TESTIMONY OF ROGER BAUM

The CHAIRMAN. Identify yourself for the record, please, sir. Mr. BAUM. My name is Roger Baum. I am vice president and general manager of a firm by the name of Hillenbaum, Tampa, Inc. The CHAIRMAN. Proceed, Mr. Counsel.

Mr. ADLERMAN. Are you a partner of Hillenbaum, Tampa, Inc? Mr. BAUM. Yes, sir: I am.

Mr. ADLERMAN. Did you handle the shipments of Higgins' products to Vietnam during the year 1966?

Mr. BAUM. I did, sir.

Mr. ADLERMAN. Had you ever dealt with Mr. Higgins before? Mr. BAUM. No, sir.

Mr. ADLERMAN. Had he ever been in the business of shipping any materials abroad, to your knowledge?

Mr. BAUM. No, sir; not to my knowledge at the time he approached me; no.

Mr. ADLERMAN. Did he show you the letters of credit that he had in the amount of $250,000?

Mr. BAUM. He showed me Xerox copies of them, sir.

Mr. ADLERMAN. Did you act as adviser to him on the AID regulations and proceed to ship the products to Vietnam?

Mr. BAUM. I did in a sense; yes, sir.

Mr. ADLERMAN. In other words, you were familiar with the AID program and with AID shipment?

Mr. BAUM. Yes, sir.

Mr. ADLERMAN. Did he exhibit any knowledge at all of this type of business?

Mr. BAUM. Not too much, but I did provide him a set of the regulations at the outset.

Mr. ADLERMAN. I have here a schedule entitled "Summary of Shipments Made by Thomas Edison Higgins Enterprises, Inc., Under U.S. AID program, May 1966 to December 1966." Did you draw this schedule up?

Mr. BAUM. Yes, sir; I did.

The CHAIRMAN. I present it to you. If you identify it, it will be made exhibit No. 7.

(The document was handed to the witness.)

Mr. BAUM. Yes, sir; this is the schedule I prepared.

The CHAIRMAN. It will be made exhibit 7.

(Document referred to marked "Exhibit No. 7" for reference and may be found in the files of this subcommittee.)

Mr. ADLERMAN. Mr. Baum, does this schedule constitute a recapitulation of 39 shipments made to Vietnam on which Mr. Higgins was paid a total of $356,903.64?

Mr. BAUM. Yes, sir.

Mr. ADLERMAN. I am referring to page 8 of your schedule. The amounts established-what do you mean by that?

Mr. BAUM. The established amount under your letter-of-credit form is simply the amount that could be claimed against the letter of credit as it stood at the time the documents were presented to the bank for collection.

Mr. ADLERMAN. They had all been presented?

Mr. BAUM. Yes.

Mr. ADLERMAN. In the full quantity?

Mr. BAUM. Yes, sir.

Mr. ADLERMAN. The amounts claimed for commodities total $374,478.30; is that correct?

Mr. BAUM. Yes.

Mr. ADLERMAN. And ocean freight came to $1,925.34?

Mr. BAUM. That is correct.

Mr. ADLERMAN. The total claim came to $376,403.64; is that correct? Mr. BAUM. That is correct.

Mr. ADLERMAN. How do you arrive at the total $356,903.64 as the amount paid?

Mr. BAUM. Because the payments on shipments Nos. 37 and 38, I believe, were not paid by the collecting bank in New York.

Mr. ADLERMAN. That was April 14, 1967?

Mr. BAUM. Yes.

Mr. ADLERMAN. Therefore, the actual payment to the shipper to date on all shipments is only $354,978 and he still has a claim on two other shipments?

Mr. BAUM. That is correct, sir.

The CHAIRMAN. Do you expect to collect those?

Mr. BAUM. I don't know if he expects them or not.

Mr. ADLERMAN. I also show you another schedule prepared by you, which is a summary of the shipments not shipped by Thomas Edison Higgins Enterprises under the AID program, and I ask if you can identify that as the schedule that you drew up?

The CHAIRMAN. Did you say "not shipped"?

Mr. ADLERMAN. That is correct.

The CHAIRMAN. Examine this document and tell us what it is. (The document was handed to the witness.)

Mr. BAUM. Yes, this is a schedule I prepared on shipments on which all pertinent documents, such as the letter of credit, import license, et cetera, required to make application, or, rather, required to make shipment and thereby obtain the necessary documents to apply against the letter of credit were available on, but the shipments were not forwarded to Vietnam.

They were, rather, still in the assembly stages or had been delivered to dockside pending approval of a waiver to AID, Washington, for shipment on the foreign-flag vessel which was never received. The shipments were then returned back to the shippers' warehouse where they are at present.

The CHAIRMAN. It may be made exhibit 8.

(Document referred to marked "Exhibit No. 8" for reference and may be found in the files of the subcommittee.)

Mr. ADLERMAN. Do you know whether or not the commissions were paid on the first 27 of the licenses?

Mr. BAUM. I do not know if the commissions were actually paid; no, sir.

Mr. ADLERMAN. Do you know whether or not any commissions were paid after the first 27 documents?

Mr. BAUM. No; I do not know, sir.

Mr. ADLERMAN. You don't know whether they were paid or not in any case; is that right?

Mr. BAUM. That is correct.

Mr. ADLERMAN. Did you prepare the schedule for the first 27 shipments, and did it provide for the payment of any commissions? Mr. BAUM. I prepared the schedule.

Mr. ADLERMAN. What does it show?

Mr. BAUM. The schedule on the first 27 shipments actually shows the amount of commission that was declared on the AID Forms 281. Mr. ADLERMAN. In other words, you prepared AID forms to be signed by Mr. Higgins; is that correct?

Mr. BAUM. Yes.

Mr. ADLERMAN. How much does it show was paid in commissions on those forms?

Mr. BAUM. Ten percent of the f.o.b. value on each form.

Mr. ADLERMAN. That was on the first 27 documents?

Mr. BAUM. That is correct.

Mr. ADLERMAN. On the subsequent documents, did you provide for any payment of any commissions at all?

Mr. BAUM. No, sir.

Mr. ADLERMAN. As far as you were concerned and as far as you knew, Mr. Higgins was only paying 10 percent commission. Is that what he told you to put down?

Mr. BAUM. That is the price he said he agreed to pay the named agent on the form, 10 percent.

Mr. ADLERMAN. And did you know whether he was paying that in dollars or in Vietnamese currency?

Mr. BAUM. No; I did not.

Mr. ADLERMAN. Did he instruct you one way or another?

Mr. BAUM. No, sir. All he asked me was to compile the list.

Mr. ADLERMAN. Did you have any conversations or did you send any cables or have any communications with the Cuoc firm?

Mr. BAUM. No, sir.

Mr. ADLERMAN. Did Higgins have any conversations with them, to your knowledge, about these commissions?

Mr. BAUM. I beg your pardon, sir?

Mr. ADLERMAN. In your discussion with Mr. Duffy, did you tell him that Higgins told you that the company in Vietnam did not want to be paid in piasters?

Mr. BAUM. He indicated that in the conversation; yes, sir.

Mr. ADLERMAN. Did Higgins indicate that it should be paid in dollars?

Mr. BAUM. Yes, sir; I believe so.

Mr. ADLERMAN. No further questions.

The CHAIRMAN. Thank you very much, sir.
Call the next witness.

Mr. ADLERMAN. Mr. Fish.

The CHAIRMAN. 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. FISH. I do.

TESTIMONY OF ROBERT FISH

The CHAIRMAN. Identify yourself by name, place of residence and business or occupation.

Mr. FISH. My name is Robert H. Fish. My residence is 6100 27th Avenue, North, St. Petersburg, Fla. At the time under question here, until a few weeks ago, I was vice president at the National Bank in St. Petersburg.

I am now associated with another bank in St. Petersburg.

The CHAIRMAN. Proceed, Mr. Counsel.

Mr. ADLERMAN. Mr. Fish, what is your title?

Mr. FISH. Prior to a week ago I was vice president at the National Bank of St. Petersburg.

Mr. ADLERMAN. And you changed your job?

Mr. FISH. I am now vice president of the Florida National Bank in St. Petersburg.

Mr. ADLERMAN. On April 3 and 4, did Mr. Higgins or Mr. Orthner come to your bank for the purpose of obtaining a loan to start production and packaging of Higgins battery additive?

Mr. FISH. Yes, sir.

The CHAIRMAN. That was in 1966?

Mr. ADLERMAN. 1966.

Mr. FISH. Yes; they did.

Mr. ADLERMAN. Did Mr. Higgins show you some 26 or 27 irrevocable letters of credit?

Mr. FISH. It was my impression that the figure was 24 letters of credit.

Mr. ADLERMAN. And did they total a quarter of a million dollars? Mr. FISH. Approximately; yes, sir.

Mr. ADLERMAN. Were they issued by Vietnamese banks against the delivery of battery additive to Vietnam?

Mr. FISH. Yes; they were.

Mr. ADLERMAN. Do you know whether or not Mr. Higgins had been turned down by other banks because of his poor credit standing? Mr. FISH. I was told that he and Mr. Orthner had been turned down by the Bank of Seminole.

Mr. ADLERMAN. Therefore, you made the loan to Mr. Orthner's firm, the Key Laboratory; is that right?

Mr. FISH. Yes, sir.

Mr. ADLERMAN. Did you take the letters of credit as collateral for the loan?

Mr. FISH. Yes, sir.

Mr. ADLERMAN. How much was the loan that you gave to the Key Laboratory?

Mr. FISH. The total advance reached $7,900.

Mr. ADLERMAN. That was first $2,500, then $2,500, and so on?
Mr. FISH. That is right.

Mr. ADLERMAN. Was it arranged that as the letters of credit cleared the bank, 10 percent of each of these letters of credit would be used to pay off the Key Laboratory loan?

Mr. FISH. Yes, it was.

Mr. ADLERMAN. Did you receive oral instructions on how to handle the proceeds of the first 24 letters of credit?

Mr. FISH. Yes, I did.

Mr. ADLERMAN. What were the instructions that you received?

Mr. FISH. Prior to disbursement of the loan, we arranged about the repayment of the loan to Key Laboratory. After the money had been transmitted back from Tampa, the proceeds of the letters of credit, Mr. Higgins instructed our bank to issue cashiers checks in various amounts and he sent this away. The rest was deposited in his checking account.

Mr. ADLERMAN. How much did you issue in cashiers checks under the instructions of Mr. Higgins?

Mr. FISH. I think the total came to approximately $140,000. The CHAIRMAN. According to the form I have $139,268. Is that about right?

Mr. FISH. From these specific letters of credit, yes, sir. There was another later cashiers check.

The CHAIRMAN. I hand you a letter dated June 7, 1966, apparently from you to Mr. Thomas Edison Higgins together with a statement, apparently, of the same date. It appears to be on the stationary of the National Bank of St. Petersburg. I ask you to examine these and see if you identify them.

(The documents were handed to the witness.)

Mr. FISH. Yes, sir; these are the letters that I wrote.

The CHAIRMAN. They may be printed in the record at this point. (The letters referred to follow :)

Mr. THOMAS EDISON HIGGINS,

THE NATIONAL BANK OF ST. PETERSBURG,

St. Petersburg, Fla., June 7, 1966.

President, Thomas Edison Higgins Enterprises, Inc.,
Tampa, Fla.

Dear Mr. HIGGINS: We have mailed a check to the Swiss Credit Bank for $21,638 (copy of check is enclosed). The balance of the Letter of Credit proceeds, $12,223.78, was credited to your business account today, and the duplicate deposit slip is enclosed. Also enclosed are copies of the last two letters from the First National Bank of Tampa remitting the proceeds of the Letters of Credit.

This completes the deposit of funds of the 24 Letters of Credit which you left with us. In order that you may have a breakdown of the total receipts and disbursements, we are sending you a report which covers this information. If you have any questions, please feel free to bring them up.

May I say again that it has been a pleasure to work with you on this venture, and I hope that there will be other ventures where The National Bank of St. Petersburg can be of assistance in the future.

Sincerely,

ROBERT H. FISH, Vice President.