Mr. KENNEDY. Mr. Chairman, we have a situation where a man wanted to buy his own machine for his own restaurant. He had Mr. Jacob's machine in there, and he wanted to buy his own. Through threats and intimidation, attempts at intimidation, the Jacob brothers sought to keep their machine in the restaurant.

A picket line was set up when this man tried to buy his own machine. We have here a picture of the picket. We also have a witness who can testify as to an interview that he had with the picket, Mr. Chair

man.

The CHAIRMAN. Was this picket put up by this fellow Jacob on the witness stand?

Mr. KENNEDY. This was set up by local 266 of the Teamsters Union which is the union, according to the testimony we have had, was formed and established through the efforts of Mr. Jacob and his brother.

It is of some interest, Mr. Chairman, that the sign on the picket is incorrect, because the picket thought he was picketing for amusement machines, and it was a jukebox. They have the wrong union. It is just a form sign that he wore around, and they filled in the blanks. Somebody filled in the wrong blanks.

The CHAIRMAN. Mr. Herbert and Mr. Eugene Jacob, do you think you can identify this picture? Take a look at it and see if you recognize the picket.

(The photograph was handed to the witnesses.)

(The witnesses conferred with their counsel.)

Mr. EUGENE JACOB. I respectfully decline to answer because I honestly believe my answer might tend to incriminate myself.

The CHAIRMAN. Let the record show the witness examined the picture and consulted with his counsel, and then gave that answer. Let the picture be made exhibit No. 33.

(Photograph referred to was marked "Exhibit No. 33" for reference and may be found in the files of the select committee.)

Mr. KENNEDY. May I call another short witness, Mr. Chairman? The CHAIRMAN. Yes.

Mr. KENNEDY. Mr. Kelly.

The CHAIRMAN. Mr. Kelly, you have been previously sworn?
Mr. KELLY. Not in this hearing, sir.

The CHAIRMAN. Do you 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. KELLY. I do.

TESTIMONY OF JAMES P. KELLY

The CHAIRMAN. State your name, your place of residence, and your present employment.

Mr. KELLY. My name is James P. Kelly. I am from New York City, employed as a staff investigator by this committee.

The CHAIRMAN. How long have you been so employed?

Mr. KELLY. For the past 2 years.

The CHAIRMAN. All right, Mr. Kennedy.

Mr. KENNEDY. Mr. Kelly, you secured the photostatic copy of the original contract the Jacob brothers had with the Caruso Restaurant? Mr. KELLY. That is correct, sir.

Mr. KENNEDY. And then you also received a photostatic copy of the contract for the purchase of the machine by Caruso Restaurant when they wanted to get rid of the Jacob brothers?

Mr. KELLY. That is correct.

Mr. KENNEDY. And then according to the affidavit, a copy of this contract was shown to the Jacob brothers and even despite that fact the picket line appeared in front of the Caruso Restaurant? Mr. KELLY. That is right, sir.

Mr. KENNEDY. So when when the people tried to buy their own machine, place their own machine in their own restaurant, a picket line was placed in front of them to try to stop them, so that they would continue to do business with the Jacob brothers, who, according to the testimony, originally set up this Teamsters Union and financed it?

Mr. KELLY. Yes.

Mr. KENNEDY. Did you interview the picket?

Mr. KELLY. If you call it an interview, we spoke briefly with him on September 26, 1958, when we came out of Caruso's Restaurant. I asked him his name and it was Kenneth Ciazzo.

I asked him where he was from and he said Brooklyn. I said, "What is the story here? Why are you picketing?" He said, "I don't know, but I think it has something to do with the machine in there, the jukebox."

I said, "Are you sure?" and he said, "No." I said, "What is this local?" and he said, "266." I said, "Where are they located?" He happened to look at the sign and read upside down from the sign the address of local 266 in New York City. He didn't even know the address of the local for which he was picketing.

He then indicated to Detective Jordan and myself that he had been hired, that he was not a member of the union, that he had merely been hired, that he had worked in Brooklyn on the docks, that he received something like $1 an hour for this work.

Mr. KENNEDY. Do you want to have those made exhibits, Mr. Chairman?

The CHAIRMAN. I hand you three photostatic copies of documents. I will ask you to examine the first one and state if you identify it. (The document was handed to the witness.)

Mr. KELLY. Yes, sir; I do.

The CHAIRMAN., What is it?

Mr. KELLY. This is the agreement that Nu-Way Phonograph made with Caruso's Restaurant on July 13, 1956.

The CHAIRMAN. That may be made exhibit No. 34.

(Document referred to was marked "Exhibit No. 34" for reference and may be found in the files of the select committee.)

The CHAIRMAN. I hand you two other photostatic copies. They appear to be what is entitled "Rush Order." They are not alike, however. They are for different purposes, apparently.

Will you examine those and state if you identify them?

(The documents were handed to the witness.)

Mr. KELLY. Yes, sir, Senator. One is the rush order for Economy Vending Service, Mr. Zimmerman's outfit, for a new Wurlitzer outfit, and the other is for a Smokeshop cigarette machine.

Both the jukebox and the cigarette machine were purchased by Mr. Caruso for his own use in that restaurant.

The CHAIRMAN. They may be made exhibit No. 34A and 34B. (Documents referred to were marked "Exhibits 34A and 34B" for reference and may be found in the files of the select committee.)

Mr. KENNEDY. Mr. Jacob, did you tell the gentleman, Mr. Zimmerman, who wanted to sell this jukebox to the Caruso Restaurant, when he said he intended to do that, that "You have a nice wife and child, and you better get smart"?

Mr. EUGENE JACOB. I respectfully decline to answer on the ground that my answer may tend to incriminate me.

Mr. KENNEDY. Just because this man was going to sell a jukebox in a location that you wanted, you were threatening his wife and his child; is that right, Mr. Jacob?

Mr. EUGENE JACOB. I respectfully decline to answer because I feel that my answer might tend to incriminate me.

Mr. KENNEDY. This whole idea about the operation of the union, the establishment of the union, bringing these gangsters in, you played a very major role in it; did you not, Mr. Jacob? It was your idea to a large extent? You brought the Gallos in; did you not?

Mr. EUGENE JACOB. I respectfully decline to answer on the ground that my answer may tend to incriminate me.

Mr. KENNEDY. When they were able to move legally against this gangster-run union, local 19, you proceeded to bring in local 266 of the Teamsters; is that right?

Mr. EUGENE JACOB. I respectfully decline to answer on the ground that my answer may tend to incriminate me.

Mr. KENNEDY. The whole reason for you doing this, as has been testified to here by two separate witnesses, was that you expected to establish a monopoly in the whole city of New York, with you_controlling the jukebox and the game machines in the city of New York, with the help and assistance of these gangster-run unions; is that right?

Mr. EUGENE JACOB. I respectfully decline to answer because I honestly feel that my answer may tend to incriminate me.

Mr. KENNEDY. And anybody that stood in your way was threatened or beaten; is that right, Mr. Jacob?

Mr. EUGENE JACOB. I respectfully decline to answer because I feel my answer may tend to incriminate me.

Mr. KENNEDY. When you had some opposition, like you had the opposition from Mr. Green, you took your group out of the regular association, formed your own association, and then Mr. Green was badly beaten, so that he continuously has headaches and has trouble walking, and has lost a lot of control over his faculties; is that right? Mr. EUGENE JACOB. I respectfully decline to answer because I honestly feel it would tend to incriminate me.

Mr. KENNEDY. Isn't that the way this whole thing is operated and run, that this is not a union operation, but it is an underworld operation, and that they need the assistance of people such as yourself who have these underworld connections to try to spread your tentacles out through the whole of the city and use the union in order to further your own design; isn't that right?

Mr. EUGENE JACOB. I respect fully decline to answer on the ground that the answers may tend to incriminate me.

Mr. KENNEDY. And you financed the union, as has been testified to here before the committee, did you not, local 266, and called it your union?

Mr. EUGENE JACOB. I respectfully decline to answer on the ground that the answer may tend to incriminate me.

The CHAIRMAN. Do any Teamsters belong to that union? That is, 266. Do you know of any?

Mr. EUGENE JACOB. I respectfully decline to answer on the ground that the answer may tend to incriminate me.

Mr. KENNEDY. The forming of the other association, according to our information, in that, Bert Jacob put up $1,000 and Eugene Jacob put up $500. That was $1,500 out of the $2,000 that went to form this association. Then the contract with local 266 was immediately signed.

Is that right?

Mr. EUGENE JACOB. I respectfully decline to answer because I honestly feel that my answer might tend to incriminate me.

Mr. KENNEDY. In fact, the records that we have show that the contract between this United Coin Association and local 266 was entered into before the association ever even came into being. Is that right? Mr. EUGENE JACOB. I respectfully decline to answer because I honestly feel that my answer may tend to incriminate me.

Mr. KENNEDY. We have a letter that went out on January 27, 1958; a notice to the operators. It was mailed out over Eugene Jacob's signature, which stated, "We have signed a collective bargaining agreement with local 266 of the Teamsters." That is January 27, 1958.

A contract in the committee's possession between United Coin and local 266 of the Teamsters, is dated January 28, the following day. However, the minutes of that first board of directors' meeting show that that occurred on January 29, 1958, the day following.

Can you explain that to us?

Mr. EUGENE JACOB. I respectfully decline to answer because I honestly feel that my answer might tend to incriminate me.

Mr. KENNEDY. And the minutes further show that the first meeting of the membership was held on January 30, 1958, at which time it was announced that the association had negotiated a contract with local 266 of the Teamsters.

Can you explain to us how you can enter into a contract between an association and a union when the association had not yet come into being? That is No. 1.

The second point is: Were the membership who were involved in this, the local employees, the employees that worked for you people, were they ever consulted?

Obviously, from this chronology, they were not.

Is that right?

Mr. EUGENE JACOB. I respectfully decline to answer because I honestly believe my answer may tend to incriminate me.

Mr. KENNEDY. This was just a scheme on your part, was it not, to control the coin-machine business in New York City?

Mr. EUGENE JACOB. I respectfully decline to answer because I honestly believe my answer may tend to incriminate me.

Mr. KENNEDY. And you moved the Gallo brothers, have you not, the strong-arm brothers, down into these other States, Pennsylvania and West Virginia, and Ohio, to further your aims? Is that right? Mr. EUGENE JACOB. I respectfully decline to answer on the ground that my answer may tend to incriminate me.

Mr. KENNEDY. Mr. Chairman, would you want to put in the records showing these dates?

The CHAIRMAN. Have we the evidence here?

Mr. KENNEDY. Yes.

The CHAIRMAN. Mr. Constandy, you have been previously sworn. You may testify about it.

Mr. CONSTANDY. I have before me a certified copy of the certificate. The certificate was signed on January 17, 1958, and filed January 20, 1958. It bears the certification by the secretary of state.

The CHAIRMAN. That may be made exhibit No. 35.

(Document referred to was marked "Exhibit No. 35" for reference may be found in the files of the select committee).

and

Mr. CONSTANDY. I have before me on the letterhead of the United Coin Machine Operators of New York, Inc., a notice to fellow operators, dated January 27, 1958, and it was delivered to the staff members by the Association of United Coin Machine Operators.

The CHAIRMAN. It may be made exhibit 35A.

(Document referred to was marked "Exhibit 35A" for reference and may be found in the files of the select committee).

Mr. CONSTANDY. I also have before me the total minutes of the United Coin Machine Operators Association which were delivered to the committee. They are five in number, dated January 29th, which is the meeting of the board of directors; a general meeting, minutes for January 30; then February 18, 28, and March 12, all in 1958. The CHAIRMAN. They may be made exhibit No. 36.

(Documents referred to marked "Exhibit No. 36" for reference and may be found in the files of the select committee.)

Mr. CONSTANDY. Those, incidentally, were unsigned copies that we received.

Mr. KENNEDY. We have also some information or evidence that the United Coin was paying at least some of the bills of the Gallo brothers. Is that right, Mr. Jacobs?

Mr. EUGENE JACOBS. I respectfully decline to answer because I honestly feel that my answer may tend to incriminate me.

Mr. KENNEDY. We have here a check, Mr. Chairman, in the amount of $175, drawn on the United Coin account. We have the rest of the documentation showing how the money was spent.

The CHAIRMAN. I hand you here, Mr. Eugene Jacob, an original check, dated March 20, 1958, drawn on the Chase National Bank of New York. It is payable to station M, or W-I can't be sure whichMr. KENNEDY. Station M.

The CHAIRMAN. In the amount of $175. It is signed United Coin Machine Operators of New York, by Eugene Jacob, president; Maxwell Gulden, secretary.

Attached to it is an information request made out in the name of Albert Gallo, and addressed to Robert J. Cofini.

There is also attached a calling card of Station M, Inc., together with an invoice on the station M invoice blank, giving different items, a total of $376.02, the invoice being dated March 1, 1958.