Senator SYMINGTON. The understanding was that the money was going to end up with Mr. Tartaglia?

Mr. LEV. No. I would not know. For the lease.

Senator SYMINGTON. But Mr. Tartaglia was going to apply it against the cost of a lease, is that it?

Mr. LEV. That is correct.

Senator SYMINGTON. I see.

The CHAIRMAN. The point about it-on the face of it-here is a $4,000 paper that went through an attorney, but it actually went to your partner who was a Government employee, and whom you were organizing a business with. Therefore, the $4,000 went from you indirectly to your partner, but the check was made to your attorney. How can you explain why it went to your partner? And your partner gets credit for it as an investment in the business? That is the problem we are having.

You give a check for $4,000 to an attorney. The attorney, in turn, turns it over to your partner who puts it in the business, and that partner is a Government employee. Can you explain it ?

Mr. LEV. Mr. Chairman, I cannot explain this here at all.

The CHAIRMAN. You can't explain anything at all?

Mr. LEV. The reason why the understanding was, it was a deposit on the lease. I would say one thing about this here, that Mr. Klein has done a lot of work. That I know. I have met Mr. Klein twice or once. No, twice. Once.

The CHAIRMAN. Sir?

Mr. LEV. I met him once.

The CHAIRMAN. All right. You met him once.

Mr. LEV. What he has done with the $4,000 I would not know, whether it is attorney's fees, whether it is applied to Mr. Tartaglia's credit. I would not know.

The CHAIRMAN. The fact is, you would know this, that with Mr. Tartaglia every dollar he put into that business was cash and not by checks. He put it all in by cash, his $18,500. He put it all in in cash; isn't that right?

Mr. LEV. I would not know exactly. The only thing is I would know if you wanted to know exactly the facts

The CHAIRMAN. I do want to know exactly the facts if I can get them.

Mr. LEV. Mr. Weinberg is available. He could explain more intelligently than I can.

The CHAIRMN. You can't explain?

Mr. LEV. No, sir.

The CHAIRMAN. All right, proceed.

Senator BENDER. Mr. Chairman, for a man who has had such a fine code for his sons-in-law and didn't want his sons-in-law to participate in any way, but wanted them to come up the hard way

Mr. LEV. That is correct.

Senator BENDER. And you used very strict and very fixed codes as far as they were concerned. You seem to be rather loose with these Government employees. You can't answer definitely. You throw your money around and fish around, and other things around, with all these ordnance men and with this other bunch that provided the specifica

62915-55-49

tions. You have a convenient memory. You forget very readily. I can't quite figure that out for a man who has made a million.

You say yourself that, on business, you want to know yourself; you follow through yourself. All of a sudden you develop this looseness. Why?

Mr. LEV. Well, I will give you the answer. Any time when I am not involved myself personal, working myself and receiving after it, I always find out. I had lesson after lesson. It seems to me like I cannot make any money unless I work my own way and work the way I was working, working always hard. That is just exactly what it

amounts to.

As I mentioned before, and there is no use to repeat it over, the time keeps going, and I know all of you Senators would like to cut it short as you possibly can.

Senator BENDER. No; we don't want to cut it short. We want to hear the facts.

Mr. LEV. O. K. Good. I will have to repeat it over again as yesterday, and that is what you don't want. The reason why I want to have my sons-in-law come up the hard way; suppose I die, suppose something happens to me, they should be on their own and not to rely on pop all the time. I don't want them to go ahead and make a dollar easy. Let them work. They have a break as it is. They come into a business, an established business. It is not making any money. I am subsidizing it, the business, as far as the business is concerned. But at the same time I do not want them to go ahead and get an easy dollar. They cannot be like I am, a self-made man. I hate to praise myself, but at the same time I cannot go away from the truth, you see. I am a self-made made. But I want them to be at least the semi-self-made man.

Senator BENDER. Why not that same code with these military men? Mr. LEV. What is the military?

Senator BENDER. I say these Quartermaster men, and the men who are making the specifications and providing contracts. Weren't you concerned about them being brought up the same way and having to fight the same way as you fought?

Mr. LEV. Yes; but don't forget I have 1 son-in-law 25 years old, and 1 is 28 years old, and they are not in that age. However, that is the only reason why I have never let my son-in-law in on something that should make it easy. Let them work it hard the same as I did. They are not working as hard as I did.

Senator BENDER. You didn't use the same code as far as the Quartermaster men were concerned?

Mr. LEV. As far as the Quartermaster men are concerned, I say the same thing. All of the deviations, all of this here, boils down to nothing, to carfare, as far as I am concerned. But I have worked for the Research and Development, and I have saved the Government, at a minimum, of $15 million.

Senator BENDER. How much did you save for Harry Lev?

Mr. LEV. For Harry Lev? For Harry Lev how much I saved? I think I explained all of this to you. I worked plenty hard. But you can see right here $2.65 it was used to sell before, and now the lowest they bought is $2.95; and labor went up at least 4 times and material went up at least 6 times. You could multiply this in here and find out how much the Government would have paid.

Senator BENDER. I have heard that sermon five times, Mr. Chairman. After all, I guess that my question is out of order.

Senator SYMINGTON. Mr. Chairman, I would like to ask a question, if I may.

You had this business and you gave a check for $4,000 for a lease, is that correct?

Mr. LEV. That is correct.

Senator SYMINGTON. And you gave it to your lawyer who gave it to Mr. Tartaglia, is that right, for the lease?

Mr. LEV. The lawyer is supposed to make the lease.

Senator SYMINGTON. And therefore, the corporation had the asset of the lease as an asset, did it not? For example, you could have subleased it for cash if you had a lease on it. You paid $4,000 for the lease on it; is that right?

Mr. LEV. That was to go for the lease.

Senator SYMINGTON. How was the stock divided between you and Mr. Tartaglia in that company?

Mr. Lev. Mr. Weinberg has the records.

Senator SYMINGTON. Don't you even know what stock in the company you own?

Mr. LEV. I think he read off before that I have 45, and Tartaglia got 35, and my brother has 10, and Mr. Weinberg got 10. Let us add them together.

Senator SYMINGTON. Well, let us just take 45 percent. What he really then had is he had an asset of $1,800 in the lease, if the lease was owned 100 percent by the corporation, wouldn't he? Forty-five percent of $4,000 would be around $1,800.

Mr. LEV. That must be correct.

Senator SYMINGTON. So what did he do to get that $1,800 asset? Mr. LEV. No, Senator; how this has been handled, please believe me, I would not know in detail.

Senator SYMINGTON. But you do know that he owned 45 percent, roughly, of the company?

Mr. LEV. That I know.

Senator SYMINGTON. And that anything in the company that was an asset, he owned 45 percent of; is that right?

Mr. LEV. I want to add it up. I want to make sure that is the way it works. Yes, that is correct.

Senator SYMINGTON. How much cash did he put into the company, of his own?

Mr. LEV. Of his own?

Senator SYMINGTON. Of his own.

Mr. LEV. I believe he put in $17,500.

Senator SYMINGTON. $17,500?

Mr. LEV. I don't remember exactly how this is set up.

Senator SYMINGTON. Did you lend him any of that money?
Mr. LEV. No, sir.

Senator SYMINGTON. Did you give him any of that money?
Mr. LEV. No, sir; I did not give it to him.

Senator SYMINGTON. To the best of your knowledge, all of that money that he invested is his own?

Mr. LEV. His own. And the only way I could suggest is to have Mr. Weinberg give exactly how in details, in details for how much

was incorporated, and what is the stock issued, and how is it issued and so forth and so on.

Senator SYMINGTON. Do you know of any other assets that you put in the corporation in addition to the check for $4,000?

Mr. LEV. I made loans to the corporation.
Senator SYMINGTON. How much, roughly?

Mr. LEV. The records would indicate, because I
Senator SYMINGTON. What do you guess, roughly?
Mr. LEV. I can't remember exactly, Senator.
Senator SYMINGTON. Were those loans paid back?
Mr. LEV. The business is not operating.

Senator SYMINGTON. Were the loans paid back?

Mr. LEV. No, they can't be paid back because the business is definitely on a standstill, because the machinery, the engineers who engineered those machines, they are still working on it.

Senator SYMINGTON. Has the company gone into receivership or bankruptcy?

Mr. LEV. Not yet. They are still trying. Proctor & Schwartz is still trying to make the machine work.

Senator SYMINGTON. When you put up the money, the additional loans of the money, did you require an equivalent amount in percentage from the other stockholders or did you put it all up?

Mr. Lev. I am the one that put it up.

Senator SYMINGTON. Did you take a prior lien on it as a loan?
Mr. LEV. No, I didn't. I should have. I should have.

Senator SYMINGTON. If you didn't, automatically, every time you put up $1, so far as his interest in the corporation is concerned, you were giving him 45 cents, weren't you?

Mr. LEV. The way we set up the corporation, Senator, I did not know exactly. That is why I do not know exactly.

Senator SYMINGTON. But you know that you didn't get a prior lien for the fresh money that you put in on loan, don't you? Mr. LEV. No.

Senator SYMINGTON. You just said you didn't.

Mr. LEV. For the same reason, Spencer Manufacturing Co., I should have a lien on it.

Senator SYMINGTON. I am not talking about that. I am talking about the fact that this man owns 45 percent of the stock of the corporation. Everytime you put a dollar in the corporation, therefore, you gave him 45 cents of that dollar in equity, unless you took a prior lien for your money when you put it into the corporation; isn't that true?

(The following members were present at this point: The chairman, Senators Symington, Mundt, and Bender.)

Mr. LEV. But they are supposed to pay me back first.

Senator SYMINGTON. I asked you if you took out a prior lien as a result of your testimony, and you said "No." Do you want to correct that testimony?

Mr. LEV. That is why, Sentaor, I wish you would ask Mr. Weinberg about this here. He would give you more.

Senator SYMINGTON. In other words, you really don't know what you did with the money when you put it in this company, is that right? Mr. LEV. The only thing I do know is that the $4,000 was deposited on the lease. That is all I know.

Senator SYMINGTON. That is all.

Senator BENDER. How does he not happen to know what he did with the $4,000, but he knows what he did with 5 pounds of fish or 7 pounds of fish?

Mr. LEV. There is a record on it.

Senator BENDER. But you knew that certain fish went certain places but you don't know about the $4,000?

Mr. LEV. Senator Bender, I have mentioned before, the check was made out to Mr. Klein. He is an attorney. That was for the deposit of a lease. How this has been handled, I do not know.

Senator BENDER. Any more than you cannot explain about $50,000 of the cash transactions?

Mr. LEV. What kind of cash transactions?

Senator BENDER. Your own, in connection with your income.
Mr. LEV. On the income?

Senator BENDER. Yes.

Mr. LEV. As far as the income is concerned, it is purely an estimate, and as far as I know, I may overestimate, and I have also waived what you call the statute of limitations. You would know more in terms of the statute of limitations. They might throw it out altogether because of this here, because I don't keep records. I am supposed to keep records. But, unfortunate, I cannot keep the records. I was trying to promote the Citation also

Senator SYMINGTON. Let me ask you this question. You have now testified that you were in business with one Government employee, or with her husband. You also were in business with another Government employee who is in the Research and Development, where you put money into a corporation and they had stock in the corporation. Is there any other corporation that you have invested in with a Government employee in the last 5 years?

Mr. LEV. Yes, sir. Colonel Painter.

Senator SYMINGTON. What company was that?

Mr. LEV. Spencer Manufacturing Co. But he is not a Government employee.

Senator SYMINGTON. Is there any other company that you have invested money in with a Government employee?

Mr. LEV. No, sir.

Senator SYMINGTON. Isthere any other company that you have invested money in that you haven't mentioned in these hearings with a former employee with whom you did business?

Mr. LEV. No, sir.

Senator SYMINGTON. All right.

Mr. KENNEDY. Would you identify these letters, letters that have been taken from the files of the Mid City Uniform Cap Co. ?

(Documents handed to witness.)

(Witness conferred with his counsel.)

Mr. LEV. Well, it doesn't make any difference who they signedMr. KENNEDY. Mr. Chairman, could we have all four letters made exhibits?

Mr. LEV. Mr. Chairman, I usually buy one table for the Quartermaster Association, and then distribute them.

The CHAIRMAN. The four letters that have been identified, or copies of letters that have been identified, all dated June 4, 1953, one ad