunity to
consult with their attorney, about whether they shoukl give you an
affidavit or not, then you arrange to take them before a television sta-
tion ; is not that true '^
Mr. MiNiELLY. That is true.
The Chairman. All right. . ^r- ixr i
INIr. Kennedy. Also, Mv. Chairman, in this statement Miss Weeks
said:
I had an appointment to talk to Mr. Williams that night at 7 o'clock and Mr.
Williams never kept that appointment.
You knew we were not only trying to get her to call here, but we
had a representative out there trying to locate her. 1 ou never made
arrangements about it at all, did you i
Mr MiNiELLY. I never knew who Mr. Williams was.
The Chairman. Let us get this straight. You did not want to
cooperate with this committee although you were a peace officer and
knew this committee wanted to get in touch with these people, ihat
is true; is it not ^ .
Mr. MiNiELLY. I wouldn't say so. I would have been willing to
come back here.
The Chairman. They say you advised them not to.
Mr. MiNiELLY. That is not true.
The Chairman. You certainly did not advise them to do it or to try
to help this committee, did you ?
Mr. JVIiNiELLY. It was not my place to advise them.
The Chairman. You advised them about this affidavit. 1 ou were
advising them to give an affidavit ?
Mr. MiNiELLY. Yes, sir.
The Chairman. You made arrangements for that?
Mr. MiNiELLY. Yes, sir. . • i i
The Chairman. You were advising them. Then you advised them
to go on television, so you w^ere advising them.
Mr. MiNiELLY. I asked them to go on television.
The Chairman. That is advising, is it not? You asked them to
go on television. You asked them to give this affidavit. So you w ere
advising. You knew Mr. Williams was trying to contact them, that
they had a date with him, an appointment with him.
You also knew that this committee was trying to reach them by
telephone. ^ , ^ , -, ^ ^ •
Mr. MiNiELLY. Mr. McClellan, I don't, know wliy I sliould advise
anybody to meet anybody in Jerrie Clark's house.
The Chairman. I do not know why you should go out and bring
in those folks and bring in an affidavit either, unless you had some
personal interest in it, do you ?
Mr. MiNiELLY. I am interested in law enforcement.
The Chairman. And isn't this committee trying to find out the
abuses that are going on under existing law^? Where does your in-
terest begin and wiiere does it stop ?
Mr. MiNiELLY. That is what I am trying to find out ?
The Chairman. I have not found out. You are here under oatli,
you can tell us.
Mr. MiNiELLY. I am telling you the truth.
89330—57 — pt. 7 4
2032 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Proceed.
Mr. Kennedy. You say you are interested in law enforcement?
Mr. MmiELLY. Yes, sir.
Mr. KJENNEDY. With respect to Mr. Bennett, who appeared before
this committee and refused to answer questions, when you questioned
him there were outstanding indictments against him on prostitution
and bootlegging. Did you serve any of those on him ?
Mr. MiNiELLY. I never contacted Mr. Bennett in the State of Ore-
gon while those indictments were in.
Mr. Kennedy. Have you ever served any indictments outside of
Oregon before ?
Mr. MiNiELLY. On extradition matters; yes, sir.
Mr. Kennedy. Answer the question. You have served indictments
on people outside the State of Oregon ?
Mr. MiNiELLY. Only felony indictments.
Mr. Kennedy. On no misdemeanors?
Mr. MiNEELLY. Not that I recall.
Mr. Kennedy. Could you do it ?
Mr. Minielly. I could if the governor's office and the attorney's
office
Mr. Kennedy. Why didn't you serve them on Mr. Bennett?
Mr. Minielly. I did serve them.
Mr. Kennedy. Why didn't you serve them at the time you saw
him?
Mr. Minielly. Because it was in the State of Washington.
Mr. Kennedy. You say you could get permission from the governor
to serve them, if you were interested in law enforcement and were not
interested in just having Mr. Bennett change his testimony.
Mr. Minielly. At that time the attorney general's office advised us
they would not extradite them and they did not want the warrants
served until they came within the jurisdiction of Oregon.
iMr. Kennedy. Who advised you that they did not want these affi-
davits, or warrants, served or Mr. Bennett?
Mr. Minielly. Terry Schrunk through the attorney general.
Mr. Kennedy. Terry Schrunk was with you when you saw him?
Mr. Minielly. Yes, sir.
Mr. Kennedy. He had been advised not to serve those warrants on
Mr. Bennett?
Mr. iSIiNiELLY. According to the information I have.
Mr. Kennedy. Now, he told you that?
Mr. Minielly. He did.
Mr. Kennedy. He said not to serve the warrants on Mr. Bennett ?
Mr. Minielly. Not until he came within the jurisdiction of the
State of Oregon and when the attorney general advised us they would
extradite I immediately called Great Falls, Mont., where this Mr.
Bennett was located, and ordered him arrested immediately.
Bennett apparently got the word that he was going to be arrested
and appeared in Portland 3 days later and I arrested liim, served the
indictment, fingerprinted him, booked him, and he went out on bail.
Mr. Kennedy. All the indictments were served at that time?
Mr. Minielly. Yes, sir.
Mr. Kennedy. The ones on prosecution?
Mr. Minielly. The 3 in our file, there was $500 bail on each one.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2033
Mr. Kennedy. Tliey were all served the first time they came in the
Portland, Oreg.
Mr. MiNiELLY. Yes ; right.
Mr. Kennedy. Yon say the reason yon did not serve them at an
earlier is you received instructions not to do so ?
Mr. MiNiELLY. That the attorney general's office would not ex-
tradite.
Mr. Kennedy. You got an affidavit from Bennett when you were
up in Vancouver ; is that right ?
Mr. MiNiELLY. That is correct.
Mr. Kennedy. What was that affidavit on, that Mayor Schrunk
had not been involved in the 8212 raid?
Mr. Minielly. There wasn't any raid, but the affidavit was about
that there was no payoff or bribe is the story.
Mr. Kennedy. This was wliile Bennett was under indictment in
the State, is that right, for prostitution and bootlegging that you went
up and met him in Vancouver ?
Mr. IMiNiELLY. Yes, sir.
Mr. Kennedy. And the}^ were not served at that time?
Mr. Minielly. Not in Washington. We had to have a warrant
issued in the State of Wasliington.
Mr. Kennedy. Did you try to get him to go back at that time to
Oregon so you could serve the warrants ?
Mr. Minielly. Yes ; I have asked many, many times.
Mr. Kennedy. And he w^ould not come ?
Mr. Minielly. No.
Mr. Kennedy. When did he finally surrender?
Mr. Minielly. The reason I don't have much data here is because
the attorney general's office seized every file we had in the sheriff's
office, but I have a letter here dated December 30, 1956, when I served
the three warrants.
Mr. Kennedy. That was the date you served it ?
Mr. Minielly. Yes, sir.
Mr. Kennedy. What was the date?
Mr. Minielly. December 30, 1956.
Mr. Kennedy. "Wliat were those warrants for?
Mr. Minielly. I don't remember the exact terms, but I believe it
was for operating a gambling establishment.
Mr. Kennedy. What about the prostitution warrant?
Mr. Minielly. I didn't have any prostitution warrants.
Mr. Kennedy. I asked you this earlier : Didn't you know if there
were warrants outstanding against him for i)i'ostitution ?
Mr. Minielly. No, sir; I learned that later.
Mr, Kennedy. You didn't know at that time ?
Mr. Minielly. I learned that later, after he returned to Great
Falls, Mont. The State police told me that.
Mr. Kennedy. You never knew that before?
Mr. Minielly. No, sir.
Mr. Kennedy. Those warrants were served on him when he came
back to Portland ?
Mr. Minielly. Yes, sir.
Mr. Kennedy. The first time?
Mr. Minielly. Not the first time. lie was in a local hotel there
and I didn't know anything about that.
2034 IMPROPER ACTIVITIES IN THE LABOR FIELD
]Mr. Kexneuy. Hadn't tlie State police put out a bulletin on that
that was in the sheriff's office?
Mr. MiNiELLY. Not that I recall. They knew he was in Great
Falls, Mont. In fact, they were the ones
Mr. Kennedy. Didn't you assure Bennett that if he came back you
would not serve that warrant ?
Mr. MiNiELLY. No, sir.
Mr. Kennedy. You never gave him any kind of assurance such as
that ?
Mr. MiNiELLY. No, sir. If I have a warrant, I serve it.
Mr. Kennedy. You just say you didn't know about that warrant
even though the State police had sent out this bulletin.
Mr. MiNTELLY. I never did see any bulletin. By word of mouth
from one of the State police officers he had a warrant from Oregon
that he wished to serve on Bennett again.
Mr. Kennedy. Mr. Sutter, who is a police officer, had originally
stated that IMayor Schrunk had picked up this package; isirt that
correct ?
Mr. MiNiELLY. That is correct.
Mr. Kennedy. Now, did you talk to him after he made that state-
ment ?
]\Ir. Mtnielly. Yes, sir; I did.
Mr. Kennedy. Were you the one partially responsible for having
him change that and say he did not loiow whether it was Mayor
Schrunk or not that picked the package up ?
Mr. jVIinielly. I had nothing to do with his giving the statement
other than he contacted me, he called me on my home telephone and
said he wished to meet me.
I liad never seen the boy in my life. I met the lad. He started
telling me he made a great mistake, he told a story of something he
thought he saw, but he didn't see.
Now, he realized he didn't see anything.
Mr. Kennedy. I don't think so.
Mr. Minielly. I am telling what he told me. I don't know what
he has in the statement.
Mr. Kennedy. He says in the statement he saw somebody pick uj)
tlie package, but he doesn't know if it was Mayor Schrunk.
Have you been suspended at all ?
Mr. MiNiELi-Y. No, sir.
Mr. Kennedy. Never been suspended?
Mr. Minielly. No, sir.
Mr. Kennedy. You were not suspended after you went on tele-
vision
Mr. jSIinielly. I got 5 days by the sheriff.
Mr. Kennedy. I thought you said the sheriff told you to go on.
]\Ir. Minielly. That is not what he suspended me for. It was
statements in local papers that I had no control of. It was quoting
things Avhich were untrue, but he never discussed it with me.
Mr. Kennedy. You say the sheriff' ordered you to go on television?
Mr. Minielly. Yes, sir; he told me to talk to a man in his office,
Konny Dobson, Avho is now at channel 8, KVW, a local television
station there, and to go with him and appear for him and tell any-
thing I knew regarding this 8212 Club in Kenton.
Mr. Kennedy. You were suspended sliortly after that?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2035
Mr. IVliNiELLY. Shortly after that. There Avere a half dozen news-
paper articles by two different local papers. There were statements
in there that I had nothing to do with, no control over. He sus-
pended me for that reason, as he quoted, issuance of press articles
without consulting the sheriff, or words to that effect.
The Chairman. Mr. Minielly, have you told the committee now,
have you given to it all of the information that you have and that
you had in mind that the committee should have when you wrote the
letter on March 9, 1957, to me '^
Mr. Minielly. I believe we have covered everything pretty well,
sir.
The Chairman. Your testimonj^ you have given here today is what
you wanted to give when you wrote the letter ?
Mr. Minielly. Yes, when I wrote the letter I had reference to
these two signed sworn statements that have now been turned about-
face.
So I think we have pretty well discussed everything.
The Chairman. Are there any further questions at this moment?
You will agree, will you, that you have been given fair opportunity
to tell anything you knew ?
Mr. Minielly. Yes, I believe so. I believe so.
The Chairman. All right.
Mr. Minielly. Mr. Chairman, I spoke to Mr. Kennedy about it.
I am on Federal subpena and supposed to be in Federal court in
Oregon tomorow, in Judge Mears' court, which is Tliursday. What
is your judgment on that ?
The Chairiman. Well, we are going to try to accommodate you. I
am not going to release you immediately from further attendance
here. This testimony is of such a nature that you will agree, and
everyone present knows that obviously perjury has been committed
by someone here this morning.
Mr. Minielly. I agree with you. As I sat back there I was
amazed
The Chairman. Just a moment.
Therefore, before I release you^ — and I will do so in time for you
to return — I want to have an opportunity for the staff to check on
one or two things that are involved here so that we may interrogate
you about them if we need to before you leave this afternoon.
So I am going to ask you to stand by for the present and just as
soon as I can make a determination I-will so advise you.
Keep in touch with the staff'. We will do all we can to accommodate
you so that you can get back.
The Chair might make this further statement: It was implied, I
think, in the statement I made at the beginning of the hearing this
morning, these witnesses who would appear here, these women par-
ticularly who appeared here this morning — and I think it also applies
to you, Mr. Minielly — are witnesses upon whom Mayor Schrunk and
Mr. Crosby wanted this committee to rely, upon the basis of affidavits
and that the statemerits that you folks had procured from them.
Now, we have brought them here. We probably would never have
been in this enigma except that the sheriff, INIayor Schrunk and Mr.
Crosby brought their names into it and brought these affidavits here
for the purpose of boosting and corroborating their own testimony.
2036 IMPROPER ACTIVITIES IN THE LABOR FIELD
We have brought them here actually as witnesses for them to see
if they would verify these affidavits or see if they had some explana-
tion of why they had given them.
They have given their testimony now under oath here before this
committee. If they have told the truth, someone is guilty of subor-
dination of perjury. There can be no doubt about that.
If they have told the truth, then someone else has committed per-
jury today.
If they have not told the truth, then they have committed perjury.
Under a situation like that the committee has no alternative except
to submit this transcript to the Justice Department with the request —
and I am going to request it because I am getting a little bit tired
of this committee being imposed upon by liars — to the Justice De-
partment to pursue it and try to ascertain and determine who has
been guilty of perjury or subordination of perjury and to take ap-
propriate action on the basis of their determination.
I want to be patient. "Wlien we get witnesses up here and swear
them, it is a solemn obligation they have to tell the truth. If they
do not want to talk they can take the fifth amendment, of course, but
if they do talk we have a right to expect them to tell the truth.
Before we recess subject to call this afternoon, I want to say to
the women who testified and say for the record that if anyone under-
takes to threaten or intimidate or coerce them, I want them to promptly
notify this committee. We will afford all witnesses who come before
this committee all the protection within our power.
That applies, of course, to you, or to any other witness, but I do
take occasion to remind witnesses of it, that we expect them to come
here and feel free to testify without prospect of any reprisals or
harm being done to them after they have testified.
Is there anything further, Mr. Counsel ?
Mr. Kennedy. No, Mr. Chairman.
The Chairman. The committee will stand in recess subject to being
called back sometime this afternoon.
The present witness will keep in touch with the chief counsel of the
committee so that we can determine whether any further testimony
is needed from him.
(Thereupon, at 12: 20 p. m., the committee was recessed, to recon-
vene subject to call of the Chair.)
INVESTIGATION OF I3IPR0PER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
WEDNESDAY, MAY 8, 1957
United States Senate,
Select Committee on Improper Activities
IN the Labor or Management Field,
Washington^ D. C.
The select committee met at 2 p. m,, pursuant to Senate Resolution
74, agreed to January 30, 1957, in the caucus room, Senate Office
Building, Senator John L. McClellan (chairman of the select com-
mittee) presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irving M. Ives, Republican, New York; Senator John F. Kennedy,
Democrat, Massachusetts; Senator Pat McNamara, Democrat, Michi-
gan; Senator Karl E. Mundt, Republican, South Dakota; Senator
Barry Goldwater, Republican, Arizona.
Also present : Robert F. Kennedy, chief counsel ; Jerome Adlerman,
assistant counsel; Carmine Bellino, accounting consultant; Ruth
Young Watt, chief clerk.
The Chairman. The committee will be in order.
(Members of the committee present at the convening of the hearing
were Senators McClellan, Ives, Kennedy, and Goldwater.)
The Chairman. We are resuming hearings today into an important
phase of this committee's continuing investigation of improper activi-
ties in labor and management.
In this series of hearings, the committee intends to present evidence
giving further information on the improper activities of Mr. Dave
Beck, general president of the International Brotherhood of Team-
sters, Chauffeurs, Warehousemen, and Helpers of America.
The improper activities of Mr. Beck to be discussed at this hearing
take two forms. First, the improper use of union funds which was
his duty to administer on behalf of, and for, the betterment of the
membership of his union.
Second, the improper use of the power which the membership of
the International Brotherhood of Teamsters placed in Mr. Beck's
hands by making him the general president.
Our hearings will develop some information on the first point, but
a great deal of the information bears directly to the second point. The
chairman feels very strongly that conflict of interest is as improper
when practiced by a labor official as when it involves a Government
official. In either case, the misuse of power and position for personal
aggrandizement is a breach of moral trust.
2037
2038 IMPROPER ACTIVITIES IN THE LABOR FIELD
We agree wholeheartedly with tlie ethical practices committee of
the AFL-CIO tliat no union leader should use his position of trust for
financial or personal gain.
Finally, in the series of hearings beginning today, we will not only
go into the improper practices of a labor union leader, but also of
certain businessmen who are willing, for the sake of a few dollars, to
make "deals" of a highly improper nature.
Is there any statement any member of the committee cares to make
before we proceed ?
Mr. Beck, will you be sworn, please, sir ?
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth, and nothing
but the truth, so help you God ?
Mr. Beck. I do.
TESTIMONY OF DAVE BECK, ACCOMPAl^IED BY HIS COUNSEL,
EDWAED BENNETT WILLIAMS
The Chairman. Mr. Beck, you are appearing before the committee
under a continuing subpena that was issued and served on you. You
are returning to resume testimony that the committee may desire with
respect to the subject matter that it is established to inquire into.
I believe your last appearance before the committee was on the
27th of March. At that time you had counsel present with you and
today the Chair observes that you have different counsel.
You still desire counsel, I assume?
Mr. Beck. Yes, sir.
The Chairman. Counsel, will you please identify yourself for the
record ?
Mr. Williams. My name is Edward Bennett Williams, of Washing-
ton, D. C, Mr. Chairman.
Before the interrogation begins, Mr. Chairman, I have a request
that I would like to make of the committee whenever you deem it
appropriate for me to be heard.
The Chairman. All right, the Chair will hear your request now,
Mr. Williams.
Mr. Williams. Mr. Chairman, I want to say at the outset that I
have great respect for this committee as an arm of the United States
Senate and for the members who compose it.
If what I say differs in any respect from your views or predilections
in the matter, I want you to know that it is against a backdrop of re-
spect and deference for the committee.
On May 2 of this year, this witness was indicted by a Federal grand
jury, sitting in the western district of Washington, for income-tax
evasion. That indictment is now pending at this moment, and trial
date has not yet been set, but an early trial is expected.
I have canvassed the situation very carefully in the last few days
since Mr. Beck retained me, and I want to call to the attention of the
committee that it is my belief and conviction that never before has a
witness been called before a congressional committee who has been
under indictment and interrogated about matters which can be pos-
sibly germane to the indictment.
Now, if ]\Ir. Beck is interrogated today about any financial trans-
action whatsoever, or tomorrow, or whenever the committee may re-
IMPROPER ACTIVITIES IN THE LABOR FIELD 2039
call him, those financial transactions must of necessity be relevant
and germane to the indictment in Washington, because the tax case
out there, Mr. Chairman, was made on a net worth basis, and there
may be income which is prorated back over the years to the year 1950
which is the taxable year in question.
Now, in the light of that fact, Mr. Chairman, I am going to for-
mally request that the appearance of this witness be deferred until
such time as that tax case is adjudicated, because he finds himself at
this moment spiked on the horns of a dilemma.
If he answers questions about financial transactions, he is, in effect
giving the Government a pretrial discovery deposition before his trial.
He is giving them the benefit of all of the evidence that may be rele-
vant to his defense.
On the other hand, if he seeks refuge in the fifth amendment, under
recent decisions, that fact can be shown against him when and if he
takes the stand in his tax case in Washington.
Now, I think that I should call this to the attention of the com-
mittee at the very outset. I think the Government must make an edu-
cated choice here. It must decide whetJier the tax case is more im-
portant or whether this hearing of this witness is important.
Because, under the decisions, especially in the Delaney case in the
first circuit, where there was a comparable situation, the first circuit
court of appeals reversed the conviction against Delaney and held that
the Government could not at once proceed in the judicial system by
indictment and at the same time hold open hearings on matters rele-
vant to the indictment.
In the Delaney case, I hasten to call your attention to the fact, Mr.
Chairman, Delaney was not called before the King committee, but
witnesses were called after his indictment concerning financial trans-
actions.
I say these things so that the committee will understand the position
we are taking, because I think candor requires me to say that 1 propose
to recommend to counsel who handles the tax case in the Federal
district court in Washington that full exploitation be made of the
defendant's rights under the Delaney decision.
Secondly, I must say to you, Mr. Chairman, that if you do not
defer this hearing that I must advise this witness to refuse to answer
any questions, on the basis of the fifth amendment, which I deem to be
relevant in any way to the matter pending in the Federal district
court in Washington.
My formal request, Mr. Chairman, is that you defer his appearance
until such time as his tax matter is adjudicated.
I respectfully suggest, to you, Mr. Chairman, that it is probably a
matter that the full committee should pass upon, and I would like to
ask the Chair whether or not there is presently a validly constituted
committee. Has the late Senator McCarthy been replaced?
I understand that this resolution requires that this committee be
bipartisan and it have 4 Democrats and 4 Republicans on it. I think
the resolution is quite clear on that. I seek a point of information as
to whether or not the late Senator ]\IcCarthy has been replaced.
The Chairman. As far as I know, unless there has been some action
taken on the floor this afternoon, he has not been replaced.
Mr. Williams. Then, we have a question whether we have a validly
constituted committee, because the resolution, as I read it, is very clear
2040 IMPROPER ACTIVITIES IN THE LABOR FIELD
that the committee must be bipartisan, and that it must contain 4
Democrats and 4 Kepublicans, and as it is now constituted it contains
only 3 Republicans.
The Chairman. The Chair will make this observation: It is not
expected this afternoon to go into Mr. Beck's testimony or further
testimony at any great length. But I did want, before I proceeded
with the hearings to interrogate him about one matter.
The request you have made of the committee will be considered by
the full committee and we will advise whether we will continue to
hear Mr. Beck or not after the full committee has discussed it and
taken action thereon.
I will say, however, for your information, it is not our intention and
not the purpose of the committee to interrogate Mr. Beck regarding his
financial transactions for which he has been indicted. We did not
expect to go into that matter.
Is there anything further ?
Mr. Kennedy. Could I just ask the counsel one question, since you
brought up the question of the Delaney case, as to what was the result
in the Delaney mat^^er, and what happened to Mr. Delaney ?
Mr. Williams. The result was that by virtue of the fact that the
King committee conducted hearings after Mr. Delaney had been in-
dicted, in a situation where they did not call Mr. Delaney, but called
other witnesses concerning matters relevant to the indictment, the
Circuit Court of Appeals reversed the conviction on the ground that
his rights had been violated under the Constitution of the United
States.
"^-^Hiat I am sayinjr, Mr. Kennedy
Mr. Kennedy. Was that the end of the case ?
Mr. Williams. If you will let me finish, sir, I propose to recommend
to counsel who do handle this tax case, that they pursue that course,
if the witness' testimony is not deferred.
Mr. Kennedy. Could you answer my question as to what happened
to Mr. Delaney ?
Mr, Williams. Mr. Delaney went back and had a new trial.
Mr. Kennedy. "Wliat happened then ?
Mr. Williams. Against a backdrop of where he had not been
prejudiced by simultaneous congressional hearings going on, he was
convictpd.
Mr. Kennedy. Thank you.
The Chatr:man. We will proceed for the moment.
IMr. Beck. I Ijelieve you last appeared before this committee on the
27^h dav of March, is that correct ?
Mr. Beck. I personally do not know whether it was the 27th or 26th.
The Chairman. I think the record reflects that. Some time after-
ward, the press reported a statement alleoed to have been made by you
giving some explanation for why you did not testify freely and frankly
before the committee at the time you appeared here.
The press quoted you as saying, that if you had talked that you
would have "blown the lid right off the Senate," and said you did not
talk and wore taking the rap in order to protect a lot of fine people
that would be embarrassed if you did.
CAt this point Senator Mundt entered the hearing room.)
The Chairman. Did you make a statement like that or in substance
to that effect?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2041
(The witness consulted with his counsel.)
Mr. Beck. I decline to answer this question on the grounds that the
answer may tend to incriminate me.
The Chairman. Mr. Beck, the Chair and the committee felt that if
you had made such a statement that it would be quite proper to recall
you and give you an opportunity to talk. I do not think the com-
mittee is impressed very much that you can blow the lid off the Senate
and I felt that since you had given such a statement to the press, if
you have, that you should have an opportunity to talk again.
(The witness conferred with his counsel.)
The Chairman. Do you desire to answer whether you made the
statement or not ?
Mr. Beck. I decline to answer.
The Chairman. All right. Now, do you understand that the Chair
and the committee are giving you the opportunity to make any state-
ment that you care to that might embarrass some mighty fine people,
as you referred to them, or blow the lid off the Senate ?
Do you understand and you recognize that that opportunity is
now being given to you ?
(The witness conferred with his counsel.)
Mr. Beck. Yes, I understand that.
The Chairman. Thank you very much. You decline to take ad-
vantage of it or make use of it ?
Mr. Williams. Mr. Chairman
The Chairman. I am going to close it in just one moment.
Mr. Williams. I would like to say one word, if I may, sir. I don't
see the relevance of this question to any legislative purpose that this
committee may be pursuing. It is difficult to advise the witness. The
last time that the witness appeared here
The Chairman. Just a moment. When I speak, I expect you to
cease.
Mr. Williams. I didn't understand you were interrupting, sir.
The Chairman. It is very easy for someone to come up here and
appear before this committee under oath and testify and take the
fifth amendment 117 times, and then walk out and virtually insult the
whole United States Senate or reflect upon them, by making state-
ments to the press that if he had talked he would embarass a lot of
fine people and possibly blown the lid right off the Senate.
That is not very easy for the Senate of the United States to take.
I think that he should be given the opportunity, and that is what I
am doing. He indicated, or the whole impression of his statement
was that he had a lot of information that this committee might be
interested in and I am giving him the opportunity now to spill it.
Mr. Williams. He has declined the opportunity, as I understand
his answer, Mr. Chairman.
Senator Goldwater. I might remind the chairman of a similar
instance that occurred during our hearings on the lobbying and cam-
paign committee, when a Mr. Guy Nunn, also of the labor movement,
m.ade a charge over television and radio in Detroit — something to the
effect that that it was a known fact that Senators are being bought by
the bushel.
So, Senator McClellan invited Mr. Nunn down before the commit-
tee to name these gentlemen who were involved in the bushel. During
the course of testimony under oath, Mr. Nunn admitted that he was
2042 IMPROPER ACTIVITIES IN THE LABOR FIELD
not using the whole cloth or anything near it when he made that
statement.
Now, I think Mr. Beck has made a statement of similar seriousness.
If the cloud that he has created over the Senate is allowed to hang, I
think he can do irreparable harm to the reputation of the Senate;
and in doing so and taking the action that he is taking now, do addi-
tional harm to himself.
I urge Mr, Beck to reconsider his stand. If he has evidence of
wrongdoings in the United States Senate, I think it is incumbent
upon him as a United States citizen to tell us what they are, and if
he can lift the lid or blow it off, let him start blowing.
The Chairman. Is there anything further ?
Mr. Beck, on April 15, 1957, the Chair directed a telegram to you
in which I stated, "We are trying to locate Mr. Fred Verschueren, Sr.,
and would appreciate your so informing him and also notifying me
where he can be reached."
Did you receive the wire ?
(The witness conferred with his counsel.)
Mr. Beck. I have to decline to answer that question, Mr. Chairman.
The Chairman. Mr. Verschueren is related to you in some way?
(The witness conferred with his counsel.)
Mr. Beck. I must decline to answer the question.
The Chairman. Is he employed by the teamsters union?
(The witness conferred with his counsel.)
Mr. Beck. I must decline to answer the question.
The Chairman. Is he not the auditor for the International Teams-
ters Union ?
Mr. Beck. I must decline to answer the question.
The Chairman. You are not interested then, in helping the com-
mittee locate him ?
Mr. Beck. I must decline to answer the question.
The Chair3ian. ^^io is Mr. Joseph McEvoy ? Is he related to you ?
(The witness conferred with his counsel.)
Mr. Beck. I must decline to answer the question.
The Chairman. Do you know where he is ?
Mr. Beck. I must decline to answer the question.
The Chairman. How about Norman Gessert; do you know him?
Mr. Beck. I must decline to answer the question.
The Chairman. Is he related to you ?
Mr. Beck. I must decline to answer the question.
The Chairman. I see a name here we have been trying to locate — a
Mr. Dave Beck, Jr. Would you know him ?
Mr. Beck. I must decline to answer the question.
(At this point Senator McNamara entered the room.)
Senator Mundt. I would like to know on what grounds Mr. Dave
Beck, Sr., declines to answer whether he knows who Dave Beck, Jr., is.
I would like to have a full recital of the grounds for refusing to an-
swer ; that is, from Mr. Beck.
]Mr. Williams. I will be glad to help you on that.
Senator Mundt. By Mr. Beck, please.
]Mr. Beck. I decline to answer on the advice of my counsel.
Senator Mundt. That is scarcely adequate for the purposes of our
hearing. You may tell us on what grounds your counsel advised you.
Mr. Williams. I will be glad to give you the advice.
IMPROPER ACTWITIES IN THE LABOR FIELD 2043
Senator Mundt, From Mr. Beck; I am sorry. You may tell him
and he may tell us.
Mr. Beck. The only answer that I have is that I decline to answer
on the advice of my counsel.
Senator Mundt. Mr. Chairman, I suggest that you instruct the
witness to answer, if that is the only grounds he has. I am perfectly
confident Mr. Dave Beck, Sr., would never take the fifth amendment
with regard to Dave Beck, Jr., and so I wondered what ground it
would be.
The Chairman. I will ask the witness these questions and then order
him to answer.
Do you know Dave Beck, Jr. ?
(The witness conferred with his counsel.)
Mr. Beck. I decline to answer the question.
The Chairman. You are ordered and directed to answer the ques-
tion.
Mr. Beck. I decline to answer this question on the grounds it might
open up avenues of questions that would tend to incriminate me.
The Chairman. With the permission of the committee and ap-
proval of the committee, the Chair orders and directs you to answer
the question. You understand that order is being given?
(The witness conferred with his counsel.)
Mr. Beck. My answer is the same, Mr. Chairman.
The Chairman. Do you honestly and truthfully believe that if you
ansv/ered the question as to whether you know Dave Beck, Jr., a
truthful answer might tend to incriminate you ?
(The witness conferred with his counsel.)
Mr. Beck. It miglit ; yes, sir.
The Chairman. Alay I ask you another question : Do you know
where Dave Beck, Jr., is now and wliere he can be served with a
subpena to appear before this com.mittee ?
Mr. Beck. I decline to answer this question on the same basis.
The Chairman. You are ordered and directed to answer the ques-
tion as to the whereabouts of Mr. Dave Beck, Jr.
Mr. Beck. I decline to answer the question for the same reason.
The Chairman. Are there any further questions?
Let me ask you further : Are not Joseph A. McEvoy and Norman
Gessert relatives of yours, or of Mrs. Beck ?
(The witness conferred with his counsel.)
Mr. Beck. I decline to answer the question.
The Chairman. You know that the committee is trying to locate
them in order to serve a subpena on them ?
Mr. Beck. I decline to answer the question.
The Chairman. You know that, do you not ?
Mr. Beck. I decline to answer the question for the same reason.
The Chairman. Is there anything further ?
When did you last see Fred Verschueren, Sr. ?
Mr. Beck. I decline to answer the question for tlie same reason.
The Chairman. Is he still in the employ of the teamsters union?
Mr. Beck. I decline to answer the question for the same reason.
The Chairman. With tlie approval of the committee, the Chair
orders and directs you to answer the question.
Mr. Beck. I decline to answer the question.
The Chairman. Is there anythirig further?
2044 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. Mr. Beck, on January 11 of this year we received
a telegram signed by Einar Mohn with the legend, "Acting for the
General President." I am sure that you are familiar with the
telegram.
That was the telegram advising all of the vice presidents of the
teamsters union that the Senate Permanent Subcommittee on Inves-
tigations is conducting an investigation of the teamster activities and
labor conditions and it was a long telegram specifically setting out
the reasons why the vice presidents were requested not to testify.
If you are not familiar with the telegram, I would be happy to
read it all to you, but what I wanted to ask you was whether you
individually took any part in making that policy decision.
(The witness conferred with his counsel.)
Mr. Beck. I decline to answer the question for the reasons pre-
viously given.
Senator Mundt. Was not that decision made in Miami when you
were present at a meeting of the teamsters officials there ?
]Mr. Beck. I decline to answer the question for the same reasons.
Senator Mundt. Could you answer this question : Now tliat Mr.
Brewster, one of the vice presidents, has been before the committee and
did testify for 5 days in response to interrogatories propounded by the
counsel and by the members of the committee, it appears that the
policy of the international has changed. Either that, or Mr. Brewster
refused to be bound by it.
I would like to Imow whether there has been a policy change on the
basis of your determinations or whether Mr. Brewster simply decided
as a forthright American to answer questions despite the rule of
censure you tried to invoke against him.
Mr. Beck. I decline to answer the question for the same reasons.
Senator Mundt. Does the international teamsters high command
have an established policy which governs your behavior before this
committee, and determines whether or not you will answer questions
or whether you will not ?
(The witness conferred with his counsel.)
]Mr. Beck. I decline to answer the question for the same reasons.
Senator Mundt. That is all.
Senator Kennedy. Mr. Chairman, may I ask a question. As to
Dave Beck, Jr., and Norman Gessert and Joe McEvoy, all related to
you, is it on your advice that they refused to make themselves available
for a summons ?
JMr. Beck. I decline to answer the question for the same reasons.
Senator Kennedy. On what ground?
Mr. Beck. On the fifth amendment, possibly incriminating me and
questions leading from it.
Senator Kennedy. They live on your compound, do they not, in
houses associated in the s;ime lot with you ?
]Mr. Beck. I decline to answer the question.
Senator Kennedy. Now, tliis committee has been looking for them
for some weeks and they are important to the work of the conmiittee.
Do you feel any obligation to do your best to make them available to
the committee ?
Mr. Beck. I decline to answer the question.
Senator Kennedy. You understand that we are looking into them
because we want to get information on what has happened to funds
IMPROPER ACTIVITIES IN THE LABOR FIELD 2045
belonging to the teamsters. It is not altogether your personal funds,
but funds belonging to the teamsters, and they have a responsibility
in that iield, and yet you refuse to participate in makmg them avail-
able to the committee.
]\Ir. Beck, I decline to answer that question for the same reasons.
Senator Kennedy. The last point was this, Mr. Chairman : The
counsel for Mr. Beck suggested that this was an improperly constituted
committee. That is because the position of Senator McCarthy had
not been filled.
We have checked with the Parliamentarian, Mr. Watkins, and he
says it is a properly constituted committee, even though one memljer
has deceased and all that is necessary to make it properly constituted
is that a quorum be present and available to the committee.
]Mr. Williams. We have a disagreement with the Parliamentarian.
The Chairman. Gentlemen, that issue would have to finally be
settled by a court, and the committee is proceeding and if it is in
error in proceeding, a court will correct us.
Senator McNamara. Mr. Chairman, I did not want to direct a
question to the witness particularly, but the line of questioning in the
record as put in the record by Senator Mundt deals with two different
committees.
The first committee was not the same as this committee.
Senator Mundt. That is correct.
Senator McNamara. I think the line of questioning might be con-
fusing unless the record shows or reflects this situation.
The Chairman. Senator Mundt referred to the Senate Investi-
gating Subcommittee, and I understood him to say that.
Senator Mundt. Yes.
Senator McNamara. That is right.
Senator Mundt. I would like to direct, Mr. Chairman, a question
for information to the counsel, because I had to set him off and he is
a fine and valued friend of mine and I admire him greatly and I seek
his counsel now. I understand that you raised the question before I
came in as to whether the committee was properly constituted because
one of its members had passed away. Was that correct?
Mr. Williams. Yes, sir ; I did. Senator Mundt.
Senator Mundt. Would it follow in line with your reasoning that
the ITnited States Senate as it functions today is also improperly
constituted because one of its members passed away?
Mr. Williams. I think not.
Senator Mundt. Would you explain the difference, because I am
not a lawyer and I do not see it.
Mr. Williams. When Senate Kesolution 74 was passed, it was
determined that this committee be a bipartisan committee, consisting
of 4 Democrats and 4 Eepublicans.
Obviously, the Senate had a reason for making it bipartisan because
I am sure it did not act without great thought in that matter. By
virtue of the death of Senator McCarthy, this no longer is a bipartisan
commitee.
Senator Mundt. It still is a bipartisan committee. It is not equally
balanced, but it is still bipartisan and I am still a Kepublican and the
chairman is still a Democrat and a tough one.
Mr. Williams. I am using that nomenclature in this sense: that
you have an equal number of the majority and an equal number of
2046 IMPROPER ACTIVITIES IN THE LABOR FIELD
the minority Members of the Senate present on this committee. That
is what the resolution provides.
It provides that there be 8 Members and it provides that there shall
be 4 Members of the majority and 4 of the minority. I might also
say this, Senator, that I think that I should complete this record,
Mr. Chairman, if you will give me just one moment.
I did not get an opportunity before, but I have studied the tran-
script of this witness' past appearance before this committee on March
27, and I find that he was interrogated at great length by the members
of the committee concerning many, many transactions in which he
was engaged, and to each of the questions he respectfully refused to
give an answer, predicating his refusal on a number of grounds.
Toward the end of his appearance, one of the members of the com-
mittee addressed the Chair — and I am talking about, I think, page
3143 of the record here — and asked the Chair what purpose it served
to continue the interrogration of a witness who was declining to
answer on the basis of his constitutional rights.
The Chair at that time said it was because, and this was the only
reason for the continuance of this interrogation as expressed by the
Chair, and the Chair was careful to say this is the only reason, so
that the country might know and so that teamsters might know what
kind of a man headed the union.
I do not conceive this to be a valid legislative function. I do not
conceive that the committee has the power of exposition or degrada-
tion or humiliation or castigation. I conceive that the com-
mittee
The Chairman. Just one moment. I am not going to go back and
rehash the record. The witness had counsel here at that time, and
the record is the record. Your talking about it and my talking
about it is not going to change it.
The purpose of these hearings was announced in the beginning and
the record is replete with the purposes of these hearings. The Sen-
ate thought there was good reason to establish this committee and
it has established it and the testimony the conunittee is trying to get
is important and it is pertinent to legislative duties and legislative
functicms.
Our arguing about it is not going to change the record. The record
is made.
xVre there any further questions ?
Senator Mundt. May I just say that I am disappointed that Mr.
Beck has not shown any increased communicability before our com-
mittee since his last appearance, but I will say his counsel has.
I would suggest that his counsel try to inject his client with the
same stinndus before he comes back again.
The Chairman. Are there any other questions?
Mr. Beck, you will remain under subpena subject to call, and we
expect to call you again during the course of this series of hearings.
Someone told me you were not feeling very well this afternoon
and would like to be excused. As far as the Chair is concerned, you
may return to your hotel, just so we know where we can get in touch
with 3'ou if needed.
Mr. Williams. Thank you very much, Mr. Chairman.
Tlie CuAiRi^EAx. You may stand aside.
Call the next witness.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2047
Mr. Kennedy. Mr. Irvino- J. Levine.
We will have Mr. Stewart Krieoer instead of Mr. Levine for the
first witness.
The (^HAIRMAN. ^Nlr. Krieger, will you come around, please, sir?
Do you solennily swear that the evidence you shall give before this
Senate Select Committee shall be the truth, the whole truth, and
nothing but the truth, so help you God'^
Mr. Kriegek. I do.
TESTIMONY OF STEWART 0. KRIEGER
The Chairman. "Will you state your name, your place of residence,
and your business or occupation, please, sir?
]Mr. Krieger. ]My name is Stewart. Ormsby Krieger, and I live at
1GS20 45th Northeast, Seattle 55, AVash.
I am comptroller of the Teamsters welfare office in Seattle, and
deputy administrator of the Western Conference of Teamsters pen-
sion plan.
The Chairman. Thank you very much, sir.
Have you talked with members of the staff of the committee and
know generally the testimony desired from you ?
Mr. Krie(jer. Yes, sir ; I have.
The Chairman. You understand the rules of the committee, that
you are permitted to have counsel, if you desire, to advise you regard-
ing your legal rights when you testify ?
Mr. Krieger. Yes, sir ; I do.
The Chairman. You have waived counsel, and I see none present.
You do not care to have counsel I
Mr. Krieger. Not at this time ; no, sir.
The Chairman. Thank you very much.
Mr. Kennedy, you nuiy proceed.
Mr. Kennedy^ Mr. Krieger, how long have you been working for
the teamsters ?
Mr. Krieger. Just about 8 years.
Mr. Kennedy. When did you come to work for them ?
Mr. Krieger. May 16, 1949.
Mr. Kennedy. Had you come originally and had Seattle always
been your home ?
Mr. Krieger. No ; I came from Olympia, Wash.
Mr. Kennedy. And you live in Seattle or you have been living in
Seattle for how long ?
Mr. Krieger. Since November 1949.
Mr. Kennedy. Since November of 1949, but you came to work for
the teamsters in May of 1949 ?
Mr .Krieger. Yes.
Mr. Kennedy. Now, you were hired by whom at that time ?
Mr. Krieger. By Mr. Dave Beck and Mr. Greer.
Mr. Kennedy. 'And Mr. Dave Beck at tliat time was president of
the Western Conference of Teamsters ?
Mr. Krieger. Yes ; he was.
Mr. Kennedy. And he ^^ as 1 of tlie 2 ])eople responsible for your
being hired ; was that right ?
Mr. Krieger. Yes, sir.
89330— 57— pt. 7 5
2048 UMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. And you came to work on May 16, 1949 ?
Mr. Krieger. Yes.
Mr. Kennedy. Now, when you came to work, what did Mr. Beck
describe to you as to what your duties would be ?
Mr. Krieger. Do you mean when I reported for work, or when I
was hired ?
Mr. Kennedy. Prior to that time was there any discussion about
what your duties would be ?
Mr. Krieger. I was to take charge of the accounting in the Seattle
office for the health and welfare program of the teamsters.
Mr. Kennedy. You were going to take charge of the accounting for
the health and welfare funds of the teamsters ?
Mr, Krieger. The program of the teamsters in the Seattle office.
Mr. Kennedy. That would be in the Western Conference of Team-
sters, for the Western Conference of Teamsters ?
Mr. Krieger. It would be for the local unions comprising the joint
council 28, which covers the State of Wisconsin, and which, in turn, is
a member of the Western Conference of Teamsters.
Mr. Kennedy. So you came to work on May 16, IIHO. Did you begin
on that work at that time ?
Mr. Ivrieger. No ; I didn't.
Mr. Kennedy. Did you report to the teamster headquarters ?
Mr. Krieger. Yes ; I did.
JMr. Kennedy. How much time did you spend at the teamster
headquarters then on May 16 ?
Mr. Krieger. I was there for 3 or 4 hours.
INIr. Kennedy. And then where did you go ?
Mr. Krieger. I went to a meeting at the Seattle First National
Bank, the main offices.
Mr. Kennedy. Was the meeting at the Seattle First National Bank
on the pension and welfare funds of the teamsters ?
Mr. Krieger. No : it was not.
Mr. Kennedy. What was it on ?
]Mr. Krieger. It involved the financial affairs of the K. & L.
companies.
Mr. Kennedy, The K. & L. companies. There were two K. & L.
companies at that time ?
Mr. Krieger. Actually there were four corporate entities in the
K. & L. enterprises — thelv. & L. Distributing Co., K. & L. Beverage
Co., Northwest Beverages, Inc., the wholly owned subsidiary of K. & L.
Be\ erages, and L. B. G. Realty Co., Inc,
Mr. Kennedy. The two that we are primarily concerned with would
be the K. & L. ; is that right ?
Mr. Krieger. That is correct.
^Ir. Kennedy, So you went down to a meeting at the Seattle First
National Bank and had a meeting on the K. & L. interests ; is that right ?
]\Ir, Krieger, Yes,
jNIr. Kennedy, They distributed beer and whisky ; is that correct?
]Mr, Krieger, They distributed the beer in Seattle and other places
in the State of Washington, and beer and liquor in the Territory
of Alaska.
Mr. Kennedy. Did you understand at that time that Mr. Dave
Beck, Sr., had an interest through his son in these companies?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2049
Mr. Kriegek. Yes ; 1 did.
Mr. Kennfj[)y. So when you went down to the bank tliere was no
discussion of pension or welfare funds at all ?
Mr. Krieger. No.
Mr. Kennedy. For the teamsters ?
Ml'. IvRIEGER. No.
Mr. Kennedy. After you had this meeting at the Seattle First
National Bank did you return to your headquarters at the teamsters ?
Mr. Krieger. Xo : I didn't.
Mr. Kennedy. Wliere did you go then ?
Mr. Krieger. I went down to K. & L.
Mr. Kennedy. You went to the K. & L. ? ■
Mr. Krieger. Offices ; 3^es.
Mr. Kennedy. Did you return shortly, or Avere you doing teamster
work when you were at tlie K. & L. offices ?
Mr. Krieger. Xo ; I was not.
Mr. Kennedy. Did you return shortly to the teamster headquarters
and start Avorking on the pension and welfare funds ?
Mr. Krieger. Xo.
Mr. Kennedy. For approximately how long did you remain working
at the K. & L. companies' offices ?
Mr. Krtkger. One year and 6V2 months.
Mr. IvENNED^r. You worked until December of 1950 ?
Mr. KiiiEGER. I believe December 1 I took over the accounting for
the welfare offices.
Mr. Kennedy. Then you left K. & L. and returned to the teamsters?
Mr. Krieger. Yes, sir.
Mr. Kennedy. So from May 16, 1949, to December 1, 1950, during
that whole period of time, you were working on K. & L. business which
was beer and liquoi- business ?
oMr. Krieger. With minor exceptions ; yes.
Mr. Kennedy. With minor exceptions ?
Mr. Krieger. Yes, sir.
Mr. IvENNEDY. During this period of time, were you paid by the
teamsters, or were you paid by the K. & L. Co. ?
Mr. Krieger. I Avas jjaid by the Western Conference of Teamsters.
Mr. Kennedy. You Avere }>aid by the Western Conference of
Teamsters ?
]\Ir. Krieger. Yes, sir.
Mr. Kennedy. Is that right?
Mr. Krieger. Yes, sir.
Mr. Kennedy. And virtually all of your time and efforts were de-
voted to this K. & L. Co. ; is that right ?
Mr. Kriecjer. Virtually all of my time ; yes, sir.
Mr. Kennedy. With a fcAv minor exceptions, or maybe 10 or 15
days that you did Avoik, or 15 or 20 days that you did work?
Mr. Krieger. In tli;i t neighborhood ; yes.
Mr. Kennedy. But otherAvise, you spent all of your time working
on this beer and liquor company ?
Mr. Krieger. Yes, sir.
Senator McXamara. Whicli fund was he paid from? Was it a
trust fund or the I'egular fund ?
-Mr. Kennedy. Wliat fund AAereyou paid from?
2050 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Krieger. I don't know; my check was a Avliite check written
on the Western Conference of Teamsters, and I didn't even know,
nor do I know now, that they have a couple of funds under that name.
Mr. Kennedy. Senator McNamara, for his sahiry, which amoimted
to $14,340, he was paid by the Western Conference of Teamsters. The
salary was $12,025, which came out of the Western Conference of
Teamsters.
Senator McNamara. And apparently not out of the trust fund.
That was the particular thing that I wanted to know.
Senator Ives. I would like to ask the witness who, in his absence,
was taking- care of the work you were supposed to be doing with
respect to trust funds ?
Mr. Krieger. The health and welfare program at that time was in
its formative stages. Actually it did not become active, that is, to
where the program was fully in effect, until June 1, 1950.
From June 1, 1950, until December 1, 1950, one of the girls in the
office kept the records.
Senator Ives. I would have thought during its formative stage it
would have needed some attention. A fund like that usually has to be
followed and followed carefully when it is started.
Mr. Krieger. Yes. After taking over the i-ecords on December 1,
1950, I went back to the beginning of the health and welfare work
and placed all that had gone before onto a set of standai'd accounting
records.
Senator Ives. During that period when you were Avorking for
K. & L., nobody was attending to the trust funds at all : is tliat it?
Mr. Krieger. A girl was keeping the records.
Senator Ives. But she was just keeping records and nobody was
attending to the fund ; is that right ?
Mr. Krieger. She was keeping memorandum records of the money
that came in, and depositing the money in the bank, and carrying on
what was necessary.
Senator Ives. How large was this fund in the meantime?
Mr. Krieger. I believe between June 1 and December 1, something
like $62,000 or $82,000 had come in on the health and welfare program,
but I wouldn't want to be held to those figures, because the records,
of course, would speak for themselves.
Senator Ives. No money was invested during that period of time?
Mr. Krieger. Those moneys are not invested. They are used to
jnirchase insurance.
Senator I\t<:s. But no insurance was being purchased.
Mr. Krieger. Insurance was purchased all during that time.
Senator Ives. You had already arranged that before you took over
that?
Mr. Krieger. I had not arranged it.
Senator Ives. "Who arranged that ?
Mr. Krieger. As far as I know, it was arranged through Mr. Mor-
ganstern, the broker, and Mr. Greer, the administrator.
Senator Ives. You were operating in a capacity where you were
supposed to do nothing; is that it?
y\r. Krie(;er. I was quite busy during that time.
Senator Ives. I gather you were, but not on that particular work.
]Mr. Krieger. That is correct, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2051
Mr. Kexxedy. Now, during this period of time, did you also make
some trips ?
Mr. Krieger. Yes; I did,
Mr. Kennedy. From May 1949 to December 1950 you took some
trips. Now, did you go to Alaska ?
Mr. Krieger. Yes.
Mr. Kennedy. Was that trip up to Alaska for the Western Con-
ference of Teamsters or for the teamsters ?
]\Ir. Krieger. No ; it was not.
Mr. Kennedy. That was for, again, the K. & L. companies.
Mr. Krieger. Yes.
^Ir. Kennedy. Your expenses up to Alaska and through Alaska,
A\ere tliey paid by the teamsters or were they paid by the K. & L.
companies ?
Mr. Krieger. Referring to my traveling, and the maintenance when
I was there ?
]Mr. Kennedy. Yes.
Mr. Krieger. They were paid by me, and I was reimbursed by the
teamsters.
Mr. Kennedy. By the teamsters?
M)'. Krieger. Yes, sir.
^li'. Kennedy. So the teamsters paid for your trip up through
Alaska Avhile you were doing K. & L. business; is that right?
Mr. Krieger. That is correct.
Mr. Kennedy. The trip started on May 14, 1950, and lasted through
June 2?,, 1950 ; is that correct?
Mr. Krieger. I believe those are the correct dates, and I may be otf
a day or so.
Mr. Kennedy. During that period of time, not only were your
expenses paid b}' the teamsters, but also your salary was paid by the
teamsters ?
Mr. Krieger. Yes, sir.
Mr. Kennedy. What were your duties and what were you supposed
to be doing in Alaska ?
Mr. Krieger. Liquor and beer is sold in the Territory of Alaska on
credit, and we were quite concerned over a good many of the accounts
that K. & L. had in Alaska. I went up there to collect delinquent
accounts and call on the trade, and to confer with all of the banks
throughout the Territory to, in effect, prepare a credit survey of the
firms with which K. & L. Co. did business.
The Chair^nian. In that connection, as I understand it, your trip to
Alaska over that period of time had nothing whatsoever to do with
organized labor or the teamsters' organization ?
Mr. Krieger. No ; it did not.
The Chairman. You went on no mission for the teamsters, and you
performed no service for them ?
Mr. Krieger. I did not.
Mr. Kennedy. Now, you went from Seattle to Juneau, Alaska, which
costs — and we have a mimeographed sheet that gives the expenses for
that trip, Mr. Chairman.
The Chairman. Does the witness have a mimeographed sheet of
figures before him respecting the trip ?
Mr. Krieger. Yes, I do.
2052 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Can you identify or can you verify the figures on
this sheet ?
Mr. Krieger. I cannot verify them, Senator, because I don't know
the rates that were in existence between these points at that time.
Approximately, they seem to be reasonable to me.
The Chairman. In other words, according to j^our best judgment,
these figures would be substantially accurate ?
Mr. Krieger. They appear to be reasonable and accurate; yes, sir.
Senator Mundt. You can verify the points of contact; that you
went to the places listed there. You might not know the exact air
tariff or transportation tariff, but you would know whether you
visited Anchorage and Fairbanks, and Juneau, and Ketchikan, and
the other places fisted.
The Chairman. The Chair asks you the question, then, Did you
visit all of the places mentioned on this sheet?
Mr. Krieger. Yes; the itinerary is correctly stated on the mimeo-
graphed sheet.
The Chairman. You did visit all of those places?
Mr. Krieger. Yes, I did.
The Chairman. On this trip that you are talking about?
Mr. Krieger. Yes.
The Chairman. All right.
Mr. Kennedy. And the totals for that trip are there, Mr. Chair-
man, showing a total paid out of the Western Conference of Teamsters
of $1,500, and out of the Joint Council 28 of $535, making a total for
that trip of $2,053.73.
Mr. Krieger. Of course, the $1,500 is an estimate, and the exact
rates for the tickets are estimates, and I believe the records themselves
will support that. However, this does appear to be reasonable.
Mr. Kennedy. Did jou make any other trips in connection with
the K. & L. business ?
Mr. Krieger. Yes, I did.
Mr. Kennedy. You went to St. Louis ; is that right ?
Mr. Krieger. Yes, sir.
Mr. Kennedy. You went to St. Louis in June of 1949 ?
Mr. Krieger. Yes, sir.
Mr. Kennedy. AYliat was your purpose in going to St. Louis ?
Mr. Krieger. The K. & L. Beverage Co. sold Budweiser beer in
Alaska. It had to sell it on 30-day terms in Alaska. Beer coming
from the brewery i]i St. Louis had to be paid for by cash. That is, it
was shipped by rail, and to get the bill of lading, the order bill of
lading, you had to pick up a sight draft for each cargo of beer.
Mr. Levine and I went to St. Louis and consulted with Mr. Carroll,
the sales manager of the Anheuser-Busch Co., and the credit manager,
whose name I don't recall, in an attempt to see if we couldn't get 30
days' credit from the brewery on beer for Alaska. We were not suc-
cessful in our attempt.
Mr. Kennedy. "VVlio sent you to St. Louis on that trip ?
Mr. Krieger. Mr. Beck.
Mr. Kennedy. INIr. Beck did ?
Mr. Krieger. Yes, sir.
Mr. Kennedy. Wlio had sent you to Alaska on the trip up there ?
Mr. Krieger. Mr. Beck directed me to go.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2053
Mr. Kennedy. So Mr. Beck directed all of your operations during
this period of time ?
Mr. Krieger. Yes.
Mr. Kennedy. So you were reporting to Inm i
Mr. Krieger. Yes. , i i i j: 4.1, 4.
Mr Kennedy. Now, that trip, and we have the schedule here ot that,
Mr Chairman, was paid for by Joint Council 28, approxnnately
$370.46, and the AVestern Conference paid $50, making a total ot
$420.46 for the trip to St. Louis. • a^ t • 9
Did you do any work for the teamsters while you were in St. Louis i
Mr. Krieger. No ; I did not. i .1 ^
Mr. Kennedy. And this money was reimbursed to you by the
teamsters, nevertheless? j-i. ,.^
Mr Krieger. The airplane tickets were purchased on a credit caid,
And what little I had for meals and hotels was reimbursed.
Mr. Kennedy. The credit card was a teamster credit card i
Mr. Krieger. Yes, sir.
Mr. Kenntsdy. So the teamsters paid for this trip.
Mr. Krieger. Paid for the transportation and my expenses.
Mr. Kennedy. Then did you make another trip to Spokane in Jan-
uary of 1950?
Mr. Krieger. Yes, sir. -n.^«
Mr. IvENNEDY. Were you ordered to make that trip by Mr. Lave
Beck himself? . , ,. -, •.
Mr. Krieger. I believe I told him I was going and we discussed it,
ves sir
Mr. i^NNEDY. What was the trip to Spokane for?
Mr. Krieger. That was a convention of the Washington Beer
Wholesalers Association.
Mr. Kennedy. Washington what? , • ^•
Mr Krieger. Washington Beer Wholesalers Association.
Mr. Kennedy. That was a beer distributors' association?
Mr. Krieger. Yes, sir.
Mr. Kennedy. Or wholesalers ?
Mr. Krieger. Yes, sir. • ^i, i. • 1.4.9
Mr. Kennedy. And you went for that convention; is that right?
Mr. Krieger. Yes, sir.
Mr. Kjinnedy. The association's meeting i
Mr. Krieger. Yes, sir. ^.^ ,^ao
Mr. Kennedy. And that cost the teamsters $47.90 i
Mr ICrieger. That would seem .about reasonable, and m addition
to^attending the convention, I did go down to our local branch and
take an inventory there. Our bookkeeper was inquiring mto it and so
I went down and took a physical inventory of all of the beer on hand
Mr. Kennedy. Did you do any work for the teamsters on that trip i
Mr. Krieger. No; I didn't. . i j;ioKn«
Mr. Kennedy. Now, you went to San Francisco m March ot 1950 ?
Mr! Kennedy. And Mr. Beck asked you to go and make tliat trip
also ?
Mr. Krieger. Yes, sir. ,
Mr Kennedy. What was that m connection with ^ • i .
Mr Ivrieger. Honestly, I have never been too sure about it, but we
met with the man who seemed to want us to sell canned tomatoes m
2054 IMPROPER ACTIVITIES IN THE LABOR FIELD
Alaska, and the purpose of the trip was never really too clear in my
mind.
Mr. Kennedy. Did it have anything to do with teamster business ?
Mr. Krieger. No ; it did not.
Mr. Ivennedy. And Mr. Beck asked you to go down there and meet
with some people ?
Mr. Krieger. Yes.
Mr. Kennedy. Regarding Flo-Till canned tomatoes; is that right?
Mr. Krieger. That was the brand name of the tomatoes in question.
Mr. Kennedy. Now, did the teamsters pay for your trip down there
with teamster union funds ?
Mr. Krieger. Yes, sir.
Mr. Kennedy. And that cost the teamsters approximately $128 for
Mr, Beck to send you down there for a meeting on canned tomatoes ?
Mr. Krieger. The amount is approximate, but it appears to be
reasonable.
Mr. Kennedy. Did you do any work for the teamsters there ?
Mr. Krieger. No.
Mr. Kennedy. You used your own automobile for this K. & L. busi-
ness, and tliat amounted to approximately $700 during this period of
approximately 16 montlis?
Mr. Kreeger. That is just a rough estimate. Again, I would say
the records would speak better than I could for that amount.
Mr. IvENNEDY. Unfortunately, the records are not with us any more.
Tliey have been destroyed.
So the total, Mr. Chairman, for Mr. Krieger during this period of
time was approximately $15,375.09 of union funds that were used
while Mr. Krieger was doing work on the liquor and beer business.
I might say that Mr. Krieger has been cooperative with this com-
mittee. When we first went to visit him, he answered all of our
questions.
Senator Ives. Mr. Chairman, I would like to ask a question there.
What does the symbol K. & L. stand for ?
Mr. Krieger. Kessler and Levine.
Senator Ives. Who are they ?
Mr. Krieger. Mr. Levine was and is the present owner of the busi-
ness. Mr. Kessler was a partner who had been there before I went
to K. & L.
Senator Ives. Thank you.
The CiiAiR]srAN. Mr. Krieger, were you paid your salary in checks,
did you say ?
Mr. Krieger. Yes ; on checks of the Western Conference of Team-
sters.
The Chairman. Did you make any inquiry of Mr. Beck why he was
using teamsters' money to pay you to operate a beer business ?
Mr. Krieger. I didn't make an inquiry of him, Senator ; no.
The Chairman. You realized that he was actually using the money
of the teamsters' union to pay your salary and expenses, I assume ?
Mr. Krieger. Senator, twice I had occasion to suggest to Mr. Beck
that the money that I was being paid by the teamsters may be taxable
income as far as he was concerned, and he told me that he would take
care of that part of it, and that it was his intention to reimburse the
teamsters for all of the money that I had received during this period.
The Chairman. He told you it was his intention to do so ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2055
Mr. Kkiegek. Yes.
The Chairman. Do yoii know if he ever did'^
Mr. Krieoer. I do not.
Senator McNamara. Mr. Chairman, does he still work for the
teamsters ? I just want to ask that one question.
]\rr. Chairman, does the Avitness still woik foi' the teamsters' union
or for the fund of the teamsters' union that he mentioned "(
Mr. Krieger. Yes. I am comptroller for the teamsters welfare
office in Seattle and deputy administrator of the Western Conference
of Teamsters pension plan.
Senator McNamara. You are still on the staff?
Mr. Krieger. I still am, yes.
Senator Goldwai'er. Mr. Chairman ?
Senator Kennedy. Mr. Chairman ?
The Chairman. Senator Goldwater.
Senator Goldw^\ter. Do you think that this testimony wall in any
way affect your employment?
Mr. Krieger. I don't know of any reason why it should. After all,
my work at K. & L. was most pleasant and successful. I am certain
that my work now is of a very high standard. In fact, I am quite
proud of it. I see no reason wdiy this would affect my present position.
Senator Kennedy. What was Mr. Beck's interest in K. & L. ?
Mr. Krieger. I believe that Mrs. Beck owned 40-percent control in
K. & L. distributors, and that Dave Beck, Jr., ow^ied 49 percent of
the capital stock of K. & L. Beverage Co. His main interest in it,
however, was that the K. & L. was a large wholesale organization and
must have a substantial line of bank credit. Mr. Beck had guaran-
teed the borrowings of the K. & L. enterprise, that is, he had given his
personal guaranty, which is a general business practice when a closely
held corporation becomes a large borrower.
Senator Kennedy. Did this company make substantial profits dur-
ing the period that you were involved with it ?
Mr. Krieger. Not substantial profits, no. The business was in rea-
sonably good shape and well operated by Mr. Levine. However, they
were seriously undercapitalized and the interest costs tended to keep
their profits down.
Senator Kennedy. But there were profits being made which Mr.
Beck benefited from himself, or at least members of his family, is that
correct ?
Mr. Krieger. If there were any profits made, and I don't have the
records in front of me, then they would inure to their benefit because
they were stockholders.
Senator Kennedy. Were any other members of the teamsters aware
that you were on the teamster payroll but doing work for a company
in which Mr. Beck had a financial interest ?
Mr. Krieger. I don't know whether any other members were aware
of it or not.
Senator Kennedy. Did Mr. Wampold know?
Mr. KRmGER. I think possibly he did know. I am not certain that
he did.
Senator Kennedy. What about Mr. Sam Bassett ?
Mr. Krieger. I don't know.
Senator Kennedy. Were they the board of directors ?
2056 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Krieger. j\Ir. Wampold is an attorney who works with Mr.
Beck, and Mr. Basselt is the attorney for the teamsters union. I
don't believe they are in the records of anything.
Senator Kennedy. You do not know that they knew that while you
were being paid by the teamsters you were working for this company ?
Mr. Krieger. I couldn't say for sure.
Senator Kennedy. I would like to ask the counsel whether they
have been able to find out whether ]Mr. Beck in fact compensated the
company for services of this gentleman.
Mr. Kennedy. The records, of course, of the Western Conference
of Teamsters up to January 1, 1954:, have been destroyed. But from
a review of Mr. Beck's account and an interviewing of the accountant
who kept the books and records, there is no evidence at all that Mr.
Beck paid any of these moneys back to the union for Mr. Krieger's
services.
Senator Kennedy. What are the monthly dues of the members of
the teamsters, do you know ? $3.50 or $4 ?
Mr. Krieger. I belong to local 154 and our dues are $3.75 a month.
I believe most of the other ones are $5 per month or possibly $5.25
per month now.
Senator Kennedy. The fact is, the dues of about 200 mem.bers of
the teamsters were used to pay your salary, while at the same time
you were doing work for a beer company which Mr. Be<!k had a
financial interest in, is that correct ?
Mr. Krieger. Senator Kennedy, I think the committee would have
to place its own interpretation on that.
Senaor Kennedy. The fact of the matter is that you received about
$12,000, which would be equivalent to the annual dues of about 200
or 225 members, and that you were paid union dues money, money
that Mr. Beck and other members of the union leadership had a
fiduciary responsibility for, and this money was used in order to
benefit Mr. Beck directly.
I am not criticizing you, because you were working for Mr. Beck
and going where your employer tokt you to go, and you have stated
twice you suggested that another arrangement be made. But I am
criticizing Mr. Beck, because I think it was a highly improper use
of union fmids in this way, for his own direct financial benefit.
The Chairman. Are there any further questions ?
Senator McNamara. Mr. Chairman?
The Chairman. Senator McNamara.
Senator McNa^iara. The witness indicates that he did not know
whether any other members of the teamsters union knew about him
being on the teamster payroll.
I would like to ask this question : Did not the check bear at least two
signatures ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2057
Mr. Krieger. Yes, it did. Let me qualify my answer. The account-
ant for the Western Conference obviously knew that I was getting
a check, and the checks were signed by Mr. Beck and Mr. Brewster.
Senator McNamara. Thank you.
Senator Mundt. Mr. Krieger, all of these activities you have been
discussing apparently took place during the calendar year of 1950,
is that right?
Mr. ICrieger. Yes. I took over the accounting in the welfare
office on December 1, 1950.
Senator ]\Iuxdt. And at that time, do you know who replaced you
doing the work you were doing, the credit supervisor, or whatever it
was, for K. & L. ?
Mr. Krieger. A gentleman by the name of Noble replaced me.
Senator ]\Iundt. What was his name ?
Mr. Krieger. Noble.
Senator Mundt. Will you spell it ?
Mr. Ivrieger. N-o-b-l-e.
Senator Mundt. Noble. "VMiat was his position with the teamsters ?
Mr. Krieger. I don't believe he had any relationship wdth the
teamsters.
Senator ^Mundt. Do you know anything about his background or
what occupation or profession he came from ?
Mr. Krieger. Mr. Noble is a certified public accountant in Seattle,
and I believe that possibly the bank recommended that he would be
helpful in the affairs of K. & L.
Senator ]\Iundt. And the reason for your discontinuing these activ-
ities is because you were given this new assignment with the team-
sters ?
Mr. IvRiEGER. Yes. I was simply ordered to report to the teamsters'
building and take over the accounting for the welfare office.
Senator Mundt. Since that time, have you had any activities in
connection with the K. & L. Co. ?
Mr. Krieger. No.
(At this point, Senator McNamara withdrew from the hearing
room.)
Senator Mundt. Thank you.
The Chairman. Is there anything further ?
If not, thank you very much, Mr. Krieger. We appreciate your
cooperation. You may stand aside.
Mr. I^iEGER. Thank you. Senator.
(Members present at this point: Senators McClellan, Ives, Ken-
nedy, Mundt, and Goldwater.)
The Chairman. Call the next witness.
Mr. Kennedy. May we have this, Mr. Chairman, made an exhibit ?
The Chairman. The mimeographed document which the witness
has identified may be made exhibit 137, the one that he examined
there before.
2058
IMPROPER ACTIVITIES IN THE LABOR FIELD
( Document referred to follows : )
Stewart Krieger — Teamster funds expended in connection tcith operation of
private companies in which Dave Beck was interested
Total
Funds of—
Western
Conference
of Teamsters
Joint
CouncU
No. 28
Salary from May 16, 1949 to Dec. 1, 1950
$12,025.00
$12,025.00
Expense:
Trip to Alaska.i May 14, 1950 to June 23, 1950:
64.40
37.26
33.12
69.00
57. 50
57.50
34. 50
16.10
7.53
23.29
61. .';3
35.65
56.35
1, 500. 00
$64. 40
Juneau to Sitka and return
33 12
Nome to Fairbanks
57 50
Seward to Anchorage by train
7 53
Juneau to TCetnbikan f Annette TsIpI
35 65
Ketchikan to Seattle
Hotel, meals, etc
1, 500. 00
2,053.73
1, 500. CO
Trip to St. Louis, June 1949 (1 day):
Seattle to Chicago to St. Louis
148. 69
17.88
130. 81
73. 08
50. 00
148. 69
Chicago to Los Angeles
130 81
73.08
50.00
Total, trip to St. Louis
420. 46
50.00
Trip to Spokane, January 1950:
22.90
25.00
22.90
25.00
Total, trip to Spokane
47.90
25.00
22 90
Trip to San Francisco (Flo-Till canned tomato) March
1950:
88.00
40.00
88.00
Expenses
40.00
128. 00
40.00
88.00
Use of own auto on K. & L. business
700. 00
700. 00
15, 375. 09
14, 340. 00
> Krieger borrowed $1,000 from Seattle 1st National Bank. He charged teamsters with $15 interest.
The Chairman. Call the next witness.
Mr. Kennedy. Mr. Irvino- J. Levine.
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate Select Committee shall be the truth, the whole
truth, and nothin<>- but the trutli, so help you God ?
Mr. Le\t:ne. I do.
TESTIMONY OF IRVING J. LEVINE
The Chairman. Mr. Levine, Avill you state your name, your place
of residence, and your business or occupation, please, sir ?
Mr. LE^^NE. My name is Irving J. Levine. I live at 455 140th
Northeast, Bellevue, Wash. I am the president of the K. & L. Co.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2059
The Ch^urman. Have you discussed with members of the staff the
information you have and know generally the line of questioning or
interrogation we expect ?
Mr. Lev^ne. Yes ; I have.
(At this point, Senator Kennedy withdrew from the hearing room.)
The Chairman. You know, too, you have the right to have counsel
present to advise you as to your legal rights, while you testify ?
Mr. LE\^NE. Yes ; I do.
The Chairman. Have you waived counsel ?
Mr. LE^^NE. Yes, sir.
The Chairman. Thank you very much.
Mr. Kennedy, you may proceed.
Mr. Kennedy. Mr. Levine, would you give the committee a little
bit of your background, where you were born ?
Mr. Levine. I was born in Seattle, Wash., I am 44 years of age, I
have lived there all my life. I started in the liquor business in approx-
imately 1940, and am still in the liquor business at the present time,
and beer business, operating companies in Sacramento, Calif., Seattle,
Wash., and the Tei'ritory of Alaska.
Mr. Kennedy. Will you tell the committee when you met Mr. Dave
Beck?
Mr. Le\t:ne. I met Mr. Dave Beck, I believe, the latter part of 1946.
Mr. Kennedy. Wliat were the circumstances under which you met
him?
Mr. LE\aNE. I had been in the beer business and the liquor business
and a mutual friend of ours, Dr. Grinstein, in various discussions from
time to time, suggested that Mr. Beck might have a connection with
Anheuser-Busch brewery and would I be interested in taking on the
distributorship for Budweiser beer. I said, "Naturally, I am inter-
ested in any additional new lines we can get for our company."
He said, "I would like to have you meet Mr. Beck and discuss this
with him."
So a meeting was arranged.
Mr. Kennedy. What was Mr. Beck's position at that time ?
Mr. Levine. I believe he was the president of the Western Con-
ence of Teamsters.
Mr. Kennedy. Did the teamsters have contracts with the various
liquor companies ?
Mr. Le\^ne. I am sure that they did.
Mr. Kennedy. You know that they did ; is that right ?
Mr. Levine. That is right.
Mr. Kennedy. Go ahead.
Mr. Levine. What do you want to know now ?
Mr. Kennedy. You said you met with Mr. Beck.
Mr. Levine. I met with Mr. Beck and Dr. Grinstein. Mr. Beck
told me that he had a young son just out of the service and that he
would like to start him in a beer business and that he had a connection
with Anheuser-Busch, and he thought that he could get the beer
distributorship for Seattle and King County for us. I told him that
would be fine. I told him
Mr. Kennedy. Did he tell you at first who the connection was that
he had?
2060 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Levine. I didn't ask him.
Mr. Kennedy. Did you learn later ?
]yir. Levine. I learned later when I met the gentleman in St. Louis.
Mr. Kennedy. What was the gentleman's name ?
Mr. Levine. Mr. Jim Carroll,
Mr. Kennedy. What was his position with Anheuser-Busch ?
Mr. Levine. Vice president and general sales manager.
Mr. Kennedy. Continue.
Mr. Levine. You throw me off the track, Mr. Kennedy. I forgot
where I left off.
Mr. Kennedy. You were in the midst of saying that Mr. Beck was
describing that he had a contract.
Mr. Levine. Yes. He introduced me to his son and said that if such
an arrangement could be made, that he would like to buy some stock
in the K. & L. BeA^erage Co., and Dr. Grinstein also stated that he
would like to buy some stock in the K. & L. Beverage Co. So we
made a trip to St Louis, Mr. Dave Beck, Sr., Mr. Dave Beck, Jr., and
myself, and met with Mr. Carroll.
Mr. Dave Beck, Sr., merely introduced us to Mr. Carroll and then he
left that following day for parts unknown.
We had quite a discussion, and Mr. Carroll brought out the files
and stated to me that there was about 2 or 3 other applicants for Bud-
weiser Beer for that area. You see, the Anheuser-Busch people,
during the war, had pulled out of the West Coast all distribution of
Budweiser beer, and they were just in the process of coming back into
that area.
So, many distributors in business and people not in business had
put in applications for the distribution of Budweiser beer for the
respective areas on the Pacific Coast, of which we were one of the
applicants, the K. & L. Co.
When we were in St. Louis and went through the files and the
records, and talking about the distribution of Budweiser, Mr. Carroll
said that we were 1 of 3 applicants. I think the other two companies
was Odom and Co., and a company in Everett, Wash., by the name of
Bargreen and Co. Neither of the other two companies even had a
license in King County.
We went through the general discussions of all of these things here,
and at the end of the discussions, I believe he decided to make the
choice of our particular company, to give us the distribution in Seattle
of Budweiser beer.
Mr. Kennedy. He made that decision while you were in St. Louis
at the time ?
Mr. Levine. I believe so.
Mr. Kenedy. Was not one of the applicants the group that had held
the distributorship prior to the war ?
Mr. Levine. I don't think so. But it has been the policy of An-
heuser-Busch to always go back and discuss with their former dis-
tributor if they pulled out of the market if they would be interested
in distributing their beer. That particular company during the war
had taken on another major line of beer, Schlitz beer, and were a dis-
tributor for Schlitz beer, so, therefore, they were not in a position to
take on Budweiser.
Mr. Kennedy. Anyway, you received the distributorship when you
made this trip back to St. Louis at that time and met with Mr. Carroll ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2061
Mr.LEViNE. I think SO ; there or very close to it.
Mr. Kennedy. What was the arrangement with the Becks as tar
as the K.&L. Beverage Co. was concerned'^ . . i a ^tt ^i ^
First, what M^as the K. & L. l^everage Co. to mchicle? Was that
iust going to distribute ,r ^^ n i i i • u
Mr. Levine. K. & L. Beverage Co., Mr. Kennedy, had been m the
business of distributing beer and many other beers outside of Bud-
weiser beer in tlie city of Seattle for a number of years, and Bud-
weiser would be just an additional line that we would distribute m
our area When you ask me about what Mr. Beck, Jr.'s interest was,
at the time we got back from St. Louis, we then discussed the matter
of purchasing stock in our company, and Mr. Beck, Jr., to go to work
in the K. & L. Beverage Co. ^ i • ^i
Mr. Kennedy. Was he going to purchase some stock m the com-
pany ?
Mr. Levine. Yes, sir.
Mr. Kennedy. What were the arrangements that were made<
Mr. Le\^ne. Well, he purchased some stock.
Mr. Kennedy. How much stock?
Mr. Levine. Pie purchased $24,500 worth of stock.
Mr Kennedy. Did anybody else purchase any stock?
Mr. Levine. Dr. Grinstein purchased $24,500 of the stock.
Mr. Kennedy. What percentage of the stock was that?
Mr. Levine. The total combined percentage was 49 percent.
Mr. Kennedy. And you controlled the rest of it, 51 percent?
Mr. L-^.viNK. Thai is ri.'iht. •^- .
Mr. Kennedy. Did Dave Beck, Jr., receive any title or position at
that time ?
Mr. Levine. Vice president. _ • i • i •
Mr. Kennedy. So von went along in business, or continued m busi-
ness, through 1947 and 1948, is that right, and 1949 ?
Mr. Levine. Yes, we were in business.
Mr. Kennedy. A'Vliat?
Mr. Levine. Yes, we were in business. ,
Mr. Kennedy. Mr. Beck's vdfe, did she start to go into business
with you, or come into business with you ? , ^ ^ t ^ n r
Mr. Levine. Approximately a year and a half or 2 years later, Mrs.
Beck purchased stock in the K. & L. Distributors.
Mr. Kennedy. I am sorry ? i . tit -o i
Mr. Levine. Approximately 18 months to 2 years later, Mrs. Beck
purchased stock in the K. & L. Distributors.
Mr. Kennedy. That is a different company, that is different from
the K. & L. Beverage Co. ?
Mr. Levine. That is right. , t -, , i • •
Mr. Kennedy. ^Vliat percentage of the stock did she purchase in
that?
Mr. Levine. Forty percent. .
Mr. Kennedy. What was the K. & L. Distributing Co. ? What were
they supposed to do ? . ^ ■,- j. -x. .-
Mr Levine. K. & L. Distributing Co. was a distributing company,
distributing alcoholic beverages in the Territory of Alaska
Mr Kennedy. What was the reason that Dave Beck, Jr., or ur.
Grinstein— what was the reason that they did not get into the K. 6c L.
Distributing Co. instead of Mrs. Beck ?
2062 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Levine. The original transactions were that Dave Beck, Jr..
was going to go into the K. & L. Distributors, also, but there is a law
in the State of Washington that was passed in April of 1945, that
anybody in the beer business could not be in the liquor business, and
vice versa. So, therefore, it had to be another name in the K. & L.
Distributors.
Mr. Kennedy. So it was decided that it would be in the name of
Mrs. Beck, is that right ?
Mr. Le^^ne. I believe so.
Mr. Kennedy. Is that not what happened ?
Mr. Levine. That is what the record shows, sir.
Mr. Kennedy. AH right.
Senator Mundt. The law says that it is okay just so they have a
different name. Do I understand that is what you are trying to tell us ?
Mr. Levine. No, the law doesn't state that, Senator. The law says
that any individual that is a stockholder in a beer company cannot be
a stockholder in a liquor company — I can further elaborate on that —
unless they were in business prior to April 1 1945.
Senator Mundt. Was Dave Beck, Jr., in both of these companies?
Mr. Levine. Dave Beck Jr. came into the K. & L. Beverage Co..
after April 1, 1945.
Senator Mundt. He was also with the K. & L. Distributing Co. ?
Mr. Levine. No, sir.
Senator Mundt. It was his mother who was in the K. & L. Dis-
tributing Co.
Mr. Levine. That is right.
jNIr. Kennedy. When you first received the franchise from An-
heuser-Busch, was it just for the Seattle area ?
Mr. Levine. That is the only market they came in; that is right.
Mr. Kennedy. Did you get distributorships in other areas after that
time?
Mr. Levine. Yes, sir.
Mr. Kennedy. In what other areas ?
Mr. Levine. Pasco, Wash.; Bremerton, Wash.; Tacoma, Wash. j-^
Spokane, Wash. ; and the Territory of Alaska.
Mr. Kennedy. Did Mr. Beck assist you in getting those distribu-
torships ?
Mr. Levine. I believe he did.
Mr. Kennedy. Did he have conferences with Mr. Carroll and offi-
cials of the Anheuser-Busch people to get those distributorships ?
Mr. Levine. I presume so, Mr. Kennedy. He helped.
Mr. Kennedy. You understand that that is what he was doing ; is
that right?
jNIr. Levine. I naturally would think that he would try to help his
son's interest, the company's interest, at all times, and I presume he
did discuss this with ^Ir. Carroll.
Mr. Kennedy. During tliis i)eriod of time, were tliere any major
decisions made in either the K. & L. Beverage Co. or the K. & L. Dis-
tributing Co. that Mr. Beck wasn't consultant on ?
Mr. Levine. Any major decisions?
Mr. I^NNEDY. Yes. Any major decisions that were made.
Mr. Levine. I don't believe so.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2063
Mr. Kennedy. Mr. Beck was consulted on everytliing- tliut was
done in the company of anytliini^ more than a minor nature; is that
rioht ?
Mr. Levine. Yes. He Avas consulted from time to time for his
advice and coiisultations.
Mr. Kennedy. And for any decisions that you would make as to
where yon would want to get further distributorships or the fact that
you were going to Alaska, Mr. Dave Beck, Sr., was consulted and his
advice obtained on all of those mattei-s?
Mr. Levine. I believe we had discussions quite often on that.
Mr. Kennedy. Were there any instances when it was difficult to get
beer out in Seattle and out in the State of Washington? Did Mr.
Beck assist you in that ?
Mr. Levine. Well, if it was shoit, if there was a shortage of beer
when we first started in, and Ave weren't getting enough, I would call
him on the phone and ask him if he could use his influence to get us
some more beer, which was only natural.
Mr. Kennedy. I am not saying anything is umiatural. I am just
asking the questions. But he did assist you in that; is that right?
Mr. Levine. Yes.
Mr. Kennedy. Was that also through his contacts with the x\n-
heuser-Busch people that he was able to get those things for you ?
Mr. Levine. I believe so, sir.
Mr. Kennedy. Did he also have contacts that he spoke to you
about with other concerns in Seattle that he felt that he might get
them to accept Anheuser-Busch ?
Mr. Levine. To accept Anheuser-Busch ?
Mr. Kennedy. To take Anheuser-Busch beer ?
Mr. Levine. I don't think that was necessary.
Mr. Kennedy. Were there any hotels that he went to?
Mr. Levine. We Avould have lunch at various hotels, the Olympic
Hotel, and in the discussion we might mention to the maitre cl' about
other products that we sell, and ask him to use our products, and he
helped along those lines.
Mr. Kennedy. During this period of time he Avas assisting you.
Was there a later period of time when you weren't getting along
terribly Avell Avitli JNIr. Dave Beck, Sr. ?
Mr. Levine. We had many differences.
Mr. Kennedy. You had differences?
Mr. Levine. Yes, sir.
(At this i^oint. Senator Goldwater AvithdrcAv from the hearing
room.)
Mr. Kennedy. Mr. Dave Beck, Sr., was he anxious to have his son
made president of the company and assume certain duties with the
company ?
Mr. Levine. Well, yes. In one of our meetings he asked that his
son be appointed president of the company in charge of drivers and
trucks.
Mr. Kennedy. That he take over the position of president of the
company ?
Mr. Levine. Yes, sir.
89330— 57— pt. 7 0
2064 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Was that in May of 1950 ?
Mr. Levine. I think approximately that time.
Mr. Kennedy. Or May of 1949?
Mr. Levine. I think so.
Mr. Kennedy. May 9, 1949.
That meeting that yon had with him ; was that at the K. & L. offices ?
Mr. Levine. I think that particular meeting you are referring to
was held at the teamsters hall.
Mr. Kennedy. You went down to the teamsters headquarters in
order to have the meeting on the K. & L. Beer Co. ?
Mr. Levine. Yes. I was called up and told there was an emer-
gency meeting and to attend this meeting at the teamsters hall. So
I picked up my attorney and brought him up to this meeting at the
teamsters hall.
Mr. Kennedy. Were you having any trouble during that period
with the teamsters union ?
Mr. Levine. Just minor troubles. At this particular time, due to
slack of business, I wanted to discharge a few employees, and Mr.
Dave Beck, Jr., was very much against it. No doubt he probably
went to his father to tell him the story, and what a son tells his father
I don't really know ; but after that we had a meeting.
Mr. Kennedy. Tell me this: Prior to the meeting, was the team^
sters union giving your company any difficulty ?
Mr. Levine. No. I had the most amiable of relationships with the
teamsters union ever since I have been in business. I still do.
Mr. Kennedy. On that particular day, were you liaving any diffi-
culty getting one of your trucks unloaded ?
Mr. Levine. Yes. An incident took place.
Mr. Kennedy. Would you describe that to the committee ?
Mr. Levine. Well, during the course of discussion at this meeting,
when Mr. Beck got quite angi-y and demanded certain things, and I
refused to go along with his demands, I had received a telephone call
from my brother. We ship our whisky from our warehouse down
to the dock and it goes on board a ship to Alaska. This particular
truckload of whisky was loaded and they went down to the dock, but
they refused to unload the truckload of whisky at the dock.
Mr. Kennedy. Was that the teamsters union ?
Mr. Levine. I don't know exactly who refused to unload it, but it
came back to our place of business.
Senator Mundt. "Wliat reason did they give for refusing to unload
it ? They must have had a reason,
Mr. Levine. I think I can elaborate on this. Senator, as we go along,
so you will get the point.
So I received a telephone call in Mr. Beck's office from my brother,
telling me about the situation. So I mentioned it to Mv. Beck at
that time and Mr. Beck says, "Well, you see what I mean, Levine;
you don't get along very good with the members of local 174 and my
family is stockholders in your company. We have got to protect our
interest."
So I turned to my lawyer, and I asked him wliat my status was.
He says, "Your status, legally, you can do what you want, but it
would be a very difficult situation."
At that time, also, Mr. Beck, Sr., together with my wife's signature
and myself were guarantors at the Seattle First National Bank for a
IMPROPER ACTIVITIES IN THE LABOR FIELD 2065
considerable amount of money. So I asked Mr. Beck, I said, in tliese
words, "Well, you win; what do you wantT' He said, "I would like
to have my son as president of this company until such time as you can
get me off of the signature at the bank, and to protect our interest,
Snd to have him have the complete say-so of drivers and of trucks."
So I agreed at that time, that that is what I would do. That is what
T had to do.
Senator Mundt. But you had not been employmg nonunion truckers
before that?
Mr. Levine. No, sir.
Senator Mundt. Did the truckers themselves down at the dock tell
whoever was representing you why they were not going to unload that
particular truckload of whisky ?
Mr. Levine. I don't know the exact circumstances. Senator, because
I was up at the meeting at the teamsters' hall. ^^Hien I got back down
to the office late that afternoon, all the matters had been cleared up,
and I just didn't want to go back there to have any discussion about it.
The Chairman. Senator Ives?
Senator Mundt. Do you think in your own mind, Mr. Levine, that
there was a connection between that refusal and the conference at the
teamsters' office that afternoon ?
Mr. Levine. Well, I presume so.
Senator Mundt. You would not know, but I am just asking whether,
in your own mind, you have arrived at that type of conclusion.
Mr. Le\t:ne. I would say "yes."
Senator Mundt. Was the truck subsequently unloaded the next
day?
Mr. Levine. I beg your pardon ?
Senator Mundt. Was the delivery made satisfactorily the next day ?
Mr. Levine. Yes, sir.
Senator Mundt. You got it unloaded, all right ?
Mr. Levine. Yes, sir.
Senator Mundt. But not the day of the conference ?
Mr. Levine. No, sir.
The Chairman. Senator Ives ?
Senator Ia^es. Mr. Levine, this is not directly on the questioning you
have been receiving, but applies generally to your appearance here.
I would like to ask you if you still are associated in business with
Dave Beck, Jr.
Mr. Levine. No, sir.
Senator Ives. Do you have any idea where he could be found ?
Mr. Levine. I really don't know.
Senator I\'ES. Thank you.
The Chairman. Counsel, you may proceed.
Mr. Kennedy. On Senator Mundt's point, after Mr. Dave Beck,
Jr., was made president of the company, the truck was unloaded ; is
that correct, you were able to get the truck unloaded ?
Mr. Levine. I would say the next day.
Mr. Kennedy. During the period of 1949-50, did Mr. Beck have a
personal representative at your company in the form of Mr. Krieger?
Mr. Levine. Yes, sir.
Mr. Kennedy. And did you pay Mr. Krieger any of his salary or
any of his expenses ?
Mr. Levtne. No, sir.
2066 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Did you understand that during this period of time
that he was working at your company that he was being paid by the
teamsters ?
Mr. Levine. That I didn't know, who paid him.
Mr. Kennedy. But you were not paying him ?
Mr. Levine. That is right.
Mr. Kennedy. The company was not paying him ?
, Mr. Levine. That is right.
Mr. Kennedy. Did you understand in one convei-sation that you
had with him that the teamsters union was paying him ?
Mr. Levine. I don't recall that, Mr. Kennedy.
Mr. Kennedy. You never knew ? You never inquired ?
Mr. Levine. I never saw any of his checks and didn't know who
paid him.
Mr. Kennedy. All you knew was that you were not paying him ?
JNIr. Levine. That is right.
Mr. Kennedy. Did you ultimately buy Mrs. Beck out of the K. & L.
Distributing Co., and buy Dave Beck, Jr., out of the K. & L. Bever-
age Co. ?
Mr. LE\^NE. Yes, sir.
Mr. Kennedy. Will you describe that to the committee, please ?
Mr. Lem:ne. What do you wish
Mr. Kennedy. When this occurred, and how much money you had
to pay.
Mr. Levine. The final negotiations on the completion of the stock
transaction of the K. & L. Beverage Co. took place in about Septem-
ber 1954, at which time I purchased the stock. I mean the K. & L.
Beverage Co. purchased the stock of Dave Beck, Jr.
Mr. Kennedy. How much did you pay for that ?
Mr. Levine. $112,500.
Senator Mundt. How much of a capital gain did that represent to
Mr. Dave Beck, Jr. ? How much had he paid for it originally ?
Mr. Le\t:ne. I believe he paid $24,500 for his share, and I under-
stood later he purchased Dr. Grinstein's share of his stock. What he
paid Dr. Grinstein for it, I do not Iviiow.
Senator Mundt. Did Dr. Grinstein have as much stock as Mr. Beck
or less ?
JNIr. Levine. Exactly the same amount.
Senator Mundt. So that Beck originally paid your company $24,000
for his investment in the company ; is that right ?
Mr. Levine. Dave Beck, Jr.
Senator Mundt. Dave Beck, Jr. ?
Mr. Levine. Yes, sir.
Senator Mundt. Did Dr. Grinstein also pay your company $24,000
for his share?
Mr. Levine. $24,500, too.
Senator Mundt. And the $112,500 that Dave Beck charged you was
for his stock, or for his stock plus the stock of Grinstein ?
Mr. Levtne. He, during the interim sometime in those years, he
had purchased Dr. Grinstein's stock, Dave Beck, Jr. So, therefore,
Dave Beck, Jr., owned the 49 percent of the K. & L. Beverage Co.
Senator Mundt. So what you actually bought for $112,500 was the
stock that the two gentlemen had paid $48,000 for ?
Mr. Levine. That is right. $49,000.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2067
Senator Mundt. And they had held that stock for how long?
Mr. Levine. Approximately 8 or 10 yeai-s, wasn't it ? I don't recall
the exact dates.
Mr. Kennedy Eight years.
Mr. Levine. Eight years.
Mr. Kennedy. What about Mrs. Beck? You bought her out of
K.&L.
Mr. Levine. I purchased Mrs. Beck's stock in Januaiy of 1956. I
think the complete negotiations were closed then.
Mr. Kennedy. How much did you pay for that?
Mr. LE^^NE. $65,000.
Mr. Kennedy. How much had she paid for it?
Mr. Levine. $-10,000.
Mr. Kennedy. During this period of time that Mr. Beck, Sr., was
interested through Mrs. Beck, or Mrs. Beck was interested and Dave
Beck, Jr., was interested, in your company, did Mr, Beck urge that
you have certain representatives on your board of directors?
Mr. Levine. Yes, he did.
Mr. Kennedy. Did you accept them ?
Mr. Levine. Yes, I did.
Mr. Kennedy. Who were they ?
Mr. Levine. Well, there were various people throughout the period
of time. There was Mr. Krieger, there was Mr. Loomis.
Mr. Kennedy. Is that Fred Loomis ?
Mr. Levine. That is right.
Mr. Kennedy. Was he associated with the teamsters union at the
time?
Mr. Le\t:ne. No, sir.
Mr. Kennedy. He was not. You did not know that he was working
for the Teamsters at the time ?
Mr. Levine. I understood him to be an investment counselor for
Mr. Dave Beck.
Mr. Kennedy. He was the investment counsel for Mr. Dave Beck.
He was not associated with the teamsters?
Mr. Levine. To my knowledge he was not.
Mr. Kennedy. What about Mr. Wampold ?
Mr. Levine. Mr. Wampold was later put on the board of directors.
He was an attorney for Mr. Dave Beck. Mr. Noble
Mr. Kennedy. Wait a minute.
Mr. Simon Wampold was the attorney for the teamsters, Avas he
not?
Mr. Levine. I believe so. I don't know exactly what his official
capacity was.
Mr. Kennedy. Mr. Chairman, he was an attorney for the teamsters.
He was not being paid by Mr. Dave Beck. He was an attorney for
the teamsters.
Senator Mundt. Over how long a period was Mr. Krieger director ?
Mr. Levine. Mr. Krieger was with our company for about 18
months.
I would like to make this point clear because I was listening to Mr.
Krieger's testimony.
Senator Mundt. That did not come out in the testimony. That is
why I asked you about it.
2068 IMPROPER ACTIVmES IN THE LABOR FIELD
Mr. Levine. At no time did any of these gentlemen that were
there have any rights to make any decision without consulting me
and discussing it with me, and merely acted in an advisory capacity
in our companies. They had no contacts or nothing to do with sales
or management of the company, but merely acted in an advisory
capacity, and for the protection, at the request of Mr. Dave Beck,
because Mr. Dave Beck's guarantv was at the Seattle First National
Bank. As soon as Mr. Dave Beck's guaranty was removed, at no time
was there any outside gentleman in the company.
And at no time did we pay any of these gentlemen any salaries
at all in our company, with the exception of Mr. Noble, who was there
for a short period of time and was an independent certified public
accountant.
Senator Mundt. Did Mr. Stewart Krieger get a director's fee?
Mr. Le\t:ne. I beg your pardon ?
Senator Mundt. Did he get a director's fee ?
Mr. Le\ine. No, sir.
Senator Mundt. "Was his work, as far as you know, limited to the
recital that he gave this afternoon, of making these trips, establish-
ing credit relations, and things of that type ?
Mr. LE\^NE. It so happened Mr. Krieger was a very capable man
and a very fine gentleman, and we used his services and advice where
we could, but these particular trips were for finding out definite infor-
mation, due to the financial structure of our business and the large
sums of money we borrowed from the bank, and Mr. Beck having
been a guarantor at the bank, the same as both my wife and I. We
had nothing to hide in our companies and saw no objections to him
doing anything he wanted to in that nature, as long as he wanted
to, as long as we didn't have to pay for it.
Senator Mundt. That is pretty cheap service.
You look to me like a pretty competent individual, too. You made
a good bargain.
Mr. Levine. Thank you.
Mr. Kennedy. On the $112,500 that you paid for Mr. Dave Beck,
Jr.'s, interest, did you have that money of your own ?
Mr. Levine. No, I didn't.
Mr. Kennedy. Did you raise that money ?
Mr. Levine. On that money, I talked to the Anheuser-Busch people,
and they froze credits for our company to the tune of $112,500 for
a period of 18 months of which I signed a note and paid back in 18
monthly installments.
Mr. Kennedy. Did you have discussions with them that you were
going to buy Mr. Dave Beck out ?
Mr. Levine. Definitely.
Mr. Kennedy. Were they interested in having Mr. Dave Beck out of
that also ?
Mr. LE^^NE. I don't know if they Avere interested in having Mr.
Dave Beck out, because Mr. Dave Beck wasn't in, but the boy was
in. I think they were interested in helping me out, because we were
doing a real good job, and have continued to do a real good job as a
distributor of Anheuser-Busch products.
Mr. Kennedy. They made some arrangements with you so that you
could get the $112,000 in order to pay Mr. Dave Beck, Jr., for his
interest ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2069
Mr. Levine. I just stated that to you, ]Mr. Kennedy. They froze
credits for me to the tune of $112,500, which is many times a common
practice of bio- companies.
Mr. Kennedy. Can I restate it ? They made some arrangements
with you that couldn't have been made under tlie circumstances that
existed prior to that time, they made some arrangements, Anheuser-
Buscli did, with you, so that you could get the $112,500 to Vmy Mr.
Dave Beck, Jr., out ?
Mr. Lem^ne. Yes, sii-.
The Chairman. Are there any further questions ?
Senator Mi'ndt. Those latter arrangements, as I understand it, you
made direct with Anheuser-Busch, they were not made by either of
the Becks : is that right ?
Mr. Lavine. No, sir.
Senator Mundt. It is like any other distributor that might go in
to a manufacturer, and if they want to do it they help him establish
that?
Mr. Levine. That is right, sir.
Senator Mundt. I did not know whether there was an implica-
tion in that that either one of the men had also participated in the
conferences to induce Anheuser-Busch to make the loan. I wanted
that straight in the record one way or another.
Mr. Le\t;ne. Senator, if they did, it was without any knowledge
of mine, but I don't think so.
Senator Mundt. The idea to buy out Beck was a Levine idea or a
Beck idea ?
Mr. Levine. I think it was my idea.
The Chairman. Thank you very much, INIr. Levine.
Senator jSIundt. Mr. Levine, who is the K. man in K. & L.?
Mr. Levine. When I first started in business, I had a partner by
the name of Jack Kessler, and we established this trade name of K.
& L. Since then, he was purchased out of the company, but we have
always maintained the trade name of K. & L.
Senator Mundt. So it is really your firm now, you and your family,
and the K. is not involved ?
Mr. LE\aNE. That is right, sir.
Thank you, gentlemen.
The Chairman. The committee will stand in recess until 10 o'clock
ill the morning.
(Whereupon, at 3:40 p. m., the committee recessed, to reconvene
at 10 a. m., Thursday, May 9, 1957.)
(Members present at the taking of the recess : Senators McClellan,
Ives, and Mundt.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
THURSDAY, MAY 9, 1957
United States Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington^ D. G.
The select committee met at 10 a. m., pursuant to Senate Reso-
lution 74, agreed to January 30, 1957, in the caucus room. Senate
Office Building, Senator John L. McClellan (chairman of the select
committee) presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Iriving M. Ives, Republican, New York ; Senator John F. Kennedy,
Democrat, Massachusetts; Senator Sam J. Ervin, Jr., Democrat,
North Carolina ; Senator Pat McNamara, Democrat, Michigan ; Sena-
tor Karl E. Mundt, Republican, South Dakota ; Senator Barry Gold-
water, Republican, Arizona; Senator Carl T. Curtis, Republican,
Nebraska.
Also present: Robert F. Kennedy, chief counsel; Jerome Adler-
man, assistant counsel; Carmine Bellino, accounting consultant;
Ruth Young Watt, chief clerk.
(Members present at the convening of the session: Senators Mc-
Clellan, Ives, Kennedy, and Curtis.)
The Chairman. The committee will be in order.
The Chair is very happy to announce that Senator Carl Curtis, the
junior Senator from Nebraska, has been appointed to fill the vacancy
on the committee occasioned by the death of the late Senator Mc-
Carthy.
Senator Curtis, personally and on behalf of the committee, we ex-
tend to you a welcome and invite you to help us carry the load that
the responsibilities of this committee have placed upon us.
Mr. Counsel, call your next witness.
Mr. Kennedy. Mr. Ingamills.
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate select committee shall be the truth, the whole
truth, and nothing but the truth, so help you God ?
Mr. Ingamills. I do,
TESTIMONY OF DWIGHT DAVID INGAMILLS
The Chairman. Mr. Ingamills, will you state your name, and your
place of residence and your business or occupation ?
Mr. Ingamills. Dwight David Ingamills, and I live in Kirkwood,
Mo., and I am a lawyer, general counsel for Anheuser-Busch.
2071
2072 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Have you talked with membei*s of the stall', and
do you know generally the line of testimony that the committee is
interested in ?
Mr. Ingamills. I believe I do, sir.
The Chairman. I believe you stated that you are a lawyer, and I
assume you do not feel the need of legal counsel to advise you of your
rights as you proceed to give your testimony ?
Mr. Ingamills. I don't believe I do, Senator.
The Chairman. Thank you very much.
All right, Mr. Counsel.
Mr. IvENNEDT. Mr. Ingamills, you are the general counsel of An-
heuser-Busch, is that correct?
Mr. Ingamills. I am, sir.
Mr. IvENNEDT. In St. Louis ?
Mr. Ingamills. Yes, sir. For the wliole company.
]Mr. Kennedy. For the whole company, and the headquarters are
in St. Louis ?
Mr. Ingamills. Yes, sir.
Mr. I^nnedy. You are familiar with the fact that Mr. Dave Beck,
Jr., had an interest in a beer distributorship for xlnheuser-Busch in
the State of Washington ?
Mr. Ingamills. I believe tlie records at Tacoma reveal that.
Mr. Kennedy. You are familiar yourself with that fact ?
Mr. Ingamills. I have looked at those records which I produced
for you.
Mr. Kennedy. And you also have gone through the records of the
Anheuser-Busch Co., or people under your jurisdiction have gone
through those records and you have produced them for the committee,
is that right ?
]\Ir. Ingamills. Yes, sir. I have exposed them to Mr. Salinger
and he lias selected the ones that he wanted us to bring with us.
Mr. Kennedy. That was done pursuant to a subpena served upon
Anheuser-Busch personnel, is that right ?
Mr. Ingamills. Yes.
Mr. Kennedy. Now, Mr. Chairman, we have certain documents
that we would like to have placed in the record. Mr. Pierre Salinger
of the committee staff has some of tliose documents in his possession,
and I thought perhaps Mr. Ingamills and Mr. Salinger betMeen them
can get these documents, the ones that we want made a part of the
record.
Could we have Mr. Salinger sv/orn?
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate Select Committee sliall be the truth, the whole
truth, and nothing but the truth, so help you God ?
Mr. Salinger. I do.
TESTIMONY OF PIERRE SALINGER
The Chairman. State your name and your place of residence, and
your business or occupation.
Mr. Salinger. My name is Pierre Salinger, and I live in Washing-
ton, D. C, and I am a member of the staff of this committee.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2073
The Chairman. All right, Mr. Counsel, you may proceed.
Mr. Kennedy. jVIr, Chairman, these documents that Ave are going
to introduce bear on the distributorship from Anheuser-Busch, which
Mr. Dave Beck, Jr., and Mr. LcA'ine had in the State of Washington.
They will also indicate or show the extent of the direction and con-
trol t}iat Mr. Dave Beck, Sr., had over this distributorship.
Mr. Ingamills M^ill identify tliese documents as being taken from
the files of Anheuser-Busch, and Mr. Salinger will read some of those
•documents into the record.
The Chairman. All right, proceed with your first document.
What do you have in your liand, Mr. Salinger ?
Mr. Salinger. I have in my hand a telegram to Mr. Carroll, execu-
tive office, Anheuser-Busch Brewery, signed by Mr. Dave Beck.
The Chairman. Mr. Ingamills, there is being presented to you
what purports to be a photostatic copy of a telegram dated Jan-
uary 1.5.
Mr. Salinger. The year is not on there, but it is 1947.
The Chairman. Purportedly sent in January of 1947. Will you
identify that telegram, please, sir?
Mr. Ingamills. This is a photostatic copy of the original of a
telegram that I secured from the files of Anheuser-Busch, for Mr.
Salmger's use, and the committee's use, and I have the original with
me.
The Chairman. You have the original of that in your file?
Mr. Ingamills. I have it with me, sir.
The Chairman. That telegram may be made exhibit No. 138.
Do you wish it read into the record ?
Mr. I^NNEDY, If I could suggest, there are approximately 10
documents, all of which Mr. Ingamills has seen and reviewed, and
if he could verify that they have been taken from the files of Anheu-
ser-Busch, en masse, then we could move on and Mr. Salinger could
read certain passages from the documents and expedite the matter.
The Chairman. Mr. Ingamills is being presented a numberof docu-
ments. Will you examine those documents and state whether you
identif}^ them as having come out of the files of the Anheuser-Busch
Co., or your own files, relating to its business.
Mr. Ingamills. These are all photostatic copies, Senator, of original
records that I secured from the files of Anheuser-Busch for the
committee's use.
The Chairman. Thank you very much.
How many are there, Mr. Salinger ?^
Mr. Salinger. There are approximately 10 different exhibits there,
and some of them are 2 pages and some are 1 page.
Mr. Kennedy. Now, I would like to move on, and have Mr. Salinger
just identify what it is, whether it is a letter or telegram, and identify
to whom it is written and from whom, and the date, and then if you
are reading the whole thing, state that, and if you are reading just an
excerpt, state that.
The Chaiirman. Let tlie record show at this point that he is read-
ing from the documents identified by the witness, Mr. Ingamills.
This one will be made exhibit 138.
2074 IMPROPER ACTIVITIES IN THE LABOR FIELD
(The document referred to follows.)
Mr. Salinger. First I have committee exhibit 138, a telegram:
from Mr. Dave Beck to Mr. Carroll, executive office, Aiiheuser-Busch,.
and I will read the entire telegram.
I am leaving at noon via Eastern Airlines for Miami. I will be at Alcazar
Hotel or word sent there will reach me. I sincerely trust Spokane will be
available and will organize new company or purchase one if more desirable to
you. Guarantee adequate capital, competent management and splendid dis-
tribution. Tacoma O. K. Local competitive distributors of course did not
like to see real competition. Mayor of Tacoma was and is very cooperative.
Also Governor Wallgren is 100 percent with us. I guarantee same status in
Spokane. I will appreciate word on Spokane as soon as possible as we are
ready to start work on it. Thank you for your courtesy and friendship. Call
on me any time. Dave Beck.
The Chairman. Mr. Ingamills, does that refer to a beer distributor
franchise ?
Mr. Ingamills. We don't liave any francliises, Senator. We ap-
point a distributor on an order-to-order basis, terminable at the will
of either party. It is a little difficidt. Senator, to understand because
most companies have either contracts or franchises, but we don't.
The Chair?lan, You referred to appointing him or his company^
one that he would eitlier buy or organize as the distributing agent for
the products of Anheuser-Busch.
Mr. Ingamills. That is right, sir.
The Chairman. Proceed.
Mr. Salinger. I liave in my hand another telegram dated Januaiy
16, 1947, addressed to Dave Beck, Alcazar Hotel, Miami, Fla., signed
by J. J. CaiToll, vice president, Anheuser-Busch, Inc.
Do you want to give these a number as I o-q alonff ?
The Chairman. That may be 138-A.
(The document referred to follows:)
Mr. Salinger. I Avill read the entire telegram.
Satisfactory to go ahead on Spokane. It makes no difference to us whether
you organize new company or purchase one or estabish Spokane branch of your
Seattle parent company. Use your own good judgmeut. Spokane territory
consists of following counties: Stevens, Pend Oreille, Spokane, Adams, and
eastern half of Lincoln County. When you are all ready at Spokane, let me
know when first car is to be shipped, when newspaper advertisement in Spokane
is to be released, local address of warehouse, and so on. Best we can do for
Spokane will be allotment of two cars per month, each car 1,540 cases. Regards.
J. J. Carroll, vice president, Anheuser-Busch. Carbon copy to Mr. G. O. Hinz-
peter.
Mr. Kennedy. Now, Mr. Ingamills, the records show that the fran-
chise or the distributorship was given to Mr. Dave Beck, Jr., although
this telegram was addressed or came from Dave Beck, Sr., and tlie
reply was addressed to Dave Beck, Sr., also.
Mr. Ingamills. It was given to some company in wliich Mr. Beck
had an interest.
Mr. Kennedy. Dave Beck, Jr., I think the record shows that.
Mr. Ingamills. I don't know whether it is Tacoma or Spokane, but
that is substantially correct.
Mr. Kennedy. Does the record show that the distributorship was
given to Mr. Dave Beck, Jr. ?
Mr. Salinger. Spokane was given to K. & L. Beverage Co., of which
Dave Beck, Jr., was an officer.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2075
Mr. Kennedy. And in which Dave Beck, Sr., ostensibly had no
interest ?
Mr. Salinger. That is right. -r^ -, ^ ■,
Mr. Kennedy. But these telegrams to tlie,x\nheuser-Busch Co. and
from the Anhenser-Biisch Co. were addressed to Dave Beck, Sr., is
thatri^ht?
Mr. Salinger. Yes, sir.
Mr. Kennedy. What was Dave Beck, Sr.'s position at that tune?
Mr. Salinger. At that time he was chainnan of the Western Con-
ference of Teamsters.
Mr. Kennedy. Would you continue with the documents ?
The Chairman. Mr. Ingamills, I luive one other question. Mr.
Dave Beck actually carried out all of the negotiations with Anheuser-
Busch for these disti-ibutorships, is that correct?
Mr. IxGAMiLLS. Well, Senator, I didn't carry out the negotiations,
and Mr. Carroll did, but from this correspondence, not only what is
being produced here but what we exhibited, Dave Beck was conferred
Avith constantly and was referred to in these various telegrams and
letters.
The Chairman. In other words, the bulk of the negotiations, at
least according to the records, were made with Dave Beck, Sr. ?
Mr. Ingamills. I would say that was a fact. Senator.
The Chairman. All right.
Mr. Salinger. I have a letter dated April 24, 1947, to Mr. Irving J.
Levine, K. & L. Beverage Co., Seattle, Wash., signed by Mr. J. J.
Carroll, vice president and sales manager of brewery division.
The Chairman. That may be made Exhibit 138-B.
(The document referred to follows:)
This letter I will read in its entirety.
Dear Mr. Lkvine : At Mr. Dave Beck's request I am giving you an extra car
of Budweiser bottle beer over your May allotment in order to have some extra
Budweiser in the retail outlets during the visit of the Clydesdales to your city.
Regards.
Cordially yours,
J. J. Carroll.
Mr. Salinger. I have here a memorandum from Mr. J. J. Carroll,
to Mr. W. L. Suycott, and it is an interoffice memorandum of the
Anheuser-Busch Co., dated June 22, 1948, subject: K. & L. Beverage
Co., and I will only read certain portions of this one.
No. 2: Frankly, we believe that we have already given them sufficient
territory.
Mr. Kennedy. Is this talking about the K. & L. distributorship?
^Nlr. Salinger. Ye.s, sir.
You are familiar with their present territorial lines. If you do not have a
record of their present territory, you can get it from .Jensen. We would like to
remain on as friendly terms as possible with Dave Beck, his son, and Irving
Levine, and I think you can make it clear to them in a very diplomatic way that
we have already given them more territory than we have given to any dis-
tributor throughout the United States, and that we incur a certain amount of
illwill from resident wholesalers, for instance in Spokane, when we permit a
wholesale merchant from Seattle to go into Spokane and act as our distributor.
Quite logically, the wholesalers who are outstanding citizens in their own
community resent outsiders coming in and taking all of the profits and the
cream.
The Chairman. Tliat will be made exhibit 138-C.
2076 IMPROPER ACTIVITIES IN THE LABOR FIELD
(The document referred to was marked "Exhibit 138-C" for refer-
and will be found in the appendix on pp. 2451-2452.)
Senator Kennedy. Mr. Ingamills, why did you give the Becks
more territory than any other distributor in the United States?
Mr. Ingamills. I couldn't answer that, Senator.
Senator Kennedy. Who could, in the company 'I
Mr. Ingamills. Unfortunately, the only person, as I have told Mr.
Kennedy, that could answer it is Mr. Carroll, and he is in Calvary
Cemetery.
Senator Kennedy. There is no explanation by the Anheuser-Busch
Co. why tliey gave the Becks greater distribution rights than they
gave anybody else in the United States?
Mr. IxGAMiLivS. Not that I am aAvare of, Senator.
Senator Kennedy. You have no reason, nor do you have any judg-
ment in your own mind from your experience with the company as to
why they would ?
Mr. Ingamills. No, sir, I honestly couldn't tell you.
Senator Kennedy. Is it because he was head of the teamsters ^
Mr. Ingamills. You must remember, I am just the company's law-
yer, and I could not tell you.
Senator Kennedy. You are speaking for the company today. That
is a reasonable inference, is it not ?
Mr. Ingamills. Well, I certainly think it had something to do
with it.
Senator Kennedy. Obviously, they had not had any previous ex-
perience in the beer business.
Mi\ Inga]\iills. I didn't get you.
Senator Kennedy. They had not had any previous experience in
the beer business.
Mr. Ingajmills. Not Beck.
Senator Kennedy. That is right. Or Beck, Jr.
Mr. Ingamills. That is right. That is what I imderstand.
Senator Kennedy. Therefore, obviously, the reason why you gave
him, and I wonder if you agree with that, the reason he was given this
greater territory than anyone in the United States was because he was
head of the teamsters, and the Anheuser-Busch Co. had substantial
relations with the teamsters in different parts of the country because
of the nature of their business.
Mr. Ingamills. I would answer it this way, if I may. Senator:
Apparently Carroll when he said "Greater territory*' was talking
about area. I can only say if you are asking at this time for my
opinion, I am sure the fact that Beck was vice president of the western
branch of tlie teamsters. I am sure that entered into it.
Senator Kennedy. All right.
Mr. Kennedy. Could I ask you there how many employees approxi-
mately did the Anheuser-Busch people have ?
Mr. Ingamills. Between 8,000 and 10,000, 1 believe. That is hourly
and salaried employees.
Mr. Kennedy. Approximately how many of those are teamsters?
Mr. Ingamiijls. I would say a majority are teamsters.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2077
Mr. Salixger. I have here a memo dated May 23, 1950, from Jay
E. Rideoiit to Mr. Earl Memoi-y. This is an interoffice memo of the
Anheuser-Busch Co., and I will only read certain portions of this :
I am begiuniug to realize what you meant when you told me Dave Beck, Jr.,
was an overgrown, spoiled boy. Irv left most of the horse showing arrangements
to Dave and you should have seen it. The stable was nice, and I mean darned
nice and we attracted a hell of a lot of people because of the advance publicity,
which made the showing, all in all, very successful.
The union arranged to have the horses and wagon put on top of the P-I
building for a publicity stunt. Then, the P-I ran two articles along with a
picture and that, too, created quite a lot of interest.
All of the above was good, but just imagine an eight-motorcycle police escort
bringing our vans into town. The next day we had a live-police escort to help
us get around traffic — preposterous. The day after that — Saturday — we didn't
have any police escort when we left the stables and we tied up plenty of traffic.
We took the horses to Liberty Square and refused to move until a police escort
was provided. We asked for 2 and got 4 and K. & L. had to pay for them at the
rate of $10 per man. Talk about throwing money away. Aside from that,
everything here is in pretty fair shape.
The Chair?.ian. Tiiat will be made exhibit No. I08-D.
(The document referred to was marked exhibit No. 133-D for
reference and will be found in the appendix on p. 2453.)
Mr. Salinger. I have here a memorandum dated December 6, 1950,
from Mr. Jay R. Rideout to Mr. John Flanigan, and this is another
interoffice memo of the Anheuser-Busch Co. of which I will only read
certain portions:
Upon arrival in Seattle, we discovered that Mr. Levine was in conference with
the stockholders of the K. & L. organization. Mr. Beck, Sr., was not in attend-
ance. His interests were represented by his son and his attorney.
I talked to Irv right after the meeting. He seemed quite perturbed and told
me that Mr. Beck was almost impossible to get along with. He showed me an
agreement signed l)y Mr. Beck to the effect that Junior is to receive 5 cents a case
on every case of Budweiser sold in Alaska Territory.
TheCriATRMAx. That is Dave, Jr.
Mr. Salixger. Yes, sir.
But in no one month is he to receive less than $1,000. It was apparently
Levine's contention that during the slow months in Alaska, if Junior's commission
due from the 5 cents a case amounted to less than $1,000, he would receive the
$l,fKX) anyway. But during the summer months when the 5 cents a case com-
mission exceeded $1,000, then the overage could be applied against the shortage
during the slow months until such time as the deficit was theoretically cleared
up.
Beck's attorney advised Levine that was not the condition and that Junior
was to get $1,0<K) every month and during the summer months when the 5 cents
per case would be greater than the $1,000' he was to receive the full 5 cents a
case commission.
Levine apparently got angry and called Mr. Beck to see how he interpreted
this agreement. Mr. Beck apparently told him that it was his understanding
that Junior was to receive $1,0€0 plus the 5 cents on every case sold in Alaska,
whereupon Levine supposedly got very angry and told Mr. Beck he could take
the blank-blank business if he wanted it.
In short, Levine and Mr. Beck, Sr., are still very much at odds. I asked Mr.
Levine how Beck could force a contract like this inasmuch as Levine was now
supposed to control the organization. Levine's stereotype answer was, "he cannot ;
I'll stand on my own two feet." Nevertheless, Junior will still probably get
his $1,000 a month.
2078 lAIPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. That may be made exhibit No. 138-E.
(The document referred to was marked "Exhibit No. 138-E" for
reference and will be found in the appendix on pp. 2454-2455.)
Mr. Kennedy. Mr. Ingamills, could you tell us or give us any
explanation as to why Junior was to get 5 cents a case extra on the
beer going to Alaska ?
Mr. Ingamills. I haven't the slightest idea, Mr. Kennedy.
Mr. Kennedy. Have you ever heard of an arrangement like that
before ?
Mr. Ingamills. I don't believe I have, offhand.
Mr. Salinger. Mr. Kennedy, you have the next document.
The Chairman. Has that document been previously identified ?
Mr. Salinger. It has not and I will show it to IMr. Ingamills now.
The Chairman. Mr. Ingamills, will you examine that document and
state what it is ?
Mr. Ingamills. This is an interoffice report directed to John Flani-
gan by Jay Eideout, dated October 11, 1950, subject, K. & L. Beverage
Co., operations.
The Chairman. Is that an interoffice report ?
Mr. Ingamills. Yes.
The Chairman. Of the Anheuser-Busch Co. ?
Mr. Ingamills. Yes, sir.
The Chairman. Kelating to this transaction of this distributorship ?
Mr. Ingamills. Yes, sir; and the subject is K. & L. Beverage Co.,
operations.
The Chairman. And that may be made exhibit No. 138-F.
(The document referred to was marked exhibit No. 138-F for
reference, and will be found in the appendix on pp. 245()-2458.)
The Chairman. You may read from it, Mr. Salinger.
Mr. Ingamills. There is also attached to it a note, signed by
Flanigan.
Mr. Salinger. There is a note on the outside signed by Mr. Flani-
gan, in handwriting, in which it says, "Still a perplexing problem.
What price solution?"
The Chairman. I beg pardon.
Mr. Salinger. It says. "Still a perplexing problem. "What price
solution?"
Now, attached to that is this memorandum of October 11, 1950,
from Mr. Jay Itideout, to Mr. John Flanigan, of which I Avill read
certain portions.
The following is to keep you advised of the developments in Seattle and
Taeoma, Wash. You will recall that when we talked to Mr. Levine and Mr.
Dewey Busch regarding the disposing of various K. & L. branches, that a value
of $40,000 was placed on the Taconia operations.
Mr. Busch advised me the evening of October 10, that some time during tlie
latter part of September a bona fide offer of $40,000 plus inventory was submitted
by himself and a man he was considering taking in as a partner. The offer con-
tained a 10-day option.
As of this date, Mr. Busch has not heard from K. & L. with regard to this offer.
Mr. Levine advised me that Mr. Dave Beck, Jr., refused to accept $40,000 for the
Taconia branch.
On Sunday, October 8, Mr. Dave Beck, Sr., at the latter's home to discuss the
])(»ssibility of Mr. Busch buying the Taeoma operations. At that meeting, Mr.
r.eck advised if anybody bought the Taeoma branch, it would be Mr. Beck, himself,
jiiid that he definitely didn't want to sell the operation in Taeoma.
lie apparently, however, made the statement that he would buy the operations
for $40,000 or sell it for $50,000. Mr. Beck is not very interested in financing
IMPROPER ACTIVITIES IN THE LABOR FIELD 2079
Mr. Busch in the purchase of this operation. This sounds to me like Mr. Beck
is bound and determined that he is not going to sell the Tacoma operation to
anyone but himself.
And it continues. On page 2 of this, there is another section :
Stu Krieger, who has been the K. & L. comptroller for the past several months,
was employed by the teamsters union and drew his salary from that organization.
When Mr. Levine had Mr. Beck's guarantee removed, the bank insisted that
somebody of Mr. Krieger's caliber be retained as comptroller of the operation,
and requested that Mr. Krieger accept the position.
They asked Mr. Krieger pointblauk if he would resign from the union and
accept the position and Mr. Krieger said "Yes," and he has resigned from the
union. When Mr. Beck, Sr., was advised of this arrangement he became terribly
angry and insisted that Mr. Krieger was not going to leave the payroll of the
teamsters union.
Now, I have here a 4-page document, 2 pages of which are written on
the stationery of the Olympic Hotel, Seattle, Wash., and 2 pages of
M'hich are written on some squared paper. The author of these notes
is not identified on the notes, and they were in the file of K. & L., and
they were filed there by J. F., which are the initials for John Flanigan.
I talked to Mr. Flanigan relative to these documents and he said
that he had them filed and they could have been written by any 1 of 2
or 3 people. However, there are certain sections of this that are
interesting.
The Chairman. Has that document been identified bv Mr. Inga-
mills?
Mr. Salinger. It has, sir.
These are apparently the notes of a meeting.
One, got wash from Carroll. Was asked to take it. Two, got Alaska from
Anheuser. Three, took Levine in as convenience because Beck had never been in
the business before. Four, considers the Busch account his personal franchise..
Five, gives no intention of getting out of the beer business, but would just as
soon split up with Levine.
Mr. Kennedy. Could I interrupt there? That was an interview
between the person who wrote this memorandum and Dave Beck, Sr.,
is that right ?
Mr. Salinger. It appears that way, yes, sir.
Six, wanted assurance he would get the account in case of a split. Was told,
"I cannot give that assurance. It will depend on circumstances at the time."
Seven, will buy Tacoma from K. & L. and put Dewey Busch in as operating
manager and one-third owner with a chance to buy that one-third out of profits.
Eight, expressed a willingness to set up an entirely new organization for Bud
in Alaska and Seattle as well as Tacoma. -
The Chairman. Who is Bud?
Mr. Salinger. That is Budweiser.
Number nine. He was opposed to splitting Alaska and Seattle.
Ten, says he wants the Bud business so that he will have something to do when
he retires in G years.
Eleven, impressed on him it was unhealthy for us to be associated with some-
one from whom we did not feel we could take the account. He gave me no
indication that he was the type we could get it away from if he felt he was
not doing a satisfactory job, and avoided any such remark that he was.
Twelve. If we make any such overture, I feel sure he will say that such a
move is unnecessary and that he will be only too happy to reorganize at any
expense and do the job in both Seattle and Alaska.
The Chairman. That may be made Exhibit 138-G.
89330—57 — pt. 7 7
2080 IMPROPER ACTIVITIES IN THE LABOR FIELD
(The document referred to was marked "Exhibit No. 138-G" for
reference and will be found in the aj^pendix on pp. 2459-2462.)
Mr. Salinger. I have a memorandum from Mr. Jay Rideout to
Mr. John Flanigan, dated October 17, 1950, of which I will read one
sentence.
He further advised tliat Mr. Beck, Jr., would either be given a very minor job
with the company or he would leave entirely.
It was Mr. Levine's opinion that from here on out, there would be no inter-
ference whatsoever — the business would be run as a business — and the Budweiser
relationship would be materially improved. The above, of coui-se, is Levine's
story.
The Chairman. That will be 138-H.
(The document referred to was marked "Exhibit No. 138-H" for
reference and will be found in the appendix on p. 2463.)
Mr. Salinger. I have a memo dated November 20, 1950, subject,
Seattle, Washington territory, for Mr. Holland B. Thomas, to Mr.
John Flanigan. I will read a paragraph :
Dave Beck, Jr., has not been bothering or around causing trouble lately;
however. Senior is still riding Irving Levine quite hard even though Levine is
running the business. The feeling here is altogether different and it may be
possible to make the wholesaler out of Levine that we would like to have, so
that we will be able to get results measured by Budweiser sales in the Seattle
territory. If it is ever possible to accomplish this, I certainly will be a firm
believer in miracles and feel certain that your thoughts coincide with mine but
can assure you that we will continue to do the best we possibly can with what
we have to work with for Budweiser and Anheuser-Busch.
The Chairman. That is 138-1.
(The document referred to was marked "Exhibit No. 138-1" for
reference and will be found in the appendix on pp. 2464-2465.)
Mr. Salinger. I have here a memorandum dated November 10,
1950, subject. Wholesaler Change, Tacoma, Wash., from Mr. Jay R.
Rideout to Mr. Holland B. Thomas.
The Chairman. That may be made exhibit 138-J.
(The document referred to follows :)
Mr. Salinger. I will read this interim memorandum.
Attached are the necessary forms for the appointment of the B. & B. Dis-
tributors in the Tacoma, Wash., area.
It is my understanding that Mr. Dewey Busch is to remain with the B. & B.
Distributors as manager and has the privilege of buying up to one-third of the
interest of this operation.
As you know, this change is not of our choosing. Rather it was a change of
ownership arranged with the K. & L. organization. The Beck interest in this
business is not very good from a public standpoint. However, I understand that
Dave Beck, Jr., is not to go near the operation unless Mr. Busch requests that
he come over. How long this arrangement will last remains to be seen.
It seems apparent that about the only thing we can do is go along with this
change and hope that the Becks will eventually lose interest in this operation
due to the comparatively small return they will receive from their investment
and will decide to sell the entire operation to Mr. Busch.
Kindest personal regards,
( Signed ) Jay Rideout.
The Chairman. It seems to me that somebody was unhappy with
Beck being in this enterprise.
Mr. Salinger. The records of the company are replete with unhap-
piness.
The Chairman. Did you have that information, Mr, Ingamills,
at the time ?
Mr. Ingamills. No, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2081
The Chairman. As tlieir counsel ?
Mr. Ingamills. No, sir.
The Chairman. All you know then, is what these records are re-
flecting.
Mr. Ingamills. Some of these letters I never saw before. Senator.
The Chairman. Thank you. Proceed.
Mr. Salinger, I have two more here. This one is a memorandum
dated November 22, 1950, from Mr. John Flanigan to Mr. Holland B.
Thomas. I will only read a section of it.
]\[r. Kennedy. I think the first two paragraphs.
Mr. Salinger (reading) :
Thank yoii for your detailed letter on the Seattle territory. I am glad to see
that you think the operation might become worthwhile and it looks as though we
will finally get somewhere now that we have one man in control.
You have an interesting note — "Senior is still riding Irving Levine quite
hard even though Levine is running the business." Wherever you can, will you
please try to get detailed information as to just how Senior is interfering with
the operation and get it on paper to me as fast as possible. That is exactly the
kind of thing we want to have in our hands, should we ever have another meet-
ing with him to discuss who should run the business.
Tlie Chairman. That may be made exhibit 138-K.
(The document referred to appears above and below:)
Mr. I^NNEDY. I think that you had better read the entire document
there.
Mr. Salinger (reading).
As I told you. the tirst time we come to him for a change in wholesalers, he is
going to say that the trouble is not With him but with the present management.
If we can show that he has interfered with present management and that present
management has cooperated with our policies, we will have a better argument.
Thanks a lot and congratulations to both you and Jay on doing a swell job In
that territory.
Regards.
(Signed) John Hanigan.
The Chairman. Mr. Ingamills, let me ask you, as counsel, and I real-
ize tliis question may invade your province of counsel and client rela-
tionship, but you may answer if you care or decline on that ground :
In your experience in representing Anheuser-Busch, have you ever
had any problem where they were afraid to get rid of a distributor,
that you can recall, except in this instance?
All of this indicates they had gotten themselves involved here with
Beck and could not get loose and they were afraid to try to get loose.
Do you recall any other similar experience representing Anheuser-
Busch?
Mr. Ingamills. I don't believe I do. Senator.
The Chairman. Thank you very much.
Senator Kennedy. Under the Hobbs Act, section 1 (C), it states:
The term "extortion" means obtaining of profit from another with his consent
induced by wrongful use of actual or threatened force, violence, or fear, or under
color of ofiicial right.
Now^, obviously, the whole implication during this series of memos
has been that the reason you did not break off this relationship vrhich
was very easy to break off, as you described at the beginning, was be-
cause Mr. Beck was head of the teamsters, with which the company had
extensive negotiations. Therefore, would you as an attorney believe
that this could possibly come under the language of the Hobbs Act, this
relationsliip ?
2082 IMPROPER ACTIVITIES IN THE LABOR FIELD
That is where things of vahie were obtained from your company be-
cause of the position wliich Mr. Beck hekl as head of the teamstei-s, and,
therefore, by the threatened use of force against you.
Mr. Ingamills. I don't believe, Senator, I can answer that.
Senator Kennedy, Thank you,
Mr. Kennedy. Just on that hist memorandum, Mr. Salinger, the
first paragi-aph that you read there,
Thank you for your detailed letter on the Seattle territory. I am glad to see
that you think the operation might become worthwhile and it looks as though
we will finally get somewhere.
How long had they had that Seattle operation at that time ? That is
November 22, 1950.
Mr. Salinger, Approximately 4 years.
Mr, Kennedy, And they were writing a memorandum that it now
might become worthwhile?
Mr. Salinger. That is right. They don't like the word "franchise,'''
and the distributorship was given to K. and L. for King County,
Seattle, in December of 1946.
Mr. Kennedy. Thank you.
Mr. Salinger. I have here a memorandum taken from the credit
files of the Anheuser Busch Co., a letter from Mr. Roy Lamphere, of
the credit department, to the K. and L. Beverage Co. I don't think
it is necessary to read the entire letter, but this letter indicates acute
unhappiness with the company over its failure to meet its financial
obligations. I will read a section of it :
Unless your remittances are made in accordance with our terms, we shall
have no alternative than to ship your cars on demand draft, bill of lading, at-
tached base as previously done. Yours very truly.
The Chairman. That may be made Exhibit 138-L.
(The document referred to was marked exhibit No. 138-L for
reference and will be found in the appendix on p. 2466.)
Mr. Salinger. Finally, I have a memorandum here dated June 10,
1952, from Mr. Jay Rideout to Mr. John Flanigan, and this is a memo-
randum where they have surveyed tlie Washington market to see hoAv
the K. and L. Beverage is doing, and the last paragraph of this memo-
randum reads:
I am not writing this with a thought that I want to stir up any additional
trouble in the Seattle-Alaska combine. I am writing it with the thought that
I would like both you and Holliwell armed with the facts and figures when you
meet with His Majesty, the Wheel.
Kindest regards, Jay Rideout.
The Chairiman. Is there anything to identify "His Majesty"?
Mr. Salinger. Not in this document, sir.
(At this point Senators Goldwater and Mundt entered the hearing
room. )
Mr. Kennedy. The whole discussion in the document is about
K. & L., is it ?
Mr. Salinger. That is right.
Mr. Kennedy, And the difficulties they were having witli K. &. L. ?
Mr. Salinger. That is correct.
The Chairman. That may be made exhibit 138-M.
(The document referred to was marked Exhibit No. 138-M for
reference and Avill be found in the appendix on pp. 2467-2468.)
IMPROPER ACTIVITIES lis' THE LABOR FIELD 2083
Mr. Kennedy. Xow, there are a large number of other documents
that indicate the difficulty that Anheuser Busch was having with Mr.
Dave Beck, Sr.. and with the K. & L. distributorship during this
period of time; is tliat right?
Mr. Ingajncills. Sir?
Mr. Kennedy. There are a large number of other documents that
indicate the difficulties that Anheuser-Busch was having with Dave
Beck, Sr., and with the K. & L. distributorship during this period
of time ?
Mr. Inga^iills. I think that is a correct statement.
Mr. Kennedy. Those are the only documents that we will put in
at this time, Mr. Chairman.
The Chairman. Are there any further questions of the witness?
Thank you gentlemen, and you may stand aside.
Call the next witness.
Mr. Kennedy. ]Mr. John Wilson.
The Chaikman. Mr. Wilson, will you come around, please, sir?
Do you solemnly swear that the evidence you shall give before this
Senate Select Committee shall be the truth, the whole truth, and
nothing but the truth, so help you God ?
Mr. Wilson. 1 do.
TESTIMONY OF JOHN I. WILSON
The Chairman. State your name and residence and business occu-
pation.
Mr. Wilson. jNIy name is John L. Wilson, St. Louis, Mo. I am
executive vice president of Anheuser-Busch.
The Chairman, Thank you very much. You have discussed, I
assume, with members of the staff of the committee the testimony that
you may be able to give ?
Mr. Wilson. 1 have.
The Chairman. You understand the rules of the committee, of
course, and you are entitled to counsel if you desire, to accompany you
while you testify, and advise you on your legal rights?
Mr. Wilson. I do.
The Chairman. Do you waive counsel ?
Mr. Wilson. I do.
The Chairman. Thank you very much. Proceed.
Mr. Kennedy. Mv. Wilson, first could you give us a little bit of
j^our background, where you come- from originally, and where you
were born ?
Mr. Wilson. I was born in Ohio, sir.
Mr. Kennedy. Whereabouts in Ohio?
Mr. Wilson. Springfield.
Mr. Kennedy. And you moved to St. Louis when ?
Mr. Wilson. I moved to St. Louis in 1944.
Mr. Kennedy. What position did you hold then?
Mr. Wilson. President of the St. Louis Public Service Co.
Mr. Kennedy. Until what time?
Mr. Wilson. Until 1951, in July of 1951.
Mr. Kennedy. What did you do then?
Mr. Wilson. I became associated Avith Anheuser-Busch as vice
jn-esident and financial officer.
2084 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You held that position and still hold that position?
Mr. Wilson. No, sir. I held that position until July of 1956 or
thereabouts, at which time I was elected executive vice president of
the company.
Mr. Kennedy. That is the position you hold at the present time?
Mr. Wilson. That is correct, sir.
Mr. Kennedy. Now, you have had some dealings with Mr. Dave
Beck, is that correct ?
Mr, Wilson. I have had some conversations with Mr. Dave Beck,
and I
Mr. Kennedy. You are a friend of Mr. Beck ?
Mr. Wilson. I know Mr. Beck ; yes.
Mr. Kennedy. I think you described yourself last night as a friend
of Mr. Beck's ; is that correct?
Mr. Wilson. I would say so, and I know Mr. Beck on a friendly
basis.
Mr. Kennedy, How long have you known him ?
Mr. Wilson. To answer that question specifically, Mr. Kennedy,
I think tliat I met Mr. Beck sometime within the past 5 years or so,
and it is possible tliat I may have met him at some time previous
to that.
Mr. Kennedy. Did you meet him in connection with your work — -
Excuse me, have you hnished ?
Mr. Wilson. Yes, sir.
Mr. Kennedy. Did you meet liim in connection with your work
at Anheuser-Busch ?
Mr. Wilson. I made Mr. Beck's acquaintance at some point, and
it was possible that was in connection with Anheuser-Busch, or I
may have met him at some meeting and I have been introduced to
him at some time and I can't recall the exact facts.
Mr. Kennedy. I understood fi-om Mr. Ingamills' testimony that
Anheuser-Busch does not sell franchises, but they grant distributor-
ships, is that right ?
Mr. Wilson. Anheuser-Busch has no franchises.
Mr. Kennedy. But they grant distributorships.
Mr. Wilson. Wholesalerships, or distributorships, whichever term
you prefer.
Mr. Kennedy. Now, is there a contract that goes into that, and tliey
make a contract with the distributorship ?
Mr. Wilson. No, sir.
Mr. Kennedy. What are the arrangements as far as cutting off
the distributorship ?
Mr. Wilson. That can be terminated on any shipment.
Mr. Kennedy. On any shipment?
Mr. Wilson. Yes, sir.
]Mr. Kennedy. So that you could call up someone, Anheuser-Busch
could call up a distributor and say, '"We are stopping your distribu-
torsliip tomorrow."
Mr. Wilson. That is possible.
Mr. Kennedy. You can do that ?
Mr. Wilson. Yes, sir.
Mr. Kennedy. And if you become dissatisfied with the distributor,
you can just terminate it immediately?
Mr. Wilson. If you so desire.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2085
Mr. I^NNEDY. Now, I notice, and I am sure that Jo^ l|^;y«/f^[^
fhetestimonv, and you were here ni the room and heard the testi-
monrtlTAAheuser-Busch had become qu te dissatisfied with Ml^
D /ve Befk and with the K. & L. Distributing Co. out m the Stat^
^^a^n:r{^ Couhl you tell the committee whether JO" -^^^^ ^
dealings whh that distributorship, and whether you personally heard
^'S?lSS't^S:i:i^:^ndence that was referred to and id^
tified by Mringamills was prior to my association with Anheuser-
^ Mr.'"KENXEDY. Did you have any dealings with the K. & L. Dis-
tributing Co. yourself ? VlOo,..?
Air Wilson Any direct dealings witii aiem ^
Mr.' Sedy. Yes, any direct dealings with them or regarding
^^Mv. WiLSOX. The only dealings I had with the K. & L. Beverage
Co. was an extension of credit.
Mr. Kennedy. Excuse me?
Mr. Wilson. An extension of credit. • ^i . ,
Mr Kennedy What were the circumstances m that^
Mr! Wilson That was at the time Mr. Levine purchased Mr. Beck s
'""m? Kennedy. Would it have been possible for Mr Levine to have
pvm^Mled Mr Beck's interest if the extension had not been granted by
"" Mi" Wn^^^^^^^ answer whether it would have been possible
or nit Mr. Levine stated that he needed credit and we were wdlmg
'^m^lFE^fDid Mr. Beck suggest to you also that this credit be
granted? ■, t n ^
Mr Wilson. No, sir ; he did not. . -^i i • i ,f
Mr. Kennedy. Did you ever have any discussions with him about
that? , ,.^
Mr. Wilson. About the credit; no, sir.
Mr. Kennedy. You never had any at all (
Mr iSNNE^DY.'^Were there some discussions about the purchasing by
Anheuser-Busch in 1952 of this distributorship?
Mr Wilson. Discussions with whom?
Mr. Kennedy. Within your company, and were there discussions
about that matter?
Mr. Wilson. Yes, sir.
Mr Kennedy. How did that come about ? ^. -r^ , n i j
Mr Wilson. To the best of my recollection, Mr. Beck called and
said that he would like to sell that operation out there and his attor-
ney, Mr. Wampold I believe was the name, came to bt. Louis to discuss
the Vossibility of us taking over that
Mr. Kennedy. Is that Mr. Simon V\ ampold i
Mr. Wilson. I believe so; yes, sir. ^, ,, 4=^., fLa
Mr. Kennedy, m. Simon Wampold was the attorney for the
*^MfwlL^oN!''l don't know whether he was attorney for the teamsters
or not, and I talked to him as representing Mr. Beck.
2086 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. He came to St. Louis as a representative of Mr.
Beck?
Mr. Wilson. That is correct.
Mr. Kennedy. And you had discussions with him ?
Mr. Wilson. I had a discussion with him at St. Louis ; yes, sir.
Mr. Kennedy. What was the result of that discussion ?
Mr. Wilson. The result of that discussion was that we considered
the possible purcliase of that operation, and the establishincv of a
branch, a direct operating- branch of Anheuser-Busch in Tacoma.
Mr. Kennedy. At that time, as I understand it, the liabilities of
that company were approximately $88,000 ?
Mr. Wilson. I don't recall the exact figure, and I think that you
have the statement there that shows that. It shows whatever it was.
Mr. Kennedy. Was that approximately right, as you remember it ?
Mr. Wilson. As I recall it, it seems to rne, yes.
Mr. Kennedy. And the assets at that time were approximately
$50,000? Do you remember that?
Mr. Wilson. I don't remember the exact figures.
Mr. Kennedy. Do you remember whether that is approximately
correct ?
Mr. Wilson. I couldn't say. You have the statement there, and
whatever it shows.
Mr. Kennedy. I am trying to get it from you. Do vou know if
that was approximately the figures?
Mr. Wilson. I don'tVemember the exact figures, and whatever thev
are on that statement.
Mr. Kennedy. I think that you have a copy of the statement in
front of you, youi^elf.
Mr. Wilson. The statement that is here shows that the assets were
$76,000, and the current liabilities were $88,000, and there was a stock
equity in there.
Mr. Kennedy. The $76,000 includes, for assets, $23,800 for good-
will?
Mr. Wilson. That is what is shown on this statement.
Mr. Kennedy. Do you include goodwill? Does Anheuser-Busch
include goodwill in these purchases ?
Mr. Wilson. As far as goodwill is concerned, Mr. Kennedy, we
have to take the overall position that a Avholesalership of Anheuser-
Busch has no real value, because we have the right to withdraw that
wholesalership at any time on any shipment.
Now, certainly when a wholesalership has been in operation for
quite some time and has done a good job for Anheuser-Busch, there is
a debatable item there.
Mr. Kennedy. Tell me this : Do vou include ordinarily an amount
for goodwill when you make an arrangement of this kind ?
Mr. Wilson. The arrangements ? What do you mean by "arrange-
ments of this kind"? J ^
■ ¥^j Kennedy. ^Yhen you are figuring out the assets, would you
include ordinarily or give them an allowance for goodwill of several
thousands of dollars?
Mr. Wilson. Well, in considered deals of this type, there are not
many. You would have to take each individual deal and judge it on
its merits, Mr. Kennedy.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2087
Mr. Kennedy. Tell me this: Do you know of any other instance
when you have put into the assets, goodwill ?
Mr. Wilson. Maybe not exactly as goodwill, but
Mr. Kennedy. Have you ever written into any other balance sheet
such as this, the goodwill?
Mr. Wilson. PLive we ever? I couldn't answer that.
Mr. Kennedy. Do you know of any other time that you ever have?
Mr. Wilson. I don't know specifically of any items of goodwill that
are set forth ; no, sir.
Mr. Kennedy. We have a memorandum here taken from the files
of Anheuser-Busch, and I will show it to you, and it is dated October
2, 1955. I do not, however, have Mr. Ingamill's memorandum of
August 4 to JMr. Flanigan in which he says: "When you write the
appointment letter be sure to tell Flaherty that he purchases no good-
will or vested interest in the distributorship."
Wasn't that a policy ?
Mr. Wilson. That is a policy of Anheuser-Busch.
Mr. Kennedy. Yet it was included in tliis.
Mr. Wilson. You asked me what was in the statement, Mr. Ken-
nedy, and that shows what is in the statement.
Mr. Kennedy. Is that an ordinary matter to be included in the
statement?
Mr. Wilson. I can't tell what people do. There are many, many
corporations, and we have many wholesalers, and how they write their
statement is their business.
Mr. Kennedy. Do you know of any other instance when it was
included ?
Mr. Wilson. I don't look at wholesalers' statements.
Mr. Kennedy. What is the answer, then? Do you know of any
other instance ?
Mr. Wilson. Do I know of any ? Xo, I do not.
Mr. Kennedy. Now, even including the $23,800 of goodwill, which
would give the assets of $76,727.48, the liabilities were $88,120.51, so
the liabilities exceeded the assets by approximately $12,000, is that
right?
Mr. Wilson. That is what it says on the statement and that is all
1 can answer your question for. It says $76,000 worth of assets and
then it savs $88,000 was the liabilities and then it shoAvs the stock-
holders equity of $11,000.
Mr. Kennedy. Does it show that the liabilities exceed the assets by
approximately $12,000?
Mr. Wilson. As it shows on this statement, that is what it states,
yes.
Mr. Kennedy. Now, I want to show you the letter which I believe
has a note by you on it.
The Chairman. Let this document be presented to the witness for
identification.
Mr. Kennedy. He has a copy of it.
The Chairman. Call his attention to the document, then.
Mr. Kennedy. Would you identify the memorandum dated October
16, 1952?
Mr. Wilson. Yes, sir; that is here.
Mr. Kennedy. In this memorandum we see that it analyzes this
balance sheet, and disallows the goodwill of $23,800; is that right?
2088 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Wilson. The letter quoting it says, as you point out, "We would
not want to capitalize anything for goodwill in any event."
Mr. Kennedy. Then also $807 due from officers, and a deficit in
excess of capital stock of $11,893, making a total of $36,000 that they
feel should not be included in the assets of the corporation. That had
been included in the balance sheet.
Mr. Wilson. Well, it states in the letter, in here, as I pointed out,
the letter quoting says, "As you point out, we would not want to
capitalize anything for goodwill in any event."
The Chairman. Let the Chair see if he understands this.
After you evaluated their financial statement, that showed assets
of $76,000, you concluded, or your company concluded that the real
assets were only about $40,000.
Mr. Wilson. Well, Senator, I couldn't state what our conclusion was
as to the real assets at that time. This letter which is from a Mr.
Louesa who is assistant manager of our tax department, makes those
statements in here.
The Chairman. That was at least his viewpoint.
Mr. Wilson. That is correct, sir.
The Chairman. That was the advice he was giving?
Mr. Wilson. He did not give advice, and he just stated
The Chairman. He was reporting the fact to the company for its
information upon which it should act?
Mr. Wilson. That is correct, sir.
Mr. Kennedy. Then it would appear from this memorandum that
the assets were worth approximately $50,000, and the liabilities were
approximately $88,000, and the assets were worth only about $50,000.
Mr. Wilson. Well, you have gone over that, Mr. Kennedy.
Mr. Kennedy. Is that what appears from this memorandum ?
Mr. Wilson. It says in the memorandum here that you come out
with $36,000.
Mr. Kennedy. $36,000 ?
Mr. Wilson. That is what the memorandum states.
Mr. Kennedy. You had approximately $36,000 of liabilities — the
company had liabilities of approximately $36,000, exceeding the assets,
and yet I note from this memorandum that you stated — or gave your
permission to pay $80,000 for this company ?
Mr. Wilson. That is what it states on this memorandum, yes.
Mr. Kennedy. Can you tell the committee when the company has
liabilities of approximately $36,000 exceeding its assets, no goodwill,
and you offered to pay $80,000 from Anheuser-Busch for the com-
pany when you could cut it off like that ?
Mr. Wilson. I will have to answer that in two parts : One, you say
you can cut it off like that. Yes, you can. The beer business is a
very sensitive business, Wien you have a wholesaler selling Bud-
weiser and you go in and cut him off without somebody to replace him,
you lose your distribution immediately. And if you lose your dis-
tribution, and nobody to represent you, nobody is going to be inter-
ested in selling your product on the retail level and they are going to
get out of it. And the consumer, even though he asks for it, will not
have any available to him. That is one part of your question.
The Chairman. Mr. Wilson, may I interrupt there?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2089
If you could plan a little ahead, you would not have to cut him
off today. If you decided today you wanted to get rid of him, you
could plan ahead and get somebody to take over immediately.
Mr. Wilson. Provided you could get somebody to take over ; yes,
sir, you could.
Mr. Kennedy. You had a request from somebody to take over.
Mr. Wilson. That I don't know.
Mr. Kennedy. Did you not study the file before you made the
analysis ?
Mr. Wilson. They came in — I say they came in — Mr. Wampold
came in and wanted to sell this wholesalership. As a considered busi-
ness judgment, we were willing to offer up to $80,000, Whether that
was good business judgment, or whether that business judgment was
good or bad, the only e\adence I have is of this interested party, so
far as I know, to purchase this business for $85,000.
Mr. Kennedy. What is the basis on which you arrived at the figure
of $80,000 that Anheuser-Bush was willing to purchase this for when
they could get it for nothing?
Mr. Wilson. If you want to say "Could they get it for nothing" —
no, they couldn't get it for nothing. They could cancel the whole-
salership. They coiddn't go in and capture any assets that belonged
to somebody else.
Mr. Kennedy. There were no assets. There were liabilities.
Mr. Wilson. The man had something there, didn't he? Didn't he
have inventory ; didn't he have equipment ?
Mr. Kennedy. He had assets and liabilities that exceeded those
assets by approximately $35,000. An analysis of the file for the pre-
vious 5 years would show that you had nothing but trouble from Dave
Beck.
Mr. Wilson. Yes, but your statement was that we could go in and
take that away from him.
Mr. I&:nnedy. Correct.
]Mr. Wilson. We couldn't take his company away from him. We
could cancel his right to distribute Budweiser.
Mr. Kennedy. Correct; and you could have taken it over your-
selves for nothing.
Mr. Wilson. No, we couldn't have taken it over ourselves unless
we had the proper licenses. We have to deal with 48 States in the
distribution of alcoholic beverages and there are probably 48 plus dif-
ferent sets of rules and regulations. .
Mr. Kennedy. Let me ask you this, Mr. Wilson : Did you ever make
any request of Mr. Beck to perform any labor services for Anheuser-
Busch?
Mr. Wilson. I had some discussions with Mr. Beck, and one request
that I made of him was in connection with some labor difficulties that
we had in the construction of our Los Angeles plant.
Mr. Kennedy. Could you tell me first, in your position, were you
handling the labor industrial relations for Anheuser-Busch ?
]Mr. Wilson. Industrial relations reported to me in the final analy-
sis.
Mr. Kennedy. During this period of time ?
Mr. Wilson. During that period of time.
2090 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. KJENNEDY. Whom were you requested by to interfere or to in-
tervene in the Los Angeles matter?
Mr. Wilson. Well, we all knew that we had a strike at our Los
Angeles plant while it was under construction.
Mr. Kennedy. Were the teamsters involved in that ?
Mr. Wilson. No, sir, the teamsters were not involved in it.
Mr. Kennedy. Why would you go to Mr. Dave Beck ?
Mr. Wilson. Thinking that Mr. Dave Beck knew something about
unions — and we were trying to get advice as to how we could get this
strike stopped and our plant to continue under construction. We had
a $20 million investment that we were getting ready to brew Bud-
weiser on the Pacific coast and we didn't want that construction work
tied up. I would go to anybody for advice. If I thought you could
give me advice, I would go to you when we had problems at that time.
Mr. Kennedy. What was the problem in Los Angeles ? What were
the unions involved ?
Mr. Wilson. We apparently had two problems there. We had a
problem on the installation of window sash, and we had the problem
of who was going to — those were jurisdictional things — as to who was
going to make these installations. And the other one was on the con-
struction of some type of a pipeline — I couldn't describe it accurately
to vou — in your plant, as to who was going to do the work.
(At this point. Senator McClellan withdrew from the hearing-
room.)
Mr. Kennedy. You made a request of Mr. Dave Beck, president of
the Western Conference of Teamsters, to assist you in this matter ?
Mr. Wilson. Yes. I asked Mr. Beck. I called Mr. Beck and asked
him any advice that he had to give to us and any help he could give
to us, that we would appreciate it very much.
Mr. Kennedy. Would you identify this telegram dated January 13
to Mr. John Wilson, signed by Dave JBeck ?
Mr. Wilson. Yes, sir.
Mr. Kennedy. Would you read that into the record, please ?
Mr. Wilson. Yes, sir.
This was dated January 13, and it says :
Our people in Los Anwles are workin,? hard on your situation and advise me
they are quite sure there will be no tieup. I am insisting on program set out to
you and I will contact president of National Building Trades Thursday morning
insisting on his intervention. I will be in Seattle until Friday morning.
Mr. Kennedy. What conversations had you had with Mr. Beck that
brought about this telegram ?
Mr. Wilson. The ones that I related to you a minute ago.
Mr. Kennedy. "VA-liat does he mean by "our people in Los Angeles
are working hard on your situation" ? Is that on this strike that was
taking place?
Mr. Wilson. That was on the strike that was down there. His
Los xVngeles representatives were working. What he says in the wire
is that his Los iViigeles people are sure that there will be no work tieup.
(At this point, Senator Mc(31ellan entered the hearing room.)
Mr. Kennedy. Why would he have the teamster people — the team-
ster representative — interfering in a strike in Los Angeles in which
the teamsters had no interest, because of the request from Anheuser-
Busch?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2091
Mr. Wilson. As soon as that plant was completed, the way I can
answer that, as soon as that plant was completed there would be a lot
of teamsters employed by the plant.
(At this point, Senator Ives withdrew from the hearing room.)
Mr. Kennedy. And for that reason, he would intervene in the
strike ?
Mr. Wilson. Well, I would seem to think so.
Mr. Kennedy. Did you point that out to him?
Mr. Wilson. I don't recall speciiically, Mr. Kennedy, whether I did
or not.
Mr. Kennedy. Did you call him or did you have a meeting with him,
or what?
Mr. Wilson. No. I called him.
Mr. Kennedy. You called him on the telephone ^
Mr. Wilson. Yes, sir.
Mr. Kennedy. And it says in here in the second sentence "I am
insisting on program set out to you." What was the program ?
Mr. Wilson. I don't recall of any program except cooperation with
us and the contractor. The strike was not against us. The strike
was against the contractor that had the contract to construct the plant.
Mr. Kennedy. You do not have any recollection as to what he
meant when he said, "I am insisting on progi-am set out to you"?
Mr. Wilson. Other than a program that these people would get
these disputes settled and that there would not be any tieup on there,
which he specifies in here.
Mr. Kennedy (reading) :
And I will contact president of National Building Trades Thursday morning
insisting on his intervention.
Mr. Wilson. The building trades were the ones that were on strike,
members of the building trades.
Mr. Kennedy. And this was all based on your request, Mr. John
Wilson's request, to Mr. Dave Beck up in Seattle when he sent this
telegram ?
Mr. Wilson. I would assume so ; yes.
Mr. Kennedy. That he was having teamster officials intervene in
Los Angeles.
I am insisting on program set out to you and I will contact president of
National Building Trades Thursday morning insisting on his intervention.
This was all based on your request ^to him?
Mr. Wilson. As far as I know it was.
Mr. Kennedy. During this period of time, the K. c^ Jj. distributor-
ship was still operating in the State of Washington; is that right?
Mr. Wilson. Yes.
Mr. IvENNEDY. And there was a contract, there was a relatiojisliip,
between Anheuser-Busch in St. Louis and the K. & L. Distributing
Co. in the State of Washington?
Mr. Wilson. The K. & L. are still our distributors and, according
to the records, they were appointed back in 1946, so tliat would be a
correct statement; yes, sir.
Mr. Kennt:dy. Did you ask "Sir. Beck's advice on any other matters
that you were having any difficulty on?
Mr. Wilson. Yes. You liave conversations with peo]>le. T think,
and this is always a matter of opinion, I think it is always to our
2092 IMPROPER ACTIVITIES IN THE LABOR FIELD
advantage, public-relations-wise, to be on a friendly basis with every-
body that yon can, any union official, or any operation, whether it is
large or small, in the local level or others. It certainly doesn't pay
to antagonize j^eople and keep up a constant bickering. Certainly
it is to your advantage to be on friendly terms, whether they are
bankers or wliether they are other businessmen, whether they are
security underwriters, or whether they are labor officials.
Mr. Kennedy. Is that why you ottered $80,000 for the beer dis-
tributorship up in the State of Washington which had liabilities of
$30,000?
Mr. Wilson. Is what the reason ?
Mr. Kennedy. Is that the reason that you wanted to stay on
friendly terms with Mr. Dave Beck ?
Mr. Wilson. Not exactly; no.
Mr. Kennedy. Is that part of the reason ?
Mr. Wilson. Not necessarily ; no, sir.
Mr. Kennedy. Don't say not necessarily. Was it i)art of the rea-
son ?
Mr. Wilson. No ; that wasn't part of the reason.
Mr. Kennedy. Did it have anything to do with it ?
Mr. Wilson. No.
Mr. Kennedy. That you wanted to stay on friendly relationships?
Mr. Wilson. No. I feel, and this is only a personal opinion, I feel
that public-relations-wise it is not well for any labor union official to
have a wholesalership.
Mr. Kennedy. Is that what you feel ?
Mr. Wilson. That is my personal opinion.
Mr. Kennedy. You don't think it is wise?
Mr. Wilson. I don't think it is wise, public-relations-wise.
Mr. Kennedy. Did you tell that to Mr. Beck ?
Mr. Wilson. No, I didn't tell that to Mr. Beck.
Senator Kennedy. When you say public-relations-wise, will you
explain Avhat you mean by that?
Mr. Wilson. Well, Senator Kennedy, the labor unions are pretty
large and a pretty powerful force in this country. We deal with
many of them. Certainly, if you have a member of some union, an
officer of some union, in a wholesalership, it is possible that it could
react against you in dealing with the other unions.
Senator Kennedy. In other words, you could not have a normal
business relationship with the head of your strongest union within
your company ; is that correct ?
Mr. Wilson. I wouldn't say that you couldn't have a normal busi-
ness relationship, but I repeat that I don't think public-relations- wise,
it is good business for an official of a labor union to be a wholesaler.
Senator Kennedy. Do you think you had a normal business rela-
tionship with ]Mr. Beck ?
Mr. Wilson. All of the business relationships between Anheuser-
Busch and Mr. Beck were established long before my tenure with
Anheuser-Busch.
Senator Kennedy. Do you think that the company had a normal
business relationship, with what you know^ of it, with'Mr. Beck?
Mr. Wilson. It seems that their business relationships had gone
along on a pretty good basis. It seems that Mr. Levine had done a
IMPROPER ACTIVITIES IN THE LABOR FIELD 2093
pretty good job. He is still our wholesaler out there. We are trying
in every way we can to coopei'ate with him.
Senator Kenxedy. In other words, then, Mr. Wilson, you say that
the Anheuser-Busch relationship with Mr. Beck was a normal busi-
ness relationship, that you did not give Mr. Beck any more favored
treatment than you would have given any other wholesaler; all the
exchanges and memorandums which we have seen in the record this
morning indicating the tremendous difficulties you had with Mr. Beck,
senior and junior, during this period, that is the nonnal relationship,
and you treated him no differently than you would have treated any
other wholesaler ?
Mr. AViLSON. Well, the record that was read in here to this com-
mittee this morning shows that they would prefer that Mr. Beck be
not interested in the wholesaling.
Senator Kennedy. In other words, it was not a normal business
relationship.
Mr. Wilson. That is apparent.
Senator Kennedy. That is apparent ?
Mr. Wilson. That is apparent from the record that I heard read
this morning.
Senator Kennedy. If it is not normal, for what reason did
Anheuser-Busch continue the relationship, if it was not normal ? Was
it because he was head of the union '(
Mr. Wilson, I couldn't answer that cpiestion. Senator Kennedy.
When I went to Anheuser-Busch, the first time that it came to my
attention, it was that Mr. Beck was interested in our wholesalership
at Seattle. Then I discovered later that he was at Tacoma. As far
as any difficulties are concerned, the next I knew is when he wanted to
sell out the Tacoma. operation, and then when Mr. Levine wanted to
buy out Mr. Beck. Those are the personal contacts that I had, and I
don't think I should speak for the opinion of anybody else.
Senator Kennedy. Did you extend abnormal credit to Mr. Levine
in order to purchase out Mr. Beck ?
Mr. Wn.soN. We extended to Mr. Levine a credit in the amount of
$112,500, and. Mr. Levine gave us a note for that, which he paid on
schedule, or practically on schedule. I mean, the records will show
whatever it was.
Senator Kennedy. Is that a normal credit relationship ?
Mr. Wilson. We support a lot of wholesalers, at times, when it is
necessary to help them along through some of their difficulties.
Certainly when Mr. Levine wag in a position to terminate his
relationshi]) with Mr. Beck and take this over, certainly I think it was
to our advantage to assist Mr. Levine in doing that. I expressed my
opinion on union officers having our wholesalerships, my personal
relationships.
Senator Kennedy. Public relations-wise is the only reason that you
do not think it is desirable?
Mr. Wilson. I don't think it is desirable.
Senator Kennedy. Generally?
Mr. Wilson. That is correct.
Senator Kennedy. For it is not possible for a company to have a
normal business relationship with tlie head of their largest union, and
your relationships were definitely abnormal, Mr. Wilson, from all of
the records that we have seen this morning.
2094 IMPROPER ACTIVITIES IX THE LABOR FIELD
Mr. Wilson. That is what the records show here, yes.
Senator Kennedy. Thank you.
The CiiAiRntAN. In other words, in retrospect, it was bad policy.
Mr. Wilson. That is my personal opinion, Senator, yes.
The Chairman. Senator Mimdt?
Senator Mundt. Mr. Wilson, I gather from your testimony that
you will answer this question in the affirmative. Was one of the
motivating factors in your granting this $112,500 loan to Mr. Levine
the fact that you wanted to terminate, if possible, the relationships
which the teamsters union officials had established with your dis-
tribution system ?
Mr. Wilson. Senator, you said terminate the relationship that we
had with the teamsters union ?
Senator Mttndt. Teamsters union officials in your beer distributor-
ships ?
Mr. Wilson. Yes. Mr. Levine had an opportunit}^ to take over this,
and I thought it was right and proper that we assist him. Agam,
repeating, I don't think it is good public relations for a union official
to be interested in one of our wholesalerships.
Senator Mundt. I was simply trying to establish for the record
that you probably bet a little more on Mr. Levine than you normally
would, because this was a factor, and fortunately for Anheuser-Busch
and all concerned that paid off and he paid his note and everything
worked out fine.
Mr. Wilson. Everything worked out fine.
I could not answer your question specifically as to whether we gave
liiin more than we normally would. We would have to analyze the
facts and conditions governing the situation where a wholesaler needed
help. But it looked like it was a ver}^ good business risk. In our
judgment, it was a good business risk, and it has proved out to be so.
Senator Mundt. It had another element in it than just besides the
business risk. Businesswise you were doing all right before.
Mr, Wilson. That is correct. However, I might answer your ques-
tion this way, that recently we have extended credit to Mr. Levine
far and above any credit that was ever previously extended him, and
the total credit that was extended to him in the purchase of Mr.
Beck's interest.
Senator Mundt. Yes. But he has a bigger establishment now, and
he is a bigger operator than he was at that time.
Mr. Wilson. Well, there is always conditions. Looking at the rec-
ord
Senator Mundt. These are not strictly signature loans that you are
making. You make them on the basis of the man's character and
reputation, of course, but also on the basis of the extent of his bus-
iness ; is that not correct ?
Mr. Wilson. Well, yes. I understand, to show you how conditions
alter cases, that the reason Mr. Levine's credit was extended in very
large amount i-ecently is to get a large shipment of Budweiser into
Alaska before a cei-tain tax became effective. So we shipped him 19
carloads of Budweiser to go into the Alaska market before the tax
went on, an increased tax.
The CiiAiiniAN. Are there any further questions?
Mr. Counsel ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2095
Mr. Kennedy. I was askino- you, Mr. AVilson, if you went to I^Ir.
Beck to ask liis help or assistance in any other labor matter.
Mr. Wilson. I liave asked Mr. Beck's advice.
Mr. Kennedy. Will you tell us about that ?
Mr. Wilson. Well, I have asked Mr. Beck's advice at the time we
went into California with the construction of a plant out there, and
the relationship that they had with the California Brewers Institute,
wliich is an association of brewers in the State of California.
Mr. Kennedy. What kind of advice did you want from him ^
Mr. Wilson. I wanted to see what the relationships with the team-
sters were with the California BreAvers Institute. There were some
matters in controversy about the California Brewers Institute, and
some people thought that tlie California Brewers Institute was fine-
and some people thought it w^asn't. I wanted to see what their rela-
tions were with the California brewers.
Mr. Kennedy. Do you mean the teamsters relationships?
Mr. Wilson. The teamsters relationships.
Mr. IvENNEDY. Your people out in California couldn't find that
out themselves; you had to go to Mr. Dave Beck to find tliat out?
Mr. Wilson. Mr. Dave Beck was head of the teamsters, or at least
the gentlemen presumed to be in power in the teamsters at the time
that that plant was started.
Mr. Kennedy. Yes, but couldn't your people out in California find
that out for you ? ^Y\l■y did you go to Mv. Dave Beck ?
Mr. Wilson. Who would you normally go to, if you wanted the top
advice, Mr. Kennedy ?
Mr. Kennedy. Didn't you have some representatives at California
that could find that out ?
Mr. Wilson. We have sales representatives all over the United
States; yes, sir, answering your question.
Mr. Kennedy. And they couldn't find out in California what the
situation was ?
Mr. Wilson. You get different answers from a lot of people on a
lot of different levels. I don't know your association in business, but
you will find that. When you want the direct answer to some things
in the matter of advice sometimes you go to the people that can give
it to you.
Mr. Kennedy. Did you re(|uest his advice or his assistance in any
other matter ?
Mr. Wilson. Yes. I have asked his advice in other matters.
Mr. Kennedy. What was that?
Mr. Wilson. Well, I happened to ask his advice in Chicago at one
time.
Mr. Kennedy. In connection with what?
Mr. Wilson. In connection with the attitude of tlie unions on a
matter, and discuss it with him, that was up in California with the
(California Brewers Institute.
Mr. Kennedy. AVhat was the matter that you wanted to discuss
with him in Chicago ?
Mr. Wilson. There was a problem at that time that some of the
brewers were in favor of opposing veiy strongly a wage increase and
some weren't.
89330 — 57— pt. T S
2096 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kexxedy. You went to Mr. Beck to find out what ?
Mr. Wilson. I happened to be in Chicago at a meeting and I hap-
pened to find out that the teamsters were liolding a meeting in the
same hoteL So I went down to discuss it with Mr. Beck.
Mr. Kennedy. What did you find out? What did you ask Mr.
Beck?
Mr. Wilson. I can't tell you specifically the question that I asked
him.
Mr. Kennedy. What information were you trying to find out from
Mr. Beck?
Mr. Wilson. I was trying to find out what his opinion was of their
California operation in relation to this proposed contract that was
up there.
Mr. Kennedy. What did he tell you at that time ?
Mr. Wilson. Well, he told me that he felt that— I am hesitating
on answering your question, because you are going into a lot of rela-
tionships between brewers in this business. I asked Mr. Beck at that
time whether he felt that the California brewers were taking a very
strong position on this, and after conferring with some of his people,
he said that he didn't think that they were. In sum and substance,
that is it.
Mr. Kennedy. Take a very strong position on what?
Mr. Wilson. On opposing the contract that was trying to be put
through by the teamsters with the California Brewers Institute.
Mr. Kennedy. And he then checked with his people in California
to find out whether the brewers were taking a strong position or not?
Mr. Wilson. Whether he felt or whether he thought that the Cali-
fornia brewers would take a strong position in opposition to this
large wage increase that they were asking.
Mr. Kennedy. Why would you go to Mr. Dave Beck to find that
out ? Couldn't you go to the brewsrs and find that out ?
Mr. Wilson. Perhaps.
Mr. Kennedy. Why did you go to Mr. Beck ?
Mr. Wilson. Perhaps you couldn't.
Mr. Kennedy. Why couldn't you ?
Mr. Wilson. He was there. He was there in Chicago. He hap-
pened to be there, so I asked him.
Mr. Kennedy. Did he make a telephone call then to California to
find out from his people?
Mr. Wilson, I don't know whether he made a telephone call or
whether there were some of his California representatives there who
were familiar with the situation. This was, as I understand it, an
over-all meeting.
Mr. Kennedy. Was that to establish the future policv of Anheuser-
Busch?
Mr. Wilson. No. Anheuser-Busch was only one brewer out of
many that are members of the California Brewers Institute.
Mr. Kennedy. You just wanted to find out what the policy of the
brewers was in (California?
Mr. Wilson. I wanted to find out whether they felt that some of
the brewers in (California that were domiciled there would take a very
strong position in opposition to this that some of us thought was a
very strong wage increase.
Senator Mr NDT. Mr. Chairman?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2097
Mr. Wilson, was Mr. Samish connected Avitli the California Brewers
Association at that time?
Mr. Wilson. Senator, whether at that specific time or not, 1 don t
know. Mr. Samish was and had been connected with the California
Brewers Institnte for quite some time. _
Senator Mundt. Could he not speak pretty authoritatively con-
cerning the opinion of the California Brewers Association ?
Mr. Wilsox. I wouldn't say so on matters of that kind, with the
various brewers. .
Senator Mundt. He was apparently representmji tliem ratlier ade-
quately at Sacramento at that time. i i , •
Mr. 'Wilson. I think he was their— I don't know whether lobbyist
was the correct term or not, but he was employed by the California
Brewers Institute. At that particular time, whether Mr. Samish was
still employed or whether he had difliculty, I couldn't answer as to
those dates. • i. j
Senator Mfndt. Maybe you better call him a fmictionary instead
of a lobbyist. There are a lot of lobbyists in this town that would
not like to follow the pattern followed by Mr. Samish. But he was
a functionary, certainly. I want to see whether this is the era of the
czardom of Samish. „ . , . ^ ^ ^ s-
Mr.WiLSON. I think Samish is out of circulation and has been tor
some time. ,
Senator Mundt. But the time we are talking about now, 1 wonder
if this is during the time that Mr. Samish was the functionary of
the California Brewers Association. .„ x x .i
Mr. Wilson. I couldn't answer that question specihc. 1 am ot the
opinion, and this is merely a guess, that he was not at that time.
Senator Mundt. We can probably get it out of the realm of con-
jecture and make it easier, if I ask you this question: Did you know
Mr. Samish?
Mr Wilson. I had met Mr. Samish ; yes, sir.
Senator Mundt. Did you work with Mr. Samish m connection with
the California problems? Did you go to him for advice as you did
with Mr. Beck? . o • i
Mr Wilson. I never worked with Mr. Samish except m meetings
of the California Brewers Institute, shortly after we became members.
Senator Mundt. You discussed with him these differences of opin-
ion in the membership of the Brewers Association; did you?
Mr. Wilson. No, sir. .
Senator Mundt. You did not advise with him concerning the same
problems you advised with Mr. Beck ?
Mr. Wilson. No, sir.
The Chairman. Senator Goldwater? , , .,
Senator GoLDW^\TER. Mr. Wilson, do you deal with many unions
in your breweries ? . .
Mr. Wilson. We have many, many unions, yes, all over tlie
country. ^ -j. i 9
Senator Goldwater. Would you know how many, api)roxiinately (
Mr Wilson. No, sir, I couldn't answer that question. \Ve have,
in different parts of the country, for example, in our plants we have
different unions doing different jobs. You have what are known as
the building trades or mechanical people, such as pipefitters and the
2098 IMPROPER ACTIVITIES IN THE LABOR FIELD
steamfitters -and the carpenters, and so on down the line, in that
category.
Senator Goldavater. Do you also operate breweries in communi-
ties in which there are other breweries ?
JNlr. Wilson. That is correct.
Senator Goldavater. And these other breweries have the same un-
ions to AAork with ?
Mr. WiLsox. That is correct. Those contracts are generally
jointly negotiated, either by an association or by joint negotiation.
Senator Goldwater. Wlien you are about to negotiate a new con-
tract, do you not customarily discuss with the business agent of the
unions, the local unions involved with your business, the possibilities
of the terms of your contracts being in other breweries and cities in
which you are located ?
Mr. Wilson. Being in other portions of the United States'^
Senator Goldwater. Xo. What I am trying to get at is that your
asking advice of the head of a union, of a local union, is not an un-
usual thing in business ?
Mr. Wilson. To ask the advice of him ?
Senator Goldwater. Asking the advice on a contract tliat you are
about to negotiate.
Mr. Wilson. Sure. You deal with the heads of the local unions
on your negotiations. That is correct, sir.
Senator Goldwater. I am trying to get it correct, that your asking
Mr. Beck about the situation in California is not an unusual question
in business.
Mr. Wilson. That is correct, sir.
Senator Goldwater. When you are about to make a decision in-
volving— I imagine that plaiit out there ran into quite a few millions
of dollars?
Mr. Wilson. Yes, sir.
Senator Goldwater. It would be expected of you by your board!
of directors to ask anybody or everybody about a situation.
Mr. Wilson. That is correct. That is correct, sir.
Senator Goldwater. I just want to establish that fact because I
know in business that you ask everybody that you think has any
idea about the situation.
Mr. Wilson. Yes, sir.
Senator Goldwater. And it is customary to remain on friendly
terms with your union representatives if you can.
Mr. Wilson. Yes, sir.
Senator Goldwater. And it is customary, and tell me if I am'
wrong, for you to talk with those people about your contracts and
about the contracts of your competitors ?
Mr. Wilson. Yes, sir.
Senator Goldwater. That is all, Mr. Chairman.
The Chairman. All I'ight, Mr. Kennedy.
Mr. Kennedy. Beyond this intervening in the Los Angeles strike,
beyond the discussion that you had with him in Chicago, did you have
other discussions or ask any other advice of Mr. Dave Beck regai-ding
the labor problems or labor difficulties of Anheuser-Busch ?
Mr. Wilson. T can't recall si)ecifically, Mr. Kennedv.
Mr. Kennedy. Well, generally?
Mr. Wilson. Or generally, no, sir. Xo. sir.
IMPROPER ACTIVITIES IX THE LABOR FIELD 2099
Mr. Kennedy. You never had any oilier conversations with him
about any of your contracts ?
Mr. Wilson. About any of our contracts? No, sir.
Mr. Kennedy. You never did? Did you ever have any conversa-
tions with him about any of your potential contracts ?
Mr. Wilson. I don't recall that I did. Aiiy conversations that I
would have specifically would be in generalities on union matters. You
are always trying, Mr. Kennedy, to get the trend of things, or how
things are going on, Avhich direction they are heading.
Mr. Kennedy. Did you go continuously to jSIr. Beck or did you
go frequently to Mr. Beck to get tlie trend of things?
Mr. Wilson. No, sir, I did not.
Mr. Kennedy. Did you go occasionally to ]Mr. Beck to get the trend
of things ?
Mr. Wilson. What do you mean occasionally ?
Mr. Kennedy. How many times did you go to Mr. Beck I
Mr. Wilson. I don't tMiik — since I have known Mr. Beck I have
seen him on only very, very few occasions.
Senator INIundt. Did you ever use the services of his friend Mr.
Shefferman ?
Mr. Wilson. No, sir.
Senator Mundt. I may not have the name exactly right, but you
know who I mean.
Mr. Wilson. I remember reading about a gentleman of such name
in the public press in the not too far past.
Senator Kennedy. Mr. Chairman ?
I just want to get clear about the Chicago trip. Yon talked to Mr.
Beck to find out whether the brewers in California were going to do
what about the wage demands ?
Mr. Wilson. I tried to find out from Mr. Beck whether he thought
that the brewers that were domiciled in California would take a very
strong position against the wage demands that were being made by the
local group of teamsters that were negotiating these contracts.
Senator Kennedy. ^Vliat business was that of yours ?
Mr. Wilson. Well, we were a part of that. There were some of
us that thought we should take a very strong position.
Senator Kennedy. Why do you go to the labor leader who has the
responsibility to get the most he can for his members of his union to
find out how stiff the opposition is going to be of the employers in
California? Why do 3'ou not go dii-ectly to the employers and ask
them ?
Mr. Wn.soN. Sometimes it is a little difficult to get that answer.
Senator ICennedy. I do not understand. I could understand you
going to Mr. Beck to ask him how strong the demands were going
to be of the union in California, though even that would be question-
able if Mr. Beck told you, if it were not in the union interest. But
why should you go to him to find out how stiff the employers' re-
sistance was going to be to wage demands? I do not understand
that relationship at all. Will you tell me again what possible rea-
son would you go to Mr. Beck for? Did this involve competitors
of yours ?
Mr. Wilson. Yes.
Senator Kennedy. In other words, you went to Mr. Beck, with
whom you had this abnormal, unsual business relationship to find out
2100 EMPROPER ACTIVITIES IX THE LABOR FIELD
exactly what voiir competitiors were going to do in regard to wage
demands ?
Mr. WiLsox. 'VMiat do von mean by an abnormal business relation-
ship ?
Senator Kexxedt. I have already discussed that with you. and it
seems that there is no doubt that your relationship with Mr. Beck
as a distribittor in western United States was abnormal.
Mr. WiLSOx. O. K.
Senator KIexxedt. How about this what I would call abnormal
request of Mr. Beck ?
Mr. TTiLsox. I tried to answer your cjuestion that I was trying to
find out. if I could, whether, in the opinion of the opposition, if
we might call it that, that they felt that, shall we say. our defense
was going to be imited.
Senator Ejexxedt. Your defense ?
Mr. "WrLsox. The brewers. There were brewers that were not
domiciled in California and there were brewers that were domiciled
in California.
Senator Kexxedt. I think that is a very strange request to make
of Mr. Beck. Do you think so or not, Mr. TVilson ? I am interested
in your approach toward this.
Mr. WiLSOX. Xo. I did not think so.
Senator Kexxedt. You think, in other words, that that was a
reasonable request, a normal request ?
!Mr. WiLSox. I^t me try and descrilje this.
Senator Kexxedt. I am interested in your ethical approach and
the Anheu?er-Bu«cli Co.'s toward tliis whole relationsliip.
Mr. TTiLSOx. O. K. Let me say this, for example. Milwaukee had
a long strike back in 1953. I believe, and they were all pretty well
united. One brewer in ^lilwaukee broke out and settled a contract,
settled their contract, behind the backs of the others. The others, of
course were -rnck with that contract. They had to go ahead with it.
I was just trying to find out. if I could, the opinion of Mr. Beck
as to how strong he thought that liis opposition was going to be with
the brewei^.
Senator Kexxedt. In other words, you wanted to find out whether
it looked like any one of tlie brewers out there in California was
going to. as you say. break out. as one of them did in Milwaukee, and
give the union the increased wage demanded ?
Mr. TVelsox. In effect, yes.
Senator Kexxedt. TVere you one of those companies in California
that were engaged with the other brewers in negotiating with the
union?
Mr. "WiLsox. Yes.
Senator Kexxedt. In other words. Mr. Wilson, you were in-
terested in finding out confidential information which involved the
teamsters union, and possible competitors of yours in California, to
find out whether they were running out on you beliind your back,
is that correct ?
Mr. TViLSOx. "Well, I don't know that I would put it in those
exact terms, but in the overall that would be something. In other
words, suppose that you and I both had companies, and that we
were negotiating a contract, and one of us decides that we are not
going to fight very hard, we are not going to run the risk of taking
IMPROPER ACTIVITIES IX THE LABOR FIELD 2101
a strike and so forth. It is certainly to your advantage to know
that, as to wliether you are <roing to take a strong position and be out
on a limb by yourself.
Mr. IvExxEDV. Before he finishes, I just want to ask you on that
strike in Los Angeles, going back to that for a minute, what happened
on that matter ^
Mr. WiLSOX. To the best of my recollection, Mr. Kennedy, that
jurisdictional dispute was finally settled. I can't tell you the exact
terms that tliat was settled.
^Ir. Kexxedy. Do you understand that that was settled shortly
after you received a telegram from Mr. Beck?
Mr. AViLSOx. I can't tell you whether it was settled after the tele-
gram was received or before tlie telegram was received.
Mr. Ivexxt:dy. It was right around that time ?
Mr. ^^iLsox. I assume so. You are asking me to answer you on
dates and I can't tell you those dates. I just don't know.
Mr. Ivexxt:dy. Can you remember that the strike was settled shortly
or during the period of time or around the time that 3'ou received
the telegram from ]Mr. Dave Beck ?
Mr. WiLSox. I would assume so. I can't be specific on that and
those exact dates. All I can tell you is this, that construction did
proceed on the plant.
Mr. IvExxEDY. Did you understand that Mr. Beck's intervention
assisted in the settling of that strike ?
Mr. WiLsox. I don't know whether it did or whether it did not.
Mr. Kexxedy. Do you tliink that that could have been a factor in
settlmg the strike ?
Mr, WiLSOx. I couldn't say whether it was or not. When you have
labor difficulties with large plants, you are certainly going to exhaust
every means that is at your command to try and get those people
back to work because it is pretty expensive, not oidy for the employer
but for the employee.
It affects the economy of the country and affects the emploj'er.
Mr. IvExx-^EDY. You do not know definitely what settled the strike?
Mr. WiLsox. I can't tell you at this time definitely what did. I am
sure that is on the record of the people that were handling that strike
situation.
Mr. IvExx'EDY. The two things you do know are that Mr. Dave
Beck intervened in the strike and Xo. 2, that the strike was settled?
Mr. WiLsox. That is on the record. You have that.
(At this point Senator Goldwater left the hearing room.)
Senator Kexxedy. In the Milwaukee case, when that one brewer
broke the line, did that mean that the otlier brewers had to accept the
same wage mcrease ?
Mr. WiLsox. What else could they do ?
Senator Ivexxedy. In other words, the employees of all the brew-
eries in Milwaukee received the same wage incrase. It seems to me
that that suggests that if in California one of the breweries had given
in, that would have meant that all of the employes in that area, in-
cluding the teamsters, would have received the same increase as this
one brewery would have given.
So what you were attempting to do, indirectly, was to find out
whether that was going to be done and the fact tliat Mr. Beck at-
tempted to supply you with that infonnation, which would help you
2102 IMPROPER ACTIVITIES IN THE LABOR FIELD
in your bargaining relationships, indicated that his interest was, it
seems to me, very close to yours, and not primarily in the interest of
the employees out there.
Is that a reasonable position or deduction to draw'^
Mr. Wilson. I would think, Senator, that it would be to the inter-
est of any labor-iuiion leader, large or small, to keep his members
employed on the best possible basis that he can keep them employed.
Senator Kennedy. It was not quite that, it seems to me, Mr. Wilson.
It seems to me that you were attempting to find out whether anybody
was going to break the line in California and give what you might
consider excessive and what they might not, the employees in that
one brev.-ery, excessive wage increases to the employees in that area.
It would seem to me that Mr. Beck, by discussing this with you,
associated himself with you in a limitation on the, wage increases of
the employees in California.
Mr. Wilson. No, I would not say that.
Senator Kennedy. Tell me about that. You were attempting to
prevent what happened in Milwaukee which resulted in strong wage
increases for employees in that area.
Mr. Wilson. I Avas not trying to prevent that. I was trying to
determine, in our own mind, if some of the brewers felt that we should
rake a strong opposition to all of these things, whether they were
justified in taking that strong opposition or not.
Senator Kennedy. To find out whether one of them was going to
break away.
Mr. Wilson. Whether one of them or several of them.
Senator Kennedy. That you would be justified in taking a strong
opposition'^ How do you mean justified? In other words, whether
they would all sustain you?
Mr. Wilson. You certainly don't want to go out and take a strike
Avith some l)reweries and h.ave other brcAveries operating. This is a
very highly competitive business. I hope you understand that.
AVlien your productivity is not available, people get used to drinking
somebody else's and maybe they don't come back to you.
Senator Kennedy. I want to state that it seems to me that in the
first place you did not give the Budweiser distribution rights to the
company which had it before the war, which I understand now does
have an interest in it — the Cameo Brothers, or something.
Mr. Wilson. I could not ansAver that question. My employment
started with Anheuser-Busch in 1951.
Senator Kennedy. You gave this K. & L. Co., in which Mr. Beck
had an intei'est, the biggest territory in the country. You had 4 or 5
years of great difficulty Avith him, but you did not break off your agree-
ment, Avhich you could have done as you had no contract.
You gave them special orders of beer that no one else could get.
You offei-ed to pay $80,000 for the company, even though it had
$30,000 Avorth of debts. You extended Mr. Levine credit, not a credit
comparable to tlie credit you extended him to get out of the tax in
Alaska, but a credit to buy out another partner, Avhich is an entirely
differeut type of credit, and I doubt ver}^ much Avhether you engage
in that ty[)e of credit activity very often throughout the country.
Then, at the same time, Mv. Beck was of assistance to you in a strike
in Los Angeles
IMPROPER ACTIVITIES IN THE LABOR FIELD 2103^
Senator Kennedy. And you also went to liim in Chicago — tlie.se are
the only two records the committee has but there were other conver-
sations— to oive you what 1 consider, as a member of tlie labor (;om-
mittee, completely improper information, that that was an improper
discussion with him, that the purposes for which you went were im-
proper,
I think Mr. Beck, as you have stated, has engaged in an abnormal
relation with you which is neither to Mr. Beck's credit or your
company's.
The Chairman. Are there any further questions?
The document that base been testified to, of October IG, 1952, signed
by Mr. R. A. Rawizza, of the tax department, will be made exhibit
No. 139.
(The document referred to was marked "Exhibit No. lo9'' for
reference and will be found in the appendix on p. 2469.)
The Chairman. Are there any further questions ?
Senator MuNiyr. Mr. Chairman, I think we ought to wrap up this
Chicago thing.
I am not too clear in my mind whether there is anything improper
or not about that, or what the motivating factors were.
I do not think anybody has answered the question, nor have you
volunteered the information, as to what resulted from the conference.
You went to see him, you had some questions and he gave you some
advice. What happened, Mr. Wilson, as a consequence of the con-
ference ?
Mr. Wilson. The contract was finally negotiated by the California
Brewers Institute at a higher figure than some of us thought it should
be paid.
Senator Mundt. So that labor did not suffer, then, as a result of
the conference ?
Mr. Wilson. That is correct, sir.
Senator Mundt. And the strike was averted ?
Mr. Wilson. Yes, sir.
Senator Mundt. I would just like to have your opinion. I am not
on the labor commitee, but I am from a State which is on the verge
of becoming a great industrial State, but which has not yet achieved
that goal.
Is that a normal or proper or improper practice, for management to
talk to union officials in an effort to avert a strike and settle wage dis-
putes as a result of a conference rathqr than as a result of strikes ?
Mr. Wilson. Yes, sir.
Senator Mundt, You do not see anything improper about that?
Mr. Wilson. No, sir.
Senator Mundt. I am not an authority on it. I do not see any-
thing improper about it either. But I am wondering because I do
not know.
Senator Kennedy. I would like to state this: Mr. Wilson did not
say he went to Mr. Beck in order to conduct wage negotiations with
him. He went to find out what his competitors were going to do on
wage negotiations, which is an entirely different matter.
Mr. Wilson. Senator Kennedy, I stated that I went to Mr. Beck
to get his opinion as to how united all the opposition would be on
what we thought was an excessive wage increase.
Senator Kennedy. Was that information available to them?
2104 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Wilson. I would assume if they went there, they would have.
The Chairman. Thank you very much.
Mr. Wilson. Thank you, Senator.
The Chairman. You may stand aside.
The committee will recess until 2 o'clock.
(Present at the taking of the recess were Senators McClellan, Ken-
nedy, Ervin, Mundt and Curtis.)
(Whereupon, at 11:45 a. m., the committee recessed to reconvene
at 2 p. m., the same day.)
AFTERNOON SESSION
The Chairman. The committee will come to order.
(Members of the select committee present at the convening of the
session were Senators McClellan and McNamara.)
The Chairman. Mr. Counsel, call your next witness.
Mr. Kennedy. Mr. Fred Loomis.
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate select committee shall be the truth, the whole
truth and nothing but the truth so help you God ?
Mr. Loomis. I do.
TESTIMONY OF FEED P. LOOMIS
The Chairman. State your name and your place of i-esidence and
your business or occupation.
Mr. Loomis. Fred P. Loomis. 1 live at 8640 Xortheast Sixth,
Belleview, Wash., and my office is at 1037 Henry Building, Seattle.
I am an investment counsel.
The Chairman. You have talked to members of the staff, liave you,
regarding your testimony ?
Mr. Loomis. Yes, sir.
The Chairman. Do you desire to have counsel present to advise
you
Mr. Loomis. I do not need it, sir.
The Chairman. Thank you very much.
Mr. Loomis. I hope.
The Chairman. Thank you, sir.
Mr. Kennedy, you may proceed.
Mr. Kennedy. Mr. Loomis, tell the committee a little bit of your
background, where you come from originally.
Mr. Loomis. I was originally from a Nebraska farm and I was
educated at the University of Wisconsin. After World War I, I went
to Seattle and I was in the banking business for 10 years. In 1931 T
opened my own office as an investment counsel.
My experience in the 10 years in banking was in the investment
division. I was in two Seattle banks.
Mr. Kennedy. You have held many different accounts since you
went in as an independent investment couselor ?
Mr. Loomis. I didn't hear you.
Mr. Kennedy. You have had many different accounts since you
went in as an independent investment counselor ?
Mr. Loomis. And I still do have.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2105
Mr. Kennedy. Mr. Loomis, at one time were you doing some work
for Mr. Dave Beck ?
Mr. Loomis. Yes, sir, I was. , ^ ^r -r^ t^ i ^
Mr. Kennedy. When did you first go to work for Mr. Dave Beck i
Mr. Loomis. I can't give the exact date, but it will be m the month
of November or early December 1947.
The Chairman. To clarify tliat, you mean you were working tor
Mr. Beck personally, or for tlie teamsters i
Mr. Loomis. Personally. . , ,r t^ i j
Mr. Kennedy. What position did you hold with Mr. Beck and
wdiat were you doing ? on .i
Mr. Loomis. He was a client of my office, along with 25 or oO otlier
people.
Mr. Kennedy. You were advising him?
Mr. Loomis. Yes, sir.
Mr. Kennedy. On what type of matters ?
Mr. Loomis. The first problem which he assigned to me was an
examination of the K. & L. Distributors Co. The question was, at
what price should he buy this if he bought it, and he asked me to as-
certain what was a fair price.
Mr. Kennedy. Did you advise him on this and on other matters in
subsequent years ?
Mr. Loomis. Yes, sir.
Mr. Kennedy. Ultimately, when he became the international presi-
dent of the teamsters, did he also retain you as an adviser for the
Brotherhood of Teamsters ?
Mr. Loomis. Yes. That was in December of 1951. He asked me to
advise him with respect to the investment of some $30 million of liquid
assets of the Teamsters International.
Mr. Kennedy. What date was that ?
Mr. Looiiis. That was December 1952.
Mr. Kennedy. Well, then, your contract was signed m April 1953.
Mr. Loomis. I believe that is correct.
Mr. IvENNEDY. There was that much time elapsed before you signed
vour contract ^
^ Mr. Loomis. The matter of that contract was only a matter ot form,
but my services actually began and my pay began on December 1,
1952
Mr. Kennedy. When you did work for Mr. Dave Beck as an adviser
you were paid by him and when you did work for the International
you were paid by' them, is that right ?
Mr. Loomis. They were always kept separate.
Mr. Kennedy. You kept the accounts separate ?
Mr. Loomis. Yes, sir.
Mr. Kennedy. You did not charge the International for work you
did for Mr. Dave Beck?
Mr. Loomis. Xever. .
Mr. Kennedy. You ultimately broke with Mr. Beck; is that rights
Mr. Loomis. That is correct.
Mr. Kennedy. Approximately what date was that?
Mr. Loomis. The final break took place on February 15, 1955. My
pay, I believe, continued until March 1.
2106 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Was the break initiated by you ?
Mr. LooMis. It was.
(At this point, Senator Curtis entered the hearing room.)
Mr. Kennedy. Was the reason for the break that you felt that Mr.
Dave Beck was acting improperly ?
Mr. LooMis. Yes, that is correct. At least I was suspicious on that
date.
Mr. Kennedy. And that was the reason you broke with him.
Mr., LooMis. Yes, sir.
Mr. Kennedy. I would like to take you back a few years to some
transactions that led up to your finally breaking with Mr. Dave Beck.
Mr. Loomis, were there some mortgages that the International was
considering purchasing and that you were called m to advise the Inter-
national Brotherhood of Teamsters on ?
Mr. LooMis. Yes.
Mr. Kennedy. Approximately what time was that ?
Mr. LooMis. Do you refer to the break ?
Mr. Kennedy. No, I am going back now.
Mr. LooMis. Well, at the time I took over, the assets of the Inter-
national consisted of a large amount of cash, some of which was lying
idle in checking accounts, and some was drawing interest from the
bank and the balance invested in United States Government bonds of
various maturities.
Then, I think we began to buy mortgages some months after that,
in order to increase the income from the investment.
Mr. Kennedy, Were some of the mortgages that you were consid-
ering buying tlie Lanphar mortgages up from Detroit, Mich.
Mr. LooMis. That was one situation which I uncovered as a poten-
tial profitable opportunity for the union and it resulted in our pur-
chase, and I can't give you the exact date, but I think it was in late
1953, August or September, of $1,000,000 of veterans' mortgages.
(At tliis point. Senator Goldwater entered the hearing room.)
Mr. Kennedy. They Avere purchased by the teamsters ?
Mr. LooMis. Correct.
Mr. Kennedy. And you had given the teamsters the initial advice
to purchase these mortgages ?
Mr. LooMis. Yes.
Mr. Kennedy. And you had some discussion with Lamphar, did
you?
Mr. LooMis. Yes. I Avas liere in Washington and Mr. Beck called
me to Washington on a matter and I told him that with the break
which liad taken place some moiiths earlier in United States Govern-
ment bonds, there were quite a number of weak spots in the mortgage
market at various points in the United States and one of the weak-
nesses, therefore, offering us the greatest opportunity was in Detroit.
I had been in Los Angeles a week or 10 days prior "to this, and there
I picked U}) the name of Lanphar and Co. in Detroit from the head
of the mortgage department of the Occidental Life Insurance Co. of
Los Anojeles, with whom they did a great deal of business.
On his recommendation, I flew from Washington over to Detroit
and I saw :Mr. Lanphar. As a result of my visit^at his office that day
and the day following, I left Detroit for Seattle with a tentative com-
mitment for $1,. 500,000 of veterans' mortgages.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2107
Some of them were 4 percent bonds and some were mortgages and
some were 4i/., priced at 92 and 95 respectively to yield the team-
sters international 51/2 percent which was a very high return m that
Now' that 51/, percent return was prior to a 1/2 percent charge nor-
mally made by" mortgage companies to sei-vice the mortgages.
Mr Kennedy. Could you continue with what occurred ^^
Mr. LooMis. I returned to Seattle, and a meeting was called in Mr.
Beck's office at which was present Mr. Beck, Mr. Wampold, his at-
torney, and Mr. Hedlund. ^ ,1 . ^ ,
Mr Kennedy. Mr. Wampold is the attorney for the teamsters^
Mr LooMis. I am in a little doubt as to his exact status, but he
was an attorney for Mr. Beck personally, I believe, and I think that
he did work for the teamsters in Seattle.
Mr Kennedy. He was retained by the teamsters. Ihe record
shows he was retained by the teamsters and not by Mr. Beck, whether
he did work for Mr. Beck or not.
Mr. I.xx)3nis. What their arrangement was, I can t tell you.
Mr. Kennedy. I will state that as a matter of fact. Could you
continue then ? , ... ,i - y
Mr. LooMis. Mr. Beck asked me to present the proposition that i
had brought back from Detroit, which I did.
Mr. Hedlund opposed it.
TheCHAiKMAN. Who is Mr. Hedlund?
Mr LooMis. He is the president of the National Mortgage Co., a
mortgage company in Seattle through which was channeled a large
percentage of the funds which went into mortgages belonging to the
teamsters international.
The Chairman. Go ahead. I just w^anted to get a connection.
Mr. Kennedy. At that time, that mortgage company had not been
formed, isn't that correct? This is in 1953, the middle of 1953.
Mr. LooMis. It may not have been formed at that time, but I suspect
that it was embrvonic at least, in the minds of some people.
Mr. Kennedy. Now, ISIr. Hedlund at that time was acting as an
adviser for the teamsters, was he not ?
Mr. LooMis. On mortgages ; yes.
Mr. Kennedy. Tliat was his position ?
Mr. LooMis. Yes.
Mr. Kennedy. He was advising the teamsters on these mortgages^
Mr. LooMis. That is right. Now, lie opposed this mortgage pur-
chase and I think it would be fair to say on the general ground he was
opposed to any block buying at a discount.
Now, by "block buying"' I mean buying a large block of mortgages
instead of individually. After some discussion for perhaps a half
hour, I said to Mr. Beck that unless Mr. Hedlund could present some
vital arguments against the purchase of this block of mortgages, that
I wanted the deal to go through.
Mr. Hedlund did not give any further reason as to why, and Mr.
Beck, recognizing that here his two advisers were at logerheads, was
in rather an embarrassing position. He picked up the phone and he
called Mr. lUirke of the Occidental Insurance Co. in Los Angele.s, and
asked if he could send us down and let us talk with him. That was
done the following day. We met in the Statler Hotel, and Mr. Burke
2108 rVIPROPER ACTIVITIES IN THE LABOR FIELD
and Mr. Hession, who I believe is Mr. Burke's assistant, and Mr. Hed-
Imid, and myself.
After discussing the merits of this proposal among us four, Mr.
Burke decided to call Mr. Lanphar in Detroit. He talked with him a
little bit and then turned the phone over to Mr. Hedlund. After the
conversation between Mr. Hedlund and Mr. Lanphar on the long-
distance phone, Mr. Hedlund's opposition to this deal melted.
We went biu i: to Seattle and Mr. Lanphar and his attorney brought
out a large block of mortgages and they were examined by Mr. Hed-
lund and Mr. Lanphar and I looked at some of them myself.
We committed, and took, and paid for, and received delivery of
$1,600,000 of these mortgages. They are guaranteed by the United
States Government, as you know.
Mr. Kennedy. As stated, Mr. Hedlund was working for the team-
sters at that time. Did you ever learn that anybody received any
commission ?
Mr. LooMis. I did not mean to imply tliat Mr. Hedlund was work-
ing for the teamsters. He was advising Mr. Beck as a mortgage man.
I do not believe he was on the payroll of the teamsters, although he
may have been.
Mr. Kennedy. Did you ever learn there was any commission paid,
or any moneys paid in connection with this?
Mr. LooMis. At the final meeting with Mr. Beck, which we might
call the blow-up meeting, there was a lull in tlie conversation. This
meeting lasted from 9 : 30 in tlie morning until 12 : 30, and I said,
"Don how much did you get out of the Detroit deal ?"
And he said, "$8,000."
I asked no further questions.
Mr. Kennedy. Do you know if anybody received any of that $8,000
other than Mr. Hedlund ?
Mr. LooMis. I don't know the disposition of that money; no, sir.
Mr. Kennedy. You don't know if Mr. Dave Beck received anv of
that? ^
Mr. LooMis. I do not know.
Mr. Kennedy. During this period of time when you w-ere dis-
cussing the Lanphar mortgages, did you write Mr. Dave Beck a letter
settnig forth some of the matters tliat disturbed you ?
Mr. LooMis. You mean just prior to this meeting?
Mr. Kennedy. During this period of time on the Lanphar mort-
gages. Had you written him a letter? During the course of the ne-
gotiations and after your meeting down in Los Angeles ?
Mr. LooMis. Oh, yes, I did, I wrote him a letter. I think it was
after I returned from Los Angeles and he was out of the city at the
time, I believe.
Mr. Kennedy. Was there sometliing that occurred at the meeting
111 Los Angeles, that caused you some disturbance?
Mr. LooMis. Yes, sir.
Mr. Kennedy. Wliat was that? Maybe it would be better if you
read the letter and I think it sets it forth. Do you have a copy of it
tliere ? ^ i j
Mr. LooMis. This letter is dated September 30, and I think I told
you August. It was September 16, 1953. This letter I wrote in long-
hand because I was, I tliink, at home at tlie time.
Do you want me to read it, Mr. Kennedy ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2109
Mr. Kennedy. Just one moment, please.
The Chairman. Would you identify this as photostatic copy?
Would you identify this as a photostatic copy of the original letter,
please ?
(A document was handed to the witness.)
Mr. LooMis. That is my writing ; yes, sir.
The Chairman. Is that the letter that you are referring to, of
which you have a copy on the desk at the witness chair ?
Mr. LooMis. Yes, sir .
The Chairman. I just want to get it identified. This letter may
be made exhibit No. 140 but in the meantime you read it from your
copy.
(The document referred to follows :)
Mr. Loomis (reading) :
Dear Dave: Dui'ing the course of our conversation at the Statler in Los
An.seles (Burke, Hession, Don and I) last Friday Don told Burke he was
reentering the mortgage business and would Occidental make his company their
Seattle agent to make loans. Don prefaced his request with the statement (with
an air of mystery) that "after you've given me your answer I'll have some news
for you of interest — but 1 want your answer first" (this is as closely as I can
quote it).
Well Burke was on a kind of hot spot because he did not know what was
coming, but his answer was a guarded "yes, we would be glad to when we have
the money, and notes are right, etc. etc."
Then Don says, "Well here's the news : Dave Beck and I are going into the
mortgage business together." It was said in such a way that Burke & Hession
could and I think did believe) you and Don are full partners in every sense, and
your interest in the mortgage company was to be used as a basis of expectation
of favors from Occidental.
Rightly or wrongly I kept my mouth shut until about 5 : 30 p. m. here tonite
when Burke phoned me re their appraiser making examination of Dulien's
property in Los Angeles. (Details of this latter I'll pass up in this letter as not
pertinent.) After that point was flnislied I told him (Burke) of the Detroit
people being here and likelihood that a deal would be consummated, etc. —
and then I added that "the way I feel now I'd like to add to our holdings of
these wide discount mortgages, but as matters stand now I guess the mort-
gage company to be organized up here is in conflict with that procedure. And,
by the way while I'm at it, let me correct any impression you may have gotten
from Mr. Hedlund that Mr. Beck is going to own any part of that mortgage
company— I feel sure he's not putting a cent into it — the last thing he'd do
would he to set himself up in a i>osition to siphon off some gains for himself
through the flow of any funds of the ii\ternational. He'll not only avoid evil
but likewise the appearance of it."
Tlie Chairman. AVas tliat your opinion of Mr. Beck at that time?
Mv. Loomis. That is correct; yes, sir.
The Chairman. You may continue.
Mr. Tx)0Mis (reading) :
Mr. Burke: "Well I'm delighted to hear you say this for I was shocked"
end quote. Then Burke went oh about you personally in such a way as to
warm the cockles of your heart, did you hear it (and I'm sure he feels every
word ) .
While I'm at it—
that is Mr. Burke speaking of Mr. Beck —
I want to go on and "shoot the works" on this whole thing, particularly as
relates Don, or rather my impression of him as an associate.
I think it not necessary to say to y(m that he wanted to kill the Detroit
deal, kill it dead in your ofiice (conference of us four) before it got started.
Failing that, then kill it at the Statler in Los Angeles in conference with Burke
and Hession: failing that, kill it through his examination of the mortgages
themselves.
2110 IMPROPER ACTIVITIES IN THE LABOR FIELD
The tirst effurt failed with you or you would not have sent us to Los Angeles.
The second one failed because his position on "block buying," on "discount
l>uying," on "buying from Fannie May," and other points were almost com-
pletely at variance with the opinion and practices of Burke and Occidental.^ —
that is the Occidental Life Insurance Co. —
What I said in your office I'e the Detroit deal could not possibly have been more
fully vindicated than it was by what Hession and Burke had to say in Los
Angeles.
The thii-d effort to kill the deal failed because I instructed Lanphar to bring
out an adequate number of 4yo's to substitute for any possible 4's we might
tlirow out. Since there were so many of both, it would be near impossible to
not accept at least 1^2 million.
When our Statler meeting adjourned, I went to the elevator with Burke and
Hession to see them off and to thank them for their courtesy and help. I com-
mented to Burke that Don was against this block buying at a discount but that
I saw $00,000 gain for our international, and that "I could do a lot of work
for (iO.OOO bucks." Burke's answer was significant —
this is Mr. Burke speaking now —
Well, of course, any funds from block buying at a discount don't go through
his mortgage company and I guess you can't blame people for being selfish in
the kind of a world we live in.
I am convinced that Don would have knocked us out of a good deal to help
himself— .$60,000 worth. (T arrive at !R60,fKX) by 4 points difference on li/a
million — 90 for 4's from Fannie May that Don wanted to buy as against the
Detroits at 92.) Incidentally, Burke and Hession in the hall near Statler ele-
vator said buying Fannie Mays in this market was nuts, when better ones
were at wider diseoiiuts in some markets: and besides most of the stuff (they
say) in Fannie Mnj is there because it was not good enough to be sold in the
market competitively. (Mortgages in large denomination I understand would
be an exception to this.) And Don would take advantage of my (suspected)
ignorance and switch us from the good wide discount stuff.
Now I would not have l>een so suspicious of Don's position (in the meeting
on this in your office with Si Wampold) had my confidence not been jarred
some on a previotis occasion when he argued so fluently and so speciously for
the merits (from the international standpoint) of buying the Grosvenor House
with the international's dough in which he'd make (likely) a 6-figure profit
and put up no equity of his own. Finally (you may recall) when under my
questioning the ice under him got pretty thin, he said, "Well, Fred, you gotta
admit the idea and the ability to put it together is worth something."
Now Dave for the brighter side : I think Don will prove an able partner.
I do not think hell take any money that does not belong to him. I feel he's con-
spicuously equipped to do a job in a workmanlike manner through brains, expe-
rience, judgment, technical training, personality, and contacts in the field. I
think too he'll look out for Don, and probably will not need encouragement to
exploit his relationship with Dave Beck. I can and will work with him, as long
as I can do so in the interest of my clients.
May I add in closing that perhaps there should come from you a clarification
of whatever your position in the mortgage company is to publicly be.
Also I want to say in justice to Don that from the moment he talked to
Lanphar (on the phone in Los Angeles) he was less antagonistic to the Detroit
deal, and up here working with Lanphar and latter's lawyer he's done a fine job,
I think, and has approved about $1 million in 4's at 92, and about $500,000 4y2's
at a comparable price (95 to yield 5Vj percent).
Dave I don't like to write this kind of a letter. There are things in it I've
wanted to say before but I've found my loyalty to you in conflict with my dis-
taste and dislike of anything which savors of tattling. Furthermore, I prefer
to do my fighting out in the open. But Burke's call tonight made me sit down
and write as I have instead of waiting weeks till I could sit down and talk this
to you personally. It is written longhand because I do not want it to go through
other hands in my office. ( Will you destroy. I
Sincerely,
Fred P. L.
September 1,0, 19.5.S.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2111
Mr. Kennedy. Mr. Loomis, did you receive a reply from Mr. Beck
to that letter ?
Mr. LooMis. Yes, I did.
Mr. Kennedy. Could we have that, Mr. Chairman {
The CjiAiitMAN. .May 1 present to you what purports to be a photo-
static copy of the reply. Will you identify it i
Mr. LooMis. That is correct.
The CiiAiioiAN. It may be made exhibit No. 141.
The Chairman. You luay proceed to read the reply.
Mr. LooMis. This letter Is written on the letterhead of the Interna-
tional Brotherhood of Teamsters, in Washington, D. C.
(The document referred to follows:)
Dear Fred : I received your loushaiul letter and read it very carefully. I am
very sorry if Dou told Burke that I was goinii into the mortgage business with
him. As you will recall 1 told Don in our office that morning that I would not
be in the tirm as a partner, it would be in another name. I agree with you 100
percent that 1 cannot as such set up a mortgage company with Don or anyone
else without immediately opening up myself for a target from the mortgage peo-
ple and everyone else that would like to potshot Beck. I repeat I can see no
valid objection to my rewarding my friends with our business rather than just
acquaintances.
May I stop here to state that I had repeatedly admonished Mr.
Beck that he must not place himself in a position of conflict by going
into this mortgage company.
The Chairman. He later went into it ^
Mr. TiOOMis. Y'es, sir.
The Chairman. All right, proceed.
Mr. LooMis (reading) :
I have not and I will not be a party directly or indirectly to creating any situ-
ation or dealing with anyone to the injury of our international union. I insist
that the international union get the advantage in every respect that would accrue
from any purchase, but in buying it has to go through some broker so the inter-
nationaf union is not injin-ed whether it be through Don's associates or s-ime other
mortgage company. I did, in the presence of you and Simond, recommend to Don
that the company to be formed try to get Occidental business in Seattle, and I
pointed out that in my judgment Occidental would be receptive.
May I explain that the meaning of that is this: This company that
was to be formed would be in the business of lending money, and the
Occidental Insurance Co., along with other companies, have money
to lend and they do it through' agents. This would be an agent in
Seattle for the Occidental.
The Chairman. It would be a local broker.
Mr. LooMis. Correct.
In my judgment, it again is the situation where Occidental would recognize
that if Don's company was qualified and no premium than would be the return
to any other company was involved, they would reciprocate business relations.
In our dealings with Occidental we do not ask for any concessions, but do business
on the open market basis.
I am glad you told Burke as you did, as I will emphasize this to him when I
see him later in the month in Los Angeles or in October. If Don wanted to kill
the Detroit deal, Fred, I am surprised because I arranged for both of you to
go to Los Angeles to consummate it. I am sure you will agree that I did not
change my position in the slightest degree, namely, to purchase IV2 million at a
list of 92. It was agreed among us that the company Don was discussing would
89330— 57— pt. 7 9
2112 IMPROPER ACTIVITIES IN THE LABOR FIELD
be checked into by Simond, and if it got clearance we would puixhase tbrougli
it an additional IV2 million. We further agreed this was sound because it would
give us a chance to supply international money into the Seattle and adjacent area
that I would like to develop in preference to Detroit or anywhere else.
We were agreed this simply meant dealing through Don's company a friend
instead of some other mortgage company or bank where the cost to the interna-
tional union would be the same. Be assured, Fred, I am not and will not vio-
late any confidence with you for Don or anyone else. I will not in the slightest
degree enter into any commitment with Don's company that will be of greater
cost to our international union than dealing with any other mortgage company.
I bank with Seattle National instead of Indianapolis on the same basis. I
deal with George Newell on insurance instead of some other company for the
same reason. Time will prove that any purchases we make through Don's com-
pany if it is approved will be on a competitive basis without penalty to the
international union. In every instance of purchase I will go over it with you,
and my decision in every instance will be first the welfare of the international
union, then and only then that all things equal Don's company receive the
business.
I certainly intend to utilize the avenue of advice from Occidental through
Burke. I am deeply disappointed if Don would have attempted to block the
purchase of block buying on a basis of it costing him opportunity to profit.
Fred, I am sure you agree that if I did not desire the best possible deal for
the international union with only assurance of competent and careful investi-
gation I would not have sent you and Don to Los Angeles for open discussion
with Burke and his associate.
Relative to the Grosvenor House deal : I am only interested in that deal
if it will net the union as good or better return than can be secured by inter-
national investment elsewhere and without paying a cost to Don's company or
anyone else out of line with what would be normal commission to any other
company.
I want to comment on your remarks about Don on page 6 (the brighter side).
I would not deal with Don for 1 minute if I did not think, first, he was thor-
oughly honest, and second, ably qualified.
I will contact him immediately and insist that my name not be used in any
way to secure business or that I am associated personally with his firm. My
relations with the company are that I am interested in Don and his associates
as friends and because of it subject to service will deal with his company. I
will emphasize I deal with the Seattle First National on the same basis. Every
transaction will be scrutinized by Don and I on the same basis as if we were
purchasing through any other company. I am not at all sure we need his
worth and friends. I am anxious to aid some of my associates to successful
bvisiness development if I can do so without penalty to the international union.
I am returning your letter to you and I want you and Wampold to discuss
as much of the subject matter as you desire. Wampold and you are both my
friends and confidants and I will look to both of you in the future for advice.
Dave.
P. S. — I have no objection of your going over this letter with Simond if you
so desire.
D. B.
Mr. Kennedy. Now, just on this letter, it states here, "I would not
be in the firm as a partner, it would be in another name." Was there
a company formed ?
Mr. LooMis. It is my understandinor^ Mr. Kennedy, when the Na-
tional Mortoajre Co. was formed.
Mr. Kennedy. This was Mr. Hedlund's company ?
Mr. LooMis. Yes, that Mr. Hedlund had a third of the stock, and
his associate, Mr. Sherman Stevens had a third, and a third was pur-
chased by Mr. Beck's nephew, Joe McEvoy, Avith money which Mr.
J^eck loaned him and took back a note.
Now I have never seen that note. I have never seen the accounting
on it. I only believe that it exists because Mr. Reck and I have talked
altout it a number of times.
IISIPROPER ACTIVITIES IN THE LABOR FIELD 2113
Ml-. Kkxxkdv. Did :Mr. Hctk luliuit to you tliat the raoiu-y that Mr.
MeP^voy had })iit into the company had come from him :■
Mr. L<«()Mis. Yes. that iscorrect.
Mr. Kknxedy. Was it understood that Mr. McEvoy was represent-
in <>• Mr. lieck's interest in that company (
Mr. L(H»3iis. Mr. ^IcEvoy was never heard from so far as tlie com-
pany was concerned, to my knoAA'ledge.
]\rr. Kexxedy. What position did Mv. McEvoy hokl at tluit time ^
What kind of a job did he have ?
Mr, LooMis. I presnme lie only was a stockholdei-, and T never saw
the man except once or twice.
Mr. Kexxeoy. "\^^lat other job did lie liave durinij that time?
Mr. LooMis. I don't know.
Mr. Kexxedy. You have no idea ?
Mr. Looaiis. I do not know.
Mr. Kexxedy. On this National Mortgage Co. that was formed
at the end of 1953 or approximately around this period of time that
you wrote the letter, Avhicli Joe McEvoy came into, from that time to
this time, have the mortgages that the teamsters have purchased been
purchased on a competitive basis, or have they been purchased through
the National Mortgage Co. ?
Mr. LooMis. I would say overwhelmingly they have gone through
the National Mortgage Co.
Mr. Kexx^edy. It has not been on a competitive basis?
Mr. LooMis. I do not believe so. Not during my connection with the
company. There were a few exceptions. This Detroit deal was one.
T made a $r)00,000 loan on a mortgage in Kansas City, which Mr.
Hedlund had nothing to do with. In fact, he opposed it. Those are
two histances that 1 think of that he had nothing to do with, and which
did not go through his company.
Mr. Kexxedy'. As a fitnnicial adviser for the teamsters, would you
say that this was in-ojier procedure, not to have this matter on a com-
petitive basis?
Mr. LoOMis. 1 do not believe that the l>est interests of the Interna-
tional Mere served. There are several reasons. In the first place, I
did not want to see us concentrate in Seattle all together. I wanted to
distribute our loans and our risk, and I was particularly interested in
tliree cities. Denvei", Kansas City, and Phoenix. But, of course, loans
made in those areas would not be made through the National Mort-
gage Co. in the same manner as they- are in Seattle, and I never got
any place in my etforts to diversify in that respect.
From time to time, as existed in Detroit, there were weak spots in
the mortgage mai-ket in various geographic locations in the United
States, and I felt that we should be taking advantage of those things.
But Mr. Hedlund was absolutely opposed to block buying, and Mr.
Beck was dependent upon him, or made himself dependent upon him,
in the matter of acquiiing these mortgages. So that was the why it
Avas handled, to a major degree.
Mr. Kexxedy. So you would oppose the procedure that was fol-
lowed as being against the best interests of the International Brother-
hood of Teamsters, No. 1, because there was no competition in the
mortgages: and. No. 2, that they were concentrating in Seattle, con-
centrating in one city ?
2114 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. LooMis. My recoiiiiiieiulsitioiis to liim, as shown in the corre-
spondence we have here, point out that I thought that the best inter-
ests of the association, of the International, were served otherwise; yes.
Mr. Kennedy. Do you know liow mucli in mortgages approximate-
ly has gone tlirough the National Mortgage Co. ^
' Mr. LooMis. No, sir, I do not. During my administration, if I may
use that word, it amounted to several millions.
Mr. Kennedy. Mr. Beck also states in his letter —
My relations with the company are that I am interested in Don and his asso-
ciates as friends and because of the subject to service will deal with tins com-
pany.
One of the associates, of course, a-; you point out. wa^j liis wife's
nephew, is that right?
Mr. LooMis. I think so, yes. I think that is what he had in mind.
Mr. Kennedy. Mr. Chairman, we have two other letters. Evi-
dently there was a dispute and there was another company in Detroit
that felt that they should handle these mortgages.
There was a copy of a letter that was forwarded to you about that
matter, is that correct ? That was from Mr. Benjamin Ijevinson?
(At this point, Senator Ervin entered the hearing room.)
Mr. Kennedy. Can you identify this letter dated October 22, 1953?
(Document handed to witness.)
Mr. LooMis. Yes, sir. I identify that.
The Chairman. SYliat is the letter ?
Mr. Kennedy. There are two letters, I believe.
The Chairman. Identify the two letters. State what they are,
and I will let counsel read them into the record.
Mr. LooMis. May I give just a little of the background? When I
visited Detroit, Senator, I had had some earlier telephone calls from
a man by the name of Levinson, who was the head, I think, of the Mich-
igan Mortgage Co., I think was the name of the company. I tried to
get him on the phone but was unable to do so. So I did not see him
when I was in Detroit. AAHien he learned later that we had purchased
some mortgages in Detroit, he was very incensed, and this correspond-
ence followed in due course.
The Chairman. Why was he incensed about it? Do you not have
the right to purchase mortgages wherever you wanted to ?
Mr. IjOomis. I thought so, and did.
The Chairman. Proceed.
Mr. Kennedy. May we have the letters back ?
The Chairman. Counsel may read the two letters that have been
identified.
Mr. Kennedy. Mr. Chairman, may we just make them a part of the
record so that we may refer to them? It is not necessary to read
them.
The Chairman. These two letters, then, will be made exhibits 142
and 142-A.
(The documents referred to were marked "Exhibits 142 and 142-A"
for reference and will be found in the appendix on pp. 2470-2472.)
The Ch^^irman. Proceed.
Mr. Kennedy. ISIr. Loomis, during the period of time that you wei-e
an adviser to Mr. Beck, he received a fairly large loan from the Occi-
dental Insurance Co., is that correct?
IMPROPER ACTIVITIES I>i THE LABOR FIELD 21] 5
Mr LooMis. I heard about it after it ^vns made. 1 did not know
that it was being negotiated. I never saw the terms of it. It was
strictly contrary to the advice which I had given Mr. Beck personally,
which was that he should devote himself to simplifynig his hnancial
operations, getting out of a lot of these businesses, and paying oil his
debts. _, .^ • T IT
Mr. Kennedy. The record shows that from the Occidental Insur-
ance Co., with whom the teamsters placed their insurance, on the
west coast, that Mr. Beck received a loan of $273,000. Are you
familiar with that?
Mr. LooMis. I am not familiar with it, although 1 know ot its
PXlSt611C6.
Mr. Kennedy. The record also shows, I believe, that the interest
that Mr. Beck had to pay on that loan was 31/2 percent. Do you
think that that Avas a sufficient interest for that kind of a loan ?
Mr. LooMis. I do not believe so, so, sir.
TheCiiAiKMAN. How was that loan secured ?
Mr. LooMis. I can only speak from information, sir, that I picked
up from Mr. Beck, but it was secured, in my knowledge, by real estate
which Mr. Beck owned, primarily around Seattle.
The Chairman. In other words, there was security for it?
Mr. LooMis. I think so.
The Chairman. There was adecpiate security ?
Mr. LooMis. I believe that there was adequate security. That would
be my impression, yes, sir.
The Chairman. Let us see wliat is wrong with it. The teamsters
bought all their insurance from the Occidental ?
Mr. LooMis. I have no personal knowledge as to what their business
relation is, but I understand that the Occidental did the insurance
business for the Western Conference. I do not understand tlie opera-
tion of the welfare fund and the insurance of it. Senator. I just know
that the teamsters is a very important client of tlie Occidental Life
Insurance Co.
The Chairman. All right, Mr. Counsel.
Mr. Kennedy. There were also some loans from tlie Seattle First
National Bank, is that right, that Mr. Beck made ?
Mr. Loomis. All during my association with Mr. Beck, I think he
was never out of debt to the Seattle First.
Mr. Kennedy. ^V]mt bank in Seattle did the teamsters keep tlieir
money in ?
Mr. LooMis. The Seattle First National.
Mr. Kennedy. Were there any occasions on which Mr. Beck re-
ceived any loans from the Seattle First National Bank which were at
an interest percentage less than come to the ordinary person ?
Mr. LooMis. Yes. There was one instance that came to my atten-
tion, and I told Mr. Beck that I did not believe that he had any right
borrowing money at that rate, and I told the bank that I didn't think
that they had anV riffht making the loan at that rate, but I told them
also that I tliought if they didn't make it, it might not be in their
interest.
Mr. Kennedy. How mucli was that loan ?
Mr. LooMis. That loan was for $100,000 for the account of Dave
Beck, Jr.
Mr. Kennedy. What was the rate, the interest rate, paid on that?
2116 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. LooMis. Three percent, as I remember it.
Mr. Kennedy. That was less than the interest rate paid at that
period of time ?
Mr. LooMis. I don't think anybody else could liave borroAved money
at that rate.
I will correct that and say any ordinary, normal customer.
The Chairman. How much was it below the going rate, the 3 per-
cent? How much was that below the going rate at that time?
Mr. LooMis. I would only make a guess at that, Senator, but T would
say four.
The Chairman. Four percent was the going rate?
Mr. LooMis. I would guess that. Those rates change from time to
time, and I am not too familiar with them.
The Chairman. In other words, only about 1 percent oft' ?
Mr. LooMis. I would say so, at least that.
The Chairman. All right.
Senator McNamara. ^^Hiile there is a pause, let me ask you a couple
of questions. You talked about working for Mr. Beck personally in
1951. Were you employed on a fee basis or a salary basis ?
Mr. LooMis. I would say that it was strictly a fee with him. The
amount of work that I did for him varied in amount from time to time
and I endeavored to work it out on a basis of more or less the hours
that I put in for a given month or 2 months.
Senator jNIcjS'amar.v. You were not on a salary but you were on a
commission or fee basis?
Mr. LooMis. No. With the international I was on an annual
retainer.
Senator McNamara. An annual retainer?
Mr. LooMis. Yes, sir.
Senator McNamara. How much was that?
Mr. LooMis. My first year was $5,000. At that time, everything
was in cash or governments, and no one Imew how big the job would
be or what was necessary.
The next year it was $7,500, and I had asked for $10,000 for the
third year.
(At this point, the chairman withdrew from the hearing room.)
Senator McNamar.^. You indicated that you had many other ac-
counts and you still have many other account's.
Mr. LooMis. Yes, sir.
Senator McNamara. Is it common practice for vou to be on a
retainer at $5,000 or $10,000 a year Avith these other accounts?
Mr. Loomis. All of my business is on a retainer basis with the
exception of very small investors who may come into my office and
have $1,000 or $5,000 that they want to place and the amount involved
is too small for them to pay for the ordinary investment counselor's
advice.
Senator INIcNamara. Then, your general practice is the same as
applied in the Beck account and in the teamsters international account ?
Air. LooMis. Yes, sir; that is correct.
Senator McNamara. You mentioned signing a contract with the
teanisters international. Did that spell out these terms that we are
talking about now ?
Mr. I^OMis. I don't remember the contract, but I remember there
was one made some 3 or 4 months after my work first started.
IMPROPER ACTIVITIES IN THE LABOR FIELD 211 7
I think it was made for the other side, for them to have a record of
my employment. I think it was for the benefit, probably, of Mr.
English, tile secretary-treasurer, but I am not sure. I have a copy
of that contract, I think, in my file here some place if you would
like it.
Senator McNamara. No. 1 think that is sufKcient.
You mentioned the Melvin Lanphar Co. of Detroit. Are they
primarily a home construction company ?
Mr. I^OMis. I do not believe they do any construction. Senator.
I believe they are what is known as mortgage bankers. They buy
mortgages on houes under construction by, w^e will say, a builder, for
example.
Senator MoXamaka. AVere these houses secured by land contracts
generally (
Mr. I^OMis. Not contracts, sir. They were secured by hrst mort-
gages.
Senator McNamar.\. They were veterans' homes generally, you in-
dicated.
Mr. LooMis. Yes ; they were all veterans.
Senator McNamara. And they had been paid down to a mortgage?
Mr. LooMis. They varied in the age. The older the mortgage, the
trreater equity that the owner would have in it, but in general, these
were fairly, shall I say, green mortgages.
Senator McNamar^v. They were not well-seasoned mortgages?
Mr. LooMis. No; I would say not. As a matter of fact, the oc-
casion for the opportunity which existed there was that these build-
ers had borrowed money from the Detroit banks. The bond manage-
ment had broken some month before.
The Detroit banks needed money to take care of their normal loan
demand and in order to get it, they were forced to either call loans
or to sell Government bonds.
Their Government bonds would show them substantial losses.
There were very large amounts of these warehoused, so-called ware-
housed, mortgage loans in the Detroit banks.
It was those things that they wanted to get rid of. Tliere were
no buyers because people did iiot have any money and we did. I
>A' anted to take advantage of it.
(At this point the chairman entered the hearing room.)
Senator McNamara. Then, the discount of eight points or 8 per-
cent from 100 to 92
Mr. Loo^ris. The rates had been changed from 41/2 down to 4, or
from 4 to 41/2 I ^uess it was, and the 4's were available there at 92 and
the 41/2's at T)5, based on the assumed life of those mortgages, would
give us a yield of 51/2 percent.
Senator "McNamara. Since these were not well-seasoned accounts on
the part of the purchaser, it would seem that the 8 percent or 8 points
was a reasonable discount. You did not think it was an unreasonable
discount, did you ?
Mr. Loo]\ris. The discount in my judgment would arise out of the
supply of money and the supply of mortgages in relation to the
supply of money.
Senator McNamaka. The discount would also be controlled as to
whether they wei-e well seasoned or green ?
21 IS lATPROPER ACTIVITIES TX THE LABOR FIELD
Mr. LooMis. No. I do not think I would quite agree with that.
The amount of money, for example, that a man would put down on
his house w^ould make some difference. The amount of income tiiat
he has in relation to his expenses would make some difference.
His general credit standing would make a difference. You ex-
amine these things on the basis of their individual situation.
Senator McNamaiia. These factors did not amount to much in as
much as the money was guaranteed by the Government anyway.
Mr. LooMis. From my point of view, the poorer the mortgage the
better because if the Government Mas going to take it over, and you
could buy it at a difference, you could make
Senator McNamara. Tliat is the point I was making. Were these
100 ]iercent guaranteed or 90 percent or what?
Mr. Looms. One hundred.
The Chairman. Proceed, counsel.
Mr. Kennedy. Mr. Loomis, you raised questions with Mr. Beck
again about his getting involved in the National Mortgage Co., is that
correct ?
Mr. LooMis. I did it on repeated occasions, sir.
Mr. Kennedy. Specifically on December 3, 1953, you wrote a memo-
randum to him ?
Mr. LooMis. I can't identify that date.
Mr. Kennedy. That is regarding the meeting at the Olympic Hotel.
I will have it for you here.
The Chairman. The clerk will present to the witness a photostatic
copy of what purports to be a memorandum that the witness wrote
to Mr. Beck.
See if you identify that photostatic copy, Mr. Loomis.
(The document Avas handed to the witness.)
Mr. LooMis. Yes, sir, I remember the memorandum.
The Chairman. What is the date of it ?
Mr. Loomis. It is dated December 3, 1953.
The Chairman. That may be made exhibit No. 143.
(The document referred to was marked "Exhibit No. 143" for refer-
ence and will be found in the appendix on pp. 2473-2474. )
Mr. Kennedy. I would like to read one paragraph of the letter.
This is page 2 :
This brings me to my last point and tliat refers to the ownership of the stock
in the NMC, National Mortgage Co.
For a trustee of the international to own stock in a mortgage company through
which some of the international funds are going to pass, seems to me to be a
strict violation of the fundamental principles of the fiduciary relationship
existing.
It was not just clear to me where the remaining one-third of NMC stock lay,
but I rather assume from what was said that you have taken one-third of the
stock for yourself.
Dave, if this is so, then I think it is wrong, very unwise, exceedingly poor
public relations, and something which you will regret.
The Chairman. Did you write Mr. Beck that memorandum ?
Mr. LooMis. I gave him that advice, yes, sir, repeatedly.
The Chairman. Was this memorandum delivered to him ?
Mr. LooMis. Yes, sir.
The Chairman. How had you learned that he had that interest?
Mr. LooMis. Senator, I cannot identify exactly where I picked the
information up.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2119
The Chairman. Had he denied that he had that interest when you
talked to him about it ?
Mr. LooMis. No, he never denied it. . -. . a
The Chairman. He never at any tune denied it i
Mr.LooMis. Never. , . ,, 4-
The C^HAiR^^iAN. And you, in your letter to him, the one you wrote
in longhand after your visit to Los Angeles, you called his attention
to the fact, in that letter, that his participation m such an arrange-
ment, in such a business, in your opinion, would be very unethical i
Mr. LooMis. That is correct. . , ,
The Chairtsian. That is the substance of it, but those are not your
exact words. ^ ^ , t i ^ ^ ^-^ •
Mr LooMis. I think in fairness to Mr. Beck I should say this—
well, let me repeat his position at our final blowup meeting. He said
that this belonged to his nephew and that his nephew had the rigiit
to invest liis money any place he wanted to the same as i did, or
anybody else.
Thatwas his position. , , ^
Mr. Kennedy. Mr. Chairman, I might read the last two para-
graphs here to follow the paragraph I just read.
This is you talking, again.
A possible solution to the last-mentioned objection wliich I am raising would
be for the international itself to own the stock, even though there are no legal
precedents for such a move. Another thing I want to say, Dave is that while
I have found myself differing with Don, I want you to know that I like, r(^
spect him and enjoy working with him, and I have admired very nuich the
highlv professional and thorough manner in which he has handled the Detroit
mortgages. I assure you he and I can work together and m harmony as
long as I am satisfied that my full duty to the International is being discharged.
jSIr. LooMis. Mav I emphasize that that is dated in December
195.3. I had occasion to change my mind somewhat later on.
Mr. Kennedy. About jMr. Hedlund ?
Mr. LooMis. Yes. . ■ ^i
Mr. K>.nnedy. You were also involved or took some part in the
loan to the Fruehauf Trailer Co. ?
Mr. LooMis. I did. .
Mr. Kennedy. Did you examine into tlieir potentialities tor re-
i>aving such a loan '( ^^. , ■ .
Mr.^ LooMis. Mv. Beck called me back to ^\ aslungton on some
errand, I did not know what the subject matter was, and it proved ti3
be a proposed loan of a million and a half dollars in connection with
Fruehauf. I spent an evening with Mr. Fruehauf and Mr. Landa in
the Statler Hotel, discussing their company, and tlien the following
mornino- in Mr. Beck's office, a meeting was attended by Mr. Frue-
hauf Mr Landa, and I believe Mr. Wampolcl— yes, INIr. Wampold—
and mvself, and IVIr. Beck. This matter of the loan came up for
discussion. The proposal was that the borrower, the party who
signed the note, was to be the Fruehauf Foundation, which was a
charitable trust which Mr. Fruehauf had set up. It was to borrow
the money. . t^ i p ^ i
The purpose of the loan was to get the proxies on 1^ I'ueliaut stock:
Avhicli would be purchased with this money, roughly 60,000 shares.
The occasion for that was that there was a proxy fight coming up
in the Fruehauf Trailer Co. Mr. Beck was asked and agreed to
make the loan of a million and a half dollars for the purchase of this
2120 USIPROPER ACTIVITIES IN THE LABOR FIELD
stock, wliicli Avas held, as collateral for the loan, throughout the life
of it.
Mr. Kennedy. Did you have some conferences with Mr. Fruehauf
and Mr. Beck, in the teamster headquarters?
Mr. LooMis. Yes.
Mr. Kennedy, And did you raise some questions, further ques-
tions, then, at that time?
^Ir. LooMis. Yes. The negotiations, as a matter of fact, only got
started when Mr. Beck threw up his hands and said, "We will make
the loan."
Mr. Kennedy. Is this why you were trying to find out some further
information ?
Mr. LooMis. Yes. I think the occasion at that moment was — let
me go back and state that part of the collateral for this loan was to
be the personal guaranty of Mr. Landa, Alfonse Landa, who is a
director, a large stockholder, and chairman of the finance committee
of the Fruehauf Co., and jVIr. Fruehauf himself. They were to guar-
antee the loan personally. So you had three things. You had the
assets of the Frueliauf Foundation — which I learned later and should
have known ahead of time but didn't have any time to develop the
information — you would have the assets of the Fruehauf Foundation,
which were quite negligible, you would have the personal note of the
two men, and the collateral itself, which was the stock itself, which
was the Fruehauf stock, purchased in the open market and held by
a broker in New York as collateral for the loan.
Mr. Kennedy. Did you want some further information on the
background of the individuals?
Mr. LooMis. I would certainly not have made a loan of that type
without more thoroughly investigating it.
Mr. Kennedy. Did you attempt to get that information?
Mr. Tx)OMis. Going back to Detroit on the plane that afternoon with
Mr. Fruehauf, I questioned him further, and one of the things that
I developed which I was surprised at Avas that the assets of the Frue-
hauf Foundation were less than $100,000.
Mr. Kennedy. Was there a question raised during this period of
time as to whether the International Brotherhood of Teamsters could
make such a loan, or a loan for such a purpose?
Mr. IvOOMis. I asked Mr. Beck why the loan was being made, and
he rather vaguely stated that there was a community of interest be-
tween the truck manufacturing and the trucking industry, and the
industry employing a lot of teamsters, so he wanted to liel]) them
out.
Mr. Kennedy. This was not helping them out, but this was getting
into a proxy fight.
Mr. Loojiis. It was a proxy ; yes, a proxy fight.
Mr. Kennedy. So he was interested in helping one side?
Mr. TvOOMis. I didn't understand.
Mr. Kennedy. He was interested in helping one side of the proxy
fight out; is that correct?
Mr. LooMis. That is correct.
Mr. Kennedy. Are you aware of the fact that the loan has been
repaid, and the interest was repaid on the loan, by the Fruehauf
people ?
IMPROPER ACTiXiTlKS l^ THE LABOR FIELD 2121
Mr. r.^).^ris. At the time of ni}- severiiuce from the teamsters, I
thhik the loan wa,s paid down to about $1,100,000 and wah by that
time a fii-st-chiss loan.
Mr. Kennedy. Are you aware of the fact that the loan now has
been repaid?
Mr. LooMis. I am not.
Mr. Kennedy. I think that the records show that the loan has been
repaid and the interest was repaid.
Mr. Loomis, we talked originally about having a dispute with Mr.
Beck that resulted in your leaving your association with him. "NVliat
was the reason or what was the breakup about at that time?
Mr. LooMTs. ^ye had an application come to us in Seattle from a
contracting firm, Bebb and Narodick I believe the name was, in wliich
they proposed to build an apartment house in Honolulu.
Mr. Kennedy. That is Ilebb and Narodick?
Mr. TjOOmis. Hebb and Narodick, yes. They were unknown to me.
I think I had one conference with Mr. Hebb and Mr. Beck, and I
believe Mr. Hedlund was present, although I am not sure, in the
Olympic Hotel. I called at the contractor's office on two occasions,
discussing the matter with them, and their capacity to carry out such
a commitment.
Mr. Beck went down to Florida to attend the winter meetings of the
AFL and the teamsters international. Mr. Hedlund was vacationing
in Honolulu. This loan had been in the works, so to speak, in process,
and finally came to me for final decision as to whether the loan should
be made. ^T had studied the thing a great deal, given it a lot of thought,
and had come to the conclusion that there was adequate income avail-
able from the proposed apartment based upon m in iunnn rentals, mak-
ing allowance for, T believe I figured, 7 percent vacancies, that there
was still enough income to adequately protect that loan. I asked the
attorney in Seattle to prepare a conmiitment, which he did.
In examining, however, the documents before instructing this at-
torney to proceed, I observed on one of the sheets, and this proposal
covered some 10 ])ages, I would giiess, one of the sheets showing the
component costs of the apartments showed a change in one of the
items. I recognized, I thought, Mr. Hedlund's penciled figures.
Mr. Kennedy. Do you have that paper with you ?
Mr. LooMis. Yes. This paper, this sheet — do you want me to read
it or identify it ?
Mr. Kennedy. Could he identify it, Mr. Chairman?
The Chairman. You are reading from your own file, now, are
you not?
Mr. LooMis. Yes, sir. I am reading from a page taken from the
loan pro])osal which shows the various components of the cost. The
land cost $210,000, architectural and engineering $100,000, interest
during the construction $74,000, and so on.
Mr. Kennedy. Then you get down to the financing fee.
Mr. TjOOmts. Down further is a financing fee which was in there
for $20,000. tvpewritten, which had been scratched out in pencil and
a figure of $27,500 was substituted.
The Chairman. May I present to you what pur]>orts to be a photo-
static copy of the original document you are reading from -and ask you
to identify the photostat?
(Document handed to Avitness.)
2122 IMPROPER ACTIVITIES IX THE LABOR FIELD
Mr. T^OMis. That is correct, except that it tloesu't show $27,000
very clearly there, Senator.
Mr. Kennedy. It is not very clear.
The Chairman, The figure on the photostat, according to the
original, is $27,000-what ?
Mr. LooMis. The original was $20,000 and the chani>"ed figure is
$27,500.
The GiiAiKMAX. The penciled notation on the photostat does iiot
show as plainly as it does on the original ?
Mr. LooMis. That is correct.
The Chairman. You have the original before you and that pen-
ciled notation on the photostat should be and is $27,500 where the
$20,000 is scratched out?
Mr. LooMis. That is correct.
The CiTAiR]\rAN. Thank you very much.
That photostat will be made exhibit No. 144.
(The document referred to was marked "Exhibit 144" for ref-
erence and will be found in the appendix on p. 2475. )_
Mr. Kennedy. Did you inquire why the financing fee had been
raised from $20,000?
Mr. LooMis. Yes. This meeting, Mr. Kennedy, was held in my
office. After the attorney went out to draw up this commitment,
I asked about what this meant. Remaining in my office was Mr.
Wampold and Mr. Sherman Stevens. Mr. Stevens said that that
was raised $7,500, that $2,500 was to go to Mr. Beck, $2,500 was to
go the Mr. Hedlund, and $2,500 was to cover additional expenses
for the National Mortgage Co. ; in other words, go to the mortgage
company.
Mr. Kennedy. AYliat did you say to that ?
Mr. LooMis. Well, I was so shocked that I didn't know hardly
what to say. I said "I don't want to hear anything more about
this" and I devoted myself that night to figuring out what to do
about it. I decided immediately that I would have nothing to do
further with Mr. Hedlund or Mr. Wampold. I sent the commit-
ment to Mr, Beck with a covering letter indicating that the income
was adequate and recommended that he sign it.
I telephoned him that night, or the next night, in Florida, ex-
plained to him the circumstances, advised him not to sign it, that
it was a hot loan, that I didn't want him to have anything more to
do ^vith it, and he said "I don't know anything about it."
He asked me to contact Mr, Wampold and Mr. Horowitz and
Mr, Hedlund and bring the thing out into the open.
The next morning I met in the Nortliern Life Tower, in Mr,
Horowitz's office, and the first thing I did was to call Mr. Stevens,
who then was in San Francisco, and I asked him to confirm what
he had said to me in tlie office, wliich he did. I tlien called ]Mr.
Hedlund in Honolulu.
May I read this memorandum?
Mr. Kennedy. Mr. Chairman, he has a memoranduin on the
telephone conversation with Mr. Hedlund.
Mr. LooMis. I immediately, after this telephone conversation,
dictated it to a stenographer within 5 minutes.
The Chairman, Of your conversation with Mr. Hedlund?
1I.IPR0PER ACTIVITIES IN THE LABOR FIELD 2123
Mr. LooMis. On the telephone. I was in Seattle and he was in
^Tlit'cHAiRMAN. All right, yon may proceed, if yon are reading
'X^OMi^T hav^^gmal. Innnediately in front of me is a
photographed copy. .„
The Chairman. Yon have a photostatic copy ot it i
The Chairman. You are reading from the photostatic copy?
The ctZviRMAN^%Vill you identify this photostatic copy that I have,
so that we can follow you ?
(Document handed to witness.)
Mr. LooMis. The top two pages are.
The Chairman. The top two pages?
Mr. LooMis. Yes,sir. i -i •+ at^ ^'LK
The Chairman. Those top pages may be made exhibit Mo. 145—
the top two pages. ^ , . „ ,
(The document referred to folloAvs:)
Mr. LooMis (reading).
I asked Mr. Hedlund what the amount of the financing fee was in connection
with the im)^ used Honolulu loan. He stated that it was $27 500^ My second
Question was- "Don, how was this allocated?" He said that $10,000 of it was
to £o to the teamsters union as a commitment fee and any expenses m connec-
t?ofwith car?y iig out the loan were to be charged to this $10,000 and an ac-
countTng mile to the teamsters international in accordance with instructions
of Mr Beck. The remaining $17,500 was to go to the National Mortgage Co.
to he used to cover expenses in carrying out the loan.
I then asked him if the fee was not originally $20,000 instead of $27 500 and
he said- "Yes, that is correct." But that the $20,000 was an estunate of ex-
panses and that upon further consideration he told them ( ineaning the con-
tractors) that this $20,000 was not enough and it was raised to $27,500. I asked
him if this was the whole story and he said it was and then I said to hnu that
Sherman Stephens tells me a diiferent story; that Stephens says that $2 .500 of
the $7,500 additional was to go to Don Hedlund, $2,500 to Dave Beck, and
$'> 500 was to be used for additional expenses arising out of an appraisal of the
propertv to be made before construction starts, and he tells me, Don, that you
made that allocation. Don replied immediately : "That is not correct ; Stephens
is mistaken " I said "Don, did you ever discuss this with Mr. Beck?" He said :
"No I never did " I said : "Did you ever write him a letter about it?" Answer :
"No' I never did " Then he went on to make out a case for the contention that
the $17,-500 was to go to the National Mortgage Co. for expenses regarding the
I asked Don how he accounted for the discrepancy between what he, Hed-
lund says and what Stephens says about the allocation of this fee. His answer
was that he did not know. He said : "Stephens is mistaken."
I told Don on the phone that Stephens had stated categorically to me that
these allocations were $2,500 to you, Don, $2,500 to Mr. Beck, and $2,500 to the
mortgage company for expenses. I said: "Don, Stephens says one thing and
you say another, "and Stephens tells me on the phone this morning from San
Franci.sco that these allocations are as stated above, and Stephens further tells
me that you, Don, made the allocations and that he got this information from
you." Don replied that Stephens is a liar. I said : "Don, this is an exceed-
ingly serious thing and you are bandying about the name of Dave Beck in a
manner which can be very damaging to him and I want to say to you that until
this thing is all cleared up saisfactorialy, this loan is not going to go through.
I will go further and say to you that, so far as I am concerned, there will be
no more teamster funds go to the National Mortgage Co. until this thing is
cleared up to my satisfaction."
2124 IMPROPER ACTIVITIES IN THE LABOR FIELD
I might say, Senutoi', that I had tlie say as to whether the National
Mortgage Co. would get the money.
Don replied : "Let's call the whole thing off as far as this loan is concerned."
I told him that I was not satisfied to let it rest there. Then he proposed that
he would call Stephens and talk with him about it. I .said : "All right, you
call Stephens and have Stephens call me. I would be interested in knowing
what he will say to me after he talks with you as compared to what he said
to me this morning." Then Don said : "I guess I had better fly back there" —
that this was too important a matter to try to handle from where he was and he
stated that he was coming back.
In his excitement he stated that the money might be paid into the invest-
ment company. I said: "What investment company?" I never heard of one
and then, without further explanation, he said : "I think I should come back to
Seattle."
The (Chairman. What is the significance of this^ What happened
immediately after?
Mr. LooMis. Well, 1 followed with my resignation, or a letter to
Mr. Beck which involved my resignation, unless it could be explained.
Mr. Kennedy. We have that letter, Mr. Chairman.
The Chairman. We have the letter ?
Do you have a photostatic copy of that letter '(
Mr. LooMis. Xo, sir. I have no photostatic copy, because the
original went to Mr. Beck.
The Chairman. Do you have the original carbon copy ^
Mr. LooMis. I do. I have the original carbon copy right here.
The Chairman. All right.
Mr. LooMis. I sent this letter to Mr. Beck's office and I sent a copy
to his home. Do you want me to read it. Senator ?
The Chairman. You may proceed to read it.
The photostatic copy of this letter may be made exhibit Xo. 14B
(The document referred to follow^s:)
Mr. Loomis (reading) :
Dear Dave —
The Chairman. What is the date of it ?
Mr. LooMis. February 10, 1955.
The Chairman. All right.
Mr. Loomis (reading) :
The Honolulu loan application and my recommendation that you disapprove
it have brought a chain of developments and disclosures which brings into
question my continuing as financial counsel to you as trustee.
Without going into detail, it now appears that —
1. There has been talk of your receiving a kickback out of the Honolulu
.$27,.^)CK) finance fee, the plain implication being that this was in accordance with
a pattern.
2. Obviously, any fees arising out of the placement of union funds which
reach you, should be returned to the union treasury.
3. On Saturday, February 5, I learned for the first time that you and two
others have an investment company into which various funds are channeled,
and then a portion of them are apparently reapportioned to reach you.
4. Back of all this remains the fact that your nephew is a one-third owner of
the mortgage company (according to my information) through which the bulk
of teamster funds have been placed. On several occasions I have protested this.
I think all of this puts you as trustee in an untenable position. I am sure
that your fiduciary duty has never been suflSciently impressed upon your mind.
The fiduciary position and responsibility of a trustee is extremely high, Dave,
and 1 think it would he well — in fact I recommend that you ask (Jharles Horo-
witz to explain this clearly and in detail to you.
There are several things, Dave, which I think you should do :
IMPROPER ACTIVITIES IN THE LABOR FIELD 2125
1. You should make doubly sure that you have no interest direct or indirect
in any channel through which teamster international funds flow.
2. You should terminate any arranf;ement by or throuj;h which you share
<iirectly or indire<-tly in any flnder"s fees or other fees connected with teamster
internati(mal funds.
3. I would sav that you should secure advice from Charles Horowitz, or some
other competent legal "counsel of your choice, regarding any past transactions
which might affect your fiduciary relationship emphasized above.
Now. Dave, if I am wrong in any of these assertions. 1 am sorry. However,
they come froni sources so close to you that I must accept them as facts unless
vou show otherwise.
If you follow my recommendations and clear these things up to my satisfac-
tion. ' I shall conskler continuing as investment adviser to you as teamster
international trustee. You know I have enjoyed working with you and have
enjoyed the challenge of the tough investment problems involved. If you do
not see clear to do so, please accept this as my resignation.
Sincerely yours,
The Chaioean. Did you receive a reply from Mr. Beck?
Mr. LooMis. About t^' days later 1 received a telephone call from
Mr. Hedlund askini>- for some $4(),00() witlt which to buy additional
mort^ao-es. 1 refused to oive it to liim. He asked me if I wanted
him to "tell Mi-. Beck, audi said, "I will not advise you in any way.
You can use your own discretion."
I assume he talked to Mr. Beck, because the next morning this letter
of February 16 came to me, in which he accepts my resignation.
The CiiAiRMAX. Will you identify this photostatic copy of the letter
that you received from' Mr. Beck 'dated February 16, 1955?
(Document handed to the witness.)
Mr. LooMis. That is correct, sir.
The Chairman. It may be made exhibit No. 147.
(The document referred to was marked "Exhibit No. 147" for
reference and will be found in the appendix on pp. 2476-2477.)
The Chairman. You may proceed to read the letter. _ Those
parts where he quotes from your letter, I think you can omit from
readhig, because it is already in the record and has already been
referred to.
Mr. LooMis. All right. I am skipping part of it.
I deeply regret, Fred, that in your judgment it was necessary for you to
address such a letter to me. I did not retain you, Fred, for any purpose other
than in an advisory capacity, either to me personally or later as it pertained
to my position as general president of the International Brotherhood of Team-
sters. I have discussed the subject matter vpith you and do not intend to elabo-
rate in any way. I am proceeding to negotiate the Honolulu loan, subject to
the conditions which have been agreed upon, of 100 percent union construction.
I find that in the interest of our personal friendship, our business association
should be dissolved. I am, therefore, accepting your resignation set forth in
your letter of February 10 to be effective March 1, 1955.
The Chairman. Proceed, Mr. Counsel.
Mr. Kennedy. So you had no more business dealings after this time,
is that right ?
Mr. LooMis. I did not.
Mr. Kennedy. It was during this period of time, however, when
you had a conference with Mr. Hedlund, that you learned that on
the Lanphar mortgages which we discussed some time ago, which
were purchased back in 1958, Mr. Hedlund had received an $8,000
commission, or he told you an $8,000 amount ?
2126 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. LooMis. He told me at the meeting in Mr. Beck's office, which
I called the final meeting, that he had received $8,000 in connection
with making this Detroit loan.
Mr. IvENNEDY. You don't know of any other moneys that he re-
ceived ?
Mr. LooMis. I do not.
Mr. IvENNEDY. You don't know if Mr. Beck received part of that?
Mr. LooMis. I do not.
Mr. Kennedy. Did this business deal on the Honolulu apartment
fall through ? Was it consummated ?
Mr. LooMis. I cannot say of my own knowledge. Gossip came to
me that the loan was turned down, and that Mr. Beck used as his
reason for turning the loan down an original objection which I made
to the loan ; namely, that $2 million was too much for the union to
put in one spot.
The Chairman. May I ask you a question or two here?
Mr. Beck says in his reply to you accepting your resignation that
he only employed you to advise him, the implication being that you
were not the boss of him.
Do you know of any other reason why your relationship with
Mr. Beck deteriorated other than these constant complaints you
were making about the way he was conducting his trusteeship of
the union?
Mr. LooMis. I think that refers. Senator, sir, to the blowup meet-
ing. He was extremely angry because I had stood up to him and
treated him like he was just an ordinary mortal. He might be a big
wheel, but as far as I was concerned, he was just a hubcap.
He was very angry because I attempted to tell him what he
should do and he said that nobody was going to tell him. The sec-
ond point he made in the meeting was that his conscience was going
to be his guide.
The Chairman. His conscience?
Mr. LooMis. His conscience. And my answer to that was that I am
afraid we would have chaos in this country if every person could
run around and act in concert with his own conscience.
The Chairman. I do not care about continuing this any further,
but is there any other reason why your relationship with him was
terminated other than the fact that has been revealed here by these
documents, that you were trying to keep him on the right track ?
Mr. LooMis. I don't know specifically of any others.
The Chairman. That is all.
Mr. Counsel ?
Mr. IvENNEDY. Would you say from an analysis of Mr. Beck's role
during this period of time that he was using his position with the
teamsters to increase his own financial interest, to increase himself
financially and his family ?
Mr. LooMis. I think that is quite apparent, sir.
Mr. Kennedy. And that you broke with him because you felt that
he was not meeting his trust as the president of the International
Brotherhood of Teamsters?
Mr. LooMis. Yes.
Mr. Kennedy. Do you feel that you were correct?
Mr. LooMrs. T certainly do.
The Chairman. Are there any further questions?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2127
Senator Erviii ? ^ ^ x i i. iv/r
Senator Erv^n. As I understand vou, when you protested to Mr.
Beck about his disregard for the rules of law which govern the con-
duct of fiduciaries, he told you in substance that he was gonig by
his oAvn conscience rather than by those rules ?
Mr LooMis. That is correct. Although m Chicago, Senator, i had
happened to be attending the National Convention of Security An-
alysts, I happen to be a member of the New York society, and Mr.
Beck happened to come into the same hotel while I was there.
I spent an hour and a half with him. During that conference, 1
raised this question again. For once he said, "Well, maybe I will
change it," but he never did. , • ^i
Seiiator ER\^N. It is a fact that the primary rule governing the
conduct of trustees is that they shall not use their powers as trustees
to enrich themselves at the expense of their beneficiaries ; is that not
Mr. LooMis. I think they may not only not use them, they may not
even appear to do so.
Senator Ervin. That is right. That is all.
The Chairman. Are there any other questions ?
If not, thank you very much, Mr. Loomis.
The committee will stand in recess until 10 o'clock m the monimg.
(Members of the select committee present at the taking of the recess
were Senators McClellan, Ervin, McNamara, and Curtis.)
(Wliereupon, at 3 : 45 p. m., the hearing m the above-entitled mat-
ter was recessed to reconvene on Friday, May 10, 1957, at 10 a. m.)
89330 — 57— pt. 7-
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
FRIDAY, MAY 10, 1957
United States Senate,
Select (\)mmittee on Improper Activities
IN THE LaIIOR or MANAGEMENT FlELD,
Washington, D. C.
The select coinniittee met at 10 : 15 a. m., pursuant to Senate Reso-
lution 74, agreed to January 30, 1957, in the caucus room. Senate
Office Building, Senator Jolm L. McClellan (chairman of the select
committee) presiding. o ^
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irvino- M. Ives, Republican, New York ; Senator Sam J. Ervin, Jr.,
Democrat, North Carolina; Senator Karl E. Mundt, Republican,
South Dakota ; Senator Barry Goldwater, Republican, Arizona ; Sena-
tor Carl T. Curtis, Republican, Nebraska.
Also present: Robei-t F. Kennedy, chief counsel; Jerome Adler-
man. assistant counsel: Cai'mine Bellino, accounting consultant; Ruth
Youno; Watt, chief clei-k.
The Chairman. The connnittee will be in order.
(Members of the select committee present at tlie convennig of
the session : Senators McClellan, Ives, and Curtis.)
The Chairman. Mr. Don Hedlund, come around, please.
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth, an noth-
ing but the truth, so help you God ?
Mr. Hedlund. I do, sir.
TESTIMONY OF DONALD HEDLUND
The Chairman. State your name and your place of residence and
your business or occupation, please, sir.
Mr. Hedlund. My name is Donald Hedlund. I live in Seattle,
Wash., and I am a mortgage banker.
The Chairman. Have you talked to members of the staff, Mr. Hed-
lund, with reference to your testimony ?
Mr. Hedlund. Yes, sir.
The Chairman. Have you elected to waive counsel ?
Mr. Hedlund. Yes, sir.
The Chairman. Thank you very much.
Mr. Kennedy, you may proceed.
Mr. Kennedy. Mr. Hedlund, would you tell the committee a little
of yoin- background, where you were born ?
2129
2130 IMPROPER ACTIVITIES IX THE LABOR FIELD
Mr. Hedlund. I was born in Minneapolis, Minn., and I was in the
hotel business for some 17 years and in the mortgage business for the
past 20 years.
Mr. Kennedy. When did you move to Seattle ?
Mr. Hedlung. I moved to Seattle about 1931, in the fall.
(At this point, Senator Gold water entered the hearing room.)
Mr. Kenndey. You said you have been in the mortgage business
for a number of years ?
Mr. Hedlund. About 20 years, Mr. Kennedy.
Mr. Kennedy. You have been associated during the last few years
with the National Mortgage Co. ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. When was that formed ?
Mr. Hedlund. It was foi-med the latter part of September of 1953.
Mr. Kennedy. The latter part of September of 1953 ?
Mr. Hedlund. 1953 ; yes.
Mr. Kennedy. And who were the people that formed that com-
pany?
Mr. Hedlund. Tlie people that formed the company were Sherman
Stephens, Joseph McEvoy, and myself, and some of the employees of
the organization.
Mr. Kennedy. Excuse me. You will have to speak up. I cannot
hear you very well.
Mr. Hedlund. Sherman Stephens, Joseph McEvoy, some of the
employees of the organization, and myself.
Mr. Kennedy. And how much money was put into it to form that
company, to set that company up ?
Mr. Hedlund. About $104,000.
Mr. Kennedy. Now, did Mr. McEvoy and Mr. Sherman Stephens
put up a share of that money ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. How much did each person put up ?
Mr. Hedlund. Approximately $35,000 a person. Mr. Stephens
did not put up quite that much.
Mr. Kennedy. But Mr. McEvoy put up $35,000 ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. At that time, Mr. McEvoy in 1953 was driving a
truck for Sunset Distributors Co. His income tax showed he was
making appi-oximately $5,000 or $6,000 a year. Where did he get the
$35,000?
Mr. Hedlund. He borrowed the $35,000 I understand it now, from
Mr. Beck.
Mr. Kennedy. How did you happen to ask Mr. McEvoy to come in-
to the company originally ?
Mr. Hedlund. I have known Mr. McEvoy and the McEvoy family
for (juite a while, sir. I asked Mr. McEvoy before that time to join
the organization, join my organization and I have asked him since
that time to join this organization. He is definitely not interested
and has not indicated in the past any interest.
Mr. Kennedy. I cannot hear you. You will have to speak uj).
Mr. Hedli'nd. He is not interested in the mortgage business.
Mr. Kennedy. He is not interested ?
Mr. Hedlund. In joining the organization.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2131
Mr. Kennedy. How did you convince him to come in to tliis biisi-
ness ?
Mr. Hedlund. 1 asked him to come into tlie business and he came
in as a stockholder.
Mr. Kennedy. You felt that he would have the money to put up to
come into that business ?
Mr. Hedlund. Yes, sir, I did. , , ■ j.
Mr. Kennedy. Even though he was driving a truck, the income ot
which is not very high, and you felt he would have that money ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. The question was never raised m your mind as to
w^here that money came from ?
Mr. Hedlund. No, sir.
Mr. Kennedy. You just thought of Joseph McEvoy, you liked him
and you thoudit it would be nice to have him in the company.
Mr. Hedlund. I would have liked to have had liim and I still would
like to have him in my organization ; yes, sir.
Mr. Kennedy. Did he ever take an interest in the company after
that?
Mr. Hedlund. He has taken an interest as far as director is con-
cerned and that is all, Mr. Kennedy.
Mr. Kennedy. He does not work around the company ?
Mr. Hedlund. No, sir ; he does not.
Mr. Kennedy. Were vou surprised that he could come up with
$35,000?
Mr. Hedlund. No, sir.
Mr. Kennedy. Where did you think tliat he might get $35,000 ?
Mr. Hedlund. I just didn't think where he would get the $35,000,
Mr. Kennedy.
Mr. Kennedy. When vou approached him, did you tell him he would
liave to put up $35,000 ? "
Mr. Hedlund. Yes, sir.
Mr. Kennedy. And it never occurred to you about where it might
come from ?
Mr. Hedlund. No, sir.
Mr. Kennedy\ Did you ever discuss with Mr. Dave Beck that his
wife's nephew was coming into the company ?
Mr. Hedlund, Yes, sir : I did.
Mr. Kennedy. What did he say ?
Mr. Hedlund. He said he had no^ objection to it whatsoever, Mr.
Kennery.
Mr. Kenne:>v. l^id lie feel it was a good idea for his wife's nephew
to coitie into the company?
Mr. Hedlund. Yes, he did.
Mr. Kennedy. Did you ever discuss with him that he might put up
the $35,000 for his nephew ?
Mr. Hedlund. No, sir ; I did not.
Mr. Kennedy. You never had any discussion of that kind ?
Mr. Hedlund. No, sir.
Mr. Kennedy. Did you receive a commitment from Mr. Beck that
the mortgages from the teamsters organization, from the Interna-
tional Brotherhood of Teamsters, would go through the National
Mortgage Co. ?
2132 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. JSlr. Beck had said that any mortgage loan purchases
in tlie Seattle area on a competitive basis would be through the Na-
tional Mortgage Co. as a correspondent for the international team-
sters Union.
Mr. Kennedy. Had ho said that at the time the company was being
set up ?
Mr. Hedlund. When I told him the company was being set up.
Mr. Kennedy. And he told you that the mortgages would go
througli the Xatio]ial Mortgage Co. ?
Mr." Hedlund. That is correct.
Mr. Kennedy. Why did he feel that all of the mortgages should go
through the National Mortgage Co. instead of mortgage companies
throughout the whole of the United States ?
Mr. Hedlund. Mr. Beck had confidence in me, and I had been talk-
ing to Mr. Beck as well as to the other fmids of a similar nature for a
number of years, about going into the mortgage field, with such funds.
Mr. Kennedy. He just decided that he would pick out one com-
pany, and the mortgages would go through the National Mortgage
Co., where his nephew happened to be one of the major stockholders.
Mr. Hedlund. One company as far as the Seattle area loans were
concerned.
Mr. Kennedy. Now, approximately, how much in mortgages have
gone through your company ?
Mr. Hedlund. Approximately $9 million at the present time, Mr.
Kennedy.
Mr. Ivennedy. $9 million ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. In the teamsters mortgages ?
Mr. Hedlund. That is correct, sir.
Mr. I^NNEDY. Who is the individual in the International Brother-
hood of Teamsters that makes a decision as to when a mortgage will
be purchased and through what company the mortgage will be
purchased ?
Mr. Hedlund. Mr. Beck, sir.
Mr. Kennedy. Mr. Dave Beck ?
Mr. Hedlund. That is correct.
Mr. IvENNEDY. He is the trustee for the funds, is that right?
Mr. Hedlund. Pardon me, sir. Yes, sir.
Mr. Kennedy. He is the one who makes the decisions as to from
whom the mortgages will be purchased ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Mr. Chairman, we have a dociunent here that we
would like to have made an exhibit. This came from the National
Mortgage Co. files, and indicates that Mr. Dave Beck is the one to
make the decisions for the International Brotherhood of Teamsters.
That is as to what mortgages will be purchased.
The Chairman. The clerk will present to the witness what pur-
ports to be a photostatic copy of a document which is dated the
10th day of September, 1954, and among others it is signed by Dave
Beck, general president, member of the finance committee of the
Teamsters International.
I will present that document to the witness, and Mr. Witness,
will you examine it and state if you identify it. Do you recognize
it?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2133
Mr. Hedlund, Yes, sir, I do recognize the docuinent.
The Chairman. The document may be made exhibit 148.
(The document referred to was marked "Exhibit No. 148" for refer-
ence and will be found in the appendix on p. 2478.)
The Chairman. The document may be returned to counsel.
Mr. I^NNEDY. I do not believe it is necessary to read the docu-
ment into the record, but what it does show is that Mr. Dave Beck
has been appointed and assigned by the teamsters to do the pur-
chasing of mortgages for the teamsters, is that not correct ?
Mr. IIedlund. That is correct, sir.
Mr. KENNEDY. Now, I was speaking to you about whether you had
a commitment from the teamsters, or from Mr. Dave Beck, that the
mortgages of the teamsters would be purchased through the Na-
tional Mortgage Co.
I believe you said that you had such a connnitment.
Mr. Hedlund. There was no written commitment with the ex-
ception, to my recollection, of a request or a commitment to pur-
chase about $4 million or $4i^ million in the Seattle territory.
Mr. Kennedy. Prior to the time that the National Mortgage
Co. was set up, or even established, did you not have a commitment
from Mr. Dave Beck that the mortgages would be purchased through
the National Mortgage Co. ?
Mr. Hedlund. Yes, sir, when I told him the National Mortgage
was being formed.
Mr. Kennedy. So you had that commitment even before the
National Mortgage Co. was set up.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Mr. Chairman, we have another document, dated
October 16, 1953, an application for approval as mortgagee, Octobei-
16, 1953, and on page 2 it states :
Our corporation has definite commitments from the International Teamsters
Union to investigate tlieir funds in FHA and institutional mortgages. We are
members of the Mortgage Bankers Association and use their approved servic-
ing methods.
The Chairman. The Chair presents to you wdiat purports to be a
photostatic copy of application for approval as mortgagee, that is the
title of it, signed by National Mortgage Co., Inc., by Sherman S.
Stephens, secretary-treasurer and general manager.
Please examine that document and see if you can identify it.
Mr. Hedlund. Yes, sir, that is the application for approval as an
FHA mortgagee.
The Chairman. That will be made exhibit No. 149.
(The document referred to was marked "Exhibit No. 149" for
reference and will be found in the appendix on pp. 2479-2480.)
Mr. Kennedy. "Was it also stipulated by the teamsters that they
would not only purchase the mortgages through your company, and
the National Mortgage Co., and that stipulation agreement w^as made
prior to the time the National Mortgage Co. was even formed, but that
it was also stipulated by the teamsters, by Dave Beck, that the mort-
gages would be approved, w^hatever mortgages they were going to
purchase would be approved by Mr. Don. Hedlund and Mr. Simon
Wampold.
2134 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. I do not remember the approval on the latter name,
Mr. Kennedy. I do recall that all mortgages should be approved by
myself, yes, sir.
Mr. Kennedy. The mortgages should be approved by you ?
Mr. Hedlund. For submission to Mr. Beck, yes, sir.
Mr. Kennedy. We have, Mr. Chairman, two documents, one stating
that "Mr. Don Hedlund and Mr. Fred Loomis, acting jointly, will
approve for our account the loans to be purchased and all submissions
shall be made to them," and what appears to be a later document,
although it is undated, that the mortgages are to be approved by Mr.
Don Hedlund and Mr. Simon Wampold.
The Chairman. I present to you a document which appears to be
a photostatic copy of a letter from Mr. Dave Beck to Mr. Sherman S.
Stephens, and I do not believe it is dated. But I will ask you to
examine it and see if you recognize that letter.
(A document was handed to the witness.)
Mr. Hedlund. I do recognize it, sir.
The Chairman. It may be made exhibit No. 150.
(The document referred to was marked "Exhibit No. 150" for refer-
ence and will l)e found in the appendix on p. 2481.)
The Chairman. I present to you another letter, a photostatic copy
of a letter or document which appears to be written by Dave Beck,
general president, to Mr. Sherman S. Stephens, and apparently this
document is undated.
Will you examine it and see if you identify it ?
(A document was handed to the witness.)
Mr. Hedlund. I do recognize it, Mr. Chairman. I do recognize
the letter.
The Chairman. That will be made exhibit No. 151.
(The document referred to was marked "Exhibit No. 151" for refer-
ence and will be found in the appendix on p. 2482.)
Mr. Kennedy. Now, do you know in what bank in Seattle the
teamsters keep their money?
Mr. Hedlund. I believe it is the Seattle First National Bank.
Mr. Kennedy. Did you receive a commitment in the same day the
company put an application in to be formed, a commitment from the
Seattle First National Bank for $1 million?
Mr. Hedlund. That is correct, for an interim line.
Mr. Kennedy. For an interim line ?
Mr. Hedlund. Yes, that is usual, Mr. Kennedy.
Mr. Kennedy. Did Mr. Dave Beck have any conferences with any
of the officials?
Mr. Hedlund. No, sir.
Mr. Kennedy. That was all conducted by you ?
Mr. Hedlund. No, by Mr. Stephens and by myself.
Mr. Kennedy. Was the bank informed at that time that Mr. Beck's
nephew was to be in the company ?
Mr. Hedlund. I do not know if the bank knew that or not.
Mr. Kennedy. Mr. Chairman, we have a letter here indicating that
the $1 million has been put as Mr. Hedlund has outlined by the
Seattle First National Bank and then a memorandum here taken from
the files of the Seattle First National Bank, "Subject : Dave Beck,"
which reads as follows. May I read it into the record ?
IMPROPER ACTIVITIES IX THE LABOR FIELD 2135
The Chairman. Do you have someone who can testify that these
came out of the files of the bank ?
Mr. Kennedy. Yes, sir.
The Chairman. Let us have him sworn.
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth, and noth-
ing but the truth, so help you God?
Mr. Belling. I do.
TESTIMONY OF CARMINE S. BELLING
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Could we just get this in the record ?
The Chairman. I present to you a photostatic copy of a letter and
ask you whether you identify it.
Mr. Hedlund. Yes, I do recognize this particular letter.
The Chairman. Kead the letter. It will be made exhibit No. 152.
(The document referred to follows :)
Mr. Hedlund. It is addressed to Mr. Sherman Stephens, secretary-
treasurer, National Mortgage, Inc., 411 East 72d, Seattle, Wash.
[Reading :]
Dear Mr. Stephens : AVc are pleased to advise you that our loan committee
today approved a line of credit for the National Mortgage, Inc., in the amount
of $1 million to be secured by assigned FilA and GI real estate mortgage loans
committed for by responsible investors.
We thoroughly appreciate the opportunity of doing business with your firm,
and we are looking forward with pleasure to a mutually satisfactory relationship.
Very truly yours, ^^. ^ .^ ^
Frank E. Jerome, Vice President.
The Chair.man. Thank you.
Mr. Kennedy. Would you read a paragraph of this ?
The Chairman. The document which you have in your hand, did
you secure that from the files of what organization?
Mr. Bellino. The First National Bank of Seattle.
The Chairman. You may read it.
Mr. Belling. The subject is Dave Beck [reading] :
The additional $75,000 loan recently approved for Mr. Beck is to provide
funds to enable him to care for his proportionate share of a loan held by our
main office on which he is a comaker, together with several other parties as-
sociated witli bim in the Kellerblock Corp., which is a realty holding company
which owns the rtrosvener house.
His proportion of this indebtedness amounted to approximately $35,000 and
the balance of it is to provide a portion of the capital going into the National
Mortgage Co., a new concern being organized by Mr. Don Hedlund to acquire
mortgages for the account principally of the International Teamsters pension
fund, we understand.
The Chairman. That document may be made exhibit No. 153.
(The document referred to was marked "Exhibit No. 153" for
reference and will be found in the appendix on p. 2483.)
Mr. Kennedy. So the situation that we have at this time as you
were getting the company established is that Mr. Dave Beck who was
international president of the teamsters was the trustee for their fuiids
and was the one to make the decisions as to what funds would be in-
vested in the National Mortgage Co., and the National Mortgage Co.
at that time had his nephew as one of the leading stockholders, and
that money for the nephew, that $35,000 had been put up by Mr. Dave
Beck.
2136 IMPROPER ACTIVITIES IN THE LABOR FIELD
Following that, some $9 million of mortgages had been channeled
through the National Mortgage Co. Those who were going to ap-
prove those mortgages were Mr. Don Hedlund and Mr. Simon
Wampold, ultimately, and Mr. Simon Wampold is an attorney for the
teamsters.
Could you tell me and tell the committee whether Mr. Simon
WamjDold or Mr. Dave Beck received directly or indirectly any money
from the National Mortgage Co. ?
Mr. Hedlund. May I ask one question here, Mr. Kennedy ^ I do
not believe that Mr. McEvoy is the nephew.
Mr. Kennedy. What is that?
Mr. Hedlund. Mr. McEvoy is not the nephew.
Mr. Kennedy. His wife's nephew?
Mr. Hedlund. That is correct. I just wanted to be sure that that
was correct, sir.
The Chairman. We will let the record show that he is permanently
a nephew of Mrs. Beck, whatever question may be asked, and now
we may proceed.
Mr. Kennedy. Did Mr. Dave Beck, international president of the
teamsters, or Mr. Simon Wampold, attorney for the teamsters, re-
ceive any money directly or indirectly through any deals that went
through the National Mortgage Co. ?
Mr. Hedlund. The}' received no money from tlie National Mortgage,
Inc.
Mr. Kennedy. Did they receive any moneys through any dealings
that were handled through the National Mortgage Co. ?
Mr. Hedlund. Yes, they did, sir.
Mr. Kennedy. Mr. Dave Beck, who is international president of
the teamsters, and Mr. Simon Wampold, attorney for the teamsters,
received some moneys that came out of the International Brotherhood
of Teamsters investments in the National Mortgage Co., is that right?
Mr. Hedlltnd. No moneys came out of the investments or were paid
by the International Teamsters, no, sir.
Mr. Kennedy. How did the moneys come to Mr. Dave Beck and
Mr. Simon Wampold ?
Mr. Hedlund. The money came through the brokerage which I
handled separately and independently from National Mortgage, Mr.
Kennedy.
Mr. Kennedy. Were these brokerage deals on the funds that were
invested by the International Brotherhood of Teamsters?
Mr. Hedlund. You mean on loans that the International Teamsters
purchased ?
Mr. Kennedy. Yes.
Mr. Hedlund. They Avere the result of loans that the international
purchased; yes.
Mr. Kennedy. And these were the brokerage deals of a com puny
that you formed, is that right ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. The moneys came from a company called The In-
vestment Co. ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And fi-om The Iiivestinent Co. weiit to Dave Beck
and Mr. Simon Wampold ?
Mr. Hedlund. That is correct.
IMPROPER ACTIVITIES IX THE LABOR FIELD 2137
Mr. Kexxkdy. And this was on deals that had been originated by
the International Brotherhood of Teamsters?
Mr. IIedluxd. That is correct.
Mr. Kexxedy. And the funds of the International Brotherhood of
Teamsters?
Mr. HEDLrxD. They have purchased the loans.
Mr. Kenxedy. And the brokerage was on those loans that the In-
ternational Brotherhood of Teamsters had purchased ?
Mr. IlEDLFxn. That is correct, sir.
Mr. Kexxedy. Now, does Mr. Dave Beck have a brokerage license I
Mr. Hedluxd. There is no brokerage license necessary in that field,
Mr. Kennedy.
Mr. Kexxedy. Did Mr. Dave Beck do any work for these moneys?
Mr. Hedluxd. No, sir.
Wx. Kexxedy. And yet he received them, is that correct ?
Mr, Hedluxd. Yes, sir.
Mr. Kexxedy. Would you describe the arrangements of tlie deals
that were made on which he received some moneys ?
Mr. Hedluxd. The first one was the loans purchased in Detroit from
Lanphar & Co.
Mr. Kexxedy'. "Who were the loans purchased by '.
Mr. Hedluxd. By the International Teamsters Union.
Mr. Kexxedy. Go ahead.
Mr. Hedluxd. And the fee was i)aid to me.
Mr. Kexxedy. At that time were you representing the International
Brotherhood of Teamsters yourself?
Mr. Hedll^xd. And Lanphar & Co.
Mr. Kexxedy. Was that understood {
Mr. Hedluxd. That is the usual procedure where you have a broker.
Mr. Kexxedy. Was that understood by the International Brother-
hood of Teamsters, that you were going to receive a brokerage fee
on this ?
Mr. Hedluxd. Yes, sir.
Mr. Kexxedy. "\Y1io in the International Brotherhood of Teamsters
knew ?
Mr. Hedluxd. I told Mr. Beck, sir.
Mr. Kexxedy. And you told ]\Ir. Beck who also received some of the
money ?
Mr. Hedluxd. Yes, sir.
Mr. Kexxedy. You told him that your company and his company
was going to receive the brokerage fee ?
Mr. Hedluxd. That is correct.
Mr. Kexxedy. Did anyone else in the International Brotherhood
of Teamsters know about this, other than you and Mr, Beck?
Mr. Hedlitxd. He is the only one I have ever corresponded wdth
or discussed any loan relationship with.
Mr. Kexxedy. Did Mr. Simon Wampold knoAv at that time?
Mr. Hedlixd. I do not recall whether Mr. Wampold was told or
not. at that time, Mr. Kennedy.
Mr. Kexxedy. Was he told at a later date ?
Mr. Hedluxd. Yes ; he knew at a later date.
Mr. Kexxedy. And he received some of tliese moneys, also?
Mr. Hedluxd. Yes, sir.
Mr. Kexxedy. How mucli monev did vou receive on that deal?
2138 IMPROPER ACTIVITIES IX THE LABOR FIELD
Mr. Hedlund. I tliink it was approximately $7,500.
Mr. Kennedy. Was that niouey split between you, Dave Beck and
Simon Wampold ?
Mr. Hedlund. It went into tlie investment company, and prior to
the end of the year the proceeds in the investment company were
distributed betwen the parties concerned ; yes.
The Chairman. Distributed in what proportion ?
Mr. Hedlund. One-third each, Mr. Chairman.
The Chairman. Now, let us see if 1 can get this straight. All
three of you were representing the teamsters union, is that correct?
Mr. Hedlund. That is correct ; yes, sir.
The Chairman. Mr. Beck had the final decision as to the invest-
ment of the money for the teamsters union '^
Mr, Hedlund. I believe that is correct, sir.
The Chairman. And he was making investments of trust funds,
fiduciary funds that he was responsible for, being paid a salary by
the teamsters union for performing those services as its president,
and then taking a commission out of the transactions that he made
presumably to serve the interests of the union, is that correct?
Mr. Hedlund. The funds went into the investment company; yes,
they did.
The Chairman. They got back out of there into Beck's pocket ; did
they not ?
Mr. Hedll'nd. That is correct, sir.
The Chairman. All right, proceed.
Mr. Kennedy. Now, you say it was understood by Mr. Dave Beck
that you were going to receive this commission, but tliat no one else
to your knowledge in the teamsters kneAv about it ?
Mr. Hedlund. That is correct, Mr. Kennedy.
Mr. Kennedy. I would like to have this letter placed in the record.
The Chairman. I present to you what purports to be a photo-
static copy of ;i letter written by Don Hedlund, yourself, to Mr. Dave
Beck, dated December 31, lOoo, and ask you to examine it and see
if 3^011 identify it.
(A document was handed to the witness.)
Mr. Hedlund. Yes, sir, I do, ]Mr. Chairman.
The Chairman, The letter will be made Exhibit No, loi.
Mr, Kennedy. Yes.
The Chairman. Please read the letter into the record.
( The document referred to follows : )
Mr. Hedlund. This is addressed to Mr, Dave Beck, International
Brotherhood of Teamsters, Warehousemen, Chauffeurs, and Helpers
of America, Washington.
Dear Mr. Beck : Attached is a bill for expenses with reference to the loan
purchased for the International Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, in Detroit, Mich.
There has been no charge for the commission, brokerage or time involved.
The attached bill merely represents out-of-pocket expenses.
Very truly yours.
(Signed) Don Hkdlt'M).
Mr. Kennedy. Could I have it, please ?
(The document was handed to Mr. Kennedy.)
IMPROPER ACTIVITIES IN THE LABOR FIELD 2139
Mr. Kennedy (reading).
Dear Mr. Beck : Attached is a bill for expenses in reference to the loans pur-
chased for the International Brotherhood of Teamsters, Chauffeurs, Warehouse-
men, and Helpers of America, in Detroit, Mich.
There has been no charge for commissidn, brokerage, or time involved. The
attached bill merely represents out-of-pocket expenses.
Is that letter correct ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. You did not charge for brokerage '.
Mr. Hedlund. No, sir, I did not.
]\Ir. Kennp:dy. I thought that yon said that you did.
]Mr. Hedlund. I did not charge tlie international teamsters for any
time or any brokerage, and that is the reference in that letter, Mr.
Kennedy.
Mr. Kennedy. You got a commission on this deal, Mr. Hedlund.
Mr. Hedlund. We got a commission from Lanphar &. Co.
Mr. Kennedy. You received a commission on the deal and there is
notliing in the letter that indicates you were telling anybody in the
International Brotherhood of Teamsters that you were receiving a
commission.
Mr. Hedlund. Not in that letter ; no, sir.
Mr. Kennedy. This bill, of course, would have to be paid not by
Mr. Beck, but by Mr. John English, so do you think that you should
have set forth in the letter that you were receiving a commission on
this deal from the Lanphar people.
Mr. Hedlund. I did not believe so at the time. Mr. Kennedy.
The Chairman. Wliat do you believe in retro.spect?
Mr. Hedlund. As it looks now, Mr. Chairman: yes, sir.
The Chairman. Thank you.
Mr. Kennedy. Here is the bill, Mr. Chairman, for $327.40.
The Chairman. That may be made Exhibit No. 155.
(The document referred to Avas marked "Exhibit No. 155" for refer-
ence and will be found in the appendix on \i\>. 2484-2485.)
The Chairman. You charged the expense, notwithstanding the fact
that you were making a commission out of it.
ISIr. Hedlund. I charge the expense for the work done.
The Chairman. Was it paid by the teamsters ?
Mr. Hedlund. Yes, sir; but there was more work done there, Mr.
(Chairman than the ordinary brokerage.
The Chairman. You set out the extraordinary work done ?
Mr. Hedlund. Do you wish me to read this? That is stated here,
Mr. Chairman. It says, "Stenographic services, postage, and telephone
calls to Detroit and Washington, D. C."
The Chairman. The fellow that is getting the commission is sup-
posed to pay his own expenses out of it ; is he not ?
Mr. Hedlund. This was not the total expense involved on these
total loans.
The Chairman. What was the total expense?
Mr. Hedlund. That I do not recall in detail.
The Chairman. You got $7,500 net out of it ; did you not ?
Mr. Hedlund. That is not net.
2140 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. How much did Dave Beck get out of the $7,500,
when it went into the investment company and then you kicked it
back?
Mr. Hedlunu. He got $2,500, sir.
The Chairman. He did not pay out any additional expenses ; did
he?
Mr. Hedlixd. No, sir.
The Chair.man. He got his third?
Mr. Hedluxd. That is correct.
The Chairman. Now, how much did you get out of it?
Mr. Hedlund. $2,500, sir.
The Chairman. All right, what did the other fellow get?
Mr. Hedlund. Pardon me, sir ?
The Chairman. Simon Wampold, what did he get out of it?
Mr. Hedlund. $2,500, sir.
The Chairman, You each got $2,500 and you got your extraordi-
nary expenses above that ; did you ?
Mr. Hedlund. These are expenses outside of the normal procedures.
The Chairman. That is extraordinary, is it not ?
Mr. Hedlund. Yes, if you wish to call it that.
The Chairman. All right, outside. That is outside the commission.
Mr. Hedlund. Outside the commission; yes, sir.
The Chairman. So it did not come out of the coimnission.
Mr. Hedlund. No, sir ; these expenses do not come out of the com-
mission.
The Chairman. All right. Thank you.
Mr. Kennedy. Mr. Cliairman, here we have the document showing
the photostatic copy of the checks that went to the three individuals.
The Chairman. I will present to you a photostat of the three checks,
showing $2,500 paid to each one of the three of j^ou, and ask you to
examine those photostatic copies and ask if you identify them.
(The document was handed to the witness.)
Mr. Hedlund. Yes, sir; I do identify them, Mr. Chairman.
The Chairman. That may be made exhibit 156.
(The document referred to was marked "Exhibit No. 156" for refer-
ence and will be found in the appendix on pp. 2486-2488.)
The Chairman. I present to you here a photostatic copy of the
check from Melvin Lanphar & Co., made pavable to the Investment
Co. in the amount of $7,523.34.
I will ask you to examine this document and see if you identify it.
(A document was handed to the witness.)
Mr. Hedlund. Yes, sir ; I do recognize it.
The Chairman. That is what you got out of Lanphar & Co. for com-
mission ; is it ?
Mr. Hedlund. That is correct, sir.
The Chairman. And so you had five hundred and some doUai's
there extra to pay expenses, did you not, plus the three hundred
and some odd dollars that vou billed the union for. Is that correct?
Mr. IIedlund. $7,523. the distribution was made of the $7,500.
Mr. Chairman.
The Chairman. You had $23 left ?
Mr. Hedlund. Yes, $23 left, and further distribution was made
of that later on.
The Chairman. We will not go into the $23 item.
That will be made exhibit No. 157.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2141
(The docunient referred to was marked "Exhibit No. 157" for refer-
ence and will be found in the appendix on p. 2489.)
Mr. Kennedy. We have a letter dated November 24, 1953, to Mr.
Dave Beck from Mr. Sherman Stephens, stating that these mortgages
have been purchased and then Mr. Dave Beck's signature at the bottom
approving the purchase of these moi-tgages for the International
Brotherhood of Teamsters. It is taken from the files of the National
Mortgage Co.
The Chairman. I present to you a photostatic copy of a letter dated
November 24, 1953, addressed to Mr. Dave Beck as president of the
International Brotherhood of Teamsters, signed by National Mort-
gage, Inc., by Sherman Stephens and ask you if you can identify this
and also identify Mr. Dave Beck's approval of the purchase on behalf
of the teamsters.
(A document was handed to the witness.)
(At this point. Senator Mundt entered the hearing room.)
Mr. Hedlund. I do recognize this, Mr. Chairman.
The Chairman. It may be made exhibit No. 158.
(The document referred to was marked '"Exhibit No. 158'" for refer-
ence and will be found in the appendix on pp. 2490-2491.)
The Chairman. Do you wish it read or do you wish excerpts from
it?
Mr. Kennedy. I would like to state, and maybe Mr. Hedlund would
state wdiether he agrees or not, it is a letter to Mr. Dave Beck stating
that these mortgages, Lanphar Mortgages, have been purchased and
then at the bottom it is approved by Mr. Dave Beck.
Mr. Hedlund. Not this particular letter, Mr. Kennedy.
The Chairman. What does the letter state (
Mr. Hedlund. The letter states that these loans are being purchased
from the Federal Mortgage Association, Mr. Kennedy, and this letter
has no reference to the Detroit loans.
The Chairman. We just pulled the wrong document. Let that
remain in the file and it will be used later.
Mr. Kennedy. But the fact remains, Mr. Dave Beck did approve
theses loans, the Lanphar mortgages, being purchased by the Inter-
national Brotherhood of Teamsters?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And Mr. Dave Beck approved your expenses of the
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. We have this letter, Mr. Chairman.
The Chairman. Let us put it in the record.
I present this to you.
Mr. Kennedy. Air. Bellino will have to answer that, I think.
The Chairman. We will interrogate Mr. Bellino about that docu-
ment and we will make it an exliibit.
Mr. Kennedy. Mr. IVllino, this is a bill for the $327.40, and it has
been taken from the files of the International Brotherhood of Team-
sters ?
Mr. Bellino. That is correct.
Mr. Kennedy. And there is a note at the bottom wliich says, "To
Mr. Mullenholz" and what was his position ?
Mr. Bellino. He was the comptroller of the International Brother-
hood of Teamsters here in Washington.
2142 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. And the note is dated January 5, 1954, and states :
Mr. Beck has okayed this bill and ask that you send check to Donald Hedlund.
Thank you. Marcella Guiry.
Mr. Hedlund. That is Mr. Beck's secretary.
The Chairman. That may be made exhibit No. 159.
(The document referred to was marked "Exhibit No. 159" for refer-
ence and will be found in the appendix on p. 2492.)
Mr. ICennedy. Mr. Chairman, we also have a letter here addressed
to Mr. John F. English and Mr. Dave Kaplan, members of the fi-
nance committee, International Brotherliood of Teamsters, 100 In-
diana Avenue NW., Washington, D. C, dated November 2, 1953,
from Mr. Dave Beck, in which Mr. Dave Beck sets out the fact that
his wife's nephew is a one-third partner, Mr. Joseph McEvoy, in the
outstanding stock or owns one-third of the outstanding stock of tlie
National Mortgage C^ompany of Seattle, Wash.
There is, hoAvever, no mention of the fact that the money put up
by Mr. McEvoy was originally coming from Mr. Dave Beck.
The Chairman. Where was this secured '?
Mr. Belling. From the International Brotherhood of Teamsters.
The Chairman. Let the witness identifv them and they will be
made exhibit No. 160, 160-A, and 160-B.
Mr. Bellino. The identification given by Mr. Kennedy is correct.
(The documents referred to were marked "Exhibit No. 160, 160-A
and 160-B" for reference and will be found in the appendix on
pp. 2493-2495.)
The Chairman. Were they taken from the files of the Interna-
tional Teamsters ?
Mr. Belling. Yes, sir.
Mr. Kennedy. Now, Mr. Hedlund, were there any other fees or
moneys that went to Mr. Dave Beck ?
Mr. Hedlund. Through the purchase of the loan from the
Mr. Kennedy. First, how was the investment company formed?
What were the arrangements on that ?
Mr. Hedlund. The investment company was first formed in about
1951, Mr. Kennedy.
Mr. Kennedy. "Wlien did Mr. Dave Beck come in ?
Mr. Hedlund. Pardon me?
Mr. Kennedy. When did Mr. Dave Beck come into it?
Mr. Hedlund. At that time, sir.
Mr. Kennedy. He was in in 1951 ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. Was there a re-formation of the investment com-
pany?
]Mr. Hedlund. There was a re-formation of the investment company
and I believe the dates were — and I don't have the document in front of
nif^-about September of 1953 or the fall of 1953, I would say.
Mr. Kennedy. T will hand you this document.
(A dociunent was handed to the witness.)
Mr. ITedi.und. I was incorrect in my previous date. It was 1952
on the first formation, and re-formed apparently in October of 1953.
That is in accordance with this documeiit.
Mr. Kennedy. That is dated October 29, 1953?
Mr. Hedlund. Yes, sir.
The Chairman. That letter may be made exhibit 161.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2143
(The document, referred to was marked "Exhibit No. 161" for refer-
ence, and will be found in the appendix on p. 2496.)
Mr, IvENNEDY. Now, here is the partnership agreement between Mr.
Dave Beck, Simon Wampold, and Don Iledlund.
The Chairman. I present to you, Mr. Iledhuid, what purports to be
a pliotostatic copy of the partnersliip aoreement entered into between
yourself, Mr. Dave Beck, and Mr. Wampold.
Will you examine this docmnent and state whether you identify it?
(A document Avas handed to the witness.)
Mr. Hedlund. I do recognize the document, Mr. Chairman.
The Chaikmax. Is that a photostatic copy of the contract entered
into between you ?
Mr. Hedluxd, That is correct, sir.
The Chairmax. It may be made exhibit No. 162.
(The document referred to was marked "Exhibit No. 162" for refer-
ence and will be found in the appendix on pp. 2497-2500.)
]\Ir. Kennedy. That states that your partnership is going to start
on the 1st of September, 1953.
Mr. Hedlund. That is correct.
Mr. Kennedy. But yet this document says that the old partnership
is dissolved and the new partnership is to begin, and it is dated Octo-
ber 29, 1953.
Mr. Hedlund. I think that memorandum there is a distribution of
the remaining revenues in the old partnership and it refers to a later
paragraph there.
Mr. Kennedy. But you camiot start a new^ partnership until you
close an old partnership, can you ?
Mr. Hedlund. I do not follow you.
Mr. Kennedy. You cannot start a new partnership until you close
out the old partnership.
Mr. Hedlltnd. The old partnership was closed out.
Mr. Kennedy. Well, this document shows it is closed out October 29.
The Chairman. Refer to it by exhibit number.
Mr. Kennedy. Exhibit No. 161.
Mr. Hedlund. Does that document state, Mr, Kennedy, that the
partnersliip is dissolved as of October, or does that show a distribu-
tion of the assets of the old partnership, Mr. Kennedy. I believe that
is what it is. I think that is a memorandum that shows the distribu-
tion of the assets of the old company.
Mr. Kennedy. I^t me read you the first paragra])h :
Inasmuch us the investment company, the iiartnership entered into by us on
the l.")th clay of March, iy."»2, has not been active or engaged in any business in
any way, shape, form, or manner, nor has it incurred any expenses. 1 deem it
advisable at this time, with the consent of all partners, to dissolve this par-
ticular partnershii).
That is dated October 29.
Mr. Hedlund. Then I stated that wrong in the memorandum and
it shows the distribution of the assets, I believe. I did write the
memorandum and I wrote it to keep the records clear of all trans-
actions.
Mr. Kennedy. There is no date on this and it just makes a state-
ment that this is to start on the 1st of Sej)tember. Was the reason
that YOU did that so that you could get in this $7,500 from I^anphar
Co.?'
i7— pt. 7 11
2144 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedluni). Tliat is not correct, sir, because they could have gone
into the old company just as well as this one.
Mr. Kennedy. There Avere different partners in the old company.
Mr. Hedlund. But I liad purchased the assets or rather the part-
iiei'shi}) poitions of the other partner, Mr, Kennedy. So actually, the
partners were only the thi-ee of us still in the old company.
Mr. Kennedy. Once you purchase the assets of a partnership, the
jiartnerslii]) becomes dead under the law.
Mr. Hedlind. That is Avhat I was informed, sir, and that is why it
was dissolved and tlie new one formed.
Mr. Kennedy. Is that Avliy this one Avas dated back to the 1st of
September ?
Mr. Hedlund. No.
Mr. Kennedy. There is no explanation for it, then ?
Mr. Hedlund. There is no explanation on the datino;.
Mr. Kennedy. So how much did Mr. Dave Beck put into this new
partnership ?
Mv. Hedlund. $250.
]Mr. Kennedy. How much did vou put in?
Mr. Hedlund. $250.
Mr. Kennedy. How mucli did Mr. Simon Wampold put in?
Mr. Hedlund. $250.
Mr. Kennedy. And the first money that came in to that pariner-
ship were the moneys, approximately $7,500, that came in on these
Lanphar mort^aoes ?
Mr. Hei>lund. Tliat is correct, ]Mr. Kennedy.
Mr. Kennedy. Now, what was the next deal that Mr. Dave Beck
shared in?
Mr. Hedlund. Those were on the loans that the International pur-
chased fi-om the Federal National Mortffaore Association.
Mr. Kennedy. Would you describe that to the committee?
Mr. Hedlund. Loans were purchased from the Federal National
Mortpiire Association and they were seasoned loans and had been
serviced by them for H years or lonoer. They were purchased, and I
do not recall the exact discount of FNMA at"^that time, but I believe
it was somewliere around 06.
Mr. Kennedy. And the International Brotherhood of Teamsters
purchased them ?
Mr. Hedlund. They purchased the loans from the Federal National
Mortgage Association, yes, sir.
Mr. Kennedy. AVlio made the decision on that?
Mr. Hedlund. Mr. Beck made that decision.
Mr. Kennedy. Is that the letter that we put in ?
]Mr. Hedlund. That was the letter ; yes, Mr. Kennedy.
Mr. Kennedy. And tliat Mas approval by Mr. Dave Beck for the
{jurchase of these mortgages?
Mr. Hedijtnd. That is correct.
Mr. Kennedy Did :\rr. Dave l^eck sliare in some wav in that from
the Investment (V)m])any. or tlirougli the Investment Company?
Mr. Hedlind. National Mortgage ])aid a brokerage to the Invest-
ment (^ompany on those particular loans.
Mr. Kennedy. At that time, in this transaction, were you again
rei)resenting the International Brotherhood of Teamsters?
Ml-. Hedlind. Tliat is correct, sir.
IMPROPER ACTIVITIES UST THE LABOR FIELD 2145
Mr Kennedy. So you were representing them and Mr. Simon
Wiunpold was the attorney for the teamsters, and Mr. Dave Beck
was the international president of the teamsters, and gave approval
for the loan and you all three shared in the brokerage lee^
Mr. Hedlund. That is correct.
^Ir. Kennedy. How much money did you receive on that <
Mr. Hedlund. On that purchase, I am trying to I'e^^all from mem-
ory, 1 think it was somewhere in the neighborhood ot 5^10,000 to
$12,000, Mr. Kennedy. t t i
Mr. Kennedy. This is a summary of that, 1 think.
The Chairman. The Chair presents to you another document and
asks you if you identify it.
( A document was handed to the witness. )
The Chairman. I present you two more documents, photostatic
coj^ies of documents that may help you identify the one that you now
hold in vour hand. Please examine these. ,
Mr. Hedlund. Do you wish them taken one by one, Mr. Chairman i
The CHAIE3IAN. You identify the first one, will you please.
Yir. Hedlund. I do identify' the first one.
The Chairman. What is it I
Mr Hedlund. It is a summary of transactions on the purchase of
loans from FNMA, dated September 30, 1954.
The Chairman. It may be made exhibit No. 163.
(The document referred to was marked "Exhibit No. 163" for refer-
ence and will be found in tlie appendix on p. 250.)
The Chairtman. Now, examine the other two documents you have,
and identify those, one at a time.
Mr. Hedlund. The other two documents are apparently photo-
copies of a general ledger of National Mortgage, Inc., files.
The Chairman. Do you recognize them?
Mr. Hedlund. I am not familiar with ail of these general ledger
files, but I do recognize this as a National Mortgage general tile,
Mr. Chairman.
The Chairman. You do recognize them as coining out of your
ledger?
Mv. Hedlund. I believe they do come out of our ledger. I have not
seen every ledger sheet.
The Chairman. They may be made exhibit 163A.
(The documents referred to were marked "Exhibit No. 163xV' tor
reference and will bo found m the api^endix on pp. 2502-2503.)
Mr. Kennedy. Our records show that a total of $2,148,324.89 of
FNMA mortgao-es were purchased bv the teamsters, through the Na-
tional Mortgage Co., and that a fee of half of 1 percent amounting to
$10,741.62 was paid to the investment company, and that this fee was
ultimately divided at the end of the year between you, Dave Beck,
and Mr. Simon Wampold, attorney for the teamsters, is that correct (
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And at the snme time, Mr. Dave Beck, as trustee for
the funds of the Interntitional Brotherhood of Teamsters, had ap-
])roved the purchase of these mortgages, or these loans.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy, xind in addition to that there was a fee charged by
the National Mortgage Co. in which Mr. Dave Beck's nephew, Mr.
2146 IMPROPER ACTIVITIES IN THE LABOR FIELD
Joe McEvoy, had a third interest, is that right? There was some
money that went as a service fee ?
Mr. Hedlund. National Mortgage was to sei-vice the loan, because
these loans were purchased in the Seattle area.
Mr. Kennedy. So the National Mortgage Co. received a service fee
of half of 1 percent.
Mr. Hedlund. The usual servicing fee of one-half of 1 percent, yes,
sir.
Mr. Kennedy. And Mr. Joseph McEvoy, the nephew of Mr. Beck's
wife, had a third interest in that company.
Mr. Hedlund. That is correct.
Mr. Kennedy. Now, that $10,000, as I said, was split between you,
Simon Wampold, and Dave Beck?
Mr. Hedlund. That is correct.
Mr. Kennedy. Were there any other deals or arrangements or finan-
cial arrangements from which Mr. Dave Beck benefited from the in-
vestment company ?
Mr. Hedlund. We had purchased subsequently one contract. The
loan was not held by the Teamsters International, Mr. Kennedy, and
it is still held by the investment company.
Mr. Kennedy. You purchased 35 loans, did you not?
Mr. Hedlund. No. The investment company never has purchased
any loans as such, Mr. Kennedy ; no, sir. The investment company
does hold one contract, Mr. Kennedy.
Mr. Kennedy. Could you speak a little slower for me?
Mr. Hedlund. The investment company
Mr. Kennedy. Let me start over again with you.
Did Mr. Bex?k benefit in any other way other than the two transac-
tions that we have mentioned, from the investment company?
Mr. Hedlund. No, sir.
Mr. Kennedy. No other moneys came to him from the investment
company ?
Mr. Hedlund. No, sir.
The CHAHtMAN. The Chair presents to you another document, a
photostatic copy of a document, consisting of 4 pages. At the
moment, I do not see the date on it, but I will ask you to examine it
and see if you identify it and can state what it is.
(Document handed to witness.)
(At this point, Senator Goldwater withdrew from the hearing
room.)
The Chairman. Can you identify the document ?
Mr. Hedlund. Yes, sir, I do, Mr. Chairman.
The Chairman. What is it?
Mr. Hedlund. These are the closing statements referring to a par-
ticular loan. One is the seller's statement, the other is a purchaser's
statement, audit statement, and the other is the certificate of loan dis-
bursement on the Veterans' Administration form which is sent to the
Veterans' Administration, sir.
The Chairman. That document may be made exhibit 164.
(Document referred to was marked "Exhibit No. 164," for reference
and will be found in the njipendix on pp. 2504-2508.)
Mr. Kennedy. Did any of the moneys from that loan go to the
investment company ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2147
Mr. Hedlund. A particular assio-nment was on that particular loau,
according to the notation there, and according to the closing state-
ment, went to the investment company ; yes, it did, :Mr. Kennedy.
Mr. Kennedy. Then that, in turn, went to Mr. Dave Beck, did it
Mr. Hedlund. That was included, Mr. Kennedy, in whatever the
other amount was that that concerned, sir. That was the method, of the
brokerage fee that was i)aid on the loans purchased fi-om the Federal
National Mortgage Association, Mr. Kennedy.
Mr. Kennedy. Our records show that tliere were commissions on
proceeds of 35 loans, similar to that one, closed by the National Mort-
gage, Inc., and that the investment company received on that $4,197.25,
which was again split three ways. You are not familiar with that at
all?
Mr. Hedlund. I do not recall that separate transaction, no, Mr.
Kennedy.
The Chairman. Do you deny it ?
Mr. Hedlung. It is possible.
The Chairman. It is possible it occurred ?
Mr. Hedlund. It is possible to occur; yes, sir, if the record is there.
The Chairman. I just want to find out.
Mr. Hedlund. If Mr. Kennedy has it, I will accede to it.
Mr. Kennedy. What we find as the total, I believe, for 1954, is the
total that the investment company received, was $20,425.37. Is that
correct ?
Mr. Hedlund. That is correct, Mr. Kennedy.
Mr. Kennedy. So that there has to })e another deal, other than
the tAvo that you originally mentioned, the Lanphar, which was for
$7,500 approximately, the commission on the purchase of the FNMA
mortgages, which was for $10,741.62, and this other one that I just
mentioned is the third one for a total of $4,197.25, making a total of
$20,425.37.
That is including the expenses for the year, Mr. Hedlund. The
expenses have been taken out of that. That is after the expenses.
That is the amount that was split between the three of you.
Mr. Hedlund. That would be correct, because this statement here,
which comes from the general ledger, shows twelve-thousand-nine-
hundred-and-some-odd dollars, Mr. Kennedy, and this particular doc-
ument that we have here, which is 164, is listed in the general statement
here. So this amount is listed in this $12,000, Mr. Kennedy.
(At this point. Senator Mundt witlidrew from the hearing room.)
Mr. Kennedy. "\Miat does that all mean? What do you mean?
Mr. Hedlund. The commission that was paid is listed in this par-
ticular document.
Mr. Kennedy. Are there 3 deals or 2 deals ?
Mr. Hedlund. There were 2 deals, Mr. Kenuedy.
Mr. Kennedy. And the $10,741.62 is not the total ?
Mr. Hedlund. This one shows, I believe, $12,901.93, Mr. Kennedy,
the general ledger sheet. It shows $12,901.93.
Mr. Kennedy. I belieA-e tliat was the distribution that Avas made,
Mr. Hedlund.
Mr. Hedlund. No, this amount Avas apparently disbursed by Na-
tional Mortgage to the investment company, yes sir.
Mr. Kennedy. That is correct.
2148 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedluxd. That is correct. And add this together with the
$7,553 and I think we arrive prettv close aronnd the $20,000.
Mr. Kennedy. But that is the distribution that the National Mort-
gage Co. made to the investment company.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And does not set forth the fact that there was only
one deal that encompassed the figure but there were two deals. There
was one fi'om FNMA mortgages totaling $10,741.62, and there was a
third of 35 loans closed by National Mortgage totaling $4,197.25.
Mr. Hedlund. That represents the two purchases, then, from the
Federal National.
Mr. Kennedy. There are two purchases.
Mr. Hedlund. The FNMA. Yes; on two separate commitments.
Mr. Kennedy. Right.
Mr. Hedlund. And this is a recap of the two.
Mr. Kennedy. Right. So there was the first deal from Lanphar,
and 2 separate purchases from FNMA, which makes 3 deals.
Mr. Hedlund. That is correct.
Mr. Kennedy. This thii'd deal that we are talking about, there were
also teamster funds involved ; is that right ?
Mr. Hedlund. The second purchase from the Federal National
j\f ortgage Association ; yes, sir.
Mr. Kennedy. I am talking now about the fact that there was one
from Lanphar.
Mr. Hedlund. Right.
Mr. Kennedy. And there is another for the $10,741.(52. There is a
third one that we have to make up the total of $20,000, approximately.
Mr. Hedlund. The third one represented the purchases, then, from
FNMA.
Mr. Kennedy. Was that again with teamster funds?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And Mr. Dave Beck approved the use of teamster
funds?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And Mr. Dave Beck, then, shared from the Invest-
ment Co. ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And his wife's nephew, Mr. Joseph McEvoy, shared
from whatever money went into the National Mortgage Co. ?
Mr. Hedlund. Any profits that might accrue in the National Mort-
gage, as a stockholder's ; yas, sir.
Mr. Kennedy. The total, therefore, that was split amongst the
3 of you was $20,425.27?
Mr. Hedlund. I will accept that figure as correct; yes, sir.
Mr. Kennedy. Mr. Chairman, here is the further distribution of
the proceeds of $4,308.42 amongst Mr. Simon Wampold, Mr. Dave
Beck, and Mr. Donald Hedlund.
The Chairman. The Chair presents to j'ou three photostatic copies
of checks and asks you to identify them.
(Documents handed to witness.)
Mr. Hedlund. I do identify this, Mr. Chairman.
The Chairman. ^AHiat are they ?
IMPROPER ACTIVITIES IX THE LABOR FIELD 2149
Mr. PIedlund. Thev are three checks, one made out to Dave Beck,
mother one made out to Don Hedlund and a third one made out to
?imon Wampold, sir.
The Chairman. In what amounts ?
Mr. Hedlund. $4,308.42 each, sir. .,,..,.
The Chaikman. Thank you very mucli. That is the distribution ot
funds from the Investment Co. ?
Mr. Hedlund. That is correct, sir.
The CHAIR3IAN. To the three partners ?
Mr. Hedlund. That is correct, sir.
The Chairman. Thank you very much.
Thev mav be made exhibit No. 1 6;").
(The document referred to was marked "Exhibit No. 165, tor refer-
ence and will be found in the appendix on pp. 2509-2511.)
Mr. Kennedy. Can I just summarize this with you so that we make
sure we have it? From Lanphar, the Investment Co. received $7,-
523.34 which was split $2,500 apiece to each one of you.
Mr. Hedlund. That is correct.
Mr. Kennedy. Then on the FNMA morto-ages, the Investment Co.
received $10,741.52?
Mr.PlEDLUND. I will take that figure ; yes, sir. ,
Mr. Kennedy. Then we find it is a discount. You describe it as
another FNMA purchase. But we find it as a discount differential
on 35 loan transactions that were handled by National Mortgage, Inc.
The total for that that was split in the Investment Co. was $4,197.25,
the transaction we just mentioned.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Then there is another unexplained credit ot 5t>93b
which we have no explanation for.
Mr. Hfj)lund. I do not recall that one, Mr. Kennedy.
Mr. Kennedy. Then the expenses during this period of time were
$2 972 94 '^
Mr. Hedlund. If you have it there, I will accept it. It is taken from
our records, sir. ^.i o
Mr. Kennedy. That makes a total that was split amongst the 6
of vou of $20,425.27. .^, .^ ^^ ^^
Mr. Hedlund. I have not added it, but I will accept it, Mr. Ken-
Mr. Kennedy. That was split amongst you, Simon Wampold, and
Dave Beck. ^
Mr Hedia'nd. Yes, sir, from the Investment Co.
Mr. Kennedy. I would like to ask you about whether you had any
other business transactions with Mr. Dave Beck.
Mr. Hedlund. Yes, sir ; I have.
Mr. Kennedy. Specifically in May of 1950, did you have a business
transaction that involved Mi-. Dave Beck?
Mr. Hedlund. That would be the purchase, then, of contracts. ^
Mr. Kennedy. These are purcliases of contracts that were origi-
nally" purchased for $71,407.03?
Mr. Hedlund. I believe tliat is the correct amount.
Mr. Kennedy. And those contracts were ultimately sold to a Mrs.
Ray Leheney ; is that correct ?
Mr. Hedlund. That is correct, sir.
2150 IMPROPER ACTIVITIES IN THE LABOR FIELD
JNIr. Kexnedy. Mrs. Ray Leheney was the widow of Mr. Ray Le-
heney whom we have discussed here before ?
Mr. Hedlund. That is correct, sir.
Mr. Kenj^edy. And Mr. Ray Leheney, as I miderstand it, was a
great and dear friend of Mr. Dave Beck ?
Mr. Hedlund. That is my understanding, also.
The Chairmax. Is she the lady, when her husband died, they raised
some $80,000 for her, through assessment or voluntaiy contribution
of the union members ?
Mr. Hedlund. That is correct, Mr. Chairman.
The Chairman. That is the lady we are talking about, sir?
Mr. Hedlund. That is correct.
Mr. Kennedy. I think the record shows that Mr. Ray Leheney was
such a close friend of ]Mr. Dave Beck, and trusted him, and they were
such dear friends, that Mr. Dave Beck was made trustee for Mrs. Rav
Leheney.
Mr. Hedlund. That I cannot ansAver, Mr. Kennedy.
Mr. Kennedy. I tliink the record shows that, that Mv. Dave Beck
was made trustee of these funds, Mr. Chairman, for Mrs. Ray Le-
Leheney.
The Chairman. All right. Proceed.
Mr. Kennedy. The records of tlie National Mortgage Co. indicate
that on May 29, 1956, the teamsters purchased mortgaije contracts at
a cost of $71,407.03. Is that correct ?
Mr. Hedlund. No; they did not purchase them, Mr. Kennedy.
Mr. Kennedy. They did not purchase them ?
Mr. Hedlund. No, sir. Merely a loan was made.
Mr. Ivennedy. Would you agree with me that the records of the
National Mortgage Co. would seem to indicate that they had pur-
chased them ?
Mr. Hedlund. No ; they did not purchase them.
Mr. I^nnedy. Would you agree with me that looking over the
records of the National Mortgage Co., it would appear that they had
purchased them ?
Mr. Hedlund. To a person not familiar with the business; yes, sir.
:Mr. Kennedy. Was the International Brotherhood of Teamsters
informed that they had not purchased them ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Who was informed ?
Mr. Hedlund. Mr. Beck was informed.
Mr. Kennedy. So Mr. Beck knew that they hadn't purcliased them.
Who had purchased them ?
Mr. Hedlund. ^Yho had purchased the contracts?
Mr. Kennedy. If the International Brotherhood had not purchased
them, who had purchased them ?
Mr. Hedlund. Mr. Beck and I purchased the contracts, sir.
Mr. Ivennedy. You as individuals purchased them ?
Mr. Hedlund. Yes, we purchased tlie contracts.
Mr. ICennedy. So, you, Mr. Dave Beck, and Mr. Hedlund, told the
teamsters that the teamsters had not purchased them, but that Mr.
Don Hedlund and Mr. Dave Beck as individuals purchased tliem?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Who put up tlie money to purchase them ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2151
Mr. Hedllni). I had a commitment to borrow it from the Seattle
b'lrst Natiomil Bank.
:Mr. Kennedy. Who put up the money tor it ^ n ^ +^
Mr Hedlund. I asked Mr. Beck, and he said "We would like to
nake'the loan from the teamsters" and the loan was made from the
teamsters. ,
Mr Ivennedy. So tlie teamsters put up the money i
Mr. Hedlund. They loaned the money on the contracts; yes, sir.
Mr' Kennedy. To whom did they loan the money ? , ,_ ^
Mr Hfdeund. They loaned the money to the National Mortgage,
and assignment of the contracts was made to the teamsters as col-
lateral or as security. •^') rr.^^
Mr. Kennedy. The money had been loaned to whom, again ^ ihe
National Mortgage Co. ? ^ , 4-- „o
Mr. Hedlun^. To the National Mortgage Co., who were acting as
an agent for ourselves, sir. <: ^i j: 4. 4.1.^
M^- Kennedy. And Mr. Dave Beck was aware of the tact— the
problem for us is, just again reviewing tlie documents and the letters,
it would ai)i3ear, at least, to the teamsters that they had purchased
these mortgages, but now you say all they did was loan the money
to the National Mortgage Co. ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Actually, was that money then loaned from the
National Mortgage Co. to you and ISIr. Dave Beck?
Mr. Hedlund. I don't .i o nn ^
Mr. Kennedy. AVhat happened to that money then? That money
was used, was it, to buy ^ .. ^
Mr. Hedlund. That money was used to pay the contracts, to pay
for the contracts. . -, ^, r^ o
The Chairman. Was that the National Mortgage Co. <
Mr. Hedlund. National Mortgage, Inc.
The Chahoian. That is a corporation, is it not?
Mr. Hedlund. That is correct, sir.
The Chairman. The teamsters loaned the money to that corpora-
tion to buy these mortgages, to buy these contracts ?
Mr. Hedlund. That is correct, sir. n . • ^i
The Chairman. The contracts, however, were not bought in the
jiame of the company that borrowed the money, is that riglit?
Mr. Hedlund. That is correct, sir. ••,•••, ^
The Chairman. They were bought in the name of two individuals,
including your own? , . , <• >.t i.- i
Mr. Hedlund. No, sii-. They were bought in the name of National
Mortgage for the purpose of assignment.
The Chairman. They were?
Mr. Hedlund. Yes, sir. r- .i ^t ^- i
The Chairman. They were bought in the name ot the JNational
^Mortgage ?
Mr. Hedlund. That is correct. .
Tlie Chairman. Proceed. I did not quite understand it.
Mr. Kennedy. Now let us go on. The loans were kept, these pur-
chases were kept, for approximately 6 or 7 months, is that right, until
the end of December or the beginning of January of the following
year?
2152 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. About January of the following year; yes, Mr.
Kennedy.
Mr. Kennedy. About January 2 of the following year ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. During this period of time, had Mr. Don Hedlund
and Mr. Dave Beck, as individuals, put up any money?
Mr. Hedlund. No, sir.
Mr. Kennedy. During this 6 or 7 months, some $10,000, some $10,-
269.83, had been paid off on these loans ; is that right ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. So by the end of December of 1956, these mortgages,
these loans, were worth approximately $61,137.21 ?
Mr. Hedlund. That was the amount of money borrowed against the
contracts, Mr. Kennedy. The face value of the contracts would be
somewhat beyond that, sir.
Mr. Kennedy. The face value of the contracts was $71,607.32.
Mr. Hedlund. At that time, sir?
Mr. Kennedy. Yes.
Is that correct?
Mr. Hedlund. That would be about correct; yes, sir.
Mr. Kennedy. These mortgages, as we pointed out originally, were
ultimately sold; is that right?
Mr. Hedlund. Contracts. I am sorry.
Mr. Kennedy. The contracts were sold ?
Mr. Hedlund. Yes, sir; they were.
Mr. Kennedy. And the contracts were sold to tlie Ray Leheney
Memorial Fund ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And the person who would make a decision on that
would be Mr. Dave Beck ?
Mr. Hedlund. That is correct, sir.
The Chairman. In other words, Mr. Beck was selling his personal
property that he had gotten in this maneuver, selling it to a memorial
fund of which he was trustee, trustee for the benefit of the widow of
his dearest friend; is that right?
Mr. Hedlung. That is correct.
The Chairman. Thank you.
Mr. Kennedy. Mr. Chairman, we have here a letter dated November
16, 1956, to Mi-s. Ray Leheney from Mr. Dave Beck. May I read that
into the record?
The Chairman. We will have to identify it.
Mr. Kennedy. Mr. Bel lino, will you identify this ?
Mr. Belling. Yes. This is a letter which was sent to us by Mrs.
Leheney.
The Chairman. Mrs. Leheney sent you the letter in connection with
this investigation ?
Mr. Bellino. Yes, sir.
The Chairman. The letter may be read into the record.
Mr. Kennedy. It is on the stationeiy of the International Brother-
hood of Teamsters, Chauffeurs, Wareliousemen and Helpere of Amer-
ica, dated November 16, 1956. It reads as follows:
Dear Terry : I am addressing this letter to you as it pertains to our conversa-
tion relative to the investment of approximately $76,000 which is held in trust
in the Raymond Leheney Memorial Fund for vou.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2153
Since returning nortli and in liarmony with my promise to you, I have in-
vestigated the best procedure for investments as it relates thereto. I have kept
in mind that the money is not drawing interest at the moment, but I have
weighed this against tying it up so that it would not be availaV)le for investuieut
on the long pull which is the most important consideration. I have sincerely
determined, subject to your approval, to invest the money in first mortgages to
yield apjiroxiuiatelv 6.8 percent, which in dollars to you would be approxi-
mately $42.5 per month earned income. There would be set up a trust account
through the National Mortgage. Inc., for you for the purpose of reinvestment of the
principal whenever the amount was sufficient for that purpose or when a good
investment was available. There would be a remittance to you once every 3
months or we could make it more often if you needed it. If you do not, how-
ever then from a bookkeeping standpoint it is better on a 3 months basis.
I could go into this in considerable detail, but I assure you, Terry, that this
investment procedure is of the best. I have every confidence in Mr. Don Hed-
lund of the National Mortgage, Inc., who is handling this with me. He is also
associated with our international union in an advisory capacity in the handling
of our international funds.
The contracts that we intend to purchase are first mortgage investments and
would not be available until January 1. We would make the investment as
of January 1 and vou would start receiving your interest return from that date
forward. I have committed my self to the purchase of the contracts, but, if you
in any sense object, I can cancel the deal. I do recommend it, however, to you
as in my judgment I l)elieve you will get a very fine return on your investment
with the maximum of safety.
Dorothy and I enjoved a great deal being with you and I only trust and hope
that vou "can find an opportunity some time during the next few months to
come to Seattle with the baby and visit with us. I should be delighted to send
you a ticket if you can do so.
With warmest best personal wishes to you and my deepest regards to your
father, I am
Sincerely, ^
Dave.
The Chairman. That is ca handwritten letter?
Mr. Kennedy. No, the "Dave" was handwritten.
So those mortgages were ultimately sold to the Ray Leheney Mem-
orial Fund ?
Mr. Hedlund. That is correct.
Mr. Kennedy. And Mr. Dave Beck, Mr. Hedlund, Mr. Dave Beck
writes "I have committed myself to the purchase of the contracts,
but, if you in any sense object, I can cancel the deal."
Wliat he is saying is that he has committed himself and you to the
purchase of the contracts, is that right ?
Mr. Hedlund. Yes, he has said that. But I would have liked to
have retained the contracts.
Mr. Kennedy. But he has committed himself, Dave Beck, trustee
for Mrs. Leheney, the wife of his best friend, committed himself to
Mr. Dave Beck and Mr. Don Hedlund to purchase these contracts %
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And this money had all been put up by Mr. Dave
Beck, president of the International Brotherhood of Teamsters?
Mr. Hedlund. As a loan on the contracts, yes, sir.
Mr. Kennedy. These loans that he approved, he had examined as
Mr. Dave Beck, trustee for Mi^. Leheney. He purchased those, Mr.
Hedlund, he purchased those for Mrs. Leheney for $71,607.32. He
sold those to Dave Beck.
No, Dave Beck, as an individual, Dave Beck and Don Hedlund, as
individuals, sold to Dave Beck as trustee for $71,607.32, for Mrs.
Leheney, the wife of Dave Beck's best friend, and on that deal. Mr.
Dave Beck and Mr. Don Hedlund, as individuals, made $11,585.04;
is that correct ?
2154 IMPROPER ACTIVITIES EST THE LABOR FIELD
]\Ir. Hedlund. That is correct, sir.
Mr. Kennedy. And in the meantime, the teamsters, the Interna-
tional Brotherhood of Teamsters, were informed, or Mr. Dave Beck,
as international president of the Brotherhood of Teamsters was told,
that these mortgages had been disposed of, and they were given a
check for $61,000.
Mr. Hedlund. The unpaid principal balance of the note.
]\Ir. Kennedy. $61,137.21.
Mr. Hedlund. That is correct. Could I comment on tliose con-
tracts, Mr. Kennedy ?
The Chairman. I beg youi* pardon ?
Mr. Hedlund. May I comment just a minute on those contracts?
The Chairman. Yes, after you answer this question : Did it ever
occur to you to tell Mrs. Ijeheney, did it every occiu* to you or Mr.
Beck to tell Mrs. Leheney, what was involved in tliis transaction ?
Mr. Hedlund. I did not, sir. I have never met Mrs. Leheney, to my
knowledge.
The Chairman. Did you know Mr. Beck was witholding this in-
formation from her ?
Mr. Hedlund. From Mi-s. Leheney ?
The Chairman. Yes.
Mr. Hedlund. No, sir, I would not.
The Chairman. Would you have gone through with the transaction
had you known it?
Mr. Hedlund. That he was withholding information ?
The Chairman. Sure, that he was selling her his own goods and
making a profit, or selling them for you, to himself as trustee for the
memorial fund set up for her. Would you consider that etliical?
Mr. Hedlund. I cannot answer that question for him, sir.
The Chairman. You cannot?
Mr. Hedlund. No, sir.
The Chairman. Do you mean you do not have a judgment or an
opinion as to whether that is ethical conduct or not ?
Mr. Hedlund. If all the facts are not revealed it is not ethical ; that
is correct, Mr. Chairman.
The Chairman. If what?
Mr. Hedlund. If all the facts are not revealed, it is not ethical,
but I revealed all the facts, sir.
The Chairiman. I am talking about his part in it. You say you
revealed all the facts. You revealed it to Dave Beck. You knew
he was trustee of that fund, did you not ?
Mr. Hedlund. Yes, sir.
The Chair^ian. You knew you were selling, you and Dave Beck
as partners and owners of these contracts were selling, them to him
as trustee of a fund. You knew that, did you not ?
Mr. Hedlund. Yes, sir.
The Chairman. 'Was it not a part of your duty and obligation to
know the fiduciary of the one he was trustee for should have full in-
formation about it, that you were nuiking a profit of it and that he
Avas making a profit out of it?
Mr. Hedlund. That is correct, sir.
The Chairman. You think that should have been divulged?
Mr. Hedlund. That is correct, sir.
The Chairman. Thank you.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2155
Mv. IIedluxd. May I make a comment now, Mr. Cliairinan?
The Chairman. Yes.
Mr. IIedlund. These contracts were purchased for the purpose of
an investment basis. They were not purchased in order to sell the
contracts. They were picked up at a discount, as usual contracts are.
Mr. Beck did ask and had asked if there was a]iy real estate invest-
ments that could go irito this particular fund. I told him about these
contracts, biit said as far as I was concerned, 1 would not be willing
to sell the contracts except at par, on those particular contracts.
The Chairman. I understand that is good business, to make a profit.
There is no question in that.
Mr. Hedlund. The return was good on these particular contracts, of
approximately 6.8 percent.
Thank you.
The Chairman. But like you, I agree, I question the ethics of sell-
ing to myself as trustee without divulging that information and the
profit I am making out of it to the one for whom I am trustee. I ques-
tion the ])ropriety of that. Do you ?
Mr. Hedlund. I do, sir.
The Chairman. Thank you.
Mr. Kennedy. During this whole period of time, again going back,
no money had been put up by Mr. Don Hedlund and Mr. Dave Beck ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. The money for this transaction had been put up
by Mr. Dave Beck, trustee of the International Brotherhood of Team-
sters ?
Mr. Hedlund. That is correct. But I could have borrowed it from
the Seattle First National. There was a commitment from the bank.
]\Ir. Kennedy. "W^iat actually happened was that the money came
from the International Brotherhood of Teamsters and was put up by
Mr. Dave Beck as trustee for him.
]\fr. Hedlund. That is correct, sir,
Mr. Kennedy. During this period of time, the teamsters, at least
the auditing division of the International Brotherhood of Teamsters,
though they had purchased these loans, did they not?
Mr. Hedlund. No, sir. It was simply a loan on these ])articular
loans as far as we are concerned.
Mr. Kennedy. Let me show you a letter dated August 22, 1956.
The Chairman. I present you here what purports to be a photo-
static copy of a letter dated August 22, 1056, to a Mr. Henry Ronie,
National Mortgage, Inc., from IVilliam T. Mullenholz, Comptroller.
See if you identify that.
(Document handed to witness. )
Mr. Hedlund. I have not seen tliis letter before, but it is the usual
type of letter, so I will identify it, Mr. Chairman.
The Chairman. Let it be made exhibit 166. It may be read. If
there is any question about the authenticity of it, I will place another
witness on the stand to verify it.
Mr. Hedlund. I have no question, Mr. Chairman.
Tlie Chairman. Thank you.
(The document referred to follows.)
Mr. Kennedy. This is dated August 26, 1956, some ?> months after
the money had been put up by the International Brotherhood of
2156 IMPROPER ACTIVITIES IN THE LABOR FIELD
Teamsters, and is addressed to Mr. Heiirj Koine, Xational Mortiraee,
Inc., 224 Dexter Ave., Seattle, Wash.
Deak Henry: On May 28, 1956, the International purchased 42 real estate
contracts from B. & V. Development Co. through your firm in the amount of
$71,407.03.
Unlike past experience, with respect to the B-1 and the B-2, we have not
received a detailed list of the number, name, and amount of each contract.
Would you please favor us with this information?
Cordially yours,
William T. Mullenholz, Comptroller.
The Chaikmax. May I ask yon, at this point, does that refer to the
same contracts that were sold to the Leheney Foundation I
Mr. Hedlund. That apparently refers to the same contracts, but
tliey were not purchased, Mr. Chainnan,
The Chairjniaiv. There is a little contlict here.
Mr. Hedluxd. They were not purcliased, sir.
Mr. IvENNEDY. At least at that time, a representative of the team-
sters, other than Mr. Dave Beck, thought they had been purchased,
did he not?
Mr. Hedlund. He calls them purchase, but they are on a temporary
line, Mr. Kennedy.
Mr. Kexxedy. This is Mr. Mullenholz, who has responsibilities
over there, and at least he thought they were purcliasing them.
Mr. Hedlund. That is not correct, sir.
Mr. Kennedy. They were not purchasing them ?
Mr. Hedlund. No, sir: tliey were not.
Mr. Kennedy. Who was purchasing them I
Mr. Hedlund. Mr. Beck and myself were purchasing the contracts,
but they were held for ns in the name of National Mortgage on an
escrow basis, Mr. Kennedy. But the contracts Avere not "purchased,
no sir, by the International.
Mr. IvENNEDY. If they weren't purcliased by the International, ih^n
they were purchased by National Mortgage Co. ?
Mr. Hedlund. They were purchased in the name of National Mort-
gage Co., sir.
Mr. Kennedy. Did you have some contract with the National Mort-
gage Co., indicating that they were purchasing these ?
Mr. Hedlund, That is correct, sir.
Mr. I^NN-EDY. Did Mr. Dave Beck and ^Mr. Donald Hedlund siirn
a contract with them ?
Mr. Hedlund. No, sir; we did not.
Mr. Kennedy. Do you think that should liave been done, if tliis
was a genuine ti-ansaction ?
Mr. Hedlund. We carried that on a memorandum from Mr. Koine,
the Comptroller, to myself, ^Mr. Kennedy. It is i)i letter form.
The (^iiairman. Do you linve a copy of tliat memorandum?
Mr. Hedlund. T do not liave it here, sir. I liave no records with me,
Mr. Chairman.
Mr. Kennedy. Let me ask you tliis: On these otiier transactions
tliat we mentioned earlier, where Mr. Dave Beck received a percentage
of the commission from the Investment Co., do you think that that
was a proper, etliical way to handle business ?
Mr. Hedlund. I did ; yes, sir.
Mr. Kennedy. Do vou now ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2157
Mr Hedlund. In view of circumstances, I will answer "No, sir."
Mr. Kexxedy. You do not think so any more i
Mr Hedlund. That is correct, sir. . .i ^ i
Mr Kennedy. And vou think that this transaction that we have
just been discussing was an ethical way to handle business^
Mr. Hedlund. I do on this one, sir.
Mr. Ivennedy. You do tliink that 'i i • ^ ^-
Mr. Hedlund. I do on this one, because it was a good investment
for this particuhir fund. I will be very glad to buy the contracts
back again and hold them. ^ ,^ t i ;
Mr. Kennedy. And give $11,000 back to Mrs. Leheney ?
Mr. Hedlund. I will be very glad to buy the contracts back again
''^Mr. Kennedy! Would you be willing to restore the money to Mrs.
Leheney that came tlirough this transaction so that she would get the
full value of them ? i ,,,...,
Mr. Hedlund. The full value of the contracts ; I will be very happy
^^M^-.^'liENNEDY. Will you be willing to restore some $11,000 to the
teamsters or to Mrs. Leheney "i
Mr Hedlund. There was no $11,000, sir.
Mr! IvENNEDY. There was approximately $11,000 profit to you and
Mr. Dave Beck.
Mr. Hedlund. I bought tiie contracts at a discount.
Mr. Kennedy. Is it usual ^ iv/r .
Mr Hedlund. I would not sell the contracts at a discount, Mi.
Kennedy. I would sell them at par value. I sold them at par value.
I will be glad to buy them back at par value, sir, the same price for
which I sold them, less the amounts already paid oil that she has
received. She is receiving a 6.8 return. Those contracts also are pur-
chased with recourse. If a contract is not paid by the purchaser of
the home, the contract will be repurchased from this particular fund,
Mr. Kennedy. Were these all recorded ?
Mr. Hedlund. These are all recorded contracts, I believe, sir.
Mr. Kennedy. In whose names '? . -, . . -n o tt t ^i • i
Mr. Hedlund. They were recorded initially m the B. & V., I think
it is. Development Co. • • n i fi.„,.
Mr. Kennedy. Wlio were they recorded m originally when they
were purchased by the teamsters ^ . t, o v rwalm^
Mr! Hedlund. The original recording was m the B. & V. Develop-
"^ Mr. Kennedy. When they were sold, who were they recorded by ?
Mr. Hedlund. National Mortgage, Inc. i -, tt n v.
Mr. Kennedy. Did Mr. Dave Beck's and Mr. Donald Hedlund s
names enter into it?
Mr. Hedlund. No, sir. They acted as agents for us.
Mr Kennedy. The teamsters put up the money ?
Mr Hedlund. The teamsters loaned the money on the contrsuts,
not the face amount but the discounted amount, sir.
Mr Kennedy. So that I understand completely, Mr. Dave Heck
as International Vice President of the teamsters put up the money
originally as trustee of the moneys; he put the money up for tUe pur-
chase, or for these loans to be purchased?
2158 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. They loaned tlie money to National Mortgage whc
held the^contracts in National Mortgage's name for us.
Mr. Kennedy. And this transaction was for Mr. Dave Beck and
jNir. Donald Hedlund as individuals.
Mr. Hedlund. That is correct.
Mr. Kennedy. And these were ultimately sold some 7 months later
to Mr. Dave Beck as trustee for Mrs. Leheney for approximatelv
$10,600 or $11,000 profit ; is that correct ?
Mr. Hedlund. If that is the way that fund reads, that is correct,
sir, yes.
Mr. Kennedy. And that profit went to Mr. Dave Beck as an in-
dividual and to Mr. Donald Hedlund as an individual?
Mr. Hedlund. Pardon ?
Mr. Kennedy. The profit from that transaction went to Mr. Dave
Beck as an individual and Mr. Donald Hedlund as an individual?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Let me ask you this : Did you have any other busi-
ness transactions with Mr. Dave Beck?
Mr. Hedlund. Yes, I have, sir.
Mr. Kennedy. Describe those to us.
Mr. Hedlund. Mr. Beck and I have bought various pieces of land
together, sir.
Mr. Kennedy. You are interested in a company called the Linton
Construction Co. ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. You are the majority stockholder in that company?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Did you have some business transactions with them
as Dave Beck, individual, and Donald Hedlund, individual ?
Mr. Hedlund. Let me qualify that majority stockholder. That was
only done as a convenience to the company and not intended to remain
as majority stockholder, Mr. Kennedy.
Pardon me on the question.
Mr. Kennedy. Did you have some transactions, business transac-
tions, with the Linton Construction Co. as Mr. Dave Beck, individual
and Mr. Donald Hedlund, individual ?
Mr. Hedlund. Yes, sir, we did.
Mr. Kennedy. You purchased some property, did you not, for
some $28,700.42 ? ^ i jj j , i
Mr. Hedlund. That is correct.
Mr. Kennedy. This land had originally been found by Mr. Linton,
of the Linton Construction Co. ? ^ ,
Mr. Hedlund. That is correct.
Mr. Kennedy. He put some money down as a downpayment on it?
Mr. Hedlund. He acted, in the terminology, as a bird dog ; yes, sir.
Mr. Kennedy. So he put some money down and then you came
along and you purchased it for $28,000; you and Mr. Beck purchased
it for $28,700.42 ? ^
Mr. Hedlund. That is correct. He received his downpayment
back, sir.
Mr. Kennedy. And he received his downpayment back.
That was in May, I believe, of 1954 ?
Mr. Hedlund. I will accept the date, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2159
Mr. Kennedy. Then in November of 1054, did you sell that same
property tliat you had purchased for $28,700.12; did you sell that same
piece of property to the Linton Construction Co. for $15,000 '(
Mr. Hedlund. If that is the figure there, that is correct, sir.
Mr. Kennedy. So that was a profit to 3^ou and to Mr. Dave Beck
of approximately $17,000 ?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And you split that with Mr. Dave Beck?
Mr. Hedlund. lie had a one-half undivided interest in the land as
shown on the recording in Snohomish County, State of Washington;
yes, sir.
Mr. Kennedy. That was a rather lucrative deal for Mr, Dave Beck,
was it not
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. In 6 months, to make eight or nine thousand dollars
for himself?
Mr. Hedlund. That is correct.
Mr. Kennedy. And you made the decision in Linton Construction
Co. as chief stockholder in Linton Construction Co., in contrast to
Donald Hedlund, individual, you made a decision to purchase this
property from Donald Hedlund, individual, and Mr. Dave Beck,
individual?
Mr. Hedlund. Linton Construction Co. was anxious to have land,
and w^e were willing to buy land and give them the first refusal to
purchase the land.
Mr. Kennedy. They were anxious to get it. They put the money
up originally. They could have gotten it then.
Mr. Hedlund. They did not have money, as the average builder does
not have, to put up for the whole land.
^Ir. Kennedy. Did the teamsters have anything to do with that
land?
Mr. Hedlund. The teamsters had no money in the purchase of the
land ; no, sir.
Mr. Kennedys Did they have anything to do with the project,
ultimately ?
Mr. Hedlund. Yes. They took the loans from the Linton Construc-
tion Co., Mr. Kennedy.
Mr. Kennedy. Of approximately $992,892 ?
Mr. Hedlund. I would assume that that is correct ; yes, sir.
Mr. Kennedy. Did Mr. Dave Beck, trustee for the International
Brotherhood of Teamsters, make a decision to put in $992,892 of team-
ster funds in this project?
Mr. Hedlund. He made the decision to purchase the loans guar-
anteed by the Veterans' Administration on the completed houses;
yes, sir.
Mr. Kennedy. As of February 28, 1957, some $4-26,700 was due on
the above construction to the teamsters, Mr. Chaii-man.
The Chairman. Do you mean it is in default ?
Mr. Hedlund. No; it is not in default. It was interim financing,
Mr. Chairman.
Mr. Kennedy. Would yon say that that was correct, some $426,000?
Mr. Hedlund. I will accept the figure ; yes, Mr. Kennedy.
89330— 57— pt. 7 12
2160 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy, Some of these have folded, have they not? Some of
these have gone bad?
Mr. Hedlund. Not to my knowledge.
I would like to see the record, if that is the case. It is possible
that there have been a foreclosure.
Mr. Kennedy. Has there not been some difficulty in some of the
construction, that they are not going as quickly as you expected ?
Mr. Hedlund. The sales are not going as quickly. That is true,
generally, in the entire district, that the sales are not going as quickly
as possible.
Mr. Kennedy. That bears on the teamster money ; does it not ?
Mr. Hedlund. There will be no loss to the teamsters on that at all,
sir.
Mr. Kennedy. You mean what they will have to do is to take over
the property'?
Mr. Hedlund. I do not believe so, because the sales are going bet-
ter now.
(Document handed to witness.)
Mr. Kennedy. What does it mean by "two Lintons folded" there?
Mr. Hedlund. She apparently means in this memorandum that the
two houses were sold and they were not completed, the sales were not
completed. The purchaser could not qualify in the final loan, and,
therefore, it is credited back. This is simply a report on the con-
struction loans, on money that has been advanced.
Mr. Kennedy. At least some of them are not going as well as they
might go ; is that right ?
Mr. Hedlund. The sale on any particular house — the earnest money
is taken, Mr. Kennedy, which does not necessarily designate a sale.
The borrower must qualify for the loan. In the meantime, it is, in
one sense of the word, considered a sale until the qualifications of the
borrower have been approved, and until the home loan guaranty of
the Veterans' Administration has guaranteed the loan as far as the
veteran is concerned.
Mr. Kennedy. This is teamster money that is involved ?
Mr. Hedlund. The interim financing as well as the final is in-
volved.
Mr. Kennedy. "WHiere is this piece of property located? In
Seattle?
Mr. Hedlund. No. It is located in Snohomish County, which is
the adjacent county to King County. King County is Seattle.
Mr. Kennedy. Whereabouts is it located?
Mr. Hedlund. It is north. It is between Everett and Seattle, to
identif}^ it.
Mr. Kennedy. What are the street addresses of it ?
Mr. Hedlund. I cannot answer that, sir. It is in Snohomish Coun-
ty. It would be about 185th Southwest, I believe, sir, but that would
be a Snohomish County address, not King Comity or not Seattle.
Mr. Kennedy. Were there any other pieces of property that you
and Mr. Beck purchased?
Mr. Hedlund. We have purchased, all told, five parcels of property,
sir.
Mr. Kennedy. And when you purchased 1 of the 5, in addition to
the 1 that we mentioned, was that also purchased through the Linton
Construction Co. ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2161
Mr. Hedlund. They were all five purchased through the Linton
Construction Co. .
Mr. Kennedy. Did Mr. Dave Beck share m the prohts on all ot
those?
Mr. Hedlund. They have not all been sold. _
Mr. Kennedy. Those in the sales to the Linton Construction Co. ?
Mr. Hedlund. Two have been sold, and the other three are being
still held, sir. . • i ^ n
Mr. Kjinnedy. Out of the 5, you still hold 3 of them ; is that right i
Mr. Hedlund. That is correct.
Mr. Kennedy. And the second one, did you sell it to the Linton
Construction Co. ?
Mr. Hedlund. That is correct.
Mr. I^NNEDY. And was this another arrangement where Mr. Lin-
ton, of the Linton Construction Co., had seen some property that he
thought might be worth purchasing and made a downpayment on it ?
Mr. Hedlund. That is correct, sir.
Mr. Kjinnedy. And you people, you, Don Hedlund and Dave
Beck, as individuals, stepped in and purchased that property for
$13,785.02?
Mr. Hedlund. That is correct, sir.
Mr. Ivennedy. And then some 6 months later you sold, Dave Beck
and Don Hedlund sold, this property to the Linton Construction Co.
for $20,000?
Mr. Hedlund. That is correct. That would be the hrst piece,
wouldn't it, Mr. Kennedy ?
Mr. Kennedy. Excuse me ?
Mr. Hedlund. That would be the first piece ?
Mr. Kennedy. That would be the first piece. When was that,
approximately, during what period of time ? , ^ , , ^
Mr. Hedlund. I believe that would be 1954. I wouldnt be too
sure of the date. . ., ^ x 4--
Mr. Kennedy. So Mr. Beck received a profit on that transaction
of approximately $3,500 ?
Mr. Hedlund. That is correct, sir.
Mr Kennedy. There was just, I believe, 2 months between the
purchase of the property and then the sale to the Linton Construc-
tion Co. ? The records show there were only 2 months.
Mr. Hedlund. If the record show that, that is correct, Mr. Ken-
Mr. Kennedy. And you, as chief stockholder in the Linton Con-
struction Co., made the decision to purchase this property and give
this profit to Mr. Beck ; is that right ? , • ^ ., ^
Mr Hedlund. That is correct. But I would like to clarity that
chief stockholder word, if I may, Mr. Kennedy. Linton Construc-
tion Co. desired land in Anacortes hi order to build m Anacortes,
Wash. Linton Construction Co. asked to find an investor wlio woufd
buy the land and sell it back to them. I said I couldn't find one that
fast, but I would be verv happy to do it. In order to bolster the
statement of the Linton Construction Co., I purchased $lo,000 worth
of additional stock myself, with the verbal agreement with the Lin-
ton Construction Co., when it was in a position to do so, it would buy
that stock back again, and the stock ownership would tlien be equal
again between the persons involved, Mr. Kennedy.
2162 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Keknedy. Do you recognize, Mr. Hedlund, that this would
be a very good way for you to repay any favors to Mr. Dave Beck
in this matter of buying and selling this land for such a tremendous
profit over such a short period of time, that any favors that the
International Brotherhood of Teamsters might give to you, the Na-
tional Mortgage Co., through the Investment Co., through any other
companies, that this might be a method of repaying those favors to
Mr. DaveBe<.J
Mr. Hedlund. That thought never occurred to me, and we can also
lose on the other land that we have purchased.
Mr. Kennedy. Did not the teamsters, on the second piece of prop-
erty, put some money up on that, also ?
Mr, Hedlund. Not for the purchase of the land, no, sir. Again,
it was for purchasing the GI loans.
Mr. Kennedy. How much money have they invested in that?
Mr. Hedlund. I do not have the figures with me, Mr. Kennedy. I
believe you have them.
Mr. Kennedy. But that decision about putting the money into that
land was also made by Mr. Dave Beck, trustee?
Mr. Hedlund. Not in the land, sir.
Mr. Kennedy. No. In the construction.
Mr. Hedlund. And in the ultimate GI loan, that is correct, sir. But
not in the land.
Mr. Kennedy. You say that never occurred to you, that this would
be a method whereby you could make a payoff to Mr. Dave Beck ?
Mr. Hedlund. There was no necessity, as far as Don Hedlund is
concerned.
Mr. Kennedy. You recognize, however, that you have received
certain favors from Mr. Dave Beck as international president of the
teamsters ?
Mr. Hedlund. And I believe that that is based on my competency
as a mortgage man, sir.
Mr. Kennedy. As he said in his letter yesterday to Mr. Fred
Loomis, he felt like he should reward his friends or put any business
of the teamsters through his friends. He felt that was better than
putting It through an absolute stranger. You have been a friend of
his, so you have received certain benefits from your friendship with
Mr. Dave Beck, is that correct ?
Mr. Hedlund. We also receive those benefits from our friends, and
that is correct ; yes. sir.
Mr. Kennedy. And if you wanted to repay those favors, not only
could you repay them by giving him a percentage of the investment
company, not only Mr. Dave Beck but Mr. Simon Wampold, the
attorney for the teamsters, but you could also repay him by buying
back the land at the tremendous profit.
Mr. Hedlund. Mr. Beck is not the only person that I have gone into
land mvestments or other investments with, of similar character, Mr.
Kennedy. I was very happy to do it at that particular time. But
there was no intention of paying back any favors. It was enjoying
a business relationship which, as far as I am concerned, has been, at
tliat point, a good one, because I have not been connected with the
union nor any transaction
Mr. Kennedy. You recognize that the land being purchased for
$28,000 and then sold within 6 months for $45,000, and in another
IMPROPER ACTIVITIES IN TPIE LABOR FIELD 21G3
transaction the land was purchased for $13,000 and sold within 2
months for $20,000, is quite a considerable profit to Mr. Dave Beck ?
J'.Ir. Hedlitxd. As far as I am concerned, "Sir. Kennedy, I am not at
all interested in purchasing nuj land between Seattle and Everett on
a speculative basis unless there "^is a possible return of 2 to 1, sir. If I
pay $500 an acre for the land, I would not sell that land for less than
$1,000 or $1,500 per acre.
Mv. Kf^NNEDY. The pei-son who purchased the lan.d, then, was Mr.
Donald lledlund of the Linton Construction Co.
Mr. IIedluxd. No; Don lledlund as an individual with Mr. Dave
Beck as an individual, sir.
JNIr. Kennedy. But they purchased the land orio:inally and then
sold it to Mr. Don Hedlund of the Linton Construction Co. for this
tremendous profit.
^Ir. Hedlund. It was sold to the Linton Construction Co., sir.
I^Ir. Kennedy. Throutih the chief stockholder, Mr. Donald Hed-
lund.
Mr. Hedlund. A stockholder as a convenience to the company, sir.
Mr. Kennedy. I don't care if it was a convenience to the company.
The fact is that you were the chief stockholder, the one making the
decision.
Mr. Hedlund. That is correct. I have said that before, sir.
The Chairman. The committee will stand in recess imtil 2 o'clock.
(AVliereupon, at 12 noon, the committee recessed, to reconvene at
2 p. m., the same day. )
(Members present at the takmg of the recess: Senators ^IcClellan
and Curtis.)
AFrERNOON SESSION
The Chairman, The connnittee will l>e in order.
(Membei-s of the select committee present at the convening of the
session: Senatoi-s McClellan and Curtis.)
The Chairman. Mr. Hedlund, will you take the stand, please?
TESTIMONY OF DONALD HEDLUND— Resumed
The Chairman. Will you proceed, ^Er. Counsel.
Mr. Kennedy. Mr. Hedhmd, were there any other companies that
Mr. Beck had an interest in or any of his family had an interest in
with whom you were connec^ted ?
Mr. Hedlund. Insurance Brokers, Inc.
Mr. Kennedy. What was Insurance Brokei-s, Inc. ?
Mr. Hedlund. It is to write insurance.
Mr. Kennedy. Excuse me?
Mr. Hedlund. To write fire and casualty and life insurance.
Mr. Kennedy. When was Insurance Brokers, Inc., formed?
Mr. Hedlund. That was formed the latter part of September of
1958.
Mr. Kennedy. IVlio are the stockholders in that?
Mr. Hedlund. Stockliolders in that are Sherman Stephens, Joseph
McEvoy, and Mr. McHugh, and myself, sir.
The Chairman. That is four of you ?
Mr. Hedlund. Yes, sir ; that is correct.
Mr. Kennedy. Wliat percentage of the stock do you own, each one
of you ?
2164 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. May I make one correction there ? Mr. Causey is also
a stockholder.
Mr. Kennedy. So that there are five stockholders ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. What percentage of the stock do each one of you
own?
Mr. Hedlund. There is some division there and I do not recall it.
Mr. McEvoy, I believe, has 22i^^ percent.
Mr. Kennedy. Mr. Donald Hedlund 221/^ percent and IMr. Sherman
Stephens 221/^ percent.
Mr. Hedlund. That is right, sir.
Mr. Kennedy. Mr. Joseph McEvoy, 221/2 percent.
Mr. Hedlund. That is right.
Mr. Kennedy. Mr. McHugh, 221^ percent and Mr. Causey, 10 per-
cent.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. And the total amount that you have invested or .was
invested in that company was $500.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. $112.50 by Hedlund, and the same for Stephens, and
the same for McEvoy, and the same for McHigh, and $50 for Mr.
Causey.
Mr. Hedlund. That is correct.
Mr. Kennedy. Now, what is the total amount of business that that
company has done, from 1955 through 1956 ?
Mr. Hedlund. I cannot answer the question as to the total amount.
Mr. Kenn;:dy. Has that company done any business with the
teamsters ?
Mr, Hedlund. Yes ; it has, sir.
Mr. Kennedy. What business has it done with the teamsters?
Mr. Hedlund. I believe it has tlie policies to automobiles of the
eastern conference, sir.
The Chaieman, Let me ask again. I am not sure that I get the
amount. How much was the total investment in it?
Mr. Hedlund. Total investment in the company is $500.
The Chairman. $500?
Mr. Hedlund. Yes, sir.
The Chairman. That was its assets ?
Mr. Hedlund. That is correct, sir.
The Chairman. Proceed.
Mr. Kennedy. You say that you have the insurance on the auto-
mobiles of the Eastern Conference of Teamsters ?
Mr. Hedlund. I believe that is correct.
Mr. Kennedy. How was that arranged?
Mr. Hedlund. Tliat was arranged through ]Mr. Beck.
'Mr. Kennedy. Well, what conversations did you have with him
about that ?
Mr. Hedlund. Conversations, I believe, went on between Mr. Beck
and Mr. McHugh, who was operating the insurance company, Mr.
Kennedy.
Mr. Kennedy. Did you discuss it with Mr. Beck ?
Mr. Hedlund. Only to tlie extent that if it were possible we would
like to have whatever insurance there might be on a competitive basis.
Mr. Kennedy. Could you tell the committee why the Eastern Con-
ference of Teamsters, the cars belonging to the Eastern Conference of
IMPROPER ACTIVITIES IN THE LABOR FIELD 2165
Teamsters, which is here on the east coast, wouhl go to an insurance
company in Seattle to put their insurance ?
Mr. Hedlund. I cannot answer that question.
Mr. Bjennedy. Which was a company which had only $500 ?
Mr. Hedlund. I cannot answer that question.
Mr. Kennedy. Does it seem a little peculiar to you ?
Mr. Hedlund. No, sir.
The Chairman. You mean a $500 company, all of the assets it had,
and the teamsters union, and a branch of it over on the east coast
would go from the east coast to the west coast to place its insurance
M'ith a $500 insurance company ? You say there is nothing unusual
about that?
Mr. EfeDLUND. No, sir, Mr. Chairman. I believe I have enough coii-
fidence in myself that I could start an insurance company, that is
writing insurance, fire, casualty insurance, and of that nature, with
$500, and make a success out of that company and have the assets gi'ow.
Actually, there is no need of money except to pay immediate sal-
aries or rent in that type of business. It is an agency business and
not the underwriting.
The Chairman. I see. There was not any influence used to get
this business transferred out there ?
Mr. Hedlund. No, sir.
The Chairman. It just so happened?
Mr. Hedlund. That is correct, sir.
Tlie Chairman. Of course, it so happened through the direction
of Mr. Beck. You know that; do you not?
Mr. Hedlund. That is connect.
Mr. Kennedy. And Mr. Beck's wife's nephew is one of the stock-
holders?
Mr. Hedlund. That is correct, Mr. McEvoy is.
Mr, Kennedy. Now, the records show that from October 1, 1955,
through September 30, 1956, that the total receipts for that insurance
company were $265,285.56. From that total of $265,000 it is broken
down from the National Mortgage Co., $73,909.93. From the Linton
Construction Co., $3,289.70. From the teamsters, $25,735.39. From
Bell & Valdez, $22,758.85.
From others, $139,591.69. Do those figures sound correct to you?
Mr. Hedlund. I Avould not know. That sounds, however, Mr. Ken-
nedy, like they are. Those are premium dollars and not the com-
mission dollars.
Mr. Kennedy. That is the premium.
Mr. Hedlund. They sound like the premium dollars wiiich is due
to a great degree, to the insurance companies who underwrote the
risks.
Mr. Kennedy. From the teamsters, you received from having the
insurance on the automobiles belonging to the Eastern Conference of
Teamsters, some $25,735.93.
Mr. Hedlund. The commission on that would be about 20 percent,
and that sounds like the premium dollars, Mr. Kennedy, and the
commission on that would be about 15 to 20 percent, and I would not
be sure of the exact figure.
Those figures sound like the premium dollars. That is not the
commission dollars.
2166 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, IvENNEDT. Did you say you did not have any discussions with
Mr, Dave Beck about this yourself ?
Mr. Hedlund. About what?
Mr. Kennedy. About putting the insurance on the automobiles of
the Eastern Conference of Teamsters.
Mr. PIedlund, Oh, no. I said, "Yes," I had discussions with him
but not to details.
Mr, Kennedy. But you did have conferences with him about that?
Mr. Hedlund. Not conferences, no ; I asked him if there was any
possible business.
Mr. Kennedy. Now, we have here a letter dated July 26. 1054, Mr.
Chairman.
The Chairman, The Chair presents to you a letter, a photostatic
copy of what purports to be a letter from you to Mr, Thomas Flynn,
of July 26, 1954.
Mr, Flynn is chairman of the Eastern Conference International
Brotherhood of Teamsters, Would you examine that and see whether
you can identify it as a copy of the letter you wrote at that time.
Mr. Hedlund. I do recognize the letter, Mr. Chairman,
The Chairman, It may be made exhibit 167,
(The document refei-red to was marked "Exhibit No, 167" for refer-
ence and will be found in the appendix on p, 2512,)
The Chairman, Are there any quotes from the letter?
Mr, Kennedy, Yes, sir, it is addressed to Mr, Thomas Flynn, chair-
man of the Eastern Conference of Teamsters. It is signed Mr. Don
Hedlund and reads:
Dear Mr. Flynx : In accordance with the instructions from Dave Beck, we
have written in the name of the Eastern Conference, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of America, comhined auto-
mobile policy on the Pontiac automobiles upon which you are taking delivery.
Then it gives the details of it. It is not necessary to read the rest
of the letter.
The Chairman. All right.
Mr. Kennedy. Now, Mr. Hedlund, we had some testimony yester-
day regarding a deal in Honolulu that the teamsters were at least
temporarily interested in. Did you have any part in that?
Mr. Hedlund, Yes, sir, I did,
Mr, Kennedy. Now, the testimony was that there was a $7,500 item
that was supposed to go as a kickback to you and to Mr. Dave Beek
if the deal had gone through.
Could you tell the committee anything about that?
Mr, Hedlund. I know nothing about that.
Mr, Kennedy, You know nothing about that?
Mr, Hedlund, No, sir,
Mr, Kennedy. Why was the $7,500 extra written into this finance
fee? I^t us go back. Had the finance fee originally been $20,000?
Mr, Hedlund, No, sir.
Mr, Kennedy. It had not?
Mr. Hedlund, No, sir.
Mr. Kennedy. What had the finance fee originally been?
Mr. Hedlund. The finance fee had not been settled upon. The con-
tractor who also would be the owners or the sponsor of the apartment
house to be erected over there, had presented an estimated cost break-
down which included the financing fee.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2167
AVe accepted the cost breakdown for preliminary figures. I said
we would not undertake to secure a commitment and do the appraisal
and all of the necessary work for that type of fee, and I thought it
should be at least equal to those permitted by the FHA on the pro-
gram or those permitted on the 207 program, which is II/2 percent on
the face amount of the loan.
After considerable discussions, it was finally compromised at a
fee of $27,500. The cost breakdown was changed accordingly.
Mr. Kennedy. Now, the financing fee, to go back to my original
question, was it not originally stated to be $20,000?
Mr. Hedlund. That was a stated estimate of the contractors that
they presented to us but a figure w^e had not discussed or agreed upon,
Ml'. Kennedy.
Mr. Kennedy. It was increased to $27,500?
Mr. Hedlund. It was made $27,500 when we took the applications
for the loan.
Mr. Kennedy. But you agreed initially it had been stipulated as
being $20,000.
Mr. Hedlund. We had not stipulated ourselves that it would be
$20,000.
Mr. Kennedy. Somebody had stijnilated.
Mr. HedlI'ND. No, sir.
Mr. Kennedy. Was the figure $20,000 ever discussed?
Mr. Hedlund. The figure of $20,000 was given in the cost break-
down, Mr, Kennedy, that was made by the s]Donsors or the contractors
before the loan was ever submitted to us. We had nothing to do with
the figures in tlie cost lireakdown originally.
Mr. Kennedy. Did you change this as it was written here in the
finance fee ? Did you change it or have anything to do with changing
it or erasing or scratching through the $20,000 and putting $27,500?
Mr. Hedlitnd. I do not recall on that, but the only fee I agreed
upon to take the application was $27,500.
Mr. Kennedy. Now, Mr. Loomis testified yesterday that he had
some conversations witli ]\Ir. Sherman Stephens, your partner, that
this $7,500 was to be split with Mr. Dave Beck. Is that correct?
jSIr. Hedlund. That is not correct to my knowledge.
Mr. Kennedy. He did not discuss it with you ?
Mr. Hedlund. He did not discuss it with me.
Mr. Kennedy. He never did ?
Mr. Hedlund. No, sir.
Mr. Kennedy. He never mentioned about Dave Beck receiving any
money ?
Mr. Hedlund. No, sir.
Mr. Kennedy. Would you have tliought it was wrong for Mr. Dave
Beck to have received any of tliis?
Mr. Hedlund. I would have.
Mr. Kennedy. You would have thought it was wrong?
Mr. Hedlund. Absolutely.
Mr. Kennedy. Why did you not think it was wrong when he re-
ceived part of the money through the Investment Co., for instance,
in the l^anplLar mortgages?
Mr. Hedlund. We were on a brokerage basis on that and this was
a direct loan, that was being made.
2168 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Why could he not also have received a commission
on this ?
Mr. Hedluxd. We would not have ])aid Mr.- Beck any commission
on this or any other official.
Mr. Kennedy. The commission was paid to Mr. Dave Beck in the
Lanphar mortgages.
Mr. IIediand. That is correct,
Mr. Kennicdv. And commission was paid in 2 or 3 other matters.
Mr. Hedlund. The conmiission was paid to the Investment Co.
and he had an interest in the Investment Co., that is correct.
INIr. Kennedy. Did he ever do any work in the Investriient Co.
himself ?
Mr. Hedlund. No, sir.
Mr. Kennedy. And yet lie got a commission ?
Mr, Hedlund. Pie got part of the profits of the Investment Co.,
yes.
(At this point, Senator Mnndt entered the room.)
Mr. Kennedy. You never discussed this with Mr. Sherman Ste-
phens about this Dave Beck matter, receiving part of the $7,500?
Mr. Hedlund. No.
Mr. Kennedy. You never did ?
Mr. Hedlund, No, sir.
Mr. Kennedy. Has this question not been raised to you before ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. And you never bothered to ask ?
^Ir. Hedlund. I asked Mr. Stephens and he said, "No."
Mr. Kennedy. He said he never heard of it ?
Mr. Hedlund. No distribution.
Mr, Kennedy. That is what he told you ?
Mr, Hedlund. That is correct and I have never even entered into
the conversation,
(At this point, Senator Ervin entered the room.)
Mr. Ivennedy. Let me just go back and summarize what we have
found then, today, Mr. Hedlund,
You say it was true that the teamsters president, Dave Beck, and
his family, profited at least four ways from the some $9 million of
teamsters funds that were invested in the National ^lortgage Co, ?
Mr. Hedlltnd. No, sir.
Mr, Kennedy. Let us see. Did Mr, Beck or his family profit
through the National Mortgage Co., through Joe McEvoy, his wife's
nephew ? That is No. 1.
Mr. Hedlund. If there is any increase net worth in the National
Mortgage Co., Mr. McEvoy is a stockholder.
Mr. Kennedy. And he profits ?
Mr. Hedlund. He is entitled to the fair value of it and he has not
reecived any dividend.
Mr. Kennedy. No dividends have been paid so far?
Mr. Hedlund. No directors fees or any fees of any kind.
Mr. Kennedy. But the net worth of the National Mortgage Co.
has increased since it was formed, has it not ?
Mr. Hedlund. The net worth has increased and I hope it continues
to do so.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2169
Mr Kexnedy. So No. 1 would be true, that the National Mortgage
::;o., through that Dave Beck or his family, profited from the $9 million
:hat has been invested, is that right ?
Mr. Hedlund. The stock ownership of Mr. Mc_h.voy
Mr. Kennedy. eTust answer the question. Is it not true that tne
hiterest that Mr. Joe McEvoy has in the National Mortgage Co., Dave
Beck and his family have profited from the $9 million of teamsters
funds that have been invested ?
Mr. Hedlund. The stock ownership
Mr. Kennedy. Couldyou just answer the question.
Mr. Hedlund. The servicing is on more than $9 million so tar as
the total portfolio of National Mortgage Co. is concjirned.
Mr. Kennedy. I am talking about the teamsters funds.
Mr. Hedlund. So it is onlv part, as one correspondent.
Mr Kennedy. Now, has Mr. Joe McEvoy profited from that?
Mr Hedlund. To the extent that the net assets of the National
Mortgage Co. might increase, Mr. McEvoy's stock as well as my
stock'or anybody else's is worth more.
Mr Kennedy. Do you know how much it has increased {
Mr. Hedlund. The net worth of the National Mortgage Co. after
3 yeai-s of operation is about $146,000.
Mr. Kennedy. How much was put in it?
Mr. Hedlund. $104,000.
Mr. Kennedy. It has increased.
Mr. Hedlund. It has increased ; yes.
Mr Kennedy. Now, to go back, in at least one instance leamster
President Dave Beck and his family, or his family, have profited from
the $9 million of teamster funds that have been invested m the Na-
tional Mortgage Co.
Mr. Hedlund. To the extent
Mr. Kennedy. Just answer the question. If you want to say, JNo,
they haven't," or "Yes, they have,'' you can say that. You can give
your explanation, also. i i • ^ i •
Mr. Hedeund. It is only a part. That would make his stock in-
crease. . 1 1 -, ^Q
Mr. Kennedy. But it has increased, has it not? ,, , • . o d.n
Mr Hedlund. The value of the stock has increased. But it the it)9
million were only on the books, Mr. Kennedy, the value of National
Mortgage Co. would not have increased to this extent.
Mr? Kennedy. No, but it has increased.
Mr. Hedlund. It has increased over the total picture.
Mr Kennedy. That is all I wanted to know. Thank you.
Now, hasn't Mr. Dave Beck or his family, Mr. Dave Beck specifi-
cally. No. 2, profited financially from the investment company?
]\ir. Hedlund. Yes, sir.
Mr. Kennedy. That would be No. 2.
Mr. Hedlund. Yes, sir. , . . .i u
Mr. Kennedy. Those are the funds or moneys that went tlirough
the National Mortgage Co. and then were channeled through the in-
vestment company, so that would be a second way that they have
profited. , ^ , , •
Mr. Hedlund. Yes, profited through the investment company.
2170 EViPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. So we agree on two of them
finnZ'r/L?f'A*V^"^l' ^^';T^' ""i ^^'^ property which was subsequently
Be^Wo t^lT^fV "'^'J^'^"?' *^^ ''^^?.^^ the property from you and Dave
Beck to the Linton Construction Co., and that property Was ultimatelv
Mr. Hedlund. Not the property, Mr. Kennedy.
Mr. Kennedy. The construction work done on the property.
Mr. Hedlund. That is correct, sir f i j
<^2fom)^,lT\\ "^f ^^^ ""Tf^' ^^]^ ^^^'^^^ ^^^ ^^^' hand, and the
^20,000 on the other hand, could not have been paid to you unless the
"on'?''' '''"''^''' '^'' ^"' ^^"^^ ^'^^^^y "P ^^ fi^^^^^^ this con
correct ^^^^^^^' ^^^^^^ ^°™^ investor purchased the loan, that is
di^^'/fn^^'T^' 'a''^'^ just happened to be the teamsters, and they
did it through the ^ ational Mortgage Co. ^
Mr. Hedlund. That is correct.
.3J' ^\,^^^^^^X- There would be a third way that Mr. Dave Beck
and/or his family profited through the $9 million that have gmie
three",to^M^:^^^ ^^- ^^^ ^^^^^ '^^-^ -^^ - - tlJ
me^ts ^^''''^''''' ^ '^'''^^^ ^^'^^ h^ has received the profit on the invest-
Mr. Kennedy. Then, through the sale to the widow, Mrs. Ray Le-
nut7;w%f ^y^- ^r' Beck's best friends, and the money orig^Llly
Mr. Hedlund. That is right.
T^^^' «^TrT ^^^ ^^* ^"^'^ T''¥ '^y the teamsters president, Dave
Beck, and his family have profited in at least four ways from the $9
Mortgage Co r ^" '"""''''^ ^^ '^' ''''^''''' througfi the Sat^nal
Mr. Hedlund. Mr. Kennedy,
n^^ll'^'''''^''J' .T«" have gone through 1, 2, 3, and 4 and you agree
m T?Z ^^^^^^^l^ally and now do you agree' on the 4 as a total t^
Ml. Hedlund. It is only a partial thing, and it takes $8 million to
t^rd^gLTnThT^^^^^^^^^ ''''"^'-^'^ ''-- -"^^^ ^-- b'- - p-fi^
l.^"' ^f ^:™'f- I am not saying to what degree, and 1 did not sav
^ZstZnts'? "'^"- ^ "" '"'' ''-""S *^y '^•"'' P™"'^'' ftomS
Mr. Hedlund. They have ; yes
Mr H^n™" tI\'^''^'' ^"^ ^^^^ ^ ^""y' that I J^ave enumernted.
lur. ±1EDLUND. That is correct.
M^^n^'^'S'^ff- ^l?^.'^«':'^dyo" say in retrospect, looking back that
li'^Tu'^'^^.^^^T^'^' ^^ this field as a trustee would be considered
by you to be unethical and improper « t onsiaerea
Mr ?T.J;^r- \^''} ^'^'^''' ^ ^^ ^"^^^^^^ to speak on that.
parLr of Mr hr^"^ is your personal opinion ? Do you feel as a
L^?^:iL^s'tere impJo'p^^^^^^ " ^'"^ transactions, that his actions or
body eke!^'''^''''''' ^ ^"^ """^ ^'^^''^' ^ ''" ^"^^^^^^^ to answer on some-
IMPROPER ACTIVITIES IN THE LABOR FIELD 2171
Mr. IvENNEDY. I just waiit your personal opinion of it. Do you
feel what he did was proper or improper ?
Mr. Hedlund. I think it was proper and every record or every action
that has been recorded has been made a public record fi'om the begin-
ning.
Mr. Kennedy. That is not what is always necessary. Sometimes it
is something further. Let me ask you about yourself. Do you think
that what you did in these transactions was proper or improper as you
look back on it.
Mr. IIedlund. I think it was entirely proper.
Mr. Kennedy. You do 'i
Mr. Hedlund. Yes, sir.
Mr. Kennedy. I thought that you said this morning that you felt
how you had handled these deals, looking back on it, you would feel
that it now looks improper.
Mr. Hedlund. No, I did not, I do not believe that. I did not say
it was improper.
Mr. Kennedy. How did you describe it this morning ?
Mr. Hedlund. That, I do not recall.
Mr. Kennedy. Let me ask you, do you think that what you did, and
how you benefited from these transactions through the Investment
Co. and through the sale to Kay Leheney's widow, do you feel those
activities on your part were completely proper ?
Mr. Hedlund. That sale is one that was done from the heart rather
than the head.
Mr. Kennedy. Could you just answer the question ?
Mr. Hedlund, I feel it is proper in lieu of the statement that I
have just made, in that particular respect. That was done from the
heart rather than from the head, and I know that to be a fact. I am
willing to buy those contracts back again.
Mr. Kennedy. Doing it from the heart also gained you approxi-
mately $11,000 profit, you and Mr. Beck.
Mr. Hedlund. It came to an $11,000 profit, but I gave up a good
income out of those contracts that I would just as soon liaA^e main-
tained, Mr. Kennedy.
Mr. Kennedy. lio you feel that was a proper action on your part?
Mr. Hedlund. I tliink that was a quite proper action on my part.
Mr. Kennedy. And you feel Mr. Dave Beck receiving kickbacks
through the investment company was proper?
Mr. Hedlund. I am not sjieaking for Mr. Beck, Mr. Kennedy.
Mr. Kennedy. Do you feel it was proper or improper now ? That
is, looking back on it.
Mr. Hedlund. I am not expressing my feelings as to the personali-
ties of anybody concei'ned, Mr. Kennedy.
Mr. Kennedy. Will you give me wliat you think ?
Mr. Hedlund. I would like to keep my own personal feelings to
myself.
Mr. Kennedy. What do you think as far as
Mr. Hedltnd. I have ne^'er been ashamed of the business I have
conducted with anybody in the past, including Mr. Beck, and I have
never hidden the fact that I have done business with Mr. Beck or
joined in with him in purchasing land.
I have done so on a straightforward basis and the record will so
indicate.
2172 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kexnedy. Then, you find nothing- wrong in what you did, ai
lar as tliese financial transactions were concerned.
Mr. Hedluxd. As far as I am concerned, I find Jiothing wrono-
Mr IvENXEDY And you would say, I understand that^you telicl
school, you would teach to your students that what you have dont
m this transaction and making this arrangement with Mr. Dave Beck
the trustee of these funds, you would teach them that that woulc
be perfectly ], roper for them to do when they get out in the business
world «
Mr. Hedlund. You know, Mr. Kennedy, I did not make any such
statement and I am very happy that you have brought that up, be-
cause I would never bring it up. But I received a wire from my
students You can teach us any time," and signed by all of the stu-
dents, which was sent to me the otJier day, which I'think expresses
the feeling that the students plus the prior students I have had, had
tor me as their teacher m the days past, and I am very hanpv and I
am very proud of it. ^"^
I am sorry you brouglit it up, Mr. Kennedy.
^^n^"": ■^^11^^'^''?''' ,1 '^''' ^^'^^^ ^°^^ ^^^ ^ ^^^^nce to get the telegram in.
What IS the school? ^
Mr. Hedluxd. The scIjooI is a Jesuit University of Seattle Uni-
Mr. Kennedy. Would you say in your teaching of your school,
you teach them what you have done in these transactions that tliev
should go out into the business world and follow the same procedure
as far making arrangements with trustees of funds? '
Mr. Hedlund. I am not teaching that part of the subject.
Mr. Kennedy. You are teaching mortgages, are you'?
Mr. Hedlund. I am teaching mortgages, real estate, and appraisal.
Mr IvENNEDY So you are not teaching that ? So you would never
get into tellmg them wh.at they should or should not do ^
Mr. Hedlund. No, sir.
Mr. Kennedy. You do not teach ethics ?
Mr. Hedlund. I am not teaching ethics ; no, sir
Senator Mundt. That is leaving it at a curious place. If you
were teaching ethics would you find anything about your arraifo-e-
ments that you would consider unethical « ^
Mr. Hedlund. No, Senator, I did not fmd anything about my
arrangements that I thought was unethical. ^
Senator Mundt. Or your business activities ?
rli ■ ^^°^^^°- ^O' .sir. I liave never considered anything I have
done m business unethical, sir. '^
Mr. I^nnedy. Could I just read you an excerpt from American
^r.tJ^^^^^^■ '^ ^^ ^" *'°'^'^ disabled from obtaining any personal benefit ad
Mr. Hedlund. I have not studied law, Mr. Kennedy,
flir. Kennedy. You never heard of anything like that »
IMPROPER ACTIVITIES IN THE LABOR FIELD 2173
Mr. ITedlund. No, sir. ,
Mr. Kennedy. Do you want the citation again? When you go
back you might want to look it up. Would you like to write it
down ?
Mr. Hedlund. It is not necessary, Mr. Kennedy.
Mr. IvENNEDY. Well, it is volume 54, from the xlmerican Juris-
prudence, page 249, section 314.
Now, it would apear that Mr. Beck would have violated that trust
in the 3 transactions that he had with the Investment Company,
and it would appear that he violated the law and violated this ex-
cerpt on trusts on 2 occasions. No. 1, when he dealt with Mrs. I_xihaney's
funds and No. 2, when the loan was made by the International Brother-
hood of Teamsters, and the loan was made to him unbeknownst to the
International Brotherhood of Teamsters on that $71,000. So there
would appear to be perhaps five violations of this trust.
Would you have any comment on it?
Mr. Hedlund. I have no comment, Mr. Kennedy.
Mr. IvENNEDY. You ucver knew that a trustee is at all times dis-
abled from obtaining any personal benefit or advantage, gain or
profit out of his administration of the trust?
Mr. Hedlund. No, sir.
Mr. Kj^nnedy. You never knew that ?
Mr. Hedlund. No, sir.
Mr. Kennedy. That is all.
The Chaikman. Are there any questions ?
Mr. Ivennedy. Just a moment, Mr. Chairman, we do not have
Mr. Stephens here. We did not bring him back.
However, we did interview him, or Mr. Bellino interviewed him
out in Seattle and Mr. Bellino has a memorandum on his inter-
view with him.
He was asked about this Honolulu deal, and at that time he stated
that Mr. Beck was to receive some of the funds from the $7,500, and
he stated that the portion for Beck was to pay for his expenses.
The Chairman. Well, the proper way to handle that is to make a
statement as to what Mr. Stephens reported to our investigator, and
ask this witness if it is true or false.
Mr. Kennedy. Mr. Stephens has reported that the $7,500 over the
$20,000 was to be split one-third for Hedlund, one-third for himself,
and one-third for Beck. He stated that the portion for Beck was to
pay for his expenses. Is that true or not ?
Mr. Hedlund. That is not true.
Mr. Kennedy. And Mr. Stephens has never discussed this with you ?
Mr. Hedlund. He had no discussion with me on that.
Mr. Kennedy. You say that is untrue?
Mr. Hedlund. It was never discussed with me, and as to what INIr.
Stephens said, I was not present.
Mr. Kennedy. Is that true that this arrangement had been made ?
Mr. Hedlund. That arrangement had not been made to my
knowledge.
Mr. Kennedy. And if the arrangement had been made, you cer-
tainly would know about it?
Mr. Hedlund. If the arrangement had been made, I would know
about it or I slioidd know about it.
2174 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Can you explain at all why he should give us a differ-
ent story than you are?
Mr. Hedlund. No, sir.
Senator Mundt. Do you know Mr. Stephens ?
Mr. Hedlund. Mr. Stephens is an associate of mine.
Senator Mundt. A business associate?
Mr. Hedlund. That is correct, sir.
(Senators present at this point in the proceedings were Senators
McClellan, Ervin, Mundt, and Curtis.)
Mr. Kennedy. Could you explain this letter?
The Chairman. The Chair presents to you, Mr. Hedlimd, a photo-
static copy of a letter written on the teamsters stationery, dated De-
cember 2, 1955, addressed to you from Mr. Dave Beck, and would you
examine this copy and see if you identify it?
(A document was handed to the witness.)
Mr. Hedlund. I recognize and identify the letter, Mr. Chairman.
The Chairman. It may be made exhibit 168.
(The document referred to follows:)
Mr. Kj:nnedy. It is addressed to Mr. Don Hedlund, dated December
2, 1955:
Dear Don : I am enclosing a check covering a mortgage loan in the amount
of $175,000. I am going through with this because I definitely committed myself
and under no conditions would I fail to keep a commitment. But I do want
these people to know that they are not following the same procedure in their
relations with me and this I resent.
Sincerely yours,
(Signed) Dave Beck.
What is this all about?
Mr. Hedlund. I have no idea what that is all about.
Mr. Kennedy. You don't know anything about that?
Mr. Hedlund. No, sir.
Mr. Kennedy. Was that in connection with a deal with Hebb and
Narodicks ?
Mr. Hedlund. That is Hebb and Narodick ; yes, sir.
Mr. Kennedy. What was it that Mr. Beck resented about Hebb and
Narodick ?
JNIr. Hedlund. There was some disagreement as far as construction
cost was concerned, and Mr. Beck insisted and kept on insisting that
the only possible financing that he would do in Honolulu was under
the FHA, 207.
Mr. Kennedy. This is $175,000 that actually went ?
Mr. Hedlund. He was not referring to the particular one — I don't
believe.
Mr. Kennedy. Do you know what the disagreement was? How
were they failing to deal with him in the same way other people were
dealing with him ?
Mr. Hedlund. I do not know as to that.
Mr.KENNEDY. Did you pass on his message to them ?
Mr. Hedlund. I passed on the message, and that was it. I did not
discuss it.
Mr. Kennedy. Now, Mr. Beck sold them some property, did he
not — Hebb and Narodick ?
Mr. Hedlund. Yes, sir; he did.
Mr. Kennedy. That was property that was owned by him and
Dr. Greenstein?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2175
Mr. Hedlund. That is correct.
Mr. Kennedy. And they had paid for that property some $12,600?
Mr. Hedlund. T do not know the price they paid for it.
Mr. Kennedy. Did you arrange the sale?
Mr. Hedlund. We arranged the sale ; yes, sir.
Mr. Kennedy. The records show that Dr. Greenstein and Mr. Beck
paid some $12,600 for that property, and how much did they sell it to
Hebb and Narodick for ?
Mr. Hedlund. If I recall the purchase price correctly, it was about
$85,000.
Mr. Kennedy. $85,000?
Mr. Hedlund. That is correct.
Mr. Kennedy. Did the teamsters ultimately make some loans to
Hebb and Narodick to finance buildings going up in that property?
Mr. Hedlund. The teamsters took a commitment on an apartment
house constructed on that location ; yes, sir.
Mr. Kennedy. So that the teamsters put some money into this prop-
erty of Hebb and Narodick ; is that right ?
Mr. Hedlund. The takeout loan, and not the inner financing, Mr.
Kennedy. It was the finished product.
Mr. Kennedy. Was that approximately $400,000 that was advanced
to Hebb and Narodick ?
Mr. Hedlund. It was about $434,000 or something like that.
Mr. Kennedy. Was that financed through the National Mortgage
Co.?
Mr. Hedlund. That was a loan arranged through the National
Mortgage Co. ; yes, sir.
Mr. Kennedy. So that half of 1 percent went to the National Mort-
gage Co. on that deal ?
Mr. Hedlund. Servicing fee, when the loan is put into effect, which
is not put into effect as yet, Mr. Kennedy.
Mr. Kennedy. Mr. Chairman, we have an affidavit from Vincent
D. Miller, Sr., in which ho made a survey of this property, and gave us
his estimate as to the worth of the property that was ultimately sold to
Hebb and Narodick for $85,000.
State of Washington.
County of King, ss:
I, Vincent D. Miller, Sr., residing at 1223 Spring Avenue, Seattle, Wash., hav-
ing been duly sworn on my oath do voluntarily depose and say that :
I am president of Vincent D. Miller, Inc., a realtor at 1119 Fourth Avenue,
Seattle, Wash., and I have actively engaged in real estate business in Seattle for
50 years.
At the request of Mr. Carmine Bellino, on behalf of the Senate Select Committee
on Improper Activities in the Labor or Management Field, I have examined
records of the Washington Title Insurance Co., concerning sales of real estate in
the vicinity of block 89, Terry's Addition, in the city of Seattle. Based on
various transactions which I considered and on my experience as a real estate
appraiser in this area, I estimate that the total fair market value in August
1955 for lots 2, 3, 5, 6, and 7, block 89, Terry's Addition (sold as 1 parcel)
was about $57,000. This estimate is computed on the basis of 240 frontage feet
on Boren Avenue at $200 per frontage foot and 60 frontage feet on Terry Avenue
at $150 per frontage foot.
I solemnly swear that the foregoing statement has been read by me and that
it is true and correct to the best of my knowledge and belief, so help me God.
Vincent D. Miller, Sr.
Subscribed and sworn to me this date, April 25, 1957.
A. C. Wells, Notary Public.
89330— 57— pt. 7 13
2176 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Now, Mr. Hedlund, do you wish to make any com-
ment regarding the appraisal ? Do you think that estimate is in line
or out of line, or what do you want to say about it ?
Mr. Hedlund. Values of land on the first hill, about 2 blocks away
from it, in the purchase of 1 corner, I believe the contractor told me
that he paid $22,500 per lot. That was for 2 lots, that is 60 by 120.
Incidentally, these 5 lots, as I recall, they were 60 by 120 each, Mr.
Chairman.
The Chairman. I don't know, 2 blocks away makes a lot of dif-
ference in the value of property.
Mr. Hedlund. It does not on that first hill.
The Chairman. I would not know, and I >vanted to give you a
chance to explain it.
Mr. Hedlund. No; it does not. We are also attempting to buy
property for another client up there, sir, and we have not been able
to locate property at $18,000-$20,000 for the vacant pix)perty on a
60- by 120-foot lot.
Across the street from there, from the Swedish Hospital, we are
attempting to pick up 3 lots, 60 by 120, ]ilus 8 feet on a vacated alley,
that would be 128 feet, and a price of $125,000 has been quoted.
Kitty-corner from the Swedish Hospital which is about 3 blocks
away from the location mentioned, on a double corner, that is 120 by
120, $50,000 was paid for that particular corner. Those are recent
prices that I happen to be familiar with.
The Chairman. This affidavit may be made exhibit No. 169. It
was read for the information of the witness but it may be made an
exhibit.
(The document referred to was marked "Exliibit No. 169" for
reference and may be found in the files of the select committee.)
Mr. Kennedy. As I understood your testimony, this property was
purchased by Hebb & Narodick for $85,000.
Mr. Hedlund. Yes.
Mr. Kennedy. Other than tlie transactions that you have men-
tioned, did you benefit in any other way from your relationship with
the teamsters or with Mr. Dave Beck ?
For instance, on any of the other moneys that the teamsters or
any other mortgages they purchased, did you receive a commission
yourself ?
Mr. Hedlund. No, sir.
Mr. Kennedy. You never did ?
Mr. Hedlund. No, sir.
Mr. Kennedy. Did you receive a connnission on any loans that they
purchased ?
Mr. Hedlitnd. No, sir.
Mr. Kennedy. What about the arrangement witli T. J. Bettes?
Did you receive any commission on tliat?
Mr. Hedlund. That went to the company; yes, sir; and not to the
teamsters. You said to myself personally.
Mr. IvENNEDY. Well, Avliat company dicf that go to?
Mr. Hedlund. That went to the Linton Construction Co., sir.
Mr. IvENNEDY. Was tliat on money that was loaiied bv the team-
sters union ?
Mr. Hedlund. The loans were purchased from T. J. Bettes & Co.
in California, wlio are appointed their correspondents in Los Angeles
IMPROPER ACTIVITIES IN THE LABOR FIELD 2177
and San Francisco, and I acted as the broker in the particular trans-
action.
Mr. Kennedy. This money was put up by the teamsters again?
Mr. Hedlund. The loans were purchased, or the GI loans guaran-
teed by the Home Loan Guarantj^ Division of the Veterans' Admin-
istration were purchased by the international teamsters union; yes,
sir.
Mr. Kennedy. Did you receive as a commission on that, $27,152.13 ?
Mr. Hedlund. That sounds like a correct amount.
Mr. Ivennedy. Then again, in the Lambrecht Realty Co., of Detroit,
did you receive as a commission on that $4,097.75 ?
Mr. Hedlund. That is correct.
Mr. Kennedy. From A. D. Robbs Agencies, Phoenix, Ariz.,
$2,742.33 ?
Mr. Hedlund. Yes, 1 received that; yes, sir.
Mr. Kennedy. And T. V. C. Investment Co., Seattle, $2,425 ?
Mr. Hedlund. The T. V. C. Investment Co. ? I do not recall that
investment company.
Mr. Kennedy. That is what your records seem to indicate.
Making a total of $36,417.21.
Mr. Hedlund. I do not recall, Mr. Kennedy, that one. Do you
have the documents there ?
Mr. Kennedy. That would be $2,425 off the $36,417.21.
You have no recollection of it at all? That is T. V. C, Evans.
Mr. Hedlund. Oh. That was a loan made to Evans, T. V. C, it
was a loan application taken from tliem on two pieces of proj^erty.
One was facing on Lake Union, and the other property, new^ property
on the sliip canal. That is just inside of the locks there. That was
a loan of about, if I recall correctly, and I am trying to recall from
memory, of $125,000.
Mr. Kennedy. Did the teamsters have anything to do with that?
Mr. Hedlund. The teamsters purchased the loan, and the fee re-
ceived is the usual fee that is charged the borrower.
Mr. Kennedy. Mr. Chairman, the total is $36,417.21, and these are
the documents in connection with those four transactions.
The Chairman. Do you want to identify these documents?
Mr. Kennedy. Yes.
The Chairman. The witness will examine the four documents re-
ferred to, and see if he can identify them as photostatic copies.
(Documents handed to witness.)
Mr. Hedlund. These are correct, Mr. Chairman.
The Chairman. Thank you, sir. They will be made exhibit 170.
(Documents referred to were marked "Exhibit No. 170" for refer-
ence, and will be found in the appendix on pp. 2513-2520.)
Mr. Kennedy. Mr. Hedlund, we hnd that tliis money all went into
the Don Hedlund trust account.
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. This $36,417.21. This, as I understand it, all came
from transactions dealing with the teamsters union?
Mr. Hedlund. That is c'orrect, sir.
Mr. Kennedy. And you took a brokerage percentage on it; is that
right?
Air. Hedlund. One-half of 1 percent of the face amount of the loan
purchased, sir.
2178 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Did the National Mortgage Co. receive their per-
centage, also?
Mr. Hedlund. The National Mortgage for the Linton Construction
Co. received all of these funds, sir. I did not have it personally,
Mr. Kennedy. You say that the total amount that you received or
the National Mortgage Co. received vras one-half of 1 percent?
Mr. Hedlund. The total amount that I received in these checks was
one-half of 1 percent of the face amount of the loan purchased.
Mv. Kennedy. Did the National Mortgage Co. receive some moneys
in addition ?
Mr. Hedlund. In addition to that ?
No, sir.
Mr. Kennedy. Just a half of 1 percent?
INIr. Hedlund. They received this money, sir. I did not take this
personally.
Mr. Kennedy. Why did it go to the Don Hedlund trust account ?
Mr. Hedlund. It was held at that time until all the checks came in,
in the Don Hedlund trust account, by theNational Mortgage, and then
you will find, sir, taking a look at the books, that that was credited to
income, either of the Linton Construction Co., sir, or of National
Mortgage, not to Don Hedlund.
Mr. Kennedy. These are all four different transactions. Why did
it go to the Don Hedlund trust account ? Why didn't you just leave it
in the companies who made these
Mr. Hedlund. All the brokerage fees that came in were put into this
escrow account.
Mr. Kennedy. Wliy? If the National Mortgage Co. handled it,
why didn't it just go into the profits of the National Mortgage Co.?
Mr. Hedlund. Ask our comptroller why he put it in that way. I
agreed that it is perfectly all right if he wanted to put them in a trust
account and then transfer the funds at a later time, that was perfectly
agreeable with me as long as the funds were accountable for, as long
as they were in an escrow account, and as long as they were given or
the distribution was made to the proper companies at the proper time.
Mr. I^ennedy. When were these funds transferred ?
Mr. Hedlund. I can't answer that offhand, Mr. Kennedy, but I
know they were transferred before the end of the fiscal year of the
company.
Mr. Kennedy. Do you mean 1956 ?
Mr. Hedlund. Before the end of the fiscal year.
Mr. Kennedy. Wliich would be when ?
Mr. Hedlund. May I see the dates on these memorandums which
were the exhibit ?
(Documents handed to witness.)
Mr. Hedlund. Thank you.
They would show^ up on the 1956 statement. These are all dated —
or are they? The memorandums are dated, apparently, after the
fiscal year, so, therefore, they did go in the 1956 income statement.
Mr. Kennedy. Did any of this money go to the National Mortgage
Mr. Hedlund. Part of it did ; yes, sir.
Mr. KJENNEDY. Does it not appear that it all ended up in the Linton
Construction Co. ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2179
Mr Hedlund. All the commissions did not end up in the Linton
''''ui:K^°:£r:'m:^'^ZAy of it go to the Linton Construction
Co , if it was just handled in the regular way ? .1 u ,
Mr Hedlund. For a period of time there, I was actnig as the broker
on behalf of the Linton Construction Co., and on the latter loans, on
behalf of National Mortgage. But all moneys went into either the
LiiiLn Construction Co., did not come to Don Hedlund, although the
checks were made out to me. i n i
Mr. Kennedy. I thought all these transactions were handled
through the National Mortgage Co.
Mr. Hedlund. No, sir. The companies ot
Mr. Kennedy. Did you know that the teamsters were loaning
money to tlie Linton Construction Co., too? fi ,v f^ fL«
Mr: Hedlund. No. There was no loan made through this to the
Linton Construction Co. or National Mortgage. I think we shou d
have an understanding of this one, Mr. Kemiedy. It is a desirability
to purchase loans in other areas besides the Pacific Northwest. Loans
were purchased in Los Angeles, Calif., or I should say m the Los
Angeles area, and in the San Francisco area, on the screening ot the
loans, and I acted as broker in that particular transaction or trans-
actioAs, and T. J. Bettes & Co. recognized that and the checks were
made out to me. They were, in turn, endorsed by me to the National
Morto-age, who held them in an escrow account.
Mr? Kennedy. Wait a minute. They were not transferred from
you to the National Mortgage. They went into a bank account called
the Donald Hedlimd Trust Account. m f^^,.ai
Mr Hedlund. They were endorsed by me payable to the ^lational
Morto-age Co., and endorsed— I think you will find that the can-
celed%hecks, I think you will find, were endorsed that way. And
thev were held in an escrow account, that is correct, as our records
will show, and the distribution was made from the escrow accounts to
the Tjroper company. The full accountability is there.
Mr. Kennedy. How did the Linton Construction Co. get any ot
this money ? , . i i i p x i.i
Mr Hedlund. I acted as a broker at that time on behalt ot the
Linton Construction Co. This is the same type of fee that we pay
brokers in New York at the present time to place loaiis tor us
Mr Kennedy. You were acting as broker for the National Mort-
gage Co. on money that came through the National Mortgage Co.
from the teamsters, right ? <? ^1 t • +
Mr. Hedlund. The first transaction I was acting for the Lmton
Construction Co. In the latter transactions we acted for the National
Mortgage Co. , , -n- i 1 1
Mr?I?ENNEDY. I do not understand that. How do you know when
you are acting for which? I frankly don't understand it.
Mr Hedlund. I was spending more time, and at that time, spend-
ing time with the Linton Construction Co., and acting, and any in-
come derived on the brokerage was going into the Linton Construc-
tion Co., Mr. Kennedy. . ^ , ^ 0
Mr. Kennedy. Was the moneys coming from the teamsters «
Mr. Hedlund. The money did not come from the teamsters, sir.
Mr. Kennedy. Any money that went to the Linton Construction
Co. went through the National Mortgage Company, is that correct?
2180 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. It was held in escrow account until distribution.
Mr. Kennedy. Any money to the Linton Construction Co. from
the teamsters came through the National Mortgage Co., is that
correct ?
Mr. Hedlund. That is correct.
Mr. KJ3NNEDY. Then if you were entitled to a brokerage percentage,
then you were entitled for handling this transaction for the National
Mortgage O., is that right, if you were entitled to it at all ?
Mr. Hedlund. These loans were not made, and the money was not
paid, to the Linton Construction Co. or to National Mortgage. The
money went directly to T. J. Bettes & Co. from the international
teamsters.
Mr. Kennedy. Where did tlie Linton Construction Co. come in?
Mr. Hedlund. I, as an officer of the Linton Construction Co. at
that time, was acting as a broker for the Linton Construction Co.
Mr. Kennedy. What did the Linton Construction Co. have to do
with it?
Mr. Hedlund. I had to do with it as an officer of tlie Linton Con-
struction Co.
Mr. Kennedy. I thought you said you worked for the National
Mortgage Co. ?
Mr. Hedlund. Also with the Linton Construction Co. I told you
before that I only spent part time Avih National Mortgage, sir.
The Chairman. Wliat did you do, charge a fee both ways, gom<r
and coming ? "^
Mr. Hedlund. No, Mr. Chairman, there is no fee charged both
ways.
The Chairman. You took one fee representing the mortgage com-
pany and also the construction company. Wliat did you do then,
split it up?
Mr. Hedlund. Mr. Chairman, I
The Chairman. I am trying to find out a little about this. You
are a very smart bookkeeper. I would like to get this thing straight-
ened out for the record, if we can.
Mr. Hedlund. I am not a bookkeeper, Mr. Chairman.
The Chairman. You are a good broker. Go right ahead and tell
us, now, how you got this all tangled up like it is. I caimot even de-
tect where you are unraveling it. Go ahead now and let us start from
the beginning and see if we can get the facts.
Mr. Hedlund. T. J. Bettes & Co., of California, were selected as a
correspondent for the International Teamsters Union for any loans
purchased in California.
The Chairman. Just a minute. Bettes & Co. was selected as a cor-
respondent by the teamsters imion for what?
Mr. Hedi.und. For any loans purchased in the California area.
The Chairman. All right. In other words, when the teamsters
purchased any loans in the California area, Bettes & Co. was the
correspondent ?
Mr. Hedlund. That is correct, sir.
The Chairman. Wliat is the duty of a correspondent ?
]\fr. Hedlund. The duty of a correspondent is to create, originate
the loans, and to service the loans.
The Chairman. In other words, Bettes & Co. were to find the loans,
and then service them after they were purchased?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2181
Mr. Hedlund. That is correct, sir.
The Chairman. All right. So we have Bettes & Co. straightened
out.
Mr. Hedlund. That is correct, sir.
The Chairman. AVliere do you enter into the picture ?
Mr. Hediaxd. 1 recoinnicMuled T. J. Bettes & Co. I inspected the
loans.
The Chairman. You did what?
Mr. Hedy.und. I iiisi)ected the houses, the loans themselves, as to the
location, the neighborhood amenities. I reviewed the submission
papers as to underwriting tlie risk as far as the borrower is concerned.
The Chairman. l^Hio did you do that for ?
Mr. Hedlund. I did that on behalf of the International Teamstei-s
Union, sir.
The Chairman. On behalf of the teamsters union, so you were
working for the teamsters union in that capacity ?
Mr. Hedlund. In that capa<iity, yes, sir.
The Chairman, ^^^lat did you next do ?
Senator Mundt. Before you leave that, did you get any pay from
the teamsters miion for that service?
Mr. Hedlund. No, sir, I did not.
Senator Mundt. Why would you be doing that for tree i
Mr. Hedlund. I was not doing it for free.
Senator Mundt. If you were not getting paid, you were doing it
for free. . . , i j
Mr. Hedlund. T. J. Bettes is a seller, and it is the usual procedure
for the seller of the loans to pay a brokerage fee. Senator.
The Chairman. All right. The seller was paying you a brokerage
fee, though you were working for the teamsters union?
Mr. Hedlund. That is correct.
The Chairman. You were not working for Bettes ? . , • ,,
Mr. Hedlund. I was working for them in the respect of placing the
loans for them.
The Chairman. You are working for everybody.
Senator ;Mundt. Did you not say Bettes was the seller «
Mr. Hedlund. Bettes is the seller.
Senator Mundt. And you said the seller paid you, not the teamsters i
Mr. Hedlund. That is correct. , <. -o .-
Senator Mundi\ So at that point you were working for Bettes.
The Chairman. The teamsters weive the purchaser.
Mr. Hedlund. Yes. , . ^ . i i j
The Chairman. How could you be working for the purchaser and
the seller, both, ethically ? .1 ^r r^i •
Mr. Hedlund. The broker puts the two of them together, Mr. Chair-
man.
The Chairman. You brought them together i
Mr. Hedlund. That is correct, sir.
The Chairman. All right. You found the property ?
Mr Hedlund. I found the correspondent who had the— found the
correspondent, that is correct, who had the type of loans that the
teamsters, the investors, wanted to buy in the territory that they
wanted to buy.
The Chairman. All right.
Now, then, in that capacity, who were you working tor i
2182 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. In that capacity, I would be ^Yorking for the seller
of the loans and the purchaser of the loans both.
The Chairman. You are working for both ^
Mr. Hedlund. That is correct.
The Chairman. Now, you got one commission for that ?
Mr. Hedlund. That is correct, sir.
The Chairman. Who did you get that from i
Mr. Hedlund. T. J. Bettes & Co.
The Chairman. All right.
Now, when you got that commission, whose commission was it?
Mr. Hedlund. The first commissions went to the Linton Construc-
tion Co., sir.
The Chairman. You were not working as an individual ?
Mr. Hedlund. I was not working as an individual.
The Chairman. Then why did it go to the construction company?
Mr. Hedlund. I was working for the construction company.
The Chairman. You were working for the construction company?
Mr. Hedlund. That is correct, sir.
The Chairman. How^ much did you get out of that transaction that
went into the construction company ?
Mr. Hedlund. I do not remember the exact figure, but if I recall
it was somewhere around $30,000.
The Chairman. You got something like $30,000 for that ?
Mr. Hedlund. I believe that is correct, approximately.
The Chairman. All right. Where did you get any other money
out of this transaction, and for what service ?
Mr. Hedlund. There is no money received for any service except
on the loans purchased, Mr. Chairman.
The Chairman. Where did the National Mortgage Co. get into
it?
Mr. Hedlund. National Mortgage received the later fees.
The Chairman. Received a later fee ?
Mr. Hedlund. Received the later fees on loans purchased after
that date.
The Chairman. A different transaction ?
Mr. Hedlund. Yes, sir. A different group of loans.
The Chairman. An entirely different transaction ?
Mr. Hedlund. That is correct, sir.
The Chairman. Another group of loans ?
Mr. Hedlund. That is correct, sir.
The Chairman. In the second transaction, did the construction com-
pany get anything out of it ?
Mr. Hedlund. No, sir.
The Chairman. So they are two separate transactions ?
Mr. Hedlund. That is correct, sir.
The Chairman. All of it between the teamsters, though, and Bettes
& Co.?
Mr. Hedlund. No. A. B. Robbs Co. and Lanphar & Co. of Detroit
also were involved in this total amount.
Senator Mundt. What had happened, Mr. Hedlund, in the nature
ot the change in connection with your relationship with the con-
struction company and your relationship with the National Mortgage
Co. m between these two transactions.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2183
Mr.HEDLUND. I am sorry, Senator, I did not follow.
Senator Mundt. Had you discontinued your connection with the
construction company and taken on a new connection with the
mortgage company between these two transactions? , u •
Mi\ Hedlund. *At the time I did this, I was on the salary basis,
part-time basis, with the construction company.
Senator Mundt. At the time of the first mortgage to Bettes, you
were being paid a salary by the construction company ?
Mr Hedlund. By the construction company ; yes, sir.
Senator Mundt. Were you being paid a salary by the construc-
tion company at the time of the second transaction?
Mr. Hedlund. No, sir. _ u ^-i,^
Senator Mundt. Were you at that time being paid a salary by the
National Mortgage Co. ? . ,,, , ^
Mr. Hedlund. By the National Mortgage Co. ; yes, sir.
Senator Mundt. That explains wliy the commission switched trom
one company to the other ?
Mr. Hedlund. Yes, sir.
Senator Mundt. Was there any other reason i
Mr. Hedlund. No, sir.
Senator Mundt. None at all ?
Mr. Hedlund. No, sir. . ^i • c . o
Mr. Ivennedy. May I jusk ask you a question on this hrst one?
Let's stick to the first one— Bettes. The money went through the
National Mortgage Co. ; is that right?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Just tell the committee what the National Mortgage
Co. got out of it ? ^ -, . n , i.1 • 4. f
Mr. Hedlund. National Mortgage Co. did not get anything out ot
it, Mr. Kennedy. ^ wi • • rru^
Mr Kennedy. National Mortgage Co. performed this service, ihe
loan came through the National Mortgage Co. Why did not the
National Mortgage Co. get paid ? . ,r rr a
Mr Hedlund. The loans came through Don Hedlund, Mr. Kennedy.
Mr. Kennedy. You mean it did not come through the National
Mortgage Co.?
Mr. Hedlund. No, sir. They came through me. ^ , , ^,
Mr. Kennedy. Do you mean the National Mortgage Co. had noth-
ing to do with this ?
Mr. Hedlund. That is correct. . -,• --i n
Mr Kennedy. It was all through you as an individual i
Mr. Hedlund. As an individual; yes, sir. That is why the checks
from T. J. Bettes & Co. were made out to me as an individual.
Mr Kennedy. How were the arrangements made for you to start
handling, for you personally to start handling, the transactions of
Mr. Hedlund. Do you mean the outside brokerage?
Mr. Kennedy. Yes.
Mr Hedlund. I have always handled the outside loans.
Mr. Kennedy. I thought all this money was to go through the
National Mortgage Co.?
Mr. Hedlund. No, sir. . -,. . i ^^
Mr. Kennedy. You would handle it as an individual i
2184 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund, None of the money went through me, or I did not
see the checks. They were paid directly to the bank or to T. J.
Bettes & Co. after the loans had been delivered.
Mr. Kennedy. But the National Mortgage Co. had absolutely noth-
ing to do with this transaction?
Mr. Hedlund. No.
Mr. Kennedy. They never entered into it at all ?
Mr. Hedlund. They never entered, they never received any money,
the checks did not go through them at all.
Mr. Kennedy. But did tTie National Mortgage Co. have anything
do with this transaction ?
Mr. Hedlund, No, sir. I screened the loans,
Mr. Kennedy. And no check was made out payable to them, or
anything ?
Mr, Hedlund, No, sir.
Senator Ervin. Mr, Chairman, I though awhile ago that the Chair-
man Avas going to get the witness to straighten this out so that I could
understand it, but the only conclusion I can draw from it is that it
reminds me of the old hymn we sing in North Carolina about the
Lord moving in mysterious ways His wonders to perform.
The Chairman, Well, I expect w^e have the record just about as
clear as we will ever get it.
Can we move along ?
Mr. Kennedy. We got the record from the National Mortgage
Co, We traced these transactions with the National Mortgage Co,
Mr, Hedlund. On loans purchased for T. J, Bettes & Co. ?
Mr. Kennedy. Well, I believe so.
Mr. Hedlund, No check was sent to National Mortgage Co,, Mr.
Kennedy.
Mr, Kennedy, Then you just say the National Mortgage Co, did
not have anything to do with it ?
Mr, Hedlund, That is right. No check was sent to the National
Mortgage Co.
Mr, Kennedy, It went through you as an individual?
Mr, Hedlund, That is correct, sir,
Mr. Kennedy. Why did Linton Construction Co. get the money,
again ?
Mr, Hedlttnd. I was on a salary at the Linton Construction Co. at
that time.
Mr. Kennedy. Did you put it through the Linton Construction Co.
for tax reasons ?
Mr, Hedlund. No, sir.
Mr. Kennedy, Thank you.
Senator Mundt, One thing I cannot quite understand, Mr. Hed-
lund, if the National Mortgage Co. had nothing whatsoever to do
with tlie transaction, the first one— that is the one vou are talking
about? • ^
Mr. Hedlttnd. That is correct.
Senator Mundt, I understood you right, did I not, that they had
nothing whatsoever to do with the first loan ?
Mr, Hedlund, That is correct, sir.
Senator Mundt. That the loan had been handled exactly the same
as if there had been no such organization as the National Mortgage
Co.? ^ ""
IMPROPER ACTIVITIES IN THE LABOR FIELD 2185
Mr. Hedlund. That is correct, sir.
Senator Mundt. Would yon then explain to me how it happened
that we got all of the facts and figures out of the National Mortgage
Co. books, where we got our information ? , ,, , , ^ .
Mr. Hedlund. The National Mortgage Co. held the funds in an
escrow account. That is the only function they performed.
Senator Mundt. Which funds? . ^ ^, , ,
Mr. Hedlund. The brokerage fee that was paid. The check was
made out in my name. Senator. , ,^ , ^
Senator Ervin. For whom was the National Mortgage Co. acting
as escrow agent ? . j. ^i t • j.
Mr. Hedlund. They were acting as escrow agent tor the i^mton
Construction Co. and myself in this case, sir. • v •-, i
Senator Ervin. You see, you tell us that you acted as an individual,
then that vou acted as agent for the teamsters union, then you are
actintr as agent for the Bettes Co., and then you acted as an officer
of the Linton Construction Co. How did you keep the left hand
advised as to what your right hand was doing?
Mr Hedlund. It sounds like a lot of hands. Senator, doesnt it?
That isn't quite the interpretation of what I am trying to say. Senator.
Apparentlv I fim not making myself very clear.
Senator Ervin. You are doing worse than that. You are putting
me in a state of total confusion.
Mr. Hedlund. I find I am gradually getting there myself.
The Chairman. All right. Proceed, Mr. Counsel.
Mr. Kennedy. Did Mr. Dave Beck signify that this would be done
through you?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. So that is true in all of these four transactions
totaling $36,417.21?
Mr. Hedlund. That is correct, sir.
Mr. Kennedy. Mr. Chairman, we have some other figures on here
which might just serve to confuse it. I do not know whether you
want to pursue it or not.
The Chairman. If it is going to confuse it, I do not want to pursue
it.
I will have to risk the counsel's judgment.
Senator Mundt. I think we have been proceeding with monotonous
simplicity. I would like to pursue it myself. , a ^
The Chairman. The Chair would be glad to yield to the benator
from South Dakota, if he can undei-stand it.
Mr. Kennedy. I notice, for instance, when Bettes wrote you, they
wrote you as the National Mortgage Co.
Mr. Hedlund. That is correct, sir.
Mr Kennedy. We have a check here for $36,417.21 made payable
to the Linton Construction Co. from the National Mortgage Co. How
did the National Mortgage Co. get in on it ?
Mr. Hedlund. Those were the funds that were held in the escrow
account, Mr. Kennedy. At that time, whatever the date of that par-
ticular check is, National Mortgage drew a check on the escrow account
and transferred the funds to the Linton Construction Co.
Mr. Kennedy. I do not like to say I give up, but I don't under-
stand it.
2186 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, Hedlund. Mr. Kennedy, if you saw the number of escrow ac-
counts that any mortgage company lias to have, you would become
more confused.
Mr. Kennedy. Did you also have one business deal or transaction
in the Midwest?
Mr. Hedlund. Yes, St. Louis.
Mr. Kennedy. What was that for ?
Mr. Hedlund. The building association there, or whatever group
that is formed by a group of the locals, was intending to buy the
building known as the Magic Chef Building, which had been vacated,
and I was requested to come back there.
Mr. Kennedy. Who made that request of you ?
Mr. Hedlund. Mr. Beck made the request to check as to the value
of the building, whether it was a logical purchase for them, whether
it could be converted into their use, and to see that the leases, property
loan papers and title policies, and all necessary procedures, were
properly set up, because the international was making a direct loan to
this group in St. Louis.
Mr. Kennedy. There was nobody in St. Louis that could do that ?
Mr. Hedlund. I do not know as to that, but they asked me to go
back to St. Louis.
Mr. Kennedy Who is "they" ?
Mr. Hedlund. Mr. Beck did, and then Mr. Gibson.
Mr. Kennedy. Mr. Beck requested you to go back ?
Mr. Hedlund. Yes. And check, because the international was mak-
ing the loan to the building group there for the purchase of the
building,
Mr. Kennedy. Did you say Mr. Gibbons asked you to come back ?
Mr. Hedlund, Yes, sir. Also.
Mr. Kennedy, He called you or w^rote you a letter and said to come
back?
Mr. Hedlund. Is it Gibbons or Gibson ?
Mr. Kennedy. Gibbons.
Mr. Hedlund. I saw him in Washington, D. C, and flew into St.
Louis with him.
Mr, Kennedy, Was that after Mr, Dave Beck asked you ?
Mr. Hedlund. That is after Mr. Dave Beck asked me, I had been
there prior to that time, too, Mr. Kennedy.
Mr. Kennedy, Did you receive a commission on that ?
Mr. Hedlund. Yes, sir, I did.
Mr. Kennedy. How much money did you receive on that ?
Mr. Hedlund. One-half of 1 percent of $750,000 would be $3,750.
Mr. Kennedy. Mr. Chairman, we have another letter.
Was Mr. Gibbons a little sIoav paying you ?
Mr. Hedlund. Yes, sir ; he was.
Mr. Kennedy. Do you know why he would not pay you ?
Mr. Hedlund. No; I do not. I think it just slipped his mind, that
is all.
Mr. Kennedy. Did you hear or learn that they felt that you were
not entitled to this payment ?
Mr. Hedlund. No, sir ; I did not.
Mr. Kennedy. Did Mr. Beck have to write him a letter and tell
him to pay you ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2187
Mr Hedlund. I think Mr. Beck did drop him a line, as I recall it.
I called it to Mr. Beck's attention that I had not been paid for the
The Chairman. Have you ever heard this letter read before, or seen
it, of October 8, 1956, to Mr. Harold Gibbons, 727 Pine Street, St.
Louis, Mo. :
De^b Mr. Gibbons: You will recall that I talked with you relative to the
work that Don Hedluud did in an advisory capacity in connection with the
St Louis building project loan. It was agreed that your organization would
pay mm $3 750, but to date he has not received this check. May I anticipate
that you will give it your early attention? In appreciation, I am.
Fraternally yours, ^^^ ^^^^
Mr. Hedlund. I believe I received a copy of that letter.
The Chairman. I believe you did. So you are familiar with it i
Mr. Hedlund. Yes, sir ; I am.
The Chairman. Thank you.
Are there any other questions from any member?
Everyone be at ease for about 3 minutes. ,r r^i n
(Members present at the taking of the recess: Senators McClellan,
Ervin, Mundt, and Curtis.)
(I^Iembers present after the taking of the recess: Senators McClel-
lan, Ervin, Mundt, and Curtis.)
The Chairman. The committee will come to order. „ , ^ ^i
The Chair has had the staff make a recapitulation of what the
testimony shows with respect to these transactions and the prohts
Mr Beck got out of them. I will ask counsel to make a briet state-
ment as to wliat they show according to the testimony, and the wit-
ness, if he cares to, may comment upon it before he leaves the stand.
Mr Kennedy. Could I ask the witness one question ?
You also received some moneys through the Occidental Insurance
Co., did you not, the National Mortgage Co.?
Mr. Hedlund. The Occidental Insurance Co. appointed us as a
correspondent ; yes, Mr. Kennedy.
Mr. Kennedy. Was that $50,000 a month ? , „ ^. . .,^ ^.,,
Mr. Hedlund. At the present time, I think the allocation is $50,000
a montli. ^ . . .
Mr Kennedy. The Occidental Insurance Co. is the insurance com-
pany through which the Western Conference of Teamsters puts their
insurance ?
Mr. Hedlund. That is what I understand. , >t x- i
Mr. Kennedy. Did Mr. Dave Beck intervene for the National
Mortgage Co.?
Mr. Hedlund. He made a call with me ; yes, sir.
Mr. Kennedy. He did ?
Mr. Hedlund. Yes, sir.
Mr. Kennedy. And he urged on them that they place this with the
National Mortgage Co. ? ,
Mr. Hedlund. If their money outlet was such in that area; yes.
Mr. Kennedy. The answer is "Yes."
Mr. Hedlund. If their money was available up there, yes.
Senator Mundt. You say you get $50,000 a month commissions from
the Occidental ?
2188 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Hedlund. No, sir. No, no.
Senator Mundt. I thought you said $50,000 a month. That is a
high figure.
Mr. Hedlund. Mr. Kennedy's question was that we got an alloca-
tion of $50,000 a month for the purchase of mortgage loans, sir.
Senator Mundt. I thought you said $50,000 a month.
Mr. Hedlund. They allocate for the area $50,000 a month for pur-
chase of mortgage loans.
Mr. Kennedy. Mr. Chairman, according to the testimony today,
through Mr. Dave Beck, bearing on the relationship between Mr.
Hedlund and Mr. Beck, through Mr. Dave Beck, No. 1, the National
Mortgage Co. received the mortgages, some $9 million worth of mort-
gages, from the International Brotherhood of Teamsters. Mr. Don
Hedlund, according to the testimony this afternoon, received some
$40,000 worth of commissions, $36,000 from Bettes, et cetera, and then
the $3,750 from Mr. Gibbons in St. Louis.
An insurance company was set up, Mr. Hedlimd investing some-
thing like $100 or $150, and some $25,000 of insurance for the auto-
mobiles in the Eastern Conference of Teamsters has gone to that
insurance company.
No. 4, the Linton Construction Co., it has been established, is in
existence, and some $2 million of mortgages have gone to the Linton
Construction Co. In return for that, a company called, No. 1, the
Investment Co. was set up, from which Mr. Dave Beck received a
kickback of one-third of $20,000 in commissions. A third of that
also went to Mr. Simon Wampold, an attorney for the teamsters, and
a third to Mr. Hedlund. There was a sale of property, two pieces of
property, that were sold, owned originally by Mr. JDave Beck and
Mr. Don Hedlund, and Mr. Hedlund caused the Linton Construction
Co. to purchase them, and the total profit for Mr. Dave Beck and
Mr. Don Hedkmd on that transaction was some $23,000, which they
split two ways.
Then the third matter was the sale of property to the widow, Mrs.
Leheney, which was a profit in approximately a 6-month period of
time, a profit of approximately $11,000, which was split two ways,
between Mr. Dave Beck and Mr. Donald Hedlmid.
The Chairman. Is there any comment you wish to make, Mr.
Hedlund?
Mr. Hedlund. No comments, Mr. Chairman.
The Chairman. Thank you very much. You may stand aside.
Call the next witness.
Mr. Kennedy. Mr. Linton, of the Linton Construction Co., IVIi'.
Jess Linton.
(Members present at this point : Senators McClellan, Ervin, Mundt,
and Curtis.)
The Chairman. Come forward, please.
You do solemnly swear that the evidence you shall give before
this Senate Select Committee shall be the truth, the whole truth, and
nothing but the truth, so help you God ?
Mr. Linton. I do.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2189
TESTIMONY OF JESS W. LINTON
The Chairman. State your name, your place of residence, and your
business or occupation. • n • t^ i j
Mr Linton. My name is Jess W. Linton. I reside in Edmunds,
Wash. I am employed by the Linton Construction Co. of beattie
as its president.
The CiiAiiusiAN. You are employed by whom i
Mr. Linton. The Linton Construction Co.
The Chairman. In what capacity?
Mv. Linton. As its president.
The Chairman. As its president ?
Mr. Linton. Yes, sir.
The Chairman. How much interest do you own in the company i
Mr. Linton. Twenty-five percent, sir.
The Chairman. Twenty-five percent.
All right. Thank you very much.
Mr. Counsel? ^ • .1 • .
Mr. Kennedy. Mr. Linton, you were an officer in this construc-
tion company for a number of years, is that right?
Mr. Linton. Yes, sir. ,
Mr. Kennedy. And then you made an agreement with Mr. Donald
Hedlund and the construction company expanded ?
Mr. Linton. Yes, sir.
Mr. Kennedy. Is that right ?
Mr. Linton. Yes, sir. . -, ^ • -1
Mr Kennedy. And during that same period of time, was the com-
pany called the National Mortgage Co. re-formed and reestablished?
Mr. Linton. The reformation of both companies was concurrent;
ves sir
Mr. Kennedy. Had you been an officer in the National Mortgage
Co. prior to that time ?
Mr. Linton. Yes ; I had. .
Mr. Kennedy. A\Tiat percentage of the stock did you own prior to
the time it was reestablished ? , , i u i. on
Mr. Linton. I don't recall exactly. It was probably about 20
percent or 30 percent. . ,
Mr. Kennedy. What had been your investment, approximately?
Mr. Linton. In dollars ?
Mr. Kennedy. Yes.
Mr. Linton. About $3,000. . ^ ., . 1
Mr. Kennedy. It was re-formed, and what percent ot the stocK
did you own then ?
Mr. Linton. About 3 percent. • -u-
Mr. Kennedy. Wlio were the stockholders that took over m this
other company when it was re-formed ? . -, , ^ .
Mr Linton. The stockholders of the new National Mortgage were
Sherman Stephens, Donald Hedlund, Mr. Joseph McEvoy, myself,
and, I think, probably, two other minor stockholders from the original
company. , , ,
Mr Kennedy. Did you understand that when that new company
was formed, the National Mortgage Co. was formexl did you under-
stand, from conversations that you had with Mr. Stephens and Mr.
2190 IMPROPER ACTIVITIES IN THE LABOR FIELD
Hedlund, although perhaps nothing specifically, that Mr. Joseph
McEvoy was representing somebody else's interest in the company?
Mr. Linton. That point was never brought out clearly to me ; no.
Mr. Kennedy. Did you understand he was representing anybody
else's interests ?
Mr. Linton. No.
Mr. Kennedy. You never understood that ?
Mr. Linton. No, sir.
Mr. Kennedy. You never had any understanding at all that he was
representing Mr. Dave Beck's interest?
Mr. Linton. No, sir.
Mr. Kennedy. Did you state to me when I visited with you in
Seattle that that is what you understood, from the conversations that
you had?
Mr. Linton. No, sir. I think the way I put it was this, if you will
allow me.
Mr. Kennedy. Go ahead.
Mr. Linton. There was certain conjecture, and it was all conjecture
at the time, among the lesser employees, who I probably associate
more with than with the stockholders, that there was a connection
through relationship, but it was purely personal opinions, and there
was nothing definitely told to me.
The Chairman. 'Wliat caused you to have that opinion?
Mr. Linton. Just through the blood relationship or marriage re-
lationship, sir.
The Chairman. Plus what else?
Mr. Linton. Nothing.
The Chairman. The fact that Mr. Beck was helping finance these
things through the teamsters union ?
Mr. Linton. We were aware that the teamster account was eminent,
which, of course, was going to help; yes, sir.
The Chairman. And you know that you could not have the benefit
of that or it would not be made available to you except upon the
judgment and orders of Mr. Beck. You knew that; did you not?
Mr. Linton. I knew nothing of that, sir.
Tlie Chairman. You did not know he was president? You found
out that he was president and trustee of the union funds; did you
not?
Mr. Linton. Yes, sir ; I know tliat.
The Chairman. You knew that, then ; did you not ?
Mr. Linton. Yes, sir.
The Chairman. He would make a decision; would he not?
Mr. Linton. That was not told to me.
The Chairman. I did not say it was told to you. I am talking about
what you knew from the facts, from the circumstances, that this ac-
count was eminent; as you said, was available.
Mr. Linton. I could assume from the facts, but I couldn't know
without being told by someone in authority.
The Chairman. Well, you indulged the assumption, then?
Mr. Linton. I may have. I don't know.
The Chairman, You would not know whether you assumed or not?
O. K. Proceed.
Senator Mundt. You own 25 percent of the Linton Co., did you say ?
Mr. Linton. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2191
Senator Mundt. And you are the president of it ?
Mr. Linton. Yes, sir. ,. ., t • . r^ i
Senator Mundt. Who are the other stockholders ot the Linton Co. i
Mr. Linton. J^lr. Sherman Stephens, Mr. Don Hedliind, Mr. Jo-
seph ^IcEvoy, and myseH ^ , u ..i
Senator Mundt. In other Avords, about the same people own both
companies ?
Mr. Linton. About, yes, sir. j. ^ , c
Senator Mundt. And they have varying percentages of stock *
Mr. Linton. Yes, sir.
Senator Mundt. But the same stockholders, we can say, control
both the Linton Construction Co. and the National Mortgage Co. ?
Mr. Linton. Yes, sir. . , , i p ^i
Senator Mundt. The controlling interest is m the hands ot the same
individuals?
Mr. Linton. Yes, sir. • ^ - j
Mr. Kenndey. In the Linton Construction Co., you were interested
in purchasing certain property ; is that right?
Mr. Linton. Yes, sir. i i n i i
Mr. Kennedy. Did you at one time put down a thousand-dollar check
for a downpayment on a certain piece of property in Parkdale No. 1,
on April 21, 1954? ^ , ^ ., .
Mr. Linton. I don't remember if the check was tor that exact
amount, but I did put earnest money on that property ; yes, sir.
The Chairman. The Chair presents to you what purports to be a
photostatic copy of it. Will you examine it, please, sir, and state
wliether you recognize it?
(Document handed to witness.)
Mr. Linton. Yes, sir, that is the copy of the
The Chairman. That may be made exhibit No. 171.
(The document referred to was marked "Exhibit No. 171 tor
reference and will be found in the appendix on pp. 2521-2523.)
Mr. Linton. I can't tell by the legal description here whether that
is the tract we are referring to as Parkdale, however. But the price
is right. , ^ ^ -^
Mr. Kennedy. The check shows that it was canceled out alter you
made tlie downpayment. AVhat happened on that ? It was closed out.
Mr. Linton. The check ?
Mr. Kenedy. Yes.
Mr. Linton. Voided or canceled by the bank ?
Mr. Kennedy. It was canceled void, made void.
Mr. Linton. Made void before it was run through the bank?
Mr. Kennedy. I believe so. .
Mr. Linton. Probably tlie real estate company that I dealt witli
just held the check.
Mr. Kennedy. Did you buy that property then?
Mr. Linton. Yes. .
Mr. Kennedy. Did you buy it from this company which you were
interested in buying from originally ? Was the property purchased
di recti V?
Mr. Linton. No. Do you mean did Linton Construction pay the
full purchase price at that time?
Mr. Kennedy. Yes.
89330— 57— pt. 7 14
2192 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, Linton. No, sir, I don't believe so.
Mr, Kennedy. What happened ?
Mr. Linton. Well, before the earnest money was signed, I had
contacted Mr. Hedlund and asked him to look at that piece of prop-
erty to see if he would buy it and hold it for my future construction.
And once he had looked at the property and determined in his mind
that it was a proper buy, and we had agreed on a final sales price, I
signed the earnest money to tie the property up until the deal could
be escrowed and closed with funds from Mr. Hecllund.
Mr. Kennedy. Mr. Hedlund ultimately purchased this property,
he and Mr. Beck ultimately purchased this property, for approxi-
mately $28,000, and then it Avas sold to you, some 6 months later,
for $45,000.
Mr. Linton. Yes, sir.
Mr. Kennedy. Did you feel at that time, or do you feel now, that
that was an excessive amount to be paying for the property after it
had only been worth, originally, 6 months before, $28,000 ^
Mr. Linton. Well, I decided at the time, Mr, Kennedy, that that
Avas the maximum I could pay for the property, and still serve the
best interests, economically, of my company.
Mr. Kennedy. Who was your boss at that time ?
Mr. Linton. I am the president.
Mr. Kennedy. Who were you taking instructions from ?
Mr. Linton. I wasn't taking instructions from anyone. All of our
decisions were made through consultation with each other. Mr. Hed-
lund and I worked very closely together on that piece of land.
Mr. Kennedy. Mr, Hedlund was the chief stockholder, was he?
Mr. Linton. Yes, sir.
Mr. Kennedy. So the decision was made by him and then con-
curred in by you, is that right ?
Mr. Linton. I think it was mutual.
Mr. Kennedy. Looking back on it now do you think that that
might have been an excessive amount of $28,000 or $45,000, whatever
was paid for that property ?
Mr. Linton. Looking back on it, the land values in that area didn't
continue to climb as fast as I thought they would at the time. But
whether or not it was excessive, or I could say it was excessive, I
can't, no, sir.
Mr. Kennedy, Have you ever, in any other case, had a markup as
large as this ?
Mr. Linton. Yes, sir.
Mr. Kennedy. In what circumstance was that?
Mr. Linton. Another piece of property in that area.
Mr. Kennedy. Purchased from whom ?
Mr. Linton. The same party.
Mr. Kennedy. Well, other than that, other than these two pieces
of property, one that was bought for $13,000 and sold 2 months
later to you for $20,000 and one purchased for $28,000 and sold to
you for $45,000, have you had any experience comparable to that?
Mr. Linton. None that I can recollect, sir, no.
Mr, Kennedy, And do you think, looking back on it now, that
that might have been an excessive amount to charge ?
Mr, Linton. No, sir.
Mr. Kennedy. Looking back on it now, you do not think so?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2193
Mr. Linton. The market didivt do what I wanted it to do. I will
put it that way. , , „
Senator Mundt. Mr. Linton, this was not what you would call an
arm's lent^tli transaction, was it? It is the same people selling prop-
erty to themselves. It is a kind of bookkeeping transaction, con-
venient for tax purposes but not for any other particular reason.
Mr. Linton. Wiat the purposes w^ere, I do not know.
Senator Mundt. It was not an arm's length transaction. Linton
was selling to Linton and Hedund was selling to Hedlund. You were
just going through some motions here for what I would construe
to be tax purposes, making an assumption, but I cannot see any par-
ticular reason why it makes much difference what price you buy it
for and what price you are selling it for when you sell it to yourself,
since both stockliolders own the two companies. This was a trans-
action between the two companies, was it not?
Mr. Linton. Not between the two companies. It was between Lin-
ton Construction and the two individuals.
Senator Mundt. Who were the majority stockholders of the other
companies ?
Mr. Linton. Mr. Beck wasn't interested in my company, but he was
one of the individuals who joined Mr. Hedlund
Senator Mundt. So. Mr. Beck made his profit, then, because he just
held the stock in one company, on the piece of property.
Mr. Linton. In the piece of property, yes, sir.
Senator Mundt. Wimt would induce you, then, as a bright young
businessman from the west, to have a piece of property tied up for
$28,000, and paying earnest money on it. You said Mr. Hedlund did
not know anything about it but you asked him to take a look at it.
"Wliy did you not buy it at that time ? It was good enough so that you
would pay $45,000 for it a few months later, so why would you not
buy it then for $28,000?
Mr. Linton. In order for a builder to keep operating, he has to have
a certain amount of property out in front, ready to be developed
and built on, so he can lay his production plans. We did not have the
money to put into property and hold it for any length of time. Con-
sequently, as most builders do, we had to agree to pay more for the
property at a later date when the houses were sold and the deals com-
pleted, the deals were closed.
In other words, we didn't pay for the land until our houses were
constructed, sold, and our construction mortgages paid off. This is a
common practice among many builders.
The Chairman. Senator Ervin?
Senator Ervin. How many months later was it that you purchased
it from Mr. Beck and Mr. Hedlund?
Mr. Linton. How many months after what, sir?
Senator Ervin. After you had the chance to buy it yourself for
your company.
Mr. Linton. I don't recall, sir. It was whenever we got ready to
put the houses on it.
Senator Ervin. But it was just a few months later, was it not?
Mr. Linton. Yes. It wasn't too long.
Senator Ervin. In other words, you had a contract under which the
Linton Co. could have purchased this property for $28,000 ?
Mr. Ljnton. Yes, sir.
2194 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Ervin. And you, instead of exercising the right to pur-
chase it, let one of the principal stockholders of your company and
Mr. Beck purchase the property for $28,000 ?
Mr. Linton. Yes, sir.
Senator Ervin. And then a few months later, you had your com-
pany, or your company, rather, repurchased this property from the
principal stockliolder of your company, Mr. Hedlund, and from Mr
Beck, at a profit to them of $17,000 ?
Mr. Linton. Yes, sir. That was agi-eed prior to my signing tlie
origmal earnest money.
Senator Ervin. Then you say you were disappointed later that
the market did not continue to go up in such a degree as that.
Mr. Linton. I am not disappointed in anything other than my own
expectatioiLS at the time.
Senator Ervin. Did you make an effort to obtain an option on this
property from the people from whom it was originally purchased?
Mr. Linton. This particular piece of property was cash. It was
necessary to have cash.
Senator Ervin. Did you not have an option ?
Mr. Linton. We had earnest money.
Senator Ervin. How long did you have to pay for it under that?
Mr. Linton. That gives you no time, except for gaining title re-
port and ordinary closing time.
Senator Ervin. In other words, by a transaction between your
principal stockliolder and Mr. Beck they made a profit there in a
few months of $17,000 oft' of your corporation ?
Mr. Linton. No, sir ; they didn't make the profit in that short length
of time. They paid for the land, and within 6 or 8 months we began
to develop it. But it was a period of probably a year and a half or
2 years before they realized final and full payment on their invest-
ment.
Senator Ervin. They made a profit of $17,000 in about a year
and a half at the most ?
Mr. Linton. Yes sir. Something like that.
Senator Ervin. And where did you get the money to develop the
property from?
Mr. Linton. We got the money by advances on construction loans.
Senator Ervin. And the money that was used to develop this prop-
erty out of which Mr. Beck and Mr. Hedlmid made this profit came
from the teamsters union, did it not ?
Mr. Linton. It came, I presume— I got it from National Mort-
gage; yes, sir.
Senator Ervin. It came from the teamsters union through the
National Mortgage Co. to the Linton Construction Co. ?
Mr. Linton. That is right, sir. There was a blanket mortgage
placed on the entire tract.
Senator Ervin. Do you not know, as a matter of fact, tliat the
reason that you agi-eed to buy this at a $17,000 profit to Mr. Beck
and to Mr. Hedlund was because of your understanding that the de-
velopment would be financed, that the teamsters union, acting
through INIr. Beck as trustee, would advance the money for financing
of tlie develo])ment ?
Mr. Linton. No, sir. The same thing occurred on another tract of
ground where onr financing was from a different source. So I
couldn't say that would be.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2195
Senator Ervin. Do you not think it is just a little queer ^ Do you
not think somebody else would be iustified in drawmo; that kind of
an inference from this set of facts?
Mr. Linton. That is possible, sir; yes.
Senator Ervin. Well, is it a reasonable inference for somebody to
draw ?
Mr. Linton. It is reasonable ; yes, sir.
Senator Ervin. That is all.
The Chairman. Counsel?
Mr. Kennedy. I believe that is all, Mr. Chairman.
(At this point, Senator Curtis withdrew from the hearing room.)
The Chairman. You may stand aside.
Call the next witness.
Mr. Herdlund, will you come forward for a moment?
Is Mr. Hedlund in the room ?
The counsel and staff advise that they have some work to do. We
could get started with another witness this afternoon, but could not
conclude. Since we are going to go over until next week, I will not
hold any committee hearing tomorrow, it could be very well that we
would liot get halfway through a witness and w^ould have to stop.
We will take a recess until Monday afternoon at 2 o'clock.
("\Vliereupon, at 4:05 p. m., the committee recessed, to reconvene
at 2 p. m., Monday, May 13, 1957.)
(Members present at the taking of the recess : Senators McClellan,
Irvin, and Mundt.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
MONDAY, MAY 13, 1957
United Stx^tes Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington, D. G.
The select committee met at 2 p. m., pursuant to Senate Resolution
74, ao-reed to January 30, 1957, in the caucus room. Senate Othce
BuilcUng, Senator John L. McClellan (chairman of the select com-
mittee) presiding. o -
Present: Senator John L. McClellan, Democrat, Arkansas; Senator
Irvino- M. Ives, Republican, New York; Senator John F. Kennedy,
Democrat, Massachusetts; Senator Sam J. Ervin, Democrat, North
Carolina; Senator Pat McNamara, Democrat, Michigan; Senator
Barry Goldwater, Republican, Arizona ; Senator Karl E. Mundt, Ke-
publican. South Dakota; Senator Carl T. Curtis, Republican,
Nebraska
Also present: Robert F. Kennedy, chief counsel; Jerome Adler-
man, assistant counsel; Carmine Bellino, accounting consultant; Kuth
Young Watt, chief clerk.
The Chairman. The committee will come to order.
(Present at the convening of the session were Senators McClellan,
Ives, Kennedy, and Goldwater.)
The Chairman. Call the first witness.
Mr. Kennedy. Mr. Roy Fruehauf . ,
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate select committee shall be the tnith, the whole
truth, and nothing but the truth so help you God ?
Mr. Frueitaut. I do.
TESTIMONY OF ROY FRUEHAUF, ACCOMPANIED BY HIS COUNSEL,
CLARK M. CLIFFORD
The Chairman. Will you state your name and your place of resi-
dence and your business or occupation, please? ,
Mr. Fruehauf. My name is Roy Fruehauf. My residence is o660
Middiebelt Road, Birmingham, Mich. I am president of the Frue-
hauf Trailer Co. -, . o
The Chairman. Thank you. You have counsel present ?
Mr. Fruehauf. I do, Senator. ,-. ^ -i
The Chairman. Mr. Counsel, will you identify yourself for the
record ?
2197
2198 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Clitford. My name is Clark M. Clifford. I am an attorney at
law in the District of Columbia. My office is at 1523 L Street, Wash-
ington, D. C.
The Chairman. Thank you very much.
Mr. Counsel, you may proceed.
Mr. IvENNEDT. Mr. Fruehauf , you know Mr. Dave Beck ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. You liad some dealings with him back in 1953, I
understand ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Did you know him prior to that time ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. How long have you known him ?
Mr. Fruehauf. I would say in 1950, Mr. Kennedy.
Mr. Kennedy. About 1950 ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Under what conditions did you first meet him?
Mr. Fruehauf. I served on a committee of the trucking industry,
and that is where I made my acquaintance with Mr. Beck.
Mr. Kennedy. AYliat was the name of that committee ?
Mr. Fruehauf. The Independent Advisory Committee to the
Trucking Industry,
Mr. Kennedy. Was tiiat formed shortly after the beginning of the
Korean war ?
Mr. Fruehauf. Yes.
Mr. Kennedy. For what pmi^ose?
Mr. Fruehauf. If you will remember at that time, there was quite
a scramble for materials. The trucking industry had no strong
spokesman to speak out in their behalf. That was the original desire
of forming this committee.
Mr. Kennedy. It was called what again ?
Mr. Fruehauf. The Independent Advisory Committee to the
Trucking Industry.
Mr. Kennedy. "\Y1io else sei-ved on it, other than yourself ?
Mr. Fruehauf. Mr. Arthur Condon, he was secretary-treasurer
and legal counsel, and Mr. B. M. Seymour, president of the Associated
Transport, and Mr. Leland James, at that time was president of the
Consolidated Motor Freight Lines, and later he was superseded by
Mr. Walter Kerry, past president of the American Trucking Asso-
ciation.
Mr. Kennedy. And Mr. Dave Beck served on that committee, also ?
Mr. Fruehauf. Yes, sir ; he was the chairman.
Mr. Kennedy. How were the appointments made, or how were you
appointed or elected to that committee ?
Mr. Fruehauf. Well, I don't know.
Mr. Kennedy. How did you happen to serve on that committee?
Mr. Fruehauf. I was asked to serve on the committee.
Mr. Kennedy. By whom ?
Mr. Fruehauf. I don't recall at the present time, Mr. Kennedy.
Mr. Kennedy. Did you and Mr. Seymour get together and decide
who would serve on the committee, or how was it arranged?
Mr. Fruehauf. Well, I believe that is a fair answer.
Mr. Kennedy. Then, did you in turn request Mr. Beck to come on
the committee or serve on the committee ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2199
Mr. Fruehauf. Yes, sir. .
Mr. IvENi^EDY. And how often after your committee came nito
operation, how of ten did you meet then ?
Mr Fruehauf. I would say that we met at least once a month and
sometimes oftener, and sometimes it was difficult to arrange meetnigs
because of Mr. Beck's busy schedule and also, Mr. Seymour and my-
self were both doing a great deal of travelmg. ,
Mr I{jDNNEDY. What sort of matters were you discussmg i
Mr Fruehauf. Connnon-interest problems, such as uniform lengtli
and weights and all measures affecting the trucking industry.
Mr. I^NNEDT. Was it also to try to encourage certain legislation in
Congress? Was that one of the purposes of the committee?
Mr. Fruehauf. That is correct. .
Mv. Kennedy. And encourage certain activities on the part ot the
executive branch of the Government?
Mr. FRUimAUF. Yes, sir. • u i
;Mr. Kennedy. Certain programs on the part of the executive branch
of the Government ?
Mr. Fruehauf. Yes, sir. -, ., ,r -r. i. £
Mr. Kennedy. Now, during 1953, as I understand it, Mr. I ruehauf,
a proxy fight occurred in your trailer company, is that right?
Mr. Fruehauf. Yes, we were in a difficult proxy battle for the con-
trol of our company ; a company that my father founded.
Mr. Kennedy. What does your company do, exactly ?
Mr. Fruehauf. We manufacture truck trailers for the trucking
industrv. i o^ i. o
Mr. Kennedy. And you have plants all over the United states i
Mr. Fruehauf. Yes, we have 16 manufacturing plants, and we have
80 factory sales and service branches.
Mr. Kennedy. Are you one of the largest m the country?
Mr. Fruehauf. Yes.
Mr. Kennedy. How many employees do you have?
Mr. Fruehalt^. I would estimate somewhere between thirteen and
fourteen thousand, Mr. Kennedy. , . air ^ j
Mr. Kennedy. Do you know what union the majority are affiliated
with? ■ , . • V u
I^Ir. Fruehauf. Well, I don't thmk that there is any majority be-
cause I think to my knowledge we have upward of 100 separate labor
contracts.
Mr. Kennedy. With different unions ?
Mr. Fruehauf. Yes, sir. ,
Mr. Kennedy. Is the teamsters one of those unions ^
Mr. Fruehauf. A very small part. We have contracts with them
covering drivers and I don't know— I suppose it would be 150 or 200
^^Mr. Kennedy. Out of all of your employees, only 150 or 200 of them
are associated with the teamsters ?
:Mr Fru-ehauf. Yes, it could be a few more one way or the other.
Mr. Kennedy. Now, your trailers are then sold to trucking com-
panies, is that right ? . . i ^ i
Mr. Fruehauf. That's right and also to private industry, such as
the grocery chains and the oil companies and so forth.
Mr. Kennedy. You just make the trailer itself, and you do not make
the power unit?
2200 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Fruehaitf. No, not the power units that pull them.
Mr. Kennedy. You just make the trailer?
Mr. Fruehauf. That's right.
Mr. Kennedy. Now, going back to the proxy difficulty that you had
in 1953, will you describe that a little bit more to the committee?
Mr. Fruehauf, Well, when this raider bought a large block of
stock in Fruehauf Trailer Co., naturally they received a large amount
of publicity.
Mr. Kennedy. What was the name ?
Mr. Fruehauf. Mr. George J. Kolowich.
Mr. Kennedy. Where is he from ?
Mr. Fruehauf. Detroit. And that received a lot of publicity, and
at one of the meetings of the Independent Advisory Committee, Mr.
Beck asked me how this came about and how did this gentleman hap-
pen to buy this block of stock. I told him that there was a period of
about 2 or 3 days before he purchased this stock that if I had had some
financial institution who would have stood in between us, that we
could liave purchased the stock and distributed it to the employees.
At that point, he said, "Well, why didn't you call me ?"" And I said,
••'It never occurred to me to call on you."
Mr. Kennedy. So what occurred after that?
Mr. Fruehauf. Months after that we learned that Mr. Kolowich
and a group that he had associated with, were attempting to work
down the pi'ice of Fruehauf stock, selling it short and what have you
in order to buy another large block at a very low or attractive price.
At that point, after having canvassed a number of financial institu-
tions, I went back to see Mr. Beck and told him that we would like to
purchase $11/4 million of Frueliauf stock to support tlie market.
Mr. Kennedy. "Wliat did he say to that ?
Mr. Fruehauf. Well, my best recollection is that that was some
time in September, Mr. Kennedy.
Mr. Kennedy. September of 1953 ?
Mr. Fruehauf. 1953, and he informed me that he would have Mr.
Fred Loomis and Mr. Simon Wampokl, his attorney, come east and
look into the matter. I believe the next meeting that took place was
somewhere in the middle of October, in Mr. Beck's office.
At that meeting, there was Mr. Beck and Mr. Loomis and Mr.
Wampokl, and Mr. Landa — and I w^ill identify him, he is my attorney.
Mr. Kennedy. What is his first name?
]\Ir. Fruehauf. Alfons Landa.
Mr. Kennedy. Is he a Washington attorney ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Go on.
Mr. Fruehauf. And so the loan was granted to the foundation
that day.
Mr. Kennedy. You will have to explain that a little bit. The foun-
dation was what ? Will you explain the connection ?
Mr. Fruehauf. The Koy Fruehauf Foundation is a charitable foun-
dation.
Mr. Kennedy. What was the value of the foundation at that time?
Mr. Fruehauf. Somewhere between sixty-five and one hundred
thousand dollars, Mr. Kennedy.
Mr. Kennedy. So that the teamsters made the loan to the founda-
tion?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2201
Mr. Fruehauf. Yes. ^i . ug
Mr. Kennedy. For the foundation to purchase the stock <
Mr. Ke™edy.* And then who signed the note to the teamsters, or
what arrangements were made for that? ^ ■■ -i ir
Mr. Fruehauf. Mr. Landa and myself both guaranteed the obli-
^\ii\^kENNEDY. What were the arrangements on the note, for what
period of time ? . . j. • j. *.
Mr FRUEH\ur. The note was for 5 years, at 4 percent interest.
Mr. Kennedy. And you and Mr. Landa went on as guarantors, did
you not ?
]\Ir. Fruehauf. That is correct. p .i <• i ^•
Mr. Kennedy. Now, the purpose of the loan was for the toundation
to purchase the stock?
Mr. Fruehauf. Correct. , .., ^i ^ i j
Mr. Kennedy. And this was during the proxy battle that you had
with this other group, is that right?
Mr Fruehauf. That is correct. . i u ww u f
Mr. Kennedy. And this deal was consummated about October ot
1953?
Mr. Fruehauf. Yes, sir. ^ .^ ^ ^
Mr. Ivennedy. And you had a meeting over here at the teamst«i
headquarters ?
Mr. Fruehauf. Yes, sir. ^i tj ivr
Mr. KENNEDY. Now, at that time, or subsequently, did you or Mi.
Landa make any oifers to Mr. Beck to pay him for what he had donei
Mr. Fruehauf. I never made any offers to Mr. Beck.
Mr. Kennedy. Were there any requests made by Mr. Beck ot you
after that?
Mr. Fruehauf. No, sir.
Mr Ivennedy. Did Mr. Beck ever make any requests tor any ta^
vors of you, after this loan was made by the teamsters of $1.5
million ?
Mr. Fruehauf. Oh, yes. ^ .. n , • .r^-. i -p
Mr. Kennedy. Specifically, Mr. Fruehauf, did he m 19o4 ask tor
you to loan him $200,000?
Mr. Fruehauf. Yes, sir. , . • ^- ^ a
Mr. Kennedy. Did you understand that he was being investigated
by the income-tax people and he needed $200,000 ?
Mr. Fruehauf. No, sir.
Mr. KJENNEDY. You did not ?
Mr. Fruehautf. No. ^^ ^^^ tit i •
Mr. Kennedy. When he said he needed $200,000, did he explain
what he needed it for ?
Mr. Fruehaut'. No, sir.
Mr. Kennedy. He did not mention it at all ?
Mr. Fruehauf. No, sir. . i • u i
Mr. Kennedy. Did you ask him why he did not go to his bank
and borrow the $200^000 ?
Mr. Fruehauf. No, sir.
Mr. KENNEDY. Now, Mr. Fruehauf, he ]ust called you or he came
to see you or what happened ?
2202 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Fruehauf. Either Mr. Beck or Mr. Wampold called me and I
am not positive which one, and at that point, Mr. Wampold came on
to see me and had a meeting with Mr. Landa and myself.
Mr. Kennedy. You did not say to him, "What do you need $200,000
for?"
Mr. Fruehauf. I believe Mr. Wampold gave the explanation that
he had properties and so forth that he wanted to liquidate, but he
did not want to do it at the present time.
Mr. IvENNEDY. AVhat did he need the $200,000 for ?
Mr. Fruehauf. I don't know.
Mr. Kennedy. You did not raise that question with him ?
Mr. Fruehauf. No, sir.
Mr. Kennedy. Did you discuss with him why he just did not go to
the Seattle First National Bank and raise the $200,000 ?
Mr. Fruehauf. No, sir.
Mr. Kennedy. You never discussed that at all ?
Mr. Fruehauf. No, sir.
Mr. Kennedy. You were not interested ?
Mr. Fruehauf. Well, we never discussed it, Mr. Kennedy.
Mr. Kennedy. You just never discussed it?
Mr. Fruehauf. That's right.
Mr. Kennedy. Did you give him the $200,000 ?
Mr. Fruehauf. Well, I didn't have the $200,000 personally, because
I was still involved in this proxy fight that you have spoken of earlier.
Mr. Kennedy. This was, you said, in about the middle of 1954?
Mr. Fruehauf. Yes.
Mr. Kennedy. ^Y\mt did you do?
Mr. Fruehauf. Well, Mr. Landa made several attempts to place
the loan with financial institutions.
Mr. Kennedy. How did Mr. Landa get in on it?
Mr. Fruehauf. Because he was in on the meeting with Mr. Wam-
pold and myself. One day in visiting on the phone with Mr. B. M,
Seymour, I liappened to mention to him we were attempting to place
this loan and lie volunteered that he thought that he could place the
loan with the Manufacturers Trust Co. in New York.
Mr. Kennedy. ^^Hiat was that again ?
Mr. Fruehauf. Mr. B. M. Seymour of Associated Transport.
Mr. Kennedy. What is the Associated Transport ?
Mr. Fruehauf. Tliat is a truck line.
Mr. Kennfj)y. In New York City?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. And did you call him ?
]\Ir. Fruehauf. Well, I talked to him frequently because he was on
the Independent Advisory Committee and also, he was a large cus-
tomer of ours.
Mr. Kennedy. AVhat did you say to him about the $200,000?
Mr. Fruehauf. I just mentioned to him that we were attempting
to place tlie loan with various banks.
(At this point, Senator Mundt entered the hearing room.)
Senator I\-es. I would like to raise one question. Had it dawned on
you at any time up to now that Dave Beck might not be reliable?
Mr. Fruehauf. Well
Senator Iat^s. I do not mean up to this time. I mean up to the
second loan, or this loan of $200,000 was involved.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2203
Mr Fruehauf. I would answer this way, Senator, that as near as
I knew Mr. Beck was a hijjlily respected orentleman.
Senator Ives. That is what I wanted to find ont. In other words,
you regarded liim when you o-ot tlie $11/2 milhon and when you loaned
the $200,000, as an lionorable man, did you not?
Mr Fruehauf. I was invited to a large dinner
Senator Ives. That does not make a man honorable. 1 ou had no
reason to douht him in any way, sliape, or manner, or doubt his niteg-
ritv up to then ? . .
Mr Fkueiiaitf. No. Relative to the dinner I was going to explain
that at Eric Johnston's dinner in the spring of 1954, there was a large
gatheiing including a lot of public figures who extolled the virtues of
Mr. Beck. . , ^ . -r^ • t 1 ^ ? ^
I rememWr distinctly reading about Mr. Eric Johnston s coininents,
I believe this was the close of the evening, that if he had a ticket to
Heaven and Mr. Beck did not have one, he would tear his up and go
to hell with him.
Senator Ia-es. That is pretty good evidence.
Thank you very much.
Senator Mundt. Mr. Fruehauf, I came a little late, and you have
been mentioning a Landa or Landon and I am not sure of the name.
Could you identify him so that I could follow the testimony a little
better?
Mr. Fruehauf. I dichi't hear the question.
Senator Mundt. You have been talking about a Landa or some-
body. Is he a partner of yours ?
Mr. Fruehauf. Mr. Alfons Landa is our Washington attorney.
Senator Mundt. He is an attorney here in Washington?
Mr. Fruehauf. Yes, sir.
Senator Mundt. Representing your company?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Now, after Mr. Beck came to you, or Mr. Beck
talked to you and Mr. Simon Wampold met with you, Mr. Landa at- •
tempted to place this loan, this $200,000 loan, in several banks, includ-
ing some banks here in Washington, D. C, as I understand.
Mr. Fruehaut. That is correct.
Mr. Kennedy. And then you had a conversation with Mr. Bert
Seymour, of the Associated Transport Co. in New York City, and
at that time you discussed with him the fact that Dave Beck wanted
to borrow $200,000.
Mr. Fruehauf. That is correct.
Mr. Kennedy. Did he say he would be able to get the $200,000
for Mr. Beck?
Mr. Fruehauf. He stated that it was his opinion that he thought
he could place the loan with the Manufacturers Trust Co.
Mr. Kennedy. What occurred then?
Mr. Fruehauf. A day or two later, Mr. Seymour phoned me and
said that the loaning officer, the chief loaning officer that he did busi-
ness with, was away on an extended vacation and he offered to loan
the money through the Brown Equipment Co., which is a subsidiary
of the Associated Transport Co.
Mr. Kennedy. He offered to what?
Mr. Fruehauf. To loan the money to Mr. Beck through the Brown
Equipment Co., which is a subsidiary of the Associated Transport Co.
2204 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Now, was that done ?
Mr. Fruehauf, Yes, sir.
Mr. Kennedy. And the money went directly from tlie Brown
Equipment Co. to Mr. Beck ?
Mr. Fruehauf. That is correct.
Mr. Kennedy. Now, did you play a part in that at all ?
Mr. Fruehauf. Yes, at that time Mr. Seymour asked Fruehauf
Trailer Co. to loan $175,000 to Brown Equipment Co.
Mr. Kennedy. What was the reason for that?
Mr. Fruehauf. Well, more or less as an accomodation.
Mr. Kennedy. Why didn't the Fruehauf Trailer Co. loan the money
directly to Mr. Dave Beck?
Mr. Fruehauf. We never had any business transactions with Mr.
Beck.
Mr. Kennedy. What difference would that make?
Mr. Fruehauf. Well
Mr, Kennedy. Why was it necessary to have a business transaction
with him?
Mr. FruehailF. We haven't made a habit of loaning money to
individuals.
Mr. Kennedy. I can understand that, but what you were doing in
fact, was loaning the money to him, was it not ? You were loaning the
money to Brown Equipment Co ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Which in turn was loaning the money to Dave Beck,
so what you were doing was indirectly loaning the money to Dave
Beck.
Mr. Fruehauf. That is right.
Mr. Kennedy. Why could you not have done that directly ?
Mr. Fruehauf. I didn't think it was good business.
Mr. Kennedy. Could you tell me why that would not be good busi-
ness, and doing it indirectly would be good business ?
Mr. Fruehauf. Well, we never have had any financial dealings with
Mr. Beck, and on the other hand we had had a lot of financial trans-
actions with the Brown Equipment Co.
Mr. Kennedy. Did you want to keep this transaction hidden from
the board of directors of Fruehauf or the stockholders ? Is that the
reason you did it in this way ?
Mr. Fruehauf. No, sir.
Mr. Kennedy. Could you give me an idea ? It would not have been
necessary to have had a business dealing with Mr. Dave Beck to loan
him the money directly. What I am trying to get is an explanation
as to why you would loan him the money indirectly, and would not
loan it to him directly. That is Fruehauf.
Mr. Fruehauf. As I stated before, we never have had any business
transactions with Mr. Beck.
Mr. Kennedy. Wliy was it necessary to have had a business trans-
action with him to loan him $200,000 ?
Mr. Fruehauf. Well, we don't loan money to individuals.
The Chairman. Mr. Fruehauf, you had had a pretty good sized
business transaction with him, had you not, when you borrowed $11/2
million ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2205
Mr. Frtjehauf. Mr. Chairman, that was not the Fruehauf Trailer
Co. That transaction took place between Frnehanf Foundation and
Roy Fruehauf. . . , , .
The C^HAiKiNiAN. Then, you had had business transactions with him.
Mr, Fruehauf. Yes.
The Chairman. You personally had had, through your foundation.
Mr. Fruehauf. AVith the International Teamsters.
Senator Goldw^ater. Mr. Fruehauf, was there any way that Mr.
Beck would have caused your company trouble at that time, throufjh
the imposition of a secondary boycott ^
Mr. Fruehauf. I don't believe so.
Senator Goldw^vter. Was there any way he could have embarrassed
the Brown Transportation Co., or the Brown Equipment Co. ? Could
he have struck the Brown Equipment Co. ?
Mr. Fruehauf. I don't believe so. I say this to my best recollection,
but Mr. Seymour would be the best one to answer this.
I do not believe that Brown Equipment Co. employed any people
in the Teamsters Union.
Senator Goldw^ater. But you employed people in the teamsters
union
Mr. Fruehauf. Yes.
Senator Goldwater. Did you at that time?
Mr. Fruehauf. Yes.
Senator Goldwater. Wliat do you think would have happened if
you had turned Mr. Beck's request for $200,000 down, if you told him
"No"?
Mr. Fruehauf. I have no knowledge on that.
Senator Goldwater. What I am getting at is, Did you ever during
that particular period of the transaction get the feeling that you had
a pistol at your head ?
Mr. Fruehauf. No, sir.
Senator Goldwator. You did not feel that you had to do this be-
cause Mr. Beck could cause you economic difficulties if you did not?
Mr. Fruehauf. No, sir, I looked at it more in the light of an
appreciation, ]\Ir. Senator.
Senator Goldwater. Would you have loaned that amount of money,
say, to anybody else that you knew as well as Mr. Beck ?
Mr. Fruehauf. Well, Mr. Beck was responsible for saving the
corporate life of the Fruehauf Trailer Co., and so I had reasons.
Senator Goldwater. I can appreciate that. Mr. Chairman, all
I am trying to bring out is that the other day when the vice president
of Anheuser-Busch was here, and now with Mr. Fruehauf in his
capacity with another big company, I have had the feeling that these
gentlemen are a little reluctant to come right out and say that it was
a case of either do it or suffer the consequences. I know that Mr.
Beck is in a position to do the Fruehauf Trailer Co. a lot of damage if
he wanted to.
From what we have found out about him during these hearings, it
is within the realm of possibility that he might do that.
Now, I would just like the witness to feel and I wished that Mr.
Wilson had felt free, to unlimber and tell us what he honestly feels
about the transactions.
^[r. Fruehauf. There was no pressure put on us whatsoever, Mr.
Senator.
2206 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Goldwater. And you don't feel that there would have been
any pressure?
Mr. Fruehauf. Well, it is difficult to say today what I would have
felt back there, because we were in entirely different conditions. I
repeat, at thnt time Mr. Beck was a highly respected gentleman.
Senator Goldwater. I can appreciate your feeling of friendship for
him because of the fact he helped your company, but I just had the
feeling that possibly that pistol-at-the-head experience might have
existed, and if it had I wanted you to feel free to tell the committee
that it did exist.
Mr. Fruehai^f. If it had I would be very happy to tell you about it.
Senator Goldwater. Thank you very much.
Senator Mundt. Mr. Fruehauf, did you or your company become
cosigners of the note that Mr. Beck made out to the Brown Equip-
ment Co. ?
Mr, Fruehauf. After the loan was transferred to the Manufac-
turers Bank, Mr. Landa and I became cosigners.
Senator Mundt. You and Mr. Landa ?
Mr. Fruehauf. Yes.
Senator Mundt. You became cosigners ?
Mr. Fruehauf. Yes, sir.
Senator Mundt. Now, the Brown Equipment Co. made the loan
in the first instance?
Mr. Fruehauf. Yes, sir.
Senator Mundt. And then they sold the note to the Manufacturers
Trust Co., did you say ?
]\Ir. Fruehauf. I believe the procedure that took place was that
Mr. B. M. Seymour was the maker of the note at the Manufacturers
Trust Co., and we gave a note to him and he in turn paid off the
Brown Equipment and they in turn paid off the Fruehauf Trailer
Co.
Senator Mundt. You and Mr. Landa became cosigners at the time
tlie note was transferred by the Brown Equipment Co. to the bank ?
Mr. Fruehauf. That is correct.
Senator Mundt. Would it not have been just as much in good
keeping and just as proper had you made the loan directly to Mr.
Beck, as to become a cosigner of the note ? It seems to me that it is
6 of 1 and half a dozen of the other.
Mr. Fruehauf. Well, do I get your question correctly. Senator?
In other words you mean that the Fruehauf Trailer Co. would make
the loan with Mr. Landa and I as cosigners ?
Senator Mundt. No ; it seems to me that you might just as well have
loaned the money to Mr, Beck directly as to go through the Brown
Equipment Co., and then become the cosigner with Mr. Beck of the
note.
Mr. Fruehauf. I would have gladly loaned the money to him per-
sonally if I had not been still involved in this proxy fight.
Senator Mundt. I thought that you had answered a question earlier
than you did not think it would be good business or something of that
effect, to make a loan directly with Mr. Beck.
Mr, Fruehauf. I say that is a reasonable assumption.
Senator Mundt. Accepting it as a reasonable assumption, it seems
to me whatever logic made you come to that conclusion, would have
also applied to the signing of the note as a cosponsor and cosigner,
IMPROPER ACTIVITIES IN THE LABOR FIELD 2207
if there were valid reasons why you did not want to loan the money
directly, other than the fact that you might not have had the money
at that time, or vou were involved m this proxy hght. ,
Mr Fruehauf. Mr. Senator, I think that you are confusing the
corporation and an individual. What a corporation does, and what
an individual does, is two different things. ,
Senator Mundt. In other words, you would cosign the note as an
individual, and not involving the credit of the company^
Mr. Fruehauf. That is correct. 1,4. 4.1 *.
Senator Mundt. I must have misunderstood you. I thought that
you said that the Fruehauf Trailer Co. became a cosigner.
Mr Fruehauf. No, sir. ^ , ^
Senator Kennedy. As to that $175,000, was that a personal or cor-
poration loan to the Brown Co. ? . m ^^ nr. +^ fi.o
Mr. Fruehauf. That was from the Fruehauf Trailer Co. to the
Brown Equipment Co. .- i q
Senator Kennedy. That was a corporation loan^
Mr. Fruehauf. Yes, Senator Kennedy. , ,1 , i . cuor. nno
Senator Kennedy. And that money, or at least that plus $25,000
then went to Mr. Beck himself, did it not?
Mr Fruehauf. Yes, sir.
Senator Kennedy. That went to Mr. Beck personally, as you say,
in appreciation for the fact that the teamsters, and that is the word
you used, helloed out the Fruehauf Co. during their proxy hght?
Mr. FrIjehauf. Well, I would say that was the reason we considered
^'^Semftor ^Kennedy. You were not under the impression that this
money was being loaned to the teamsters, and you were under the
mipression it was being loaned to Mr. Beck?
Mr. Fruehauf. That is correct.
Senator Kennedy. Now, Mr. Beck had not loaned you personally
$1,500,000, but the teamsters had?
Mr. Fruehauf. That is right. ,
Senator Kennedy. Why do you think it is proper then, or why
should you show your appreciation to Mr. Beck for loaning you
teamsters money and not his own money, by you encouraging the
Brown Co., and being a supporter of a loan to Mr. Beck personally^
You are thanking him for doing something with the teamsters money
and giving it to him personally. ,
Mr. Fruehauf. Well, I would say at this time one would consider
that Mr. Beck was the teamsters union.^ ,.-01 ..i ..
Senator Kennedy. You considered Mr. Beck was the teamsters
union 'i
Mr. Fruehauf. Yes, sir. . ,, t^ i
Senator Kennedy. In other words, whether it was Mr. Beck per-
sonally or the teamsters' money, there wasn't a very clear distinction
made in your mind ? 1 j- ..• ^- 4-1.
Mr Fruehauf. Oh, yes, there was a very clear distinction there
between the association and Mr. Beck personally. But I believe the
loan was made because of Mr. Beck's efforts on our behalf.
Senator Kennedy. Do you think it was proper for Mr. Beck or
the teamsters to loan you that money ?
89330— 57— pt.
2208 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Fkuehauf. Well, I think it was a good loan, and tliey had
adequate collateral.
Senator Kennedy. Do you think it was proper for you to loan the
money to Mr. Beck or for the Brown Co., with your encouragement?
Mr. Fkuehauf. Yes, sir.
Senator Kennedy. It was not a business loan but it was a gesture of
appreciation, because he used the money for which he was a trustee
in a sense, the teamsters' money. Then in repayment to him, he
benefited by the use of the money to the extent of securing a loan
which obviously he could not secure from a bank, to the tune of
$200,000.
Now, that would not be permitted in most business relationships,
would it^
Mr. Frueiiauf. The loan, I repeat, Mr. Kennedy, was destined for
the Manufacturers Trust Co., and the loan to the Brown Equipment
was just a matter of acconunodation.
Senator Kennedy^. The only j^oint I wanted to make, and I do not
want to labor it, was this: You loaned him $200,000 personally in
appreciation for the fact that he extended to your company $1,500,000,
not of his own money, but of the teamsters' money.
Mr. Fkuehauf. Yes, sir.
Senator Kennedys So you were thanking him for the manner in
which he handled mone}" over which lie was a trustee and it does not
seem to me to be completely proper. It seems to me the thanks were
due to the teamsters and not to Mr. Beck.
Mr. Fkuehauf. I doubt whether we could have secured the loan
without Mr. Beck's approval.
Senator Ives. I would like to ask Mr. Fruehauf a couple of ques-
tions, and one question may do the job.
How do these loans stand today ?
Mr. Fkuehauf. They are all paid off. Senator.
Senator I\tes. Which way?
Mr. Fkuehauf. Everything.,
Senator Ives. $1.5 m'illion, with interest, and the $200,000, with
interest?
Mr. Fkuehauf. Yes, sir.
Senator Ives. Thank you.
Senator Curtis. When was the $200,000 loan paid off ?
Mr. Fruehai'f. To mv best recollection, it was paid off' in the spring
of 1955.
Senator Curtis. When was it made ?
Mr. Fkuehauf. In the summer of 1954.
Senator Curtis. What rate of interest did it draw ?
Mr. Fruehauf. At the rate of, I believe, the rate of interest was 4
percent.
Senator Ctt?tis. Were there any other instances wliere the teamsters
loaned money to you or to vour enterprises, besides this $1.5 million
loan?
Mr. Fruehauf. No, sir.
Senator Curtis. You have acquired additional companies in the
last few years, have you not ?
Mr. Fruehauf. Yes, sir.
Senator Curtis. Has Mr. Beck or tlie teamsters in any way been
involved in any of those purchases ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2209
Mr. Fruehauf. No, sir.
Senator Curtis. And they have furnished no funds tor it {
Mr. Fruehauf. No, sir. .,,13
Senator Curtis. Are Mr. Beck or the teamsters stockholders m
your company ?
Mr. Fruehauf. Not to my kno^Yledge.
Senator Curtis. That is all. . -, . t^ j 5
Senator Mundt. I think that you answered benator Kennedys
question by saying that the reason you felt a sense of appreciation to
Mr Beck for loaning you $1,500,000 of the teamster funds, aiid that
vou felt appreciative enough to be interested in loaning him per-
sonally $200,000, was because you felt that Mr. Beck was really the
teamsters union, and that it was consequently Mr. Beck s decision
that you got the $1,500,00. Is that what you said ?
Mr. Fruehauf. Yes, sir.
Senator Mundt. Well, I would say as a member of this committee
who had been following Mr. Beck's hnancial activities for some time,
that I think you were indulging a perfectly valid assumption.
Mr. Kennedy. Now, you loaned this $200,000, or you loaned
$175,000, is that right?
Mr. Frueiiaui\ Yes, sir.
Mr. Kennedy. To the Brown Equipment Co. ?
Mr. Fruehauf. Yes, sir. . xi tj
Mr. Kj:nnedy. Was there any interest on that loan to tlie iirowii
Equipment Co. ? .
Mr. Fruehauf. The note that the Brown Equipment Co. gave
called for interest, but to my knowledge they never paid any interest.
Mr. I^nnedy. You said something about that this was for a bank
loan, something to do with the bank ?
Mr. Fruehauf. I don't quite follow you. „ , . 1 a
Mr. Kennedy. Was there a bank involved m this at all, this loan?
Mr. Fruehauf. Well, the loan originally was headed for the Manu-
facturers Trust Co. And the Brown Equipment Co. and the Frue-
hauf Trailer Co., that was just an interim operation.
Mr. Kennedy. That transaction was in June of 1954?
Mr. Fruehauf. Yes, sir. ^i i 1 9
Mr. Kennedy. And Avhen finally did the loan come from the bank '.
Mr. Fruehauf. Some time in December.
Mr. Kennedy. Of 1954?
Mr. Fruehauf. Yes, sir. ^ . , t <? ii
Mr. Kennedy. AMiat was the delay in gettmg the loan from tlie
bank? , ,. , r. 1
Mr. Fruehauf. I would say that probably because no one expedited
Mr. Kenx].:dy. Tell me this: A^^len was the note of Dave lieok due
to the Brown Equipment Co. ? , . ,
Mr. Fruehauf. You have to ask Mr. Seymour tliat. 1 don t iiave
any recollection on that. _ , , ,
Mr. Kennedy. Tell me this: AMien was the note from the l.rown
Equipment Co. to Fruehauf Trailer Co. due?
Mr. Fruehauf. It was due within 6 months.
Mr. Kennedy. Were they able to pay that back to you ?
Mr. Fruehat'f. Yes.
2210 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. They were able to ?
Mr. Fruehauf. Yes.
Mr. Kennedy. To enable them to pay it back, wasn't that the rea-
son that the loan was secured from the bank, in December of 1954?
Mr. Fruehauf. Well, that is where the loan was supposed to go in
the first place.
Mr. Kennedy. Wasn't the problem that Dave Beck was supposed to
pay this money back by December of 1954, and he could not pay the
money back, and so therefore all of these other transactions had to
take place, which ended up in borrowing $200,000 from the Manu-
facturers Trust Co. ? Isn't that right ?
Mr. Fruehauf. Well, that I do not recall, Mr. Kennedy.
Mr. Kennedy. Did you not go on a note in December of 1954?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. That is number one ; and you went on a note to the
Manufacturers Trust Co. in December of 1954 for $200,000?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. At that same time, the Brown Equipment Co. had
not been able to pay you back $175,000 due you, is that right?
Mr. Fruehauf. That is right.
Mr. Kennedy. So there was a casual connection between the two,
was there not, that you were aware of ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Didn't it all date back to the fact that Dave Beck
did not have the money to pay his note ?
Mr. Fruehauf. I believe that would be a reasonable assumption.
Mr. Kennedy. Did you not know that that was the situation at
that time ?
Mr. Fruehauf. No.
_ Mr. Kennedy. Were you not the one that was carrying out the nego-
tiations and the discussions with Dave Beck ?
Mr. Fruehauf. Well, after negotiations were made with Brown
Equipment, I was more or less in the background, Mr. Kennedy.
Mr. Kennedy. Did you not have discussions with Dack Beck in
which he stated that he would not be able to pay this money back at
that time ?
Mr. Fruehauf. I had no discussions with Mr. Beck at all.
Mr. Kennedy. You did not ?
Mr. Fruehauf. No.
Mr. Kennedy. You had none ?
Mr. Fruehauf. No.
Mr. Kennedy. How did you learn that he would not be able to pay
the money back ?
Mr. Fruehauf. Well, if anybody told me, it would have to be Mr.
fceymour.
Mr. Kennedy. I would think, Mr. Fruehauf, that when the note
was due from the Brown Equipment Co. to the Fruehauf Trailer Co.,
that you would have said, "I want to collect my money" ; would you
not?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. So you went there and they said they did not have
the money and that must have been the second thing that happened.
Mr. Fruehauf. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2211
Mr. Kennedy. Then did they not tell you about Dave Beck, who
would not be able to pay this off? ,t xr i fV.o
Mr Fruehauf. Well, to my best recollection, Mr. Kennedy, the
negotiations on the loan to the bank started early in December.
Mr. Kennedy. In December?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. That is correct. -, . -o t?^ ;,.
Mr. Fruehauf. Long before the note was due from Brown H^quip-
ment Co. to Fruehauf Trailer Co. . . ,
Mr. Kennedy. It was due in 6 months, was it not «
Mr. Fruehauf. Yes, sir.
Mr Kennedy. Well, it was due in December. _ .
Mr. Fruehauf. Well, I think the original note was sometime m mid-
June or maybe the latter part of June. ., ^x ^ ^
Mr Kennedy. Finally you received the loan from the Manufac-
turers Trust Co., or received the money from the Manufacturers
Trust Co. on December 27, 1954?
Mr. Fruehauf. Yes, sir. ,
Mr. Kennedy. So it was at the end of the year, and it was at the
same time Dave Beck had not been able to pay you his money. Did
you not have conversations with Mr. Beck m which he said, I cannot
raise the $200,000 at this time"? .
Mr Fruehauf. No, sir ; I had no conversations with Mr Beck.
Mr' Kennedy. Did he not say he could sell his house to the union
and he would be able to get it then and pay you back ?
Mr K^E^NED^'Did you ever understand at that time that he was
be?no-' invesSlS^d by the tax people, and that the $200,000 was put
bachn the union, and he said then, "I boiTOwed some money and I
am putting $200,000 back as a downpayment on the money that i Have
been taking" ?
Mr. Fruehauf. No, sir. -, .^ . ..i . ^^7
Mr. Kennedy. He never discussed that with you at all i
Mr ISrN'^DY^^'And when he could not raise the $200,000 by the end
of the year, he did not tell you he was going to have to sell his house
to the union and then he would pay you back after that happened i
Mr Fruehauf. I had no discussions with him at all.
Mr". Kennedy. Did Mr. Simon Wampold have any conversations
with you in that connection ?
Mr. Fruehauf. No, sir. , nr -r^ i -p v-^ c,+^,^
Mr Kennedy. Mr. Chairman, could we ask Mr. Fruehauf to step
aside and put Mr. Seymour on to bring out the rest of this loan^
The Chairman. Are there any other questions i
You may step aside for a few moments, and you may be recalled.
Mr. Kennedy. Mr. Burt Seymour.
The Chairman. Will you be sworn, please? , „ . , . , i •
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth and nothing
but the truth so help you God?
Mr. Seymour. I do.
2212 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF B. M. SEYMOUR, ACCOMPANIED BY HIS COUNSEL,
MORTIMER ALLEN SULLIVAN
The Chairmax. Will you state your ]iame and your place of resi-
dence and your business or occupation ?
]Mr. Seymour. B. jM. Seymour, president of the Associated Trans-
port, New York City.
The CHAiR]\rAx. Where is your place of residence?
Mr. Sf.ymour. I live in Lyiichfield County, Conn.
The Chairman. You have counsel with you ?
Mr. Seymour. Yes, the gerieral counsel of the Associated Transport.
The Chairman. Counsel, will you identify yourself?
Mr. Sullivan. My name is Mortimer Allen Sullivan, and I am gen-
eral counsel for Associated Transport and my offices are at 530 Wall-
bridge Building, Buffalo, N. Y.
T am a member of the bar of the State of New York.
The Chairman. Thank you very much.
All right, proceed.
Mr. Kennedy. Now, your company is Associated Transport Co.,
Mr. Seymour ?
Mr. Seymour. Yes, sir.
Mr. Kennedy. And what is their business ?
^Ir. Seymour. The business of hauling freight by truck.
Mr. Kennedy. Do you have some subsidiaries, also?
Mr. Seymour. Several.
Mr. Kennedy. What are their names ?
jNIr. Seyseour. Well, there are 5 or 6 of them. One is the Brown
Equipment Manufacturing Co. The others are Conger Realty Co.,
New England Realty Co. and there is the Gem Packing Co. and the
Warehouse Cos. and things of that kind.
Mr. Kennedy. Including all of your companies, how many em-
ployees do you have, approximately ?
]\Ir. Seymour. I would say about 5,000.
Mr. Kennedy. And are any of tliem members of the Teamsters
Union ?
Mr. Seymour. I would estimate perhaps half of them.
Mr. Kennedy. About 2,500 of them are membei^ of the Teamsters
Union ?
Mr. Seymour. Yes, sir.
The Chairman. One of your companies is a trucking company. Is
it Associated Transport Co. that is the trucking company ?
Mr. Seyimour. Yes, sir.
The Chairman. And the Brown Equipment Co. does what?
Mr. Seymour. Well, until 1953, if my recollection is correct. Brown
was engaged m the business of building trailers and tractors and about
that time Brown's activities were disposed of and the trailer business
went to the Fruehauf Trailer Co.
Since that time they have primarily been engaged in the business of
™?,V^^7,^ ^^^'^^ ^'^^^ ^^ connection with maintenance of equipment.
The Chairman. So the trailer interests of Brown Equipment Co
were sold to the Fruehauf Trailer Co. in 1953 ?
Mr. Seyiviolti. That is correct.
The Chairman. Now, in 1954, were you approached bv Mr. Roy
Fruehauf about making a loan to Mr. Dave Beck ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2213
TTnninmentCr could do it ?nd it was tlie only company that was in
a rosKuo ente. iX a loan because of other arrangements, financing
"ins beSd to Brown, and m. -collection is that I told M.
Fruehauf that he would have to go ahead and lend a hand m con
Son with providing the nvmey 'fl'^^* '-"If^o- h,s tunv.shmg
-r\^™=^rh'rs>;^Sf?:"^uKra, give you the
!l0rrtl,^ff.^tr^'xis^^^
tell you ™i ^^'™"' , :j „g (liat I remember that I asked him
given tlie $200,°00 an it seems t^^^^^^ Fruehauf and I have been
SoJeV'tsltated t^"timtl « ^e said he wanted to keep
%V"™rsVr"only gave you $175,000 instead of the
$200,000?
Mr. Seyimour. Yes, sir. . . ^ . • ,li i^„„ 9
Mr. Kennedy. So you would continue your interest m the loan (
Mr. Seymour. Yes, indeed. . f4„^a«
Mr. Kennedy. Did you have a conversation with him at that time ?
If he could oive you $175,000, why could he not give the $1< 5,000 di-
rectly to Dave Beck?
Mr. Seymour. No, I didn't.
Mr. Kennedy. Did that not occur to you that that was a little
'^Mr'SEYMOUii. I think the reason that probably that conversation
did not come up, probably the conversation was by Pl^^J^^; ;^";\"^.
loubtedly, I probably had my own opinion as to why he had called
<
me
Mr. IvENNEDY. What was that opinion? . .
Mr. Seymour. I just assumed that I, being m a larger town than
he, I iust assumed lie had reasons that he wanted it handled this wa>.
Mr. Kennedy. What did you assume wei-e the reasons?
Mr. Seymour. Just that perhaps it mio;lit be less difficult toi Mi.
Fruehauf to net the loan than for me to get it.
Mr. Kennedy. What would being in a larger town have to do ^Mtn
that?
2214 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Seymour. Well, I think that New York City has several mil-
lion population larger than Detroit, and I know that Mr. Fruehauf
is well acquainted with the bank in Detroit.
Mr. IvENNEDY. That, of course, was not the problem. He had the
money, and he had the $175,000.
Mr. Seymour. I didn't ask him at that time and I really don't
know what his reasons were, other than my opinion of what the
reasons were and they were sort of a nebulous nature and I just
figured for a variety of reasons he wanted me to do it and I had no
objection to doing it if I could.
You must remember, Mr. Kennedy, we have been associated in this
industry committee for some couple of years, by this time, or 2 or
3 years.
Mr. Kennedy. In your experience, is this an ordinary business
transaction where somebody asks you to loan the money to somebody
else, and they will put the money up ?
Mr. Seymour. Very unusual.
Mr. Kennedy. I would think that because it is unusual that per-
haps it would have created a question in your mind, and you might
have said to Mr. Fruehauf, "Why are we handling it this way, or
why do you want me to loan $200,000 to Dave Beck ?"
Mr. Seymour. There is an old saying, Mr. Kennedy, that hindsight
is much better than foresight, and if I knew 3 or 4 years ago what
I know now, and if it would keep me from being here, I certainly
would have asked him.
Mr. Ivennedy. Well, now, to get back to you and your company,
why did you channel the $200,000 to Dave Beck through the Brown
Equipment Co. ?
Mr. Seymour. First, it was the only company that could make the
loan.
Mr. Kennedy. Why couldn't the Associated Transport Co. ?
Mr. Seymour. Because, if the word is correct, we have indenture
arrangements which makes it impossible. The Brown Equipment
Co. was the only unrestricted corporation in Associated.
Mr. Kennedy. But, Mr. Seymour, the Associated Transport Co. at
the same time gave $200,000 to Brown Equipment Co., to loan the
money to Dave Beck.
Mr. Seymour. I could only answer your question because I only
discovered it about an hour ago. Tlie reason based upon the inquiry
made to New York was because notwithstanding that Brown had
several hundred thousand dollars, their variety of bank accounts
were such that it was easier to supply accounts that did not have the
necessary amount, and that is why the checks were made up as they
were, 3 or 4 different amounts.
Mr. Kennedy. That does not answer the question as to why didn't
the Associated Transport Co. loan the money to Dave Beck ?
Mr. Seymour. Because the Associated Transport Co. couldn't.
They were prohibited under our financial arrangements.
Mr. Kennedy. What they did instead then, was to do again, you
people did indirectly what you could not do directly, and you gave
the money to Brown Equipment Co. who in turn gave the $200,000
to Dave Beck.
Mr. Seymour. Mr. Kennedy, I cannot answer your question, be-
cause as I say, I only discovered it about an hour ago.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2215
Mr I^NNEDY. Those are the facts, are they not ?
Mr. Seymour. I thhik that they are.
Mr Kennedy. You have no explanation for them (
Mr. Seymour. No, and the information we get was because it was
the onlv wav it could be done at the time.
Mr irNNEDY. Again this has all occurred on a telephone conversa-
tio^i between you and Roy Fruehauf ? $175,000^ came froi^i Roy Frue-
liauf and went through the Brown Equipment Co., is that correct?
Mr. Seymour. That is right. . ^
Mr. Kennedy. And then went from the Brown Equipment Co.
to the Associated Transport Co. ? ^ ^ _ . , -. .... ■. ■ __
Mr. Seymour. I do not know that that is so, and I think it is so,
based upon what I saw earlier todaj;. f n^ o ^^ 4. A^^a
Mr. Kennedy. Then, the Associated Traiisport Co., 3 or 4 days
earlier, gave $200,000 from the Associated Transport Co. to the
Brown Equipment Co. who then gave it to Dave Beck ^
Mr. Seymour. Mr. Kennedy, I can't answer your q^est on ^
didn't handle it and it was handled by our treasurer and I don t know
why t was handled the way it was and I didn't know it unti today
Mr. I^NNEDY. I would think the people that would l^-^^^ the most
about how this transaction was handled would be Mr. Freuhauf and
Burt Seymour.
Mr. Seymour. I know the loan was made. -,1 . • ,1 _ -^
Mr Kennedy. But why the transaction was handled m the way it
was. 'Could vou summarize how that transaction was handled?
(At this point. Senator Ervin came into the hearing room.)
Mr. Seymour. It was handled on this basis as a result of my con-
versation with Mr. Freuhauf . ,
Mr. Kennedy. Would you tell the committee exactly what
^T^Seymour. That he would reimburse us for the moneys so that
we would not be out the money until such time as ^1^ bank loan cou^^^
be made. My recollection is that the note arrived to my attention
from Mr. Beck about simultaneously with the time the check arrived
*' T^lmUrwi'thin at least a couple of days, as nearly as I can match it
^"^Mr' Kennedy. Would you explain why Brown Equipment Co got
into this at all, and why the $175,000 came from Fmehauf to the
Brown Equipment Co. and then to you, aaid from your people to
Associated and then Associated Transport gave $200,000 back to
Brown Equipment Co., and who m turn gave it to Mr. Dave Beck?
Why was it disguised in this way?
Mr. Seymour. I can't tell you.
Mr. Kennedy. You cannot tell us ?
(The witness consulted with his counsel.) o„.f^^,.
Mr. Seymour. Mr. Sullivan who has checked the transaction,
thinks he has a legal reason for it.
The Chairman. Wiiat do you know ?
Mr. Seymour. That's all I know. Senator.
Mr Kennedy. Mr. Cliairman, I had a chart here which soit of
traces what went on, if you would like to have that.
The Chairman. Does counsel desire to testify on tins point «
2216 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Sullivan. If you care to. It is very simple. Because of an
indenture, Associated Transport could not make the loan, but it had
lar«^e intercompany transactions and frequently
The Chairman. Will you be sworn ''.
Do you solemnly swear that the evidence you shall give before this
Senate Select Committee shall be the truth, the whole truth and noth-
ing but the truth, so help you God ?
TESTIMONY OF MORTIMER ALLEN SULLIVAN
The Chairman. I believe you have already identified yourself for
the record?
Mr. Sullivan. Yes, sir.
The Chairman. Your client said that you had some legal reasons
why the loan was liandled as it was, and you may state that.
Mr. SuLLI^'AN. Mr. Chairman, the Associated Transport as a part
of its financing has a very complicated indenture involving a very
substantial loan.
Because of this indenture Associated would not have been in a posi-
tion to make the loans without making a very complicated transaction
in the form of reporting the loan.
Brown Equipment & Manufacturing Co. is a wholly owned sub-
sidiary and is what in financial parlance in terms of indenture is
known as an unrestricted subsidiary and it is not bound by the terms
of the indenture. There are large intercompany accounts back and
forth between Browii and Associated Transport. At one time or
another, there is several hundred thousand dollars back and forth
because they do business with each other.
So that what happened here was that Associated simply paid to
Brown on account the sum of $200,000 for the purpose of turning
this cash oyer in a more or less unified form to Brown; rather than
Brown taking a long period of time to collect that much cash from
its numerous bank accounts. So it was simply a question of expe-
diting the transaction, and that is the explanation I got today from
our officers in New York, wlien I called not more than an hoiir and
a half ago to find out about this, because it was simply something
that was done by the treasurer of the company in what he thouglit
was the most convenient way of giving BroAvn some immediate cash
that it could write immediate checks for.
The Chairman. As I understand it, and let me see if I am correct.
Brown Equipment Co. was to make the loan, and BroAvn Equipment
Co. did not have that much money in one banlv ?
Mr. Sullivan. Yes, sir.
The Chairman. Is tliat correct now?
Mr. Sullivan. Yes, sir.
The Chairiman. Therefore the parent company, Associated Trans-
port Co., supplied Brown Equipment Co. with the $200,000?
Mr. Sullivan. Yes, sir.
The Chairman. That was charged as a loan, I suppose, to the
equipment company, of a payment on account ?
Mr. Sullivan. It was a payment on account to \\\<^ equipment
company. That is what they tell me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2217
The CiiAiRMAX. Payment on acconnt to the equipment company, so
it would have enouoh"cash on hand to expedite tlie loan without giv-
ing checks on several banks.
Mr. Sullivan. I think they ^ave it on four banks when they gave
it, but they gave Brown the money to reimburse those accounts and
bring them up to an amount wliere they could do it, and it might have
been only two banks, but it was more than one bank anyway.
The Chairman. Do you think that expedited the handling of it?
Mr. Sullivan. They tell me it did, and they gave me that as their
reason, and I asked the Treasury Department.
The CiiAiRi^iAN. There was a bit of urgency about the whole matter,
A\'as there ?
Mr. Sullivan. I don't know al)0ut that, sir, and I didn't know about
the transaction at the time.
Tlie Chairman. All right.
Mr. Kennedy. Mr. Seymour, was there an urgency on this matter
that it had to be done immediately ?
Mr. Seymour. The note from Mr. Beck was received by me and
I can't tell you accurately, but I would assume that I kept it not for
three or four davs, and abont that time the check that I mentioned
before from Fruehauf came in, and I would assume that the check to
Beck probably went out sometime within four or five days from the
receipt of the note.
Mr Kennedy. There are a couple of matters there. Ihe money
went to Dave Beck on June 21, 1954, and the note was signed by Dave
Beck on exactly the same day, so there wasn't a delay.
Mr. Seymouti. That is not my recollection. I know I had the note
ggygj'r^j days.
Mr. Kennedy. I am sorry. You are right. It is June 18, 1954. The
check is June 21, 1954. .
Now the check from Fruehauf arrived in the Brown Equipment Co.
on June 2, 1954. The Brown Equipment Co. then would have $175,000,
so there wasn't any necessity of getting $200,000 from the Associated
Transport. . i i i
Mr. Seymour. I cannot tell you because the last time that we looked
at it, we had a record of the time that the Fruehauf check was de-
posited, but I don't recall the circumstances really. I knew nothing
about what we are talking about until this morning anyway. And I
iust did not know how it had been handled.
Mr. Kennedy. What did Mr. Fruehalf explain to you as being the
urgency, that Mr. Beck needed tliis money ?
Mr. Seymour. I don't recall, Mr. Kennedy, any emphasis on urgency
particularly. . „ ^„ , • i i • x
Mr Kenni:dy. AVliy didn't you wait? If he said he was going to
send the money to the Brown Euipment Co., why didn't you wait
for that money to come in before paying Dave Beck?
Mr. Seymouk. I don't mean to be facetious. Perhaps it was because
I wanted to be sure I was going to get it.
Mr. Kennedy. That is why I am asking. Why didn t you wait un-
til the money came in before you advanced it to Dave Beck?
Mr. Seyimour. I think that I did. I think that the date that you
have is the date of the deposit; is it not?
Mr Kennedy. If that is true, why did you have to loan the
$200,000 from Associated Transport? You had enough money m
there.
2218 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Seymour. There is no question about there being sufficient
funds in all of our companies. The reason of the transfer of funds
was the reason that Mr. Sullivan has just given, and which he just
secured from New York.
Mr. Kennedy. Which is that they needed the money in the Brown
Equipment Co., and you had $1Y5,000 in the Brown Equipment Co. ?
Mr. Seymour. I don't know that that is so, I did not handle it,
and I didn't handle the deposit of the money and I don't remember
when it was received.
Mr. Kennedy. On the $200,000 that the Brown Equipment Co.
paid to Dave Beck, they listed that as an advance to this ACT com-
mittee. Why was it listed in this manner ?
Mr. Seymour. I think that w^as sort of a gratuitous effort on the
part of the j^eople in my company to sort of not advertise the trans-
action.
Mr. Kennedy. For what reason would they want to disguise it,
the people in your company ?
Mr. Seymour. I don't know really, except that I think it was a
transaction that was a little unusual. I think the people in Associated
might consider it so.
Mr. Kennedy. You went through another group of transactions,
also, quite complicated. You will agree that these are fairly compli-
cated.
Mr. Seymour. I think so ; yes, sir.
Mr. Kennedy. In December of 1954, in a loan from the bank.
Would you explain that to the committee ?
Mr. Seymour. Well, the reason that the loan was made at the bank
was, first, because either by intuition or by some other means, and I
can't tell you because it is my recollection that in the conversation
that I had with Mr. Fruehauf sometime perhaps within a month or
so before the loan was negotiated, that there was a question as to
whether Beck's note was going to be paid. In addition to that, I
wanted to go ahead and follow through on it, and it had been started,
and I certainly wanted to go ahead and complete it with the result
that the loan was neogtiated and it was a personal advance to me
which was endorsed by Mr. Landa and Mr. Fruehauf.
Mr. Kennedy. "\'\^iy did you have to go to the bank to get that
money? Wliy didn't it just continue, and why didn't the transaction
just continue as it was ?
Mr. Seymour. Because I wanted to get it out of the company.
Mr. Kennedy. Out of which company ?
Mr. Seymour. Out of Brown. I had hoped, and I know this is
true, I had ho]Ded that the note would have been paid a little earlier
than it was and before the necessity for the bank loan was made.
_ Mr. Kennedy. The Brown Co. was not out any money at that
time.
Mr. Seymour. They were out $25,000.
Mr. Kennfj)y. The Associated Transport Co. was out $25,000.
Mr. Seyisiour. I thought it was the Brown.
Mr. Kennedy. The company that was out a large sum of money
was the Fruehauf Trailer Co., which was out $175,000.
Mr. Seymour. I had told Mr. Fruehauf at the beginning that I was
going to endeavor to place the loan, and I finally did, and I should
have done it earlier, but I didn't.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2219
Mr. Kennedy. I thought you said the reason you wanted to place
the loan was because you wanted to clear up the accounts for Brown
Equipment Co.
Mr. Seymour. I wanted to get Brown out of it, or as you say Asso-
ciated and I wanted to get Fruehauf out of it.
Mr. Kennedy. Did you learn from someone that Dave Beck wasn't
going to pay the note ?
Mr. Seymotjk. That I am positive, I did, somewhere.
Mr. Kennedy. Who would have told you that ?
Mr. Seymour. It wasn't Mr. Beck, because I never mentioned it to
him.
Mr. Kennedy. Do you think Mr. Fruehauf — is your best recollec-
tion that Mr. Fruehauf told you that ?
ISIr. Seymour. I heard his testimony, and he does not recall it, but
1 certainly don't know where else it could have come from.
Mr. Kennedy. Who else went on this note from the Manufacturers
Trust Co.?
Mr. Seymour. Mr. Leon Greenbaum.
Mr. Kennedy. Wlio was Mr. Greenbaum ?
Mr. Seymour. An old friend of mine, and he is chairman of the
board of the Hertz Corp., and he went on it because I asked him to.
Mr. Kennedy. What is the Hertz Corp. ?
Mr. Seymour. The large truck and car leasing company.
Mr. Kennedy. How did you get on that note ? Did you get Mr.
Bert Seymour, Mr. Roy Frueluiuf, Mr. Alphoiise Landa, and Mr.
Greenbaum, all of them to try to get $200,000 for Mr. Dave Beck?
Mr. Seymour. Well, it didn't hardly happen that way, Mr. Ken-
nedy. In the first place I did make the loan personally. In the sec-
ond place, Mr. Fruehauf and Mr. Landa gave me their note for the
same amount of money. When the transaction was being made I was
asked whether or not Mr. Greenbaum would be willing to enter into a
repurchase agreement, which he did. There was a note separate and
apart.
Mr. Kennedy. Evidently the bank wouldn't have accepted it if it
had just been you, Landa, and Fruehauf, plus Dave Beck's note,
Mr. Seymour. I don't think that that is so, although when I was
asked I didn't struggle against doing it, because as it developed it was
not difficult.
Mr. Kennedy. At least they asked for somebody else to come on
with you, is that right ?
Mr. Seymour. Specifically they asked whether or not Mr. Green-
baum would be willing to do it, because I have been associated with him
for the last 25 years.
Mr. Kennedy. Did Mr. Greenbaum understand that this was being-
done for the convenience of Mr. Beck ?
Mr. Seyiviour. He understood it was in comiection with Mr. Beck,,
but he never knew Mr. Beck, and as far as I know he doesn't know him
yet.
Mr. Kennedy. So you got the $200,000 from the Manufacturers
Trust Co., and they gave you $200,000, and you in turn gave that to the
Brown Equipment Co., is that right?
Mr. Seymour. Well, I can't tell you exactly how it was handled,,
other than Fruehauf was paid back their $175,000 and whatever the-
company in our setup was involved was paid back the $25,000.
2220 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. So the mone}^ went to the Brown Equipment Co.
to pay Fruehauf $175,000, and then $25,000 went to the Associated
Transport, and Mr. Beck just continued, is that right ?
Mr. Setmour. If that is the way it was done. The $200,000 was
paid back between the two parties.
Mr. Kennedy. That note was a 3-month note?
Mr. Seymour. That is right.
Mr. Kennedy. Had Mr. Dave Beck paid back the money, or had
he paid tlie $200,000 he owed by the time that 3 months' period was
finished ?
Mr. Seymour. He didn't pay it back, until in part several, or several
Aveeks later.
Mr. Kennedy. What did you do then? Did you have the note
extended from the bank?
Mr. Seyimour. No, we paid it because at this time I had been told
that Beck was going to pay the note.
Mr. Kennedy. Where did you get the money to pay the note to the
bank?
Mr. Seymour. Brown Manufacturing Co.
Mr, Kennedy\ Brov/n Manufacturing Co. then advanced the money
to Mr. Seymour, who then gave the money to the bank?
Mr. Seymour. That is right.
Mr. Kennedy. For $200,000 ?
Mr. Seymour. Yes, sir.
Mr. Kennedy. And then what did Dave Beck do? Did he ulti-
mately pay the money back ?
Mr. Seymour. Yes, he paid it in two amounts, $160,000 something,
and then the balance a couple of months later.
Mr. Kennedy. $163,215?
Mr. Seymour. Something like that.
Mr. Kennedy. On April 11, 1955 ?
Mr. Seymour. Yes.
Mr. Kennedy. Did you understand at that time that he was able
to raise that money because that is the amount that he sold his house
to the Teamsters Union for ?
Mr. Seymour. I didn't know it until I read it in the paper, as a
result of these hearings.
The Chairman. The $163,215 that was paid on this note by Mr.
Beck, do you know or did you know at the time it was proceeds from
the sale of his home to tlie union ?
Mr. Seymour. No, I did not.
The Chairman. Is it in the exact amount?
Mr. Kennedy. It is.
The Chairman. It is in exactly the same identical amount that he
sold his home for.
Mr. Seymour. I didn't know it until later.
The Chairman. The staff advises it is, and I am sui-e it is already
in the record as to what it was sold for.
Mr. Kennedy. Do you want to put this check in the record ?
The Chairman. Mr. Seymour, the Chair hands you what punx)rt.s
io be a photostatic copy of a check in the amount of $163,215, dat^d
April 11, 1955, with a notation on it, "to apply to Dave Beck's note."
Will you examine this document and see if you identify it as a photo-
static copy of the original ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2221
(A document was handed to the witness.)
iMr. Seymoltj. Yes, I do.
The Chairman. It may be made exhibit No. 172.
(The document referred to was marked "Exhibit No. 172'' for ref-
erence and will be found in the appendix on p. 2524.)
Senator Kennedy. I would like to ask the counsel now if this house
was sold to the teamsters for $168,000, and had Mr. Beck built this
house himself ?
Mr. Kennedy. He had built this house, and some of the houses sur-
roundino; this house, himself.
Senator Kennedy. xVnd he had paid for it himself?
Mr. Kennedy. He had not paid for it himself, and some $193,000
had been taken from the union to pay for this house, the swimming
pool, and certain of the other houses that he built in his compound.
Senator Kennedy. That $193,000 to build the house. Had that been
loaned to Mr. Beck by the union, or was it a grant or what was that?
Mr. Kennedy. He had built the house, and then there were repairs
that were done on the house, and there were these other houses built
around it. Then there was a swimming pool, and the total amount of
money that Mr. Beck took from the union during this period of time
to pay for this was some $193,000.
Senator Kennedy. Was that $193,000 taken with the approval of
the executive committee, or was it taken with the knowledge of the
teamsters?
Mr. Kennedy-. No, it was not, and it was not listed as a loan or as an
advance to Mr. Beck during this period of time. It was just taken
and paid to the architect and to the contractor.
Senator Kennedy. Who signed the checks ?
Mr. Kennedy. Mr. Dave Beck and Mr. Frank Brewster.
Senator Kennedy. He received $193,000 to help put this house to-
gether, and then he sold the house for $163,000 to the teamsters?
xMr. Kennedy. Yes. The $193,000 was not only for this house, but
was for 2 or 3 houses in the compound that he has in Seattle. That
is where his relatives live.
Senator Kennedy. The $163,000 was for the whole area?
Mr. Kennedy. No, the $163,000 was received when he sold just his
house to the union.
Senator Kennedy. Does he pay rent to the union ?
Mr. Kennedy. No, the union tendered the house back to him for
him to live in.
Senator Kennedy. In perpetuity?
Mr. Kennedy. I believe so.
The Chairman. All right, proceed.
Mr. Kennedy. Then, on July 5, 1955, Mr. Dave Beck paid $36,785
to you, which in turn was endorsed to the Brown Equipment Co.?
Mr. Seyiviour. Yes, sir.
Mr. Kenni:dy. We have a chart, Mr. Chairman, which sort of sum-
marizes all of these things, unless everybody understands them.
Senator McNamara. I would like to ask the witness, you mentioned
that this was an unusual transaction from Associated to Brown to
Beck, Is that about the sequence, and was the money from Associat-ed
to Brown to Beck?
Mr. Seymour. I think what I meant. Senator, was that the trans-
action was a little unusual, and not in that particular respect.
2222 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator McNamara. I think we all agree with you it is quite un-
usual.
Now, you indicate there was a note of Mr. Beck involved in this
unusual transaction?
Mr. Seymour. Yes, sir.
Senator McNamara. Generally, when there is a note, there is some
security behind it. What was the security in this case ?
Mr. Seymour. The $175,000 that I received from Freuhauf, and
when the bank loan was made, which I should have made earlier than
I did, Mr. Landa and Mr. Freuhauf's guaranty of $175,000 of the
loan.
Senator McNamara, As far as Beck's assets were concerned, none
of them were put on the line at all. The assets were of other people
than he. You knew he was getting this $200,000 loan on a note with-
out putting up any assets for it ?
Mr. Seymour. I don't mean to infer that I was indifferent to it,
but I was satisfied tliat the security that my company had was
adequate.
Senator McNamara. As far as you are concerned, or your company,
it was not an unusual transaction ?
Mr. Seymour. Yes, it was unusual, but the company Avas protected
nonetheless.
Senator McNa^mara. I think it was extremely unusual, when some-
one is getting $200,000 and putting up absolutely nothing for it except
the assets of other people, as you indicated.
Mr. Seymour. I think that I should say this. Senator, that the
relationsliip between Mr. Beck and Mr. Freuhauf and myself in con-
nection with the committee had been very close over a period of
several years, or 2 or ?> years, and I luid the very highest regard for
Mr. Beck and tlie effort that he had made in connection with this
industry connnittee.
Senator McNamara. You think it was high enough to amount to
$200,000?
Mr. Seymour. Well, I wouldn't have done it on my own, if that
is what you are asking.
Senator McNamara. It was quite high, and quite unusual.
The CiiAiRMA?^. All right, Mr. Counsel.
Senator Kennedy. I want to ask the counsel one question.
What was that house assessed for that Mr. Beck sold to the team-
sters for $163,000 ?
Mr. Kennedy. When INIr. Beck received a loan from the Occi-
dental Insurance Co. in 1951, a loan for some $273,000, they appraised
his property, and at tliat time they appraised this home and appraised
it at a value of $100,000.
Senator Kennedy. Thank you.
The Chairman. May I inquire, to get the record straight, is it just
the home, or was that all of his property they appraised at $100,000?
Was it iust tliis individual liome that he sold back to the union?
Mr. Kennedy. For $163,000 ; that is correct.
Senator Curtis. Mr. Seymour, did you enter into this transaction
to assist Mr. Freuhauf (
Mr. SsY^rouR. I did; yes.
Senator Curtis. Did you liave any knowledge that if you said "No"
to it that Dave Beck would learn of your refusal ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2223
Mr Seymour. Well, Senator, it never occurred to nie and I don't
tliink that it would have made any difference. I can be wrong, but
that is my opinion. , , ^ r t^ i 4; »
Senator Curtis. Your sole purpose was to help ^Iv. Freuliaut an<l
not Mr. Beck ?
Mr. Seymour. That is correct. _ . ■ ^, - 1 ^^ .
Senator Curtis. Now, did anyone participate m this loan that was
not in a position to stand to lose if the trucks over the country did
not move? j. o ^
Mr Seyi^eour. No, no one that I know ot, Senator.
Senator Curtis. Everybody that helped dig up this money was
someone who would suffer a loss if there was teamster trouble and
the trucks did not move, is that not right i
Mr. Seymour. No, the reason that the loan
Senator Curtis. I did not ask you for the reason. I said everyone
who participated was someone who was in a position to lose if there
was trouble with the teamsters, and the trucks did not move; is that
not right? . . i w n • uj. u j.
Mr Seymour. I think that your question is undoubtedly nght, but
practically I iust don't believe, and I have a rather intimate knowl-
edo-e of the teamsters imion, and I don't believe that whoever runs
the teamsters union is going to have much to do with what happens to
these autonomous 1,800 or 2,000 unions. We deal with 60 or 70 dif-
ferent locals, and as far I can find out they run their own business.
Senator Curtis. But you do agree that they were all m that posi-
„ a — ^.,,^,-^ T+T->inlr flionvp+if'nllv. that is correct.
of
Mr. Seymoiir. I think, theoretically, that is correct.
Senator Curtis. Has your company assisted Mr. Beck or any
his other officers in raising money in other transactions?
Mr. Seymour. No, sir. 4: ^i ^
Senator Curtis. In any fund-raising dinners, or anything ot that
sort?
Mr. Seymour. No, sir. . ., tt /r • t
Senator Curtis. Did you have any part m the Hoffa memorial
dinner ?
Mr. Seymour. I attended.
Senator Curtis. Did you buy any tickets ?
Mr. Seymour. No, T sat at the head table.
Senator Curtis. And neither you nor your company or any ot your
companies had any part in the financing?
Mr. Seymour. Pardon me again. Senator.
Senator Curits. Neither you nor any of your companies made any
financial contribution to that memorial? ,
Mr. Seymour. If it was so, I wouldn't know, unless it was done
by our vice president in charge of labor relations. I didn't.
Senator CunTis. That is all.
Mr. I^nnedy. Mr. Seymour, the $200,000 from the Manufacturers
Trust Co. that was loaned to you was paid back prior to the time that
you people received the money back from Dave Beck ?
Mr. Seymour. That is correct.
The Chairman. Is there anything further ?
May I ask coimsel tliis : Do you have a chart that you have made ot
this transaction, tracing the loans and the money?
80330— 57— pt. 7 16
2224 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, IvENNEDY. Yes, Mr. Chairman.
The Chairman. Is it in accordance with the testmiony that has
been received here today ?
Mr. Kennedy. Yes, Mr. Chairman.
The Chairman. Then this chart may be made exhibit 173 for the
record.
(The document referred to Avas marked "Exhibit No. 173" for ref-
erence and will be fomid in the appendix on p. 2525.)
Mr. Kennedy. Mr. Seymour, were you approached on any other
matters ? Were you approached on any other matters by Mr. Fruehauf
or by Mr. Beck?
Mr. Seymour. I was approached, and I don't recall that it was Mr.
Beck. I think, perhaps, again, it naturally arose in connection with
my conversations with Mr. Fruehauf. It involved toy tractors and
trailers in connection with National Truck Week, originally in 1953.
Mr. Kennedy. Could you tell the committee what occmTed in
that?
Mr. Seymour. Well, I arranged, although I w^as not then in the
office, I was sick for several months, I approved a payment for what-
ever number of tractors and trailers it involved, or an amount of
$5,000, which was paid to the United Merchandising Co.
Mr. Kennedy. How much money did you advance?
Mr. Seymour. $5,000.
Mr. Kennedy. What was the purpose of that $5,000?
Mr. Seymour. To distribute toy tractors and trailers in connection
with National Truck Week.
Mr. Kennedy. Why would they want you to advance $5,000?
Mr. Seymour. Only because of my association, and Mr. Fruehauf 's
association, in ACT. -We are the ones who sponsored the National
Truck Week.
Mr. Kennedy. Did he say that Mr. Beck was interested in it? Did
Mr. Fruehauf tell you that ?
Mr. Seymour. Yes. I didn't know that he was interested in it but
1 have a recollection that the idea came from Mr. Beck, probably
to Mr. Fruehauf.
The Chairman. What you mean is that you did not know that he
had a financial interest in it and was going to make a profit out of it ?
Mr. Seymour. No, I certainly did not.
The Chairman. You did not know that at the time ?
Mr. Seymour. No, I did not.
The Chair3Ian. You knew he was interested in the idea ?
Mr. Seymour. He had to do with the National Truck Week, as Mr
Fruehauf and I did.
The Chairman. Sir ?
Mr. Seymou-r. We originated, the ACT Committee originated, the
National Truck Week, and this thing came along as a consequence of
it.
Mr. Kennedy. You advanced $5,000 in 1953?
Mr. Seymour. Yes.
Mr. Kennedy. Did you advance any otlier money?
Mr. Seymoir. $4,000 the following year for the same event, for
another National Truck Week.
Mr. Kennedy. This was to distribute tov trucks?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2225
Mr. Seymour. To distribute toy trucks to all of the locals, which
I presume, or I think, is somewhere in the neighborhood of 1,800, and
to others. Exactly where they were distributed, I don't know. I have
seen them. I had one. I have seen them in some of our terminals.
Mr. Kennedy. What was the advantage of the Associated Trans-
port Co. to have toy trucks ?
Mr. Seymoitr. It was only in connection with the National Truck
Week.
Mr. Kennedy. Why should you put $9,000 of your own money up
to distribute toy trucks?
Mr. Seymour. Because the ACT Committee is engaged in an in-
dustry endeavor and my company is part of the industry.
Mr. Kennedy. Did every one of the trucking companies put up
money ?
Mr. Seymoitr. I don't know what others put up.
Mr. Kennedy. Were you told that other companies were putting
up monej^?
Mr. Seymour. No, I wvas not.
Mr. Kennedy. ^Nlr. Fruehauf approached you about putting this
money up ?
Mr. Seymour. That is my recollection.
Mr. Kennedy. I still do not understand the advantage.
Mr. Seyiveour. Only because we have been active for a long period
of time with this, what I call, the ACT committee, which is a contrac-
tion of the words the Independent Advisory Committee to the Truck-
ing Industry, and at the time, and I still think, it was a good way to
publicize the National Truck Week and bring it to the attention, as
far as the number of trucks would reach.
Mr. Kennedy. To whom did you give the money ?
Mr. Seymour. To the United Merchandising Co.
Mr. Kennedy. Did you know that that company was run by Mr,
Shelton Shefferman ? •
Ml-. Seyjmour. I did not.
Mr. Kennedy. Do you Imow if Mr. Dave Beck or Dave Beck, Jr.,
made any profits from the moneys that you gave?
Mr. Seymour. Only what 1 have heard since. I heard about Mr.
Shett'erman as a result of his testimony here, and I have heard other
contributions of conversation about Mr. Beck, Jr. I don't know what
the facts are.
Mr. Kennedy. Did Mr. Fruehauf also put some money up?
Mr. Seymour. Yes. I know that he did.
Mr. Kennedy. How much money did he put up ?
Mr. Seymour. The same amount.
Mr. Kennedy. $9,000 or $5,000?
Mr. Seymour. I think it was 5 and 4, because I asked him some time
back, and I am sure that that is what he said.
Mr. Kennedy. Did you undei-stand that this w^as a profitmaking
company that you were contributing to and that the profits were going
to Mr. Beck's family ?
Mr. Seymour. No. My understanding until recently was that it
was to purchase toy trucks and trailei*s in an endeavor to go ahead and
sell the idea of trucks in the United States.
Mr. Kennedy. To sell trucks in the United States ?
2226 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Seymour. To sell truck transportation, the trucking business.
Mr. Kennedy. And you put up $9,000 for that purpose?
Mr. Seymour. That is correct.
Mr. Kennedy. What did you charge that off on your books as ?
Mr. Seymour. I am sure to the sales department.
Mr. Kennedy. Sales?
Mr. Seymour. It was handled by the sales department the first year.
I think it was h.andled — I am sure it was handled by our advertising
department the second year.
Mr. Kennedy. Were there any other occasions on which Mr. Beck
or Mr. Fruehauf approached you for favors, either for Mr. Beck or
for anyone else ?
Mr. Seymour. Nothing else.
Mr. Kennedy. Mr. Chairman, we would like to put the details of
the toy truck into the record at this time.
In the last hearing we had on the matter, about a month ago, we just
discussed it generally. But I would like to get the details of it, the
particular figures about the toy trucks, into the record. I think we
have finished with Mr. Seymour.
The Chairman. Are there any other questions of Mr. Seymour?
Senator McNamara. Mr. Chairman?
The Chairman. Senator McNamara.
Senator McNamara. Looking at this chart, it appears that $200,000
came from the Manufacturers Trust Co., $200,000 was paid back by
Mr. Beck to the Brown Equipment Co. The Brown Equipment Co.
apparently paid $200,622.22 to Mr. Seymour. Presumably the $622.22
would be the interest, not paid by Beck.
Mr. Seymour. Yes. He paid the interest.
Senator McNamara. Then this is incorrect ? Can you see the chart
on the board ? That indicates that he paid $200,000 to Brown Equip-
ment Co., and the line from
Mr. Seymour. His interest was paid by a separate check.
Senator McNamara. This is an incomplete chart, then?
This indicates that the interest was paid by the BroAvn Equipment
Co., if I interpret it correctly. Is that correct? Wliat does the
$622.22 paid additionally by the Brown Equipment Co. to BMS, or
was there a separate check for the interest ?
Mr. Seymour. Because in connection with the bank loan, I paid the
interest personally.
Senator McNamara. But you received it, according to this, from
the Brown Equipment Co., and you paid it to the bank, according
to the chart on the board ?
Mr. Seymour. Mr. Chairman, may I ask Mr. Sullivan to answer
the Senator?
The Chahiman. If Mr. Sullivan can answer the question, without
objection he will be permitted to do so.
Mr. Sullivan. Mr. Seymour received a check for $4,000, I believe,
around April of 1954, from Mr. Beck. It was sent through an attor-
ney. Mr. Seymour took the $4,000 which was to cover the interest
of Brown, Mr. Seymour, and so forth, and reimburse the Brown Co.
for the interest that they had involved, reimburse himself for the
interest he had paid, and lie is holding a balance of somewhere around
$000 for whoever claims it, either the Fruehauf Co., or Mr. Beck, or
IMPROPER ACTWITIES IN THE LABOR FIELD 2227
wlioever it may belong to, because it was an overpayment of interest,
so far as Brown or Mr. Seymour was concerned.
Senator JNIcNamara. An overpayment of interest?
Mr. Sullivan". Yes, sir.
Senator McNamara. $622 of the amount that shows here; is that
the explanation ?
Mr. Sullivan. I don't know about the $600 that shows there. That
simply reflects, as I understand it, that when the bank was paid oil
there was currently $622 of interest due on the $200,000 note to the
bank, and the bank, of course, wanted its payment in full. At that
particular time, the records of Associated show, or Brown show, that
Brown gave $200,622 to the bank, and that the same day Mr. Seymour
gave his personal check to Brown for $622.
Then, as I say, in April, Mr. Seymour received $4,000 from Mr.
Beck for interest, and the letter of transmittal showed it was for the
interest.
Senator McNamara. You think the difference between the $622.22
and the $4,000 came from Mr. Beck, was distributed amongst the other
people involved, is that it !
]\Ir. Sullivan. Well, sir, I say this is what happened : Mr. Seymour,
during part of the time when the loan was at the bank, because the
loan was officially in Mr. Seymour's name, was paying each month
$622 to the bank in interest. So when Mr. Seymour received the
$4,000, he reimbursed himself to the extent that he had been advancing
$622 per month for some 3 months, and also he has the money for
Brown to make up the interest on the $25,000 that they had involved.
This check was adequate to take care of about $3,000 of interest at
the rate of 4 percent on the loan. That is all of the interest that Mr.
Seymour or Brown was entitled to.
So there is a balance that Mr. Seymour is holding. On my advice
he has been holding it for about 2 vears, until somebody claims it.
It is $800 or $900.
In 1954, which is the first we knew about it, a representative of the
Internal Revenue Department, who was apparently investigating the
affairs of Mr. Beck, came around and asked about this loan transaction,
and since that time, Mr. Seymour has simply been holding that
balance, because I, as counsel for the company, advised him to just
hold it until we found out who it belongs to or until somebody
claimed it. I do understand that perhaps the Fruehauf Co. say
it is theirs.
Senator McNamara. Thank you.
I guess that is as clear as the rest of it.
Mr. SuLLR^vN. It is as clear as I can make it, Senator, and I have
been working very hard to understand it.
Senator McNamara. We will have no argument about that.
The Chairman. Mr. Counsel, is there anything further?
Counsel says he can explain the chart.
Senator McNamara. I hope he starts by showing me the $4,000 I
don't see.
Mr. Kennedy. The original request was made of Dave Beck to Mr.
Fruehauf. He telephoned Mr. Seymour and Mr. Seymour then ar-
ranged for the Associated Transport Co. to advance $200,000 to the
Brown Equipment Co. At the same time the Fmehauf Trailer Co.
advanced $175,000 to Brown Equipment Co. The $175,000 came
2228 IMPHOPEK ACTIVITIKS IN TiJE LABOU FIJ'.LD
tlir(ni<i,li Mie Hrow'ii K<|iii|)in('i>t ('o. and ciuiio over hcic to the. Associ-
ated 'ri'JiMspoi't Ca). 'J'licy were then $25,000 slioi't.
Tlui lirovvn K((nii)iHent (U). ineaniinie luul Miis $200,000, and they, in
turn, advant'ed it lo Afr. Dave Beck down here. Dave Beck at that
time ^ave a note for $200,000 to the I^rown Kciiiipment do.
Addin<r tliis all np, tlie Frneliaur Trailer Co. is out $175,000; Asso-
ciated Transport (V). is out $2r'',000; the Brown P^ciuipment is even:
and Dave Ji(H-k has the $200,000.
Dave Jieck was supposed to pay this money back to the Brown
Kqui|)ment Co. hy December of 1954, but he was unable to do so, and
Fruehauf ovidenilv wanted their money back. They were out, as I
said, $175,000.
So then Mr. Seymour, in the end of December 1054, went to the
bank, the Manufacturers Trust Co., and asked them to loan him
$200,000. He said on that note, or it was an-aufred on that note, thai
it would be Mi-. Landa, Mr. Fruehauf, and himsell'. The bawk at
tluit time said, "That won't be sutlicient. We need further endorse-
ment."
So he went to this man, Greenbaum, from the ITertz (^o., and he
j)ut in a repurchase letter.
So in the Manufacturers Trust Co., you had Mr. Seymour's not.e,
you had Mi-. Laiida and Mr. Fruehauf's note, tlien yon had the re-
])urchase letter of Mr. (xreenbaum.
So with that, the Manufacturers Trust Co. adxanced the $200,000
to Mr. Seymoui-.
Are you still with me?
Senator McNamaua. Where is the $4,000?
Mr. Kknnkdv. This is Deceinl)er of 1!)54. Mr. Seymour then sent
that $200,000 to the Brown Fquipment Co. The Bi-own Kqui])ment
Co. returned $175,000 to Mr. P^-uehauf and $25,000 to the Assfx-jated
Transporl. J^ut uoav, as we stand at the end of December 1054, the
Mann fad urers Trust Co. is out $200,000, Mr. Seymour, Mr. Fruehauf,
.Mr. Lan(hi, and Mr. Greenbaum ha\e <iuaranteed it. and Mr. Beck
still has the $200,000.
Then this note ori<j:inally to the Brown Kciuipment (^o. by Dave
Bec^k had been (hie in December of 1054, hut, as J say, lie wasn't able
to pay it.
Then this note to the bank for $200,000 came due at. the end of
March of 1055. They jrot this $200,000. 'Hien at the end of March,
it was a OO-day note, by the end of March 1055, this note was due a^ain.
So Mr. Dave Beck "still was not able to come up with the $200,000
so Mr. Seymoui- borrowed $200,000 from the Brown l^^quipment Co.
and paid the bank back, the Manii fact urers Trust Co. back, the
$200,000, so that dismissed Koy Fruehauf, Landa, and Bert Seymour,
and S\v. (ireeiihaiini.
So at the end of March 1055, the situation stood that lirown Kcpiip-
ment Co. was out $200,000 and Dave Beck still had the $200,000.
Then in April of 1055, Mr. Dave lieck arran<red to sell his house to
the teamsters. So the teanistei-s <j:ave him $1():],215 for his house, and
told him that he could live there, and Mr. Dave Beck then sent that
check up to Air. Bert Seymour, $l()n,()00. It came up on April 11,
1055, to Bert Seymour, and then came down to the Brown Fquipment
(/(). because, as I say. Brown Fquipment Co. was out tliis $200,000.
iMi'Koi'KU AcrivrriKS in thk i.ahok i-iki.i) 2220
So lie iocikIoisimI llml Id I'.iowii lM|ni|)m("ii( (Uk 'V\wu llic si(iiii( ion
thonslood thill, the (v;iiiis(crs\vonM)iil $1«;:'.,()()(>, iuid i1h> lirown Kcinip-
iTiontCV). was still out $n(;,7sr. that Dave licck still had.
TluMi Dave r.cck advanced I he $;'.(i,7sr. in duly Jidy :>, li>.>.» U>
Ml-. So.yniour, and then (lial was in turn paid to tin- liiown lv|ui|)Ui<-nt
So everybody was even. Dave Heck had $l();5,2ir) (d the teamsters
money that it had i)aid Tor his home, and everybody else was s(iiiare.
Do you understand '(
Senatoi- l\I('N.vi\i.\i{A. Who paid I he inlerest.'^
Mr. Kknnkdv. The V>. & \^. Investment ('o., which is Mr. Dave
Heck'sinveslment company, and which is a company owned by himsilf,
they sent a $!,()()() clH>ck "to Alfons Landa— no, t hoy S(MiI it. to Mr.
Fruehaul". Mi'. I'^ruehaiif sent it to Mr. Landa, Mr. Landa sent it. to
Mr. Seymour, and that, was the end of the $ 1,000.
Senator Imjvin. Mi-. (Miaii-man, J just, want to conoiiii idate our
counsel. He has certainly uiis(-revve(l the inscrutable.
The ('iiAiKAFAN. Arethereany I'liither (|uestious^
Ix't- us havcj oT-(l(M-, ])lease.
Mr. SiJJ.LiVAN. Mr. (Muiirman, just, to straighten out one th\u<^ as
lon<r asweai-e this tan«,ded uj), I misspoke awhile a<;-o when I sai(J thi-
Jnternal Jvevenue came around t.o Associated Traiisjmrt tx) investi<j^ale
Mr. Herk^s a Hairs in comieciion with the loan. It was 1055 that they
came ai'ound, not. 1951.
The ('iiAiKiMAN. All i-i,uii(. Thank you.
They have, l)een around'^
Mr. SiiiJ.ivAN. They wei-e around, doiuji; theii" duty, sii-.
Senator Kennkdv. I just want to ask the counsel what Mr. r>e(;k
did with tlie $li()(),()00 ori<!,inally that he borrowed throu<;h this
mechanism.
Mr. Kknnkoy. In ]J)r)4, eai-jy J05I, the Internal J{eveiuje Depart-
ment st;arted an investi«ratiou. At that time, Mr. Jieck, accoi'din^-
to our records, had taken at least $:520,000, siru-.e 11)1!), I'l-om the
union treasury, which nobody knew about. So the Internal Itevenue
started ^oin<»: throuji;!! theii- "books, starlin<j: t,o uucovei- this. So Mr.
Beck stuck the $200,000 ba(-,k in the union treasui-y and said that he
had just been borrowin<jj this money durino- this [)er-io(l of time, and
that "he had bon-owed a lot more, "but he didn't know how irnich he
had borrowed. At that time he was <^(nuii. to jiay $200,000 and he
would pay the rest as they could figure out how much he had taken.
Since that time, 1955-.%, he has paid another $70,000 and perha|)s
possibly some more.
]iut the orio-irud money was paid, the oj-ip:inal $200,000 was paid.
Senatx>r Kknnkuv. Diil Mr. Iie(;k do any favors for the Assoc iat,ed
Transport Association (lut-in<jj this pei-iod of 11)55'^
Mr. Si:'\'.Moi;i{. No, sir-, no(- any ol her year.
Senator KKNNKf)Y. Did he ever- arr-an<jje for- the withdr-awal of
pickets from faciliti(!S of the Associated Tr-anspor-t,, MV-;Leari, and
others from the area south of New Knoland, (lur-in<>; a strike, in New
Enjrland?
Mr. Skymouk. No, sir-.
Senator Ki':NNia)Y. Ar-e you familiar with a inemor-arrdum fi-oni
Arthur Condon to Mr. Fr-iiehaiif, statin*!; that, on duly 5, 1955, the
2230 IMPROPER ACTIVITIES IN THE LABOR FIELD
teamsters, through Einar Mohon, arranged the withdrawal of
pickets from the facilities of Associated Transport, McLean, and
others, involved in New York and other points south of New Eng-
land, thus permitting Associated Transport and others to resume
operations south of New England ?
Mr. Seymour. I know there were difficulties, but it was handled
by John Lane, who is vice president in charge of our labor relations,
and I believe you are referring to the time of the New England
strike.
Senator Kennedy. That is correct.
Mr. Seymour. Many carriers, including ourselves, had pickets that
came down from New England and had pickets around terminals
and areas outside of New England, and our company was one, I
believe.
Senator Kjennedy. In other words, is it your information that he
arranged conversations with Mr. Beck for the withdrawal of all
pickets on the Associated Transport and McLean and others south
of New England ?
Mr. Seymour. I can't tell you, Senator. I had nothing to do with
it. I never talked with Mr. Beck in connection with that which you
are describing.
Senator Kennedy. Wliat is your connection with the Associated
Transport ?
Mr. Seymour. I am president.
Senator Kennedy. Do you know why pickets were withdrawn,
or how it was arranged ?
Mr. Seymour. I assume it resulted from a negotiation between John
Lane, who is in charge of our labor relations, and other carriers with
the union. I thought it was with the locals that were involved in
New England. It may be that others were there. I don't know.
Senator Kennedy. I have one other question.
Did you loan or give the money to send out to these locals for these
small trucks, the model trucks ?
(At this point. Senator Ives withdrew from the hearing room.)
Senator Kennedy. I am still speaking of the $5,000.
Mr. Seymour. The company check was mailed to the United Mer-
chandising Co.
Senator Kennedy. Was it an investment, a loan, or a gift?
Mr. Seymour. It was a purchase of toy trucks.
Senator Kennedy. You purchased the trucks from this company
which Mr. Nathan Shefferman
Mr. Seymour. I didn't know that at the time.
Senator Kennedy. Who did you think was the head of it?
Mr. Seymour. I just didn't know.
Senator Kennedy. You did not know who you were purchasing the
trucks from ?
Mr. Seymour. I just assumed that they were people who were en-
gaged in the business of building toy trucks.
Senator Kennedy. And Mr. Fruehauf asked you to purchase them?
Mr. Seymour. That is my best recollection.
Senator Kennedy. And you got the trucks, then ?
Mr. Seymour. Well, they weren't sent to Associated, they were
sent around the country in connection with the activities of the ACT
committee, which had sponsored the National Truck Week.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2231
Senator Kennedy. Were they not sent to teamster locals ? Is that
correct ?
Mr. Seymour. I understand some were ; yes.
Senator Kennedy. And you got the money back, the $9,000, or was
that your contribution? Did you receive the $9,000 back?
Mr. Seymour. No ; we have not.
Senator Kennedy. In other words, it was your contribution to
sendin^^ toy trucks around to the teamsters locals ?
Mr. Seymour. It was the contribution of the members of the board
of directors of the ACT committee in connection with the National
Truck Week.
Senator Kennedy. Were not these trucks sold to the teamsters
locals?
Mr. Seymour. I don't know. Senator.
Senator Kennedy. You have never checked on that?
Mr. Seymour. No ; I never have. I never knew there was any ques-
tion about it until a couple of months ago.
Senator Kennedy. Now you know that these trucks were sold to
the teamsters ?
Mr. Seymour. I have heard other rumors, too, and if we find they
are true I am going to ask for our money back.
Senator Kennedy. What are those rumors ?
Mr. Seymour. That in 1954, if that is the year, that there is some
question as to whether there were any of them sent out anywhere.
Senator Kennedy. You are investigating that ?
Mr. Seymour. That is being investigated.
Senator Kennedy. As I understand
Mr. Seymour. I am not investigating.
Senator Kennedy. As I understand, you put $9,000 into this busi-
ness, and you thought you were helping to promote interest in truck-
ing. Now you learn that this was a financial investment project by
Mr. Shefferman's son and Mr. Beck's son, and his nephew, and that
these trucks were sold to the teamsters' locals, and that there is some
suggestion that the teamsters' locals were obliged to purchase them?
Mr. Seymour. I didn't know that until recently.
Senator Kjennedy. In other words, they were making an investment
out of it, and you were contributing. Your $9,000 was used to bring
some degi-ee of profit to Mr. Shefferman and Mr. Beck's family.
Mr. Seymour. The matter is in the hands of Mr. Sullivan, who is
general counsel of our company at present.
Senator Kennedy, He is planning some action to recover the
money ?
Mr. Sullivan. The answer is that I have turned it over to my legal
department of the company in New York, and I expect a report very
shortly on it, ever since we first heard that there may be questions
about it, and that is only in the last 2 or 3 weeks.
Senator Kennedy. You mean before the committee?
Mr. Sullivan. Before the committee is the first I heard of it, and
I am following up some other sources, to see if we have a direct right
of action.
The Chairman. Senator McNamara ?
Senator McNamara. Since Mr. Sheft'erman has been mentioned, are
you one of his clients ?
2232 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. SsYivroTTR. No. I doivt know Mr. Shefferman.
Senator McNA^srAUA. A lot of people do know him, but are you one
of his clients ?
Mr. Sey3iour. I am not one of his clients.
Senator McNamara. I understand he is the type of fellow where a
lot of people are his clients who do not know it,
Mr. Seymour. I am not one of them.
Senator McNa^iara. Thank yon.
Mr. Kennedy. In connection with Mr. Shefferman, has Mr. Sheffer-
man's attorney been around to see yon?
Mr. Seymour, Not to see me.
Mr. Kennedy. Has he been aronnd to see any of your people?
Mr. Sullivan. I will say, Mr, Chairman, and I do not remember
hLS name, someone came in the office awhile ago in connection with,
I believ^e, Union Merchandising, and we had a legal discussion,
Mr, Kennedy. Was it for the purpose of finding out what conversa-
tions the committee staff had with vou people? Was that the pur-
pose ?
Mr. Sullivan. No ; I don't think so. The only conversations I had
was I was interested in finding out any confirmation of a suggestion
that had been made by somebody from the committee that p^erhaps
w^e had made a third contribution that we couldn't find any record of,
so I asked about that, and the only other discussion we had was a
question of where were these toy trucks distributed, because I was
askino; that question.
Other than that, there was no particular conversation other than I
stated what our position with respect to this matter was.
The Chairman. Thank you very much.
Mr. Kennedy. Mr. Chairman, 'if it is satisfactory to you, I would
like to dispose of this toy truck business by putting Mr. Bellino on
to explain what happened.
Tlie Chairman. Come forward, Mr, Bellino,
(Members present at this point: Senators McClellan, Kennedy
Ervm, McNamara, and Curtis,)
TESTIMONY OF CARMINE S. BELLINO— Resumed
The Chairman, Mr, Bellino, you have been previously sworn dur-
ing this series of hearings, have you not ?
Mr, Belling. Yes, sir.
The Chairman, Do you waive counsel ?
Mr, Bellino, I do, sir.
The Chairman, Let us proceed,
Mr, Kennedy, Mr, Bellino, you have made a study, have you not,
of the Union Merchandising Co, and the toy truck transaction ?
Mr, Bellino, A study has been made of the records of the Union
Merchandising Co., Flobar Sales as well as the Union Label and Trades
Agency of the AFL.
Mr, Kennedy, Mr, Chairman, we have a toy truck of the type we
have been talking about.
The Chairman, Let us see the toy truck.
That will be made exhibit 174.
(The truck referred to was marked "Exhibit No. 174," for refer-
ence and may be found in the files of the select committee.)
IxMPROPER ACTIVITIES IN THE LABOR FIELD 2233
The Chairman. All right, gentlemen, let us have order.
Proceed with the witness.
Mr. Kennedy. Mr. Bellino, yon made a study of the coiiipanies
that handled the toy truck transaction ?
Mr. Belling. Yes, sir.
Mr. Kennedy. And the names of those companies are what?
Mr. Belling. The Union Merchandising Corp., Flobar Sales, and
the Union Label Trades of the AFL.
Mr. Kennedy. Would you tell the committee where the initial
investment for the toy trucks came from ?
Mr. Belling. The initial investment came from the AFL of $250,
which went to the promotion fund of the Union Label and Trades.
Insofar as the initial moneys for the actual construction and manu-
facture of the trucks, the money came from, according to the records
of the L^nion Merchandising Corp., $10,000 was received from Frue-
hauf and Brown Equipment Co. on November 20, 1953, and an addi-
tional $5,000 was received on November 27, 1953, from Associated
Transport Co.
Mr. Kennedy. Are those records accurate ?
Mr. Belling. We have ascertained that the Brown Equipment Co.
check was the one that was deposited under the name of Associated
Transport, and there was only one check from Friiehauf for $5,000,
and the other check was a check of $5,000 payable to Ray Leheney
by the International Brotherhood of Teamsters, which was recorded
on the books of Union Merchandising as coming from Brown Equip-
ment.
Mr. Kennedy. The records show that $5,000 came from Fruehauf,
and that $9,000, is it, or $10,000, from Brown Equipment Co. and
Associated Transport ?
Mr. Belling. Yes, sir.
Mr. Kennedy. We have found since that time that $5,000 did come
from Brown Equipment Co. or Associated Transport?
Mr. Belling. That is right.
Mr. Kennedy. But the other $5,000 did not?
Mr. Belling. That is right.
Mr. Kennedy. So the entry in the books is incorrect or false?
Mr. Belling. Yes, sir.
Mr. Kennedy. And the fact is that $5,000 came from Ray Leheney
out of
Mr. Belling. Out of the teamsters.
Mr. Kennedy. Out of the teamsters.
Mr. Belling. It was not indicated.
Mr. Kennedy. With that initial investment, how much profit was
made on the toy trucks?
Mr. Belling. The profit on the toy trucks was $84,802.64.
Mr. Kennedy. So the records show that those toy trucks were sold
to the teamsters unions?
Mr. Belling. Various individuals as well as to various teamsters
unions; yes.
Mr. Kennedy. The majority of the sales were to the teamsters locals
and by them to various individual:!; is that right?
Mr. Belling. Yes, sir.
Mr. Kennedy. And the total profit on this investment of some
$15,000 was $84,000; is that right?
2234 IMPROPER ACTIVITIES LN THE LABOR FIELD
Mr. Belling. Yes, sir.
Mr. ICennedy. And the investment did not come from the group
that was involved, but came from outsiders ?
Mr. Belling. Yes, sir.
Mr. Kennedy. It came from Koy Fruehauf and it came from As-
sociated Transport?
Mr. Belling. Yes, sir.
Mr. Kennedy. To whom did this profit ultimately accrue ?
Mr. Belling. The profit ultimately accrued to Shefferman and rela-
tives of Dave Beck.
The Chairman. Name the relatives. Let us make the i^cord clear.
Mr. Belling. The relatives are Norman Gessert and Dave Beck, Jr.
The Chairman. Are those the only two ?
Mr. Belling. Yes, sir.
Mr. Kennedy. At that same time, during 1953 and 1954, did this
Union Merchandising Co. also have other transactions with the team-
sters union ?
Mr. Belling. Yes, sir.
Mr. Kennedy. They sold the furniture to the teamsters building?
Mr. Belling. Yes, sir.
Mr. Kennedy. And arranged for the sale of the furniture ?
Mr. Belling. Yes, sir ; and printing dues, books and so on.
Mr. Kennedy. So for this whole outfit, how much was the profit
for this company ?
Mr. Belling. The profit derived from those sources was $115,318.96.
Mr. Kennedy. What is the total profit ?
Mr. Belling. The total of both sources is $200,121.60.
Mr. KJENNEDY. Do you have it broken down, Mr. Bellino, as to
whom this money went, this $200,000 ?
Mr. Belling. Yes, sir.
Mr. Kennedy. Would you give the committee that ?
Mr. Bellino. They paid to the International Brotherhood of Team-
sters $20,824.71. I understand, however, that did not cover all of the
expenses that the teamsters had in this connection. They printed
one of these booklets that went out advertising the sale of these toy
trucks. The Shelton Co., one of the Shefferman companies, received
$20,000. Dave Beck, Jr., received $19,500.11. Norman Gessert re-
ceived $51,751.71.
Mr. Kennedy. Who is Mr. Norman Gessert ?
Mr. Belling. His wife is a nie«e, I believe, of Dave Beck.
Nathan Shefferman received $16,500, and Shelton Shefferman re-
ceived $49,229.53.
That is a total of $177,806.06, tlie balance of $22,315.54 remained
as surplus in the books of the company.
The Chairman. Let me ask you. I believe you said the total was
$200,121.60, the total profit?
Mr. Belling. Yes, sir.
The Chairman. From the two transactions, the truck and the sale
of the furniture ?
Mr. Belling. The sale of furniture, and printing books, and mis-
cellaneous articles.
The Chairman. Is that net profit, after all expenses?
Mr. Belling. Yes, sir.
The Chairman. That is net profit ?
IMPROPER ACTIVITIES EST THE LABOR FIELD 2235
Mr. Belling. Yes, sir.
The Chairman. In otl
Mr. Belling. Yes, sir.
The Chairman. All right.
Mr. Belling. With respect to the three $5,000 checks, for a total
of $15,000, $10,000 of that wentt o Miller Aaronson Co. The balance
they showed as profit. That $5,000 profit appears to have been added
onto the payment to Mr. Gessert. Gessert received a total of $38,500,
which is a little over $5,000 more than what the joint Shetfermans
received as salary. In other words, the Sheffermans received a sal-
ary of $16,500 each, or a total of $33,000, whereas Gessert received
$38,500.
Indications are that the $5,000 which remained as a profit in the
Union Merchandising on these toy trucks was credited and paid over
to Norman Gessert.
Mr. Kennedy. Mr. Norman Gessert is 1 of the 4 individuals that
we have been looking for for some 6 weeks and have not been able to
locate ?
Mr. Belling. Yes, sir.
Senator Curtis. Mr. Chairman?
The Chairman. Senator Curtis.
Senator Curtis. When you testified that these trucks were sent out
to local unions and purchased by them or sold to others, what do you
mean by "others" ?
Mr. Belling. Others would be possibly other individuals, friends
of teamster members.
Senator Curtis. Were they friends of teamster members or were
they employers ?
Mr. Belling. Some of them may have been employers. I do not
know the whole list. Senator.
Senator Curtis. Do you know what a truck like the exhibit before
the committee sold for ?
Mr. Belling. They ranged in price — I don't know that particular
one, but they ranged in price from $15 to $30 apiece.
The Chairman. Were they different sizes?
Mr. Belling. They are different types.
The Chairman. Different types ?
Mr. Belling. Yes.
Senator Curtis. Do you know what it cost to manufacture them?
Mr. Belling. No, sir.
Senator Curtis. Do you know where they were manufactured?
Mr. Belling. They were manufactured by Miller & Son, in Los
Angeles, and our men have been working over those records and
have not completed what the actual cost was.
Senator Curtis. You have not had an opportunity to check in any
particular local union as to how their sales of those were?
Mr. Belling. I believe we have a group of letters that the chief
counsel will get into evidence that will explain that. Senator.
Senator Kennedy. How much capital was in the company?
Mr. Belling. Initially there was just $250 for selling expenses by
the Union Label and Trades, and only $5,000 would be left in the
company, because $10,000 went to Miller & Son.
Senator Kennedy. In other words, the previous witness stated that
he put in $9,000. Did Fruehauf put in some, too ?
2236 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Belling. Fruehaiif put in — the $9,000 includes an additional
payment of $4,000 in 1954 which I did not include with the $15,000.
Senator Kennedy. In other words, that is $9,000, and Fruehauf
put in how much ?
Mr. Belling. $5,000. That would be $14,000.
Senator Kennedy. What percentage of the total amount invested
by all participants, including the Sheti'ermans, et cetera, what per-
centage would that $14,000 be of the money invested in this company ?
Mr. Belling. There is no other money invested that I can recall.
Senator Kennedy. In other words, the only money that was put in
was this $14,000 by two men who were getting no return on it, and they
regarded it as a contribution to the industry ; is that right ?
Mr. Belling. Insofar as the operation of the toy trucks; yes, sir.
Senator Ivennedy. In other words, neither Mr. Shefferman nor any
of Mr. Beck's family invested any of their own funds in it?
Mr. Belling. Not insofar as the operation of the toy tnicks; no.
sir. They may have been in the other companies, but I don't have
the figures with respect to the other operation.
Senator Kennedy. What did they make out of the toy-truck deal
alone ?
Mr. Belling. $84,802.64.
Senator Kennedy. In other words, these two men put in $14,000,
the total amount of the capital, for which they got no return, and
out of it was made, by people who put in no money, $84,000 ?
Mr. Belling. That is correct, sir.
Senator Kennedy. That is very odd.
Mr. Ivennedy. Mr. Bellino, adding to that is the promotional ex-
penses of about $20,000, which was paid for by the teamsters; is tliat
right?
Mr. Belling. There was $15,000 — yes, approximately $15,000 — in
preparing that booklet that went out around Christmas time.
Mr, Kennedy. Mr. Chairman, Ave have some of the letters, books,
booklets, telegrams that went out under Dave Beck's signature, urg-
ing teamster members and teamster locals to purchase these toy
trucks.
We have a witness to introduce some of those documents.
The Chairman. Can this witness not introduce them ?
Mr. Kennedy. Mr. Adlerman would be the proper witness for that.
The Chairman. Very well.
May the Chair amiounce that this truck that we made an exhibit. —
exhibit 173 — will be for reference only? I do not want it incor-
|K>rated into the record.
(Members present at this point: Senators McClellan, Kennedy,
Ervin, McXamara, and Curtis.)
The Chair:man. ]\lr. Adlerman, you do solemnly swear that the
evidence you shaU give before this Senate select committee shall be
the truth, the whole truth, and nothing but the truth, so help you
God? 1 ^
Mj-. Adlerman. I do.
TESTIMONY OF JEEOME ADLERMAN
The CiiAiiuiAX. State your name, youi- j^lace of ivsk U'uee, jiiid
your pi-esent <)Cf'U))ation.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2237
Mr. Adlerman. My name is Jerome Adlerman. I am a.ssistant
counsel to the committee. I reside in Arlington, Va.
The Chairman. Proceed, Mr. Counsel.
Mr. Kennedy. Mr. Adlerman, we received under supena from the
teamsters union certain of the documents, letters, telegrams, and
booklets that were put out for ])romotion of this toy-truck campaign,
is that right ?
Mr. Adlerman. Yes, sir.
Mr. Kennedy. And we find that that material that went out to
the unions went out under the signature of Mr. Dave Beck i
Mr. Adlerman. Yes. The initials of Dave Beck are on the bottonu
and it recites from the office of i:)ave Beck, general president.
(At this point. Senator Kennedy withdraw from the hearing roouL)
Mr. Kennedy. Would you read to the committee some excerpti-
from some of those letters that you have, and the booklet^
The Chair.aian. Let the Chair announce that all of the material
that is going to be read, the excerpts, is material which the com-
mittee obtained by subpena from the teamsters.
Mr. Adlerman. That is right;.
The Chairman. Is that the Western Conference or just the Team-
sters International i
Mr. IvENNEDY. From the international.
The Chairman. From the international ?
Mr. Adlerman. That is right.
The CuAHtMAN. These are their documents.
Mr. Adlerman. I think we should put into evidence the advertise-
ment that was printed in the International Teamstei-s Union paper on
December 195o, which contains an ad advertising the sale of these
toy trucks by the union, under the name of "Union Label and Trade
Service Department, 100 Indiana Avenue NW., Washington, D. C.,'"
with a pricelist on the trucks.
The Chairman. That may be made exhibit 175, for reference, the
document which has just been testified to. - , j.
(The document referred to was marked "Exhibit Xo. 1<5, " for
reference and will be found in the appendix on pp. 2526-2528.)
Mr. Adlerman. On December 14, 1953, Mr. Dave Beck sent a
telegram to Jack Hemingway, local 98. I would like to read this
telegram, or at least some excerpt of it.
Tlie Chairman. The telegram may be made exhibit 176.
(The telegram i-eferred to follows:)
Mr. Adlerman (reading) :
The recorfls of our union shop card and miniature truck sales campaign in
the labels trade department do not record any participation by your local union.
Initial expense by the label trades department of sending free trucks to every
secretary with the additional advertising, mailing and administrative cost
connected with this campaign have been approximately .$25,000. We do not
want the label trades department to suffer any loss. We iiave recommended
a minimum purchase of five trucks per local union and, of coui-se, where possible,
welcome added help. I emphasize your participation is voluntary. I will
appreciate your cooperation and assistance. Please advise me personally at
International Headquarters, Washington, 100 Indiana Avenue Northwest, today,
if you are ordering trucks, so they may clijse their records and save mailing
and wiring expense if you are not going to do so. If you have sent your order
in this weekend, it would not show on their records until Monday. In such
instance, please accept my appreciation for your splendid cooperation anil
recognize the short time before Christmas prompts this wire.
Dave Beck.
2238 IMPROPER ACTR'ITIES IN THE LABOR FIELD
(At this point, Senator Kennedy entered the hearing room.)
Mr. Adlerman. That was sent out on December 14, 1953.
The Chairman. How much did he say the union is out, or one
division of the union?
Mr. Adlerman. $25,000.
The Chairman. He says there the union is out $25,000?
Mr. Adlerman. They incurred an expense of $25,000.
The Chairman. He does not say that he has gotten some money
from some trucking people ?
Mr. Adlerman. He doesn't mention that at all, sir.
The Chairman. Do you find anything in their records to show
that the union is out anything on it ?
Mr. Adlerman. I think Mr. Bellino can answer that better than
I can.
The Chairman. I believe he did testify that they were out some
expenses.
Mr. Adlerman. I have another telegram that was sent out on
December 9, to the same gentleman, previous to the telegram I just
read.
The Chairman. That telegram may be made exhibit 177.
(Telegram referred to follows:)
I sincerely trust you will cooperate 100 percent in the promotion of the scale
models of the union-made toy trucks displaying the teamster emblem and union
shop card. Can be used as door prizes to stimulate attendance at meetings, also
sent to hospitals for crippled children. Hope each local union will order no
less than five each for promotional purposes.
Fraternally,
Dave Beck, General President.
Along with that, he sent, of course, some descriptive literature.
Mr. Adlerman. We have a number of telegrams which w^ere sent
to the different joint councils on the same subject. I would like to
read this one dated December 11, 1953.
The Chairman. I do not want to place all of those into the record,
as it is not necessary. Would you state the number that were sent to
different councils or different groups, and then read one of them as
a sample ?
Mr. Adlerman. It is impossible to state the number, Senator, be-
cause some of them have a list of 4 or 5 pages of names, where one
copy of the telegram was sent to them. So I would say that the
probability is that the total telegrams sent out may have numbered
over a hundred or so.
The Chairman. Read one of them.
Mr. Adlerman. I would like to read 1 or 2 samples of them.
This telegram was sent out on December 11, 1953, to Gordon Conk-
lin, of the Joint Council No. 34, St. Paul, Minn. It states :
The Chairman. This telegram may be made exhibit 178.
(Telegram referred to follows:)
The Minneapolis Joint Council has given splendid cooperation. They have
ordered 315 miniature trucks representing purchases by local unions affiliated
with their joint council. We do not have a single purchase letter, wire, or
telephone call of any kind or character from the St. Paul local union or the
joint council, although we have had Hoffa and others trying to make contact.
Please advise why we get no cooperation. If special meeting of council has
not been called or special meeting of secretaries has not been called, please do
so immediately and advise me by wire or telephone this afternoon what is the
matter in St. Paul.
(Signed) Dave Beck.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2239
The Chairman. Is that a solicitation of voluntary cooperation ?
Mr. Adlerman. It is the sort of cooperation you get when you hit
somebody over the head.
The Chairman. What I mean is there is nothing in there that says
"We -will appreciate your doing this if you care to"? It is rather
urgent.
Mr. Adlerman. It is nothing of that sort. It is a direction of "if
you don't cooperate, please advise me why we have had no coopera-
tion"' and orders a special meeting to be called to obtain such cooper-
ation.
I just want to read 1 or 2 others of a similar nature.
This one was sent to Milwaukee, Wis., Mr. Eanney, secretary-
treasurer of local union 200, on December 11.
The Chairman. That telegram may be made exhibit 179.
(Telegram referred to follows:)
Twenty-three trucks is the total purchased by local unions aflaiiated with
joint council 50. Sixteen of them are from your own local union. All over the
United States locals are averaging about five truclvs per local. Please give me
an answer this afternoon, either by wire or telephone, the reason for the situa-
tion in the Milwaukee Joint Council.
Dave Beck.
(At this point. Senators Ervin and McNamara withdrew from the
hearing room.)
The Chairman. This is still voluntary?
Mr. Adlerman. That is right.
The Chairman. Others are of the same nature ?
Mr. Adlerman. Yes, they are all of the same nature.
The Chairman. I do not think it is necessary to place any more
into the record.
Mr. Kennedy. Mr. Chairman, I would like to say that these letters
and telegrams, we have been informed by the teamsters union, cost
approximately $20,000 on the promotional campaign, that it cost the
teamsters some $20,000 for the telegrams, letters, et cetera, for the
work they were doing.
The Chairman. Is that in addition to what has been shown on the
books ?
Mr. Kennedy. No. As Mr. Bellino has testified there is some
$20,000 that went into it.
The Chairman. In other words, what the teamsters invested in this
project was the promotion cost?
Mr. Kennedy. That is right. And they were ultimately paid
approximately that amount, but the profits then were distributed
amongst the Sheffermans and amongst Dave Beck's family. You
can see that this promotion was all carried out by Dave Beck, asking
for voluntary assistance.
Mr. Adlerman. There are 1 or 2 letters, and these are in 1954, which
show the connection of Mr. Shefferman with the transactions. This
letter of October 29, 1954, is addressed to Mr. Raymond Cohen,
secretary-treasurer, local union 107, Philadelphia, Pa. I would like
to read part of it :
I am very sorry if my request that you meet Shelton Shefferman the other day
at the airport at Philadelphia inconvenienced you, as I later learned you were
not able to keep the appointment. I am very anxious to get 100 percent coopera-
tion in Philadelphia in our union label and shop card campaign in the sale of the
89330— 57— pt. 7 17
2240 IMPROPER ACTIVITIES IN THE LABOR FIELD
miniature trucks, and I will appreciate your every effort in this direction
Shelton advised me that he gave the entire story to Hartsough, but if there are
other questions in your mind on this program I would suggest that you contact
Shelton at this address: Mr. Shelton Sheffermau, Labor Relations Associates
75 East Wacker Drive, Chicago, 111.
He goes on to describe what he would like him to do.
A similar letter was sent to Mr. Larry McGinley, not exactly the
same, which states:
I am very sorry if I interferred with your schedule—
and so forth.
I am positive you can dispose of 200 miniature trucks in the area of your
operation and take care of the whole thing in the next 2 weeks.
The Chairman. These letters may be made exhibit 180 and the one
you are now reading exhibit 181.
(The documents referred to were marked "Exhibits Nos. 180 and
181," for reference, and will be found in the appendix on pp. 2529-
Zdov. )
Mr. Adlerman. Again he points out that he should get in touch
with Mr. Shefferman.
Mr. Kennedy. Can we have the other letters made an exhibit?
The Chairman. All of the other letters that you have there may
be made exhibit 182 for reference only, not to be printed in the record,
the ones you have not read.
(The documents referred to were marked "Exhibit No. 182," for
reference, and may be found in the files of the select committee.)
Mr. Kennedy. Mr. Chairman, would you recall Mr. Roy Fruehauf,
please?
The Chairman. Mr. Fruehauf, come forward, please.
(Members present at this point Senators McClellan, Kennedy, and
Curtis.)
TESTIMONY OF ROY FRUEHAUF, ACCOMPANIED BY HIS COUNSEL,
CLARK M. CLIFFORD— Resumed
Mr. Kennedy. Mr. Fruehauf, we had some testimony about the
toy trucks. Did Mr. Beck approach you about making" a contribu-
tion for the toy trucks ^
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. That was in 1953?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. What did he want from you ?
Mr. Fruehauf. He wanted us to go in on the program because of
the National Truck Week, which was in behalf of promotion of the
industry, and in addition to that we were to have our name on the
equipment.
Mr. Kennedy. Why did you happen to go to Associated Trans-
port?
Mr. Fruehauf. Mr. Beck asked me to phone Mr. Seymour.
Mr. Kennedy. And get some money from him also ?
Mr. Fruehauf. He just asked me to pass the message on to him.
Mr. Kennedy. What was the message ?
Mr. Fruehauf. That he would like to have him contribute to this
program for a National Truck Week.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2241
Mr. Kennedy. By toy trucks?
Mr. Fruehauf. Yes. .
Mr. Kennedy. What was Associated Transport to get out ot it<
I notice your emblem is on, but I do not see anything about Associated
Transport. ^ ^ ^ . ^
Mr. Fruehauf. They were part of the Independent Advisory Com-
mittee, and the Independent Advisory Committee was sponsoring
National Truck Week. I presume Mr. Seymour took a broad look
at it, that this was a promotion for tlie industry.
Mr. Kennedy. Then did you go to Mr. Seymour again m 1954^
Mr. Fruehauf. I don't recall whether I did or not.
Mr. Kennedy. He states that you approached him both times, to
get some more money. Why would you go to him again ?
Mr. Fruehauf. I "don't recall that I did go to him in 1954.
Mr. Kennedy. Was there any question as to why Mr. Dave Beck
could not go to Mr. Seymour directly instead of through you'^
Mr. Fruehauf. Not that I know of.
Mr. Kennedy. Did Mr. Dave Beck make any other requests of
you after the union loaned you and your company $1,500,000? Did
he make any request other than the loaning of the $200,000, and,
second, the putting up of $5,000 yourself for the toy trucks and
$9,000 by Associated Transport Co. ?
Mr. Fruehauf. Yes. I recall one occasion that he called us and
asked us to expedite the purchase of a boat for him.
Mr. Kennedy. Of a boat ?
Mr. Fruehauf. Of a boat that was made in Michigan.
Mr. Kennedy. Were you able to do that for him ?
Mr. Fruehauf. I turned the matter over to my administrative as-
sistant and he was able to locate the boat and inform Mr. Beck by
mail the price of the boat. He, by return mail, sent a letter back
with his check to the boat company.
Mr. Ivennedy. Were you able to get a certain percentage off of that
boat?
Mr. Fruehauf. I believe 20 percent, Mr. Kennedy.
Mr. I^nnedy. You were able to get that for Mr. Beck ?
Mr. Fruehauf. Yes.
Mr. Kennedy. Then did you also arrange to have the boat shipped
to him in Seattle ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. The boat was being purchased for his son, Dave
Beck, Jr.?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. So you were able to get the boat at a discomit and
then you made arrangements to ship the boat to Seattle ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. That was on a trailer that you had going west
at that time?
Mr. Fruehauf. We had a trailer going out, a pilot model going
out to a customer in that area, and we went out of our way to the
extent of approximately $115 to pick up the boat.
(At this point, Senator McNamara entered the hearing room.)
Mr. KJENNEDY. But it did not cost you anything to ship the boat?
Mr. Fruehauf. The trailer was going out empty anyway, Mr.
Kennedy.
2242 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. IvENNEDT. Do you perform those services for people, when you
have trailers going empty in any direction? Do you allow people
to put things in them for free ?
Mr. Fruehauf. Occasionally.
Mr. Kennedy. What arrangements do you have to make with the
Fruehauf Trailer Co. to get that done ?
Mr. Fruehauf. Pardon?
Mr. Kennedy. Wliat arrangements do you have to make with the
Fruehauf Trailer Co. to have your goods shipped free ? It is a
favor, is it ?
Mr. Fruehauf. Yes.
Mr. Kennedy. Did you perform any other favors for Mr. Dave
Beck?
Mr. Fruehauf. Yes.
Mr. Kennedy. Wliat were they ?
Mr. Fruehauf. We let him use an automobile and a chauffeur on
occasions.
Mr. IvENNEDY. Where was that ?
Mr. Fruehauf. In Paris, France.
Mr. Kennedy. Did he make the request of you ?
Mr. Fruehauf. Yes, sir.
Mr. I^NNEDY. He requested that you put your automobile and
chauffeur at his disposal ?
Mr. Fruehauf. Right.
Mr. KJENNEDY. And were there any other favors that he requested
of you ?
Mr. Fruehauf. I would say in the period of time that I knew
Mr. Beck, he requested the use of our airplane on probably 3 or 4
occasions.
Mr. Kennedy. So the $200,000 and then the money that was raised
for the toy trucks, and getting the boat and shipping it to the west
coast, and then getting the chauffeur and the car in Paris, then
using the airplane. Were there any other favors that he requested of
you?
Mr. Fruehauf. Yes. I think at one time he wrote me and asked
me to see if we could find somebody who could fabricate an enclosure
for his swimming pool. We endeavored to find somebody who could
do such a job, and we were unsuccessful.
JNIr. Kennedy. So that never went to fruition ?
Mr. Fruehauf. No, sir.
Mr. Kennedy. Any other favors ?
Mr. Fruehauf. I think at one time he wrote my administrative
assistant to see if he could procure a transmission for him, and he
found a place where he could and wrote him and told him the price,
and that was the end of that.
Mr. Kennedy. Anything else ?
Mr. Fruehauf. Nothing that I can recall right this minute.
Mr. Kennedy. Wliat about the chauffeur and the car for his niece
and several of her companions ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Did you arrange for that?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Was that, again, a request by Mr. Dave Beck?
Mr. Fruehauf. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2243
Mr, Kennedy. And they toured Europe for approximately 6
weeks, is that right ?
Mr, Fruehatjf, Yes, sir,
Mr, Kennedy. And the chauffeur and the car were put at their
disposal by your company ?
Mr, Fruehaue. Yes, sir, -o , x
Mr. Kennedy, And no charge was made to Mr, Dave Beck tor
that?
Mr, Fruehauf, No, sir.
Mr. Kennedy. Mr. Chairman, we have here a group of letters m
connection with that, in connection with Mr. Fruehauf, the original
request that was made of Mr. Fruehauf by Mr. Dave Beck. I think
they tell the complete picture. Perhaps we can make them an exhibit
TOT TPTPT*PnPP
The Chairman. Will you identify the documents that I hand to
you, please examine them, and see if they are photostatic copies of
the original letters and copies in connection with this transaction of
providing for a chauffeur, a car, and so forth, to tour Europe?
(Documents handed to witness.)
(The witness conferred with his counsel.)
Mr. Fruehauf. Yes ; I do.
The Chairman. That series of exhibits of correspondence will be
made exhibit 183 for reference.
(The documents referred to were marked Exhibit No. 183, for ref-
erence and may be found in the files of the select committee.)
Mr, Kennedy, The salary of the chauffeur was paid at that time
by the Fruehauf Trailer Co, ?
Mr, Fruehauf, Yes.
Mr, Kennedy, You also had an automobile that you put at their
disposal, is that right ?
Mr, Fruehauf, Yes, sir.
Mr. Kennedy, Above and beyond that, what do you estimate the
expenses of the 6 weeks' tour of these girls to have been ?
Mr, Fruehauf. Well, I can't give you any details on that, be-
cause
Mr. Kenndey. Let me ask you if it was approximately between
sixteen and eighteen hundred dollars.
Mr, Fruehauf, Yes.
Mr. Kennedy. For the hotel, for the chauffeur, and for his meals
and for the gas ?
Mr. Fruehauf. Yes.
Mr. Ivennedy. That does not include his salary or the use of the car,
or renting the car ?
Mr. Fruehauf. Well, there, again, I would have to get the full
details from Paris.
Mr. I^nnedy, Would you consult so we can get the full details
right now ? Would you consult with your attorney ?
(The witness conferred with his counsel.)
Mr. Fruehauf. We have written to our Paris office for the full de-
tails on these trips, and we will be glad to give you that information.
Mr. Kennedy. You do not have it at the present time ?
Mr. Fruehauf. No, sir.
2244 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. When you get the details, will you submit them to
the committee with a statement or a covering letter ?
Mr. Fruehauf. Yes, sir.
The Chairman. And do you now swear that you will submit them
accurately? They at tliat time will be made exhibit 184 when re-
ceived,
Mr. Fruehauf. Yes, sir.
The Chairman. They will be exhibit 184, wlien received for ref-
erence.
(The documents referred to will be marked "Exhibit No. 184," for
reference and may be found in the files of the select committee.)
Mr. Kennedy. We know, at least, do we not, that the figure was
sixteen to eighteen hundred dollars ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. We know those expenses at the present time ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. Mr. Chairman, in connection with that, we know
also that these girls. Miss Gessert, Miss Tobert, Miss Irving, and
Miss Smith had their transportation from Paris to London, totaling
$118.62, paid for by the Teamsters Union.
The Chairman. Do you recall that ?
Paid for by whom ?
Mr. Kennedy. At Mr. Dave Beck's request, it was paid for by the
teamsters union, out of teamsters funds.
The Chairman. This witness would not know about that.
Mr. Kennedy. No, he does not.
The Chairman. Then that can be introduced later.
Mr. Kennedy. Was there another request that was made of you by
Mr. Beck, namely to provide some refrigerator trailers ?
Mr. Fruehauf. Yes. I don't recall wlien it was, but I tliink it was
in 1955, for the Sunset Distrubuting Co.
Mr. Kennedy. Does he have an interest in the Sunset Distributing;
Co.?
Mr. Fruehauf. I understand his son has an interest in it. They
were having some difficulty with their refrigeration plants, and he
requested the loan of four insulated trailers for a matter of a few
weeks.
Mr. Kennedy. Were those arrangements made ?
Mr. Fruehauf. Yes, sir.
Mr. Ivennedy. Mr. Chairman, we have the exchange of telegrams
and letters in connection with those four trailers.
The Sunset Distributing Co. distributes beer ?
Mr. Fruehauf. Yes.
Mr. Kennedy. Did you understand that Mr. Beck's son, Dave Beck,
Jr., was interested in that company ?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. And they wanted these four trailers to put their
beer in at the time ?
Mr. Fruehauf. Yes, sir.
The Chairman. Was any charge made for it?
Mr. Fruehauf. No, sir, Mr. Chairman.
The Chairman. The Chair hands you what purports to be a photo-
static copy of a telegram addressed to you and also a photostatic copy
IMPROPER ACTIVITIES IN THE LABOR FIELD 2245
of a letter addressed to you by Mr. Dave Beck. The telegram seems
to be from Mr. F. V. Bistrum. Will you examine those photostatic
copies and see if you identify them as such ?
(Documents handed to witness.)
(The witness conferred with his counsel.)
Mr. Fruehaut. I do.
The Chairman. They will be made exhibits 185 and 185A, respec-
(Tlie documents referred to were marked "Exhibits Nos. 185 and
185 A," for reference, and will be found in the appendix on pp. 2531-
^Mr Kennedy. Mr. Fruehauf , after the loan was made by the Team-
sters Union to you, the loan for $1,500,000, Mr. Dave Beck then came
to you and asked for a loan of $200,000 ?
Mr. Fruehauf. Correct.
Mr. Kennedy. The second thing was he came to you and asked you
to put up some money for the toy trucks ?
Mr. Fruehauf. Correct.
Mr. Kennedy. And you put up $5,000 and arranged for the Asso-
ciated Transport Co. to put up $9,000 or at least $5,000 ?
Mr. Fruehauf. Yes.
Mr. Kennedy. And he made arrangements for you to purchase a
boat, which you did for 25 percent off ?
Mr. Fruehauf. Twenty.
The Chairman. The letter shows 25 percent off. You better get
that straight.
Mr. Fruehauf. I didn't handle the matter, Mr. Chairman. It was
my impression that it was 20 percent. .
The Chairman. It was another type of boat that you did wire him
he could get 25 percent off, I think. Apparently this was invoiced
at 25 percent off the list price.
Mr. Kennedy. Then you made the arrangements for the boat to go
west, on one of your trailers ?
Mr. Fruehauf. Yes.
The Chairman. That boat weighed 3,500 pounds, did it not?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. That was for the son, Dave Beck, Jr. ?
Mr. Fruehauf. Yes.
The Chairman. What would the tariff be on a boat like that?
Mr. Fruehauf. I made a check on that, Mr. Chairman.
The Chairman. Can you give us some estimate ?
Mr. Fruehauf. Yes. If you ship a boat like that by rail it would
cost in the neighborhood of $500.
The Chairman. About $500 w^orth of service besides the discount
that went into that transaction ?
Mr. Fruehauf. Yes,
Mr. Kennedy. So it was the $200,000 loan, the toy truck deal,
getting the boat and then shipping it to Seattle, the use of your plane
on 3 or 4 occasions, when Mr. Beck asked for it, the use of the chauffeur
and car in Paris when he was there on several occasions, the use of
the chauffeur and car for 6 weeks when these 3 girls were in Europe,
touring Europe, the use of the 4 trailers in Seattle so that his son
could have the beer stored in the 4 refrigerated trailers, is that right?
Mr. Fruehaup'. Correct.
2246 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy, Is there anything else ? There are some six requests
that he made.
Mr, Fruehauf. Not that I can recall,
Mr, Kennedy. Have you ever made any requests of him?
Mr. FKUEHA.TJr. No, sir.
Mr. Kennedy. Did you ask him to intervene in any labor difficul-
ties that you have had ?
Mr, Fruehauf, No, sir,
Mr, Kennedy. There have been occasions that you have attempted
to get the Teamsters Union as the organizational unit rather than
some other union, I understand. Have you ever attempted to get
the teamsters into your plants rather than any other union ?
Mr. Fruehauf. No, We have no teamster employees in our plants,
^ Mr, Kennedy, This is a memoranduna dated August 15, 1955,
signed by Arthur Condon, memorandum for the files, re Fruehauf, It
reads :
Mr. Barker telephoned me that he and Roy Fruehauf felt that the Great Plains
plant should be disposed of unless the labor contract can be made with the
teamsters instead of with the CIO. Fruehauf has an offer for the plant. At
his request, I plan to go to Detroit some day this week, probably Wednesday,
Thursday, or Friday, to confer with him, Rushmer, and with other Fruehauf
officials, as to what can be done to get the teamsters in.
What does that mean ?
Mr. Fruehauf, I probably think he is probably referring to the
drivers at that plant. All the drivers at our other plant belong to
the teamsters. It certainly would cause utter confusion to have driv-
ers of another union, at one plant, because these drivers move about
transferring trailers from one branch and plant to the other.
Mr. Kennedy. There is a memorandum here also dated August 11,
1955, re Fruehauf, and again signed by Arthur Condon :
This morning I gave Roy Fruehauf the following information on the telephone :
Former Ice Commissioner Knudson told me that a New England trucker said
that a letter is being circulated among the truckers in that area criticizing
Fruehauf, Beck, and Seymour, on the ground that the strike settlement was the
result of a deal engineered by these men. The letter was said to be most critical
of Fruehauf, claiming that these tactics give Fruehauf a hold over small truckers.
I suggest that at the lunch today in Chicago, the fact be stressed that the ACT
Committee does not function in the realm of labor disputes, and that Seymour
and the other truckers fight even harder against Beck in labor negotiations than
do other truckers.
Have you any explanation for that ?
Mr. Fruehauf. I have heard of that letter, but I have never seen it.
Mr. Kennedy. Was there any deal arranged between you ?
Mr. Fruehauf. None whatever.
Mr. Kennedy. Mr. Chairman, in connection with that, at least at
the present time, we have found no evidence on this matter. I thought
I should read this into the record, the memorandum so that he may
make any comment.
The Chairman. Is there anything further ?
Senator Kennedy. At the time the loan was made to Mr. Beck, were
you still involved in a dispute with Mr. Kolowich ?
]Mr. Fruehauf. Yes, sir ; Senator.
Senator Kennedy. So that, actually, the reason why it went through
the Brown Equipment Co. was that it would have been bad for you,
I suppose, to have made a direct loan to Mr. Beck after you received
IMPROPER ACTIVITIES IN THE LABOR FIELD 2247
the $11/2 million loan from the teamsters, which was of gi^eat help to
you in maintaining your position in the company in the competition
with Mr. Kolowich.
Mr. Frueiiauf. I think I ought to explain this.
Mr. Kolowich's company that bought the large block of stock was
the Detroit & Cleveland Navigation Co. Under accumulated voting,
there was no way we could prevent him from getting on our board.
So we elected to buy into his company, the Detroit & Cleveland
Navigation Co. That proxy fight took place on April 20 or 22 of
1953 and we were successful in taking over his company.
On May 2 or 3, we had our own stockholders meeting in Fruehauf
Trailer Co., and we were also successful there.
Senator Kexxedy. Was he on your board at the time the loan was
made to Mr. Beck ?
Mr. Fruehauf. No. He never got on our board.
Senator Kennedy. Was there any difficulty then, about minority
stockholders ?
Mr. Fruehauf. No, none whatever, because when we took over
Detroit & Cleveland Navigation, that prohibited him from voting the
block of stock in that company.
Senator Kennedy. I am still not clear as to why there was this
rather elaborate mechanism set up for the loan to Mr. Beck. Not only
did you not give him the loan direct, though you did put up a large
percent of the money, but even when the Brown Co. gave liim the loan
they did not list it to ^Ir. Beck directly, but listed it to the transport
committee, so Mr. Beck's name was never involved.
Why this rather elaborate procedure ?
Mr. Fruehauf. I don't know about what went on in Brown Equip-
ment and associates.
Senator Kennedy. T just want to get it on the record as to why
you did not loan Mr. Beck the money direct, but why you had to go
through j\Ir. Seymour and Mr. Brown. Then, I would like to under-
stand why when they did it, they did not put Mr. Beck's name in but
said they loaned it to the transport committee.
Mr. Fruehauf. I don't know.
Senator Kennedy. A^liat is the reason ?
Mr. Fruehauf. Well, our reason was that Fruehauf Trailer Co.
had no business transactions with Mr. Beck and we did not deem it
advisable to loan the money directly to him.
Senator Ivennedy. I do not feel that that is a completely satisfac-
tory explanation, considering that you did then loan $175,000 to the
Bro^vn Co.
]\Ir. Fruehauf. But Brown was a substantial company and had an
excellent credit rating.
Senator Kennedy. ^Vhat security did they give you for that
$175,000?
Mr. Fruehauf. A note.
Senator Kennedy. Signed by whom ?
Mr. Fruehauf. By the president of Brown.
Senator Kennedy. And Mr. Seymour ?
Mr. Fruehauf. Yes, sir.
Senator Kennedy. He gave you his personal note for $175,000 ?
Mr. Fruehauf. No ; the company's note.
2248 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Kennedy. They gave you a company note ?
Mr. Fruehauf. Yes.
Senator Kennedy. But the only collateral that Mr, Seymour's com-
pany had for the loan to Mr. Beck was Mr. Beck's personal note?
Mr. Fruehauf. Yes, sir.
Senator Kennedy. In other words, you switched it from your com-
pany and your shoulders to Mr. Seymour's shoulders ?
Mr. Fruehauf. Yes, sir.
Senator Kennedy. Wliat is your relationship with Mr. Seymour?
Is he a customer of yours or are you a customer of his ?
Mr. Fruehauf. He is a large customer of ours.
Senator Kennedy. What he buys from you he can buy from alter-
nate sources, can he not?
Mr. Fruehauf. Yes, sir.
Senator Kennedy. Wliy was he willing to do this extensive favor
for you ? It was extensive. Why should he put up his own note to
guarantee your note ?
Mr. Fruehauf. The only thing I can think, Mr. Senator, is that the
note was to go to the Manufacturers Trust Co. and this was just an
accommodation until such time as Mr. Seymour could get the note
transferred over to the Manufacturers Trust.
The Chairman. The note was actually signed by Mr. Norton, was
if not, instead of by Mr. Seymour ?
Mr. Fruehauf. I could not answer that, Mr. Chairman. I know
it was signed by the president of Brown Equipment.
The Chairman. The photostatic copy is here, if you wish to see it,
and it shows it was signed by Mr. R. T. Norton, treasurer. I think
you were mistaken, but I did not want to leave the record that way.
You may look at the note and correct your testimony if you desire.
(A document was handed to the witness.)
(The witness conferred with his counsel.)
The CuAHtMAN. You were mistaken about it being signed by the
president ?
Mr. Fruehauf. Yes.
The Chairman. It was signed by Mr. Norton ?
Mr. Fruehauf. Yes, sir.
The Chairman, That may be made exhibit No. 186 for reference.
(The document referred to was marked "Exhibit No. 186" for
reference, and will be found in the appendix on p. 2533.)
Senator McNamara. I would like to ask you, Mr, Fruehauf, how
long has this association or friendship with Mr. Beck prevailed? Is
it a business association, or just a friendship?
Mr, Fruehauf. I have had no social activities with Mr. Beck. All
of my relationships with him have been through the Independent
Advisory Committee.
Senator McNamara. The what ?
Mr. Fruehauf. The Independent Advisory Committee to the
Trucking Industry.
Senator McNamara. And that is a nonprofit organization ?
Mr. Fruehauf. Yes.
Senator McNamara. It is not social or it is not business?
Mr. Fruehauf. Well, it is a trade organization.
Senator McNamara. What is that?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2249
Mr. Fruehaijf. It is a trade organization on behalf of the trucking
industry.
Senator McNamar.\. Then, it is a business association, is that not
right?
Mr. Frueiiauf. Yes.
Senator McNamara. How long has this association been in exist-
ence ?
Mr. Fruehauf. Since 1950.
Senator McNamara. About 1950 ?
Mr. Fruehauf. Yes.
Senator McNamara. Is that about the time you moved the predomi-
nance of your operation out of Detroit ?
Mr. Fruehauf, No.
Senator McNamara. When did you move the predominance of your
operations out of Detroit to the other town ? It was about that time,
was it not ?
Mr. Frufjiauf. No. I would say. Senator, that it dates back to
1945 or 1946.
Senator McNamara. And it was subsequent to your moving out of
Detroit, the major portion of your operations?
Mr. Fruehauf. Yes.
Senator McNamara. Thank you.
(At this point. Senator Kennedy withdrew from the hearing room.)
The Chairman. I would like to ask you this: In addition to the
$200,000 loan, and the number of favors you did, what would you say
was their value in thousands of dollars, which you did for Mr. Beck,
including the boat, the airplane trips, the paying of the girls' expenses,
loaning him the 4 or 6 refrigerators and so forth ?
What would you say the money value of those favors was ?
(At this point. Senator Kennedy entered the hearing room.)
Mr. Fruehauf. I would have to recount that a little bit, Mr. Chair-
man.
The Chairman. It would be several thousand dollars, would it not?
Mr. Fruehauf. Yes.
The Chairman. If you recount it, include that in your letter when
you give us the other information, will you, what you regard as the
value of the services and favors that you did, in dollars, the dollar
value of the favors.
Mr. Fruehauf. Yes, sir.
(At this point. Senator Kennedy withdrew from the hearing room.)
Mr. Kennedy. Other than what we have mentioned this afternoon,
were there any other payments directly or indirectly to Mr. Dave
Beck?
Mr. Fruehauf. Not to my knowledge.
Mr. Kennedy. You would know if there had been, I expect?
Mr. Fruehauf. Yes.
Mr. Kennedy. There have not been ?
Let me ask you again. Have there been any other moneys or favors,
any other moneys or gifts given to Mr. Beck, directly by you or any of
your associates ?
Mr. Fruehauf. No, sir.
Mr. Kennedy. That is, other than the ones we have mentioned here
today ?
Mr, Fruehauf. No, sir.
2250 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Did you laiow at the time you were making this
$5,000 consideration, and getting the consideration from Mr. Seymour,
that this money was actually a consideration to Nathan Shefferman,
Dave Beck, Jr., and Norman Gessert?
Did you laiow that it was a consideration to them so that they could
could profit out of the transaction?
Mr. Fruehauf. No, sir.
The Chairman. You never heard of that?
Mr. Fruehauf. No, sir.
The Chairman. IVlien did you first
Mr. Fruehauf. I learned of it in the past week or so.
The Chairman. You learned of it since these hearings ?
Mr. Fruehauf. Yes.
The Chairiman. You did not know at the time ?
Mr. Fruehauf. No, sir. I just presumed it was some promotion
company that the union had hired.
The Chairman. Senator Curtis ?
Senator Curtis. How long have you known Mr. Beck?
Mr. Fruehauf. Since 1950, Senator.
Senator Curtis. How often would you see him since that time, how
frequently?
Mr. Fruehauf. We would have meetings of the Independent Advis-
ory Committee approximately once a month, sometimes oftener.
Senator Curtis. And that was created in what year?
Mr. Fruehauf. In 1950.
Senator Curtis. And is it still in operation ?
Mr. Fruehauf. Yes, sir.
Senator Curtis. Just why did you grant all of these favors to Mr.
Beck?
Mr. Fruehauf. Well, I just considered it in the normal course of
business. Mr. Beck had granted a considerable favor in saving our
company.
Senator Curtis. He had personally ?
Mr. Fruehauf. No, sir ; the union.
(At this point, Senator Kennedy entered the hearing room.)
Senator Curtis. You say it all stemmed from that?
Mr. Fruehauf. Yes, sir.
Senator Curtis. Do you know why Mr. Seymour extended all these
favors to Mr. Beck?
Mr. Fruehauf, Well, he was well acquainted with him also, through
the Independent Advisory Conmiittee.
Senator Curtis. He said that he made the loan as a favor to you.
He is one of your biggest customers, is he not ?
Mr. Fruehauf. Yes. I think that is a fair statement.
Senator Curtis. You believe that that was his motive?
Mr, Fruehauf. Yes, sir.
Senator Curtis. That is all.
The Chairman. The Chair hands you a series of seven memoran-
dums taken from the files of Mr, Landa, I will ask you to examine
them. They are all, I believe, addressed to you. See if you identify
them,
(Documents handed to the witness.)
(The witness conferred with his counsel,)
IMPROPER ACTIVITIES IN THE LABOR FIELD 2251
Mr. Fkueiiauf. jNIr. Cliairnian, these are not addressed to me.
These are memorandums of ADC — ■ —
The Chairman. I may be mistaken about that. Do you identify
them ? Can you verify them as being photostatic copies of memoran-
dums that came to your attention %
Mr. Fruehauf. I coukl not verify anything that was a memoran-
dmn for the file.
The Chairman. All right. I am sorry, I thought you were
familiar with them. You camiot identify them, so you may return
them.
Is there anything further ?
Senator Ivennedy. These files which say "Re Fruehauf," you don't
know anything about these, but these just involve a strike involving
the Freuhauf Co., is that correct ?
Mr. Fruehauf. I don't know what he is referring to.
Senator I^nnedy. Was William Davis, Sr., vice president of As-
sociated Transport ?
Mr. Fruehauf. I believe so.
Senator Kennedy. It says "Memorandum to file," and it says "Frue-
hauf strike." Were you involved in a strike in New England?
Mr. Fruehauf. No, sir.
Senator Ejennedy. Do you know why your name is up here?
Mr. Fruehauf. The only extent we were involved in is when the
truckers are on strike, we are unable to sell any merchandise.
The Chaieman. As I understand it, you sell trucks, and when they
are on strike, they do not buy trucks ?
Mr. Fruehauf. They do not pay for the ones they have, either,
Senator.
Senator Kjennedy. You don't know who A. D. C. is? Is that
Arthur Condon ?
Mr. Fruehauf. I would presume that is his initials.
Senator Kjennedy. And he is a lawyer for the Associated Trans-
port Association ?
Mr. Fruehauf. He is legal counsel for the Independent Advisory
Committee.
Senator Ejennedy. You are a member of that ?
Mr. Fruehauf. Yes.
Senator Kjennedy. We have one of these things from Arthur Con-
don, a letter to Wallace Barker. It says :
I enclose the correspondence relating to Fruehauf' s labor situation at Albany
which Mr. Einar Mohn gave to me, and which I discussed with you on the
phone this morning.
Obviously, Arthur Condon, in this series of memorandums, was
working for you and for the Independent Transport Association, is
that correct ?
Mr. Fruehauf. I don't know what you are referring to, Senator.
If you would tell me something about the letter, I would refresh
my recollection.
Senator I&:nnedy. "Wliat is Mr. Landa's comiection with you?
Mr. Fruehauf. He has been our counsel for a good many years.
Mr. Kennedy. He is also associated with your company ?
Mr. Fruehauf. Yes.
Senator Kennedy. All of these things say "A copy to Mr. Landa,"
so they must involve your company to some degree. They all say, "Re
2252 IMPROPER ACTIVITIES IN THE LABOR FIELD
Fruehauf strike," and then they also have a copy showing Mr. Landa
is connected.
Mr. Fruehauf. I would suggest that you ask Mr. Landa that ques-
tion. I think it has been a policy of his firm with various lawyers
that he has working for him, to send him copies of all correspond-
ence.
Mr. Kennedy. There was an offer, was there not, in the end of
1953, on this $1,500,000 loan, there was an offer, was there not, by
Mr. Landa to give certain profits or share certain profits with Mr.
Beck?
Mr. Fruehauf. Yes. I learned about that 4 or 5 months after
we negotiated the loan.
Mr. Kennedy. That arrangement was made initially between Mr.
Simon Wampold and Mr. Landa, and you did not know about it at
the time ?
Mr. Fruehauf. No, sir; I had no knowledge of it.
Mr. Kennedy. Mr. Landa was going to purchase 40 percent of the
stock from the foundation and he was going to split the profits with
Mr. Beck, or he made an offer and that offer was turned down by Mr.
Dave Beck?
Mr. Fruehauf. Yes, sir.
Mr. Kennedy. You don't know why he turned it down ?
Mr. Fruehauf. No, sir.
Senator Kennedy. Mr. Fruehauf, it seems to me the fact that the
teamsters loaned you this $1,500,000, tliat you then were the means by
which Mr. Beck received $200,000, the whole financial transaction
that was involved, received it personally to pay personal expenses,
throws a cloud over him and places him, it seems to me, in a very
critical relationshij) in relation to his responsibility to his members.
You would agree with that ?
Mr. Fruehauf. Would you rephrase the question?
Senator Kennedy. You consider that Mr. Beck acted properly
when the teamsters loaned you $1,500,000 for him then to come back
to you and seek a loan of $200,000 when he represented a number of
your employees in bargaining relationships with you, and the people
you were doing business with ?
Mr. Fruehauf. The number of employees we had in the teamsters
are very much in minority in relation to the total.
Senator Kennedy. It is the dominant union of your customers, is
it not?
Mr. Fruehauf. Yes, sir.
Senator Kennedy. And you arranged for the loan to be gotten
through a group who did
Mr. Fruehauf. Of course, at that point, I would like to remind the
Senators, there is over 7 million drivers in the United States, and I
don't know exactly but I have heard it said that the teamsters union
composes some one million four hundred thousand or five hundred
thousand people.
Senator Kennedy. You have to admit that the whole loan proce-
dure was very unusual. You were doing Mr. Beck a considerable
favor as was Mr. Seymour in arranging it the way you did. That is a
fair statement, is it not?
Mr. Fruehauf. That is right.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2253
Senator Kennedy. Do you think it is proper for Mr. Beck, because
lie was the means by whicli you received this $1,500,000 of teamsters'
money, and because lie is the bargaining representative of a great
many teamsters who work for Mr. Seymour's company and many of
the related companies, work for many of your best customers, do you
feel it is proper for him, and I am asking you this as a general
question, is it proper for a trade union leader in that position to ask
for that sort of treatment from you, for special financial favors ? Do
you feel that that is good practice ?
Mr. P^RUEHAUF. Senator Kennedy, if we can roll the curtain back
3 or 4 years, hindsight is always better than foresight.
Senator Kennedy. I know you regret this particular deal, but
what I am wondering about is whether you think the procedure, even
with the sight you had at that time, whether you think that is a
proper relationsliip between business and labor leaders?
Mr. Fruehaut. Well, I
Senator Kennedy. In other words, do you think that this com-
mittee should consider recommending that there be limitations placed
on the rights of labor leaders to carry on personal financial dealings
with companies which their union has loaned money or companies
where they are the bargaining agents for the employees in that com-
pany ?
Mr. Fruehaut. Well, I would have no opinion on that.
Senator Kennedy. You don't think based on your experience that
it would be well to consider that?
Mr. Fruehaut. I didn't hear what you said.
Senator Kennedy. Don't you think, based on your experience, that
it would be well if some limitation be placed on the rights of a trade
union leader to have personal financial dealings from which he benefits
personally with a company for which he has arranged a loan from his
union's treasury fund ?
Mr. Fruehaut. Well, I don't see where the union was injured, Mr.
Senator.
Senator Kennedy. Where the union was injured?
Mr. Fruehaut. Yes.
Senator Kennedy. No. I will agree that the union was not injured.
The question really is whether it was a proper relation, whether the
reason you gave Mr. Beck the money was because he had invested
teamsters' money in your company. You consider that that doesn't
injure the teamsters?
Mr. Fruehaut. Well, the teamsters received a very good return on
their money, and they got all of it back.
Senator Kennedy.' If a bank director arranges money, a loan, from
his bank to a company, he is not then supposed to arrange a personal
financial dealing involving $200,000 with a company which has been
the beneficiary of his bank's action, particularly if the bank's loan was
as a result of his recommendation. You would call that improper,
would you not, and so would the law?
Mr. Fruehaut. Yes, sir.
Senator Kennedy. Is that not just what we have, a comparable
case? Don't you think his responsibility to the union funds is as
great as a bank director's is to the funds in the bank?
Mr. Fruehaut. Well, I repeat that his request was made months
after the loan was negotiated, and the union had ample collateral, and
2254 IMPROPER ACTIVITIES IN THE LABOR FIELD
tliey were getting a handsome return based on what they had previ-
ously been getting on their investments.
Senator Kennedy, But you stated yourself, Mr. Fruehauf , that you
gave the loan in appreciation to Mr. Beck, I assume for arranging the
first loan to you ?
Mr. Fruehauf. That is correct.
Senator Kennedy. And you subsequently did six other favors? I
just think Mr. Beck's position should be that of a bank director or
anyone else in the fiduciary position or a trustee, that he should not
be in a position to receive loans in appreciation for loaning the union
treasury money. I would not think it would be proper for him.
Mr. Fruehaue. Well, I regarded the two things as two separate
items.
Senator Kennedy. The only thing that causes me a little concern
is that some of these business people who come in here see nothmg
wrong.
Senator Goldwater suggested there was nothing wrong, that they
come out and do these things because the gun is at their heads. They
don't seem to see anything wrong with these practices, where Mr.
Beck has been irresponsible for the union's money, and he has used
his position as chief bargainer with these companies. He sees nothing
wrong with that. We understand the pressures you were under, but
I do not understand your coining today and saying there was nothing
wrong with it.
Mr. Fruehauf. I repeat the two deals were distinctly separate,
Mr. Senator. The union was amply protected, with a handsome in-
terest rate.
Senator Kennedy. Mr. Fruehauf, you testified that they weren't
separate, because the money was given in appreciation, and I will use
your words, in appreciation to Mr. Beck; so they were not separate.
Mr. Fruehauf. The money that was loaned to the Fruehauf Fovm-
dation was to buy stock in the Fruehauf Trailer Co. The loan to
Mr. Beck had nothing to do with the first loan. But, naturally, there
had to be an element of appreciation in there for a man that came to
our rescue when our corporate existence was in peril.
iSenator Kennedy. That is all, Mr. Chairman.
The Chairman. Any further questions?
If not, thank you very much, Mr. Fruehauf.
The committee will stand in recess until 2 o'clock tomorrow.
(Members present at the taking of the recess were Senators Mc-
Clellan, Kennedy, McNamara, and Curtis.)
(Thereupon, at 4 : 55 p. m., the hearing recessed, to reconvene at 2
p. m., Tuesday, May 14, 1957.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR 3IANAGEMENT FIELD
TUESDAY, MAY 14, 1957
United States Senate,
Select Commitiee on Improper Activities,
IN THE Labor or Management Field,
Washington^ D. C.
The select committee met at 2 p. m., pursuant to Senate Resolution
74, agreed to January 30, 1957, in the caucus room, Senate Office
Building, Senator John L. McClellan (chairman of the select com-
mittee) presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irving M. Ives, Republican, New York; Senator Jolin F. Kennedy,
Democrat, Massachusetts; Senator Sam J. Ervin, Democrat, North
Carolina; Senator Pat McNamara, Democrat, Michigan; Senator
Barry Goldwater, Republican, Arizona; Senator Carl T. Curtis, Re-
publican, Nebraska.
Also present: Robert F. Kennedy, chief counsel; Jerome Alder-
man, assistant counsel ; Carmine Bellino, accounting consultant ; Ruth
Young Watt, chief clerk.
The Chairman. The committee will be m order.
(Members of the committee present at the convening of the ses-
sion were Senators McClellan, Ives, Ervin, McNamara, Goldwater,
and Curtis.)
The Chairman. Mr. Kennedy, call the next witness.
Mr. Kennedy. Mr. Alfons B. Landa, Mr. Chairman.
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate select committee shall be the truth, the whole
truth, and nothing but the truth, so help you God ?
Mr. Landa. I do, sir.
TESTIMONY OF ALFONS B. LANDA, ACCOMPANIED BY HIS COUNSEL,
CLARK M. CLIFFORD
The Chairman. Will you state your name, your place of residence,
and your profession or occupation, please ?
Mr. Landa. My name is Alfons Landa, and my residence is 84 Kalo-
rama Circle. ]My office is 1000 Vermont Avenue, and I am an at-
torney at law.
The Chairman. Thank you very much. You also have comisel"
present, do you ?
Mr. Landa. Yes, I do.
The Chairiman. Counsel will state his name, for the record, please.
2255
89330— 57— pt. 7 18
2256 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Clifford. My name is Clark M. Clifford, and I am an attorney
in Washington, D. C, at 1523 L Street, and I am a member of the
bar of the District of Colmnbia.
The Chairman. Thank you.
Mr. Kennedy. Mr. Landa, you are connected with the Fruehauf
Trailer Co.?
Mr. Landa. Yes, I am a director of the Fruehauf Trailer Co.
Mr. Kennedy. How long have you been connected with them ?
Mr. Landa. I think mv relationshi]) began in the early part of
1940.
Mr. Kennedy. In 1940?
Mr. Landa. Yes, sir.
Mr. Kennedy. You are a director in that company since that time?
Mr. Landa. I have been a director, I believe, since the early part
of 1950.
Mr. Kennedy. A^^lat was your connection in 1940, and what did
you do for them ?
Mr. Landa. I was Washington counsel.
Mr. Kennedy. And you became a director in 1950?
Mr. Landa. Yes, sir.
Mr. Kennedy. Did you own some stock in the Fruehauf Trailer Co. ?
Mr. Landa. Yes; I own substantial amounts of stock.
Mr. Kennedy. Was that purchased around 1950 ?
Mr. Landa. Well, it was purchased at various times. I purchased
some in 1950, and I purchased a great deal before that, and some of
which I sold or transferred. I purchased a great deal in 1953.
Mr. Kennedy. That is w^hat I am leading up to: At the time the
loan was made from the teamsters union, wluit percentage of the stock
did you own ?
Mr. Landa. Percentagewise, I would say, wasn't very great, but it
was a substantial block of stock. I would say I owned in the neigh-
borhood of 10,000 or 12,000 shares at the time, ni 1953.
Mr. Kennedy. How many shares were outstanding ?
Mr. Landa. About 1.2 million or 1.3 million, I believe.
Mr. Kennedy. Were you an officer in the company at the time?
Mr. Landa. No, sir.
Mr. Kennedy. You were not ?
Mr. Landa. No, sir.
Mr. Kennedy. Now, did you have anything to do with the procur-
ing of the loan from the teamsters union of $1.5 million ?
Mr. Landa. Mr. Fruehauf advised me that Mr. Beck liad volun-
teered to help him in connection with the proxy fight. He advised
me that he had asked Mr. Beck for a loan and he asked me to accom-
pany him to Mr. Beck's office to discuss that loan with Mr. Beck.
Mr. Kennedy. You had not heard of it prior to that time?
Mr. Landa. Well, I only heard of it after Mr. Fruehauf had talked
with Mr. Beck, and JNIr. Beck had stated to Mr. Fruehauf that if he
liad known of Mr. Fruehauf's earlier troubles he might be able to
help him. Mr. Fruehauf and I were attempting to get financial
assistance in the proxy fight from New York bankers.
Mr. Kennedy. At that time were you acting as the attorney for
the Fruehauf Trailer Co. or acting as a stockholder or in what
capacity ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2257
Mr. Landa. Well, I was acting as attorney for the company, and
I was acting in protection of my own interests.
Mr. Kennedy. So you had a meeting with Mr. Beck at the teamsters
headquarters?
Mr. Landa. That is correct.
Mr. Kennedy. And the arrangements were made at that time for
the loan of $1.5 million ?
Mr. Landa. Yes, sir.
Mr. Kennedy. Now, did you take any further part in that loan?
Mr. Landa. I became the endorser, the personal endorser of that
loan. I endorsed it jointly and severally with Mr. Fruehauf.
Mr. Kennedy. You endorsed it jointly and severally with Mr.
Fruehauf ?
Mr. Landa. Yes, sir.
Mr. Kennedy. Was this because of your interest or your stock in the
company, or again as the attorney for the company?
Mr. Landa. It was because of my interest in the contest, and my pro-
tection of my own assets as well.
Mr. Kennedy. Which was the 12,000 shares of stock. That is ap-
proximately how much you had?
Mr. Landa. About a quarter of a million dollars worth, I think.
Mr. Kennedy. Did you have anything to do with it beyond that,
going on the note? Were there any arrangements made with you, by
Mr. Fruehauf with you ?
Mr. Landa. Yes. Originally it wasn't contemplated when Mr,
Fruehauf discussed the loan with me, that I would become an endorser
and thus exposed to a million and a half liability. I stated to Mr.
Fruehauf after the meeting that inasmuch as I was exposing myself
to the loss, if there were any profits, I should share in the profits. We
had a discussion and my best recollection is that I thought I should
receive one-half as compensation for my endorsement, and we settled
on 40 percent and we made the agreement whereby I became the equi-
table owner of 40 percent of the stock purchased when each purchase
was consummated.
Mr. Kennedy. To whom was the money to be loaned, $1.5 million?
Mr. Landa. The Fruehauf Foundation.
Mr. Kennedy. That is a charitable foundation ?
Mr. Landa. Yes, sir.
Mr. Kennedy. The arrangements were made that you could pur-
chase then 40 percent of the stock from the charitable foundation ?
Mr. Landa. Yes, sir.
Mr. Kennedy. Are you an officer of the foundation?
Mr. Landa. I am, sir.
Mr. Kennedy. And Mr. Fruehauf is an officer of the foundation?
Mr. Landa. Yes, sir.
Mr. Kennedy. So you and Mr. Fruehauf as trustees of the founda-
tion made this arrangement with you as an individual ?
Mr. Landa. Correct.
Mr, Kennedy. That you could buy or you could obtain 40 percent
of the stock ?
Mr. Landa. That is correct.
Mr. Kennedy. I would have thought from your explanation earlier
that the reason you went on the note was because of your own financial
2258 IMPROPER ACTIVITIES IN THE LABOR FIELD
interest, namely a quarter of a million dollars. Why was it necessary
to give you this added amount ?
Mr. Landa. When I exposed myself to $1.5 million liability, I felt
that if there was any protit I should certainly share in it.
(At this point, Senator Kennedy entered the hearing room.)
The Chairman. Let me clear up this. You had the right to pur-
chase under your agreement 40 percent of all stock that was purchased
by the company ?
JVIr. Landa. By the foundation ; that is correct ; yes, sir.
The Chairman. By the foundation ?
Mr. Landa. Yes, sir.
The Chairman. You would pay, I assume, whatever the cost of it
was?
Mr. Landa. I paid exactly the same cost as the foundation paid.
The Chairman. Then, if there was any profit of course, your stock
participated in the profit.
Mr. Landa. That is right, and if there was any loss, the founda-
tion would not have to bear that proportion of the loss.
The Chairman. Your stock would bear that proportion of the loss ?
Mr. Landa. Yes, sir.
Mr. Kennedy. You could purchase the stock at cost, is that correct ?
Mr. Landa. Yes, sir.
Mr. Kennedy. If your stock went down in price, then you would
still have to buy it ^
Mr. Landa. Oh, yes, yes. I was under obligation to buy it, and I
agreed to buy and the foundation agreed to sell.
Mr. Kennedy. Was that a written agreement between you and the
foundation ?
Mr. Landa. Yes, sir.
Mr. Kennedy. It was?
Mr. Landa. Yes, sir.
Mr. Kennedy. Was that made subsequently to the loan of the $1.5
million ?
Mr. Landa. Practically simultaneously.
Mr. Kennedy. But it was a written agreement?
Mr. Landa. Yes, sir.
Mr. IvENNEDY. Did you purchase the 40 percent of the stock ?
Mr. Landa. I purchased part of it. Some time in December I was
advised by Mr. Fruehauf that the union had changed one of the terms
of the loan. The union was now demanding all of the dividends.
When the loan was originally granted, the dividends were to be paid
to the foundation, and the foundation in turn would pay the interest.
Now, eventually they demanded all of the dividends and that placed
me in an untenable tax position.
I went to Mr. Fruehauf and pointed out to him that the terms of the
original agreement having been changed, I could no longer purchase
40 percent of the stock being bought, and we now entered into another
agreement, releasing me from buying the stock, and releasing the
foundation from selling the stock.
The Ciiairiman. Let me inquire. How did it happen that after the
loan was made and the contract was consummated, then there was a
change in the demand that not only the foundation pay interest but
that it turn over all of the dividends and the earnings to the union.
IMPROPER ACTIVITIES EST THE LABOR FIELD 2259
Mr. Landa. I never knew liow that happened, Mr. Chairman, but
I was advised by Roy Fruehanf that that was the final demand or
rather that was the demand, and we acceded to it.
The Chairman. That is a rather strange performance, is it not,
you being a lawyer, after you once finalize a contract for a considera-
tion? What was the consideration that caused this modification so
that the dividends in addition to tlie interest would go to the union?
Mr. Landa. They just demanded it.
The Chairman. It was just a demand consideration?
Mr. Landa. Yes, sir, there was no consideration.
The Chairman. As a lawyer, do you believe that would be a valid
consideration ?
Mr. Landa. No, sir.
The Chairman. Thank you.
Mr. Kennedy. So you ceased to purchase this stock after December
of 1953?
Mr. Landa. Yes, sir.
Mr. Kennedy. How much had you purchased by that time?
Mr. Landa. 14,000 shares.
Mr. Kennedy. Under this agreement, that was about 20 percent
of the stock?
Mr. Landa. Yes, I would think it was a little bit more than 20.
It was about 25 or 26 percent.
Mr. Kennedy. Was this agreement terminated? This original
agreement you had made with the foundation, that was terminated?
Mr. Landa. Wei], everything remained in effect that had been done
but there was no longer any obligation on my part to continue to
purchase as the foundation purchased.
Mr. Kennedy. So that you as an officer for the foundation, and
Mr. Eoy Fruehauf as an officer of the foundation then signed a sup-
plemental agreement with you as an individual, saying that you did
not have to purchase the stock any further ?
Mr. Landa. That is correct.
Mr. Kennedy. Do you consider as an attorney that this was a
correct use of the foundation's money ?
Mr. Landa. I do, because there was considerable consideration
passing to the foundation from me. I limited the foundation's losses
by purchasing stock, and I consider the transaction was proper.
Mr. Kennedy. It appears that a charitable foundation is being
manipulated for the benefit of certain of the officers of the Fruehauf
Trailer Co. Would that not be correct ?
Mr. Landa. I don't think so, sir.
Mr. Kennedy. You made the original agreement that they would
give up 40 percent of their stock to you, or sell it to you for cost, then
the supplemental agreement was made several months later where
they changed that, and altered it so there would only be 20 percent
sold to you.
Don't you feel that was a manipulation of a charitable trust?
Mr. Landa. No, sir.
Mr. Kennedy. Did you make an offer to Mr. Dave Beck to give
him 50 percent of the profits out of the stock that you purchased?
Mr. Landa. I did make such an offer.
Mr. Kennedy. Wlij'^ would you make such an offer? Again as an
attorney, why would you make such an offer to Mr. Dave Beck?
2260 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, Landa. These are my personal funds that I was offering him,
and I was deeply grateful to Mr. Reck for the original offer that he
had made to help in this situation. He had met Mr. Koy Fruehaiif
and stated to Mr. Fruehauf he would help him. He volunteered to
help him. That was in my mind when I made the offer to give Mr,
Beck a portion of the profits.
Mr. Kennedy. What portion was that goiiig to he ^
Mr. Landa. One-half after the payment of income taxes.
Mr. Kennedy. Did yon feel grateful to him yourself?
Mr. Landa. Yes.
Mr. Kennedy. I understood that you felt that yoti were making
somewhat of a sacrifice hy going on the note at all.
Mr, Landa. Yes, I was making a sacrihce, but I still was grateful,
because the fact w^as that my personal means were entirely involved
in this proxy fight.
The Chairman. May I ask you another question. Your proposi-
tion was to give him one-half of vour profits or earnings from the
stock?
Mr, Landa, One-half of the profits from the stock ; yes.
The Chairman. What do you mean by "profits"? You mean the
dividends ?
Mr. Landa. In the event that there was a profit, and there wasn't
any certainty of profit.
The Chairman, I understand,
Mr. Landa, There might have been a very substantial loss. For
a long time the stock did have a loss on it.
The Chairman. What I am trying to determine, Mr. Landa, is
whether your proposition or proposal to give him one-half of the
profit meant one-half of the dividends as well as one-half of the sale
of stock, if you made a profit on it,
Mr, Landa, Any profit that resulted in the end of the transaction,
whether from dividends or from capital gains.
The Chairman. In other words, it included both ?
Mr. Landa. Yes, sir.
The Chairman, Both dividends and profits from sales ?
Mr, Landa, Yes, sir.
The Chairman, Or appreciation in value ?
Mr, Landa, Yes, sir.
The Chairman, He rejected that offer ?
Mr. Landa. That offer was not made to Mr, Beck personally, I
had a conversation with the union lawyer, Mr, Wampold, and I
handed him a letter and subsequently Mr, Wampold was to present
the letter to Mr. Beck.
Subsequently, I talked with Mr. Wampold and he told me that Mr,
Beck did not Avish to have the participation and I dismissed the mat-
ter from my mind.
The Chairman. Was it before or after that offer that you had
made that Mr, Beck demanded and received all of the dividends?
Mr, Landa. After that he wanted to receive all of the dividends
from the stock.
The Chairman. So instead of accepting half, he chose to take all,
Mr, Landa, Well, that isn't quite right. The dividends were now
credited to our outstanding balance. They were credited first to
IMPROPER ACTIVITIES IN THE LABOR FIELD 2261
interest and then any addition over that was used to diminish the face
of the loan.
The point that I was making was that I was constructive owner of
those shares, and I had to pay income tax on them, and when I was
not allowed to receive them the drain on my cash was too great to
continue.
The Chairman. Having made a contract and making a loan and
the interest rate being established, and the loan and transaction final-
ly consummated, and then one party coming back and demanding
it be revised without any consideration so that he will gain an addi-
tional advantage — that is a kind of a peculiar circumstance in trans-
actions between good businessmen and competent business people, is
it not?
Mr. Landa. Well, it was not according to the terms of the contract,
Mr. Chairman.
The Chairman. Was it coercion ?
Mr. Landa. I did not feel that it was.
The Chairman. You did not ?
Mr. Landa. No, sir : I just felt, as a matter of fact, I think it was
his financial adviser that made the suggestion that we not be permit-
ted to receive the dividends, and Mr. 13eck thought that was a good
idea.
The Chairman. He had some good financial advice, apparently.
I think anyone could operate successfully on that kind of advice if
they can get the other folks to recede and grant the request.
Senator McNamara. May I ask a question at this point ? You indi-
cated that you could buy the stock at the same price that the founda-
tion bought it. Was that different from the market price?
Mr. Landa. No ; they were buying it on the market.
Senator McNamara. They were buying it on the market?
Mr. Landa. Yes, sir.
Senator McNamara. There was no difference?
Mr. Landa. No, sir. It was the daily market price.
Senator McNamara. Thank you.
Senator Goldwater. I asked Mr. Fruehauf this same question yes-
terday : Suppose you had denied Mr. Beck these privileges that he
asked of the foundation fund. What would have happened?
Mr. Landa. I don't know. I don't think anything would have
happened. I don't know, though.
Senator Goldwater. Would he have withdrawn his money? Could
he have withdrawn his money, having already loaned it on
agreement ?
Mr. Landa. No ; but we could have been involved in a controversy.
Senator Goldwater. What kind of a controversy ?
Mr. Landa. We never had possession of the securities.
Senator Goldwater. You never received from Mr. Beck the stock
in Fruehauf?
Mr. Landa. No, sir. They remained as collateral to the loan in a
brokerage office chosen by Mr. Beck.
Senator Goldwater. And did the brokerage office exercise the proxv
then? ^
Mr. Landa. No; our agreement provided that we should exercise
the proxy, and that was one of the things that we sought, was the right
to exercise the proxies.
2262 IMPROPER ACTIVITIES IN THE LABOR FIELD
original agreement?
Mr. Landa. That is correct, sir.
Senator Gold water. When he came around, and wanted everything,
suppose you had said "No."
Mr. Landa. Well, I don't know.
Senator Goldwater. You are a lawyer and a businessman. What
do you think Mr. Beck could have done to cause you trouble along
the lines of the agreement or the contract ?
Mr. Landa. I don't think that there is any question that the courts
would have sustained our agreement.
Senator Goldwater. How many people administer this founda-
tion?
Mr. Landa. Four or five, and I cannot remember exactly but 4 or 5
people.
Senator Goldwater. Were they all consulted on this change in mid-
stream ?
Mr. Landa. Yes, sir.
Senator Goldwater. Now, I asked Mr. Fruehauf this question, too.
I would like to get an answer to it because I think this is the truth.
Was Mr. Beck not in a position to do damage other than immediate
monetary damage to the company if you had refused ?
Mr. Landa. I cannot answer that, Senator.
Senator Goldwater. Were you afraid of strikes ?
Mr. Landa. No, I don't believe we were.
Senator Goldwater. You do not believe, but can you say "Yes" or
"No," and take a secondary boycott situation ?
Mr. Landa. I did not think so.
Senator Goldwater. You would not have been afraid of strikes?
Mr. Landa. No, sir.
Senator Goldwater. And you feel that the law was on your side
in the contract ?
Mr. Landa. Yes, sir.
Senator Goldwater. What stranglehold does this fellow have over
you people ?
INIr. Landa. I don't think that he has any stranglehold.
Senator Goldwater. He must if you as a lawyer admit that your
contract is sound and you feel it will be upheld in the courts, and
yet Mr. Beck comes in and he is able to get you to make not a minor
cliange, but a rather substantial change in the contract that affects
not only the company, but you.
What is this?
Mr. Landa. I did not think the change, Senator, was of great
enough importance to engage in a controversy and so I accepted it.
Senator Goldwater. For yourself, but I am talking about the
foundation.
j\Ir, Landa. Well, Mr. Fruehauf was president of the foundation,
and he decided that it was desirable to accept it for the foundation
and we accepted that.
We accepted the judgment of Mr. Fruehauf.
Senator Goldwater. You cannot speak for what Mr. Fruehauf
feared had he not made a change ?
Mr. Landa. I cannot speak for him.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2263
Senator Goldwater. It is a strange magic that man has.
The Chairman. I have just one further question. How much
did it cost the foundation, this revised contract ?
Mr. Landa. How much did it cost the foundation ?
The Chairman. Yes.
]\Ir. Landa. I didn't hear you.
The Chairman. He demanded all of the dividends, and now how
much did the foundation lose by reason of that ?
Mr. Landa. They did not lose anything. Senator. The only dif-
ference was that they didn't have tlie money at their disposal. The
money was paid to the union who diminished the face of the note by
the difference between the interest and the total amount of dividends
received.
The Chairman. So it was applied on the note ?
Mr. Landa. It was applied on the note.
The Chairman. It was not, then, actually an additional "take"?
Mr. Landa. No.
The Chairman. It was actually applied to the principle of the
note ?
Mr. Landa. Yes.
The Chairman. You had not made that clear.
Mr. Landa. I am sorry, I should have.
The Chairman. Maybe I just failed to understand it that way.
But it actually cost the foundation nothing, and it simply accelerated
the payment of the note ?
Mr. Landa. That is correct, sir.
Senator Curtis. Mr. Landa, why did Mr, Beck make this loan of
$1,5 million?
Mr, Landa, Well, Mr, Beck originally, and part of this is heresay,
but Mr. Beck met with Mr. Fruehauf and he asked Mr. Fruehauf
about a controversy that was receiving tremendous notice in the press
at the time.
It was the attempt of a man to take over the Fruehauf Trailer Co,
Senator Curtis. Was it your understanding that Mr. Beck made
the loan to help the Fruehauf Co. or help Mr. Fruehauf ?
Mr, Landa. To help Mr. Fruehauf and the company, for this rea-
son : The company had a finance company that financed the sale of
trailers. The trucking industry is, according to the Small Business
Administration, 95 percent small business.
They must necessarily have terms. This man, in every business
that he had gone into, had disrupted the business. One of the things
that he sought was domination of that finance company.
That was explained to Mr. Beck and that that could disrupt and
have a great effect on the trucking industry itself if that finance com-
pany were disrupted.
Senator Curtis. And Mr. Fruehauf feared anyone that could dis-
rupt that finance company ?
Mr. Landa. Mr. Fruehauf feared Mr. Kolowich's effect on that
finance company.
Senator Curtis. Now, the facts are that Mr. Beck could have stop-
ped that finance company in its tracks, could he not, by stopping all
of the trucks in the country from moving ?
Mr. Landa. I think that is a correct assumption.
2264 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. You people were aware of that at the time you
dealt with him, w^ere you not 'I
Mr. Landa. I don't think that that passed through my mind, Sena-
tor. We were looking for help in the then most active threat that the
company had ever faced.
Senator Curtis. But Mr. Beck was a volunteer in making this
loan, and did it to help Mr. Fruehauf and the company ?
Mr. Landa. He did, sir.
Senator Cutitis. And it was never suggested that he was making
it for the benefit of the teamsters ?
Mr. Landa. Well, the teamsters received a good interest rate. That
interest rate was quite substantial at that time.
Senator Curtis. What was it?
Mr. Landa. Four percent, and in those days, that does not sound
high now, but it was substantial in those days because money was
tlien commanding a much lesser rate. So the Teamsters Union had
a good loan on which they received, I would think, a large amount
in interest by the time it was eventually paid.
Senator Curtis. That is all.
Senator Ervin. What eventually became of the stock that was
bought under this transaction ?
Mr. Landa. Well, a substantial amount of it was sold, Senator, to
pay off the loan. The balance belonged to the people who made the
loan. That is, the foundation and myself.
Senator Ervin. How much did the foundation keep ?
Mr. Landa. Well, the foundation kept everything but 14,000 shares.
Now as to the 14,000 shares, of that many were sold to repay the amount
that I owed for the stock that I had bought at the market.
Senator Ervin. Did Beck get any personal gain out of this ?
Mr. Landa. Not from me, sir.
Senator Ervin. All of the payments of the foimdation were made
directly to the Teamstei-s Union rather than Mr. Beck ?
Mr. Landa. After the first payment, upon orders from the miion —
I have forgotten wdio issued the order — all payments went directly
from the brokerage office to Mr. John English.
Senator Ervin. That was after the firet payment. What happened
about the fii-st payment?
Mr. Landa. On the firet payment, the brokei-s paid the first payment
to the Fruehauf foundation according to the agi'eement, but subse-
quently we liad to replace the amount of that first payment and it all
went to the union, the fii^t payment and everything went to the union.
Senator Ervin. Why would they make the first payment to the
Fruehauf Co. ?
Mr. Landa. Not to the company, but to the foundation because
that was the terms of the loan. It was a dividend.
Senator Ervin. You had a written contract to settle the rights of the
parties ?
Mr. Landa. Yes, sir.
Senator Ervin. And on Mr. Beck's demand, you altered a written
contract ?
Mr. Landa. We accepted the changes that were suggested. We
could understand that maybe he wanted more and so we agreed to it.
Senator Ervin. Did that make any change other than in addition to
paying the interest, that the foundation paid the dividend over, too?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2265
Mr Landa. The only dmncre it made, Senator, was that it forced
the reduction of tlie loan which had not been contemplated in the
original ao^^eement. -.■,.- .^
Senator Ervin. And that reduction was made by turnmg over the
dividends to the union?
Mr. Landa. Yes, sir. .
Senator Ervin. Did those dividends go to the union or go to Mr.
Beck?
Mr. Landa. They went to the union, sir. , . ,i i-,
Senator Ervin. I am just a little bit puzzled as to why m the world
with a written contract, legally speaking it was a contract, the com-
pany makes obeisance to Mv. Beck's demands.
Mr Landa. Senator, I understand that but many times I have ad-
vised my clients in dealing with labor unions, that sometimes it is bet-
ter to accept rather than to start a controversy. So we accepted a
change in the terms of the agreement.
Senator Curtis. May I ask you why you make that statements
Mr Landa. I make 'it because that is fact, sir, and we accepted it.
Senator Ci'rtis. Why do you single out labor imions, that it is better
to accede to their demands than not to? • o ^
Mr Landa. No, I didn't mean to convey that impression. Senator.
I meant to convey the impression that it is often better to avoid con-
troversy, that is what I was attempting to say.
Senator Curtis. But you said with labor unions, did you not i
Mr. Landa. I said with anybody and what I mean to say was not
only with labor unions, but with anybody else.
Senator Curtis. Anybody that makes a demand on you (
Mr. Landa. Yes, if it is not too unreasonable and why start some-
Senator McNamara. You really were not dealing with these people
as a labor union. You were dealing with these people as a lending
institution, were you not ?
Mr. Landa. Yes, sir. , , , • i
Senator McNamara. I do not knoAv how the labor union angle
creeps into your answer. And it seems like you reached for that one
a little bit. '
Mr. Landa. I didn't mean to. Senator.
Mr. Kennedy. On the 50 percent of the profits that you offered to
Mr. Dave Beck, did you write a letter?
Mr. Landa. I did, sir.
Mr. Kennedy. Now, you said this originated with a conversation
that you had with Mr. Simon Wampold.
Mr. Landa. That's right.
Mr. Kennedy. Mr. Simon Wampold was the attorney for the Team-
sters ?
Mr. Landa. Yes, sir.
Mr. Kennedy. What was the conversation that you hacl with him?
Mr. Landa. I cannot recall, or reconstruct the convei-sation entirely,
but I think during the course of the conversation there was a mention
of the fact that I was buving the 40 percent of the stock.
I think Mr. Wampold stated to me that, "Well, you might make
some money," and I said, "Yes, I might," and that led to my offer
to give half of whatever I might make to Mr. Beck.
2266 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Now, that was because Mr. Dave Beck had loaned
teamster money to the Fruehauf Co. ?
Mr. Landa. It was because Mr. Beck had authorized the loan, yes,
sir.
Mr. Kennedy. Now, just going back, and then I want to come back
to this point, you were talking about the fact that this was a benefit
for the Fruehauf Trailer Co. This was actually a proxy fight, is
that right?
Mr. Landa. That's right.
Mr. Kennedy. And there were people involved on the other side.
It was not just this raider that you have described, but Mr. Roy Frue-
hauf's brother?
Mr. Landa. That's correct.
Mr. Kennedy. This was a fight between brothers as to who would
control the company.
Mr. Landa. Well, it was a very serious fight, and I don't know
that you could characterize it entirely as a fight between brothers, but
brothers were involved.
Mr. Kennedy. So that one brother felt one thing was best for the
company and Eoy Fruehauf and your group thought that something
different was better for the company.
Mr. Landa. I think that is correct.
Mr. Kennedy. And then the teamsters came in and supported your
side, and the stock went up and Mr. Roy Fruehauf still has control
of the company.
Mr. Landa. That's right.
Mr. Kennedy. That was the reason for the loan, was this proxy
fight, rather than the fact that it was a loan to the company.
Mr. Landa. It was not a loan to the company. It was in connection
with the proxy fight.
Mr. Kennedy. Then, Mr. Dave Beck or the teamsters made the
loan of the $1.5 million and you felt that you should reward or express
your appreciation to Mr. Dave Beck, head of the teamsters for doing
that, and you wrote this letter on December 8.
Mr. Chairman, I have the letter.
The Chairman. The Chair presents to you a photostatic copy of
the letter dated December 8, purportedly to be from you to Mr. Dave
Beck. It is December 8, 1953, and I ask you to identify it.
(A document was handed to the witness.)
Mr. Landa. Yes, sir, this is a photostatic copy.
The Chairman. That may be made exhibit 187 for reference.
Mr. Kennedy. Could I read this into the record, Mr. Chairman?
The Chairman. It may be read.
(The document referred to follows, and will also be found in the
appendix on p. 2534.)
Mr. Kennedy (reading) :
December 8, 1953, to Mr. Dave Beck-
Written up in the top is in ink written "Final," and dash, and then
"This not used," and a dash.
Dear Dave: Confirming our conversation the Fruehauf Foundation has
bought a large amount of Fruehauf stock. It will buy a total of $1.5 million
worth of Fruehauf common stock within a short time.
I have personally endorsed Fruehauf note in the amount of $1.5 million and
in consideration therefore, 40 percent of the stock bought by the foundation is
being sold to me at the foundation's cost per share.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2267
I have already completed the purchase of 14,000 shares of stock from, the
foundation at an average cost of ,$25.77. The entire transaction vpill be com-
pleted soon and I vpill notify you the total cost of the stock, and then the cost
of the 40 percent of the stock which I bought from the foundation.
I want you to have a copy of my agreement with the foundation and I am
attaching it herewith.
All of the dividends that are received by me in excess of the amount required
to pay income tax, will be used by me to pay against the cost of these shares.
In this regard, I will make available to you my income-tax returns so that
you may know how much income tax is paid as a result of receiving these
dividends.
Subsequently, when this stock is sold, the profit will be computed. One-half of
the profit realized by me after capital gains taxes, and taxes paid on dividends,
will then be given to you as a gift.
In other words, you are to be the recipient of one-half of all net profit derived
from the 40 percent of stock referred to above. You are to receive such profit
irrespective of the source from which it may be derived, and whether it be from
dividends directly or indirectly, or from capital gains. It is my desire to make
this gift to you, and I sincerely hope that you will accept it from me.
Of course, it is understood that if there is a loss, the loss is mine and there
is no obligation on anyone else.
Sincerely,
(Signed) Alfons Landa.
Senator Ervin. I did not think tliere was anybody in the universe
like that except Santa Clans.
Mr. Landa. Well, Senator, I had a very lively sense of appreciation
for a man who had helped at a very serious time in my financial
career.
Senator Kennedy. Mr. Landa, your appreciation was to Mr. Beck
for exactly what? It was not his own money that was involved, was
it?
Mr. Landa. No ; it was not his own money, but he was the one who
had requested to help.
Senator Kennedy. He requested the use of teamster funds and it
was teamster union dues that he loaned to you, and then you gave him
personally and not the teamster union fund, this potentially large
gift ; is that correct ?
Mr. Landa. That is correct, sir.
Senator Kennedy. Do you consider that proper ?
Mr. Landa. Yes, sir.
Senator Kennedy, Now, under the excerpts from American Juris-
prudence, Volume 54 of Trusts, it states :
A trustee is at all times disabled from obtaining any personal benefit, advan-
tage, gain, or profit out of his administration of the trust, his dealings with the
trust property, or his relation to the trust estate.
Nothing in the law of fiduciary trust is better settled than that the trustee
shall not be allowed to advantage himself in dealing with the trust estate.
Now, the teamsters union funds were not a trust, but in the prac-
tical sense, Mr. Dave Beck was a trustee of those funds. Do you not
agree with that ?
Mr. Landa. I think he was a trustee.
Senator Ivennedy. Do you think it is proper that he should be al-
lowed to advantage himself in dealings with the trust estate?
Mr. Landa. I didn't thing there was anything wrong in my pro-
posal.
Senator Kennedy. Do you think it is wrong for him to accept it?
Mr. Landa. I don't think so.
Senator Ivenedy. You do not think so ?
2268 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Landa. No.
Senator Kennedy. You are a member of the bar, and you do not
feel that there is anything wrong with you offering to make Mr. Beck
some money and make him a gift because he used union funds to con-
tribute to a proxy fight ? You do not see anything wrong in that, Mr.
Landa ':■
Mr. Landa. I don't think so.
Senator Kennedy. And you do not think there was anything wrong
in Mr. Beck accepting it ?
Mr. Landa. lie did not accept it.
Senator Kennedy. He did not accept it ?
Mr. Landa. No.
Senator Kennedy. Was it offered at the time he was in trouble
with the income-tax people ?
Mr. Landa. I did not know he was.
Senator Kennedy. What date did you offer it to him ?
Mr. Landa. December 1953.
Senator Kennedy. Did you know that was about the time that the
income people were looking into him ?
Mr. Landa. No, I did not.
Senator Kennedy. You do not see as a lawyer that there was any-
thing wrong with wliat Mr. Beck himself did, is that correct ?
Mr. Landa. He just refused it.
Senator Kennedy. I am talking about offering you the teamster
money in the proxy fight.
Mr. Landa. Tliat was a very sound loan. Senator.
Senator Kennedy. If it was a sound loan, why was it necessary to
show him any appreciation ?
Mr. Landa. It wasn't necessary and it was gratitude on my part.
It was a gift, and it wasn't necessary.
Senator Kennedy. Why did you not get it from a bank ?
Mr. Landa. Because we couldn't get it from a bank.
Senator Kennedy. Why did you not get it from anyone else, and
why did you have to go to the teamsters union and have their funds
used in a proxy fight ?
Mr. Landa. Because Mr. Beck had offered the funds.
Senator Kennedy. And in return you offered to make him a gift
of half of your profits in the deal ?
Mr. Landa. If there were any ; yes, sir.
Senator I^nnedy. And you do not think as an attorney there is
anything wrong with that ?
Mr. Landa. No, sir.
Senator Goldwater. What were you paying for that stock at the
time that the foundation started to buy it ?
Mr. Landa. Well, we began in the area of $23 or $24 and all the way
up to $27 or $28.
Senator Goldwater. And it averages out at about $26.
Mr. Landa. I wouldn't know what the final average was, but the
average of the stock that I bought was $25.YY.
Senator Goldwater. How many shares did you ultimately buy ?
Mr. Landa. 14,000.
Senator Goldwater. Around $363,000 worth ?
Mr. Landa. Yes, sir, that is probably correct.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2269
Senator Goldwater. Do you remember what you sold it at, as an
average ?
Mr, Landa. No, I don't because I had quite a bit of other stock and
I wouldn't remember. I know that I sold the stock that I used to pay
off the loan at about the price I paid for it.
Senator Goldwater. Then, that was to pay off a loan ?
Mr. Landa. Yes, sir.
Senator Goldwater. That was to pay off the loan to buy the origi-
nal stock?
Mr. Landa. No, that is wrong, I must correct that. The first sale
we made when we switched, that is the time it was sold at a price
approximately what we paid for it.
Senator Goldwater. What did you sell the balance of the stock for ?
Mr. Landa. We sold it at a much higher price, and I think around
$40 or $41 or $42.
Senator Goldwater. Did it go any higher than that during the
sale?
Mr. Landa. After the sale it went much higher.
Senator Goldwater. When you first went into this proposition, you
anticipated getting a dividend from this stock and from the dividends
paying your income tax ?
Mr. Landa. Yes, sir.
Senator Goldwater. Did you actually pay some of your income tax
on this stock from these dividends ?
Mr. Landa. No, sir.
Senator Goldwater. Mr. Beck moved in before you had a chance ?
Mr. Landa. That is correct, sir.
Senator Goldwater. Well now, did you pay tax on dividends that
accrued to you from your stock, for which you never received money ?
Mr. Landa. I did, sir.
Senator Goldwater. You paid tax out of your own pocket for divi-
dends that you never received ?
Mr. Landa. But I was receiving the benefit indirectly in the reduc-
tion of the loan.
Senator Goldwater. You were receiving tlien, a reduction in your
liability?
Mr. Landa. That is correct, sir.
Senator Goij^water. That was no particular capital asset to you?
Mr. Landa. Yes; it increased my equity in the stock.
Senator Goldwater. How long could you go on paying income tax
on dividends that you did not receive ?
Mr. Landa. I did it for approximately 2 years. Senator.
Senator Goldwater. Did you ever figure out how much that cost
you?
Mr. Landa. It didn't cost me anything because I would have had
to pay those taxes.
Senator Goldwatp:r. But you had to borrow on it, and it came from
someplace.
Mr. Landa. Well, I just had to squeeze what money I had to make
it.
Senator Goldwater. Did you borrow that money from banks?
Mr. Landa. I would not say that I specifically borrowed that
money, and I was borrowing money from every bank at that time that
would loan me any.
2270 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Goldwater. Did your law firm at tliat time receive any
retainer for representing this fund ?
Mr.LANDA. This foundation ; no, sir.
Senator Goldwater. How about representing Fruehauf Trailer
Co.?
Mr. Landa. We were continually on retainer from Fruehauf
Trailer.
Senator Goldwater. Did the retainer increase in size durmg this
particular period?
Mr. Landa. I don't know that it did. It lias been about the same
for many years. Of coui-se, there was probably more work being
done at that particular time because of the proxy fight.
Senator Goldwater. I will put it this way : Did your nicome from
the Fruehauf account increase during this period ?
Mr. Landa. I carniot answer that, Senator, I would have to con-
sult my records.
Senator Goldwater. You do not remember ?
Mr. Landa. No ; I don't remember. It probably did because I was
doing more work.
Senator Goldwater. Do you have any idea how much money was
made out of this whole deal, the profit ?
Mr. Landa. I couldn't answer that, Senator.
Senator Goldwater. You have no idea at all ?
Mr. Landa. I woidd say it was a considerable sum.
Senator Goldwater. Would it be over half a million dollars?
Mr. Landa. Yes. If I knew when the foundation had sold, and all
of theses figures have been submitted to the connnittee by the founda-
tion, that would appear in the audit. The foundation is handled by
a certified public accountant and that would appear in the accounts
passed over to the committee.
Mr. Kennedy. The foundation was worth approximately $80,000
at the time that they went into this deal and now it is worth $1,100,000.
Mr. Landa. But Mr. Fruehauf made many additional contribu-
tions during that period.
Mr. Kennedy. I believe he has, and those are the figures. I do
not know exactly where they come from, and I am not saying they
all came from this transaction ?
Senator Goldwater. Do you have any way of knowing what accrued
from this transaction ?
Mr. Kennedy. Between $700,000 and $900,000.
Senator Goldwater. And Mr. Beck was offered half of that?
Mr. Kennedy. He was offered 50 percent of 40 percent of it.
Senator Goldwater. That is about $150,000 to $180,000.
Mr. Kennedy. That is right.
Senator Ervin. Who brought up the idea first, you or the lawyer?
wanting to make a gift to Mr. Beck, why did you not discuss it with
Mr. Beck instead of discussing it with his lawyer?
Mr. Landa. Because when I talked with his lawyer, I thought I
was talking with Mr. Beck.
Senator Ervin. Who brought up the idea first, you or the lawyer ?
Mr. Landa. I think that I did, sir.
Senator ER^^N. Are you positive about that ?
Mr. Landa. I would be reasonably positive that I did. I do not
recall that the lawyer said, "You ought to do something," and I tliink
I was the one who made the offer.
IMPROPER ACTWITIES IN THE LABOR FIELD 2271
Senator Eijvin, JMr. Beck Avas in Washington as well as his lawyer
was, off and on?
Mr. Landa. Yes ; bnt I saw Mr. Beck very seldom and I did most
of my business with his lawyer.
Senator EimN. Even when you came to an offering of a gift?
ISIr. Lanua. Well, that happened when his lawyer was there.
Senator Kennedy. What did you make out of that deal ?
Mr. Landa. It is hard for me to answer that question. But I made
a substantial amount. I w^ould say a couple of hundred thousan.l
dollars.
Senator Kennedy. AVas this dii-ectly as a result of the loan of the
Teamster fund ?
Mr. Landa. I wouldn't say it was directly, for this reason : When
you borrow money at a bank, Senator, and you repay the bank, the
fact that subsequently there is an increase in the value isn't directly
attributable to that.
It is a direct result of your exposure in making such a transaction.
There was some of the stock, or there was a time when I might have
lost a great deal of money. It turned around afterabout a year and
a half, and it went the other way.
Senator Kennedy. It turned around a year and a half after the
loan ?
]Mr. Landa. About a year and a half after the loan.
Senator Kennedy. When you bought the stock, you bought at an
average figiire of $25.77 ?
Mr. Landa. Yes, sir.
Senator Kennedy'. That was the average figure for the total pur-
chases ?
Mr. Landa. Yes, sir.
Senator Kennedy. And you held that for how long before it began
to go up? Or did you keep purchasing as it moved to $30? It began
about $21, did it?
Mr. Landa. I would think that it began aboiit $21.22.
Senator Kennedy. How long a period did it take to get to $30?
Mr. Landa. There is one figure that stays in my mind, and I know
that on October 1054 its price was $28.25.
Senator Kennedy. In other words, did it ever go down from the
time you went into it?
Mr. Landa. Yes, sir.
Senator Kennedy'. To what, for how long, and how much ?
Mr. Landa. At the end of December it w^as selling at $22 and a
fraction.
Senator Kennedy. You started at $21 ?
Mr. Landa. Well, but I have an average price of $25.77, and so I
had a loss at that time. Senator, of $40,000.
Senator Kennedy'. Then it went up again ?
Mr. Landa. Subsequently it went up and it went down and it went
up.
Senator Kennedy. And it is now, what would you say?
Mr. Landa. Well, now
Senator Kennedy. At the end of 18 months, what was it?
Mr. Landa. About $28 a share.
2272 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Kennedy. And you made out of this deal $150,000 or
$200,000 ?
Mr. Landa. I would think so; yes, sir.
Senator Kennedy. If a bank loaned you money, would you consider
it proper as an attorney to offer to split your profits with one of the
directors of the bank who was instrumental in brino:ino- about the
loan?
Mr, Landa. Well, if a director of a bank, or a president of a bank
had offered me a loan, and then took the responsibility for making it,
I would think it would be proper if I had offered him something. ~^
Senator Kennedy. Of the bank's money ?
Mr. Landa. Yes, sir; the bank's money.
Senator Kennedy. And not the director's money, hut the bank's
money.
Mr. Landa. It was the bank's money.
Senator Kennedy. You consider as an attoniey it is proper, Mr.
Landa, at a time when you get a loan or a company you are interested
in gets a loan, for you to split any profits you may make with one of
the directors?
Mr. Landa. No; I wouldn't say that broadly. Senator.
Senator Kennedy. Tell me what it is, then.
Mr. Landa. I don't think that this was that. You are now re-
ferring to a bank and I think that would be different.
Senator Kennedy. That would be different, and that would be a
violation of the law, would it not ?
Mr. Landa. I think that it might be.
Senator Kennedy. Would you tell me what you consider to be the
practical difference in the responsibility which Mr. Beck had toward
union funds and the responsibility which a bank director has toward
funds within the bank ?
Do you think there is a real practical difference in the responsibility
each has toward their responsibility ?
Mr, Landa. No; but I don't think that the situation with reference
to my relationship would be the same.
Senator Kennedy. Tell me how it differed.
Mr. Landa, Well, it differed in that it would be perfectly all right
for me to make a gift to Mr, Beck under the circumstances, and it
wouldn't be a bank president.
Senator Kennedy, 1 am frankly astonished, Mr, Landa, at your
judgment in this matter, I do not think that there is any doubt, at
least in my mind, that it was highly improper for you to make the
off'er because the funds did not involve Mr. Beck's own funds.
That would have been a free and open deal and I would not have
had any criticisms. But this involved funds for which Mr, Beck was
a trustee in a sense. So what right did he have to give that money
and for you to make an offer that you would give him, a gift of the
profits made out of it ?
I do not consider that is proper at all, and his responsibility is the
same as a bank director's.
Senator Goldwater. This is the first time in all of these hearings
that I have heard of Mr, Beck turning down anything. Have you
any idea why he turned it down ?
Mr, Landa, No, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2273
Senator Goldwater. This is Mr. Dave Beck, Sr. ?
Mr. Landa. Yes, sir.
Mr. Kennedy. Mr. Landa, shortly after you wrote this letter, did
you receive some notification that the teamsters were cutting off the
loan and were not going to advance any more money ?
Mr. Landa. No ; there was never any suggestion that they were not
going to advance the balance of the money.
Mr. Kennedy. The money kept coming in from the teamsters ?
Mr. Landa. It did not come in, Mr. Kennedy. What happened
was that we transmitted the orders to the broker, and they in turn
advised their financial adviser, Mr. Loomis, and then, Mr. Loomis
remitted the money to the brokers.
Mr. Ivennedy. We have a telegram here, dated the 10th of De-
cember, Mr. Chairman.
The Chairman. The Chair presents to you this telegram. The
Chair has in his hands a photostatic copy of a telegram dated De-
cember 10, 1953, addressed to Fred Loomis, from Washington, D. C,
to him at Seattle, Wash., and reading as follows :
Advance no further money on Fruehauf deal until cleared by me.
(Signed) Dave Beck.
Mr. Landa. That is the first I have ever known anything about
t/iiat.
The Chairman. You know nothing about this wire ?
_ Mr. Landa. I know nothing about this wire and this is the first
time.
The Chairman. That is dated December 10, 1953.
Mr. Kennedy. And the letter is dated the 8th of December.
The Chairman. It is 2 days after receipt of the letter. Then, it
was after that that you made the arrangements about payino; all of
the dividends ; is that right ? x- j &
Mr. Landa. Yes, sir.
Senator Ervin. Let me understand this. Do I understand you to
say that you made this offer to give half of your profits to Dave Beck
before the teamsters union had completed the advancement of the
$1.5 million to tlie foundation ?
Mr. Landa. That is correct. Senator.
Mr. Kennedy. Now, our records show that this money was not
cleared until January some time. Mr. Loomis did not receive any
notification from Mr. Beck until the middle of January to start
clearances.
Mr. Landa. I wouldn't know about tliat, Mr. Kennedy.
Mr. Kennedy. You have no explanation of tliis at all ?
Mr. Landa. No, sir.
Mr. Kennedy Now, about this same period of time, going back to
a question that Senator Goldwater asked you about the funds or the
retainer that you were receiving from the Fruehauf Trailer Co
withm 2 or 3 days of this time, namely December M, didn't the re-
tamer tee from the Irueliauf Trailer Co. increase substantially'^
Mr. Landa. I don't think so. I think at the end of the year we
always get our retainer. Tliat is, we get our retainer from Freuliauf
irailer. It depended on a monthly payment and then an addition
each year, depending upon tlie amount of work that was done
Now, at the end of the year we asked for an additional amount of
money and as I recall we were getting $40,000 a year regidarly, but
2274 IMPROPER ACTIVITIES IN THE LABOR FIELD
we raised our fee because the amount of work in connection with the
proxy fight on Fruehauf Trailer.
(At this point, Senators McClellan and Curtis withdrew from the
hearing room.)
Mr. Kennedy. But that $40,000 started December 14, 1953. Prior
to that time, you had not received the $40,000.
Mr. Landa. I think we had. We received some amount.
Mr. Kennedy. No, up to that time you had received $15,000. You
received $6,250 every quarter.
Mr. Landa. Yes, and in addition to that, eveiy year, at the end of
the year, we received a substantial amount.
Mr. Kennedy. For instance, in 1952, it was $15,000.
Mr. Landa. In addition ?
Mr. Kennedy. Yes.
Mr. Landa. Well, that would make
Mr. Kennedy. In 1953, it was $40,000.
Mr. Landa. Yes, sir.
(At this point, Senator Curtis entered the hearing room.)
Mr. Kennedy. In 1954, the following year, it was $40,000.
Mr. Landa. Yes, sir.
Mr. Kennedy. And in 1955 it was $40,000.
Mr. Landa. Yes, sir.
Mr. Kennedy. For what reason did it increase ?
Mr. Landa. Because of the additional work that resulted, and our
work has become heavier all the time.
Mr. Kennedy. What percentage of the $40,000 did you receive?
Mr. Landa. I received one-half, and then, at the end of the year, at
the end of the year the profits of the firm are divided among the peo-
ple who work there according to an agreement that we have with
our
Mr. Kennedy. Did you have an agreement whereby you would re-
ceive $25,000 of the $40,000 that was paid in 1953 ?
Mr. Landa. I don't recall it.
Mr. Kennedy. Did you not receive $25,000 ?
Mr. Landa. I ask for money all the time when I have it coming
to me.
Mr. Kennedy. Did you not receive $25,000 ?
Mr. Landa. I probably did; yes, sir. That would be on my por-
tion of the profits.
Mr. Kennedy. That would be $25,000 out of the 40. That would
leave 15 for the finn.
Mr. Landa. Tliat 25 didn't necessarily come out of that. I have
other clients and I am entitled to receive one-half of tlie fee of all of
the clients in the office, that I have. I have a large number of big
clients.
Mr. Kennedy. You say the $25,000 was not connected with this?
Mr. Landa. No. There was no direct connection.
Mr. Kennedy. Do you and Mr. Dave Beck have any financial in-
terests in common ? Do you have interests in the same companies ?
Mr. Landa. Not that I know of.
Mr. Kennedy. Are you in partnership at all together?
Mr. LvNDA. No, sir.
Mr. Kennedy. You have no partnerships or com])anies that you
are interested in ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2275
Mr. Landa. No, sir.
Mr. Kennedy. Are you lioldiiig any stock for him or holding any
business ?
jNIr. Landa. No, sir.
(At this point, the chairman entered the hearing room.)
Mr. Kennedy. You are not holding anything of value for him?
Mr. Landa. No, sir.
Mr. Kennedy. You made no stipulation or agreement at this time
that 3'ou would pay him any moneys or anything of that type ?
Mr. Landa. No, sir. I have no such agreement, no, sir, of any
kind.
Mr. Kennedy. Mr. Landa, you were also involved to some extent
in the loan that the teamsters made, or the purchase of the stock by
the teamsters, in Montgomery Ward, were you not?
i\Ir. Landa. I wasn't involved. I might state my interest in this
way, that I was consulted by counsel for Montgomery Ward. I was
unable to accept employment. I have always been interested in proxy
fights because I have been employed in a number of them.
(At this point, Senator Ives withdrew from the hearing room.)
Mr. Landa. One day I read in the paper that the central confer-
ence or the easrei'u confererice of the teamsters union had bought
some Montgomery Ward stock and w^ere going to vote it in favor of
jNIr. Wolf sou. On encountering Dave Beck, I expressed my surprise.
Mr. Kennedy. How did you encounter him?
Mr. Landa. In the Fruehauf plane on the way to Washington. He
was in Cleveland and the plane was stopped to pick him up to fly
him in. I expressed my surprise that the stock would be voted in
favor of the man who was attempting to, what I call, raid Montgomery
Ward, and I said to him that I am sure that that wasn't the thing
that sliould be done. T further stated that if that stock was voted for
Montgomery Ward, and I was a pure volunteer in this situation be-
cause I ATasn't hired by Montgomery Ward, that he could organize
Montgomery Ward, and Montgomery Ward should be organized.
I then telephoned
Mr. Kennedy. You said what, again ? Let us get tliis clear. You
said what, again? About Montgomery Ward being organized?
Mr. Landa. I said that in the event that he supported Montgomeiy
Ward, I felt sure that he could have the opportunity of organizing
Montgomery Ward. He had sought to do that often, I had read.
The Chairman. Do you mean organize the employees into the
teamsters union ?
Mr. Landa. Yes, sir.
Mr. Kennedy. If he gave the weight of the teamsters to the present
management, or the management of Montgomery Ward, then the
Montgomery Ward management would agree to the organization by
the teamsters ?
Mr. Landa. Yes, I made that, I volunteered that. I thought that
could be done.
Mr. Kennedy. So what did you do then? Did he agree to that,
then, Mr. Beck?
Mr. Landa. There was no agTeement. He simply said, "That is
a good idea." I said, "all right, I will telephone."
Mr. Kennedy. Did he tell you that he would be willing to do it
if he could get Montgomery Ward organized ?
2276 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Landa. He showed that general disposition ; yes sir.
Mr. Kennedy. Go ahead.
Mr. Landa, I telephoned a man named Mr. Eichary Nye, who is the
proxy solicitor for Montgomery Ward, and told him of my conver-
sation with Mr. Beck.
Mr. Kennedy. Did anything occcur after that ?
Mr. Landa. What I read in the newspapers, I had no further
connection with it.
Mr. Kennedy. Did you tell Mr. Nye that Mr. Beck would be will-
ing to loan this money or buy this stock and vote it for the Mont-
gomery Ward management, Sewell Avery, if the Montgomery man-
agement would agree to the organization by the teamsters ?
Mr. Landa. I think the stock was already bought, Mr, Kennedy.
I had read that there was $2 million worth of Montgomery Ward
stock bought.
Mr. Ivennedy. What were you doing? Wliat were you saying to
Mr. Nj^e ? What information were you giving him ?
Mr. Landa. I told Mr. Nye I had seen Mr. Beck, and that Mr.
Beck indicated that he would be willing to see that that stock was
voted for management in the event that he had the opportunity to
organize Montgomery Ward.
Mr. Kennedy. What did Mr. Nye say to you ?
Mr. Landa. Mr. Nye said, "O. K., I will pass the word on."
Mr. Kennedy. Did you subsequently learn that the teamsters voted
their stock for Sewell Avery ?
Mr, Landa, I did. I learned it from the press.
Mr. Ivennedy. And that the teamsters orgailized Montgomery
Ward?
Mr. Landa. I learned it from the press ; yes.
Mr, Kennedy, Mr. Chairman, we have here a clipping of the Chi-
cago American dated March 31, 1955, which indicates that the team-
sters then organized Montgomery Ward, and that the proxies were
voted in favor of Sewell Avery.
The Ciiatrman, This photostatic copy of the newspaper may be
made exhibit 188, for reference only. It is not sworn to. It will
just be assumed that it is a correct photostatic copy.
(The document referred to was marked "Exhibit No. 188," for
reference and will be found in the appendix on p, 2535,)
Mr. Kennedy. As I understand, then, it wasn't a question of what
the employees of Montgomery Ward wanted or did not want, but it
was a question of whether the teamsters would buy the stock or not?
Mr. Landa. That I don't know. I can't answer that question, Mr.
Kennedy.
Mr. Kennedy. It does seem peculiar that the members of Mont-
gomery Ward or the employees of Montgomery Ward decided just
during this period of time that they wanted to be members of the
teamsters union.
Mr. Landa. I think what it meant, really, was that Montgomery
Ward wouldn't resist their organization of their employees. I don't
know what went through tlie minds of the employees. I have stated
fully. I was a volunteer. Probably if I had been able to look forward
to this point, I wouldn't have volunteered it. But I have always
been against raiders, so I spoke up and asked them to do it. I wasn't
in any way employed by Montgomery Ward.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2277
The Chairman. Would this indicate that there was a bargaining
in the transaction to subject, without their knowledge or consent, the
employees of Montgomery Ward to unionism ?
Mr, Landa. I don't think so, sir.
The Chairman, What else could you unravel from it?
Mr. Landa. I think tlie only conclusion is that the company itself
didn't resist.
The Chairman. I do not know. Companies have a little bit of in-
fluence with their employees, and so do labor unions of their mem-
bers. It seems to me like the top was bargaining with the product
in between.
Mr. Landa. That I don't know anything about, Mr. Chairman. I
wasn't — I don't know what the negotiations were.
The Chairman. I do not know what they were. But on the sur-
face, on the face of it, it seems to me like that is a consideration, I
think that was your suggestion, that that would be a valid consider-
tion,
Mr, Landa. As I say, I was very much interested in proxy fights.
The Chairman, As you contemplated the advice you were giving,
and its consequences if carried out, you anticipated, and that is what
you said, that they would be able to organize Montgomery Ward,
which they had not been able to do in the past.
Mr. Landa. Yes, sir.
The Chairman. So witli the desire of the teamsters union president
to organize them, and with the desire or the consent, the bargaining
consent, of Montgomery Ward officials, they were just pawns in the
hands of the two in the trade. Would you not say so ?
Mr. Landa. Well, I hope that wasn't the case. Senator.
The Chairman. I hope it was not. It will take a little explaining
to convince me otherwise.
Senator Goldwater?
Senator Goldwater. Did the Fruehauf Co. exercise such an agree-
ment with Mr. Beck regarding their employees after this loan had
been arranged?
Mr. Landa. No; I don't think so. I don't think so. Senator.
Senator Goldwater. As I understand from this newspaper article,
there was a series of negotiations that began 18 months before this
time, and only about 3,000 of the 52,000 employees were covered by
union contracts. As a result of this investment of Mr. Beck, he over-
rode all negotiations, he overrode the evident will of 49,000 em-
ployees, and used them, as the chairman suggested, as pawns in re-
turn for control of the company which was provided by Mr. Beck.
Do you think that is proper, as a citizen of this country ?
Mr. Landa. I am not in possession of all the facts, Senator. I only
know what I have related here.
Senator Goldwater. If what we are suggesting is true, and it looks
like it is true, do you as a lover of freedom in this country think
that that should be condoned ?
Mr. Landa. I am not familiar with the facts. Senator.
Senator Goldwater. You, yourself, said that you suggested to Mr.
Beck that
Mr. Landa. I thought that the only — when I made the suggestion,
Senator, I thought that the only thing that stood in the way of the
2278 IMPROPER ACTRaTIES IN THE LABOR FIELD
organization of that company for the benefit of its employees was
the company, Mr. Avery.
Senator Goldwater. And that if Mr. Avery had his way in this
proxy fight, that Mr. Avery would agree ?
Mr. Landa. Would agree. I thought the employees wanted to be.
They usually do.
Senator Goldwater. They usually want to do what?
Mr. Landa. They usually want to be unionized.
Senator Goldwater. They had been trying for 18 months to get
them and they still had 49,000 to go. That is making up 49,000 minds
in a very fast time.
Mr. Landa. It seems that way. Senator.
Senator Goldwaitsr. Have you ever carried that out to its
ultimate ?
Mr. Landa. No, sir.
Senator Goldwater. Do you think it would be proper for unions
with their vast sums of money today to go into proxy fights, to go
into the stock market and buy control of companies just so that they
can obtain the membership of those companies in their unions? Is
that right?
Mr. Landa. I haven't any opinion. I don't think it is. Senator.
Senator Goldwater. You do not think it is right ?
Mr. Landa. No.
Senator Goldwater. But you suggested it to Mr. Beck.
Mr. Landa. I didn't suggest that at all. Senator.
Senator Goldwater. You dropped a little germ, and it got in that
fertile mind of his and grew awfully fast. Is that not about it?
Mr. Landa. Well, I thought that organization for labor is good.
I always have thought it.
Senator Goldwater. Nobody is arguing that point, but there are
ways to organize and there are ways not to organize.
Mr. Landa. Yes, sir. I didn't think anything would be done that
wasn't perfectly proper. I thought it would simply overcome the
resistance of Mr. Sewell Avery who had fought bitterly against labor
unions.
Senator Goldwater. My point is : Is Mr. Sewell Avery the import-
ant point here or are 49,000 people who evidently had not agi'eed to
the union or closed shop at that time? I do not want to prolong this,
but I hope that you never again in your life offer any suggestion that a
man can gain control of a company if he is willing to use his employees
as pawns. If they can organize them in the correct way over the bar-
gaining table, fine and dandy, I am all for it. But to use these vast
sums to go into companies, that is one of the ultimate evils that we
are seeing coming out of these hearings, the fact that union sums are
so vast today, and the political power of the union leaders has be-
come so great, that we are gradually going to eliminate the people
who are supposed to do the collective bargaining for these workers,
and replace them with men who control politics, who control the
companies, and who control the workers.
When that time comes, we are going to be in a devil of a fix in this
country.
I should think you would be a little bit ashamed for havhig contri-
buted one small part to it.
The Chairman. Senator McNamara ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2279
Senator McNamaha. The iril"eieiice from your answer is that act-
ually if there was any conirol exerted it was by Mr. Beck on
Mr. Sewell Avery I • . c.
Mr. Laxda. Would you repeat that question, Senator ^
Senator McXamaii^v. To get the place organized, to get the com-
pany organized, all that was needed was to get the cooperation ot
Mr. Sewell Avery, in your judgment?
Mr. Landa. Yes. That was my judgment.
Senator McNamara. This was the combination of the power of au-
thority, whatever we are concerned about, of these two people, Beck
and Avery, is that not right ?
Mr. Landa. Yes, I would say so. Yes.
Senator McNamara. When they got together, then the place was
organized.
Mr. Landa. Yes.
Senator McNamara. That is what is known on our side ot the
street as sweetheart contract. You know, I am just as much against
them as Senator Goldw^ater.
Senator Curtis. Mr. Chairman?
The Chairman. Senator Curtis.
Senator Curtis. I hate to take the time, but, Mr. Landa, is it not
a fact that IMr. r)eck forces in his membership drives by applying the
pressure on the emyloyer?
Mr. Landa. I don't know that, sir.
Senator Curtis. That is what is happening in my State. He has
certain transportation companies withhold business from nonunion
trucklines. He never bothers the employees bacuse that is forbidden
by the Taft-Hartley law\ He goes in the front door, his agents do,
and deals with management, because that is a loophole in the Taft-
Hartley law. In this case, you suggested how he might make a deal
wdth management to secure the membership of the Ward employees,
is that correct ?
Mr. Landa. I ]K-obably never thought of it in any other w^ay except
as a proxy fight. Senator. That was my main— I never thought of it
in any other way but here was Mr". Wolfson, whose experience
in Washington was such that I thought he shouldn't be allowed to
get into I^Iontsomery AYard. That is the only w^ay I thought of it.
I didn't think' of the labor aspects of it, except as I was trying to see
Mr. Beck's interest in it.
The Chairman. Is there anything further ?
Senator Ervin. Your interest in the Montgomery Ward situation
was a sentimental interest?
Mr. Landa. You can call it that. I am against all raiders.
Senator ER^^N. In other words, you felt like Wolfson was trying
to reap where he had not sowed and was trying to gather where he
had not strawed, and you just do not api:>rove of an outsider coming
in and takino- charge of the company and taking it out of the hands
of the men that built it. to his advantage.
Mr. Landa. That is what I had in mind.
Senator Ervin. So your gettiuir embroiled in this matter, as far as
Montofomery Ward is concerned, is because of the fact that you do
not approve an outsider coming in and raiding an established busi-
ness and, in a sense, pushinir out those that built up the business?
Mr. Landa. That is correct, sir.
2280 IMPROPER ACTIVITIES m THE LABOR FIELD
(At this point, Senator Goldwater withdrew from the hearing
room.)
The Chairman. Proceed, counsel.
Senator ICennedy. Mr. Chairman ?
The Chairman. Senator Kennedy.
Senator Kennedy. I understand that the funds that were used to
purchased this stock were taken from the health and welfare fund,
not the union's regular organizational fund, is that correct ?
Mr, Landa. I don't know. I had no knoAvledge of that.
Senator Kennedy. That is a fact. Do you not think that raises a
question of whether health and welfare or pension plan funds should
be used in this way, in a proxy fight ?
Mr. Landa. I didn't know where they came from. All I did was
read in the paper something and then that started a train of thought
that Mr. Wolfson ought not to be allowed to get into this company,
that is all.
Senator Kennedy. I think it does raise the question of whether
health and welfare funds should be used in this sort of a deal, not as an
investment to protect the future security of the workers, but as a part
of the proxy fight. It does not seem to me proper that welfare and
pension plan funds should be used in this way. I distinguish that
from the regulation union fund.
Mr. Chairman, I think it might be helpful if I read this paragraph
in to show what the situation was at this time.
Sewell Avery, board chairman of Montgomery Ward & Co., today signed a con-
tract agreement covering 1.5,000 of his employees. And he won an army of
support for his fight against the attempt by Louis Wolfson to wrest control of the
big mail-order house. These were the developments : <lne— Avery and Dave
Beck, general president of the International Brotherhood of Teamsters (AFL)
met to sign the agreement covering workers in 16 plants. It was the first con-
tract between Ward's and the union. Two — Beck and James Hoffa, vice presi-
dent of the teamsters, declared they would recommend that all divisions of the
union holding Montgomery Ward stock vote their proxies for Avery in his battle
with Wolfson. Three — the union is now recognized oflScially by Ward's for the
first time as bargaining agent for its employees.
The Chairman. Are there any further questions ?
Mr. Kennedy. I have a few questions I woukl like to ask on the
memorandums that we discussed yesterday, and \vl> ch we were unable
to put into the record because they were taken from INIr. Landa's files.
Can we {xet those admitted into the record now, or introduced?
The Chairman. Mr. Landa, tlie Chair presents to you seven photo-
static copies of memorandums which were taken, I believe, from your
files. Will you examine these documents and see if they are photo-
stats of the originals?
(Documents handed to witness.)
(The witness conferred with his counsel.)
Mr. Landa. Yes, sir. These were given l3y my office to
The Chairman. They may be made exhibit No. 188.
You may number them. 189-A, B, C, and so forth.
(The documents referred to were marked "Exhibits Nos. 189-A, B,
C, D, E, F, and G" for reference and will be found in the appendix
on pp. 2536-2542.)
Mr. Kennedy. tVhat information do you have about the Fruehauf
problems in the Boston strike during 1955, Mr. Landa?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2281
Mr. Landa. I read those memorandums, and reread them. They
mean not a great deal to me because that wasn't an area in which I
served Fruehauf. That was the ACT Committee. But I know that a
strike anywhere affects the welfare of Fruehauf, and I faiow that there
have been strikes in the New England area. When they do have a
strike, Fruehauf and everybody connected with Fruehauf does every-
thing they can to compose the differences so that the trucks will start
moving again.
Mr. Kennedy. Were there efforts being made by you people to
approach Dave Beck for Seymour and for Roy Fruehauf ?
Mr. Landa. Not by me. Apparently Mr. Condon seems to have
Mr. Kennedy. To have approached Dave Beck ?
Mr. Landa. That is what I gather from these memorandums. He
wrote them for himself, apparently, as reminders.
Mr. ICennedy. You had not read these memorandums before?
Mr. LiXND.A. No. Because I get so many of them. I may have read
them. I paid no attention to them. But I read them now. I read
them in the last few days, since tliis committee sought them from oiu-
files.
Mr. Kennedy. And it would appear that INIr. Fruehauf was anxious
to have an approach made to Mr. Dave Beck to try to call the strike
oft", even though lie Avasn't directly involved?
Mr. Landa. I don't think he was trying to call the strike off. I
think he was trying to compose. It is vei-y difficult for me to testify
as to what Mr. Fruehauf was thinking. I think he testified yesterday.
Mr. Kennedy. He couldn't remember. I mean, he didn't know any-
thing about it, or at least he stated to the committee that he knew
nothing about it.
Mr. Landa. I think whenever there is a strike, Fruehauf Trailer is
interested, a strike effecting the trucking industiy.
Mr. Kennedy. In what connection was the Associated Transport
Co.? How were they involved?
Mr. Landa. I tliink one of their lines was struck.
Mr. Kennedy. There were arrangements made to get the pickets
off of their facilities out of Washington?
Mr. Landa. From reading that, they wer& only struck in the New
England area. Nevertheless, pickets were sent down to the South,
to picket their southern terminals. The request was that they not
picket the southern terminals in view of the fact that the strike was
only in New England.
Mr. Kennedy. And did Mr. Einar Mohn arrange that?
Mr. Landa. I don't know.
Mr. Kennedy. Is that what appears from this?
Mr. Landa. There is some suggestion that Mr. Einar Mohn be asked
about it.
Mr. Kennedy. In a memo of July 5, 1955, it reads as follows :
The teamsters through Einar Mohn arranged for the withdrawal of pickets.
Mr. Landa. That may be Mr. Condon's conception. I don't know
whether they did or not.
Mr. Kennedy. Is it possible to question you about these memo-
randums ?
Mr. Landa. It isn't impossible to question me about it.
Mr. Kennedy. It is not possible to get answers on any of them?
2282 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Landa. Not answers as to what was going on, because I wasn't
familiar with it.
The Chairman. Could Mr. Condon give us information, do you
suppose ?
Mr. Landa. I think he could ; yes.
The Chairman. All right, then, you may stand aside.
Mr. Kennedy. Before JMr. Landa leaves, there is another matter I
wanted to question him about.
The Chairman. All right.
Mr. Kennedy. Then we can dismiss him finally.
Did you have anything to do with the $200,000 loan ?
Mr. Landa. I did, sir. There came a time
Mr. Kennedy. That wiis the $200,000 loan that was made.
Mr. Landa. That was testified yesterday ?
Mr. Kennedy. Made to Dave Beck.
Mr. Landa. Yes, sir. First I tried to borrow the money in Wash-
ington. That wasn't possible. Subsequently, I endorsed or made —
I was a comaker of a note for $175,000 in order to guarantee that
loan.
Mr. Kennedy. Did you go to certain banks here in Washington?
Mr. Landa. I did, sir.
Mr. Kennedy. Why could not Mr. Beck get a loan here?
Mr. Landa. I don't know.
Mr. Kennedy. You were unable to get a loan for him ?
Mr. Landa. Unable to get a loan for him.
Mr. Kennedy. Did you go to banks in New York also?
Mr. Landa. I didn't, no, I just tried two banks here.
Mr. Kennedy. Ultimately, the Fruehauf Trailer Co. loaned $175,-
000 to the Brown Equipment Co. wdiich, in turn, loaned the money
to Dave Beck.
Mr. Landa. That is what I learned.
Mr. Kennedy. VHiy did not Mr. Fruehauf loan the money directly
to Dave Beck?
Mr. Landa. I think he explained yesterday that the Fruehauf
Trailer Co. did not make loans to individuals, never had. The credit
of Brown was a perfectly good credit. Therefore, he loaned the
money to Brown.
Mr. Kennedy. So, once again, you felt, you and Mr. Fruehauf and
Mr. Seymour felt, that it was proper to clo something indirectly that
you could not do directly?
Mr. Landa. When I learned of it afterwards I thought it was
proper; yes.
Mr. Kennedy. Did you make a suggestion to Mr. Fruehauf that
it be arranged in tliis manner?
Mr. Landa. I did not.
Mr. Kennedy. Did vou make the suggestion to Mr. Seymour that
he list this loan of $200,000 to Dave Beck as an advance to the ACT
Committee ?
Mr. Landa. Absolutely not.
Mr. Kennedy. Do 3^ou have any explanation as to why he did that?
Mr. Landa. No, sir; I have none at all.
The Chairman. Thank you very much.
You may stand aside.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2283
(ISIeinbers present at tliis point: Senators McClellan, Kennedy,
Ervin, McNamara, and Curtis.)
The Chairman. Who is your next witness ?
Mr. Kennedy. Mr. Arthur Condon.
The Chairman. Mr. Condon, come forward, ])]ease?
Yon do solemnly swear tliat the evidence you shall give before this
Senate Select Committee shall be the truth, the whole truth, and
nothino- but the truth, so help you God?
Mr. Condon. I do, sir.
TESTIMONY OF AETHUR CONDON
The Chairman. State your name, Mr. Condon, and your profes-
sion, and place of residence.
Mr. Condon. My name is Arthur Condon. I am an attorney. My
liome is in Annapolis, Md. My office is in Washingto}i, I). C, at
1000 Vermont Avenue.
The Chairman. Counsel, you may proceed.
Mr. Kennedy. Mr. Condon, you are familiar with these memo-
randums ?
Mr. Condon. The ones you showed me this morning?
Mr. Kennedy. Yes.
Mr. Condon. Yes.
Mr. Kennedy. Could yon tell the committee what the situation was
as far as th.e strike in Boston, in connection with Frueluiuf ?
Mv. Condon, Would you let me have them, please i
Mr. Kennedy. The clerk will get a copy for you.
(Document handed to witness.)
The Chairman. Are those the same that have been made an exhibit ?
Mrs. Watt. Yes, sir. They are the mimeographed copies.
Mr. Kennedy. Do you have copies of them ?
Mr. Condon. I have before me the memorandum of June 28, headed
Boston strike.
Mr. Kennedy. Could you tell me what the situation was as far as the
Boston strike is concerned ?
Mr. Condon. Can you be more explicit, Mr. Kennedy ?
Mr. Kennedy. For instance,
Roy Fruehauf got on the phone and s^uid he thought my suggestion was a very
good one. Roy wants me to telephone him what Beck says about the strike sit-
uation ; he knows that I plan to talk with Beck later this afternoon when he
reaches the west coast. Hoy and Burt are going to think over my suggestion.
Their suggestion was that Sonnenberg and Seymour go to Boston,
that they publicize the arrival of the president of the ACT connnittee,
I guess.
Mr. Condon. At this time, as I recollect the circumstances, there was
a very devastating teamsters strike on, centered around Nev- England,
judging by this, and I have no presejit recollection of all of these facts!
There were tAvo groups meeting to try to settle tliis problem. One
was composed of truckers, that is, the people who own the trucks.
Tlie other group was composed of representatives of the locals.
Mr. Seymour was head of the largest trucking company involved in
tliis strike. Apparently tlie information that I had was that ell'orts
between the two groups in Boston to settle the strike were not progress-
ing as rapidly as everybody wanted them to, and I suggested tliat ^Ir.
2284 IMPROPER ACTIVITIES IN THE LABOR FIELD
Seymour, in view of the fact that he was the president of the largest
trucking company, and also because of his prestige as president of the
ACT committee, go to Boston himself and participate as the president
of Associated Transport in the settlement negotiations.
Mr. Kennedy, I notice a memorandum dated August 11, 1955, again
re : Fruehauf , and a paragraph stating —
This morning I gave Roy Frneluinf the following infoiiiiatiou on the telephone :
Former ILC Commissioner Miulseu told me that a New England trucker said
that a letter is being circulated among the truckeis in that area, criticizing
Fruehauf, Beck, and Se.vmour, on the grounds that the strike settlement was
the result of a deal engineered hy these men. The letter was said to be most
critical of Fruehauf, claiming that these tactics gave Fruehauf a hold ovev small
truckers. I suggested that at the luncheon today in Chicago, the fact be stressed
that the ACT committee does not function in the realm of labor disputes, and that
Seymour and the other truckers fight even harder against Beck in labor negotia-
tions than do other truckers.
That is inconsistent with your suggestion, I guess, of June 28, is it
not ?
Mr. Condon. Not that I see.
Mr. Kennedy. That you were suggesting for Seymour to go up
to Boston as head of the ACT committee ?
Mr. Condon. No. As head of Associated Transport.
Mr. Kennedy. And also as head of the ACT committee.
Mr. Condon. He w^ouldn't have anything as head of the ACT com-
mittee. The ACT committee is a trade association.
Mr. Kennedy. Why was that put in the memorandum i
Mr. Condon. Because Mr. Seymour, as president of the ACT com-
mittee, enjoys a certain prestige in the trucking industry.
Mr. Kennedy. Wliat is the situation regarding this letter that was
circulated, this that was critical of Fruehauf, claiming that these
tactics gave Fruehauf a hold over small truckers ?
Mr. Condon. Again, I must say I have no present recollection
as I had of the details at the time I prepared these memoranda. But
just as in all industries, there is a lot of rivalry and jealousies between
manufacturers and truckers and everybody concerned. I don't recall
that I ever saw the letter referred to here, but the important point
was to circularize among the leading people in the trucking industry
that the ACT Committee was not an organization that functioned ■
in the realm of labor disputes.
Here is the situation about that, Mr. Kennedy. I had very little
knowledge of the way the Teamsters are organized and opBrate, or
policy questions, but' I do know that the strike situation is in the
hands of tlie locals, so that one large trucking company would have
as many as 60 or 70 different contracts, and in my judgment there is
no one man in tlie Teamsters Union who can settle a New England
strike. It has to be done by negotiation with a committee represent-
ing many, many different locals.
Similarly, so far as the trucking companies are concerned, and I
have played no part, personally, in any negotiation of this type, and
I am speaking generally, there would be a group of truckers, nor-
mally it would be the most important ones, who would form the nego-
tiation team for the truckers. One of the jobs would be to keep them
all in line among themselves. In other words, they would all go in
])ledged so that no one trucker would make a separate deal with the
union people and thus pull the rug out from under the otliers. It
IMPROPER ACTIVITIES IN THE LABOR FIELD 2285
was important for the ACT Committee, which was a trade associa-
tion, to avoid being put in the position of having the truckers, and
generally the people who supported it, think that it was functioning
in the field of labor relations, to the point of trying to participate in
labor relations.
We are always interested in helping to settle labor disputes, because
one like this was most devastating to all concerned, the public, the
truckers, tlie truck drivers, and everybody concerned.
Mr. Kennedy. I have two questions in that connection. One is
about the fact that they were not centralized. Certainly they were
centralized enough to have Einar Mohn arrange for the withdrawal
of the pickets from the facilities of Associated Transport south of
New England.
Mr. Condon. I would take that this way, and, again, 1 say this
purposely, I have no present recollection of all the facts, but I think
that those pickets were sent down from New England. They didn't
belong to the local union. Let's take an example.
Mr. Kennedy. Just on my question, Mr. Condon, at least the Team-
ster president or assistant, Einar Mohn, vice president of the team-
sters, was able to get this done.
Mr. Condon. He would be of some help, but he couldn't settle the
strike in Boston.
Mr. Kennedy. Now, the second point was
Mr. Condon. There was no strike here, you understand. There was
no strike south of this area.
Mr. Kennedy. That these truckers have to stick together. Was it
not true that the Associated Transport Co. withdrew from the com-
mittee and made an arrangement with the teamsters, made a contract
with the team.-ters?
Mr. Condon. Do you mean at the time of the Boston strike ?
Mr. Kennedy. Yes.
Were they the ones that broke the line?
Mr. Condon. I don't know.
Mr. Kennedy. Was that not the reason that the small truckers were
critical, that the Associated Transport Co. walked out after 3 or 4
weeks of negotiations and made a contract, and that this in turn hurt
the truckers ?
Mr. Condon. I have no knowledge of that, Mr. Kennedy; I don't
even know if it is correct. I assume you must have some foundation
for what you say, but I simply don't know.
Mr. Kennedy. Was this not also done because of the pressure
brought by Mr. Roy Fruehauf, who was having difficulties because
the strike was continuing?
Mr. Condon. How would he bring pressure ? On whom ?
Mr. Kennedy. Well, the arrangement between Mr. Roy Fruehauf
and Mr. Seymour, of the Associated Transport Co. These memo-
randums are certainly filled with Mr. Roy Fruehauf being concerned
about this strike continuing, and the difficulty and problems that it
was causing to Roy and Burt.
Mr. Condon. He was very much concerned ; yes.
Mr. Kennedy. During this period of time, who were you working
for, Mr. Condon ?
Mr. Condon. Do you mean of these people mentioned here?
Mr. Kennedy. Yes.
2286 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Condon. You understand, we have many clients. We were
emploved by Freuliauf, we were employed by Associated Transport,
and I was general counsel for the ACT Committee. Among the three
top directors in the ACT Committee were Dave Beck, Eoy Fruehauf ,
and Burt Seymour. .
Mr. Kennedy. AYho were you representing when you wrote these
memorandums ?
Mr. Condon, I coulchi't answer that.
Mr. Kennedy. In this memorandum of August 15, 1955, it says:
Mr Barker telephoned me that he and Roy Fruehauf felt that the Drayton
Plains plant should be disposed of unless the labor contract can be made with
the teamsters instead of with the CIO. Fruehauf has an offer for the plant.
At his request, I plan to go to Detroit some day this week, probably Wednesday
Thursday, or Friday, to confer with him, Rushmer, and with other Fruehauf
officials, as to what can be done to get the teamsters in.
Then, August 17, 1955 :
Through Mr. Barker it was arranged that the Fruehauf branch in Albany
would agree to a joint consent election. This solution is acceptable to both the
teamsters headquarters and the Fruehauf labor relations adviser.
Why was Mr. Roy Fruehauf so anxious to have a contract with the
teamsters ?
Mr. Condon. You read two different things there. The first re-
lates to a plant that I believe is in Detroit, or somewhere near De-
troit, the Drayton Plains plant.
Mr. I^NNEDY. Well, I think, generally i • i
Mr. Condon. He answered that yesterday, as I recall, and said
that he was anxious to see that if he organized that plant, I believe
this is what he said, that the teamsters would be represented there
instead of their rivals, for whatever function the teamsters per-
formed. . 11-
Mr. Kennedy. There would not be any question about the drivers
being there, that they would be teamsters. He wanted the people
in the plant to be teamsters also ?
Mr. Condon. Xo; that wouldn't be logical. I am quite certain—
I don't have definite knowledge of this but I am confident that what-
ever organization of union people that Fruehauf has a contract with
would have an area provision, so that if Fruehauf opened a plant
anywhere, it would have to use the same union for the same kind
of 'people. That is, machinists would have to be whatever the ma-
chinists union is they have a contract with in that area already.
Mr. Kennedy. This says that they are anxious to have the team-
sters instead of the CIO.
Mr. Condon. It mav be that there is a rival union with the team-
sters, so far as driving trucks. I don't know. The teamsters have
many fields that I am not familiar with.
Mr. I^NNEDY. There is no such thing.
Mr. Condon. Are you sure ?
Mr. Kennedy. There is no drivers union other than the team-
sters
Mr. Condon. I just don't know. I know that the teamsters union
have many parts besides actual truckdrivers who go out and drive
alono; the' road. I just don't know, I have no present recollection
of aVl the details in this. But I did hear what Mr. Fruehauf said
yesterday and it makes sense to me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2287
]Mr. IvENNEDY. You clo iiot renieniber what Mr. Barker telephoned
you and said other than in the memorandum ?
jMr. CoxDON. There is a letter here — no, you asked me tliat this
morning. This plant was never organized.
The CiiAiRMAX. Is there anything further ?
(At this point, Senator Ervin Avithdrew from the liearing room.)
Senator Kennedy. This August 15 memorandum says that you
are going to sell the plant rather than let the CIO organize the
plant. What is this about the teamsters in relation to the CIO that
would cause Mr. Barker and Fruehauf to say that they are going to
sell the plant if they cannot get tlie teamsters in in place of the
CIO?
Mr. Condon. Senator Kennedy, that, again, brings in something
that Mr. Fruehauf testified to yesterday. I don't know. I have no
knowledge. I don't know what- part of tlie thousands of people who
would be employed in that plant could be teamsters under the normal
arrangement within unions and what part could not.
I repeat again I am sure that he couldn't have put anybody in
there except in accordance with the contracts that he already had in
that area. That is fundamental and basic. I am sure no union
would make a contract other than that.
Senator Kennedy. We are not talking about the preference he
miglit have had. He was going to sell the plant if he doesn't get
the teamsters in in place of the CIO. Tliat is a rather strong posi-
tion, is it not? That is not a question of convenience. He is going
to close down if he does not get the teamsters over tlie CIO union.
Mr. Condon. I don't know what his problem was.
Senator Kennedy. You took a major part in tliis.
Mr. Fruehauf could not tell us anything about any of these memo-
randums. Mr. Landa says he does not know anything about them.
Mr. Condon. Well, I pre})ared tliem. I will tell you anything I
possibly can.
Senator Kennedy. You tell us, tlien, if it is possible, why Mr.
Barker and ]Mr. Fruehauf wanted to close down a plant if they could
not <zet the teamsters in in place of a CIO union ?
Mr. Condon. I couldn't answer.
Senator Kennedy. We have seen tliis intimate relationshij) oii both
sides between the teamstei's and the Fruehauf Co. and we have heard
Mr. Landa testify that he ])layed attorney for them, and a major role,
as a stockholder, in arranging this loan for Mr. Beck personally, and,
therefore, we are wondering if, because of this intimate business rela-
tionship between Mr. Beck and the Fruehauf Co., they preferred to
deal with Mr. Beck as with another union. That is why we are look-
ing into it.
Mr. Condon. You have iiiferred that from these facts.
Senator Kennedy. We are trying to get the information from you.
You say you cannot give it. Mr. Landa cannot give it, and Mr.
Fruehauf cannot give it. Therefore, Ave are free to take an in-
ference.
Mr. Condon. This says Mr. Barker. It is so long ago. Who would
know what Mr. Barker hud in mind?
Senator Kennp:dy. Roy Fruehauf says he does not know, and a
copy went to Mr. Landa, and he says he does not know. Tlie last
8!)330— 57— i)t. 7 20
2288 IMPROPER ACTIVITIES IN THE LABOR FIELD
question is this business of withdrawing the pickets south of New
England represented the difference of a loss of $200,000 a week to
the Associated Transport.
You were representing the Associated Transport at that time, were
you ?
Mr. Condon. I am not sure, Senator, whether I was directly or not.
Sometimes we are on an employed basis and sometimes not.
Senator Kennedy. That again brings up the question : Do you feel
it put Mr. Beck in rather an embarrassing position to be the head of
a union which was engaged in strikes with people, from whom he
had received a personal and extraordinary loan ?
Mr. Condon. Will you again ask that again, sir ?
Senator Kennedy. Do you feel it places Mr. Beck in a position
where inferences can be drawn, if he is the head of a union which is
engaged in important and extensive wage negotiations with peo-
ple from whom he has received an unusual and large personal
loan ?
Mr. Condon. Senator, I am going to ask you to excuse me from an-
swering that question by reason of the fact that I was here before in
another capacity.
Senator Kennedy. All right.
That is all.
The Chairman. Are there any other questions ?
If not, thank you very much.
The committee will stand in recess until 10 o'clock in the morning.
(Whereupon, at 3:50 p. m., the committee recessed, to reconvene
at 10 a. m., Wednesday, May 15, 1957.)
(Members present at this point: Senators McClellan, Kennedy,
McNamara, and Curtis.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
WEDNESDAY, MAY 15, 1957
United States Senate,
Select Committee on Improper Activities
IN the Labor or Management Field,
Washington^ D. G.
The select conmiittee met at 10 a. m., pursuant to Senate Resolution
74 agreed to January 30, 1957, in the caucus room, Senate Office Build-
ing, Senator John L. McClellan (chairman of the select committee)
presiding. ci ,
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irving M. Ives, Republican, New York ; Senator John F. Kennedy,
Democrat, Massachusetts; Senator Sam J. Ervin, Jr., Democrat,
North Carolina ; Senator Pat McNamara, Democrat, Michigan ; Sena-
tor Karl E. Mundt, Republican, South Dakota; Senator Barry Gold-
water, Republican, Arizona; Senator Carl T. Curtis, Repubhcan,-
Nebraska.
Also present : Robert F. Kennedy, chief counsel ; Jerome Adierman,
assistant counsel; Carmine Bellino, accounting consultant; Ruth
Young Watt, chief clerk.
The Chairman. The committee will be in order.
(Members present at the convening of the hearing: Senators Mc-
Clellan, Ives, and Kennedy.)
The Chairman. Counsel, call your first witness.
Mr. Kennedy. I will call Mr. Burke, Mr. Chairman.
The Chairman. You do solemnly swear that the evidence you shall
give before this Senate Select Committee shall be the truth, the whole
truth and nothing but the trutlu so help you God ?
Mr. Btjrke. I do.
TESTIMONY OF A. M. BTIIIKE
The Chairman. State your name, your place of residence, and your
business or occupation, please, sir.
Mr. Burke. My name is A. M. Burke. I reside at 725 South Citrus,
Los Angeles, and my place of business is in Los Angeles, at 1151 South
Broadway, in the Occidental Life Building.
The Chairman. Have you talked with members of the staff regard-
ing your testimony ?
Mr. Burke. I have, sir.
The Chairman. You also know that you may have comisel to con-
sult with regarding your rights while you testify? Have you elected
Tto waive counsel ?
2289
2290 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, Burke. I have, sir.
The Chairman. Thank you very much.
All right, counsel may proceed.
I believe he identified his position.
Did you state what your position is ?
Mr. Burke. I am vice president and manager of the mortgage loai
department of the Occidental Life Insurance Co.
The Chatrm \ x. Tliank you.
Mr. Kennedy. Now, the Occidental Insurance Company of Lo
Angeles, that is the name ?
Mr. Burke. The Occidental Life Insurance Company of California
at Los Angeles, sir.
Mr. Kennedy. Does the Occidental Insurance Co. handle some o
the insurance of the teamsters union ?
Mr. Burke. They do, sir.
Mr. Kennedy. Coulcl you describe what they handle?
Mr. Burke. We handle the life, accident, sickness and hospital anc
surgery coverage for a part of the teamsters union.
Mr, Kennedy. Is that the Western Conference of Teamsters, thai
they handle?
Mr. Burke. I believe it is, sir.
Mr. Kennedy. Is that the 11 Western States?
Mr. Burke. Yes, sir, I believe it is.
Mr. Kennedy. What are the premiums that are paid? Could yor
give it to us for the last 3 years, 1954, 1955, and 1956, the prGmimns
that have been made to the Occidental Insurance Co. by the team-
sters union ?
Mr. Burke. Yes, sir. In 1954, the annual premium was $19,-
882,449; in 1955, the annual premium was $21,898,109; in 1956, the
annual ]n-emium was $25,192,678.
Mr. Kennedy. What is the insurance that is in force for those
premiums ?
Mr. Burke. Mr. Kennedy, there is a slight change from the fig:ures
1 gave you yesterday. I got those hurriedly over the telephone.
Mr. Kennedy. That is all right.
Mr. Burke. While the change is not consequential, there is a slight
change.
The insurance in force in 1954 was $449,287,000.
May I correct it ? That is the figui-e I gave you.
The figure that I i-eceived by wire, if you will change that, is $475,-
440,000.^
The Chairman. That is for 1954?
Mr. Burke. Yes sir.
The Chairman. $475 million ?
Mr. Burke, Yes, sir. There is a slight increase over what I gave
Mr. Kennedy yesterday for 1955, in that it is $495 million. The in-
surance in force for 1956 was $531,004,750.
Mr. Kennedy. How many policies do you have and what are the
number of policies ?
Mr. Burke. 257,
Mr. Kennedy. In 1956?
Mr. Burke. In 1956; yes, sir.
]\rr. Kennedy. And approximately the same in 1955 and 1954?
lMPROPf:R ACTIVITIES IN THE LABOR FIELD
2291
Mr. BuKKE. 252 policies in 1954 and 248 policies in 1955.
Mr. Kennedy. That is the number of policies that are covered by
these funds '^
Mr. Burke. That is right ; individual policies.
Mr. Kennedy. Do you know how your premium for insurance in
L956, approximately $25 million — do you know how that compares
^vith the premiums of other insurance companies in the United States ?
Mr. BuKKE. Mr. Kennedy, I do not.
Senator Ives. Kow many policyholders does your company have?
Mr. Burke. In 1954 — how many policyholders, you mean ?
Senator Ives. Policyholders ; yes.
Mr. Burke. I don't believe I could answer that, sir.
Senator I\tes. Have you no idea at all ?
Mr. Burke. No, sir ; it would be in the millions.
Senator Ivbs. I assume it would, or might be in the millions. It
jould veiy easily be. I would tliink that would be something that
y^ou would have on record.
Mr. Burke. Mr. Senator, my entire connection with Occidental has
:o do with mortgage loans. 1 do not function in the other end.
Senator Iatcs. I am not criticizing you, but you are vice president
3f Occidental and I would think that as vice president of a company
p^ou would know something about the number of policyholders that
company has.
Mr. Burke. I am sorry, I cannot state that.
The Chairman. You have a record of it ; do you not ?
Mr. Burke. Yes, sir.
The Chairman. Will you get in touch with your company, the
home office, and have them advise you by wire and submit that to the .
committee for its information ?
Mr. Burke, I will before the day passes.
The Chairman. Thank you.
(The information referred to follows :)
As of December 31, 1956, Occidental Life Insurance Company of California had
approximately 4,600,000 individual policies or certificates of coverage in force.
A spot check of the mortgage-loan files of Occidental discloses the following
peal-estate-mortgage loans to individuals by Occidental :
Date
Name
Amount
Rate
Emma Fm'st
$45, 000
52, 000
600, 000
40, 000
50, 000
31, 000
45. 000
25, 000
55, 000
« 147, 000
125, 000
750, 000
Percent
4
Do
Haiol'l R. and Aline T. Pauley and other members of the
Pauley family.
4J^
414
A.piil 1951
Robert 0. MeCurry and Harold J. McCurry
Mever and Tillie Berliner and Samuel W. and Frances
Brody.
H Taylor Peery
4K2
Do
Do
4K2
4)^
May 1951
5
Fanuary 1952
Do
Harold and Betty Roach
4^2
4^
Fune 1952
Victor and Marguerite Homung _ . .- -
5
6
Later increased to $187,000.
May 15, 1957.
A. M. Burke.
2292 IMPROPEK ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Mr. Burke, how long has your company had the in-
surance for the 11 Western States?
Mr. Burke. I think some 15 years.
Mr. Kennedy. How long have they had the welfare, life, sickness
and accident, and welfare policies for the 11 Western States?
Mr. Burke. I think the same time, although I am not too sure.
Mr. Kennedy. Do you know how they acquired them originally?
Mr. Burke. I do not, sir.
Mr. Kennedy. Mr. Chairman, I have here the interim report of
the special subcommittee of the Committee on Education and Labor
over in the House, chaired by Congressman McConnell, and it states
here or gives a summary of the data reported by insurance companies,
on employer-union health and welfare trust funds.
The total premiums for the years 1948 through 1953 for the Occi-
dental Insurance Co. was $68,490,674.97. The next largest of some 65
different insurance companies, that was the largest of any insurance
company and the next largest was the Prudential Insurance Co., which
was some $40,203,868.04.
There is no particular significance, but I thought it should be in
the record.
The Chairman. All right.
Mr. Kennedy. You have no information, Mr. Burke, as to how this
insurance first came to your company, is that right?
Mr. Burke. I have not, sir.
Mr. Kennedy. Now has Mr. Dave Beck made any requests of the
Occidental Insurance Co., any personal requests of the Occidental
Insurance Co., since the Occidental Insurance Co. had the insurance of
the Western Conference of Teamsters ?
Mr. Burke. Yes, sir.
Mr. Kennedy. Namely, did he in 1951 request a loan of some $273,-
000?
Mr. Burke. He did, sir.
Mr. Kennedy. Was that loan granted?
Mr. Burke. Yes, sir.
Mr. Kennedy. Now do you have the financial statement that was
placed with you by Mr. Dave Beck at that time ?
Mr. Burke. No, sir.
Mr. Kennedy. Did you require a financial statement from him?
Mr. Burke. Yes, sir.
Mr. Kennedy. What happened to the financial statement?
Mr. Burke. The financial statement was returned to him on his
request.
Mr. Kennedy. When was that?
Mr. Burke. I am not too sure when it was. There is no record that
we did return it. It seems to me that it was in 1953.
Mr. I^NNEDY. Did you keep a copy of the financial statement?
Mr. Burke. We did not. sir.
Mr. KJENNEDY. Is that the usual procedure that you would follow,,
to make a copy of a financial statement or keep a financial statement
of someone who had such a large loan from your company ?
Mr. Burke. Ordinarily we would keep a copy.
Mr. Kennedy. Do you know why that was not followed in this
case ?
ITVIPROPER ACTIVITIES IN THE LABOR FIELD 2293
Mr. Burke. Yes, sir. The reason that we did not do that was
that Mr. Beck or maybe Mr. Wampold, I am not too sure, called one
afternoon, called me personally about 4:25 and asked if he could
have this financial statement back.
The Chairman. It was at 4 : 25 ?
Mr. Burke. 4 : 25 in the afternoon. We close at 4 : 30.
The Chairman. I see.
Mr. Burke. I told him that I didn't Imow whether I could get it
out tonio-ht, and he said it was very imperative that he have it.
I put it in an envelope and mailed it to him that night.
The Chairman. What was the urgency about it ?
Mr. Burke. He did not tell me, sir.
The Chairman. Why did you not inquire? You are a business
executive, are you not ?
Mr. Burke. Yes, sir. The financial statement, Mr. Chairman, had
served its purpose and we had reference to it in the file, and those
references are before this committee.
The Chairman. Had the loan been paid off ?
Mr. Burke. No, sir.
The Chairman. Well
Mr. Burke. Payments were current.
The Chairman. I understand, but the loan had not been discharged ?
Mr. Burke. No, sir.
The Chairman. The obligation still existed, or part of the original
obligation ?
Mr. Burke. That is right, sir.
The Chairman. Maybe I do not know business, but is that the way
your company operates ?
Mr. Burke. That is the way we did operate, sir.
The Chairman. In this one instance ?
Mr. Burke. We have done it in other instances, sir. Generally,
when a borrower asks to have his financial statement returned, and
the loan is current, we do not resist.
The Chairman. You keep a copy of it, do you not ?
Mr. Burke. Not necessarily, sir. If it was submitted for deposit,
we might keep a copy but otherwise not.
The Chairman. I do not know what they are required for if they
are not to be kept as a part of the file and a part of the record of the
loan, supporting evidence to show why the loan was granted, and
that it was a sound loan and was based upon representations as to
the worth and the financial status of the borrower.
I do not know what purpose it would serve if it is not to be kept
as a part of the supporting evidence to sustain or support the loan.
I am a little puzzled about it.
Senator Ives. I would like to ask Mr. Burke a question.
Mr. Burke, is the Occidental Life Insurance Co. a mutual life-
insurance company ?
Mr. Burke. No, sir.
Senator I^T3S. Is it a stock company?
Mr. Burke. Yes, sir.
Senator Ives. Does Mr. Beck own any stock in it?
Mr, Burke. No, sir.
Senator Ives. He never has ?
Mr. Burke. No, sir.
2294 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Ives. Thank you.
Mr. Kennedy. Mr. Chairman, this financial statement takes on
particular sioniiicance for this comimttee, and for the Government,
the Internal Revenue Department, but here we have a memorandum
dated April 12, 11)51, and some notes I believe made by Mr. Burke on
that financial statement.
I would like to have it identified.
The Chairman. All right.
Mr. Burke, the Chair presents to you what purports to be a photo-
static copy of a memorandum taken from your files, dated April 12,
1951. Will you examine it and state if you recognize it as a photo-
static copy of the original ?
Mr. Burke. I do, sir.
The Chairman. That may be made exhibit 190.
(The document referred to was marked "Exhibit Xo. 190" for refer-
ence and will be fonnd in the appendix on p. 2543.)
Mr. Kennedy. Mr. Chairman, this is dated April 12, 1951, and
it is entitled "Mortgage Loan Department. Borrowers, Dave Beck
and Dorothy E. Beck, Husband and Wife," and it discusses the $273,-
000 loan. Then it states here :
FiXANCIAL Data AXD OeXERAL iNFOKitATION
Mr. Beck bas for many years held a position as vice president of the inter-
national Brotherhood of Teamsters. He declined to give a statement of his
salary and benefits from association with the union, stating that he did not
draw a large salary, but was quite satisfied because this was his life work.
Then his financial statement shows receipts of $1,052,716.65. This
is the important statement here, Mr. Chairman :
with his only liability being a bank loan of .$234,000 to the Security First National
Bank of Seattle.
Then it goes on to say this unsecured note is for 2% percent. This
was during the period of time that Mr. Dave Beck was taking from
the union some $300,000 vdiich he now states was a loan from the
union to himself and he states in this financial statement, at least from
the notes made on April 1951, on this financial statement of jMr. Beck
that his only liability was a loan from the bank. He mentions noth-
ing about any loans from any union that he had at the time.
The Chairman. What is the date of that loan ? Let us relate it to
this memorandum.
Mr. Burke. I think, sir, the date of the note is March 12, 1951.
The Chairman. That is 1 month prior to this memorandum?
Mr. Burke. That is right.
The Chairman. So that in March of 1951 he claimed he had — you
took this information from his financial statement, I assimie?
Mr. Burke. That is right, sir.
The Chairman. He claimed to have owed onlv how much ? It was
$234,000 and that is to one bank ^
Mr. Burke. That is right.
The Chair:^ian. That deducted from $1,052,000 left a net worth of
what, $820,000 in round numbers?
Mr. Burke. It seems to me it was more than that, but that could be
right. I thought it was $1 million. It might be that you are right.
(At this point. Senator McNamara entered the hearing room.)
IMPROPER ACTIVITIES IN THE LABOR FIELD 2295
The Chairman. Maybe it was, if Ave had tlie orig-iiial statement here.
Mr. BuKKE. I woiikl not know, sir.
The Chairman. In other words, $820,000 is a little bit conservative,
you think?
Mr. Burke. It is a little bit conservative, but it is a lot of money, sir.
The Chairman. All right, Mr. Kennedy.
Senator Kennedy. I would like to ask the counsel : Did he ask for
that bank statement and was this at a time when the income-tax people
were investigatino- him?
Mr. Kennedy. Do you know whether it was 1053 or 1954, Mr. Burke,
when Mv. Beck asked for the financial statement ?
j\fr. Burke. I cannot be sure whether it was 1953 or 1954, sir.
The Chairman. Did you not place some notation in file that it was
withdrawn at his request and the date of the withdrawal of it?
Mr. Burke. It seems to me that I did, but I cannot find any refer-
ence where I did.
The Chairman. That would be the normal thing for you to do;
would it not?
Mr. Burke. It would be the normal thing for me to do, as your peo-
ple will tell you, to make penciled notes, but I do not find that I did.
I cannot find it and I have looked for it.
Senator Kennedy. It would appear that Mr. Beck wanted this
statement right away and it was probably because the income-tax peo-
ple were investigating him at this time,
Mr. Kennedy^ At least they started the investigation at the end of
December of 1953, and their first conference with Mr. Beck was in
March of 1954.
Of course, this financial statement would have been of great value to
them and of great value to this committee because it would have shown
in his own writing or signed by him that the only liability that he had
was this loan from the bank.
Senator Kennedy. And, therefore, the money that he now states he
took from the teamsters in the form of a loan was not listed in the
records here as a loan.
Mr. Kennedy. And it would, therefore, appear that that money
was stolen rather than borrowed.
Senator Kennedy. Therefore, as Mr. Brewster stated also, who had
great responsibility in this field, he also said he was not aware it was
a loan. This would be substantiating information which would indi-
cate tliat Mr. Beck in his financial statement did not regard it as a
liability and, therefore, we would have to draw the conclusion that
he did not regard it as a liability, but instead had taken it for his
own personal use.
Mr. Kennedy. That is correct.
Mr. Burke, you are not questioning any of the figures that you made
in this memorandum, are you?
Mr. Burke. No, sir.
Mr. Kennedy. In answer to the Chairman's question about what
you felt was his worth, you said that you thought maybe it was $1
million rather than $800,000. You are not questioning the figures in
here?
Mr. Burke. No, sir.
jNIr. Kennedy. You say these are accurate ?
2296 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Burke. Yes, sir, those were made at the time and my memory
could well be wrong.
Mr. Kennedy. Mr. Chairman, we also have another memorandum
dated March 14, 1955, regarding this $273,000, which I would like to
have Mr. Burke identify.
(Senator Ervin entered the hearing room at this point.)
The Chairman. The Chair presents to you what purports to be a
photostatic copy of a memorandum dated March 14, 1955, and signed
by you, addressed to Mr. H. W. Brower, president of the Occidental
Life Insurance Co.
Will you examine this document and see if you identify it?
(A document was handed to the witness.)
Mr. Burke. I do, sir.
The Chairman. It may be made exhibit 191.
(The document referred to was marked "Exhibit No. 191" for
reference and will be found in the appendix on pp. 2544-2545.)
Mr. Kennedy. Mr. Chairman, in this statement Mr. Beck has stated
that—
the only indebtedness he has outstanding in addition to that he owes Occidental,
is the mentioned loan to the bank in the amount of $200,000.
Now, this again takes on significance because this is dated March
14, 1955, and Mr. Beck following this date, subsequent to this date,
returned another $70,000 to the union, which he stated was $70,000 that
he had owed to the union and had not repaid.
Yet, in this statement that he made to the Occidental Life Insurance
Co., still it makes no mention of that.
The Chairman. This document that you identified, which has been
marked as "Exhibit 190," is a report on an interview you had with
Mr. Beck, is it ?
Mr. Burke. That is right, sir.
The Chairman. You had an interview with him and then you
made a memorandum of the information he gave you ?
Mr. Burke. That is right, sir.
The Chairman. And the status of his loan, and so forth, at the
time?
Mr. Burke. That is right, sir.
The Chairman. And at that tune, he claimed he only owed $200,000,
is that right ?
Mr. Burke. That is right, sir.
The Chairman. And to the same bank we referred to a while ago?
Mr. Burke. I am not too sure about who the debt was to.
The Chairman. The Seattle First National Bank, that is the same
one, I believe.
Mr. Burke. Yes, sir.
The Chairman. At that time he claimed the loan had been paid
down to the amount of $200,000. Again he did not report to you that
he owed the Teamsters Union International anything, did he?
Mr. Burke. He did not, sir.
The Chairman. Or the Western Conference ?
Mr. Burke. He did not, sir.
The Chairman. Or that he had been borrowing from the union?
Mr. Burke. He did not, sir.
The Chairman. Or that he ever owed the union anything?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2297
Mr. Burke. He did not, sir.
The Chairman. In other words, he withheld all of that informa-
tion from you ?
Mr. Burke. He did, sir.
Mr. Kennedy. Now, Mr. Burke, at that time you received, when
the loan was made in 1951, some collateral for the loan, did you not?
Mr. Burke. That is right.
Mr. Kennedy. That was about $400,000 that you had in collateral ?
Mr. Burke. The collateral totaled, and in speaking of the collateral
the real estate as we appraised it totaled $415,400.
Mr. Kennedy. Mr. Chairman, this is a copy of the appraisal, if we
could have it made an exhibit for reference for our use.
The Chairman. The Chair presents to you what purports to be a
photostatic copy of the appraisal of the property made by the Occi-
dental Insurance Co., and will you examine it and state whether you
identify it, please?
(A document was handed to the witness.)
Mr. Burke. Without going through each individual item, I feel
confident that these are photostatic copies of the appraisals in our
records.
The Chairman. All right. That will be made exhibit 192 for ref-
srence only. It will not be published in the record.
(The document referred to was marked "Exhibit No. 192" for ref-
erence and may be found in the files of the select committee.)
Mr. Kennedy. Now, Beck's home at that time, you appraised that
and that was one of the pieces of property that was appraised and it
was appraised at $100,000, is that correct ?
Mr. Burke. That is right, sir.
The Chairman. Is that the same home? "VNHiat is the date of that
appraisal ?
Mr. Kennedy. January 21, 1951, Mr. Chairman.
The Chairman. "VVliat is the date of that appraisal?
Mr. Kennedy. January 25, 1951.
The Chairman. The date of that appraisal, your report shows, was
January 25, 1951 ?
Mr. Burke. That is right, sir.
The Chairman. At that time you appraised the Beck home at
$100,000?
Mr. Burke. Yes, sir.
The Chairman. That is the same onie that he sold to the union for
$163,000?
Mr. Burke. Yes, sir ; with the exception I am quite certain, that in
behind that home there was a lot on which some of the improvement
on this home slopped over and there was a small portion that was
released in addition to this piece of security.
The Chairman. Did you appraise all of his property there, in-
cluding that in his home, all of the houses and land that he owned in
that block?
Mr. Burke. No, sir.
The Chairman. Only the house?
Mr. Burke. Only the house.
The Chairman. Only the residence?
Mr. Burke. That is right, sir.
2298 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. How do you know that this additional pait was in
eluded in the appraisal by the union when they paid $163,000?
Mr. Burke. I do not know, sir, except we released it at that time
Mr. Kennedy. I thought you testified that the property as pur
chased by the union was a little bigger or there were some improve
ments in it.
Mr. Bitrke. I presume that the property that was purchased by th(
union was that that we released.
Mr. Kennedy. Was exactly the same, you mean ?
Mr. Burke. I couldn't testify as to that. I didn't see the deed, anc
I don't know what he sold.
Mr. Kennedy. I thought you did testify in answer to the chair
man's question that the property was larger, and you started to de
scribe that the property in back was included when it had not been ir
your appraisal.
Mr. J^URKE. I did not mean to mislead the chairman in that.
Mr. Kennedy. You have no knowledge on that at all ?
]Mr. BuRKE. I have no knowledge of what he sold to the union
Mr. Kennedy. Now, how much is outstanding on that loan of $27o,
000 at the present time ?
Mr. Burke. $94,185.99.
Mr. Kennedy. Would the 3i/^-percent interest in 1951 be considerec
quite reasonable ?
Mr. Burke. Yes, sir.
Mr. Kennedy. What were you charging ordinarily in 1951, as fax
as interest was concerned ?
Mr. Burke. Interest rates to the best of my recollection ran fron
Sy2 to 5 percent depending upon the collateral and the borrower.
Senator Ives. Could I ask a question tliere.
Mr. Burke, what were you charging your policyholders for loans ^
Mr. Burke. I think the same as today, about 6 percent.
Senator Ives. You were charging 6 percent at that time ?
Mr. Burke. Yes, sir.
Senator Ives. And the loan to Mr. Beck for 31/^ percent ?
Mr. Burke. Yes, sir.
Senator Ives. Thank you.
jNIr. Kennedy. Did the Occidental Insurance Co. ever make a loan
as large as this, to any other individual ?
Mr. Burke. Yes, sir.
Mr. Kennedy. When was that ?
Mr. Burke. It could have been before or it could have been after.
1 am not too sure of the particuhir loan I liave in mind.
Mr. Kennedy. Do you have just one loan in mind ?
Mr. Bt'Rke. No, I have other loans, but I am sure we have other
loans, but one in particular so that I could answer your question. Yes,
sir, we have,
Mr. Kennedy. l^Hiat was the interest rate on that loan ?
Mr. Burke. I would have to reacli for that, but I tliink it was prob-
ably 4:^2 percent or maybe 5 pei-cent, rud I think Ii/^ percent.
Mr. Kennedy. Hove nmch was that loan ?
Mr. Burke. A half million dollars.
Mr. Kennedy. We do not want to bring in the name of some party
that lias nothing to do with the hearings, but maybe Mr. Burke, after
the heariuo- is finished, could find us the name of that individual.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2299
The CiiAiKMAX. You may supply the name for the infonnatiou of
:he committee, and it will not necessarily ^o in the record, and we are
lot trying to embarrass other people who are operatmg legitnnately,
md so forth.
Mr. Burke. I will do so, sir. , o ^ ^
The Chaikmax. We simply want to make a comparison ot treat-
ment accorded in these matters.
Senator Kexxedy. Why did you give that 31/2 percent while cus-
tomarily it was 5 and 6 percent, to Mr. Beck? ., . ,.
Mr. Burke. That was the lowest interest that we felt at that tune
we could give a policyholder and a good customer.
Senator Kexxedy." What do you mean by a good customer?
Mr BmKE. The Teamsters Union of which Mr. Beck is a high
officer is a verv large case. Mr. Beck individually has a lot of insur-
ance with us, and we would atiord that same treatment to any good
policyholder and customer. j. . .1 ^ tvt
Senator Kexxedy. Was the 3i/, percent due to the fact that Mr.
Beck personally had a lot of insurance with you, or that the team-
sters did ?
Mr. Burke. It was primarily that he personally had a lot of insur-
ance with us, primarily.
Senator Kexxedy. How much was that?
Mr Burke. I cannot tell you that. I am sure that the hie wilJ
show. I am certain that at the time w^e granted this loan, the cash
surrender value of that policy was $45,000 and some cents.
Senator Kexxedy. Is that a lot? . ■ . n
Mr. Burke. That to me is a lot; yes, sir; and it is quite a lot ot
insurance, cash surrender value on an individual policy. ^
Senator Kexxedy. Well now, what was the Teamsters Union s
business with you? We are trying to get it comparative. How much
were they ? How many millions did that involve ? . , • •
Mr. Burke. I don't'believe I can testify to that, but I think it is
in one of those memorandums as to what that case meant to us.
Senator Kexxedy. That would show about $20 million ?
Mr. Burke. That is riffht.
Senator Kexxedy. It would seem to me that it was the teamsters
that were the good customers and not so much Mr. Beck, is that not
rif^ht* Were you not giving it because of the business that Mr.
Beck had directed to you in behalf .of the teamsters, rather tlian
because of Mr. Beck's cash value, in Mr. Beck's own policy (
Mr. Burke. I don't believe so, Mr. Kennedy.
Senator Kexxedy. Would you say it was equally?
Mr. Burke. It could be ; yes.
Senator Kexxedy. You mean it was or wasn t?
Mr. Burke. It could be ecpially, the two taken together wouki
influence us in giving the best rate we could at that time.
Senator Kexxedy. Now, is there anyone else, a similar borrowing
situation, who got that low interest rate? -, , . , 1
Mr Burke During the same month we granted this loan, we made
163 other loans on which we netted Si/o percent. That is before home
office expense.
Senator Kexxedy. To individuals?
Mr. Burke. To individuals ; yes, sir.
2300 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Kennedy. So that that was your average rate during that
month, and not 5 or 6 percent ?
Mr. Burke. That is right. That was not our average rate; no.
That was not our average rate.
Senator Kennedy. I don't understand what this average means,
then. You testified before that your rates were around 4i4, 5, to 6
percent. Whui do you mean by your average rate in that month was
only 31/^ percent ?
Mr. Burke, The average rate would have to be taken from all of the
loans that we made in the month in order to get that average rate. I
can give you that figure if you would like it, sir.
Senator Kennedy. How many were less than 314 percent?
Mr. Burke. None.
Senator Kennedy. How can the average be, if most of your loans
were 4i/4, or 5, or 6, liow can the average be just 3i/^ percents ? Are you
talking about people who defaulted, is that how you reach your aver-
age ? How do you reach your average ?
Mr, Burke. Let me not get you confused, or get me all confused.
In May of 1951, we made 642 loans. Thirty-two of these — may I cor-
rect that, and go back to March, rather than May, please.
The Chairman. T^t us deal with March first.
Mr. Burke. In March of 1951, we made 854 loans in our mortgage-
loan department. The net on these loans before home office expense
was 4.04, or just a trifle over 4 percent. 103 of these loans netted us
31/^ percent, 271 netted us ?j%, 153 netted us 4i/4 percent.
Senator Kennedy. Is that the rate on the loans or your earnings?
Mr. Burke. No ; that is what we netted.
Senator Kennedy. Now, what is the rate on those loans?
Mr, Burke. Shall I finish this?
Senator Kennedy, I am not interested so much in the net as I am in
the rate, and if you have the figure of 3i/^ on Mr. Beck's loans as the
rate, what is the rate of these March loans, these 854? Wliat is your
average ?
Mr. Burke. One loan, the note rate was 314 percent, which was Mr.
Beck's loan, and 163 of them were 4 percent. 234 of them were 414
percent, and 228 of them were 5 percent, and 8 of them were 514 per-
cent, and 1 was at 6 percent.
Senator I^^ES. May I ask a question there ?
Mr. Burke, how many of tliese loans were for policyholders' loans,,
made to policyholders ? How many of them were ?
Mr. Burke. I question if very many were.
Senator Ives. Were any of them ?
Mr. Burke. I would not know, sir.
Senator Ives. I just want to clear up one thing. You told me all
of your loan policyholders were 6 percent when I asked you that
question. Now you are giving these other percentages, and so if you
haA^e a single policyholder here you were not rijjht in the first instance.
Mr. Burke. Please don't let me get you confused.
Senator Kennedy. I am confused.
Mr. Burke. I want to straighten it out immediately.
When you speak of policy loans, those are loans on an insured and
not real-estate loans. These are real-estate loans.
Senator Iat-:s. That is what I want to eet clear, what these are.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2^01
The Chairman. Your 6 percent that you spoke of, was where you
loaned on the policy?
Mr. Burke. That is right, sir.
The Chairman. These other loans, they may be policyholders, but
you are making loans on other securities.
Mr. Burke. Thank you, sir.
The Chairman. Is that correct?
Mr. Burke. That is correct.
Senator Kennedy. In the month of March, Mr. Beck was the only
loan that got 3i/^ percent ?
Mr. Burke. That is right, sir.
Senator Kennedy. Out of 854 loans, in the month of March; is that
correct ?
Mr. Burke. That is right, sir.
Senator Kennedy. He was the only one who got the 3i/^ percent,
and everybody paid more than Mr. Beck ?
Mr. Burke. That is right, sir.
Senator Kennedy. And the reason Mr. Beck got that loan was a
combination of the fact that the teamsters union was a customer, and
he himself was a customer?
Mr. Burke. And the additional fact that we did not have to pay a
finder's fee. and did not pay any service charge on it.
Senator Kennedy. I think it is interesting that everybody is so
anxious to do Mr. Beck a good turn. Here out of 850 loans of this
company in March, only Mr. Beck gets 3i/2 percent. Don't you think
that is odd ?
Mr. Burke. It is a circumstance. I do not believe any other policy-
holder or any other person that we would have wanted to have made
a rate came to us in that particular month, sir. I think it is odd.
Senator Kennedy. Thank you.
Mr. Kennedy. Just again, how many loans were there during that
month ? I think there is a question about it.
Mr. Burke. 854 during the month of March 1951, sir.
Mr. Kennedy. Was that the breakdown, that you gave us, numbered
854?
Mr. Burke. I started to read, if you will remember, the month of
May of 1951, which is the time the other loan was closed.
Mr. Kennedy. After this loan that you made for $273,000 was
made, for Mr. Dave Beck, I might say that in 1950, the premiums
paid to the Occidental Insurance Co. was $6,470,976.72. In 1951,
$6,355,799.54. That was the year of the loan.
Tlie year following the loan, the premiums paid were $17,204,200.87.
Now', did you make a second loan to Mr. Dave Beck?
Mr. Burke. We did, sir.
Mr. Kennedy, During that same year?
Mr. Burke. Yes, sir.
Mr. Kennedy. For $40,000?
Mr. Burke. Yes, sir.
Mr. Kennedy. That again was for 314 percent?
Mr. Burke. Yes, sir.
Mr. Kennedy, ^^liat was the date of that loan ?
Mr. Burke. April 16, 1951.
Mr. Kennedy. What was the date of it?
Mr. Bltrke. April 16, 1951.
2302 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Noav, did Mr. Beck again put up some property as
collateral on that loan ?
Mr. BuRicE. He did, sir.
Mr. Kennedy. Was one of the pieces of property some property
that he purchased for $14,000 ?
Mr. Burke. That I wouldn't know, sir.
Mr. Kennedy. Do you have a description there of the property?
Mr. Burke. I don't believe I do, Mr. Kennedy.
There were three parcels, and I believe we furnished photostatic
copies of the appraisals.
Mr. Kennedy. Did you understand that one of the pieces of prop-
erty there had been a mortgage on the property, and it was held by
Mr. Nathan Shetferman ?
Mr. Burke. No, sir.
Mr. Kennedy. You don't have any information on that?
]\Ir. Burke. No, sir. I never heard of that gentleman until I heard
part of this testimony.
Mr. Kennedy. You didn't receive a notification from Mr. Shef-
f erman that the mortgage had been fully satisfied and paid ?
jNIr. Burke. I did not, sir.
Mr. Kennedy^. Now, did Mr. Beck in addition to the request for the
2 loans at 31/2 -percent interest, did he make any other requests of
you?
Mr. Burke. He did, sir.
]Mr. Kennedy. Did he ask you to appraise a piece of property in
Los Angeles?
Mr. Burke. Several pieces of property, sir.
Mr. Kennedy. First he asked you to appraise the Union Avenue
property ?
Mr. Burke. Yes, sir.
Mr. Kennedy'. When was that, and what was the date of that?
Mr. Burke. On February 20, 1 believe it was, 1952.
Mr. Kennedy'. Mr. Chairman, could we get this letter identified ?
The Chairman. The Chair presents to you what purports to be a
photostatic copy of a letter from Dave Beck dated February 28, 1952,
to Mr. Tom Hession, assistant manager of real-estate department, of
Occidental. Will you examine the document and state if you identify
it?
Mr. Burke. I do, sir.
The Chairman. That letter may be made exhibit 193.
(The document referred to follows.)
Mr. Kennedy'. It is a letter dated February 28, 1952, and addressed
to Mr. Hession, who works with you ; is that correct ?
IMr. Burke. He is my assistant, sir.
Mr. Kennedy'. It is signed by Dave Beck, and reads :
Dear Mr. Hession : I am in receipt of a letter from Mr. Burke outlining .action
as regards the acquisition of property at 841481/2 South Union Avenue. I would
appreciate your following through for the securing of this property, in harmony
with the option, and will complete the transaction whenever you can bring it
about.
This is the imi)ortant i)art :
I do not want anyone in Los Angeles to know tliat I am dealing on this prop-
erty, and by that I mean no one —
"no one" being underlined —
IMPROPER ACTIVITIES IN THE LABOR FIELD 2303
and so I would appreciate your handling it with strictest confidence and without
discussion with anyone whomsoever.
I am also interested in acquiring the properties north of the Teamster Union
Building and will appreciate any information you can give me in addition to
that already sent by Mr. Burke. I do note in the letter that the owner of the
property which we ave attempting to close for has two pieces in the block across
the street. I wonder if they are the two pieces of property across the alley
directly ad.1oining the property of the teamster organization?
I would appreciate your getting this information for me, and anything you
might do to keep me in touch with it. I will fly to Los Angeles or send someone
down if it appears that I can pick up at a proper price, any of the lots north of
the Teamster Building, to the corner of Seventh, and preferably lot by lot, as it
would complete the expansion program of the teamster organization.
Now, did you understand thtit Mr. Beck was interested in this
property for the teamster oroanization?
Mr. BVrke. I did, sir.
Mr. Ken^nedy. Did he oo on to request that you arrange that this
particular piece of property be purchased in someone else's name ?
Mr. Burke. He did, sir.
Mr. Kennedy. And did you go ahead and do that ?
Mr. Burke. I did, sir.
Mr. Kennedy. And was the property purchased in someone else's
name ?
Mr. Burke. It was, sir.
Mr. KENNEDY. In whose name was it purchased ?
Mr. Burke. C.J. Lick.
Mr. Kennedy. Then did you arrange the insurance for the prop-
erty?
Mr. Burke. I did.
Mr. Kenndey. And you arranged for the utilities on the property?
Mr. Burke. I did, sir.
Mr. Kennedy. And so this service that you undertook for Mr. Beck
took some period of time ; is that right ?
Mr. Burke. That is right.
Mr. Kennedy. Was any charge made to Mr. Beck for tliat ?
Mr. Burke. No, sir.
Tlie Chairman. What would be a proper charge for the services?
Mr. Burke. That would be an accommodation that we woidd do
for any bank or insurance company, and any insurance company
and bank might do for us. There would be no charge for it, except
out-of-pocket expense.
The Chairman. What is that?
Mr. Burke. Except out-of-pocket expense. If we would send a man
and he would have to liave a hotel room, and so forth, we v.ould expect
to be reimbursed for it.
Mr. Kennedy. Was this property ultimately sold? Tliis is still
back in 1952. Was this property ultimately sold to Mr. Miller?
Mr. Burke. Yes, sir.
Mr. Kennedy. An arrangement was made with ]\[r. Millei-^
Mr. Burke. In that same escrow, sir.
Mr. Kennedy. That pro])erty was sold for $25,000 ?
Mr. Burke. That property was purchased by Mr. Lick as nominee
for $25,000.
Mr. Kennedy. And Mr. Chairman, the records show that the prop-
erty was actually owned by Mr. Beck, and Mr. Beck sold that same
property to the teamsters union, in December of 1952 for $30,000.
8!:t.330— 57— pt. 7—21
2304 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman, Do you know about that transnction ?
Mr. Burke. I do not know about that transaction, Mr. Chairman.
In the escrow, we — and I say we — Mr. Lick deeded the property to a
Mr. Miller, I believe it was, at Seattle, for the same consideration
that he acquired it from the borrower.
The Chairman. That is $25,000 ?
Mr. Burke. Yes, sir ; that is right, sir.
The Chairman. Again Mr. Beck just charged his union $5,000 for
his services in getting thn property ?
Mr. Burke. Apparently so.
Senator McXamara. I)o our records disclose whether or not there
was a Mr. Miller, or was that an assumed name ?
Mr. Kennedy. Mr. Beck purchased a number of lots of property
under Mr. ]\Iiller's name.
Senator McNamara. There is a Mr. Miller, and what was his rela-
tionship with Mr. Beck ? Does the witness know ?
Mr. Kennedy. He is a real-estate agent in Seattle, I believe. He
handled as I say some other transaction, and this transaction, real-
estate transactions, for Mr. Beck.
Senator McNamara. Thank you.
Mr. Kennedy. Did you understand that Mr. Simon Wampold also
owned some property surrounding the Teamsters Building in Los
Angeles ?
Mr. Burke. No, sir.
The Chairman. I present to you what purports to be a photostatic
copy of a letter from you to Mr. John F. Miller, dated April 16,
1952, and ask you to identify it, ])lease, sir.
(Document was handed to the witness.)
Mr. Burke. I do, sir.
The Chairman. That is a photostatic copy of the carbon copy in
your file ?
Mr. Burke. That is, sir.
The Chairman. That may be made exhibit No. 194.
(The document referred to was marked "Exhibit No. 194" for
reference, and will be found in the appendix on p. 254(i.)
Mr. Kennedy. I have a question that I wanted to ask about this.
There is a note down at the bottom of the letter dated April 16,
1952, to Mr. John F. Miller, and signed by Mr. Burke, and a copy to
Simon Wampold, and then a note to Simon Wampold :
Dear Si : When I was out on this pi-operty last evening, I noted that the
property at 837 South Union was vacant. I understand that you recently ac-
quired this, and I found a number of youngsters in there playing.
What is that property ?
Mr. Burke. I think that reference has to do to the teamsters own-
ing that piece of property, and not Si Wampold.
Mr. Kennedy. Why would you notify Si Wampold about it?
Mr. Burke. He was my communication on many occasions with
Mr. Beck. He acted as his business adviser, and counsel and coun-
sellor.
Mr. Kennedy, Couldn't you have just notified the teamsters organi-
zation in Los Angeles ?
Mr, Burke. I never have had any contact with anyone there.
Mr. Kennedy. If they owned this propertj^ they would be aware
of the fact it wasn't being kept up properly, would they not ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2305
Mr. Blkkk. :Mi-. Kennedy, may I clear a little bit there ?
Mr. Kennedy. Let me read the rest of this note.
I understand you recently ac(iuired this, and I found a number of youni?sters
in there playing! Both the front and back doors and one window were open and
I attempted to close them. However there was a pane of glass out and I would
anticipate they went back in as soon as I left. , ^ i ^ ^.v
Incidentally, in the property acquired by Mr. Miller I understand one of the
tenants has moved and another contemplates moving. There is some friction
between other tenants. It may be that you are too concerned as to occupancy,
but in any event I thought I would pass this information on to you for whatever
it is worth.
Best regards, ^
Burke.
This is a property that adjoined the teamster headquarters ; is it not ?
Mr. Burke. It is acros.s the street from it.
JNIr. Kennedy. If the teamsters owned the property, they would
know whether there were cliildren running in and out of the building
and you would not have to notify Mr. Wampold.
Mr. Burke. Except on one occasion, I never have had any contact
Avith anybody in the Los Angeles Teamsters Union.
Mr. Kennedy. Why would you have to write Mr. Simon Wampold
in Seattle there were children rimning in and out of a building that
was owned by the teamsters in Los Angeles, and which was right across
the street, and any teamster that came in could see that it wasn't being
kept up proper] V.
:Mr. Burke. I don't think that there is any significance to that, Mr.
Kennedy. I was writing the letter and I just gave him what would be
quite a normal report.
Mr. Kennedy. Did you understand that this property was m fact
owned by Simon Wampold as an individual ?
Mr. Burke. I dotrt think that he owned any property.
Mr. Kennedy. You never understood that at all ?
Mr. Burke. No, sir.
Mr. Kennedy. All right.
Now, did you appraise some other property for Mr. Dave Beck ?
Mr. BuRivE. We did, sir.
Mr. Kennedy. You appraised a property called the Vista Del Mar
property ?
Mr. Burke. Yes, sir.
Mr. Kenned. Now, Mr. Beck wrote you and said that he wanted to
find out what tlie Avortli of that property was.
Mr. Burke. I ctm't be sure. He told me when he was asked in the
office if I would have an appraisal made.
Mr. Kennedy. And you had the appraisal made?
Mr. Burke. I did, sir.
Mr. Kennedy. And wps any charge made to Mr. Beck ?
Mr. BuRitE. No, sir.
Mr. Kennedy, Do you know what was done on that property ?
Mr. Burke. No, sir.
Mr. Kennedy. Did you also offer to make a loan on the x)roperty ?
Mr. Burke. I don't believe so.
(xVt this point Senators Goldwater and Curtis entered the hearing
room.)
Mr. Kennedy. Did you discuss making a loan on the property?
Mr. Burke. It is very possible that I did, but I don't remember.
2306 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You don't know whether it was actually agreed to ?
Mr. Burke. I am certain we did not make a loan.
Mr. Kennedy. There is a letter, Mr. Chairman, if we could have
these documents again made documents for reference, and there is
a letter there that indicates that you discussed a loan.
Mr. Burke. Yes.
The Chairman. I present to you a photostatic copy of a letter
from yourself to Mr. Dave Beck, on April 18, 1952, with attached
documents, and ask you to examine it and state if you identify it.
( Documents were handed to the witness. )
Mr. Burke. I do, sir.
The Chairman. That may be made exhibit No. 195.
{The document referred to was marked "Exhibit No. 195" for refer-
ence and will be found in the appendix on pp. 2547-2550.)
Mr. Kennedy. Mr. Burke, we had some testimony the other day
about a meeting that Mr. Loomis stated he attended down in Los
Angeles regarding the Lanphar mortgages that were being purchased.
That was in 1953, 1 believe.
Mr. Burke. That is right, sir.
Mr. Kennedy. At that meeting, it was indicated that Mr. Dave
lieck was going to receive a commission or kickback in the Lanphar
mortgages, and that Mr. Beck was going to be part of a setup in the
National Mortgage Co. Do you remember any discussions on that?
Mr. Burke. I do remember discussions, not exactly as stated.
Mr. Kennedy. Do you remember any discussions about Mr. Beck
being mentioned?
Mr. Burke. Yes, sir.
Mr. Kennedy. In what connection?
Mr. Burke. Mr. Hedlund, I then thought, was trying to impress
me with his alleged alliance with Mr. Beck.
Mr. Kennedy. What did he state at that time?
Mr. Burke. It is awfully hard to go back and pick up a conversa-
tion that far back, but I think Mr. Loomis' testimony was very fair,
that a lot of mortgage-loan talk was kicked around, and
Mr. Kennedy. But you do not remember the details of it ?
Mr. Burke. Not too clearly, sir.
Mr. Kennedy. Mr. Burke, also, was there an approach made to
you, another request made to you, to make a loan to Criterion Films?
Mr. Burke. There was, sir.
Mr. Kennedy. Were you interested initially in making that loan
to Criterion Films.
Mr. Burke. We were not, sir.
Mr. Kennedy. And then did Mr. Sherman Stephens, secretary-
treasurer of the National Mortgage Co., who was also interested in
Criterion Films, did he Mrite you a letter dated January 13, 1955,
and state as follows — Mr. Chairman?
The Chairman. I present to you tlie original, what purports to be
the original, of a letter from Mr. Sherman S. Stephens, of the Na-
tional Mortgage, Inc., addressed to the Occidental Life Insurance
Company of California, dated January 13, 1955, and ask you to ex-
amine it and see if you identify it as the original letter that yoiu'
company received.
(Document handed to witness.)
Mr. BnnvE. I do, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2307
The Chairman. It may be made exhibit 196.
(The document referred to was marked "Exhibit No. 196," foi- refer-
ence and will be found in the appendix on pp. 2551-2552.)
Mr. Kennedy. I will read excerpts from this letter, Mr. Chair-
man, dated January 13, 1955 :
Dear Mr. Hession : During my various visits with you at your home office,
I believe it was quite thoroughly understood between the two of us and the
others of your company that you would not be interested at this time m any
conventional loans. The enclosed offering, however, is submitted to you regard-
less of that understanding for various reasons. First, I personally believe it
to be a very good loan. Second, it is on terms that I feel should be attractive
to your company. Third, I believe it is of extra value to you because of some
of 'the stockholders of the corporation. I want to call specifically to your
attention that Mr. Dave Beck, International Teamsters Union, is one of the
principal stockholders of the company.
Then the letter goes on describing the loan.
(At this point. Senator Mundt entered the hearing room.)
Mr. Kennedy. Did the Occidental Insurance Co. subsequently de-
cide to make the loan to Criterion Films?
Mr. Burke. They did, sir.
Mr. Kennedy. Here is another letter dated January 17, 1955, Mr.
Chairman.
The Chairman. I present to you what purports to be a photostatic
copy of a letter from Mr. Thomas S. Hession to Mr. Sherman S.
Stephens, dated January 17, 1955, and ask you to examine it and see
if you identify it.
'( Document handed to witness. )
]Mr. Burke. I do, sir.
The Chairman. That may be made exhibit 197.
(Tlie letter referred to follows.)
Mr. Kennedy. The letter dated January 17, 1955, to the Occidental
Life, signed Tom Hession reads :
Re The Criterion Films, Inc.
Dear Mb. Stephens : I have looked over tlie material furnished in connection
with the above loan application and reviewed it briefly with our loan committee.
At this time tlie committee is not anxious to initiate a conventional loan program
in Seattle. While the aboAe loan may be a sound reason, we would not prefer
to have only one conventional loan of this size in your city. It would require
setting up a' special bank account for conventional h.an trust funds separate from
the FHA account and considerable special handling. The building appears to be
well located and of a type with functional flexibility. However, in view of the
nature of the borrowing corporation business; and its limited history of earnings,
we would probably require personal guarantees of some of the principals on a
loan of this type. " If it is your desire that we give further consideration to this
loan, please advise us if such guarantees would be forthcoming.
(Signed) Thomas Hession.
Then there is a note down here :
Made personal contact in Los Angeles re this, February 7. They will let us
know soon —
and this note is signed by Hession.
Following that, this personal contact, did the Occidental Insurance
Co, decide to make this loan ?
Mr. Burke. We did decide to make it.
Mr. Kennedy. Was this based, again, on the item No. 3 that Mr.
Hession points out and Mr. Stephens points out, that Mr. Dave Beck
was a leading stockholder in Criterion Films?
2308 IMPROPER ACTIVITIES IN THE LABOR FIELD ''
Mr. Burke. I don't believe that was the whole deciding point, but
it probably did have an influence.
Mr. Kennedy. So you agreed to make the loan of $24,000, although
it had been turned down originally, you agreed to make the loan of
$24,000 to Criterion Films ?
Mr. Burke. That is right, sir.
Mr. Kennedy. And you feel it was based at least in some part on
the fact that Mr. Dave Beck was a principal stockholder ?
Mr. Burke. That is right.
Mr. Kennedy. Ultimately, in turn, Criterion Films did not go
through with the loan, is that right?
Mr. Burke. That is riglit.
Mr. Kennedy. So the loan was never made ?
Mr. Burke. That is right.
(At this point, Senators Ives and Goldwater withdrew from the
hearing room.)
Mr. Kennedy. Did you understand that the Criterion Films had
rented property, rented the building that they were in, from 1949
through 1952 on the basis of a rent of $450, with the understanding
from their landlord that this $450 would be applied to the purchase
price of the property ?
Mr. Burke. I believe that is a fact.
Mr. Kennedy. And did you understand then that when 1951 came
along they tried to purchase the property and could not raise the
money at that time, 1951 or 1952, they coiild not raise the money at
that time, and Mr. Dave Beck stepped in and purchased the property ?
Mr. Burke. No, sir ; I did not understand that.
Mr. Kennedy. Did you understand that Mr. Beck purchased the
property but did not purchase it in his own name, but purchased it in
the name of Mr. Jack Stackpool, who was a teamster official ?
Mr. Burke. No, sir ; I didn't understand that.
Mr. Kennedy. And that the rent from the Criterion Films Co.
continued at the rate of $450 a month although it was no longer ap-
plied to the purchase price ?
Mr. Burke. I had no such information before me.
Mr. Kennedy. Then did you understand when the Criterion Films
came to you people and tried to get this loan in order to purchase the
propertv, of $24,000, that they were stopped from getting the loan by
Mr. Dave Beck?
Mr. Burke. No, sir ; I did not know that.
Mr. Kennedy. Did you understand what the circumstances were
that made Criterion Films refuse to take the loan after they made the
application for it?
Mr. Burke. No, sir. I never heard from National Mortgage after
I was advised that they did not wish to accept our loan.
Mr. Kennedy. Mr. Chairman, we have some evidence here that
shows that Mr. Beck was the one that turned the approval for the loan
down, that for that reason the loan was never received from the Occi-
dental Insurance Co.
The Chairman. Do you mean after the Occidental had approved
the loan. Mr. Beck refused to sign as borrower ?
Mr. Kennedy. Because of the arrangement that he had, being the
landlord of the property that Criterion Films was in, ancl receiving
$450 monthly rent.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2309
Do you know if Jack Stackpool is a teamster official ?
Mr. BuitKE. I do not, sir. Or otherwise.
Mr. Kexnkdy. Do you know that another stockholder in the Cri-
terion Films is Mr. Sam B. jNIoss, who is also a teamster official ?
Mr, BiiRKE. I do not know him as a teamster official or otherwise.
Mr. Kennedy. Do you know that the Criterion Films has received a
$1,000 loan that has been outstanding for the last 5 years from local
353 of the teamsters?
Mr. Burke. I do not, sir.
Mr. Kenniidt. Do you know that Criterion Films made a film on.
Dave Beck for the teamsters ?
Mr. Burke. I do not, sir.
Mr. Kennedy. Mr. ('hairman, we have a list of at least some of the
customers of Criterion Films that we would like to place in the rec-
ord, if we could, so we can refer to it.
The Chairman. Do you have someone here who can testify to these
documents and tiles that you have here ?
Mr. Kennedy. Mr. Bellino.
The Chairman. Then we will get it into the record officially.
You may be at ease for a moment.
Mr. Bellino, take the stand.
You have previously testified during this series of hearings ?
TESTIMONY OF CARMINE BELLINO— Resumed
Mr. Bellino. Yes, sir.
The Chairman. In your official capacity of position, rather, work-
ing for the committee, have you procured certain documents under
subpena which you now have in your hands ?
Mr. Bellino. Yes, sir.
The Chairman. Identify the documents.
First state where you got them under subpena. The records are
from whose files ?
Mr. Belling. This is a letter dated February 17, 1955, which came
from the files of the National Mortgage, Inc. It is a letter from H. F.
Fleharty, the assistant vice president, to the Criterion Films, Inc.,
which confirms the fact that a firm commitment has been received
from one of their principals approving a first mortgage loan on the
property of Criterion Films. The loan was approved for $24,000 to
amortize in 12 years with interest at 5 percent.
The Chairman. That may be made exhibit 198.
(The document referred to was marked "Exhibit No. 198," for refer-
ence and will be found in the appendix on pp. 2553-2554.)
The Chairman. Proceed.
Mr. Bellino. On the bottom of the letter handwritten is a notation
^'Mr. Witt" the president of Criterion Films :
Mr. Witt says Mr. Beck won't sign. I told him we couldn't close loan.
The Chairman. Did you identify the file you took that letter from?
Mr. Bellino. That came from the files of the National Mortgage
Co. This is another document from the files of the National Mort-
gage, in the Criterion Films folder, and it is a handwritten notation
as to what should take place at a special meeting of the board of
directors, and the necessary paper which they would have to sign in
2310 IMPROPER ACTIVITIES IN THE LABOR FIELD
connection with this mortg-age. In other words, this w^as instructions
as to what they should do at the meeting in order to effect and take
advantage of this commitment that the National Mortgage Co. had.
The Chairman. That may be made exhibit 198.
Do all these pertain to this loan?
Mr. Bellixo. These all pertain to the loan.
Here is the corporate resolution of authority which "was prepared
in connection with this loan by the National Mortgage Co., dated
March 17, 1955.
The Chairman. They will be made exhibit 198-A, B, C, and so
forth, as they pertain to one item.
Go ahead.
Mr. Belling. And a letter dated February 25, 1955, from Mr.
Stephens to Mr. Hession wath regard to this loan, advising of the open-
ing of a special bank account as they had requested.
Next is a copy of the special bank account which has been opened
with a notation from Mr. Hedlund :
Sherman, do not make any further comments cr close this loan before we dis-
cuss it.
Next is a document that came from the files of the Occidental Life
Insurance Co. which contains a list of various pictures produced by
Criterion Films. It is a memorandum from the mortgage loan de-
partment to the investment committee, dated February 14, 1955.
The Chairiman. That may be made part of the exhibit.
(The documents referred to were marked "Exhibits Nos. 198 A, B, C,
D, E and F," for reference and will be found in the appendix on
pp. 2555-2563.)
Senator Kennedy. Does it state how much tlie ])icture of Dave Beck
cost ?
Mr. Belling. No, sir.
Senator Kennedy. Or wlio paid for it?
Mr. Belling. No, we don't know who paid for it.
Mr. Kennedy. I think it was a committee that was formed.
Mr. Belling. A citizens committee, I believe.
Mr. Kennedy. They gave a big diimer, I believe, out in Seattle,
for Mr. Beck, and I think the citizens committee paid for the film.
Senator Kennedy. The citizens committee at the dinner?
TESTIMONY OF A. M. BURKE— Resumed
Mr. Kennedy. That is what I understand.
You turned the loan down and then the loan ^vas granted because
of the letter from Sherman Stephens pointing out that Dave Beck
was the leading stockholder and it would be of interest to you people
to make tlie loan, and, subsequently, according to our records, that
loan was turned down by Mr. Dave Beck liimself, or he rofu.^ed to
take the loan. You at least know the fii-st part of tliat ?
Mr. Burke. That is right.
Mr. Kennedy. There Avas also another request for an appraisal
for a friend of Mr. Beck's in Los Angeles. He wanted a p\ecQ of
property appraised, Julian?
Mr. Burke. We know it as the Griffith property.
Mr. Ivennedy. Tliat was in September of 1953 ?
Mr. Burke. That is right, sir.
IMPROPf:il ACTIVITIES IN THE LABOR FIELD 2311
Mr. Kennedy. And vou ai)praised that i)i()i)ertv for this fiieiul
of Mr. Beck ^
Mr. Burke. No, sir. We appraised it for the teamsters union.
Mr. Kennedy. Was it a request of Mr. Beck ?
Mr. Bttrke. Yes, sir.
Mr. Kennedy. Was any char<re made on tliat '.
Mr. Burke. No, sir.
Mr. Kennedy. This is a copy of the appraisal, Mr. Chairman.
The Chairman. The Chair presents you what purports to be a
photostatic copy of that appraisal, about which you have just testi-
fied. Will you examine it and identify it, please, sir?
(Document handed to witness.)
Mr. Burke. I do, sir.
The Chairman. That may be made exhibit 199, for reference.
(The document referred to was marked "exhibit No, 199," for refer-
ence and will be found in the files of the select committee. )
Mr. Kennedy. There wasn't any information so that you could
know whether that was for Mr. Dave Beck or for the teamsters?
Mr. Burke. There was not, sir.
Mr. Kennedy. You did not inquire?
Mr. BiTRKE. No, sir.
Mr. Kennedy. Mr. Chairman, that was not for tlie teamsters.
That was for a friend of Mr. Dave Beck, that appraisal.
There was another request that Mr. Beck made of you, and that
was in connection with the National Mortgage Co. ?
Mr. Burke. Yes, sir.
Mr. Kennedy. Did he request at that time that you advance $50,000,
or advance some moneys to them each month for purchase of mort-
gages ?
Mr. Burke. That terminology could hardly be correct.
May I tell you what it is, please ?
Mr. Kennedy-. Please do.
]Mr. Burke. Mr. Beck stated to me that the teamsters union was
going to go into a VA or veterans' program, and that they wished
Occidental to participate in an FHA program. We agreed to do it,
taking approximately 4 or 5 loans, or $50,000 a month, until we had
built up an account which would be worthwhile for National Mort-
gage and Occidental Life.
Those loans were to be guaranteed under the Veterans Act.
No, under the National Housing Act, the FHA loans.
Mr. Kennedy^. How did you understand that was going to possibly
help the teamsters union?
Mr. Burke. The teamsters, Mr. Beck told me, wanted to invest
a sizable sum of cash that they had on hand in mortgages and that
they would take on a volume of VA loans. In order to get that, they
would have to have a rounded program which would require someone
to participate in the FHA loans.
Mr. Kennedy. Plow would your advancing $50,000, or whatever
figure you ultimately did, to the National Mortgage Co., how would
that possibly help the teamsters ?
Mr. Burke. Mr. Kennedy, that advance of $50,000 is not correct.
What we meant by that Avas that we would purchase loans insured
under the National Housing Act in the approximate amount of $50,000
a month.
2312 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. The Occidental Insurance Co. purchasing $50,000
of loans per month, how would that help the teamsters union ^
Mr. Burke. In order to invest sizable amounts of money for a trust
or an investor, you must have a rounded program, someone that will
buy VA's, someone that will buy FHA's, and someone that will buy
convential loans.
Mr. Kennedy. Do you mean the National Mortgage Co. needed a
rounded program ?
Mr. Burke. That is right.
Mr. Kennedy. What he wanted was you to advance $50,000 to pur-
chase loans so that the National Mortgage Co. would have a rounded
program ?
Mr. Burke. That is correct. That came out later.
Mr. Kennedy. That had nothing to do with the teamsters.
Mr. Burke. That came out later, about the National Housing.
Mr. Ivennedy. But that had nothing to do with the teamsters, did
it?
Mr. Burke. At that time it did — -
Mr. Kennedy. What he was requesting was a favor for the National
Mortgage Co., not a favor for the teamsters.
Mr. Burke. It now appears that that is right.
Mr. Kennedy. That is what he w^as requesting you to do. There was
no good that would come to the teamsters by what you were doing.
Mr. Burke. Oh, yes. It is not easy to pick up a block of loans, then
or now. It would be an advantage for the teamsters.
Mr. Kennedy. For the Occidental Insurance Co. to advance the
$50,000 to the National Mortgage Co. ?
Mr. Burke. There was no agreement as to advance.
Mr. Kennedy. That you would buy the loans ?
Mr. Burke. That is right.
Mr. Kennedy. Would you just tell me again, and I do not want to
labor the i)oint, as it was explained to you at that time how was that
going to be an advantage to the teamsters?
Mr. Burke. Tliat would be an advantage to the teamsters, Mr. Ken-
nedy, in that the people who purchased loans for the teamsters Avould
be able to refer the VA's to Occidental and to different life companies
so that they could buy blocks of loans in Seattle or any other place
they Avere operating in.
Mr. Kennedy. The teamsters union could go through any number,
and I am sure there are hundreds, of mortgage companies throughout
the United States who would love to have their business. It wouldn't
be necessary for the president of the teamsters to go to an insurance
company to make sure that they had a rounded program, like they
had to do for the National Mortgage Co.
(At this point. Senator INIundt withdrew from the hearing room.)
Mr. Burke. I think what w^e are trying to get at is that he wanted
to set up a program so that the National Mortgage Co. would be
successful.
The Chairman. So that it would make money.
Mr. Burke. That is right.
The Chairman. And he was more interested in tliat than he was
serving the teamsters.
There is no question in your mind about that, is there ?
Mr. Burke. Certainly not.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2313
The Chairman. Senator McNamara ?
Senator McNamara. I would like to ask yon, is Mr. Beck still one
of your valued and favored accounts ?
Mr. Burke. Mr. I5eck still has his personal insurance with us, so
far as I know, and he still is in control of the teamsters union.
Senator McNamara. And he would continue to get the favors as
he did in the past, getting a loan out of 854 advanced in 1 month,
negotiated in 1 month, he was the most favored. He still has that
same standing with the Occidental Life, your company ?
Mr. Burke. I question that very much, sir.
Senator McNamara. I am questioning it, too, but I do not get the
answer.
Mr. Kekneoy. Was there also a request from Mr. Beck regarding
the Argonaut Insurance Co. ?
Mr. Burke. There was, sir.
Mr. Kennedy. There was a request to make a loan to the Argonaut
Insurance Co. ?
Mr. Burke. No, sir ; I believe not.
Mr. Kennedy. What was the request ?
Mr. Burke. I believe the request, if my memory serves me right,
was from Mr. I^oomis, to assist him in evaluating the location and the
building that the Argonaut intended to build, and it may have been
later that Mr. Stephens of National Mortgage came into that same
picture.
Mr. Kennedy. Was Mr. Beck ever into it himself ?
Mr. Burke. I believe not.
Mr. Kennedy. What about the K. and L. Distributorship? Was
there also a request for a loan from them ?
Mr. Burke. There was, sir.
Mr. Kennedy. And did you agree, ultimately, to loan the K. & L.
distributorslii[), the beer company, $85,000, or approximately $85,000?
Mr. Burke. No, sir; we did not.
Mr. Kennedy. Were you ready to loan them $85,000 ?
Mr. Burke. I Avould like to explain that, if I could, sir, a little bit.
We were contacted by Mr. Beck and he requested a loan of $200,000.
I went to Seattle and looked at the property and told him that I would
not recommend to my committee a loan anywhere near the amount of
$200,000, but that in my opinion it might qualify for as much as
$85,000, maybe $90,000.
Mr. Kennedy. Nothing was done about it beyond that ?
Mr. Burke. Yes, sir. We ordered an appraisal of the propei'ty,
and I believe maybe we had ordered it before I told him that and the
appraisal was not delivered to us but was given to the National
Mortgage Co.
Mr. Kennedy. Was any charge made on that?
Mr. Burke. No, sir.
Mr. Kennedy. Would you identify this, please?
The Chairman. The Chair presents to you what purports to be
some memorandums from your oflice, maybe in your handwriting.
Mr. Butike. It is, sir.
The Chairman. Would you examine it, please, sir, and see if you
identify it?
(Document handed to witness.)
Mr. Burke. It is, sir.
2314 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. That may be made exhibit 200.
(The document referred to was marked '"Exhibit No. 200,'' for refer-
ence, and will be found ill the files of the select committee.)
Mr. Kennedy. Would you hold that there ?
We have here a note that says :
Owe .<i;200.000 in East, Brown Manufacturing.
What does that mean ?
Mr. BiTRKE. That note means I asked Mr. Beck the purpose of the
loan and he told me that he had an obligation of $200,000 to the
Brown Co. in the East,
Mr. Kennedy. Who did?
Mr. Burke. Mr. Beck.
Mr. Kennedy. Mr. Beck personally did I
Mr. BuRitE. Yes, sir.
Mr. Kennedy'. What did that have to do with the K. & L. distribu-
torship ?
Mr. BiTRKE. I would not now know, sir.
Mr. Kennedy. Were you not discussing here the K, & L. Distribut-
ing Co. ?
Mr. BiTRKE. Yes, sir.
The Chairman. He was trying to borroAv money on the K. & L.
Distributing Co. assets to pay off the Fruehauf loan ?
Mr. Burke. Apparently, as I
The Chairman. That is what it amounts to, is it not?
Mr. Burke. That is what it appears to be, sir.
The C^HAiRJiAN. Did Mr. Beck claim to have anv interest in that
K.&L.Co.?
Mr. Kennedy. He claims not to have.
The Chairman. He was offering to put up its assets to you for
$200,000 to pay off the Brown Equipmeiit Co. loan ?
Mr. Burke. That now appears so.
Tl-e Cii AnniAN. That is what he told you at that time ?
Mr. Burke. I thought he was an officer of the company at the time.
The Chairman. You tliought he was an officer of the K. & L. Co. ?
Mr. Burke. I thought so ; yes.
The Chairman. Did he so represent to you ?
Mr. Burke. Not in so many words.
The Chairjian. Did he represent to vou that he had an interest in
it?
Mr. Burke. He indicated to me he did ; yes, sir.
The Chairman. He indicated to you he had an interest in it?
Mr. Burke. Yes, sir.
The CHAiR]\rAN. He could not very well mortgage it, could he, if
he did not have?
Mr. Burke. No, sir.
The Chair:man. Did anybody else from the K. & L. Co. talk to you
about this loan?
Mr. Burke. No, sii-.
The Chairinian. All of your conversation in an effort to negotiate
was with Mr. Beck ?
Mr. Bi'RKE. Yes, sir : in the negotiations.
The Chairman. All ri "-lit.
IMPROPER ACTIVITIES IN TPIE LABOR FIELD 2315
Mr. Kexxet)^. My. (/liairnian, in that connection, Mrs. Beck still
had her interest in K. & L. l)isti'ibutin<!; Co.
The Chairman. His wife had an interest'^
Mr. Kennedy. He allegedly did not, but his wife had an interest.
Tlie Chairman. All rioht.
Mr. Kennedy. Mr. Burke, recapping, you made the loans to Mr.
Beck of $!>7;i,()0() with -U/o percent interest, and $40,000 at 0I/2 percent
interest. You appraised" approximately three pieces of property at
no cost and were prepared to make a loan of $-24,000 to Criterion Film
Co., is that right '(
Mr. Burke. That is right.
Mr. Kennedy. Then the $50,()(H) that you were to use to purchase
loans of the National Mortgage Co. i
Mr. Burke. That is right, sir.
Mr. Kennedy. Woukl all of these favors have been performed if
Mr. Dave Beck had not been president of the teamsters, Mr. Burke?
Mr. Burke. I believe not.
Mr. Kennedy. Thank you.
The Chairman. Are there any further questions ?
If not, thank you very mvich. You may stand aside — wait a
moment.
The Chair presents to you Avhat purports to be a photostatic copy
of something entitled, "Results of Statistical Division and Broker
Meeting with Occidental Life Insurance Co. of October 12, 1955."
Examine it and see if you can tell wliat this document is.
(i>ocument handed to witness.)
Mr. Bltrke. Mr. Chairman, I cannot identify it. I know nothing
about it.
The Chairman. Thank you very much.
All right. Is there anything further ?
Mr. Kennedy. That is all.
The Chairman. Are there any further questions ^
If not, thank you very much.
Call the next witness.
Mr. Kennedy. Mr. George Newell.
(Members present at this point: Senators McClellan, Kennedy,
Ervin, McNamara, and Curtis.)
The Chairman. You do solenmly swear that the evidence you shall
give before this Senate Select Committee shall be the truth, the whole
truth, and nothing but the truth, so help you God ?
]SIr. Newell. I do.
TESTIMONY OF GEORGE NEWELL
The Chairman. State your name, your place of residence, and your
business or occupation.
Mr. Newell. George Newell, Seattle, Wash., insurance.
The Chairman. Have you talked to members of the statf, Mr.
Newell, and know generally the line of interrogation to expect?
Mr. Newell. I have talked to thenu I am not sure wdiat I am
going to be asked about.
The Chairman. Neither am I, but they have talked to you about
the subject matter of this inquiry, have they ?
Mr. Newell. Yes, sir.
2316 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. You have elected to waive counsel, have you ?
Mr. Newell. Yes, Bir.
The Chairman. All right, Mr. Kennedy, proceed.
Mr. Kennedy, Mr. Newell, would you tell the committee a little
of your background ? You come from where, originally ?
Mr. Newell. My background ?
Mr. Kennedy. Just a little bit.
Mr. Newell. Do you mean you want me to start as a boy, Mr.
Kennedy ?
Mr. Kennedy. Just where you were born.
Mr. Newell. I was born in Seattle, 62 years ago.
Mr. Kennedy. And you have lived in Seattle ever since that time ?
Mr. Newell. I have lived in Seattle ever since.
Mr. Kennedy. Plow long have you been in the insurance business ?
Mr. Newell. Thirty-six or thirty-seven years.
Mr. Kennedy. Did you go to school in Seattle ?
Mr. Newell. Yes, sir.
Mr. Kennedy. What school did you go to ?
Mr. Newell. South Seattle School.
Mr. Kennedy. You have been doing business with the teamsters
for how long ?
Mr. Newell. Well, I guess 30 years.
Mr. Kennedy. Was the insurance company your only business?
Mr. Newell. I have a general agency business, which is really a
wholesale insurance, and also we operate as a broker for health and
welfare and some other plan for the teamsters.
Mr. Kennedy. Have you had any other business interest other than
the insurance ?
Mr. Newell. Not of any consequence. I have a farm.
Mr. Kennedy. You were not in the pinball business at all ? Were
you ever in that ?
Mr. Newell. In the pinball business ?
Mr. Kennedy. Yes.
Mr. Newell. I advanced some money to a man that was in the pin-
ball business at one time.
Mr. Kennedy. "Wlio did you advance the money to ?
Mr. Newell. A fellow named Johnson.
Mr. Kennedy. Wlien was that ?
Mr. Newp;ll. I would say maybe 15 or 20 years ago. I don't
I'emember.
Mr. Kennedy. But you never had an interest in it yourself ?
ISIr. Newell. I had a participation in the profit, but I had no owner-
ship of any kind or character.
Mr. Kennedy. What was the name of that company ?
Mr. Newell. I will be honest with you. I don't remember. If you
know, I can tell.
(At this point. Senator McClellan withdrew from the hearing
room. )
Mr. Kennedy. Is that the only time you have been in the pinball
business?
Mr. Newell. Yes.
Mr. Kennedy. What was Johnson's first name?
Mr. Newell. Charles.
Mr. Kennedy. Charles Johnson ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2317
Mr. Newell. That is right.
Mr. Kexxedy. What does he do now ?
Mr. Newell. I don't know, but I imagine he is still in the pinball
business.
Mr. Kennedy. This was back in 1945 ?
Mr. Newell. It could be back there. It is quite awhile ago.
Mr. Kennedy. Do you know the City Amusement Co. ?
Mr. Newell. That is the name of it.
Mr. Kennedy. Tliat was back in 1942 ?
Mr. Newell. Whenever the date would be.
Mr. Kennedy. When was the last time you had an interest in
that '. Do you still have an interest ?
Mr. Newell. No.
Mr. Kennedy. When did your interest end ?
Mr. Newell. Well, I would guess 6 or 8 years ago. I really don't
know. My books would show any income from it, and when it ceased.
That is when it ended.
Mr. Kennedy. Mr. Chairman, could we get Mr. Newell to identify
this^
(Document handed to witness.)
Mr. New^ell. Yes.
Mr. Kennedy. Would you identify it, please, what it is ?
]Mr. NEvrELL. Well, it is a statement of George C. Newell, made to
the bank, that he was operating as City Amusement Co., which was
not incorporated.
Mr. Kennedy. What?
Mr. Newell. That was operating the City Amusement Co., which
was not incorporated.
Mr. Kennedy. What is the date of that %
Mr. Newell. March or May 1956.
Mr. Kennedy. And is Mr. Newell's name still associated with it?
Mr. Newell. No.
Mr. Ivennedy. Is there a bank statement there also ?
Mr. Newell. There is a bank statement of December 31, 1954, Feb-
ruary 4, 1955 ; and March 24, 1955.
Mr. Kennedy. What is the company ? Wliat does it say ?
Mr. Newell. The City Amusement Co.
Mr. Kennedy. In care of anybody ?
Mr. Newell. George C. Newell, Dexter Horton Building.
Mr. Kennedy. Is that 1954?
Mr. Newell. Yes.
Mr. Kennedy. You did not have any interest in it ?
Mr. Newell. I didn't. I thought we were out of it before that
time, Mr. Kennedy, to be honest with you. It has been several
years ago. This showed, according to this
Mr. Kennedy. That is not 15 years ago. That is 2 years ago.
Mr. Newell. This, according to this, shows I got $370.02 in the
bank that I didn't know anything about.
Mr. Kennedy. Well, we helped you.
Mr. Newell. I am sure you did.
Mrs. Watt. Do you want this to be made an exhibt?
Senator Kjennedy. That will be made exhibit No. 201, for the
record.
2318 IMPROPER ACTIVITIES IN THE LABOR FIELD
(Document referred to was marked "Exhibit No. 201," for ref-
erence and will be found in the appendix on pp. 256J— 2567.)
Mr. IvENNEDY. Back in 1952 you had $1,770 that you did not know
any tiling about?
Mr. Newell. I must have known if I had that much money, Mr.
Kennedy.
Mr. Kennedy. But as I understood it, you said the last interest
you had in the pinballs
Mr. Newell. Well, it was something that I didn't take any active
part in one way or another. An auditor made the audit annually
on it, and Mr. Johnson sent me a check for my participation. But
in the last 3 or 4 years — it don't show any deposits on there.
Mr. Kennedy. No.
Mr. Newell. I received no profit or money for participation.
Mr. Ivennedy. It has $1,000 deposited in March of 1952. The
only point is that that is not 17 years ago, but that is 4 or 5 years ago,
and even 2 years ago you were getting money.
Mr. Newell. It has been so long ago that I gave no thought to
it. When you asked me if I was in any other business, I certainly
never thought of the City Amusement.
(At this point, Senator McClellan entered the hearing room.)
Mr. Kennedy. On this card, registered with the Peoples First
National Bank, Seattle, Wash., it says :
George does not want his name to be given out in connection witli tliis
company.
Mr. Newell. That is right.
Mr. Kennedy. Why was that ?
Mr. Newell. I wasn't anxious to be known as being in the pinball
business, because I advanced some money to a man in that business.
Mr. IVENNEDY. Did Mr. Brewster have any connection with that
business ?
Mr. Newell. No.
Mr. Kennedy. Absolutely none?
Mr. Newell. No.
Mr. Kennedy, Did he have any connection with Mr. Johnson ?
Mr. Newell. I don't know if he had any connection with Mr. John-
son. I know he knows Mr. Johnson.
Mr. Kennedy. Do you know whether he had any connection with
the pinball operation?
Mr. Newell. Would I know that he had ?
Mr. Kennedy. Yes.
Mr. Newell. In Mr. Johnson's busi^iess ?
Mr. Kennedy. Yes.
Mr. Newell, No.
Mr. Kennedy. Do you know that he did not?
Mr. Newell. I do not know whether he did or did not, but I have
no idea that he did.
Mr. Kennedy. You do not know that Mr. Brewster had any con-
nection with it ?
Mr. Newell. No.
Mr. Kennedy. You handled the insurance for the Western Con-
ference of Teamsters?
Mr. Newell. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2319
Mr. Kexnedy. You are tlie broker?
Mr. Newell. I am one of the brokers.
Mr. Kennedy. Have you tjot any of your figures there, or books
and records ?
Mr. Newell. No. You have more of my figures than I have.
Mr. Kennedy. Do you know what your earnings were — first, tell
me, how did you receive this account first? Was it on a bid basis?
Mr. Newell. How did I i-eceive what ?
Mr. Kennedy. The account from the teamsters.
Mr. Newell. "\Ve developed the account, Mr. Morganstern and I.
Mr. Kennedy. Excuse me ?
Mr. Newell. Mr. Morganstern and I developed the account origi-
nally.
Mr. Kennedy. How do you mean developed it?
Mr. Newell. We originated the method of group life insurance
that the teamsters use. There was nothing like it in the United States
at that time, to my knowledge.
Mr, Kennedy. What was the name of your partner ?
Mr. Neweix. Arthur Morganstern.
Mr. Kennedy. What year was this?
Mr. Newell. I would guess about 1948, but I was awful far wrong
on the City Amusement and I don't want to be pinned dowii to that
guess.
Mr. Kennedy. Was it approximately 1948?
Mr. Newell. I would tliink so.
Mr. Kennedy. And did you start to receive the insurance broker-
age fee at that time, 1948?
Mr. Newell. We started receiving it about 2 years after we devel-
oped the idea.
Mr. Kennedy. About 1950 ?
Mr. Newell. Around in there.
Mr. Kennedy. And you have received it ever since that time?
Mr. Neavell. Yes, sir.
Mr. Kennedy. Since that time, 1950 or 1951, after you started re-
ceiving some of the brokerage payments, has it been on a bid basis
to other brokers?
Mr. Np:avell. I don't think so, Mr. Kennedy. Our business is not
done that way, any more than attorneys' services are bid to other
attorneys, by a corporation.
Mr. Kennedy. You are designated?
Mr. Newell. We are designated as the broker of record for the
Western Conference of Teamsters.
^Ir. Kennedy. Who designates you?
Mr. Newell. The Western Conference of Teamsters.
Mr. Kennedy. Is there some particular individual that designates
you i
Afr. Newell. No. I think we were designated by the committee,
the policy connnittee, I believe, of the Western Conference of Team-
sters.
Ml-. Kennedy. That is Mr. Frank Brewster, the president?
Mr. Nf^WELL. I tliink he is the president, yes. I know he is tlie
])resident.
2320 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Originally, prior to that time, Mr. Dave Beck was
president ?
Mr. NE^vELL. Mr. Beck.
Mr. Kennedy. So you were first designated by Mr. Beck?
Mr. Newell. That is right.
Mr. Kennfjjy. And then by Mr. Brewster?
Mr. Newell. I think Mr. Beck signed the original letter of broker-
age, as president.
Mr. Kennedy. Have you had any business connections with Mr.
Beck?
Mr. Newell. Do I have any business connections? None.
Mr. Kennedy. Plave you had any ?
Mr. Newell, No.
Mr. Kennedy. You never had?
Mr. Newell. No.
Mr. Kesstnedy. No business connections at all ?
Mr. Newell. That is right.
Mr. Kennedy. Any financial connections with Mr. Beck?
Mr. Newell. None.
Mr. Kennedy. You never have?
Mr. New^ell. No.
Mr. Kennedy. Have you ever given him any money ?
Mr. Newell. No.
Mr. Kennedy. Have you ever given him any gift or money directly
or indirectly ?
Mr. Newell. No.
Mr. Kennedy. Have you had any business connections with Mr.
Frank Brewster?
Mr. Newell. For years.
Mr. Kennedy. In what business ?
Mr. Newell. We owned horses together.
Mr. Kennedy. Mr. Frank Brewster has testified regarding that
matter, I believe.
Mr. New^ell. I presume so.
Mr. Kennedy. Did you own the Breel Stables together?
Mr. Newell. We owned the Breel, Inc., and operated as Breel
Stable.
(At this point. Senator Ervin withdrew from the hearing room.)
Mr. Kennedy. As I understand, you went in as a partnership in
the Breel Stables and the Breel Stables were sold out. According to
Mr. Brewster's testimony, and the testimony before this committee,
you received a loss of $40,712.75, and Mr. Brewster received a gain of
$44,366.0-3.
Mr. Newell. Well, I don't remember the testimony of the commit-
tee on it, but whatever my books showed that we lost
Mr. Kennedy. That was taken from your books.
Mr. Newell. All right. I will accept it.
The Chairman. How did that happen, that you lost and he gained,
if you were equal partners?
Mr. Newell. Well, the Breel, Inc., Mr. Chairman, was a corpora-
tion between Mr. Ik-ewster and I. We originally incorporated to buy
a piece of land adjoining the training track at Santa Anita. We felt
that we were both married and that it was — and I felt it was better
to put it in an incorporation, when, under the laws of our State, there
IMPROPER ACTIVITIES IN THE LABOR FIELD 2321
are community-property laws, and selling the property would take
four signatures, but under an incorporation we could do it whenever
we desired.
Mr. Brewster, incidentally, owned horses individually at this time
and I owned horses. We both owned horses for 20 years. So we were
both using the same trainer.
Mr. Brewster suggested one day that he would put one of his horses,
I forget, I think the horse's name was Tops Boy, and I had a horse
named Turn 'er on, and the same trainer was training both horses,
and we decided to put the two horses in a stable.
The Tops Boy claimed for $10,000 and I claimed Turn 'er on for
$7,500. I felt I should put some additional money in, but he felt it
would be an even enough break, so that is how the Breel Stable
operation started.
Later we had to advance money.
The Chairman. How long is it going to take to get this horse tale
through here ?
I just asked how^ you should lose $40,000 and he should make
$40,000.
Mr. Newell. I haven't lost it yet. ]\Ir. Brew^ster will eventually
pay it.
The Chairman. You have not lost it?
Mr. Ne^vell. Eventually I hope to get it. The money was loaned
by myself to Breel, Inc., and Breel, Inc., Mr. Brewster and I, both
owned stock in it. That was the reason I was explaining it, to give
the background of it.
The Chairman. Go ahead.
Mr. Newell. I loaned the money to Breel, Inc., a corporation
owned by Brewster and I, and we as the Breel Stable used the money
to buy horses with. I was the one that wanted to buy more horses,
because part of the horses were knocked out, and we needed more
horses running in order to win some purses to pay the expenses.
The Chairman. I do not have much of an answer yet.
Go ahead. Counsel.
Mr. Kennedy. Do you have a note from Mr. Brewster ?
Mr. Newell. No.
Mr. Kennedy. He just owes you $40,000 ?
Mr. Newell. "VVliatever the amount of money it is.
The Chairman. What became of Whiz Bang? Wliang Bang?
Mr. Newell. She is on my farm.
The Chairman. Let me ask you, have you ever been able to esti-
mate her value yet ?
Mr. Newell. No. We have not agreed on the value, but we are
not far off.
The Chairman. What is the difference between you? I am a
little curious. How much does he think it is worth and how much
do you think it is worth ?
Mr. Newell. I would be willing to agree at the pric^ that Brewster
agrees on. I think tliat would be fair about it.
The Chairman. Well, go ahead.
Mr. Kennedy. You do not have any note ?
Mr. Newell. No, I have no note.
Mr. Kennedy. He just owes you about $40,000 ?
2322 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Newell. I have Mr. Brewster's word that eventually v. hen he
gets the money lie will pay it.
Mr. Kennedv. WJien was this sold, the Breel, approximately?
Mr. Newell. 1 would think maybe 3 years ago.
Mr. Kennedy. And nothing has been done about it yet ?
Mv. Newell, Nothing has-been done about it, no, except. that the
assets have been distributed, ^h: Brewster took part of the hoi-ses.
Mr. Kennkj.v. Does it appear tliat Mr. Brewster is going to be
able to have the money to pay you l^ack ?
Mr. Newell. I have no idea, Mr. Kennedy.
Mr. Ivennedy. He testitied before the committee that he was sell-
ing his house, possibly, to the union so that he could pay tlie union
back what he owed them. So he is going to have a little difficulty
paying you, is he not i
Mr. Newell, I imagine he will be working in the meantime,
Mr. Kennedy. Did you also pay him some money in addition to
that, during this period of time, or starting in 1950 f
Mr. Newell. No ; I have never paid him any money.
Mr. Kennedy. There was some testimony before the committee that
you paid him $5,000 for walking his horses or walking your hoi-ses,
getting up early and walking the horses.
Mr. Newell. No, but Breel paid him money for training fees.
Mr. Kennedy. You did not pay him any money i
Mr. Newell, No. The Breel Stable paid him money for ti'aining.
Breel, Inc., paid him money for tlie training.
Mr. Kennedy. Who had the stock in Breel, Inc. {
Mr. Newell. Mr. Brewster and I.
Mr, Kennedy. Wliat were they paying him for? Wliat was he
doing ?
Mr. Newell, Training horses,
Mr. Kennedy. Was that in connection with walking the horses in
the morning ^
Mr. Newell. Well, the walking the horses in the morning, Mr.
Kennedy ; every horse walks every morning.
Mr. Kennedy. I understood from the testimony that he gave that
he used to get up at 4 : 30 in the morning and take the hoi-ses out for
a walk.
Mr. Newell. You misunderstood it, Mr. Kennedy. All trainers
have to exercise horses every day, all race horses.
The Chairman. Mr, Brewster testified, as I recall, tliat you paid
him some $5,000 or he got that much out of the stables that you did
not get out of the enterprise, for walking horses early in the morning,
getting up about 4: 30 and going out and taking the horses for a walk.
Mr, Newell. No. The trainer himself doesn't walk.
The Chairman. What was he, the trainer, the owner, the jockev, or
what?
Mr. Newell. He was a trainer and pai't-owner.
The Chair:man. All right.
JNIr. Kennedy. For how many years was he given the $5,()00 to train
tlie liorses?
Mr. Newell. Mr. Kennedy, I didn't give him any money. I gave
liim a thousand shares of stock. Affiliated Fund stock, twice. Appar-
entlv tliat is what vou liave reference to.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2323
Mr. Kennedy. Yes. You <>-ave liiiii stock, which was worth sq)-
proximately $5,000 ?
Mr. New'ell. ]Maybe five or fifty-live hundred. I don't remember.
Mr. Kennedy. For liow many years did you give that ^
Mr. Ne'\\t:el. Twice, if I remember correctly.
Mr. Kennedy. For the first year, that was written on your income
tax as a commission 'i
Mr. Neavell. It was not written on my income tax as a commission.
Mr. Kennedy, How was it written 'i
Mr. Newell. My accountant told me about it. There is a form on
the back of an income tax that calls for commissions and 2 or 3 other
things, and he ])ut it in that section. After it was sent in, he told me
about it and T told him he was wrong, l^ecause in our business we
couldn't pay a connnission to anybody, because that is rebating, and
any insurance man, the most stupid insurance man in America, knows
that if he rebates, he is out of business, and I am not quite that stupid.
The Chairman. You are still in business ?
Mr. Newell. Yes. And I h.ave never rebated.
Mr. Kennedy. So the stock was given to him?
INIr. Newell. It w_as given to him for the work that he did that
I didn't do. Jn other words, he did get up every morning at 4: 30
and go out and train those horses.
He also spent any number of hours with the horses. I didn't go
out at all, but maybe on weekends to Avatch the racing, but I spent no
time with those horses.
]Mr. Brewster is a man that when I wanted to pay him extra for it,
he wouldn't take it, and also Mr. Brewster had made several business
deals that were profitable. He claimed 1 horse for us for $5,000 and
we earned $34,000 1 year with him. He wouldn't take any money extra
for m.aking that deal. Also, he was entitled to a po. rentage on the
purses of those horses, but he would never take it. So i felt obligated
to Mr. Brewster for the extra work he is doing and I was receiving
50 percent of the income, when we were in black ink, and there were
years that Vv^e were in black ink, and not doing anywhere near 50 per-
cent of the work.
So I felt the only way I could show that I was obligated was to pay
him something extra for the work he did, and that I did. I knew if
I gave him money he would spend it. I felt that if he got stock he
would keep it and maybe have the incQme.
Mr. Kennedy. During this period of time you were receiving
brokerage commissions from the teamsters; is that right?
Mr. Newell. I received broker's commissions from the teamsters
ever since 1048 or 1949, Mr. Kennedy.
Mr. Kennedy. Do you have any breakdown on the brokerage com-
missions that your company has received from the teamstei'S for the
last 3 or 4 years ? Do you have that breakdown with you ?
Mr. Newell. No.
Mr. Kennedy. ^Ir. Chairman, Mr. Bellino could testify to that
from an examination of ]Mr. Newell's books. Can we do that?
The Chairman. All right, Mr. Bellino, come forward.
Mr. Newell, you listen to his testimony and see if you can confirm it
as being accurate, or the figures he gives being approximately ac-
curate, from your recollection.
Mr. Bellino, have you examined the books of Mr. Newell?
2324 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF CAEMINE BELLINO— Resumed
Mr. Belling. Yes, sir.
The Chairman. Have you made a compilation from those books
re<rardiii(>: the amount of commissions or brokerage fees he received for
the handling of the teamsters account?
Mr. Belling. Yes, sir.
The Chairman. All right. You may give us those figures.
Mr. Belling. These are -the figures from the Union Group Insur-
ance Co., which is Mr. Newell's Company. The total gross commis-
sions for the fiscal years of 1954, 1955, 1956, and 1957, ending February
28 of each year, the gross commissions amounted to $2,109,oH8.4o.
The Chairman. How much?
Mr. Belling. $2,109,338.43.
The Chairman. That is commission?
Mr. Belling. Four years, yes, sir.
The net. profit for those 4 years is $1,397,679.24.
The Chairman. How do you arrive at those figures ?
Mr. Belling. That is after expenses, the net distributable sfiare to
the partners, from which the Newells, George Newell and his wife, re-
ceived a total of $1,007,132.17.
The Chairman. $1,007,132.17?
Mr. Belling. Yes.
Mr. Kennedy. Have you got a breakdown for the last year of the
profits after expenses that went to Mr. George Newell and his wife for
the year ending February 28, 1957?
Mr. Belling. Yes, sir.
Mr. Kennedy. The profits from the teamsters.
Mr. Belling. George Newell, $154,421.21, and his wife an equal
amount, $154,421.21.
Mr. Kennedy. That is a total of $308,842.42?
Mr. Belling. Yes, sir.
Mr. Kennedy. And the year prior to that it was $239,658.84?
Mr. Belling. Yes, sir.
Mr. Kennedy. And the year ending February 28, 1955, $249,276.13?
Mr. Belling. Yes, sir.
Mr. Kennedy. And the year ending February 28, 1954, $209,354.78 ?
Mr. Belling. Yes, sir.
The Chairman. Those make the total of $1,007,000 in the 4 years?
Mr. Belling. Yes, sir.
TESTIMONY OF GEOEGE NEWELL— Resumed
Senator Ivennedy. Mr. Newell, what was the commission during
that period that you received ?
Mr. Newell. Mr. Bellino just testified
Senator Kennedy. No ; the percentage.
Mr. Newell. Our commissions run from one-tenth of 1 percent
to 2 percent.
Senator Kennedy. What was it when these accounts were originally
written ?
Mr. Newell. Wlien Mr. Monganstern and I handled it the first year
commission was 4 percent and renewal 3, and we arbitrarily cut them
to 2, because the volume of business got so large.
IMPROPER ACTIVITIES IX THE LABOR FIELD 2325
Senator Kennedy. How much was the total amount of money in-
volve? What was the total amount of the money that the team
sters were investing?
Mr. Newell. Do you mean the premiums or the commissions?
Senator Kennedy. First I want to get the total amount of money
that the teamsters had involved in this program, the premium.
Mr. Newell. We don't handle the premiums in our office. We
don't have them.
Senator Kennedy. "What was the amount? Do you know what the
amount was?
Mr. Newell. No.
Senator Kennedy. Was it $2 million or over?
Mr. Newell. Somebody from Occidental just testified that they did
$20 million.
Senator Kennedy. And you were charging 2 percent on that ?
Mr. Newell. No; we weren't charging 2 percent on it. We were
charging 2 percent on all cases, Senator Kennedy, that were small
enough.
Senator Kennedy. What?
Mr. Newell. It was based on the size.
vSenator Kennedy. What were you charging the teamsters?
Mr. Newell. Some of the teamsters are 1 percent. You see, you
have health and welfare, pension, and group life insurance all grouped
in those figures.
Senator Kennedy. You made a profit of $1,007,000 or $300,000 in
1 year. What were the commissions that year on those funds ? Two
percent ? Was that the average ?
Mr. Newell. No ; I don't think the average was 2 percent. I would
say it would run from 1 to 2 percent.
Senator Kennedy. You do not know what the average was ?
Mr. Newell. No, we have never taken an average.
Senator Kennedy. We have here some charts on employee health
and welfare plans, which would indicate tliat when the amount of the
premium was from $5,000 to $10,000, the renewal year commissions
were 1.5 percent. When it went from $350,000 to $2 million it was
0.25 percent. This is the average, what they consider it should be.
And when it was $2 million and over it Avas 0.1 percent. So it seems to
me that you were getting mucli more than what should be the average.
Mr. Newell. You heard the gentleman from the Occidental Life
testify that there was 250 or 237 policies in existence. You are talking
about 1 policy, Senator Kennedy.
Senator Kennedy. No. We are talking about combination policies.
I want to get from you this information. I^et us go to the l>eginning.
"Wliat are these plans of the teamsters that are involved that you make
the profits out of?
]Mr. Newell. The health and welfare plans.
Senator Kennedy. How many different groups do they come from?
Mr. Newell. Apparently they come from over 200 groups, from the
testimony I heard today, I don't know how many plans there are or
how many policies are in effect, but we cover tlie 11 Western States,
Alaska, and the Hawaiian Islands.
Senator Kennedy. And you received this money, over $1 million
profit over a 4-year period, on handling the different programs?
Mr. N EWELL. I think that is correct.
2326 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Kennedy. Is it put out to bid ; do you know ?
Mr. Newell. Many of them are put out to bid.
Senator Kennedy. Do you bid for tliem ?
Mr. New^ell. No ; tbe insurance companies bid for them.
Senator Kennedy. For the commissions, there was no bid ?
Mr. Newell. No; there is no bid.
Senator Kennedy. You cannot tell me what the average commission
was on all these j^rograms that you made this money out of?
Mr. Newt:ll. No ; I can't. But maybe Mr. Bellino can.
Senator Kennedy. Can you tell me wliat the lowest figm-e was?
Mr. Neweix. One percent.
Senator Kennedy. That was the lowest?
Mr. Ne\vell. That is right.
Senator Kennedy. What was the highest?
Mr. Ne^vell. Two.
Senator Kennedy. Two percent?
Mr. Newell. Yes.
Senator Kennedy. Can yovi tell me why it is that you go from 1 to 2
percent, involving large sums of money, when this chart on what a
payment should be
Mr. New^ell. Pardon me. May I ask you a question? Wliat
chart? There is a basis on a chart? In our State we have no law
saying what the payments should be, but in New York State they
have. Is that what you are quoting, New York ?
Senator Kennedy. No; I am looking at a survey, foundation on
employee health, medical care, and welfare, prepared with the assist-
ance of the staff.
]Mr. Newell. Well, the staff figures wliat they think it should be, is
that correct ?
Senator Kennedy. No. It is done with the assistance of the staff.
Mr. Kennedy. It is by experts and was furnished to us on a con-
fidential basis. Senator.
Senator Kennedy. I see the names here, and they are all people that
are well known in business.
Mr, Newell. I am not disputing the figures.
Senator Kennedy. In this statement, it says the commission is
not a gift from the insurance company. Eather, they come out of
the premiums paid hy welfare funds to insurance companies, and in
essence the welfare funds pay the commissions.
What I am trying to get at is that it looks to me like your rates
were excessive and that they come out of the welfare funds of the
teamsters. Tliese profits are tremendous from this one account.
Mr. Newell. They are. It is a large account, just the same as
United States Steel and General Motors are large accounts.
Senator Kennedy. "Wliat percentage of your income for these 4
years came from this 1 accomit ?
Mr. Nev\'ell. I would say about 90 percent.
Senator Kennedy. That came from this one account ?
Mr. Ne\vell. Yes. Maybe greater than 90, I don't know.
Senator Kennedy. Is that strange, this concentration on you ?
Mr. Ne\vell. No, I don't think so.
Senator Kennedy. What is the case that you are such a large dealer
when 90 percent of your business comes from 1 account, Avhen you
IMPROPER ACTIVITIES IN THE LABOR FIELD 2327
make enormous profits, you use the word tremendous, and where your
renewal year commission seems to be out of line with what should be
the avei'age for the industiy ?
Mr. Newell. Well, I misunderstood your question. You said it
was centered on me, if it wasn't centred on me and what was the rea-
son. If it wasn't centered on me, it would be centered on some other
broker, and I presume the other broker would have to "jive service and
take care of the account. We cover 100,000 square miles of territory.
Senator Kennedy. The question is whether they could have gotten
it at a lower rate f roui somebody else.
Mr. Newell. I think undoubtedly somebody else would take it foi-
less nmney. I coidd name 50 that would take it for less money.
I would take General Motors at a lower profit, too.
Senator Kennedy. Do they not do it on a bid V)asis ?
">Ir. Newell. No.
Senator Kennedy. If this comes out of the welfare funds and
amounts to over a million dollars net profit, and that comes out of
the welfare fund, why should they not give it to somebody who
would give it to them at a lower cost '?
Mr. Newell. All commissions come out of premiums. This is no
different.
Senator Kennedy. And the premiums come out of the welfare
fund. Why should they not give it to someone who would do it
for a lower cost ?
Mr. Newell. The premiums in this case are paid by the employ-
ers.
Senator Kennedy. It still comes out of the welfare fund.
Mr. Newell. It is the cost to the employer for health and welfare
for their people.
Senator Kennedy. The employer gives that in lieu of giving a
wage increase.
Mr. Newell. That is correct.
Senator Kennedy. So, therefore, the employees have the major in-
terest.
Mr. Newell. Definitely.
Senator Kennedy. Tlierefore, when you get $1,007,000 profit, and
this represents 90 percent of your business, and you get a commission
out of line with what com]:>arable i:)lans should be, it seems to me
that it is charging the employees and .taking it out of their potential
available funds, and it seems to me it is an obligation <m the team-
sters and the insurance companies to pay the loMest possible commis-
sions. You said you could name 50 people who would take it for
less commissions.
Mr. Newell. Certainly.
Senator Kennedy. Do you not think they ought to get it ?
Mr. Newell. Maybe the 50 people would not be able to give tlie
same service we have given over a period of year's, Mr. Kennedy.
Senator Kennedy. I would like to put into the record this report
that I am quoting from, that it was done under tlie direction of A. J.
Hayes, cochairman. board of directoi's, ]:)resident of the International
Association of Machinists, head of the ethical practices committee
of the AFL-CIO, and tlie cosigner is John I. Syner, Jr., cochair-
man, board of directors, and president of the ITnited States Indus-
2328 IMPROPER ACTIVITIES IX THE LABOR FIELD
tries, Inc., and also Walter F. Wilmis, executive president. United
States Industries ; and Elmer E. Walker, vice president. International
Association of Machinists.
The amount of annual premiums amounted to what in this pay-
ment ?
Mr. Newell. The amount of annual premium ?
Senator Kexnedy. Yes.
Mr. Newell. We don't keep the annual premium.
Senator Kennedy. Do you not know what the amount was '(
Mr. Newell. No.
Senator Kennedy. You say it was around $20 million ?
Mr. Neavell. I just heard the oentleman from the Occidental testify
to that.
Senator Kennedy. It was $25 million last year.
The Chairman. The testimony shows $-2.5,912,678 for lOof). I as-
.sume that period ended in February of 1957,
Senator Kennedy. This chart, this table, shows that when the
amount of the annual premium is over $2 million, in other words one-
tenth of what we are talking about, or less than that, the renewal year
commissions should be one-tenth of 1 percent, and you are charging
between 1 and 2 percent. You uuist have given exceptional services
to warrant a fee potentially 20 times as much as what Mr. Hayes and
his group say that it should be.
Mr. Newell. Mr. Senator, I am not going to deny that we gave
exceptional services.
Senator Kennedy. Did you give 20 times what other companies
potentially might have given ^
Mr. Newell. Well, I can give you an example.
Senator Kennedy. All right.
Mr. Newell. Originallj^, when we wrote the first health and ^\'e\-
f are policy for the teamsters in the western conference, it was for the
brewery workers in the Northwest. So we worked out the plan, and
the cost w^as $8.65 a month for the employer per man ; 6 or 8 months
later, the brewers in California negotiated a health and welfare plan.
Senator Kennedy. You are not stating that you formed a concept
in 1948 of these health and welfare plans, are you ?
Mr. Newell. No; I think the first was written in 1951.
Senator Kennedy. They go way back to 1930.
Mr. Newell. Originally my statement was that we originated, not
health and welfare, but it was a group life policy. I am talking now,
though, about health and welfare. After we wrote it, they wrote in
California at the same rate, and when they compared they found that
the employees had 25 to 30 percent more benefit under the plan written
in the Northwest than they had in California at the same cost to the
employers. That is when we were designated as brokers of record.
Senator Kennedy. In 1957, your expenses, when you made the
$554,171.70, your expenses were only $110,000, so your profit was
$441,203.45. That is your distributable partnership income. It can-
not seem to me that you gave very extraordinary services. Your
expenses were very low. I think they were excessive. I do not think
there is any other word for it. It is 20 times what Mr. Hayes' group
says it should be when the premiums are only one-tenth as much as
thev were in your case.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2329
I think it is all out of line, and I think it came ri<>ht ont of the
money ont of the members of tlie teamsters fnnds, these extraordinary
profits that you made, 90 percent of your total income, this one ac-
coimt. At the same time you were in a partnership in a stable with
]\rr. Brewster, and you ended u]) with a loss of $40,000 and he made
a profit of $40,000. '
Mr. Newell. We were in a partner
Senator Kennedy. Mr. Brewster was responsible for you receiv-
ing this account. That is hio-hly improper.
Mr. Newell. Mr. Beck was oriifinally responsible.
Senator Kennedy. iVnd then Mr. Brewster.
Mr. Newell. Afterward ; yes, sir.
Senator Kennedy. It is highly improper. If you were receiving
what everyone else was receiving, you would not lay yourself open
to this criticism. But when you are getting these gigantic profits,
for what seems to me to be very little effort, once the account is
established, it is very much out of line.
Mr. Kennedy. Have you lowered the brokerage percentage at all
in the last few weeks?
Mr. Newell. No; not in tlie last few weeks. I think in February
or March it was lowered to 1 percent.
Mr. Kennedy. It was 2 percent before then ?
Mr. Newell. Yes, sir.
Mr. Kennedy. Is that since our visit to Seattle!'
Mr. Newell. No. It is on the Pacific coast and in the 11 Western
States.
Mr. Kennedy. Has that been since we talked to you in Seattle?
Mr. Newell. When were you in Seattle?
Mr. Kennedy. When I was there, it was 2 percent. Now it is
1 percent? Did you lower it then? That is what I v. as wondering,
when you were answering the question that it had been lowered from
2 percent to 1 percent.
Mr. Newell. I don't remember that we discussed commissions when
you were in Seattle.
Mr. Kennedy. It was 2 percent at that time. Anyway, it was
lowered before this investigation was started?
Mr. Newell. It was lowered from 3 to 2 before there ever was
an investigation started and it was lowered this year from 2 to 1.
Mr. Kennedy. Was it lowered from 4 to 2 during another congres-
sional investigation?
Mr. Newell. Not to my knowledge.
Mr. Kennedy. Did not another congressional commitee look into
this 3 years ago and was it not lowered from 4 pei'cent to 2 percent?
Mr. Newell. It was never 4, to my knowledge, except on new busi-
ness. It was 3 to 2.
Mr. Kennedy. Was that not after a congressional committee started
looking into this matter ?
Mr. Newell. It could have been. I don't remember the dates, Mr.
Kennedy, but the records will show it.
Mr. Kennedy. Now it has been lowered to 1 percent?
Mr. Newell. That is right.
Mr. Kennedy. And it was 2 percent a month or so ago ?
Mr. Neweijl. No ; I don't think it was 2 percent a month or so ago.
In February it was lowered, to be honest with you.
2330 IMPROPER ACTIVITIES IX THE LABOR FIELD
Senator Kennedy. That was after tlie-
Mr. Newell. No; I think it was before.
Mr. Kennedy. When we were out there, you said it was 2. But,
anyway, it is after this investigation started, is that right?
Mr. Newell. I presume so.
Senator Kennedy. Will that cut your profits in half?
Mr. Newell. No, it won't cut my profits in half, because some of
this is not health and welfare business. Some of it is 1 percent already.
Senator Kennedy. It would cut your profits on the health and wel-
fare business in half ?
Mr. Newell. It will cut my profits on the health and welfare busi-
ness.
Senator Kennedy. How much would that be?
Mr. Newell. Fifty percent.
Senator Kennedy. So it will cut your profits 25 percent ?
Mr. Newell. It will not have anything to do with the pension,
Senator, and it won't have anything to do VN-ith the group life.
Senator Kennedy. It still looks to me like it is out of line with wliat
it should be. It should be one-tentli of 1 percent, but you are approach-
ing i<^- . ....
Mr. Newell. That is one committee s opinion.
Senator Kennedy. It is tlie committee of Mr. Hayes, who is head
of the ethical practices of the AFL-CIO. As a result of a study of
the whole field, he is giving what the average sliould be, based on
experience.
Mr. Newell. It is possible that our district will find out that our
men have the same coverage or better, and it may be less cost than
Mr. Hayes has now. I am not sure, but we are woi-king on compara-
tive plans for the whole territory.
The Chairman. Is Mr. Brewster, as president of the western con-
ference, the man who negotiates these tei-ms with you?
IMr. Newell. No, sir.
The Chair]Vj.an. Who?
Mr. Newell. They Averc not negotiated with me originally, Mr.
Chairman.
The Chairman. I am talking about who fixes the price.
Mr. Newell. The insurance company fixes the price.
The Chairman. I am talking about fixing this broker's tee with
you.
Mr. Newell. It has never been discussed, "Sir. Chairman, the broker-
age fee with Mr. Brewster or with Mr. Becjc. The brokerage fee was
originally set with my partner, Mr. Morganstern, lie and the insurance
company.
The CiLMRMAN. Somebody has to agree to it. Who agrees to it
with you?
Mr. Neavell. There has never l)een any disagreement.
The Chairman. There has been no disagreement. There was an
agreement. ^Vho agreed to it ? AVho agrees to it on the part of the
teamsters?
Mr. Neavell. The trustees of the health and AA-elfare ])ians.
The Chairman. Who agrees to it on the part of the teamsters union ?
Mr. BreAvster as trustee of that fund, is that it ?
Mr. Neavell. No. ]Mr. Brewster is not trustee of the funds, Mr.
Chairman.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2331
The (■hair:\[AX. Who lias it i
Mr. Xkavi LL. Tliese funds aiv hniulletl by a coinmittee of employers
a 11(1
The Chairman. Is he a meiiilier of the coinniittee?
Ml'. ^EWKLL. No.
The Chair:man. Who is?
.Mr. Xew]:ll. Individual busiiiessnien in various cities on the west
coast, as well as members of the union. 1 don't mean to say that Mr.
Brewster is not one of these trustees, but of the "JOO plans in etfect
The Chairman, lie appoints the tiaistees : does he not 'i
Afr. Xewij.l. Xo.
The Chairman. Who appoints them, re])resenting the union ?
.Mr. X'^Ewr.LL. I imai>ine the local unions.
The Chair]max. Maybe it is more complicated than 1 think it is. I
am still of the opinion that Mr. Brewster has a j^reat deal to do with
it. Yon say he has nothino; to do with it?
?Nfr. X^EWELL. 1 didn't say that.
The Chairman. What does he have to do with it?
.Ml-. Xewell. I said Mr. Brewster didn't serve on any of these com-
mittees with j)r()bably the exception of 1 or 2 of them, of the 200 that
we are doino; business with.
Mr. Kennedy. Is it not true that these insurance policies are nego-
tiated by the Western Conference of Teamsters rather than by the
individual unions^
Mr. Xewell. X"o. The insurance policy is neg-otiated by the broker.
Mr. Kenneda\ The welfare policy is negotiated by the broker for
the Western Conference of Teamsters ?
Mr. X^EWELL. X^o; not for the western conference. The western
conference has nothing to do with it. They are negotiated by the
broker for these individual unions represented.
(At this point, Senators Kennedy and Curtis withdrew from the
hearing room.)
Mr. Kennedy. What is Mr. Brewster, then?
Mr. Xewell. Mr. Brewster is pi-esident of the Western Conference
of Teamsters.
Mr. Kennedy. He designates the broker.
Mr. Xewell. The Western Conference of Teamsters designate a
broker.
Mr. Kenneda'. He designates the person, does lie?
Mr. Xewell. He never designated me originally
Mr. Kenneda'. Each year it has been designated?
.Mr. Xew^ell. Xo. A letter of designation is on record and it stays
in etfect until canceled.
Mr. Ke.xn?:dy. And Mr. r>iewster has the right to cancel ?
.Mr. Xewell. Yes, sir.
The (^FiAiR3r.\N. In other words, to get it straight, you are continu-
ing as the designated broker at his j^leasure?
Mr. Xf:w^ELL. At his what?
The Chairman. At his pleasure, Mr. ]>rewster's pleasure.
Mr. Xewell. Yes: they could fire me tomorrow.
The Chair.aian. That is right. For that reason, you have not
pressed the collection of your $4<).(K)0?
Mr. Xewell. That has no bearina- on it.
2332 lAIPROPEK ACTIVITIES IN THE LABOR FIELD
The Chairman. You would not think so?
Mr. Newell. No.
The Chairman. You have $40,000 that you let drnt uroiuid like
that?
Maybe so, with these profits.
Mr. Newell. I have some stock with the Suez Canal that doii't look
any better.
The Chalrman. All right.
Mr. Kennel.!-. Mr. Newell, when did the lowering from tiie '2 per-
cent to the 1 percent go into effect ?
Mr. Newell. Sometime the first part of the year, Mr. Kennedy,
February or March.
Mr. Kennedy. It went into effect?
Mr. Newell. Yes.
Mr. Kennedy. Will your records show that?
Mr. Newell. Yes; the records of all these trustees will show it.
Mr. I\JENNEDY. Will you send us a notation or a notice ?
Mr. Newell. We will send you a copy of the letter that we sent
our men to notify the people at the meetings. The reason I say Feb-
ruary or March is we notified our men but some of these meetings
weren't held in March, they had already held their February meeting,
and they couldn't notify their trustees and they had to notify the
insurance company because it changes the retention of the individual
accounts.
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. Is there anything further ?
Senator McNamara ?
Senator McNamara. You seem to be quite positive that Mr. Brew-
ster has the authority to continue to do business with you. How
does he get this authority ?
Mr. Newell. I imagine he gets it from the committee, the policy
committee, of the Western Conference of Teamsters.
Senator McNamara. I suppose you mean the executi^■e conmiittee
when you say policy committee ?
Mr. Newell. Yes. They call it the policy committee, I believe.
Senator McNamara. You don't know that it is spelled out that he
personally is so designated?
Mr. Newell. No, Senator ; I don't know.
Senator McNamara. You seemed quite positive in your reply that
he had the power.
Mr. Newell. He is the head of the Western Conference of Team-
sters; yes.
Senator McNamara. You are less positive now than you were when
you made the statement ; is that right ?
Mr. Newell. I am positive that he is the head of the Western Con-
ference, and they can stop doing business with me overnight ; yes.
Se.iaior ?«IcNamara. He could do it personally or would he have to
get approval?
]Mr. Newell. I imagine he would have to get the approval. But
that wouldn't mean that we would have to stop doing business with the
teamsters.
Senator McNamara. Are not the employee and the employer repre-
sented on this committee?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2333
]Mr. Nkwell. Yes ; under Taft-Hartley.
Senator McNamaha. Then Mr. Brewstei- did not have the authority
that you said he had.
Mr. Newell. You misunderstood me.
Senator McNamara. No; I did not misunderstand you. You were
positive.
]Mr. Newell. I am positive that he can stop me from being broker
for the Western Conference of Teamsters; yes.
Senator McNa^siaka. He, personally ?
Mr. Newell. He and his committee.
Senator McNamara. Now you have the committee, "^^^lo is the
comptroller ^
Mr. Newell. May I explain sometliing. That wouldn't necessarily
mean that the fact we are broker for local 217 they would stop using
us.
Senator jMcNamara. That is another committee ?
Mr. Newell. No. That is a local union that has a policy with us.
Senator McNamara. Thej^ have a separate policy ?
Mr. Newell. That is handled bv the employee and the employer,
under Taft-Hartley.
Senator McNaivcaka. And they control the brokers?
Mr. Newell. They control their individual policies.
Senator McNamara. And they control also tlie brokers ?
Mr. Newell. Yes. Yes, they do.
Senator McNamara. I'ou assume that they have delegated to Mr.
Brewster
Mr. Newell. No.
Senator McNamara. Then they still have this right and nobody,
has been delegated that business.' Is this in the 10 percent of your
business that you say is not done through the western conference?
Mr. Newell. No. This is part of the 90 percent that is done through
the western conference.
Senator McNamara. But now your answer to my question is indica-
tion that Mr. Brewster does not have such positive control over it.
Mr. Newell. I am sorry because I gave that impression. The im-
pression that I wanted to give was that Mr. Brewster and the western
conference could stop me from being broker tomorrow. But that
wouldn't necessarily mean that we wouldn't continue to go on doing
business with so!ne of these various local unions and under our present
policies.
Senator McNamara. Does the Western Conference of Teamsters, as
such, have a health and welfare plan ?
Mr. Newell. Yes, sir.
Senator McNamara. And do you handle that one ?
Mr. Newell. Yes, for their own employees.
Senator McNamara. How much of your business? How much
of this 90 percent of tlie business is that directly ?
Mr. Newell. A very small amount. If it is 1 or 2 percent, I would
be amazed.
Senator McNamara. This they have direct control over, but the
other is through the committees 'of local unions in cooperation with
their employers; it is a joint affair?
Mr. Newell. That is right.
2334 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator McNamara. With employee representatives and manage-
ment representatives of the various local union plans ?
Mr. Newell. Yes, sir.
Senator McNamara. I think the record looks a lot different after
you explain it in this manner.
Mr. Newell. Thanks for the explanation. I can use all the help
I can get. .
Senator McNamara. I do not want to nidicate that I am particularly
on your side. I am not, really.
Mr. Newell. I am sure you are not.
Mr. Kennedy. Mr. Newell, does Mr. Beck have any personal insur-
ance, any personal insurance handled through your company ?
Mr. Newell. Not to my knowledge. At one time he did, years ago,
but not since he got into the insurance business himself.
Mr. Kennedy. That is the insurance company that we talked
about?
Mr. Newell. That was a local agency you talked to Mr. Hedlund
about the other day, 1 assume.
Mr. Kennedy. He has another insurance company ?
Mr. Newell. Not that I know of.
Mr. Kennedy. You said that Mr. Beck is in the insurance business
himself?
]Mr. Newell. Well, apparently from Avlnit ^h: Hedlund says he
is interested in a local agency.
Mr. Kennedy. Did you handle his insurance back in 1953 i
Mr. Newell. I don't know.
Mr. Kennedy. You don't remember that ?
Mr. Newell. No.
Mr. Kennedy. What about Frank Brewster ?
Mr. Newell. We still liandle Frank Brewster's. I have handled
his for 20 or 25 years.
Mr. Kennedy. Do Dave Beck and Frank Brewster pay for their
insurance with you out of their own personal funds or out of union
funds?
Mr. Neweix. I assume they pay it out of their personal funds.
Mr. Kennedy. You never checked that at all ?
Mr. Newell. No, I never did.
Mr. Kennedy. You never examined it ?
Mr. Newell. No. I don't handle the money, Mr. Kennedy. It goes
into the office and the bookkeeper handles it.
Mr. Kennedy. Would you be surprised to find that the Western Con-
ference of Teamsters is paying for it ?
Mr. Newell. Some of the things are owned by the Western Con-
ference of Teamsters, some cars are owned by individual unions, and
I think the unions in the Western Conference pays for them.
Mr. Kennedy. What about their dwelling, back in 1953 ?
^Ir. Newell. I wouldn't know anything about it. I would be sur-
prised if the Western Conference is paying for it ; yes.
Mr. Kennedy. This is dated August 23', 1953, Dave Beck and Doc-
tor (irrinstein, building and equipment, their apartment house and
a dwelli)\g. The i)remium is $123.28, paid for by tlie Western Confer-
ence of Teamsters. You were paid by tlie Western Conference.
Mr. Newell. I wouldn't know tliat. Tliat was ordered by Doctor
Grinstein. I wouldn't know who paid for it. Mr. Keimedy.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2335
Mr. Kknxkdy. It is a Western Conference of Teamsters check, No.
8526, the Western Conference of Teamsters paying for Doctor Grin-
stein's and Dave Beck's insnrance on the building and their apart-
ment. Have you any comments to make on that ?
Mr. Newell. No. I have no knowledge of it.
]Vfr. Kennedy. And Dave and Dorothy Beck and Frank Brewster,
the building across the street from the Teamsters Building, dated
July 14, 1953, insured for $12,000, and a Western Conference of Team-
sters check totaling $182.80 was used to pay for that.
Mr. Newell. I wouldn't know about it.
Mr. Kennedy. You have no comment on that?
Mr. Neavell. No. I have no knowledge of it.
Mr. Kennedy. Dave Beck had his share of the building across the
street from the teamsters headquarters for an amount of $48.10, also
paid by the Western Conference of Teamsters, for his own personal,
private property. Do you have any comment on that?
Mr. Newell. No.
Mr. Kennedy. xVnd Dave Beck had a 3-year robbery insurance
policy for $125, paid for out of the Western Conference of Teamsters.
The date of that was September 15, 1953. That was also paid for by
the Western Conference of Teamsters.
The Chairman. Does the witness deny these records ?
Mr. Newell. No ; I don't deny them, Mr. Chairman. I know noth-
ing about them.
Mr. Kennedy. That included Dorothy Beck, for accident insurance,
$50,000 accident insurance. That wns out of the Western Conference
of Teair.sters '^heck.
Then Bettv Brewster, residence theft for $1,000, with a premium of
$53.75, paid for by Local 174 of the Teamsters.
Mr. Newell. When?
Mr. Kennedy. What ?
Mr. NE^\^2LL. When ?
Mr. Kennedy. July 9, 1953.
Mr. Newell. I just canceled a policy, for nonpayment of premium,
of Betty Brewster.
Mr. Kennedy. During that time, Local 174 of the Teamsters was
paying for her policy ?
Mr. Newell. Possibly.
Mr. Kennedy. And Fred Vershueren, August 7, 1955 — Mr. Chair-
man, that is one of the people we are looking for^ — 3 years for house-
liold furniture, $5,000, and the premium paid to yoii was $17.30 by
Joint Council 28.
We just took a sample, Mr. Cliairman. We did not go through
every year, but that is a sample of a few montlis out of 1 year.
The Chairman. Mr. Newell, do you ever look at your books?
Mr. Newell. No. I am not a bookkeeper. If 1 did, I wouldn't
understand them.
The Chairman. Do you understand what has been asked you here ?
Mr. Newell. Yes. I can understand a financial statement.
The Chairman. How long has this been going on, that you have
been writing policies for these individuals, and collecting from the
teamsters organization, either a local or the Western Conference?
89330 — 57— pt. 7 28
2336 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Newell. I have no way of knowing, Mr. Cliairman, because I
don't handle any money, personally. It comes into our bookkeeping
department.
The Chairman. Your records would reflect it.
Mr. Newell. Apparently they do.
The Chairman. Will you check your records and submit to this
committee the number of policies for the last 5 years, or, rather,
beginning in 1950, that you have written for these individuals, and
have received the money from the teamsters, either a local or the
Western Conference, or any council, from any source of the teamsters,
so that this may be made a part of this record, and so that the team-
sters, when they get representation and somebody to look after their
interest, might recover this money?
Mr. Newell. I will be glad to, if our records show it.
Do they show it, Mr. Bellino ?
Mr. Bellino. Yes.
The Chairman. Will you go through your records, have your book-
keeper do It, and submit to this committee as soon as you can prepare
it, a statement of these accounts, where the teamsters or any imits
of it, have paid for the personal insurance of individuals ? Will you
submit such a statement?
Mr, Newell. Yes.
The Chairman. The Chair is going to order and direct vou to
do it. ''
Mr. Newell. Who do I direct it to?
The Chairman. Sir?
Mr. Newell. When I complete it, whom will I direct it to?
The Chairman. Send it to me personally as chairman of the com-
mittee, and it will go into the committee records. At that time, when
you submit it, you are submitting it under oath, according to your
books, and you are ordered to submit it under oath. I want that
made a part of the record so that those that are interested in the
welfare of the union members may have the record to use in trying
to recover this money that has been illegally and wrongfully paid.
( The following was subsequently supplied : )
Insurance policies loritten hy George C. Newell Co. for individuals listed below
Beck, Dave :
Paid Jan. 15, 1953, Manhattan F. and M. 779101, covering dwelling- in
amount of .$5,000 (paid by Western Conference of Teamsters
check) c^g ^Q
Paid Aug. 13, 1953, Yorkshire Insurance Co., No. 552447" covers
building in amount of $12,000 in name of Dave Beck and Frank
Brewster (paid by Western Conference of Teamsters check) 182 80
Paid Dec. 30, 1953, Yorkshire Insurance Co., No. CR 306246 covera°-e
combination robbery $4,000 (paid by Western Conference of
Teamsters check) 225 00
Paid Dec. 30, 1953, Occidental Life Insurance Co.,~No. 565971 "cov-
erage accidental death $50,000 (paid by Western Conference of
Teamsters check) _ if.., -r.
Beck, Dave, and Dr. Alex Grinstein :
^l^^^-if:^^- -f' ^^^^' Yorkshire Insurance Co., No. 552438, covers
building, $6,000 ^____r__ 43 63
Paid Apr. 16 1954, Yorkshire Insurance Co., No. 552440, covers
Duilding, $7,500 oi^ nn
Paid Apr. 16, 1954, Yorkshire Insurance Co., No755244i7covers
building, $6,000 [ 43 g^
(Paid by Western Conference of Teamsters check")
IMPROPER ACTIVITIES IN THE LABOR FIELD 2337
Insurance policies written by Oeorge C. Newell Co. for individuals listed helow —
Continued
Brewster, Frank W. :
Paid June 25, 1953, Manhattan F. and M., No. 58376, covers 1945 In-
national truck (paid by local union No. 174) 38. 80
Paid Aug. 12, 1954, Manhattan F. and M., No. G2960, covers 1945 In-
national truck (paid by local union No. 174) 29. 00
Paid July 15, 1955, Manhattan F. and M., No. 65166, covers 1945 In-
ternational truck (paid by Joint Council of Teamsters, No. 28,
check) 27. 00
Brewster, Betty: Paid Oct. 28, 1953, Yorkshire Insurance Co., No.
RT 298287, covers residence theft (paid by local union No. 174) 53. 75
Verschueren, Fred, Jr. :
Paid Jan. 20, 1954, Yorkshire Insurance Co., No. MV 355038, endorse-
ment adding personal comprehensive (paid by Joint Council of
Teamsters, No. 28, check) 5. 86
Paid Sept. 20, 1955, Yorkshire Insurance Co., No. 322595, covers
household furniture (paid by Joint Council of Teamsters, No. 28,
check) 17. 30
The CHAiKMAi«f . Is there anything further ?
Mr. Kennedy. That is all.
The Chairman. Is there anything further ?
Senator McNamara. Do you know Mr. Shefferman?
Mr. Newell. I have met him. I have heard him tell stories. That
is all. He never bought anything from me and I never done any busi-
ness with him, if that is w4uit you want to know.
Senator JSIcNamara. I don't want to know that. I want to know
is he in a similar business to what you are in, is he a competitor in
any manner?
Mr. Newell. Not to my knowledge.
Senator McNamara. You don't know that he handles the brokerage
business for teamsters ?
Mr. Newell. Not to my knowledge.
Senator McNamara. You laiow him only incidentally?
Mr. Newell. That is all.
Senator McNamara. That is all.
The Chairman. The Chair presents to you a photostatic copy of a
document taken from the files of local 174. I w^ill ask you to examine
it and see if you can identify it.
(Docmnent handed to the witness.)
Mr. Newell. It is taken from whose records, Mr. Chairman ?
Mr. Kennedy. Local 174.
Mr. Newell. No, I can't identify it. I never saw it before in my
life.
Mr. Ivennedy. Are you familiar with the figures there at all?
Mr. Newell. No.
Mr. Kennedy. They mean nothing to you ?
Mr. Newell. Not a thing.
Mr. Kennedy. It states at the top :
Results of statistical division and broker meeting with Occidental Life Insur-
ance Co., January 12, 1955.
Mr. Newell. Statistical division of what?
Mr. IvENNEDY. That is all it says.
Mr. Newell. I wouldn't know.
Mr. Kennedy. It says total return of liidden profits, company over-
head and other hidden items, $920,94G. Do you know what that
means ?
2338 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Newell, I liave no knowledge of it.
Mr. IvENNEDT. Can you explain that?
Mr. Xeavell. No.
Mr. Kennedy. What would be hidden profits ?
Mr. Newell. I would be honest with you, I don't know wluit hidden
profits are.
Mr. Kennedy. It says a reduction in brokerage commission from
4 pe^'cent to 2 percent, and then it says $6,000. What does tliat mean ?
Do you know ?
Mr. Newell. No. I don't know of any 4 percent brokerage, Mr.
Kennedy. What is the date of that ?
Mr. ICennedy. 1955.
Mr. Newell. We didn't get any 4 percent brokerage in 1955.
Mr. Kennedy. You have no explanation ?
Mr. Newell, No.
Mr, Ivennedy, Can we have that made an exhibit through Mr,
Bellino?
The Chairman, Yes.
The document that the witness has been interrogated about, to which
counsel has referred, will you state from where you received that
document and how you received it ?
TESTIMONY OF CARMINE BELLINO— Eesumed
Mr. Bellino. I will identify this as being a document which was
given to us from the records of local 174, in Seattle.
The Chairman. And that you obtained under subpena ?
Mr. Belling. Yes, sir.
The CriAiR^iAN. That may be made exhibit 202.
(The document referred to was marked "Exhibit No. 202" for ref
erence and will be found in the appendix on p. 2568.)
The Chairman. Is there anything further ?
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. The committee will stand in recess until 2 : 30.
(Thereupon, the hearing was recessed at 12: 30 p. m., to reconvene
at 2 : 30 p. m., the same day.)
(Members present at the taking of the recess: Senators McClellan
and McNamara.)
AFTERNOON SESSION
The Chairman. The committee will come to order.
(Present at the convening of the session were Senators McClellan
and Ives.)
The Chatrinian. Mr. Eay Fields, will you come around please?
You do solemnly swear that the evidence you shall give before this
Senate Select Committee shall be the truth, the whole truth and nothing
but the truth so help you God ?
Mr. Fields. I do.
TESTIMONY OF RAYMOND H. FIELDS
The Chairman. State your name and place of residence and your
business,
Mr, Fields. Raymond H. Fields, Guymon, Okla., newspaper pub-
lisher.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2339
The Chaikmax, You have conferred with members of tlie staff,
have you, regarding- your testimony ?
Mr. Fields. I have.
The Chairman. You elect to waive counsel ?
Mr. Firxns. I do.
The Chairman. Mr. Kennedy, you may proceed.
Mr. I^NNEDY. You are a publisher now, Mr. Field?
Mr. Field. I am.
Mr. Kennedy. Of what?
Mr. Fields. Guymon Daily Herald, and the Guymon Observer.
Mr. Kennedy. Where is that?
Mr. Fields. Guymon, Okla.
Mr. Kennedy. You used to be with the American Legion ?
Mr. Fields. I was.
Mr. Kennedy. From what year were you with the American
Legion ?
Mr. Feelds. From 1945, from V-J Day 1945 until March, 1949.
Mr. Kennedy. In that connection, with the American Legion, you
were doing some public relations work?
Mr. Fields. I was national director of public relations.
Mr. Kennedy. During that peiiod of time ?
Mr. Fields. That is correct.
Mr. Kennedy. Now, did you have any connection with the sale of
the property here in Washington to the Teamsters International
Brotherhood ?
Mr. Fields. I initiated the deal.
Mr. Kennedy. Could you tell us what steps you took ?
Mr. Fields. Well, I was associated in a business way with Mr.
Frank Salisbury an author, lawyer, and man with a number of pro-
motional plans in Washington. He was attorney for the radio cor-
poration, in which I have an interest and he had apprised me of the
fact that the teamsters union was moving their international head-
quarters from Indianapolis, where I was living located, at Legion
headquarters, to Washington.
In November of 1948, the national executive committee of the Legion
had decided to sell this property at Louisiana and D Street, com-
prising some 23,500 square feet, as surplus property and to build in
their present location in Washington and it occurred to me that the
teamsters might be a prospect for buying this surplus property from
the American Legion.
I went to the treasurer of the teamsters union, Mr. English, in In-
dianapolis, and brought up the subject of the sale with him. Mr.
English stated after the description was given that this seemed to be
about the property they wanted in Washington but advised that I
should see Mr. Dave Beck, the chairman of the executive committee
whom I incidentally knev/ in passing and also, Mr. Dan Tobin, the
president of the international teamsters at that time.
Mr. Tobin was ill and he was at his office infrequently and I got him
by telephone and described the property and he also stated that he
thought this was about what the teamsters wanted in Washington, but
advised that I contact Mr. Beck wjio was chairman of the executive
committee and who was the person or his committee was responsible
for purchasing of the site and building of the teamsters' headquarters.
Mr. IvENNEDY. This all took place about February of 1949 ?
2340 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Fields. This took place between February 20 and March 1, of
1949.
Mr. Kennedy. Would yon continue, please ?
Mr. Fields. I called Mr. Beck on the west coast. I believe I called
Seattle and I was referred to Portland. There I was informed that
he was at the Alcazar Hotel in Miami, Fla.
I reached him there. I identified myself as having been a labor
relations officer in the Army and having met him a time or two and
he said that he recalled me. I told him what my mission was in call-
ing. I described the property and he said he thought that this would
be a very attractive proposition for the teamsters union.
He asked me the price and I told him $15 a square foot. The Amer-
ican Legion had $12-a-square-foot investment. He told me
Mr. Kennedy. To make sure we get that clear, at that time you said
to Mr. Dave Beck that the price that the American Legion wanted
on this property was $15 a square foot ?
Mr. Fields. That is correct. I had not quoted the price to either
Mr. English or Mr. Tobin.
Mr. Kennedy. This w^ould have allowed the American Legion a
profit because they had purchased it originally for $12 a square foot?
Mr. Fields. At a gross profit approximately of $17,500.
Mr. Beck told me that he w-ould send a representative from Chicago
to see me at an early date. I asked that he delay this beyond March
8 because a committee was meeting in Washington and it had before
them my resignation and it was my intent to resign on that date. And
so I did.
Mr, Kennedy. Why did you want it delayed until after you resigned
from the American Legion ?
Mr. Fields. This would be an individual deal and I was not repre-
senting the American Legion.
Mr. Kennedy. This would allow you personally to have a commis-
sion on it ?
Mr. Fields. That is correct.
Mr. Kennedy. Will you continue?
Mr. Fields. I received a call, I believe, about the 12tli of March
from Chicago and the person calling identified himself as Nathan
Shefferman, representing Mr. Beck. He asked for a conference in
Indianapolis.
I cannot state the exact date that we set for the conference, but it
was soon thereafter. I notified Mr. Salisbury who was my partner
in this matter, since I had no license to brokerage real estate in the
District of Columbia. We had a conference at the Antlers Hotel in
Indianapolis. Mr. Shefferman and Mr. Salisbury and myself were
there.
Mr. Kennedy. Will you continue ?
Mr. Fields. We presented the deal to Mr. Shefferman and asked a
price of $15 per square foot, or $335,000 gross. He seemed very much
interested in the propert3^ I believe that he had acquainted himself
more definitely with it during the interval from my conversation with
Mr. Beck and the conference in Indianapolis. He seemed well ac-
quainted W'ith the property.
Mr. Kennedy. You told him at that time that the American Legion
was willing to sell the property for $15 a square foot?
Mr. Fields. I told him that the American Legion wanted to sell
the property and that the price was $15 per square foot, from myself.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2341
The American Leo-ion, I learned subsequently, had it listed for $12
in Washington, with the Harold L. Bangs agency here.
Mr. Kennedy. What did he state to that?
Mr. Fields. Well, I believe the conversation was rather lengthy
and my recollection is that he was favorably impressed with the prop-
erty and the price. Then he suggested that instead of selling to the
teamsters union, that he set up an intermediate corporation and that
we sell to this corporation for $15 per square foot.
He subsequently would sell to the teamsters union his proposal
for $18 per square foot. This would represent approximately $17,500
up on tlie price. He proposed to Mr. Salisbury and myself that he
would take half of this increase and give us the other half.
Mr. Kennedy. Now did he state at that time who he was repre-
senting and who was in the deal with him ?
Mr. Fields. He had to be representing Mr. Beck becatise it was
myself who contacted ]\Ir. Beck and Mr. Beck had replied that he
would send a representative from Chicago and Mr. Shefferman called
me as a representative of Mr. Beck from Chicago and came to Indian-
apolis representing Mr. Beck or perhaps others.
Mr. Kennedy. Now in this intermediate corporation that was going
to be set up, where the American Legion would sell it to the inter-
mediate corporation for $15 a square foot, and then this intermediate
corporation would sell it to the teamsters for $18 a square foot, you
were to be a part of that deal and Mr. Salisbury was to be a part of
the deal, to take 50 percent of the profits.
Mr. Fields. That is correct.
Mr. Kennedy. And then Mr. Shefferman was to have 50 percent
of the profits. Did Mr. Shefferman tell you that Mr. Beck was inter-
ested in this deal?
Mr. Fields. I asked Mr. Shefferman definitely if Mr. Beck was
aware of this proposal. He replied in effect, "Well, I am here as his
representative, am I not?"
Mr. Kennedy. So what did you do then ?
Mr. Fields. Mr. Salisbury and myself decided that dealing with
anyone, and not with Mr. Shefferman in particular, but the teamsters
union or any other group in the sale, I had to have further author-
ization and this was relayed to me also by the national adjutant of
the American Legion, Hank Dudley, whom I had discussed it with.
I had also discussed it with Perry S. Brown, the then national
commander of the Legion and he had told me that I had to get special
authorization from a committee for location and erection of national
headquarters or of headquarters rather, in Washington for the Amer-
ican Legion.
Mr. Milo J. Warner, past national commander of the American
Legion of Toledo, was chairman of that committee. So Mr. Salisbury
and myself decided that my next move in any event had to be to get
authorization for the sale of the property. I contacted Mr. Warner
in his office at Toledo, and I went personally to see him there.
Mr. Kennedy. Would you continue ?
Mr. Fields. Mr. Warner told me that the property had been ex-
clusively listed and this was not to my knowledge before that, with
the J. Harold Bangs agency in Washington and that any action would
have to be taken with their consent and that I would have to make a
2342 IMPROPER ACTIVITIES IN THE LABOR FIELD
deal witli them or a deal would have to be made with tliem, and they
were the exclusive agents.
They had bought the property for the Legion and they had oper-
ated the property for the Legion as a parking lot and they had the ex-
clusive listing for the sale. He asked me if I had a firm deal, and
I told him that it appeared so and he asked me to put up $25,000 in
earnest money and I recall that we had some humorous remarks about
taking $25,000 on a very flimsy deal and that I did not know that I
could sell it and I might be investing $25,000 that I would have to
borrow and so forth and so on.
Then I was at all times concerned about the ethics of selling to Mr.
Shefferman. I returned to my home. Although I was living in
Indianapolis, Guymon, Okla. was my home and I was a publisher there.
I consulted my lawyer and perhaps as dear a friend as I have, de-
ceased as of late February, Judge Gordon Berer. He told me that on
the deal with Mr. Shefferman I would not be civilly liable, but he
very prophetically said that some day this union racketeering is going
to be busted wide open and you would not want to be a part of it.
As a consequence of our conversation, I contacted Mr. Shefferman
in Chicago and told him that I wanted no part of his proposal.
Mr. Kennedy. Then were arrangements followed through by the
American Legion ?
Mr. Fields. Mr. Salisbury subsequently contacted the J. Harold
Bangs agency and made a deal whereby he became their representa-
tive and they had the authorization of the American Legion. The
deal was subsequently made on the $15 basis.
I am confident that tlie preliminary contact with Mr. English and
Mr. Tobin had something to do with the fact that tlie deal did not
fall through when we rejected Mr. Shefferman's proposal.
Mr. Kennedy. You had no more firsthand contacts yourself?
Mr. Fields. I had none whatsoever. There may have been some
correspondence with Mr. Salisbury, but I don't recall it until I re-
ceived my commission check from Mr. Salisbury. Bangs was paid
the 3 percent commission, $11,780.
Mr. Salisbury received half of that and I received half of that,
or seventy-five one-hundredths of 1 ]:)ercent was my commission.
Mr. Kennedy. How much did you receive ?
Mr. Fields. Seventy-five one-hundredths of 1 percent.
Mr. Kennedy. How much did that amount to ?
Mr. Fields. Approximately $2,800.
Mr. Kennedy. Mr. Salisbury is the one who carried out the negotia-
tions?
Mr. Fields. I had no further contact with the deal.
Mr. Kennedy. And you did not mpet with Mr. Shefferman ajrain?
Mv. Fields. T never saw Mr. Shefferman, but the one time and I
never contacted INIr. Beck except by phone in Miami.
Mr. Kennedy. Mr. Chairman, we are finished with this witness
and I would like to call Mr. Salisbury.
The Chairman. Are there any questions?
Thank you very much and, Mr. Fields, if you stand by for a little
while we may want you again.
Mr. Salisbury is the next witness.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2343
Do you solemnly swear that the evidence you shall give before this
Senate select connnittee shall be the truth,
nothino; but the truth so help you God ?
Mr. Salisbury. I do, sir.
TESTIMONY OF FEANKLIN C. SALISBURY, ACCOMPANIED BY HIS
COUNSEL, GEOEGE W. WALL, JE.
The Chairmax. State your name and your place of residence and
your business or occupation.
Mr. Salisbury. Sir, may I put these to one side so that I can get
my papers ai-ranged? 1 have asked Mr. Wall, associated in law to
handle these papers for me.
The Chairman. Will you state your name and your place of resi-
dence and your business or occu})ation 'i
Mr. Salisbiky. ^Ly name is Franlvlin Salisbury. My residence in
Wasliington is 1661 oith Street, in Georgetown and I am a legal
resident of Ohio. My occupation is attorney, Govermnent relations
counselor, and I at present am on duty with the Department of the
Interior where I am assistant solicitor in American Indian activities,
legal activities of the American Indian tribes.
The Chairman. Have you discussed with members of the staff the
information that you have regarding the subject matter under inquiry ?
Mr. Salisbury. Yes, sir ; 1 am under subpena by the committee and
I have discussed this with the staff.
The CiiairmajST. Have you counsel present?
Mr. Salisbury. Yes ; I have my former legal associate, Mr. George
Wall to assist me in handling papers.
The Chairman. Mr. Wall, you might state your name and place of
residence and your business or occupation for the record.
Mr. y\^ALL. George W. Wall, Jr., of Vienna, Va., a practicing at-
torney in the District of Columbia.
The Chairman. Thank you, sir.
All right, J\Ir. Counsel, you may proceed.
Mr. Kennedy. Mr. Salisbury, how long have you been with the
Department of the Interior or the Govermnent?
l\h\ Salisbury. Approximately 2 years, a little under 2 years.
Mr. Kennedy. Prior to that time, were you in business for your-
self here in Washington ?
Mr. Salisbury. \es, sir, for many years after the war, after the
Second World War, I was in x)rivate practice, acting primarily as
an entrepreneur.
Mr. Kennedy. AMiat does that mean ?
Mr. Salisbury. An entrepreneur is a person who brings persons
together in the formation of new companies.
Mr. Kennedy. In that connection, were you associated or did you
have anything to do with the sale of the property by the American
Leffion to the Teamsters International Brotherhood here in Wash-
ington, D. C. ?
Mr. Salisbury. Yes, sir, I did.
Mr. Kennedy. Could you tell us what connection you had and
when it started and when it originated ?
Mr. Salisbury. Yes, sir. Back in 1949 I was acting as an inde-
pendent entrepreneur dealing with Mr. Henry Ford, second son of
2344 IMPROPER ACTIVITIES IN THE LABOR FIELD
the Ford Motor Car Co. and his secretary of that company by the
name of Mr. Rudy Powell in connection with the sale or actually
with the possible promotion of a new building on their property on
13th and Pennsylvania. In that connection I obtained a real-estate
brokers license in order to protect myself from other real-estate
brokers, and I spent about 2 years on that, also looking for possible
newcomers to town.
At that period, I read in the Washington News that the teamsters
were coming to town and they had a picture of their Indianapolis
headquarters and so it wasn't particularly private information.
Mr. Kennedy. When you say that they were coming to town, you
mean they were interested in buying some property here ?
Mr. Salisbury. Yes, sir. They were obviously going to move and
so I thought, well, the Ford property would be a wonderful place
for them. So I happened to have an associate, Mr. Fields, with w^iom
I was interested in several different types of promotions, radio sta-
tions and what not, and I also represented him as a lawyer and so I
called him and asked him if he wouldn't get in touch with somebody
in Indianapolis who was connected with the union.
Shall I go on ? It's a rather long story.
Mr. Kennedy. You had this Ford property that you thought might
be sold to the American Legion ?
Mr. Salisbury. To the teamsters union.
Mr. Kennedy. I mean the teamsters.
Mr. Salisbury, Yes, sir.
Mr. Kennedy. And you also knew of the American Legion prop-
erty?
Mr. Salisbury. At this time I was not familiar with the property.
Mr. Kennedy. Just the Ford property ?
Mr. Salisbury. Yes, sir. After getting in touch with Mr. Fields,
he said, "Well, I am familiar with another piece of property which
I think would even be better," and so I naturally said, "Well, let us
proceed and let the chips fall where they may and I prefer to sell the
Ford property, but if we have to sell the American Legion property,
that is fine, too."
Mr. Kennedy. So did you go ahead and proceed ?
Mr. Salisbury. That's right.
Mr, Kennedy. Could you just go through what happened in your
own words, and then I understand you kept a diary at the time and
we will come back to that.
Could you go through in your own words what happened and what
occurred ?
(At this point. Senator Mundt entered the hearing room.)
Mr. Salisbury. Well, you will recall that Mr. Fields was in Indian-
apolis and I was here. Mr. Fields came to Washington in connection
with his resignation from the American Legion and also in connection
with his proposed radio station, and naturally I saw him and we had
many conversations about these properties.
Then, he went back out to Indianapolis and as you have heard he
got in touch with Mr. Beck, and Mr, Shefferman appeared on the
scene. Then, he telephoned me and I came out to meet Mr. Shefferman
and Mr. Beck.
Mr. Kennedy. That is the meeting that Mr. Fields has described?
Mr. Salisbury. At the Antlers HoteJ.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2345
The Chairman. You did not meet Beck there ?
Mr. Salisbury. No, not yet, just Mr. Shefferman.
Mr. Kennedy. Did Mr. Shefferman at that meeting describe him-
self as a representative of Mr. Beck?
Mr. Salisbury. ]\lr. Shefferman was never that exact in anything
that he said, but I got that impression.
Mr. Kennedy. Was he representing the teamsters union there ?
Mr. Salisbury. He seemed to be ; yes.
Mr. Kennedy. Did you state at that time, or was it stated at that
time by your side, by either Mr. Fields or yourself that this property
was for sale to the teamsters for $15 a square foot ?
Mr. Salisbury. That was the price and I got that price from Mr.
Fields. That was the price we were trying to sell it at.
Mr. Kennedy. Did Mr. Shefferman at that time suggest that you
set up an intermediate corporation, a company ?
Mr. Salisbury. Mr. Shefferman suggested that this would be an
appropriate place to set up a company, to purchase the property from
the American Legion and to turn around and sell it to the teamsters
union at a profit.
Mr. Ivennedy. Who was going to be iii the intermediate corpo-
ration ?
Mr. Salisbury. Well, I had the honor of being invited and I don't
know whether I ever could have made the grade, but I understand
Mr. Fields was also invited but there was a small amount of $25,000
involved that would have to be raised.
Mr. Kennedy. So what were you to do? The American Legion
was to sell the property to this intermediate corporation for $15 a
square foot and then that corporation in turn sell it to the teamsters
for $18 a square foot.
Mr. Salisbury. That is right.
Mr. Kennedy. Was that the proposition that Mr. Shefferman
made?
Mr. Salisbury. That was the proposal.
Mr. Kennedy. That was the proposal made by Mr. Shefferman at
this meeting ?
Mr. Salisbury. Yes, sir.
Mr. Kennedy. Did you understand that Mr. Dave Beck was going
to share in that ?
Mr. Salisbltry. I understood that this was done with Mr. Beck's
approval and I don't know that Mr. B6ck was to share.
Mr. Ivennedy. This was done with his approval ?
Mr. Salisbury. It was represented as being something that he was
certainly in favor of. Now, this is pure hearsay. This chap just
appears ades majini here and makes this statement.
Mr. Kennedy. He does what?
Mr. Salisbury. He comes like God out of the machinery of the
stage.
Mr. Kennedy. Then after that the meeting broke up. Did you go
back to the American Legion ?
Mr. Salisbury. Now, I have a list of telephone calls which will
refresh my memory as to what happened then, because most of this
stuff was done by long-distance phone.
2346 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Why don't you start on your diary, and if there are
any questions as we are going along— you kept a diary during this
period of time ?
Mr. Salisbury. Well, I object to the word "diary." I am a writer
and I was in the process of writing this book called Speaking of
Politics.
The Chairmax. That is a good plug for the book.
Mr. Salisbitiy. It is a good book.
I kept a journal from which I got the material and in that connec-
tion one of the most interesting things that I had done in that par-
ticular period was this merry-go-round with this sale of this property.
Mr. Kennedy. You kept a journal as to the events that occurred
day by day ?
Mr. Salisbttry. That's right on anytliing of importance that would
lead to good material for a book and I don't propose to write on the
subject of union relations, but I could.
Now, approximately March 20 I went and took a round trip to
Indianapolis.
Mr. Kennedy. Let me make a suggestion. 'Wliy don't you read
from the diary and then we will get into your telephone calls.
Mr. Salisbury. All right.
Mr. Kennedy. That is from your journal, I mean.
Mr. Salisbltry. Yes. On March 6, 1949, 1 wrote as follows :
I did Saturday have a meeting with Ray Fields. He is a client and is resign-
ing his job as national publicity director of the American Legion. He will
return to Guthrie, Okla., and carry on his business interests with Wentz.
That is Mr. Lou Wentz, prominent Oklahoma citizen.
I asked him to get my Ford property story to Beck in Indianapolis. Beck
plans to get his International Teamsters Union to Washington and what would
be a finer place to head up than in a building on 13th and Pennsylvania.
I also asked him to check with Mr. Wentz to see if he would be
interested in the promotion of a new radio station in Kansas City,
Kans.
Mr. Kennedy. The next is March 12 ?
Mr. Salisbury (reading) :
Ray Fields called from Indianapolis and said that a representative of Dave
Beck would meet us to talk over possible properties for their new Washington
headquarters.
That was quick interest. * * * This morning had a breakfast conference with
Ray Fields and N. W. ShefCerman [sic] at the hotel In Indianapolis — the
Antlers, to be exact. He seemed to be more interested in the Louisiana and D
Street property owned by the American Legion, which Ray brought up.
I explained the Ford property had the advantage of permitting a building
which had commercial and renting possibilities — the Legion property has monu-
mental office building possibilities ; costs one-third the price — but is a one-
tenant deal. I hope they are interested in one or the other.
Then on March 29 my journal indicates :
Best bet is sale of the American Legion property to International Teamsters
Union. It was muddied by effort of X. W. Shefferman to make some quick
money on the transaction by way of an intermediate purchase. But neither
he nor Ray Fields bad the $2.i,000 deposit which ISIilo Warner of the Legion
required. N. W. Shefferman is back now to the idea of representing Dave
Beck on a straight purchase.
Mr. Kennedy. Is that the intermediate deal that you have testified
to?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2347
Mr. Salisbury. Yes, sir; that was. I understand now that Mr.
Fields did have tlie $25,000 but his Lawyer sort of indicated it would
be a poor investment and I didn't know it at the time.
Then, on May 3, I wrote this about the transaction as it was
developing :
First trip was at the request of N. AV. Shefferman to see Dave Beck, head of
the luteruatioual Brotherhood of Teamsters, Chauffeurs, Warehousemen and
Helpers Union.
The trip was shorter tlian tlie name of the organization. I took
advantage of it.
Arrived in Chicago and tooli a room for the day at the Hotel Morrison. Dave
Beck and party were set up there.
If it was good enough for the second ranking labor leader of the
United States, it is good enough for me.
Dave Beck, heavy-set, round-faced, sort of sleeves-rolled-up type, proved most
friendly. He vpas a lot more simple and direct than the overly circuitous
Shefferman. His court was in attendance, pleasant homespun Fred Tobin and
his son, and their Washington lawyer, J. Albert W^oU, and several others.
Well apologized to me for the runaround which he had given me when I first
approached him through Dick Durham. He said it had been orders. We dis-
cussed the advantages of the American Legion property on Louisiana and D —
the contract which I had brought with me — and finally Dave Beck signed it with
Fred Tobin for the union, and myself for my associate, H. L. Bangs and myself.
The purchase price — $353,000. They had the union send a $25,000 check as a
downpayment to my oflSce in Washington.
Then on tlie 26th, I wrote
Mr. Kjjnnedy. Read them a little slower, please.
Mr. Salisbury (reading) :
Finally notified that S. Harry Brown of the American Legion had signed on
behalf of the Legion. Notified Dave Beck and Fred Tobin. Got "bawled out"
by N. W. Shefferman for having anything to do with Tobin, yet he was one
of those who signed on behalf of the union. I smell an onion somewhere in
that setup.
Then, on May 7, 1 wrote :
Shefferman called me today, a little bit on the quieter side— suggested that
I ought to have caught on by now that something is something somewhere on
the deal.
I couldn't catch on to what he was to do.
Shefferman has had the effrontery to appear in the business of the sale of
the American Legion property as the agent for the International Teamsters
Union but at all times he lias muddied the waters. First he tried to set up an
intermediate sale with Fields and myself sharing in the profits. I was agreeable
for he said that Dave Beck wanted it that way so I revealed to the Legion that
I was to participate in a deal with Ray Fields (et al.) .
They, through Milo Warner, wired back and said that I was not representing
them.' But Fields and Shefferman could not put up the $25,000 needed for a
downi'ayment to swing the intermediate sale, so it had to go as a straight sale.
That \vas what I had been interested in accomplishing all the time. So I
negotiated a sale at the $15 per scpiare foot price. That price was suggested
originally by Ray Fields— raised by the intermediate sale suggestion of Sheffer-
man— who said that he had a private deal on behalf of himself and Dave Beck
at $18.
That fell through so he said Hint he would i»ress for a sale at the original $15
rather than $18 price. The sale went through.
Mr. Kennedy, Just a little slower so tliat we can understand it.
Mr. Salisbury (reading) :
Shefferman has been continually criticizing me by saying that I have been
actively naive. For example, I notified Fred Tobin that the sale had gone
2348 IMPROPER ACTIVITIES IN THE LABOR FIELD
through. After all, he signed the contract with Dave Beck. Why should he
not be notified?
Next at the Chicago meeting he asked me —
that is Mr. Tobin—
for certain photos of the property. I called his ofiice here —
the buyers —
International Teamsters Union. Now, Shefferman claims I am naively upsetting
the deal. He even called my office and told Frank Fletcher —
who was my associate —
I was upsetting him by not following instructions.
He, in turn, intimates that unless he handled the deal it would not go over,
for — like tlie treatment I received from the union lawyer in town — one J. Albert
WoU, i. e., silence bordering on discourtesy — the sale would have fallen through
but for his efforts.
He enipliasized that I have been displeasing Beck by even talking to Tobin.
Beck and Tobin are supposed to be top men in this teamsters union. It could
be that they are actually working together as they should and that actually this
character Shefferman is cutting their throat to make a dime for himself.
Today he said members of the union would be calling on me to ascertain the
part that he had played in getting the price down from $18 to $15. Obviously,
he expects a fee on a saving amounting to some $75,000 and I am to substantiate
his story. I can truthfully say that he settled on the $15 price yet not mention
that he tried to get the price up to $18. He deserved, if anything, to be fired
as a disloyal agent if he was supposed to be bargaining for the best interest of
his client Beck and teamsters.
I do not represent them — work with them — I represent myself as a "finder."
At most I represent the Legion as — with Bangs — their agent. Beck or Sheffer-
man have no relation or privity with me. In fact, we represent opposing inter-
ests— they are the buyers; I represent and am paid by the sellers.
I could pass the whole matter off as just a bit of fragrance from the politics of
union labor and tell them if they wish to know about Shefferman ask him — he is
their agent, not mine.
]Mr. Kennedy. I understand an approach was made to you by Shef-
ferman after this deal went through, that you should tell the teamsters
if they ever contacted you, that he had been responsible for getting the
price of the property down from $18 a square foot to $15 a square foot;
is that right?
Mr. Salisbury. Yes, sir.
Mr. Kennedy. And the facts were that the proj)erty had been offered
right from the beginning for $15 a square foot, is that right?
Mr. Salisbury. Yes, sir.
Mr. Kennedy. Did Mr. Shefferman call you on this or telephone
you?
Mr. Salisbury. He called me on this. However, nobody from the
union ever called me.
Mr. Kennedy. So you never had to mention it?
Mr. Salisbury. No.
Mr. Kennedy. But he had been in fact trying to get up from $15
to $18 per square foot, and he had been doing the opposite of what he
wanted you to describe to the union he had done ?
Mr. Salisbury. That is right.
Mr. Kennedy. You said that you had a list of telephone calls.
Mr. Salisbury. Well
]\Ir. Kennedy. What was Mr. Sheft'erman's attitude during this
period of time ? Did you have much contact with him ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2349
Mr. Salisburt. Mostly by phone. Pie was a very difficult man to
get along with. He did all of the talking and I have seldom said
anything.
Mr. Kennedy. What was he so difficult about? What was the
problem ?
Mr. Salisbury. His manners were difficult. He was like a top
sergeant in the Army.
Mr. Kennedy. Why was he being difficult ?
Mr. Salisbury. I think that is his character.
Mr. Kennedy. Was it some problem that it seemed he was worked
up about ?
Mr. Salisbury. He was worked up all of the time. The thing
was going along and there were no problems, very nicely but he was
angry all of the time.
Mr. Kennedy. How many times did he contact you by telephone?
Mr. Salisbury. I would say probably 25 times. 1 only kept a
record of long-distance calls.
Mr. Kennedy. I notice from your diary, it indicates that he wanted
you to stay away from telling the officials of the teamsters how the
deal was progressing.
Mr. Salisbury. Yes. I caught on to that and I didn't at first.
Mr. Kennedy. What was your impression as to what he was trying
to accomplish by saying that or doing that?
Mr. Salisbury. Well, at that time, until the date I read these re-
marks, I had not been able to figure out what his particular capacity
was. Then, as I mentioned to you, I felt he was not being a loyal
agent to the union, if he was in fact an agent.
It was very diiRcuit in dealing with Mr, Shefferman to determine
exactly what he was trying to do. He was very clear about the $15
to $18 intermediate deal, l)ut I saw no reason for his making it so
difficult when we were back on the track.
Mr. Kennedy. You think he was trying to put over the point to
the officials of the teamsters that he was the one that was responsible
for negotiating the deal, rather than them, and, therefore, get a fee
himself?
Mr. Salisbury. I gathered that because that must have been the rea-
son for my not talking to the union, because I might have so-called
spilled the beans.
Mr. Kennedy. Would you imagine also that he was saying to the
teamsters union, at least from what he was saying to you at the time,
he was saying to them that "The American Legion wants to sell
this for $18 a square foot, but I am negotiating to get it down to
$15 a square foot" ?
Mr. Salisbury. I think that is obvious ; yes, sir.
Mr. Kennedy. Was that your own conclusion from the statement
or request that he made of you at the end ?
Mr. Salisbury. Yes, sir.
Mr. Kennedy. That you should tell the American Legion that he
had been, in fact, responsible for getting the price down ?
Mr. Salisbury. Yes, sir.
Mr. Kennedy. Is that correct?
Mr. Salisbury. Yes, sir.
Mr. Kennedy. Do you know if he ever received any fee for it?
2350 ttlPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Salisbury. That I don't know.
Mr. Kennedy. I mean to tell the teamsters that lie had been respon-
sible for gettino- the price down.
Mr. Salisbury. Yes, sir.
Mr. Kennedy. Is there anythinj": further that yon want to add on
to this ? Is there anything- further that you have on it?
Mr. Salisbury. Well, if you want for the record the dates of these
tele])hone calls.
Mr. Kennedy. That will be fine.
Mr. Salisbury. March 21, telephone to Ray Fields at Guthrie;
March 23, Ray Fields at Guthrie; May 28, Shefferman at Chicago;
May 29, Ray Fields at Guthrie; April 26, round tiip to Chicago.
The Chairman. Do you have the list of them there ?
Mr. Salisbury. Yes, sir.
The Chairman. That may just be inserted in the record at this point
and it will save your time reading all of them.
Were you calling them ?
Mr. Salisbury. They were calling me and I only kept a record of
my calls, because those are deductible expenses.
The Chairman. You did not keep the record of their calls to you?
Mr. Salisbury. Not to me : no.
The Chairman. Would Shelferman call you himself?
Mr. Salisbury. Yes, sir.
The Chairman. He would call you a number of times ?
Mr. Salisbury. We were negotiating and we would call back and
forth.
The Chairman. May we copy that list in the record of the telephone
calls, please?
Mr. Salisbury. Yes.
(The list is as follows :)
American Leyion property sale, 1949
Mar. — . Round trip to Indianapolis (Ober Steamship), Hotel Antlers
Mar. 21. Telephone Ray Fields (Guthrie)
Mar. 2.J. Telephone Ray P'ields (Guthrie)
Mar. 28. Shefferman (Chicago)
Mai-. 29. Ray Fiehis (Guthrie)
Mar. 21. Photographs of property (T. F. Scott Co.)
Mar. 21. Photograph album : Typing at 20 cents per letter (14 letters)
Apr. — . Typing at 20 cents per letter (3 letters)
Apr. 26. Round trip to Chicago, Ober Steamship
Apr. 18. Telephone call, Shefferman (Chicago)
Apr. 26. Telephone call, Milo Warner (Columbus)
Apr. 28. Telephone call, Ray Fields (New Albany)
May 6. Telephone call, Shefferman (Chicago)
May 10. Telephone call, Shefferman (Chicago)
May 4. Telegram, Indianapolis
May .5. Telegram, Seattle
.June 10. Telephone call, Shefferman (Chicago)
June 22. Telephone call, Ray Fields (New Albany)
Expenses Ray Fields— check to Ray Fields
Commission Ray Fields — one-half balance
Services rendered, Ray Fields— ontvhalf balance
.Tune 22. Received cash
Mr. Kennedy. Could we have these excei-pts from the diary made
a part of the record ?
lAIPROPER ACTIVITIES IN THE LABOR FIELD 2351
The CiiAiKMAX. He read from tlie iounial and I think that would
be the best evidence. I did not defect any substantial variation from
this cop3^
Mr. Kennedy. That is tine.
The Chairman. Tlie next witness ?
Mr. Kennedy. Mr. Dutfj .
The Chairman. You do solenndy swear that the evidence you shall
give before this Senate select connnittee shall be the truth, the whole
truth, and nothing but tlie truth, so help you God '(
Mr. Duffy. I do.
TESTIMONY OF LaVERN J. DUFFY
The Chairman. State your name and place of residence and what
your present occupation is.
Mr. Duffy. My name is LaVern Joseph Dully, and I live here in
"Washington, D. C., and I am a member of the staff of the Permanent
Subcommittee on Investigations of the United States Senate, on tem-
porary duty with this special committee.
The Chairman. Proceed.
Mr. Kennedy, Now, Mr. DuU'y, you have been doing some woik in
connection with the sale of the property from the American Legion
to the teamsters union ?
Mr. Duffy. I have, sir.
Mr. Kennedy. You have interviewed Mr. Fields and Mr. Salisbury
in connection with that '(
Mr. Duffy. Yes, sir.
Mr. Kennedy. Did you also serve a subpena on the teamsters union,
the International Brotherhood of Teamsters here in Washington, D. C,
to s[,'&t copies of their minutes dui'ing the year 1949 of their executive
board i
Mr. Duffy. I did, sir, on A})ril 23 I served a subpena duces tecum
on John English, secretary-treasurer of the teamsters here in Wash-
ington.
Mr. Kennedy. Xow, did you search those minutes that were kept
to determine whether there was anything in them about the purchase
of this property from the American Legion ?
Mr. Duffy. Yes, sir.
Mr. Kennedy. Was there any mention about the purchase of the
pro])eT'ty l^y the American Legion ?
Mr. Duffy. Yes, sir.
Mr. Kennedy. Was there any mention in those minutes about a fee
to be paid in connection Avitli that purchase ?
Mr. Duffy. Yes. sir.
Mr. Kennedy. Do j^ou have those minutes 'i
Mr. Duffy. I have a photostatic copy of the original minutes sub-
penaed from the teamsters and if I may I would like to read the
pertinent section which relates to the issue before the committee.
Mr. Kennedy. Can we get them identified, please?
The Chairman. You have them before you ?
Mr. Duffy. I will identify the photostatic copy.
The Chairman. Do you recognize this ?
89330— 57— pt. 7 24
2352 IMPROPER ACTIVITIES EST THE LABOR FIELD
Mr. DuTTY. Yes, sir.
The Chairman. It may be made exhibit 203.
(The document referred to was marked "Exhibit No. 203" for ref-
erence and may be found in the files of the select committee.)
The Chairman. You have a copy of this before you?
Mr, DuTFY. Yes, sir.
The Chairman. You may proceed to testify from it.
Mr. Duffy. Yes, sir. I am reading from those minutes. The date
is June 10, 1949 :
Meeting of the general executive board was called to order by general presi-
dent, Daniel J. Tobin. All members were present with the exception of Vice
President McLaughlin.
General President Tobin reviewed the history of the international brother-
hood's endeavor to secure an appropriate site in the District of Columbia upon
which to build an office building that would be appropriate for the international
brotherhood not only to function as a labor organization, but also be a fitting
monument to a great organization such as the International Brotherhood of
Teamsters.
He described the various attempts to reach an agreement with the American
Legion as to a fair purchase price for the property which the international
brotherhood has decided to buy and in that connection stated that negotiations
had been stalled and practically terminated because of the adamant refusal of
the American Legion to sell this property at a figure less than $18 per square
foot.
He explained that because of this position taken by the American Legion,
Executive Vice President Dave Beck secured the services of an agent to act
for and on behalf of the international brotherhood of attempting to bring about
a reduction in the price of this property.
He stated that this agent through diligent work and painstaking effort had
finally succeeded in having the American Legion agree to sell this property at a
price of $15 per square foot which, considering the extensive area of the land
purchased, resulted in a saving to the international brotherhood approximately
sixty-five to seventy-five thousand dollars.
RESOLUTION
Be it resolved. That the general president and the general secretary-treasurer
be, and they are hereby, authorized, empowered, and directed to withdraw from
the general treasury of the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen, and Helpers of America the further sum of $12,500 as payment
in full for services rendered by an agent, not associated in any capacity with the
International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Help-
ers of America, in bringing about on behalf of the International Brotherhood of
Teamsters, Chauffeurs, Warehousemen, and Helpers of America the purchase of
said land and premises, which said services were necessary, helpful, and advan-
tageous to the International Brotherhood of Teamsters, Chauffeurs, Warehouse-
men, and Helpers of America in the final purchase price of said land and prem-
ises of a large amount of money, greatly in excess of the $12,500 to be paid to
said agent, and to pay said $12,500 to said agent as a fair, just, and reasonable
compensation for said services.
The motion was put to a vote and was unanimously carried, and the foregoing
resolution was unanimously approved and adopted.
(At this point Senator Ervin entered the hearing room.)
Mr. Kennedy. Mr. Chairman, I just have one correction here. I
think it was $65,000 to $75,000.
Mr. Duffy. Yes, sir.
Mr. Kennedy. Then there was an addition there, that is also of
sonie pertinency : He further stated that this agent, as a result of his
activities, had subinitted a bill to the international in the amount of
$12,500, and that it was his opinion that this bill w^as fair and pay-
ment of it should be authorized by the general executive board.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2353
President Tobin concluded his remarks by saying that at the ex-
ecutive board meeting held in Washington so that the members of
the executive board could make a personal inspection of the prop-
erty to be purchased, and that since each member of the executive
board had made this personal inspection, they were in a position to
judge the wisdom of the purchase of this property at the price of
$15 per square foot.
The Chairman. ^Y]\Rt time was this deal finally consummated?
Do we have any record of it ?
Mr. Kennedy. Do you mean when it was signed for the purchase of
the property?
The Chairman. Yes.
Mr. Kennedy. From Mr. Salisbury's diary, around or between May
3 and May 6.
The Chairman. This action by the teamsters' executive board was
after the transaction had been consummated ?
Mr. Duffy. There is no question about that.
The Chairman. This was an afterthought.
Mr. Kennedy, Now, Mr. Duffy, have you also subpenaed some of
the checks and records of the International Brotherhood of Teamsters
to find or learn whether any moneys were in fact paid to Mr. Sheffer-
man?
Mr. Duffy. Yes, sir.
The Chairman. I present to you a photostatic copy of a check, and
also a photostatic copy of a bill, ancl ask you to examine them and
see if those are the documents that you referred to.
(Documents handed to witness.)
Mr. Duffy. This is the bill submitted by Mr. Shefferman dated
June 20, 1949, to the teamsters, requesting for his services $12,000.
The bill also is signed by Mr. Tobin, and Mr. Nathan Shefferman also
signed the bill, the receipt of the check which was given to him by the
teamsters dated June 20, 1949, check No. 691, made out to Mr. Nathan
W. Shefferman for $12,000, signed by John F. English, general secre-
tary and treasurer.
The Chairman. The check may be made exhibit No. 204, and the
bill exhibit 203-A.
(The documents referred to were marked "Exhibits Nos. 204 and
204-A," for reference and will be found in the appendix on pp. 2569-
2570.)
Senator Mundt. Is there anything in the record to explain the dis-
crepancy between the Si 2,500 which the resolution authorized and the
$12,000 check made out for it?
Mr. Duffy. Senator Mundt, we made an inquiry for that, and we
found out that the teamsters cannot make an aclequate explanation of
why Mr. Shefferman was not paid the $12,500. There is a very strong
possibility that they still owe him $500.
Senator Mundt. The bill was $12,500, the resolution calls for $12,-
500, so I was curious as to why the check was only $12,000. They give
you no answer ?
Mr, Duffy. No, sir.
The Chairman. Was the bill for $12,500 or $12,000 ?
Mr. Duffy. The resolution states that he should have been paid
$12,000.
The Chairman. No, the bill there ?
Mr. Duffy. Apparently he thought it was $12,000 also.
2354 IMPROPER ACTIVITIES IN THE LABOR FIELD
Tlie Chairman. Tlie bill made an exhibit is $12,000?
Ml'. Duffy. Yes.
The. Chairman. And the check is $12,000 ?
Mr. Duffy. Yes, sir.
The Chairman. And the resohition and minutes have $12,500 ?
Mv. Duffy. Yes, sir.
Mr. Kennedy. Mr. Duffy, have you made a check or a study of Mr.
Sliefferman's bank accounts ?
Mr. Duffy. Yes, sir.
Mr. Kennedy. Are you familiar with those?
Mr. Duffy. Yes.
Mr. Kennedy. Was there a payment of any kind, any sort, any type,
from "Sir. Xathan Shell'erman to Mr. Dave Beck during tliis period of
time ?
Mr. Duffy. Yes, sir ; there Avas.
Mr. Kennedy. How much was that check ?
Mr. Duffy. Approximately a month after this 1 check for $12,000
was deposited in the Harris Trust & Savings Bank in Chicago, and
it was cleared on June 22, 1949, approximately 5 weeks later Mr.
Shefferman made out a check for $8,000 to Dave Beck.
Mr. Kennedy. $8,000?
Mr. Duffy. Yes, sir.
Mr. Kennedy. itHiat was the date of that check ?
Mr. Duffy. The date of that check was July 25, 1949, I think, Mr.
Kennedy. It is an exhibit already in the record.
Mr. Kennedy. Was Mr. Shefferman, when he appeared and testi-
fied before this committee on March 26, asked about that $8,000 check?
Mr. Duffy. He was, Mr. Kennedy.
Mr. Kennedy. And did he say at that time that Mr. Beck was such
a nice fellow and that he had known him for 10 or 12 years, and never
had done anything nice for hiui, that he thought he deserved some
money ?
Mr. Duffy. Yes, sir.
(At this point. Senator Ives withdrew from the hearing room. )
Mr. Kennedy. This is on page 1584 :
Mr. Shefferman. As I started to say, I have known Mr. Beck for more than
20 years. Mr. Beck has been a friend and a very good friend. Mr. Beck, if yon
will permit me, is a terrific personality. I fonnd him so. He is very attentive
to his friends and very generous to his folks and people who surround him.
Now this is no laughing matter, if you knew him as I know him, and know of
all of the things he has done for a lot of the people out in Seattle and the vicinity
and the region of this home, you would come to the same conclusion I have.
I know of other things he has done for other people, and I say in all sincerity
that Mr. Beck is a generous man, and a terrific personality, and a very fine
gentleman.
This is in answer to a question of why he gave him $8,000 :
Mr. Beck, I realized, in the early days, after 19.35, when I was in this so-called
employer-employee relationship business, I realized that but for the teamsters,
that was after the CIO and the AFL had split, but for the teamsters there
wouldn't have been any AFL.
I think they would have disintegrated. That is because the weaker union had
to depend upon the teamsters, and they had to depend upon the teamsters for
whatever strength and whatever progress they could make.
Realizing that, and realizing, further, that it was well in my work, public-
relations phases of it, to mingle with a good many of the people in labor as well
as I did in management, I went about and made speeches and wrote a lot of
speeches, and I made them to labor.
impropp:r activities in the labor field 2355
I was invited to a good many unions and made speeches on free enterprise,
and I made speeches on the matter of working together and not making a private
battleground of our Nation.
So he said that was the reason that he guxe the $8,000 check to Mr.
15eck at that time.
JMr. Duffy. Yes, sir.
Mv. Kennedy. And he also talked about introducing a new book-
keeping system at that time, and maybe Mr. Beck helped him on
that, getting the contract ?
Mr. Duffy. Yes, sir.
The Chairman. Is there anything further ?
Mr. Duffy. I think the check is exhibit 117, in the record, the
$8,000 check.
The Chairman. What exhibit number?
Mr. Duffy. 117.
The Chairman. Is there anything further? Have you been able
to get ]Mr. Beck to comment on this transaction ?
Mr. Duffy. No, sir.
Mr. Kennedy. Again, on page 1586, it states :
"Well, you liked him, and you gave him the money?
Mr. Sheffekman. Pardon me?
Mr. Kennedy. You liked him, so you gave him the money?
Mr. Sheffekman. Sure. I thought he was entitled to it, and I hadn't done
anything for him for 10 years and I had known him for more than 10 years and
I hadn't done a thing, and I felt that he was entitled to this.
Mr. Kennedy. You thought he was entitled to the money?
Mr. Sheffekman. Yes, sir.
Mr. Kennedy. Now, because of things he had done for you?
Mr. Sheffekman. Things he had done for me in the way of helping me write
my speeches, and providing materials, and introducing me to a good many unions
that I could never have gotten into.
That is all, Mr. Chairman.
The Chairman. All right.
The committee will stand in recess until 2 : 30 tomorrow afternoon.
(Whereupon, at 3:30 p. m., the committee recessed, to reconvene
at 2 : 30 p. m., Thursday, May 16, 1957.)
(Members present at the taking of the recess : Senators McClellan,
Ervin. and Mundt.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
THUESDAY, MAY 16, 1957
United States Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington^ D. C.
The select committee met at 2 : 30 p. m., pursuant to Senate Resolu-
tion 74, agreed to January 30, 1957, in the caucus room. Senate Office
Building, Senator Jolm L. McClellan (chairman of the select com-
mittee) presiding.
Present: Senator John L. McClellan, Democrat, Arkansas; Senator
Irving M. Ives, Republican, New York; Senator John F. Kennedy,
Democrat, Massachusetts ; Senator Sam J. Ervin, Jr., Democrat, North
Carolina ; Senator Pat McNamara, Democrat, Michigan ; Senator Karl
E. Mundt, Republican, South Dakota; Senator Barry Goldwater, Re-
publican, Arizona ; and Senator Carl T. Curtis, Republican, Nebraska.
Also Present : Robert F. Kennedy, chief counsel ; Jerome Adlerman,
assistant counsel ; Carmine Bellino, accounting consultant ; and Ruth
Young Watt, chief clerk.
(Members present at the convening of the session: Senators Mc-
Clellan, Ives, Ervin, McNamara, Goldwater, and Curtis.)
The Chairman. The committee will come to order.
(At this point. Senator Kennedy entered the hearing room.)
The Chairman. Let us have order, please.
Mr. Norman Gessert, come forward, please.
Mr. Gessert ? Come to the witness chair, please.
Mr. Carey. Mr. Chairman, may I make an opening remark, if I
may?
The Chairman. You may, after he is sworn.
Mr. Gessert, will you be sworn, please, sir ?
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth, and noth-
ing but the, truth, so help you God?
Mr. Gessert. I do.
TESTIMONY OF NORMAN J. GESSERT, ACCOMPANIED BY COUNSEL,
EDWARD L. CAREY
The Chairman. Mr. Gessert, will you state your name, your place
of residence, and your business or occupation, please ?
Mr. Carey. Mr. Chairman, may I interrupt for a moment ?
The Chairman. Yes; as soon as I get his name on the record the
Chair will defer to counsel.
2357
2358 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Gessert. Norman J. Gessert, 16730 45th Northeast, Seattle 55,
Wash.
The Chairman. What is your business or occupation?
Mr. Gessert. General organizer for the Teamsters' International
Union.
The Chairman. Thank you very much. You have counsel with
you, have you, Mr. Gessert ?
Mr. Gessert. I do.
The Chairman. Counsel, you may identify yourself for the record,
and the committee will hear you.
Mr. Carey. My name is Edward L. Carey, Mr. Chairman. I \yas
consulted by Mr. Gessert at 5 after 2 this afternoon in connection with
the forthwith subpena served upon him by United States marshals.
I have not had an opportunity to go into the problem with him. I
consider it an extremely complex problem. I think it is one that re-
quires a little time for me to get some background, to talk to the client,
and give him what I consider proper advice. Because of those factors,
I should like to have a continuance of a day or two in order that I
might properly do what I consider a lawyer's job.
The Chairman. You had not had an opportunity to discuss the mat-
ter witli him until 2 o'clock this afternoon 'i
Mr. Carey. That is correct, Mr. Chairman.
The Chairman. You had not previously been retained by him ?
Mr. Carey. No, sir.
The Chairman. Are you a Washington attorney?
]Mr. Carey. I am, sir. I have been here for 9 years.
The Chairman. I do not believe vou gave your address.
Mr. Carey. I am in the Barr Building, 910 ITth Street, NW.
The Chairman. You feel like you would need at least until to-
morrow.
Mr. Carey. Yes, sir.
The Chairman. Without objection, the Chair will grant the con-
tinuance until tomorrow, at least. You may get in touch with the
Chair or the chief counsel, in the morning, and we will try to arrive
at some time. But you are under subpena, and you continue under
subpena, and you are ordered to report back tomorrow not later than
10 o'clock, at least for a conference, so that we may determine further
about the matter.
Mr. Carey. Thank you, Mr. Chairman.
Mr. Gessert. Thank you, Mr. Chairman.
The Chairman. You may call the next witness.
Mr. Kennedy. Mr. Donald IMcDonald, Mr. Chairman.
(Members present at this point : Senators McClellan, Ives, Kennedy,
Ervin, McNamara, and Curtis.)
The Chairman. You will be sworn, please ?
You do solemnly swear that the evidence you shall give before
this Senate select committee shall be the truth, the whole truth and
nothing but the truth, so help you God ?
Mr. McDonald. I do.
TESTIMONY OP DONALD D. McDONALD
The Chairman. Be seated.
State you name, your place of residence, and your business or occu-
pation.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2359
Mr. McDonald. My name is Donald McDonald. I live at 43();i Ttli
Northwest, Seattle, Wash. I keep the books for the Western Con-
ference of Teamsters and Joint Council Building Association.
The Chairman. You have conferred with members of the staff,
have you, JSIr. McDonald, regarding your testimony ?
Mr. McDonald. Yes, sir.
The Chairman. You, of course, know of your right to have counsel
present if you desire ?
Mr. McDonald. Yes, sir.
The Chairman. You waive counsel ?
Mr. McDonald. I do ; yes.
The Chairman. Thank you ver}^ much.
Mr. Kennedy, proceed.
Mr. Kennedy. Mr. McDonald, how long have you been with the
teamsters union ?
Mr. McDonald. A little over 8 years.
Mr. Kennedy. You came with them when ?
Mr. McDonald. 1949.
Mr. Kennedy. And have you been keeping tlie books since that
time?
Mr. McDonald. Yes, sir.
Mr. Kennedys You have been keeping the books of the Western
Conference of Teamsters, and Joint Council 28 Building Association?
Mr. McDonald. I have been keeping the books of the Western
Conference of Teamsters since March 1949. The building association
I took over, probably, sometime in 1950. I don't remember the date.
It wasn't at the same time.
(At this point. Senator IMundt entered the hearing room.)
Mr. Kennedy-. Mr. McDonald, could you tell the committee in
connection with those two records that you kept, could you tell the
committee if, while you were keeping the books of the Western Con-
ference of Teamsters and Joint Council 28 Building Association, there
were any loans listed to Mr. Dave Beck on those books ?
Mr. McDonald. No, sir.
Mr. Kennedy. There were not ?
Mr. McDonald. No.
Mr. Kennedys The books of the Western Conference of Teamsters
no longer exist for the years 1949 to 1953, is that right?
Mr. McDonald, That is right.
Mr. Kennedy. You were asked in e?arly 1954 to bring those records
and books to Mr. Graham's office for 1949 through 1953 ?
Mr. McDonald. Yes.
Mr. Kennedy. Those books were ultimately destroyed, you never
saw them again ?
Mr. McDonald. That is what I understand; yes.
Mr. Kennedy". But from your recollection, there were no loans on
the books of the Western Conference of Teamsters of Joint Council 28
Building Association to Mr. Dave Beck during this period of time?
Mr. McDonald. Through 1953 ; no.
Mr. Kennedy. Did you make up a file, a form 990, on Joint Council
28 Building Association with the Treasury Department?
Mr. McDonald. Yes, sir.
Mr. Kennedy. You are obligated under the law to file that form ?
Mr. McDonald. That is right.
2360 IMl 'ROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You filed that form because you are a tax-exempt
organization ?
Mr. McDonald. Yes.
Mr. Kennedy. When you filed that form during the years 1949
through 1953, were there any loans listed on that form? Any loans
to Mr. Dave Beck listed on that form ?
Mr. McDonald. No, sir ; not during that period.
Mr. Kennedy. During the middle of 1954, Mr. Dave Beck sent a
check of some $200,000 to the joint council, made payable to the Joint
Council 28 Building Association; is that right?
Mr. McDonald. Made payable to Joint Council 28 Building Asso-
ciation and the "Western Conference of Teamsters.
Mr. I^NNEDY. Did you reflect that repayment of money from Dave
Beck — did you reflect that on the Joint Council 28 Building Associa-
tion form 990 with the Treasury Department in 1954 ?
Mr. McDonald. For 1954 ; yes. I picked it up as a previously un-
reported receivable.
Mr. Kennedy'. As a previously unreported receivable ?
Mr. McDonald. Yes.
Mr. Kennedy". That is because you had not been aware of the fact
that this money had gone to Mr. Dave Beck?
Mr. McDonald. Yes. Until the time that I was given the copy
of the satisfaction and accord agreement, I did not know about him
using any moneys of the western conference or building association.
Mr. Kennedy. I would like to have you identify this, please.
The Chairman. The Chair hands you a document, a photostatic
copy, and I will ask you to examine it and state if you identify it.
If you do, state what it is, please, sir.
(A document was handed to the witness.)
Mr. McDonald. This is a schedule of the assets and liabilities of
the Joint Council Building Association as of January 1, 1954.
The Chairman. That was January 1, 1954?
Mr. McDonald. Yes.
The Chairman. That may be made exhibit 205.
(The document referred to was marked "Exhibit No. 205" for
reference, and will be found in the appendix at p. 2571.)
The Chairman. Did you prepare that statement ?
Mr. McDonald. Yes.
The Chairman. You prepared it yourself ?
Mr. McDonald. Yes, sir.
The Chairman. From what?
Mr. McDonald. From a similar schedule that was in the cash
receipts and disbursements records that were some of the records that
were to be stored.
The Chairman. From the records of the Joint Council of Teamsters
or the Western Conference of Teamsters ? W^iich ?
]\f r. McDonald. From the building association.
The Chair:man. From the building association. All right.
Mr. Kennedy. Are the records of the Joint Council Building As-
sociation still in existence? Are they still in existence, the ones for
1949 throudi 19.53?
Mr. McDonald. Tlie building association?
Mr. Kennedy'. Yes.
Mr. McDonald. No.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2361
Mr. Kennedy. They were also destroyed at the time?
Mr. McDonald. Yes.
Mr. Kennedy. You jDrepared this record of the assets of the Joint
Council Building Association from those records ; is that right ?
Mr. McDonald. That's right.
Mr. Kennedy. This record was prepared prior to the time these
other records were destroyed ?
Mr. McDonald. Yes.
]\Ir. Kennedy. And these are the assets of the Joint Council 28
Building Association ; is that right ?
Mr. McDonald. Yes.
Mr. Kennedy. The assets listed there are some $7,400 at this
time, January of 1954?
Mr. McDonald. Yes.
Mr. Kennedy. If there had been a loan on the books of Joint
Council Teamsters 28 Building Association, if there had been a loan
on the books at this period of time, during 1953, that would have been
listed in this record, would it not ?
Building Association ; is that right?
Mr. Kennedy. So that is further evidence that there was no loan
listed to Mr. Dave Beck ?
Mr. McDonald. There was no loan listed when I prepared the form
990 for 1953.
Mr. Kennedy. During August of 1954, Mr. Dave Beck gave some
$200,000 back to the union ?
Mr. McDonald. That's right.
Mr. Kennedy. I would like to have you identify this exhibit No.
No. 112-E.
The Chairman. The Chair presents to you an exhibit, a docu-
ment that has been made an exhibit, to the testimony already heard
by the committee. No. 112-E, and asks you to examine it and state
what it is, please, sir.
(A document was handed to the witness.)
Mr. McDonald. This is a photostatic copy of the 990 that was sub-
mitted in 1955 for the year of 1954 and accompanying work papers
from which the form was completed.
The Chairman. Is that the form, the report, that was filed with
the Labor Department?
Mr. McDonald. With the Internal Revenue Department.
The Chairman. With the Treasury Department. All right.
Mr. Kennedy. Keep that form in front of you. In that form, you
list as the assets starting January 1, 1954, some $257,422.89?
Mr. McDonald. That is correct.
Mr. Kennedy. At the end of 1953, December 31, 1953, which is the
day before, you list as the assets, $7,422.89. So the assets grew in one
day some $250,000.
Mr. JMcDoNALD. On the form it is a little difficult to reflect some
of the changes. That figure has been changed the following day.
But there is this note which was submitted. It says exceeds previous
total by $250,000 because of previously unrecorded receivables.
Mr. Kennedy. That refers to the money that Mr. Dave Beck had
returned to the treasury ?
Mr. McDonald. That is riffht.
2362 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Did lie ultimately return beyond tlie $250,000?
Then he returned another $50,000, is that right ?
Mr. McDonald. Yes, sir.
Mr. Kennedy. And subsequently he returned another $20,000 ?
Mr. McDonald. Yes, sir.
Mr. Kennedy. Is it my understanding that within the last 2 weeks
he has returned another $100,000, is that correct?
Mr. McDonald. That is right.
Mr. Kennedy. So, so far he has returned to the treasury, of the
money that he took prior to that time, he has returned some $370,000,
is that right ?
Mr. McDonald. That is correct.
Mr. Kennedy. Thank you.
Senator Goldwater. May I ask a question ?
The Chairman. Senator Goldwater.
Senator Goldwater. Mr. McDonald, did you have the impression
at any time that this money was borrowed from the union funds?
Mr. McDonald. No, sir. I didn't know it was being used until
I got the accord and satisfactory agreement in 1954.
Senator Goldwater. Then did you begin to tliink that it might
have been stolen from the union treasury ?
Mr. McDonald. I didn't attach any significance, or have any idea
what is was used for.
Senator Goldwater. Plave you ever given it sufficient thought to
arrive at a decision whether this was borrowed or stolen money?
Mr. McDonald. Well, Senator, as long as there is an effort being
made to repay it, it was used — as the accord and satisfactory — No, I
believe it is tlie letter of December 1954, which amends the original
satisfactory and accord agreement, it indicates that the money was
being used with the intent of repaying it right along.
Senator Goldwater. Did you ever arrive at any total that might
have gone in this way ?
Mr. McDonald. No, sir. The accord and satisfactory agreement
provides for mutual accountants to make an audit of the books and
to determine to the best of their ability what moneys have been
involved.
Senator Goldwater. At any time, to your knowledge, did he have
the authority of the union to use this money ?
Mr. McDonald. I don't know if I can answer that question. To
my knowledge, I don't know what the extent of his authority was.
Maybe he did and maybe he didn't. I can't answer that question,
Senator.
Senator Goldwater. Are you acquainted with tlie way he got the
money ? Did that come into your observation ?
Mr. McDonald. Well, apparently it was a matter of convenience
to simply use some of the uioneys witli the intent of returning when
it has been ascertained how much has been used.
Senator Goldwater. Have you ever ascertained how much has been
used?
Mr. McDonald. That is, by the satisfactory and accord agreement,
to be determined by accountants of the Western Conference of Team-
sters and building association and Mr. Beck.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2363
Senator Goldwater. Would we be safe in assuming that that por-
tion of that fund that he has paid back was borrowed, but that por-
tion that he hasn't paid bacli was stolen?
Mr. McDonald. The present letter of amendment extends the date
of complete satisfaction for an accounting of these moneys for an-
other 6 months.
Senator Goldwater. What is the final date on that ? Do you know ?
Mr. McDonald. It will be 6 months from — it will be the end of the
year, I think.
Senator Goldwater. Is he making much progress in paying it back?
Mr. McDonald. $370,000 worth. That is quite a bit of progress.
Senator Goldwater. Thank you very much.
Senator Mundt. Mr. Chairman?
The Chairman. Senator Mundt.
Senator Mitndt. You are the bookkeeper, are you not, of the team-
sters' organization ?
Mr. AIcDoNALD. Yes.
Senator Mundt. What do your books show ? How much of a bal-
ance does he owe the teamsters ? You say there is going to be a mutual
agreement, that they are going to have some accountants determine the
amount. I wonder if your books would not throw some light on that?
Mr. McDonald. I don't exactly follow. My books ? Yes, probably
in strict accounting practices, there is no doubt that we should have
knowledge of all the money that was used, particularly in the way of
being receivable, and any loans.
Senator Mundt. I mean, it is sort of a basic concept of bookkeeping
that either the books that are kept reflect a faithful and complete
record of the financial transactions, or you might as well not keep any.
books at all. Is that right ?
Mr. McDonald. Yes.
Senator Mundt. We will start out with that assumption.
So I will assume that your books should show whatever money was
borrowed or stolen or M^hatever happened to it. If it is a matter of
record, it should show that Mr. Beck owes the teamsters X number of
dollars. Is that right?
Mr. McDonald. That is right. We could show any money that has
been borrowed.
Senator Mi^ndt. Do your books show that? Why do you have to
have a team of accountants examine — and whatever they are going to
look at, I don't know. You cannot find your books. But why shouldn't
the books show that ?
Mr. McDonald. At no time was the money advanced as a loan.
The books, therefore, do not reflect any of those.
Senator Mundt. In other words, this whole series of transactions
which they are attempting now to adjudicate through this satisfactory
and accord agreement, none of these transactions at any time were re-
flected in tlie regular bookkeeping procedures of the teamsters union ; is
that right ?
Mr. McDonald. That is right.
Senator Mundt. They were extracurricular activities which did not
show up in the bookkeeping; is that right?
Mr. McDonald. Yes. Your statement, yes.
Senator Curtis. Mr. Chairman ?
The Chairman. Senator Curtis.
2364 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. Mr. McDonald, what are your duties as book-
keeper ?
Mr. McDonald. I have tried to record the transactions, with the
information, make these forms, all reports, with the information that
has been given to me, and to the best of my ability.
Senator Curtis. Do you record receipts and disbursements?
Mr. McDonald. That is right.
Senator Curtis. And you balance your books occasionally?
Mr. McDonald. Oh, yes.
Senator Curtis. Do you verify your balances with bank balances?
Mr. McDonald. Yes.
Senator Curtis. How did this $370,000— at least that much — get
from the hands of the teamsters' funds into Mr. Beck's personal
hands?
Mr. McDonald. That is being determined by the accountants
that
Senator Curtis. Well, what do you say? You recorded the receipts
and the disbursements.
Mr. McDonald. That is right.
Senator Curtis. How did it get out? How did it get out of the
teamsters' funds into the hands of Mr. Beck?
Mr. McDonald. Well, it apparently got to his hands or was put
to his use through accounts of the building association and the western
conference.
Senator Curtis. You keep those books ?
Mr. McDonald. Yes, sir.
Senator Curtis. How did it get out of their funds into his hands?
Mr. McDonald. Well
Senator Curtis. Was it by check?
Mr. McDonald. Yes, sir ; they are checks.
Senator Curtis. Who wrote the checks ?
Mr. McDonald. I made them out on instructions from Mr. Beck
or from statements.
Senator Curtis. Did you record those checks in your books ?
Mr. McDonald. Yes, sir.
Senator Curtis. Why didn't your books show the money going from
the teamsters to Mr. Beck?
Mr. McDonald. It never went directly to Mr. Beck. It has gone
through various people with whom the teamsters do business.
Senator Curtis. Who were those people?
Mr. McDonald. Well, there is a building contractor.
Senator Curtis. Who is he ?
Mr. McDonald. John Lindsay.
Senator Curtis. Where does he live?
Mr. McDonald. Seattle.
Senator Curtis. And who else ?
Mr. McDonald. I understand — I don't know. I guess some of the
money that was sent to Los Angeles, as promotional expense, that
is the way it appears on my books if I am asked to make a check to
Joint Council 42 Promotional League.
Senator Curtis. I don't want to delay the proceedings here, but
what you are saying is that this money was disbursed in checks paid to
others and Mr. JBeck received all or part of those funds.
Mr. McDonald. He received benefit of the money ; yes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2365
Senator Curtis. When did you first note that he received the bene-
fit of that?
]Mr. McDonald. In 1954.
Senator INIundt. How was it brought to your attention, then ?
Senator Kennedy. Wlien you got tlie message on the loan, and you
received a note saying Mr. Beck regarded these disbursements as loans,
that is the first time you realized it, and that was the first time you
realized the income-tax people were looking into it?
Mr. McDonald. Yes, sir.
Senator Kennedy. And disbursements have been going on for a
number of years; have they not?
Mr. McDonald. I don't know the period of time.
Senator Kennedy. Beginning in 1948 or 1949, the building fund
and the public relations fund and so on, and so, obviously, it couldn't
have been a loan or it wouldn't have been listed in other funds and you
would have had a record of it from the moment it began.
Mr. McDonald. That is right.
The Chairman. Are there any further questions ?
Senator Ervin. You drew the checks, all of the checks on which
this $370,000 was disbursed?
Mr. McDonald. I have no way of knowing just what portion of the
money that was used that I drew the checks for.
Senator Ervin. You mean you are the bookkeeper that is supposed
to keep the records of this building fund, and you didn't keep any
records showing when these funds were disbursed ?
Mr. McDonald. I have a record of when the moneys were disbursed,
but you asked me, I think, what portion was being used by Mr. Beck.
Senator Ervin. No ; I asked you when these $370,000 were disbursed,
when they got out ? How did you have these funds before you issued
these checks, and where were they ? Did you have them in a bank ?
Mr. McDonald. Oh, yes ; they were in the account of the building
association and the Western Conference of Teamsters.
Senator Ervin. You drew the checks at Mr. Beck's instructions, on
which this $370,000 was disbursed?
Mr. McDonaed. That is right.
Senator Ervin. Wlien were those checks drawn, and what time,
and what amounts?
Mr. McDonald. Well, it covers some period of years, and for vari-
ous amounts. The various funds, apparently.
Senator Ervin. The only records that have disappeared or have
been iost or destroyed are the ones for the last few years; so, do you
have early records showing when you started disbursing this fund?
Mr. McDonald. I don't bother to question — the records that were
destroyed
Senator Ervin. As I understand your records for the last several
years have been destroyed.
Mr. McDonald. Yes.
Senator Ervin. You have the records antedating those years, do
you not ?
Mr. IMcDoNALD. Yes, sir.
Senator Ervin. "Wlien you, as bookkeeper, discovered in 1954 that
Mr. Beck admitted that he had received the benefit of these funds,
didn't you have enough curiosity to look back at your records to see
2366 IMPROPER ACTIVITIES IN THE LABOR FIELD
when these funds got out of the custody of the building fund into
Mr. Beck's custody ?
Mr. MgDoxald. Senator, I was relying on this accord and satis-
faction agreement to explain a lot of things, and I am hoping that,
when the completion of the agreement has been reached, I will have
a co]^y of the audit and be able at that time to, probably, at that time
1 will be able to answer your question.
Senator Ervin. As a matter of fact, didn't this accord and satis-
faction amount to a confession that neither Mr. Beck nor the building
fund had any records which would show the total amount of building
fund money which Mr. Beck had received ?
Mr. McDonald. Possibly it could.
Senator Ervin. Did it mean anything else ?
Mr. McDonald. I accepted it as meaning
Senator Ervin. As a bookkeeper, at the time that they came in
with this thing, which amounted to a confession by Mr. Beck that he
had at least received $370,000 of funds belonging to the building fund,
and possibly more, didn't you, as bookkeeper, have enough curiosity
to look back on such records as you liad to find out how or when this
money got out of the custody of the building fund ?
Mr. McDonald. I felt that I know at least how it got out. Now,
as for specific accounts, and specific checks to certain individuals or
buildings or to other funds, I don't know.
Senator Er\in. Do you mean to say that, the way it was disbursed,
it was in such a way that you could not trace it on the books of the
building fund to Mr. Beck; is that what you mean?
Mr. McDonald. That is right.
Senator ER^^N. Now you mentioned one of these payments having
been made to a building contractor.
Mr. McDonald. Yes, sir.
Senator Ervin. What was the amount of that payment?
Mr. McDonald. He was paid various amounts through the years,
and I do have a record of that, but what portion of that money was
used by Mr. Beck I don't know. His records would probably show
that.
Senator Erven. So that there is not now any records in your pos-
session as bookkeeper for the building fund that woidd disclose how
much over and above this $370,000 that Mr. Beck received for his own
use from the funds of the building fund ?
Mr. McDonald. That is right.
Senator Ervin. And can you tell us, or have you discovered how far
back or over what period of years Mr. Beck had been receiving, in this
indirect manner, building funds ?
Mr. McDonald. No, sir.
Senator Er\t[n. Can you approximate it ?
Mr. McDonald. I took over the building fund in 1950, and what
happened prior to that I don't know, and the western conference in
1949, and would be the same story. What happened prior to that I
don't know.
Senator Ervin. Do you know whether they started back as far as
1949?
Mr. McDonald. No, I don't know. I don't have any way of know-
ing.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2367
Senator Ervin. And so far as you know, there was not at any time
since you have been bookkeeper of the building fund a single scratch
of a pen showing that Mr. Beck had borrowed any money from the
building fund or had received any money from the building fund ?
Mr. McDonald. That is right.
Senator Ervin. That is all.
The Chairman. Mr. McDonald, as I understand it, you had no
way of knowing that Mr. Beck was getting part of the money or any
of the money ?
Mr. McDonald. That is right.
The Chairman. In other words, a bill came in and you were ordered
to pay it and the bill showed it was for the contractor, or the building
contractor, or it showed it was for the promotional fund or some other
purpose. You simply kept your books according to the bills and state-
ments and the orders you received at the time ?
Mr. McDonald. That is right.
The Chairman. You kept them accurately, so far as you know ?
Mr. McDonald. Yes, sir.
The Chairman. You recorded the facts as they were represented
to you ?
Mr. McDonald. Yes.
The Chairman. Wlien the checks were issued and went to the con-
tractor, or to the promotional fund, you had no way and it was not
your duty to follow through and see where they went ? If Mr. Beck
got them instead of the building contractor, or if the bill was false,
and if it was fictitious, and it was a false claim, you had no way of
knowing ?
Mr. McDonald. No, sir.
The Chairman. So the money got into Mr. Beck's hands through
those devious ways ; is that correct ?
Mr. McDonald. That is correct.
The Chairman. Therefore, you only kept the books on the basis of
what the vouchers showed?
Mr. McDonald. That is right.
Senator Ervin. I would like to ask one other question.
Mr. McDonald, you had nothing wliatever to do with determining
what disbursements should be made by the building fund ?
Mr. McDonald. Beyond routine bills and payrolls, that is right.
J have never been a part of any policymaking body.
Senator Ervin. You did not hold a policymaking position at all?
Mr. McDonald. That is right.
Senator Er\t:n. And you were merely required to record what came
to your knowledge?
Mr. McDonald. That is right.
Mr. Kennedy. Tliat is all for this witness.
The Chairman. Are there any further questions?
Senator McNamara. You indicated that you made out the check
that went to this building contractor. Did you make them out to the
building contractor in the building contractor's name?
Mr. McDonald. Yes, sir.
Senator McNamara. Was there such a person ?
Mr. McDonald. Oh, yes.
89330— 57— pt. 7 25
2368 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator McNamara. How was he engaged at the time and what was
the check paying him for ?
Mr. McDonald. In the building association, tliere have been con-
tinuous aherations and repairs to the building, and we have been
constructing new buildings for some period of years. Since at least
1950 there has been some kind of construction going on.
Senator McNamara. You would not have been in a position to know
what portion of the building was being worked on by this contractoi'.
and you just acknowledged the voucher that came in ?
Mr. McDonald. That is right.
Senator McNamara. And was this previously approved by your
board? You operated under a building committee of some sort; did
you not '?
Mr. McDonald. There is a policymaking body, an administration
of the building association. However, I was not connected with it.
I got most of my instructions concerning the building checks and
so forth from Mr. Beck and occasionally from Mr. Lindsey, if he would
come to me and send in a statement.
Senator McNamara. Who hired you ?
Mr, ]McDonald. A fellow named Fred England.
Senator McNamara. Who is he in relation to this?
Mr. McDonald. He at that time was director of the Western Confer-
ence of Teamsters.
Senator McNamara. Is this buikling operated by a building-
committee ?
Mr. McDonald. There is a board, I think it is called a board of
trustees, and I don't know what the committee is called.
Senator McNamara. Tlie people who pay you your salary; are
they not the peo])le ?
Mr. McDonald. No : my salary was paid by the Western Conference
of Teamsters.
Senator McNamara. Not by the building committee ?
Mr. McDonald. Not by the buikling association at all.
Senator McNamara. You are employed totally on the books of the
building committee ?
Mr. McDonald. No; I am employed totally for the western confer-
ence of teamstei'S.
Senator McNamara. This set of books was incidental to your over-
all job?
Mr. ^McDonald. That is right.
Senator McNamara. I see. That throws some light on it. Now,
this was ratlier an incidental part of your job?
Mr. McDonald. Yes.
Senator Mc Namara. It was not predominantly your job, and your
job was to keep all of the books and this was just part of them?
Mr. McDonald. This is one of the books, that was under my care.
Senator M< Natviara. Do you know whether this building company
was incorporated or not?
Mr. McDonald. It was.
Senator McNamara. It was incorporated ?
Mr. McDonald. Yes, sir; under the laws of the State of Wash-
ington.
Senator McNamara. That is all.
The Chairman. Are there any further questions ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2369
Thank you very much, Mr, McDonald.
Mr. Bellino, will you come around, please, sir ?
You have previously testified, have you not, Mr. Bellino, at this
series of hearings?
TESTIMONY OF CARMINE S. BELLINO— Resumed
Mr. Bellino. Yes, sir.
The Chairman. All right. Counsel, you may proceed.
Mr. Kennedy. Tliere are just a few matters that I want to clear up
quickly with you, Mr. Bellino, and that is, first you have examined
some ai the records of the International Brotherhood of Teamstei-s
liere in Washington ?
Mr. Bellino. Yes, sir.
Mr. Kennedy. Were there certain dishursements to 2 individuals
by the order of Mr. Dave Beck to disbui^e certain moneys to 2 indi-
viduals?
Mr. Bellino. Yes, sir.
jNIr. Kennedy. Could you tell the committee what documents you
have on that?
Mr. Bellino. I have a schedule showing the amomits paid bv the
International Brotherhood of Teamsters upon instructions of Mr.
Be<-k.
Afr. Kennedy. Do you have the instructions there, or is there a
document there that states that it is on the instructions of Mr. Dave
Bei-k?
Mr. Bellino. Yes, sir; it is a memorandum from William T. Mul-
lenholz.
The Chairman. That may be made exhibit No. 206.
(The memorandum referred to follows:)
Mr. Bellino (reading) :
Per instructions from general president Dave Beck, the following listed
persons are to be placed on retainer beginning February 1. payable on the 10th
of the month, beginning today as follows : Mort Jones ,$416.66 ; 9124 Lake Wash-
ington Boulevard, Belleview, Wash.
O. Douglas Welch, $208.33, 2841 42d Avenue West, Seattle, Wash.
These retainers are to be charged to public relations work.
(Signed) Wiixiam T. Mullenholz,
Comptroller.
Mr. Kennedy. Now, have we since learned and iiuiuired to find out
what work was being done by Mr. Welch ?
The Chairman. May I ask first, did you read tlie entire memo-
randum ?
Mr. Bellino. Yes, sir.
The Chairman. Who is it signed by ?
Mr. Bellino. By William T. Mullenholz, comptroller.
Mr. Kennedy. Did we in(iuire furtlier to find out what those pay-
ments were for ?
Mr. Bellino. Yes, sir.
Mr. Kennedy. Did we learn it was to write a Ixjok on Mr. Dave
Beck's life?
Mr. Bellino. Yes.
Mr. Kennedy. To be called, The Driver's Seat (
Mr. l^ELLiNo. Yes, sir.
2370 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Were the payments going through the minutes of
the International Brotherhood of Teamsters, do we find any record
there of notification by Mr. Beck that this money was to be used
to write a book on his life ?
Mr. Belling. No, sir.
Mr. I^nnedy. Was there any knowledge by the International
Brotherhood of Teamsters, by any other official there that this was
money to be used to write this book on Mr. Beck's life ?
Mr. Belling. Not the officials which we contacted ; no, sir.
The Chairman. Wlio are some of those you contacted ?
Mr. Belling. The comptroller and the secretary -treasurer.
Mr. Ivennedy. There is no evidence in any of the minutes that this
knowledge was available to any of the officers of the International?
Mr. Belling. That is correct, sir.
The Chairman. Have you examined the minutes of the meetings
during that period ?
Mr. Belling. Yes, sir.
The Chairman. Was there any authorization in the minutes, or
any discussion of it or any motion or any reference to it ?
Mr. Belling. We found none, sir.
The Chairman. Now, Mr. Bellino, during the past 2 weeks or so,
has Mr. Beck sent a check to the International Brotherhood of Team-
sters ?
Mr. Belling. Yes, sir.
The Chairman. Could you tell the committee the amount of that
check ?
Mr. Belling. The amount of the check is $12,987.51.
The Chairman. Did he notify the teamsters that this was to cover
the disbursements that were made to Mr. Jones and Mr. Welch ?
Mr. Belling. Yes, sir.
The Chairman. Do you have the check or a photostatic copy of it ?
Mr. Belling. Yes, sir.
The Chairman. It may be made exhibit 207.
(Document referred to was marked "Exhibit No. 207," for reference
and will be found in the appendix on p. 2572.)
Mr. Kennedy. Wliat is the date of that check ?
Mr. Belling. May 6, 1957, payable to the International Brother-
hood of Teamsters, drawn on the account of B. &, B. Investment Co.,
signed by Dave Beck.
Mr. Kennedy. Mr. Bellino, we have made a schedule regarding
the money that was taken by Mr. Dave Beck during the period of
time, 1946 through 1953?
Mr. Belling. Yes, sir.
Mr. Kennedy. And we have drawn up a list showing or indicat-
ing that this money was taken rather than borrowed, have we not ?
Mr. Belling. Yes, sir.
Mr. Kennedy. Do you have that list in front of you ?
Mr. Belling. Yes, sir.
The Chairman. Have you made that compilation yourself ?
Mr. Belling. Yes, sir.
The Chairman. In your work with the committee?
Mr. Belling. Yes, sir.
The Chairman. From the records?
Mr. Belling. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2371
The Chairman. Of the teamsters and other sources, banks, and
so forth?
Mr. Belling. Yes, sir.
Mr. Kennedy. Would you read the title of it ?
The Chairman. The list may be made exhibit 208, and you may
proceed to read it or such parts of it as you wish.
(Document referred to was marked "Exhibit No. 208" and fol-
lows:)
Mr. Belling (reading) :
Thirteen Points Documenting That Dave Beck "Took" Rather Than
"Borrowed" the More Than $300,000 From Various Teamster Union Funds
IN Seattle
1. Form 990 filed by the Joint Council No. 28 Building Association, Seattle,
with the Treasury Department and which contains a list of assets and liabilities
at the beginning and end of each year, fails to show any loans to Dave Beck
up to and ending December 31, 1953. It is from the Joint Council No. 28 build-
ing accounts that Mr. Beck now states he borrowed most of his money.
2. The financial statement of Joint Council No. 28 Building Association as
of January 1, 1954, does not list any loans as due from Dave Beck.
3. Frank Brewster, president of the Western Conference of Teamsters, and
during the pertinent period of time its secretary-treasurer as well as secretary-
treasurer of Joint Council No. 28 Building Association, stated in sworn testi-
mony before the committee that the first time he learned that Dave Beck had
taken money was when he started paying it back in 1954. He stated he did not
know of any loans to Dave Beck during the pertinent period of time.
4. Don McDonald, bookkeeper of the Western Conference of Teamsters testi-
fied the money taken by Dave Beck was not listed as loans on the books and that
he was never told that they were loans.
5. Dave Becks' personal financial statement dated September 26, 1952, which
was furnished to the Seattle First National Bank, fails to show any loans from
the AVesteren Conference of Teamsters or any unit thereof.
6. Dave Beck's personal financial statement dated February 7, 1952, which
was furnished to the Seattle First National Bank, fails to show any loans from
the Western Conference of Teamsters or any unit thereof.
Mr. Kennedy. Could we get those two made exhibits for the rec-
ord. They have not been introduced as yet.
Mr. Belling. These are bank statements signed by Dave Beck,
furnished to the Seattle First National Bank, which were obtained
from the Seattle First National Bank under subpena.
The Chairman. Those financial statements you have just referred
to may be made exhibits 209 and 210.
(Documents referred to were marked "Exhibit Nos. 209 and 210" for
reference and will be found in the appendix on pp. 2573-2574.)
Mr. Belling (reading) :
7. Dave Beck's personal financial statement furnished to Occidental Life In-
surance Co., as noted in memorandum of A. M. Burke on April 12, 1951, wherein
the only loan shown is one from the Seattle First National Bank and no loans
are listed from the Western Conference of Teamsters or any unit thereof.
8. Memorandum on interview of Dave Beck by Mr. A. M. Burke of Occidental
Life Insurance Co. dated March 14, 1955, at which time Mr. Beck stated the only
loan outstanding was a loan from the Seattle First National Bank.
9. Disappearance of the records of the Western Conference of Teamsters and
Joint Council Building Association for the pertinent period of time.
10. If it was a loan there would be no need for the circuitous manner in which
Nathan Shefferman received some of the money, namely, western conference
funds in Seattle being channeled through the public relations account in Los
Angeles and from there, sent to Nathan Shefferman in Chicago.
11. Repayments by Dave Beck to the teamsters were not made until he came
under income tax investigation.
2372 IMPROPER ACTIVITIES IN THE LABOR FIELD
12. Rock's statement of accord and satisfaction in 1954 which shows he lacked
l)crs(>iial records of the amounts he had taken from teamster union funds. This
included his own admission that after 700 hours of work, his accountants could
nol determine wliat lie owed.
13. The doubt that exists even today is to the aggregate amount which Dave
Beck is obligated to repay to the teamsters.
Mr. Kennedy. We have, Mr. Bellino, one other document that we
want to submit for the record, and that is on the Western Conference
of Teamsters.
Will you explain that to us ?
(At this point, Senator Gold water withdrew from t4ie he-aring
room.)
Mr. Bt.emxo. This is foi-ni 1)1)0, filed by the Western Gonfei-ence of
Teamsters for the calendar yeai' 11)54, which has attached to it a work-
slieet showino; the loans receivable or the amounts of assets on loans
due to Western Conference of Teamsters on January 1, 1954, in the
total amount of $'2;)'2,55().14, but none of the items are thoae of Dave
l^eck. Dave Beck is not listed as an account or loans receivable.
Mr. Kennedy. That would really be a 14th reason; would it not,
Mr. Bellino?
Mr. Bei.lino. Yes, sir.
The Chairman. That may be made exhibit 211.
(Document referred to was marked "Exhibit 211'' for reference,
and may be found in the tiles of the select committee.)
Senator Kennedy. Mr. Bellino, how lono- have you been an ac-
countant?
Mr. Bellino. Since 192.').
Senator Kennedy. How lon^ were you with the FBI ?
Mr. Bellino. I was with the FBI for 11 years.
Senator Kennedy. And you are a certified public accountant?
Mr. Bellino. Yes, sir, since 1923.
Senator Kennedy. Have you ever known anyone, on a matter rep-
resenting a loan, have you ever known anyone who, by any circum-
stances, was obliged to follow the course of action which Mr. Beck
took?
Mr. Bellino. No, sir.
Senator Kennedy. In all your experience with the FBI?
Mr. I^ELLiNo. No, sir.
Senator Kennedy. You never had an example of a loan that was
ever ke])t in the way it was kept, supposedly, in this case?
Mr. Bellino. No, sir. In the FBI we would call that restitution.
Senator Kennedy. Does restitution mean that money was taken
illegally and then it was kept?
Mr. I^ELLiNO. Yes, sir.
Senator Kennedy. That is Avhat you consider it in this case as an
accountant?
]\Ir. I^ELLiNo. Yes, sir.
Senator Kennedy. I would like to, Mr. Chairman, congratulate
Mr. Bellino. He has been working for a long time, and he is highly
skilled in this held. I think he rendered invaluable service to the
coinmittee and also to the investigators of the General Accounting
Office, who have been out in Seattle, assisting Mr. Bellino in his work.
The Chairman. I think we all join in that sentiment that you have
expressed, Senator Kennedy, and I think he has rendered a great
service also to the teamsters."
IMPROPER ACTIVITIES IN THE LABOR FIELD 2373
Senator Curtis ?
Senator ('uhtis. Mr. Bellino, to have a loan, you have to liavc both
a borrower and a lender; is that correct?
Mr. Bklijno. Yes, sir.
Senator Cuktis. To be a lender, the person must liave kno\vU'd«>;e of
the transaction ; is that not right ?
Mr. Belling. Yes, sir.
Senator Curtis. And must also consent to it?
Mr. Belling. Yes, sir.
Senator Curtis. In that sense, was there any lender?
Mr. Belling. Xot that we could see in this case; no, sir.
Senator Curtis. Now, in tliese settlement accounts, this accord and
satisfaction, did any pei-sons otlier than Dave l^eck say tlutt these
transactions were loans?
Mr. ]5elling. I don't know of anyone that could say tluit tliis was
really a loan.
Senator Curtis. No ; I mean by the documents themselves.
Mr. Belling. The accord and satisfaction, referred to it as advances
and loans. That is the only thing.
Senator Curtis. And wl)o were parties to those documents besides
Dave Beck ?
Mr. Belling. I })elieve Frank Brewster, for the Western Conference
of Teamsters.
Senator Curtis. Anybody else?
Mr. Belling. No, sir. There are the attorneys who witnessed it,
Mr. Sam Bassett, and I believe Don McDonald witnessed one of them.
Senator (Jurtis. Do you know who drew it?
Mr. Belling. I believe Sam Bassett, together with Mr. Beck's
attorney, Mr. Cashline, drew the accord and satisfaction.
Senatoi- ('urtis. Is that more than one document?
Mr. Belling. Yes, sir.
Thei-e were the original accord and then the supplemental agree-
ment aftei'ward, in December of 1054.
Senator (Jurtls. Is it your imderstanding that these men who drew
this document and signed it with Mr. Beck stated that the transactions
were loans?
Mr. Belling. That is the way they operated ; yes, sii-. They con-
sidered them as loans.
Senator Curtis. But they point out tliat at no time had the lender
known of the ti-ansaction or consented to them?
Mr. Ijeeling. That is coiT-ect.
Mr. Kennely. In tliat connection, none of them state that they
knew they were loans while it was being taken?
Mr. Belling. That is correct.
Mr. Kennedy. They say now the members of the teamstei-s, Mr.
Sam Bassett, the attorney for the teamsters and some of these other
))eGp]e say now, "We consider them loiiiis" but none of them tliought
they were loans at the time.
Mr. Belling. That is coirect.
Mr. Kennedy. In fact, Frank Brewster testified before the com-
mittee, and he signed the checks, and he stated that he never considered
these loans.
Mr. Belino. That is correct.
2374 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. And nobody would know better than Frank Brew-
ster or Donald McDonald?
Mr. Belling. That is correct.
Senator McNamara. In your examination of the books, this $300,000
plus as you have indicated in this report, was it all taken out by sub-
terfuge, by, apparently, paying it to contractors and for transactions
and property in Los Angeles and such things?
JMr. Belling. Yes, sir.
Senator McNamara. How did he get the money himself? The
check was made out to a contractor. How did the money ultimately
get into Beck's hands ?
Mr. Belling. The contractor was doing work for Beck ; he put up
4 or 5 homes.
Senator McNamara. Actually, Beck did not get the money, but
this went to pay for work that was done for Beck personally ?
Mr. Belling. Yes, sir.
Senator McNamara. And the tr^msaction iiivolving the Los An-
geles property, was that a similar thing, that the title for the prop-
erty was in Mr. Beck's name ?
Mr. Belling. No, sir. That was not included in the $320,000. That
is another separate transaction.
Senator McNamara. Then the title for the property that a large
portion of this $300,000 was paid out for, remained in Mr. Beck, the
title?
Mr. Belling. They were for his benefit.
Senator McNamara. Did he have the title to the property that
the money was being spent on, or did the building fund or the district
council or somebody else have title?
Mr. Belling. Under property, he had title.
Senator McNamara. He had title?
Mr. Belling. Yes, sir.
Senator McNamara. So, actually, the money was paid out to pay
bills which should properly have been paid by Dave Beck?
Mr. Belling. Yes.
Senator McNamara. He did not physically take the money, but
he just used it for his personal use?
Mr. Belling. Yes, sir.
Senator McNamara. That is generally the pattern here?
Mr. Belling. Yes.
Senator McNamara. Thank you.
The Chairman. Is there anything further?
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. Thank you, Mr. Bellino.
Call the next witness.
Mr. Kennedy. Mr. Dave Beck.
The Chairman. Call Mr. Beck, please.
Mr. Beck, do you acknowledge you are testifying under oath?
TESTIMONY OF DAVE BECK, ACCOMPANIED BY HIS COUNSEL,
EDWARD BENNETT WILLIAMS
Mr. Beck. Yes, I do. Senator.
The Chairman. That is continuing from your previous time on
the witness stand.
Mr. Counsel, you may proceed.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2375
Mr. KJENNEDT. Mr. Chairman, the staff has made a compihition of
the testimony regarding Mr. Beck's activities that has been sworn
to before tliis committee, and Ave have tjiis compihition mimeor
graphed.
It is entitled, "Some 52 ways in which Dave Beck misused his au-
thority, position, and trust as president of the Western Conference
of Teamsters and subsequently as president of the International
Brotherhood of Teamsters."
These matters all bear on items that might be considered as far as
legislation in the future, Mr. Chairman, that should be taken up
by the committee.
The Chairman. Has the witness been provided a copy ?
Mrs. Watt. It is right here.
Mr. Williams. Mr. Chairman, before we begin, I w^ould like to re-
mind the Chair that I made a formal application when we last appeared
here before the committee, in which I requested that Mr. Beck's testi-
mony be deferred until such time as the criminal charges now pending
against him in the western district of Washington are disposed of.
I outlined in some detail the reasons for that request. I do not think
they need repetition. At the time, it is my recollection that the Chair
indicated that you would take under advisement my formal
application.
Am I to assume that my application has been denied for an adjourn-
ment of Mr, Beck's interrogation until after the Washington case is
disposed of?
The Chairman. The Chair will submit the matter to the committee
here in open session. It is the Chair's position that Mr. Beck being
questioned properly about anything not relating to the subject matter
of the charges in the indictment, anything that happens subsequently—
I understand the indictment covers what period?
Mr. Kennedy. I believe for 1950, tax evasion for 1950.
Mr. Williams. The indictment sounds in two accounts and they both
relate to the tax year of 1950. But, Mr. Chairman, of course, our posi-
tion that this was a net worth case, and so any interrogations regarding
financial matters would have a relevancy to this indictment.
I, of course, as I have indicated to the Chair, must advise Mr. Beck
not to answer matters, germane or relevant in my opinion, to this in-
dictment because I think it is a breach of his rights to call him here
and use this as a pretrial discovery for the Department of Justice.
They used the last testimony before the grand jury when he testified
here previously. He is spiked on the horns of a dilemma, Mr. Chair-
man. If he testifies, then he gives away all of the evidence that he
needs at the trial and they have the benefit of his whole defense before
he goes on trial.
On the other hand, if he takes refuge in the fifth amendment, under
recent decisions they can use that against him at the time of the trial
to impeach his credibility. It is a horrible position to put a man under
indictment in. It is the first time, it is the first time, I tliink, in the
history of congressional investigations that this has been done.
That is why I respectfully urge you, Mr. Chairman, once more, to
defer the interrogation of Mr. Beck until after the case is decided by
a court that has authority to decide and adjudicate the issues in this
matter.
2376 IMPROPER ACl^IVITIES IN THE LABOR FIELD
The Chairman. The Chair would make this observation : This com-
mittee, pursuing its duty under the resolution establishing it, has had
a large nmnber of witnesses, as counsel and his client are aware. In
the course of this testimony there have been — and I use that word
advisedly — many destroying statements made and facts brought out
against Mr. Dave Beck.
I tliink it is only fair to at least — and that is the least the commit-
tee can do — oli'er him an opportunity to deny, to explain, or to state
under oath what the facts are if the testimony this committee has
heard is untrue or inaccurate in any way.
Certainly, the committee wants to extend to Mr. Beck tliat oppor-
tunity. He can, upon your advice, of course, decline. But that is a
choice that he must make, either witli your counsel or without it.
I think the committee would be failing in proper courtesy, proper
consideration of his rights if it did not extend him the opportunity.
Mr. Williams. Mr. Chairman, if I understand you correctly, sir,
I understand that Mr. Beck is being given an opportunity to explain
the derogatory statements that other people have made about him
before this committee and if this hearing of Mr. Beck today is being
conducted as a courtesy to Mr. Beck, then I want most graciously to
decline that courtesy.
The Chairman. Well, maybe he does not regard it as a courtesy,
but I believe it is a courtesy to anyone who has been testified against
and about as has Mr. Beck, to then extend them the opportunity to
testify and to refute any damaging testimony that may have been
given.
Mr. Williams. I don't say that, Mr. Chairman, facetiously. I say
it in a spirit of cooperation with tliis committee. And I say it again,
sir, that if the committee conceives that this is a heai'ing that is for
Mr. Beck's benefit, and if he is being accorded a privilege in the eyes
of this committee, then I urge you again, sir, to adjourn his testimony
mitil after the trial in Washington, because we want to waive the
opportunity to explain these cliarges at this time, and oifer an expla-
nation before a jury that has the power and authority and jurisdic-
tion to decide the issue.
The Chairman. You understand there may be many things here
that have been testified to that Avould not be criminal, tliat he could
not be indicted and convicted for, but that might be im})roper. The
Congress might find that such activities are improper for one occu-
pying a position that Mr. Beck occupies, and, therefore, might desire
to have the information to enable it to enact remedial legislation. I
am sure counsel can appreciate that.
Mr. Williams. I just want to be totally candid with the Chair and
tell you that I will advise Mr. Beck throughout the proceedings this
afternoon to decline to answer any questions that I conceive, by my
lights, to be relevant to the tax case in Washington. And I have to
say in all candor again to the Chair that I think that any interroga-
tion on financial matters is relevant to the tax case in Washington.
Again I say, we are willing to waive the rights and courtesies tliat you
have accorded him tliis afternoon.
The Chairman. Are there any comments? Senator Kennedy?
Senator Kennedy. I think in addition to according Mr. Beck the
courtesy, I think Mr. Beck's testimony will be very valuable in pre-
paring us for recommending legislation.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2377
(At this point, Senator Goldwater entered the hearino; room.)
Senator Kennedy. One of the most unfortiniate results that we
have found in this hearino- is that there is no Federal law to pro-
hibit the embezzlement or misappropriation of union funds by union
officials, to prevent them from mixing- union funds with their own
money or to require that union officials who handle great sums be
bonded. There is no Federal law on unions similar to the act of
1940 applicable to investment companies, wdiich prevents officers from
borrowing funds from the general treasury, as Mr. Beck has stated
lie has done, selling tlieir own property to the treasury or receiving
a cut in the profits or a kickback in commissions from transactions
they helped to arrange.
There is no Federal law for unions similar to that governing
stockholders corporations under the Security Act, wdiich permits the
union or its members to recover for the treasury any personal profit
which the officer made as a result of abusing his official position. I
believe that is what Mv. Beck has done.
Finally, there is no Federal law which would enable any agency of
the Government to detect under the present administration of the
law, the mishandling of union funds, such as this committee has
revealed.
Mr. Beck, in my opinion, has moved into all of these areas. Mr.
Beck's testimony is very valuable for this committee, preparing legis-
lative recommendations to the appropriate committees of the Con-
gress in all of these areas.
Mr. WiLLiAiMs. Senator, I have a feeling that his testimony will
not be very valuable to the Congress this afternoon, if you go into
those matters.
Senator Kennedy. I am hopeful that it will be, because I think
statements wdiicli have been made wdiich w^ould indicate that Mr. Beck
has been guilty in many of these fields.
Therefore, I think he ought to have the right to not only correct
the record as far as he is concerned, but also indicate what his actual
actions are so that we can be guided in deciding what legislative
recommendations we should make in this field.
As I have indicated, there is a tremendous gap as far as Federal
control over union officials in misappropriating money. If the total
statute of limitations has i-un out in the States of Oregon or Wash-
ington, and there is no Federal law to prevent it, it may be possible
that Mr. Beck, even tliough I think he has misappropriated union
funds, it may be possible for him, under the loopholes in the present
law, to go free.
I^ut, nevertheless, it is highly improper, and I tliink we want to
close the loophole, if it is not too late in his case.
Mr. Williams. I w^ant Mr. Beck to be helpful to this connnittee,
and that is why I suggested deferring his testimony until the adjudi-
cation of his tax case. But I have no alternative, as his counsel,
other than to ad^nse him to decline to answer questions that I con-
ceive to be relevant to that case.
So I say again. Senator, I am afraid he can't be helpful this after-
noon against the backdrop of a Washington indictment.
The Chairman. Well, let us proceed. Is thei'e any objection to
proceeding? He has the benefit of counsel. Counsel may advise his
client. He may advise his client as to any question he thinks is im-
2378 IMPROPER ACTIVITIES IN THE LABOR FIELD
proper or which might be detrimental to his interests in the case
pending against him.
But there are some otlier questions that I think have no relation to
the case that can be asked, properly.
Senator Ervin. I was going to say that I agree with the ruling made
by the Chair. I do not think Mr. Beck should be interrogated as to
matters which are relevant to the charges in the indictment. How-
ever, I cannot see where there is much relevancy, or necessarily rele-
vancy, between financial transactions in 1954 with 1950, or income re-
ceived in 1954 being relevant to income received or an indictment for
failure to pay the tax on income received in 1950.
Mr. Williams. May I address myself to that. Senator, because I
know you are very sensitive to problems of this kind, from your long
judicial experience.
Senator, there is a situation here where there may be a proration
of income back from 1954 through taxable years that are relevant to
this case.
Senator Ervin. I think you would have to determine that, though,
in each instance, rather than by a blanket ruling.
Mr. Williams. I don't think we should conclude that because a
transaction took place in 1954, that it is not relevant to the tax case
now pending.
Senator Ervin. Well, it may or may not be. I think, as we lawyers
say, each tub will stand on its own bottom and each transaction
on its own bottom.
Senator Gold water. Mr. Chairman?
The Chairman. Senator Goldwater.
Senator Goldwater. Mr. Beck, before you are asked questions that
might prompt your counsel to advise you not to answer, I would just
like to ask one that I think you can answer. It has been reported to-
day in the press that officials of the teamsters international will ask
you to resign.
If they do, will you resign ?
(The witness conferred with his counsel.)
Mr. Beck. My answer to you on that. Senator, is, of course, I know
of no such communication, or there has been nothing of that kind
addressed to me, to the best of my knowledge. I certainly would
not want to comment on that until, in an official way, it came to my
attention.
Senator Goldwater. I saw it in the press, I believe, this morning,
or in this afternoon's papers. If you have not received any official
notification of it, would you be inclined to resign, if that is true?
(The witness conferred with his counsel.)
Mr. Beck. I wouldn't want to express a decision here on it, because
that is a matter of our organization's official action, and I think out
of courtesy to our organization I should not commit myself on any-
thing of that kind until it is officially before me ; if it ever is.
Senator Goldwater. I had one more short question. As long as
you are in a mood to respond, I want to take advantage of it.
I might warm him up for you. Bob.
The AFL-CIO officials have criticized you for using funds for your
own purposes. Without commenting on the rightness or wrongness
of that charge, I would like you to answer the following question :
IMPROPER ACTIVITIES IN THE LABOR FIELD 2379
Do you feel tliat officials of the AFL-CIO have been pursuing the
same tactics they charge you of by the use of union funds in further-
ing their own purposes in the lielct of politics ?
(The witness conferred with his counsel.)
Mr. WiLLL\MS. I am not sure I get the full import of that question,
Senator Goldwater.
Senator Goldwater. Let me put it another way.
Certain officials of the x\FLi-CIO have accused Mr. Beck of using
union funds to further his own personal interest. I am trying to get
from Mr. Beck if he thinks there is any difference in what he has l)een
charged of doing by these men and what these same individuals have
been doing witli union funds in the field of politics to enhance their
position in politics.
Mr. Williams. I have to advise Mr. Beck not to answer that, Sena-
tor, on the ground that the question assumes as facts things that I
don't know to be facts. I think you are getting into an area of specu-
lation, and you are speculating on possible crimes that other people
may have committed. I don't think he should answer that question.
I am going to advise him not to. Not on the fifth amendment, sii-,
because I don't believe it is pertinent to any
Senator Goldwater. I will admit it is not pertinent to anything
here today, but the questions w^e will ask him he will not answer. I
wanted to know what his feelings were. You don't think he should
answer that?
Mr. WiLLiA^rs. I don't think he should, Senator. I am sorry.
Senator Goldwater. I am sorry, too.
The Chairman. All right. The Chair wishes to make this state-
ment : The staff' has made a compilation here of the instances in which
Mr. Beck maj- have misused his authority and position as president
of the Western Conference of Teamsters, a position of trust, and sub-
sequently as president of the International Brotherhood of Teamsters.
I am going to ask counsel of the committee to read to Mr. Beck these
items, one by one. We will give him an opportunity to answer or to
make any comment that he desires.
Counsel, of course, can advise his client if any of the questions he
thinks, under the circumstances, require advice that he take the fifth
amendment. He has a right to do that.
Mr. Williams. I am willing to waive the reading, Mr. Chairman.
We have it here before us, and he can read it himself, in the economy
of time.
The Chairman. This committee has such a task that I don't know
how to begin economizing time now. So I think we better read it. I
want these in the record.
Mr. Williams. I will stipulate that the written sheet may go into
the record, Mr. Senator, if that is the sole purpose of having it read.
The Chairman. I don't know which one he will answer and whicli
one he will not answer.
Mr. Williams. He won't answer any of them, INIr. Chairman.
The Chairman. Can we assume that?
Mr. Williams. Yes, sir.
The Chairman. Well, maybe he will relent on some of them. Let
us see if he will answer this :
Will he tell us today where his son is, Dave Beck, Jr.? He knows
that we have been trying to locate him to serve a subpena on him.
2380 IMPROPER ACTIVITIES IN THE LABOR FIELD
That is a question, Mr. Witness. Will you tell us today where we
may be able to locate your son, Dave Beck, Jr., so we can serve a
subpena on him for his attendance, and so we may procure his
testimony?
(The witness conferred with liis counsel.)
Mr. Beck. I decline to answer, Mr. Chairman, on the grounds that
~n\j answer might tend to incriminate me under the fifth amendment.
The Chairman. I will ask you if you know Mr. Joe McEvoy.
Mr, AViLLiAMS. That question was previously asked of him, Mr.
Chairman, and he invoked the fifth amendment at the time it was
asked of him.
The Chairman. Well, maybe it would not incriminate him today.
I just wanted to find out. We are still hunting for Mr. McEvoy.
iVIr. Beck, do you know Mr. Joe McEvoy, and where the committee
miglit be able to locate liim to serve a subpena upon him, for his
appearance here?
(The witness conferred with his counsel.)
Mr. Be(^k. I decline to answer under the fifth amendment.
Tlie Chairman. Do you know Mr. Fred Verschueren, Sr., and
can you tell us where we might be able to locate him, and serve a
subpena on him to procure his testimony ?
(Tjie witness conferred with his counsel.)
Mr. Beck. I decline to answer, Senator, on the fifth amendment.
The Chair^ian. I believe we asked you the other day if you knew
where Mr. — what is that man's name — where Mr. Norman Gessert
was, did we not? Did I ask you the other day when you testified
or when you were on the witness stand, rather, if you knew Mr.
Norman Gessert and where he was at the time ?
(The witness conferred with his counsel.)
Mr. Beck. Yes, you asked me that.
The Chairman. We have been able to locate him. You could be
helpful to the committee if you don't think it would incriminate you,
or miglit tend to incriminate you, if you could give us any information
about these other witnesses who we are very anxious to locate.
(The witness conferred with his counsel.)
Mr. Beck. No comment, Senator. That is not a question. I have
no comment on it.
The Chairman. I will ask you. Will you help us locate them?
(The witness conferred with his counsel.)
Mr. Beck. I decliue to answer. No.
The Chairman. All right, you answer ''No/- that you won't help
us. Or do you decline ? Which is it ?
Mr. Williams. I advised him to say no, Mr. Chairman. I don't see
why he should become an arm of the committee.
The CiiAiRiMAN. That is all right. I am perfectly willing for him
to answer with his attitude. I just asked vroukl be help us to locate
them.
Mr. 1)ECK. 1 have answered your question. On advice of your ques-
tion, I have answered it "No," Senator.
The Chairman. All right. Let us proceed, then, and see if we can
get any help.
Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Chairman, these first few questions and items
refer to the misappropriation of the union funds. As was stated
IMPROPER ACTIVITIES IN THE LABOR FIELD 2381
earlier in the hearings, this is an important matter to be considered,
because, muler present legishition thei'e is no P^ederal oli'ense for the
theft of union funds. It must be considered by tlie State.
In the State of Washington, tlie statute of limitations is 3 years.
No. 1, based on evidence misappropriation of teamsters funds by Dave
I^eck, pay payments to John Lindsay and John Lindsay Construction
Co. in connection with work done on his own real-estate development
and renovations on his home in Seattle.
The Chairman. We have testimony, Mr. Beck, along those lines.
Will you give us any information about it^
Mr. Williams. Mr. Chairman, the very first question invades the
tax case that is now pending out in the State of Washington. I don't
understand how the representation could be made that he wasn't going
to be interrogated on matters germane to the tax case, when this very
first question
Mr. Kennedy. Let us take it from 1951. We can do that very
easily. Let us take it from 1951 and 1952, the misappropriation of
teamsters funds by payments to John Lindsay and John Lindsay
Construction Co. in connection with work done on Dave Beck's own
real-estate development and renovations on his home in Seattle.
Mr. Williams. This I conceive to be an invasion of what I under-
stood the purpose of the committee was this afternoon, not to ask
questions that were relevant to the tax case. This is highly relevant.
The fact that you qualify it by saying 1951 and 1952 doesn't eliminate
the bad feature of the question.
The Chairman. My understanding is, if I ain correct — and if I am
not correct, I would like to be corrected now — my understanding is
that the indictment for tax evasion is for the year 1950. Therefore,
1 do not want any question asked, and I so admonish counsel, I do
not want any question asked relating to his income for 1950.
But any question here, and, Mr. Counsel, observe as you go along,
any question, or any statement here of testimony that the committee
has received, that is prior to January 1, 1951, 1 do not want the witness
asked about.
Mr. Kennedy, We have matters prior to 1950 that we w^ould like to
ask him about also.
The Chairman. Anything prior to 1950 that does not relate to his
income.
But income only beginning with January 1, 1951.
(The w^itness conferred wuth his counsel.)
Mr. Kennedy. The question is still before the committee.
Th& Chairman. The question is on the misappropriation of team-
sters funds by payments to John Lindsay and John Lindsay Con-
struction Co. in connection with work done on his own real-estate
development and renovations on his home in Seattle, all since the year,
the calendar year, 1950.
Mr. Williams. Is the question, Mr. Chairman, whether he misap-
pro])riated money ? Is that what the question is ?
The Chairman. Yes, sir. I am asking him if he has any comment
on it. The committee has heard testimony to that effect.
(The witness conferred with his counsel.)
Mr. Beck. No, Senator, I have no conunent. I decline to answei-
.on the fifth amendment.
2382 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Will you answer any questions regarding those
transactions ?
M.r Beck. No, Senator, I will not answer any of those questions. I
will decline to answer under the amendment.
The Chairman. Under what amendment?
Mr. Beck. The fifth amendment.
The Chairman. You will decline ?
If I ask you the question, Did you misappropriate any money in con-
nection with payments to John Lindsay and John Lindsay Construc-
tion Co. in connection with work done on your real-estate development
and renovations on your home at any time since January 1, 1951 ?
Mr. Beck. I will decline to answer on the same basis.
The Chairman. You mean you are taking the fifth amendment on
it ; is that correct ?
Mr. Beck. On the same basis. Senator.
The Chairman. I do not want the basis
Mr. Beck. I said "Yes."
The Chairman. All right. Proceed, Counsel.
Mr. Kennedy. Mr. Chairman, we find that Mr. Dave Beck misap-
propriated teamster funds by direct payments to Nathan Sheffer-
man from teamster accounts for payment of Beck's personal bills,
starting on January 1, 1951.
(The witness conferred with his counsel.)
The Chairman. Do you wish to make any comment about it, Mr.
Beck?
Mr. Beck. No comment, Mr. Chairman.
Senator Ervin. Mr. Chairman, if I niny make a suggestion to coun-
sel, I would suggest that counsel ask Mr. Beck whether or not he per-
mitted union funds to be used to pay any personal accounts to Nathan
Shefferman instead of assuming that it is misappropriation. It may
be that Air. Beck honestly permitted such use of union funds.
The Chairman. That" is possible.
All right, Mr. Kennedy, you may interrogate him in that mamier
Mr. Kennedy. Were there any union funds used to pay your per-
sonal bills ?
(The witness conferred with is coimsel.)
Mr. Beck. I decline to answer on the gi-ounds of the fifth amend-
ment.
Mr. Kennedy. Were any union funds used to pay Mr. Nathan Shef-
ferman for paying your personal bills?
Mr. Beck. I decline to answer on the fifth amendment.
Mr. Kennedy. Do you think that covers it, Senator Ervin ^ *
Senator Ervin. Yes. I was just asking whether this fact occurred
because it may be that some of the facts may have occurred and he
may have some reasonable explanation which would disprove any
theory of misappropriation.
Mr. Kennedy. In that connection, do you have anything to say
about the funds that went from the union"^ treasury in Seattle to Mr.
Nathan Shefferman ?
Mr. Beck. I decline to answer on the fifth amendment.
Mr. Kennedy. I would like to ask you also about the use of team-
ster funds, or the misappropriation of teamster fimds, by indirect pay-
ments from teamster funds in the Seattle teamster accounts in Jjos
IMPROPER ACTIVITIES IN THE LABOR FIELD 2383
Aiigeles, and then payments to Nathan Shefferman in payment of your
own personal bills.
Was that procedure followed by you, Mr. Beck ?
(The witness conferred with his counsel.)
Mr. Beck. I decline to answer on the fifth amendment.
Mr. IvENNEDT. And were the funds of the teamster fund taken
from the international miion here in Washington to pay your own
personal bills?
Mr. Beck. I decline to answer on the fifth amendment.
Mr. Kennedy. And were teamster funds taken from the Los An-
geles local to buy an automobile for you and then the Los Angeles
local reimbursed by the teamster union funds in Seattle ?
Mr. Beck. I decline to answer on the fifth amendment.
Mr. I^NNEDY. Were any of the funds taken out of the teamsters
union in Seattle and put in your own personal bank account since
January 1,1951?
Mr. Beck. I decline to answer on the fifth amendment.
Mr. I^NNEDY. And were cashiers checks used for your own per-
sonal benefits, since Januaiy 1, 1951 ?
Mr. Beck. I decline to answer on the fifth amendment.
Mr. Williams. Mr. Chairman, I will stipulate for the record that
the witness will assert his rights under the Constitution to each of
these questions which Mr. Kennedy is now reading. He is reading
all 52 of them.
The Chairman. Since counsel stipulates that these questions are
being asked, the Chair will order all of them inserted in the record
at this point.
I understand that counsel is going to advise his client, and the client
is going to act upon that advice and decline to answer all questions
pertaining to these matters by invoking the fifth amendment ?
Mr. Williams. That is right, sir. We will so stipulate.
(Questions referred to follow :)
Dave Beck — Some 52 Ways in Which Dave Beck Misused His Authority,
Position, and Trust as President of the Western Conference of Team-
sters AND Subsequently as President of the International Brotherhood
OF Teamsters
1. Misappropriation of teamster funds by payments to John Lindsay and John
Lindsay Construction Co. in connection with work done on his own real-estate
development and renovations on his home in Seattle.
2. Misappropriation of teamster funds by direct payments to Nathan Sheffer-
man from teamster accounts for payment of Beck's personal bills.
3. Misappropriation of teamster funds by indirect payments from teamster
funds in the Seattle teamsters accounts in Los Angeles ; thence, payments to
Nathan Shefferman in payments of personal bills of Dave Beck.
4. Misappropriation of teamster funds by payments from the international
union to Nathan Shefferman for the personal bills of Dave Beck.
5. Misappropriation of teamster funds by the purchase of a personal auto-
mobile paid by Los Angeles teamsters local, this local was later reimbursed with
funds from the Western Conference of Teamsters.
6. Misappropriation of teamster funds by using these funds to pay Beck's
own personal bank loan.
7. Misappropriation of teamster funds in connection with the purchase of
cashier checks, which purchasers were charged to teamster bank accounts and
the proceeds used for his personal use.
8. Misappropriation of teamster funds by causing the Jount Council No. 28
Building Association to obtain loans, the proceeds of which went directly to
Beck's bank account.
89330— 57— pt. 7 26
2384 IMPROPER ACTIVITIES IN THE LABOR FIELD
!). OideriufT the payment of teamster funds to two news reporters writing
his biography.
10. The funneling of some $9 million of teamster funds through the National
Mortgage Co., in which a relative purchased a one-third interest with money
received from Beck.
11. The ol)taining of teamster insurance for an insuranc-e ccmipany in which
his family had an intei-est.
12. Obtaining a share of the commission on the purchase of a mortgage from
the Lanphar Co. by the teamsters union.
13. Obtaining a share of conimission on purchase of Fcderiil National Mortgage
Insurance Agency nun-tgages with teamster funds through National Mortgage Co.
14. Obtaining share of conniiission on purchase of ^~> miscellaneous loans with
teamster funds tlirongh National Mortgage Co.
15. Obtaining teamster funds to purchase contracts which were then sold to
the Ray Lehen^'y memorial fund at a considerable profit to himself.
16. The acquisition of land at Parkwood No. 1 in Snohomish County, Wash.,
and the immediate sale to the Lintcm Construction Co. at a considerably higher
price, the ultimate financing lieing handled with teamster funds.
17. The acquisition of land at Firwood Park in Snohomish County, Wash.,
and its immediate sale to the Linton Construction Co. at a substantial profit,
the ultimate financing being handled with teamster funds.
IS. The obtaining for a friend and business partner, brokerage commissions
paid by T. J. P.ettes, Lambrecht Realty Co., A. D. Robbs, and the PEG Invest-
ment Co., which concerns received teamster funds in connection with sale of
mortgages.
19. Borrowing .$273,000 at ^V^ percent interest from the Occidental Life In-
surance Co., which company was the insurer for the Western Conference of
Teamsters.
20. Sulisequently borrowing another .$40,000 at 31/2 rerc'ent interest from the
Occidental Life Insurance Co.
21. For his own personal benefit and without cost, requested the Occidental
Life Insurance Co. to make an appraisal of the Vista Delmar property.
22. For his own personal benefit, requested the Occidental Life Insurance Go.
to make an appraisal of the Griflith-Dulien property in Los Angeles.
23. Purchase of property adjoining teamster building in Los Angeles through
the facilities of the Occidental I>ife Insiirance Co.
24. Sale of the adjacent property to the Los Angeles teamsters headquarters
some 8 months later for .$r),000 personal benefit.
2.5. Borrowing at various times substantial sums of money from the Seattle
First National Bank at 3 and 31/0 percent interest, which Beck's own financial
counsel stated was an unusually favorable transaction for Beck and necessary
for the bank because it was a depository for teamster funds.
26. The purchase of insurance for personal use paid for by teamster funds.
27. The payment of relatives' expenses with teamsters funds at 1952 con-
vention.
28. The purchase of fui-nifure and other items for the teamster union tlirongh
a company in which his family had a financial interest.
29. His personal activity in the sale of toy trucks to tlie teamster union for
the financial benefit of his family.
30. The obtaining of funds from the Fruehauf Trailer Co. and the Associated
Transport Co., a New York ti'ucking company vrith whom the teamsters have
contracts, for his family's toy truck business.
31. The obtaining of a part of a .$200,000 loan from the Associated Trans-
port Co.
32. The obtaining of part of a .$200,000 loan from the Fruehauf Trailer Co.
after the teamsters had loaned that company .$1,.500,000.
33. The free transportation of boat for his son from Detroit, Mich., to Seattle,
Wash., by the Fruehauf Trailer Co.
34. The free use of an automobile and a chauffeu.r for his personal trans-
poi-tafion in visiting in Europe provided by the Fruehauf Trailer Co.
35. The free use of a chauffeur and car provided by Fruehauf Trailer Co.
for his niece and coujpanion when they were touring Europe.
.36. The free use of the P^ruehauf Trailer Co.'s airplane on 3 or 4 occasions.
37. The free use of four refrigerated trailers obtained from the Fruehauf
Trailer Co. for the benefit of the Sunset Distributing Co. in which his family
has an interest.
38. The payment with teamsters' funds of transportation fen- his niece and
companions from Paris to London.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2385
30. The purchase of hind adjoining the teamsters' buiUling and subsequently
leasing the same for parking puriwses to the teaiusters.
40. The channeling of more than tf;it)O,000 of teamster business to a service
station owned by himself and Brewster.
41. The purchase of land adjoining the Seattle teamsters' building and the
stibseqxient sale of a portion thereof at an excessively high price to the teamsters
union.
42. The obtaining of the rights to distribute Anheuser-Busch beer by K. & L.
Beverage Co. in the State of Washington and Alaska. During this period of
time at least 50 percent of the employees of Anheuser-Busch were members of
the teamsters union.
43. The use of the union's power to have Dave Beck, Jr. made president of
the K. & L. Beverage Co.
44. Mr. Beck's intercession in a strike of other unions for the benefit of and
at the request of the Anheuser-Busch Co.
45. The contacting of Occidental Life Insurance Co. and other concerns for
the purpose of getting business for National Mortgage. Inc.
46. His insistence that a fee be paid to Donol Hedlund in connection with
the St. Louis teamster building.
47. The sharing in the $12,000 commission paid to Nathan ShefCerman in
connection with the purchase of land for the teamsters in Washington, D. C.
48. Allowing the teamsters to pay a fee to Nathan Shefferman for allegedly
performing the services of effecting a savings in the teamsters in the accpiisition
of the land for its Washington, D. C. building while knowing no such services
were performed.
49. Use of Sam Basset, attorney for the teamsters and paid for by them,
for his own personal benefit.
50. Use of Simon Wampoid, attorney for the teamsters and paid for by them,
for his own personal benefit.
51. The payment of over $15,000 of union funds to cover the salary and ex-
penses of Stewart Krieger during the time that he was representing Beck at
the K. & L. Distributing Co.
52. The use of the International auditor, Fred Verschueren, Sr., in connection
with the operation of personal business.
The Chairman. And any other questions that we wish to ask —
some of tlieni seem to bs very important. I had 1 or 2 I certainly
wanted to ask. I.iet me ask you, Mr. Beck, have you looked through
all of these statements, these 52 statements? Do you have copies of
them? ^
Mr. Beck. Yes, I have. Senator, and I have run through all of
them.
The Chairman. You have read all of them ?
Mr. Beck. Yes, Senator, I have gone through all of tliem. I think
1 liuve read them all.
Tlie Chairman. You are familiar with them ?
Mr. Beck. I think I have; yes.
The Chairman. You familiarized yourself with it. All right. We
had some testimony liere that it seems you would want to give some
explanation about. It has nothing to do with your income tax in
1950.
Tlie transaction occurred considerably later than that and could
not in any way be involved. We had some te.stimony liere, and I
think you may be familiar with it, that you own a lialf interest in
^•ertain mortgages that you sold to Mrs. Leheney. Is that correct?
Mr. Kennedy. That is correct.
The (^hairman. And at a profit of something over $11,000, a profit
to you and your associate in that transaction, and that these mort-
gages were purchased by a fund raised from union members, dona-
tions from union members, as a trust fund or memorial fund, to ha
2386 IMPROPER ACTIVITIES IN THE LABOR FIELD
used for Mrs. Leheney's benefit by reason of the death of her husband
and that you actually acted as a trustee of those funds.
Do you wish to make any comment about that transaction ?
(The witness conferred with his counsel.)
Mr. Beck. No, I do not.
The Chairman. Did you use those trust funds to purchase mort-
gages in which you had an interest and thereby, make a financial profit
from it?
(The witness conferred with his counsel.)
Mr. Beck. I decline to answer under the fifth amendment.
The Chairman. Did you appraise Mrs. Leheney of the fact that
you were buying your own mortgages with that fund that you were
making a profit therefrom ?
Mr. Beck. I decline to answer under the fifth amendment.
The Chairman. Are there any further questions ?
(Present at this point in the proceedings were Senators McClellan^
Kennedy, Ervin, McNamara, Mundt, Gold water, and Curtis.)
Senator Curtis. Mr. Beck, I have utmost confidence in our system of
courts to handle matters and punish the guilty and protect the inno-
cent. What I have in mind now, that I want to inquire about has no
relation to any of your financial transactions whatever, but is in pur-
suance of the resolution creating this committee and for legislative
purposes.
How many members are there in the Teamsters International ?
Mr. Beck. Well, the most accurate answer I think I could give to it
would be that at the present moment I would say there is approxi-
mately one million, five hundred and some thousand members. I
predicate that on the basis that we pay tax to the American Federation
of Labor, CIO, on actual dues collected.
So we collected dues in the month of April, I think, on $1,389,000
and it is reasonable to suppose that at all times there are some delin-
quencies. So I would estimate that our membership does actually
run in excess of 1,500,000,
Senator Curtis. You have had considerable growth, have you?
Mr. Beck. In the month of April of this year as against April of
last year, we gained 106,000 members and for the 3 months of Febru-
ary, March, and April of this year our average growth over the same
3 months of 1956 is about 59,000.
Senator Cuetis. Is that growth due to increased employment by
employers with whom you have a contract or is it by reason of an
increase in the number of contracts you have?
Mr. Beck. It is without question due to increased organizing of
personnel because our business situation in the United States has not
measured up in the last 3 months, in my personal judgment, our indus-
tries, as good as it had previous to that time.
Senator Curtis. Now, with how many employers approximately do
the Teamsters International liave contracts?
Mr. Beck. Well, Senator, it would be an absolute impossibility with-
out a. very careful survey.
Senator Curtis. Can you give me an estimate ?
Mr. Beck. I couldn't give you an estimate. It would run up into
the tens of thousands of employers in the country. We are different
than most organizations, and we do not deal with just large groups.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2387
We organize anywhere from 3 people up to 5,000 people and it
would represent in my opinion, tens of thousands of contractors.
Senator Curtis. Maybe twenty or thirty thousand ?
Mr. Beck. Yes, very easily, and more, I think.
Senator Curtis. Now, are any of these contracts what is known as
union-shop contracts or other contracts which contain some sort of
compulsory union membership maintenance clauses?
Mr. Beck. In the area of that particular question, we could be
open to disagreement. In the greater percentage of cases they do
contain clauses by mutual agreement that provide for the individual
employee becoming a member of the union within a specified period
of time.
Senator Curtis. Well, the law requires that it must be done by
mutual consent ; is that right ?
Mr. Beck. Well, all of our contracts, of course, in my judgment are
in accord with the law.
Senator Curtis. What percent of your contracts would you say
do have the union-shop contract ?
Mr. Beck. In percentage. Senator, I would not be able to answer
you, but I would say definitely the overwhelming percentage. I would
guess it at better than 85 percent.
Senator Curtis. Well now, among those that do not have the union-
shop contract, can you name one?
Mr, Beck. Where we do not have the union-shop contract?
Senator Curtis. Yes.
Mr. Beck. Yes, I can. I would name Montgomery Ward for one.
Sears, Roebuck for another, a number of the oil companies, I could
name a number of them.
Senator Curtis. But the overwhelming number do have the union-
shop contract?
Mr. Beck. Yes, sir.
Senator Curtis. Now, by union-shop contract, that is a contract
where the employee is not required to be a member of the union when
he gets his job, but he must join the union within a specified time, 30
days, in order to continue in his job ; is that right ?
Mr. Beck. That is right, and so it does not in any sense violate any
national or State laws.
Senator Curtis. I am inquiring for the purpose of legislation, and
not in reference to violation of law.
Mr. Beck. I understand.
Senator Curtis. Now, if the employee fails to pay his pnion dues,
then under the union-shop contract he no longer has a job; is that
right?
Mr. Beck. Well, I wouldn't go that far. I would say that when
we specify, and I do specify that all of these contracts to the best
of my knowledge are in concert with the law, that specific provision
in the contract could not be violative of the law. So it would be
operative only in the degree that it did not violate any law.
Senator Curtis. Well, the law provides that, does it not?
Mr. Beck. If it does, then that answers it. That is what I am
trying to express to you that in every instance we try to maintain that
position, but we must, of course, work in concert and harmony with
the law.
2388 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. And the law permits you in the majority of your
contracts, maybe 85 percent of them, to require that the man stay in
the union and pay his dues to continue his employment, is that correct?
Mr. Beck. Yes, and I think as far as the law is concerned, it would
also apply in the other 15 percent, except that in the instance of the
15 percent, in a percentage of that 15 percent, there may be an econo-
mic situation involved that this situation of actually using a work
stoppage and exercising economic pressure, we would not be able to
secure that fact.
In just sound business judgment, it does not in our opinion justify
taking that procedure. So some part of that percentage of 15 percent
would be covered by that.
Senator Curtis. Well, now, how long have you been in the labor
movement ?
Mr. Beck. I have been in the labor movement since 1916.
Senator Curtis. Now, I want to ask you, under existing Federal
statutes if the workers or the members of a union working under a
union-shop contract lose confidence in their officers and have questions
in their minds about the financial atf airs of their union, can they with-
draw from the union without losing their jobs?
(The witness conferred with his counsel.)
Mr. Beck. My answer to that, Senator, would be that the member-
ship of our international union and in its various organizations of
affiliation, would proceed through the macliinery of our international
constitution that has been set up by a convention action, the same as I
think they would proceed through the bar association or througli the
medical profession, or any fraternity or a like organization.
Senator Curtis. Now, will you answer my question? I asked you
if under existing statutes, if a worker, a members of a union working
under a contract where it is a union-shop contract, loses confidence in
his union leaders and has questions in his mind about the handling of
his dues, the financial affiairs of his union, can he withdraw from the
union and cease paying dues without losing his job?
Mr. Beck. He can procede through the processes of our interna-
tional constitution.
Senator Curtis. I did not ask you that.
Mr. Beck. I am answering you that of course I administer the in-
ternational constitution and I don't write it. I am telling you that
each and every individual member, when he joins our international
organization the same as lie would the bar association or the medical
association comes under the rules and regulations of the organiza-
tion's constitution and bylaws.
So he Avould proceed through those as he would in these and similar
questions in other organizations.
Senator Curtis. Now, Mr. Beck, I have been very fair with you
and I have not made mention of your union and I have not asked you
a hypothetical question about your union. I have asked you the
simple question: If the worker in any union, a union member,
employed in a place where they have a union-shop contract, if he
loses confidence in his union leaders and he has questions in his mind
about the handling of the dues he pays in, the financial transactions
of the union, can be withdraw from the union and cease paying dues
without losing his job?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2389
Now, that is a simple question and you know the ansAver and I wish
you would give me a yes or no.
Mr. Beck. Now, just a minute. Senator. I do not intend to give
3'ou a yes or no answer, if in my judgment a yes or no answer is not a
correct answer. I have tried to answer your question and I will try
again.
He would, I said, under those conditions, follow the procedure of
our international constitution of which he is a part. In my opinion,
he would not lose his job unless he acted in a manner conflicting with
the constitution that he was sworn to observe.
Then, after that he would have the right to go on into the courts,
as any other citizen has.
Senator Curtis. As a matter of fact, Mr. Beck, you know that any
member working under a union-shop contract if he withdraws from
the union and ceases paying his dues, he loses his job.
Now, that is the purpose of a union-shop contract, is it not?
Mr. Beck. The purpose of a union-shop contract. Senator, is to
have all of those that are in the employ carry an equal burden in the
administration of the organization that got the increases and the
conditions for him.
Senator Curtis. All right, and to reach that objective which you
have just mentioned, you require their continuation in the union and
their payment of dues as a condition for their continuation in the
job, is that not right?
Mr. Beck. If it is a part of the contract.
Senator Curtis. That is what I have been trying to get out of you.
Mr. Beck. Certainly we do, and the contract speaks for itself.
Senator Curtis. That leaves the workers of the country in a situa-
tion where they cannot police their own unions and protest against
financial mishandling of their own dues by withdrawing from an
organization in which they have no confidence, without losing their
jol); isn't that correct?
Mr. Beck. No, I do not think that is correct.
Senator Curtis. Well, I think it is.
Mr. Beck. It is a difi'ejvnce of opinion.
Senator Curtis. Noav, Mr. Beck, what do you understand by a
secondary boycott ?
Mr. Beck, "what do I understand by a secondary boycott?
Senator Curtis. What is that?
Mr. Beck. What is one ?
Senator Curtis. Yes.
Mr. Beck. Well, I can name many of them. But my understanding
of the general phrase of a secondary boycott is where one who is not
an immediate participant in a dispute uses economic action in asso-
ciation with the original dispute.
Senator Curtis, (^an you give us an illustration of a secondary
boycott that has taken place in the TTnited States in recent years?
Mr. Beck. No: ofthand I don't think I can.
Senator Curtis. You can't remember any?
Mr. Beck. No. Can you remember one, an.d if you can remember
one I will try and discuss it. Can you remember one ?
Senator Curtis. Several.
Mr. Beck. If you name one, I will tiy and see whether in my opin-
ion it is a secondarv bovcott.
2390 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. I am referring to the secondary boycott that was
conducted against the Coffee Transfer in the State of Nebraska with-
in the hast 2 years. Do you know about that ?
Mr. Beck. No, I do not.
Senator Curtis. As a matter of fact the teamsters were involved
in it. Did you know that ?
Mr. Beck. No, I did not know that. We have thousands and
thousands of contracts and of course I can't keep track of all of those
individual contracts.
Senator Curtis. You never discussed them with Mr. Hotfa?
Mr. Beck. No, I have never discussed them with Mr. Iloffa.
Senator Curtis. He was out there ; was he not ?
Mr. Beck. He handles for our .international union, general super-
vision over, and I am going to correct that, he does not do it for our
international union, he is the chairman of the Central States con-
ference, which embodies the State of Nebraska, and so he would
undoubtedly know about it.
Senator Curtis. Well now, the law prohibits the applying of pres-
sure on the employees, the business establishment where they are not
parties to the labor dispute ; is that not right ?
Mr. Beck. The law provides that ?
Senator Curtis. The law prohibits it.
Mr. Beck. Prohibits it?
Senator Curtis. Yes.
Mr. Beck. What is your question ?
Senator Curtis. The law prohibits the applying of economic pres-
sure or any pressure against employees in a third concern where they
are not involved in a labor dispute ; is that not right ?
Mr. Beck. Well, I am not prepared offhand to say whether that is
right or not, but I will say this : If the law prohibits it, then we are
susceptible of course to the same courts as anyone else would be in the
application of the law.
Senator Curtis. But the present law does not prohibit the applying
of pressure upon the employer in an establishment that is a third party,
and not a party to a labor dispute; is that not correct?
Mr. Beck. Well, there is a legal question involved, and I don't think
that I am competent at the moment to answer it.
Senator Curtis. Are you in favor of secondary boycotts ?
Mr. Beck. Yes, I am in favor of secondary boycotts.
Senator Curtis. Will you define them again ? I want to make sure
that I understand what you believe by them.
Mr. Beck. Well, I don't know as I can use the exact language, but
I say that in my opinion the general understanding of a secondary
boycott is where one uses an economic action, secondary to the original
parties to the dispute.
Senator Curtis. In other words, that is pressure applied upon a
concern that is not a party to the dispute, is that not right?
Mr. Beck. Well, I don't like the term "pressure," and I would rather
use economic action.
Senator Curtis. That is where they apply economic action to some-
body that is not a party to the labor dispute, is that not right?
Mr. Beck. No, I don't think so. I don't think that at all.
Senator Curtis. A^Hiat do you think it is ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2391
Mr. Beck. Well, I personally do not agree upon perhaps your opin-
ion to which of course I accord you full right and privilege tliat you
have for it, I do not agree with you at all that you do not have to caiTy,
if we want to progress, in the welfare of the labor movement, across
its whole sphere of operation in all of it, in any opinion we have to
exercise economic action right straight across its entire field of opera-
tion.
In my opinion, for that reason, secondary boycotts in the overwhelm-
ing percentage of instances are in my opinion justified and legal and
right.
Senator Curtis. A few minutes ago you testified about your growth.
Has any of that growth been brought about by secondary boycotts?
Mr. Beck. I don't think so, as it pertains to the teamsters. The
teamsters in my personal opinion, Senator, and now you have asked
me a question that I want to answeer very honestly. In my opinion
the economic secondary action of the teamsters organization in the
overwhelming percentage of instances, let us say in my opinion 98
percent, is helping someone else organize and not helping the team-
sters organize.
Senator Curtis. You mean other unions engaged in secondary
boycotts ?
Mr. Beck. Do I say they are ?
Senator Curtis. Do they?
Mr. Beck. I think so ; surely.
Senator Curtis. What other unions?
Mr. Beck. I think every union could be. For instance, if a dispute
arose at some newspaper plant, revolving around the mailer's organ-
isation and the printers or stereotypers or photoengrayers or anyone
else, and became a party to that dispute by virtue of aiding or assisting
in the economic action on it, they would be engaging in a secondary
boycott action. That is not the teamsters.
Senator Curtis. And that practice is engaged in by a number of
unions, in both the CIO and the AFL ; is that correct ?
Mr. Beck. Oh, certainly.
Senator Curtis. Mr. Beck, while I have not agreed with all of your
answers, I think maybe I ought to quit. I have had a perfect record
with you. You have answered all of my questions. I am a bit curious
and I want to ask you one more.
You have declined to answer on fifth amendment grounds or other-
wise, a number of questions, and I just want to ask you, has that been
for the purpose of protecting anyone other than yourself?
Mr. Beck. I decline to answer tliat question.
Senator Curtis. What other people might you have in mind that you
want to protect?
Mr. Beck. I must decline to answer that question. Senator ?
Senator Curtis. I see I asked two too many.
Mr. Beck. I want to say, now. Senator, that I would like to answer
many more questions. I am not answering questions because I am fol-
lowing advice of my counsel. I accord you or any other member of the
committee or Congress the right to disagree with me, and me with you.
At any time that you would like to, as I said to Senator Goldwater
some time ago, I would be delighted to come to your office and discuss
any of these questions with you for any value that might possibly
2392 IMPROPER ACTIVITIES IN THE LABOR FIELD
accrue from any information that I may have out of my time in
the trade-nnion movement.
Senator Curtis. Mr. Beck, although I have not agreed with all of
your answers, and neither liave you admitted all of the facts as I see
them, I think you have established the point that whenever we have a
system in this country where individuals are not free to either join or
withdraw from a union without losing their jobs, it gives an oppor-
tunity for union officials to exert their power and to use their funds
and workers who have to earn that money have no chance to protest
by withdrawing from the organization.
The Chairman. Senator Kennedy.
Senator Kennedy. Mr. Beck, how many locals are there in the team-
sters? There are about 800 ?
Mr. Beck. Senator, I would say around nine hundred and souie,
and maybe 900 or eight or nine hundred and ten.
Senator Kennedy. Now the records we have gotten from the team-
sters organization shows that about 12 percent of those are in trustee-
ship. Does that fit with your memory? It says in 1957, 108 locals
out of 876 were in trusteeship, which is 12 percent. Now, looking
at the steelworkers, out of 2,925, 18 were under administration. Of
the IBEW, 1,718 locals, 9 were under trusteeship. United Mine
Workers, three oi" four hundred locals and one was under trusteeship.
The machinists, AFL, 2,100 locals, and about 4 were under
trusteeship.
Of the lUE, 439 locals, none were under trusteeship.
Now of these 112 that were under trusteeship, or perhaps 12 percent
of your total, about 28 or 29 have been under trusteeship for 5 years
or more. Now, I would like to ask you a question, and I see where
Mr. Hoff a has the administration of 16 locals, how many people might
there be in each local as an average? Say you have 800 throughout
the country and you have 1,500,000 members.
Mr. Beck. Well, Senator, I really can't answer that.
Senator Kennedy. It would be about 2,000 ; would it not ?
Mr. Beck. But I would like to answer your question to trusteeships.
Senator Kennedy. I would like to hear it, becatise I do think it
raises the question of the rights of the members who are involved in
a trusteeship ])roceeding.
Mr. Beck. Senator, I honestly and conscientiously feel that unless
you understood the physical makeup of the teamsters international
organization, and what I briefly referred to before, that we work with
thousands and thousands of employers as against other organizations
of large membership who work for, let us say, less than 100 employers,
there is no way of comparing in any sense the situation revolving
around trusteeshi]Ds.
As to the tenure and the type of work, we are not a skilled organ-
ization. No. 1. And by virtue of it, that has a very great effect.
Now the international union does not establish trusteeships unless
in their opinion it is in the interest of the general membership. Now
others may disagree with us as to when and under what conditions
trusteeships are continued.
It is an expensive operation for the international union to start
with.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2393
Senator Kennedy. One of the locals in Seattle has been in trustee-
^liip for 12 years. In the case of trusteeships, who appoints the
officers ?
Mr. Beck. In the case of trusteeship, the trustee a]ipoints tlie
officers.
Senator Kennedy. ^Mio appoints the trust-ee^
Mr. Beck. The president of the international union.
Senator Kennedy. That is you?
Mr. Beck. That is right.
Senator Kennedy. In other words, 1*2 percent of all of the teamster
locals are under the control of trustees who are ai)])ointed by you?
Mi\ Beck. Oh, no. The one you just got through talking about,
you said there was one at Seattle for 1*2 years. I have only been
president for 41/0 years.
Senator Kennedy. Who would appoint the trustee in the other
cases? Who appointed Mr. Hotfa trustee of IG?
Mr. Beck. I couldn't answer that, because I don't know at what
date the trusteeship was put in. It might be President Tobin or
myself.
Senator Kennedy. Well, then, you have stated in the case of Seattle
you did, and what about in other sections of the country?
Mr. Beck. I didn't state that in the case of Seattle. You said it
was in 12 years, and so I could not have done it.
Senator Kennedy. Why did ^^ou not tell me then who appoints the
trustees in these 112 locals which are now in trusteeship.
Mr. Beck. I cannot answer, but I will be glad to look at the 112
and tell you exactly.
Senator Kennedy. Who has the authority under the constitution.?
Mr. Beck. The president.
Senator Kennedy. Of what?
Mr. Beck. Of the international union.
Senator Kennedy. Who is that?
Mr. Beck. Myself.
Senator Kennedy-. Well, then, it is either you or your predecessor
who appointed the trustees.
Mr. Beck. That is right, either the predecessor or myself.
Senator Kennedy. Now, of these, hoAv long have you been presi-
dent ?
Mr. Beck. Four and a half years.
Senator KENNEDY^ Now, only 27 of these have been in trusteeship
for 5 years or more, and so I would gather than as to the rest of them
that you appointed the trustees?
Mr. Beck. That is right, I have appointed them.
Senator Kennedy'. You can remove them from trusteeship ?
Mr. Beck. Can I remove them from trusteeship? Yes.
Senator Kennedy. Can you tell me vrhy you feel it necessary that
a trustee be kept over a local, and wliy you feel it is not possible for
the members to run tlieir own atl'airs and why it is necessary to keep
some 27 or 28 in trusteeship for longer than 5 years when no other
large union comparable to yours has any camparable experience?
Mr. Beck. Well, it is my personal opinion
Senator Kennedy. May I add, do you feel that you have demon-
strated your ability to handle these matters much greater than the
abilitv of the members of these locals ?
2394 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Beck. Let me be sure I get your question.
Senator Kennedy, All right. I will make it in two parts.
The first part is to tell me why it is necessary for the president of
the teamsters, either you or Mr. Tobin, to appoint trustees to keep
unions in trusteeship for 5 years or longer, when no other comparable
union has a comparable record. Could you answer that first and then
we will get to the second part ?
Mr. Beck. In my opinion, there is no other union that you can
possibly compare with the teamsters union on the field of trusteeships.
I stated that awhile ago. That is because of the tremendous number
of employers involved, and the physical conditions surrounding the
operation.
Senator Kennedy. Why is it not possible after they have been in
trusteesliip 5 years? We had a witness here who stated that he was
trustee of a union and did not know why it had been put in trustee-
ship. He had been trustee for 3 or 4 years of a teamster local on the
west coast. "Wliy is it not possible to turn back the affairs to the mem-
bers after 5 years in trusteeship ?
Mr. Beck. I could name many instances, and I was going to say that
a few minutes ago. If I could sit down with you I would be glad to
do it on the individual unions that are in trusteeship, and in my opin-
ion I would show you immediately where the best interests of the
organization, the employer, the industry, and our economic system
was in better condition by virtue of a continuity of the trusteeship.
Senator Ivennedy. In other words, that the trustee should be under
the jurisdiction of the president and not of the jurisdiction of the
members as to the affairs of the union ?
Mr. Beck. Until the affairs of the union were properly straight-
ened out.
Senator Kennedy. You do not feel that they are able to demonstrate
that in 5 years, that a local in Seattle has not been able to demonstrate
that in 12 years ?
Mr. Beck. I know instances in Seattle and elsewhere where they
have not demonstrated it in 5 years, and where, in my opinion, if the
trusteeships had been removed it would have created work stoppages,
chaos in the industry, and severe indictment of public welfare, and
contradictory to the interests of the membership and not only the
union involved, but those who might be drawn into labor dispute by
virtue of it.
Senator Ivennedy. And you feel that you have demonstrated as
president of the union that you are more competent and more de-
pendable and more responsible than the members themselves to run
the affairs of these unions, locals ?
Mr, Beck. I don't think that is a fair question at all, and it is a
leading question. In my opinion it is a loaded question.
Senator Kennedy, You do not have to answer it,
Mr. Beck. I don't think that I have any superior ability what-
soever. I only say that I make decisions based upon the facts given to
me, and I do it honestly to the best of my judgment, and I am a
human and I am mortal, and it is reasonable that in some instances
I will even make mistakes, and you will also.
Senator Kennedy. I do not think it is proper that Mr. Hoffa have
the administration over the affairs of 16 local unions, and I do not
IMPROPER ACTIVITIES IN THE LABOR FIELD 2395
think it is proper that 28 locals of the 800 of the teamsters should
be kept in trusteeship 5 years or longer, or to have a situation where
a witness before us who is a trustee of one of these locals stated before
the committee that he did not even know why it was in trusteeship
or what procedure should be followed to take it out of trusteeship.
Now we are interested in this committee, in addition to other things,
in the rights of the members. I do not think that the rights of the
members are protected by your failure to set up a procedure by which
these matters could be turned over to local administration and control.
I think that the centralization of authority which this procedure gives
you and your predecessor, and your possible successor, is undesirable.
Mr. Beck. Senator Ivennedy, can 1 say this to you : I think that you
have nothing but the objective of the finest motives in the vision
you have of tlie question. I sincerely believe that.
I think that you are trying to get into your own mind an under-
standing of what is right, exactly right, in an operation of these
trusteeships. I invite you right now, or I will come to your office,
and I will bring with me people who understand every phase of the
operation of these various units that are under trusteeship. I will go
into them in every detail with you and show you why they went into
trusteeship, and why they are continued in trusteeship, and I will
show you why in my judgment or my associates w^io recommend to
me why they have not been removed from trusteeshij). I will saji
further right into the record, if you can show me any single instance
where there has been action that is contradictory to the welfare of the
membersliip by virtue of the trusteesliip, I will remove it immediately.
I stand prepared to do that right now at your convenience.
Senator ICennedy. I think it would be better instead of coming and
describing it to me, if you would set down certain standards and
publicly for these locals to meet and then give them an opportunity
before a representative committee to demonstrate that they have met
those standards. I think that would be far more satisfactory than
you and I discussing each case.
Mr. Beck. We will do that.
Senator Kennedy. But it does not seem to me that is done. I would
like to know whether you personally have made a study of all of the
trusteeships which have been trusteed for 5 years or more, and in
what way they failed to meet a reasonable standard.
Mr. Beck. Now, personally, as an individual, of course, no more
than the president of any organization of one million and a half
members, do I have an opportunity to handle all of the detail work.
Much of it is passed out to those who represent me in various capac-
ities across the United States and the Territories.
But in one way or another, either through them or directly myself,
each and every one of those trusteeships have been carefully analyzed.
I could bring before you, and I liave offered to do it, the people who
understand it in detail to satisfy you that the administration of it is
100 percent in concert with the best interests of the membership, the
community, other labor organizations who may be affected by work
stoppages if tliey were not })roperly administered, and the welfare of
our whole general scheme of competitive structure in business.
Senator Kennedy. I have just one other point.
I have here the form under the Taft-Hartley Act for the filing of
financial reports. I have shown it to Mr. Bellino, and it is not neces-
2396 IMPROPER ACTIVITIES IN THE LABOR FIELD
sary for him to testify, but lie has informed me that he considers it to
be totally inadequate as far as anyone going through it and really
detecting what is going on in union funds. The form is extremely
simple, and it is inadequate as far as really representing a detailed
report on union expenditures.
Therefore, in view of that, I would like to ask you four questions
about possible improvements, and if you do not want to answer them
you do not have to.
Do you think it is desirable that there should be, as there is not
now, a Federal law to prohibit the embezzlement or misappropriation
of union funds by union officials?
(The witness conferred with his counsel.)
Mr. Beck. My counsel desires that I do not answer that.
Senator Kennedy. Then I will not ask you the rest of them, because
it is in the same general area.
Senator Goldwater. Mr. Beck, when you came to the aid of Mr.
Avery in the Montgomery Ward case, did you have an agreement
with him that if you gave him your proxies, he in turn would yield
to the organizing of his employees ?
(The witness conferred with his counsel.)
Mr. Beck. Senator, let me say this : I never met Mr. Avery of
Montgomeiy Ward in my life until the day the contracts were signed
between Montgomery Ward and our international union. Then it was
a question of who was to sign for the international union, and who
was to sign for Montgomery Ward. It was agreed that if Mr. Avery
personally signed the contract for Montgomery Ward, then I would
sign it for our international union.
If some other officer under Mr. Avery was to sign it for Montgam-
ery Ward, then some other officer other than myself would sign it for
our international union.
I never met Mr. Avery and I never discussed the Montgomeiy
Ward dispute in any way, shape, or manner, the proxy fight, or any-
thing associated with it. I never met Mr. Avery, and I want to em-,
phasize, except in his own office in Chicago for perhaps 45 minutes
to an hour at the time of the signing of the contract.
Senator Gold water. Did you have an agreement with Mr. Avery
or any official of Montgomery Ward that if you came to their aid in
this proxy fight that you would be allowed to unionize the employees?
Mr. Beck. Xo, Senator ; I did not.
Senator Goldwater. We had testimony here the other day that
said you did.
Mr. Beck. Xo, Senator. I read the transcript of that testimony,
and I think that you liave a misunderstanding of what I have on it.
I don't think that was the testimony. I could be in error, but I don't
think so.
Senator Goldwater. The testimony was to the point that in ex-
change for your proxies, you were given the right, or not the right
but you were given by Mr. Avery his employees into your union.
Mr. Beck. No, Senator. I read the transcript, and I thought that
there was a misunderstanding. I think that you are referring to Mr.
Landa, are you not ?
Senator (ioLDWATER. Mr. Beck, don't you think it is a ratlier
strange coincidence that for 18 months you had been able to bring
IMPROPER ACTIVITIES IN THE LABOR FIELD 2397
in only 3,000 people, and within a few days after this proxy tight was
settled 39,000 people came into the union ?
Mr. Beck. No ; I don't think so.
Senator Goluw^vit^r. Yon don't think that is a coincidence^
Mr. Beck. No ; I don't think so. And I don't know that your fig-
ures are correct, and I don't think tliat they are. We did not get a
union shop at Montgomery Ward.
Senator Goldwatek. I didn't say that you did. I am relying on
the Chicago Tribune, which is usually fairly accurate as to figures.
Mr. Beck. Let me put it this way: I know pretty well the pro-
cedures that you follow in your approach to the problems of business
and you know pretty well what I do.
Senator Goldwatek. We are beginning to learn.
Mr. Beck. To start with, the teamsters international union as an
international union never had a dollar invested in the stock of Mont-
gomery Ward.
Senator Goldwater. I wasn't asking that question.
Mr. Beck. I want to show you that I personally, because the team-
sters did not have any money invested in Montgomery Ward, couldn't
vote any proxies or influence any stock vote except that I would go
on recommendation down to our Central States where their own
money was invested. By the way they made a huge profit off the
investment.
Senator Goldwater. Did anybody in your organization have an
agreement with anybody in Montgomery Ward ?
Mr. Beck. No. If you would like, I will tell you just exactly what
happened.
Senator Goldwatek. I don't want to know about that, I remember
about ^vhat happened, but I w'ant to get the strange coincidence of
39,000 people coming under a union agreement within a few days after
you or your organization came to the rescue of Mr. Avery.
Mr. Beck. No, it never happened that way at all. Organizing had
been going on at Montgomery Ward for several years.
Senator Goldwater. Eighteen months.
Mr. Beck. You are wrong on that, Senator, because there was a
strike at Montgomery Ward on the Pacific coast at least 8 or 9 or 10
years ago, at Portland, Oreg., and at Oakland, Calif.
Senator Goldwater. Then you deny having had any agreement
with Mr. Avery ?
Mr. Beck. Very definitely. I did not have any agreement of any
kind or character.
Senator Goldwater. Plas there been any other instances during
3^our career in the union movement where this same strange coinci-
dence occurred ?
Mr. Beck. To tlie best of my knowledge, no.
Senator Goldwatek. Tliis question is prompted by a report that I
received concerning a book called "USA Confidential.''
Mr. Beck. I sued them for libel and I collected.
Senator Goldwatek. I am glad to hear you say that, but is it true
that pages 121 to 126 were deleted before that book was allowed to be
sold in the State of Washington ?
Mr. Beck. I don't know if you have got your information from tlie
Congressman from Wasliington or not, who was in the bookselling
business at that time.
2398 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Goldwater. No.
Mr. Beck. No ; here is what happened : When I elected to file libel
against that book, we followed a procedure that perhaps is different
than has ever been followed before. We elected to file not only against
the people that wrote the book, the publishers of the book, but also
against every individual outlet in the United States and in Hawaii
that distributed the book. Then the question arose at Seattle, Wash.,
that one of your associates in Congress at that time was the manager
of one of the big bookstores there. He asked the question, "If we
delete the pages that have reference to you, Mr. Beck, will you then
object to the sale of the book? If you lose the libel suit, we will mail
them the pages and if you win the libel suit, we will keep the pages."
That is what happened.
Senator Goldwater. Did you win the libel suit?
Mr. Beck. I won the libel suit.
Senator Goldwater. So they are still stuck with them ?
Mr. Beck. I filed three and I won them all.
Senator Goldwater. They are stuck with those four pages ?
Mr. Beck. No ; they decided not to sell the book.
Senator Goldwater. I am glad you cleared that up because there
has been some inference that you used your rather unusual power to
bring that about in Washington.
Mr. Beck. No; Congressman Pelly will explain it to you in detail.
Senator Goldwater. That is not my source, but I will ask him about
it.
Mr. Beck. You ask him about it because he knows all about it.
Senator Goldwater. What was wrong with those four pages ?
Mr. Beck, Well, they were the particular pages that were most
vicious and libelous and they felt by eliminating those four pages
they would remove my objection to the book, and not interfere with
the sale of it.
Senator Goldwater. That is all I have.
The Chairman. Are there any other questions ?
Senator Curtis. I have ]ust one question.
How large are the health and welfare funds of the teamsters union ?
Mr. Beck. You mean scattered across all of our operations, by our
local units?
Senator Curtis. The grand total ?
Mr. Beck. I have no idea, but they run up into hundreds of millions,
a terrific amount.
Senator Curtis. How large are the health and welfare funds of all
unions?
Mr. Beck. I have no statistical record of it.
Senator Curtis. Give me an estimate.
Mr. Beck. I could not give you an estimate, and I couldn't possibly
doit.
Senator Curtis. Could you compare it with the assets of our life-
insurance companies?
Mr. Beck. No, and I am purely guessing, but I am almost willing
to say it exceeds them.
Senator Curtis. That they would exceed the assets?
Mr. Beck. I Icnow what you are getting to by your question, but
they will. I will say to you in return also that I am in favor of you
IMPROPER ACTIVITIES IN THE LABOR FIELD 2399
writing the strictest kind of legislation encompassing the widest area
of operation to protect them.
Senator Cuktis. That is an opinion of an expert.
That is all.
Mr. Kennedy. I was interested in the discussion about the book,
Mr. Beck.
Did vou make any arrangements to have a book written about your-
self?
(The witness conferred with his counsel.)
Mr. WiLLiABis. That question, Mr. Beck reminds me, is germane,
strangely enough, to the tax case pending in Washington. So I am
going to advise him not to answer the question.
Tlie Chairman. May I inquire ? What is the date of it ?
Mr. Kennedy. 1955 it started, I understand.
The Chairman. Ask him about 1955.
Mr. Kennedy. Did you make some arrangements in 1955 ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. On what ground?
Mr. Beck. Under the fifth amendment.
Mr. Kennedy. What was the book going to be, on yourself?
Mr. Beck. I decline to answer the question.
]Mr. Kennedy. And did you make arrangements to have the authors
paid out of union funds?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Did you tell any of the union officials of the Inter-
national Brotherhood of Teamsters that these people were being paid
to write a book about yourself ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Did you make arrangements that as the chapters
were finished, they were to be submitted to you personally ?
Mr. Beck. I decline to answer the question.
JSIr. WiLiJAMS. I am going to advise him not to answer any ques-
tions about the book.
Mr. Kennedy. Maybe he can answer some of them. I was inter-
ested after the book Was finished if you made an arrangement with
the publishing company that the teamsters would buy 10,000 of them.
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Was there any discussion about that?
Mr. Beck. I decline to answer the question.
Mr. Ivennedy. Now, you were talking about some of these other
matters of Montgomery Ward and we had some testimony this week
also on that.
Senator Goldwater. I wanted to ask a question. Where can we
buy that book ?
Mr. Beck. The book has never been published yet.
Whenever it is, I will send you a complimentary copy.
Senator Goldwater. I would like to have it, with no deletions.
Would you have all of the pages in ?
Mr. Beck. Positively. I won't take those four out.
The Chairman. Let us have order, please.
Mr. Kennedy. You were discussing some of the arrangements re-
garding testimony or some of the testimony given here earlier this
89330— 57— pt. 7 27
2400 IMPROPER ACTIVITIES IN THE LABOR FIELD
week. I was wondering if you would also tell us about the arrange-
ments that were made on these toy trucks, the sale of the toy trucks
to the union.
Mr. Beck. I decline to answer tlie question.
Mr. Kennedy. Did you set your family up in a company in order
to sell these toy trucks to the union ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Any of that money from the sale of the toy trucks,
did any of that come back to you ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. You wrote some letters to the local unions urging
them to buy these toy trucks, did you not ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Did you tell any of the union officials with whom
you were working that your family was interested in this business
deal?
Mr. Beck. I decline to answer the question.
Mr. IvENNEDY. Again you did discuss some of the testimony here.
I wonder if you would tell us what your arrangement was with Mr.
Donald Hedlund.
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Did you receive any kickbacks from the union funds
that were invested in National Mortgage Co. ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Was it your money that was used to set up tlie Na-
tional Mortgage Co. ?
Mr. Beck. I decline to answer the question.
Mr. Kennedy. Did you make arrangements vrith ^Ir. Donald Hed-
lund that some of this money would come back to you ?
Mr. Beck. I decline to answer the question.
Mr, Kennedy. Could you tell the connnittee about the investment
company ?
Mr. Williams. I think that we made a stipulation covering these
questions earlier in this hearing.
Mr. Kennedy. Let us except 1950, tjiat is all.
]Mr. Williams. It was stipulated that Mr. Beck, on advice, would
decline to answer questions suggested by these 52 topical matters on
this mimeographed release. I understood the Chair put into the rec-
ord that you had directed him to answer, and I continued to advise
him to decline to answer, and I understand the record is in that posture
now. So, this could serve no useful purpose to go back and repeat this.
The Chairman. Proceed with the questions.
Mr. Kennedy. I was wondering about the Investment Co. That
was established in 1053, and I understand your indictment for income-
tax evasion covers 1950. Could you tell us about the Investment Co.?
^\v. Bkck. I decline to answer.
]\rr. Kennedy. Did you make arrangements with Mr. Simon Wam-
pold, the teamster attorney, to set up this company with Mr. Donald
Hedlund ?
Mr. Beck. I decline to answer.
Mr. Kennedy. Were you to get a kickback from the use of union
funds that went through the Investment Co.?
Mr. Beck. I decline to answer.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2401
Mr. Kennedy. Did you also make arrangements during this period
of time to set up an insurance company, where the insurance of the
teamsters Avould go through this?
Mr. Beck. I decline to answer.
Mr, Kennedy. Was that for your own personal benefit ?
Mr. Beck. I decline to answer.
Mr. Kennedy. Would you tell the committee about the K. & L. Dis-
tributing Co. ?
Mr. Beck. I decline to answer.
:Mr. Kennedy. Did you go to the Anheuser-Busch Co. and get th&
distributorship of beer from Anheuser-Busch in the State of Wash-
ington?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did vou ask any favors from Anheuser-Busch after
that?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you ask for some extra carloads of beer to be
sent into the State of Washington for the company?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you use the force of the union to have your son,
Dave Beck, Jr., established as president of the company ?
Mr. Beck. I decline to answer.
Mr. Kennedy. What about the Sunset Distributing Co. ? Did you
also have an interest in the Sunset Distributing Co. ?
Mr. Beck. 1 decline to answer.
Mr. Kennedy. Did you go to the head of the Rainier Beer Co. and
say you would like to get another one of your relatives set up in the
Sunset Distributing Co. ?
Mr. Beck. I decline to answer.
Mr. Kennedy. So that he could distribute Rainier beer ?
Mr. Beck. I decline to answer.
Mr. Kennedy. Xow, did the teamsters have contracts with the
Rainer Beer Co. ?
jMr. Beck. I decline to answer.
Mr. Kennedy. What about the Fmehauf Trailer Co.? Did you
go to them for a loan of $200,000 ?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you get the loan from the Fruehauf Trailer
Co. and from the Associated Transport Co. ?
Mr. Beck. I decline to answer.
Mr. KfJnnedy. Did you get this loan of $200,000 from them?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you ask any other favors of the Fruehauf
Trailer Co.?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you have them pay for your niece and several
girls touring Europe?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you ask them to furnish a car for that?
Mr. Beck. I decline to answer.
Mr. Kennedy. Did you ask for permission to use the plane?'
Mr. Beck. I decline to answer.
Mr. Kennedy. Did the union pay any of the transportation charges
of vour niece and the other girls?
2402 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Beck. I decline to answer.
Mr. Kennedy. We have a number of other questions, Mr. Chair-
man, if you think it is worthwhile. I can except all of 1950.
Mr. Beck. I will answer them as I have been answering them. I
have no objection to that. I decline to answer them on advice of
counsel, and I am perfectly willing to do that.
Mr. Kennedy. Do you honestly feel yourself that a truthful an-
swer to these questions might tend to incriminate you ?
Mr. Beck. I have taken advice of counsel, and on his advice I feel
that they might incriminate me and I am answering under that
provision.
Mr. Kennedy. You believe truthfully yourself, truthfully, that
answers to these questions might tend to incriminate you?
Mr. Beck. They might.
Senator Kennedy. Before the hearing closes, Mr. Beck has been
under some criticism during the last week for his actions, but I also
would like to recall to the attention of the committee the actions
of some of the businessmen with whom he dealt.
While there probably is no law under which they could be held
liable and Mr. Beck, being a trustee really of his union funds, I
think has the greater responsibility for what went on, nevertheless,
we had as witnesses here during the past week, Mr. Wilson, from An-
heuser-Busch Co., which engaged in this peculiar and abnormal re-
lationship, and that was the word they used, for 5 years or more with
Mr. Beck and one of the largest breweries in the United States.
We had in Fruehauf the largest maker of these trailers in the
United States, who used union funds with Mr. Beck's assistance in
a proxy fight and arranged this very peculiar and indirect loan to
Mr. Beck with the Associated Transport, the largest trucker, and
Mr. Seymour who joined in this loan and nevertheless, would not
put it on the books as a direct loan to Mr. Beck,
Mr. Landa, a large attorney for the Fruehauf Co., who saw nothing
wrong with offering Mr. Beck 50 percent after taxes of whatever
profit he made. Mr. Beck turned it down, but it was 50 percent of
whatever profits were made out of this stock deal which union
funds were involved in.
The Occidental Life Insurance Co., one of the largest underwriters
of health and welfare funds, which gave Mr. Beck the lowest rates
on personal loans because Mr. Beck not only himself was a large
customer, but because union funds were placed under the control of
the company.
We had Mr. Shefferman, who is one of the largest industrial rela-
tions consultants in the country, who engaged in continued improper
practices with Mr. Beck.
There was the Montgomery Ward Co. which, in the desire of Mr.
Avery to maintain control of the company, showed very little regard
for the welfare of his people. That certainly was not his primary
concern.
Therefore, although I think Mr. Beck, as a trustee of the union
funds was culpable, I think these men who came before this com-
mittee and saw nothing wrong in any of these thinirs that they did
are certainly not equally responsible, but are responsible.
While there is no law against it, I think the committee should take
cognizance of the attitude that they took before this committee and
IMPROPER ACTIVITIES IN THE LABOR FIELD 2403
recognize that they have a responsibility as well as rights in this
matter.
We liad here an alliance of big business and big labor and with
comparatively little regard paid to the miion members whose funds
were involved.
The Chairman. Are there any further questions, Mr. Counsel 2
Mr. Beck, I have just a very few questions. Were you vice presi-
dent of the Teamsters International when you purchased the block
of property here on which you built the International Teamsters
Building?
Mr. Beck. I decline to answer that question under the fifth amend-
ment.
The Chairman. You are not ashamed of it, are you ?
Mr. Beck. Acting on advice of counsel, I decline to answer under
the fifth amendment.
The Chair]!han. I think this was in 1949. At that time I think
you were executive vice president. Did you recommend to the ex-
cutive board or the board of directors or whoever they are, who has
the responsibility, that a commission of $12,500 be paid to Mr.
Shefi'erman or to anyone else for their purported efforts made to
secure a reduction in price from $18 a square foot to $15 a square
foot?
(The witness conferred with his counsel.)
Mr. Beck. I decline to answer that question, Senator, under the
fifth amendment.
The Chairman. Did you, after the payment was made at your
request by the board, receive an $8,000 kickback from that transac-
tion from Mr. Shefferman ?
Mr. Beck. I decline to answer the question under the fifth amend-
ment.
The Chairman. You have given your opinion here, Mr. Beck, on
a number of matters. In other words, I believe you testified that
you favor a secondary boycott. Did you not so testify ?
(The witness conferred with his counsel.)
Mr. Beck. Yes, I favor that.
The Chairman. I thought you did, and I thought you expressed
some views a while ago. I would like to ask ^ou now, are you in
favor of union ofiicers being honest in the administration of union
funds?
Mr. Williams. I don't think that question
The Chairman. I did not ask counsel what he thought. I wanted
to ask the witness the question.
Mr. Williams. I will instruct him not to answer the question.
Mr. Beck. I will decline to answer the question.
The Chairman. I am just wondering whether the man is willing
to answer.
Mr. Beck. I am following the advice of counsel.
The Chairman. I understand that.
Mr. Beck. All I am doing
The Chairman. Listen.
Mr. Beck. Yes, Senator.
The Chairman. When I am talking, I mean for you to listen and
not talk back to me. I wanted to ask you here, and give you the oppor-
2404 IMPROPER ACTIVITIES IN THE LABOR FIELD
tiinity to state to this I14 million labor-union workingmen, whether
you iaelieve in honesty and integrity in the administration of their
money.
Mr. Williams. I am going to instruct him not to answer because
it has no relevancy whatever to any legislative purpose, as many of
the questions that have been posed to him.
The Chairman. I think it does. For the benefit of counsel, I may
say to you, sir, in spite of his efforts not to be helpful, I think that
your client has been very helpful to the Congress and it has shown
them definite areas where they should legislate and must legislate if
the honest working people of this country are to be protected from
such rascality as has been going on in this union.
Now, if you want my view about it, and you asked for it, that is it.
Now, let nie ask you one other question.
Are you in favor of rendering accurate accounting of the funds that
you are trustee of to the members of the union that you represent?
Mr. Beck. Yes. One hundred percent.
The Chairman. Will you start now by giving an accounting of the
$370,000 that you have paid back so far, and tell us how it came into
your possession?
Mr. Beck. I decline to answer that under the fifth amendment.
The Chairman. You said you were willing to give an accounting
under oath a minute ago. Now, are you willing to do it ?
Mr. Beck. On advice of counsel, t decline to answer that question.
The Chairman. You are not willing to do it now, are you?
Mr. Williams. Mr. Chairman, may I be heard?
The Chairman. Briefly.
Mr. Williams. Mr. Chairman, if this committee had the power
to adjudicate the issues in these financial matters and render a judg-
ment, we would have a completely different story. But the committee
is asking this witness to come in here and lay before the committee his
defense in a case in which he is on trial or going to be on trial very
shortly on the west coast.
The Chairman. I am not asking him that. Let me say to you
that I do not need a lecture on the law. I believe I know the rights
of this committee and of this witness.
There has been derogatory testimonjr here. If what we have heard
is true, I believe counsel wnll agree with me that a housecleaning is
long overdue. Now, this witness' testimony has been against him and
T have tried to give him every opportunity to answer if he desires
to answer or to explain, and that is the purpose of the hearing.
As I said, he has been very helpful, although not intentionally so,
by his refusal to be cooperative. It clearly indicates that the Congress
has a responsibility in my judgment and a duty to enact laws to make
people responsible who occupy positions of trust such as your client
occupies.
Mr. Williams. If this committee could, through some arrangement
with the Department of Justice, get the power to decide definitively
this man's tax case, I would give him altogether different advice from
what I have been giving him here today.
The Chairman. You have been trying to lecture me a little on
the law. I think you know that the Justice Department could not
give this committee any such authority.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2405
Mr. Williams. I am sorry, sir, I haven't been trying to lecture you
on the hiw. I have been trying the best of my lights to protect this
man's rights, and he does liave some rights here, as you appreciate.
The Chairman. He does, and a million and a half union members
in this country have some rights tliat this committee has been trying
to protect, and I hope the Congress hereafter will enact legislation that
will protect their rights.
Are there any further questions?
The witness will remain under subpena. I am hopeful that it will
not be necessary to recall him at any time, but I cannot be sure.
In the meantime, I will make this observation: I think it will be
very interesting to watch and see what actions are taken by sources
within the union, and particularly the teamsters international, to give
an opportunity for a fair hearing and determine whether the testi-
mony that has been spread upon the record here is fact or fiction.
If it is fact, I think tlie eyes of the Nation will be on the teamsters
union to see what action it will take to clean its own house.
Is there anything further ?
The Chair wishes to specifically, most sincerely and with deepest
appreciation, compliment the staff of the committee, the chief counsel,
who has directed the labors and work of the other members of the
staff in searching out this information that has been brought here,
and preparing the necessary detail work to make these hearings pos-
sible, and to get these facts before the Congress and before the Ameri-
can people.
Those who have been working specifically on this investigation, in
addition to the chief counsel, Mr. Kennedy, are Mr. G. Ray Bandy,
from the General Accounting Office in Seattle; Mr. Fred Thompson;
Mr. Walter Henson ; Mr. Allen Moore ; Mr. Clarence L. Andrews ; Mr.
INIillard F. Reeves ; Mr. John Colman ; Mary Shemenski ; and Chester
Dean. Mr. Joseph Campbell, head of General Accounting Office,
has very cooperatively made these people available to the committee
to help carry on this work.
I would also like to thank Lester Poole, of the General Accounting
Office.
On the committee staff, I extend my appreciation to Mr. Carmine
Bellino, LaVern Duffy, Jerry Adlerman and Pierre Salinger, and
John Aporta, who have all worked so hard. Mr. Bellino, as chief
accountant, has directed much of this work himself, particularly in
the accounting field.
Back behind all of these people is the excellent clerical staff helping
keep house for us and keeping this work orderly so that we can
proceed.
Is there anything further ?
The committee stands in recess subject to call.
(Whereupon, at 5 : 07 p. m., the committee recessed, subject to the
call of the Chair.)
(Members present at the taking of the recess: Senators McClellan,
Kennedy, and Curtis. )
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
FRIDAY, MAY 17, 1957
United States Senate,
Select Committee on Improper Activities in the
Labor or Management Field,
Washington, D. O.
The select committee met at 12 : 05 p. m,, pursuant to Senate Reso-
lution 74, agreed to January 30, 1957, in the caucus room, Senate Office
Building, Senator John L. McClellan (chairman of the select com-
mittee) presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irving M. Ives, Kepublican, New York ; Senator Carl T. Curtis, Re-
publican, Nebraska.
Also present : Robert F. Kennedy, chief counsel ; Jerome Adlerman,
assistant counsel; Carmine Bellino, accounting consultant; Ruth
Young Watt, chief clerk.
(Members present at the convening of the session: Senators Mc-
Clellan and Ives.)
The Chairman. The committee will come to order.
Mr. Kennedy. Mr. Norman Gessert.
The Chairman. Mr. Norman Gessert, come forward, please, sir.
Be seated.
Mr. Gessert, you were sworn yesterday as a witness before the
committee ?
Mr. Gessert. Yes.
TESTIMONY 01' NORMAN J. GESSERT, ACCOMPANIED BY COTJNSEL,
EDWARD L. CAREY
The Chairman. You at that tim&--your counsel, I believe, identi-
fied himself for the record ?
Mr. Carey. I did, Mr. Chairman.
The Chairman. At that time, you requested an opportunity to con-
fer with your counsel before testifying ?
Mr. Gessert. Yes.
The Chairman. Have you had ample opportunity to confer with
your counsel ?
Mr. Gessert. I have, sir.
The Chairman. Thank you very much.
Mr. Kennedy, you may proceed.
Mr. Kennedy. Mr. Gessert, as I understand it, you have just been,
during the last month or so, removed from the payroll of the teamsters
union.
2407
2408 IMPROPER ACTIVITIES IN THE LABOR FIELD
Could you tell the committee why that action was taken, and then
jjive a little bit of your background as to what work you were doing
for the teamsters ?
Mr. Gessert. I decline to answer that question.
Mr. Kennedy. You decline to answer?
Mr. Gessert. Under the fifth amendment.
Mr. Kennedy. You feel that a truthful answer to the question might
tend to incriminate you?
Mr. Gessert. I refuse to answer.
Mr. Kennedy. Would you tell the committee, then
The Chairman. Just one moment.
We are going to have a little better order.
Mr. Gessert, let me ask you a question. Have you been employed in
the past by the teamsters union or any local organization of the team-
sters international ?
Mr. Gessert. I decline to answer that question, sir, under the fifth
amendment.
The Chairman. Under the fifth amendment? You do not want to
admit whether you have been an employee of the teamsters union?
Mr. Gessert. I decline to answer that, sir.
The Chairman. Do you honestly believe that it might tend to in-
criminate you if you admitted that you had been in the employ of the
teamsters union?
Mr. Gessert. I decline to answer that, sir.
The Chairman. You are ordered to answer that question.
Mr. Gessert. I decline to answer it under the fifth amendment.
The Chairman. You are ordered and directed to answer the ques-
tion as to whether you honestly believe that if you answered the ques-
tion truthfully, that a truthful answer might tend to incriminate you.
Mr. Gessert. I decline to answer that mider the fifth amendment.
The Chairman. Proceed, Mr. Counsel.
Mr. Kennedy. Mr. Chairman, based on the information that we
have, Mr. Korman Gessert came to work for the retail clerks union back
in 1935, and his job at that time was procured for him by INIr, Dave
Beck.
Would you tell us whether that is true, Mr. Gessert?
Mr. Gessert. I decline to answer that, sir.
Mr. Kennedy. On the grounds that a truthful r,ii wer might tend to
incriminate you?
ISIr. Gessert. I decline to answer that on the grounds that it might
incriminate me.
Mr. Kennedy. Mr. Chairman, we also have information that he
worked with the retail clerks union from 1935 to about 1952 ; that dur-
ing part of that period of time, namely, 1948 through 1949, 1950, 1951,
he was associated with John Lindsay, in the Jolm Lindsay Construc-
tion Co.
Could you tell us whether you were associated with the John Lindsay
Construction Co. ?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. Kennedy. And that during this period of time he was asso-
ciated with John Lindsay, Mr. Chairman, that he was working on
the development that was taking place on Mr. Dave Beck's home.
Would you tell us about that ?
Mr. Gessert. I decline to answer that statement.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2409
Mr. Kennedy. And during that whole period of time that he was
working out there, he Avas still on the payroll of the retail clerks
union.
Is that true ?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. Kennedy. And, finally
The Chairman. Do you mean you do not want to say whether, while
you were working on Mr. Beck's property, in the develo])ment of it,
you were getting paid out of union funds ? Is that what you do not
want to say ?
Mr. Gessert. I decline to answer that, Senator, under the fifth
amendment.
The CnAiR]\TAN. Do you think it might tend to incriminate you if
you answered truthfully ?
Mr. Gessert. It might.
The Chairman. It might.
All right. Proceed.
Mr. Kennedy. I would like to ask him some questions about when he
was working with the John Lindsay Construction Co., whether the
Lindsay Construction Co. was paid for the work they did at Dave
Beck's home, with union checks or with Dave Beck's personal checks.
Would you give us any information about that?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the fifth
amendment.
Mr. Kennedy. Do you know Mr. Dave Beck ?
Mr. Gessert. I decline to answer that.
Mr. Kennedy. Are you related to Mr. Beck ?
Mr. Gessert. I decline to answer tliat under the fifth amendment. .
Mr. Kennedy. Are you related to Mrs. Beck ?
Mr. Gessert. I decline to answer that.
Mr. Kennedy. Do you live
The Chairman. Just a moment.
Do you think it might incriminate you to be related to Mr. Beck
or to Mrs. Beck ?
(The witness conferred with his counsel.)
Mr. Gessert. I decline to answer that under the fifth amendment.
The Chairman. All right. Proceed.
Mr. Kennedy. One of the homes that was built out in this com-
pound of Dave Beck, we understand,, is a home in which Mr. Gessert
lives himself at the present time.
Is that true, Mr. Gessert ?
Mr. Gessert. I decline to answer that under the fifth amendment.
The Chairman. Just a moment.
What address did he give yesterday? He gave his address.
Will you refer to the record? Let us ask him if he lives at that
address.
Proceed. We will get the record.
Mr. Kennedy, Could you tell us whether the home that you live
in now was paid for out of union funds or was paid for out of per-
sonal funds?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
(At this point. Senator Curtis entered the hearing room.)
2410 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Mr. Chairman, we also understand that Mr. Ges-
sert continued on the instructions of Mr. Dave Beck, continued on
the payroll of the retail clerks during this period of time, and this
was a retail clerks union which has been sometimes described as a
captive union in that it is run and operated by the teamsters. They
have their headquarters in the same buiilding as the teamsters have
out in Seattle, and which is owned by the teamsters. And that Mr.
Gessert continued on the payroll of the retail clerks on the instructions
of Mr. Dave Beck.
Is that true ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
the fifth amendment.
Mr. Kennedy. Mr. Chairman, also we have some information that
at one time, the clerk of the retail clerks, the pay clerk, refused to
pay Mr. Gessert any more money on the grounds that he was tired
of having Mr. Gessert on the retail clerks payroll and that Mr. Beck
should go and put him on somebody else's payroll.
Did you ever have a conversation such as that ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
the fifth amencbnent.
Mr. Kennedy. Mr. Chairman, subsequently, in 1954, Mr. Gessert
was put on the payroll of the teamsters, International Brotherhood
of Teamsters, and since that time he has worked, been on the payroll
of the International Brotherhood of Teamsters, until, I believe, March
31 of this year.
Is that true, Mr. Gessert ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. IvENNEDY. Since that time that he was put on the payroll,
from April 15, 1954, until he left on March 31 of this year, Mr.
Gessert had received some $50,903.72 from the International Broth-
erhood of Teamsters.
Is that correct ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
The Chairman. Are you not willing to state for the information
of this committee, for the information of members of the teamsters
union, whether you were drawing money out of their dues, out of
money they paid in as dues, or out of their welfare fund, or work
that you did for an individual and not for the union ? Are you not
willing to tell that?
Mr. Gessert. I decline to answer that, Senator, under the fifth
amendment.
The Chairman. Are you not willing to give an accounting to the
union for your work, for j^our labor, and for the money you received
from it ?
Mr. Gessert. I decline to answer that, sir.
The Chairman. What do you think that the poor union members
who have to work and earn that money and pay it in as dues, what
do you think that they are entitled to? To know anything about it
or not to know ?
Mr.
amendment.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2411
The Chairman. In other words, you feel that the possibility of
incrimination is so strong that you dare not risk telling the truth?
(The witness conferred with his counsel.)
Mr. Gessert. I decline to answer that, sir.
The Chairman. You cannot answer that ?
(The witness conferred with his counsel.)
Mr. Gessert. I decline to answer that under the fifth amendment.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Chairman, as I stated, based on the informa-
tion that we have, Mr. Gessert came to work for the teamsters in
April of 1954 during the same period of time, or about the same
period of time, he went to work for the Union Mercliandising Co.
Is that true '^
Mr. Gessert. I decline to answer that, IMr. Kennedy, under the
fifth amendment.
Mr. Kennedy. In that capacity, he was connected with Mr. Shelton
Sheiferman and Mr. Nathan Shetterman.
Is that true ?
Mr. Gessert. I decline to answer that, sir, under the fifth amend-
ment.
Mr. Kennedy. Do you know Mr. Shelton Shefferman ?
Mr. Gessert. I decline to answer that.
Mr. Kennedy. Do you know Mr. Nathan Shefferman?
Mr. Gessert. I decline to answer that under the fifth amendment.
The Chairman. Can you tell us anyone you know without the possi-
bility of incriminating yourself, anyone?
Mr. Gessert. I decline to answer that, sir.
The Chairman. Do you know your attorney sitting beside you?
(The witness conferred with his counsel.)
Mr. Gessert. I decline to answer that under the fifth amendment.
The Chairman. I just wanted to see how ridiculous and how frivo-
lous these things can get when people find themselves in a situation
such as you are.
Go ahead.
Mr. Kennedy. Mr. Chairman, during this period of time, or ap-
proximately 1953 through 1955, the Union Merchandising Co. made
a profit of some $200,000.
I was wondering, Mr. Gessert, if you know anything about that ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. The great majority, if not all of the profits, came
from sales that were made by the Merchandising Co. to the teamsters.
Do you know anything about that ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. Namely, the sales included some toy trucks that were
sold to the teamsters union and some other kinds of merchandise that
was sold to the teamsters.
Do you know anything about that?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. Did you have any part in selling those things to the
teamsters ?
2412 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Gessert. 1 decline to answer that, sir.
Mr. Kennedy. So, Mr. Chairman, during that period of time, Mr.
Gessert received from the Union Merchandising Co. some $51,000 him-
self.
Is that true, Mr. Gessert ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. Mr. Chairman, during the period of time that Mr.
Gessert was working for the International Brotherhood of Team-
sters, he was also working for the Union Merchandising Co. — and
received from the International Brotherhood of Teamsters some
$50,000 — he was also working for the Union Merchandising Co. and
receiving some $51,000 that resulted in sales from the Union Mer-
chandising Co. to the International Brotherhood of Teamsters.
The Chairman. Over what period of time ?
Mr. Kennedy. That was over a period of about 214 years.
The Chairman. In 2i/^ years he drew $50,000 out of the union?
Mr. Kennedy. The Union Merchandising Co. and approximately
$51,000 from the teamsters, in the form of salary and expenses.
Would you comment on that?
Mr. Gessert. I decline to answer that, ISir. Kennedy, under the fifth
amendment.
Mr. Kennedy. Do you recognize the situation where a possible con-
flict of interest might exist between the work that you were doing
for the International Brotherhood of Teamsters and the work you
were doing for the Union Merchandising Co. ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. Did you have anything to do with the sale of the
toy trucks to the international?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fiftli amendment.
Mr. Kennedy. Mr. Chairman, also during this period of time,
smarting back in 1952, or 1952 or thereabouts, it is understood that
Mr. Dave Beck became interested in obtaining the distributorship of
another type of beer other than Budweiser beer, and this beer com-
panv — he was trying to get tlie distributorship for Rainer Beer in
Seattle.
Do you know anything about that ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. So he went to the head of the Rainer Beer Co. in
Seattle, Mr. Sick, and arranged for the Rainer Beer Co. to give a
distributorship to the Sunset Distributing Co.
Do you know anything about the Sunset Distributing Co.?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. And Mr. Beck then installed his relative, Mr. Ges-
sert, as an officer in the Sunset Distributing Co., and i)ut the money
up for Mr. Gessert to invest in the Sunset Distributing Co.
Do you know anything about that?
Mr. Gessert. I decline to answer that, sir, under the rifth amend-
ment.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2413
Mr. Kennedy. And then the Sunset Distributing Co. proceeded to
distribute Rainier Beer in Seattle.
Can you give us any information on that ?
Mr. Gessert. I decline to answer that, sir, under the fifth amend-
ment.
Mr, Kennedy. Mr. Chairman, it has been established that the
Rainer Beer Co. has contracts with the teamsters in the Seattle area.
Do you know that, Mr. Gessert ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under tliQ
fifth amendment.
Mr. Kennedy. We also understand that Mr. Gessert handled some
money that Mr. Beck wanted to invest in certain real-estate trans-
actions in Seattle.
Is that correct, Mr. Gessert ?
Mr. Gessert. I decline to answ^er that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. Did he give you some money to invest in the Lake
Almanor Real Estate Development Corp., at Almanor, Calif. ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the fifth
amendment.
Mr. Kennedy. Did he advance you some $16,000 to invest in that?
Mr. Gessert. I decline to answer that, sir, under the fifth amend-
ment.
Mr. Kennedy. Were you involved at all in the setting up and the
purchase of the building and land for the K. & L. Distributing Co. ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the fifth
amendment.
Mr. Kennedy. Mr. Chairman, the information that we have devel-
oped before the committee is that the K. & L. Distributing Co. handled
the distributorship for Anheuser-Busch for the Budweister beer in
Seattle, and we understand that Mr. Gessert had something to do with
the purchase of the land and the property in connection with that
organization.
Could you tell us anything about that?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the fifth
fifth amendment.
Mr. Kennedy. We also understand that he had some information
about another relative of Mr. Dave Beck's, Mr. Joseph McEvoy, and
the business connections that Mr. McEvoy had with Mr. Beck.
Can you tell us anything about Mr. Joseph McEvoy?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the fifth
amendment.
Mr. Kennedy. Are you related to Mr. McEvoy ?
Mr. Gessert. I decline to answer that. Senator.
Mr. Ivennedy. We have been looking for Mr. McEvoy lately. I
was wondering whetlier you have seen him at all.
(The witness conferred with his counsel.)
Mr. Gessert. I decline to answer that under the fifth amendment,
Mr. Kennedy.
Mr. Kennedy. What about Dave Beck, Jr. ? We have also been
looking for liim. I was wondering if you had run into liim at all?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. Kennedy. Were you and Dave Beck, Jr., and Mr. McEvoy
all in Canada recently ?
2414 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. IvENNEDY. Can you tell the committee how you all happened
to go to Canada together ?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. I^NNEDY. Did Mr. Dave Beck instruct you to go to Canada?
Mr. Gessert. I decline to answer that, sir.
Mr. Kennedy. On the fifth amendment ?
Mr. Gessert. On the fifth amendment.
Mr. Kennedy. Mr. Chairman, we understand that Mr. Norman
Gessert, Mr. Joseph McEvoy, and Mr. Dave Beck, Jr., all went ot
Canada together, and while they were up there, they rented a car,
and during this period of time that they rented the car they charged
the car rental to the teamster union up in Vancouver, Canada.
Can you tell us anything about that ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. Was the car rental charged to the teamsters union
while you were up in Vancouver, Canada ?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. ICennedy. Could you tell the committee how long you were
in Canada?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. KiiNNEDY. When did you arrive back in the United States?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
Mr. Kennedy. We understand also, Mr. Chairman, that when the
marshal came to the door for Mr. Gessert to try to serve the sub-
pena on him, that he jumped through the window and ran out to
get in his car.
I was wondering if you can tell us anything about that ?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. Kennedy. And when he got in the car, he raced away. The
police finally caught liim, and he threw his wallet down on the floor
and described himself as someone else rather than Mr. Norman
Gessert.
Is that true ?
Mr. Gessert. I decline to answer that, under the fifth amendment.
Mr. Kennedy. Did you describe yourself as Mr. Stackpool, rather
than Norman Gessert ? Did that happen ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
The Chairman. Do you think it would incriminate you to identify
yourself ?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. Kennedy. I have a few more questions.
I was wondering if from any of these business transactions that
were set up by Mr, Dave Beck in which you took an interest, I was
wondering if you turned over any moneys from them to Mr. Dave
Beck.
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the
fifth amendment.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2415
Mr. Kennedy. Were you acting- sort of as a front for Mr. Dave
Beck in these business transactions?
Mr. Gessert. I decline to answer that under the fifth amendment.
Mr. Kennedy. Did Mr. Beck receive any moneys back from you, for
instance, on the sale of the toy trucks ?
Mr. Gessert. I decline to answer that, Mr. Kennedy, under the fifth
amendment.
Mr. Ken?
ceive any moneys back from you on that?
Mr. Gessert. I decline to answer that, under the fifth amendment,
Mr. Kennedy.
Mr. Kennedy. That is all.
The Chairman. Yesterday, when you took the witness stand, the
Chair asked you to give your name, your address, and your place of
residence. You gave your name as Norman J. Gessert. Is that
correct ?
Mr. Carey. Mr. Chairman, may I make an observation at this
particular time?
The Chairman. You make make a brief observation.
Mr. Carey. Yesterday when Mr. Gessert was brought before this
committee it was just about a half -hour after I had had an opportunity
to talk to him. I didn't have sufficient time to advise him as to his
constitutional rights. If you will recall, and the record will so reflect,
at the time when he was asked to be sworn in, I registered an objection.
The purpose of that objection was for me to have sufficient time to
properly advise him.
Since that time, I have talked with this gentleman, yesterday and
last evening, and 1 have now advised him that his address, which was
given yesterday without advice of counsel, would be incriminatory in
nature, and I have so advised him to plead the fifth amendment as
to the specific address which lie gave yesterday.
The Chairman. He is at liberty to carry out your advice.
Was the name you gave yesterday correct?
Mr. Gessert. I decline to answer that. Senator, under the fifth
amendment.
The Chairman. Was the address you gave yesterday as 16730 45tli
Northwest, Seattle 55, Wash., correct ?
Mr. Gessert. I decline to answer that, Senator, under the fifth
amendment.
The Chairman. The Chair asked you yesterday, "What is your
business or occupation?" and you answered "General organizer for
the Teamsters International Union." Was your answer true and
correct yesterday ?
Mr. Gessert. I decline to answer that, Senator, under the fifth
amendment.
The Chairman. I see.
Are there any questions. Senator Ives?
Senator Ives. No.
The Chairman. Have you any questions. Senator Curtis ?
Senator Curtis. Do you know any officers of the teamsters inter-
national that could give this committee information, and the giving^
of that information would not incriminate them?
89330 — 57— pt. 7 28
2416 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Gessert. I decline to answer that, sir, under the fifth amend-
ment.
Senator Curtis. I did not ask you to name them. I asked you if
you knew any.
Mr. Gessert. I decline to answer that, under the fifth amendment.
Senator Curtis. That is all, Mr. Chairman.
The (^-HAIRJCAN. The witness will remain under subpena subject to
be recalled at the pleasure of the committee upon reasonable notice
being given to him of the time and place of his appearance.
Mr. Carey. Mr. Chairman, I take it it will be all right for him to
return to his home in Seattle, and Ave will have ample time to bring him
in, if you do desire ?
The Chairman. With that understanding, yes, sir; he may return.
He is at liberty to go anywhere he likes. If he leaves the jurisdiction
of the United States under this subpena, that might bring about a
few complications as you, as an attorney, can well appreciate.
Mr. Carey. I was particularly interested in his going back to
Seattle, to his home.
The Chairman. Yes ; he will be at liberty if he accepts this recog-
niz:ince to return, or you accept it for him, in his behalf, upon reason-
able notice as to time and place.
Mr. Carey. Thank you, Mr. Chairman.
The Chairman. Let tlie record sliow tliat the recognizance is ac-
cepted.
Is there anything further ?
Are we to' understand — attorneys usually understand that, that
notice to you as his attorney, giving reasonable time and opportunity
for you to get him here, will be compliance with the understanding?
Mr. Carey. Yes, sir ; that is our understanding.
The Chairman. Thank you very much.
You may be excused for the present.
Mr. Carey. Thank you, Mr. Chairman,
Mr. Gessert. Thank you.
(Whereupon, at 12: 30 p. m., the committee recessed, subject to the
call of the Chair.)
(Members present at the taking of the recess: Senators McClellan,
Ives, and Curtis.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
TUESDAY, JUNE 4, 1957
United States Senate, Select Committee on
Improper Activities in the Labor
OR IVIanagement Field,
Washington^ D, C.
The select committee met at 10 a. m., pursuant to Senate Resolution
74, a<?reed to January 30, 1957, in the caucus room. Senate Office Build-
ing, Senator John L. McClellan (chairman of the select committee)
presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irving M. Ives, Eepublican, New York; Senator Sam J. Ervin, Demo-
crat, North Carolina; Senator Pat McNamara, Democrat, Michigan;
Senator Barry Goldwater, Republican, Arizona; Senator Karl E.
Mundt, Republican, South Dakota ; Senator Carl T. Curtis, Republi-
can, Nebraska.
Also present : Robert F. Kennedy, chief counsel ; Jerome Adlerman,
assistant counsel ; Ruth Young Watt, chief clerk.
The Chairman. The committee will be in order.
(Members of the connnittee present at the convening of the hearing
were Senators McClellan, Ives, Mundt, Goldwater and Curtis.)
The Chairman. It had been previously announced that today we
would start open hearings on the activities in connection with the
Bakery and Confectionery Workers' International Union of America.
On yesterday, however, the Chair issued a statement to the press
announcing the postponment of those hearings until Thursday, due
to the death of a member of the family of the attorney who represents
the first witness who was scheduled to be called,
Ilowever, I announced at that time that we would proceed this
morning with hearing two witnesses, Mr. Joseph McEvoy and Mr.
Dave Beck, Jr., who liad been subpenaed and were also scheduled to
testify today.
As to the third witness that we had hoped to hear today, Mr. Fred-
erick Verschueren, we have received from his doctor, Dr. Alexander
Grinstein, a letter dated May 29, stating that Mr. Verschueren is con-
fined in Providence Hospital, in Seattle, Wash., with a diagnosis of
his condition.
The committee had that information checked by Dr. James Moriority
and he confirms the diagnosis of Dr. Grinstein and from their prog-
nosis of the patient's case it will be some 10 days or 3 weeks yet before
Ke will be able to travel. Therefore, we have to defer hearing his
testimony today.
2417
2418 IMPROPER ACTIVITIES IN THE LABOR FIELD
We are now ready to proceed with the two witnesses who, I under-
stand, are present. Which one do yon desire to call first ?
Mr. Kennedy. Mr. Dave Beck, Jr., please.
The Chairman. Mr. Dave Beck, Jr., will you come around, please,
sir?
All right, Mr. Beck, will you stand and be sworn, please ?
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth and nothing
but the truth, so help you God ?
Mr. Beck. I do.
TESTIMONY OF DAVE BECK, JR., ACCOMPANIED BY HIS COUNSEL,
EDWARD L. CAREY
The Chairman. Mr. Beck, will you please state your name, and your
place of residence and your business or occupation ?
Mr. Beck. My name is Dave Beck, Jr., 16749 Shore Drive, Seattle.
Wash.
The Chairman. What is your occupation, Mr. Beck?
(The witness consulted with his counsel.)
Mr. Beck. I refuse to answer on the ground it may incriminate me.
The Chairman. Are you engaged in such an occupation that the
revelation of it truthfully might tend to incriminate you ?
(The witness consulted with his counsel.)
Mr. Beck. It ma}" have a tendency to.
The Chairman. It may have a tendency to?
Mr. Beck. To incriminate me.
The Chairman. Do you honestly believe that, and are you stating
that as a truth under oath ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
The Chairman. You mean that you are refusing to answer whether
you are telling the truth now or not under oath when you say that you
honestly believe that if you reveal your occupation that it might tend
to incriminate you ? Is that what you are saying ?
Mr. Beck. I refuse to answer on the same ground.
The Chairman. I order you with the permission of the committee,,
unless there is objection, the Chair orders and directs you to answer
the question as to what is your occupation.
Mr. Beck. I refuse to answer on the grounds it may tend to inci*im-
inate me.
The Chairman. Now, I ask you the question, do you honestly believe
that if you gave a truthful answer to that question and revealed your
occupation, that such answer might tend to incriminate you ? Do you
honestly believe that?
Mr. Beck. I refuse to answer on the same grounds.
The Chairman. With the permission of the committee, the Chair
orders and directs you to answer the question as to whether you
honestly believe that a truthful answer might tend to incriminate you>
Mr. Beck. I refuse to answer on the grounds it may have a tendency
to incriminate me.
The Chairman. Have you talked with members of the staff re-
garding your testimony here?
(The witness consulted with his counsel.)
IMPROPER ACTIVITIES IN THE LABOR FIELD 2419
Mr. Beck. I refuse to answer on the ground it may incriminate me.
The Chairman. Do you think that it might incriminate you if you
talked to members of tlie staff prior to your testimony ?
Mr. Beck. I refuse to answer on the same ground.
The Chairman. Will you answer this: Would this incriminate
you ? Do you have an attorney present to represent you ?
Mr. Beck. Yes, sir, I do.
The Chairman. That does not incriminate you ?
Mr. Beck. No.
The Chairman. Will you have your attorney please identify him-
self for the record.
Mr. Caret. My name is Edward L. Carey, Barr Building, Wash-
ington, D. C.
The Chairman. You are familiar then, with the rules of the com-
mittee, of course ?
Mr. Carey. I am, Mr. Chairman.
The Chairman. Mr. Counsel, you may proceed.
Mr. Kennedy. Mr. Beck, are you now connected with the Interna-
tional Brotherhood of Teamsters ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Mr. Kennedy. Have you received any salary or expenses from them ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
The Chairman. The Chair wants to make this record very clear
and you have counsel to advise you. I want to ask you if you honestly
believe that if you answered the question truthfully and stated whether
you have any connections with the Teamsters Union that such truthful
answer might tend to incriminate you.
Mr. Beck. The same answer, the fifth amendment.
The Chairman. With the permission of the committee, the Chair
•^orders and directs you to answer the question as to whether you
lionestly believe that a truthful answer might tend to incriminate you.
( The witness conferred with his counsel. )
Mr. Beck. I refuse to answer on the ground it may have a tendency
■to incriminate me.
The Chairman. You are ordered and directed to answer the ques-
tion. You understand that, and I assume your counsel understands it.
Mr. Beck. The same answer.
The Chairman. What was the other question ?
Mr. Kennedy. Whether he was connected with the Teamsters Union,
and whether he received any salary or expenses.
The Chairman. You were asked the question by counsel as to wheth-
er you had received any salary or expenses from the Teamsters Union
organization.
Mr. Beck. I refuse to answer.
The Chairman. You answered that you refused to answer on the
ground it might tend to incriminate you. I ask you the question
again : Do you honestly believe that if you gave a truthful answer to
that question, that the truth might tend to incriminate you ?
Mr. Beck. I refuse to answer on the grounds that it might tend to
incriminate me.
The Chairman. Without objection from the committee, the Chair
orders and directs you to answer the question as to whether a truthful
answer, or you honestly believe a truthful answer might tend to in-
criminate you.
(The witness conferred with his counsel.)
2420 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Beck. I refuse to answer on the grounds it may have a tend-
ency to
The Chairman, The Chair has given you continuous orders and
directions throughout the further proceedings, and the further inter-
rogation of you as a witness.
Senator Goldwater. Mr. Chairman, in order to try to clear up this
question of Mr. Beck's membership or association with the teamsters^
I would like to ask him if he knows Dave Beck, Sr.
Mr. Beck. I refuse to answer on the ground that it may incrimi-
nate me.
Mr. Kennedy. Specifically, have you been connected with the team-
sters union from 195-1: to 1955 and 1956, and part of 1957 ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Are you still on the payroll of the teamsters ?
Mr. Beck. The same answer.
Mr, Kennedy. I was wondering how you first got your job with
the teamsters.
(The witness conferred with his counsel.)
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. You were appointed an international organizer of
the teamsters, were you not, in 1954 ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
The Chairman, Do you honestly believe that if you admitted that
you have had any connection with the teamsters union, or were ever
employed by it or worked for it as an organizer or otherwise, or drew
any expenses that you were entitled to from it — do you honestly be-
lieve that if you answer those questions truthfully that the truth might
tend to incriminate you ?
]VIr. Beck. I refuse to answer on the grounds it may incriminate me.
The Chairman. You are ordered and directed to answer that ques-
tion by permission of the committee. The Chair gives you that order
and direction.
Mr. Beck. I refuse to answer on the grounds it may incriminate me.
The Chairman. All right, proceed.
Mr. Kennedy. The records show that in 1954 Mr. Dave Beck, Jr.,
received a salary paid by the International Brotherhood of Teamstei-s
as an international organizer, of $5,000 ; is that correct, Mr. Beck?
Mr. Beck. I refuse to answer on the fifth amendment.
Mr. Kennedy. And for that same year, 1954, you received in ex-
penses, some $7,244.10 ; is that correct ?
Mr. Beck. The same answer, the fifth amendment.
Mr. Kennedy. Could you tell the committee what you did for those
expenses ?
(The witness conferred with his counsel.)
Mr. Beck. I refuse to answer on the ground it may have a tend-
ency to incriminate me.
Mr. Kennedy. Did you do any work to earn those expenses, or that
salary, Mr. Beck?
Mr. Beck. The same answer.
Mr. Kennedy. Now, in 1955, Mr. Chairman, the record shows that
Mr. Dave Beck, Jr.'s salary, paid by the International Brotherhood
IMPROPER ACTIVITIES IN THE LABOR FIELD 2421
of Teamsters, was $12,000 and that his expenses during that same
period of time was $15,962.89.
Did you receive $12,000 in salary in 1955 from the International
Brotherhood of Teamsters ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did you receive for that same year, 1955, $15,962.89
in expenses ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
(At this point. Senator Ervin entered the hearing room.)
The Chairsian. Do you deny these records are true ?
l^Ir. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
The Chairman. You have been interested in the teamsters union
and the organization as a labor organization in this country, in its
success, and in its reputation and its integrity. Are you willing to
cooperate to the extent of helping this committee investigate and
interrogate with respect to its activities ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
The Chairman. You realize that there are about 1% million mem-
bers of that organization who pay dues, do you not ?
Mr. Beck. I refuse to answer on the same ground.
The Chairman. You realize they have some rights, do you not, with
respect to how their money is expended ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incrimiante me.
The Chairman. Do you feel under any obligation to make an ac-
counting to those 1% million members of the organization who pay
dues for such money as you may have received from the organization
to pay your salaiy and expenses ?
Mr. Beck. I refuse to answer on the ground it may tend to incrim-
inate me.
The Chairman. In other words, to state an opinion as to whether
you think they have any rights or not, it might tend to incriminate
you?
Mr. Beck. I refuse to answer on the ground it may tend to incrim-
inate me.
The Chairman. You have taken the position, as I understand you,
that their rights to know what happens to their money and how their
union affairs are expended are subservient to your right to take the
fifth amendment.
In other words, you are taking the position that your right to take
the fifth amendment supersedes any rights they have to know how
their organization is operated and whether their money is properly
expended. Is that correct ?
Mr. Beck. I refuse to answer on the ground that it may tend to
incriminate me.
The Chairman. Proceed.
Senator Mi ndt. Mr. Beck, have you been to Canada recently ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
2422 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. What is there about a Canadian visit that would
be incriminating? They are friends of ours politically and econom-
ically and in other words
Mr, Beck. I refuse to answer on the same ground.
Senator Mundt. Did you go to Canada with Mr. McEvoy ?
Mr. Beck. I refuse to answer. It may have a tendency to in-
criminate me.
Senator Mundt. On your trip to Canada, did you utilize an auto-
mobile which was charged to the teamsters union ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Senator Mundt. Let me ask you a hypothetical question, Mr. Beck.
Do you think that charging your trip to Canada, to the teamsters
union, would be an appropriate charge, assuming it had been made ?
Mr. Beck. I refuse to answer on the same ground.
Senator Mundt. You cannot incriminate yourself on a purely hy-
pothetical question, and I am just establishing a hypothesis here, as-
suming that you had charged motel or hotel expenditures and automo-
bile expenditures in, shall we say, Canada or someplace, to the team-
sters union, that would be an appropriate charge.
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Senator Mundt. Do you know Mr. McEvoy ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Senator Mundt. I suppose, if you are taking the fifth amendment
about an acquaintanceship with a man by the name of McEvoy, there
must be something incriminating about his background, and I do not
know. Has he been involved in any criminal activities ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Senator Cuktis. Mr. Beck, have you engaged in politics in any form ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Senator Curtis. Do you know any officeholders ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Senator Curtis. That is all.
The Chairman. Are you married ?
(The witness conferred with his counsel.)
Mr. Beck. No.
(At this point. Senator McNamara entered the hearing room.)
The Chairman. Can you suggest any other question I can ask you
that you would answer ?
Mr. Beck. I have no comments.
The Chairman. Proceed.
Mr. Kennedy. The records show also in 1956, that you received in
salary from the International Brotherhood of Teamsters $12,375.75
as an international organizer. Is that correct?
Mr. Beck. I refuse to answer on the ground it may tend to in-
criminate me.
Mr. Keennedy. Could you tell the committee what you did for that
salary ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 242S'
Mr. Kennedy. During that same period of time, 1956, you received
in expenses $16,437.50, is that correct ?
Mr. Beck. I refuse to answer on the ground it may tend to in-
criminate me.
Mr. Kennedy. Could you tell the committee what you did to earn
those expenses ?
(The witness conferred with his counsel.)
Mr. Beck. Pardon me ?
Mr. Kennedy. Can you tell the committee what you did to earn
those expenses ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Mr. Kennedy. Did you put those expenses in your income-tax re-
turn of 1954, 1955, and 1956 ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Mr. Kennedy. That is humorous, is it, Mr. Beck ?
Mr. Beck. It is not humorous ; no.
Mr. Kennedy. You did not declare those expenses in your income-
tax return ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did you not receive those expenses for the use of
your car, in part, at least part of those expenses ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did you not make a statement in your income-tax
returns of 1955 that you did not receive any compensation for your
cars, and that the cars were not provided by the company for whoni
you worked? Did you not state that as a fact in your income-tax
returns ?
Mr. Beck. I refuse to answer on the ground it may have a tendency.
Mr. Kennedy. Are your income-tax returns for those vears accurate,
Mr. Beck?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Now, for the years 1954, 1955, and 1956 you received
$69,000, or approximately $09,000, from the International Brotherhood
of Teamsters. Could you tell the committee what you did for that
money ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Were your expense accounts approved by Mr. Dave
Beck,Sr.?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. IvENNEDY. Did you occasionally put in expense accounts and
said you were on confidential matters, and then have that approved
by Dave Beck, Sr. ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Mr. Kennedy. For instance, in December of 1955 did you put in a
voucher for $1,547.50 and say that you were on travel on confidential
matters ?
Mr. Beck. I refuse to answer on the ground it may incriminate me..
Mr. I^nnedy. And that this was O. K.'d by "D. B." ?
2424 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Beck, I refuse to answer on the same grounds.
Mr. Kennedy. Who is "D. B." ; do you know who that was ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Mr. Kennedy. And the same thing in for another $1,430 in the same
month; did you put in another voucher and say you were on con-
fidential matters ?
Mr, Beck. I refuse to answer on the same grounds.
Mr. Kennedy. Would you tell the committee what you were doing
for that money ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. I^nnedy. Did some months you put in vouchers for expenses
and give no bills of any kind to show how you paid that money or spent
that money?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. Kennedy. Did you ever do any work for the teamsters, Mr.
Beck?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Senator Ives. I would like to ask the witness a question. What is
your name ?
Mr. Carey. He didn't hear. •
Senator Ives. Wliat is his name ?
Mr. Beck. Dave Beck, Jr.
Senator Ives. For whom were you named ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Senator Ives. Thank you.
Senator Ervin. I respectfully suggest that the last answer is trifling
with the committee. He received that name when he was an infant
too small to have been guilty of any criminal offense regardless of
■what he did.
So I think he is making a travesty of the fifth amendment.
Mr. Carey. I think he still bears the name, and it is his present
name.
Senator Ervin. He asked him who he was named for, and that must
have happened in the normal course of events when he was even a
nonspeaking infant, before he was old enough to invoke the fifth
amendment and when he could not have been guilt.y of anj^ criminal
offense, regardless of what he may have done.
The Chairman. The Chair wishes to ask 2 or 3 questions. Were
you associated in the past or are you now associated with Mr. Joe
McEvoy in a business enterprise?
Mr. Beck, I refuse to answer on the same grounds; it may tend
to incriminate me.
The Chairman, Were you associated or are you now associated with
your father in any business enterpiise ?
Mr, Beck, I refuse to answer on the ground it may have a tendency
to incriminate me.
The Chairman, What relation are you to Joe McEvoy ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2425
The Chaihman. Do you honestly believe that if you answered that
-question truthfully, that a truthful answer thereto might tend to in-
criminate you ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
The Chairman. With the permission of the committtee, the Chair
orders and directs you to answer that question.
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Tlie Chairman. Is there any relationship between you and Dave
Beck, Sr. 'i
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
The Chairman. Do you honestly believe that if you answered that
question truthfully, that a true answer might tend to incriminate you?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
The Chairman. With the permission of the connnittee, the Chair
orders and directs yon to answer that question.
Mr. Beck. The same answer.
The Chairman. All right. Now, Mith respect to Mr. Dave Beck,
Sr., the Chair asks you again, have you been engaged in any business
enterpi'ise with Mr. Dave Beck, Sr. '?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
The Chairman. I will ask the question another way: Have you
been engaged in any legitimate lawful business enterprise with Dave
Beck,Sr.?
Mr, Beck. I refuse to answer on the gTound it may intimidate me —
I mean incriminate me. Pardon me.
The Chairman. I think you may have been right the first time. Do
you honestly believe that if you answered that question truthfully,
whether you had been engaged in any lawful legitimate business enter-
prise with your father, Dave Beck, Sr,, that a truthful answer to that
<juestion might tend to incriminate you ?
Mr. Beck. I refuse to ans^^'er on the ground it may tend to incrimi-
nate me.
The Chairman. With the permission of the committee, the Chair
orders and directs you to answer that cfuestion.
Mr. Beck. I refuse to answ^er on the same grounds.
The Chairman. You understand, do you, that these orders and di-
rections the Chair has given you in each instance continue throughout
the period that you remain on the witness chair?
(The witness conferred with his counsel.)
Mr. Beck. I refuse to answer on the same grounds.
The Chairman. Let me ask you, if you are going to take that posi-
tion, do you understand the English language? Do you want the fifth
amendment on that ?
Mr. Beck. I understand the English language.
The Chairman. All right. The Chair asked you if you understood
that these orders and directions the Chair is giving you on behalf of
the committee and by direction of the committee, to answer these ques-
tions where I specifically give you the order and direction — do you
2426 IMPROPER ACTIVITIES IN THE LABOR FIELD
understand that those orders and directions continue to you during
the time that you may remain on the witness stand ?
Mr. Beck. Yes, sir.
The Chairman. All right. Proceed, Mr. Counsel.
Mr. Kennedy. Mr. Chairman, we have been interested in the Union
Merchandizing Co., which was the company that sold the toy trucks
to the International Brotherhood of Teamsters.
Now, Mr. Dave Beck, Jr., was associated with the Union Mer-
chandizing Co, and I would like to ask you how you first came to be
associated with that company, Mr. Beck.
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Do you know Mr. Nathan Shefferman ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Do you know Mr. Shefferman ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. While you were associated with the Union Mer-
chandizing Co., the Union Merchandizing Co. sold some toy trucks to
the Teamsters Union and various local unions throughout the coun-
try. Did you have anything to do with that ?
Mr. Beck. I refuse to answer on the same grounds.
Mr. Kennedy. Did you have anything to do with the sale of those
toy trucks ?
Mr. Beck. I refuse to answer on the same grounds.
The Chairman. Did you regard that transaction or that business
venture as a legitimate lawful business venture?
Mr. Beck. I refuse to answer on the same ground, it may have a
tendency to incriminate me.
The Chairman. The Chair orders and directs you to answer that
question.
Mr. Beck. The fifth amendment.
The Chairman. Proceed.
Mr. Kennedy. During the period of time that you were receiving
salary and expenses from the International Brotherhood of Teamsters,
you were also receiving some $19,500.11 from the Union Merchandizing
Co. for the sale of these toy trucks, is that correct ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did you see at that time that there was any conflict
of interest for you, Mr. Beck ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. That you, on one hand, were working for the In-
ternational Brotherhood of Teamsters and on the other hand, you
were working for a company making sales to the Teamsters ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did you see anything wrong at that time, in that
action ?
Mr. Beck. I refuse to answer on the ground it may incriminate me.
Mr. Kennedy. Did you and your father discuss that this might be
improper ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2427
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. During that same period of time, Mr. Norman Ges-
sert, who is a relative of yours, received some $51,000 and he was also
working for the teamsters. Did either one of you see anything im-
proper in that?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. Kennedy. Did your father set you and Mr. Gessert up in that
business?
Mr. Beck. The same answer.
Mr. Kennedy. During this period of time, when you were promot-
ing the sale of the trucks, were you using teamsters funds or teamsters
expenses paid to you by the teamsters for your own expenses to pro-
mote the sale of those trucks ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. Kennedy. Now, we also have had some testimony regarding
your connection with the K and L Distributing Co. Are you familiar
with that company ?
Mr. Beck. I refuse to answer on the same grounds.
Mr. Kennedy. How did you happen to get into that company ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. Kennedy. Did you have some discussions with your father
before you went into that ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did your father put up the money for that company ?
Mr. Beck. I refuse to answer on the same grounds.
Mr. Kennedy. Now, there was some testimony by Mr. Levine when
he testified before the committee, that you were made president of
the company, on the threat of union trouble by your father. Is that
correct ?
Mr. Beck. The same answer.
Mr. Kennedy. Could you tell the committee how you became presi-
dent of the K and L Distributing Co. ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. You made a trip to St. Louis in order to get the dis-
tributorship from Anheuser-Busch. Could you tell the committee
what conversations you had at that time ?
Mr. Beck. I refuse to answer on the same ground.
Mr. Kennedy. There were a number of other people, companies,
that were bidding for the distributorship in the State of Washington.
Could you tell the committee what conversations you and your father
had in order to get that distributorship from Anheuser-Busch ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. At a later time you were also able to get the distribu-
torship up at Alaska. Can you tell us how you got that?
Mr. Beck. I refuse to answer on the same ground.
Mr. Kennedy. There was some testimony that you were able to get
extra carloads of beer sent into the State of Washington.
2428 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Beck. I refuse to answer on the same grounds.
Mr. Kennedy. During this period of time, when you were asso-
ciated with K and L Distributing Co. you had a man by the name of
Mr. Krieger working there. He was doing some work for you. Do
you know Mr. Krieger?
Mr. Beck. I refuse to answer on the grounds it may have a tendency
to incriminate me.
Mr. Kennedy. At that time Mr. Krieger was being paid by the
International Brotherhood of Teamsters. Were you familiar with
that?
Mr. Beck. I refuse to answer on the grounds it may tend to incrimi-
nate me.
Mr. Kennedy. Did you feel that was proper, Mr. Beck, to have him
working at tlie K and L Distributing Co. and at the same time being
paid by the International Brotherhood of Tejimsters ?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. Kennedy. Now, are you familiar with the company, Sunset
Distributing Co.?
Mr. Beck. I refuse to answer on the ground it may tend to incrimi-
nate me.
Mr. Kennedy. Does your father have any connection with the Sun-
set Distributing Co.?
Mr. Beck. The same answer.
Mr. Kennedy. Do you have any connection with the Sunset Dis-
tributing Co. ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Now, after the teamsters made the loan of $1,500,000
to the Freuhauf Trailer Co., there were some favors asked for the
Sunset Distributing Co. by your father. Are you familiar with that ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. Did you put in a request to have some refrigerator
trucks sent there so that you could store your beer?
Mr. Beck. I didn't hear the first part.
Mr. Kennedy. Did you make some arrangements with the Freuhauf
Trailer Co. to have some refrigerator trucks sent into Seattle so that
the beer could be stored?
Mr. Beck. I refuse to answer on the groimd that it may have a tend-
ency to incriminate me.
Mr. Kennedy, And did you make a request of Mr. Freuhauf to pur-
chase a boat for you at a cut price and then have it sent from Detroit
to Seattle free?
Mr. Beck. I refuse to answer on the same grounds.
Mr. Kennedy. Now, I was wondering about jom- purchases from
Mr. Shelf erman. Did you make some purchases from Mr. Shefferman ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. According to the record that we have here you made
some purchases and these purchases were paid out of union funds. I
would like to ask you about that. For instance, did you buy a washing
machine for $65.50 that was paid for with union funds?
IMPROPER ACTIVITIES IN THE LABOR FIELD 2429
Mr. Beck. I refuse to answer on the ground it may incriminate mo.
Mr. Kennedy. And a deep freezer for $250.90 paid for out of union
funds ?
Mr. Beck. The same answer.
Mr. Kennedy. And an automatic deluxe washer for $142.82 paid for
out of union funds ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. And 2 aknninum boats for $196.50 ?
Mr. Beck. The same answer.
Mr. Kennedy. And a vacuum cleaner for $57? Did you get that
from Mr. Shelf erman, and it was paid for out of union funds ?
Mr. Beck. I refuse to answer the question on the ground it may have
a tendency to incriminate me.
Mr. Kennedy. How about camera equipment for $590 ?
Mr. Beck. The same answer.
Mr. Kennedy. And lenses for the camera for $107.50 ?
Mr. Beck. The same answer.
Mr. Kennedy. And a thing for a camera, $2.31 ? Did you get any-
thing for $2.31 which was called a thing-a-ma-jig for the camera?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
I. ^J- ^PT^*"^'- -^ T^ ^^* ^'«r $218.99, was that purchased for you
by Mr. Shefferman with union funds ?
Mr. Beck. The same answer.
The Chairman. Mr. Beck, do you regard these transactions, if they
occurred, as the same thing as theft from the union ?
Mr. Beck. I refuse to answer.
The Chairman. You do not want to comment on that? Is that
what you think, that it might incriminate you, because you do think
]t IS the same thing as theft ?
(The witness conferred with his counsel.)
Mr. Beck. I think the answer to those questions would have a
tendency to incriminate me.
The Chairman. Maybe yon are right. Proceed.
Mr. Kennedy. Mr. Chairman, I liave here a folder of the bills and
purchases for Mr. Dave Beck, Jr., all paid for out of union funds, and
they exceed $5,000. '
Tlie Chairman. We have established that by previous testimonv?
Mr. Kennedy. Yes; we have, Mr. Chairman.
The Chairman. If you have someone identify these, I will have
them made an exhibit for reference in the record.
Mr. Kennedy. I can identify them, Mr. Chairman.
The Chair^ian. They may be made exhibit No. 212 for reference
only, so they will be a part of the official file. As I understand, these
nave all been sworn to ?
Mr Kennedy. Mr. Shefferman has put these documents in and
identified them.
The Chairman. Mr. Shefferman identified them ? I jus^ want them
properly identified. They may be made exhibit No. 212 for refer-
ence.
(The documents referred to were marked "Exhibit No 212" for ref-
erence and may be found in the files of the select committee.)
2430 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kjinnedy. I wonder, would you feel that was a proper use of
union funds, for these purchases for you out of union funds ?
Mr. Beck. I refuse to answer on the ground it may have a tend-
ency to incriminate me.
Mr. Kennedy. Do you feel it is a proper use of union funds to buy
you a television set ?
Mr. Beck. I refuse to answer on the ground it may have a tendency
to incriminate me.
Mr. Kennedy. I was wondering what you felt the teamsters would
feel about their union dues being used to buy you a washer or a camera.
Mr. Beck. I refuse to answer on the ground it may have a tend-
ency to incriminate me.
(At this point, Senator McNamara withdrew from the hearing
room.)
( Present at this point in the proceedings were Senators McClellan,
Ives, and Ervin.)
The Chairman. The Chair will state in response to a subpena served
upon the International Brotherhood of Teamsters, Chauffeurs, Ware-
housemen, and Helpers of America, that we have received from their
official records a complete statement, or purportedly a complete state-
ment, of the amount of money that Mr. Dave Beck, Jr., has received
from the international union in salaries and expenses.
The two documents received under subpena, the salary will be made
exhibit No. 213 for reference and the expense records No. 214 for
reference.
These documents were received under subpena from the Teamsters
International Union records.
The documents referred to were marked "Exhibits Nos. 213 and
214" for reference and may be found in the files of the select com-
mittee.)
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. Are there any other questions ?
The Chair again, before you leave the witness stand, orders and
directs you to answer those questions which the Chair in the course of
the interrogation of you ordered and directed you to answer.
Do you still refuse to answer those questions ?
(The witness conferred with his counsel.)
Mr. Beck. Yes, sir.
The Chairman. Are there any other questions ?
You may stand aside for the present. You will remain here subject
to call until we hear the next witness.
Mr. Joe McEvoy, come around, please.
Mr. McEvoy, will you be sworn? You do solemnly swear that the
evidence you shall give before this Senate select committee shall be
the truth, the whole truth and nothing but the truth, so help you God ?
Mr. McEvoy. I do.
TESTIMONY OF JOSEPH McEVOY, ACCOMPANIED BY HIS COUNSEL,
EDWAED L. CAKEY
The Chairman. State your name and your place of residence and
your business or occupation.
Mr. McEvoy. My name is Joseph McEvoy; I live at 26822 45th
Street NE.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2431
The Chairman. Do you have counsel present to represent you ?
Mr. McEvoY. Senator, I do.
The Chairman. The same counsel that represented the preceding
witness 'i
Mr. McEvoY. Yes, sir.
Mr. Carey. Yes, Mr. Chairman. Edward L. Carey is my name.
The Chairman. The record will show the same counsel is repre-
senting the witness.
Now, Mr. McEvoy, the Chair had asked you Avhat is your occupa-
tion, business or occupation, at present.
Mr. McEvoY. I refuse to answer on the ground the answer to such
a question might tend to incriminate me.
The Chairman. Do you honestly believe that if you gave a truth-
ful answer to that question, the truthful answer might tend to incrim-
inate you ?
Mr. McEvoY. I refuse to answer that question because it might tend
to incriminate me.
The Chairman. The question is, and I trust you understand it, and
if you do not I will try to make it clear, do you honestly believe that
if you gave a truthful answer to the question as to what is your present
business or occupation, such truthful answer might tend to incriminate
you?
Mr. McEyoY. I refuse to answer on the ground that the answer to
such a question might tend to incriminate me.
The Chairman. You fully understand the question, do you ?
Mr. McEvoY. Yes, sir.
The Chairman. Then by permission of the committee, the Chair
orders and directs you to answer the question.
Mr. McEvoY. I refuse to answer on the ground it might tend to
incriminate me.
The Chairman. All right, Mr. Counsel, you may proceed.
Mr. Kennedy. Mr. McEvoy, could you tell the committee what
your connection with the International Brotherhood of Teamsters
has been ?
Mr. McEvoY. I refuse to answer on the ground it might tend to
incriminate me.
The Chairman. Again the Chair asks you, do you honestly believe
a truthful answer to that question might tend to incriminate you?
Mr. McEvoY. I refuse to answer on the ground it might tend to
incriminate me.
The Chairman. With the permission of the committee, the Chair
orders and directs you to answer the question.
Mr. McEvoY. I refuse to answer on the ground it might tend to
incriminate me.
The Chairman. Apparently, we are going to have a lot of this fifth
amendment again, and the Chair wishes to announce to you now, as
we proceed, that each time the Cliair orders and directs you to answer
the question, that order and directive will continue throughout your
interrogation so long as you are on the witness stand.
Do you understand that ?
Mr.'McEvoY. Yes, sir.
The Chairman. Proceed.
O— 57— pt. 7 29
2432 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Have you been connected with the International
Brotherhood of Teamsters ?
Mr. McEvoY. I refuse to answer on the ground it mi^lit tend to
incriminate me.
Mr. Kennedy. In what capacity were you connected with them?
Mr. McEvoY. 1 refuse to answer on the ground it might tend to in-
criminate me.
Mr. Kennedy. Have you received any salary or expenses from the
International Brotherhood of Teamsters?
Mr. McEvoY. I refuse to answer on the ground it might tend to
incriminate me.
Mr. Kennedy. Were you doing any w^ork work for them?
Mr. McEvoY. I refuse to answer on the ground it might tend to
incriminate me.
Mr. Kennedy. How did you happen to become connected with the
teamsters ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Our records, Mr. Chairman, show that in 1955, Mr.
Joseph McEvoy received a salary paid by the International Brother-
liood of Teamsters of $7,200, and during that same period of time re-
ceived in expenses $7,660.80.
Is that correct, Mr. McEvoy?
Mr. McEvov. I refuse to answer that question on the grounds that
it might tend to incriminate me.
The Chairman. The Chair will ask you again : Do you honestly be-
lieve, will you state under oath that you honestly believe, that a truth-
ful answer to that question might tend to incriminate you?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
The Chairman. With the permission of the committee, the Chair
orders and directs the witness to answer the question.
(The witness conferred with his counsel.)
Mr. McEvoY. I refuse for the same reason.
The Chairman. All right.
Mr. Kennedy. Would you tell the committee how you became con-
nected with the International Brotherhood of Teamsters?
Mr. McEvoy. I refuse to answer on the grounds it might tend to in-
criminate me.
Mr. Kennedy. What work did vou do in order to get the salary of
$7,200?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. What expenses did you have that the International
Brotherhood of Teamsters should pay you $7,660 in 1955 ?
Mr. McEvoY. I refuse to answer on the grounds it might tend to
incriminate me.
Mr. Kennedy. Did you submit any detailed vouchers for those
expenses ?
Mr. McEvoY. I refuse to answer on the grounds it might lend to
incriminate me.
Mr. Kennedy. In 1956, the salary was also $7,200, and the expenses
$7,660.80.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2433
Would you tell the committee what you did for that salary and those
expenses in 1956?
Mr. McEvoY. I refuse to answer on the grounds it might tend to
incriminate me.
Mr. Kennedy. Did you do any work for the teamsters?
Mr. McEvoY. I refuse to answer on the grounds it might tend to
incriminate me.
(At this point, Senator Ervin withdrew from the hearing room.)
The C'liAiKMAN. Let me ask the witness this: You were just asked
the question if you did any work for the teamsters, by the counsel.
You invoked the tif th amendment, that it might tend to incriminate you
if you answered. Do you honestly believe that if you answered that
question truthfully that a truthful answer to that might tend to in-
criminate you ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it Tui;^lit tend to incriminate me.
The Chairman. You are ordered and directed to answ^er the ques-
tion,
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
The Chairman. With the permission of the committee, the Chair
gives you that order and directive again, to answer the question
whether you honestly believe that a truthful answer would tend to
incriminate you.
Mr. McP^voY. I refuse for the same reason. Senator.
Mr. Kennedy. Did you do any work for the teamsters during 1955
and 1956?
Mr. McP^voY. I refuse to answer on the grounds that it might tend to
incriminate me.
Mr. Kennedy. During that period of time, were you not driving a
truck for the Sunset Distributing Co. ?
Mr. McP2voY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. So, in fact, you were doing no work for the teamsters ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Did Mr. Dave Beck, Sr., put you on the payroll of
the teamsters ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Did he want you to act as a bodyguard for his son,
Dave Beck, Jr. ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Was that the reason that you were put on as an
employee of the International Brotherhood of Teamsters?
Mr. McP]voY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. It is a fact that you never did any work for the
teamsters; is that right, Mr. McP^voy?
Mr. McEvoY. I refuse to answer on the grounds that it might tend to
incriminate me.
The Chairman. Just a moment.
2434 IMPROPER ACTIVITIES IN THE LABOR FIELD
Do you honestly believe that a truthful answer to that question might
tend to incriminate you ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
The Chaikman. The Chair orders and directs you to answer this
question : Do you honestly believe that a truthful answer to the ques-
tion as to whether you did any work for the teamsters would tend to
incriminate you? Do you honestly believe that ?
(The witness conferred with his counsel.)
Mr. McEvoY. I refuse to answer on the same grounds.
The Chairman. With the permission of the committee, the Chair
orders and directs you to answer that question.
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Could you tell the connnittee how you became asso-
ciated with the Sunset Distributing Co. ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. The Sunset Distributing Co. distributes beer in and
around Seattle, does it not ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Do you have contracts with the teamsters, the Sun-
set Distributing Co. ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Does Mr. Dave Beck, 8r., own the land on which
the Sunset Distributing Co. is built ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it may tend to incriminate me.
Mr. Kennedy. Does he have an interest in the Sunset Distribut-
ing Co.?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
Mr. Kennedy. Did he guarantee the note on which the Sunset Dis-
tributins: Co. — the building — Avas ])urchased?
Mr. McEvoy. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. I am wondering, also — we have had some testimonv
on the National Mortgage Co. Are you familiar with the National
Mortgage Co. ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr, Kennedy. You have a third interest in the National Mortgage
Co.; is that right?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Where did the money come from tliat you ])ut up
for the National Mortgage Co. ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might teiul to incriminate me.
Mr. Kennedy. You ])ut up some $85,291.66; is that correct?
Mr. McP^voY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2435
Mr. Kennedy. Where did you <jrQt the $85,000 ^
Mr. Mc'EvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Did that come from Mr. Dave Beck, Sr. ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Were there conversations with Mr. Dave Beck, Sr.,
prior to the time that you obtained an interest in National Mort-
gage Co. ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it may tend to incriminate me.
Mr. Kenn?:dy. Since the National Mortgage Co. has been formed,
there has been some $9 million of teamsters" funds that have been
channeled through the National Mortgage Co. Was there some kind
of a guaranty of that prior to the time the National Mortgage Co. was
formed ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. We have had testimony to that affect, and I was
wondering if you could throAv any light on it.
Mr. McEvoY. I refuse to answer that question on the grounds it
might tend to incriminate me.
Mr. Kennedy. After you put the $35,000 up, did you take any
interest in the National Mortgage Co. after that ?
Mr. McEvoY. I refuse to answer that question on the grounds it
might tend to incriminate me.
Mr. Kennedy. What arrangements did you have w4th Mr. Dave
Beck, Sr., regarding the $35,000 that was put up ?
Mr. McEvoY. I refuse to answer that question on the grounds it
might tend to incriminate me.
Mr. Kennedy. The National Mortgage Co. had some business con-
tracts with the Linton Construction Co. Do you know anything about
that?
Mr, McEvoy. I refuse to answer that question on the grounds it
might tend to incriminate me.
Mr. Kennedy. Does Mr. Dave Beck, Sr., have an interest, direct or
indirect, in the Linton Construction Co. ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. There was a company formed also called the Insur-
ance Brokers, Inc. Could you tell us about the Insurance Brokers,
Inc.?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. You also have a third interest, I believe, or a fourth
interest, in the Insurance Brokers, Inc. ?
Mr. McP^voY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Were there discussions with Dave Beck, Sr., regard-
ing that company, also ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. AVas the insurance for the teamsters to be channeled
through Insurance Brokers, Inc.? Were there conversations like
that?
2436 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. McEvoY. I refuse to answer that question on the "[rounds that
it mijjht tend to incriminate me.
Mr. Kennedy. WouW you tell tlie committee how you were able to
obtain the insurance for the Pontiac cars for the Eastern Conference
of Teamsters from Insurance Brokers, Inc. (
Mr. McEvoY. I refuse to answer that question on the grounds that
it mirjht tend to incriminate me.
Mr. Kennedy. iVre you familiar with the arrangements between
Mr. Donald Hedlund and Mr. Dave Beck, Sr., on Insurance Brokers,
Inc. ?
Mr. McEvoY. I refuse to answer that question on the jijrounds that
it mi^ht tend to incriminate me.
Mr. Kennedy. Are you familiar with the arrantrements in National
Mortfja^e Co. between Mr. Donald Hedlund and Mr. Dave Beck, Sr.?
Mr. McEvoY. I refuse to answer that question on the jjrounds that
it mijrht tend to incriminate me.
Mr. Kennedy. How about the investment company, are you fa-
miliar with that?
Mr. McEvoY. I refuse to answer that question on the <T:rounds that
it mi^ht tend to incriminate me.
(At this point, Senator Ervin entered the hearin<j room.)
(At this point. Senator Ives withdrew from the hearing room.)
Mr. Kennedy. We have some information, and I am wonderinp;
if you can help us. When we were out in Seattle, we saw you at one
time drivinn: into the Sunset Distributin^r Co., and you were drivin":
a station wagon. Would you tell the committee where you obtained
that station wagon ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. And it was a Mercury station wagon, as I remem-
ber it.
Could you tell the committee anything about that?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. We checked on that Mercury station wagon. We
found that it was registered in the Southern Conference of Teamsters.
Could you tell the committee anything about that?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Why should you be driving a truck or a station
wagon to the Sunset Distributing Co. and using it there, a station
wagon that is registered in the Southern Conference of Teamsters?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Did you ever pay for that station wagon?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. The station wagon was purchased — it was a 1955. It
was purchased back in 1955. How did you happen to obtain that
station wagon ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. The checking that we have done was that — well, we
found that there were instructions given, Mr. Chairman, by Mr. Dave
IMPROPER ACTIVITIES IN THE LABOR FIELD 2437
Beck, Sr., that the Southern Conference of Teamsters should pur-
chase a station wagon up in Chicago.
Do you know why it was liandled like that ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. And the station wagon ends up by being driven by
you. Can you give us any exphmation of that ?
Mr. McEvoY. I refuse to answer that question on the grounds it
might tend to incriminate me.
Mr. Kennedy. There were two station wagons, actually, purchased.
Mr. Al Irvine of Sunset Distributing Co. received another station
wagon, are you familiar with that, in 1955 ?
Mr. M(^EvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. That was also purchased by the Southern Confer-
ence of Teamsters. There was a check for $6,518.50 for those 2 station
wagons. Are you f amil iar with that ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Shortly afterward, Mr. Irvine paid for hfs station
wagon, but you liave never paid for yours, Mr. McEvoy. Do you
intend to pay for the station wagon ?
Mr. McP^voY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Have you received any other moneys or gifts from
the International Brotherhood of Teamsters other than your salary
and expenses that I have listed here ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. I was wondering, you went to Canada recently. Why
did you go to Canada ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. You and Dave Beck, Jr., and Norman Gessert, three
witnesses that we were looking for, all ended up in Canada. Could
you tell the committee anything about that trip ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Were you instructed by Dave Beck, Sr., to go to
Canada ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Your expenses paid in Canada; were they paid by
the teamsters ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. I am wondering if you think it is a proper use of
union funds for your trip to have any of your expenses paid to Canada
by the teamsters. Do you tliink that is a proper use of union funds,
when you are trying to avoid subpena by this committee ?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
2438 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Do you think it is a proper use of union funds for
tlie Southern Conference of Tesinisters to use their teamsters funds
to purchase a Mercury station wagon for you ?
Mr. McEvoY. I refuse to answer the question on the grounds that
it might tend to incriminate me.
Mr. Kennedy. Tliat is all, Mr. Chairman.
The Chairman. What relation are you to Dave Beck, Sr. ?
(The witness conferred with his counsel.)
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
The Chairman. What relation are you to Dave Beck, Jr.?
Mr. McEivoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
The Chairman. What relation are vou to Mrs. Dave Beck, Sr. ?
(The witness conferred with his counsel.)
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
The Chairman. Do you honestly believe that if you gave a truthful
answer to the question, "What relation are you to Dave Beck, Sr.,"" and
"What relation are you to Dave Beck, Jr.,'" and "What relation are
you to Mrs. Dave Beck, Sr.," do you honestly believe that the giving
of a truthful answer to those questions might tend to incriminate you?
Mr. McEvoY. I refuse to answer that question on the grounds that
it might tend to incriminate me.
The Chairman. By permission of the committee, the Chair orders
and directs you to answer those questions.
(The witness conferred with his counsel.)
Mr. McEvoY. I respectfully refuse to answer on the grounds that it
might tend to incriminate me.
The Chairman. You understood that you are refusing to answ^er,
notwithstanding the orders and directions of the committee for you
to answer? You understand that, do you ?
Mr. McEvoY. Yes, Senator.
The Chairman. Is there any other question that I can ask you that
you would answ^er?
You have answered that one.
Mr. McEvoY. I have no comment on that. Senator.
The Chairman. You have none.
Do you have any comment u])on the suggestion that you might owe
a duty and obligation to the million and a half teamster members in
this country to give some explanation of the money that you have got-
ten from the teamster union ?
(The witness conferred with his counsel.)
Mr, McEvoY. No, sir.
The Chairman. Sir ?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
The Chairman. In other words, you honestly believe, do you, that if
you gave truthful answers reir<H-ding your connections with, and the
moneys you have received from the teamsters union organization, that
a truthful answer miirht tend to incriminate you? Do you honestly
believe that?
Mr. McEvoY. I refuse to answer on the grounds that it might tend
to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2439
The Chairman. You are ordered and directed by the authority of
tlie committee, and tlie i)ermission of the committee, you are ordered
and directed to answer the question whether you lionestly believe that
truthful answers might tend to incriminate you.
Mr. McEvoY. Senator, I respectfully refuse to answer that question
on the grounds that it miffht tend to incriminate me.
The Chairman. Are there any other questions?
Mr. Kennedy. Mr. Chairman, we have here the documents which are
on the Mercury station wagon.
The Chairman. I present you here certain documents, photostatic
copies of documents, regarding a Mercury station wagon, about which
you have been interrogated. I ask you to examine these documents
and state whether or not you identify them.
(Documents handed to witness.)
(The witness conferred with his counsel.)
(At this point, Senator Mundt entered the hearing room.)
Mr. McEvoY. I refuse to answer that question on the grounds that
the documents might have a tendency to incriminate me.
The Chairman. Those documents that have been exhibited to the
witness on which he takes the fifth amendment, let them be made ex-
hibit No. 215, for reference only.
(The documents referred to were marked "Exhibit 215," for refer-
ence and may be found in the files of the select committee.)
The Chairman. Are there any further questions?
Mr. Kennedy. Mr. Chairman, the salary of Mr. McEvoy is con-
tained in exhibit No. 213. and the expenses would be contained in this
document which we have also received from the International Brother-
hood of Teamsters.
The Chairman. Was this received under subpena?
Mr. Kennedy. Yes, Mr. Chairman.
The Chairman. It may be made exhibit No. 216, for reference,
(The document referred to was marked "Exhibit No. 216," for refer-
ence, and may be found in the files of the select committee.)
Mr. Kennedy. The documents Mr. McEvoy just examined are the
documents dealing with the present registry of the car. These docu-
ments that I have here deal with the purchase of the car and show
that the moneys were taken from the Southern Conference of Team-
sters.
The Chairman. Were these documents obtained under subpena?
Mr. Kennedy. Yes, they were, Mr. Chairman, from the company in
Chicago who sold the car and from the Southern Conference of Team-
sters.
The Chairman. These documents may be made exhibit No. 217, for
reference.
(The documents referred to w^ere marked "Exhibit No. 217," for
i-eference and may be found in the files of the select committee.)
The Chairman. Are there any other questions?
Are there any questions, Senators?
Senator Mundt. I have no questions, Mr. Chairman.
Senator Ervin. I have no questions.
The Chairman. The Chair addresses his remarks to both witnesses
and to their counsel, who is present, to Mr. McEvoy, who is now^ on
the stand, and to Mr. Dave Beck, Jr., who testified a few moments ago.
2440 IMPROPER ACTIVITIES IN THE LABOR FIELD
and to their counsel : You will remain under your present subpena,
subject to recall by the committee at any time it wishes to interrogate
you further. You are not released from subpena. You are only be-
ing excused temporarily until such time as the committee may desire
to recall you. You are placed under that recognizance.
Do each of you acknowledge and recognize the order of the Chair ^
Mr. McEvoV. Yes, Senator.
Mr. Dave Beck, Jr. Yes.
The Chairman. Let the record show that they both agree.
Does counsel agree ?
Mr. Carey. That is correct.
The Chairman. If there is nothing else, the Chair would like to
make this observation : I think on the fifth amendment that our Found-
ing Fathers, I think, in adopting it, had a noble purpose and a right
purpose. I doubt if they ever conceived or could envision that the time
would come when such flagrant abuse would be made of it as has been
made during the course of these proceedings since this committee
started public hearings, and particularly the demonstration of the
abuse of it made here today.
The Chair has asked the witnesses, and other members of the com-
mittee and chief counsel have asked the witnesses, these questions, that
apparently, and as I honestly believe, a truthful answer thereto could
not possibly, in any way, come near, might, or otherwise, toward in-
criminating the witnesses.
I do not believe the fifth amendment was intended as a shield and
as a protection for criminals. It was to protect the innocent.
I do not believe — and the Chair may be wrong, but I do not believe —
that capricious use of the fifth amendment, when a witness says an
answer might tend to incriminate him, I do not believe that he is en-
titled to invoke the fifth amendment unless he can also state on oath,
and he is on oath when he testifies, without perjuring himself, that
he honestly believes that if he answered the question truthfully the
truthful answer might tend to incriminate him.
If that can be done, I think we have to try to find out in this coun-
try, for the safety of our society, for the protection of human rights-
and human dignity, I think we have to find out — and I know of no
way to find out except to place this situation, this record, before a
court to determine even if it has to go to the highest Court in the
land.
Therefore, the Chair is going to order, with the permission of the
other members of the committee, order and direct, the staff to immedi-
ately prepare contempt proceedings against these two witnesses.
if you are right in the position you have taken here today, and the
courts finally sustain your position, then America faces a great danger.
Law enforcement can break down all over this country in every proc-
ess, every judicial process, every investigating process, every quasi-
judicial process.
I think this is vital, this issue is vital, and it must be settled.
I regret to have taken that position, but this committee, in my judg-
ment, would be derelict in its duty if it did not so recommend to the
Senate, and the Senate would be derelict in its duty if it did not vote
contempt proceedings against you. The committee, therefore, will
proceed accordingly.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2441
Senator Mindt. ]Mr. Chairinan, si)oakin<r for the Republican side
of this conunittee, I would like to associate myself completely and em-
phatically with what the chairman has just said in the committee room
this mornin<r, in the ])resence of these witnesses.
I am perfectly confident that the committee will vote the contempt
citation that the Chair has reconnuended, and I am equally confident
that the United States Senate will support this motion when it comes
to the Hoor of the Senate.
I think the time is lon<j past when we should have from tlie judiciary
of the Ignited States a clear-cut decision as to whether or not witnesses
can come before our committee and utilize the tifth amendment in a
completely irresponsible, frivolous, and capricious nuniner. There is
not anybody in tlie committee room, there is not anybody listening to
these proceedintjs on the radio, who would doubt the fact that some of
the responses we have had from these witnesses and from other wit-
nesses in utilizint; the fifth amendment are efforts to deny information
to the committee which, if provided, could not conceivably incriminate
the witnesses utilizing- the fifth amendment.
I am confident our constitutional forefatliers never had that in mind.
I am confident that the leoislative branch of the Government and the
people of America, if the courts rule that anybody can use the fifth
amendment for any answer, without any basis in fact of incrimination,
the people and the Cono-ress have the power and the means, and can
find the methods, for circumscribing that kind of frivolous use of the
fifth amendment.
I say that despite tlie discouraging decision of the Supreme Court
yesterday, when it gave a very severe setback to law and order and
decency in tliis country by requiring that the law enforcement officials
of the Federal Govei-nment disclose their secret files, their means of
operation, and their methods of procedure, in dealing with Commu-
nists, subversives, espionage agents, and other criminals.
Obviously, if we are going to continue to make easy the path of the
wrongdoer, and to make impossible the procedures of law-enforcement
officials. Congress must step in and initiate the action which may have
to ultimately be supported by the country as a whole through some kind
of constitutional amendment.
I am confident that a country as strong as ours is not to be denied the
capacity and the i)roceures and the powers required for its own self-
interest and for its own security.
When you set up barriers of all kinds of legal technicalities, and
Supreme Court decisions, which play into the hands of kidnapers and
conspirators, play into the hands of bank robbers, counterfeiters, Com-
munists, and espionage agents, I think the time is here when Congress
has to act affirmatively to protect America against that kind of inter-
pretation of the law, and that kind of use of the fifth amendment.
The Chairman. Thank you very much. Senator.
Senator Ervin ?
Senator Ervin. Mr. Chairman, I agree thoroughly with the Chair's
views that before one is entitled to invoke the protection of the fifth
amendment he must be willing to state upon oath that a truthful
answer to the (piestion put to him will tend to incriminate him. If the
fifth amendment did not have a lot of vitality, it would have been worn
out by this procedure.
2442 IMPROPER ACTIVITIES IN THE LABOR FIELD
We have a situation wliere a man comes in and invokes the fiftli
amendment wlien lie is asked if lie is ac(iuainted with his own father.
I happen to know Dave Back's father from having sat liere at the
table and watched him, and 1 think I could say now that 1 know Dave
Beck and that the mere fact that I knew h'un would not tend to in-
criminate me in any way, in any respect.
I certainly, for one, think that this procedure is makiufj a travesty
of the fifth amendment, and I would vote, as a member of the com-
mittee, to recommend to the Senate that proceedin<rs be instituted
against these parties for contempt of the Senate. I see no other course
to pursue in this committee.
The Chairman. If there is nothing further, the witnesses will re-
main under recognizance to reappear upon reasonable notice being
given to them.
If there is nothing further, the committee will stand in recess until
10 o'clock Thursday morning.
(Whereupon, at 11:26 a. m., the committee recessed, to reconvene
at 10 a. m., Thursday, June 6, 1957.)
(Members present at the taking of the recess: Senators McClellan,
Ervin, and Mundt.)
APPENDIX
Exhibit No. 136
2444 IMPROPER ACTIVITIES IN THE LABOR FIELD
IMPROPER ACTIVITIES IN THE LABOR FIELD 2445
2446 IMPROPER ACTIVITIES IN THE LABOR FIELD
P"'"iS7
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IMPROPER ACTIVITIES IN THE LABOR FIELD 2447
2448 IMPROPER ACTIVITIES IN THE LABOR FIELD
I
IMPROPER ACTIVITIES IN THE LABOR FIELD 2449
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2450
IMPROPER ACTIVITIES IN THE LABOR FIELD
^^^^-^^^/^
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IMPROPER ACTIVITIES IN THE LABOR FIELD 2451
Exhibit No. 138C
etc .
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2452 IMPROPER ACTIVITIES IN THE LABOR FIELD
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tne ririal results — and be aur«
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IMPROPER ACTIVITIES IN THE LABOR FIELD 2453
Exhibit Xo. 138D
2454 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 1;38E
ANHEUSER-BUSCH. INC.
INTC-OrriCE CORRESPONDENCE
OK *U. Hem-IM BK CAftCCUL TO CHECK . • i NAM« OH OC^AfrTMeNT FOB WHOM WBW.V I* lNT«NO«
IMPROPER ACTIVITIES IN THE LABOR FIELD 2455
ANHEUSER-BUSCH. INC.
iNTrnorrtcr conRESPONorNCK
ON Au. «tiH.i«» mm CAntrui. to cmcck i v » maim «n» oei»Airr»«r»rr ron wmou »b«.y la
2456 IMPROPER ACTIVITIES EST THE LABOR FIELD
Exhibit No. 138F
ANHEUSER-BUSCH. INC. ^ ^
INTEROf^FICE CORReSPONOCNCE
/^.Tf'
tsKX. n%i^\M.m •« cAnsrui. to cmick
NAMi on ori«A»rT««ei«T con WHOM nwn.^ m tHrmnom
IMPROPER ACTIVITIES IN THE LABOR FIELD 2457
ANHEUSER-BUSCH. INC.
iNTcw-orncE cohwesponoence
-- Pase 2
o-T, 10/11/50
jgnrds.
yU^
OH »U. RKPLim ■■ CAB«rOl. TO CHKCK (V) NAME OH OWAWrwrwT FOKT ¥mOm mcn.v IS (NTCNOKO
2458 IMPROPER ACTIVITIES IN THE LABOR FIELD
ANHEUSER-BUSCH. INC.
l^rrEw-oF^lcc coRRESPONoewce
r-v-f 3 —
aid
•■ CAMcrxn. TO cmcck iv, mamb om owsmtmcnt row WMOM NKPLV •• IMTVttOaS
IMPROPER ACTIVITIES IN THE LABOR FIELD 2459
Exhibit No. 138G
K. \ I ■■ I I ' ^ \, , 71". M«» fj^ • • 'j"**^
^>F ^Vv
■^#(A^o
a// A. .A
2460 IMPROPER ACTIVITIES IN THE LABOR FIELD
a n
Id
y ,4//'j^*,^ AA^A*^ "f SW:^
uMk^ ^i
'(• i»<r/
IMPROPER ACTIVITIES IN THE LABOR FIELD 2461
dL //
- -4
2462 IMPROPER ACTIVITIES IN THE LABOR FIELD
^k/Duo^ ' lOfJ *,aM ~ MJ&>c/^^hJ< M^^J
C^<//^ ^ i.
1
r>
b
I S.4JJ i^< (i
IMPROPER ACTIVITIES IN THE LABOR FIELD 2463
Exhibit No. 138H
ANHEUSER-BUSCH. INC.
ON ALL *E«.»e« Be CARCrUi. TO CHCCK (v» NAMK OW Of^AltTMtNT I'd* WHOM BW-Y I* INTBMO«C
2464 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 1381
ANHEUSER-BUSCH. INC.
INTER-Or-<-ICE COWRESPONOENCE
Bd, Or<gon Kortfa Pacific
y
Joha FlBBxigajB Y o.T- NoT«iib«r 20, 1950
I-
V
Holland B. T5JMW8 "^ f.. ..j, • S««ttl«, Wa^xlagton Territory
On Tussday »oralag, SJoT«»t)«r 14^ 1950, Jay Rid«out and ■yeaif Jclck»d off
the %Zt War Bond and 254( par oa8« lnc«ntlT« '»iX& tba MLLesman of S & L
B«T»rag« Coapany, Inc. In S«ettl«. ■• oouia not Includ* th« drlT^ra tn
this plan as th« uaioa will not psiKit any typ« of «n inc«itlY«. Tli»
ftaleaien wara rary wuca plaasad nlth tlie prt>apecte of tb« additional nonay
and wa usad last ya«r'8 aalas of the oorraspondijig ■o»th as a baaa «hlch
they KiiBt equal and azoaad to collect. Of ooiuraa aa undaratajtd tbat tM.s
fi^ra oovarad a lot more territory last year but tba figure caa eeaily
be passad la their present territory If thay »ill writ.
Tna direct sMpaant to Br«nert»a Naral Base cartRiaiy did bring this
oJUganlzatlon to life, and they adjusted their ailitary prloaa and for the
first tiaa are really concentrating on the «llitary outlets and getting
the bxislDaaa. Ur. l-«naa aald ha did not think that I wuld sail direct
but that he was fintly convinced now that I meant juet exactly what I eaid
when I tola M.« to gat the bualaasa or wa would and that thay oartalaiy
ware giing to hold the Bilitary buatnaaa In tha Seattle territory. H«
also referred to Anchorace jailf««nta lAilch are being aada direct. If
this direct shipaant did not do anything alaa It certainly did do ua a
world of good in the K. * X- opera tiona, and I oem aaawre you they will be
worslag and watching things In the future.
We 3«it In ail of the ordara wa oould gat aa thay are ordering »ery
cautisuaXy and ^alr isTaatory la vary low, but in tha eaae breath their
noney is also very low and they are wo2lciBg to Inoraasa the citsh oaplt&l
so that the cars can ae plokad up iMrsadlately on arriral. Inddentolly,
whan Soy Laophere wired tha other day three of the four eara had been
picjcad up and the fourth car waa ploicad up juat before tha wire was
receired so they did not hare aay caira laying in tha yard whan wa left
Ooettle, and their stock - »di8t there was of it - was all ourreot and in
Tar;' good condition and they proMlsed to aand in ■ore ordara JTrlday,
JioTaBJer 17th. Jay la rldlug thaBs Ta«y hard to gat their la»antory tn-
orsasad so thay will hare aKpla stocks to do bualnaea with, and by trana-
ferrtag Buiwaiaer from all of the aurrouadlng territory with K ft L paying
tae freight chai^ea, wa hare the InTeatoriea in the entire atate of
Waahington -very wall balanced and hare bean able to fill their ordera.
Jay Rideout will otajtiaue to follow through until we oaa, if possible, gat
this operation o& a balancad baaia.
Dare Beck, Jr. haa not be«j bothering or around oauaing trouble lately,
howarer Senior la still rldli^ Irrlag Larlna quite hard a»aa though Larlna
la running the bualneaa. The feeling here is altogether different and it
•ay bo possible to sake the wboleaalar out of Larlaa that «a would Ilka to
Au. wsw-iee ec cawcpul to chcck
OW OrPARTMCNT FOW WHOM WCm.V IS INTCNOSC
IMPROPER ACTIVITIES IN THE LABOR FIELD 2465
. -.1 li-t'.
♦-
ANHEUSER-BUSCH. INC.
Pa«« #2
INTF-R-om-F r rjRRFSt=ONDENCE
Portlojid,
Mr. Jotin nanlgan . NoT«»t>«r 20,
19S0
Hollauad B. Thomas S«etti», Wa(Sjlngton Torri*ory
to haT» 80 tbnt »» irlll bo abl« to got r»ff..ita a»a(sur«d by Budwslsor
Bales in tho S«attlB Torritory. If It in •"s-ar poesiDlo to sooonpllah
thla, 1 cortaialy will b« a fira ball«T*r In adracloa and fo«l c«rtata
ttiat your thoughts ooincid* with «la« but can assurs you thnt we will
contiauo to do tbo bost w» poaaibly can wi«i wbat we have to work with
for Budwwloer aad Anh«u sor-Bu eoh.
The carload of quarts they just ordered will practically all go to
I'ort -awtoa as the volune there has picked up tremaodoualy since they
are conceotrstla^ on the account, also the ConrMandin^ Officer has restricted
the .u«n to two bottles per ni«ht ao the men all order nuarts.
Xaeident&lly the Captain Rnvroa, of tae Red Cross, that I mentioned to
you on tho telephone stated that at least t8,0i» aen were scheduled to be
processed at this ca«p by January 1, 1951. Thia will also help our sales
In this aarket providing, of course, we aaintain our p.-eseat position on
the base, and I feel certain that tiiey are goliig to do that and will see
to It that their price caarged will So satiafactory as postiQ,^;!. for allitory
outlets are not required by the Stete of Waahington.
They are also apparently trying to cooperate with our wl^ei on Alasics and
sent In a big order to Buckart irtiiot is to be ablpped iwaftdi ->. tely nai also
ordered ChrlstMS wrappers to be shipped lMB»diately to Alaska.
The sales both In Seattle and Alaska have beea r*xy good so far this month
and have erery reaeon to believe they will oontlaue tJiroughout the month.
Tt is rather difficult to give you all the det dla in this report, but as
I hare dlseuseed a number of them with you over the telsjjhone think that I
hare been able to cover the ones not discussed in this latter. Howevar, if
soBiethin^ dereiops you can reart assured that either Jay or myself will edvlM
you iMBediately.
Trust this report will meet with your approval.
Kindest peraonal regards.
BoHanJ 3. The
:ghc
Mr. Jay R.
ON ALL Wei»LlEB BE CAHCFUL TO CHECK < - I H*ME OH DCf*
2466 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 138L
jh !i, 195?
kJM M&ILmw
I «t L B9ir«r«g» Go.,
it660 fi. Karglaal w«r
S««ttla li, l*»h.
0«ntlaw»ni ir. inring Lariaa
Soma of /oizr raalttttnees are not tMiin^ ^ee«iT«d in aeos3-d«t»e« with our tmrmm
prtyrldlng for imjnwnt of our toirotc** Mt tan dmym fro* d«t« of renditlva.
For •x«Epl«, roRittanc* w«» r«c«lv*d on February 28 ccnroring Jcnuaoty 30 aD4
on* of Jtan.uary 31 inTcti««Mi.
On March 3 t» r»««iT*d yotar rwnittafecj* ' eorarln^- th« raMdalnc imxuuj 31 •»*
r«bru«ry it iinrola*«. j/
Fsbanuury 8, 13, 15, a«d 21 ijrr©^«|( «r« now p««t dw. If yo« h«T» not alrcadjr
tho fatur«> forwwrd all r«iitiaiM««
uBdwatandlng at tfa« tt** wt agread to
don* •«, pl^asa r«»lt th«s« !;&*»"' ^M»rf» in
■at tan dagrs fm»a data. TIM>j^ir«s feio- uBd«
aoKtMid yoa an ofMn llna ef-^raditi
Valaaa t-oot raalttaxiciaa ar« aada la acMiordaaea vith ovir tanus, «a ahalX hava
ao athar altarnativ* tlias to ahlp yoor cars oa Dsaand Lraft - Bill of Lading
attaahad iMuiis aa pnrrloBaljr dona.
find ragarda.
tours Tory taralf,
AB&U.^ BUvGH, liC.
lay iJBssphara
W.«TSa Crodit Dap«rti»nt
IMPROPER ACTIVITIES IN THE LABOR FIELD 2467
Ex HI HIT No. 138M
ANHEUSER-BUSCH
INTER-OFFICE CORRESPi
2468 IMPROPER ACTIVITIES IN THE LABOR FIELD
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 139
2469
to 1
orii_
WiUi
2470 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 142
MICHIOAN MORTOAOe CORPOAATfON
e*<2 NATIONAL BAKU BUH-OlNO
OETHOIT
BENJAMIN LCv.NsoN .... October 22, 1953
Mr. Fred p. Loomis
1038 Henry Suilding
S«attle 1, '^eshingt/Dn
Dear Mr. Loomis:
If I sounded incoherent over the telephone today,
it was only because I was so emotionally upset when I heard you
had corapleted the purchase here of ov«r two million dollars worth
of ^'overnment ins'^r--^ »-,^t™-, ,^<,^
Su- 'o obligation to do business wit; me
IS difficult for me to accept this •-
I don't think you were fair to vo .
■•-■ this deal na- '■ -- ■■' -■^ -- ' ^-■
:ont, I fee]
truly
ijanin Levins 3n, Presi'ier
IMPROPER ACTIVITIES IN THE LABOR FIELD 2471
Exhibit No. 142A
». BMlc«
rt«l • trcaawtloa Xta- aMr «m ■LUioa dalUr*
I tew alwya Md* it ^r tixmt prlMl^Ii «• iMp ^T ^f** ^ »<
■t. Ow MtMl ftrUBd Mr. J««« »«*f ^5iJ;?>r? ,^
to tb« TMMtMv ««•««•. I ftlM r«fta> jrva to ^r *«> flrlMd M» OvKOIA U
Mo*«o. Ooly U»t »•* il»« I TUt%«d «ltii hU Hb cm««t«»» ■• »»• ^mMm
I *l»lt with TOT at yov offl««« la l»«hlaftoo or S««ttt«.
9MMM I Mi Um ooly tedNT la %te BHr«Lt wm «bs tAmtfkmmi
tte c«ui» of all labor cMr««xLsa«laaa, 1 «M ImtmmmAmtmA mad dUeoafartad
aa aur oocaalopa b;r otter* la tte aarttac* teaklaf ft«tan&lir*
fteo 1 ted ««• plateara of aMUag alto yaa «L^ 19^ waaalat*
iRtt Coonally «t yo«r offloa* In W««il«Btoii, jm ^tOAm ttet Mt «• a
poartblHty ttet tte Tai«atar« alfiit iwaat apptwlMWIr !"»,«*^^ *>^>w
la tte Ottroit stm ta fcuiaii— ai loMrad aortcataa* tm ftr«tee wiAiiaail aa
t» eoaMinioat* with Hr. W*d P, LoM&a, »•» iaiMiUwui aaaaMUr, aad to «nr
to arranga n appoiatHtat alth Ma*
I aaa aaat frataAd aad tteakf^il to yaa* Mr* B»^ far raoaivioB
m IB w«ahlz«too aal for paswl«±at ■• tte opportaal^ ta lat aaqpalotad with
Kr. Lcxada aod to axplaia agr alaalaa to Ma.
I MBt Kr. Looala tarplaal aorttaca aateiaaltea aad aawral la«t«ra
of oxplnatiaa. I alao ipolM altli tala m ihcm dlfftaraat oc>ctetoa» oa tte laag
dl«taae« talapteoa. It aaa fala MccMtloa, aftar taaariag aa «atp ttet X «Klt
ontU I teard tram bia. ^
•ndM manAm I l>Mrd ttet Ir. Laeada. m atatad at tte iiiiaaiiiiii
■mt of thla lattv, te« ooivlatad a aala, ooaplataly IfaHlac aa, altfaMt
teiQg tsmmxt *ao«Kfa to ci^ a* aa opportwdtgr to U4 or ta ftm» tte poaalblU^
of doli« bnaloMo wltb fov fTMt onHdaaUoa.
2472 IMPROPER ACTIVITIES IN THE LABOR FIELD
1^,
Ootobv n, 1953
I «M MtUUMt, Kr. BMk, to tlw ooMon ooortMjr of an laqainr
trm ywr Mr. lomiU* U tte oa^pwaMUoD for iOmiLtyim <«m Mlf with
yoor onaalMUao to bo i«Borod7 I m prood oad ontfaBaiMUo of agr wogr /Mr*
of cloM, lat&mto nOoUooiajip with Jimv Haffa oad Wwrt BrwaMj^
I te^ aoltf thKlr wrlooa leoola and Urn lllehi<« TMa»t«r«
volfkr* Fwid a aodaot awMiit of ■ortcatfo*. I ha^ bo«i ploB»«lag la thl«
flald of p«Mdoo ftnda aad walfara fonla baioc Imwatad la govornaaat laaorad
■art«a(M. Tha oM^latiOB of a aala to tha Intaraatioaal Ik^tlwrtiood of
Ta— tara. Cteafftara, wai'ahaua— aa aad Halpara, would liava aaaat a p>aat daal
ta aa paraeoaUy aad to ar o*" o(>"|MMgr» bat ovar aad abova thia It woold hava
tailpad a trmt daal la a^ ga«Mral alaaloa of Mkiac boaa onMrahlp a-vallabla
to tlM UMnrioaa workloc "X^
I aa MMt amioaa to kaoar irtigr I «m ao l«9orad, I aa aorr/ If
X aowd ratfaar aaottona la thla lattar, bat I faal (|aita bad about It and
■oold iraatljr apfiarweiata haariag fraa jrou ragardlng tha thlnidnK of Mr, Looaia
aftw I bad axtaodw! ajnMlf aad b«li«i>ad hia ao alaoaraOjr.
Raapaetfttlly yoora*
lOCnXOAl HORr-AGt CORPORkTKm
Ba^Jaaia LaTinaoD* Praaldaat
BLtja
CO. J«MM R. Itoff^
rrwi p.
want TbU Idaatleal lattar was aaot to tout offloa la Saattla, Waafalt^too,
aad VaahlaetoB, B.C.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2473
Exhibit No. 143 ,
in4i|i ip t» Hit f—wi iif ■% Ml iMHlM it yiaM It 4i9il «* itt .
1800,000 tatei*
A alUim Mi • laOf 4aUM9 la k l«ft «r immnt IfM I£» •• f«» IntlMlf^
to mm ihMi «r Uto wl*«r «MI «l«liM« w, «t «m4 to lw«»
" kytM — rJgMpMi to tto <fwi wMrtwt •* fc :"
If z M to^ttoto «e kta toma p^^rtto*^ ^^ H m «Mi liil
Km I kww 1to« IftM* • tot «r toB MMpvM totof «ftoM4 m.% «
«t a«» «f toMaa Um •• dbi «r
Hi asvUr ana «■% Itoaa aM -«mk gMi aaaa if w w»~««sato«
tka sitaKUaM «l«li aa apm atoi a
a faOtogr toMito «% tiM SMt KKto
X torn aofc aH<Mi«i to totoll «to iniiiMit t^Mftttoa to Saattto^ ki* I
tot p>taMMi,af «M to»4^ toatltoltoR llito mmmtai^ mi M hm m m
aldto pattonr to wt jm^Ttimt mi toflitfto mi AVk» mm aaaStokto a*
97 to 9«, €»pmUm mm tmm faaU^ teatcffi M Ite aiMit af
witk tiM autoit p— my itoiintoiti^^ to aia itliv at 99 to 94 «rf
UHor torn aito aa tow as 91 or 92.
FW vlwn X ait, tt to aot tto tototta tt ttto auAat toanMr •^ ^^'
liaHtoator MM* alitoh dtoftanto w to« saitor toa ffM* ttot tott ImI
aXaaai litai ta ttoto aMHtoawttoa. to toftfc Mtoatoto aa* iijaattoa I i
ttot m *Mto tor to tto iMat autoft amltoUa to aa, vatoa ato
ooMtoMid M Mil M attov toatM* iiarttoaat ta mm aaato.
X tkiak it la pOTttoMt %• potot aat ttet aftar X i«tMM4 ftov
ato iiiMiiilil tiM iMatoM at tto Bataalf
tl,900,00Q, all or tto MM abJavttoM ato
2474 IMPROPER ACTIVITIES IN THE LABOR FIELD
1M« Ivtiti at %• if 1M»
i
Ism, «MB l«iitakil
2S
«• MM tMM %• W «• k* *
«riiw
I AlMtlMi «fe«* I «• iiialat
tmtmm mam X «m« %» aar, Omw^ te liwi nkOi S hM» ftMi ^wOf
l» mH I «ni wik «««MMr Mi tnhMMiir m
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 144
2475
Ki
•t^rf,7«9.ce
0«k«c* e/ •ttUJlag
tbz^uA %,r\. (iio.n j«- ftQ.pt..)
Html M»%m%» fttMfts
2,!5DO.'30
1,800, 00
1% Qm\
-pt. 7 32
2476 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 147
■x^te«<
•'
TEAHSTIIS. cxpffiygs
WAKEHGilSEME)! I HELHIIS
IMPROPER ACTIVITIES IN THE LABOR FIELD 2477
2478 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 148
KKOW ALL ml::
';, %. ,^ ■.. :|
the Inte;
Vf.re;.ouse';;er. i
01 Veamsters, Chaufx'eure,
iv.o. ..eiperc of Anerica
hav© iOAde, constituted, appf
jinted ana designated and by tiae&» preeents
do m«}c«, constitute, ar.;
:ssignate Dave Beck as tnietee to
purchase or othervfl'
• ., vu sell, assign, transfer or otsbsovite
dispose of, to br^
recover, collect and receive all «on4«« as
are now or s;.
wing or payable ther»e@n and to
m*k«, executfc o,. . ..-z^.
. aperf ar.j ir.Jtrumetts of what-
soever kind or nature i
-''--■^
Rea3 estate s.
.s covering real estate located
3s, ve Eeck fulT power and authority to
do and perforai ail ana ever:
.' act a itsoever requisite and
necessary to ' •■ ' ■ ' ' " ^' •=•
'"^■■' ' '■:: ... ...^ ;.a:ne of
-'frit of International Brotherhood
, Warehousemen and Helpers of
'.ern&tional Irotherhood of
.rehoutemen and Helpers of
cceescr in cffice to
■ .ocd of Teaaf ters
, _ te-vir.g end .-^r»-ti'f'
, i and similar «v."
r
tf^
. t-'i upon Dava Seek.
our ^.a-'^.s I e /C ^
-lundred
^
General I X
•ie
^e^^ V ,....
ftraber
IMPROPER ACTIVITIES IN THE LABOR FIELD 2479
Exhibit No. 145)
»X .ifc^ilngUn <t«b*r.iJ,.lW.
-f-^-
2480 IMPROPER ACTIVITIES IN THE LABOR FIELD
I
I
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 150
2481
]imnn. chauffeurs
WAREHOySEMEN & HELPERS
Mr, ab«raar. S. Stephaoa,
8«or«tar:/»'rr«a»ur«r
KationAi UortCAKt, Inc.
kll i. 72nd
$««tti«, Vasnineton
Dmt Mr. SUpAwst
f« »r« lQt«r«f1l«<i in puroft««iH»i froa smd ttiruuga your co«piif^- as
avir dul? d9fll(iiat«a corrasponctsnt, »}rtfai<e loajaa by <t»s>i4|fu»!nt
\ip to to* ucHtBt of |U,500,OOOfOO, in tne year l^Si*, tor tr.«
§c99unt of to« Int«rMttional BroUMrnooa of T»4«st«ra, Cna.. '^eur
Wwr»bous«WB aiMi ikipcrt of a«»ric«.
At tn« or««eat tL-nr w« ium prtwtri*.y ini«rea'.f! .q u
portuwit to S«etion SOI of tft« Ssrvi :«w.-n' i 'i-hi is-jd. ,
«s ■Bt«Qd»d, aacn •ort|;»g* loan to r>e g'^^r-xj.'^'^fi by tn« '•.-■.& < -.
A«kiirilatratioQ, uaalar tr,« provisions a: "..it .- n. Ufa ar« &.30 .
««ta<j in corctvifilng bv aoifnaMint conve; '. 'h ii.i-teAKC Ir^iis,
Kr* U>Q riadimxl aad Mr. ^nxl ijoonas, aciwij;
for o>ir «ceouBt th« io«tM to o« parcnusea,
b* maitt to tiHMu
-inii/,
inm. •-.. 1 .rm srisii
It ts oar d««ii>« to U3v«tt ttt««e f-ii :s lo .^-.ve tre nigatsi ;>.iss.:
jjrUid, is conforsanca irltn %*» utawat aecuritv, of coursa, t.' tft«
Uniso. You «pa to aarvia* tfia»e io«n» for ui« Unvon, under tn*- t
of cur sarvicta* agrsaaoet.
Varv tru.v
Dave SacK,
I sJX.J*^-'
Concur rea ini
linaral sicraWy-Trt^rsr-
imrs
Sacratiry-Tri^
mss^T
HiuiSS«'2o«klC£Sr
2482 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 151
IMPROPER ACTIVITIES IN THE LABOR FIELD 2483
Exhibit No. 153
MEMORANDUM FDR CREDIT FILE
DATE AND ORIGIN
•n-.e adiltlontil iT^ .
to ^iwbie h;.:r t.. ■•
yv53
.B.Hor.'an.'ah
National Mori,
acquire ■^rX
-rifj ie;."!;'^6rs Pens: . "
flllin^ a piece of p-
1 ct ie-:.3t, «;,
2484 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 155
3I« IW3
!©«
Im
"Z i^?^l
IMPROPER ACTIVITIES IN THE LABOR FIELD 2485
2486 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. iriO
m 4 i^ I
1 c
is i
- Cf
1
i iJ
f
-^4^
at
IMPROPER ACTIVITIKS IN THE LABOR FIELD 2487
2488
IMPROPER ACTIVITIES IN THE LABOR FIELD
'/:
J
?l
IMPROPER ACTIVITIES IN THE LABOR FIELD 2489
Exhibit No. 157
I
o
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i '3
at ♦ v
n '^^ ■
i: ° , CM
^!:f'^^S; s
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.?' iNno:)3v iv«3N3o
2490 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 158
..j.,y .-JJ-i|#*' " - .^.fj
National Mortgage, Inc.
AWAtHiNBTON CQIt»»Q«ATtON
«!( ». -rt^o » v«. tvsa
.'oven;b«r 24, 19''
IMPROPER ACTIVITIES IN THE LABOR FIELD
2491
- 2 -
Ho mortgage loan will be In default wnen shipped to the
purchaser.
Wt know of no facte or circumstances which would render
the guaranty by th« Veterans Administration as to each
mortgage loan, invalid or whicn could constitute a def^^nse
to liability of the Veterans Administration on the guaranty.
The Federal National Mortgage Aesoclation are the owners
of each loan and are entitled to sell and dispose rf th«r,
at this time.
All mortgage papers and supplajsentary docunents shar L^
examined and unqualifiedly approved ijy the Mortgage advisor
for the purchaser and that the iBortgag:e advisor for the
purcnaser shall be satisfied In connect i.^n w**"- ---
BK>rt;:age loan sold that our warranties set f nave
'been comnMed with aod that each »ortfi;as:e :1s .- .:rEt
Hen i;non the premises involved.
Ve have inspected &11 the properties and tht credit and
• 1 lection record of the v»orrower and reeomsMiRd these
ans for your purf^hase.
■n the accept«ncf of this letter to purciiase these loans,
will request the Federa'^ National Kortfage Association
J.0 prepare the usual form of "Hortr.a 'e Sales A-treement"
(FNJkA form 1?4) for your exacution and delivery to us, the
provisions of which shall govern the sale,
<i National Mortgage, Xnc. are to service tiieee leans under
vs terms of the servicing agrees^nt for thi International
Brotherhood of Tfeaasters, Chauffeurs, War«h©u8e«eat and
Helpers of A»erica.
Very trv;ly yours,
SATIQKAL KORTQAPIa JJtr.
, Chauf f f
rs af Ae-i
■nen\
89330 O— 57— pt. 7-
2492 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 159
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 160
2493
{er..alu.nJ '•^\.,tULJ ,/
TEAMSTERS, CHAUFFEURS
WAREHOUSEMEN & HELPER!
^ A^^^ f ^dLU^-
2494 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 160A
r. (NOLISH, Dea'L SIC
Washington I, D. C.
November 6, 1953
I
IMPROPER ACTIVITIES IN THE LABOR FIELD 2495
P^XHIBIT No. 160B
t
^ r, ,,
TEAMSTERS, CHAUFFEURS
WAREHOOSEMEN & HELPERS
2496 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 161
'4
«^90
i»iaM«ii«Miir
% Ifei Mlw« tflie ■rliiiir iiiiiiiiiiijrt «C IliMi
IMPROPER ACTIVITIES IN THE LABOR FIELD 2497
EXHIBIT No. 162
til|IIllli£ iUillillX
mn nOK, SliOl W4Kr)l0, ud con ftUJOHD, th« «i4Bnl«a«d, row 1MW>
WlVM Utc • pJfi— fihlp to do biMlm^a uHd«r «1h ft/l« ui fir* mm* •/ T«t
anttWMH OCNl^irr, far • |art«l af «u /«Mr r. « 3«ptMitar 1, lt53, «o« thM<»itn*r
ytm^ HCTM M f*U«W«l
TIM gwrfc» ^iMTMrtT sf tlM ^nsiaMMi vrlll Mrt e* OMmfMl cnwpt tti" i«M«laEnw
■rtwa ^trif— t U vrlttm- QMUl «%(»»vrlM mfMi tqr • mJotIV ««%• of ^Jm
0|lMrviw nwlMwiily ■ctmA, tte ^mKw <>/ «•*,«« «hI ai nNMVtta tatfwiUl «• %»•
pvtaamas HmOI to la4|«i Witt txm mXmi, wm<m mttxm U 1U« Bw«i^ «M ii*
itmXl te d*iMi •wt«a«ii r«r WMh mmI ai tt» dura** HDd wtU bOtf Um Mwwrito m
ta tnmt tmr Mob, vltt • U|» Mt/ to mhA.
mM tr tlM pMrtatrt of aU «r ttw 1aN«Meti<MM of th« pwtaM'vkip terlag tlM »i<i>-
ofdlni »no«i ««d »r «Ul tta MpiUl vrwwiV »^ lt«fclUV m «r «*to tterMT. 4
Mnr aC tt* aartiO/ tmomH, mi Ul vUmt pwrlKlle Moovato, ttMai to nppUad to
•Mh pKTtoar «• •««■ M vPVJUAbU, maA wOitM •«tJ««tl<MM to WMk tta(«to wlttU
' - Wrt, auoit MwniBto atoai to MMliMlwlir 4w«m4 to raflMt ttsUr i^i ■■■!■% m to
Vwlr rMiMNrttwi IfltoMwto •« of to* «ito Hwrn^. toUM vf mqt aliJatrUaB ttoll to
flftn in MTitUi to Ml* af to* 9itar MrliiMv."
3« tto) Uiitol Mikttol «r «M tMrlHK^Mly iteU to •T90.09, iw^toU
fartoirttit, 1^ i*lab tStfCOO «mlU to vwrtittoAM )v B«*» toiAu IMO^ W Umm
iMVoU, MWI 1390.00 )v toa S«[l«i«. l>«r%tov *.«<toi»«iiofw to ««itol ilMax to V
to tm% toiKM. if mr toM« to. nmiNr •<Ni«rvt«feii«4 »>uXl to Mto» Ir tta iR»%iM
ta to* MM Kfiwrua* M to* tai«Ul a^ntirtto*} >iu
- !•
2498 IMPROPER ACTIVITIES IN THE LABOR FIELD
Hi MMt^ ittttiM, Mi liM Ml VMik «» PMWMl WMlMlllrtl vlU to MI«mI
<iiiiB»iiiiiil Ihi MM if IMi iMMMifcty, if M Mlmtt 1MfV^4ftMt Mi Mi'»IMii
UNWI CQ V¥^ «• IM» iMkf Iklff^MkMi «M mMMM pmm* (3| i/n) %•
ii«i mmm ntfiMkM* Mi M^^kifi iMMM» mi/mi»»m mtumt,
^Mtm m ^ vitMwB w ahi PV^M* «r llm %lw w Mw 4lMwwtM, ltd
W fMi 1 mil will »m to wi» ii»% «iU itoiit? «to UMi< pmiMm 9t tto in'toM
|, ma HiwwlM tolMiJMi w m. m^t**^ f«to ir tto fuimn, to*
•Mtoilif *a& to imm %• «• ■wjjiwin *im*mum mm^m mi m
If mmm tfnU to totuwtwi If • «4«i4lr wto •! 9U »f |to iif««Ht»,
I9MPI M# M iHi to totoMlMi to MMiMM wto* tfttooM toim Haltoi toMlf ,
iMiit to iff§ mfi ■ <to <M«wiiMnM to • «|Mitr wtot
tf toitoMfi Am to to (riM>@vi i|r tot
Mi ^pt <f tofVMut to to Mivt«4 to ^
fto toMtMM toto «f Ito mi^mn viU to rtMiMi tm*
(¥) ftottoto «f Mr maI ivMtrlr, «mM «plMMi^ iMtftotal
■MPttoMf to vtotr wwnwrti Mwvi-'Titf nwnitlitm .jwiiimWito
(•} Hf uilmiMiH tf Mrtotftotl ttUfiUM m ttoiwi to tot
•ftto
(f } totofaiiiiit tw wmMmA MPltol, MMto MMrttotoMt mm
to Mtl S«Mt, mi to iMMt toi pirtotMMt to mt tto toM
iMItoMMt
(f) antoitoto
toilpi to to to ^Mifii vtto tot n,.MWltoMto af
MMN «r tU MUtM Mi wtot toton to tot ^^^m^t^ tM mf w^i»^ ■
I*
IMPROPER ACTIVITIES IN THE LABOR FIELD 2499
yMto«r, f» taMW «r «Mm* rawlpto ifcU to 4«pM&toi «lnM>U;r Ui «m cMMAimi
y. to purti— f «i«kN* Ito writtoa ■nwiint cf «to ««tert tlbtXli
{$) mm UiM mgr^mim \m0m toU m MMnrttv n»f Mgr
pnw or to Mirll>l«f •r ntJtfw mffVkUm %• b* toM «lMmr
«M WfAtoA «p iwt|mr<r vir Vto mutowiiHi wgr b* ctto«torf
lUMUtr to m^immm nr wfnnmw)
<•) totyw ar iwwwiw* Mcr 4iM owtof to «r •Xdtoril Ir «M
{*)
l« to piftoMP viU towRlto' hi*
•r to to «9tWag tMA m^ rMa% la «to ««nrtw%tMi «r ttMolwUM «r to* wV
wnbip (ffw itoM^ «to pKrtM«*i9 to mm ipiyrtlat «i a aMfto «• imMi toii*}
flttont nivt asUf^niv «M •««» gialwrt m4 »mv to «iU to tto* iU* iatoiwit
ii «» nMrtiwwrgmi «b • pmtmm inim HWi W Ito to«k wiw m «r to* Xuit tor a^
toi WMrtk to «W* «to «ffto^ to mi*, to aMl tor<Kto« miwfw viU mfm to mt
iMii Ito f««M to MMpt «to •CTto p»wqr«tM«toIjr, «r U toa ovwl nr •to«U ttoM
mH to to ••• Ihto to* a^tov* iMT totoft to* M»to pi ■»>■<* i—toly (ar «m iii»wi
air tor t^ mmn l«toM*%, tf «* •»*»« to a*! tA^m to wwto*t»), «rt tto— ■#!»»
irtMiv»%(i« 111 MWfMk to ptrto*««f«» artdiim AOl tew to* fl#| to toto tot
2500 IMPROPER ACTIVITIES IN THE LABOR FIELD
filliilil M*««rt •< Urn rvUrUt p»wwf.
VHtlMNi mUm cT •l4Nr%la« «« p«r^«ih> twit te flvM io %te «rrMW eit>^
!• tw «ijn «C tiw «lM» vf tlM mim taHUK «hieh ito^ sffwr «« mU M m**. <>
iNnk r<r ;0f if «)«> pantaM pru* «Mi MM^^qr ^iu« •iwtiM u pibnimm. rtw
Iwliwii tt Vtm vm^tmm prim itell ta pOA U VMaf* Acmthl/ iMt«U««Bta vitt
fiNpl* t«MMt 0* tlw mfimU htXmm #* tf pw anui. Ttw PUrtMr «» i»r%M»)» p«i^>
|feMi«f llftU litw ttw rUM U pi«r %lH tMOAMK U r»U at amr Un*. «» Nmiitlat
partWHT* iNU Imm twyltU mmaammi vf Ite pMfiMW«iap bwiMMf , vitkont acgr
tlrtWl>fU«* kr tte wwiiriaf pwta«r M Ioin^ ^ t^kMv i» w 4«fina« t» pvrmm af
I toil ■ vtkB *Mltw to lM7 «Rt Uw oitwr t« — ■!* •ef pmnem m a
!• p«ralMMi» «)w itmilwi'a iirtoVMt at boak toIw an af «Im Uat <U4r af tha mmM af
llM 4a«lii« wdHT Vm mm %vim aa« aoaditiaM aa tteaa aat 9«l la tka pa*M4im
jMi9if'«l*«* •«* aU«U4« to iwgliaai «wt ba «vldmMtf )i|r writtan wtUa «a tte
IWH—1 ifiwaiartaUt* af tiia *wa»aa< Mrton' vitbiR aixkjr 4ar« ^t U* vMOmaattiaa
4a tha pvakata pmaaaatUfa, aaa—panial '<gr taa panaat af tka ni^rtapi pvlaa.
Ibaaa afftioM ta yrrtaaa Aall )» ^liMim •»» «*>• )»*Jr«t aa*i«M itai
UrtQWii wyporatitaUtw af aM* af ttia pi^rtaava.
9. «ha vtVM af «ba mhmmn i<dm tor tlw porooaa af attoirinc UmU »aqala>i
pmmSB M «r aacl aflWU^ tt4a l«i 4a|r af tiiHwiipr, mi, at SaaMla,
/-t--^^.
'4t»,u:
IMPROPER ACTIVITIES IN THE LABOR FIELD 2501
EXHIBIT No. 163
r
r^'
„-Jter.;»M^
/r-^/ivfc
r
Am k«*»^-«»*^.
'.<M>«»^ ■«'>4<My
.^^
1^,
:-t
■ IXl^ n^.»«.«.«»
h* r.<.y-.r»-^-- ^:>.4^^:.: .,^^;v.;r4 ^^^M^^-*^.<<
^:.
1^4 ^^^A--^^
1^ Mn-^K. wk*^ '0^
- ■mnifiiftiii a liny fC <
i !
2502 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 163A
/f. /j.m£, fyurf^, >!^l?
'FtT
if-'
I..
r --t
IMPROPER ACTIVITIES IN THE LABOR FIELD
2503
2504 iMPitopKu A<Tivnn<;s in the labor field
Kx III HIT No. KW
m.OHAHC. Ar«Ai,AU
SELLER' S STATCML.r
NATIONAL MDRTQAOC. INC. ,^^ ^, "
•«XM i>i Mirte « l-oMni
MORTGAOi: AND ESCROW 8ERV1CE8 ^^^ ^
411 E*n 72nJ Street
StArrue. WAtMiMOTOM
Ptor«t, Aadim • '.'■ .^o. ^Aiih
MlM Riolunonrl A. CUrk E«iow No S249
Buy», Arth-.r ".. Coorr a<«.ng D.u o/aO'M
( KICOITS
»«l»Pii~ T, 500 .00
FHA K«Mrv«
li\au»nc« Pro-rau
P.o-mwJ T.m« -, .
t*x,,mon o( luui Cf«liti _ -<.1« - ^iJfiMi
DtBITS
LtSS THE KOLXOW INC OtDLi (lONs
ConifKi ur Mart«M* B.!- -
To M..1.U,-. .. «*e3.
Ejctow CUit* 12 ? .
Till* lntu'«nc« C'iiaiR*
Mm Tm wd AIIW.»1I
K..i»tii>c).,.n K»
K«:orii>n| Fm. r ,
Currint Toko*
UtI T«M« and Ini
Oih«i tiwunibi.cwe. Dit.l»iij.d
W.ui Bill to <l.l.
W>i«> Dwi No
K.v«,u. Sun.i« , ,
u.,»..«i. ui To»i o..r,.. _„j*at4. :
Out ch<cfc lu ImIwu:. .ccouni .. ...Jm.
_JiUi»t.,...,-....
|/W« ll«v> •>. ,„ihor>i«< vox t«> cUm* M Nt4tN> •'
»nl*<l
-ludukinu^: Li g-:i^'
IMPHOPEK ACTIVITIES IN THE LABOR FIELD
2505
National mortqaqe. Inc.
MORTGAGE JUfD^OCROW SKRVICBI
411 tut 71nd ScrW
SiArru. Wa*min>jtum
«OI»T»AOO»« tr ruaCMAtlH't »TAT»M»NT i»^^t» ". OMfHT
K«0»l(ITY AOOatt* «>•• ••• lOWk t».
OC«IT|
•AL( rmci
VB.MOdlO
^.MrM », 3
4««»
AmM.4 t/
fif. IMyr*<>«* »*K» • ^
TT^
V A Awnito C».T|. ■•« aharsMitl*
K..,n.M«l.n (V. A,,
fMA c»<«».t«««« rM
TM tr^-mU IN«
I.M
M«1«*«>CW««
VMdOO
».n
«n^ m* iM.
M48
OmJMM »»r« »*.
II«^M '•-
•<M
^.^..^ */ta.9/i/u
U.U
CrwM ll»»«t *»* n>t*—
•.«
Tu IUa««l>*M« tO^IU
1^
b1«<l4«4 TrtAW
io.aM«u
# -
CKtCllTt
on.
,
.•■-,«K »«M
«««»«,
WMM*ft»
■', .M.. ..►in M. fl.a « w
»« t«>/fcl <». c «*««
., y
r^^^//
2506
IMPROPER ACTIVITIES IN THE LABOR FIELD
JtL.
BORRCheM
LOAN FROCEIDS
CASH ADVANCED
By S«ll«r
fey Purchaser
MAlT0R__JUJbJ5ll«|j|i
Sales CoBBBiasicn.
KTn«ot Momty
Credit Report
Fire Insuranc
Company
m
SKLUa
CTLIflfflRASreS PAH
OUlit. OA'
TlTIE SO.
MMm.
im:
JU^
RTfTT''
10,»OO.OO
tig ,00
^^
X«Sy«t
war
OtOO it»M
-*i«®„
Ir.sp.-
-j=»»_s_-.
Conn-
TftB—
m^ L^ -
r »^
m
9M
''-•pu'Ui 'iJo.»»f»«
rtM],-
TCTAi:
Uft'Ti.." t
ifljii».rx
IMPROPER ACTIVITIES IN THE LABOR FIELD 2507
VerCRANS ADMINISTRATION
CERTIFICATIOH OF
LOAK OISIURSIMENT
I.— ntTtMon Of 1.0*11 piuiMEMtms «io cos'
-Jl%SlMwBB~
' mruutia ^Mouorr wrcsrcMGn
^•~»gS?Sy28'iSL*:ST
1 rO* DOItXtHS CJftti
t&s^A
i;-,.',!) ()_r, , -pt. 7 :',4
2508 IMPROPER ACTIVITIES IN THE LABOR FIELD
>■ ""' "
faO}'*>-rf___
/A -v.
/ire
OXu Title Policy .s_
OXd are foUci'
;r»;.:.t Oliohi rft
Ai»i*al»«r,^ ,
C«rt. ciJ 8,ilgibiiJty„
C, of i. oraerel
Bvrlty iBtor»«4_
roA C»rtlfic»«oo^
!tBttU»» vlo«1.4 dfct
. i '.sant
Tin* ii«c«lr«d V / '-' Uti * .•:.o Lot SU» Cn«c - d.
Corr»«tt«n _o3ic"-. -.Iji « .le* i«a
Jitd.
iied.
UiiVMrx* 9ra»r, d
J
IMPROPER ACTIVITIES IN THE LABOR FIELD 2509
Exhibit No. 165
2510
IMPROPER ACTIVITIES IN THE LABOR FIELD
IMPROPER ACTIVITIES IN THE LABOR FIELD
2511
2512 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 167
\
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i
I ■ '
1
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,-■
\
\
I
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i
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■^
IMPROPER ACTIVITIES IN THE LABOR FIELD 2513
Exhibit No. 170
April 26. 19S)
Mr. C4imr4 T. Utmbracttt
Lkikkraeht RMitty Compaay
17*0 Pae^tcot BalMlaf
Detroit. Uichi|an
D«mr Mr. Utmbrcchl
W« tgr** to purcka** S«v*a Hndrad Flftr Tho«*aad DwlUri
($7>0,0O0.OO) of VA loaa* from roar lactltutloB for tk« accoml of Dov*
Bock, Truitoo, tat«rn«tian*l Brotkerhood of T««m*tor(. Ck*»ff»uri.
War^oucomoa and Kolpcr* of Amaric*. for doUvary witkia Sixty (60)
day..
W« wiU purckaa* tkato loana it • priea of Nlaaty Nlaa parcaat
(9t1k) of par. Tsa ara to aarvica Ikaaa loaaa ta accordaaca witk tka
!t«rv1cia( A«raamaat to ba aaacatod ky your compaay aad tka lataroatioaal
Taamctara Uaion.
(1) AU of tkaaa loaaa to ba a mialmom of i% dowa
paymant by mortgagaaa plua coata.
(2) L«ao to ba aacurad by a valid fl»at Uaa opoo tka
aacurlty olfarad aad aatiafactory mortfaga papara.
aU aobjact to approval by my daaigsatod rapraaaatattva.
Ol All taxaa aad aaaoa«n«ta ahall ba corraat.
(4) Adaquata flra aad wind atorm or axtaadad iaaaraaca
covarlng all bulldlnga la compaaia* approved by mo.
(5) L«aaa akali aot ba in dafaalt at tima of traaafar to
our AaaocLatlea.
(() Tkay akall carry tka VA (aaraaty, op to Savaa Tkouaaad
rtva Huadred 0<aUra (|7. SOO. 00) or Sixty pareaM {iO%),
wkicb avar may ba tka groator.
(T) All loaaa maat comply vitk all VA ragoUtioaa.
2514 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Edward F. Utmbrccht
April 26, 1955
Pag* 2
The accept&ace ksd «ppro<.-iiI of the todiriduai borrower* who »i
to •xecute the mortgage* to be !»***d apoo by our pre**nt Repreteatal
Mr. Don Htdlund. o! thr National Mortgage. Inc., 224 Dexter A«*ou*,
S^att!* 9. Waihington.
Very truly your*.
Dave a«ck
General Preatdeot
DB/et
CC Mr. John
IMPROPER ACTIVITIES IN THE LABOR FIELD 2515
Mr. l.<Jw»rd t . L*mbr«cht
i7»0 l>u>ob*cot Baii<Ua«
DatriMi. Mithig»a
P««r Mr. LAmbrecht
Tbi« *ili t.m.::.i .,..!■ \
...,.,
♦ . .gl-.cd •■ .
(fTS:. ' •
o{ L'a
Cb*<.
-'".-a .- -.
f3.! d.,..
It .. our ,.,.... u„.
iieliv«r«d for pju-ctia»e ixi
AU 0«»«r lerrr»« ol llie i.otr..
2516
IMPROPER ACTIVITIES IN THE LABOR FIELD
IMPROPER ACTIVITIES IN THE LABOR FIELD 2517
2518 IMPROPER ACTIVITIES IN THE LABOR FIELD
! dcU's»T«>d to the T*»n'''
I Union.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2519
-MPAMY or CALirCWN
I loans daiivercd : :
2520
IMPROPER ACTIVITIES IN THE LABOR FIELD
■|H|HHHHK October i9» W^^^^^KBs
^^^^^^^^^^^^B Mi~ ^^m^^^^HH
^^^^^^^^^^■ce 4en< ^!^HnH
^^^^^^^^^^^^B, Bt. c9 of Cahforn.i ^^^HHH
^^^^^^^^^^^^HHoa:,'jn>rrv ^hH^B
I^^^^^^^^^Hprant >co4, Cahorma
^^^^^^^^^^^^Hr M-.^
^^^^^^^^^^^^B
^^^^^^^^^^^^^^^B( ; by the
^^^^^^^^^^^^H we have
^^^^^^^^Kh^,. ^ oi loan.,
^^^^^^^^^^Kc }
^^^^^^^^^^^^^^^Kf ^ sorrtewhrre
H^^^^^^^^^^^^^HL^r
^^^^^^^^^^■fcb . 11. -o wr r. compaay
^^^^^^^^^^^Hp
^^^^K^^^^^^ '^
^^^^^^^^B^'
^^^^^^■1 TERRY, Glenn
j^^^^^^^Hr
^^^^^^^K' F
^^^^^^^^K '>ANOOVAL,
^^^^^^^K AT
^^^^^^■1 ROORICUE7, £. <;. COLVER, ( . R.
^^^^^^B* i'lTCHCR. C. C. BOSCA, S. U. j
^^^^^■1' FET£R<:ON. R. E. BLEILER. C. O.
^^^^^^K ;'F.R£7. A. ROBERT'S. L. J.
^^^^^^K NOMVf!*-, HUGHES, W. H.
^^^^^^B Murphv. D D. GIZ'^A. D. G.
^^^^^^^K MARtNO, J. FLUITT. O. I.
I^^^^^^K
^^^^^^^^K Very
^^^^^^^^K Hediand
^^^^^^^H et
^^^^ ^«|J
%.-,«!S
?-^S^
CAumsRM.' 'j||lM»3Hi
<«cKip<i«K g^m__m
' ' •—— — ^^^^^^^B
.-
'^jr^ajtsieo* p«7»ialv fck^^^^^^^^^^B
^^^^^^^^y
k
w3ci» d«uv*rt<i to tlM ^^^^^^^^H
1
L
'i.««m*t«r« Uoiei!. ^^^^^^^B
IMPROPER ACTIVITIES IN THE LABOR FIELD 2521
Exhibit No. 171
.--•fr-— 303WFntR. REALTY "^^^i^t^ '
tMM
lW»«o<i. «■'••*.
ISi^ELf -i:^*J!Sl??-i^^^K^
loM'rli
As *? Ifcrth lli*! *■••.
icwa^], t? «ar(^ mMH ««♦
t*««rM«lZ TfcwrtuM •!« !>*■*»** .!***** "'*"
m^^x
rn .1,11 r- -- - MMMM or NMr a*^ »• y^ ^t M
i
2522 IMPROPER ACTIVITIES IN THE LABOR FIELD
|Sfea«ffle!«W>«!*r««iv
72' ^c.c7 Sa^ ^#T^
IMPROPER ACTIVITIES IN THE LABOR FIELD 2523
1 '
I
U i it
1 1 i 1 «
•3 -i
-ri'
t
M -
I
i h
i ^ i ^ thu
iS93:'.<) ()— 57__pt. 7-
2524 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 172
Of mawTi xoip^
IMPROPER ACTIVITIES IN THE LABOR FIELD 2525
Exhibit No. 173
■ I
'\\
\ \
V
2526 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 175
i
, ynhmaitonal ^JSroihtrhood of
TEAHSTEHS, CHAUFFEURS
KAREHOySIMEH & HELPERS o/./).,..>.
To the ^secretaries
Dear Sir and Brother:
The scale Bod
operators and othe
can be presented ;-
feature is the fac
collectors, hobty;
models are well c:
mechanisa, rubber
the truck-trailer
are also arailable
Seldqci has such an
Bovement been --f'-j»--,ri ■ ■.
.r.e In*
jffcrt !-nd t
SI6«liNO 3-0J23
iJoveoiber 14, 1963
Oeneral TTesident.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2527
TEAMSTERS, CHAUFFEURS
WAREHOUSEMEH & HELPERS o///L
BUY A TRUCK FOR CHRISTMAS!
Enclosed you will see the promotional campaign of the International Bifotherhood
of Teamsters developed in conjunction with the Union Label & Service Trades Depart-
ment (AFL). This program is designed to follow up and implement wider interest in
trucking transportation set in motion by the recent Truck Transportation Week. The
campaign is dmgn«3 to coincide with the Christmas gift i
For many yeara both the railroad and steamship Industries have enjoyed wide
popularity- through their model replicas of trains and ahips. At this time of the year
special emphasis is always given these models and this general attention has proved
of great value. Scale models executed in authentic fashion never fail to excite the
interest of young and old.
We feel that the models pictured in the enclosed folder will make a real contribu-
tion to the general public relations assets of our industry. The faithfully reproduced
scale models offer excellent toys for the young, gift items, and souvenirs for all adults.
The Teamster emblem and union service shop sign help conv^ the idea of good em-
ployer-employee relations. The Union Label & Service Trades Department of the AFL
is anxious to stimulate interest in the Union Label and patronage of fair employem. |
That department is acting as the sales and distribution oflBce in this camptiign. |
Please order by the blank in the lower right of folder and mail to addreu thereon. ^
This is an exceptional opportunity to help create interest In our progreasive industry. '*
Very smccrely,
a-M/f^
General Presidrnt
International Brotherhood of Teaausters, CbauiTeuni,
Warehousemen mud Helpers of America.
'^mMSm
2528
IMPROPER ACTIVITIES IN THE LABOR FIELD
^,^
IMPROPER ACTIVITIES IN THE LABOR FIELD 2529
Exhibit No. 180
-Jl ■ -
OctolMtr 29, 1954
Ur. Eajnsond Colicn, 3*cr«tar]r-Tr«asur«r
LooAl UitlOB Bo. 107
106 Spring dardca StrMit
I%lliid«lphia 23, P*BB»7lvaBla
X AS Tsry sorry If mf r«qu«st
SautitTuma tbm eth«r da/ at tl
tQeoaT«al«BC«<t you, as I lat<
able to k»«p tiM appoiatiMtat
Bla4 oa this prj
at tblM addr
vitb 3]3*ltoa
rt at 1%ila<t«lpbla
d that you v«r« aot
I aa Tor/ aozioua to g«lr IC
in our Oaion Labol aad/Sbop Cai'
Miaiatur* Truck* aad II will hf
la this diroctiOB. SMfltoa ad^
at(Kry to Rartso^tf^HlMt KL tl^tiV
ratlOB is Piilladolp&la
iga t« tlM sal» of
sciato jrour «v«ry sffort
s«d tl>at k« K&v« tb« satire
arc othsr <{uestloas ia your
•ufff«*t taat you coatact Shslton
Ltoa SlMffsz^aaa
ilatioas Asaociatss
75 iast Vaeltsr Drivs
C^ieago, Illiaois
Vs ars Tsry aaxlous to gst ttiis prograa uadsr way aad if it
is possible for you to give it yofsir iaoMidlSat* attsatioa the
while progras eaa be disposed of withia tlM aext tiuree weeks.
rroa tke eatkuslastic rseeptioa vlsicii tlis JsestMrskip gaire, it
should aot be hard to sell 500 trucks ia the Fhiladelphia area
this year.
X expect to be back ia Seattle oa 8owe»ber 8th aad siacerely
trttat that the Job will be so well orgaaised aad uaderway that
It will aot require aay further atteatioa froM mm.
With aiy war« persoaai regards aad siacere appreclatioa for
yowr cooperatioa, I as
rrateroally.
"^jptr-
2530 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 181
3J«3:x*.tv A*ltal^ 3«V-''^-*i»^'
X ...
Ctetalwar a», It 34
Joist Oauaell Xo. T3
704 S. 14611 Str««t
Dear X*wrjf:
I mm vmtf nvarsf if 1& «&; »».; I lat«HC4Nr«4 vitb four
•elM^ul* »ji«eciftt«<l vitit your rvguliLrlvork in 8«vturk,
btit E tut viry aitxif^Hi to g«t 0v»r tl^ufialfttuir* Truek
^K>p Card Caji^t4tB &a4 do it -M>i a fx *"'""' o^ tetAll«(S
«NMrk out of tlM Iat*ro»tl«M»l^'trt^ie«7NN s&t* it suck
lRC«t»iiv« pttMtctty last y<Mtr, aak 9«Bt Txn»;ks to all
of &as 3«crf»t»rlo« ^brotii^ut t!i«/couatry , ttiat ovoryoa*
s^M>uld Iw eoar«rs*at with
I an po»Xti.ve tte*t y«(rStNdftfoo«» of 200 tiaiatare Truck*
la tk« aroift of yotuTi^iMMmtlQb «b4 tako ourc of tiH» vkolo
tki^ vitkia tk« BOkt two orltkroo vMJni.
?ttrkiHP« o»ek Uko^l Uido^ i^l^ like to glvo oac) of tkoso
trucks to «vs#y s««tw(r^ipf'''tk» limcutivs Boajrd. S«»«sr*l
el oio* laCMSft/ Veitms l&st y«£r s«at tk«« to ekiidroa's
iKWfitJtlH aid otk«r Ikaritiss a« ^oriatwAs fifts.
I kiiV9 put S^^^t^,^l^^ff«J■aAtt la ehiurgo of tkc eatlrs
prograw mo tkiTTto tia« of ©sa* faabiattoa of fle« would
aot b* oe«;»pi«d wltk aay of tk« d9t«lls. As you kaow
«• kavs bMMi workiim v«ry hard aad ooaeoatr&tiac our
of forts to g«t tks Sastcra Coaf*rsa«« aadsr vay.
May I afaia say tkat 2 dsoply «ppr«eiat« yoor &8«istiu»c«
aad suppoart aad stqnpMtt tkat you s«t on tkis as <tulokXy
as you oaa. Sb»l tea's addross is;
m. Sksltoa Skoffsrataa
)Ui>or l^ltitioas ^isooeiatos
Ih Sast faeksr Qrlvs
Cliloaffo, Illinois
»itk wans porsoa&l r^&yds, 1 a«
Fratsraally,
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 185
2531
I I I
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I
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s s
I
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I 8
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ai
S S 3
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M 2 X
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lii. 5 -I
^ " s
O M u.
" 8 -
§ & ^ g
: I
IW
NOlNiO NHIis3A\
NOl
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UMITS WILL BE
SEATTLE. IIO_
I ADVISE YOU
f V BISTROU
Rl
2532 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 185A
TEAMSTERS, CHAUFFEURS
WAREHOUSEMEN S HElfERS .././)„
5SJ OINNT WAT .
September 6. 1956
Mr Roy A. Fruehauf, President
Fruehauf Trailer Co.
10940 Harper Avenue
Detroit, Michigan
Dear Roy:
I want to take this opportunity to express to you my apprecia-
tion (or the very splendid manner in which Mr. Al Tice of your
Fruehauf Plant in Seattle accommodated Sunset Distributing
Company as it relates to the use of trailers. Mr. Tice could
not have been more courteous or have done a better job under
any possible conditions.
I want you to know that in addition to being sincerely apprecia-
tive to you I am deeply grateful for Mr !.>. r < inurteous
personal relations in connection with the pr' '. s involved.
One of my very best friends was connected » • if is and I
appreciate the accommodations. It is just an i i- instance
where I am indebted to you as well as to vour .i^-> u late on
the Coast.
Again thanking you, I am
DB mg
cc Mr
Sincerely yours.
"^r-
k
IMPROPER ACTIVITIES IN THE LABOR FIELD 2533
Exhibit No. 186
s.
I
2534 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 187
0«c«mb«T I, 19S3
Mr. 0«v« B«ciK
S««U1«, W»«hiagtott
Dmtur Dave:
Ceafirmiim our coawrsaUcMa. th« Fri»«b«<^^ouad«tio«
kaa lM»of ht • it^f aumotmt at TrumhMoi stock mm4 wlU buf • toUi
ol $t. &00, 000 worth of FrtMiuiul cocamoa stock wiUita a sbort tim*.
I hair* ptrmottmilf •»dor»*4 ib« Fru«k««i aot« la tJb« aaaooat of
It.SOO.OOO. mad ia coa»ld«Mr*tloa tli«r«for, 40 p«r ccat of Ui»
stock koofkt by lbs Fotmd*aoB is bsiaf Bold to m« st Use Fouadstioa'
cost p«r sbar«. I b*v« siraady comptctad tka pttj-cbaaa of i4. 000
aharaa ol st«Mek from tka Fowidattoa at aa avaraf « cost of |2S. 77
par akara. Tkt «atira traaaacUoo will b« complcUd sooa, aad I
will aoUfy jroa tka total cost of tka stock and than tka coat of tka
40 pMir caat ol tka sUsck wkick I kav« boagkt from tka Fcuadatlon.
I waat fou K» hava a copy of my agreamaot wltk tka
Fooadatiea and I aB» attaekiag it karawltk.
All tha divtdaads tkat ara racaWad by ma la eacaas
of tka amouat ra<|«Urad to p^y iacuma taaas «iU b* uaad by tarn to
pay agaiast tka coat oi tka»« akaj-e*. la tkia ragard, I will maka
availakla to you my iacofna taa raturaa so tkat you may kaow kow
naick laconaa tax la paid as a raaait of racaivlag tkasa divtdaada.
Sobaaqaaatiy, wkaa tkis stock is sold, tka profit will
ka cecnputad. Oaa-kalf of tka profit raallaad by m*, after capita)
galas taxas aad taxas paid oa divldaads, wiU tk«a ba glvaa to you
aa a gUt. la otkar words, yam ara to ba tka racipiaat of oaa-kaif
•f all aat profit darivad from tka 40 par caat of stock rafcrrad to
abova. Tou ara to racaiva tmeb prollt irrcapaetiva of sourca from
wkicb It may ba darivad aad wkatkar it ba from dlvldaada. dlractly
or ladiraetly, or fro<n capital gaiaa.
it is my dasira Xu maka tkis gift to you, and I aiaearaly
k^pa tkat you will accapt it from ma. Of coaraa, it la ua^arstood
tkat If tkara la a ha»». tka loss is miaa aad tkara ia bo okiigaUoa
ea aayoaa alaa.
Slncaraly.
diAM
IMPROPER ACTIVITIES IN THE LABOR FIELD 2535
Exhibit No. 188
a^ i2^,<^ 3AA^-
Union Bocks 4 very
in Proxy %a\i\^ P^^^e Treaty
■Rr 9 «MKiia»MaMilili
-v-..«^.'->-
leamsrers,
o^TR^n^
Ward's Sign
,.
Aqreemen^
fWh«t wUi mirtsw
aMnKt y»»" «• «»«>» '■
r*latiasalti|> UMit »<'!
(or maa; J*»r». 1 «■••
into sit* proitlr* whh lh»
2536 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 189A
June 28, 1955
¥ l*"^i RA NT? ■ *' PC R FT *■ l<f.
Re; t->-.«h«s^;f - Poston Strike
* 5'<»;'^^Mr who wes In Klllf^mey
ajf^<i -rsation with Mohn. I sale f-at
t^'.e 't "'ohn fro'n the Tea-^ater crgani-
tnt'. ^, wbT js Seymour's labor '"an, 1s not
act; ^'f- Ad'ey and '->ther Important tniCkers,
t^;t >? S'?!' qrpt** overtures tc the Tes-^sters.
«, that Adley ana Lane fc re
-«tors.
^-ynuuV has cj'nr'lete confix
.,. Vice I'resluant na-ned Davl;
^'■-- ;» ; . t!or. with tMs strike.
•^n 3 A.g.' ^ "jav'sabi !*y of havtnpr
" *' so *■ -'th S(>nn.Anbtr-rr to r^bMclze
' ler.
rtant
'. ''fict r w 1 ^ I, . 1 Dfartlfs
T offered to >.?o to "^oston
• ■- 't^ ■*-, t -^ ' - " -^,Pd
!n the '•^"one sriu said h<
fi- none
>s f-at
n a."e *? - In*? to think
IVlF
IMPROPER ACTIVITIES IN THE LABOR FIELD 2537
Exhibit No. 189B
2538 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 189C
1
\
Mm^
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 189D
uguBt I, 1955
2539
ir«ll«o# ■♦ lirlcar. Ex«o. Vte« Pr»»l<l«rvt,
Pn«h«uf tr«il»r Covpmnff
Detroit 32« itiehigAu.
D««r Mr, Barker I
I eciolo^c th« 9orr«apon4«ae« r«l«tln||; to
Fru«^.«uf' • labor •Ituatlon kt Albany which nr, itlaar
•^ohn g«v« to ■•, and wbioh I diseuas»4 with |o<i on
th« phori* this Momlog.
Aooordln^ to Mr, Hotm, m% hi* rftquvtt t .•
T««^#V»r« orgftiilzer la Albany %»•§ ln»trui««rnt«S Ir.
• •itilng proniqptJy the itrlka at the Pruahauf ;.-xant.
8ut»aquantly, Fru^auf aei-i-ci ac as to ©xcluoa troa; a^i
alaotioD tha throa Taamatara man at tha plant. It \»
say urulara landing that oo ciemeat of coa/'llot axiata
batwoan tCia Ta«natera Onion and tha "aohlolita ' rilo^i,
wMoh la also iavolvad*
I «nil apprasiate knowing what atapa jou
fasl oan oa takan In thla •'. tjatloa ao that I in tui
6ttn adTlaa ""r. Moha,
Sinoaraly,
ArtHkr D. Candan
£nol.
Il/1«
bo: Mr.
Land(
89S3(» ()— 57-
-pt. 7 —
2540 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 189E
mmiOA
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 189F
2541
«j^tHANf»>«
:;^':'<?p?.:.'5'"Vi
2542 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 189G
Au^:st 1'
n piL&s
ne: Pruehauf
Through ^r, Parker It was arranged
't the Pr -kihfkiiT brancn In Allany' wou.ld agree
tz a ^ I'.t '•^^8efit '^l**clS a. P* 1 3 sorition
il s ac •:«•- tar, . e tc louh ire T^a-nsters '•eflcquartera
end f^e Pr-;e*"ia\af labor relations a.:v'sors.
A.
Il/lg
I a ad a
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 190
2543
Mr, I. «• tKvmr
April 12, 1951
JIJST3A
"-«M« BMk sod Oucoitgr <• BmIi* tawfaaod auod wlf«.
»XiO«<X>, oar aar** ivLxw IntsrMt pagfnble evntlOy >t tJit rats
l(f • ttortgBis* on el«v«B '^oo»a o^ ,„ -.. ,^
1%« aseiirit^ ooVRTs the n«ak hocis at 167/ ',
OriW BJi'tiwt. In addlticai to »» roxj tlom hmm tlwy ha-r atUlwi rni»Bt .;
ffiff— rf-C PO^ ^'^ tatt^ioCHMMi, ser^ninte otmrtsrs and rmttnl tatlts oecu;dod
top QtalaBi >4f«ib«r« oXomHj lUTflllatikl vith Ix. Tmik, The othta* owailty Js
atzwttciooUjr loo»t«d tneta they !)«•»• ic<n«3Ulat«cl for lnve0tr!<»it. TIipj- ^
to b* in tli« ftttore pat* of a txm of Siattl* Iwislnecs, and rr. oc:
has ha<5 raoont offer* oo!;rddei-ably abcf»» our appr-'l»sl Lvt 'o holdiji
faallaf thagr vd.ll oontlznw to adirmoo in worth*
Elfmn paroola of '-ropertjr in rxwttla, bK
Hr® on Janwucy 19» 1951, at ■:U5>,1^,''>\ I r.
Lis T^panlaal la baaad on his opinion th"t tfilc vlur^Mon
vbIub la of the dat« of prr-'l«al» Hie otx^sontu in rf.rt,
arae >jolnf deTolooad mridly*" mother, '•T)w»c1ot». r,t 'i
nricam*" \«othor, "A very {-cx>d cumar."
Flnacgj/il Data and Gonaral Infjjm-'^tic^t ' r. ook
•TOfiJliosi as Tloo Pre-, aidant of tJ|-«« In torn tian.l ' \}'-- il
doclliMxi to i^iw a etat«r»ent ff hia »"J-r% rat.'. '<. .'-f- ^-l ■
Uim IkiSom, ctatinf tJ. ■! ha did not dmw a Ijtto i 1 ry •\ '■
bac-ixioa t^iis <uaa hie life vox-k.
His flnnjicl-vl atixtacHmt eiiovm assets of 1, V . "i ,
boln^ 1 bank loan of .";'3^,00n,O0 to Uio a.xn.i '
Thifl arusactiTfld noto la at Z]f' Intrrost vit!. iu>
Borit and fa ORrrled on i yoar to y r H-fda.
in oit2ar to retire tl>e hahk loan lal rot ) ig
rctd r«Ba«Dt, T.« axoat'-a Ir. t>.o loan jv! *>^ ^*
are proooctlng ore to bP tiaod to oar. -l* -to tl-c
•atata ui.ioh b has rMntullnfj.
.-Usro
rr:
In aAiilAon to the leeeta %i
nt l»ie#3jCr),(y>^,T) in ::. s
hfi hold fjBr ay oorfT^cy.
ratir«ionvHr«ixirT08»
will r)roi -tly sc.-riee t
4i£)il
ie fo-y
2544 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 191
^tsihi^al Silt MnsmtuntB €aj|p8ttg
ri -48716
Boyr<»w«r» Qaiv« Bocut a&d HoroXiif E. B««Ie.
Ayeiaat ita<il f«P«»t flse ori^iaal omMt of tli« Icmus mm |273»000, repiQwble
oT«r a t«ai y«ar pertod, idth aimml padacipal laBt«l»«mt« oiT $27,300, oar mor«,
plufl iat«r»8t at 3^ p«r (mztaa.
frgwmt BajLaaeat Prtneipal ia raducad to 1168,335.99, with Intereat paid to
March 1, 1955. The loan is presently being liqvddatad oa a ■oisthly payment
plan of $2,275.00 pltia intareat. For a tlM« Mr. Back aade axtra pajnaants, bat
In order to take acra of soaa outstamdlag indebtadnaaa, hia program viaa ohaaged
and he is preawitly back on the monthly payment plan.
Propos^t Mr. Back has raquaatad a relaase of hia bona proparty located at
16749 atiora Drtra H.E., Seattla, Ifeahlngton, the r^aon glTan for thie request
being that he would Uka to take adtraatage of the Union's aaployee Benefit
Prograa vhloh panaito him to borrow vp to twice the aaotmt of hia annaal salary
on hia hOBia. He plana to borrow $100,000 from this source and apply it on a
bank loan, not otdy to take advantage of the low interest and liberal teraiB
but priaarlly to gat a abort tars loan flaanoad orer a long pelrlod. The oaly
Isdebtadneaa he has outstanding is addition to that be owes Occidental ia the
mantioaed loan to the Bank in the aasoant of $200,000. Slaultaneoiisly with the
borrowing froa the Onion ha will apply to us for a $100,000 loan on another
piece of property aixi refinance the bank loaa so that while he will not change
his debt stnioture, he will put it on a long tera basis.
Other ladebtadnegai We also carry loan 0A93T7 for Mr. and Mrs. Beok, which
was in the ortginal amount of $40,000 and is presently reduced to $24,513.84,
with interest paid to March 1, 1955. Payaents on this loan have alao been
ssade proaptly.
Appraisal; Our Seattle appraiser, Claude M. Ryan, has rechecked his aji^jralaals
Bade January 19, 1951, and has indicated that they are all equal or greater in
present day market value. Thsae ev&luationa total $315,400.
gggSJEl' **^' Book has advised that his worth today is in excess of $1,250,000
and haa aet out his only debta as being the two Occidental loans axd the
$200,000 be owes the Bank. On the property at 4660 Eaat Marginal Way, there
reBalns approxuaately $6,000 which he ia in the process of paying off, aixJ
after thia haa been done, his bank account will be in the neighborho<jd of
$60,000, His annual salary froB the Onion is $50,000, arai he has advised
that ide outaide inccaa, rents, dividends and interest, is in excess of that
amount.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2545
Mr. H. W. Brower - 2 - Mareh U, 1955
RecoBnaendatlont In vlev of the proapt paynent r«oord wb btm had on thia
loan and the percentatfc of preaeiit loan to eralnation of the property, I
reconaend^gH^eaae of the hone proper^^jct 167i49 Shore Drlre U, E.,-^ Seattle,
without requiring any payaent on oar existing loaos.
yj"-^'
2546 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 194
41*1116, 2958
}tr. Jcim P. Killer, l^xmmtdvt Vim fxmeidmA
ViiKMKt D, Mlllor, Ioe«
Ath \vtm'Jo and S«neea street
;.oattle 1, UagMnftcn
Oe-ur r.r. Jillleri
Si^/eraO. daye a^ one of the tcnaata in tlM pmpmif m% $iX-SOk
Uiuoa vsniM eaaied and advleedi ti»t the wUliliM MM fOiag t« to Ah*
of r in liio iaoniil«« Kr. Llfdc w«B(t to tte fM Hi'till Mi <!» i«l«r MM*
r.a!Qr and of ^^cored to snke e Mflb tepcMit ewl z«qtiMrtol tlMB te elMaft Hm
ec^nriee axsd MIX ymx direet, U« offiered %» gMumatfM jwi|»tBt InA i|V«r>
cntly thai muld net eafrioe, Mr* Li«k ^aallflea a» thii ^m MrtiM IM
f-t^em omitinuad under his mimi*
La0t mvmim ve had emtlier tedefAoM oall* «aS I wwl o«k a
t^io oneleeed appXieetioai ttet gut eenrloe v deb ie MMto ««* im |lr« U4I**
nine* It eeene te m timt tf jm mnX tiwee Mile te §• ito yev ttsMty
;rcni my fill oat tlie ei^ialSflRtlett ead laell la tiM ewrtBee* Mmftipt, If
you ui^ JeekaoB Di«i:e to pejr the irtilitio«y Z uooli eagMtl lilMft |«i m
tho fom to Idji «t i(M Vilehire Boal««urd| Lm HpJLee fm m ttiA iM m
Boke arraae«neBte to get tbo MUe ead fteSumi i!ii mi#i< tiilo aif ell. 1»
out of ozTler, f or /on iMgr heve ishstnwted Mr* Oi«pi eftev yon lowAiwit
Kr. Hocdoo'e letter of e<Nloe»
eei Mr. Slaen ¥«&pold
Dmr Sit Uhen X wa eat en thle prepnrtjr luf evHdi«, 1 aotM tt«l tiM
propertgr at ^ s. mOm m» VnOest, Z vsatmn^bmaA thit ym
reeentSjr aoquired thie, and X food a mmSmt of jtm^pK^tn in ilMve pleytim*
Both the fMBt and baek doers ead one idadoir mm open snd Z «tt«w|ad to
elose ihm, Romovw, there mm m jmrn of glMs e«t, nl I wold wl&oiMlo
thegr went beek ia as aeea as 1 loft,
Inei&Btalljr, la the pnpm^ eocialred Isgr NT. Miller, Z
(me of the teaa«tits has aoved end as "
ie soee ArletleB betwo'm the other
be etmJLgfatened oat. Zt aagr be that yoa era aot to* iiwiiinwiei «• to
eto., bat In aqy evant Z thoagbt Z aoold paaa the iOmmmm « te 90« fir
vhatotar It la worth.
B«,^ regards!
▲•II. B.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2547
Exhibit No. 195
552 Dawry w«jr
SMtUe 9| Washington
Dear Davsi
W« hav« in«p«ot«d the propw^ at 22^9 Tiate Sil Mw FSm* sad flad It to
\f OB irregulMr shaped lot on tlM aoaUamgi Ham of Tl«fai Ml Mar Omm
mpproximUil^ 203 foot nmrttnioot ^ flote Dol Mw Aimmmo, Togwllj ilotnrlTirt
M Lot 70 of Tftet 5917.
Tho hoooe, 24 /ooM old
residonoo* vo(
and 2 bs^}, idth
•qtaMngi f a*% and tho
ia a oao otoxy otoMo on tmm, sLa^ faaUsr
«df» ooBKLating of Mx roB— (3 1
eaeago dotaafcariU Hw faewM 1m9 an
400 aqioaM fo*l*
^ym
Th« lot la vvjy wall landaoapodf aprlaklora aro iB« and thoro aro a wsmbme
of retalalBg ualla. Tbo ]cit<ftaBt floor ia oovarod lAth linoaoMig tllo im
tho batha, with oak noon thnRttfxmt. Thora aro a flroplMO and «iit hmA,
vith autoMitio wator hoatara, Straot ia ■aoadoM*
fha fananl oooditloB of tho hoiwo ia food, tetb iatofiar and agntaadar* It
prohabOy voold hafo a paroaant iagr raattal valua ia aarooaa of HSO* It ia iM
a good oXaaa raaidantial aroa in tha BoUjrvood Hilla |Wit aovtt of iMoklia
ATaoRw OB tho uMt aido of Boo^Mwd QrlVB, fbrn tatm ia lOQf 4ai»aa»yad, i»
two bilMdca fMa tea 1Lbo» fima lOooica trem MteNdL* ai
nio proMBt mmar paid |23,$00 Iter tho propart^ a nar aga and apaMi l5«aQ0
for ronovatian. Baaanaa of tho ago and tha ftet tlMt it ia a hillMda pva^
«rt7* it Bi^t not aaOl too raadiSjr at aora than |aOtOOO» tat to aagpoM #»
aanta atMh a pfwaHy and an «aa it| it wtmM ammae to im ta ba priUiai
attmoUiMljr «t l20»500, «i«i tha dr^^ inaandad. fa an aMaptatIa %on
m voold h««« aa haaitaaagr in ImMMg ty ta 6Qf( of tha porahaaa p»iaa«
UhM Mr. PraakoMld aalla, X idU ge into thia nattar ftarthatr fbr |«tt aal
AdTlaa, If tbara ia aagrthiag that Z Iwva tfvavlaohad in thia mtlar» till
TOtt drop aa a liaa*
Boat ragundai
ANBite
n
2548 IMPROPER ACTIVITIES IN THE LABOR FIELD
IMPROPER ACTIVITIES IN THE LABOR FIELD
2549
APPRAI^ S
PROl'
<1 I'OKT ON CITY REAL EST^f
-JLIfixnls.
PRO'i
IMPROVEMENTS
A ( Trpe ■ Coojinjciion • Fwndautp
1 Ginuc Ek.) V.lue Each Building
B. r.j-.
£' n. -. .
'-•'■"* '•' ■ '
.?*'",
f^
rev:
,^AVV^ U!i IW- WggT
TE OZ. ■
, "^- HOlffi SEEN
D...-
iv.,in«, o^.r. Hoi;jnroo<J
^ .'j. * . ./ .-
' a«.. ^ ^,i.'!i_ _ij5fti. .iiSti J fw^^
FOR PROPERTY
'JAL $$.000.C>0 JtK KKSC/VATi^N
ar. AI® WANTS TO BE CIvOSER TT-
" ff r ir»" 1 ■ ,■ , « , <it^ci. d<ron»l«a »n<l ttuxi mam
,,„. , 15^00.00
%rz PL' T .'- rrACHED
n.,«4 April 18, V
)^^^
:^^. '"^"
2550 IMPROPER ACTIVITIES IN THE LABOR FIELD
MnHC^IANDUli
b
tirll a, X9S2
^tyy yjpf.fff*
ftlt^ cvad^ 2 %ia]M« t* Mr
^•t tlM lou OB tte IMpMPtr «M
tte wjr Df llaaaelaK.
Htet tlMT wart*^ te \m omUiM af «m tiMtt it imtLi aot b* la
«i WW nfeMura «• voKldi aot Lmhi ad «o g*^ «■» Mm of tk*
—wt of loaa «• iMMli mlw.
X tcM lite of ^r l«Uw^ to Mr. Bo*, aM ho i* vdnoiiBg «• «|U
Ma to dtooQM tboir «0Q«ii«ltlQ« of tbo i»w>ortar tlM first pSrt
of tHio WMk.
4. M.
Mortgage Loas Dt^partaMHt
AMBttaa
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 196
2551
National Mortgage, Inc.
A WASHINQTON CORPORATION
January 13, 1955.
Oiridenial Life Insurance Company of California
1 151 South Broadway
Los Angeles 54, California
Aitention: Mr. Thomas S. Hession
Assistant Secretary
Criterion Films, Inc.
306 Fairview North
Dear Mr. H'-ssion:
During niv various visits with you at your home office, I believe it
■xas quite thoroughly understood between the two of us and the others of
vour tomjiany that you would not be interested at this time in any conven-
tional loans. The enclosed offering, however, is submitted to you regard-
If-s- • i>«tand!ng lor various reasons. First, 1 personally believe
;• • .od^^wan. Second, it is on terms which I feel should be
aitfii. ..^ > vy ...Jir conipanv^ Third, I believe it is of extra value to you
bt'( au.se of some of the stockholders of the corporation. I want to call
specifically to your attention that Mr. Dav_e Jg^gq_k, International Teamsters
Union, is one of the pri.'-^tiple stockholders of the company.
! would appr
• 'i offering {
^ ir porifolio
It ;or firm comn
mortgage in
: itc it, therefore, if vou would carefully review the en-
pt rs and see i! it would not be possible to include this
ihuh we are servicing for you. As I herewith present
tnient, ;t is for a twelve year five per cent conventional
he sum of Twenty Four Thousand Dollars ($24,000).
Please find
losed the following papers:
I
1 . Loan Analysis
2. Signed Loan Application
3. Satisfactory Credit Report (2)
4. Letter giving a resume of the company's operation
5. Partial list of the Mortgagor 'stiL^at*.-^
6. Financial Statement coverin^six monJi>^eriod ending
August 31, 1954, together wiffM&artance Sheet and
Operating Statement.
7. Complete Appraisal report, including photographs
8. Original Building Blueprints
2552 IMPROPER ACTIVITIES IN THE LABOR FIELD
K
' Mr. 1 ■
Januarv .
Pag*> 2
A brief review of the papers for cor
the following:
Criteria!! Films, !,:■ • .rporated h,. ;, b.<"i -. •. '^
in th,'
the p..
salaries lu iun^i-rt, einn ,.trM<ri.-u.
Its have fluctuated between $600 ar
Appiiiant entered into an ext la?
•i of $450 month]
The co.'-npanv .
r,o\^ rem dining the sum
owner assigned the coi ■
.iD..au at;un. Altho-n-h ^
IMPROPER ACTIVITIES IN THE LABOR FIELD 2553
Exhibit No. 198
rt*»n»»rT 17, 1955
Criterion rUm, I»e.
306 f»Xrrimi l»orth
AUwntloDi Mr. T. G. Witt, Pr«»ld«t
twtlflpKii
|bl« l«tt«r Mill oonTLrai agr t«l«fifeaa«ii report W jrsu a few Oa/s ago wh«r«in
wf in£anmi ym tJ*** «»• l"""* me^wKt » fim mi— dtaont fro« on* of our ,>rij^
«if»«l« tffpmt^rim » ar*t ai»it«N(« !•«» *« ^^ propwty your ooKput^^ o««upi«»
»i tiM «JMNr« iddrMi*
Th« loftn MM «p|iror«l «t $24,000.00 to mmrtUa in 12 j^vnr* with aontiii/ p«/>
mbU t« iMlni* iMmrm, at $)(. ffe« mmihl^ P«jrwnt «r $221.^ U to b«
«u4^«ftiMl iRjr an MMnti atiMd %• lAS af tfe« «mM«l r««X Mt«i« tMM «nd hiuurct
iniMraiM* pr^itlw, IM aise^fftgt wiil pwrl4« f^w |Hr»"|)«jiw«st priviiefwa *» fol-
«-l<U.t>lBRia pA^Mtt* lA «»»«•• «r Umm« r«(]tar«d abtrr* my m Md*
<it tliU now oi anjr imUXlummlt, vjimmt 4mf la an Mwwt aqjuia to
«»« MF mat* BMW^ «Mri>lilf MiUHNrallv« priiMip*! fitm^$0t» petr^lidmA
mmk wtciltiena. p^fWMlM <i» a»i «Be«Mil 3Qtf «^ tb* »rlflis*l prii>-
«i{iN>l MKMAt «C 1Ml« obM is «egr mm W«l«w MOiti p«rie4, a«lcm>-
UtMl nrw %k* 4rtt ifitMNPwA Urtt mmmtum tMHr«nci, md ii»t such
ijrtH iwu„] ptj'ijita ar« «ppl4«d •• tl»f lavt mturinc {>rlA«i{Ma In-
«i«U»«*s. %Mi privUtga i^mOI te »i9{»-^B»na«Uv«. this Bsri«
fltagr ^« fu^i in f«U «fMr 10 4«^ tMHtlM to tiw lieldBr en nay in-
•UUpMit p«|«M* 4at« by t»^im Mk fiell(r<4a« fa«c«« p&yec^ iA
«4iili«i to Um mpkid pilMdi^ amomt tmd tttwmA in%mtmU (»)
n 9t %im 9ti^ml FSin«l#Ai imk»«« U P«i4 dwniMI U>« flrvt %m»
7«M« f«il<w|||| «1M «M« Inl'M^si flr»% «««r«iM kmrmm, M n 9£
Ik* Mlgl»a |«t«iaipftX memA if p»id tli»iAc Um Vtdri Ktd fwirth
|)iMf fckUiiMUil Uk* 4iA« iM>«rmA rir«i fto«nMW hmttmt m (o) IX
9f m* mtgM- pHcMliifti wotait U p«^a4 la fiOl «n«r Mdd
•iltlPNPi
2554
IMPROPER ACTIVITIES IN THE LABOR FIELD
OAXmUn niM, IM.
17* im
¥««7 t»«Ur fww*,
MflGMAI. MQRimai* OB.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2555
Exhibit No. 198A
89330 O — 57 — pt. 7 -37
2556 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 198B
^■: CORPORATE RESOLUTION OF AuTHORlTY
"HfiuHV»<i ih«t Seattk-Firsu NMiotmU B«nli i« hweby selected as * b«nk of skn^^it for the
Occideat*} Ufa Inauranc* Comp»ay of Califoroi*
Coavvntional Mtge. Truatc* Account
funds <>i !hi» curporatiun. which may b« withdrawn on checks, draft* or advicct of debit
jjiven 01 signed tn the corpurait r.am« by any Oft«i of th« following
DoA Heiittnd (or) Gw«a »«bcock or
Sicrman S. '^•phsa* ot
U. H. Roine or
MadvUiAC A. NiWB or
ituch of wiwm i» »i»o auttwriied to draw and accept drafi$ and execute cwilracta arvri oth»r a«[ree-
menta b«tw««5 the b«nit mui th« ccporation. and tocoJloa, diiKount. t««go»i«w. indora* and aaaign,
01 ih« corporate Jiaiine. all ch#ck«, draft*, notes and oih*r {>«43«r p«y«bk to or by tbia corporatton;
and ai! auch pap^. aigned «« a/or8«ajd. inciudin* checka p«tyabl« to tb« order of any ona or more
of aaid t-rrsona or to tadatar ahaJi be h«iw«d by t»w Iwnk and ch»rg»d to oui account. Endonw-
inrnu lor dii)>o«it may ba made by rubbor stamp and ahtiii bind the i.'orporattoti to the s*ni«e4»ct
as though ftign*»l by the properly authonzad ofhcerU). Thai authority sh«J! .onimue in foice until
notice m wriiing of it» ravocatwn ahail h«v« b«an ftivan to and racmved by th* Uwik Ail !r«n*-
actiurw gioraaaKi which rutve t«ken ptacc heretofore ate h»r«by confirmed and ratified.
We. I>oo ii*41und . ih« Pn
and »«r«Aa 8. St«p«i««« ,h« Secrnwy
oi NfttiwMU Monf««*« Ibc.
hf lat the forafoiiii; »» a full. trw« and torf««t copy of a r«»oluti«n adoptad by
I: t«» of n*i4 ecrporauon »% * maatinf duly and f#gui«fly cnJltd and h«ld on
' Md ilMt wid reaolutiaa if duly rtcwrdad and appear* in th*
minute book ot tMid t9rp9ttntwt. and bu not been ait«r«<l. WMnda^ nor r*voh*d
Jn witnras wh«r*©f wr« havt fecrtusta «tt out h#i»d» »M tha ttal of *«d corpotation
• ho- >7tlk day of Ukrc^ ,4 SS
i
*t.^L Oh CQfii'OkATION \ - .
X&D
\jX^/)c^.^^t.i^K^^
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 198C
2557
:HMI0NAL MORTGAG£.iN€:
A WASMINOIT0N CDtlPOHATION
xa4 pcxTsa avk. • kl. «oto
• CATTLl ». WA«M.
FebruAry 25, 1955
Mr. ThomAS S. Hcssion
Assistant Secretary
Occidental Life Insurance C
1151 South Broadway
Los Angeles S4, California
ompanv of California
Dear Tom:
la reply to your Jetter of Februarv IS rriative to setting
up the bank account for the Criterion loan, I wish to advigt?
you that we tirill use the Seattle First National Bank as we
have on our previou* accounts, and that the fol''"» " ■ '■■'■'
will sign collateral: Don Hedlund or Owen Bab-'
F. Fleharty, and Sherraan S. Stephens or Johr,
Donalif H. Browts. The checks on the bank acco^^rii . lU '.■-
signed by any one of the following: Don Hedlujsd, Gwen BaV.-
Sherman S. Stephens, John H. Frame, Madele*"- -^ "■' '■ -
If you will forward us the usual forms iot i.-
we will execute aame and return them to you im.'T „ >
I sincerely appreciate your consideration of our ? ■
for acceptance of loans in the cities north of ua, W«-
currently getting together additional data on each on«
and a« rapidly as 1 have accumulated sufficient for e^
to give you a better over-*U understanding of the ter
I will forward the material to you.
Thanks agai
Sincerely your**,
Sherman
.Secretary - i r- %^-,i
and General Maa»i
S5S/hlb
Air Mail
2558 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 198D
i:
/• -
iM. ^'-^.t-*!
IMPROPER ACTIVITIES IN THE LABOR FIELD 2559
Exhibit No. 198E
"*" ^ttihr '«! Clfr Jtwttranrp dor ♦ang
InTvstJMiit C<MBdtt«« SVWCT Loan Application
Criterion FUjds, Inc.
Applicant ; Crit«rion FHaa, Iiw,, & corpor«itl<»
Loan Appljad For; $24,CO0 - 12 ytmr* - 5* - prcpa3f»«ait privilei?* 2Ui «*ch
year without bonaa, 3% of original aaount durirsg first 2 year*, 2* iurlAg naxt
2 yoara and 1* tr.«r«aftar, Konthly paymwit $221. 9«. .. ^^^
Security; First lien upon one atory concrets block office bta.lc!lnf at ^l>6 ';;iSt-f
rairrleir "North, Seattle, Waanington.
Appralaal; Thia property was appraised on r.'oveBsber 2'., IvSi. by ."rarU-. 0, .Hyan
Seattle Inpraiaer at >40,000,», The land VKiue in tai^ ao-raisal is *1:<,.\>;,0C.
The property consista of a lot -40 feet by 120 feet ian-ovoid with a one story
concrete block btiildlng having an area of 3-*?8 square Itet. Although used for
offices and photographic studios it is a general nurpose type build inj; witn
functional flexibility. It is iwll located in downtown Seattle.
iij,«torT of applicant; Applicant was incorporated in 1V49. It is engaged in
the production of dociasentary and -lusineas films for labor and .induatry to b«
uaed in teleTision orcadcaating. Its clients include many of tae larger
busineasea and induatriee in the Northwest area. A partial list of tneae cliente
la attached aa Exhibit A, The stock in tne corporation is ,-:d as follows:
Claas A - Dare iieck, Teaniatera Labor Sxec^-tivc 110 s-,ar«si ■wKoes,
Taaaaters Labor SMCutlT* 40 shares; Mi- -is liatcllff
5 sharea,
Claac 8 - Batwat D, Jones K) sharea; B, - . -. -ntt
201 sharM.
Purposy af Loan; To aacerciae option of p-..r .fjiase
property. Four y^ara ago applicant entered intr .> ■■"itiiaes »^ter«in
the rental of $450,00 a aionth can be applied tcwara t rice of the
nroperty. Through the exercise of tfiis option to pun-. ~ant can secure
title to property by paying a balsi • x.-.OO, Ail .-^j-fnts unrier leasa
are paid to date,
Financial Conditiop of Applicant; .r. Aiv.-ust 31, 1V54 apnlieant nad currant
assets of i26, 275,00 with current liabilities of $6,604.69. Its total aaseta
were $43,863.00 with a net worth of $37,258.00. Altnough tne co«nany has not
operated profitably since its start p,uoh of ti.is was iuc to losses occurring
during its first 13 months of operation due '.o if\f, racier*! Coraffiunicationa
Coaalsalon freese on television operations. ^Airi- ' ■, •:■ l-'n f«-« years its
operations have beep profitable and its outloo? «? to tne number
of new television aiationa in the northvmst ere wiru filming
of short subjects fpr televiaicn,
RecoBreendatlon; It is recoawended tnat the cowaittee anirov" th«! abcv* loan
in the amount of $24,000,00 to "riterlon ''ilJia, Inc. loan to De ser-rlred by
2560
IMPROPER ACTIVITIES IN THE LABOR FIELD
ieposits fo
"f! the loan.
'.T.ent at par.
J^Mft^^MA^^^J,
^-< 'f
IMPROPER ACTIVITIES IN THE LABOR FIELD
2561
2562 IMPROPER ACTIVITIES IN THE LABOR FIELD
IMPROPER ACTIVITIES IN THE LABOR FIELD 2563
TELg'ISIO?! S.CU'S 13 each season
—————— j^-J gt,Q«a
.:j 6 s^iowo
\
2564
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 201
0^.
mES flftS^ AVB*-"F BKS1L^<^F.A
^^B..^jS^V^^>
'AMmfGT€»^
-,^1^3
/£.- i^-^
.^-^
^/fM.^trtf*'^^' -'-# <fl6-v*<^^
i4<-U
•» c*^ -^
*i^.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2565
BAVK»flMHHH
m
A
'"'■i
CITT /UWSOBrT CO..
% ceoRQE c. REinx.
abb DEXTtR HORTON BUDG. ,
r,E»T-r!.K ^. WASH.
T
diC-M-^i
1,,'7 05 6
1,0 0 0.0 0-
.54 m
FEB 4'55
NAR24 "35
?7 05 6*
2 7 0.0 2«
:':::::. ':.::^::^:
CITT AIWSOIKIT CO..
% GBcmt c. mnu^
866 DEITEH HCeTtW BtW.,
SEATTtE 4. fASH.
KC31^-?
2566
IMPROPER ACTIVITIES IN THE LABOR FIELD
MPosiT TO TMC cscoiT or
r^ /.
ptopi ( s N\riovM B^sl^ of w^shiv.ton
\IIH CWECX. St
CunnCNC
Siivcn
Utf «* *A,>c~* ' ' '
/fjjS'^l /.fiC2.^--
'^j^a,..^...,.
fff.ciis ^^rl()SM B^NKt)> w^sHiv.roN
■ "*!!*: e^-<_
Cu«»»«Ncy
S£E tm*t All C>
'.*.% AMD ORATTS ARC EHDOOSCO
// v /^'^o
-HtC'S AK[ j«
^S»Wt CNOORKO
IMPROPER ACTIVITIES IN THE LABOR FIELD 2567
rEfUM.KS RANKK
866 OUTts'iloaTOI KJKi,,
StATTLE 4. ffMB. f
1,OOOjOO ^ WRIO*??
CITT AKISEUEJrr CO. ,
% GEOBGE C. HEtEtL.
866 oExrEn aonroN bi
SE*rae 4, iasb.
«MOU«T HCnj«-~- K5»w»-
1.2 7 0.5 6
2568 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 202
S S S
^ 8
Q O
$ I
i i
i «
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 204
2569
%. . tlY'-r-UkS
Ih rKnhAl.
.^Jhrc^^
</
June -u. 1U9
2570 IMPROPER ACTIVITIES IN THE LABOR FIELD
EXHIBIT No. 204A
IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 205
2571
JOINT COUNCILOP TEAMSTERS No. 28
AffU4st«d iviih tht AfiUficm Ftitratio* of Labor davi kck. f,mi6m« t w mcwsth. w rT,«„„»
552 D.nny Way • ELiot 25M
CEATTUE O. WAfHIN<rrOM
B»l«nc«8 Brouffit forward
Olynplc St«MUi Hating (due)
John C. St« Teruron
Cldb of Veta. of foreign »u*8
500.00
3,1*22.89
"3,500.00
li^bll
.iti»8
Loan rr<M
Joint Council #?S LegiBlatira IWd
15,000.00
Highway Fund
6.500.00
2"
" ConTsation fuiid
17,000.00
Local yl?lj Benefit /und
36,000.00
Ibatvm Conferenca Of TeaMrtera
3,000.00
I-I1-5I
U,000.00
2-19-51
5,000.00
3-7-51
7^500.00
I4-30-51
10,000 ux>
W/Cto
John
Lindaay foar Bldg. Aseo. 5-5-$l
10,000.00
Loan froa
•••twn Confer«»oa of Temtara ^-6-51
10,000.00
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2572 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 207
IMPROPER ACTIVITIES IN THE LABOR FIELD 2573
Exhibit No. 209
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2574 IMPROPER ACTIVITIES IN THE LABOR FIELD
Exhibit No. 210
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IMPROPER ACTIVITIES IN THE LABOR FIELD 2575
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RETURN C:
[OTHER THAN oUriistUll'JN ^j tAtMrs IKUM iAX UNUt^:
SECTION 501 (a) OF THE INTERNAL REVENUE CODE OF 1954
2576 IMPROPER ACTIVITIES IN THE LABOR FIELD
INCOME. DUES, CONTRIBUTIONS, ETC.
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177.
IMPROPER ACTIVITIES IN THE LABOR FIELD 2577
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2578
IMPROPER ACTIVITIES IN THE LABOR FIELD
/.
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LIBOR OR MANAGEMENT FIELD
EIGHTY-FIFTH CONGRESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 74, 85TH CONGRESS
JULY 16, 1957
PART 7A
Printed for the use of the Select Committee on Improper Activities in the
Labor or Management Field
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPEOPER ACTIVITIES IN THE
LABOE OE MANAGEMENT FIELD
EIGHTY-FIFTH CONGRESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 74, 85TH CONGRESS
JULY 16, 1957
PART 7A
Printed for the use of the Select Committee on Improper Activities in the
Labor or Management Field
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1957
Boston Public Library
Superintendent of Documents
OCT 9 -1957
SELECT COMMITTEE ON IMPROPER ACTIA'ITIES IN THE LABOR OR
MANAGEMENT FIELD
JOHN Li. McCLELLAN, Arkansas, Chairman
IRVING M. IVES, New York, Vice Chairman
JOHN F. KENNEDY, Massachusetts KARL E. MDNDT, South Dakota
SAM J. ERVIN, Jh., North CaroUna BARRY GOLDWATER, Arizona
PAT McNAMARA, Michigan CARL T. CURTIS, Nebraska
Robert F. Kennedy, Chief Counsel
Ruth Young Watt, Chief Clerk
n
CONTENTS
Statement of Montgomery Ward & Co.
Page
Testimony of Barr, John A 2a
EXHIBITS
218. Memorandum of agreement between Montgomery Ward introduced Appears
& Co. and International Brotherhood of Teamsters, ™i P^igs «" page
A. F. ofL 15a (*)
219. Report dated March 10, 1955, to Mr. Avery, re Teamsters'
union, signed by John A. Barr 21a (*)
Proceedings of July 16, 1957.. la
in
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
TUESDAY, JULY 16, 1957
United States Senate,
Select Committee on Improper Activities
IN the Labor or Management Field,
Washington, D. G.
The select committee met at 10 : 30 a. m., pursuant to Senate Reso-^
lution 74, agreed to January 30, 1957, in Koom 357 of the Senate
Office Building, Senator John L. McClellan (chairman of the select
conunittee) presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Irving M. Ives, Republican, New York ; Senator John F. Kennedy,
Democrat, Massachusetts; Senator Pat McNamara, Democrat, Mich-
igan; Senator Karl E. Mundt, Republican, South Dakota; Senator
Barry Goldwater, Republican, Arizona; and Senator Carl T. Curtis,
Republican, Nebraska.
Also present: Jerome Adlerman, chief assistant counsel; Ruth
Young Watt, chief clerk.
The Chairman. The committee will be in order.
(Members of the committee present at the convening of the session
were Senators McClellan, Ives, Kennedy, Mundt, Goldwater, and
Curtis.)
The Chairman. The Cliair will make a brief statement before we
proceed.
On May 14, 1957, this committee heard testimony in a case involv-
ing Mr. David Beck and the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen, and Helpers.
Mr. Alfons B. Landa testified (transcript, p. 4114; printed hear-
ings, p. 2255) that he had read that tlie teamsters' union purchased a
large part of Montgomery Ward stock and was going to vote it in
favor of Mr. Wolf son in the proxy fight, then going on for control of
Montgomery Ward Co.
Mr. Landa further testified that on encountering Mr. David Beck
in a Fruehauf plane en route to Washington, he told Mr. Beck — •
that in the event he supported Montgomery Ward, I felt sure he could have
the opportunity of organizing Montgomery Ward. He had sought to do that
often, I had read.
Landa further testified that Beck said :
That is a good idea.
Thereupon, Landa telephoned Mr. Richard Nye, who was the proxy
solicitor for Montgomery Ward Co. Landa testified that he —
la
2a IMPROPER ACTIVITIES IN THE LABOR FIELD
told Mr. Nye, "I have seen Mr. Beck and Mr. Beck indicated that he would be
willing to see that stock voted for management in the event that he had the
opportunity to organize Montgomery Ward."
Mr. Lancia further testified Mr. Nye said :
O. K., I will pass the word on.
The record shows that the teamsters organization purchased 2 blocks
of stock, 8,000 shares and 4,500 shares, totaling 12,500 shares having
an acquisition value of $1,116,066,
The teamster's union organized Montgomery Ward and entered
into a contract with Montgomery Ward on March 31, 1955 (transcript
p. 4116). Subsequently, the teamsters voted their stock for the man-
agement. This fact has been learned from staff conversations with
union officials as well as statements in the press.
Shortly after the testimony of Mr. Landa, Mr. John A. Barr, chair-
man and president of Montgomery Ward, wrote to me in my capacity
as chairman of the committee, protesting against the testimony of
Mr. Landa.
I advised Mr. Barr that under rule 12 of the committee rules he
could request to appear and testify, whereupon he forwarded such
formal request and pursuant thereto he is present today to testify
before the committee regarding the issue.
Mr. Barr, will you please come around ? Will you be sworn, please ?
You do solemnly swear that the evidence you shall give before this
Senate select committee shall be the truth, the whole truth and
nothing but the truth so help you God ?
Mr. Bare. I do.
TESTIMONY OF JOHN A. BAEE, ACCOMPANIED BY HIS COUNSEL,
CHARLES J. BARNHILL
The Chairman. Mr. Barr, will you state your name, your place of
residence and your business or occupation ?
Mr. Barr. My name, Mr. Chairman and gentlemen of the com-
mittee, is John A. Barr. I reside at Wilmette, 111., and I am chairman
and president of Montgomery Ward & Co., in Chicago, 111.
The Chairman. Thank you very much, Mr. Barr.
You are appearing here voluntarily ; are you ?
Mr. Barr. I am.
The Chairman. To testify ?
Mr. Barr. I am, and at my request, sir.
The Chairman. Do you have counsel present?
Mr. Barr. Yes, I do,* Mr. Charles Barnhill, at my right.
The Chairman. Mr. Barnhill, are you from Chicago"?
Mr. Barnhill,. I am.
The Chairman. Give your address, please.
Mr. Barnhill. Wilmette, 111.
The Chairman. You are a member of the Chicago bar?
Mr. Barnhill. A member of the Illinois bar.
The Chairman. All right; thank you very much.
Are there any preliminary questions ?
Mr. Barr. I have a statement, Mr. Chairman, that I would like to
present, if that is agi-eeable.
The CiiAiRMAx. You have furnished a copy of your statement to
the committee in conformity to the rules of the committee ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 3a
]\Ir. Bark. We have.
The Chairman. Is tliere any objection to the statement being read,
gentlemen ?
All right, Mr. Barr, you may proceed to read your statement.
Mr. Barr. First, I would like to express my appreciation to the
committee for permitting me to appear here today and to attempt
to correct a great wrong which has been done to Montgomery Ward
& Co.
As the chairman stated at the beginning of today's session, on May
14 of this year, Mr. Alfons Landa testified before the committee, in
substance, that he advised Dave Beck to vote the Montgomery Ward
stock owned by the teamsters union in support of the management at
the annual stockholders meeting in 1955, and that he suggested to Mr.
Beck if the stock were so voted the management would probably per-
mit the union to unionize Ward's employees.
Mr. Landa further testified that he understood from the newspapers
the teamsters union did vote its stock in favor of the managament and
that Wards and the union entered into a labor contract.
From this testimony, a large segment of the press and at least some
members of this committee, inferred that the management of Mont-
gomeiy Ward had entered into an improper agreement of under-
standing with the union under which organizing privileges were
granted to the union in exchange for the union's support in the proxy
contest wliicli was being waged for control of Montgomery Ward.
It was inferred that Ward's forced its employees into the teamsters
union without regard to the wishes of the employees, in exchange for
proxy support from the union.
The publication of these completely false charges and inferences has
done great damage to Ward's reputation, and has been injurious to
its relations with employees, customers, and stockholders.
Each and every one of these inferences is untrue and I welcome this
opportunity to publicly deny and refute them. The facts relevant to
this matter are as follows :
1. There was never any agreement or understanding between Mont-
gomeiy Ward and the teamsters union, or between any representatives
of the company, concerning the voting of any Ward's stock the union
may have owned or controlled. No such agreement or understanding
was ever discussed or even mentioned between representatives of the
company and the teamsters iniion.
2. Ward's did not know in 1955, and does not know now, how many
shares of stock, if any, were owned or controlled by the teamsters union
at the time of, or prior to, the 1955 annual meeting of stockholders.
Also, Ward's did not loiow in 1955, and does not now know, how
such shares, if any, were voted at the 1955 meeting. The union was
not a stockholder of record in 1955 and no stock was registered or
voted in any name which is identifiable with the union.
Although the press reported during the winter of 1954—55 that the
teamsters union had purchased some Montgomery Ward stock, the
question of whether or not the union owned or controlled any Ward's
stock or how any stock would be voted, was never discussed between
any represenative of Ward's and any representatives of the union.
3. The labor contract entered into between Ward's and the teamsters
union in 1955 covered no employees other than those who theretofore
4a IMPROPER ACTIVITIES IN THE LABOR FIELD
had voluntarily chosen the union as their bargaining agent in the
manner provided by the National Labor Eelations Act.
The dates and other details of these representation elections con-
ducted by the National Labor Eelations Board in accordance with the
law, are available to you in the public records of the Board.
Similarly, Ward's has not entered into any agreement with the
union subsequent to 1955 covering any employees who had not volun-
tarily chosen the union as their bargaining agent in tlie manner pro-
vided by law, and concerning whom the company was legally obligated
to bargain.
4. Ward's fully recognizes the right of its employees to join or not
to join a union as they wish. This policy repeatedly has been pub-
lished to the employees over a period of many years, and no employees
of Ward's should or, so far as I know, have jointed any union under
the mistaken belief that the company demands, expects, or desires its
employees to do so.
5. If a majority of the employees in any of Ward's units vote for
the teamsters union, or any union, in a free and secret election, con-
ducted by the National Labor Eelations Board, the company must
under the law, and does, bargain with that union and seek to effect an
agreement.
That was what Ward's did in 1955, and that was all that Ward's
did so far as the union was concerned.
6. Alfons Landa, who brought this subject before the committee, was
not employed by or in any way engaged to represent or speak for the
company at any time. Any remarks Mr. Landa may have made to Mr.
Beck, or to anyone else, concerning Ward's were unauthorized and
wholly voluntary.
I personally handled all labor negotiations on behalf of Montgomery
Ward & Co. with the teamsters union in 1955, and prior years, and I
have personal knowledge of these facts.
An iniquitous agreement of the type that has been inferred from
the testimony of Alfons Landa could not have been made without my
knowledge.
Tlie fact that the distinguished members of this committee were
misled into drawing false and unfounded inferences from the testi-
mony of Alfons Landa has done substantial harm to the good name !
and reputation of Montgomery Ward.
I have attempted to lay before you the facts which completely de-
stroy these false inferences. I trust that we may have the sincere j
support of the committee in this effort to undo the harm that has
been done.
Had the inferences which were drawn from Mr. Landa's testimony
been true, I would be among the first indignantly to condemn such
action. The fact is, however, they are completely and absolutely
untrue and unfounded.
Thank you, Mr. Chairman.
The CHArRMAN. Thank you, Mr. Barr. If the Chair understands
you, first you say there was no collusion, no agreement, and no con-
sideration given whatsoever to the teamsters purchasing the stock
and voting it for the management.
Mr. Barr. That is true.
The Chairman. I find in your statement here, in the conclusion
of your statement, a statement that an iniquitous agreement of tlie
IMPROPER ACTIVITIES IN THE LABOR FIELD 5a
type that has been inferred from the testimoin' of Alfons Landa
could not have been made witliout your knowledge.
You do agree that if such an agreement vas made, such a contract
or understanding was entered into, it would be somewhat iniquitous:'
Mr. Bark- I think very mucli so, sir.
The CiiAiKMAX. You lield what position during that period of time,
in Montgomery Ward, tlie same tliat you hold now ?
Mr. Bark. No, sir. At that time 1 was a vice president and secretary
of the company, and a member of the board of directors.
The Chairman. You say it could not have happened without com-
ing to your attention or to your knowledge, any such arrangement.
Could someone else, some of your superior officers have handled
the matter without your knowledge ?
Mr. Barr. No ; they could not have because, as I stated, I personally
handled all of the negotiations and dealings with the teamsters union
(hiring that period, and 1 was in daily contact with Mr. Avery, who at
that time was chairman and chief executive officer of the company,
and it would have as a practical matter, been impossible.
The Chairman. How soon after the proxy fight was won before
the contract W' as entered into with the teamsters union ?
Mr. Barr. The 1955 contract with the teamsters union was entered
into on March 31, of 1955, and the annual stockholder's meeting was
on April 22, 1955, approximately 3 weeks after the labor contract was
signed.
The Chairman. The labor contract was signed before the proxy
fight ended ?
Mr. Barr. Yes; approximately 3 weeks.
The Chairman. You say that you have no knowledge about the
stock that was owned or purchased by the teamsters union.
Mr. Barr. As a somewhat famous gentleman from the South once
stated, all I know is what I read in the newspapers. The news-
papers reported during the winter of 1954 and 1955 that the team-
sters union had purchased some stock or some representative of the
teamsters had made that statement to tlie press. However, as I
stated previously, there was no stock registered in the name of the
union, or any name that could be identified with the union.
Apparently, if they did own stock, it was held in a broker's name.
The Chairman. Did you inquire into that ?
Mr. Barr. We did not.
The Chairman. In view of the rumors or statements ?
Mr. Barr. No; w^e did not. The subject Avas never mentioned in
any conversation.
The Chairman. Would you be interested to know, in the course
of a proxy fight, whether someone had purchased a large block of
stock, $1 million worth?
Mr. Bark. Normally we would be very much intei-ested in that.
However, under the circumstances which existed, we felt that it would
be unwise to make any inquiries of any kind, because we were very*
actively in labor negotiations with the union, which w^as an arms-
length contractual negotiation.
The Chairman. You were then in the process of negotiating at
the time it was reported that they had bought this block of stock?
-57— pt. 7A 2
6a IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Bark. That is right, and we were in negotiations before that
report was first made.
The Chairman. Did the fact that that report came to your atten-
tion, that they had purchased this large block of stock, have some
influence on the negotiations ?
jSlr. Barr. It had none whatsoever.
The Chairman. You do not think it would be persuasive at all?
Mr. Barr. Not at all. The fact was that for the first time in the
corporation's history a union, the teamsters union here, had organized
the employees in all of our nine mail-order plants. We were faced
wdth a strike threat.
The union and the officials of the union had publicly amiounced
that a strike had been authorized, and that a strike was imminent.
We were in a labor negotiation in an attempt to avoid a strike, which
would have completely tied uj) the entire mail-order segment of our
business.
The Chairman. Were there any efforts prior to that time made by
the teamsters to organize the plants or how many efforts had been
made ?
Mr. Barr. The teamsters organized the first of our nine mail-
order plants in the late 1930's, 1938 or 1939. In 1940 they organized
tlie second plant; and late in the 1940's they organized the third plant.
The Chairman. That made 3 out of 9.
Mr. Barr. That made 3 out of 9. Beginning in the fall of 1953,
the teamsters union conducted a national organizing drive against
all of the plants and that drive was completed and they completed
the organization of all of the plants in the spring of 1955.
The Chairman. So at the time of this purported purchasing of
stock by the teamsters union, in the course of the proxy fight, there
was simultaneously a drive to organize all of the plants.
Mr. Barr. That is true, sir.
The Chairman. By the teamsters union.
Mr. Barr. That is right.
Senator Ives. May I ask a question there ? I am kind of rusty on
this proxy fight that you had at that time. How much stock was
outstanding in Montgomery Ward ?
Mr. Barr. Approximately 6I/2 million shares.
Senator Ives. Six and one-half million shares ?
Mr. Barr. Yes, sir.
Senator Ives. And how much was involved here? Is it 12,500 or
14,000?
Mr. Barr. The chairman so stated at the opening of the hearing,
that his staff in conversations with the union people had determined
that they owned 12,500 shares. That is all of the information I have.
Senator Ives. We had newspaper reports to the effect it was 14,000.
Do you happen to know which is true ?
Mr. Barr. No ; I do not.
Senator Ives. Now, I want to ask, by how much did Mr. Avery
wdn ?
Mr. Barr. Mv. Barnhill advises me the count was 4,100,000 for
Mr. Avery, and 1,700,000 against him.
Senator Ives. i*resumably the allegation would be tliat this team-
sters' stock was voted in favor of Mr. Avery.
IMPROPER ACTIVITIES IN THE LABOR FIELD 7a
Mr. Barr. As I sny, in the company's records there was no stock
registered in the name of tlie union.
Senator Ivus. I understand there is an allegation by Mr. Landa?
;Mr. Barr. Landa testified, and lie said he read that in the news-
papers.
Senator Ives. In otlier Avords, if the stock was voted for Mr. Avery
it was not even a drop in the bucket.
Mr. Barr. A small fraction of 100 percent.
Senator Ives. It did not have any effect on the election at all ?
Mr. Barr. None whatsoever.
Senator Ives. That is what I wanted to find out.
Senator Goldwater. It is about one-fifth of 1 percent.
Mr. Barr. That is true.
Senator Ivennedy. Mr. Barr, you say you only know what you
read in the newspapers and were you aware of the fact that the news-
papers were talking in January of that year, several months before
the contract was signed, that Mr. Hoffa and Mr. Beck might use these
proxies to vote one side or the otlier in order to encourage their union
control of the employees ?
AVere you aware that was in the paper?
Mr. Barr. I have no recollection of tliat, and it may well have
been, sir.
Senator Kexxedy. Now, in January, on January 27, 1955, it said :
Teamster Drive on Ward Plant ; Beck Denies Move Is Linked to Proxy Fight.
Now, you must have known that, and you had an interest in this
pi'oxy fight ; did you not ?
Mr. Barr. An'interest in the proxy fight '? Very much so ; yes, sir.
Senator Kennedy. You were directing it?
Mr. Barr. I was active in it.
Senator Kennedy. Obviously, you must have been aware of the
fact that there were some items in the newspapere about w^hat would
happen to this stock : were you not ?
Mr. Barr. I don't know". Senator, to wliat newspaper article you
referred.
Senator Kennedy. I am talking about the New York Times, Thurs-
day, Januar}^ 27, and I read the headline.
Mr. Barr" I have no recollection of seeing that particular article.
Senator Kennedy. Regardless of the quantity of the stock, were
you concerned about M'hich Avay it would be voted ?
Mr. Barr. This particular stock?
Senator Kennedy. Yes.
Mr. Barr. Not particuhirly ; we were in a vei^ active proxy fight,
and we were very actively soliciting proxies from our stockhoklers.
However, at one time I remember a conversation.
Mr. Nye's name was referred to here in some statement that was
made, and jMr. Nye is president of Jorganson & Co., an organization
in New York wliich is engaged in the business of soliciting proxies.
We engaged Jorganson & Co. in the fall of 1954 to Avork with us and
assist us in proxy soliciting. Sometime during the winter of 1954-55,
I recall Mr. Nye, in a conversation that I had with him, brought up
the fact that the newspapers had reported that the teamsters had
boiiofht a block of Ward stock.
8a IMPROPER ACTIVITIES IN THE LABOR FIELD
I remember that he mentioned tliat a ]VIr. Sharney, who was the
public-rehitions counsel for jMr. Wolfson in the proxy iig"ht, also had
some union clients. Mr. ^ye voiced the opinion that he felt that this
was probably stock that Sharney had been influential in the purchase i
of and it was probably intended for AA'olfson's support,
Nye asked me what, if anything, we would like for him to do with
regard to that stock. I told him ''Nothing; absolutely nothing,"
pointing out that we were in active negotiations with the imion over
a labor contract, a national labor contract, and we must avoid any
mingling of those two matters, and that if we made any effort to
solicit a proxy connected with the stock which it had been reported
the union owned, even if we did that in good faith, it might likely be
misconstrued, and we must avoid that.
To the best of my knowledge, Mr. Nye followed those instructions.
Senator Kennedy. Do you know if Mr. Nye had a conversation
with Mr. Landa ?
Mr. Barr. No : I do not Iniow. As I recall, I have a recollection
that Mr. Nye, I believe, mentioned to me one time that he had talked
to ]\Ir. Landa concerning another matter. I will tell you what the
other matter was if you like.
It was disassociated with this subject. It was that an organization,
I believe under the name of the Institute of Management, early in
1954 and before the beginning of the proxy fight had published a
paper or a pamphlet criticizing Mr. Avery's management of Mont-
gomery Ward.
That had been distributed and had some publicity around the
country. A question arose of what use Mr. Wolfson might attempt
to make of that brochure, which had been put out under the name of
the Institute of Management in the proxy fight.
It was reported that Mr. Landa had some connection, and the exact
nature of which I do not know, with the Institute of Management
and I remember Mr. Nye telling me that he had telephoned Mr.
Landa and talked to him about that.
I have no recollection of Mr, Nye ever mentioning to me that he
had talked to Mr, Landa with respect to the union or any stock
supposedly owned by the union.
Senator Kennedy. Now, in view of the fact that Mr. Nye's name
was brought into Mr. Landa's testimony, you must have discussed
this with Mr. Nye since then. Are you prepared to say that Mr.
Nye denies that Mr. Landa ever discussed how the Beck stock in
^Montgomery Ward would be voted ?
Mr. Barr. Well, in the first place I have not talked with Mr. Nye
since this current matter came up, and I have not seen Mr. Nye or
talked with him this year.
Senator Kennedy. It seems to me, Mr. Barr, that when you are
making a complete denial of this, which is your right, the whole
charge of Mr. Landa hinges around the fact that he had a conversa-
tion with Mr. Nye after talking with Mr. Beck and Mr. Nye stated
that he would pass the word on to the management and Mr. Nye
was your representative in the proxy figlit.
Mr. Barr. That is right ; and I have already attempted to tell you
about a conversation that I had with Mr. Nye during this period in
which I specifically instructed him that no effort was to be made
with regard to any stock reportedly owned by the teamsters union.
IMPROPER ACTIVITIES IN THE LABOR FIELD 9a
Senator Kennedy. Let me just try to pinpoint that.
Mr. Barr. That subject was specifically covered with Mr. Nye.
Senator Kennedy. Do you know whether he passed on the infor-
mation which he told Mr. Landa he would pass on, that Mr. Beck
mifflit be prepared to vote his stock with your group '?
Mr. Barr. I do not know whether he did or not. I have no recol-
lection that it was ever passed on to me. It might liave been. If it
was, it was dismissed as insignificant, and we had no interest in
that.
Senator Kennedy. As I understand it, you state that there was no
connection between the signing of this agreement and the voting of
the stock.
Mr. Barr. Absolutely none.
Senator Kennedy. Well, now, you have stated that all you know
is what appears in the paper and that surmise was in all of the papers.
That is when the agreement was made. It stated in the New York
Times on Friday, April 1 :
The Avery-Beck pact: In return Mr. Avery has been assured of union support
in his fight to hold control of his mail-order empire.
That story is in all of these papers that I have.
Mr. Barr. I do not know if the story was in all of the papers or not.
I do know that on the day the contract was signed, a reporter or repre-
sentative of some newspaper in my office asked the question, "What
connection does the signing of this contract have Mith the proxy
fight?"
I answered that directly that it had none and that any attempt to
link the two would be false. It was a direct denial of that on the
day the contract was signed.
All of the newspaper stories that I saw following that carried a
statement of mj^ denial of it.
Senator Kennedy. Now, in the .Vpril 1, New York Times, this is
a story from Chicago :
When Mr. Avery and Mr. Beck signed the memorandum, Mr. Beck said he
would urge trustees of funds within the teamsters' organization holding Ward
stock to vote for the present management at the stockholders' meeting.
In other words, Mr. Barr, we have jNIr. Landa's statement that he
ran into Mr. Beck on a plane, and that Mr. Beck stated it would be
a good idea if he conferred with Mr. Nye and ]\Ir. Nve was your
representative and he passed the worcl to Mr. Nye and Mr. Nye said
he would pass it on, and we have this signing of a contract by a com-
pany which had traditionally fought union representation in the
company, and then we have Mr. Beck's statement the day the agree-
ment was signed, stating that he would vote in your favor.
It seems to me that is a series of events from which someone can
draw a reasonable surmise that there was a connection, based on what
we read in the papers and based on the testimony before the com-
mittee.
Mr. Barr. It is understandable to me, Senator, h.ow one acting
honestly and in good faith could draw that surmise oi- that infei-ence.
That is because of what we might call the circumstantial evidence
which existed. The reason that I asked permission to appear here
today, and to attempt to lay the true facts before you, so tliat un-
warranted injury would not be done to this great American company,
is that the inference is false and it is unfounded.
10a IMPROPER ACTIVITIES IN THE LABOR FIELD
I appreciate the existence of these circumstances to which yon refer,
I wonld like only to add, in response to yonr statement, that please
keep in mind that Mr. Xye is not an employee or an officer of Mont-
gomery Ward.
He was an independent agent who was employed for a specific pur-
pose and one purpose only and that was to solicit proxies during this
proxy fight. Mr. Nye had no connection with the labor negotiations,
and he had no connection with JNIontgomery Ward in any respect
other than to call upon stockholders and solicit their proxies.
Mr. Nye was under specific instructions not to make any solicita-
tion of any stock which it had been reported was under the control or
was owned by the teamsters union.
Senator Kennedy. Now, I have just one more question. It seems
to me if you had been anxious to avoid this inference, it would have
been wise not to have the intimate pictures taken with Mr. Avery and
Mr. Beck signing this agreement.
It seems to me that you benefited from the psychological impact of
these statements going around the country, saying that the teamsters
had moved in to ^Montgomery Ward and Mr. Beck's statement that
they were going to support Mr. Avery and Mr. Avery and Mr. Beck
in intimate pose 3 weeks before the votes were counted in the proxy
fight.
Now, 2 years later, after victory has been won, there is an attempt
to disassociate yourselves completely. It seems to me it would have
been much easier or this could have been avoided if this thing had
been handled with less splash at the time.
Mr. Barr. In the first place, I had no more control over the pic-
tures that were taken that day than I have over the pictures that are
taken here in this room this morning.
The signing of a labor contract between Montgomery Ward and the
teamsters union was considered by the press as a newsworthy event in
its own right, disassociated from" any proxy fight situation, although
that did in fact exist.
The National Labor Relations Act does not excuse the parties from
their obligations to bargain in good faith and attempt to reach an
agreement with the union merely because a proxv fight may be there.
We were under an obligation to negotiate wi'th the union at this
tmie and attempt to reach an agreement and, of course, we had a
personal interest in doing so to avoid a strike which had been threat-
ened and which appeared to us to be imminent.
Senator Kennedy. That is all.
The Chairman. Senator Mundt.
Senator Mundt. Thank you, Mr. Chairman.
Yon had your conversations with Mr. Nve, and was that before or
after Mr. Nye had had his conversations with Mr. Landa ?
Air. BvRR. I don-t know. I had mv conversation with Mr. Nye
durmg the winter of 1954-55 soon after it was reported in the news-
papers that the union had purchased some Ward stock. I do not
know when Mr. Nye may have talked to Mr. Landa about this, if he
did.
Senator Mundt. Putting it the other way, then, at least you had no
knowledge at any time that Mr. Landa had talked to Mr. Nye : is that
right ?
Mr. Barr. That is right.
IMPROPER ACTIVITIES IN THE LABOR FIELD 11a
Senator Mundt. So that if he had talked with him before that, he
did not tell yon abont it and if he talked to you after that he Avould
liave no occasion to.
Mr. Barr. I am sure that he had not talked with him before that or
he would have mentioned it.
As I said before, I have no recollection that he ever mentioned it
and if he did afterward, and he may have, it was of no significance,
and certainly did not stick in my memory.
Senator Mundt. The thing tliat mystifies me about why there should
be any particular significance about all of this or the stories in the
New York Times or any of the rest of it, is that if you are sure in your
figures and only 12,500 or 14,000 shares were owned by the teamsters
out of some 4 million, and y^ou won the election approximately 3 to 1,
I do not see how it makes much difference how that particular block
of stock was voted.
Mr. Barr. It was not significant.
Senator Mundt. I do not see how you hold up any theory on a
little block of 14,000 shares out of 4 million shares. It was not a close
election and if it had been decided by 10,000 or 12,000, I would say a
suspicious doubt may flow from this sequence of events.
But it seems to me the whole thesis falls on its face because of the
small block of stock. I would like to ask you this : You said you did
not know or I think you said you did not know that the teamsters
owned 12,000 or 14,000 shares, but you got it out of the newspapers.
Mr. Barr. That is true.
(At this point, Senator McNamara entered the hearing room.)
Senator Mundt. You were out actively soliciting stock; were you
not?
Mr. Barr. Yes ; we were.
Senator Mundt. And proxies ?
Mr. Barr. Yes, sir.
Senator Mundt. There had to be some record books some place.
Mr. Barr. Yes, sir.
Senator Mundt. Whose name did this show up in ?
Mr. Barr. I don't know. As I stated before, there was not at the
time of the meeting or at any time before tlie meeting, any stock
registered in the name of the union or in any name which we could
identify with the union.
There was a report at that time that the stock was held in the
name of Goodbody & Co., which I believe is a brokerage house in
New York. That is what they refer to as a "street name" I believe.
Senator Mundt. I have been curious for some time, Mr. Barr,
about these various proxy fights and what has been referred to as
pirating of American corporations, and about the fact that ap-
parently, it is very hard to trace down the ownership of American
corporations by looking at the stock-record book.
Is there developing a concept of hidden ownership to a certain ex-
tent in American corporations wliich I think either is bad or could
lead to very evil consequences 'i
I think people probably have a right to know who owns the cor-
poration and who owns the stock, especially when it gets involved in
proxy fights wlierein innocent stockholders far away from the columns
of the New York Times might not be acquainted Avith everything
that is happening.
12a IMPROPER ACTIVITIES IN THE LABOR FIELD
I would just like to have your observation as a man high up in the
American corporate structure as to whether or not you think or you
have any concern or worry or curiosity about that, or whether there
is any danger if we expand the practice of hidden ownership of
American corporations.
It has nothing to do with this particular thing here, and I am just
seeking counsel as a comitry boy from someone who has had ex-
perience.
Mr. Barr. Probably it would appear to be of not much consequence
in the normal ordinary course of things, but it does become quite im-
portant when there is a contest for control of a corporation. It seems
to me that in that event, or in any case where a question is raised over
the control or management of a corporation, that all of the stock-
holders have a right to know who it is that is opposing their interests
on either side, and it does not make any difference whether it is the
"ins" or "outs."
I testified on that subject 2 years ago before the Senate Banking
and Currency Committee and at that time expressed my opinion that
there should be full disclosure of beneficial ownership in the event
of any proxy contests. That is still my opinion.
Senator MuNDT. I am glad to have that. I know that it arises
of great significance when talking about banking institutions, and it
has greater significance, I suppose, in life insurance, or fire insurance
companies, and I think it has a certain degree of significance in all
corporations, especially if it is as bad as some of my colleagues feel
it is, and maybe it is, to have labor organizations owning corpora-
tions with which they do business, or labor organizations having
tremendous millions of dollars at their disposal.
If there is no disclosure we might well have labor organizations
owning corporations and making contracts witli themselves and doing
business with themselves. I do not know enough about that to knov>-
how serious that would be, but I do think that the Securities and
Exchange Commission or perhaps the committees of Congress should
analyze this thing pretty carefully.
I have a feeling that this hidden ownership of business is getting
more and more significant. I know tliat a lot of stock is owned now
beneficially by brokers and others and somehow or other it seems that
a doctrine of full disclosure in American corporate ownership could
not do any harm and it might do a lot of good.
I am glad to have you support that theory.
Mr. Barr. It would be my opinion that it would be in the public
interest for the Congress to give that subject sincere attention.
Senator Mundt. That is especially true of the last 10 years because,
and I am glad this is taking place, stockoAvnership is spreading out
across the country in the hands of a lot of people wlio normally and
customarily did not own American corporate stock.
All corporations encourage that, and I think that is good. I tliink
it is right that people should own a piece of America and the way
to do that easily is to own some stock in a good American corporation.
The people Avho buy a piece of America have a right to know who
their partners are, and who the otlier people are who own tlie com-
pany and I defy them to find out by looking at the average stock
records, or looking at the average annual report today, who in the
world it is who owns and controls the corporations.
IMPROPER ACTR^ITIES IN THE LABOR FIELD 13a
That is important -when you have matters of this kind and when
you have discussions that we liad a little earlier about Freuhauf and
about some outfit up in Canada, as to who owns it, and whether the
union owns it or not.
Whether it is Avise or unwise I am not prepared to say at this time
for tlie unions to own corporations' stocks with which they do
business.
At least if you have the doctrine of full disclosure in operation we
are not Hying blind.
I think that we are fiying a little bit blind in American corporate
structure and I do hope that the appropriate committees of Congress,
if this is not it, or the Securities and Exchange Commission, will de-
vote themselves to what I think is a growing cancerous condition
in our American corporate structure.
Senator McNamaka. Mr. Chairman, I am interested in the men-
tioning of the Institute of Management. Is it an association of
managers ?
Mr. Barr. I do not know. I am acquainted only with the name. I
do not know its nature.
Senator INIcXamara. Is your company a member of the institute?
Mr. Barr. No ; we have no connection with it whatsoever.
Senator McNamaRx\. You do not use their services ?
Mr. Barr. No, sir ; and we never have.
Senator McNamara. In what regard did you bring the name of
the Institute of Management to the conversation ?
Mr. Barr. In the summer of 1954 there was brought to my atten-
tion a pamphlet which had been published under the name of the
Institute of Management and which was critical of Montgomery
Ward's management. That is the only thing I believe that I have
ever seen their name associated with.
Senator McNamara. Do you remember whether or not the name of
Nathan Shefferman was connected with this Institute of Manage-
ment ?
Mr. Barr. No ; I do not know. I never heard or it was never men-
tioned to me that Mr. Shefferman was connected with it and I don't
know whether he was or not.
Senator McNamara. Do you know Mr. Shefferman ?
Mr. Barr. No ; I have never met him.
Senator McNamara. He does not handle your work ?
Mr. Barr. He never has.
Senator McNamara. And he is in no way associated Avith you?
Mr. Barr. In no way whatsoever.
The Chairman. Chief Assistant Counsel, Mr. Adlerman, do you
have any questions ?
Mr. ADLER:\tAN. I would like to ask Mr. Barr a question to bring
him back to his statement on page 4, in paragraph 4, in which he
states that —
No employees of Ward's should or, as far as I know, have joined any union
under the mistaken belief that the company demands, expects, or desires its
employees to do so.
Mr. Barr. Yes, sir.
Mr. Adlerman. I would like to draw your attention to certain con-
tracts which you were kind enough to supply to the committee at
14a IMPROPER ACTIVITIES IN THE LABOR FIELD
our request, and these various agreements that were entered into be-
tween the union and Mont2:omerv Ward Co.
For example, this one in Oakland, Calif. I draw your attention
to the union-securlt^ clause in that contract. Are vou^ familiar wnth
that?
Mr. Barr. Yes ; I am. "Wliat date is this contract ?
Mr. Adlermajs^ It has no date on it. Tlie letter that vou supplied
attached to the proposed contract was March 1, 1955.
Mr. Barr. Yes ; all right.
The Chairman. Let the witness examine the document and see if
he identifies it.
(A document was handed to the witness.)
Mr. Barr. I have examined the exhibit, Mr. Chairman. The ex-
hibit is a proposal for a contract which was submitted by the union,
and it is not a contract which Montgomerv Ward entered into at any
time.
The CirAiRMAN. This contract was never entered into I
Mr. Barr. It is not a contract. It is a proposal whicli was sub-
mitted by the union during the course of negotiations.
Mr. Adlermax. Now, you say tliat was not accepted and not
adopted ?
Mr. Barr. That is right.
Mr. Adlermax. You had a series of other contracts, also: is that
correct ?
Mr. Barr. A series of other contracts ?
Mr. .'Vdlerman. Yes ; I mean some contracts were entered into with
Montgomery Ward and was there one master contract ?
Mr. Barr. On March 31 we entered into one master contract
. The Chairman. That is 1955?
Mr. Barr. Yes, sir.
Now, these negotiations you understand had been actively in prog-
ress for approximately a year and a half and during the' course of
that tmie many proposals were passed back and forth and we would
make proposals to the union and they would make proposals to us,
and the document that you have handed me is one of tlieir proposals
during the course of the negotiations.
Mr. Adlerman. Could you advise me wliether this is the standard
contract that was signed at that time ?
Mr. Barr. I would be happy to.
The Chairman. This appears to be a carbon copv of what counsel
suggests may have been the standard contract signed at that time.
(A document was handed to tlie witness.)
Mr. Barr. Well, that is another union proposal. If vou are look-
ing for the contract we signed, we will furnish you with a copy of
it, and we have another copy of it here if that would help you.
The Chairman. Again, the document vou liave just examined was
not one entered into, but another that Avas submitted as a proposal?
]\rr. Barr. That is correct, sir.
The Chairman. Thank you.
Mr. Barr. I have in my hand a true copy of the contract we did
enter into, if that would be of help to you.
Tlie Crr.MRMAN. May we see that?
Mr. Barr. Yes, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 15a
(A document ayrs handed to the chairman.)
Mr. Adleioian. You have a vinion-security chmse in that contract?
Mr. Barr. We liave Avhat is commonly referred to as a maintenance-
of-membership provision. At the time we signed the contract this
Avas a provision under which, in the first place, no employees who
were not members of the union were required to join.
The employees who already were members were given a 2-week
period following the signing of the contract, under which they could
resign if they desired to. The employees who remained members after
the end of the 2-week "escape period" as it is commonly called, were
then required to maintain their membership in the union for the year
that the contract was in force.
The Chairmax. Mr. Barr, do ^^ou have extra copies of that ? If you
say this is the contract that was entered into or a copy of it, the Chair
would like to make it an exhibit for reference.
Mr. Barr. Very well, sir.
The Chairmax. That will be made exhibit 218, just for reference
only, so that it will be official in the record.
(The document referred to was marked "Exhibit No. 218" for refer-
ence and may be found in the files of the select committee.)
Mr. Barr. Very well.
The Chairman. Let the Chair ask one other question for clarifica-
tion of my own mind. Under the terms of this contract that you
entered into, was a union shop established ?
Mr. Barr. No, sir. It was what is referred to as a maintenance-of-
membership condition and not a union shop.
The Chairmax. It was not a union shop. In other words, those
that were then membei's of the union, as I understand you, were given
2 weeks if they wanted to get out of the union, and they could retire
from the union within 2 weeks' time.
Mr. Barr. That is right.
The Chairmax. Those who did not do so, and continued in the
union, then they had the obligation for maintenance of union member-
ship 'i
Mr. Barr. That is right, sir.
The Chairmax. That is correct ; is it ?
Mr. Barr. That's right.
The Chairmax. I was trying to get it clear.
Senator Muxdt. And if they elected to withdraw from the union,
it had no impact on their employment status with Ward's?
Mr. Barr. No; whether they dropped or whether they didn't,
whether the}^ joined or whether they didn't had no efl'ect whatsoever
upon their employment status with Ward's.
Senator Muxdt. They were not subjected by the contract to any
checkoff ?
Mr. Barr. Yes; the contract provided with respect to those who
remained in the union, that their dues would be checked off'.
Senator Muxdt. They could sav, "Check me off" or "Don't check
me off?"
Mr. Barii. I would like to correct that statement.
Mr. Barnhill informs me that that came a year later. In the 1955
conti-act there was not a checkoff. But in 195G that union demand was
granted in subsequent negotiations.
16a IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. As a consequence of that contract, did all of the
employees of Ward's join the union or did you have some union and
some nonunion ?
Mr. Barr. We continued to have some union and some nonunion
employees. There were certainly no more employees joined the union
after the signing of this contract. In fact, I recall that I believe the
first National Labor Relations Board election that was held with the
teamsters union by the Labor Board, following the signing of this
contract, a majority of the employees voted against the union.
There have been a number of National Labor Relations Board elec-
tions held during the past 2 years involving Montgomery Ward stores,
and warehouses, and in some of which the employees have voted in
favor of the teamsters union and in some of which the employees
have voted, the majority of them, against the teamsters union.
Senator Mundt. Does it follow then that after every election, where
a majority of the employees voted against the union, that you have
deunionized for a year and then they joined the union again?
Mr. Barr. There is no deunionization. They just never are union-
ized.
Senator Muxdt. After they had been unionized, and they held an
election and voted against it, did that happen ?
Mr. Barr. No; not where they had been unionized. These are
new stores or new warehouses which the union is attempting to
organize.
In each case before we recognize or deal with the union, we only
do that in cases where the National Labor Relations Board holds an
election and certifies that a majority of the employees have voted for
the union.
Senator JNIixdt. There have been no cases where they held an elec-
tion and deunionized ^
Mr. Barr. 1 believe not, so far as the teamsters union is concerned.
Senator McNamara. Wliile you are on this subject, of the escape
clause, I think this is the first time it has been brought before the
committee and so we are all somewhat interested in it.
You indicated that this "escape clause" was put into a subsequent
contract and not one where you originally signed up with the union?
Mr. Barr. Oh, yes; it was in this 1955 contract.
Senator McNamara. In the original contract ?
Mr. Barr. Yes, sir.
Senator McNamara. And it was repeated in subsequent contracts ?
Mr. Barr. Yes : it was repeated in last year's contract and the fol-
lowing year's contract.
Senator McNamara. Did the "escape clause" come up again at the
signing of a new contract ?
Mr. Barr. Yes, sir.
Senator McNamara. Then your employees have opportunities
every time you sign a new contract to take advantage of that escape ?
Mr. Barr, They have had up to this time. That is, as I am sure
the Senator can well appreciate, repeatedly a subject of negotiations.
In pratically every negotiation we have with the union we do that.
But in the contract that was signed in 1955 and in the contract which
was signed tlie following year there was an escape provision.
IMPROPER ACTIVITIES IN THE LABOR FIELD 17a
Senator McNamara. Do you have any knowledge or any recol-
lection of how many employees took advantage, if that is the term
you want to use, of the escape clause ?
Mr. Barr, I don't know how many did.
Senator McNamara. I think that would be a very interesting thing
to develop, the experience in this field of escape clauses, Mr. Chair-
man, and I do not think that there is very much in our records about
that.
The Chairman. It would be all right. Would it be convenient for
you at an early date to supply the number of those who took ad-
vantage of this escape clause ?
Mr. Barr. It would not. Senator, and my respectful suggestion
would be that if you desire to develop that information, that you
should do that with the union, because the resignation of an em-
ployee from the union is a matter between the employee and the
union and the company does not have any direct knowledge, and
generally no knowledge whatsoever of that.
The Chairman. You have no record of that ?
Mr. Barr. No. That is a matter between the employee and the
union and you would have to get that information from the union.
The Chairman. You can say possibly some did withdraw?
Mr. Barr. They may have, but the only thing we would know
would be if some employee might come to his supervisor and say that
he had resigned from the union or something, which might or might
not be true.
The only way you could get authentic information on that would
be from the unions.
Senator McNamara. It appears that there is a checkoff involved
in the current contract.
Mr. Barr. There is in the current contract, yes, sir.
Senator McNamara. If a man was paying dues one month and took
advantage of the escape clause, you would not withhold his dues the
next month ; is that right ?
Mr. Barr. We would get a notice from the union that that em-
ployee resigned.
Senator McNamara. Your records would reflect it ?
Mr. Barr. But probably all of the members of the union are not
on the checkoff and it is not compulsory on all union members and
the individual employees authorize their dues to be checked off.
Presumably, there are some employees who pay dues directly to
the union, you see, and so even that record would not be complete.
Senator McNamara. It would be helpful, because we have nothing
in this field. It would be helpful to us.
Mr. Barr. Well, we would be glad to give you anything from our
records that would be helpful. I would merely call your attention to
the fact it would be an incomplete report.
Senator McNamara. If you charged it one month and he still con-
tinued to be an employee, and in December you withheld his dues and
in Januai-y you didn't, then the record would pretty well reflect that
he, still being employed, took advantage of the escape clause.
Mr. Barr. We have never developed any statistics of that kind.
Could that be developed from our records, Mr. Barnhill ?
18a IMPROPER ACTIVITIES IN THE LABOR FIELD
There is a turnover of people and there might be other reasons.
We would be happy to give you anything we can get from those rec-
ords, but I question whether it would be helpful to you.
Senator Ivennedt. Now, Mr. Barr, can you fill me in a little on
the details of the way this proxy stock is voted. What dates are the
proxies mailed in? Are they mailed in from January up to April
Mr. Bare. No. First the mechanics of it are that at sometime be-
fore the date of the annual meeting, and in this particular instance I
believe it was approximately 40 days before the meeting, the date of
the meetmg was April 22, so in the first part of March sometime, the
company under the rules of the Securities and Exchange Commis-
sion mails to all stockholders of record a proxy statement and in-
cluded with that proxy statement is a form of proxy.
So the first proxies would have been mailed in beginning around
the middle of March.
Senator Kennedy. Then they would continue right up until the
day of the meeting.
Mr. Barr. Yes, sir.
Senator Kjdnnedt. Do you have any chart at the company as to
how those proxies are being voted as they come in, or are they not
opened until the meeting?
Mr. Barr. Oh, yes. The ones sent to the management are opened
and a record is made of it immediately upon receipt.
Senator I^nnedt. As of the date that this union contract was
signed, did you have a record as to your vote ?
Mr. Barr. We would have had.
Senator Kennedy. Have you any figures on that, and had vou won
by then? ' ^
Mr. Bare. Well, no, we had not won by then. You see, in a situa-
tion where there was a contest of that nature, it is impossible either
for us or for the other side, so to speak, to tell from the proxies which
have been received where you stand ; because a very substantial number
of proxies are revoked.
At the time of the annual meeting, it is the latest dated proxv which
counts, and there were instances which were brought to my attention
where some stockholders would sign as many as 11 different proxies.
Apparently, every time the management would mail them a proxy,
they would sign it and send it back and every time Mr. Wolfson would
send a proxy, they would sign it and send it back.
The Chairman. It was the last person who talked to them who re-
ceived the benefit of the proxy ?
Senator Kennedy. I read the New York Times, and that reflects
other stones, and I have Business Week here of April 9, and this was
a great fight and everybody was interested in it.
The headline is, "Ready for the rollcall at Ward's." And it says
up at the top :
Wolfson still talks about sure victory, but he is bitter about action of—
and til en underneath is a picture of Dave Beck-
Beck and the teamsters union declaring their support of their new pal. Avery,
Montgomery Ward chairman, who says he made no proxy deal with the teamsters
in connection with Ward presently making contract with the imion.
EVIPROPER ACTIVITIES IN THE LABOR FIELD 19a
Then, on the next page of this Business Week story it says :
Hoffa had said that the teamsters own about $1,050,000 worth of Ward stock,
about 13,500 shares. , ^ . ■, .,
He has been heard to say that the union influences through friends the votes
of anotiier 100,000 shares. In Wolfson's camp the tirst reaction to Beck's state-
ment was gloomy. "If the union does control 100,000 shares," said a Wolfson
lieutenant, "at this stage it would hurt us bad."
Now, Mr. Barr, I do not think that there is any doubt that this sign-
ing of this contract and this public announcement by Mr. Beck, was
of great assistance to you in this fight, regardless of how many shares
he actually owned, for two reasons :
First, because you did not know how close the fight would be, and
secondly, the psychological value of this sort of publicity in many of
the leading papers and magazines of the country indicated gloom m
Wolfson's camp and joy in the Avery camp, about this support you
were getting from the teamsters and was of great assistance to you.
Is that not a fact?
Mr. Barr. I think that is a matter of judgment and your judgment
may well be correct in that regard. If it is, and if that is true, that
publicity of this type was helpful to tlie management's camp, as you
say, it was merely and wholly incidental.
Senator Kennedy. Nevertheless, you are being completely frank
with the committee and you want us to be frank with you and I do not
think that you can help but feel this was a benefit.
That is a statement of fact.
Mr. Barr. If it was beneficial, it was incidentally, and it was not to
any extent.
Senator Kennedy. Was it beneficial ?
Mr. Barr. It was not even a scintilla of motivating influence in enter-
ing into the agreement. That is the point.
Senator Kennedy. I understand.
Mr. Barr. If any benefits incidentally flowed from it, as in your
judgment they did, and as they may have
Senator Kennedy. Would you give me your judgment?
You must have been very concerned about this. Was this very help-
ful to you?
Mr. Barr. I think it was of very little significance of inconsequential
significance one way or the other. That is my opinion. I do not think
it either hurt us or helped us in any significant degree.
Senator Kennedy. This Business Week story says :
This week Avery agreed that Beck's words had been timely.
That was Beck's word that they were going to vote the stock with
you. What do you mean by "timely" ?
Mr. Barr. I wouldn't know.
Senator Kennedy. You would not draw any conclusions of what he
meant that it was helpful ?
Mr. Barr. If it was helpful, I think it was in a slight degree, but
that is a pretty conjectural field, I would say.
Senator Kennedy. Now, he referred to Mr. Hoffa and —
Mr. Avery said he never met him, but he is a nice fellow, speaking about
Hoffa.
20a IMPROPER ACTIVITIES IN THE LABOR FIELD
I do not think that there is any doubt, at least in my judgment, that
this was of substantial assistance to you. I just do not see how you
come to any other conclusion. I am not suggesting that you signed
because of that reason. I am only suggesting that in view of Mr.
Landa's statement, Mr. Beck said he was going to vote the other way.
and in view of Mr. Landa's call to Mr. Nye and Mr. Nye's statement
that he would pass it on, and in view of the fact that he signed
with you and in view of the fact Mr. Avery said the assistance was
"timely", it is difficult for me to disassociate the signing of the contract
with the proxy fight, to be honest with you.
The Chairman. Mr. Counsel, do you have any further questions ?
Mr. Adlerman. I would like to go on for a moment on this.
Speaking about the Busines Week article, there is a statement which
states :
The contract includes a standard maintenance of membership section in force
on June 1, 1956. Avery's refusal to accept a similar requirement of a union
contract 11 years ago brought on a showdown in which the Army seized the
company on a war Labor Board order, on May 6, 1944.
This was a subject which had caused great controversy between the
union and the company for many years, the question of whether
or not they should have a maintenance of membership clause ; is that
correct ?
Mr. Bakr. It had been a point of controversy for m^any years
between Montgomery Ward and the union as to whether there should
be a union-shop condition in Ward's plants and in maintenance of
membership, but for a union shop and the maintenance of membership
was a compromise of that issue.
Mr. Adlerman. The clause that you have in your contract and I will
read it under article 2, says :
Each employee covered by this agreement is free to join the union or not to
join the union as he wishes. All employees 15 days after April 5, 1955, namely
April 20, 1955, are members of the union, and all employees who thereafter
become members of the union shall for the duration of this contract, as a condi-
tion of employment, pay to the union dues and initiation fees uniformly re-
quired by the union as a condition of requiring maintenance of membership.
The union shall notify the company and the employee involved in writing
in the case of a failure to pay such dues or fees and the employee shall have
seven days after date of mailing of such notice to pay any dues or fees which
may be owing to the union. - .
Now, is that a standard maintenance of membership clause?
Mr. Barr. In substance, yes. The exact wording like this did not
require them to maintain their membership, as I recall. It required
them to pay the noi-mal dues, but in substance, it is a standard mainte-
nance-of-membership clause.
Mr. Adlerman. Was this a subject that had been in controversy
for many years between the union and Montgomery Ward ?
Mr. Barr. The subject of compulsory union membership was a sub-
ject which had been in controversy for many years ; yes, sir.
Mr. Adlerman. And do you have any reason or any explanation as
to why the union and the company got together on this clause at this
particular time, 3 weeks before the proxy vote ?
Mr. Bare. Yes ; I do, very clearly.
Mr. Adlerman. Would you state that?
Mr. Barr. Yes ; if I could have that memorandum that I wrote at
the time.
IJVIPROPER ACTIVITIES IN THE LABOR FIELD 21a
This was the first time, as I attempted to state earlier, that any
union had organized Montgomery Ward plants on a national scale
For the first time in our experience we were faced with a strike threat
on a national scale and a strike threat which threatened to tie up all
of our plants across the country. , • , ^i
That was the situation which was new, and which the company
had never faced before in these prior years of controversy that you
refer to. It was my opinion at the time that a compromise of the
union-shop issue was necessary to avoid a strike.
I have before me, which we have pulled out of our files, a report
dated March 10, approximately 2 weeks before this contract was
sicrned, and as the negotiations were reaching their peak, so to speak,
a 'report to Mr. Avery and which was also used as a report to the
board of director who decided this matter and decided what we would
do, and what we would not. .i..uii-pi--f
Mr Chairman, to supplement my answer it might be lielptul it
the committee had this memorandum, which I prepared at the time
and on the basis of which this settlement was worked out, before you.
The Chairmax. The memorandum will be made exhibit JNo. 2iy
for reference and you mav refer to it if you wish to comment on it.
(The document referred to was marked "Exhibit No. 219 lor ref-
erence and may be found in the files of the select committee.)
Mr. Barr. No; the substance of it— and I submit the full memo-
randum for the committee's perusal, as I just stated, is that my opinion
was that we were faced with a strike and that a compromise ot this
issue was necessary if we were to avoid it.
The Chairman.' Wliat is the date of the memo ?
Mr. Barr. March 10, 1955. ., j=. 9
The Chairman. The contract was signed how soon thereafter?
Mr. Barr. The contract was signed on March 31, approximately 6
weelcs after my report to the chief executive officer and the board
of directors on the status of the union negotiations.
" The Chairman. I am not familiar with these contracts, but it occurs
to me that this contract was somewhat favorable to you from the
standpoint of the big issue in controversy of a union shop.
'As I 'understand you, anyone who was working there continued
working, and never \vas coinpelled to join the union.
Mr. Barr. That is true.
The Chairman. Those who were already members ot the union
had 15 days to determine whether they wanted to continue m the
union or if they wanted to withdraw from it.
Mr. Barr. that is right.
The Chairman. And as I understand you, they^ could withdraw
from the union if they desired to, without losing their jobs.
Mr. Barr. That is true.
The Chairman. They could continue on in employment.
Mr. Barr. That is right, sir.
Mr. Adlerman. Mr. Barr, I believe that you testified m 1955 before
the Senate Committee on Banking and Currency, on the stock-market
study that w^as a study of proxy fights.
Mr. Barr. I did.
Mr. Adlerman. At that time, I believe Mr. Louis Wolfson also
testified.
22a IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Bakr. T believe he did. I was not present when he testified,
but I understand that he did.
Mr. Adlerman. I am just wondering whether or not I could get you
to be in agreement with Mr. Wolf son on a statement that he has made,
and I would like to read this statement and ask you whether you agree
with it in principle.
Mr. Bark. Very good.
Mr. Adleriman. He issued a statement to the committee and I will
just read the one clause which is pertinent :
C. Union ownership of shares: With the tremendous union funds available
today for investment, a union could acquire stock of a corporation with which
it has or seelis a labor contract. This stock could represent the balance of power
and thus become a bargaining; instrument.
Obviously, the union could use this stock to barter its proxies in exchange
for unduly favorable terms from either contestant. The possibility of such a
situation should be eliminated because no labor contract entered into under
these circumstances can be to the best interest of the corporation or, in the
long run, to the union itself.
The Chairman. That is in line with what Senator Mundt was dis-
cussing a while ago, as I recall. That is Mr. Wolf son's statement of
his viewpoint, and the question is, do you agree with Mr. Wolf son?
Mr. Barr. I agree with Mr. Wolfson's statement completely. The
circumstance presents a very real danger. The point I would hope
to establish this morning. Senator, is that did not happen in the Mont-
gomery Ward case.
The Chairman. Are there any further questions ?
Mr. Adlerman. I have no further questions.
Senator Mundt. I would simply like to say, Mr. Chairman, that
it is very obvious that there is one great difference between the repre-
sentatives of the union and Mr. Barr, and that is their willingness
to answer questions forthrightly and directly.
The Chairman. If there are no further questions, we thank you
for your presentation, Mr. Barr.
The committee will be in recess until 2 o'clock to meet in the Caucus
Room, 381, and at that time we will resume hearings in the Bakery
and Confectionery Union matter.
(Whereupon, at 12 noon, the hearing in the above-entitled matter
was recessed, to reconvene at 2 p. m. of the same day.)
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