The CHAIRMAN. That will be incorporated in the same request. The committee will stand in recess until 2 o'clock.

(Whereupon, at 12:25 p.m. the subcommittee was recessed to be reconvened at 2 p.m., the same day.)

(Members present at the time of recess: Senators McClellan and Mundt.)

AFTERNOON SESSION

(The subcommittee reconvened at 2:15 p.m., Senator John L. McClellan, chairman of the subcommittee, presiding.)

The CHAIRMAN. The committee will come to order.

(Members of the subcommittee present at time of reconvening: Senators McClellan and Curtis.)

The CHAIRMAN. Mr. Counsel, you may resume. witness.

Mr. ADLERMAN. Thomas Kelly, Jr., and Mr. Hillery.
The CHAIRMAN. The witnesses will be sworn.

Call the next

You, and each of you, do solemnly swear the evidence you shall give before this Senate subcommittee shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. HILLERY. I do.

Mr. KELLY. I do.

TESTIMONY OF THOMAS F. KELLY, JR., AND MARTIN M. HILLERY, ACCOMPANIED BY COUNSEL, THOMAS D. NASH

The CHAIRMAN. Mr. Kelly, will you identify yourself for the record by giving your name, your place of residence, and your business or occupation, please, sir?

Mr. KELLY. My name is Thomas F. Kelly, Jr. I live at 10201 South Leavitt Avenue, Chicago, Ill.

The CHAIRMAN. Do you have some business or occupation from which you make a living?

Mr. KELLY. I respectfully decline to answer on the grounds that the answer might tend to incriminate me.

The CHAIRMAN. Mr. Hillery, will you identify yourself and tell us who you are, where you live, and what you do?

Mr. HILLERY. Martin M. Hillery, 7419 South Clyde Avenue, Chicago, Ill.

The CHAIRMAN. Did you finish?

Mr. HILLERY. Yes, sir.

The CHAIRMAN. What do you do for a living?

Mr. HILLERY. I respectfully decline to answer on the ground that my answer might tend to incriminate me.

The CHAIRMAN. Do either of you gentlemen have counsel?

Mr. HILLERY. Yes, sir.

Mr. KELLY. Yes, sir.

Mr. NASH. I represent both of these gentlemen. Thomas D. Nash, 111 West Washington Street, Chicago, Ill.

The CHAIRMAN. All right, Mr. Counsel, proceed.

Mr. ADLERMAN. Mr. Kelly, are you a partner in the Illinois Sports News?

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

The CHAIRMAN. Let me ask you again, Mr. Counsel, is that Illinois Sports News authorized and does it have a permit, a second-class mailing permit?

Mr. ADLERMAN. Yes, it does.

The CHAIRMAN. Is that owned by the Kellys, this man and his father?

Mr. ADLERMAN. Tom Kelly, Jr., Tom Kelly, Sr., and George Kelly, the brother of Tom Kelly, Sr.

The CHAIRMAN. It is owned by the three Kellys?

Mr. ADLERMAN. Yes, sir.

The CHAIRMAN. Where these publications are involved, where the Kellys are involved, if any of them take the fifth amendment, I want the record referred to the Postmaster General for appropriate attention and action.

Mr. ADLERMAN. Mr. Kelly, do you have any connection or any ownership in the Central Illinois Printing Co.?

Mr. KELLY. I respectfully decline to answer on the ground that my answer my tend to incriminate me.

Mr. ADLERMAN. Isn't it a fact that you are a part owner of the Central Illinois Printing Co.?

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

Mr. ADLERMAN. And did you recently acquire the ownership of another printing company called the Bentley-Murray Co.?

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

Mr. ADLERMAN. Do both of these companies specialize in manufacturing or printing so-called hard cards?

Mr. KELLY. I respectfully

The CHAIRMAN. What kind of cards?

Mr. ADLERMAN. Hard cards, h-a-r-d.

The CHAIRMAN. Hard cards? What are they?

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. I was asking the counsel here. Is that all right? Mr. KELLY. I am sorry.

Senator CURTIS. That is not the counsel's answer.

The CHAIRMAN. No. Don't let the record-well, I guess it is straight.

Mr. ADLERMAN. I have before me, Mr. Chairman, a couple of samples of hard cards, which are part of the paraphernalia used by bookmakers in racing.

The CHAIRMAN. The counsel has just presented to me what he was referring to as "hard cards." I will present them to you and ask you to examine them and state if you identify these. Their title appears to be "Arlington Park." I don't know where that park is, but anyway, this is supposed to be a hard card. Look at it and see if you identify it.

(The documents were handed to the witness.)

The CHAIRMAN. Do you identify it?

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. It looks like an ordinary pasteboard card to me, except that it might have something on it that is out of the ordinary.

Did you observe anything on it out of the ordinary?

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. I see. Let that be marked "Exhibit No. 48," as having been presented to this witness.

(The documents referred to were marked "Exhibit No. 48" for reference and may be found in the files of the subcommittee.)

Mr. ADLERMAN. Mr. Hillery, you are the office manager of the Central Illinois Printing Co., are you not?

Mr. HILLERY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. Is that the printing company from which this material apparently is purchased that was testified to here?

Mr. ADLERMAN. They print it.

The CHAIRMAN. What is the other witness

Mr. ADLERMAN. The Central Illinois Printing Co. and the BentleyMurray Co. print these types of material.

The CHAIRMAN. This type of hard card, as you call it?

Mr. ADLERMAN. That is right. And it comes from-can I see that a moment?

The CHAIRMAN. Where is Arlington Park? Do you know? You can answer that. If you know

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. Do you know where Washington, D.C., is?

Mr. KELLY. I respect fully refuse to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. What word did you use?

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. Very well. All right.

Mr. ADLERMAN. This hard card is printed by the Bentley-Murray Co. and sold through the Illinois Sports News Service.

The CHAIRMAN. Is that the same company that printed the other paraphernalia that we introduced this morning?

Mr. ADLERMAN. Bentley-Murray Co. printed the betting slips. The CHAIRMAN. The betting slips?

Mr. ADLERMAN. Yes.

Senator CURTIS. May I ask counsel, as a matter of record, what is that card?

Mr. ADLERMAN. This is a card which contains the number of races at Arlington Park, showing the horses, number of the horses, and the position of the horses, and the numbers which they use for bookmaking purposes. It also shows the weights and the distance of the race. The bookmaker uses this to mark out what bets he is taking and also who is the winner, and down on the bottom they have a space there for win, place, and show, so that they keep a record. This is their bookkeeping record and also

Senator CURTIS. Could that be used at the racetrack?
Mr. ADLERMAN. That covers five tracks, incidentally.
Senator CURTIS. It could be used at the racetracks?
Mr. ADLERMAN. It has no purpose at the racetrack.

The CHAIRMAN. As I understand, this is used by the bookie to keep their records, when the bettors come in to collect their money.

Mr. ADLERMAN. That is right. He knows which horse won, which horse lost, and the numbers of the horses that are listed there.

We put this type of betting ticket into the record this morning. On this ticket you will notice a number on the bottom, and that is duplicated on the pad which the bookmaker keeps. This ticket is given to the bettor. The horse's number or name goes in the upper left-hand corner. They have three boxes there. The first box is the amount that is bet if you bet for first place, the second box is the amount that you put in for a bet if you bet for second place, and so forth.

In the lower hand box, many of the horserooms put their names of the horseroom in there. If it is a horseroom that they are operating and they don't care if they have their name or not

The CHAIRMAN. You mean the bookie room, if they want to advertise where they are, they put it in, and if they don't want to advertise, they keep it out?

Mr. ADLERMAN. Yes. And I think we had testimony this morning that there were 3 million tickets sold to the Louisville Printing Co., which was a subsidiary.

Senator CURTIS. That is all right. I do not wish to take any more time.

The CHAIRMAN. All right. Proceed.

Mr. ADLERMAN. Now, Mr. Hillery, have you seen that hard card? Mr. HILLERY. I respectfully decline to answer on the grounds that my answer might tend to incriminate me.

Mr. ADLERMAN. And is that hard card one of the hard cards that you deal with in your company?

Mr. HILLERY. I respectfully decline to answer on the grounds that my answer might tend to incriminate me.

Mr. ADLERMAN. I offer in evidence a so-called wall sheet, which is just one of a number which comprises a set.

The CHAIRMAN. I hold up something here and ask you to look at it and see if you identify what this may be, this sheet of paper here with names and numbers on it.

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

The CHAIRMAN. How about you?

Mr. HILLERY. I respectfully decline to answer on the grounds that my answer might tend to incriminate me.

The CHAIRMAN. Isn't this what is known as a wall sheet, where the bookie puts it up on the wall at his place of business so it can be seen by everyone, and isn't there a sheet like this for each race that is run that you are taking bets on?

Mr. HILLERY. I respectfully decline to answer on the grounds that my answer might tend to incriminate me.

The CHAIRMAN. What do these things mean, Sweet Ka'e, Happy News, Until, Tarella-are they horses' names?

Mr. KELLY. I respectfully decline to answer on the grounds that my answer may tend to incriminate me.

Mr. ADLERMAN. For the record, they are horses' names.

The CHAIRMAN. Some of them are pretty cute names.

This may be made exhibit No. 49.

(The document referred to was marked "Exhibit No. 49" for reference and may be found in the files of the subcommittee.)

The CHAIRMAN. Proceed. Let's move along.

Mr. ADLERMAN. Mr. Nafziger, will you take the stand, please?
The CHAIRMAN. Be sworn.

You do solemnly swear that the testimony you shall give before this Senate subcommittee shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. NAFZIGER. I do.

TESTIMONY OF ARNOLD E. NAFZIGER

The CHAIRMAN. Be seated and state your name and your residence and what you are doing now.

Mr. NAFZIGER. Arnold E. Nafziger, 1520 Atchison Street, Whiting, Ind. I am a member of the professional staff of the committee. The CHAIRMAN. Are you on loan from some other agency of Government?

Mr. NAFZIGER. Yes, sir.

The CHAIRMAN. What agency?

Mr. NAFZIGER. General Accounting Office.

The CHAIRMAN. How long have you been working there?

Mr. NAFZIGER. A little over a year, sir.

The CHAIRMAN. Are you an accountant?

Mr. NAFZIGER. Yes; I am.

The CHAIRMAN. Very good. Proceed, Mr. Counsel.

Mr. ADLERMAN. Do you have your working papers with you?
Mr. NAFZIGER. Some of them.

The CHAIRMAN. Working papers on what? What have you been investigating?

Mr. NAFZIGER. Central Illinois Printing Co. and Bentley-Murray. The CHAIRMAN. Very good.

Mr. ADLERMAN. From the examination of the records there, did you determine how many betting tickets were manufactured and sold by Central Illinois Printing Co.?

The CHAIRMAN. This is the Kelly syndicate now we are talking about?

Mr. NAFZIGER. Yes, sir.

The CHAIRMAN. Proceed.

Mr. NAFZIGER. In 1960, Bentley-Murray sold a total of $38,398.17 worth of betting tickets.

The CHAIRMAN. How much?

Mr. NAFZIGER. $38,398.17 worth. In 1961, for the first 7 months they sold $28,535.92 worth.

The CHAIRMAN. For the first how many months?

Mr. NAFZIGER. The first 7 months of 1961.

The CHAIRMAN. It shows that business is getting better.

Mr. NAFZIGER. A little bit, I would say.

Senator CURTIS. How many tickets does that amount to?

Mr. NAFZIGER. 27,500,000 total.

The CHAIRMAN. 27,500,000?

Mr. NAFZIGER. That is right, sir. Individual tickets.

Mr. ADLERMAN. Those are the pads we put into an exhibit this morning.

Mr. NAFZIGER. Yes.

The CHAIRMAN. Does that represent a pad or each ticket?