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[DOCID: f:83869.wais]
S. Prt. 107-84
EXECUTIVE SESSIONS OF THE SENATE
PERMANENT SUBCOMMITTEE ON
INVESTIGATIONS OF THE COMMITTEE
ON GOVERNMENT OPERATIONS
=======================================================================
VOLUME 1
__________
EIGHTY-THIRD CONGRESS
FIRST SESSION
1953
MADE PUBLIC JANUARY 2003
Printed for the use of the Committee on Governmental Affairs
________
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83-869 WASHINGTON : 2003
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COMMITTEE ON GOVERNMENTAL AFFAIRS
107th Congress, Second Session
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota JIM BUNNING, Kentucky
PETER G. FITZGERALD, Illinois
Joyce A. Rechtschaffen, Staff Director and Counsel
Richard A. Hertling, Minority Staff Director
Darla D. Cassell, Chief Clerk
------
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
CARL LEVIN, Michigan, Chairman
DANIEL K. AKAKA, Hawaii, SUSAN M. COLLINS, Maine
RICHARD J. DURBIN, Illinois TED STEVENS, Alaska
ROBERT G. TORRICELLI, New Jersey GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota JIM BUNNING, Kentucky
PETER G. FITZGERALD, Illinois
Elise J. Bean, Staff Director and Chief Counsel
Kim Corthell, Minority Staff Director
Mary D. Robertson, Chief Clerk
COMMITTEE ON GOVERNMENT OPERATIONS
83rd Congress, First Session
JOSEPH R. McCARTHY, Wisconsin, Chairman
KARL E. MUNDT, South Dakota JOHN L. McCLELLAN, Arkansas
MARGARET CHASE SMITH, Maine HUBERT H. HUMPHREY, Minnesota
HENRY C. DWORSHAK, Idaho HENRY M. JACKSON, Washington
EVERETT McKINLEY DIRKSEN, Illinois JOHN F. KENNEDY, Massachusetts
JOHN MARSHALL BUTLER, Maryland STUART SYMINGTON, Missouri
CHARLES E. POTTER, Michigan ALTON A. LENNON, North Carolina
Francis D. Flanagan, Chief Counsel
Walter L. Reynolds, Chief Clerk
------
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
JOSEPH R. McCARTHY, Wisconsin, Chairman
KARL E. MUNDT, South Dakota JOHN L. McCLELLAN, Arkansas \1\
EVERETT McKINLEY DIRKSEN, Illinois HENRY M. JACKSON, Washington \1\
CHARLES E. POTTER, Michigan STUART SYMINGTON, Missouri \1\
Roy M. Cohn, Chief Counsel
Francis P. Carr, Executive Director
Ruth Young Watt, Chief Clerk
assistant counsels
Robert F. Kennedy Donald A. Surine
Thomas W. La Venia Jerome S. Adlerman
Donald F. O'Donnell C. George Anastos
Daniel G. Buckley
investigators
Robert J. McElroy
Herbert S. Hawkins James N. Juliana
G. David Schine, Chief Consultant
Karl H. W. Baarslag, Director of Research
Carmine S. Bellino, Consulting Accountant
La Vern J. Duffy, Staff Assistant
----------
\1\ The Democratic members were absent from the subcommittee from
July 10, 1953 to January 25, 1954.
C O N T E N T S
----------
Page
Volume 1
Preface.......................................................... xi
Introduction..................................................... xiii
Russell W. Duke, January 15...................................... 1
Testimony of Russell W. Duke.
Russell W. Duke, January 16...................................... 33
Testimony of Edward P. Morgan.
Stockpiling in General Services Administration, January 26....... 97
Testimony of George Willi; and Maxwell H. Elliott.
Stockpiling of Strategic Materials, January 29................... 121
Testimony of Downs E. Hewitt.
File Destruction in Department of State, January 26.............. 143
Testimony of John E. Matson.
File Destruction in Department of State, January 27.............. 177
Testimony of Helen B. Balog.
File Destruction in Department of State, January 28.............. 207
Testimony of Malvina M. Kerr; and Vladimir I. Toumanoff.
File Destruction in Department of State, January 29.............. 283
Testimony of Robert J. Ryan; and Mansfield Hunt.
Payment for Influence--Gas Pipeline Matter, January 26........... 321
Testimony of Eugene H. Cole.
Payment for Influence--Gas Pipeline Matter, January 27........... 337
Testimony of Eugene H. Cole.
Payment for Influence--Gas Pipeline Matter, February 7........... 349
Testimony of Clyde Austin; O.V. Wells; and John W. Carlisle.
Payment for Influence--Gas Pipeline Matter, March 3.............. 379
Testimony of Vernon Booth Lowrey.
Payment for Influence--Gas Pipeline Matter, March 24............. 393
Testimony of James M. Bryant.
Violation of Export Control Statutes, February 2................. 411
Testimony of E.L. Kohler.
Voice of America, February 13.................................... 457
Testimony of Lewis J. McKesson; Virgil H. Fulling; Edwin
Kretzmann; and Howard Fast.
Voice of America, February 14.................................... 499
Testimony of Lewis J. McKesson; James M. Moran; George Q.
Herrick; Newbern Smith; Stuart Ayers; Larry Bruzzese; and
Nancy Lenkeith.
Voice of America--Transmission Facilities, February 16........... 577
Testimony of Wilson R. Compton; and General Frank E. Stoner.
Voice of America, February 17.................................... 599
Testimony of Harold C. Vedeler.
Voice of America, February 23.................................... 615
Testimony of Nathaniel Weyl; Donald Henderson; Alfred Puhan;
James F. Thompson; and Reed Harris.
Voice of America, February 24.................................... 715
Testimony of W. Bradley Connors.
Voice of America, February 28.................................... 719
Testimony of Fernand Auberjonois; Norman Stanley Jacobs;
Raymond Gram Swing; and Troup Mathews.
Voice of America, March 3........................................ 765
Testimony of Jack B. Tate.
Voice of America, March 7........................................ 769
Testimony of Mrs. William Grogan; and Dorothy Fried.
Voice of America, March 10....................................... 795
Testimony of David Cushman Coyle; John Francis McJennett,
Jr.; and Robert L. Thompson.
Voice of America, March 16....................................... 881
Testimony of Charles P. Arnot.
Loyalty Board Procedures, March 18............................... 903
Testimony of John H. Amen.
Volume 2
State Department Information Service--Information Centers,
March 23....................................................... 913
Testimony of Mary M. Kaufman; Sol Auerbach (James S. Allen);
and William Marx Mandel.
State Department Information Service--Information Centers,
March 24....................................................... 945
Testimony of Samuel Dashiell Hammett; Helen Goldfrank; Jerre
G. Mangione; and James Langston Hughes.
State Department Information Service--Information Centers,
March 25....................................................... 999
Testimony of Mary Van Kleeck; and Edwin Seaver.
State Department Information Service--Information Centers,
March 31....................................................... 1015
Testimony of Edward W. Barrett.
State Department Information Service--Information Centers,
April 1........................................................ 1045
Testimony of Dan Mabry Lacy.
State Department Information Service--Information Centers,
April 24....................................................... 1071
Testimony of James A. Wechsler--published in 1953.
State Department Information Service--Information Centers,
April 28....................................................... 1073
Testimony of Theodore Kaghan.
State Department Information Service--Information Centers, May 5. 1115
Testimony of James A. Wechsler--published in 1953.
State Department Information Service--Information Centers, May 5. 1117
Testimony of Millen Brand.
State Department Information Service--Information Centers, May 6. 1123
Testimony of John L. Donovan.
State Department Information Service--Information Centers, May 13 1135
Testimony of James Aronson; and Cedric Belfrage.
State Department Information Service--Information Centers, May 19 1161
Testimony of Julien Bryan.
State Department Information Service--Information Centers, July 1 1193
Testimony of Richard O. Boyer; Rockwell Kent; Edwin B.
Burgum; Joseph Freeman; George Seldes; and Doxey Wilkerson.
State Department Information Service--Information Centers, July 2 1217
Testimony of Allan Chase.
State Department Information Service--Information Centers, July 7 1223
Testimony of Eslanda Goode Robeson; Arnaud d'Usseau; and Leo
Huberman.
State Department Information Service--Information Centers, July
14............................................................. 1231
Testimony of Harvey O'Connor.
State Department Teacher-Student Exchange Program, May 20........ 1235
Testimony of Naphtali Lewis.
State Department Teacher-Student Exchange Program, May 25........ 1245
Testimony of Helen B. Lewis; Naphtali Lewis; and Margaret
Webster.
State Department Teacher-Student Exchange Program, May 26........ 1267
Testimony of Aaron Copland.
State Department Teacher-Student Exchange Program, June 8........ 1291
Testimony of Rachel Davis DuBois; and Dr. Dorothy Ferebee.
State Department Teacher-Student Exchange Program, June 19....... 1305
Testimony of Clarence F. Hiskey.
State Department Teacher-Student Exchange Program, June 19....... 1311
Testimony of Harold C. Urey.
Trade with Soviet-Bloc Countries, May 20......................... 1321
Trade with Soviet-Bloc Countries, May 25......................... 1329
Testimony of Charles S. Thomas; Louis W. Goodkind; Thruston
B. Morton; Kenneth R. Hansen; and Vice Admiral Walter S.
Delaney.
Austrian Incident, June 3........................................ 1349
Testimony of V. Frank Coe.
Austrian Incident, June 5........................................ 1367
Testimony of V. Frank Coe.
Communist Party Activities, Western Pennsylvania, June 17........ 1373
Testimony of Louis Bortz; and Herbert S. Hawkins.
Communist Party Activities, Western Pennsylvania, June 18........ 1395
Testimony of Louis Bortz.
Special Meeting, July 10......................................... 1399
Alleged Bribery of State Department Official, July 13............ 1415
Testimony of Juan Jose Martinez-Locayo.
Internal Revenue, July 31........................................ 1431
Testimony of T. Coleman Andrews.
Security--Government Printing Office, August 10.................. 1439
Testimony of Mary S. Markward; Edward M. Rothschild; Esther
Rothschild; and James B. Phillips.
Security--Government Printing Office, August 11.................. 1473
Testimony of Frederick Sillers; Gertrude Evans; and Charles
Gift.
Security--Government Printing Office, August 11.................. 1497
Testimony of Raymond Blattenberger; and Phillip L. Cole.
Security--Government Printing Office, August 12.................. 1515
Testimony of Ernest C. Mellor; and S. Preston Hipsley.
Security--Government Printing Office, August 13.................. 1527
Testimony of Irving Studenberg.
Security--Government Printing Office, August 13.................. 1533
Testimony of Gertrude Evans; and Charles Gift.
Security--Government Printing Office, August 14.................. 1547
Testimony of Howard Merold; Jack Zucker; Howard Koss; and
Isadore Kornfield.
Security--Government Printing Office, August 15.................. 1563
Testimony of Cleta Guess; James E. Duggan; and Adolphus
Nichols Spence.
Security--Government Printing Office, August 18.................. 1573
Testimony of Roy Hudson Wells, Jr.; and Phillip Fisher.
Security--Government Printing Office, August 19.................. 1577
Testimony of Joseph E. Francis; Samuel Bernstein; and Roscoe
Conkling Everhardt.
Security--Government Printing Office, August 21.................. 1595
Testimony of Florence Fowler Lyons.
Security--Government Printing Office, August 29.................. 1603
Testimony of Alfred L. Fleming; Carl J. Lundmark; Earl Cragg;
and Harry Falk.
Stockpiling and Metal Program, August 21......................... 1615
Statement of Robert C. Miller.
Communist Infiltration Among Army Civilian Workers, August 31.... 1625
Testimony of Doris Walters Powell; Francesco Palmiero; and
Albert E. Feldman.
Communist Infiltration Among Army Civilian Workers, September 1.. 1651
Testimony of Cpt. Donald Joseph Kotch; Stanley Garber; Jacob
W. Allen; Deton J. Brooks, Jr.; Col. Ralph M. Bauknight;
Doris Walters Powell; Francesco Palmiero; Marvel Cooke; and
Paul Cavanna.
Communist Infiltration Among Army Civilian Workers, September 2.. 1695
Testimony of Mary Columbo Palmiero; Col. Wallace W. Lindsay;
Col. Wendell G. Johnson; Maj. Harold N. Krau; Louis Francis
Budenz; Augustin Arrigo; and Muriel Silverberg.
Communist Infiltration Among Army Civilian Workers, September 3.. 1729
Testimony of John Stewart Service; Donald Joseph Kotch;
Michael J. Lynch; and Jacob W. Allen.
Communist Infiltration Among Army Civilian Workers, September 8.. 1745
Testimony of H. Donald Murray.
Communist Infiltration Among Army Civilian Workers, September 9.. 1777
Testimony of Alexander Naimon; John Lautner; Esther Leenov
Ferguson.
Volume 3
Security--United Nations, September 14........................... 1807
Testimony of Julius Reiss; and Florence Englander.
Security--United Nations, September 15........................... 1833
Testimony of Paul Crouch; Dimitri Varley; Abraham Unger; and
Alice Ehrenfeld.
Security--United Nations, September 16........................... 1877
Testimony of Frank Cernrey; and Helen Matousek.
Security--United Nations, September 17........................... 1889
Testimony of Abraham Unger; Vachel Lofek; and David M.
Freedman.
Communist Infiltration in the Army, September 21................. 1899
Testimony of Igor Bogolepov; Vladimir Petrov; Gen. Richard C.
Partridge; and Samuel McKee.
Communist Infiltration in the Army, September 23................. 1913
Testimony of Louis Budenz; Harriett Moore Gelfan; and Corliss
Lamont.
Korean War Atrocities, October 6................................. 1923
Testimony of Edward J. Lyons, Jr.; Lt. Col. Lee H. Kostora;
Maj. James Kelleher; Lt. Col. J. W. Whitehorne, III; Gen.
Fenn; and John Adams.
Korean War Atrocities, October 31................................ 1943
Korean War Atrocities, November 30............................... 1965
Testimony of 1st Lt. Henry J. McNichols, Jr.; Sgt. Barry F.
Rhoden; Capt. Linton J. Buttrey; Sgt. Carey H. Weinel; Col.
James M. Hanley; Pfc. John E. Martin; Capt. Alexander G.
Makarounis.
Korean War Atrocities, December 1................................ 2043
Testimony of Lt. Col. John W. Gorn; Lt. Col. James T. Rogers;
Cpl. Lloyd D. Kreider; Sgt. Robert L. Sharps; William L.
Milano; Sgt. Wendell Treffery; Sgt. George J. Matta; Cpl.
Willie L. Daniels; Sgt. John L. Watters, Jr.; Sgt. Orville
R. Mullins; and Donald R. Brown.
Army Signal Corps--Subversion and Espionage, October 8........... 2119
Statements of Paul Siegel; Jerome Corwin; Allen J.
Lovenstein; Edward J. Fister; William P. Goldberg; and
Jerome Rothstein.
Army Signal Corps--Subversion and Espionage, October 9........... 2201
Statements of Alan Sterling Gross; Dr. Fred B. Daniels;
Bernard Lipel; James Evers; Sol Bremmer; Murray Miller;
Sherwood Leeds; Paul M. Leeds.
Army Signal Corps--Subversion and Espionage, October 12.......... 2275
Statements of Louis Volp; William Patrick Lonnie; Henry F.
Burkhard; Marcel Ullmann; and Herbert F. Hecker.
Army Signal Corps--Subversion and Espionage, October 12.......... 2303
Testimony of Marcel Ullmann; Morris Keiser; Seymour
Rabinowitz; Rudolph C. Riehs; and Carl Greenblum.
Army Signal Corps--Subversion and Espionage, October 13.......... 2329
Testimony of Joseph Levitsky; William Ludwig Ullman; Bernard
Martin; Louis Kaplan; Harry Donohue; Jack Frolow; Bernard
Lewis; and Craig Crenshaw.
Army Signal Corps--Subversion and Espionage, October 14.......... 2389
Testimony of Harold Ducore; Aaron H. Coleman; Samuel
Pomerentz; and Haym G. Yamins.
Army Signal Corps--Subversion and Espionage, October 14.......... 2457
Testimony of Harold Ducore; Jack Okun; and Maj. Gen. Kirke B.
Lawton.
Army Signal Corps--Subversion and Espionage, October 15.......... 2487
Testimony of Vivian Glassman Pataki; Eleanor Glassman Hutner;
Samuel I. Greenman; Ira J. Katchen; Max Elitcher; Eugene E.
Hutner; Col. John V. Mills; Maj. James J. Gallagher; Marcel
Ullmann; Benjamin Zuckerman; and Benjamin Bookbinder.
Army Signal Corps--Subversion and Espionage, October 16.......... 2563
Testimony of Maj. Gen. Kirke Lawton; Maj. Gen. George I.
Back; Maj. Jenista; Col. Ferry; John Pernice; Karl Gerhard;
Carl Greenblum; Markus Epstein; and Leo M. Miller.
Army Signal Corps--Subversion and Espionage, October 17.......... 2625
Testimony of Alfred C. Walker; Joseph Levitsky; and Louis
Antell.
Army Signal Corps--Subversion and Espionage, October 22.......... 2649
Testimony of Fred Joseph Kitty; Jack Okun; Aaron Coleman; and
Barry S. Bernstein.
Army Signal Corps--Subversion and Espionage, October 22.......... 2697
Testimony of Benjamin Wolman; Harvey Sachs; Leonard E. Mins;
and Sylvia Berke.
Volume 4
Army Signal Corps--Subversion and Espionage, October 23.......... 2729
Testimony of Sidney Glassman; David Ayman; Lawrence Freidman;
Elba Chase Nelson; Herbert S. Bennett; Joseph H. Percoff;
Lawrence Aguimbau; and Perry Seay.
Army Signal Corps--Subversion and Espionage, October 26.......... 2777
Statements of Benjamin Zuckerman; Hans Inslerman; Thomas K.
Cookson; Doris Seifert; Lafayette Pope; Ralph Iannarone;
Saul Finkelstein; Abraham Lepato; Irving Rosenheim; and
Richard Jones, Jr.
Army Signal Corps--Subversion and Espionage, October 27.......... 2815
Statements of Edward Brody; Max Katz; Henry Jasik; Capt.
Benjamin Sheehan; Russell Gaylord Ranney; Susan Moon; Peter
Rosmovsky; and Sarah Omanson.
Army Signal Corps--Subversion and Espionage, October 30.......... 2851
Statements of Harold Ducore; Stanley R. Rich; Nathan Sussman;
Louis Leo Kaplan; Carl Greenblum; Sherrod East; Jacob
Kaplan; James P. Scott; Bernard Lee; and Melvin M. Morris.
Army Signal Corps--Subversion and Espionage, November 2.......... 2893
Statements of William Johnston Jones; Murray Nareell; Samuel
Sack; Joseph Bert; Raymond Delcamp; Leo Fary; and Irving
Stokes.
Army Signal Corps--Subversion and Espionage, November 3.......... 2919
Testimony of Abraham Chasanow; Joseph H. Percoff; Solomon
Greenberg; Isadore Solomon; William Saltzman; and Samuel
Sack.
Army Signal Corps--Subversion and Espionage, November 4.......... 2953
Testimony of Victor Rabinowitz; Wendell Furry; Diana Wolman;
Abraham Brothman; Norman Gaboriault; Harvey Sachs; Sylvia
Berke; and Benjamin Wolman.
Army Signal Corps--Subversion and Espionage, November 5.......... 3033
Testimony of Harry Hyman; Vivian Glassman Pataki; Gunnar
Boye; Alexander Hindin; Samuel Paul Gisser; Stanley
Berinsky; Ralph Schutz; and Henry Shoiket.
Army Signal Corps--Subversion and Espionage, November 16......... 3083
Testimony of Rear Admiral Edward Culligan Forsyth; Samuel
Snyder; Ernest Pataki; Albert Socol; Joseph K. Crevisky;
Ignatius Giardina; and Leon Schnee.
Army Signal Corps--Subversion and Espionage, November 17......... 3125
Testimony of James Weinstein; Harry Grundfest; Harry
Pastorinsky; Emery Pataki; and Charles Jassik.
Army Signal Corps--Subversion and Espionage, November 25......... 3151
Testimony of Morris Savitt; Albert Fischler; James J. Matles;
Bertha Singer; and Terry Rosenbaum.
Army Signal Corps--Subversion and Espionage, December 10......... 3171
Testimony of Michael Sidorovich; and Ann Sidorovich.
Army Signal Corps--Subversion and Espionage, December 10......... 3175
Statement of Samuel Levine.
Army Signal Corps--Subversion and Espionage, December 14......... 3199
Testimony of Albert Shadowitz; Pvt. David Linfield; Shirley
Shapiro; and Sidney Stolbert.
Army Signal Corps--Subversion and Espionage, December 15......... 3221
Testimony of Ezekiel Heyman; Lester Ackerman; Sigmond Berger;
Ruth Levine; Bennett Davies; John D. Saunders; Norman
Spiro; Carter Lemuel Burkes; John R. Simkovich; Linda
Gottfried; Joseph Paul Komar; John Anthony DeLuca; and Sam
Morris.
Army Signal Corps--Subversion and Espionage, December 16......... 3273
Testimony of Wilbur LePage; Martin Levine; John Schickler;
David Lichter; Albert Burrows; Seymour Butensky; and
Kenneth John Way.
Army Signal Corps--Subversion and Espionage, December 17......... 3309
Statements of Irving Israel Galex; Harry Lipson; Seymour
Janowsky; Harry M. Nachmais; Curtis Quinten Murphy; Martin
Schmidt; and David Holtzman.
Army Signal Corps--Subversion and Espionage, December 18......... 3349
Statements of Joseph John Oliveri; Philip Joseph Shapiro;
Samuel Martin Segner; Joseph Linton Layne; and Harry
William Levitties.
Transfer of Occupation Currency Plates--Espionage Phase,
October 19..................................................... 3403
Testimony of William H. Taylor; and Alvin W. Hall.
Transfer of Occupation Currency Plates--Espionage Phase,
October 21..................................................... 3425
Testimony of Elizabeth Bentley.
Transfer of Occupation Currency Plates--Espionage Phase,
November 10.................................................... 3431
Statement of Walter F. Frese.
Subversion and Espionage in Defense Establishments and Industry,
November 12.................................................... 3445
Testimony of Jean A. Arsenault; Sidney Friedlander; Theresa
Mary Chiaro; Albert J. Bottisti; Anna Jegabbi; Emma
Elizabeth Drake; Henry Daniel Hughes; Abden Francisco;
Joseph Arthur Gebhardt; Emanuel Fernandez; Robert Pierson
Northrup; Lawrence Leo Gebo; William J. Mastriani; Gordon
Belgrave; Arthur Lee Owens; John Sardella; and Rudolph
Rissland.
Subversion and Espionage in Defense Establishments and Industry,
November 13.................................................... 3545
Testimony of Lillian Krummel; Dewey Franklin Brashear; Arthur
George; Higeno Hermida; Paul K. Hacko; Alex Henry Klein;
Harold S. Rollins; and John Starling Brooks.
Subversion and Espionage in Defense Establishments and Industry,
November 18.................................................... 3585
Testimony of Karl T. Mabbskka; James John Walsh; Nathaniel
Mills; Robert Goodwin; Henry Canning Archdeacon; Donald
Herbert Morrill; Francis F. Peacock; William Richmond
Wilder; Donald R. Finlayson; Theodore Pappas; George Homes;
Alexander Gregory; Witoutos S. Bolys; Benjamin Alfred; and
Witulad Piekarski.
Transfer of the Ship ``Greater Buffalo'', December 8............. 3609
Testimony of Paul D. Page, Jr.; and George J. Kolowich.
Personnel Practices in Government--Case of Telford Taylor,
December 8..................................................... 3639
Testimony of Philip Young.
PREFACE
----------
The power to investigate ranks among the U.S. Senate's
highest responsibilities. As James Madison reasoned in The
Federalist Papers: ``If men were angels, no government would be
necessary. If angels governed men, neither external nor
internal controls on government would be necessary. In framing
a government which is to be administered by men over men, the
great difficulty lies in this: You must first enable the
government to control the governed; and in the next place,
oblige it to control itself.'' It is precisely for the purposes
of government controlling itself that Congress investigates.
A century after Madison, another thoughtful authority on
Congress, Woodrow Wilson, judged the ``vigilant oversight of
administration'' to be as important as legislation. Wilson
argued that because self-governing people needed to be fully
informed in order to cast their votes wisely, the information
resulting from a Congressional investigation might be ``even
more important than legislation.'' Congress, he said, was the
``eyes and the voice'' of the nation.
In 1948, the Senate established the Permanent Subcommittee
on Investigations to continue the work of a special committee,
first chaired by Missouri Senator Harry Truman, to investigate
the national defense program during World War II. Over the next
half century, the Subcommittee under our predecessor Chairmen,
Senators John McClellan, Henry Jackson, Sam Nunn, William Roth,
and John Glenn, conducted a broad array of hard-hitting
investigations into allegations of corruption and malfeasance,
leading repeatedly to the exposure of wrongdoing and to the
reform of government programs.
The phase of the Subcommittee's history from 1953 to 1954,
when it was chaired by Joseph McCarthy, however, is remembered
differently. Senator McCarthy's zeal to uncover subversion and
espionage led to disturbing excesses. His browbeating tactics
destroyed careers of people who were not involved in the
infiltration of our government. His freewheeling style caused
both the Senate and the Subcommittee to revise the rules
governing future investigations, and prompted the courts to act
to protect the Constitutional rights of witnesses at
Congressional hearings. Senator McCarthy's excesses culminated
in the televised Army-McCarthy hearings of 1954, following
which the Senate voted overwhelmingly for his censure.
Under Senate provisions regulating investigative records,
the records of the Permanent Subcommittee on Investigations are
deposited in the National Archives and sealed for fifty years,
in part to protect the privacy of the many witnesses who
testified in closed executive sessions. With the half century
mark here relative to the executive session materials of the
McCarthy subcommittee, we requested that the Senate Historical
Office prepare the transcripts for publication, to make them
equally accessible to students and the general public across
the nation. They were edited by Dr. Donald A. Ritchie, with the
assistance of Beth Bolling and Diane Boyle, and with the
cooperation of the staff of the Center for Legislative Archives
at the National Archives and Records Administration.
These hearings are a part of our national past that we can
neither afford to forget nor permit to reoccur.
Carl Levin,
Chairman.
Susan M. Collins,
Ranking Member.
Permanent Subcommittee on Investigations.
INTRODUCTION
----------
The executive sessions of the Permanent Subcommittee on
Investigations for the Eighty-third Congress, from 1953 to
1954, make sobering reading. Senator Joseph R. McCarthy assumed
the chairmanship of the Government Operations Committee in
January 1953 and exercised prerogative, under then existing
rules, to chair the subcommittee as well. For the three
previous years, Senator McCarthy had dominated the national
news with his charges of subversion and espionage at the
highest levels of the federal government, and the chairmanship
provided him with a vehicle for attempting to prove and perhaps
expand those allegations.
Elected as a Wisconsin Republican in 1946, Senator McCarthy
had burst into national headlines in February 1950, when he
delivered a Lincoln Day address in Wheeling, West Virginia,
that blamed failures in American foreign policy on Communist
infiltration of the United States government. He held in his
hand, the senator asserted, a list of known Communists still
working in the Department of State. When a special subcommittee
of the Foreign Relations Committee investigated these charges
and rejected them as ``a fraud and a hoax,'' the issue might
have died, but the outbreak of the Korean War, along with the
conviction of Alger Hiss and arrest of Julius Rosenberg in
1950, lent new credibility to McCarthy's charges. He continued
to make accusations that such prominent officials as General
George C. Marshall had been part of an immense Communist
conspiracy. In 1952, Dwight D. Eisenhower's election as
president carried Republican majorities in both houses of
Congress, and seniority elevated McCarthy to chairman of the
Permanent Subcommittee on Investigations.
Jurisdictional lines of the Senate assigned loyalty issues
to the Internal Security Subcommittee of the Judiciary
Committee, but Senator McCarthy interpreted his subcommittee's
mandate broadly enough to cover any government-related
activity, including subversion and espionage. Under his
chairmanship, the subcommittee shifted from searching out waste
and corruption in the executive branch to focusing almost
exclusively on Communist infiltration. The subcommittee vastly
accelerated the pace of its hearings. By comparison to the six
executive sessions held by his predecessor in 1952, McCarthy
held 117 in 1953. The subcommittee also conducted numerous
public hearings, which were often televised, but it did the
largest share of its work behind closed doors. During
McCarthy's first year as chairman, the subcommittee took
testimony from 395 witnesses in executive sessions and staff
interrogatories (by comparison to 214 witnesses in the public
sessions), and compiled 8,969 pages of executive session
testimony (compared to 5,671 pages of public hearings).
Transcripts of public hearings were published within months,
while those of executive sessions were sealed and deposited in
the National Archives and Records Administration. Under the
provisions of S. Res. 474, records involving Senate
investigations may be sealed for fifty years. With the approach
of the hearings' fiftieth anniversary, the Permanent
Subcommittee on Investigations authorized the Senate Historical
Office to prepare the executive session transcripts for
publication.
Professional stenographers worked independently under
contract to the Senate to produce the original transcripts of
the closed hearings. The transcripts are as accurate as the
stenographers were able to make them, but since neither
senators nor witnesses reviewed their remarks, as they would
have for published hearings, they could correct neither
misspelled names nor misheard words. Several different
stenographers operating in Washington, New York, and
Massachusetts prepared the transcripts, accounting for
occasional variations in style. The current editing has sought
to reproduce the transcripts as closely to their original form
as possible, deleting no content but correcting apparent
errors--such as the stenographer's turning the town of
Bethpage, New York, into a person's name, Beth Page.
Transcribers also employed inconsistent capitalization and
punctuation, which have been corrected in this printed version.
The executive sessions have been given the same titles as
the related public hearings, and all hearings on the same
subject matter have been grouped together chronologically. If
witnesses in executive session later testified in public, the
spelling of their names that appeared in the printed hearing
has been adopted. If thesubcommittee ordered that the executive
session testimony be published, those portions have not been reprinted,
but editorial notes indicate where the testimony occurred and provide a
citation. No transcripts were made of ``off the record'' discussions,
which are noted within the hearings. Senator McCarthy is identified
consistently as ``The Chairman.'' Senators who occasionally chaired
hearings in his absence, or chaired special subcommittees, are
identified by name. Brief editorial notes appear at the top of each
hearing to place the subject matter into historical context and to
indicate whether the witnesses later testified in public session.
Wherever possible, the witnesses' birth and death dates are noted. A
few explanatory footnotes have been added, although editorial intrusion
has been kept to a minimum. The subcommittee deposited all of the
original transcripts at the Center for Legislative Archives at the
National Archives and Records Administration, where they are now open
for research.
THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
Following the Legislative Reorganization Act of 1946, the
Special Committee to Investigate the National Defense Program
(popularly known as the Truman committee, for its chairman,
Harry S. Truman) merged with the Committee on Expenditures in
the Executive Departments to become the Permanent Subcommittee
on Investigations. In 1953 the Committee on Executive
Expenditures was renamed the Committee on Government
Operations, and Senator Joseph R. McCarthy (1908-1957), who had
joined the committee in 1947, became chairman of both the
committee and its permanent subcommittee. Republicans won a
narrow majority during the Eighty-third Congress, and held only
a one-seat advantage over Democrats in the committee ratios.
The influx of new senators since World War II also meant that
except for the subcommittee's chairman and ranking member, all
other members were serving in their first terms. Senator
McCarthy had just been elected to his second term in 1952,
while the ranking Democrat, Arkansas Senator John L. McClellan
(1896-1977), had first been elected in 1942, and had chaired
the Government Operations Committee during the Eighty-first and
Eighty-second Congresses. The other members of the subcommittee
included Republicans Karl Mundt (1900-1974), Everett McKinley
Dirksen (1896-1969), and Charles E. Potter (1916-1979), and
Democrats Henry M. Jackson (1912-1983) and Stuart Symington
(1901-1988) \1\
---------------------------------------------------------------------------
\1\ See Committee on Government Operations, 50th Anniversary
History, 1921-1971, 92nd Cong., 1st sess., S. Doc. 31 (Washington,
D.C.: Government Printing Office, 1971).
---------------------------------------------------------------------------
With senators serving multiple committee assignments, only
on rare occasions would the entire membership of any committee
or subcommittee attend a hearing. Normally, Senate committees
operated with a few senators present, with members coming and
going through a hearing depending on their conflicting
commitments. Unique circumstances developed in 1953 to allow
Senator McCarthy to be the sole senator present at many of the
subcommittee's hearings, particularly those held away from
Washington. In July 1953, a dispute over the chairman's ability
to hire staff without consultation caused the three Democrats
on the subcommittee to resign. They did not return until
January 1954. McCarthy and his staff also called hearings on
short notice, and often outside of Washington, which prevented
the other Republican senators from attending. Senators Everett
Dirksen and Charles Potter occasionally sent staff members to
represent them (and at times to interrogate witnesses). By
operating so often as a ``one-man committee,'' Senator McCarthy
gave witnesses the impression, as Harvard law school dean Erwin
Griswold observed, that they were facing a ``judge, jury,
prosecutor, castigator, and press agent, all in one.'' \2\
---------------------------------------------------------------------------
\2\ Erwin N. Griswold, The 5th Amendment Today (Cambridge: Harvard
University Press, 1955), 67.
---------------------------------------------------------------------------
The Legislative Reorganization Act of 1946 had created a
non-partisan professional staff for eachSenate committee.
Originally, staff worked for the committee as a whole and were not
divided by majority and minority. Chairman McCarthy inherited a small
staff from his predecessor, Clyde Hoey, a Democrat from North Carolina,
but a significant boost in appropriations enabled him to add many of
his own appointees. For chief counsel, McCarthy considered candidates
that included Robert Morris, counsel of the Internal Security
Subcommittee, Robert F. Kennedy, and John J. Sirica, but he offered the
job to Roy M. Cohn (1927-1986). The son of a New York State appellate
division judge, Cohn had been too young to take the bar exam when he
graduated from Columbia University Law School. A year later he became
assistant United States attorney on the day he was admitted to the bar.
In the U.S. attorney's office he took part in the prosecution of
William Remington, a former Commerce Department employee convicted of
perjury relating to his Communist party membership. Cohn also
participated in the prosecution of Julius and Ethel Rosenberg, and in
the trial of the top Communist party leaders in the United States. He
earned a reputation as a relentless questioner with a sharp mind and
retentive memory. In 1952, Cohn briefly served as special assistant to
Truman's attorney general, James McGranery, and prepared an indictment
for perjury against Owen Lattimore, the Johns Hopkins University
professor whom Senator McCarthy had accused of being a top Soviet
agent. Cohn's appointment also helped counteract the charges of
prejudice leveled against the anti-Communist investigations. (Indeed,
when he was informed that the B'nai B'rith was providing lawyers to
assist the predominantly Jewish engineers suspended from Fort Monmouth,
on the assumption of anti-Semitism, Cohn responded: ``Well, that is an
outrageous assumption. I am a member and an officer of B'nai B'rith.'')
In December 1952, McCarthy invited Cohn to become subcommittee counsel.
``You know, I'm going to be the chairman of the investigating committee
in the Senate. They're all trying to push me off the Communist issue .
. . ,'' Cohn recalled the senator telling him. ``The sensible thing for
me to do, they say, is start investigating the agriculture program or
find out how many books they've got bound upside down at the Library of
Congress. They want me to play it safe. I fought this Red issue. I won
the primary on it. I won the election on it, and don't see anyone else
around who intends to take it on. You can be sure that as chairman of
this committee this is going to be my work. And I want you to help
me.'' \3\
---------------------------------------------------------------------------
\3\ Washington Star, July 20, 1954; Roy Cohn, McCarthy (New York:
New American Library, 1968), 46.
---------------------------------------------------------------------------
At twenty-six, Roy Cohn lacked any previous legislative
experience and tended to run hearings more like a prosecutor
before a grand jury, collecting evidence to make his case in
open session rather than to offer witnesses a full and fair
hearing. Republican Senator Karl Mundt, a veteran investigator
who had previously served on the House Un-American Activities
Committee, urged Cohn to call administrative officials who
could explain the policies and rationale of the government
agencies under investigation, and to keep the hearings
balanced, but Cohn felt disinclined to conduct an open forum.
Arrogant and brash, he alienated others on the staff, until
even Senator McCarthy admitted that putting ``a young man in
charge of other young men doesn't work out too well.'' Cohn's
youth further distanced him from most of the witnesses he
interrogated. Having reached maturity during the Cold War
rather than the Depression, he could not fathom a legitimate
reason for anyone having attended a meeting, signed a petition,
or contributed to an organization with any Communist
affiliation. In his memoirs, Cohn later recounted how a retired
university professor once told him ``that had I been born
twelve or fifteen years earlier my world-view and therefore my
character would have been very different.'' \4\
---------------------------------------------------------------------------
\4\ Ibid., 22; David F. Krugler, The Voice of America and the
Domestic Propaganda Battles, 1945-1953 (Columbia: University of
Missouri Press, 2000), 191.
---------------------------------------------------------------------------
An indifferent administrator, Senator McCarthy gave his
counsel free rein to conduct investigations. In fact, he
appointed Cohn without having first removed the subcommittee's
previous chief counsel, Francis``Frip'' Flanagan. To remedy
this discrepancy, McCarthy changed Flanagan's title to general counsel,
although he never delineated any differences in authority. When a
reporter asked what these titles meant, McCarthy confessed that he did
not know. The subcommittee's chief clerk, Ruth Young Watt, found that
whenever a decision needed to be made, Cohn would say, ``Ask Frip,''
and Flanagan would reply, ``Ask Roy.'' ``In other words,'' she
explained, ``I'd just end up doing what I thought was right.'' \5\
---------------------------------------------------------------------------
\5\ Ruth Young Watt oral history, 109, Senate Historical Office.
---------------------------------------------------------------------------
The subcommittee held most of its hearings in room 357 of
the Senate Office Building (now named the Russell Senate Office
Building). Whenever it anticipated larger crowds for public
hearings, it would shift to room 318, the spacious Caucus Room
(now room 325), which better accommodated radio and television
coverage. In 1953 the subcommittee also held extensive hearings
in New York City, working out of the federal courthouse at
Foley Square and the Waldorf-Astoria Hotel, while other
executive sessions took place at Fort Monmouth, New Jersey, and
in Boston. Roy Cohn had recruited his close friend, G. David
Schine (1927-1996), as the subcommittee's unpaid ``chief
consultant.'' The two men declined to work out of the
subcommittee's crowded office--Cohn did not even have a desk
there. (``I don't have an office as such,'' Cohn later
testified. ``We have room 101 with 1 desk and 1 chair. That is
used jointly by Mr. Carr and myself. The person who gets there
first occupies the chair.'' \6\) Instead, Cohn and Schine
rented more spacious quarters for themselves in a nearby
private office building. When the subcommittee met in New York,
Schine made his family's limousine and suite at the Waldorf-
Astoria available for its use. As the subcommittee's only
unpaid staff member, he was not reimbursed for travel and other
expenses, including his much-publicized April 1953 tour with
Cohn of U.S. information libraries in Europe. In executive
sessions, Schine occasionally questioned witnesses and even
presided in Senator McCarthy's absence, with the chief counsel
addressing him as ``Mr. Chairman.'' Others on the staff,
including James Juliana and Daniel G. Buckley, similarly
conducted hearing-like interrogatories of witnesses. Schine
continued his associations with the subcommittee even after his
induction into the army that November--an event that triggered
the chairman's epic confrontation with the army the following
year.\7\
---------------------------------------------------------------------------
\6\ Special Subcommittee on Investigations, Special Senate
Investigation on Charges and Countercharges Involving: Secretary of the
Army Robert T. Stevens, John G. Adams, H. Struve Hensel and Senator Joe
McCarthy, Roy M. Cohn, and Francis P. Carr, 83rd Cong., 2nd sess., part
47 (Washington, D.C.: Government Printing Office, 1954), 1803.
\7\ Ruth Young Watt oral history, 107-108; 130; Washington Star,
January 1, 1953.
---------------------------------------------------------------------------
The hectic pace and controversial nature of the
subcommittee hearings during the Eighty-third Congress placed
great burdens on the staff and contributed to frequent
departures. Of the twelve staff members that McCarthy
inherited, only four remained by the end of the year--an
investigator and three clerks. Of the twenty-one new staff
added during 1953, six did not last the year. Research director
Howard Rushmore (1914-1958) resigned after four months, and
assistant counsel Robert Kennedy (1925-1968), after literally
coming to blows with Roy Cohn, resigned in August, telling the
chairman that the subcommittee was ``headed for disaster.''
(The following year, Kennedy returned as minority counsel.)
When Francis Flanagan left in June 1953, Senator McCarthy named
J. B. Matthews (1894-1966) as executive director, hoping that
the seasoned investigator would impose some order on the staff.
Matthews boasted of having joined more Communist-front
organizations than any other American, although he had never
joined the Communist party. When he fell out of favor with
radical groups in the mid-1930s, he converted into an outspoken
anti-Communist and served as chief investigator for the House
Un-American Activities Committee from 1939 to 1945. An ordained
Methodist minister, he was referred to as ``Doctor Matthews,''
although he held no doctoral degree. Just as McCarthy announced
his appointment to head the subcommittee staff in June
1953,Matthews's article on ``Reds in Our Churches'' appeared in the
American Mercury magazine. His portrayal of Communist sympathy among
the nation's Protestant clergy caused a public uproar, and Republican
Senator Charles Potter joined the three Democrats on the subcommittee
in calling for Matthews's dismissal. Although Matthews resigned
voluntarily, it was Senator McCarthy's insistence on maintaining the
sole power to hire and fire staff that caused the three Democratic
senators to resign from the subcommittee, while retaining their
membership in the full Government Operations Committee. Senator
McCarthy then appointed Francis P. Carr, Jr. (1925-1994) as executive
director, with Roy Cohn continuing as chief counsel to direct the
investigation.\8\
---------------------------------------------------------------------------
\8\ G. F. Goodwin, ``Joseph Brown Matthews,'' Dictionary of
American Biography, Supplement 8 (New York: Charles Scribner's Sons,
1988), 424-27; Lawrence B. Glickman, ``The Strike in the Temple of
Consumption: Consumer Activitism and Twentieth-Century American
Political Culture,'' Journal of American History, 88 (June 2001), 99-
128; Robert F. Kennedy, The Enemy Within (New York: Harper & Brothers,
1960), 176.
---------------------------------------------------------------------------
THE RIGHTS OF WITNESSES
In their hunt for subversion and espionage, Senator
McCarthy and chief counsel Cohn conducted hearings on the State
Department, the Voice of America, the U.S. overseas libraries,
the Government Printing Office, and the Army Signal Corps.
Believing any method justifiable in combating an international
conspiracy, they grilled witnesses intensely. Senator McCarthy
showed little patience for due process and defined witnesses'
constitutional rights narrowly. His hectoring style inspired
the term ``McCarthyism,'' which came to mean ``any
investigation that flouts the rights of individuals,'' usually
involving character assassination, smears, mudslinging,
sensationalism, and guilt by association. ``McCarthyism''--
coined by the Washington Post cartoonist Herblock, in 1950--
grew so universally accepted that even Senator McCarthy
employed it, redefining it as ``the fight for America.''
Subsequently, the term has been applied collectively to all
congressional investigations of suspected Communists, including
those by the House Un-American Activities Committee and Senate
Internal Security Subcommittee, which bore no direct relation
to the permanent subcommittee.\9\
---------------------------------------------------------------------------
\9\ William Safire, Safire's New Political Dictionary: The
Definitive Guide to the New Language of Politics (New York: Random
House, 1993), 441; Senator Joe McCarthy, McCarthyism: The Fight for
America (New York: Devin-Adair, 1952).
---------------------------------------------------------------------------
In these closed executive sessions, Senator McCarthy's
treatment of witnesses ranged from abrasive to solicitous. The
term ``executive sessions'' derives from the Senate's division
of its business between legislative (bills and resolutions) and
executive (treaties and nominations). Until 1929 the Senate
debated all executive business in closed session, clearing the
public and press galleries, and locking the doors.
``Executive'' thereby became synonymous with ``closed.''
Committees held closed sessions to conduct preliminary
inquiries, to mark up bills before reporting them to the floor,
and to handle routine committee housekeeping. By hearing
witnesses privately, the permanent subcommittee could avoid
incidents of misidentification and could determine how
forthcoming witnesses were likely to be in public. In the case
of McCarthy, however, ``executive session'' took a different
meaning. John G. Adams, who attended many of these hearings as
the army's counsel from 1953 to 1954, observed that the
chairman used the term ``executive session'' rather loosely.
``It didn't really mean a closed session, since McCarthy
allowed in various friends, hangers-on, and favored newspaper
reporters,'' wrote Adams. ``Nor did it mean secret, because
afterwards McCarthy would tell the reporters waiting outside
whatever he pleased. Basically, `executive' meant that Joe
could do anything he wanted.'' Adams recalled that the
subcommittee's Fort Monmouth hearings were held in a
``windowless storage room in the bowels of the courthouse,
unventilated and oppressively hot,'' into which crowded
thesenator, his staff, witnesses, and observers who at various times
included trusted newspaper reporters, the governor of Wisconsin, the
chairman's wife, mother-in-law and friends. ``The `secret' hearings
were, after all, quite a show,'' Adams commented, adding that the
transcripts were rarely released to the public. This ostensibly
protected the privacy of those interrogated, but also gave the chairman
an opportunity to give to the press his version of what had transpired
behind closed doors, with little chance of rebuttal.\10\
---------------------------------------------------------------------------
\10\ John G. Adams, Without Precedent: The Story of the Death of
McCarthyism (New York: W. W. Norton, 1983), 53, 60, 66.
---------------------------------------------------------------------------
Roy Cohn insisted that the subcommittee gave ``suspects''
rights that they would not get in a court of law. Unlike a
witness before a grand jury, or testifying on the stand, those
facing the subcommittee could have their attorney sit beside
them for consultation. The executive sessions further protected
the witnesses, Cohn pointed out, by excluding the press and the
public. But Gen. Telford Taylor, an American prosecutor at
Nuremberg, charged McCarthy with conducting ``a new and
indefensible kind of hearing, which is neither a public hearing
nor an executive session.'' In Taylor's view, the closed
sessions were a device that enabled the chairman to tell
newspapers whatever he saw fit about what happened, without
giving witnesses a chance to defend themselves or reporters a
chance to check the accuracy of the accusations.
Characteristically, Senator McCarthy responded to this
criticism with an executive session inquiry into Gen. Taylor's
loyalty. The chairman used other hearings to settle personal
scores with men such as Edward Barrett, State Department press
spokesman under Dean Acheson, and Edward Morgan, staff director
of the Tydings subcommittee that had investigated his Wheeling
speech.\11\
---------------------------------------------------------------------------
\11\ Cohn, McCarthy, 51; C. Dickerman Williams, ``The Duty to
Investigate,'' The Freeman, 3 (September 21, 1953), 919; New York
Times, November 28, 1953.
---------------------------------------------------------------------------
Inclusion as a witness in these volumes in no way suggests
a measure of guilt. Some of the witnesses who came before the
permanent subcommittee in 1953 had been Communists; others had
not. Some witnesses cooperated by providing names and other
information; others did not. Some testified on subjects
entirely unrelated to communism, subversion or espionage. The
names of many of these witnesses appeared in contemporary
newspaper accounts, even when they did not testify in public.
About a third of the witnesses called in executive session did
not appear at any public hearing, and Senator McCarthy often
defined such witnesses as having been ``cleared.'' Some were
called as witnesses out of mistaken identity. Others defended
themselves so resolutely or had so little evidence against them
that the chairman and counsel chose not to pursue them. For
those witnesses who did appear in public, the closed hearings
served as dress rehearsals. The subcommittee also heard many
witnesses in public session who had not previously appeared at
a closed hearing, usually committee staff or government
officials for whom a preliminary hearing was not deemed
necessary. Given the rapid pace of the hearings, the
subcommittee staff had little time for preparation. ``No real
research was ever done,'' Robert Kennedy complained. ``Most of
the investigations were instituted on the basis of some
preconceived notion by the chief counsel or his staff members
and not on the basis of any information that had been
developed.'' \12\
---------------------------------------------------------------------------
\12\ Kennedy, The Enemy Within, 307.
---------------------------------------------------------------------------
After July 1953, when the Democratic senators resigned from
the subcommittee, other Republican senators also stopped
attending the subcommittee's closed hearings, in part because
so many of the hearings were held away from the District of
Columbia and called on short notice. Witnesses also received
subpoenas on such short notice that they found it hard to
prepare themselves or consult with counsel. Theoretically the
committee, rather than the chairman, issued subpoenas, Army
Counsel John G. Adams noted. ``But McCarthy ignored the Senate
rule that required a vote of the other members every time he
wanted to haul someone in.He signed scores of blank subpoenas
which his staff members carried in their inside pockets, and issued as
regularly as traffic tickets.'' Witnesses repeatedly complained that
subpoenas to appear were served on them just before the hearings,
either the night before or the morning of, making it hard for them to
obtain legal representation. Even if they obtained a lawyer, the
senator would not permit attorneys to raise objections or to talk for
the witness. Normally, a quorum of at least one-third of the committee
or subcommittee members was needed to take sworn testimony, although a
single senator could hold hearings if authorized by the committee. The
rules did not bar ``one-man hearings,'' because senators often came and
went during a committee hearing and committee business could come to a
halt if a minimum number of senators were required to hold a
hearing.\13\
---------------------------------------------------------------------------
\13\ Adams, Without Precedent, 67, 69.
---------------------------------------------------------------------------
When the chairman acted as a one-man committee, the tone of
the hearings more closely resembled an inquisition. Witnesses
who swore that they had never joined the Communist party or
engaged in espionage or sabotage were held accountable for
long-forgotten petitions they had signed a decade earlier or
for having joined organizations that the attorney general later
cited as Communist fronts. Seeking any sign of political
unorthodoxy, the chairman and the subcommittee staff
scrutinized the witnesses' lives and grilled them about the
political beliefs of colleagues, neighbors and family members.
In the case of Stanley Berinsky, he was suspended from the Army
Signal Corps at Fort Monmouth after security officers
discovered that his mother had once been a member of the
Communist party:
The Chairman. Let's get this straight. I know it is unusual
to appear before a committee. So many witnesses get nervous.
You just got through telling us you did not know she was a
Communist; now you tell us she resigned from the Communist
party? As of when?
Mr. Berinsky. I didn't know this until the security
suspension came up at Fort Monmouth.
The Chairman. When was that?
Mr. Berinsky. That was in 1952.
The Chairman. Then did your mother come over and tell you
she had resigned?
Mr. Berinsky. I told her what happened. At that time she
told me she had been out for several years.
The Chairman. . . . Well, did you ever ask her if she was a
Communist?
Mr. Berinsky. No, sir. . . .
The Chairman. When you went to see her, weren't you
curious? If somebody told me my mother was a Communist, I'd get
on the phone and say, ``Mother is this true''? . . .
Did she tell you why she resigned?
Mr. Berinsky. If seems to me she probably did it because I
held a government job and she didn't want to jeopardize my
position.
The Chairman. In other words, it wasn't because she felt
differently about the Communist party, but because she didn't
want to jeopardize your position?
Mr. Berinsky. Probably.
The Chairman. Was she still a Communist at heart in 1952?
Mr. Berinsky. Well, I don't know how you define that.
The Chairman. Do you think she was a Communist, using your
own definition of communism?
Mr. Berinsky. I guess my own definition is one who is a
member of the party. No.
The Chairman. Let's say one who was a member and dropped
out and is still loyal to the party. Taking that as a
definition, would you say she is still a Communist?
Mr. Berinsky. Do you mean in an active sense?
The Chairman. Loyal in her mind.
Mr. Berinsky. That is hard to say.
The Chairman. Is she still living?
Mr. Berinsky. Yes.\14\
\14\ Executive session transcript, November 5, 1953.
Perhaps the most recurring phrase in these executive
session hearings was not the familiar ``Are you now or have you
ever been a member of the Communist party?'' That was the
mantra of the public hearings. Instead, in the closed hearings
it was ``In other words,'' which prefaced the chairman's
relentless rephrasing of witnesses' testimony into something
with more sinister implications than they intended. Given
Senator McCarthy's tendency toward hyperbole, witnesses
objected to his use of inappropriate or inflammatory words to
characterize their testimony. He took their objections as a
---------------------------------------------------------------------------
sign they were covering up something:
The Chairman. Did you live with him when the apartment was
raided by army security?
Mr. Okun. Senator, the apartment was not raided. He had
been called and asked whether he would let them search it. . .
The Chairman. You seem to shy off at the word ``raided.''
When the army security men go over and make a complete search
of the apartment and find forty-three classified documents, to
me that means ``raided.'' You seem, both today and the other
day to be going out of your way trying to cover up for this man
Coleman.
Mr. Okun. No, sir. I do not want to cover up anything.\15\
\15\ Executive session transcript, October 23, 1953.
A few of those who appeared before the subcommittee later
commented that the chairman was less intimidating in private
than his public behavior had led them to expect. ``Many of us
have formed an impression of McCarthy from the now familiar
Herblock caricatures. He is by no means grotesque,'' recalled
Martin Merson, who clashed with the senator over the Voice of
America. ``McCarthy, the relaxed dinner guest, is a charming
man with the friendliest of smiles.'' McCarthy's sometimes
benign treatment of witnesses in executive session may have
been a tactic intended to lull them into false complacency
before his more relentless questioning in front of the
television cameras, which certainly seemed to bring out the
worst in him. Ruth Young Watt (1910-1996), the subcommittee's
chief clerk from 1948 until her retirement in 1979, regarded
the chairman as ``a very kind man, very thoughtful of people
working with him,'' but a person who would ``get off on a
tirade sometimes'' in public hearings.\16\
---------------------------------------------------------------------------
\16\ Martin Merson, The Private Diary of a Public Servant (New
York: Macmillan, 1955), 83; Ruth Watt oral history, 140.
---------------------------------------------------------------------------
Senator McCarthy regularly informed witnesses of their
right to decline to answer if they felt an answer might
incriminate them, but he interpreted their refusal to answer a
question as an admission of guilt. He also encouraged
government agencies and private corporations to fire anyone who
took the Fifth Amendment before a congressional committee. When
witnesses also attempted to cite their First Amendment rights,
the chairman warned that they would be cited for contempt of
Congress. Although the chairman pointed out that membership in
the Communist party was not a crime, many witnesses declined to
admit their past connections to the party to avoid having to
name others with whom they were associated. Some witnesses
wanted to argue that the subcommittee had no right to question
their political beliefs, but their attorneys advised them that
it would be more prudent to decline to answer. During 1953,
some seventy witnesses before the subcommittee invoked the
Fifth Amendment and declined to answer questions concerning
Communist activities. Five refused to answer on the basis of
the First Amendment, two claimed marital privileges, and
Harvard Professor Wendell Furry invoked no constitutional
grounds for his failure toanswer questions.\17\
---------------------------------------------------------------------------
\17\ Annual Report of the Committee on Government Operations Made
by its Senate Permanent Subcommittee on Investigations, 83rd Cong., 2nd
sess., S. Rept. 881 (Washington, D.C.: Government Printing Office,
1954), 10-14; see also Griswold, The 5th Amendment Today, and Victor S.
Navasky, Naming Names (New York: Viking Press, 1980).
---------------------------------------------------------------------------
Some witnesses invoked the Fifth Amendment to avoid
implicating those they knew to be Communists. Other invoked the
Fifth Amendment as a blanket response to any questions about
the Communist party, after being warned by their attorneys that
if they answered questions about themselves they could be
compelled to name their associates. In the case of Rogers v.
U.S. (1951) the Supreme Court had ruled that a witness could
not refuse to answer questions simply out of a ``desire to
protect others from punishment, much less to protect another
from interrogation by a grand jury.'' The Justice Department
applied the same reasoning to witnesses who refused to identify
others to a congressional committee. Since the questions were
relevant to the operation of the government, the department
assured Senator McCarthy that it was his right as a
congressional investigator to order witnesses to answer
questions about whether they know any Communists who might be
working in the government or in defense plants.\18\
---------------------------------------------------------------------------
\18\ Assistant Attorney General Warren Olney, III to Senator Joseph
R. McCarthy, July 7, 1954, full text in the executive session
transcript for July 15, 1954.
---------------------------------------------------------------------------
Senator McCarthy explained to witnesses that they could
take the Fifth Amendment only if they were concerned that
telling the truth would incriminate them, a reasoning that
redefined the right against self-incrimination as incriminating
in itself. Calling them ``Fifth-Amendment Communists,'' he
insisted that ``an innocent man does not need the Fifth
Amendment.'' At a public hearing, the chairman pressed one
witness: ``Are you declining, among other reasons, for the
reason that you are relying upon that section of the Fifth
Amendment which provides that no person may be a witness
against himself if he feels that his testimony might tend to
incriminate him? If you are relying upon that, you can tell me.
If not, of course, you are ordered to answer. A Communist and
espionage agent has the right to refuse on that ground, but not
on any of the other grounds you cited.'' \19\
---------------------------------------------------------------------------
\19\ Permanent Subcommittee on Investigations, Army Signal Corps--
Subversion and Espionage, 83rd Cong., 1st sess. (Washington, D.C.:
Government Printing Office, 1954), 153, 299-300.
---------------------------------------------------------------------------
Federal court rulings had given congressional investigators
considerable leeway to operate. In the aftermath of the Teapot
Dome investigation, the Supreme Court ruled in McGrain v.
Daugherty (1927) that a committee could subpoena anyone to
testify, including private citizens who were neither government
officials nor employees. In Sinclair v. U.S. (1929), the
Supreme Court recognized the right of Congress to investigate
anything remotely related to its legislative and oversight
functions. The court also upheld the Smith Act of 1940, which
made it illegal to advocate overthrowing the U.S. government by
force or violence. In 1948 the Justice Department prosecuted
twelve Communist leaders for having conspired to organize ``as
a society, group and assembly of persons who teach and advocate
the overthrow and destruction of the Government of the United
States by force and violence.'' Upholding their convictions, in
Dennis v. U.S. (1951), the Supreme Court denied that their
prosecution had violated the First Amendment, on the grounds
that the government's power to prevent an armed rebellion
subordinated free speech. During the next six years 126
individuals were indicted solely for being members of the
Communist party. The Mundt-Nixon Act of 1950 further barred
Communist party members from employment in defense
installations, denied them passports, and required them to
register with the Subversive Activities Control Board. In
Rogers v. U.S. (1951) the Supreme Court declared that a witness
who had testified that she was treasurer of a localCommunist
party and had possession of its records could not claim the Fifth
Amendment when asked to whom she gave those records. Her initial
admission had waived her right to invoke her privilege and she was
guilty of contempt for failing to answer.
Not until after Senator McCarthy's investigations had
ceased did the Supreme Court change direction on the rights of
congressional witnesses, in three sweeping decisions handed
down on June 17, 1957. In Yates v. U.S. the court overturned
the convictions of fourteen Communist party members under the
Smith Act, finding that organizing a Communist party was not
synonymous with advocating the overthrow of the government by
force and violence. As a result, the Justice Department stopped
seeking further indictments under the Smith Act. In Watkins v.
U.S., the court specified that an investigating committee must
demonstrate a legislative purpose to justify probing into
private affairs, and ruled that public education was an
insufficient reason to force witnesses to answer questions
under the penalty of being held in contempt. These rulings
confirmed that the Bill of Rights applied to anyone subpoenaed
by a congressional committee.\20\
---------------------------------------------------------------------------
\20\ Arthur J. Sabin, In Calmer Times: The Supreme Court and Red
Monday (Philadelphia: University of Pennsylvania Press, 1999), 11, 39,
55-57, 154-55, 167-68.
---------------------------------------------------------------------------
If witnesses refused to cooperate, the chairman threatened
them with indictment and incarceration. At the end of his first
year as chairman, he advised one witness: ``During the course
of these hearings, I think up to this time we have some--this
is just a rough guess--twenty cases we submitted to the grand
jury, either for perjury or for contempt before this committee.
Do not just assume that your name was pulled out of a hat.
Before you were brought here, we make a fairly thorough and
complete investigation. So I would like to strongly advise you
to either tell the truth or, if you think the truth will
incriminate you, then you are entitled to refuse to answer. I
cannot urge that upon you too strongly. I have given that
advice to other people here before the committee. They thought
they were smarter than our investigators. They will end up in
jail. This is not a threat; this is just friendly advice I am
giving you. Do you understand that?'' In the end, however, no
witness who appeared before the subcommittee during his
chairmanship was imprisoned for perjury, contempt, espionage,
or subversion. Several witnesses were tried for contempt, and
some were convicted, but each case was overturned on
appeal.\21\
---------------------------------------------------------------------------
\21\ Executive session transcript, December 15, 1953.
---------------------------------------------------------------------------
AREA OF INVESTIGATION
Following the tradition of the Permanent Subcommittee on
Investigations, the first executive session hearings in 1953
dealt with influence peddling, an outgrowth of an investigation
begun in the previous Congress. Senator McCarthy absented
himself from most of the influence-peddling hearings and left
Senator Karl Mundt or Senator John McClellan, the ranking
Republican and Democrat on the Government Operations Committee,
to preside in his place. But the chairman made subversion and
espionage his sole mission. On the day that the subcommittee
launched a new set of hearings on influence peddling, it began
hearings on the State Department's filing system, whose
byzantine complexity Senator McCarthy attributed to either
Communist infiltration of gross incompetence.
With the State Department investigation, Senator McCarthy
returned to familiar territory. His Wheeling speech in 1950 had
accused the department of harboring known Communists. The
senator demanded that the State Department open its ``loyalty
files,'' and then complained that it provided only ``skinny-
ribbed bones of the files,'' ``skeleton files,'' ``purged
files,'' and ``phony files.'' The chairman's interest was
naturally piqued in 1953 when State Department security officer
John E. Matson reported irregularitiesin the department's
filing system, and charged that personnel files had been ``looted'' of
derogatory information in order to protect disloyal individuals.
Although State Department testimony suggested that its system had been
designed to protect the rights of employees in matters of career
evaluation and promotion, Senator McCarthy contended that there had
been a conspiracy to manipulate the files.\22\
---------------------------------------------------------------------------
\22\ Robert Griffith, The Politics of Fear: Joseph R. McCarthy and
the Senate (Lexington: University Press of Kentucky, 1970), 90-93;
``The Raided Files,'' Newsweek (February 16, 1953), 28-29.
---------------------------------------------------------------------------
A brief investigation of homosexuals as security risks also
grew out of previous inquiries. In 1950, Senator McCarthy
denounced ``those Communists and queers who have sold 400
million Asiatic people into atheistic slavery and have American
people in a hypnotic trance, headed blindly toward the same
precipice.'' He often laced his speeches with references to
``powder puff diplomacy,'' and accused his opponents of
``softness'' toward communism. ``Why is it that wherever it is
in the world that our State Department touches the red-hot
aggression of Soviet communism there is heard a sharp cry of
pain--a whimper of confusion and fear? . . . Why must we be
forced to cringe in the face of communism?'' By contrast, he
portrayed himself in masculine terms: in rooting out communism
he ``had to do a bare-knuckle job or suffer the same defeat
that a vast number of well-meaning men have suffered over past
years. It has been a bare-knuckle job. As long as I remain in
the Senate it will continue as a bare-knuckle job.'' The
subcommittee had earlier responded to Senator McCarthy's
complaint that the State Department had reinstated homosexuals
suspended for moral turpitude with an investigation in 1950
that produced a report on the Employment of Homosexuals and
Other Sex Perverts in Government. The report had concluded that
homosexuals' vulnerability to blackmail made them security
risks and therefore ``not suitable for Government positions.''
\23\
---------------------------------------------------------------------------
\23\ New York Times, April 21, 1950; Congressional Record, 81st
Cong., 2nd sess., A7249, A3426-28; Committee on Expenditures in the
Executive Departments, Subcommittee on Investigations, Employment of
Homosexuals and Other Sex Perverts in Government, 81st Cong., 2nd sess
(Washington, D.C.: Government Printing Office, 1950), 4-5, 19.
---------------------------------------------------------------------------
The closed hearings shifted to two subsidiaries of the
State Department, the Voice of America and the U.S. information
libraries, which had come under the department's jurisdiction
following World War II. Dubious about mixing foreign policy and
propaganda, Secretary of State John Foster Dulles viewed the
Voice of America as an unwanted appendage and was not
unsympathetic to some housecleaning. It was not long, however,
before the Eisenhower administration began to worry that
McCarthy's effort to clean out the ``left-wing debris'' was
disrupting its own efforts to reorganize the government.
Senator McCarthy also looked into allegations of Communist
literature on the shelves of the U.S. Information Agency
libraries abroad. Rather than call the officials who
administered the libraries, the subcommittee subpoenaed the
authors of the books in question, along with scholars and
artists who traveled abroad on Fulbright scholarships. These
witnesses became innocent bystanders in the cross-fire between
the subcommittee and the administration as the senator expanded
his inquiry from examinations of files and books to issues of
espionage and sabotage, warning audiences: ``This is the era of
the Armageddon--that final all-out battle between light and
darkness foretold in the Bible.'' Zealousness in the search for
subversives made the senator unwilling to accept bureaucratic
explanations on such matters as personnel files and loyalty
board procedures in the State Department, the Government
Printing Office, and the U.S. Army.\24\
---------------------------------------------------------------------------
\24\ ``Battle Unjoined,'' Newsweek (March 23, 1953), 28; Newsweek
(April 27, 1953), 34; Address to the Sons of the American Revolution,
May 15, 1950, Congressional Record, 81st Cong., 2nd sess., A3787.
---------------------------------------------------------------------------
Many of McCarthy's investigations began with a flurry of
publicity and then faded away. Richard Rovere, who covered the
subcommittee's hearings for the New Yorker, observed that
investigation of the Voice of America was never completed. ``It
just stopped--its largest possibilities for tumult had
beenexhausted, and it trailed off into nothingness.'' \25\ Before
completing one investigation, the subcommittee would have launched
another. The hectic pace of hearings and the large number of witnesses
it called strained the subcommittee's staff resources. Counsels coped
by essentially asking the same questions of all witnesses. ``For the
most part you wouldn't have time to do all your homework on that, we
didn't have a big staff,'' commented chief clerk Ruth Watt. As a
result, the subcommittee occasionally subpoenaed the wrong individuals,
and used the closed hearings to winnow out cases of mistaken identity.
Some of those who were subpoenaed failed to appear. As Roy Cohn
complained of the authors whose books had appeared in overseas
libraries, ``we subpoena maybe fifty and five show up.'' \26\
---------------------------------------------------------------------------
\25\ Richard Rovere, Senator Joe McCarthy, (New York: Harcourt,
Brace, 1959), 159.
\26\ Ruth Young Watt oral history, 128.
---------------------------------------------------------------------------
When Senator McCarthy was preoccupied or uninterested in
the subject matter, other senators would occasionally chair the
hearings. Senator Charles Potter, for example, chaired a series
of hearings on Korean War atrocities whose style, demeanor, and
treatment of witnesses contrasted sharply with those that
Senator McCarthy conducted; they are included in these volumes
as a point of reference. Other hearings that stood apart in
tone and substance concerned the illegal trade with the
People's Republic of China, an investigation staffed by
assistant counsel Robert F. Kennedy.\27\
---------------------------------------------------------------------------
\27\ Gerald J. Bryan, ``Joseph McCarthy, Robert Kennedy, and the
Greek Shipping Crisis: A Study of Foreign Policy Rhetoric,''
Presidential Studies Quarterly, 24 (Winter 1994), 93-104.
---------------------------------------------------------------------------
The subcommittee's investigations exposed examples of lax
security in government agencies and defense contractors, but
they failed to substantiate the chairman's accusations of
subversion and espionage. Critics accused Senator McCarthy of
gross exaggerations, of conducting ``show trials'' rather than
fact-finding inquiries, of being careless and indifferent about
evidence, of treating witnesses cavalierly and of employing
irresponsible tactics. Indeed, the chairman showed no qualms
about using raw investigative files as evidence. His
willingness to break the established rules encouraged some
security officers and federal investigators to leak
investigative files to the subcommittee that they were
constrained by agency policy from revealing. Rather than lead
to the high-level officials he had expected to find, the leaked
security files shifted his attention to lower-level civil
servants. Since these civil servants lacked the freedom to
fight back in the political arena, they became ``easier targets
to bully.'' \28\ Even Roy Cohn conceded that McCarthy invited
much of the criticism ``with his penchant for the dramatic,''
and ``by making statements that could be construed as promising
too much.'' \29\
---------------------------------------------------------------------------
\28\ Earl Latham, The Communist Controversy in Washington, From the
New Deal to McCarthy (Cambridge: Harvard University Press, 1966), 323,
349-54; John Earl Haynes, Red Scare or Red Menance? American Communism
and Anticommunism in the Cold War Era (Chicago: Ivan R. Dee, 1996),
147, 154.
\29\ Cohn, McCarthy, 94-95.
---------------------------------------------------------------------------
Having predicted to the press that his inquiry into
conditions at Fort Monmouth would uncover espionage, Senator
McCarthy willingly accepted circumstantial evidence as grounds
for the dismissal of an employee from government-related
service. The subcommittee's dragnet included a number of
perplexed witnesses who had signed a nominating petition years
earliers, belonged to a union whose leadership included alleged
Communists, bought an insurance policy through an organization
later designated a Communist front organization, belonged to a
Great Books club that read Karl Marx among other authors, had
once dated a Communist, had relatives who were Communists, or
simply had the same name as a Communist. Thosewitnesses against
whom strong evidence of Communist activities existed tended to be
involved in labor organizing--hardly news since the Congress of
Industrial Organizations (CIO) had already expelled such unions as the
Federation of Architects, Engineers, Chemists and Technicians and the
United Electrical Workers, whom McCarthy investigated. Those witnesses
who named names of Communists with whom they had associated invariably
described union activities, and none corroborated any claims of
subversion and espionage.
Critics questioned Senator McCarthy's sincerity as a
Communist hunter, citing his penchant for privately embracing
those whom he publicly attacked; others considered him a
classic conspiracy theorist. Once he became convinced of the
existence of a conspiracy, nothing could dissuade him. He
exhibited impatience with those who saw things differently,
interpreted mistakes as deliberate actions, and suspected his
opponents of being part of the larger conspiracy. He would not
entertain alternative explanations and stood contemptuous of
doubters. A lack of evidence rarely deterred him or undermined
his convictions. If witnesses disagreed on the facts, someone
had to be lying. The Fort Monmouth investigation, for instance,
had been spurred by reports of information from the Army Signal
Corps laboratories turning up in Eastern Europe. Since Julius
Rosenberg had worked at Fort Monmouth, McCarthy and Cohn were
convinced that other Communist sympathizers were still
supplying secrets to the enemy. But the Soviet Union had been
an ally during the Second World War, and during that time had
openly designated representatives at the laboratories, making
espionage there superfluous. Nevertheless, McCarthy's pursuit
of a spy ring caused officials at Fort Monmouth to suspend
forty-two civilian employees. After the investigations, all but
two were reinstated in their former jobs.
Not until January 1954, did the remaining subcommittee
members adopt rules changes that Democrats had demanded, and
Senators McClellan, Jackson and Symington resumed their
membership on the subcommittee. These rules changes removed the
chairman's exclusive authority over staffing, and gave the
minority members the right to hire their own counsel. Whenever
the minority was unanimously opposed to holding a public
hearing, the issue would go to the full committee to determine
by majority vote. Also in 1954, the Republican Policy Committee
proposed rules changes that would require a quorum to be
present to hold hearings, and would prohibit holding hearings
outside of the District of Columbia or taking confidential
testimony unless authorized by a majority of committee members.
In 1955 the Permanent Subcommittee adopted rules similar to
those the Policy Committee recommended.\30\
---------------------------------------------------------------------------
\30\ New York Times, July 11, 19, 1953, January 24, 26, 27, 1954;
Congressional Record, 83rd Cong., 2nd sess, 2970.
---------------------------------------------------------------------------
Following the Army-McCarthy hearings of 1954, the Senate
censured Senator McCarthy in December 1954 for conduct
unbecoming of a senator. Court rulings in subsequent years had
a significant impact on later congressional investigations by
strengthening the rights of witnesses. Later in the 1950s,
members and staff of the Permanent Subcommittee on
Investigations joined with the Senate Labor and Public Welfare
Committee to form a special committee to investigate labor
racketeering, with Robert F. Kennedy as chief counsel.
Conducted in a more bipartisan manner and respectful of the
rights of witnesses, their successes helped to reverse the
negative image of congressional investigations fostered by
Senator McCarthy's freewheeling investigatory style.
Donald A. Ritchie,
Senate Historical Office.
SUBCOMMITTEE STAFF IN JANUARY 1953
Francis D. Flanagan, chief counsel (July 1, 1945 to June 30,
1953)
Gladys E. Montier, assistant clerk (July 1, 1945 to November
15, 1953)
Ruth Young Watt, chief clerk (February 10, 1947 to May 31,
1979)
Jerome S. Adlerman, assistant counsel (July 1, 1947 to August
3, 1953)
James E. Sheridan, investigator (July 1, 1947 to December 3,
1953)
Robert J. McElroy, investigator (April 1, 1948 to April 24,
1955)
James H. Thomas, assistant counsel (January 19, 1949 to
February 15, 1953)
Howell J. Hatcher, chief assistant counsel (March 15, 1949 to
April 15, 1953)
Edith H. Anderson, assistant clerk (January 26, 1951 to
February 9, 1957)
William A. Leece, assistant counsel (March 14, 1951 to March
16, 1953)
Martha Rose Myers, assistant clerk (April 5, 1951 to July 31,
1953)
Nina W. Sutton, assistant clerk (April 1, 1952 to January 31,
1955)
SUBCOMMITTEE STAFF APPOINTED IN 1953-1954
Roy M. Cohn, chief counsel (January 15, 1953 to August 13,
1954)
Robert F. Kennedy, assistant counsel (January 15, 1953 to
August 31, 1953), chief counsel to the minority
(February 23, 1954 to January 3, 1955)
Donald A. Surine, assistant counsel (January 22, 1953 to July
19, 1954)
Marbeth A. Miller, research clerk (February 1, 1953 to July 31,
1954)
Herbert Hawkins, investigator (February 1, 1953 to November 15,
1954)
Daniel G. Buckley, assistant counsel (February 1, 1953 to
February 28, 1955)
Aileen Lawrence, assistant clerk (February 1, 1953 to September
15, 1953)
Thomas W. LaVenia, assistant counsel, (February 16, 1953 to
February 28, 1955)
Donald F. O'Donnell, assistant counsel (March 16, 1953 to
September 30, 1954)
Pauline S. Lattimore, assistant clerk (March 16, 1953 to
September 30, 1954)
Christian E. Rogers, Jr., assistant counsel (March 16, 1953 to
August 21, 1953)
Howard Rushmore, research director (April 1, 1953 to July 12,
1953)
Christine Winslow, assistant clerk (April 2, 1953 to May 15,
1953)
Rosemary Engle, assistant clerk (May 25, 1953 to March 15,
1955)
Joseph B. Matthews, executive director (June 22, 1953 to July
18, 1953)
Mary E. Morrill, assistant clerk (June 24, 1953 to November 15,
1954)
Ann M. Grickis, assistant chief clerk (July 1, 1953 to January
31, 1954)
Francis P. Carr, Jr., executive director (July 16, 1953 to
October 31, 1954)
Karl H. Baarslag, research director (July 16, 1953 to September
30, 1953), (November 2, 1954 to November 17, 1954)
Frances P. Mims, assistant clerk (July 16, 1953 to December 31,
1954)
James M. Juliana, investigator (September 8, 1953 to October
12, 1958)
C. George Anastos, assistant counsel (September 21, 1953 to
February 28, 1955)
Maxine B. Buffalohide, assistant clerk (November 19, 1953 to
October 15, 1954)
Thomas J. Hurley, Jr., investigator (November 19, 1953 to
December 15, 1953)
Margaret W. Duckett, assistant clerk (November 23, 1953 to
October 15, 1954)
Charles A. Tracy, investigator (March 1, 1954 to February 28,
1955)
LaVern J. Duffy, investigator (March 19, 1954 to February 28,
1955)
Ray H. Jenkins, special counsel (April 14, 1954 to July 31,
1954)
Solis Horwitz, assistant counsel (April 14, 1954 to June 30,
1954)
Thomas R. Prewitt, assistant counsel (April 14, 1954 to June
30, 1954)
Charles A. Maner, secretary (April 14, 1954 to July 31, 1954)
Robert A. Collier, investigator (April 14, 1954 to May 31,
1954)
Regina R. Roman, research assistant (July 15, 1954 to February
28, 1955)
ACCOUNTS BY PARTICIPANTS
Adams, John G. Without Precedent: The Story of the Death of
McCarthyism. New York: Random House, 1983.
Cohn, Roy. McCarthy. New York: New American Library, 1968.
Ewald, William Bragg, Jr. Who Killed Joe McCarthy? New
York: Simon and Schuster, 1984.
Merson, Martin. The Private Diary of a Public Servant. New
York: Macmillan, 1955.
Potter, Charles E. Days of Shame. New York: Coward-McCann,
1965.
Rabinowitz, Victor. Unrepentent Leftist: A Lawyer's
Memoirs. Urbana: University of Illinois, 1996.
Watt, Ruth Young. Oral History Interview, Senate Historical
Office, 1979.
ACCOUNTS BY WITNESSES
Aptheker, Herbert, ``An Autobiographical Note,'' Journal of
American History, 87 (June 2002), 147-71.
Aronson, James. The Press and the Cold War. Boston: Beacon
Press. 1970.
Belfrage, Cedric. The American Inquisition, 1945-1960: A
Profile of the ``McCarthy Era.'' New York: Thunder's Mouth
Press, 1989. Reprint of 1973 edition.
Copland, Aaron and Vivian Perlis. Copland Since 1943. New
York: St. Martin's Press, 1989.
DuBois, Rachel Davis with Coran Okorodudu. All This and
Something More: Pioneering in Intercultural Education: An
Autobiography. Bryn Mawr, Penn.: Dorrance & Company, 1984.
Fast, Howard. Being Red. Boston: Houghton Mifflin, 1990.
Fast, Howard. The Naked God: the Writer and the Communist
Party. New York: Praeger, 1957.
Kaghan, Theodore. ``The McCarthyization of Theodore
Kaghan.'' The Reporter, 9 (July 21, 1953).
Kent, Rockwell. It's Me O Lord: The Autobiography of
Rockwell Kent. New York: Dodd, Mead, 1955.
Lamb, Edward. ``Trial by Battle'': The Case History of a
Washington Witch-Hunt. Santa Barbara, Calif.: Center for the
Study of Democratic Institutions, 1964.
Mandel, Bill. Saying No to Power. Berkeley, Calif.:
Creative Arts Book Company, 1999.
Matusow, Harvey. False Witness. New York: Cameron & Kahn,
1955.
O'Connor, Jessie Lloyd, Harvey O'Connor, and Susan M.
Bowler. Harvey and Jessie: A Couple of Radicals. Philadelphia:
Temple University Press, 1988.
Seaver, Edwin. So Far So Good: Recollections of a Life in
Publishing. Westport, Conn.: Lawrence Hill, 1986.
Seldes, George. Witness to a Century: Encounters with the
Noted, the Notorious, and Three SOBs. New York: Ballantine,
1987.
Service, John S. The Amerasia Papers: Some Problems in the
History of U.S.-China Relations. Berkeley: Center for Chinese
Studies, University of California, Berkeley, 1971.
Webster, Margaret. Don't Put Your Daughter on the Stage.
New York: Alfred A. Knopf, 1972.
Wechsler, James A. The Age of Suspicion. New York: Random
House, 1953.
Weyl, Nathaniel. The Battle Against Democracy. New York:
Thomas Y. Crowell, 1951.
WITNESSES WHO TESTIFIED IN EXECUTIVE SESSION, 1953
Ackerman, Lester
Adams, John
Aguimbau, Lawrence
Alfred, Benjamin
Allen, Jacob W.
Amen, John H.
Andrews, T. Coleman
Antell, Louis
Archdeacon, Henry Canning
Arnot, Charles P.
Aronson, James
Arrigo, Augustin
Arsenault, Jean A.
Auberjonois, Fernand
Auerbach, Sol (James S. Allen)
Austin, Clyde
Ayers, Stuart
Ayman, David
Back, Maj. Gen. George I.
Balog, Helen B.
Barrett, Edward W.
Bauknight, Ralph M.
Belfrage, Cedric
Belgrave, Gordon
Bennett, Herbert S.
Bentley, Elizabeth
Berger, Sigmond
Berinsky, Stanley
Berke, Sylvia
Bernstein, Barry S.
Berstein, Samuel
Bert, Joseph
Blattenberger, Raymond
Bogolepov, Igor
Bookbinder, Benjamin
Bortz, Louis
Bottisti, Albert J.
Boye, Gunnar
Boyer, Richard O.
Bolys, Witoutos S.
Brand, Millen
Brashear, Dewey Franklin
Bremmer, Sol
Brody, Edward
Brooks, Deton J., Jr.
Brooks, John Starling
Brothman, Abraham
Brown, Donald R.
Bruzzese, Larry
Bryan, Julien
Bryant, James M.
Budenz, Louis Francis
Burgum, Edwin B.
Burkes, Carter Lemuel
Burkhard, Henry F.
Burrows, Albert
Butensky, Seymour
Buttrey, Capt. Linton J.
Carlisle, John W.
Cavanna, Paul
Cernrey, Frank
Chasanow, Abraham
Chase, Allan
Chiaro, Teresa Mary
Coe, V. Frank
Cole, Eugene H.
Cole, Phillip L.
Coleman, Aaron H.
Compton, Wilson R.
Connors, W. Bradley
Cooke, Marvel
Cookson, Thomas K.
Copland, Aaron
Corwin, Jerome
Coyle, David Cushman
Cragg, Earl
Crenshaw, Craig
Crevisky, Joseph K.
Crouch, Paul
Daniels, Dr. Fred B.
Daniels, Cpl. Willie L.
Davies, Bennett
Delaney, Walter S.
Delcamp, Raymond
DeLuca, John Anthony
Donohue, Harry
Donovan, John L.
Drake, Emma Elizabeth
DuBois, Rachel Davis
Ducore, Harold
Duggan, James E.
Duke, Russell W.
d'Usseau, Arnaud
Ehrendfeld, Alice
Elitcher, Max
Elliott, Maxwell
Englander, Florence
Epstein, Markus
Evans, Gertrude
Everhardt, Roscoe Conkling
Evers, James
Falk, Harry
Fary, Leo
Fast, Howard
Feldman, Albert E.
Fenn, Gen. C.C.
Ferebee, Dorothy
Ferguson, Esther Leemov
Fernandez, Emanuel
Finkelstein, Saul
Finlayson, Donald R.
Fisher, Phillip
Fischler, Albert
Fister, Edward J.
Fleming, Alfred
Forsyth, Rear Admiral Edward Culligan
Francis, Joseph E.
Francisco, Abden
Freedman, David M.
Freeman, Joseph
Frese, Walter F.
Fried, Dorothy
Freidlander, Sidney
Friedman, Lawrence
Frolow, Jack
Fulling, Virgil H.
Furry, Wendell
Gaboriault, Norman
Galex, Irving Israel
Gallagher, Maj. James J.
Gebhardt, Joseph Arthur
Gebo, Lawrence Leo
Gelfan, Harriett Moore
George, Arthur
Gerber, Stanley
Gerhard, Karl
Giardina, Ignatius
Gift, Charles
Gisser, Samuel Paul
Glassman, Sidney
Goldberg, William P.
Goldfrank, Helen
Goodkind, Louis W.
Goodwin, Robert
Grottfried, Linda
Greenberg, Solomon
Greenblum, Carl
Greenman, Samuel I.
Gregory, Alexander
Grogan, Mrs. William
Gross, Alan Sterling
Grundfest, Harry
Guess, Cleta
Hacko, Paul F.
Hall, Alvin W.
Hammett, Dashiell
Hanley, Col. James M.
Hansen, Kenneth R.
Harris, Reed
Hawkins, Herbert S.
Hecker, Herbert F.
Henderson, Donald
Hermida, Higeno
Herrick, George Q.
Hewitt, Downs E.
Heyman, Ezekiel
Hindin, Alexander
Hipsley, S. Preston
Hiskey, Clarence F.
Holtzman, David
Homes, George
Huberman, Leo
Hughes, Henry Daniel
Hughes, Langston
Hunt, Mansfield
Hutner, Eleanor Glassman
Hutner, Eugene E.
Hyman, Harry
Iannarone, Ralph
Inslerman, Hans
Jacobs, Norman Stanley
Janowsky, Seymour
Jasik, Henry
Jassik, Charles
Jegabbi, Anna
Johnson, Wendell G.
Jones, Richard, Jr.
Jones, William Johnstone
Kaghan, Theodore
Kaplan, Jacob
Kaplan, Louis
Kaplan, Louis Leo
Katchen, Ira J.
Katz, Max
Kaufman, Mary M.
Keiser, Morris
Kelleher, Maj. James
Kent, Rockwell
Kerr, Mavlina M.
Kitty, Fred Joseph
Klein, Alex Henry
Kohler, E.L.
Kolowich, George J.
Komar, Joseph Paul
Kornfield, Isadore
Koss, Howard
Kostora, Lt. Col. Lee H.
Kotch, Donald Joseph
Krau, Maj. Harold N.
Kreider, Cpl. Lloyd D.
Kretzmann, Edwin
Krummel, Lillian
Lamont, Corliss
Lautner, John
Lawton, Maj. Gen. Kirke B.
Layne, Joseph Linton
Lee, Bernard
Leeds, Paul M.
Leeds, Sherwood
Lenkeith, Nancy
LePage, Wilbur
Lepato, Abraham
Levine, Martin
Levine, Ruth
Levine, Samuel
Levitsky, Joseph
Levitties, Harry William
Lewis, Bernard
Lewis, Helen B.
Lewis, Napthtali
Lichter, David
Lindsay, Col Wallace W.
Linfield, David
Lipel, Bernard
Lipson, Harry
Lofek, Vachlav
Lonnie, William Patrick
Lowrey, Vernon Booth
Lundmark, Carl J.
Lyons, Edward J.
Lyons, Florence Fowler
Lynch, Michael J.
Mabbskka, Karl T.
Makarounis, Capt. Alexander G.
Mandel, William Marx
Mangione, Jerre G.
Markward, Mary S.
Martin, Bernard
Martin, Pfc. John E.
Matles, James J.
Mastrianni, William J.
Mathews, Troup
Martinez-Locayo, Juan Jose
Matousek, Helen
Matson, John E.
Matta, Sgt. George J.
McJennett, John Francis, Jr.
McKee, Samuel
McKesson, Lewis J.
McNichols, 1st Lt. Henry J., Jr.
Mellor, Ernest C.
Merold, Harold
Miller, Leo M.
Miller, Murray
Miller, Robert C.
Mills, Col. John V.
Mills, Nathaniel
Mins, Leonard E.
Moon, Susan
Moran, James M.
Morgan, Edward P.
Morrill, Donald Herbert
Morris, Melvin M.
Morris, Sam
Morton, Thruston B.
Mullins, Sgt. Orville R.
Murphy, Curtis Quinten
Murray, H. Donald
Nachmais, Harry M.
Naimon, Alexander
Narell, Murray
Nelson, Elba Chase
Northrup, Robert Pierson
O'Connor, Harvey
Okun, Jack
Oliveri, Joseph John
Omanson, Sarah
Owens, Arthur Lee
Page, Paul D., Jr.
Palmiero, Francesco
Palmiero, Mary Columbo
Pappas, Theodore
Partridge, Gen. Richard C.
Pastorinsky, Harry
Pataki, Emery
Pataki, Ernest
Pataki, Vivian Glassman
Peacock, Francis F.
Percoff, Joseph H.
Pernice, John
Petrov, Vladimir
Phillips, James B.
Piekarski, Witulad
Pomerentz, Samuel
Pope, Lafayette
Powell, Doris Walters
Puhan, Alfred
Rabinowitz, Seymour
Rabinowitz, Victor
Ranney, Russell Gaylord
Reiss, Julius
Rhoden, Sgt. Barry F.
Rich, Stanley R.
Riehs, Rudolph C.
Rissland, Rudolph
Robeson, Eslanda Goode
Rogers, Lt. Col. James T.
Rollins, Harold S.
Rosenbaum, Terry
Rosenheim, Irving
Rosmovsky, Peter
Rothschild, Edward M.
Rothschild, Esther B.
Rothstein, Jerome
Ryan, Robert J.
Sachs, Harvey
Sack, Samuel
Saltzman, William
Sardella, John
Saunders, John D.
Savitt, Morris
Schickler, John
Schnee, Leon
Schutz, Ralph
Schmidt, Martin
Scott, James P.
Seaver, Edwin
Seay, Perry
Segner, Samuel Martin
Seifert, Doris
Seldes, George
Service, John Stewart
Shadowitz, Albert
Shapiro, Philip Joseph
Shapiro, Shirley
Sharps, Sgt. Robert L.
Sheehan, Capt. Benjamin
Shoiket, Henry
Sidorovich, Ann
Sidorovich, Michael
Siegel, Paul
Sillers, Frederick
Silverberg, Muriel
Simkovich, John R.
Singer, Bertha
Smith, Newbern
Snyder, Samuel
Socol, Albert
Solomon, Isadore
Spence, Adolphus Nichols
Spiro, Norman
Stokes, Irving
Stolberg, Sidney
Stoner, Frank E.
Studenberg, Irving
Sussman, Nathan
Swing, Raymond Gram
Tate, Jack B.
Taylor, William H.
Thomas, Charles S.
Thompson, James F.
Thompson, Robert L.
Toumanoff, Vladimir
Treffery, Sgt. Wendell
Ullmann, Marcel
Ullman, William Ludwig
Unger, Abraham
Urey, Harold C.
Van Kleeck, Mary
Varley, Dimitri
Vedeler, Harold C.
Volp, Louis
Walker, Alfred C.
Walsh, James John
Watters, Sgt. John L., Jr.
Way, Kenneth John
Webster, Margaret
Wechsler, James A.
Weinel, Sgt. Carey H.
Weinstein, James
Wells, O.V.
Wells, Roy Hudson, Jr.
Weyl, Nathaniel
Whitehorne, Lt. Col. J.W. III
Wilder, William Richmond
Wilkerson, Doxey
Willi, George
Wolman, Benjamin
Wolman, Diana
Yamins, Haym G.
Young, Philip
Zucker, Jack
Zuckerman, Benjamin
PUBLIC HEARINGS OF SENATE PERMANENT SUBCOM-
MITTEE ON INVESTIGATIONS, PUBLISHED IN 1953
Eligibility Audits--Federal Security Agency, February 3
State Department--File Survey, Part 1, February 4, 5, 6
State Department--File Survey, Part 2, February 16, 20
State Department Information Program--Voice of America, Part 1,
February 16, 17
State Department Information Program--Voice of America, Part 2,
February 18, 19
State Department Information Program--Voice of America, Part 3,
February 20, 28
State Department Information Program--Voice of America, Part 4,
March 2
State Department Information Program--Voice of America, Part 5,
March 3
State Department Information Program--Voice of America, Part 6,
March 4
State Department Information Program--Voice of America, Part 7,
March 5, 6
State Department Information Program--Voice of America, Part 8,
March 12
State Department Information Program--Voice of America, Part 9,
March 13, 16, 19
State Department Information Program--Voice of America, Part
10, April 1, Composite Index
Stockpiling--Palm Oil, February 25
State Department Information Program--Information Centers, Part
1, March 24, 25, 26
State Department Information Program--Information Centers, Part
2, March 27, April 1, 2
State Department Information Program--Information Centers, Part
3, April 29, May 5
State Department Information Program--Information Centers, Part
4, April 24
State Department Information Program--Information Centers, Part
5, May 5
State Department Information Program--Information Centers, Part
6, May 6, 14
State Department Information Program--Information Centers, Part
7, July 1, 2, 7
State Department Information Program--Information Centers, Part
8, July 14
State Department Information Program--Information Centers, Part
9, August 5, Composite Index
Control of Trade with the Soviet Bloc, Part 1, March 30
Control of Trade with the Soviet Bloc, Part 2, May 4, 20
Austrian Incident, May 29, June 5, 8
State Department--Student-Teacher Exchange program, June 10, 19
Communist Party Activities, Western Pennsylvania, June 18
U.S. v. Fallbrook Public Utility District, et al., July 2
Security--Government Printing Office, Part 1, August 17, 18
Security--Government Printing Office, Part 2, August 19, 20,
22, 29
Communist Infiltration Among Army Civilian Workers, September
8, 11
Security--United Nations, Part 1, September 17, 18
Security--United Nations, Part 2, September 15
Communist Infiltration in the Army, Part 1, September 28
Commuist Infiltration in the Army, Part 2, September 21
Transfer of Occupation Currency Plates--Espionage Phase,
October 20, 21
Army Signal Corps--Subversion and Espionage, Part 1, October
22, November 24, 15, December 8
Army Signal Corps--Subversion and Espionage, Part 2, December 9
Army Signal Corps--Subversion and Espionage, Part 3, December
10, 11
Army Signal Corps--Subversion and Espionage, Part 4, December
14
Army Signal Corps--Subversion and Espionage, Part 5, December
15
Army Signal Corps--Subversion and Espionage, Part 6, December
16
Army Signal Corps--Subversion and Espionage, Part 7, December
17
Korean War Atrocities, Part 1, December 2
Korean War Atrocities, Part 2, December 3
Korean War Atrocities, Part 3, December 4
WITNESSES WHO TESTIFIED IN PUBLIC SESSION, 1953
Abbott, Lt. Col. Robert
Ackerman, Lester
Adlerman, Jerome S.
Allen, Maj. Gen. Frank A., Jr.
Allen, James S.
Aptheker, Herbert
Archdeacon, Henry Canning
Aronson, James
Auberjonois, Fernand
Ayers, Stuart
Baarslag, Karl
Balog, Helen B.
Barmine, Alexander
Bauer, Robert
Beardwood, Jack
Belfrage, Cedric H.
Bell, Daniel W.
Bentley, Elizabeth
Berke, Sylvia
Bernstein, Barry S.
Blattenberger, Raymond C.
Bogolepov, Igor
Booth, William N.
Bortz, Louis
Boyer, Richard O.
Boykin, Samuel D.
Bracken, Thomas E.
Brand, Millen
Browder, Earl
Budenz, Louis F.
Burgum, Edward B.
Buttrey, Capt. Linton J.
Caldwell, John C.
Carrigan, Charles B.
Cocutz, John
Coe, V. Frank
Cole, Philip L.
Coleman, Aaron Hyman
Compton, Wilson R.
Cooke, Marvel J.
Conners, W. Bradley
Creed, Donald R.
Crouch, Paul
Cupps, Halbert
Daniels, Cpl. Willie L.
DeLuca, John Anthony
Dooher, Gerald F.P.
Duggan, James E.
d'Usseau, Arnaud
Epstein, Julius
Evans, Gertrude
Fast, Howard
Finn, Maj. Frank M.
Foner, Philip
Forbes, Russell
Ford, John W.
Francis, Robert J.
Freedman, David M.
Freeman, Frederick
Fulling, Virgil H.
Gelfan, Harriet Moore
Ghosh, Stanley S.
Gift, Charles
Gillett, Glenn D.
Glasser, Harold
Glassman, Sidney
Glazer, Sidney
Goldfrank, Helen
Goldman, Robert B.
Gorn, Lt. Col. John W.
Gropper, William
Grundfest, Harry
Hammett, Dashiell
Halaby, N.E.
Hall, Alvin W.
Hanley, Col. James M.
Hansen, Kenneth R.
Harris, Reed
Henderson, Donald
Herrimann, Frederick
Heyman, Ezekiel
Hipsley, S. Preston
Hlavaty, Julius H.
Hoey, Jane M.
Horneffer, Michael D.
Huberman, Leo
Hughes, Langston
Hunter, Eleanor Glassman
Hyman, Harry
Jaramillo, Arturo J.
Johnstone, William C., Jr.
Kaghan, Theodore
Kaplan, Louis
Kennedy, Robert F.
Kent, Rockwell
Kereles, Gabriel
Kimball, Arthur A.
Kinard, Charles Edward
King, Clyde Nelson
Kitty, Fred Joseph
Kreider, Cpl. Lloyd D.
Kretzmann, Edwin M.J.
Lamont, Corliss
Lautner, John
Leddy, John M.
Lenkeith, Nancy
Levine, Ruth
Levitsky, Joseph
Lewis, Helen
Lewis, Naphtali
Linfield, David
Locke, Maj. William D.
Lotz, Walter Edward, Jr.
Lumpkin, Grace
Lundmark, Carl J.
Lyons, Roger
McKee, Samuel
McKesson, Lewis J.
McNichols, Lt. Henry J., Jr.
Maier, Howard
Makarounis, Capt. Alexander G.
Mandel, William Marx
Manring, Roy Paul, Jr.
Markward, Mary S.
Martin, Pfc. John E.
Mason, Arthur S.
Matson, John E.
Matta, Sgt. George
Matusow, Harvey
Mazzei, Joseph D.
Meade, Everard K., Jr.
Mellor, Ernest C.
Merold, Harry D.
Milano, William L.
Mins, Leonard E.
Moran, James B.
Morris, Sam
Mullins, Sgt. Orville R.
Nash, Frank C.
O'Connor, Harvey
Pataki, Ernest
Patridge, Gen. Richard C.
Percoff, Joseph H.
Petrov, Vladimir
Phillips, James B.
Piekarski, Witulad
Pratt, Haraden
Puhan, Alfred
Reber, Maj. Gen. Miles
Reid, Andrew J.
Reiss, Julius
Rhoden, Sgt. Barry F.
Richmond, Alfred C.
Ridgeway, Gen. Matthew B.
Robeson, Eslanda Goode
Rogers, Lt. Col. James T.
Rogge, O. John
Rosinger, Lawrence K.
Ross, Julius
Rothschild, Edward M.
Rothschild, Esther B.
Rushmore, Howard
Sachs, Howard R.
Salisbury, Joseph E.
Sarant, Louise
Saunders, John
Savitt, Morris
Schappes, Morris U.
Seaver, Edwin
Shadowitz, Albert
Sharpe, Sgt. Charles Robert
Shephard, Patricia
Shoiket, Henry N.
Shulz, Edward K.
Sillers, Frederick
Silvermaster, Nathan Gregory
Sims, Albert G.
Smith, Lt. James
Smith, Newbern
Synder, Samuel Joseph
Socol, Albert
Spence, Adolophus Nichols
Spence, Clifford H.
Stassen, Harold E.
Stern, Dr. Bernhard J.
Stolberg, Sidney
Strong, Allen
Sussman, Nathan
Syran, Arthur G.
Taylor, Donald K.
Taylor, William C.
Teto, William H.
Thompson, James F.
Tippett, Frank D.
Todd, Lt. Col. Jack R.
Toumanoff, Vladimir I.
Treffery, Sgt. Wendell
Ullmann, Marcel
Ullman, William Ludwig
Unger, Abraham
Utley, Freda
Veldus, A.C.
Vernier, Paul
Walsh, A.J.
Watters, Sgt. John L., Jr.
Wechsler, James A.
Weinel, Sgt. Carey H.
Wetfish, Gene
Wilkerson, Doxey A.
Wolfe, Col. Claudius O.
Wolman, Benjamin
Wolman, Diana Moldover
Wu, Kwant Tsing
Zucker, Jack
RUSSELL W. DUKE
[Editor's note.--The inquiry into the alleged influence-
peddling of Russell W. Duke (1907-1978) in U.S. tax cases and
his cooperation with Washington lawyer Edward P. Morgan (1913-
1986), was a continuation of similar investigations that the
subcommittee had conducted during the previous Congress, but
the subcommittee's new chairman, Senator McCarthy, had a
personal interest in both these men. Russell Duke, who lived in
Oregon, maintained close ties to Senator Wayne Morse, one of
McCarthy's outspoken critics, while Edward Morgan had served as
counsel to the Foreign Relations Committee subcommittee,
chaired by Senator Millard Tydings, that examined McCarthy's
Wheeling, West Virginia, charges about Communists in the State
Department. The Tydings subcommittee rejected McCarthy's claims
as a ``fraud and a hoax.'' In 1952, Morgan had campaigned
against McCarthy's reelection.
The subcommittee seized all of Duke's records in a garage
in San Francisco, and subpoenaed all of Morgan's records
relating to Duke. At the same time, a subcommittee of the House
Judiciary Committee also investigated the case, and two members
of that committee audited the Senate subcommittee's executive
session.
Duke was served with a subpoena on January 11, 1953. After
testifying in executive session, he was informed that he would
need to reappear to testify in public on February 2. But the
public hearing was postponed ``until some other date to be
designated.'' Duke was later instructed to appear on April 13,
but had already gone to Canada. Informed that the subpoena was
``a continuing one,'' he was ordered to return. When he failed
to appear, the subcommittee unanimously voted him in contempt.
In November, Duke was arrested in Cleveland, Ohio, and brought
to Washington to stand trial. On January 26, 1954, Judge
Burnita S. Matthews of the U.S. District Court for the District
of Columbia found him not guilty of contempt for failing to
honor a subpoena in April that had originally been issued for
January 15. Senator McCarthy vowed to issue another subpoena.
``If Duke refuses to obey this one, we'll have him cited
again,'' he told reporters, ``and this time I hope his case is
heard by a judge who knows the law.'' However, the subcommittee
did not pursue the matter any further.
Russell W. Duke did not testify in public session.]
----------
THURSDAY, JANUARY 15, 1953
U.S. Senate,
Senate Permanent Subcommittee on Investigations
of the Committee on Government Operations,
Washington, DC.
The subcommittee met, pursuant to Senate Resolution 251,
agreed to January 24, 1952, in room 357 of the Senate Office
Building, Senator Joseph R. McCarthy, chairman, presiding.
Present: Senator Joseph R. McCarthy, Republican, Wisconsin;
Senator Karl E. Mundt, Republican, South Dakota; Senator
Charles E. Potter, Republican, Michigan; Senator John L.
McClellan, Democrat, Arkansas; Senator Henry M. Jackson,
Democrat, Washington; Senator Stuart Symington, Democrat,
Missouri.
Present also: Representative Kenneth A. Keating,
Republican, New York; Representative Patrick J. Hillings,
Republican, California.
Present also: Francis D. Flanagan, general counsel; Robert
Collier, chief counsel, House Subcommittee to Investigate the
Department of Justice, Committee on the Judiciary; William A.
Leece, assistant counsel; Robert F. Kennedy, assistant counsel;
Ruth Young Watt, chief clerk.
The Chairman. We will have the record show that present are
Senator Potter, Senator McClellan, Senator Jackson, Senator
Symington, and Senator McCarthy, and Congressman Keating of the
House Judiciary Subcommittee, and Congressman Patrick Hillings.
Senator McClellan. Mr. Chairman, I should report to you
that pursuant to the resolution or motion adopted at the
meeting of the full committee on yesterday, I have appointed as
members of the minority of this subcommittee the following
Senator Symington, Senator Jackson, and myself.
The Chairman. Let the record show that yesterday in the
full committee meeting with a quorum present, the motion was
made, seconded and passed that the four Republican members,
Senator Potter, Senator McCarthy, Senator Dirksen, and Senator
Mundt, were confirmed as members of the subcommittee, and also
confirmed were the members to be subsequently nominated or
appointed by Senator McClellan, which has now been done.
Mr. Duke, in this matter before the subcommittee, do you
solemnly swear to tell the truth, the whole truth, and nothing
but the truth, so help you God?
Mr. Duke. I do.
The Chairman. Mr. Duke, before we start, I would like to
make a suggestion, due to the fact that you are here without
counsel. Time after time, witnesses have come and they have not
been guilty of any criminal activity of any kind until they
testify, and they make the mistake of thinking they can
outsmart the committee and make the mistake of lying, in other
words, committing perjury. So I would like to suggest to you
for your own protection that you do one of two things: that you
either tell the truth, or that you refuse to answer. You have a
right to refuse to answer any question the answer to which you
think might incriminate you. So I would suggest to you that for
your own protection you either tell us the truth and nothing
but the truth, or else avail yourself of the privilege of
refusal to answer.
TESTIMONY OF RUSSELL W. DUKE
Mr. Flanagan. What is your full name and your permanent
address?
Mr. Duke. Russell W. Duke. Unfortunately, I don't have any
permanent address.
Mr. Flanagan. Is Russell W. Duke your legal name now?
Mr. Duke. It has been for years, yes, it is my legal name.
Mr. Flanagan. Did you previously have another name?
Mr. Duke. Yes.
Mr. Flanagan. What was that?
Mr. Duke. D-u-t-k-o.
Mr. Flanagan. Where were you born?
Mr. Duke. St. Clair, Pennsylvania.
Mr. Flanagan. What was your birth date?
Mr. Duke. February 11, 1907.
Mr. Flanagan. When did you first begin to engage in the
public relations business?
Mr. Duke. I have--about 1934 or 1935.
Mr. Flanagan. You have been engaged in that business
continuously?
Mr. Duke. Not continuously, no.
Mr. Flanagan. When did you engage in any other business
since 1934 or 1935, other than public relations?
Mr. Duke. I have continuously been engaged in various
businesses. I have been in the manufacturing business, in the
sales business, the procurement business, the real estate
business.
Mr. Flanagan. When did you first begin to act as public
relations counsel or representative in cases involving the
federal government, such as tax cases, claims, and the like?
Mr. Duke. In about 1946, '47, '48.
Mr. Flanagan. Can you recite the number of cases, that is,
federal tax cases, in which you were employed as a public
relations counsel?
Mr. Duke. Not until I look in my books to be able to tell
you that.
Mr. Flanagan. But you were employed in a number of federal
tax cases as public relations counsel?
Mr. Duke. I was.
Mr. Flanagan. What were your duties and responsibilities,
as you saw them, as a public relations counsel in a tax case?
Mr. Duke. Well, I learned that in a lot of cases, upon
investigating the case after the Internal Revenue Department
got through with it, there were a lot of errors created by the
agent that put a burden upon the taxpayer, over-assessed him
various and sundry amounts that should not have been assessed,
and I would engage certified public accountants to recheck the
books, definitely determine if these over-assessments were
justified or not, and then either call it to the attention of
the Internal Revenue Department, the various heads of the
Internal Revenue Department, and if they did not do anything
about it, then advise the client to secure competent tax
counsel.
Mr. Flanagan. Are you an accountant?
Mr. Duke. No, but I can do book work.
Mr. Flanagan. Have you ever had any accounting training of
any kind?
Mr. Duke. Practical, yes. I was with Sears, Roebuck Company
for seven-and-a-half years.
Mr. Flanagan. As an accountant?
Mr. Duke. No, in their legal department.
Mr. Flanagan. What did you do in the legal department?
Mr. Duke. I was assigned to various stores, and I had
forty-six stores in eight states, and my position was to go to
the various stores and go over their accounts and check them to
see if there was any discrepancy in them, and find out if all
of the accounts are live.
Mr. Flanagan. You were an auditor, in other words?
Mr. Duke. Not as an auditor; more of an investigator.
Mr. Flanagan. Are you a lawyer?
Mr. Duke. No.
Mr. Flanagan. Can you tell us the names of the various
counsel that you recommended in some of these tax cases that
you were public relations counsel for?
Mr. Duke. Oh, yes. I recommended probably in the past,
prior to 1946 or 1947----
Mr. Flanagan. I am not talking about prior; I am talking of
since then.
Mr. Duke. Bob Murphy from Keenan & Murphy; Morgan, of
Welch, Mott & Morgan--again, I would have to look at my files
to refresh my memory, because I have recommended various legal
firms.
Mr. Flanagan. Did you ever recommend Conrad Hubner, of San
Francisco?
Mr. Duke. On the coast I have, yes.
Mr. Flanagan. Who else on the coast have you recommended as
an attorney?
Mr. Duke. Stephen Chadwick, quite a prominent attorney in
Seattle, and I don't recall. Again, I would have to go into my
files to check.
Mr. Flanagan. Do you recall the specific cases in which you
had an interest and in which Edward P. Morgan also had an
interest as a lawyer?
Mr. Duke. Some of them I can recall, but not all of them.
Mr. Flanagan. Can you recite those that you can recall?
Mr. Duke. There was Dr. Ting Lee, Wilcox----
Mr. Flanagan. Where was Ting Lee?
Mr. Duke. Portland, Oregon.
Mr. Flanagan. And the next case?
Mr. Duke. And the Noble Wilcoxon case in Sacramento.
Mr. Flanagan. Any others?
Mr. Duke. Again, I would have to check the file.
Mr. Flanagan. How about the Jack Glass case?
Mr. Duke. I referred that to Morgan.
Mr. Flanagan. How about the Guy Schafer case in Oakland?
Mr. Duke. I referred that to Morgan.
Mr. Flanagan. How about the Harry Blumenthal case in San
Francisco?
Mr. Duke. Well, that was a case wherein Hubner wanted me to
get him counsel in Washington, and through me he associated
with Morgan on that case.
Mr. Flanagan. Did you ever attempt to get Morgan in as an
attorney in the Inez Burns case in San Francisco?
Mr, Duke. No. I was requested in San Francisco some time
ago to get information on the Inez Burns case back here, to
find out why it was laying dormant in San Francisco.
Mr Flanagan. Who requested you to do that?
Mr. Duke. I don't recall whether it was the Burns attorney
or whom, right at the moment, who it was, and I came back here
and inquired of the Internal Revenue Department and told them
that the case was laying dormant back there and it had been
dormant for about two years, and they wanted to find out why it
wasn't coming to a head. I couldn't find out anything, and so I
requested Mr. Wilson, the administrative aide of Senator
Knowland's office, if he would make inquiry of the Internal
Revenue Department to find out why the Internal Revenue
Department wasn't bringing the case to a head.\1\
---------------------------------------------------------------------------
\1\ George F. Wilson, administrative assistant to Senator William
F. Knowland (Republican-California).
---------------------------------------------------------------------------
He did find out, or learn why, and sent me a copy of the
letter; and at the same date I was here, I inquired of Mr
Morgan if he could aid me in finding out why the case was
laying dormant, and that was about the gist of the Inez Burns
case.
Mr. Flanagan. Did Mr. Morgan find out anything for you?
Mr. Duke. The letter is there, and will probably answer it
best, and I don't recall what was in the body of that letter.
Mr. Flanagan. Did he get a fee out of that case?
Mr. Duke. Did he?
Mr. Flanagan. Yes.
Mr. Duke. I don't think so. I doubt it very much. I don't
know.
Mr. Flanagan. Now, how would you locate these tax cases,
and how would you be brought into them?
Mr. Duke. Well, there were various means, and some
accounting firms would call me, and I knew quite a number of
accounting firms on the coast, and I knew a lot of people that
had friends that were involved in these tax cases who asked if
I could help them out in any way.
Mr. Flanagan. In other words, they would come to you?
Mr. Duke. Some cases, in some instances, yes.
Mr. Flanagan. In some instances did you go to them and
suggest that they retain you?
Mr. Duke. I sure did.
Mr. Flanagan. Can you tell us a case in which you went to
either the taxpayer's lawyer or someone connected with it, and
told them that they ought to retain your services?
Mr. Duke. The Wilcoxon case is fresh in my memory.
Mr. Flanagan. That is the Noble Wilcoxon case at
Sacramento?
Mr. Duke. That is right.
Mr. Flanagan. To whom did you go?
Mr. Duke. I went to Mr. Wilcoxon.
Mr. Flanagan. What did you tell him?
Mr. Duke. I don't recall right now, I really don't. If you
want me to tell you verbatim what I told him, I wouldn't
recall. I could probably give you an idea.
Mr. Flanagan. Give us in substance what you told him.
Mr. Duke. I probably told him, knowing he was in tax
difficulties, and asked him if he had competent counsel, and
how far they had gone with it, and checked his records and
books, and found probably a discrepancy in his records or
books, where the Internal Revenue Department made errors, and
then advised him that he should get Washington counsel, someone
that had good legal training in tax matters.
Mr. Flanagan. How did you find out that he was in tax
trouble?
Mr. Duke. I don't recall right now.
Mr. Flanagan. You have no idea how you found out?
Mr. Duke. I wouldn't say I have no idea. At the moment I
haven't. If I could sit down and go through my files, probably
there is something there that would refresh my memory.
Mr. Flanagan. What is your best present recollection as to
how that case came to your attention?
Mr. Duke. If I gave you an answer to that, it would be just
guesswork, and I really couldn't answer that until, as I say, I
had checked through the entire file in the Wilcoxon case.
Mr. Flanagan. I have here a letter, Mr. Duke, or a copy of
a letter, dated September 10, 1949, which was taken from your
files. This letter is addressed to Edward P. Morgan in
Washington and, being a copy, it has your typed signature on
it. We will put this in the record, but for the present I will
just read certain paragraphs from it and ask you some questions
about it.
[The letter referred to was marked as committee's Exhibit,
No. 11 January 15, 1953, R. W. Duke, and is as follows:]
Portland 13, Oregon,
September 10, 1949.
Mr. Ed Morgan,
Welsh, Mott & Morgan, 7100 Erickson Building,
Fourteen Northwest, Washington, DC.
Dear Ed: Since my conversation with you over the phone regarding
Senator Morse, yourself, and myself discussed in your office, I can
only repeat as I stated in my previous letter--Senator Morse, his
integrity, honesty, and sincerity is something to be highly admired and
respected. At no time have I ever known him to make an idle promise. I
shall see that you will be given assurance in person immediately after
the 12th of this month complying with the request you had made of me.
Talent, Ed, is what I want. I am going to make my tour of the South
(incidentally, Nevada and Idaho are good territory) and make one
complete thrust to bring all the talent I possibly can to Washington.
I understand there are 23 applications in Oregon for television.
Can you confirm that?
Well, Ed, oil lands in Oregon are going to surprise the nation. In
delving through old records in the capitol recently, I ran across a
survey and drilling tests that were made in a certain county by the
Texas Oil Company, and their findings are so important that they will
illicit from anyone who would go over them a thrilling surprise. At the
time of the Teapot Dome scandal, Texas Oil Company, in conjunction with
Sinclair Company, was contemplating stealing the leases for this
particular area; sank seven wells; and each well was capped off as soon
as Fall, Dohney, and Daugherty were indicted, and it has been a dead
duck ever since. People filed homesteads on this particular land and
have since cut out the forests for lumber purposes and have abandoned
these lands. They are available from the country for the price of
delinquent taxes, which among to $200 per 160 acre sections. If you can
get a company to drill on this established oil land, would you be
interested in my writing you in as a full partner in owning these
various sections. As I stated above, your cost would be negligible. Let
me know at the earliest possible date, and I will exercise the
auctions.
How are the horses running? I refer to Sir Laurel Guy, the Oakland
owned horse, and the Sacramento owned horse.
With best personal regards, I remain.
Sincerely yours,
R.W. Duke.
Mr. Flanagan. In the second paragraph of this letter you
say:
Talent, Ed, is what I want. I am going to make my tour of
the South (incidentally, Nevada and Idaho are good territory)
and make one complete thrust to bring all the talent I possibly
can to Washington.
What did you mean there?
Mr. Duke. Could I read the entire letter, and that would
give me a better knowledge than just one paragraph.
Mr. Flanagan. Yes.
Mr. Duke. To answer that, it could mean quite a lot of
things. It could mean cases on television. At that time there
were a lot of applications from Oregon for television stations,
and in fact, I understand this letter states there were twenty-
three. It could mean most anything, it actually could, because
we were at that time contemplating going into leasing oil lands
through Oregon and Wyoming. So what it means now, I have no
recollection of.
Mr. Flanagan. Does it mean that you would search up cases,
either tax cases or television application cases, or other
cases involving the federal government, and refer those cases
to Edward P. Morgan?
Mr. Duke. It is possible that is what it meant.
Mr. Flanagan. Well, does it mean that or doesn't it mean
that?
Mr. Duke. For me to say yes now, I can't bring my mind
back----
Mr. Flanagan. Do you think it means that?
Mr. Duke. It is possible that it does.
Mr. Flanagan. Did you have any arrangement with Morgan that
you would, as you say, bird-dog cases for him out in the West?
Mr. Duke. Only in this respect: I had told him when I met
him and found out that he was specialized in television, and he
was specialized in tax cases, and he had taught taxes at one
time, I told him that I had a lot of people out on the coast
that approached me on cases, and would he be interested if I
would send these cases to him; and he told me that he would
have to talk to the attorneys, or to the clients of these
people, and go into the matter of the case, and then he would
determine after discussing it with the client and with the
attorney whether he would take the case.
Mr. Flanagan. What would you get out of such an
arrangement?
Mr. Duke. Well, if I ran across a case like that, I would
try to sell my services as a public relations to him.
Mr. Flanagan. Did you have any arrangement, directly or
indirectly, with Morgan whereby you would get a forwarding fee?
Mr. Duke. No, none whatsoever.
Mr. Flanagan. Did you ever have a discussion with Mr.
Morgan in which he was going to set up a West Coast law office
to handle some of these cases?
Mr. Duke. I didn't have the discussion. Mr. Morgan stated
at one time that there was a tremendous possibility for another
legal office on the West Coast, because there were various
attorneys here that had opened branches on the coast, and he
was contemplating doing the same thing on the coast.
Mr. Flanagan. Did you ever obtain any money from Morgan?
Mr. Duke. I borrowed some money from him, yes.
Mr. Flanagan. On how many occasions did you borrow money?
Mr. Duke. I only borrowed money from him one time.
Mr. Flanagan. When was that?
Mr. Duke. I don't recall.
Mr. Flanagan. How much?
Mr. Duke. It was $500.
Mr. Flanagan. Did he pay you by check or by cash?
Mr. Duke. He gave me a check.
Mr. Flanagan. Did you sign any note or other evidence of
the debt?
Mr. Duke. I think I did, I am not sure.
Mr. Flanagan. Did you pay it?
Mr. Duke. I haven't had a chance.
Mr. Flanagan. Is that the only occasion on which you got
money from Morgan or his firm?
Mr. Duke. That is right.
Mr. Flanagan. Either directly or indirectly?
Mr. Duke. That is right.
Mr. Flanagan. Did you ever pay any money to Morgan or his
firm, either directly or indirectly?
Mr. Duke. Indirectly, these clients that came there would
be indirectly.
Mr. Flanagan. I mean you, yourself.
Mr. Duke. Not to my knowledge.
Mr. Flanagan. Did you ever split any fees with Morgan?
Mr. Duke. No, I never split any fees with Ed Morgan.
Mr. Flanagan. You never had a referral fee from him?
Mr. Duke. No.
Mr. Flanagan. Did you ever send him a referral fee?
Mr. Duke. No, not to my knowledge, I never sent him any
money.
Mr. Flanagan. You have read this letter of September 10?
Mr. Duke. I have.
Mr. Flanagan. I notice in the second to last paragraph it
reads as follows:
How are the horses running? I refer to Sir Laurel Guy, the
Oakland owned horse, and the Sacramento owned horse.
What are you talking about there?
Mr. Duke. That again, I am not sure of. Right now I
couldn't answer it. It might have been Sir Laurel Guy is a
horse owned now by Senator Morse and it was shown here, and
there is a Barbara Hunt in Sacramento that has a horse shown
here, and I could have been referring to that.
Mr. Flanagan. You say that Senator Morse at that time owned
a horse named Sir Laurel Guy, a show horse?
Mr. Duke. A show horse, and he just got through purchasing
it.
Mr. Flanagan. Was it from Oakland?
Mr. Duke. I am not sure whether it was or not. Now I am
not. At that time I possibly could have been.
Mr. Flanagan. Is this reference to Sir Laurel Guy in fact a
reference to the Guy Schafer tax case in Oakland?
Mr. Duke. Not to my knowledge.
Mr. Flanagan. Is it possible that it is a reference to
that?
Mr. Duke. It could be possible.
Mr. Flanagan. Is it possible that your reference to a
Sacramento horse is in fact a reference to the Noble Wilcoxon
tax case?
Mr. Duke. It could be possible.
Mr. Flanagan. Do you mean to tell us that you can't recall
whether you are talking about a horse or a tax case?
Mr. Duke. I can't at this time, no.
Mr. Flanagan. Did you ever have any discussion with Morgan
that you would refer to tax cases by the name of a horse?
Mr. Duke. No.
Mr. Flanagan. You never had any such discussion?
Mr. Duke. That is why I don't recall what that is in
reference to at this time.
The Chairman. Did I understand you to say you do not know
whether you are talking about a horse or a tax case?
Mr. Duke. I don't recall right now.
The Chairman. You do not know?
Mr. Duke. I don't. If I might enlarge, Senator, this might
sound asinine, but it is factual, and the doctors will verify
it. I was in quite an explosion some time ago, and I have a
malignancy in the upper antrum; and in feeding me Acth at the
time of the explosion, the second and third degree burns, that
has affected me, it really has affected my thinking, and there
are a lot of things that I can go through there, and it takes
me probably quite a few hours to refresh my memory on it.
Senator Jackson. Why would you be talking about horses when
you are writing a letter to an attorney who has nothing to do
with horses?
Mr. Duke. Well, we were rather friends, and we discussed
horses, and we discussed a lot of things together.
Senator Jackson. What else?
Mr. Duke. I don't recall. It could have been horses or
taxes or oil or it could have been hay or anything.
Senator Jackson. How long have you been a friend of
Morgan's?
Mr. Duke. I don't recall what year I had met him, but I had
met him----
Senator Jackson. About when?
Mr. Duke. Again, I wouldn't be able to tell you until I
would----
Senator Jackson. Well, ten years ago, or what?
Mr. Duke. I think probably five or six years ago, and I
don't recall.
Senator Jackson. You were quite intimate with him?
Mr. Duke. We got very intimate.
Senator Jackson. You have been to his house?
Mr. Duke. Yes.
Senator Jackson. Made a lot of trips here to Washington?
Mr. Duke. I sure did.
Mr. Flanagan. Did you ever go to the horse races?
Mr. Duke. No. I never have been to a horse race--yes, one
time in my life.
Mr. Flanagan. Do you know anything about horses?
Mr. Duke. Yes, I know a lot. I was in the 15th Field
Artillery. I ought to know about horses.
Mr. Flanagan. I notice in the letter you ask, ``How are the
horses running?'' And you testified a few minutes ago that Sir
Laurel Guy was a show horse.
Mr. Duke. He is a show horse.
Mr. Flanagan. What would a show horse be doing running?
Mr. Duke. He has to run. They run him in a saddle, and then
they run him behind a cart, or the show carts, and the entire
prize is predicated on how the horse conducts himself wherever
he is running.
The Chairman. Who owned the show horses?
Mr. Duke. Senator Morse owned Sir Laurel Guy at that time.
The Chairman. At that time?
Mr. Duke. Yes, at that time. And I think he just about
purchased him about that time.
The Chairman. Are you sure of that?
Mr. Duke. I am not sure of that, but if my memory serves me
right, it was about that time that he probably purchased the
horse.
Mr. Flanagan. You must have had some discussion with Morgan
about Senator Morse's show horses.
Mr. Duke. I probably did.
Mr. Flanagan. Was Ed Morgan a friend of Senator Morse?
Mr. Duke. Yes, he became a friend of Senator Morse.
Mr. Flanagan. Did you introduce him to Senator Morse?
Mr. Duke. I did.
Mr. Flanagan. When?
Mr. Duke. Again, I don't recall. A couple of years ago.
Mr. Flanagan. Sometime in 1948, '49, possibly?
Mr. Duke. I don't recall what specific year, or time.
Mr. Flanagan. Under what circumstances did you introduce
him to Senator Morse?
Mr. Duke. Well, I might be mistaken in this, and I have got
to be sure. I think that Senator Morse spoke before the FBI
graduating class, and I think Mr. Morgan wanted to meet him at
that time.
Mr. Flanagan. At that time, was Morgan a bureau agent or a
lawyer?
Mr. Duke. No, he was a lawyer, but he still was very
intimate about a lot of the members of the Federal Bureau of
Investigation.
The Chairman. I am curious about the ``talent'' you mention
in the letter. You say you were going to round up ``talent''
and bring it to Washington.
Mr. Duke. Again, I have to answer, I don't recall, at this
time what I was referring to.
The Chairman. Do you have any idea what it was?
Mr. Duke. It could have been oil leases. There were a lot
of them available in that area; and it could have been cases,
and it could have been most anything, and I really don't recall
what I was referring to.
The Chairman. At least you were not referring to talent in
the accepted sense of the word?
Mr. Duke. No.
The Chairman. You were using that as a code word?
Mr. Duke. I mean my expression, and I expressed myself
probably a lot of ways.
The Chairman. Could you tell us why, in a letter of that
kind, instead of saying ``talent'' if you mean oil leases, you
would not say ``oil leases,'' and if you mean television cases
you would not say ``television cases?''
Mr. Duke. I notice in that letter that I refer to
television cases.
Mr. Flanagan. And you also refer to oil matters.
Mr. Duke. That is right.
Mr. Flanagan. And you called it oil lands, and you didn't
call it talent.
Mr. Duke. As far as the Noble Wilcoxon case and the Schafer
case are concerned, I am sure that those cases he already had,
and I don't think I would have any reason to be referring in
any code to him regarding those cases.
The Chairman. Could I ask you this question: When you went
out and solicited tax cases, where would you get your
information about the case to begin with?
Mr. Duke. Again, as I say, to the best of my knowledge,
from various accounting firms, from attorneys on the West
Coast, and I knew quite a number of attorneys.
The Chairman. Sometimes attorneys would contact you and
tell you about a tax case?
Mr. Duke. That they probably had, and they wanted to
associate with some counsel in Washington, and they knew that I
was here quite often, and they wanted to know if I knew of any
competent firms.
The Chairman. Let us stick, now, to the cases that you
solicited personally, cases where there was no lawyer in the
case. Did any lawyer ever tell you about a case before you
solicited the case?
Mr. Duke. I don't recall right now if they ever have or
not.
The Chairman. Did Morgan ever refer any cases to you?
Mr. Duke. Again, I would have to go through my files to
search pretty thoroughly, and I don't recall whether he did or
not.
The Chairman. You do not remember whether he did or not?
Mr. Duke. No, I don't. You see, Senator, it might sound
asinine to you gentlemen here, but I was in a very diversified
line of business, and I met quite a number of people, and I
actually have. To recall things now, I might be able to in some
instances.
The Chairman. Have you seen Mr. Morgan since you have been
in Washington on this trip?
Mr. Duke. No.
Mr. Flanagan. Have you called him?
Mr. Duke. No.
Mr. Flanagan. When was the last time you saw Ed Morgan?
Mr. Duke. Again, I don't remember. It was a couple of years
ago, I guess, maybe a year ago or maybe a couple of years ago.
The Chairman. Do you recall any case now where Morgan or
any other Washington attorney got the information on a tax
case, and referred it to you?
Mr. Duke. I don't recall, I really don't; and it is
possible, but I couldn't say. He might have, and there is a
possibility that he gave me some; and I could say, I did say
this before, before the jury, I am not sure. They asked me, and
I think that I told them yes, that some of these cases I did
get, but I honestly--and you are asking me to be candid with
you--I honestly don't remember, and I don't want to injure or
impugn anybody's character about this by letting my imagination
run away with me and say yes, they did, when I am not sure.
The Chairman. You did tell the grand jury?
Mr. Duke. It is possible I did, and I am not sure whether I
did or not.
The Chairman. You do not remember now that you told the
grand jury that cases had been referred to you by Washington
attorneys?
Mr. Duke. I might have told the jury that, and I might have
told the King committee that, but at that time--I want you
gentlemen to understand it is no alibi--I was a pretty sick
person when I appeared before both bodies, and I lost sixty
pounds in about fourteen days.
Mr. Flanagan. I have here a letter, a copy of a letter
dated September 5, 1949, addressed to Welch, Mott & Morgan,
opening, ``Dear Ed,'' and signed by typewriter, ``Russell W.
Duke.'' I notice on page two of this letter, at the top of the
page, you state:
Ed, I have a lot of cases in California that I have to do a
lot of bird-dogging on, and I hate like sin to go down there
and bird-dog without clicking on a few. I wish that you would
be able to secure some talent as I could use some hay.
What are you talking about there?
Mr. Duke. Again, I don't recall; it might be cases and it
might not be.
[The letter referred to was marked as committee's Exhibit
No. 2, R. W. Duke, January 15, 1953, and is as follows:]
Portland, 13 Oregon,
September 5, 1949.
Welsh, Mott & Morgan,
710 Erickson Building, Fourteenth Northwest,
Washington, DC.
Dear Ed: I was up to see Mr. Braman, as I told you over the phone
today, and I received the information which I am passing on to you. The
patent was originally issued on October 6, 1936, Patent No. 2056165,
and then it was re-issued December 14, 1948, Reissue No. 23058, issued
to Louis J. Bronaugh, of Portland, and Thomas I. Potter, of New York.
The attorney in the case is Richard S. Temko. Louis J. Bronaugh is a
Portland attorney. I shall try to get in touch with him and learn all I
possibly can regarding the reissue. However, it is my understanding
that Potter had put the patents on the refrigerator and a patent for a
pump as his collateral to the Refrigeration Patent Corporation, and he
had no authority to have the patent reissued exclusively to himself.
However, he has accomplished having the patents reissued, as I have
stated above. Mr. Braman has written Mr. Potter a letter and is
awaiting the reply; and as soon as he receives Mr. Potter's reply, he
is then going to retain your firm by paying the $2000 down and the
percentage of the property. I tried to get myself retained as a public
relations agent; however, I had a logical argument against it by saying
if he retains a public relations agent on investigation and retains
attorneys, the cost would probably cause the other stockholders to back
down from going ahead in the suit, so will have to hold to the original
agreement. I will participate in the monies that you get; however, I
don't worry about that because we can always work something out
satisfactory to all concerned.
Ed, I have a lot of cases in California that I have to do a lot of
bird-dogging on, and I hate like sin to go down there and bird-dog
without clicking on a few. I wish that you would be able to secure some
talent as I could use some hay. I am letting things quiet down on the
coast by lying dormant and putting more effort in lining up the coming
campaign. I assure you that the request you made of me on the phone
that Senator Morse will go along 100 percent, because the longer you
get to know him, the more you will learn that he is a man of his word;
but he has had so much to do, and, as I understand, he has been given
assurance that you are number one on the list. In all the time I have
known Senator Morse, I have never known him to deviate or to say
something that is not so. He either tells you in the beginning nothing
doing, or he will go along. I am willing to gamble with you in any
shape, form, or manner that you will be in as soon as the other chap
resigns. I sincerely hope that the cases that are back there clear up
so that we can start on something else. Again I repeat, ``I can use the
hay.''
Howard has received an appointment as a commissioner on the city
Boxing Commission. The job is gratis; however, it takes up a tremendous
amount of his time. He also was appointed on a commission of 22
attorneys to study revising the city charter. That, also, is gratis.
Plus his fishing, his handball, and his Oregon Medical Association's
work, the good Lord only knows how he does it all. However, he gets by.
He is in the best of health; and I am sure that if I told him I was
writing you, he would tell me to say ``hello.''
I conveyed to Mr. Braman that urgency in this particular case was
all important. Mr. Braman said that within three weeks time he would
call me and be ready to retain your firm. As I told you over the phone,
Mr. Mott talked to him on the phone the day before he was there; and
Braman is very much impressed by Mott and your firm. Senator Morse gave
you a big send-off when Braman had asked him as to what type of firm
and people you are. If you ever read the letter that Braman received
from Senator Morse, you will have to look into the mirror to see if
you're the same individual because, Ed, he really boosted you very,
very high.
As you know, the talent is plentiful, and it is a psychological
effect when one comes in cold and tells a person what he knows about
him, so I hope sincerely that you will be able to secure some talent
for me.
With best wishes to you, Welsh and Mott, I remain,
Sincerely,
Russell W. Duke.
Mr. Flanagan. It is quite likely that you were talking
about cases?
Mr. Duke. It is possible.
Mr. Flanagan. When you are referring to ``talent''?
Mr. Duke. It is possible.
Mr. Flanagan. When you were talking about ``hay,'' is that
money?
Mr. Duke. Yes, sir.
Mr. Flanagan. You weren't talking about hay for these
horses?
Mr. Duke. No.
Senator Potter. What else could ``talent'' mean in that
sentence?
Mr. Duke. I don't recall at this time. Could I read the
letter, and I could probably tell you.
Mr. Flanagan. It is a rather long letter. Go ahead and read
it if you wish.
Mr. Duke. Again, I will have to tell you that I really
don't recall what that referred to, and it could have been
cases and it could have been most anything.
Mr. Flanagan. I refer to the last page of this letter, page
three, the second paragraph:
As you know, the talent is plentiful, and it is a
psychological effect when one comes in cold and tells a person
what he knows about him, so I hope sincerely that you will be
able to secure some talent for me.
Mr. Duke. What year was that again?
Mr. Flanagan. It is September 5, 1949. Do you know what you
meant by that statement?
Mr. Duke. No, I don't.
Mr. Flanagan. When you say that ``it is a psychological
effect when one comes in cold and tells a person what he knows
about him,'' you are in fact referring to the fact if you come
in with information on a man's tax case and start telling him
about it, you are in a much better position to got yourself
hired as public relations counsel?
Mr. Duke. It is possible, but I wouldn't say yes or I
wouldn't say no.
Mr. Flanagan. Then it is possible, you say, that what you
are referring to here is that it is very helpful to you if you
can go in to a taxpayer or his lawyer and tell him some of the
facts of the case, is that correct?
Mr. Duke. I wouldn't say that that refers to that, no.
Mr. Flanagan. You say it is possible?
Mr. Duke. It is possible. Anything could be possible.
Mr. Flanagan. Where would you get information on a tax
case?
Mr. Duke. Usually from the client or from the attorney.
Mr. Flanagan. No, you are talking about ``going in cold.''
Mr. Duke. Well, I might not be referring to that.
Mr. Flanagan. And telling a person.
Mr. Duke. I might not be referring to a tax case.
Mr. Flanagan. Are you in fact indicating here that you can
get information from some government source, either Justice or
the Internal Revenue Bureau, and go in and tell the client
about it?
Mr. Duke. I never got any information from the Internal
Revenue Bureau or the Department of Justice.
Mr. Flanagan. Did you get any indirectly from Justice or
the Internal Revenue Bureau, here or in the field?
Mr. Duke. Indirectly, yes, from the client or from the
client's attorney.
Mr. Flanagan. Did you ever ask Ed Morgan to go to the
Justice Department, the Internal Revenue Bureau, or any other
government agency, and get information in connection with a tax
case?
Mr. Duke. Other than I did in that Burns case. I didn't
tell him where to go, and I asked him if he could get any
information regarding the case.
Mr. Flanagan. Did Morgan ever tell you--and I want you to
consider this question carefully--did Morgan ever tell you that
he had contacts in the Justice Department or Internal Revenue
Bureau where he could get confidential information concerning
tax cases?
Mr. Duke. I don't know. You are wording it in such a way--
--
Mr. Flanagan. I will reword it. Did Morgan, Edward P.
Morgan, ever tell you that he had contacts in the Department of
Justice where he could get confidential information about tax
cases?
Mr. Duke. Well, I will answer it this way: He probably told
me that he was in the Justice Department for eight and a half
or nine years, and he knew his way and knew the handling and
the federal procedure of handling cases in the Justice
Department.
Mr. Flanagan. I did not ask that question, Mr. Duke, and I
will ask it again. Did Morgan ever tell you that he had ways
and means to get confidential information from the Justice
Department concerning tax cases?
Mr. Duke. Not that I remember.
Mr. Flanagan. Is it possible that he told you that?
Mr. Duke. I doubt it, and I don't think a person with his
mentality would make a statement like that.
Mr. Flanagan. Did Morgan ever tell you that he had ways and
means to get confidential information from the Internal Revenue
Bureau concerning tax cases?
Mr. Duke. I don't recall him ever making a statement like
that to me.
Mr. Flanagan. Did Morgan ever get information for you other
than his efforts in the Inez Burns case, from either Justice or
Internal Revenue?
Mr. Duke. I don't know where he would get the information,
but if I ever wrote him a letter, I would ask him to get
whatever information he could pertaining to the particular
case, for the attorney out there.
Mr. Flanagan. Would he do that, or did he ever do that
before he was actually retained as counsel?
Mr. Duke. Not to my knowledge.
Mr. Flanagan. He would only do that after he would be
retained?
Mr. Duke. Now, wait a minute. In the Inez Burns case, he
was never retained, but he made an effort to get some
information; but whether he went to Justice or where he went, I
am inclined to believe that any information he would get, he
would legally try to secure it from the proper source.
Mr. Flanagan. Did you ever ask him to get information in
tax cases before he was actually retained as counsel, other
than the Burns case?
Mr. Duke. Not that I recall. It is possible in other cases
like the Burns case, too. I don't recall.
Mr. Flanagan. I will refer to the letter of September 5 on
page two. Mr. Duke:
I assure you that the request you made of me on the phone
that Senator Morse will go along 100 per cent, because the
longer you get to know him, the more you will learn that he is
a man of his word, but he has had so much to do, and, as I
understand, he has been given assurance that you are number one
on the list.
What are you talking about?
Mr. Duke. I don't know for sure, but I think--does that go
on? I think that I read that letter, didn't I?
Mr. Flanagan. Yes.
Mr. Duke. Does that go on to say that someone was going to
resign from a position?
Mr. Flanagan. Yes. I will read it for you:
In all the time I have known Senator Morse, I have never
known him to deviate or to say something that is not so. He
either, tells you in the beginning nothing doing, or he will go
along. I am willing to gamble with you in any shape, form, or
manner that you will be in as soon as the other chap resigns.
Mr. Duke. I think that that wasn't only Senator Morse. I
think there were quite a few senators. This Mr. McCoy was going
to resign from the FCC, and Mr. Morgan, having his experience
and knowledge of FCC and television work, I think made
application for that position.
Mr. Flanagan. Did you talk to Senator Morse on behalf of
Morgan's candidacy as an FCC commissioner?
Mr. Duke. I did.
Mr. Flanagan. Did you ever assist or attempt to assist
Morgan in getting any other federal jobs?
Mr. Duke. I did.
Mr. Flanagan. Which jobs?
Mr. Duke. I assisted, and I don't know, the Tydings
committee----
Mr. Flanagan. What did you do on his behalf so he got to be
counsel to the Tydings committee?
Mr. Duke. I talked to several senators that I knew,
including Senator Morse, to see if it was possible to get him
on that committee; and also on this OPS.
Mr. Flanagan. When he was made national director of
enforcement for OPS?
Mr. Duke. He was made chief counsel, wasn't it?
Mr. Flanagan. Inspector of enforcement.
Mr. Duke. Yes, sir.
Mr. Flanagan. What did you do on his behalf for that job?
Mr. Duke. I talked to various senators and congressman to
see if I couldn't get him on that.
Mr. Flanagan. Who are the senators you talked to?
Mr. Duke. I don't recall. I think probably Senator Kilgore,
Senator Morse--again, I don't recall who all I talked to;
whoever had anything to do with the committee or those
positions.
Mr. Flanagan. Did you ever know Eric Ellis from Portland,
Oregon?
Mr. Duke. I didn't know him; I met him.
Mr. Flanagan. Did you ever meet his attorney, Mr. George
Bronaugh?
Mr. Duke. Yes, I met them both.
Mr. Flanagan. Mr. Ellis owned the restaurant known as Mr.
Jones' Restaurants, didn't he, in Portland?
Mr. Duke. That is right,
Mr. Flanagan. To your knowledge, did Mr. Eric Ellis have
tax problems back in 1950?
Mr. Duke. Well, now, I will have to answer that for you and
it won't take much time but it will have to be answered
properly.
I had an accountant, and his name was Lester Talbott, who
used to be in the Internal Revenue Department.
Mr. Flanagan. Where is he from?
Mr. Duke. Portland, Oregon. And it seems that this Eric
Ellis was employed by a rancher or manufacturer in Tacoma or
Spokane, Washington, and the Internal Revenue Department, in
investigating this employer of Eric Ellis, found a discrepancy
in his accounts. And Ellis was the bookkeeper or the
accountant. Then he made an open deal with the Internal Revenue
Department that if he would testify against his employer----
Mr. Flanagan. Who was the employer in this case?
Mr. Duke [continuing]. I don't recall. There are records of
it; Talbott has them.
That if he would testify against his employer, he wouldn't
have to file any income tax returns for the next few years. And
Eric Ellis didn't file any returns for the next few years.
So one day Ellis called me at my home and told my wife that
as soon as I came in to come down to see him. And so I called
Talbott and asked Talbott if he knew Ellis, and he said yes. He
told me the story about Ellis. So I went down to see Mr. EIlis
in his restaurant, and he asked me if I could do him any good
or give him any help on his case. And I already had all of the
knowledge and information, and I wanted him to tell me, and so
he told me about it. I said, ``The best thing you can do is to
go to the Internal Revenue Department and tell them how much
you owe, and tell them you haven't filed returns for the past
four or five years, and get out of it the best you can.''
So the next day he called me again and asked me to meet
with him and his attorney in another restaurant that he owned
and so we went there. They proceeded to get a fifth of whiskey
and start plying me with whisky and kept asking me who in the
Internal Revenue Department in Portland was aiding in these tax
cases. I told them it was asinine in questioning me on that,
and you
couldn't get me drunk on it, and that as far as their problem
was concerned the best thing he could do was go ahead and
settle with Internal Revenue Department themselves. I left them
with that, and I haven't seen them since, and I understand the
case was settled for about $4,000.
Mr. Flanagan. This second meeting that you had, with Mr.
Ellis, you say his attorney, George Bronaugh, was present?
Mr. Duke. Yes, sir.
Mr. Flanagan. Who else was in the room besides yourself and
George Bronaugh and this man?
Mr. Duke. That is all.
Mr. Flanagan. At Mr. Jones' Restaurant?
Mr. Duke. They were all called that.
Mr. Flanagan. This was the one on International Avenue?
Mr. Duke. Not on International Avenue.
Mr Flanagan. The one on Sandy Avenue?
Mr. Duke. No. It was on Interstate Avenue.
Mr. Flanagan. Interstate Avenue?
Mr. Duke. Yes, sir.
Mr. Flanagan. At that time, did you try to prevail upon
either Mr. Ellis or his attorney to hire you as public
relations counsel?
Mr. Duke. No, indeed.
Mr. Flanagan. Did you have any discussions about the fact
that you might be their public relations counsel?
Mr. Duke. No, indeed. They were trying to retain me, and I
refused, because I already knew the entire story on Ellis, and
I didn't want to have anything to do with Ellis.
Mr. Flanagan. At that conversation in Mr. Jones'
Restaurant, the only one you say you ever had with Ellis and
Bronaugh concerning their tax matters----
Mr. Duke. That is right.
Mr. Flanagan [continuing]. Did you tell them, either
directly or indirectly, that you could secure confidential
information?
Mr. Duke. No, sir. They were questioning me on that to see
if I could, and I told them not.
Incidentally, the same day I called up the Internal Revenue
Department and gave them that very information, that these two
men were questioning me on that.
Mr. Flanagan. Did you at that time tell them that you could
get information out of the Justice Department or the Bureau of
Internal Revenue?
Mr. Duke. Absolutely, I did not. I would never make a
statement that I could get information from Justice or the
Internal Revenue, because it is impossible to do so.
Mr. Flanagan. Did you at that meeting in that restaurant
with Ellis and Bronaugh, tell them, either directly or
indirectly, that you could offer your services as a public
relations agent on a monthly fee basis?
Mr. Duke. No, I told them how I operated.
Mr. Flanagan. But did you offer your services to Mr. Ellis
or to his attorney?
Mr. Duke. Not to my knowledge did I ever offer my services
to either one of those gentlemen.
Mr. Flanagan. Are you quite sure that you didn't offer your
services to those gentlemen?
Mr. Duke. Well, I will answer it this way: By the time we
hit that first fifth and the second fifth, no one knew what
they were talking about, and----
Mr. Flanagan. Just a moment. A few moments ago you said
that, as I recall your testimony, after you left this meeting
you went to the Bureau of Internal Revenue and told them.
Mr. Duke. I did.
Mr. Flanagan. Were you still drunk?
Mr. Duke. No. I am telling you they tried to get me drunk,
but they were plenty drunk.
Mr. Flanagan. But you weren't?
Mr. Duke. I was feeling ``high,'' but I wasn't drunk.
Mr. Flanagan. You knew what you were doing and what you
were saying?
Mr. Duke. I certainly did.
Mr. Flanagan. Did you tell these men, either directly or
indirectly, that you could follow through with various offices
where their case might be, their tax case?
Mr. Duke. Their case?
Mr. Flanagan. Yes.
Mr. Duke. That would be impossible, and again I will have
to answer it this way: The case was already set, and it was
already set for them to adjust the case, and the deal was
already made with the Internal Revenue Department by
themselves, to adjust the case in Seattle, and they didn't
require anybody's help.
Mr. Flanagan. Did you ever tell these gentlemen at that
time at that meeting that you could follow other cases through
the various departments?
Mr. Duke. I wouldn't discuss any other cases with them.
The Chairman. I do not believe you have answered that
question.
Mr. Flanagan. Did you in fact tell them that you had
followed other cases or could follow them through the various
departments of government?
Mr. Duke. I possibly did, yes.
Mr. Flanagan. Did you or didn't you?
Mr. Duke. I don't recall.
Mr. Flanagan. Did you tell them that tax cases could be
killed in the Department of Justice by you or people that you
knew?
Mr. Duke. No. That I would emphatically deny.
Mr. Flanagan. Did you tell them, either directly or
indirectly, that through certain contacts that you might have,
that you could stop cases in the Department of Justice?
Mr. Duke. I wouldn't make no such statement, no.
Mr. Flanagan. Did you ever state, either directly or
indirectly, that you could stop or fix tax cases at any place
in the government?
Mr. Duke. Nowhere would I make a statement like that, that
I could fix tax cases.
Mr. Flanagan. Did you make any such statement to these
gentlemen at that time?
Mr. Duke. No, I did not.
The Chairman. Can you go back three questions and read
that?
[The record was read by the reporter.]
The Chairman. Does that mean you did not make such a
statement?
Mr. Duke. Not to my knowledge did I ever make such a
statement, no.
Mr. Flanagan. Did you state, either directly or indirectly,
to those gentlemen, that is, Ellis and Bronaugh, or did you
intimate to them, that if their tax case went to the Justice
Department that they would have to hire any certain Washington
attorney?
Mr. Duke. Mr. Flanagan, if I might state--and this
committee should know this--there was an attempt made to entrap
me by those two gentlemen, and I had information, and I have
Mr. Talbott to testify to that. I was told that Ellis was going
to try to entrap me. You are asking me a lot of questions
pertaining to these two gentlemen, and I told you that I knew
their efforts were to try to trap me, and when I went to talk
to these gentlemen I spent the first evening, I spent about ten
minutes with Mr. Ellis in his restaurant, and left him, and
told him I couldn't do anything for him, and absolutely left
him, and the next day they called again and asked me to meet
him, and I met him there, and I asked him what he wanted, and
he said he wanted to talk to me about something else beside the
tax case. And I met him there, and I met the other gentleman,
and he never introduced me to the other gentleman as being an
attorney, and he brought out a fifth of whisky, and said ``Have
a drink.'' And I said, ``Sure, I will.'' And I let them drink
theirs first, and we kept on visiting and talking and nothing
else. And then they started asking me a lot of questions, and I
started telling them, and I said, ``Look, I am not answering
anything like that.'' I knew what they were wanting, and I knew
they were trying to frame me, because he was already involved
in one frame of his employer, and, now, if these men have given
a statement and they would swear that I made such statements,
and I sit here and say no, and, these men swear that I did make
such statements, here I am being framed by a man that framed or
helped frame another man.
Senator Potter. Is that what you mean by being framed?
Mr. Duke. They tried to entrap me into statements or into a
deal in order to involve me in tax matters, because Ellis was
sore at Talbott, and Talbott used to be his accountant, and
after Talbott found out what he had done, and what he had done
in Spokane with his former employer, he and Talbott got very
bitter.
Senator Potter. Why would they go out of their way to frame
you?
Mr. Duke. After all, I can say this, without being
egotistical, because I learned a long time ago that ego is an
anesthesia provided by nature to deaden the pain of a damned
fool, and I don't want to be placed in that category, but
politically I was pretty big in Oregon, and there were many
efforts made to discredit me in Oregon.
Senator Jackson. You were pretty big politically?
Mr. Duke. Yes.
Senator Jackson. What is that?
Mr. Duke. I have been in labor and I have for quite a long
time controlled--headed one of the largest locals in the United
States.
Senator Jackson. Controlled it?
Mr. Duke. No, I headed it. I didn't control it.
Senator Jackson. What local was that?
Mr. Duke. Local 72 of the Boilermakers, AFL.
Senator Jackson. You were president of it?
Mr. Duke. No.
Senator Jackson. Where did you control it from?
Mr. Duke. I withdrew that word ``control'' and I said----
Senator Jackson. Where did you head it from, in what
capacity?
Mr. Duke. On the committee, the executive committee.
Senator Jackson. You controlled the committee?
Mr. Duke. I didn't say ``control.'' I withdrew that.
Senator Jackson. What did you head?
Mr. Duke. I headed the Boilermakers Local.
Senator Jackson. President of it?
Mr. Duke. No, I wasn't president of it, and we had no
president. And we had a lawsuit and we had rather a bitter
fight about two or three years and we finally got rid of the
president and the business agent, and we operated the local
from a committee.
Senator Potter. Then if you were active politically, these
people must have assumed that you could use political influence
for tax adjustments.
Mr. Duke. No, sir, those people were maneuvering for
someone else.
Mr. Flanagan. Mr. Duke, I would still like to pursue this
question further and get a categorical answer from you if I
could. I will rephrase my question.
At this meeting with Ellis and his attorney, Bronaugh, in
that restaurant on that day, did you state, directly or
indirectly, if the Ellis case went to the Justice Department
they should hire a lawyer in Washington by the name of Morgan,
or any other lawyer?
Mr. Duke. It is possible I might have told them that, yes.
Mr. Flanagan. Did you recommend Morgan to them as a lawyer?
Mr. Duke. It is possible that I might have. What year was
that?
Mr. Flanagan. 1950.
Mr. Duke. The whole thing is wrong. I didn't meet him until
1949, and in 1950 he was broke and he was out of the restaurant
business.
Mr. Flanagan. You now state that when you had this meeting,
whether it be in 1949 or 1950, the only meeting you say you
ever had with Ellis and his attorney, you now state that you
did not indicate that if their case went to Justice and they
would have to hire a Washington lawyer?
Mr. Duke. Repeat that again.
Mr. Flanagan. Did you state at that meeting that these
gentlemen would have to hire a Washington lawyer?
Mr. Duke. I told you I don't recall anything that was
stated at that meeting.
Mr. Flanagan. Did you indicate to them that if their case
got to the Justice Department, they would have to get Ed Morgan
or else they would lose that case?
Mr. Duke. I don't recall making any such statement.
Mr. Flanagan. Did you state to them or indicate to them
that they would have to hire Morgan if their case went to
Justice so that they could be sure to win their case?
Mr. Duke. Again, I could not answer directly or indirectly
because I don't recall.
Mr. Flanagan. You have no recollection of what you said?
Mr. Duke. No, I don't. Three years ago, was that, and I
talked to quite a number of people.
Mr. Flanagan. Did you report to the Internal Revenue
Department that day that you went to them?
Mr. Duke. I certainly did.
Mr. Flanagan. What did you tell them?
Mr. Duke. I just told them of the meeting, and what took
place at the meeting, and who was there.
Mr. Flanagan. Did you tell them anything about the fact
that Morgan may have to be hired in these cases?
Mr. Duke. I don't recall.
Mr. Flanagan. Did you think, in fact, that it was necessary
to hire Morgan in Justice Department cases?
Mr. Duke. I don't know why. There are other competent
attorneys here that are probably just as capable.
Mr. Flanagan. Did you recommend Morgan as an attorney to
Ellis or Bronaugh?
Mr. Duke. It is possible, and I don't recall.
Mr. Flanagan. Now, your testimony here is very confusing.
First of all, you say that you recommended nothing to them; and
now I ask you, did you or did you not recommend Morgan?
Mr. Duke. I didn't say that I didn't recommend anything to
them. It is possible that I recommended Morgan, and I don't
recall.
Mr. Flanagan. Did Morgan contact you at that restaurant
when you were there?
Mr. Duke. No.
Mr. Flanagan. Did he call you on the telephone?
Mr. Duke. He wouldn't know to call me. How would he know to
call me at a restaurant? He would call me at my home.
Mr. Flanagan. Who did you contact in the Bureau of Internal
Revenue to give these facts to?
Mr. Duke. I don't recall. It might have been, someone in
the intelligence unit.
Mr. Flanagan. In Portland?
Mr. Duke. Yes.
Mr. Flanagan. Did you ever handle any cases involving
claims against the government?
Mr. Duke. I did.
Mr. Flanagan. Claims bills pending in Congress?
Mr. Duke. I don't get that.
Mr. Flanagan. Bills for claims against the government that
were in the Congress?
Mr. Duke. Yes.
Mr. Flanagan. Did you ever receive any money from any
persons or any firm to assist them in putting their claims
bills through the Congress?
Mr. Duke. In this way: Every time I had to come back here,
they paid my fare and expenses.
Mr. Flanagan. Did you come back here to promote their
claims through the Congress?
Mr. Duke. No, not at first.
Mr. Flanagan. Well, at the last, did you; at any time did
you?
Mr. Duke. After the bill was introduced in the Congress I
had to come back here and appear before the various committees
to try to get the bills through.
Mr. Flanagan. Did you discuss this bill with any members of
the House or the Senate?
Mr. Duke. I did.
Mr. Flanagan. Who were your clients in that case?
Mr. Duke. Herman Lawson, and Nelson Company.
Mr. Flanagan. Was American Terrazzo Company one of your
clients?
Mr. Duke. No.
Mr. Flanagan. Did you go to American Terrazzo and attempt
to get them to hire you?
Mr. Duke. No.
Mr. Flanagan. Did you discuss this case with anyone
connected with American Terrazzo?
Mr. Duke. I did.
Mr. Flanagan. With whom?
Mr. Duke. I do not recall at the moment. Mr. Nelson and Mr.
Brace of both companies were putting up the money, and had
already spent quite a lot of money on this before I ever
entered into this, and I know Brace and Nelson, we have been
very close friends for a number of years, and I knew about this
case.
They were getting tired of spending their money for it, and
I asked them what they were doing on it, and they told me, and
I said, ``The best thing you can do with this case is to go
right directly to the federal works or Public Works
Administration and get to the chief counsel and discuss the
case with him, and find out how far you can go with it.''
Well, they told me to go ahead and try it. They paid my
expenses, and we came out here, and I met with the chief
counsel of the federal works, or whatever bureau or department
that bill or the claim was against, and discussed the case with
them, and they told me what to do. And in fact, they prepared
the bill, and said that the claim was justifiable and it should
be paid.
I was just representing Mr. Nelson at the time, and he paid
$500, I think, for my fare, round-trip fare to come out here.
Then Mr. Frick, who was the chief counsel, stated that the
bill would have to be put into the Congress.
Mr. Flanagan. Did you ever discuss this case on behalf of
your clients with any member of Congress?
Mr. Duke. Yes, I have.
Mr. Flanagan. With whom?
Mr. Duke. I don't recall. Various congressmen.
Mr. Flanagan. Did you discuss it with Senator Morse?
Mr. Duke. I did.
Mr. Flanagan. Did he introduce a bill after your
discussion?
Mr. Duke. He introduced two of them.
Mr. Flanagan. On your behalf?
Mr. Duke. We don't want to get Senator Morse involved in
that. I brought Mr. Nelson and Mr. Brace back here, and they
discussed the bill with Senator Morse.
Mr. Flanagan. Did you ever discuss the bill with Senator
Morse?
Mr. Duke. Yes, later on, after he introduced it.
Mr. Flanagan. And you were discussing it on behalf of your
clients?
Mr. Duke. Yes, sir.
Mr. Flanagan. This was the San Francisco case?
Mr. Duke. That is right.
Mr. Flanagan. Were you at that time registered as a
lobbyist?
Mr. Duke. No. I inquired about that, and the Justice
Department, or whoever it was in the Justice Department, told
me that as long as it was not--a person couldn't register as a
lobbyist unless he was lobbying to change legislation and laws
of our land. But on a private claim bill, if you visit the
various senators and congressmen to put it through, it was not
classified as lobbying, and it wasn't necessary for me to
register.
Senator Potter. Who gave you your advice in the Department
of Justice?
Mr. Duke. I don't recall now, and also it was the counsel
for the committee headed up, I think, if I am not mistaken, and
I might be in the name, by Congressman Buchanan, was it? Wasn't
he the chairman of the Lobby committee?
Senator Potter. Yes.
Mr. Duke. Their chief counsel told me the same thing, so
long as it was not lobbying to change laws of this legislature.
Senator Potter. Do you recall who your contact was in the
Department of Justice who gave you that information?
Mr. Duke. I called the Department of Justice and I asked
them--they asked who I wanted to talk to, and I explained, and
then they referred me to whoever it was, and I do not recall.
Senator Jackson. Did you go down and see them?
Mr. Duke. I talked to them on the telephone.
Mr. Flanagan. In connection with this claims case, Mr.
Duke, did you ever, directly or indirectly, indicate to anyone
connected with American Terrazzo that if they didn't hire you
as public relations counsel, you would see that their name
would be taken out of the bills that were then pending?
Mr. Duke. I did not make that kind of statement. If I can
tell you what happened in that, you will understand it.
Mr. Nelson and Mr. Brace decided that they were not going
to foot the bills for all of the other people, all of the other
claimants, and so we had a meeting in my room, Mr. Nelson and
Mr. Brace and everybody involved, and they called them to come
in. And I happened to be in San Francisco with Mr. Bobber. They
discussed this case and they told the other claimants that they
would have to proportionately prorate the cost of this bill,
and put up their share of it.
Senator Potter. What cost of it?
Mr. Duke. Mr. Brace and Mr. Nelson had already spent
several thousands of dollars retaining attorneys and trying to
get the bill through. They advanced my expenses coming out
here, and they felt justifiable that all of these people, that
they should get together and prorate their share.
Now, I had no fee. If Nelson and Lawson would get their
claim, then they were to pay me.
Senator Potter. How much?
Mr. Duke. We would have settled that later.
Senator Potter. You took on a job without any amount being
set as to what you would receive?
Mr. Duke. That is right, Senator, in this particular case.
We are very close friends, both Mr. Nelson and Mr. Brace and
myself, and we have known each other for a number of years.
Senator Potter. Who made the first contact with Senator
Morse? Did you make it or did Mr. Nelson and Mr. Brace?
Mr. Duke. We all three came out here together, and I took
them in to Senator Morse's office, and they explained to
Senator Morse the predicament they were in, and then Mr. Frick
contacted Senator Morse and wanted to know, and Frick prepared
the bill.
Senator Potter. What was your $500 round-trip expense
money, where did that come from?
Mr. Duke. In the beginning, they paid my fare coming out
here.
Senator Potter. You mean when you came out together?
Mr. Duke. That is right.
Mr. Flanagan. Did you tell Senator Morse that you were
getting a fee or expenses out of this claims case?
Mr. Duke. I don't think so.
Mr. Flanagan. Did you ever tell him that you were getting
fees or expenses or acting as public relations counsel in any
tax cases?
Mr. Duke. I don't think so, no.
Mr. Flanagan. Did you ever ask for his assistance in a tax
case, not involving a constituent of his in the State of
Oregon?
Mr. Duke. Not assistance. I would ask him, there was one
particular case that comes to my mind, the L. diMartini case,
where the Internal Revenue Department agent ruled that because
a man conducted his business at the age of ninety, even though
he was active in it, he was not entitled to the salary he was
getting.
Mr. Flanagan. Was that a California case?
Mr. Duke. That is right.
Mr. Flanagan. Did you ask Senator Morse to appear in that
or any other case down at the Internal Revenue on behalf of any
of your clients?
Mr. Duke. I don't think that I have. I think that Mr.
Kaiser, if I am not mistaken, asked him to.
Mr. Flanagan. Who is Mr. Kaiser?
Mr. Duke. He is the comptroller and head of the L.
diMartini Company.
Mr. Flanagan. That is a California company?
Mr. Duke. That is right.
Mr. Flanagan. Did Senator Morse ever know you were acting
as public relations counsel for these taxpayers?
Mr. Duke. I don't know.
Mr. Flanagan. That he might be contacting Internal Revenue
on behalf of?
Mr. Duke. I wouldn't know if he did.
Mr. Flanagan. Did you ever tell him you were getting fees
for representing these taxpayers as public relations counsel?
Mr. Duke. Not to my knowledge.
Mr. Flanagan. So, then, you say that he had no knowledge of
the fact?
Mr. Duke. I wouldn't say that, whether he had knowledge or
not, but I don't think that I ever discussed it.
Mr. Flanagan. You never brought that to his attention?
Mr. Duke. I don't think so.
Mr. Flanagan. Did he ever tell you or bring it to your
attention that you were acting as public relations counsel for
these people?
Mr. Duke. I don't recall.
Senator McClellan. May I ask two or three questions, and I
have to go.
I would like to ask you, Mr. Duke, how you became known as
a tax public relations man, or government public relations man,
to contact different agencies of government?
Mr. Duke. Well, Senator, I have been coming back here for
quite a number of years.
Senator McClellan. For what?
Mr. Duke. For various--my own businesses, and I manufacture
trailers, and I had to come back here to get cleared through
the various bureaus of the government, and I manufactured
various and sundry items that had to be cleared through
Washington, both in the Internal Revenue Department and in the
old OPA, and the War Production Board, and the army and the
navy; and coming back here at that time, I got acquainted here
with Washington quite well.
Senator McClellan. Did that help to qualify you in any way
as a tax public relations expert?
Mr. Duke. Well, I don't know whether it qualified me, but
you take a person that comes out here to Washington and hasn't
been here before, he finds it very difficult, as I did, and I
spent three months here before I found out that I was to go to
the Miscellaneous Tax Division. For three months I was looking
for the Excise Tax Division of the Internal Revenue.
Senator McClellan. You got experience in knowing where to
go to in the Internal Revenue Bureau or the Department of
Justice, so that you could guide others and counsel them and
charge a fee for it? I am trying to get your background, and
how you got into this, and how people knew that you had some
services to sell.
Mr. Duke. From practical experience and coming back here on
my own work.
Senator McClellan. In tax matters?
Mr. Duke. Oh, yes, I was involved. You see, in everything,
trailers and various and sundry items, there are excise tax and
trailer tax, and there are various numbers of them, and in one
trailer there are eight or nine taxes that you have to pay.
Senator McClellan. I understand. And did you have problems
with the revenue bureau here in Washington?
Mr. Duke. Oh, yes, I did, for several years.
Senator McClellan. So you had some practical experience in
contacting them?
Mr. Duke. That is right.
Senator McClellan. Now, did you maintain an office while
you were carrying on these public relations activities?
Mr. Duke. I did.
Senator McClellan. Where?
Mr. Duke. Portland, Oregon.
Senator McClellan. Do you have an office there now?
Mr. Duke. No, I haven't had an office there since the
explosion, in 1950.
Senator McClellan. In 1950?
Mr. Duke. That is right.
Senator McClellan. Did you advertise it as a public
relations service?
Mr. Duke. I did.
Senator McClellan. Which you had to offer?
Mr. Duke. I did.
Senator McClellan. Did you keep records or files pertaining
to your business?
Mr. Duke. I have.
Senator McClellan. Did you keep all of your files?
Mr. Duke. Every scrap of paper from the time I started
business.
Senator McClellan. Every scrap of paper?
Mr. Duke. Yes.
Senator McClellan. Have these files been subpoenaed by this
committee?
Mr. Duke. They have.
Senator McClellan. Are they now in the possession of the
committee?
Mr. Duke. I wouldn't know.
Senator McClellan. Do you know whether they have obtained
and have in possession now all of your files, or only a part of
them?
Mr. Duke. I wouldn't know. You would have to ask the chief
counsel.
Senator McClellan. May I ask you, then, have you disclosed
to the committee or to the chief counsel of the committee, Mr.
Flanagan, the whereabouts of your files so that they may be
made available to the committee?
Mr. Duke. To the best of my knowledge and ability, yes.
Senator McClellan. All of your files?
Mr. Duke. Yes, sir.
Senator McClellan. You know where they all are or where
they were?
Mr. Duke. I didn't know where they all were, and I had an
idea, and I so disclosed to the committee counsel.
Senator McClellan. You have disclosed that?
Mr. Duke. That is right.
Senator McClellan. I have not seen these letters, but there
seems to be one word that is causing some inquiry; in the two
letters that have been referred to here in this preliminary
questioning, the word ``talent'' appears and seems to have some
particular significance as a code word or as related to
something other than ``talent,'' the meaning of which was known
to you and to Mr. Morgan.
Mr. Duke. That is right.
Senator McClellan. I do not know whether there are other
letters that have the use of this word to convey some
particular meaning or impression. Possibly there are. So I will
ask you, do you know if that is a word that you use frequently
in your correspondence with Mr. Morgan?
Mr. Duke. I think that if you go through all of my files
and correspondence, I think that you will find that that
expression and word is used to various other people, and not
necessarily lawyers.
Senator McClellan. I understand it may have been used in
others, but I want to talk about this correspondence here with
Mr. Morgan, and did you use it frequently in your
correspondence with him?
Mr. Duke. It is possible. I would have to look through my
files to see how often I used it.
Senator McClellan. If you used it frequently, did it have
one particular meaning, and one particular significance?
Mr. Duke. Right at this moment, I couldn't tell you what it
meant.
Senator McClellan. At any time, whether the first time you
used it or the last, or in between?
Mr. Duke. I wouldn't know; right now I wouldn't recall.
Senator McClellan. Did it have reference--and you know
enough about these two letters to know whether it had reference
to the common and accepted meaning of the word ``talent?''
Mr. Duke. No, not to its common and accepted meaning.
Senator McClellan. It did not?
Mr. Duke. No.
Senator McClellan. Then what did it have reference to?
Mr. Duke. I couldn't tell you, because I don't recall right
at this time.
Senator McClellan. Would you say that wherever and whenever
you used it, in your correspondence with him, since it did not
refer to talent in the common accepted meaning of the word,
that it did have reference to something specific and in using
it you used it for that specific expression or to convey that
specific meaning each time you used it?
Mr. Duke. It is possible.
Senator McClellan. Well, this is what I am trying to
determine. You would not use the word ``talent'' one time to
mean a race horse, and another time to mean hay or money, or
another time to mean clients, and it had a continuous meaning
as between you and Morgan when you used the word?
Mr. Duke. It is an expression, probably, of mine, and I
think, as I told you, if you go through other correspondence to
various people, it might not be professional people, I might be
referring to talent, and I----
Senator McClellan. How would he know, if you used it to
mean different things, how did Ed Morgan know what you meant
when you used the word, which one you meant?
Mr. Duke. I might have talked to him on the telephone and I
might have talked to him in person before I left Washington.
Senator McClellan. And told him that when you used the word
``talent,'' it meant so-and-so?
Mr. Duke. Not necessarily. I mean discussing various
things.
Senator McClellan. I am trying to determine how he
understood what you meant by the word ``talent'' if you did not
know yourself.
Mr. Duke. If I could remember right now what I was
referring to, I could tell you right now what it meant.
Senator McClellan. The point is, you did not use it in the
sense of the correct meaning of the word, you admit that.
Mr. Duke. The common accepted meaning.
Senator McClellan. That is right. You did not use it to
convey that meaning?
Mr. Duke. It is possible, and I don't recall now what I
used it for.
Senator McClellan. Well, evidently it had quite a
significance between the two of you; you acknowledge that?
Mr. Duke. It might have had, yes.
Senator McClellan. It might have had? Do you not know that
it had?
Mr. Duke. No, I don't.
Senator McClellan. Do you not now know that it had?
Mr. Duke. Yes.
Senator McClellan. And you used it to convey that
particular meaning rather than to use the normal term that
would convey the meaning to someone else?
Mr. Duke. I really do not recall what I meant by that
expression in that letter.
Senator McClellan. Do you think that you will be able to
recall what you meant by the use of the word ``talent'' in your
correspondence?
Mr. Duke. It is possible.
Senator McClellan. You think, given a little time, you will
be able to recall?
Mr. Duke. It depends, and I will tell you why it depends on
that. As I told you, I was in this explosion, and I might leave
here and land in a hospital and be in a hospital for the next
six months, and I told you I have a malignancy that is
spreading, and I have X-rays in my files to prove it, and this
malignancy spreads and sometimes I will blank out for a couple
of weeks at a time, and so you are asking me if it is possible
to remember----
Senator McClellan. That is the reason you are saying it may
not be possible for you to remember?
Mr. Duke. I didn't say that. It is possible that it might
be that I might blank out, and I might be blank for maybe a
month or two weeks.
Senator McClellan. You might not live to remember, if we
want to indulge in extreme speculations, but I am not trying to
go into your physical condition in detail. You are saying
normally you think you would be able to remember; if that is
right, Okay.
Mr. Duke. It is possible. I don't know, Senator. As I told
you, I am trying to keep myself calm; and excitement, I
hemorrhage.
Senator McClellan. I do not want you to get excited.
Mr. Duke. I am under a pressure right now, and that
pressure can blank me out.
Senator McClellan. Let me ask you another question. What
did you mean by bird-dogging?
Mr. Duke. Bird-dogging cases, television cases.
Senator McClellan. Soliciting cases?
Mr. Duke. Yes, soliciting any kind of cases.
Senator McClellan. Then what service did you actually have
to sell to prospective clients and to those who employed you?
What service did you actually sell to them?
Mr. Duke. Can I give you an example?
Senator McClellan. I would like for you to answer the best
way you can.
Mr. Duke. A couple of friends of mine had----
Senator McClellan. I understand--first may I qualify that.
It is my understanding that you are not a lawyer.
Mr. Duke. No.
Senator McClellan. You are not an accountant?
Mr. Duke. No.
Senator McClellan. And yet you engage in public relations
dealing with those two professions, primarily?
Mr. Duke. Well, public relations, anyone can go into that,
and it doesn't----
Senator McClellan. I understand you can go into it, but you
are selling something related to the profession of a lawyer or
public accountant primarily, or to government.
Mr. Duke. That is right.
Senator McClellan. One of the three, just what you had to
sell to your clients.
Mr. Duke. I will give you an example. There were a couple
of friends, four friends of mine, that started with about
$1500, and in six years' time they ran this business, a wood
business, to about, I guess, maybe a $2 or $3 million business.
All of the time they retained the same services of a small
bookkeeper, that is all he was. So we met, they came after me
to see what I could do to help and they wanted to retain me as
a public relations expert. I met with them and with their
accountant, and I went over the books and realized he was
absolutely wrong; that under the present bookkeeping system or
the accounting system that he had set up for the firm, it would
cost the firm a fortune, and they were making money but paying
it all out in taxes and holding nothing back in reserve, and
they were ready to go bankrupt, and they retained me at the sum
of $250 a month.
They could have done this themselves. They had six years
previous to do it in.
I went down, and retained the services of a certified
public accountant, brought them up to the firm, set up their
books, set them up a new payroll system, and they set up their
machinery and their equipment and their buildings on a lesser
number of years to depreciate, and I saved them thousands of
dollars.
Senator McClellan. I am not primarily interested at the
moment in specific cases. I am trying to determine, as a public
relations man and in your relations here with Mr. Morgan, a
Washington attorney, and with others in handling claims against
the government, or in selling some service to clients in
matters relating to the federal government, what you actually
sold them. You did not sell them professional ability as a
lawyer.
Mr. Duke. No.
Senator McClellan. You did not sell them professional
ability as an accountant.
Mr. Duke. Not a professional accountant, no.
Senator McClellan. All you sold them was placing them in
contact here with somebody whom you thought could help them?
Mr. Duke. No, not necessarily.
Senator McClellan. What else besides that?
Mr. Duke. I would go over their entire case, over all of
their books, and I would probably spend maybe two or three
weeks going over them to determine, to see if they had a
justifiable cause to oppose the Internal Revenue Department on
their case; and if I so found, I would so advise the client.
Senator McClellan. Then what further service did you
perform?
Mr. Duke. Then, I would advise them to retain competent
counsel.
Senator McClellan. And you would recommend that counsel
that you thought was competent?
Mr. Duke. That is right.
Senator McClellan. Now, that is the service that you
undertook to perform to earn the fees you charged or which they
would be willing to pay?
Mr. Duke. That is right.
Senator McClellan. I just wanted to get that clear.
Senator Jackson. Just one question.
Senator McClellan. I am sorry. I have to go, and I wanted
to get in the record just what his business was in the thing.
Senator Jackson. I have one question along that line.
The Chairman. I would like to say they have got to put him
on a plane at six o'clock.
Senator Jackson. What is the reason for using these code
words, ``talent,'' and so on?
Mr. Duke. Again, I will have to go back, and I don't
recall.
Senator Jackson. What were you trying to cover up?
Mr. Duke. Well, let us put it this way. My vocabulary is
limited, and I probably used it for a varied expression.
Senator Jackson. You have admitted that it is not used in
or it was not used in its usual sense or its usual meaning and
context.
Mr. Duke. No.
Senator Jackson. What were you trying to cover up?
Mr. Duke. I didn't admit specifically it was not used in
that as its common acceptance, and I say it is possible that I
used it for not its common acceptance.
Senator Jackson. Why, then, would you use it not in its
accepted sense, and what were you trying to cover up?
Mr. Duke. Nothing to cover up, and I do not recall why I
used it.
Senator Jackson. You are not using it in its usual sense?
Mr. Duke. That is true but I still don't recall why I used
it.
Senator Jackson. You were trying to cover something up.
Mr. Duke. I never tried to cover anything up, and if I had
tried to cover anything up I would have destroyed all of my
files, and there is nothing in my files that I am trying to
cover up, and they are all available.
Senator Jackson. You are using code words here.
Mr. Duke. Not necessarily.
Senator Jackson. Who would know what you meant by
``talent'' and the horse race business here, except you who
were sending it and Mr. Morgan on the other end?
Mr. Duke. Nobody here would, but suppose you and I were
friends, intimately, and we went around together and we used
various expressions, and perhaps I might have been using one,
and you and I would get to know each other very well and have
various expressions, and there it would be a lot better than a
lot of people----
Senator Jackson. Now, maybe you have given an answer.
Senator Potter. Could I ask one question? You sold your
services as a public relations man?
Mr. Duke. Not necessarily as a public relations man, just
agent.
Senator Potter. In your testimony, you said that your
office--you had an office?
Mr. Duke. My office was a diversified office.
The Chairman. Senator Potter, I had hoped we could let
everybody question the witness fully, and I had hoped the
congressmen would have a chance, but the traffic is extremely
bad and it is getting late.
You are still under subpoena, Mr. Duke, and you are now
ordered to return here on February 2, at ten o'clock in the
morning, unless notified of some other time. And you will call
the committee collect, on the Friday before February 2, you
understand.
Mr. Duke. How long is that from now?
Mr. Flanagan. Two weeks from Friday.
Mr. Duke. That is all right.
The Chairman. I may say to the congressmen and senators
here, I think it would be well, if we are contacted by the
press, if we would refuse to comment on this matter, in view of
the fact we are in such a preliminary stage.
[Whereupon, at 5:15 p.m., a recess was taken until 10:00
a.m., Monday, February 2, 1953.]
RUSSELL W. DUKE
[Editor's note.--Edward P. Morgan (1913-1986) served as an
FBI agent from 1940 to 1947, rising to the rank of chief
inspector. He was also a staff member of the joint committee
that investigated the Japanese attack on Pearl Harbor. In 1947
he joined the Washington law firm of Welch, Mott and Morgan,
specializing in corporate, tax, and international law. In 1950
he became chief counsel to the special subcommittee of the
Senate Foreign Relations Committee, chaired by Senator Millard
Tydings, that investigated Senator McCarthy's charges of
Communists in the State Department. During the Korean War, in
1951, Morgan became chief of the enforcement division of the
Office of Price Stabilization. He resigned that position in
1952 and went to Wisconsin to campaign against Senator
McCarthy's reelection.
After Russell Duke refused to return to testify in public,
Morgan was not called back to give public testimony. In its
annual report, the subcommittee noted: ``There is no indication
that Duke performed any legitimate service for any taxpayer. He
possessed no legal, accounting, or other technical ability. Not
a lawyer himself, he utilized the services of attorneys and
primarily the services of Edward P. Morgan, of Washington, D.C.
In the cases investigated by this subcommittee, Russell W. Duke
received a total of $32,850 in fees, and approximately $2,500
in expenses; and Attorney Edward P. Morgan received $13,700 in
fees, and $450 in expenses. Completion of this investigation is
awaiting the resolution of Duke's criminal trial. In the
meantime, the evidence concerning Morgan's conduct is being
submitted to the Washington, D.C., Bar Association.'' However,
Duke was acquitted and Morgan remained a member in good
standing in the District Bar. In 1980 and 1985 he served as a
member of the Presidential Commission on Executive, Legislative
and Judicial Salaries, and in 1985 was named to the President's
Commission on the Bicentennial of the United States
Constitution.
Edward P. Morgan did not testify in public session.]
----------
FRIDAY, JANUARY 16, 1953
U.S. Senate,
Senate Permanent Subcommittee on Investigations
of the Committee on Government Operations,
Washington, DC.
The subcommittee met, pursuant to Senate Resolution 251,
agreed to January 24, 1952, at 10:30 a.m., in room 357 of the
Senate Office Building, Senator Karl E. Mundt presiding.
Present: Senator Karl E. Mundt, Republican, South Dakota;
Senator Everett M. Dirksen, Republican, Illinois; Charles E.
Potter, Republican, Michigan; Senator John L. McClellan,
Democrat, Arkansas; Senator Henry M. Jackson, Democrat,
Washington.
Present also: Representative Kenneth A. Keating,
Republican, New York; Representative Patrick J. Hillings,
Republican, California.
Present also: Roy Cohn, chief counsel; Robert Collier,
chief counsel, House Subcommittee to Investigate the Department
of Justice, Committee on the Judiciary; William A. Leece,
assistant counsel; Jerome S. Adlerman, assistant counsel;
Robert F. Kennedy, assistant counsel; Ruth Young Watt, chief
clerk.
Senator Mundt. The committee will come to order.
Mr. Cohn, who is our first witness?
Mr. Cohn. Our first witness, Mr. Chairman is Mr. Edward P.
Morgan.
Senator Mundt. Will you be sworn?
Do you solemnly swear to tell the truth, the whole truth,
and nothing but the truth, so help you God?
Mr. Morgan. I do.
TESTIMONY OF EDWARD P. MORGAN
Senator Mundt. For the purpose of the record, will you give
the committee your name and address, present position and
occupation?
Mr. Morgan. Edward P. Morgan, residence 3000 39th Street,
Northwest, Washington, D.C.; business, law office, 710 14th
Street, Northwest.
Senator Mundt. Now, Mr. Cohn will proceed with the
questioning.
Mr. Cohn. Mr. Morgan, for how long a period of time have
you been engaged in the active practice of law in Washington?
Mr. Morgan. Since March 15, 1947.
Mr. Cohn. What did you do directly prior to that time?
Mr. Morgan. I was associated with the Federal Bureau of
Investigation.
Mr. Cohn. For how long a period of time?
Mr. Morgan. March 2, I believe, 1940.
Mr. Cohn. Do you know a man by the name of Russell Duke?
Mr. Morgan. I do.
Mr. Cohn. When did you first meet Mr. Duke?
Mr. Morgan. If I may refer to some notes, please, counsel,
because I tried to refresh my memory on first knowledge of this
man, I would like to say at the outset, of course, that since
the inquiries that have come to me from certain members of the
press, I have endeavored to refresh my memory from every source
I possibly could, and on the basis thereof, I am going to try
this morning to certainly present to this committee, completely
and fully, all the information that I have. I must say,
however, that inasmuch as this goes back four and a half,
almost five years, I naturally cannot remember all of the
details; but I certainly will do the best I can.
Mr. Cohn. I think the question was: When did you first meet
Mr. Duke?
Mr. Morgan. In September; September 16, 1946, to be exact.
Mr. Cohn. And under what circumstances?
Mr. Morgan. A very good friend of mine, of long standing,
brought Mr. Duke to my office.
Mr. Cohn. What was your friend's name?
Mr. Morgan. Mr. Howard I. Bobbitt, an attorney of Portland,
Oregon, whom I had known for years in the FBI, and who, in
fact, had been agent in charge of the FBI in Portland, Oregon.
Mr. Cohn. And for what purpose did Mr. Bobbitt bring Mr.
Duke to your office on that occasion?
Mr. Morgan. There was no ostensible purpose in bringing Mr.
Duke to my office. Mr. Bobbitt came into see me, as he does
every time he came to Washington.
Mr. Duke was accompanying him at that time.
Mr. Cohn. Had you ever heard of Mr. Duke before this
meeting?
Mr. Morgan. Never, to my best knowledge and belief.
Mr. Cohn. Mr. Bobbitt had never mentioned him to you in any
way?
Mr. Morgan. To my best knowledge and belief, he had not.
Mr. Cohn. And Mr. Bobbitt walked in and brought this man
Duke in with him, and that is the first you ever heard of
Russell Duke?
Mr. Morgan. That is correct.
Mr. Cohn. Can you give us the substance of the conversation
at that first meeting?
Mr. Morgan. Well, apart from the matter of mere social
conversation, Mr. Bobbitt mentioned to me that at that time
they had been in Washington along with an attorney from San
Francisco in connection with a particular case, one involving a
man named Thomas Guy Shafer, of Oakland, California.
He stated that they had been having conferences at the
Bureau of Internal Revenue with respect to the case. He advised
me that Mr. Knox was the counsel for Mr. Shafer and that, in
all probability, the case was going to require a great deal of
additional work and that they would probably need Washington
counsel in connection with it.
He asked me if I would consider handling the case. I talked
with them in some detail concerning their knowledge of the
matter and asked them if they were in a position to retain me
at that time. They said that certainly, subject to approval by
Mr. Knox.
Mr. Knox, to the best of my knowledge at that time, was in
Washington, or at least was on his way to New York.
But, in any event, Mr. Knox came by my office a short time
thereafter and explained to me who Mr. Shafer was. He was a
druggist in Oakland. There was a tax deficiency of a very
sizable amount, approaching, on, as I remember, 400, maybe
$500,000, with the penalties that were involved.
And thereafter I agreed to represent Mr. Shafer and I did
represent him.
Mr. Cohn. What was Mr. Bobbitt's connection with the tax
man, Mr. Shafer?
Mr. Morgan. Mr. Bobbitt was associated as company counsel
with Mr. Knox.
Mr. Cohn. What was Mr. Duke's connection?
Mr. Morgan. Mr. Duke's connection, there I must say it is
quite vague in my mind, because I had little occasion to
inquire at that particular point.
As a matter of fact, I am not at all certain, this far
removed, that I have any specific knowledge concerning the
nature of Mr. Duke's association at that time.
Now, in light of what I now know--and it is sometimes
difficult to distinguish between what you then know and what
you know now--Mr. Duke, it appears, was associated as a public
relations counsel or an investigator or what not for Mr.
Shafer, and it is my understanding, since that time I did not
know it then--to the best of my knowledge, Mr. Knox had engaged
Mr. Duke for that purpose.
Mr. Cohn. And Mr. Duke is not a member of the bar?
Mr. Morgan. Not to my knowledge.
Mr. Cohn. Did you ever have any communication with Mr. Duke
about the Shafer case after that first meeting?
Mr. Morgan. When you say communication, do you mean written
communication, or oral?
Mr. Cohn. I mean written or oral, direct.
Mr. Morgan. I am sure he came by my office many times. He
probably inquired about it.
Mr. Cohn. What was he doing in connection with this case?
Mr. Morgan. Insofar as I was concerned, after I took over
the active handling of the case, there was no service he was
performing as far as I was concerned.
Mr. Cohn. For what purpose was he in communication with you
when you became counsel?
Mr. Morgan. Merely an inquiry in connection with the case,
as to its status and so on.
Mr. Cohn. Was he representing Mr. Shafer?
Mr. Morgan. He was representing Mr. Shafer.
Mr. Cohn. I say did he come in and inquire in behalf of Mr.
Shafer?
Mr. Morgan. Not as such. It was merely an inquiry, since he
had been in my office in the initial conversation concerning
the case, as to how the Shafer case was coming along.
Mr. Cohn. And you felt at liberty to discuss that?
Mr. Morgan. I didn't see any reason why I shouldn't.
Mr. Cohn. Were you authorized by Mr. Shafer or his counsel
to discuss the case with Mr. Duke or to consult him in any way?
Mr. Morgan. As a matter of authorization; certainly not.
Mr. Knox knew Mr. Duke and had been in discussion with him,
certainly about the matter. You can ask Mr. Knox.
Mr. Cohn. What finally happened with the Shafer matter?
Mr. Morgan. Mr. Shafer was indicted.
Mr. Cohn. Did you receive a fee in connection with your
services?
Mr. Morgan. I did not.
Mr. Cohn. You received no remuneration whatsoever?
Mr. Morgan. None whatsoever.
Mr. Cohn. Did Mr. Duke receive any?
Mr. Morgan. I do not know and at that time I had no idea
that Mr. Duke was in any way engaged, as I indicated earlier,
formally in the case.
I know now that Mr. Duke received funds in connection with
the case, I certainly do.
Mr. Cohn. You know that now?
Mr. Morgan. Yes.
Mr. Cohn. When did you find that out?
Mr. Morgan. I found that out from newspaper reports at the
time the King committee was out in California.
Senator Mundt. May I inquire: why would you be discussing
the case with Mr. Duke when you knew he was connected with it?
Mr. Morgan. Senator, insofar as Mr. Duke was concerned, it
was not a matter of discussing the case, and, as I say, I have
no definite record on the matter. I am sure that somewhere
along the line, after having been in the office with Mr.
Bobbitt, he may have inquired of me, ``How is the Shafer case
coming along,'' something like that.
I would indicate to him there was nothing to report,
nothing new and no developments in the matter. I saw nothing
improper in that, certainly, still don't.
Mr. Cohn. Did you ever have any relations with Mr. Duke
concerning any other case?
Mr. Morgan. Yes, I did.
Mr. Cohn. How many others.
Mr. Morgan. I would like to indicate specifically each one,
if you would like.
Mr. Cohn. Could you give us first the total and then
discuss them?
Mr. Morgan. Insofar as the reference of matters that I
could say Mr. Duke referred a case to me, there would be two
cases specifically. One was the case of Dr. Ting David Lee, a
Chinese doctor in Portland, Oregon, and the other is a case
involving a man named Noble Wilcoxon, of Sacramento,
California.
Now, after having made that observation--and if you would
like any other explanation of that I will be glad to give it to
you--I should say this: On November 10, 1948, Mr. Duke came to
my office. He was accompanied at that time by a Mr. Conrad
Hubner, introduced to me as a lawyer of San Francisco. We had a
conversation generally by way of discussion of mutual
acquaintances.
I learned that Mr. Hubner had associated with him a man
that I had known in the FBI, and at this particular meeting,
Mr. Hubner discussed with me the possibility of handling the
Washington end of two cases in which he was counsel.
He stated that these cases were at that particular time
still under consideration in San Francisco. He said he was
three thousand miles away from Washington and necessarily had
to have someone here because he couldn't be coming back and
forth to handle the Washington end and the Washington incidents
of the cases, there were two.
One of those cases involved a man named Harry Blumenthal.
The other involved a man named Wolcher. I have forgotten his
first name.
Mr. Hubner advised me that he did not know when those cases
would be referred to Washington for consideration.
I noted here that that visit was on November 10, and that
he forwarded to me power of attorney in each of those cases on
March 24, 1949.
Now, I mentioned those two cases because there was an
instance where Mr. Duke had referred to me an attorney--I
assume he recommended me. I was very grateful for his having
done so, and I assume responsibility in those cases.
Mr. Cohn. Following this initial recommendation when Mr.
Duke came in with Mr. Hubner, did you have any communication
with Mr. Duke concerning those cases, following the initial
meeting?
Mr. Morgan. The Wolcher and Blumenthal Case?
Mr. Cohn. Yes, the Wolcher and Blumenthal.
Mr. Morgan. I may have. I recall none certainly. But I
would not say I did not, because I have no recollection. If you
have anything that might refresh my recollection on the matter,
I would be glad to see it.
Senator Mundt. Have you examined your files in your office?
Mr. Morgan. Yes, I have. I have examined them, Senator; I
received a subpoena sometime in the afternoon, I guess it was
last Monday, at eight, I believe.
It was a ``forthwith'' subpoena, requesting that I produce
all records and so on--I don't know, maybe counsel would like
to read the subpoena into the record--with respect to any
correspondence of any kind with Russell Duke and any financial
dealings with Russell Duke and so on.
As I say, it was the ``forthwith'' subpoena. I wanted to
comply with it in every way possible.
We had no file on Russell Duke. That meant that to obtain
any correspondence, conceivably we would have to run through
virtually every file in the office, including general
correspondence and that sort of thing.
But I took girls off other work and made them run a check
of all of our files, and at 5:30 I called the counsel of the
committee, and said that insofar as I was able to I would be
glad to come up and produce these records. They said that
wouldn't be necessary, I could be up in the morning, and I did
at 10:30 in the morning.
As I said then and I certainly repeat now, I would not
vouch that that is every piece of correspondence with respect
to Russell Duke, I don't know. That is all we could find at the
time. There may be more.
Mr. Cohn. Since the time you produced those papers, have
you continued to search the files to determine whether or not
you did in fact fully comply with the subpoena?
Mr. Morgan. Yes. We haven't made a consistent project out
of it. We have been very busy in the office in the last few
days. As a matter of fact, when I received the subpoena, I had
a man who traveled eighteen hundred miles to confer with me on
the case. I dropped it and went out on this.
The best we can, we did, yes. I find no other
correspondence insofar as he is concerned.
Mr. Cohn. You have no other correspondence?
Mr. Morgan. No other correspondence.
Mr. Cohn. So following the searches you made, you now feel
you have complied with the subpoena?
Mr. Morgan. Insofar as I was able to, yes.
Mr. Cohn. And that you produced every paper called for by
the subpoena, in your possession?
Mr. Morgan. Yes, sir.
Mr. Cohn. What was the final determination of the Wolcher
and Blumenthal cases?
Mr. Morgan. Those were two separate cases.
Mr. Cohn. What was the final determination of each one of
them?
Mr. Morgan. In the Blumenthal case--I remember that rather
vividly----
I assume, Senator, that we regard this as proper to be
discussing incidents of a case. I am somewhat reluctant to do
it because of the relationship with the client, but I will go
ahead and do it, if you like.
In that particular case I conferred with the Justice
Department attorney after the case had been referred to the
Justice Department.
Mr. Cohn. Could you give us his name, please?
Mr. Morgan. I think it was Mr. John Lockley.
Mr. Cohn. Was he in the tax division?
Mr. Morgan. Yes.
Mr. Lockley told me very frankly that they intended to
prosecute Blumenthal unless he saw fit to come clean.
By that he meant Blumenthal's position was that he had not
received himself, on his own behalf, certain monies in certain
transactions growing out of deals during the war. And Lockley
stated that the Justice Department was simply not going to
accept that position, that they were going to insist that he
indicate who got the money, or they were going to prosecute
him.
I communicated that information to Mr. Hubner in San
Francisco. Mr. Hubner thereafter advised me Mr. Blumenthal had
stated that he had gone to jail once in connection with the
incidence of that case, and that he did not intend to go again.
Thereupon he made a full disclosure in the matter. That
information was made available to Mr. Lockley.
I don't know whether Mr. Blumenthal became a witness for
the government thereafter against those individuals who
received the money, or not. To the best of my recollection, the
case was taken on from there.
I don't know, frankly, the ultimate disposition.
Mr. Cohn. Did you ever receive a fee?
Mr. Morgan. Yes, I received a fee of $1,000.
Mr. Cohn. Did Mr. Duke receive a fee?
Mr. Morgan. I do not know. I have no knowledge in the
matter.
Senator Mundt. At what point in the case did you cease to
be connected with him?
Mr. Morgan. At such time as I had understood from
conversations with Mr. Hubner that they were going to proceed
locally with a further investigation of the matter, based on
the additional information that Blumenthal had voluntarily
supplied the Department of Justice.
On the Wolcher case, I had one conference, as I remember
it, perhaps two--I can't be sure of that--with Mr. Lockley. I
remember the first one very vividly, because while I was
talking to Mr. Lockley I received a very fateful telephone call
in my life. The call was for me to consider taking the position
as counsel to a certain committee of the Senate.
Mr. Cohn. Which committee was that?
Mr. Morgan. That was a subcommittee of the Senate Foreign
Relations Committee.
Mr. Cohn. Did Mr. Duke make any efforts to obtain that
counselship for you?
Mr. Morgan. Certainly not. I say certainly not. I don't
know what Mr. Duke may have done at any particular time, but
insofar as I know, he certainly did not.
Mr. Cohn. Did you ever discuss that counselship with him?
Mr. Morgan. Prior to assuming the counselship?
Mr. Cohn. Yes.
Mr. Morgan. Certainly not. I am quite positive of that.
Senator Mundt. Did you afterward?
Mr. Morgan. What do you mean discuss it, Senator? I don't
understand what you mean. I have discussed the incidents of my
association with that committee but----
Senator Mundt. Tell us what you mean by the kind of
discussion that you had.
Mr. Morgan. With Mr. Duke?
Senator Mundt. Correct.
Mr. Morgan. I don't remember any discussion, with Mr. Duke,
but I certainly wouldn't say, Senator that I didn't talk with
him and with hundreds of other people about my association with
the committee.
Senator Mundt. I wondered when you qualified the question
``prior to,'' which indicated that you had discussed it
afterwards.
Mr. Morgan. I made that observation because counsel's
inquiry related to whether Mr. Duke had anything to do with my
securing the position, and I stated that certainly not to my
knowledge, in any way.
And I remember excusing myself from Mr. Lockley's office at
that time. I talked with those who were interested in having me
take that position, and I agreed to do so.
Thereafter, having become counsel to the committee, I
withdrew from active consideration of cases and later on Mr.
Hubner came back to Washington for a conference on the Wolcher
case. He went to the Justice Department with one of my law
partners. They conferred on it. Mr. Wolcher thereafter was
indicted, so I understand.
Mr. Cohn. Did you receive any fee?
Mr. Morgan. I received a thousand dollars in connection
with each of those cases, and that $1,000 was a retainer paid
me at the time Mr. Hubner originally engaged me for the purpose
of handling the cases at such time as they might be referred to
Washington for attention.
Mr. Cohn. The $1,000 was for the purpose of a retainer in
case the cases got down to Washington?
Mr. Morgan. Exactly.
Mr. Cohn. What if the cases didn't go down to Washington?
Mr. Morgan. The retainer necessarily would be returned to
Mr. Hubner.
Mr. Cohn. Did you ever return any retainer that you took on
that basis in any tax case?
Mr. Morgan. In any tax case?
Mr. Cohn. Yes.
Mr. Morgan. Yes, I have returned retainers.
Mr. Cohn. In tax cases. You took the retainer predicated on
the possibility of the case going to Washington?
Mr. Morgan. Well, now, I think of one case in which a fee
in escrow was returned.
Mr. Cohn. What was the name of that case?
Mr. Morgan. That was the Shafer case.
Mr. Cohn. That is the one in connection with which you
originally met Mr. Duke?
Mr. Morgan. That was the one at the time Mr. Bobbitt
brought Mr. Duke to my office.
Mr. Cohn. I asked whether or not you had received any fee
and you said no.
Mr. Morgan. I didn't receive any fee.
Mr. Cohn. How much was put up in escrow?
Mr. Morgan. $20,000.
Mr. Cohn. What was the escrow arrangement?
Mr. Morgan. The escrow arrangement was simply this: I
talked to Mr. Knox at the outset in the handling of the case.
The matter of fee came up. Mr. Knox explained it to me this
way: that Mr. Shafer had spent a great deal of money in
connection with legal representation and for other purposes in
an effort to get this case disposed of locally; and that he did
not feel in the position to want to spend any additional money
by way of a fee as such.
That, of course, meant that he wanted the case to be
handled on a contingency basis.
I discussed with Mr. Knox fully the incidents of the
matter. I looked at the size of the case insofar as dollars and
cents were concerned, I looked at the ramifications of it, I
looked at the financial position of the client. I set a
contingency fee, explaining to Mr. Knox at that point that
manifestly, in a case that was going to involve as much work as
certainly I anticipated would be involved in this case, that
the contingency would be appreciably higher than would be an
out-and-out fee at the outset.
In setting the fee additionally, I realized that I would
have to send a reference fee to Mr. Bobbitt.
I also contemplated that I would probably have to go to
California to make inquiry and further investigation and
probably engage an accountant, which I assumed that I would
have to pay for in the situation.
This fee was placed in escrow in the event prosecution was
denied in the case.
Mr. Cohn. Who was the escrow agent?
Mr. Morgan. The escrow agent--there was no formal escrow
agent.
It was maintained in a reserve account in Riggs National
Bank.
I understood Mr. Knox and I had formal correspondence with
respect to the arrangement.
Mr. Cohn. Exactly what was the contingency involved?
Mr. Morgan. Mr. Shafer did not want to be prosecuted. The
contingency in the case was whether or not we could present the
case to the Department of Justice that would adequately
convince the department that this was a case that should not be
prosecuted criminally.
Mr. Cohn. The indictment was stopped or did not go forward?
Mr. Morgan. Well, you can characterize it any way you like.
Mr. Cohn. Did you return the $20,000 immediately after the
filing of the indictment?
Mr. Morgan. We did. I did not return it because I was not
with the firm at that time, but my office did.
Mr. Cohn. I think you were telling us about two other tax
cases which you handled as a result of introductions by Mr.
Duke, is that correct?
Mr. Morgan. There are two other cases in which Mr. Duke
seems to have been in the picture; and I want to relate both of
them.
Mr. Cohn. Will you please do so?
Mr. Morgan. Yes.
One case is a case involving a man named Jack Glass, of Los
Angeles, California. That case came to me by reference to me
from an attorney named Maurice Hendon.
I might say Mr. Hendon was then and is still a very
prominent lawyer.
Mr. Hendon called me concerning the handling of the case.
He made arrangements whereby he would come back to Washington
for a conference. There Mr. Hendon paid me a fee in connection
with the case, and I gave him a one-third reference fee for
referring the case to me.
At some stage of the picture--I don't know just exactly
where, when and how, I ascertained that Mr. Duke had approached
Mr. Glass in connection with this case.
I am frank to say that I think my knowledge insofar as any
particularity is concerned, it stems from a conference I had
with Mr. deWind of the King committee, who indicated to me, I
think that in this particular matter Duke had obtained some
money.
Mr. Cohn. Exactly when was this?
When did you get into the Glass case?
Mr. Morgan. Mr. Hendon, called my office on July 12, 1949,
and I held a conference with Hendon here in Washington, as I
remember, on July 27, 1949.
Mr. Cohn. It is your testimony that in the course of the
telephone conversation, in the course of the first meeting, Mr.
Duke's name was not mentioned in any way?
Mr. Morgan. To the best of my knowledge and belief, it was
not.
Now, in trying to recall something that happened that long
ago--I was in Los Angeles the other day in connection with
other business matters. I had a conference with Mr. Hendon in
connection with something wholly unrelated to any of this sort
of thing. He brought up at that time the fact that when the
King committee had been on the West Coast, that he had
submitted to the committee an affidavit concerning the matter.
I asked him at that point: I said, ``How and when and under
what circumstances, as best you can remember, did Mr. Duke
enter into this picture?''
He stated to me that his reference of this case to me was
by reason of some friend of mine who was a lawyer that he knew.
I don't know whether it was someone that I had known in the
bureau, or not.
He said that Duke had approached Glass and made an
arrangement with Glass over his objection.
That is the best that I can do to help you on that. That is
Mr. Hendon's recollection of the matter; insofar as I can
recall, it is my recollection.
Mr. Cohn. When did you first discover Mr. Duke's connection
with this particular case?
Mr. Morgan. I just couldn't recall. It is just a blank. I
remember Mr. deWind speaking out. I remember talking to Mr.
Hendon about it. But I don't remember any conversations with
Mr. Duke about it, but that certainly wouldn't mean that there
weren't any.
Here is what I am trying to remember in this situation.
Frankly, I draw a blank on it.
When Mr. Hendon was back here in July 1949, July 27, 1949,
I am, sure that if Duke were in the picture, that he must have
mentioned it, we must have discussed it. But I just have no
recollection on the point.
Mr Cohn. Did you keep any diary entries?
Mr. Morgan. No, I maintain no diary.
Mr. Cohn. From what were you able to reconstruct some of
these exact dates you have given us here?
Mr. Morgan. From the files on each of the cases.
Mr. Cohn. You mean correspondence?
Mr. Morgan. Yes. I mean correspondence or memoranda in the
files.
Mr. Cohn. Would your memoranda in the files in the Glass
case reflect whether or not Mr. Duke had been present at any of
these meetings?
Mr. Morgan. You mean insofar as with Mr. Hendon?
Mr. Cohn. With Mr. Hendon or with anybody else in
connection with the case?
Mr. Morgan. I am certain, insofar as I can reconstruct the
situation, counsel, that Mr. Duke was never at any conference
with me and Mr. Hendon.
In other words, I just have no recollection of it, and I am
sure if it occurred I would have remembered it.
Mr. Cohn. What was the final disposition of the Glass case?
Mr. Morgan. Mr. Glass was declared non compos mentis by the
court in Los Angeles.
Mr. Cohn. Was that following an indictment?
Mr. Morgan. No; it was prior to indictment. Mr. Glass was
supposed to have a very serious heart condition, and Mr. Glass
did have a heart condition, and I was advised by Mr. Hendon
that his physician said that the strain in connection with the
whole matter was responsible for it.
I say that because that was one of the things we presented
to the department as a basis for arguing that the case should
not be prosecuted.
Mr. Cohn. With whom in the Department of Justice did you
deal in connection with the case?
Mr. Morgan. As I remember, it was Colonel Victor
Swearingen.
Mr. Cohn. Did you receive any fee in connection with the
services you rendered in the Glass case?
Mr. Morgan. Yes.
Mr. Cohn. How much?
Mr. Morgan. I received a fee of $4,000, of which $1,500 I
forwarded to Mr. Hendon as a reference fee.
Mr. Cohn. Did Mr. Duke receive any compensation in
connection with that case?
Mr. Morgan. I have indicated to you, according to Mr.
deWind that he did.
Mr. Cohn. How much was it?
Mr. Morgan. I don't know.
Mr. Cohn. Mr. deWind mentioned no amount?
Mr. Morgan. He may have. I just don't remember.
Mr. Cohn. What is the next case you handled with which Mr.
Duke had a connection?
Mr. Morgan. This particular case, when you say Mr. Duke had
a connection, I remember quite well. I have tried to remember,
as best I can, the initial meeting in my office with Mr.
Bobbitt. At that time Mr. Duke was discussing various cases in
which he had been concerned. In other words, he was giving his
background to me, more or less. He had explained that during
the war he had represented various companies and organizations
and that many of those were involved in difficulties. I have
tried to remember some of those that he mentioned because a
newspaper man the other day asked me if I remember one case,
and there came back a flicker of memory on it.
It relates, I think to that discussion. It is a case
involving di Martini, that is. But who they were I don't know.
Now, di Martini, I didn't handle the case, don't remember
it. But there was one matter I do remember his mentioning when
he was in my office, and that is a rather bizarre case, on the
basis of what I now know about the incidence of it, involving
an Inez Burns of San Francisco.
Senator Mundt. Just a minute, before we get away from this.
All this discussion, this string of cases, was taking place
in your office, the first time you met him; is that right?
Mr. Morgan. No, Senator. These cases, I will be glad to
give you date by date as to when any of these cases came my
way. But I want to remember this case.
Senator Mundt. It is my understanding of your testimony a
few minutes ago that you said Mr. Bobbitt came to your office
and Mr. Duke was telling you about all these various cases.
Mr. Morgan. I was trying to resurrect my knowledge of Mr.
Duke and his activities, and this is the case I am about to
mention.
That is when I first heard of it.
Mr. Cohn. It is my understanding from your testimony just a
couple of minutes ago, that you were referring to this first
meeting in which Mr. Bobbitt brought Mr. Duke to your office.
You testified previously that the Shafer case was
discussed, is that right?
Mr. Morgan. That is the case that Mr. Bobbitt referred to
me, yes.
Mr. Cohn. And Duke came along to that meeting at which
there was a reference to the case?
Mr. Morgan. It was the first time I ever met the gentlemen.
Mr. Cohn. Haven't you just testified that at the same
meeting Mr. Duke also mentioned to you this Inez Burns case?
Mr. Morgan. I am trying to give you the background in
connection with the Burns matter because this is not a case in
which I feel that I was in any way associated with Mr. Duke as
a lawyer or anything like that.
Mr. Cohn. What I am trying to get at is this: Did Mr. Duke
mention this Inez Burns case to you at the first meeting
between Mr. Bobbitt, Mr. Duke and yourself?
Mr. Morgan. I am disposed to think he probably did, yes.
Mr. Cohn. Did he mention a case involving someone named di
Martini?
Mr. Morgan. Yes, I think so.
Mr. Cohn. Were there any other cases mentioned by Mr. Duke?
Mr. Morgan. I don't remember any others.
Mr. Cohn. Why did Mr. Duke, who is a public relations man,
not a lawyer, bring up three tax cases in his discussion with
you on that first occasion?
Mr. Morgan. As I remember, there were two: the Burns matter
and the di Martini case.
Mr. Cohn. How about Shafer?
Mr. Morgan. Mr. Bobbitt brought that case to me.
Mr. Cohn. You mean Mr. Duke didn't mention it?
Mr. Morgan. Mr. Duke was certainly there. But I mean in
source as far as I was concerned, that is a reference from--I
wouldn't say a lifelong friend but a friend of many years'
standing, who is a very reputable lawyer on the West Coast.
Mr. Cohn. He brought Mr. Duke with him, and Mr. Duke
participated in the discussion?
Mr. Morgan. There is no question about that.
Mr. Cohn. Did Mr. Duke participate in the discussion, about
the Shafer case?
Mr. Morgan. Mr. Bobbitt led the discussion in all.
Mr. Cohn. Did Mr. Duke participate?
Mr. Morgan. He may have.
Mr. Cohn. Don't you remember where he did, or whether he
did or didn't?
Mr. Morgan. Frankly, I don't.
Mr. Cohn. You do remember discussing that case with Mr.
Duke on subsequent occasions?
Mr. Morgan. Discussing as I said before. I have no positive
recollection on it, but if he inquired about the status of the
case we talked about it in my office with Mr. Bobbitt, I would
certainly have indicated to him what the status was.
Mr. Cohn. You said you had no positive recollection of it.
I thought you had previously testified quite definitely that
you had a clear recollection of Mr. Duke having made inquiries
as to the status of the case and having called you about the
Shafer case after the first meeting.
Mr. Morgan. The record will reflect that, Mr. Counsel.
Mr. Cohn. What is your testimony now?
Mr. Morgan. My testimony is now that I have no definite
recollection of discussions with Mr. Duke concerning the Shafer
case after the initial meeting, other than the fact that if he
had inquired about it I would have certainly told him the
status of the case.
Mr. Cohn. Except for that conjecture, it is your testimony
now that, according to your present recollection, you have no
recollection whatsoever of having discussed the case with Mr.
Duke after that first meeting?
Mr. Morgan. My testimony is that I have no positive
recollection one way or the other.
Mr. Cohn. Were any other tax cases discussed at that first
meeting.
Mr. Morgan. I tried to give you the last one, and if you
will let me proceed with it now, I will.
Mr. Cohn. Will you give me the name of the last one,
please?
Senator Mundt. That still doesn't answer the question.
The question was: were any other cases discussed at the
first meeting?
Mr. Morgan. Nothing other than the ones we have mentioned.
Mr. Cohn. Burns, di Martini and Shafer?
Mr. Morgan. Yes.
Senator Mundt. You are sure of that?
Mr. Morgan. Yes.
Mr. Cohn. Now, we were talking about the Burns case.
Could you tell us what was said about the Burns case by Mr.
Duke to you at that first meeting?
Mr. Morgan. My only recollection of that matter this far
removed is the presentation to me of a rather gory story about
the woman who had a large sum of money that she had secreted in
the basement of her home and that the rats had eaten up the
money and that it had become gummy and so forth. On the basis
of that, I recall that particular phase of it.
I remember that Duke indicated at that time that he had
some connection with this particular individual. And, as I
remember, he also had some connection with the attorney, as he
so indicated.
He said that he did not know what would ultimately happen
with the case or what the disposition of the case might be
ultimately, but that that was one of those situations in which
he hoped that he might refer to me as attorney.
On that occasion, that was in September 1948.
I did, in December of 1950--that is two years later--by
reference with Mr. Frank Ford, attorney of San Francisco,
associate myself with him in this particular case.
Mr. Cohn. Now, in between the original discussion with Mr.
Bobbitt, Mr. Duke and yourself about the Burns case at the time
you were retained in 1950, did you have any further discussions
with Mr. Duke about the Burns case?
Mr. Morgan. I may have.
Mr. Cohn. Oral or written?
Mr. Morgan. I may very well have.
Mr. Cohn. Did you or didn't you?
Mr. Morgan. I don't remember.
Mr. Cohn. You have no recollection whatsoever?
Mr. Morgan. No.
Senator Mundt. Did you have any correspondence with him?
Mr. Morgan. I recall no correspondence in the file.
Mr. Cohn. Did you do anything in connection with the Burns
case between this initial conversation in September 1948, and
the time you were retained in 1950?
Mr. Morgan. I may very well have. Probably to what you are
referring.
I received a copy of a so-called expose in the Duke matter
with respect to a newspaper in San Francisco.
Mr. Cohn. My question, Mr. Morgan, was----
Mr. Morgan. I am going to answer your question.
Mr. Cohn. I would appreciate it if you would.
Mr. Morgan. That particular newspaper account relates to a
postscript attributed to a letter from me to Duke. In that
particular postscript, as I remember--and I don't remember the
specific wording of it--but there is some indication that a
check on the Burns case does not locate it back to Washington,
and a request for an indication as to who the counsel was in
the case; in other words, requesting information from Duke.
So, if such a piece of correspondence exists, then to that
extent certainly I did.
I don't have the slightest recollection of it.
Mr. Cohn. Mr. Chairman, in response to the subpoena served
on this witness, he produced a copy of a letter dated March 31,
1949, as addressed to Mr. Russell Duke, signed by the penned
signature and added typed signature, Edward P. Morgan, on the
stationery of Welch, Mott and Morgan.
I would ask that that letter be received in evidence.
Senator Mundt. Is that the letter with the postscript?
Mr. Cohn. Yes, that is the letter with the postscript, to
which this witness affixed his signature.
[The letter referred to was marked as committee's Exhibit
No. 3, January 16, 1953, Edward P. Morgan.]
March 31, 1949.
Mr. Russell Duke,
4523 Northeast Alameda,
Portland 13, Oregon.
Dear Russ: Pursuant to our conversation yesterday, I am enclosing
herewith two photostatic copies of an editorial which may be somewhat
helpful to you relative to the matter which we discussed, along with a
clipping from the local Washington Times Herald.
Best personal regards.
Sincerely,
Edward P. Morgan.
Enclosures.
P.S. I don't seem to be able to get a line on Inez B. at either
place back here. Who is the attorney of record in her case? Can you
check at S.F. to find when they referred it to D.C.?
EPM.
Mr. Morgan. Should I have produced the letter pursuant to
the subpoena?
Mr. Cohn. Yes.
Mr. Morgan. That would be it, then.
Mr. Cohn. May I read it ?
Senator McClellan. Do you want to see the letter?
Mr. Morgan. Well, I would like to see it.
Mr. Cohn. After examining it, Mr. Morgan, would you read
the postscript, please?
Mr. Morgan. This is a letter dated March 31, 1949.
Senator Mundt. Let me ask you first: is that your
signature?
Mr. Morgan. I don't think there is any question about it,
Senator.
The letter is dated March 31, 1949, on the letterhead of my
office. It is addressed to Mr. Russell Duke, 45233 Northeast
Alameda, Portland 31, Oregon.
Mr. Cohn. Would you read the postscript, please.
Mr. Morgan. ``Dear Russ''--may I read the entire letter?
Senator Mundt. Surely.
Mr. Morgan.
Pursuant to our conversation yesterday I am enclosing
herewith two photostatic copies of an editorial which may be
somewhat helpful to you relative to the matter which we
discussed, along with a clipping from the local Washington
Times Herald.
Best personal regards. Sincerely, Edward P. Morgan.
It is signed ``Ed.'' Now, there is a postscript:
I don't seem to be able to get a line on Inez B.----
Which would be Inez Burns, presumably.
at either place back here. Who is the attorney of record in her
case? Can you check at S. F. to find when they referred to D.C.
It is initialed EPM.
Mr. Cohn. What did you mean by either place you were unable
to get a line?
Mr. Morgan. That would be whether or not it would be in the
Bureau of Internal Revenue or the Department of Justice.
Mr. Cohn. Had you made inquiries at the Bureau of Internal
Revenue and Department of Justice with reference to this case
prior to being retained?
Mr. Morgan. If this inquiry here was made, most assuredly
it was made before I was formally retained in December of 1950.
Mr. Cohn. Do you have any doubts that such an inquiry was
made?
Mr. Morgan. I would say that it must have been made. And
having been made and looking at this now, to the best of my
recollection, I think I could give you the situation, if you
would like to have it.
Mr. Cohn. First may I ask you this, Mr. Morgan: Whom did
you contact in the Justice Department and with whom were you in
contact in the Bureau of Internal Revenue?
Mr. Morgan. The contacts with the Justice Department is
with the clerk handling the cases over there. No power of
attorney is required or as required in the Department of
Justice.
Mr. Cohn. I was just trying to get the name.
Mr. Morgan. Somebody who handles the records. It would be
some girl.
Mr. Cohn. How about the Bureau of Internal Revenue?
Mr. Morgan. The Bureau of Internal Revenue--and the reason
I think I might remember this is the fact that I believe it is
the first time that I realized, as a practical matter, that you
had to have a power of attorney in order to ascertain whether a
case was pending in the Bureau of Internal Revenue.
I had known, of course, that you had to have a power of
attorney in order to represent a client before the Bureau of
Internal Revenue.
But in this particular instance, I am sure, by reason of an
inquiry as to the attorney of record, that we were advised that
they could supply no information concerning the matter.
Now, I have no background recollection on that other than
just what I have said.
Senator Mundt. Do you recall the purpose of the editorial?
Mr. Morgan. Senator, I don't have the slightest idea. The
note here ``Please return the news clipping,'' it is the only
one I had. I don't know what it related to. I have no idea.
That was March 1949.
Senator Mundt. It is a matter of some importance, because
the letter indicated the day before you had called Mr. Duke by
long distance and talked with him about it.
Mr. Morgan. Whether I called Mr. Duke or Mr. Duke called
me, I don't know.
I would say this: Mr. Duke was very prolific in his
telephone calls. I think if you were to check his records, you
would find that he made calls all over the country, and he
called many, many times, Senator, there is no question about
that, about many different things.
Senator Mundt. You mean he called you?
Mr. Morgan. Yes. When I wasn't there he called one of my
partners. He called me at home at night, all hours of the
night.
So there is no question about that, sure, he called me many
times. I would imagine he called me. But I couldn't be sure of
that, I don't know.
Mr. Cohn. What was the next step in the Burns case? Did you
hear back from Mr. Duke as to the name of the attorney of
record and when it was referred from San Francisco to the
District of Columbia?
Mr. Morgan. To the best of my knowledge, I didn't.
To the best of my knowledge, that is the last I can recall
of it, and I don't think the file enlightens me any.
Mr. Cohn. Until the time you were retained in 1950?
Mr. Morgan. By Mr. Ford.
Mr. Cohn. You have no recollection having done anything in
connection with the Burns case between March 31, 1949, the date
of this letter, and the date on which you were formally
retained by Mr. Ford?
Mr. Morgan. I have no recollection of having done anything,
and my opinion is that I did nothing.
Mr. Cohn. Did you discuss it with Mr. Duke between those
dates?
Mr. Morgan. I have no recollection of it.
Mr. Cohn. Did you discuss it with Mr. Duke between the
period of time that you were formally retained?
Mr. Morgan. To the best of my knowledge, I did not, but I
cannot be sure of that.
Mr. Cohn. What was the ultimate disposition of the Burns
case?
Mr. Morgan. She was indicted.
Mr. Cohn. Did you receive any fee in connection with the
Burns case?
Mr. Morgan. Yes, I did.
Mr. Cohn. How much?
Mr. Morgan. I think I received a fee in the neighborhood--
and this was paid me by Mr. Ford, the attorney--in the
neighborhood of something over $2,000, as I remember.
Mr. Cohn. Did Mr. Duke receive any compensation in
connection with that case?
Mr. Morgan. Not to my knowledge.
On that I feel reasonably certain, although on that I can't
be sure, because at the time I talked with Mr. DeWind he
discussed many situations in which Mr. Duke might have been
involved, some of which I had never heard of. He may have
advised me, but I just have no recollection.
Senator Mundt. How did he make out? With all these long
discussions by long distance calls--never seemed to get a fee.
Mr. Morgan. Senator, you will have to talk to Mr. Duke
about that, I can't help it.
Mr. Cohn. Are there any other tax cases concerning which
you had any dealings with Mr. Duke?
Mr. Morgan. To the best of my knowledge and belief, there
are no others.
Mr. Cohn. Did you mention a case involving a Dr. Lee?
Mr. Morgan. Yes.
Mr. Cohn. Tell us about that.
What connection did Mr. Duke have with that case?
Mr. Morgan. The records of that office indicated that in
March of 1949, Mr. Duke called the office to indicate that a
Chinese Doctor named Ting David Lee had had a jeopardy
assessment levied in his case and that the situation involved
moneys received by Dr. Lee by way of inheritance from the Lee
family in China.
He asked me if I would undertake to try to help him. He
said he had been trying to help Dr. Lee out there as best he
could in connection with the matter, and the man was strapped,
he had buildings downtown, it was perfect security for the
obligation owed the government, and that he felt that the
jeopardy assessment was unjust.
I told him that I would be glad to help him and in a way
that I properly could.
Then thereafter I wrote him, as I remember, indicating
that----
Senator Mundt. By ``him,'' do you mean Lee or Duke?
Mr. Morgan. To Duke, after he had called me--indicating
that I felt they should supply more information to me in order
that I could make an appraisal of the situation and to see in
what manner and to what extent we might be of assistance.
The next thing I knew, Mr. Duke appeared in Washington with
Dr. Lee, came to my office. I met Dr. Lee.
He impressed me as a very sincere type individual, and Mr.
Duke was obviously his agent, there is no question about that.
As a matter of fact, in view of Dr. Lee's complete lack of
acquaintance with any phase of tax matters, he certainly needed
some help.
And they told me what the story was. He had the jeopardy
assessment, he even had to borrow money to get back to
Washington he said, in connection with the case. He wanted to
know if I could do anything in connection with it.
I said ``Well, I don't know what we could do.''
We went over to the Bureau of Internal Revenue, and I would
like to say at this point that, to my knowledge, I didn't know
one single person over there, that is, to the best of my
recollection.
We went first to the----
Senator Mundt. What do you mean by ``we'' now, the three of
you?
Mr. Morgan. The three.
I had no doubts about Mr. Duke, I thought he was perfectly
legitimate. I took him right along.
We first went to the technical staff. We talked there--
well, I don't remember with whom we talked, but it must have
been some official there--about the case.
He explained to me that they felt that they could not grant
a conference prior to the filing of a petition in the tax
court; that was the normal procedure and they felt that they
didn't want to depart from it in this case.
We next went down on the collector's office to find out if
there was any possibility of lifting the jeopardy assessment
upon a showing of tangible assets in this country that would
adequately protect the government. Dr. Lee explained everything
he had.
Senator Mundt. To whom did you talk there?
Mr. Morgan. I don't remember his name, Senator. It was some
subordinate we talked to, anyway. I had made no appointment
with anybody. We just walked in cold. As a result of that,
nothing was accomplished. They felt we could do nothing. They
felt the matter of protecting the revenues was the
responsibility of the local collector.
So we went back to the office and Mr. Lee asked me what had
to be done in the situation. I explained to him there was one
thing that could be done. That was to file a petition in the
tax court and then request an early hearing before the
technical staff, in the hopes that you could have the matter
resolved and get the jeopardy assessment lifted.
He asked me if I would undertake to represent him in
connection with the matter, and I agreed to do so.
Mr. Cohn. Did you thereafter represent him?
Mr. Morgan. I did.
Mr. Cohn. What was the final determination in that case?
Mr. Morgan. The final determination of the case was a set
limit through the technical staff.
Mr. Cohn. In other words, you went ahead and filed the
petition, is that right?
Mr. Morgan. That is right, a petition was filed in
Washington, with the tax court.
I requested the head of the technical staff on the West
Coast for a conference. He set a conference date.
Mr. Cohn. Could you give us his name?
Mr. Morgan. I think it is Mr. Harlacker, as I remember. He
set a date for it. I flew to Portland, a period before the
technical staff, presented such evidence as Dr. Lee was in a
position to present, demonstrating that he had received these
moneys from China as a part of the Lee estate, that it was not
income subject to income tax. Thereafter I outlined for him
additional information which should be presented to support his
case based on inquiries made at the conference.
I returned to Washington thereafter. From time to time I
understand Dr. Lee was able to find record evidence of the
receipt of moneys from China, which he presented to the
technical staff. On the basis thereafter, the case was
ultimately compromised.
Mr. Cohn. Did the compromise take place out west?
Mr. Morgan. The first knowledge that I had of the
compromise was, as I had the power of attorney, and of course
it was my responsibility to agree to the compromise, and the
proposed compromise was referred to me for acceptance. I sent
it to Dr. Lee. I outlined the considerations in his case. I
recommended that he accept it.
Mr. Cohn. How much was the original jeopardy assessment?
Mr. Morgan. The jeopardy assessment, as I remember it
involved something like $100,000.
Mr. Cohn. For how much was it settled.
Mr. Morgan. It was settled for something over $6,000, with
interest. I think there was an interest item that may be
brought it up over seven. I can't give you exact figures,
without checking on it.
Mr. Cohn. Did you do anything in Washington in the Internal
Revenue Bureau to obtain an approval of the settlement down
there?
Mr. Morgan. To the best of my knowledge and belief on this
case, I did not.
Mr. Cohn. In other words, your own contact with the Bureau
of Internal Revenue was your original visit when you were
accompanied by Duke and the tax man.
Mr. Morgan. And the appearance of the technical staff.
Mr. Cohn. That was out west, wasn't it?
Mr. Morgan. Yes.
Mr. Cohn. I was talking about Washington.
Mr. Morgan. In Washington, to the best of my knowledge and
belief, that is all.
Mr. Cohn. And you had no communication, direct or indirect,
with anyone in the Bureau of Internal Revenue in Washington in
this case, following the original meeting; is that right?
Mr. Morgan. Right.
Mr. Cohn. How many times were you out west conferring with
the technical staff in connection with the matter?
Mr. Morgan. One time.
Mr. Cohn. Did you receive a fee in this case?
Mr. Morgan. Yes, I did.
Mr. Cohn. How much.
Mr. Morgan. It was a contingent fee. Dr. Lee explained to
me that he didn't have any money, that all his funds were tied
up.
He asked me if I would undertake to represent him on a
contingency basis, the contingency being whether or not he ever
got any money so he could pay me.
I agreed to do so. He set a contingency fee of $4,000 in
the case. I flew out to Portland, flew back. I had certain
expenses while I was there.
As I remember, I was there about three days. I made about
three speeches in the state while I was there. I don't remember
whether they were scheduled before, or after I knew I was
going.
When I got back, I communicated with Dr. Lee, explaining to
him--I think maybe I communicated with Russell Duke--explaining
to him that I did not feel that our contingency arrangement
would relate to the actual out-of-pocket expenses incurred on
the trip.
Thereafter--I have forgotten the exact date--he sent me a
check covering the out-of-pocket expenses which would total
something around $400, as I remember.
Thereafter the case was settled, the jeopardy assessment
was lifted. Dr. Lee paid our office the balance, and he
deducted, as I remember the expenses from the original fee and
got something around $3,450, something like that.
Mr. Cohn. Can you tell us the total amount of money you
received by you from Dr. Lee?
Mr. Morgan. Yes. I received $3,450 and expenses of $450.
I might say, Mr. Counsel, knowing what I know now about the
practice of law, I never would take a case of this kind for a
fee that low if it were on a contingent basis.
Mr. Cohn. Did Mr. Duke receive any compensation?
Mr. Morgan. I now know that Mr. Duke received very
substantial compensation in connection with the matter. I
understand that Mr. Duke received in the neighborhood of maybe
as much as eight or nine thousand dollars.
If I might just add, gentlemen, I can assure you that I
would not be handling the case for $4,000 contingent fee if I
had known Mr. Duke was getting $8,000 or $9,000.
Mr. Cohn. And the amount the taxpayer paid out to you and
Mr. Duke was about twice as much the amount the government got,
as a result of the settlement, is that right?
Mr. Morgan. I think those facts are self evident.
Mr. Cohn. Is there any other tax case----
Senator Mundt. Let me ask you first: Did you get your
payment from Mr. Duke, or Mr. Lee?
Mr. Morgan. From Dr. Lee.
Senator Mundt. Yes, Dr. Lee. The check was made payable to
the law office, Senator.
I was out of town, Senator, as I remember, at the time. In
other words, I was not available, and Dr. Lee communicated with
the office saying that Mr. Duke wanted the money paid to him,
and one of my partners wired out there that money was due to
Welch, Mott and Morgan and the check should be made payable to
Welch, Mott, and Morgan. So it was payable to the firm.
Senator Mundt. The money the firm received came from Dr.
Lee in a check signed by him?
Mr. Morgan. Right.
Senator Mundt. You received no money from Mr. Duke?
Mr. Morgan. As a matter of fact, I didn't see the check,
but I am sure it must have been from Dr. Lee, because the
correspondence indicates that he had forwarded the check.
I am sure it was not Mr. Duke. Of that I am confident.
Senator Mundt. You are sure you received no money from Mr.
Duke?
Mr. Morgan. No, sir.
Mr. Cohn. Is there any other tax case in which you had
dealings with Mr. Duke?
Mr. Morgan. To the best of my knowledge and belief, no.
Mr. Cohn. Getting back to this Lee case for one minute, in
what capacity was Mr. Duke acting for Dr. Lee?
Mr. Morgan. He was acting as agent of Dr. Lee, as I
understood it.
Mr. Cohn. Mr. Duke was not a lawyer or certified public
accountant, was he?
Mr. Morgan. No, he was not.
Mr. Cohn. He was a public relations man?
Mr. Morgan. I understood from Mr. Duke's discussion that he
handled public relations matters for clients, that he conducted
investigations for them and that sort of thing.
It was in that capacity that he was engaged by Dr. Lee.
I might say for your record that he was engaged by Dr. Lee
and not by me, and that I never had any discussions concerning
it with the view to having Dr. Lee engage me, if that is what
you want to know; none whatsoever.
Mr. Cohn. Have you ever had any financial transactions
direct or indirect, with anybody connected with the tax
division of the Department of Justice?
Mr. Morgan. Now, what kind of question is that? What do you
mean; financial transactions direct or indirect with anybody in
the Department of Justice?
Mr. Cohn. Is there something that isn't clear about the
question?
Mr. Morgan. No, I don't understand it. What do you mean
financial transaction? Do you mean did I ever in any way lend
anybody money or anything like that?
Mr. Cohn. Yes.
Mr. Morgan. Or pay them anything?
Mr. Cohn. That is right.
Mr. Morgan. The answer is, no, not of any kind.
Senator Mundt. Did you cash any checks?
Mr. Morgan. No.
For anyone in the Department of Justice?
Senator Mundt. Yes.
Mr. Morgan. Certainly not. On that score I can be almost
positive. I have no recollection of it.
Senator Mundt. What kind of financial transactions are you
trying to rule out?
Mr. Morgan. I was merely saying, for heaven's sake, if
somebody over there along the line wanted to borrow ten bucks
from me or something like that--no one did, Senator, but I lend
people money right and left.
Senator Mundt. You can say categorically you have had no
transactions, of any kind?
Mr. Morgan. I am confident of that.
Mr. Cohn. And would you make the same answer with the
Bureau of Internal Revenue?
Mr. Morgan. Yes.
Mr. Cohn. And how about Mr. Russell Duke?
Mr. Morgan. I have had no transactions with Mr. Russell
Duke apart from one matter, which I brought to the attention of
Mr. Flanagan and Mr. Collier when I brought the papers up here.
Mr. Cohn. Will you bring that to the attention of the
committee.
Mr. Morgan. I certainly will.
On June 22, 1949, Mr. Duke came to my office, he appeared
to be as near down and out as I have ever seen him. He also put
out a very bold front.
Mr. Cohn. What was the date again?
Mr. Morgan. July 22, 1949, as I remember it.
He said that his boy was seriously ill, that his wife had
to go to a hospital, that he had a hotel in Washington, that he
was flat broke and that he had no way to get back to Portland,
Oregon.
As a matter of fact, he broke down and cried in the office.
I said, ``Russell, what can I do for you?''
He said, ``I want to borrow some money.''
I said, ``How much do you feel that would be necessary for
you to take care of your problem?''
He said ``I would like to have five hundred dollars.''
Well, I didn't have $500 myself certainly to lend him.
I discussed it with my partners as to whether or not we
felt that we should, in the circumstances, lend the money to
him.
He said he would pay it back when he got back to Portland.
We decided to do it. We wrote a check payable to him, drawn
on our firm account. He said he would like to have the cash. I
had him endorse it, one of the secretaries went over to the
bank and got the cash and gave it to him.
That was entered as a loan to Russell Duke on our original
check stub on July 22, 1949. That is the only financial
relationship of any kind that I have ever had with Russell
Duke.
Mr. Cohn. Did he ever repay that $500?
Mr. Morgan. He did not, and I asked him about it on a
couple of occasions thereafter.
Mr. Cohn. When did you last ask him about it?
Mr. Morgan. I think the last time I asked him about it, if
I can remember--well, I couldn't recall the specific date
because he was flitting in and out of Washington so much I
don't remember exactly.
Mr. Cohn. Can you approximate the date for us?
Mr. Morgan. I couldn't give you any definite date.
It might have been late 1950, something like that. I know
he got a very serious injury in a mine explosion and he called
me from the hospital bed to tell me he was in bad shape and had
to have plastic surgery and that kind of thing.
I didn't have the heart to ask him them, so I remember that
was 1951.
So it must have been sometime in late 1950.
Senator Mundt. When was the last you saw Mr. Duke?
Mr. Morgan. I would say, Senator--and this is hard to
remember--but I would say the last time I probably saw him was
in maybe May of 1951.
Senator Mundt. When did you last talk to him on the
telephone?
Mr. Morgan. I think the last time I talked with him on the
telephone, as I remember, was when he called me from the
hospital after the explosion had wrecked him pretty much.
He indicated he was in rough shape, and wanted me to know
how he was getting along. I was also nice to him, kind to him.
As a matter of fact, let us put it straight on the record.
I was a young lawyer and I was grateful to Mr. Duke. I am still
grateful to him. I have nothing mean to say about that man. He
was kind to me and I appreciated this. And every one of these
cases was handled legitimately on the merits of any cases that
ever were.
Senator Mundt. That last telephone call in 1951 was a
hospital bed call, was it?
Mr. Morgan. Senator, I just can't remember, I am sure if I
checked my record of telephone calls----
Senator Mundt. Was it earlier, or later.
Mr. Morgan. I can't remember. It might have been later.
I just don't remember when the mine explosion was.
Senator Mundt. It was 1952.
Have you any correspondence with him since 1952?
Mr. Morgan. That I can't remember.
Senator Mundt. How carefully did you examine the background
or record of Mr. Duke before you became associated with him in
whatever capacity you were associated with him?
You were an old FBI agent so you did a pretty careful job?
Mr. Morgan. That is right. That is one of the very
embarrassing aspects of the whole thing, there is no question
about that.
I hope none of you gentlemen are ever comparably victims,
but unfortunately, my foresight is not as good as some people's
hindsight.
My law office is open, my door is open, anybody can come in
at any time. Here came a man to my office with one of the most
highly respected men I know even today. I took him for face
value, for what he was. I went out to Portland Oregon, to
handle the hearing in his Lee matter. I met his wife and I met
this man's children, and I was in his home.
He lived in a respectable part of Portland.
I made three speeches in Oregon, two at the Montriomah
Hotel. The best people in the city were there. He seemed to
know them all well by their first names. He belonged to nice
clubs, he took me to the club for dinner.
I had every reason in the world to believe he was a
legitimate individual.
Insofar as inquiring into the man's background, I wish now
I could conduct a complete FBI investigation on everybody that
walks in my office, but I imagine if I had to do that I
wouldn't practice too much law.
Senator Mundt. Why do you wish you had done it now?
What did you discover subsequently?
Mr. Morgan. Senator, I am sure you are not so naive as not
to realize what this sort of thing does to a professional man.
I mean you can appreciate it by realizing, if you have a good
and fine clientele, what this sort of thing does.
Senator Mundt. Have you subsequently discovered things in
Mr. Duke's record that you wish you had known about earlier?
Mr. Morgan. I understand Mr. Duke has a criminal record, I
understand that he sought to take his own life. I understand
that he had a terrific fight in which he threw his wife down
the stairs and she divorced him. I understand he was indicted
for perjury and running up and down the West Coast trying to
sell some fantastic story for $30,000 or $500,000, or what
anybody would give him, drunk as the lord. I know all that, and
that is what I am talking about. Certainly I wished I had known
that.
Senator Mundt. When did you learn about that?
Mr. Morgan. Insofar as the later matters that are
discussed, I didn't learn about that until relatively recently.
I knew that he was indicted by reason of a newspaper account
that appeared in the local paper about a year ago, I guess it
was. And I know that he sought to take his own life because the
same account treated of that.
I think the matter of his domestic difficulties was also
related in a clipping that I have, as I remember.
Senator Mundt. Is it a recent clipping, or how long ago?
Mr. Morgan. It was a year ago, in connection with the time
of his indictment. There was a story in connection with it
then.
Insofar as having the record is concerned, I think that
that goes back to late 1950, as I remember, or late 1949
perhaps. I remember asking him about it. He was in the office
and I said ``Russell, have you ever been arrested?''
He was evasive for a moment and then he said ``Yes, Yes, I
was.'' He said ``I would like to tell you the story.'' And he
related the entire story.
He said that when he was a young man, just out of the navy,
he was hitchhiking across the country. He was picked up, he
said, as he told me, by a driver of a car, and the police
stopped them. He said that he was a confused young man and that
they arrested both of them for some kind of robbery. As I
remember it, and he said he was a young, confused ``punk,'' as
he put it, didn't understand what the situation was, didn't
know how to defend himself, and he went to the penitentiary in
the state of Iowa. He told me of course, all the details about
it, which I don't remember.
He said when Governor Gillette, now Senator Gillette--at
the time he was governor--ultimately obtained the facts,
pardoned him. That was the story.
He presented that phase of it to me.
Senator Mundt. Did you ever ask Mr. Bobbitt, who was an
old-time friend and colleague of yours how come he didn't give
you the background of this man he brought to your office at
that time?
Mr. Morgan. Well, I don't recall instances in which I have
had an opportunity to chat with Mr. Bobbitt about it since the
time that I knew these things, certainly.
I am sure that Mr. Bobbitt didn't know it.
Senator Mundt. I thought you FBI agents have a habit of
looking pretty carefully into records of people.
Mr. Morgan. Perhaps we are given too much credit, Senator.
Mr. Cohn. Tell me about this $500 loan which has never been
repaid. Have you ever treated that in any way on your income
tax return?
Mr. Morgan. No, I haven't. I think he will pay me if he
gets it.
Mr. Cohn. You have not charged him for it?
Mr. Morgan. No. And I wouldn't push anybody. He has had his
troubles. I am not going to condemn him. You people pass
judgment on him, me or anybody else.
Mr. Cohn. My only question was how you treated it on the
income tax return.
Mr. Morgan. Yes, I know.
Mr. Cohn. Now, you mentioned the names of two people in the
Department of Justice, Mr. Lockley, is that correct?
Mr. Morgan. That is correct.
Mr. Cohn. John Lockley? Is he the man with whom you had
conferences with two of these cases?
Mr. Morgan. Yes.
Mr. Cohn. Had you known Mr. Lockley before you went to him
in connection with these cases?
Mr. Morgan. Mr. Lockley was a classmate of mine at
Georgetown.
Mr. Cohn. Had you known him following your graduation from
Georgetown?
Mr. Morgan. I could almost say this positively, but you can
never be sure, I don't think I saw Mr. Lockley from the day I
graduated from Georgetown in 1949, to the day I held a
conference with him on the Blumenthal case. I have no
recollection of seeing him in the meantime.
Mr. Cohn. There was another name you mentioned; Colonel
Swearingen.
Mr. Morgan. Yes, Colonel Swearingen.
Mr. Cohn. Had you known him prior to this conference on the
tax case?
Mr. Morgan. No.
Mr. Cohn. You had never met him before?
Mr. Morgan. No.
Mr. Cohn. Have you seen him since?
Mr. Morgan. Yes, I have seen him since.
Mr. Cohn. You have seen him since?
Mr. Morgan. Yes. I spoke at his church.
He invited me to come out and speak to his class. He is a
Sunday school teacher and I went out and talked to his class.
Mr. Cohn. Was that as a result of the meeting?
Mr. Morgan. I got acquainted with the gentleman and over a
period of time I met him from time to time.
Mr. Cohn. How soon after your conference in connection with
this tax case did this acquaintance come forward?
Mr. Morgan. The conference was in April of 1949, I guess,
the first one, and I guess I spoke at his church a year after,
two years later. I don't remember exactly.
Mr. Cohn. Did you see him between the April 1949 conference
and the time you went to his church to talk?
Mr. Morgan. I must have seen him, sure.
Mr. Cohn. On how many occasions?
Mr. Morgan. I don't know. Colonel Swearingen is very much
interested, or was very much interested--he was with the
Nuremberg trial, as I remember, and he was very much interested
in a problem that I still regard as a great problem.
I have a lot to say on that myself--unfortunately usually
on the unpopular side, the subject of communism.
On the basis of that we chatted quite a bit because he was
interested in the subject, and we both knew a little about it,
I think.
Mr. Cohn. What do you mean he was on the unpopular side?
Mr. Morgan. I said I was on the unpopular side.
Mr. Cohn. You were on the unpopular side?
Mr. Morgan. Yes.
Mr. Cohn. When after this conference in connection with the
tax case, did you next see Colonel Swearingen?
Mr. Morgan. I couldn't answer your question.
Mr. Cohn. Could you estimate for us, a week, two weeks, two
months?
Mr. Morgan. I would call him on the status of the matter
periodically.
Mr. Cohn. When did you first see him in connection with
things other than this particular tax matter?
Mr. Morgan. I would say that in so for as the personal
contact with him is concerned, I recall none other than the
time I met him at his church out at Connecticut Avenue and
spoke to his Sunday School class.
Mr. Cohn. That covers the time from when you first met him,
up to the present day?
Mr. Morgan. That is right, as far as I can remember.
Counsel, I have had a pretty rough existence. I have been
counsel to a pretty rough session on the Hill. I set up an
organization of three thousand men in OPS. I have spoken all
over the United States, I have met thousands of people. I can't
remember specifically when I saw this individual or some other
individual. To the best of my knowledge, that is the only time
I have seen him.
Mr. Cohn. The only time to, to the best of your knowledge,
the only time you have seen him was at the church you went out
to speak, that covers from the time you first met him?
Mr. Morgan. That is a qualified answer. I might have bumped
into him in the house or in front of the Justice Department.
Mr. Cohn. Have you ever been to his home?
Mr. Morgan. No.
Mr. Cohn. He hasn't been to yours?
Mr. Morgan. No.
Mr. Cohn. Have you ever spoken any place else under
arrangements made with him?
Mr. Morgan. No; not to the best of my knowledge. I might
have, though, I just don't remember.
Mr. Cohn. You have no recollection?
Mr. Morgan. No.
Mr. Cohn. We have talked about this subpoena which as
served upon you calling for the production of all records
relating to any transactions between Mr. Duke and yourself, and
you have told us that you have searched the files of your
office and made compliance with the subpoena.
Let me ask you: what is the usual routine in your law
office when letters come in relating to pending matters?
Mr. Morgan. I know what it is now. What it was in 1949 I
certainly can't be sure of, or 1950, or any other time during
the period we are talking about. I can tell you what our
routine is at the present time.
Mr. Cohn. Let us talk about 1949 and 1950.
Mr. Morgan. I have no recollection.
Mr. Cohn. Would you want to tell us whether or not you
think correspondence and papers in connection with cases were
retained?
Mr. Morgan. I would certainly say that any correspondence
relating to any official matter in the office was retained,
certainly.
Mr. Cohn. Would you customarily retain correspondence that
you received at your office?
Mr. Morgan. Normally, certainly; unless it was strictly a
personal letter that had no business in the files of the
office.
Mr. Cohn. What would you do with those letters?
Mr. Morgan. I might tear them up, take them home with me. I
might do any number of things with them. I got a letter just
this morning from a personal friend that has nothing to do with
the office.
Mr. Cohn. In complying with the subpoena, did you go
through your personal correspondence?
Mr. Morgan. I think I asked them to check my personal file,
yes.
Mr. Cohn. So, in other words, every source----
Mr. Morgan. We did the best we could. One girl worked all
night long on this thing to comply with the ``forthwith''
feature of it.
Mr. Cohn. Are there any letters that you received from Mr.
Duke that you did not produce in response to the subpoena?
Mr. Morgan. None that I know of, certainly.
Mr. Cohn. Mr. Chairman, may I have shown to the witness a
letter dated September 5, 1949, addressed to Mr. Morgan, signed
by Russell W. Duke.
I will identify it for the record as a letter dated
September 25, 1949, addressed to Welch, Mott and Morgan, 710
Erickson Building, 14th Street, Northwest, Washington, D.C.,
beginning: ``Dear Ed''--and with a typewritten signature
``Russell W. Duke.''
It is a three-page letter.
Mr. Morgan. Do you want me to read this?
Mr. Cohn. I would like you to just glance at it first and
tell us whether or not you recognize that as a letter you
received from Mr. Duke.
Then having told us that, I would like you to read the
letter from beginning to end.
Mr. Morgan. Do you have a question?
Mr. Cohn. Have you read that letter?
Mr. Morgan. Yes.
Mr. Cohn. Do you recognize that as a letter you received?
Mr. Morgan. To the best of my knowledge, I never saw that
before.
Mr. Cohn. Can you tell us whether or not you received the
original of that letter?
Mr. Morgan. I certainly can say that, to the best of my
knowledge and belief, I never saw that before.
Mr. Cohn. You never saw that before?
Mr. Morgan. Correct. To the best of my knowledge and
belief, I never saw that before.
I recall some of matter mentions in there, I mean this
Bremen matter that he mentions, I remember that situation, but
this letter right here and the facts relating in it do not
click with me at all, and it is my considered opinion that I
never saw it before.
Mr. Cohn. It is your considered opinion that you never did
see that letter before, is that right?
Mr. Morgan. That is right.
Mr. Cohn. Let me ask you: if you had received such a
letter, would that have been in the files of your office?
Mr. Morgan. Certainly.
Senator Dirksen. The hearing will recess until two o'clock.
[Whereupon at 11:50 a.m. a recess was taken until 2:00 p.m. the
same day.]
Afternoon Session
[2:00 p.m.] Senator Dirksen. The hearing will resume, Mr.
Cohn, you may proceed.
Mr. Cohn. Thank you, Mr. Chairman.
Mr. Morgan, is it still your testimony that you never
received this letter which was shown to you just before the
recess, referring to the one dated September 5, 1949.
TESTIMONY OF EDWARD P. MORGAN (RESUMED)
Mr. Morgan. My testimony is that to the best of my
knowledge and belief I have never seen that letter before you
showed it to me.
Mr. Cohn. You read it.
Mr. Morgan. Yes.
Mr. Cohn. I believe you said that the matters in it are
familiar to you?
Mr. Morgan. One of the matters is, particularly.
Mr. Cohn. Are there any matters mentioned in here with
which you have no familiarity?
Mr. Morgan. May I see the letter again?
Mr. Cohn. Of course.
Mr. Morgan. Now, I certainly am familiar with this matter
that he refers to as the Bremen matter.
Mr. Cohn. What is the next one?
Mr. Morgan. When I say I am familiar with it, I am not
familiar with it in contemplation of what he says.
Mr. Cohn. How about the top of the second page?
Mr. Morgan. That to me is Greek.
Mr. Cohn. Would you read it?
Mr. Morgan [reading]:
I have a lot of cases in California that I have to do a lot
of bird-dogging on, and I hate like sin to go down there and
bird-dog without clicking on a few. I wish that you would be
able to secure some talent, as I could use some hay. I am
letting things quiet down on the coast by lying dormant and
putting more effort in lining up the coming campaign. I assure
you that the request you made of me on the phone that Senator
Morse will go along 100 per cent because the longer you get to
know him, the more you will learn that he is a man of his word;
but he has had so much to do, and, as I understand, he has been
given assurance that you are No. 1 on the list. In all the time
I have known Senator Morse, I have never known him to deviate
or to say something that is not so. He either tells you in the
beginning nothing doing, or he will go along. I am willing to
gamble with you in any shape, form or manner that you will be
in as soon as the other chap resigns. I sincerely hope that the
cases that are back there clear up so that we can start on
something else. Again I repeat, ``I can use the hay.''
Mr. Cohn. Regarding that paragraph, which contains a
reference to a request you made to Mr. Duke over the telephone,
what is that about?
Mr. Morgan. I don't know.
Mr. Cohn. Did you ever ask Senator Morse through Mr. Duke
or anyone else to intercede in your behalf?
Mr. Morgan. Through Mr. Duke? I have never asked of Senator
Morse anything. If you want to know through my own personal
acquaintance with Senator Morse, that is another question. If
you would like me to answer that, I would be glad to.
Mr. Cohn. Have you ever been together with Mr. Duke and
Senator Morse?
Mr. Morgan. It is possible. I recall no particular
situation, but it is certainly possible, because I was up on
the Hill and it could have happened, certainly. But I don't
recall any specific incident.
Mr. Cohn. Was Senator Morse ever in your office?
Mr. Morgan. If he had been, I think I would remember it. I
just don't remember it.
Mr. Cohn. I assume that in view of this answer, your answer
would be that you don't recall any occasion when you, Senator
Morse and Mr. Duke, the three of you, were together in your
office?
Mr. Morgan. I have no recollection. It could have occurred,
certainly, because I have a great admiration for Senator Morse.
I have visited in his home. He certainly could have been in my
office. I just don't remember the situation to which you refer,
if it occurred.
Mr. Cohn. What do you think this business of ``100 per cent
behind you'' refers to?
Mr. Morgan. As I say, counsel, I have no recollection of
ever having seen this. If I had seen such a letter as this, I
would have come to one of two conclusions. Either the man who
wrote it was drunk and on goofballs, or he was demented. One or
the other. I have no recollection of having seen this. It is
just so much Greek to me.
Mr. Cohn. Did Senator Morse ever attempt to obtain any kind
of a position for you?
Mr. Morgan. Senator Morse has to my deep appreciation
endorsed me for positions, yes.
Mr. Cohn. Did you ever discuss his endorsement of you with
any position with Mr. Duke, or did Mr. Duke ever discuss it
with you?
Mr. Morgan. It is conceivable, yes.
Mr. Cohn. Do you have any recollection?
Mr. Morgan. I have no specific recollection.
Mr. Cohn. You can't tell us whether any such discussion
took place or didn't?
Mr. Morgan. No. If you have any specific occasion, maybe it
will refresh my recollection. I recall none. I took this man at
face value. I talked freely with him. I talked with him before
the atmosphere of suspicion of your neighbor occurred. I talked
to him openly. I wrote to him frequently. I looked at the
correspondence that is four or five years old, and I hope
everybody's correspondence of four or five years ago will stand
up as well.
Mr. Cohn. Do you know whether or not Mr. Duke knew Senator
Morse at that time?
Mr. Morgan. I think perhaps he did.
Mr. Cohn. You say you think perhaps he did. Do you know
whether or not he did? Can't we get a categorical answer?
Mr. Morgan. I am sure he knew Senator Morse.
Mr. Cohn. Then your answer is yes?
Mr. Morgan. Yes. But you ask me to make categorical
assertions about what somebody else knew. I say I take for
granted he knew him. I am sure.
Mr. Cohn. That was my original question.
Mr. Morgan. I don't think there was any question about
that.
Mr. Cohn. That is all we want to know.
Do you recall any occasion when you, Senator Morse and Duke
were together?
Mr. Morgan. I remember no specific occasion, but we might
have been. If you have in mind any situation you may ask me.
Mr. Cohn. I will ask you any questions that occur to me,
thank you. The word ``talent'' is used in this letter. Do you
know what Mr. Duke was referring to by that word?
Mr. Morgan. I certainly don't. I would say it is a
screwball expression. I can say this certainly, that I recall
one type of situation in which Mr. Duke was interested in my
offering him some help and assistance. During this particular
period I was in association with a very, very wealthy Texas oil
man, and we were drilling some wells in north Louisiana, and
Duke was always wanting to have some oil proposition that he
might present to some of his friends out there. Now, if he had
used such an expression to me, which I don't remember, that
would certainly be the only thing to which I might attach such
an expression.
Mr. Cohn. You mean this oil deal?
Mr. Morgan. No, he was wanting some oil situation that he
might present to clients of his, and friends.
Mr. Cohn. How do you tie the word ``talent'' up with an oil
deal?
Mr. Morgan. I say I can't explain it other than if such an
expression ever were used in contemplation of his wanting
something of me, that is the only time I ever remember that he
asked me for anything, that is, in connection with the idea of
some oil deal.
Mr. Cohn. He asked you for your assistance or work as
counsel in connection with various tax cases.
Mr. Morgan. I have explained that completely. I am trying
to talk to you now in terms of this expression here, which is
meaningless to me.
Mr. Cohn. Couldn't that refer to obtaining tax cases?
Mr. Morgan. I suppose it could refer to anything. I never
saw the letter to the best of my knowledge and belief.
Mr. Cohn. What is there that makes you think it might refer
to any oil deal?
Mr. Morgan. Nothing at all.
Mr. Cohn. That is just pure conjecture on your part?
Mr. Morgan. Sure.
Mr. Cohn. You brought up the oil deal. What was your
connection? Do I understand you had an interest in oil wells?
Mr. Morgan. Yes.
Mr. Cohn. That was not a lawyer-client matter.
Mr. Morgan. No, this was an investment matter.
Mr. Cohn. Could you tell us who the partners were?
Mr. Morgan. In the drilling venture?
Mr. Cohn. Yes.
Mr. Morgan. I would like to ask the chairman if that has
any pertinence in this proceeding, that is, who my partners
might have been in a business venture in the southwestern part
of the United States in contemplation of this proceeding. The
only reason I am reluctant to do it is that I am disinclined to
throw the name out of somebody who has nothing to do with this.
Senator Dirksen. Unless it were foundation for something
that counsel might want to ask later that is pertinent to the
objectives sought here, I doubt very much----
Mr. Morgan. I would be glad to tell you, if you would like
to know, who it is, and then you can put it on the record if
you wish. I am not trying to withhold anything, certainly.
Senator Dirksen. It may not be relevant to the inquiry at
this point.
Mr. Cohn. May I ask this, Mr. Chairman. Would you tell us
this: When did Mr. Duke first talk to you about participation
in this oil deal or in any oil venture?
Mr. Morgan. Every time he was in the office after I was in
any way engaged in the business, he would bring it up. We have
in our office a picture of a gusher coming in. It is well
known. My friends here in the bureau know about it. Everybody
knows I have been interested in oil. It is no secret.
Mr. Cohn. Did he ever talk with any of your partners in any
of these oil ventures or in this particular oil venture?
Mr. Morgan. I would say no.
Mr. Cohn. You are quite sure of that?
Mr. Morgan. I know of none.
Mr. Cohn. No communication, direct or indirect, with anyone
associated in any of these oil ventures?
Mr. Morgan. That is correct. I remember Mr. Duke had some
information, so he thought, about possible oil production in
the state of Oregon, and he indicated an area out there where
he felt that some kind of work had been done to indicate the
presence of oil. He communicated with me about it, either
personally or by letter, and I wrote him a letter back
concerning it. I think I have supplied you with a copy of the
letter--I don't know--with respect to that matter. But insofar
as communicating with any of my associates, I don't think any
of them know him. I am sure they don't.
Mr. Cohn. Did he know their names?
Mr. Morgan. Possibly, very possibly.
Mr. Cohn. You are familiar with those terms, about the
psychological effect, on the last page of that letter,
referring to the talent situation. Would you re-read that
sentence, please?
Mr. Morgan. On the last page?
Mr. Cohn. The last page, I believe.
Mr. Morgan. ``As you know,''
I am reading from page three of this letter:
the talent is plentiful and it is a psychological effect when
one comes in cold and tells a person what he knows about him.
So I hope sincerely that you will be able to secure some talent
for me.
Mr. Cohn. Does that still sound like reference to
participating in an oil deal?
Mr. Morgan. Now, counsel, let us be fair about this
proceeding. You asked me, as we went down this sentence here,
this paragraph, what this meant. I told you that it was
meaningless to me. In the context of your examination the idea
was indicated as to what Mr. Duke might have at any time
requested of me, and I tried to tell you honestly the only
thing I can ever remember is that he requested an oil deal.
Mr. Cohn. Your testimony was that it was conjecture that
the word ``talent'' might refer to this oil deal. My question
to you now is, having read this last paragraph, do you think
the word ``talent'' had reference to an oil deal?
Mr. Morgan. I don't think it does here. I don't assume it
does back here. It is just meaningless to me.
Mr. Cohn. Your testimony is that the last paragraph is
meaningless to you?
Mr. Morgan. Exactly.
Mr. Cohn. Do you ever recall having used the word
``talent'' in any conversations with Mr. Duke?
Mr. Morgan. It is an expression that I would not use. I
just would have no recollection of it. I might have used the
word ``talent'' certainly in a conversation, but in no
significance as we might think of it here.
Mr. Cohn. It was never given any secondary meaning by you
or by Mr. Duke?
Mr. Morgan. Correct, by me. I don't know what meanings Mr.
Duke might put on anything.
Mr. Cohn. Did you ever have any conversation with Mr. Duke
in the course of which there was any arrangement concerning use
of code words or secondary meanings or phrases to imply certain
things that you did not say directly?
Mr. Morgan. I never had any relationship involving the use
of code words with Mr. Duke.
Mr. Cohn. How about the rest of the question?
Mr. Morgan. Repeat it.
Mr. Cohn. Could we have the last question read, please?
[Question read by the reporter.]
Mr. Morgan. No, I would say there was no such arrangement.
Mr. Cohn. Let me ask you this, Mr. Morgan. Did you ever
have any interest in any way in any horses owned by Senator
Morse?
Mr. Morgan. No.
Mr. Cohn. You did not?
Mr. Morgan. No.
Mr. Cohn. Did you know that Senator Morse owned any horses?
Mr. Morgan. I knew that Senator Morse got kicked by a horse
and broke his jaw, and I knew he was in an accident on the West
Coast when he was riding in some rodeo or something. I never
had any interest in any of Senator Morse's horses.
Mr. Cohn. Now, Mr. Chairman, may I display to the witness a
letter which I will identify for the record as a letter dated
September 10, 1949, addressed to Mr. Ed Morgan, Welsh, Mott &
Morgan, beginning, ``Dear Ed,'' a two page letter with the
typed signature, ``R. W. Duke.''
Senator Dirksen. The letter, as identified, which was
submitted for the record as Exhibit No. 1 yesterday, will be
displayed to the witness.
Mr. Cohn. Would you read it and tell us whether or not you
can identify that as a letter you received?
Mr. Morgan. I have no recollection of the letter.
Mr. Cohn. You have no recollection of it?
Mr. Morgan. No.
Mr. Cohn. You can't tell us whether you received it or not?
Mr. Morgan. No, I cannot tell you whether I did or did not.
Mr. Cohn. If you had received that, would that have been in
your files?
Mr. Morgan. Normally it would appear in the files, yes.
Mr. Cohn. And a search of your file has not disclosed the
letter?
Mr. Morgan. Unless it was among the letters that I
presented to you; unless it is among the letters I presented
pursuant to the subpoena.
Mr. Cohn. It was in neither the prior letters nor these
that you presented?
Mr. Morgan. No.
Mr. Cohn. You have read that letter and are familiar with
the contents?
Mr. Morgan. Yes, I have no recollection of that letter. I
just don't recall it, that is all.
Mr. Cohn. May I read the letter for the record?
Senator Dirksen. The letter may be read.
Mr. Cohn [reading]:
Dear Ed: Since my conversation with you over the phone
regarding what Senator Morse, yourself, and myself discussed in
your office, I can only repeat as I stated in my previous
letter, Senator Morse, his integrity, honesty, and sincerity is
something to be highly admired and respected. At no time have I
ever known him to make an idle promise. I shall see that you
will be given assurance in person immediately after the 12th of
this month complying with the request you made of me.
Talent, Ed, is what I want. I am going to make my tour of
the South (incidentally, Nevada and Idaho are good territory)
and make one complete thrust to bring all the talent I possibly
can to Washington.
I understand there are 23 applications in Oregon for
television. Can you confirm that?
Well, Ed, oil lands in Oregon are going to surprise the
nation. In delving through old records in the capitol recently,
I ran across a survey and drilling tests that were made in a
certain county by the Texas Oil Company, and their findings are
so important that they will elicit from anyone who would go
over them a thrilling surprise. At the time of the Teapot Dome
scandal, Texas Oil Company, in conjunction with Sinclair
Company, was contemplating stealing the leases for this
particular area; sank seven wells, each of which were
producing; wells; and each well was capped off as soon as Fall,
Dohney and Daugherty were indicted, and it has been a dead duck
ever since. People filed homesteads on this particular land and
have since cut out the forests for lumber purposes and have
abandoned these lands. They are available from the county for
the price of delinquent taxes, which amount to about $200 per
160 acre sections. If you can get a company to drill on this
established oil land, would you be interested in my writing you
in as a full partner in owning these various sections. As I
stated above, your cost would be negligible. Let me know at the
earliest possible date, and I will exercise the auctions.
How are the horses running? I refer to Sir Laurel Guy, the
Oakland owned horse, and the Sacramento owned horse.
With best personal regards, I remain, Sincerely yours, R.
W. Duke.
Referring to this paragraph, ``How are the horses running?
I refer to Sir Laurel Guy, the Oakland owned horse, and the
Sacramento owned horse,'' what does that paragraph mean to you?
Mr. Morgan. As you read it to me now, I certainly do know
what that meant. It would mean the Guy Schafer case and the
Wilcoxon case. Wilcoxon was from Sacramento.
Mr. Cohn. Was the Schafer case in Oakland?
Mr. Morgan. Yes, he was from Oakland.
Mr. Cohn. So, in other words, your explanation of this
paragraph is that the reference is to these two cases.
Mr. Morgan. Right. That is certainly what I would interpret
that to mean, yes.
Mr. Cohn. Was it a usual practice not to refer to these
cases by their regular names, but to employ a device such as
this?
Mr. Morgan. Certainly in any correspondence I ever had I
would utilize the name of the individual.
Mr. Cohn. You have no recollection of another name or a
code name or any such?
Mr. Morgan. No. You asked me earlier if there were any code
relationships, and I said no.
Mr. Cohn. You feel if you would have received this letter
you would have known what it would refer to?
Mr. Morgan. I recognize it immediately, sure. Sure.
Mr. Cohn. This would indicate, too, would it not, that you
had received in inquiry, or that you had received this letter
from Mr. Duke concerning the Schaeffer case?
Mr. Morgan. Yes, certainly. I think I stated this morning
that he inquired of me several times about the status of the
matter.
Mr. Cohn. I don't think so. I think your testimony was you
had no recollection as to whether he had or not.
Mr. Morgan. I had no specific recollection. This well might
be one instance where he certainly did.
Mr. Cohn. Do you have any recollection of any inquiry
whatsoever by Mr. Duke to yourself concerning the Schafer case
after the original meeting between Mr. Duke, Mr. Bobbitt and
yourself?
Mr. Morgan. I have no specific recollection concerning the
matter.
Mr. Cohn. I don't mean that you recall a specific date. I
mean, do you recall any communication, oral or written, to you
by Mr. Duke making any inquiry about that case following the
first meeting?
Mr. Morgan. I don't recall it, no, but this letter which
you have in your hand, when you read that paragraph to me, had
I received it, that is the construction that I would have given
it.
Mr. Cohn. Now, going back to the very beginning of the
letter, ``Since my conversation with you over the phone
regarding what Senator Morse, yourself and myself discussed in
your office,'' does that refresh your recollection as to
whether or not there was a meeting between Senator Morse, Mr.
Duke and yourself in your office?
Mr. Morgan. I don't recall it. I don't recall the meeting.
It might well have occurred.
Mr. Cohn. You can't say whether or not a meeting occurred?
Mr. Morgan. I have no specific recollection. That does not
refresh my memory.
Mr. Cohn. I think you told us before if Senator Morse had
been in your office, you would probably remember.
Mr. Morgan. I think so, yes.
Mr. Cohn. And you have no recollection?
Mr. Morgan. No specific recollection. I would be willing to
concede that Senator Morse had been in my office forty times,
and I had talked with him and Mr. Duke in my office forty times
if it were regarded as pertinent to this committee. I just have
no recollection on the matter.
Mr. Cohn. Now, do you know what request that you had made
concerning which Senator Morse was asked to intercede is being
referred to in this letter from Mr. Duke to yourself?
Mr. Morgan. No. It does not strike a chord in my mind. What
is the date of the letter again?
Mr. Cohn. Dated September 10, 1949. Is there any position
you were seeking at that time?
Mr. Morgan. September 10, 1949?
Mr. Cohn. Yes, sir.
Mr. Morgan. I recall none at the moment. I might well have
been. The only thing I am trying to think of in my mind there
was one position in which I was very much interested, and I
can't think of it in terms of that particular date, and that is
the Federal Communications Commission. I was interested in the
commission.
Mr. Cohn. In an appointment to the Federal Communications
Commission?
Mr. Morgan. Yes.
Mr. Cohn. Did you ever discuss your proposed appointment
with Mr. Duke?
Mr. Morgan. I might very well have.
Mr. Cohn. Do you have any recollection of ever having
discussed it with him?
Mr. Morgan. No, I have no specific recollection.
Mr. Cohn. Did you ever discuss it with Senator Morse?
Mr. Morgan. I think he wrote a letter of endorsement for
me, as I remember.
Mr. Cohn. Did Mr. Duke have anything to do with that?
Mr. Morgan. I would say in all probability I had
communicated directly with Senator Morse on the matter.
Mr. Cohn. You have no recollection of having discussed it
together with Senator Morse and Mr. Duke, is that correct?
Mr. Morgan. It could have happened. I just have no
recollection on the matter.
Mr. Cohn. Now, this morning you were telling us a tax case
involving Dr. Lee, is that correct?
Mr. Morgan. Yes.
Mr. Cohn. I believe your testimony was that Mr. Duke was
sort of acting as Dr. Lee's agent, and that he brought Dr. Lee
into your office in Washington, is that right?
Mr. Morgan. That is correct.
Mr. Cohn. Did you know that they were coming down?
Mr. Morgan. Yes. He called and asked me if I would try to
help Dr. Lee in connection with his problem. I wrote back and
suggested that they send me additional information in order
that I might determine what might be done in the situation. I
don't think I was ever supplied that information. He and Dr.
Lee came on to Washington. There is no question that I know of
Dr. Lee's case, yes.
Mr. Cohn. Then your testimony was that you took Mr. Duke
and Dr. Lee over to the Bureau of Internal Revenue and first
went to the technical section.
Mr. Morgan. As I remember, we went to the technical staff.
Mr. Cohn. And then to the comptroller's office?
Mr. Morgan. No, the collector's office.
Mr. Cohn. And your testimony was that was your last
communication with the Washington office of the Bureau of
Internal Revenue?
Mr. Morgan. With the Washington office?
Mr. Cohn. Yes, with reference to Dr. Lee's case.
Mr. Morgan. Certainly not the last communication--official
communication--concerning the case.
Mr. Cohn. With the Washington office?
Mr. Morgan. Oh, no. I would want to check my file to find
out what correspondence I had officially relating to the case.
There well might have been correspondence. I think particularly
one instance in which I think the man I talked to over at the
Bureau of Internal Revenue was Mr. Krag Reddish, in connection
with the matter. As to correspondence with the bureau, no, I
never made any statement that I had not corresponded with them
on the case, certainly not, because I did correspond with the
bureau. I proceeded to file a formal tax court petition in the
case. I tried to get an early conference arrangement. The man
had a jeopardy assessment that he wanted to get lifted if he
possibly could.
Mr. Cohn. That is the case in which you said you had this
original conference in Washington, you were advised to file the
petition, and the petition was filed out west, and the case was
compromised out there is that correct?
Mr. Morgan. No. The case was forwarded here to me for
approval of the compromise.
Mr. Cohn. But it was compromised out west, and the
compromise was then forwarded to you, is that right?
Mr. Morgan. I would want to check my file to be absolutely
correct on it. I assume it would have been as a matter of
procedure. I don't think those compromises have to be passed on
back here in Washington. But I can't be sure of that and my
file would show the facts.
Mr. Cohn. Did you make any visit to the Bureau of Internal
Revenue in connection with the Dr. Lee tax case other than your
original visit with Mr. Duke and Dr. Lee?
Mr. Morgan. I don't recall one, but it would have been
proper to do so.
Mr. Cohn. When did you see Mr. Reddish first?
Mr. Morgan. The first time Dr. Lee was here. We talked to
the bureau.
Mr. Cohn. Didn't you say this morning you couldn't recall
with whom you conferred?
Mr. Morgan. You mean by name?
Mr. Cohn. Yes.
Mr. Morgan. I don't recall I said I could not recall with
whom I conferred. If I did say it, I do recall.
Mr. Cohn. I was quite sure that the record will show that I
asked you specifically with whom you conferred in each
division, first in technical and then the collector's office,
and your answer was you could not recall. As a matter of fact,
I think you were asked by one of the members of the committee
who the collector was then, and you didn't recall.
Mr. Morgan. On the collector, I certainly don't recall.
Mr. Cohn. Let me finish the question, please.
And then you commented in any event, you didn't talk to the
collector, it was probably one of the deputies you talked with,
and you could not recall the name. I am quite sure the record
will indicate that you specifically stated you did not recall
the names of the persons with whom you conferred in the
technical section or the collector's office.
Mr. Morgan. If that is the testimony, it is certainly
subject to correction.
Mr. Cohn. Do you wish to correct that testimony?
Mr. Morgan. I certainly do. In the case of Mr. Reddish, if
that is pertinent or material, as to who it might have been, I
might check my file and recall who the other individual was. As
I indicated to you, as I remember in this situation, we walked
over there cold on the situation to talk to them. There were
two logical places to discuss the case. One was the technical
staff for an early conference, and the other was the
collector's office.
Mr. Cohn. Do you recall with whom you conferred at the
technical staff? Do you recall that this afternoon?
Mr. Morgan. Yes.
Mr. Cohn. With whom?
Mr. Morgan. Mr. Reddish.
Mr. Cohn. He was in the technical staff?
Mr. Morgan. That is right.
Mr. Cohn. Had you known him before the conference on that
date?
Mr. Morgan. I might have.
Mr. Cohn. You don't recall whether you did or did not?
Mr. Morgan. I might tell you why I might have known him,
because we were both members of the Missouri Society.
Mr. Cohn. You have no specific recollection?
Mr. Morgan. No.
Mr. Cohn. Have you ever seen him since that date?
Mr. Morgan. Personally I believe not. I don't think I have
ever seen him since that time.
Mr. Cohn. With whom did you confer in the collector's
office?
Mr. Morgan. Now I don't know.
Mr. Cohn. You are quite sure you don't recall?
Mr. Morgan. That is what I think your question related to
this morning. If it related to both of them, then I would have
to certainly amend my testimony to say Krag Reddish, because
that name I do know.
Mr. Cohn. Your testimony now is that except for this one
personal conference to which you were accompanied by Mr. Duke
and the taxpayer, you never again went to the Bureau of
Internal Revenue in Washington in connection with the Dr. Lee
case?
Mr. Morgan. I have no recollection of it, but had I done
so, it would be perfectly normal and natural to do so. But I
have no recollection of ever having done so.
Mr. Cohn. The petition was filed out west. Was any further
action by the Bureau of Internal Revenue in Washington
necessary?
Mr. Morgan. In connection with the case?
Mr. Cohn. Yes.
Mr. Morgan. As I say, I don't know whether a settlement of
that kind would have to be passed on by the bureau back in
Washington.
Mr. Cohn. Do you know whether it was passed on by the
bureau in Washington in that particular case?
Mr. Morgan. Not without referring to my file.
Mr. Cohn. This is the case where the government claimed the
jeopardy assessment was for $100,000, and the settlement was
$6,000?
Mr. Morgan. It was over $100,000.
Mr. Cohn. Can you give us the figure?
Mr. Morgan. I don't remember the exact amount. There were a
lot of penalties, including fraud penalty of 50 percent.
Mr. Cohn. Would you say $140,000 might be accurate?
Mr. Morgan. It could have been.
Mr. Cohn. Now, following your meeting with the Bureau of
Internal Revenue in Washington before the case was finally
compromised, do you know whether or not Senator Morse contacted
the Bureau of Internal Revenue with reference to this case?
Mr. Morgan. He may have. I have no recollection of his
having done so. He may very well have done so.
Mr. Cohn. You have no recollection?
Mr. Morgan. No.
Mr. Cohn. Did you ever discuss with Mr. Duke or he with you
the fact that Senator Morse was being asked to communicate with
the Bureau of Internal Revenue?
Mr. Morgan. I have no recollection on the point. Perhaps
so. I do remember in the Lee case that after the case had been
compromised, he was extremely anxious to get the assessment
lifted. As you know, the settlement would be in the technical
staff, and the lifting of the assessment would be, I believe,
with the collector. After it was compromised, there was still
the problem of getting the jeopardy assessment lifted. I think
he was interested in that. I had no part in that, as I
remember.
Mr. Cohn. Mr. Chairman, may I at this point identify and
place in the record a telegram that has been produced here
pursuant to subpoena. It is a telegram dated September 8, 1950.
It is addressed to Russell Duke, 4523 Northeast Alameda. It is
signed Wayne Morse, USS. If I may, I would read the first
sentence.
Senator Dirksen. Has this been submitted for the record
before?
Mr. Cohn. This has not.
Senator Dirksen. The telegram will be identified for the
record, and in its entirety will be inserted in the record, and
counsel is privileged to read from it.
[The telegram referred to was marked as committee's Exhibit
No. 4, Edward P. Morgan, January 16, 1953, and is as follows:]
PRA232 Govt PD-SN Washington DC 8 425P 1950 September 8
Russell Duke, 4523 Northeast Alameda PTLD
Have been in touch with Internal Revenue with reference to Dr. Lee's
tax case and just today the case was sent in from the local office. I
hope to have a definite report for you on Monday concerning it. S 3357
passed the House August 28 and is now on the Senate table awaiting
action on House amendments. S 3358 is on the Senate calendar.
Regards, Wayne Morse, USS
Senator Dirksen. Has the witness seen this telegram?
Mr. Cohn. No, I don't think so.
Senator Dirksen. I think he should, first of all, for
refreshment.
Mr. Morgan. I have seen it.
Mr. Cohn. I might ask you first of all, does that telegram
refresh your recollection as to whether or not Senator Morse
did communicate with the Bureau of Internal Revenue in
connection with the Lee tax case?
Mr. Morgan. That telegram would not refresh my
recollection, certainly. Senator Morse may well have
communicated with the Bureau of Internal Revenue concerning the
lifting of the jeopardy assessment. If he did so, I certainly
did not ask him to do so.
Mr. Cohn. Mr. Chairman, the sentence I wish to read into
the record----
Senator Dirksen. I think it is well to read the entire
exhibit, including all the code items.
Mr. Cohn [reading]:
PRA232 Govt Pd--SN Washington, D.C. 8 425P Russell Duke, 4523
Northeast Alameda PTLD. Have been in touch with Internal
Revenue with reference to Dr. Lee's tax case and just today the
case was sent in from the local office. I hope to have a
definite report for you on Monday concerning it. S 3357 passed
the House August 28 and is now on the Senate table awaiting
action on House amendments. S 3358 is on the Senate Calendar.
Regards. Wayne Morse USS.
And your testimony is, Mr. Morgan, that on hearing that, it
does not in any way refresh your recollection as to whether or
not Senator Morse was in touch with the BIR?
Mr. Morgan. That telegram does not refresh my memory, no.
He may well have been. I just have no recollection on it. I do
recall the general situation, that Dr. Lee was anxious to have
the assessment lifted after this compromise.
Mr. Cohn. Mr. Chairman, may I identify for the record a
document produced here pursuant to subpoena, dated August 29,
1950, on the stationery of R. W. Duke, Portland 13, Oregon,
addressed to ``Dear Ed,'' and may I display it to the witness?
Senator Dirksen. It will be identified for the record at
this point.
[The letter referred to was marked as committee's Exhibit
No. 5, Edward P. Morgan, January 16, 1953, and is as follows]:
August 29, 1950.
Dear Ed: As per our telephone conversation I am sending you this
letter explaining the entire arrangement made between Dr. Lee, and
myself.
I did give Dr. Lee, a letter agreeing that he was to pay you a
certain sum and that I would then pay you the difference out of my own
pocket, however after writing the agreement I pointed out to Dr. Lee,
that it was unfair as I did not profit from the deal under the
arrangements because my cost on his case amounted to better than the
amount he was paying me. The final agreement was that Dr. Lee, would
pay you the full four thousand dollars. I feel confident that Dr. Lee,
does and will keep his word. The only reason that you are not paid is
one, he has desperately tried to raise the money from various sources,
and due to the jeopardy assessment against him it is difficult for
people to conceive that he could pay them back. As you know Senator
Morse's office has taken the matter up and I in turn called Mr. Earle,
collector of Portland, and told him exactly what has taken place up
until now and he in turn promised that he would see about the release
and let me know Monday. I do know that Dr. Lee, will upon being
released will immediately send you the money. Ed, I do have faith in
the Dr. for various reasons which I will explain to you via phone. I
still have a report that the doctor wants me to furnish him and until I
render the report the case is not completed. So please bear with him
and I will try to force the release thru the local collector.
As soon as the boy is better I will be in Washington, D.C. as there
is a lot of which I have to do as soon as I get there. I am getting
inquiries regarding representation for various type of representation
for firms here in the Northwest.
With best personal regards, I remain,
Sincerely.
Mr. Morgan. Yes, I recognize this letter.
Mr. Cohn. You do recognize it?
Mr. Morgan. This is one of the letters, I believe, that I
produced pursuant to your subpoena. Is that correct?
Mr. Cohn. We will check that.
Mr. Morgan. I would like the record to indicate that
certainly.
Mr. Cohn. I said we will check that.
Mr. Morgan. Fine.
Mr. Cohn. You recognize that letter as a letter you
received from Mr. Duke, is that right?
Mr. Morgan. I remember the letter, yes.
Mr. Cohn. May I read the letter into the record?
Senator Dirksen. Yes, in its entirety.
Mr. Cohn. May the record indicate that this letter was
produced by Mr. Morgan?
Mr. Morgan. I don't wish to be over-technical, but I wish
you would indicate it is a carbon copy of the letter.
Senator Dirksen. To make sure that the record is correct,
this letter was procured under subpoena, and is identified as
carbon copy, unsigned, but on stationery allegedly of R. W.
Duke, Portland 13, Oregon, and the letterhead, instead of
appearing at the top of the letter, appears on the left-hand
side.
Mr. Cohn. May I read the letter?
Senator Dirksen. The letter may be read.
Mr. Cohn [reading]:
August 29th, 1950. Dear Ed: As per our telephone
conversation I am sending you this letter explaining the entire
arrangement made between Dr. Lee, and myself:
I did give Dr. Lee a letter agreeing that he was to pay you
a certain sum and that I would then pay you the difference out
of my own pocket, however after writing the agreement I pointed
out to Dr. Lee that it was unfair as I did not profit from the
deal under the arrangements because my cost on his case
amounted to better than the amount he was paying me. The final
agreement was that Dr. Lee would pay you the full four thousand
dollars. I feel confident that Dr. Lee does and will keep his
word. The only reason that you are not paid is one, he has
desperately tried to raise the money from various sources, and
due to the jeopardy assessment against him it is difficult for
people to conceive that he could pay them back. As you know
Senator Morse's office has taken the matter up and I in turn
called Mr. Earle, collector of Portland, and told him exactly
what has taken place up until now and he in turn promised that
he would see about the release and let me know Monday. I do
know that Dr. Lee will upon being released will immediately
send you the money. Ed, I do have faith in the doctor for
various reasons which I will explain to you via phone. I still
have a report that the doctor wants me to furnish him and until
I render the report the case is not completed. So please bear
with him and I will try to force the release through the local
collector.
As soon as the boy is better I will be in Washington, D.C.,
as there is a lot of work which I have to do as soon as I get
there. I am getting inquiries regarding representation for
various types of representation for firms here in the
Northwest.
With best personal regards, I remain, Sincerely.
This copy is unsigned.
Now, does this letter refresh your recollection as to
whether or not Senator Morse was in touch with the BIR?
Mr. Morgan. It does not refresh my recollection. I had no
knowledge--personal knowledge--that Senator Morse had been in
touch with the BIR. The letter here that Duke has, a copy of
which I produced for this committee, indicates that that is the
case.
Mr. Cohn. And that you were so advised?
Mr. Morgan. Beg pardon?
Mr. Cohn. And that you were so advised.
Mr. Morgan. It says, ``As you know,'' meaning as I would
know.
Mr. Cohn. Meaning as you, Mr. Morgan, would know, that
Senator Morse has been in touch, and so on.
Mr. Morgan. I have no recollection of Senator Morse having
done so. He may have done so. I assume it would be perfectly
proper for him to do so, but I have no independent recollection
on the matter.
Mr. Cohn. Did you know that Mr. Duke was to be compensated
in connection with the Lee tax case?
Mr. Morgan. The sequence of events on that, if I may be
permitted to explain it, were these. Dr. Lee and Mr. Duke came
to my office. I had no real thought, necessarily, at that
juncture of formally representing Mr. Lee. I was merely trying
to help in connection with these two little visits over at the
BIR and no suggestion was made of a possible fee at that point.
When we got back to my office, and Dr. Lee realized that there
was no possibility of getting a jeopardy assessment lifted, and
it was explained to him what was involved insofar as legal
steps were concerned, he asked me if I would undertake to
represent him in connection with the case, and I told him that
I would. The fee decided upon was $4,000 in a contingent fee
arrangement. The contingency, as earlier indicated, was lifting
the assessment so he could pay the fee. After the case was
finally disposed of, I communicated with Dr. Lee, as I
remember, for my fee, and at that particular point to the
matter Dr. Lee pointed out that I would have to look to Mr.
Duke for my money. At that point I think I probably called Duke
and I think I was probably incensed at the time. I think this
letter that you have read is his reply to that.
Now, Dr. Lee wrote me a letter, which I have, after he
appeared before the King committee in San Francisco. I
appreciated it. The letter said, ``Since you were my attorney
in this case, I felt I should tell you my testimony before the
King committee.'' In his letter he indicates his recollection
that I knew at the time of the original visit about his
arrangement with Russell Duke. The doctor is honestly mistaken
concerning the matter. But, gentlemen, for your purposes, if a
man came to my office, being legitimate, as I thought he was,
and being the agent of Dr. Lee, as I thought he was, I would be
willing to concede the point. But I think the correspondence
will indicate my knowledge on the matter was after the original
meeting. I just feel that it would be ridiculous for me to
undertake to go to the West Coast and handle a case for $4,000
on a contingent basis had I known that this fellow had received
eight or nine thousand dollars in the matter. It just does not
make any sense to me. I think that the whole sequence of events
bear that out. But I would concede the point. So what? I
thought he was a bona fide agent of the doctor. It was one of
the first matters he ever came to the office with.
Mr. Cohn. Now, I think you told us you had no financial
transactions with Mr. Duke, except for the $500 loan you made
to him, is that right?
Mr. Morgan. The $500 loan was made out of our firm account,
yes, with the approval of my partners.
Mr. Cohn. That appears on the books of your firm?
Mr. Morgan. I think I gave you the original entry at the
time I produced the papers pursuant to your subpoena.
Mr. Cohn. And with that exception you have had no financial
transactions with Mr. Duke, is that right?
Mr. Morgan. To the best of my knowledge and belief, I have
not.
Mr. Cohn. Did you ever split any fee with Mr. Duke?
Mr. Morgan. That I can state categorically no.
Mr. Cohn. Did you ever have any discussion with Mr. Duke
concerning the possibility of splitting a fee with him?
Mr. Morgan. No. On that score I desire to be very positive
because I naturally assumed that you are building up to
something of this kind in your interrogation. In the entire
relationship that I might have had with Russell Duke certain
things were definitely and clearly understood. Number one, that
my relationship was always directly with the client or with the
client's lawyer. Additionally, that as a lawyer the ethics of
my profession precluded the splitting of fees, and I am now
stating to you categorically that I never split any fee at any
time with Russell W. Duke.
Mr. Cohn. And that you never had any discussion about the
possibility of splitting one?
Mr. Morgan. Russell Duke at one time may or may not have
indicated an interest in having something from some of these
cases, but I am telling you that in any relationship that point
was, certainly made very clear. I have never--I don't need to
make a self-serving statement like that--in my profession split
a fee. Certainly not.
Mr. Cohn. You say he might have suggested it one time. Do
you specifically recall it?
Mr. Morgan. No, I don't. I do recall having made certain
things clear to him, and I assume that the only reason I would
have done that is by reason of his inferring or implying that,
I don't know.
Mr. Cohn. Did you have any connection with Mr. Duke
concerning any claims case?
Mr. Morgan. It is possible. There are in my mind one, two
or three situations. This fellow was calling me all the time.
Check your telephone logs, gentlemen. He would call me morning,
noon and night. I was not so sophisticated in the practice or
so busy that I did not listen to him. I did. He was one of
those individuals who had a thousand things on the fire. If
there are any particular ones you want to ask me about, I will
try to remember.
Mr. Cohn. You are saying you don't offhand recall any?
Mr. Morgan. Offhand, I don't.
Mr. Cohn. How about the claims cases involving Herman
Lawson and Company and James A. Nelson?
Mr. Morgan. The Herman Lawson situation, if I remember it
correctly, that is something that Duke discussed with me about
a bill, I think. This is subject to correction. I think the
relief bill in the case had been introduced in the House and
Senate before I met the fellow. That is subject to correction.
I just don't remember. I do know that he had said that he
represented these people. I think they were California people,
as I remember, who built a post office or something down there,
and by reason of some difficulties in connection with the
contract, they were entitled to some type of relief in the
opinion of those that were making the claim. They apparently
had engaged Mr. Duke to prosecute their claim on their behalf
and to represent them in that connection, and I think a bill
had been introduced for such relief. I recall his discussing
that with me, yes.
Mr. Cohn. By whom had it been introduced?
Mr. Morgan. As I remember, I think Senator Morse introduced
the bill. I think that antedated or predated my acquaintance
with Duke. I can't be sure. I know I had nothing to do with any
conversations prior to the introduction of the bill.
Mr. Cohn. Now, how about the James A. Nelson claim case?
Mr. Morgan. That does not strike a bell in my mind. It may
be a part and parcel of the Lawson case, I don't know. It just
doesn't strike any bell at all.
Mr. Morgan. With reference to the Lawson case, was there
ever any discussion between Mr. Duke and yourself concerning a
fee to compensate for both of them?
Mr. Morgan. No, I know exactly the story on that particular
case, because I had really little or nothing to do with it
until late in September of 1950, as I remember, and that is
subject to correction. Duke called one time from the West Coast
and said he was flat broke and could not come back here to
confer on it. He said he had been talking, I think, to Senator
Morse's administrative assistant about the matter, and he was
hoping at that time to get the matter revived, because he felt
that there was merit in the case. I think he wrote a letter,
possibly in connection with it. I can't be specific about that.
He asked me to run a check on it. I made one check in
connection with the case, and I think I wrote him a letter, and
that is as far as I remember any specifics on the matter.
Mr. Cohn. Did you produce that letter here for us that you
wrote?
Mr. Morgan. I don't know. I don't have the copies of the
correspondence that I made available to you.
Mr. Cohn. Mr. Chairman, may I identify for the record a
letter dated September 8, 1950, on the same stationery of R. W.
Duke, Portland 13, Oregon, with the name and address printed in
the margin, addressed to Mr. Edward P. Morgan, Welch, Mott &
Morgan, Erickson Building, Washington, D.C., and signed with
the signature that purports to be Russell W. Duke.
Having identified that, may I display it to the witness?
Senator Dirksen. It may be so done. May I say that this
letter at this point will appear in its entirety in the record.
[The letter referred to was marked as committee's Exhibit
No. 6, Edward P. Morgan, January 16, 1953, and is as follows:]
September 8, 1950.
Mr. Edward P. Morgan,
Welch, Mott & Morgan, Erickson Building,
710 Fourteenth Northwest, Washington, DC.
Dear Ed: Attached is a letter which I received from Herman Lawson
and Company. It is self-explanatory. Unquestionably, other claimants
have sent me letters addressed to the Continental hotel giving me like
authorization.
As you know I have worked on this case for over 3 years and up to
date I have received approximately $4,000 from Herman Lawson & Company
and $500 or $1000 from James A. Nelson. The total of the claim due me
would be $18,000. The majority of moneys which I have received, in fact
all the moneys which I have received, has been used in travel and
expense pushing this bill through.
If you care to file this case under the Tucker Act, attached you
will find that portion of the Tucker Act under which this case can be
won.
I am due to arrive in Washington some time next week at which time
I sincerely hope you will be in Washington so that we can get together
on this and other matters. Regarding the balance of the fee due on this
particular claims case, I am sure that whatever you decide on the fee
will be satisfactory to me. I have been given assurance that under this
Tucker Act we can definitely win the case.
Did Doctor Lee send you the total of $4,000? If not, please let me
know immediately as I will see that you get every dime of it. As I had
stated in my previous letter to you this case is not finished until Dr.
Lee gets a report.
With best respects, I remain,
Sincerely,
R.W. Duke.
P.S., Have you heard from the Johnson Committee? If you haven't, I
am sure you will.
Mr. Morgan. May I make an inquiry as to whether this is one
of the letters I produced pursuant to your subpoena?
Mr. Cohn. Yes.
Senator Dirksen. Let the record show that this letter was
produced under subpoena.
Mr. Cohn. I might state for the record, Mr. Chairman, if I
may, that this is a photostat of the original.
Mr. Morgan. Yes, sir, I have read it.
Mr. Cohn. Would you read that letter for the record?
Mr. Morgan. Yes. It is dated September 8, 1950, addressed
to Mr. Edward P. Morgan, Welch, Mott & Morgan, Erickson
Building, 710 Fourteenth N.W., Washington, D.C. [reading]:
Dear Ed: Attached is a letter which I received from Herman
Lawson and Company. It is self-explanatory.
Unquestionably other claimants have sent me letters
addressed to the Continental hotel giving me like
authorization.
As you know I have worked on this case for over 3 years and
up to date I have received approximately $4,000 from Herman
Lawson & Company and $500 or $1000 from James A. Nelson. The
total of the claim due me would be $18,000. The majority of
moneys which I have received, in fact all the moneys which I
have received, has been used in travel and expense pushing this
bill through.
If you care to file this case under the Tucker Act,
attached you will find that portion of the Tucker Act under
which this case can be won.
I am due to arrive in Washington some time next week at
which time I sincerely hope you will be in Washington so that
we can get together on this and other matters. Regarding the
balance of the fee due on this particular claims case, I am
sure that whatever you decide on the fee will be satisfactory
to me. I have been given assurance that under this Tucker Act
we can definitely win the case.
Did Doctor Lee send you the total of $4,000? If not, please
let me know immediately as I will see that you get every dime
of it. As I had stated in my previous letter to you this case
is not finished until Dr. Lee gets a report.
With best respects, I remain, Sincerely, R.W. Duke.
It has a P.S., ``Have you heard from the Johnson Committee?
If you haven't, I am sure you will.''
Mr. Cohn. With reference to the sentence, ``Regarding the
balance of the fee due on this particular claims case, I am
sure that whatever you decide on the fee will be satisfactory
to me,'' what was Mr. Duke's interest in the fee?
Mr. Morgan. In this particular case?
Mr. Cohn. Yes.
Mr. Morgan. This is just about the substance of the case
insofar as I know, and the correspondence which was attached to
it, which I would assume was returned to him.
Mr. Cohn. Pardon me?
Mr. Morgan. I would assume any correspondence attached here
was returned to him.
Mr. Cohn. What interest did Mr. Duke have in a possible fee
in this case? It says, ``I am sure whatever you decide on the
fee will be satisfactory to me.''
Mr. Morgan. He is presenting a situation here in which he
had an arrangement with the Herman Lawson Company going back
three years, and he is presenting it to me at this late date
for consideration. In other words, he is saying to me at that
point whatever fee you care to set for your services would be
satisfactory.
Mr. Cohn. To Duke?
Mr. Morgan. Yes.
Mr. Cohn. What concern was it of Duke's?
Mr. Morgan. Insofar as his representation of these people
might be concerned, if he was formally the agent of these
people, and formally represented them and there were a fee
forthcoming--the point is I never claimed any fee in this
latter.
Mr. Cohn. Doesn't this envision the possibility that there
will be a fee which must be satisfactory to both you and Mr.
Duke, and I would assume from that a fee in which both you and
Mr. Duke would participate?
Mr. Morgan. I am sure if I undertook to represent the
Herman Lawson Company in any extended matter apart from a
simple inquiry which I make every day for friends all over the
country, with no thought of remuneration, if I do so, I would
want a fee arrangement. I am in the law practice and I am not
in it for my health. This is Duke's letter. This is not my
letter concerning the matter. You are asking me what I might
construe from what Mr. Duke might say. I am telling you that
upon the formal undertaking of representation of Herman Lawson
Company in a matter of this kind, I would want a fee
arrangement with the Herman Lawson Company certainly.
Mr. Cohn. Doesn't this one sentence, ``I am sure whatever
you decide on the fee will be satisfactory to me'' refresh your
recollection to the point that there was at least one instance
in which Mr. Duke was interested in splitting a fee?
Mr. Morgan. Mr. Duke may have been interested, counsel, in
splitting the fee.
Mr. Cohn. That is my question.
Mr. Morgan. It doesn't mean that to me necessarily.
Mr. Cohn. It does not mean that?
Mr. Morgan. That is right. If I were to take some of the
things that Mr. Duke might have in his letters and presume to
have to pass judgment on everything he might say about what he
intended in contemplation of what I might consider in the
matter, that would be rather ridiculous and I couldn't do it.
What this letter means to me is simply this, that he has a case
that he got back in 1948 before I ever knew the gentleman, and
he is at this late date trying to see if something can be done
about it, and he is asking my opinion about it, and he is
saying in effect whatever fee in the situation would appeal to
you would be satisfactory to me. But that has nothing to do
with me, gentlemen.
Senator McClellan. Mr. Chairman, may I ask one question
that I am not quite clear about? Is that the case in which he
had received approximately $4,000 up to date, which he claimed
had been consumed in expenditures?
Mr. Morgan. Yes.
Senator McClellan. And that he had anticipated an
arrangement for a fee of about $18,000?
Mr. Morgan. Yes, that is right.
Senator McClellan. Hearing it read, it carries with it the
implication possibly that you were to charge him a fee out of
his $18,000. Was there any consideration in that regard, that
you were to get your fee from him, since he was their agent,
and already had a contract with them?
Mr. Morgan. I would certainly agree with you.
Senator McClellan. I am just asking. I do not know.
Mr. Morgan. On that point. I mean from his letter you might
make such a connotation and such a construction. The
significant point is this, that I never represented the Herman
Lawson Company in contemplation of formal legal representation.
He had called me, as I remember, prior to this letter and said
that he was broke, couldn't get back here, and that he had
phoned, I think, Senator Morse's administrative assistant, as I
remember, because my memory was refreshed in connection with
that. I looked it over, I decided in my own mind it was a dead
duck and to make a long story short, I never represented the
Herman Lawson Company. So insofar as any fee arrangement might
be concerned insofar as I might be concerned, there was no fee
arrangement.
Senator McClellan. It seems here he had a contract with
them as their representative.
Mr. Morgan. Yes, sir.
Senator McClellan. Whereby he expected to earn a total of
$18,000.
Mr. Morgan. Yes.
Senator McClellan. If the agreement was carried out between
him and those clients that he was representing. Now, there
might be some other explanation of this, but on the face of it,
it indicates to me if you had had no contact with the clients
direct prior to that time, that he may have been paying to you
out of this $18,000, whatever fee you fix would be agreeable to
him. I do not know that that is true. I am asking you, since
you were one of the parties to it.
Mr. Morgan. I wish I could shed more light on it. But let
us put it this way. Duke had a contract with the Herman Lawson
Company before I ever knew him. In other words, I had not
participated in the negotiation of any such contract. Let us
assume that he is a legitimate agent of the Lawson Company, and
I suppose we must certainly concede that. If as an agent of the
Lawson Company he should pay me a fee in connection with legal
work that I might do, I would say that was certainly ethically
proper.
Senator McClellan. I would, too. The further point is he is
saying here, I have a contingent fee of $18,000. I assume that
is what he means, if the claim is prosecuted successfully.
Mr. Morgan. That is what he is saying.
Senator McClellan. And anything you want to charge me out
of that for your services would be agreeable to me. I do not
know that those are the facts, but it appears that way on the
surface to me.
Mr. Morgan. I would say that is a fair construction from
Mr. Duke's letter.
Senator McClellan. Let me ask one further thing there in
that connection to clarify it further. Did you ever represent
this client-what is his name--Herman Lawson? After receipt of
this letter, or had you prior to that been in direct touch with
the Lawson Company?
Mr. Morgan. To the best of my knowledge and belief I have
not.
Senator McClellan. Did you ever afterwards contact them or
did they contact you with reference to this matter directly?
Mr. Morgan. To the best of my knowledge and belief I did
not.
Senator McClellan. Then you never accepted employment
either from Duke or from Lawson?
Mr. Morgan. To the best of my knowledge and belief I did
not.
Senator McClellan. You did not accept employment?
Mr. Morgan. Correct. I did not accept employment certainly
to the best of my knowledge and belief. I made an inquiry
concerning the case as a favor to Duke, that was all.
Senator McClellan. Then you rejected the employment in the
case after that inquiry?
Mr. Morgan. I think I advised them that the case had no
merit as I remember. At any rate, I did not pursue it.
Senator McClellan. You did not pursue it.
Mr. Morgan. That is right.
Senator McClellan. You never earned anything out of it?
Mr. Morgan. Not a penny.
Senator McClellan. You never had any direct contact with
the client?
Mr. Morgan. That is correct.
Senator McClellan. In any way whatsoever?
Mr. Morgan. To the best of my knowledge and belief I am
quite sure I did not earn anything in connection with it.
Senator McClellan. Thank you very much, Mr. Chairman.
Mr. Cohn. Now, I would like to direct your attention to the
case involving Jack Glass.
Mr. Morgan. Yes.
Mr. Cohn. I believe you told us about that this morning.
Exactly how did that case come to your attention?
Mr. Morgan. That case to the best of my knowledge and
belief was referred to me directly by Maurice Hendon.
Mr. Cohn. He is the Los Angeles lawyer?
Mr. Morgan. That was my impression. It has been my
impression all along, and within the past two months, I was in
Los Angeles, California, talking to Mr. Hendon, and this
question came up and he said, ``By the way, did you have any
connection with this fellow Duke'' or did I, in connection with
this Glass case. ``Just how did you happen to get in touch with
me in connection with the case?'' He related the circumstances
and he told me about the King committee having been in touch
with him concerning the matter, and that he had referred the
case to me on the basis of some friend of mine who had
suggested that he get in touch with me. My memory is as vague
on it as can be, just as vague as can be. If Russell Duke
himself directly referred the case to me, I would admit it. I
have no reluctance about doing that. As I say, I thought this
man was legitimate. I was grateful to him. I handled everything
that he referred to me strictly on the merits. I think if you
will look at the files you will find that I worked my cases,
every one of them. So in answering your question here, as I
have, saying it is vague, I don't do so to circumvent any
admissions with respect to that. If Russell Duke had put Mr.
Glass in touch with me, I would have represented him if I
thought it was a legitimate situation.
Mr. Cohn. What happened in the Glass case? Did you actually
come into it?
Mr. Morgan. Yes. Mr. Hendon came back and he and I
conferred at the Department of Justice. I submitted a rather
extensive brief, which the file will reflect, as far as the
facts would permit in connection with the case.
Mr. Cohn. With whom did you confer at the Department of
Justice?
Mr. Morgan. I think it was Col. Swearingen, as I stated
this morning.
Mr. Cohn. Then Mr. Glass is the gentleman who later passed
on, due to a heart condition, is that correct?
Mr. Morgan. Yes, he died not long after the case was
finally disposed of. I might say that in this case the
Department of Justice did not decline prosecution. The
Department of Justice referred the case to the United States
attorney and asked on the basis of the man's physical and
mental condition whether the United States attorney wanted to
prosecute. Mr. Hendon handled that end of it. I had nothing to
do with that.
Mr. Cohn. What was the fee you received in that case?
Mr. Morgan. I would have to refresh my memory on it. I
think it was $4,000, a third of which I sent Mr. Hendon as a
reference fee. Yes, that is correct. I sent Mr. Hendon a little
more than a third. It was $1500 I sent him as a reference fee.
Mr. Cohn. In the course of your negotiations with the
Department of Justice in connection with this case, did you
receive any inside non-public information?
Mr. Morgan. Not to the best of my knowledge and belief.
Mr. Cohn. Did you ever receive any such information from
the Department of Justice in connection with any tax case?
Mr. Morgan. Not to the best of my knowledge and belief.
When you say inside information, I certainly don't know
what you mean. If I confer with an attorney down there, and he
advises me about some incident of the case, I don't know
whether you would construe that as inside information or not. I
don't know what you mean.
Mr. Cohn. I am referring to a communication to you of
anything that is a matter of confidential information within
the Department of Justice.
Mr. Morgan. I wouldn't know what was confidential
information within the Department of Justice in contemplation
of the rules of the tax division. You would have to define it
for me. I don't know.
Mr. Cohn. Let us put it this way. Did you ever receive any
information which you at the time regarded as confidential
information not generally known or what we might call inside
information?
Mr. Morgan. No. To the best of my knowledge and belief I
didn't. I conferred with attorneys in the Justice Department on
these cases and naturally you go over the case and the
ramifications of it, and the possible disposition of the case,
and if they didn't say something you certainly would not have
much of a conference. So certainly that information would be
known to me, anything they might advise me.
Senator McClellan. May I ask a question, Mr. Chairman?
Senator Dirksen. Yes, indeed.
Senator McClellan. My own interpretation of inside
information would be, did you receive any information from the
department that was not legitimate information for a
representative of a client to have upon inquiry?
Mr. Morgan. Not to my knowledge, sir.
Senator McClellan. In other words, it might be inside
information that the public generally is not entitled to have,
but information that a lawyer duly representing a client might
be entitled to receive upon inquiry. There are limits within
which that information should be made available, of course. But
the real test is, were you being given information beyond that
to which any proper representative of a client was entitled to
have from the department?
Mr. Morgan. I would say that I was given no information
that I as an attorney for the client being represented was
entitled to receive in connection with the matter.
Senator Jackson. Or any information that might be helpful
to the client and adverse to the government.
Mr. Morgan. Again on that I wouldn't know what you might
mean.
Senator Jackson. I mean, suppose you found out that a
certain thing was going to come up in connection with the case
that would be ethically certainly improper, it would be help to
you in preparation, but would be part of the government's case,
which the government could use against your client in obtaining
a judgment in a civil action or a conviction in a criminal
action.
Mr. Morgan. What is your question?
Senator Jackson. That is what I said. I made the statement
of what I meant.
Mr. Morgan. I appreciate the statement that you have made.
Is there a question in connection with it?
Senator Jackson. I said did you receive any such
information?
Mr. Morgan. To the best of my knowledge and belief I
received no information of the character to which you refer. I
mean short of specific instances. As a general proposition in
answering your question, the answer is no. I would know of no
such information.
Mr. Cohn. Do you recall what happened at your first
conference with Col. Swearingen at the Department of Justice in
connection with this case?
Mr. Morgan. That was a preliminary conference which I
usually try to arrange in these cases. As a result of the
conference you determine generally the theory of the
government's case. At least you can ascertain that. If it is a
net worth case, that is significant, certainly, to the
attorney.
Mr. Cohn. I was referring to this particular case.
Mr. Morgan. Not without refreshing my recollection from the
file in the matter. Offhand I don't know. I do think that we
had a preliminary conference. I think I asked him if we would
be given time to prepare a brief in connection with the case,
and so on and so forth.
Mr. Cohn. Did you obtain such time?
Mr. Morgan. I don't think any inordinate extension. I just
determined that the case would not be acted on before we had a
chance to do it.
Mr. Cohn. And your best recollection at this time is that
you were contacted directly by Mr. Hendon and it was not until
the last two months that you discovered that Mr. Duke had any
connection with this case, is that right?
Mr. Morgan. That is my recollection, with the qualification
that it is with the vagueness of a four-year memory.
Mr. Cohn. Mr. Chairman, may I identify for the record and
then display to the witness a carbon copy of a letter on the
stationery of Welch, Mott & Morgan? The letter is dated July
11, 1949. It is addressed to Maurice Hendon, Esq., Room 507,
111 West Seventh Street, Los Angeles, California. There is a
typed signature, ``Edward P. Morgan.''
Senator Dirksen. It is identified for the record and may
appear in the record. It is a copy, I take it?
Mr. Cohn. A carbon copy.
Senator Dirksen. The record should so show. Was this
obtained under subpoena?
Mr. Cohn. This was obtained under subpoena not from this
witness.
Senator Dirksen. Very well. Let the record show that also,
and it can be displayed to the witness.
[The letter referred to was marked as committee's Exhibit
No. 7, Edward P. Morgan, January 16, 1953, and is as follows]:
July 11, 1949.
Maurice Hendon, Esq.,
Room 507, 111 West Seventh Street,
Los Angeles, California.
Dear Mr. Hendon: Immediately after receiving the call today from
Mr. Duke, the Department of Justice was contacted, it being learned
that the case involving Mr. Glass is still pending. In determining to
whom the case was assigned with a view to forestalling any action prior
to a conference, it was learned that the attorney handling the case has
already prepared a memorandum opinion concerning the facts.
It was possible, however, to obtain from him a commitment that he
would hold up action pending a conference to be held within the next
two weeks. While this, of course, is not known, the general impression
from the conference was that his recommendation is probably
unfavorable, that is, that he will recommend prosecution. A good strong
case presented at the conference, however, might turn the tide in favor
of the client. At any rate, it is definitely worth trying, in my
opinion.
Accordingly, would you let me know just as soon as possible when
you can plan to be in Washington for a conference as indicated, we have
this matter held up for a period of two weeks.
Sincerely yours,
Edward P. Morgan.
Mr. Morgan. I have read the letter.
Mr. Cohn. May I read this letter into the record?
Senator Dirksen. Yes.
Mr. Cohn. In identifying it, I have stated it is on the
stationery of Welch, Mott and Morgan, Attorneys at Law,
Erickson Building, 710 Fourteenth Street, N.W., Washington,
D.C. [reading]:
Maurice Hendon, Esq., Room 507, 111 West Seventh Street,
Los Angeles, California.
Dear Mr. Hendon. Immediately after receiving the call today
from Mr. Duke, the Department of Justice was contacted, it
being learned that the case involving Mr. Glass is still
pending. In determining to whom the case was assigned with a
view to forestalling any action prior to a conference, it was
learned that the attorney handling the case has already
prepared a memorandum opinion concerning the facts.
It was possible, however, to obtain from him a commitment
that he would hold up action pending a conference to be held
within the next two weeks. While this, of course, is not known,
the general impression from the conference was that his
recommendation is probably unfavorable, that is, that he will
recommend prosecution. A good strong case presented at the
conference, however, might turn the tide in favor of the
client. At any rate, it is definitely worth trying, in my
opinion.
Accordingly, would you let me know just as soon as possible
when you can plan to be in Washington for a conference as
indicated, we have this matter held up for a period of two
weeks.
Sincerely yours, Edward P. Morgan.
Did you write such a letter, Mr. Morgan?
Mr. Morgan. I may well have. I would stand on that letter
certainly.
Mr. Cohn. Do you recognize that this is your office
stationery?
Mr. Morgan. It does look like my office stationery.
Mr. Cohn. When you send out letters such as this in
connection with a matter you are handling as an attorney, do
you customarily make a carbon copy and keep it in your files?
Mr. Morgan. Yes.
Mr. Cohn. Can you explain to us why you have failed to
produce a carbon copy of this particular letter sent to Mr.
Hendon?
Mr. Morgan. I certainly can't explain why I haven't. The
correspondence I was to produce here related to correspondence
I might have had with Mr. Duke. This is a letter to Mr. Hendon.
Mr. Cohn. Can you explain to us how Mr. Duke happened to
receive a carbon copy of this letter to Mr. Hendon with
reference to the Glass tax case?
Mr. Morgan. The only explanation that I can possibly offer
is that his name is mentioned in the letter there, and
presumptively he was just directed a copy of it. Does the
letter indicate that a ``cc'' was for Mr. Duke?
Mr. Cohn. No, it doesn't, but Mr. Duke has produced this
copy here.
Mr. Morgan. Our file would normally indicate a ``cc.'' I
know in the Dr. Lee case I designated copies of just about
every letter I sent to Dr. Lee for Mr. Duke. As a matter of
fact, I produced those even though I felt it was improper to do
so.
Mr. Cohn. May I at this point, Mr. Chairman, read into the
record the duces tecum portion of the subpoena served upon this
witness?
Senator Dirksen. Very well.
Mr. Cohn [reading]:
Produce all correspondence, memoranda, agreements,
contracts or other records, of transactions or negotiations by
and between Russell W. Duke and/or R. W. Duke Enterprises and
the Law firm of Welch, Mott & Morgan or any member or employee
of that firm concerning directly or indirectly any case, claim
or other matter involving any agency or department of the
United States Government and all account books, ledgers,
financial statements, canceled checks, check stubs or other
records of financial transaction of any kind by and between
Russell W. Duke and/or R. W. Duke Enterprises and the law firm
of Welch, Mott & Morgan or any employee or member of that firm,
and any correspondence, memoranda, or other records by and
between the law firm of Welch, Mott & Morgan or any member or
employee of that firm and any official or employee of the
United States Government involving any matter in which Russell
W. Duke and/or R. W. Duke Enterprises had any direct or
indirect interest, and such above requested records should
pertain to the period from January 1, 1947 to date.
Now, Mr. Morgan, let me ask you this right now. Does this
letter here refresh your recollection, and do you now care to
state that you were incorrect in your belief that Mr. Hendon
had contacted you directly with reference to the Glass tax
matter, and that you had not known of Mr. Duke's connection or
interest in it until two months ago?
Mr. Morgan. No, that would not necessarily follow.
Mr. Cohn. That would not necessarily follow?
Mr. Morgan. No, although it might be indicated from the
letter. If Duke stuck his bill in this particular case, as he
appears to have done, and communicated with me, I assume maybe
he was in touch with Hendon after he had been retained by
Glass. I emphasize the fact that Mr. Glass is the man who
retained Mr. Duke in the matter certainly.
Mr. Cohn. I think my question to you very clearly was when
you first learned of any connection----
Mr. Morgan. That is right.
Mr. Cohn. Let me finish my question--in the Glass tax
matter, and your statement was that it was not until the last
two months when you talked to Mr. Hendon in California.
Mr. Morgan. I told you my memory on the thing was very
vague and it still is vague. This letter would indicate that
Mr. Duke, who entered into the matter, had communicated with me
by telephone. I don't remember the letter independently, but if
that is on my stationery, and it is a carbon copy of a letter I
might have written, certainly that is mine.
Mr. Cohn. And the original contact with the Department of
Justice was made on the basis of a telephone call from Mr.
Duke.
Mr. Morgan. I gather as much from that letter.
Mr. Cohn. By the way, what day did you state that this
matter was referred to you by Mr. Hendon?
Mr. Morgan. I told you this morning the date that I have
insofar as my recollection of the matter is concerned.
Mr. Cohn. July 12, 1949, is that right?
Mr. Morgan. When Hendon called the office.
Mr. Cohn. And this letter is dated July 11, 1949, and you
state in the first sentence, ``Immediately after receiving the
call today from Mr. Duke, the Department of Justice was
contacted.'' So apparently it was a day prior to July 12 that
you received the phone call from Mr. Duke, and on the basis of
that you went over to the Department of Justice for the first
time on this case.
Mr. Morgan. That would seem to be correct.
Mr. Cohn. Have you had any dealings with Col. Swearingen
over in the Department of Justice on any other tax case besides
the Glass case?
Mr. Morgan. He was the assigned attorney in the Wilcoxon
case.
Mr. Cohn. Tell us about the Wilcoxon case. I don't think
you told us about that this morning.
Mr. Morgan. The sequence of events and the date on it as I
remember--and the Lee case and this Wilcoxon case are the two
cases that were referred directly to me by this man Duke----
Mr. Cohn. Tell us about the Wilcoxon case.
Mr. Morgan. My recollection on the case is that I received
a call from Sacramento in April of 1949 and Mr. Duke was
calling. He said that he had a life long friend in Sacramento
that had a problem, a tax problem, and asked me if I would
consider the matter. It had been referred to Washington for
criminal prosecution. He was calling, as I remember, from the
law office of Sumner Marion, who was the attorney for Mr.
Wilcoxon. I think I talked to Mr. Wilcoxon at the time of the
original conversation and asked him about the case and a few of
the facts. He had little information to supply. I told him if I
were going to handle the case, and present it to the
department, I would have to have the full story on it, and the
full facts, because in every case I handled I submitted a
detailed memorandum with respect to the facts. I told him that
I would handle the case. He and Mr. Duke came to Washington.
Mr. Cohn. And you did in fact handle the case, is that
right?
Mr. Morgan. Yes, certainly I handled the case.
Mr. Cohn. And Col. Swearingen was the man in the Department
of Justice?
Mr. Morgan. He was the lawyer to whom the case was
assigned.
Mr. Cohn. What was the disposition of that case?
Mr. Morgan. I think the last I remember on the case insofar
as disposition is concerned was in about February of 1952.
Mr. Cohn. What happened?
Mr. Morgan. I have forgotten the boy's name, but he was in
Sumner Marion's office, and he called me and said, ``Mr.
Morgan, Mr. Wilcoxon has received a call from, as I remember, a
Department of Justice attorney, and has been requested to come
to San Francisco for the purpose of a further and additional
physical examination.'' From then on I don't know what happened
insofar as disposition is concerned, because the case had a
statute of limitations that was running, he told me, and that
was one of the reasons they wanted him to get down to San
Francisco in a hurry.
Mr. Cohn. As far as you know, there has been no indictment?
Mr. Morgan. He is dead. His wife sent me a letter advising
of his death in the last two months.
Mr. Cohn. He was not indicted prior to his death?
Mr. Morgan. Not to my knowledge. I don't know.
Mr. Cohn. Did you receive any fee in connection with that
case?
Mr. Morgan. Certainly I received a fee.
Mr. Cohn. How much?
Mr. Morgan. I received a fee of $2750.
Mr. Cohn. Did Mr. Duke receive any compensation in
connection with that case?
Mr. Morgan. After Mr. Duke came to the office, some time
later, the client asked Mr. Duke for a receipt for what he was
paid in the matter, and Mr. Duke called me and said that Mr.
Wilcoxon would like a receipt and I sent it to him. At that
particular juncture for the first time I determined what Mr.
Duke had received in this case.
Mr. Cohn. What had he received?
Mr. Morgan. He had received exactly the same amount that I
had.
Mr. Cohn. You each received $2750.
Mr. Morgan. That is correct.
Mr. Cohn. How many conferences did you have with Col.
Swearingen with reference to this case?
Mr. Morgan. Without seeing the file to be specific it would
be awfully hard for me to say. I talked to him preliminarily. I
talked to him at the time Mr. Wilcoxon was in town because I
took Mr. Wilcoxon over to see him. Then I prepared a brief with
related information substantiating my case, as I saw it, and
then thereafter periodically I would call him on the phone and
ask for the progress and developments in the case.
Mr. Cohn. Do you know what Col. Swearingen's recommendation
was in connection with that case?
Mr. Morgan. I don't believe I do. The reason I don't know
of my own knowledge is that I was on leave from my office for
considerable periods of time during which time another lawyer
would follow the case closely. I don't know what his
recommendation was in connection with the case.
Mr. Cohn. In any event, there was no indictment?
Mr. Morgan. I don't know. I say my last knowledge of the
case was the call from this young attorney out there.
Incidentally, this can be verified for you, and this was in
early 1952, I said to this man, ``By the way, under what
circumstances did Mr. Wilcoxon come in contact with Russell
Duke?'' He had been represented to me as a long time friend.
When they came to my office, it was Russell this and Noble
that. That was Wilcoxon's first name. He said, ``This man
breezed into town. He said, `You are in tax trouble; you better
get back to Washington.' '' Then I realized what had happened
to me in the picture. But that is my knowledge and that is the
story insofar as I know it.
Mr. Cohn. As far as you know, he was not indicted?
Mr. Morgan. I don't know.
Mr. Cohn. He certainly was not indicted up until 1952, is
that correct? I think you mentioned before that there was some
discussion about the possibility of the statute of limitations
running. He was ordered for another examination, is that right?
Mr. Morgan. The local attorney who called me indicated that
is why the Department of Justice lawyer wanted him down there
for another physical examination.
Mr. Cohn. But if there was still a statute of limitations
problem, it is quite clear there was not an indictment.
Mr. Morgan. That is correct.
Mr. Cohn. Did you meet Col. Swearingen the first time in
connection with this tax case, the Wilcoxon case, or in
connection with the Glass case?
Mr. Morgan. Whichever one was first. The Glass case was
July 1949, and the Wilcoxon case was April 1949, so it was the
Wilcoxon case.
Mr. Cohn. Until you had gone to see him in connection with
the Wilcoxon case, you had never met him?
Mr. Morgan. To the best of my knowledge and belief, no.
Mr. Cohn. When we talked about the Glass case, this
morning, about when you went to see Col. Swearingen, you had
never met him before.
Mr. Morgan. The Wilcoxon case came to my office in April
1949. That was handled by Col. Swearingen. The Glass case came
in July 1949. That was handled by him. Manifestly my first
contact would have been on the earlier case, the Wilcoxon case.
Mr. Cohn. Your testimony is that your first contact, as you
recall, was on the Wilcoxon case?
Mr. Morgan. Certainly, and I don't think it is contrary to
anything else I have said.
Mr. Cohn. And beside the Wilcoxon case, and the Glass case
were there any other tax cases of yours with which Col.
Swearingen had any connection, directly or indirectly?
Mr. Morgan. No.
Mr. Cohn. Only those two?
Mr. Morgan. Yes.
Mr. Cohn. I think you told us that according to the best of
your recollection the only time you saw Col. Swearingen after
the meetings in these two cases was when he invited you to
address his church a year or two later.
Mr. Morgan. That is right, except I may have met him in the
halls of the Department of Justice.
Mr. Cohn. Now, in response to this subpoena, you told us
this morning you complied with the subpoena, and went through
the files and produced all correspondence relating to matters
referred to in the subpoena, specifically all correspondence
relating to tax cases which you handled with which Mr. Duke had
any connection, is that correct?
Mr. Morgan. Yes.
Mr. Cohn. And the staff has gone through the correspondence
you produced and finds that you have produced no letters or
correspondence whatsoever relating to the Glass case, to the
Schafer case or to the Burns case, to start out. Will you
explain that?
Mr. Morgan. I can't explain it, unless the original letters
do not indicate the ``cc,'' because that would be the only way
our files would indicate that he got a ``cc'' of it. Our file
in our office would have a ``cc'' on the yellow as to who
received a copy of the letter.
Mr. Cohn. I don't interpret the subpoena as narrowly as you
do. It says produce all correspondence, memoranda, agreements
or contracts or other records of transactions of negotiations
by and between Duke and the law firm, and so on and so forth.
We have here some letters of which there were no copies.
Mr. Morgan. If you will show me what you are talking about,
I will try to explain it, if I can.
Mr. Cohn. With reference to the Glass case, we have no
letters, with reference to the Schafer case we have no letters,
with reference to the Burns case, we have no letters.
Mr. Morgan. What am I supposed to do?
Mr. Cohn. Your testimony is that your files contain no such
letters, is that right?
Mr. Morgan. No, that is not my testimony, certainly not. My
testimony is this, that I produced all records available in our
office that related to correspondence between my office and
Russell Duke. I additionally supplied you with even copies of
letters that I had sent to clients where I thought he had a
proper interest in the matter. Now, if there are other letters
that Mr. Duke might have that were not produced pursuant to the
subpoena, then I would like to know what they are.
Mr. Cohn. One of them is a copy of this letter to Mr.
Hendon.
Mr. Morgan. There is no ``cc'' indicated on it.
Mr. Cohn. No, but it is a letter which refers to Mr. Duke.
Don't you think that would be covered by the subpoena?
Mr. Morgan. No, I don't think so. No, sir, I do not. That
is a matter of construction certainly.
Mr. Cohn. Mr. Chairman, may I ask that the witness be
directed to produce the next time he is here any correspondence
in the files of his office mentioning Mr. Duke by name?
Senator Dirksen. Yes. Let us be specific on the information
that is desired. Do you want to be a little more precise in the
things that you would like to have?
Mr. Cohn. Mr. Chairman, I would say in view of the scope of
the inquiry, we would be interested, referring particularly to
this letter, in any correspondence retained by Mr. Morgan in
his files between his law firm and any client in which the name
of Mr. Russell W. Duke or Russell W. Duke Enterprises is
mentioned in any way.
Senator Dirksen. I think that narrows the inquiry somewhat.
Would that be too difficult?
Mr. Morgan. Senator, I have this one observation, and I
would certainly comply with any instruction that you might give
me on the matter. I am most reluctant to spread out our
correspondence that I might have had directly with a client in
a case, particularly where the case might have some degree of
pendency about it. I think that is a privileged communication
between a lawyer and his client. I don't know whether there are
any such letters in which his name is mentioned in the letter.
If you instruct me to do it. I will do it, If you instruct me
to do it, I will bring you every one of these files in their
entirety and be glad to do it. If you would like to have every
one of them, I will bring them all to you.
Mr. Cohn. I might suggest, Mr. Chairman, if I may
respectfully do so, that the question of privilege is something
that might be raised with respect to a particular document, but
not something which can be raised addressed to the entire
request.
Mr. Morgan. On this scope, Senator, I would like to raise
this point. I am a practicing lawyer, apparently whose ethics
are on trial by reason of the fact that unfortunately he has
had communication with this man, and I don't want to hide
behind any privilege which I might claim as a lawyer. I don't
intend to do it simply because people other than lawyers would
not understand that claim of privilege. That being true, as I
say, I will produce anything that you tell me to do, including,
up and including these files in their entirety as they appear
in our law office.
Senator Dirksen. First let me ask counsel, if this is an
appropriate question, whether or not your question relates to
some specific files or specific cases?
Mr. Cohn. Mr. Chairman, it certainly relates to every tax
case mentioned here today, with which Mr. Duke had a
connection, such as the Glass case, where we did not get this
letter. It just so happens we got a copy from Mr. Duke. We got
no copy from Mr. Morgan in view of his interpretation of the
subpoena. It would certainly relate to any case here today. I
would submit that in view of the scope of the inquiry and Mr.
Duke's activities that it should relate to any communication
with Mr. Morgan's firm in which Mr. Duke's name was mentioned.
I don't think that would be too broad, particularly in view of
the witness' testimony today.
Mr. Morgan. I will produce anything the senator wants me to
produce. May I make this observation, Senator? At the time we
received the subpoena, we started to work trying to comply with
it. As I advised, this was a forthwith subpoena, to produce in
this dragnet fashion all of this information. We have no file
on Russell W. Duke as such. We had to pull out all of this out
of files in which he might have been mentioned anywhere. We
assigned a girl to run down and try to find everything that we
possibly could to comply. Finally we said, let us just give
them all of the files in their entirety. We started to do it,
and finally we came to the conclusion, we do have some letters
here certainly where we are advising the client as lawyer-
client what he should do in a particular situation in
contemplation of certain facts. We decided that was not proper
and that it was not the sort of thing we should let go out of
our office. If you want the whole file, all right. It is there.
Senator Jackson. Mr. Chairman, it would seem to me, what
little I know about the law, not to be technical about it, that
in this particular instance, this letter I think he has
complied with that subpoena. I mean a subpoena duces tecum goes
to the printed record. It does not require him to produce
things out of his mind. It is things related to the printed
record. I looked on the copy and it does not have a copy to
Russell Duke. So therefore if you are asking for printed
records or written records as the subpoena duces tecum implies,
he certainly did not violate the subpoena in connection with
this exhibit. I want to be fair all the way around.
Senator Dirksen. Knowing the general nature and the
sometimes seemingly vague language in a subpoena duces tecum I
certainly would not quarrel with the witness' compliance with
the matter. I think the witness does have in mind, however, the
point that counsel is trying to establish, and what he would be
interested in would certainly be correspondence that has a
bearing upon tax and claim cases where there is naturally a
government interest and the identity of Russell Duke directly
or indirectly with any of those.
Mr. Morgan. What I shall do then, Senator, is to produce
for you every piece of correspondence wherein this man's name
is mentioned. Is that it?
Senator Dirksen. That would be satisfactory.
Mr. Morgan. And I say if you want them, you may have the
files.
Senator Dirksen. As a matter of fact, I think the thing can
be narrowed somewhat. There may be some correspondence where
the name is mentioned that would not be pertinent to this
inquiry. Of course, we want to be sensible of the confidential
relationship that relates between counsel and client, and there
would be some in your judgment that would be in violation of
that confidence. This committee would not insist upon it unless
it had some real relevance to the objectives pursued here. I
think the witness has in mind what counsel has in mind, namely,
where there is a Russell Duke interest, directly or indirectly
relating to a tax or claims case, or any other case where a
federal agency is involved. If that is clear, then may I
respectfully suggest----
Mr. Morgan. I shall observe your instruction.
Senator Jackson. That would include television or any
telephone notations.
Senator Dirksen. That is right. I said any agencies, so
that would be FPC, FCC or anything else, including the
Department of Justice.
Now, is this of a forthwith nature? Do you want these at an
early date?
Mr. Cohn. I think he ought to be given a reasonable time
because that is a big job.
Senator Dirksen. The point will not be pressed.
Mr. Morgan. When would you like to have it?
Senator Dirksen. I will leave that to counsel.
Mr. Cohn. I would say a week would be plenty of time.
Mr. Morgan. As I say, you can have the files, Senator, I
don't want this record to reflect that I am claiming any
privilege of any kind, because I just don't want anybody to say
that I am hiding behind it, even though I should as a lawyer do
it. I just don't intend to do it. That is why I say if you want
the files, they are yours. As I understand it, you want every
bit of correspondence in our office where this man's name might
be mentioned, and that is what I will have for you, and if you
will tell me when you want it, I will try to get it for you.
Senator Dirksen. I would suggest, because of the
intervention of the Inaugural week, that we set it over to the
following week, which will be a week from next Tuesday.
The witness should not limit this, of course, to
correspondence where merely the name of Duke or Russell Duke is
mentioned or on stationery of Mr. Duke, because it may be the
assertion of an interest of claim of Mr. Duke where his name is
not actually recited. So it is his identity with claims and his
relationship with your firm.
Mr. Morgan. I will try to produce everything I can find.
Mr. Cohn. Mr. Morgan, do you know whether or not it is a
fact that Col. Swearingen was the only attorney connected with
the Department of Justice working on the Wilcoxon case who
failed to recommend an indictment at the time you interceded?
Mr. Morgan. I have no knowledge of any other attorney. I
don't know of the recommendation in the matter, to tell you
frankly, because as I say I was on leave from my firm for a
period of over a year. Then I was on leave again during the
time I was up here on the Hill for about six months.
Mr. Cohn. Do you know whether or not Senator Morse had
communicated with the Department of Justice in connection with
this Wilcoxon case?
Mr. Morgan. I have no knowledge of that to the best of my
knowledge and belief.
Mr. Cohn. Let me ask you this, if I may, Mr. Morgan. Was
any question ever raised about anybody with an official
government position concerning an association between yourself
and Russell Duke in connection with the handling of income tax
cases?
Mr. Morgan. Repeat the question, will you, please?
Mr. Cohn. Read it, please.
[Question read by the reporter.]
Mr. Morgan. I would say it was not by anyone in the
Department of Justice.
Mr. Cohn. I said anyone in government.
Mr. Morgan. Or in government. I have a recollection, again
very, very vague, of a friend of mine who told me of a report
that had come to him that Russell Duke was of a questionable
kind of character and was using my name in vain as he put it,
as I remember, and I think the next time I saw Russell Duke, I
went over that with him, and to the best of my knowledge, that
was the time that I asked him if he had a criminal record.
Mr. Cohn. When would that have been?
Mr. Morgan. That must have been late in 1949, sometime in
1949. I could not peg the date for you.
Mr. Cohn. Did this report emanate from anyone in
government, the report that your friend brought you?
Mr. Morgan. It might well have emanated from someone.
Mr. Cohn. Do you recall whether it did or not?
Mr. Morgan. I don't recall specifically.
Mr. Cohn. Do you know Walter M. Campbell, Jr.?
Mr. Morgan. Do I know him?
Mr. Cohn. Yes.
Mr. Morgan. To my knowledge and belief I have never met
him.
Mr. Cohn. Do you know who he is?
Mr. Morgan. Yes, I know who he is.
Mr. Cohn. Who is he?
Mr. Morgan. He is over in the BIR but I never met him.
Mr. Cohn. In what capacity?
Mr. Morgan. That I frankly don't know and what his capacity
was in 1949, I am sure I don't know.
Mr. Cohn. Do you recall having written to Mr. Campbell
telling Mr. Campbell----
Mr. Morgan. Oh, wait a minute. Now this comes back to mind
certainly, and there again it is something I had completely
forgotten. I remember this. Walter Campbell is an attorney with
the Bureau of Internal Revenue or Department of Justice, and
that letter I will be glad to produce certainly, because that I
had completely forgotten. This man Campbell is supposed to have
made some statements adverse to me that got back to me, and
this is the context now. I remember. I thereupon wrote a letter
to Mr. Campbell in which I stated that I felt it was highly
improper for him to be attributing to me any improper
activities as a result of my association with anyone. I would
have to get the letter to be sure of it.
Mr. Cohn. I have it right here.
Mr. Morgan. Fine. Why don't we read it into the record.
Mr. Cohn. May it be identified for the record, Mr.
Chairman?
Senator Dirksen. It may.
Mr. Cohn. I might state for the record, Mr. Chairman, this
letter was furnished to us by the BIR. The letter is on the
stationery of Mr. Morgan's law firm and dated September 26,
1949, addressed to Mr. Walter M. Campbell, Jr., and signed by
Mr. Edward P. Morgan. May that be displayed to the witness?
Senator Dirksen. Yes, and let the record show that it is a
photostat provided by the BIR.
[The letter referred to was marked as committee's Exhibit
No. 8, Edward P. Morgan, January 16, 1953, and is as follows:]
September 26, 1949.
PERSONAL
Mr. Walter M. Campbell, Jr.,
100 McAllister Street Building,
San Francisco 2, California.
Dear Mr. Campbell: I have been advised by an unimpeachable source
of a remark attributed to you to the effect that I am ``teamed up''
with Russell Duke and Howard Bobbitt of Portland, Oregon, incident to
handling of income tax cases. Such a suggestion, particularly from a
man in your position, amazes me, wholly apart from its complete
falsity.
For your information, I have ``teamed up'' with no one incident to
the handling of anything, and I have never in my life accepted or
handled a case, save upon my being retained by the client directly or
by his local counsel.
Having spent eight years in the Federal Bureau of Investigation,
rising from a Special Agent to its Chief Inspector and having acted as
counsel to several committees of the Congress, I deeply resent any
imputation of shady professional conduct. If you or your organization
have anything concerning me or my practice that disturbs you or you
would like to have implied upon, I would very much like to be afforded
the courtesy of an interview before the imputation of questionable
practices by you or anyone else.
I have purposely made this a personal communication to you with no
idea of making an official issue of the statement attributed to you.
You can appreciate, however, I am sure, my feeling of concern and
resentment.
Sincerely yours,
Edward P. Morgan.
Mr. Cohn. Would you tell us after glancing at it if this is
the letter to which you have just made reference?
Mr. Morgan. Yes, and I would like very much to read it into
the record, if I may.
Senator Dirksen. The witness is privileged to read it into
the record.
Mr. Morgan. This letter is dated September 26, 1949. It is
marked ``Personal'' [reading]:
Mr. Walter M. Campbell, Jr., 100 McAllister Street
Building, San Francisco 2, California.
Dear Mr. Campbell: I have been advised by an unimpeachable
source of a remark attributed to you to the effect that I am
``teamed up'' with Russell Duke and Howard Bobbitt of Portland,
Oregon, incident to handling of income tax cases. Such a
suggestion, particularly from a man in your position, amazes
me, wholly apart from its complete falsity.
For your information, I have ``teamed up'' with no one
incident to the handling of anything, and I have never in my
life accepted or handled a case, save upon my being retained by
the client directly or by his local counsel.
Having spent eight years in the Federal Bureau of
Investigation, rising from a Special Agent to its Chief
Inspector and having acted as counsel to several committees of
the Congress, I deeply resent any imputation of shady
professional conduct. If you or your organization have anything
concerning me or my practice that disturbs you or you would
like to have implied upon, I would very much like to be
afforded the courtesy of an interview before the imputation of
questionable practices by you or anyone else.
I have purposely made this a personal communication to you
with no idea of making an official issue of the statement
attributed to you. You can appreciate, however, I am sure, my
feeling of concern and resentment.
Sincerely yours, Edward P. Morgan.
I might say, as a post script to this letter, that at no
time did Mr. Campbell or any representative of the Bureau of
Internal Revenue ever communicate with me concerning Russell
Duke.
Mr. Cohn. You mean he never answered that letter?
Mr. Morgan. Correct.
Mr. Cohn. I think you testified just a moment ago that
following that letter you made inquiry of Mr. Duke and in the
course of that inquiry you discovered that he had a criminal
record, is that right?
Mr. Morgan. I don't remember. To the best of my knowledge
it was about that time. I had completely forgotten this thing.
Mr. Cohn. After you found out Mr. Duke had a criminal
record, and was a person of the type you described to us here
this morning in some detail, did you discontinue relations with
Mr. Duke?
Mr. Morgan. Mr. Duke explained to me as best he could his
record. As I told you this morning, I asked him, come to think
of it, in detail what the significance of this particular
statement attributed to Campbell might be, and he of course
sought to explain it, and said it was enemies of his making
false accusations against him and that sort of thing. At that
particular juncture my first big question mark about Russell
Duke was raised. I might say that after that time, which was
September of 1949, I recall no particular case in which I
handled by reference from Duke other than the simple inquiry
that I made in September of 1950 in the Herman Lawson matter. I
know of no others or can think of no others. In other words,
from then on I didn't throw the man out of my office, I
listened to his story, he explained his record to me, he
explained what might have been responsible for Campbell making
such a remark if he made it, and so on and so forth.
I immediately realized that I would have to deal with him
with greater circumspection in the sense that I had completely
above board. I had sent him copies of correspondence that you
have. I thought him to be a completely legitimate individual.
Mr. Cohn. From that point on with the exception of this
Lawson case, you discontinued your relations with Mr. Duke, is
that correct?
Mr. Morgan. Insofar as any relationship of the type we have
been talking about. The Inez Burns case came to me from Frank
Ford, and as I remember, I indicated initially that I did not
want to consider or handle the case. Mr. Ford explained to me
on the phone certain incidents of the case that he felt merited
attention and consideration. I told him if he cared to come to
my office and discuss the case with me I would consider
handling it. He did come to my office. I did decide to take the
case. He and I went to the Department of Justice in connection
with the case. These various matters that we have been talking
about in the tax field predate certainly this information here.
Now, I did not immediately cut the fellow off, as I have
said.
Mr. Cohn. My last two questions are these, Mr. Morgan: Who
told you about Mr. Campbell's statement that you were teamed up
with Duke and Bobbitt on income tax cases?
Mr. Morgan. That is as vague in my mind as this letter. I
would like to reflect upon it. Offhand, I can't remember. I
have an impression as to who it is, but I don't want to state
until I am sure of it.
Mr. Cohn. You will try to let us know the next time you
appear before the committee?
Mr. Morgan. I certainly will.
Mr. Cohn. The last question is, did you ever offer a
position to any Internal Revenue agent?
Mr. Morgan. Did I ever offer a position?
Mr. Cohn. Yes, did you ever offer a position or did you
ever offer to obtain a position for an Internal Revenue agent?
Mr. Morgan. I know exactly what you are talking about. Mr.
deWind brought this matter up. At the time he brought it up, I
told him that I certainly would not deny a conversation which
he referred to, and I want to give you my recollection on it.
He asked me the question as to whether I had ever at any
time offered a position in my law firm to a representative of
the Bureau of Internal Revenue. It meant nothing to me at the
moment. He amplified on it a little and it came back. Since
that time I have tried to think as best I can back on the
situation, and I think I know to what you are referring.
When I went to Portland to confer on this Lee case, I
appeared before the technical staff. Mr. Lee went with me. Mr.
Duke went with me. Mr. Duke was known by the first name to
everyone present at the conference. He sat in on the
conference. I remember the conferee turning to Mr. Lee and
saying, ``As the client, do you have any objection to Mr. Duke
being present.'' Mr. Lee said he did not. He asked me if I had
any objection. I said. I did not. The conferee was there as a
member of the technical staff. Also present was a
representative of the intelligence unit, since it was a
jeopardy assessment in a fraud case. Also present was the
counsel for the Bureau of Internal Revenue and perhaps a couple
of investigators. That is the picture as I remember it. One of
these men present there, and I don't know whether he was with
the Intelligence Unit--it is my impression he was--or whether
it was the counsel, I have forgotten, I remember talking to,
and I told Mr. deWind that at that particular time it is true,
in our practice, which is in radio and television, we were
seriously considering opening an office in California, because
we had had several hearings out there, and I might well have
talked with him. Since that time I have thought about it, and
thought about it, and now I know and recall the details, I
think.
On the day that I was to leave Portland, Oregon, Russell
Duke called me, and he said, ``I want to take you out to the
airport.'' I said, ``You don't need to do that.'' He said, ``I
want to.'' He appeared at the hotel where I was staying, and
with him was this particular representative of the Bureau of
Internal Revenue, and we rode to the airport together, the
three of us, and the best I can remember, certainly in the
course of the discussion--I am almost positive of it, I don't
know who brought it up--I did mention the fact in a general
discussion that we were considering that. This fellow said that
he was from California, I think his father down there was the
head of the Bureau, if I remember. We just talked most
generally about it. I asked him his impressions about it, and
the advisability of it. He indicated, as I remember, that he
had a sick child and himself was anxious to get back down
there. As I look back on it, the whole thing which has been so
vague in my mind is utterly meaningless. But I will say this to
you, and this I state categorically, that if from your question
there is to be an inference that I sought to influence this
case by offering that man a position in my law firm, that is a
lie.
Mr. Cohn. Is there anything more you care to say, Mr.
Morgan?
Mr. Morgan. No, I have nothing more.
Mr. Cohn. I have no further questions.
Senator Dirksen. The hearing is recessed subject to the
call of the chair.
[Whereupon at 3:55 p.m., the hearing was recessed subject
to call of the chair.]
STOCKPILING IN GENERAL SERVICES ADMINISTRATION
[Editor's note.--In its annual report for 1953, the
subcommittee explained that it had begun but had not completed
an investigation of stockpiling of strategic materials:
``Several staff members were assigned to this investigation and
examined voluminous files of the various agencies of the
government involved in this program. A mass of exhibits,
statements, and other pertinent data was obtained, and several
preliminary staff reports covering the various materials were
prepared. The investigation consumed the time of several staff
members, exclusively assigned to this project, for the first 7
months of 1953.'' However, on July 28, 1953, the Senate
Committee on Interior and Insular Affairs created a
Subcommittee on Minerals, Materials, and Fuels, chaired by
Senator George W. Malone, and authorized it to conduct a full
investigation into stockpiling of strategic materials. After
consulting with Senator Malone, Senator McCarthy agreed to
transfer all files, documents, data, statements, and exhibits
relating to stockpiling to the Interior Subcommittee, and also
to lend assistant counsel Jerome S. Adelman, who had directed
the initial investigation. The subcommittee called neither
George Willi nor Maxwell Elliott to testify in public session.]
----------
MONDAY, JANUARY 26, 1953
U.S. Senate,
Senate Permanent Subcommittee on Investigations
of the Committee on Government Operations,
Washington, DC.
The subcommittee met, pursuant to Senate Resolution 251,
agreed to January 24, 1952, at 10:00 a.m., in room 357 of the
Senate Office Building, Senator Joseph R. McCarthy, chairman,
presiding.
Present: Senator Joseph R. McCarthy, Republican, Wisconsin;
Senator Charles E. Potter, Republican, Michigan; Senator John
L. McClellan, Democrat, Arkansas; Senator Henry M. Jackson,
Democrat, Washington; Senator Stuart Symington, Democrat,
Missouri.
Present also: George Willi, Department of Justice; Maxwell
Dickey, Office of Enforcement, OPS; Oliver Eastland, Defense
Materials Procurement Agency; Will Ellis, General Accounting
Office; Smith Blair, General Accounting Office; Richard
Sinclair, General Accounting Office; Robert Cartwright, General
Accounting Office.
Present also: Francis D. Flanagan, general counsel; Roy
Cohn, chief counsel; Donald Surine, assistant counsel; Jerome
S. Adelman, assistant counsel. G. David Schine, chief
consultant; Ruth Young Watt, chief clerk.
The Chairman. This has to do with the procurement practices
in stockpiling. Today we are talking almost exclusively, I
understand, about the feather buying project.
At first blush, it does not seem that feathers are a
strategic product, but I understand you just cannot fight a war
without them. You need them for the sleeping bags, the flying
jackets; so it is a very strategic material.
I haven't talked to any one in the military to find out
from them whether they thought this should be in executive
session, but I felt that as long as they have this information
classified, either rightly or wrongly, we should honor their
classification, at least for the time being, on the ground that
it might give the enemy considerable information if we, for
example, discuss the speed-up in the procurement, or the
original orders and the length of time for which the
procurement should be had.
The testimony of this young man who was with the OPS, and
is now in the Justice Department, will cover some of the
practices.
Is Mr. Hewitt here?
Mr. Flanagan. No, but the general counsel of his
organization is here.
The Chairman. And I think this should be conducted in a
rather informal manner.
If anyone from the GSA [General Services Administration]
has something to add to it, or the General Accounting Office,
they may speak up.
Senator Symington. Mr. Chairman, may I suggest that each
person here identify himself, so that Senator McClellan and I
will know who they are?
The Chairman. Yes, will you gentlemen do that?
Mr. Willi. George Willi, Department of Justice.
Mr. Dickey. I am Maxwell Dickey, from the Office of
Enforcement, OPS.
Mr. Eastland. Oliver Eastland of the Defense Materials
Procurement Agency, Office of the General Counsel.
Mr. Elliott. I am Maxwell Elliott, general counsel for
General Services.
Mr. Ellis. I am Will Ellis, chief of investigations of the
General Accounting Office.
Mr. Cartwright. Robert Cartwright, associate chief of
investigations, General Accounting Office, Office of
Investigations.
Mr. Blair. Smith Blair. Blair is the last name. General
Accounting Office.
Mr. Sinclair. Richard Sinclair, General Accounting Office.
The Chairman. I may say, for the benefit of the senators,
that the General Accounting Office has been working on this for
some time, I understand, and have a lot of information on this
also.
This, incidentally, was brought to both our attention and,
I understand, the attention of the GAO by Senator Williams, who
originally started to check into the matter and became
interested in it. And before holding any hearings on this, I
talked to Senator Williams to make sure that his committee had
no desire to go into this particular project, and he was
apparently very well satisfied with his results of his
observations.
Mr. Willi, would you stand and be sworn? In this matter now
in hearing before the committee, do you solemnly swear to tell
the truth, the whole truth, and nothing but the truth so help
you God?
Mr. Willi. I do.
The Chairman. Go ahead, Mr. Cohn.
Mr. Cohn. Mr. Willi, where are you employed now?
TESTIMONY OF GEORGE WILLI
Mr. Willi. The tax division of the Department of Justice.
Mr. Cohn. How long a period of time have you been there?
Mr. Willi. Since September 29, 1952.
Mr. Cohn. And prior to that time where were you employed?
Mr. Willi. I was an attorney with the Office of Price
Stabilization, dating from approximately March 5th, 1951 up
until the time I accepted the position in the Justice
Department.
Mr. Cohn. Keep your voice up just a bit.
Now, Mr. Willi, while you were with OPS, did you have some
concern with a particular product known as waterfowl feathers?
Mr. Willi. I did.
Mr. Cohn. And did that concern continue, and has it
continued, for a period of some eighteen months?
Mr. Willi. Approximately so, yes.
Mr. Cohn. And in the course of your concern with this
particular product, have certain facts come to your direct
attention indicating a possible loss of a substantial amount of
money to the taxpayers of this country?
Mr. Willi. That is substantially true.
Mr. Cohn. Now, would you tell us very briefly what these
waterfowl feathers are, and whether or not they are a strategic
material, and if so, what their use is for strategic purposes?
Mr. Willi. Well, in that connection, I suppose the most
basic thing is these feathers themselves. In these various
little packets here are, on the one hand, feathers, which you
will notice are of quite a coarse texture, and on the other
hand this down, which is of a much more resilient, fine
texture. It is the down principally out of which arises the
strategic importance of the commodity, in that it has an
insulating and filling property that has been impossible of
duplication synthetically.
It was my understanding that during the last world war,
there was rather an acute shortage of these things. They are
used in the manufacture of military sleeping bags, hospital
pillows, and certain air force high altitude flying equipment
that requires such insulation.
Mr. Cohn. All right. Now, let me ask you this, Mr. Willi.
Where do these waterfowl feathers come from? Is that a domestic
product, or an imported product?
Mr. Willi. Approximately 60 to 85 percent of the world's
supply, and moreover, approximately 0 to 5 percent of our
domestic requirements here, are serviced by importation from,
principally, Iron Curtain sources, of which sources Red China
itself is the main point of origin, accounting for the great
preponderance of the imported material; the remainder coming
from such European sources as Poland, Hungary, Czechoslovakia,
and other so-called satellite countries in Europe. So that in
the main, the supply situation is one in which no more than 15
percent of our requirements here can be serviced by domestic
production.
Mr. Cohn. Now, what are the domestic sources?
Mr. Willi. The principal domestic source is Long Island,
the production of which is approximately a million pounds a
year, as I understand it. Long Island has a very great
concentration of duck production for meat purposes, and these
feathers are a by-product, a rather high income producing by-
product, but none the less, in Long Island, they are a
commodity incident to the production of this duck meat there.
The other sources are in the Great Lakes area, southern
Wisconsin, northern Illinois, and then there is just a general
spread of a kind of a barnyard variety over the Midwest in
general.
The Chairman. Would you say the ducks out in Arkansas are
pretty much the barnyard variety?
Mr. Willi. I would think so. I would not swear to that.
Senator McClellan. How long have you been in this business?
Mr. Willi. I am happy to say, Senator, I have never been in
this business.
Senator McClellan. You probably have a lot to learn.
Senator Symington. I respectfully will say, Mr. Chairman
that I have tried to get a lot of ducks down in Arkansas
without much success.
Senator McClellan. We kill more than a million down in one
county in Arkansas.
Mr. Willi. I stand corrected.
Mr. Cohn. I assume, Senator, you do not want us to
interrogate further concerning the Wisconsin ducks?
Senator Potter. Are all feathers usable for this purpose? I
was thinking of game birds.
Mr. Willi. No, sir; they are not.
As I indicated previously, the really valuable thing that
is taken from these waterfowl, including both ducks and geese,
is this down, this very fine substance that you find in there.
However, both for the Quartermaster Corps and in connection
with the General Services stockpile procurement, feathers up
to, I believe, three and a half inches in length are also used
and intermixed with this down. For example, the composition of
your military sleeping bag is a mixture of 40 percent by weight
down and 60 percent by weight of these small feathers. However,
there are quills and other longer feathers that are unsuitable
for military use.
The Chairman. What is the domestic production, roughly, in
the entire United States, both ducks and geese?
Mr. Willi. I would say approximately two million pounds. I
could be mistaken on that.
The Chairman. How about if you included Canada and South
America?
Mr. Willi. To my knowledge there have been no importations
from South America, at least in connection with the program
during the time I was in contact with it. There were some
importations from Canada, but I just do not know what they
supply us.
The Chairman. I understand you are not an authority on
feather production.
Mr. Willi. No, sir. Let the record show that.
The Chairman. But you would not know, off-hand, whether
there are feathers available from South America, would you?
Mr. Willi. No, sir. I did understand from some of the
members of the trade here that during World War II, there were
importations from South America. However, what the real source
was down there, I couldn't say.
As to your question, Senator Potter, the game birds, the
teal and geese and that type of thing--to my knowledge those
feathers aren't in the picture. I don't believe they ever got
to it. The marketing source that makes available what domestic
production we have is usually a commercial poultry type, where
there is volume.
Mr. Cohn. Could you tell us now just what happens to the
raw product, the waterfowl feathers, when they arrive in this
country? Just what is done with them?
Mr. Willi. They arrive in this country in bales.
Mr. Cohn. Around the New York area?
Mr. Willi. Principally through the Port of New York. There
is some limited entry of them on the West Coast, but not
withstanding the fact that so great a percentage originate from
the Orient, even so, the entry is primarily through New York
rather than the nearer West Coast. They arrive in New York, I
would think, generally similar in appearance to cotton, except
that they are in a great bag. Their condition at that time
generally is that in which they were taken from the animal.
Included in there is everything even these unusable items, such
as the oversized feather, dirt, general contamination, and, of
course, I guess inevitably, some much less valuable chicken
feathers are put in there; which, of course, are of greatly
less value.
Senator Potter. But add to the weight.
Mr. Willi. Yes, that is one of the problems of the
importers.
But, at any rate, they are in the rough state. They have
not been processed at all, in the main, again, with the
exception of being taken from the animal, and dried, of course,
if they were soaked up, and bagged in that state.
Mr. Cohn. Now, Mr. Willi, would you tell us when and under
what circumstances, the situation concerning these waterfowl
feathers first came to your official attention in the OPS?
Mr. Willi. As I say, I was an attorney with OPS.
I was specifically assigned to the poultry branch of the
food division in OPS.
In late April 1951, I was advised that this commodity had
been assigned to us, inasmuch as it was connected with poultry,
and very shortly thereafter, on two or three occasions,
delegations of the trades people, the private sellers and
dealers in this commodity----
The Chairman. May I interrupt?
I am afraid we won't be able to get your entire story
today, and I would like to give the senators just a general
picture, without going into a lot of the details, which we will
have to go into later. So, if I may ask you some questions at
this point: You found that the Munitions Board had put feathers
on the so called critical list, or whatever you call it, and
ordered the procurement of feathers?
Mr. Willi. Yes, sir. I believe that was the authority for
it.
The Chairman. And am I correct in this? If not, I wish
anyone here would correct me on it.
Am I correct that they had a target date for the
procurement of roughly twelve million pounds over a period of
five years, within a five-year period?
Mr. Willi. Senator, I never saw the specific directive, but
it was described to me as substantially to that effect.
The Chairman. In other words, you cannot tell us definitely
the target date that the Munitions Board had?
Mr. Willi. No, sir. I do know, though, that there were
specific directives that were generally described to me. But I
did not see them.
The Chairman. The time came when you put a ceiling on
feathers. Right?
Mr. Willi. Yes, sir.
The Chairman. And, as I understand it, the Quartermaster
Corps was buying feathers, and GSA was buying feathers?
Mr. Willi. Yes, sir. More accurately, the Quartermaster
Corps was buying these end products, such as the sleeping bag,
hospital pillow, and jackets, and that type of thing.
The Chairman. Now, in view of the fact that the GSA was
buying the bulk product and the Quartermaster Corps was buying
the product after it was sewed into sleeping bags and such
like, was it possible for your office to compute the
approximate cost that the QM Corps was actually paying for the
finished feather and the GSA was paying for the finished
feather?
Mr. Willi. At the time that we first made contact with the
subject, it was not possible to do that, Senator, because----
The Chairman. At any point was it possible for you to
compare the cost to the Quartermaster Corps of finished
feathers with the cost to the GSA? In other words, could you
tell whether they were paying approximately the same price?
Mr. Willi. I believe I could best answer that in this way,
Senator. During a period when the GSA paying prices were
holding steady and constant, the Quartermaster Corps paying
prices on the end items were in a general and sustained
decline.
The Chairman. You have spent, roughly, how much time
investigating this particular subject?
Mr. Willi. I was concerned with it directly approximately
eighteen months.
The Chairman. Were you convinced that the QM was paying
more or less than GSA was paying for feathers?
If you would rather not answer that, okay.
Mr. Willi. The best I can say is that, acting on the advice
of trade sources and other people who we felt knew more than we
did about it, they indicated that, broken down, the General
Services Administration was paying relatively more for the
feathers, as such, that they were purchasing than the
Quartermaster Corps was paying for the feathers that were
incorporated in the end items that they were buying.
The Chairman. Now, the GSA, as I understand it, under the
law, has a right to either take bids, or, if they feel they can
more efficiently procure, they can procure on a negotiated
basis. Is that correct?
Mr. Willi. I did not, myself, review the statutory
authority.
Mr. Flanagan. Yes, Senator, we have had that statutory
authority reviewed, and GSA can buy by negotiation in those
cases where they deem it is more advisable.
The Chairman. Flip, for the benefit of the senators, I
wonder if you would care to just review in the record the
functions of the Munitions Board and of the defense procurement
people?
Mr. Flanagan. Very briefly, our stockpiling program was set
up by statute in 1946, which was implemented from time to time
by revisions and so on. It boils down to this: the Munitions
Board is responsible to determine, from time to time, what
materials are needed for the stockpile, both the quality and
the quantity, and also the general rate of procurement.
The Emergency Procurement Service of the GSA, in turn, is
the purchasing agency. They are to go out and do the
purchasing. Starting about eighteen months ago, there was set
up a committee called the Defense Materials Operating
Committee, which is a committee, DMOC, made up of the various
agencies, Munitions Board, army, navy, GSA. That committee was
to determine the rate of the buying. In other words, the
Munitions Board would say, ``We want twelve million pounds of
feathers for our stockpile,'' and then the DMOC would say,
after examining the market and the possible effect of
purchasing on price and on our own economy, ``Purchase these
feathers in a given period, say, one year, three years, or five
years.'' Then GSA actually should only be a purchasing agency
following the directives of either the Munitions Board or the
DMOC.
That, in a nutshell, is the program under which these
feathers and these strategic materials are purchased for the
stockpile.
The Chairman. I may say, for the benefit of the senators,
in case some of you are not able to stay for all of the
testimony, we have gone over this rather carefully with the GAO
and with this witness and with other witnesses.
It appears that the cost of feathers was just upped
tremendously during the buying program, and whether it was
speeded up unnecessarily, whether it was speeded up by the DMOC
or speeded up by the GSA, at this time we do not know. We do
not know just who decided who had to have them all of a sudden.
It would appear at this point that the Munitions Board had
set a much longer period of time, but that may be in error. I
do not know.
Mr. Flanagan. Senator, before you go on to another
question, there is one thing I would like to add; that from a
review of the legislative intent of the entire strategic
stockpile program, there is one thing that stands out, and that
is this: that the Congress has said, on more than one occasion,
that the buying, while it is exempted from bids, and so on,
should be done in an orderly fashion, at reasonable prices.
Senator Symington. Could I ask a couple of questions,
there, Mr. Chairman, for the record, at this point?
The Chairman. Yes.
Senator Symington. I would like to ask if we could get into
the record when feathers were put on the stockpile list, and
how much in weight and money, especially money, it was decided
to get, who placed feathers on the stockpile list, specifically
what agency, and who signed it for that agency, what percent of
the total of the stockpile requirement has been filled, and
what remains to be filled. I am just trying to follow your
thinking.
The Chairman. It is very good to have you do that on the
record.
Senator Symington. And why there were two agencies buying.
Presumably it was because one was using it for current
consumption and the other was stockpiling. But what was the
agreement between those two agencies with respect to holding it
down, for the benefit of the taxpayers?
The Chairman. Could you make a note of that?
Mr. Flanagan. We will have it on the record, Senator.
The Chairman. At this time I would like to ask about one
particular contract. There is an organization known as the
Northern Feather Works. Am I correct that that firm has one
branch in Europe, one in China, and a branch in New York?
Mr. Willi. Yes, sir. The main office is in Denmark.
The Chairman. Denmark. And they have a branch in China?
Mr. Willi. As I understand, Hong Kong and New York.
There may be others, but those are the ones of which I have
knowledge.
The Chairman. Now, in your capacity as an attorney for the
OPS, I understand you have examined the details of that
particular contract. Is that right?
Mr. Willi. Yes, sir. That was the only contract, to my
knowledge, that was held by the main office. The New York
subsidiary, in its own right, had some other small contracts,
but this one was the only one held by the main office.
Moreover, it seemed to me unique in the respect that it was the
only contract that I ever found over there that was a cost plus
fixed fee contract, rather than a contract providing an
absolute price for the finished goods purchased.
The Chairman. How many pounds did that call for,
originally?
Mr. Willi. Originally, the contract, as entered into in the
summer of 1951, provided for the purchase by Northern of
500,000 pounds of waterfowl feathers, which were to be
processed through, and whatever the 500,000 yielded--that was
in the raw state, however.
The Chairman. You, I understand, checked through the books
on this particular project?
Mr. Willi. Yes, sir, we checked through the records.
The Chairman. Try to keep your answers as brief as you can
until we get the complete picture here, but make them adequate.
You did check through the books?
Mr. Willi. Yes, the GSA records.
The Chairman. And did you discuss with Mr. Hewitt this
particular contract?
Mr. Willi. I do not recall that I did. I discussed it with
Mr. Wilder, who was the assistant to Walsh, the commissioner of
the Emergency Procurement Service.
The Chairman. You mentioned Mr. Hewitt's name. He was the
man in charge of procurement of feathers?
Mr. Willi. That is right.
The Chairman. Mr. Downs Hewitt; is that right?
Mr. Willi. Yes, sir.
Senator Potter. An appropriate name.
The Chairman. And Mr. Wilder's job: what connection did
that have with Hewitt?
Mr. Willi. As best I can understand, he was above Hewitt.
He was the first assistant to Mr. Walsh, the commissioner of
the service.
The Chairman. At any rate, did you try to find out from GSA
officials what the feathers were costing under this cost plus
contract?
Mr. Willi. Yes, sir, I made my first inquiry to Mr. Wilder,
who in turn referred me to a gentleman by the name of Fuller,
with whom I had had no previous contact.
I consulted with Mr. Fuller. I consulted with everybody who
was available to try and find out at the time, which was in
June of 1952, what actually the end product had cost GSA under
this contract.
The Chairman. Did anybody ever tell you what the end
product was costing them?
Mr. Willi. No, sir.
The Chairman. And did they subsequently increase the amount
of feathers you obtained under that cost plus contract?
Mr. Willi. Yes, sir, they increased it, but in terms of
time it was done before I got notice of the existence of the
contract, so that when I found the contract over there and
commenced making these inquiries, the amendment had been
executed.
The Chairman. So the contract, as far as you know, was for
half a million pounds to begin with?
Mr. Willi. Yes, sir.
The Chairman. And then when they did not perform it in the
time limit set, GSA extended the time?
Mr. Willi. No, sir, they increased the quantity to three-
quarters of a million pounds, and increased the time for
delivery.
The Chairman. So that both the quantity and time were
increased?
Mr. Willi. Yes, sir.
The Chairman. And this was at a time when they did not know
what the product was costing?
Mr. Willi. That is what they indicated to me, yes, sir.
The Chairman. The Denmark branch of Northern Feather Works,
the Denmark branch of the corporation, had to purchase the raw
product? Where did they get the raw products?
Mr. Willi. Under the original contract----
The Chairman. Where were they getting the raw product, if
you know?
Mr. Willi. They were in two different places, sir.
Under the original contract, they were to buy approximately
half European goods and half Chinese. To the extent that they
purchased Chinese goods under the original contract it appeared
that they purchased them through their Hong Kong branch,
almost, you might say, from their Hong Kong branch. Their
contract provided that their Hong Kong branch should get a
buying commission and in turn transship them to Copenhagen for
process.
The Chairman. The European corporation purchased them
through their Hong Kong branch and then shipped them to New
York?
Mr. Willi. To Copenhagen, and then finally, after they were
finished, they got to New York.
The Chairman. Did you compare the price that they were
paying their China branch with the actual market price on
feathers at the time they were doing the buying?
Mr. Willi. In that connection, we found that in early
April, I believe it was, in several instances, raw China duck
feathers, f.o.b. Copenhagen, which they had bought from their
Hong Kong branch, were being billed into GSA at approximately
$1.90 a pound when, concurrently, at the Port of New York, the
market quoted for the same type feathers was approximately
ninety-five cents to a dollar a pound. That was on raw
material.
The Chairman. Did you ever talk to Hewitt about his
knowledge of the raw material market, that is, on feathers?
Mr. Willi. Yes, sir. Moreover, I had occasion to be present
when other people in GSA queried him as to what the level was
on these raw feathers, and in addition to that, I have had
statements forthcoming to me, again from people in GSA, saying,
``We asked Mr. Hewitt what the market was, but he said he
didn't know. Do you know?'' That happened quite a bit after I
left GSA.
Senator Symington. Who was Mr. Wilder?
Mr. Willi. He appeared to be the first assistant to Mr.
Walsh, the commissioner of the service.
Senator Symington. What was the distinction between the
Emergency Procurement Service and the GSA?
Mr. Willi. That was a unit, I understood, that had been set
up.
Senator Symington. And who was the boss of that?
Mr. Willi. Mr. Walsh.
Senator Symington. And where did Hewitt relate to Mr.
Walsh?
Mr. Willi. Mr. Hewitt was one of several buyers, purchasing
officers.
Senator Symington. Operating for Mr. Walsh in emergency
procurement?
Mr. Willi. Yes, sir.
Senator Symington. Thank you.
Mr. Flanagan. As a matter of fact, Mr. Downs Hewitt--his
first name is Downs, is it not?--was in direct charge of the
feather purchasing program?
Mr. Willi. That is true.
The Chairman. Then am I correct in this--that this man,
Downs Hewitt, who was directly in charge of negotiating the
contract for the finished product, feathers--you heard him
queried a number of times by GSA officials; he was queried by
you as to the market on raw feathers, and he indicated he did
not know anything about that market, even though he was
negotiating the contract?
Mr. Willi. Yes, sir, that was something that could not be
determined, and that he had no knowledge of it.
The Chairman. Just one other particular case, and I will
turn this questioning back to counsel.
As I recall, there was some case that Mr. Hewitt contacted
you on, a case you related to the staff the other day, in which
money was advanced and the feathers not delivered.
I wonder if you could tell the senators the details of that
particular transaction, if you recall which one I am talking
about?
Mr. Willi. One of the devices that was peculiarly employed
by the General Services Administration--I say peculiarly,
because the person doing business with the Quartermaster Corps
was not afforded a similar benefit--was a system of advance
payments, in which the contractor, the person who had gone to
GSA and taken a contract to supply a certain quantity of
feathers, was entitled, under a clause of that contract, upon
acquisition of raw feathers with which to fill the contract, to
present to GSA commercial documents evidencing his ownership,
an ocean bill of lading, any of a number of other commercial
documents, and upon presentation of such evidence, he was to
receive, depending upon the clause in the respective contracts,
from 75 to 90 percent, as the case may have been, of the
finished goods' value that the contract provided for. In other
words, if a contract provided for a particular type of feathers
at $3 a pound, upon his acquisition of the raw feathers
overseas and presentation of these documents, he would get 375
percent of $3 at that time, entirely independently of any
deliveries of finished goods.
The particular case, I believe, Senator----
The Chairman. Let me interrupt you right there. Then we
will say that the raw product was being purchased at $1.50, a
pound. He would be advanced on the basis not of the dollar and
a half that he had invested but on the basis of the finished
products, and he would be actually getting more money from GSA
than the raw product cost him?
Mr. Willi. That is the way it worked out. I don't believe
it was intended so, but in many instances that was the effect
of it. He was not only reimbursed to the extent that he had
laid out money for his raw feathers, but he, in addition, in
most instances, had an operating bulge there, over and above
his out of pocket cost for the raw feathers.
The Chairman. Did you find that some of those feather
merchants had no financial position whatsoever?
Mr. Willi. We were so advised, yes, sir.
We further learned that contracts were in some instance
given to people who had no plants, no processing plants.
As I recall, and in the best of my understanding, no
obligation was required to be fulfilled with respect to
financial responsibility.
The Chairman. There was no bond given, as far as you know?
Mr. Willi. To my knowledge, no, sir.
Senator Symington. Could I ask a couple of questions there,
Mr. Chairman?
You talk about the finished product and the raw product.
Presumably this went to a processing plant?
Mr. Willi. Yes, sir.
Senator Symington. Was the buyer a jobber, or an operator,
or did he have any relationship with the processing plant?
Mr. Willi. Well, in the main, they were the processors. It
was just that in some instances contracts were, in fact, given
to people who did not even have plant facilities, who would
turn around, bring their feathers in, and release them to an
independent contractor for processing.
Senator Symington. If he was a processor, he would probably
have some financial stability, wouldn't he?
Mr. Willi. Well, as to that, Senator, the only thing I can
say is that in one instance, I think a feather concern by the
name of Sanitary Feather and Down, that probably received more
financial assistance from GSA than any other that we came
across--a Dun and Bradstreet report on that firm was submitted
to me voluntarily, and that indicated that prior to their
regaining this government business with the General Services
Administration, they were not insolvent but in quite serious
straits.
One of the people advised me that the New York feather
people--I didn't investigate this independently--had been
recently in bankruptcy.
Senator Symington. Let me ask you another question.
Inasmuch as you were, in effect, purchasing a production
article, why do you have a cost plus fixed fee contract?
Mr. Willi. That I couldn't answer you, Senator.
When I inquired about the unique nature of the contract, it
was described to me that it was something that had been top
secret in a sense that there had been some negotiation that was
out of the ordinary generally.
The Chairman. Would you proceed to give us the picture of
this?
Senator Jackson. May I interrupt to ask a question somewhat
along the lines of Senator Symington's?
Pursuing this point about the advancement of the funds with
the presentation of the bill of lading and other documents of
title, what is the custom in handling this type of purchase, in
normal business and trade channels, do you know?
Mr. Willi. Well, I would assume, with the exception of
pledging a warehouse receipt in a bank or something like that,
that ordinarily the processor, the purchaser here, would bear
the cost of his inventory just himself.
Senator Jackson. What I was trying to get at was whether
this was an unusual thing or whether it was customary, in the
trade.
Mr. Willi. As to that, sir, I would guess that it was
unusual, but what I meant to indicate in this context, by the
term ``unusual,'' was that no similar benefit was provided for
a man, for example, who was selling to the Quartermaster Corps
any of these finished products. There was no provision for him.
Senator Jackson. You mean the other procurement agencies of
the government did not make that same arrangement?
Mr. Willi. That is right.
Senator Symington. As I understand the point he is trying
to make is that if the feather cost was a dollar and a half for
the raw product and the final product was $3, if the law says
75 percent to 90 percent, if he gets 90 percent of $2, he gets
$2.70. So he has a dollar and twenty cents to play within his
working capital in addition to the amount he has to put up for
the purchase. So he is being financed for his working capital
by the government.
The Chairman. I do not think there is any law on that. I
think that is a GSA rule.
Senator Jackson. A regulation.
Mr. Willi. Senator, the spread isn't that wide. You see, in
the billing the person holding the GSA contract will estimate
how much finished goods he will get out of this $1.50 lot of
raw goods he bought. He will make a guess. And he bills them.
The bill that comes to GSA would appear to be a bill for the
delivery of finished merchandise. And the finished merchandise
figure that is stated on that bill, of which 75 percent is paid
is in effect an estimate by the contractor as to how much
finished material this particular lot that he is getting
payment on is. So there is a yield adjustment in there, but not
withstanding, a review of the records indicated that even with
the yield adjustment, there still was, not a tremendous gap,
but there still was an advance in excess of the actual out of
pocket cost.
In other words, the thing was not stated so that you shall
receive in any event no more than your out of pocket cost for
the raw feathers.
Senator Jackson. In other words, it was apparently a
violation of the regulation here, of the GSA regulation?
Mr. Willi. No, sir, not to my knowledge. The case I think
that the senator was referring to developed later on in this
way. This particular contractor had a contract for some China
material. The firm was Barclay Home Products. The contract was
General Services Administration's contract 1573. A part of this
contract was a provision for advance payment.
Senator Jackson. But that advance payment was to take care
of his out of pocket expense, that is the point, not to take
care of the entire finished product.
Mr. Willi. Well, I don't know what the intention of the
payment was, sir.
Senator McClellan. The practical result was this: on the
basis of the contract, where they were to purchase and deliver
so much finished product--now, as they purchased the raw
product, they gave an estimate to GSA of how much that would
produce in finished product?
Mr. Willi. That is right, sir.
Senator McClellan. And then collected from GSA 75 to 90
percent of what the estimated value would be under the contract
of the finished product?
Mr. Willi. That is right, sir.
Senator McClellan. The result being, as you found, as I
understand it was estimated, that when they did advance 75 to
90 percent of the estimated value under the contract of the
finished product, that advance was greater than the present
investment?
Mr. Willi. Yes, sir.
Senator McClellan. That the procuring firm had expended in
acquiring the raw product?
Mr. Willi. That is true, sir. I wouldn't say that that was
uniformly true, but there was evidence of that.
But that was not the feature of it that was disturbing.
Senator McClellan. What is the disturbing feature?
The Chairman. I think if he relates this case he has in
mind, that will bring that out.
Mr. Willi. Again, on this Barclay contract here, the
contract provided for the sale of China material. The contract
was in the process of performance during the time that a
specific ceiling was applicable to the commodity concerned.
The delivery date had passed on the contract. Each of these
contracts provided for delivery by a certain time, and
subsequent to the passage of the delivery deadline, an
amendment was put out to this regulation removing a previously
existing saving clause affecting these GSA contracts.
At any rate, the nub of it was that by virtue of these OPS
regulations, this contract could not, having lapsed, be legally
continued at the prices for which it provided.
Mr. Hewitt, in late April or early May of 1952, came to the
OPS office, in the company of the attorney of the seller, to
say that an exception shall be made so that this contract could
be performed. He gave as the reason for this exception the fact
that this firm at that time had received advances considerably
in excess of the value of the finished material that GSA had
received under the contract. And, accordingly, that we should
at least permit performance in a sufficient amount to let GSA
get enough finished goods to offset their raw material
advances.
The Chairman. Let me interrupt if I may, George.
The reason that OPS at that time objected to the completion
of that contract, as I understand it, was because the contract
called for a price considerably above the price ceiling?
Mr. Willi. That is right, sir.
The Chairman. And he said, ``Let us complete this contract
because we have already advanced more money than covers the
amount of finished product that we have received?''
Mr. Willi. That is right. I think the gap approximated a
hundred thousand dollars. It may not have been quite that
great--between what had been put out and the value of the goods
received.
Senator Symington. Could I ask a question there?
Was there any effort made to adjust the fulfillment of the
contract by delivery of goods against the money advanced on the
basis of the ceiling price, or did Mr. Hewitt arrange it so
that the price for the feathers was on the basis of the price
above the ceiling price?
Mr. Willi. Oh, he was talking in terms of performance at
the contract price, which was higher than ceiling.
Mr. Flanagan. One point, if I may interrupt again. Would
that indicate that the fact that they did not furnish the
finished product in accordance with the contract, would that
indicate that some of the feathers had possibly been diverted?
Mr. Willi. Well, going to that point, as a consequence of
Mr. Hewitt's request and all, I became quite concerned about
the contract, because I didn't feel that they were entitled to
special treatment, in that we had at that time discovered that
this contractor had falsified documents presented to OPS over
there, and generally it did not seem should be accorded any
special treatment.
Our solution was, and our recommendation: You give them
back these feathers that you have taken as a basis for your
provisional payment and tell them to give you your money back
and everything will be squared away.
Well, I brought the matter to the attention of the chief
counsel's office in the Emergency Procurement Service, a Mr.
Kurzius. Mr. Kurzius, I think it is fair to say, was of the
same opinion that I was as to what the disposition of that
thing should be that would be most favorable to GSA.
In any event, however, Mr. Kurzius subsequently advised me
that upon examining into this situation it was found that they
were unable to locate the feathers upon which Barclay had
predicated its request for the provisional payment.
I can't say where, or what happened to them, or anything on
that, because at that stage of the game the Barclay plant is up
above New York, and I did not have physical contact with it.
But, moreover, Mr. Kurzius advised me that upon calling in the
president of Barclay and his attorney, the president admitted
to them that he had been unable to secure goods of the type
called for by the contract, and accordingly had falsified the
description of what feathers he had used in order to get from
GSA this advance payment.
Senator Jackson. And is that the reason why GSA advanced to
Barclay more than the price of the finished product?
Mr. Willi. No, I wouldn't say that, in itself, sir, was
unusual.
Senator Jackson. How did GSA get in that position, then?
The Chairman. Mr. Jackson, may I clarify the point and see
if this is correct?
GSA had advanced the money on the entire contract, and
Barclay had delivered only part of the contract at the time Mr.
Hewitt contacted Mr. Willi.
Senator Jackson. Mr. Chairman, was that for the finished
product?
The Chairman. Yes, they advanced money on the full
contract, the 75 to 90 percent, Barclay had not performed the
entire contract. Therefore, he was overpaid.
Senator Jackson. Why did they make the exception here in
advancing the whole business in this contract?
Mr. Willi. I don't know, sir, that they had advanced the
whole business, but that was not an unusual condition. You see,
they always advanced money before they received any finished
goods. As a matter of fact, in one instance where a contract
provided for a 75 percent advance on the finished goods price,
GSA Contract No. 1261 will show an initial memorandum that I
discussed with Mr. Hewitt in January, I believe it was, of
1952, showing where one contractor, in the absence of having
delivered a pound of anything in finished state under the
contract, had received some $30,000 more than 75 percent of the
total contract quantity.
Now, that, to my knowledge, is still in the files over
there.
Mr. Flanagan. What company is that?
Mr. Willi. That was the Purified Feather and Down Products
Company, Contract 1261. That was discussed with Mr. Wilder and
Mr. Hewitt, and the last time I saw the contract docket, my
typewritten notation with Mr. Hewitt's initials is in that
contract docket.
Mr. Flanagan. Now, is it not true that when the government
would take these partial advances, they in theory at least took
title to the feathers, to the raw feathers?
Mr. Willi. That is what the contract provided.
Mr. Flanagan. And so, when you ended up with cases where
feathers were not delivered or substandard feathers were
delivered, it was really the government's feathers that were
being wasted?
Mr. Willi. According to the terms of the contract the
government took title to them.
Senator Jackson. What about insurance and other warranties?
Mr. Willi. The contract provided, Senator, that not
withstanding that title should pass to the government, the risk
of loss should remain with the seller.
Senator Jackson. Remain with the seller?
Mr. Willi. Yes, sir.
As an attorney, I would say that even though the contract
provided that title passed, I don't believe that it could have.
You see, they were executory contracts. The goods weren't in
being or anything else. The contract did say title should pass.
Senator Jackson. But the substance of it would indicate
that title had not passed. I mean even though they said it had
passed, by reason of all these other conditions in the
contract, and being an executory contract, and in some cases
with the contract not in being, it would be questionable, would
it not?
Mr. Willi. Yes, sir.
Senator Jackson. But were there any arrangements for
insurance? What about the case of loss after title is supposed
to have passed?
Mr. Willi. I would have to suggest an examination of the
contracts.
Senator Jackson. And no provision regarding the warranty of
the product? I mean, an insurance provision, that in case the
product did not meet the specifications as stipulated in the
contract, the government would have some means of compensation?
Mr. Willi. Senator, that leads into another point, and that
one which I would discuss, namely, that the facts showed that
when finished goods were tendered to GSA in performance of a
contract and were found to be substandard, the contract was
amended to provide for the acceptance of substandard material,
at prices in excess of the ceiling price and standard grade
material.
Senator Jackson. In other words, they just modified it as
they went along, to take care of the seller, in some of these
cases anyway.
Mr. Willi. It would appear so.
Senator Jackson. Would you say that there might have been
some negligence on the part of someone in preparing these
contracts and in representing the interests of the government,
the best interests of the government?
Mr. Willi. I would rather say, Senator, that in any event,
the situations that took place on this commodity after 20
January 1952, at the very latest, could not, as a fair matter
have been the result of ignorance or mistake.
Senator Jackson. A little more than maybe gross negligence?
Mr. Willi. I am not making any conclusions, Senator.
Senator Jackson. You are an attorney, I take it?
Mr. Willi. Yes, sir.
Senator Jackson. Well, do you think the people who were
preparing these documents for the government were protecting
the best interests of the government in the same manner and to
the same extent that an attorney should look after his own
private clients' interests?
Mr. Willi. Senator, on that point I would like to say this.
A great deal of the information which became available to me in
GSA was directly attributable to the cooperation with me of
this Mr. Kurzius, who was in the legal department there. I
found him in every respect a man who was trying his best to
protect the interests of the government. I got the impression,
however, that in many instances he was not consulted.
Senator Jackson. Did he draft these contracts?
Mr. Willi. Well, Senator, in the main, a standard contract
was used, a printed form contract. On that score, illustrative
of what I mean by saying he was not consulted, we found
evidence of one contract with L. Buchman, B-u-c-h-m-a-n,
contract 3196, where an amendment to the contract had been
made, again to provide for the acceptance of inferior material,
without a legal reduction in price. We found that that
amendment had been tendered by Mr. Hewitt to the legal office
there for clearance, had been cleared by the legal people, had
been returned to Mr. Hewitt, and had been altered prior to
sending it out to the contractor for his execution.
Senator Jackson. Well, a private purchaser would not
tolerate what the government went through in these various
transactions, would you say?
Mr. Willi. Well, I wouldn't think he could afford it.
Senator McClellan. Let me ask you one question.
Is this unusual that this practice prevailed in the
procurement of this commodity or product, where the government
advances beyond a percentage of the value of the raw product
acquired?
Mr. Willi. Well, it struck me as such, Senator, but I had
no background of experience. I called it to their attention,
and they indicated that it wasn't unusual.
Senator McClellan. My limited experience and observations
on warehouse receipts is that the government only advances a
percentage of the original cost of the raw material to the firm
that is contracting to sell.
Take the RFC [Reconstruction Finance Corporation]. In my
state, we have a number of sawmills, a lumber industry that
borrows operating capital from the RFC maybe, or maybe from a
bank, and the RFC or the bank advances a percentage of the cost
of the raw material that is warehoused. I have never known in
those instances where they advanced in advance a percentage of
the cost of processing that raw material. That is the thing
about this that seems out of line and unusual. Now, again, we
are dealing here with a critical material. I do not know
whether that makes an exception or justifies an exception to
general practice or not. What would you say about that?
Mr. Willi. Well, definitely, Senator, the amount of the
advance was not determined by reference to the cost of the raw
material.
Senator McClellan. Well, I understand that. It was
determined by the estimated amount of finished product the raw
material would produce.
Mr. Willi. That is right, based on the finished product
price.
Senator McClellan. Based on the finished product price to
the government. It was advanced on that basis.
Mr. Willi. Yes, sir.
Senator McClellan. And that seems to me, as I am pointing
out, the thing that is most unusual. Certainly it is most
unusual as to the noncritical products and commodities, I would
say.
Mr. Willi. On your question, Senator, I just wouldn't be
competent to say whether it is done anywhere else or not. I can
say I never have known of its being done, of course.
Senator Jackson. We ought to be able to get that
information as to whether it is customary in the trade.
Senator McClellan. I was just sort of summarizing my
thoughts as we went along here.
That is, unless it could be justified as a practice that is
sometimes followed in the acquiring of critical materials.
The Chairman. Just one question, and then the GSA, I think,
may be able to answer Senator McClellan's question.
Mr. Willi, in the case of Barclay Products, see if I have a
correct review of the facts in mind.
Number one, he tendered apparently a bill of lading or
something showing that he was in possession of feathers of a
certain grade. He was then advanced money based upon the cost
of the finished product. He then proceeded to deliver some
feathers of a different grade, and at the time you were
discussing the matter with Mr. Hewitt, GSA still had due from
him a sizable number of pounds of feathers under the original
contract. Right?
Mr. Willi. Yes, sir. Approximately 75 percent.
The Chairman. Pardon me. Then see if I am correct. You then
conducted an investigation to see if you could determine where
the feathers went to. Then you did some checking I understand,
to find out whether the feathers covered by the original bill
of lading were still in existence and available or not. Did you
do that?
Mr. Willi. No, sir. That checking was done by the General
Accounting Office, as I understood it, and by Mr. Kurzius,
apparently, himself.
The Chairman. All right. At least, to your knowledge,
somebody attempted to find out where the other feathers
disappeared to if they had disappeared. Am I clear that on the
basis of what you found out and what you learned from others
who made some semblance of an investigation, this had been
converted to some use other than the government's use?
Mr. Willi. The last advice I had was that they couldn't
find the feathers.
The Chairman. Now, as far as you know, has Barclay been
called upon to furnish the type of feathers called for in the
original contract?
Mr. Willi. That would have been an impossibility, Senator.
The feathers described in the original contract were China, and
the Treasury Department refused to permit the importation of
any more Chinese feathers after January 16 or February of 1952.
The Chairman. Let me ask you this. Do you know whether the
GSA has ever attempted to recover from Barclay?
Mr. Willi. I had several inquiries from GSA people who were
assigned the contract for disposition, asking me what I would
do, and I told him I would give him whatever feathers there
were, and get the advance money back. But, to my knowledge,
nothing has ever been done.
The Chairman. Let me ask you this. In view of the fact that
this man apparently had an agreement with GSA that title would
pass to GSA when he got the money, although he would remain in
physical possession, and considering the fact that he has
apparently converted the feathers to some other use, in your
opinion as an attorney, would or would not that make him
criminally liable?
Mr. Willi. Unquestionably, if that were the fact.
The Chairman. May I ask the general counsel for GSA to give
us a report on that particular case, giving it to Mr. Flanagan
or Mr. Cohn at your earliest convenience?
Mr. Elliott. Yes, Senator.
There is one point I would like to clarify. As far as I
know, there is never a case where one of the Marshall payments
are made on feathers not existing. The payments are made on
delivery on shipboard, on common carrier, so that there are
feathers in existence when a partial payment is made. There may
be cases where feathers don't come up to specifications, but
there are specifications of certain feathers being delivered on
shipboard out of the contractor bands. They will then get back
into the contractor's hands when they get to the processing
point in the United States.
Mr. Willi. What I mean by the goods not being in being is
that the goods described in the contract were not in existence.
The Chairman. I think we all understand that when the raw
feathers are delivered aboard a ship, the man who owned them
having presented the bill of lading to the GSA and received
certain advances, the agreement was that title to those
feathers aboard the ship passed to GSA as a finished product.
The owner had the duty of finishing the product, had the duty
of assuming the risk. In this particular Barclay case, as I
understand it, at some time feathers were aboard a ship. He
presented the bill of lading, either real or fictitious, and at
some later time, it apparently was discovered that the feathers
were no longer in either his possession or the possession of
the government. They had been either converted and had
disappeared, or were not aboard the ship in the first place.
That is, roughly, the picture, is it not?
Mr. Willi. That was my advice, yes, sir.
Senator Potter. In this case, did Barclay operate the
production, or the finished product?
He was not just the importer?
Mr. Willi. No, sir, he was the processor.
Senator Potter. He also processed the feathers for the
finished product?
Mr. Willi. Yes, sir.
Senator Symington. May I ask the general counsel of GSA: Is
it standard practice, following Senator McClellan's point, to
make advances to the point where the seller receives more money
than the cost of the finished article?
The Chairman. I think we have a rule that every witness who
testifies must be first sworn. So we will swear you, Mr.
Elliott.
In this matter now in hearing before this committee, do you
solemnly swear to tell the truth, the whole truth, and nothing
but the truth, so help you God?
TESTIMONY OF MAXWELL H. ELLIOTT
Mr. Elliott. I do.
I would say this, Senator Symington. In general, I think
our purchasing people try to make a rough estimate on the
amount or percentage of the partial payment they will allow in
terms that they think the raw product bears to the finished
product. Now, sometimes they will miss their guess and go over.
It isn't precisely to the actual cost of the finished product.
And in answer to Senator McClellan's question, of course
the value may not necessarily be the same as the cost.
Senator McClellan. Of course, the safer procedure and
practice would be to pay only a percentage of what the seller
has expended in obtaining the raw product. That is the safe
procedure, no doubt.
Mr. Elliott. It is, Senator, if it is possible to find that
out. In some cases it is not, especially when you are dealing
with materials that are coming from behind the Iron Curtain. We
don't know and don't have a means of knowing, in many cases,
just how much they actually pay for those feathers. There are a
lot of under-the-table deals, a lot of smuggling, and so on.
Senator Symington. But you know what you are paying for
them. And if you know what your cost is, why do you advance
anything beyond your cost? Otherwise, you are just giving them
a financial loan that has nothing to do with the product.
Mr. Elliott. Well, Senator, we know what we are paying them
for finished goods. We don't know what they pay for the actual
raw feathers. What our people try to do is to take a percentage
of the finished goods and apply what they think is the value of
the raw feathers to the finished product.
Senator Symington. Then what you are really doing is
backing their effort to get you something.
Mr. Elliott. If we go too high we are backing it, that is
correct.
Senator Symington. I see.
Mr. Elliott. But as you know, in some of your own dealings,
sir, in connection with the RFC, when you have to get materials
from behind the Iron Curtain, and you are sitting on these
various committees, we don't know what these brokers, let's
say, over in Denmark, have to pay to, maybe, the Polish or
Hungarian government officials.
Senator Symington. I do not remember having anything
purchased in the RFC or any money lent in the RFC to anybody
behind the Iron Curtain. I may be wrong on that, but I do not
remember the RFC buying anything behind the Iron Curtain.
Mr. Elliott. I thought possibly you had been able to get
some tin out. I wasn't sure.\2\
---------------------------------------------------------------------------
\2\ On January 28, 1953, Harry A. McDonald, administrator of the
Reconstruction Finance Corporation wrote to Senator Symington:
You expressed interest in receiving a statement from us regarding
the sources of tin-in-concentrates which the RFC has purchased since
May 1951.
First of all, we have made no purchases from behind the ``Iron
Curtain.'' I am advised that China is the only significant supplier
within the Soviet orbit and the RFC has made no purchases from that
source since the Communists have been in control there.
Since May 1951, and as a matter of fact for some time previous to
that, the RFC has purchased tin and/or tin-in-concentrates from
Bolivia, Belgian Congo, Indonesia, Siam, Portugal, Mexico, Great
Britain and Alaska.
I trust this is the information desired but, if not, please let me
know.
---------------------------------------------------------------------------
Senator Symington. Not that I know of.
Mr. Willi. If I may. I would like to clarify this point
about not knowing what the raw material cost. I will concede
that any side payments or under-the-table deals were not a
matter of record. However, from the month of March 1951 on,
until licensing by the Treasury Department was suspended
entirely, in January or February 1952, it was required of every
person wishing to transfer United States money in payment for
goods of Chinese origin, which covered these China duck
feathers, to first go to the Treasury Department, the Foreign
Assets Control, and secure from them a license. Naturally, that
license, the amount of it, was determined by the number of
units and the price per unit of what was being bought. So that
as to every importation of China goods, the importer had to
declare, as a matter of record, to the Treasury Department,
what he was paying for them.
Secondly, based upon my review of the records of the
General Services Administration in New York, in every instance
where waterfowl feathers were cleared through customs through
the Port of New York, the records in the GSA office there will
show the overseas supplier the type, the quantity, and the
price paid for the feathers imported.
As I say, as to side payments, or something, I don't know,
but there were commercial documents or Treasury license
materials indicating the out of pocket cost, the apparent out
of pocket cost, of the raw feathers.
The Chairman. May I for ten minutes impose upon the
patience of the committee? I would like to adjourn at 11:30 if
we could. And I would like to let counsel bring out some items
that I do not have in mind and I do not think any of us have,
if we can do it without interrupting for about ten minutes. And
if you will try to move as rapidly as you can, Mr. Willi,
without too much detail, we can fill it in later.
Mr. Cohn. Mr. Willi, when did GSA first start purchasing
waterfowl feathers?
Mr. Willi. The first contract was December 6, 1950 with the
Empire Feather and Down Company.
Mr. Cohn. Now, between December 6, 1950 and the time when
this first came to your attention in the spring of 1951, in
those three or four months, what happened to the price of the
waterfowl feathers?
Mr. Willi. The raw feather prices, as best we could
determine them, rose approximately 50 percent on all types.
Mr. Cohn. When GSA started buying, the price went up in
that amount in those three or four months?
Mr. Willi. That is right.
Mr. Cohn. By the way, you have told us China was one of the
sources. Were there any Iron Curtain countries which were
sources other than China?
Mr. Willi. Yes, Poland, Hungary, Czechoslovakia. Those were
the principal Europeans.
Mr. Cohn. And in the case of Poland, Hungary, and
Czechoslovakia, am I correct in stating that the money in this
country went directly to those countries, to official trading
agencies in those countries, rather than private individuals?
Mr. Willi. Yes, they were state trading corporations that
sold the feathers to the processors here.
Mr. Cohn. And, of course, those agencies benefitted from
the increase in prices?
Mr. Willi. I would assume so.
Mr. Cohn. In April of 1951, was it suggested to you that a
ceiling price be fixed on waterfowl feathers?
Mr. Willi. Yes, the industry suggested it. The Defense
Department strongly urged it, on the ground that the costs of
their sleeping bags were rising, out of control. And
accordingly they requested ceilings.
Mr. Cohn. And, of course, at this point there was a freeze
order and the only purchase were from official government
agencies?
Mr. Willi. That is right, GSA and Quartermaster.
Mr. Cohn. Was GSA consulted on whether a ceiling price
should be fixed?
Mr. Willi. Yes, extensively.
Mr. Cohn. And who represented the GSA in those
negotiations?
Mr. Willi. Mr. Downs Hewitt, primarily.
Mr. Cohn. And what was Mr. Hewitt's position on whether or
not a ceiling price should be fixed?
Mr. Willi. Generally his position was that it was alright
to set ceilings, but there should be no ceilings on GSA
purchases. He reasoned it was an insignificant item in the cost
of living, that type of thing, that any ceiling would very
probably impair and binder his procurement of this strategic
material.
Mr. Cohn. He did not want a ceiling for GSA orders?
Mr. Willi. That is right.
Mr. Cohn. And did he and his agency persist in that
position?
Mr. Willi. Yes, Mr. Larson sent a letter to Mr. DiSalle,
dated August 20, 1951, generally outlining the difficulties he
envisioned if his contracts became subject to ceilings, and
moreover, recommending decontrol.
Mr. Cohn. Recommending decontrol. And very briefly, why was
he opposed to a ceiling price?
Mr. Willi. Well, as he states in his letter, he says as to
other commodities the imposition of a ceiling price has wrecked
his procurement and necessitated his coming forth and demanding
decontrol so that he could continue his operations.
Mr. Cohn. Was the Defense Department heard from on this?
Mr. Willi. Yes, Mr. McBrien, then a Munitions Board member,
strongly recommended the establishment of the ceiling.
Mr. Cohn. And after that, that was put into effect?
Mr. Willi. That is right.
Mr. Cohn. CPR-87?
Mr. Willi. CPR-87.
Mr. Cohn. Effective what date?
Mr. Willi. October 19, 1951.
Mr. Cohn. Did this order contain what was known as a
savings clause?
Mr. Willi. Yes, in order to accommodate these outstanding
contracts which Mr. Larson indicated the contractors had bound
themselves for the raw material with which to complete; and
since he told us of the level of prices in those contracts, and
it was apparent that our ceilings were going to roll those
prices back approximately 12 to 15 percent across the board, we
provided this exception for existing GSA contracts.
Mr. Cohn. In other words, on any raw material, that these
people with whom GSA had contracted, on any raw material which
the contracts had either purchased or contracted to purchase
prior to October 19th, they were exempted from this ceiling
price?
Mr. Willi. That is right, to the extent that they delivered
such material, they could receive a contract price for it even
though that contract price were higher than the otherwise
applicable ceiling.
Mr. Cohn. And you have told us, as a matter of fact, it was
some 12 to 15 percent higher?
Mr. Willi. Lower.
Mr. Cohn. I am sorry. The ceiling price was 12 to 15
percent lower than the contract price?
Mr. Willi. That is right.
Mr. Cohn. Now, in the month of December 1951, a couple of
months after the ceiling price went into effect, did you make
an investigation to determine in what manner the ceiling price
had affected the GSA contracts?
Mr. Willi. Yes, we did. The first thing we were interested
in was seeing whether in fact these ceilings had hampered GSA
procurement in terms of volume. We reviewed every contract
available to us entered into after the 19th of October 1951,
and up to approximately the first of the year 1952. We found
that in no instances did those contracts provide for prices in
excess of our ceilings, and the aggregate volume of goods
represented by such contracts was over three million pounds,
which appeared to us to be a rate of procurement at least equal
to if not greater than that of any prior comparable period when
these higher prices had been paid.
Mr. Cohn. So in other words, to sum up on that point, GSA
had told you that they didn't think the ceiling price should be
put into effect, because if it were they might have difficulty
in procuring these goods at the lower price?
Mr. Willi. That is right.
Mr. Cohn. Your investigation after the ceiling price went
into effect showed that GSA had, in fact, been able to purchase
this product at ceiling prices, and in fact the quantity they
had been able to purchase was equal to or greater than in the
prior period under the higher contract prices?
Mr. Willi. That is true.
Mr. Cohn. Now, as a matter of fact, had GSA, through Mr.
Hewitt, the opportunity to buy, to renegotiate, any of these
contracts, and buy at the price ceiling or lower?
Mr. Willi. Well, obviously, after the 19th of October, any
new contract could be at prices no higher than these ceilings,
so that to the extent that any of these pre-existing contracts
were terminated and a new contract let, why, there would be a
savings to the government of 12 to 15 percent.
The Chairman. I think what counsel had in mind, Mr. Willi,
was this: Was there any indication that Mr. Hewitt resisted
buying below the ceiling when he had an opportunity to?
Mr. Willi. Well, that, Senator, occurred later, in the
spring of '52, primarily; although there were some purchases
made below these dollar and cents ceilings even then.
Mr. Cohn. I want to ask you about the raw material for a
minute. Of course, the exemption, this saving clause, the
exemption of these people from the ceiling price, was merely
for the raw material, these raw waterfowl feathers which they
had actually bought or contracted to buy prior to October 19th;
is that right?
Mr. Willi. That is right.
Mr. Cohn. Now, you have told us, Mr. Willi, that around
December of 1950, you had access to these Treasury Department
licenses which contractors had to get before they could buy
from Iron Curtain countries, from China, in particular, and
that these applications for permission to import would show the
date on which this raw material was purchased, and the price at
which it was purchased. Is that right?
Mr. Willi. Always the price; in many instances the date.
Mr. Cohn. Now, did you study some two thousand of those
licenses?
Mr. Willi. Approximately all that were available to us at
the Treasury Department.
Mr. Cohn. As a result of your examination of those
licenses, did you reach any conclusion as to whether or not the
contractors involved had been billing the government for this
raw material on the basis of a contention on their part that
they had actually purchased or contracted to purchase prior to
October 19, when in fact the raw material had been purchased
after October 19th, when they should have received merely the
ceiling price?
Mr. Willi. Yes, those documents showed that in some
instances.
Mr. Cohn. And the government, of course, sustained a loss
based on those misrepresentations; is that right?
Mr. Willi. Yes. Better records, however, of that same
situation than that were in GSA's own files in New York. In
every instance, practically, there was indicated when the raw
material contractor had bought the raw material.
The Chairman. May I interrupt? It is 11:30 now. We will
adjourn this hearing without a date, and the committee will be
in recess until two p.m.
[Whereupon, at 11:30 a.m., the hearing was recessed to the
call of the chair.]
STOCKPILING OF STRATEGIC MATERIALS
[Editor's note.--Downs E. Hewitt (1894-1968) did not
testify in public session.]
----------
THURSDAY, JANUARY 29, 1953
U.S. Senate,
Senate Permanent Subcommittee on Investigations
of the Committee on Government Operations,
Washington, DC.
The subcommittee met, pursuant to Senate Resolution 251,
agreed to January 24, 1952, at 10:30 p.m., in room 357 of the
Senate Office Building, Senator Joseph R. McCarthy, chairman,
presiding.
Present: Senator Joseph R. McCarthy, Republican, Wisconsin;
Senator John L. McClellan, Democrat, Arkansas.
Present also: Francis D. Flanagan, general counsel; Roy
Cohn, chief counsel; Ruth Young Watt, chief clerk; Richard
Sinclair, General Accounting Office; Robert Cartwright, General
Accounting Office; Smith Blair, General Accounting Office;
George Willi, Department of Justice.
The Chairman. The hearing will be in order.
Mr. Hewitt, do you solemnly swear that the information you
will give this subcommittee will be the truth, the whole truth
and nothing but the truth, so help you God?
Mr. Hewitt. I do.
TESTIMONY OF DOWNS E. HEWITT,
BUREAU CHIEF, EMERGENCY PROCUREMENT SERVICE,
GENERAL SERVICES ADMINISTRATION
Mr. Cohn. Mr. Hewitt, will you give us your full name,
please?
Mr. Hewitt. Downs E. Hewitt.
Mr. Cohn. Where are you employed, Mr. Hewitt?
Mr. Hewitt. I work for the Emergency Procurement Service,
which is part of GSA, General Services Administration.
Mr. Cohn. I did not get the name.
Mr. Hewitt. With the Emergency Procurement Service, part of
the General Services Administration.
Mr. Cohn. For how long a period of time have you been
employed there?
Mr. Hewitt. I have been with them, speaking from memory,
approximately five years.
Mr. Cohn. And what salary are you earning at the present
time?
Mr. Hewitt. I am, what do you call it, GS-13.
Mr. Cohn. What is your salary?
Mr. Hewitt. Frankly, I do not remember.
Mr. Cohn. You do not remember what your salary is?
Mr. Hewitt. No, sir. I get $266 and some 60 cents, as I
remember, every payday.
Mr. Cohn. Is that every two weeks?
Mr. Hewitt. Yes, sir.
Mr. Cohn. You do not have any idea what your gross salary
is?
Mr. Hewitt. It is around $8,000, between $7,000 and $8,000.
I don't get it, so why carry it in my mind.
Mr. Cohn. You have to pay income tax on it.
Mr. Hewitt. Yes, sir, but I also--wait a minute, I can put
it in the record, I think. This is for last year, the earnings
and not the salary, but the checks received were $9,096.84.
Mr. Cohn. That is probably your gross salary, is that
right?
Mr. Hewitt. No, it is twenty-seven pays instead of twenty-
six; that was the earnings.
Mr. Cohn. That was for the year 1952?
Mr. Hewitt. Just concluded, yes.
Mr. Cohn. Prior to the time you went to your present
position, where did you work?
Mr. Hewitt. I transferred to them from War Assets
Administration.
Mr. Cohn. How long were you with war assets?
Mr. Hewitt. I have all of these records back home in my
records.
Mr. Cohn. Just give us an approximation.
Mr. Hewitt. Some two or three years.
Mr. Cohn. And before war assets, where were you?
Mr. Hewitt. Before war assets, Foreign Economic
Administration; and before that, National Youth Administration.
Mr. Cohn. All right.
What are your duties at the present time?
Mr. Hewitt. I am in charge of a purchase branch, the
agricultural commodities purchase branch.
Mr. Cohn. The agricultural commodities purchase branch, is
that right?
Mr. Hewitt. Yes.
Mr. Cohn. How much of government funds do you have
committed at the present time in all of your programs?
Mr. Hewitt. I don't have that information here. If you want
it, I can get it.
Mr. Cohn. Do you have an approximation of some kind?
Mr. Hewitt. Do you mean how much is committed at the
moment, or the average?
Mr. Cohn. Let us do it this way: How much did you spend
last year in government funds?
Mr. Hewitt. It is a hell of a lot of money.
Mr. Cohn. How much is ``a hell of a lot of money''?
Mr. Hewitt. All of the commodities--I am not prepared to
answer that except as a wild guess. It could be $100 million.
The Chairman. You were responsible for the purchase of
roughly $100 million yourself, is that correct?
Mr. Hewitt. My branch has handled that much, yes, sir.
The Chairman. And you are the head of your branch?
Mr. Hewitt. Yes.
Mr. Cohn. What is the largest program you are supervising
at the moment, the largest purchasing program you are engaged
in at the moment?
Mr. Hewitt. The largest active program in purchases at the
moment is probably castor oil.
Mr. Cohn. How much money does that involve?
Mr. Hewitt. The castor oil in the course of a year runs $20
million to $30 million.
Mr. Cohn. And you are in charge of that?
Mr. Hewitt. Yes, sir.
Mr. Cohn. What is the next largest? Give us two or three of
the main ones, if you will.
Mr. Hewitt. Well, this feather thing is a big thing.
Mr. Cohn. Is that still a big thing?
Mr. Hewitt. Yes, it is, but I can't tell you how much we
are going to spend this year.
Mr. Cohn. How much did you spend last year?
Mr. Hewitt. Last year--and once again, a rough figure.
Mr. Cohn. I understand.
Mr. Hewitt [continuing]. Some $30 million, more or less.
Mr. Cohn. How much have you spent on this feather program
since its inception?
Mr. Hewitt. Probably $40 million to $50 million.
Mr. Cohn. Now, what else----
Mr. Hewitt. These figures, understand, are approximations,
and incidentally, may I pause at the moment. I take it
everybody is cleared for secret.
Mr. Cohn. Everybody here is what?
Mr. Hewitt. Cleared for secret information.
Mr. Cohn. Oh, yes. What else besides castor oil and
feathers, what is the next largest? How about narcotics?
Mr. Hewitt. Narcotics is one of the things assigned to my
branch, but I do not have anything to do with it. Mr. Walsh,
under an agreement with Mr. Anslinger, handles that almost
exclusively.
Mr. Cohn. Tell us this: Before you went to your present
position, did you have any experience in purchasing on the
competitive market?
Mr. Hewitt. Oh, yes.
Mr. Cohn. Would you tell us in what respect?
Mr. Hewitt. I was a procurement officer with the National
Youth Administration in Pennsylvania. Because of their opinion
of me up there, they brought me down here in Washington to be
chief of the procurement section in the national office.
After that, I----
Mr. Cohn. You bought on the competitive market there, is
that right?
Mr. Hewitt. Yes, sir.
Mr. Cohn. How about in FEA?
Mr. Hewitt. In FEA, we also purchased there.
Mr. Cohn. On the competitive market?
Mr. Hewitt. By ``competitive market,'' you mean other than
just buying on some contract that was in existence? We had to
go out and determine where was the best place to buy it, yes.
Mr. Cohn. What interested me was that on one of your Form
57s, you had said that your experience in purchasing had been
without regard to monetary limitations. I assume you meant that
it was pretty much a case of having to go out and get the
goods, regardless of the cost.
Mr. Hewitt. Is that back in the FEA days you are talking
about?
Mr. Cohn. You made that statement in 1944.
Mr. Hewitt. I don't remember how I used it at that time,
but in FEA we were buying materials that sometimes, had to be
had, and there was only one source of supply.
Mr. Cohn. The preclusion type, you mean?
Mr. Hewitt. Yes.
Mr. Cohn. Now, let us come to this feather program, if I
may. What was the first feather contract that you entered into
on behalf of your agency?
Mr. Hewitt. In December of 1950, I think it was December 5.
Mr. Cohn. And with whom?
Mr. Hewitt. Empire Feather and Down.
Mr. Cohn. With the Empire Feather and Down Company?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Would that be contract number 290?
Mr. Hewitt. It sounds about right.
Mr. Cohn. Tell us the circumstances of entering into that
contract. Did you talk to a number of people, and did you have
any competitive bidding? Let me ask you that question.
Mr. Hewitt. You are going back into ancient history now.
Back in there, when we started--may I answer this way: When we
started our feather program, the first time we began to get
interested in feathers was in October of 1950 when the
Munitions Board approved purchase specifications. Before that,
we wouldn't have known what the Munitions Board had in mind to
buy, whether it was chicken feathers or waterfowl feathers or
what.
My first directive was in November of 1950, which told us
to buy and have in the stockpile two million pounds of feathers
by June 30, 1951. That we got about November 9, I think.
We contacted all known suppliers of feathers, and tried to
get offers. We sent out letters to processors and importers.
Mr. Cohn. Do you have a copy of the directive?
Mr. Hewitt. Not with me.
Mr. Cohn. Could you get that for us?
Mr. Hewitt. Yes.
The Chairman. Let me ask you a question. Then it is the
Munitions Board that sets the target date by which you must
have the articles on hand, is that right?
Mr. Hewitt. The Munitions Board. That directive came from
the Munitions Board; and there is another directive that comes
to us. More recently the directives have come over the
signature of the administrator of Defense Production
Administration, DPA. He is writing to us telling us what was
decided at a high level, like the vital materials coordinating
committee, or the defense materials operating committee, or
something like that.
Let me make a note of these things.
The Chairman. Just so we have the record straight, I
understand it is the Munitions Board that, number one,
determines the amount of strategic material they want; and,
number two, the date at which it must be procured, by which it
must be procured--or is that correct?
Mr. Hewitt. That is not currently correct, Senator.
Currently correct, it is this higher level that decides, on the
basis of supply and demand, when it can be, and they can
overrule the Munitions Board.
The Chairman. At the higher level. Who is the higher level?
Mr. Hewitt. Well, it comes to me through a letter that is
addressed to Mr. Larson from DPA. As I remember the last
organization, the title to it was Defense Materials Operating
Committee, DMOC.
The Chairman. So that there is no doubt the Munitions Board
decides what is a necessary strategic material, number one.
Mr. Hewitt. That is right, sir.
The Chairman. And number two, I assume that they determine
how much must be obtained; and the question as to who sets the
target date, you are not sure whether that is the DMOC or
whether it is the DPA or some other unit, is that right?
Mr. Hewitt. It is a higher level than me. I get it handed
down to me.
The Chairman. Do you get your orders in written form?
Mr. Hewitt. Yes, there are letters.
The Chairman. Would you produce the orders that you have
gotten since the feather-buying project started, up to date?
Mr. Hewitt. Up to date.
The Chairman. We will want those.
Mr. Hewitt. To whom shall I send it?
The Chairman. To Mr. Flanagan, down here in room 101 of the
Senate Office Building. In view of the fact that that is
classified material, I assume that you will have someone
deliver it personally.
Mr. Hewitt. Yes, sir.
Mr. Cohn. Getting back to the first contract, was that let
as a result of competitive bidding, or not?
Mr. Hewitt. It was not in competitive bidding in the sense
that we went out and said ``We want offers on such-and-such a
date for a certain quantity.''
Mr. Cohn. Why?
Mr. Hewitt. Why?
Mr. Cohn. Yes, sir.
Mr. Hewitt. Experience in our whole agency, away back
before my time, has been that that is not the way to buy stuff
for the stockpile. We have authority to negotiate contracts,
and we have been negotiating.
Mr. Cohn. Isn't one object to buy at the lowest price and
save the taxpayers as much money as possible?
Mr. Hewitt. That is one object, to get the most material
for the least dollars, yes, sir.
Mr. Cohn. Can't that best be accomplished by competitive
bidding?
Mr. Hewitt. That was decided before my time, that it was
not.
Mr. Cohn. It was not?
Mr. Hewitt. No.
Mr. Cohn. And you saw no advantage to that? Who made the
decision that there was not to be competitive bidding?
Mr. Hewitt. Before I ever came with the agency, that policy
was established.
Mr. Cohn. How was that communicated to you?
Mr. Hewitt. Verbally.
Mr. Cohn. By whom?
Mr. Hewitt. Captain Moore and his assistant, Ray Eberley.
Mr. Cohn. By Captain Moore?
Mr. Hewitt. Captain H. C. Moore.
Mr. Cohn. And operating under those instructions you did
not let the contract by competitive bidding, is that correct?
Mr. Hewitt. That is right.
Mr. Cohn. And you say you negotiated with various persons,
is that right? Now, with whom did you negotiate as to this
particular contract, in addition to Empire?
Mr. Hewitt. We were trying to get bids, and did have offers
from other people at the same time, which indicated that this
was a reasonable price.
To help you in your thinking, I might even say this: that
the offer that we finally accepted from them, which was then
the lowest we could obtain, included this statement by the
offerer, that it was purely a pilot offer.
Mr. Cohn. A pilot offer?
Mr. Hewitt. That he did not know how much it would cost to
produce this material in the shape we wanted it, and that
subsequent bids might be higher or lower.
Mr. Cohn. But this was the lowest; this was the lowest
offer you received from any manufacturer with whom you spoke?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Empire. And therefore, you let the contract to
Empire?
Mr. Hewitt. Yes, sir.
Senator McClellan. How many offers did you have at the
time? How many other offers did you have at the time? You say
this was the lowest. Were there just two, or were there more?
Mr. Hewitt. Frankly, there were not too many. We had very
hard trouble buying feathers at the start of the program.
Senator McClellan. Do you remember how many you had to
choose between?
Mr. Hewitt. There was some three or four that we had in
mind at the time, yes.
Senator McClellan. Were those concrete offers from the
three or four, or just indefinite suggestions that they could
probably furnish the material?
Mr. Hewitt. I don't have that information in my hand.
Senator McClellan. I think it would be well, if you will,
to supply that and let us see how this thing started under your
administration.
Mr. Hewitt. Yes, sir.
Mr. Cohn. Before you let this contract to Empire, did you
conduct any investigation as to the financial responsibility of
Empire?
Mr. Hewitt. We usually get a statement from them as to the
form that we send out to prospective bidders, which gives us a
statement of their net worth.
Mr. Cohn. Did you obtain such a statement from Empire?
Mr. Hewitt. I don't remember now whether we did or not. I
will have to look at the file.
Mr. Cohn. Is it the invariable practice of your agency to
send out a form and obtain such a financial statement from a
party to whom you are going to let a contract?
Mr. Hewitt. We only deal with established firms, and Empire
has been in the feather business for a long time and was known
as an established firm.
Mr. Cohn. My question to you was: Did you send to Empire a
form, or did you in any way procure from Empire a financial
statement, a statement of financial responsibility?
Mr. Hewitt. I am not prepared to answer that question
today.
Mr. Cohn. Would you consider that, and furnish or supply us
with the information, and if there was such a statement
furnished to you, would you produce a copy of that information
for us?
The Chairman. When do you want the material produced, Mr.
Cohn?
Mr. Cohn. Could you produce it by Tuesday?
Mr. Hewitt. You might remember this, too, that with Empire,
that contract was for payment after all material had been
delivered.
The Chairman. The contract was what? I did not get that.
Mr. Hewitt. The contract was for payment after all material
had been delivered, and in other words, if there was no
delivery, there is no obligation on the part of the government.
Mr. Cohn. Did you send anybody up to look over Empire's
plant or facilities?
Mr. Hewitt. No, sir.
Mr. Cohn. Was there any advance payment at all made to
Empire?
Mr. Hewitt. No, sir.
Mr. Cohn. In other words, your testimony is that not one
cent was paid to Empire until there was complete delivery under
the contract?
Mr. Hewitt. Until the feathers had been delivered and found
satisfactory, and payment was made for those feathers.
The Chairman. Are you certain of that? You know there was
not an advance of money?
Mr. Hewitt. There was no advance of money.
The Chairman. You know that of your own knowledge?
Mr. Hewitt. Yes.
Mr. Cohn. Did you make any inquiry into the financial
status of the Sanitary Feather and Down Company?
Mr. Hewitt. I didn't personally, and how much Mr. Norcross
did, I don't know.
Mr. Cohn. How about the New York Feather and Down Company?
Mr. Hewitt. I am not sure how many statements were received
or not received.
Mr. Cohn. Mr. Norcross. Is that someone who works for you
in your division?
Mr. Hewitt. Mr. Norcross was the man who was handling at
that time all of the feather business, from the start until the
finish, and he was handling the details of it.
Mr. Cohn. Under your supervision?
Mr. Hewitt. Yes. And if he was satisfied that he was
dealing with a reliable firm, I am not sure that he got a
written statement from them as to their finances.
Mr. Cohn. Is Mr. Norcross still with you?
Mr. Hewitt. Oh, no. He died in December of 1951.
Mr. Cohn. Your statement was that there was no fixed policy
as to the procuring of financial statements; that was done or
not done in your discretion or that of Mr. Norcross. Is that
correct?
Mr. Hewitt. We are supposed to be satisfied in our own
minds that they are a reliable company, and we were satisfied.
Mr. Cohn. There were no dealings unless you were satisfied.
Now, in connection with this first contract that was let--
--
The Chairman. May I ask a question. One of the things that
you did before you entered into a contract, you satisfied
yourself that it was a reliable firm, financially responsible?
Mr. Hewitt. That is right, sir.
The Chairman. And you cannot tell us just in what way you
did that?
Mr. Hewitt. By inquiry, and getting an evaluation of the
company from all of the sources we could, at the time.
The Chairman. Dun and Bradstreet, I assume.
Mr. Hewitt. We had some Dun and Bradstreet reports.
The Chairman. What if you got a Dun and Bradstreet report
showing the company was completely irresponsible financially,
would you refuse to deal with them then?
Mr. Hewitt. Oh, yes, sir.
Mr. Cohn. In connection with the first contract, did you
examine the books, in this pilot contract, of any of the
contracting companies?
Mr. Hewitt. No, sir.
Mr. Cohn. You did not?
Mr. Hewitt. No, sir.
Mr. Cohn. Was there ever an offer to show the books to you,
on the part of the contractors?
Mr. Hewitt. No, sir.
Mr. Cohn. Now, you say there was no such offer at any time.
Do you know Mr. Licht?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Did he ever offer to show you his books?
Mr. Hewitt. No, sir.
Mr. Cohn. He did not?
Mr. Hewitt. By that, since you bring his name up, Manny
Licht never showed me his books.
Mr. Cohn. Did he ever offer to show you his books?
Mr. Hewitt. He never offered to show me his books. He did
show me a graph of cost-plusses, and so on, that was used in
the War Production Board, and we have that.
Mr. Cohn. Now, in each case, before you let a contract, did
you satisfy yourself that the contractor had the proper
processing facilities?
Mr. Hewitt. We were satisfied that he would be able to
deliver. There were certain contractors that had their work
custom done, importers who had it done.
Mr. Cohn. How about the firm of Padawer Brothers?
Mr. Hewitt. Padawer Brothers are established in the feather
business, they are established importers, and they have
delivered according to their contracts.
Mr. Cohn. Before you let the contract to them, did you
satisfy yourself that they had the proper processing
facilities?
Mr. Hewitt. We were satisfied that they would be able to
deliver the material, yes, sir.
Mr. Cohn. Do you know a man by the name of Mr. A. B.
Balfour?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Is he connected with Empire?
Mr. Hewitt. President or vice president.
Mr. Cohn. Did he ever offer to show you the books of
Empire, in connection with pilot contract 290?
Mr. Hewitt. I never remember such an offer.
Mr. Cohn. If he had made an offer, would you have taken
advantage of it?
Mr. Hewitt. I think so.
Mr. Cohn. At various times there were amendments of
contracts, were there not?
Mr. Hewitt. There have been, yes, sir.
Mr. Cohn. Are you familiar with Contract 1398 with W. L.
Buchman?
Mr. Hewitt. I am, yes, sir.
Mr. Cohn. Was there any amendment of that contract?
Mr. Hewitt. Yes, sir.
Mr. Cohn. To what effect?
Mr. Hewitt. To change the terms and conditions, that is, it
was set up for a certain quantity at a certain price. In
writing the contract originally, there was a mistake in our
office.
Mr. Cohn. There was a mistake in your office in the writing
of the contract?
Mr. Hewitt. Yes, sir.
Mr. Cohn. To what effect?
Mr. Hewitt. To the effect that he offered a mixture of
feathers including some duck, goose feathers or down, or goose
material with duck, and I don't have this contract with me, so
I am quoting from memory.
Mr. Cohn. That is all right.
Mr. Hewitt. When we wrote the contract, we did not make
provision for the excess duck material in the goose, which
would have made it of a different quality. When our inspectors
inspected it and found it did not have the material in there,
of course they did not accept it, and that is why it was
brought to our attention.
Mr. Cohn. Then there was an amendment?
Mr. Hewitt. So after that, it was amended to permit them to
deliver what they had actually sold us, and at the same time to
take care of the delivery at that time.
Mr. Cohn. Isn't it a fact that as a result of the
amendments of that contract, you accepted larger quantities at
higher prices, and in fact, prices well above the ceiling
price, and that you accepted substandard merchandise?
Mr. Hewitt. I don't think so, sir. The contract was written
for approximately so many pounds. For example, and quoting from
memory, it was fifty thousand pounds of an item, approximately
fifty thousand, and it is universally understood in the trade
practice, and our inspectors are willing to take it so, that
``approximately fifty thousand,'' if it is within 10 percent,
is still approximate. The quantities that were finally accepted
were in that approximation.
Mr. Cohn. Did the government receive any consideration----
Mr. Hewitt. And you also asked about ceiling prices. OPS
had written to us and told us that the contractor was
authorized under their regulations to deliver the full amount
that was written in that contract.
Mr. Cohn. You are familiar with National Stockpile
Specification P-82, promulgated by the Munitions Board?
Mr. Hewitt. Yes, sir.
Mr. Cohn. And, of course, you would be bound by that,
wouldn't you, in your purchasing?
Mr. Hewitt. Oh, yes.
Mr. Cohn. Is it your testimony that in connection with this
Buchman contract, you did not accept any material that was
below the specifications provided for by P-82?
Mr. Hewitt. Yes, sir. Now, when you say ``you are bound by
that,'' we also have a directive from the Munitions Board that,
in cases of shortages, we can buy material which can be brought
up to those specifications, can be beneficiated. When you say
``stick to these,'' and maybe you are thinking of this same
contract which has a mixture of duck and goose, our
specifications are for duck and our specifications are for
goose, and if we had a mixture of duck and goose we have stuff
which complies fully and exceeds the quality for the duck.
Mr. Cohn. Your testimony is that under the Buchman
contract, then, the goods received were above the minimum
requirements of the Regulation F-62?
Mr. Hewitt. They met the requirements for our stockpile
specifications.
The Chairman. Let me ask you a question there. Was the
contract for duck or goose feathers?
Mr. Hewitt. The contract read goose; when it was offered,
it was offered ``goose containing 15 percent of duck,'' and
when it was amended it permitted the delivery of goose feathers
with 15 percent duck in there.
The Chairman. Just a minute. You just got through telling
us if there were goose and duck mixed together, that would be
above the specification for duck. Now, the clear implication
was that you were paying for duck feathers. If you have goose
feathers and there are duck feathers mixed in it, that is below
the specification in the contract for goose is that right?
Mr. Hewitt. We were paying for a mixture of goose with duck
feathers in it.
The Chairman. It you have a contract for goose feathers,
and when they are delivered there is a percentage of duck mixed
in, then that drops below the specifications for goose, is that
right? Is that correct?
Mr. Hewitt. That would not comply 100 percent with
specifications for goose.
The Chairman. So when you just told us that when there were
goose and duck mixed together that would be above the
specifications for duck, that statement would only be
significant if you had a contract for duck feathers, is that
right?
Mr. Hewitt. Well, yes.
The Chairman. When you have a heavy mixture of duck in the
goose feathers and you have a contract for goose feathers, that
makes it below the specifications for goose, does it not?
Mr. Hewitt. Well, yes, but our requirement for the
stockpile is not broken down into so many duck feathers and so
many goose feathers. We are supposed to get feathers. Now,
whether we call that mixture goose and duck, or duck and goose,
it is still a mixture.
The Chairman. It makes a big difference whether you are
paying for goose or paying for duck, is that right, or whether
you have got a contract for a mixture of goose and duck?
Mr. Hewitt. The price was adjusted to be below the OPS
price for the duck that is in there and the goose that is in
there.
The Chairman. Just a second. This particular contract we
are speaking of was a contract for the delivery of
approximately fifty thousand pounds of goose feathers, is that
right?
Mr. Hewitt. That is right.
The Chairman. And when they were delivered, they contained
a heavy percentage of duck, is that right?
Mr. Hewitt. Some 15 percent.
The Chairman. Did you adjust the price downward because of
the duck feathers in the contract?
Mr. Hewitt. Yes, sir.
The Chairman. How much did you adjust it downward from the
contract price?
Mr. Hewitt. Our contract or our specifications permit us to
have in goose feathers 5 percent feathers other than goose, and
when we had 15 percent duck, we had 10 percent excess, so if
you take and use these figures where you have $2.20 for the
price for goose----
The Chairman. Was that the price in the contract?
Mr. Hewitt. $2.15, and these are OPS ceiling prices.
The Chairman. What was the price in the contract? I want to
know how much you cut down his figure in that contract when he
mixed in the extra duck feathers.
Mr. Hewitt. I don't have the contract here, Senator, and I
don't remember the original price, or even the adjustments,
except one figure was $2.40 or $4.50.
The Chairman. Do you know that you did reduce the contract
price when you found that the duck feathers were being
delivered, having a mixture of duck feathers?
Mr. Hewitt. Yes, sir, to more than compensate for the value
of the duck feathers in there.
The Chairman. But offhand from memory you could not tell us
how much?
Mr. Hewitt. Yes, sir.
The Chairman. Will you produce that information for the
staff this afternoon? Let me say this, if we say produce
something this afternoon, and that sounds unreasonable to you,
just tell us and we will give you all of the time you want.
Mr. Hewitt. I don't know when this afternoon starts. I
haven't got out of here yet. I would rather do it tomorrow, if
I could.
The Chairman. How about Monday or Tuesday at ten o'clock?
Can you deliver everything we ask you to produce on Tuesday? We
want to know what the contract price was, and bring the
contract along, and we want to know how much you adjusted the
price downward because of the mixture of duck feathers.
Mr. Hewitt. Yes, sir, and we will have that evidence for
you.
Mr. Cohn. Now, Mr. Hewitt, did the amendment to the
contract conform precisely with the original offer? In other
words, was the amendment to bring the contract in line with the
original offer?
Mr. Hewitt. Well, no, the original offer was at a price,
and the amendment was less than the price, and we even amended
at a lower price than the original offer.
Mr. Cohn. How about the goods delivered; you took different
goods?
Mr. Hewitt. We took the goods that were originally offered.
Mr. Cohn. What was the original offer, exactly?
Mr. Hewitt. Containing, as I remember, 15 percent duck.
Mr. Cohn. And the contract provided for what, 5 percent
duck?
Mr. Hewitt. Strictly according to the specifications, it
would be a maximum of 5.
Mr. Cohn. At the time----
Mr. Hewitt. I will bring that in later.
Mr. Cohn. At the time of the amendment of the contract,
could you have bought standard goose for less than the
amendment price provided for goose adulterated with duck?
Mr. Hewitt. I don't think so, sir.
Mr. Cohn. Your testimony is you don't think that you could
have?
Mr. Hewitt. No, sir.
The Chairman. Do you know? I assume when you were getting
substandard material, you would check and see what you could
buy it for, and it would be a completely new contract at that
time. Do you follow my question?
Mr. Hewitt. Let me say this. Not so long ago we did go out
on bids for fifteen thousand pounds of goose down. I think it
was fifteen thousand pounds of material. And we got offers,
these figures are not exact, but we got offers from twenty
people, ten of whom quoted at the ceiling, and ten of whom
quoted at varying prices, the ceiling being $7.20, and the low
bid being $6.60. We bought that whole fifteen thousand pounds
from that low bidder. However, other bidders, some of those who
were less than ceiling, said they could give us five thousand
at so much and five thousand at so much and five thousand at so
much.
Now, the mere fact that I could buy fifteen thousand pounds
then for delivery in four months hence does not prove to me
that I could have bought, say, one hundred thousand pounds then
for immediate delivery at $6.60.
The Chairman. You still haven't answered my question.
Speaking of this contract for fifty thousand pounds, there came
a time when the contractor could not deliver what he had
contracted to deliver. At that time of course you could have
considered the contract broken, is that right? In other words,
when he could not perform?
Mr. Hewitt. Unfortunately, the man had already performed,
and he had delivered the material.
The Chairman. He had delivered substandard material, is
that right?
Mr. Hewitt. Yes.
The Chairman. So that he had not performed, had he?
Mr. Hewitt. If you go by the language of the contract, I
presume not, and if we go by the intent, he had.
The Chairman. You mean the intent of the contract was he
could give you something different?
Mr. Hewitt. In this case there was a mistake in writing the
contract.
The Chairman. I do not understand you. You say if you go by
the language of the contract, he had not performed.
Mr. Hewitt. Well, the contract said he should deliver goose
according to the specifications.
The Chairman. So that when that was delivered, you find
that it was not up to the specifications, and the question is,
could you have bought goose feathers for less than what you
paid him for the material he delivered, which was substandard,
and could you at that time?
Mr. Hewitt. Not below the price we adjusted it to, no, sir.
The Chairman. You could not have?
Mr. Hewitt. No, sir.
The Chairman. You are sure of that?
Mr. Hewitt. I feel sure of it.
The Chairman. Could you have bought the type of material
that he delivered, 15 percent duck and 85 percent goose, for
less than the adjusted price?
Mr. Hewitt. Well, Senator, that amendment was several
months ago, and I would like to check on that. I feel it was a
good adjustment, personally.
The Chairman. I do not care what you feel. The question is,
did you at that time, before you paid out this money to him,
determine what you could have gotten like material for from
some other feather merchants? It would be the logical thing to
do, and you did not?
Mr. Hewitt. Yes, sir.
The Chairman. You did?
Mr. Hewitt. Yes, sir, but not for delivery at that moment,
and we could not buy material for delivery at that moment.
Mr. Flanagan. Was it necessary that you get material at
that moment?
Mr. Hewitt. We were behind our objective, decidedly behind.
The Chairman. Am I correct in this, that the OPS price for
goose feathers was lower than the adjusted price you paid this
man for the substandard material?
Mr. Hewitt. You are correct that the price tabulated in the
regulations is less, but OPS in this case had given him an
exception to deliver it at a higher price, under this contract.
The Chairman. Had given him an exception?
Mr. Hewitt. Yes, sir.
The Chairman. Are you sure of that?
Mr. Hewitt. Yes.
The Chairman. They gave it to him individually?
Mr. Hewitt. Had written a letter, or at least they wrote to
us and said that he could.
Mr. Flanagan. Have you got that letter?
Mr. Hewitt. It can be had, a letter of February 27.
The Chairman. Will you produce that letter, also?
Mr. Flanagan. A letter of February 27 what year, 1952?
Mr. Hewitt. Yes, I guess so, last year, 1952.
The Chairman. You said the OPS in this case allowed you to
pay more for substandard material than their ceiling price on
the standard material. Do you know why? It seems unusual.
Mr. Hewitt. They allowed him to deliver the several items
on that contract, and they had examined his purchases and
approved it, and they knew the material he had.
The Chairman. Who in OPS was responsible for that?
Mr. Hewitt. That I don't know.
The Chairman. I am sorry, gentlemen; you go ahead.
Senator McClellan. It strikes me somewhat in the
indefiniteness of your testimony that it should indicate
whether prior to making this adjustment you had received and
accepted the material. Had you?
Mr. Hewitt. I think it had been received at the warehouse.
Senator McClellan. Did you accept the material before
having examined it to know that it was substandard?
Mr. Hewitt. This with the duck in had not been approved by
our inspectors because of the presence of the duck.
Senator McClellan. Well, the material had been delivered,
but not accepted, is that right?
Mr. Hewitt. It was, I think, in his plants still ready for
shipment.
Senator McClellan. In other words, it was ready for
delivery when you discovered the inferior quality?
Mr. Hewitt. That is right, sir.
Senator McClellan. And then you proceeded with this
adjustment?
Mr. Hewitt. That is right.
Senator McClellan. All right.
Mr. Cohn. I want to get back to this contract for a moment,
if I may. You say there was a mistake made. Didn't the seller
read the contract before he signed it?
Mr. Hewitt. I am not the seller.
Mr. Cohn. But you did something that apparently----
Mr. Hewitt. I can't swear that he read it. He probably did.
Mr. Cohn. Pardon me?
Mr. Hewitt. I don't know whether he did or not. I am not
the seller.
Mr. Cohn. What was the point in amending the contract this
way, and wasn't there----
Mr. Hewitt. He wrote in after the signature and was
bringing it to our attention.
Mr. Cohn. Well, now, do you usually do that when there is a
negotiation and a contract is signed by two responsible
parties, and afterwards, is this a usual procedure?
Mr. Hewitt. I hope I am telling the truth when I say we
usually don't make mistakes.
Mr. Cohn. Was it your mistake or was it the mistake on the
part of the seller?
Mr. Hewitt. It was our mistake.
Mr. Cohn. Isn't the seller responsible for what is in the
contract, too? He signed it, did he not?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Which was a written contract, and you have told
us that the seller was rather a substantial outfit in the
industry.
Mr. Hewitt. Yes, sir.
Mr. Cohn. I assume they had advice of counsel and
everything else?
Mr. Hewitt. Yes, sir.
Mr. Flanagan. What was your mistake?
Mr. Hewitt. That we accepted the feathers that he offered,
but when we typed up the contract, we did not write it in the
terms of our acceptance.
Mr. Flanagan. What do you mean, you took the feathers
before you entered into a contract?
Mr. Hewitt. No, we accepted his offer, and we told him we
accepted his offer by telegram, but when we wrote the formal
document, to document the purchase that we had made, it was not
in the right language.
Mr. Flanagan. Do you imply, then, that in his offer he
offered to give goose down with 15 percent duck?
Mr. Hewitt. Yes, sir.
Mr. Flanagan. That was in his offer?
Mr. Hewitt. Yes, sir.
Mr. Flanagan. Have you got a copy of that offer?
Mr. Hewitt. Yes, sir.
Senator McClellan. To clear it up, is that an offer in
writing?
Mr. Hewitt. Yes, sir.
Senator McClellan. That you accepted, and then later
undertook to draw a contract to conform to the offer, and the
verbal acceptance?
Mr. Hewitt. Yes, sir.
Senator McClellan. And you made the mistake in drawing the
contract?
Mr. Hewitt. That is right.
Senator McClellan. How soon after the contract was executed
was the mistake discovered and called to your attention, and by
whom?
Mr. Hewitt. Reasonably soon, Senator. It was called to our
attention in the fall, October or November, and it was not
ultimately amended until in the spring.
Senator McClellan. By whom was it called to your attention?
Mr. Hewitt. By the contractor.
Senator McClellan. By the seller?
Mr. Hewitt. By the contractor, and confirmed by the
inspectors.
Senator McClellan. Now, do you have in your files the
original offer?
Mr. Hewitt. Yes, sir.
Senator McClellan. That conforms to the contract as
amended, and in other words, the contract as amended conforms
to the original written offer from the seller that you have in
your files?
Mr. Hewitt. No, sir.
Senator McClellan. Is that what you are telling us?
Mr. Hewitt. The amendment, you mean?
Senator McClellan. Let me see if I can make it very clear
to you now, and this is no catch question, I am trying to
establish what the facts really are. As I understand it, in the
course of negotiations the seller submitted you a written offer
of what he could deliver certain quantities of feathers of a
certain quality for?
Mr. Hewitt. Yes, sir.
Senator McClellan. That is in writing?
Mr. Hewitt. Yes, sir.
Senator McClellan. That written offer stipulated that 15
percent was to be duck feathers, or feathers other than goose
feathers.
Mr. Hewitt. Yes, sir.
Senator McClellan. You accepted that offer?
Mr. Hewitt. Yes, sir.
Senator McClellan. At the terms or upon the price that he
stipulated?
Mr. Hewitt. Yes, sir.
Senator McClellan. Later you undertook to draw a contract,
a written contract of acceptance of the offer, the written
offer that had been submitted?
Mr. Hewitt. Yes, sir.
Senator McClellan. Now, that offer, that written offer is
still in your files?
Mr. Hewitt. Yes, sir.
Senator McClellan. When you drew the contract, and it was
executed, it did not conform to the written proposal which you
had previously verbally accepted, in that it did not allow for
the 15 percent?
Mr. Hewitt. We had accepted it by telegram.
Senator McClellan. Well, by telegram.
Mr. Hewitt. Yes, sir.
Senator McClellan. It did not conform, the contract as
prepared in your office and as was later executed did not
conform to the original written offer which it was your
intention to accept?
Mr. Hewitt. That is right, sir.
Senator McClellan. It was later discovered, and now how
much later, that this error had been made?
Mr. Hewitt. I don't remember exactly.
Senator McClellan. How was it called to your attention, and
by whom was it first called to your attention that the mistake
had been made?
Mr. Hewitt. I think it was called to my attention by Mr.
Norcross.
Senator McClellan. How was it called to his attention if
your records show?
Mr. Hewitt. The contractor had called him.
Senator McClellan. Had called him or written him?
Mr. Hewitt. I think called; I am not sure.
Senator McClellan. Well, let me ask you, if this occurred,
this discovery of the mistake, if it was called to your
attention, if that occurred before the seller was ready to
deliver on the contract, or if after he had made his purchases
and was ready to perform? What I am trying to determine is
whether this was all an afterthought after the fellow was ready
to deliver it, or if it was something that developed in the
interim before he procured his goods to deliver, and you made
the amendment at that time, and before he acquired the
merchandise, or if it was after he acquired it, and was ready
for delivery that this was discovered, and then adjusted.
Here is what I mean. You and I enter into a contract and I
propose to sell, and you have accepted, and we have signed a
contract. I have got to go out and procure, I assume that that
is correct, I have got to go out and procure the merchandise to
deliver to you. I start, and I find that there has been a
mistake made in the contract, and I call it to your attention.
Before I procure the goods, we make the amendment to the
contract, or did it occur after I had procured the goods and
was ready to deliver, and their inferiority was discovered, and
the mistake was discovered in the contract, then we amend the
contract and make the adjustment?
Mr. Hewitt. I don't know, sir, the date that he procured
the goods, but I am sure that he had procured the goods early
or OPS would not have okayed his business. I should see the
file before I answer that.
Senator McClellan. I suggest, Mr. Chairman, that you bring
everything here now in your file pertaining to this
transaction, so that we can determine these things accurately.
Mr. Hewitt. Yes, sir.
Mr. Cohn. I wanted to ask you this question, Mr. Hewitt. At
the time you went into the amendment of this contract, did you
talk to the legal division of GSA?
Mr. Hewitt. Yes, sir.
Mr. Cohn. The next question is, now, isn't it a fact that
the legal division of the GSA was unalterably opposed to the
amendment of the contract?
Mr. Hewitt. No, I wouldn't say that. When you say
unalterably opposed.
Mr. Cohn. Should I withdraw the word ``unalterably''?
Mr. Hewitt. No. Let me say this. We drafted an amendment at
one time which the legal division did not approve. This will
all be in the files, and subsequently to that we drafted
another amendment, which the legal division did approve.
Mr. Cohn. You say they disapproved the amendment originally
and later on you re-did it, and it was approved?
Mr. Hewitt. There was another amendment written.
Mr. Cohn. Why did they oppose the amendment originally?
Mr. Hewitt. Well, you will have to ask counsel that,
because they don't tell us why. They just say that this isn't
right, and it can't be.
Mr. Cohn. Did you make any change in the second amendment,
the final amendment, after it had been cleared by the legal
division of GSA?
Mr. Hewitt. Yes, sir. That change was made on the basis of
the change from OPS telling us that he could deliver the
material on this contract, and originally they told us that
they had not said he could, and therefore we wrote it on the
basis of OPS ceiling.
The Chairman. Let me ask you this question. When you asked
OPS to approve a higher price above ceiling price, did you at
that time tell them that one of the reasons why you wanted that
permission was because you had already advanced money to this
man, and that unless you could accept the goods, you would be
out all of that money?
Mr. Hewitt. We don't ask OPS for approval. The contractor
clears with the approval. The contractors ask OPS and submit
evidence that justifies his claim.
Mr. Cohn. Now, there are some things that we don't have
very much time to cover, but I want to cover them for the
record. I wonder if you could tell us this: You have told us
what your salary is, some $9,000 a year. Do you have any income
in addition to your salary?
Mr. Hewitt. No, I get a few hundred dollars or $100 a year
from miscellaneous sources, but no radical income.
Mr. Cohn. What are the miscellaneous sources?
Mr. Hewitt. Well, sometimes we rent out rooms or something
like that, and things like that.
Mr. Cohn. Are you married, Mr. Hewitt?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Does your wife have any independent income?
Mr. Hewitt. No, sir.
Mr. Cohn. Does she work?
Mr. Hewitt. She does not work, no, sir. She is a trained
nurse, and she did work a week or so this winter, but normally
not. That also is part of her independent income.
Mr. Cohn. Do you have any children?
Mr. Hewitt. I have three.
Mr. Cohn. How old are they?
Mr. Hewitt. The youngest is in the navy. He is twenty-one.
And the oldest is a teacher in Hagerstown, and the daughter is
in between, and she lives home. She has two children.
Mr. Cohn. Do you maintain a bank account?
Mr. Hewitt. I have a bank account in Carlisle.
Mr. Cohn. Where is it?
Mr. Hewitt. Carlisle, Pennsylvania.
Mr. Cohn. Carlisle, Pennsylvania?
Mr. Hewitt. Yes, sir.
Mr. Cohn. At what bank?
Mr. Hewitt. The Farmers Trust Company.
Mr. Cohn. Is that the only bank account you or your wife
have?
Mr. Hewitt. It is the only bank we have. She has one in her
own name, and we have a joint account. There are two accounts.
Mr. Cohn. Both at the same bank?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Neither you nor your wife has any other account?
Mr. Hewitt. No, sir.
Mr. Cohn. Do you have a safe deposit box?
Mr. Hewitt. In that bank, yes, sir.
Mr. Cohn. In that bank?
Mr. Hewitt. Yes, sir.
Mr. Cohn. That is the only safe deposit box you have, is
that right?
Mr. Hewitt. Yes, sir.
Mr. Cohn. Do you have any cash?
Mr. Hewitt. Cash?
Mr. Cohn. Yes, sir.
Mr. Hewitt. A few dollars, yes.
Mr. Cohn. About how much?
Mr. Hewitt. I might have ten or fifteen dollars, or five
dollars, I don't know, I can look and see.
Mr. Cohn. I don't mean that. That is all right, Mr. Hewitt.
I mean outside of what you have with you, do you have any cash
anyplace else?
Mr. Hewitt. No, sir.
Mr. Cohn. You don't keep any cash at all?
Mr. Hewitt. No, sir.
Mr. Cohn. How about any other type of securities?
Mr. Hewitt. Outside of two little Liberty Bonds, and about
$75 each, $100 face value, none.
Mr. Cohn. How about real estate?
Mr. Hewitt. We own our home here, with a first and second
mortgage on it.
Mr. Cohn. What is the address of that house?
Mr. Hewitt. 5330 41st Street.
Mr. Cohn. When did you purchase the home?
Mr. Hewitt. Two years ago, and if I remember the date, it
was February 28 when the settlement was, but it is two years
ago.
Mr. Cohn. What did you pay for it?
Mr. Hewitt. You will think I am awfully careless with these
things, but I remember it is $15,500, I think.
Mr. Cohn. Let me ask you this: Have you ever received any
gratuity, payment or benefit, direct or indirect, from any
party with whom you have done business while employed by GSA ?
Mr. Hewitt. No, sir.
Mr. Cohn. Not direct or indirect in any way, manner, shape
or form?
Mr. Hewitt. I would say no.
Mr. Cohn. You say ``I would say no;'' are you positive?
Mr. Hewitt. I am positive that I have not.
The Chairman. Just to have that correct, I understand,
then, Mr. Hewitt, that the only bank accounts you or your wife
have, number one, a joint bank account in a bank in Carlisle,
between you and your wife, and your wife's bank account in the
same bank?
Mr. Hewitt. Yes, sir.
The Chairman. Can you tell us about how much is in those
two bank accounts?
Mr. Hewitt. A couple of hundred dollars at the moment,
little enough to have me worried.
The Chairman. Is that in both accounts combined?
Mr. Hewitt. Yes, sir.
The Chairman. Neither you nor your wife have any other bank
account any place?
Mr. Hewitt. Oh, no.
The Chairman. And the only property you have is fifteen or
twenty dollars you have on you in cash, and no other cash in
your safe deposit box or any other place, and no securities
except securities totaling about $200?
Mr. Hewitt. That is right,
The Chairman. And no other securities or cash in that safe
deposit box?
Mr. Hewitt. Oh, no.
The Chairman. The only real estate you have is your home
which you have described, for which you paid something in the
neighborhood of $15,500, and you have two mortgages on it?
Mr. Hewitt. And our house in Carlisle. We own a small house
in Carlisle.
Mr. Cohn. What 