INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD MONDAY, APRIL 29, 1957 UNITED STATES SENATE, SELECT COMMITTEE ON IMPROPER ACTIVITIES Washington, D. C. The select committee met at 4:30 p. m., pursuant to Senate Resolution 74, agreed to January 30, 1957, in the caucus room, Senate Office Building, Senator John L. McClellan (chairman of the select committee) presiding. Present: Senator John L. McClellan, Democrat, Arkansas; Senator Irving M. Ives, Republican, New York; Senator Pat McNamara, Democrat, Michigan; Senator Karl E. Mundt, Republican, South Dakota. Also present: Robert F. Kennedy, chief counsel of the select committee; Lavern J. Duffy, investigator; Ruth Young Watt, chief clerk. (Members present at the convening of the session: Senators McClellan, Ives, McNamara, and Mundt.) The CHAIRMAN. The committee will be in order. Mr. KENNEDY. Mr. Adelstein. The CHAIRMAN. You will be sworn, please, sir. You do solemnly swear that 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. ADELSTEIN. I do. TESTIMONY OF BERNARD ADELSTEIN, ACCOMPANIED BY COUNSEL, DAVID I. SHIVITZ Mr. SHIVITZ. Mr. Chairman, may the witness remain in the seat he is in now? His right ear has no eardrum, and he cannot hear on that side. The only ear I can speak into is the left ear. The CHAIRMAN. If it is all right with the witness, you may occupy that seat. Mr. SHIVITZ. May I also say to the chairman that I understood from my conversation with counsel that this was going to be an executive session and not an open session. Mr. KENNEDY. I said I thought it would be. I have nothing to do with it. The CHAIRMAN. The counsel does not make that determination. I have no objection to an executive session. Mr. SHIVITZ. I think we can close much faster in an executive session than we can in an open hearing, Mr. Chairman, and I re spectfully ask the Chair and the committee to indulge us to that extent. The CHAIRMAN. I am going to ask a few questions in public of your client. You testified before the subcommittee in New York last Friday, did you not, sir? Mr. ADELSTEIN. I did. The CHAIRMAN. For the record, will you state your name, your place of residence, and your business or occupation? Mr. ADELSTEIN. Bernard Adelstein. I live at 60 Grist Mill Lane, Great Neck, N. Y. I am secretary-treasurer of local 813, Private Sanitation Union, affiliated with the International Brotherhood of Teamsters and affiliated with the AFL-CIO. The offices are at 147 Fourth Avenue, New York City. The CHAIRMAN. Thank you. Counsel, would you again identify yourself for the record? Mr. SHIVITZ. My name is David I. Shivitz, an attorney, 271 Madison Avenue, New York City, of the firm of Halperin, Natanson, Shivitz, Scholer & Steingut. The CHAIRMAN. Mr. Adelstein, you have been previously served with subpenas to deliver certain records to the committee; is that correct? Mr. ADELSTEIN. That is true. (At this point, Senator Goldwater entered the hearing room.) The CHAIRMAN. We discussed these subpenas and the records in your testimony in New York last Friday? Mr. ADELSTEIN. We did. The CHAIRMAN. You are, of course, familiar with the subject matter of the investigation and the records and documents that the committee seeks to secure? Mr. ADELSTEIN. That I am. The CHAIRMAN. You were ordered last Friday to bring those records called for in the subpenas, to bring those records and present them here to the committee today. Have you complied with the request, with the order, to bring your records here? (The witness conferred with his counsel.) Mr. SHIVITZ. May I interrupt? The CHAIRMAN. No, sir. The question is directed to the witness. You may confer with him. (The witness conferred with his counsel.) Mr. ADELSTEIN. Mr. Chairman, the records that you have requested are all downstairs in an automobile. We were asked to be present here at about a quarter to 3, in room 101. We waited there up until a little while ago, when we were informed that we should come up here. The records are in a car downstairs. The CHAIRMAN. That is all right. Then, are you prepared to turn them over to the committee? Mr. SHIVITZ. At this time, Mr. Chairman, may I make a statement? The CHAIRMAN. I am asking the witness a question. He can answer whether he is prepared to turn them over. (The witness conferred with his counsel.) Mr. ADELSTEIN. Mr. Chairman, at this time I would like to answer you in the form of a statement. The CHAIRMAN. The Chair will permit you to make a statement, but answer first, if you can, whether you are going to turn over the records as you have been directed. The Chair then will permit you to make a statement of explanation. (The witness conferred with his counsel.) Mr. ADELSTEIN. Mr. Chairman, I know that you will receive your reply in the form of a statement. The CHAIRMAN. All right. Proceed. I will see what it is. Mr. SHIVITZ. Mr. Chairman, if I may, before the witness reads the statement, I would like to say that this is the exact same statement that was read to the Chair, sitting as a subcommittee of one, on Monday. But, in addition to that, and that was the reason that I felt that a closed session might be more efficient, practical, and timesaving, I have some additional suggestions to make which I think will be acceptable to counsel and the committee. The CHAIRMAN. Let us get the witness' testimony and then we will see whether we are going to get the records or not. Mr. ADELSTEIN. On Monday, March 11, 1957, Robert Greene and James P. Kelly, employees of this committee, called at the offices of our union at 147 Fourth Avenue, New York City. They told us they were investigators from this committee, and served subpenas on the union, the welfare fund, and on me, personally. They conferred with Michael Wolpert, attorney for the union, and with me. They asked to see various documents and records and correspondence, all of which were shown to them. They took certain correspondence from the files and asked permission to take it from our office in order to photostat it, saying they would return it the following day. Not until at least 2 weeks later were the papers returned, and then only after Mr. Shivitz made repeated requests for them. In the course of this visit, which lasted for several hours, Mr. Greene and Mr. Kelly examined, among other things, a personal telephone index belonging to me, which I had kept for many, many years. Prior to leaving the office, they said they wanted to take that book with them, also. I told them I did not wish them to take it; that they could look at it as they had been doing, but I did not feel they should take it with them. They were free to copy anything they looked at. After that, additional subpenas were served, and the union, the welfare fund, and I, as well as my wife, retained the services of the firm of Halperin, Natanson, Shivitz, Scholer & Steingut to advise us in this matter. Mr. David I. Shivitz is the partner in charge of this matter for the firm. After Mr. Shivitz arranged with the representatives of the committee for service to be made on Mrs. Adelstein at his offices, blanket subpenas and subpenas duces tecum were served on Mrs. Adelstein, individually and as an officer of Shapco Corp., for all books and records, et cetera. After further consultation with representatives of your committee, Mr. Shivitz advised us that he had arranged with the representatives of the committee to have all the books and records requested brought to our attorney's offices, where a room would be made available to the committee representatives to examine the same. Melville Wolpert, a certified public accountant who has been the accountant for all of the witnesses and is familiar with their books and records, was present with the books and records while they were being examined by representatives of the committee. Committee representatives attended at the offices of our attorneys for a period of a little more than 1 week, and all the material requested by them was produced for their examination. I am now advised by my counsel that the committee representatives are not satisfied with this arrangement, but wish to have the committee representatives remain alone with all our books and records. Our attorneys advise us that we are within our rights in placing a representative with this material while representatives of the committee examine it. We desire to assert these rights. While we are informed that no. reason need to be given to support our assertion of rights, I should like the committee to understand my reasons for doing so. I have been interrogated and investigated by the district attorney's office in New York County and Nassau County as well as by the attorney general of the State of New York. As a union official I anticipate that this will not be the end of such investigations or interrogations. The business of our union is substantial. We have over 1,800 members. The welfare and pension funds have assets of more than $12 million. I am in a position of trust with respect to the records of the union, and am responsible for the same. I feel that the only proper safeguards of these books and records is the continued exercise of the right to retain custody over this property. My attorney advises me that the committee may require the production of this material and compel me to testify with respect thereto. This I am ready to do. I have already done more than this. I have made this material available in the manner heretofore stated. Another reason for me to insist on exercising my rights is that I desire to know what material the committee wishes to copy or photostat in order that I may be prepared to testify with respect to such time as I may be called upon to do so. Since the material called for here covers several years and numerous transactions too numerous for me to inform myself about in its entirety, I feel that I have a right and obligation to ascertain by proper means the subject of any future questioning which the committee may have for me, so that I may be an informed, intelligent and cooperative witness. The CHAIRMAN. Then I understand that you are refusing to turn over your records? (The witness conferred with his counsel.) Mr. ADELSTEIN. Mr. Chairman, as outlined in this statement, I am willing to comply, as outlined in the statement, and as my counsel would also request. The CHAIRMAN. If I understand you correctly, you want to name all the conditions upon which the records can be looked at. The Chair is not going to do that, unless the committee requires him to do so. He is not going to adopt any such policy. We discussed this quite extensively in New York last Friday. I ordered you to bring your records here so that the committee can determine whether it is going to let you name all the conditions or whether we are going to receive the records. I think it is a pretty vital thing for the committee to decide. We have the authority under the law, under the resolution, to get the records from others, and I do not know any reason why we should show some favoritism to you. I will submit the matter to the committee. Mr. SHIVITZ. Mr. Chairman, before the matter is submitted to the committee, may I respectfully ask the Chair and the committee's indulgence to explore this further, if it is possible to do so, at a closed session? I am ready to go into one at this point. If you feel you would like to have it aired at a public hearing, where I don't think we can be nearly as effective, I am ready for that. Senator MUNDT. Mr. Chairman, I think this is a very vital public point, and I think the public is entitled to know whatever reasons Mr. Shivitz has. I would like to hear them, but I do think it is public business. There would be no purpose served in going into executive session. Mr. SHIVITZ. As I stated at the outset, Senator Mundt, counsel informed me that we were going into executive session. He has explained that he assumed that. He does not, of course, run the committee. Mr. KENNEDY. Say what I told you, that I thought that the session would be held in executive session. I did not say that the committee would hold an executive session on it. Straighten it out. Mr. SHIVITZ. I think there is a difference without any distinction. But in any event, Senator Mundt, I am only saying this because of the great patience with which your chairman indulged me on Friday, and we made a great deal of progress on it. I felt if we continued on that vein, we would close the matter to everybody's satisfaction. I am perfectly ready to go ahead in an open hearing. Senator MUNDT. I am hoping for the same eventuality, but I do not see any purpose to be served in going into executive session. This is a public session, and you should have your reasons spread on the record in public. Mr. SHIVITZ. May I be heard, Mr. Chairman? The CHAIRMAN. The Chair will listen to you, but I do not want a long statement. Mr. SHIVITZ. Mr. Chairman, the facts as outlined by the witness, I think, speak for themselves. In addition to that, as you stated a moment ago, this Senate committee, this select committee, is vested with very broad powers. From the resolution granting the powers and which gave birth to the committee, we find in section 4 the power to issue subpenas. That power, in subdivision 4 of section 4, is specifically enumerated as follows: "Require by subpena or otherwise the attendance of such witness" and here are the important words "and production of such correspondence, books, papers, and documents." That is what it requires. It can require the production of books, records, and documents. The courts have spoken on the interpretation of the word "production" in civil and criminal cases, with prosecutors, attorneys general, complainants, and parties to litigation. The courts have repeatedly held that the right of a party, or body, to call for the production of books and records does not carry with it the right to obtain or retain possession thereof. In order to do that, under our form of Govern |