LOCAL 706, PLUMBERS & STEAMFITTERS UNION,

EL DORADO, ARK.

(On August 16, 1960, the following witnesses testified in executive session during hearings held by the Subcommittee on Investigations. This testimony was made public on September 23, 1960, by members of the subcommittee and follows below.)

TUESDAY, AUGUST 16, 1960

U.S. SENATE,

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS OF THE

COMMITTEE ON GOVERNMENT OPERATIONS,
Washington, D.CO.

The permanent subcommittee met at 1:30 p.m., pursuant to section 5, Senate Resolution 255, agreed to April 11, 1960, in room 3302, Senate Office Building, Senator John L. McClellan (chairman of the permanent subcommittee) presiding.

Present: Senator John L. McClellan, Democrat, of Arkansas; Senator Sam J. Ervin, Jr., Democrat, of North Carolina; Senator Edmund S. Muskie, Democrat, of Maine.

Also present: Jerome S. Adlerman, general counsel; James F. Mundie, investigator; LaVern J. Duffy, investigator; Ruth Y. Watt, chief clerk.

The CHAIRMAN. The committee will come to order.

(Members of the permanent subcommittee present at time of convening: Senators McClellan and Muskie.)

The CHAIRMAN. Mr. Kelley, will you stand and be sworn, please, sir? You do solemnly swear that 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. KELLEY. I do, sir.

The CHAIRMAN. Before interrogating the witness, the Chair will read into the record an opening statement.

One of the last investigations conducted by the former Senate Select Committee on Improper Activities in the Labor or Management Field relates to charges of improper activities of officers of local 706. This investigation was continued by the staff of the Permanent Subcommittee on Investigations of the Senate Committee on Government Operations.

A hearing on this matter was held in executive session by the select committee on March 22, 1960. The select committee authorized me, as chairman, to make the proceedings and record of that hearing public at my discretion.

This subcommittee in May 1960 authorized further hearings into this matter and a copy of the testimony of the previous executive hearings held on March 22, 1960, was transmitted to each member of this subcommittee on June 1, 1960.

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To eliminate the need for rehearing this testimony, I suggest that the testimony taken before the select committee on March 22, 1960, be made a part of the record of the hearing now being held and that it be adopted by this subcommittee as a part of its record in this proceeding as though the testimony had been taken before this subcommittee.

In brief, the testimony previously taken and other information indicate that union officials of local 706 of the Plumbers & Steamfitters Union of El Dorado, Ark., misappropriated funds of the union. Evidence was presented showing that the parent organization conferred jurisdiction on local 706, El Dorado, Ark., over the Government arsenal job at Pine Bluff, Ark., because the wage scale of local 706 was higher than the other locals in the area and the business managers of local 155, Little Rock, Ark., and local 655, Pine Bluff, Ark., were so advised by the international.

The three locals-706, 155, and 655-entered into a joint venture agreement in writing whereby they agreed that each local was to participate equally in the revenue to be derived from the Pine Bluff arsenal job and further agreed that local 706 was to exercise complete control and jurisdiction over their employment program.

A joint venture account was opened between them in the National Bank of Commerce, El Dorado, Ark., and Earl Griffin was made the authorized signator on this account. It was agreed that periodic audits of the joint venture would be made and the funds, after expenses, should be divided equally between the three locals.

Shortly thereafter, the three locals were notified by their parent organization that such agreement was not approved and that no assessments were to be collected by local 706 from the men who were members of locals 155 and 655.

Despite protests from members of locals 155 and 655, the assessments of $3.50 weekly-in addition to their dues-continued to be levied and collected by Earl Griffin and local 706 agents between August 7, 1951, and late 1953. Instructions were given to foremen on the job that no receipts were to be given to members of local 155 or local 655 or to other union or nonunion permit men. Testimony shows that if any worker refused to pay this assessment or "doby" money, his employment was terminated.

The subcommittee staff investigators were told that most of the union's books and records relating to dues and collection of assessments were no longer in existence, although some canceled checks and bank statements were available.

Staff investigators and accountants checked payroll records held in the custody of the U.S. Army Audit Agency in Dallas, Tex., and New Orleans, La. A tabulation made from these records disclosed that the assessments at the rate of $3.50 per week per man amounted to $224,388.50. The staff accountants found that only $103,531.78 of these collections were deposited in the union's joint venture account at the National Bank of Commerce at El Dorado, Ark.

Explanation of the discrepancy was refused to the staff investigators by Earl Griffin and Ermon Griffin and Mr. Yocom, another official of the union, all of whom were responsible for collecting such assessments and who became accountable for such funds. They refused to discuss these matters with members of the subcommittee's staff of in

vestigators, stating that they would only talk about these matters before the subcommittee.

Thus, it clearly appears that approximately $120,856.72-divided among locals 706, 155, and 655-was closed and the sum of $103,531.78 was expended as follows:

Locals 155 and 655 received no moneys from the joint venture fund. Additional testimony was taken regarding improper and extravagant expenditures made by officials of this local. A staff accountant testified that examination of the records disclosed that in the three accounts of local 706 there were cash balances as follows:

As of July 1, 1952.

$91, 677. 21

Between July 1, 1952, and Dec. 30, 1958, the union collected

644, 167.56

The principal expenditures of these funds were made for the purchase and remodeling of a building and for the purchase of two airplanes.

On January 30, 1958, the union purchased from Mr. Kenneth Starnes an airplane for $9,754. This plane had been the private plane of Earl Griffin, which he traded in to Mr. Starnes on the purchase of another private plane.

It might be said, however, that the purchase of this plane had been approved at a membership meeting. Subsequently, on July 16, 1958, there was expended from the union account for the remodeling of the plane an additional $3,469.10. On July 11, 1958, a new plane was purchased from the union account for an additional cash outlay of $47,500 plus the trade-in value of the first plane.

In April 1959 additional equipment was installed in the plane to the tune of $7,482.87. Thus, the total expenditures for both planes between January 20, 1958, and April 1959 were $71,880.29.

Other questionable purchases are to be found in exhibit 15 which was introduced into evidence. This consisted of a list of purchases for Christmas gifts and hunting and fishing equipment and includes such items paid for in January 1958 as:

Other items listed included duck stamps, rifles, pump guns, fishing rods and reels, a 14-foot boat and outboard motors, hunting pants and coats, compote dishes, et cetera.

Although these expenditures were approved by the local's finance. committee, no breakdown was ever furnished to the members of the

union. There have been complaints by the members of the union of lack of availability of financial records of the union. The testimony presented showed that the officers of local 706 took reprisals against members of their union who complained or disagreed with these officials with respect to the way union affairs were being conducted and that the officials had a tendency to rule the union by threats and coercion.

There was evidence that some men were caused to lose their jobs or were denied the opportunity to work if they evinced disapproval of some of the activities of their union officials and the way union affairs were being conducted.

There was further testimony to show that an election of Earl Craddock of local 798 of Tulsa, Okla., was rigged through the efforts of Earl Griffin, Ermon Griffin, Red Yocom and other officials of local 706.

In November and December of 1955, at the instructions of officials of local 706, approximately 40 men of local 706 were told to clear their union books into local 798 so that they could vote for Craddock. At the election in December 1955, a busload of these 40 men was driven from the headquarters of local 706, El Dorado, Ark., to Baton Rouge, La., at union expense. They voted in the elections of 798 and returned the same day to their homes in Arkansas.

The subcommittee has called a number of witnesses to testify today as to these and other events which may show improper practices on the part of the officers of this local.

Since the officers of local 706 have refused to discuss the monetary affairs of the union with members of the staff of the subcommittee and have stated that they would only discuss these matters in a session before the subcommittee, we have called this executive session to accommodate them and hear their explanation of the charges of improper activities made against them by the members of their union. We will proceed with this witness.

TESTIMONY OF STEPHEN H. KELLEY

The CHAIRMAN. Mr. Kelley, state your name, your place of residence, and your present business or occupation.

Mr. KELLEY. Stephen H. Kelley. My address is 112 Church Street, El Dorado, Ark. I am employed by a local firm there in town in the building supply business. I would rather not give the name of the firm, if it is permissible to do that.

The CHAIRMAN. I don't know. There is no great secret about it. Everybody knows who you work for down there; do they not? Mr. KELLEY. Yes; everybody knows.

The CHAIRMAN. There would be no harm in giving it. They are not involved in it.

Mr. KELLEY. I mean, I don't know whether my boss would like that or not.

The CHAIRMAN. You can say whatever your occupation is and that you are now employed by a firm in El Dorado. I don't think they would object at all.

Mr. KELLEY. I work on the city sales for this firm in the building supply business.