[107 Senate Committee Prints]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:83873.wais]
S. Prt. 107-84
EXECUTIVE SESSIONS OF THE SENATE
PERMANENT SUBCOMMITTEE ON
INVESTIGATIONS OF THE COMMITTEE
ON GOVERNMENT OPERATIONS
=======================================================================
VOLUME 5
__________
EIGHTY-THIRD CONGRESS
SECOND SESSION
1954
MADE PUBLIC JANUARY 2003
Printed for the use of the Committee on Governmental Affairs
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83-873 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
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, Second 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
Robert F. Kennedy, Minority Counsel
Francis P. Carr, Executive Director
Ruth Young Watt, Chief Clerk
ASSISTANT COUNSELS
Thomas W. La Venia Donald A. Surine
Donald F. O'Donnell Jerome S. Adlerman
Daniel G. Buckley C. George Anastos
INVESTIGATORS
Robert J. McElroy
Herbert S. Hawkins James N. Juliana
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
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Page
Volume 5
PREFACE.......................................................... IX
INTRODUCTION..................................................... XI
Waste and Corruption--Development of Alaska, January 13.......... 1
Testimony of Carmine Bellino.
Voice of America, January 13..................................... 29
Testimony of Dr. Newbern Smith.
Army Signal Corps--Subversion and Espionage, January 19.......... 31
Statement of John Adams.
Army Signal Corps--Subversion and Espionage, February 18......... 33
Testimony of Peter A. Gragis; Leo Kantrowitz; Max Finestone;
Frank M. McGee; Lt. Col. Chester T. Brown; Capt. W. J.
Woodward; and Brig. Gen. Ralph W. Zwicker.
Army Signal Corps--Subversion and Espionage, February 23......... 63
Testimony of Charlotte Oram; Sallie Fannie Peek; Genevieve
Brown; William S. Johnson; and Lamuel Belton.
Army Signal Corps--Subversion and Espionage, March 1............. 73
Testimony of Pvt. David LaPorte Linfield; and Sidney
Rubinstein.
Army Signal Corps--Subversion and Espionage, March 10............ 75
Testimony of Harriman H. Dash.
American Citizens Behind the Iron Curtain, March 3............... 93
Statements of Ben H. Brown, Jr.; W. Barbour; Alyn Donaldson;
Everett F. Drumright; Frederick Ayer, Jr.; Lt. Col. R. W.
Springfield; James H. Smith, Jr.; Capt. W. R. Smedburg; Lt.
Com. T. J. Martz; Lt. Col. Nihart; and Warrant Officer Jack
Goodall.
American Citizens Behind the Iron Curtain, March 9............... 139
Statements of L. E. Berry; Col. Vernon M. Smith; Lt. Col.
Homer B. Chandler, Jr.; and Lt. Col. Charles M. Trammell,
Jr.
Alleged Threats Against the Chairman, March 4.................... 165
Testimony of William J. Morgan.
Communist Infiltration in the Army, March 4...................... 177
Testimony of Dr. Marvin Sanford Belsky.
Communist Infiltration in the Army, March 5...................... 187
Statement of Lt. Oscar Roy Weiner.
Communist Infiltration in the Army, March 10..................... 189
Testimony of Lt. Oscar Roy Weiner.
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, March 16.................................. 195
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, April 19.................................. 197
Testimony of J. Myer Schine; Florence D. Torrey; and Roy M.
Cohn.
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, April 20.................................. 209
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, April 23.................................. 213
Testimony of George E. Sokolsky.
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, April 24.................................. 223
Testimony of Iris Flores.
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, May 5..................................... 241
Testimony of James B. Reston.
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, May 6..................................... 245
Testimony of Fred A. Seaton.
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, May 27.................................... 253
Testimony of John E. Pernice.
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, June 3.................................... 259
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, June 8.................................... 273
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, June 10................................... 291
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, July 15................................... 293
Confirmation of Subcommittee Personnel, July 15.................. 295
Matters of Staff Organization and Committee Funds, July 20....... 317
Subversion and Espionage in Defense Establishments and Industry,
January 15..................................................... 329
Testimony of Leon J. Kamin; Theodore Pappas; Alexander
Gregory; Victor S. Boyls; Karl T. Nabeshka; Simon Pallet;
Lewis B. Thomas; Benjamin Alfred; Edwin Allen Cassano;
Renaldo Cavalieri; Rodney Avram Brooks; George Frederick
Moore; and Wendell H. Furry.
Subversion and Espionage in Defense Establishments and Industry,
February 19.................................................... 359
Testimony of Dante DeCesare; Helen Quirini; Lillian Garcia
Krummel; Louis Passikoff; William Vincent Delos; Robert H.
LaFortune; Cyril Sille; Allan E. Townsend; Michael Riggi;
and Charles Rivers.
Subversion and Espionage in Defense Establishments and Industry,
July 19........................................................ 387
Statements of Lawrence W. Parrish; and Charles Wojchowski.
Subversion and Espionage in Defense Establishments and Industry,
July 20........................................................ 395
Testimony of Edwin Garfield; and Yates C. Holmes.
Subversion and Espionage in Defense Establishments and Industry,
August 6....................................................... 411
Testimony of Diantha Hoag; and Lawrence W. Parrish.
Subversion and Espionage in Defense Establishments and Industry,
August 11...................................................... 423
Testimony of Joseph O. Mattson; Waino E. Suokko; Waino S.
Nisula; Louis Passikoff; Joseph Mazzei; and Mary Mazzei.
Subversion and Espionage in Defense Establishments and Industry,
December 6..................................................... 471
Testimony of Herman E. Thomas; Joseph A. Picucci; John Szabo;
Markus Kalasz; John Wallach; Philip Valli; John Babirak;
and Benito Seara Quintana.
Subversion and Espionage in Defense Establishments and Industry,
December 7..................................................... 521
Testimony of Markus Kalasz; Philip Valli; Paul Ault; John
Babirak; Alvin Heller; Harold C. Allen; Maurice Slater; and
Andrew Nicko.
Subversion and Espionage in Defense Establishments and Industry,
December 8..................................................... 557
Testimony of Thomas B. Russiano.
Subversion and Espionage in Defense Establishments and Industry,
January 3, 1955................................................ 569
Testimony of Frank Nestler; Mary Stella Beynon; Joseph
Slater; Peter T. Lydon; Theodore Wright; and Harold K.
Briney.
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
----------
In 1954, the investigators found themselves the subject of
investigation. Senator Joseph R. McCarthy stepped aside
temporarily as chair of the Permanent Subcommittee on
Investigations after the United States Army accused him and
chief counsel Roy Cohn of having demanded special treatment for
the subcommittee's former consultant, G. David Schine, then an
army private. Senator McCarthy rebutted that the army had held
Schine hostage in order to silence the subcommittee's
investigations.
A special subcommittee, chaired by Senator Karl Mundt, then
attempted to unravel these charges. Senator McCarthy, Cohn and
executive director Francis Carr served as the principals in the
investigation, along with Secretary of the Army Robert T.
Stevens, Army Counsel John G. Adams, and Assistant Secretary of
Defense H. Struve Hensel. The Army-McCarthy hearings were
televised nationally and captured public attention. They
resulted in an erosion of the senator's public standing, and
contributed to his censure by the United States Senate that
December.
Revising the Subcommittee's Rules
In the months leading up to the Army-McCarthy hearings,
Senator McCarthy faced several challenges to his chairmanship
of the permanent subcommittee. Eight senators died in office
during the Eighty-third Congress, including Majority Leader
Robert Taft, which from time to time gave Senate Democrats a
numerical advantage, even though Republicans officially
retained their majority status and held the committee
chairmanships. Complicating matters for the permanent
subcommittee in July 1953 were the resignations of all three of
its Democratic members--Senators John McClellan, Henry Jackson,
and Stuart Symington--over the subcommittee's hiring practices.
During their absence, Senator McCarthy was often the only
subcommittee member to attend its closed hearings, many of
which he held out of town with little advance notice.
Republican senators on the subcommittee had other Senate
business to attend to in Washington. Senator Everett Dirksen
and Senator Charles Potter occasionally sent staff to represent
them at the hearings, and Senator McCarthy allowed them to
interrogate witnesses. Unaware of this development, Senator
Potter eventually dismissed his staff delegate, Robert Jones,
for misrepresenting his position. On a few occasions, even
Senator McCarthy was not present and staff interrogatories
replaced hearings. David Schine sometimes presided, with Roy
Cohn conducting the interrogation and addressing Schine as
``Mr. Chairman.'' \1\
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\1\ Charles E. Potter, Days of Shame (New York: Coward-McCann,
1965), 152-159; Staff interrogatory, October 30, 1953.
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The Democrats' continued boycott jeopardized the
subcommittee's appropriation at the opening of the second
session in January 1954. Arizona Senator Carl Hayden, the
ranking Democrat on the Appropriations Committee, threatened to
cut off the subcommittee's funds for lack of a ``majority
vote.'' At the same time, Iowa Senator Guy Gillette called on
the Senate to restrict the subcommittee's freewheeling scope
and prohibit it from overlapping other committees'
jurisdictions. Senator McCarthy described these efforts as ``a
vote against the exposure of spies and saboteurs,'' and
asserted that it was ``a natural thing for left-wing Democrats
to try to stop the exposure of treason.'' \2\
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\2\ New York Times, January 15, 1954; Chicago Tribune, January 3,
7, 15, 1954.
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Senator Karl Mundt, a South Dakota Republican who served on
the Government Operations Committee, sought to mediate between
the chairman and Democrats. At a closed meeting on January 14,
1954, Senator McCarthy agreed to the Democrats' demand that
they be permitted to hire a minority counsel. The subcommittee
formally adopted these rules:
1. Future staff members as well as all present members
shall be confirmed by a majority of the subcommittee.
2. The minority shall select for appointment to the
subcommittee staff a chief counsel for the minority who shall,
upon being confirmed, work under their supervision and
direction; who shall be kept fully informed as to
investigations and hearings, have access to all material in the
files of the subcommittee, and, when not otherwise engaged,
shall do other subcommittee work.
3. The minority counsel shall be hired at a salary not to
exceed the maximum allowed Senate employees.
An increase of $16,000 on Senate Resolution 19 will be
requested to cover the salary and travel, per diem, allowance,
and incidental expenses.
4. A clerk already on the staff, acceptable to it, shall be
assigned to the minority and it is understood that when she is
not busy she will do any work assigned to her on the
subcommittee.
5. It is understood that before a voucher is submitted to
the chairman for a new employee, that an FBI investigation be
conducted--a full field investigation requested.
6. No public hearing shall be announced or held if the
minority members unanimously object, unless the Committee on
Government Operations by majority vote approves of a public
hearing.\3\
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\3\ Congressional Record, 83rd Cong., 2nd sess., 1101.
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When Democrats returned to the subcommittee they selected
as their counsel a former subcommittee staff member, Robert F.
Kennedy, the younger brother of Massachusetts Senator John F.
Kennedy. The full committee then voted unanimously to approve
the subcommittee's appropriation. In the Senate chamber,
Senator J. William Fulbright of Arkansas cast the sole vote
against the appropriation.\4\
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\4\ Congressional Record, 83rd Cong., 2nd sess., 1085-1103.
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With criticism of investigative tactics mounting, the
Republican Policy Committee in February 1954 proposed new rules
under which a vote of the full committee would be necessary to
authorize any subcommittees; hearings would be prohibited
unless a quorum was present; and committees were restricted
from delegating subpoena power, initiating an investigation,
holding a hearing outside of the District of Columbia, or
taking confidential testimony unless authorized by a majority
of committee members. Witnesses subpoenaed would have the right
to counsel. Only senators and authorized staff personnel could
interrogate witnesses. The policy committee unanimously
approved these rules and forwarded them to the Senate Rules
Committee. The Rules Committee chose to let individual
committees set their own investigative standards and
procedures. The next year, the Permanent Subcommittee on
Investigations adopted rules similar to those that the policy
committee had recommended:\5\
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\5\ Donald A. Ritchie, A History of the United States Senate
Republican Policy Committee, 1947-1997, S. Doc. 105-5 (Washington,
D.C.: Government Printing Office, 1997), 43-44.
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1. An investigating subcommittee of any committee may be
authorized only by the action of a majority of the committee.
2. No investigating committee or subcommittee is authorized
to hold a hearing to hear a subpoenaed witness or take sworn
testimony unless a majority of the members of the committee or
subcommittee are present: Provided, however, That the committee
may authorize the presence of a majority and a minority member
to constitute a quorum.
3. An investigating committee or subcommittee may not
delegate its authority to issue subpoena except by a vote of
the committee or subcommittee.
4. No hearing shall be initiated unless the investigating
committee or subcommittee has specifically authorized such
hearing.
5. No hearing of an investigating committee or subcommittee
shall be scheduled outside of the District of Columbia except
by the majority vote of the committee or subcommittee.
6. No confidential testimony taken or confidential material
presented in an executive hearing or an investigating committee
or subcommittee or any report of the proceedings of such an
executive hearing shall be made public, either in whole or in
part or by way of summary, unless authorized by a majority of
the committee or subcommittee.
7. Any witness summoned to a public or executive hearing
may be accompanied by counsel of his own choosing, who shall be
permitted while the witness is testifying to advise him of his
legal rights.\6\
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\6\ Congressional Record, 83rd Cong., 2nd sess., 2970.
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McCarthy and the Army
The subcommittee's investigation of Communist infiltration
of the army eventually focused on two principal subjects:
Irving Peress, an army dentist, and Annie Lee Moss, a Pentagon
file clerk. Both appeared only fleetingly before the
subcommittee, but with considerable consequence.
During the autumn of 1953, the subcommittee had looked into
charges of subversion and espionage at the Army Signal Corps
laboratories at Fort Monmouth, New Jersey. Security officers
abruptly suspended forty-two employees as security risks, and
Senator McCarthy began calling them as witnesses. Many had
graduated from the engineering program at the City College of
New York (CCNY) where they had sat in classes with Julius
Rosenberg. Since Rosenberg had worked at Fort Monmouth during
the Second World War, suspicions arose that he had operated a
spy ring within the laboratories. Army officials at first
cooperated with the investigation, with Secretary of the Army
Robert T. Stevens and the army's counsel John G. Adams
attending executive sessions. Relations grew strained, however,
when President Dwight D. Eisenhower refused to allow army
security board members to be identified and questioned by the
subcommittee. The president withheld other requested materials
on the grounds of executive privilege.
Discovering that an army dentist suspected of being a
member of the Communist party had been promoted to major, and
then honorably discharged, Senator McCarthy raised the
question: ``Who promoted Peress?'' He further demanded the
names of those who had cleared Peress' discharge. Peress'
commanding officer, Brigadier General Ralph Zwicker, cited an
executive order that forbade him from divulging such
information. ``Then, General, you should be removed from any
command,'' the chairman stormed. ``Any man who has been given
the honor of being promoted to general and who says, `I will
protect another general who protected Communists,' is not fit
to wear that uniform, General.'' General Zwicker's executive
session testimony was made public on February 22, 1954, and
caused some alarm even among the senator's strongest
supporters. An editorial in the Chicago Tribune suggested that
McCarthy learn to ``distinguish the role of investigator from
the role of avenging angel.'' Since McCarthy's clash with
Zwicker has already been published, it is not included in this
edition of executive sessions, but the volume does contain an
exchange between the senator and Lt. Colonel Chester T. Brown
that immediately preceded General Zwicker's testimony, when the
senator used equally abusive language: ``I think, may I say
this, that any man in the uniform of his country, who refuses
to give information to a committee of the Senate which
represents the American people, that that man is not fit to
wear the uniform of his country.''
Army counsel John G. Adams noted that Senator McCarthy's
supporters on the Government Operations Committee initially
tried to strike from the record his verbal assault on General
Zwicker, but they had ``underestimated the efficiency of the
stenographic company.'' The army had already received copies of
the transcript. Learning this, the committee voted to release
the controversial exchange.\7\
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\7\ John G. Adams, Without Precedent: The Story of the Death of
McCarthyism (New York: W. W. Norton, 1983), 79, 129.
---------------------------------------------------------------------------
The subcommittee had gotten the name of Annie Lee Moss from
an FBI informant, Mary Stalcup Markward, who told them that she
had seen ``a woman by the name of Annie Lee Moss on the list of
card-carrying, dues-paying members.'' However, Markward could
not recall having met Moss personally. Moss, an African
American, had worked in a government cafeteria before getting a
job as an Army Signal Corps communications clerk at the
Pentagon in 1950. She had been cleared by loyalty boards of the
General Accounting Office in October 1949 and by the army in
January 1951. In September 1951, the FBI raised questions about
Moss, and offered Markward's testimony as evidence, but the
army did not reopen the case. Senator McCarthy described Moss
herself as ``not of any great importance,'' but he demanded to
know: ``Who in the military, knowing that this lady was a
Communist, promoted her from a waitress to a code clerk?'' Due
to ill health, Moss did not attend an executive session and
made her first appearance before the subcommittee at a
televised public hearing on March 11, 1954.\8\
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\8\ Permanent Subcommittee on Investigations, Army Signal Corps--
Subverision and Espionage, part 8 (Washington, D.C.: Government
Printing Office, 1954), 314-29.
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The army described Annie Lee Moss' position as a relay
machine operator who received and transmitted ``unintelligible
code messages.'' When the charges against her became public,
the army first transferred her to a supply room and then
suspended her entirely. At the public hearing, Moss denied
having been a member of the Communist party, having paid any
dues, or having attended any party meetings. She testified that
her late husband had received copies of the Daily Worker,
although she was uncertain whether they had been addressed to
him or to her. Moss had paid dues to a cafeteria-workers' union
in 1943, but could not say whether the union had any Communist
party connections. Appearing frail and perplexed at the
hearing, she seemed an unlikely espionage agent even to Senator
McCarthy, who left midway through her testimony. The hearing
was replayed on Edward R. Murrow's popular See It Now
television program and proved a public relations blow to the
chairman. The army eventually reinstated Annie Lee Moss,
placing her in its finance and accounts office. In 1958 the
Subversive Activities Control Board confirmed Markward's
assertion that Moss' name had appeared on the Communist party
rolls in the mid-1940s. But the board conducted no further
investigation of Moss, and the following year it concluded that
``Markward's testimony should be assayed with caution.'' \9\
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\9\ Thomas C. Reeves, The Life and Times of Joe McCarthy (New York:
Stein and Day, 1982), 548-50, 667-69, 766-67; David M. Oshinsky, A
Conspiracy So Immense: The World of Joe McCarthy (New York: Free Press,
1983), 381-85, 401-3; Arthur Herman, Joseph McCarthy: Reexamining the
Life and Legacy of America's Most Hated Senator (New York: Free Press,
2000), 333-37.
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Reporter Ethel Payne, who covered the case for the Chicago
Defender, an African-American newspaper, described Annie Lee
Moss as a humble person of limited education. ``The three
things in her life were her son, her grandson, and her church,
beside her job. And other than that, she knew little about the
world outside. She was a widow. In those days, when the
Communist Party was really campaigning in black areas to
recruit blacks to join the Communist Party, they were very
active. I know in Chicago, when people were evicted, Communists
would come and move their furniture and everything else back
into these houses, and they would bring baskets of food. They
launched a serious campaign in the black community. Well, Mrs.
Moss' husband was one of those who had been contacted by the
Communists. He was just a simple working man, but they were
sending him free subscriptions to the Daily Worker, the organ
of the Communist Party. And I don't know what he did with them,
but when he died, they kept coming, these papers, and they
piled up on her back porch, some with the wrappings still on
them. She never paid any attention to it; the Bible was her
thing.'' \10\
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\10\ Ethel Payne oral history, 1987 Washington Press Club
Foundation, 39-40.
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The Peress and Moss cases further eroded Senator McCarthy's
relations with the army. Then the controversy escalated when
the army charged that McCarthy and Cohn had demanded special
privileges for the subcommittee's former chief counsel, David
Schine. Ruth Watt, chief clerk of the subcommittee since 1947,
had observed that Cohn and Schine operated outside the normal
rules for Senate staff. Rather than work out of the
subcommittee's limited quarters, they had rented office space
in a nearby office building. Schine, as a consultant, was not
on the subcommittee's payroll and could not be reimbursed for
his expenses. Watt noted his ten-
dency to place long-distance calls to notify friends whenever
he expected live television coverage of the subcommittee's
hearings. ``Then when the bill came, it was personal, I wasn't
going to pay it,'' she explained. ``So Roy Cohn ended up paying
his telephone bills.'' Schine once signed Senator McCarthy's
name to a letter to the Senate Rules Committee asking
permission for Cohn and Schine to have access to the
``Senators' Baths,'' a pool and steam room reserved exclusively
for senators. When the chairman of the Rules Committee informed
Senator McCarthy that the request could not be granted,
McCarthy, who had known nothing about it, simply nodded and
said he knew that and would inform his staff.\11\
---------------------------------------------------------------------------
\11\ Ruth Watt oral history, 107-8; Nicholas von Hoffman, Citizen
Cohn (New York: Doubleday, 1988), 177-78.
---------------------------------------------------------------------------
That pattern of seeking special privilege continued after
Schine was drafted into the army as a private. Schine made
numerous requests for passes and release from basic training,
which Cohn demanded of army officials. Senator McCarthy, by
contrast, seemed indifferent to special treatment for Schine.
During a monitored telephone conversation in November 1953,
Senator McCarthy had told Army Secretary Stevens: ``For God's
sake, don't put Dave in service and assign him back to my
committee. If he could get off weekends--Roy--it is one of the
few things I have seen him completely unreasonable about. He
thinks Dave should be a general and work from the penthouse of
the Waldorf.'' Secretary Stevens had expected Senator McCarthy
to turn the Fort Monmouth investigation over to the army after
the initial inquiry, but began to suspect that Roy Cohn was
pursuing the investigation more aggressively as leverage to win
favors for Private Schine.\12\
---------------------------------------------------------------------------
\12\ Special Subcommittee on Investigations of the Government
Operations Committee, Special Senate Investigation in 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 10 (Washington, D.C.:
Government Printing Office, 1954), 377-78.
---------------------------------------------------------------------------
The resulting Army-McCarthy hearings were played out before
televised audiences. Only a few closed-door executive sessions
were held. Rather than leading the questioning, both Senator
McCarthy and Roy Cohn were called upon to testify. Reviewing
his own testimony, Cohn saw things that had managed to elude
him during his previous year as subcommittee counsel. ``I was
rambling, garrulous, repetitive,'' he admitted. ``I was brash,
smug, and smart-alecky. I was pompous and petulant.'' Cohn had
a similarly negative assessment of Senator McCarthy's
performance at the hearings: ``He complained bitterly of being
interrupted . . . and yet he came charging in on everyone
else's testimony time and again with his `point of order, Mr.
Chairman, point of order.' He used the words so often they were
taken up by countless comedians and had a vogue as a national
catch-phrase. His language toward his opponents was often less
than parliamentarian. He was verbally brutal where he should
have been dexterous and light; he was stubbornly unwilling to
yield points where a little yielding might have gained him
advantage; he frequently spoke before thinking of the effect of
his words; he was repetitious to the point of boredom.'' Cohn
recognized that McCarthy was addicted ``to dramatic techniques
in presenting information,'' and was ``impatient, overly
aggressive, overly dramatic. He acted on impulse. He tended to
sensationalize the evidence he had.'' The Senator ``would
neglect to do important homework and consequently would, on
occasion, make challengeable statements.'' These were the
qualities that McCarthy revealed to television audiences, and
that the army's counsel Joseph Welch employed so effectively
against him.\13\
---------------------------------------------------------------------------
\13\ Roy Cohn, McCarthy (New York: New American Library, 1968),
181, 208, 223, 275, 277.
---------------------------------------------------------------------------
Investigating Communists in the Defense Industry
The Army-McCarthy hearings consumed the better part of the
session and delayed other subcommittee business, but Senator
McCarthy was anxious to develop a new investigation of
Communist involvement in the defense industry. Both before and
after the Army-McCarthy hearings, the subcommittee looked into
the activities of the United Electrical, Radio, and Machine
Workers (UE), which had organized workers at General Electric
and Westinghouse plants. UE had once been the third largest
union in the Congress of Industrial Organizations (CIO). In
1941, UE president James B. Carey had been defeated for
reelection largely after refusing to follow the Communist
party's line on foreign policy. The union had supported the war
effort throughout World War II, but in 1946 it conducted a
massive strike against GE for increased wages. During the
Eightieth Congress (1947-1948) enactment of the Taft-Hartley
Act required union leaders to sign non-Communist affidavits,
and several top UE officials had refused to comply. In 1948 the
House Un-American Activities Committee had investigated the UE
and heard testimony that the union's secretary-treasurer Julius
Emspak and director of organization James J. Matles were
members of the Communist party. Both Emspak and Matles cited
the Fifth Amendment in refusing to answer the committee's
questions. Senator McCarthy entered in the debate in 1950 when
he denounced the United Electrical union as ``one of America's
worst security risks,'' and accused the UE of representing the
``interests of the Kremlin'' rather than of GE workers and
management.
Prior to the subcommittee's investigation, the Senate Labor
Committee had also looked into the role of Communists in the
UE. By then the CIO had expelled the UE for being Communist
dominated. A rival International Union of Electrical, Radio,
and Machine Workers (IUE), headed by the UE's former president
Carey, won elections in most General Electric plants, although
the UE remained the bargaining agent at GE plants in Lynn,
Massachusetts; Erie, Pennsylvania; and Schenectady, New York.
In 1952 and 1953, articles in the Saturday Evening Post and
Reader's Digest had linked the UE with ``spies in our defense
plants.'' In 1954, the IUE defeated the UE for the right to
represent GE workers in Schenectady. As a result of this
turmoil, General Electric concluded that its labor problems
stemmed in large part from poor communications with its
employees and the community. In September 1954, GE hired the
actor Ronald Reagan (who at that time was known as a liberal
anti-Communist) to promote better public relations through
speaking engagements and by hosting its weekly television
program, General Electric Theater.\14\
---------------------------------------------------------------------------
\14\ Congressional Record, 81st Cong., 2nd sess., A7002; Herbert R.
Northrup, Boulwarism: The Labor Relations Policies of the General
Electric Company, Their Implications for Public Policy and Management
Action (Ann Arbor: University of Michigan Bureau of Industrial
Relations, 1964), 7-49; Ronald L. Filippelli and Mark McColloch, Cold
War in the Working Class: The Rise and Decline of the United Electrical
Workers (Albany: State University of New York Press, 1995), 141-66; and
Ronald W. Schatz, The Electrical Workers: A History of Labor at General
Electric and Westinghouse, 1923-60 (Urbana: University of Illinois
Press, 1983).
---------------------------------------------------------------------------
Aftermath
Although Senator McCarthy had planned to resume holding
executive and public sessions in Boston after the Army-McCarthy
hearings had ended, Senate Republican Leader William F.
Knowland denied permission for committee hearings to be held
outside of Washington for the remainder of the session. At that
juncture, the subcommittee also underwent major changes in its
staff.
Under pressure, Roy Cohn resigned as chief counsel in
August 1954. Cohn never again held a government post. As a
private attorney he was frequently reprimanded for unethical
conduct, and was tried and acquitted in 1964, 1969, and 1971 on
charges of conspiracy, bribery and fraud. He was eventually
disbarred in 1986, just prior to his death. In his books and
later interviews, Cohn conceded that Senator McCarthy's
``penchant for the dramatic'' and exaggerated claims and
accusations had invited much of the critical storm that
engulfed them, but he always insisted that McCarthy had
performed ``a substantial service to the country by alerting
the country to the menace of communism when most people in this
country were not tuned in to how deadly it was.'' Cohn
discounted charges that their investigations had ruined people
and cost them their livelihood. ``Name one,'' he challenged.
Looking back, Cohn concluded: ``I can live to be 300 years old
and do all sorts of things. . . . and when I die, when I'm
referred to, it's going to be as Joe McCarthy's counsel.'' \15\
---------------------------------------------------------------------------
\15\ Cohn, McCarthy, 94-95; New York Times, August 3, 1986;
Washington Post, December 22, 1985.
---------------------------------------------------------------------------
G. David Schine, whose army service caused so much
commotion, disengaged from the political sphere and spent the
rest of his life in Hollywood as a motion picture producer,
winning an Academy Award for The French Connection. He also
made a guest appearance as himself on a television episode of
Batman. In 1996 Schine and his wife died in the crash of a
small plane piloted by one of their sons.
As Cohn and Schine departed from the subcommittee, Robert
F. Kennedy, who had resigned from the staff in 1953, returned
as minority counsel. Kennedy wrote the final report on the
Army-McCarthy hearings and then became chief counsel when
Democrats took the majority in the next Congress. He rose to
national prominence as counsel during the labor racketeering
investigations, managed his brother's presidential campaign,
served as attorney general, and was elected senator from New
York in 1964. As a senator he served on the Government
Operations Committee but not on the Permanent Subcommittee on
Investigations. In 1968, Robert Kennedy ran for the Democratic
nomination for president of the United States. On the night
that he won the California primary, he was assassinated in Los
Angeles' Ambassador Hotel, by coincidence one of the Schine
family's chain of hotels.
In July 1954, Vermont Republican Senator Ralph Flanders
introduced a resolution calling for the censure of Senator
Joseph R. McCarthy for conduct unbecoming a senator. The
resolution was referred to a select committee chaired by Utah
Republican Senator Arthur Watkins. In September, after the
Senate had recessed, the Watkins committee issued a report
recommending the senator's censure. Following the November
congressional elections, when Democrats won narrow majorities
in both the Senate and House, the Senate returned in a lame
duck session to debate the Watkins report and vote on censure.
Friends from both parties appealed to Senator McCarthy to avoid
censure by apologizing for his conduct, but he would hear none
of it. On December 2, 1954, the Senate voted 67 to 22 to
condemn McCarthy's conduct for having been ``contrary to
senatorial tradition.'' With his party losing the majority,
McCarthy also lost the chairmanship of the Permanent
Subcommittee on Investigations. Reporters ignored his speeches
and press releases and his name disappeared from the front
pages. His health and spirit declined rapidly and he died in
1957 at the age of forty-eight.
Senator McCarthy's most lasting legacy came in the form of
judicial review of the rights of witnesses before congressional
investigations. The chairman's single-minded focus on possible
sedition and espionage had made him impatient over governmental
efforts to treat the accused with due process. When informed
that rules of the Civil Service Commission forbade the release
of details of any loyalty hearing, Senator McCarthy said: ``I
do not care what is in any loyalty review board memorandum.
This man is ordered to produce certain information. He will
produce it or his case will go to the grand jury.'' The loyalty
boards, he insisted, ``are not running this committee. The
senators on the committee are running it.''
Along those lines, the senator defined the constitutional
right against self-incrimination as incriminating in itself. He
instructed witnesses that they could claim the Fifth Amendment
only if they honestly felt that answering would incriminate
them. Then he took the position that anyone who claimed self-
protection had admitted guilt, and demanded that they be
dismissed from any government-related employment.
At the time that Senator McCarthy made these assertions,
the weight of judicial precedent was on his side. Dating back
to the Teapot Dome investigations, the Supreme Court had ruled
in McGrain v. Daughtery (1927) that a congressional committee
could subpoena anyone, even those who were not government
officials or employees, to testify. 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. In 1940, Congress passed the Alien
Registration Act (or Smith Act) that had made it illegal to
advocate overthrowing the government by force or violence. In
1948 the Justice Department indicted 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.'' In Dennis v. U.S. (1951), the Supreme Court upheld
those convictions on the grounds that the government's power to
prevent an armed rebellion enabled it to subordinate free
speech. During the next six years, the government indicted 126
individuals for being members of the Communist party. Congress
had also passed the Mundt-Nixon Act in 1950, which barred
Communist party members from employment in defense facilities,
denied them passports, and required them to register with the
Subversive Activities Control Board. In Rogers v. U.S. (1951)
the Supreme Court ruled that a witness who admitted having been
treasurer of a local Communist party could not claim privilege
under the Fifth Amendment when asked to whom she had given her
records. Her initial admission had waived her privilege and she
was guilty of contempt for failing to answer.
These rulings supported Senator McCarthy's operating
assumption that those who belonged to the Communist party were
committed to overthrowing the government by force and violence,
and that those who claimed the Fifth Amendment must be guilty
of the accusations made against them. He believed that the
subcommittee gave him license to interrogate anyone regarding
any possible links to communism, and that nothing could be too
private or personal in nature to escape notice. The need to
uncover disloyalty, in his mind, justified all means available,
including the verbal abuse and intimidation of witnesses, and
the firing of suspected subversives without due process.
In 1957, the Supreme Court acted to restrict the
government's ability to prosecute under the Smith Act and
broaden the rights of congressional witnesses. On June 17,
1957, a majority led by Chief Justice Earl Warren handed down a
series of sweeping decisions. In Yates v. U.S. (1957) it
reversed the convictions of fourteen Communist party members
under the Smith Act, finding that joining the Communist party
was not tantamount to advocating the overthrow of the
government by force and violence. Thereafter, the Justice
Department ceased all further indictments under the Smith Act.
In Watkins v. U.S. (1957), the Supreme Court bolstered the
rights of witnesses by insisting that an investigating
committee had to demonstrate a legislative purpose in order to
justify probing affairs, that public ``education'' was
insufficient reason to force witnesses to answer questions
under the penalty of being held in contempt, and that the Bill
of Rights applied to anyone subpoenaed by a congressional
committee. Despite Senator McCarthy's repeated threats that
witnesses would be imprisoned for perjury or contempt, not a
single witness went to jail for testimony given to the
subcommittee during his chairmanship. Several were tried for
contempt, but their convictions were all overturned on appeal.
It was a noticeably subdued and cooperative Joseph McCarthy
who attended the organizational meeting of the Permanent
Subcommittee on Investigations on January 24, 1955, as ranking
minority member rather than chairman. In that executive session
(not included in these volumes since it occurred outside of the
Eighty-third Congress), the new chairman, Senator John
McClellan, announced his intention to address unfinished
business left pending from the previous Congress. As Senator
McClellan turned to Senator McCarthy and to James Juliana, the
new minority counsel, they engaged in these valedictory
remarks:
Senator McClellan. Let me say to you now that you two are
certainly familiar with these files, and I mean the things that
are unfinished and need attention. We want your wholehearted
cooperation, Joe and Jim, in calling to our attention what in
your judgment needs further work of this committee. I am not
familiar with them.
I want your wholehearted cooperation in these matters
because there is no desire on my part to evade any
responsibility that we have here. We are going through with it,
whatever comes before us. I am not interested in any Democrat
who has in the present administration or in the past
administration as such, in no action that smacks of corruption
or waste or inefficiency or anything else. I am prepared to
defend or shield and I do not--there are a lot of things I
don't know, and of course the work of the committee will find
some other things as we go along. I am sure that every member
of this committee will go into anything that needs our
attention and any duty with which we are charged. I invite your
wholehearted cooperation in this field.
Beyond that now, I have nothing further.
Senator McCarthy. I have already instructed Jim here to
give you all the available information. He cannot do that just
on the spur of the moment, but I think the chair knows that I
have not tried to protect either the Eisenhower administration
or the Truman administration. As far as I am concerned, I agree
with the chair that politics plays no part in this. If we find
a wrongdoing, I certainly will call it to your attention.
Donald A. Ritchie,
U.S. 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)
Willliam 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 HIRED 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)
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, 1954) (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)
WITNESSES WHO TESTIFIED IN EXECUTIVE SESSION, 1954
Adam, John
Alfred, Benjamin
Allen, Harold C.
Ault, Paul
Ayer, Frederick, Jr.
Babirak, John
Barbour, W.
Bellino, Carmine
Belsky, Dr. Marvin Sanford
Belton, Lamuel
Berry, L.E.
Beynon, Mary Stella
Bolys, Victor S.
Briney, Harold K.
Brooks, Rodney Avram
Brown Ben H.
Brown, Lt. Col. Chester T.
Brown, Genevieve
Cassano, Edwin Allen
Cavalieri, Renaldo
Chandler, Lt. Col. Homer B., Jr.
Cohn, Roy M.
Dash, Harriman H.
DeCesare, Dante
Delos, William Vincent
Donaldson, Alyn
Drumright, Everett F.
Finestone, Max
Flores, Iris
Furry, Wendell H.
Garfield, Edwin
Goodall, Jack
Gragis, Peter A.
Gregory, Alexander
Heller, Alvin
Hoag, Diantha
Holmes, Yates
Johnson, William S.
Kalasz, Markus
Kamin, Leo J.
Kantrowitz, Leo
Krummel, Lillian Garcia
LaFortune, Robert H.
Linfield, Pvt. David LaPorte
Lydon, Peter T.
Maglin, Gen. W.H.
Martz, Lt. Com. T.J.
Mattson, Joseph O.
Mazzei, Joseph
Mazzei, Mary
McGee, Frank M.
Moore, George Frederick
Morgan, William J.
Nabeshka, Karl T.
Nestler, Frank
Nicko, Andrew
Nihart, Lt. Col.
Nisula, Waino S.
Oram, Charlotte
Pallet, Simon
Pappas, Theodore
Parris, Lawrence W.
Passikoff, Louis
Peek, Sallie Fannie
Pernice, John E.
Picucci, Joseph A.
Quintana, Benito Sera
Quirini, Helen
Reston, James B.
Riggi, Michael
Rivers, Charles
Rubinstein, Sidney
Russiano, Thomas B.
Schine, J. Meyer
Seaton, Fred A.
Sille, Cyril
Slater, Joseph
Slater, Maurice
Smedburg, Capt. W.R.
Smith, James H., Jr.
Smith, Dr. Newbern
Smith, Col. Vernon M.
Sokolsky, George E.
Springfield, Lt. Col. R.W.
Suokko, Waino E.
Szabo, John
Thomas, Herman E.
Thomas, Lewis B.
Torrey, Florence D.
Townsend, Allan E.
Trammell, Lt. Col. Charles M.
Valli, Philip
Wallach, John
Weiner, Dr. Oscar Roy
Wojchowski, Charles
Woodward, Capt. W.J.
Wright, Theodore
Zwicker, Brig. Gen. Ralph W.
PUBLIC HEARINGS OF SENATE PERMANENT
SUBCOMMITTEE ON INVESTIGATIONS,
PUBLISHED IN 1954
Army Signal Corps--Subversion and Espionage: February 23-24,
1954
Army Signal Corps--Subversion and Espionage: March 1, 5, 1954
Army Signal Corps--Subversion and Espionage: March 10-11, 1954
Army Signal Corps--Subversion and Espionage: November 4, 1954
Subversion and Espionage in Defense Establishments and
Industry,
Part 1: November 19, 1953, January 15 and 16, 1954
Part 2: February 19 and 20, 1954
Part 3: July 19 and August 12, 1954
Part 4: December 7, 1954
Part 5: December 8, 1954
Part 6: July 20 and August 6, 1954
Part 7: January 3, 1955
Part 8: January 3, 1955
Part 9: January 15, 1954
Special Senate Investigation on Charges and Countercharges
Involving: Secretary of the Army Robert T. Stevens, John G.
Adams, H. Struve Hensel, Senator Joe McCarthy, Roy M. Cohn and
Francis P. Carr (Army-McCarthy Investigation), supplement:
April 22, 1954; part 1: March 16, April 22, 1954; part 2: April
22, 1954; part 3: April 23, 1954; part 4: April 23, 1954; part
5: April 26, 1954; part 6: April 26, 1954; part 7: April 27,
1954; part 8: April 27, 1954; part 9: April 28, 1954; part 10:
April 28, 1954; part 11: April 29, 1954; part 12: April 29,
1954; part 13: April 30, 1954; part 14: April 30, 1954; part
15: May 3, 1954; part 16: May 3, 1954; part 17: May 4, 1954;
part 18: May 4, 1954; part 19: May 5, 1954; part 20: May 5,
1954; part 21: May 6, 1954; part 22: May 6, 1954; part 23: May
7, 1954; part 24: May 10, 1954; part 25: May 10, 1954; part 26:
May 11, 1954; part 27: May 11, 1954; part 28: May 12, 1954;
part 29: May 12, 1954; part 30: May 13, 1954; part 31: May 13,
1954; part 32: May 14, 1954; part 33: May 14, 1954; part 34:
May 17, 1954; part 35: May 17, 1954; part 36: May 24, 1954;
part 37: May 24, 1954; part 38: May 25, 1954; part 38: May 25,
1954; part 39: May 25, 1954; part 40: May 26, 1954; part 41:
May 26, 1954; part 42: May 27, 1954; part 43: May 27, 1954;
part 44: May 28, 1954; part 45: May 28, 1954; part 46: June 1,
1954; part 47: June 1, 1954; part 48: June 2, 1954; part 49:
June 2, 1954; part 50: June 3, 1954; part 51: June 3, 1954;
part 52: June 4, 1954; part 53: June 4, 1954; part 54: June 7,
1954; part 55: June 7, 1954; part 56: June 8, 1954; part 57:
June 8, 1954; part 58: June 9, 1954; part 59: June 9, 1954;
part 60: June 10, 1954; part 61: June 10, 1954; part 62: June
11, 1954; part 63: June 11, 1954; part 64: June 14, 1954; part
65: June 14, 1954; part 66: June 15, 1954; part 67: June 15,
1954; part 68: June 16, 1954; part 69: June 16, 1954; part 70:
June 17, 1954; part 71: June 17, 1954; Composite Index: January
3, 1956.
WITNESSES WHO TESTIFIED IN PUBLIC SESSION, 1954
Alfred, Benjamin
Allen, Harold C.
Arsenault, Jean, Jr.
Ault, Paul
Babirak, John
Belgrave, Gordon
Belsky, Dr. Marvin Sanford
Beynon, Mary Stella
Bolys, Victor
Brandshear, Dewey F.
Briney, Harold K.
Dash, Harriman
DeCesare, Dante
Eagle, Ruth
Fernandez, Emanuel
Friedlander, Sidney
Furry, Wendell H.
Garfield, Edwin
Gebhardt, Joseph Arthur
Glatis, James W.
Gragis, Peter A.
Gregory, Alexander
Heiston, William L., Jr.
Heller, Alvin J.
Hoag, Diantha
Inslerman, Felix A.
Kalasz, Marcus
Kamin, Leon J.
Kantrowitz, Leo
LaFortune, Robert
Linfield, David LaPorte
Lydon, Peter Tom
Markward, Mary Stalecup
Mattson, Joseph
Mazzei, Joseph D.
McGee, Frank Mason
Middleton, Rufus E.
Moss, Annie Lee
Nestler, Frank
Nisula, Waino S.
Northrop, Robert Pierson
Oram, Charlotte
Owens, Arthur Lee
Pallet, Simon
WASTE AND CORRUPTION--DEVELOPMENT OF ALASKA
[Editor's note.--In an effort to end the investigation of
Fort Monmouth, Vice President Richard Nixon met with Senator
McCarthy on December 30, 1953, and urged a widening of the
subcommittee's probes beyond the issue of communism in
government. Senator McCarthy then told reporters that he
planned to pursue fraud and mismanagement in government
operations in the territory of Alaska, and that he was
considering going to Alaska once the weather had improved.
Scheduled for March 1954, the public hearings were never held
due to the subcommittee's preoccupation with matters related to
Fort Monmouth. The subcommittee then referred the Alaska
investigation to the Senate Banking and Currency Committee,
which conducted its own hearings.
A certified public accountant, Carmine Bellino (1905-1990)
had served as a special agent in the Federal Bureau of
Investigations from 1934 to 1945, becoming an administrative
agent to FBI Director J. Edgar Hoover. From 1945 to 1947 he was
assistant director of the Reconstruction Finance Corporation
and the War Assets Administration. He established a private
accounting practice in 1947 but soon afterwards was called back
to government service by the Truman committee and continued to
assist its successor, the Permanent Subcommittee on
Investigations. He was later an investigator during the
Senate's labor racketeering investigation in the 1950s, special
counsel to Presidents John F. Kennedy and Lyndon Johnson, 1961-
1964, chief investigator for the Senate Watergate Committee,
1973-1974, and chief investigator for the Senate Judiciary
Committee, 1978-1981.]
----------
WEDNESDAY, JANUARY 13, 1954
U.S. Senate,
Permanent Subcommittee on Investigations
of the Committee on Government Operations,
Washington, DC.
The subcommittee met (pursuant to Senate Resolution 40,
agreed to January 30, 1953) at 10:00 a.m., in room 357, Senate
Office Building, Senator Joseph R. McCarthy, presiding.
Present: Senator Joseph R. McCarthy, Republican, Wisconsin;
Senator Everett McKinley Dirksen, Republican, Illinois.
Present also: Francis P. Carr, executive director; Roy M.
Cohn, chief counsel; Karl Baarslag, research director; Herbert
S. Hawkins, investigator; Ruth Young Watt, chief clerk.
TESTIMONY OF CARMINE BELLINO
Mr. Cohn. Mr. Bellino, you are consulting accountant for
the committee? Is that right?
Mr. Bellino. Yes, sir.
Mr. Cohn. Have you and Mr. Hawkins, an investigator for the
committee, been in Alaska in the last few months?
Senator Dirksen. Roy, would you mind--I wonder if it
wouldn't be well, for the purpose of the record, to qualify the
accountant with respect to background.
Mr. Cohn. Could you tell us briefly something about your
accounting experience. I believe you were with the FBI, and
some other valuable experience.
Mr. Bellino. I am a certified public accountant in the
State of New Jersey and the District of Columbia. I had seven
years of public accounting with a public accounting firm in New
York City; seven years in my own business; eleven years with
the FBI; five and a half as administrative assistant to Mr.
Hoover; assistant director of the investigation division of the
RFC and WAA; and I have been on the Hill since 1947 on various
major investigations.
Mr. Cohn. Now, you and Mr. Hawkins were up in Alaska. When
did you arrive there?
Mr. Bellino. I arrived in Juneau about November 2, 1953.
Mr. Cohn. And from that time, did you conduct an
investigation of various expenditures of money and situations
involving the expenditure of government funds in connection
with the development of Alaska?
Mr. Bellino. Yes, sir.
Mr. Cohn. And from that investigation, as a result of that
investigation in which Mr. Hawkins participated, did you
uncover evidence of waste and corruption?
Mr. Bellino. Yes, sir.
Mr. Cohn. Now, I wonder if you could tell us the name of
the principal person involved in the transaction which you
addressed yourself to?
Mr. Bellino. I might explain this way, Senator. I was sent
to Alaska at the initiation of the Department of Interior on
the basis of suspicions of their man, Don R. Wilson, who is
head of the Alaska Public Works Administration, which has under
the law an authorization of $70 million. They have spent up to
the present time approximately $45 million and have about $7
million more authorized and appropriated.
[Off-record discussion.]
Mr. Bellino. In looking into Wilson, we found that Mr.
Kenneth Kadow----
Mr. Cohn. He is the man involved in this?
Mr. Bellino. I will explain just how we got into him. Mr.
Kadow was interested in certain housing developments in
Fairbanks and Anchorage, Alaska, and he was able to get from
Mr. Wilson the installation of utilities, street paving,
sidewalks, water mains, etc., and we couldn't understand how a
private venture could get government funds and pay only 50
percent of the actual cost. It was learned that Mr. Kadow had
been chairman of a field committee----
The Chairman. I missed something. You said government funds
and pay only 50 percent of the cost----
Mr. Bellino. Under the Alaska Public Works Act, the
communities and public bodies that participate in public works
may be charged at the discretion of Alaska Public Works
Administration anywheres from 25 to 75 percent of the cost.
They have established a policy of only 50 percent because the
law said on an overall basis it should not be any more than 50
percent. What they have been doing is putting in utilities and
have the public body pay 50 percent to the government by giving
them notes at interest of about 2 percent.
Kadow was sent to Alaska, according to his initial
statement--and I am emphasizing this, at the request of former
Secretary of the Interior, [Julius] ``Cap'' Krug. He has put
that in a letter that ``Cap'' Krug sent him up there. When I
started questioning him with a tape recorder he changed
immediately and said it was Mr. Warne, William A. Warne.
Mr. Cohn. He is now the head of the Stassen Mission in
Iran?
Mr. Bellino. Yes, sir.
Kadow's job in Alaska was to coordinate all the activities
of the Interior Department agencies. Now, there is a point that
is unusual and that is that the governor's function in Alaska
is to coordinate all activities, including the territorial
units and agencies of the Interior Department.
Senator Dirksen: Kadow, was he on the Interior payroll?
Mr. Bellino. Yes, sir.
Senator Dirksen. And he had the title of coordinator----
Mr. Bellino. Director of the field service. He was the only
one in the office besides D'Epiro, his assistant and a
secretary. Later on he had a public relations man that was on
the staff of the field service.
However, in addition to the governor, in the development of
Alaska, they also had a board of which George Sunbourg was
consultant. They had the existing function of developing
Alaska.
Kadow was sent up there especially to initiate various
projects, one of the first being housing and I found in going
through the various records and documents that we have here
that he was not only interested in getting people to become
interested in Alaska, but he would go so far as to take them by
the hand, get cost prices, write letters, analyze financial
set-ups and get financing for them. He did everything possible.
In fact, at one point George Megrath, public relations man
wrote a letter----
Senator Dirksen. He wrote a letter to whom?
Mr. Bellino. William Dougherty, who is head of the public
relations office, Interior, here in Washington.
Senator Dirksen. When was that letter written?
Mr. Bellino. We have a copy of that.
Senator Dirksen. Identify it for the record.
Mr. Bellino. This is a letter dated May 5, 1959, to William
J. Dougherty.
Senator Dirksen. 1959?
Mr. Bellino. It is typed 1959, but it should be 1949, in
which he states:
Particularly, did I warn Kadow against continued traffic
with a Mr. Cole with whom he had a joint housing proposition
and who is a shareholder in the Newcastle Engineering Company
of Newark, Delaware, a corporation having Kadow as president
and Mrs. Kadow as vice-president along with Cole who is another
vice-president. Incidentally, the man whom Kadow has been
attempting to locate in Alaska as the Department Counsel is
another officer and stockholder in the same corporation, a Mr.
Mackey.
As he pointed out----
Mr. Cohn. Let me see if I can ask you about a couple of
points which will interest them particularly and then you can
go on.
One project which you told us about, that is involving the
U.S. Tin Company--is that right?
Mr. Bellino. Yes, sir.
Mr. Cohn. Does the U.S. Tin Company operate a mine or
attempt to operate a mine up in Alaska?
Mr. Bellino. The U.S. Tin Corporation--I might say that tin
was discovered on the property in about 1903.
Senator Dirksen. Tin was discovered in 1903. Where?
Mr. Bellino. At Lost River, Alaska. That is ninety miles
northwest of Nome, possibly forty miles from Siberia.
Senator Dirksen. And how extensive was the discovery?
Mr. Bellino. The ore has been of a very poor grade.
However, in 1944 the Bureau of Mines, by drilling, discovered a
granite cupola where they believed that possibly there was a
higher grade of ore, but the exploration was discontinued until
1950 when the Defense Material Procurement Act was passed which
permitted acquiring critical material and the government
advancing funds in that connection. In other words, apparently
they were of the belief it was not necessary that a corporation
be financially sound, but merely that here is critical material
which we could use for our stockpile.
Mr. Cohn. They selected this one company, the U.S. Tin
Corporation, and the government has given to that a
considerable amount of money?
Mr. Bellino. Yes, sir.
Senator Dirksen. Who is the U.S. Tin Corporation?
Mr. Bellino. The U.S. Tin Corporation was organized in
1949. The principal officer is one Harry Fishnaller. The other
two principal officers at that time were Fred Furey and a
Robert A. F. McIntosh. They were the principal ones.
Mr. Cohn. Is Kadow in that company now?
Mr. Bellino. He is now president.
Mr. Cohn. When did he become president?
Mr. Bellino. He became president about October 2, 1951.
Mr. Cohn. How long after he left the government was that?
Mr. Bellino. Well, in connection with his employment, I
might point out first in connection with Kadow's employment.
Kadow left Interior March 15, 1951. He started to plan on
leaving Interior in July 1950. We have a letter which he wrote
to Cash Cole and in the letter he asked Cash Cole to talk to
the Mortensen Construction Company, who was one of those
interested in housing, to see whether they would be favorable
to Kadow's joining up with them.
The Chairman. Who is Cash Cole?
Mr. Bellino. Cash Cole is the Alaskan who owned the land
Kadow initially wanted to buy--either to buy from him and start
a housing development or get him started in a housing
development. Kadow is--actually the letters indicate he was
financial advisor to Cash Cole.
The Chairman. Was Kadow in a position to influence or aid
U.S. Tin in getting the federal monies to start this mining
project?
Mr. Bellino. Here is a letter dated January 27, 1951, from
Harry Fishnaller to the other officers of U.S. Tin, Bob and
Henry, in which he says:
Alaska representative of Secretary of Interior (Kenneth
Kadow) of great help to me. He says Lorain thoroughly sold on
our property and has convinced him (Kadow) of magnitude.
The Chairman. Do you know how much money Kadow has drawn
out of the corporation since he went in?
Mr. Bellino. He was supposed not to get a salary. However,
in October 1952, he arranged it so that he would get $1,500 a
month. I might say that under the contract no officer is
supposed to get anything until the mill and mine are in full
production, which was a period of thirty days.
The Chairman. Is he still getting $1,500 a month?
Mr. Bellino. Yes, sir.
The Chairman. And no tin is being produced?
Mr. Bellino. No tin at all. In fact, this one statement--
about June 5th, a telegram was sent from the mine
superintendent indicating the mill was operating on a test
basis. In other words, up to that point, 1952, they had not
been able to get the mill operating and suddenly they make it
operate on a test basis. It is not in production; it never has
been in production but Kadow told GSA that they were producing,
mining and milling, and on the basis of that mining and milling
they should begin to pay him $1,500 immediately.
From that point on they were supposed to be mining and
milling. Actually GSA went to Lost River and found they haven't
mined or milled one ton of ore whatsoever through the lode
operation.
The Chairman. Up to now, we have sunk about how much into
it?
Mr. Bellino. A little over $2 million.
The Chairman. And the U.S. engineer has long since
recommended that the project be dropped as a hopeless project;
that there was no tin there?
Mr. Bellino. There have been two recommendations to drop
the project on the part of GSA. However, as he wrote in one
letter that we have, he points out that ``I had a nice talk
today.'' This is a letter from Kadow.
The Chairman. The question is: Did the engineer recommend
that the project be closed up?
Mr. Bellino. This is after the project was to be closed up.
I want to mention who he said helped them.
Had a nice talk today with the guy that has been trying to
kill us off--he acts so friendly and nice that you'd never
guess he actually tried to cancel our contract two months ago--
Maull and Gumbel stopped it in its tracks with Nicoll's help.
Nic sure is our real friend.
The Chairman. Who is Nichols?
Mr. Bellino. J. S. Nichols, who is employed by the credit
and finance division, and who we have evidence of private
correspondence and who came to Kadow's office----
The Chairman. Was there a difference between our government
engineers as to whether or not the project should continue?
Mr. Bellino. There has been a difference to this extent.
One group felt that what they should do was explore the mine--
let's find out whether the granite dome has got valuable ore,
then consider putting money into it. Let's not put any
development into it. The other group wanted both. That was the
difference.
Senator Dirksen. Then to summarize one phase. While Kadow
was in government, he helped this corporation, the U.S. Tin
Corporation get money. After he had the money transferred over
to U.S. Tin, while there is a provision in the agreement of our
government that no officer can get money until thirty days
after tin is produced, he wrote untruthful letters to GSA,
which said he was now producing tin and on the basis of that
got $1,500 a month. Is that correct?
Mr. Bellino. Yes, sir.
Senator Dirksen. Does he have any other occupation?
Mr. Bellino. That is the important thing too. I might
mention when he submitted his resignation, about January 25,
1951, then he came to work--in fact, January 27, 1951, he
contacted Fishnaller as to definite employment. Fishnaller
agreed to take him on, while he was still in government
service.
He submitted his resignation as of January 27, 1951,
effective March 31, 1951.
The Chairman. Is he getting money besides the $1,500?
Mr. Bellino. Yes, sir. In fact he was getting money----
The Chairman. How much money is he getting and from whom?
Mr. Bellino. Mortensen Construction Company. Under
agreement of a partnership, he gets 25 percent interest in
anything done. Mortensen has interest in anything Kadow does.
The Chairman. Is Mortensen doing work for the government?
Mr. Bellino. Yes.
The Chairman. Was it doing work for the government when he
was a government official?
Mr. Bellino. Yes, sir, he helped them.
The Chairman. Did he have 25 percent interest at the time
he was a government official, who was negotiating with them?
Mr. Bellino. Senator, in that connection Mr. Kadow operated
on promises for the future so there is nothing definite to show
he definitely had an interest.
The Chairman. Then there was an agreement, was there? You
have letters to show it?
Mr. Bellino. Not that particular one. Another instance
gives inference that he must have had that agreement with
Mortensen.
The Chairman. Has he billed the government for liquor and
collected money for it?
Mr. Bellino. My recollection on some of the entertainment
for liquor and business dinners, as he called it--in fact,
Lorain, Bureau of Mines, I believe those were paid for but the
letters that I recall seeing from that time on, he was not
going to charge U.S. Tin anymore.
The Chairman. How much did he get from the government for
liquor and that sort of thing?
Mr. Bellino. Roughly, the bill on which that appeared
amounted to $1,600. However, the major portion of that was for
travel. I'd say roughly $200. I am not certain of that.
The Chairman. Did he also make claims for money with the
statement that he had water available when there was no water?
Mr. Bellino. Yes, sir.
The Chairman. Would you give us the story on that?
Senator Dirksen. There is a break here somewhere that we
have to pick up.
Number one, let's summarize for a moment. Tin was
discovered in Alaska, low grade form, way back----
Mr. Bellino. Yes, sir.
Senator Dirksen [continuing]. And somebody made the
suggestion that perhaps it ought to be developed.
Mr. Bellino. They had developed----
Senator Dirksen. Did the Bureau of Mines or anybody in the
government make a suggestion this might be developed?
Mr. Bellino. Yes, sir, the Bureau of Mines and the U.S.
Geological Services both.
Senator Dirksen. Number two, in 1949 three men organized a
company called the U.S. Tin Corporation.
Mr. Bellino. Yes, sir.
Senator Dirksen. It had no corporate life before that time?
Mr. Bellino. No, sir.
Senator Dirksen. It was organized under the laws of what
state?
Mr. Bellino. The state of Washington.
Senator Dirksen. Before that it was the Lost River Tin
Company, which just folded up without going through
liquidation.
Mr. Bellino. They just didn't do anything more on that.
Senator Dirksen. Now, this corporation had to have money to
sink a shaft and develop tin?
Mr. Bellino. Yes, sir.
Senator Dirksen. Where did they get the money and how did
they get it?
Mr. Bellino. When they began to operate it was merely a
placer operation. They didn't need much money. There was water
available to run it down the creek and then put it through the
mill and get it in concentrated form and ship it out.
Senator Dirksen. So out of their own capital structure they
probably raised that money?
Mr. Bellino. Yes, sir.
Senator Dirksen. Did they come to the government for money?
Mr. Bellino. They came to the government for money in the
latter part of 1950.
Senator Dirksen. To what agencies?
Mr. Bellino. They had to get the approval of the Department
of Interior on the basis of it being a critical item but the
money was----
Senator Dirksen. Did the Department of Interior approve it?
Mr. Bellino. Yes, sir.
Senator Dirksen. I presume it was in the form of an
application under the old Exploration Act for funds with which
to go ahead with exploration. How much did they ask for?
Mr. Bellino. Initially over $300,000.
Senator Dirksen. U.S. Tin Corporation asked for $300,000.
To whom was that application directed?
Mr. Bellino. I might mention in connection with the
application, Senator, in one of his letters, Harry Fishnaller's
letter to Bob and Henry, he stated:
Am enclosing an application blank. Don't think we can
answer all requirements as to statements, etc. Consult with
Henry Schaefer and Fred Loomis as to how we might answer or
side-step where we need to.
Henry Schaefer was connected with the Seattle Trust and
Savings Bank at that time.
I want to get to the point where he said what should be
left out of the application to get their thinking.
Senator Dirksen. That can come later.
They filed an application to a federal agency for $300,000.
Mr. Bellino. Yes, sir.
Senator Dirksen. Do you know who signed the application?
Mr. Bellino. I believe it was Mr. Walsh from the Emergency
Procurement Service.
Senator Dirksen. No, it would have had to be somebody in
the Tin Corporation.
Mr. Bellino. From the U.S. Tin Corporation, Harry
Fishnaller.
Senator Dirksen. This went to the Department of Interior?
Mr. Bellino. It went to the GSA, which was Jess Larson's
outfit.
Senator Dirksen. You said the Department of Interior had to
first approve it.
Mr. Bellino. They had to approve it. The project itself was
one coming under the Defense Procurement Act, you see. It
involved no money as far as the Department of Interior was
concerned.
Senator Dirksen. They did approve it under the Exploration
Act; then the application had to go where?
Mr. Bellino. The application went to GSA, which is now GSA,
it was then the Emergency Procurement Service.
Senator Dirksen. When was the application filed?
Mr. Bellino. It was filed in the early part of February
1951.
Senator Dirksen. February 1951! Was Mr. Kadow still in the
government service?
Mr. Bellino. Yes. In fact, we have a telegram to Harry
Fishnaller at government expense asking him to send the
application blank to him here in Washington and second to
advise him whether he could be at a meeting of the Geological
Services in Washington.
Senator Dirksen. This was 1951 or before?
Mr. Bellino. 1951.
Senator Dirksen. Now, when the application got to GSA, what
happened to it?
Mr. Bellino. When it got to GSA, it was reviewed and
eventually recommended on the basis of a 25 ton mill per day
project.
In other words, there was a considerable difference of
opinion whether the government should put a lot of money in
this project so they agreed to permit them to go ahead on a
test basis. ``Let's see if it is feasible to operate up
there.'' The climatic weather conditions were terrific, the
shipping and everything else. They felt it would not be
feasible to put it in full production. They permitted them to
start on a 25 ton basis. However, Mr. Lorain of the Bureau of
Mines in Juneau was against the 25 ton mill. The money they
were permitted to have would only be sufficient to operate that
type of mill. He was against the 25 ton mill. Mr. Kadow got his
instructions, but he said, ``Let's disregard the 25 tons; we
are going to build up to 100 tons on the basis of what we have
got.'' We have a letter where Mr. Lorain doubted the
feasibility of that very much.
As a result of proceeding on a 100 ton basis, they got
money for 25 tons, and naturally they had to ask for more money
later on. That is what happened. When GSA finally approved the
application for 25 tons test--they approved it about March 23,
1951----
Senator Dirksen. When was the money disbursed?
Mr. Bellino. The first money was a guarantee by GSA to the
bank, Seattle Trust Company. The bank was willing to stand 10
percent of this loss while the government would stand 90
percent. The bank, however, was willing to do that provided the
company got in production and produced by a certain time. When
the time came and the company failed to go into operation, the
bank said, ``We will not give them any more money.''
At that time $157,000 out of $300,000 some odd guaranteed
had been spent, so they came back to Washington and they got
GSA----
Senator Dirksen. Wait. How long after this was approved,
namely in February or March 1951 was it before the bank
indicated they could get no more money under this guarantee?
Mr. Bellino. About August 1951.
Senator Dirksen. They had roughly six or seven months to
operate?
Mr. Bellino. Actually, their operation would not have begun
until July. If it was a mine which had been able to operate and
able to deliver what they said they could deliver, they should
have begun to operate by the first of July.
Senator Dirksen. By August there was no actual production?
Mr. Bellino. No, sir. Never has been. The Seattle Bank said
they would disburse no more money. GSA, however, got them to
agree to loan $10,000 more but this time GSA was responsible
for 95 percent so the bank's loss, on the outside, would be 5
percent. At 6 percent interest, the bank was doing pretty good.
Senator Dirksen. Was that money all spent--approximately
$250,000 or $300,000?
Mr. Bellino. $257,000, I think, was gotten and spent.
Senator Dirksen. With that additional money, how long did
they run?
Mr. Bellino. They have been trying to run ever since 1951.
They came back into Washington in the latter part of November
1951 for a $35,000 advance. In fact, on one of the letters he
says:
I had a new idea. Sell GSA on this.
Instead of having the bank give them money to pay interest,
the government was paying the interest, the corporation never
did pay interest, they said:
Let's have GSA advance the money to use monthly as we need
it and pay GSA interest unless they indicate we don't have to
pay interest.
It was finally agreed that they pay 4 percent interest.
They never did pay the interest.
Senator Dirksen. With this $35,000 was any tin produced?
Mr. Bellino. There was never any tin produced.
Senator Dirksen. Now, they came back for more money?
Mr. Bellino. Yes, sir.
Senator Dirksen. How much?
Mr. Bellino. I believe the next amount was two hundred and
some thousand.
Senator Dirksen. What happened to that application?
Mr. Bellino. That was the time about February 1952 when Mr.
Bourret recommended that they stop giving any more funds to the
development.
Senator Dirksen. Who is Mr. Bourret?
Mr. Bellino. He is with the GSA, one of the mining
engineers.
Senator Dirksen. Did they get the money or didn't they?
Mr. Bellino. They got the money.
Senator Dirksen. Notwithstanding his objection?
Mr. Bellino. Yes, sir.
Senator Dirksen. Was the money spent?
Mr. Bellino. Yes, sir.
Senator Dirksen. How long did they take to spend that
money?
Mr. Bellino. It didn't take them long because they were
back in July for about $900,000 more.
Senator Dirksen. Now, by fall 1952, they had spent $2
million?
Mr. Bellino. I wouldn't say--they were getting close to it.
Senator Dirksen. How much tin was produced between November
1951 to November 1952?
Mr. Bellino. Never tin--placer tin on placer ground
producing tin of a very poor grade.
Senator Dirksen. How much?
Mr. Bellino. They have gotten on an average about forty
tons.
Senator Dirksen. Altogether forty tons?
Mr. Bellino. A year--not out of this project however. In
that area.
U.S. Tin operated that also.
Senator Dirksen. Out of these funds?
Mr. Bellino. Yes, sir.
Senator Dirksen. They got forty tons of tin?
Mr. Bellino. Concentrate. They ran out of the next $200,000
and came back for $900,000.
Senator Dirksen. When did they come back?
Mr. Bellino. They came back for the $900,000 sometime in
the latter part of 1952.
Senator Dirksen. What happened to that application?
Mr. Bellino. That was also approved.
Senator Dirksen. So they got another $900,000. How long did
that run, if you know or roughly?
Mr. Bellino. Well, they were back in--well, that would be
for 1953.
Senator Dirksen. Up to the present time they have spent
around two million dollars altogether?
Mr. Bellino. That is including the money they are spending
at the present time.
Senator Dirksen. Now, what is the value of the ore
concentrate--you say they got forty tons?
Mr. Bellino. Approximately forty tons a year. I don't have
the actual value in dollars.
Senator Dirksen. Have you any notion as to what ore
concentrate is worth in tons?
Mr. Bellino. Of course, the concentrate has to be put into
tin and the tin price now is at least $1.05 a pound. There
never has been more than enough to do any more than pay off
part of the bank loan. That is the most they have ever been
able to do.
Senator Dirksen. Let's find out what the market is for ore
concentrate. We have the actual amount of the sales?
Mr. Bellino. Yes, sir.
Senator Dirksen. Now, I have got one other question. This
is with reference to Mr. Kadow. He filed his resignation in
January 1951, effective March 31, 1951. Did he actually go off
the rolls in March 1951?
Mr. Bellino. Subsequent to that resignation letter, he sent
a telegram about March 13th requesting that his resignation be
effective March 15th. Then he entered into an agreement with
Mortensen and U.S. Tin on March 16th.
Senator Dirksen. When did he become president of U.S. Tin?
Mr. Bellino. He was general manager on March 16, 1951. He
became president about the latter part of September or October
2, 1951.
Senator Dirksen. Now then, after he became general manager
on March 16th, 1951, the company actually then got the $200,000
you referred to in 1952?
Mr. Bellino. Yes, sir.
Senator Dirksen. So your recollection would indicate that
U.S. Tin got $1,100,000 within a short period of time after Mr.
Kadow's resignation from the government service became
effective.
Mr. Bellino. Senator, altogether he got $2,900,000.
Senator Dirksen. I am speaking about these two items?
Mr. Bellino. Yes, sir.
[Off-record discussion.]
Senator Dirksen. Did he have a written contract with U.S.
Tin when general manager?
Mr. Bellino. I think initially it was oral and eventually
he entered into a written contract.
What I want to explain in connection with U.S. Tin was that
what I did there is take everything I could. I did not look at
the records or audit the record. The GSA auditor was going to
do that and we haven't gotten his report as yet.
The Chairman. Do you know when he went with U.S. Tin on the
sixteenth of March if he had a contract either oral or written,
and if so, how much he was to get?
Mr. Bellino. How much stock he was to get?
The Chairman. What was he getting from U.S. Tin the day
after he left the government?
Mr. Bellino. The records indicate that the corporation gave
him gratis 8,500 shares of stock in this corporation.
The Chairman. How many shares were outstanding?
Mr. Bellino. Three hundred thousand authorization. There
was outstanding, I believe, somewheres around 180,000; balance
was all optioned.
The Chairman. So he got about 10 percent of the outstanding
stock?
Mr. Bellino. Yes, sir.
The Chairman. And do you know what that stock was worth, if
anything?
Mr. Bellino. The stock had book value of $1.00 a share. The
stock had a par value of $1.00 a share. The book value was
minus zero. However, they were selling the stock not less
than--from $3.00 a share to as much as $6.00 a share. The
market value was between $3.00 and $6.00 a share.
The Chairman. Were they actually selling stock at that time
at that figure?
Mr. Bellino. At that date I do not know. Subsequent to
getting the money from the government they began to sell stock
to other individuals from $3.00 to $6.00 a share.
Mr. Cohn. Did Kadow sell his?
Mr. Bellino. Kadow, according to tax returns, sold some of
his.
Mr. Cohn. How?
Mr. Bellino. Not less than $3.00 a share.
Mr. Cohn. And he paid zero?
Mr. Bellino. Yes, sir.
Mr. Cohn. What was his consideration?
Mr. Bellino. Actually, it had been his help to the
corporation.
Mr. Cohn. Mr. Bellino, Senator Dirksen very correctly
points out here, I think the pattern is very clear. Senator
Dirksen makes this point: What, very specifically, did Kadow
have to do with giving of any monies or any other benefits to
this company prior to his leaving this government?
Mr. Bellino. He definitely contacted officials in both
Interior and GSA and helped them get the loans.
The Chairman. You have told us that. Was that his job?
Mr. Bellino. No, sir. He says this. He says, ``I was up
there to develop Alaska.'' Everything he did was for the
purpose of----
The Chairman. I am trying to find out whether in his
official capacity he was supposed to contact people or not. It
makes a big difference. Was part of his job to advise that
money be given to deserving developing companies? If not, what
was his job? He was on the government payroll. He had a job. Do
you follow me on this, Carmine?
Mr. Bellino. Yes, sir.
The Chairman. Let's say I went to Alaska, while Kadow was
holding his government job and if I had some vision of
developing a certain project and I needed federal funds, was
Kadow part of the chain of command through which I would go to
get those funds. Was he the man who would recommend for or
against it.
Mr. Bellino. Senator, Kadow injected himself into
everything that he desired. I might say on that, he would go to
extremes making sure they got the funds--whether it was
government, Stettinius or any fund.
The Chairman. What I want to know--if that was his job. If
not----
Mr. Bellino. His job isn't spelled out at all--just
development of Alaska. Anything he could do to develop Alaska
was his job.
The Chairman. Then if the government sent him up there to
develop Alaska, he is the man who would be depended upon,
relied upon for recommendations for loans.
Mr. Bellino. It would appear from the Alaska field service
that he was in an advisory capacity. However, he went much
further than that.
The Chairman. He advised the government to give loans to
worthy projects?
Mr. Bellino. No, I wouldn't say that.
The Chairman. Who would he advise?
Mr. Bellino. His staff was made up of heads of various
government agencies, Bureau of Mines, Geological Survey----
Mr. Cohn. The fact is that one of his jobs was to recommend
to his superiors what would be good and what bad; which ones
they should finance and which ones they shouldn't. Is that
correct?
Mr. Bellino. Yes, sir.
Mr. Cohn. Here is a man who was in Alaska when U.S. Tin
wanted money. One of his tasks was to advise his superiors
whether or not they should get the money. He did that, didn't
he?
Mr. Bellino. Yes.
Mr. Cohn. In fact, on February 27, 1951, he was down here
with Harry Fishnaller seeing Mr. Ellis in the Bureau of Mines
about money for the corporation.
Mr. Cohn. Do you have any statements that he advised his
superiors, made recommendations on contracts?
Mr. Bellino. No.
Mr. Cohn. You don't?
Mr. Bellino. No, unless--no, nothing.
That was not part of his official duty, Senator. He took
that all upon himself and his own interpretation.
The Chairman. How do you know?
Mr. Bellino. I will say that this way. When he started out,
started doing that, rumors came down about his activities, so
Warne wrote him a letter calling his attention to being like
Caesar's wife, vulnerable, above suspicion.
The Chairman. Above suspicion of what?
Mr. Bellino. In developing Alaska, of having any personal
interest in any way or seeking to have any personal interest.
The Chairman. I didn't ask about that. I didn't ask about
personal interest.
Listen to me a minute. I am not talking about personal
interest. I am trying to find out whether there is a conflict
here, taking over a company which he had promoted and fostered
while a government agent--whether or not he did that. In order
to find that out, I must find out from you or someone else
whether he did perform the function of advising his superiors,
advising GSA, advising Interior, the Bureau of Mines or anyone
else, when they should or should not give a company some aid.
It had nothing to do with personal interest.
Mr. Bellino. Senator, this is his job description. I could
read that.
The Chairman. I can read it.
Let's read it into the record. This is the job description
for Kadow dated July 8, 1948:
Under the general direction of the Secretary of the
Interior to serve as Director of the Alaska Field Staff,
Chairman of the Alaska Field Committee, and ex officio
Commissioner for Alaska for the Department. To be responsible
for integrating the activities in Alaska of the bureaus and
offices of the Department and for increasing the effectiveness
of the Alaskan program of the Department. Will report to the
Secretary through the Director of the Division of Territories
and Island Possessions.
To serve as the representative of the Department and of the
Secretary in Alaska in dealing with other Federal agencies, the
Territorial government, and other public or private groups or
persons on matters of common interest.
To make continuous study of the operations of the bureaus
and offices of the Department in Alaska and of questions of
common interest in such operations; to act as a point of
contact and a channel for the exchange of views and information
in regard to such questions; to initiate and endeavor to secure
common agreement on measures necessary to ensure, integration
and economical execution of departmental programs; and to
report promptly to the Secretary on any situations which may
require departmental action.
To resolve directly, wherever possible, differences in
matters crossing bureau lines or affecting more than one bureau
or office.
In conjunction with the Alaska Field Committee to prepare
and submit for the Secretary an annual report covering the
following:
1. The general aspects of the entire program of the
Department in Alaska and of the programs of each bureau or
office.
2. Obstacles encountered in the realization of an effective
program in Alaska and recommendations for overcoming such
obstacles.
3. Recommendations as to steps needed to accomplish an
adequate program for Alaska.
In conjunction with the Alaska Field Committee to prepare
and submit to the Secretary a comprehensive long-range
departmental program for Alaska on a 6-year basis; and,
subsequent to the adoption of such a program, suggest such
annual revisions as may be required to maintain a program on a
6-year basis.
To supervise and direct the activities of the employees of
the Alaska Field Staff and to perform related duties as
assigned.
[Off-record discussion.]
The Chairman. When did he have the agreement with U.S. Tin,
if you know, to get the stock or anything else?
Mr. Bellino. About the stock, that just appeared in the
minutes. I don't know when he made the agreement.
The Chairman. When did it appear in the minutes?
Mr. Bellino. I do not recall. However, about January 27,
1951, he has admitted speaking to Fishnaller about the job. He
says it wasn't until after he told Fishnaller he would work for
the company that he began to help the Tin Company.
The Chairman. How much salary was he supposed to get as
general manager?
Mr. Bellino. I haven't seen any salary, Senator.
The Chairman. Did you ask him?
Mr. Bellino. No, sir.
The Chairman. That is an important thing, isn't it.
Mr. Bellino. Certainly, yes, sir.
The Chairman. That should be in the record.
Mr. Bellino. From what I could see, he hasn't received any
salary. The agreement was that he would not receive a salary
while with the government.
The Chairman. What type of deferred salary did he receive?
If I go to work for your corporation, I don't go to work for
nothing, even under an agreement with the mortgagee. If I don't
get money as of today, certainly I am going to pile up salary.
Mr. Bellino. He said he wasn't interested in such, that he
was interested in capital gains and for that reason felt
eighty-five hundred shares of stock was his salary.
The Chairman. Did you ask him?
Mr. Bellino. I went there by what the records showed in
connection with his signing the contract--his agreement to sign
the contract gave him eighty-five hundred shares.
The Chairman. Do you have documents, letters or anything
else to show the date that he became interested in becoming
part of this company?
Mr. Bellino. The first document that I found of this
corporation, which was called to his attention, was about
October 2nd.
In October, I am not sure of the date, 1950, at which time
a copy of a letter written by Mr. Lorain was sent to Mr. Kadow.
The Chairman. Setting out what?
Mr. Bellino. It showed this corporation was anxious to get
money and begin doing business.
The Chairman. Have you identified Mr. Lorain?
Mr. Bellino. Mr. Lorain was director of Bureau of Mines in
Juneau.
I might explain to the senator, actually we jumped to the
tin mine and you can't follow Kadow's activities. If we were to
follow his prior activities we could understand his
thinking,when he was ready to leave the government and go to
work for Mortensen and U.S. Tin. For instance, in 1947, October
21, 1948, which was about three months after he arrived in
Alaska--he went there, got there about July 15, 1948, Mr. Warne
wrote a handwritten memo for the files pointing out:
Director James Boyd of the Bureau of Mines came to me this
morning, having returned this week from Juneau, Alaska, where
he was early in October, and other mines field stations. He
said that his man Germain at Juneau, some in Geological Survey,
and the governor, were worried because Ken Kadow had given the
impression that (1) he was in Alaska to make a personal
killing, (2) had endeavored to make a personal arrangement with
a firm of architects for a cut on future building, and (3) had
in mind trying to participate personally in mineral
developments that he is promoting as a part of a development
program. Mr. Boyd says all his information is hearsay, but he
thought such rumors and reports ought to be investigated. He
does not think they are widespread in Alaska.
As a result of that, the only action taken was a letter
from Mr. Warne to Mr. Kadow and he starts off:
It perhaps is natural that the representatives of the
Interior Department assigned to aid the development of Alaska
should be watched closely by Alaskans, but I do not want you,
through inadvertence or otherwise, to invite suspicious
attitudes nor to be made the butt of gossip. It would hurt both
you and our program for the development of Alaska.
Like Caesar's wife, as I have said before, anyone in your
position must be above suspicion.
Some nasty rumors have gained some currency and apparently
are being spread. They run something like this: that you have
said that you were in Alaska `to make a killing'; that you
sought a silent partnership and a 10 percent cut in a proposed
building project; and that part of your interest might be
personal in the proposed mineral developments. In the light of
the exchange of letters--yours of August 27, mine of September
21, and yours of September 24--I cannot credit such rumors,
which are based on hearsay so far as any who have repeated them
to me freely admit.
I imagine, however, that the suggestion you made at the
October 7 Field Committee meeting that the limestone deposit
might be protected through a dummy company to hold it for
appropriate later use by bona fide developers is being
distorted and may be repeated with garnishment to your
disadvantage. The voicing of such a suggestion, it seems to me,
is ill-advised since it puts Caesar's wife in a not-totally
invulnerable position, against thoughts, that is.
No government employee may use his official position,
directly or indirectly, for personal gain nor can he afford,
for example, to say that he would like to do so, even in jest,
nor to propose anything that has the color of preparation for a
situation in which would be created the opportunity for him or
others to profit personally because of the government's
business.
I have been very pleased with the way you have started the
field program. Perhaps we both underestimated the amount of
resistance that a field coordinator would meet in our
department, in other departments, and outside of government.
That may account for some of the pot-shotting. I thought,
however, that you should know and be forearmed. The government
service is exacting in its demands for personal self-sacrifice,
and is remunerative only in the satisfaction of having rendered
service. Forgive me for seeming to lecture. Especially do I
apologize since I believe there is no reason for me to be
saying such things to you.
Mr. Warne ended up apologizing.
Senator Dirksen. What was the date of that letter?
Mr. Bellino. October 21, 1948.
Senator Dirksen. Let's get the sequence of dates clear in
the record. Mr. Kadow went to work for the Department of
Interior what month?
Mr. Bellino. July 1948.
Senator Dirksen. And he went to Alaska when?
Mr. Bellino. He arrived in Alaska about that time.
Senator Dirksen. In July?
Mr. Bellino. Yes, sir.
Senator Dirksen. What was his prior experience?
Mr. Bellino. Prior thereto he was connected with Stettinius
and his work in Liberia; before that he was with Nelson A.
Rockefeller in South America.
Senator Dirksen. What you mean to say is: His earlier
government employment consisted of work with the State
Department in Liberia and later with the Rockefeller committee
in South America.
Mr. Bellino. From September 1947 to August 1948, he was
with the Stettinius Associates in Liberia, Inc., and the
Liberia Company, in charge of planning and development. It was
his responsibility to present practical operating plans for the
development of Liberia. ``These two corporations were organized
for the purpose of developing Liberia both economically and
socially.''
Prior to that time he was with the International Basic
Economy Corporation and American International Association. His
immediate supervisor was Mr. Nelson A. Rockefeller, president
of the above corporations. He was also with the Coordinator of
Inter-American Affairs, Food Supply Division in Rio de Janeiro,
Brazil. Before that all of his work was in connection with
agriculture, either at the University of Delaware or the
University of Illinois, Urbana, Illinois. From September 1931
to December 1948, he was associate plant pathologist,
Department of Horticulture, University of Illinois. Before that
he was assistant to plant pathologist, Washington State
College, Pullman, Washington.
Senator Dirksen. All right then, he entered the Department
of Interior in July of 1948?
Mr. Bellino. Yes, sir.
Senator Dirksen. And was dispatched almost immediately to
Alaska?
Mr. Bellino. Within two weeks he was on his way to Alaska.
Senator Dirksen. He was in Alaska then roughly five months
when this rather lecturing letter was written by a Mr. Warne,
and Mr. Warne's full name is William E. Warne, and his title?
Mr. Bellino. Assistant Secretary of Interior.
Senator Dirksen. Which means within five months after Mr.
Kadow assumed employment with the Department of Interior,
rumors had come back from Alaska as far as Washington and
became the foundation for a letter by Mr. Warne.
Mr. Bellino. Yes, sir.
Senator Dirksen. All right. Now you can proceed.
Mr. Bellino. On October 28, 1948, there appears a letter in
the file from Mr. Warne, in which he says:
I talked with Governor Gruening by phone on October 22
relative to Dr. Boyd's conversation with me and mine with John
Reed of the Geological Survey about Mr. Kadow and the situation
at Juneau. The Governor said he had heard rumors and had
discussed the subject of the rumors with Mr. Kadow and that he,
the Governor, was satisfied. He said no investigation or other
action was warranted at this time, that Mr. Kadow had not had a
long background of government employment but was learning
rapidly.
In that connection, Governor Gruening on August 16, 1948,
wrote to Mr. Kadow and he said:
I am dropping a line on the subject of a communication
which George Sundborg mailed you. It has to do with a birch
products project, the principal of which is a man named
Franklin Lanum. The project is discussed in the enclosed
memorandum.
It seems to me that other than housing and the cement
plant, no other single project is so much in line with the
thoughts that we were developing.
Here is a man who has gone quite a distance in seeking to
develop and process an Alaska native product which hitherto has
been unutilized. He can develop it as a raw-material exporter;
that is, shipping out the logs; and is doing so. But this is
scarcely desirable. If he could get the financing--and the
amount would not seem to be large--$170,000--he can establish a
birch manufacturing and producing plant which will (1) supply
Alaska with finished products needed in the construction
industry; (2) obviate the high cost of transportation for
corresponding materials; (3) aid in the solution of the housing
problem; (4) establish another year-round industry, employing
local labor.
This shows the Governor asking Kadow to help this man with
his financing, which was what Kadow was doing up there--help in
financing--but as indicated in other memoranda, he was looking
also for his own personal interest whenever he did help with
financing.
Now, Kadow wrote a note to Governor Gruening on August 28,
1948, in which he said:
I received your letter and George's regarding Franklin V.
Lanum of Anchorage. I have read carefully his business
prospectus. I have discussed it with several of my friends and
believe that financing for this enterprise is definitely
possible. I can not, however, work it out until I have a
detailed breakdown of Mr. Lanum's financial statement.
Considering the time that I have left here, I would suggest
that you have Mr. Lanum meet me in Juneau sometime shortly
after my return, which is now scheduled for the 11th. He should
come prepared to discuss the whole thing in detail. It is my
opinion, from what I read of his business prospectus, that I
can propose a much more satisfactory capital structure for him
than the one he has already.
I have asked some of my partners in the New Castle
Engineering & Construction Company to help work out the
financing for this company. Whether they put their money in or
not is beside the point. I am reasonably sure that they will
come up with a satisfactory working formula.
The governor had knowledge of this activity of Kadow, but
nevertheless a few months later the question came up as to his
activities and whether an investigation should be made of it.
The governor said he didn't think this should be done and it
stopped right there.
Senator Dirksen. Who was the New Castle Construction
Company to which he refers and in which he refers to partners?
Mr. Bellino. The New Castle Construction Company was
organized and incorporated in June of 1948, just before he
obtained his job with Interior. He organized it for the purpose
of using it in the development of housing in Alaska.
In that connection he claims that when he first--well, I
could read his confidential letter from Mr. Warne to Mr. Kadow.
Senator Dirksen. First, the letter is to whom?
Mr. Bellino. Mr. Warne.
Senator Dirksen. By whom?
Mr. Bellino. This letter is dated October 26, 1948 from Mr.
Kadow to Mr. William E. Warne, Assistant Secretary of the
Interior.
Thank you very much for yours of the 21st. I appreciate it
more than words can tell. You are absolutely correct in
assuming that my letter of the 24th was a statement of policy
on my part. It is true, however, that ``Caesar's wife was very
nearly seduced.'' This was a function of misunderstanding on
our parts. I had definitely expected to make investments in
Alaska when I came here. You knew this as did Secretary Krug.
As a matter of fact, I can tell you without reservation, I
would not have taken this job had I known that this policy
would have been reversed. I could not have afforded to do so.
However, that is all water over the dam. I am here as
Interior's representative. I will do everything in my power to
promote the best interest of the Interior Department and of
Alaska, and you have my word that as long as I am a government
employee, I will not personally take part in any of the many
opportunities that I see.
So much for the record. Now for what I consider to be
additional pertinent information. In the first place very few
people in the government seem to know how a business project is
born. They seem to think that if you publish some sort of a
report, that almost immediately business as a whole will take
it up. Personal conferences and actual solicitation of interest
on the part of a person who has the facts are a very integral
part of business development, as you well know. Of course, some
projects will be developed in the other manner, but by and
large, the road must be smoothed for the proper business
psychology. Trying to smooth this road in Alaska is one of the
toughest problems I have yet tackled primarily because of laws
and stands taken by the government which the people consider
inept. Most of the people in the government simply cannot
understand how important little things are to the businessman's
point of view. A typical example is the necessity for a man who
is going to make a sizable investment to own the piece of
ground on which he makes it.
Another point that has been somewhat disconcerting to me is
the endless chain of rumors and absolutely foundless remarks
that float around. For instance, it came to my attention
through Reed Salisbury the other day that two different people
in Agriculture are supposed to have made a statement to Rex Lee
that I told them if they did not cooperate 100 percent with us,
I would see that they were fired. I expect to hear all sorts of
crazy things, some good and some bad. This is always the case
when a fellow is really out getting something done. It
distressed me particularly, however, to hear that Agriculture
might be complaining because I have been bending over backward
to get what I regard as a healthy relationship with them. I
have made no such comment to anyone.
The greatest trouble I am having in Alaska to date is
avoiding the press, and when they finally corner me for a
speech or a statement, getting them to quote me correctly. I
enclose herewith two articles written as a result of a speech I
made in Ketchikan. If I do say so myself, the speech was fairly
good, which is not always the case, but the article in the
Ketchikan Daily News misquoted me badly. Frequently some of the
misquotes seem to be intentional and are definitely popular
with the people, but it irritates me, nevertheless, that they
see fit to garble one's remarks.
Your reference to our meeting at which time I proposed to
form a corporation with the authorization of the Field
committee just about floors me because I do not see how anyone
could possibly have misunderstood my motive. I stated very
clearly that all the stock of the company would be assigned to
the government and held by it until such a time as it saw fit
to develop the project to the greatest public good. It was
simply a suggestion of a mechanism whereby we could move at
once. Had we followed it, the lime deposits would have been
under our control. As it is, it is under somebody elses. In my
opinion, any person who misconstrued my intention with regard
to that recommendation is doing so deliberately. Had I wished
to be two-faced, or had I been concerned about personal
investment possibilities, I should certainly not have discussed
it as I did in the meeting.
In closing, I want you to know that I will appreciate every
bit of information you can send me that would indicate my
motives or methods are being misunderstood. You have my word of
honor, however, that I will not betray your faith in me nor
will I abuse my position in the government. As a matter of
fact, I will fight like a wildcat and raise particular hell
with anyone who does. You must appreciate, however, that in all
the appraisals that come to your attention, I speak as a
businessman. It must be remembered that a businessman's
psychology of view should be misunderstood by some bureaucrats
is not a great surprise to me. However, if it becomes
misunderstood by the average citizen, I will then definite 