i
* c^pimauui^
Given By
E R ^JPT. OF nOCUME!Sf!SI
]00'
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
HEARINGS
BEFORE THE
SELECT COMMITTEE
ON IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT EIELD
EIGHTY-SIXTH CONGRESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 44, 86TH CONGRESS
JUNE 2, 3, 4, 8, 9, 10, AND 11,
PART 53
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 IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
EIGHTY-SIXTH CONGRESS
FIRST SESSION
PURSUANT TO SENATE RESOLUTION 44, 86TH CONGRESS
JUNE 2, 3, 4, 8, 9, 10, AND 11, 1959
PART 53
Printed for the use of the Select Committee on Improper Activities in the
Labor or Management Field
UNITED STATES
<^JOVERNMENT PRINTING OFFICE
WASHINGTON : 1959
SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABOR OR
MANAGEMENT FIELD
JOHN L. McCLELLAN, Arkansas, Chairman
KARL E. MUNDT, South Dakota, Vice Chairman
JOHN F. KENNEDY, Massachusetts BARRY GOLDWATER, Arizona
SAM J. ERVIN, Jr., North Carolina CARL T. CURTIS, Nebraska
FRANK CHURCH, Idaho HOMER E. CAPEHART, Indiana
RoRERT F. Kennedy, Chief Counsel
Ruth Young Watt, Chief Clerk
Boston Public Library,
Superintendent of Documents
SEP 2 8 1959
DEEQSIIORY.
CONTENTS
Jukebox and Pinball Operations in Lake County, Ind., and Vicinity
Fas*
Appendix 18781
Testimony of —
Aliotta, Frank 18772, 18775
Anderson, Harold.. 18556, 18557
Blankenford, Paul 18759
Conroy, Walter D 18586
Doerfer, John C 18549
Duffy, LaVern J 18450, 18461, 18502, 18506, 18515, 18522, 18541, 18637,
18654, 18656, 18666, 18671, 18686, 18755, 18767
Formusa, John 18681
Giancana, Sam 18672
Gogola, Walter J., Jr 18556, 18557
Goot, Herman 185 18
Gotsch, Gerald G. 18774
Graven, Charles 18529
Gruttadauro, Anthony 18744
Hagler, Margaret ..- 18467, 18557
Heisler, Frank J 18762
Hineline, Lester 18509
Holovachka, Metro M 18604, 18613, 18615, 18662, 18663, 18667
Kampo, Michael J., Jr 18567
Kotlarz, Pauline 18522
LaRocca, John Sebastian 18727, 18730, 18734
Mannarino, Gabriel Kelly 18727
Matuska, Edward 18532
McShane, James J. P 136:»o
Morgano, Thomas.. 18491, 18499, 18507
Mundie, James F ]-.->6:)l
Peters, Ted 13659, 18i60
Pinelli, Anthony 18691, 18701, 18702, 18704, 18707, LS724
Plunkett, William 18511
Pohl, Matt lo535
Powers, John 18653, 18655
Ravder, Harold E 18498
Rizzo, Frank 18657
Rvder, Edward S 18485, 18556, 18557, 18692
Salinger, Pierre E. G.. 18673, 18692, 18697, 18701, 18702, 18726, 1872J, 18731
Schaefer, Rowland 18646
SchiraUi, Peter M 18753
Schultz, Carl M 18774
Sinclair, Richard G 18492, 18505, 18513, 18525, 18543, 18611, 18615,
18660, 18666, 18683
Smaluk, Nicholas 18527
Smith, Donald 18704, 18707, 18708
Smith, Frank J 18633
Sohacki, Steven D 18539, 18542, 18545
Steele, Albert 18478
Testo, John 18428
Thiede, John T 18461, 18662
Unetich, Frank 18704, 18707, 18708
Verplank, Cornehus, Jr 18560
Welbourn, George W 18539, 18542, 18545
Williams, John D 18637
Witecki, Frank 18453
Zeis, Harold S 18759
Zizzo, F'rank 18686
rV CONTENTS
EXHIBITS
Introduced Appear
on page on page
1. Resolution submitted to Gov. George N. Graig, of In-
diana, signed by five Lake County jukebox operators. 18458 (*)
2. Schedule showing total value of buildings and land of
St. George Realty Co. leased to the U.S. Government. 18466 (*)
3. Identification of people and of places named in telephone
conversations, tape recordings of which were played
at the hearing 18492 (*)
4. Invoice made out to Pete Chronowski by Ferree Storage
& Van Co. showing $47.29 paid for picking up pinball
machines at five locations 18527 (*)
5. Affidavit of Jack Ferree, of the Ferree Moving & Storage
Co 18527 (*)
6. Pamphlet "The Microphone Speaks," a report submitted
to the voters of Lake County, Ind., by the Gary Crime
Commission in 1949 18542 (*)
7A. Bankbook of Walter D. and Cora B. Conroy, East Chi-
cago Federal Savings & Loan Association, East Chi-
cago, Ind 18601 (*)
7B. Savings account book of Walter and Cora Conroy, First
Federal Savings & Loan Association of East Chicago. 18601 (*)
8. Summary of cash transactions of Metro M. Holovachka
for the years 1951-58 18615 (*)
9. Compilation of purchases from H. Horwitz Co. by Lake-
side Sales, charged to "Sales promotion" 18643 (*)
10. Application for charter, dated June 22, 1953, bearing
the signature of Rowland Schaefer, general secretary-
treasurer, National Union of Automatic Equipment
& Coin Machine Operators Service & Repairmen 18647 (*)
11. Official quarterly report and order blank. National Union
of Automatic Equipment & Coin Machine Operators
Service & Repairmen, dated July 1, 1952, signed by
Rowland Schaefer 18648 (*)
11 A, Application for membership in the National Union of
Automatic Equipment & Coin Machine Operators
Service & Repairmen, dated April 1952 in the name
of Robert Schaefer inscribed "Local Union No. 1"... 18649 18781
IIB. Application for charter dated June 26, 1953, bearing the
signature of Rowland Schaefer, local union secretary,
National Union of Automatic Equipment & Coin
Operators Service & Repairmen 18649 (*)
12A, Application for membership in the National Union of
Automatic Equipment & Coin Machine Operators
Service & Repairmen, dated June 7, 1955, in the name
of Frank Rizzo, inscribed "Local Union No. 3, trans-
ferred Local No. 1" 18658 18782
12B. AppHcation for membership in the National Union of
Automatic Equipment & Coin Machine Operators
Service & Repairmen, dated November 1952 in the
name of Frank Rizzo, inscribed "Local Union No. 1" 18658 18783
13. Subpena No. L-7333, dated May 18, 1959, served on
Frank J. Smith 18662 (*)
14. List of toll calls to Walter D. Conroy from John For-
musa 18690 (*)
15. Photograph of the business district of Sierra Madre
showing buildings acquired by Anthony Pinelli 18694 (*)
16A. Check No. 3214, dated June 9, 1954, payable to Joe
Dote, in the amount of $5,000, drawn by Movie Town
Motel and signed by Salvatore J. Pinelh 18695 18784
16B. Check No. 3216, dated June 9, 1954, payable to James
Markese, in the amount of $12,500, drawn by Movie
Town Motel and signed by Salvatore J. Pinelli 18695 18785
16C. Check No. 3217, dated June 9, 1954, payable to Sam
Siano, in the amount of $5,000, drawn bv Movie
Town Motel and signed by Salvatore J. Pinelli 18695 18786
♦May be found in the files of the select committee.
CONTENTS
Introduced
on page
17. Affidavit of S. W. Ferry, Gary, Ind 18698
18. Records of toll calls from Melrose Linen Co. to Red
Eagle Club, and from Melrose Linen Co. to Archie
Automatic Car Wash 18738
19. Affidavit of George Cvitkovich, East Chicago, Ind 18751
20. Memorandum of telephone message to "Gerhard,"
dated January 9, 1959: "While you were out Mr.
Pinelli called" 18766
21. Schedule of handbook disallowances for the years 1948-
52 18769
22A. Schedule "A. Pinelli, additional tax due on adding
$20,000 to income" 18771
22B. Schedule "Anthony Pinelli, additional tax deficiency
due to disallowance for rents and wages on handbook
operations, correction of partnership income, and
correction of oil inventory error" 18771
Proceedings of —
June 2, 1959 18427
Junes, 1959 18485
June 4, 1959 18539
June 8, 1959 18585
June 9, 1959 18637
June 10, 1959 18691
June 11, 1959 18727
•May be found in the flies of the select committee.
Appear
on page
(*)
(*)
18787
(*)
(*)
(*)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
TUESDAY, JUNE 2, 1959
U.S. 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
44, agreed to February 2, 1959, 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
Frank Church, Democrat, Idaho; Senator Homer E. Capehart, Re-
publican, Indiana.
Also present : Robert F. Kennedy, chief counsel ; LaVern J, Duffy,
investigator ; Richard G. Sinclair, investigator ; James F. Mundie, in-
vestigator; John T. Thiede, investigator; Robert E. Manuel, assist-
ant counsel ; Ruth Y. Watt, chief clerk.
The Chairman. The committee will be in order.
(Members of the select committee present at the convening of the
session : Senators McClellan and Capehart.)
The Chairman. The com,mittee today begins an inquiry into cer-
tain activities in Lake County, Ind. During the more than 2 years of
the committee's existence, it has on occasion embarked on investiga-
tions of improper activities in labor and management only to fmd
itself squarely faced with the problem of public corruption. This was
the case in Tennessee, when the committee found evidence that a bribe
had been paid to a judge to fix the case of certain officials of the Team-
sters Union accused of dynamitings, violence, and other crimes. In
Louisiana, the committee found a sheriff working hand-in-glove with
a top underworld figure in the jukebox business. In Portland, Oreg,,
the committee found the district attorney engaged in a conspiracy
with certain Teamster officials and underworld figures to control vice
and gambling in that city.
Such has again proved to be the case in our investigation into labor
union and management activities in the jukebox and pinball opera-
tions in Lake County, Ind. I shall not undertake at the outset to char-
acterize in advance the testimony we shall hear, but indications are
that the situation in this Indiana county is as critical as any that the
committee has heretofore exposed.
The illicit operations which appear to have flourished in Lake
County since 1950 would have been impossible without the knowledge,
acquiescence, and cooperation of some public officials. Certain seg-
ments of the citizenry in this area have attempted to do something
18427
18428 IMPROPER ACTIVITIES IN THE LABOR FIELD
about this situation, but without success. The reason is that when
local officials enter into an alliance with the corrupt elements of the
community, there is really no one for the citizen to turn to. He simply
becomes the victim of such corruption.
Any local area in which there is a breakdown of law enforcemjent
inevitably attracts outside hoodlum figures. This appears to have
been the case m Lake County, where in 1954 certain top figures in the
Chicago syndicate moved into both the coin-operated machine and
restaurant business. The extent to which these Chicago hoodlums
had the cooperation and the assistance of a top official of the Interna-
tional Brotherhood of Teamsters to prevent the unionization of their
companies will be one of the subjects of this hearing.
The committee must report that the cooperation received from cer-
tain public officials in Lake County during this investigation has been
less than satisfactory. It is to be hoped that these officials can and
will come before the committee and give to it the cooperation that is to
be expected of any public official who is charged with law enforce-
ment duties or any other responsibilities of public trust. We shall
withhold further comment on this until the hearings have proceeded
or been concluded.
Previous hearings of the committee have shown the growing power
ot the American underworld. These hearings will underline this grow-
ing power 111 conjunction with the corollary fact of public corruption.
I he Lake County case will show the effect that hoodlum domination
o± an industry has on a labor union operating in that industry. It will
also show the problems faced by legitimate businessmen when they
must compete with hoodlum-dominated companies who have the active
backing of public officials.
Senator Capehart, do you have any statement ?
Senator Capehart. No, thank you.
The Chairman. Call the first witness, Mr. Kennedy.
Mr. Kennedy. Mr.Testo.
The Chairman. Mr. Testo, will you come around, please? 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 noth-
ing but the truth, so help you God ?
Mr. Testo. I do.
TESTIMONY OF JOHN TESTO
The Chairman. Mr. Testo, will you state your name, your place
of residence, and your business or occupation, please.
Mr. Testo. My name is John Testo, and I live at 608 Van Buren
Street, Gary, Ind. As to my occupation, I have been in the American
Federation of Labor all of my life.
The Chairman. That is, you have been a member since you started
working, I guess.
Mr. Testo. Yes, sir.
The Chairman. That is what you mean ?
Mr. Testo. Yes. I have been working in the trade all of my life.
I am a marble and tilesetter and terrazzo operator.
^ Mr. Kennedy. You are a member of the Terrazzo Union and prac-
tice that trade at the present time ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18429
Mf.Testo. Yes, sir.
Mr. Kennedy. And you have been in a labor union all of your life
either as an officer or as a member ?
Mr. Testo. Well, I was working and I was officer and I have been
a member of the organization.
The Chairman. Proceed.
Mr. I'^NNEDY. Now, Mr. Testo, you headed the Coin Operators
Service and Repairmen's Union in Gary, Ind., from 1947 until you
resigned in 1957 ?
Mr. Testo. Yes, sir.
The Chairman. That was a period of about 10 years ?
Mr. Testo. Well, it was before that. It was pretty close to 14 years.
The Chairman. You must have started before 1947.
Mr. Testo. That is right. . .
Mr. Kennedy. The particular union that we are interested m is
the Coin Operators Service and Repairmen's Union in Gary, Ind.
You started heading that in 1947 ?
Mr. Testo. Yes, but I worked before, and that was the time when
we were granted a charter for that type of work.
Mr. Kennedy. Now, going through your background, in February
of 1951, you started your own national independent union, the Auto-
matic Equipment and Coin Machine Operators Service and Repair-
men ; is that right ?
Mr. Testo. That is correct.
Mr. Kennedy. That was a national union ?
Mr. Testo. That is correct.
Mr. Kennedy. And in February of 1952, you became affiliated with
the national union, and at that time you received the name of Local
No. 1 of the Automatic Equipment and Coin Machine Operators
Service and Repairmen's Union ; is that right?
Mr. Testo. That is right.
Mr. Kennedy. They were issued a charter, or local No. 1 was issued
a charter in February of 1952 ?
Mr. Testo. That is right.
Mr. Kennedy. Now, during the period of 1952 to July of 1957,
nine additional charters were issued by you throughout the country ;
is that right ?
Mr. Testo. That is right.
Mr. Kennedy. Local No. 2 was a charter that operated in Chicago
and Cook County and vicinity ?
M?,. Testo. That is right.
Mr. Kennedy. And that was ultimately taken over by certain of
the underworld element in Chicago, and you withdrew that charter;
is that right ?
Mr. Testo. I withdrew the charter.
Mr. Kennedy. There were some bad people who came in and took
it over ?
Mr. Testo. That is right.
Mr. Kennedy. Ultimately that local No. 2 charter was given out in
Los Angeles ?
Mr. Testo. That is correct.
Mr. I^nnedy. You formed a union out in Los Angeles?
Mr. Testo. That is correct.
18430 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. And then local No. 3 was another charter that lasted
]iist a very short period of time in Chicago and Cook Countv «
Mr. Testo. That is correct.
Mr Kennedy. And then local No. 4 in Eugene, Oreg. ; local No 5
in Lake Geneva, Wis.; local No. 6 in Buchanan, Mich.; local No
im Boston, Mass.; local No. 8 in Manchester, N.H.; local No 9 in
Fort Wayne, Ind.; and local No. 10 in Knoxville, Tenn.; is that
correct ?
Mr. Testo. That is right.
Mr. Kennedy. And for the most part this was a question of the
local union distributmg labels : is that correct ?
Mr. Testo. Well, they supplied the organization, to keep the or-
ganization up.
Mr. Kennedy. What you would do as international officer is sup-
ply tJiem with labels ? ^
Mr. Testo. I never supplied them myself. The secretary of the in-
ternational supplied them.
. Mi-. Kennedy. The international would supply these locals with
labels ?
Mr. Testo. Yes, sir.
Mr. Kennedy. And a number of them had only maybe 5 or 10
members, but they would have thousands of labels that they would
have for distribution purposes ?
Mr. Testo. I suppose that they bought the label accordino- to the
machine that they got. ^
Mr. IvENNEDY. But they would have the labels that they could dis-
^ r^^^r^™^^^^ ^^^^ machines in their particular area ; is that correct «
Mr. Testo. Yes.
Mr. Kennedy. Now, there is just one other matter that I wanted
to clear up w^ith you.
In February of 1956, you had a conversation with a man by the
name of Matt Mendyke ; is that right «
Mr. Testo. That is right.
Mr. Kennedy. And at that time you wanted to raise some monev,
and so you spoke to Mr. Mendyke who had been a friend of youre
that you could get him made general secretary-treasurer of the na-
tional union if he would make an investment in the union ; is that
right ? '
Mr. Testo. We were broke, and we couldn't operate and so he
promised to come in.
Mr. Kennedy. So he was going to come in. He was going to make
l?.n!7^^^'?^''^ •^'^^^ ^'^ idtimately did make an investment of some
$8,600, IS that right, some $8,625 ?
Mr. Testo. Something like that.
Mr. Kennedy. He made that investment in the union and in turn
^Tr^®^ ^^"^^ ^^ ™^^® ^"^^ secretary-treasurer of the national union «
^ Mr. Testo. Not me. It was the executive board of the interna-
tional.
Mr. Kennedy. The executive board would make it?
Mr. Testo. Yes, sir.
Mr. Kennedy. Did the executive board ultimately make him sec-
retary-treasurer ?
Mr. Testo. That is right.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18431
The Chairman. Did that money go in to the union treasurer, the
money that he invited?
Mr. Testo. Eveiy nickel of it has been used, Senator.
Mr. Kennedy. It was all turned over in the form of cash ; is that
rio-ht^
Mr.' Testo. Yes; I think so, because I never handled the money
myself.
Mr. Kennedy. Who handled the money ?
Mr. Testo. He came over to the house and gave it to Mrs. Testo.
Mr. Kennedy. Your wife ; is that right ?
Mr. Testo. Yes, sir.
Mr. Kennedy. The money was turned over to your wife i
Mr. Testo. Yes, sir. , . i • x
Mr. Kennedy. But all of this money ended up m the union treas-
ury?
Mr. Testo. What is that?
Mr. Kennedy. Did all of this money go to the union ?
Mr. Testo. That is right. You have it in your file, and you have an
accounting of all of that money. , o rr. i
Mr. Kennedy. Now, to whom was the money given i i o whom was
this $8,000 dollars given? -, . j
Mr. Testo. It was supposed to be given to the general secretary, and
I don't know.
Mr. Kennedy. Who was supposed to get it ?
Mr. Testo. Mrs. Testo gave a receipt, and the man did. After they
o-ave iiim the monev he got a note, and I thinly you have it in your file.
'^ Mr. Kennedy. Is the money— it was then, you say, turned over to
Legetto? ^ ^^ ,
Mr. Testo. It was supposed to be turned over to Legetto, aaicl so
I saw him one time when they gave him the money.
Mr. Kennedy. Mrs. Testo gave the money to Legetto ?
Mr. Testo. Yes, sir.
The Chairman. Gave all of it to him, the $8,500 ?
Mr. Testo. I think. Senator, it was given a couple of times, and I
think that he paid it a couple of times, and we were in debt and that
money went to organize outside.
The Chairman. For outside organization ?
Mr. Testo. That is right.
The Chairman. That is why it was borrowed ?
Mr. Testo. Yes ; we got the money because we were broke.
The Chairman. To try to get your organization rolling, and get
new members and expand it ?
Mr. Testo. Well, we have the organization. Senator, and we have
the organization outside, but we had no money to operate the organi-
zation. We loaned him the money, and I think you have a file on that.
Mr. Kennedy. And Mendyke was then placed on the payroll at
some $400 per quarter ?
Mr. Testo. They paid him $400 back, every quarter.
Mr. Kennedy. But he still is owed over $5,000 ; is he not?
Mr. Testo. I never know, Mr. Kennedy.
Mr. Kennedy. Do you understand he is still owed some money ?
Mr. Testo. I don't know anything about it, because I never h.ul
anything to do with it for 3 years, since I got the stroke, and I was sick.
18432 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Now, in going on, in 1953, you were organizing
chiefly the jukebox operators and their employees ; is that right ?
Mr. Testo. Well, we organized all of the servicemen. I was backed
by William Green.
Mr. Kennedy, I don't want to go into all of that.
The main area that you had the jurisdiction over was the jukebox
operators and their employees, the repairmen ?
Mr. Testo. We organized repairmen and some of those people
joined in the union because they did repairmen work themselves and
they worked on the machine, and they joined the union.
Mr. Kennedy. That would be the category of the operators who
repaired their machines ?
Mr. Testo. That is what they called them.
Mr. Kennedy. Now, in 1953, and thereafter, and 1954, and 1955,
the gambling type of pinball machines began to be introduced into
the area ; is that right ?
Mr. Testo. That is right.
Mr. Kennedy. And the jukebox operators who were members of
your union could not compete against these machines ?
Mr. Testo. That is right.
Mr. Kennedy. They were losing revenue to these gambling-type
machines ?
Mr. Testo. That is right.
Mr. Kennedy. Because if someone came into a tavern or a loca-
tion they would rather play the gambling-type machine rather than
the jukebox ?
Mr. Testo. I suppose so.
Mr. Kennedy. But anyway, they were in very difficult straits;
is that right?
Mr. Testo. Yes.
(At this point Senator Church entered the hearing room.)
The Chairman. Is that when you began losing money, when the
gambling-tjrpe machines came in ?
Mr. Testo. That is right.
The Chairman. Had you been making money on them before?
Mr. Testo. No, We just was organized ourselves.
The Chairman. You had just gotten organized ?
Mr. Testo. That is right.
The ChairmanI You hadn't tested out to find out how much money
you could make ?
Mr. Testo. I never did make money myself.
The Chairman. You haven't made any yet ?
Mr. Testo. I never made nothing. I spent my own.
The Chairman. Proceed.
Mr. Kennedy. In order to compete with this, did the local people
who had the jukeboxes then decide that they had better go into the
gambling type of equipment themselves ?
Mr. Testo. Yes, sir. Some of them operators
Mr. Kennedy. In order to compete ?
Mr. Testo. In order to compete.
Mr. Kennedy. This was an outside group that was bringing in the
gambling equipment ; is that correct ?
Mr. Testo. Correct.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18433
Mr. Kennedy. If it was gambling equipment and gambling is
illegal, why didn't the Lake County authorities do something about it?
Mr. Testo. I don't know anything about that.
Mr, Kennedy. They didn't do anything about it?
Mr. Testo. So far as I know, I didn't hear of anybody that did
anything.
Mr. Kennedy. But in order to compete with this outside group
that was bringing in this gambling equipment, the local operators
started trying to place their own gambling equipment on the various
locations; is that right?
Mr. Testo. That is right.
Mr. Kennedy. Did they find that they had even greater difficulty
when they tried to do that ?
Mr. Testo. Well, our members of the union they have pretty hard
time.
Mr. Kennedy. What happened ?
Mr. Testo. Well, a lot of locations some of those people that have
the pinball, they went in and took the machine away from our oper-
ator.
Mr. Kennedy. How did they do that ? Who did that?
Mr. Testo. Well, some of those operators who operated the coin
machine around Gary and around Lake County, except the East
Chicago. East Chicago was the only one. They just had pinball but
they never did bother anybody.
Mr. Kennedy. In East Chicago, they joined up with the union?
Mr. Testo. They joined up the first day they started.
Mr. Kennedy. That was one group and they joined the union,
this outside group. But there was an entirely different outside group
in the rest of Lake County ; is that right?
Mr. Testo. Correct.
Mr. Kennedy. They refused to join the union ?
Mr. Testo. Well, we can't find out who is the boss of the place.
Mr. Kennedy. You couldn't find out who ran this operation ?
Mr. Testo. That is correct.
Mr. Kennedy. You called the syndicate?
Mr. Testo. Well, that is what they called them.
Mr. Kennedy. So this syndicate group came in and placed the ma-
chines. Then in order to compete with them, the local people tried to
place their own machines. Did they then have difficulty from the
public prosecutor's office ? Did you understand that ?
Mr. Testo. You better repeat that word again because I can't un-
derstand it.
Mr. Kennedy. Now in 1953, 1954, and 1955, this syndicate was
bringing in this gambling type of equipment, but in order to com-
pete with them the local people, the local operators who had formerly
had juke boxes also had to introduce their gambling type of equip-
ment?
Mr. Testo. Correct.
Mr. Kennedy. Did you then find that the representatives of the
public prosecutor's office in Lake County, Mr. Holovachka's office,
were going around causing difficulty for the local operators?
Mr. Testo. Correct. Do you want me to tell this ?
Mr. Kennedy. Yes.
18434 IMPROPER ACTIVITIES. IN THE LABOR FIELD
The Chairman. Yes.
Mr. Testo. In one location on South Calumet Avenue, one of the
operators come over to the office and say, "I am losing everything what
I have.'' I said, "What is the matter?"
He told me they have two machines on such-and-such location on
South Calumet Avenue. I said, "If you got machines on South Calu-
met Avenue, why don't you go over and talk to the owner ? Everybody
is a union and they respect the union."
When I went in there, he told me he would like a union, he would
like to go along, but there is one thing : If he keeps those machines for
tlie union, they might close up the saloon for 5 or 10 minutes, and then
he will be in trouble.
Mr. Kennedy. Let me see if I understand you. This is one of the
local operators. He placed some machines in a local tavern which was
very friendly toward union people. So he came to you and said, "I am
having difficulty over there ?"
Mr. Testo. That is right.
Mr. I^nnedy. So you inquired into it, and the local tavern owner
said, "I would rather have a union machine in here, but I have been
informed that I can be in great difficulty, and if I keep open 5 or 10
minutes late they will come in and close me down." Is that right ?
Mr. Testo. Correct.
Mr. Kennedy. He received a warning he better take the other kind
of machine or otherwise he would be in difficulty with the law enforce-
ment people ?
Mr. Testo. Correct.
Mr. Kennedy. They could find some reason to close him up ; is that
right?
Mr. Testo. Correct.
Mr. Kennedy. He said, "In view of that, I am going to have to take
the nonunion machine" ?
Mr. Testo. Correct.
Mr. Kennedy. You found that was true in a number of different
]() -alities?
Mr. Testo. Correct. I told the gentleman if he is going to get into
trouble, I told liim the member that belong to the union won't cause
any trouble, but if they want their machine out, take the machine
out. He said, "Who told you that V and he said, "A gentleman named
Conroy."
Mr. Kennedy. And Mr. Conroy works in the public prosecutor's
office?
Mr. Testo. He is supposed to be the chief investigator.
Mr. Kennedy. That is correct. He is the chief investigator in
Mr. Holovaohka's office.
Mr. Testo. So I turned around and I gave him one of my cards.
I said, "You tell him to call me." I was waiting for the call. I am
still waiting until the next morning when two detectives showed up
at the house and ser\ed me a warrant to appear before the grand
jury-
Mr. Kennedy. When you went in there and raised a question about
Mr WaUer Conroy's activities, you gave the local tavern owner your
card an<l said to have ^Fr. Conroy call you. The next thing you knew
was that tlio following morning two deputy sheriffs came with a sub-
IMPROPER ACTIVITIES IN THE LABOR FIELD 18435
pena, a summons or a warrant for you to appear before the grand
jMr. Testo. Not the next morning. I think it was a couple of days
later. The next morning those people took the machine out and the
next morning I went out to check the spot, to find out what kind of
machines they have in. I find that they have no union machine in
there.
I said, "If it is no good for the union, what is the good for the man
who don't belong to the union?" So I just walked out of the phxce.
Then I think it was Saturday, Saturday they served me to appear in
front of the grand jury. So I went to Chicago and I asked a lawyer.
The lawyer talked with them on the phone.
Mr. Kennedy. Who did he talk to ?
Mr. Testo. I think he talked with Metro or somebody.
Mr. Kennedy. Metro Holovachka ?
Mr. Testo. Somebody in the office, that is all. He told me, "You
use your office not as a respectable citizen, but you use your office to
be of benefit to yourself."
Mr. Kennedy. Your lawyer told Holovachka over the telephone
that he was not using the office to help the citizens ; he v/as doing it
to further his own ambitions ; is that right ?
Mr. Testo. That is right.
]\Ir. Kennedy. And that he in turn would expose this or bring this
out?
Mr. Testo. Well, he told our lawyer, "You tell John to behave him-
self." That is all I know about. Nobody ever called me in front.
I would be glad to go any time they want.
The Chairman. The "John" was you? He sent word for you to
behave yourself ; is that right ?
Mr. Kennedy. Metro Holovachka told you, through your attorney,
that you should behave yourself ?
]\Ir. Testo. Yes ; I should behave myself.
Mr. Kennedy. But you weren't called before the grand jury at that
time?
Mr. Testo. No.
Mr. Kennedy. Did you have any conversations with Mr. Holo-
vachka yourself ?
Mr. Testo. Before that — before that I had a conversation.
Mr. Kennedy. Will you relate that to the committee, what con-
versations you had with Mr. Holovachka ?
Mr. Testo. Well, they was putting the machines all around Ham-
mond and south of Hammond.
Mr. Kennedy. This is the syndicate coming in and putting in the
gambling?
Mr. Testo. That is what they say ; it is a syndicate. That is what
they tell me. I don't know nothing about the machine. All I know
is how to organize the people.
Mr. Kennedy. I understand.
Mr. Testo. I went to the justice of the peace. 'WHien I went in to
the justice of the peace, down at Indiana, I found Holovaclika, and
I told Holovachka for this machine, putting these machines out, that
is not legal. "Why don't those repairmen join the union, because
18436 IMPROPER ACTIVITIES IN THE LABOR FIELD
it is all union?" That is what I told him. Three or four days later
I got a letter to bring all the books down.
Mr. Kennedy. First, what did Holovachka say to you then?
Mr. Testo. I am just coming to that. He told me to bring all the
books, but then I got another letter the next day not to go. Then
he wanted another day. So I went over that day, I went up there,
and he told me that I should behave myself, that I cause a lot of
trouble.
I say, "Listen, the other people is organized. Why not these people
can be organized?" And he told me, he said, "Well, listen, I am
going to get something on you. I am going to put you in jail some
of these days."
Mr. Kennedy. All you were trying to do was to organize these
people ?
Mr. Testo. That is all.
Mr. Kennedy. And every time you made any effort to try to
organize them, a representative of the public prosecutor's office —
you would be subpenaed, either for yourself or to bring your books
in; is that right?
Mr. Testo. That is right. He asked me about the book, and I
said : "Listen, I can't give you no book. I am an organizer. If you
want the book, you go down to the office and ask the office of the
organization."
He said, "What if I send somebody over there?" And I said,
"If you send somebody over there, we will show you everything.
There is no crook there ; I wouldn't stand for it."
He sent Mr. Conroy, and, I don't know, he picked up some papers
and took them with him. I don't know whether they got them back
or not. I never heard anything after that.
Mr. Kennedy. Let me go into a few more details about the opera-
tions of the pinballs and who was behind some of them. In 1955 a Mr.
Jack Doyle started a jukebox company; is that right?
Mr. Testo. That is correct.
Mr. Kennedy. And at that time, he teamed up with Mr. Tony
Pinelli, Anthony Pinelli ?
Mr. Testo. That is correct.
Mr. Kennedy. And ]\Ir. Jolm Formusa ; is that right ?
Mr. Testo. That is correct.
Mr. Kennedy. Did you know anything about Pinelli or Formusa?
Mr. Testo. No; I don't know the gentlemen. I met Formusa one
time when he built his home, but I never know Pinelli. He ran a
pizza place.
Mr. Kennedy. Pinelli ran a pizza place ?
Mr. Testo. Yes ; a pizza place and a restaurant.
Mr. Kennedy. Did he originally come from San Mateo, Calif.?
Mr. Testo. I don't know where he come from.
Mr. Kennedy. Did he suddenly appear on the scene in 1954 ?
Mr. Testo. I know they were building a place on West Eleventh
Avenue, and he was running the place. That is all I know.
Mr. Kennedy. Jack Doyle, who originally started the company,
was sent to prison, was he not ?
Mr. Testo. Yes.
Mr. Kennedy. And he died in prison, I believe, last year. Then did
Pinelli link up with some other individuals ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18437
Mr. Testo. At the present time, I think Pinelli was around that
route, I think. I think they run the jukebox pretty late after that.
Mr. Kennedy. In addition to using the members of the public
prosecutor's office, were there also representatives of the police de-
partment in Gary that were helping him in obtaining locations?
Mr. Testo. Well, that is what the operators report to me. They
say they are using the badge to try to take the machine from the
other people.
Mr. Kennedy. So you not only had the representative of the public
prosecutor's office helping some of the companies, but you had repre-
sentatives of the police department in Gary, Ind. ; is that right?
Mr. Testo. That is what they claim, the operators. They know
more about this than I know myself.
Mr. Kennedy. Did Mr. Pinelli and Formosa go into business with
the Schiralli brothers ? Is that right ?
Mr. Testo. I understood that Mr. Schiralli was gomg into the juke-
box business.
Mr. Kennedy. Rocco Schiralli ran for mayor of Gary, and at the
time they went into partnership he held the position of deputy city
comptroller, did he not?
Mr. Testo. Correct.
Mr. Kennedy. And he now holds that position, does he not ? He
still holds the position of deputy city comptroller?
Mr. Testo. I suppose he does. I don't know. I never know much
about
Mr. Kennedy. Did you have a conversation with Mr. Rocco
Schiralli about the fact that you couldn't organize these companies,
and that the police department was being used ?
Mr. Testo. I called Mr. Schiralli and I told him, I said, "Every-
body belong to the union over here, and now you got this company
yourself, why don't you join the union?" That was the first time.
Then I met him the second time and I said, "Well, why don't you join
the union ? Come up to my house."
He told me I should get in touch with so-and-so, and if those people
told him to join the union, he will join the union.
Mr. Kennedy. Rocco Schiralli said, in making up his mind as to
whether he should join the union or not, that you should get in touch
with somebody ?
Mr. Testo. That is right.
Mr. Kennedy. Who did he tell you to get in touch with?
Mr. Testo. He told me to get in touch with a fellow in Chicago
whose name is Joey Glimco, or something.
Mr. Kennedy. Joey Glimco ?
Mr. Testo. Yes.
Mr. Kennedy. He told you, on making up his mind as to whether
he would join the union or whether he should join the union
Mr. Testo. If that man tell him to join the union, he will join the
union.
Mr. Kennedy. Did you know Joey Glimco ?
Mr. Testo. I never saw the gentleman before ; but he give me the
telephone and I call him on the phone. I made arrangements over
there and I went a couple of times. I never know the guy. He might
have passed me every time I went there.
36751 — 59 — pt. 53 2
18438 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Did you go to Chicago to see him ?
Mr. Testo. I went one morning and to wait. I said I would stay
there until I met this guy. I sat outside. It was cold as hell, and
I sat outside the door. This man coming out of the car, him and a
woman got out of the car, and I asked if his name was Joe, and he
said "Yes," and he said, "Are you Mr. Testo?" and I said, "Yes."
He told me to come to his office. I went upstairs with him, and I
said, "Schiralli told me to ask you about his joining the union."
Mr. I^NNEDY. Did you know Mr. Joey Glimco was head of local
777 of the Teamsters?
Mr. Testo. I never know the gentleman. I told him, "As long as
you are a member of the union, I think the union should support the
other union." He said I was eating too much.
Mr. Kennedy. What did that mean, you were "eating too much" ?
Mr. Testo. I don't know. I was eating too much spaghetti and
he was eating steak. So he told me he was going to take care of it,
but he never did. They come in and take the jukebox away from
those union men.
Mr. Kennedy. How did you leave it with him? Was he friendly
with you or imf riendly ?
Mr, Testo. He was very nice. As far as I know, that is the first
time I met the gentleman, and he was very nice to me.
Mr. Kennedy. Why did he volunteer that you were eating too
much ? What was the significance of that i"
Mr. Testo. I don't know,
eating too much.
Mr. Kennedy. How did you leave it with him ?
Mr. Testo. I left it very friendly, and he was very friendly when
I left. He shake hands with me and he said, "Well, I will see what
I can do to help you out." He was very nice.
Mr. Kennedy. What did you do then ?
Mr. Testo. I got back and see that they are still taking jukeboxes
from our union people.
Mr. Kennedy. The next day did they come in and take some more
union jukeboxes?
Mr. Testo. They took a lot of boxes. I called him and tried to make
an appointment. I went over there and, hell, I couldn't meet him
any more. I can't catch him in the office any more.
Mr. Kennedy. You couldn't get Joey Glimco ?
Mr. Testo. No. So I told them, "Let him go" ; that is all.
The Chairman. How many boxes did you have covered by your
union?
Mr. Testo. How many in the county ?
The Chairman. Yes ; that were covered by your union ?
Mr. Testo. I can't tell you. Senator.
The Chairman. Well, give some idea about it, whether it is a
dozen, a hundred, or what.
Mr. Testo. Well, I think there was 13 or 14 operators. I don't
know liow many jukeboxes they got.
The Chairman. How many boxes ?
Mr. Testo. I can't tell you "how many boxes.
The Chairman. You had. then, at tlie time, some l:) or 14 operators?
Mr. Testo. Yes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18439
The Chairman. And depending on how many boxes each one had
would be tlie total number of boxesl
]VIi\ Testo. Senator, I never keep that list myself, how much they
have.
The Chairman. I don't say you kept the list. You had some idea
how many people you had in the union.
Mr. Testo. Well, some they have 50, some have 60, some have
maybe 100.
The Chairman. You are talking about boxes now ?
Mr. Testo. The jukebox.
The Chairman. Some of these operators or business places where
the boxes had been installed would have from 15, maybe, to 100 boxes?
Mr. Testo. Sometimes.
The Chairman. And you had 13 or 14, or something like that,
businesses where the management or where the employees belonged to
your union?
Mr. Testo. That is right.
The Chairman. All right.
Mr. Kennedy. The operators, the local operators, who were mem-
bers of the union, and their employees, they lost about 50 percent
of their business during this period of time?
Mr. Testo. I believe so; yes.
Mr. Kennedy. So it was gradually not only destroying the local
people, but also the business people, was it not?
Mr. Testo. We were destroyed right along.
Mr. Kennedy. Did you place picket lines in front of an}' of these
people?
Mr. Testo. No.
Mr. Kennedy. Why not?
Mr. Testo. We have nobody working in the saloons. They belong
to a different organization.
Mr. Kennedy. Did you then get out of the union business? Did
you retire?
Mr. Testo. Well, I got sick, you see, and I got a stroke over here
first, down at the Sheraton-Park. Again, I got another touch, and
1 was pretty sick. My wife got sick before me.
Mr. Kennedy. Why did you get out? Why did you give up the
union ?
Mr. Testo. Well, it was a little pressure, and I just quit; that is all.
Mr. Kennedy. Will you tell that to the committee, please?
Mr. Testo. Well, my wife, every time we go to Indianapolis or go
someplace, she would get a call up at the house and they scare her,
tell her I should get out of the business.
Mr. Kennedy. What would they say to her ?
Mr. Testo. Wliat?
My. Kennedy. What would they say to her?
Mr. Testo. Well, they would say if I never get out maybe I get
hui"t. I might get hurt. Again, after that, some man came over
upstairs and he told me I should close up. He told me once, he
told me twice, so I figured why should I get in trouble like that? I
lost everything I have. I might as well get out and try to do the
best I can.
18440 IMPROPER ACTIVITIES IN THE LABOR FIELD
I told the boys, I said, "You better put in some youiig fellow. I
will help you boys." If they ask me today to help them out, I am
going to help them.
Mr. Kennedy. What sort of things would they say to your wife
when they called her ?
Mr. Testo. Well, a fellow came upstairs, he was talking to me 2
or 3 days, and he left and went to California, and when he come back
he said, "Are you still in the jukebox business?" and I said, "No,
I am going to quit." So I turned around and quit.
Mr. Kennedy. Was it because of the pressure that was put on you
and your wife ?
Mr. Testo. That is right.
Mr. Kennedy. Would you tell the committee what sort of things
they would say when they telephoned ?
Mr. Testo. Well, they called my wife and told my wife when I
was going to Indianapolis — we went to Indianapolis to see the Gov-
ernor about this, and they told my wife to tell me to stay away
from Indianapolis.
Mr. Kennedy. What was going to happen if you didn't?
Mr. Testo. Well, if I go to Indianapolis, they was going to take
care of me.
Mr. Kennedy. Take care of you ?
Mr. Testo. That is right.
Mr. Kennedy. And you went to Indianapolis to see the Governor ?
Mr. Testo. That is right.
Mr. Kennedy. You saw the Governor, did you not ?
Mr. Testo. Yes.
Mr. Kennedy. As a matter of fact, you made many trips to Indian-
apolis ; is that right ?
Mr. Testo. Right.
Mr. Kennedy. To try to get some help ?
Mr. Testo. That is right.
Mr. Kennedy. Was anything ever done ?
Mr. Testo. No.
Mr. Kennedy. So the union was driven out of business and you
were driven out of the union ; is that right ?
Mr. Testo. Yes.
Mr. Kennedy. When they called, did they tell your wife that they
would have you killed ?
Mr. Testo. That is right.
Mr. Kennedy. Did this give your wife a nervous breakdown?
Mr. Testo. That is right.
Mr. Kennedy. And your wife had to go to the hospital; is that
right?
Mr. Testo. Yes. I never know anything about it until the day they
took her to the hospital. She told me about that.
Mr. Kennedy. She had never told you thej^ were making the tele-
phone calls until you had to take her to the hospital ?
Mr. Testo. That is right.
Mr. Kennedy. Then did she tell you on the way to the hospital
about the telephone calls that had been made ?
Mr. Testo. Yes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18441
Mr, Kennedy. That was prior to the time you gave up the union?
Is that right ?
Mr. Testo. That is right.
The Chairman. How much did you have invested in the business?
Mr. Testo. Everything I have.
The Chairman. Well, everything you have. I can't tell how much
that was.
Mr. Testo. I don't know. Everything I have I put in.
Mr. Kennedy. You had worked on it all your life; is that right?
Mr. Testo. That is right.
Mr. Kennedy. So it was really the gangsters and the racketeers
there and threats to your wife plus the help and assistance of the law
enforcement people and officials of Mr. Holovachka's office and cer-
tain representatives of the police department in Gary, Ind., that drove
you out of business ?
Mr. Testo. Mr. Kennedy, I can't say Holovachka, and I don't know
that.
Mr. Kennedy. But from what people related to you, they were los-
ing their locations based on their activities ?
Mr. Testo. I cannot accuse anybody, because as I told you, it is not
what happened to me.
Mr. Kennedy. But these people were losing their locations because
of the pressure that was put on them, at least in part by representatives
of Mr. Holovachka's office, as well as on occasion some representatives
or the police department ; is that right ?
Mr. Testo. That is the way they were telling me, the operators.
Mr. Kennedy. And you know that you yourself made complaints
about the situation to Indianapolis and to the Governor's office and you
were never able to get anything done ?
Mr. Testo. I never got anything out of there.
Mr. Kennedy, And finally, it was sufficient to drive your wife to a
hospital ?
Mr. Testo. That is right.
Senator Capehart. May I ask some questions ?
Mr. Testo, do you belong to the Terrazzo Workers Union ?
Mr. Testo. That is right.
Senator Capehart. Were you an officer in that union ?
Mr. Testo. That is right.
Senator Capehart. Are you still an officer in that union ?
Mr. Testo. That is right.
Senator Capehart. How long have you belonged to that union?
Mr. Testo. About 30 years.
Senator Capehart. Then you organized this independent union,
No.l?
Mr. Testo. For the music boxes, yes, and they were supposed to
be under the federation.
Senator Capehart. Was it an independent union or was it affiliated
with the AFL or CIO?
Mr. Testo. No, they were supposed to have 15 locals and recognized
by the American Federation of Labor; that is the way they gave it
tome.
Senator Capehart. My question is: Were you affiliated with the
American Federation of Labor ?
18442 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Testo. We were affiliated with nobody. It was an independent
organization.
Senator Capehart. Were you the president of it ?
Mr. Testo. No. I was just organizing it.
Senator Capehart. You were the organizer ?
Mr. Testo. Yes, sir.
Senator Capehart. Were you ever an officer ?
Mr. Testo. No, I organized it. I was the business agent.
Senator Capehart. And at the same time, you were the business
agent and organizer of the Terrazzo Union ?
Mr. Testo. I was business agent of the Terrazzo Workers.
Senator Capehart. And you still are ?
Mr. Testo. Yes, sir.
Senator Capehart. And there was no connection between the local
1 and the Terrazzo Union ?
Mr. Testo. No.
Senator Capehart. None whatever ?
Mr. Testo. No.
Senator Capehart. Were there any other labor organizations in
Lake County that at any time ever tried to organize the coin machine
industry ?
Mr. Testo. Not as far as I know. There were the Electrical Work-
ers. At the time they put me on, they never operated right and I took
the charter, and Mr. Kennedy has all of that stuff.
Senator Capehart. My point is that there was never another labor
organization tried to organize the coin machine operators ?
Mr. Testo. No.
Senator Capehart, Did you ever have any interference by any other
labor organization while you were head of the local ?
Mr. Testo. No, they tried to help me but they never harmed me.
Senator Capehart. Well, did any labor organization do anything
against your local No. 1 ?
Mr. Testo. No.
Senator Capehart. Did any labor organization official ever do any-
thing against your local No. 1 ?
Mr. Testo. No, as far as I know.
Senator Capehart. What was the purpose of this local No. 1?
What was it organized for; to organize the employees or the owners?
Mr. Testo. It was to organize all of the repairmen, and the repair-
men that were getting miserable wages, getting about $20 a week, and
in the contract I think they got $60 a week, and they get so much, and
they got them up to $125 a week.
Senator Capehart. And your job was to get the repairmen of these
owners into your union, local No. 1 ?
Mr. Testo. That is right.
Senator Capehart. And you had trouble doing it?
Mr. Testo. I never did have any trouble, and they would come in
themselves. They would call me and they wanted to be organized.
Senator Capehart. They voluntarily came in ?
Mr. Testo. Yes, and they wanted to be organized.
Senator Capehart. Well, wherein did you get into trouble with
these other operators, tliis syndicate ? How did you get into trouble
with those gentlemen ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18443
Mr. Testo. I never got into trouble myself. They got in with the
operators and they had the machines and they were losing the
machines.
Senator Capehart. In other words, the people that didn't belong to
your union were taking locations away from members of your union?
Mr. Testo. Taking locations away from members of our union.
Senator Capehart. And it was a fight between one group of op-
erators on one side, and a group of operators on the other side?
Mr. Testo. That is right.
Senator Capehart. iVnd you were the business agent for one group
of operators who belonged to your union ?
Mr. Testo. That is right.
Senator Capehart. And was that the trouble that you had in the
county, in Lake County ?
Mr. Testo. That is right.
Senator Capehart. But you had no trouble from any other labor
organization ?
Mr. Testo. Oh, no.
Senator Capehart. And you never picketed anybody ?
Mr. Testo. No, sir.
Senator Capehart. You never boycotted anybody ?
Mr. Testo. No, sir, and I never believed in that picket stuff.
Senator Capehart. What were the dues of your members ?
Mr. Testo. I think they were paying $1.50 a month.
Senator Capehart. $1.50 a month.
Mr. Testo. Yes.
Senator Capehart. Well then, there was just one organization, one
labor organization in Lake County that was organized or did organize
the coin machine operators' employees ?
Mr. Testo. It was the coin machine and repair servicemen, and the
service and repairmen.
Senator Capehart. Now, did you organize the operators themselves,
the owners of these machines ?
Mr. Testo. Some of the operators, they couldn't afford to hire a
man and they were fixing their own machines and they came in on
their own, and they said they wanted to have a card and they wanted
to be an honorary member of our organization, and we had very nice
people over there. Every place where we were in the local, the serv-
icemen and operators were very respectable citizens, as far as I knew
from my part.
Senator Capehart. Then your trouble was with the fact that a lot
of these operators and employees didn't want to join your union.
Was that your big trouble ?
Mr. Testo. That is right, it was the only trouble I know.
Senator Capehart. But you felt as though they were being helped
by local law enforcement officers ?
Mr. Testo. Well, Senator, the operators were telling me that.
Senator Capehart. The operators told you that ?
Mr. Testo. Yes, the operators came up to me and they said, "They
are using the police on this and that in Gary."
Senator Capehart. You didn't know it of your own accord ?
Mr. Testo. I didn't know of my own accord ; I never knew, and the
operators would come over to the office and make a complaint.
18444 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Capehart. You are telling us that everything that you have
said here today was hearsay, that someone else told you ?
Mr. Testo. Well, I told them the same thing. That is correct, is it
not?
Mr. Kennedy. I think that you have been through it, and I think
that you explained that.
Senator Capehart. Wliat you said was you didn't know it of your
own accord, and you said the operators told you that they were doing
this?
Mr. Testo. That is right.
Senator Capehart. But you didn't know it of your own accord ?
Mr. Testo. I never knew myself, directly, I never knew, and I
didn't see any policeman, because I never knew anything about it.
They went out and took the machines and said, "Here, throw this man
out and put another one in."
Senator Capehart. Were you in a position to know whether or not
they would lose the location ?
Mr. Testo. No, the operators would come over and tell me that they
are losing such and such a location.
Senator Capehart. When he came over and told you that he was
losing location so and so, what were you supposed to do ?
Mr. Testo. Well, I was supposed to go out and try to talk to the
owner, you know, and try to get him to keep these people, and say,
"You know they are living in the city and they are good people, and
they have been doing business for so many years, and why don't
you keep them?"
That is all I would do, try to protect the people in our hometown.
Senator Capehart. Well, these operators that your union members
were having trouble with, were they local people ?
Mr. Testo. No, they just went in, and I suppose they would buy
those places, and I don't know. There were some operators who were
paying as high as $2,000, give it to the owner to take the machine away.
The Chairman. Well, you are talking about these operators coming
in, and so forth. As I undei*stand it, an operator is the fellow who
furnishes the machine.
Mr. Testo. They operate the machine, and they are the owners of
the machine.
The Chairman. He owned it but he puts it in a fellow's place of
business ?
Mr. Testo. That is right.
The Chairman. And he assigns it there, and he makes arrangements
with the man that owns the place of business to put a machine in
there, and let it operate ?
Mr. Testo. That is right.
The Chairman. And then they divide on some basis?
Mr. Testo. I don't know what they divide.
The Chairman. I know, but they do divide the revenues from it.
Mr. Testo. That is right.
The Chairman. What was happening was that the operators that
belonged to your union, the people who owned the machines and
were placing them in these businesses ran into the problem of the
owner of the business saying, "I have got to give up your machine,
or I am going to get into trouble. I have got to take the other fel-
low's machine." Is that correct ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18445
Mr. Testo. That is correct, sir.
The Chairman. That is what you have been trying to say ?
Mr. Testo. That is correct.
The Chairman. I don't want to mislead you, and I am trying to
make this record clear.
Mr. Testo. Senator, I am telling you the truth. I am no liar and
I tell you the truth, and that is what happened.
The Chairman. That is just what happened ?
Mr. Testo. Yes.
The Chairman. All right.
Now, you didn't hear any threats made to the owners of the places
of business. That is what you are saying ?
Mr. Testo. No.
The Chairman. That part of it is hearsay with you ?
Mr. Testo. That is right.
The Chairman. The owners of the place of business would come
to you and complain ?
Mr. Testo. That is right.
The Chairman. That they had been told to get rid of your op-
erator's machines ?
Mr. Testo. That is right.
The Chairman. Or they would be in trouble ?
Mr. Testo. That is right.
The Chairman. Now, that was reported to you, but you did not
hear it?
Mr. Tpsto. No, I never heard it.
The Chairman. But did you find, or do you know of your personal
knowledge that you were losing, or your operators were losing machine
sites ?
Mr. Testo. That is right.
The Chairman. And they began losing them ?
Mr. Testo. Yes, sir.
The Chairman. Frequently or just occasionally, or how ?
Mr. Testo. They lost quite a few machines, and I don't know just
how many they lost.
The Chairman. Now, you knew that because you had personal
knowledge of that, that they lost the machines, did you ?
Mr. Testo. I don't understand, Senator.
The Chairman. You knew that your operators' machines were
taken out and others were put in ?
Mr. Testo. I never knew it, but it is what the operators report to
me.
The Chairman. Did you ever go around and see that the machines
had been changed ?
Mr. Testo. Oh, yes.
The Chairman. Well, you knew that the new machine and a dif-
ferent machine was in there ?
Mr. Testo. I see a new machine, and I see the machine, but I can't
do anything about it.
The Chairman. But you didn't see it actually taken out, and you
didn't see the switch made ?
Mr. Testo. No.
18446 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. You would find a new machine and a different
machine in the place, and nonunion machine ?
Mr. Testo. a nonunion machine.
The Chairman. And when you went to the man who was in charge
of this machine operation, the outsider as you termed him, I believe,
he told you to get in touch with Glimco ?
Mr. Testo. That is right.
The Chairman. And you did get in touch with a man you thought
was Glimco, and you went to Chicago a time or two and finally you
saw someone who represented himself to be Glimco ?
Mr. Testo. That is right.
The Chairman. Was there anything there in his office to identify
him as to who he was when you went in there, and do you know it
was Glimco's office?
Mr. Testo. I never knew Glimco before and it was the first time.
The Chairman. I know you didn't know him before, but what
kind of office was it ? Was it a labor union office ?
Mr. Testo. He has a taxicab office over there.
The Chairman. A taxicab office ?
Mr. Testo. Yes, sir.
The Chairman. A union office?
Mr. Testo. Yes ; a union office.
The Chairman. And he was in charge of the taxicab union up
in Chicago ?
Mr. Testo. That is right.
The Chairman. Is that correct ?
Mr. Testo. That is right.
The Chairman. You learned that much, did you, while you were
there?
Mr. Testo. That is right.
The Chairman. And you had a nice talk with him, and a nice hand-
shake and you left ?
Mr. Testo. I left because he said he was going to help me.
The Chairman. When you got home, what was happening? Was
he helping or was the operation continuing just as it was ?
Mr. Testo. It continued the same way.
The Chairman. I don't know whether you said these 13 or 14 oper-
ators would have all of the way from 15 or 16 up to a hundred
machines perhaps ; is that right ?
Mr. Testo. Something like that.
The Chairman. Some had that many ?
Mr. Testo. Yes, sir.
The Chairman. Would they average 25 or 50 ?
Mr. Testo. Some of them would have 25 and some had 15, and
they lost quite a few.
The Chairman, You can't give us then any estimate, and it would
have to be a rough guess as to how many machines ?
Mr. Testo. That, is right.
The Chairman. Wliat I am trying to get at is this : Can you tell
how many machines you lost, that were removed from your opera-
tion and replaced by the syndicate machines ?
Mr. Testo. I can't tell you that.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18447
The Chairman. Did you lose half of your machines, or a third of
them, or a fourth of them, or 90 percent of them, or 10 percent; or
what?
Mr. Testo. It must have been a loss of about 25 or 30 percent of
their equipment.
The Chairman. You lost some 25 or 30 percent of whatever ma-
chines you had ?
Mr. Testo. I suppose.
The Chairman. All right.
Mr. IvENNEDY. You had also two personal experiences with repre-
sentatives from the public prosecutor's office, Mr. Holovachka's office,
on two separate occasions ?
Mr. Testo. That is right.
Mr. Kennedy. So you had those personal experiences as well as
what you heard personally, as well as what you were told ?
Mr. Testo. That is right.
The Chairman. Let's repeat those. Let's get the record clear on
them and not leave it confused as to just what did he say.
Mr. Testo. The prosecutor ?
The Chairman. Yes.
Mr. Testo. When I went up there, I went up there and I asked him
the first time when I went over, if they are illegal, those machines
are illegal.
The Chairman. If those machines were legal ?
Mr. Testo. Illegal. If they are legal, then we should take the
people in the union and if they are not legal, we don't want them.
The Chairman. If they are illegal machines, you didn't want
them ?
Mr. Testo. We didn't want them.
The Chairman. What did he say ?
Mr. Testo. He told me to mind my own business.
The Chairman. To mind your own business ?
Mr. Testo. That is right.
The Chairman. What was the next encounter ?
Mr. Testo. Well, I didn't do anything. He told me if I don't mind
my own business, he will see that he put me in jail. I said, "Any time
you think I violate the law, you put me in jail."
The Chairman. What were you doing to cause him to want to put
you in jail?
Mr. Testo. Nothing that I know of.
The Chairman. Was there anything you knew of? Did he make a
specific complaint other than in general terms to mind your own
business?
Mr. Testo. That is what he told me, to my my own business, so far
as I know.
The Chairman. Did you tell him you had complaints from the
owners and operators that his men were going around and telling them
not to use your machines ? Did you tell him about that ?
Mr. Testo. I told him everything when I talked to him that morning.
The Chairman. You told him that this was happening according
to reports to you?
Mr. Testo. That is right.
The Chairman. We are talking about the prosecutor.
18448 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Testo. That is right.
The Chairman. You talked to him personally and told him about
that?
Mr. Testo, That is right.
The Chairman. Is that when he told you to mind your own business
or he would put you in jail ?
Mr. Testo. That is right.
The Chairman. I am trying to get it clear. You went to the law-
enforcement officer, the prosecuting attorney, to get information and
to try to protect your own interests; when you asked him about it,
though, he told you to mind your own business or he would put you
in jail?
Mr. Testo. That is right.
The Chairman. He wouldn't tell you whether they were legal or
illegal?
Mr. Testo. No.
The Chairman. He didn't tell you ?
Mr. Testo. He wouldn't tell me nothing. I walked out of the place.
The Chairman. You reported to him how you were losing your
business ?
Mr. Testo. Yes, sir.
The Chairman. All right.
Senator Capehart. You referred to this as your business. "What
did you mean by that? You didn't own any of the machines, did
you?
Mr. Testo. Senator, I went up there and told him that our people,
you understand, belong to a union.
Senator Capehart. I mean the employees of the operators.
Mr. Testo. Well, the
Senator Capehart. They were members of your union ?
Mr. Testo. If an employer loses a machine, the repairman would
have no job, they would be out of work. So I went over and ex-
plained to him, and told him what it was all about. He told me to
mind my own business.
Senator Capehart. In other words, you had a lot of employees and
these operators belonged to your union ?
Mr. Testo. That is right.
Senator Capehart. Therefore, if they lost the locations, then your
men would lose jobs ?
Mr. Testo. That is right.
Senator Capehart. You were interested in it from that stand-
point ?
Mr. Testo. That is right.
_ Senator Capehart. That is, making sure they didn't lose the loca-
tions because your men would lose jobs ?
Mr. Testo. That is right.
Senator Capehart. About what time was it ? About when did you
talk to this prosecutor and he told you to mind your own business ?
Mr. Testo. Well, I don't recall, I don't remember. They got the
letter here. I think they got the letter in the file over there of the
time I talked with him.
You know the letter. Senator ; you got the letter. You found them
in the file.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18449
Mr. Kennedy. It was 1953.
Mr. Testo. Well, it was around that time.
The Chairman. Is there anything further ?
Mr. Kennedy. You had one personal experience with John For-
musa, did you not ?
Mr. Testo. Yes.
Mr. Kennedy. That was in his home ?
Mr. Testo. Well, we was trying to get the wages for the tile helpers.
Mr. Kennedy. You were doing work in his home ?
Mr. Testo. Yes, the drains and the tile on his house.
Mr. Kennedy. How expensive was this home, probably, or approxi-
mately ?
Mr. Testo, It was a pretty good home.
Mr. Kennedy. About $100,000 ?
Mr. Testo. Well, I don't know. It was a pretty good-looking place.
Mr. Kennedy. Well, I am not asking you exactly. Was it about
a $100,000 home?
Mr. Testo. You know, Mr. Kennedy
Mr. Kennedy. Was it approximately that ?
Mr. Testo. It might be close. The thing is it is a pretty good-
sized home.
Mi*. Kennedy, And was there some question as to what the wages
were to be paid to the employees at the home ?
Mr. Testo. No. We have trouble for one of the tile contractors.
He didn't want to pay the wages. Everybody paid the wages, but
these people wouldn't pay the wages.
Mr. Kennedy. So did the employees walk out ?
Mr. Testo. Well, they walk out every place. So they told me they
was working on this place.
Mr, Kennedy. Did you go in and talk to Mr. Formusa ?
Mr. Testo. My men went in there and they tried to stop the people.
They come back in the office and I went along myself. I went in there
and found Mr. Formusa, and he said, "John, this is my home." Well,
I said, "If it is your home, we are having a little trouble with the
tile men."
He said, "You know, I got a gun over here," and I said, "We don't
want to stop anybody. You go ahead and finish the work." And I
let the men work.
Mr, Kennedy. So the men went back ?
Mr. Testo. No; we just let them go.
Mr. Kennedy. Did he have a gun in his hand when he was talking
to you ?
Mr. Testo. He showed it to me. It was in his back pocket.
Mr. Kennedy. When he told you he wanted the employees back on
the job
Mr. Testo. No ; he just told me.
Mr. Kennedy. Then he brought a gun out of his back pocket ?
Mr. Testo. No ; he showed me.
Mr. Kennedy. Showed you a gun from his pocket?
Mr. Testo. That is right.
Mr, Kennedy. Were the employees then sent back?
Mr. Testo. I told the men, "You go to work ; I don't want no trouble
with anybody."
18450 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. All right.
That is all, Mr. Chairman.
The Chairman. All right. Call the next witness.
Mr. Kennedy. I would like to call Mr. Duffy briefly to give an
identification of some of those individuals whose names have been
mentioned.
The Chairman. You solemnly swear the evidence you shall give be-
fore this Senate select committee shall be the truth, the whole truth,
and notliing but tlie truth, so help you God ?
Mr. Duffy. I do.
TESTIMONY OF La VEEN J. DITFFY
The Chairman. Mr. Duffy, you are a member of the staff of this
committee ?
Mr. Duffy. Yes, sir.
The Chairman. Of the professional staff ?
Mr. Duffy. Yes, sir.
The Chairman. Have you been conducting an investigation into this
Gary, Ind., situation that is the subject matter of this inquiry?
Mr. Duffy. Yes, sir.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Testo, in his testimony, mentioned a number of
individuals. First was Mr. Doyle. He mentioned Mr. Jack Doyle.
Mr. Duffy. Do you want a little background ?
Mr. Kennedy. Yes. Would you give background? He was one
of those who originally formed the partnership with Pinelli and
Formusa.
Mr. Duffy. Mr. Doyle was exposed by the Kefauver committee
in 1951. He appeared here at Washington. He was characterized by
Senator Kefauver as the gambling czar of Lake County, Ind. At that
time, he invoked the fifth amendment. Subsequent to his appearance
before the committee in Washington he was indicted for income-tax
evasion.
The Chairman. Is that Doyle you are talking about ?
Mr. Duffy. Jack Doyle. He was sentenced to jail and he died in
prison last year.
Mr. Kennedy. In 1958?
Mr. Duffy, Yes, sir.
Mr. Kennedy. It was also brought out that he was in partnership —
he formed a partnership with a man by the name of Tony Pinelli.
Who is Tony Pinelli? We will be going into him more extensively..
Mr. Duffy. In 1953, after Mr. Doyle was exposed by the Kefauver
committee, we have evidence on Mr. Pinelli. Tony Pinelli is a notori-
ous hoodlum whom we will expose later in the course of these hearings.
But in 1953 he was in Los Angeles with Tony Accardo and Sam
"Mooney" Giancana, known as the two biggest hoodlums in Chicago,
Mr, Kennedy. Giancana was the gunman for the Al Capone mob for
a period of time.
Mr. Duffy. That is right. He is now No. 2 in the hoodlums in
Chicago.
Mr, Kennedy. Mr, Pinelli met with them in California in 1953; is
thatcoiTect?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18451
Mr. DuFFT. Yes. It is significant that prior to their meeting in Los
Angeles, Mr. Doyle had been exposed and indicted for income-tax
evasion. Mr. Doyle was convicted in August of 1954 for income-tax
evasion, and about the same time Mr. Pinelli, who has a notorious repu-
tation in Chicago, but who migi-ated to Los Angeles, suddenly returned
to Gary, Ind., about this time.
Mr. Kennedy. At tlie time that Doyle went out of business or was
in difficulty with the Federal Government, Pinelli appeared on the
scene in Gary, Ind. ?
Mr. Duffy. Yes.
Mr. Kennedy. He had operated out of Chicago, and had a liome
in San Mateo, Calif. ; is that right 'i
Mr. Duffy. Yes, sir.
Mr. Kennedy. Then he came back and suddenly appeared on the
scene in Gary, Ind., about 1954 or 1955 ?
Mr. Duffy. Yes, sir. We will have a lot more testimony relating
to tliat.
Mr. KJENNEDY. I know. I want the general background. So Doyle
and Pinelli were two of the individuals in this operation, in the juke-
box operation. Then also mentioned was John Formusa. Who ia
John Formusa?
Mr. Duffy. He is a notorious hoodlum in Gary who has made his
livelihood, dating back to 1935, in prostitution. He is well known in
the Gary police files as being head of the prositution in that area.
Mr. IvENNEDY. So at the time Pinelli came in there, Mr. Formusa
built his new house of prostitution, did he not ?
Mr. Duffy. In fact, he built his new house of prostitution in 1955
in Gary.
Mr. IvENNEDY. What was that called ?
Mr. Duffy. The M& J Motel.
Mr. Kennedy. That was a very elaborate motel ; is that correct ?
Mr. Duffy. Quite elaborate.
Mr. Kennedy. You have seen the motel ?
Mr. Duffy. Yes, I paid a visit to the outside of the place in Decem-
ber of last year and we established it was operating as of that date.
Mr. Kennedy. That was erected in 1955 ?
Mr. Duffy. 1955.
The Chairman. Is that the building that the previous witness was.
talking about ?
Mr. Duffy. No. The previous witness was discussing Mr. For-
musa's personal home which, incidentally, is on Lake Michigan ■
The Chairman. This is the business institution ?
Mr. Duffy. Yes.
Mr. Kennedy. Mr. Formusa has also been convicted of narcotics?
Mr. Duffy. Of narcotics, as being an addict, and served time in the
penitentiary.
Mr. Kennedy. We will be going into his dealings in narcotics as
well at a later time?
Mr. Duffy. Yes, sir.
Mr. Kennedy. In order to get it cleared up, as to Mr. Testo's con-
tacts with tlie public prosecutor, his personal contacts, they were in
July of 1953 and again in August 1955; is that correct?
Mr. Duffy. Correct.
18452 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. EIennedy. Those are the two contacts he personally had with
the public prosecutor's office?
Mr. Duffy. Correct. Also, we will be going into more activities
about Mr. Pinelli in the Chicago crime syndicate.
Mr. Kennedy. This was not the only coin-machine operation in
Gary during this period of time ? There was another one, a Pinelli
operation ?
Mr. Duffy. Yes.
Mr, Kennedy. We will be going into that ?
Mr. Duffy. The gambling-type pinball operation.
Mr. IVENNEDY. But tliis was at the time after Mr. Holovachka took
over as the public prosecutor in 1953. This is the influx of certain
gangsters and hoodlums from Chicago and even from the west coast
into the Lake County area ?
Mr. Duffy. That is correct. Mr. Holovachka was elected to office
as county prosecutor of Lake County, Ind., in Januar;^ 1953.
Mr. Kj:nnedy. And the destruction of the union which was oppos-
ing this during that period of time ?
Mr. Duffy. That is correct.
Senator Capehart. Do Pinelli and Formusa belong to any unions
or have any union activities ?
Mr. Duffy. We will get into those connections with the union
activities of Mr. Pinelli later in the course of these hearings, Senator.
Senator Capehart. Did they belong to a union ?
Mr. Duffy. Mr. Pinelli did not belong to a union ; no.
Senator Capehart. Mr. Formusa ?
Mr. Duffy. No, Mr. Formusa did not belong to a union.
Senator Capehart. Neither one of them belonged to the union?
Mr. Duffy. No, sir.
Senator Capehart. Did they have union connections ?
Mr. Duffy. Yes. We will show a definite tie with labor with Mr.
Pinelli during the course of these hearings.
Mr. Kennedy. Then, of course, their fight against this union?
Mr. Duffy. Their fight against Mr. Testo.
Mr. Kennedy. He put the union out of business ?
Mr. Duffy. Yes, he put the union out of business is what it
amounted to.
Senator Capehart. I thought Mr. Testo testified that nobody inter-
fered with him or gave him trouble.
The Chairman. Not from the union.
Mr. Duffy. We are talking about independent operators. The
syndicate was operating in there.
Senator Capehart. I thought he testified no other union or union
official gave him trouble.
Mr. Duffy. That is correct.
Senator Capehart. But these people are not union ?
Mr. Duffy. These are nonunion.
Mr. Kennedy. That is all.
The Chairman. Call the next witness.
Mr. Kennedy. Mr. Frank Witecki.
The Chairman. Be sworn.
You do solemnly swear the evidence you shall give before this Sen-
ate select committee shall be the truth, the whole truth, and nothing
but the truth, so help you God ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18453
Mr. WiTECKI. I do.
TESTIMONY OF FRANK WITECKI
The Chairman. State your name, your place of residence, and your
business or occupation, please, sir.
Mr. WiTECKi. My name is Frank Witecki. My address is 3885
Harrison Street, Gary, Ind. My occupation is I am in the jukebox
business.
The Chairman. You are what?
Mr. Witecki. I am in the jukebox business.
The Chairman. You are in the jukebox business in what capacity?
Mr. Witecki. I am an operator.
The Chairman. You furnish boxes to locations ?
Mr. Witecki. That is correct.
The Chairman. Do you own the boxes ?
Mr. Witecki. I do.
The Chairman. You purchase the boxes, own them, and then you
try to place them around in ditferent businesses so that they may be
operated there?
Mr. Witecki. That is correct.
The Chairman. All right. Thank you.
Mr. Kennedy. You have been in business in Gary, Ind., for more
than 10 years ; is that right ?
Mr. Witecki. Yes, I have.
Mr. Kennedy. You have jukeboxes and also you have a partner-
ship in arcade equipment ?
Mr. Witecki. I do.
Mr. Kennedy. You have been a member of the Automatic Equip-
ment and Coin Machine Operators Service and Repairman's Union
since 1947?
Mr. Witecki. I have.
Mr. Kennedy. You have also been a member of the association ; is
that right?
Mr. Witecki. That is correct.
The Chairman. The association? Wliat is the difference between
the association and the union ?
Mr. Witecki. The association is an organization of the operators.
The Chairman. The businessmen, the owners?
Mr. Witecki. The businessmen, the owners.
The Chairman. The fellow who is in the business?
Mr. Witecki. That is correct.
The Chairman. And the union is supposed to represent the fellow
who does the work ; is that right ?
Mr. Witecki. That is right. However, in our circumstance, back
in Gary, many of us do our own work on our own boxes and, thusly,
we carry membership in the union.
The Chairman. I would like to ask if you place the boxes out and
you, as the owner, service them personally, yourself, instead of hiring
someone to do so.
Mr. Witecki. That is correct.
The Chairman. All right.
36751— 59— pt. 53 3
18454 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. During 1955, or just prior to 1955, the area was
flooded with these gambling- type pinballs?
Mr. WiTECKi. That is right.
Mr. Kennedy. And it was an outside gi'oup that brought them in ;
is that right ?
Mr.WiTECKi. Yes.
Mr. Kennedy. They introduced them ?
Mr. WiTECKi. Yes.
Mr. Kennedy. So it made it impossible for the independent oper-
ators to operate their machines in competition with this gambling-
type of equipment ?
"^ Mr. WiTECKi. Yes. Let me go into that. Actually, what it is is
the operators in and around Gary operated phonographs.
Tlie Chairman. Operated what?
Mr. WiTECKi. Jukeboxes. And, at the same time, they either run
shuffle alleys, bowling games, or some type or piece of arcade. When
tlie pinballs came in, it was a situation where in many places they
didn't have room for both of them. So, naturally, they took the
gambling piece of equipment in preference to, say, the legitimate piece
of equipment.
Next in line is with a gambling piece of equipment in a location and
having a legitimate piece of equipment sitting next to it ; naturally
nobody is going to play the legitimate piece of equipment. They are
going to spend their money where they possibly can win some money.
Mr. Kennedy. If it was gambling-types of equipment, and illegal,
why didn't the public prosecutor move in and seize the equipment 'i
Mr. WiTECKi. We have been asking the same question.
Mr. Kennedy. There was nothing done at all ?
Mr. WiTECKi. There has been notliing done.
Senator Church. About when was it that this gambling-type pin-
ball equipment was first introduced, approximately ? Can you give
me the year ?
Mr. WiTECKi. It is pretty hard for me to say. It has been some
time ago.
Mr. Kennedy. About how long ago ? Was it 4 or 5 years ago ?
Mr. WiTECKi. No ; it has been longer than that.
Mr. Kennedy. About 1953 ? Would that strike you as about right ?
Mr. WiTECKi. Yes ; I would say so, roughly, in guessing at it.
Mr. KJENNEDY. At that time, as a rough estimate, these gambling-
type pinball machines first began to appear. Who was the public
prosecutor at that time ?
Mr. WiTECKi. I believe it was either Metro Holovachka, or else it
was Dave Stanton, one of the two. I don't exactly recall who it was.
But at the time of Dave Stanton's
Mr. Kennedy. The record shows that Mr. Holovachka was the pub-
lic prosecutor. Is he still the public prosecutor ?
Mr. WiTECKi. No ; he isn't.
Mr. Kennedy. Maybe we should explain that. He is the chief
deputy public prosecutor at the present time.
^Ir. WiTECKi. That is right.
Mr. Kennedy. His chief assistant became public prosecutor in 1959
and he became his chief deputy.
Senator Church. So the two have worked together throughout the
whole period ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18455
Mr. WiTECKi. Yes.
Senator Church. From 1953, then, until 1959, a period of approxi-
mately 6 or 7 years, these gambling-type pinball machines have been
operating in Lake County ?
Mr. WiTECKi. That is correct.
Senator Church. Do they operate in substantial numbers?
Mr. WiTECKi. Definitely.
Senator CnuiiCH. Do they operate in tlie open ?
JNlr. WiTECKi. Yes ; they do.
Senator Church. And it is common knowledge that they are in
operation, and a fact generally known by the public of the county ?
Mr. WiTECKi. Yes.
Senator Church. To your knowledge, has the public prosecutor
taken any action during the course of this period to put an end to the
operation of these machines ?
Mr. WiTECKi. No, sir.
Senator Church. To your knowledge, are these machines operating
in violation of the laws of the county and of the State ?
Mr. WiTECKi. Yes.
Senator Church. Have you undertaken personally to make any
protest to the office of the public prosecutor in an attempt to get the
laws enforced ?
Mr. WiTECKi. No, sir.
Senator Church. Why ?
Mr. WiTECKi. Sir, that is their job, to enforce the law, and if they
can't see what is going on in that city and they have to have a little
fellow like me come around and tell them how to run their business,
then something is wrong.
We have taken our story directly to the Governor of the State, and
we haven't gotten anywhere there either.
(At this point Sentaor McClellan w^ithdrew from the hearing room.)
Senator Church. When did you take this story directly to the Gov-
ernor of the State?
Mr. WiTECKi. If I am not wrong, it was approximately 1955 or in
there somewhere.
Senator Church. About 1955 or thereabouts ?
Mr. Kennedy, our counsel, tells me that he has a copy of a resolution
that you presented at that time covering this matter to the Governor.
I tliink it would be an appropriate time to insert into the record a copy
of this resolution.
I wonder, ]Mr. Kennedy, if you would question the witness concern-
ing it, and read pertinent portions of it into the record.
Mr. IvENNEDY. A number of you went down and visited the Gov-
ernor ; is that correct ?
Mr. WiTECKi. That is correct.
Mr. Kennedy. Prior to that time, you had introduced some of this
gambling-type equipment yourself ; had you not ?
Mv. Witecki. That is correct.
]Mr. Kennedy. In order to try to compete with this outside group,
you started to distribute this gambling-type equipment?
Mr. Witecki. Yes, sir. It came to the point where you either start
dealing in the equipment yourself or you were slowly going out of
business.
18456 IMPROPER ACTrV^TIES IN THE LABOR FIELD
Mr. Kennedy. Then did you find that the representatives of the
public prosecutor's office came around and raided locations where
your equipment was ?
Mr. WiTECKi. They came out and started to remove equipnient,
being that it w^as gambling equipment, and if it was removed in a
few days it was replaced by a syndicate machine.
Senator Church. In other words, if I understand your testimony
correctly, the public prosecutor has taken no action whatever against
illegal gambling-type machines o^vned by the syndicate, but when you
undertook to meet this kind of illegal competition with comparable
machines, then the public prosecutor's office moved in against your
machines, took your machine out, and a few days later the same
type of machine was put in its place by the syndicate ?
Mr. WiTECKi. That is correct.
Senator Capehart. I would like to ask a couple of questions, Mr.
Chairman,
Do all of these so-called gambling machines have the Federal stamps
on them ?
Mr. WiTECKi. That I don't know, sir. Let us put it this way:
At one time they did not, although a great portion of them today
do have Federal stamps.
Senator Capehart. You know, of course, that the Federal law re-
quires that if you have a gambling machine you must buy, I think it
is, a $250 stamp or $100 stamp ?
Mr.WiTECKi. $250.
Senator Capehart. Do you know how many such stamps have been
issued in Lake County, Ind. ?
Mr. WiTECKi. No, sir ; I don't.
Senator Capehart. Did you buy any yourself when you were op-
erating these illegal machines ?
Mr. WiTECKi. Yes, sir ; I have.
Senator Capehart. Wlien you talk about an Indiana machine, do
you mean it violates the Indiana State statute ?
Mr. WiTECKi. Let's put it this way : I would like to more or less
explain in a way what constitutes so-called pinballs.
(At this point Senator McClellan returned to the hearing room.)
Senator Capehart. Why don't you tell us how these illegal ma-
chines operate ?
Mr. WiTECKi. First of all, the pinball is not the right name for the
machine. The name of the machine actually goes by the name of
Bingo. It is a Bingo machine. A pinball is actually a legitimate
machine that is legal under the State of Indiana, and there are some
around town.
The Bingo machine has recording devices by which payoff can be
recorded.
Senator Capehart. ^Vho makes the payoff ?
Mr. Witecki. It would have to be the location owner.
Senator Capehart. He makes the payoff ?
Mr. Witecki. Correct.
Senator Capehart. And it is called Bingo ?
Mr. Witecki. That is it.
Senator Capehart. And that is in violation of the Indiana law ?
Mr. Witecki. Yes. I would say so.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18457
Senator Capehart. But not a violation of the Federal law?
Mr. WiTECKi. That is correct.
Senator Capehart. And yon can buy, can you, for $250, a Federal
stamp to go on that so-called Bingo machine ?
Mr. WiTECKi. Yes.
Senator Capehart. So we have the peculiar situation, then, where
the Federal Government says, "If you will pay me $250 you can op-
erate an illegal machine," and the State of Indiana says, "It is il-
legal," is that the situation ?
Mr. WiTECKi. That is correct.
Senator Capehart. That is an unusual situation.
Senator Church. May I say in that connection, if the Senator
will yield, I have taken note as a result of earlier hearings into this
general subject of this serious gap in the Federal law, and intend to
introduce legislation tliis week designed to plug- that gap so that
these Bingo-type machines, which are in reality just horizontal slot
machines and not legitimate amusement devices, will be outlawed un-
der the Federal law, and thus prohibited from interstate commerce.
I think that with such a Federal law on the books we can put an
end to the illicit traffic in these machines and thus assist in their
elimination.
Just so the record is clear, this Bingo-type machine contains a re-
cording device. It may be set up in such a way so that the award that
is registered, registers as free games rather than paying out money
to the owner ; isn't that correct ?
Mr. WiTECKi. That is correct.
Senator Church. But there is a recording device inside the ma-
chine so that if a large number of free games are recorded, then the
location owner can pay off the player of the machine and the machine
records the payment of the payoff, so that when the operator comes
to open the machine and take out the coins there is a record there of
the number of payoffs which is returned to the location owner and
then the balance is split according to the arrangement. Is that the
general way it works ?
Mr. WiTECKi. That is right.
Senator Church. The distinction between this kind of machine
and an ordinary amusement machine, a pinball machine that pays
free games would be this, that the ordinary amusement machine
would not contain one of these recording devices; is that not so?
Mr. WiTECKi. That is correct. It does have a meter, possibly. Let
us say you can win a free game. However, there is no way in order to
keep a record of the payoff.
Senator Church. And you must be able to keep a record in order for
the machine to actually operate a gambling device; is that so?
Mr. Wii'ECKi. That is correct.
Senator Church. So for a plain amusement machine, no record is
needed, no record is kept, no meter is in the machine and, besides that,
the number of games that are paid off is considerably fewer than the
number of games paid off by the bingo-type, which might pay off 60,
or even a hundred free games, Mhich are clearly not intended to be
played oft' by the person using the machine, but are intended, rather, to
register the amomit of money to be paid to him over the counter.
That is right ; is it not ?
18458 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. WiTECKi. That is right.
Senator Capehart. Isn't the problem in Indiana under the law
catching the man in the act of paying out the money ? Hasn't that
been the trouble in the courts? I mean, a slot machnie is a slot
machine that automatically pays the money.
Mr. WiTECKi. Yes, sir ; I imagine so.
Mr. Kennedy. Technically ; but that is not really the problem, is it?
Mr. WiTECKi. No, sir. You don't have to catch evei-yone of them
paying off.
Senator Capehart. Well, it has been in the courts out there a num-
ber of times in different i^laces in the State.
Mr. WiTECKi. Yes, sir ; there have been some brought, primarily by
the Federal Government, requesting a $250 stamp.
Senator Capehart. In your operation, have you any contact with
labor in respect of this matter other than being a member of local
No. 1?
Mr.WiTECKi. No, sir.
Senator Capehart. You had no other unions that ever interfered
with you ?
Mr. WiTECKi. No, sir.
Senator Capehart. No outside unions ?
Mr. WiTECKi. No, sir.
Senator Capehart. No outside labor bosses ?
Mr. WiTECKi. No, sir.
Mr. Kennedy. So it was with this background and the fact that the
representatives of the public prosecutor's office, Mr. Holovachka's
office, were actually in favor of this syndicate group that came in, that
you decided to visit the Governor ; is that correct ? To see if you could
get help and assistance from him ?
Mr. WiTECKi. That is correct.
Mr. Kennedy. And at that tune you brought in the resolution?
Mr. WiTECKi. That is correct.
The Chairman. I hand you a document signed by some five people.
It bears a seal. I will ask you to examine it and state what it is, if you
can identify it.
( The document was handed to the witness.)
Mr. WiTECKi. It is our union seal.
The Chairman. That is your union seal ?
Mr. WiTECKi. Yes.
The Chairman. \Miat is the document ?
Mr. WiTECKi. The document is a resolution that we took to Gov-
ernor Craig.
The Chairman. That document may be made exhibit No. 1.
(Document referred to was marked "Exhibit No. 1" for reference
and may be found in the files of the select committee.)
Tlie Cilmrman. Who adopted the resolution ? You say it is a reso-
lution from whom ?
Mr. WiTECKi. Actually being that the operators that service their
own machines are members of the union, it was basically a union
with those operators that passed that resolution.
Mr. Kennedy (reading) :
Whereas an illegal coin-operated machine commonly known as the pinball,
a gambling device which is now being operated in Lake County illegally under
a monopoly, are driving the legitimate businessman and the union workman out
IMPROPEK ACTIVITIES IN THE LABOR FIELD 18459
of work and are destroying a union organization established for the past 8 years
in Lake County ; and
Whereas it has been bad enough when gambling and vice have been in our
midst without tlie permission of our local law enforcement agencies, but when
such illegal activities have not only been condoned but actually encouraged to
assume their monopolistic, illegal activities here, and when members of reputable
unions are forced ot become unemployed and idle because of this monopoly, then
it is time to bring to light such nefarious activities, such activities that our law
enforcing agencies cannot see ; and
Whereas it does not take any great knowledge of human nature to realize
that where the average individual is given the opportunity, while dining in
restaurants or making purchases in various stores, that he will prefer to try his
luck at a game of chance, rather than listen to a coin-operated musical device
or any other legitimate amusement device, which are being serviced and operated
by recognized union members, and, which do not pay oft' ; and
Whereas our local enforcement agencies are unconcerned over the illegality of
these activities and the resulting loss of employment to our operators, service,
and repairmen, therefore, it would appear to be to their advantage to cooperate
with the monopoly group and disregard the rights of the honest and law-abiding
businessman and citizen ; and
Whereas this is an evil which strikes at the very foundation of our free and
democratic society, our freedom to organize for our mutual benefits and if such
illegal activities are permitted to progress, our honest businessman and worker
would be eliminated as they are unable to compete or cope with a monopoly:
Therefore be it
Resolved, That inasmuch as our appeals to our local law enforcement agen-
cies have been to no avail, we do now appeal to you, the Governor of the State
of Indiana, to take steps to end this flouting of the laws of our State, and to
eradicate this growth of monopoly in the coin-operated devices now existing in
Lake County and to again allow our respected businessman and workingman to
resume their rightful employment.
That was some 2 years ago, is that correct, that you went down
there?
The Chairman. This does not appear to be dated. Do you remem-
ber how long ago it was ?
Mr. Kennedy. I think it was 1955.
Mr. WiTECKi. It was during Governor Craig's administration.
The Chairman. What time did he serve as Governor?
Mr. WiTECKi. I really couldn't tell you, sir.
The Chairman. Did you go with this group and present this to the
Governor ?
Mr. WiTECKi. Yes ; I did.
The Chairman. You went in person ?
Mr. WiTECKi. Yes, sir.
The Chairman. You knew it was delivered to him ?
Mr. WiTECKi. Yes, sir.
The Chairman. And you discussed it with him, I assume ?
Mr. WiTECKi. Yes, sir.
The Chairman. You don't remember just how long ago it was, some
2 or 3 years ago ?
Mr, WiTECKi. It must have been in 1953 category.
Mr. Kennedy. I think it was in 1955.
Mr. WiTECKi. Yes, sir.
The Chairman. You recite in there that you had been to the local
law enforcement officers and tried to prevail upon them and without
success. That explained the reason why you were going on up to
the Governor. Is it true that you did appeal to the local law enforce-
ment officers along the same line of complaint and urgency expressed
in this resolution ?
18460 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. WiTECKi. Sir, personally myself, I have never been to the
police chief to complain that they are moving my machines.
The Chairman. You personally had not complained ?
Mr. WiTECKi. No, sir.
The Chairman. What is the basis for the statement in the resolu-
tion?
Mr. WiTECKi. If I am not wrong, there were four other persons'
names on there.
The Chairman. I understand, but was it just common knowledge
that you couldn't get any cooperation from the law enforcement offi-
cers? I am not asking you now for hearsay other than is that the
general understanding or the general knowledge, that you couldn't
get any help from the law enforcement officers there ?
Mr. WiTECKi. Yes, sir ; that would be the general idea.
The Chairman. Was it talked among you ?
Mr. WiTECKi. Yes, sir.
The Chairman. Did you know of others that had reported they
had made an effort ?
Mr. WiTECKi. There were several of the fellows there that were
operating, and they either were told to get their machines out, or they
were picked up.
The Chairman. Told by whom ?
Mr. WiTECKi. They were told on several occasions probably — I re-
call the first time they were picked up by the city police.
The Chairman. Picked up by the city police ?
Mr. WiTECKi. That is correct.
The Chairman. They would take the old machines out or your in-
dependent operators' machines out, and bring in the syndicate
machines ?
Mr. WiTECKi. They were picked up and later on the syndicate
machines came in.
The Chairman. In other words, after yours were taken out, then
the gambling machines came in ?
Mr. WiTECKi. Yes, sir, and at the same time during the period of
operation by the syndicate, different operators have tried to operate
that type of game, and they were told by the prosecutor's office to get
them out.
The Chairman. In other words, when the local people undertook
to put in the same gambling device or gambling machines, then the
prosecuting attorney's office would tell them to take them out ?
Mr. WiTECKi. That is correct.
The Chairman. But the syndicate crowd did operate ?
Mr. WiTECKi. Yes, sir.
The Chairman. Is that your testimony ?
Mr. WiTECKi. Yes.
Senator Capehart. Now, I believe you did buy some of these
gambling-type machines ; did you not ?
Mr. Witecki. Yes, sir ; I have.
Senator Capehart. Did you operate them ?
Mr. Witecki. For some time ; yes, sir.
Senator Capehart. Are you operating them now ?
Mr. Witecki. No, sir.
Senator Capehart. When did you quit ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 184G1
Mr. WiTECKi. It is hard to say.
Senator Capehart. Was it a month ago, or a year ago ?
Mr. WiTECKi. It has been longer than that, sir. One by one they
just slowly dropped by the ^Yayside.
Senator Capehart. But you are still operating jukeboxes ?
Mr. WiTECKi. That is right.
Senator Capehart. Now, wlien you went to Indianapolis with this
resolution, did you personally see the Governor?
Mr. WiTECKi. Yes, sir.
Senator Capehart. The five of you went down there ?
Mr. WiTECKi. Yes, sir.
Senator Capehart. What did he prom,ise you ?
Mr. WiTECKi. He called in the chief of police, the State police.
The Chairman. The State police ?
Mr. WiTECKi. Yes, and also he had his secretary there, I believe,
which was Horace Coates.
The Chairman. Did he call in the attorney general ?
Mr. WiTECKi. No, sir; I don't believe so, not that I recall. How-
ever, he did promise us that something would be done and the matter
would be straightened out as far as operating these types of games.
However, absolutely nothing was done.
Senator Capehart. After you had the meeting with the Governor,
is that when you Avent back and bought some of the machines yourself
and tried to get into the business ?
Mr. WiTECKi. Not altogether. At that time, in that time there, that
is when I purchased in partnership another route, and in that route
there were a few of the bingo games, and later on in a period of time
I did purchase some and tried to operate them.
Senator Capehart. Is it a fact that under Indiana law that the
prosecuting attorney would be the one to prosecute ?
Mr. Witecki. That I don't know, sir.
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. Call the next witness.
Mr. Kennedy. I would like to call two members of the staff to give
the background of the group that operated these gambling type of
m,achines and the profits made during tliis period of time. I would
like to call Mr. Duffy and Mr. Thiede.
The Chairman. Mr. Duffy, you have been previously sworn.
The other witness will 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 noth-
ing but the truth, so help you God ?
Mr. Thiede. I do.
TESTIMONY OF LaVERN J. DTJFFY (Resumed) AND JOHN T. THIEDE
The Chairman. State your name, your place of residence, and your
business or occupation.
Mr. Thiede. My name is John T. Thiede. I live at 64 Forest
Boulevard, Park Forest, 111. I am auditor for the U.S. General
Accounting Office.
The Chairman. How long have you been with the General
Accounting Office?
Mr. Thiede. It will be 4 years this October.
18462 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Are you a certified public accountant ?
Mr. Thiede. No, sir ; I am not.
The Chairman. Are you an experienced accountant ?
IVTr Thiede Yes sir.
The Chairman. What is your rating in the Government, as to your
employment ?
Mr. Thiede. My grade is GS-9.
The Chairman. Have you been working with members of the staff
in the investigation on which we are now holding hearings?
Mr. Thiede. Yes, sir.
The Chairman. How long have you worked with the staff?
Mr. Thiede. On this particular case, I have worked since January.
The Chairman. I beg your pardon ?
Mr. Thiede. On this particular case I have worked since January.
The Chairman. On this particular case you have been working
since Januaiy ?
Mr. Thiede. Yes, sir.
The Chairman. You have been working with and under the super-
vision of Mr. Duffy, have you ?
Mr. Thiede. Yes.
The Chairman. Proceed.
Mr. Kennedy. Now, Mr. Duffy, who were the individuals that we
find that were behind this syndicate pinball machine operation ?
Mr. Duffy. We find that there are two indivduals who control a
monopoly in the Gary area, which would include the city of Gary,
and the city of Hammond, with gambling-type pinball machines.
Their names are George Welbourn and Steven Sohacki.
Mr. Kennedy. Can you give us any background about those in-
dividuals ?
Mr. Duffy. Mr. Sohacki has a long business relationship in slot
machines prior to entering the pinball business in 1953. In 1953, or
I should say in September of 1952, he had a company called the
Universal Sales Co., and he sold that particular company to Mr.
Welbourn for $25,000, and that was a pinball company. That is how
they got started.
I might say also Mr. Holovachka came into ojfice in January of
1953.
Mr. Kennedy. Now, this operation was apart from the operation
that we talked of earlier, of Formusa and Pinelli and Doyle?
Mr. Duffy. That is the jukebox operation.
Mr. Kennedy. And this was the pinball ?
Mr. Duffy. Yes.
Mr. Kennedy. Now, what have we found for the years 1954, 1955,
1956, 1957, and 1958, of the collections from the gambling-type equip-
ment, the pinball equipment for Mr. Sohacki and Mr. Welbourn?
Mr. Duffy. We found the total collections for this pinball syn-
dicate for these years is $12,708,570.10. That is the total collections.
Mr. Kennedy. That is the minimum, is it not ?
Mr. Duffy. That is a minimum, that is what we have been able to
find.
The Chairman. Over what period of time ?
Mr. Duffy. From January of 1954 through December of 1958.
Mr. Kennedy. Five years?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18463
Mr. Duffy. Five years.
The Chairman. December of 1958 ?
Mr. Duffy. December of 1958.
The Chairman. January of 1954 to December of 1958 ?
Mr. Duffy. Yes, sir ; Senator.
Mr. Kennedy. Five years.
Now, Mr. Duii'y, how many machines did they have at their height?
Mr. Duffy. We have been able to find, from their records, that they
have, as of the present day, 1,278 gambling-type pinball machines.
Mr. Kennedy. Do all those machines have gambling stamps ?
Mr. Duffy. We don't know that. We have been told by the officials
of the company that they do have. But we have made our own in-
vestigation from the Internal Kevenue office in Indianapolis, and we
have been able to find out from their files how many Federal gambling
stamps have been issued to Indiana and, particularly, Lake County,
Ind.
Mr. Kennedy. What do you find as far as those records? Do you
have them there ?
Mr. Duffy. Yes, I have. I have a letter addressed to me from Mr.
Sterling M. Dietrich, who is the district director of the U.S. Treasury
Department, Internal Revenue Service, at Indianapolis. Would you
like to have me read the letter ?
The Chairman. Is it short?
Mr. Kennedy. Just give the information, if you will.
Mr. Duffy. It shows for the period of 1959 there are 1,667 Federal
gambling stamps issued to the State of Indiana.
Mr. Kennedy. Does it give it for Lake County ?
Mr. Duffy. Lake County has 430.
Mr. Kennedy. So evidently
Mr. Duffy. I am sorry ; that is not correct ; 430 Federal gambling
stamps for Gary, and the total for Lake County is 939.
Mr. Kennedy. Evidently, all the machines of Sohacki and Welbourn
are not covered ?
Mr. Duffy. Apparently not.
Mr. Kennedy. But they are the only ones that operate outside of
Mr. Duffy. Of Hammond and Gary.
Mr. Kennedy. They have the total monopoly in Hammond and Gary
at the present time ?
Mr. Duffy. That is correct.
Mr. Kennedy. We are going into the operation of East Chicago ?
Mr. Duffy. That includes another company.
Mr. ICennedy. That is another company.
What is of great significance, Mr, Chairman, is not just the fact that
there was some $12 million in 5 years as collections, but how much
was made by the two individuals who were behind this operation.
I would like to have Mr, Thiede give us those figures, starting in
1954, what the returns of Mr. Welbourn and Mr. Sohacki show as
far as the amount of money that they have made from this gambling
type of equipment.
Mr. Thiede. In 1954, both Mr, Sohacki and Mi\ Welbourn reported
$160,228,56,
Mr, Kennedy. That is $160,000 apiece; is that right?
Mr. Thiede. Yes. In 1955 they each reported $424,007.
18464 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Just from the pinball machines in these two cities,
mainly in the two cities in Lake County, each one of them declared
on their income tax as income from these machines $424,000 ; is that
right?
Mr. Thiede. That is right.
Mr. Kennedy. Then in 1956 they incorporated in the middle of
1956?
Mr. Thiede. That is right.
Mr. Kennedy. So the figures from then on are
Mr. Thiede. Prior to incorporation, for the first 6 months of 1956,
they each reported $259,071.37.
The Chairman. $259— what?
Mr. Thiede. $259,071.37.^
Senator Capehart. Is this what they paid taxes on ?
Mr. Thiede. Yes.
Senator Capehart. How much was their tax on that ? That is, on
the $424,000, what was the tax?
Mr. Thiede. I don't have that figure here, sir. We can get that.
We have it in our files.
The Chairman. Was this gross?
Mr. Thiede. Yes; this is the gross.
The Chairman. They had operating expense out of that, to be de-
ducted from it, or was this net?
Mr. Kennedy. This is net. This is what they reported.
Mr. Thiede. As far as deductions for
The Chairman. In other words, this is the amount they paid taxes
on?
Mr. Thiede. Yes.
Senator Capehart. Did they pay their taxes?
Mr. Thiede. Yes.
Mr. Kennedy. This is the net income that they reported after
operating expenses.
Senator Capehart. And paid taxes on it.
Mr. Thiede. That is right.
Mr. Kennedy. Then they incorporated and they declared some
$259,000 for the first 6 months, so it would appear that they were
going to have an even more profitable year, but they were making
so much money they incorporated and for the second 6 months they
declared $24,000 apiece; is that right?
Mr. Thiede. They went on a salary. That is the salary they
received from the corporation, $24,000.
Mr. Kennedy. So after the middle of 1956, they went on salary
and a bonus ; is that right ?
Mr. Thiede. That is right.
Mr. Kennedy. In 195t, each one of them declared $100,000; in
1958, $115,000?
Mr. Thiede. Tliat is right.
Mr. Kennedy. All the rest went back into the operation of the
company and they started to make other investments; is that correct?
Mr. Thiede. That is correct.
Mr. Kennedy. That is of particular interest to us because so much
money was coming in they began to buy real estate around Gary,
Ind. ; is that correct ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18465
Mr. Thiede. Yes.
Mr. Kennedy. They separated their operation and formed a com-
pany called the St. George Realty Co. ?
Mr. Thiede. Yes. That was formed on March 1, 1958.
Mr. Kennedy. What was the relationship betwen the St. George
Realty Co. and their pinball operation?
Mr. Thiede. There was
Mr. Kennedy. Perhaps Mr. Dnffy could explain that part.
Mv. Duffy. We have to go back to the date of incorporation of
July 1956. The name of the cojiipany at that time was called the
Indiana Supply Co. That was a partnership between Mr. Welbourn
and ]Mr. Soliacki. When they incorporated in July 1956, they re-
named the company, calling it the Sunset Supply Co.
That continued in operation up until January of 1958, when they
started with the idea they were going to separate tlieir pinball ma-
chines and their operation from their other assets. So what they
did was they sold all their pinball machines to a new company called
the Star Supply Co.
The amount of money that they sold these machines for was, I think
$333,000
Mr. Thiede. $330,102.81.
Mr. Duffy. So this became a receivable on the books of the Sunset
Supply Co. Then they merged. The Sunset Supply Co. merged
with another company called the St. George Realty Co. That was
the surviving corporation.
So all the assets that they had accumulated over the years became
assets on the St. George Realty Co., while their assets of machines
of the pinball operation were remaining in the Star Supply Co.
Mr. Kennedy. And listed as a receivable on the St. George Realty
Co.? " ^
Mr. Duffy. And the receivable on the books of the St. George
Realty Co.
Mr. Kennedy. That is, by 1958.
Mr. Duffy. The value of the machines was then receivable on the
St. George Realty Co. So the profits made from the Star Supply
Co., the pinball operation, then were funneled in on this receivable
into the St. George Realty Co.
So there is a continual flow of money from the gambling type of
profits into the St. George Realty Co.
Mr. Kennedy. As a matter of fact, they purchased a large number
of pieces of property, including the piece of property that the post
office, the Federal post office in Gary, Ind., is on ? Isn't that owned
by this group ?
Mr. Thiede. Yes, it is.
Mr. Kennedy. Isn't it a fact that the money used to purchase the
building that liouses the post office was the money that was gained
from the illegal pinballs?
Mr. Thiede. Yes, sir.
Mr. Kennedy. Isn't it a fact that the Federal Government now pays
rent to this operation, this group, at the present time?
Mr. Thiede. Yes.
Mr. Kennedy. That is the St. George Realty ?
Mr. Thiede. Yes, sir.
18466 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Duffy. They pay $499.17 monthly rent on this particular
building.
The Chairman. What did they do — build a post office building
and lease it to the Government ?
Mr. Duffy. The post office building had already been built and
constructed. They purchased the land and the lease out from under
the prior owner and then collected tlie rent.
The Chairman. It is a lease-purchase project?
Mr. Duffy. Yes ; lease-purchase.
Mr. Kennedy. And now the Federal Government pays to this op-
eration $499.17 a month rent.
Mr. Duffy. That is correct.
Mr. Kennedy. That is for the building and for the land.
You have there a list, do you not, of other pieces of property that
they have purchased ?
Mr. Thiede. Yes, I do.
Mr. Kennedy. Could we have that placed in the record?
The Cpiairman. How many are there?
Mr. Thiede. There are nine buildings.
The Chairman. All right.
Do you have a list of it before you ?
Mr. Thiede. Yes.
The Chairman. That list may be made exhibit No. 2.
(List referred to was marked "Exhibit No. 2" for reference and
is as follows:)
Mr. Duffy. We give the total value of the buildings and land on
the balance sheet of the St. George Realty Co. The total value and
assets of the land and buildings owned by the St. George Eealty Co.
as of December 31 amounted to $588,783.72.
The Chairman. Does that include the post office building?
Mr. Thiede. That includes the post office building.
Mr. Kennedy. Mr. Duffy, did they also trade in stocks to a con-
siderable extent ?
Mr. Duffy. They traded in securities to a gi'eat extent. As of
December 31, 1958, they had on their books, St. George Realty Co.,
assets in securities, $145,475.55.
Mr. Kennedy. During 1957 and 1958, however, they had pur-
chased some 52,000 shares of stock for a total of $423,000; is that
right?
Mr.D UFFY. That is correct.
Mr. Kennedy. So all in all it w^as an extremely profitable and going
venture ?
Mr. Duffy. Yes, it certainly was and is.
The Chairman. Are these' the folks that were able, according to
the testimony here, to put the independent operators out of business
or the independent union crowd ?
Mr. Duffy. This is the group that yvas able to run the independent
union operator out of business and was able to take over the area and
now has a monopoly.
The Chairman. They are the ones that moved the legitimate
machines out, so to speak ?
Mr. Duffy. Yes, Senator.
The Chairman. And moved in the gambling machines?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18467
Mr. Duffy. That is right.
The Chairman. And they have a monopoly on them in that area;
is that correct ?
Mr. Duffy. That is correct, Senator.
Senator CArEiiART. Do they liave a union ?
Mr. Duffy. No, they do not. Senator.
Senator Capehart. They are not affiliated with any labor
organization ?
Mr. Duffy. I might say this, Senator : that they have another af-
filiate company which we are going into later in the course of these
hearings that does have union members, so there is a union relation-
ship here.
Senator Capehart. But their employees do not belong to the union ?
Mr. Duffy. Some of their employees do.
Mr. Kennedy. Are there any other figures there ?
Mr. Duffy. No.
The Chairman. Is there anything further ?
Mr. Kennedy. Margaret Hagler, Mr. Chairman.
The Chairman. Mi's. Hagler. Be sworn.
You do solemnly swear 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 ?
Mrs. Hagler. Yes, sir.
TESTIMONY OF MRS. MARGARET HAGLER
The Chairman. State your name, your place of residence, and em-
ployment or occupation.
Mrs. Hagler. My name is Margaret Hagler. I live in Westville,
Ind. I operate a restaurant.
The Chairman. You operate a restaurant ?
Mrs. Hagler. Yes, sir.
The Chairman. How long have you operated a restaurant ?
Mrs. Hagler. At the place I am now, just 3 months.
The Chairman. At the place you are now, 3 months. Did you
operate a restaurant somewhere else prior to that time?
Mrs. Hagler. In Lake County.
The Chairman. In Lake County ?
Mrs. Hagler. Yes, sir.
The Chairman. Where did you operate in Lake County ?
Mrs. Hagler. On U.S. 30, 3 miles east of No. 53.
The Chairman. How far ?
Mrs. Hagler. Crown Point.
The Chairman. Crown Point. How long did you operate that
restaurant ?
Mrs. Hagler. Eight months.
The Chairman. Eight months. Had you operated a restaurant
prior to that time?
The Chairman. Wliere?
Mrs. Hagler. In Michigan.
The Chairman. In Michigan ?
Mrs. Hagler. Yes.
The Chairman. At what place in Michigan ?
18468 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mrs. Hagler. Kalkaska, Mich.
The Chairjvian. How long did you operate that one ?
Mrs. Hagler. Two years.
The Chairman. How long have you been in the restaurant business ?
Mrs. Hagler. Nine years.
The Chairman. All right, Mr. Kennedy.
Mr. Kennedy. On June 18, 1958, you moved your restaurant from
Porter County, Ind., to a location on Koute 30, just east of Highway
63, at Merrillville, Ind. ; is that right?
Mrs. Hagler. Yes, sir.
Mr. Kennedy. That is in Lake County. Along with the equip-
ment that you moved, you brought your two pinball machines?
Mrs. Hagler. Yes, sir.
Mr. Kennedy. You had them in your other restaurant in Porter
County ?
Mrs. Hagler. Yes, sir.
Mr. Kennedy. Those two pinball machines were operated by Mr.
Albert Steele of Valparaiso, Ind. ?
Mrs. Hagler. Yes.
Mr. Kennedy. Prior to your opening your restaurant, did you
check to find the adequacy of your septic tank ?
Mrs. Hagler. Yes.
Mr. Kennedy. That was with the Lake County health authorities
and they cleared you on that ; is that right ?
Mrs. Hagler. Yes.
Mr. Kennedy. That will be of some significance as we go along.
On June 23, 1958, shortly after you opened the restaurant, did you
have a visitor from the Lake County prosecutor's office ?
Mrs. Hagler. Yes, I did. I had Walter Conroy.
Mr. Kennedy. That was on June 23, 1958 ?
Mrs. Hagler. Yes, sir.
Mr. Kennedy. Walter Conroy. Would you tell us what happened
in connection with his visit ?
Mrs. Hagler. I was in the back of the restaurant, and I had one
of the waitresses watching the front. She was 18 years old. He came
in and played the pinball machine and hit it for $1.50. She paid him
off. He asked for me. When I came out, he said, "Your girl just
paid off here. I want these machines taken out."
The Chairman. Your girl what ?
Mrs. Hagler. He said, "Your waitress just paid me $1.50. I want
these machines pulled out."
I said, "Well, she didn't know any better. She was told not to pay
off."
He said, "I can't help it. I want these machines pulled out."
I said, "All right, I will notify Al."
Mr. Kennedy. "Al" being Al Steele ?
Mrs. Hagler. Al Steele.
The Chairman. He was the owner of the machines ?
Mrs. Hagler. Yes. He said, "I will give you until Wednesday to
pull them out." That was on a Monday. So I called Al, Mr. Steele,
and he said, "Just leave them in and see what happens." So I left
them in.
The Chairman. "Leave them in and see what happens" ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18469
Mrs. Hagler. "See what happens." On Wednesday, Mr. Conroy
came back and Mr. Steele in the meantime had told me to get his license
number otf of his car when he come in. So I was in the back and I told
my girl, "When he comes, you call me and let me know." So on
Wednesday when he came I was in the back and the girl came and
told me. I had my little boy, who is 11 years old, get on the bicycle
and ride around the building and get his number, which I gave Albert
Steele.
When I came out, he asked why I didn't have the machines pulled
out. I said, "AVell, Al told me to leave them in." I told him Al had
financed me in the business, which he didn't. But I figured it would
help.
The Chairman. Al had what ?
Mrs. Hagler. Had financed me in the business.
The Chairman. Planned to be in the business ?
Mrs. Hagler. He had financed me in the business. But it wasn't
true. I just told him that, figuring that he would leave the machines
alone.
He said, "I don't care. I want no excuses. I want these machines
pulled. Don't you know I could arrest you for having an 18-year-old
girl pay me off?"
I said, "Well" — he said, "I will be back Friday and I want those
machines pulled out or I will smash them."
Mr. Kennedy. He said he would smash them if you didn't ?
Mrs. Hagler. Tliat he would smash them. Mr. Conroy got back at
9 o'clock. Al came in at 8 :30 in the back of the restaurant. I have a
big garage and he drove his car back there, him and his boy. We
waited for Mr. Conroy to come. He came with a deputy sheriff, a
colored man. He walked in and asked me how come I hadn't pulled
the machines out.
First he asked where Steele was, and I said, "He is just around,
looking at his business." Al came out of the back room. I didn't
listen to what they had to say, but when they got over by the door,
Conroy must have showed him his badge because I heard Al say, "I
can buy those in the dime store for 10 cents. They don't mean nothing
to me."
They said something about going to the courthouse and they all
left together. About 45 minutes later, Albert Steele came back and
said, "Margaret, we will have to pull the machines out. I don't want
to cause you any more trouble."
I said, "What's wrong?" and he said, "Well, they will get you for
letting that 18-year-old girl pay oft'."
Mr. Kennedy. That is the excuse he gave at the time ?
Mrs. Hagler. Yes, at the time. But really, I undei^tood later that
it was the health authorities wouldn't give me an OK on my restaurant.
Mr. Kennedy. You understood later on that the deputy, Mr. Con-
roy, had said to him that he could arrange that the health authorities
wouldn't OK your restaurant ?
Mrs. Hagler. Would not OK my restaurant.
Mr. Kennedy. Saying that the septic tank was not adequate ?
Mrs. Hagler. Just wouldn't OK it.
Mr. Kennedy. That is, if they wouldn't take the machines out ?
Mrs. Hagler. They didn't specify one thing individual, but they ■
36751— 59— pt. 53 4
18470 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. But we will have more testimony on that.
So the machines were removed ; is that right ?
Mrs. Hagler. We put them in the back and Al came a few days later
and picked them up. He told me at the time, "They will bring their
machines."
Mr. Kennedy. Who told you that ?
Mrs. Hagler. Al Steele.
The Chairman. Told you what ?
Mrs. Hagler. That they would bring their machines, I asked
what I should do, and he said, "Let them put them in. There is noth-
ing else we can do." So I said, "All right."
A few days later a man came in whose name I don't know, though
I know him when I see him, and he looked around and said, "No pin-
ball machines ?" and I said, "No, no pinball machines."
He said, "How would you like to have some?" I said, "I am not
allowed to have none. Conroy pulled mine out."
He said, "You let me worry about Conroy," and I said, "No, I don't
want to have the trouble."
He said, "Look, we can either"
Mr. Kennedy. Would you repeat that, please ?
Mrs. Hagler. He said, "I can say, 'Can I put these machines in' or
'I am going to put them in'."
The Chairman. He told you he could say "Can I put them in?" or
tell you that he is going to put them in ?
Mrs. Hagler. Yes. He said, "As long as we are doing business
together, I would rather say 'Can I put them in.' "
I said, "I take it I don't have any other choice." So I said to him,
"Well, I figure I might as well try to patch up."
I knew I had to live there and get along with them. I told him,
"I don't know what kind of setup you have here. Wliere I come
from, we can take our pick from who we want. I didn't know we
had to take from one."
Previous to that, when Conroy was in, I mentioned to him on a
Wednesday, "If I take my pinball machines out of Gary, would it be
different?'*' and he said, ''We never have trouble with our Gary pin-
ball machines."
The Chairman. Never have trouble what ?
Mrs. Hagler. "With our Gary pinball machines."
Mr. Kennedy. Meaning if you, instead of getting your machines
from the Porter County, if you got your machines from Gary, Ind.
Mrs. Hagler. There would be no trouble. So when I talked to this
contact man he told me. When they put the machines in, I told him,
I said, "Well, you wasn't very much of a man; otherwise you would
come down and sit down and talk to me and tell me the setup and
we wouldn't have this trouble to start with."
He asked how long I had been without my machines and I said a
little over a week. He said seeing that he was at fault and it was
them that made the mistake, that he would let nie have whatever I
took in the first week, 100 percent, the whole thing.
Mr. Kennedy. Listead of splitting it?
Mrs. Hagler. Instead of splitting it, and which he did.
Mr. Kennedy. He hadn't showed up the day after your other ma-
chines were removed.
iMPUOPiou A("rivi'rii':s in 'pmk i.amoh fikfj) IS 171
Mrs. IiA<M,Ki{. Thill , iiikI bccMusc. Iio Imdii'l. ssii <l<)\vii mihI (iilUcd (o
mo wlicn I lirsl, ('o\\n\ in iiiul told mo vviiiit (lie scliii) was.
Ml-. Kknnkdv. So ho iiUowod you to koop (ho whoU^ liisl wook of
prolils; is thai rijj;li(/^
Mis. IIaomik. Yos.
Mr. Ivi'.NNi';i>Y. Is thai. ri;2;]ii '^
Mis. IIaomoh. Yos.
SiMialor ( ^M'l'.iiAK'r. Wlio was ho'^
Mrs. FlA(iM-;i{. Their coiilaciman.
Soiialor (^M'KiiAK'r. What washisiiamo?
Mrs. IIaolkk. I loariiod hiior his uaiiio was Kandalh
Sonalor (l\ri:iiAH'r. AVhai cojnpaiiy |)iji, iho machines iii'^
Mrs. IlA(;iii',i{. Thoy wonhhTl, <j;ive yoii no iiaino.
Senaior ( /ArKiiAK'r. WasiTl, Ihero a naino on 1 hem ?
Mrs. 1Ia<ii,ki{. No. Thoy woiihhi'l. <j;ivo yoii no naine, no nolJiIn^,
jns( a (elephoiio niimlx'r.
Senaior ( 'ai'KIIAht. If yon liad lo service I hem, whal did yon (h)?
Mrs. IIa<ii,i:i{. Tlial, was jnsl, I he reh'|)horie nnmher.
Senaior ( 'Ari'.iiAKr. Yon diihi'l, know who owned llie machine'^
Mrs. I Ia<ii,ku. No, sir.
Mr. K'knnkdv. Isn'l, i(, a fad, iJial nohody in liake ( lonnly knew who
owned all l.lieso machinos that were i)la(',e(l 'i
Mrs. IlA(n;Ki{. No, IJioy did iiol,.
Mr. Kmnnkdv. In no case was liie name of Iho company ever jjjiven
lo anyhody '^
Mrs. IIa<im:i{. II, was never ji;iv(Mi.
Mr. Kknnkdv. So Iho only (hin^ you were ;n^ivo,n was a loloi)lu)no
ininiher and oven I ho man who came, around l.o visil, wouhhi'l, <;^iv(^ his
name, ordinarily ?
Mis. I1a(!i,ki:. No.
Mr. KKNNi';nv. So Iho only Ihin/j^ you wore, over <j:;ivo,n was a, l.olo,-
pJioiK^ nnmher?
Mrs. IlAOKKit. Thai, is all.
Mr. Ki;nnki)V. Aclually, nobody know n|) iinlil Iho j)resenl, lime, Iho
lasl. half hour, who aclually owned all of I hose machines'^
Mrs. IIa(H-i;i{. No, nohody.
TJK^ (jiAiitMAN. Did 111*', prosociilino; a,l,(,ornoy know aboul, that?
Did ho know Mial, you were boin«r compelled Ix) Uikooul. your niaohinos
and lo replace I, hem wilh I hose o(. hers!'
Mrs. IIa(u,ki{. Mr. (lonroy fold m(^ ho was workin<ij oul, of Iho pros-
ocul.in^ alfornoy's ollico. lu^ was I h(^ chief invosli^alor.
The (JiiAiKMAN. In olhor words, llu^ man Ihal, arran<]^o,(l all of Mii.s
and compelled you lo do il, was (.onroy, who you undorsLood was out
of Mie, prose,cul-in<^ affornoy's ollico !?
Mrs. I Ia(u,kk. Yes.
The ( JllAIl{^rAN. I assumo wo can show Mial,.
Mr. Kknnkdv. Yes.
Th(< (IiiAiitMAN. Tlions will bo no doubf, aboul, l,ha,l,, Ihal, h(i was wilh
iJio proseciilin^ all,orn<>,y's olIi(M',.
Mrs. IIa(U,ki{. Yes, sir.
Th(^ ( /iiAiKMAN. II(^ is l,ho man who I allied l,o you and lold you you
had lo lake Iho machinos out?
18472 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mrs. Hagler. Yes. And he was the one — I also asked if I took my
machines out of Gary if it would be different, and he said yes, he
never had trouble with the Gary machines.
The Chairman. In other words, if you would get certain machines
in there, you would have no trouble. After you got these machines
in there, did you have any trouble ?
Mrs. Hagler. No, I didn't have any trouble until Mr. Sinclair
showed up.
The Chairman. Are you talking about the investigator?
Mrs. Hagler. Yes.
The Chairman. Then they began to give you trouble?
Mrs. Hagler. They got sacred, I guess.
The Chairman. What happened ?
Mr. KJENNEDY. Relate about his visit and what happened. He
came to see you on December 10, 1958 ?
Mrs. Hagler. Yes.
The Chairman. That is the investigator for the committee ?
Mrs. Hagler. Yes, sir.
The Chairman. All right.
Mrs. Hagler. After he left, of course, me living there, I had to call
them. I called the number they give me, and told them that Mr.
Sinclair was down to see me, and they said, the woman that answered,
"I will get ahold of this man and send him over and he will talk to
you." So within a short while he was over at the restaurant.
The Chairman. Who came ?
Mrs. Hagler. Randall, as far as I know his name, the contact man.
The Chairman. Randall, their contact man, came.
Mrs. Hagler. Of course, when Sinclair was there, he didn't tell
me what he was there — I didn't know exactly what he was there for.
He was just kind of questioning me on my jukebox machines and
pinballs. Randall asked who it was and I told him, and he said,
"Well, don't show him your books."
Well, at the time I didn't have my books. My bookkeeper had
them. I couldn't show them if I wanted to. I asked why, and he
said, "That is income tax."
Mr. Kennedy. He said it was the income-tax people investigating
you?
Mrs. Hagler. Yes. I said, "Oh?" He said, "Just don't show
him your books." I said, "I don't care if they see my books." He
said, "Just don't show them your books, and don't tell them nothing."
I said, "All right."
So we got along pretty good then until Mr. Kennedy showed up.
The Chairman. And he interfered ?
Mrs. Hagler. Yes.
Mr. Kennedy. That was on December 17, 1958 ?
Mrs. PIagler. Yes. And as soon as he left, I Imew then what
they were, what they were for, and so I called again and told them
Mr. Kennedv had been out to see me, and she asked, "Are you sure?"
and I said, "Yes."
She said, "Well, I will send him right over." So he came over
and he said to me, "Are you sure it was Mr. Kennedy?" and I said,,
"Yes" ; and he said, "Don't show him your books."
IMPROPER ACTIVITIES IN" THE LABOR FIELD 18473
I said, "Look, don't kid me. I Iniow who those guys are. They
are the Kacket Committee out of Washington. They are not income-
tax guys. I don't care if they see my books anyway." I said, "I
don't know who this Anderson is." I knew who Conroy was, but
they kept asking — Mr. Sinclair kept asking me about Anderson,
and I didn't know who Anderson was at the time. He is a jukebox
man.
But he told me that it was another guy trying to push in on Lake
County, that them two was kind of feuding.
Mr. Kennedy. When Mr. Sinclair had asked you about the opera-
tion of Mr. Anderson, and Randall told you that was an outside
group
Mrs. Hagler. That it was an outside group trying to move in.
Mr. Kennedy. Actually, Mr. Randall and Mr. Anderson both work
for the same company, as we will show, Mr. Chairman, but they were
trying to cover up the activities of this syndicate operation.
Mrs. Hagler. I told him they said something about subpenaing
me, and he said, "Well, you better keep your mouth shut because it
won't do you any good to talk."
I said, "Well, if they subpena me, I am not going to get up there
and lie. You guys put me in the middle long enough. Somebody
else is going in there and it isn't going to be me."
He said, "Well, it is your word against mine," and I said, "Well," —
and he said, "Your word against Conroy's, too."
I said, "You ask Conroy if he remembers the day we stood at the
pinball machine and I asked him if I got them out of Gary if it
would be different. Ask him if he remembers three men sitting at
the table. I had them there as witnesses." But I didn't. That was
a bluff I pulled.
The next day I was in the back and the girl came out and called
me and said Conroy wants to see me, and I went out, and he had
the machines halfway out. He said, "I am pulling the machines
out"; and I said, "You can't touch those machines. You didn't see a
payoff." He said, "You caused me enough trouble." He said, "What
did I tell you?"
I said, "I don't know what you told me. You tell me one thing
and somebody else tells me something." I said, "What about my
dimes?" and he said, "Those diines will go to charity." So he took
the pinball machines out and asked would I please hold the door open
for him.
So then I called the syndicate and told him their machines had been
pulled out by Conroy. That was 10 o'clock in the morning. She
said, "I will send somebody right over." He didn't get over until
12 o'clock that night.
I remarked to my girls at the time, for a man who lost two machines
he sure doesn't seem excited about it or anything. So when he came
in at 12 o'clock he apologized for being so long. So we went in the
back and we was talking, and I told him, "Who pulled the machines?
Let's not kid ourselves no more. You know who pulled the machines.
Conroy pulled the machines."
He said, "Do you know I just lost two machines?" and I said, "You
didn't lose two machines. I am not so dumb. They are in Conroy's
office. Go get them. But I will give you some friendly advice."
18474 IMPROPER ACTIVITIES IN THE LABOR FIELD
He said, "What is that?" and I said "Don't ever use them because
Kennedy and Sinchxir took the numbers off of them." I said, "How
about my dimes, my payoff?" and he said, "Well, let's wait a few
days and if you don't get them back I will see that you get your
payoff's."
The Chairman. You are talking about your share of what was in
the machine ?
Mrs. Hagler. No. I was talking about the payoffs.
The Chairman. What is the payoffs ?
Mrs. Hagler. When somebody hit the machine.
The Chairman. On what?
Mrs. Hagler. When somebody hits the machine.
The Chairman. You had been paying out payoffs and hadn't
gotten your money back ?
Mrs. Hagler. He said, "I will see that you get your payoffs even if
you don't get the machines back in." But I never did. I never heard
no more of the dimes or nothing. I don't know what become of them.
The Chairman. So you lost the payoff's ?
Mr. Kennedy. And the dimes.
What happened after that ?
Mrs. Hagler. Then after that, about 2 nights later — well, Conroy
said to me before he went out the door, "I am going to get even with
you." So about 3 nights later some boys, young men, from Merrill-
ville and Gary, just right around that area, started coming in and
asking for girls, and I asked them where they come from and who sent
them. They wouldn't say.
I talked to them in an nice way. I told them, "You just got the
wrong idea." On a Friday there was a truckdriver left that restau-
rant and he told me this later, that the sheriff's department pulled him
off the side of the road and asked if he knowed me, and he said, "Yes,
I have loiown her for a long time. Why ? "
He said, "Well, what kind of place does she run down there? I
heard she is rmming a place down there." He said, "Look, I know her
for a long time, in fact I know her family, and you better not let her
hear you say that." He tried to get back to tell me, but he didn't have
a chance.
Mr. Kennedy. Wliat else did he say to him ?
Mrs. Hagler. This is another one.
Mr. Kennedy. All right.
Mrs. Hagler. So Friday these two boys come in and sat down and
ordered a meal and pretty soon two more came in and sat down. The
waitress took the order and I walked over and sat down at the table
and drank a cup of coffee. One of them motioned to me to come over.
I went over and he ask for a girl.
I said, "^Vliere are you from?" and he said, "From around." I
said, "Wlio sent you?" and he said "Nobody in particular." I said
"Just what makes you think you can get a girl here?" and he said, "I
just heard." I said, "You just get up and get out of here and don't
you ever come back in here."
He looked over and seen some guys at the table and said, "Oh, I
guess I am not one of them." When he did that, I slapped him a few
times and told him to get out and he still wouldn't. So I went in the
kitchen and got my blackjack. I started back and a couple of truck-
IMPROPER ACTIVITIES IN THE LABOR FIELD 18475
drivers said, "Margaret, don't hit him, we will put him out for you,"
and I said, "All right." So they made him get up and leave.
That was on a Friday. Right away I went and called the State
police and I told them. I figured these boys were being sent over
]ust to aggravate me and get me mad, I suppose. I said I had threat-
ened to beat one of them with a blackjack. They said, "Well, do
you want us to come down?" I said, "There isn't any sense of your
coming down here and sitting in front ; no one is going to get smart."
He said, "Well, if anything happens, let us know." I said "All
right." So the next night was a Saturday.
Mr. Kennedy. What about the truckdriver that was the friend of
yours that was driving oil' ?
JMr. Hagler. Then this one truckdriver, he liad been eating with me
for about 2 years or so. I have known him for a long time. He left
the restaurant about 4 o'clock in the morning. The sheriff's car pulled
him off the side of the road.
I was talking to him and he said it was Conroy that got out of the
sheriff's car and went to the ti-uck. He asked him, "Are you going
with Maggie?" and, of course, I had told him about the trouble. So
he kind of figured it was all in on this, and he said, "Yes, if you want
to call it that." He just wanted to see what they would say. He
said, "Yes, if you want to call it that."
They said, "Well, we don't want you to go witli her." He said,
"Why?" and they said, "Well, we just don't want you to. There
is going to be trouble down there."
He said, "^Vliat kind of trouble?" and they said, "That is what we
mean, it is none of your business. We don't want you down there."
That was before the boys started coming in.
He said, "Well, I will go along with her anyway." Tliey said, "You
have an awful big truck here, haven't you," and he said, "Yes."
"There are a lot of rough roads between here and Ohio."
He said, "^^^at do you mean ?"
They said, "Well, we would hate to see this in a big heap with you
in the middle of it. Wouldn't you ?"
Mr. Kennedy. This was a representative of the sheriff's office say-
ing this to the truckdriver ?
Mrs. HaCxLER. Yes, to the truckdriver.
Mr. Kennedy. That it is a rough road between there and Ohio and
they
_Mrs. Hagler. They said, "We would hate to see this in a big heap
with you in the middle of it."
They said, "Do you understand what we mean ?"
And he said, "Yes, you make it plain enough."
Mr. Kennedy. Did he stay away from you then ?
Mrs. Hagler. Yes. He never came back any more until I was
chased out of the place.
Mr. Kennedy. Why did he tell you he was staying away ?
Mrs. Hagler. Because he was afraid of them. Then I took my little
boy, had my sister take him to Michigan, and stayed there^ for 2
months.
Mr. Kennedy. Wliat happened on that Saturday ?
Mrs. PIagler. Then on that Saturday — I was closed on Saturday
afternoon because I didn't want drunks coming on Saturday night.
18476 IMPROPER ACTIVITIES IN THE LABOR FIELD
I was close to a beer garden and close to town. I would close on
Saturday afternoons and open Sunday evenings.
Mr. Kennedy. You always closed Saturday afternoons because you
didn't want these people ?
Mrs. Hagler. These drunks, no.
So I had done my shopping and I got back, and a couple of the
girls were helping m,e clean the restaurant up. It was after dark and
I pushed all the tables up close to the door. There was a couple of
cars circling then, and I figured that is what they were, some of the
boys, and I went in the kitchen and got my blackjack and laid it in
the kitchen by the door. They circled the building a few times and left.
In the meantime, a couple of trucks pulled in and I run outdoor's
and asked if they wouldn't stay around a while until I seen what
happened. They said, "O.K.," and they pulled their trucks around
the back and I let them in the back way.
We sat there watching television and I was finishing cleaning the
kitchen.
They circled a few times and left.
It was about 12 o'clock and my little boy asked if he couldn't please
stay up and watch television. He didn't have to go to school the next
day, and I said yes, he could. He sat watching television.
I went around to the kitchen to make some tea.
Frances, one of the girls, was in front combing here hair. She was
also playing the jukebox.
This car pulled up and this guy got out and knocked at the door,
and she went to the door and said, "I am sorry, we are closed."
He said, "I am looking for somebody."
She said, "There is nobody here, we are closed."
He said, "I want to see the boss."
He pushed in and walked into the kitchen. He asked me for a
girl, and I said, "I want to know where you are from."
He said he was from around there. Finally he said Merrillville.
I said, "I want to know who sent you."
He said, "Nobody."
I said, "You must have heard it from someplace."
He said, "Nobody in particular."
I said, "What gave you that idea, then?"
And he said, "I just know I can."
I said, "You really think you can get one ? "
And he said, "I just know I can."
I started to go back to call the two truckdrivers, and he started
calling me back, and the boys jumped him at the door as he started
back, or the one did, and when he got him to the door he stuck his
hand in his pocket and he said — he cussed him and he said, "I will
kill you," and the guy got scared.
He grabbed the blackjack that I had laid on the table and hit him
with the blackjack and hollered for Lee to help him put him out.
Wlien Lee came out, he either got kicked or something, but he got
knocked down. He never did get in the fight. The one truckdriver
chased him out. He got out and the guy ran as far as the car and
turned around and hollered something else. The truckdriver started
to hurl the blackjack at him, and the guy kept running down the road.
I got back and called the State police.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18477
Mr. KENNEDY. And shortly afterward they preferred charges
against the tnickdrivers?
Mrs. Hagler. Yes ; the State police came and took statements, and
the two boys said, "We will stay here for a while until you get this
settled," and I said, "Okay."
In the meantime, William Jones, the constable, came down from
Merrillville and arrested them for assault and battery.
Mr. Kennedy. Arrested the truckdri vers ?
Mrs. Hagler. The two truckdrivers.
So I went their bond. They had them up for $1,000 apiece, and I
went and got them out. The bondsman — of course, I give him the
$200 and the $20 under the table, I suppose you call it. They wanted
$20 extra, when they come to collect the money.
And they called me up later and asked what lawyer I had. I
wouldn't tell them. They wanted me to get a lawyer out of Gary,
which I would know to be very foolish.
So I got one out of Knox.
So I heard then that they had another warrant out for the boys for
attempt to kill. So I told my lawyer, that was on a Wednesday, and
he called the courthouse and asked if there was another warrant out
for the boys, and they said, "I don't know, we will check."
They checked and said no. They said, "No, there isn't, and there
can't be until after the first of the year, because the judge isn't in."
So the boys were supposed to have been over at the justice of the
peace at 4 o'clock that Friday afternoon, and at 3 the sheriff came
m and arrested them again for attempt to kill. Here all the time they
had had that warrant, but they wouldn't tell the lawyer that they had
this new arrest warrant for the boys.
Mr. KJENNEDY. So they arrested them for attempt to kill ?
Mrs. Hagler. For attempt to kill ; and $10,000 bonds. The lawyer
called the Teamster Union out of Indianapolis, San Soucie, and he got
in touch with somebody and right away they cut it down and I got
them out for $500— $200 apiece, and then $100— just $100.
Mr. Kennedy. So what happened after that ?
Mrs. Hagler. Then they kept coming in and saying they were going
to arrest me for this and arrest me for that. Then I was scared. I
took my little boy to Michigan. So I just, you might say, got up and
walked out.
Mr. Kennedy. You sold ?
Mrs. Hagler. Yes. I never got no money out of it. I sold it. I am
supposed to get it, but I never have.
Mr. Kennedy. You turned it over to somebody else?
Mrs. Hagler. Yes. She was supposed to give me the money. She
said she would get hold of the syndicate and see if they would give the
money, but she said they kept giving excuses.
Mr. Kennedy. Did she have a conversation with Conroy?
Mrs. Hagler. Yes. After I moved. I moved on the 3d and 4th of
January. I gave her the telephone number and said, "If you want
pinball machines call this number and they will give them to you."
She called, and I was there when she called. They must have told
her that they wasn't going to give her no pinball machines, and she
said, "Well, Margaret don't own this anymore." She said to me,
"They want a bill of sale and they want to see the contract and they
18478 IMPROPER ACTIVITIES IN THE LABOR FIELD
want to see your name off the building before they give the pinball
machines."
I left and I came back the 9th of January and she had pinball ma-
chines. I asked about it and she said Conroy had come and talked to
her and told her that if I had been there 10 years I wouldn't have got-
ten pinball machines, that I had caused too much trouble.
Mr. KJENNEDY. That was Conroy from the prosecuting office ?
Mrs. Hagler. Yes, sir,
Mr. IvENNEDY. But a few days later you sold it ?
Mrs. Hagler. Yes. I went back the 9th and they were in. I left
there the 4th and when I went back the 9th they were in there.
Mr. Kennedy. So within 5 days at least they had the machines in
again ?
Mrs. Hagler. Yes.
Mr. Kennedy. And she had had a conversation with Conroy and
she said if you had remained the owner she wouldn't be able to get
machines ; is that right ?
Mrs. Hagler. That is right.
Mr. Kennedy. So you sold out and moved to another county ?
Mrs. Hagler. Yes.
Mr. Kennedy. And you have a restaurant there now ?
Mrs. Hagler. Yes.
Mr. Kennedy. And everything is happy ?
Mrs. Hagler. I guess so.
Senator Capfhart. This all happened after Kennedy and Sinclair
visited you ?
Mrs. Hagler. Yes. They got scared. That is the reason all of that
started, I know it Avas.
Mr. Kennedy. You have shown a lot of courage.
Senator Capehart. You don't belong to a union ?
Mrs. Hagler. No, but I think I will join one.
The Chairman. Thank you very much.
Call the next witness.
Mr. Kennedy. Mr. Albert Steele.
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. Steele. I do.
TESTIMONY OF ALBERT STEELE
The Chairman. State your name, your place of residence, and your
business or occupation, please.
Mr. Steele. My name is Albert Steele. I live at Kural Route 4,
Valparaiso, Ind. I am in the carnival business and I am in the coin-
machine business.
The Chairman. How long have you been in such business, Mr.
Steele?
Mr. Steele. Well, I have been in the carnival business since about
1958. I worked at Magill-Berry Co. for 17 years. During the process
of being in the carnival business I bought a penny arcade.
The Chairman. You bought a what ?
Mr. Steele. A penny arcade.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18479
And through having these penny arcade machines ai-ound my home-
town, I didn't have anything to do Avith them in the wintertime and
I phiced them in some of the bowling alleys and skating rinks, and
so forth, and in that way I got into tlie coin-machine business.
The Chairman. Did that include jukeboxes or just the pinball
machines ?
Mr. Steele. Well
The Chairman. When you say the coin machine business
Mr. Steele. The coin machine business ; that was mostly games.
The Chairman. Gambling machines ?
Mr. Steele. Not to begin with, no.
The Chairman. Not to begin with. Later ?
Mr. Steele. Yes.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. During the first few years you had just this arcade
equipment; is that right 5
Mr. Steele. That is right, sir.
Mr. Kennedy. And then these gambling type pinballs began to be
introduced into the area ?
Mr. Steele. That is correct.
Mr. Kennedy. So in order to compete you also began distributing
the gambling type of equipment ?
Mr. Steele. Well, my locations were approached by my competi-
tors, and they know that there is more money to be made with gam-
bling machines, or pinballs, as you call them, than there is with legiti-
mate machines. So to keep my business, I naturally said that I could
and would put in the bingos. Keally, we should call them bingos
or eight-balls.
Mr. Kennedy. The gambling type of equipment ?
Mr. Steele. Bingos.
Mr. Kennedy. That is correct even though the gambling type of
equipment was illegal at that time ?
Mr. Steele. I don't think it was. We are probably going to have a
decision on that by the Indiana Supreme Court.
Mr. Kennedy. The gambling type of equipment
Mr. Steele. If you can use them for gambling. But you don't
have to.
Mr, Kennedy. You weren't distributing them for ornaments.
Mr. Steele. No, I am a businessman.
Mr. Kennedy. Then it was payoffs, was it not ?
Mr. Steele. If they wanted to, they could. They didn't have to.
Mr. Kennedy. That is the purpose, is it not ?
Mr. Steele. We have other types of machines.
Mr. Kennedy. I am talking about these machines.
Mr. Steele. You can gamble on them, yes.
Mr. Kennedy, That is the purpose.
Mr. Steele. I think they are more or less designed for that ; yes.
Mr. Kennedy. More or less ? It is more than less. That is the kind
of equipment it was, as you described yourself, gambling type equip-
ment for the purpose of gambling,
Mr. Steele. I will concede.
The Chairman. You didn't use those machines until you ran into
the gambling competition ?
18480 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Steele. I didn't know what they were. I do not gamble myself.
(At this point Senator Church withdrew from the hearing room.)
The Chairman. So when you found you were running into that
type of competition, you tried to meet it ?
Mr, Steele. I did ; that is exactly right.
The Chairman. And you got the same type of locations ?
Mr. Steele. That is right. I would have lost my locations had
I not.
Mr. Kennedy. You had pinball machmes in Maggie's truck stop,
did you not, in Porter County ?
Mr. Steele. That is correct.
Mr. Kennedy. In June 1948 she had a restaurant in Lake County ;
is that right ?
Mr, Steele. That is correct.
Mr. Kennedy. And she brought your machines with her ?
Mr. Steele. That is correct.
Mr. Kennedy. Within a couple of weeks she was visitd by Walter
Conroy, as has been testified to, and then she got in touch with you ;
is that right ?
Mr. Steele. That is right.
Mr. Kennedy, Subsequently it was arranged that they were going to
come down and pick up the machines, Conroy notified her he was
going to pick up the machines on Friday morning ?
Mr, Steele, That is correct,
Mr, I^NNEDY. You decided you would go down also ; is that right ?
Mr. Steele. He said he would be down there to break them up, so
I took a ball bat down with me, and I thought if we were going to
have a party I would join him.
Mr. Kennedy. You brought a ball bat with you ?
Mr. Steele. I sure did.
Mr. Kennedy. Before you went down there, did you call the county
prosecutor's office in Lake County ?
Mr. Steele. I never contacted the prosecutor's office. I did go to
the Lake County jail to see the sheriff to see why I as a citizen could
not operate in Lake County when our whole northern part of the
county was filled with our competitors.
Mr. Kennedy. Wliat did he say ?
Mr. Steele. I did not see him. He was on vacation.
Mr, Kennedy, Did you talk to anyone there ?
Mr. Steele. I talked to some fellow. I don't know what his posi-
tion was. He was an elderly man,
Mr. Kennedy. Did you tell him there would apt to be trouble ?
Mr. Steele. I did.
Mr. Kennedy. Did he seem interested ?
Mr. Steele. I think so.
Mr. Kennedy. Did he come down the next day ? Did anybody come
down ?
Mr. Steele. No. To my knowledge, at the time I didn't know any-
thing about it, but I heard that there was a car followed us back to
the Lake County jail,
Mr, Kennedy, Tell us about what happened on Friday, You ar-
rived there Friday and talked to Conroy ; is that right ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18481
Mr. Steele. I arrived down there and I parked my car in the back
end of Maggie's restaurant. I waited for a while and this Conroy
showed up. I didn't know who he was. I thought he was just my com-
petitor. I didn't realize he Avas out of the prosecutor's office until we
got into quite a hassle.
At that time he flashed a badge on me, and I told him that they could
be bought in any dime store, that the badge itself didn't mean anything
to me.
He said, "Then I will show you how much it means to you. You are
under arrest."
I told him to forget about it. I still thought he was my competitor.
I didn't think that the prosecutor would go this far. I have never
worked against anything like that. I have never been in Lake County.
The fact is my machines were moved into Lake County when I was
up at my summer place in Wisconsin.
But when I came home and found out that they had threatened Mag-
gie and they were going to make me get out, I thought I might as well
have a test case of this.
There are a lot of their machines in my county. Maggie moved into
a used car building. There was never a restaurant there and there
had never been pinballs in there before. It was just 3 miles over
the county line.
In Indiana, I can't see a county line on the ground. There is no road
there, no line. So as a citizen I thought I had a right to stay in Mag-
gie's truck stop.
Mr. Kennedy. What happened in your conversation with Conroy ?
Mr. Steele. He told me I was under arrest. I told him what grounds
would I be arrested on, that I owned the machines, but I, myself, hadn't
done any gambling with them, that I had a right to put them in on
lease.
He said, "Well, we are putting you under arrest. We are going to
take you to Crown Point and book you."
We got outside the door. My brother had come over in another
car. I didn't expect him, but he knew I was going over to Lake County.
So he, as a special police of Valparaiso, had a badge. It didn't mean
anything in Lake County, but he thought he would run a bluff, and he
showed it to Conroy and said, "Why is this man under arrest 2"
"You keep out of this or I will have you arrested."
I winked at my brother. I knew they would follow me over to
Crown Point. As I went to Conroy 's car, there was a large colored
fellow in there. I thought, "This must not be the prosecutor's office.
I am going to the sand dunes in the trunk of a car."
I knew my brother was behind. We started to Crown Point. There
was quite a silence for a while. Filially they turned around and asked
me if I didn't know any better than to come to Lake County.
I said I thought as a citizen I had a right over there.
They said, "Well, you are pretty dumb, aren't you ?"
And I said, "Yes, I am just a big dumb farmer, and I have a lot
to learn."
They began to berate me about coming across that line, that I should
stay in my own territory or there would be trouble, and they would
take me over and arrest me.
18482 IMPROPER ACTIVITIES IN THE LABOR FIELD
I said, "Well, you go over and book me. That is just fine. I know
it will be a false arrest and I will get myself out of this and I will
sue you for false arrest."
Well, there was quite a bit of silence until we got within about 200
feet of the courthouse. They stopped the car. Nobody seemed to be
in a hurry to get out.
I said, "Well, are you going in and arrest me ?"
They said, "Well, you know, you are pretty sure of yourself. You
don't seem to be afraid."
I said, "I have nothing to be afraid of. I have nothing to hide."
They said, "Well, if we can't get at you one way we will get after
Maggie. We will get you in another way."
I said, "What do you mean by that ?"
And they said, "You know, there was a young girl over there that
made a payoff."
I said I realized that.
They said, "We will go back and arrest that young girl. We will
arrest Maggie for having a gambling establishment and also put her
out of business."
I said, "What do you mean put her out of business ? There is a lot
of gambling in Lake County. I see it every time I am over here."
They said, "That is all right. She doesn't have a health i^ermit for
that restaurant and her septic tank isn't big enough to have a restaurant
on that highway, so we will put her out of business."
What could I do? Maggie was a friend of mine. I did business
with her for some time in my own county. I couldn't see her hurt,
so I consented to take my pinball machines back to Porter County.
They said, "You get back and unplug those things and get them
out."
I said, "The fact is that very morning I was leaving to Wisconsin
because I had some carnival equipment in Milwaukee and I had to go
up and check on it."
They said, "We will give you a couple of days, but you unhook them
right away and get them in the backroom."
I came back in 2 or 3 deays and I loaded up my machines and took
them back to Porter County. I did have a pool game in her place and
I said, ""What about this pool game?"
And they said, "Anything like that is perfectly all right. We just
don't want any of your bingos over here."
I said, "All right, as we understand each other, I will get out of
Lake County."
The Chairman". You got your gambling machines out.
Mr. Steele. I got my bingos out.
The Chairman. We call them gambling.
Mr. Steele. All right.
Mr. Kennedy. Not only were you having competition from other
companies, but what was your reaction to the law enforcement officials
behind it? Did you ultimately learn this was a common procedure
and practice?
Mr. Steele. I found out later that anybody who didn't seem to have
an OK couldn't do business over there.
Mr. Kennedy. When you are talking about "OK," OK from whom ?
Mr. Steele. Whoever gives the OK.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18483
Mr. Kennedy. I mean from the Lake County authorities.
Mr. Steele. Well, all I know is that there was the badge and the
credentials that were flashed on me from the prosecutor's office, and
the reason I know that is that I didn't tliink that the fellow could
possibly be from the prosecutor's office. I thought he was just an-
other one of my competitors.
Mr. Kennedy, ^V]\y didn't you think he would be from the public
prosecutor's office?
Mr. Steele. I never heard of anybody in law enforcement doing a
thing like that to anybody.
The Chairman. Are you convinced that he is using the position
of his office in order to keep you out and to permit others to operate ?
Are you convinced of that?
Mr. Steele. In my heart I am; yes.
The Chairman. That is what it all adds up to; isn't it?
Mr. Steele. That is what it adds up to as far as I see it. He also
told me when I was resisting arrest that if he was 10 years younger
he would beat the hell out of me, and I told I w^ish he was 10 years
yoimger so we would see who would get the hell beat out of who.
Then I said, "Let's see your credentials," and he opened up his book
and I saw his driver's license, and so forth, and I thought we might
as well go along and get it settled.
The Chairman. You are talking about Conroy?
Mr. Steele. I am talking about Mr. Conroy,
Mr. Kennedy, Did you learn subsequently this was a common prac-
tice or procedure that was followed not only in your case but in other
cases?
Mr, Steele, That is trae.
Mr. Kennedy. And that the OK that you had to receive was an
OK that you had to receive from Metro Holovachka's office, somebody
in that office ?
Mr. Steele. Well, I don't know where it came from, but I presume
whoever this Conroy represented would have something to say about
whose machines were in the county.
Mr. Kennedy. At least you didn't get an OK ?
Mr, Steele, I got orders to get out,
Mr, Kennedy, And you got out and had to stay out ?
Mr, Steele, Yes ; I did. I am a small operator. One location with
that much trouble didn't mean anything to me.
Mr. Kennedy, That is all, Mr. Chairman.
The Chairman. All right. Thank you.
Mr. Kennedy, Mr, Steele has been of great help in the course of this
investigation, Mr, Chairman.
The Chairman. Thank you very much, Mr. Steele.
The committee will stand in recess until 10 : 30 in the morning.
(Members of the select committee present at the conclusion of the
session : Senators McClellan and Capehart.)
("VYliereupon, at 4 : 40 p.m., the select committee recessed, to recon-
vene at 10: 30 a,m,, AYednesday, June 3, 1959,)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
WEDNESDAY, JUNE 3, 1959
U.S. Senate,
Sekect Committee on Improper Activities in the
Labor Management Field,
Washington, D.O.
The select committee met at 10 :30 a.m., pursuant to Senate Reso-
lution 44, agreed to February 2, 1959, in the caucus room, Senate
Office Building, Senator Barry Goldwater presiding.
Present : Frank Church, Democrat, Idaho ; Homer E. Capehart, Re-
gublican, Indiana; Barry Goldwater, Republican, Arizona; Carl T.
urtis. Republican, Nebraska.
Also present : Robert F. Kennedy, chief counsel ; LaYern J. Duify,
investigator; Richard G. Sinclair, inve;<tigator ; James F. Mundie, in-
vestigator ; John T. Thiede, investigator ; Robert E. Manuel, assistant
counsel ; Ruth Y. Watt, chief clerk.
Senator Goldwater. The committee will come to order.
(Members of the select committee present at time of convening:
Senators Goldwater and Curtis.)
Senator Goldwater. Counsel, call the first witness.
Mr. Kennedy. Mr. Harold Rayder, Mr. Chairman.
Senator Goldwater. The witness will stand and be sworn. Raise
your right hand and repeat after me : I swear that the evidence that
I give before this committee will be the truth, the whole truth, and
nothing but the truth, so help me God.
Mr. Rayder. I do,
TESTIMONY OF HAEOLD E. RAYDER
Senator Goldwater. Give your name.
Mr. Rayder. Harold E. Rayder.
Senator Goldwater. And your address ?
Mr. Rayder. 706 Washington Street, Valparaiso, Ind.
Senator Goldwater. And your occupation ?
Mr. Rayder. Chief deputy. Porter County.
Senator Goldwater. Chief deputy sheriff ?
Mr. Rayder. Chief deputy sheriff.
Senator Goldwater. Go ahead, Mr. Counsel.
Mr. Kennedy. You spell your name, Mr. Rayder, R-a-y-d-e-r ?
Mr. Rayder. That is correct.
Mr. Kennedy. And you are chief deputy sheriff. How long have
you held that position ?
Mr. Rayder. Since January 1, 1959.
36751— 59— pt. 53 5 18485
18486 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. That is in Porter County, Ind. ?
Mr. Rayder. That is right.
Mr. Kennedy. Mr. Chairman, the importance of this testimony is
in connection with the testimony that we had yesterday, where there
is in influx of some outside groups to try to take over the area and
destroy proper unionization.
We are going now from Lake County to Porter County. Here we
have some firsthand information and testimony as to how gangsters
and racketeers try to move in on a county to destroy the proper unions
and set up illegitimate businesses and vice.
I think as the testimony develops, we will see that we will have
some firsthand information as to how that can happen.
Senator Goldwater. Is Porter County contiguous to Lake County ?
Mr. Rayder. Yes, it is.
Senator Goldwater. I might ask counsel in connection with this,
do you intend to call any witnesses from the Indiana State police ?
Mr. Kennedy. We have no plans at the present time, Senator.
We are going to call some officials from Lake County. Mr. Holo-
vachka, the county prosecutor, has been subpenaed, as well as some
other officials in that area who have been subpenaed to testify be-
fore the committee. But we have no plans at the present time to
call the State police.
Senator Goldwater. This is familiar to me in a small way because
the newspapers in Indianapolis, published by the same publishers
of my hometown papers, have carried some of it. I thought I saw
where the Indiana State Police had been in this.
Mr. Kennedy. They have been in it so far as trying to clean it up,
to take steps to clean it up, and the situation particularly in Lake
County. But so far that has been unsuccessful. There will be some
testimony regarding their efforts and attempts to do so, but we didn't
plan to have any witnesses.
Senator Goldwater. You may proceed.
]Mr. Kennedy. I might also put on the record, Mr. Chairman, that
the name of Mr. Holovachka came in rather prominently in the testi-
mony yesterday, and a telegram was sent to Mr. Holovachka by the
chairman of the committee, telling him that he could appear before
the committee at any time he felt there was derogatory information
about him, so that he could testify and give his side of the situation
or refute the testimony.
He has had ample opportunity to come here before the committee
and give any statement that he wished under oath. He has been sub-
penaed, however, to appear before the committee. That date has been
set for this Friday.
Senator Goldwater. What was his name again ?
Mr. Kennedy. Metro Holovachka, who was the chief deputy prose-
cutor of Lake County.
Mr. Rayder, how long have you been with the sheriff's office in
Porter County ?
Mr. Rayder. Since January 1, 1959.
Mr. Kennedy. You are a lifelong resident of Porter County; is
that right?
Mr. Rayder. That is right.
Mr. Kennedy. And you maintain a farm there ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18487
Mr. Kayder. I have maintiiinecl a farm.
Mr. Kennedy. And you were employed by the Union Tank Car
Co., of Whiting, Ind. ; is that right ?
Mr. Rayder. That is correct.
Mr. Kennedy. You were supervisor of the airbrake division until
you retired in May of 1958 ; is that correct ?
Mr. R AYDER. That is correct ; yes, sir.
;Mr. Kennedy. And during the election, the primary and then the
final election, you supported Mr. Edward Buchanan as sherili' of Porter
County, Ind. ?
]Mr. Rayder. That is correct.
Mr. Kennedy. B-u-c-h-a-n-a-n; is that right?
Mr. Rayder. That is correct.
Mr. Kennedy. Is it also true that in early 1958 you became aware
of certain damaging social changes that were taking place in Porter
County, Ind. ?
Mr. Rayder. I did.
Mr. Kennedy. Would you relate to the connnittee briefly what you
found was happening in your country ?
Mr. Rayder. Well, at that particular time, I became aware of the
fact that there had been a house of prostitution opened up at Baums
Bridge. That is between Kouts and Hebron, and these operations
were sponsored by an unknown party to myself. I later found out
who they were. I thought that with tlie gambling and vice that
was going on, this wasn't the right thing for Porter County, with the
university located there, and being more or less of a quiet county.
Mr. Kennedy. So did you decide that you would take an active
part, participation, in trying to clean up the county, trying to get
things done ?
Mr. Rayder. After I took office, that is when I started to make my
investigation.
Mr. Kennedy. Is that one of the reasons that you supported Mr.
Buchanan ?
Mr. Rayder. That is one of the reasons I supported him.
Mr. Kennedy. To try to clean up the situation ?
Mr. Rayder. That was the platform we electioneered on.
Mr. Kennedy. To try to clean up the situation ?
Mr. Rayder. That is right.
Mr. Kennedy. One of the problems Avas the pinballs and gambling?
Mr. Rayder. That is so.
Mr. Kennedy. As well as prostitution?
Mr. Rayder. Not when we took office. Mr. Hineline took care of
that in 1958.
Mr. Kennedy. It was mainly the gambling and pinball machines ?
Mr. Rayder. I would say at that particular time it was more or less
small gambling. It wasn't anything to be alarmed over.
Mr. Kennedy. In early 1958, did you understand that one of the
prominent figures in the underworld was a man by the name of Tom
Morgan© ?
Mr. Rayder. That is so. Part of the Chicago Pinelli and Giancana
syndicate.
Mr. Kennedy. The Pinelli-Giancana syndicate of Chicago^
Mr. Rayder. That is coi-rect.
18488 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy, Did you understand he was the representative of
Giancana and Pinelli in Porter County?
Mr. Rayder. That is what I would assume,
Mr. Kennedy, Did you learn or understand that he had set up his
operations on the campus at Valparaiso University?
Mr. Rayder. Yes, He started a pizza place on the corner of Union
and College in Valparaiso, right in the heart of the university campus.
Mr. Kennedy. That is right on the university campus?
Mr. Rayder, Right,
Mr, Kennedy. What was the significance of establishing the pizza
place? Did he also have some gambling establishments within the
area?
Mr. Rayder. That I couldn't say, other than he established this
place. Previous to this he had tried to set up pizza places in Valpa-
raiso and other locations. One, particularly, was the Club Royalee.
There was a lot of trouble caused over that. They finally got that
settled.
I think the way things were going there, that they had other plans
on setting up other pizza places, with possibly gambling in the rear.
Mr. Kennedy. Did you understand that that was part of the op-
eration ?
Mr. Rayder. That is right.
Mr. Kennedy, When Buchanan was elected, you became the deputy
sheriii', and your investigation took place. Did you find that the situ-
ation was far more serious than you had thought it was?
Mr. Rayder. I had. I found out it was a lot more serious, and I
thought a lot more serious than the people of Porter County realized.
Mr. Kennedy. Had there been some bombings of some of these other
pizza places?
Mr. Rayder. There had been bombings in Gary, yes, at that par-
ticular time.
Mr. Kennedy. Did you meet Mr. Tom Morgano, yourself ?
Mr. Rayder, Yes, I did.
Mr, Kennedy. When did you meet him ?
Mr. Rayder. The first time I met him was on March 28, 1959.
Mr. Kennedy. Where did you meet him ?
Mr. Rayder. At the Elks Club.
Mr. Kennedy. Would you relate the conversation to the committee ?
Mr. Rayder. The conversation that took place was he got acquainted
with me when I came in, and he wanted to know if I wanted to make
a fast buck. So I thought, well, as long as I am in this investigation, I
might as well find out what a fast buck was. So I did. At that par-
ticular time, he said, "Oh," he said, "approximately $10,000." So I
told him, "Well, who is going to take care of me when you start putting
the heat on me," and he said, "You leave that up to me and I will se©
that you get shoved in the automobile trunk," meaning the automobile
trunk.
Mr. Kennedy. Do you mean if the heat was put on you and trouble
developed, you asked him what was going to happen ?
Mr. Rayder. That is right.
Mr. Kennedy. Speak a little louder and slower, if you please.
Mr. Rayder. Well, he stated at that time that as far as Tom Mor-
gano was concerned, I didn't have anything to M^orry about ; he would
take care of everybody.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18489
Mr. Kennedy. "Wliafc would happen if some heat was placed on you,
when you asked about that?
Mr. Rayder. He said he would place them in the trunk, shove them
in the trunks, being the words he used.
Mr. Kennedy. What did you understand by that?
Mr. Rayder. Well, I just took it by what I had found out in 1958
and more or less reading the papers that he was the muscleman for the
syndicate, and he was trying to get established in Porter County.
Mr. Kennedy. Did he suggest at tJiat time that you meet at a later
time ?
Mr. Rayder. Yes; he did.
Mr. Kennedy. And did he call you then ?
Mr. Rayder. Yes, he called me ; and the next meetmg was at the Col-
lege Inn.
Mr. Kennedy. What was the date of that meeting?
Mr. Rayder. That would be in the first part of April.
Mr. Kennedy. Around April 9 ?
Mr. Rayder. Right.
Mr. Kennedy. 1959?
Mr. Rayder. That is correct,
Mr. Kennedy. Would you relate to the committee what your con-
versation with Morgano was ?
Mr. Rayder. At that particular time he stated that he would like
to get Porter County solid, and that he wanted to establish the pinball
machines solid in the county ; he would like to start a house of prostitu-
tion on the north end of the county. He wanted to know if I would
look around to find a piece of land where he could build a place.
He said he would run it very nice and quiet; there wouldn't be any
trouble. I stated at that particular time that the $10,000 that he
had offered me wouldn't be enough to cover the sheriff and prosecutor
and a few other smalltime politicians that would want their cut out
of it, and he said, well, he would go as high as $50,000.
Mr. Kennedy. $50,000 was for whom ?
Mr. Rayder. $50,000 was to take care of the sheriff and the prosecu-
tor and the JP's and the constables. At this particular time, he also
offered me $50,000, plus a bonus that he said he could steal off of the
politicians. He said they would never know the difference.
Mr. Kennedy. So altogether it was going to be $100,000 ?
Mr. Rayder. Right.
Mr. Kennedy. And you were going to get $50,000 for yourself and
$50,000 to pass on to other people that should be fixed ; is that correct?
Mr. Rayder. That is correct.
Mr. Kennedy. And he said for this he wanted to have complete
control over Porter County ?
Mr. Rayder. That is correct. He stated at that time that he would
go as high as a half million dollars to get control.
Mr. Kennedy. You met with him again on April 11 ?
Mr. Rayder. That is right.
Mr. Kennedy. This, again, Avas at his request; is that right?
Mr. Rayder. Right.
Mr. Kennedy. Wliere was that?
Mr. Rayder. The second meeting was at the Corral.
Mr. Kennedy. And then again on April 20 at the Sportsmen's
Club ; is that correst ?
18490 IMPROPER ACXrVITIES IN THE LABOR FIELD
Mr. Rayder. That is correct.
Mr. Kennedy. Then on May 4 in an automobile ?
Mr. Rayder. That is right.
Mr. Kennedy. During this period of time you had been in touch
with Mr. Richard Sinclair of this committee's staff ?
Mr. Rayder. Yes. I had an interview with an independent pinball
machine operator and met Mr. Sinclair there at that time. Finding
the county in such a serious condition, I told him that I would appre-
ciate the fact if I could work with the committee, and he said to go
right ahead and, he said, "We will back you up to the limit."
Mr. Kennedy. Why, after he had made this offer to you and re-
peated the offer on at least three separate or other occasions, why
didn't you make an arrest at that time ?
Mr. Rayder. Well, I felt we hadn't quite gathered enough evidence
to make an arrest at that time, and that if we could get all the funda-
mental points of his bribe and find out just exactly what he had done,
I felt we could send him up for a long time and wouldn't have to
worry about him.
Mr. Kennedy. You felt that with the support of the committee in
bringing and developing it, you would be able to get enough public
pressure to have something done about the situation in Porter County ?
Mr. Rayder, That is correct.
Mr. Kennedy. In the first meeting at College Inn and then on the
other occasions at which you met with him, he explained that he was
being backed and supported by the group in Chicago; is that right?
Mr. Rayder, That is right. I talked to him and he stated at this
meeting that he had to get back to Chicago, and Cliicago Heights, in
order to get this thing underway. They were getting impatient.
They wanted to get started. He had to get this thing going. After
all, he said, he had bosses, too.
Mr. Kennedy, He talked about the bosses coming from the syndi-
cate in Chicago?
Mr. Rayder, That is correct.
Mr. Kennedy. He also related the first time that one of his bosses
was Johnny Formusa ?
Mr. Rayder, He did. He told me at that particular meeting that
Johnny Formusa was his boss and that the M & J Motel in Gary had
been temporarily shut down and he was operating in South Bend.
Mr. Kennedy. The M & J ?
Mr. Rayder. The M & J Motel in Gary.
Mr. Kennedy. Is that the house of prostitution in Gary ?
Mr. Rayder, That is correct,
Mr. Kennedy. He said that had been temporarily shut down, but
he had opened a place in South Bend, Ind. ?
Mr. Rayder. That is right.
Mr. Kennedy. Did he tell you where in South Bend ?
Mr. Rayder. No, he did not tell me where it was at.
Mr. Kennedy. Did he tell you how the payoff would take place ?
Mr. Rayder. Yes ; he said the payoff would be in small circulating
bills of $10's and $20's.
Mr. ICennedy. You tried to have a recording of some of these con-
versations with Mr. Morgano ; is that correct?
Mr. Rayder. Yes, I did. I got a recording at the Sportsmen's
Club, but it didn't prove to be satisfactory.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18491
Mr. Kennedy. But you did take a recording: on the meeting that
you had with him in the automobile of May 4, and that was satisfac-
tory ?
Mr. Kayder. That is correct. That recording turned out fine.
Mr. Kennedy. Mr. Chairman, we liave that recording. Mr. Mor-
gano is here at the present time. Possibly we would like to bring him
around and see if he has anything to say to the testimony so far,
and then maybe we could also have him listen to the recording.
Senator Goldwater. Mr. Tom Morgano, come to the witness stand,
please.
Will you hold up your right hand ?
You swear that the evidence you give will be the truth, the whole
truth, and nothing but the truth, so help you God ?
Mr. MoRGANO. I do.
TESTIMONY OF THOMAS MORGANO
Senator Goldwater. Mr. Morgano, give us your full name.
Mr. Morgano. Tommy Morgano.
Senator Goldw^\ter. And your place of residence?
Mr. Morgano. 3526 Jefferson Street, Gary, Ind.
Senator Goldwater. And your occupation ?
Mr. Morgano. Restaurant owner,
Mr. Kennedy. I wonder, Mr. Morgano, do you know Mr. Rayder?
He is the chief deputy in Porter County, with the sheriff's office.
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reasons for the fact that my answer might tend to commit me.
Mr. Kennedy. Would you look to your left, Mr. Morgano? Do
you recognize that gentleman ?
Mr. Morgano. I respectfully decline to answer mider the provision
of the fifth amendment to the Constitution of the United States, by
reasons of the facts that my answer might tend to my incrimination.
Mr. Kennedy. Mr. Chairman, we have a copy of the recording of
the conversation that took place in the automobile between Deputy
Rayder and Mr. Morgano, which I would like to have permission to
Would you like to sit here, Mr. Rayder, or would you like to sit
thei'e ?
Mr. Rayder. I will sit over there.
Mr. Kennedy. Mr. Chairman, we have made a copy of the record-
ing, which we can introduce through Mr. Richard Sinclair. Then
we would like to have it introduced into the record.
Do you want to swear Mr. Sinclair ?
Senator Goldwater. Yes.
Do you swear that the evidence you will give before this committee
will be the truth, the whole truth, and nothing but the truth, so help
you God ?
Mr. Sinclair. I do.
18492 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF RICHARD G. SINCLAIR
Senator Goldwater. Give us your name.
Mr. Sinclair. My name is Richard G. Sinclair. I am a member
of the staff of the committee. I have been here approximately 1
year.
Mr. Kennedy. Mr. Sinclair, you have examined the recording of
the conversation that took place between Mr. Rayder and Mr. Mor-
gano ; is that correct ?
Mr. Sinclair. I have.
Mr. Kennedy. And you have made a transcript of that recording?
Mr. Sinclair. I have ; yes, sir.
Mr. Kennedy. And there have been no changes made in the record-
ing except for the insertion of a "beep" where the profanity is used ?
Mr. Sinclair. The recording is verbatim other than that.
Mr. Kennedy. There are a number of telephone conversations that
are also included in the transcript ; the telephone conversations were
not interceptions, they were not wiretapping, because it was a record-
ing device that was placed on the telephone by Mr. Rayder himself ;
is that correct ?
Mr. Sinclair. That is correct.
Mr. Kennedys And those conversations are included, but the tape,
as it is going to be played now, will not include those conversations?
Mr. Sinclair. The tape will not include those conversations.
Mr. Kennedy. They don't add anything particularly, Mr. Chair-
man.
We are ready to start, if we may.
Senator Goldwater. Do you want this made a part of the record ?
Mr. Kennedy. Yes.
Senator Goldwater. This will be exhibit No. 3.
(Transcript referred to was marked "Exliibit No. 3" for reference
and may be found in the files of the select committee.)
(At this point there was played a tape recording of the conversation
that occurred between Thomas Morgano and Harold Rayder in Mor-
gano's car parked out in front of 706 Washington Street, Valparaiso,
the residence of Harold Rayder, as follows:)
Rayder. Hi Tommy. Back up here and park a little while. I gotta go to work
at II o'clock tonight. G — d — them anyway. I worked all day and they just
called up again.
Morgano. What's the matter?
Rayder. Oh, s — t. They make me (inaudible).
Morgano. You make more money.
Rayder. Yeah, but I don't get paid.
Morgano. You don't get paid?
Rayder. No. Just get a salary is all I get ; regardless of how many hours you
work.
(Morgano inaudible.)
Rayder. They are having a school up thei*e in Portage — and the guys are all
going to school and the fellows up there — and some of them didn't show up
tonight and I gotta work.
Morgano. After all, you are responsible. And when they need help over there,
you gotta.
Rayder. Yeah, yeah — but I don't like that working all the time business.
Say — uh — I was talking — this thing got all upset over this paper business.
The other day they had them all down at the office. There was Sutherland and
Wiggle and Pivarnik and Jopes, and I kinda thought it would end out that way.
Sure, somebody would sign an affidavit and get a warrant, but who would be
sucker enough to do that, see?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18493
MORGANO. Right.
Raydee. So, I was a little bit — the other night when I told you that of course
everything was upset. We didn't know what they was gouua do, so
MoRGANO. How do they feel?
Rayder. Well, things is going along pretty good and, of course, now from what
they tell me — this Sutherland — you know him don't you? I don't know how they
are figuring him in on this, but
MoRGANo. Well — this is — he is a State police.
Rayder. Yeah. So I suppose he is gonna be in on it a little bit. Well, they
are gonna have to give him something, too, from what they are talking about.
Morgano. Somebody gonna take care of him.
Rayder. And — uh — Pivarnik seems to think that — well I don't know how he
wants to work this. Well — he want an attorney or some damn thing — I don't
know whether he don't trust me or what the hell's wrong, but I wanna know — I
want to be the guy that's on this thing. I don't trust them guys, see.
MoRGANO. Absolutely, I don't wanna talk with nobody.
Rayder. So^ust so long as I know what the score is here, why —
Jesus Christ! Wheeh ! (Pushes button to roll window down in Morgano's
Lincoln.)
So — I think that — that's better. So how we gonna work this?
Morgano. Are they ready to do business?
Rayder. Yeah, they are talking about it right now.
MoRGANO. I don't wanna talk. I want the facts.
Rayder. Well — of course you know how they are. They are all new, see?
Morgano. I want to says "go ahead." Cause I wanna look to builda some
place.
Rayder. Yeah, well I told them now like you said — you was gonna go ahead —
that you would be willing to
MoRGANO. The county corner to corner^strictly the county. How about these
pinball machines. Anybody taking the machines out?
Rayder. No, they are not gonna take none out. No.
MoRGANO. Well pull 'em out.
Rayder. So, what do you suppose Welbourn and Sohacki is gonna do for that?
MoRGANO. What do you care about Sohacki?
Rayder. Well, I don't care about him, but
MoRGANO. You care about anybody?
Rayder. No, no. I don't give a damn. You are right.
MoRGANO. Just that you give me yourself — the administration over here. I
will take care of the rest of it. I can handle Sohacki.
Rayder. Well, you can name — you know how to handle him.
MoRGANO. That's my business.
Rayder. Okay. I don't worry about that.
(Morgano inaudible.)
Ray'der. ok. Just so long as I know. You see what kind of mess this has
stirred up over here. So long as you are gonna take care of it
MORGANO. I'll take care of it.
Rayder. All right, OK — so then I told them about the amount — you are gonna
work that by the month then.
Morgano. Soon as we start — soon as we start — soon as we start, then we will
start the pay. We've got to see out here.
Rayder. So now one thing they wanted to ask me was — well, how you gonna
set that up? Set that up like you said you would be willing to put the
$50,000 in for 2 years on a monthly basis.
Morgano. That's right. Every month you get your stufE.
Rayder. OK.
Morgano. Every month you get an envelope and besides that I take care
of you extra.
Rayder. Then you take care of me.
Morgano. Extra.
Rayder. Yeah.
Morgano. How do you take my word for it. Do you believe me?
Rayder. Oh, sure. I believe you.
Morgano. Extra — they won't know that.
Rayder. Yeah. What they don't know won't hurt 'em.
Morgano. Absolutely — it's up to you — it's up to you — you jerst — the wlU to
go.
Rayder, Yeah.
18494 IMPROPER ACTIVITIES IN THE LABOR FIELD
MORGANO. Then I can go back to Chicago and I'll give 'em the news.
Rayder. Yeah.
MoRGANO. Solid.
Rayder. OK, good enough. [Laughter.]
MoBGANO. I gotta look for a place. I want one big book right in Fifth Avenue
that I can do.
Rayder. Yeah.
MoRGANO. And one cathouse — way down — way down from here.
Rayder. How many?
MoRGANO. One.
Rayder. That's all you want then?
MoRGANO. Nobody else gonna put any in.
Rayder. Well, don't forget to fix it up like you told me. You know— so I
get a little news once in awhile.
MoRGANO. Leave that to me — leave that to me. You are gonna get a page
once in awhile. You gonna get a page — we set some place — close it — we'll get
a cottage — you get somebody — come and slash everything up. Did you tell
them?
Rayder. No, I didn't tell them.
MoRGANO. Tell 'em — tell 'em.
Rayder. OK.
MoRGANO. Absolutely — tell 'em — tell 'em.
Rayder. Tell 'em? OK.
MoRGANO. Sure, absolutely, tell them, tell them.
Rayder. All right. OK.
Morgano. You gonna protect me and I'm gonna protect you.
Rayder. Yeah.
Morgano. Understand?
Rayder. Yeah, sure — yeah.
Morgano. Takes a month or so before I get everything straightened out over
here. So I can see about a location. Soon as I start — to say we're starting
today — here you are.
Rayder. Well, OK.
Morgano. You come with any news thatsa solid now. You gonna do any
more talking with them people?
Rayder. Well, now the other night I was down to the Elks a little while
and Bud was down there. You know. Bud Gott?
Morgano. That's right.
Rayder. How is he gonna fit into the picture. He was hollering down there
about running a bookie joint here, you know?
Morgano. Yeah?
Rayder. I didn't want to say anything to him see.
Morgano. You say nothing to nobody. Just when we are starting over there
and then I want to shut him off.
Rayder. Then we are gonna shut him off too?
Morgano. Shut 'em oft" : You're gonna shut him off !
Rayder. OK.
Morgano. Then I will get down and ask him does he wanta work. He'll run
this book over here — 50/50. First, shut him off and then I'll open him.
Rayder. You gonna let him run on a 50/50 basis, huh?
Morgano. You shut him off.
Rayder. Yeah.
Morgano. You shut him off— him and Lowia (phonetic) — every poker game.
They gotta few poker games in here. Then I'll tell you what to do. You shut
him off and I'll open him.
Rayder. OK. All right. That's good enough. So — what do you think about
that idea. How will I go about that with him now? I wanted to know. Pi-
varnik, you know, he seemed to think he wanted someone kinda in between
you know. I told him — I says — well
Morgano (slapping Rayder on the shoulder). You'll be the big wheel.
Rayder. I'm gonna be the big wig?
Morgano. You're the guy. You can't start telling too many people.
Rayder. No
Morgano. You may wind up in the penitentiary.
Rayder. Yeah.
Morgano. You're the only one that can send them to the penitentiary —
and me — for me I'U go myself.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18495
Rayder. Uh, huh. OK, that's good enough tht-ii.
MoRGANO. You tell 'em. "Look, you don't want many people involved." You
tell them we'll have dinner sometime — the D.A., the sheriff and you. When
you can arrange that we'll go into Chicago sometime.
Ravder. Yeah — we gotta get out of town.
MoRGANO. Yeah, that's right.
Rayder. OK.
MoRGANO. Then we can talk.
Rayder. OK.
MoRGANO. So far we got everything solid.
Rayder. Yeah. Well things look pretty good and I think we're
MoRGANO. I don't want to use that word "looks pretty good." I want to know
"This is it".
Rayder. Everything was going pretty good until this G d (garbled at
this point) Zeis (phonetic) pinball threat. But that's all squashed up now and
this didn't happen until yesterday.
Morgano. I know, I know.
Rayder. And they had this big meeting down there and 'course naturally I
didn't know where they stood. Everybody shut right up like that, you know,
and Wiggins, he stirred them all up — and Sutherland he was all stirred up over
it and they had all the detectives down here from the Post and they was around
town nosing a little bit and they went down to see Heinberg that used to have
a tavern and talked to him, you know. They were all over town, see? So, of
course, then everything just shut down. Nobody would talk. So then I got
around 'em a little bit and talked to 'em and now this Pivarnik seems to think
that he wanted to know what you wanted to do and all that. The last time I
talked to you after we talked down to the Sportsmen's Club — well he was all
for it — then, gee. Wiggle stirs up this thing that comes out from
Morgano. G d fool. I'll stop Wiggins. I can stop John Wig-
gins so he won't make any more noise. I'll talk to Lou, his wife.
Raytjer. Yeah.
MoRGANO. I'll talk to him — "Heh Wig, what's the matter?"
Rayder. You and .John Wiggins good — pretty
MoRGANO. Yeah — good friends — good friends. I'll talk to him. You can't talk
business with him. When a guy wants to go straight
Rayder. Well, if I though like this — I didn't know how Wiggle was set in this
thing.
Morgano. He doesn't get a penny.
Rayder. But what I thought was this : If Wiggins would knock Steele out,
that would save us all the trouble, see?
Morgano. You can knocka Steele out yourself.
Rayder. Oh, yeah ; but what I mean he could have done it in a polite way.
Morgano. You can knock him out then, huh?
Rayder. Y^eah. If we get these guys behind us, yeah.
Morgano. If we get the administration behind us.
Rayder. Sure.
Morgano. I mean the sheriff and the D.A. — that's all I want. You tell 'em to
take the machine out. You gonna start work on that?
Rayder. I'm gonna start on it. I haven't got any — you know when this come
out there with Zeis at Indianaix)lis with that deal. Of course they got scared,
see — everybody did — even La Porte County and down in Starke — all around.
They were all scared. So now they have got all that calmed down. They're
coming back down to earth again, see.
Morgano. Lotta baloney — but we got the county ; we got the county.
Rayder. Yeah.
Morgano. If they are willing — the DA is willing and the sheriff — that's all
we want.
Rayder. Yeah ; that would be the best deal.
INIORGANO. O.K. — now let's start to get busy. I'll look for a place to play on
the corner over there.
Rayder. I'll see what we can do.
Mokgano. You can make some money. We'll make some real money.
Rayder. You haven't heard about anybody else wanting to come in here, have
you? I got by the wind, well, I don't know — maybe it's true — but I heard
somebody else was trying to bust in here, too.
Morgano. Let 'em bust in — let everybody bust in. I'll take care of 'em.
Nobody gonna bust in on me.
18496 IMPROPER ACTIVITIES IN THE LABOR FIELD
Rayder. Well, if you take it over and they start to bust La, and I tell you —
then
MoBGANO. That's my business. You tell me who he is.
Rayder. All right.
MoRGANO. You tell me. You got any idea how many pinball machines there
are?
Rayder. Altogether, you mean? I would judge — as close as I can gather — I
was talking to Suds up there, and I would say there is somewheree in the
neighborhood of about 400 altogether in the county — iOO machines.
MORGANO. Uh, huh.
Rayder. That's between Welbourn and Sohacki, and I don't know whether
Nehaus [phonetic] has got any up in the corner there.
Morgan o. Everybody has got to be cleaned — corner to corner. Not even a
fly gonna come in.
Rayder. That's all right, then.
MoRGANo. Not a fly gonna come in.
Rayder. I don't know — so far as Welbourn and Sohacki are concerned — I don't
know them from Adam.
MoRGANo. You don't worry about nobody.
Rayder. Maybe it is just as good you don't know.
MoRGANo. You don't worry about a thing. The sheriff will take care of it.
Sohacki is doing all right in Lake County. He is doing all right over there.
Rayder. Well, that's all right. You only want to have one house, huh ?
MoRGANO. Yeah, one big house.
Rayder. One house.
MoBGANO. Well, I gotta make some money to pay you people.
Rayder. Oh. Well, sure. Well, in other words, stay nice. They wanna know
how they are going to do it. In other words, stay nice and quiet, you know, so
nobody will know nothing.
MoRGANo. We will do the best we can. Nice and quiet. A couple of places
in the woods — will look like little motels. Something where you got an excuse,
understand? And the book, we gonna have a book.
Ratdeb. Yeah.
MoRGANO. We're gonna have a book — we're gonna have a big book.
Rayder. You gonna give me a good lead on a horse once in a while.
MoBGANo. Don't be foolish. [Laughter.] There is no such thing. Take it
from me. If you like a race, go see a race. Bet a little money for the hell of
it, and if you win you win, and if you lose you lose, but don't you start that
business, for then you lose your shoes and your pants.
Rayder. Yeah. That's right. I believe it.
MoRGANo. That's a fact. You gotta believe me. That's the truth. No
chance — we'll put a little place over there. We'll have a nice table and a
roulette wheel and we'll make some money. If I setta up nice, you get a good
chunk every month.
Rayder. Yeah. Say, I was down — I want to ask you something, too. You
don't suppose that son-of-a-gun would come over here and nose around and give
us any trouble.
MoBGANo. Who?
Rayder. The other night when the Elks had their bowling tournament
MoBGANO. Yeah?
Raydeb. This Sam, what the hell's his name — his name Sammy Zuezlac
[phonetic] or Zasezlac [phonetic] ?
MoBGANO. Sam Uzelac.
Raydeb. I was down to the Elks the other night.
MoRGANO. Whatta he worrying about?
Rayder. He wouldn't make any trouble, would he?
MoRGANO. Nobody gonna stir up any trouble with Tom Morgano.
Raydeb. O.K. Well, that's right, but I see him down there and some of the
guys ask me, "Do you know who is down there tonight?" and I said "Gee."
MoRGANO. The guy who got shot in the belly.
Raydeb. G d
MORGANO. He used to work for me.
Rayder. Used to work for you?
MoBGANO. He's all right — he's all right.
Raydeb. But I thought now, you don't suppose he would be over here stirring
up trouble.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18497
MoRGANO. Nobody's gonna stir up trouble over here. I can give you that.
I'm gonna start the trouble. There is nobody gonna step a foot in this
territory.
Rayder. Well, just as long as we have any trouble, then I tell you, and that's
it.
MoRGANO. That's my business.
Rayder. If anybody tries to muscle in
MoRGANO. Let 'em muscle in. They gotta muscle me in.
Rayder. Yeah.
MoRGANO. Let 'em muscle me.
Rayder. OK.
MoRGANo. Let them muscle me.
Rayder. All right.
MoRGANO. You don't know me, and 1 don't know you.
Rayder. Oh, yeah ; that's right.
MoRGANO. Don't forget.
Rayder. Yeah.
MoRGANO. If I meet you on the street or in some saloon — nothing doing.
Rayder. I can send a drink back to you, can't I ?
MoRGANO. No; if we want a drink we'll go someplace else and get it. Too
dangerous to let others know your business. Your best friends — people that
pat you on the back, they come around, they get jealous of you.
Rayder. Yeah. Yeah.
MoRGANO. Let's play dumb. Let's maka real money.
Rayder. OK.
MoRGANO. You gotta go to work?
Rayder. Yeah. Well, I'll see you then. Tommy.
MoRGANO. Well, whatta you want me to do now? Call you or what?
Rayder. Well, listen, let me find out. What is today? Today is Monday —
how about you calling me Saturday night?
Morgano. All right— to say you fixed the deal solid.
Rayder. All right.
Morgano. If the deal's solid
Rayder. Well, now, I can't, you know. I just can't say, you know. I got
these guys to contend with on the other end too, you know.
Morgano. That's what I'm talking about.
Rayder. Yeah. Well I mean Pivarnik and Buchanan.
Morgano. That's right ; them two people. I want them two people.
Rayder. But I mean it takes time. They're new. If they was old seasoned
guys.
Morgano. Buchanan's a seasoned man. Buchanan's a seasoned man.
Rayder. You think he's seasoned man?
Morgano. Buchanan seasoned man. He's been around a long time. He's all
right. Well — he don't have to come out to the house anyhow.
Rayder. Well, you don't suppose — this is what's been worrying me — you don't
suppose Buchanan has been taking anything oft of Welbourn and Sohacki?
Morgano. I couldn't say.
Rayder. I was just wandering about that ; cause I wonder
Morgano. This I learn you. Even if I knew, I won't tell you.
Rayder. Well, I know that, but this is what I was wondering : I was wonder-
ing how you was gonna chop it off with them.
Morgano. What do you mean by that?
Rayder. I was wondering if Welbourn and Sohacki — if he is taking some-
thing
Morgano. Sohacki gonna be through over here ; so Welbourn ; so Steele.
Rayder. Yeah. All right. Just so we get that straight, see. I don't want
them guys to doublecross me either, you know.
Morgano. You mean Buchanan
Rayder. Yeah. If they would give me
Morgano. It is up to them. We've gotta have them.
Rayder. I'll get them all right. Yeah, you damn right I'm gonna teU 'em.
Morgano. We'll make this deal. Welbourn and Sohacki will go out and
you'll make them understand.
Rayder. You damn right.
Morgano. 'Cause I'm gonna kicka them out.
Rayder. Sure, sure.
Morgano. You make dem understand.
18498 IMPROPER ACTIVITIES IN 1"HE LABOR FIELD
Rayder. You gonna give me some help to get them out of here, too? I'm
gonna have to have a little bit of help to get them out.
Morgan o. You'll get all my help.
Rayder. All right.
MoRGANo. To tell you the truth, I don't need any help. I don't need you.
Just see what they said.
Rayder. As long as we get them, then you take care of them.
MoRGANO. So long as the D.A. and the sheriff says the county is mine, then
I'll take care of it in taking things over.
Rayder. O.K. ; all right, Tommy. I gotta get going. I'll see you.
MoRGANO. I'll call you Saturday night.
Rayder. Well, we'll see you. Good luck to you.
MoRGANO. Same to you.
Rayder. All right, Tommy.
(Car starts and drives off.)
Senator Goldwater. Mr. Counsel, you may proceed.
Mr. Kennedy. Would you tell us about that, Mr. Morgano ?
Mr. MoRGANO. I respectfull}^ decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
TESTIMONY OF HAEOLD E. RAYDER— Eesumed
Mr. Kennedy. May I ask the sheriff a question?
That recording is correct, is it not, Sheriff'?
Mr. Rayder. Yes.
Mr. Kennedy. That was the recording you took the night you met
with Mr. Morgano in the automobile?
Mr. Rayder. That is cori-ect.
Mr, Kennedy. And some of the names that were used — there was
no implication of wrongdoing on their part, but you just made
statements ?
Mr. Rayder. I made statements in order to get my information.
Mr. Kennedy. When you talked about meetings or that these people
were in on something, you just made that up in order to get him to talk ?
Mr. Rayder. At this particular time, Buchanan and Pivarnik knew
nothing of this whatsoever. The only reason I did this was I wanted
to get the information from him. Mr. Buchanan stated previous
to this that anything that I done, or did — pardon me — was to help
the office and he felt that knowing me as many years as he did, that
everything that I done — did — was O.K. and he would back me up to
the limit on anything.
Mr. Kennedy. During the course of the conversations earlier, there
had been some discussion about Uzelac, the man who had been shot in
Lake County.
Mr. Ray^der. Yes. Uzelac was shot in Gary at 45th and Broadway.
Mr. Kennedy. And Mr. Morgano was found guilty of that shooting ?
Mr. Rayder. Well, he was taken up in front of ;^Ietro Holovachka
and given a $200 fine and a suspended sentence.
Senator Goldwater. What is the man's name?
Mr. Rayder. Metro Plolovachka.
Mr. Kennedy. Did you raise some question that you didn't want
that kind of thing to happen in your county?
Mr. Rayder. That is correct.
Mr. Kennedy, What did Mr. Morgano say about that?
Mr. Rayder. He told me that that wouldn't happen ; that everything
would be nice and quiet.
IMPROPER ACTWITIES IN THE LABOR FIELD 18499
Mr. Kennedy. There was also some reference in this conversation,
or some indication that lie would allow or permit you to make some
raids in order to make it look good.
Mr. Rayder. That is correct.
Mr. Kennedy. Would you relate what he said to you in some of the
conversations ?
Mr. Rayder. There would be certain spots that would be set up
that we could raid in order to get a headline in the paper, to make
it look like we had a wonderful law enforcement office.
It was stated that the windows would be knocked out, the tables
turned over, wreck the place, bring in a couple of women and they
would send over somebody to get them out.
Mr. Kennedy. So the whole thing was planned out from start to
finish ?
Mr, Rayder. That is cori-ect.
Mr. Kennedy. And as he said, he was going to have such control
over the county tliat even a fly couldn't get in ?
Mr. Rayder. That is correct.
TESTIMONY OF THOMAS MOEGANO— Eesumed
Mr. Kennedy. Is that right, Mr. Morgano?
Mr. Morgano. I respectfully decline to answer under the pro-
visions of the fifth amendment to the Constitution of the United
State, by reason of the fact that my answer might tend to incriminate
me.
Senator Curtis, ]\Iay I ask a question ?
]Mr. Morgano, have you ever seen this gentleman, Mr. Harold
Rayder, who is chief deputy of Porter County?
j\Ir. Morgano. I respectfully decline to answer under the provisions
of the fifth amendment to the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Curtis. Do you deny that you have ever had any conversa-
tions with him ?
Mr. Morgano. I respectfully decline to answer under the provisions
of the fifth amendment to the Constitution of the United States, by
reason of tlie fact that my answer might tend to incriminate me.
Senator Curtis. That is all.
Mr. Kennedy. Was it also explained during the course of some of
these conversations as to the reason tliat Mr. Morgano and his group
from the Chicago miderworld wanted to get into Porter County?
That is, namely, the fact that there was going to be some new steel
mills?
Mr. Rayder, Yes. In Porter County, there isn't any doubt that
the community will not gi^ow. It has been an agricultural atmos-
phere in Porter County, mainly farming. But now the Bethlehem
and National Steel Co. are building into the northern part r^f the
county. Portage Township will incorporate before July 1.
^The population of Portage Township at this time is gi^eater than
Valparaiso. I would assume that Portage Township will be the
Gary of tomorrow of Porter County.
Mr. Kennedy. What evidently was going on was an attempt to
get in early, so that they would have complete control when the influx
of new industry would come in ?
18500 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Rayder. That is right. They would move in on the ground
floor and be well established.
Mr. Kennedy. You stated earlier that in the conversations that
you originally had with Mr. Morgano, he claimed that he had his
bosses up in Chicago, from whom he was taking ordei-s. We can see
also on page 9 where he says, "Then I can go back in Chicago and I
will give 'em the news."
So there is no question but what he was just one of a group of an
underworld syndicate operating out of Chicago which was trying to
gain control of the situation ; is that correct ?
Mr. Rayder. That is correct.
Senator Goldwater. Did you say your home was in Gary ?
Mr. Morgano. Yes, sir.
Senator Goldwater. How long have you lived there ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment of the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Goldwater. You were born in Italy, were you not ?
Mr. Morgano. I respectfully decline to answer under the provisions
of the fifth amendment of the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Goldwater. When did you come to the United States ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment of the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Goldwater. "Wlien did you become a citizen of the United
States?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment of the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Goldwater. Are you an American citizen ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment of the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Goldwater. Do you think that being an American citizen
might tend to incriminate you ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment of the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Goldwater. Mr. Counsel, is this man a citizen of this coun-
try?
Mr. Kennedy. From the records we have, and from what we under-
stand, he is not a citizen of the United States ?
Senator Goldwater. Can we find that out and make certain of it?
Mr. Kennedy. The information that we have, Mr. Chairman, at the
present time, is that he is not a citizen of the United States. We
requested more details on it from the Bureau of Immigration, but
we have not obtained them as of this time.
Senator Curtis. Mr. Chairman
Senator Goldwater. Just one moment, Senator.
How soon do you think you will have that information ?
Mr. Kennedy. We checked, and the Bureau has told us that he is
definitely not a citizen. He is an alien. We have been trying to get
IMPROPER ACTIVITIES IN THE LABOR FIELD 18501
fiirtlier details on it. We have been informed that they have an open
file at this time in connection with Mr. Morgano, and that further
information cannot be furnished to the committee.
Senator Goldwater. What is he doing in this country ?
Mr. Kennedy. I guess he is setting up a liouse of prostitution in
Porter County. I don't know what else.
Senator Goldwater. Is there some way that tliis man can be sent
back to the place from whence he came ?
Mr. Kennedy. I would think so. I don't know why some work has
not been done on it at an earlier time. We will show from his back-
ground and record that he has a long career of difficulties and trouble
with the law, and that it would appear that investigation should have
been made of him even at an earlier date than the present time.
Senator Goldwater. Let me ask you a question, Mr. Counsel, before
you get to that.
Is there any evidence any place along the line that any of the local
authorities or State authorities ever tried to get this man sent from
this country ?
Mr. Kennedy. We have requested that information from the Fed-
eral Government, and they have told us that they cannot give us any
information along those lines because it is now an open investigation.
We don't know how long it has been an open investigation, but they
will not furnish us any information other than he is now an alien.
We have requested to review the file, to determine just what the
reason was that some action had not been taken against this man at an
earlier time. They have, as I say, refused to give us the file, or refused
to allow us to review the file.
Senator Goldwater. Senator Curtis.
Senator Curtis. My question has been answered.
Mr. I^nnedy. We have been talking generally about some of the
people in Lake County. We have had some cooperation from some
of the authorities in Lake Comity.
As I understand, you also had some conversations with Mr. Morgano,
particularly about, for instance, the mayor of Gary, Ind., Mr. Clia-
charis?
Mr. Rayder. Mr. Chacharis.
Mr. Kennedy. Did Mr. Morgano say something about him?
Mr. Rayder. Well, Chacharis' name was brought up when I dis-
cussed Sam IJzelac and Metro Holovachka. He became rather irri-
tated at the word of Chacharis.
Mr. Kennedy. He made some statement about Mr. Holovachka,
did he not?
Mr. Rayder. Well, there had been quite a little trouble over there,
but I don't know really all the trouble that took place in Lake County.
Mr. Kennedy. Did he say as far as he was concerned Mr. Holo-
vachka was OK?
Mr. Rayder. Yes.
Mr. Kennedy. But as for Mr. Chacharis, the mayor of the city,
he was not pleased with him ?
Mr. Rayder. That is correct.
Mr. Kennedy. I would like to say, Mr. Chairman, that Mr. Cha-
charis, the mayor of Gary, has been extremely cooperative in the
investigation we have been conducting. It is indicated from Mr.
36751 — 59— pt. 53 6
18502 IMPROPER ACTIVITIES IN THE LABOR FIELD
Morgano's conversations with Mr. Kayder that Mr. Morgano, al-
though he approved of Mr. Holovachka, violently disapproved of Mr.
Chacharis, which is certainly a white mark for the mayor.
Could I call Mr. Duffy to give a little of the background of Mr.
Morgano ?
Senator Goldwater. Yes.
While Mr. Duffy is coming to the stand, Mr. Counsel, not being
a lawyer, I have to ask these questions, but how can a man who is
not a citizen of this country take advantage of our Constitution?
Mr. Kennedy. Well, the Constitution and the Bill of Rights is
not restricted to just citizens of the United States. It is applicable
to any — for instance, the fifth amendment — to anybody appearing
before a body, appearing in a "criminal case." They do not have to
testify against themselves.
It does not say that this right is restricted just to American citi-
zens. That right is available to anybody appearing before such a
body, under the interpretation of the Supreme Court. Under the
Constitution, it is limited to a "criminal case," but it has been inter-
preted by the Supreme Court to include congressional committees.
Senator Curtis. Mr. Chairman, I would like to ask Mr. Morgano
one question.
Mr. Morgano, you have been reading a paper before you. Where
did you get that paper?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Curtis. That is the paper I am referring to. Who prepared
it for you ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Senator Curtis. That is all.
TESTIMONY OF LaVEEN J. DUITY— Resumed
Senator Goldwater. Have you been sworn ?
Mr. Duffy. Yes, Senator.
Mr. Kennedy. Mr. Duffy, what have we found out as far as Mr.
Morgano is concerned ?
Mr. Duffy. I would like to give some information as to where he
was born, to put that in the record.
He was born in Calascibetta Caltanissetta, Italy.
Mr. Kennedy. The first is C-a-1-a-s-c-i-b-e-t-t-a, and the next is
C-a-1-t-a-n-i-s-s-e-t-t-a. That is in Italy.
Mr. Duffy. Correct. He was born on June 18, 1900.
Would you like to have me give the police record ?
Mr. Kennedy. Yes.
Mr. Duffy. He was arrested on December 23, 1931, for violation
of the National Prohibition Act and received a 30-day sentence in
the county jail in Crown Point, Ind.
Senator Goldwater. Do you know when he came to this country.
Mr. Duffy. Again, Senator, we have been unable to obtain that
information from the open file in the Chicago office that we have on
him.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18503
Mr. Kennedy. The Chicago office of the Immigration authorities.
Mr. Duffy. On January 5, 1939, Morgano was sentenced to 180
days for conspiracy to violate the internal revenue laws, in the Fed-
eral Penitentiary at Milan, Mich.
On June 14, 1941, Morgano was arrested for violation of the inter-
nal revenue liquor law and convicted and sentenced to 2 years in pris-
on. He was parolled December 6, 1942.
On September 1, 1948, Morgano was held for investigation by the
Police Department in Gary, Ind., because he obtained money under
false pretenses. He was released on September 2, 1948, without being
charged.
On September 11, 1952, Morgano was arrested by the Gary, Ind.,
Police Department on a gambling charge and released on September
12 after investigation.
On October 6, 1958, Morgano was arrested and charged with as-
sault and battery with attempt to commit manslaughter and for
carrying a gun without a permit. He was interrogated at Crown
Point, Ind., tried, convicted as charged, fined $200 and given a sus-
pended sentence.
On November 24, 1958, Morgano was arrested and held for investi-
gation on assault and battery with intent. Based on a lie detector
test taken at Keid Laboratories at Chicago, this investigation was
dropped.
Mr. Kennedy. Do we know who his close associates are in Chicago ?
Mr. Duffy. Yes; we are going to get into the activities of Tony
Pinelli, national syndicate hoodlum, connected with the Chicago
crime syndicate. We know as late as 1957 Mr. Morgano had certain
business relationships with Mr. Pinelli.
Mr. Kennedy. Who else ? Tony Accardo ?
Mr. Duffy. Well, Tony Accardo and Sam "Mooney" Giancana, the
Nos. 1 and 2 hoodlums in Chicago today.
Mr, Kennedy. He is also associated with them ?
Mr. Duffy. Yes.
Mr. Kennedy. And also associated with John Formusa from Holly-
wood, Calif. ?
Mr. Duffy. Yes.
Mr. Kennedy. And Gary, Ind. ?
Mr. Duffy. Yes.
We also have infonnation that Mr. Morgano served as a special
investigator for the Chicago Master Barbers Association from De-
cember 1953 to December 1954. We are trying to find out how he
got this particular job. We feel Mr. Pinelli was influential in having
him obtain this position.
Mr. Kennedy. Would you explain what the Barbers Association is ?
Mr. Duffy. The Chicago Barbers Association is similar in nature
to the Chicago Restaurant Association, which we went into at a prior
date, to keep in line and enforce the laws relating to the price of
haircuts and things such as that, negotiate contracts with the union
and that sort of thing.
Mr. Kennedy. And he worked for them, even with this record?
Mr. Duffy. With this record. He was a special investigator.
Mr. Kennedy. And also, as I imderstand, a public relations man?
Mr. Duffy. Our information is that he was nothing more than a
muscleman for him.
18504 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. "Wlio else worked for the Chicago Barbers Associa-
tion ? Have you any of those names ?
Mr. Duffy. Carlo Colonni.
Mr. Kennedy. Who is Carlo Colonni ?
Mr. Duffy. He is also a special investigator, even currently with
the Chicago Barbers Association. He is also in business with James
AUegretti. James Allegretti is a notorious Chicago hoodlum. They
run the C. & B. Meat Purveyors of Chicago, another syndicate opera-
tion in Chicago today.
Mr. Kennedy. We touched on them briefly during the Chicago
restaurant hearings ; is that right ?
Mr. Duffy. That is correct.
Mr. Kennedy. And the fact that there was some evidence that
restaurants and nightclubs in the Chicago area are forced to buy a
certain percentage of their meat from this company ?
Mr. Duffy. That is correct.
Mr. Kennedy. Do we know of any of the other people who worked
for the Chicago Barbers Association ?
Mr. Duffy. Yes. We have quite a few close friends of Mr. Pinelli
in with this particular association: Mr. Gruttadauro, who is a
nephew of Mr. Pinelli. He was also a special investigator for 1
week in 1953, with the Chicago Barbers Association.
Then in 1958, his brother, James Gruttadauro, also a nephew of
Pinelli, was retained by the Chicago Barbers Association and is cur-
rently still on the payroll.
We also have some other hoodlums, Mr. Frank Zizzo, who migrated
to Gary in 1957 to take over some of Mr. Pinelli's enterprises, gam-
bling enterprises, in Lake County. We will get into that later during
the course of these hearings.
Mr. Zizzo was also on the payroll of the Chicago Barbers Associa-
tion up mitil April 1, 1957, for a 3-year period.
There are a couple of other characters on there that have long rec-
ords. We will get into that a little later.
Mr. Kennedy. Can you give their names for me, please ?
Mr. Duffy. I am afraid I don't have them here. There is a Mr.
Dicks, who has a long record, who is still with them. There are a
couple of others, but I can't recall their names.
Mr. Kennedy. Joe Doto ?
Mr. Duffy. No.
There are around seven individuals that we found with a definite
link to Mr. Pinelli who had been on the payroll of the Master Barbers
Association.
We would like to know how they got these positions, and we think
Mr. Pinelli has something to do with it.
Mr. Kennedy. As yet we have no explanation as to why the Chi-
cago Barbers Association hires individuals either with police or crim-
inal records or closely associated with the underworld in Chicago.
Mr. Duffy. That is correct. We have examined their records
minutely. We have found no records of what they did with the Bar-
bers Association.
Mr. Kennedy. On any of these individuals ?
Mr. Duffy. Any of these special investigators. They filed no re-
ports. We found nothing that they have done for the association.
Some of those will be witnesses later in this hearing.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18505
Mr. Kennedy. This is the Barbers Association which negotiates the
contract with the union ; is that correct ?
Mr. Duffy. That is one of their functions.
Mr. I^NNEDY. It is a situation similar to what we found in the
cartage group in New York, and the Restaurant Association in Chi-
cago, and the jukebox industry generally throughout the country?
Mr. Duffy. That is correct.
Mr. Kj}nnedy. And with the linen supply industry in Detroit,
Mich.?
Mr. Duffy. That is correct.
Mr. Kennedy. On Morgano, further, he has a restaurant, is that
correct, the Villa Pizza Restaurant ?
Mr. Duffy. Yes. Mr. Morgano has an interest in the Ricochet
Restaurant at 45th and Broadway, Garj?-, Ind. This is the location
where Mr. Morgano shot Mr. Sam Uzelac, another hoodlum asso-
ciated with Morgano, on October 5, 1958.
Mr. Kennedy. Where he received the $200 fine ?
Mr. Duffy. That is correct.
Mr. Kennedy. Isn't that really the major reason why you didn't
make an arrest of Mr. Morgano at the time he made this approach
to you, that you felt without some public support that Mr. Morgano
would again be released with a light sentence ?
Mr. Rayder. That is correct.
Mr. IvENNEDY. In the Villa Pizza Restaurant, he has been a part-
ner of Tony Pinelli, Jack Doyle, and John Formusa ?
3.1r. Duffy. The records that we have examined have not shown
that he had a direct interest in it. We know he has been around
there a lot, and we think he has an interest, but there is nothing in
the record.
Mr. Kennedy. Then he has an interest in the College Inn Restau-
rant ; is that right ?
Mr. Duffy. Located on the campus at Valparaiso University.
Mr. Kennedy. This man, Mr. Chairman, has an interest in the Col-
lege Inn Restaurant which is actually located on the campus of Val-
paraiso University, this man with this record who is not even a citizen
of the United States, who has this background and who was planning
to open up a house of prostitution in Porter County. He is the one
that runs the restaurant at Valparaiso University.
Senator Goldwater. Did you find out in your investigation who in
the university or college gives the permits or grants the leases?
Mr. Duffy. We haven't looked into that. Senator.
Senator Goldwater. That would be interesting to know, how a man
like this can ever get on a campus, let alone run a business on it.
I want to get back to this $200 fine for a moment. At what level
of court was that fine levied ?
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
Mr. Sinclair. Senator, it is the Lake County criminal court, a
State court, a coimty court.
Senator Goldwater. Is the judge an elected judge or an appointed
judge?
Mr. Sinclair. The judge is an elected judge.
18506 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Goldwater. Is this the first instance of a light fine being
given for that serious an offense ?
Mr. Sinclair. No, Senator, it follows a pattern.
Senator Goldwater. Is the judge still on the bench ?
Mr. Sinclair. The judge is still on the bench.
Senator Goldwater. How long has he been there ?
Mr. Sinclair. I am not certain, Senator, but I would say he is
serving his third term as judge, criminal court judge.
Senator Goldwater. Have you other examples of people like this
being let off with light fines or light sentences ?
Mr. Sinclair. Not available. Senator.
Senator Goldwater. I think it would be interesting to get that, not
necessarily to make it public, but I would like to see it for my own
information. Then I will decide if we want to make it public.
Mr. Sinclair. Yes, sir.
Mr. Kennedy. Isn't it a fact that on occasion the State police have
tried to move into Lake County in order to clean the matter up, and
that after arrests are made for this gambling or for some of these
other activities, that the prosecution then has to be turned over to
Holovachka and brought before possibly a more lenient judge, and
that these people get off with very minor fines ?
Mr. Sinclair. That is true. He has to approve the affidavits on
which the arrests were predicated. On the basis of that, the prosecu-
tion is very light.
Mr. Kennedy. So Holovachka had complete control over the county
as to wlio was going to be prosecuted ; is that correct ?
Mr. Sinclair. That is correct.
TESTIMONY OF LaVERN J. DUFFY— Resumed
Mr. Duffy. There is one other thing. We find that, from our in-
vestigation, there has been a lot of violence in the Gary area, and in
Valparaiso, relating to pizza places. We know definitely that Mr.
Pinelli had a pizza place in Gary also, and Mr. Morgano had a pizza
place in Gary. There were a lot of dynamitings and violence in
the area relating to pizza places.
We have no proof, but there is some evidence, conclusive proof we do
not have, that Mr. Pinelli and Mr. Morgano were involved in these
actions in the area relating to violence.
Mr. Kennedy. Wliat is the significance of a pizza restaurant? Is
that the first step in the establishment of a gambling place in a
restaurant ?
Mr. Duffy. It seems to be indicated.
Mr. Kennedy. Have we interviewed and talked to individuals in
the Lake County-Porter County area who have been approached for
that?
Mr. Duffy. That is correct.
Mr. Kennedy. Approached to set up a gambling establishment?
Mr. Duffy. It seems to be a front to set up their gambling operations
in back. That is apparently what it is.
Mr. Kennedy. Do we also find that
Senator Goldwater. Before you get away from this, I want to re-
peat my request for information as to who is responsible for leasing
property at this college. Again, it does not have to be a part of the
IMPROPER ACTIVITIES IN THE LABOR FIELD 18507
public record, but I just want to know how a fellow like this can ever
get away with renting anything on an American college campus.
Mr. Kennedy. We will get that, Mr. Chairman.
Senator Curtis. Might I ask Mr. Dutfy a question ?
Has Mr. Morgano been tied up in anything connected with labor-
management fields that you know of at this time, aside from the
Master Barbers Association ?
Mr. Duffy. No, Senator. We loiow nothing other than that.
Mr. Kennedy. Morgano attempted in 1953, together with Joe
Caprio, to organize a prospective association for restaurant operators
in Gary and Lake County, did he not ?
Mr. Duffy. That is correct.
Mr. Kennedy. And Caprio was subsequently found in the trunk
of an automobile in INIichigan ?
Mr. Duffy. That is correct.
Mr. Kennedy. And thereafter the protective association was sus-
pended ?
Mr. Duffy. That is correct.
TESTIMONY OF THOMAS MOEGANO— Resumed
Mr. IvjENNEDY. Do you know how he got in the trunk, Mr. Morgano ?
Mr. Morgano. I respectfidly decline to answer under the provision
of the fifth amendment to the Constitution of the United States.
Mr. Kennedy. When you were talking to Mr. Rayder, you explained
that anybody that opposed you would end up in the trunk of an
automobile.
Mr, Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reason of the facts that my answer might tend to incriminate me.
Mr. Kennedy. Did you offer Mr. Rayder $100,000 as a payoff mini-
mum, $50,000 for himself and $50,000 to be passed on to other public
officials of Porter County ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States by
reason of the fact that my answer might tend to incriminate me.
Mr. Kennedy. On page 14 of the transcript, you say —
You can make some money. We'll make some real money. * * * Let 'em bust
in — let eveiTbody bust in. I'll take care of 'em. Nobody gonna bust in on me.
What did you mean by that ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reason of the fact that my answer might tend to incriminate me.
Mr. Kennedy (reading) :
Everybody has got to be cleaned — corner to corner. Not even a fly gonna
come in.
Is that right, Mr. Morgano ?
Mr. Morgano. I respectfully decline to answer under the provi-
sion of the fifth amendment to the Constitution of the United States.
Mr. I^NNEDY. Then on the house of prostitution :
Yeah, one big house. * * * Well, I gotta make some money to pay you
people.
18508 IMPROPER ACTIVITIES IN THE LABOR FIELD
You are talking about setting up a house of prostitution.
Mr. MoRGANO. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by-
reason of the fact that my answer might tend to incriminate me.
Mr. Kennedy. Then,
So long as the D.A. and the sheriff says the county is mine, then I'll take
care of it in taking things over.
Is that right, Mr. Morgano ?
Mr. Morgano. I respectfully decline to answer under the provision
of the fifth amendment to the Constitution of the United States, by
reason of the facts that my answer might tend to incriminate me.
Senator Goldwater. Speaking for the committee and for myself,
I think this is another evidence where local law enforcement has fallen
down. I think the Federal Government might have some blame in
this, too. I hope that the local authorities of Indiana, the State of
Indiana, and the Federal Government, will move immediately against
this man.
I don't think there is an American in this room that can be proud
this morning of a man who has come here from Italy, murdered and
robbed and stolen, operates houses of prostitution near a college, and
our Government allows him to go scot free. I hope this committee
and the staff will insist that this Immigration Service get into this im-
mediately and take full strength of justice against this man.
That is all I have.
Have you anything further ?
Senator Curtis. I have nothing further.
Mr. Kennedy. That is all, Mr. Chairman.
Would you keep Mr. Morgano under subpena, Mr. Chairman ?
Senator Goldwater. Mr. Morgano, you recognize that you are un-
der subpena ?
Mr. Morgano. Yes.
Senator Goldwater. And that you will keep yourself available for
this committee until released ?
Mr. Morgano. Yes, sir.
Mr. Kennedy. And you will return when notified at the address you
have given to us ?
Mr. Morgano. Yes, sir.
Senator Curtis. I have one more question.
Did you ever make an application to become a citizen of the United
States?
Mr. Morgano. I respectfully decline to answer under the provisions
of the fifth amendment of the Constitution of the United States by
reason of the fact that my answer might tend to incriminate me.
Senator Curtis. It wouldn't incriminate you. We will have to let
the record stand, I guess. That is all, Mr. Chairman.
Senator Goldwater. I might say before we recess for the noon
period that Mr. Rayder will remain under subpena. He is also under
the protection of this committee.
Any time that any threats are made against you or to you, or any
indication that harm might come to you, you make it known immedi-
ately.
Mr. ICennedy. Mr. Chairman, could I call on one witness who will
be relatively short ?
IMPROPER ACTWITIES IN THE LABOR FIELD 18509
Senator Goldwater. All right.
You are excused, but remain where we can get hold of you.
Mr. MoRGANO. Can I go back to Gary, or do I remain in Washing-
ton?
Senator Goldwater. Just stick around until we make up our minds.
Mr. Kennedy. Mr. Lester Hineline.
Senator Goldwater. Do you solemnly swear the evidence you shall
give before this committee shall be the truth, the whole truth, and
nothing but the truth, so help you God ?
Mr. Hineline. I do.
TESTIMONY OF LESTER HINELINE
Senator Goldwater. Give your name, please.
Mr. Hineline. Lester Hineline.
Senator Goldwater. And your address ?
Mr. Hineline. Rural Route 1, Chesterton, Ind.
Senator Goldwater. And your occupation ?
Mr. Hineline. Nothing right now.
Senator Goldwater. You may proceed.
Mr. Kennedy. Mr. Hineline, you were former sheriff of Porter
County ; is that right ?
Mr. Hineline. Right,
Mr. Kennedy. And you were sheriff from 1949 through 1958 ?
Mr. Hineline. Right.
Mr. Kennedy. Were there efforts made while you were sheriff for
this outside group to try to come in and take over the vice in Porter
County?
Mr. Hineline. No ; I never had any threats like that. I only had
two. Well, I didn't have them. One was Mr. Morgano here, who
threatened to bomb Parry if he didn't put in a pizza kitchen.
Mr. Kennedy. That was reported to you ?
Mr. Hineline. By Ed Parry.
Mr. Kennedy. That Mr. Morgano, or through Morgano, that
Parry's restaurant was going to be bombed unless he agreed to put
in a pizza place in his restaurant ?
Mr. Hineline. That was a telephone call. We cannot verify who
it was from, but we took it for granted that is who it was.
Mr. Kennedy. Because Morgano had approached Parry on an
earlier occasion about putting in a pizza place in the restaurant?
Mr. Hineline. That is what Pari-y said ; yes.
Mr. Kennedy. Wliere was Parry's restaurant ?
Mr. Hineline. Right across the street from the jail. It is on the
corner of Franklin and Indiana.
Mr. Kennedy. Was there another occasion? Were you ever ap-
proached on any other occasion ?
Mr. Hineline. No. Only the house of prostitution that you spoke
about down at Kouts, when they wanted to move in there. But that
was some other outfit.
Mr. Kennedy. Were you offered something in connection with
that?
Mr. Hineline. Yes ; I was offered $10,000 to let it run.
Mr. Kennedy. Where was this group coming from that was going
to set this up ?
18510 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. HiNELiNE. I did not know. Mr. Sinclair told me that it came
from Chicago Heights. He is the one that f onnd that out.
Mr. Kennedy. Who was it that spoke to you about the $10,000?
Mr. HiNELiNE. That I do not know.
Mr. Kennedy. Was it a telephone call or what ?
Mr. HiNELiNE. No. They came to the office, at the jail, but I did
not know their names. I wasn't interested.
Mr. Kennedy. "VVlien was it ?
Mr. HiNELiNE. About 2 years ago, I imagine, when that was.
Mr. Kennedy. Do you think now, Mr. Hineline, that there will be
a serious effort in Porter County to take action against Mr. Morgano
and some of his associates ?
Mr. Hineline. The way it looks, there must be. Everything is
gone.
Mr. Kennedy. Do you think now that there will be ?
Mr. Hineline. I do ; yes.
]Mr. Kennedy. Will you go back to Porter County and take what-
ever steps you can to make sure that there is some action taken ?
Mr. Hineline. I will ; anything that I can do.
Mr. Kennedy. That is, in connection with what has been revealed
here this morning and in connection with the rest of Mr. Morgano's
activities in Porter County ?
Mr. Hineline. I certainly will.
Mr. Kennedy. And any of the vice or gambling that is going on
at the present time ?
Mr. Hineline. Yes.
Mr. Kennedy. That is all, Mr. Chairman.
Senator Goldwater. The committee will stand in recess until 2
o'clock.
(Members of the select committee present at time of recess: Sena-
tors Goldwater and Curtis.)
(Whereupon, at 12:03 p.m., the select committee recessed, to re-
convene at 2 p.m. the same day.)
AFTERNOON SESSION
(The select committee reconvened at 2 p.m.. Senator Frank Church
presiding. )
Senator Church. The heari-ing will come to order.
(Members of the select committee present at time of reconvening:
Senators Church and Curtis.)
Senator Church. The Chair would like to explain that our distin-
guished chainnan. Senator McClellan, is indisposed today and, for
this reason, has not been able to be present during today's hearings.
We hope that he wnll be better soon and will be back to take charge.
Our first witness this afternoon is Mr. William Plunkett.
Mr. Plunkett, will you come forward, please? Will you raise your
right hand ?
Do you solemnly swear that the evidence you give before this select
committee will be the truth, the whole truth, and nothing but the truth,
so help you God ?
Mr. Plunkett. I do.
IMPROPER ACTWITIES IN THE LABOR FIELD 18511
TESTIMONY OF WILLIAM PLUNKETT
Senator Church. Give your name, your address, and present occu-
pation, please.
Mr. Plunkett. My name is William Plunkett. I live at 430 High-
land Street, in Hammond, Ind. Presently I manage an autowash in
that city.
Senator Church. Thank you. Mr. Counsel ?
Mr. Kennedy. Mr. Plunkett, on or around the 15tli of August 1958,
you had placed two pinball machines in the restaurant of Miss Harriet
Zontos ; is that correct ?
Mr. Plunkeit. That is correct.
Mr. Kennedy. That is Harriet Z-o-n-t-o-s, Superburger Restau-
rant, located at 5530 Calumet Avenue, Hammond, Ind. ?
Mr. Plunkett. That is correct.
Mr. Kennedy. Were you an operator of pinballs at the time?
Mr. Plunkett. No.
Mr. Kennedy. But you did make arrangements to place these two
machines ?
Mr. Plunkett. That is correct.
Mr. Kennedy. You had purchased these two machines in Chicago
for a total of about $600 ; is that right ?
Mr. Plunkett. That is correct.
Mr. Kennedy. Or $650. Shortly after you placed the machines,
did you receive a telephone call from Harriet Zontos that certain law-
enforcement officials had confiscated the machines ?
Mr. Plunkett. That is correct.
Mr. Kennedy. They had come in on Saturday, November 8, and
taken the machines ; is that right ?
Mr. Plunkett. That is correct.
Mr. Kennedy. Had they shown her a writ or furnished her with a
receipt for the machines they took ?
Mr. Plunkett. No.
Mr. Kennedy. Do you know what reason tliey gave for taking the
machines ?
(At this point Senator Capehart entered the hearing room.)
Mr. Plunkett. To be honest, I don't know.
Mr. Kennedy. Tliey just came in and took the machines?
Mr. Plunkett. That is correct.
Mr. Kennedy. Did you find out who had taken them ?
Mr. Plunkett. The man who took the machines represented him-
self as Mr. Walter Conroy.
Mr. Kennedy. He was from the Lake County public prosecutor's
office ; is that right ?
Mr. Plunketi\ That is right.
Mr. Kennedy. Did you contact Mr. Conroy then to find out what
had happened to your machines ?
Mr. Plunkett. I tried on three occasions to contact him by tele-
phone afterwards and was unsuccessful.
Mr. Kennedy. You never got your machines back ?
Mr. Plunkett. No, sir.
Mr. Kennedy. You never knew what happened to them?
Mr. Plunkett. No, sir.
18512 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You never received any order or any notification
from any court or from any law-enforcement official ?
Mr. Plunkett. No, sir.
Mr. Kennedy. Your machines were picked up, confiscated, and you
never heard again about them ; is that right ?
Mr. Plunkett. That is correct.
Senator Curtis. Were these machines gambling machines ?
Mr. Plunkett. They were the Bingo-type machines; yes, sir.
Senator Curtis. Were they in lawful operation at that time ?
Mr. Plunkett. I don't know how lawful they were. They were
operating across the street, the same type of machine, by another
operator.
Senator Curtis. Wlio was the other operator ?
Mr. Plunkett. That I couldn't tell you, sir.
Senator Curtis. That is all.
Mr. Kennedy. You never tried to put any machines back in the
restaurant ?
Mr. Plunkett. No, sir.
Senator Church. Did you inquire, Mr. Plunkett, of the prosecu-
tor's office, or did you make any attempt to get these machines back ?
Mr. Plunkett. No, sir.
Senator Church. Were you the owner of these two machines ?
Mr. Plunkett. Yes, sir.
Senator Church. After this incident occurred, did you acquire any
other machines of this kind or did you make any further effort to
set machines in locations in that Lake County area ?
Mr. Plunkett. No, sir.
Senator Church. You figured that you had lost enough ?
Mr. Plunkett. That is right.
(At this point Senator Curtis withdrew from the hearing room.)
Senator Church. To your present knowledge, have machines of
the same character continued to be operated in Lake County? Are
they now being operated there ? Do you know ?
Mr. Plunkett. At the present time, I couldn't say.
Senator Church. Following this for some time afterward, to your
knowledge, did machines of this character continue to be located in
the county and continue to be played openly and publicly ?
Mr. Plunkett. Yes, sir.
Mr. Kennedy. Did you say they are not being played ?
Mr. Plunkett. I said I couldn't say. I actually haven't seen any
machines in operation recently.
Mr. Kennedy. Mr. Chairman, I might say that from the information
we have, the machines, as of last Wednesday, were picked up in Gary,
Ind., in Lake County, just at the time of the announcement of these
hearings.
Senator Church. Our information is that all these machines have
been picked up just as of last Wednesday ?
Mr. Kennedy. They initially were picked up when we began our
investigation some months ago, began our hearings on pinball machines
generally throughout the United States, and after we had been going
for a short period of time they were put back into operation.
From what we understand, they were picked up again last Wednes-
day, and they are no longer operating as of some 5 or 6 days ago.
Senator Church. I see. Senator Capehart ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18513
There are no further questions. Thank you very much, Mr.
Plunkett.
Mr. Kennedy. Mr. Chairman, Mr. Plunkett testified that there were
some machines right across the street that were operating. I would
like to call Mr. Sinclair, because after we received this information
from Mr. Plunkett, we went to find out what had happened to the
machines across the street. I would like to have Mr. Sinclair testify
as to that.
Senator Church. Have you been sworn in the course of this hearing,
Mr. Sinclair ?
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
Senator Church. Identify yourself for the record and proceed.
Mr. Sinclair. My name is Richard Sinclair, and I am a member of
the professional staff of the committee, Mr, Chairman.
Mr. Kennedy. After we learned about Mr. Plunkett having his
machines picked up, and in accordance with what we had found out
initially, that there had been favoritism toward this so-called syndi-
cate group, did we find out what had happened to the machines across
the street from the Zontos Restaurant ?
Mr. Sinclair. We contacted the owner of the Golden Gate Inn,
directly across the street from the Superburger Restaurant or drive-in,
and we found that they did have in operation two machines there,
which netted him an income of $10,000 a year.
Mr. Kennedy. $5,000 from each machine ?
Mr. Sinclair, $5,000 from each machine,
Mr, Kennedy, That would mean that these machines totaled at least
$20,000; is that right?
Mr. Sinclair. The gross take would have been $20,000 for the two
machines,
Mr, Kennedy. That would be the payoffs on the machines ?
Mr. Sinclair. That would be the net receipts to the operator and to
the owner. The payoffs would have been in addition.
Mr. Kennedy. The payoffs, meaning the payoffs to the person who
played them, would be in addition?
Mr. Sinclair. Right.
Senator Church. You mean that the income that the location owner
realized from the two machines was about $10,000 in 1 year's time ; is
that right?
Mr. Sinclair. That is right, sir.
Senator Church. And that would represent about half of the take
of these two machines in a year's time, inasmuch as the location owner
would split the take with the operator ; is that correct ?
Mr. Sinclair. Senator, that would be correct if we included one
other element, and that would be the payoff, which is the top money.
In other words, the total take for the machines would be more then.
You have to deduct from that the payoffs, that is, the hits.
Senator Church. In other words, the machine pays off as a slot
machine will pay off from time to time to the player of the machine,
except that with these machines the actual money is passed over the
counter rather than coming out in coin form from the machine itself ?
Mr. Sinclair. That is correct, sir.
18514 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Church. And after you deduct the amount of tlie payoffs
that were actually made to the players, the net take of these two
machines in a year's time was $20,000 ?
Mr. Sinclair. That is exactly the situation.
Senator Church. And which was divided between the location
owner and the operator of the machines.
Mr. Sinclair. Eight.
Mr. Kennedy. There was a Federal gambling stamp on each one
of these machines ?
Mr. Sinclair. That is right.
Mr. Kennedy. Did we find out who owned these machines? Did
we find out it was the Sohacki-Welbourn group ?
Mr. Sinclair. Our investigation did show that, that it was the
Sohacki-Welbourn group.
Mr. Kennedy. And there was no evidence or information that these
machines had ever been bothered by the public prosecutor's office?
Mr. Sinclair. The owner of the tavern advised me that there had
been no complaint made of him about the operation of these machines.
Mr. Kennedy. In fact, Mr. Sinclair, this is of extreme importance,
from an examination of the records at the office of the public prose-
cutor, and from our own independent investigation, do we find that
there never was any confiscation of any machines belonging to the
Sohacki-Welbourn group up until the time we began our investigation ?
Mr. Sinclair. During 5 years of operation there were no confisca-
tions made or shown, reflected on the books of this Sohacki-Welbourn
group. The first reflection in the i-ecords to the effect that machines
had been confiscated was in December of 1958, after our investigation
had started.
Mr. Kennedy. But there were all of these raids that were made on
the independent group machines ?
Mr. Sinclair. The raids on the independents date back to 1955;
July 30, 1955.
Mr. Kennedy. So the result is now in the city of Gary and in Ham-
mond, Ind., this is the only group that really operates at the present
time?
Mr. Sinclair. That is correct.
Mr. Kennedy. That is because of the fact that the other competition
has been put out of business by the public prosecutor's office?
Mr. Sinclair. That is as we see it.
Mr. Kennedy. That is what we have found ?
Mr. Sinclair. Eight.
Senator Church. There is no question but what thase machines
were illegal under Indiana law; is there, Mr. Sinclair?
Mr. Sinclair. There is no question, Senator.
Senator Church. So that the whole pattern here, over a long period
of years, is that the public prosecutor's office, charged with the fair
and ec[ual enforcement of the law in the public interest, was moving
in and eliminating these machines under the color of the law as illegal,
when the machines were not owned by the syndicate, but when the
machines were owned by the syndicate, they were permitted to con-
tinue and to be operated in violation of the law and were never inter-
fered with or moved in on or otherwise removed from these locations
by the public prosecutor ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18515
Mr. Sinclair. That is true. They were kept in the gray zone, the
zone between legal and illegal. x\ll operators that we contacted recog-
nize these machines as illegal devices, and knew that upon a moment's
notice they conld be raided or they could be confiscated.
They operated strictly at the discretion of the office of the county
prosecutor.
Senator Church. Was there any mechanical difference of any kind
between the machines that were owned by the syndicate and the ma-
chines that the prosecutor moved in on and took out? Were these es-
sentially the same kind of mechanical machines so that there was no
basis of differentiation as between the machines themselves ?
Mr. Sinclair. That is correct. They all register free games, free
plays.
Senator Church. Senator Capehart ?
Senator Capehart. I have no questions.
Mr. Kennedy. Mr. Chairman, it might be well if we put the law in
the State of Indiana into the record at this time in connection with this
situation during the period of 1953.
Senator Church. Yes. If you have someone who can testify and
identify the statutory provisions, it would be very appropriate to in-
clude them in the record at this time.
TESTIMONY OF La VEEN J. DTJITY— Resumed
Mr. Duffy. Searching the law applicable to pinball machines in
Gary, we found from the Indiana State statutes that all types of pin-
ball machines that pay off are illegal. In 1935 the first law was passed
to relate to this. It is "Chapter 23. Gambling," volume 4, part 2,
"Burns Indiana Statutes," page 538.
I will not read all of the section, but it is very clear from this provi-
sion that all types of machines where you insert a coin with the pos-
sibility of receiving something through chance, gifts or tokens, receive
credits, allowances, anything of value, is regarded as a slot machine
and illegal.
In fact, the attorney general made this statement, which is also in the
Burns annotated, the opinion of the attorney general :
Scoring machines in which a nicliel is placed and a number of balls, shot at holes
for the purpose of determining a score, or a score determines whether or not
the player is to be rewarded and the amount of the reward, is a gambling device
and illegal.
So as of 1935, all types of machines in this category would be illegal.
That law continued up until 1955.
Mr. Kennedy. So definitely from 1935 to 1955 these pinballs were
illegal ; is that correct ?
Mr. Duffy. That is correct.
Mr. Kennedy. The law was changed in 1955 ?
Mr. Duffy. The law was modified in 1955, and there was a sleeper
put in the law which allowed gambling-type pinball machines which
record right of replay to be legal. This was a temptation to the
location owner because now he could run up a number of games on
the machines and he would have to pay off in order to get the man
away from the machine. Otherwise he would be playing it all day
and he wouldn't be making any money.
18516 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. KJENNEDY. So it was in 1955 that the law was changed and did
not make pinballs per se illegal. Gambling was illegal so that if a
payoff was seen, was witnessed, that would be illegal and punishable
under the law. But pinball machines per se, were not; is that
correct ?
Mr. Duffy. That is correct.
Mr. Kennedy. Gambling was still illegal and if these machines
paid off, the public prosecutor could move in and arrest the individual
that was making the payoff ; is that right ?
Mr. Duffy. That is right.
Mr. Kennedy. So the gambling was illegal, but the machine just
being on location was not illegal ?
Mr. Duffy. That is correct.
Mr. Kennedy. But that law, in turn, was changed in 1957 ; is that
correct ?
Mr. Duffy. In 1957 the law was modified again. They wanted
to correct this abuse of recording devices on these machines. I will
read this particular section.
Provided, in the application of this definition, an Immediate and unrecorded
right to replay mechanically conferred on players of pinball machines and
similar amusement devices shall be presumed vi^ithout value.
This was to correct all types of recording devices on these ma-
chines. It made these machines, per se, gambling devices and viola-
tions of the law.
Mr. Kennedy. I think that is what was pointed out yesterday,
when they have these recording devices, that is what is illegal. That
is what happened in 1957, so that the machines themselves were illegal
from 1935 to 1955, and from 1957 on. Between 1955 and 1957 there
had to be, under the intepretation of the law, a witness of a payoff.
But now the machines are, per se, illegal.
Senator Church. I think that summarizes the applicable Indiana
law during the period in question. Without objection, the actual
provisions of the statute and the excerpts from the attorney general's
opinion that Mr. Duffy referred to will be incorporated in the record
at this point. Of course, the law can speak for itself.
(The material referred to follows :)
The following 1935 Indiana State statute concerning coin-operated pinbaU
machines is quoted from "Chapter 23, Gambling," volume 4, part 2, "Burns
Indiana Statutes," page 538 :
"Sec. 10-2327. Slot machine defined: Any machine, apparatus, or device is
a slot machine or device within the provisions of this act if it is one that
is adapted, or may readily be converted into one that is adapted, for use in
such a way that, as a result of the insertion of any piece of money or coin
or other object such a machine or device is caused to operate or may be op-
erated, and by the reason of any element of chance or of other outcome of such
operation unpredictable by him, the user may receive or become entitled to
receive any piece of money, credit, allowance or thing of value, or any check,
slug, token or memorandum, whether of value or otherwise, which may be
exchanged for any money, credit, allowance or thing of value, or which may be
given in trade, or the user may secure additional chances or rights to use such
machine, apparatus or device, even though it may, in addition to any element
of chance or unpredictable outcome of such operation, also sell, deliver or pre-
sent some merchandise, indication of weight, entertainment, or other thing
of value (Acts 1935, ch. 3212, p. 1539) .
"Opinions of attorney general : Scoring machine in which a nickel is placed
and a number of balls shot at holes for the purpose of determining the score,
IMPROPER ACTIVITIES IN THE LABOR FIELD 18517
where the score determines whether or not the player is to be rewarded and
the amount of the award, is a gambling device and illegal (1935, p. 23)."
In 1955 the State legislature passed an amendment to the 1935 act. The
pertinent section is quoted from "Chapter 23. Gambling," volume 4, part 2,
"Burns Indiana Statutes," p. 539.
"10-2330. Definitions: As used in this Act (10-2329—10-2336) :
" * * * (3) 'Professional gambling' means accepting or offering to accept for
profit, money, credits, deposits, or other things of value risked in gambling, or
any claims theret)n or interest therein. Without limiting the generality of
this definition, the following shall be included : * * * pintail machines which
award anything other than an immediate right of replay.
"(4) 'Gambling device' means any mechanism by the operation of which a
right of money, credits, deposits or other things of value may be created, in
return for a consideration, as the result of the operation of an element of
chance; any mechanism which, when operated for a consideration does not
return the same value or thing of value for the same consideration upon each
operation thereof. But in the application of this definition, an immediate right
of replay mechanically conferred on players of pinball machines and similar
amusement devices shall be presumed to be without value."
The 1955 amendment to the 1935 pinball law made "free plays" legal for the
first time under Indiana State law. The language in the 1955 amendment is
clear on this point, "immediate right of replay mechanically conferred on
players of pinball machines * * * shall be presumed to be without value."
In order to correct the abuses allowed from the 1955 amendment to the 1935
law, the 1957 Indiana State Legislature again passed additional legislation con-
trolling the operation of pinball machines. The following portion of Chapter 23 :
Gambling, is quoted from the 1957 Cumulative Pocket Supplement Burns Anno-
tated Indiana Statutes, volume 4, part 2, page 5 :
"Section 10-2330. Definitions :
* * * (3) Professional gambling means accepting or offering to accept, for
profit, money, credits, deposits, or other things of value risked in gambling, or
any claims thereon or interest therein. Without limiting the generality of this
definition, the following shall be included : pinball machines which award any-
thing other than an immediate and unrecorded right of replay.
" (4) Gambling device means any mechanism by the operation of which a right
to money, credits, deposits, or other things of value may be created, in return
for a consideration, as the result of the operation of an element of chance ; * * *
Provided, That in the application of this definition an immediate and unrecorded
right to replay mechanically conferred on players of pinball machines and similar
amusement devices shall be presumed to be without value."
The 1957 law was passed to correct the "payoff" abuse which resulted from the
number of replays run up on the pinball machines and the replays that Were
being redeemed in cash. The 1957 law made it illegal for pinball machines to
be used in Indiana that recorded replays. The law says in order for the pinball
machine to be legal it can only return to the player "an immediate and unrecorded
right to replay."
The following part of the United States Internal Revenue Code dealing with
occupational tax on coin-operated devices is quoted in part :
"Section No. 4461.— Iiiipositidn of Tax :
"There shall be imposed a special tax to be paid by every person who main-
tains for use or permits the use of, or any place or premises occupied by him,
a coin-operated amusement or gaming device at the following rates :
"(1) $10.00 a year, in the case of a device defined in paragraph (1) of section
4462(a).
"(2) $250.00 a year in the ca.se of a device defined in paragraph (2) of section
4462(a) and
"(3) $10.00 or $250.00 a year, as the case may be, for each additional device
so maintained or the use of which is so permitted. If one such device is replaced
by another, such other device shall not be considered an additional device."
"Section No. 4462 — Definition of Coin-Operated Amusement or Gambling
device :
"(a) In general. — As used in sections 4461 to 4463, inclusive, the term 'coin-
operated amusement or gaming device' means —
"(1) Any amusement or music machine operated by means of the inser-
tion of a coin, token, or similar object, and
"(2) So-called 'slot' machines which operate by means of insertion of
a coin, token, or similar object and which, by application of the element of
36751 — 59— pt. 53 7
18518 IMPROPER ACTIVITIES IN THE LABOR FIELD
chance, may deliver, or entitle the person playing or operating the machine
to receive cash, premiums, merchandise, or tokens."
Mr. Kennedy. It might be of interest to point out, as we did yester-
day, that for instance, in 1954, when the machines themselves were
illegal, there were over $1 million in collections in that year alone
from these machines which were operating.
Mr. Herman Goot. Mr. Chairman.
Senator Church. Mr. Herman Goot.
Raise your right hand, 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. GooT. I do.
TESTIMONY OF HERMAN GOOT
Senator Church. Please give your name, your residence, and your
occupation, Mr. Goot.
Mr. GooT. Herman Goot, 5008 Calumet Avenue, Hammond, Ind.
I am a tavern owner.
Senator Church. Thank you, Mr. Goot.
Mr. Kennedy, proceed.
Mr. Kennedy. JNIr. Goot, you have operated for the past 10 years,
or had operated for approximately 10 years, a tavern in the 5000 block
of Calumet Avenue, Hammond ?
Mr. Goot. That is right.
Mr. Kennedy. Do you still operate that tavern ?
Mr. GooT. Yes ; I do.
Mr. Kennedy. In the year 1955 you were in the jukebox-pinball
machine business in the Hammond area ?
Mr. GooT. Yes ; I was.
Mr. Kennedy. You had a partner at that time by the name of
Mr.Tarre?
Mr. GooT. That is right.
Mr. Kennedy. In 1955, in that year, you sold out your pinball
operation ?
Mr. GooT. Yes ; we did.
Mr. Kennedy. Why did you sell out your pinball operation ?
You were distributing pinballs as well as being in the tavern busi-
ness. Why did you sell out your pinballs ?
Mr. GooT. Well, we went in business when the new law came into
effect in 1955, 1 believe it was the 1st of July, and after we were in it
for 3 or 4 weeks our locations were being bothered, saying that they
were paying off on the machines, and they were illegal.
Mr. Kennedy. You had approximately 56 pinball machines ?
Mr. GooT. Yes, sir.
Mr. Kennedy. And then you started, after you went into business,
to being raided by the representatives of the public prosecutor's office ;
is that right?
Mr. GoOT. Well, they eventually picked up machines from three
locations.
]Mr. Kennedy. TSHiy didn't you remain in business ? Wliat was the
reason that you got out ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18519
Mr. GooT. Well, we were being forced out. We were losing our
machines.
Mr. Kennedy. Who was forcing you out ?
Mr. GooT. The machines were picked up from three locations.
Mr. IvENNEDY. Was that sullicient to force you out of business?
Mr. GooT. Well, the other locations had also been warned.
Mr. IvENNEDY. Who was forcing — what I am trying to find out is
who was forcing you out of business, Mr. Goot.
Mr. GooT. Mr. Conroy was going to the different locations.
Mr. ICennedy. Who is Mr. Conroy ?
Mr. GooT. lie is tlie investigator for the prosecutor's office.
Mr. IvENNEDY. And he is the one who was conducting the raids on
your pinball machines?
Mr. GooT. Yes, sir.
Mr. Kjennedy. And picking them up ; is that right ?
Mr. GooT. That is right.
Mr. IvENNEDY. Ultimately you sold out to the Hammond Sales Co.
for some $20,000 ; is that right?
Mr. GooT. Well, I don't know. My partner handled that transac-
tion.
Mr, I^NNEDY. Did you know who owned that company ?
Mr. GooT. No, I didn't.
Mr. IvENNEDY. Did you know it was owned by Mr. George Wel-
bourn ?
Mr. GooT. No. I have never met the man ; never heard of him.
Mr. Kennedy. It was the efi'orts of the public prosecutor's office that
ultimately led you to sell out your machines ; is that right.
Mr. GooT. That is right, sir.
Mr. Kennedy. Did you find that shortly after your own machines
were picked up, that this so-called syndicate operation machines came
in and replaced them ?
Mr. GooT. Well, in the locations where we sold out our machines
were left in there.
Mr. Kennedy. I am talking about prior to the time you sold out,
where you lost your three locations.
Did you find that the syndicate machines came in and replaced
those?
Mr. GooT. No, sir.
Mr. Ivennedy. Do you know if any machines came into replace
them?
Mr. GooT. There wasn't anything replaced those until after we sold
out, I believe.
Mr. Kennedy. After you sold out were machines replaced there?
Mr. GooT. I believe
Mr. I^nnedy. Were your machines replaced ?
Mr. GooT. Well, we had sold out then. I don't Imow who replaced
the machines then.
Mr. Kennedy. Were any machines placed in the locations that you
lost?
Mr. GooT. Yes, they were placed after we sold out.
Mr. Kennedy. Do you know who replaced them ?
Mr. GooT. Hammond Sales.
Mr. Kennedy. The company to whom you sold ?
Mr. GooT. That is right.
18520 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Do you know if the representative of the public
prosecutor's office ever raided these machines ? Or ever tried to con-
fiscate those machines ?
Mr. GooT. Not that I know of, sir.
Mr. Kennedy. What happened to the machines that were con-
fiscated, your machines that were confiscated ?
Mr. GooT. That I don't know.
Mr. Kennedy. Did you ever get any record from the public prose-
cutor's office as to what had happened to them ?
Mr. GooT. No, sir.
Mr. Kennedy. Did you ever call ?
Mr. GooT. I tried to reach him all during the time we were being
bothered, and I could never reach him.
Mr. I^nnedy. Did you ever talk to Mr. Metro Holovachka at all
about the situation ?
Mr. GooT. Not at all after the machines were confiscated.
Mr. Ivennedy. Wliat conversation did you have with him then ?
Mr. GooT. Well, I can't remember exactly, except that he said that
"Wliere were you at election time?" or something on that order.
Mr. Kennedy. Is that when you were complaining about the fact
that your machines were being picked up ?
Mr. GooT. No. The only time I reached him was after we had
sold out.
Mr. Kennedy. What conversation did you have with him at that
time ? Wliat did you say to him once you reached him ?
Mr. GooT. I just wanted to know why I couldn't do business in the
county.
Mr. Kennedy. What did he say ?
Mr. GooT. He asked me where I was at election time, and that was
all.
Mr. Kennedy. Did you understand that that meant that you were
finished as far as a businessman in this area ?
Mr. GooT. I understood that was or meant that I was through in
the pinball business.
Mr. Kennedy. Is that when you decided you would sell out?
Mr. GooT. I believe so. I don't remember the exact course of
events.
Mr. Kennedy. Or approximately during that period ?
Mr. GooT. During that period. That was 4 years ago.
Mr. Kennedy. I understand.
Did you ever have any other dealings with Mr. Holovachka?
Mr. GooT. Well, I had dealings with him at a later date.
Mr, Kennedy. Would you relate what happened ? Would you re-
late what happened in connection with that?
Mr. GooT. Well, during the 19 — I believe it was the latter part of
March of 1958 that one of his investigators had sent a minor into my
tavern, and after I had sold him six cans of beer he came in and told
me he had sent the minor in, and took my license number.
Mr. Kennedy, Was the minor obviously a minor ?
Mr. GooT, Well, he sure didn't look like a minor in my opinion.
Mr, Kennedy, How big was he ?
Mr. GooT. I think he weighed 215 pounds and was 5 feet 11 inches.
Mr, Kennedy. So you were arrested then for selling beer to a
minor ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18521
Mr. GooT. Yes, sir ; I Avas.
Mr. Kennedy. Did the minor that came in relate when he testified
that he had been sent in there and paid money to go in there by a
representative of the public prosecutor's office?
Mr. GooT. Yes, sir. At the trial at Crown Point he admitted that
he received $5 for his efforts.
Mr. Kennedy. You were convicted, though ?
Mr. GooT. I was convicted and fined $1 and costs.
Mr. Kennedy. Did you miderstand why it was that he tried to do
this to you ?
Mr. GooT. Well, I just heard a rumor that I was supposed to be
backing- the wrong candidate. That was the only reason that I heard.
Mr. Kennedy. That j^ou were backing the wrong candidate for
public prosecutor.
Mr. GooT. Yes, sir.
Mr. Kennedy. Did you change candidates then ?
Mr. GooT. No, sir.
Mr. Kennedy. Did you continue to back the same man?
Mr. GooT. Well, I hadn't backed him previously, but I backed him
after that happened.
Mr. Kennedy. Who were you supposed to be backing? Wlio did
he want you to back ?
Mr. GooT. Well, he never said that he wanted me to back anyone.
Mr. Kennedy. Who did you understand that you should be back-
ing?
Mr. GooT. Well, he was behind Mr. Vance. I wasn't behind any-
one until after that happened.
Mr. Kennedy. A^lio were you behmd after that happened?
Mr. GooT. Mr. Roberto, who was his opponent.
Mr. Kennedy. You backed his opponent afterward ?
Mr. GooT. Yes, I did.
Mr. Kennedy. You operated jukeboxes also; is that right?
Mr. GooT. Yes, sir.
Mr. I^nnedy. Did you sell out your jukeboxes in 1957 ?
Mr. GooT. In 1958, sir.
Mr. Kennedy. That was after the death of your partner?
Mr. GooT. That was about 2 years after.
Mr. Kennedy. To whom did you sell your jukeboxes ?
Mr. GooT. To Harold Anderson.
Mr. Kennedy. Do you know who was his superior ?
Mr. GooT. No ; I don 't, sir.
Mr. Kennedy. Did you know that this pinball syndicate in Gary
also controlled his company ?
Mr. GooT. No ; I don't. I heard that afterward, but I never knew
at the time and I still don't know it.
Mr. Kennedy. That is all, Mr. Chairman.
Senator Church. Senator Capehart, do you have any questions ?
Senator Capehart. No questions, Mr. Chainnan.
Senator Church. Thank you very much.
Mr. GooT. Thank you.
Mr. Kennedy. Mr. Chairman, I might recall Mr. Duffy to put in
what we know about the companies that purchased the pinball and
the jukebox operation.
Senator Church. All right, Mr. Duffy.
18522 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF LaVERN J. DUFFY— Resumed
Mr. Duffy. The particular jukeboxes that were sold by Mr. Goot
were sold to the H. A. Novelty Co., which was an affiliate company
of the Sohacki-Welbourn syndicate, owned by Mr. Sohacki and Wel-
bourn in Gary.
Mr. Kennedy. What about the jukeboxes?
Mr. Duffy. That is the H. A. Novelty Co.
Mr. Kennedy. Wliat about the pinball company ?
Mr. Duffy. The pinballs were also sold to Sohacki-Welbourn, the
Star Supply Co.
Mr. Kennedy. So they g-ained control.
Mr. Duffy. They gained control.
Mr. Kennedy. Mrs. Pauline Kotlarz, please.
Senator Church. Do you solemnly swear that the e\ddence you
shall give before this Senate select committee shall be the truth, the
whole truth, and nothing but the truth, so help you God ?
Mrs. Kotlarz. I do.
TESTIMONY OF MRS. PAULIITE KOTLARZ
Senator Church. Please give the committee your name, your place
of residence, and your occupation.
Mrs. Kotlarz. Pauline Kotlarz, 4411 Baltimore Street, Hammond.
I am a tavern owner.
Senator Church. Mrs. Kotlarz, if you would, move up a little
closer to the microphone ; it will be easier for us to hear you.
Very well, Mr. Kemiedy.
Mr. Kennedy. Mrs. Kotlarz, you operate a tavern ; is that correct ?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. What is the name of it ?
Mrs. Kotlarz. Beer Port.
Mr. Kennedy. The Beer Port Tavern. Is that the only tavern you
have ?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. How long have you had that?
Mrs. Kotlarz. It will be 10 years in January.
Mr. Kennedy. Formerly that was known as Blondie's Tavern ; is
that right?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. You were doing business at this tavern and had some
pinball machines in there in 1955 ?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. 'Wlio did those pinball machines belong to ?
Mre. KoTLi\Rz. Hymie Goot.
Mr. Kennedy. Mr. Goot?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. Did some individual come in and try to get you to
take other machines ?
Mrs. Kotlarz. Some middle aged fellow came in and asked if I
wanted a pinball there, and I said I had one. He said, "We have a
better one," and I said, "We are satisfied," and he left.
Mr. Kennedy. Just a man in plain clothes ?
Mrs. Kotlarz. Just ordinary, a shirt and plain clothes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18523
Mr. Kennedy. Did you have another visit ?
Mrs. KoixARZ. Two or three weeks later I had another visit, from
a man with khaki pants on and a belt with holster. And he said to get
rid of the pinball and I said "Why" ? And he said, "I told you to get
rid of it."
He said, "If you don't, I will have you arrested." He said, "If you
want one later, we will get you one," and he walked out.
Mr. I^NNEDY. He said if you wanted one later on, he would get you
one?
Mrs. KoTLARz. Yes.
Mr. Kennedy. He indicated that he had a machine ?
Mrs. KoTLARz. Well, I took it for granted, the way he said it.
Mr. Kennedy. Did you get rid of this machine?
Mrs. KoTLARz. No. I called Hymie Goot and asked what I should
do.
Mr. Kennedy. But he wanted you to get rid of that machine ?
Mrs. KoTLARz. Yes, sir.
Mr. Kennedy. And said he could get you another machine, is that
right, when he came in there?
Mrs. KoTLARz. Yes, sir.
Mr. Kennedy. Was this man lat-er identified to you by name ?
Mrs. KoTLARZ. Well, later he was as Conroy.
Mr. Kennedy. As Walter Conroy ?
Mrs. KoTioARz. Yes, sir.
Mr. Kennedy. At that time when he came in he had a sheriff's
uniform on?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. He had a holster and a belt and a badge ; did he not ?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. So what did you do after he came in and suggested
you get rid of the machine?
]\Irs. Kotlarz. Well, after he left,, I called up Hymie Goot and told
him, and he said keep the pinball in tliere. So I did.
A couple of weeks later they came in and took it out, two fellows.
Mr. Kennedy. Who came in ?
Mrs. Kotlarz. The same fellow supposed to be known as Conroy
and some fellow known as the justice of the peace.
Mr. Kennedy. ^Ylio was the justice of the peace at that time?
Mrs. Kotlarz. He was supposed to know — Chronowski, or some-
thing.
Mr. Kennedy. Chronowski ?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. And he was the justice of the peace ?
Mrs. KoTL.\Rz. Yes, sir.
Mr. Kennedy. And he and Conroy came in together?
Mrs. Kotlarz. The two fellows came in and took the pinballs out
while they stood around and then they left.
Mr. Kennedy. Did they give you a receipt?
Mrs. Kotlarz. Nothing at all.
Mr. Kennedy. Did he tell you why he was taking the machine ?
Mrs. Kotlarz. Nothing at all.
Mr. Kennedy. Did you ask any questions?
Mrs. Kotlarz. No, sir.
18524 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Why not?
Mrs. KoTLARZ. I know better than to ask questions.
Mr. Kennedy. Did you get any other machines in there subse-
quently ?
Mrs. KoTLARz. Well, for a while I didn't get any after they took
them out. Then sometime later I understood Hymie and then set-
tled up somehow or another and they said it was all right to get one,
so I got one later, 2 or 3 months later.
Mr. Kennedy. Where did you get those machines?
Mrs. KoTLARz. I don't know. I just asked some fellow to bring
them in. The fellow next door had one, and some customer said we
ought to have one, they liked to play it, so I told the fellow to bring
one in.
Mr. Kennedy. Do you know who owns the machines ?
Mrs. KoTLARz. No.
Mr. Kennedy. Do you know up to this time who owns the machines ?
Mrs. KoTL^^RZ. I still don't.
Mr. Kennedy. Do you know the name of the collector ?
Mrs. KoTLARz. No.
Mr. Kennedy. You just have the telephone number; is that right?
Mrs. KoTLARZ. That is all.
Mr. Kennedy. You simply call a certain number if you want some-
thing done about the njachine ?
Mrs. KoTLARZ. That is right.
Mr. Kennedy, And each year you get a Federal gambling stamp
from the Federal Government ?
Mrs. KoTLARz. Yes. sir.
Mr. Kennedy. Out of the $250, you contributed $125 ; is that right ?
Mrs. KoTLARZ. Yes, sir.
Mr. Kennedy. Do you still have those pinball machines ?
Mrs. KoTLARz. No. They were taken out a week ago.
Mr. Kennedy. A week ago ?
Mrs. KoTLARz. Yes.
Mr. Kennedy. Do you know for what reason they were taken out ?
Mrs. KoTLARz. Well, I guess for this investigation.
Mr. Kennedy. Your partner in there was Bernard Kwiatkowski.
We have an affidavit from him, identifying Mr. Conroy.
Senator Cpiurch. I have here what appears to be an affidavit signed
by Bernard Kwiatkowski, who was your partner in business ?
Mrs. KoTLARz. Right now, but lie wasn't at the time that that
happened.
Senator Church. I see. I am going to ask that this be identified
and we can include it in the record.
Mr. Kennedy. Mr. Sinclair can.
Mr. Sinclair. Yes ; I took this affidavit on May 14, 1959.
Senator Church. The affidavit bears the signature of Mr. Kwiat-
kowski.
(The affidavit referred to follows :)
Affida\t:t
County of Lake,
State of Indiana, ss:
I, Bernard Kwiatkowski, minor partner in the Beer Port Tavern located at
1211 150th Street, Hammond, Ind., formerly known as Blondie's Tavern and it
IMPROPER ACTIVITIES IN THE LABOR FIELD 18525
being located across the street from the Beer Port Tavern, Hammond, Ind.,
being duly sworn, depose and state :
I make this statement at the request of Richard G. Sinclair, known to me to
be an investigator of the Senate Select Committee on Improper Activities in
the Labor or Management Field. This statement is made of my own free will,
without any promises of favor or immunity. I have been informed and realize
that this statement may be read and used in a public hearing before the Senate
Select Committee on Improper Activities in the Labor or Management Field,
and swear that the statements contained herein are true.
I saw around the 1st of August 1955, Walter Conroy, chief investigator for the
county prosecutor and former chief of police of East Chicago, Ind., who I know
personally, at Blondi's Tavern. At the time, he was accompanied by Justice of
Peace Peter Chronowski, of East Chicago. At the time Mrs. Kotlarz informed
me that, "Well, that's the end of the pinball machines," or words to that effect.
I recall that the machine was loaded into a commercial moving van that
belonged to the Ferree Moving & Storage Co. located on Calumet Avenue in
Hammond, Ind.
(Signed) Bernard Kwiatkowski.
Sworn and subscribed to before me this 14th day of May 1959.
[seal] (s) Mildred Thomas, Notary PiiMic.
My Commission expires March 5, 1961.
Mr. Kennedy. Could I read the pertinent part of this, Mr. Chair-
man?
Senator Church. Yes.
Mr. Kennedy. It states :
I saw around the 1st of August 1955, Walter Conroy, chief investigator for
the county prosecutor and former chief of police of East Chicago, Ind., who
I know personally, at Blondie's Tavern. At the time, he was accompanied by
Justice of Peace Peter Chronowski, of East Chicago. At the time Mrs. Kotlarz
informed me that "Well, that's the end of the pinball machines" or words to
that effect.
I recall that the machine was loaded into a commercial moving van that
belonged to the Ferree Moving & Storage Co. located on Calumet Avenue in
Hammond, Ind.
This is the way you were able to identify the gentleman wlio first
came in who told you you had the wrong machines, told you he could
replace them with the right machines, and subsequently picked up
your machines?
Mrs. Kotlarz. Yes, sir.
Mr. Kennedy. A couple of months later they were replaced.
Mr. Sinclair, have we been able to identify to whom the machines
belonged that replaced Mr. Goot's machines?
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
Mr. Sinclair. Yes, sir ; we have.
Mr. Kennedy. Do they belong to Mr. Welbourn and Mr. Sohacki ?
Mr. Sinclair. Yes.
Senator Church. That is part of the syndicate?
Mr. Sinclair. Yes, sir.
Mr. Kennedy. Mr. Chairman, I might say that we also subpenaed
Justice of the Peace Peter Chronowski, of East Chicago, to appear
before the committee in connection with this matter as well as cer-
tain other matters. He is not here today.
Senator Church. Senator, have you any questions?
Senator Capeiiart. No questions.
Senator Church. Thank you very much, Mrs. Kotlarz, we appreci-
ate your coming. Your testimony has been very helpful.
18526 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mil. Kennedy. Mr. Sinclair, have you made an investigation to
find out what happened to these machines after they were picked up
by the Ferree Moving & Storage Co., of Hammond, Ind.?
Mr. Sinclair. Yes ; I have.
Mr. Kennedy. Would you relate to the committee what we found
out about that ?
Mr. Sinclair. Yes.
Mr. Kennedy. First, will you establish that they were in fact picked
up by the Ferree Moving & Storage Co. ?
Mr. Sinclair. They were in fact picked up by the Ferree Moving &
Storage Co. on Calumet Avenue in Hammond, Ind., and the invoice
or work order was made out in the name of Peter Chronowski, who
is justice of the peace in East Chicago. He and Mr. Walter Conroy
picked up machines on Saturday, July 30, 1955, at four locations. One
location was on Calumet Avenue, Koby's Tavern on Calumet Avenue,
Cousins' Tap at Calumet and Indianapolis, Blondie's, and also Ed &
Paul's Sportsman's Club on Calumet Avenue.
All of these taverns are located in the same neighborhood.
Mr. Kennedy. We have also made an investigation to determine
what happened to these machines ; have we not ?
Mr. Sinclair. Yes ; we have.
Mr. Kennedy. Where did we find these machines ?
Mr. Sinclair. These machines, on the afternoon that they were
picked up, were placed in custody of the moving and storage com-
pany that furnished the vehicle that picked them up.
They remained there for 3 or 4 days, and they were removed from
the storage company to the garage of Walter Conroy, who lives in
East Chicago.
They are stored there at this time.
Mr. Kennedy. These machines are now, as best we can find out, in
Walter Conroy 's garage ; is that right ?
Mr. Sinclair. That is right.
Mr. Kennedy. Did we find other machines in Walter Conroy's
garage ?
Mr. Sinclair. Yes.
Mr. Kennedy. How many machines ?
Mr. Sinclair. We found 11 machines in all on location there. At
the time we made the inspection of the premises, Mr. Conroy advised
me that he had, over a period of 4 or 5 years, confiscated 36 machines in
a similar way.
Mr. Kennedy. Did he tell you what had happened to the rest of the
machines ?
Mr. Sinclair. He said that he had destroyed the rest of the machines.
Mr. Kennedy. He only had 11 left ?
Mr. Sinclair. Just 11 left.
Mr. Kennedy. Mr. Chairman, could I have the invoice in connec-
tion with the Ferree Storage Co. identified ?
Senator Church. Can you identify this invoice, Mr. Sinclair?
(The document handed to the witness.)
Mr. Sinclair. This invoice made out to Pete Chronowski by the
Ferree Storage & Van Co. was obtained from Mr. Ferree, and it shows
that $47.29 was paid for picking up pinball machines at five locations.
Senator Church. This is the invoice that covered the machines on
which you have just given testimony ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18527
Mr. Sinclair. That is correct, sir.
Senator Church. Without objection, it will be made exhibit No. 4.
(Document referred to was marked "Exhibit No. 4" for reference
and may be found in the tiles of the select committee.)
Senator Church. Exhibit No. 4 is for purposes of the record.
Mr. Kennedy. Mr. Chairman, we also have an affidavit from Mr.
Ferree. I don't think it is necessary to read it into the record, but it
supports the testimony which has been given.
Senator Church. I hand you what appears to be an affidavit of Mr.
Jack Ferree, Mr. Sinclair. I wonder if you can identify it for pur-
poses of the record.
(The document handed to the witness.)
Mr. Sinclair. Yes, Senator. I obtained this affidavit from Jack
Ferree.
Senator Church. Does it bear his signature ?
Mr. SiNCLx\iR. It bears his signature. It is dated March 13, 1959.
Mr. Ferree drove the vehicle that Justice of the Peace Chronowski
and Mr. Conroy used to pick up these pinball machines.
Senator Church. The affidavit will speak for itself.
Without objection, it will be made a part of the record as exhibit
No. 5.
( AffidaA^t referred to was marked "Exhibit No. 5"' for reference and
may be found in the files of the select committee.)
Senator Church. Call your next witness.
Mr. Kennedy. Nicholas Smaluk.
Senator Church. Mr. Smaluk, will you raise your right hand,
please ?
You do solemnly swear that the testimony you will give before this
Senate select committee shall be the truth, the whole truth, and
nothing but the truth, so help you God ?
Mr. Smaluk. I do.
TESTIMONY OF NICHOLAS SMALUK
Senator Church. Mr. Smaluk, will you please identify yourself by
giving the committee your name, your place of residence, and your
occupation ?
Mr. Smaluk. My name is Nicholas Smaluk. I live at 1115 Indian-
apolis Boulevard, Hammod, Ind. I am a tavern owner.
Senator Church. Thank you, Mr. Smaluk.
Mr. Kennedy. Mr. Smaluk, in June of 1955, Mr. Herman Goot
placed two pinball machines in your tavern ; is that right ?
Mr. Smaluk. Yes.
Mr. Kennedy. After the machines were in service a short period
of about 2 months, you were approached by a individual in connec-
tion with the machines ?
Mr. Smaluk. Yes ; I was.
Mr. I^NNEDY. Would you relate to the committee what happened
and who the individual was ?
Mr. Smaluk. I didn't learn until later. I mean, he showed a badge
which identified him from the prosecutor's office. I didn't learn what
his name was until about 2 weeks later. I saw his picture in the paper.
It was Walter Conroy.
18528 IMPROPER ACTIVITIES IN THE LABOR FIELD
But he came in. He was nice about it. He said he didn't want
anything to happen to me ; that he was after Herman Goot ; that he
wanted me to get the machines out ; that he didn't want anything to
happen to me from the machines. He j ust wanted them out.
Mr. Kennedy. Did he say what could happen to you ?
Mr. Smaluk. Well, he says that if he waited around long enough
he can catch me paying off.
Mr. Kennedy. Did he tell you that you should get a machine that
wouldn't give you any trouble ?
Mr. Smaluk. No; he didn't say anything about getting any other
machine.
Mr. Kennedy. He just told you you should get rid of those
machines ?
Mr. Smaluk. I should get rid of two machines of Hymie Goot.
Mr. Kennedy. Had you been approached earlier than that by an-
other individual ?
Mr. Smaluk. No. I was approached — Walter Conroy was there
Tuesday, and Wednesday night following there was a man came in
and I had turned the machines off and they were not in operation
at the time. He took a look at them and he says, ''Would you like to
have some machines that wouldn't give you any trouble ? "
Well, I told him I was satisfied with the machines as of that time.
He left.
Mr. Kennedy. Then did Mr. Conroy come back ?
Mr. Smaluk. Then Mr. Conroy came back Thm^sday, the next day.
Well, he came Tuesday and then the gentleman came Wednesday
evening, and then Conroy came back Thursday. He opened the door
and he said that I should get those machines out by Friday or else
he will come back and pick them up.
Mr. Kennedy. Relate what happened.
Mr. Smaluk. Well, that is all. He just opened the door and he
said, "I want these machines out by Friday or else I will come back
and pick them up," which he did, Saturday.
Mr. Kennedy. He came back and picked them up ?
Mr. Smaluk. Yes ; he came Saturday with another gentleman and
the movers, and he just came right in and took them out.
Mr. Kennedy. Did you hear anything further? Did he give you
any writ, any order ?
Mr. Smaluk. No ; he didn't give me any writ or anything.
Mr. Kennedy. Was anybody playing the machines ?
Mr. Smaluk. No ; he didn't serve me with a warrant, a writ.
Mr. Kennedy. He just came and picked up the machines?
Mr. Smaluk. He just came right in. And he picked them up.
Mr. IvENNEDY. Did you replace those machines with other ma-
chines ?
Mr. Smaluk. Yes. Later on.
Mr. Kennedy. About how much later ?
Mr. Smaluk. I don't know. About a week later I saw Mr. Goot
at a meeting and he told me that he had sold out to a different firm,
and he gave me a telephone number to call in case I wanted machines.
Mr. Kennedy. So you called?
Mr. Smaluk. I called, and I have never had any trouble then until
now.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18529
Mr. Kennedy. You ijot the machines from the Hammond Sales Co. ?
Mr. Smaluk. From Hammond Sales.
Mr. Kennedy. And you never had trouble after that ?
Mr. Smaluk. No.
Mr. Kennedy. Mr. Conroy never bothered you after that?
Mr. Smaluk. Mr. Conroy never bothered me.
Mr. Kennedy. And the machines were the same kind you had op-
erating before with Mr. Goot ?
Mr. Smaluk. Yes ; the same type.
JNIr. Kennedy. There was no more obvious gimmick of making a
payolT on the old macliines as there had been with Mr. Goot's ma-
chines, exactly the same type?
Mr. Smaluk. Exactly the same type of machine.
Mr. Kennedy. Do you know why he bothered you before when
you had Mr. Goot's machines, and didn't bother you when you had
these other machines?
Mr. Smaluk. No. Actually, I don't Imow personally, but from the
rumors I have heard they just want to control the country, this one
company.
Mr. Kennedy. And the public prosecutor's office, Mr. Holovachka's
office, was behind it?
Mr. Smaluk. Well, that is the rumors I have heard.
Mr. Kennedy. From your personal experience, you found that he
did bother you ?
Mr. Smaluk. The investigator, tlie chief investigator, Walter Con-
roy, bothered me when I had Herman Goot's macliines in.
Mr. Kennedy. And didn't bother you when you had the others ?
Mr. Smaluk. Tliat is right.
Mr. Kennedy. That is all, Mr. Chairman.
Senator CiriTiciT. That is all. Thank you very much.
Mr. Kennedy. Mr. Charles Graven.
Senator Church. Raise you riglit hand, please. Do you solemnly
swear that the evidence you shall give before this Senate select com-
mittee shall be the truth, the whole truth, and nothing but the truth,
so help you God.
Mr. Graven. I do.
TESTIMONY OF CHARLES GRAVEN
Senator Church. Mr. Graven, would you identify yourself to the
committee by giving us your name, your residence, and your occu-
pation ?
Mr. Graven. Charles Graven, 4528 Toll Street, Hammond, Ind.
I am a tavern owner.
Senator Church. You reside in Hammond, Ind., and you are a
tavern owner ?
Mr. Graven. Yes, sir.
Mr. Kennedy. Mr. Graven, you had Mr. Herman Goot's pinball
machines in your tavern in 1955 ?
Mr. Graven. Yes, sir.
Mr. Kennedy. Some time in August 1955 did an individual come
into your tavern who represented himself to be Walter Conroy ?
Mr. Graven. Yes, sir.
18530 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Of the county prosecutor's office in Lake County,
Ind.?
Mr. Graven. Yes, sir.
Mr. Kennedy. What did he tell you at that time ?
Mr. Graven. The first time he walked in he told me that I had to
get the machines out in a couple of days ; and he came back later on,
on Saturday, and he told me, "I see you still have them machines in
here." Then he said some words I didn't like, so I told him if he
couldn't come in and talk better than he did
Mr. Kennedy. He came back. He told you the first time you
should get rid of the machines ?
Mr. Graven. Yes, sir.
Mr. Kennedy. Then he came back the second time ?
Mr. Graven. Yes.
Mr. Kennedy. What did he say to you? Would you explain to
the committee what he said to you ?
Mr. Graven. That I had to get the machines out. He said some
words that I didn't like, so I told him if he couldn't come in more
respectable than he did, that he should get out.
Mr. Kennedy. What happened then?
Mr. Graven. Then he told me I was under arrest. I told him to
wait until my partner gets down there so he could relieve me and I
would go with him. My partner came and he took me in his car and
went down to 119th Street.
Mr. Kennedy. So he arrested you at that time?
Mr. Graven. Yes, sir.
Mr. Kennedy. Did he take the machines?
Mr. Graven. Yes.
Mr. Kennedy. He took the machines, too ?
Mr. Graven. Yes.
Mr. Kennedy. Did he give you any writ or order?
Mr. Graven. No; he didn't.
Mr. Kennedy. Nothing from the court ?
Mr. Graven. No.
Mr. Kennedy. He arrested you and took the machines?
Mr. Graven. Yes.
Mr. Kennedy. What happened then ? You were put in the auto-
mobile with him?
Mr. Graven. He took me down to 119th Street and Calumet Avenue.
We sat there for a while and he didn't say a word to me. Then he
told me OK, I can go back. He released me.
Mr. Kennedy. He let you out of the car ?
Mr. Graven. Yes. He told me he would take me back to my busi-
ness. I told him, "No ; I see a friend of mine who has a car over here.
I will go with him."
Mr. Kennedy. So you got out of the car?
Mr. Graven. Yes.
Mr. Kennedy. He never booked you?
Mr. Graven. No; he didn't.
Mr. Kennedy. Did he tell you to forget about the whole matter?
Mr. Graven. He told me to go back and not to say that I was
booked.
Mr. Kennedy. Did he ever place any charges against you ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18531
Mr. Graven. No; he didn't.
Mr. Kennedy. Did he ever place any charges against you for the
operations of the machine?
Mr. Graven. No; he didn't.
Mr. Kennedy. Did you get machines to replace them ?
Mr. Graven. Yes, later on.
Mr. Kennedy. How did you happen to get those machines?
Mr. Graven. By a telephone number.
Mr. Kennedy. Somebody gave you a telephone number?
Mr. Gra\'en. Yes.
Mr. Kennedy. They told you you could get machines from this com-
pany and it would be the right company?
Mr. Gra^-en. Just to give that number. That is the number I know.
Mr. Kennedy. And you called the nmnber and got machines?
Mr. Gra\'en. Yes.
Mr. Kennedy. Were they ever bothered then ?
Mr. Graven. No; they wasn't.
Mr. Kennedy. Are they operating at the present time?
Mr. Gra^ten. No.
Mr. Kennedy. Have they been closed down ?
Mr. Graven. They have been closed down.
Mr. Kennedy. About a week ago?
Mr. Graven. About a week ago.
Mr. Kennedy. Do you Imow what the reason was they were closed
down?
Mr. Graven. No; I don't. I just saw in the paper that the prose-
cutor wanted them down.
Mr. Kennedy. Mr. Holavachka?
IVIr. Graven. No. Mr. Vance.
Mr. Kennedy. Do you know the explanation as to why you were
allowed to have these machines and you weren't allowed to have Mr.
Goot's machines?
Mr. Graven. No ; I don't.
Mr. Kennedy. Do you understand, or was it generally understood
in the county, that Mr. Holovachka, the county prosecutor's office, was
behind one company?
Mr. Graven. I guess it was. I don't know.
Mr. Kennedy. There was no difference between the two kinds of
machines ?
Mr. Graven. No ; they are the same.
Mr. Kennedy. They are both gambling types of equipment?
Mr. Graven. The same.
Mr. Kennedy. They are both paying off?
Mr. Graven. No ; it was free games.
Mr. Kennedy. If you didn't take the free games, you could get some
money.
Mr. Graven. No ; free games ; that is all.
Mr. Kennedy. But if you didn't get the free games, you could get
money ; could you not ?
Mr. Graven. It was all free games they was paying off on.
Mr. Kennedy. If you didn't take the free games, as a general propo-
sition, I wouldn't ask you specifically on yours, but if you didn't
get the free games, you could get money instead; is that correct?
18532 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Graven". I didn't say anything like that. I said just free
games.
Mr. Kennedy. You don't know anything about anybody getting
money instead of the free games ?
Mr. Gra\^n. Just free games.
Mr. Kennedy. Don't you know if you don't get the free games, you
coukl get money instead ?
Mr. GRA^^sN. No.
Mr. Kennedy. You never heard of that?
Mr. Graven. I heard of it.
Mr. Kennedy. You know that took place in your tavern ?
Mr. Graven. Yes.
Senator Church. Senator ?
Senator Capehart. No questions.
Senator Church. This is just the same story that the other wit-
nesses told, is it not ?
Mr. Graven. Yes.
Senator Church. The story of having Mr. Goot's machines and the
law comes along and the law takes the machines out, doesn't it?
Mr. Graven. Yes.
Senator Church. Then you are told one way or another that you
can have the machines back or machines like them back if you call a
certain number.
Mr. Graven. That is right.
Senator Church. So you call that number, you don't know who
you are dealing with, the machines come back and after that you
don't have any more trouble with the law.
Mr. Graven. No.
Senator Church. Did the machines you have in your tavern have
a Federal gambling stamp ?
Mr. Graven. Yes,
Senator Church. Do you pay the $250 annually ?
Mr. Graven. Yes, sir.
Senator Church. I have no further questions.
Thank you very much, Mr. Graven.
Mr. Kennedy. Edward Matuska.
Senator Church. 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. Matuska. I do.
TESTIMONY OF EDWARD MATUSKA
Senator Church. Would you please give your name, your residence,
and your occupation, Mr. Matuska ?
Mr. Matuska. My name is Edward Matuska. I am a part owner of
a restaurant, also licensed as a tavern. I reside at 1517 Park View,
in Hammond, Ind.
Senator Church. Thank you. Mr. Kennedy ?
Mr. Kennedy. Mr. Matuska, originally there were no pinballs
around ; is that correct ?
Mr. Matuska. That is correct.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18533
Mr. Kennedy. And earlier the machines that were being used in
the Lake County area, in the area that you operated, were all amuse-
ment-type machines ?
Mr. Matuska. That is correct.
Mr. Kennedy. Then in came these gambling- type pinball machines ?
Mr. Matuska. Yes.
Mr. Kennedy, In order to compete, you had installed in your tavern
a pinball machine ; is that right ?
Mr. Matusk.^. That is correct.
Mr. Kennedy. In fact, you had two of them, installed in there by
Mr.MattPohl.
]\Ir. Matuska. That is correct.
Mr. Kennedy. Shortly after the machines were installed, did you
have a visit from the county prosecutor's office ?
]Mr. Matuska. Yes; very shortly, a man who identified himself as
Walter Conroy. He came into my place of business and told me that
this particular type of machine was illegal, and that we had been turned
in because we had made a payoff on the replay system.
Mr. Kennedy. Relate what you said to him.
Mr. Matuska. At that particular time, I didn't know exactly what
to do. I most certainly didn't like his attitude when he came into my
place, and felt that he wasn't authorized to give me an order that way.
He showed me no writ. So I allowed the machines to go on as before.
]Mr. Kennedy. Did you point out to him that there were machines
operating all around in that area?
Mr. Matuska. Yes ; certainly.
Mr. Kennedy. What did he say about that ?
Mr. Matuska. I don't recall.
Mr. Kennedy. So, anyway, you didn't do anything about it. Then
he came back and visited jon a second time ?
Mr. Matltska. A second time, perhaps a day or two later. Again he
indicated to me that I had made some payoff", and that I should turn
off the machines and have them removed, which I didn't do again. In
the meantime. Matt Pohl, the gentleman who owned the machines at
our particular location, came in.
I don't know his reason for doing it, but he removed the machines.
I suppose he had some order to that effect. He removed the machines
and we placed the syndicate machines in their place.
Mr. Kennedy. You got the new kind of machines ?
Mr. Matuska. That is right.
Mr. Kennedy. Syndicate machines in immediately ?
Mr. Matuska. Well, it wasn't a new machine. It was basically the
same machine, but by another company.
Mr. Kennedy. Did you understand that this company would be
allowed to operate ?
Mr. Matuska. That is correct.
Mr. Kennedy. So immediately after, and this is of some importance,
immediately after the removal of Mr. Fold's machines, you replaced
them within a few hours ?
Mr. Matuska. Perhaps a few hours, a day ; I don't recall.
Mr. Kennedy. You replaced them with the syndicate machines ?
Mr. Matuska. That is correct.
36751— 59— pt. 53 8
18534 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. But in the last conversation you had with Mr. Con-
roy, it was that you were not going to remove the machines ?
Mr. Matuska. That is right.
Mr. Kennedy. Relate what happened the following day.
Mr. Matuska. Yes. I told him that I would not remove the ma-
chines. They were picked up by Matt Pohl, the owner of the ma-
chines. So apparently orders had been issued to Mr. Conroy to pick
up these machines that were Matt Pohl's. But since they had already
been changed, the machines were picked up, I believe it was, that
Saturday, machines were picked up and confiscated by Mr. Conroy
that belonged to the syndicate.
Mr. Kennedy. That was Saturday ?
Mr. Matuska. That is correct.
Mr. Kennedy. The following day, after you had gotten the syndi-
cate machines, or about the following day ?
Mr. Matuska. The following day was Sunday and, of course, we
are closed in Indiana.
Mr. Ivennedy. But I mean the day after you got the syndicate ma-
chines in, and a couple of days after you had had the visit from
Conroy, the truck pulled up and confiscated your machines ?
Mr. Matuska. That is right.
Mr. Kennedy. But instead of confiscating Pohl's machines, which
had already been removed, they confiscated the syndicate machines?
Mr. Matuska. That is right ; their own machines.
Mr. Kennedy. Did you have a conversation with the representa-
tive of the syndicate ?
Mr. Matuska. Yes; and he said there was probably some mistake,
and that he would have it checked into. Subsequently, a very short
time later, new machines were again placed in the location.
Mr. Kennedy. Was that the following Monday ?
Mr. Matuska. I don't recall. It was within a day or two.
Mr. Kennedy, The machines were replaced ?
Mr. Matuska. Yes.
Mr. Kennedy. Did you ever have any trouble with Mr. Conroy
after that?
Mr. Matuska. Never.
Mr. Kennedy. He never got in touch with you again ?
Mr. Matuska. Never.
Mr. Kennedy. There was no question in your mind that the public
prosecutor's office under Mr. Holovachka, and with Mr. Conroy, was
working hand and glove with the syndicate operation ?
Mr. Matuska. Well, Mr. Holovachka, I don't know. But, of
course, Mr. Conroy, who identified himself out of the prosecutor's of-
fice— there was no doubt in my mind. But I heard rumors to the
effect, but I can't substantiate them. I never had any contact with
Mr. Holovachka.
Senator Church. I have no questions. Senator Capehart ?
Senator Capehart. No questions.
Senator Church. Thank you very much, Mr. Matuska. Your testi-
mony has been very helpful.
Mr. Kennedy. Mr. Matt Pohl.
Senator Church. Mr. Pohl, do you solemnly swear that the testi-
mony you will give before this Senate select committee will be the
truth, the whole truth, and nothing but the truth, so help you God ?
Mr. Pohl. I do.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18535
TESTIMONY OF MATT POHL
Senator Church. Identify yourself for the committee by giving us
your name, your occupation, and your present residence.
Mr. PoHL. My name is Matt Pohl. I live at 6738 Alcott Avenue,
Hammond, Ind. I am a jukebox operator.
Senator Church. Thank you. Mr. Kennedy?
Mr. Kennedy. Mr. Pohl, you have been in the business since 1948 ;
is that right ?
Mr. Pohl. That is right.
Mr. Kennedy. You were one of those who formed a union under
Mr.Testo?
Mr. Pohl. I didn't form it. I was one of the members.
Mr. Kennedy. One of of the original members ?
Mr. Pohl. Yes.
Mr. Kennedy. You owned the Bluebird & Calumet Music Co., in
Hammond, Ind. ?
Mr. Pohl. That is right.
Mr. Kennedy. And you were also secretary-treasurer of the asso-
ciation in Gary, Ind. ; is that right?
Mr. Pohl. That is right.
Mr. Kennedy. You owned the pinball machines that were con-
fiscated at Ed Matuska's location by the county prosecutor's office ?
Mr. Pohl. That is right. Correct.
Mr. Kennedy. Did you find the situation that the public prosecu-
tor's office was being used to help and assist one company ?
Mr. Pohl. Well, directly, I don't know.
Mr. Kennedy. From what was related to you, from what you un-
derstood from being in the business ?
Mr. Pohl. That is right.
Mr. Kennedy. Wliat was the situation ?
Mr. Pohl. Well, in that particular case there, Ed and Paul's Tav-
ern called me up after I had had those machines in there for 2 or 3
weeks, a very short period. They told me that someone was over there
from the sheriff's office. I said, "Oh, don't mind it. We will see what
happens." A couple of days later he called again and said, "Look, the
man from the prosecutor's office was here. You better get them out."
"Yes," I said, "I think we better. Why give you any trouble. I
don't want no trouble and you don't want any trouble. I will be
over there."
So I stopped in there, I think it was on Wednesday evening, and
I talked it over with him. He said, "Well, I hate to throw you out.
I am not throwing you out, but let's see what we can do about it."
I said, "The best thing for me to do is take them out." So Thurs-
day morning I pulled up with the station wagon, packed up the two
machines and took them to Chicago and cashed them it. They were
almost new — only 3 weeks old. But while I was on my way to Chi-
cago with the machines, I stopped at another place, and I got the tele-
phone number of another pinball machine, their service number.
I called them up and told them Ed and Paul's Tavern is ready
for some pinball machines, the other machines are out. So they said,
"OK." So the next day they had pinball machines in there.
18536 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr, Kennedy. Why were they allowed to operate and you weren't?
Mr. PoiiL. Well, they told him — I mean Ed and Paul's Tavern told
me that it was illegal.
Mr. Kennedy. Why were they allowed to have machines there?
Mr. PoiiL. I have no idea.
Mr. Kennedy. What did you understand? Did you ever inquire?
Mr. PoHL. Well, later on I began to smarten up, I guess, or what-
ever you call i'.. There must have been some power behind it. I
never spoke to any of those politicians.
Mr. Kennedy. Did you ever inquire from any of them ?
Mr. PoHL. No.
Mr. Ivennedy. Did you find that the other independent operators
in the Lake County area were also being put out of business in the
same way ?
Mr. PoHL. Yes, sir.
Mr. Kennedy. Are any of the independent operators active at the
present time, now ?
Mr. PoHL. In pinballs?
Mr. KJENNEDY. Yes.
Mr. PoHL. No, not that I know of.
Mr. Kennedy. Just the syndicate ?
Mr. PoHL. That is right.
Senator Church. They have all been run out ?
Mr. PoHL. Yes.
Mr. Kennedy. Did you ever hear of any of the syndicate machines
being bothered ?
Mr. PoHL. I beg your pardon ?
Mr. Kennedy. Did you ever hear of any of the syndicate machines
being bothered ?
Mr. PoHE. Never.
Mr. Kennedy. So they would harass and raid the machines of the
independent operators, the public prosecutor's office, Mr. Holovachka,
and Mr. Conroy who works for Mr. Holovachka, but yet wouldn't
bother any of the syndicate machinese?
Mr. PoHL. That is right.
Mr. Kennedy. What about your jukeboxes? Can you put your
jukeboxes in locations now, in new locations?
Mr. PoHL. Yes.
Mr. Kennedy. Can you place them in new locations ?
Mr. PoHL. Yes ; if I don't have too rough competition.
Mr. Kennedy. Do you have any of the difficulty in the jukebox
business ?
Mr. PoHL. Well, not as bad as the pinballs.
Mr. Kennedy. Did some of your competition in the jukebox seem
to have unlimited sources of cash ?
Mr. PoHL. That is for certain,
Mr. Kennedy. Do you know who is behind the jukeboxes ?
Mr. PoHL. Well, H. & A. Novelty Co. is the one that we have the
toughest job to contend with.
Mr. Kennedy. There is no question that these pinball machines
were gambling equipment; is there?
Mr. PoHL. Well, that is what tliey say. They must be.
Mr. Kennedy. xVnd H. & A. Novelty, as we have identified it, is
part of the syndicate operation.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18537
That is all.
Senator Ciiukcii. I have no further questions.
I want to express tlie appreciation of the committee for your coming
and for your testimony.
The Chair wants to observe that the testimony this afternoon tends
to bear out what oftentimes has proved to be the ease, that rackets
are underway in many places in this country in connivance with the
local law enforcement people. All tlie evidence this afternoon would
certainly point in that direction in the present case.
Certainly, we are not going to be able to reach down and eliminate
this vicious racketeering in the United States unless the people of
the country elect and insist upon honest and industrious law enforce-
ment people in their local communities.
If we assume that this whole matter can be solved by Congress
passing a law, w^e are only fooling ourselves, because the Federal law
cannot begin to be complete enough to give an effective remedy in this
whole area.
I do feel, however, that where the pinball machine is concerned,
there is a device by Avhich the Federal Government could do much
to eliminate this kind of racketeering, because in this instance we can
reach the machine itself simply by tightening up the Federal law
applicable to the illicit traffic of gambling devices in interstate com-
merce. That is what I hope to do in introducing a bill that will make
these kind of machines, the kind that we have been dealing with in
the course of this testimony these past 2 days, illegal under the Federal
law, and thus, outlaw them from interstate commerce.
This will do much to eliminate them, and through their elimination
we can at least make headway toward clearing up this particular kind
of racket.
Senator Capehart, is there anything you would like to add ?
Senator Capehart. I might say in conjunction with what you have
just said in respect to cleaning it up, I think the observation should be
made that the record of this committee has proven that wherever one
party predominates to the extent of almost extinction of the other,
that this sort of thing thrives in a big way.
In other words, where you have one party that predominates and
consistently over the years elects their people, you have this sort of
situation. I think that has been proven in New York, Chicago, in
Lake County, and in other places.
I think if there is any lesson to be drawn from this, it is that people
ought not to consistently elect members of the same party as they
do over the years, because the record, I think, proves conclusively that
we have more of this sort of thing in those communities and cities
where one party predominates.
Senator Church. The committee will be in recess until 10 : 30 to-
morrow morning.
(Members of the select committee present at time of recess : Senators
Church and Capehart.)
(Whereupon, at 3 : 20 p.m. the select committee recessed, to recon-
vene at 10 : 30 a.m., Thursday, June 4, 1959.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
THURSDAY, JUNE 4, 1959
U.S. 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 resolu-
tion 44, agreed to February 2, 1959, in the caucus room, Senate Office
Building, Senator Karl E. Mundt (vice chairman of the select com-
mittee) , presiding.
Present: Senator Karl E. Mundt, Republican, South Dakota; Sena-
tor Homer E. Capehart, Republican, Indiana ; Senator Carl T. Curtis,
Republican, Nebraska.
Also present : Robert F. Kennedy, chief counsel ; LaVern J. Duffy,
investigator; Richard G. Sinclair, investigator; James F. Mundie,
investigator ; John T. Thiede, investigator ; Robert E. Manuel, assist-
ant counsel ; Ruth Y. Watt, chief clerk.
Senator Mundt. The committee will be in order.
(Members of the select committee present at time of convening:
Senators Mundt and Capehart.)
Senator Mundt, Counsel will call the first witness.
Mr. Kennedy. Mr. Chairman, I would like to call two witnesess,
Mr. Sohacki and Mr. Welbourn.
Senator Mundt. Will you stand and be sworn, please ? Raise your
right hand.
Do you and each of you solemnly swear that the testimony you
are about to give will be the truth, the whole truth, and nothing
but the truth, so help you God ?
Mr. Sohacki. I do.
Mr. Welbourn. I do.
TESTIMONY OF STEVEN D. SOHACKI AND GEORGE W. WELBOURN
Senator Mundt. Will you identify yourself, the gentleman on my
right?
Mr. Sohacki. My name is Steven Sohacki, and I live at 4C60 Van
Buren Street, Gary, Ind.
Senator Mundt. What business or occupation do you have ?
Mr. Sohacki, I respectfully decline to answer under the fifth
amendment of the Constitution of the United States on the gi-ound
that my answer may tend to incriminate me.
Senator Mundt, How about you? What is your name and address
and what is your occupation ?
18539
18540 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Welbourn. My name is George Welbourn. I live at 590
Broadway, Gary, Ind.
Senator Mundt. Go right ahead.
Mr. Welbourn, That is it.
Senator Mundt. What is your business or occupation ?
Mr. Welbourn. I respectfully decline to answer under the fifth
amendment of the Constitution of the United States on the ground
that the answer may tend to incriminate me.
Senator Mundt. Do you have a lawyer representing you here today ?
Mr. AVhealan. Yes, I am an attorney.
Senator Mundt. Mr. Welbourn, will you identify your attorney?
What is his name ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. If you are in that bad shape, you had better get
another lawyer, if you refuse to identify your counsel because you
might incriminate yourself.
I will ask that question again. Do you have a lawyer, and if so,
who is he ?
Mr. Whealan. May I answer ?
Senator Mundt. No, sir; I am asking the witness. He can plead
the fifth amendment about his lawyer if lie wants to, and that is his
business.
Mr. Welbourn. I respectfidly decline to answer on the gromid
that my answer may tend to incriminate me.
Senator Mundt. You understand the question I am asking you
whether you have a lawyer and, if so, whether you care to identify
him. You are telling the committee that if you identify your lawyer
you might be incriminated. Certainly that is not much of a recom-
mendation for your lawyer.
How about this gentleman on my right ? Do you have a lawyer ?
Mr. SoHACKi. I respectfully decline to answer on the gromid my
answer may tend to incriminate me.
Senator Mundt. All right. Counsel may proceed with the ques-
tions, and if you do not have a lawyer or if you have one you are
ashamed of, that is up to you.
Mr. Kennedy. Mr. Chairman, we have called these two individ-
uals, Mr. Sohacki and INIr. Welbourn, because of the operations that
we have developed during the hearings of the last couple of days
in connection with their operations of pinballs in the Gary and Lake
County area.
We have developed the first day that this operation that was intro-
duced into Gary, Ind., in about 1953 and 1954, brought about the
ultimate dissolution of the local union that was operating in the
coin-machine field, local No. 1 of Mr. John Testo. We would like to
ask Mr. Sohacki and Mr. Welbourn how it came about that they did
not make any arrangement or have any contract with local No. 1 of
Mr. John Testo's union.
I would like to address that question to Mr, Sohacki. Could you
tell us what it was or whether you had any conversations originally
with Mr. John Testo in connection with signing up with liis union ?
Mr, Sohacki, I respectfully decline to answer on the ground my
answer may tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18541
Mr, Kennedy. Was it decided by you and Mr. Welbourn that it
would be better for your operations if you had no union and if you
brought about the destruction of the union?
Mr. SoHACKi. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Did you also decide in order to make this possible
that you had to have the help and assistance of a representative of
the public prosecutor's office ?
Mr. SoHACKi. I respectfully decline to answer on the gromid my
answer may tend to incriminate me.
Mr. Kennedy. Specifically, did you go to Mr. Holovachka and ob-
tain his help and assistance in destroying the union and getting a
monopoly control over the pinballs in the Lake County area ?
Mr. SoHiVCKi. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Isn't it correct that during the days of the public
prosecutor during 1948 and 1949 and 1950, prior to the time that
Lake County was cleaned up in 1951, and a new public prosecutor
came in, that you were making periodic payments to certain govern-
ment officials at that time in order to run slot machines in Lake
County ?
Mr. SoiiACKi. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Senator Mundt. Are you able to deny that j^ou were making payoffs
to the law ?
Mr. SonACKi. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. I would like to call Mr. Duffy to explain the basis
of my question in connection with what he was doing during the
earlier regime, if I could.
Senator Mundt. You have been sworn.
TESTIMONY OF LaVERN J. DUFFY— Resumed
Mr. Duffy. In 1949 there was a murder in Gary, Ind., and INIiss
Mary Cheever, a schoolteacher, was murdered and this is the period of
time that Gary, Ind., was a very bad situation as far as vice and
gambling was concerned.
A local group of women got up in arms and wanted something
done about this, so through the cooperation of the Gary Crime Com-
mission, they were able to place a microphone in the office of the county
prosecutor, who was Mr. Swartz, Ben Swartz, and his deputy prose-
cutor was Mr. Blaze Lucas.
During the course of this period when they had this microphone in
the office they were able to establish a large amount of evidence to
show tliat Mr. Swartz and Mr. Lucas were corrupt. Ultimately they
were removed from office.
During this period they found that Mr. Sohacki had been mentioned
on the tapes in Mr. Blaze Lucas' conversations and they found that
Mr. Sohacki had been making contributions to Mr. Swartz to allow
his slot machines to remain in the outside area of Gary, and he had
been making payments to Mr. Swartz during this period.
18542 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. It was definitely established, therefore, that these
payments were being made by Mr. Sohacki, during this earlier regime?
Mr. Duffy. Yes ; and this is a public record.
Mr. Kennedy. Could we have that introduced, Mr. Chairman?
Senator Mundt. Yes ; that may be made a part of the record at this
point, and marked with its appropriate exhibit number, No. 6.
(Document referred to was marked "Exhibit No. 6" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Mr. Duffy, would you bring up what happened
after that, just briefly, the history of what the situation was?
Mr. Duffy. Then Mr. Sohacki got into the pinball business after
he got out of the slot-machine business, and he had the Universal Sales
Co. in 1952 and he sold it to Mr. Welbourn for $25,000. Then Mr.
Welbourn in 1953 reported on his tax returns, I think, close to $133,000
revenue from the pinball operations, and in January of 1954 he sold
his pinball operation and took Mr. Sohacki in partnership with him
and from then on they flooded the area with gambling machines.
Mr. Kennedy. What about the public prosecutor? He was re-
moved from office in 1950 ?
Mr. Duffy. He was removed from office and then Mr. Dave Stanton
came in and he tried to clean up the area and he did to a certain de-
gree, and he was voted out of office in 1952 and Mr. Holovachka took
over.
Mr. Kennedy. Arid then the same system has been reintroduced
since Mr. Holovaclil^a came in ?
J\Ir. Duffy. A very similar situation exists today.
Senator Mundt. A similar situation to that which prevailed before
the cleanup campaign got underway ; you mean ?
Mr. Duffy. Yes, Senator.
Senator Mundt. So that things are now about as bad as they were
before the reform element tried to clean it up ?
]Mr. Duffy. We feel that they are.
TESTIMONY OF STEVEN D. SOHACKI AND GEOEGE W. WELBOURN—
Eesumed
Mr. Kennedy. Mr. Sohacki, are you making payments to Mr. Metro
Holovadika for the operation of your pinballs in the Lake County
area?
Mr. Sohacki. I raspectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Mr. Welbourn, are you making payments to Mr.
Metro Holovachka for the operation of the pinballs in the Lake County
area ?
Mr. Welbourn. I respectfully decline to answer on the grounds
that my answer may tend to incriminate me.
]Mr. Kennedy. Now, in 1955, each one of you declared on your
income tax returns that you provided to the committee, $424,000
apiece as net income. Did part or any of that go to Mr. Metro
Holovachka, Mr. Welbourn ?
]\Ir. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Did any of this money go to Mr. Metro Holovachka,
Mr. Sohacki?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18543
Mr. SoHACKi. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
INIr. Kennedy. Would you furnish to the committee the sites of
your various pinballs in the Lake County area? We still haven't
been able to get that information. Coidd you give us that infor-
mation ?
Mr. SoHACKi. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. IvENNEDY. Mr. Welbourn, would you furnish that information?
Mr. Welbourn. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
'Mr. Kennedy. Now, would you give us the collection records in
connection with your pinball operations, Mr. Welbouni? We still
haven't been able to get that information.
Mr. Welbourn. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
]\Ir. Kennedy. Would you give us that information, Mr. Sohacki ?
Mr. Sohacki. I respectfully decline to answer on the gi'ound my
answer may tend to incriminate me.
Mr. Kennedy. Was any money taken out of those collection records
and, in other words, "off the top," in order to make any payments to
Mr. Metro Holovachka, Mr. Sohacki ?
Mr. Sohacki. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Mr. Welbourn ?
Mr. Welbourn. I respectfully decline to answer on the gi'ounds
that my answer may tend to incriminate me.
Mr. Kennedy. Now, for instance, was any of the money used or
given to Mr. Holovachka so that he could do some work on his home
in 1955 and 1956, Mr. Welbourn ?
Mr. Welbourn. I respectfully decline to answer on the grounds
that my answer may tend to incriminate me.
Mr. Kennedy. Mr. Sohacki ?
Mr. Sohacki. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Mr. Chairman, would it be all right if I call Mr.
Sinclair in connection with the payments that were made on this ?
Senator Mundt. Will Mr. Sinclair take the chair at the end of the
table, please ? Have you been sworn in this case, Mr. Sinclair ?
Mr. Sinclair. Yes ; I have.
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
Senator Mundt. Counsel will proceed.
Mr. Kennedy. We are not going at this time into detail in con-
nection with what we have found out financially regarding Mr.
Holovachka's operations, Mr. Sinclair, but in connection just with his
home.
Could you tell us what the records reveal as far as cash payments
that were made by Mr. Holovachka in connection with the work that
was done on his home in 1955 and 1956 ? First, would you describe
what work was done ?
18544 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Sinclair. We have found that in 1955, in the middle summer
of 1955, Mr, Holovachka constructed a new home on the side of Lake
Michigan in the Miller section of Gary.
Mr. Kennedy. At this time he was public prosecutor ; is that right ?
Mr. Sinclair. He was county prosecutor.
Mr. Kennedt. What was his salary as county prosecutor?
Mr. Sinclair. His salary was $12,000 a year.
Mr. Kennedy. That was paid by check ?
Mr. Sinclair. That was paid — I am not certain, Mr. Kennedy.
The cash payments made during the period July 1 to November 18,
1955, in small bills, $10's and $20's, in circulated condition, was $27,-
650 for the purchase and construction of this home.
Mr. Kennedy. Wliat dates was that again ?
Mr. Sinclair. That was July 1, 1955, to November 18, 1955.
Mr. Kennedy. That was by Mr. Holovachka ?
Mr. Sinclair. Mr. Holovachka personally made these payments,
Mr. Kennedy. What was the total amount ?
Mr. Sinclair. The total amount was $27,650.
Mr. Kennedy, That was all in $10's and $20's ?
Mr, Sinclair. Yes ; in circulated condition.
Mr. I^NNEDY. Was there any other money spent on his home?
Mr. Sinclair. During 1956, the period February 11 to July 20,
$13,500 was paid.
Mr. Kennedy. Was that by check or cash ?
Mr. Sinclair. All of these payments were made in cash.
Mr. Kennedy. Wliat kind of bills were they ?
Mr. Sinclair. The majority of it was made in $20's and $10's in
circulated condition.
Mr. Kennedy. Were there any other payments ?
Mr. Sinclair. There were other payments, but not during this
period.
Mr. Kennedy. Were there any other payments made in the form
of cash ?
Mr. Sinclair. No, sir ; not on this.
Mr. Kennedy. What is the total, then, that was paid ?
Mr. Sinclair. The total paid was $43,599.46.
Mr. Kennedy. That was paid to the contractors that did the work ?
Mr. Sinclair. That was paid to the prime contractor and to sub-
contractors.
Mr. Kennedy. Would you give the specific dates and the amounts
that were paid, please ?
Mr. Sinclair. July 1, 1955, $4,500 was paid to George Drag, who
did the masonry work and roofing work and interior finish work and
he did all of the work on the home except the landscaping, the elec-
trical work, and the plumbing and heating.
Mr. Kennedy. What bills were they, the $4,500 ?
Mr. Sinclair. They were in $20's.
On July 15, 1955, $5,500 was paid to Mr. George Drag and his
son in $10*'s and $20's. On September 29, 1955, $5,000 was paid to this
contract in $20 bills. October 7, 1955, $5,000 was paid in $20 bills.
On November 20, 1955, $5,000 of cash in $20 bills.
Now, on August 23, 1955, $1,000 was paid to the Continental Elec-
tric Co. as a downpayment on the electrical work done on this home,
and it was in small bills, with the bank wrapping on them.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18545
On September 21, 1955, the initial payment was made to the Central
Plumbino; & Heating Co. at $1,650 in small bills. That represents
the payments made during 1955.
In 1956 Mr, George Drag, on February 11, received $5,000 in small
bills from Mr. Holovachka. On April 13, 1956, he received $4,500 in
small bills. That is $20 bills or less, from Mr. Holovachka.
On May 28, 1956, $1,500 was paid in small circulated bills. On
July 20, 1956, $1,035 in small bills was paid which wtis the final pay-
ment for all work done by George Drag on tliis one piece of property
of Mr. Holovaclika.
Now, to Central Plmnbing & Heating, the heating subcontractor
and plumbing subcontractor, $1,001 was paid March 2, 1956, in small
bills. On May 28, $500 was paid in cash.
Mr. Kennedy. On summary, that is about $41,000 in a period of
about 12 months ; is that right ? And another $1,500 or so in Decem-
ber of 1956 ?
Mr. Sinclair. In December of 1956, $1,718 was paid in cash.
Mr. Kennedy. So it is about $41,000 in cash in small bills, $10's
and $20's, for the work done on his home over a period of approxi-
mately a year, and then added to that there is another some $1,700
which brings the total up to about $43,000 in cash.
Mr. Sinclair. That is right.
Mr. Kennedy. That, of course, is not the complete story by any
means, as far as the cash payments of Mr. Holovachka during the
period of time that he was public prosecutor, but we will be going into
that at a later time.
Mr. Sinclair. Yes, sir.
Mr. Kennedy. Do you have pictures there of his home ?
Mr. Sinclair. Yes; we do have pictures taken of his home. The
home that he built in 1950 partly conceals the view in one of these
pictures, but we have a full-faced picture of it taken later on.
Mr. Kennedy. Would you describe what the homes are ? You have
a small home in the front and then a larger house.
Mr. Sinclair. The small preconstructed Cooper house was con-
structed in 1950 for Mr. Holovachka by the Cooper Homes Corp., for
$11,700. The larger home which is reported to have a value of ap-
proximately $80,000, is the home that he constructed in 1955.
Mr. Kennedy. And that is where these payments were used on the
larger home ?
Mr. Sinclair. Yes, sir.
Mr. Kennedy. We have requested, have we not, of Mr. Holovachka,
an explanation as to where these sums of cash came from ?
Mr. Sinclair. Mr. Holovachka has consistently refused to furnish
us the source of this cash.
TESTIMONY OF STEVEN D. SOHACKI AND GEORGE W. WELBOURN—
Resumed
Mr. Kennedy. Did any of that money come from you, Mr. Sohacki ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy Mr. Welbourn, did any of that money come from
you?
18546 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Would you relate to the committee how you were able
to 2:et a monopoly over the pinball machines in the Lake County area,
Mr. Welbourn ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Would you tell us, Mr. Sohacki ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. Mr. Welbourn, did you have to split your income
with anybody else except this particular prosecutor ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. How about you, Mr. Sohacki, did you have to split
this take with anybody else except the public prosecutor ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. How about you, Mr. Welbourn, in case you were
the bag man. Did you make any payments in bills bigger than $20 ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. It cannot incriminate you if you are able to say
no. Are you able to say no ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. How about you, Mr. Sohacki? Can you search
your conscience and say no ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. You wouldn't blame this committee in assuming
that the answer must be "Yes," then, would you?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. Go ahead, Mr. Counsel.
Mr. Kennedy. Mr. Sohacki, do you know Mr. Chronowski, Peter
Chronowski ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Could you tell the committee why you have been
in contact with Mr. Peter Chronowski, the justice of the peace in
Hammond, Ind. ?
Mr. Sohacki. I respectfully decline to answer on the gromid that
my answer may tend to incriminate me.
Mr. Kennedy. He is justice of the peace in East Chicago.
Would you tell the committee why you have been in touch with
him ? Or why you have been in touch with Mr. Conroy, of the public
prosecutor's office ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Mr. Conroy is the one who conducted the raids
against your competitors with Mr. Chronowski. Is that the reason
that you were calling them, to tell them where your competitors had
machines so that they could go around and pick them up?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18547
Mr. SoHACKi. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Is that correct, Mr. Welboum ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. According to the testimony before the committee,
you own the building in which the U.S. post office is located. Is tliat
correct, Mr. Sohacki ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. And you purchased the building with the money that
you gained from the pinballs ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. And you receive monthly rent of some $490 from
the U.S. Government ; is that right ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Is that correct, Mr. Welbourn ?
Mr. Welbourn. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Mr. Sohacki, you have a radio station in Gary,
Ind. ; do you not ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. What is that used for ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. That radio station has a code; does it not? Would
you tell us what the code is ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Would you tell us, Mr. Welbourn ?
Mr. Welbourn. I respectfully decline to answer on the gromid that
my answer may tend to incriminate me.
Senator Mundt. If you have a radio station, Mr. Sohacki, you must
have a license from the FCC. Do you have a license from the FCC ?
Mr. Sohacki. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. Let me ask you this question: Do you have a
license from the FCC to operate a radio station? If you don't, and
if you are operating a radio station, or if you are concealing that
fact — j ust a minute.
I will ask this gentleman, the stranger to the left, to sit back a little
ways. I don't know who you are, but you can't interfere with the
witnesses unless you have some status in the committee.
Mr. Whealan. I am the attorney.
Senator Mundt. You have no status as long as they deny the fact
you are the attorney, sir. I don't know whether you are the attorney
or not.
I asked them whether they had an attorney and they refused to
answer. They are entitled to an attorney of their own choice.
But we can't let volunteers pop up around the audience and say
they are attorneys for anybody.
18548 IMPROPER ACTIVITIES IN THE LABOR FIELD
You will have to sit back a little way unless you are their attorney.
If you are their attorney, that is up to them and not up to you.
Please sit back with the audience.
Mr. Whealan. Do you wish me to move back ?
Senator Mundt. Move back a few steps. I have no way in the
world of telling whether you are an attorney or not because they
denied the fact.
Now, sir, I want to find out about this radio station because you
are getting into Federal business now. You either have a license
to operate a Federal radio station or you do not.
If you do, we want to know about it. If you do not and you are
operating a radio station, I want you to go to jail for violating the
law. We have had enough of this tomfoolery.
I am asking you : Do you have a license to operate a radio station ;
yes or no ?
Mr. SoHACKi. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. Do you operate a radio station ?
Mr. SoHACKi. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. I can assure you this committee is going to find
out, and if the FCC has granted a license to a man who is unwilling
to admit he has a license, if he is concealing facts of that kind from
the committee, I think that license should be speedily revoked.
This Government does not want radio licenses to operate stations
to go to criminals. I will give you one more chance.
Do you have a Federal license to operat-e a radio station ?
Mr. SoHACKi. I respectfully decline to answer on* the ground that
my answer may tend to incriminate me.
Senator Mundt. Now about you, Mr. Welbourn ?
Mr. Welbourn. I respectfully decline to answer on the ground
that my answer may tend to incriminate me.
Senator Mundt. If you have a station, and you have a license, I
can assure you this committee will do everything it can to be sure that
you no longer have a license or a station.
You know whether you have one or not. I do not know.
Are there any other questions, Mr. Counsel ?
Mr. Kennedy. That is all, Mr. Chairman.
Senator Capehart. Mr. Chairman ?
Senator Mundt. Senator Capehart.
Senator Capehart. Is it your intention to answer all questions as
you have been answering them regardless of what I might ask you ?
In other words, do you intend to take the fifth amendment to any
questions I might ask ?
Mr. SoHACKi. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Capehart. That is all, Mr. Chairman.
Senator Mundt. You may step aside.
Commissioner Doerfer of the Federal Communications Commis-
sion will come up as the next witness.
Be sworn.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18549
Do you solemnly swear that the testimony you are about to give
is the truth, the whole truth, and nothing but the truth, so help you
God?
Mr. DOERFER. I do.
TESTIMONY OF JOHN C. DOEEFER
Senator Mundt. For the record, please tell the committee your
name, your address, and your occupation.
]Mr. DoERFER. My name is John C. Doerf er ; I reside at 9424 Locust
Hill Road, Bethesda, Md. I am presently Chairman of the Fed-
eral Communications Commission, being appointed in 1953. My
term expires in 1961.
Senator Mundt. Thank you.
Counsel, do you want to proceed ?
First, do you have some associates with you, Mr. Doerf er?
Mr. DoERFER. I have part of my staff with me.
Senator Mundt. Would you like to have them participate in the
hearing or beside you ?
Mr. DoERFER. It may be necessary with respect to some detailed
answers which you might request.
Senator Mundt. Mr. Doerfer, would tliey be testifying or just
consulting with you ?
Mr. Doerfer. They will be consulting with me.
Senator Mundt. Very well.
Mr. Kennedy. Mr. Doerfer, there has been a license granted, has
there not, for the operation of a radio station in Gary, Ind., by
Mr. Welbourn and Mr. Sohacki ?
Mr. Doerfer. I have a certificate indicating that a license to oper-
ate in the citizens radio station band was issued to the Indiana Sup-
ply Co. at the behest of an application signed by Steven S. Sohacki,
which license was issued November 16, 1955, and which license will
expire November 16, 1960.
Mr. Kennedy. What was the purpose of the license ?
Mr. Doerfer. It does not indicate the purpose of the license.
Mr. Kennedy. Would you explain briefly to the committee what
your procedures and policies are with respect to the granting of
licenses ?
Mr. Doerfer. Yes. In the citizens radio allocation are licenses
which are issued to citizens of the United States who cannot qualify
or are not eligible for a license in the marine services, the aviation
services, the police services, the forestry, railroad, public utilities,
or industrial, or amateur.
Senator Mundt. You say if they do not qualify in any of those cate-
gories, then they get a license as a citizen for the band; is that right?
Mr. Doerfer. Yes. In 1946 the Federal Communications Commis-
sion set aside 10 megacycles of space to the average citizen to permit
him to use and develop that portion of the spectrum for various uses.
It is used primarily by small business people who operate plumbing
establishments, electrical concerns, small-delivery men, peo|)]e who
have hobbies, such as controlling the small airplanes ; people who are
developing ways and means of opening doors, particularly garage
doors, by the use of a radio frequency.
36751— 59— pt. 53 9
18550 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator jMundt. In order to have one of these garages that open
from within the car, do you have to get an FCC license for a radio
station to do that ?
Mr. DoERFER. Yes.
I might explain that. There is a very small power which is per-
mitted by the FCC as de minimis. But if it is likely to cause any
interference to any other operation, the operator must secure a license.
Our primary concern in that field is to avoid interference, but at the
same time to pennit a use which may indicate a development for a
very useful purpose.
Senator Mundt. Let me ask you, Mr. Chairman, if there is any
screening process through which an applicant has to go in order to get
a license of this kind, or are they equally available to people whether
they are crooks, Communists, kidnapers, counterfeiters, or just good,
honest citizens ?
Mr. DoERFER. I might indicate that there is no screenmg. We have
outstanding between 45,000 and 47,000 licenses in this category alone.
There are at present operating in this countiy, licensed to operate,
about 435,000 licensees in all categories, and my best judgment is that
there are over 1,500,000 radio transmitters.
We get into the category of citizens radio and the licensing process
is rather perfunctory. We ask that they indicate who they are, that
they are United States citizens ; and now we ask what use they propose
to make. I might indicate that in 1955 not even that question was
asked.
Senator JMundt. Are any licenses ever rejected or turned down ?
Mr. DoERFER. Well, they may be turned down, of course, if the
applicant indicates he is not a citizen, or if he makes an application
for a power or frequency which is not available.
Senator Mundt. Let me ask you what function this licensing serv-
ice renders the public if it is purely perfmictory and if any old crook,
running a counterfeiting mill, putting in a radio band in order to
notify his operators that the cops are coming so that he can get his
machinery in behind the vault ? What is the purpose of the licensing
mechanism ? I just don't quite understand it.
Mr. DoERFER. In this category, as well as other categories, we keep
a record of who opei-ates. Anyone who is inclined to use it for an
unlawful purpose does not get a license to operate.
Senator Mundt. You do have the power to reject ?
Mr. DoERFER. Yes; we do. We have the power to revoke. But
insofar as an illegal use is concerned, the only thing that we could
do there is to detect it and then to turn it over to the proper authori-
ties, generally the Department of Justice, or it could be local State
authorities.
Senator Mundt. You have the power to revoke, do you, on sus-
picion of illegality ?
Mr. DoERFER. Not suspicion, Senator. When an allegation is made
we investigate, and if the investigation sustains reasonable doubt as
to the legality of the operation we so indicate to the licensee. He is
notified. He is given an opportunity to be heard. After hearing,
if the evidence establishes it, a revocation would naturally follow.
Senator Mundt. In your opinion, Mr. Chairman, when a licensee
who, when asked before a tribunal of law or a congressional com-
IMPROPER ACTIVITIES IN THE LABOR FIELD 18551
mittee if he has a station or if he has a license for it, and who feels
compelled to take the fifth amendment, would that tend to establish
in 3'oiir mind some doubt as to the public service use that he is making
of liis license ?
Mr. DoERFER. That would be a specific violation of our rules and
some aspects of the law. In order to permit the full development of
this, this country has indicated that these licensees must cooperate,
so that when we interrogate them, when we want information, which
is material and relevant to our duties, they must cooperate and supply
that information. They must permit us to inspect.
Senator Muxdt. In your interpretation of that public compul-
sion, I presume you would include an established committee of Con-
gress or a court of law, as well as the FCC in requiring the coopera-
tion, would you not ?
Mr. DoERFER. Yes. I would indicate that any licensee who doesn't
cooperate would certainly place himself in the position where it
would be the duty of the Commissioners or the Commission to re-
voke it.
Senator Mundt. I am very happy to have that statement from you,
speaking as the acting chairman of this committee, who has just lis-
tened to some charactei-s who do have a radio station there and a
license, against whom there is a very heavy presumption of wrong-
doing, who take the fifth amendment not only in connection with
their alleged operations involving the violation of law, but also in
connection with w^hether they have a license or how they use the sta-
tion, and whether it is used to defeat the law or some other purpose.
It is encouraging to have you say that. I would dare to believe
that you would have information enough now to revoke a license up
in Gaiy, Ind., which apparently is not being operated in the public
interest.
Mr. Counsel, have you any questions ?
]Mr. Kennedy. Would you also consider the fact that the license
and the station were being used to promote activities whicli were in
violation of State law, for instance, gambling activities ? Would that
also be a factor ?
Mr. Doerfer. That would be a ground for revocation ; yes.
Mr. Kennedy. Have you made an investigation of this situation in
Gary, Ind., in cooperation with the staff of this committee?
Mr. Doerfer. Yes ; we have. At the instigation of this committee,
or members of its staff', we were alerted in February, and since that
time have cooperated with the staff, as I understand it.
Mr. Kennedy. That is correct.
Did a representative of your office go in to try to interview those
who were operating the station, to try to get some information in con-
nection with it ?
Mr. Doerfer. Yes ; I have that information.
Mr. Kennedy. Would you relate what happened when your repre-
sentative went there ?
Mr. Doerfer. The report indicates that a Mr. Ernest Galins, an
assistant engineer in charge of the Chicago district office, attempted
an inspection of Citizens Kadio Station 18-A-1447, operated by the
Indiana Supply Co., also known as the Star Supply Co., at 4095 Madi-
son Avenue, Gary, Ind., on June 3, 1959.
18552 IMPROPER ACTIVITIES IN THE LABOR FIELD
The station is located in a private home and is associated with an
answering service. Mr. Galins attempted to gain admission and suc-
ceeded only after some little difficulty. A woman who later identified
hei^elf as Stella Murphy let him in.
It was apparent that Stella Murphy was the operator. In answer
to questions, she stated that she does not know who she is working for.
She later gave the name of her supervisor as Mr. Randall, but no
-initials, no address or telephone number. She stated thfit she does not
know the identity of whom she calls on the radio, and she does not
know how many mobile units they have in the system.
May I interpolate they have licenses for 29 mobile units.
All those messages— excuse me. They have licenses for 30, but I
understand that they operate 29.
All those messages of a coded variety are transmitted. She does
not have a copy of a code sheet from which an interpretation of the
code words used could be ascertained. She said she threw away her
copy. She gets her messages over the telephone and repeats them
on the radio.
Again, she has indicated she has no knowledge of the identity of
her contacts; no logs are kept. However, for this class of station
none is required.
Senator Mundt. Is the use of coded messages a violation of the
law?
Mr. DoERFER. It is not. I might indicate that not only the police
units in this country use code, but in all of these shared frequencies
the Commission urges an economy of use. To that extent, codes are
used.
I might also indicate that in order to afford the small businessman
to use it, and he must use it on a shared basis, they devise codes to
keep information from their competitors.
Senator Mundt. I see.
Mr. Kennedy. Do they have to file the code with the FCC ?
Mr. DoERFER. No.
Senator Mundt. They can just use any code they see fit ?
Mr. DoERFER. Yes.
Senator Mundt. When you go in and request the code, do they
have to furnish it at that time ?
Mr. DoERFER. Yes.
Senator Mundt. Have you obtained it yet from this station ?
Mr. DoERFER. We have not.
To resume, the transmitter is a Citizens Radio RCA model, CSITB,
having type B approval. No. CR-420; associated with the calling
service is a garage on Highway 6 in the western part of Gary. It was
locked. Five mobile units were parked out there. The license num-
bers have been obtained, but not traced as yet. The cars also ap-
peared to operate in the 460 megacycle band.
Our inspector pounded on the door. A man stuck his head out of
another opening. When he went to that opening and knocked, he
got no answer. The above is a result of a conversation between
Mr. Ernest Galins and Frank M. Kaartoki, an assistant chief of the
field engineering and monitoring crew at 10 : 40 a.m., June 3, 1959.
Senator IMundt. At least it would seem, Mr. Chairman, that these
particular operators have equal contempt for the FCC and the Sen-
ate Investigating Committee.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18553
I wonder if you can pick up tlie story from its past tense and
project it into its future tense.
Mr. DoERFER. I want to say this. It gave me considerable con-
cern early in my term as Commissioner, the possibility of radio for
clandestine, espionage, and illegal purposes. However, the philoso-
phy of this country has been, and I quite agree with it, that it is more
important to develop this very valuable national resource as a dis-
tinct contribution to our national defense, public safety and economy.
No doubt the future will require much closer monitoring so that this
Congress may be informed how to deal with it adequately, and to not
defeat the larger purpose.
So far in our administration we take the position that the moment
we detect through our monitoring or are advised by tips or informa-
tion, we make as complete an investigation as is within our power,
and we promptly notify and establish liaison with the Department
of Justice and other law enforcement agencies.
I might also say for the record that this Commission has indicated
the necessity for increasing our field of monitoring services. We have
requested, as early as 1954 an additional appropriation of $950,000.
As yet Congress has not seen fit to make that appropriation.
Senator Mundt. While we are on that point, let me put on my cap
for a moment as a member of the Appropriations Committee, which
has been dealing with these requests, and ask you how much, if any,
of a fee does an outfit like the Indiana Supply Co. have to pay in
order to get a license in the first place ?
Mr. DoERFER. It pays no fee whatsoever.
Senator Mundt. Our committee feels, speaking of the Govern-
ment Operations Committee, the Appropriations Committee, that
there should be closer supervision, that there should be some kind of
screening, that you should have adequate foUowup supervisory and
pol ice powers to protect the public interest.
But many of us feel that this is a rather important economic asset
that any group has that gets this license, and that a modest fee, capable
of sustaining the service operation through the FCC, might be highly
appropriate.
You were not called here for purposes of testifying about that. You
may not have formulated an opinion, but if you would care to com-
ment on it, I think it would be of interest.
Mr. DoERFER. Well, none other than to indicate that there was under-
taken in the FCC at the request of the Budget Committee a study to
determine what would be equitable and practical fees to assess against
various licensees.
While that report was being made, one of the committees of Con-
gress indicated not to do any more about it ; just to stop ; that it would
require a discussion with respect to the broad principles of requiring
some people who say they are performing a public service, whether
or not it would be advisable to assess a licensing fee.
I might indicate, and rightly so, that this Government has taken
the position that the radio spectrum belongs to the public and no
licensee should get the idea for a moment that he has a property right
in it. I think that was one of the things that persuaded this commit-
tee to go carefully on pursuing further the possibility of assessing
licensing fees.
18554 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. It is certainly true that if he pays no fee at all, he
has no property rights. It would seem if he paid no fee at all that
the Commission could and should summarily revoke licenses from
people who refuse to cooperate with recognized enforcement organiza-
tions of the Government.
Mr. DoERTER. Well, we have always regarded it as a privilege, and
so should the licensee. However, the law requires that before we
revoke, we must grant a hearing. So we canont revoke summarily.
Senator Mundt. As one who has been here for a long time, and who
has spent a lot of hours studying this problem, I want to say for the
record that speaking for myself, I think a system of service fees for
these Government functions should be provided.
We have a highly inconsistent Federal policy. For a fellow to get
a passport to visit his homeland, Norway, Italy, or someplace, he has
to pay a license fee for a passport larger than the fellow who sets him-
self up in the business of broadcasting, which can make him consider-
able revenue.
Some of these fees, I think, should be incorporated. That would help
tremendously with our budegtary problems in an era when we are using
an awful lot of red ink. But that is not the purpose of this hearing.
This is a special select committee which is not a branch of the Appro-
priations Committee nor of the Government Operations Committee, so
I don't want to stress that point any further. I wish to commend you
for the fact that you are studying it, and I wish to urge you to continue,
because I think the day is coming and should come soon when we pro-
vide some system of reasonable service fees for those kind of Govern-
ment concessions and permissions and licenses which are definitely in
the area of commercial activitj^.
Do you have any other questions on the instant case ?
Mr. Kennedy. As I understand it, then, steps are going to be taken
in connection with the station in Gary, Ind., immediately ?
Mr, DoERFER. Yes.
Mr. Kennedy. We also had another situation, Mr. Chairman, in
connection with the station that Mr. Marcello had down in New Or-
leans. Mr. Marcello was not even a citizen of the United States. He
is a well-known gangster and hoodlum. He had been convicted a
number of times. He was able to obtain a station down in New Or-
leans.
Would you make any comment on that ?
Mr. Doerfer. Yes. When this Commission was advised of that, it
conducted an investigation, established liaison with the Justice De-
partment immediately.
May I say from there on — it is not classified information, but I think
it would be inadvisable to discuss it publicly.
Mr. Kennedy. But the Justice Department, then, is undertaking
their own investigation ?
Mr. Doerfer. I want to leave you with this assurance: that tliis
Commission and the Justice Department are actively on that case and
working hard.
I want to make one more statement with respect to our field monitor-
ing people. I think our record indicates they have done a tremendously
good job. We have, in addition to the ordinary inspection and monitor-
ing, run-of-the-mill or day-to-day work, a good deal of — well, we do
IMPROPER ACTIVITIES IN THE LABOR FIELD 18555
locating of lost airplanes, and sometimes some equipment which could
almost be regarded as subversive in character. We lay a good deal of
emphasis on that.
With what money we have, we try to put first things first. To put
it briefly, I would think that with a given budget, I would much prefer
to spend that money in saving the lives of some good citizens or air-
men, military people, if we can cooperate, boats that are in distress,
than to run down pinball operators.
It is a question of degree of importance. I don't wish to leave the
impression that we would ignore it. When it is called to our attention,
we would most certainly become quite active in that direction.
Mr. Kennedy. This isn't just a question of running down pinball
operators. This is a question of a license that is granted by the Fed-
eral Government, a privilege that is given to somebody. We have had
two cases before the committee. One concerns a man who has been
convicted on two different occasions, a man who is not even a citizen
of the United States. He is head of the underworld in the southeast-
ern part of the United States. He has such a license.
Then you have this other situation in Gary, Ind., where an opera-
tion that extends through the whole of the county is illegal under
State law, and it is made possible because, once again, they have a
license from the FCC.
It is not just a question of somebody running down a pinball
operator.
Mr. DoERFER. Counsel, I didn't mean to deprecate the efforts of this
com,mittee. As a matter of fact, I am of a contrary opinion. I agree
that my statement was more or less of a defensive nature. However,
I am ti-ying to readjust a false public impression that we don't pay
any attention to these things. On the contrary, we just don't have the
money.
Mr. Kennedy. You don't pay any attention to it, then ?
Mr. DoERFER. Yes, we do.
Mr. Kennedy. You said that you didn't pay any attention to it be-
cause you don't have the money.
Mr. DoERFER. No ; I didn't say that.
Mr. Ivennedy. That is what I understood.
Mr. DoERFER. I meant to say that if, during the course of our test
checking, we expose or run into that type of thing, we certainly pursue
it. But where we can monitor less than 2 percent of the operating
frequencies, you can see there is a wide margin for some skulduggery
which we just wouldn't detect.
Mr. Kennedy. Do you think that the law should be changed or that
some different systems should be used, Mr. Chairman?
Mr. Doerfer. No. I don't think that the situation is right for a
change in the law, in the sense that I am thinking of at the m.oment.
I think if this Commission had more funds to expand its monitoring
service, we may come up with infonnation and recommendations
which would dictate perhaps some new legislation.
Senator Mundt. Are there any questions, Senator Capehart?
If not, thank you very much, Mr. Commissioner, for your informa-
tion. We are gratified to know that action is going to be taken on
this Gary station. I will discuss with you some other time my idea
of having a little screening established so that we can screen these
18556 IMPROPER ACTIVITIES IN THE LABOR FIELD
things out in advance instead of having to lock the door after the
horse is gone.
Mr. IvENNEDY. Mr. Ryder, Mr. Gogola, and Mr. Anderson.
Senator Mundt. The man on the left, what is your name ?
Mr. GoGOLA. Walter Gogola, Jr.
Mr. Ryder. I am Edward Ryder.
Senator Mundt. Is Mr. Anderson in the room ?
Stand and be sworn.
Do you and each of you solemnly swear the testimony you are
about to give before this committee will be the truth, the whole truth,
and nothing but the truth, so help you God ?
Mr. Ryder. I do.
Mr. Anderson. I do.
Mr. GoGOLA. I do.
TESTIMONY OF WALTER J. GOGOLA, JR., EDWARD S. RYDER, AND
HAROLD ANDERSON, ACCOMPANIED BY COUNSEL, JAMES E.
WHEALAN
Senator Mundt. Starting with you on my left, will you give us
your name, please, your place of residence, and your occupation or
business ?
Mr. Gogola. My name is Walter Gogola, Jr. I live at 4025 Cleve-
land, Gary, Ind. As far as my business, I respectfully decline to
answer under the fifth amendment of the Constitution of the United
States on the ground that my answer may tend to incriminate me.
Senator Mundt. The man in the center, will you answer the same
question ?
Mr. Anderson. My name is Harold Anderson. I reside at 206
West 49th, Gary, Ind.
I respectfully decline to answer mider the fifth amendment of the
Constitution of the United States on the ground that my answer may
tend to incriminate me, as far as my occupation is concerned.
Senator Mundt. Next ?
Mr. Ryder. My name is Edward Ryder. I live at 1401 West 45th,
Gary, Ind.
On your third question, I respectfully decline to answer under the
fifth amendment to the Constitution of the United States on the
ground that my answer may tend to incriminate me.
Senator Mundt. Starting with you, do you have counsel here to
represent you ?
Mr. Ryder. Yes ; I have counsel.
Senator Mundt. Who is your counsel ?
Mr. Ryder. James Whealan, of Chicago.
Senator Mundt. Mr. Anderson, do you have coimsel ?
Mr. Anderson. Yes ; I do.
Senator Mundt. Who is your counsel ?
Mr. Anderson. James Whealan, Chicago, 111.
Senator Mundt. How about you?
Mr. Gogola. Yes ; I do ; James Whealan, of Chicago, 111.
Senator Mundt. Is your counsel here ?
Mr. Ryder. Yes.
Senator Mundt. Will you give us your business address, Mr.
Whealan?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18557
Mr. Whealan. Ill West Washington Street, Chicago, 111.
Senator Mundt. Veiy well, sir. You may sit at the table and con-
sult with them in any way they ask you to.
All right, Mr. Kennedy.
Mr. Kennedy. Mr. Ryder, you are an employee of the Indiana
Supply Co., the Sunset Supply Co., and the Star Supply Co. ; is that
right?
Mr. Ryder. Mr. Kennedy, I respectfully decline to answer under
the fifth amendment to the Constitution of the United States, that
my answer may tend to incriminate me.
Mr. Kennedy. Do you also use the name Randall, Mr. Ryder?
Mr. Ryder. Mr. Kennedy, I respectfully refuse to answer under
the fifth amendment of the Constitution of the United States, on the
ground that my answer may incriminate me.
Mr. Kennedy. We have had two identifications of Randall before
this committee. Mrs. Hagler identified a man by the name of Randall
that came out to her place of business and told her not to cooperate
with the staff of the committee, not to tell them anything, not to turn
over her books.
According to the testimony of the Commissioner, when a represent-
ative of the FCC visited the Star Supply Co., they were told that a
Mr. Randall was in charge.
Is that Mr. Randall you, Mr. Ryder?
Mr. Ryder. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Mr. Chairman, we have Mrs. Hagler still here. She
is in the room. Could we ask her to come around and see if she can
identify him?
Senator Mundt. Yes. Have her take this chair.
Has she been sworn ?
Mr. Kennedy. Yes,
TESTIMONY OF MRS. MARGARET HAGLER— Resumed
Senator Mundt. Mrs. Hagler, you have been previously sworn, have
you not ?
Mrs. Hagler. Yes.
Mr. Kennedy. Mrs. Hagler, can you identify the individual who
identified himself as Randall when he came to visit you?
Mrs. Hagler. Yes, sir.
Mr. Kennedy. Who is the individual ?
Mrs. Hagler. The first man that sits on the left of the table.
Mr. Kennedy. The one with the gray coat ?
Mrs. Hagler. Yes, sir.
Mr. Kennedy. The one that has identified himself before this com-
mittee as Mr. Ryder ?
Mrs. Hagler. Yes.
TESTIMONY OF WALTER J. GOGOLA, JR., EDWARD S. RYDER, AND
HAROLD ANDERSON, ACCOMPANIED BY COUNSEL, JAMES E.
WHEALAN— Resumed
Mr. Kennedy. Is that correct, Mr. Ryder ?
Mr. Ryder. Mr. Kennedy, I respectfully decline to answer on the
ground my answer may tend to incriminate me.
18558 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Why did you use the name Randall or, better still,
why was there so much mystery surrounding this operation, Mr.
Eyder?
Mr. Ryder. I respectfully decline to answer on the ground that my
answer may tend to incriminate me.
Mr. Kennedy. Nobody was to give their names. The men who went
around to repair the machines didn't give their names. All they gave
was a telephone number. Nobody laiew that Mr. Sohacki and Mr.
Welbourn were behind the company. Then you give a fictitious name
of your name.
Would you tell us why you wanted so much mystery to surround the
operation of this company ?
Mr. Ryder. Mr. Kennedy, I respectfully decline to answer on the
ground that my answer may tend to incriminate me.
Mr. Kennedy. As we understand it, and from what we can find
out, you were the foreman who operated the company and sent around
the collectors and made some collections yourself.
Could you tell us whether the records that have been made avail-
able to the committee in connection with the operation of this company
are accurate as far as the collections received are concerned?
Mr. Ryder. Mr. Kennedy, again I respectfully decline to answer on
the grounds that my answer may tend to incriminate me.
Mr. Kennedy. Would you turn over to the committee any of the
documents that you have in connection with the collections that
you made ?
(The witness conferred with his counsel.)
Mr. Ryder. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr. Kennedy. Isn't it correct that the payments that were made
to Mr. Holovachka or any other individual were made off the top
from these collections, rather than later on after the money had
actually been entered into the books ?
Mr. Ryder. Mr. Kennedy, again I respectfully decline to answer
on the grounds my answer may tend to incriminate me.
Senator Mundt. Was part of your function in the company, Mr.
Randall, to make the payoffs to the public prosecutor ?
Mr. Ryder. I respectfully decline to answer on the ground my an-
swer may tend to incriminate me.
Senator Mundt, Is it a fair assumption for the committee to make
in view of that answer, that you were the man who paid off the prose-
cutor from the top of the take ?
Mr. Ryder, I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. How would a negative answer incriminate you,
Mr. Ryder ?
Mr, Ryder, I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Senator Mundt. Can you think of any way that saying no would
incriminate you ?
Mr. Ryder. I respectfully decline to answer on the ground my
answer may tend to incriminate me.
Mr, Kennedy, Mr, Gogola, you have been an employee of the In-
diana Supply Co,, the Sunset Supply Co,, and the Star Supply Co. ;
is that right ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18559
Mr. GoGOLA. I respectfully decline to answer under the fifth amend-
ment to the Constitution of the United States on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. And you also have information regarding the col-
lections that were made ^
Mr. GoGOLA. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. Will you tell us anything about how the collections
were handled, and whether the books and records of the Star Supply
Co. show the correct amounts of the money actually collected?
Mr. GoGOLA. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. Was there a certain amount of so-called top money
that was kept out for the payment to Mr. Holovachka and to any
other individuals 'i
Mr. GoGOLA. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. Would you tell the committee how the Star Supply
Co., the company of Mr. Welbourn and Mr. Sohacki, were able to
gain a monopoly in the Lake County area ?
Mr. GoGOLA. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Mr. Anderson, you were hired on December 1, 1955,
by the Sohacki-Welbourn to manage a new business venture of theirs;
is that right?
Mr. Anderson. Senator, I respectfully decline to answer under the
fifth amendment of the Constitution of the United States on the
ground that my answer may tend to incriminate me.
Mr. Kennedy. I appreciate the promotion, but it is "Mister"
Kennedy.
Was it at that time that the company of Mr. Sohacki and Mr.
Welbourn decided to go into the jukebox and arcade equipment field,
so they formed the H. & A. Novelty Co. ?
Mr. Anderson. Mr. Kennedy, I respectfully decline to answer on
the ground that my answer may tend to incriminate me.
Mr. Kennedy. Was it that time that you started to put the other
independent jukebox operators out of business?
Mr. Anderson. I respectfully decline to answer on the grounds
that my answer may tend to incriminate me.
Mr. Kennedy. You joined the union at that time, did you not, Mr.
Anderson ?
Mr. Anderson. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. Did you disclose to the union what your other con-
nections were?
Mr. Anderson. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
Mr. Kennedy. Did you have any conversations with Mr. Conroy
in connection with the raids which were to be made on any of the
locations ?
Mr. Anderson. I respectfully decline to answer on the grounds
that my answer may tend to incriminate me.
Mr. Kennedy. In the cash receipts records maintained by the Sun-
set Supply Co. and Star Supply Co., which were turned over to the
18560 IMPROPER ACTIVITIES IN THE LABOR FIELD
committee, the jukebox and arcade equipment collections wliich were
earmarked to you were, Sunset Supply Co., 1956, $30,000; Sunset
Supply Co., 1955, $155,000; the Star Supply Co., 1958, $208,000,
making a total of $394,000.
Is that figure correct?
Mr. Anderson. I respectfully decline to answer on the grounds
that my answer may tend to incriminate me.
Mr. Kennedy. That would be actually less than one-half of all
the machines brought it, would it not, Mr. Anderson ?
Mr. Anderson. I respectfully decline to answer on the grounds
that my answer may tend to incriminate me.
Mr. Kennedy. So that the machines that you were handling col-
lected at least $788,000; is that right?
Mr. Anderson. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. "Was there any other money collected on top of that,
which is called top money, which was kept and used for certain illegal
or improper purposes?
Mr. Anderson. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. When you Avere interviewed by Mr, Sinclair on No-
vember 13, 1958, did you state at that time you had joined the union,
local No. 1, for the purpose of "determining what was going on tliere
and gathering what information I could regarding the independent
operators of the area?"
Mr. Anderson. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. These three gentlemen, Mr. Chairman, are all em-
ployees of Mr. Sohacki and Mr. Welbourn in their operations.
That is all.
Senator Mundt. Have you any questions, Senator Capehart ?
Senator Capehart. No questions.
Senator Mundt. You may stejD aside.
Mr. IvENNEDY. Mr. Chainnan, the next witness will be Mr. Ver-
plank.
Senator Mundt. Please come forward.
You do solemnly swear that the testimony you are about to give
before this committee shall be the truth, the whole truth, and nothing
but the truth, so help you God ?
Mr. Verplank. I do.
TESTIMONY OF CORNELIUS VERPLANK, JR.
Senator Mundt. Tell the committee, please, your name, address,
and your present occupation.
Mr. Verplank. My name is Cornelius Verplank, Jr. My address
is 4424 Connecticut Street, Gary, Ind. My business is a mason con-
tractor.
Senator Mundt. I will explain for the benefit of the press and the
monitors that Mr. Verplank was called here because he is the head of
the Gary Crime Commission, and not because of the allegations of
involvement in these particular nefarious operations, but in the hopes
that he can throw some light on the situation in Gary in general.
That is correct, is it not ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18561
Mr. Verplank. That is correct.
Senator Mundt. Now, Mr. Counsel, you may proceed.
Mr. Kennedy. You spell your name V-e-r-p-l-a-n-k ; is that right?
Mr. Verplank. That is correct.
Mr. IvENNEDY. You liave been head of the Gary Crime Commission
since 1949 ; is that right ?
Mr. Verplank. No. I have been head of the crime commission since
1954.
Mr. Ivennedy. Since 1954. Were you with the crime commission
prior to that time ?
Mr. Verplank. Yes. The crime commission was organized in 1949
after the brutal slaying of the schoolteacher.
Mr. IvENNEDY. After the what?
Mr. Verplank. After the slaying of a schoolteacher in 1949. At
that time, they organized a group of women which they called the
WCC, or the Women's Citizens Committee. From this committee the
Gary Crime Commission was formed. The reason that the ladies
formed the crime commission was that they needed help from the men.
They found that they could not talk as well to some of these city of-
ficials themselves. It seemed it was easy for some of tlie officials to
give them the runaround. There was other work to be done that the
ladies couldn't do, so they organized the Gary Crime Commission.
Mr. I^NNEDY. Mr. Verplank, the situation was very difficult dur-
ing 1948-49 ; is that correct?
Mr. Verplank. It was.
Mr. Kennedy. I don't want to go into detail on it, but it was a very
serious situation?
Mr. Verplank. It was a very serious situation. There were an aw-
ful lot of murders, for one thing.
Mr. KJENNEDY. Is the situation much better at the present time as
far as this area is concerned ?
Mr. Verplank. If it is, I can't see it. There is no evidence that it
has bettered itself.
Mr. Kennedy. Have you made any complaints or requested Mr.
Holovachka's office to take any steps against what is going on in the
county ?
Mr. Verplank. Yes, I have. We had complained to Holovachka —
I say "we". At the start, when we first were talking to Holovachka,
I was not the chairman of the Gai-y Crime Commission. I was vice
chairman. The chairman at the time complained to him.
After I became chairman I talked to the mayor about the situation
in Gary, without any results, and also had talked to Holovachka, the
prosecuting attorney.
It amounted to this, the reply that I got : It was that we didn't know
what we were talking about, it is a bunch of lies. We were staging
a publicity stunt for the Republican Party. Incidentally, Senator, I
happen to be a registered Democrat.
But they made every effort to throw the picture as a Republican
stunt.
So after getting no results at all from any officials in Lake County,
I hired an investigator, and he went out, and in a 3-week period listed
64 places of prostitution, gambling, bookie joints, and the like.
18562 IMPROPER ACTIVITIES IN THE LABOR FIELD
I took this list and mailed it to the county prosecutor, Metro
Holovachka, to the mayor, Peter Mandich, to the chief of police, John
Foley.
After this came out in the paper, the first thing that was said from
any of the officials was no comment at the time.
Then later on the mayor said, "If Verplank wants to be mayor or
do anything about it, he has an opportunity to run for mayor at next
election,"
Of course, the chief of police couldn't do anything about it because
he has to take his orders directly from the mayor, Holovachka had
done nothing about it.
So I waited a period, I would say, of approximately 10 days. If
the Senator wants, I can give him the exact date.
Then accompanied by a newspaper photographer with a camera
equipped with a telescopic lens, and my investigator, I went into two
of these places that were running, I made bets on two different horses
in both places. My picture was never taken inside the place, but they
took it as I went into the place and as I came out,
(At this point Senator Curtis entered the hearing room,)
Mr. Verplank, We published these pictures in the newspaper, and
after that the places shut down. They were down, I would say, tight
for better than a week.
There was a little hip pocket betting going on. After that, it
opened up again and they have been running ever since.
(At tliis point Senator Capehart withdrew from the hearing
room.)
Senator Mundt, Let me ask you about the genesis of the Gary
Crime Commission, Is this a group of voluntary citizens getting to-
gether, or do you have some quasi-official status ?
Mr, Verplank. It is just a group of citizens. Senator. It is all
volunteer. It consists of some businessmen — I say some because it
hurts a man that is in business to belong to the crime commission be-
cause they can be atl'ected in various ways. We have some school-
teachers, housewives, and
Senator Mundt. Do you get any support at all for your work in
Gary from the church people, the churches, the PTA's, groups of re-
sponsible citizens rallying behind you ? Do they suggest to the mayor
and the prosecutor that they do something? Or are you just a few
voices crying in the wilderness in Gary ?
Mr. Verplank. Well, we have had a lot of support from the PTA's,
the church groups, but I will make this statement : We have had no
help at all from the chamber of commere. As a matter of fact, after
I made these attempts to clean up the situation — and, of course, pre-
vious to this another thing came up, which was the Barrett Bond
thing, which I think you are going into later on — I tried to have the
prosecutor disbarred,
Metro Holovachka made an attempt to have the chamber of com-
merce hold a trial to clear him. They did make a report on this
thing, and they did clear, or to the effect gave a clearance, to Metro
Holovachka.
Senator Mundt, Let me see if I get this right.
The chamber of commerce, despite the evidence that you have
been producing, and the fact that you reported it in the newspaper,
held some kind of trial or hearing, and concluded that the prosecu-
IMPROPER ACTIVITIES IN THE LABOR FIELD 18563
tor was doing his job satisfactorily and according to the way they
wanted to have it done; is that right? Is that what you are saying?
Mr. Yerplank. It amounts to that. I would have to dig out the
letters to read it to you verbatim. One point I wanted to bring out,
and I think this does bring it out, is the lack of support, and the fear
that is in the business people in Lake County, to tiy to better tilings
or make any attempt to do so.
Senator Mundt. The newspapers, I understand, did give you some
cooperation.
Mr. Verplank. They did.
Senator Mundt. But their advertisers did not look upon that with
much favor because they took the other side ?
Mr. Verplank. That is right.
Senator Mundt. AVliy do you suppose that is? That is unlike a
chamber of commerce, it seems to me.
It seems to me that a chamber of commerce wants a town to get
bigger and better. Apparently in Gary they want it to get bigger
but they don't care if it gets better. Why ?
]Mr. Verplank. There has been a remarkable change in the Gaiy
Crime Commission in the last number of years. They are beginning
to get on more solid gi'ound. I think eventually they will help attack
the situation.
But at that time, whether it had no bearing on the situation or
not you have to draw your own conclusions. The chairman of the
chamber of commerce at that time I understood was doing about
$80,000 worth of business a year with the city, and — well, that is the
end of the statement.
Mr. Kennedy. What is the reason that the citizens are not doing
more in connection with this ?
Mr. Verplank. Well, the main thing that they are not doing any-
more is where can you go to for help when you attack the problem
by going to the chief of police
Mr. Kennedy. You have also been to the Governor, have you?
Mr. Verplank. Yes.
Mr. Kennedy. So you have been to every area, every source of
government, locally the Lake County authorities, and the State au-
thorities, and there has been nothing done in the past 5 or 6 years ?
Mr. Verplank. Not a thing. I appealed to the Governor a num-
ber of times.
Mr. Kennedy. Haven't other citizens besides yourself done that?
Mr. Verplank. Yes.
Mr. Kennedy. Isn't that the problem, that people are getting so
discouraged and feel that nothings can be done because all of these
appeals have been made to the various government sources and noth-
ing has been done over this period of time ?
Mr. Verplank. That is correct.
Mr. Kennedy. As I understand it, even where a blatant violation
of the law is indicated, and perhaps the State authorities com,e in
through the State police and conduct a raid, and show that the man
is guilty, he is dismissed with just a small fine.
Mr. Verplank. That is right.
Mr. Kennedy. All of the law enforcement has to be conducted
through Metro Holovachka's office ; is that right ?
18564 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Verplank. Well, in some cases they take them before a JP
court.
Mr. Kennedy. The vast majority, certainly, of the cases, the major
cases, the more serious cases, have to be conducted through his office?
Mr. Verplank. That is right.
Mr. Kennedy. Is that the big problem, as far as the area is con-
cerned ?
Mr. Verplank. That is right. There is no one to appeal to. We
have tried, as you mentioned, all sources, to no avail.
Senator Mundt. Why do you suppose in a comparatively small city
like Gary, that the good people of the community, who would cer-
tainly outnumber the crooks and gamblers, haven't organized a reform,
movement and exercised the good American privilege at election time
to throw out these chiselers and put in decent citizens? That has
happened in other cities much larger than Gary, when the people have
become incensed.
Is there not any sense of moral virtue on the part of citizens gen-
erally that will reflect itself in the voting places by getting a mayor and
prosecutor who wanted to have a clean town and clean it up in that
way?
Mr. Verplank. Well, I believe I can give you some answer on that.
Gary is the biggest melting pot in the United States. I mean by
that you have every nationality represented that there is in the world.
It is one of the largest industrial centers in the United States. These
men that seem to be running things in the county have such a ma-
chine built up
Senator Mundt. A political machine ?
Mr. Verplank. Yes, a political m,achine. For instance, I will men-
tion the policy, how they can control votes through the policy racket,
which is the numbers deal. I don't know whether you gentlemen
know anything about the policy w^heels.
Mr. Kennedy. About the policy ?
Mr. Verplank. The policy wheels. They are used mostly in the
colored district by colored people where they can bet small sums.
You can bet a nickel.
Mr. Kennedy. Is that what we call the numbers racket ?
Mr. Verplank. Yes. It is the numbers racket. I had a couple of
tickets I was going to show you here, but probably it is not too im-
portant. But we have had as high as 200 what they term runners.
These are the men that go out and collect these dimes and nickels
and quarters from the people. There have been as high as 200 of them
that we can
Mr. Kennedy. Is that legal in Indiana ?
Mr. Verplank. No. But these men will go out and make all these
collections. These people like to play this game. They don't want
it stopped. They don't want to have it taken away. So with just
200 of these runners or pickup men, they probably cover — well, just
say in round figures that they had 50 customers.
Election time comes around and they can instruct the person how
to vote. They just tell them in plain words that, "If you want your
policy to go on, you vote for this candidate or this party." They
control it through different branches of the government by political
payroll.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18565
Mr. Kennedy. In other words, what you are telling us is that the
people of Gary know that they have a wicked town and it has wide
open gambling, the racketeers have taken control of it. They know
the answer is to vote the crooks out. But a majority of them, as
reflected in the polling places, like it as it is and dont want to change it.
Mr. Verplank. We have some polling places that are 100 percent
for the party that is in power now, and has been.
Mr. Kennedy. Before you go ahead, I have only spent a short time
there, but I would have to disagree, certainly, tliat the people of Gary,
Ind., want corruption in government. I don't think you can say that.
There are some individuals who have important positions of power
in Lake County who are corrupt or associated with gangsters or who
take bribes. But certainly the vast majority of the people are honest
people, law-abiding people, and they don't like this any more than
anybody in any other section of the country.
Senator Mundt, If that is true, I want to find out why they don't
throw the rascals out. Why don't they get rid of them?
Mr. Kennedy. I think that is the problem he outlined initially,
that a lot of these people have been trying to do something, have gone
to the State authorities, the local authorities, and city authorities, to
try to get something done. Nothing has been done.
Mr. Holovachka ran on a ticket that he was going to really clean
up Lake County, Ind., and then got into a position and it has been
very difficult to get him out. But I think it is unfair to the people
of Lake County and Gary, Ind., to picture that everybody there wants
conniption or is in favor of corruption or is corrupt.
Certainly that is not the situation. I have talked to enough people
of the leading citizens there to know that it is not the situation. Other-
wise we would not have gone into this investigation.
Senator Curtis. Mr. Chairman — perhaps you want to make an
answer, first.
Mr. Verplank. No, by my statement you probably thought that I
referred to all the citizens don't want to clean it up, but I am talking
probably in the sense of the word of the people that are controlling
the situation. We don't have a 100 percent vote turnout. That is
where the problem lies.
The people that could clean it up or straighten it out do not go down
to the polls and vote.
Senator Curtis. Would this be somewhat of a correct statement:
that a majority of the people do not approve of this gross wrongdoing,
but they have been frustrated in their political attempts by not as
effective an organization, and not as many people who had a direct
financial interest as the other side did, that would get out and win a
competitive election ? Is that true ?
Mr. Verplank. That is right.
Senator Curtis. How long has this crime commission existed ?
Mr. Verplank. Since 1949.
Senator Curtis. Have you appealed to several Governors that you
know of, personally?
Mr. Verplank. Yes. We appealed to Governor Schricker. He
was Governor at that time. Then Governor Craig succeeded him, and
at the present time we have a new Governor, Handley. At this time
we have not contacted Handley. We haven't talked to him.
36751— 59— pt. 53 10
18566 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. But you did talk to the other two you mentioned ?
Mr. Verplank. Definitely.
Senator Ctjrtis. Was their attitude that it was a local responsibility ?
What was the problem?
Mr. Verplank. Well, definitely it was a local problem, so far as
Schricker was concerned, and Craig. Craig made the statement that
we have a newspaper clipping on tliat he did not get enough support
down there in Lake County ; therefore, he wasn't — as a matter of fact,
he wasn't too much interested in Lake County.
Senator Curtis. But your problem, insofar as elections are con-
cerned, is you are faced with the fact not that probably you are out-
numbered, but that you face an experienced, hardhitting organization
that is well financed, already entrenched in many key positions, and
they can touch a ^reat many people who have something to gain by
keeping them in; is that correct?
Mr. Verplank. That is right. They have so much money to spend
that they can buy practically anything they want, as the hearings
probably have brought out so far and will bring out, I imagine, more
later on. The amount of money is tremendous.
Senator Curtis. That is all, Mr. Chairman.
Senator Mundt. Further questions, Mr. Counsel ?
Mr. Kennedy. That is all.
Senator Mundt. Mr. Verplank, thank you very much for your
testimony.
As I would sum it up, it would seem to me what you are telling
us is that the good people outnumber the evil people in Gary, Ind. ;
that there is a desire to clean it up, but some way or other the good
people have not devoted themselves to the problems of organization
and politics and campaigning so that they can reflect this majority
viewpoint by throwing the rascals out. Is that a fair summation ?
Mr. Verplank. Yes. Senator, there is one more thing. I would
like to have it in the record, and I didn't bring this out before. I want
you to know that my life has been threatened at one time there. That
was after I went out with the photographer and took pictures of these
places and had them put in the newspaper; and also the fact that
through my wife they threatened the children, and also through me
I have had some threats to my family.
It is not a laughing matter as far as I am concerned. They tried
to buy the Gary Crime Commission at one time. As a matter of fact,
they tried to buy the microphone speech before it was published.
They found out they couldn't. So they never make any attempt to
buy us, but they do by threats.
Senator Mundt. You and your associates deserve a lot of com-
mendation by the people of Gary, you who are trying to clean it up.
It is no bed of roses to try and fight entrenched crime. But I am
certainly happy that the newspapers have given you full cooperation
out there.
Sooner or later you are going to develop the capacity in organiza-
tion and political affairs, I would think, so that you would be as well
organized as the opposition, and then the majority wanting to clean
it up can bring about the desires that they have. Thank you.
Mr. Kennedy. Mr. Chairman, we have a witness who has requested
to testify. His name is Mr. Michael Kampo.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18567
Senator Mundt. Raise your right hand and be sworn.
Do you solemnly swear that the testimony you are about to give this
committee will be the truth, the whole truth, and nothing but the
truth, so help you God ?
Mr. Kampo. I do.
TESTIMONY OF MICHAEL J. KAMPO, JR.
Senator Mundt. Tell us your name, your place of residence, your
business or occupation, and your interest in the hearings which are
now before us.
Mr. Kampo. Michael Kampo, Jr., 709 West 119th Street, Whiting,
Ind. I am a furniture dealer and investigator on the staff of the
Lake County prosecutor.
Senator Mundt. iVnd you are testifying because you want to, you
are volunteering ; is that right ?
Mr. Kampo. Well, sir, 1 received a subpena. I also received a wire
telling me to appear here. This morning, while I was waiting, I ran
into Mr. Dick Sinclair, and I told him about a telephone call I made
last night to my home, that he wanted to talk to me. I asked him there
what he wanted to talk to me about, and he said he wanted me to bring
some more evidence.
Later on, I went into the office and Mr. Sinclair told me that I didn't
have to testify. I told him that it was unfair because I have gotten
some bad i^ublicity back home in Hammond. I thought it was
Senator Mundt. Hammond or Whiting ?
Mr. Kampo. Hammond. You see, I live in Hammond, but the post
office is Whiting. I live in the far north, called Robertsdale.
Senator Mundt. Your furniture store is Hammond?
Mr. Kampo. Yes, sir, and my residence is also Hammond but the
post office is Whiting.
Then Mr. Duffy came in and said that, "Well, you don't have to
testify," and I said, "LaVern, I sincerely want to because I have to
clear some matters up." By innuendo, the newspapers have said
some nasty things about me.
Senator Mundt. Has your name been brought into the hearings ?
Mr, Kampo. My name has appeared ; yes.
Senator Mundt. By other witnesses ?
Mr. Kampo. I don't recall.
Senator Mundt. Well, go ahead.
Mr. Kampo. Consequently, I checked in with the lady downstairs
and came back upstairs. The young fellow, one of the investigators — I
think his name is Thiede — from Park Forest, he came to see me and
told me Mr. Kennedy wanted to see me.
I went down in the office and Mr. Kennedy, by his own admission,
told me that I had nothing to do with pinballs in Lake County, and
that I didn't have to testify.
Mr. Kennedy. What did I say at the beginning to you, Mr. Kampo ?
If you want to go through the whole conversation what did I say at
the beginning?
Mr. Kampo. Well, you told me that I didn't have to testify unless I
wanted to.
Mr. Kennedy. Didn't I say at the beginning that as far as we were
concerned, we would be glad to hear your testimony ; as far as your
18568 IMPROPER ACTIVITIES IN THE LABOR FIELD
appearing under subpena or as far as it being necessary for you to
testify, that it wasn't necessary, but that we would be glad to hear you?
Mr. Kampo, Yes, sir.
Mr. Kennedy. All right.
Mr. IvAMPO. And I told you it was important for my family and
myself to appear here as a witness.
Senator Mundt. All right ; here you are. Go ahead.
Mr. Kampo. Are there any questions ?
Mr. Kennedy. You wanted to come. Tell what you have to say.
Mr. Kampo. I have a prepared statement to make, which I think is
important to myself, my family, and the Senate committee.
Senator Mundt. Under the rules of the committee, if you have a
prepared statement it has to be submitted 24 hours in advance. But
we will give you a chance to visit with us a while and talk to you. I
am not sure about a prepared statement, because I don't know what
is in it.
Mr. Kampo. Senator, I think it is very, very important that when
an individual such as myself is interrogated by the Senate investi-
gators, and they will tell you themselves that they came into my
place of business, I gave them my time, I cooperated with both Mr.
Sinclair and Mr. Duffy to the extent that any question they asked
I answered — by Mr. Kennedy's statements in the newspapers — may I
read one, please ?
Senator Mundt. Yes.
Mr. ICampo. This headline in Tuesday's paper, the Hammond Times,
the hometown that I live in, says :
Probers Try To Link Metro's Aids, Mob.
I read this to Mr. Kennedy this morning in his office.
Senator Mundt. Is your name in that headline ?
Mr. Kampo. No, sir ; but I am an aid.
Senator Mundt. You are what ?
Mr. Kampo. I am an aid as far as an investigator is concerned. I
assume that when he says Metro's aids, that I am one of those people.
I am an investigator on the staff.
Senator Mundt. Are you mentioned in the article any place ?
Mr. KA7\rpo. Let me read it to you, sir.
Senator Mundt. Go right ahead.
Mr. Kampo (reading) :
Committee Counsel Robert F. Kennedy said that six witnesses were scheduled
to be called in today's opening session, four would describe how aids of Holo-
vachka used threats and force to kill off an independent coin machine operators'
union and to prevent a Valparaiso machine distributor from continuing business.
Sir, I am one of those aids. I have worked for Mr. Holovachka.
Senator Mundt. Now answer my question. Is your name men-
tioned in the article ?
Mr. Kampo. No, sir.
Senator Mundt. It is quite possible, you see, that this man in ques-
tion could have six aids.
Mr. Kampo. There are only four investigators, sir.
Senator Mundt. Four aids? How many aids?
Mr. Kampo. He has 22 that I know of.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18569
Senator Mundt. All right. Out of 22 he might have 15 that were
bad and 7 that were good, or 7 that were bad and 15 good. So unless
your name was mentioned, you are not really involved.
Mr. Kampo. Senator, one of the things that
Senator Mundt. Let me ask you this: Are you in a position to
testify under oath that none of those aids are corrupt?
Mr. IC^MPO. I am not saying that.
Senator Mundt. You can just testify for yourself; is that right?
Mr. Kampo. Yes, sir.
Senator Mundt. You can testify, if you want to, that you are not
corrupt and you haven't done anything, but there is nothing wrong
"with that headline unless you can testify under oath that not more
than one of his aids are corrupt.
Mr. Kampo. Senator, here is another headline in my hometown,
telling the entire story of all these mobsters and racketeers out of
Chicago. It says here :
Kampo Also Gets Summons, Scheduled To Testify Thursday.
This came to the Hammond Times from Mr. Kennedy's office. I
talked to the reporter. He is a friend of mine.
Senator Mundt. Your name is mentioned ?
Mr. Kampo, Yes, sir.
Mr. Kennedy. Could I see what it says ?
Mr. Kampo. I will be glad to give it to you, Mr. Kennedy.
Senator Mundt. While counsel is looking at that, Mr. Kampo, do
you know Steven D. Sohacki ?
Mr. Kampo. No, I don't.
Senator jNIundt. Have you ever met him ?
Mr, Kampo, No, sir; just this morning up here as a witness.
Senator Mundt. Do you know Mr. George W. Welbourn ?
Mr. Ivampo. No, sir; I never saw him before in my life until he
took the witness stand.
Senator Mundt. Do you know Mr. Anderson who testified today ?
Mr. Kampo. No, sir ; 1 never saw him.
Senator Mundt. About the man who goes around masquerading?
Mr. Kampo. I never saw that man in my life until this morning.
Senator Mundt. Mr. Gogola ?
Mr. Kampo. I never saw that man in my life.
Senator Mundt, Ilave you ever heard of the Indiana Supply Co. ?
Mr, Kampo. Never heard of that until this morning.
Senator Mundt. Or the Star Supply Co. ?
Mr. Kampo. No, sir.
Senator Mundt. Are you a lawyer ?
Mr. ILvmpo. No, sir.
Senator Mundt. Tell me how a furniture man gets to be an aid of
a j^rosecutor. Are you an investigator ?
Mr, Kampo. Yes, I am an investigator. It is a political patron-
age job.
Senator Mundt. Have you had any experience, maybe in the Army
or someplace in your younger days, as being an investigator?
Mr. Kampo. No, sir.
Senator Mundt. It is a new venture ?
Mr, Kampo. I have been on the job for 6 years.
18570 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. I mean, your whole experience as an investigator
came on this job?
Mr. Kampo. Yes, sir. May I state one thing. Senator ?
Senator Mundt. Go ahead.
Mr. Kampo. One thing — my mother and dad are dead. They left
me with one thing, a good name. I don't want anybody to take it
away from me. It is just like in 1941, when the Japanese and German
countries tried to do something to the United States of America. We
fought back.
By Mr. Kennedy, Mr. Duffy, and Mr. Sinclair's admission this
morning, they said, "Mike Kampo has nothing to do with the pinballs
or rackets," but yet by innuendo in the hometown where I live, where
my family lives with me, where I have a business — and I think this is
important to the committee — I don't think any human being should
be sacrificed, even by innuendo, to prove a point.
That is why I asked to testify. There is no other reason. I am
clean. I have never done anything wrong ; never.
Senator Curtis. Mr. Chairman
Senator Mundt. May I say first of all that this committee has fol-
lowed the practice for a long time where if somebody's name is men-
tioned in a hearing and he wants to testify and answer questions and
clear himself, that is his privilege. That is his right, and we are
extending you that right today.
Mr. Kampo. Sir, I did not want to testify. When Mr. Sinclair
came to me, I told him everything I knew. He called me on the tele-
phone. He suggested that I write Senator McClellan a letter. I
have the letter right here, telling him that as far as I was concerned, to
bring me down here was a waste of taxpayers' money. I never got an
answer until today, when Mr. Sinclair told me that I needn't appear
as a witness.
That is the confusing part. Why was I called here as a witness,
and when I do get here they tell me I don't have to testify ?
Senator Mundt. Counsel tells me, Mr. Kampo, he can explain that
to you.
Mr. Kampo. All right.
Mr. Kennedy. Mr. Kampo, your name came into the hearings yes-
terday in connection with the testimony of Mr. Goot. Mr. Goot testi-
fied that he had been an independent pinball operator, that he got into
difficulty with Mr. Holovachka, and that three of his locations were
raided, and ultimately that he had to turn the operation over to the
Sohacki-Welbourn group.
He then went on that in 1958 a gentleman who was about 5 feet 11
inches, weighing over 200 pounds, came in to buy six cans of beer,
that he was sent in by you so that Mr. Holovachka could make an
arrest of him for selling beer to a minor.
He said he ultimately was convicted of that and he had to pay a $1
fine. You were being called on the ground that we wanted to find out
who instructed you to hire this minor to go into Mr. Goot's tavern to
make the purchase. That is why you were being called. Will you
relate that to the committee ?
As we were moving along in the testimony, Mr. Chairman, we did
not feel it was that vital. "We tried to get hold of Mr. Kampo last
night to tell him that it wasn't necessary to come. We had had the
testimony. He is here today and he can testify about it.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18571
We are glad to have you.
Mr. Kampo. Mr. Kennedy
Mr. Kennedy. Answer the question that I would have asked you.
Mr. Kampo. Let me make this point, the point that the damage is
done at home. I have to make a living there in the furniture store
where tlie average public walks in.
Mr. Kennedy. I have no apology for your being subpenaed before
this committee. You were subpenaed before this committee to testify
regarding your sending the gentleman in, the boy.
Mr. Kampo. I will give you the answer as I did this morning.
Mr. Kennedy. Who told you to get the boy and go in there and make
the purchase ?
Mr. Kampo. I was called in by Mr. Holovachka.
Mr. Kennedy. All right. That is of some importance to us, Mr.
Chairman.
Mr, Kampo. Mr. Holovachka called me in and told me that he had
gotten some complaints on a tavern in Hammond. He asked me if I
could get a youngster and send him in to the tavern and purchase some
liquor or some beer. I told him I would.
I went back home. There was a neighbor across the street that has
two boys. I went in and I saw the father and I explained to the father
that the prosecutor had asked me to get a youngster to go in the tavern.
He had told me that at the plant there has been some discussion, that
youngsters have been buying liquor and getting drunk, getting in acci-
dents.
He said he would be glad to have his son participate. I took the boy,
he had his car, and he followed me. We parked on the side of the tavern
and I told this youngster to go in and buy a can of six-pack beer, which
he did.
He went in, came out, I went back into the tavern and I told Mr. Goot
that he had just sold a pack of six beers to a youngster, and that I would
like to have the number of his license. He took me in the back room
and asked me what this was, was it political ? He said, "I know that
I am not supporting Vance, that I am for Roberto, but that is my privi-
lege."
I said, "Goot, I have nothing to say, only that you must give me your
license number," which I took. I thanked him, walked out. The next
day I gave the beer, all the information, to Mr. Holovachka, and later
Mr. Goot was brought to trial and he was tried by 12 people, a jury,
and they convicted him ; I did not.
Senator Mundt. All right, Mr. Kampo. That will at least explain
why you are here. I couldn't understand it before, either. But for
your information, part of the evidence which is coming before this
committee indicates that Mr. Holovachka told you to have this young-
ster buy the beer, and part of the evidence being built before this com-
mittee is that Holovachka has been following a pattern of arresting
pinball operators who do not belong to the Sohacki-Welbourn syndi-
cate.
This in itself is no indication that you would know whether there
is any basis for that allegation or not. This is simply a piece of
evidence in that direction. It does not involve you any further than
what you did, and what you did in itself was a perfectly proper thing,
provided you knew of no ulterior motive that Mr. Holovachka might
have had.
18572 IMPROPER ACTIVITIES IN THE LABOR FIELD
But it certainly does explain why you should be called in because
you now verify what the witness told us.
Mr. Kampo. But it is a very confusing thing.
Mr. Kennedy. I have some more questions for you.
Mr. Kampo. Yes, sir ; I will be glad to answer them.
Mr. Kennedy. Mr. Kampo, how long have you worked for Mr.
Holovachka ?
Mr. Kampo. Six years.
Mr. Kennedy. You have been assistant to him for 6 years ?
Mr. Kampo. Yes, sir ; an investigator.
Mr. Kenni^dy. Have you ever arrested any pinball operator?
Mr. Kampo. No, sir.
Mr. Kennedy. Have you ever gone into any location where there
are these pinballs operating ?
Mr. Kampo. Never, sir. Never.
Mr. Kennedy. Have you ever been instructed by Mr. Holovachka
to go in and make an investigation or an arrest in connection with
the gambling that is going on?
Mr. Kampo. No, sir.
Mr. Kennedy. Have you ever arrested any bookies ?
Mr. Kampo. No, sir.
Mr. Kennedy. Have you ever arrested anybody in connection with
the house of prostitution that is operating in Lake Coimty ?
Mr. Kampo. Yes, sir.
Mr. Kennedy. Wlien did you do that ?
Mr. Kampo. Over a period of 6 years there is at least
Mr. Kennedy. I am talking specifically about the M. & J. Motel.
Did you ever make an arrest out at John Formusa's place ?
Mr. Kampo. I don't know who John Formusa is.
Mr. Kennedy. Did you ever make an arrest at the M. & J. Motel ?
Mr. Kampo. Two years ago.
Mr. Kennedy. Two years ago ?
Mr. Kampo. Yes, sir.
Mr. Kennedy. Did you arrest anybody in connection with the
ownership of that motel ?
Mr. Kampo. The only thing I know is that the sherijff was with
us, the chief investigator was with us, he made the arrest and took
the two women to Crown Point.
Mr. Kennedy. Was there ever an arrest made of John Formusa
in connection with the operation of that motel ?
Mr. Kampo. How can I answer that question when I don't know
Mr. Formusa.
Mr. Kennedy. Did you ever find out who ran the motel ?
Mr. Kampo. No, sir.
Mr. Kennedy. We were able to find out in 2 weeks when we were
there. I am trying to find out if you performed and met your
responsibilities.
Mr. Kampo. I certainly did. I was there when I was told to be
there. The arrest was made. Mr. Conroy and the sheriff's depart-
ment went on to Crown Point and I was sent home.
Mr. Kennedy. But you never made any arrest in connection with
the pinball operations?
Mr. Kampo. Never.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18573
Mr. Kennedy. You never made an arrest in connection with the
bookies' operations?
Mr. Kampo. No, sir.
Mr, Kennedy. Tell me this: Isn't there a bookie operation right
next door to your place of business?
Mr. Kampo. Yes, sir. It has been there for years.
Mr. Kennedy. Have you made an arrest there?
Mr. Kampo. No, sir.
Mr. Kennedy. That is all.
Senator Curtis. Have you ever made a report of that to the prose-
cutor?
jNIr. Kampo. No, sir.
Senator Mundt. Let me find this out : As I imderstand your func-
tion, you don't make any arrest or investigation on your own; you
simply carry out the orders of Mr. Holovachka.
]NIr. Kampo. Yes, sir ; at the direction of the office.
Senator Mundt. So if Mr, Holovachka is a good, conscientious
public servant, then you are rendering a good public service. If, per-
chance, Mr. Holovachka is involved with a group of pinball operators
or crooks, it is conceivable that you might be following out his orders
and rendering a service which is detrimental to the public, is that
right, because you just follow his orders ?
Mr. Kampo. Yes, sir ; that is the law of the investigator. He fol-
lows instructions of the office.
Senator Mundt. If there are any assumptions as far as you are
concerned, you could be an appropriately fine, upstanding furniture
dealer
Mr. Kampo, Which I am.
Senator Mundt. I don't doubt that. But I want to point out to
you that since all you do is carry out his orders, you could render a
helpful public service or an injurious one, depending upon what
motivates his orders ; is that correct ?
Mr. Kampo. That is correct.
May I say one thing? Mr. Kennedy just dropped a note where I
heard some of these gentlemen operating on the side, that my furni-
ture business is next door to a bookie establishment. I had as much
control of that bookie establishment being there, as much as he could
stop a mobster from living next door to him or having a call girl
service office go next door to him.
Mr. Kennedy. You don't have any jurisdiction to make an arrest?
Mr. IvAMPO. The law is that I move under the direction of the
prosecutor.
]\Ir. Kennedy. Did you talk it over with the prosecutor ?
Mr. IvAMPO. I have never talked to the prosecutor, sir.
Mr. Kennedy. Don't you think it is incredible that here is an open
violation of law right next door to you and you have never made an
arrest and the public prosecutor has never made an arrest ?
Mr. Kampo. I think Victor Riesel said that there wouldn't be a
bookie existing in America today if the mayor and chief of police in
any city in any part of the States in this United States of America
wanted them closed down.
There are 150 policemen in my hometown, I am but one investi-
gator, and I move at the insistence of the office.
18574 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. All right, and. it is right next door to you. It is
still operating.
Mr. Kampo. And it probably will. I don't know. I can move out
of there. I beg your pardon. I want to change that.
The bookie establishment moved away, and Mr. Sinclair knows
that because that is one of the questions he asked me, moved away
about 6 or 8 months ago. Let me tell you, on that building was a big
sign where it moved to, and he asked me the question do I know where
it was?
I would have to be blind, Mr. Kennedy, not to see a 4-by-8 sign
telling where the bookie establishment moved to.
Mr. Kennedy. If we ever wanted proof of what the situation is in
Lake County, you have given it to us, Mr. Kampo. I appreciate your
testimony.
Mr. Kampo. It is the police department's job and the mayor's job
in my hometown. Sir, I beg your
Senator Mundt. Doesn't the county prosecutor have any responsi-
bility in this ?
Mr. Kampo. Senator, I would like to tell you this: that I have
been
Senator Mundt. Answer my question, first.
Mr. Kampo. What was the question ?
Senator Mundt. Doesn't the county prosecutor have any responsi-
bility in cleaning up these places ?
Mr. Kampo. I assume he does ; yes, he does.
Senator Mundt. Doesn't he have the right to order you to go in
and investigate it ?
Mr. Kampo. From what I understand, it is that if there are any
complaints, he will absolutely do something about it.
Senator Mundt. He has the right to order you to make an investi-
gation ?
Mr. Kampo. Yes, sir.
Senator Mundt. But you don't have the authority to go snooping
around on your own and report back ?
Mr. Kampo. Absolutely right. By law. It is in the Burns' statutes.
Senator Mundt. So when we are working on Mr. Holovachka, we
are working on the man who has some responsibility.
Senator Curtis ?
Senator Curtis. Wliat is the official title that you hold ?
Mr. Kampo. Investigator.
Senator Curtis. Did you receive some credentials ?
Mr. Kampo. Yes, sir.
Senator Curtis. Do you have them with you ?
Mr. Kampo. Let me look. I may have them in my bag at the
hotel. I think I have a card.
Yes, sir.
Senator Curtis. May I see it ?
Mr. Campo. Yes.
Senator Mundt. While he is examining the card, Mr. Kampo, will
you tell us on what basis you are paid? Are you paid by tlie jobs
you do, or are you paid so much a year, so much a month, or what?
Mr. Kampo. The investigator's salary is set by the Indiana statutes
at $5,000 per year.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18575
Senator Mundt. You get $5,000 a year?
Mr. Kampo. Yes, sir.
Senator Mundt. How much time do you devote to the job?
Mr. Kampo. Any time that the chief investigator or the chief
deputy or the prosecutor called me, I was there. I would say that I
would spend at least, it would average out, three 8-hour days in a
week.
Senator Mundt. Do you work out of your furniture store or out
of the prosecutor's office?
Mr. Kampo. I work out of the prosecutor's office and my store.
If I am called at the store or at my home, I will appear when they
tell me to.
Senator Mundt. It is something like a volunteer fire department
out in South Dakota.
Mr. Kampo. Very similar, but you get $5,000 for it.
Senator Mundt. But you are subject to call.
Mr. Kampo. Yes, sir; at any hour, any time during the day or
night.
Senator INIundt. If they don't call you during the year, you still get
your $5,000 and you have fulfilled your duties, but if they call you
every day of the week you go.
Mr. Kampo. Yes, sir.
Senator Curtis. This says :
This is to certify that Michael J. Kampo is a member of the staff of the
prosecuting attorney, 31st judicial district, Lake County, Ind.
Witness my hand and seal, 1959,
Lloyd C. Vance,
Prosecuting Attorney,
Lake County, Ind.
Mr. Kampo. Mr. Vance took office January 1, 1959, sir.
Senator Curtis. He is the successor to Holovachka ?
Mr. Kampo. Yes, sir.
Senator Curtis. Do you have any other credentials ?
Mr. Kampo. I have a badge. I carry a badge with me, sir.
Senator Curtis. And a badge ?
Mr. Kampo. Yes, sir ; and that is all.
Senator Curtis. But do you have any other document that de-
scribes what your duties are ?
Mr. Kampo. I have a copy here of Burns' statutes.
Senator Curtis. Of what ?
Mr, Ka.mpo. Of Burns' statutes, the laws that were enacted in the
legislature at Indianapolis.
Senator Curtis. May I see that ?
Mr. Kampo. Surely.
Senator Mundt. Does the law provide that you operate only at the
direction of the prosecuting attorney, or is that arrangement worked
out by the prosecuting attorney ?
Mr. Kampo. Well, it has been arranged by the prosecuting attorney,
but it specifically says in the item there that the Senator is now reading.
It is the law in Indiana.
Senator Mundt. The law says that you cannot make investigations
on your own ?
18576 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kampo. I beg your pardon. It says at the direction of the
prosecuting attorney, that investigator will obtain evidence and data
pertaining to the successful prosecution of any criminal case.
Senator Mundt. What does the prosecuting attorney tell you in
his directives ? Does he tell you that you are only to operate "under
orders from me" on specific cases, or does he tell you to "go out and get
whatever evidence you can get and bring it in and let me sift it ?"
Mr. Kampo. Everything I have been doing I have been told to, in-
terrogating witnesses of abortion cases, going out to carnivals where
the people in neighborhoods have complained about them, prostitu-
tion, many things like that.
Senator Curtis. You say you probably work about 3 days a week ?
Mr. Kampo. I would say basing it on 8 hours, three 8-hour days
a week.
Senator Curtis. What cases did you investigate in May 1959 ?
Mr. Kampo. May in 1959 ?
Senator Curtis. That is this year.
Senator Mundt. Last month.
Mr. Kampo. That is just a month ago.
Senator Curtis. Yes. This is the 4th day of June.
Mr. Kampo. I was told to go out into the Black Oak area at 25th
and Colfax, that there was a house of prostitution going on.
Senator Curtis. Who told you that ?
Mr. Kampo. Mr. Conroy.
Senator Curtis. Mister who ?
Mr. Kampo. Conroy.
Senator Curtis. What is his title ?
Mr. Kampo. Chief investigator. Mr. Holovachka did not direct
me.
Senator Mundt. Mr. Holovachka is out of it now, isn't he ?
Mr. K14MP0. No; Mr. Conroy, the chief investigator, I take my
orders from him also.
Senator Mundt, When did Holovachka go out of office ?
Mr. Kampo. December 31, 1958. I beg your pardon. Yes, Decem-
ber 31, 1958.
Senator Mundt. Is he still in the prosecutor's office ?
Mr. Kampo. No. He is chief deputy.
Senator Mundt. To Mr. Vance ?
Mr. Kampo. Yes, sir.
Senator Mundt. So he is still there and can still give you orders ?
Mr. Kampo. Any member of the staff can give me orders, sir.
Senator Curtis. You were talking about this one investigation.
What happened ?
Mr. Kampo. We were out there at night and it was all dark, and we
sat in the car for a while. A car drove up with a couple of kids in it
and we asked them some questions and asked them what they were
doing there. They told us. I guess they were frightened by us
showing our badges. We just told them that there is no such place;
it is closed up. They left. We stayed there another hour, but that
was the only car that came in. I went on home.
Senator Curtis. "Wliat else did you investigate in May ?
Mr. Kampo. That was about the extent of the work that we had.
Senator Curtis. Wliat did you do in April ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18577
Mr. Kampo. In April we had gone out on a case pertaining to the
sale to a youngster. A lady from the St. Jolm PTA, a school locally,
said that she was under suspicion that there were some liquor and beer
sold to some youngsters. The place is just a block away from my
home. So I sat out in a car from 10 to 11 :30 and I saw no youngsters
walking in the place.
Senator Curtis. That complaint came from whom ?
Mr. IvAMPO. A lady that belongs to St. John PTA.
Senator Curtis. Did you clear that with the prosecutor's office?
Mr. Kampo. I called Mr. Conroy and he just told me to sit and
watch them, and if there is anything developed to call him back and let
him know and he would get in touch with Mr. Floyd Vance.
Senator Curtis. Have you ever completed an investigation or made
any arrest without specific directions?
Mr. Kampo. Never, sir; never.
Senator Curtis. You have been near where offenses have been com-
mitted ?
Mr. K!ampo. Such as the one I just mentioned.
Senator Curtis. Why haven't you volunteered any services or made
any arrests or completed any investigations and turned the informa-
tion over to your superiors ?
Mr. Kampo. Because, sir, as I said before, that I take orders from
the prosecutor, the chief deputy prosecutor, or the chief investigator,
or any other prosecuting attorney that is a deputy, if they will so
want me to.
Senator Curtis. But you don't assume any responsibility yourself?
Mr. Kampo. No, sir.
Senator Curtis. This statute that you handed me says that,
Any such investigator so appointed shall give bond in the sum of $5,000.
You have done that, have you ?
Mr. Kampo. Yes, sir.
Senator Curtis (reading) :
* * * and shall have and possess the same police powers within the county
authorized by law to all police oflBcers.
That is the power you have.
Mr. Kampo. Well, I have never used it. I have used it only at the
discretion of the office.
Senator Curtis. I see. It is power put under wraps.
Mr. Kampo. There must be 150 policemen in Hammond, sir, that
passed this bookie joint that Mr. Kennedy talked about. They do
nothing about it either, and they have as much power as I have.
Senator Curtis. That is right. It says equal power. It says
shall have and possess the same police powers within the county authorized by
law to all police oflBcers.
They have the power there, but is it true that everybody is imder
wraps and won't move unless directed ?
Mr. Kampo. I don't know. I would only move when I was told to.
That was the understanding I had when I took the job, from my
superiors.
Senator Mundt. Who told you that that was the limitation put
on 3^ou ?
18578 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kampo. I just took it for granted, sir, that that is when I move.
Senator Mundt. You must have read the statute. You brought it
along with you.
Mr. K^MPO. Yes, I did.
Senator Mundt. Wliat do you think tliat meant, when it says that
you had the power to make arrests ?
Mr. E^MPO. Let me tell you, I didn't read it completely through.
Senator Mundt. If you are going to submit documents, you should
read them first.
Senator Curtis. Somebody underlined a part for you, but they
should have underlined that. You underlined
who shall work under the direction of the prosecuting attorney, whose duties
shall be to conduct such investigations and assist in the conducting and assem-
bling of such evidence as in the judgment of the prosecuting attorney may be
necessary for the successful prosecution of the criminal offenders of the county.
It is true that it put you under the direction of your superiors, but
it also gives you the authority of all police officers. I just wonder if
a situation exists there where the taxpayers pay police officers, but
not for protection prescribed by law, but for such protection as they
are told to extend. Is that what it amounts to ?
Mr. Kampo. Well, sir, as I said previously, I always took orders
from the office, from my superiors. That is exactly what I did. I
thought it was the right thing to do.
It is just like I mentioned to Mr. Kennedy, that he has his investi-
gators and he orders them to do whatever he deems necessary and
they do it. I don't think they question him.
Senator Curtis. Do you know these bookies that were next door
to you ?
Mr. Kampo. I have had this business of mine there for 10 years. I
understand the bookie place was in the same location for 15 years.
Senator Curtis. Did you know the man ?
Mr. Kampo. He has been in my store. He has been a customer.
My salesmen have sold him. I sold him a television set at one time.
Senator Curtis. Did your place of business ever sell him anything
for his place of business ?
Mr. Kampo. No, sir ; not that I know of.
Senator Curtis. Were you ever in there ?
Mr. Kampo. Never.
Senator Curtis. Do you know anybody connected with the num-
bers racket ?
Mr. Kampo. No, sir. I don't even know what the numbers racket
is about.
Senator Curtis. Are you qualified to hold your job ?
Mr. IvAMPO. I think so. I am a college graduate, a former school
teacher, a businessman. I think there is some qualifications.
Senator Curtis. How many of the police officers that possess the
same power that you do do not know what the numbers racket is
about ?
Mr. Kampo. Well, sir, to my knowledge there is no such thing in
Hammond, Ind., where I live. I would swear to that, absolutely.
Senator Curtis. Any such thing in Lake County ?
Mr. Kampo. I have heard, but I don't know. I positively don't
know for sure.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18579
Senator Curtis. Did you know that your authority extends to all
of Lake County ?
Mr. Kampo. Yes, sir.
Senator Curtis. Do you know any of these people that Mr. Ver-
plank described as some 200 runners for the numbers racket?
Mr. Kampo. No, sir.
Senator Curtis. Mr. Chairman, this copy should be returned to
the witness, but I would ask that a copy be made and be incorporated
into the record at this point. It is not long.
Senator Mundt. Without objection, it will be printed in the rec-
ord at this point, and the original returned to the witness.
(The document referred to follow^s :)
49-2514. Investigators in certain counties — appointment — duties — bond —
compensation.
The prosecuting attorney of any county of this state having a population of
eighty-five thousand (85,000) or more according to the last preceding United
States Census, is hereby authorized to appoint one (1) or more investigators
with the approval of the county council, who shall work under the direction of
the prosecuting attorney and whose duties shall be to conduct such investiga-
tions and assist in the collecting and assembling of such evidence as, in the
judgment of the prosecuting attorney, may be necessary for the successful pros-
ecution of any of the criminal offenders of the county.
Any such investigator so appointed shall give bond in the sum of five thou-
sand dollars ($5,000.00) and shall have and possess the same police powers
within the county authorized by law to all police ofiicers.
In each county having a population of more than ninety-five thousand (95,000)
according to the last preceding United States census, the salary or other com-
pensation to be paid each such investigator shall not exceed the sum of six thou-
sand dollars ($6,000) in any one (1) year, and in each county having a popula-
tion of less than ninety-five thousand (95,000) but more than eighty-five thou-
sand (85,000) according to the last preceding United States census, it shall not
exceed the sum of three thousand dollars ($3,000) in any one (1) year:
Provided, That in counties having a population of not less than three hundred
thousand (300,000) nor more than four hundred thousand (400,000) according
to the last preceding United States census and in which coimties are located
three (3) or more cities in the second class, and which county comprises in it-
self a judicial circuit, the prosecuting attorney thereof is hereby authorized
to appoint, without the approval of the county council, not to exceed four (4)
such investigators, and said prosecuting attorney shall fix the amount of salary
to be paid such investigators which salary shall not exceed the sum of five thou-
sand dollars ($5,000.00) per year for each investigator ; and
Provided further. That within thirty (30) days after the passage of this act
and upon application therefor made by the prosecuting attorney of said last
described judicial circuit, the county council of said county shall meet and ap-
propriate as an emergency additional appropriation for the year 1951, the amount
requested by said prosecuting attorney for such investigators.
Senator Curtis. This is a section out of Indiana law ?
Mr. Kampo. Yes, sir.
Senator Curtis. Who prepared it for you ?
Mr. Kampo. A friend of mine.
Senator Curtis. Who was it ?
Mr. Kampo. Mr. Singer.
Senator Curtis. Who is Mr. Singer ?
Mr. Kampo. He is a friend of mine who is a pretty good writer.
And he is also on the Alcoholic Beverage Commission.
Senator Curtis. And you have no doubt that this is the correct law ?
Mr. Kampo. Yes, sir. It is the correct law.
Senator Curtis. They wall see that you get that back.
Senator Mundt. Would you assume that the other 21 investiga-
tors
18580 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kampo. I didn't say 21 investigators. There is a staff of 22.
Senator Mundt. How many investigators ?
Mr. Kampo. Four investigators.
Senator Mundt. Four?
Mr. Kampo. Yes, sir.
Senator Mundt. The other three, then, operate on the same basis
as you do, only under direction ?
Mr. Kampo. I assume so ; yes, sir.
Senator Mundt. So that law enforcement in Lake County, Ind., is
good or bad, depending not upon what the investigators do, but upon
what they are told to do by the prosecuting attorney, and by what
the prosecuting attorney himself does ; is that correct ?
Mr. Kampo. Senator, I want to tell you this : You say the prose-
cuting attorney told the investigator. In the 6 years that I have been
on the staff, Mr. Holovachka, Mr. Vance, and Mr. Conroy, so help
me God, have never asked me to do an unethical or unfair or dishonest
thing.
Senator Mundt. You misunderstood my question. I say law en-
forcement in Indiana, in Lake County, and the eradication of crime,
is good or bad, not depending upon the investigators, but what they
are told to do in the nature of investigating; is that correct?
Mr. Kampo. Yes, sir.
Senator Mundt. You would know; is that correct? That is a
statement you can answer "yes" or "no."
Mr. Kampo. Yes, sir.
Senator Mundt. I would not ask you to say that they told you to
do something unethical. The question this committee has to resolve
with the witnesses called before us, and the evidence picked up by
investigators, is whether or not the prosecuting office is in league
with this crime syndicate which the evidence indicates is driving
independent operators out of the field, establishing a gambling mo-
nopoly, and using the take from that monopoly to destroy honest law
enforcement in Lake County. That is what we are trying to find out.
You can be used as a dupe, or you could not be used at all ; you could
carry out certain functions and do nothing wrong, so far as you are
wrong. In fact, it is quite proper that you arrest an independent law
violator.
We want to find out whether or not they arrest law violators who
belong to the syndicate or whether or not there is a payoff under the
table; whether or not all of this folding money that came in to build
a man's home, $40,000 in $10 and $20 bills is a legitimate operation
or whether or not this is fraud. Those things you are probably not
competent to testify to, as it is beyond the purview of your infor-
mation.
]N[r. Kampo. Senator, that is the thing I am confused on. Mr. Ken-
nedy said himself, by his own admission, that I didn't belong here;
I didn't have to testify.
Senator Mundt. Wait a minute. He said he didn't think you had
to come, because in connection with the other evidence before the
committee the fact that you had ordered a minor — and this is where
you come into the picture — to go in and buy some beer packs from an
independent operator wasn't a tremendously significant piece of infor-
mation. But it did fit into the pattern of other information we had
IMPROPER ACTIVITIES IN THE LABOR FIELD 18581
that they were arresting independent law violators and protecting
those belonging to the gang.
So you are a very appropriate witness. You have been very help-
ful. There was no attempt on our part to indict you at all except
to find out whether perhaps you might be being used, and not knowing
about it, no reason to know anything about it, in connection with the
performance of your duties, but being steered to perform your duties
only in a certain direction.
Mr. Kampo. Let me ask you this, then, Senator: As this article
states — and Mr. Kennedy says by his own admission that I didn't
have to testify — when I go back home who is going to be responsible
in telling the people that I didn't belong here?
Mr. Kennedy. I am not saying you don't belong here, Mr. Kampo.
You do belong here, and I am very happy that you came. I made a
mistake by not having you called before the committee. The staff
recommended that you be called. I did not feel your testimony was
that important. I was wrong, as your testimony has developed. You
are extremely important. If I had had this opportunity of talking to
you at length, I definitely would have called you.
Mr. Kampo. Then your investigators did not do a job.
JNIr. Kennedy. Yes; they did. It was my mistake. I didn't fol-
low to find out how very important your testimony has been to this
committee.
You testified that you have been out there in law enforcement for
6 years but have never raided a bookie joint. You have been living
right next to a bookie joint, but you never raided that. You never
raided any gambling establishment. You never raided any pinball
operations, and you don't even know who Johnny Formusa is.
Mr. Kampo. No ; I don't.
Mr. Kennedy. I think that is of great significance and extremely
important to the committee. I am very happy that you had the oppor-
tunity to testify and that you wanted to come and testify and correct
my judgment.
Mr. Kampo. I certainly did. I would like to ask the Chair if this
prepared statement that I made
Senator Mundt. How long a statement is it ?
Mr. Kampo. It is exactly 1 minute, 45 seconds.
Senator Mundt. Go ahead and read it, without objection.
Mr. Kampo. Thank you.
Gentlemen, first I would like to preface my statement by saying
that I appreciate and am in accord with the effeorts of this committee
in informing the public and obtaining information to aid in the enact-
ment of legislation to curb improper activities in labor and manage-
ment.
I would like the members of this committee to know that I feel
that I have appeared today as a voluntary witness. The committee's
investigator, Mr. Sinclair, handed me a subpena on March 9, and some
5 weeks later came into my place of business with the committee attor-
ney, Mr. Duffy, and asked me if I wished to surrender my subpena.
I sincerely hope that the investigator representing this commitee
was prompted by a genuine desire to employ my testimony in the man-
ner of being of assistance to the true purpose of this committee rather
36751— 59— pt. 53 11
18582 IMPROPER ACTIVITIES IN THE LABOR FIELD
than permitting me to be the butt of gossip and lies manufactured by
political enemies.
I am, in my opinion, a typical American, of Slovak descent. My
parents worked hard to provide me with an education through public
schools and college. I served my country in World War II, taught
school for a time, built a fairly sized furniture business, and entered
into political life.
I hope I typify the type of person that we consider desirable in
public life. I served my community for 9 years as chairman of our
city's political organization with as much sincerity, integrity, and
honesty as any member serving on this Senate committee.
I have watched this committee and others on television. I have seen
all types of people before the cameras. I finally realize that some
innocent people, like myself, suffered irreparable damage in their home-
towns because of public indictment by hearsay and association. Un-
fortunately, perhaps, because of the magnitude of this effort, people
became confused. To prove a point, I have brought clippings from
my hometown newspaper of last Sunday and Tuesday, concerning my
appearance before this committee. Today by association in these
articles, I am linked with the second ranking underworld figure in
Chicago and other mobsters of that ilk.
Gentlemen, I don't know these men, never met them, never associated
with them, and, to the best of my knowledge, never saw them before.
In conclusion, I want to say I realize that this is not a court of law,
and unfortunately the people at home will not judge my appearance
here today by a verdict of guilty or not guilty.
But by the mere fact that I am here appearing before this commit-
tee they will point their finger of suspicion at me and my family for
many years to come. It is my opinion, and I am certain the opinion
of many other f airminded people, that you have a tremendous respon-
sibility in selecting the people summoned here.
I hope for the sake of your individual consciences you have weighed
the results of your inquiries against the damage resulting to the inno-
cent bystander.
Senator, I want to thank you from the bottom of my heart for the
opportunity.
Senator Mundt. Does anybody else have any questions?
Thank you for your testimony.
Mr. Kennedy. What was the name of the bookie?
Mr. Kampo. Next door ?
Mr. Kennedy. Yes.
Mr. Kampo. I don't know whether it is called Newmann's Cigar
Store or just The Cigar Store.
Mr. Kennedy. Fred Newman ?
Mr. Kampo. He is the owner, but I don't know what the name of the
place is.
Mr. Kennedy. What was the address of his place?
Mr. Kampo. Well, my address is 556 State Street.
Mr. Kennedy. And he was right next door?
Mr. Kampo. Yes, sir.
Mr. Kennedy. Mr. Kampo, if you saw somebody robbing a place
of business, would you make an arrest?
Mr. Kampo. I would assume so, but that is a situation that
Mr. Kennedy. You don't know ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18583
Mr. Kampo. I would say "Yes."
Mr. Kennedy. But you are not sure ?
Mr. Kampo. You may as well be realistic about it. Maybe I would
be scared. Who knows ? Let's be frank about it. It is the situation.
I would say under normal conditions, yes.
Mr. Kennedy. Would you call up Mr. Holovachka first ?
Mr. Kampo. No, sir.
Mr. Kennedy. You would just make the arrest?
Mr. Kampo. I would probably call the local police because I would
want some help.
Mr. Ivennedy. I see. OK.
Senator Mundt. May I just suggest, Mr. Kampo, for what it is
worth — you impress me as an honest, upright citizen.
Mr. Kampo. Thank you. I still hope that the people in my home-
town feel that way, sir.
Senator Mundt. I hope so. I am inclined to think that you are
working for some people who need a little bit of investigating, and
we are going to do that. But that need not necessarily implicate you.
But if you have any difficulty with the folks back home convincing
them that you are upright, honorable, zealous about law enforcement,
I think if you will take that statute that you brought to us, read it
carefully, and then go ahead and exercise your responsibility as the
Legislature of Indiana probably told you to do, and start making a
couple of arrests, you may lose your job but you certainly will re-
habilitate yourself with the good people of your community. I will
tell you that.
Mr. Kampo. May I have you clarify this, sir : Mr. Kennedy says he
is glad I came. In the beginning he said that I did not have to testify.
Here is the question : Why doesn't he get on the radio and say that
Mike Kampo is a decent man ; he knows the record, his investigators
have been in my store. He did it for the mayor of Gary.
Senator Mundt. He can answer if he wants to.
Mr. Kennedy. You testified here before the committee. You made
your statement. You have answered your questions. I think they
reveal you and your capabilities far better than I could.
Mr. Kampo. Fine. Thank you very much.
Senator Mundt. I might say I believe you are on the air, so the folks
back home ought to be able to judge this for themselves, including
whether or not my suggestion to you as friendly advice has any
merit.
Mr. Kampo. Thank you very much, sir.
Senator Mundt. We will recess until 10 : 30 tomorrow morning.
(Members of the select committee present at the taking of the recess
were Senators Mundt and Curtis.)
(Whereupon, at 1 : 05 p.m., the committee recessed, to reconvene at
10 : 30 a.m., Friday, June 5, 1959.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
MONDAY, JUNE 8, 1959
U.S. Senate,
Select Committee on Improper Activities
IN the Labor or Management Field,
Washington^ D.C.
The select committee met at 2 :45 p.m., pursuant to Senate Resolu-
tion 44, agreed to February 2, 1959, 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
Karl E. Mundt, Republican, South Dakota ; Senator John F. Kennedy,
Democrat, Massachusetts; Senator Frank Church, Democrat, Idaho;
Senator Homer E. Capehart, Republican, Indiana.
Also present : Robert F. Kennedy, chief counsel ; LaVern J. Duffy,
investigator; Richard G. Sinclair, investigator; James F. Mundie,
investigator; John T. Thiede, investigator; Robert E. Manuel, assis-
tant counsel; Ruth Y. Watt, chief clerk.
The Chairman. The committee will be in order.
(Members of the select committee present at time of convening:
Senators McClellan, Mundt, and Capehart.)
The Chairman. All right, Mr. Kennedy, call the next witness.
Mr. Kennedy. Mr. Chairman, in some testimony that was given last
week, there was an error made in connection with an establishment
that was owned by Mr. Morgano. It was stated at that time, and
certainly partially because of the chief counsel, myself, at that time
that the College Inn was located on the campus of Valparaiso
University.
We found out subsequently, in a telegram from the president of
Valparaiso University, that the location of the College Inn was just
off the campus, and that the univerity itself had nothing to do with
the College Inn and did not rent the property to Mr. Morgano.
So I thought if we could put in the exchange of telegrams that took
place between the president of Valparaiso University and the tele-
gram that went out over your signature in connection with straight-
ening that record out, it would be a good idea.
The Chairman. This may be entered in the record without objec-
tion, so that it will correct the record.
(The telegrams are as follows:)
Senator John F. Kennedy,
Senate Rackets Committee,
Senate Office Building, Washington, B.C.:
Press and radio reports indicate that Harold Rader, deputy sheriff of Porter
County, Ind., testified that College Inn on campus of Valparaiso University is
18585
18586 IMPROPER ACTIVITIES IN THE LABOR FIELD
operated by Tommy Morgano. To set the record straight, College Inn is privately
owned and not on the campus of "Valparaiso University. Believe that the good
reputation of Valparaiso University requires correction of testimony. Rader's
testimony has been widely publicized in the Middle West. Would deeply
appreciate the correcting statement from you.
O. P. Kretzmann,
President, Valparaiso University.
Mr. O. P. Kretzmann,
President, Valparaiso University,
Valparaiso, Ind.:
Thank you for bringing this matter to the attention of the committee. The
record will be corrected at the next session of the committee to show that the
property on which College Inn is located is privately owned and that the
University of Valparaiso has no connection or responsibility of any kind for the
inn or its management.
John L. McCleli^n,
Chairman, Senate Select Committee on Improper Activities in the Labor
or Management Field.
Mr. Kennedy. I might also say, Mr. Chairman, that in connection
with Mr. Morgano, we have had some discussions with the Immigra-
tion and Naturalization Service over the weekend, and they are
moving against Mr. Morgano, and I understand from information
that I have received in the last half hour or so that they have already
served Mr. Morgano with papers to show cause as to why he should
not be deported from the United States.
I understand that he was served with those papers some time
today, or Friday. So action is being taken by the Immigration and
Naturalization Service in connection with that case.
Mr. Walter Conroy.
The Chairman. Mr. Conroy, 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 tlie truth, so help you God ?
Mr. CoNEOY. I do.
TESTIMONY OF WALTER D. CONROY
The Chairman. Please state your name, your place of residence,
and your business or occupation.
Mr. Conroy. Walter Conroy. I live at 4309 Homerlee Street, East
Chicago, Ind., and I am presently chief investigator for the prose-
cuting attorney's office of Lake County, Ind.
The Chatrman. How long have you held that position, Mr. Conroy ?
Mr. Conroy. Since January 1, 1953.
The Chairman. Who was prosecuting attorney at the time you took
this position ?
Mr. Conroy. Mr. Holovachka.
The Chairman. He is not the present prosecutor, I believe.
Mr. Conroy. No, sir.
The Chairman. What is the name of the present prosecutor ?
Mr. Conroy. Floyd V. Vance.
The Chairman. Have you served in the position as chief investi-
gator for that office continuously since you took the position ?
Mr. Conroy. Yes, sir.
The Chairman. Do you waive counsel, Mr. Conroy?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18587
Mr. CoNROY. I do.
Mr. Kennedy. Mr. Holovachka was the prosecuting attorney up
until January of this year ; is that right ?
Mr. CoNROY. Up until December 31.
Mr. Kennedy. Of 1958; is that right?
Mr. CoNROY. Yes, sir.
Mr. Kennedy. And Mr. Vance succeeded him?
Mr. CoNROY. Yes, sir.
Mr. Kennedy. And Mr. Holovachka holds what position now?
Mr. CoNROY. The chief; they just switched office; the chief deputy.
Mr. Kennedy. Now, Mr. Conroy, we have had some testimony here
over the period of the last 3 or 4 days in connection with the opera-
tions of the bingo-type of pinball machines, and the effect that it had
on local No. 1, the local of Mr. John Testo, in Gary, Ind. Mr. Testo
testified the first day and stated to the committee that ultimately,
because of the pressure that was brought on him, they drove him out
of business.
We have had the testimony of various witnesses regarding the fact
that you made certain raids on locations that were owned by inde-
pendent operators, while you failed to do so in connection with the
locations where the machines of Mr. Welbourn and Mr. Soliacki were
located.
I would like to ask you what procedures you followed as far as
making raids or picking up machines were concerned ? Do you make
that determination yourself, as to where you should go and raid ?
Mr. CoNROY. No, sir.
Mr. Kennedy. Now, for instance, we have had the testimony in
connection with Mrs. Hagler, and she testified that you came out there
in connection with her machines. Why did you happen to go to Mrs.
Hagler's place of business ?
Mr. CoNROY. I worked under the direction of the prosecuting attor-
ney, Mr. Holovachka. He told me to go to this particular address,
and that they had a complaint there was a gambling machine there,
particularly a pinball that was paying off, and to notify them to get
the machine out and if they didn't get them out in a certain length
of time, and I think it was 48 hours, that they would be confiscated.
Mr. Kennedy. Now, Mrs. Hagler testified that the machine ulti-
mately was removed based on the pressure that was brought by you, but
it was immediately replaced by a machine which was owned by Mr.
Sohacki and Mr. Welbourn.
Why didn't you move in then and conficate that machine, of the
Sohacki -Welbourn group ?
Mr. CoNROY. I wouldn't know if there was no order from the office.
Mr. Kennedy. You mean you would never move in and confiscate
any machines unless you were told to do so by Mr. Holovachka ?
Mr. CoNROY. That is right,
Mr. Kennedy. Even though these machines were operating all
around Gary and in Lake County, over 1,000 of these machines, you
wouldn't take any action against them unless told to do so by Mr.
Holovachka ?
Mr. CoNROY. That is right.
Mr. Kennedy. Did you bring to his attention that these machines,
that there were hundreds and hundreds of these machines active and
18588 IMPROPER ACTIVITIES IN THE LABOR FIELD
that they were the gambling type of equipment or machines ? Did you
bring that to his attention ?
Mr. CoNROY. I don't think it was necessary.
Mr. Kennedy. He knew about it ?
Mr. CoNROY. I presume that he did.
The Chairman. Let me see if I understand you now.
According to the evidence before this committee — ^and I assume it is
pretty well a conceded fact — there have been many of these machines
in that area ; is that correct ?
Mr. CoNROY. I couldn't say how many there were.
The Chairman. I didn't ask how many. I said there had been
many.
Mr. CoNROY. Oh, yes.
The Chairman. There was no doubt about that ?
Mr. CoNROY. No doubt.
The Chairman. With that fact you were fully acquainted ?
Mr. CoNROY. That is right.
The Chairman. Were they all illegal in their operation ?
Mr. CoNROY. Well, those that I went out to investigate would be.
The Chairman. I am sure of that. How were the others, just like
them?
Mr. CoNROY. Well, I didn't get any opportunity to investigate, be-
cause I wasn't sent in and I had no complaints.
The Chair]man. About those you went out to investigate, did they
take a great deal of your time ?
Mr. CoNROY. No ; it all depended on the location and what you had
to do.
The Chairman. It depended on the location whether it took you 30
minutes or an hour to attend to it ?
Mr. CoNROY. It didn't take an hour.
The Chairman. It didn't take an hour ?
Mr. CoNROY. Unless they were in transportation, it might take me
longer.
The Chairman. What did you do with the rest of the time, with
respect to the machines that you were not instructed to take out ?
Mr. CoNROY. I didn't do anything.
The Chairman. You didn't do anything with respect to the others?
Mr. CoNROY. No, sir.
The Chairman. Even though they may have been operating in the
same manner, and for the same purpose, you did nothing in an official
capacity to stop their operations ?
Mr. Conroy. Not unless we had a complaint, sir.
The Chairman. Unless you had a complaint, and the only com-
plaint you recognized was one when the prosecutor told you to go out
and do something about it ?
Mr. Conroy. Yes.
The Chairman. That is the only source of complaint that you
recognized?
Mr. Conroy. No, in the event I would see a violation, I would make
an arrest, but I didn't get a chance to see any.
The Chairman. Did you ever make an arrest on a violation that
you saw?
Mr. Conroy. I don't remember whether I did or not.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18589
The Chairman. You mean in all of the time, now, that you were
an officer there investigating, you don't recall any arrest you ever
made on sight?
Mr. CoNROY. No, sir.
The Chairman. Would you say from your observation, and from
your knowledge and from your participating in it, that there was a
discrimination, some gambling machines were permitted to run, and
others were not ?
Mr. CoNROY. From my observation, I would say "No."
The Chairman. Why would you say no ?
Mr. Conroy. Because I knew of nobody that was told to run or not
to run.
The Chairman. I said were they permitted to run. I did not say
told to run, I said permitted to run.
Mr. Conroy. Well, I can't answer that question, as to whether they
were permitted or not.
The Chairman. Well, did they run ?
Mr. Conroy. They were pinball machines in the county.
The Chairman. That were running ?
Mr. Conroy. Yes, sir.
The Chairman. That you didn't take up ?
Mr. Conroy. Well, I didn't get them all up.
The Chairman. You weren't told to take all of them up?
Mr. Conroy. No, sir.
The Chairman. Some you were told to take up and some you were
not?
JSIr. Conroy. Yes.
The Chairman. And those that you were not told to take up con-
tinued to run ?
Mr. Conroy. Yes, and the only thing I could add to that is that
sometimes the law in the State of Indiana was against the machines
and sometimes it was for them. Not being a legal mind, I would
take my advice from the prosecutor.
The Chairman. You simply carried out the prosecutor's advice?
Mr. Conroy. That is right.
Senator Mundt, What is there about a machine in Indiana that
makes some of them legal, and some of them illegal ? Are they dif-
ferent types of machines or do they run their machines differently?
Mr. Conroy. Well, I don't think that they run any of them
differently.
Senator Mundt. In your opinion they are all illegal ?
Mr, Conroy. No, I wouldn't say they were all illegal.
Senator Mundt. Then they are all legal ?
Mr. Conroy. Some cities have ordinances that permit them to op-
erate under.
Senator Mundt. Now we are talking about Gary ?
Mr. Conroy. Gary, I don't know.
Senator Mundt. You are an old experienced investigator, and po-
liceman and board of education member. You know something about
Gary's ordinances.
Mr. Conroy. I know a little bit about Gary.
Senator Mundt. Are these machines legal or illegal in Gary ?
Mr. Conroy. If they are operated as a gambling machines they are
illegal.
18590 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. It is your impression that all of the msLchines ther©
are being used for gambling purposes ?
Mr. CoNROY. I wouldn't say all of them, no. I said they could be
used.
Senator Mundt. Is there a different type of machine that is used
for gambling from one which is not used for gambling ?
Mr. CoNROY. They have machines in there that are called flippers,
that is the only name I know them by, and there is no recount on them
as to whether it would register a game in the event that would hit
the pinball.
Senator Mundt. Is that the gambling type or the nongambling
type?
Mr. CoNROY. I would say it would be the type you couldn't gamble
on unless you were betting head and head with somebody on the score.
Senator Mundt. So if you found a machine that was a flipper, it
was a legal machine?
Mr. CoNROY. Yes, sir.
Senator Mundt. If it is not a flipper, it is an illegal machine?
Mr. CoNROY. It could be put in that category, it could be used for
gambling.
Senator Mundt. It would be set up so it could be used for gam-
bling?
Mr. CoNROY. Yes, sir.
Senator Mundt. Now do you have a different type of ordinance
against pinball gambling machines in the city of Gary distinguished
from the county of Lake in which Gary is located ?
Mr. Conroy. I don't know if Gary has a pinball ordinance.
Senator Mundt. You don't know whether Gary has a pinball ordi-
nance or not ?
Mr. CoNROY. No.
Senator Mundt. You would have to know that, wouldn't vou, if
you were going to go out and enforce the law, would you not? You
would have to know what the law is.
Mr. CoNROY. I would be apprised of the law by the prosecutor, and
he never told me whether they did or they didn't.
Senator Mundt. He never told you whether they had a law or not?
Mr. CoNROY. He was the boss, and I didn't question him as to any
of his orders when he gave them to me.
Senator Mundt. Do you have any jurisdiction outside of the city of
Gary in the county of Lake ?
Mr. CoNROY. Yes, sir.
Senator Mundt. You work for the county prosecutor ?
Mr. CoNROY. That is right.
Senator Mundt. Could you arrest someone in the county or in the
city?
Mr. Conroy. Yes, sir.
Senator Mundt. But you were never told whether there was a law
against gambling in the county or in the city ?
Mr. CoNROY. Well, as I stated before, from my own knowledge as a
layman, I recall reading in the papers, and maybe in conversation with
people in reference to what the State legislature would do in refer-
ence to pinballs, whether it would be the opinion of the attorney gen-
eral or whether it was the legislature that would act on it or some
IMPROPER ACTIVITIES IN THE LABOR FIELD 18591
lower court. Just a conversation, I wouldn't know what decision
they arrived at.
Senator Mundt. You were under the impression, were you not, that
there was a law of some kind against gambling pinball machines both
in the county and in the city ?
Mr. CoNROY. In reference to gambling, it is illegal; yes.
Senator Mundt. Whether there was a law against it you have never
seen, or whether your boss told you of it or not, you went around
under the impression that there was a law against these gambling
machines ?
Mr. CoNROY. In the event that you caught them violating the law.
They have changed the law here now, or there is another opinion on
the law, until as far as possession was concerned, it wasn't illegal.
But
Senator Mundt. But now it is ?
Mr. CoNROY. Now they are considered illegal by the present prose-
cutor, who would order the pinballs out, not through me, but he
ordered the pinballs out of town, and gave them a certain length of
time to get them out of there. Whether they are out or not, I don't
know. I have been here. The case, as I understand it, is going
before the Indiana Supreme Court.
Senator Mundt. If it was considered illegal to have a pinball ma-
chine in your possession, can you tell me why you were ordered to
take time out of the possession of certain places and not take them
out of the possession of other places ?
Mr. CoNROY. Wherever a complaint would come to the office, Mr.
Holovaclika would inform me to go to a particular address, and I
would go there. Whatever he instructed me to do I w^ould do. In
the event he wanted the evidence on the machine, and they would
pay me off, I would play the machine and get what evidence there
was, and then remove it.
Senator Mundt. What would you do — walk into a place and buy
a newspaper or a Coca-Cola or a package of gum and you saw a ma-
chine, a gambling machine on the premises? What would you do
then ?
Mr. CoNROY. Well, if they were playing the machine and they
paid them off and I seen the violation, I would arrest them.
Senator Mundt. Did you ever do that ?
Mr. CoNROY. No, sir. I said if I seen the violation.
Senator Mundt. Did you as a customer ever see such a machine
in a place?
Mr. CoNROY. Sir?
Senator Mundt. Did you as an ordinary customer ever see a ma-
chine as you went in ? Did you ever come across a machine and see it
there?
Mr. CoNROY. Yes, I would see machines around.
Senator Mundt. Would you pick them up then ?
Mr. CoNROY. No. I had seen no violation.
Senator Mundt. I thought you said the possession of the machine
was a violation.
Mr. CoNROY. That is what they say now.
Senator Mundt. Now as of when? Today? Yesterday? Last
week?
18592 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. CoNROY. No, I would say within the last 10 days, 15 days.
Senator Mundt. Within the last 10 days ?
Mr. CoNROY. Somewhere around that time. Since the first of the
year, we will say.
Senator Mundt. Who makes that decision now, in the last 10 days
or since the first of the year, whenever it occurred ?
Mr. CoNROY. The prosecuting attorney of Lake County, Mr. Vance.
Senator Mundt. Mr. Holovachka ?
Mr. CoNROY. Mr. Floyd C. Vance, the prosecutor.
Senator Mundt. He was the deputy under Mr. Holovachka?
Mr. CoNROY. He was chief deputy ; yes, sir.
Senator Mundt. You don't know whether that occurred 10 days
ago or 5 months ago ?
Mr. Conroy. As to his order ?
Senator Mundt. Yes.
Mr. CoNROY. He didn't give me the order. He went to the police
department himself, I understand. He didn't tell me he went. I
just heard that he went. There was an article in the newspaper.
Senator Mundt. He didn't communicate with you, it seems to me,
very much. You are a regular investigator, aren't you, getting $5,000
a year ?
Mr. CoNROY. I am one of the four.
Senator Mundt. You had the same type of job as the young man who
came up and testified voluntarily one day last week ?
Mr. CoNROY. Yes, sir.
Senator Mundt. Your job is exactly analogous to his?
Mr. CoNROY. It is at the same level.
Senator Mundt. We read into the record the law the other day that
the State of Indiana had enacted, which gives you the same respon-
sibility and the same authority as a police officer.
Mr. CoNROY. That is right.
Senator Mundt. That gives you some responsibility to operate on
your own initiative, when you see a violation. If possession of the
gambling machine is a violation, you walk in to make a purcliase and
see a machine there, you have a responsibility, don't you, Mr. Conroy?
Mr. CoNROY. I would say "Yes."
Senator Mundt. Have you ever exercised it ?
Mr. CoNROY. Not unless I seen the violation.
Senator Mundt. Having the machine there is a violation now. It
has to be a violation either of 10 days ago or 5 months ago. We are
not quite sure because you haven't been told. But at least it is a viola-
tion now.
Mr. CoNROY. According to the prosecuting attorney, in his opinion,
it is a violation, the present prosecuting attorney.
Senator Mundt. When did he take office ?
Mr. CoNROY. January 1, this year.
Senator Mundt. Did he make that announcement soon after he took
office?
Mr. CoNROY. No. I think it happened within the last 30 days.
Senator Mundt. Within the last 30 days ?
Mr. CoNROY. Yes, sir.
Senator Mundt. Would you say it happened since this committee
got interested in gambling in Gary ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18593
Mr. CoNROY. Well, I don't know when this committee got interested
in gambling in Gary.
Senator Mundt. When did we get interested, Mr. Counsel ? Would
this be within that period ?
Mr. I^NNEDY. We have been interested from November of 1958,
Senator Mundt. I will put this question this way : Has our interest
in the situation been reflected by contacts in Gary prior to this pro-
nouncement by the prosecutor?
Mr. Kj:nnedy. As I understand it, these machines were picked up
or declared illegal about 10 days ago, which was a couple of days after
it was announced we were going to hold these hearings. But they
have been illegal. There is a 1957 Indiana State law, passed by the
legislature, declaring these machines, per se, illegal, pinball machines
which award anything other than an immediate and unrecorded right
of replay.
Senator Mundt. That was passed in 1957 ?
Mr. Kennedy. Yes, sir.
Senator Mundt. And implemented in 1959, 10 days ago. That
is awfully slow.
Mr. Kennedy. It is impossible, Mr. Conroy, to go into most any
place, a restaurant or a tavern, or almost any drugstore in Gary, Ind.,
or Lake County, Ind., without finding these machines, isn't it 'i You
know that.
Mr. CoNROY. There is machines around there. I won't say they
are every place.
Mr. Kennedy. All you have to do is go in and have lunch there
and you will find they are making payofi's. That has been going on
for 5 or 6 years while you have been in the office.
Why is it you have been around picking up certain people's ma-
chines and you haven't picked up the machines that belong to Mr.
Sohacki and Mr. Welbourn ?
Mr. CoNROY. I don't know whose machines they were.
Mr. Kennedy. You have gone into places, according to the sworn
testimony before our committee, and just told the people they couldn't
have the machines.
For instance, we have the testimony of Mr. Smaluk before this
committee. He said he had had his machine unplugged for a week
and still you came in and picked his machine up.
Mr. CoNROY. That isn't true.
Mr. Kennedy. You did not ?
Mr. Conroy. No, sir.
Mr. Kennedy. Did you ever see a payofl" being made in Mr. Smaluk's
place ?
Mr. CoNROY. I don't know where is Mr. Smaluk's place.
Mr. Kennedy. In Eoby's Tavern ?
Mr. CoNROY. It was hooked up in Roby's Tavern.
Mr. Kennedy. Did you see a payoff ?
Mr. CoNROY. No, sir.
Mr. Kennedy. Why did you pick up that machine ?
Mr. Conroy. I was ordered to do so by the office.
Mr. Kennedy. Did you have some kind of a writ ?
Mr. CoNROY. No, sir.
Mr. Kennedy. Did you have anything from the court ?
18594 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. CoNROY. No, sir.
Mr. Kennedy. You did not. You were just told by Mr. Holo-
vachka to go pick them up ?
Mr. CoNROY. That he had evidence that they were paying off on the
pinball machines.
Mr. Kennedy. Did you show the evidence to the owner of the
tavern ?
Mr. CoNROY. No, sir.
Mr. Kennedy. What did you do to the machine? Did you turn it
over to the court ?
Mr. CoNROY. No. The machines — I don't recall just what happened
to the machines.
Mr. Kennedy. That belongs to those people. That doesn't belong to
you. Where is the machine ?
Mr. CoNROY. I work for the prosecutor.
Mr. Kennedy. Did you turn it over to the prosecutor?
Mr. CoNROY. It would be in his possession.
Mr. Kennedy. Where is the machine?
Mr. CoNROY. I don't know where it is.
Mr. Kennedy. Did you turn it over to him physically ?
Mr. CoNROY. No.
Mr. Kennedy. Who did you turn the machine over to ?
Mr. CoNROY. One time I recall some trucking agency would be
used to take them up, and I would have them pick them up.
Mr. Kennedy. Where would they take the machines?
Mr. CoNROY. To their storehouse.
Mr. Kennedy. Are they in the storehouse now ?
Mr. CoNROY. I don't know what became of them.
Mr. Kennedy. You don't know what happened to them ?
Mr. CoNROY. No. I could have taken them from there and brought
them over to my home.
Mr. Kennedy. Did you?
Mr. CoNROY. I don't recall on that whether I did or didn't.
Mr. Kennedy. Have you any machines in your home ?
Mr. Conroy. Yes, sir.
Mr. Kennedy. How many machines?
Mr. Conroy. I think 11 or 12.
Mr. Kennedy. Why do you have machines in your home ?
Mr. Conroy. It is the only place to store them.
Mr. Kennedy. Could you tell the committee what statute in the
State of Indiana gives you the right to go and pick up machines and
store them in your home?
Mr. Conroy. I am not an attorney. I only take orders from the
man who knows the law.
Mr. Kennedy. There isn't anything in the law that says that.
Mr. Conroy. I don't know.
Mr. Kennedy. You have no right to go in and take somebody's
|)roperty on that.
Mr. Conroy. I depend on what Mr. Holovachka's judgment on
what the law is.
Mr. Kennedy. Didn't it shock you that you have hundreds and
liundreds of these machines around and you were only told to pick
up certain machines?
Mr. Conroy. No, sir.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18595
Mr. Kennedy. Did it shock you that all of this gambling was going
on in Lake County, Ind., and you weren't doing anything about it?
Mr. CoNROY. No, sir. I have been there for 56 years and it has
been going on since before I was born and after I am dead.
Mr. Kennedy. Did you have the responsibility for 56 years?
Mr. CoNROY. Staying alive.
Mr. I^NNEDY. I see.
The Chairman. That might be a very significant statement. If
you did your duty, would your life be endangered ; is that what you
are implying?
Mr. Conroy. No, sir.
Senator Mundt. Did you ever pick up a machine from a place called
Ed & Paul's Sportsmen's Club on Calumet Avenue?
Mr. CoNROY. I wouldn't know it by that name. If they said I
picked it up, I picked it up.
Senator Mundt. Operated by a man named Matt Pohl ?
Mr. Conroy. I didn't know their names, Senator. I would just
have a number.
Senator Mundt. Did you ever pick up any machines at a place and
then after a while sort of recant, and put the machines back again ?
Mr. CoNROY. No, sir.
Senator Mundt. You never took any machines out and let them go
back in again ?
Mr. Conroy. No, sir.
Senator Mundt. You are sure of that ?
Mr. CoNROY. Positive.
Mr. Kennedy. Have you ever read the law in connection with pin-
ball machines ?
Mr. CoNROY. No, sir.
Mr. Kennedy. Mrs. Kotlarz, who testified before the committee,
runs a tavern called Blondie's Tavern. She testified that you told
her when you came in to pick up the machines that she had the wrong
kind of machines in there. Is that correct ?
Mr. CoNROY. That is not true.
Mr. Kennedy. You did not?
Mr. CoNROY. No, sir.
Mr. Kennedy. And Mrs. Hagler stated that when you came in to
pick her machines up, you told her that the machines from Gary,
Ind., would be all right if she had those machines in there. Did you
tell her that ?
Mr. CoNROY. No. I heard her testimony when I was at home.
Mr. Kennedy. But you did not tell her that either ?
Mr. CoNROY. No.
Mr. Kennedy. As I said, Mr. Smaluk said that at the time the
macliines were picked up, they were unplugged. That is Mr. Smaluk's
testimony.
Mr. CoNROY. There was none of the machines unplugged that I
picked up.
Mr. Kennedy. You didn't witness payoffs at all these places, as
I understand, Mr. Conroy?
Mr. CoNROY. No, not in all places.
Mr. Kennedy. You were just told by Mr. Holovachka that he had
had a complaint?
18596 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Go^STROT. That is right.
Mr. Kennedy. Was it ever adjudicated as to whether there were
actually payoffs made?
Mr. CoNROY. In some cases ; yes.
Mr. Kennedy. Did you
Mr. CoNROY. Ad j udicated ? Do you mean taken to court ?
Mr. Kennedy. Yes.
Mr. CoNROY. No, sir.
Mr. Kennedy. There never was ?
Mr. CoNROY. No, sir.
Mr. Kennedy. The people lost their machines just on your say-
so that there was gambling. Don't they have a right to go to a
court?
Mr. CoNROY. They go to the prosecuting attorney.
Mr. Kennedy. A number of them said they called you and were
unable to get in touch with you.
Mr. CoNROY. I don't know. Mr. Sinclair got in touch with me.
Mr. Kennedy. That is from the representative of the committee,
and I am talking about the citizens of Gary.
Mr. CoNROY. I have gotten a lot of calls from people and they said,'
"You don't know who I am, bat I know you, and I would like to
get my machine back, and what do I do about it?" I would say, "Go
and see the prosecutor."
Mr. Kennedy. Did you have any law or did you ever see any law
that gave you the right to go in and pick up these machines of these
people, if you didn't witness a payoff yourself ?
Mr. CoNROY. Personally, you mean ?
Mr. Kennedy. Yes ; did you ever see a law that gave you that right?
Mr. CoNROY. I don't read the law.
Mr. Kennedy. What is that ?
Mr. CoNROY. I don't read law, and I am not educated in law and
I don't know how to interpret law, and I don't know a policeman that
does.
Mr. Kennedy. Were you ever told or did Mr. Holovachka ever
tell you what right you had or show you where you had rights under
the law of Indiana to go and pick up these machines and keep them
in your basement or keep them in your home? Did he ever tell you
where vonr rights imder the Indiana law came from, in connection,
with that?
Mr. C'oNROY. I work for Mr. Holovachka, and I didn't question his
judgment, and in the event he told me to do anything, I complied
witli his orders.
Senator Mundt. Let me ask the question in this way : About how
many of these pinball machines are you supposed to have picked up
altogether, just these 11 that you mentioned, or have you picked up a
lot of them ?
Mr. CoNROY. I picked up more than that.
Senator Mundt. Just make us a kind of a rough educated guess.
Mr. CoNROY. I would say 30, or 35.
Senator Mundt. Now, you have 11 of them, or 12 of them, in your
home. "\'\niat happened to the rest of them?
Mr. CoNROY. Well, the first group that was picked up, I don't re-
member what happened to them, and the garage was full.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18597
Senator Mundt. I mean your garage.
Mr, CoNROY. Yes, sir. And 1 spoke to Mr. Holovaclika about it,
and he said, ''Destroy them." I was getting a lot of calls from dif-
ferent people, politicians and whatnot, wanting to get these ma-
chines back, and I told tliem tlie only place they could get tliem back
was to go and see Holovaclika. So he said to get rid of the machines.
Senator Mundt. What did you do then ?
Mr. CoNROY. They were destroyed and taken to the dump.
Senator Mundt. You broke them up ?
Mr. CoNROY. Yes, sir.
Senator Mundt. And threw them on the dump ?
Mr. CoNROY. Yes, sir.
Senator Mundt. About how many were there ?
Mr. CoNROY. I would say 10 or 15.
Senator Mundt. Then you have 11, and that accounts for about 26
of them.
Mr. CoNROY. Still awaiting for an order to get rid of them.
Senator Mundt. You don't know whether they are going to be
destroyed or not ?
Mr. CoNROY. Whatever the boss says to do with them.
Senator Mundt. Did anybody ever refuse to let you take the ma-
chine out, and you have to have a pi'ocess of law to get them, and did
anybody stop you from taking a machine?
Mr. CoNROY. No; I am a pretty bad guy to try to stop and I have
had a lot of arguments, and I have been a policeman for 15 years,
and I have a good reputation as a policeman.
Senator Mundt. You are like the Royal Canadian Mounties, you
always get your machine ; is that right ?
Mr. Conroy. Or anything else I went after.
Senator Mundt. Nobody ever stopped you ?
Mr. CoNROY. No, sir. Physically, no; and nobody tried to stop me.
Senator Mundt. Did you fail to get the machine — and I don't mean
they stopped you physically— but put up enough bluster so you said
maybe you had better get a court order ?
Mr. CoNROY. I wouldn't have a job tomorrow if I did that.
Senator Mundt. You always got them '^
Mr. CoNROY. Yes, sir.
Senator Mundt. Did they ever take any legal action to get their
machines back ?
Mr. CoNROY. No, sir ; not that I know of.
Senator Mundt. That you know of ?
Mr. CoNROY. No, sir.
Senator Mundt. As far as you know no machine ever went back
after it once got out and into your hands ?
Mr. CoNROY. No, sir ; not to my knowledge.
Mr. Kennedy. Did you have any court order giving you the right
to destroy the machines?
Mr. CoNROY. Just the boss.
Mr. Kennedy. Those machines are worth some $700 apiece, and
what if those people sue you for the machines ?
Mr. CoNROY. I would depend upon Mr. Holovaclika to defend me
there.
36751— 59— pt. 53 12
18598 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. KJENNEDY. There is nothing in the statute that gives you the
right to destroy the machines.
Mr. CoNROY. I don't know anything about that ; I don't know law.
Mr. Kennedy. I will show you.
Mr. CoNROY. It won't do any good, because I still won't understand
it.
Mr. Kennedy. It is section 10-2328, and it talks about when you
can confiscate a machine, and it says :
Whoever shall violate any of the provisions of this Act shall be deemed guilty
of a misdemeanor and upon conviction therefor shall be fined in any sum not
less than $25.00, nor more than $500.00, to which may be added imprisonment
for a period not exceeding six months. Upon the conviction of any offender
for a violation of this Act, the court shall order the sheriff to seize any slot
machine or gambling device prohibited by the Act.
This is after conviction ; and were these people convicted ?
Mr. Conroy. Not any that I picked up.
Mr. Kennedy. You were very apt to be sued for 30 machines, for
$750 apiece, and that is about $25,000.
Mr. Conroy. I was sued half a dozen times while I was a policeman,
and nobody collected judgment.
Mr. Kennedy. Do you Iviiow anything about the M. & J. Motel?
Mr. Conroy. Yes, sir.
Mr. Kennedy. Did you ever conduct any raids there ?
Mr. Conroy. Yes, sir.
Mr. Kennedy. Did you ever close the place down ?
Mr. Conroy. Yes, sir.
Mr. Kennedy. When was that ?
Mr. Conroy. On several occasions, since 1954, and 1955; inmates
were arrested and taken to J. P. court or to criminal court.
Mr. Kennedy. What about 1955 and 1956 ?
Mr. Conroy. There were raids made there.
Mr. Kennedy. Did you ever conduct any raids in the last year,
1958?
Mr. Conroy. Yes ; I was over around there.
Mr. Kennedy. I don't think that that is sufficient, that you are
"over around there."
Mr. Conroy. Sometimes you can't get evidence. You know they
are cheating around there, and you go over and you watch and observe
them, and watch the cab drivers.
Mr. Kennedy. Did you find out anything in 1958 ?
Mr. Conroy. None other than they would be cheating.
Mr. Kennedy. What does cheating mean ?
Mr. Conroy. Well, they would be violating the law.
Mr. Kennedy. Did you make an arrest when you found they were
violating the law ?
Mr. Conroy. When I found them violating the law.
Mr. Kennedy. You did make arrests in 1958 ?
Mr. Conroy. I don't remember.
Mr. Kennedy. Did you make any arrests this year, in 1959, at the
M.&J.Motel?
Mr. Conroy. No, sir.
Mr. Kennedy. Did you make any arrests in 1957 ?
Mr. Conroy. Possibly.
Mr. Kennedy. Do you know that you did ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18599
Mr. CoNROY. I wouldn't say that I did or I didn't.
Mr. I"Cennedy. Did you arrest Mr. John Formusa who runs the
place ?
Mr. CoNROY. No, sir ; and I couldn't prove that he runs the place.
Mr. Kennedy. Did you make an investigation or did you talk to
him about it ?
Mr, CoNROY. I talked to him ; yes, sir.
Mr. Kennedy. What did he say ?
Mr. CoNROY. He denied that he had anything to do with the place.
Mr. Kennedy. Where did you talk to him, and where did you
question him ?
Mr. CoNROY. I met Formusa on the street, and another time up
close to his home.
Mr. Kennedy. What do you mean, "up close to his home" ?
Mr. CoNROY. I was driving up there in the area, and I went over
to Metro's office and I went over to see Formusa.
Mr. Kennedy. Did you go into his home ?
Mr. CoNROY. No ; I wasn't in his home.
Mr. Kennedy, Those are the only two times you questioned him?
Mr. CoNROY. The only two times ; yes.
Mr. Kennedy. And he just denied having to do with it, and you
met him once on the street and you met him once traveling around
his home ?
Mr. CoNROY. That is right.
Mr. Kennedy. Did you ever call him down to the headquarters?
Mr. CoNROY. No, sir.
Mr. Kennedy. Those are the only contacts you had with Mr.
Formusa?
Mr. CoNROY. Those are the only ones I remember knowing about.
Mr. Kennedy. Did he ever call you on the telephone?
Mr. CoNROY. It is possible.
Mr. Kennedy. What would he call you on the telephone about ?
Mr. CoNROY, I wouldn't know, I couldn't tell you now what it
was, and I don't remember what the conversation would be about,
other than
Mr. Kennedy. Go ahead, other than what ?
Mr. CoNROY. Other than he might be trying to tell me that he
didn't have anything to do with the place.
Mr. Kennedy. Would he call you up and volunteer the information,
"I don't have anything to do with the M. & J. Motel"?
Mr. CoNROY, No; I was investigating around through different
people, and cabdrivers and one thing and another, and anybody who
knew anything about it to try to tie Formusa into the place.
Mr. Ivennedy. I don't know why it was so difficult with you, he
told us when we interviewed him, and he said that he ran it, and
we should make our money his way, and he was going to make his
money his way, that is what he said to our investigator.
Mr. CoNROY. He might liave told you that, but he didn't tell me
that.
Mr. Kennedy. Did he call you on the telephone at all ?
Mr. CoNROY. He could have.
Mr. Kennedy. What would he talk to you about ?
Mr. Conroy. I wouldn't know what the conversation would be
about. I couldn't relate it.
18600 IMPROPER ACTIVITIES EST THE LABOR FIELD
Mr. Kennedy. Do you have a private number ?
Mr. CoNROY. Sir?
Mr. Kennedy. Do you have a private number ?
Mr. CoNROY. Yes, sir ; I have had it for 15 or 18 years.
Mr. Kennedy, Is that published ?
Mr. CoNROY. No, sir ; unlisted.
Mr. Kennedy. Did Mr. Formusa have that number ?
Mr. CoNROY. I don't know, and I didn't give it to him.
Mr. Kennedy. What is that number ?
Mr. CoNROY. Export 8-0022. I might as well list it now.
Mr. Kennedy. Now, on September 2, 1958, there is a telephone call
to that private number from Mr. John Formusa, at YE 8-5324.
Could you tell us why he called you on September 2, 1958 ?
Mr. CoNROY. The only reason that I would say I would call him
Mr. Kennedy. He was calling you.
Mr. CoNROY. He could be calling me. What date is that ?
Mr. Kennedy. September 2, 1958, EX 8-0022.
Mr. CoNROY. I don't know his number. In the event he called me,
I couldn't tell you what it was.
Mr. Kennedy. This is a call from him to your private personal
number, and then on October 1, 1958, he called you again, January
2, 1959, he called you again, and on January 2, 1959 — he called you
twice.
Why was Mr. Formusa calling you twice in the beginning of this
year ?
Mr. CoNROY. I don't recall what it was.
Mr. Kennedy. Here is a man you say you only met twice, you
were walking down the street once, and you met him touring aromid
his house, and why would he be calling you at your private number ?
Mr. CoNROY. I wouldn't know, that is, I couldn't give you an answer
now, because I don't know, and I don't remember any conversation
with him. Mr. Formusa was trying to do a lot of things.
Mr. Kennedy. Wliat sort of things ?
Mr. CoNROY. Anything that he could get into, the racketeer and
that is all there is to it.
Mr, Kennedy. On January 3, 1959, he called you again, and on
January 30, 1959, he called you again. Could you tell us what those
were all about? Wliat was he trying to get into when he talked
to you ?
Mr. CoNROY. I wouldn't know.
Mr. Kennedy. Well now, when we were out there, this place was
going wide open and there wasn't any question about picking up any
evidence, they made it very obvious, the M. & J. Motel.
]Mr. CoNROY. You let a policeman show up and you won't find no
evidence.
Mr. Kennedy. That was in December and January. I think it
was in December we were out there. That is when we began this
investigation. Mr. Formusa runs it and he told the committee staff
he ran it.
Mr. CoNROY. He never told the local authorities he run it.
Mr. Kennedy. Even when he was calling you on these various
occasions, he didn't tell you that?
Mr. CoNROY. He denied he was running it.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18601
Mr. Kennedy. He called you up six or seven times to deny he was
running the motel?
Mr. CoNROY. I don't know how many times he called me up, and
he may have called me and I wasn't home, and he may have been
calling half a dozen times.
Mr. Kennedy. You went to Hawaii, did you, last year?
Mr. CoNROY. YeSj sir.
Mr. Kennedy. Did you pay for your ticket by cash ; did you ?
Mr. Conroy. Bank draft.
Mr. Kennedy. Excuse me?
Mr. Conroy. It was a bank draft.
Mr. Kennedy. Where did you get the money ? It was $2,000, was
it not?
Mr. Conroy. I drew $2,000 out of the savings account.
Mr. Kennedy. What savings account?
Mr. Conroy. You have the records there now, and Mrs. Conroy
withdrew it from the savings account, and you have two books, and
two passbooks.
Mr. Kennedy. Would you show us where it was withdrawn from ?
(A document was handed to the witness.)
The Chairman. Counsel presents to you what purports to be a
bank passbook. Will you examine it and state whose it is, if you
identify it?
I believe you have two books before you. Do you identify those
bankbooks ?
Mr. Conroy. Yes, sir.
The Chairman. Whose are they?
Mr. Conroy. They belong to my wife and I.
The Chairman. Do they represent a joint account, cover a joint
account ?
Mr. Conroy. Yes, sir.
The Chairman. All right.
Mr. Kennedy. Would you show me where it is that you withdrew
the $2,000 in cash ?
Mr. Conroy. Well, I don't see it here. She withdrew it from there.
The Chairman. Those books may be made exhibits 7A and 7B.
The pertinent parts of them may be photographed and placed on
file as exhibits at this point. The original books may, at the proper
time, be returned to the owner.
(Documents referred to were marked "Exhibits 7A and 7B" for
reference and may be found in the files of the select committee.)
Mr. Kennedy. The records would show if there was a withdrawal
of the $2,000 in cash.
Mr. Conroy. It should show.
Mr. Kennedy. It doesn't show. It doesn't show. Your bank rec-
ords do not show that you withdrew $2,000 in cash to pay for this
trip. When was the trip made ?
Mr. Conroy. 1957, 1 think.
Mr. Kennedy. Did you buy a Mercury cruiser in 1957 also?
Mr. Conroy. Yes, sir.
Mr. Kennedy. How did you pay for that ?
Mr. Conroy. I paid cash.
Mr. Kennedy. How much did you pay in cash for that ?
18602 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr.CoNROY. $2,000.
Mr. Kennedy. Where did you get that cash ?
Mr. CoNROY. I have money.
Mr, Kennedy. Where did you have that cash ?
Mr. CoNROY. Well, I am not going to tell my secret hiding place^
but I have money.
Mr. Kennedy. That is $4,000 in cash that you had in 1957. I am
just trying to find out where it came from.
Mr. CoNROY. I am sure, Mr. Kennedy, that the $2,000 for the trip
to Hawaii came out of the bank.
Mr. Kennedy. The bank's records don't show that it came out of
the bank. The bank's records would show it. We made an examina-
tion. The only withdrawal that you had from your bank account
during the years that we looked at it was one withdrawal for $50.
Mr. CoNROY. No, sir. There is an error someplace. Mrs. Conroy
went to the bank and got the money. That is what she told me. I
never see these books. They are Mrs. Conroy's books.
Senator Mundt. Could she have had the money in a safety deposit
box?
Mr. CoNROY. Yes ; she has one.
Senator Mundt. Could she have gotten it out of the safety deposit
box maybe ?
Mr. CoNROY. I wouldn't know. She told me she got it out of the
bank.
Senator Mundt. It would be out of the bank either way.
Mr. CoNROY. That is the reason I brought the books down. I
brought them down and turned them over to Mr. Kennedy.
Senator Mundt. If it came out of the bank, the bank's records would
show it. If you are $2,000 ahead and the bank is $2,000 in the hole^
that doesn't happen very often. That isn't the way they run a bank.
I am trying to be helpful. If she had a safety deposit box, that
would be the bank, and she would get the money out of the bank.
Would she have it in a safety deposit box ?
Mr. Conroy. It is possible.
Senator Mundt. Could you find out from her ?
Mr. Conroy. I was under the impression
Senator Mundt. I say, could you find out from her ?
Mr. Conroy. Yes.
Senator Mundt. It doesn't look very sensible the way you have it
in the books now. I want to get it straightened out.
Mr. Conroy. She is the boss of the dole, like everybody else's wife.
Senator Mundt. Well, I wouldn't ar^ue about that. But I am try-
ing to help you out. Now you are telling us something which under
oath I believe you think is the truth.
Mr. Conroy. I did.
Senator Mundt. But the books from the bank don't bear out your
testimony. It doesn't show that you made the withdrawal. If you
could find out from your wife if she took it out of a safety deposit
box, that would still be taking out of the bank. The box would be
IMPROPER ACTIVITIES IN THE LABOR FIELD 18603
in the bank. I tliink you should find out from her and put it in the
record as part of your testimony.
First Federal Savings & Loan Association of East Chicago,
East Chicago, Itid., June 11, 1959.
Robert Kennedy,
Attorney, Senate Labor-Management Committee,
Washington, B.C.
Dear Mr. Kennedy : This is to certify that on July 15, 1957, a withdrawal in
the amount of Two Thousand and no/100 ($2,000.00) Dollars was personally
made from Savings Account No. 306 by Cora Conroy. This account is owned
jointly by Walter Conroy and Cora Conroy.
On the same date a money order was purchased in the amount of Two Thou-
sand Fifty-nine and 79/100 ($2,059.79) Dollars by Walter D. Conroy and made
payable to Kelso Travel Bureau, Inc.
First Federal Savings & Loan Association of East Chicago,
By Chester Wlekinski, President.
State of Indiana
County of Lake, ss:
Subscribed and sworn to before me, a notary public, this 11th day of June 1959.
[seal] Stephanie Obeemski, Notary Public.
My commission expires August 5, 1959.
Mr. Conroy. I am going to find out where she got the dough.
Senator Mundt. All right.
Mr. Kennedy, The $2,000 that you had, did you keep that at home?
Mr. Conroy. Yes, sir.
Mr. Kennedy. Did you have a box at home that you kept it in ?
Mr. Conroy. I have a place at home to keep it.
Mr, Kennedy. In 1956 you purchased a Ford. Did you purchase
that with cash, too ?
Mr. Conroy, In 1956, 1 think that was a trade-in on a smashup.
Mr, Kennedy, You also paid cash, $1,250.
Mr. Conroy. Possibly. If you have the record, that is it.
Mr, Kennedy. Did that come from your box, too ?
Mr. Conroy. Yes. It either came from the box at home or maybe
it came out of the safety deposit box, I don't know.
Mr. Kennedy. You do a considerable amoimt of your business in
cash, Mr. Conroy ?
Mr. Conroy. Yes.
Mr. Kennedy. Does that all come out of this box ?
Mr. Conroy, No. Mrs. Conroy has money, too.
Mr. Kennedy. Does she keep it in her own box at home ?
Mr. Conroy. Well, 37 years I am married to that woman, I can't
find it. But she has got it.
Senator Mundt. Mr. Conroy, does your wife have an occupation of
her own or employment of her own, a source of income of her own ?
Mr. Conroy. No. She has never worked since we were married.
Senator Mundt, How does she get this money? She must get it
from you.
Mr. Conroy. No ; she doesn't get it all from me. She has a mother
who is 80-some years of age, who is worth a considerable amount of
money.
Senator Mundt. So she does have another source of income besides
yourself ?
18604 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. CoNROY. No; I wouldn't say it was income. I would say any-
thin<y she wanted — she is the only child in the family and she only has
to cry and her mother would do anything in the world for her. Me,
too.
Senator Mundt. I am trying to find out. Your wife does have
another source from which she can get some money in her box other
than your salary check ; is that right ?
Mr. CoNROY. That is right.
Senator Mundt. Your testimony is that on occasion her mother
probably gives her some money ?
Mr. CoNROY. Probably, yes. She never tells me if she gets it.
Senator Mundt. No. It is none of your business.
Mr. CoNROY. That is right.
Senator Mundt. OK.
The Chairman. Is there anything further ?
Mr. Kennedy. That is all.
The Chairman. All right. Thank you. You may stand aside.
Call the next witness.
Mr. Kennedy. Mr. Holovachka.
The Chairman. Mr. Holovachka, come forward.
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. Holovachka. I do.
TESTIMONY OF METRO M. HOLOVACHKA
The Chairman. State your name, your place of residence, and your
business or occupation, please, sir.
Mr. Holovachka. My name is Metro Holovachka. I live at 7321
Oak Avenue, Gary, Ind. I am a practicing attorney and the chief
deputy prosecuting attorney of Lake County, Ind., at the present time.
The Chairman. You previously served as prosecuting attorney?
Mr. Holovachka. From January 1, 1953, to and including Decem-
ber 31, 1958.
The Chairman. And since 1958 — what date did you say? Since
that time you have been chief deputy prosecuting attorney ?
Mr. Holovachka. That is correct, sir.
The Chairman. How long have you been a practicing lawyer?
Mr. Holovachka. Twenty-three years.
The Chairman. Thank you very much.
Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Holovachka, we have had some testimony here
in connection with, first, the operations of local No. 1, Mr. John Testo,
and the difficulties that he encountered in 1953, 1954, and 1955, and
later, which ultimately led to the extinction of the union, local No. 1,
I believe in 1957.
We have also had the testimony that there was concerted effort
made to drive some of the independent operators out of business so
that
Mr. Holovachka. Pardon me. I don't want to interrupt, Mr.
Kennedy, but can I handle this Testo situation, and tell you about
Mr. Testo at this time ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18605
Mr. Kennedy. I haven't asked a question yet. I am just giving
you background.
The testimony that we have had is that there was a concerted effort
made to drive some of the independent pinball operators out of busi-
ness; that this was made on behalf of an operation which was run by
Mr. Sohacki and Mr. Welbourn ; and that they, in turn, made some
gigantic profits during that period of time, due to tlie fact that they
were able to get a monopoly — wait a minute
Mr. HoLOVACHKA. Pardon me, Mr. Kennedy. Are you putting a
question to me, or is this a statement ?
There are too many parts for me to that question
Mr. Kennedy. I haven't completed the question. I will give you
the question in a moment.
The Chairman. Wliat he is doing is reviewing the evidence that the
committee has heard to give you the background, so that when the
question is asked, you will know the context in which it is presented.
Mr. HoLOVACHKA. Thank you. Senator.
Mr. Kennedy. And we have had testimony that they have been
able to get a monopoly control of the pinball operation in Lake
County, except for a couple of communities, and that they have been
helped or assisted in this by representatives of your office, namely Mr.
Conroy. We have also had testimony before the committee that you
spent, in connection with the erection of your home in 1954-55, some
$43,000 in cash.
I would like to ask you in connection with our investigation where
this cash came from, what the source of the cash was which was in the
form of $10 and $20 bills.
Would you give that information to the committee, please ?
Mr. HoLOVACHKA. Although it is my legal opinion that I am not
compelled to answer under the law any questions not pertinent to the
scope of the resolution, I do, however, believe that I have a moral obli-
gation as the former prosecutor of Lake County to answer to the citi-
zens of Lake County, as well as my friends, to give answers to the
vicious charges reflecting upon my community as well as upon my
personal integrity, character, and reputation, by the press as well as
before this committee, said charges having been made by inference,
innuendo, insinuation, hearsay, and questions which are leading and
suggestive of an answer, which would not be permitted in any court
in our great country, as Mr. Robert Kennedy well knows.
I am willing to cooperate with the committee on all matters per-
taining to the extent to which criminal or other improper practices or
activities are or have been engaged in in the field of labor-management
relations, or in groups or organizations of employees or employers, to
the detriment of the interest of the public, as well as any questions
pertaining to any purported rackets in Lake County, Ind.; but not
upon matters which otherwise are contrary to law.
T would like to make a
The Chairman. Just a moment. May I inquire of the witness?
Do you have a prepared statement that you wish to read 'i
Mr. HoLOVACHKA. No, Senator. I do not have a prepared state-
ment. I have some notes which I have made here, and I have an ob-
jection that I would like to make at this time.
The Chairman. The Chair will hear you. Proceed.
18606 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. HoLovACHKA. I must respectfully object to answering the ques-
tion for the reason that the question, as well as the information sought
to be elicited by the question, is beyond the scope of the resolution
creating this committee. It is beyond the scope of authority and
power granted by said resolution. The resolution creating this com-
mittee is too indefinite, uncertain, and encompasses matters beyond
the legislative powers of Congress.
Furthermore, there is no indication of the pertinency of the ques-
tion nor the answer sought to be elicited within the scope of the au-
thority granted by the Senate.
A congressional committee does not possess the power to examine
private citizens indiscriminately in a mere hope of stimibling upon
valuable information. Before a question is deemed to be pertinent
to question under inquiry by a congressional committee, it must be
established that the material sought or the answers requested related
to a legislative purpose which Congress could constitutionally en-
tertain, and that such material or answers fell within the grant of
authority actually made by Congress to the investigating committee.
The Chairman. Just a moment. Are you reading a brief on the
point you raise ?
Mr. HoLOVACHKA. Your honor — pardon me, I am accustomed to
speaking in court. Senator, this is a legal objection, and I feel that
I have a right to make a legal objection.
The Chairman. You have a right to make a legal objection, and
the Chair is going to indulge you for that purpose. I am just trying
to ascertain whether you have a brief there that you are making an
argument from.
Mr. HoLOVACHKA. No. Tills is my legal objection. Senator.
The Chairman. All right. May I say this to you, before we pro-
ceed further : The Chair, and I am sure every member of the commit-
tee, is fully aware of the functions of this committee, what it was
established to do, its authority, its prerogative, and, in fact, its duty
if it is to meet the task with which it is charged in the resolution. I
don't want to deny you any right to wliich you are entitled. I want
to grant you eveiy proper consideration.
Mr. HoLOVACHKA. Thank you, Senator.
The Chairman. But I am going to ask you to be brief.
Mr. HoLOVACHKA. Congress is not permitted to expose, only to
embarrass, and courts must find presence of valid purpose relating to
lawmaking to justify compelled disclosure.
The power of Congress exists only to the extent to which such power
is necessary to preserve and carry out legislative authority given, and
that Congress has no general power of making inquiry into private
affairs of citizens ; for the further reason that the question and answer
sought to be elicited are in violation of the legal rights of this witness
as set out by the Supreme Court in the case of Watkins v. United
States-, for the further reason that the question and answer sought
to be elicited are in violation of the witness' rights under the fourth
amendment of the Constitution of the United States pertaining to
privacy and imlawf ul searches and seizures.
The subpenas served upon this witness are so broad, vague, and
indefinite, that it would appear the investigators who had prepared
the same were merely on a fishing expedition, and said subpenas are
illegal and contrary to law.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18607
Tlie witness lias not been properly informed of tlie object of the
inquiry and would appreciate being advised as to the specific subject
of your inquiry today so that I may judge which of your questions
are pertinent.
The Chairman. All right. At that point the Chair will place in
the record the telegram.
May I ask this, while I am waiting for the telegram, on the basis
of the objection you raise, particularly with respect to your last state-
ment that you are not advised as to the nature of this investigation,
may I ask you if you had counsel for a wliile, consulting with him
about your rights and your appearance here before this committee?
Mr. HoLOVACHKA. Senator, I went in to see Mr. Rauh, if that is
what you have reference to, and it was particularly with respect to
the Watklns case. At that time, I conferred with him pertaining to
the laws under which these congressional committees are governed.
At that time he had made an appointment with Mr. Kennedy. I
was to meet with Mr. Kennedy. I would have met with Mr. Ken-
nedy except in the meantime, Mr. Kemied;;; came to my community
and while in Gary announced that he was going to have this investiga-
tion, and it was going to be a dramatic and spectacular one, and that
I was to be a witness at the investigation.
And for that reason, I felt that I was being a whipping boy through
the aid of Arnold Koontz of the Gaiy Post-Tribune here, who has
persecuted me for a period of 7 years. I felt I could achieve notliing
or accomplish nothing by meeting with Mr. Kennedy at that time.
I did not meet him. My counsel did not approve of my action.
Therefore, I did not meet with Mr. Kennedy. It was for this reason
that I didn't meet.
The Chairman. We understood that he was representing you, and
he so advised me. We undertook to cooperate and work out a meet-
ing so that you might discuss these things in detail with comisel before
your appearance. After you declined to appear, the Chair sent you
a wire. I am sending for a copy of it.
In that wire, I advised you of the nature of some of the matters
involved in the investigation.
While we are waiting for the telegram, the Chair will make this
statement : Those who read the record, certainly, who may have any
legal responsibility in connection with it, will take judicial notice
of what the resolution establishing the committee provides. The
duty imposed upon the committee includes the investigation of im-
proper practices in labor or management relations. In this case,
as the counsel has summarized, and the Chair was not here at all of
the hearings but I was here at part of them, and particularly with
respect to the testimony that there was established a union, a labor
organization, the membership of which was composed of people who
either owned or who worked on or worked for those who operated
and kept in their place of business these pinball machines.
That union was established. According to testimony that came
before this committee, there then moved into that area, into the Gary,
Ind., community, some outsiders, I believe from Chicago — am I right,
Mr. Counsel?
Mr. Kennedy. At least one of them was from Chicago, and then,
Mr. Chairman, not only in the pinball operations, but the other opera-
18608 IMPROPER ACTIVITIES IN THE LABOR FIELD
tions in Gary, bringing in outsiders from both Chicago and Los
Angeles, or Los Angeles.
The Chairman. At any rate, they moved in from outside and under-
took to compete with the so-called independent machines which, in
that instance, were machines that were under the union, or where
the union had membership operating them and working on them, and
they were successful in that they succeeded in putting the union out
of business.
The testimony further shows that your chief investigator, the wit-
ness who just preceded you on the witness stand, went to a number of
these places where they had machines and ordered them taken out
and, in fact, did remove some of them, as he testified here today,
because they were the wrong machines in that they did not belong to
the so-called syndicate that was taking over. Through your office,
with the help of your office, they were able, it appears, to establish
a monopoly in this operation, in this business there, to the extent that
their income during the past 5 or 6 years
Mr. Kennedy. Five years ; a 5-year period.
The Chairman. During the past 5-year period has exceeded some
$12 million. That has been, according to the testimony, certainly
one of the strong implications of its has been, done by reason of the
assistance provided by your office in an official way.
Otherwise they possibly could not have succeeded in doing it. The
independents were prohibited from running, whereas they seemed to
have your blessings. That is the statement of fact that this record
substantiates and it is on that basis, for that purpose, that you are
here being interrogated and given an opportunity, if it is untrue, to
simply refute it.
I hope you will cooperate. I think I agree with what you said.
You owe it to the community out there, with all of these implications,
if you want to just call them that, you owe it to your community and
to your people to come here under oath and make a full and complete
statement about it.
I hope you will do it. Your motion is overruled. Proceed.
Mr. Kennedy. On July 1, 1955, $4,500 was paid to Mr. George Drag
for home construction in $20 bills. I would like to find out specifi-
cally, where did the $20 bills come from ?
Mr. HoLovACHKA. Shall I read the same objection again pertaining
to my private or personal affairs ?
Mr. Kennedy. Why don't you just give us the answer? Give this
committee the answer.
Mr. HoLOVACHKA. Mr. Kennedy, I don't believe that this committee
has a right to go into my private or personal affairs, but I will say
this to you : Not one dime of it came from any racketeer.
The Chairman. Just one moment. The Chair overlooked placing
in the record the telegram of June 1, which the Chair sent to Mr.
Holovachka. It will be printed in the record at this point.
I will ask you to examine it, Mr. Holovachka, and state if you
identify it, if you received the original.
(The document was handed to the witness.)
Mr. Holovachka. Yes, sir; I received this telegram, sir.
The Chairman. It will be placed in the record at this point.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18609
(The telegram referred to follows :)
Mr. Metro M. Holovachka,
111 Gary National Bank Building,
Gary, Ind.:
Subsequent to receipt your letter May 16, Counsel Kennedy had discussed
subject matter with you in telephone conversations ; also with your Washington
attorney, Mr. Joseph Rauh, with whom he had arranged for a personal con-
ference at which you, Mr. Rauh, and himself would be present. This con-
ference was agreed to by you, according to your attorney. However, before
time for the conference you advised you would not attend.
It was hoped at that conference that satisfactory agreement could be reached
regarding production of documents and materials subpenaed from your files.
You therefore leave us no opporunity except to proceed without your cooperation.
As has been explained to you and your attorney, and as you know, the com-
mittee is inquiring into improper activities in the labor or management field.
It is specifically interested in Lake County, Ind., where it has information that
local No. 1 of the Coin Operators & Repairmen's Union was opposed by certain
outside racketeering elements which led to its ultimate dissolution.
From information the committee has it is indicated that certain law enforce-
ment officers, including representatives of your office, cooperated with and
supported the effort to create a monopoly in the coin machine business in the
Lake County area and, simultaneously, efforts were made to destroy or bring
about the dissolution of local No. 1. We are interested in developing that
situation.
P'or some months now the staff has been attempting to obtain from you an
explanation as to the large amounts of cash during that period of time which
have either been deposited in your bank account or used by you. This explana-
tion you have refused to give.
If there was conspiracy between you personally or your office and a gangster
or racketeering element to put local No. 1 out of business or to establish a
monopoly in the coin-machine business, the committee has a right to know. Its
jurisdiction in this field is clear and emphatic. Surely as a public official
whose duty is to enforce as well as to observe the law, you .should be willing
to cooperate with a congressional committee charged with the responsibility
of inquiring into improper practices in labor-management relations.
Information of a derogatory nature regarding your activities will be developed
beginning Tuesday afternoon, June 2. You are invited to attend and testify
immediately if you see fit to do so. However, in connection with the subpenaes
served upon you, you are ordered to produce the documents requested and to
testify at the hearings on Friday, June 5, 1959.
John L. McClellan,
Chairman, Senate Select Committee on Improper Activities in the Lahor
or Management Field.
The Chairman. One other statement the Chair possibly overlooked
making, that you should have information about before you proceed
to answer, is according to the information the committee has from
the investigation made by its investigators, its professional staff,
and other evidence before the committee, during the course from 19 —
well, from the year 1953, beginning in January 1953, at which time
you became a chief deputy prosecutor — is that correct?
Mr. Holovachka. No, sir. I became prosecuting attorney.
The Chairman. You became the prosecutor ?
Mr. Holovachka. Y es, sir.
The Chairman. Beginning in January 1953, through December
1958, according to the investigations of this staff, you handled
$263,000 in cash, not including checks and so forth, that went through
your bank account. For that reason, in view of the other statement
I made, the committee is interested in knowing whether there is any
improper practice or any crime committeed in connection with the
securing of a monopoly in this pinball machine industry and in
18610 IMPROPER ACTIVITIES IN THE LABOR FIELD
driving out of business or causing the liquidation of a labor union
organization.
(At this point Senator Mundt withdrew from the hearing room.)
The Chairman. That is more background and that is the reason
for interrogation.
Mr. Kennedy, interrogate him about these funds. Proceed.
(At this point Senator Church entered the hearing room.)
The Chairmak. If you want to object, you may object. It will
not be necessary for you to read that whole statement again each time.
Mr. HoLOVACHKA. The objection, do you mean ?
The Chairman. If you want to object on the basis of what you
have in that statement, simply say, "I object on the basis of this state-
ment which I have filed," and I will let you file that statement so
there will be no question about the exact wording of it.
Mr. HoLovACHKA. Thank you. Senator.
The Chairman. Proceed.
Mr. Kennedy. Let's go back to when you became public prosecutor,
Mr. Holovachka. On January 15, 1953, you deposited in your bank
account $250 in cash. "V\niere did that come from ?
Mr. Holovachka. I object on the basis of the statement that I
previously read.
The Chairman. Do you object on the ground that a truthful answer
thereto might tend to incriminate you? I want to get the record
clear.
Mr. Holovachka. No, sir.
The Chairman. Then the Chair, with the permission of the com-
mittee, orders and directs you to answer the question.
Mr. Holovachka. I refuse to answer on the basis of my objection.
The Chairman. The order and direction of the Chair, with the
approval of the committee, will continue to abide with you until you
leave this witness stand.
Proceed.
Mr. Kennedy. Mr. Chairman, before I go on and ask him some ques-
tions about this currency that has been available to him during this
period of time, I would like to have permission to put into the record
the background information that we have to substantiate my questions.
The Chairman. Call your witness.
Mr. Kennedy. Mr. Sinclair and Mr. Thiede.
The Chairman. The Chair, while you are calling these witnesses,
may further state, as I am sure the witness knows, that the Congress
is now in process of undertaking to legislate in this field. The work
of this committee, what it has developed, the record it has made in the
course of these public hearings and investigations, has become and is
today the basis for legislation now pending in the Congress.
The Chair will further state that if it is established in this instance
or in any other instance that a labor union has been put out of busi-
ness by reason of a conspiracy, by reason of bribery, or by reason of
the unlawful cooperation of public officials, it may be of interest to the
Congress to try to find legislation to prevent a recurrence of such
action.
Mr. Holovachka. Senator, may I tell you about this union and
about Mr. Testo?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18611
The Chairman". If you will answer the question. But you say we
have no jurisdiction. We have no jurisdiction over voluntary state-
ments if we liave no jurisdiction over that which we seek to find out.
We will keep it that way.
When you are ready to talk and answer the questions, then you may
make the voluntary statements with respect to those points in your
favor.
Mr. HoLOVACHKA. Mr. Kennedy had announced over the radio the
other day that I would be permitted to answer any statements made by
any witnesses before this committee.
The Chairman. You will. We are giving you a chance to answer
some of them now.
Mr. IIoLovACHKA. Tliesc don't pertain to labor, Senator.
The Chairman. We are trying to keep it as near to the labor and
business elements in it as we can.
Proceed with this witness. Maybe Mr. Holovachka will get the
point as we go along.
Mr. Kennedy. I am sure he will. I am sure he will want to answer
these things.
The Chairman. Proceed.
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
Mr. Kennedy. Mr. Sinclair, what do we find as far as the cash trans-
actions of Mr. Holovachka? As I understand it, these are trans-
actions which are completely apart from any check transactions.
The Chairman. Has this witness been sworn ?
Mr. Sinclair. Yes, Senator ; I have.
The Chairman. You have been previously sworn and identified as
a member of the committee staff or working for it out of loan from
the General Accounting Office ?
Mr. Sinclair. Yes, sir.
The Chairman. Has his background and his experience been placed
in the record ?
Mr. Kennedy. It has.
The Chairman. All right. Proceed.
Mr. Kennedy. Mr. Sinclair, you ajid Mr. Thiede have gone back,
starting in the year 1951 when Mr. Holovaclika began to work for
the government ; is that right ?
Mr. Sinclair. Yes, sir ; we have.
Mr. Kennedy. For the State and local government?
Mr. Sinclair. That is right.
Mr. Kennedy. Prior to that, fi'om 1945 up through 1950, Mr. Holo-
vachka had practiced law in Indiana ?
Mr. Sinclair. That is right.
Mr. Kennedy. What had been his income prior to the time that he
began to work with the State ?
Mr. Sinclair. By year, Mr. Kennedy ?
Mr. Kennedy. In round figures, by year.
Mr. Sinclair. Less than $5,000 for the years 1945 through 1950.
Mr. Kennedy. Just give it to us each year.
Mr. Sinclair. 1945, his income was $4,649.38.
Mr. Kennedy. Just round it off.
18612 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Sinclair. 1946, $4,000; 1947, $4,900; 1948, $2,700; 1950, $2,400;
19—1 am sorry. That was 1949, $2,400 ; 1960, $3,300.
Mr. Kennedy. So for the 2 years prior to the ones we are inter-
ested in, 1949, how much did he declare in 1949 ?
Mr. Sinclair. 1949, $2,400.
Mr. Kennedy. And 1950 ?
Mr. Sinclair. $3,300.
Mr. Kennedy. $3,300? ^
Mr. Sinclair. That is right.
(At this point Senator Mundt entered the hearing room.)
Mr. Kennedy. Then he started to work in 1951 for whom?
Mr. Sinclair. In 1951 he served as special deputy prosecutor to the
Lake County prosecutor.
Mr. Kennedy. Mr. Holovachka, is that correct, so far ?
Mr. Holovachka. I have stated my objection pertaining to my per-
sonal affairs and I stand upon this objection pertaining to anythmg
outside the scope of this committee's authority.
Mr. Kennedy. What do we find after he became assistant public
prosecutor ? How much in cash did he handle in 1951 ?
Mr. Sinclair. In 1951 his total cash was $7,237.
The Chairman. Let's get this record so we understand it as we go
along. When you talk about cash, you are not talking about money
in a bank and checks, the accounts of that character; this is cash out-
side of a bank account ; is that correct ?
Mr. Sinclair. Senator, this cash or cash amounts are cash deposits
in the bank or cash expenditures that we cannot identify as having
been withdrawn from the bank.
The Chairman. In other words, when you speak of cash, it is cash
that he deposited in a bank rather than a check ?
Mr. Sinclair. That is correct, sir.
The Chairman. And it is cash that he spent that didn't come out
of the bank and that was not represented by check ?
Mr. Sinclair. That is correct, sir.
The Chairman. All right.
Mr. Kennedy. In 1952, what position did he hold ?
Mr. Sinclair. In 1952, he was comptroller for the city of Gary.
Mr. Kennedy. How much cash went through his bank account, cash
transactions that we have been able to trace ?
Mr. Sinclair. $57,373 cash that went through his account at that
time.
Mr. Kennedy. This is the year he started working as comptroller
for the city of Gary ?
Mr. Sinclair. As comptroller for the city of Gary ; that is right.
Mr. Kennedy. How much did he declare on his income tax returns
for that year ? Have you that ?
Mr. Sinclair. Yes, we do. For 1952 he declared $8,591.
Mr. Kennedy. Yet we have been able to show cash transactions of
deposits in his bank accounts and other cash transactions of $57,000-
plus?
Mr. Sinclair. That is right.
Mr. Kennedy. How about 1953, when he became public prosecutor?
Mr. Sinclair. In 1953, $18,315 was the total amount of cash that
went through his account.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18613
Mr. Kennedy. Wliat about 1954 ?
Mr. Sinclair. 1954 was $46,283.75.
Mr. Kennedy. 1955?
Mr. Sinclair. 1955 was $55,000.
Mr. Kennedy. 1956?
Mr. Sinclair. 1956 was $51,000.
Mr. Kennedy. 1957?
Mr. Sinclair. $57,000.
Mr. Kennedy. And 1958 ?
Mr. Sinclair. $33,000.
Mr. Kennedy. Making a total for 1951 through 1958 of $327,000-
plus cash ?
Mr. Sinclair. $327,000-plus in cash.
Mr. Kennedy. And the subtotal for 1953 through 1958, since he has
been with the public prosecutor's office, he handled $2'63,000 in cash?
Mr. Sinclair. That is correct.
TESTIMONY OF METRO M. HOLOVACHKA— Resumed
Mr. Kennedy. Can you give us some explanation for that, Mr. Holo-
vachka ?
Mr. HoLovACHKA. I have made my objection. You are going into
my personal affairs. It is beyond the scope of this committee. I
want the entire objection to stand.
The Chairman. Just a moment. The Chair wishes to admonish
the witness that the Chair holds, and I believe the committee will
sustain him, that it is pertinent to this inquiry, particularly when
we are looking into the destruction of a union and the building up
of the monopoly in a business, to inquire where excessive sums of
money apparently come from, the source of them, with respect to a
public official who had a duty to perform in connection with law en-
forcement, and where the testimony indicates, if it does not clearly
establish, the fact that such official cooperated with, conspired with,
certain interests to establish such a monopoly and to drive such union
out of business.
The unprecedented amount of funds, the excessive amount of funds
over and above the emoluments of the office which you held, become
a matter, of course, of legitimate curiosity, and we are inquiring into
them.
Again I refer you to the statement which you made in the begin-
ning, that you owed a moral duty to your people back home to make
explanation of it.
Mr. HoLovACHKA. Senator, I feel honestly that I do owe a moral
duty. But I don't believe that anyone can say that I should disclose
my personal financial affairs any more that it can be expected of any
Senator in the U.S. Senate.
Certainly, I am satisfied that the Senators have substantial in-
comes and deal financially. But the public is not entitled to know
those things, and I as a public official
The Chairman. I think they are sometimes. I am not questioning
that. It is not for you here to try to divert this investigation into
what you think other people may be doing. That will not be per-
mitted. But I am not arguing
36751 — 59— pt. 53 13
18614 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. HoLovACHKA. Excuse me, Senator.
The Chaieman. I am not arguing who has the duty immediately
and who does not have. I have some ideas. I have the idea they do
have the responsibility if they have excessive income without any
known legitimate source for it.
I think under the same circumstances they would have the same
duty that you have right now, to clarify it if there is any clarification
available for it.
The Chair is going to order you to answer the question.
Proceed, Mr. Kennedy, and ask him a direct question.
Mr. Kennedy. Take, for instance, in 1952, Mr. Holovachka, July
8, 1952, $15,800 in cash. Could you explain to the committee where
that came from ?
Mr. Holovachka. I coidd, but I stand upon my legal objection.
Mr. Kennedy. Then the next month
The Chairman. Just a moment. You say you could. Then the
Chair orders and directs you to make explanation of it. I do that
with the approval of the committee.
Mr. HoLOVACHitA. I must respectfully object to answering the ques-
tion, and I will read the same objection.
The Chairman. You need not read it. It may be considered read
for the purpose of the record.
Mr. Holovachka. I stand upon that objection.
The Chairman. The order of the Chair, of the committee, for you
to make explanation of this still stands, and it will remain with you
during the course of your testimony.
Mr. Holovachka. I have no recollection of that specific item.
The Chairman. How much was that item ?
Mr. Kennedy. That was $15,800.
The Chairman. You now state under oath you have no recollec-
tion of that item.
All right. Proceed, Mr. Kennedy.
Mr. Kennedy. I will bring it up a little more in advance to the
time this union was destroyed, Mr. Chairman.
Take it up, for instance, to 1956. February 8, 1956, $5,000 in $20
bills.
Mr. Holovachka. I stand upon my legal objection. Senator.
The Chairman. In each instance, the Chair, with the approval of
the committee, is ordering and directing you to answer the question
and give explanation of these moneys.
Mr. Holovachka. I stand upon my legal objection.
The Chairman. All right. Does the same thing apply in this in-
stance as in the other? You could, but you will not, because you
object?
Mr. Holovachka. I did not say that I could, Your Honor.
The Chairman. Just a moment.
Mr. Holovachka. Senator, I stand upon my legal objection.
The Chairman. I don't think we have to go into that. The record
speaks for itself. My recollection is you said you could, but you
would not.
All right. The record speaks for itself. Proceed.
Mr. Kennedy. February 25, 1956, some 2 weeks later, $2,000 in $20
bills.
I
IMPROPER ACTIVITIES IN THE LABOR FIELD 18615
The Chairman. "VVliere ?
Mr. Kennedy. Mr. Chairman, we have made a detailed study of this
situation.
The Chairman. Have you someone who can identify it ?
Mr. Kennedy. Mr. Sinclair can identify it.
TESTIMONY OF RICHAKD G. SINCLAIR— Resumed
The Chairman. Mr. Sinclair, have you made a compilation of the
cash money about which you have testified in total amounts, of this
witness' income and expenditures covering the period from 1951
through 1958?
Mr. Sinclair. We have. Senator.
The Chairman. Do you have a copy of that compilation before
you?
Mr. Sinclair. Yes, sir ; I do.
The Chairman. That compilation may be made exhibit No. 8 at
this point. The witness may be furnished a copy of it.
(Document referred to was market "Exhibit No. 8" for reference
and may be found in the files of the select committee. )
The Chairman. Mr. Holovachka can refer to any item as it may
be mentioned.
Proceed, Mr. Kennedy.
Mr. Sinclair, you state that the compilation of these accounts and
these amounts are true to the best of your knowledge and belief ?
Mr. Sinclair. They are, Senator.
The Chairman. You are not necessarily claiming, as I understand
it, that these constitute all, but this much you have found ?
Mr. Sinclair. That is correct. We know that it doesn't constitute
all.
The Chairman. You know it does not constitute all ?
Mr. Sinclair. Yes, sir.
The Chairman. But this much you have been able to find ?
Mr. Sinclair. Yes, sir. Senator.
Mr. Kennedy. That is because, of course, Mr. Holovaclika would
not furnish a considerable number of his records to the committee.
Mr. Sinclair. That is correct.
TESTIMONY OF METRO M. HOLOVACHKA— Resumed
Mr. Kennedy. Let us take it up to 1958, Mr. Holovachka, and
maybe you can give us some information on that.
On September 10, 1958, $3,000 in currency. Could you tell us
where that came from ?
Mr. Holovachka. I will stand upon my legal objection.
The Chairman. The Chair, again with the approval of the com-
mittee, orders and directs the witness to answer the question.
Mr. Holovachka. I will stand upon my legal objection.
The Chairman. The order and direction will continue throughout
the giving of your testimony.
Mr. Kennedy. That is $33,000 in cash in 1958 alone that Avent
through your bank accounts, and was used by you in other ways.
Could you give us any explanation of any of it ?
Mr. Holovachka. I stand upon by legal objection, sir.
18616 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Will you give us any explanation of the $58,000 in
cash that you used in 1957 over and above your regular transactions?
Mr. HoLOVACHKA. I stand upon my legal objection.
The Chairman. The Chair again in each of these instances orders
and directs the witness with the approval of the committee, to make
explanation if he can of these accounts.
Now, are you saying that you cannot, or that you don't remember,
or are you simply saying irrespective of whether you do or don't
remember, you are invoking your objection
Mr. HoLOVACHKA. I am saying. Senator, that the Supreme Court
of the United States and the laws of our country do not require me
to make these disclosures, and for that reason I have no intention of
making disclosures pertaining to my private affairs.
The Chairman. I wish to thank you, because that makes the record
absolutely clear. You are simply challenging the jurisdiction and
authority of the committee to get an explanation of these excessive
amounts of funds or moneys that you received while an officer charged
with the enforcement or carrying out of public duties, the integrity
of which are here in a sense being challenged.
Mr. HoLOVACHKA. Anyone who knows me does not question my
integrity, Senator.
The Chairman. I have said from the record here, the integrity of
which is in effect being challenged.
Mr. HoLOVACHKA. No, sir; I am not questioning the integrity of
anything.
The Chairman. I didn't ask you to question it. I made that a
statement of fact. Proceed.
Mr. Kennedy. How about in 1957? Do you remember Christmas
in 1957? The day after Christmas you deposited $7,000 in $20 bills,
in cash, all in $20 bills. Would you tell the committee about that?
Mr. HoLOVACHKA. I stand upon my legal objection.
Mr. Kennedy. That is Christmas, or the day after Christmas of
1957.
Mr. HoLOVACHKA. I heard you, Mr. Kennedy.
Mr. Kennedy. Would you tell us about that, the 26th of December?
Mr. HoLOVACHKA. I stand upon my legal objection.
The Chairman. The Chair, with the approval of the committee,
orders and directs the witness to state whether he has an explanation
of this money.
Mr. HoLOVACHKA. I will say to you. Senator, one thing, that not
one dime of it came from labor in any way, and not one dime of it
came from any racketeer.
The Chairman. That is excellent,
came from ?
I think I will order and direct you now to state who it did come
from. You have volunteered the information that it did not come
from racketeers and it did not come from labor, and now I think
that you have made yourself obligated in spite of your challenge of
the committee's jurisdiction. I think you have waived any lack of
jurisdiction if there could possibly be such holding by just gratui-
tously making a statement that it didn't come from a racketeer or
didn't come from labor. So now we would be very glad to receive a
truthful explanation of the source of it.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18617
Mr. HoLOVACHKA. I stand upon my legal objection, Senator.
The Chairman. Again the Chair, with the approval of the commit-
tee, orders and directs you to state the source of it.
Mr. HoLOVACHKA. I stand upon my legal objection.
The Chairman. Proceed.
Mr. Kennedy. I refer you to the purchase of Barrett Bonds on Jan-
uary 8, 1957, $9,940, all in tens and twenties. Could you tell us about
that?
Mr. HoLOVACHKA. I again stand upon my legal objection.
Mr. Kennedy. Now, there was $57,000 in 1957, in transactions sim-
ilar to that. Could you tell us where you got that cash ?
Mr. HoLOVACHKA. I stand upon my legal objection.
The Chairman. Mr. Witness, you have before you, have you, a copy
of exhibit No. 8?
Mr. HoLOVACHKA. Yes, I do. Senator.
The Chairman. You see there before you the exhibit which consists
of, I believe, nine pages. The first page on the top of it is identified,
"Metro M. Holovachka: Summary of Cash Transactions, 1951-58,"
and then there is on each page at the top, together wdth identifying re-
marks riglit under it, as to what the figures show.
Is that correct ?
Mr. HoLOVACHKA. That is correct. Senator.
The Chairman. All right, you have it before you.
Now, the Chair again, with the approval of the committee, directs
you to answer questions pertaining to the source of the moneys that
are listed on this exhibit.
Proceed.
Senator Mundt. Mr. Chairman, did I understand that Mr. Sinclair
said with regard to 1952 where this exhibit shows a total cash transac-
tion or income of $57,373.98, that there was a discrepancy between that
and the figure in the income tax report.
Mr. Sinclair. My statement was. Senator, that this was the total
amount of cash that we found going through his account.
Now, he reported substantially less than that amount during the year.
Senator Mundt. Was that just in 1952 or have you examined the
subsequent income tax reports and found similar discrepancies in
those?
Mr. Sinclair. We have found them. We have examined subsequent
income tax returns, and we have found, we believe, there is more money
in Mr. Holovachka's account than has been reported on the tax returns.
Senator Mundt. Mr. Holovachka, you heard what he said, and that
doesn't sound very good. Maybe you can give us some explanation of
why that discrepancy exists.
Mr. Holovachka. Again I say this is going into my private affairs,
Senator Mundt, and I must stand upon my legal objection.
Senator Mundt. I think it is in a little different category here,
though.
Mr. Holovachka. The Internal Revenue Department, Senator, is
checking my returns at the present time, and I am satisfied that I have
reported all of my income.
Senator Mundt. They are checking you ?
Mr. Holovachka. Yes, sir ; and they have been for some time.
18618 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. I am sure that you can't question the curiosity of
a committee of Congress charged with observing the activities of its
various branches, in wondering why the two don't jibe.
As an old prosecutor, I am sure that would stimulate your curiosity
if you were on the other side of the table.
Mr. HoLovACHKA. Perhaps it would, Senator.
The Chairman. Proceed.
Mr. Kennedy. Now, in connection with this document, this group
of documents that has been prepared, where you have a column enti-
tled, "Small bills," included in the total, to what do you refer there?
Mr. Sinclair. Mr. Kennedy, that column covers money that we
were able to identify that was in $20 bills or less, that went through
his account in those denominations.
Mr. Kennedy. So for instance in 1953 to 1958, Mr. Holovachka
deposited in his bank account or spent at least $106,000 in cash in tens
and twenties or less?
Mr. Sinclair. Or less, that is right.
Mr. Kennedy. Where did you get all of these small bills, Mr.
Holovachka ?
Mr. Holovachka. I stand upon my legal objection.
The Chairman. The Chair, with the approval of the committee,
orders and directs the witness to answer the question.
Will you answer ?
Mr. Holovachka. Again I must respectfully object to answering
for the reasons previously stated. Senator, that this is prying into my
personal aff airs, and it is beyond the scope of this committee.
The Chairman. The order and direction of the Chair will stand
throughout the witness' testimony.
Proceed, Mr. Kennedy.
Mr. Kennedy. For instance, can you tell us any explanation of
September 7, 1956, $2,500 in cash, $1,000 wrapped, and $1,000 in
twenties, and $500 in tens. Wliere did you get that ?
The Chairman. What date is that ? :
Mr. Kennedy. September 7, 1956.
Can you tell us where you got that money ?
Mr. Holovachka. The same objection.
The Chairman. The same order and direction of the Chair, for the
witness to answer.
Mr. Kennedy. Now, in the payments on your home, February 11,
1956, $5,000 in tens and twenties; April 13, 1956, $4,500 in twenties;
May 28, 1956, $1,500 in twenties; August 20, 1956, $1,380 in twenties.
That is for a total of $12,380 in $20 bills, $10 and $20 bills. Can
you tell us where you got that for the purchase of your home ?
Mr. Holovachka. The same objection.
The Chairman. The Chair orders and directs you to answer the
question.
With the approval of the committee, the order and direction of the
Chair will continue throughout the witness' testimony.
Mr. Kennedy. Did you use this money for the purchase of your
home?
Mr. Holovachka. The same objection.
Mr. Kennedy. That was for 1956 ; and in 1955 we have another total
of payments on your home of another $28,000 in tens and twenties,
IMPROPER ACTIVITIES IN THE LABOR FIELD 18619
with $4,500 on May 1, 1955, in twenties. On August 1, 1955, $4,500
in twenties. On August 15, 1955, $5,500 in twenties.
Will you tell us where you got tliat money ?
Mr. HoLOVACHKA. As a lawyer ?
Mr. Kennedy. Just as a citizen.
Mr. HoLovACHKA. As a citizen and a lawyer then, Mr. Kennedy,
I make the same objection.
Mr. Kennedy. What about as a public official ?
Mr. HoLOVACHKA. As a public official I make the same objection.
The Chairman. The Chair orders and directs the witness to answer
the question, with the approval of the committee.
That order and direction will continue throughout the witness'
testimony.
Mr. Kennedy. September 9, 1955, $5,000 in twenties; and October 7,
1955, $5,000 in twenties.
November 18, 1955, $5,000 in twenties.
Can you tell us about that, and where did you get that money ?
Mr. HoLOVACHKA. The same objection.
The Chairman. The same order of the Chair.
Mr. I^nnedy. Are there any questions by members of the com-
mittee ?
This is, of course, the key to the situation. We have had the
testimony in connection with what has been done out there in Lake
County, and then we find this public prosecutor who has a responsi-
bility for enforcing the law.
The Chairjuan. I want to ask the witness a question or two.
The testimony here has been as the Chair stated to you, that the
chief investigator of your office, and I believe he testified that he
did it at your direction, would go to certain places and pick up pin-
ball machines.
Did he do that on your instructions and orders ?
Mr. HoLOVACHKA. Let me say to you. Senator, in 6 years I was
prosecutor, I had him remove in excess of 150 machines from different
places. Any time any mother would call up and say the children were
playing the machines, I sent Mr. Conroy out there and asked him to
play the machines, and I asked him to get a payoff on the machines,
and then they were gambling.
Here is the thing: With respect to the legislature, prior to 1957,
Senator, the 1957 act, these machines were legal in the State of
Indiana.
The Chairman. Gambling wasn't legal.
Mr. HoLOVACHKA. That is right. Senator, but we have approxi-
mately 800 policemen in Lake County, Ind., and are you charging
me with being able to do what 800 policemen can't do ?
The Chairman. I am not charging you with anything. I just won-
dered why you didn't charge your investigators to go out there and
clean up gambling.
Mr. HoLOVACHKA. All right.
And let me say to you, I would get calls from wives whose hus-
bands, while under intoxication, would lose their paychecks perhaps
in some of these taverns, and so forth. When they called me, I sent
Mr. Conroy out and told him to have the machines removed. Most
of them were removed voluntarily by the people. Some 30, as Mr.
18620 IMPROPER ACTIVITIES IN THE LABOR FIELD
Conroy testified, were picked up during this period of time where
they voluntarily would not remove the machines.
Who the machines belonged to, I certainly didn't know, and it
didn't make any difference to me.
The Chairman. Did you try to find out ?
Mr. HoLOVACHKA. They couldn't tell you at the tavern or the place
where these machines were. They did not know the names of the
owners of the machine.
The Chairman. Did you try to find out ?
Mr. HoLOVACHKA. Yes, sir; I did.
(At this point Senator Kennedy entered the hearing room.)
The Chairman. Did you find out who placed the machines in
there?
Mr. HoLOVACHKA. No, sir.
The Chairman. Did you ask ? You know, you are not coming up
here, a prosecutor with your experience, and saying, "Here are gamb-
ling machines all over the town and I couldn't find out who owned
them or who put them in there."
Mr. HoLOVACHKA. Senator, I am pointing out to you that prior to
1957 these machines were not gambling machines within the scope
of the law of the State of Indiana. They were no more gambling
machines than a pair of dice or a deck of cards in a five and dime
store.
You had to actually catch the person getting paid off by the owner
of the establishment before it became a violation of the law. Let me
say to you further that if the legislature wanted to get rid of these
machines, and they can, all they have to do is pass a law similar to
the one we have pertaining to slot machines in Indiana, where the
mere possession of a machine is a violation of the law.
If the legislature passed such an act, we could get rid of them within
24 hours, I am satisfied.
The Chairman. I wonder about that. I think they passed such an
act, didn't they, in 1957?
Mr. HoLOVACHKA. In 1957, Senator, they passed such an act. In
Allen County, Ind., in Fort Wayne, the prosecuting attorney pro-
ceeded to pick some of these machines up. Mr. Sinclair has the rec-
ord of the case. I gave it to him when he was in my office.
There was an outfit down there by the name of Mizer, and the other,
I think was the Lee Sales Co., and they ^ot an injunction against the
prosecuting attorney, against the sheriff, against the mayor, against
the board of public works and safety, and someone else.
There were five of them. The prosecutor, sheriff, mayor, board of
public works and safety. I forget the fifth one. But the court granted
them a temporary injunction and subsequently granted them a per-
manent injunction.
That case was appealed to the Supreme Court of the State of In-
diana. That case has not been ruled upon to this day.
The Chairman. I understand. But you said if the legislature
passed such a law you would get rid of them in 24 hours. You have
had a year and some time, nearly 2 years to get lid of them. Have
you gotten rid of them ?
Mr. HoLOVACHKA. Anyplace where we had a violation of the law,
For example,
IMPROPER ACTIVITIES IN THE LABOR FIELD 18621
when Mr. Conroy got the evidence, we did get rid of them, in excess
of 150 of them during my term of office.
The Chairman. That is back in 1953. I am talking about 1957,
after you said you could get rid of them in 24 hours after such a law
was passed.
Mr. HoLovACHKA. Let me say to you, Senator, after a permanent
injunction was handed down by my court, I felt it was the responsi-
bility of the supreme court to clarify this point as to the law.
The Chairman. That wasn't in your county. That wasn't in your
jurisdiction.
Mr. Holovachka. It doesn't make any difference.
The Chairman. Was it?
Mr. Holovachka. The Supreme Court of the State of Indiana had
to rule on it.
The Chairman. I understand that, of course. You can enforce
a law until it is ruled on one way or the other. But I took your
statement that you could stop it in 24 hours if the legislature would
pass such a law.
Mr. Holovachka. When they give us a clear law ; yes, sir.
The Chairman. We find now that it did pass such a law as you
testified to, back in 1957.
Mr. Holovachka. The law still is not clear. For example, let me
point out to you Senator, that since this thing has been going on
The Chairman. Is there any case pending in your jurisdiction as to
your efforts to try to enforce the law ?
Mr. Holovachka. As to the efforts of the police department? I
can't account for them.
The Chairman. I am not talking about that. I said is there any
restraint, any injunction, in your jurisdiction, where you have the
responsibility as prosecuting attorney to restrain you from enforcing
this statute ?
Mr. Holovachka. Senator, we certainly did enforce the statute in
every place we were
The Chairman. That isn't in response to my question. You are a
lawyer. I asked you is there any injunction now restraining you
in your jurisdiction from enforcing this statute?
Mr. Holovachka. I am not the prosecutor now. Senator.
The Chairman. Well, you are chief deputy ; aren't you ?
Mr. Holovachka. Yes ; I am, sir.
The Chairman. All right. Is there any injunction or restraining
order in your jurisdiction to prevent you from enforcing this statute?
Mr. Holovachka. Well, let me say this to you-
The Chairman. Wait a minute.
Mr. Holovachka. Within the past
The Chairman. Wait a minute. You can answer "Yes" or "No."
Mr. Holovachka. I can't answer that question "Yes" or "No."
The Chairman. You can. You do know whether there is an in-
junction against you.
Mr. Holovachka. May I qualify the statement. Senator?
The Chairman. After you answer it. You can't qualify it very
well until you answer it.
Mr. Holovachka. Well, I will answer that by saying — I don't un-
derstand the question. Senator. I don't understand the question.
18622 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman, If you are telling the truth
Mr. HoLOVACHKA. I am telling the truth. There is no injunction
in Lake County. Is that the answer to your question?
The Chairmaist. Well, fine.
Mr. HoLOVAcPiiiA. Now, let me point this out to you.
The Chairman. Now qualify it.
Mr. HoLOVACHKA. Now I will qualify it. Within the past 2 weeks
or approximately 2 weeks, Judge Niblick, of Marion County, who
had, on two occasions, ruled that pinballs were legal in Indiana, and
I believe those two occasions w^ere since 1957, had a case in Lebanon —
it was venued there from Marion County, and on that occasion he
ruled that these machines were illegal.
Once he had ruled that they were illegal, we immediately, the
prosecutor immediately, issued an order to the chiefs of police to get
rid of those machines. These men went into these places and they
changed the machines to the point where they would have no au-
tomatic or free replay. They cut the wires. There was no register
on them.
In my opinion. Senator, those machines without the automatic
register and without the free replay are legal in the State of Indiana
today.
The Chairman. What are you doing to enforce the statute out
there now ?
Mr. HoLOVACHKA. Sir, the prosecutor has commimicated with the
chief of police of each commmiity and the sheriff, and has requested
them, wherever they found these gambling machines, to get rid of
them.
The Chairman. When? When did he issue those orders?
Mr. HoLOVACHKA. After Judge Niblick had ruled in Indianapolis
or Lebanon.
The Chairman. Wlien did Judge Niblick rule?
Mr. HoLOVACHKA. Approximately 2 weeks ago.
The Chairman. Thank you.
Do you know a man named Steven Sohacki ?
Mr. HoLOVACHKA. Senator, I had him before the grand jury back
in 1951. At that time I propounded questions to him before the
grand jury. I have not seen or talked to Mr. Sohacki or met him
directly or indirectly from that date to this.
The Chairman. Do you know Mr. George Welbourn ?
Mr. HoLOVACHKA. No, sir. The first time that I saw him was when
he testified in this chamber last Thursday or — Thursday, it was.
The Chairman. I don't believe he testified ; did he ?
Mr. HoLOVACHKA. Yes, he did, Senator.
The Chairman. I thought he took the fifth amendment.
Mr. HoLOVACHKA. Excuse me. I mean he was before the Senators
here.
(At this point Senator Church withdrew from the hearing room.)
Mr. HoLOVACHKA. That was the first time I had ever seen him.
The Chairman. According to the records we have here, as the
Chair indicated to you heretofore, these two men — I will ask you first
if you know them to be the owners of these machines that are per-
mitted to run in your county ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18623
Mr. HoLovACHKA. Senator, let me say this to you : By way of hear-
say and by way of reading in the press, I am informed that they did
own some machines in Lake County. How many, I don't know.
The Chaikman. All right. Did you have them before the grand
jury since tliis ruling in 1957 to ascertain whether they were operat-
ing gaming machines or not ?
Mr. HoLOVACHKA. We didn't do it because of this ruling in Allen
County at that time, sir, and because the case is pending in the su-
preme court.
The Chairman. In other words, you are going to put off enforcing
that statute just as long as you can.
Mr. HoLovACHKA. That is not the truth. Senator. That has been
a heartache to me, I wish the legislature had given me a law I could
have enforced there without any trouble. I would have done it.
The Chairman. Let me ask you when you are going to start try-
ing to enforce it ?
Mr. HoLOVACHKA. As soon as we have the legal facilities with wliich
to do it.
The Chairman. I thought the prosecuting attorney's office, the
sheriff, and the police had pretty good legal facilities, when the leg-
islature passes a statute.
Mr. Holovachka. The legislature — on purpose, Senator, I might
say
The Chairman. The what ?
Mr. Holovachka. The legislature, on purpose, in 1953, put this
hitch into this act so that that law could not be enforced.
The Chairman. They obviously unhitched it in 1957.
Mr. Holovachka. That is correct, sir.
The Chairman. Why isn't it being enforced now ?
Mr. Holovachka. Because the supreme court hadn't ruled on the
case yet. Only recently have we had a decision upon which a prose-
cuting attorney could hang his hat, and that was Judge Niblick's
ruling.
The Chairman. The supreme court could never rule on a case
until there is a lower decision ; isn't that correct ?
Mr. Holovachka. Well, there has been a lower decision. There
has been a permanent injunction that has been appealed 2 years ago.
The Chairman. That is in another jurisdiction.
Mr. Holovachka. Yes, sir.
The Chairman. That is not in yours ?
Mr. Holovachka. That is correct, sir.
The Chairman. There is no such decision in a lower court be-
cause of anything you did, is there? That is, to try to enforce the
statute ?
Mr. Holovachka. Let me say this to you
The Chairman. Is there ?
Mr. Holovachka. Let me say this to you — I will answer that if
you permit me.
The Chairman. Say yes or no and then answer it.
Mr. Holovachka. I can't answer "Yes" or "No." I will say this.
We picked up many machines there, and I would say that none of
these men had intestinal fortitude enough to file an injunction against
me up to the present date.
18624 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. I can pretty well understand why they don't have
much hope of getting any relief. Don't you agree with me.
Mr. HoLOVACHKA. No, sir.
The Chairman. In other words, you are a man of action. You
have been enforcing the law ; is that right ?
Mr. HoLovACHKA. Senator, let me say to you that it is the prime
responsibility of 700 policemen in Lake County, Ind., to enforce the
law. Mine is a secondary responsibility. On many occasions, when
1 received complaints, I refeiTed them to these police. So far as I
know, they took care of them.
The Chairman. You are not kidding us with that line.
Mr. HoLOVACHKA. Well, I am not trying to, Senator.
The Chairman. You know you have the authority as prosecuting
attorney to take action.
Mr. HoLOVACHKA. Let me say that perhaps I had the authority
The Chairman. And to initiate action. Don't you ?
Mr. HoLOVACHKA. Perhaps I had the authority, but I did not have
the manpower. I had three investigators during the last 2 years.
The Chairman. You seem to have the same manpower now you
have had, and now your prosecuting attorney sent out the notices
2 weeks ago.
_ Mr. HoLOVACHKA. It was done through the chiefs of police. Every
bit of it was done through the chiefs of police.
The Chairman. You have had chiefs of police all these years,
haven't you ?
Mr. HoLOVACHKA. And certainly whenever we had complaints that
were law violations, the machines were picked up.
The Chairman. Did you get any money from any source to let
pinball machines operate?
Mr. HoLOVACHKA. No, sir.
The Chairman. Did you get money from any source to cooperate
with an interest there to develop and create a monopoly in this busi-
ness ?
Mr. HoLOVACHKA. No, sir.
The Chairman. Where did you get the money ?
Mr. HoLOVACHKA. I have answered.
The Chairman. No ; you haven't. That is the trouble.
Mr. HoLOVACHKA. I have given you my legal objection. Senator,
and I stand upon my legal objection.
The Chairman. Do you think now, as a public official, that you
owe it to the people of your community, in view of this public de-
velopment, to let them know the truth about it ?
Mr. HoLOVACHKA. About my private affairs ?
The Chairman. Yes, sir.
Mr. HoLOVACHKA. No, sir.
The Chairman. No ; I mean about this money that you have been
getting while the law has not been enforced ?
Mr. HoLOVACHKA. That is a private affair, and I stand upon my
legal objection.
The Chairman. It is not altogether a private affair in my judg-
ment, and you agreed with me in the beginning, you gratuitously said,
that you felt you owed a duty to them to explain it.
Mr. HoLOVACHKA. Pertaining to anything within the scope of this
committee, I will be happy to explain. Senator.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18625
The Chairman. You said notwithstanding it wasn't within the
scope of this committee in the beginning. You said you felt you had
a duty to explain it to them. Now I want to know : Are you willing
now to issue a public statement under oath and give it to the press
so that every interested citizen there may know your version of it?
Mr. HoLOVACHKA. What is happening to me today could happen to
any citizen of this country.
The Chairman. It certainly could if he acted like you do.
Mr. HoLOVACHKA. And, Senator
The Chairman. There is no question about it.
Mr. HoLOVACHKA. The Constitution and the Supreme Court has
set down — we are not governed by men. We are governed by laws.
I am simply trying to follow the laws of our great country.
The Chairman. That is the trouble out there, apparently. The
people of Gary are not governed by law. They have no one to en-
force the law. You had the responsibility for doing it. Now you
come up here with a lot of excess money, and you say it is none of
their business where you got it. Is that what you mean to say to
the people back home?
Mr. HoLOVACHKA. That is the way you put it, Senator.
The Chairman. Have you got any other way of putting it ?
Mr. HoLOVACHKA, Yes, sir.
The Chairman. How would you put it ?
Mr. HoLOVACHKA. I don't think that my private affairs
The Chairman. You say it is none of their business. Isn't that
what I said you said ?
Mr, HoLOVACHKA. If that is the way you want to put it, Senator,
I will have to agree.
The Chairman. Do you want it any different ?
Mr. HoLOVACHKA, I think I have a private life the same as any
other citizen or individual.
The Chairman. You certainly do, until you trespass upon public
affairs and fail in a public duty.
If you have done that, as the evidence here may indicate that you
have, then it becomes public business and public interest. You said
something about getting a chance to tell your story. I am trying to
give you that chance.
Do you want to make any explanation of that money at all ?
Mr. HoLOVACHKA, Senator, I stand upon my legal objection per-
taining to my private affairs.
The Chairman, I thought so. That is your story.
Senator Capehart?
Senator Capehart, Mr, Chairman, the inference, I think, here is
that Mr, Sohacki and Mr. Welbourn operate what is referred to as
the syndicate in Lake County, and have been responsible for this
money.
Did you testify under oath a moment ago that you only met Mr.
Sohacki back in 1951 ?
Mr, HoLOVACHKA, That is correct, sir.
Senator Capehart. Are you saying under oath that you never had
any business dealings with him since that time ?
Mr, PIolovachka, Never, Never at any time. Senator,
18626 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Capehart. Are you saying under oath that you do not know
Mr. Welbourn?
Mr. HoLOVACHKA. The first time I had seen him was in this com-
mittee room last — I believe it was Thursday ; yes, sir.
Senator Capehart. So the two men wiio operate the syndicate in
Lake County, you are testifying under oath that you do not know —
you know one of them, but did not know the other one ?
Mr. HoLOVACHKA. If they are operating a syndicate — I don't know
what you mean by syndicate, Senator.
Senator Capehart. Well, the testimony has been here that they did.
Mr. HoLOVACHKA. Here is the thing, I understand a syndicate to
be the type of a corrupt operation where, tln-ough force, and so forth,
and bombings and things of that kind, they prevail upon people in a
type of business to get a monopoly.
I can't say to you frankly that I know of any instance in which we
have had any difficulties in our community where things of that kind
had occurred. I certainly know of no hoodlums that were attached
from any outside community, except as I had read in the paper, and
I don't believe too much of what I read in the Gary Post-Tribune.
Senator Capehart. Are you testifying that the money that was
deposited, the cash that was deposited to your account over this number
of years, did not come from either one of these gentlemen ?
Mr. HoLOVACHKA. Yes, sir.
Senator Capehart. Or their companies ?
Mr. Holovachka. I presume from some of the evidence that has
been developed before this committee that they have an interest in
some companies — I don't recall which — but I presume they have an
interest.
I don't know anything about those companies. The first time that
I learned anything concerning those companies was when they were
specified in a subpena that I had received, and perhaps on previous
occasions I may have read about these companies in the newspaper.
Senator Capehart. What do you know about this local union?
You said a moment ago you wanted to make a statement on that. I
think it only fair that we permit you to do it.
Mr. Holovachka. I have no knowledge concerning Local No. 1 of
the Coin Operators and Repairmen's Union except that it was run by
Jolin Testo and his wife, and in my opinion this was not a union as I
understand the objects and purposes of miion organizations, but a
personal financial racket for Mr. Testo and his members to attempt to
maintain a monopoly in the coin-machine business.
I know of no eifort on the part of anyone comiected with my former
office of prosecuting attorney or anyone else to destroy or bring about
the dissolution of local No. 1. As a matter of fact, when I left the
office of prosecuting attorney, Mr. Testo was in full operation of said
organiaztion, and that is on December 31, 1958.
It was not until after Mr. Sinclair, an investigator of your connnit-
tee, proceeded to investigate Mr, Testo, that he decided to drop out as
it was getting too hot in the kitchen. At said time, Mr. Testo arranged
a meeting with his full organization and all of his members attended
said meeting at the green room in the Gary Hotel, the early part of
this year,
It'was at this meeting that Mr, Testo introduced JMr, Sinclair to the
members of his organization and Mr. Sinclair questioned said members
IMPROPER ACTIVITIES IN THE LABOR FIELD 18627
at length, and I might say many of them have not been subpenaed to
this hearing.
Subsequently, Mr. Testo attempted to turn the rein of said phony
organization over to a hood from Calumet City who was obviously
going to operate a shakedown racket, as can be attested to by literature
from said hood to some of his members, which is now in the possession
of Mr. Sinclair, which I have turned over to Mr. Sinclair.
I would suggest, Mr. Sinclair, that you turn that over to the Senator
and let them see what a shakedown they were trying to operate, these
hoods out of Calumet City, 111.
It is my opinion that the reason said organization dissolved was
that the local people in the coin-machine-operating business did not
desire having their organization operated by some out-of-town racket-
eers, and perhaps they were fearful of the muzzle that such out-of-
town racketeei-s might brmg upon them, and, for that reason, discon-
tinued paying dues to said organization.
Insof or as my relations with Mr. Testo, I have known him as a man
supposedly connected with labor organizations for many years. At no
time have I had any conversations with Mr. Testo during the pRst
5 years, except perhaps to say "Hello" or "Goodby."
I might qualify that by about 6 years ago, I think — my recollection
isn't too good on the subject — I either issued a grand jury subpena or
requested him to come into the office, and his attorney, an attorney by
the name of Momatt, and Mr. Sinclair knows about that, had called me
and told me ]Mr. Testo's heart was bad, or there was something wrong
with him, and he couldn't appear.
We put it off and I don't recall that we had any contact after
that. As for Mr. Testo, I would personally consider him as shady a
labor leader as we have in our community. I have recently read in
the papers where he had supposedly been threatened. If this is true,
which I doubt, but assuming it is, said threats undoubtedly came
from his association of many years with the racketeering element.
I have at no time had any dealings with any gangsters, racketeers,
or racketeering element in any way, shape, or form, nor have I re-
ceived any money from anyone connected with the coin-machine
business either directly or indirectly.
I might say that Mr. Testo, on numerous occasions, had attempted
to get an AFL charter to operate this racket in Lake Comity, Ind.
He wasn't successful in getting it because they knew his character,
they knew his reputation, and they knew that he just wanted to use
the AFL to operate a racket.
Mr. Sinclair came to my office and told me that Mr. Testo had
been involved in some bombings over in the city of Hammond. The
committee or the counsel of this committee, or Mr. Sinclair, didn't
question Mr. Testo about his bombings, so that this committee could
know the true character of this hood, racketeer, from our county.
Senator Capehart. Are you finished ?
Mr. HoLovACHKA. There is one other tiling I would like to bring
out. I would challenge the investigators of this committee to produce
one contract that he had ever had signed between any laboring men
in this business and any operators. How would he have a contract
when he was representing the operators on the one hand and the
repairmen on the other?
18628 IMPROPER ACTIVITIES IN THE LABOR FIELD
He was just operatin^^ a racket and trying to collect from both.
He told this committee that they paid $1.50 a month dues. Senator,
that is an outright lie. He committed perjury when he made that
statement. The manner in which he operated was he was taxing these
coin-machine operators 25 cents a month for each machine they had
in the area, whether it was jukeboxes or other types of machines.
They had to pay him 25 cents a month.
To the best of my knowledge, none of that money was used for
purposes of a union organization. It was just a private racket of
his.
Senator Capehart. One more question and then I am finished.
The records show you deposited $327,724.27 in cash in your bank
account, either deposited or spent, I believe. I have been corrected.
At this time do you wish to tell us the source of that money ?
Mr. HoLOVACHKA. Senator, I stand upon my legal objection.
Senator Capehart. That is all, Mr. Chairman.
The Chairman. Are there any further questions ?
Mr. Kennedy. Mr. Holovachka, you picked up 150 machines, did
you say ?
Mr. Holovachka. Approximately. I would say that in the course
of 6 years, that is approximately the correct number. I cannot tell
you specifically.
Mr. Kennedy. How many of Mr. Sohacki's and Mr. Welboum's
machines have you picked up ?
Mr. Holovachka. I am very happy that you brought that up, Mr.
Kennedy, because from the testimony that we have had here so far
before this committee, there is an indication that there must have been
less than one dozen machines that belonged to other operators that
were picked up.
So I would say that approximately 140 of them belonged to Mr.
Sohacki, or whoever you might say the other people were in the
business.
Mr. Kennedy. That is very interesting. Have you got any records
now to show the machines that you picked up of Mr. Sohacki and
Mr. Welbourn ?
Mr. Holovachka. Your committee members went to Mr. Conroy's
garage and they took the numbers off those machines. I don't know
who they belong to. But the committee members checked them and
they would be able to tell you who they belong to.
Mr. Kennedy. Mr. Holovachka, just tell us what records you have
showing the machines you picked up of Mr. Sohacki and Mr.
Welbourn.
Mr. Holovachka. I don't have any records because I didn't know
who the machines belonged to and it didn't make any difference to me.
Mr. Kennedy. Can you show us any records that you have where
you picked up one machine of Mr. Sohacki and Mr. Welbourn?
Mr. Holovachka. I suggest
Mr. Kennedy. Just you. You are the one. You give us the num-
ber of one machine
Mr. Holovachka. I personally never picked up the machines. My
investigators picked up the machines. I do not Imow who they
belong to.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18629
Mr. IvENNEDY. You are not answering the question. Give us the
records of one machine of Mr. Sohacki or Mr. Welbourn that you
ever had picked up. Give us tlie records of one machine.
Mr. HoLOVACHKA. Don't know who these others belong to. I don't
know who they belong to.
Mr. Kennedy. Just one machine, Mr. Holovachka.
Mr. Holovachka. As I say, I don't know. But I am certain that
they have checked records of a lot of people, and they could probably
tell you whose machines belong to whom.
Mr. Kennedy. We have checked. We check the records of Sohacki
and Welbourn, and find that none of their machines were picked up.
That is what we found. You want to know what we found. We
found that none of their machines were picked up when we started
the investigation. It is all very well for you to sit there and say, "I
didn't get any money from racketeers, any money from gangsters.
I didn't get any money from pinball operators." But you did get
the money. You get all of these $10 and $20 bills, and the record
has to show that you got it from this kind of people, unless you
refute it.
You refuse. You talk about Testo coming in here. Mr. Testo didn't
take the fifth amendment. He didn't dodge around. He answered
the questions.
Mr. Holovachka. I haven't taken the fifth amendment, either.
Mr. Kennedy. You are dodging around and taking what amoimts
to the fifth amendment.
Mr. Holovachka. I am a citizen of this country and entitled to the
protection of all of its laws.
Mr. Kennedy. Where did you get the $110,000 in $10 and $20 bills?
Tell the committee that.
Mr. Holovachka. I have objected
Mr. Kennedy. Yes.
Mr. Holovachka. I have stated my objection.
The Chairman. Let me ask you this, Mr. Prosecutor
Mr. Holovachka. Ex-prosecutor, Senator.
The Chairman. All right. I stand corrected.
Did you, while you were prosecuting attorney, keep a record of the
machines you picked up or had picked up ?
Mr. Holovachka. Did we ?
The Chairman. Yes.
Mr. Holovachka. No.
The Chairman. Why ?
Mr. Holovachka. There wasn't any reason to do it.
The Chairman. Yes ; there is, and you know it, as a lawyer. You
are not arguing with me. You know better.
Mr. Holovachka. Senator, let me say this to you: If I had ever
anticipated that such a thing as is going on here today, or I had con-
templated, you could rest assured I would have had the most perfect
records of any man that ever sat in that office, because w^e did keep
The Chairman. I would think you would have better records than
you have now; yes. I don't know whether they would have been'
perfect.
Let me ask you, as a lawyer and as a public official, do you think
you have a right to order your investigators or your deputies to go
36751— 59— pt. 53 14
18630 IMPROPER ACTIVITIES IN THE LABOR FIELD
out and take personal property belonging to another and make no
oflScial record of it, or keep no official record of it ?
Mr. HoLovACHKA. When there was evidence of gambling; yes, sir.
The Chairman". Wliere is any law to sustain that ? Here you make
a decision as a public official and there is no record kept of it. Is
that what you are testifying to ?
Mr. HoLOVACHKA. Senator, let me explain to you why perhaps we
did not make arrests in these cases.
The Chairman. It would be very interesting to know why you
didn't keep a record of the personal property you took away from
others.
Mr. HoLOVACHKA. We didn't make arrests in these cases. Senator,
for the reason that we were cognizant of the fact that the people that
had them in their places there were not primarily responsible for the
ownership of these machines, and that they did belong to somebody
else.
The Chairman. It doesn't matter who owned them. Whoever
owned them owned them under the law, had a legal right, I suppose,
to own them, unless it is a violation of the law to own them. Whether
it was a violation of the law or not could be a subject matter at issue
in a court case. Therefore, there should be a record of the machines
you took up, and a record of the machines that you ordered destroyed,
if you had the authority to order them destroyed.
Do you, as a prosecuting attorney, have the authority to issue an
order to destroy personal property ?
Mr. HoLOVACHKA. Yes, sir; I do, so long as it isn't where we have
had a conviction. If there has been a conviction in a court of law,
then it must be under the direction of the court. But in these other
instances
The Chairman. I will challenge that statement. I don't believe
there is. I do not believe there is a case anywhere in law in any State
that authorizes you to go out and pick up property and you make the
decision about destroying it.
Mr. HoLOVACHKA. None of these people filed a writ of replevin for
any of the machines and haven't sued me.
I want to say to you that I was sued for $100,000 in a Federal court.
There were organizations there interested in cleaning up salacious
literature and magazines and things of that kind. Do you think one
of them came to me and said, "Mr. Holovachka, if they get a judg-
ment against you, we will help you out financially." Not one of them.
The judgment was against me and I had to pay the court costs in
the case.
The Chairman. Well, I declare.
Proceed, Mr. Keimedy.
Have you anything further?
Mr. Kennedy. Following up Senator McClellan's questions to you,
can you give us the statute that allows or permits you to destroy the
equipment ?
Mr. Holovachka. I don't know of any statute, but no one has chal-
lenged my authority to do so up to the present time, Mr. Kennedy.
Mr. Kennedy. Can you tell us the statute under which you can pick
up the property, confiscate the property ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18631
Mr. HoLOVACHKA. Yes. Any device that is used for gambling, if
the person catches them in the operation of gambling equipment,
those things can be confiscated.
Mr. Kennedy. Who caught them in the operation of gambling?
Mr. HoLovACiiKA. Mr. Conroy ^vent into many of these places and
he played the machines. My specific instructions to him were to go
into the place to play the machine, to get a payoff, and then after he
had the evidence, to tell the people to get the machines out of the
place or else if they didn't do it, to pick the macliines up.
Mr. Kennedy. First, what statute is that, that gives you the right
to pick the machines up ?
Mr. HoLOVACHKA. The general gambling
Mr. Kennedy. No. 1, we have had testimony that that never hap-
pened that he just came in and told them he was picking the machines
up.
Mr. HoLOVACHKA. That I question.
Mr. Kennedy. Wliat statute is it that gives you that right ?
Mr. HoLOVACHKA. The general gambling statute. Do you mean to
say to me — Mr. Kennedy, I am not going to quibble with you about
wording of a particular statute. But I will say this to you : Do you
mean to tell me they could go in and break up a crap game and not
pick up the dice and money ?
Mr. Kennedy. All I want to know is where you have the right
under the law to pick up this equipment. Show it to me.
(A book was handed to the witness.)
Mr. HoLOVACHKA. I refer you specifically to section 10-2330, and
specifically to section 4, paragraph (4) .
Mr. Kennedy. That is what gives you the authority ?
Mr. HoLOVACHKA. I would say so. And the other general gambling
statutes.
Mr. Kennedy. This is the one you selected.
Section 4 says — 10-2328 — is that what you said ? It says :
Upon the conviction of any offender for a violation of this act, the court
shall order the sheriff to seize any slot machines.
Mr. HoLOVACHKA. Upon the conviction. In this case, the people
were not convicted.
Mr. Kennedy. So how did you have the right to seize it ?
Mr. HoLOVACHKA. We saw the law violation.
Mr. Kennedy. Is that a conviction in Lake Coimty ?
Mr. HoLOVACHKA. Mr. Kennedy, if we didn't have a right, they
could have filed a suit to replevin the machines up to the present date.
Mr. Kennedy. All I am trying to get is the legal rights that you
had. If you say you had the legal right in those cases, you had the
legal right to clean out the whole of Lake County of these machines.
But you only selected certain machines.
Mr. HoLOVACHKA. No. You are wrong. If we caught them gam-
bling, no matter where we caught them gambling with pinball ma-
chines, we had them removed or cleaned them up.
Mr. Kennedy. Where did the $327,000 in cash that you had come
from, Mr. Holovachka ?
Mr. HoLOVACHKA. I stand upon my legal objection.
Mr. KJENNEDY. If you performed all of these services for Mr.
Sohacki and Mr. Welbourn during this period of time, and did it for
18632 IMPROPER ACTIVITIES IN THE LABOR FIELD
nothing, I would hate to think what you did for the people that paid
you.
Mr. HoLOVACHKA. Well, I don't think that is a fair statement. I
don't believe you are being fair, Mr. Kennedy.
Mr. Kennedy. I will be fair. I will ask you where you got the
money, $327,000 in cash. Where did you get it ?
Mr. HoLovACHKA. I don't think that is within the scope of your
jurisdiction to find out as chief counsel of this committee.
The Chairman. The witness has repeatedly refused to answer
where he got the money. He takes the position that this committee
does not have the authority or jurisdiction, notwithstanding the rec-
ord that has been made. The Chair has ruled repeatedly that it does
have the authority, it has the jurisdiction, and the witness has the duty
to answer the question. Once and for the last time, the Chair orders
and directs you to answer the question: "Wliere did you get the
money?"
Mr. HoLOVACHKA. I stand upon my legal objection. Senator.
The Chairman. That order continues through your testimony.
Mr. Kennedy. Let me ask you this : "Will you give the authorities
of the State of Indiana the information as to where you got the
money, if they inquire of you as to where the money came from?"
Mr. HoLovACHKA. The authorities of the State of Indiana ? What
more right would they have to that information unless it were perti-
nent to their investigation than you have, Mr. Kennedy ?
Mr. Kennedy. Wliat is the answer to the question ?
Mr. HoLOVACHKA. I have answered the question.
Mr. I^nnedy. Will you give them the information if they request
it?
Mr. HoLOVACHKA. If they have a legal right to the information, I
will give it to them. If they do not have a legal right to it, I will not
give it to them.
Mr. Kennedy. What about the Governor of the State of Indiana,
if he inquires into this matter and wants the information ? Will you
give him the information ?
Mr. HoLOVACHBLA. The Governor has no right to inquire into this
matter.
The Chairman. Who does have a right? Anybody? Any tri-
bunal on earth ?
Mr. HoLOVACHKA. Yes, sir.
The Chairman. Who?
Mr. HoLOVACHKA. The prosecuting attorney.
The Chairman. No one else?
Mr. HoLOVACHKA. That is correct. And, of course, your Internal
Revenue Department has a right, and they are doing so at the present
time. Senator.
Mr. Kennedy. If the prosecuting attorney requests this informa-
tion, Mr. Vance requests this information from you, will you give
him this information ?
Mr. HoLovACHKA. If I feel, after a proper study of the law, that
he has the right to it, I shall give it to him. If I feel he does not have
a legal right to it, I shall not.
Mr. Kennedy. You just answered the question of the chairman and
he asked you who under God's heaven has the right and you said the
IMPROPER ACTIVmES IN THE LABOR FIELD 18633
prosecuting attorney. I am asking if you will give him the infor-
mation.
Mr. HoLOvACHKA. I say if he has a legal right to it, I will.
Mr. Kennedy. You are the one who said he did.
Mr. HoLOVACHKA. To this information? I didn't mean to imply
that, Mr. Kennedy.
Mr. Kennedy. I see.
Mr. HoLOVACHKA. Let us not twist my words.
Mr. Kennedy. You are the one who made the statement. You
wouldn't give it to anybody, then, will you, Mr. Holovachka?
Mr. Holovachka. I will give it to anybody that has a legal right
to have it.
Mr. Kennedy. Mr. Chairman, we have just one more short witness.
Mr. Holovachka. May I be excused ?
The Chairman. No. You may stand aside for the present.
Call the next witness.
Mr. Kennedy. Mr. Peter Chronokowski was called as a witness.
He has sent in a telegram that he is too ill to testify. He helped in
the picking up of these machines. He is a justice of the peace. He
was incapacitated while driving in his automobile.
The Chairman. For the information of the committee, the Chair
will announce that we have a telegram from Peter S. Chronokowski,
dated June 5, advising that he is unable to attend the hearings. From
a news report, and this is from a newspaper report, apparently this
man had a car accident, and he is now charged with an offense in con-
nection therewith because of his condition at the time. Therefore, we
await until he recovers sufficiently so that he may attend.
I miderstand that he has information regarding the picking up of
the machines. We intended to have him here today.
(At this point Senator Kennedy withdrew from the hearing room.)
Mr. Ivennedy. Could I call Mr. Smith ?
The Chairman. Mr. Smith, 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 noth-
ing but the truth, so help you God ?
Mr. Smith. I do.
TESTIMONY OF FRANK J. SMITH
The Chairman. State your name, your place of residence, and your
business or occupation, please, sir.
Mr. Smith. My name is Frank J. Smith. I have an accounting
business at 113-115 South Court Street, in Crown Point, Ind.
The Chairman. How long have you had that business ?
Mr. Smith. For about 8 years, sir.
The Chairman. All right, Mr. Kennedy, proceed.
Mr. Kennedy. On May 20, 1959, Mr. John Thiede, of the commit-
tee staff, subpenaed you and certain records that you had in your pos-
session, the records of Mr. Metro Holovachka ; is that correct ?
Mr. Smith. That is right, sir.
Mr. Kennedy. And at that time, when he came to see you — well,
would you relate to the committee what occurred ?
The Chairman. You had received a subpena, as I understand it, to
deliver certain records in your possession ?
18634 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Smith. Let me say this first
The Chairman. All right, say it your way.
Mr. Smith. Mr. Tliiede asked me if I had any records of Mr. Holo-
vachka. I advised liim that I had some penciled copies of tax returns
of Mr. Holovaclika. I reached in the drawer and took them out. Mr.
Thiede gave me a subpena at that time. I asked Mr. Thiede where he
wanted to work, whether he wanted to work across my desk from me,
or back in a conference room that I have in the back office.
Mr. Thiede said he did not want to work any place ; he wanted to
take the records with him.
I asked him if he would give me a receipt for such records, and he
said he would.
It is not customary for an accountant to let such records go out of
his office.
I then called Mr. Holovaclika and advised him that Mr. Thiede had
served a subpena on me for his records. Mr. Holovaclika told me,
"Just a minute, there is something I want him to read. I will be
right over."
In about 3 minutes or 5 minutes Mr. Holovachka came into my
office. I introduced Mr. Thiede to Mr. Holovaclika. Mr. Holovaclika
said, "Are those my records?"
I said, "Yes, sir."
He reached over and picked them up. He put them in front of him
where he was standing. He opened his briefcase and took out a piece
of paper and said, "I want you to read this," and handed it to Mr.
Thiede.
The Chairman. Then what happened ?
Mr. Smith. Mr. Thiede read the paper, and said, "I am not a
lawyer. I don't miderstand these things," and handed it back to Mr.
Holovachka.
Mr. Holovaclika, I believe, told him that such a letter had been sent
to your committee and he was awaiting a reply.
He picked up the records, the folder that he had brought with him
as well as the folder that had the penciled copy of the tax returns,
and walked out of the office with them.
I told Mr. Thiede, "You fight and get them back."
The Chairman. Those were records of your own, were they not,
that you made, yourself, in connection with the tax returns ?
Mr. Smith. After our discussion or our hearing prior to now. I
have since discussed it with my office force. There were some records
in that file that were made up by him and in his handwriting.
The Chairman. And the other records were your own ?
Mr. Smith. Well, yes, sir.
The Chairman. Let's get it straight.
In making up his return he had furnished you information, I
assume.
Mr. Smith. Yes, sir.
The Chairman. Some of the records that he furnished upon which
you calculated his tax return or made out his tax return, were in the
file along with your records that you developed in the course of doing
your work in making up the returns ?
Mr. Smith. Yes, sir.
The Chairman. The subpena had called for your records, had it
not?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18635
Mr, Smith. Yes, sir.
The Chairman. Did he know when he took that, that some of those
were your records ?
Mr. Smith. I am not sure, sir.
The Chairman. How could he fail to know when he looked at it
there before 3^011 '^
Mr. Smith. I couldn't tell you whether he knew. It is assumed
that he knew.
The Chairman. He knew they were being subpenaed, did he not?
Mr. Smith. Yes, sir.
The Chairman. You know he knew that ?
Mr. Smith. Yes, sir.
The Chairman. And he took those records from mider a subpena
that was served on you there at that time ?
Mr. Smith. Yes, sir.
The Chairman. Which had just been served on you ?
Mr. Smith. Yes, sir.
The Chairman. He took them out from the jurisdiction of that
subpena ?
Mr. Smith. Yes, sir.
The Chairman. He left with them?
Mr. Smith. Yes, sir.
The Chairman. Have you ever seen them since?
Mr. Smith. No, sir.
The Chairman. They have never been returned to you ?
Mr. Smith. No, sir.
The Chairman. You have no further custody or control over them ?
Mr. Smith. That is right, sir.
The Chairman. Even your own records?
Mr. Smith. I beg your pardon?
The Chairman. Even your own records, those you made and had
there at that time?
Mr. Smith. I have no records.
The Chairman. You have not now. But you did have records.
You have not now any records.
Mr. Smith. No, sir ; I do not have.
The Chairman. But you did have them at the time the subpena was
served on you?
Mr. Smith. Yes, sir.
Mr. Kennedy. Mr. Chairman, as you know, he was ordered in here
to produce those documents, and evidently the reason he is not pro-
ducing them now is because Mr. Holovachka took them from him.
The Chah^man. Is that the reason you are unable to produce the
documents ?
Mr. Smith. Yes, sir.
The Chairman. Otherwise you would produce them?
Mr. Smith. I think that was clearly evident when I
The Chairman. I am just asking you for the record. In other
words, you are not a party to obstructing the processes of this com-
mittee.
Mr. Smith. That is right.
The Chairman. You would have delivered the record, you would
have no objection to it, it had already been agreed that you would de-
liver them and get a receipt for them before he came over there.
18636 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Am I stating it correctly?
Mr. Smith. Yes, sir.
The Chairman. Then the reason you are unable to comply with
the subpena today is because of his actions as you have related ?
Mr. Smith. Yes, sir.
The Chairman. Any further questions?
Mr. Kennedy. No.
The Chairman. The committee will stand in recess until 10:30 in
the morning.
Just a moment. "We received a telegram. Ordinarily we do not
put these into the record, but for the benefit, if there may be any, from
it, here is a telegram from the Chamber of Commerce of Gary regard-
ing the situation there, in which it points out that the chamber of com-
merce is opposed to some of the things that have been developed here.
I shall place the telegram in the record at this point, not as evidence,
but merely as a statement from the commmiity.
(The telegram referred to follows:)
Gaey, Ind.
Senator Homer Capehabt,
Senate Hearing Room, Senate Office Building, Washington, D.C.:
This is what we sent to the Senate Rackets Committee today :
"Senator John McClellan,
Senate Rackets Committee.
"Gentlemen : Since the Gary Chamber of Commerce and all Gary citizens
were mentioned in yesterday's session of your hearings we felt that we should
make a statement to be read before the committee and to be entered into your
oflBcial records in an effort to set the records straight regarding Gary and its
citizens. Here is our statement : 'The Gary Chamber of Commerce is definitely
dedicated and devoted to building a better Gary. We are definitely opposed to
crime and corruption in any form. Our records show that we as a chamber of
commerce have never attempted to pass judgment on any public official since
that is not a proper function of the chamber. However, in August of 1954 our
organization did propose publicly that a thorough investigation of Gary's crime
condition be conducted by a competent out-of-State agency.
" 'Furthermore, there was a question raised about the citizens of Gary. An
overwhelming majority of our citizens are honest and upright and want and
deserve good government. We have approximately 200 churches in Gary and
nearly 100,000 people worship there each week. We have good schools; many
fine cultural and recreational facilities, and many other things of which we are
proud.
" 'Our chamber of commerce won a national honor last year for our outstand-
ing achievements. We were judged to be one of the top chambers in the
Nation in 1958. We are eager and willing to cooperate in any way we can to
help make Gary a better place to live and work. We have a wonderful city now
but we know it could be better as all cities can be.
" 'The Gary Chamber of Commerce always welcomes suggestions and appre-
ciates cooperation in helping to build a better Gary.' "
Yours sincerely.
The Gary Chamber of Commerce Executive Committee.
The Chairman. The committee will stand in recess until 10 :30 in
the morning.
(Members of the select committee present at time of recess: Sen-
ators McClellan and Capehart.)
("Wliereupon, at 5 :15 p.m. the select committee recessed, to recon-
vene at 10:30 a.m., Tuesday, June 9, 1959.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
TUESDAY, JUNE 9, 1959
U.S. Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington, D.O.
The select committee met at 10 :30 a.m., pursuant to Senate Kesolu-
tion 44, agreed to February 2, 1959, 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
Frank Church, Democrat, Idaho; Senator Homer E. Capehart, Ee-
publican, Indiana.
Also present : Kobert F. Kennedy, chief counsel ; LaVern J. Duffy,
investigator ; Kichard G. Sinclair, investigator ; James F. Mundie, in-
vestigator; John T. Thiede, investigator; John D. Williams, investi-
gator; Eobert E. Manuel, assistant comisel; Ruth Y. Watt, chief
clerk.
The Chairman. The committee will be in order.
(Members of the select committee present at the time of convening:
Senators McClellan and Capehart. )
The Chairman. Call the next witness.
Mr. Kennedy. Mr. Duffy and Mr. Williams of the committee staff,
Mr. Chairman.
The Chairman. Mr. Williams, you do solemnly swear that the evi-
dence 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. Williams. I do.
TESTIMONY OF La VEEN J. DUFFY (Eesumed) AMD JOHN D. WILLIAMS
The Chairman. State your name.
Mr. Williams. My name is Jolin Williams; my residence is 7224
South Bennett, Chicago.
The Chairman. Are you associated with this committee ?
Mr. Williams. I am a member of the audit staff of the U.S. General
Accounting Office, and I have been on this committee for about 14
months.
The Chairman. On loan to this committee ?
Mr. Williams. Yes, sir.
The Chairman. All right ; proceed.
Mr. Kennedy. Mr. Duffy, we have been discussing the coin opera-
tion in areas chiefly around Gary, and separated from that, the area
18637
18638 IMPROPER ACTIVITIES IN THE LABOR FIELD
around East Chicago, because, as we pointed out in the first day of the
hearings, it was a different type of operation and a different company
operating in East Chicago.
Would you relate to the committee what the situation is as far as
East Chicago is concerned, the name of the company that operates
there, and what we have found out on general terms about the com-
pany ?
Mr. Duffy. We have found there is one company that has a mo-
nopoly in the East Chicago area, which includes the city of East
Chicago and Indiana Harbor. This area includes about 60,000 people.
They have a monopoly of coin-operated gambling-type pinball
machines and the name of the company is Lakeside Specialty Co.
Mr. Kennedy. Lakeside Specialty Co. ?
Mr. Duffy. Yes, sir.
Mr. Kennedy. Who owns that company ?
Mr. Duffy. Currently two individuals own the company, and their
names are Mr. Rowland Schaefer and Mr. Kenneth McDonald.
Mr. Kennedy. How do you spell Schaefer ?
Mr. Duffy. S-c-h-a-e-f-e-r, and M-c-D-o-n-a-l-d.
Mr. Kennedy. Is there a city ordinance in East Chicago dealing
with the pinball operation ?
Mr. Duffy. Yes, there is an ordinance passed in 1951 which relates
to the licensing of amusement-type pinball machines only. They do
not license gambling-type pinball machines.
Mr. Kennedy. Would you relate what that ordinance is, please ?
Mr. Duffy. Now, the particular section of the city of East Chicago,
section 2-501, chapter 5, cigarette and coin vending machines, juke-
boxes, mechanical and coin amusement devices.
I won't go into the particular sections, but it states definitely that
no type of gambling machines are allowed in the area.
Mr. IVENNEDY. But it does provide, the ordinance does provide, that
all other kinds of machines should be licensed ; is that right ?
Mr. Duffy. Yes, sir.
Mr. IvENNEDY. And they have to be licensed ?
Mr. Duffy. Yes ; they have to be licensed.
Mr. Kennedy. Now, just going back to the question of the law in
the State of Indiana, we have found, have we not, that the pinball
machines or the bingo machines we have been discussing here were
illegal per se from 1953 to 1955 ; is that right ?
Mr. Duffy. That is correct.
Mr. Ivennedy. Then from 1955 to 1957, they were only illegal if
there was gambling actually found to be taking place.
Mr. Duffy. That is correct.
Mr. I^NNEDY. From 1957 up to the present time they were illegal,
per se.
Mr. Duffy. Yes, sir.
Mr. Kennedy. They were made illegal by the State legislature; is
that correct ?
Mr. Duffy. Yes, sir.
Mr. I^nnedy. They were illegal from 1953 to 1955 and from 1957
on?
Mr. Duffy. Yes, sir.
Mr. Kennedy. And from 1955 to 1957, the actual gambling had to
be discovered by a representative of law enforcement ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18639
Mr. Duffy. That is correct. There is one thing, the licensing for
each particular coin-operated pinball machine was $40 apiece, from
the city of East Chicago.
Mr. Kennedy. That is East Chicago, Ind. ?
Mr. Duffy. That is the licenses and you have to purchase in order
to play the machine or use the machine over there.
Mr. I\j;nnedy. Have we found that the gambling-type machines,
even though forbidden by the ordinance in East Cliicago, actually
were licensed ?
Mr. Duffy. Yes, sir ; we have. We found from our examination —
and we have conducted a number of interviews in the area — we found
that all of the location owners were not reluctant to admit that they
had made payoffs on the machines, and will admit it.
Mr. Kennedy. These were gambling-type, with the recorded re-
play?
Mr. Duffy. That is correct.
Mr. Ivennedy. So they were illegal, per se.
Mr. Duffy. Illegal, per se.
Mr. Kennedy. And do we find that they were licensed ?
Mr. Duffy. They were licensed; a few of those were licensed.
Mr. IvENNEDY. Would you relate, Mr. Williams, what you have
found as far as the licensing was concerned ?
First, did we make an investigation to find out whether these ma-
chines had received gambling stamps?
Mr. WiLLiAiMS. Yes, sir. We determined that the Internal Eevenue
Service in Indianapolis had issued some 312 gambling stamps for ma-
chines in the area of East Chicago, Ind., and Indiana Harbor, for the
fiscal year 1958-59.
Mr. IvENNEDY. How many of those machines were there ?
Mr. Williams. Some 312 had been issued at the time of our exam-
ination.
Mr. Kennedy. They have been active in this area that we were
discussing.
Mr. Williams. They were issued to that area, to locations in that
area.
Mr. I^NNEDY. Do we find that some of these received licenses or
were licensed by the city of East Chicago ?
Mr. Williams. We went over to the city of East Chicago City Hall
and went through the license file, and determined that up to just prior
to the election, which was in the first week of May of this current
year, that some 75 machines had been licensed out of the 300-some
Federal licenses which had been issued.
Mr. Kennedy. Actually, then, East Chicago only licensed 75 of the
machines ?
Mr. Williams. At the present time.
Mr. Kennedy. That was about 25 percent of all of the machines ac-
tive in this area were actually licensed ; is that correct ?
Mr. Williams. That is right.
Mr. IvENNEDY. And also in violation of the law of the State of
Indiana, there were some 300 machines that were active or more than
300 machines that were active in this area ?
Mr. Williams. Some 300 had been issued Federal stamps ; yes, sir.
Mr. Kennedy. And we found from our own investigation that they
had been making payoffs ; is that correct ?
18640 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Williams. Yes ; in the interviews we conducted, there was no
reluctance to admit the fact that these machines paid off in cash.
Mr. Kennedy. Now, Mr. Duffy, we have a list of all of the locations
that have these kind of machines, is that correct, and received the
gambling stamps?
Mr. Duffy. This is a document secured from Mr. Howard Duncan,
who is hired by Lakeside Specialty Co. for one purpose, purchasing
Federal gambling stamps for Lakeside. This is the list of all of the
locations that Federal gambling stamps were purchased for and this
was secured from the Internal Revenue Service, and it is a photo-
static copy of a document presented to the Internal Revenue Service
by Mr. Duncan.
Total amount of money turned in to Internal Revenue to purchase
these stamps was $45,530, and it was given to the Internal Revenue
Service in July of 1958.
Mr. Kennedy. For what period of time ?
Mr. Duffy. For 1959. That is partial payment only, and this was
not for $250 stamps for all of them, and it was a partial payment
only. That is for 302 machines.
Mr. Kennedy. So we have a double situation here, of where this
type of equipment is made illegal by the State of Indiana, and it is
illegal under the ordinance of East Chicago, and yet we find more
than 300 of these machines actually operating ; that is No. 1.
Mr. Duffy. That is correct.
Mr. Kennedy. And No. 2 is that the machines are supposed to be
licensed, machines operating in this area, and we find only approxi-
mately 25 percent of them have been licensed.
Mr. Duffy. That is correct. There is one other violation of city
ordinance, too. The city ordinance specifies under section 2-510 that
a placard shall be placed on every such machine, jukebox, or device
in a conspicuous place which will contain the name of the owner and
person in charge of such machine or device.
Now, we didn't find on any of these machines the name of the
owner on the machines.
Mr. Kennedy. Now, what have been the receipts, or gross receipts
of this company that we found ?
Mr. William. We examined the gross receipts of the company.
Mr. Kennedy. From November 1, 1952 to December 31, 1957.
Mr. Williams. The Lakeside reported gross receipts in this period
of $1,213,000 in round figures.
Mr. Kennedy. What was the total take?
Mr. Williams. We estimate, on the basis of the 50-50 split with
the location owners, that the gross take was $2,426,000.
Mr. Kennedy. For the period November 1, 1952 to December 31,
1957?
Mr. Williams. That is correct,
Mr, Kennedy. Now, could you tell us who the partners are and
what their split is in this operation?
Mr. Duffy. The original partners were Mr. Gilbert Kitt and Mr.
Rowland Schaefer, and Frank Rizzo, and John J. Powers. Now,
Mr. Kitt put into the company $3,108, or 30 percent total capitaliza-
tion, and Mr. Schaefer put in $3,108, and Mr, Powers put in $2,072,
and Mr. Rizzo put in $2,072; total capitalization was $10,360.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18641
From the period of 1952 through 1957, for this capitalization of
$10,000, they took from this company $560,973.68. Do you want me
to break down the individuals ?
Mr, Kennedy. Yes.
Mr. Duffy. Mr. Kitt, for his investment of $3,000, took out $69,-
379.13. Mr. Schaefer put in $3,000 and he took out $221,882.97. Mr.
McDonald, we don't know the amount of money he invested because
he made some arrangement with the other partners, and we don't
know how much money he actually put into the company, but he took
out $162,657.16.
Mr. Powers put in $2,072 and he took out $48,597.21. Mr. Kizzo
put in $2,000 and he took out $58,467.21.
Again, the total would be taken out, $560,973.68.
Mr. Kennedy. Do we find that the company made certain gifts
to certain public officials ?
Mr. DtTFFY. Yes, we have. We found from examining the records
of the partnership that a number of gifts have been purchased at
Christmastime by Lakeside Specialty Co., and were given to law-
enforcement officials in the area.
Mr. Kennedy. Would you relate to the committee what we have
found ?
Mr. Duffy. From examining the records of Lakeside, and also
examining the records of the H. Horowitz & Co., located in Chicago,
36 State Street, we found from the period of 1954 through 1959 they
purchased $23,433 worth of gifts.
Now, this $23,000 is based on the wholesale value of the goods pur-
chased and they were purchased at wholesale price, so you have to
add actually 40 percent to this amount to get the retail value of the
gifts.
Mr. Kennedy. Have you added that ?
Mr. Duffy. The retail value, approximately, would be $32,760.46.
That, again, is an approximate figure.
(Members of the select committee present at this point in the pro-
ceedings: Senators McClellan and Capehart.)
Mr. Kennedy, Do we find that these gifts went out every year,
not only at Christmastime but at other times during the year?
Mr. Duffy. Other times during the year, but mostly at Christ-
mastime.
Mr. Kennedy. Would you relate what we found ?
Mr, Duffy. For example, some of the gifts to public officials : We
found on December 10, 1956, Mr. Walter Baron received some gifts.
Mr. Kennedy. Who is he?
Mr. Duffy. He is the city comptroller of the city of East Chicago.
He has control of the issuance of licenses to pinball machines in
the area. As I said, all of these machines in the East Chicago area
are the gambling-type bingo machines.
Mr. Baron received a number of gifts. I will go tlirough each
one. One martini jigger for $3.35, a clock, ashtray, knife set, a pair
of candlesticks, chafing dish, and that type of gift, the total whole-
sale prices being $117.56 for the gifts.
]\Ir. Mike Vinovich — Mr. Vinovich is the chief of police of the
city of East Chicago — he received gifts valued at $118.23 for the
year 1956. The date of the gifts sent was December 10. The retail
18642 IMPROPER ACTIVITIES IN THE LABOR FIELD
price was $118.23. Some of the gifts to him were clocks, lipstick,
poker-chip set, candlesticks, and martini jigger, a number of items.
Sheriff Jack West, who was the sheriff of Lake County during
this period — gifts were sent to the county jail by Horowitz & Co. of
Chicago on December 12, 1956— the wholesale value, again, is $220.87.
Some of the items were book ends, radio, candlesticks, chafing dish,
clock, et cetera; barometer, book ends — a number of items. They
total $220.87.
Mr. Metro Holovachlca also received some gifts from the Lakeside
Co. On December 12, 1956, he received gifts valued at $213.97. This,
again, is the wholesale value. You have to add 40 percent to that
to get the retail value.
The Chaikman. Who are you identifying now?
Mr. Duffy. These are gifts to Mr. Metro Holovachka from the
Lakeside Co.
The Chairman. The prosecutor who testified here yesterday?
Mr. Duffy. That is correct.
The Chairman. What is this company that is dispensing these
gifts?
Mr. Duffy. The Lakeside Specialty Co.
The Chairman. Is that the one that gets the license to operate the
gambling machines ?
Mr. Duffy. In the East Chicago area. Of course, Mr. Holovachka
had jurisdiction to enforce the law in that area as well as Gary.
The Chairman. That is within his jurisdiction?
Mr. Duffy. That is correct.
Some of the gifts were: Eadio, barometer, candlesticks, chafing
dish, clock, bowl, radio. As I said, the value was $213.97.
Mr. Walter Conroy, who also appeared as a witness before this
committee, chief investigator for the county prosecutor's office, also
received gifts in 1956. The value of the gifts was $158.88. Some
of the gifts were radio, knife set, knife sharpener, poker-chip rack,
ice cream freezer, candlesticks.
Mr. Peter Chronowski, justice of the peace, who was too ill to ap-
pear, also received certain gifts.
The Chairman. Is that the man who had an accident and is not
able to be here ?
Mr. Duffy. That is correct. In 1956 he received some gifts valued
at $150.88 : Martini jigger. Zenith radio, knife sharpener.
Mr. Kennedy. And a record player ?
Mr. Duffy. A record player, ice cream freezer, and candlesticks.
Mr. Peter Chronowski also received another gift in 1956 ; he re-
ceived a hi-fi phonograph for $119.90. That was December 19, 1956.
We have Mr. Walter Jerose, the mayor of East Chicago, who re-
ceived a number of gifts in 1956 from the Lakeside Specialty Co.
The value of these gifts was $1,020,56. Then, of course, you have
to add 40 percent.
The Chairman. Who is that ? That is the mayor ?
Mr. Duffy. The mayor of East Chicago.
The Chairman. He did a little better than some of the others.
Mr. Duffy. Yes, sir.
The Chairman. What was the amount ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18643
Mr. DuTFY. $1,020.56. Of course, you have to add about $400 to
that to get the retail vahie. That is wholesale. Some of the items,
Mr. Chairman, were: Cultured pearl and earring set, $230; Stereo-
Realist camera, $119; hi-fi recorder, $90.56; a pair of binoculars for
$70.50, There are a number of items here, but those are the largest.
The Chairman. That is from whom ?
Mr. Duffy. From the Lakeside Specialty Co., a pinball syndicate
company that had a monopoly in East Chicago.
Mr. Kennedy. There are about 30 different items that the mayor
received ?
Mr. Duffy. That is correct.
Mr. IvENNEDY. Knives, forks, teaspoons, salad forks, soup spoons?
The Chairman. Can we expedite this by inserting the whole list
as an exhibit ?
Do you have a list there of those you have read and a number of
others who received gifts from the Lakeside Specialty Co. ?
Mr. Duffy. Yes, sir.
The Chairman. Is it quite a lengthy list ?
Mr. Duffy. It is rather long, Mr. Chairman.
I would like to refer again to some of the individuals who appeared
before this committee, some of the gifts they received in other years.
The Chairman. All right. You compiled the list and you have
verified it, have you ?
Mr. Duffy. We checked it with the invoices of the company in
Chicago. These items were shipped by the company in Chicago to
these individuals.
The Chairman. You checked the invoices ?
Mr. Duffy. Yes, sir.
The Chairman. This list may be made exhibit No. 9 for reference.
(Document referred to was marked "Exhibit No. 9" for reference
and may be found in the files of the select committee.)
The Chairman. You may proceed to highlight any part of it.
Mr. Duffy. In 1957, Mayor Jerose also received some gifts at
Christmastime. On December 19, 1957. The value of these gifts
was $984.63. Among the items was a 5-piece stud set, $118 ; 14-karat
diamond brooch, $234; a 14-karat man's watch, $95; a camera for
$79.40; a radio for $76.46; a whisky clock, $56; coffeemaker, $48;
a thirst extinguisher, $15.70.
The Chairman. A what ?
Mr. Duffy. A thirst extinguisher.
The Chairman. A thirst distinguisher ?
Mr. Duffy. Extinguisher.
The Chairman. I see.
Mr. Duffy. A pocket watch. There are a number of items here
also, Mr. Chairman.
Mr. Peter Chronowski also received gifts in 1957, valued at $165.82.
Mr. Kennedy. The same people received them again in 1957 ; is that
connect ?
Mr. Duffy. That is correct.
Mr, Holovachka, Mr. Baron, the sheriff — Sheriff Jack West — Mr.
Conroy.
The Chairman. In comparable amounts, or comparable value?
Mr. Duffy. Comparable amounts.
18644 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. All right.
Mr. Duffy. I will also mention one other item.
In 1958, on May 1, 1958, Mayor Jerose received a 14-karat Hamilton
wristwatch for $95.45 from Lakeside.
The Chairman. They didn't necessarily wait until Christmas?
Mr. Duffy. Not necessarily.
The Chairman. When is his birthday ? Did you get any informa-
tion on that ?
Mr. Duffy. No, I didn't, Mr. Chairman.
The Chairman. Or anniversary ?
Mr. Duffy. I didn't check that, Mr. Chairman.
The Chairman. Is there anything further ?
Senator Capehart. Mr. Chairman ?
The Chairman. Senator Capehart.
Senator Capehart. I believe I will direct this to Mr. Williams.
You say the investment by Kitt was $3,100, Schaefer, $3,100, and
others— Powers, $2,000, and Rizzo $2,000, making a total of $10,000.
Wlio owned these machines that they operated ?
Mr. Duffy. They were leased from the Empire Coin Co. out of
Chicago.
Senator Capehart. They were leased ?
Mr. Duffy. Some of them were leased and some of them were
owned. We have been trying to obtain some of this information from
the individuals, Mr. Senator, and they have refused to cooperate
with us.
Senator Capehart. How many machines does the company operate ?
Mr. Duffy. We feel it is 350 in the area.
Senator Capehart. 350?
Mr. Duffy. Yes.
Senator Capehart. They did not own them?
Mr. Duffy. We don't know how many they owned. We think
they owned the majority of them.
Senator Capehart. Where did you get the information of $10,360?
Were they a corporation ?
Mr. Duffy. They were a partnership. We got those from the part-
nership records.
Senator Capehart. Who furnished the balance of the money to buy
the 360 machines?
Mr. Duffy. I don't know that. We don't have all the records,
Senator. We wanted all the records, but they wouldn't furnish them
to us.
Senator Capehart. What ordinarily do these machines cost each ?
Mr. Duffy. About $700.
Senator Capehart. Then 350 of them would cost about $400,000.
Mr. Duffy. That is about correct. Again, Senator, I don't know
how many were leased and how many were purchased.
Senator Capehart. Wouldn't their investment be $400,000 instead
of $10,000?
Mr, Duffy. The partnership wouldn't show that. It would be an
individual transaction, possibly, between the individuals. We don't
know anything about that.
Mr. Williams. This $10,360 was their initial investment at the
time they organized the company. They did not purchase, lease, or
IMPROPER ACTIVITIES IN THE LABOR FIELD 18645
operate, to the best of our knowledge, that many machines at the
outset.
Senator Capehart. What year were they organized ?
Mr. Williams. 1952, sir.
Senator Capehart. 1952 ?
Mr. Williams. Yes, sir.
Senator Capehart. Then you don't know whether they owned these
machines or whether they did not ?
Mr. Duffy. There will be witnesses here this morning who will
be able to tell us that. Senator. We will be able to get the answers
from them..
Senator Capehart. Showing who did own the machines ?
Mr. Duffy. Yes.
Mr. Kennedy. We can ask them.
Senator Capehart. Was this company organized, did they have a
union ? Were their employees in the union ?
Mr. Duffy. Yes, Senator, they were. In fact, Mr. Schaefer and
Mr. McDonald were charter members of local No. 2 of the Gary area.
The charter was issued by the local union in Gary to Mr. Schaefer
and Mr. McDonald. Mr. Schaefer was recording secretary of that
local. All the members of this particular company were union mem-
bers. So actually we have Mr. Schaefer and Mr. McDonald as union
officials giving these gifts.
Senator Capehart. Were they union officials or owners of the busi-
ness?
Mr. Duffy. They were owners of the business and also union
officials.
Senator Capehart. How could they be union officials and owners
of the business both ?
Mr. Duffy. Well, they contend that they repair machines on oc-
casion, so they would be classified as union members, and wear both
hats. J
The Chairman. As I understand, we will have the witnesses here,
the people who formed this partnership, and they should be able to
enlighten us as to how much they invested and how many machines
they started with, and the growth of their business over this period
of time since 1952.
Mr. Duffy. Yes, Mr. Chairman.
The Chairman. If there is any error in our calculations about it,
they will be able to explain it ?
Mr. Duffy. Yes, sir.
The Chairman. Is there anything further ?
If not, you may call the next witness, Mr. Kennedy.
Mr. Kennedy. There is one of the owners, Mr. Chairman, who has
taken oif for — where did he go to ?
Mr. Duffy. South America.
Mr. Kennedy. We tried to get hold of him and he went to South
America. We have the other owner here. I am sure he will en-
lighten Senator Capehart.
His name is Rowland Schaefer.
The Chairman. Come forward, Mr. Schaefer. Be sworn, please.
You do solemnly swear the evidence you shall give before this Sen-
36751r-59— pt. 53 15
18646 IMPROPER ACTIVITIES IN THE LABOR FIELD
ate select committee shall be the truth, the whole truth, and notliing
but the truth, so help you God ?
Mr. ScHAEFER. I do.
TESTIMONY OF ROWLAND SCHAEFER, ACCOMPANIED BY COUNSEL,
STANFORD CLINTON
The Chairman. State your name, your place of residence, and your
business or occupation, please.
Mr. ScHAEFER. My name is Rowland Schaefer. I live at 3451
Glenlake Avenue, Chicago.
(The witness conferred with his counsel.)
The Chairman. What is your business or occupation ?
Mr. Schaefer. With respect to the third part of the question, I
respectfully decline to answer that yuestion on the ground that my
answer may tend to incriminate me.
The Chairman. You have counsel, have you ?
Mr. Schaefer. Yes, I do.
The Chairman. Identify yourself.
Mr. Clinton. My respects, Mr. Chairman. My name is Stanford
Clinton. I am a member of the bar of the State of Illinois, with offices
at 134 North La Salle Street, Chicago, 111.
The Chairman. You have been present here in the committee room
during the testimony of some of the previous witnesses ?
Mr. Schaefer. No, I haven't.
(The witness conferred with his counsel.)
Mr. Schaefer. Do you mean this morning ?
The Chairman. Well, you have been present this morning and
heard some of the testimony given by the previous witnesses, Mr.
Duffy and Mr. Williams?
Mr. Schaefer. Yes, sir.
The Chairman. You heard their testimony ?
Mr. Schaefer. Yes, sir.
The Chairman. Were you present yesterday and did you hear any
of the testimony yesterday ?
(The witness conferred with his counsel.)
Mr. Schaefer. No, I was not present yesterday.
The Chairman. You did not hear the testimony here yesterday?
(The witness conferred with his counsel.)
Mr. Schaefer. I heard parts of it over the radio.
The Chairman. You were not present ?
Mr. Schaefer. I was not present.
The Chairman. You have just been present this morning ?
Mr. Schaefer. That is right, sir.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. Mr, Schaefer, is it correct that you formed local No.
2 of the National Union of Automatic Equipment and Coin Machine
Operators, Servicemen, and Repairmen ?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully decline to answer that question on the
ground that my answer may tend to incriminate me.
Mr. Kennedy. Would he identify this document?
The Chairman. I hand you here what is a docmnent that is desig-
nated "Application for Charter," dated June 22, 1953, apparently
IMPROPER ACTIVITIES IN THE LABOR FIELD 18647
bearing the signature of Eowland Schaefer, under the title of "Gen-
eral Secretary-Treasurer."
I ask you to examine this document and state if you identify it.
As further identification of it, it says :
National Union of Automatic Equipment and Coin Machine Operators, Serv-
icemen, and Repairmen, of 550 Broadway, Gary, Ind., telephone No. 6466, Appli-
cation For Charter.
It is made out in pen and inlc. The form is filled in. I ask you to
examine it and state if you identify it,
(The document was handed to the witness.)
(The witness conferred with his counsel.)
The Chairman. Have you examined the document, Mr. Schaefer?
Mr. Schaefer. Yes ; I have.
The Chairman. Do you identify it?
Mr. Schaefer. I respectfully decline to answer that question on the
ground that my answer may tend to incriminate me.
The Chairman. The documents presented to the witness may be
made exhibit No. 10.
(Documents referred to were marked "Exhibit No. 10" for refer-
ence and may be found in the files of the select committee.)
The Chairman. Did you examine the signature on this document?
(The witness conferred with his counsel.)
Mr. Schaefer. Yes ; I did.
The Chairman. Is that your signature ?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully decline to answer that question on the
ground that my answer may tend to incriminate me.
The Chairman. Do you know John Hanley, Jolm J. Hanley?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully decline to answer that question on the
ground my answer may tend to incriminate me.
The Chairman. He was represented on this as being the business
agent of this local. Do you deny knowing him or having any con-
nection with him ?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully decline to answer that question on the
ground that my answer may tend to incriminate me.
The Chairman. Do you know William Milner ?
Mr. Schaefer. I respectfully decline to answer that question on the
ground that my answer may tend to incriminate me.
The Chairman. Do you know William P. Karanogh? Do you
know him?
Mr. Schaefer. I respectfully decline to answer that question on the
ground my answer may tend to incriminate me.
The Chairman. He was to be recording secretary; Milner to be vice
president. The next name I see here is Rowland Schaefer, to be
financial secretary and treasurer. Do you know him?
(The witness conferred with his counsel.)
Mr. Schaefer. Yes, I do. I am he.
The Chairman. You and the name that appears here as identifica-
tion are one and the same person? You and the Rowland Schaefer
whose name appears here are one and the same person ?
Mr. Schaefer. I decline to answer that question on the ground my
answer may tend to incriminate me.
18648 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. I see. John McDonald was to be president. Do
you know him ?
(The witness conferred with his counsel.)
Mr. ScHAEFER. I respectfully decline to answer that question on the
grounds my answer may tend to incriminate rue.
The Chairman. Further down here it gives the address of all these
people. Could you give us any enliglitenment whatsoever as to what
there is about these people and your association with them, and this
union and your participation in it, that becomes now embarrassing
or likely to incriminate you if you made any statement about it or
acknowledged anything about it ? Can you tell us what it is ?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully decline to answer that question on
the grounds my answer may tend to incriminate me.
Mr. Kennedy. Mr. Chairman, this other document shows that they
purchased 1,000 labels at 5 cents per label, for $150. There were only
five members of the miion.
Can you explain how that operated?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully
The Chairman. Let me present this document to you. The docu-
ment I now present to you seems to be a mimeographed form that has
been filled out in pen and ink, apparently signed by Rowland Schaefer,
the same person who made application for the charter of the miion.
This seems to be dated July 1, 1953.
It says, "Official quarterly report and order blank." I ask you to
examine it. It bears some kind of a union seal, I believe. I ask you
to examine it, together with the attached memorandmn to it, and state
if you identify either of them or both.
(The documents were handed to the witness.)
( The witness conferred with his counsel. )
Mr. Schaefer. I respectfully decline to answer that question.
The Chairman. The documents may be made exhibit No. 11.
(Documents referred to were marked "Exhibit No. 11" for reference
and may be found in the files of the select committee.)
The Chahiman. Incidentally, I hold in my hand what purports
to be an application for membership in the imion, application to
become a member of this union. It appears to be signed by Robert —
well, that is not material.
You are sometimes called Bob, too, Rowland ?
Mr. Schaefer. Yes, sir.
The Chahjman. You sometimes use Robert in making applications,
do you ?
(The witness conferred with his counsel.)
Mr. Schaefer. I respectfully decline to answer that question on
the ground it may tend to incriminate me.
The Chairman. You almost had me confused here. I present to you
an application for membership signed Robert Schaefer. I will ask
you to examine that and state if it is yours.
(The document was handed to the witness.)
(The witness conferred with his counsel.)
Mr. Clinton. Mr. Chairman, is there a pending question, sir?
The CHAHiMAN. Yes. I asked him to examine this application and
state if it is his application.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18649
(The witness conferred with his counsel.)
Mr. ScHAEFER. I respectfully decline to answer on the ground that
my answer might tend to incriminate me.
The Chairman. It may be made exhibit No. 11-A.
(Document referred to was marked "Exhibit No. 11-A" for ref-
erence and will be found in the appendix on p. 18781.)
The Chairman. Now, I present to you another application for
charter dated June 26, 1953, the charter of Workers Employed,
Operators, Service and Eepairmen, Cook County jurisdiction and
vicinity. It also appears to have been signed by Rowland Schaefer,
local union secretary.
I ask you to examine it and state if you identify it.
(The document was handed to the witness.)
(The witness conferred with his counsel.)
The Chairman. Is that your application and signature ?
Mr. Schaefer. I respectfully decline to answer that question on
the ground my answer may tend to incriminate me.
The Chairman. That may be made exhibit No. 11-B.
(Document referred to was marked "Exhibit No. 11-B" for ref-
erence and may be found in the files of the select committee.)
The Chairman. You may proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Schaefer, you received these 1,000 labels for 5
cents apiece. Could you tell us what the purpose of that was?
Mr. Schaefer. I respectfully decline to answer that question on the
grounds my answer may tend to incriminate me.
The Chairman. Are they the labels that you stamp the machines
with, so that when you go in and look, you know the machine has paid
its tribute to the union ?
(The witness conferred with his counsel.)
Mr. Schaefer. I decline to answer that question.
The Chairman. Wliat the union did was take these and sell them to
the owners or operators, or the operator of the location where the
machine was placed ; is that correct ?
Mr. Schaefer. I respectfully decline to answer that question.
The Chairman. That is simply a revenue-raising device, is it not ?
Mr. Schaefer. I respectfully decline
The Chairman. It is a tax that your union places on each machine
so as to get in more revenue ; isn't that correct ?
Mr. Schaefer. I respectfully decline to answer that question.
The Chairman. In other words, as a union member, in fact as a
union officer there, you remember how it operated, I am quite confi-
dent. I don't want to get anything into the record that would be
erroneous.
You would buy these — what do you call them — labels? Then here
is a man who is operating. He has a restaurant with 10 machines in
there. You make him join the union. He becomes a member of the
union, and then per machine he has to buy a label in order for that
machine to be legally operated from the union standpoint. Is that
about the way it is done ?
Mr. Schaefer. I respectfully decline to answer that question on the
ground that my answer might tend to incriminate me.
The Chairman. What would incriminate you about that?
(The witness conferred with his counsel.)
18650 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. ScHAEFER. I decline to answer that question on the ground my
answer may tend to incriminate me.
The Chairjvian. I don't know. Is there anything wrong? It
seems to be done whether there is anything wrong or not. You have
given me the impression, maybe, that there is something you think is
wrong about it, for the union to use a label like this as kind of a
license for someone to operate a machine.
If there is something wrong about it, maybe there ought to be a
little legislation along that line. If not, it would be a grand oppor-
tunity here for a fine union official to clear up the mystery about it.
Will you help us in that respect ?
(The witness conferred with his counsel.)
Mr. ScHAEFER. I respectfully decline to answer that question on the
ground my answer may tend to incriminate me.
The Chairman. All right, Mr. Kennedy ; proceed.
Senator Capeiiart. Mr. Chairman?
The Chairman. Senator Capehart.
Senator Capehart. What is the difference between local No. 1
operated by John Testo and this local No. 2? Are they both one
and the same, or are they two different unions?
Mr. Schaefer. I respectfully decline to answer that question. Sen-
ator.
Senator Capehart. Wasn't John Testo the business agent for this
local No. 2?
Mr. Schaefer. I respectfully decline to answer that question on the
grounds that my answer might tend to incriminate m.e.
Mr. Kennedy. According to our information, your original invest-
ment in this company in 1952 was $3,108. The earnings for the first
year were $25,500, and your earnings from 1952 through 1957, you,
yourself, have made $221,882.97 out of this initial investment of $3,108 ;
is that correct?
Mr. Schaefer. I respectfully decline to answer that question on the
grounds my answer may tend to incriminate me.
Mr. Kennedy. $25,000 for 1953, $46,000 for 1954, $43,000 for 1955,
$31,000 for 1956, $43,000 for 19— for 1957 you reorganized in the
beginning of the year and you made $23,000 in the beginning and
$4b,000-some in the last part of the year. Altogether it is some
$220,000.
Can you tell the committee how you were able to operate, as these
machines were illegal, how it was you were able to operate ?
Mr. Schaefer. I respectfully decline to answer that question on the
grounds my answer might tend to incriminate me.
The Chairman. Did you pay off' officers to get them to let you
operate ?
Mr. Schaefer. I respectfully decline to answer that question on the
ground my answer might tend to incriminate me.
The Chairman. This situation kind of casts a strong suspicion.
Here is an illegal operation, and here are officers and prosecutors get-
ting a lot of money. Then they come here and say it is none of the
committee's business.
You come in and can helj) clear it up if the truth would not hurt,
and say, "Well, this whole thing is legitimate. We are operating open
and above board. We are paying off somebody." Are you willing
IMPROPER ACTIVITIES IN THE LABOR FIELD 18651
to say that you haven't been paying off officers? Are you willing to
state that under oath?
Mr. ScHAEFER. I respectfully decline to answer that question on the
ground my answer might tend to incriminate me.
The Chairman. I don't know what you expect the public to think
about such a statement as that. If you haven't been, there is no reason
why you can't say, "I never paid them a dime," just like that. Can
you say it under oath?
Mr. ScHAEFER. I respectfully decline to answer that question on the
ground my answer might tend to incriminate me.
The Chairman. Is he one of the partners in this business organ-
ization ?
Mr. Kennedy. That is correct.
The Chairman. In addition to running the union, he ran a business,
too?
Mr. Kennedy. That is correct.
The Chairman. What was the name of the other one ?
Mr. Kennedy. Mr. McDonald.
The Chairman. What is this Lakeside Specialty Co. ? Have you
ever heard of that before ?
Mr. ScHAEFER. I respectfully decline to answer that question on the
ground my answer might tend to incriminate me.
The Chairman. Were you one of the organizers of the Lakeside
Specialty Co. ?
Mr. ScHAEFER. I respectfully decline to answer that question on the
ground that my answer might tend to incriminate me.
The Chairman. Did you have as a partner and associate in that
enterprise a man by the name of Kenneth McDonald or John Mc-
Donald ?
Mr. ScHAEFER. I respectfully decline to answer that question on
the ground my answer might tend to incriminate me.
The Chairman. Which is his correct name — John or Kenneth ?
( The witness conferred with his counsel. )
Mr. ScHAEFER. I respectfully decline to answer that question on
the ground my answer might tend to incruninate me.
The Chairman. How could it incriminate you, whether his name
was John or Kenneth? What difference would it make? Which
would incriminate and which wouldn't ? It soimds sort of silly, doesn't
it ? You agree, don't you ? Take a good laugh.
Mr. ScHAEFER. I respectfully decline to answer that question on
the ground my answer might tend to incriminate me.
The Chairman. These are the two that started the business. Was
there any other ?
Mr. Kennedy. They started the business, Mr. Chairman, at the
same time they started the union, local No. 2.
The Chairman. That is the labor angle of it, the union. But the
business angle is this Lakeside Specialty Co., and there were only
two partners in that. Is that according to our information ?
Mr. Kennedy. As of 1957. Initially there were some other partners.
The Chairman. Who else was in the business with you initially
when it was organized ?
(The witness conferred with his coimsel.)
Mr. Schaefer. I respectfully decline to answer that question on
the ground my answer might tend to incriminate me.
18652 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Were they Mr. Eizzo and Mr. Powers? Would
that refresh your memory ?
Mr. ScHAEFER. I respectfully decline to answer that question on
the ground my answer might tend to incriminate me.
The Chairman. Is it true that you only have one partner now, and
that is Mr. McDonald ?
Mr. ScHAEFER. I respectfully decline to answer that question on
the ground my answer might tend to incriminate me.
The Chairman. Do you know Mr. McDonald, your business
associate ?
Mr. Schaefer. I respectfully decline to answer that question on
the grounds my answer might tend to incriminate me.
The Chairman. Where is he now ?
( The witness conferred w ith his counsel. )
Mr. Schaefer. I respectfully decline to answer that question on
the ground that my answer may tend to incriminate me.
The Chairman. Is there anything further, Mr. Counsel ?
Mr. Kennedy. That is all.
The Chairman. Have you anything to ask, Senator Capehart?
Senator Capehart. No, Mr. Chairman.
The Chairman. Is there any testimony you heard here this morn-
ing that you want to refute or deny ?
(The witness conferred with his counsel.)
The Chairman. You heard the testimony of these witnesses?
( The witness conferred with his counsel. )
Mr. Schaefer. I respectfully dexiline to answer that question on
the ground my answer may tend to incriminate me.
The Chairman. Then as I understand you, you decline to deny
what the witnesses testified to here about all these gifts to these officers
on the ground that if you denied it, it might tend to incriminate you ?
Is that your position ?
(The witness conferred with his counsel.)
Mr. Schaefer. Yes, sir.
The Chairman. You may be correct about it.
Is there anything further ?
Mr. Kennedy. Did you give any gifts to Mr. Metro Holovachka?
Mr. Schaefer. I decline to answer that question — I respectfully
decline to answer that question on the ground that my answer might
tend to incriminate me.
The Chairman. Did you make any gifts to any of the city officials
or any of tlie comity officials in Lake County ?
Mr. Schaefer. I respectfully decline to answer that question on
the ground that my answer might tend to incriminate me.
The Chairman. Did you make any gifts to Mr. Conroy, Mr.
Holovaclika's assistant ?
Mr. Schaefer. I respectfully decline to answer that question on
the ground my answer might tend to incriminate me.
The Chairman. Do you have any information about the source of
the tremendous amount of cash Mr. Holovaclika dealt with?
Mr. Schaefer. I respectfully decline to answer that question on the
ground my answer might tend to incriminate me.
The Chairman. In other words, if you told what you knew about
it, you honestly believe under oath it might tend to incriminate you ?
(The witness conferred with his counsel.)
IMPROPER ACTIVITIES IN THE LABOR FIELD 18653
Mr. ScHAEFER. I respectfully decline to answer that question on
the gi'ound my answer mig'ht tend to incriminate me.
The Chairman. I will order you to answer that question. I am
asking if you honestly believe. I don't think you have a right to sit
up here and invoke the fifth amendment capriciously. If you honestly
believed that if you answered the question that a truthful answer
might tend to incriminate you — do you honestly believe that ?
(The witness conferred with his counsel.)
The Chairman. I am trying to determine whether you are perjuring
yourself or whether you are honest.
Mr. Clinton. We are trying to figure out whether it is a negative
or an affirmative, Mr. Chairman.
The Chairman. I asked him originally whether he wanted to deny
any of these gifits. Then I went to the question of the money, the
excessive amount of money or cash dealt with by Mr. Holovachka. I
asked you whether you could give any accounting of that money. You
said if you answered that it might tend to incriminate you.
I ask you now if you honestly believe that if you gave a truthful
answer to that question, that a truthful answer might tend to in-
criminate you.
(The witness conferred with his counsel.)
Mr. ScHAEFER. Yes, sir.
The Chairman. Then that is some justification, then, for not
answering. You believe if you told the truth about what you know
about the source of this excess money, excess amount of cash, that a
truthful answer thereto might tend to incriminate you. All right;
that is correct.
Proceed.
Mr. Kennedy. Mr. Powers.
The Chairman. Mr. Powers, you do solemnly swear 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. Powers. I do.
TESTIMONY OF JOHN POWEES, ACCOMPANIED BY COUNSEL,
STANFORD CLINTON
The Chairman. State your name, your place of residence, and your
business or occupation.
Mr. Powers. My name is John Powers. My residence is 129 South
Marion Street, Oak Park, 111. I am a bartender.
The Chairman. You are a what ?
Mr. Powers. A bartender.
The Chairman. Thank you very much.
You have counsel ?
Mr. Powers. I have.
The Chairman. Let the record show that Mr. Clinton represents
Mr. Powers.
Proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Powers, were you associated at one time with the
Lakeside Co. ?
(The witness conferred with his counsel.)
Mr. Powers. I respectfully decline to answer on the ground that
the answer I give may tend to incriminate me.
18654 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Mr. Chairman, could I call Mr. Duffy in connection
with the information we have on this ?
The Chairman. All right, Mr. Duffy.
Mr. Kennedy. I might say Mr. Powers cooperated with the staff
initially. Mr. Duffy will explain what information we received at
that time.
The Chairman. May I ask you, Mr. Powers, do you know Mr.
Duffy, the witness here, a member of the staff ?
(The witness conferred with his counsel.)
Mr. Powers. Yes, sir ; I do.
The Chairman. You have had conversations with him, have you?
Mr. Powers. Yes ; I have.
The Chairman. Proceed.
TESTIMONY OF La VEEN J. DUFFY— Resumed
Mr. Duffy. I had the opportunity to interview Mr. Powers in
Gary, Ind., about a month ago. At that time he was completely
frank and told the complete story of his relationship with the Lake-
side Specialty Co. in East Chicago. After the interview, I asked him
if he would consent to a taped interview, and he said he would. He
said also at the end of that interview that he would be glad to testify
freely to all the facts he gave to me during the course of that inter-
view if he was called to Washington.
Mr. Kennedy. You did take a taped interview in connection with
him?
Mr. Duffy. I did.
Mr. Kennedy. An interview he knew was taped ?
Mr. Duffy. That is correct.
Mr. Kennedy. I don't think it is necessary to play it, Mr. Chairman,
but he has a tape to back up his testimony.
The Chairman. Do you have a transcript of that tape recording ?
Mr. Duffy. No; I don't. We have it in the committee files, the
actual tape interview.
The Chairman. Are you going to quote from that tape recording ?
Mr. Duffy. I was going to summarize certain points extracted
from it.
The Chairman. Mr. Powers, you pay very close attention. I am
going to permit the witness to summarize that tape recording from
his version of it. If there is anything you find in there that you say
is inaccurate or isn't true, then we have the recording and it can be
the best proof. But unless this statement is challenged, it will stand
as the record. Of course, the tape recording is the property of the
committee and can always be referred to. This is just to try to ex-
pedite it.
Proceed.
Mr. Kennedy. Mr. Duffy, you had a very frank interview with Mr.
Powers, and he had indicated that he would testify. Did we receive
some information recently as to why he would not testify ?
Mr. Duffy. Yes. A staff member interviewed Mr. Powers within
the past week and he stated at that time that he had an 8-year-old
child and he didn't want to come up here and tell everything.
Mr. Clinton. What was that again, Mr. Kennedy ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18655
Mr. Duffy. Mr. Powers had an 8-year-old child, and he didn't
want to come up here and tell the complete story.
Mr. Kennedy. That was witliin the last week ?
Mr. Duffy. Yes.
Mr. Kj3nnedy. Would you relate what he told you at that time in
connection with the operations of the company ?
Mr. Duffy. In our interview, he stated he had met Mr. Frank
Rizzo, also a partner of Lakeside, in 1952, in the latter part. He said
he had discussions with Mr. Eizzo and that Mr. Schaefer had made
some arrangements in East Chicago to set up and operate pinballs in
the area, and that some arrangements had been made by Mr. Schaefer
for this to take place.
He came into the company at that time and invested 20 percent in
the company, a total of $2,072. He had control over 35 pinball
machines in the East Chicago area ; that he made weekly collections
from these locations.
The Chairman. How many machines ?
Mr. Duffy. Thirty-five machines that he had control over.
He also said that Mr. Schaefer told him not to keep individual
location records, that he never kept any records. He also said that
the payouts were made by the location owners, which would be in
violation of the law, and that the cost of the payoff was sustained
half by the company and half by the location owner.
The profits were split 50-50.
The Chairman. You are talking about the payoffs, the winnings
from the operation of the machines ?
Mr. Duffy. That is correct.
The Chairman. They would simply deduct that as an expense.
Tlie location owner would sustain half of that loss and they would
sustainhalf of it?
Mr. Duffy. That is correct; and split the remainder 50-50.
That is the substance of the interview. I thought it very important
when he said he was told not to keep any records by Mr. Schaefer.
Mr. Kennedy. Is that correct, Mr. Powers ?
TESTIMONY OF JOHN POWERS, ACCOMPANIED BY COUNSEL,
STANFORD CLINTON— Resumed
Mr. Powers. I respectfully decline to answer on the grounds that
the answer I give may tend to incriminate me.
The Chairman. Did you have a conversation with Mr. Duffy ?
(The witness conferred with his counsel.)
Mr. Powers. Yes ; I did, sir.
The Chairman. Then did you know that the conversation or inter-
view with you was being recorded ?
(The witness conferred with his counsel.)
Mr. Powers. I respectfully decline to answer on the gi'ound that
the answer I gave may tend to incriminate me.
The Chairman. How could that incriminate you? We have the
record. It is in existence. We have it. It will speak for itself.
Mr. Powers. I respectfully decline to answer on the grounds that
the answer I gave may tend to incriminate me.
The Chairman. Do you want to deny anything that Mr. Duffy has
said here about that interview this morning ?
18656 IMPROPER ACTIVITIES IN THE LABOR FIELD
(The witness conferred with his counsel.)
Mr. Powers. I respectfully decline to answer on the grounds that
the answer I gave may tend to incriminate me.
The Chairman. It wouldn't incriminate you if you would deny it.
If you want to deny it, you are offered that opportunity.
Is there anything in error, is there anything you challenge about
his statements? We can play the recording and see if he is mistaken.
Mr. Powers. I respectfully decline to answer on the ground that
the answer I gave may tend to incriminate me.
The Chairman. Do you want to challenge any statement he has
made?
Mr. Powers. I respectfully decline to answer on the ground that
the answer I gave may tend to incriminate me.
Mr. Kennedy. You are out of the company and there is nothing
that you have done that is wrong. Wouldn't you give us the informa-
tion yourself under oath ?
Mr. Po^\t:rs. I respectfully decline to answer on the grounds that the
answer I gave might tend to incriminate me.
The Chairman. Did you know they were paying off officers of
the law in order to get the privilege of operating these machines ?
Mr. Powers. I respectfully decline to answer on the grounds that the
answer I gave might tend to incriminate me.
The Chahiman. Did it turn out to be a profitable venture ?
Mr. Powers. I respectfully decline to answer on the grounds that
the answer I gave may tend to incriminate me.
The Chairman. Well, all right.
Is there anything further ?
TESTIMONY OF LaVERN J. DUFF?— Resumed
Mr. Duffy. There is one other point.
He stated to me also that the cost of the $250 Federal gambling
stamp that each machine had, complying with Federal statute, half
of the cost was sustained by the location owner and half was sustained
by the company. This is significant because in Indiana they have a
gross sales tax in Indiana, and this would mean that they were fudging
a little bit on their State income tax by not reporting the amount of
money, total money, collected. I think those records are of additional
significance to us. That is why we wanted to obtain them from the
company.
The Chairman. Do you mean they would be due to pay the State
of Indiana a sales tax on the income from those machines ?
Mr. Duffy. That is correct. By taking money off the top, they
reduced the amount of money they would owe the State.
The Chapman. By what?
Mr. Duffy. By taking money off the top — without reporting it—
they would reduce the amount of money they would pay the State.
The Chairman. If they reported less, then, that would naturally
reduce their tax.
Mr. Duffy. That is correct.
The CiiAmMAN. Wliat is that tax ? Do you remember ?
Mr. Duffy. I don't remember.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18657
The Chairman. That might be almost insignificant as compared
to some other things. I imagine people in this business are not over-
anxious to pay tax if they can avoid it.
All right.
Mr. Duffy. Mr. Powers did state that all these machines were
gambling-type machines and they did pay off in violation of the law.
Mr. IvENNEDY. That is all.
The Chairman. Is there anything further?
If not, thank you, Mr. Powers.
Call the next witness.
Mr. Kennedy. Mr. Rizzo.
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. Rizzo. I do.
TESTIMONY OF FRANK RIZZO, ACCOMPANIED BY COUNSEL,
STANFORD CLINTON
The Chairman. State your name, your place of residence, and
your business or occupation.
Mr. Rizzo. Frank Rizzo, 8831 South Paxton, Chicago.
(The witness conferred with his counsel.)
Mr. Rizzo. On the third part of the question. I respectfully decline
to answer the question on the ground that my answer may tend to
incriminate me.
The Chairman. You honestly believe if you told the kind of busi-
ness you are in, an honest and truthful answer might tend to incrim-
inate you ?
(The witness conferred with his counsel.)
Mr. Rizzo. Yes, sir.
The Chairman. Very well ; proceed.
Mr. KJENNEDY. Mr. Rizzo, I have here an application for member-
ship in, I believe, local No. 2, local union No. 3. It says you trans-
ferred from local No. 1.
The Chairman. I hand you here an application for membership,
two of them. One of them is made out in pen and ink, dated June 7,
1955. Underneath is written in a different writing, "Local Union No.
3."
The other is made out in pencil, dated April 18 — well, I am unable
to find the date on it. But apparently it is signed by Frank Rizzo.
Oh, yes ; it is dated November 1952, with the date blank as to the
date of the month. It is local union No. 1.
I ask you to examine these two application forms and see if you
identify them. The first one I referred to has marked on the top of
it, "Transferred from Local 1."
(The documents were handed to the witness.)
(The witness conferred with his counsel.)
Mr. Rizzo. I respectfully decline to answer on the ground that
the answer may tend to incriminate me.
The Chairman. You have examined both applications to which
the Chair referred?
Mr. Rizzo. Yes, sir.
18658 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. All right. That can be made exhibits 12A and
12B.
(Documents referred to were marked "Exhibits No. 12A and 12B"
for reference and will be found in the appendix on page 18782 and
18783.)
Mr. Kennedy. Mr. Rizzo, as a union member you were also an of-
ficer in the company and invested, according to our records, $2,072,
and from the year 1952 to 1957, from the operation of these gambling
machines, you made, according to the records, $58,467.21. Is that
correct ?
Mr. Rizzo. I respectfully decline to answer on the ground that
my answer may tend to incriminate me.
The Chairman. Before we proceed further, let me ask you a ques-
tion I should have asked the other witnesses, too, maybe.
Wliat is the purpose of this union, and then this business connection ?
Is it the purpose of operating the union along with operating this
Lakeside Specialty Co. just as kind of a sham, kind of a protection
against legitimate unionism? In other words, you set yourself up
in a union so that no other union can come along and organize any of
your employees; is that it?
Mr. Rizzo. I respectfully decline to answer on the ground that my
answer may tend to incriminate me.
The Chairman. Is the union operation as profitable, except you are
able to operate these gambling machines ?
Mr. Rizzo. I respectfully decline to answer on the ground that my
answer may tend to incriminate me.
The Chairman. I am talking about this particular field. It seems
to me that the legitimate eligibility of membership would be restricted
to those who repair the machines, from the standpoint of an honest
labor union to protect workers, and that it would not extend to, and
should not be extended to, coverage of people who own machines and
who may lease them out or who may operate a business, and who
may have the machines in their location.
I don't see how a union could give any benefits, how any benefits
could be derived by the member to that extent, except and unless the
man actually works on the machines and is paid for his time. I am
trying to understand.
I would be glad if you would explain it, if you can, and if you will.
What was the advantage of leaving a union along with the operation
of this gambling business ?
Mr. Rizzo. I respectfully decline to answer on the ground my an-
swer may tend to incriminate me.
The Chairman. I can hardly conceive of anything except that it is
to protect the gambler, the fellow who owns the machine, and not to
render any benefit or real service to the man who works.
If you can tell me there was a service and benefit from it, these
unions that you were in, to the man who worked, I would like for you
to tell us what it is.
Mr. Rizzo. I respectfully decline to answer on the grounds that my
answer may tend to incriminate me.
The Chairman. On the fact of it, it looks like a racket just a skin-
flint game of some cheap gamblers who are exploiting in this field,
possibly by bribing officers, and so forth, in order to pennit them to
operate in violation of law.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18659
Have you any comment to make about that? If I am in error, will
you correct me ?
Mr. Rizzo. I decline to answer — I respectfully decline to answer on
the ground that my answer may tend to incriminate me.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy, You terminated your interest as a partner at the
time of Kenneth McDonald's entry as a partner in 1954 and then went
on the payroll as an employee. Can you tell us why that was done?
Mr. Eizzo. I respectfully decline to answer on the ground that my
answer may tend to incriminate me.
Mr. Kennedy. Can you tell us how you have been able to operate
these machines, even though they are gambling machines, in East
Chicago ?
Mr. Rizzo. I respectfully decline to answer on the ground that my
answer may tend to incriminate me.
Mr. Ivennedy. Can you tell us why instructions were given that no
records should be kept of the collections ?
Mr. Eizzo. I respectfully decline to answer on the ground that my
answer may tend to incriminate me.
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. Is there anything further ?
All right, stand aside. Call the next witness.
Mr. Kennedy. Mr. Peters.
The Chairman. Com,e forward, Mr. Peters.
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. Peters. I do.
TESTIMONY OF TED PETERS, ACCOMPANIED BY COUNSEL,
STANFORD CLINTON
The Chairman. State your name, your place of residence, and busi-
ness or occupation.
Mr. Peters. I am Ted Peters. I reside at 4802 Elm Street, East
Chicago, Ind.
The Chairman. Have you any business ?
Mr. Peters. I respectfully decline to answer on the ground that the
answer I may give may tend to incriminate me.
The Chairman. Let the record show Mr. Clinton appears as coun-
sel for the witness.
All right ; proceed, Mr. Kennedy.
Mr. Kennedy. Mr. Peters, you were also connected directly with
the Lakeside Sales Co. ; is that correct?
(The witness conferred with his counsel.)
Mr. Peters. I respectfully decline to answer on the ground that the
answer I gave may tend to incriminate me.
Mr. Kennedy. Could I call Mr. Sinclair to give briefly what the
situation as far as Mr. Peters is ?
18660 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
The Chairman. You have been previously sworn ?
Mr. Slnclair. Yes, I have, Senator.
The Chairman. All right.
Mr. Sinclair. Mr. Peters has control over pinball machines in the
clubs in the city of East Chicago and Indiana Harbor. He maintains
this control through his association with Slaboski, who is town coun-
cilman, and justice of the peace at the present time, and Art Golden.
The income received by Mr. Slaboski for the year 1958 from this
operation of Mr. Peters was $3,000. Mr. Golden received $3,200 in
1956 and $3,400 in 1955 from this operation.
Mr. IvENNEDY. What position did Mr. Slaboski hold at the time?
Mr. Sinclair. Mr. Slaboski, prior to January 1, 1959, was town
councilman for East Chicago.
Mr. Kennedy. What position does he hold at the present time ?
Mr. Sinclair. At the present time he is justice of the peace.
Mr. Kennedy., We expected him as a witness today ?
Mr. Sinclair. We expected him as a witness, but in the last week
we have been unable to reach him. He is a silent partner in this
operation.
Mr. Kennedy. He is a silent partner in this operation ?
Mr. Sinclair. That is correct.
TESTIMONY OF TED PETERS, ACCOMPANIED BY COUNSEL.
STANFORD CLINTON— Resumed
Mr. Kennedy. Can you t«ll us about that, Mr. Peters ?
Mr. Peters. I respectfully decline to answer on the grounds that
the answer I may give may tend to incriminate me.
Mr. Kennedy. As I understand it, you were a partner of the Lake-
side Co., and then you brought in Mr. Slaboski as a silent partner in
your operation ; is that correct ?
Mr. Peters. I respectfully decline to answer on the ground that
the answer I give may tend to incriminate me.
Mr. Kennedy. Just break down the profits for us briefly, Mr. Sin-
clair.
Mr. Sinclair, Thirty machines were under the control of this
group, and the total take from the location owners, which were the
clubs in East Chicago, was split 50-50. That is, the Golden-Slaboski-
Peters group got 50 percent of the take, and the remaining 50 percent
was turned over to the Lakeside Specialty Co.
Lakeside, in addition to furnishing the machines to this group
without cost, bought the gambling stamps and furnished the parts
to Peters' operation.
Mr. Kennedy. Slaboski, as we imderstand it, never performed any
services in connection with this ?
Mr, Sinclair. Not that we could discover, Mr. Kennedy.
Mr. Kennedy. That is all.
I would like to call Mr. Mundie, Mr. Chairman, to put some further
figures in in connection with this company.
I have finished with Mr. Peters.
The Chairman. Mr. Peters, you may stand aside.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18661
Have you been sworn ? Do you solemnly swear that the testimony
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. MuNDiE. I do.
TESTIMONY OF JAMES F. MUNDIE
Mr. ICennedy. Mr. Mmidie, have you made an examination of the
Lakeside Co. ?
Mr. MuNDiE. I have.
Mr. IvENNEDY. Do we find that the Lakeside Co. actually reported
all of their income, and the partners of the company ?
Mr. MuNDiE. We find that the reconcilation of the partnership re-
turns— we find that during the year 1957 Mr. Rowland Schaefer failed
to report salary in the year 1957 in the amount of $14,500, and his
partnership income in the amount of $8,769.66, making a total of
$23,269.66.
Mr. Kennedy. Is he the only one ?
The Chairman. Do you mean in tliis operation they haven't been
reporting their income ?
]\Ir. Mundie. The individual partners failed to report their income
for 1957 in the Lakeside Sales Co.
Mr. Kennedy. Go ahead.
Mr. Mundie. In the reconciliation of Mr. McDonald's partnership
of Lakeside Sales, he failed to report $17,701.77.
The Chairman. For what period ?
Mr. Mundie. For the year 1957. And Mr. Gilbert Kitt
The Chairman. These matters will be brought to the attention of
the Internal Revenue Service, if it has not already come to their at-
tention ?
Mr. Mundie. It has not come to their attention as yet.
The Chairman. Well, it has now.
Mr. Mundie. Mr. Gilbert Kitt
Mr. Kennedy. I might say, Mr. Cliairman, that the amount of
money they can recover from this will pay for the investigation.
The Chairman. You mean the amount of money if the tax is re-
covered ?
Mr. Mundie. Yes. They are in about the 65 percent bracket.
The Chairman. That would be adequate to pay for the cost of
this particular investigation?
Mr. Kennedy. Plus.
Mr. Mundie. Mr. Gilbert Kitt failed to report $3,768.67 in 1957
from the Lakeside Sales Co.
The Chairman. You are reporting the amount of income now and
not the amount of tax ?
Mr. Mundie. That is correct.
The Chairman. The amount of income should have been reported ?
Mr. Mundie. Yes. The amount of tax would be about 65 percent
of it.
Mr. Kennedy. How much is the total ?
Mr.MuNDm. Over $40,000.
Mr. Kennedy. Over $40,000 ?
Mr. Mundie. Yes.
36751— 59— pt. 53 16
18662 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. Over $40,000 in income ?
Mr. MuNDiE. Over $40,000 in income. Of course, with the taxes,
it would be tax, interest, and penalties.
Mr. Kennedy. That is all, Mr. Chairman,
The Chairman. The committee will stand in recess until 2 o'clock.
(Members of the select committee present at time of recess: Sena-
tors McClellan and Capehart.)
(Whereupon, at 12 noon the select committee recessed, to recon-
vene at 2 p.m. the same day. )
afternoon session
The select committee reconvened at 2 p.m., Senator John L. Mc-
Clellan (chairman of the select committee) presiding.
The Chairman. The committee will come to order.
(Members of the select committee present at time of reconvening:
Senators McClellan and Church.)
The Chairman. Mr. Holovachka, come back to the stand, please,
sir.
(At this point Senator Capehart entered the hearing room.)
TESTIMONY OF METRO M. HOLOVACHKA— Resumed
The Chairman. Mr. Holovachka, yesterday we had some testimony
here regarding the subpena and some papers that were in the posses-
sion of one Frank J. Smith, on whom a subpena duces tecum was
served.
The Chair overlooked at that time asking Mr. Smith to identify
the subpena. But we have a witness here. Have you been sworn?
Mr. Thiede. Yes, sir ; I have.
Mr. Holovachka. I will stipulate, Senator, that Mr. Thiede did
serve a subpena on Mr. Smith.
The Chairman. All right.
TESTIMONY OF JOHN T. THIEDE— Resumed
The Chairman. I ask you, Mr. Thiede, to examine this subpena and
state if you identify it as a copy of the subpena you served, and if
you made the return thereon.
(The document was handed to the witness.)
Mr. Thiede. Yes, Mr. Chairman, this is the subpena I served.
The Chairman. This is the subpena you served on Mr. Smith ?
Mr. Thiede. That is right.
The Chairman. Following the service of that subpena — that sub-
pena may be made exhibit No. 13.
(Subpena referred to was marked "Exhibit No. 13" for reference
and may be found in the files of the select committee.)
The Chairman. Following the service of that subpena, did Mr.
Smith procure the papers that it called for or some papers and
documents in response thereto ?
Mr. Thiede. He had some docimients in his possession which were
called for by the subpena ; yes, sir.
The Chairman. Did he have them in his physical possession, there
in your presence ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18663
Mr. Thiede, Yes, sir.
The Chairman. You heard him testify yesterday that in the course
of that proceeding, after the subpena had been served on him, and
after you had worked out an arrangement with him whereby you
would take the file and the documents and give him a receipt there-
for, that Mr. Holovachka came in and took the papers himself, and
departed with them. Is that testimony correct ?
Mr. Thiede. Yes, it is.
TESTIMONY OF METRO M. HOLOVACHKA— Resumed
The Chairman. Mr. Holovachka, the Chair now asks you where are
these docmnents and papers that you took ?
Mr. Holovachka. I have them in my brief case, Senator.
The Chairman. The Chair asks you to present the papers.
Mr. Holovachka. I might say to you, Senator, that the information
contained in those papers is in the possession of the committee and
has been entered as part of the evidence here, and, furthermore, I
would make the same objection which I made yesterday. If the Sen-
ator cares, I will read it.
The Chairman. Objections are entered as stated yesterday.
The objections are overruled. The Chair, with the approval of the
committee, now orders and directs you to deliver over to this com-
mittee in open session these documents, the entire file and documents,
that you took from Mr. Smith after this subpena had been served on
him.
Mr. Holovachka. Here is the entire file as it was given to me.
(The folder was handed to the committee. )
The Chairman. Does this folder which I hold in my hand, which
you have just handed to the clerk, and which she has passed on to me,
does this folder, this file, contain all of memorandums, documents, and
material that you took possession of at the time or shortly after the
subpena was served on Mr. Smith ?
Mr. Holovachka. That is correct. Senator.
The Chairman, Mr. Thiede, you will take these documents and
examine them, and prepare a receipt for them, showing that they
were delivered here today mider the direction of the committee.
Mr. Thiede, Yes, sir.
Mr. Holovachka. Senator, could I have those back at an early
date ? As I have previously stated, I am in need of those, and I felt
that they were my papers.
The Chairman. We will try to cooperate with you in that respect
just a little better than you have cooperated with us.
Mr. Holovachka. Thank you. Senator,
The Chairman. How soon you will get them back, I don't know.
But they will have to go back, of course, to Mr. Smith when they go
back.
Mr, Holovachka. But those are my papers.
The Chairman. That is between you and him. We got them from
him. We subpenaed them from him. That is where we found them.
You may be correct; they may be your papers. Some of them may
be yours and some of them may be his.
All right. Is tliere anything further at this time of this witness?
Mr, Kennedy. No.
18664 IMPROPER ACTIVITIES IN THE LABOR FIELD
The CnAiRMAN. While you are on the stand at this moment, we
may want to recall you, since you heard testimony here this morning
regarding gifts made to you by certain people. Do you want to make
any comments about them ?
Mr. HoLOVACHKA. Yes, Senator. I don't know these people. This
Mr. Schaefer, the first time I have ever seen him in my life was here
in this chamber. The otlier people also, Mr. Eizzo, Mr. Powers and —
was there another man ? Was there another man, Mr. Kennedy, who
testified this morning besides Rizzo and Powers ?
Mr. Kennedy. Some four individuals were in the company. Mr.
McDonald, Mr. Rizzo
Mr. HoLOvACHKA. I have never met, I have never talked to any of
those individuals. Today was the first time I have seen any of those
people. Insofar as these gifts are concerned, I have no recollection,
but they may have been delivered to the home.
I will say this to the Senator : That at Christmas time I get quite a
few gifts from friends, from people who are in business in our com-
munity and so forth, and I don't keep an accurate tab on those things.
It is possible that those gifts were delivered to me. But I did not
know who they were from at the time that I received them. As a
matter of fact, I didn't know who this specialty company was until
today.
Mr. Kennedy. Would you take $300 worth of gifts from one com-
pany or group without knowing who the people were, or inquiring into
it?
Mr. HoLOVACHKA. As I say, Mr. Kennedy, I don't know that there
were $300 worth of gifts there. It would certainly seem ridiculous
that I would get that much in gifts without having known it.
Mr. Kennedy. That is what you got. We checked the invoices.
We checked the company that sent them. There were none of the
gifts returned. They were all sent to you at your home in 1956,
1957, that we know of, and with the indications that they were sent
in prior years, every Christmas.
In 1956 the gifts amounted to some $300 for you, Mr. Holovachka.
Mr. Holovachka. As I say, I have no recollection. It is possible
tliat I may have received them.
The Chairman. All right.
Mr. Kennedy. Do you have a barometer at home ?
Mr. Holovachka. Yes, sir; I do.
Mr. Kennedy. Did you buy the barometer ?
Mr. Holovachka. No, sir ; I did not.
Mr. Kennedy. Where did you get it ?
Mr. Holovachka. I got it as a gift.
Mr. Kennedy. Well, that came from this
Mr. Holovachka. At the time I received it, I did not know.
Mr, Kennedy, How about a spice chest radio ?
Mr, Holovachka, Yes, sir.
Mr. Kennedy, "VYliere did you get that ?
Mr, Holovachka. If it is from where you say it is, that is where I
got it. I don't know.
Mr. Kennedy. We are glad to enlighten you down here, Mr. Holo-
vachka.
Mr. Holovachka. Thank you, Mr, Kennedy.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18665
Tlie Chairman. Let me ask you this : Is there anything strange or
unusual from your viewpoint that you would be getting these gifts
from time to time from this particular company ?
Mr. HoLovACHKA. No, Senator.
The Chairman. "Wliat I am trying to find out is if you have any
suggestion as to why they would be interested in supplying you with
these gifts since you say you do not know, as I understand you, either
Mr. Schaefer, Mr. Powers, Mr. Eizzo, or Mr. McDonald.
You know none of them. Here we find them in a company that is
sending you these gifts.
Mr. Holovachka. I wouldn' know why they sent me the gifts. Sen-
ator, except I would say to you that there are many merchandise
houses in our community that from time to time w^e aid in the col-
lection of bad checks and things of that kind, and I might say many
of the firms in our community do send me a plant or a gift of some kind
at Christmastime.
The Chairman. What aid did you perform for this company ?
Mr. Holovachka. None that I know of, Senator.
The Chairman. Is there a just implication here that the aid you
gave them was not molesting their gambling machines?
Mr. Holovachka. If you wish to put that connotation on it, I
would assume it would be a just connotation. But I will say to you
that I have never met with these people. I have never talked with
them, I have never had any dealings with them, and I have never
given anyone a license to violate the law.
The Chairman. Let me say this to you : You are a lawyer, and I
am simply presenting it here to you so that you will have every
opportunity to dispel any erroneous impression or conclusion that
anyone might come to if explanation would prevent them from com-
ing to some erroneous conclusion.
In other words, if there is any explanation you can give in connec-
tion with this matter that will dispel or disperse any suspicions of any
improper activity or incident, I want you to have every opportunity
here now to dispel it, to state what the facts are.
Mr. Holovachka. I will say this to you. Senator : that at the time
that the gifts were received, I did not know who they came from.
Had I know who they came from, and the business that these people
were in, you may rest assured that I would have sent the gifts back
to them.
The Chairman. Was there no return address on the package ?
Mr. Holovachka. As I recollect, it perhaps liad the name of the
company which shipped it. Mr, Kennedy, I believe, previously had
stated the name of the company which had shipped it.
The Chairman. Did these gifts have in them a Christmas greeting,
"Merry Christmas," "Happy New Year," sometliing like that ?
Mr. Holovachka. I have no recollection of it, Senator.
Mr. Kennedy. Did you ever make an arrest, pick up any of the
machines of this company ?
Mr. Holovachka. As I had told you yesterday, Mr. Kennedy, we
picked up many machines, and I wouldn't be a bit surprised but what
some of the machines belonged to this company. I don't know who
the machines belonged to.
Mr. Kennedy. Do you have any records to show that you ever
picked up the machines of this company ?
18666 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. HoLOVACHKA. As I told you yesterday and I will say again, I
don't know whose machines they were. Some of the investigators
of your committee checked some of the machines and they would
possibly know whether any of them belonged to this particular com-
pany. I wouldn't know.
TESTIMONY OF LaVERN J. DUEFY— Resumed
Mr. Kennedy. Mr. Duffy, does the record show that they picked
up any machines of this company up to the time we began our
investigation ?
Mr. Duffy. No machines were picked up of this company or of
Mr. Sohacki's company.
Mr. Kennedy. And this company was operating these gambling
machines from 1952 to the present time ?
Mr. Duffy. That is correct.
Mr. Kennedy. That is all.
The Chairman. Are there any questions ?
Senator Church. Mr. Chairman
The Chairman. Senator Church.
Senator Church. I would like to ask counsel if the record does
disclose how many machines during this same period were picked up
through the sheriff's office.
TESTIMONY OF RICHARD G. SINCLAIR— Resumed
Mr. Sinclair. The record does not show that any machines were
picked up prior to December 1958.
Mr. Kennedy. But of all the machines that were picked up dur-
ing this period of time, we find that some
Mr. Sinclair. Thirty-six machines.
Senator Church. Prior to just this last week when the investiga-
tion started, prior to that time, how many macliines were picked up
by the sheriff's office ?
Mr. Sinclair. According to Mr. Conroy, 36 machines.
Mr. Holovachka. He is speaking of the sheriff's office. You are
speaking of the prosecutor's office.
Senator Church. I mean the public prosecutor's office.
Mr. Sinclair. Thirty-six machines, Senator, were picked up, based
on Mr. Conroy's testimony.
Senator Church. That is the only testimony or evidence we now
have before the committee indicating the number of machines that
were picked up through the public prosecutor's office ?
Mr. Sinclair. That is right. Senator.
Senator Church. And none of these machines, as I understand it,
belong to either of these two companies that we have been referring
to in the course of the hearings as the syndicate?
Mr. Ej:nnedy. That is correct. The only way we can check that
is by checking the records of the various companies to find out whether
their machines have been picked up. Up to December of 1958, when
we began our investigation, no machines of these two companies, the
Sohacki-Welbourn or the Lakeside Co., had been picked up.
We went to the independent operators to check and find out whether
their machines had been picked up during the same period, and we
IMPROPER ACTIVITIES IN THE LABOR FIELD 18667
found that their machines were confiscated during the same period of
time and never returned.
We could not find the total in that manner, but we did question Mr.
Conroy, and he told us there were some 36 machines that had been
picked up during that period of time.
Senator Church. Mr. Holovachka, how do you explain that all of
the machines that were picked up through your office during this
period of time happened not to belong to either of these two com-
panies? Would you say that was just mere coincidence?
TESTIMONY OF METRO M. HOLOVACHKA— Resumed
Mr. Holovachka. Let me say this to you, Senator : You were not
present when I testified yesterday, and at that time I testified that in
the period of 6 years that I had been in the prosecutor's office, that I
had given orders, and there were in excess of 100 machines where I had
directed our investigators to have the machines removed.
Now, during this period of time most of the machines were removed.
Where the people didn't have them removed, save perhaps within a
period of 24 to 48 hours, they were subsequently picked up. Now, it is
just possible and coincidental that the people that they are speaking of
may have been smart enough to have theirs removed when we went in
and played the machines and we got a payoff on them and they were
told to remove them. Perhaps they were smart enough to remove
them, and perhaps these other people were more defiant and perhaps
that is the reason why the machines were picked up, because in all
cases the people were notified to get rid of the machines and if they
didn't do it voluntarily, then they were picked up.
Senator Church. That would be the only explanation you would
have for the fact that all of the machines happened to turn out to be
machines that didn't belong to either of these two companies that we
refer to here as the syndicate ?
Mr. Holovachka. The only other explanation that I can give, Sena-
tor, is that so far, during these hearings, they have accounted for ap-
proximately a dozen machines, more or less, that have belonged to
what has been termed independent operators.
In my opinion, if only that many machines belonged to the inde-
pendent operators, then these other machines must have belonged to
these other people that they are talking about.
Mr. Kennedy. Could I make a comment on that ?
Senator Church. Yes.
Mr. Kennedy. We have interviewed a number of others. It was
repetitious to bring in other individuals here to testify to the same
thing. The facts are that from an examination of the records, and
this cannot be refuted, the examination of the Sohacki-Welbourn
operation shows that none of their machines have been picked up.
Another fact that cannot be refuted is that this operation, these
groups, now have an absolute monopoly over Lake County. The in-
dependent operators have been driven out of business. This is common
knowledge and has been proven again and again before this committee.
Senator Church. Let me ask you this question: Until last week,
I understand that there were large numbers of these machines still
operating in Lake County.
Mr. Kennedy. That is correct.
18668 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Church. And since 1957 these machines have clearly vio-
lated the laws of Indiana ; is that no correct ?
Mr. Kennedy. That is correct.
Senator Church. Mr, Holovachka, inasmuch as these machines
were clearly invalidated and made illegal by the Legislature of In-
diana in 1957, why was it that you waited until last week to move in
and remove large numbei-s of these machines that were publicly on
view and publicly being played in many, many different places in the
comity ?
Mr. Holovachka. Let me explain to you, Senator. I am not pres-
ently the prosecutor, and have not been since the 1st day of January
of this year. However, as I had explained to the committee yesterday,
after the passage of this act, a prosecutor, Mr. Beamer, in Allen
County, which is Fort Wayne, Ind., the chief of police, the sheriff,
and other officials, had a restraining order and subsequently an in-
junction taken out against them to prevent them from touching these
machines in any way.
That case was subsequently appealed to the Supreme Court. To
this date we have not received a decision.
Senator Church. Why was it that just a week ago, if that was the
reason that witliheld the hand of the prosecutor's office, why was it
that just a week ago you did in fact move in and take possession of
all these machines ?
Mr. Holovachka. I did not do it. My successor in office, Mr.
Vance, was responsible for it. He contacted the chiefs of police of
the various cities and it was done. But there was a reason for that,
Senator.
Senator Church. What was the reason it was finally done just a
week ago?
Mr. Holovachka. Up to this time no court had ever declared
these machines to be illegal under the law, and numerous injunc-
tions had been granted in other counties besides Allen County.
Recently within the past 2 weeks or so. Judge Niblick, of Marion
County, in Lebanon, Ind., had these cases before him and declared the
machines to be illegal.
Subsequently to that, not only the prosecuting attorney of Lake
County, but many prosecutors throughout the State, on the basis of
his decision, immediately requested that these machines be removed,
and they have been removed in many counties throughout the State
of Indiana, not only in Lake County.
Senator Church. Then the removal in Lake County that corres-
ponded in time with the commencement of these public hearings in
Washington had nothing whatever to do with the fact that we were
now making this public investigation ; is that right ?
Mr. Holovachka. Senator, I would think that perhaps public
sentiment, with the actions of the committee, may have had some-
thing to do with it. I wouldn't be a bit surprised but what it did
have something to do with it.
The Chairman. Senator Capehart ?
Senator Capehart. I believe we have had testimony here that there
are something like 1,248 machines operated by one company in Gary,
and I believe something like 360 by the company in East Chicago.
That is something like 1,500 or 1,600 machines.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18669
Under the law, is the location or the owner's place of business
where these 1,500 to 1,600 machines are located, are they equally liable
with the operator and the owner of the machines ?
Mr. HoLOVACHKA. Do you mean insofar as criminal responsibility
is concerned ?
Senator Capehart. Yes.
Mr. HoLOVACHKA. I would say that anyone who paid out on the ma-
chines was liable. In other words, it is the act of paying on the ma-
chines. But at the present time, under the construction of Judj2;e Nib-
lick, I would presume that the owner of the establishment who was
responsible for whatever is in the establishment would be liable under
the law.
Senator Capehart. Then if it is 1,500 or 1,600 of them, or there were
that many in Lake County, that means that 1,500 to 1,600 individual
businesses or people were, in your opinion, liable under the law, as the
concern who owned the machine ?
Mr. HoLOVACHKA. And not only business people, I might say to the
Senator, but many fraternal and other organizations. There are some
organizations that perhaps, without these machines, would not be
able to exist, and will not be able to exist in the future because of large
obligations that they have entailed insofar as mortgages are con-
cerned, and these machines undoubtedly have helped them to pay off
their mortgages.
Senator Capehart. That leaves 1,500 ©r 1,600 businesses that knew
that these machines were gambling machines, or could be gambled
upon?
Mr. HoLOVACHKA. It had not been so construed until Judge Niblick
so decided. Senator.
The Chairman. According to your contention, then, it was the pay-
ing of the money instead of them taking the free games that consti-
tuted the gambling ?
Mr. HoLOVACHKA. That is right. Senator.
The Chairman. The other issue would be whether the machine it-
self constituted a gambling device.
Mr. HoLOVACHKA. That is correct, Senator.
The Chairman. But by reason of its physical construction, that was
the very nature of it. But it had been the contention before that only
the payment of money in lieu of the customer taking the free games
constituted the gambling?
Mr. HoLOVACHKA. That is right, Senator.
The Chairman. Now a judge comes along and holds that the ma-
chine itself is a gambling device ?
Mr. HoLOVACHKA. That is correct. Senator.
Senator Capehart. Who would pay the money on these machines ?
Did somebody win and then the cashier would go over and give them
the money ?
Mr. HoLOVACHKA. The machine itself would not pay any money, but
it has a register on there indicating the number of so-called free games.
For instance, if you had 10 free games and it was a dime machine.
Senator, then I presume you would go over to the bartender and get
10 dimes or $1. If you had 20 free games, you would be entitled to $2.
Senator Capehart. Then these 1,500 or 1,600 places of business they
were in were actually paying out the money ?
18670 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. HoLOVACHKA. I heard one witness testify here that he didn't
pay out and I don't believe him. I don't think these machines can exist
very long unless they give him some financial remuneration.
The Chairman. You were under that impression all the time, then,
while you were in there while prosecuting attorney.
Mr. HoLOVACHKA. Yes, sir.
The Chairman. What did you do, then, to follow up and enforce
the law ?
Mr. HoLOVACHKA. Whenever we received the complaints
The Chairman. Wait until there was a complaint ? If you thought,
yourself, that the law was being violated on that broad a scale ?
Mr. HoLOVACHKA. I am not a policeman.
The Chairman. But you are a sworn prosecuting attorney, sworn
to uphold the law, and have the power to issue the legal processes.
Mr. HoLOVACHKA. I have done so to the best of my ability under
the circumstances.
The Chairman. Your statements are not consistent.
Mr. Kennedy. It states in the laAv :
Professional gambling means accepting or offering to accept, for profit, money,
credits, deposits, or other things of value risked in gambling, or any claims
thereon or interest therein. Without limiting the generality of this definition,
the following shall be included : Pool selling and bookmaking ; maintaining slot
machines, one-ball machines or variants thereof, pinball machines which award
anything other than an immediate and unrecorded right of replay; roulette
wheels, dice tables, or money or merchandise push cards.
It was clearly made illegal by the 1957 legislature. We have that
as No. 1, It was also illegal from 1953-55.
The Chairman. The paying?
Mr. Kennedy. The machines themselves were illegal from 1953
to 1955, and from 1957 on they were illegal. From 1955 to 1957 it
was only when the payments were made.
We have that situation. Then we have when this man took over
as public prosecutor that the raids took place on the independent
operator. They were gradually put out of business.
This one company came in and got a monopoly so that over a 5-year
period they took in collections some $121/^ million. That is the one
company.
The other company took in collections of some $21/2 million. That
was in a 5-year period. This man was public prosecutor while these
operations were active, while the machines were going and were,
per se, illegal. And during that period of time he had some $327,000
of cash going through his bank accounts in expenditures, which he
refuses to give any explanation on.
The Chairman. All right. Call the next witness.
You may stand aside.
Mr. HoLOVACHKA. Am I excused ?
The Chairman. You will be later on if we don't need to recall you.
Mr. Kennedy. Mr. Chairman, we have finished several phases of
the hearing in connection with the operation.
First was the Welborn-Sohacki group, the group in East Chicago,
Lakeside.
We have also gone into the operations of the public prosecutor's
office and, through all of this, the fact that the union was put out of
business. During the course of it we mentioned certain individuals
IMPROPER ACTIVITIES IN THE LABOR FIELD 18671
who were gangsters and hoodlums who came in from outside the com-
munity to operate some of the gambling and some of the vice.
We would like now for the next day or day and a half to go into
the operations of these people as to the way they operated in Lake
County, and, of course, to some extent, Marion County — what their
activities were in Chicago and also on the west coast.
The Chairman. As I understand, this is a part of this monopoly,
putting the independents out of business, driving the unions out of
business ?
Mr. Kennedy. Not only that, Mr. Chairman. This operation gets
not just into the pinballs, but also into jukebox and some of the other
operations. Some of these individuals were active not only in Lake
County, but in other areas of the country.
So while we are hearing testimony before the committee, we will
be putting in the background and details of their operations.
The Chairman. Call the first witness.
Mr. Kennedy. I would like to call Mr. Duffy to explain the entrance
ofMr.Pinelli.
(At this point Senator Church withdrew from the hearing room.)
The Chairman^ Mr. Holovachka, you asked me a moment ago if you
could be excused. I didn't know at the moment what other testi-
mony might be going to be presented. Now I understand that we are
going into another phase of the matter now.
Mr. Kennedy. Mr. Chairman, we believe that, of course, all of this
money — well, it is possible he would want to testify. There is a con-
siderable amount of vice which was going on in Lake County while he
was public prosecutor.
The Chairman. I will say it this way : If you wish to be excused,
you may be. There will be, possibly, other testimony, derogatory in
character, relating to your conduct in office. If you wish to stay, all
right. If you do not, you are free to go.
Proceed, Mr. Kennedy.
TESTIMONY OF LaVERN J. DUTFY— Eesumed
Mr. Kennedy. Mr. Duffy, would you explain what the situation was
as far as the operations of Mr. Doyle, and then the entrance of Mr.
Pinelli and who he was associated with in connection with Lake
County ?
Mr. Duffy. Yes. In 1951 Jack Doyle headed up the criminal syn-
dicate in Lake County, Ind. He was exposed by the Kefauver com-
mittee in 1951. He was indicted in 1952. Then in January 1953,
after he had been completely exposed and ineffective in the area, he
met with Sam "Mooney" Giancana, a notorious hoodlum from Chi-
cago, and Tony Accardo, the No. 1 hoodlum in Chicago. They met
in Los Angeles. The meeting took place there.
Shortly thereafter Mr. Doyle was convicted for income-tax evasion,
and then Mr. Pinelli migrated from California to Gary, Ind., and took
over certain operations. We know he came to Gary in October 1954
and set up a jukebox company, called the Century Distributing Co.
He also set up a pizza business. We do know that these were just
fronts for his illegal operations.
18672 IMPROPER ACTIVITIES IN THE LABOR FIELD
In 1957 it was established, for example, that he was in the bookie
and handbook operations in Lake County, Ind., with John Formusa,
notorious vice lord of Gary, Ind., Mr. James Kutledge, and Mr. Pinelli.
Mr. Kutledge died on March 5, 1957, and a man by the name of
Frank Zizzo migrated from Chicago and came over to Lake County
and took over the active operations of these gambling operations.
We know that as a fact because Mr. Kutledge had a Federal gam-
bling stamp issued to him for one of his places, which was called
the Uptown Lunch Club in Whiting, Ind. He died the following
year, and the Federal gambling stamp was issued to Mr. Zizzo.
Mr. Kennedy. Now I would like to call Mr. Salinger, Mr. Chairman,
and also call Mr. Giancana in connection with the meeting with Mr.
Pinelli.
The Chairman. Come forward, please, sir.
Be sworn.
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 ?
Mr. Giancana. I do.
TESTIMONY OF SAM GIANCANA, ACCOMPANIED BY COUNSEL,
H. CLIITORD ALIDER
The Chairman. State your name, your place of residence ,and your
business or occupation.
Mr. Giancana. My name is Sam Giancana. I live at 1147 Winonah
Avenue, Oak Park, 111.
The Chairman. Do you have a business or occupation ?
Mr. Giancana. I decline to answer.
The Chairman. You are ordered to answer.
(The witness conferred with his counsel.)
Mr. Giancana. I decline to answer on the grounds it may tend to
incriminate me.
The Chairman. On what?
Mr. Giancana. On the grounds it may tend to incriminate me.
The Chairman. Do you think if you told what kind of business you
were in, do you honestly believe if you told that, what kind of business
you were in or what your occupation is, an honest and truthful answer
might tend to incriminate you ?
Do you honestly believe that ?
(The witness conferred with his counsel.)
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
The Chairman, You said you honestly believe it. You did under-
stand. You decline, and say you honestly believe it.
Do you have a lawyer ?
Mr. Giancana. I decline to answer.
The Chairman. All right.
Mr. Giancana. I am sorry.
The Chairman. Do you want him to leave ?
Mr. Giancana. Mr. Allder.
The Chairman. Identify yourself for the record.
Mr. Allx>er. H. Clifford Allder, Washington, D.C.
The Chairman. Proceed, Mr. Kemiedy.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18673
Mr. Kennedy. Mr. Giancana, would you give us some information
in connection with the meeting you had in Los Angeles with Mr. Tony
Pinelli?
Mr. Giancana. I decline to answer.
The Chairman. You are ordered to answer.
I want to tell you something now. We are not going to put up
with this foolislmess.
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incrimmate me.
The Chairman. You say it that way if you mean it that way. Pro-
Mr. Kennedy. Is there something funny about it, Mr. Giancana?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Would you tell us what you made the trip to Los
Angeles for ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Was it in connection with the operations of Mr.
Pinelli in Gary, Ind. ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Mr. Chairman, could we call Mr. Salinger to give
the background ?
The Chairman. Have you been sworn ?
Mr. Salinger. No, sir.
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 notliing but the truth, so help you God ?
Mr. Salinger. I do.
TESTIMONY OF PIERRE E. G. SALINGER
The Chairman. Mr. Salinger, you are a member of the staff of
the committee and have been since its inception ?
Mr. Salinger. Since its inception.
The Chairman, Proceed.
Mr. KENNEDY. Mr. Salinger, would you give us the background
that we have on Mr. Giancana ?
Mr. Salinger. Mr. Giancana is a top figure in the underworld in
Chicago, 111. He has an extensive criminal record.
In 1929 he was convicted of burglary-larceny, and sentenced to
1 to 5 years in the Joliet Penitentiary. He served 3 years and 9
months of that sentence.
In 1939 he was convicted of conspiracy to violate the internal reve-
nue laws as they relate to liquor, and was sentenced to 4 years and
fined $2,700. He sei-ved, of tliat 4-year sentence, 3 years and 2 months
in Leavenworth and Teri'e Haute Federal Penitentiaries.
In addition to that, ho has received minor sentences for larceny of
auto, tampering with auto, disorderly conduct, and has been picked up
on a number of other charges.
Mr. Kennedy. How many times has he been arrested ? Seventeen
times?
18674 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Salinger. Seventeen times.
The Chairman. How many convictions ?
Mr. Salinger. Two major convictions, Senator.
The Chairman. For what ?
Mr. Salinger. Those were for burglary and larceny in 1929 and
violation of the internal revenue laws as they relate to liquor, in 1939.
He served a total of 6 years 11 months in penitentiaries as a result
of those two convictions.
Mr. Kennedy. And then he has had some four other mmor convic-
tions?
Mr. Salinger. That is correct. Mr. Giancana is of interest to us in
this particular case because of a trip he made to Los Angeles in 1953
in the company of Anthony Accardo, who is the top figure in the
Chicago underworld, and Dr. Eugene Chesrow, who is a physician in
the city of Chicago, 111.
Mr. Kennedy. How do you spell his name ?
Mr. Salinger. C-h-e-s-r-o-w.
Mr. Accardo. Mr. Chesrow, and Mr. Giancana, using the name of
Michael Mantuso
The Chairman. Who was using that name ?
Mr. Salinger. Giancana.
The Chairman. Is that part of your name ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
The Chairman. Proceed. He doesn't want to admit it.
Mr. Salinger. They further disguised themselves by registering
from Chicago on the plane as S. Mann, G. Stanley, and S. Wliate.
They arrived in I^s Angeles, made a short trip into town to a restau-
rant, and came back to the Los Angeles Airport where they were
picked up by officers of the intelligence division of the Los Angeles
Police Department.
At the time they were driving in a Cadillac, driven by one Frank
Ferraro, who identified himself as a Chicago tailor.
Mr. Kennedy. How do you spell his name ?
Mr. Salinger. F-e-r-r-a-r-o.
Mr. Kennedy. Mr. Chairman, I might say we subpenaed Mr. Fer-
raro to testify before this committee, to testify this afternoon. We
received a wire that he arrived at the airport to come hei-e and he was
stricken with some disease or some illness befell him, and he rushed
back and he is now in the hospital in Chicago.
The Chairman. He didn't get here ?
Mr. Kennedy. He didn't get here.
Mr. Salinger. The gentlemen were questioned singly by the police
department to find out why they were in Los Angeles. I might add
that also at the airport to meet them was a man named Anthony
Pinelli, who at that time was unknown to the Los Angeles Police
Department, and merely gave his occupation as importer-exporter,
and gave his address as Sierra Madre, Calif., a little town.
Mr. Accardo had in his possession two large rolls of money, one of
which contained $5,000 and the other of which contained $1,700.
He stated they really didn't want to come to Los Angeles at all, but
they had to stop there on the way to Las Vegas. Mr. Mantuso, later
identified as Giancana, had approximately $5,000 on his person, and
IMPROPER ACTWITIES IN THE LABOR FIELD 18675
stated to the police officer, according to the report, that he hoped to
win considerably more gambling in Las Vegas.
Dr. Chesrow, who identified himself as a physician at the Cook
County Hospital, in Chicago, 111., had on him some $250 in cash.
After being questioned, the three gentlemen left by airplane for Las
Vegas, left Los Angeles.
As I say, part of our interest in Mr. Giancana stems from this visit
to the coast, and Mr. Pinelli meeting him there, and Mr. Pinelli's
subsequent activities in Lake County, Ind.
We have also been interested in Mr. Giancana in several other cases
before the committee, and, in fact, attempted to serve him with a
subpena for a considerable period of time.
Mr. Kennedy. Actually, we were looking for you for a period of a
year, were we not, before we found you ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. We ultimately subpenaed him in Las Vegas ?
Mr. Salinger. That is correct. Following that Las Vegas visit,
he returned to Chicago where he gave an interview to a reporter of
the Chicago Tribune.
Mr. Kennedy. We were looking for him since the last part of 1957
until the early part of 1959 ?
Mr. Salinger. That is correct.
Mr. Kennedy. You might relate what his opinion of the committee
was.
Mr. Salinger. One of the things that he told the reporter for the
Chicago Tribune, which was printed in a story in the Chicago Tribune
on April 5, 1959, he said, referring to the committee :
I would like to tell them to go to hell, but I guess I will keep my mouth
shut and take the fifth.
Mr. Kennedy. Is that correct ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. He also said :
They couldn't catch me for a year. I was in Chicago all the time. I like to
hide. It was fun.
Mr. Kennedy. Is that correct, Mr. Giancana ?
Mr. Giancana. I decline to answer becuase I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. He was also quoted, when Mr. Smith asked him
why he hadn't served in any Armed Forces during World War II, as
stating :
When I was called to the board, they asked me what kind of work I did.
I told them I steal for a living. They thought I was crazy. But I wasn't.
I was telling the truth.
The Chairman. Are you happy in being a thief ; is that what you
are laughing about?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
The Chairman. I don't think anyone doubts it. I think that is
conceded.
Proceed.
18676 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Salinger. Mr. Chairman, our interest in Giancana stems from
two hearings the committee had: one into the Chicago restaurant
industry and the second into the jukebox industry in Chicago, par-
ticularly the activities of the Lormar Distributing Co., controlled by
Sam English, and which, according to the testimony before the com-
mittee, produced counterfeit records, and these records were pushed
on various location owners for jukeboxes.
Mr. Kennedy. He also said in connection with when the Army tried
to get him for service during the Second World War :
Who wouldn't pretend he was a nut to stay out of the Army?
Mr. Salinger. That is correct.
Mr. Kennedy. Did you say that ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Then in connection with the crime syndicate, he was
asked — would you give us that quote ?
Mr. Salinger. He said :
What's wrong with the syndicate? Two or three of us get together on a deal
and everybody says it is a bad thing. Businessmen do it all the time and nobody
squawks.
Mr. Kennedy. Is that correct ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. Going back to the answer on who wouldn't pretend
to be a nut to stay out of the Army, a check was made with the draft
board where he registered and it showed he was rejected due to:
Constitutional psychopathic state and inadequate personality and strong anti-
social trend.
Mr. Kennedy. Is that correct, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. During the Chicago restaurant hearings, we devel-
oped the fact that two Chicago hoodlums named James Weinberg
and Paul Labriola, also known as "Needlenose," were setting up an
organization to be in opposition to the Chicago Restaurant Associa-
tion.
Mr. Kennedy. They attempted to set up their own restaurant
association ?
Mr. Salinger. That is correct. And they were attempting to get
members for this association, and in this they were having the assist-
ance of Mr. Lardino, who was in the Hotel & Restaurant Workers
Union in that city. According to the information we have had at
the time, Mr. Lardino was not moving fast enough with regards to
the new association, and Mr. Giancana was called in to discuss the
matter and see what he could do about getting recalcitrant restaurants
to join the new association.
It is of some interest to note
Mr. Kennedy. Is that correct, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. Mr. Giancana's daughter recently married at a wed-
ding which was a highly social point in Chicago, and among those
who were invited to the wedding was Mr. Lardino.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18677
In addition to that, we do not know whether Mr. Lardino ap-
peared. However, among those who were present at the wedding was
Mr. Joseph Glimco, the head of Teamsters Local 777 in Chicago, 111.
Mr. Kennedy. Do you know him, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Could you tell the committee what happened to
Mr. Labriola and Mr. Weinberg ?
Mr. Salinger. Mr. Labriola and Mr. Weinberg were both mur-
dered, gangland style.
Mr. Kennedy. They were stuffed in a trunk of an automobile ?
Mr. Salinger. That is correct.
Mr. Kennedy. Would you tell us what you know about that, Mr.
Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. I might say in connection with Mr. Glimco that
his acquaintanceship with Mr. Giancana is of some interest to us
since Mr, Testo's testimony that when he wanted to organize Mr.
Pinelli's jukebox operation in Gary, Ind., he was told before he
organized it he should go see Mr. Glimco and Mr. Glimco told him
not to organize the company.
The Chairman. Told him what?
Mr. Salinger. Not to organize the company. He subsequently re-
ceived a threat and did not organize them.
Mr. KJENNEDY. He told him he would hear from him later ?
Mr. Salinger. That is correct.
Mr. Kennedy. And he never organized the company, and after
that, as he told the committee, he started to receive threats and ul-
timately got out of business ?
Mr. Salinger. That is correct.
Mr. I^nnedy. That is not the end of our interest in Giancana, is
it?
Mr. Salinger. That is correct.
We were also interested at the time of our hearings into the juke-
box business in Chicago, 111.
Mr. KJENNEDY. On Mr. Weinberg and Mr. Labriola, they are the
ones that we had developed had plotted to throw Mr. Teitelbaum out
the window ?
Mr. Salinger. That is correct.
Mr. Kennedy. That was in Chicago ?
Mr. Salinger. That is correct.
Mr. Kennedy. Mr. Teitelbaum was the one who was on the payroll
of the restaurant association for $125,000 a year?
Mr. Salinger. That is right. He was a representative of the
Capone syndicate.
Mr. Kennedy. And he in turn was succeeded by Anthony Cham-
pagne, who was put on by Mr. Drake, one of the big restaurant owners
in the city of Chicago?
Mr. Salinger. That is correct.
Mr. Kennedy. He was put on at $125,000 a year to handle their
labor relations?
Mr. Salinger. That is correct.
36751— 59— pt. 53 17
18678 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Both Mr. Champagne and Teitelbaum appeared be-
fore the committee and took the fifth?
Mr. Salinger. That is correct.
Mr. Kennedy. And the other group, Labriola and Weinberg, both
ended up murdered?
Mr. Salinger. That is right.
Mr. Kennedy. Would you tell us what other interest Mr. Giancana
has had?
Mr. Salinger. As I said, his interest — our interest in Mr. Giancana
also included his relationship with Mr. Charles "Chuck" English, who
operated the Lormar Distributing Co., on which we had considerable
testimony during the recent hearings of the jukebox.
Mr. Kennedy. Would you tell us about the Lormar Distributing
Co., Mr. Giancana?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Would you tell us about
The Chairman. Is that the company that counterfeited the records ?
Mr. Salinger. That is correct, sir.
According to our information, Mr. Chairman, from the year 1952
through 1957, Mr. Giancana received a total of $296,188 from a part-
nership with Mr. Charles English.
Mr. Kennedy. Who was
The Chairman. What kind of business?
Mr. Salinger. The incomie was listed as a partnership with Mr.
English and it is believed that it stems in part from the Lormar
Distributing Co., an operation during this period of time.
Mr. Kennedy. Mr. Chuck English did operate the Lormar Dis-
tributing Co.?
Mr. Salinger. Yes, sir.
Mr. Kennedy. And the Lormar Distributing Co. counterfeited the
records and forced a number of jukebox dealers in Chicago and in
other States to purchase a certain number of their records ?
Mr. Salinger. That is correct.
Mr. I^JENNEDY. It was because of the gangster and racketeering back-
ground that these people purchased the records \
Mr. Salinger. That is what the witnesses testified.
Mr. Kennedy. We will have testimony later in these hearings
that the records were forced on some of the operators in the Gary area ?
Mr. Salinger. That is correct.
Mr. Kennedy. And from that partnership — well, give us a little
background on Mr. Chuck English.
Mr. Salinger. Mr. English was arrested in connection with his ac-
tivities in the Lormar Distributing Co. and was also barred subse-
quently from one of the major racetracks in the Chicago area for his
horseracing activities. He has long been a figure in the Chicago
underworld.
Mr, Kennedy. He is a brother of Sam English, who also featured
prominently in our hearings?
Mr. Salinger. That is correct.
Mr. Kennedy. Both of these people have taken the fifth amendment ?
Mr. Salinger. That is correct.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18679
To go on with this, in the period of 1950 through 1957, Mr. Giancana,
according to our information, reported a total of $520,840.67 in income,
and of that, as I pointed out, approximately 60 percent came from this
partnership with Mr. English, $29G,000-odd.
It is of some interest to note that Mr. Giancana reported income
from a number of clubs in the Cicero and Chicago area during 1950
and 1951, but this income disappeared following the investigation of
the Kefauver committee.
Among those clubs were : The 1207 Club in Cicero, 111. ; the Pascal
Club in Chicago ; the Club Ozark in Chicago ; the Montrose Associa-
tion in Chicago; the Trotters Club in Chicago; and the Archer Club
in Chicago.
In addition, in 1957 a banker by the name of Leon Marcus was mur-
dered in Chicago, 111. At the time his body was discovered after he
had been killed, they found on his body a mortgage payment slip indi-
cating that he had received $100,000 from Mr. Giancana on the Kiver
Road Motel on the outskirts of Chicago.
Mr. Kennedy. Would you tell us about that, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. What do you know about the killing of Mr. Marcus ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. Mr. Giancana reports income in the years 1955, 1956,
and 1957 from a property described as Lawrence River Road in the
total amount of $42,282.80, which, according to our information, is
related to this River Road Motel property on which Mr. Marcus had
the mortgage payment of $100,000 at the time he was murdered.
Mr. Kennedy. Tliat was a receipt. He had the receipt on his body
indicating a $100,000 payment from Giancana ?
Mr. Salinger. That is correct.
Mr. Kennedy. Mr. Giancana, since the conviction of Paul "The
Waiter" Ricca, he now holds the No. 2 position in Chicago; does
he not ?
Mr, Salinger. The authorities in Chicago consider Mr. Giancana
the No. 2 man in the syndicate in the city.
Mr. Kennedy. He and Mr. Tony Accardo, No. 1 and No. 2?
Mr. Salinger. That is correct.
Mr. Kennedy. Is that correct, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Would you say you were No. 1, now, you are ahead of
Mr. Tony Accardo, or do you think you are No. 2 ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. And is he also recognized as being one of the gun-
men for the operation of the syndicate in the Chicago area ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. I am asking Mr. Salinger, but I appreciate your
answer.
Mr. Salinger. That is Mr. Giancana's reputation.
Mr. Kennedy. And he has been arrested a number of times in con-
nection with gangland murders ; has he not ?
18680 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Salinger. He has been questioned on a number of occasions,
including the Latest one of Leon Marcus killing, the gangland murder.
Mr. IvENNEDY. Could you tell us about that? Could you tell us
about any of these killings that have taken place?
Mr. GiANCANA. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Salinger. Mr. Kennedy, in connection with the killing of Mr.
Marcus, it might be pointed out that Salvatore Morretti, a former
policeman in the city of Chicago, and a suspect in the killing of Mr.
Marcus, was found murdered in a trunk after the murder of Mr.
Marcus, and the information at that time was that he had been dis-
posed of because he had bungled the Marcus killing.
Mr. Kennedy. Is that correct ?
Mr, Gl\ncana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. According to the information we have had in the
hearings thus far, and Mr. Rayder's testimony that the operations
as far as the vice and organized gambling took place in Lake County,
and they were going to try to make some efforts in the other county,
in Porter County, these efforts were directed from Chicago; is that
correct ?
Mr. Salinger. That is correct.
Mr. Kennedy. And we identified the fact that Mr. Pinelli, after the
1953 meeting, came and moved into Lake County ?
Mr. Salinger. That is correct.
Mr. KJENNEDY. And that Pinelli is, in turn, a close associate of Mr.
Giancana ; is that correct ?
Mr. Salinger. That is correct.
Mr. Kennedy. We also identified the fact that Mr. Formusa, who
operated in Lake County, was an associate of Mr. Giancana ?
Mr. Salinger. We know that he was a close associate of Mr.
Pinelli, and we believe him to be an associate of Mr. Giancana.
Mr. Kennedy. As a matter of fact, Mr. Formusa and Mr. Pinelli
have been in business together ?
Mr. Salinger. That is correct.
Mr. Kennedy. Mr. Formusa handled the vice operations and Mr.
Pinelli handled the gambling operations ?
Mr. Salinger. That is correct.
Mr. Kennedy. And the third operation was the pinballs; is that
correct ?
Mr. Salinger. That is correct.
Mr. Kennedy. We have already gone into that.
And these operations, as far as the vice and as far as the organized
gambling was concerned, were directed from Chicago, and it would
appear from the associations, the friends and associates that these
people have, that they were directed by Mr. Giancana ?
Mr. Salinger. That is correct.
Mr. Kennedy. Is that correct, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Ivennedy. Would you tell us anything about any of your op-
erations in connection, first, with the restaurant association ? Would
you tell us about that?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18681
Mr. GiANCANA. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. KJENNEDY. Would you tell us about the coin-machine operation
that you featured in, and the forcing of operators to take a certain
percentage of your counterfeit records? Would you tell us about
that?
Mr. GiANCANA. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. IvENNEDY. Would you tell us about the vice operations down in
Lake County, Ind. ?
Mr. GiANCANA. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Would you tell us if you have opposition from any-
body, that you dispose of them by having them stuffed in a trunk?
Is that what you do, Mr. Giancana ?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. Would you tell us anything about any of your
operations or will you just giggle every time I ask you a question?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
Mr. Kennedy. I thought only little girls giggled, Mr. Giancana.
Would you tell us anything about yOur operations?
Mr. Giancana. I decline to answer because I honestly believe my
answer might tend to incriminate me.
The Chairman. Is there anything further ?
You may stand aside, subject to being recalled.
Call John Formusa.
Do you 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. Formusa. I do.
TESTIMONY OF JOHN FORMUSA, ACCOMPANIED BY COUNSEL,
IRVING S. STERNBERG
The Chairman. State your name, your place of residence, and
business or occupation.
Mr. Formusa. John Formusa, 9341 Lake Shore Drive.
The Chairman. Have you any business or occupation ?
Mr. Formusa. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
The Chairman. Do you have a la\Vyer ?
Mr. Formusa. Yes, sir.
The Chairman. Identify yourself for the record, counsel.
Mr. Sternberg. My name is Irving S. Sternberg. I maintain offices
at 333 North Michigan Avenue, Chicago, 111. I am the attorney for
Mr. Formusa.
The Chairman. There has been a little testimony here already
that you are in the vice business. Do you want to deny it ?
Mr. Formusa. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
The Chairman. Proceed, Mr. Kennedy.
18682 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Mr. Formusa could you tell us about the partnership
you have had with Mr. Pinelli ?
Mr. Formusa. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. This operation was set up in 1954. Could you tell
us what preceded Mr. Pinelli comino^ into Lake County ?
Mr. Formusa. I respectfully decline to answer on the grounds that
my answer may tend to incriminate me.
Mr. Kennedy. Was it understood at that time that he would handle
the gambling and that you would handle the vice in Lake County?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
Mr. Kennedy. Could you tell us about the operations of the M. & J.
Motel?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
Mr. Kennedy. Could you tell us how the M. & J. Motel has been able
to operate ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. How old are you ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Have you got a father and mother living ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Have you got a wife ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Are you the father of children ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Are you an American citizen ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. What would incriminate you about being an
American citizen?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Is he an American citizen?
Mr. E^nnedy. Mr. Chairman, according to our information, he
was born December 8, 1898, in Chicago, 111.
The Chairman. I don't think the country can be proud of him.
Proceed.
Mr. Kennedy. We understand, according to our information, that
you have been a frequent visitor at Tony Accardo's home.
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
Mr. Kennedy. And that your main source of income is that of
running houses of prostitution. Is that correct?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Do you run houses of prostitution?
IMPROPER ACTIVITIES m THE LABOR FIELD 18683
Mr. FoRMUSA. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Do you have interests in them ?
Mr. FoRMUSA. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Do you receive money from them ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Is it that kind of ill-gotten gains that you live
off of?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Have you got a conscience?
Mr. Formusa. I decline to answer on the gi-ounds that my answer
might tend to incriminate me.
The Chairman. Proceed.
TESTIMONY OF EICHAKD G. SINCLAIE— Resumed
Mr. Kennedy. Mr. Sinclair, did you interview Mr. Formusa?
Mr. Sinclair. I did, Mr. Kennedy.
]\Ir. Kennedy. Did you ask him about the operations of the M. & J.
Motel?
Mr. Sinclair. I asked him about the operations of the M. & J.
Motel and he admitted that was his operation.
Mr. Kennedy. You interviewed him March 5, 1959 ?
Mr. Sinclair. Yes.
Mr. I^nnedy. Would you state what he said at that time?
Mr. Sinclair. Mr. Formusa, at this interview at Jackson's Res-
taurant in Gary, advised me that he owned two pieces of real property,
Ills home at 9341 Lake Shore Drive, and the M. & J. Motel, which
is a notorious house of prostitution wdth national prominence.
Mr. Kennedy. National prominence ?
Mr. Sinclair. National prominence.
Mr. Kjennedy. He told you that at that time ?
Mr. Sinclair. Yes.
The Chairman. He claimed that it had national prominence?
Mr. Sinclair. National prominence.
The Chairman. We are giving it some more today.
Mr, Kjennedy. As I understand, he is the one who said it had na-
tional prominence ?
Mr. Sinclair. He said it was a nationally known house of prostitu-
tion.
Mr. Kennedy. They don't know about that — Mr. Conroy and Mr.
Holovachka haven't been told about it.
Mr. Sinclair. That is what they testified to ; yes.
Mr. Kennedy. They heard about it operating. But it was active,
was it not, when we began our investigation ?
Mr. Sinclair. It was.
Mr. Kjennedy. In fact, there was no effort made to hide its opera-
tions in any way ?
Mr. Sinclair. None whatsoever.
Mr. Kjennedy. What did he say to you about making money from
this kind of an operation ?
18684 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Sinclair. He said that this operation was his profession and
he was following that just the same as I was following my profession
as an investigator for the Federal Government.
The Chairman. In other words, his profession is to operate pros-
titutes ; is that right ?
Mr. Sinclair. That is what it amounts to, sir.
Mr. Kennedy. And he said you could make your money your way ?
Mr. Sinclair. And he would make his his way.
Mr. IvENNEDY. Would you relate to the committee what his words
were on that ?
Mr. Sinclair. He said just what I have stated : that j)rostitution
was his profession, that is, operating a house of prostitution was his
profession, the same as being a Federal investigator was mine.
Mr. Kennedy. We have uncovered the fact that he has made fre-
quent telephone calls to Mr. Conroy of Mr. Holovachka's office ; is that
correct ?
Mr. Sinclair. That is correct.
Mr. Kennedy. This is the first time that you had interviewed him,
is it not ?
Mr. Sinclair. This is the first time that I had interviewed him.
Wlien I met with him, he was in the company of Mr. Abe Kushner,
of the Kool-Yent Co.
Mr. Kennedy. How do you spell his name ?
Mr, Sinclair. K-u-s-h-n-e-r, of the Kool-Vent Co., of Gary, Ind.
And after Mr. Kushner left I talked to Mr. Formusa, who is also
known as Johnny, and interviewed him. The interview was going
along fine until I asked him a question as to how much he had to pay
to continue operation of the M. & J. Motel to the police officials. At
that point he took the fifth amendment.
Mr. Kennedy. He would not answer that ?
Mr. Sinclair. He would not answer anything further than that
except to tell me who his attorney was and that further communica-
tion should be through him.
The Chairman. Did he talk pretty freely about it until he got to
that point ?
Mr. Sinclair. Until he got to that point. Senator.
The Chairman. He was kind of proud of his operation up to
there?
Mr. Sinclair. He seemed to be.
Mr. Kennedy. From the motel income from 1955 to 1957, it was
$114,466 ; is that correct ?
Mr. Sinclair. That is what it was, Mr. Kennedy.
The Chairman. Is that net income? Is that reportable income?
Mr. Kennedy. Income reported.
Mr. Sinclair. Income reported from the operation.
Mr. Kennedy. I might say that according to the record, the lot
for the motel cost $6,000 ; improvements were $16,000 ; furniture was
$1,000; air conditioning, $1,800. Then there were a few other in-
cidentals.
Mr. Sinclair. There was one thousand dollars' worth of furniture
in the entire motel.
The Chairman. What?
Mr. Sinclair. One thousand dollars' worth of furniture in the
motel.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18685
The Chairman. I see.
Mr. Kennedy. He was in operation during this period of time.
He was a partner of Mr. Pinelli ; is that correct ?
Mr. Sinclair. He was associated with Mr. Pinelli at the Villa
Pizza Restaurant in Gary.
Mr. Kennedy. And also in gambling operations?
Mr. SiNCLiViR. He was a part of the Doyle-Pinelli-Formusa syndi-
cate operation in Gary which covered tlie vice, the gambling, and
the pinball machines and slot machines.
Mr. Kennedy. And it was this company of Mr. Pinelli, which was
operating, where Mr. Testo stated that he went to organize it and
he was told to go up and see Mr. Joey Glimco of Local 777 of the
Teamsters up in Chicago, and where he was told that he would
hear later. He heard later by not being allowed to organize it, is
that correct, ultimately driving the union out?
Mr. Sinclair. That meeting was held at the Villa Pizza where
Jolin Formusa and Pinelli were.
I might add that on October 21, 1939, Mr. Formusa was arrested
for a narcotic violation. He was apprehended for selling heroin
and convicted April 23, 1940, in the U.S. district court m Hammond,
Ind. He was sentenced to 2 years in the Federal Penitentiary at
Leavenworth, Ivans.
The Chairman. Is that this man here ?
Mr. Sinclair. That is Mr. Formusa.
The Chairman. This prostitution promoter ?
Mr. Sinclair. Yes, sir.
The Chairman. Proceed.
Mr. Kennedy. Income was $11,000 in 1955, $46,000 in 1956, and
$56,000 in 1957 from the motel, making a total of $144,000 for those
3 years as income. That is how much Mr. Formusa got out of it;
is that correct ?
Mr. Sinclair. That is how much he reported as income from the
M. & J. Motel. This motel was constructed in October of 1955, which
somewhat coincides with the operation or the commencing of the
operation of the pinball machines.
Mr. Kennedy. It would appear to be growing each year, from the
information that we have, with Mr. Holovachka as the public prose-
cutor in that area, 1955, and 1956, and 1957. Each year it grew a
little more, became more active, did it not, this nationally known
motel ?
Mr. Sinclair. It grew in volume of business, yes, Mr. Kennedy. As
a matter of fact, in 1956 over 1957, you have four times as much
business in 1956 as you had in 1955, and you had about a 25 percent
increase in 1957 over 1956.
Mr. Kennedy. Could you tell us how much money you gave to Mr.
Holovachka ?
Mr. Formusa. I decline to answer on the grounds that my answer
may tend to incriminate me.
The Chairman. Are there anj^ questions ?
If not, stand aside. Call the next witness.
Mr. Kennedy. Mr. Frank Zizzo.
The Chairman. Be sworn, please.
18686 IMPROPER ACTIVITIES IN THE LABOR FIELD
You do solemnly swear 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.Zizzo. I do.
TESTIMONY OF FRANK ZIZZO
The Chairman. State your name, your place of residence, and your
business
Mr. Zizzo. My name is Frank Zizzo.
The Chairman. Do you want them one at a time? What is your
residence?
Mr. Zizzo. I respectfully decline to answer under the provisions of
the fifth amendment to the Constitution of the United States. My
answer may tend to incriminate me.
The Chairman. I asked what your residence was. You certainly
don't mind giving that, do you ?
Mr. Zizzo. My answer stands, Senator.
The Chairman. Where you live might incriminate you? What
kind of place do you live in ?
Mr. Zizzo. I respectfully decline to answer under the provisions of
the fifth amendment.
The Chairman. Have you an attorney ? Have you anyone to rep-
resent you?
Mr. Zizzo. I do not.
The Chairman. Proceed, Mr. Kennedy.
Mr. Kennedy. I would like to call Mr. Duffy to give the operations
of Mr. Zizzo.
The Chairman. Wliat is your occupation ?
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment, that my answer may tend to incriminate me.
The Chairman, May intend to or tend to ? Which did you say ?
Mr. Zizzo. May tend to incriminate me.
The Chairman. Tend.
Proceed with Mr. Duffy.
TESTIMONY OF LaVERN J. DUFFY— Resumed
Mr. Duffy. Mr, Zizzo from 1955 to April 1, 1957, was a special in-
vestigator for the Master Barbers Association in Chicago, with a rep-
utation of being a muscleman and keeping union barbershops in line
in that area.
Mr. Kennedy. Is that correct ?
Mr. Zizzo. I respectfully decline to answer.
Mr. Kennedy. How did you get
The Chairman, Wliat year was that ?
Mr. Duffy. April 1955 to April 1, 1957.
Mr. Kennedy. How did you get to be — what was he called ?
Mr. Duffy. A special investigator.
Mr. Kennedy. How did you get to be a special investigator for the-
Master Barbers Association ?
Mr. Zizzo. I respectfully decline to answer.
The Chairman. For what reason ?
Mr. Zizzo. That my answer may tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18687
Mr. Kennedy. Go ahead.
Mr. Duffy. We have other special investigators for the Master
Barbers Association. Mr. Tom Morgano, who appeared before this
committee, was a special investigator also.
The Chairman. What did you investigate ?
Mr. Zizzo. I respectfully aecline to answer, that my answer may
tend to incriminate me.
Mr. Duffy. I might also add that there are no records in the files
of the Master Barbers Association to indicate what these men did do.
The Chairman. Were they on the payroll ?
Mr. Duffy. They were on the payroll.
The Chairman. At what salary ? Do you remember ?
Mr. Duffy. I think — I better wait. Senator. Tomorrow we will
have more testimony on that.
The Chairman. You don't recall exactly ?
Mr. Duffy. We will have that tomorrow morning, Senator.
The Chairman. All right.
Mr. Duffy. Kelating to Mr. Zizzo's operation in Lake County, he
resigned from the Master Barbers Association effective April 1, 1957.
James Kutledge, who was a member of the conspiracy with Mr. Pinelli
and Mr. Formusa on illegal gambling operations died, and Mr. Zizzo
came over to Lake County to take over those operations.
We know that as a fact established by a Federal agency. And also
we know that the Federal gambling stamp issued to Kutledge in 195T
was issued to Mr. Zizzo for the Uptown Lunch in Whiting. In 1959
the Federal gambling stamp was again issued to Mr. Zizzo for the
operation, which is a known bookie and gambling operation.
Mr. Kennedy. Could you tell us about any of your operations down
there, why you happened to come down to Lake County ?
Mr. Zizzo. I respectfully decline to answer under the grounds that
that question may tend to incriminate me.
Mr. Kennedy. Who was it that send you down there to operate in
Lake County, Mr. Zizzo ?
Mr. Zizzo. I respectfully decline to answer, that that question may
tend to incriminate me.
The Chairman. Did you ever do anything that wouldn't tend to
incriminate you ?
Mr. Zizzo. I respectfully decline to answer, that that question may
tend to incriminate me.
The Chairman. Are you an American citizen ?
Mr. Zizzo. I respectfully decline to answer. Senator.
The Chairman. You think a fellow is a pretty sorry sort of scum
who can't answer that he is an American citizen without possible self-
incrimination ? Do you want to answer that, or do you want to take
the fifth?
Mr. Zizzo. I respectfully decline to answer, that that question may
tend to incriminate me.
The Chairman. The answer might tend to incriminate you ?
Mr. Zizzo. It might.
The Chairman. The only way it could would be if you answered
yes.
Mr. Kennedy. The Uptown Lunch Club is one of the places he
operated ?
18688 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Duffy. A bookie operation, operated by Mr. Zizzo.
Mr. Kennedy. How much did he declare out of that ?
Mr. Duffy. $26,723.41 for the year 1957.
Mr. Kennedy. Is that one of your bookie operations down there ?
Mr. Zizzo. I respectfully decline to answer.
Mr. Kennedy. Were you put in charge of that by Anthony Pinelli ?
Mr. Zizzo. I respectfully decline to answer, that that question may
tend to incriminate me.
Mr. Kennedy. And you were one of those who was brought out of
Chicago in accordance with the arrangements that have been made
between Mr. Pinelli and Mr. Giancana ? You were one of those who
was brought down to operate some of the gambling operations in
Lake County; is that correct?
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment to the Constitution of the United States.
Mr. Kennedy. Mr. Chairman, I think this shows, as we develop
it again tomorrow, with the activities of Mr. Pinelli, as much as
any hearing that we have had the operation or the syndicate opera-
tion of the underworld here in the United States, where they come
from one community to another, they set up and establish their
operations, and get complete control of industries, the vice, the gam-
bling, and when they need a labor union they set a labor organization
up ; when they feel it is more beneficial they put a labor organization
out of existence.
Here is a case where Mr. Zizzo was brought down from Chicago
to the operations in Lake County, all because of his relationship
with Mr. Pinelli and Mr. Giancana, who was the gunman for the
remnants of the Al Capone mob.
The Chairman. Do you want to many any explanation of it?
Mr. Zizzo. I respectfully decline to answer, Senator, under the
provisions of the fifth amendment to the Constitution of the United
States, by reason of the fact that my answer may tend to incrimi-
nate me.
Mr. Kennedy. Of course, Mr. Chairman, this is only possible where
you have lax law enforcement. All of these operations could not
have existed. Mr. Zizzo could not have come down there. You
could not have had Mr. Pinelli's operations. You could not have
had Mr. Formusa's open operations, if it had not been for the help
and assistance given by Mr. Holovachka.
Mr. Holovachka, if he was following through on his responsibili-
ties, of course, these things could not have happened or continue to
go on.
Could you tell us, Mr. Zizzo, what payments were made to Mr.
Holovachka for allowing your operation ?
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment of the U.S. Constitution, by reason of the fact
that my answer may tend to incriminate me.
Mr. Kennedy. Another individual that was brought down there
was Mr. Tony Gruttadauro, the nephew of Tony Pinelli?
Mr. Zizzo. I respectfully decline to answer under the fifth amend-
ment to the Constitution of the United States, by the fact that my
answer may tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18689
Mr. Kennedy. Mr. Gruttadauro was one of those in Lake Coun-
ty, and he was also an investigator for the Chicago Barbers Associa-
tion.
The Chairman. Do you know him ?
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment of the Constitution of the United States by
reason of the fact that my answer may tend to incriminate me.
The Chairman. Did you work with him in that capacity ?
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment to the Constitution of the United States, by
reason of the fact that my answer may tend to incriminate me.
The Chairman. IVliere is your home ?
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment to the Constitution of the United States by
reason of the fact that my answer may tend to incriminate me.
The Chairman. We can only assume from that that you live in
some place in the United States you are ashamed of.
Mr. Zizzo. Do you w^ant me to answer that. Senator ?
The Chairman. I don't care w^hether you do or not.
Mr. Zizzo. I respectfully decline to answer under the provisions
of the fifth amendment to the Constitution of the United States by
reason of the fact that my answer may tend to incriminate me.
The Chairman. It wasn't necessary to do that
Mr. Zizzo. I am sorry, Senator.
The Chairman. That is not an answer.
Mr. Zizzo. I am sorry. Senator.
The Chairman. That is taking the fifth amendment. I thought
you wanted to answer something.
Proceed.
Mr. Kennedy. Mr. Chairman, I might ask Mr. Duffy to put in the
telephone calls from Mr. Formusa to Mr. Conroy, the documents that
we have.
The Chairman. Is Mr. Formusa still here?
Mr. Kennedy. I think he has gone. But we mentioned them when
he was here.
The Chairman. Mr. Duffy, you may identify them.
Do you have a list ? Wliat do you have there in your hand ?
Mr. Duffy. I have the toll tickets. Senator.
The Chairman. Telephone toll tickets ?
Mr. Duffy. Yes.
The Chairman. Are they originals ?
Mr. Duffy. They are originals.
The Chairman. How many have you ?
Mr. Duffy. I have six in my hancl.
The Chairman. Six. Who are the telephone calls from and to
whom ?
Mr. Duffy. The calls are from Yellowstone 8-5324, which is the
telephone listing for John Formusa. They are made to Executive
8-0022, which is the unlisted telephone number of Walter Conroy.
The Chairman. We asked Mr. Conroy about them yesterday and
also asked him about the calls ?
Mr. Duffy. Right.
Mr. Kennedy. He couldn't remember, he said.
18690 IMPROPER ACTIVITIES IN THE LABOR FIELD
The Chairman. They may be made in bulk exhibit No. 14.
(Telephone toll tickets referred to were marked "Exhibit No. 14"
for reference, and may be found in the files of the select committee.)
The Chairman. Are there any other questions of this Mr. Zizzo?
Are there any questions of witness Zizzo ?
Mr. ICennedy. I might say, Mr. Chairman, that some of these calls
are less than a minute, but the one, for instance, on January 30, 1959,
was for a couple of minutes, and then we have some of these calls for
as long as 4 or 5 minutes.
The Chairman. What dates are they ?
Mr. Kennedy. September 2, 1958; October 1, 1958; January 2,
1959 ; January 3, 1959 ; January 30, 1959.
The Chairman. All of them less than a year ago, and one of them
within the last
Mr. Kennedy. We do not have them prior to that time, but those
are the records for the 6-month period.
The Chairman, He averaged a call for each month ?
Mr. Kennedy. Yes, sir.
The Chairman. Is there anything else ?
Mr. Kennedy. That is all.
The Chairman. You may stand aside.
The committee will stand in recess until 2 o'clock tomorrow after-
noon.
(Wliereupon, at 3 :30 p.m., the committee recessed, to reconvene at
2 p.m., Wednesday, June 10, 1959.)
(Members of the select committee present at the taking of the recess
were Senators McClellan and Capehart.)
INVESTIGATIONS OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
WEDNESDAY, JUNE 10, 1959
U.S. Senate,
Select Committee on Improper Activities
IN THE Labor or Management Field,
Washington, D.G.
The select committee met at 2 : 30 p.m., pursuant to Senate Resolu-
tion 44, agreed to February 2, 1959, in the caucus room, Senate Office
Building, Senator Frank Church presiding.
Present: Senator John L. McClellan, Democrat, Arkansas; Sen-
ator Karl E. Mundt, Republican, South Dakota; Senator Frank
Church, Democrat, Idaho ; Senator Homer E. Capehart, Republican,
Indiana.
Also present : Robert F. Kennedy, chief counsel ; LaVerne J. Duffy,
investigator ; Richard G. Sinclair, investigator ; James F. Mundie, in-
vestigator; John T. Thiede, investigator; Robert E. Manuel, assistant
counsel ; Ruth Y. Watt, chief clerk.
Senator Church. The committee will come to order.
(Members of the select committee present at time of convening:
Senators Church and Capehart.)
Senator Church. Mr. Kennedy, will you call the first witness,
please ?
Mr. Kennedy. Mr. Anthony Pinelli, Mr. Chairman.
Senator Church. Mr. Anthony Pinelli, please come forward.
You do solemnly swear that all the evidence you will give before
this Senate select committee will be the truth, the whole truth, and
nothing but the truth, so help you God ?
Mr. Pinelli. I do.
TESTIMONY OF ANTHONY PINELLI
Senator Church. Will you please give the committee your name,
your residence, and your occupation, please ?
Mr. Pinelli. Anthony Tony Pinelli.
Senator Church. Wliere do you reside, Mr. Pinelli ?
Mr. Pinelli. I respectfully decline to answer the question for the
reason that under the Constitution of the United States and all of its
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself and might tend to incriminate me.
Senator Church. Mr. Pinelli, do you honestly believe that telling
the committee where you reside would tend to incriminate you ?
Mr. Pinelli. I respectfully decline to answer the question for the
reason that under the Constitution of the United States and all of its
18691
18692 IMPROPER ACTIVITIES IN THE LABOR FIELD
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself and might tend to incriminate me.
Senator Church. What is your occupation, Mr. Pinelli ?
Mr. Pinelli. I respectfully decline to answer the question for the
reason that under the Constitution of the United States and all of its
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself and might tend to incriminate me.
Senator Church. Do you honestly believe that if you were to tell
this committee your occupation, a truthful answer to the question,
"Wliat is your occupation?" would tend to render you liable to crim-
inal prosecution?
Mr. Pinelli. I respectfully decline to answer the question for the
reason that under the Constitution of the United States and all of its
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself and might tend to incriminate me.
Senator Church. All right, Mr. Kennedy ; would you please pursue
the examination of this witness ?
Mr. Kennedy. Mr. Chairman, we have already had the testimony
in connection with Mr. Pinelli's activities in northern Indiana, and
the fact that he moved in in 1954 and took over some of the gambling
at the same time that Mr. John Formusa was taking over the vice.
We had the third operation of pinball machines, all with the help
and assistance of the office of the public prosecutor, Mr. Metro
Holovachka.
So I would like to start out by asldng Mr. Pinelli if he made any
payments directly or indirectly to Mr. Metro Holovachka.
Mr. Pinelli. I respectfully decline to answer the question for the
reason that under the Constitution of the United States and all of its
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself and might tend to incriminate me.
Mr. Kennedy. Mr. Chairman, I would like to say that we have done
a considerable amount of work regarding the activities and the
backgromid of Mr. Anthony Pinelli. We consider him one of the
most important witnesses that we have had before the committee,
because of his widespread influence and his associations with some
of the leading gangsters in several sections of the United States.
Mr. Salinger has conducted that investigation, and I would like
to have permission to call him to develop the material that we have
been able to put together regarding the activities of Mr. Anthony
Pinelli.
Senator Church. Mr. Salinger, would you come forward, please?
TESTIMONY OF PIERRE E. G. SALINGER— Resumed
Senator Church. Mr. Salinger, have you been sworn in the course
of these hearings concerning the Lake County situation ?
Mr. Salinger. I have, sir.
Senator Church. Would you identify yourself for purposes of the
record at this point? You are a member of the staff of this commit-
tee ? Is that not correct ?
Mr. Salinger. I am, sir.
Senator Church. Mr. Kennedy.
lAIPROPER ACTIVITIES IN THE LABOR FIELD 18693
Mr. Kennedy. Mr. Salinger, you have made an investigation, to-
gether with other members of the stalT, regarding the activities of Mr.
Anthony Pinelli ; is that right?
Mr. Salinger. I have, sir.
Mr. Kennedy. Mr. Anthony Pinelli is of considerable interest to
the committee, because his criminal activities up to about 1953 were
completely unknown; is that right?
Mr. Salinger. That is correct, sir.
Mr. Kennedy. And even up until today in tliis investigation, the
extent of his operations was unlvnown ; is that correct?
Mr. Salinger. That is right, sir.
Mr. Kennedy. Would you give a little of the backgromid of An-
thony Pinelli, where he lived, where he came from, when he moved
in on the rackets and gambling in northern Indiana?
Mr. Salinger. Mr. Anthony Pinelli's principal occupations were in
the Chicago area up to 1951, although from 1945 to 1951 he took up
residence in the town of Sierra Madre, Calif. That is a town on the
outskirts of Los Angeles in Los Angeles Comity.
There he bought a home, moved his family and took up residence,
occasionally making trips to the East, which people who knew him
only knew were for business interests, and they did not know what
these business interests were.
Mr. Pinelli is 59 years old. He was born in 1899. He has used a
number of aliases, including the alias of Joe Legno. He has used the
name of Frank Heisler, which is of interest to us because that is the
name of his accountant.
Mr. Kennedy. Who comes from Chicago ?
Mr. Salinger. Who comes from Chicago. And he has used the
name of Tony Melton. He was indicted for violation of the National
Prohibition Act in 1933 and served a 6-month sentence at that time
in the De Kalb County jail.
In 1952 he was charged with illegal manufacture of nontaxpaid
whisky, along with a number of other people, and this charge he re-
ceived a probation sentence on. It is of some interest to note that
one of his associates in that second conviction was a man by the name
of Sam Ventura, about whom we will have further information, but
with whom he has maintained an association throughout the years.
In fact, we have an invoice on one of Mr. Pinelli's enterprises for
some meat which was delivered to this enterprise, which was signed
for by Mr. Ventura.
Mr. Pinelli has five children, two sons and three daughters. The
two sons are married to daughters of top syndicate persons, one of
then being Phil Amari, who is a top mobster in the New Jersey area,
and the other a man named James DeGeorge.
Mr. Kennedy. Spell the names as we go along.
Mr. Salinger. Phil Amari, A-m-a-r-i. He is in New Jersey. The
other gentleman whose daughter mai-ried a son of Anthony Pinelli is
James D-e-G-e-o-r-g-e.
Mr. Kennedy. Where is he from ?
Mr. Salinger. Mr. DeGeorge is from Chicago.
As I said, Mr. Pinelli moved out to Sierra Madre in 1945, but dur-
ing the years 1945 through 1951 he conducted bookmaking activities
36751— 59— pt. 53 18
18694 IMPROPER ACTIVITIES IN THE LABOR FIELD
in Chicago. He operated a number of clubs, including the Grenshaw
Club, the Fillmore Club, and the Arlington Club, in Chicago, 111.
Mr. Kennedy. Would you give us those names again ?
Mr. Salinger. G-r-e-n-s-h-a-w; the Fillmore Club, F-i-1-1-
m-o-r-e; and the Arlington Club, A-r-1-i-n-g-t-o-n. He had a num-
ber of partners in these enterprises, including a man named James
Markese, James Nicoletti, Sam Siano, and Joseph Dote. In the years
1948, 1949, 1950, and 1951, his income from these bookmaking enter-
prises totaled $92,590.59.
It is of some interest to note that following the activities of the
Kef auver committee, Mr. Pinelli ceased to declare income from book-
making enterprises, and instead, in all the ensuing years, he has shown
income labeled in his tax returns as dice game winnings, Las Vegas,
Nev. We will go into that a little more extensively later in his testi-
mony.
Mr. Pinelli acquired valuable real estate in the Los Angeles County
area. Among these real estate possessions which he acquired were
a number of homes in the town of Sierra Madre, in fact, right along
the main street of Sierra Madre.
Mr. Chairman, I have here a picture, an aerial photo, which shows
seven of these homes which were acquired by Mr. Pinelli during the
period when he lived in California.
Mr. Kennedy. The point of all this is that while he was involved
in this illicit and illegal activity in the Midwest, he moved out to this
small city outside of Los Angeles, settled there, and with the illegal
profits that he was making from his various operations, he invested
in real estate and gradually got control of much of the best real estate
in Sierra Madre ; is that correct ?
Mr. Salinger. Along the main street of Sierra Madre.
Mr. Kennedy. As you go on, you will develop and show how he
was able to extend his operations beyond real estate into a number
of other companies ?
Mr. Salinger. That is correct.
Mr. Kennedy. Businesses that he was able to gain control of
through these illicit operations ?
Mr. Salinger. That is correct.
Senator Church. The photograph that you have handed me is of
the business district of Sierra Madre ?
Mr. Salinger. That is correct, sir.
Senator Church. And the buildings in the photograph that are
labeled 1, 2, 3, 4, 5, 6, and 7, respectively, are buildings that were ac-
quired by this witness during the period that you have testified to?
Mr. Salinger. That is correct.
Senator Church. Very well. With that identification, this m.ay
be made exhibit No. 15.
(Photo referred to was marked "Exhibit No. 15" for reference and
jnay be found in the files of the select committee.)
Senator Church. Exhibit No. 15 is for purposes of the record.
Mr. Kennedy. Have you a memorandum there that identifies the
addresses ?
Mr. Salinger. I will identify them.
Mr. Kennedy. I don't think you have to read it in,
Mr. Salinger. It is a memorandum in which point 5 is the identi-
fying material for this particular photograph.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18695
Senator Church. That may be made part of exhibit No. 15.
Mr. Salinger. The homes which are portrayed here, and I will go
through them briefly — first I will give you a total of their value as
of the present time, as closely as we can determine through an exami-
nation of the real estate records in Los Angeles County.
The total value of these real estate holdings, including others I
will mention, are $443,600. They include homes at 481 West Sierra
Madre Boulevard.
Senator Church. I don't think you have to go through the ad-
dresses.
Mr. Salinger. Kight. In addition, Mr. Pinelli acquired valuable
land in the heart of Hollywood, only a few blocks, in fact, from the
corner of Hollywood and Vine, where was erected the Movietown
Motel, the present value of which is in the neighborhood of $200,000.
This motel is carried in the name of Anthony Pinelli, Jr., and
Salvatore Pinelli, his sons. It is of interest that in addition to the
money which was loaned to them by Mr. Pinelli, Sr., tlio witness
here, to get this motel started, they also received substantial loans
from three gentlemen I previously identified as having part of Mr.
Pinelli's bookmaking enterprises in Chicago, 111.
These loans are evidenced by three checks payable on the bank
of the Movietown Motel, Hollywood, Calif., and made payable to
James Markese, in the amount of $12,500 ; Sam Siano, in the amount
of $5,000; and Joe Dote, in the amount of $5,000; a total of $22,500.
These three gentlemen — the books of the Movietown Motel show
that these three gentlemen received these checks in return for loans
they made to help the motel get started.
Mr. Kennedy. In addition to being in the bookmaking operations
with Pinelli, isn't it correct that Mr. Siano is one of those individuals
wlio was a special investigator for the Chicago Barbers Association ?
Mr. Salinger. That is correct.
In addition, the family acquired the Covina Liquor Store, in Covina,
Calif.
Senator Church. Before we go on to that, the three checks that
you have referred to, all dated June 9, 1954, and payable respectively
to the orders of Joe Dote, Sam Siano, and James Markese, in the
respective sums of $5,000, $5,000, and $12,500, all bearing the signa-
ture of Salvatore J. Pinelli
Mr. Salinger. He is the son of Anthony Pinelli.
Senator Church. You have referred to these checks as evidence
of the fact that this witness' son paid these amounts in payment
for loans made in the acquisition of the motel ?
Mr. Salinger. The motel, which is carried in the names of Salva-
tore and Anthony Pinelli, Jr., borrowed money at its inception to
help it get started from these three gentlemen, and these payments
are returns of those loans.
Senator Church. These checks are evidence of repayment of those
loans ?
Mr. Salinger. That is correct.
Senator Church. Very well. The three checks may be made ex-
hibits Nos. 16 A, B, and C.
(Checks referred to were marked "Exhibit Nos. 16A, 16B, and 16C"
for reference and will be found in the appendix on p. 18784, 18786.)
18696 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Chuech. Please continue.
Mr. Salinger. As Mr. Kennedy stated, Mr. Pinelli was a relatively
unknown person and a completely unknown person to authorities in
the Los Angeles area, even though he had lived there for approximately
8 years.
In January 1953, when Anthony Accardo, Sam Giancana, and Dr.
Eugene Chesrow arrived at the Los Angeles International Airport
Mr. Kennedy. That was when Tony Accardo and Sam "Mooney"
Giancana, the two top gangsters in Chicago, came out with Dr. Ches-
row to Los Angeles and were met there by Anthony Pinelli ; is that
right?
Mr. Salinger. By Frank Ferraro and Anthony Pinelli.
Mr. Kennedy. January 5, 1953 ?
Mr. Salinger. Yes.
Mr. Kennedy. Spell Ferraro.
Mr. Salinger. F-e-r-r-a-r-o.
Mr. Kennedy. Mr. McShane, could you give briefly the back-
ground of Mr. Ferraro, who was expected to be a witness? You
know the details.
Senator Church. Please 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. McShane. I do.
TESTIMONY OF JAMES J. P. McSHANE
Senator Churcpi. Please give your name and your connection with
the committee.
Mr. McShane. My name is James McShane. I am a Senate in-
vestigator for this committee, and I reside in New York City.
Senator Church. Veiy well.
Mr. Kennedy. Mr. McShane, just give us an outline of the back-
ground of Mr. Ferraro. Mr. Ferraro was expected to be a witness,
but he is the one who had an attack at the time he got to the airport.
Mr. McShane. They took him from the airport to a hospital in
Chicago. His true name is Frank Sortino, and he resides at 320
Oakdale Avenue, in Chicago, a floor below Mr. "Dutch" Vogel, Eddie
Vogel.
On January 15, 1953, Mr, Ferraro rented a Cadillac in Los Ange-
les and drove Mr. Pinelli to the Los Angeles International Airport,
where they met Mr. Tony Accardo, Mr. Sam "Mooney" Giancana,
flying under the name of Mancuso, and Dr. Chesrow.
Dr. Chesrow identified himself as the superintendent of the Oak
Forest Old People's Home, and he was the personal physician for
the last 15 to 20 years of Tony Accardo.
It is interesting to note that Mr. Ferraro is Gus Alex's No. 1 man
in the first ward in Chicago. They control everything illegal. They
have the reputation, in using the parlance of the underworld, of be-
ing "hard coal," and of all members of the Chicago underworld, Mr.
Ferraro and Mr. Alex are considered the most vicious and ruthless.
Over the years we have been able to establish that Mr. Ferraro has
made trips to Miami, to Bimini with Tony Accardo; Mr. George
IMPROPER ACTIVITIES IN THE LABOR FIELD 18697
Giacola, also known as George King, and who is also known Aery
well in the Chicago underworld.
Another thing that might be of interest if Mr. Ferraro was here
today, if we could question him, is the slaying of Theodore Rowe,
who was slain in gangland fashion some years ago when he was the
king of policy on Chicago's South Side.
The prime suspects in that particular homicide, Senator, were
Sam Alex, a brother of Gus Alex, Rocco Coluccio, and Mr. Ferraro.
As of today, we have been able to establish that Mr. Ferraro owns
a 42- foot Chris-Craft cabin cruiser. Also on the records of the Coast
Guard in Chicago, it shows that he shared this wdth, again, Mr.
Rocco Coluccio, and a John Rodi. The address given, the business
address given for the ownership of this boat, is 2500 South Ashland
Avenue, whicli, incidentally, happens to be the business address of
the Chris-Craft office.
Mr. Kennedy. Is Mr. Ferraro the one that identified himself as the
tailor when he was out there ?
Mr. McShane. He identified himself as a tailor ; yes, Celano Tailor
Co. of 43 South Jackson Avenue, Chicago.
TESTIMONY OF PIERUE E. G. SALINGER— Resumed
Mr. Kennedy. Mr. Salinger, would you continue with the meeting
that took place ?
Mr. Salinger. I might say these gentlemen arrived in Los Angeles
and they made a quick trip into town, which lasted 3 or 4 hours, and
returned to the airport where they were picked up by the Los Ange-
les Police Department and were questioned. As w^as testified yester-
day, they had a substantial amount of cash in their pockets.
Mr. Pinelli was interviewed at the airport and he was very bel-
ligerent. He said he was an importer-exporter and was released.
The Los Angeles police then inquired as to who Mr. Pinelli was, and
they got back the information that they had very little on Mr. Pinelli,
except they heard that he might be a bookmaker. But their curiosity
was aroused and they set up a close surveillance on Mr. Pinelli's
activities, which resulted in some rather interesting things.
First of all, during one of their surveillances, they spotted a car
parked in front of Mr. Pinelli's home which was registered to Frank
DeSimone. Mr. DeSimone is a lawyer who was present at the Apa-
lachin meeting and who is known as a gangland lawyer in the West.
A number of people were seen emerging from Mr. Pinelli's house.
They were trailed and finally apprehended. They turned out to be
Mr. DeSimone, Mr. Jolm Sebastian LaRocca, of Pittsburgh, Pa.
Mr. Kennedy. Spell that.
Mr. Salinger. L-a-R-o-c-c-a. And Mr. Salvatore Marino, of San
Jose, Calif.
Mr. Kennedy. Who is Marino?
Mr. Salinger. Mr. Marino identified himself as the owner of the
California Chess Co. in San Jose, Calif., and he told the police officers
that he had come to Los Angeles with his old friend, Mr. LaRocca.
Mr. LaRocca identified himself to the police as the ow^ner or president
of the Kooler Keg Co. of Pittsburgh, Pa., with offices at 500 North
Craig Street, Pittsburgh.
18698 IMPROPER ACTIVITIES IN THE LABOR FIELD
He also had a card in his possession describing him as a represent-
ative of the Coin Machine Distributing Co. of Pittsburgh, Pa. Both
of these cards were in the name of John S. LaRocca. I have the
three cards here, Mr. Chairman, which were taken from these gentle-
men when they were apprehended as a result of their visit with Mr.
Pinelli.
It is of some interest, and this is in 1956 that this observation was
made of Mr. Pinelli's home and gave the police there some indication
of his importance in the underworld circles, that in 1955 Mr. John S»
LaRocca, the same Mr. John S. LaRocca, and Mr. Gabriel Kelly
Mannarino, both giving the address of 500 North Craig Street,
Pittsburgh, Pa., registered at the Hotel Gary in Gary, Ind.
The registration of these two gentlemen at the Hotel Gary in Gary,
Ind,, shows "Charge to Mr. Melton, room 648." We interviewed the
manager of the hotel, and have a deposition from him in which he
identifies Mr. Melton, who was staying in room 648 at that time, as
Mr. Anthony Pinelli on the basis of a picture shown to him of Mr.
Pinelli.
Mr. Kennedy. So Mr. Mannarino and Mr. LaRocca not only met
with Mr. Pinelli out on the west coast, but they came to the Hotel
Gary, and stayed there in 1956 ; is that correct?
Mr. Salinger. 1955.
Mr. Kennedy. They came there in 1955 and stayed there, and their
hotel bill was paid by Mr. Anthony Pinelli, who was staying at the
Hotel Gary under a different name ?
Mr. Salinger. That is correct. Not to get confused, Mr. Manna-
rino came to Gary. He did not go out to the west coast. That was
Mr. Marino, a different individual.
We might place this affidavit in the record, too, Mr. Chairman, be-
cause it relates to a number of other visits of Mr. Pinelli to Gary,
Ind., during the period in which we are interested in his activities
in Gary, Ind.
On a number of occasions he registered at the hotel in most instances
as Mr. Tony Melton, and on most occasions shared the room with a
woman who identified herself as Mrs. Josephine Melton, about whom
we will have further testimony.
Senator Church. I have here what appears to be an affidavit signed
by S. W. Ferry. I take it that S. W. Feriy was the hotel clerk in
question ?
Mr. Salinger. That is correct, sir.
Senator Church. Have you personal knowledge that this affidavit
was, in fact, his and bears his signature ?
Mr. Salinger. That is correct, sir.
Senator Church. With that identification, without objection, it will
be made exhibit No. 17 for purposes of the record.
(Affidavit referred to was marked "Exhibit No. 17" for reference
and may be found in the files of the select committee.)
Mr. Salinger. Also, during the course of surveillance on Mr.
Pinelli's home in Sierra Madre, the automobile of Max Berman, of
Chicago, 111., was seen in front of his home. Mr. Max Berman is a
longtime Chicago hoodlum. He is a notorious burglar who was
paroled in 1942 after spending 12 years in prison for burglary.
(At this point Senator Mundt entered the hearing room.)
IMPROPER ACTIVITIES IN THE LABOR FIELD 18699
Mr. Salinger. Also, as a result of surveillance in Los Angeles, Mr.
Pinelli was seen meeting with Mr. Adolph John Formusa, who was a
witness before the committee yesterday, and who was identified as a
man operating houses of prostitution in Lake County, Ind.
They met in Los Angeles on October 30, 1956, and were observed by
the police department there. Investigation was made of a bookmak-
ing establishment in Chicago located at 140 North Dearborn Street.
This telephone was used extensively by Antliony Accardo and Jacob
M. Guzik.
The records of that telephone showed they were in commmiication
with Mr. Pinelli at his unlisted telephone number in Sierra Madre,
Calif. Further, we established a relationsliip between Mr. Pinelli
and Mr. Tom Morgano who, according to the testimony before this
committee, attempted to bribe an official in Porter County, Ind., to
open up gambling in that county.
Mr. Pinelli and Mr. Morgano were partners in the operation of the
Stag, which was a bookmaking and gambling operation, which oper-
ated in Gary, Ind., but closed in 1957.
Through other information, Mr. Pinelli has been in touch with and
associated with such west coast hoodlums, all of whom are now de-
ceased, as Girolamo Adamo, Jack Dragna, and Tony Mirabile.
Mr. Pinelli, following the Kefauver committee, diversified his ac-
tivities considerably. In addition to his extensive real estate holdings
in California, he moved into the Lake County, Ind., area as the oper-
ator of the Century Distributing Co., a jukebox distributing firm
about which there will be further tesitm,ony.
He also opened a pizza restaurant known as the Villa Pizza. He
operated a firm called the North Side Grape Distributors, and accord-
ing to records we have of the North Side Grape Distributors, among
his partners in that venture were Mr. James DeGeorge and Mr.
Joseph Gagliano.
Mr. Gagliano was a witness before the committee during recent
hearings, and invoked the fifth amendment. He has a lengthy crimi-
nal record. He has been seen at several of the so-called July Fourth
lawn parties of Mr. Anthony Accardo.
(At this point Senator Church withdrew from the hearing room.)
Mr. Salinger. He operated in olive oil, and he also had a business
as a wine merchant. It is of some interest to us, this wine business.
Mr. Pinelli appeared at the winery called the Capistrano Winery
and Vineyard in Fontana, Calif. He was accompanied by Mr. Charles
Dippolito, Charles Salvatore Dippolito. Mr. Dippolito is a known
underworld figure with a long criminal record. And also with Mr.
Joe Dippolito. These gentlemen instructed the owner of the winery
to turn over 30,000 gallons of burgundy and some 24,000 gallons of
port to the account of Mr. Pinelli. This, from what we have been
able to determ,ine, is how Mr. Pinelli got in the wine business origi-
nally, through Mr. Dippolito telling them to turn over the wine they
had for his use in storage to Pinelli.
Mr. Kennedy. They are also notorious figures ?
Mr. Salinger. They are.
Mr. Kennedy. And understood by the police departments of the
West to run the underworld in San Bernardino ?
Mr. Salinger. That is the information we have from the Los
Angeles Police Department.
18700 IMPROPER ACTIVITIES IN THE LABOR FIELD
As I said, following the end or the exposures of the Kefauver com-
mittee, Mr. Pinelli started to list large amounts on his income-tax
return as dice-game winnings, Las Vegas, Nev. This becomes of some
interest to us,
(At this point Senator McClellan returned to the hearing room.)
Mr. Salinger. During the years 1952 through 1958, he declared a
total of $74,000 in this manner.
We first were able to determine the source of some of these dice-
gam.e winnings through examination of Mr. Pinelli's bank accounts
in Sierra Madre, Calif., and were able to find a number of checks
made out to Mr. Pinelli by the Desert Inn, in Las Vegas, Nev. I will
read off the checks and their amounts.
One check is in the amount of $16,400, dated December 8, 1952 ; the
second check is in the amount of $9,800, dated December 28, 1953 ; a
third check is in the amount of $12,300, dated January 26, 1593 ; and
the fourth check is in the amount of $5,000, dated February 1, 1954.
All these checks were drawn on the account of the Desert Inn and
made payable to Mr. Pinelli.
When we went to inquire from the Desert Inn as to what these
checks represented, we were told that they were exchanges for cash
which Mr. Pinelli had turned in at the casinos there. We were told
that Mr. Pinelli just appeared with this cash and they gave him the
checks, and they assumed he had won that money in gambling, but
they had no way of proving that he had won the money in gambling.
(At this point Senator Capehart withdrew from the hearing room.)
Mr. Salinger. This represents $74,000 in gambling winnings.
There are several things which tend to indicate that this device was
used by Mr. Pinelli as a way of taking cash which he had secured from
illicit enterprises and converting it into gambling winnings in Las
Vegas, Nev., so he could then funnel his money into legitimate enter-
prises.
Mr. Kennedy. You mean stating it was gambling winnings ?
Mr. Salinger. Stating that. It might not have been. There are
two occasions that this was the case. In the first place, Mr. Pinelli
was arrested and picked up for questioning in Las Vegas, Nev., in
1958.
At that time he was questioned by a deputy sheriff of the Clark
County sheriff's office. Deputies E. Griffin and J. Simmons.
Mr. Pinelli had a card on him which described him as president of
the Century Distributing Co., Gaiy, Ind., accompanied by Mr. Frank
J. Heisler, his certified public accountant.
At that time he made this statement to the officers : Pinelli implied
that Las Vegas had lost a good gambler because we were rousting
him, indicating that he had lost a total of $30,000 while visiting Las
Vegas.
The statement that he made at that time to these officers is at direct
variance with his returns, which showed that he declared $74,000 in
dice-game winnings in Las Vegas, Nev.
The second indication comes in the form of accountant-work papers,
prepared for him by Mr. Heisler. One of these work papers is a
computation of the anticipated income of Mr. Pinelli for the year
1956, on which he could base an estimated tax return, and it is of some
interest to note that this anticipated income schedule prepared by the
accountant and found in his files lists wager profit at $7,000.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18701
It is extremely hard to understand how either Mr, Pinelli or his
accountant could foresee that he was going to win $7,000 in gambling
in that particular year.
Mr. Kennedy. In other words, it would appear tliat he was bringing
cash into Las Vegas, and that he would then get checks for it from
the Desert Inn and list it on his tax returns as gambling winnings ;
is tliat correct?
Mr. Salinger. That is correct.
Mr, Kennedy, The money, in fact, came from the other illicit en-
terprises that he was operating throughout the country ?
Mr. Salinger. That is the assumption.
TESTIMONY OF ANTHONY PINELLI— Resumed
Mr. Kennedy. Is that correct, Mr. Pinelli ?
Mr. Pinelli. I respectful decline to answer the question for the
reason under the Constitution of the United States, and all its amend-
ments, particularly the fifth amendment, my answer would be giving
testimony against myself and might tend to incriminate m.e.
TESTIMONY OF PIEERE E. G. SALINGER— Eesmned
Mr. Salinger. Mr. Pinelli had two other interesting visitors during
the time that he was under observation by the police department in
Los Angeles.
The first of these was Mr. Don Smith, who, through investigation,
has proved to be a member of the vice squad of the Gary Police De-
partment.
I have here, Mr. Chairman, a registration card showing the reg-
istration on August 13, 1956, of Mr. and Mrs. Don Smith and family,
4963 Madison Street, Gary, Ind., at the Movietown Motel, in Holly-
wood, Calif., owned by Mr. Salvatore and Anthony Pinelli.
An examination of the records of that motel fail to show that Mr.
Smith paid for his stay which extended over a period of 6 days at
$12 a day for the room they occupied.
It is of some interest that the following day, while Mr. Smith
was a guest, the same Mr. Salvatore Marino, I previously testified
about, also checked into the Movietown Motel and remained the
same days that Mr. Smith was there.
Mr. Kennedy. Mr. Don Smith is a member of the vice squad of the
police department of the city of Gary, Ind. ?
Mr. Salinger. That is correct.
Mr. Kennedy. He is one of those detectives that has jurisdiction
over gambling and vice ?
Mr. Salinger. That is correct.
During the same period they were registered at the Movietown
Motel, an Olds Holiday automobile bearing Indiana plates CD4963
was seen in front of Mr. Pinelli's home. An investigation by the
police department showed that that automobile was registered in the
name of Margaret P. Smith, 4963 Madison Street, Gary, Ind., the
wife of Don Smith, about whom I have just testified.
A second interesting visitor to Mr. Pinelli's home was Mr. Unetich.
Mr. Unetich is also a member of the vice squad of the Gary Police
18702 IMPROPER ACTIVITIES IN THE LABOR FIELD
Department, and his car was also observed parked in front of the
home of Mr. Pinelli in December of 1955.
Excuse me, that was in the Christmas holidays in 1956.
Mr. Kennedy. He is also a member of the vice squad ?
Mr. Salinger. That is correct.
Mr. Kennedy. That is, of the Gary Police Department.
Mr. John Formusa also visited Mr. Pinelli ; did he not ?
Mr. Salinger. Yes, sir.
Mr. Kennedy. He was visiting in 1958, also, the same year ?
Mr. Salinger. That is correct.
We made a further — through information which we secured from
the examination of telephone calls made by Mr. Pinelli in Gary, Ind.,
when he was registered at the Gary Motel, under the name of Tony
Melton, we found that
The Chairman. Who was registered mider the name of Tony
Melton?
Mr. Salinger. Mr. Pinelli, the witness here.
TESTIMONY OF ANTHONY PINELLI— Resumed
The Chairman. Is that your name ?
Mr. Pinelli. I respectful decline to answer the question for the
reason under the Constitution of the United States
The Chairman. Do you go under the names of aliases?
Mr. Pinelli. And all of its amendments, particularly the fifth
amendment, my answer would be giving testimony against myself and
might tend to incriminate me.
The Chairman. Do you go under the names of aliases ?
Mr. Pinelli. I respectful decline to answer the question for the
reason that under the Constitution of the United States and all of
its amendments, particularly the fifth amendment, my answer would
be giving testimony against myself and might tend to incriminate me.
The Chairman. Can you answer any question without reading that
statement you have before you?
Mr. Pinelli. I respectful decline to answer the question for the
reason that under the Constitution of the United States and all of its
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself and might tend to incriminate me.
The Chairman. Don't you think the answer you have just given,
particularly in response to the question asked you, is a bit silly?
Mr. Pinelli. I didn't hear you.
Tlie Chairman. I said, don't you think the answer you have just
given in view of the question I asked you is a bit silly ?
Mr. Pinelli. I respectfully decline to answer the question for the
reason that under the Constitution of the United States, and all of
its amendments, particularly the fifth amendment, my answer would
be giving testimony against myself and might tend to incriminate me.
The Chairman. All right. Let's see how silly it will be.
Go ahead.
TESTIMONY OF PIERRE E. G. SALINGER^Resumed
Mr. Salinger. Mr. Milton, on July 3, 1955, from his hotel room in
<jary, Ind., placed a call to Las Vegas, Nev., to the Sands Hotel, and
he asked for Mr. Abe Kushner, or Mr. Don Smith.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18703
Mr. Kennedy. Who is Kushner ?
Mr. Salinger. Kushner is president of the Kool-Vent Awning Co.,
and was a partner of Mr. Pinelli's in the Villa Pizza Kestaurant in
Gary, Ind. He loaned Mr. Pinelli $7,500 on that venture.
In checking at the Sands Hotel we found Mr. Smith indeed regis-
tered there on that date in 1955, along with Mr. Kushner and two
other gentlemen: one, Mr. Jack Doyle, who had been the longtime
gambling boss of Lake County, Ind., and Mr. Herb Morris, of Gary,
Ind. The four registered together at the hotel in Las Vegas, Nev.
In fact, their cards indicate that they registered with each other. In
other words, the key room numbers indicate that the four were in
a party together.
Mr. Kennedy. That was Mr. Jack Doyle who, up to the time of
the Kefauver investigation, was head of gambling in Lake County,
Gary ?
Mr. Salinger. That is correct.
Mr. EIennedy. And he had already been convicted of income tax
evasion ?
Mr. Salinger. That is correct.
Mr. Kjennedy. Evidently this same officer who had been out on
the west coast staying at Pinelli's hotel, was at Las Vegas with Mr.
Doyle after he had been convicted of income tax ?
Mr. Salinger. That is correct. Mr. Pinelli, as testimony developed
here, came into Lake County, Ind., following Mr. Doyle's problems,
and took over gambling operations there while Mr. Formusa was tak-
ing over vice operations, and the pinball syndicate was flourishing with
the help of Mr. Holovachka.
The Chairman. I came in a little late. Let me get my bearings.
Is this testimony directed to the same situation which we have been
investigating there in Gary, Ind. ?
Mr. Salinger. That is correct, sir.
The Chairman. And this witness Pinelli had contacts with this
Don Smith?
Mr. Salinger. That is correct, sir.
The Chairman. And Don Smith was
Mr. Salinger. Vice officer of the Gary Police Department.
The Chairman. Vice officer of the Gary Police Department?
Mr. Salinger. That is correct.
The Chairman. Is this part of the same syndicate that moved in
there and took control ?
Mr. Salinger. That is correct, sir.
Mr. Pinelli moved in on the gambling end of the syndicate follow-
ing the Kefauver committee's exposure of Mr. Jack Doyle's activities.
As we have shown through these registration cards, Mr. Smith, a mem-
ber of the vice squad of the Gary Police Department, not only made
a trip to Las Vegas with Mr. Doyle, but also the next year went to
California and stayed at Mr. Pinelli's motel and his car was seen
in front of Mr. Pinelli's home.
^ Senator Mtjndt. Did Mr. Don Smith leave the employment of the
city of Gary as a police officer at the same time Jack Doyle left Lake
County, or did he continue to be a police officer ?
Mr. Salinger. Mr. Smith, to my knowledge, is a member of the vice
squad of Gary Police Department as of today, sir.
18704 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. Even now, after these known associations with men
like Mr. Pinelli and Mr. Doyle ?
Mr. Salinger. As far as I know, he is still — he has been consistently
a member of the vice squad of that police department since 1950,
Senator Mundt. And as far as you know remains in that lofty
position today ?
Mr. Salinger. Yes, sir.
Senator Mundt. You might call that to the attention of the chamber
of commerce that sent us that telegram.
Mr. Salinger. Mr. Smith will be here to testify today, Senator.
The Chairman. Is Mr. Smith present ?
Mr. Kennedy. Yes.
The Chairman. Come forward, Mr. Smith.
Mr. Kennedy. And Mr. Unetich.
The Chairman. Do you and each of 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. Unetich. I do.
Mr. Smith. I do.
TESTIMONY OF FRANK UNETICH AND DONALD SMITH
The Chairman. For the present, each of you state your name and
address.
Mr. Smith. My name is Don Smith. My address is 4963 Madison
Street, Gary, Ind.
The Chairman. Will you state your name, please ?
Mr. Unetich. My name is Frank Unetich. I live at 1346 Koose-
velt Street, Gary, Ind.
The Chairman. Mr. Pinelli, look on your right. You see two gen-
tleman seated there. The one next to you says his name is Donald
Smith, of 4963 Madison Street, Gary, Ind. Do you know him?
TESTIMONY OF ANTHONY PINELLI— Resumed
Mr. Pinelli. I respectful decline to answer the question for the
reason that under the Constitution of the United' States, and all of
its amendments, especially the fifth amendment, my answer would
be given testimony against myself and might tend to incriminate me.
The Chairman. The Chair asks you again the question: Do you
know the man sitting immediately on your right who has identified
himself as Donald Smith of 4963 Madison Street, Gary, Ind. ?
I ask you if, since you have declined to answer it on the grounds
that it might tend to incriminate you — I am asking you the question
now
Mr. Pinelli. I respectful
The Chairman. Wait a minute.
Do you honestly believe that if you gave a truthful answer to the
question, do you know the man who sits on your right who has identi-
fied himself as Donald Smith, that a truthful answer to that question
might tend to incriminate you ?
Mr. Pinelli. I respectful decline to answer the question for the
reason that under the Constitution of the United States, and all of
IMPROPER ACTIVITIES IN THE LABOR FIELD 18705
its amendments, particularly the fifth amendment, my answer Avould
be giving testimony against myself and might tend to incriminate
me.
The Chairman. The Chairman, with the approval of the commit-
tee, now orders you and directs you to answer the question whether
you honestly believe that if you gave a truthful answer to the ques-
tion, Do you know the man sitting immediately on your right who has
identified himself as Donald Smith of 4963 Madison Street, Gary,
Ind., that such a truthful answer might tend to incriminate you ?
Mr. PiNELLi. I respectful decline to answer the question for the
reason that under the Constitution of the United States, and all of its
amendments, particularly the fifth amendment, my answer would be
giving testimony against myself, and might tend to incriminate me.
The Chairman. May I inquire, Mr. Comisel, if the witness was
asked whether he desired counsel before he appeared, before he began
his testimony ^
Mr. Kennedy. He was not.
The Chairman. Do you desire counsel to represent you ?
Mr. PiNELLi. What was that ? I didn't hear.
The Chairman. Do you desire to have counsel here to represent
you ? The answer is "No" ?
Senator Mundt. I can't hear the answer.
Mr. PiNELLi. I respectful decline
Senator Mundt. That isn't any answer to this question. The Chair
asked you w^hether you wanted counsel or not.
Mr. PiNELLi. I don't want counsel.
The Chairman. The reason I asked you whether you wanted counsel
is because the Chair is going to admonish you that you may be placing
yourself in contempt of the Senate by refusing to answer the question
whether you honestly believe that if you gave a truthful answer to
these questions, that a truthful answer might tend to incriminate you.
I do not want to pursue this, lay the foundation and then have the
committee bring up, possibly, a citation for contempt, without giving
you notice of it and giving you an opportunity, if you desire, to have
counsel persent.
I want you to understand what may be involved in your position,
and what the consequences of it may be.
Do you want to state now, or do you want to answer the question
differently by stating whether you honestly believe a truthful answer
might tend to incriminate you, to these questions, such as whether you
know the man sitting on your right who has identified himself as
Donald Smith?
Do you want to change your answer, or do you want the same song ?
Mr. PiNELLi. I respectful decline to answer any questions.
The Chairman. That is your privilege.
Mr. PiNELLi. Yes.
The Chairman. The Chair now admonishes you that the orders and
directions from the committee, and I do this with the approval of the
committee, for you to answer the question will continue during the
time you remain on the witness stand and in the jurisdiction of this
committee. Do you understand it ?
Mr. PiNELLi. No, sir.
The Chairman. Well, I am telling you. I gave you opportunity
to have counsel.
18706 IMPROPER ACTWITIES IN THE LABOR FIELD
The orders of the Chair for you to answer the question continue dur-
ing your presence here. Do you understand that ?
Mr. PiNELLI. No.
The Chairman. Well, you are not that stupid.
Proceed, Mr. Kennedy.
First, let me ask the other witness a question.
What is your name, please ?
Mr. Unetich. I am Frank Unetich.
The Chairman. And you live where ?
Mr. Unetich. 1346 Roosevelt Street, Gary, Ind.
The Chairman. Do you know the man who has just identified him-
self as Frank Unetich, who sits beyond the man on your right who
identified himself as Donald Smith? Mr. Unetich says he lives at
1346 Roosevelt Street, Gary, Ind.
Mr. PiNELLi. I respectful decline to answer the question for the
same reason previously stated.
The Chairman. Do you honestly believe that if you gave a truthful
answer to such question, that a truthful answer might tend to incrim-
inate you ?
Mr. PiNELLi. I respectful decline to answer the question for the
reason stated.
The Chairman. With the approval of the committee, the Chair
orders and directs you to answer that question, and I will give to you
again the same admonition I gave to you a few moments ago, and give
you the opportunity, if you desire, to secure counsel, to be present and
advise you.
Mr. PiNELLi. I respectful decline to answer for the same reason
previously stated.
The Chairman. And you don't want counsel, you stated; is that,
right?
Mr. PiNELLi. I respectful decline to answer
The Chairman. You respectfully decline to say whether you want
counsel or not? Is that what you are saying?
Mr. PiNELLi. I respectful decline to answer the question for the
same reason.
The Chairman. Then it will be held by the committee that you
waived counsel. I am giving you an opportunity to have counsel. If
you want to leave the record that way, that is your privilege.
Mr. PiNELLi. I decline to answer the question.
The Chairman. The record will remain as it is.
Senator Mundt. Mr. Chairman, this witness is obviously in con-
tempt of the committee. At one time he says he does not want counsel,
the next time he takes recourse in the fifth amendment. No witness
can engage in that kind of frivolity in front of a senatorial com-
mittee and not be in contempt. He either has to make up his mind —
he says once he doesn't want one, and then the next time he takes
recourse in the fifth amendment. This is not a game of hide and seek
we are playing.
This is serious business, Mr. Pinelli. Let me ask you once more, ,
because in response to my question you said clearly, "I do not want
counsel." Do you remember saying that ?
Mr. Pinelli. What is that ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18707
Senator Mundt. Do you remember saying that you do not want
counsel ?
Mr. PiNELLi. I decline to answer ■
Senator Mundt. That has nothing to do with that. I am asking if
you remember saying it. You can answer that yes or no. Do you
remember saying for the record a few moments ago that you do
not want counsel ?
Mr. PiNELLi. I respectfully decline to answer on the same grounds.
TESTIMONY OF FRANK UNETICH AND DONALD SMITH— Resumed
Senator Mundt. Mr. Smith, do you know the man sitting at your
left who identifies himself as Anthony Pinelli ?
Mr. Smith. I do.
Senator Mundt. Have you met him before today ?
Mr. Smith. I have.
Senator Mundt. In your opinion, does he know you when he sees
you?
Mr. Smith. In my opinion he does.
Senator Mundt. Mr. Unetich, do you know the gentleman second
to your left who identified himself as Anthony Pinelli ?
Mr. Unetich. I do.
Senator Mundt. Have you seen him before today ?
Mr. Unetich. Yes, sir.
Senator Mundt. In your opinion, does he know you when he sees
you?
Mr. Unetich. Yes, sir.
TESTIMONY OF ANTHONY PINELLI— Resumed
Senator Mundt. Now, Mr. Pinelli, in view of the evidence that you
have just heard, let me ask you again the question : Do you know the
man sitting immediately at your right, Mr. Donald Smith, who says
that he has met you before and that you know him when you see him ?
Mr. Pinelli. I respectfully decline to answer on the same ground
I previously stated.
Senator Mundt. Do you honestly believe that a forthright answer
to that question would incriminate you ?
Mr. Smith is a police officer — I am not sure, I haven't asked Mr.
Unetich what his profession is.
Are you a police officer ?
Mr. Unetich. Yes, sir.
Senator Mundt. Are you a police officer ?
Mr. Smith. Yes, sir.
Senator Mundt. These men are police officers. Certainly the as-
sumption is that a police officer is a good, honest American citizen.
Do you want us to believe that if you tell this committee that you
know Mr. Smith and know Mr. Unetich, it would incriminate you?
Mr. Pinelli. I respectfully decline to answer on the same ground
previously stated in answer to my previous statement.
Senator Mundt, In view of the fact that you did not want counsel,
where did you get that sheet of paper from which you are reading
rather badly ? Did you bring that sheet of paper with you ? Did you
find it on the desk ? Where did you get that sheet of paper ?
18708 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. PiNELLi. I decline to answer under the same ground.
Senator Mundt. What ground ? I am always intrigued when I hear
you read it.
Mr. PiNELLi. Sir?
Senator Mundt. On w^hat ground ?
Mr. PiNELLi. On the gromid that it might incriminate me.
Senator Mundt. Under what amendment to the Constitution do
you make that stand ?
Mr. PiNELLi. What was that ?
Senator Mundt. I didn't hear you.
Mr. PiNELLi. I dichi't hear you, sir.
Senator Mundt. Under which amendment to the Constitution do
you make this stand ?
Mr. Pinelli. I just respectfully decline to answer any questions.
Senator Mundt. On what basis ?
Mr. Pinelli. On the ground it might tend to incriminate me.
Senator Mundt. What makes you think that is a legitimate answer ?
Mr. Pinelli. I don't.
Senator Mundt. Mr. Chairman, I think this witness is clearly in
contempt of a committee of Congress on the basis of his behavior here
this afternoon.
The Chairman. That is why I admonished him that the order and
direction that the Chair gave would continue throughout the period
that he is here.
If you want to purge yourself of this contempt, be thinking about
it and get ready to answer questions, and state whether or not you
honestly believe truthful answers might tend to incriminate you.
If you want to state that under oath, then we will hear you. Other-
wise, I shall ask the staff to prepare the necessary documents for the
committee to act in reporting you to the U.S. Senate for contempt.
I didn't want you to have any misunderstanding about it.
I didn't want to take advantage of you, because you say you do not
have counsel and I can't be sure whether you want or don't want
counsel, except you make no manifestations that you do want counsel.
I have been trying to let you understand what the situation is so
you might be governed accordingly. You may do just exactly what
you are doing, if that is what you want to.
But there may be some consequences in your doing so.
Proceed.
Mr. Kennedy. I hadn't expected to call you gentlemen at this
moment
The Chairman. I did not mean to interrupt the procedure.
Mr. Kennedy. We can dispose of it right now.
The Chairman. All right. Proceed.
TESTIMONY OF FRANK UNETICH AND DONALD SMITH— Resumed
Mr. Kennedy. Mr. Smith, you joined the Gary Police Department
in April 1943 ; is that correct?
Mr. Smith. Yes, sir.
Mr. Kennedy. And you became a detective on the gambling and
vice detail somewhere in 1953, approximately 1953 ?
Mr. Smith. I believe so.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18709
Mr. Kennedy. And you still hold that position ?
Mr. Smith. Yes, sir.
Mr. Kennedy. Approximately 1953 ; is that correct ?
Mr. Smith. Yes, sir.
Mr. Kennedy. You have known Mr. Pinelli for a number of years ?
Mr. Smith. A number of years ; yes.
Mr. Kennedy. Excuse me ?
Mr. Smith. A number of years ; yes.
Mr. Kennedy. You knew him in Gary, Ind., when he first came
to Gary, Ind. ?
Mr. Smith. I don't know when he first come, but that is when I
first knew him from.
Mr. Kennedy. In 1956
Senator Mundt. In what capacity did you know him, Mr. Smith,
in Gary ?
Mr. Smith. As a restaurant owner.
Senator Mundt. In your responsibility as a police officer, did you
have any cause ever to investigate him or arrest him or suspect him,
or do you simply know him to be a restaurant owner, presumably a
respectable and responsible restaurant owner ?
j\Ir. Smith. I thought him to be a respected restaurant owner.
Mr. KJENNEDY. You weren't aware of the fact that he operated a
number of gambling joints in Gary, Ind., in Lake County ?
Mr. Smith. No, I wasn't.
Mr. Kennedy. You never were aware of that ?
Mr. Smith. I am aware of it from what I am hearing from the
committee and read in the papers ; yes, now.
Mr. Kjsnnedy. But up until the last 4 or 5 days you weren't aware
of it?
Mr. Smith. No. Before that I was aware of it.
Mr. Kennedy. When were you first aware of the fact that he was
operating gambling joints?
Mr. Smith. It was probably in the local paper a year or so ago.
I don't know. I just can't remember when it was.
Mr. Kennedy. But not until you read it in the local paper were
you aware that he was running a gambling joint ?
Mr. Smith. Not until I read it in the local paper or heard it on the
street or wherever I heard it.
Mr. Kennedy. And you were a detective in the vice and gambling
squad of the Gary Police Department?
Mr. Smith. That is right.
Mr. Kennedy. In 1956, according to the testimony before our
.committee, you made a trip to California. Is that correct ?
Mr. Smith. Yes, sir.
Mr. Kennedy. And you stayed at the motel owned by Mr. Pinelli ?
Mr. Smith. Yes, sir.
Mr. Kennedy. Would you relate to the committee the circumstances
under which you stayed at the motel of Mr. Pinelli ?
Mr. Smith. I went on a vacation with my family and we stopped at
that motel. I don't know what the name of it is.
Mr. Kennedy. How did you happen to stop at that motel ?
Mr. Smith. Well, we were going to visit my brother who lives in
California. He wasn't home at the time. My wife and children or
36751— 59— pt 53 19
18710 IMPROPER ACTIVITIES IN THE LABOR FIELD
between them picked out that motel because it was close to what the}
were going to do, some sightseeing in Hollywood,
Mr. Kennedy. It was just a coincidence that it happened to be a
motel owned by Mr. Pinelli ?
Mr. Smith. It was at that time ; yes.
Mr. Kennedy. There must be thousands and thousands of motels
in that area.
Mr. Smith. No, there isn't.
Mr. Kennedy. There are thousands and thousands of motels in Los
Angeles and the Los Angeles area. You just happened to pick out
the one that was owned by Anthony Pinelli ?
Mr. Smith. I didn't pick it out. My wife did or the children.
Mr. Kennedy. She just happened to pick out that one ?
Mr. Smith. From a motel book we take when we go traveling; that
is right.
Mr. Kennedy. As I understand the area, there are at least three or
four within that block or within a couple of blocks. Did you just
happen to go to that one ? Was it just a coincidence that it was owned
by Anthony Pinelli, of Gary, Ind. 't
Mr. Smith. If you want to call it coincidence, I guess that is what
it was, a coincidence.
Mr. Kennedy. I don't want to call it anything. I want you to
describe the circumstances. Did you lind out it was owned by Mr.
Pinelli ?
Mr. Smith. Yes, I did.
Mr. Kennedy. When did you find that out t
Mr. Smith. Well, to know for sure it was owned by Mr. Pinelli,
we got there early in the morning and some time that afternoon a
gentleman knocked on our room door, the door of the room, and I
opened it, I had been sleeping, and he identified himself as Mr. Pinelli,
son of Tony Pinelli, and seeing I was from Gary, he asked if I laiew
his dad, and I said I did, that he run a restaurant in Gary, and that I
knew him,
Mr. Kennedy, Did you have f ui'ther conversation with him ?
Mr, Smith. With who^
Mr. Kennedy. With the son.
Mr. Smith. Not that I can recall.
Mr. Kennedy. Did you ever meet Touy Pinelli while you were out
there 'I
Mr. Smith. Yes; I did.
Mr. Kennedy. Did he come to see you 'I
Mr. Smith, One of the days we were there we were having break-
fast across the street in a restaurant from this motel, in an outside
patio, and liis son brought him over and he had coffee with us,
Mr, Kennedy. Had you been quite friendly with Anthony Pinelli '\
Mr. Smith. Before that?
Mr. Kennedy. Yes.
Mr. Smith. Yes ; I had been friends with him.
Mr. Kennedy. Did you go visit him at his home then ?
Mr. Smith. No; I did not.
Mr. Kennedy, According to the Los Angeles Police Department,
your car was identified outside the home of Mr, Anthony Pinelli at
the same time you were staying at the motel.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18711
Do you have explanation for that ?
Mr. Smith. My wife's car, yon mean.
Mr. Kennedy. The car registered, in your wife's name.
Mr. Smith. Yes.
Mr. Kennedy. Did she go visiting then ?
Mr. Smith. She possibly could have.
Mr. Kennedy. Who paid your motel bill at the motel'!'
Mr. Smith. As I told you before, Avhen I talked to my wife, she
says she is almost positive or is positive, words whatever she used, that
slie paid that bill.
Mr. Kennedy. You didn't pay it yourself ?
Mr. Smith. No.
Mr. Kennedy. She pays the bills ?
Mr. Smith. When we are traveling, she carries the money ; that is
right.
Mr. Kennedy. It is her recollection that she paid the bill; is that
correct ?
Mr. Smith. It is her recollection.
Mr. Kennedy. We also had testimony in connection with a visit that
you made to Las Vegas.
Mr. Smith. That is right, sir.
Mr. Kennedy. With whom did you go to Las Vegas ?
Mr. Smith. A Mr. Kuslmer, of the Kool-Vent Awning in Gary,
and Mr. Morris, an attorney, and Mr. Jack Doyle.
Mr. Kennedy. How long had you known Mr. Jack Doyle?
Mr. Smith. I probably knew Jack Doyle 17 years, 16 years.
Mr. Kennedy. Who was he ?
Mr. Smith. A^Hio was Jack Doyle, did you say ?
Mr. Kennedy. Yes.
Mr. Smith. Well, Jack Doyle, as you say, was before the Kefauver
committee for running some gambling in Lake County. He was a
restaurant owner.
Mr. Kennedy. How did von happen to go to Las Vegas with Jack
Doyle?
Mr. Smith. A guest of Mr. Kushner.
Mr, Kennedy. Mr. Kushner of the Kool-Vent Co ?
Mr. Smith. That is right.
Mr. Kennedy. How did lie happen to invite you to go to Las
Vegas ?
Mr. Smith. If I remember correctly, he was going there on busi-
ness with his attorney, Mr. Morris, and his wife was going to attend,
and at the last minute his wife didii't go. I know the night before
we left, which was over the Fourth of July holidays, that he asked
me to go and I agreed to go with him.
Mr. Kennedy. Who paid for your trip ?
Mr. Smith. I am presuming that Mr. Kushner did.
Mr. Kennedy. You did not?
Mr. Smith. I did not ; no, sir.
Mr. Kennedy. Where did you stay in Las Vegas ?
Mr. Smith. Name the hotel. I can't think of it now.
Mr. Kennedy. The Colonial Inn?
Mr. Smith. No ; that is when I was with my family.
Mr. Kennedy. The Sands?
18712 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Smith. That is it, the Sands.
Mr. Kennedy. You, Mr. Doyle, Mr. Kushner, and Mr. Morris
stayed at the Sands ?
Mr. Smith. Yes, sir.
Mr. Kennedy. Who paid for your bill there ?
Mr, Smith. I didn't pay for it.
Mr. Kennedy. What about your trip back to Gary ?
Mr. Smith. I didn't pay for it.
Mr. Kennedy. Were you aware of the fact that Mr. Jack Doyle
had just been convicted of income tax evasion at that time ?
Mr. Smith. I know Mr. Doyle was convicted of income tax evasion,
but I don't know at that time whether I knew it or not. As soon as
he was convicted I knew it.
Mr. Kennedy. He had been convicted shortly prior to that time.
Actually, in 1954 he had been convicted of income tax evasion. He
appeared before the Kefauver committee and had been identified as
the operator of gambling in the Gary area.
Mr. Smith. If he was convicted in 1954, then, I knew it. But I
don't think he was convicted in 1954.
Mr. Kennedy. He was convicted in August of 1954.
Mr. Smith. He was ? Then I knew it.
Mr. Kennedy. You went to Las Vegas with him in July 1955.
Senator Mundt. At the time you went to Las Vegas with Mr.
Doyle, did you know he was running gambling operations in Gary ?
Mr. Smith. He was running a restaurant at that time.
Senator Mundt. I know that. Did you know that he was also run-
ning gambling institutions in Gary ?
Mr. Smith. I don't think he was running gambling institutions in
Gary at that time.
Senator Mundt. You didn't know that he was a gambler at that
time ?
Mr. Smith. I knew he had a past record as a gambler; yes, sir.
Senator Mundt. Just on the face of it, it sounds kind of curious
why you would be the guest of a notorious gambler to Las Vegas or
anywhere else. But why, as a police officer in charge of gambling
investigations, would you accept an oft'er to go anywhere with a
gambler ?
That seems rather strange. If you have an explanation, I think
you should be entitled to make it.
Mr. Smith. Senator, I don't believe I can make any explanation
on that. It was bad judgment, but I did it and I have to admit it.
Senator Mundt. Do 3^011 think it was kind of bad company that you
got yourself in?
Mr. Smith. It sure was. I wouldn't be here if I didn't do it.
Senator Mundt. You can see with just a cold look at it from the
outside, it doesn't look like the right kind of camaraderie to have,
when a police officer in charge of cleaning up the town of gam-
bling
Mr. Smith. I am not in charge of vice. I am a member of it.
Senator Mundt. A member. All right. Well, a police officer en-
gaged in investigating gambling and a fellow who is engaged in
gambling going off together, somebody reading that would think that
was a kind of strange companionship; would they not?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18713
Mr. Smith. They sure are.
Senator Mundt. Did you have a little squeamish thought before
you went, or did you hastily make up your mind not to start regret-
ting it until later ?
Mr. Smith. My squeamish thoughts were when I was called before
this conmiittee.
Senator Mundt. You never thought about it from that time until
now?
Mr. Smith. Yes. I was admonished by our mayor for it, Senator,
when he learned about it.
Senator Mundt. That was after you returned ?
Mr. Smith. After I returned, yes, sir; and also by the chief of
police I was admonished.
Senator Mundt. All right.
Mr. Kennedy. Do you know why Anthony Pinelli would be calling
you in Las Vegas ?
Mr. Smith. Tliat is the first I knew about it when I heard it in the
testimony today. I don't talk to him on the phone. I don't ever
remember talking to him on the phone.
jNIr. Kennedy. I don't think the testimony was that you did talk
to him. All of the records we have are that Anthony Pinelli placed
a call either to you or to Mr. Kuslmer at Las Vegas.
I thiiik the records show that the call was incomplete.
Do you have any idea as to wh}^ he would be calling you out there,
trying to get in touch with you ?
Mr. Smith. I have no idea, sir.
Mr. Kennedy. You have been quite friendly with Mr. Doyle for a
period of time ; is that right ?
Mr. Smith. Mr. and Mrs. Doyle, both. My wife and I are friends
of theirs, that is right.
Mr. Kennedy. Mr. Unetich, you are a
Senator Mundt. Before you leave Mr. Smith, I would like to ask
one other question.
Can you think of any reason why Mr. Pinelli might feel that to
recognize that he knows you would tend to incriminate him ?
Mr. Smith. I didn't quite get the question.
Senator Mundt. Can you think of any reason why Mr. Pinelli
should tell tliis committee that if he were to recognize the fact that he
knows you, it might tend to incriminate him ?
Mr. Smith. I know of no reason. Senator.
Senator Mundt. Is tliere anything you can think about in your
past comiections, operations, associations or dealings which would
give him a legitimate reason to say, "If I told this committee I know
that man, I am in trouble. I am incriminating myself. So I got to
say I am taking recourse in the fifth amendment" ?
Can you think of any reason that would be legitimate as to why
he should have such a justifiable concern ?
Mr. Smith. I know of no reason.
Senator Mundt. You know of none?
Mr. Smith. No reason.
Mr. Kennedy. Mr. Unetich, you joined the Gary Police Depart-
ment in April of 1956 ; is that right ?
Mr. Unetich. That is right.
18714 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. And you became a detective sometime in 1955; is
that right ? Around there ?
Mr. Unetich. Around there ; yes.
Mr. Kennedy. And you have been a member of the gambling and
vice squad since that time ?
Mr. Unetich. That is right.
Mr. Kennedy. We have had the testimony in connection v^ith a
trip around Christmas of 1955, where you stayed at the motel of
Mr. Pinelli. Would you explain that to the committee ?
Mr. Unetich. Yes, sir. A year prior to this, on New Year's Day,
I was watching TV, watching the Rose Bowl game with a friend
of mine who is a painting contractor.
Mr. Kennedy. What is his name ?
Mr. Unetich. George Stevens. We were watching the Parade of
Roses and the Rose Bowl game. We decided we would take a vaca-
tion the following year and see the game. I explained to him that if
I could go, I would have to get permission from my superiors to take
a week of my vacation in the following year, because it is against the
rules of the department, that you have to take it all in 1 year.
I said if we want to go, I have to make sure that I don't have to
take my vacation during that time of the year. During the year we
discussed it and finally, around October, I went to my sergeant and
told him about the trip and he got permission for me to take my
vacation at that time.
So we started out and drove. My partner had a motel address.
Mr. Kennedy. Who had obtained the tickets for you ?
Mr. Unetich. My partner got them from an attorney named Rob-
ert Lucas.
Mr. Kennedy. ^Vlio is Mr. Lucas ?
Mr. Unetich. Lie is an attorney.
Mr. Kennedy. And he represents both Anthony Pinelli and John
Formusa ; does he not ?
Mr. Unetich. I don't know that.
Mr. Kennedy. You do not know that ?
Mr. Unetich. No, sir.
Mr. Kennedy. Well, the record shows that he represents both Mr.
Formusa and Mr. Pinelli. The tickets were obtained from him or
through him ?
Mr. Unetich. Yes, sir.
Mr. Kennedy. Go ahead.
Mr. Unetich. On the way out on the trip we discussed about stay-
ing, where we were going to stay, and he showed me the address that
he had. "Wlien we got to Los Angeles, we went to this motel. We
went in to register. There was a boy there that said that he had a
room for us. We went to the room and the next morning we come in
from breakfast and Mr. Pinelli was there talking to his boy.
He come over to our room and discussed about how we liked Cali-
fornia, one thing and another. I asked him if there was any place
we could go watch the TV game to see the world championship pro-
fessional football playoff, and through that he invited us to his home
to watch it.
So we went to his home and watched the game. I met his wife, his
mother, and some other relatives of his. He showed us a couple of
IJMPROPER ACTIVITIES IN THE LABOR FIELD 18715
homes next door that he was building, drove us around the town,
showing this friend of mine how construction out in California dif-
fers from back in Indiana. When we got back from the trip, the
chief called me in.
Mr. Kennedy. Who paid for your motel room out there ?
Mr. ITneticii. The morning we left, as I recall it, I got the car
and put the bags in, and my friend came from the office. As we drove
out, he told me that the boy told him that the motel bill was on his
dad.
Mr, Kennedy. Did you know about Anthony Pinelli at that time ?
Senator Mundt. Lei me ask one thing.
You said the chief called you. What do you mean ? Wliich chief ?
Mr. Unetich. ^^Hien I got back to work, one day the chief called
me into the office
Senator Mundt. I thought you meant he called you while you were
out there.
Mr. Unetich. No.
Senator Mundt. I thought you said the chief called you out there.
Mr. Unetich. No.
Senator Mundt. All right.
Mr. Kennedy. Did you know that Mr. Pinelli was active in gam-
bling and other operations, and a notorious figure throughout the
country, at that time ?
Mr. Unetich. Not until after that trip.
Mr. Kennedy. When did you learn it ?
Mr. Unetich. I got called in to the office and the chief asked me,
he said, "During the trip, did you get involved in an auto accident or
get arrested for speeding?" I said, "No." And he said that he just
got a call from the license bureau of Indiana that the Los Angeles
authorities were checking my car out.
A day or so later he called me back in and he said, "Wlien you was
out in California, did you see this guy Pinelli?" I said, "Yes." He
said, "That is the reason they checked your car. They seen your car
parked by his house or somewhere."
Mr. Kennedy. Did you know Mr. Pinelli before you went out
there?
Mr. Unetich. Yes, sir.
Mr. Kennedy. As what, socially or otherwise ?
Mr. Unetich. He owned a restaurant.
Mr. Kennedy. You didn't know anything about his gambling activi-
ties?
Mr. Unetich. No, sir.
Mr. Kennedy. Could you tell the coinmittee how it would be possible
for him to be active in gambling and these kind of operations in Gary
for a number of years, and two members of the vice squad and gam-
bling squad not know about it ?
Mr. Unetich. Who is active in gambling ?
Mr. Kennedy. Mr. Anthony Pinelli.
Mr. Unetich. I never knew that.
Mr. Kennedy. You never knew it ?
Mr. Unetich. No, sir.
Mr. Kennedy. When did you find out he was active there ?
Mr.UNiTicH. In gambling?
18716 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Yes.
Mr. Unetich. AVhen I read about it in the papers.
Mr. Kennedy. Is that the only way members of the gambling and
vice squad found out what was going on in Gary — to read about it in
the papers ?
Mr. Unetich. No, sir.
Mr. Kennedy. Do you know John Formusa ?
Mr. Unetich. Yes, sir.
Mr. Kennedy. Do you Imow he ran a house of prostitution ?
Mr. Unetich. Wliere?
Mr. Kennedy. In Lake County ?
Mr. Unetich. I read that in the paper.
Mr. Kennedy. That is outside Gary ?
Mr. Unetich. Of my own loiowledge, I wouldn't know.
Mr. Kennedy. But you wouldn't have jurisdiction over that; is
that correct ?
Mr. Unetich. No, sir.
Mr. Kennedy. But you understood that he ran a house of prosti-
tution ?
Mr. Unetich. I understood that ; yes, sir.
Mr. Kennedy. Did you ever visit with him ?
Mr. Unetich. Yes, sir.
Mr. Kennedy. Would you relate that to the committee ?
Mr. Unetich. I think the first time I was there I heard about the
home
The Chairman. Heard about the home ?
Mr. Unetich. About the home of his.
Mr. Kennedy, He had a big house ?
Mr. Unetich. He sure has.
Mr. Kennedy. Well, I mean he had two kinds of houses. He had
one he lived in and then he had the one with the girls.
Mr. Unteich. I didn't visit the one you are referring to.
Mr. Kennedy. I am just asking whether you visited where he lived.
Mr. Unetich. Just the place where he lived.
Mr. IvENNEDY, That was a major establishment itself, was it not?
Mr. Unetich. It is a big place ; it sure is.
Mr. Kennedy. I think we have hacl it identified as around a $90,000
or $100,000 house. You visitedi with him there, did you ?
Mr. Unetich. I didn't visit with him there.
Mr. Kennedy. Did you go there ?
Mr. Unetich. I went there ; yes.
Mr. Kennedy. How did you happen to go there ?
Mr. Unetich. This same friend, who always seems to get me in
trouble, we were out one night for a ride, we were going somewhere,
and we happened to be out going by this part of Gary. He said,
"Let's stop out there. He has been calling me for a week and wants
me to do some work for him."
I said, "You know, you are going to get me fired yet." He said,
"Come on." And I said, "Drop me off. I don't have time to go by
there." So we went over there, and I am curious, too. I wanted to
see that house. And possibly a month ago
Mr. Kennedy. So you visited there. What did you do there ? Did
you sit around and have a drink, or what ?
IMPROPER ACTIVITIJlS 1-N TMUl iuAiUJH l^lii^LiU 15/1/
Mr. Unetich. No ; I went all through it, all through the house.
Mr. ICennedy. Who wore you with at that time ?
Mr. Unetich. George Stevens.
Mr. Kennedy. The same contractor?
Mr.XTNETiCH. The same contractor.
Mr. Kennedy. How long were you there at that time?
Mr. Unetich. I don't recall how long I was there.
Mr. Kennedy. Approximately.
Mr. Unetich. I don't remember.
Mr. Kennedy. When was that ?
Mr. Unetich. I don't remember exactly when it was.
Mr. Kennedy. Last year, was it ?
Mr. Unetich. It could have been,
Mr. Kennedy. Were you there for 5 minutes, or were you there
for 3 hours, 4 hours, or what ?
Mr. Unetich. I don't remember.
Senator Mundt. Well, did you stay all night?
Mr. Unetich. No ; I didn't.
Senator Mundt. You are sure of that ?
Mr. Unetich. I am sure of that.
Senator Mundt. Between 5 minutes and all night can you make a
reasonable guess as to how long you were there ? Eight hours ?
Mr. Unetich. Maybe an hour. I don't know.
Senator Mundt. Roughly aai hour, you think ?
Mr. Unetich. I could have been ; yes.
Mr. Kennedy. Was that in the evening ?
Mr. Unetich. Yes ; that was in the evening.
Mr. Kennedy. After dinner ?
Mr. Unetich. Yes.
Mr. Kennedy. About what time ?
Mr. Unetich. It was in the evening around 7 or 8 o'clock, I guess.
Mr. Kennedy. When was the last time you were there ?
Mr. Unetich. About a month ago I was there.
Mr. Ivennedy. Under what circumstances did you visit Formusa
a month ago ?
Mr. Unetich. There was some oriental officers come through Gary
from Korea, Thailand, Siam, and this particular afternoon the train-
ing officer told me to take the two out and show them — they were
interested in seeing what Gary looked like.
So I took them around Miller, drove them around the lake, and my
partner was off that day. He lives out there. I took them over to
his house where his wife fixed coffee and sandwiches. My partner
was getting ready to go out with his boat, and he wanted to know if
they wanted to go along and they were all entliused, they wanted to
go.
So we went for a boat ride. We went round the steel mills, showed
them everything. On our way back, we come by this house of
Formusa, where he lives, on the lakefront, and looking out there we
could see him in the yard. He had a shotgun in his hand. So my
partner pulls in and we go over there, and he is all excited about a
neighbor's cat that killed a bird.
Mr. Ivennedy. This is John Formusa ?
Mr. Unetich. That is John Formusa.
18718 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. He is out in the backyard with a shotgun excited
because a neighborhood cat had killed a bird, and you are on a tour
of Gary taking some Siamese police officers; is that right?
Mr. Unetich. Yes, sir.
Mr. Kennedy. So you all stop in. Would you relate what hap-
pened ?
Mr. Unetich. Well, he showed us the nest in the evergreen tree,
with two little birds in it, and he was all mad, and was going to kill
this cat. We wind up when he invites us in the house, and these two
officers wanted to go in, so we went in.
He showed them all around. I guess they had a beer. When we
come out, the officers asked me, "Who is this man? What does he
do?" I don't know; they misunderstood me, but they thought I said
doctor.
The Chairman. They thought you said what ?
Mr. Unetich. They thought he was a doctor.
The Chairman. Did you so advise them ?
Mr. Unetich. No, sir.
The Chairman. What did you tell them he was ?
Mr. Unetich. I started to tell them that his brother was a doctor
and when they thought I said he was a doctor, I just let it go at that.
I didn't want to tell them who he was.
The Chairman. Why?
Mr. Unetich. They were on a goodwill trip. ^YhJ should I tell
them what was bad in this country to take it back with them ?
The Chairman. You mean there was something bad about it?
Mr. Unetich. About him, sure. The following day the chief called
me in the office again, and asked me if I was at that residence, and
I said "Yes," and he give me a bawling out.
Senator Mundt. Let's go back to the first time the chief called yoil
in, after your trip to California. You said that he inquired the first
day whether you had engaged in speeding or had had a car wreck, and
you said "No." Then he called you back in the next day.
Mr. Unetich. It could have been the next day. I am not sure.
Senator Mundt. Well, soon after that, a second time. And he said,
"Now, I have found out why they are checking on your car. It has
been out in the front yard or in the street before the house of Mr*
Pinelli." Is that what he said ?
Mr. Unetich. He said that somebody from the Los Angeles Sheriff's
Department called and said they saw me with him or at his house, I
don't recall now, and said they had been investigating him for over
10 years.
Senator Mundt. The Los Angeles Police ?
Mr. Unetich. Yes, sir.
Senator Mundt. Was the chief surprised to find that Mr. Pinelli was
in trouble with the law out there ?
Mr. Unetich. He asked me if I knew that, and I said "No." He said,
"Well, I didn't know that either." He said, "Forget about it."
Senator Mundt. The chief didn't know that Mr. Pinelli was a big^
time gambler in Gary, then, either ?
Mr. Unetich. Evidently ; that is what he told me.
Senator Mundt. He hadn't read the papers yet ?
Mr. Unetigk. Sir?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18719
Senator Mundt. He hadn't read the papers? You said it was in
the papers.
Mr. Unetich. Much later.
Mr. Kennedy. Did you ever pick up any of the pinball machines,
make any raids ?
Mr. Unetich. Yes, sir.
Mr. Kennedy. On how many occasions did you do that ?
Mr. Unetich. Well, just lately I picked one up, 3 or 4 weeks ago.
Mr. Kennedy. Four weeks ago ?
Mr. Unetich. It could have been.
Mr. Kennedy. Prior to that time had you done it ?
Mr. Unetich. I could have ; yes.
Mr. Kennedy. Did you ?
Mr. Unetich. I think I have been sent out to pick up a few.
Mr. Kennedy. Well, did you ? Do you know of any time you ever
did?
Mr. Unetich. At any particular spot, do you mean ?
Mr. Kennedy. Yes.
Mr. Unetich. No, sir ; I don't remember.
Mr. Kennedy. Have you ever, Mr. Smith ?
Mr. Smith. What is the question, Mr. Kennedy ?
Mr. Kennedy. Did you ever go out and pick up any pinball ma-
chines ?
Mr. Smith. I did.
Mr. Kennedy. "Wlien was that?
Mr. Smith. Approximately 1953.
Mr. Kennedy. 1953 ?
Mr. Smith. I would guess.
Mr. Kennedy. Have you done it since 1953 ?
Mr. Smith. No, sir.
Mr. Kennedy. Why has that been ? Why haven't you ?
Mr. Smith. When these court orders come out, the same as our
top law enforcing officials in the county, thought they were legal,
with court orders restraining them in other counties, so I suppose that
is why we were not ordered to pick them up.
Mr. Kennedy. Gambling is illegal, is it not ?
Mr. Smith. Yes, it is, if you catch them paying off.
Mr. Kennedy. These were payoff machines. These machines were
paying off.
Mr. Smith. That is what I understand from the testimony.
Mr. Kennedy. You knew that before you heard it in this testimony.
Mr. Smith. Yes.
Mr. Kennedy. Why didn't you go out and pick up any of these
machines?
Mr. Smith. "Wliy I didn't go out and pick up any of these machines ?
Mr. Kennedy. Yes.
Mr. Smith. I did go out and pick some of them up.
Mr. Kennedy. Since 1953 why haven't you picked up the gambling
machines?
Mr. Smith. Because, as I stated before, there was court orders
around Indiana restraining police officers from picking them up, and
in our county they were not picking up the machines at that time.
18720 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. You might not have been picking them up. There
was one case in another county. But I will restrict it particularly
to gambling. Gambling was illegal. These machines were paying
off. Wliy didn't you go in and make some arrests ? If there is some
explanation, give it.
Mr. Smith. If I had caught a bartender or any other person paying
somebody off, I would have made the arrest.
Mr. Kennedy. Did you ever try to find out or did your squad ever
try to find out whether these machines were paying off since 1953 ?
Mr. Smith. Mr. Kennedy, I knew — it was my opinion they were
paying off.
Mr. Kennedy. Why weren't any arrests made ?
Mr. Smith. Because I never caught them paying off.
Mr. Kennedy. Did you ever try to ?
Mr. Smith. Yes, I did.
Mr. Kennedy. You tried to, but never could catch anyone ?
Mr. Smith. No, I never caught them.
Mr. Kennedy. Were you instructed by your superiors to try to ?
Mr. Smith. Yes, when complaints come in on certain places
Mr. Kennedy. You knew this was generally going on. Did you
try to stop it, try to take some steps to deal with it ?
Mr. Smith. Do you mean to make arrests ?
Mr. Kennedy. Yes.
Mr. Smith. There was times I tried to make arrests ; yes.
Mr. Kennedy. But you never did? You have tried to make an
arrest and you haven't been able to in 6 years ?
Mr. Smith. On a pinball payoff; no.
Mr. Kennedy. What about you, Mr. Unetich? Did you try to
make arrests in connection with these machines?
Mr. Unetich. No, sir.
Mr. Kennedy. Wliy?
Mr. Unetich. I was never instructed to since 1953. I am no lawyer.
I don't know whether these machines are legal. I don't even know
now if they are legal or illegal.
Mr. Kennedy. You were never instructed by your superiors to make
any arrests in this comiection or pick up any of these machines; is
that correct?
Mr. Unetich. No, sir.
The Chairman. Let me ask you gentlemen : Are you members of the
police force? Did you sa}^ you were a member of a vice squad or a
gambling squad ?
Mr. Unetich. That is what they call the detail.
The Chairman. You are members of the same squad now ? ^"Vliat
is yours?
Mr. Smith. Senator, there are two squads in Gary. One works days
and one works nights. We change about every month. There is
three men on each squad. He works a different shift than I do ; the
opposite shift.
The Chairman. Do you have a vice squad out there of policemen,
what you call a vice squad ? I thought we heard some testimony on
that.
Mr. Kjennedy. Gambling and vice.
Mr. Smith. That is our assicrnment.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18721
The Chairman. Well, you know, you have different policemen as-
signed to different characters of duties ; is that correct ?
Mr. Smith. My assignment is gambling and vice.
The Chairman. What was your assignments
Mr. Uneticii. The same thing.
The Chairman. What do they hire you for ? You don't arrest any-
body. You don't pick up the gambling machines. You don't stop
garnbling. What are they paying you for ? What are your duties ?
Mr. Smith. I have made a lot of arrests, Senator. There is the
record.
The Chairman. For what? Gambling?
Mr. Smith. Gambling and prostitution.
The Chairman. Are just some favored few permitted to run?
Is that it?
Mr. Smith. On the pinball machines ?
The Chairman. Yes.
Mr. Smith. I didn't pick them up because I didn't think I was
supposed to.
The Chairman. I just don't understand what you need a vice squad
for and a gambling squad for if they are not to go out and pick up
the gamblers and the vice operators.
Mr. Smtph. We also do other work. Last year there was 25 murders
in Gary. My partner and I were assigned to 11 of them, and we solved
all 11 murders.
The Chairman. That could be true. I am not questioning that. But
I thought from the information that you were assigned exclusively
to vice.
Mr. Smith. Not exclusively. We work robberies, murders, larceny.
The Chairman. In other words, you do all of it ?
Mr. Smith. All of it. It is a small department. Senator.
The Chairman. I just wondered what they needed with a vice squad
and a gambling squad, as such, with this thing going on out there ap-
parently publicly. Everybody knows about it but there is nothing-
being done about it. I wondered if you were assigned exclusively to
that, and then I wondered what you were being, paid for.
Mr. Smith. Not exclusively ; no, sir.
Mr. Kennedy. But that is one of your responsibilities ?
Mr. Smith. Yes, sir ; it is.
Mr. Kennedy. Is gambling and bookmaking going on at the present
time that you know of ?
Mr. Smith. There possibly could be. There is always some kind of
gambling and bookmaking going on in Gary.
Mr. Kennedy. Are there any places that are operating that you
know of at the present time ?
Mr. Smith. I am pretty sure there are places operating.
Mr. Kennedy. Do you know specific places that are operating at
the present time ?
Mr. Smith. They have the reputation. I believe they are in there
trying to operate and probably operating.
Mr. Kennedy. Is anything being done to shut them down ?
Mr. Smith. Arrests are being made.
Mr, Kennedy. In the course of our investigation over the period
of the last few weeks, we have the names of some 21 places that we
18722 EMPROPER ACTIVITIES IN THE LABOR FIELD
found beyond the pinball operation wliich we would be glad to furnish
the authorities there if you would like to have it.
Mr. Smith. I probably know them all. I have probably been in
there and tried to catch them.
Mr. Kennedy. Why haven't arrests been made, to close them
down?
Mr. Smith. You can't just close a place down.
Mr. Kennedy. Why haven't arrests been made ?
Mr. Smith. Arrests have been made. I may have made numerous
gambling arrests for pool selling — I have made numerous arrests.
Mr. Kennedy. That is all, Mr. Chairman.
The Chairman. Is there anything further ?
Senator ]\Iundt. Who is it who tells you in Gary to go out and pick
up a pinball machine? You said 6 years ago somebody asked you to
pick up a pinball machine and you picked it up, but nobody has told
you to pick one up since. Who is it that tells you ?
Mr. Smith. Sir, it could be the chief, any of five captains, or our
sergeants could give us orders to go out. We are just detectives.
There is a lot of brass up above us.
Senator Mundt. Is the way it works that a detective has no right
to make an arrest ?
Mr. Smith. Yes, he does.
Senator Mundt. Unless he is told by his superior ?
Mr. Smith. No. I can make an arrest at any time.
Senator Mundt. But for you to make an arrest, you have to actually
see the crime being conunitted ?
Mr. Smith. That is right. It is a misdemeanor. I am not a lawyer.
I understand I have to see the crime being committed on a misde-
meanor.
Senator Mundt. Do you have some kind of coordinated activity
with the sheriff's office and the county prosecutor's office, or are you
a separate agency operating on you own ?
Mr. Smith. Separate agency from them two. Them are separate
departments.
Senator Mundt. You get no orders from the county prosecutor ?
Mr. Smith. Never as long as I have been a policeman have I got an
order from a prosecutor in regards to any vice or gambling. I have
got orders to appear as witnesses from them to appear in court, or
to pick up witnesses and stuff like that.
Senator Mundt. You are a couple of old pros at this business.
You know^ and we know, and everybody in the country now knows,
that there seems to be an awful lot of pinball — illegal gambling —
going on pretty publicly in Gary.
Can you give any recommendations as to how you think it could
be curtailed or stopped ?
Mr. IJnetich. Yes. More men.
Senator Mundt. It wouldn't make any difference how many men
you have if you don't make any arrests. You have to have some
arrests, don't you ?
Mr. Unetich. Sir ?
Senator Mundt. You have to have some arrests. "What would the
men do ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18723
Mr. Unetich. We come to work and we are assigned cases, and they
say those cases are more important than a little gambling pinch. A
felony is more important than a misdemeanor, and will serve the
public.
Senator IVIundt. Do you fellows ever go out as plainclothes details
and stand around and try to catch them, or do you come in with a
nice shiny badge on so that they see you and suspend operation until
you leave ?
IMr. Smith. Senator, I have been a policeman for 17 years. In our
town, everybody connected with that business knows me. I can put
on old clothes. I can't sneak in the places. There are a lot of prosti-
tutes that, as soon as I turn the corner, they know "That is Smith
right now."
Senator Mundt. I appreciate that. I appreciate you are acquainted
with the people in Gary and you don't have to have a uniform on to
scare them away, maybe.
Mr. Smith. And a lot of these so-called book joints, which are book
joints, there is a doorman on there and he knows me just as well as
anybody else.
Senator JSIundt. Do they ever employ any temporary people as
plainclothesmen, who they might not know, who can get in and clean
the place up ?
Mr. Smith. Senator, as rookies come on, after they get through
with rookie school, we doll them up in work clothes, like a millworker,
and send them out to try to get in places, make bets for us, which
sometimes they do, or get into a house that we have a suspicion on
that there is some prostitution going on, and we have made arrests
that way.
In fact, that is about the only way that we can make prostitution
arrests, to catch a rookie that nobody knows is a policeman.
Senator Mundt. The same thing would be true of gambling, to
put a rookie in a joint ?
Mr. Smith. And have him attempt to make a bet. That is right.
Senator Mundt. When you catch them, what luck do you have get-
ting them convicted ? Is it just a lot of effort and when you get them
into court they slap them on their wrists and let them go ?
Mr. Smith. We lose a lot of cases on a technical point of illegal
search and seizure because we have not obtained a search waiTant
to get in there. When we see a violation, we don't have time to run
and get a search warrant. We make the pinch and try to do the best
we can.
There are some cases that are found not — well, not guilty, but
never brought to trial because they argue search and seizure. On
prostitution cases and other ones, we have been veiy fortunate. We
nave a very good judge who cooperates 1,000 percent with us.
Senator Mundt. You haven't had much luck with the judges on the
gambling cases?
Mr. Smith. We have quite a few gambling convictions, but there
is a lot of them we lose in court.
Senator Mundt. You can't blame the policemen for that. I am
just trying to find out what happens. What we are trying to do is do
what we can to help keep crime from moving into political life, into
unions, into society.
18724 IMPROPER ACTIVITIES IN THE LABOR FIELD
Evidently this goes clear out to California. It is not a very pretty
picture. We want to help get it straightened out.
Mr. Smith. I appreciate that, Senator.
Mr. I^NNEDY. I might point out that it might have been the fault
of your superiors, but it was certainly the fault of someone that these
machines were clearly illegal from 1953 to 1955. Between the two of
you, you picked up, in 1953, three machines. They were illegal
through 1955. Gambling was illegal from 1953 to the present time.
These machines were illegal again from 1957 on. Yet none of
these machines were picked up. Possibly it is because of your super-
iors never giving you instructions to pick them up, but certainly
that is the record.
Mr. Smith. Mr. Kennedy, I heard Mr. Holovachka testify here
yesterday and he didn't know whether they were legal or not, and we
take orders from other people. There has been some doubt.
Mr. Kennedy. No ; there isn't any doubt.
Mr. Smith. No; I know there isn't any doubt now, after hearing-
this at this hearing.
Mr. Kennedy. The statute is there. These machines are, per se,
illegal. They were illegal from 1957 on. Your other assistants to
the prosecutor didn't know anything about the law, hadn't read the
law. But these machines were illegal.
Mr. Smith. I didn't read the lawbook either. I heard it quoted
here. That is the first I heard it quoted.
Mr. Kennedy. They were illegal in 1953 and illegal 1953 to 1955,
and all this time from 1953 to 1959, gambling was illegal. Yet you
haven't picked up any machines in connection with gambling.
Mr. Smith. I testified that I haven't sine© 1953, 1 believe it is, that
is right ; and I picked up more than three.
Mr. Kennedy. Excuse me.
Mr. Smith. I believe I picked up more than three at that time.
Mr. Kennedy. The list shows that at Al's Tavern, Beat-21 Tavern,
and Trippe's Tavern, three taverns.
Mr. Smith. I know we picked one up at Blackhawk Tavern on
Broadway. That is one I can remember.
Mr. Kennedy. Well, a number of machines. That was 6 years ago.
Mr. Smith. Yes ; about that long.
The Chairman. All right; thank you, gentlemen. You two may
stand aside.
Are there further questions of the witness Pinelli ?
Mr. Smith. Are we excused ?
The Chairman. Thank you very much, gentlemen ; you are excused.
TESTIMONY OF ANTHONY PINELLI— Resumed
Mr. Kennedy. Mr. Pinelli, did you go under the name of Tony
Melton as has been testified here ?
Mr. Pinelli. I respectfully decline to answer on the ground
previously stated. I decline to answer the previous question.
The Chairman. Do you honestly believe that if you gave a truthful
answer to that question, a truthful answer might tend to incriminate
you?
Mr. Pinelli. I respectfully decline to answer on the ground
previously stated as I declined to answer the previous question.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18725
The Chairman, Yon are ordered and directed to answer the ques-
tion, with the approval of the committee, and that order will extend
throughout your presence as a witness.
Mr. PiNELLi. I decline to answer on the same ground. It might
tend to incriminate me.
The Chairman. I didn't ask a question.
Mr. Kennedy. Did you have the financial interest in the Sierra
Madre and in the Los Angeles area which has been enumerated here
by Mr. Salinger?
Mr. PiNELLi, I didn't hear you.
Mr. Kennedy. Did you have the financial interest, the real estate
interest, around Los Angeles and Sierra Madre that were enumerated
here by Mr. Salinger? Do you have those financial interests?
Mr. PiNELLi, I respectfully decline to answer on the gi'omid previ-
ously stated when I declined to answer previous questions.
The Chairman. Do you honestly believe that if you answered the
question truthfully under oath, a truthful answer might tend to
incriminate you ?
i\Ir. PiNELLi. I respectfully decline to answer on the same ground,
that it might tend to incriminate me.
The Chairman. The Chair, with the approval of the committee,,
orders and directs you to answer the question, and those orders and
directions will continue throughout your testimony.
Mr. Kennedy. Were they purchased with the money that you made
from these illegal enterprises, Mr. Pinelli ?
Mr. PiNELLi. I respectfully decline to answer on the ground previ-
ously stated, that it might tend to incriminate me.
Mr. Kennedy. We have identified you with Mr. Frank DeSimone,^
who attended the meeting in Apalachin. Do you know^ Mr.
DeSimone ?
Mr. PiNELLi. I respectfully decline to answer on the gromid it might
tend to incriminate me.
Mr. Kennedy. Do you know John LaRocca, of Pittsburgh, Pa. ?
Mr. PiNELLi. I decline to answer
Mr. Kennedy. Do you know Gabriel Mannarino, of Pittsburgh,
Pa.?
Mr. PiNELLi. I respectfully decline to answer on the same grounds.
Mr. Kennedy. Do you know Max Berman ?
Mr. PiNELLi. I respectfidly decline to answer on the same ground.
Mr. Kennedy. Do you know John Formusa ?
Mr. PiNELLi. I respectfully decline to answer on the same grounds.
Mr. Kennedy. Do you know Tom Morgano ?
Mr. Pinelli. I respectfully decline to answer on the same gi-ound.
Mr. Kennedy. Did you take the cash that you made in your illegal
enterprises out to Las Vegas and exchange it for checks out there?
Mr. Pinelli. I didn't quite get that.
Mr. Kennfjdy. Did you take the cash that you made from your
illegal enterprises and transfer it into checks in Las Vegas, Nev. ?
Mr. Pinelli. I respectfully decline to answer on the grounds previ-
ously stated when I declined to answer the previous questions.
Mr. Kennedy. Could you tell us what services Tony Gruttadauro,
your nephew, was performing for you in Gary ?
36751— 59— pt. 53 20
18726 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. PiNELLi. I respectfully decline to answer on the ground previ-
ously stated when I declined to answer previous questions.
Mr. Kennedy. Did he run for you the gambling establishment
called the Uptown Lunch Club in Whiting, Ind. ?
Mr. PiNELLi. I respectfully decline to answer on the ground previ-
ously stated in declining to answer previous questions.
Mr. Kennedy. Could you tell us what you had to do with the
Barbers Association in Chicago, 111. ?
Mr. Pinelli. I decline to answer — I respectfully decline to answer
on the ground previously stated in declining to answer previous ques-
tions.
The Chairman. What are you — just a cheap hood ?
Mr. Pinelli. Sir ?
The Chairman. I say are you just a cheap hood? Is that all you
are, just one of these gambling operators running around? Do you
want to take the fifth on that ?
Mr. Pinelli. What is that, sir ? I didn't hear.
The Chairman. Do you want to take the fifth amendment on
that?
Mr. Pinelli. What was that ? I don't Imow.
The Chairman. Read the question.
(The question was read by the reporter.)
Mr. Pinelli. I respectfully decline to answer on the grounds previ-
ously stated in declining to answer previous questions.
TESTIMONY OF PIERRE E. G. SALINGER— Resumed
Mr. Kennedy. What is the cash situation as far as the witness is
concerned ?
Mr. Salinger. 1948 through 1957, he reported a total of $22,745 and
odd cents on his income tax returns, and in the same period more than
$570,000 went through his bank account, of which some $200,000 was
in cash.
Mr. Pinelli is always in possession of considerable amounts of cash.
As late as May 20, 1958, he purchased $25,000 worth of U.S. bonds
and paid for them in cash at the First Western Bank & Trust Co. in
Sierra Madre, Calif.
Mr. Kennedy. Would you tell us where you get the cash from ?
Mr. Pinelli. I respectfully decline to answer on the grounds previ-
ously stated in declining to answer previous questions.
The Chairman. Is there anything further ?
Mr. Kennedy. That is all.
The Chairman. The committee will stand in recess until 10:30
tomorrow.
(Members of the select committee present at time of recess: Sen-
ators McClellan and Mundt.)
(Whereupon, at 4 p.m. the select committee recessed, to reconvene
at 10 :30 a.m., Thursday, June 11, 1959.)
INVESTIGATION OF IMPROPER ACTIVITIES IN THE
LABOR OR MANAGEMENT FIELD
THURSDAY, JUNE 11, 1959
U.S. Senate,
Select Committee on Improper Activities in the
Labor or Management Field,
Washington, D.O.
The select committee met at 10: 30 a.m., pursaant to Senate Kesolu-
tion 44, agreed to February 2, 1959, in the caucus room. Senate Office
Building, Senator Karl E. Mimdt presiding.
Present : Senator John L. McClellan, Democrat, Arkansas ; Senator
Karl E. Mundt, Republican, South Dakota; Senator Carl T. Curtis,
Republican, Nebraska ; Also present : Robert F. Kennedy, chief coun-
sel ; LaVern J. Duffy, investigator ; Richard G. Sinclair, investigator ;
J ames F. Mundie, investigator ; John T. Thiede, investigator ; Robert
E. Manuel, assistant counsel; Ruth Y. Watt, chief clerk.
Senator Mundt, The committee will come to order, please.
(Members of the select committee present at time of convening:
Senators Mundt and Curtis.)
Senator Mundt. Mr. Counsel, you may call the first witness.
Mr. Kennedy. Mr. LaRocca and Mr. Gabriel Kelly Mannarino.
Senator Mundt, Please be sworn.
Do you and each of you solemnly swear the testimony you are
about to give will be the truth, the whole truth, and nothing but the
truth, so help you God ?
Mr. Mannarino. Yes, sir.
Mr. LaRocca. I do.
TESTIMONY OF GABKIEL KELLY MANNARINO AND JOHN SEBAS-
TIAN LaROCCA, ACCOMPANIED BY COUNSEL, V. M. CASEY
Senator Mundt, The man in the blue suit, on this side, please give
your name, your residence, and your present occupation for the record.
Mr. Mannarino. My name is Gabriel Mannarino, and I live in New
Kensington, Pa,
Senator Mundt, And what is your occupation ?
Mr. Mannarino, I decline to answer the question on the grounds
it may tend to incriminate me.
Senator Mundt. What is your name, sir?
Mr, LaRocca, My name is John S, LaRocca. I live at 900 West
Ingomar, Pittsburgh, My occupation: I am the president of the
North Star Cement Block Co.
Senator Mundt, Very good.
Do each or either of you have counsel ?
18727
18728 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. LaRocca. I have my counsel.
Mr. Mannarino. Yes, sir.
Senator Mundt. Does he represent you also ?
Mr. LaRocca. Yes, sir.
Senator Mundt. You both have the same counsel ?
Mr. LaRocca. Yes, sir.
Senator Mundt. Counsel, will you please identify yourself ?
Mr. Casey. V. M. Casey, Grant Building, Pittsburgh.
Senator Mundt. All right, Mr. Counsel.
Mr. Kennedy. Mr. LaRocca, we had some testimony yesterday in.
connection with a visit you made to Gary in 1955. Would you tell
us what you were doing there ?
Mr. LaRocca. I refuse to answer the question on the ground it may
tend to incriminate me.
Mr. IvENNEDY. You registered at the hotel in Gary, Ind., and your
bills were paid for by Mr. Pinelli, who was also at the hotel mider
another name. Would you tell us what work you were doing there,
what you were doing consulting with Mr. Pinelli ?
Mr. LaRocca. I respectfully decline to answer the question on the
ground it may tend to incriminate me.
Mr. Kennedy. Mr. LaRocca, according to our information, you also
attended the meeting at Apalachin ; is that correct ?
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. K[ennedy. Could you tell us what that meeting was about ?
Mr. LaRocca. I decline to answer the question on the same ground.
Mr. Kennedy. According to our information, you arrived in Bing-
hamton, N.Y., on TWA flight 482, arriving at 11 :17 a.m. on November
13, 1957.
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. Kennedy. And you had a reservation to leave on flight 481 on
November 14, for Newark, N.J. ; is that correct ?
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. Kennedy. Your verification number was Apalachin 6-2711,
which was the home number of Joseph Barbara, at whose home the
famous meeting was held; is that correct?
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. Kennedy. You were registered at the Hotel Arlington, Bing-
hamton, N. Y., on November 13 ?
Mr. LaRocca. I decline to answer the question on the same ground.
Mr. KJENNEDY. You left the hotel at 8 :58 on November 14, with
Michael Genovese ; is that right ?
Mr. LaRocca. I decline to answer the question on the same ground.
Mr. Kennedy. You were not picked up at the meeting at Apalachin ;
you were not one of those who were arrested ?
Mr. LaRocca. I decline to answer the question on the same ground.
Mr. Kennedy. Were you one of those who was able to escape
through the woods, Mr. LaRocca ?
Mr. LaRocca. I decline to answer the question on the same ground.
Mr. Kennedy. Would you tell us anything about what happened at
the meeting at Apalachin ?
Mr. LaRocca. I plead the privilege.
Mr. Kennedy. Mr. Mannarino, you also attended the meeting at
Apalachin ; is that correct ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18729
Mr. Mannarino. I decline to answer the question.
Mr. Kennedy. For what reason ?
Mr. Mannarino. It might tend to incriminate me.
Mr. Kennedy. You also were registered at the Hotel Gary, in Gary,
Ind.,inl955?
Mr. Mannarino. I decline to answer the question.
Mr. Kennedy. You and Mr. LaKocca were there together; is that
correct ?
Mr. JMannarino. I decline to answer the question.
Mr. Kennedy. Could you tell — for what reason ?
Mr. Mannarino. On the grounds it may tend to incriminate me.
Mr. Kennedy. Would you tell us what reason you came to Gary,
Ind., in 1955, and registered at the hotel, and your bill was paid there
by Mr. Pinelli ? Would you tell us that ?
Mr. Mannarino. I decline to answer the question on the grounds
it may tend to incriminate me.
Mv. Kennedy. You were also at the Hotel Arlington in Bingham-
ton, N.Y., at the time of the Apalachin meeting; is that right?
Mr. Mannarino. I decline to answer the question.
Mr. Kennedy. The three representatives from the Pittsburgh area
at the Apalachin meeting were you, John LaKocca, and Michael
Genovese ; is that right ?
Mr. Mannarino. I decline to answer the question.
Mr. Kennedy. Mr. Chairman, could I call Mr. Salinger to give the
background?
Senator Mundt. Mr. Salinger may take the stand.
TESTIMONY OF PIERRE E. G. SALINGER— Resumed
Senator Mundt. You have been previously sworn in connection with
this hearing, have you not ?
Mr. Salinger. I have, sir.
Senator Mundt. Very well, Mr. Counsel.
Mr. Kennedy. Would you give the background we have on Mr.
LaEocca, please?
Mr. Salinger. Yes, sir.
Mr. LaRocca was born in Caltanissetta, Italy, in 1902. It might
be of some interest to note, Mr. Kennedy, that three other principal
figures in this investigation were born in the same city, Mr. Morgano,
Mr. Pinelli, and Mrs. Josephine Melton, the girl friend of Mr. Pinelli.
They were all born in the same city.
Mr. Kennedy. The same city as Mr. LaRocca ?
Mr. Salinger. That is correct. Mr. LaRocca has an extensive
criminal record. He was convicted in 1922 of assault with intent to
kill, served 3 to 5 years in the Western Penitentiary in Pennsylvania.
In 1926 he was convicted of carrying concealed weapons and fined
$50. In 1939 he was convicted of running a lotteiy, put on 1 year's
probation. In 1940 he was convicted of larceny of auto plates and
fined $100.
18730 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF JOHN SEBASTIAN LaROCCA, ACCOMPANIED BY
COUNSEL, V. M. CASEY— Resumed
Mr. Kennedy. Is it correct that you were bom in Caltanissetta,
Italy, Mr. LaKocca ?
Mr. LaEocga. I don't think so.
Mr. Kennedy. Where were you bom ?
Mr. LaRocca. According to what my dad said, I was born in Villa
Rosa.
Mr. Kennedy. Villa Rosa, Italy ?
Mr. LaRocca. Villa Rosa, yes. I don't know anything about the
town or anything.
Mr. Kennedy. Has it been stated before that you were born in
Caltanissetta? Have you heard that before? Where is Villa Rosa?
Mr. LaRocga. In Sicily, someplace.
Mr. Kennedy. When did you come to the United States ?
Mr. LaRocga. Truthfully, I don't know. I would have to look.
I would have to check, because I was a young boy.
Mr. Kennedy. Four or five years old when you came to the United
States?
Mr. LaRocga. Well, I wouldn't exactly know.
Mr. Kennedy. Where did you first settle when you came to the
United States?
Mr. LaRogga. In Indiana County, I thmk.
Mr. Kennedy. In Indiana?
Mr. LaRogga. No, in Pennsylvania.
Mr. Kennedy. How long did you live there, then ?
Mr. LaRogga. I have lived up around there pretty near all my life.
Mr. Kennedy. Did you go to school there ?
Mr. LaRogga. Yes, a little bit.
Mr. Kennedy. What was your first job ?
Mr. LaRocga. Working in the coal mines.
Mr. Kennedy. How long did you work there ?
Mr. LaRogga. I dug coal.
Mr. Kennedy. How long did you dig coal ?
Mr. LaRocga. Well, I thmk about — I don't know ; maybe from 14
to about 20 years old or something like that.
Mr. Kennedy. Wliat did you do after that ?
Mr. LaRogga. I refuse to answer the question on the ground it may
tend to incriminate me.
Mr. Kennedy. Wlien you became 20 years old, what happened that
you can't give the committee an answer as to what occupation you
had?
Mr. LaRogga. I decline to answer the question on the ground it
may tend to incriminate me.
Senator Mundt. Are you a naturalized citizen ?
Mr. LaRogga. No.
Senator Mundt. You are not a citizen ?
Senator Curtis. Did you ever make application to become a citizen ?
Mr. LaRocga. Yes.
Senator Curtis. When?
Mr. LaRogga. I decline to answer the question on the ground it
may tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18731
Senator Curtis. Was the application completed by you or was it
turned down ?
Mr. LaRocca. I decline to answer the question on the ground it may
tend to incriminate me.
Senator Curtis. You haven't been incriminated since 1940, accord-
ing to your record, have you ? You haven't been arrested in the last
19 years, have you ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Curtis. That is all, Mr. Chairman.
Senator Mundt. Mr. Salinger, if you have not already done so, the
Chair would recommend that at this point in the record you insert, as
soon as it can be made available from you, a report from the Depart-
ment of Justice on this witness as to his citizenship status, as to why
his application was rejected, if it was rejected, and as to why deporta-
tion proceedings have not been instigated against him, if they have
not, and if they have, why they have not been implemented in view
of the testimony.
I think if you will ask the Department of Justice for a complete
report, it will be made available and we will insert it into the record
at this point in conjunction with the questions asked by Senator
Curtis.
TESTIMONY OF PIEERE E. G. SALINGER— Resumed
Mr. Salinger. Senator, I have made inquiry into this matter, and
I can place in the record at this time the information we have con-
cerning him.
Senator Mundt. We will have you put it into the record at this
point, and you can summarize it.
Mr. Salinger. Mr. LaRocca entered the United States in 1910. In
1953 the Department of Immigration started proceedings to deport
him on the basis that he had been convicted of two felonies, two
felonies involving moral turpitude, larceny and aggravated assault
and battery.
They concluded their deportation hearing on November 10, 1954.
Mr. Kennedy. Wlien did it start ?
Mr. Salinger. The deportation proceedings were filed originally in
January of 1953.
Mr. Ivennedt. That was based on two convictions involving moral
turpitude ?
Mr. Salinger. That is right. Larceny and aggravated assault and
battery.
Mr. Kennedy. And they were trying to deport him at that time?
Mr. Salinger. They were, sir.
Senator Mundt. What was the date of the conviction ?
Mr. Salinger. The convictions involved in the deportation mat-
ter were 1922 and 1940, the first being the one I told you about, as-
sault with intent to kill, in which he served 3 to 5 years in Western
Penitentiary.
Senator Mundt. What does the record show as to why it would
take the Department of Justice from 1940 to 1953 to instigate de-
portation proceedings for a crime for which he was convicted in
1940?
18732 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Salinger. That question I cannot answer, Senator.
Senator Mundt. That is pretty slow motion, it seems to me, for
any governmental agency.
Mr. Salinger. To go on with this. Senator, the deportation pro-
ceedings came to a close on November 10, 1954. On December 27,
1954, Mr. LaRocca received a pardon from the Governor of Penn-
sylvania for the crime of larceny, which was predated to May 19,
1954, putting it in the period during which they v/ere having the de-
portation hearings.
Mr. Kennedy. What do you mean? The pardon that was granted
by the Governor was predated ?
Mr. Salinger. It was mailed to him on December 27, 1954, which
was after the close of the deportation hearings, but it bore the date
of May 19, 1954, approximately 8 months earlier.
Mr. Kennedy. So that invalidated the hearings of the Immigra-
tion and Naturalization Service ?
Mr. Salinger. As a result of that, the Immigration andJN'aturaliza-
tion Service opened their hearings again on January 27, 1955, and
terminated the proceedings for deportation against Mr. LaRocca.
Senator Mundt. Terminated them because the Governor has par-
doned him for the crime on which they were attempting to ship him
overseas ?
Mr. Salinger. That is correct, sir.
Senator Mundt. Did you get a pardon from the Governor of Penn-
sylvania, Mr. LaRocca?
Mr. LaRocca. Yes, sir.
Senator Mundt. Wliat was his name ?
Mr. LaRocca. Governor Fine.
Senator Mundt. He wrote a pardon and pardoned you in what
year— 1954?
Mr. LaRocca. I don't know whatever year it was, but that is what
happened.
Senator Mundt. 1954 was the year ?
Mr. Salinger. The pardon was mailed to Mr. LaRocca December 27,
1954, and dated May 19, 1954.
Senator Mundt. Where had it been all that 6 months ?
Mr. Salinger. That I cannot tell you, sir. But it is significant that
it was mailed after the deportation proceedings had ended.
Senator Mundt. I can see a pardon might be gi-anted after the de-
portation proceedings might have ended, but I cannot understand
how they would be backdated before the deportation proceedings
began.
Mr. Salinger. I do not know the answer to that, Senator. That is
the fact.
Senator Curtis. "\'\'Tiere was he all that time ?
Mr. Salinger. In Pennsylvania.
Senator Curtis. Had he completed his service ?
Mr. Salinger. Which service. Senator ?
Senator Curtis. For the offense for which he was pardoned ?
Mr. Salinger. On that offense, all he was fined was $100. He didn't
do any time on that offense.
Senator Curtis. What was he pardoned for ?
Mr. Salinger. On the charge of larceny of auto plates, for which
he was fined $100. In other words, he had applied for a pardon, which
IIMPROPER ACTIVITIES IN THE LABOR FIELD 18733^
is something sometimas done by people after they have served a sen-
tence or after the crime was written off the books.
Senator Curtis. Was he ever pardoned for these other offenses ?
Mr. Salinger, In that regard, Senator, in 1958 Mr. LaRocca ap-
plied to the pardon board in Pennsylvania for a pardon on the charge
of assault with intent to kill which he served 3 to 5 years, and the
parole board at that time denied his pardon, said they were not
going to pardon him.
Senator Mundt. That was 1958 ?
Mr. Salinger. Yes, sir.
Senator Mundt. Last year ?
Mr. Salinger. Yes, sir.
Senator Mundt. Did he serve any time in the penitentiary ?
Mr. Salinger. He was sentenced to 3 to 5 years in Western State
Penitentiary of Pennsylvania. I do not have the record which indi-
cates how long he served at that time.
Senator Mundt. So that is still an outstanding offense ?
Mr. Salinger. It is, sir.
Senator Mundt. And would come within about the same period of
time. The crime was committed in 1920 or so and the deportation
proceedings began in 1950.
Mr. Salinger. The deportation proceedings started in 1953.
Senator Mundt. And none have been started on this last offense,
assault with intent to kill ?
Mr. Salinger. No.
Senator Mundt. Or attempted assault ?
Mr, Salinger. There are no new deportation proceedings which
have been started since this pardon was issued.
Senator Mundt. How many convictions has the witness had al-
together? Stealing automobile plates and one for assault with intent
to kill, and what else ?
Mr. Salinger. Carrying concealed weapons and operating a lot-
teiy.
Senator Mundt. He has been convicted on all of them ?
Mr, Salinger, Yes, sir.
Senator Mundt. And one has been pardoned ?
Mr, Salinger. One has been pardoned ; that is correct.
Senator Mundt. The deportation proceedings dealt only with the
stealing of automobile plates ?
Mr. Salinger, The assault with intent to kill was also included in
that deportation.
Senator Mundt, It was ?
Mr. Salinger. As I understand it, the;^ need two crimes of moral
turpitude to deport an alien from^the United States, and by the par-
don of this one crime, it removed one of the two crimes, even though
there was one crime that they considered a moral turpitude.
Senator Mundt, But both of them were originally included in the
citation ?
Mr. Salinger. That is correct, sir.
Senator Mundt. By knocking one out, you automatically knock out
the other one ?
Mr. Salinger. That is right.
Senator Mundt. All right ; go ahead.
18734 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. The way it was handled, Mr. Salinger, was that one
of the crimes was knocked out in December of what — 195
Mr. Salingek. 1954.
Mr. Kennedy. But predated to May 1954, with the result that the
deportation action by the Federal Government, all of that activity
and effort became invalidated ; is that correct?
Mr. Salinger. That is correct. The Immigration Department re-
opened its hearings on January 27, 1955.
Mr. I&;nnedy. They had to start all over again ?
Mr. Salinger. Well, they opened the hearing again as a result of
the pardon and had to terminate the proceedings as they no longer
had what they considered the necessary grounds for deporting Mr.
LaRocca.
Senator Curtis. I would like to inquire who made the determina-
tion that carrying a concealed weapon was not a crime of moral turpi-
tude, but stealing a license plate was.
Mr. Salinger. I cannot answer that question, Senator.
Mr. Kennedy. Maybe the witness can.
TESTIMONY OF JOHN SEBASTIAN LaROCCA, ACCOMPANIED BY
COUNSEL, V. M. CASEY— Resumed
Mr. LaRocca. I am not a lawyer, or a judge.
Mr. Kennedy. Who represented you in the deportation proceed-
ings?
Mr. LaRocca. Charles J. Margiotti.
Mr. Kennedy. Margiotti?
Mr. LaRocca. That is right.
Mr. Kennedy. Is he an attorney in Pittsburgh ?
Mr. LaRocca. He was.
Mr. Kennedy. He is deceased ?
Mr. LaRocca. That is right.
Mr. Kennedy. Was he the one that was attorney general for the
State of Pennsylvania ?
Mr. LaRocca. Yes, sir.
Mr. Kennedy. When was he attorney general for the State of
Pennsylvania?
Mr. LaRocca. I don't remember.
Mr. Kennedy. Do you know when he was attorney general of the
State of Pennsylvania?
Mr. Salinger. During the term 1946 to 1950.
Mr. Kennedy. Do you know why the Governor of Pennsylvania
predated the pardon ?
Mr. LaRocca. I don't know anything.
Mr. Kjennedy. You don't know anything ?
Mr. LaRocca. I don't know that.
Mr. Kennedy. ^Y\.\J did you attend the meeting in Apalachin?
Do you know that ?
Mr. LaRocca. I refuse to answer the question on the grounds it
may tend to incriminate me.
Mr. KJENNEDY. Do you know what conversations were held with
the Governor of Pennsylvania as to why they should give you a par-
don in December of 1954, predated to May ?
Mr. LaRocca. Certainly not.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18735
Mr. Kennedy. You don't know?
Mr. LaRocca. I don't know nothing.
Mr. Kennedy. Did your lawyer ever explain that to you as to how
he was able to do that ?
jNIr. LaEocca. No, sir.
Mr. IvENNEDY. Did he tell you he was able
Mr. LaRocca. I decline
Mr. Kennedy. Did he tell you he was able to save you from depor-
tation because he was able to do that?
Mr. LaRocoa. I decline to answer the question on the grounds it
may tend to incriminate me.
Mr. IVENNEDY. Very interesting, though. You will agree on that,
won't you, Mr. LaRocca, as to how this happened ?
Mr. LaRocca. I decline to answer the question on the same ground.
Senator Mundt. Have you applied for naturalization papers or
citizenship papers
Mr. LaRocca. I decline to answer the question on the same grounds.
Senator Mundt. Wait until I finish — since you received your par-
don?
Mr. LaRocca. Yes.
Senator Mundt. Have they been acted upon, either favorably or
unfavorably ?
Mr. LaRocca. Not yet.
Senator Mundt. Would you tell us about when you made the appli-
cation ?
Mr. LaRocca. I don't remember.
Senator Mundt. Was it within a year or 2 years? I would have
to be since 1954 sometime, would it not?
Mr. LaRocca. I don't remember what year.
Senator Mundt. You were pardoned, you said, in 1954 ?
Mr. LaRocca. Well, I don't remember what year I was pardoned,
but I was pardoned.
Senator Mundt. You don't remember what year you applied for
citizenship ?
Mr. LaRocca. No ; I exactly don't.
Senator Mundt. Aren't you enough interested in being a citizen
so that you would kind of want to pursue it and try to get a favorable
report, if you can ?
Mr. LaRocca. I want to be a citizen as much as I want to live.
Senator Mundt. All right, then. I would think you would be
interested in following through. You should
Mr. LaRocca. Well, I mean I just don't remember the year. But
I think your investigator should know it. You have it there.
Senator Mundt. Well, I will find out.
Do you know, Mr. Salinger ?
Mr. Salinger. We have a record that Mr. LaRocca filed a petition
for naturalization in 1950, but I do not have a record of any subsequent
filing.
Senator Mundt. Did you just file one time, in 1950? That is what
he said. You heard him. You were pardoned in 1954. You would
have a much better chance to be a citizen after you had been pardoned
than you were when you had a lot of things hanging over your head.
If you want to be a citizen, as you say, more than anything in the
world, let's find out.
18736 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. LaEocca. Well, tliey haven't called me.
Senator Mundt. They are not out recruiting citizens.
_ Mr. LaRocca. I know. But after you file, they call you when it is
time, and they haven't called me.
Senator Mundt. So you just filed once, back in 1950, 9 years ago,
and not since then. You are not really pursuing it very hard.
Senator Curtis. How old are you now ?
Mr.LARoccA. Fifty-six.
Senator Curtis. You have always lived in this same area ?
Mr. LaRocca. Yes, sir.
Senator Curtis. Do you know any union leaders ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Curtis. Would that incriminate you? That is, the mere
fact that you knew some union leaders, would that incriminate you ?
Mr. LaRocca. I decline to answer the question.
Senator Curtis. Have you been engaged in any labor-management
activities ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Curtis. Have you represented employers in dealing with
unions ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Curtis. Have you represented unions in dealing with em-
ployers ?
Mr, LaRocca. I decline to answer the question on the same grounds.
Senator Curtis. You are head of a cement block company ?
Mr. LaRocca, I decline to answer the question on the same grounds.
Senator Curtis. I think you said at first
Senator Mundt. I thought you said when I first asked you your
occupation
Mr. LaRocca. That is right. I am president of the North Star
Cement Block Co.
Senator Curtis, Is that your principal business ?
Mr. LaRocca, That is right.
Senator Cutitis. What other business do you have?
Mr, LaRocca. I decline to answer the question on the same ground.
Senator Curtis. Is that your principal income ?
Mr. LaRocca. Yes, sir.
Senator Curtis. Wliat other income do you have ?
Mr. LaRocca. I decline to answer the question on the grounds it may
tend to incriminate me.
Senator Curtis. Do you remember who your character witnesses
were on your application for citizenship ?
Mr. LaRoca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Curtis. It looks like you got the wrong people on there
then.
That is all.
Senator Mundt. Counsel, you may proceed,
Mr. Kennedy. As a matter of fact, you have been very_ close to Mr.
Nicholas Stirone, who is head of the Hod Carriers Union in Pitts-
burgh, Pa. ; is that correct ?
IIVIPROPER ACTIVITIES IN THE LABOR FIELD 18737
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Mundt. He has been recently convicted of labor racketeer-
ing; has he not?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Mundt. Tell what other information we have.
Mr. Salinger. Our interest in Mr. LaRocca stems from several in-
vestigations where he came into the investigation. One, of course, was
the investigation of Gary, Ind., where we found Mr. LaRocca in con-
tact with Mr. Pinelli, not only in Gary, Ind., where he registered at the
Hotel Gary and had his bill paid for by Mr. Pinelli, but we also found
him in Serra Madre, Calif., visiting the home of Mr. Pinelli on the
west coast, at that time in company with Mr. Frank DeSimone, an
attorney at the Apalachin meeting, and Salvatore Marino, owner of the
California Cheese Co. at San Jose.
We are also interested in Mr. LaRocca because of his visit to the
Apalachin meeting, and also as to his activities in the laundry and
overall industry in Detroit, Mich. There we found certain hoodlum-
dominated companies had succeeded in driving out competition, and
"we found that the proprietors of these companies were in contact with
Mr. LaRocca and his associates in the Pittsburgh area.
Mr. KJENNEDY. Who were these individuals?
Mr. Salinger. The individuals I referred to are Anthony Zerilli
and Jack Tocco.
Mr. Kennedy. Do you know them, Mr. LaRocca ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Mr. Kennedy. We have telephone calls from these individuals to
Mr. LaRocca in Pittsburgh?
Mr. Salinger. Yes, sir. Just to give background, they are the
owners of the Melrose Linen Co., in Detroit, Mich., and also the own-
ers of the Hazel Park Racetrack in Michigan, which was recently
acquired in connection with the Wlieeling Downs Racetrack in
Wlieeling,W.Va.
The area of Wlieeling, W. Va., is the area where Mr. LaRocca is
reputed to have considerable influence in underworld circles.
On November 7, 1957, he was in the Wlieeling Hotel in Wlieeling
and placed a call to the Red Eagle Club in Pittsburgh, Pa. He also
placed a call to that club on October 19, 1957, and Mr. Tocco
placed a call to that club on November 8, 1957. A report of the
Pittsburgh Police Department lists the Red Eagle Club as the hang-
out for what they described as the "elite" of gangdom in Pittsburgh,
and among those they name as being present there occasionally is
Mr. LaRocca. ...
We then have a call from the Melrose Linen Co. in Detroit to a
phone number in Pittsburgh, Museum 1-0303. This is the telephone
number of the Coin Machine Distributing Co., of Pittsburgh, for
which Mr. LaRocca is the representative in Pittsburgh.
Mr. Kennedy. Would you tell us about that call?
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. Kennedy. Did you receive the other calls from these gentle-
men?
18738 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. LaKocca. I decline to answer the question on the same grounds.
Mr. Salinger. We also find the Melrose Linen Co. placing calls to
the Red Eagle Club, as well as the Melrose Linen Co. placing a call
to Cherry 1-2221, which is listed in the name of "Archie Automatic
Car Wash." This is a company owned by Michael Genovese, who
shared a room with Mr. LaRocca in Binghamton, N.Y., at the time
of the Apalachin meeting.
I have the toll tickets for those calls, Mr. Chairman, if you want
to make them an exhibit.
Senator Mundt. They will be made exhibit No. 18.
(Toll tickets referred to were marked "Exhibit No. 18" for ref-
erence and may be found in the files of the select committee.)
Mr. Salinger. Besides the company which Mr. LaRocca has identi-
fied himself owning, he also has interest in the Coin Machine Distri-
buting Co., of Pittsburgh, Pa. At the time he was picked up in Los
Angeles, at the time of leaving Mr. Pinelli's house, he had a card on
him whicli listed him as the president of the Kooler Keg Co., of Pitts-
burgh, Pa.
Mr. Kennedy. How do you spell that ?
Mr. Salinger. K-o-o-l-e-r K-e-g.
According to the authorities in the Pittsburgh area, Mr. LaRocca
in the past has had considerable influence in the operation of num-
bers and other illicit activities in the Pittsburgh area,
Mr. Kennedy. You are president of the Kooler Keg Co. ?
Mr. LaRocca, I decline to answer the question on the grounds
it may tend to incriminate me,
Mr. Kennedy. And he is a known associate of Mr, Stirone?
Mr. Salinger, Yes, sir,
Mr. Kennedy. And the information I asked about in connection
with the meeting at Apalachin as to the time of his arrival and time
of his departure, is that information correct, according to our rec-
ords ?
Mr. Salinger. According to our information that information as
you read it in asking the w^itness is correct.
Mr, Kennedy. Do you have the documents in connection with
that?
Mr, Salinger, I do not have them here,
Mr, Kennedy, But we have verified that from the registration at
the hotel and from the airline tickets ; is that correct ?
Mr, Salinger, That is correct,
Mr, Kennedy, Would you tell us why you and Mr. Mannarino would
go to Gary ? Would you give us any information about that ?
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. Kennedy, Did you have anything to do with Mr, Pinelli's
jukebox operation in that city i
Mr, LaRocca, I decline to answer the question on the same grounds,
Mr. Kennedy, Did you have anything to do with his gambling
operations ?
Mr, LaRocca, I decline to answer the question on the same
groimds,
Mr, Kennedy, Mr, Mamiarino, where were you born ? Would you
tell us that ?
Mr, Mannarino, I decline to answer the question on the grounds
it may tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18739
Mr. Kennedy. Just one other question, Mr. LaKocca.
After the meeting at Apalachin, we were looking foi' you for most
of 1958. Would you tell us where you were at that time 'i
Mr. LaRocca. I decline to answer the question on the same
grounds.
Mr. Kennedy. Actually, you disappeared fi-om your city for about
11: months, did you not?
Mr. LaRocca. I decline to answer the question on the same grounds.
Mr. Kennedy. Is it correct that you went down to Mexico during
that period of time?
Mr. LaRocca. 1 decline to answer the question on the same grounds.
Mr. Kennedy. It is true that you v.ere hiding down there, is it not ?
Mr. LaRocca. I decline to answer the question on the same gi'ounds.
Senator Mundt. If you could answer "No" to that, that might help
your passport position. That sounds kind of bad. I will help you
out, if you want to be a citizen so badly.
If you can say, "No, I never was illegally in Mexico and returned,'^
you have it in tlie record, and that might help you get the passport
that you want, and get your citizenship. I will give you another
chance, if you Avant.
]\Ir. LaRocca. Can I see my lawyer?
Senator Mundt. You may.
(The witness conferred with his counsel.)
Mr. LaRocca. I was not.
Senator Mundt. You have to say more than "I Avas not."
Mr. LaRocca. I was not in Mexico.
Senator Mundt. You never have been in Mexico ?
Mr. LaRocca. Never.
Mr. Kennedy. Where were you?
Mr. LaRocca. In the United States.
Mr. Kennedy. Whereabouts?
Mr. LaRocca. I decline to answer the question on tlie grounds it
may tend to incriminate me.
Mr. Kennedy. Mr. Chairman, I think we should find that out. If
he wasn't in JNIexico, at least find out where he Avas.
Senator Mundt. What is the year involved?
Mr. Kennedy. 1958.
Senator Mundt. That is last year. If you Avere not in the Mexico^
Avere you in the United States throughout 1958?
Mr. LaRocca. I told you that I Avas in the United States.
Senator Mundt. Were you in Pennsylvania ?
Mr. LaRocca. I decline to ansAver the question on tlie grounds it
may tend to incriminate me.
Senator Mundt. Any particular day or time?
Mr. Kennedy. This 'is the situation, Mr. Chairman. This Avitness
says that he Avants to become a citizen of the United States more than
anything. He has this background of some four convictions. He is
recognized by the police department in the city of Pittsburgh as a
leader of the underAvorld there. He attended the meeting at xVpala-
chin. He AA-as able to escape from being detected at that time.
AVe have been looking for him, and other State authorities and
Federal authorities Avere looking for him, for a period of approxi-
mately 14 months. The information that Ave received Avas that he had
fled the United States and gone to Mexico. He has noAV denied that.
1S740 IMPROPER ACTIVITIES IN THE LABOR FIELD
We would like to find out where he was after the meeting at
Apalachin. This is for the whole period of 1958.
Senator Mundt. Do you recall about when the Apalachin meeting
was?
Mr. Kennedy. November of 1957.
Senator Mundt. Where were you in December of 1957 ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Mundt. Where were you in November of 1957 ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Mundt. With the permission of the committee, the Chair
orders and directs you to tell the committee where you were in Novem-
ber of 1957 and where you were in December of 1957, because you
have partially answered the question by saying you were in the United
States, you did not go to Mexico, you did not leave the country.
Therefore, having waived your immunity in that area, the Chair
thinks you should answer the question as to where you actually were.
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
(At this point Senator McClellan entered the hearing room.)
Senator Curtis. I would like to help a little bit on this naturaliza-
tion matter, give you a chance to clear up the record here and become
a citizen.
Were you at Apalachin ?
Mr. LaRocca. I decline to answer the question on the same grounds.
Senator Curtis. You are missing a great opportunity here to show
good character.
Senator Mundt. Mr. LaRocca, I think Senator Curtis is correct. I
think we have helped your naturalization procedure by clearing the
record of the charge that you were in Mexico. You are alert. You
are an adult. You know the significance of this Apalachin meeting.
It was a great gathering of hoodlums. Your name has been at-
tached to the meeting. If you were there, of course, you haven't got
a Chinaman's chance of becoming a citizen of the United States. But
if you were not there, and will swear under oath you were not there,
you have taken another great big step in becoming a citizen of the
United States. Now, would you like to talk to your lawyer ?
Mr. LaRocca. I deiine to answer the question on the grounds it may
tend to incriminate me.
Senator Mundt. What did you say? You decline to answer?
Mr. LaRocca. That is right.
Senator Mundt. Would you like to consult with your lawyer on
that one?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Mundt. You are slipping back toward Sicily. You are
not going to get that naturalization paper. You don't want to answer ?
You don't want to talk to your lawyer? You just want to let that
blot stand there as a barrier to becoming a citizen?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18741
Senator Curtis. It was said here in the record that you were re-
garded by the police as bein^ the head of the underworld in the
Pittsburgh area. I think the Immigration and Naturalization Serv-
ice officers, the court, would like to know whether or not that is true.
Is it?
The Chairman. Has this witness ever applied for American citi-
zenship ?
Senator Curtis. He has it pending now.
The Chairman. He has it pending now ?
Senator Curtis. Yes.
The Chairman. Are you loyal to the United States of America?
Mr. LaRocca. Yes, sir.
The Chairman. Are you proposing to abide by its laws?
ISIr. LaRocca. Yes, sir.
The Chairman. If you become a citizen of the United States, will
you faithfully conform to the laws of the United States and be
obedient to them?
Mr. LaRocca. Yes.
The Chairman. Will you now be obedient by answering questions
here and show your disposition and willingness to cooperate with
your Government?
Mr. LaRocca. I decline to answer that question on the grounds it
mav tend to incriminate me.
The Chairman. That is a refusal. You are refusing now to co-
operate with the Government that you say you would be faithful to,
aren't you ? Have you any other explanation for it ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
The Chairman. You don't have to answer it. You know now
you are being unfaithful to the very Government you profess you
want to be a citizen of by not cooperating with one of its instru-
mentalities, its committee investigating conditions about which it
wants to consider legislation.
Is that the kind of a citizen you propose to be? Have you any
answer to that?
I don't tliink you have. Proceed.
Senator Curtis. I would like to know whether or not you are the
head of the underworld in the Pittsburgh area. Are you ?
Mr. LaRocca. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Curtis. Your answer to that would incriminate you ; is that
your belief?
Mr, LaRocca. I decline to answer the question on the same grounds.
Senator Curtis. There are only two answers to it; one is yes and
one is no. I don't think the answer no is a difficult explanation.
Mr. LaRocca. I decline to answer the question.
Senator Curtis. Tliat is all, Mr. Chairman.
The Chairman. Senator, I suggest that a transcript of this testi-
mony be immediately presented to the Immigration and Naturaliza-
tion Service authorities, and also that a copy of it be filed with the
clerk of the court where his application is pending.
Senator ]\Iundt. The Chair believes that is a splendid suggestion.
With the approval of the committee, it will be promptly implemented.
36751— 59— pt. 53 21
18742 IMPROPER ACTIVITIES IN THE LABOR FIELD
Are there any other questions ?
Mr. Kennedy. Would you give the background of Mr. Mannarino?
Senator Mundt. Mr. Salinger, you may give the background of Mr»
Mannarino.
Mr. Salinger. Mr. Mannarino also attended the meeting at Apa-
lachin. He is, of course, of interest to us because of his visit to Gary,
Ind., where he stayed at the Hotel Gary on July 28, 1955, and his bill
was paid there by Mr. Pinelli.
Mr. Mannarino has associates, two labor union officials: Mr. Joe
Sonken, who is a notorious Chicago figure who received a charter to
run the Hod Carriers Union in Miami, Fla. ; and Mr. Nicholas
Stirone, a Hod Carrier official in Pittsburgh, Pa., who has recently
been convicted of labor racketeering.
Mr. Kennedy. Mr. Stirone no longer has a charter ?
Mr. Salinger. That is correct.
Mr. Kennedy. When did he have the charter ; what period ?
Mr. Salinger. 1954.
Mr. Kennedy. For about a year ?
Mr. Salinger. For about a year he held that charter. Mr. Man-
narino has been arrested six times and convicted twice, gambling
charges in 1933 and 1945. He and his brother, Sammy Mannarino,
were part owners of the Sans Souci gambling casino in Havana, Cuba.
Mr. Kennedy. From 1952 to approximately 1954 ?
Mr. Salinger. Our information is that they ceased to have an
interest in it around 1954.
Mr. Kennedy. Is that correct 2
Mr. Mannarino. I decline to answer the question on the grounds
it may tend to incriminate me.
Mr. Salinger. Their partners are purported to be Nick Delmore^
a racketeer in the New Jersey area, and Sam Gold. According to-
the information we have, they sold their interest in Sans Souci to Mr.
Santos Trafficante, Jr. He is a Tampa, Fla. racketeer who alsa
attended the meeting at Apalachin.
Mr. Mannarino has been known
Mr. Kennedy„ He is the one that the authorities in New York
have been trying to locate in connection with the slaying of Albert
Anastasia; is that right?
Mr. Salinger. Mr. Trafficante ; that is correct.
Mr. Mannarino is considered by authorities as a leading figure in
the underworld in Westmoreland County, Pa., and an operator there
of numbers, football pools, pmichboards and horse betting parlors.
He is, according to our information, with interest in the Kent Iron &
Steel Co., as well as a number of clubs in the Westmoreland County
area.
He also, after the Apalachin meeting, dropped from sight and was
missing for some 14 months.
Mr. Kennedy. At the Apalachin meeting, he was registered at the
Hotel Arlington with John LaKocca ; is that correct ?
Mr. Salinger. John LaRocca, Gabriel Mannarino, and Michael
Genovese were all at the Hotel Arlington in Binghamton, N.Y.
Mr. Kennedy. Would you tell us about that meeting?
Mr. Mannarino. I decline to answer the question on the grounds
it may tend to incriminate me.
IIVIPROPER ACTIVITIES IN THE LABOR FIELD 18743
Mr. Kennedy, Mr. Chairman, if there was ever a question about
the syndicate operations or of the members of the crime group oper-
ating" across State lines, these hearings of the last few days show
clearly that they do. We have Pinelli coming from Sierra Madre,
on tlie west coast, to Gary, Ind. We have these two individuals com-
ing from Pittsburgh, Pa., and meeting in Gary, Ind., and we have
the fact that they have contacts with leading gangsters and hoodlums
around the United States.
Then in Lake County, Ind., we find the breakdown of law enforce-
ment which started about this period of time, so that you have this
vice, this gambling, and other forms of underworld activities in that,
area.
That is all.
Senator Mundt. Mr. Mamiarino, are you a citizen of the United
States?
Mr. Mannarino. I decline to answer the question on the grounds
it may tend to incriminate me.
Senator Mundt. Were you bom in the United States ?
Mr. Mannarino. I decline to answer the question on the gromids
it may tend to incriminate me.
Senator Mundt. Do you have any information on that, Mr. Salin-
ger?
Mr. Salinger. What was the question. Senator ?
Senator Mundt. Is Mr. Mannarino a citizen, or was he born in this
country, or do you have anything on his background ?
Mr. Salinger. I do not believe we have that, sir. I will check.
(At this point Senator Curtis left the hearing room.)
Senator Mundt. The Chair has said many times in these hearings
that the one certain way to break up this nationwide syndicate of
crime is to find a way to start deporting the aliens who are so deeply
involved in it. Part of the difficulty is the reluctance of the courts
to act ; part of the difficulty is technicalities in the law.
But I think that the Congress and the courts and the law enforce-
ment officers of this country have a joint responsibility, rather badly
neglected by all three elements, to throw the aliens out who are bring-
ing this foreign type of crime to the shores of the United States.
If these hearings do nothing else, thej^ should certainly tell the
world and the public that all three phases of enforcement, the courts
the enforcement officials, and the Congress, are fumbling the ball while
crime grows worse and worse in this country because of it.
Mr. Salinger. I have the information, Mr. Chairman.
Mr. Mannarino was, according to our information, born in New
Kensington, Pa., where he now resides. He would, therefore, be a
citizen.
Senator Mundt. I will ask you the question again because the courts
have held certainly and clearly that to deny citizenship of the United
States if, in fact, you are a citizen, is not a question on which you can
take tlie fifth amendment, but you can be held in contempt of Con-
gress for not answering.
With that information, I will ask you again: Are you a citizen of
the United States?
Mr. Mannarino. I decline to answer the question on the grounds
it may tend to incriminate me.
18744 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. With the permission of the committee, the Chair
orders and directs you to answer the question specifically asked. Are
you a citizen of the United States ?
Mr. Mannarino. I decline to answer the question on the grounds it
may tend to incriminate me.
Senator Munot. The Chair believe that this testimony should
clearly be sent to the Department of Justice, then, and that the staff
should take the necessary steps to prepare contempt citations against
this witness. Clearly, no court can hold that if a man is, indeed, a
citizen, and is born a citizen, to deny citizenship in this great country
cannot be held to be incriminatory if he admits that he is a citizen.
Senator McClellan ?
First, Mr. Mannarino, do you honestly believe that an answer to
the question of "Are you a citizen of the United States?" would
incriminate you ?
Mr. JVIannarino. I decline to answer the question on the grounds
it may tend to incriminate me.
Senator Mundt. I suggest, Mr. Salinger and Mr. Counsel, that we
have our staff examine the records clearly to determine if, indeed, he
was born in the United States. If he was, this witness must certainly
be held in such clear contempt of the Congress of the United States
that no court can deny that fact.
If a court of the United States starts holding that admission of
citizenship in the United States is incriminatory, we are in a pretty
sorry fix in this country.
Mr. Kennedy. That is all, Mr. Chairman.
Senator Mundt. You are dismissed.
Mr. Kennedy. Mr. Tony Gruttadauro.
Senator Mundt. Will you be sworn ?
Do you solemnly swear that the testimony you are about to give
before this Senate select committee will be the truth, the whole truth,
and nothing but the truth, so help you God ?
Mr. Gruttadauro. I do,
TESTIMONY OF ANTHONY GRUTTADAURO
Senator Mundt. Give your name, your place of residence, and your
occupation for the record.
Mr. Gruttadauro. My name is Anthony Gruttadauro. In refer-
ence to the other two parts of that question, Senator, I plead the fifth
amendment. I refuse to answer on the grounds that my answer may
tend to incriminate me.
Senator Mundt. Do you mean you are not going to tell us where
you live ?
Mr. Gruttadauro. I refuse to answer that question on the ground
that my answer may tend to incriminate me.
Senator Mundt. And you refuse to tell us your occupation ?
Mr. Gruttadauro. My answer is the same.
Senator Mundt. Do you have counsel ?
Mr. Gruttadauro. No.
Senator Mundt. Do you desire counsel ?
Mr. Gruttadauro. I don't believe I need counsel, sir.
Senator Mundt. You are content, then, to answer without counsel ?
IMPROPER ACTrv^ITIES IN THE LABOR FIELD 1S745
Mr. Gruttadauro. Any question that may not tend to incrimi-
nate me.
Senator Mundt. Mr. Counsel ?
Mr. Kennedy. Mr. Chairman, yesterday some question was raised
about ]Mr. Pinelli being identified with prostitution in Lake County.
When a witness takes the stand and refuses to answer questions, the
staff tries to put in information which we have attempted, to the best
of our abiliy, to verify. We can't vouch all the time for its accuracy,
because the witnesses whom we are investigating often will not coop-
erate, will not make any records available.
Senator Mundt. Witnesses have a perfect right to deny any charges
made against them or any implications that appear. There they are;
they are under oath. They talk before the same forum of public
opinion that the committee members act.
The Chair has no sympathy with creatures hiding behind the fifth
amendment who say that their "character" has been soiled by a
question.
Mr. Kennedy. I wanted to make it clear, though, that yesterday,
although we identified Mr. Formusa as operating a house of prostitu-
tion and established that Mr. Pinelli came into Lake County at the
same time Mr. Formusa was operating there, we did not, to my
knowledge, identify Mr. Pinelli himself as operating a house of pros-
titution or being in partnership with a house of prostitution.
The same thing goes for this witness. I agree with you they have
an opportunity to deny these matters before the committee, but I
wanted to make it clear that we were completely fair about it and got
it completely clear in the record.
Mr. Gruttadauro, you are a nephew of Mr. Anthony Pinelli ; is that
correct ?
Mr. Gruttadauro. May I say something, please ?
Senator Mundt. Just a minute. Answer the question that has been
asked, first.
Mr. Gruttadauro. May I please state something ?
Senator Mundt. Not until you answer the question you have been
asked.
Mr. Gruttadauro. Ask me the question.
Mr. Kennedy. You are a nephew of Mr. Pinelli ?
Mr. Gruttadauro. I refuse to answer the question on the grounds
that the answer may tend to incriminate me.
Senator Mundt. You will not be allowed
Mr. Gruttadauro. You referred to me as a creature hiding behind
the fifth amendment. I am not a creature hiding behind the fifth
amendment. I fought for this Constitution and I am taking my
grounds to defend myself.
Senator Mundt. The witness will be quiet.
Mr. Gruttadauro. Be quiet? I am not a creature hiding behind
the fifth amendment.
Senator Mundt. That will be determined by the course of the
hearing.
Mr. Gruttadauro. By these insinuations and allegations?
Senator, I fought 5 years for this country. I have had broken
bones, sweat, and shed blood to protect this Constitution, and I am
going to use it.
18746 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. Are you going to hide behind the fifth amendment ?
Mr. Gruttadauro. I am not hiding. I am using it to defend
myself. These allegations, these insinuations, these reputed facts,
they are all silly. If I think that the fifth amendment is going
to protect me, I am going to use it.
Senator Mundt. Counsel will ask the questions and we will find
out whether or not you are going to answer. We will soon deter-
mine. The course of these hearings will indicate whether you are
hiding behind it.
Mr. Gruttadauro. I am not a creature hiding behind it.
Senator Mundt. And not any excited statements that you are
making.
Proceed.
Mr. Kennedy. Mr. Gruttadauro, will you tell us when the repre-
sentative of our committee came to see you whether you pulled a gun
on him at that time ?
Mr. Gruttadauro. My answer may tend to incriminate me, and I
decline to answer .
Mr. Kennedy. I am sure of that. Isn't it correct that you did
pull a gun on him ?
Mr. Gruttadauro. My answer may tend to incriminate me, and I
refuse to answer. If you was to ask your investigator the reason for
pulling that gun, he might give you the answer.
Mr. Kennedy. You give us the answer. You tell us why you had
a gun in your possession.
Mr. Gruttadauro. Why I had a gun in my possession ?
Mr. Kennedy. Yes. Tell us.
Mr. Gruttadauro. I happened to be part owner of that property,
and that man came to my house at midnight, giving me a phony
telephone call and leaving me under the suspicion that I might be
visited by somebody.
Mr. Kennedy. Who did you think was going to visit you ?
Mr. Gruttadauro. I don't Imow. I pulled a gun to protect my-
self against anything that I think might possibly be wrong.
Mr. Kennedy. Did you think somebody was going to call you?
Mr. Gruttadauro. The investigator will tell you when he identi-
fied himself by name, I put the gmi away and unloaded it in front of
him, telling him he should thank the Lord I recognized him, or other-
wise I would have killed him as an invader.
Mr. Kennedy. Who did you expect was going to come to see you ?
Mr. Gruttadauro. I don't know. At that hour of night, I don't
know what to expect, giving me phony telephone calls, speaking in
broken English. He ought to take elocution lessons. Maybe he can
do better.
Mr. Kennedy. Who called you ?
Mr. Gruttadauro. Mr. McShane.
Mr. Kennedy. What did he say ?
Mr. Gruttadauro. He denied it. And his accent couldn't be de-
nied.
Mr. Kennedy. What happened? Relate to the committee what
happened.
Mr. Gruttadauro. Relate to the committee what happened? He
invaded my house.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18747
Mr. KJENNEDY. How did he invade your house ?
Mr. Gruttadauro. By storming up the stairs when I pulled a gun
on hun to tell him to stop.
Mr. Kennedy. Then what happened ?
Mr. Gruttadauro. Wlien he screamed his name out, "My name is
McShane ; don't shoot," I put it away and told him he should thank
the Lord and go to church that I recognized his name and I didn't
shoot. But I also unloaded that pistol in front of him and put it
away.
Mr. Kennedy. What kind of a pistol was it ?
Mr. Gruttadauro. I don't know what kind of pistol it was. It was
a gmi.
Mr. Kennedy. What kind of a gun do you have ?
Mr. Gruttadauro. What kind of a pistol do I have ?
Mr. Kennedy. Yes.
Mr. Gruttadauro. I have a pistol in my house to protect my
property.
Mr. Ivennedy. What kind of a pistol was it?
Mr. Gruttadauro. It was a pistol ; a revolver.
Mr. IvENNEDY. What kind ?
Mr. Gruttadauro. How do I know ? I don't look at the make.
Mr. Kennedy. How long have you had the pistol ?
Mr. Gruttadauro. I have no idea.
Mr. KJENNEDY. Do you have a permit ?
Mr. Gruttadauro. A permit to protect my property ?
Mr. IvENNEDY. Do you have a permit for the gun ?
Mr. Gruttadauro. To protect my property ?
Mr. ICennedy. Do you have a permit for the gun ?
Mr. Gruttadauro. I don't have a permit and I don't think in the
State of Illinois you need a permit to protect your property.
Mr. Kennedy. Wliere do you live ?
Mr. Gruttadauro. I refuse to answer on the grounds it may tend
to incriminate me.
Mr. Kennedy. He came up to see you, did he ; is that right ?
Mr. Gruttadauro. That is right.
Mr. Kennedy. And this is where you lived, was it ? That is where
he came to see you ?
Mr. Gruttadauro. That is where he came.
Mr. Kennedy. Wliere you live ; is that right ?
Mr. Gruttadauro. That is where he came to see me.
Mr. Kennedy. That is in Illinois ?
Mr. Gruttadauro. Yes,
Mr. Kennedy. What do you do during the day? You stay there
at night. What do you do during the day ?
Mr. Gruttadauro. I refuse to answer on the grounds my answer
may tend to incriminate me,
Mr. Kennedy. "Wliat kind of work do you do ?
Mr. Gruttadauro. I refuse to answer that question also. Counsel.
Mr. Kennedy. Isn't it correct that you were brought down to run
some of the bookie joints for your uncle, Anthony Pinelli ?
Mr. Gruttadauro, I refuse to answer that question also. Senator,
on the same grounds^
Mr, Kennedy,
stance ?
18748 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Grui^tadauro. I refuse to answer that question also, on the
same grounds.
Mr. Kennedy. Have you broken any of the laws of the United
States, Mr. Gruttadauro ?
Mr. Gruttadauro. I refuse to answer that question on the same
grounds.
Mr. Kennedy. When you were fighting for 5 years, I suppose you
were fighting also for the laws of the United States. Have you broken
any of the laws ?
Mr. Gruttadauro. I imagine I broke the law of humanity, trying
to kill other people, protect my country, protect the ideals and the
Constitution which I am now taking refuge behind to protect myself
against self-incrimination.
Mr. Kennedy. Wliat about since you got out of the service ? Have
you broken any laws since then ?
Mr. Gruttadauro. I refuse to answer on the same grounds.
Mr. Kennedy. Have you shot at anybody with a gun since then ?
Mr. Gruttadauro. I refuse to answer on the same grounds.
Mr. Kennedy. Have you killed anybody since you got out of the
service ?
Mr. Gruttadauro. My answer is the same, sir.
Mr. Kennedy. Wliat is that ?
Mr. Gruttadauro. I refuse to answer on the same grounds, that my
answer may tend to incriminate me.
Mr. Kennedy. I am sure of that, too, Mr. Gruttadauro.
Were you employed by the Midwest News ? Wasn't that a horse-
racing wire service in Chicago for a while ?
Mr. Gruttadauro. I refuse to answer that question on the grounds
it may tend to incriminate me.
Mr. Kennedy. Then you were sent down by Mr. Pinelli, your
uncle, to be the bagman for him in Lake County ?
Mr. Gruttadauro. I don't understand that. "Wliat is a bagman ?
Mr. Kennedy. You don't know what a bagman is ? What did you
do in Lake County ? You tell me.
Mr. Gruttadauro. What is a bagman ? You asked me if I was a bag-
man. I asked you what was a bagman.
Mr. Kennedy. You tell me what you did, and I will tell you what
is a bagman.
Mr. Gruttadauro. I refuse to answer that question on the grounds
it may tend to incriminate me.
Mr. Kennedy. Did you go around and make collections for Anthony
Pinelli in Lake County ?
Mr. Gruttadauro. My answer is the same.
Mr. Kennedy. What is that ?
Mr. Gruttadauro. It might tend to incriminate me.
Mr. Kennedy. Your answer might tend ?
Mr. Gruttadauro. Might tend to incriminate me.
Mr. Kennedy. You went around and made collections for him, did
you, at various bookie joints ?
Mr. Gruttadauro. I refuse to answer the question on the grounds
my answer may tend to incriminate me.
Mr. Kennedy. Are you a runner for Pinelli ?
Mr. Gruttadauro. What is a runner ?
Mr. Kennedy. You tell me what you did.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18749
Mr. Gruitadauro. I refuse to answer the question. You are asking
me certain things that I don't know the phraseology of. Would you
please explain what you mean ?
Mr. Kennedy. Did you operate bookie joints in Lake County ?
Mr. GRurrxVDAURO. My answer may tend to incriminate me. I
decline to answer that.
Mr. Kennedy. Did you make any payments to any public officials
in Lake County ?
Mv. Gruitadauro. I decline to answer that on the grounds it may
tend to incriminate me.
Mr. Kennedy'. Did your uncle make any payments to Mr. Holo-
vachka for the operations in Lake County ?
Mr. Gruttadauro. I decline to answer that question on the grounds
it may tend to incriminate me.
Mr. Kennedy. Do you know Mr. Holovachka ?
Mr. Grutttadauro. I decline to answer that question on the same
grounds.
Senator Mundt. Did you make any payments to Mr. Holovachka?
Mr. Gruttadauro. I decline to answer that question, Senator, on
the same grounds.
Mr. Kennedy. Were you a partner in the Glen Park Hunting &
Fishing Club in Gary, Ind. ?
Mr. Gruttadauro. I didn't hear that.
Mr. Kennedy. Were you a partner in the Glen Park Hunting &
Fishing Club in Gary, Ind. ?
Mr. Gruttadauro. I decline to answer that question on the same
grounds, sir.
]\Ir. Kennedy. Weren't you a partner until the State police came
in from outside the county and closed it down ?
Mr. Gruttadauro. I decline to answer that question. The same
gi'ounds, sir.
Mr. Kennedy. You reported income from it each year.
Mr. Gruttadauro. Is that a question or a statement ?
Mr. Kennedy. Would you explain that to us ?
Mr. Gruttadauro. Would you repeat that, please ?
Mr. Kennedy. You reported income frorri it each year. Could
you explain that to us ?
Mr. Gruttadauro. I decline to answer on the same grounds.
Mr. Kennedy, Did you know Joliimy Formusa down there in Gary,
Ind.?
Mr. Gruttadauro. I decline to answer that question on the same
grounds. My answer may tend to incriminate me.
Mr. Kennedy. What dealings did you have with Jolm Formusa?
Mr. Gruttadauro. I decline to answer on the grounds it may tend
to incriminate me.
Mr. Kennedy. Did you Iniow about Jolm Formusa running the
house of prostitution in Lake County ?
Mr. Gruttadauro. I decline to answer that question on the same
grounds.
Mr. Kennedy. Did you clear any of your bookie operations with
him, Mr. Gruttadauro?
Mr. Gruttadauro. I decline to answer that question, also, sir.
18750 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. I^NNEDY. When you went down into Lake County, Ind., did
you bring the gun that you had in Illinois ? Did you bring that down
with you ?
Mr. Geuttadauro. The only time in my life I carried a gun is
when the Government authorized me to walk around with one. That
pistol I own is for the protection of my property in my home.
Mr. I^NNEDY. Did you ever take it outside your home ?
Mr. Gruttadatjro. Never.
Mr. Kennedy. You never took it outside your home ?
Mr. Gruttadauro. Never.
Mr. Kennedy. How long have you had the pistol ?
Mr. Gruttadauro. I decline to answer on the ground my answer
may tend to incriminate me.
Mr. Kennedy. Where did you get the pistol from ?
Mr. Gruttadauro. I decline to answer that question on the same
grounds.
Mr. Kennedy. Where did you buy the bullets for it ?
Mr. Gruttadauro. I decline to answer that question on the same
grounds.
(At this point Senator Curtis entered the hearing room.)
Mr. Kennedy. Would you tell us about the Century Distributing
Co., in Gary, Ind. ?
Mr. Gruttadauro. I decline to answer that question on the same
grounds.
Mr. Kennedy. The Century Distributing Co. mns the jukeboxes,
does it not ?
Mr. Gruttadauro. I decline to answer that question on the same
grounds.
Mr. Kennedy. Were you a go-between between Pinelli and the
Centui-y Distributing Co. ?
Mr. Gruttadauro. Mr. Kennedy, are you insinuating or trying to
insinuate that I am not old enough or capable enough to earn my
own living, that I have to be an errand boy for people or anything?
I don't understand your line of questioning.
Mr. Kennedy. Well, are you an errand boy for Pinelli ?
Mr. GRUTTADAUTto. I am an errand boy for no man.
Mr. I^NNEDY. What do you, then, for a living ?
Mr. Gruttadauro. I decline to answer that question on the grounds
it may tend to incriminate me.
Mr. Kennedy. Were you an errand boy for Mr. Pinelli in the Cen-
tury Distributing Co. ?
Mr. Gruttadauro. I decline to answer that question, also, Counsel.
Mr. Kennedy. Mr. Pinelli would send you down from Chicago, to
handle the paychecks; you would be sent down as an errand boy to
the Century Distributing Co. in Gary, Ind. Is that correct ?
Mr. Gruttadauro. I decline to answer that question, also, on the
same grounds.
Mr. Kennedy. Didn't you bring the checks down from Mr. Frank
Heisler, in Chicago, who' was Mr. Pinelli's accountant? Didn't you
bring the checks down to Gary, Ind.? Wasn't that part of your
service ?
Mr. Gruttadauro, I decline to answer that question.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18751
The Chairman. Were you just a kind of a flunky for that syndicate ?
Is that what you mean ?
Mr. Grattadaubo. If you say so, I imagine so.
The Chairjian. If I say so it is correct? Is that what you said?
Mr. Grattadauro. That isn't what I said. That is what you said.
The Chairman. Wliat do you say ?
Mr. Grattadauro. I refuse to answer on the grounds the answer
may tend to incriminate me.
The Chairman. You won't deny it ?
Mr. Gruttadauko. You are entitled to your opinion, as I am.
The Chairman. I have an opinion, but I asked you if you wanted
to deny it.
Mr. Gruttadauro. I am taking refuge in the fifth amendment be-
cause it protects me like it protects everybody else.
The Chairman. I am giving you an opportunity, if you want to
deny it. If you want to deny it, it is all right with me.
Mr. Gruttadauro. I am 'not denying your opinion; that is your
opinion.
The Chairman. You don't want to answer the question ?
Mr. Grutpadauro. I decline to answer on the grounds it may tend
to incriminate me.
The Chairman. If you wanted to answer, you wouldn't decline to
answer, so you don't want to answer.
Mr. Gruttadauro. That is your opinion.
The Chairman. All right. It is in the record. If you want to
make the record different, answer it. If you don't want to answer it,
you don't want to answer it, and that is the record.
Proceed.
Mr. Kennedy. You are very good on generalities, but when we get
to the particulars, you can't answer any question. Isn't that it?
Wlien I ask you what you do for a living, you won't tell the commit-
tee that?
JNIr. Gruttadauro. Are you making a statement or asking a ques-
tion?
Mr. Kennedy. I am asking what you do for a living.
Mr. Gruttadauro. I decline to answer on the grounds my answer
may tend to incriminate me.
Mr. Kennedy. Do you know George Cvitkovich ?
]\Ir. Gruttadauro. I decline to answer that question, also, on the
same grounds.
Mr. Kennedy. We have an affidavit from him, Mr. Chairman.
Senator Mundt. Do 3^011 want to read it ?
Mr. Kennedy. I would like to read a part of it.
Senator Mundt. You may read excerpts from it. The entire affi-
davit will be placed in the record and marked "Exhibit No. 19."
(Affidavit referred to was marked "Exhibit No. 19" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. It reads as follows :
I, Mr. George Cvitkovich, who reside at 3924 Fern Street, East Chicago, Ind.,
freely and voluntarily make the following statement to LaVern J. Duffy, who has
identified himself to me as a member of the staff of the U.S. Senate Select Com-
mittee on Improper Activities in the Labor or Management Field.
No threats, force, or duress have been used to induce me to make this state-
ment, nor have I received any promise of immunity from any consequences
18752 IMPROPER ACTIVITIES IN THE LABOR FIELD
which may result from submission of this statement to the aforementioned
Senate select committee. From February 1957, to tlie fall of 1957, I was em-
ployed at the Glen Park Hunting and Fishing Club located at 22 East Ridge
Road, Gary, Ind. This lodge was owned by Tony Fensato and Anthony Grutta-
dauro. The club had a racing wire service where the customers made bets on
horses. My duties at the lodge included posting the results from horse races
on a bulletin board. The lodge was closed down in the fall of 1957 by the city
police of Gary, Ind.
Since the latter part of January 1958, I have been employed by the Century
Distributing Co. located in Gary, Ind. I secured my position with tins company
from Anthony Gruttadauro, who is affiliated with Tony Piuelli. My duties
with Century Distributing Co. included making collections on jukeboxes and
changing records at the various locations.
Can you tell us anything about that ?
Mr. Gruttadauro. I decline to answer the question on the grounds
it may tend to incriminate me.
Mr. Kennedy. Is it your brother that works for the Chicago
Barbers Association ?
Mr. Gruttadauro. The same answer. I decline to answer on the
grounds it may tend to incriminate me.
Senator Mundt. Do you know anybody living at 2205 Estes Street,
Chicago, 111.?
Mr. Gruttadauro. I decline to answer that question on the grounds
it may tend to incriminate me.
Senator Mundt. The kind of people living there are the type that
would incriminate you, if you recognized that they lived there?
Mr. Gruttadauro. I decline to answer that question on the same
grounds, Senator.
Senator Mundt. We got that address someplace. I wondered what
kind of folks lived here. I thought maybe they might be good Ameri-
cans, you would be proud to know them. But you want the record
to show that whoever lives at 2205 Estes Street are the type that if
you admitted publicly you knew them you might incriminate your-
self; is that rigm ?
Mr. Gruttadauro. As for the people, I don't know. But for me
to answer that question personally, my answer to that question may
tend to incriminate me, and I decline to answer.
Senator Mundt. Do you know who lives there ?
Mr. Gruttadauro. I decline to answer on the grounds that my
answer might tend to incriminate me.
Senator Mundt. You could be right. I don't know who lives there.
Mr. Gritttadauro. I possibly might be right. They may tend to
incriminate me. I don't know.
Senator Mundt. It could be the wrong kind of people live there.
Mr. Gruttadauro. I didn't say that.
Senator Mundt. But you implied to me.
Mr. Gruttadauro. I am not implying. I am making no implica-
tions. I am taking refuge in the fifth amendment for any question that
I think may tend to incriminate me.
Senator Mundt. You have that right, if you think recognizing the
people who live there might tend to incriminate you, you may take
recourse.
Mr. Gruttadauro. Thank you. Senator. I am glad you appreciate
that fact that I liave that right, because I fought for it.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18753
Mr Kennedy. Were you also a partner of Tom Morgano and Tony
Pinelii in the Stag Club in 1957, or did you just work for them there?
Stag, Inc.? , • T. ^ 1
Mr. Gruttadauro. I decline to answer that question. It may tend
to incriminate me. • v -i t
Mr. Kennedy. Mr. Morgano has been identihed as the individual
who attempted to bribe the officer in Porter County for $100,000, and
stated that he was a representative of the Chicago Syndicate.
So you are involved with those individuals also, are you, Mr.
Gruttadauro ?
Mr. Gruttadauro. Are you asking me ?
Mr. Kennedy. Yes.
Mr. Gruttadauro. I decline to answer on the grounds it may tend
to incriminate me.
Mr. Kennedy. That is all, Mr. Chairman.
Senator Mundt. The witness may stand aside.
Mr. Gruttadauro. Thank you.
Senator Mundt. Call the next witness.
Mr. Kennedy. We expected to have Mr. Kocco Schiralli, Mr.
Chairman. I understand that he still has not appeared. He is the
comptroller in the city of Gary. He was interviewed by Mr. Duffy
and myself out there. He stated that he w^ould appear when the
proceedings began, but about a week ago he took off, and we haven't
been able to locate liim since.
Senator Mundt. He disappeared from Gary ?
Mr. Kennedy. Yes.
Senator Mundt. Is Mr. Rocco Schiralli, the comptroller of the
city of Gary, in the audience ? If he is, come forward.
Mr. Kennedy. He is tlie deputy comptroller.
Could I call his brother, Mr. Peter Schiralli ?
Senator Mundt. Mr. Peter Schiralli.
Be sworn, please.
Do you solemnly swear that the testimony you are about to give
before this Senate select committee shall be the truth, the whole truth,
and nothing but the truth, so help you God ?
Mr. Schiralli. I do .
TESTIMONY OF PETER M. SCHIRALLI
Senator Mundt. Give your name, please, your place of residence,
and your business or occupation.
Mr. Schiralli. Peter Schiralli, 1900 West Eighth Street, Gary,
Ind. I am a jukebox operator and a florist.
Senator Mundt. Do you desire counsel, Mr. Schiralli ?
Mr. Schiralli. No, sir.
Senator Mundt. You are prepared to testify without counsel?
Mr. Schiralli. Yes, sir.
Senator Mundt. All right, Mr. Kennedy, you may proceed.
Mr. Kennedy. First, could you tell us where your brother is?
Mr. Schiralli. No, sir. I don't know.
Mr. Kennedy. He has just disappeared in the last week or so?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. As I said, we had arrangements for him to appear
here before the committee.
18754 IMPROPER ACTIVITIES IN THE LABOR FIELD
You don't know where lie has gone to ?
Mr. ScHiRALLi. No, sir.
Mr. Kennedy. Mr. Schiralli
The Chaieman. Mr. Counsel, may I inquire if a subpena was served
on him ?
Mr. Kennedy. As a public official we didn't serve liim.
The Chairman. In other words, he agreed to appear?
Mr. Kennedy. That is correct.
The Chairman. For that reason, no subpena was served on him ?
Mr. ICennedy. That is correct.
The Chairman. When we trj^ to be courteous and show some defer-
ence to people who are in positions of public trust, I think it is a
pretty rotten reciprocation when they refuse to respond after having
agreed to it. I want the record to show that that is the way we feel
about it.
I direct now that a subpena be issued for him immediately.
Mr. Kennedy. The same situation is true of the justice of the
peace, Slabowiski.
The Chaimvian. He got hurt, didn't he ?
Mr. KJENNEDY. This is another one. - -^ ■.
The Chairman. Issue a subpena for him.
Public officials who refuse to cooperate should have subpenas.
Did he agree to be present, the justice of the peace ?
Mr. Kennedy. Yes.
The Chairman. You sent a wire notifying when to appear?
Mr. Kennedy. Yes.
The Chairman. When they don't show up and you can't find them,
issue subpenas for them.
Mr. Kennedy. Mr. Schiralli, you had some interest, yourself, in
the Century Distributing Co. ; is that correct ?
Mr. Schiralli. Yes, sir.
Mr, Kennedy. How did you become interested in the Century Dis-
tributing Co. ?
Mr. Schiralli. I started working with Kobert Doyle.
Mr. Kennedy. Robert Doyle is the son of Jack Doyle?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. About whom we have had some testimony ?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. Wliat was he doing? You started working with
him in connection with what ?
Mr. Schiralli. Making collections and helping him clean boxes,
change records.
Mr. Kennedy. That was a jukebox company of Mr. Robert Doyle's?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. How had you met Mr. Robert Doyle ?
Mr. Schiralli. I met him at the service station at Jackson's res-
taurant.
Mr. Kennedy. That was at your brother's suggestion that you went
to work with him ?
Mr. Schiralli. Yes.
Mr. Kennedy. Mr. Rocco Schiralli's suggestion ?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. How did you get from there into the Century Dis-
tributing Co. ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18755
Mr. ScHiRALLi. After working with Robert Doyle, I worked with
him approximately 2 months, then they asked me if I would want to
be a partner in the Century Distributing Co.
Mr. Kennedy. Did you put up any money then?
Mr. ScHiRALLi. No, sir.
Mr. Kennedy. Did you talk it over with your brother ?
Mr. ScHiRALLi. Yes, sir.
Mr. Kennedy. And your brother put up the money ?
Mr. ScHiRALLi. He put up the money.
Mr. Kennedy. And the stock was held in your name; is that cor-
rect?
Mr. ScHiRALLi. Part of it was in my name and part of it was in
his name.
Mr. Kennedy. Initially all the stock was in your name, was it
not?
Mr. ScHiRALLi. No, sir.
Mr, Kennedy. Initially, when you first went into the operation ?
Mr. ScHiRALUE. No, sir. Part of it was in his name and part of it
was in my name.
Senator Mundt. Who do you mean by "his name" ?
Mr. ScHiRALLi. My brother's name. Rocco.
Senator Mundt. What year are we talking about ?
Mr. ScHiRALLi. This is about 4 years ago.
Senator Mundt. Roughly 4 years ago ?
Mr. ScHiRALU. Yes, sir.
Mr. Kennedy. Could I call Mr. Duffy? He has the records in
connection with it, Mr. Schiralli. Maybe it will refresh your recol-
lection.
Senator Mundt. You have been sworn in these hearings ?
Mr. Duffy. Yes, sir.
TESTIMONY OF LaVEKN J. DUITY— Resumed
Mr. Kennedy. Would you tell us what the records show as far as
the Century Distributing Co. is concerned ?
Mr. Duffy. The Century Distributing Co. records show that Peter
Schiralli is carried on the books as a 34-pecrent partner currently.
During this period, Peter Schiralli was carried on the books ; Rocco
was not carried on the books.
Mr. Kennedy. Let's go back to the formation of the company.
When was the company formed ?
Mr. Duffy. The company was formed in August 1955.
Mr. Kennedy. Who were the partners then ?
Mr. Duffy. The partners were Mr. Robert Doyle and Mr. Tony
Pinelli.
Mr. Kennedy. Robert Doyle and "tony Pinelli ?
Mr. Duffy. Yes, sir.
Mr. Kennedy. It was a jukebox company ; is that right ?
Mr. Duffy. That is correct.
Mr. Kennedy. We have identified Mr. Robert Doyle. We have, of
course, identified Anthony Pinelli. The ownership changed there-
after?
18756 EVIPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Duffy. In August 1956 Peter Schiralli purchased 5% shares
of stock in his own name, not Rocco Schiralli — Peter Schiralli — for
$6,000.
Mr. Kennedy. Where did that money come from, Mr. Schiralli?
Mr. ScHiR.\LLi. Eocco put that up.
Mr. IvENNEDY. And that money was put up by Rocco Schiralli and
the interest was in the name of Peter Schiralli ?
Mr. Duffy. That is right. We have a photostatic check from
Eocco Schiralli made out to Century Distributing Co.
Mr. Kennedy. What happened thereafter ?
Mr. Duffy. In December 1956, Jack Doyle had then been convicted
for income tax evasion. Bobby Doyle got out of the company. The
interest was sold then to the Schiralli brothei*s. At that time, Eocco
purchased interest in the company for the first time, and was carried
on the books.
Mr. Kennedy. He was carried on the books for the first time?
Mr. Duffy. Yes, sir.
Mr. Kennedy. When was that ?
Mr. Duffy. December 1956.
Mr. Kennedy. So evidently from 1955 to 1956, only your name
appeared on the books.
Mr. Schiralli. That must be right.
Mr. Kennedy. How much was invested at that time ?
Mr. Duffy. $8,500.
Mr. Kennedy. Altogether?
Mr. Duffy. That is right.
Mr. Kennedy. How much interest is that?
Mr. Duffy. 34 percent of the stock.
Mr. Kennedy. In whose name ?
Mr. Duffy. It is all now in Mr. Peter Schiralli's name.
In July of last year, Mr. Schiralli became city deputy comptroller.
At that time he transferred his stock back over to his brother.
JVIr. Kennedy. Have you placed any money in the company, you,
yourself ?
Mr. Schiralli. No, sir.
Mr. Kennedy. So this stock that was purchased by Eocco Schiralli
is now held in your name ; is that correct ?
Mr. Schiralli. Yes.
Mr. Kennedy. At the time that you and your brother became in-
terested in the company, the}- had about 45 locations; is that correct?
Mr. Schiralli. That is right.
Mr. Kennedy. And now you have about 90 locations ?
Mr. Schiralli. About 90.
Mr. Kennedy. And Mr. Rocco Schiralli stated to us, did he not, that
he was brought into the company because of the fact that through
his political influence it was felt he could get some locations?
Mr. Duffy. He admitted that to us in Gary.
Mr. Kennedy. He ran for political office ?
Mr. Duffy. He ran for mayor in 1955 and held the position of
deputy citv comptroller in 1952 and 1953. I believe those are the years.
Is that right?
Mr. Schiralli. I believe that is right.
Mr. Kennedy. Who brings the checks down? Who handles the
checks for the company ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 1 cSTf)?
Mr. ScHiiLVLLi. Nino does.
Mr. Kennedy. Who is Nino ?
Mr. ScHiRALLi. Tony.
Mr. Kennedy. Tony Gruttadauro?
Mr. SciiiRALLi. Yes.
Mr. Kennedy. You call him Nino ?
Mr. SciiiKALLi. Yes.
The CiiAiKJNrAN. Is (hat the witness who just testified ?
Mr. SciiiKALiJ. Pardon ^
The CiiAiUMAN. Is that the witness who just testified i)recediiig you ?
Mr. SciiiRALLi. Yes.
The Chairman. He is the one that delivers the money ?
Mr. Sc:iiiKAELT. lie brino;s the checks down to me.
The Chairman. He brings the cliecks down 'i
Mr. Schiraixi. That is right.
Mr. Kennedy. These are your salary checks ?
Mr. SciiiRALLi. Salary checks and bills.
Mr. Kennedy. And they are brought down from Chicago; is that
correct ?
Mr. ScfURALLi. I believe they are.
Mr. Kennedy. They come from Frank Heisler's ofRce, the account-
ant?
Mr. Schiralli. I believe they arc.
Mr. Kennedy. What about George Cvitkovich? How did he come
to be hired?
Mr. Schiralli. He was bi-ought dowji to me at the office one
morning.
Mr. Kennedy. By whom?
Mr. Schiralli. By Tony.
Mr. Kennedy. Piiielli?
Mr. Schiralli. No. Tony Gruttadauro.
And I w^as told he would help me with the collections and the
operation.
Mr. Kennedy. Did you know him under any other name?
Mr. Schiralli. George Cory.
Mr. Kennedy. Cory ?
Mr. Schiralli. Yes.
Mr. Kennedy. What name was he introduced to you as ?
Mr. Schiralli. George Cory.
Mr. Kennedy. Did you know his name was actually Cvitkovich?
Mr. Schiralli. Not until later ; no.
Mr. Kennedy. Did you ever hear of the Lormar Record Co. ?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. When did you hear about that?
Mr. Schiralli. When Tony Pinejli told me to buy records there.
Mr. Kjsnnedy. Had you formerly obtained your records from some
other source?
Mr. Schiralli. Yes, sir.
Mr. Kennedy. Where had you obtained your records from ?
Mr. Schiralli. I believe we bought some from the Kecord Mart in
Gaiy. I don't recall the other name.
Mr. Kennedy. Now do you buy all your records from the Lormar
Co.?
36751— 59— pt. 53 22
18758 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. ScHiRALLi. We buy most of our records from Lormar.
Mr. Kennedy. And that was at the suggestion of Anthony Pinelli ?
Mr. ScHiRALLi. Yes, sir.
Mr. I^JENNEDT. Did you know Anthony Pinelli's background?
Mr. ScHiRALLi. No, sir.
Mr. Kennedy. Do you know if your brother knew at the time he
became his partner ?
Mr. ScHiRALLi. I don't believe he did, sir.
Mr. I^JENNEDY. Did you Imow that Gruttadauro was operating
handbooks in Gary and Lake County at the time ?
Mr. ScHiRALLi. No, sir.
Mr. IvENNEDY. That is alL
Senator Curtis. What kind of machines are these ?
Mr. ScHiRALLi. Jukeboxes.
Senator Curtis. Music boxes ?
Mr. ScHiRALLi. Yes, sir.
Senator Curtis. They are not gambling machines ?
Mr. ScHiRALLi. No, sir.
Senator Curtis. That is the only type of business you have been
involved in ?
Mr. ScHiRALLi. That is right, sir.
Senator Curtis. You are to be commended here for testifying, par-
ticularly when it involves members of your own family, giving this
committee information.
Mr. Kennedy. I have just one other point.
You also were urged to use the AMI Co. ; is that correct ?
Mr. ScHiRALLi. Well, we started out with AMI Co.
Mr. Kennedy. Did Mr. Pinelli ever speak to you about AMI ?
Mr. ScHiRALLi. We started out from AMI Co. and kept buying
from AMI.
Mr. Kennedy. Did you know of Joey Glimco's interest in AMI at
the time ?
Mr. Sghiralli. No, sir.
Mr. Kennedy. Did you know that the Lormar Distributing Co. is
run by Chuck English and Giancana ?
Mr. Sghiralli. I heard the name Chuck English.
Mr. I^JBNNEDY. Did you know he was a notorious racketeer in
Chicago ?
Mr. Sghiralli. No, sir.
Mr. Kennedy. Where did you hear the name Chuck English?
Mr. Sghiralli. I talked to him once, I believe, when we first bought
records.
Mr. Kennedy. Did you know they were making counterfeit records
there?
Mr. Sghiralli. No, sir.
Mr. Kennedy. That is was a hoodlum-run company ?
Mr. Sghiralli. No, sir.
Mr. KJENNEDY. You didn't know that ?
Mr. Sghiralli. No, sir.
Mr. Kennedy. Thank you very much.
Senator Mundt. Are there any other questions ?
Mr. Kennedy. That is all.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18759
Senator Mundt. The Chair would like to express the appreciation
of the committee to the gentleman for testifying. We have heard so
many fifth-amendment Americans. It is encouraging to hear one
who has the courage to talk.
Call the next witness.
Mr. I^NNEDT. Mr. Harold Zeis and Major Blankenford, from the
State police in Indiana.
Senator Mundt. Do you solemnly swear that the testimony you
are about to give before this Senate select committee shall be the truth,
the whole truth, and nothing but the truth, so help you God ?
Mr. Zeis. I do.
Mr. Blankenford. I do.
TESTIMONY OF HAROLD S. ZEIS AND PAUL BLANKENFORD
Senator Mundt. The gentleman on my left, give your name, your
residence, and occupation.
Mr. Zeis. Harold S. Zeis, 3815 AshboiTi Lane, Indianapolis. My
position is superintendent of the Indiana State police.
Mr. Blankenford. I am Maj. Paul Blankenford, of the Indiana
State police, executive officer. I live at 3310 North Meridian, Indian-
apolis.
Senator Mundt. I take it both of you gentlemen are willing to
testify without counsel ?
Mr. Blankenford. Yes, sir.
Mr. Zeis. Yes, sir.
Mr. KJENNEDY. How long have you been with the State police ?
Mr. Zeis. January 14, 1957.
Mr. Kennedy. What were you doing prior to that time?
Mr. Zeis. Sheriff of Allen County, Ind., for four terms.
Mr. Kennedy. You were what ?
Mr. Zeis. I was the sheriff of Allen County for four terms, and
prior to that a deputy sheriff.
Mr. Kennedy. How long have you been with the State police ?
Mr. Blankenford. I have been 22 years, sir, in the service.
Mr. Kennedy. We have had this testimony in connection with Lake
County, of which you gentlemen are aware.
Over the period of the past 6 or 8 years — perhaps you could testify
to tills better — have there been efforts made to try to clean up the
situation in Lake County ?
Mr. Blankenford. Definitely ; yes, sir.
Mr. Kennedy. At the State level ?
Mr. Blankenford. State level ; yes, sir.
Mr. Kennedy. "VVliat has been the problem or difficulty?
Mr. Blankenford. The problem up in Lake County is one of pros-
ecution, 5is I would word it and summarize it. You have to have the
cooperation of the prosecutor's office in order to prosecute people.
This administration, as other administrations, we have had definite
and specific orders to keep raiding in there, and all the enforcement
measures that we could use.
Mr. Kennfjjy. Has that been the worst county in Indiana?
Mr. Blankenford. Yes, sir.
Mr. Kennedy. There is no other county comparable to it as far as
breakdown of law enforcement ?
18760 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Zeis. No, sir.
Mr. Kennedy. This is the worst situation you have ?
Mr. Zeis. That is right.
Mr. Blankenford. I would agree to that.
Mr. Kennedy. Has it been a situation where you have had diffi-
culty trying to move in there and take any steps because of the fact
that the law enforcement itself, or the lack of prosecution ?
Mr. Blankenford. Lack of prosecution, I think that is the way to
word it, Mr. Kennedy.
Mr. Kennedy'. There has been no cooperation, then, from the pub-
lic prosecutor's office in Lake County ?
Mr. Blankenford. Passive acceptance, I think would be the word
to use ; just passive.
Mr. Kennedys But Mr. Holovachka or his office have not attempted
to take any steps to clean up the situation themselves ?
Mr. Blankenford. That is right.
Mr. Kennedy'. And where you have gone in and exposed some of
these situations, and revealed what is going on, and made arrests,
there has been failure to prosecute in those cases, or passive prosecu-
tion?
Mr. Blankenford. That is right. In other words, you would get a
conviction and it would be a minimum fine, $25 and costs, or some-
thing of that kind.
The Chairman. There was no real effort made by Holovachka, that
prosecutor and his office, to stamp this evil out, to stop it?
Mr. Blankenford. No, sir.
The Chairman. In other words, whenever you went out and
brought somebody in, they gave them the minimum, gave their bless-
ings and told them to go forth and continue. Is that right ?
Mr. Blankenford. That is right.
Mr. Zeis. That is right.
Mr. Kennedy-. So this is also not only the public prosecutor's office, .
but also some of the justices of the peace in front of whom some of
these people are brought ?
Mr. Blankenford. That is right.
Mr. Kennedy'. They just gave a $25 fine and dismiss the case?
Mr. Blankenford. That is it.
Mr. Kennedy'. Isn't it collect that on one occasion when you came
in and made an aiTest, while you were inside making the arrest, or the
representative was inside making the arrest, the city police came along
and pinched your car ?
Mr. Zeis. Yes, sir, a motorcycle officer ticketed one of our cars while
we were making a raid on a bookie.
Mr. Kennedy'. So you have no cooperation at all ?
Mr. Zeis. That is right.
The Chairman. Do you mean a State police car with the identifica-
tion on it ?
Mr. Zeis. It was a plain car, but it was right in the vicinity of where
the officer was working. He knew where
The Chairman. What I am trying to ascertain is did the fellow
who ticketed the car know it was a State police car at the time ?
Mr. Zeis. Well, all of our men were right nearby and they cer-
tainly knew that. They certainly knew the men.
IIVIPROPER ACTIVITIES IN THE LABOR FIELD 18761
The Chairman. In other words, the atmosphere was charged with
State police ; is that right ?
Mr. Zeis. That is right.
Mr. Blankenford. That is correct.
Senator Mundt. Is the gambling and \dce activity in Gary and
Lake County so well concealed and cleverly disguised that you in
your operations have difficulty finding the culprits and making the
arrests ?
Mr. Blankenford. Yes. It is difficult. Like on policies and things,
I would ad lib on that, the operation is clear out, third or fourth
handed.
Senator Mundt. How did you find the bookie that you say you
were trying to raid ?
Mr. Zeis. We had men making surveillances of all of these places,
bringing them in from other parts of the State, men who were not
known in that particular district, and gather evidence.
Senator Mundt. They were strangers in the community ?
Mr. Blankenford. That is right.
INIr. Kennedy. Is it correct that Mr. Holovachka requires that all
prosecutions should be handled through his office ?
Mr. Zeis. In the summer of 1957, they pretty much defied us or
our legality of going in without going through his office to file affi-
davits. We had been going through a JP, a justice of the peace, to
gather our search warrants.
Mr. Kennedy. I didn't quite get that.
Mr. Zeis. We had been going through a justice of the peace to get
our search warrants, after we gathered the evidence. He came out
pretty much in defiance of our legality of operating that way. He
demanded that we go through his office to file all affidavits.
Mr. Kennedy. That makes your operation, of course, almost com-
pletely impossible.
Mr. Blankenford. That is right.
(At this point Senator McClellan withdrew from the hearing room.)
Mr. Kennedy. In answer to Senator Mundt as to whether these
operations are hidden, there certainly is no question at all but what
these operations are taking place in Lake County, Ind.
Mr. Blankenford. No, sir.
Mr. Kennedy. If there was a vigorous law enforcement in Lake
County, you could get these cleaned up.
Mr. Blankenford. That is entirely correct.
Mr. Kennedy. The added problem as far as your group is con-
cerned is going in there and having to get a search warrant from
Metro Holovachka, who has condoned all of these operations?
Mr. Blankenford. That is true. That creates the problem.
Mr. Kennedy. So any prosecution that must be handled must be
handled by Mr. Holovachka. So they frown upon the fact that you
come in there in the first place and certainly you will not get any help
or assistance from the prosecutor's office.
Mr. Blankenford. That is correct.
Mr. Kennedy. So since it is known that this situation, a notorious
situation, exists in Lake County, Ind., although it has been Imown
for a number of years, this has presented the major problem as far
as action being taken at the State level, not only by the present Gov-
ernor but past Governors?
18762 IMPROPER ACTIVITIES EST THE LABOR FIELD
Mr. Blankentord. That is true.
Mr. Kennedy. It is not a partisan matter, but a question of Repub-
licans and Democrats trying to take steps to deal with the situation.
Mr. Blankenford. That is true.
Senator Mundt. Does your office get many complaints from the
good people of Gary, the church leaders, community leaders, school
leaders, members of the chamber of commerce, and so forth, about
conditions in Lake County ?
Mr. Zeis. Yes, sir. The letters are forwarded to our office. Many
complaints.
Senator Mundt. So presmnably there is a considerable body of
people in Gary who would like to clean this up ?
Mr. Zeis. Wlio would like to suppress it ; yes.
Senator Mundt. And who undoubtedly have reported these con-
ditions to the local police officers first, and, not getting the necessary
results, go to the State office ?
ISIr. Zeis. We get the complaints ; yes, sir.
Senator Mundt. This is primarily a job of local enforcement.
Mr. Blankentord. Local enforcement ; yes.
Senator Mundt. They come to you only when conditions get out
of hand, and the indifference of local officials or ineptitude make the
correction impossible?
Mr. Blankenford. That is true.
Mr. Kennedy. Did you receive a report in 1957 that some of these
operations were being conducted by the syndicate out of Chicago?
Did you receive a report in the State police, or any report in connec-
tion with that?
Mr. Blankenford. Yes ; in 1957 we did have a report that had a
tone on it that the syndicate was involved.
Mr. Kennedy. In back of some of these operations ?
Mr. Blankenford. Yes ; that is right.
Mr. Kennedy. That is all, Mr. Chairman.
Senator Mundt. Thank you very much, and good luck to you in
your job.
Mr. Kennedy. Mr. Heisler.
Senator Mundt. Mr. Heisler, come forward.
Be sworn, please.
Do you solemnly swear that the testimony you are about to give
is the truth, the whole truth, and nothing but the truth, so help you
God?
Mr. Heisler. I do.
TESTIMONY OF PRANK J. HEISLER, ACCOMPANIED BY COUNSEL,
LESLIE HALL
Senator Mundt. State for the record your name, address, and present
business or occupation.
Mr. Heisler. My name is Frank J. Heisler. I live at 4725 Beacon
Street, Chicago, 111. I have an off.ce at 4732 Lincoln Avenue.
As to my occupation : I would like to see the record corrected. I
am not a certified public accountant, as stated yesterday. I don't like
to adorn myself with feathers that are not due me. I am an account-
ant. I do work for various business concerns such as systematizing,
serving their accounting s^^stem, filing their tax returns.
IMPROPER ACTWITIES IN THE LABOR FIELD 18763
Senator Mundt. In other words, you are a practicing accountant
butnotaCPA?
Mr. Heisler. That is correct.
Senator Mundt. Do you have counsel representing you ?
Mr. Heisler. I have counsel through my association, the National
Society of Public Accountants, of which I am a member, Mr. Leslie
Hall. I am also a charter member of the Independent Accountants
Association of Illinois.
Senator Mundt. Let me get this straight : You have counsel repre-
senting you, or is he representing the association ?
Mr. Heisler. The Washington office of the National Association of
Public Accountants, of which I am a member, has been kind enough to
refer me to Mr. Leslie Hall for counsel.
Senator Mundt. The Washington office of this association has pro-
vided you with a counsel ?
Mr. Heisler. Has not provided me with one, but has referred me to-
Mr. Leslie Hall.
Senator Mundt. They recommended the counsel to you ?
Mr. Heisler. That is right.
Senator Mundt. But he does represent you ?
Mr. Heisler. That is right.
Senator Mundt. Please give us your name.
Mr. Hall. Leslie Hall, attorney at law, Alexandria, Va.
Senator Mundt. You represent the witness rather than the asso-
ciation ?
Mr. Hall. Yes, sir.
Mr. Kennedy. How long have you been an accountant ?
Mr. Heisler. How long ?
Mr. Kennedy. Yes.
Mr. Heisler. For the last 48 years.
Mr. Kennedy. And you practice in Chicago ?
Mr. Heisler. In Chicago, 111.
Mr. Kennedy. You are the accountant for Anthony Pinelli ; is that
correct ?
Mr. Heisler. Yes ; that is correct.
Mr. Kennedy. And Tom Morgano ?
Mr. Heisler. I represent Tom Morgano in only one enterprise.
That is his pizza concession at the Ricochet Tavern in Indiana.
Mr. Kennedy. The C. «& B. Provision Co. ?
Mr. Heisler. I am the accountant for the C. & B. Provision Co. in
Chicago.
Mr. Kennedy. Who operates that ?
Mr. Heisler. The C. & B. Provision Co. is a copartnership consist-
ing of William Condeux, Carlo Colianni, and James Allegretti.
Mr. IvENNEDY. Who is James Allegretti ?
Mr. Heisler. James Allegretti is a Chicago resident.
Mr. Kennedy. And a well-known syndicate hoodlum; is he not?
Mr. Heisler. Well, according to the papers they apparently are,
Mr. Kennedy. Joe Dote ? Do you handle the work for Joe Dote ?
Mr. Heisler. How do you spell his name, please ?
Mr. Kennedy. D-o-t-e.
Mr. Heisler. D-o-t-e?
Mr. Kennedy. Yes.
18764 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Heisler. He is a partner in Joe's Pizzeria-Tavern on 639 South
Racine Avenue.
Mr. Kennedy. Sam Siano?
Mr. Heisler. Sam Siano is Joe Bote's partner.
Mr. IvENNEDY. You handle work for him, too ?
Mr. Heisler. In the tavern, yes.
Mr. Kennedy. Joe Dote was a business partner, financial partner,
of Mr. Pinelli's, was he?
Mr. Heisler. No.
Mr. Kennedy. Did he loan some money to Mr. Pinelli ?
Mr. Heisler. I don't think he loaned money to Mr. Pinelli.
Mr. Kennedy. To Pinelli's son ?
Mr. Heisler. That is more like it ; yes.
Mr. KJENNEDY. Did he or didn't he ?
Mr. Heisler. According to the checks — I can't answer truly be-
cause I haven't got the books, I never kept the books of the Holly-
wood Motel.
Mr. Kennedy. You kept his books.
Mr. Heisler. Whose books ?
Mr. Kennedy. You know from the records that you have, the rec-
ords that we have reviewed, it shows that he made such a loan. You
are aware of that.
Mr. Heisler. Yes, it is testimony there was a check mentioned of
a repayment of a loan. That is Mr. Dote's personal private affair.
I kept books for a partnership, consisting of Sam Siano and Joseph
Dote.
Mr. Kennedy. Didn't the checks for that partnership come out of
the tavern ?
Mr. Heisler. I don't know.
Mr. Kennedy. Certainly the checks show that when they were
repaid, they were deposited to the tavern, Joe's Town Tavern and
Pizzeria.
Mr. Heisler. Was it a deposit or cash ?
Mr. Kennedy. It is drawn to the order of Sam and Joe's Town
Tavern and Pizzeria. It is endorsed "Pay to the order of National
Bank, Sam and Joe's Town Tavern and Pizzeria."
Senator Mundt. Perhaps if counsel lets the witness see the checks
he can identify them.
Mr. Kennedy. Anthony Gruttadauro; did you handle also finan-
cial transactions for him ?
Mr. Heisler. I handle his income tax returns.
Mr. Kennedy. When we went to obtain the books and records of
Anthony Pinelli from you, you stated you had none at that time;
is that correct?
Mr. Heisler. That is correct.
Mr. Kennedy. Did you ?
Mr. Heisler. No, sir.
Mr. Kennedy. Where were they at that time ?
Mr. Heisler. Mr. Pinelli had requested them before Mr. Duffy
came to me, or Mr. Thiede.
Mr. Kennedy. They had just gone and came back ?
Mr. Heisler. No. 'They were with Mr. Pinelli.
Mr. Kennedy. Were they ever in your possession?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18765
Mr. Heisler. Yes.
Mr. Kennedy. When he came back the second time, they were in
the files ?
Mr. Heisler. Wait. There was only one folder which was in there
for some reason I can't explain, which became mixed up with the
Villa Pizza folder.
Mr. Kennedy. That is Anthony Pinelli's file.
Mr. Heisler. That is true, but I can't help because they were mis-
filed somewhere.
Mr. Kennedy. Did Anthony Pinelli give you instructions that you
weren't supposed to show this ?
Mr. Heisler. No. He gave no instructions.
Mr. Kennedy. He never gave you any instructions ?
Mr. Heisler. No.
Mr. Kennedy. Did your office receive instructions that you were
supposed to show these records to us ?
Mr. Heisler. No, there were never any instructions.
Mr. Kennedy. It was just that you had overlooked the file ?
Mr. Heisler. The file was overlooked because it was in a different
place, in a different cabinet.
Mr. Kennedy. But 3^011 never received instructions from Mr. An-
thony Pinelli or anyone on his behalf not to show anybody this file?
Mr, Heisler. No, sir.
Mr. Kennedy. AVould you examine this record?
Senator Mundt. Who is Gerhard ?
Mr. Heisler. He is my son.
Senator Mtjndt. Is he in the firm with you ?
Mr. Heisler. Yes, sir.
Senator Mundt. We have here an office communication, intraoffice
communication. It says, "To Gerhard," and it is dated January 9,
1959, 3 :55 p.m. : "While you were out" — do you have a little pad like
that in your office ?
Mr. Heisler. Yes.
Senator Mundt (reading) :
While you were out, Mr. Pinelli called to say that we shall never show his
records to anybody, no matter what the party may say, unless he —
underscored twice —
is present. I told everybody in the oflSce already.
That wouldn't quite j ibe with the testimony ; would it ?
Mr. Heisler. I don't know about this memorandum. Is it ad-
dressed to me ?
Senator Mundt. You may examine it.
( The document was handed to the witness. )
Senator Mundt. It is addressed to Gerhard, your son.
(The witness conferred with his counsel.)
Mr. Heisler. Senator, I never saw this memorandum before.
Senator Mundt. It is from the pad in your office, is it not ?
Mr. Heisler. It is.
Senator Mundt. Do you recognize the handwriting ?
Mr. Heisler. Yes.
Senator Mundt. Whose handwriting ?
Mr. Heisler. One of my assistants.
18766 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. One of your sisters ?
Mr. Heisler. One of my assistants.
Senator Mundt. So your assistant undoubtedly gave that to Ger-
hard and he gave the mstructions, but your testimony is that you
knew nothing about it ?
Mr. Heisler. I knew notliing about it.
Senator Mundt. You never heard of it ?
Mr. Heisler. No, sir.
Senator Mundt. The memorandum which the witness has identified
as being part of his office records will be accepted and made exhibit
No. 20.
(Memorandum referred to was marked "Exhibit No. 20" for refer-
ence and will be found in the appendix on p. 18787.)
Senator Curtis. Mr. Chairman, may I inquire ?
Senator Mundt. Senator Curtis.
Senator Curtis. AVere there other records in your office at one time
other than this one folder ?
Mr. Heisler. Yes.
Senator Curtis. So this one folder that you have testified was
misfiled or misplaced, that did not constitute his complete records 2
Mr. Heisler. No, sir.
Senator Curtis. How voluminous were his records ? Many files ?
Mr. Heisler. I would say about one or two full office drawer files.
Senator Curtis. One or two full drawers ?
Mr. Heisler. Yes.
Senator Curtis. And when you were sought out by this committee,
either in an interview or by subpena, did you have the one or two
office drawers of his files ?
Mr. Heisler. I did not have those files any more.
Senator Curtis. Did you have them when you were contacted by
this committee?
Mr. Heisler. No ; I did not have them then.
Senator Curtis. He asked for them before that ?
Mr. Heisler. That is correct.
Senator Curtis. Wlio did he send after them ?
Mr. Heisler. He came himself.
Senator Curtis. Did he carry them out ?
Mr. Heisler. Yes.
Senator Curtis. More than one trip ?
Mr. Heisler. No ; I think it was all one trip.
Senator Curtis. He was able to carry them in one trip ?
Mr. Heisler. Yes.
Senator Curtis. He got them all except this one file that has been
referred to ?
Mr. Heisler. That is correct.
Senator Curtis. That is all, Mr. Chairman.
Mr. Ivennedt. Mr. Chairman, I would like to call a staff member
to explain the situation and what we uncovered in connection with
Mr. Heisler and the lack of cooperation that we had from ]VIr. Heisler.
Mr. Duffy, please.
Senator Mundt. You have been sworn in this hearing ?
Mr. Duffy. Yes, sir.
Senator Mundt. Very well.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18767
TESTIMONY OF LaVERN J. DUITY— Eesumed
Mr. I^^ENNEDY. Mr. Duffy, Mr. Thiede went in to serve a subpena in
the lirst instance; is that correct?
Mr. Duffy. He did.
Mr. Kennedy. Wliat was the date of that ?
jMr. Duffy. February 19, 1959, when Mr. Thiede visited the of-
fice with a subpena duces tecum for certain records.
Mr. Kennedy. Wliat liappened ?
Mr. Duffy. The records requested were all working papers utilized
in the preparation of tax returns, correspondence, ledger accounts,
canceled checks, pertaining to Anthony Pinelli, Joseph D. and Andrew
Gruttadauro, Kocco Schiralli, Pete Schiralli, Eocco Lucas, Century
Distributing Co. of Gary, Ind., for the period January 1950 to the
present.
Wlien these records were requested, Mr. Heisler quickly stated he
had none of these in his possession.
Mr. Kennedy. Then you came back a second time?
Mr. Duffy. Yes. On March 23, 1959, I made a personal visit to
Mr. Heisler's oiiice. I might say the reason I went back was because
I found some correspondence in my files from the Century Distribut-
ing Co. bearing his name, so I thought he should have copies of these
memorandums in his file which I did not fuid, and he said he did not
have, so I wanted to question him on tiiat.
I also had another subpena with me. I wanted additional records
relating to the C. & B. Provision Co., the meat purveyors in Chicago,
run by the notorious hoodlum James Allegretti. At that time, when
I went in there, he said the files were on one side of the room. I
walked over and he said, "If you want to see anything about Mr.
Pinelli's operations, they are over there in that file, the Villa Pizza,
for example."
I went to this file and I found in the bottom drawer the complete
working papers of Mr. Tony Pinelli that we had requested back in
January.
Mr. Kennedy. That we had subpenaed ?
Mr. Duffy. That we had supenaed, that lie had not furnished.
I started picking up the folder and Mr. Pleisler came over to me and
grabbed the folder from my hand and said, "You are not supposed
to see this."
Mr. Kennedy. How do you explain that ?
Mr. Heisler. I did not say that. I had the Villa Pizza records at
that particular time which were no more concern of Pinelli
Mr. Kennedy. We are talking about these records now. That is
why he went in there.
Mr. Heisler. I will lead to it, Counsel, if you will allow me to.
Mr. Kennedy. We have a situation of an investigator going in
there, your telling him that you didn't have the records subpenaed,
and another investigator gong through there several months later in
connection with another matter, gong through the file and finding
these records that we had supenaed originally.
Mr. Heisler. I didn't know I had those records any more. They
were in the wrong file. I can't help that. It is a mistake.
18768 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Kennedy. Then, Mr. Duffy, when you found these records,
he grabbed them from your hand, said you were not supposed to see
them, and then we went through the records and found a note?
Mr. Duffy. That is correct.
Mr. Kennedy. And the note says that they are not to be shown
to anyone?
Mr. Duffy. Not to anyone under any circumstances.
Mr. Kennedy. And that was in the file. The note says that every-
body in the office was informed about it.
Mr. Heisler. I didn't know about it at all.
Mr. Kennedy. You say you didn't know about it ?
Mr. Heisler. I didn't know where that folder was.
Mr. Kennedy. You say you didn't know that you were not supposed
to show us these records?
Mr. Heisler. No, sir.
Mr. Kennedy. Is that correct?
Mr. Heisler. That is correct.
Mr. Kennedy. Yet we find this note in the file itself ?
Mr. Heisler. Mr. Duffy discovered them. I didn't discover them.
Mr. Duffy. I would like to ask why he was so upset when we found
the records, that we weren't supposed to see them.
Mr. Heisler. Because you had asked for the Villa records. You
hadn't asked for Pinelli's records.
Mr. Kennedy. Mr. Heisler, some of these records of Mr. Pinelli
show, for instance, entries for handbook. You knew, then, Mr. Pinelli
was active in handbook ?
Mr. Heisler. Up to 1954 he was.
Mr, Kennedy. And gambling operations ?
Mr. Heisler. That is a handbook.
Mr. Kennedy. That is gambling.
Mr. Heisler. That was 1954. I think handbooking is more of the
activity of an insurance company or an underwriter. Gambling is
the activity of the bettor.
Mr, Kennedy. Did you think he was in the insurance business ?
Mr. Heisler. I didn't think so. But the handbook operation has
some similarity with insurance, taking risks.
Mr. Kennedy. You felt that he was in the insurance operation ?
Mr. Heisler. Not in the insurance operation, but he was taking risks
of somebody else.
Mr. Kennedy. But you knew he was involved in illegal activity,
did you not ?
Mr. Heisler. If you call betting improper activity ; yes.
Mr. Kennedy. Well, it is illegal.
Mr. Heisler. It is legal in Illinois and in Nevada.
Mr. Kennedy. You knew he was operating in Indiana, did you not?
Mr. Heisler. No, sir.
Mv. Kennedy. It is legal to operate a handbook in Illinois ?
Mr. Heisler. It is not.
Mr. Kennedy. Did you report that to the authorities ?
Mr. Heisler. No, sir.
Mr, Kennedy. Well, it is a violation of the canon of ethics as an ac-
countant. You don't have a canon of ethics ?
IMPROPER ACTIVITIES IN THE LABOR FIELD 18769
Mr. Heisler. Yes; we have. You take a bookmaker just by con-
trast, and, of course, he has to pay an income tax on what he makes.
Mr. Kennedy. That is correct.
Mr. Heisler. He is required to withhold from liis employees taxes,
he has to keep books for the preparation of his income tax return. So
the man has to do that, whether it is legal or illegal.
Mr. Kennedy. You are then particij)ating in his illegal activities ?
Mr. Heisler. To the extent of helping him comply with the tax
laws.
Mr,
if I may.
Senator Mundt. I have in my hand a sheet called "Handbook disal-
lowances for the years 1948, 1949, 1950, 1951, and 1952."
Is this part of the records of Mr. Heisler ?
Mr. Ivennedy. Yes.
Senator Mundt. I will pass this to the witness and ask if he identi-
fies that as one of the worksheets from his office.
(The document was handed to the witness.)
Mr. Heisler. Yes ; that is my record.
Senator Mundt. Those entries are in your handwriting, are they ?
Mr. Heisler. They are partially in my handwriting.
Senator Mundt. The witness has identified the document. It will
become exhibit No. 21.
(Papers referred to were marked "Exhibit No. 21" for reference
and may be found in the files of the select committee.)
Mr. Kennedy. Here we have a document that says
Mr. Heisler. Can I identify that piece of paper, the one that we
just identified, what the purpose of it was?
Mr. I^nnedy. Wliat ?
Mr. Heisler. What the purpose of the worksheet is or was.
Senator Mundt. You want to make a statement about this ?
Mr. Heisler. Yes.
Senator Mundt. Go ahead.
Mr. Heisler. This is the result of the investigation of Mr. Pinelli
from 1948 to 1953. He was checked by the special agents in regard
to his income for those years. The special agents made a very thor-
ough investigation about his net worth position, his activities, his
investments, to tie it up with stating his income.
This investigation came to naught. It was then referred back to
an audit revenue agent for ordinary, routine adjustments. At that
time there was a decision by one court that disallowed rent and wages
of a boolonaker in such States as betting or handbooking was illegal.
That is a computation of what the tax would have entailed had
that decision not been set aside by the Supreme Court. The investi-
gation was concluded in the ordinary revenue agent's office, with
adjustments made. There was no jiegligence penalty invoked.
We have a full investigation for the following 3 years, on which
we received the following letter: It is dated January 12, 1959, ad-
dressed to Mr. Anthony and Mrs. Madeline Pinelli, care of
Mr. Kennedy. Summarize the situation.
Mr. Heisler. It is very short.
We have received the returns of 1954, 1955, and 1956. Our recent examina-
tion of your tax liability for the years indicated above discloses that no change
is necessary
18770 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Mundt. This sheet has to do with 1948, 1949
Mr. Heisler. Subsequent to that investigation we had another 3
years that we went through, subsequent to that. If you will allow me
to, I would like to place this into the record.
Senator Mundt. I don't see that it has any pertinency. It deals
with altogether diiEferent years.
Mr. Heisler. Can we place that photostatic copy of the Treasury
Department letter in the record ?
Senator Mundt. If you have read it, it is in the record. But it has
nothing to do with the sheet in my hand because it deals with a
different set of years altogether.
Mr. Heisler. Different years ; yes.
Mr. Kennedy. Then we have the April 2, 1958, letter to Anthony
Pinelli:
The proposed assessments with penalty and interest would have amounted
to a substantial figure, which I knew you would have objected to. This had to be
submitted to Revenue Agent Stogler's superior, and I had hoped that a further
adjustment would be allowed. At this point it appears that the Department
is tired of the long-drawn-out affair and wants to dispose of it as soon as
possible.
Why did you have to go to the revenue agent's superiors in
connection with that ?
Mr. Heisler. I think the revenue agent should have made further
concessions.
Mr. Kennedy. He didn't do it, so you went to his superiors ?
Mr. Heisler. I didn't. I went to the intelligence man.
Mr. Kennedy. Who were the superiors that you talked to ?
Mr. Heisler. I couldn't go to his superior. His superior had let me
know that it was no change.
Mr. Kennedy. Who was his superior ?
Mr. Heisler. I had requested the special agent.
Mr. Kennedy. Who was the superior ?
Mr. Heisler. I don't know.
Mr. Kennedy. You said he turned you down. Who was it?
Mr. Heisler. This is a wrong phraseology, perhaps. We had a
conference with Mr. Selinski, who was the special agent on the case-
Mr. Kennedy. Who was the superior that you said you were going
to talk to?
Mr. Heisler. I didn't talk to his superior.
Mr. Kennedy. You never talked to his superior ?
Mr. Heisler. No, sir.
Mr. Kennedy. You just told me that the superior turned you:
down, so you went to the special agent.
Mr. Heisler. He turned me down through Mr. Stogler.
Mr. Kennedy. Who did you talk to when he turned you down?
Mr. Heisler. He turned down the request which Mr. Stogler re-
layed for me.
Mr. Kennedy. "V^^io did he talk to ?
Mr. Heisler. To his superior.
Mr. Kennedy. Who is he ?
Mr. Heisler. I don't know.
Mr. Kennedy. Then that letter is not accurate ?
Mr. Heisler. It is not accurate ; no.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18771
Mr. I\JENXEDY. Here is another document: "Additional Tax Due to
Adding $20,000 to Income." What does that mean? Why were you
adding $20,000 to the income?
JSIr. Heisler. Each taxpayer has to estim,atc his income for the year
on April 15 of each year, and has to
Mr. Kennedy. Then the next document. "Estimate of $7,000 for
Wager Profit." How did you get that figure ?
Mr. Heisler. Well, it is probably a figure that Mr. Pinelli men-
tioned to me.
Mr. I^NNEDY. Was it a figure that he mentioned ?
Mr. Heisler. I would think so.
Mr. Kennedy. Can we have these documents identified, Mr.
Chairman ?
Senator INIundt. This document is headed "Anthony Pinelli, Addi-
tional Tax Deficiency Due to Disallowance for Rents and Wages on
Handbook Operations, Correction of Partnership Income."
This is additional tax due on adding $20,000 to income.
I will pass these to the witness and ask him to identify them as rec-
ords from his office, if he can do so.
(The documents were handed to the witness.)
Senator Mundt. Do you identify those as records from your office?
Mr. Heisler. Yes, I do.
Senator Mundt. In your own handwriting ?
Mr. Heisler. In my own handwriting.
Senator Mundt. They will be made exhibits 22-A and 22-B.
(Docum,ents referred to were marked "Exhibits 22-A and 22-B'^
for reference and may be found in the files of the select conmiittee.)
Mr. Heisler. One is in my assistant's handwriting, but that is all
right.
Mr. Kennedy. Did you handle the affairs of Mr. Giancana at all ?
Mr. Heisler. The affairs of who ?
Mr. Kennedy. Giancana, Mooney Giancana.
Mr. Heisler. No.
Mr. Kennedy. Tony Accardo ?
Mr. Heisler. No.
Mr. Kennedy. I might call your attention to professional ethics of
public accounting, page 49. It says :
Client in an illegal business. There is no specific rule of conduct which would
apply to the question of whether an accountant auditing the books and pre-
paring tax returns for illegal businesses would be considered an ethical prac-
titioner, but in the opinion of the committee, it might bring the accountant into
disciplinary proceedings under rule 4 of the conduct of the institute ; and also
might bring charges under title V of the institute which deal with acts dis-
CTeditable to the profession.
This shows clearly that you knew that the operations of Mr. Pinelli
and others were illegal.
Senator Curtis. I would like to ask counsel for the witness some-
thing, if he is prepared to answer.
Do you know whether it is unlawful for an accountant to prepare
a tax return where the income was derived in an unlawful manner,
assuming that the tax return is regular ?
Mr. Hall. In my opinion, it is not unlawful, Senator.
18772 IMPROPER ACTIVITIES IN THE LABOR FIELD
Senator Curtis. I think there are some questions of public policy
that are quite important. Certainly everybody should pay their taxes.
The fact that it is ill-gotten gain should not make it tax exempt.
Mr. Hall. That is the way I understand it.
Senator Curtis. Neither could you exempt a taxpayer on the
ground that he personally couldn't make out his tax return. I am
not excusing or approving or disapproving this witness. I don't
know enough about it. But the question occurred in my mind both
as to the law and the inference, whether or not an accountant, in his
duties
Mr. Hall. I don't know anything about the ethics of that particular
profession. I think I do know something about the ethics of the
legal profession. But as far as an accountant is concerned, I couldn't
answer that.
Senator Curtis. But there would be very definitely a line drawn
between services preparing the tax return after the happening and
a participation in setting up books for an unlawful operation?
Mr. Hall. I would think so ; yes.
Mr. Kennedy. This gentleman was keeping the books for some of
these operations.
Senator Curtis. That is all.
Mr. Kennedy. Tliat is all.
Senator Mundt. The witness may step aside.
Call the next witness.
Mr. Kennedy. Mr. Aliotta.
Senator Mundt. Do you solemnly swear the testimony you are
about to give will be the truth, the whole truth, and nothing but the
truth, so help you God ?
Mr. Aliotta. I do.
TESTIMONY OF FRANK ALIOTTA, ACCOMPANIED BY COUNSEL,
JOE BULGER
Senator Mundt. State your name, address, and occupation for the
record.
Mr. Aliotta. Frank Aliotta, 177 Michael Jolm, Park Ridge, 111.
Senator Mundt. Wliat is your occupation ?
Mr. Aliotta. I am secretary-treasurer. Master Barbers Association,
in Chicago.
Senator Mundt. Are you accompanied by coimsel of your own
choosing ?
Mr. Aliotta. Yes.
Senator INIundt. All right. Do you care to identify him or let him
identify himself ?
Mr. Aliotta. Mr. Joe
Senator Mundt. Would you identify yourself ?
Mr. Bulger. My name is Joe Bulger, of the Chicago bar, 188 West
Randolph Street.
Mr. Kennedy. You have been with the Master Barbers Association
for how long ?
Mr. Alioitta. About 14 years.
Mr. Kennedy. You were a barber prior to that time ?
Mr. Aliotta. Yes.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18773
Mr. Kennedy. For how long ?
Mr. Aoo^rTA. All my life, since I was 16.
Mr, Kennedy. The what ?
Mr. Aliotta. Since I was 16 years old.
Mr. Kennedy. What is the purpose of the Master Barbers Associa-
tion?
Mr. Aliotta. The Master Barbers Association is an organization
to look after the interest of the shopowner, to negotiate contracts
between the union and the master barbei-s, and to have good relation-
ships among the members, to promote legislation which would be
beneficial to the industi*y.
Mr. Kennedy. Could you tell us — you have special investigators
that have served for the Master Barbers Association, have you not?
Mr. Aliotta. Yes, we have.
Mr. Kennedy. What do they do ?
Mr. Aliotta. Their duty is whenever there is a complaint from a
member — for instance, members complain that a journeyman is de-
manding more wages than due him, or he has took a day or 2 days
off, and that there is a conflict between the shopowner and the jour-
neyman. Therefore, someone is sent to try to make adjustments in
the matter.
And again, it may be the case that some shopowner, perhaps be-
cause of jealousy, reports one of his neighbors of a certain violation.
In order to maintain amity and good relationsliips among the mem-
bers, somebody goes over there.
Mr. Kennedy. These people keep peace and harmony in the in-
dustry, the special investigators ?
Mr. Aliotta. Yes, sir.
Mr. Kennedy. Keep peace and harmony in the barber industry in
Chicago and the Chicaj^o area?
Mr. Aliotta. Yes, sir.
Mr. Kennedy. Do you know Anthony Pinelli ?
Mr. Aliotta. I know the man about 30 years ago. I met him.
Mr. Kennedy. You have known him for about 30 years ?
Mr. Aliotta. I met him about 30 years. I have not seen him in the
last 10 years.
Mr. Kennedy. You have not?
Mr. Aliotta. No, I have not.
Mr. Kennedy. He was president of a lodge ; is that correct ?
Mr. Aliotta. That is right.
Mr. Kennedy. From 1930 to 1942 ?
Mr. Aliotta. That is right. He was president of a lodge and I
was introduced to him occasionally.
Mr. Kennedy. I would like to call a couple of witnesses to put in
the names of these investigators.
Senator Mundt. Stand and be sworn, please.
Do you solemnly swear that the testimony each of you is going to
give will be the truth, the whole truth, and nothing but the truth, so
help you God?
Mr. Schtjltz. I do.
Mr. GoTSCH. I do.
56751— 59— pt. 53 23
18774 IMPROPER ACTIVITIES IN THE LABOR FIELD
TESTIMONY OF CARL M. SCH¥LTZ AND GERALD G. GOTSCH
Mr. KJENNEDT. We will have to move along. We will see if we
can't expedite this matter.
You both are from the General Accounting Office; is that correct?
Mr. ScHULTz. Right.
Mr. GoTscH. That is correct.
Mr. Kennedy. You have been with the General Accounting Office
for how long?
Mr. ScHULTz. I am Carl Schultz, resident of Chicago, 111. I have
been with the General Accounting Office for 10 years, and with the
committee from its inception.
Mr. GoTSCH. My name is Gerald Gotsch, resident of Chicago. I
have been with the General Accounting Office for 3 years.
Mr. Kennedy. You have been with the committee off and on since
its inception?
Mr. GoTscH. That is right.
Mr. Kennedy. Have you made a study of those who worked for the
Master Barbers Association as investigators?
Mr. Schultz. We did, sir; yes.
Mr. Kennedy. Have you found a number of them have criminal rec-
ords and criminal associates?
Mr. Schultz. A good number. Out of 11, 7 had criminal records.
Mr. Kennedy. For instance, Mr. George Dicks. Was he a special
investigator ?
Mr. Schultz. George Dicks was a special investigator and still is
today.
Mr. Kennedy. He was put on in 1955 ?
Mr. Schultz. January 1, 1955 ; yes, sir.
Mr. Kennedy. And he is still a special investigator?
Mr. Schultz. That is true.
Mr. Kennedy. How much money has he received ?
Mr. Schultz. Through the year of 1958, he was paid $35,876.60.
Mr. Kennedy. How many times has he been arrested ?
Mr. Schultz. From a very official source, we know that there were
about 300 arrest tickets on him at one time, or in existence in the
city of Chicago.
Mr. Kennedy. I might say, Mr. Chairman, that is the record as
far as this coimnittee is concerned.
Senator MuNDT. 300?
Mr. Schultz. That is right.
Senator Mundt. What would be the nature of these arrests or
tickets ? Were they like traffic tickets ?
Mr. Schultz. Most of those are vagrancy tickets, which are not
posted, but they are kept and maintained.
Mr. Kennedy. But he has been convicted, for instance, of petty
larceny, interstate theft of radios valued at $5,400. Is that right ?
Mr. Schultz. That is right.
Mr. Kennedy. How many convictions has he had ?
Mr. Schultz. He was sentenced to the Federal penitentiary for
that offense and then prior to that, in 1936, he was sentenced to 1
year for petty larceny.
Mr. Kennedy. So he has had two convictions of felonies ?
Mr. Schultz. That is true.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18775
Mr. Kennedy. He is a special investigator and received some $35,-
000; is that right?
Mr. ScHULTz. That is true.
Mr, Kennedy. He was involved or arrested in connection with
Frank Zizzo?
Mr. ScHULTz. Yes, he was.
Mr. Kennedy. And Frank Zizzo was also a special investigator?
Mr. ScHULTz. That is right. At the time of his arrest with Frank
Zizzo, he gave his occupation to the police as that of a bartender
and not that of being associated with the Barbers Association.
Mr. Kennedy. Mr. Dicks also attended the funeral of Claude
Maddox, did he not ?
Mr. ScHULTz. Yes, sir.
Mr. Kennedy. And he has a reputation of a killer in the Chicago
area?
Mr. GoTSCH. That is right, Mr. Kennedy.
Mr. Kennedy. The worst possible reputation ; is that correct ?
Mr. GoTscH. I would say so.
Mr. Kennedy. Mr. Frank Zizzo, who appeared here and took the
fifth amendment, was he also a special investigator for the Chicago
Barbers Association ?
Mr. GoTSCH. Yes, sir. He started on January 1, 1955.
Mr. Kennedy. Plow much money did he receive ?
Mr. GoTSCH. He had been paid through 1958, $19,441.60.
Mr. Kennedy. "Wliat is his background and reputation? He was
brought in to conduct some of the operations for Anthony Pinelli in
Lake County?
Mr. GoTscH. That is correct.
Mr. Kennedy. And he has been arrested a half dozen times?
Mr. GoTSCH. Eight, sir.
Mr. Kennedy. For gambling and fencing jewelry; is that right?
Mr. GoTSCH. That is right, sir. He was a fence in a jewel robbery.
Mr. Kennedy. The arrests start in 1947 and go to 1955 ?
Mr. GoTscH. That is right.
TESTIMONY OP FRANK ALIOTTA, ACCOMPANIED BY COUNSEL,
JOE BULGER— Resumed
Senator Curtis. Do you personally know all of these investgators ?
Mr. Aliotta. What I heard today astounds me. It is all news to
me.
Senator Curtis. That isn't what I asked you. I say, do you per-
sonally know them?
Mr. Aliotta. Personally, no. They come once a week. They get
in contact with the other business agent. They transact their busi-
ness.
Senator Curtis. But you know them ?
Mr. Aliotta. Yes, just know them by talking to them.
Senator Curtis. But you would know them if you saw them ?
Mr. Aliotta. In other words, I do not associate with them.
Senator Curtis. You would know them if you saw them ?
Mr. Aliotta. I would know them if I saw them ; yes.
Senator Mundt. Did you employ them ? Did you give them their
jobs?
18776 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. Aliotta. Somebody recommends them. They come before the
board, they interview them. Somebody said, "Well, let's give him a
chance. Let's see how the goes," and they get the job. But I don't
know one thing.
Senator Curtis. Who pays them ?
Mr. Aliotta. The treasurer. The checks are made up by order of
the board of directors when they are on the payroll.
Senator Curtis. Are there any vouchers signed ?
Mr. Aliotta. Checks.
Senator Curtis. Do you sign those ?
Mr. Aliotta. The checks ? I sign the checks.
Senator Curtis. You have been signing checks for these fellows?
Mr. Aliotta. Yes, yes. I don't know about this ; what is going on.
Senator Curtis. Who supervises his work ?
Mr. Aliotta. Well, they call every Wednesday.
Senator Curtis. Call who?
Mr. Aliotta. In other words, they call at the office every Wednesday.
Senator Curtis. Your office ?
Mr. Aliotta. Yes.
Senator Curtis. Who do they talk to there ?
Mr. Aliotta. They talk to Ihe business agent, and whenever they
need help to make an investigation they go together, and the following
week they make the report. This fellow, I think, has been out of the
organization for 5 years. He quit or something, I guess.
Mr. Ejennedy. Do you find they are able to bring peace in the organi-
zation ?
Mr. Aliotta. So far I have no complaint. If there has been any
complaints — may I ask if they have been arrested since they have been
our employees ? I would like to satisfy myself.
Senator Curtis. What is the answer ?
Mr. GoTSCH. Mr. Moretti, for example, has been. He was arrested
as recently as this year.
Mr. Kennedy. Have you ever had any trouble with the union ?
Mr. Aliotta. No. We have been trying through the help of the
Government to transact such agreement, conciliate and arbitrate our
differences
Mr. Kennedy. And these people help you?
Mr. Aliotta. These people here ? No ; they are not members of the
board of directors.
Mr. Kennedy. But they help in any union problem ?
Mr. Aliotta. Well, whatever there is, a dissension. They are trying
to bring about harmony.
Mr. Kennedy. You find that they are very good in bringing harmony
in Chicago?
Mr. Aliotta. I find it so far or else they wouldn't be there. They
would be discharged.
Mr. Kennedy. They have been very effective in bringing harmony ?
Mr. Aliotta. They have been doing good work or we would hear
about it.
Mr. Kennedy. Mr. Zizzo — has he been convicted on any of these
charges ?
Mr. GoTSCH. Yes, he was, Mr. Kennedy, and given probation.
Mr. Kennedy. What was that ?
Mr. GoTSCH. 1957.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18777
Mr. ICennedy. Fencing $68,000 worth of jewelry ?
Mr. GoTSCH. That is right.
Mr. IvENNEDY. He has received $19,000.
Then we have Sam Ventura ?
Mr. GoTSCH. That is right, sir. He was employed between January
1, 1954, and December 31, 1955.
Mr. Kennedy. How much money did he receive ?
Mr. GoTSCH. He received $8,878.80.
Mr. Kennedy. And he had been arrested and convicted with An-
thony Pinelli in connection with the illegal manufacture of whisky;
is that right?
Mr. ScHULTz. That is right.
Mr. Kennedy. That was in 1942 ?
Mr. GoTSCH. Right, sir.
Mr. I^JENNEDY. And he has been associated with Anthony Pinelli
down in Lake County, according to the testimony before our com-
mittee ?
Mr. GoTSCH. That is right, sir.
Mr. Kennedy. How about Peter Serio? Does he have a police
record ?
Mr. GoTSCH. Yes, sir; he does.
Mr. Kennedy. How many times has he been arrested ?
Mr. GoTSCH. It is quite numerous, sir.
Mr. ScHULTZ. At least six times.
Mr. Kennedy. How manv times has he been convicted ?
Mr. ScHULTZ. He was fined $50 and costs in 1923. Then in 1933
he was held by the U.S. marshal, and 1941 he was sentenced to the
Federal Penitentiary at Terre Haute, Ind., for a bootlegging charge.
Mr. Kennedy. In 1923 he was convicted, convicted again in 1931,
and convicted in 1941 ?
Mr. ScHULTZ. That is correct.
Mr. Kennedy. How much money has he received ?
Mr. ScHULTZ. A total salary of $24,467.67.
Mr. Kennedy. And he has been identified as attending the funeral
of Louis Campagna ?
Mr. ScHULTz. That is right.
Mr. Kennedy. And Tom Morgano, the one identified as offer-
ing the bribe in Porter County, was he also on the payroll ?
Mr. GoTsciT. He started January 1, 1950, and worked until De-
cember 31, 1954.
Mr. Kennedy. How much money did he receive ?
Mr. GoTSCH. $29,050.
Mr. Kennedy. We have heard about him. He has a large number
of arrests and several convictions, does he not ?
Mr. GoTSCH. Right, sir.
Mr. Kennedy. We have gone into his operations. Wliat about
Carlo Colianni?
Mr. GoTSCH. He was employed on January 1, 1950, and still works
there. That is, for the association.
Mr. Kennedy. And he is a partner, is he not, in the C. & B. Meat
Purveyors ?
Mr. GoTSGH. With James Allegretti.
Mr. Kennedy. And that operation has already been identified be-
fore the committee ?
18778 IMPROPER ACTIVITIES IN THE LABOR FIELD
Mr. GoTSCH. Eight, sir.
Mr. Kennedy. He also has business interests with Anthony Pinelli
in the North Side Grape Distributors ?
Mr. GoTSCH. Yes.
Mr. Kennedy. How much monev has he received ?
Mr. GoTSCH. $67,417.40.
Mr. KJENNEDY. Does he keep pretty good harmony there in Chi-
cago?
Mr. Aliotta. He never tried to shirk his duty and he never started
any trouble. Harmony is what we want and that is what those fel-
lows have been trying to do, and they have done.
Mr. KJENNEDY. I will bet they have.
Mr. Aliotta. If those fellows who are there are what these allega-
tions are, I am sure somebody has to quit or I will quit.
Mr. I^NNEDY. How about Sam Moretti ?
Mr. GoTSCH. Yes, sir. His employment began on April 1, 1957.
For the years of 1957 and 1958 he has received $16,199.20.
Mr. Kennedy. And is he still on the payroll ?
Mr. GoTSCH. That is correct, sir.
Mr. Kennedy. Isn't it correct that he was booked at the 35th Dis-
trict Police Station in Chicago, 111., on May 7, 1959, for assault with
intent?
Mr. GoTSCH. That is right.
Mr. Kennedy. And isn't it correct that the charge was later re-
duced to assault and battery, but there is a warrant outstanding for
his arrest ?
Mr. GoTSCH. Yes.
Mr. Kennedy. Does he show up at your office every Wednesday ?
Mr. Aliotta. Yes.
Mr. Kennedy. The police might go over there and pick him up,
then.
Mr. ScHULTz. It might be added that at the time of his arrest, he
also said he was a bartender and didn't claim any association with
the Master Barbers.
Mr. Kennedy. How about Joseph Gruttadauro ?
Mr. GoTSCH. He began his employment on January 1, 1958, and
that year earned $4,870.10. He is currently employed there at a sal-
ary double, in March 1959, from $350 a month to $700.
Mr. Kennedy. So the ones that have records are Carlo Colianni,
George Dicks, Frank Zizzo, Pete Serio, Tom Morgano, Joseph Grut-
tadauro, and Anthony Gruttadauro. He was on the payroll for a
short time.
Mr. GoTscH. He was on and they crossed his name off. Appar-
ently he was not paid, but he was on the payroll records of the
association.
Mr. ScHULTz. He may have been paid in cash, but not in check.
Mr. Kennedy. Those people are all close associates of Anthony
Pinelli ?
Mr. ScHULTz. They are.
Mr. Kennedy. How much did the special investigators receive from
1949 to 1958? I understand there are three others who don't have
records, is that right, or are there that many ?
Mr. GoTSCH. Joseph Gruttadauro does not.
IMPROPER ACTIVITIES IN THE LABOR FIELD 18779
Mr. Kennedy. Well, records or associations.
Mr. ScHULTZ. That is right.
Mr. IvENNEDY. Are there individuals who are working as special
investigators who do not have records or who are not associated ?
Mr. GoTSCH. Yes, sir.
Mr. Kennedy. Well, we don't have to put their names in, but how
many of them are there ?
Mr. GoTSCH. Three.
Mr. Kennedy. From the period 1949 to the present?
Mr. GoTSCH. Yes.
Mr. Kennedy. They have had 11 special investigators
Mr, GoTSCH. I am soriy. It is four. Seven out of eleven have
records ; four do not.
Mr. Kennedy. Have records or have associations ?
Mr. GoTSCH. Have records. Eight out of the eleven have associa-
tions and records.
Mr. Kennedy. And seven have records ?
Mr. GoTSCH. That is right, sir.
Mr. Kennedy. How much did these special investigators, all of
them, receive from 1950 to the present time ?
Mr. SciiULTZ. $224,282.63.
Mr. Kennedy. The seven that have records, can you give us roughly
how much they received ?
Senator Mundt. Let them tabulate it and put it into the record at
this point, if it requires additional computations.
(The material to be furnished follows :)
Colianni $67, 417. 40
Dicks 35, 876. 60
Moretti 16, 199. 20
Morgano 29, 050. 00
Serio 24, 467. 60
Ventura 8, 878. 80
Zizzo 19, 441. 60
Total 201, 331. 20
Mr. Kennedy. That is all.
Senator Mundt. You may step aside.
Mr. Kennedy. Thank you, Mr. Aliotta.
Mr. Aliotta. Thank you, sir.
Senator Mundt. Inasmuch as this concludes this portion of the pro-
ceedings, I will read this statement of Senator McClellan :
The committee today concludes its hearings into activities in Lake County, Ind.
This hearing has unfolded a story which serves to illustrate the disastrous
consequences for a community which allows itself to come under the control of
corrupt elements.
As the testimony clearly showed. Local 1 of the Coin Machine and Repairmen's
Union was gradually forced out of business through the operations of illegal
pinball machines controlled by two major syndicates which the testimony strongly
indicates were under the protection of the Lake County prosecutor's oflSce.
Mr. Metro Holovachka, while prosecutor of Lake County, obviously aided and
abetted these two pinball syndicates to achieve a monopoly in this field in the
Lake County area. There can be no doubt that his office was used to force inde-
pendent pinball operators out of business in order to assure the success of the
syndicate's control by Mr. Welboum and Mr. Sohacki and Mr. Schaefer and
Mr. McDonald.
18780 IMPROPER ACTIVITIES IN THE LABOR FIELD
The stubborn refusal of Mr. Holovachka to cooperate with this committee, I am
convinced, is a clear violation of his trust as a public official. His most peculiar
attitude and conduct, and his testimony before the committee, can lead to no
other logical inference than that he was an operating part of the criminal
syndicate which conducted vice and gambling in Lake County, Ind.
It is historic that where law enforcement falls down it is an open invitation to
hoodlums and racketeers to move in and operate. That this occurred in Lake
County, Ind., is clear from the evidence, in relation not only to the pinball syndi-
cate, but also in connection with the activities of such Chicago syndicate-backed
hoodlums as Anthony Pinelli, John Formusa, and Frank Zizzo.
The brazen efforts of the Chicago syndicate to further expand its activities
into Porter County, Ind., through an attempted bribe of a public official is
another indication of the consequences of unchecked gambling and vice operating
under the protection of corrupt public officials.
It is to be hoped that the disclosures made by the committee in the course of
this series of hearings will prompt and encourage the good citizens of Lake
County, Ind., to take appropriate and effective action to rid their community of
these elements, including the removal and replacement of those public officials
who have been unfaithful to their trust and responsibility.
That concludes the statement by Senator Jolin McClellan, and the
acting chairman who would certainly like to associate himself with
the hope that the good people of Indiana, especially of Lake County
and Gai-y, take the action which is clearly indicated, to rid their area
of this pestilence.
Are there any other comments ?
Mr. Kennedy. I just want to thank, on behalf of the committee, the
investigators who participated in the investigation: Mr. LaVern J.
Duffy, Mr. James J. P. McShane, Mr. John J. Thiede, Mr. Carl M.
Schultz, :Mr. Gerald Gotsch, Miss IMildred Thomas, and Miss Ethel
Appel, who worked extremely hard in Gary, Ind.; Mr, Theodore
Simon, Mr. Jolin D. Williams, Mr. James F. Mundie, and Mr. Pierre
E. G. Salinger.
I ATould tike to point out particularly for commendation the efforts
of Mr. Kichard Sinclair, Mr. Chairman, without whose perseverance
and courage in a very difficult situation this investigation would not
have been conducted.
We are particularly grateful to him and, of course, the people from
the General Accounting Office generally who have been of such assist-
ance.
Senator Mundt. Very well. The Chair will announce this phase of
the hearings concluded.
(Members of the select committee present at time of recess: Sena-
tors Mundt and Curtis.)
(Whereupon, at 1 p.m., the select committee recessed, to reconvene
at the call of the Chair.)
APPENDIX
18781
18782 IMPROPER ACTIVITIES IN THE LABOR FIELD
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