brotherhood then paid these deficiencies from their union funds. We noted that Mr. F. Duffy, former general secretary, was assessed $3,946.80. Mr. A. E. Fisher, the general secretary at that time, was assessed $376.61. Mr. S. P. Meadows, the general treasurer at that time, was assessed $1,552.25. Mr. KENNEDY. Were those deficiencies all paid for out of the treasury of the Brotherhood of Carpenters? Mr. DEIBEL. That is correct. On January 3, 1955, by botherhood check, Mr. Fisher's deficiency was paid and also Mr. Duffy's, and on January 4, Mr. Meadows' deficiency was paid. We were unable to find The CHAIRMAN. That is income tax for these officers that was paid out of union dues? Mr. DEIBEL. That is correct, Mr. Chairman. The CHAIRMAN. I wish I had somebody to pay my taxes. Mr. DEIBEL. We also attempted to find, in the minutes of the brotherhood, authorization for payment of these taxes, and we weren't able to locate any authorization until February 12, 1958, at which time the board of trustees' minutes indicate, and I will quote from the minutes: The general president called attention to the fact that early in 1954 an audit was made of the information return filed for the year 1952, the 1954 audit was not as complete as the audit now being conducted, as the internal revenue agents were at the time concentrating on expenses paid to several of the resident officers, as a result of the investigation, deficiencies were assessed against former General Secretary Duffy, General Secretary Fisher, and General Treasurer Meadows, that were paid by the brotherhood, in view of the fact that it had always been understood that expenses paid by the United Brotherhood to representatives did not have to be reported to the Internal Revenue Service. The board in session November 11, 1954, approved of these payments, but through inadvertence this action was omitted from the minutes. Motion to reaffirm our action of November 11, 1954, was approved unanimously. Mr. KENNEDY. What was the date of those minutes? Mr. DEIBEL. February 12, 1958. Mr. KENNEDY. Was that after our investigation of the matter began? Mr. DEIBEL. Yes, sir. Mr. KENNEDY. And it was after we requested from the brotherhood what authorization they had secured in order to pay these tax deficiencies? Mr. DEIBEL. That is correct. Mr. KENNEDY. And it appeared some 4 years later? Mr. DEIBEL. That is right. The CHAIRMAN. That file regarding the income tax payments may be made exhibit 52 for reference. (The document referred to was marked "Exhibit 52" for reference and may be found in the files of the select committee.) Mr. KENNEDY. Next is a matter we have not come across, I believe, in any of our other investigations, and that deals with the operation of a business by a labor union and the fact that no taxes are paid on that business. I would like to have Mr. Deibel set before the committee the facts that we have regarding the groves that are owned by the International Brotherhood of the Carpenters in Florida. Would you tell the committee what we found on that? Mr. DEIBEL. We had found that the Carpenters' Brotherhood owns approximately 1,900 acres of property in Polk County, Fla.; this property is located near the city of Lakeland. Of these 1,900 acres, approximately 1,000 acres are utilized in raising citrus fruits. The other acres are used for a home for aged members, and the various buildings and facilities necessary to maintain these people. We found that the citrus groves are administered by the Adams Packing Association of Auburndale, Fla. Adams pays for all of the grove expenses, picks and hauls the crop, deducts expenses, and remits the proceeds to the Carpenters' Brotherhood. During the 1955-56 season, the Carpenters Brotherhood's groves were the second largest customer of Adams. During the seasons 1954 through 1957, the Carpenters have received a net return upon these groves of $890,000. This is broken down: 1954, they received $301,897; 1955, $145,116; 1956, $219,571; 1957, $224,503. The CHAIRMAN. Is that net? Mr. DEIBEL. That is net proceeds to the Carpenters. The CHAIRMAN. In other words, that is after all expenses have been deducted? Mr. DEIBEL. After all expenses have been deducted. The CHAIRMAN. Has any tax been paid on those amounts? Mr. DEIBEL. We have found that the brotherhood has not considered this as income for tax purposes. The CHAIRMAN. I wonder if the other farmers down there have to pay taxes? Did you find out about that? Mr. DEIBEL. I understand that the Carpenter officials, certain Carpenter officials, or former officials, also own groves which are serviced by Adams, and the income is reported for tax purposes. The CHAIRMAN. Maybe the Internal Revenue Bureau would be interested in this. Mr. DEIBEL. I believe the Internal Revenue Service is presently very interested, Mr. Chairman. The CHAIRMAN. Are they also active? Mr. DEIBEL. Yes, sir. The CHAIRMAN. All right. Does that conclude your testimony regarding that? Mr. DEIBEL. I believe so. The CHAIRMAN. That file may be made exhibit No. 53, for reference. (The document referred to was marked "Exhibit No. 53" for reference and may be found in the files of the select committee.) Mr. KENNEDY. I think that is all. This is, of course, income that has nothing to do with the Carpenters' Union itself. It is an independent operation. Mr. DEIBEL. That is correct. This is for citrus groves and hardly related to the activities of the Carpenters. Mr. KENNEDY. And a competitor in that area is any ordinary businessman who operates a citrus grove. He would have to pay taxes on that, so it is a tremendous competitive advantage; is it not? Mr. DEIBEL. Yes, sir; very definitely. The CHAIRMAN. Thank you very much. I understand you are leaving for an overseas assignment. Mr. DEIBEL. Yes, sir, Mr. Chairman. The CHAIRMAN. The Chair on behalf of the committee personally wishes to thank you for the splendid service you have rendered, the assistance you have given us, and the competency of your work. You have been very helpful. We wish you a pleasant journey and that your assignment and new duties will be pleasant. Mr. KENNEDY. He is going to Paris, Mr. Chairman. He has been one of the outstanding people we have had working with us. The CHAIRMAN. Thank you very much, Mr. Deibel. Call the next witness. Mr. KENNEDY. Mr. Hutcheson. The CHAIRMAN. Be sworn, please, sir. You do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God? Mr. HUTCHESON. I do. TESTIMONY OF MAURICE A. HUTCHESON, ACCOMPANIED BY HOWARD TRAVIS, COUNSEL-Resumed The CHAIRMAN. State your name, your place of residence, and your business or occupation. Mr. HUTCHESON. M. A. Hutcheson, general president, United Brotherhood of Carpenters and Joiners of America, Indianapolis, Ind. The CHAIRMAN. Thank you very much. Mr. Hutcheson, you have counsel with you. Counsel, identify yourself for the record, please. Mr. TRAVIS. My name is Howard Travis, Indianapolis, Ind. I have offices at 1011 Fletcher Trust Building. Mr. Chairman, the witness has informed me that the bright spotlight is distracting to him, and I would like to request that it be turned off. The CHAIRMAN. Well, we will turn them off if the witness cooperates with us, and I assume he is going to cooperate with the committee. For the present, you may turn off the lights. Mr. TRAVIS. Thank you, Mr. Chairman. The CHAIRMAN. Proceed, Mr. Kennedy. Mr. TRAVIS. I should like The CHAIRMAN. The purpose, of course, of granting such a request is that the witness is endeavoring to testify and to testify accurately and truthfully, and that if the lights are a detraction it might interfere with his concentration it is only proper that they be turned off. I have taken the position, and the committee has sustained me, that it does not take a great deal of concentration simply to read a statement that "If I told the truth, it might tend to incriminate me." We would like to defer to every reasonable request and grant it. But we must reserve the right to determine what is reasonable and what is not, under the circumstances. Mr. TRAVIS. I want to assure the committee that Mr. Hutcheson will not resort to the guaranties of the fifth amendment, and I would like to correct an impression that was apparently gained by the newspapers yesterday as to Mr. Blaier. It was not Mr. Blaier's intention in his refusal, as I drafted it, to rely on the fifth amendment. I feel that there are other guaranties that a man under indictment has, including the due-process-of-law clause, that he must be tried only before the court where the indictment is pending. I would like to repeat for the record this morning, that it is a wellknown fact that this witness was, together with others, indicted on February 18, 1958, by the grand jury of Marion County, Ind., and such indictment is now pending in Marion County criminal court, division No. 1, cause No. CR 19429 Y, and such indictment has not yet been tried. The indictment is on two counts. The CHAIRMAN. Mr. Counsel, is that the same indictment that was presented yesterday? Mr. TRAVIS. Yes, Mr. Chairman. That is the indictment which has been tendered to the committee. The CHAIRMAN. We will keep that in mind. (At this point, Senator Curtis entered the hearing room.) Mr. TRAVIS. The indictment refers to transactions occurring in connection with the sale of lands to the State of Indiana for the construction of the so-called tri-State expressway in Lake County, in the vicinity of Gary. It is also well known that, in connection with that alleged transaction certain moneys were paid to the State of Indiana prior to the return of the indictment. The alleged transactions are purely personal. I submit, therefore, that any inquiry by this committee into or about any of the facts related to or which might be related to such indictment and the transactions recited therein, however remote the same may be, and whether occurring before or after the transaction recited in the indictment, or as to any matter which might be attempted to be used in furtherance of the prosecution thereof, would be improper, without appropriate pertinency and outside the scope of the investigation which this committee is authorized to make. It would violate and impair this witness' rights as an American citizen and would be contrary-excuse me, Mr. Chairman, I feel ill. May I have a recess, Mr. Chairman? The CHAIRMAN. Yes. Mr. Hutcheson, you may accompany your counsel, if you wish. (At this point, the following members were present: Senators McClellan, Ervin, and Curtis.) (Brief recess taken.) (At the reconvening of the session, the following members were present: Senators McClellan, Ervin, and Curtis.) The CHAIRMAN. The committee will come to order. Mr. KENNEDY. Mr. Chairman, we have another witness, on a matter which is somewhat unrelated. The CHAIRMAN. Mr. Hutcheson, you may be excused from the witness stand temporarily. We have another witness that we can proceed with until you determine about your counsel as to whether he can continue. Call the witness. Mr. KENNEDY. Mr. Katz. The CHAIRMAN. Be sworn, please; you do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God? TESTIMONY OF A. MARTIN KATZ The CHAIRMAN. State your name, your place of residence, and your business or occupation. Mr. KATZ. A. Martin Katz, Gary, Ind., practicing attorney and city judge. The CHAIRMAN. You waive counsel, do you? Mr. KATZ. Yes, sir. The CHAIRMAN. Proceed, Mr. Kennedy. Mr. KENNEDY. Mr. Katz, you are the treasurer of the State Sibley Corp.? Mr. KATZ. Yes, sir. Mr. KENNEDY. Where is that located? Mr. KATZ. In Indiana, in Hammond, Ind. Mr. KENNEDY. Hammond, Ind.? Mr. KATZ. Gary, Ind., I suppose, now. Mr. KENNEDY. Mr. Chairman, I would like to have Mr. Sinclair ask a few questions to set the stage on this and get the preliminaries. The CHAIRMAN. Mr. Sinclair, you may interrogate the witness. Mr. SINCLAIR. Mr. Katz, please state your position in connection with the State Sibley Corp. Mr. KATZ. I am the secretary-treasurer. Mr. SINCLAIR. Please identify the other officers in the State Sibley Corp. Mr. KATZ. Albert Weinstein is the vice president. At the present time, the office of president is not filled. Mr. SINCLAIR. When was this corporation formed? Mr. KATZ. I believe in 1953. Do you have a copy of the article which I have previously given to you? Mr. SINCLAIR. No, I don't have. Mr. KATZ. August 10, 1953. Mr. SINCLAIR. When did your group buy into this corporation? Mr. SINCLAIR. April 1956? Mr. KATZ. Yes. Mr. SINCLAIR. What did you pay for your interest in the corporation? Mr. KATZ. One dollar. Mr. SINCLAIR. Please identify the group who purchased this corporation. Mr. KATZ. Weinstein, Holovachka, and myself. Mr. SINCLAIR. Would you furnish the full names to the committee? Mr. KATZ. Metro M. Holovachka, Albert E. Weinstein, and Martin Katz. Mr. SINCLAIR. What were their occupations at the time they purchased it? Mr. KATZ. Mr. Holovachka is an attorney. Mr. Weinstein is a businessman. Mr. SINCLAIR. Would you further identify Mr. Holovachka? Mr. KATZ. I beg your pardon? Mr. SINCLAIR. Would you give us a complete identification of Mr. Holovachka? Was he holding a county office at the time? Mr. KATZ. He was prosecutor of Lake County, Ind. |