Mr. KENNEDY. In 1956 the gross receipts were $48,000-plus. A net income was $8,000-plus. In 1955 the net income was just under $7,000. Is that correct? Mr. COLEMAN. I respectfully decline to answer because I honestly believe my answer might tend to incriminate me. Mr. KENNEDY. And also a third interest was held by his wife, another interest, Mr. Chairman, that he had, in the Bruce Vending Co., held in the name of his wife as sole owner of the company, operating 175 cigarette vending machines. Is that correct? Mr. COLEMAN. I respectfully decline to answer because I honestly believe my answer might tend to incriminate me. Mr. KENNEDY. He solicits and obtains locations and works on the books of accounts and repairs the machines. Is that right? Mr. COLEMAN. I respectfully decline to answer because I honestly believe my answer might tend to incriminate me. Mr. KENNEDY. Mr. Chairman, could I call Mr. Kaplan to ask him what the gross receipts of that company have been? The CHAIRMAN. Yes, sir. TESTIMONY OF ARTHUR G. KAPLAN-Resumed Mr. KENNEDY. Round off the gross receipts of 1953. Mr. KAPLAN. From an examination of the books and records of the company, we found that the gross receipts of the company in 1953 were almost $11,000. Mr. KENNEDY. 1954? Mr. KAPLAN. $61,000 Mr. KENNEDY. 1955? Mr. KAPLAN. $130,000. Mr. KENNEDY. And 1956? Mr. KAPLAN. $158,000. The CHAIRMAN. What company is that? Mr. KENNEDY. The Bruce Vending Co. We have also found him in the John Hotka Trucking Co. Mr. KAPLAN. Yes, sir. Mr. KENNEDY. And the Bruce Coffee Vending Co. as a partner with John Hotka? Mr. KAPLAN. Yes, sir. Mr. KENNEDY. My statements in connection with that have been verified by the records? Mr. KAPLAN. An examination of the records and license records and accounting records. Mr. KENNEDY. Mr. Coleman represents the drivers of the Peter P. Ellis Trucking Co. ? Mr. KAPLAN. Yes, sir. Mr. KENNEDY. Isn't it correct that we also found that he stores his vending machines in the Peter P. Ellis warehouse? Mr. KAPLAN. Yes, sir. Mr. KENNEDY. And he has his machines sent to the Peter P. Ellis Trucking Co. to store his machines? Mr. KAPLAN. Yes, sir. Mr. KENNEDY. And he represents those drivers? Mr. KAPLAN. Yes, sir. Mr. KENNEDY. And he also stated to an investigator that Mr. Hoffa was well aware of the fact that he had an interest in these -companies? Mr. KAPLAN. Yes, sir. Mr. KENNEDY. Is that correct, Mr. Coleman? Mr. COLEMAN. I respectfully decline to answer because I honestly believe my answer might tend to incriminate me. The CHAIRMAN. Mr. Kaplan, did you interview Mr. Coleman? Mr. KAPLAN. Yes, sir; I did. The CHAIRMAN. You may then testify to any statement that Mr. Coleman made to you at the time you interviewed him. Mr. KENNEDY. Mr. Chairman, we have a rather important matter in connection with Mr. Coleman, in connection with which I would like to call a witness, if I may. The CHAIRMAN. All right. Mr. KENNEDY. Mr. Salinger. Mr. Chairman, we found Mr. Coleman in the coin machine business and in the trucking business. We have also gone into another facet of Mr. Coleman's activities which shows again a pattern for the Teamster business agent operations in the city of Detroit. Senator CURTIS. Is Mr. Coleman still an employee of the Teamsters Union? Mr. KENNEDY. Yes. He is a business agent with local 337. Senator CURTIS. And he was during all of this period we are talking about? Mr. KENNEDY. Yes. He had the two convictions and all of these outside interests. And he works for local 337, which is headed by Owen Bert Brennan, the vice president of the Teamsters. Do you want to swear Mr. Salinger? 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. SALINGER. I do. TESTIMONY OF PIERRE E. G. SALINGER-Resumed The CHAIRMAN. State your name. Mr. SALINGER. My name is Pierre Salinger. I reside in Washington, D.C., and I am an investigator for this committee. The CHAIRMAN. Proceed. Mr. KENNEDY. Mr. Salinger, you have made a study and investigation of the linen industry in the city of Detroit? Mr. SALINGER. I have, sir. Mr. KENNEDY. Have we found, as we found in the laundry industry in the city of Detroit, that certain business agents of the Teamsters, or representatives of the Teamsters, have worked in the interest of one or more companies? Mr. SALINGER. We have, sir. Mr. KENNEDY. And have used their union position to further the interests of a company? Mr. SALINGER. We have, sir. Mr. KENNEDY. And have we found that Mr. Coleman specifically has worked for a particular company in the city of Detroit? Mr. SALINGER. We have, sir. Mr. KENNEDY. Would you relate to the committee what we have found and what documents we have in connection with it? Mr. SALINGER. First, sir, to give a little background on this, there is a large drug chain in the city of Detroit called the Kinsel Drug Stores. In early 1954 a building was purchased in Detroit which housed one of these Kinsel Drug Stores. It was purchased by a gentleman named Mr. Nick Genematas. Mr. Genematas is also the president of the Marathon Linen Service Co. in Detroit. After purchasing this building which housed this Kinsel Drug Store, he then attempted to get the account of the Kinsel Drug Stores and was successful in getting the account for this one drugstore which was located in the building he then owned. Subsequently he was able to negotiate a contract with the Kinsel Drug Stores for a 2-year period, covering all 23 of the Kinsel Drug Stores in the city of Detroit. Mr. KENNEDY. What was he going to do for them? Mr. SALINGER. As a condition of getting this contract, the Marathon Linen Co. agreed to give the Kinsel drug chain a 5 percent cut in the prices they had to pay over those the supplier had at that time, the Progressive Linen Co. Mr. KENNEDY. The companies we will be talking about, then, today, are the Marathon and the Progressive? Mr. SALINGER. That is correct, sir. In addition, they also agreed, which was a side thing, but which was important as far as the Kinsel Drug Stores were concerned, they agreed to deliver the linens in individually wrapped packages. I might explain that the Progressive Linen Co. was a member of the association in Detroit, which at that time was called the Michigan Linen Board of Trade and then became known as the Michigan Linen Service Institute. This is an association made up of linen suppliers in the city. On the other hand, the Marathon Linen Co. was not a member of the association. They operated outside of the association as an independent. Mr. KENNEDY. We made an investigation of this association, did we not? Mr. SALINGER. We did, sir. Mr. KENNEDY. And subsequent to our investigation and the report that you made back to the committee, not in public session, but the report which has been mailed to members of the committee, that association has gone out of existence? Mr. SALINGER. The association has gone out of business. Mr. KENNEDY. On the association, who was the head of the association? Mr. SALINGER. The head of the association was Mr. Monroe Lake. Mr. KENNEDY. How long had he been head of the association? Mr. SALINGER. He had been head of the association since approximately 1950 or 1951. Mr. KENNEDY. By whom was he placed as head of the association? Mr. SALINGER. From my conversation with members of the linen industry in Detroit, I was told that he had been placed there at the suggestion of Mr. James Hoffa. Mr. KENNEDY. Was he also an associate of Mr. Fitzgerald? Mr. SALINGER. He had operated out of Mr. Fitzgerald's office for a period of time on a project that he was interested in at that time. Soon after the contract was signed-it was signed on August 1, 1954; I have here a copy of the contract-soon after the contract was signed, the president of the Kinsel drug chain, Mr. William Downey, made a vacation trip to Montana, and while he was away to visit was paid to his office by Mr. Morris Coleman. I think maybe at this time, Mr. Kennedy, it might be good to read Mr. Downey's affidavit into the record in regard to this matter. Mr. KENNEDY. We have an affidavit from this individual who is of some importance, Mr. Chairman. He has been in ill health, however. We felt that we could get the necessary information into the record through the affidavit. The CHAIRMAN. The affidavit may be printed in the record in full at this point. You may read the substance of it. Mr. SALINGER. This is the affidavit of William D. Downey, who resides at 207 Abbey Road, Birmingham, Mich., and identifies himself as the president of the Kinsel Drug Co., a chain which operates some 23 drugstores throughout the Detroit area. For the last 10 years, the Kinsel Drug Co. has been obtaining its linen supplies from the Progressive Linen Co. Some time in 1954 Kinsel's acquired an independent drug company which was located in a building owned by Mr. Nick Genematas. Mr. Genematas is the proprietor of the Marathon-Bryant Linen Supply Co. The Marathon Linen Co. had been supplying the service to this independent drug company and, following our acquisition of the store, they continued to service it. Mr. Genematas sought to take over the service at the remainder of the Kinsel Drug Stores in the Detroit metropolitan area. Some time in July of 1954 they made an attractive proposal to us which included an overall 5 percent price reduction plus the delivery of the linens in individually wrapped packages. As a result of this offer, we signed a contract with Marathon Linen for a 2-year period. Following the signing of this contract, I took a vacation trip to Montana. In my absence, a call was made to my office by Mr. Morris Coleman, a business agent for local 337 of the Teamsters Union. Kinsel's has union contracts with three unions, one of which is local 337 of the Teamsters, the others being the Hotel and Restaurant Workers Union and the Retail Clerks Union, local 876. Upon my return to Detroit, Mr. Coleman came to see me and told me that he wanted to have Kinsel's return the linen service to Progressive Linen. Mr. Coleman stated that he did not want to see a price war start in the linen industry in Detroit, because it would adversely affect the wages of the laundry drivers who were members of the Teamsters Union. Mr. KENNEDY. So this witness, a representative of the Teamsters Union, went to this company and told them they should not make a contract with the Marathon Linen Co. and should, in turn, give their business back to the Progressive? Mr. SALINGER. That is correct. The reason he gave was that he didn't want the price war to start, but we will go into that matter. Mr. KENNEDY. And this company had contracts with the Teamsters Union? Mr. SALINGER. That is correct. They had contracts with local 337, and Mr. Coleman was the business agent and represented the Teamsters at the Kinsel drugstores. He was their active business agent. Mr. KENNEDY. As well as local 876 of the Retail Clerks, which at that time was a captive local of the Teamsters? Mr. SALINGER. That is correct. I told Mr. Coleman that we had receive a price differential which was attractive to the company and Mr. Coleman said they were not going to allow this. Following Mr. Coleman's visit, I talked to the Marathon Linen Co. and was told that the price cut would in no way be reflected in the drivers' earnings at Marathon. Mr. Coleman paid a second visit to me, this time in the company of Alex Nichamin, who is one of the owners of Progressive Linen. At this meeting, Mr. Coleman was adamant that we give the business back to Progressive. His statements to me were more than a request. Following this visit, I received a telephone call from Mr. Joseph Maiullo, who is the attorney for the Marathon-Bryant Linen Co. I told Mr. Maiullo about Mr. Coleman's request that we give the service back to Progressive and he told me that he could straighten the whole problem out. He called me back later and told me that he had talked to Mr. James Hoffa of the Teamsters Union and that the whole matter had been straigthened out. Following this, however, I received another visit from Mr. Coleman, who insisted that we return to Progressive. Mr. Coleman said that Marathon was not in the linen association and the association did not want its members losing business to nonmembers. Following this visit, I discussed the entire matter with my attorney, Mr. Glen R. Miller, who advised me that in the interests of continuing good relations with the Teamsters Union, we should give the business back to Progressive. Accordingly, we canceled the Marathon contract at all but the original drugstore which was in the building owned by Mr. Nick Genematas. Mr. KENNEDY. Who got the contract then? Mr. SALINGER. Progressive got it back and still has it. (The full affidavit referred to follows:) AFFIDAVIT STATE OF MICHIGAN, JULY 17, 1958. I, William D. Downey, who resides at 207 Abbey Road, Birmingham, Mich., make the following voluntary statement to Pierre Salinger, who has identified himself to me as an investigator for the Senate Select Committee on Improper Activities in the Labor or Management Field. This affidavit is not the result of either threat or promise and is made with the understanding that it may be read at a public session of the Senate Select Committee on Improper Activities in the Labor or Management Field. I am the president of the Kinsel Drug Co., Detroit, Mich., a chain which operates some 23 drugstores throughout the Detroit area. I have served as president of this company since March 1958 and, prior to that, I was vice president and have been associated with the management of Kinsel Drug Stores since 1935. For the last 10 years, the Kinsel Drug Co. has been obtaining its linen supplies from the Progressive Linen Co. Sometime in 1954 Kinsel's acquired an independent drug company which was located in a building owned by Mr. Nick Genematas. Mr. Genematas is the proprietor of the Marathon-Bryant Linen Supply Co. The Marathon Linen Co. had been supplying the service to this independent drug company and, following our acquisition of the store, they continued to service it. Mr. Genematas sought to take over the service at the remainder of the Kinsel Drug Stores in the Detroit metropolitan area. Sometime in July of 1954 they made an attractive proposal to us which included an overall 5 percent price reduction plus the delivery of the linens in individually wrapped packages. As a result of this offer, we signed a contract with Marathon Linen for a 2year period. Following the signing of this contract, I took a vacation trip to Montana. In my absence, a call was made to my office by Mr. Morris Coleman, a business agent for local 337 of the Teamsters Union. Kinsel's has union contracts with three unions, one of which is local 337 of the Teamsters, the others being the Hotel and Restaurant Workers Union and the Retail Clerks Union, local 876. Upon my return to Detroit, Mr. Coleman came to see me and told me that he wanted to have Kinsel's return the linen service to Progressive Linen. Mr. Coleman stated that he did not want to see a price war start in the linen industry in Detroit because it would adversely affect the wages of the laundry drivers who were members of the Teamsters Union. I told Mr. Coleman that we had received a |