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INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD

HEARINGS

BEFORE THE

SELECT COMMITTEE

ON IMPfiOPEE ACTIVITIES IN THE

LABOR OR MANAGEMENT FIELD

EIGHTY-FIFTH CONGKESS

FIRST SESSION PURSUANT TO SENATE RESOLUTION 74, 85TH CONGRESS

JULY 17, 18, 19, 22, 23, 25, AND 26, 1957

PART 9

Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field

INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD

HEARINGS ,

BEFORE THE .

SELECT COMMITTEE

ON IMPROPER ACTIVITIES IN THE

LABOR OR MANAGEMENT FIELD

EIGHTY-FIFTH CONGRESS

FIRST SESSION PURSUANT TO SENATE RESOLUTION 74, 85TH CONGRESS

JULY 17, 18, 19, 22, 23, 25, AND 26, 1957

PART 9

Printed for the use of the Select Committee on Improper Activities in the Labor or Management Field

UNITED STATES GOVERNMENT PRINTING OFFICE 89330 WASHINGTON : 1957

/'^-

prs.

^ - )^

Boston Public Library SuperintoTT^nnt of Documents

SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD

JOHN L. McCLELLAN, Arkansas, Chairman IRVING M. IVES, New York, Vice Chairman JOHN F. KENNEDY, Massachusetts KARL E. MUNDT, South Dakota

SAM J. ERVIN, JE., North Carolina BARRY GOLDWATER, Arizona

PAT McNAMARA, Michigan CARL T. CURTIS, Nebraska

KOBEET F. Kennedy, Chief Counsel Ruth Yoonq Watt, Chief Clerk

n

.''jTfJvon

CONTENTS

United Textile Workers of America

Page

Appendix 3511

Testimony of —

Altimont, Alfred A 3223

Calabrese, Alphonse F 3229, 3259, 3309, 3316, 3449, 3479

Callaghan, Aileen 3226

Cunningham, Mark L 3318

Emerson, Charles 3419

Fisher, John W 3468

Henig, Morton E 3275, 3373, 3479

Jacobs, Joseph 3366, 3376, 3399

Jansson, Eric G 3317

Klenert, Lloyd 3267, 3275, 3287, 3311, 3462, 3472, 3503

Krause, Frank A., Jr 3312

Lynham, Richard L 3498

Meanv, George 3347

Mills, "^ Ralph W 3470

Quigley, Martin J 3231, 3339

Valente, Anthony F 3429, 3450

Yudelevit, Louis 3468

EXHIBITS

Introduced Appears on page on page

1. BeitzeU Realtor Sales contract dated April 4, 1952,

Washington. D. C, referring to property at 3507 Saul Road and 9801 Alfred Ray Road, Rock Creek Hill, Montgomery County, Md., in which acknowledgment is made of receipt of $2,000; purchaser Evelyn M. Nolan and sellers Alfred A. Altimont and Albert J. Altimont 3224 3511-

2. Check of Mutual Title Co., dated May 6, 1952, payable to 3512

Albert J. and Alfred A. Altimont m the amount of

$51,515.46 3225 3513

3. Deposit slip from Security Bank, Washington, D. C,

showing 2 $1,000 checks deposited to J. Garrett Beitzell,

special account, dated April 7, 1952 3228 3514

4. Check dated April 4, 1952, payable to Beitzell in the

amount of $1,000 and signed by Anthony Valente 3228 3515

5. Deposit slip from Security Bank, Washington, D. C,

showing $3,050.90 deposited to J. Garrett Beitzell, May

6, 1952 3229 3516

6. Check from Mutual Title Co. dated May 6, 1952, payable

to J. Garrett Beitzell in the amount of $3,000 (Kfenert

and Valente) 3229 3517

7. Deposit slip of Washington Loan & Trust Co., Washington,

D. C, dated May 2, 1952, to the account of Mutual Title Co., trustee account, in the amount of $120,606.51, on which is shown deposit of $95,000, United Textile Workers of America 3235 3518—

8. Sellers statement on Mutual Title Co. letterhead, settle- 3519

ment of the sale by Altimont to Klenert and Valente,

dated May 5, 1952 ___ 3237 3520

9. Purchase statement of Lloyd Klenert on Mutual Title Co.

letterhead, dated May 5, 1952, showing purchase of lot 1, block 18, Rock Creek Hills, in the amount of $52,500-- 3237 3521

in

IV CONTENTS

Introduced Appears on page on page

10. Purchase statement of Anthony Valente on Mutual Title

Co. letterhead, dated INIay 5, 1952, showing purchase of parcel A, block 18, Rock Creek Hills, in the amount of $42,500 3237 3522

11. Five check stubs which relate to Klenert and Valent

transaction, Nos. 6957, 6058, 6059, 6060, and 6061 3239 3523-

12. Letter dated IVIay 14, 1952, addressed to Martin Quigley, 3524

Mutual Title Co., from Llo5'd Klenert, international Secretary-treasurer 3243 (**)

13. Letter dated May 15, 1952, from Mutual Title Co. to Mr.

Lloyd Klenert, secretary-treasurer. Textile Workers of

America 1 3246 (*)

14. Check No. 6229, dated May 15, 1952, from Mutual Title

Co., payable to United Textile Workers of America in the

amount of $95,000 (Klenert and Valente) 3246 3525

15. Letter dated May 15, 1952, addressed to United Textile

Workers of America, re lot 1, block 18, and parcel Rock Creek Hills, and signed by Martin J. Quiglev, president, Mutual Title Co ' 3251 (**)

16A. New York Bank draft No. 51119, dated INIay 15, 1952, pur- chased from Liberty National Bank, payable to Lloyd Klenert in the amount of $7,000 3254 3526

16B. New York Bank draft No. 51120, dated May 15, 1952, pur- chased from Liberty National Bank, payable to Lloyd Klenert, in the amount of $7,000. . _ ^ . . /. 3254 3527

16C. New York Bank draft No. 51117, dated May 15, 1952, pur- chased from Liberty National Bank, pa5-abie to Lloyd Klener in the amount of $8,000 3254 3528

16D. New York Bank draft No. 51118 dated May 15, 1952, pur- chased from Liberty National Bank, payable to Lloyd Klenert in the amount of $5,000 ' 3254 3529

17A. Cashiers check on the City Bank dated May 14, 1952,

payable to Anthony Valente in the amount of $10,000.. 3255 3530

17B. Cashiers check on the City Bank dated May 14, 1952, pay- able to Anthony Valente in the amount of $7,000 3255 3531

17C. Cashiers check on the City Bank dated May 14, 1952, pay- able to Anthony Valente in the amount of $13,000 3255 3532

18. Second Deed of Trust for $15,000 on Klenert property

dated May 15, 1952, executed by Lloj^d Klenert and wife

Eleanor Klenert in favor of Laida A. Kreuz 3256 (*)

19. Note dated May 15, 1952, in the amount of $10,000 on

Valente property 3256 3533-

20. Abstract of minutes of the meeting of the Executive 3535

Council, United Textile Workers of America, Sherry

Frontenac Hotel, Miami Beach, Fla., April 25, 1952... 3260 3536

21. United Textile Workers of America loan application for

$100,000 dated May 8, 1952, from Liberty National

Bank 3262 3537

22. Certification by the president of the union, Anthony

Valente, stating he had authority to make the loan from

Liberty National Bank 3262 3538

23. Application card, deposit slip, and ledger card of the

Liberty National Bank, account in the name of United Textile Workers of America showing deposit of $100,000 and withdrawals 3266 3539-

24. Supplement to audit report of United Textile workers of 3540

America for 3 months ending June 1952 as submitted by

Eric G. Jansson, C. P. A 3266 3541

24A. Letter from Eric G. Jansson to Lloyd Klenert dated Sep- tember 8, 1952, transmitting 4 copies of supplemental ( data to audit report 3338 3542

24B. Letter from Eric G. Jansson to International Executive Board, United Textile Workers, dated September 8, 1952, with explanatory comments re supplement 3338 3543

25. Minutes of a meeting of the Executive Council, United

Textile Workers of America, Blue Room, Hotel Hamil- ton, Washington, D. C, April 25 and 26, 1956 3275 (*)

CONTENTS -f

Introduced Appears on page on page

26A. Cashier's check No. 57384 on the City Bank dated June 16, 1952, payable to Lloyd Klenert in the amount of $1,000 3309 3544

26B. Cashier's check No. 57385 on the Citv Bank dated June 16,

1962, payable to L.loyd Klenert in the amount of $1,000_ 3309 3545

26C. Cashier's check No. 57386 on the City Bank dated June 16, 1952, payable to Lloyd Klenert in the amount of $1,000 3309 3546

27A. Cashier's check No. 57382 on the Citv Bank dated June 16,

1952, payable to Lloj^d Klenert in the amount of $1,000_ 3309 3547

27B. Cashier's check Xo. 57383 on the City Bank dated June 16,

1952, payable to Lloyd Klenert in the amount of $1,000. 3309 3548

28. Sales shp from Campbell 'Music Co., Inc., Washington,

dated June 18, 1952, indicating Magnavox TV set sold to

Lloyd Klenert at a net cost of $685.40 3311 3549

29. Sales slip from Campbell Music Co., Inc., Washington

D. C, dated June 18, 1952, indicating Steinwav grand

piano sold to Lloyd Klenert at a net cost of $2,786.50. _ . 3311 3550

30. Original contract ^s"o. 5605 with Washington Gas Light

Company of Maryland to install air-conditioning at 3507 Saul Road, Rock Creek Hills and signed by Anthony Valente ■_ 3314 (*)

31. Replacement contract No. 5607 with Washington Gas

Light Company of Maryland to install air-conditioning at 3507 Saul Road, Rock Creek Hills, signed by Anthony Valente 3314 3551-

32. Replacement contract No. 5609 with Washington Gas 3552

Light Company of Maryland to install air-conditioning at 9801 Alfred Ray Road, Rock Creek Hills, and signed by Lloyd Klenert-' 3315 3553-

33. Audit report of United Textile Workers of America, Apr. 1, 3554

1952, to June 30, 1952, made by Eric G. Jansson, C. P. A. 3322 (*)

34. Eric G. Jansson memorandum of call from the office of the

United Textile Workers of America requesting conference

with Mr. Valente and Mr. Klenert 3323 3555

35. Eric G. Jansson subsequent memorandum of call from

Lloyd Klenert and Anthonj^ Valente for another con- ference 3323 3556

36. Affidavit, dated July 1952, prepared by Eric Jansson for

the signature of the President of the UTWA and the secretary-treasurer of the UTWA 3324 (*)

37. Receipt for original affidavit picked up by employee of

United Textile Workers of America, from office of Eric

G. Jansson on Aug. 29, 1952 3324 3557

38. Amended audit report of United Textile Workers of Amer-

ica, Apr. 1, 1952, to June 30, 1952, submitted bv Eric G.

Jansson, C. P. A "_ 3328 (*)

39. Comments from Eric G. Jansson, dated Aug. 28, 1952,

that accompanied the amended report 3329 3558-

40. Audit report of United Textile Workers of America, dated 3559

Aug. 28, 1952, for the period Apr. 1, 1952, to June 30,

1952, submitted by Eric C. Jansson, C. P. A 3336 (*)

41. Letter dated Aug. 25, 1952, to Martin Quigley, Mutual

Title Co., from Llovd Klenert, secretary-treasurer,

United Textile Workers of America 3339 (**)

42. Letter dated Aug. 26, 1952, to Lloyd Klenert, secretary-

treasurer, United Textile Workers of America, from

Martin J. Quigley, Mutual Title Co 3339 (**)

43. Check No. 6956 dated Aug. 26, 1952, payable to United

Textile Workers of America from Mutual Title Co. in

the amount of $57,000 3340 3560

44. Check dated Aug. 27, 1952, payable to Martin J.

Quigley, in the amount of $666.67, signed by John

Fisher 3343 3561

45. Deposit slip from the Washington Loan & Trust Co., to

account of Mutual Title Co., trustee account, dated

Aug. 26, 1952, showing deposits of $60,100 3345 3562

VI

CONTENTS

Introduced Appears on page on page

46A. United Textile Workers of America balance sheet, dated Mar. 1952, submitted to George Meany, secretary- treasurer of AFL 3349 (*)

46B. United Textile Workers of America balance sheet, dated Apr. 1952, submitted to George Meany, secretary- treasurer of AFL __ 3349 (*)

460. United Textile Workers of America balance sheet, dated May 1952, submitted to George Meany, secretary- treasurer of AFL 3349 (*)

46D. United Textile Workers of America balance sheet dated June 1952, submitted to George Meany, secretary- treasurer of AFL 3349 (*)

46E. United Textile Workers of America balance sheet, dated Julv 1952, submitted to George Meany, secretary- treasurer of AFL 3349 (*)

47. Letter dated January 28, 1953, to Mr. George Meany,

president, American Federation of Labor with attached United Textile Workers of America subcommittee report on investigation of Klenert and Valente 3353 3563-

48. Letter dated February 19, 1953, addressed to Mr. Anthony 3568

Valente, president. United Textile Workers of America, signed bj' George Meany, president, American Federa- tion of Labor 3353 3569—

49. Contract "automobile lease," dated July 1, 1955, signed by 3570

Joseph Jacobs as Lessor, Auto Leasing Co., and Lloyd

Klenert, lessee, L^nited Textile Workers of America 3370 (*)

50A. Letter from O. W. Biggs, National Truck Rental Co., dated i - June 18, 1957, to Mr. Robert Kennedy re car rentals___ 3376 3571

50B. Letter from Hubert Ryan, the Hertz Corp., dated June 19,

t 1957 to Mr. Robert Kennedy re car rentals 3376 3572

50C. Letter from Charles Hutman, Capito Driv-Ur-Self System, dated June 17, 1957, to Mr. Robert Kennedy re car rentals 3376 3573

51 A. Letter dated January 2, 1957, addressed to Auto Leasing Co., from Lloyd Klenert, enclosing check No. 58992 in the amount of $300 3386 3574-

51B. Letter dated January 21, 1957, addressed to Lloyd Klenert, 3575

secretary-treasurer. United Textile Workers of America, from Auto Leasing Co., and check No. 59231, payable to Auto Leading Co., in the amount of $200, signed by by Lloyd Klenert 3386 357&-

51C. Letter dated January 28, 1957, addressed to Lloyd Klenert, 3577

secretary-treasurer. United Textile Workers of America, from Auto Leasing Co., and check No. 8, payable to Auto Leasing Co., signed by Lloyd Klenert 3386 3578-

51D. Letter dated February 26, 1957, addressed to Lloyd 3579

Klenert, secretary-treasurer. United Textile Workers of America, from Auto Leasing Co., and check No. 353 in the amount of $1,022, payable at Auto Leasing Co., and signed by Lloyd Klenert 3386 3580-

52A. Expense voucher and check No. 55434, dated February 17, 3581

1956, payable to Joseph Jacobs and signed by Lloyd Klenert, secretary-treasurer, United Textile Workers of of America, in the amount of $217.43 (expenses, Melrose Hosiery, High Point, N. C.) 3397 3582-

52B. Expense voucher and check No. 55435, dated February 17, 3583 1956, payable to Joseph Jacobs and signed by Lloyd Klenert, secretary-treasurer. United Textile Workers of America, in the amount of $637.29 (expenses, Enka Low- lands) 3397 3584-

52C. Expense voucher and check No. 55436, dated February 17, 3585

1956, payable to Joseph Jacobs and signed by Lloyd Klenert, secretary-treasurer, United Textile Workers of America, in the amount of $487.18 (expenses. United

Piece, Charleston, S. C.) 3397 3586-

3587

CONTENTS Vn

Introduced Appears on page on page

52D. Expense voucher and check No. 55437, dated November 17, 1956, payable to Joseph Jacobs and signed by Lloyd Klenert, secretary-treasurer, United Textile Workers of America, in the amount of $159.82 (expenses, Carolina

Narrow Fabrics, Winston-Salem, S. C.) 3397 3588-

63. Check No. 5213, dated August 29, 1952, payable to Leshe 3589

Shomo in the amount of $5,000 from National Publish- ing Co. and endorsed credit account of Lloyd Klenert. _ 3464 3590

54. Seven deposit slips showing Lloyd Klenert deposited with

Manufactures Trust Co. $30,150 between September 10,

1952, and January 16, 1953 3477 (*)

55. Canceled checks of the United Textile Workers of America

payable to Acme Theatre Ticket Service in the amount of $9,355.60 and list of shows for which tickets were purchased for Lloyd Klenert 3489 (*)

56. Canceled checks of the United Textile Workers of America

payable to Puchter Theatre Ticket Service in the amount

of $2,030.35, for Lloyd Klenert 3489 (*)

57. Hotel Hamilton, Washington, D. C, bills and canceled

checks of the United Textile Workers of America in

the amount of $19,431.41, for Lloyd Klenert 3494 (*)

58. Bills from Camalier and Buckley, Chevy Chase, Md., for

various articles in the amount of $2,003 paid by United Textile Workers of America through Diners' Club credit card for Lloyd Klenert 3495 (*)

59. Bills paid by United Textile Workers of American through

the use of Trip-Charge, Inc., credit card and canceled

checks in the amount of $1,776 for Lloyd Klenert 3497 (*)

Proceedings of —

July 17, 1957 _ 3221

July 18, 1957 3259

July 19, 1957 3287

July 22, 1957 3347

July 23, 1957 3399

July 25, 1957 3429

July 26, 1957 3479

*May be found in the files of the select committee. •*May be found in the printed record.

INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD

WEDNESDAY, JULY 17, 1957

United States Senate, Select Committee on Improper Activities

IN THE Labor or Management Field,

Washington^ D. G.

The select committee met at 2 : 30 p. m., pursuant to Senate Reso- lution 74, agreed to January 30, 1957, in the caucus room, Senate Office Building, Senator John L. McClellan (chairman of the select commit- tee) presiding.

Present: Senator John L, McClellan, Democrat, Arkansas; Senator John F. Kennedy, Democrat, Massachusetts; Senator Barry Gold- water, Republican, Arizona; Senator Karl E. Mundt, Republican, South Dakota ; Senator Carl T. Curtis, Republican, Nebraska.

Also present: Robert F. Kennedy, chief counsel to the select com- mittee; Ralph Mills, assistant counsel; Morton E. Henig, investiga- tor; Alphonse F. Calabrese, investigator; Ruth Young Watt, chief clerk.

(Members present at the convening of the session: Senators Mc- Clellan and Golclwater.)

The Chairman. The committee will come to order.

The Chair will make a preliminary statement as we begin the hear- ings in a new phase and in a new area, and related to new or different unions in the inquiry that this committee is conducting.

I would suggest to members of the press if you have a copy of this printed statement the Chair is about to make that you follow the read- ing of it closely. There have been some minor changes in the copy that you have.

This committee, under Resolution 74 of the 85th Congress, has been directed to conduct an investigation of the extent to which improper practices exist in the field of labor-management relations and to de- termine whether any changes are required in the laws to protect the in- terests of labor, of management, or of the public in this area.

The committee, in hearings beginning today, intends to look into al- legations that Anthony Valente and Lloyd Klenert, president and sec- retary-treasurer, respectively, of the United Textile Workers of Amer- ica, misappropriated union funds to purchase private homes. It has been represented to the committee that Mr. Klenert and Mr. Valente took steps to return this money only after their misuse of these union funds had been discovered by George Meany, then secretary -treasurer of the AFL. To make these repayments, there may be evidence that Mr. Klenert and Mr. Valente approached officers of companies that have contracts with their union.

3221

3222 IMPROPER ACTIVITIES IN THE LABOR FIELD

The committee will also inquire into whether Mr. Klenert with union fimds in excess of $40,000 made large numbers of personal purchases for himself, liis family and his friends.

If these facts are true, it is, of course, of much concern to this com- mittee. But what causes even greater concern is the evident lack of any check or balance on the activities of these officials by the failure of the executive board to meet its responsibilities. The executive board members and the trustees, if they become aware of the misuse of union funds and take no action, are violating their responsibilities to and the trust reposed in them by the membership. We will seek, in this series of committee hearings, to determine what legislation is necessary to insure that the rank and file members of the union may exercise proper control over their affairs and compel a fair and proper account- ing for their union dues.

Is there anything further ?

Senator Goldwater. Mr. Chairman ?

The Chairman. Senator Goldwater.

Senator Goldwater. I would like to ask the counsel relative to this portion of your statement, and I read from it.

It was represented that Mr. Klenert and Mr. Valente took steps to return this money only after their misuse of these union funds had been discovered by George Meany, then secretary-treasurer of the AFL.

Could the chief counsel tell me approximately when Mr. Meany made this discovery ?

Mr. ICennedy. Approximately in August of 1952, Senator, some- time during that period of time starting from May of 1952 through the end of the year, or October 1952.

Senator Goldwater. Do you know, Mr. Kennedy, if Mr. Meany took any steps to see that these funds were replaced ?

Mr. Kennedy. He took some steps in connection with this.

Senator Goldwater. Are Mr. Valente and Mr. Klenert still the officers that are represented here, president and secretary-treasurer of the United Textile Workers?

Mr. Kennedy. Yes, they are.

Senator Goldwater. Do you know if Mr. Meany, in view of the fact that in February, I believe, of this year, the code of ethical prac- tices was put into being by the AFL-CIO, has taken any steps to re- move these men from their offices in this union ?

Mr. Ejennedy. It is expected that Mr. Meany will testify at this hearing. Senator, and I expect that he can answer any questions better than I could.

Senator Goldwater. But you know of no steps having been taken to apply the code of ethics ?

Mr. KJENNEDY. I do not.

Senator Goldwater. Mr. Chairman, the reason I ask that is that I have not heard of it either, and because the code of ethical practices was so widely and well received when it came out, I am a little bit surprised to learn that no steps had been taken to apply this code in this case.

I might say in connection with this that there have been 10 of vari- ous degrees of importance of the UAW who have taken either the fifth amendment or the first amendment, and to my knowledge only 2 of these have been removed from office or removed from their position

IMPROPER ACTIVITIES IN THE LABOR FIELD 3223

of responsibility with tliis union. So I will look forward to the chance to inquire of Mr. Meany whether this code of ethics means anything or whether it is merely a smokescreen.

The Chairman, The Chair may state for Senator Goldwater, and for the information of others, that Mr. Meany has been requested to appear next Monday to testify before this committee. We hope to have the facts developed at that time.

Is there anything further?

If not, call the first witness.

(Members present at this point: Senators McClellan and Gold- water.)

The Chairman. Will you be sworn?

You do solemnly swear that the evidence you shall give before this Senate select committee shall be the tiiith, the whole truth, and nothing but the truth, so help you God?

Mr. Altimont. I do.

TESTIMONY OF ALFRED A. AITIMONT

The Chairsian. Please state your name, your place of residence, and your business or occupation.

(At this point, Senator Mundt entered the hearing room.)

Mr. AiTiMONT. Alfred A. Altimont, 6904 Strathmore Street. I am a contractor.

The Chairman. What kind of contracting business are you in ?

Mr. Altimont. General contracting.

The Chairman. General contracting?

Mr. Altimont. Yes, sir.

The Chairman. How long have you been in that business?

Mr. Altimont. About 7 years.

The Chairman. Are you familiar with the rules of the committee which permit you to have counsel present if you desire while you testify?

Mr. Altimont. Yes.

The Chairman. Do you waive counsel?

Mr. Altimont. Yes.

The Chairman. All right, Mr. Kennedy, you may proceed.

Mr. Kennedy. Mr. Altimont, you and your brother have been build- ing homes since approximately 1950, is that right?

Mr. Altimont. Correct.

Mr. Kennedy. Did you build certain homes that were ultimately sold to Mr. Anthon}^ Valente and Mr. Lloyd Klenert ?

Mr. Altimont. Correct.

Mr. Kennedy. That was in April of 1952?

Mr. Altimont. Yes.

Mr. Kennedy. Did you sell those homes outright to Mr. Valente and Mr. Klenert?

Mr. Altimont. No. It was through the Beitzell real estate agency.

Mr. Kennedy. Through Beitzell l

Mr. Altimont. Yes.

Mr. Kennedy. Who was listed as the buyer of those homes ?

Mr. Altimont. Well, actually, when you deal with real estate people like that, the buyers and the sellers usually don't get together. We dealt with Nolan Parker, an agent of Beitzell.

3224 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Kennedy. You dealt with -whom?

Mr. Altimont. Nolan Parker.

Mr. Kennedy. Parker Nolan, do you mean ?

Mr. Altimont. Parker Nolan.

Mr. Kennedy. Parker Nolan?

Mr. Altimont. Yes.

Mr. Kennedy. So you sold those homes through Parker Nolan, is that right?

Mr. Altimont. Well, through him. As I say, usually a real estate agent will not let the buyer's name be known to the builder.

Mr. Kennedy. You did not know the buyer's name in this case ?

Mr. Altimont. No.

Mr. Ejennedy. Mr. Chairman, could Mr. Altimont identify that document ?

The Chairjvian. The Chair presents to you what purports to be a photostatic copy of a contract dated here in Washington, D. C, on April 4, 1952, referring to certain property at 3507 feaul Koad and 9801 Alfred Ray Road, Rock Creek Hills, Montgomery County, Md., in which acknowledgement is made of receipt of some $2,000 from Evelyn M. Noland. Will you examine it and see if you identify it as a photostatic copy ?

(Document handed to witness)

Mr. Altimont. That is it, yes.

The Chairman. What is that ?

Mr. Altimont. That is a sales contract.

The Chairman. I beg your pardon ?

Mr. Altimont. A sales contract.

The Chairman. A sales contract for that property ?

Mr. Altimont. Yes, sir.

The Chairman. Who signed the sales contract ?

Mr. Altimont. Evelyn M. Nolan as purchaser and Alfred A. Alti- mont and Albert J. Altimont as sellers.

The Chairman. That is you and your brother ?

Mr. Altimont. Correct.

The Chairman. That may be made exhibit 1, for reference.

(The document referred to was marked '"Exhibit 1" for reference and will be found in the appendix on pp. 3511-3512.)

Mr. Kennedy. There was a deposit made of $2,000, is that right?

Mr. Altimont. Correct.

Mr. Kennedy. And the property was identified as 3507 Saul Road and 9801 Alfred Ray Road, Rock Creek Hills, Montgomery County, Md., is that right?

Mr. Altimont. Yes.

Mr. Kennedy. They were two separate homes ?

Mr. Altimont. Correct.

Mr. Kennedy. The total purchase price was how much ?

Mr. Altimont. Ninety-five.

Mr. Kennedy. $95,000, is thai right, for the 2 homes?

Mr. Altimont. Yes.

Mr. Kennedy. The purchaser agreed to pay $57,000, is that right ?

(At this point, Senator Curtis entered the hearing room.)

Mr, Altimont. There was a construction loan on the two houses. I think we used up the sum of $38,000 on the two combined.

IMPROPER ACTIVITIES m THE LABOR FIELD 3225

Mr. Kennedy. There were two trusts on the homes, is that right?

Mr. Alttmont. Correct.

Mr. Kennedy. One amounting to $18,000 and the other amounting to $20,000?

Mr. Aetimont. Correct.

Mr. Kennedy. So adding those two together, the difference was $57,000, is that right ?

Mr. Altimont. Correct.

Mr. Kennedy. The settlement charges. So the purchasers agreed to pay — this is of some importance to us and I want to be sure — the purchasers agreed to pay $57,000 and assume or pay off the two mort- gages of $18,000 and $20,000, is that right ?

Mr. Altimont. Correct.

Mr. Kennedy. And the seller agreed to pay to J. Garrett Beitzell, agent, a commission of $5,000 ?

Mr. Altimont. Correct.

Mr. Kennedy. You received subsequent to that a check for the sale of those homes, is that right ?

Mr. Altimont. Correct.

The Chairman. The Chair hands you what purports to be a photo- static copy of a check dated May 6, 1 believe, 1952, apparently payable to you and your brother in the amount of $51,515.46, signed or given by Mutual Title Co., trustee account, signed by the vice president and treasurer of that company.

Will you examine it and state if you identify it as a photostatic copy of the check you and your brother received on this transaction?

(Document handed to witness.)

Mr. Altimont. That is correct.

The Chairman. That is correct?

Mr. Altimont. Yes.

The Chairman. That may be made exhibit No. 2.

(The document referred to was marked "Exhibit No. 2'' for refer- ence and will be found in the appendix on p. 3513.)

The Chairman. It may be copied in the record.

Mr. Kennedy. Who was the Mutual Title Co ?

Mr. Altimont. It was a title company. It was the first time I dealt with them.

Mr. Kennedy. I don't want you to identify them, but what was their connection with this transaction ?

Mr. Altimont. They make settlement.

Mr. Kennedy. They make the settlements ?

Mr. Altimont. Yes.

Mr. Kennedy. You received the settlement from them ?

Mr. Altimont. From them.

Mr. Kennedy. It was their check for $51,515.46 that you received from them ?

Mr. Altimont. Yes; that is right.

Mr. Kennedy. And that is all that you had to do with this trans- action ?

Mr. Ai.timont. That is correct.

Mr. Kennedy. Thank you.

The Chairman. Are there any other questions ?

If there are no further questions, thank you very much.

Senator Mundt ?

3226 iMPROPEK ACTivrnES in the labor field

Senator Mundt. At the time you got the $53,000 check

Mr. Altimont. Fifty-one.

Senator Mundt. The $51,000 check, to whom did you think the house had been sold at that time ?

Mr. Altimont. Well, I believe subsequent to actual settlement it was about 45 days after the contract was signed, or close to it, I had met Llo;7d Klenett and Valente. I had met them. I think I had met them prior to his final settlement. In other words, once the sales contract was signed and the deposit was put on it, the real estate agent feels free for the builder and buyer to meet. He feels safe.

Senator Mundt. Just to have you reconstruct your own personal reaction, you thought you sold the house originally to Evelyn Nolan, was it ?

Mr. Altimont. No, not really.

Senator Mundt. You did not think she bought it, you just did not know who did buy it ?

Mr. Altimont. That is correct.

Senator Mundt. That is correct ?

Mr. Altimont. Yes.

Senator Mundt. Wlien did you first find out who actually bought it, and how did you find that out ?

Mr. Altimont. Well, actually some time prior to — rather, after signing the sales contract to settlement, I believe we met Klenert and Valente and we went over some items that they wanted corrected on the house prior to moving in, prior to settlement.

Senator Mundt. They told you then that they had bought the house ?

Mr. Altimont. Yes.

Senator Mundt. And you met them through the Nolans, did you ? Or the Parkers ?

Mr. Altimont. Either that or they called me. I don't remember the exact meeting.

Senator Mundt. You did not know these people before that ?

Mr. Altimont. Definitely not.

Senator Mundt. So somebody had to get in touch with them?

Mr. Altimont. Correct.

Senator Mundt. It was probably the man who made the sale?

Mr. Altimont. Correct.

Senator Mundt. All right.

The Chairman. Call the next witness.

Mr. Kennedy. Miss Aileen Callaghan.

(Members present at this point: Senators McClellan, Goldwater, Mundt, and Curtis. )

The Chairman. Will you be sworn, please ?

You do solemnly swear that the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and noth- ing but the truth, so help you God ?

Miss Callaghan. I do.

TESTIMONY OP MISS AILEEN CALLAGHAN

The Chairman. Miss Callaghan, will you state your name, your place of residence, and your business, occupation, or employment ?

Miss Callaghan. Aileen Callaghan. I am secretary to J. Garrett Beitzell, realtor.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3227

The Chairman. Did you state your residence?

Miss Callaghan. 2700 Connecticut Avenue.

The Chairman. Thank you.

You are familiar, I assume, with the rules of the committee permit- ting you to have counsel present to advise you, if you desire ?

Miss Callaghan. Yes, sir. I am.

The Chairman. Do you waive counsel ?

Miss Callaghan. I do.

The Chairman. Thank you.

All right, Mr. Kennedy.

Mr. Kennedy. What was the first transaction that you had in con- nection with the sale of these two houses ?

Miss Callaghan. Well, when the contract came into the office, when Mr. Nolan brought it in.

Mr. Kennedy. The first moneys that you received was $2,000, is that right?

Miss Callaghan. Yes, that is right, two $1,000 checks.

The Chairman. Does taking pictures while you are testifying bother you ?

Miss Callaghan. I don't like it.

The Chairman. The photographers will refrain from taking pic- tures while the witness is testifying.

Miss Callaghan. Thank you.

Mr. Kennedy. The first was $2,000 ?

Miss Callaghan. That is right.

Mr. Kennedy. That was transferred into your account ?

Miss Callaghan. Yes.

Mr. Kennedy. There were two $1,000 checks, is that right ?

Miss Callaghan. Yes.

Mr. Kennedy. Altogetlier you received $5,000 ?

Miss Callaghan. That is right.

Mr. KJENNEDY. The other $3,000 came on the settlement date?

Miss Callaghan. It came after the settlement, from the title com- pany.

Mr. Kennedy. From the Mutual Title Co. ?

Miss Callaghan. Yes, Mutual Title Co.

Mr. Kennedy. That was for $3,000?

Miss Callaghan. Yes.

Mr. Kennedy. On May 6, 1952, you received $3,000 from the Mutual Title Co.?

Miss Callaghan. I don't remember the date, but I guess that was about right.

Mr. Kennedy. Did you deposit those first two checks in the Beitzell bank account ?

Miss Callaghan. Yes.

Mr. Kennedy. Will you ask her to identify these, Mr. Chairman?

The Chairman. The Chair hands you what purports to be a photo- static copy of a deposit slip where you presumably deposited the $2,000 on April 7, 1952, to the credit of J. Garrett Beitzell, special account.

Will you examine this deposit slip, this photostatic copy, and state whether you recognize that as a photostatic copy of the original deposit slip ?

(Document handed to witness.)

3228 IMPROPER ACTIVITIES IN THE LABOR FIELD

Miss CALLAGiiAiSr, Yes, I do. The Chairman. That may be made exhibit No. 3. (The document referred to was marked "Exhibit No. 3," for refer- ence and will be found in the appendix on p. 3514.)

Mr. Kennedy. So you deposited that on April 7, 1952, is that right? Miss Callaghan. Yes. Mr. Kennedy. Will you identify this check ?

The Chairman. The Chair hands you what purports to be a photo- static copy of a check in the amount of $1,000, dated April 4, 1952, payable to the order of Beitzell, signed Anthony Valente. Will you please examine this document and state if you recognize it to be a photostatic copy of the check ? (Document handed to witness. ) Miss Callaghan. Yes, I do. The Chairman. That may be made exhibit No. 4. (The document referred to was marked "Exhibit No. 4," for refer- ence and will be found in the appendix on p. 3515.) The Chairman. Proceed, Mr. Kennedy.

Mr. Kennedy. You do not know where Mr. Klenert's check is, do you ?

Miss Callaghan. No. Mr. Kennedy. You would not know that.

Do you know if that was a union check, or his own personal check ? Miss Callaghan. I think it must have been a personal check. I don't remember.

Mr. Kennedy. You do not remember. Miss Callaghan. No.

Mr. Kennedy, You do identify this check from Anthony Valente and that is a personal check ?

Miss Callaghan. That is a personal check.

Mr. Kennedy. You received the $3,000 that we mentioned on the closing dates, is that right ? Miss Callaghan. Yes.

Mr. Kennedy. These, Mr. Chairman, are the deposit tickets and the check for the $3,000.

The Chairman. The Chair hands you what appears to be another photostatic copy of a deposit slip in the amount of $3,050.90, dated May 6, 1952, deposited to the credit of J. Garrett Beitzell. Will you please examine that and see if you identify it ? (Document handed to witness. ) Miss Callaghan. Yes, I do.

The Chairman. Is there more than one entry on that deposit slip ? Miss Callaghan. Yes. The Chairman. How many are there ? Miss Callaghan. There are four. The Chairman. Four entries? Miss Callaghan. Yes.

The Chairman. And the total amount of the deposit is what ? Miss Callaghan. $3,050.90.

The Chairman. Is one of those entries for the amount of $3,000? Miss Callaghan. Yes, from the Mutual Title. The Chairman. I beg your pardon ? Miss Callaghan. From the Mutual Title Co.

IMPROPER ACTIVmES IN THE LABOR FIELD 3229

The Chairman. That may be made exhibit No. 5.

(The document referred to was marked "Exhibit No. 5" for refer- ence and may be found in the appendix on p. 3516.)

The Chairman. The Chair hands you what purports to be a photo- static copy of a check in the amount of $3,000, from the INIutual Title Co., dated May 6, 1952, payable to the order of J. Garrett BeitzeU. Will you please examine that and state if you recognize that as a photo- static copy of the original check ?

(Document handed to witness.)

Miss Callagiiax. Yes.

The Chairman. That will be made exhibit No. 6.

(The document referred to was marked "Exhibit No. 6" for refer- ence and will be found in the appendix on p. 3517.)

The Chairman. The Chair will ask you if that is the item of deposit, the entry of $3,000 on the deposit slip which you just identified.

Miss Callaghan. Yes ; it is.

The Chairman. It is the $3,000 deposit ?

Miss Callaghan. Yes.

The Chairman. Thank you very much.

Mr. Kennedy. I have just a couple of questions in closing. Was the Mutual Title Co. usually the title company that was used by Beitzell?

Miss Callaghan. Well, usually, no, because it was a little incon- venient for us. They were out in JMaryland. We used to use the title company closer to us in the District.

Mr. Kennedy. Do you know why this title company was used in this case?

Miss Callaghan. Well, I don't know. There was no particular reason. Mr. Nolan took care of the case himself. That is the only reason I know of.

(At this point. Senator McClellan witlidrew from the hearing room.)

Mr. Kennedy. Thank you very much.

Senator Goldwater. Are there any questions ?

Senator Mundt ?

Senator Mundt. No questions.

Senator Goldwater. Senator Curtis ?

Senator Curtis. I have no questions.

Senator Goldwater. Tliat is all. Miss Callaghan. You may stand aside.

Mr. Kennedy. Mr. Calabrese.

(Members present at this point: Senators Goldwater, Mundt, and Curtis. )

Senator Goldwater. Would you raise your right hand? Do you solemnly swear that the testimony you shall give shall be the truth, the whole truth, and nothing but the truth, so help you God ?

Mr. Calabrese. I do.

TESTIMONY OF ALPHONSE F. CALABRESE

Senator Goldwater. Would you state your name and your present occupation ?

89330— 57— pt. 9 2

3230 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Calabrese. My name is Alphonse F. Calabrese. I reside in College Park, Md. I am presently employed as an investigator on tliis select committee.

Mr. Kennedy. You have made an investigation of some of the bank accounts of Mr. Klenert and Mr. Valente, have you not ?

Mr. Calabrese. Yes.

Mr. Kennedy. In connection with the 2 checks that we have been discussing, the 2 checks for $1,000 apiece, have you made an investi- gation concerning those 2 checks ?

Mr. Calabrese. Yes.

Mr. Kennedy. Did Mr. Klenert open a checking account at the City Bank on May 19, 1941 ?

Mr. Calabrese. That is correct.

Mr. Kennedy. And he closed it down February 1, 1955 ?

Mr. Calabrese. That is correct.

Mr. Kennedy. And Mr. Valente opened a checking account at the same bank on February 3, 1940 ?

Mr. Calabrese. That is correct.

Mr. Kennedy. And it was reopened in December 1943, in a joint account with his wife ; is that right ?

Mr. Calabrese. Yes. The joint account was opened with his wife on January 8, 1952.

Mr. Kennedy. It was reopened in December 1943, and then the joint account in January 1952 ?

Mr. Calabrese. That is correct.

Mr. Kennedy. Did the union, the United Textile Workers, also have an account there ?

Mr. Calabrese. Yes; they had a checking account amongst other accounts; that is right. The checking account was opened on June 2, 1948. The person who was authorized to sign for the union was the secretary-treasurer, Lloyd Klenert. This account was closed on June 10, 1953.

Mr. Kennedy. Did you attempt to determine whether the $1,000 paid out to Beitzell on April 4, 1952, and signed by Anthony Valente — did you determine whether that had been debited to Valente's ac- count ?

(At this point. Senator McClellan entered the hearing room.)

Mr. Calabrese. We ascertained that Valente's account was debited for $1,000 on April 8, 1952, the day after the $1,000 check was de- posited in the Security Bank by the Beitzell Realtors.

Mr. Kennedy. Did you request of Mr. Klenert, when you inter- viewed him, for any of the checks that he had during the period of time ? Did you make the request of Mr. Valente ?

Mr. Calabrese. Yes, I did ; and he advised that all his checks had been disposed of up to November, or approximately November, of 1955, which he made available.

Mr. Kennedy. Did you go, then, to his bank account, also, to deter- mine whether $1,000 had been withdrawn from it, from his bank account ?

Mr. Calabrese. Yes. And during that pertinent period, April 7, 8, and 9, there was no $1,000 debit on his bank account at the City Bank.

Mr. Kennedy. Was there a $1,000 debit on the account of the United Textile Workers?

IMPROPER ACTIVITIES IN THE LABOR FIELD 3231

Mr. Calabrese. There was a $1,000 debit on the account of the UTWA, and that also was on April 8, 1952, the same date as of Val- ente's personal account.

Mr. Kennedy. We have no documentation, do we, on the question of whether this $1,000 that came out of the UTWA was the same $1,000 that was used as a downpayment on this home ?

Mr. Calabrese. We have no documentation, because the City Bank does not microfilm — did not microfilm at that time — the checks.

Mr. Kennedy. And the records of the union have been destroyed?

Mr. Calabrese, And the records of the union have been destroyed.

Mr. Kennedy. That is, for during this period of time ?

Mr. Calabrese. That is correct.

Mr. Kennedy. But you do not know on the same day that $1,000 was debited to Anthony Valente's account, that $1,000 was debited to the UTWA account?

Mr. Calabrese. That is correct.

Mr. Kennedy. And, during this pertinent period of time, there was no debit of $1,000 to the other account ?

Mr. Calabrese. That is correct, not during that period of the 7th, 8th, 9th, and 10th,

Mr, Kennedy, You can determine, can you not, from the deposit slip, that the two $1,000 checks were from the City Bank?

Mr, Calabrese. That is correct.

Mr. Kennedy. They have been placed in the record ?

Mr. Calabrese. They were placed in the record. It indicates that there were two $1,000 checks drawn on the City Bank.

Mr. Kennedy. That is all at this time, Mr. Chairman.

The Chairman. All right. Call the next witness.

(Members present at this point: Senators McClellan, Goldwater, Mundt, and Curtis.)

Mr. Kennedy. Mr. Martin J. Quigley.

The Chairman. Mr. Quigley, will you be sworn, please ?

You do solemnly swear that the evidence you shall give before this Senate Select Committee shall be the truth, the whole truth and noth- ing but the truth, so help you God?

Mr. Qtjigley. I do.

TESTIMONY OF MAETIN J. aUIGLEY

The Chairman. State your name, your place of residence, and your business or occupation.

Mr. Quigley. Martin J. Quigley, 10421 River Eoad, Potomac, Md. I am president of the Mutual Title Co.

The Chairman. How long have you been president of that company, Mr. Quigley ?

Mr. Quigley. Since its formation in 1949.

The Chairman. You are familiar with the rules of the committea Do you waive counsel ?

Mr. Quigley. I do.

The Chairman. Thank you very much.

All right, Mr. Kennedy, proceed.

Mr. Kj:nnedy. You are also an attorney, are you, Mr. Quigley?

Mr. Quigley. Yes, sir.

Mr. Kennedy. And you are a member of the bar of the District of Columbia?

3232 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. QuiGLEY. Yes, sir.

Mr. Kennedy. Could 3'ou tell the committee what the Mutual Title Co.'s duties or responsibilities are ?

Mr. QuiGLEY. We are engaged in the examination and settling of real estate transactions, principally in Maryland.

Mr. Kennedy. Primarily in Maryland ?

Mr. QuiGLEY. Yes.

Mr. Kennedy. Are you involved in the sale of real estate?

Mr. QuiGLEY. No.

Mr. Kennedy. What is the difference in settlements ?

Mr. QuiGLEY. We handle the closing. We examine the title, handle the closing, and see to the transfer of the property and the disburse- ment of the funds to the seller.

Mr. Kennedy. Were you involved in the closing of a real-estate deal involving certain homes for Mr. Valente and Mr. Klenert?

Mr. QuiGLEY. In the closing, yes. Not the sale.

Mr. Kennedy. In the closing ?

Mr. QuiGLEY. Yes.

Mr. Kennedy. When did you first meet Mr. Klenert and Mr. Va- lente?

Mr. QuiGLEY. The early part of May 1952.

Mr. Kennedy. The early part of what ?

Mr. QuiGLEY. OfMav.

Mr. Kennedy. Of 1952?

Mr. QuiGLEY. Yes.

Mr. Kennedy. How did you happen to meet them ?

Mr. QuiGLEY. They came in to settle for the purchase of these houses.

Mr. Kennedy. 'Wlio was handling it from your office ?

Mr. Qihgley. I handled it personally.

Mr. Kennedy. Did they make a payment to you at that time ?

Mr. QuiGLEY. Yes.

Mr. Kennedy. Hoav much money did they give you ?

Mr. QuiGLEY. They originally put up $95,000.

Mr. Kennedy. They put up $95,000 ?

Mr. QuiGLEY. Yes.

Mr. Kennedy. For the purchase of these two homes ?

Mr. QuiGLEY. For the purchase of real estate. It was not designated at the time what it was for, whether it was to be for the houses or for a building for a headquarters for the union.

Mr. Kennedy. If they came in with $95,000, they designated how the $95,000 was to be spent, did they not ?

Mr. QuiGLEY. Ninety-five was deposited 2 or 3 days before the clos- ing. Theclosingwason, if Irecall,May 5or6.

Mr. Kennedy. And they brought in $95,000 earlier?

Mr. QuiGLEY. Two or three days prior.

Mr. Kennedy. What was the $95,000 for?

Mr. QuiGLEY. It was to be held by me in escrow until they decided what property would be closed with that money.

Mr. Kennedy. Were there any documents or any contract that you made with them?

Mr. QuiGLEY. No, that was just a verbal arrangement. They would come in in 2 or 3 days to close on the purchase of the houses.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3233

Mr. Kennedy. On the purchase of the houses ^

Mr. QuiGLEY. Yes.

Mr. Kennedy. So it was understood at that time when they brought the $95,000 in, that it was to be for the purchase of the houses?

Mr. QuiGLEY. No, it was not.

Mr. Kennedy. What was understood ?

Mr. QuiGLEY. It was being left in escrow with me, with my com- pany, for the purchase of real estate and at the time it was deposited, that real estate was not designated.

Mr. I\j;nnedy. Do you mean these two union oiScials brought in a check for $95,000, just gave it to you, and there was no discussion as to how the money was going to be used or what property they had in mind?

Mr. QuiGLEY. Not until 2 or 3 days later, as I recall.

Mr. Kennedy. Then did they tell you the property they had in mind was the two homes for themselves ?

Mr. QuiGLEY. They told me to settle the two homes and to use what- ever was necessary out of the $95,000 to accomplish that.

The Chairman. As I understand you, Mr. Quigley, when they first made the deposit with you in escrow, the $95,000, they did not advise you at that time the specific property it was to be apj)lied to ?

Mr. QuiGLEY. No, I understood that they were in the market for these two houses and also for a piece of property as a headquarters for the union.

The Chairman. At that time, you understood they were in the mar- ket for the two houses and also another piece of property that might be used for union purposes ?

Mr. QuiGLEY. Yes.

The Chairman. And when they first placed the $95,000 with you, they had not determined, that is, at least they gave you no instruc- tions, as to which one it would be applied to, but some 2 or 3 days later they did instruct you to apply such part of it as necessary to acquire these two homes ?

Mr. Quigley. That is correct.

The Chairman. All right.

Senator Mundt ?

Senator Mundt. Mr. Quigley, did they come into }our office mian- nounced or did somebody bring them in ?

Mr. Quigley. They were brought in by Mr. M. Parker Nolan, a real estate salesman for the Beitzell Co.

Senator Mundt. Undoubtedly a man who had done business with you before, I presume ?

Mr. Quigley. Yes, a friend of mine and he referred whatever title business he could to me.

Senator Mundt. Did he give you any idea as to what property he was trying to sell them ?

Mr. Quigley. Well, the titles had been run on the two houses. They were ready for settlement. They were ready to be closed. We had completed our title examination on those.

Senator Mundt. On the two houses ?

Mr. Quigley. Yes, sir.

Senator Mundt. So you did know at that time that the two houses were involved ?

Mr. Quigley. Yes, sir.

3234 IMPROPER ACTIVITIES IN THE LABOR FIELD

Senator Mundt. But you did not know whether or not additional parcels of property might also be involved ?

Mr. QuiGLEY. No, I did not.

Senator Mundt. Was the $95,000 brought in in the form of folding: money or a personal check or a union check ?

Mr. QuiGLET. It was a union check.

Senator Mundt. It was a union check ?

Mr. QuiGLET. Yes, sir.

Senator Mundt. Thank you.

The Chairman. Senator Curtis ?

Senator Curtis. You say that there were title papers in your office for these two houses ?

Mr. QuiGLEY. Yes, sir.

Senator Curtis. You made at least some preliminary examination ?

Mr. QuiGLEY. We made a full examination. We were ready for settlement about May 1.

Senator Curtis. Did you have any title papers or any contract papers or any papers relating to a property that was under considera- tion for purchase for a union headquarters ?

Mr, QuiGLEY. No, sir.

Senator Curtis. The only place that the idea of buying a union headquarters was brought in was when these men mentioned it ?

Mr. QuiGLEY. That is correct. I had nothing in writing at the tune.

Senator Curtis. And at the time they gave you a check that was from the union, they told you that they might be settling on a union headquarters ?

Mr. QuiGLEY. Yes, sir ; that was mentioned.

Senator Curtis. Did they ever buy a union headquarters ?

Mr. QuiGLEY. As far as I know, they did not.

Senator Curtis. Not through your agency ?

Mr. QuiGLEY. No.

Senator Curtis. Or, rather, not through your title company ?

Mr. QuiGLEY. No.

The Chairman. All right, Mr. Counsel.

Mr. Kennedy. Mr. Chairman, we have that document. Can we have it identified ?

The Chairman. I have here what purports to be a deposit slip in the amount of $120,606.51, dated May 2, 1952, deposited to the credit, of the Mutual Title Co., trustee account.

I ask you to examine this photostatic copy and see if you recognize it and identify it as such.

(A document was handed to the witness.)

Mr. QuiGLEY. Yes, that is a copy of our deposit slip for that day.

The Chairman. That shows a total, as the Chair stated, of some $120,000. What is the largest item of deposit?

Mr. QuiGLEY. $95,000.

The Chairman. What is the source of the deposit ?

Mr. QuiGLEY. A check from the United Textile Workers of America.

The Chairman. A check from the United Textile Workers of America ?

Mr. QuiGLEY. Yes, sir.

The Chairman. Who delivered that check to you?

IMPROPER ACTIVITIES EST THE LABOR FIELD 3235

Mr. QuiGLEY. I can't say. That is 5 years ago and I cannot make a definite statement. I would presume it was these gentlemen. That is all I can say.

The Chairman. You do not know who actually, personally delivered it to you ?

Mr. QuiGLET. Xo, sir.

The Chairman. But that check came from that source and it was on that account ?

Mr. QuiGLEY. That is correct. That is on the deposit slip.

The Chairman. That is the $95,000i that you have been referring to as having been deposited with you in escrow for the purpose of closing purchases of certain real estate, the tracts that had been mentioned up to that time ?

Mr. QuiGLEY. Yes.

The Chairman. Thank you very much.

That may be made exhibit No. 7.

(The document referred to was marked "Exhibit No. 7" for refer- ence and will be found in the appendix on pp. 3518-3519.)

Mr. QuiGLEY. If I might, this deposit slip is dated May 2. The set- tlement was made on the 6th on the sale of the houses.

The Chairman. Some 3 days later.

Mr. QuiGLEY. Yes, sir.

Senator Mundt. Mr. Quigley, as part of your functions in the Mu- tual Title Co. in closing up real estate transactions, would you be aware of the purchase price paid for properties closed in your office ?

Mr. QuiGLEY. Yes, sir.

Senator Mundt. What was the purchase price of the two houses involved ?

Mr. QuiGLEY. The purchase price was $95,000 for the two houses, as disclosed by the contract.

Senator Mundt. So that when they gave you a check for $95,000 there was no money left with which to buy any additional property beyond the two houses ?

Mr. QuiGLEY. The ninety-five was not used to settle on the houses. That much was not required. Only about $57,000. There were two deeds of trust on there which made up the difference.

Senator Mundt. But the purchase price of the houses was $95,000. The size of the check was $95,000.

Mr. QuiGLEY. That is correct.

Senator ]\Iundt. I understand they did not pay it all in cash, but part of the $95,000 might have been returned because they took out a mortgage of some kind.

Mr. QiHGLEY. They assumed two construction loan mortgages that were on the property, totaling

Senator Mundt. This is something which, in my mind, is more than coincidental. That is the size of the check and the price of the houses were both $95,000.

INIr. QuiGLEY. But they only needed $57,000 to close the houses. They did not need $95,000.

(At this point. Senator Kennedy entered the hearing room.)

Mr. Kennedy. You knew, did you not, that the $95,000 that was given to you in the form of the check was for the purchase of these two houses ?

3236 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. QuiGLEY. No, I can't say that I knew it was for the purchase of the houses. Part of it was ; $57,000 of it was.

Mr. Kenxedy. That was later. But w^hen the $95,000 was given to you originally, you knew, did you not, that that $95,000 was for the purchase of these two houses ?

Mr. QuTGLEY. Xo. I knew that the purcliase price of the houses was $95,000, but I did not know what the terms were until we closed the case, I think on a Monday. I think this deposit was made on a Friday.

Mr. Kennedy. I am not asking you about the terms. You knew that the $95,000 was for the purchase of these two houses ; did you not ?

Mr. QuiGLEY. Part of it.

Mr. Kennedy. You knew part of it was ?

Mr. Qtjigley. On Monday, I knew that $95,000 was not required.

Mr. Kennedy. Wlien you got this check on May 1, what did you know ? Did you not know on May 1 that this $95,000 was for the pur- chase of these two houses ?

Mr. QuiGLEY. Part of it was to be used for the purchase of the houses, yes.

Mr. Kennedy. "\Yliy do you say part ?

Mr. QuTGLEY. Because we did not spend the $95,000.

Mr. Kennedy. I understand vou did not ultimately.

Mr.QuiGLEY. Only $57,000. "

Mr. Kennedy. I understand that. But at that time, you under- stood that the $95,000 check was to pay for these two houses, did you not?

Mr. QuiGLEY. Whatever part of the check was required to close it, yes.

Mr. Kennedy. And it might be all of the check ?

Mr. QuiGLEY. It could have been all, if they had not assumed the trust, yes. It would have been.

Mr. Kennedy. I just want to draw j^our attention to the second page. You deposited that check for $95,000. Do you have a number there?

Mr. QuiGLEY. Yes. That is the case number.

Mr. Kennedy. What is that the case number for?

Mr. QuiGLEY. That is our Mutual Title Co. case number.

Mr. Kennedy. A case number for the purchase of two houses, is that correct?

Mr. QuiGLEY. That is correct.

Mr. Kennedy. So for that $95,000 you have a case number there that refers to two houses that were then being negotiated to be pur- chased by Valente and Klenert?

Mr. QuiGLEY. That is correct.

Mr. Kennedy. Would you have him identify these documents, Mr. Cliairman.

The Chairman. The Chair hands you a three-page photostatic copy of a document on the stationery of the Mutual Title Co., dated May 5, 1952. It starts off "Albert J. Altimont and Alfred A. Altimont in'the matter of sale of lot 1, plot A, square 18, Rock Creek Hills."

I wish you would examine this document and see if you identify it as a photostatic copy of the original and then state exactly what the document is.

(A document was handed to the witness.)

IMPROPER ACTIVITIES IN THE LABOR FIELD 3237

Mr. QuiGLEY. This statement is the seller's statement in my hand- writing of the settlement of the sale by Altimont to Klenert and Valente.

The Chairman. The seller's statement, did you say?

Mr. QuiGLEY. Yes, sir. The owners or seller's. The Altimont Co. was the seller.

The Chairman. What is the difference? I am not sure I under- stand. What is the difference between a seller's statement and a buyer's statement ?

Mr. QuiGLEY. Well, one of them gets money back and the other puts it up.

The Chairman. I know that is true with the money, but I thought one statement would reflect the whole transaction. I do not know.

Mr. QuiGLEY. No. We make the statements separately, only using the items that in this case, Altimont was interested in. The}' are not interested in the title expense and State stamps and things like that.

The Chairman. In other words, in the closing, there are separate expenses for the purchaser and for the seller ?

Mr. QuiGLEY. That is correct. And we just separate the statements for that reason.

The Chairman. I see. That may be made exhibit No. 8, for refer- ence.

(The document referred to was marked "Exhibit No. 8" for refer- ence and will be found in the appendix on p. 3520.)

Mr. Kennedy. The other two pages give the breakdown as to the homes, is that right, the buyer's statements?

Mr. QuiGLEY. That is right. They are separate buyer's statements.

]\Ir. Kennedy. "^^Hiat was the price again as indicated on your seller's statement ?

Mr. QuiGLEY. $95,000, and the two purchasers' statements total $95,000.

The Chairman. Let the Chair get it straight here for the record. The top photostatic copy is the seller's statement?

Mr. QuiGLEY. Altimont, the seller's, statement, yes, sir.

The Chairman. And the other two pages are what ?

Mr. QuiGLEY. The next one is a statement of Lloyd Klenert, showing a purchase of $52,500. The next one is a purchaser's statement for Mr. Valente, and that price is $42,500.

The Chairman. Then, the top document, the first page you testified to, will be made exhibit No. 8. The second one that you testified to will be made exhibit No. 9; and the third one will be made exhibit No. 10. I want to get them straight for the record.

(The documents referred to were marked "Exhibits Nos. 9 and 10" for reference and will be found in the appendix on pp. 3521-3522.)

Mr. Kennedy. The case number of them is 2223, is that correct ?

Mr. QuiGLEY. That is correct.

Mr, Kennedy. Was the original intention, at least for a period of 1 day, to use the whole $95,000 for the purchase of these 2 homes?

Mr. QuiGLEY. No. I am not going to admit that they told me to use the $95,000 for the purchase of the homes because they didn't and it was not settled on that basis.

Mr. Kennedy. I am not asking you whether it was settled on that basis. I am asking you whether there wasn't an intention.

3238 IMPROPER ACTIVmES IN THE LABOR FIELD

Mr. QuiGLEY, I do not know.

Mr. Kennedy. You do not know ? "Why was the $95,000 deposit, the check that you received, why was it stipulated that it was in reference to 2223, and that is your file number, which concerns the sale of these two houses ?

Mr. QuiGLEY. The property that they were considering, or told me they were considering, to buy for headquarters, we did not have any specific property in mind. We had no way of indexing it, excepting under their name.

Mr. KJENNEDY. Let me ask you this : Is that the usual procedure for a person who intends to buy property, to put a deposit down on prop- erty he does not know anything about, and which the seller knows nothing about ?

Mr. QuiGLEY. JMaybe he did know something about it. I don't know.

Mr. ICennedy. He did not discuss it with you, did he ?

Mr. QuiGLEY. No. He just put it up as an escrow to buy a piece of property.

Mr. Kennedy. Wliich was never identified ?

Mr. QuiGLEY. Kot at that time ; no. And it never has been identi- fied, as a matter of fact.

Mr. Kennedy. Is that the usual procedure, to put up money on property that is not identified, to either the purchaser or the seller?

Mr. QuiGLEY. It is not usual, and it is not unusual. We act as es- crow agents.

Mr. Kennedy. I can understand you acting as escrow agents, but I cannot understand you acting as escrow agents on property that you cannot identify.

Mr. QuiGLEY. The time had not come to identify it. We were hold- ing the money until we could identify it.

Mr. Kennedy. What would be the purpose of putting up money on property that nobody knew what it was ?

Mr. QuiGLEY. They would have to answer that. I do not know. They put it up.

Mr. Kennedy. Have you ever had that happen to you before ?

Mr. QuiGLEY. Not exactly that way ; no.

The Chairman. The Chair hands you what purports to be photo- static copies of the stubs of checks covering nine different checks. I think, as I understand it, only 5 of the 9 are relevant to this inquiry. I will ask you to examine these photostatic copies and see if you iden- tify them as copies of your original check stubs.

(Documents were handed to the witness.)

Mr. QuiGLEY. It looks like these checks were drawn and then voided. Wliy, I don't know.

The Chairman. Do you know whose handwriting they are in ?

Mr. QuiGLEY. Yes. They are in my bookkeeper's handwriting.

The Chairman. You recognize the handwriting ?

Mr. QuiGLEY. Yes, sir.

The Chairman. Do you recognize those as photostatic copies of your check stubs ?

Mr. QuiGLEY. Yes.

The Chairman. You do so recognize them.

Mr. QuiGLEY. Yes.

IMPROPER ACTIVITIES EST THE LABOR FIELD 3239

The Chairman. Then will you, for us, Mr. Quigley, identify from the three sheets that you have before you, which contain the stubs of nine checks ; am I correct ?

Mr. QiHGLET. That is correct ; yes, sir.

The Chairman. Some of them may not relate to this transaction that is involved, so will you identify by number as appears on the stub, those that are related to this transaction ?

Mr. QuiGLET. Those with the X mark do not belong to the transac- tion.

These that are X'd out do not belong in this transaction. They are in another case.

The Chairman. Will you identify by number those that are not marked out, according to your check stub number ?

Mr. Quigley. Check No. 6057 was drawn to the Equitable Life Assurance Co. and then voided.

The Chairman. If you will identify all of them relating to this, then we can refer to them by number.

You say that was voided. Now to the next one that relates to the transaction.

Mr. Quigley. That is check 6058.

The Chairisian. Six what ?

Mr. Quigley. 6058.

The Chairman. 6058, and the next number ?

Mr. Quigley. 6059, 6060.

The Chairman. 6060.

Mr. Quigley. 6061.

The Chairman. And 6061. Those 5 stubs are from 6057, begin- ning with 6057, and including 6061, are stubs of checks issued, whether they are voided or not, relating to the transaction we have been discussing?

Mr, QuiGiiEY. Yes, sir. -•v The Chairman. Those may be made exhibit No. 11 for reference.

(The documents referred to were marked "Exhibit No. 11*' for refer- ence and will be found in the appendix on pp. 3523-3524.)

The Chairman. Mr. Kennedy, do you want to ask a question?

Was it 6057 that was marked "void" ?

Mr. Quigley. Yes, sir.

Mr. Kennedy. Just so we got the record straight, there was $57,000 worth of equity in this transaction ; is that right ?

Mr, Quigley. Yes.

Mr. Kennedy. And there was $38,000 in mortgages?

Mr. Quigley. Eight,

Mr. Kennedy. And the mortgages were with the Equitable Life Assurance Co ?

Mr. Quigley. Yes.

Mr. Kennedy. So on the question of whether it was the intention at the beginning, originally, and you knew of this intention, to use the whole $95,000, there would be the $57,000 plus the payments to the Equitable Life Assurance Co.

Do you have any check stubs there showing that it was the intention to pay the moneys to the Equitable Life Assurance Co. ?

Mr. Quigley. This would look like it was the intention, except the check to J. Garrett Beitzell is drawn for an amount entirely dilferent from the amount that was paid to them.

3240 IMPROPER ACTn'ITIES m THE LABOR FIELD

. Mr. KENNEDr. How much was that check for ?

Mr.QuiGLET. $2,085.66. They got $3,000.

Mr. Kennedy. What about the other. Equitable Life Assurance?

Mr.QuiGLET. 6057 is for $20,164.36.

Mr. Kennedy. Isn't that the worth of the mortgage for that piece of property ?

Mr. QuiGLEY. Yes.

Mr. Kennedy. So that figure is correct is it not?

(At this point, Senator Goldwater withdrew from the hearing room.)

Mr. Quigley. I must presume it is correct ; yes.

Mr. Kennedy. Do you have any others ?

Mr. Quigley. The next one, 6058, is drawn to the Equitable Life Assurance Co. for $18,658.53.

Mr. Kennedy. That is the $38,000 ; is it not ?

Mr. Quigley. Yes ; those 2 would total roughly $38,000.

Mr. Kennedy. And together with the $57,000 that was going to be paid, makes the $95,000 ; is that right ?

Mr. Quigley. Yes.

Mr. Kennedy. So it was the intention, and you knew of the inten- tion, to use the whole $95,000 to purchase these 2 pieces of property for Mr. Klenert and Mr. Valente ; is that correct ?

Mr. Quigley. I am not going to admit I knew it because I don't know. I am looking back 5 years.

Mr. Kennedy. You have made out checks to indicate that.

Mr. Quigley. I made out one to Beitzell for $2,085 and then paid him $3,000. I can't explain that, either.

Mr. Kennedy. At least you have made out checks to cover the whole $95,000; is that correct?

Mr. Quigley. Yes, but it was not closed on that basis.

Mr. Kennedy. I understand it was not closed. All I am getting at now is that it was the intention to use the whole $95,000 for that pur- pose ; is that correct ?

Mr. Quigley. Wliether it was the intention or not, I don't know. It was not used for that purpose. I can tell it was not used. I don't know what the intention was.

Mr. Kennedy. $95,000 first came in, in the check, with its case number in your file, this very case, on purchasing the 2 pieces of property, and then you have these check stubs which add up to $95,000.

Do you deny that it was the intention, and that you knew of it, to use this whole $95,000 for the purchase of these 2 pieces of property ?

Mr. Quigley. These gentlemen will have to tell you about the inten- tion. I don't know what their intention was.

Mr. Kennedy. I am asking about you, about what you knew.

Mr. Quigley. I can only show what these checks show, and the ones that were voided. I do not know what their intention was.

The Chairman. You mean you do not now remember at that time why you happened to make out checks to cover the entire amount?

Mr. Quigley. No, sir. That is 5 years ago.

The Chairman. 1 say you now say you do not know why you did it?

Mr. Quigley. No, I do not. I drew the checks apparently for the full $95,000, yes.

The Chairman. And for some reason, but you do not now know the reason why, the full amount was not used ?

IMPROPER ACTIVITIES IN THE LABOR FIELD 3241

Mr. QuiGLET. And they were canceled and not used, yes.

The Chairman. You do not know why they were canceled?

Mr. QuiGLEY. No, I do not.

The Chairman. Of course, if you were going to assume mortgages already on the property, assume the payment of them, it wouldn't take tlie $95,000, all of iti

Mr. QuiGLET. That is right.

The Chairman. So what you finally did afterward was appar- ently you thought you had to pay out the full $95,000, you wrote checks accordingly, and you found that you didn't have to, and, for some reason then only wrote checks out for the difference between the mortgage amount assumed and the total purchase price.

Mr. QuiGLEY. That is correct.

The Chairman. But you are unable to recall now why you happened to make out checks to cover the full amount ?

Mr. QuiGLEY. I can only assume it was on instructions from the purchasers.

As I remember, the contract gave them an option to either assume or pay all cash, and they elected, evidently elected, to assume, and instructed me, and I abided by their instructions.

(At this point. Senator Kennedy withdrew from the hearing room.)

Mr. IvENNEDY. Did you call or telephone the Equitable Life As- surance Co. ? Did you call the Equitable Life Assurance Co. to find out how much it would cost to pay off these mortgages ?

Mr. QuiGLEY. Evidently. If that figure would have paid them off, I must have called them.

Mr. Kennedy. You must have telephoned them ?

Mr. QuiGLEY. Yes. So instead of paying them, I just sent them two overdue monthly payments that are shown on the Altimont state- ment.

Mr. Kennedy. Ultimately, you say that the whole $95,000 was not used, union funds were not used, for the purchase of these two homes for Mr. Klenert and Valente.

Was any union money used for the purchase of the homes of Mr. Klenert and Mr. Valente ?

Mr. QuiGLEY. Yes. $57,000.

Mr. Kennedy. That was for tlie equity, to purchase the equity, in these two properties, and they assumed the mortgages, is that right?

Mr. QuiGLEY. That is correct.

Mr. Kennedy. What date was tliat?

Mr. QuiGLEY. On or about May 6, 1952.

The Chairman. Let us get one other thing straight. We are talk- ing about $57,000 being used for the purchase of two houses. Let us identify each house and state how much of the $57,000 went to the purchase price of that house.

What are the two men's names ?

Mr. Kennedy. Valente and Klenert.

The Chairman. How much of the $57,000 was used to pay on his house ?

Mr. QuiGLEY. The amount shown on his statement there.

The Chairman. I don't recall the amount.

Mr. QuiGLEY. It shows a balance due to settle of $32,000 or some- thing on one

The Chairman. Let us s^et it exact for the record.

3242 IMPROPER ACTIVmES IN THE LABOR FIELD

According to your statement here, which has been made exhibit No. 9, $32,095.92 was the amount out of the $57,000 that went to pay for the Klenert house.

Would you say that is correct ?

Mr. QuiGLET. Yes, sir.

The Chairman. We will take the next one, which would be the Valente contract. It shows $24,013.76 out of the $57,000 was paid for that house. Is that correct ?

Mr. QuiGLEY. Yes, sir.

The Chairman. So those two figures total the $57,000 ?

Mr. QuiGLEY. No, I think the figure of $57,000 was just an arbitrary figure to give me enough to close. I think they got some small refl^nd,

The Chairman. Let's see what those two total. I am advised they total $56,462.48, and that the amounts stated here are the amounts that went to each house.

Mr. QmoLEY. Yes.

The Chairman. Thank you very much.

Mr. Kennedy. So $57,000 of the union money, then, was used to pur- chase these two homes for Klenert and Valente ; is that right ?

Mr. QuiGLEY. Yes, temporarily.

Mr. Kennedy. Mr. Quigley, did this use of union money to purchase personal homes raise any question in your mind ?

Mr. QuiGLEY. None whatever.

Mr. Ejennedy. You thought that was perfectly proper ?

Mr. QuiGLEY. As far as I was concerned ; yes.

Mr. Kennedy. Particularly if your testimony is correct earlier that you thought this money was a downpayment, this $95,000 was a downpayment, money to be held in escrow for the purchase of property for a union building, and then to go around 4 or 5 days later and use the money, or $57,000 of it, toward the purchase of personal homes for 2 union officials ?

You didn't see anything wrong ?

Mr. QuiGLEY. It is not our duty to see where the money comes from. That is not our job.

Mr. Kennedy. And this didn't raise any question in your mind ?

Mr. QuiGLEY. None whatever; no. It wasn't any of my business.

Mr. Kennedy. Wlien somebody comes in with corporate funds or union funds and uses those funds for a personal purchase, that doesn't, raise any question in your mind ?

Mr. QuiGLEY. None whatever ; no.

Mr. Kennedy. You think you can go ahead and use them ?

IMr. QuiGLEY. We do ; yes.

Mr. Kennedy. You don't think it should raise any question in your mind ?

Mr. Quigley. No. We are not an authority, not a union or anything like that. I am running a title company. If somebody brings in a check from a union or if they bring in a trustee check, we will accept it. It is not our business to question those funds.

Mr. Kennedy. Mr. Quigley, you said originally that you thought $95,000 was to be held in escrow for the purchase of a union head- quarters.

Mr. Quigley. That is right.

Mr. Kennedy. And 5 days later they turn around and buy them- selves personal homes.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3243

Didn't that raise any question ?

Mr. QuiGLEY. None whatever ; no. They could have withdrawn the $95,000. They could have withdrawn the purchase of the houses. We have no control over that.

Mr. KJENNEDY. And they didn't tell you that they wanted to keep this secret, and that you should help them and assist them in keeping the secret ; is that right ?

Mr. QuiGLET. Positively not.

Mr. Kennedy. Did you receive a letter from them on May 14, from Mr. Klenert on May 14, 1952 ?

The Chairman. I hand you what purports to be a photostatic copy of a letter dated May 14, 1952, addressed to Mr. Martin Quigley, Mu- tual Title Co., and signed by Lloyd Klenert, International secretary- treasurer.

This is on the United Textile Workers of America stationery. I ask you to examine it and see if you identify that as a photostatic copy of the original letter that you received.

(The document was handed to the witness.)

Mr. Quigley. Yes, sir ; I received that letter.

The Chairman. Since you have identified that, that may be made exhibit No. 12.

Mr. Kennedy. Mr. Chairman, may I read this into the record ?

The Chairman. It may be read into the record.

(The document referred to was marked "Exhibit No. 12" and fol- lows below :)

;Mr. Kennedy (Reading). United Textile Workers of America, Maj' 14, 1952, addressed to Martin Quigley, Mutual Title Co., 1917 15th Street NW., Washing- ton, D. C.

Dear Me. Qthgley :

I am enclosing herewith cashier's checks for the amount of $57,000, ,$30,000 drawn upon the City Bank and $27,000 drawn upon the Liberty Mutual Bank, which is a deposit on certain property for the United Textile Workers of America, to be identified as parcel No. 2.

You have already in your possession a deposit of $95,000 which you are holding as a deposit for another property for the United Textile Workers of America which is identified as parcel No. 1.

I am hereby requesting, because of certain organizational problems that we now have, that the first deposit of $95,000 be returned, and that the second deposit of $57,000 be held by you until such time as we close a definite deal for the building for the United Textile Workers of America.

Thanking you, I am. Very truly yours,

Lloyd Klenert, International Secretary-Treasurer.

Do you have any comment on that letter ?

Mr. Quigley. No. I received that letter.

Mr. Kennedy. Is this true, "You have already in your possession a deposit of $95,000" ? Did you have in your possession then a deposit of $95,000?

Mr. Quigley. I had had it, but I evidently didn't have it on the date of that letter.

Mr. Kennedy. You know you didn't have it that day ?

Mr. Quigley. No.

Mr. Kennedy (reads) :

You have already in your possession a deposit of $95,000 which you are holding as a deposit for another property for the United Textile Workers of America which is identified as parcel No. 1.

3244 IMPROPER ACTIVITrES IN THE LABOR FIELD

What did that sentence mean ?

Mr. QuiGLEY. Well, evidently the houses are parcel No. 2, and that was to replace the $57,000 that had been used to settle on the houses. That would be my construction of it.

Mr. KJENNEDY. What is parcel No. ?

Mr. QuiGLEY. I presume that is the building they intended to buy for the headquarters.

Mr. Kennedy. Wliere was that building ?

Mr. QuiGLEY. I don't know as they ever located a building.

Mr. Kennedy. Then didn't this raise some suspicion in your mind, when you had already used $57,000 of union funds to purchase these two personal homes, and this letter, on its surface is false?

Mr. QuiGLEY. It is not my job to be the judge in these cases.

The Chairman. Mr, Quigley, the only thing about this is he is stat- ing here in a letter to you, and I assume a copy of it was kept in the union files, that you still had on hand — that is the import of it, that you had on hand — $95,000 of union money on May 15.

Mr. QuiiGLEY. I think that that $57,000 replaced the $57,000 that was put into the houses.

The Chairman. He says, "you already have."

Mr. QuiGLEY. Well, I had had.

The Chairman. You had had, but you didn't have at that time?

Mr. QuiGLEY. No. I was $57,000 short.

The Chairman. So the letter, in saying that you then had, or that is the import of it, that you then had or still had $95,000, was in error ?

Mr. QuiGLEY. Well, it would have to be, because I didn't have it That replaced it.

The Chairman. Apparently it would have to be, unless there wab something else deposited in between.

Mr. QuiGLEY. I must assume that that $57,000 replaced the original $57,000 that was used.

The Chairman. Then you didn't have $95,000 until you got this letter with the check in it ?

Mr. Quigley. Correct.

The Chairman. That brought it back to $95,000?

Mr. QuiGLEY. That is right.

The Chairman. So the implication or the fact stated in the letter that you already had it was not a correct statement ?

Mr. QuiGLEY. I returned $95,000 to them.

The Chairman. Senator Curtis ?

Senator Curtis. Were those checks that were transmitted with that letter that you just read into the record union checks ?

Mr. Kennedy. We will get into that immediately, but the answer to the question is "Yes."

Senator, those checks were not union checks, but the money used to purchase those checks — they were cashiers checks and bank drafts — the money used to purchase those checks was union money.

Senator Mundt. Mr. Quigley, I am a little bit confused on what the counsel read in that letter, where he said, if I remember it correctly, and I will let him correct me if I am wrong— well, here is the letter.

You have already in your possession a deposit of $95,000.

You have testified to the fact that that was an erroneous statement, because while you had had the money previously you did not have it at this time.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3245

I am curious about the rest of it.

You have already in your possession a deposit of $95,000 which you are holding,

which was the second falsehood, because you were not holding it and you did not have it ; is that correct ?

Mr. QuiGLEY. That is correct.

Senator Mundt. This is where I get confused :

As a deposit for another property for the United Textile Workers of America — follow this now — which is identified as parcel Xo. 1.

If you were holding $95,000, that is a big chunk of alfalfa hay, and you were holding it in connection with the parcel of property identified as parcel No. 1. Certainly you must have known what parcel No. 1 was or this is the third falsehood of the letter, ^^^lich is it?

Mr. QuiGLEY. That identification of them by parcels was a designa- tion given to them by them, not me. I presume from that letter that parcel No. 2 was the houses. I do not loiow what parcel 1 was.

Senator Muxdt. You recognize the parcel No. 2 as the houses, but when they say parcel No. 1, you say 'T never heard of parcel No. 1."

Mr. QuiGLEY. They never told me what parcel No. 1 was.

Senator Mundt. It seems to me a member of this committee must draw the conclusion that this letter written about parcel No. 1 was written not for your eyes but for the eyes of the trustees and the auditors of the United Textile Workers of America, that they were talking about a i:)hantom, they were talking about a myth. If you were called in by the trustees or by George IVIeany, whose organization had investigated these operations, who said "Mr. Quigley, what about this Parcel No. 1 ?" You would have to tell them, I guess, as 3'ou told us, that you never heard of it, is that right ?

Mr. QuiGLEY. I don't know what parcel No. 1 was. It was never identified to me.

Senator Muxdt. So in one short sentence, they missed the truth about three different times.

Mr. Kennedy. Did you write him back and return that money, the $95,000?

Mr. QuiGLEY. Yes, I am sure I did.

The Chairman. Before we move on, this transaction where they wrote you that letter, as I started to say a moment ago the copy of that letter in the files of the union would indicate that you had more money belonging to the union in your possession than 3^ou had, would it not ?

Mr. QuiGLEY. Their letter to me would indicate it, yes.

The Chairman. That is what I mean.

I am wondering if, on receipt of the letter, you wrote them denying that or calling their attention to the inaccuracy of that statement ?

Mr. QuiGLEY. No. I just took the $57,000 and returned $95,000 to them. I think the record will show a letter of transmittal by me.

The Chairman. On May 15, this same date, apparently, I have here what purports to be a photostatic copy of a letter addressed to Mr. Lloyd Klenert, secretary-treasurer. United Textile Workers of America, Washington, D. C., showing a line, to be signed by the president of the Mutual Title Co. This copy does not bear any signa- 89330— 57— pt. 9 3

3246 IMPROPER ACTIVITIES IN THE LABOR FIELD

ture, but I ask you to examine it and state if that is a ])hotostatic copy of the carbon copy of your letter back to them on the same date.

(Document handed to witness.)

The Chairman. The date of that is ]\Iay 15.

Mr. QuiGLET. Yes, that is a copy of a letter.

The Chairman, That may be made exhibit 13.

Mr. QuiGLET. That is a carbon copy.

(The document referred to was marked "Exhibit 13," for refer- ence and will be found in the printed record.)

The Chairman. You did on that date return to them a check in the amount of $95,000, did you?

Mr. QuiGLET. Yes, sir.

The Chairman. I hand you what purports to be a photostatic copy of that check and ask if you identify it, please.

(Document handed to witness.)

Mr. QuiGLET. Yes, that is our check.

The Chairman. That is the check where you returned the $95,000 the same day, I assume, that j^ou received the letter you have been testifying about?

Mr. QuiGLET. Yes, sir.

The Chair:man. That photostatic copy of the check may be made exhibit No. 14.

(The document referred to was marked "Exhibit No. 14," and will be found in the appendix on p. 3525.)

The Chairman. Counsel may read the letter.

Mr. Kennedt. It is dated May 15, 1952, the Mutual Title Co., Mary- land title examination, to Mr. Lloyd Klenert, secretary-treasurer, United Textile Workers of America', 818 13th Street Northwest.

Dear Mb. Klenebt : Receipt is acknowledged of your letter of the 14th, where- in you enclose $57,000 in cashiers checks. .$30,000 drawn on the City Bank and $27,000 drawn on the Liberty National Bank, which, as you say, represents a deposit on certain property for the United Textile Workers of America, identi- fied as parcel No. 2, and which sum we are to hold until such time as a definite deal is closed for the purchase of a building for your organization. As per your request, we are enclosing herewith our check for $95,000 which was held by us as a deposit for certain property identified as parcel No. 1, and which trans- action did not materialize.

Mr. QuiGLET. That, I do not believe, states the true facts. The $57,000 was put up to make up the money that was put into the houses, re<jardless of what this letter says.

Mr. Kennedt. You wrote a false letter, did you not ?

Mr. QuiGLET. Let me see it again.

(Document handed to witness. )

The Chairman. Before you look at it, had you had any conversa- tions with them about this matter as to the fact that they were going to send you this $57,000, and then vou were to promptly return the $95,000 in that fashion ?

Mr. QuiGLET. I don't recall whether they walked in with the 57 or gave them tlie 95. I don't know.

The Chairman. I cannot understand the necessity or reason for bringing into you $57,000 more and having you immediately return the $57,000 plus the balance that you had on the other accoimt. Why would he ever give you the $57,000 ?

Mr. QuiGLET. So he could get 95 back.

The Chairman. Sir ?

IMPROPER ACTIVITIES IN THE LABOR FIELD 3247

Mr. QiHGLEY. So he could get 95 back.

The CHAIR3IAN. It seems pretty obvious, but why was it necessary to get 95 back in that fashion ?

Mr. QuiGLEY. Because that is what they had put up originally.

The Chairmax. They had gotten their property, had they not? They got $95,000 back plus the property is the way they were trying to figure it, is it not ?

Mr. QuiGLEY. No, because

The Chairman. They put up $95,000 to begin with, did they not?

Mr. QuiGLEY. That is right.

The Chairman. When got $57,000 in value from property they got a deed to, they had gotten $57,000 of the $95,000 back, had they not, already ?

Mr. QuiGLEY. Xo, they hadn't got it back. They took the $57,000 out of the $95,000.

The Chairman. He got it back in property values.

Mr. QuiGLEY. In equity in a property, yes. He didn't get it in cash.

The Chairman. He got back the value, the $57,000, in property, did he not, or got back property of that value in lieu of the $57,000 that he had deposited ?

Mr. QuiGLEY. That is correct.

The Chairman. It just looks like there are some shenanigans here.

Mr. QuiGLEY. He wanted $95,000 back. I couldn't give him the equity back. I could give him $95,000 back if he gave me $57,000 to cover tlie equity.

The Chairman. I cannot see him going to give you a check for $57,000 that day, and have you give him anotlier one for the $57,C00 plus the balance that you had on hand . It is a strange transaction.

Mr. QuiGLEY. He wanted the $95,000 returned to the union.

The Chairman. He wanted a $95,000 check back from you.

Mr. QuiGLEY. That is correct.

The Chairman. Because the money originally put up, the $95,000, was to purchase a home for the union and not a home for the in- dividuals, that is the truth about it, is it not ?

Mr. QuiGLEY. I don't know.

Senator Mundt. Let me ask you this: Did you have any private conversations on the telephone about the context of these two letters before you received that letter from them ?

]\Ir. QuiGLEY. I doubt it.

Senator Mundt. It would seem to me that you almost must have had. I do not see how you would write the kind of letter 3^011 did in response to tlieirs unless there had been some kind of conversation between you in advance.

IMr. QuiGLEY. I think their letter to me is dated the 14th of May and this is dated the next day.

Senator Mundt. What is that ?

Mr. QuiGLEY. This is dated the next day. That was dated the 14th.

Senator Mundt. I am talking about the conversation you might have had with them before they wrote you this letter asking for the $95,000. It would seem quite obvious to me you must have had some conversations with them.

ISIr. QuiGLEY. As far as I know I had no conversations with them before they came in witli this letter.

The Chairman. Did they bring this letter to you personally ?

3248 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. QuiGLEY. Yes, as I recall. Mr. Kleiiert brought the letter in.

The Chairman. He brought it in personally?

Mr. QuiGLEY. Yes, sir.

The Chairjman. You stamped it received on May 15, did you not ?

Mr. QuiGLEY. If that is the stamp that is on there, yes.

The Chairmax. I will let you look at it again.

Mr. QuiGLEY. That is all right, if it says the 15th.

Senator Mundt. At that time, in your office, you must have had some conversation with them before you dictated your reply, which was probably dictated and carried out by them in the office.

Mr. QuiGLEY. Possibly while he waited, yes.

Senator Mundt. You must have had some conversation about the kind of letter you would write back, because, obviously, if you were writing it without some conversation, your letter creates some extenu- ating circumstances for your title company which you would not want to get involved in, if you did not have the $95,000 that you said you had, if the books look wrong. I can understand their sajdng "Look, we are kind of in a jam, and you can help us out, if you will write the letter this way," then you might write the letter that way.

But I do not understand that a man in your capacity, getting a letter through the mail, would have answered it in quite the language that you used, because you reiterated a statement of falsehood which you knew was not correct, because you knew they did not have any parcel No. 1. You have so testified here today, and in that letter you refer to.

Mr. QuiGLEY. That was taken from this letter and referred to the parcels because he refers to them as parcels.

Senator Mundt. But it was also an implied recognition of the fact that 3^ou had $95,000 of the money which you did not have. A man living in this day and age, when you have income-tax collectors look- ing over both slioulders, is not about to write that kind of letter unless he has some understanding.

Mr. QuiGLEY. The income-tax man looked this matter over.

Senator Mundt. I would think so, on the basis of the two letters.

The Chairman. It seems pretty apparent that the purpose of send- ing over this last $57,000 in cashier's checks and writing you a letter like that, and getting a reply from you such as you wrote, that the whole purpose of it was to try to make it appear on the books of the union that the original $95,000 they had deposited with you had been returned, that that was the purpose of writing the letters that way. Is that not correct ?

Mr. QuiGLEY. That is possible, yes.

The Chairman. What else is possible, if that is not the whole reason for it?

Mr. QuiGLEY. They wanted to get $95,000 back into the union and this is the way they accomplished it.

The Chairman. That is right, they wanted to get $95,000 back into the union.

Mr. QuiGLEY. That is right.

Mr. Kennedy. Could I see the letters ?

Let me ask you this :

Receipt is acknowledged of your letter of the 14tli, wherein you enclose $57,000—

which you say —

IMPROPER ACTIVITIES IN THE LABOR FIELD 3249

represents a deposit on certain property for the United Textile Workers of America, identified as parcel No. 2, and which sum we are to hold until such time as a definite deal is closed for the purpose of a building for your organization.

Is that true? Did you do that? Did you hold that $57,000 as a deposit for the purchase of certain property ? Mr. QuiGLEY. No. Mr. Kennedy. For the purchase of a building for the union?

Mr. QuiGLEY. No,

Mr. Kennedy. Why did you write that ?

Mr. QuiGLEY. I am trying to find a reason for writing it. I could have answered it in 1952, but I can hardly do it now.

Mr. Kennedy. Did you not have an agreement with Klenert, didn't you have conversations with him, and didn't you agree to write tliis letter in order to fool the union and fool the trustees of the union ?

Mr. QnoLEY. I don't think there was any attempt to fool them. They knew 95 had been taken out, and they knew 95 went back.

Mr. Kennedy. You knew this was a union check that had been used for the purchase of personal property for Mr. Klenert and Mr. Valente, and then you lent credence to that by writing a letter such as this, which was completely misleading and false, Mr. Quigley.

Mr. QuiGLEY. It apparently hasn't misled anybody.

The Chairman. Sometimes attempts do not succeed.

Is that what you are saying?

Mr. QuiGLEY. 'Well, sometimes we do foolish things. Five years later they look foolish, but not at the time.

Senator Mundt. It seems to me, Mr. Quigley, that what we have here is quite an understandable situation, as far as you were concerned. You were doing business with these two men, unknown to you, you knew nothing about them, but they were pretty substantial clients or customers at the time. So they bring this letter over in hand and they discuss with you their problem, and together you work out the kind of reply that they wanted you to make. At the time 3'ou did not think there was anything improper about it, and if you were going to be helping a client, you would go along with them. Is that the way it happened ?

Mr. QuiGLEY. If I could have helped them, I would liave. That is my nature.

Senator Mundt. Surely. And the reason they brought it over in person was because they wanted to discuss with you the parts of the letter Avhich you cannot now understand about parcel No. 1, but they said "Loolv, if you will fix this up with the union, it will be all right" and you had no reason to suspect them, as you knew they were cus- todians of the union. After reading their letter in your office, you discussed with them the nature of your reply, you dictated the reply, you signed it, and they carried it back to the office and you thought liiat was about the end of it. Is that about what happened?

Mr. QuiGLEY. I would say yes.

Senator Mundt. Of course it is.

Mr. Kennedy. And based upon this request of Mr. Klenert and Mr. Valente, Mr. Quigley, you wrote a false letter, is that right?

Mr. QL^GLEY. I am not going to admit I wrote a false letter.

Mr. Kennedy. Well, is it true ?

Mr. QuiGLEY. As far as I know it is true, yes.

3250 IMPKOPER ACTIVITIES IN THE LABOR FIELD

Mr. Kennedy. Was that $57,000 used as a deposit for the building?

Mr. QuiGLEY. No, it was used to replace the $57,000 that was used to buy the houses.

Mr. Kennedy. Is it true, then, this letter ?

Mr. QuiGLEY. The letter is incorrect, then. It doesn't

Mr. Kennedy. The letter is not true, is it ?

Mr. QuiGLEY. Well, I am not going to say it is not true.

The Chairman. Let me ask you a question. This is your letter to them :

Receipt is acknowledged of your letter of the 14th wherein you enclose $57,000 in cashiers' checks, $30,000 drawn on the City Bank and $27,000 drawn on the Liberty National Bank.

That part of the letter is factually true, is it not ? Mr. QuiGLEY. Yes, sir. The Chairman. You had received it ? Mr. QuiGLEY. Yes. The Chairman (reading) :

Which, as you say, represents a deposit on certain property for the United Textile Workers of America, identified as parcel No. 2 —

and then there is this other part of the letter. That part up to there I assume is true —

and which sum we are to hold until such time as a definite deal is closed for the purchase of a building for your organization.

Is that part of the letter true ?

Mr. Qt^igley. That is not true, because we didn't hold the money.

The Chairman. You knew when you wrote the letter you were not going to hold the money, didn't you ?

Mr. QuiGLEY. Evidently, yes.

The Chairman. Therefore, an auditor reading this letter, auditing 1 he books of the company, would certainly have a right to assume that 3'ou had $57,000 of the union money in your possession, holding it ?

Mr. QuiGLEY. I did not know that that letter gave that import.

The Chairman. Can you get any other import from it ?

Mr. QuiGLEY. Wei], not now; no.

The Chairman. Thank you.

Mr. Kennedy. Then the second paragraph :

As per your request, we are enclosing herewith our check for $95,000 which was held by us as a deposit for certain property identified as parcel No. 1, and which transaction did not materialize.

That statement also is not true ?

Mr. QuiGLEY. It was originally put up for parcel No. 1. The $57,000 was taken out of that to settle parcel No. 2, which is the houses. I don't recall anything beyond that.

Mr. Kennedy. Is that statement true ?

Mr. QuiGLEY. If it is in the letter, it would have to be — I will have to let it go into the record.

The Chairman. You would agree at least that it is misleading as to facts, wouldn't you?

Mr. QuiGLEY. As it is now read, I would say yes.

The Chairman. As it was written then, would you say yes ?

Mr. QuiGLEY. It was not intended to mislead anybody. I can as- sure you of that.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3251

Tlie Chairman. I didn't say that. But it is misleading as a matter of fact now and then, now as you read it and then as you wrote it ?

Mr. QuiGLET. I didn't intend it that way.

The Ch^ukjmax. I don't know how you could have said it much stronger.

Mr. Kennedy. You might not have intended it, but it is misleading as to fact ?

Mr. QuiGLEY. If that is the way you construe it, it will have to be construed that way is all.

Mr. Kennedy. Did you write a rough copy of the letter prior to the time you sent this letter out ?

Mr. Quigley. I don't recall.

The Chairman. I hand you here what appears to be a letter, un- signed, dated May 15, 1952, addressed to United Textile Workers of America, bearing your name, typewritten, as president. I will ask you to examine this and see whether you identify this as a photostatic copy of a letter you prepared on the same date ?

(The document was handed to the witness. )

Mr. Quigley. I don't know whether this letter went out or whether the other letter returning the $95,000 is the one that did go out.

The Chairman. Do you know which one went out ?

Mr. Quigley. I am presuming it was the other one and not this, because that is

The Chairman. Did you not write that one first, and then they sug- gested that you rewrite the letter which you delivered to them, the one that we have been discussing?

Mr. Quigley. I don't know why the switch, whether it was at their suggestion or not. I don't know.

The Chairman. Do you know which letter you wrote first ?

Mr. Quigley. No, I wouldn't.

The Chairman. You don't knoAV which one you wrote first ?

Mr. Quigley. No.

The Chairman. Let's read this one, if you identified it. We will make it exhibit No. 15.

(The document referred to was marked "Exhibit No. 15" and fol- lows below.)

The Chairjian. Let's read it and see if we can unravel that aspect of it. This letter is dated May 15, 1952, United Textile Workers of America, 818 18th Street NW., Washington 5, D. C. Re lot 1, plot 18, and parcel Rock Creek Hills, Montgomery Countv, Md., MTC No. 2223, Klenert and Valente.

Gentlemen : I am returning check for .$95,000 which you deposited with the company as the deposit or downpayment on a building for your organization. Inasmuch as it appears tliat there might be some delay in closing tlie transac- tion, we thought it advisable to return these funds, and we will call on you when the transaction has been completed. Very truly yours,

Mutual Title Co..

Martin J. Quigley, President.

Can you tell us now, after hearing tlie letter read, which you wrote first?

Mr. Quigley. I would presume I wrote that one first and then did not use it.

The Chairman. And why did you change and write the other one in the form of misleading statements that it contains ?

3252 IMPROPER ACTIVITIES IX THE LABOR FIELD

Mr. QuiGLEY. Possibly at their suggestion. I don't know. The Chairman. At their suggestion ? Mr. QuiGLEY. Yes. The Chairman. Thank you,

Mr. Kennedy. This letter that you were intending to send out originally was equally misleading, was it not ?

Inasmuch as it appears that there might be some delay in closing the transac- tion, we thought it advisable to return these funds and we will call upon you when the transaction has been completed.

That is not in accordance with the facts at all, is it ?

Mr. QuiGLEY. No. My main objective was to get the $95,000 back to the union which they requested me to get back.

Mr. IvENNEDY. And then the reference here as to Rock Creek Hills. Rock Creek Hills are the two pieces of property of Mr. Klenert and Mr. Valente, is that right ?

Mr. QuiGLEY. We only had one case. We didn't have parcel No. 1 identified. We had no way to identify it, so we threw it into one case number.

Mr. Kennedy. And that refers to the two pieces of property pur- chased by Mr. Klenert and Mr. Valente ?

Mr. QmoLEY. That is how we could identify the transaction.

Mr. Kennedy. Isn't it a fact that from the beginning, the $95,000 was going to be used to purchase these two homes for Mr. Klenert and Mr. Valente, that ultimately it was decided to use only $57,000 of it, decided on May 5, 1952, and subsequently, 10 days later, it was decided to handle the transaction in a different way, and return the $95,000, and get a new $57,000 back, and that you were a part of all of this, that you knew about it ?

Mr. QuiGLEY. It was not 10 days later. The settlement was made on the 5th of May.

Mr. Kennedy. And these moneys were returned on May 15?

Mr. QuiGLEY. That is right.

Mr. Kennedy. You knew about this, and knew it was a subterfuge to hide this from the union members, did you not ?

Mr. QuiGLEY. This did not arise until the dates on those letters, which was 10 days later. It had nothing to do with the original set- tlement of the houses.

Mr. Kennedy. Wasn't it understood right from the beginning that the $95,000 was going to be used to purchase 2 homes for Klenert and Valente, that this idea of buying a building for the union had no basis in fact ? Isn't that correct, Mr. Quigley ?

Mr. QuiGLEY. If they had an idea to use the $95,000 to purchase the houses, they must have changed their minds. I don't know.

Mr. Kennedy. There was never any building identified, you never took them to any building which they had put this money down for as deposit, is that right ?

Mr. QuiGLEY. That is correct.

(At this point, the chairman withdrew from the hearing room.)

Mr. Kennedy. Wasn't it understood, and you were a part of it from the beginning, that the $95,000 of union funds was going to be used to purchase these 2 pieces of property ?

Mr. QuiGLEY. It was not used to buy— they are the ones that would say whether it was to be $95,000 or $57,000, not me. I could handle it either way they wanted.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3253

Mr. Kennedy. But the $95,000 of union funds was going to be used to buy these 2 pieces of property for Mr. Klenert and Mr. Valente?

Mr. QuiGLET. They deposited $95,000. Whether it was to be used, the entire amount, to buy the houses, I don't know. They would have to answer that.

Mr. Kennedy. You knew they wanted to hide these transactions, and that is why you w^rote these letters ; is that correct ?

Mr. Quigle'y. I knew they wanted to get the money back into the union.

Mr. Kennedy. And they did not want anyone to know how the money had been used, or how this new $57,000 was to be used ?

Mr. QuiGLEY. Whether they wanted anybody to know on that, I don't know. They will have to answer.

Mr. Kennedy. They must have told you that, or you wouldn't have written that kind of a letter ?

Mr. QuiGLEY. They must have told me this way, and that is the way I did it. ■

Mr. Kennedy. And didn't they tell you and didn't you know that the purpose of it was to hide the transactions ?

Mr. QuiGLEY. I am not the guardian of their conscience.

Mr. IvENNEDY. I am not asking you if you are the guardian of it. I am asking : Isn't it a fact that you knew that these letters were to be used to hide the transaction ?

(At this point the chairman entered the hearing room.)

Mr. QuiGLEY. I didn't consider it any of my business. If they wanted to get the money back into the union and use this subterfuge to do it, that was up to them.

Mr. Kennedy, Mr. Quigley, I think it is very much your business. You were writing false letters to an organization and letters you knew to be false. You can't say it wasn't any of your business.

Mr. QuiGLEY. It wasn't any of my business. If I made it my busi- ness, thev would have told me promptly that it was not.

Mr. Kennedy. You would have lost a transaction, you would have lost a business deal.

Mr. QuiGLEY. I am still in business. That wouldn't have broken me.

Mr. Kennedy. But you would have lost this transaction.

Mr. QuiGLEY. They couldn't recall the deal then. The settlement was made on May 5. _

Mr. Kennedy. Have you received any business from the union since this transaction ?

Mr. QuiGLEY. What kind of Inisiness do you mean ?

jMr. Kennedy. Any kind of business ?

Mr. QuiGLEY. Title business ?

Mr. Kennedy. No, just any kind of business.

Mr. Quigley. I have written some insurance for them; yes.

Mr. Kennedy. For whom ?

Mr. Qlt;gley. For the Textile Workers of America, and some auto- mobile and fire insurance for Mr. Klenert.

Mr. Kennedy. And had you wi-itten any insurance, insurance busi- ness, for the union or for Mr. Klenert prior to this transaction ?

Mr. QuiGLEY. ISTo. I never met them until this transaction.

Mr. Kennedy. How much does that insurance business amount to that vou have written for the union since this transaction ?

3254 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. QuiGLEY. I don't know.

Mr. Kennedy. When was the first arrangement made so that you could have the insurance ?

Mr. QuiGLEY. In this particular settlement, I arranged to have the equity covered for fire and extended coverage.

Mr. Kennedy. What about the union's business ?

Mr. QuiGLEY. Some time later, in maybe January or February, Mr. Klenert called me and asked me if I wasn't an insurance broker, and I told him yes, that I had written the insurance on his house. He said he was discharging the broker in this fidelity bond matter, and he could have me named as broker.

My name was evidently submitted to the Continental Casualty Co., and I have collected commissions from them for 4 years.

Mr. Kennedy. Mr. Chairman, we cannot finish with Mr. Quigley at this time. He took part in a later transaction. If it is possilDle, could we put the checks in now ?

This is the $57,000. _ ^ ^

The Chairman. The Chair observes the time. We would like to quit by 5 o'clock. Will that permit us to do that ?

Mr. Kennedy. If we put these checks in, we can quit by 5 o'clock.

The Chairman. Mr. Quigley, apparently we cannot conclude with you this afternoon, so you will return tomorrow afternoon at 2 o'clock.

Mr. Kennedy. Could he identify these checks?

We will put the checks in with another witness, the cashier's checks from the banks.

The Chairman. Mr. Quigley, I hand you 4 photostatic copies of checks, all dated May 15, 1952, 2 of them in the amount of $7,000 each, 1 in the amount of $8,000 and the other in the amount of $5,000, drawn by Wales H. Jackson on the Libertv National Bank of Washington, D.C.

They are actually bank drafts instead of checks. They aggregate $27,000. I ask you to examine the photostatic copies of the bank drafts and see if you identify them. When you have examined them, if you identify them and so state, then explain what they are and what your connection with them is.

(Documents were handed to the witness.)

Mr. Quigley. I think these are the $27,000 referred to in that letter.

The Chairman. Those are the checks you received to make up the $27,000 referred to in the letter as from the Liberty National Bank ?

Mr. Quigley. They are cashiers checks on the Liberty Bank: yes.

The Chairman. Those may be identified as exhibit No. 16-A, B, C, and D.

(The documents referred to were marked "Exhibits Nos. 16-A through 16-D," for reference and will be found in the appendix on pp. 3526-3529.)

The Chairman. The Chair now hands you 3 checks, photostatic copies of checks, dated May 14, 1952 ; 1 in the amount of $10,000, 1 in the amount of $7,000, 1 in the amount of $13,000. They are cashiers checks, drawn on the City Bank of Washington, D. C.

I will ask you to examine these checks, photostatic copies of checks, and see if you identify them. If so, state what they are and your connection with the transaction.

(Documents were handed to the witness.)

IMPROPER ACTIVITIES IN THE LABOR FIELD 3255

Mr. QuiGLEY. These are the checks that are mentioned in that letter, totaling $57,000.

The Chairman. Those total $30,000, is that correct ?

Mr. QuiGLEY. That is right. These are $30,000 and the others are $27,000, making a total of $57,000.

The Chairman. These will be made exhibit No. 17-A, B, and C.

(The documents referred to were marked "Exhibits Nos. 17-A through 17-C" for reference and will be found in the appendix on pp. 3530-3532.)

The Chairman. The checks that were made exhibit 16 that you ex- amined totaled $27,000 and these checks you have just examined, ex- hibit 17 in the record, are the checks that made up the $57,000 which you received on May 15?

Mr. QuiGLEY. Yes, sir.

Mr. Kennedy. Mr. Chairman, I wonder if we can get these other documents in.

Did you make up a second deed of trust on Mr. Klenert's property ?

Mr. QuiGLEY. Yes.

Mr. Kennedy. And Mr. Valente's, also?

Mr. QuiGLEY. Yes.

Mr. Kennedy. Who took the second deed of trust?

Mr. QuiGLEY. We created those trusts for them for the purpose of their using them as collateral to borrow money.

Mr. Kennedy. Who took the trust?

Mr. QuiGLEY. They did.

Mr. Kennedy. Who was beneficiary of the trusts?

Mr. QuiGLEY. The beneficiary named is a straw party who endorsed the notes witliout recourse.

Mr. Kennedy. Was it an employee of yours?

Mr. QiHGLEY. An employee of mine; yes.

Mr. Kennedy. She took the trust?

Mr. QuiGLEY. No. She was merely a conduit to title. She en- dorsed it without recourse and handed it to them. It was their prop- erty to use as collateral and do with as they saw fit.

Mr. Kennedy. The records of Montgomery County would indicate there was a second trust?

Mr. QuiGLEY. That is right. If I recall it is $15,000 on the Klenert house and $10,000 on the Valente house.

Mr, Kennedy. When, in fact, there was no second trust; is that right?

Mr. QuiGLEY. There was a second trust.

Mr. Kennedy. Owed to himself ?

Mr. QuiGLEY. If I own a piece of real estate and I want to put a trust on it to take it out and use it as collateral, that is perfectly legi- timate business, and it is done every day.

Mr. Kennedy. Anybody going through the records of Montgomery County would assume that Klenert and Valente did not have nearly the money in this property that the records would indicate; is that right ?

Mr. QuiGLEY. That is right.

The Chairman. I hand you what purports to be a photostatic copy of the deed of trust. Will you examine it and see if this is the deed of trust about which you have been testifying?

3256 IMPROPER ACTIVITIES IN THE LABOR FIELD

(A document was handed to the witness. )

Mr. QuiGLEY. Yes; that is a trust for $15,000 on the Klenert prop- erty. I think you will find one for ten on the Valente property.

The Chairman. As I understand, it is made out to an employee in your office ?

Mr. QuiGLEY. That is correct.

The Chairman. And immediately thereafter endorsed by her back to the maker of the mstrument ?

Mr. QuiGLEY. That is right.

The Chairman. So, therefore, there was actually no deed of trust in the sense that the maker of that deed of trust owed that money on it?

Mr. QuiGLEY. If I own a piece of property, I can put a trust on it and go out and borrow money on it. It is my note, my property.

The Chairman. I understand that, but the minute she endorsed that paper back to the maker of it, there was no actual debt or obliga- tion, unless vou can sav, "I owe mvself so much money." Is that not true?

Mr. QuiGLEY. He has it in his hand to negotiate the note at any time. He can go out and borrow $10,000 on it, $5,000, paj' it off and get the note back.

The Chairman. But until he does that, there is actually no obliga- tion there, is there ?

Mr. QuiGLEY. No, there would not be any obligation until he hypo- thecated the note.

The Chairman. That may be made exhibit No. 18.

(The document referred to was marked "Exhibit No. 18" for refer- ence and may be found in the files of the select committee.)

The Chairman. Are there any further questions of this witness ?

I will hand you what purports to be the original of a note for $10,000. I present it to you and ask you to examine it and state if you iden- tify it.

(A document was handed to the witness.)

Mr. QuiGLEY. Yes. This is a note for $10,000 Mr. Valente put on at the same time Mr. Valente put on the other trust.

The Chairman. That represents a transaction on the other piece of property, the Klenert, or is that Valente ?

Mr. QuiGLEY. This is Valente.

The Chairman. The one that you have in your hand now represents Valente ?

Mr. QuiGLEY. That is right.

The Chairman. How was that handled ? That is a note made out, is it not ?

Mr. QuiGLEY. Yes. That note was endorsed to somebody by this straw party, Laida KJreuz, and was evidently negotiated. The party who bought it or loaned him the money is the assignee of the note. That note has actually been negotiated.

The Chairman. That note has actually been negotiated ?

Mr. QuiGLEY. The endorsements would indicate that; yes sir.

The Chairman. That may be made exhibit No. 19.

(The document referred to was marked "Exhibit No. 19" for refer- ence and will be found in the appendix on pp. 3533-3535.)

IMPROPER ACTIVITIES IN THE LABOR FIELD 3257

Senator Mundt. What I have in my hand is the $15,000 from Mr. and Mrs. Klenert to M. Parker Xohan and Martin J. Quigley. Are those two people employees in your office ?

Mr. Quigley : I am Martin J. Quigley, and Parker Nolan was a real- estate broker. We use deeds of trust in this jurisdiction.

Senator Muxdt. You said they gave the name of a strawman.

Mr. Quigley. That is the payee on the note, Laida Kreuz.

Senator Mundt. This is recorded, apparently.

Mr. Quigley. In Montgomery" County; yes, sir.

Senator ]Mundt. What would be the purpose of recording it if it had not been negotiated \

Mr. Quigley. Well, if you take tlie note out to borrow money on it, you must show that it is recorded. You must show that it is a good second lien on the property.

Senator Mundt. You record it before you actually make a loan ?

Mr. Quigley. Before they negotiate it; yes, sir. The practice here is, it is always the papers go on record first and are run down, to see that there are no intervening liens, judgments, tax liens, or anything like that, and then you run the record through this instrument and then you are in a good position to certify it is ni a good trust.

Senator Mundt. Is this a customary practice, to do it this way?

Mr. Quigley. Yes, sir; that is the regular practice. We create second trusts eA-ery day. A man comes in to us and wants to borrow

Senator Mundt. I mean in exactly this manner, Avhere it is assigned back without recourse ?

Mr. Quigley. Yes, sir.

Tlie Chaikman. Mr. Quigley, we are going to i-ecess until 2 o'clock tomon-ow afternoon. It will not I)e necessary for you to be back at that time, but you will remain under subpena subject to call when we do need you before we conclude this series of hearings.

Mr. Quigley. I would appreciate it if I could remain in my office subject to call. I will be here within 30 minutes from the time you want me.

The Chairman. The committee will now recess until 2 p. m., to- morrow afternoon.

(Whereupon, the hearing in the above-entitled matter was recessed at 4 : 40 p. m., to reconvene at 2 p. m., of the following day.)

(Members of the select committee present at the taking of the recess : Senators McClellan, Mundt, and Curtis.)

INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD

THURSDAY, JULY 18, 1957

United States Senate, Select Committee on Improper Activities

IN the Labor or IVIanagement Field,

Washington, D. C.

The select committee met at 2 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 com- mittee presiding.

Present: Senator John L. McClellan, Democrat, Arkansas; Sena- tor Irving ]M. Ives, Kepublican, New York ; Senator John F. Kennedy, Democrat, Massachusetts; Senatoi- Barry Goldwater, Republican, Arizona; Senator Karl E. Mundt, Kepublican, South Dakota; Senator Carl T. Curtis, Eepublican, Nebraska. Also i)r(-sent: Robert F. Ken- nedy, chief counsel to the select committee: Ralph Mills, assistant counsel; Morton E. Henig, investigator; Alp house F. Calabrese, in- vestigator ; Ruth Young Watt, chief clerk.

(Membeis of the committee present at the convening of the session: Senators McClellan, Ives, Kennedy, Goldwater, Mundt, and Curtis.)

The Chairman. The committee w411 be in order.

We will resume the hearings that we recessed yesterday in the Textile Workers of America inquiry.

Proceed, Mr, Counsel,

Mr. Kennedy, I would like to call Mr. Calabrese,

The Chairman. Mr. Calabrese, you have been previously sworn, and you may proceed, Mr. Kennedy.

(At this point, Senator Keunedy withdrew from tlie liearing room.)

TESTIMONY OF ALPHONSE F. CALABRESE

Mr. Kennedy, You have been working and making an investiga- tion of the United Textile Workers of America, have you not, a staff investigation?

Mr. Calabrese. Yes, jointly Avith Mr. Ralph INIills of our staff, and Morton Henig, that is correct.

Mr. Kennedy, And that investigation has been going on for some 10 weeks, is that right '?

Mr. Calabrese. Possibly three months, that is correct.

Mr. Kennedy, Now, you have made an investigation and study of some of the bank accounts and some of the checks that we are in- terested in, is that right ? i

Mr. Calabrese. That is correct. -l\m<J :\{i ; •>friii:! r;i;v? - 00,oC$ . 3259

3260 IMPROPER ACTIVITIES IX THE LABOR FIELD

Mr. Kennedy. And you have some of those accounts in front of you ?

Mr. Calabrese. I do.

Mr. Kennedy. Specifically, do you have the records concerning the original $95,000 that was used for the alleged deposit for the purchase of a building for the textile union?

Mr. Calabrese. Yes, sir, I do.

The Chairman. From what records are you testifying, Mr. Cala- brese '? Where were they procured ?

Mr. Calabrese. I have a transcript of the ledger account of the United Textile Workers of America from the period 1949 to 1953, that is the time when the United Textile Workers of America had their accounts with the City Bank.

I have also, I might add, when I testified yesterday, no microfilm made of the checks drawn on this account. There are none avail- able, and, of course, the union themselves, the officials of the union have advised that the records during 1952 have been destroyed.

Now, I have

Mr. Kennedy. Specifically, also, you have the minutes of one of the meetings, or some of the meetings of the textile union during this period ?

Mr. Calabrese. That is correct.

The Chairman. Ai-e those minutes obtained from their files, and from their records ?

Mr. Calabrese. From the files of the United Textile Workers of America, that is correct.

The Chairman. Now, the first minutes that we are interested in is April 25, 1952, is that correct ?

Mr. Calabrese. That is correct.

The Chairman. What does that minute state, in substance ?

Mr. Calabrese. It is located on pages G and T and it is, very briefly, a resolution by the executive council of the United Textile Workers of America, at a meeting at the Sherry-Frontenac Hotel in Miami Reach, April 25, 1952. The resolution states as follows :

In line with tlie above, the following resolution was adopted by unanimous vote of the council ; that the international secretary be authorized to convert into cash $95,000 worth of defense bonds now entitled to the United Textile Workers of America, for the purpose of purchasing a building for the organiza- tion, and be it further resolved that pending the conversion into cash of said defense bonds, that the secretary-treasurer be authorized to negotiate a loan from the City Bank in the amount of $95,000.

The Chairman. That document may be made exhibit 20.

(The document referred to was marked "Exhibit 20" for reference and will be fovmd in the appendix on p. 3536.) f

The Chairman. I believe that you read all of it into the record.

Mr. Kennedy. Now, was there, subsequently on May 1, 1952, a loan made of $95,000?

Mr. Calabrese. That is correct.

Mr. Kennedy. From the City Bank ?

Mr. Calabrese. That is correct, to the United Textile Workers of America.

Mr. Kennedy. That money was subsequently used as a downpay- ment for these two homes, is that right, for the purchase of these homes ?

Mr. Calabrese. $95,000 the next day was turned over to Mr. Quig- ley, as he testified.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3261

Mr. Kennedy. Aiid $57,000 of that was used for the payment on these two homes of Mr. Klenert and Mr. Valente ?

Mr. Calabrese. Mr. Quigley so testified.

Tlie Cfiairzmax. They borrowed, or the union borroAved this $95,000 from the bank ?

Mr. Calabrese. That is correct.

The Chaikisian. It is a union loan ?

iSIr. Calabrese. It is a union loan.

The CiiAiRMAx. That is the same $95,000 that was deposited with Mr. Qui^ley ?

Mr. Calabrese. It was $95,000 deposited in their account and then a check was drawn.

The Chairman. $95,000 was deposited in whose account ?

Mr. Calabrese. The United Textile Workers of America account.

The Chairman. It was deposited, the money procured by the loan?'

JNIr. Calabrese. That is correct.

The Chairman. It was deposited in the textile union's account, and then what happened to it ?

Mr. Calabrese. On tlie followiuir day, there is a debit of $95,000 to that account. "We do not have the clieck, but ]Mr. Quigle}', j'esterday 111 his testimony, put into evidence a deposit slip showing that Mr. Quigley put into the trustee account of the ^Mutual Title Co. $95,000 obtahied from the I'nited Textile Workers of America.

The Chairmax. How many days was that after the loan was ob- tained and the deposit made to tlie union ?

Mr. Calabrese. That is 1 day.

The CifAiRMAX. One day t'()il(>\viii<x^

Mr. Calabrese. Yes, sir.

The Chairmax. All right; I just Avanted to get the record com- pleteh-^ clear on it.

Mr. Kenxedy. Xow, subsequently, in ]\Iay of 1952, Avas there an- other loan procured of $100,000 ?

Mr. Calabrese. I am sorry.

Mr. Kennedy. Subsequently, on May lo, 1052, was there another loan for $100,000 secured from a bank ?

Mr. Calabrese. Yes; that is correct.

Mr. Kennedy. Fi-om the Libert}- National Bank ?

Mr. Calabrese. That is correct.

Mr. Kennedy. Would you tell us what happened to that ?

That is Maj 18 ?

Mr. Calabrese. Yes.

Mr. Kennedy. That is 13 days after this other loan was secured?

Mr. Calabrese. That is correct.

Mr. Kennedy. Is that right ?

Mr. Calabrese. Yes.

Mr. Kennedy. The first one was May 1 from the City Bank and this is May 13 from the Liberty National Bank.

Mr. Calabrese. Yes, sir. If I might state, the records of the Liberty National Bank which were supenaed indicated that on JNIay 8, 1952, under the name of United Textile Workers of America, a loan was applied for in the amount of $100,000, interest rate 4 percent, time 60 days, and to be used for "purchase of new quarters but old building."

This was an unsecured loan backed up by over $100,000 worth of

89330— 57— pt. 9 4

3262 IMPROPER ACTIVITIES IN THE LABOR FIELD

additional series F Government bonds, which were owned by the union.

The Chairman. It was not unsecured, but it was secured by the bonds ?

Mr. Calabrese. It is considered by the bank unsecured. However, they had series F bonds they were going to redeem for the union and then apply to the return of the loan.

The Chairman. So it was actually, in eilect, a cashing in of tlie bonds, is that what it amounted to ?

Mr. Calabrese. That is correct. Now, accompanying this applica- tion is a certification by the president of the union, Mr. Anthony Valente, in essence, stating that he had authority to make the loan.

The Chairman. To borrow the money, you mean ?

Mr. Calabrese. Yes, to borrow the money, on the basis of an Octo- ber 1946 executive council meeting, and resolution.

So that what you have is a resolution of April 25, 1952, allowing the UTWA to make a loan of $95,000 from the City Bank and then you have this subsequent loan which was finally made on May 13, on which Mr. Valente based authority for making this loan, on the Octo- ber 1946 resolution of the executive council.

The Chairman. They only had one resolution, and that resolution specified $95,000?

Mr. Calabrese. For the purchase of a new headquarters.

The Chairman. For the union ?

Mr, Calabrese. Yes, sir.

The Chairman. And that $95,000 was borrowed ?

Mr. Calabrese. That is correct.

The Chairman. And then, subsequently, just a few days later, Valente takes the same resolution

Mr. Calabrese. An earlier resolution, October 19, 1946,

The Chx^^irman. In October of 1946, and he takes that resolution and borrows another $100,000 ?

Mr, Calabrese. That is correct.

The Chairman. Both of them ostensibly for the same purpose ?

Mr, Calabrese. That is correct.

The Chairman. And the first one was not used for that purpose.

Mr, Calabrese, No,

The Chairman. It was used to buy residences for the two officers ?

Mr. Calabrese. That is correct.

The Chairman. Now we have it straight.

Mr. Kennedy. We want to get into how this other second loan of $100,000 was used. Do you have some evidence and information on that?

Mr. Calabrese. I have a transcript of the ledger account of the union's account at the Liberty National Bank.

The Chairman. Just a moment. Let us make these documents from which you have read there, exhibits. You have read the per- tinent parts of them, but the documents will be made exhibits 21 and 22, the two documents the witness has read from, for reference,

■ (The documents referred to were marked "Exhibits 21 and 22," for ^eferenc^'^- and will be found in the appendix on pp, 3537-3538,)

The Chairman, I am anxious to keep the record straight,

Mr. Calabrese. The next documents which I have, four sets of copies obtained from the Liberty National Bank, show the applica-

IMPROPER ACTIVITIES IN THE LABOR FIELD 3263

tion card of the United Textile Workers of America, and with the signature of Lloyd Klenert, indicates the account was opened on May 13, 1952, and closed on June 9, 1953, approximately 1 year. The ac- count was opened with the $100,000 which was borrowed on May 13, 1952. Thereafter, the account is debited $30,000 on May 15, 1952. It is also debited in the amount of $7,000, $5,000, $7,()0(), and $8,000, on May 15, making a total of $57,000. ;

The Chairman. You mean checks were drawn against the account, or withdrawals to the amounts you have spoken of ?

Mr. Calabrese. That is correct.

The Chairman. Making a total of $57,000 ?

Mr. Calabrese. $57,000; yes, sir. Now, with regard to the first $30,000, the City Bank account of the United Textile Workers of America indicates a deposit on May 14, 1952, of $30,000.

Mr. Kj:nnedy. So the money came out of the Liberty National Bank, and they got the loan on May 13 and there was an immediate with- drawal of $30,000, and of $27,000, making a total of $57,000?

Mr. Calabrese. It was placed in the City Bank.

Mr. Kennedy. So $30,000 was then transferred over to the City Bank?

Mr. Calabrese. That is right. With that $30,000, the checks which were offered in evidence yesterday which Mr. Quigley identified, $30,000 worth of cashier's checks were purchased by Mr. Anthony Yalente, from the City Bank.

The Chairman. Out of union money ?

Mr. Calabrese. Yes. The union account, the City Bank account is debited for $30,000, and then Mr. Valente buys $30,000 worth of cash- ier's checks, and it is union money, as I will subsequently show.

The Chairman. All right.

Mr. IVENNEDY. As you have taken it up so far it came out of the Liberty National Bank and went into the City Bank, and then on that same date there were $30,000 worth of cashier's checks pur- chased ; is that right ?

Mr. Calabrese. That is correct.

Mr. Kennedy. And those cashier's checks were used for the down- payment or part of the downpayment or part of the $57,000 that was given to Quigley ?

Mr. Calabrese. On May 14 ; that is correct.

Mr. Kennedy. Now, what you have to do yet is to show the con- nection between that $30,000 of cashier's checks and the $30,000 that was deposited ; is that right ?

Mr. Calabrese. Well, as Mr. Quigley

Mr. Kennedy. That is what you have to fill in ?

Mr. Calabrese. That is correct. In other words

Mr. Kennedy. And you will do that ?

Mr. Calabrese. That is right.

Now, with the $27,000, which was also withdrawn from the Liberty National Bank, we find on May 15, that Mr. Klenert purchased 4 bank drafts, on the Chase National Bank of New York, and they were in the amounts of $8,000, $7,000, $7,000, and $5,000, totaling $27,000, and thereby making a total amount of $57,000 which Mr. Valente and Mr. Klenert obtained through cashiers checks and bank drafts during May. The reverse sides of all of the cashier's checks and the bank

3264 IMPROPER ACTIVITIES IX THE LABOR FIELI)

drafts show with regard to Mr. Valente that he endorsed it, and the- second endorsement of deposit to the credit of Mutual Title Co., trustee- account.

The bank drafts which Klenert purchased show Mr. Klenert's sig- nature, and deposit to the credit of the Mutual Title Co., trustee account. So that all $57,000 found its way back to Mr. Quigley, of the Mutual Title Co.

Mr, Kennedy. As you have discussed before, the records of the union have been destroyed, is that right ?

Mr. Calabrese. The records during the pertinent period, yes.

The Chairman. They are reported to you to have been destroyed?

Mr. Calabrese. We have been so advised, yes.

The Chairman. By union officials ?

Mr. Calabrese. Yes, sir.

Mr. Kennedy. And the bank did not keep Recordak check.

Will you show how you were able to connect these checks together,, with the union funds, the bank drafts and the cashiers checks with the $57,000 from this account of $100,000 ?

Mr. Calabrese. Mr. Eric Janssen, the auditor of the United Textile Workers of America, prepared an audit report for 3 months, April through June 30, 1952. In connection with this audit report, he prepared a supplement which broke down certain organizational- expenses attributed to the union.

I have here in my hand a copv of this supplement which shows- that the $30,000 drawn to cash on" May 13 from the UTWA account, attributed to certain situations such as the Canadian situation. New Jersey situation, and North Carolina situation, were then used to pur- chase cashier's checks issued in like amounts to Anthony Valente, en- dorsed by Anthony Valente, and endorsed and deposited by the Mutual Title Co. That ties that $30,000 into that, according to Mr. Janssen.

NoAv another breakdown, showing the expenditures tied in with the Liberty National Bank

Mr. Kennedy. Just on that, this is an account by the auditor of what the records indicated at that time ?

Mr, Calabrese. Yes, sir.

Mr. IvENNEDY. That there was a check made out for $13,000 which was for the Canadian situation ?

Mr. Calabrese. Made out to cash ; yes, sir.

Mr. I^NNEDY. There was a check for cash made for $7,000 to cover the New Jersey situation '?

Mr. Calabrese. That is right.

Mr. KJENNEDY. And there was another check for $10,000 to cover the North Carolina situation ?

Mr. Calabrese. That is correct.

Mr. Kennedy. He then states that he made a study of those checks, which were in existence at the time of this report, and finds the cashier's checks were then purchased with these checks, is that right ?

Mr. Calabrese. That is correct.

Mr. Kennedy. And that they were endorsed by Anthony Valente,. and endorsed over to the Mutual Title Co., is that right ?

Mr, Calabrese. Yes, sir.

Mr. Kennedy. Those are the checks that were discussed here by Mr. Quigley yesterday ?

Mr. Calabrese. Yes, that is correct.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3265

The Chairman. Do I understand that there are false entries in the ledger there as to how this money was used ?

Mr. Calabrese. That is correct.

The Chairman. In other words, they show when they charge it on the ledger, to account for the money to the union, they show it was used for one purpose whereas it was actually used to purchase their homes ?

Mr. Calabrese. That is correct.

Mr. Kennedy. Now we get into the bank drafts, the purchase of the bank drafts.

Mr. Calabrese. In the same supplement, under the heading of Liberty National Bank, it shows on May 14, checks drawn on the UTWA account to cash in the amounts of $T,000, $8,000, $7,000, and $5,000, or a total of $27,000, attributed to organizing expenses in New York, organizing expenses in Pennsylvania, and organizing expenses in the Midwest, and organizing expenses in iNIassachusetts.

Under his remarks, he indicates that drafts were issued at the Liberty National Bank in like amounts to Lloyd Klenert, endorsed by Lloyd Klenert, and then endorsed and deposited by the Mutual Title Co.

Mr. Kennedy. So these checks of the union, the $27,000 in checks, charged to organizational expenses in New York, Pennsylvania, the Midwest, and Massachusetts, were then taken, and there were bank drafts purchased in the New York Chase National Bank. Those bank drafts, then, went down and were used as a downpayment on this home, is that right, or a payment on this home ?

Mr. Calabrese. Yes, sir. It turned out Mr. Quigley used it for the payment.

Mr. Kennedy. Mr. Quigley gave his explanation of what that $27,000 amounted to, is that right ?

Mr. Calabrese. That is right, the 27 and the 30.

Mr. I^nnedy. So the total for these 2 transactions was $57,000?

Mr. Calabrese. That is correct.

Mr. Kennedy. And that was used to purchase the equity in the two homes for Mr. Yalente and Mr. Klenert ?

Mr. Calabrese. That is right.

Mr. Kennedy. And they assumed the mortgages, is that right?

Mr. Calabrese. They assumed the mortgages.

I might explain, it was explained vesterclay but it might be well to point out at this time, that by May "^13, May 14, or May 15, $57,000 had already been used of the $95,000 for the settlement of the homes of ]\Ir. Klenert and Mr. Valente on May 5, 1952. That was the settlement date.

Mr. Kennedy. That was the original $95,000 ?

Mr. Calabrese, That is right. Now this $57,000 is being replaced on ]May 14 to take care of the other $57,000 that was put into the settle- ment of the homes.

Mr. Kennedy. See if I can understand vou.

The $95,000 that was originally paid back on May 5, 1952

Mr. Calabrese. May 15.

Mr. Kennedy. No, the original $95,000. May 2, was it ? The origi- nal $95,000 was paid May 2, 1952, to Mr. Quigley ?

Mr. Calabrese. That is correct.

Mr. Kennedy. That was charged to the building fund on the union books ?

3266 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Calabrese. That is correct.

Mr. Kennedy. Then on May 5 or May 6, they took $57,000 of that and used it to complete the deal ?

Mr. Cat.abrese. That is correct.

Mr. Kknnedy. So the union at that point was out $95,000, but $57,000 of it actually had been spent for these two houses ?

Mr. Calabrese. Right.

Mr. Ivennedy. So they went through to May 15. Then, according to this exchange of letters, they wanted the money back, the whole $95,000?

Mr. Calabrese. That is right.

Mr. Kennedy. Of course, by that time, Mr. Quigley already spent $57,000, is that right?

Mr. Calabrese. Right.

Mr. Kennedy. So he could not give the whole money back unless they gave him $57,000 ?

Mr. Calabrese. That is true.

Mr. Kennedy. He already spent it. He sent them a check for $95,- 000 but they sent him a check for $57,000. The second $57,000 was charged to organizational expenses, is that right?

Mr. Calabrese. That is correct.

Mr. Kennedy. So Mr. Quigley ended up exactly the same. The union ended up with a cl)^rge to organizational expenses rather than a building fund ?

Mr. Calabrese. Right.

Mr. Kennedy. If it was continued on the books as a building fund, as a deposit on the building fund, ultimately Mr. Klenert and Mr. Va- lente would have to account for it either by producing a building or having the money returned, is that right ?

Mr. Calabrese. It would be that way, yes.

Mr. Kennedy. But if it was charged to organizational expenses, they could argno t]iat the money had been spent during that period of time, is that right t

Mr. Calabrese. Yes.

Mr. KJENNEDY. So it wouldn't be necessary to account for that money as it would be if it was charged to a building fund, where either they had to produce the building or produce the $95,000 ?

Mr. Calabrese. That is correct.

(At this point, Senator McClellan withdrew from the hearing- room. )

Senator Ives. Are there any comments to be entered ?

Mr. Kennedy. Are there some exhibits, some documents that you referred to ?

Mr. Calabrese. Do you want the audit report and the supplement ?

Mr. Kennedy. I think just the supplement.

Senator Ives. That will be made exhibit 24.

Mr. Calabrese. Next is the application card, the deposit slip and the ledger card of the Liberty National Bank.

Senator Ives. That will be exhibit 2?>.

( Documents referred to were marked "'Exhibits 23 and 24- ' for refer- ence and will be found in the appendix on pp. 3539-3543.)

(At this point. Senator McClellan entered the hearing room.)

Senator Ives. Is that all, Mr. Counsel, of this witness ?

IMPROPER ACTIVITIES IN THE LABOR FIELD 3267

Mr. Kennedy. On this supplement to the auditor's report, there is another $17,500, is that right, for the period May 27 through June 17?

Mr. Calabrese. Yes, that is correct.

Mr. KJENNEDT. That was in addition to the $57,000, there is another $17,500, and that is also charged to organizational expenses of various amounts ?

Mr. Calabrese. That is correct.

Senator I\'es. Are there any further questions of the witness ?

Does any member of the committee have any question to ask of the witness ?

If not, the witness is excused.

Call the next witness, please, Mr. Counsel.

Mr. Kennedy. Mr. Klenert.

(Members present at this point: Senators McClellan, Ives, Gold- water, Mundt, and Curtis.)

Senator Ives. Mr. Klenert, you do solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God ?

Mr. Klenert. I do.

TESTIMONY OF LLOYD KLENERT, ACCOMPANIED BY COUNSEL, JAMES M. McINERNEY

Senator Ives. Is the counsel also going to be in this ?

You might as well swear, too.

What is your name?

Mr. McInerney. My name is James M. Mclnerney.

Senator Ives. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God ?

Mr. McInerney. I do, sir.

Senator Ives. Go ahead. Counsel.

Mr. McInerney. Mr. Chairman ?

Senator Ives. Address the Counsel.

Mr. McInerney. Mr. Counsel, may I make a request under rule 8 of the committee's rules with respect to taking pictures during the testimony ?

Senator Ives. You can make the request. "Wliat is the request?

Mr. McInerney. That picture-taking be dispensed with during the taking of this witness' testimony.

Senator Ives. We have had that before. I do not think there is any objection to gi-anting your request.

The Chairman is here.

The Chairman. Without objection on the part of the committee, the request will be granted. The photographers will refrain from taking pictures of the witness while he testifies.

Mr. Klenert, will you state your name, your place of residence, and your business or occupation, please, sir ?

Mr. Klenert. My name is Lloyd Klenert.

Do you want my home residence, sir ?

The Chairman. Yes, sir.

Mr. Klenert. 9801 Old Spring

The Chairman. Gentlemen, I think the chairman warned the pho- tographers. Was there any misunderstanding on that ?

All right. Proceed. Go ahead.

3268 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Klenert. 9801 Old Spring Road, Kensington, Md. I am the international secretary-treasurer of the United Textile Workers of America.

The Chairman. Thank you, sir.

You have your counsel with you. I do not know whether counsel identified himself for the record or not.

Will you identify yourself. Counsel, for the record, please ?

Mr. McInerney. James M. Mclnerney, 1317 F Street NW., Wash- ington.

Senator Mundt. Mr. Mclnerney, are you the union's attorney?

Mr. McInerney. No, sir, I am not. I am appearing as counsel to this witness.

Senator Mundt. Thank you.

Mr. Kennedy. Mr. Klenert, how long have vou been with tlie United Textile Workers?

Mr. Klenert. I joined in 1933, sir.

Mr. Kennedy. 1933?

Mr. Klenert. Yes, sir.

Mr. Kennedy. And what was your position? What was your first official position ?

Mr. Klenert. President of my local union.

Mr. Kennedy. Where was that ?

Mr. Klenert. In New York City.

Mr. Kennedy. New York City. What numlier was that ?

Mr. Klenert. Local 92.

Mr. Kennedy. And when did you assume that position as president ?

Mr. Klenert. I think immediately — well, immediately after the — I would say approximately sometime in 1934 or 1935.

Mr. Kennedy. Were you elected president or appointed president ?

Mr. Klenert. I was elected by the membership, sir.

Mr. Kennedy. By the membership ?

Mr. Klenert. Yes.

Mr. Kennedy. How many were in your union at that time ?

Mr. Klenert. I would say about six or seven hundred members.

Mr. Kennedy. And how long did you remain president of that union ?

Mr. Klenert. About a year.

Mr. Kennedy. Did you move on to another position, a new position, then ? What I would like to do is just to get your history in the union, brief! 5^

Mr. Klenert. I am trying to recollect some continuity, some good approximation on dates.

I think in 1937 I was elected secretary and treasurer of the Greater New York joint board of the textile workers organizing committee.

Mr. Kennedy. Of the what?

Mr. Klenert. The textile workers organizing committee.

Mr. Kennedy. You became a member of that? A secretary?

Mr. Klenert. I was elected secretary and treasurer of the Greater New York joint board of the textile workers organizing committee.

Mr. Kennedy. And then how lone: did you remain in that position?

Mr. Klenert. Until 1938 or 1939. I believe that is a good guess.

Mr. Kennedy, Did you have another official position?

Mr. Klenert. Yes, sir.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3269

Mr. Kennedy. What was that ?

Mr. Klenert. I was elected to the vice presidency of the Greater New York joint board of the textile workers organizing committee.

Mr. Kennedy. And then what position did 3'ou have ?

Mr. Klenert. I think, in about 1940, 1940 or 1941, somewhere around that time, I became international organizer for the United Textile Workers of America.

Mr. Kennedy. Was that an appointed position?

Mr. Klenert. That was an appointed position by the international president.

Mr. Kennedy. And you remained how long as that ?

Mr. Klenert. About a year.

Mr. Kennedy. Then what did you do ?

Mr. Klenert. I believe in the latter part of 1941 or the beginning of 1942, the international convention of the United Textile Workers of America elected me as an international vice president.

Mr. Kennedy. And 3'ou remained as vice president until what date?

Mr. Klenert. The reason why I think it was in 1944 or 1946 was because the conventions were held on the even year, biannually, so it could have been 1944 or 1946.

Mr. Kennedy. Was it during the war or after the war ?

Mr. Klenert. When was the official date of the end of the war?

Mr. Kennedy. 1945.

Mr. Klenert. 1945 was the official ending of the war? I think it probably was in the 1944 convention.

Mr. Kennedy. So Avhat position, then, did j^ou take after that?

Mr. Klenert. I was elected in 1944, most likely, to the international secretary-treasurership.

Mr, Kennedy, And you have held that position up until this time?

Mr, Klenert. Yes, sir,

Mr, Kennedy. And you still hold it; do you not?

Mr, Klenert, Yes, sir.

Senator Goldavater. When you joined the union I think you said it was in 1933 — —

Mr. Klenert. Yes, sir ; I believe that to be correct.

Senator Goldwater. Where were you working at that time?

Mr. Klenert. I worked as a textile worker in a dyehouse, a yarn dyehouse, sir.

Senator Goldavater, In New York?

Mr, Klenert. In the New York area ; yes, sir.

Senator Goldavater, Hoav long had you been in that craft?

Mr. Klenert. I Avent to Avork, I believe, around the time of the big crash, Avhich was in 1929. I Avould say then I had been working about 4 years in the textile industry, approximately 4 years, at that time.

Senator Goldavater. Thank you A^ery much,

Mr. Klenert. All right, sir.

Mr, ICJENNEDY. You Still hold that position ?

Mr, Klenert, Yes, sir,

Mr, Kennedy, Could you tell us a little bit about the structure of the union as far as the executive board ? Is there an executive board ?

Mr, Klenert. Yes, sir.

Mr. Kennedy. Hoav many members are on the executive board ?

Mr. Klenert. There are 22 members of the executive board, com- prised of the international president, and my own office, 20 interna-

3270 IMPROPER ACTIVITIES IN THE LABOR FIELD

tional vice presidents elected from various geographical areas spelled out vs^itliiii the constitution, and 3 international trustees.

Actually, the board comprises 22 people ^Yho are elected on the floor of the convention, and 3 international trustees who are elected on tlie floor of the convention. That is the top structure.

Mr. Kennedy. How often is your convention?

Mr. Klenert. We have held conventions biennually.

Mr. Kennedy. Once every 2 years?

Mr. Klenert. Yes. We have had — that was the arrangement; yes, sir.

Mr. KJENNEDY. Is that still the arrangement ?

Mr. Kxenert. At the last convention, the convention voted to ha^'e 4 year conventions.

Mr. Kennedy. Did you suggest that ?

Mr. Klenert. 1 supported it, advocated it, believed it to be a good idea.

Senator Mundt. May I interrupt just a minute? Does that mean the terms of office have been 2 year terms and now they are 4 year terms? Would that follow ?

Mr. Klenert. Yes, sir; it would follow. The constitution, I be- lieve, was amended in both respects. The convention period was lengthened, and the tenure of office was lengthened.

Senator Mundt. So all 25 of these board members, 22 who were elected, and the vice presidents, president and secretary-treasurer, as in your case, and the 3 trustees, henceforth will be elected for 4 years instead of 2 ; is that right ?

Mr. Klenert. Under the operating constitution, that is correct. It is in operation now; yes, sir.

Mr. Kennedy. How is their salaries fixed, the members of the board? Who fixes their salaries.

Mr. Klenert. The salaries of the international vice presidents, un- der the constitution, are determined by the international president, and the international president's action, of course, are subject to approval by the international executive board.

' Mr. Kennedy. Is that mandatory, that he has to get approval from the board?

Mr. Klenert. I believe it has been the practice in the hiring of any- one, or the retention of anyone, the paying of any individual, he re- ports on it as part of his officer's report, and under new business or under report of officers his report is approved or disapproved.

Mr. Kennedy. But, specifically, he does not have to get approval to determine the salaries of the various members of the executive board?

Mr. Klenert. As a matter of practice, he does. The executive board could overrule — I am not a constitutional lawyer, but in my opinion the international executive board could overrule the president, and either increase the wage or decrease the wage, or discharge the individual in question, or hire some other individual in question, despite the international president. That is my opinion of the func- tion.

Mr. KJENNEDY. Does the international president also make the de- termination as to the expenses of the members of the executive board?

Mr. Klenert. He initiates it, and this, too, is subject to approval.

Mr. Kennedy. He determines the salary and the expenses of the

IMPROPER ACTIVITIES EST THE LABOR FIELD 3271

•executive board, and then he submits this ultimately to the executive board for their approval i

Mr. Klenert. As part of his report.

Mr. Kennedy. As part of his report to them?

Mr. Klenert. Yes. As a matter of practicality, Mr. Kennedy, it actually works, if you will bear with me I will give you the detail on a matter of practice the man in charge of the region will call up, or at that, like this. AVe have men in charge of the various regions, and as a matter of practice the man in charge of the region will call up, or at the board meeting, or communicate with the president, or make a suggesetion to me and I, in turn, will relay it, and have a general sug- gestion, and suggest "I think we shoulcl hire Tom Brown," and I will use that name illustratively, "I think we should hire him, and I think we should pay him $75 a week, and I think we should give him so much allowance for his car and so much allowance for any other item."

He makes that recommendation for a particular area, and the presi- dent formally makes the appointment.

But I daresay there are man}^ men on who actually are on by virtue of the suggestion of other people, and a formalized appointment by the president.

Mr. Kennedy. What about the salary of the president ? "Wlio deter- mines that?

Mr. Klenert. The constitution, as prescribed in the constitution, by convention action.

Mr. Kennedy. And also for his expenses?

Mr. Klenert. No. His expenses are established administratively the same as anyone else's.

Mr. Kennedy. That would mean by the president ?

Mr. Klenert. He establishes that the same as he does for anybody else; yes, sir.

Mr. Kennedy. '\Aliat about on his daily expenses, his hotel bills, hotel bills or expenses of any international vice president? Who passes on those ?

Mr. Klenert. I do.

Mr. Kennedy. The president ?

Mr. Klenert. The president does. We both do.

Mr. IvENNEDY. Who passes on the bills and expenses of you and the president ?

Mr. Klenert. The international board and the committee on offi- cers reports, the auditors, and

Mr. Kennedy. When you have a hotel bill or any expenses such as that, who determines whetlier they are to be paid ?

Mr. Klenert. I see. I pass on all those types of bills.

Mr. Kennedy. And jou pass on your own, do you ?

Mr. Klenert. Yes ; I do.

Mr. Kennedy. We were specifically interested — you were here yes- terday— regarding these homes that were purchased.

Mr. Klenert. You seemed to be.

Mr. Kennedy. I wonder if you could perhaps throw a little light on the transaction. First on the question of the $1,000 downpayment that was made on the homes by you, I think we have the check for JVIr. Valente, and I think since Mr. Calabrese testified yesterday he has

3272 IMPROPER ACTIVITIES IN THE LABOR FIELD

had some discussions with Mr. Mclnerney. We would like to get, if we could, the explanation for that $1,000 check that was made as a downpayment on your home.

Mr. Klenert. Yes. I brought it to Mr. Mc's attention. I didn't think ISIr. Calabrese was telling an untruth, but I thought he had ar- rived at an erroneous conclusion.

I brought to Mr. Mclnerney's attention that I had some recollec- tion that it wasn't a union check. I seem to get that implication, at least, from Mr. Calabrese's testimony. I may be wrong, but I got that impression, that that is what he was implying.

I advised Mr. Mclnerney that I recall borrowing, taking a loan, from our organization in that amount. I recall, I think, to the best of my recollection, I deposited it and gave Mr. Nolan a personal check. And. incidentally, with an individual contract on that. There was some- thing of a straw and something here jTsterday which is not quite as I recall it.

Mr, McInerney. Mr. Chairman, are these men taking pictures, Your Honor ?

The Chairman. Are you speaking — are you taking pictures?

Did you apply your request to them, too ?

Mr. McInerney. I certainly did.

The Chairman. Unless they specify, I did not know. They usually are referring to these men here snapping pictures while they are try- ing to testify.

Mr. McInerney. This gentleman just took one here.

The Chairman. Gentlemen, the request of the witness and his counsel is going to be respected. The films that you have taken from the time the Chair gave the order will not be used.

Proceed.

Mr. McInerney. Excuse me.

Mr. Kennedy. Then you got this $1,000 loan from the union, is that right, and you deposited it in your own bank account?

Mr. McInerney. Yes, sir. I recollect that.

Mr. Kennedy. You do remember that ?

Mr. McInerney. Yes, sir.

The Chairman. I may say to counsel, if I may interrupt, we do not let counsel or the witness determine about whether they may take our picture or not.

Senator Mundt. Mr. Klenert, you said, if I understood you cor- rectly, that you remembered borrowing the money from the union and depositing it in the bank and issuing a personal check.

Mr. Klenert. Yes, sir.

Senator Mundt. It would be helpful to the committee, verifj'ing what you have told us. if you could tell us the bank in which you de- posited the money and on which you drew the check, so that we can check the record and verify your memory, if your memory is right.

Mr. Klenert. Yes, sir. Well, last night, we tried to see exactly and learn as much as we could. In my informal chats or talks with Mr. Calabrese, this subject was never raised and, therefore, I never delved into it before or explored any facets of this nature.

Senator Mundt. Can you just tell us the bank ?

Mr. Klenert. I went to the union records and I found a date which I believe was April — a loan made to me in the ledger, which we

. IMPROPER ACTIVITIES EST THE LABOR FIELD 3273

turned over to the investigators this morning. I had assumed they had it before this. It is in there. It is April 1, a loan to me.

Then we found some photostats of my bank statement which shows a deposit of a like amount a few days following April 1. "We found on the same ledger book that I had repaid the organization this loan on May 1 or 2. Tliat is in the records of the organization. But there was a credit, I think, in between that to my personal bank account, and a debit in my bank account of $1,000 dated April 11.

I think I am quite certain about these dates, because I just looked at them last night and this morning with Mr. Mclnerney, and we tried to apprise the investigators of this fact and tried to straighten it out.

Senator Mundt. You do not have the check ?

Mr. Klenert. No, I do not, sir. If I had had tlie check, they would have had it by now.

Senator Goldwater. You say you borrowed this money from the union funds ?

Mr. Klenert. Yes, sir.

Senator Goldwater. What authority did you have to borrow it ?

Mr. Klenert. The authority to receive loans and advances has "been in effect throughout all the years, by practice, in our organiza- tion, I think even as recent as — I am sure that there are some in our minutes, authorizations along those lines, Senator, which outline the authority by the executive council.

Senator Goldwater. There is nothing in your constitution and by- laws which allows you to do this.

Mr. Klenert. The constitution and bylaws do not contain it. I laelieve the international executive council meetings do contain it, M'hich is the highest governing body between conventions.

Senator Goldwater. Do you mean that the executive council can authorize you or any other official to borrow money at your will in any amounts ?

Mr. Klenert. The executive council has authorized that, has given that authority, yes, sir. Exactly where it is in the minutes, offhand I don't recall, but I am sure that at meetings of the international exec- utive council such authority was given.

Senator Goldwater. You have been secretary-treasurer of this or- ganization since 1944. After all of that experience, do you think that this is a wise system ? Do you think it is right, in your responsibili- ties and the responsibilities of the other officers, to the membership, to be able to borrow money from this fund ?

Mr. Klenert. I would only deem it unwise if the loan wasn't paid back. Then I would think it was very bad.

Senator Goldwater. That is Mr. Beck's philosophy, too.

What I am getting at in this question is probably not related di- rectly to what the chief counsel is getting at, but in the recommenda- tions we are going to have to make will be some recommendations along the lines of proper union constitutions. It seems to me that if I were a member of this union I would insist on such a provision being under the duties of the international secretary -treasurer. That is, a stipulation that you cannot borrow money for any purposes at all.

Would you feel better as treasurer if you had that stipulation writ- ten in your constitution ?

3274 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr, Klenert. Frankly, sir, my offhand reaction is that I think the point 3^ou raise is well taken, and, in fact, some of the executive coun- cil members, since the creation of the new code of the AFL-CIO, have taken the position that we should reexamine our constitution and re- examine our practices, and take some affirmative actions where we are not in line with any particular suggestion that does exist in the new code. There is a meeting of our organization very soon, I know that the point yen raise is part of our anticipated discussion, so that certain practices which have been frowned upon will be eliminated.

Senator Gold water. I am glad to hear that, and I hope that you go before that body and insist that there be written into your consti- tution a provision that would prevent any borrowing for any purpose at all, by either officers or members of your union, I think your mem- bership would appreciate that,

Mr. Klenert. Well, as I told you, sir, we anticipate there will be a resolution forthcoming with respect to that and related matters. Of course, I will not presume to say what the outcome, the vote, will be, but I know that many members of the board have already advocated and suggested that we effectuate something like that.

Senator Goldwater, That is all I have, Mr. Chairman.

Mr, Kennedy, Mr, Klenert, the records show a $1,000 deposit in your bank account on the 3d of April.

Mr, Klenert, It does,

Mr, Kennedy, And then it shows that the payments to Beitzell were cleared — two $1,000 checks of yours and Mr, Valente — were deposited on April 7, 1952, and then that check cleared Mr, Valente's bank account on April 8, 1952. On the same date, there is a check of $1,000 that cleared the Textile Workers Union, $1,000 at the City Bank,

Mr, Klenert, Not in my account, sir, you mean

Mr, Kennedy, That is the point, Nothing cleared your account until April 11, 1952,

Mr. Klenert. All I can tell you, Mr. Kennedy, is that yesterday I noticed with great interest this lady that was here. Miss Callaghan, I never laid eyes on her, I never spoke to her in my whole life. She mentioned that it was two personal checks, and I think her recollec- tion is sound, I believe it to be sound,

Mr. Kennedy. The deposit slip says it is the City Bank and there isn't any clearance in your bank account on the following day as there is in Mr. Valente's.

Mr. Klenert. I remember that being brought out, and I am in a quandry about it.

]\Ir. Kennedy. So are we.

Mr. Klenert. Yes. I am inclined to believe that my recollection is the same as Miss Callaghan's, that they were personal checks. There have been errors made, I know, in the banks, that sometimes there has been an error made between my account and the organization's ac- count. It might well be that my account should have been debited rather than that account. That could happen.

I recall being credited and then debited later by mistake, and the reverse happening, too.

Mr. Kennedy. If that happened there, somebody is out $1,000.

Mr. Klenert. No, because the debit of $1,000 does appear on my account April 11. But Mr. Calabrese made a point of cutting me off

IMPROPER ACTIVITIES EST THE LABOR FIELD 3275

at the loth, even though he must have known that there was a debit of $1,000 on the 11th.

The Chairman. The Chair would like to read something- into the record.

Has this document been testified to, this copy of the minutes?

Well, I will wait awhile.

Will you be sworn, 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. Henig. I do.

TESTIMONY OF MOETON E. HENIG

The Chairman. State your name, place of residence, and business or occupation.

Mr. Henig. My name is Morton Henig. My residence is Silver Spring, Md. I am an investigator for this committee.

The Chairman. The Chair hands you a typewritten document con- taining several pages, which purports to be the minutes of a meeting, international executive council. United Textile Workers of America, Blue Room, Hotel Hamilton, Washington, D. C, April 25 and 26, 1946. I will ask you to examine this document and state if you recog- nize it, and, if so, where you obtained it.

(Document handed to witness.)

Mr. Henig. This is a copy of the minutes of the executive council meeting given to us by Mr. Klenert, or Mr. Mclnerney, his lawyer.

The Chairman. It was obtained, then, from the union ?

Mr. Henig. Yes, sir.

The Chairman. And represented to you as being the minutes of the meeting on those dates?

Mr. Henig. Yes, sir.

The Chairman. This document will be made exhibit No. 25, for reference.

(The document referred to was marked "Exhibit 25," for reference and may be found in the files of the select committee.)

TESTIMONY OF LLOYD KLENERT, ACCOMPANIED BY COUNSEL,

JAMES M. McINEENEY— Eesumed

The Chairman. The Chair would like to read into the record the concluding action, the last action taken, on the morning of April 25, 1946, as recorded in the minutes of this meeting. [Heading:]

After this discussion, Vice President Schaufenbil —

is that his name ?

Mr. Klenert. Perhaps it is Schaufenbil. The Chairman (reading) :

Schaufenbil moved that the international union continue its policy to make such advances or loans to staff members, employees, and oflQcers as the occasion might arise, and authorize the international secretary-treasurer to make reasonable ar- rangements for repayment according to his best judgment.

Vice President Sgambato seconded the motion, and it was unanimously passed.

The council adjourned at 1 o'clock.

3276 IMPROPER ACTIVITIES IN THE LABOR FIELD

I think it is important in the study this committee is making to let this record show, and develop in the course of this record in these hear- ings, what might be termed the loose practices by union officials, execu- tives, officers of unions, in the handling of the dues of the members.

It seems to me that that particular provision, to the chairman at least, is very loose, quite irregular, and affords, if it does not even invite, the misuse or misappropriation of union dues, and, certainly, permits loans to be made without security or without proper require- ments for security or that they will be repaid.

(At this point. Senator Kennedy entered the hearing room.)

Senator Mundt. Did I understand, Mr. Klenert, that you said that, at an upcoming meeting of the council, they are considering rescind- ing that privilege to the officers of the union and to the executive board members ?

Mr. Klenert. What I think I said, or what I meant to say, sir, was that perhaps you are aware that, of recent months, various codes of practice have been developed. I think they are called the ethical practices codes. What I tried to tell the Honorable Senator Gold- water was that at this board meeting — was that prior to this forth- coming board meeting, members of the board, in conversation with me, have suggested that we go over those existing codes now, which are relatively new, and take some affirmative action to emulate or come into accord with the suggestions as contained in that code or codes.

Senator Mundt. Would you care to tell the committee what you think about the wisdom of those recommendations ?

Mr. Klenert. I have read the codes. I must confess I have not studied them very intensively.

Senator Mundt. I am thinking about this particular matter of the loans, not the whole code.

Mr. Klenert. I have read the codes, and I have found nothing in them objectionable. I certainly would not object to a resolution which would come before the board, or a motion made by any board member, where he might point out some practice in violation of the existing code and ask us to eliminate that practice and conform to the code.

Senator Mundt. Does the code frown upon this practice of internal loans ? I am not familiar with it. I gather, from what you say, that it does.

Mr. Klenert. As I told you, I did not read them very intensively. I think it is the last code— I think there are 5 or 6 or 7 of them that have come forth — I think it is the last code, and I may be wrong, but I think it is the last one which has discussed and raised this question of loans and advances. That, along with the other sections of the code, will all be discussed and acted upon by the next meeting of our board.

Senator ISIundt. May I say that I hope the code does contain that, and T hope that your union executive council does approve it by unani- mous action. I share with Senator Goldwater the feeling that John C. Textile Worker, along with John C. Teamster, has at least the potential peril to his fmids if this kind of practice continues ; because it is a loose fiscal practice, no matter how honorably it may be initiated.

It sets up the conceivable situation whereby loans are not going to be collectible, whereby a group of men, each passing on each other's loans, are inclined to be a little bit more lax, certainly, than a board

IMPROPER ACTIVITIES IN THE LABOR FIELD 3277

of directors of a bank would be in making a loan. Wliat I am inter- ested in, and what you should be interested in, and I assume you are, is protecting the money which the union members have paid into the union funds, and not to have it frittered away.

Mr. Klenert. I imagine that, in the issuance of loans by credit unions or employers or an}^ other type of organization, there might be sorry experiences. I imagine any loan that is not repaid is a sorry experience.

Senator Mundt. I do not know of any other financial institution, however, except a union, that loans money to its members without interest. This says that the board of directors wants to continue the practice of making these loans, as I interpret it, without interest. Is that correct ?

Mr. Klenert. To the best of my knowledge, we have never charged interest for any loan or grant given or loaned to somebody.

Senator Mundt. Do you know of any other financial institution that loans money just on that basis, without interest, a credit union or these other ones that you mentioned, especially a trustee fund ?

Mr. Klenert. I am not very familiar with any of those. To my knowledge, I would have to say ''no, I do not." I am not familiar with any.

Senator Mundt. So far as your knowledge goes, you do not know of any ?

Mr. Klenert. As far as my knowledge goes, I do not know of any.

Senator Curtis. Mr. Chairman.

The Chairman. Senator Curtis.

Senator Curtis. Were the rank-and-file members of your union ever notified, or given a copy of that resolution that was passed back there in 1946 authorizing loans and advances ?

Mr. Klenert. Actually, the local unions as well, in our organiza- tion, the local unions which comprise the rank and file, sir, were given financial help and assistance on an interest-free, noncollateral basis, and have repaid it, and in some cases still owe the international union. The request for loans from a local union, of course, stems from an ac- tion taken by the local body and then handed

Senator Curtis. That is not what I asked, I asked if you ever noti- fied the membership that you passed a resolution in international head- quarters that you people in the headquarters could borrow their money.

Mr. Klenert. Wliether or not any international official went spe- cifically to a local union and mentioned that fact ?

Senator Curtis. No. If you notified them, all of them, through bulletins or otherwise, that you had passed a resolution that you could borrow their money.

Mr. Klenert. I see. Direct notification came as a result of reports at conventions to delegates representing those local unions and the membership, who, I presume, reported back on the conventions and on the action of the executive board and officers.

Senator Curtis. What information would they get?

Mr. Klenert. They would get the information of officers ' e^jorts and they could get a committee report on the executive council meet- ings.

Senator Curtis. Those are summary reports, are they not? They do not contain every transaction ?

89330—57 — pt. 9 5

3278 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Klenert. I beg your pardon. What kind ?

Senator Cuetis. Those reports are summary in nature, and do not contain every transaction, every check, every item received, do they ?

Mr. KxENERT. They are abbreviated reports. I do not believe they contain — that type of report would not contain it ; no. The financial report would.

Senator Curtis. This money belongs to the workers who belong to your union ; does it not ? It is their money, is it not ?

Mr. KiENERT. The money comes

Senator Curtis. All the money you have in your treasury of any sort comes from the workers, does it not?

Mr. Klenert. It comes from the dues of the workers, yes, sir.

Senator Mundt. In that connection, if the Senator will yield, I would like to read again this paragraph that the chairman read. It says:

After this discussion, Sehaufenbil moved that the international union continue its policy —

which incidentally, verifies what you testified to earlier —

continue its policy to make such advances or loans to staff members, employees, and oflScers, as the occasion might arise.

I take it that this select circle of individuals entitled to interest-free loans without collateral did not include loans to the union members who actually paid the dues to create the fund. Am I right about that ? I do not see them mentioned.

Mr. Klenert. No individual member has ever requested a loan from the international union for any reason that I know of.

Senator Mundt. I see nothing here to indicate that any individual dues-paying member had any right to make such request, because I do not see him starred as a preferential customer.

He would not be a staff member, or an employee, or an officer. 1 simply point out to emphasize my interest in protecting the dues-pay ing member, that here is a practice which I hope, and which you lead us to believe, is going to be discontinued as part of the new ethical prac- tices code of organized labor, here is a practice of granting these pref- erential loans to people who did not create the funds, but denies the practice to the fellow who pays the dues creating the fund.

Mr. Klenert. Well, sir, I do not want to get into any contention with you. It occurs to me

Senator Mundt. If it is true, let us get it ventilated today. Let us get the word out to all the textile union workers that all they have to do is come to your union office and say, "Look, pal, I want to buy an auto- mobile. How about a loan of $2,000, interest-free ? Can I get it?"

If that is true, tell the world that. If it is not true, let us show the world that they have been cut off at the grass roots. Which is true? I do not want a contention, just a clarification.

Mr. Klenert. Perhaps I will say this to you. Senator. All the money of the United States, all the money that we collect in taxes, that comes from the people, too.

Senator Mundt. That is right.

Mr. Klenert. When the Congress

Senator Mundt, It cannot be loaned to any Member of the Senate without interest, I assure you of that, or any Member of the other body.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3279

Mr. Mclnermey could not get any when he was doing work very commendably for the Government in a previous time.

Mr. Klenert. We say all the money comes from the people. The House of Representatives, for example, appropriates $10,000 a year to the Speaker of the House, which is paid in equal monthly install- ments, for which no accounting is required.

I don't believe a law was passed giving every citizen of the United States $10,000 a year without an accounting. The money belonged to* the people and was appropriated.

Senator Mundt. You are getting your eye off the target.

Mr. Klenert. It is a question of practice.

Senator Mundt. Wait a minute now. I am not criticizing for the- time being, the expense allowance which you say you have been voted,. $20 per diem.

I am criticizing a select pattern of preference which grants to the- union high command rights to borrow money without interest and without collateral from a fund created by the dues-paying members,, rights which are summarily denied to members who create the funds..

Is that or is that not the situation? If it is not, let us tell John C- Textile Worker, through the wires of the press services today, that they have been missing out on a mighty good bet ; that all they have tO' do is come to you and they can get a loan without collateral and with- out interest.

Which is true ? Do only the officers get this plush treatment, or dO' all of them do it ?

Mr. Klenert. The motion speaks for itself there. It does not au- thorize me to give loans to any member. I think that if I was asked for a loan from a worker, I think I would arrange to give it to him.. Yes, I think I honestly would, sir.

Senator JNIundt. Then we can now announce to the secretarj^-treas- urer of the international union, if he is asked for a loan by any textile' worker, will grant it to him ?

That will be good news in a lot of households if they hear it on the radio tonight.

Mr. Klenert. I have not granted every loan that has been asked of me by members of the staff or officers or office employees. I have not granted all of them, sir.

Senator Curtis. Have you ever turned down any of your own?

Mr. Klenert. No, sir.

Senator Mundt. You want the record to read then, so the textile- worker will know, that he will be treated exactly the same in granting- these loans as any officer or any staff member in international head- quarters, is that right? You are amending your minutes, but that is^ all right with me.

You kind of have a monolithic situation here, in union administra- tion.

Mr. Klenert. What is the date of those minutes ?

Senator Mundt. 1946. I believe it is April 25. It was in the morn- ing, and the council adjourned at 1 o'clock. Does that help you-- answer the question ?

Mr. Klenert. I certainly could not amend the minutes there or any other minutes.

Senator Mundt. You are amending them because you are telling" me that you are going to grant these loans to all textile workers. L

3280 IMPROPER ACTIVITIES IN THE LABOR FIELD

certainly commend your amendment because I see no reason why the fellow who pays the dues should not get as much treatment as the fellow who makes his living out of the dues.

Mr. Klenert. Would you say, then, that the Congress should pass a law giving any citizen who wanted it, the fund which I mention which is given to the

Senator Mundt. No, sir. I should say Congress should pass a law denying this plush treatment that the union leaders have been engag- ing in to the detriment of the dues-paying members.

That is a law I think we should pass. Would you agree with me ? I have told you what I think. What do you think? Do you agree with me ?

Mr. Klenert. I think I would like to discuss it with my board, and whatever the majority of the board decides will be good enough for me, Senator.

Senator Mundt. Would you be good enough to tell this committee what your board decides on that question ?

Mr. Klenert. I will be happy to live with any decision that the board makes on that question or any other question.

Senator Mundt. Would you advise this committee of how the board reacts to that suggestion ?

Mr. Klenert. I will be very glad to.

Senator Goldwater. Mr. Chairman, to finish that point up, I have a question.

The Chairman. Senator Goldwater.

Senator Goldwater. First, wliile you are attending this next meet- ing at which it will be possible to offer these resolutions, I would like to suggest to you that you also consider the possibility, in fact the advisability, of including in the duties of the secretary-treasurer the responsibility of making an annual report to the membership.

Your constitution today only says that you are responsible for these moneys, and that you shall report their condition to the executive council. The executive council has absolutely no responsibilities to report it any further.

I think in fairness to your membership you should, as secretary- treasurer, suggest this resolution : That among your duties will be the specific one of reporting annually to the full membership, through your house organ, or however you care to do it, the state of your finances.

I would like to just ask you one question. You expressed an inter- est in tlie suggestions that have been made here that these several things be done. Are you willing to make those motions in the next meeting?

Mr. Klenert. With respect to the codes ?

Senator Goldwater. To bring your constitution in line with good, fiscal practices.

Mr. Klenert. Yes, I am in complete accord with any fiscal practice which will serve the good purpose for our union.

Senator Goldwater. Serve your members?

Mr. Klenert. When I say the union, I mean the members. Senator Goldwater. I don't differentiate between the two.

Senator Goldwater. Do I understand you will make sucli motions to, 1, prevent the loaning of dues money to officers or anybody else in the union, and, 2, a provision in the responsibilities of the secretary- treasurer of reporting annually to the entire membership ? ■

IMi>ROPER ACTIVITIES IN THE LABOR FIELD 3281

Will you make those two motions before your next meeting?

Mr. Klenert. I think the only honest answer that I could give you is that I believe motions of that nature will be forthcoming.

Senator Goldwater. I just wanted to m.ake sure. If you said, yes, we could all rest easily and John Weaver or John Textile Worker can go to sleep tonight and know that his moneys are going to be protected in the future because of your actions.

Mr. Klenert. Without seeing any resolution or motion and specific language, I would say to you that fundamentally, I am not in disagree- ment with what you have outlined, and that if a motion comes to the floor of our international executive council meeting, I certainly off- hand can see no objection to it.

Senator Goldwater. I was hoping that you would be the one, with your experience

Mr. Klenert. It may well be that after the question of language and everything else and general discussion is held, I might become an ardent advocate of it. I do not want to prejudge it or make any defi- nite, binding commitment to you here today and then come back to you, perhaps, at a later date and you saj^, "Well, did you do that?"

Senator Goldwater. You see, Mr. Klenert, you are the logical one. You have had 11 years' experience as secretary-treasurer of this union. During that course of time, you should have been able to find the weaknesses of that part of your constitution that bears on your respon- sibilities.

I am not going to press the point. I do not want you to commit your- self here if you do not want to. But it seems to me that you are the logical one to stand up before your next meeting and say, "Mr. Chair- man, I have two motions to make," and then make them.

Senator Ives. Mr, Klenert, when did you have your last conven- tion of your international?

Mr. Klenert. In September or October of 1956.

Senator I\t:s. 1956? That was last year. When do you have your next one?

Mr. Klenert. The next one, in accordance with the constitution would be held in 1960.

Senator I^^ES. You have them every 4 years, is that it?

Mr. Klenert, That is the practice as of now, sir. Prior to this is was biannual.

Senator Ives. It is a question of constitutional requirement, is it not? Is that not what the constitution provides?

Mr. Klenert. Now, it is 4 years. Previously it had required a 2- year period, sir.

Senator Ives. What we have been talking about here apparently, is something which should be in your constitution. I mean these recommendations that have been made by Senator Goldwater and others ought to be a part of your constitution.

How is your executive board created ? Is that elected or appointed ?

Mr. Klenert. The executive board is elected on the floor of the convention and I believe the constitution provides a designation of various geographical areas so that all the segments have proper repre- sentation.

Senator Ives. In other words, the people who are representing the unions, the locals in those sections, make recommendations and then

3282 IMPROPER ACTIVITIES IN THE LABOR FIELD

they are elected, are tliey, to the executive board? Is that the way you handle it?

Mr. Klenert. The delegates at the convention, who are elected by the rank-and-file members of the local unions, come to the convention and nominate and elect these men.

Senator Ia^s. For how long a period are they elected ? Four years 2

Mr. Klenert. For the same time as between conventions.

Senator Ives. And you are elected for 4 years?

Mr. Klenert. In the same manner, sir; yes, sir.

Senator Ives. Then is there any provision in your constitution — I have not looked at it — for calling a special convention ?

Mr. Klenert. I believe there is.

Senator Ives. Under what circumstances?

Mr. Klenert. If I could have a copy of the constitution, I would find it real fast for you.

(A document was handed to the witness. )

(The witness conferred with his counsel.)

Mr. Klenert. Senator Ives, on page 16, article X, the heading, ■"Conventions," if you want me to, I shall read for you.

Senator Ives. I wish you would because I would like to know how you can call a special convention.

Mr. Klenert. Section 1 :

The United Textile Workers of America shall hold a regular constitutional convention once every four years on the even year. It shall require 19 legal, bona fide delegates from at least the nine local unions to hold such a convention.

Senator I^'ES. May I interrupt you there ?

Mr. Klenert. Yes, sir.

Senator Ives. How large a membership has your international ?

Mr. Klenert. Tlie international union represents under collective bargaining agreements for approximately close to 100,000 workers, but on a dues-paying basis, only has about 50,000 paying dues.

Senator Ives. How large a delegation do j^ou have at your con- ventions ?

Mr. Klenert. I would say roughly, I think, 400. That would be a good round number.

Senator Ives. Four hundred out of the 50,000, representing the country geographically, is that it ?

Mr. Klenert. Each local represents so many delegates in accordance with their membership. I think 1 for the first 200, and some sort of proportional representation.

(At this point. Senator Goldwater withdrew from the hearing room. )

Senator Ives. That requirement there calls for 19, does it ?

Mr. Klenert. I imagine it is a quorum requirement, that is, 19 legal, bona fide delegates from at least the 19 local unions must be in attendance to hold such a convention.

Senator Ives. You have never had anything with as small a dele- gation as that, have you ? You have had larger conventions than that, have you not ?

Mr. Klenert. This is, I imagine, some sort of quorum control or requirement.

Senator Ives. I am trying to find out how you can call a special convention.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3283

Mr. Klenert. Here is section 3 :

The basis of representation for all local unions shall be one delegate for the first 200 members and an additional delegate for each additional 200 members.

That is the way it works.

With respect to the other question, section 2 :

In the event of any circumstances arising, whereby it is deemed to be for the best interests of the International Union, the executive council shall have the power to call a special convention and should one-third of the unions aflBliated with this organization make a request for a special convention, and the execu- tive council should not grant the same, they shall have the power to petition the president for a special convention and he shall instruct the secretary to issue a circular to all local unions stating the request, and asking them to vote on same.

In the event of two-thirds of the local unions voting in favor, the president shall instruct the secretary to call a special convention immediately.

That concludes it, sir.

Senator I\t:s. That being the situation — I would like to have that back. It belongs to the committee.

(A docmnent was handed to the committee.)

Senator Ives. In the light of what has been said by Senator Gold- water and others, do you not think that you ought to call a special convention to add this language that has been suggested to your con- stitution ? It ought to be in the constitution.

You do not have any business to be doing what you have been doing and you know it. You have no business to have had such practices as you have been engaged in as an official of your union, and you know it.

I do not suppose you can call a convention in a few months time. I realize the problem of calling a convention. But surely you ou^ht to call a convention not later than next year and have this constitution of yours straightened out so that you cannot indulge in the kind of practices in which you have been indulging.

You know that just as well as I do. I am asking you, will you think that over ? I know you cannot call it, but will you think it over ? Mr. Klenert. I will answer you by saying this. Senator, that if the council outlines and instructs me to follow certain procedures in line with your suggestions here today, and Senator Gold water's sug- gestions today, if those are forthcoming from the council, the interna- tional executive council, which is the highest governing body, I would not say to them, "I am not going to effectuate these new practices until we have a convention."

I would abide by their decision immediately and effectuate them.

Senator I^tes. The council is not here to hear what we have been saying today. The chances are that some of them will never see this record that is being made today.

Will you, yourself, recommend such action to the council ?

Mr. Klenert. I have already told you I do not want to make any quick answer and wild promises or any commitments that I am not able to live with, but I have already mentioned to Senator Goldwater that some members of the executive council have said that we should go over our practices and our procedures and wherever they need im- provement or tightening up, if they do, it should be done.

If the board or executive council, the highest authority of the unicm, outlines certain procedures, I would institute them immediately. I would not wait for a convention.

3284 IMPROPER AcrrviTiES in the labor field

Senator Ives. All right. Are you going to recommend them? Senator Golclwater asked that and you ducked him. Are you going to duck me, too, on the question ?

Mr. Klenert, I am not trying to duck or be evasive.

Senator Ives. Be frank.

Mr. Klenert. I am. I said that fundamentally, I am in accord, and until we actually have the motion and the language before me, and we have had discussion by the council, I cannot make a firm com- mitment for or against.

But I say to you in all honesty that fundamentally, I see nothing to which I would object and, therefore, would support.

Senator Ives. Just a minute, now. You do not have to have every- thing before the council before you make up your mind what posi- tion you are going to take on this.

Mr. Klenert. No.

Senator Ives. All right. Will you be for it, or will you be against it, or will you be lukewarm and indifferent?

Mr. Klenert. If I am for it

Senator Ives. Are you going to be for it ? That is what I am asking you.

Mr. Klenert. You said lukewarm or indifferent. I will be strongly for something or strongly against something, not lukewarm or in- different.

Senator I^rES. Are you going to be for this ?

Mr. Klenegt. Specifically what ?

Senator Ives. Specifically for the recommendations made by Sena- tor Goldwater.

Mr. Klenert. To eliminate the interest-free noncollateral loans?

Senator Ives. Exactly, to eliminate the practice of what you have been describing, that you can participate in.

Mr. Klenert. I will tell you here that I will definitely support a resolution which would eliminate the practice of interest-free, non- collateral loans to anybody on any strata in the organization, yes, sir.

Senator Ives. Further than that, will you carry out the further recommendations of Senator Goldwater, and that is that you cease to indulge altogether in these kinds of practices, making loans to your own members, your officers and anything of that kind ?

Mr. Klenert. I thought I just

Senator Ives. You said interest-free.

Mr. Klenert. I see. Do you mean loans regardless of collateral ?

Senator Ives. Regarless of collateral, making loans to your officers or anything of the kind.

Mr. Klenert. Yes, I think I would.

Senator Ives. Do you know or are you just thinking ?

Mr. Klenert. Well, yes.

Senator Ives. Would you or would you not ?

Mr. Klenert. I think I would, yes.

Senator Ives. You think you would ?

Mr. Klenert. Yes.

Senator Ives. All right. That is good.

I will not ask you anything further about your convention because if your council is going to do this thing, you probably do not need a convention.

Mr. Klenert. If the council does it, we don't need a convention.

IMPROPER ACTIVITIES IN THE LABOR FIELD 3285

Senator Ives. But you are goinr;; to work for this, are you ?

Mr. Klenert. As outlined, I wil 1 ; yes, sir.

(At this point, Senator Kennedy withdrew from the hearing room.)

Senator Mundt. Does the geneial dues-paying membership of your textile union know that this financial smorgasbord of noncollateral, interest-free loans is available to you, or does it not know it ? Have they been advised ?

Mr. Klenert. Financial smorgasbord ?

Senator Mundt. You can delete that phrase. The practice, let us say. Do they know of this practice ?

Mr. Klenert. That is a new one on me. Senator. I never heard of it.

Senator Mundt. Forget that, then. You are not a Scandinavian. I can see that.

Mr. Klenert. I have enjoyed smorgasbord.

Senator Mundt. That is one of the things that got you before this committee, that you enjoy the smorgasbord practices.

Forget that phrase.

Do the union members that pay the dues know about the practice which we have been discussing here in the last half hour or so, that you people at the top do have available to you noncollateral, interest- free loans?

Mr. Klenert. We have had to date, yes, sir. We have had that.

Senator Mundt. Wliat I am getting at is this : Do you publish an international newspaper or weekly ?

JMr. Klenert. Yes, sir.

Senator Mundt. Has it ever been mentioned to the membership in that, that that is a practice engaged in by the officers ?

Mr. Klenert. Specifically ? No, sir. The only thing that has been mentioned has been outstanding loans that have been owed to the international union, in our financial report, all coupled under that heading. No one individual, group, or local union that might have been lielped or district council that might have been helped.

Senator Mundt. You do not anticipate, do you, any great uprising of resentment on the part of the dues-paying members should you decide to discontinue the practice ?

Mr. Klenert. No ; I do not, sir.

Senator Mundt. I do not either.

The Chairman. Are there any further questions at the moment ?

It is obvious that we cannot finish with this witness this afternoon. It is the plan of the Chair, if agreeable to the other members of this committee, to resume hearings in the morning at 10 o'clock, and to continue until such time as we determine we will recess. Then we will recess over until Monday afternoon.

The witness will return tomorrow at 10 o'clock.

The committee stands in recess until that hour.

(Wliereupon, at 4:07 p. m., the committee recessed, to reconvene at 10 a. m., Friday, July 19, 1957.)

(Members present at the taking of the recess: Senators McClellan, Ives, Mundt, and Curtis.)

INVESTIGATION OF IMPROPER ACTIVITIES IN THE LABOR OR MANAGEMENT FIELD

FRIDAY, JULY 19, 1957

United States Senate, Selelct Committee on Improper Activities

IN the Labor or Management Field,

Washington^ D. C. The select committee met at 10 a. m,, pursuant to Senate Resolution 74, agreed to January 30, 1957, in the caucus room. Senate Office Build- ing, Senator Jolin L. McClellan (chairman of the select committee) presiding.

Present : Senator John L. McClellan, Democrat, Arkansas ; Senator Pat McNamara, Democrat, Michigan ; Senator Barry Goldwater, Re- publican, Arizona; Senator Karl E. Mundt, Republican, South Da- kota ; Senator Carl T. Curtis, Republican, Nebraska.

Also present : Robert F. Kennedy, chief counsel to the select com- mittee ; Ralph Mills, assistant counsel ; Morton E. Henig, investigator ; Alphonse F. Calabrese, investigator ; Ruth Young Watt, Chief clerk.

(Members present at the convening of the session : Senators McClel- lan and McNamara. )

The Chairman. The committee will be in order. We will proceed. Mr. Klenert, will you come around, please ?

TESTIMONY OF LLOYD KLENERT, ACCOMPANIED BY COUNSEL, JAMES H. McINERNEY— Resumed

Mr. Kennedy. Mr. Klenert, you were interested in April of 1952 in buying a home for yourself ?

Mr. Klenert. Yes, sir.

Mr. Kennedy. And Mr. Valente, president of the union, was also interested in buying a home ?

Mr. Klenert. That is correct.

Mr. Kennedy. You had selected two homes, had you, in Rock Creek Hills, in April of 1952?

Mr. Klenert. Yes, sir.

Mr. Kennedy. Now, the price of those two homes was $95,000 ?

Mr. Klenert. My home was $52,500, and Mr. Valente's was $42,500 and the total would be $95,000.

The Chairman. Yesterday, I understood, and we granted the re- quest, that you did not want pictures made. Some one of the photog- raphers advised me now that you had withdrawn your objections to it. Please advise the committee whether you do desire that they not be made, so that we will be governed accordingly.

3287

3288 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. McInerney. I would still like to make the request. I told these gentlemen I would consider it overnight, but I have come to the same conclusion this morning.

The Chairman. There will be no pictures, gentlemen. Let us pro- ceed.

Mr. Kennedy. So the two homes, one $42,500 and the other $52,500, amounted to $95,000, is that correct ?

Mr. Klenert. Yes, sir.

(At this point. Senator Goldwater entered the hearing room.)

Mr. Kennedy. During early May of 1952, your union borrowed $95,000,^is that correct? The union borrowed $95,000?

Mr. Klenert. The union, in effect at that time, I think posted that amount of bonds.

Mr. Kennedy. But they borrowed $95,000 ?

Mr. Klenert. And borrowed against that amount, yes, sir.

Mr. Kennedy. From the City Bank ?

Mr. Klenert. That is correct.

Mr. Kennedy. And that $95,000 was transferred to Martin J. Quigley of the Mutual Title Co. ?

Mr. Klenert. Yes, sir.

Mr. Kennedy. Now, that $95,000 was to cover the purchase of your two homes, is that right ?

Mr. Klenert. No, sir.

Mr. Kennedy. It was not ?

Mr. Klenert. No, sir.

Mr. Kennedy. $57,000 of that $95,000 was used for the purchase of your two homes.

Mr. Klenert. It eventually

Mr. Kennedy. If you would just answer the question, and then you can give your explanation.

Mr. Klenert. Well, I think I had explored this in conversations with your investigators, Mr. Kennedy, and explained to them that this arose

Mr. Kennedy. Could you just answer the question? $57,000 out of $95,000 was used for the purchase of your two homes.

Mr. Klenert. In effect, that occurred. Actually, we used that as a lay aside, for the purpose of laying aside, and we used it as a device to lay aside that amount of money in line with authorization and in- structions from the executive council of our organization.

Mr. Kennedy. Originally, of the $95,000 thaf you gave to the Mu- tual Title Co., $57,000, which was union funds, were used for the purchase of your two homes.

Mr. Klenert. Were put to use in that manner, yes.

Mr. Kennedy. Then, ultimately, on May 13, you received another loan from the Liberty National Bank, $100,000.

Mr. Klenert. Yes, sir.

Mr. Kennedy. ThatwasonMay 13, is that right?

Mr. Klenert. I am not familiar with the dates.

Mr. Kennedy. Approximately ?

Mr. Klenert. I would say that I imagine you have the records there and if it bears that date, I think we can assume that that date would be correct.

Mr. Kennedy. You received that loan on the basis that you were going to use that loan for the purchase of a headquarters for the union ?

IMPROPER ACTIVITIES IN THE LABOR FIELD 3289

Mr. Klenert. If I may, I would like to see those papers, and perhaps I could help to clarify this and give me a better recollection of it.

Mr. Kennedy. You do not remember that ?

Mr. Klenert. I am very vague on that.

Mr. Kennedy. We will show you the papers.

(The documents were handed to the witness. )

Mr. Kennedy. This has already been made an exhibit, Mr. Chair- man.

The Chairman. What exhibits are you presenting to the witness?

Mr. Calabrese. Exhibits 21, 22 and 23.

The Chairman. All right. Let the record show those three ex- hibits being presented to the witness at this time.

(At this point. Senator Goldwater