Thursday, November 17, 1949-Mr. Merl Young telephoned-made appointment for Mr. Daniel J. Hanlon to call on Mr. Dunham at 11:30. Tuesday, November 22, 1949-Mr. Merl Young telephoned. Friday, January 13, 1950-Mr. Jim Haswell, Detroit Free Press, telephoned re information in connection with Merl Young. Friday, January 13, 1950-Mr. Merl Young telephoned over EX 0988. Thursday, January 19, 1950-Telephoned Mr. Merl Young to invite him to lunch. Mr. Young already committed today-made arrangements to lunch tomorrow at the Statler Hotel. Friday, January 20, 1950-Mr. Dunham lunched with Messrs. Merl Young and Ed Willett, at the Statler Hotel. Thursday, February 9, 1950-Mr. Merl Young telephoned (personal matter). Friday, February 10, 1950-Lunched with Messrs. Merl Young, Leo Nielson and Kenneth Burns at the Statler Hotel. Tuesday, February 14, 1950-Mr. Merl Young telephoned-Mr. Dunham was not in the office. Said he would call later but he did not. Thursday, February 16, 1950-Mr. Merl Young telephoned. Friday, March 10, 1950-Mr. Dunham lunched with Mr. Merl Young at the Statler Hotel. Thursday, March 23, 1950-Mr. Dunham attended Chatterbox luncheon at Statler Hotel as guest of Merl Young. Wednesday, April 12, 1950-Mr. Dunham lunched with Merl Young, Rex Jacobs and Mrs. Jacobs at the Statler Hotel. Friday, May 12, 1950-Lunched with Merl Young. Friday, May 26, 1950-Lunched with Mr. Merl Young at the Statler Hotel. Mr. Harry McDonald of the SEC joined them. Mr. Dunham also saw Doug Mode there. Thursday, June 1, 1950-Merl Young telephoned over Executive 0988-talked later with Mr. Dunham at home. Wednesday, June 14, 1950-Mr. Dunham lunched with Messrs. Rex Jacobs, Ed Willett, and Merl Young at the Statler Hotel. Friday, July 7, 1950-Mr. Merl Young telephoned. Wednesday, July 19, 1950-Mr. Merl Young telephoned. Discussed matter of appointment George Tribble, now a member of the Board of Preferred Accident, to the presidency. Mr. Dunham stated that, in view of the investigation being conducted at the present time, the safest course to follow is to do nothing until the report is completed. If it develops that the company is being badly managed, it is up to us to make a change. Also mentioned the fact that Bill Boyle had sent Leo Parker over to discuss possibility of being appointed a director of Preferred Accident. Thursday, July 20, 1950-Mr. Merl Young telephoned re Central Iron & Steel Application. Mr. Dunham said he will talk with Frank Williams re this matter. Wednesday, August 9, 1950-Mr. Merl Young called Mr. Dunham. Senator HOEY. We will meet tomorrow morning at 10 o'clock. (Whereupon at 4:50 p. m. the committee adjourned to reconvene at 10:00 a. m. Friday, September 14, 1951.) INFLUENCE IN GOVERNMENT PROCUREMENT FRIDAY, SEPTEMBER 14, 1951 UNITED STATES SENATE, The subcommittee met at 10: 10 a. m., pursuant to adjournment, in room 357, Senate Office Building, Senator Clyde R. Hoey (chairman of the subcommittee) presiding. Present: Senator Clyde R. Hoey of North Carolina; Senator John L. McClellan of Arkansas; Senator Thomas R. Underwood of Kentucky; Senator Karl E. Mundt of South Dakota; and Senator Richard M. Nixon of California. Also present: Francis D. Flanagan, chief counsel; Howell J. Hatcher, chief assistant counsel; Carmine S. Bellino, accounting consultant: Jerome S. Adlerman, assistant counsel; William Leece, assistant counsel; and Ruth Young, clerk. Senator HOEY. The subcommittee will come to order. Mr. Toole will come back to the stand. Mr. Flanagan will continue the examination. Mr. FLANAGAN. The record will show that Mr. Toole was previously sworn in this case. Mr. Toole, going back to your diary, I want to cover one item that we overlooked yesterday. On November 17, 1948, you have this to say, discussing the RFC loan generally: Meanwhile Stanhope telephoned that R. J. had requested the forwarding of copies of all my letters to RFC on this new loan to him in Washington as he would have James P. Finnegan to "go over" same and see what could be done. All of which is contrary to my liking and previous information given Mr. Blauner. Do you recall that incident? FURTHER TESTIMONY OF JOHN ERNEST TOOLE, NEW YORK, N. Y. Mr. TOOLE. Yes, sir; I do. Mr. FLANAGAN. Were you in St. Louis at that time? Mr. TOOLE. Well, just as far as I can recall, I think I was in New York. Mr. FLANAGAN. In any event, Stanhope did call you and tell you that all letters that you wrote to the RFC in this case should be forwarded so that they could be turned over to James Finnegan who was going to be in Washington. Mr. TOOLE. That is right. Mr. FLANAGAN. And you state here that this was all contrary to your liking and previous information given Mr. Blauner. Do you recall any previous discussions you had with Mr. Blauner about giving information to Finnegan concerning this loan or using Finnegan in connection with the loan? Mr. TOOLE. I don't recall anything specific that I may have said to Mr. Blauner along that line, but all the tone and tenor of my whole conversation about anything relating to any outside influences was always averse to it, against it. Mr. FLANAGAN. You felt that Finnegan would be outside influence? Mr. TOOLE. Well, I would have considered anybody outside that was not working for the corporation. Mr. FLANAGAN. We will continue on with your diary on the 7th of February. Mr. TOOLE. 1949? Mr. FLANAGAN. 1949. We covered that yesterday, so we will go on to the 16th of February. That is where we left off yesterday, the 7th. Mr. TOOLE. Yes, sir. Mr. FLANAGAN. We will go on to the 16th now. Mr. TOOLE. Sixteenth, yes. Mr. FLANAGAN. Sixteenth. You state on the 16th Senator MUNDT. Before we get away from 1948, I would like to have Mr. Toole elaborate a little bit on an item I check in 1948. Mr. FLANAGAN. Go ahead. Senator MUNDT. On December 10, 1948, Mr. Toole, page 44 of your diary, you state: Called Donald Dawson's office where he is administrative assistant to President Truman on all important personnel appointments, and tried to get in for a few minutes sometime today. Miss Shannon, his secretary, was ill today but her assistant promised to phone me during the day if a little time could be "squeezed" out of a busy and strenuous day. Meanwhile I went to American Lithofold's office at 1437 K Street and talked with Blauner and Circele who had flown from New York to have lunch with some "big wig" of the Navy Department. Took Mr. Green and Mr. Melaney to the Hotel Statler for lunch as requested by R. J. B. I was wondering whether that call to the White House was in connection with this business or whether you were a personal friend of Mr. Dawson? Mr. TOOLE. Well, the answer is, yes and no. I had no thought of going to talk to Mr. Dawson about a loan. Mr. Dawson had at one time been personnel director of the RFC during the days that I was employed there as an examiner, and in that capacity I had known him, and likewise I had known Mrs. Dawson, who, even long before she married Dawson, had been there, and I had known her as Miss Patton, who later became Mrs. Dawson, and I think somewhere in the diary is recited the fact that I asked her one day if it would be all right for me to drop in and see him, and would she be good enough to arrange it, and she did call, and this is subsequent to that, as I recall it now. But I didn't see him, had never seen him since he left the RFC, and didn't even talk to him on the telephone. I had no thought of trying to get his influence on the loan. Senator MUNDT. Yes. Then you say on that same day, I believe, "Took Mr. Green and Mr. Melaney to the Hotel Statler for lunch as requested by R. J. B.” Mr. TOOLE. Yes, sir. Senator MUNDT. I want to go into that luncheon-I do not want to go into the details any further, but I wondered who this Mr. Green was. Mr. TOOLE. Well, Mr. Green was almost new to me then. He was a recent acquisition of the company as some kind of an employee in the Washington office, which is supposed to be a sales office. Senator MUNDT. Is it Cecil Green? Mr. TOOLE. Cecil Green, generally known as Cec Green, but I think his name was Cecil. Senator MUNDT. Had you met him before this date of December 10, 1948? Mr. TOOLE. I am not sure, sir, whether I had or not. Maybe I had a few times, but I had never seen him, seen but very little of him up to that time. Senator MUNDT. You say you were requested by R. J. B. That is R. J. Blauner, I presume, to take Mr. Green and Mr. Melaney to the Hotel Statler for lunch. Refresh my mind as to who is Mr. Melaney? Mr. TOOLE. As I recall it-I am sure I am right about this-this was a prospective new employee in the sales force with another similar company, one making forms that Mr. Blauner thought would be helpful to the company, and just asked me as a courtesy, since he had other things to do, if I would not be good enough to take those two men to lunch. Senator MUNDT. While we are on the subject of Mr. Green, as treasurer of the company could you sort of give us a job analysis of the work done for the company by Mr. Cecil Green? Mr. TOOLE. I could not give you that at all because I don't know of any work that he actually did. I have heard him talk about calls he made on various people, largely, I think, in Government agencies, but I don't know personally of any actual accomplishment. Senator MUNDT. To your personal knowledge he accomplished nothing concrete for the company and did not do any actual work-he did no actual work, is that right? Mr. TOOLE. None that I could really testify to; no, sir. Senator MUNDT. He was receiving $10,000 a year from the company. Mr. TOOLE. I don't know what his salary was. I never did know, except I did make an inquiry of Mr. Stanhope in St. Louis on one occasion, and asked him what his salary was. I felt like as treasurer, I ought to know that. Senator MUNDT. I would think so. Mr. TOOLE. And I think he told me $250 or $300 a week. That is my offhand recollection. I am not sure about that being right. Senator MUNDT. He was probably referring to his salary and ex penses. Mr. TOOLE. Perhaps. Senator MUNDT. Because his salary was $10,000 a year, and an expense account on top of that. Mr. TOOLE. That would be more than that; perhaps that, yes sir. Senator MUNDT. That is all. Senator HOEY. Mr. Flanagan, you may proceed. Mr. FLANAGAN. Now we will go on, Mr. Toole, to February 16. Mr. TOOLE. Yes, sir. Mr. FLANAGAN. Without reading the whole entry, it indicates that you had an appointment with Mr. Hise, the Chairman of the RFC, and you state this: He meaning Hise— argued against taking our case from Brodie and giving it to someone else; he said Brodie would be back Friday 18 and our case would get to the Board next week. Now, as you recall, Mr. Toole, Brodie at that time was- Mr. TOOLE. OK; I am with you now. Mr. FLANAGAN. You will recall that at that time. Mr. Brodie was assigned your case as the examiner. Do you have any recollection of why you went to see Hise to get the examiner changed? Mr. TOOLE. I do; I remember very well; because I had been informed he was taken off of this case and sent to North Carolina on some lumber-loan deal, and it looked to me as though we were being sort of cast aside for quite a spell, so I asked Mr. Hise if he wouldn't consider having somebody supplant Mr. Brodie in his absence, to carry on with the case. Mr. FLANAGAN. You wanted to expedite the case then? Mr. TOOLE. Yes. It had been hanging fire a long time, and I had been making numerous trips here, and I felt like we were entitled to an early consideration, it would seem like, and not waiting for Mr. Brodie's return from North Carolina. Mr. FLANAGAN. Did you have any difficulty at that time getting an appointment with Mr. Hise? Mr. TOOLE. Not a bit. Mr. FLANAGAN. You never had any difficulty getting an appointment with Mr. Hise? Mr. TOOLE. Never did; no. Mr. FLANAGAN. Now we will go to the 25th of February, and I will read the last part of it, Mr. Toole: After discussing with Charlie Lewis and Charlie Griffin the possible advantage of my making a final call on either Director Willett or Chairman Harley Hise, it was the consensus that I had done enough, and a further pleading at this the "11th" hour, might be a sign of uneasiness on our part and psychologically might be doubtful-hence it was banned. Now, who was Charlies Lewis? Mr. TOOLE. Charlie Lewis is also an examiner of the RFC, an old friend of mine. I had known him since 1907. Mr. FLANAGAN. And vou previously identified Charlie Griffin as also an official of the RFC? Mr. TOCLE. Yes, sir; they were both old acquaintances, both examiners of RFC. Mr. FLANAGAN. Do you recall your discussion with those gentlemen of going back to the members of the Board? Mr. TOOLE. Yes, sir; I have a recollection of that. Mr. FLANAGAN. After discussing it with them, you then decided not to do it, and thought it would be bad strategy at that last moment? |