Mr. DUNNE. He placed a price on the old equipment and the good will at $30,050, and he then received the entire issue of the stock. Mr. KENNEDY. We are going now to the bond part of it, and the bond aspect of it-you stated that some Senator ERVIN. Was this corporation formed in New York State? Mr. DUNNE. Yes, sir. Senator ERVIN. Do New York statutes require that stock should be issued only for money or money's worth in property? Mr. DUNNE. This was the original issue of the stock, Senator, upon the formation. Senator ERVIN. That is what I am getting at. Most States have a statute which is that the stock can only be issued for money, or money's worth in property. Mr. DUNNE. This would have been the consideration for it, the good will and the existing used printing equipment. Senator ERVIN. But do you know whether the New York law permits or does not permit issuance of corporate stock for good will? Mr. DUNNE. I know from my own personal experience that stock is transferred for a nominal amount upon the formation of a corporation in New York, usually through dummies, and then transferred to the actual owner. Senator ERVIN. Good will is nothing in the world but probability or possibility that a satisfied customer will return for further trade. Mr. DUNNE. Yes, sir. Senator ERVIN. All right. Mr. KENNEDY. Now, you stated that there was some $213,000 of bonds issued, is that right? Mr. DUNNE. Yes, sir. Mr. KENNEDY. Would you break that down as to who received the bonds, and to whom Mr. Max Raddock was able to sell the bonds. Mr. DUNNE. $124,000 was sold to labor organizations, that is, international unions and welfare funds, or local unions. $92,500 was sold to officers of labor organizations or to members of their immediate families, wives, parents, or children. $12,500 was sold to people with no known connection with the labor organizations. Mr. KENNEDY. Do you have a chart on that, a mimeographed sheet giving us a breakdown on it? Mr. DUNNE. Yes, sir. Mr. KENNEDY. Now, Mr. Dunne, you have prepared a memorandum on the purchase of the bonds, and what has been the disposition of the bonds? Mr. DUNNE. Yes, sir. Getting into this bond issue, we noticed many peculiar charts in the manner of payment, and thus we went into more detail and tabulated in this chart all sales, and the date of the sale, and the amount of it, and the person to whom it was sold, and the method of payment for the bonds with whatever remarks were applicable. Mr. KENNEDY. Now, I want to ask you a further question. You have the circulation of the Trade Union Courier, do you? Mr. DUNNE. Yes, sir. Mr. KENNEDY. And to whom the Trade Union Courier was sent? Mr. DUNNE. Yes, sir. Mr. KENNEDY. Now I am going to ask you whether there is any correlation between those union officials who purchased the bonds of the Trade Union Courier and the unions that purchased the Trade Union Courier. Now, prior to that, would you submit that list to the chairman. The CHAIRMAN. What is this document? Mr. KENNEDY. This is a subscription list. Mr. DUNNE. This is a list of those people who take the Trade Union Courier, Senator. This is as of 1958. The CHAIRMAN. February 25, 1958? Mr. DUNNE. Yes, sir. The CHAIRMAN. These are subscriptions in bulk, in a number of instances? Mr. DUNNE. Yes, sir, and the books and records of the Trade Union Courier reflect that there are only 32 people who buy the paper, but that they buy it for large groups of members. The CHAIRMAN. There are 32 actual subscribers, and some of them subscribe, like local unions may subscribe for a large number? Mr. DUNNE. For several thousand, yes. The CHAIRMAN. And if this is correct, the document which I now make exhibit No. 8, it shows that there were total subscriptions of 33.223 as of that date. Is that correct? Mr. DUNNE. That is the correct number of copies of this paper that are paid for; yes, Senator. The CHAIRMAN. It may be made exhibit No. 8 for reference. (Document referred to was marked "Exhibit No. 8" for reference and may be found in the files of the select committee.) Mr. KENNEDY. Now, we would like to have, at the same time, this made an exhibit, which shows who purchased the bonds. The CHAIRMAN. Have you testified with respect to having checked on who purchased the bonds? Mr. DUNNE. Yes, Senator. The CHAIRMAN. Have you made a compilation of that? Mr. DUNNE. I have, Senator. The CHAIRMAN. Is this document that you have in your hand a compilation of the bond purchases? Mr. DUNNE. Yes, Senator, it is. The CHAIRMAN. It may be made exhibit No. 9 for reference. (Document referred to was marked "Exhibit No. 9" for reference, and may be found in the files of the select committee.) Mr. KENNEDY. What I would like to get from you, Mr. Dunne, is the correlation between the individual union officials who invested in World Wide Press, and the unions that purchased or subscribed in bulk to the Trade Union Courier. Would you give us some examples and what the records show on that? Mr. DUNNE. The records reflect that of the 33,000 copies of the paper distributed to union members, 25,689 are distributed to members of local unions in which the officers of the local union or the international have a direct financial interest through bond purchases in World Wide Press which prints the Trade Union Courier. Mr. KENNEDY. Would you give us that broken down, and for instance on the Blocks. Mr. DUNNE. In the case of the Block brothers who operate the Meat Cutters' locals in New York Mr. KENNEDY. They have the mortgage purchase? Mr. DUNNE. Yes, sir. Mr. KENNEDY. And then they also had their own individual purchases of bonds, is that right? Mr. DUNNE. That is right. Mr. KENNEDY. How much in bonds do they have? Louis Block and his family purchased some $15,000 worth of bonds? Mr. DUNNE. There are $5,000 worth of bonds issued to Louis Block's wife. Mr. KENNEDY. In her maiden name? Mr. DUNNE. Which are still held, yes. There is $6,000 in bonds purchased by Louis Block's sister, Sonia Bytansky, which were transferred a short time thereafter to Louis Block's son, Allen Robert Block, and so that is actually a total purchase of only an additional $6,000. In addition there is another $4,000 in bonds held by Louis Block's son. So that members of Louis Block's family own a total of $15,000 in bonds in World Wide Press. Mr. KENNEDY. Does Max Block also own some bonds? Mr. DUNNE. Max Block owns no bonds personally. However, local 342 of which he is president owns $10,000 worth of bonds. Now, between these two locals, they account for one-third of the total circulation of the Trade Union Courier. Mr. KENNEDY. That is 11,299? Mr. DUNNE. Yes, sir. Mr. KENNEDY. What about 32 B of the Building Trades or Building Services? Mr. DUNNE. The principal officers of local 32 B are Dave Sullivan, president, and Thomas Shortman, vice president. Sullivan purchased $5,000 worth of bonds in his own name, and with his money. Shortman purchased $17,000 worth of bonds, and, incidentally, he is the largest individual bondholder. So that between the two principal officers of local 32 B, they purchased $22,000 in bonds in World Wide Press. For a number of years, and up to the present time, they take a bulk subscription for their membership of 2,000 copies of the Courier, which amounts to 6 percent of their total circulation. Mr. KENNEDY. Then Mr. Charley Johnson's wife? Mr. DUNNE. Charley Johnson is an official of the Carpenters' Union in New York City and a member of the general executive board of the international, and we found that $5,000 in bonds were purchased in the name of Charles Johnson's wife, and $5,000 were purchased in the name of his brother's wife, Robert Johnson, another official of the Carpenters' Union in New York. Locals controlled by Johnson in New York purchased 5,000 copies of the Courier, and the international, of which he is a member of the executive board, purchased another 5,500 copies of the Courier, and thus the Carpenters' locals controlled by Johnson and the international union purchase close to 11,000 copies of the biweekly circulation of the Courier. Mr. KENNEDY. So, in summary on that, the Block group and the Johnson group, and local 32 B purchased some $67,000 of bond issues, plus $70,000 in mortgages, and their unions or unions controlled and associated with them provided for some 70 percent of the circulation of the Courier, is that right? Mr. DUNNE. That is right, 70 percent of the circulation of the Trade Union Courier goes to the Carpenters, the Block's Meat Cutters' locals, and Dave Sullivan's local 32 B, authorized by those individuals. The CHAIRMAN. Of what? Mr. DUNNE. Of the Building Services Employees Union. Mr. KENNEDY. Mr. Dunne, in this breakdown, this gives, I believe, and exhibit No. 9 gives these bond purchases in detail, is that right? Mr. DUNNE. Yes, sir. Mr. KENNEDY. And there is going to be, obviously, a duplication in here, because some of the bonds were transferred, isn't that right? Mr. DUNNE. That is right, and a good example of that is on page 3, where we show a total of $48,000 being held by various officials of the Meat Cutters' Union, and actually that is the total amount held by different people throughout the years, and some of those were transferred within the group. Mr. KENNEDY. That does not mean there are $48,000 at the present time? Mr. DUNNE. No.. Mr. KENNEDY. That is $48,000 over the period of time, and some of those were transferred from one union official to the other, is that right? Mr. DUNNE. That is right. Mr. KENNEDY. Now, Mr. Dunne, did we also find beyond this some peculiarities in the purchase of the bonds? Mr. DUNNE. Yes, we did, Mr. Kennedy. Mr. KENNEDY. And this is a matter of somewhat complication, is that right? Mr. DUNNE. We had considerable difficulty getting the books and records of the Trade Union Courier, World Wide Press, and two other of Max Raddock's enterprises. Mr. KENNEDY. Are all of the books and records of the World Wide Press and Max Raddock and the Trade Union Courier still in existence? Mr. DUNNE. I don't know. I know we don't have them all. Mr. DUNNE. There are great gaps in the financial records for the period of 1950 through 1953, which would be the crucial period in which we are involved, the issuance of these bonds. There are thousands of canceled checks which have not been supplied, although subpenaed. The claim is that they no longer have them, or they can't locate them. Cash receipts and disbursement books for those early days, are no longer available to us. Mr. KENNEDY. So it is somewhat difficult to get the complete answers, at least from the records? Mr. DUNNE. That is right. Several of these transactions were peculiar, and we have done what we could to trace them through, and put down the evidence as we have found it. Mr. KENNEDY. Let me ask you to give some examples. For instance, on the purchase of the bonds by Louis Block of the Meat Cutters, or by his wife, for $5,000, how do the records or bank deposits show that that was paid for? Mr. DUNNE. The cash receipts book for this bond account maintained by Max Raddock shows that on May 8, 1950, a deposit of $5,000 was made for the purchase of these bonds. The books and records reflect just $5,000. We went to the bank and obtained a copy of the deposit ticket, to support that $5,000 purchase, and upon examination of the deposit ticket, and I am talking about item 15 in the chart, we noticed it was made up of a series of 13 checks totaling $2,700.34, and 5 checks totaling $2,299.66. We have a listing of the amount of these checks and they are all odd amounts, like $99.79 and $173.76, and similar amounts. We had very few canceled checks from Raddock's enterprises for the year 1950. However, we did have their payroll accounts, and we noticed upon an examination of their payroll records that checks in identical amounts to 13 of these, to the penny, were drawn as payroll checks from 13 employees of the Trade Union Courier. All were drawn a few days before the deposit in that account, and all cleared the bank and the next business day after this $5,000 deposit. Based on that circumstantial evidence, 13 identical checks, we came to the conclusion that the deposit that went to make up the $5,000 purchase for Louis Block's wife was from money from Raddock's own enterprise. The CHAIRMAN. Now, 13 checks aggregating how much? Mr. DUNNE. $2,700.34. The CHAIRMAN. $2,700? Mr. DUNNE. Yes, sir. The CHAIRMAN. Now, as I understand your testimony, you haven't been able to find all of the checks. Mr. DUNNE. Yes. Actually there were 18 checks, which, taken together, totaled exactly $5,000. We could trace 13 of those checks to payroll checks from Trade Union Courier, and we could not trace the other 5 checks which made up the difference. The CHAIRMAN. Now, the 13 were issued presumably and recorded as salary checks or wage checks to the employees of that company? Mr. DUNNE. Of Max Raddock's company, yes, sir. The CHAIRMAN. In other words, these checks, so far as the record reflects, were in payment of wages or salaries to employees of the company? Mr. DUNNE. Yes, sir. The CHAIRMAN. Now, you find that those checks, however, were used or put into an account to purchase the bonds for Mrs. Louis Block, is that correct? Mr. DUNNE. Yes, Senator. The CHAIRMAN. What did the checks reflect with respect to endorsements? Mr. DUNNE. We cannot get the actual checks, Senator, and those were not delivered to us. The CHAIRMAN. You have not examined the actual checks? Mr. DUNNE. It is an examination of the payroll records and the bank statements. The CHAIRMAN. But the payroll record reflects that this money was deposited in those accounts? Mr. DUNNE. Yes, Senator. The CHAIRMAN. The checks reflect it in that they are the exact amount and all occurred at the same time? Mr. DUNNE. That is right. |