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Full text of "Investigation of improper activities in the labor or management field. Hearings before the Select Committee on Improper Activities in the Labor or Management Field"

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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 



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