Mr. Moling, at the time you made the loan from the man connected with the Laurel Printing Co., was the Laurel Printing Co. doing business with the Air Force? Mr. MOLING. Not with the Air Force; no, sir. Senator MCCARTHY. Have they had some contracts with the Air Force since? Mr. MOLING. I would not know, sir. It is possible. Senator MCCARTHY. What dealings have the Laurel Printing Co. had with your department before you secured this loan? Mr. MOLING. I would not know that, sir. I mean, I never came in contact with them on that basis. They were on the bid list possibly, with the contracting officers, might have been getting work from the Government Printing Office. Senator MCCARTHY. How well had you known Mr. Weisler before you contacted him in regard to a loan? Mr. MOLING. I did not contact Mr. Weisler, sir. Senator MCCARTHY. Mr. Grossman. And Grossman was either the president or vice president of Laurel Printing? Mr. MOLING. I believe so. Senator MCCARTHY. And how well had you known Mr. Grossman? Mr. MOLING. Well, we were not strangers, but we were not good friends. Senator MCCARTHY. Well, that still is not very clear. Had you contacted him socially ever before? Mr. MOLING. I think we had had lunch together. I think we had had dinner together on one occasion, I recall it. Senator MCCARTHY. I still do not have the picture of why you singled out Mr. Grossman for the $6,000 loan. What was the occasion for that? Mr. MOLING. Well, at the time it was a very urgent matter and I would have contacted anybody I could think of. Senator MCCARTHY. You say Grossman was on your bid list? Mr. MOLING. I did not say he was. I say I thought he might be on the contracting bid list. Senator MCCARTHY. In your capacity with the Air Force what, if any, contacts had you made with Grossman's company, Laurel Printing Co. Mr. MOLING. I do not think we have made any, sir. Senator MCCARTHY. Did not make any? Mr. MOLING. No, sir. Senator MCCARTHY. Then you went to Grossman? Mr. MOLING. Printers were constantly coming in and out of our place all of the time, wanting to know what the procedures were, how to get Government business. Senator MCCARTHY. Do you know of any reason why Mr. Grossman would arrange this loan for you other than that he was interested in getting Government business-do you know of any other reason why he would arrange the loan for you? Mr. MOLING. I think under the circumstances he knew why I wanted it, thought he was doing a good job to help me out. Senator MCCARTHY. Do you know any reason? Mr. MOLING. I explained completely to him why I wanted the money. I think under the circumstances that anybody that had that much money would have done likewise. Senator MCCARTHY. In other words, you think this money came from Grossman, do you-you said that he had that much money? Mr. MOLING. No; I did not say that. I said under the circumstances I think any person or printer, knowing why I wanted the money, if he had it, would have lent it to me. Senator MCCARTHY. There is a difference, any person or any printer.. I can see any printer doing business with you. Mr. MOLING. Because I only knew printers; yes, sir. Senator MCCARTHY. Then what did Grossman say, tell you he would send you this lawyer? Mr. MOLING. No; he did not. He sent down here in Washington the two checks. Senator MCCARTHY. Grossman sent down two checks? Mr. MOLING. Yes, sir. Senator MCCARTHY. Both of them from the lawyer? Mr. MOLING. As I recall it; yes, sir. Senator MCCARTHY. And any correspondence along with the checks? Mr. MOLING. Notes for me to sign. Senator MCCARTHY. You signed the notes, did you? Mr. MOLING. Yes, sir. Senator MCCARTHY. Then sent them back to the lawyer? Mr. MOLING. Yes, sir. Senator MCCARTHY. And at that time did you have any property to offer as security? Mr. MOLING. No, sir; I did not. Senator MCCARTHY. Did you explain that to Mr. Weisler that you had no security whatsoever? Mr. MOLING. Well, he knew I did not have anything to offer. Senator MCCARTHY. Did you tell him that, that you had no security? Mr. MOLING. Yes, sir. And I told him why I had no security. Senator MCCARTHY. How much was the doctor's bill? Mr. MOLING. Can I go a little further there? Senator MCCARTHY. Yes. Mr. MOLING. The reason I did not have any security, I also had borrowed on my house. Senator MCCARTHY. How much was the doctor's bill? Mr. MOLING. I do not know, sir. Senator MCCARTHY. Roughly. Mr. MOLING. Oh, doctors and hospitals were maybe only $1,500. Senator MCCARTHY. About $1,500? Mr. MOLING. For the whole period of the year and a half. Senator MCCARTHY. For the period of a year and a half? Mr. MOLING. Yes. Senator MCCARTHY. You say that would total about $1,500? Senator MCCARTHY. That is all. Senator HOEY. Stand aside, Mr. Moling. You will furnish that statement to Mr. Flanagan signed by you? Mr. MOLING. Yes, sir. Senator HOEY. I think it should be said that the committee in its hearings last year and before of cases along this line emphasized the fact that it is highly improper for people in Government service to secure gratuities or loans or side business dealings from those who have business with the Government. This committee made that particularly clear in our investigation held last year. I want to emphasize it again. It applies not only to this case but to all cases. This committee regards it as highly improper for people in the Government service to receive loans or gratuities or have outside business dealings of that character with people who have business with the Government. Hold up your right hand. Do you solemnly swear that the evidence you shall give in this case shall be the truth, the whole truth, and nothing but the truth, so help you God? Mr. OLSON. I do. TESTIMONY OF JAMES B. E. OLSON, DOUGLASTON, LONG ISLAND, N. Y.; ACCOMPANIED BY WILLIAM W. KLEINMAN, ATTORNEY, BROOKLYN, N. Y. Senator HOEY. Have a seat. Senator MCCARTHY. May I say that I heartily agree with what the Chair has just said. I think we might well consider in view of the fact that we will be letting contracts for $60 billion or $70 billion over the next year it might be well if we would recommend legislation making it a criminal offense, placing the penalty very high, for anyone having to do with the letting of contracts, directly or indirectly, to receive any gifts of any type, otherwise the amount of graft and corruption is going to increase by leaps and bounds with additional contracts being let. Senator HOEY. I think that is true. Mr. Olson, we have just conferred. There is a joint session of the House and Senate at 12:15. There is only a short time now to 12 o'clock. We probably could not get through by 12. We have to leave at that time. So under those conditions I expect we had just better go over until the morning. We have about 20 minutes. Senator MCCARTHY. Before we start, may I also make a suggestion while I have it in mind? There are a number of contracts outstanding between the American Lithofold and the Government, some of them negotiated contracts and some on bids. I think it would be well if we would refer them to Mr. Lindsay Warren, a very competent individual, whom the Chair knows very well. Senator HOEY. The Comptroller. Senator MCCARTHY. It would be well to give him the task of very closely scrutinizing all of those contracts and reporting to us what he finds the situation to be. Senator MCCLELLAN. Why could we not get a list of the outstanding contracts with the company, the amount of each, and whether the contract was negotiated or whether it was made on bid? Mr. FLANAGAN. We are getting such information and propose to make it a part of this record. Senator MCCLELLAN. You are getting that? Mr. FLANAGAN. Yes, sir. Senator MCCARTHY. My reason for suggesting Mr. Lindsay Warren is that he is better equipped to do the task than our small staff is, and he has done an excellent job. Senator HOEY. We will see if we can make a little progress. Give your name and address to the reporter. Mr. OLSON. James B. E. Olson, 244-12 Rushmore Avenue, Douglaston, Long Island. Senator HOEY. The gentleman with you, is he your attorney? Senator HOEY. Let him give his name. Mr. KLEINMAN. William W. Kleinman, K-1-e-i-n-m-a-n, 66 Court Street, Brooklyn, N. Y. Senator HOEY. Mr. Olson, what position have you been holding with the Government for some time? Mr. OLSON. The district supervisor of the Alcohol Tax Unit, second district of New York. Senator HOEY. How long did you hold that position? Mr. OLSON. From January 13, 1947, until August 24, 1951. Mr. OLSON. I did, Mr. Chairman. Senator HOEY. Now, Mr. Olson, at what time did you accept employment from the American Lithofold Co.? Mr. OLSON. I believe it was on February 1, 1949. Senator HOEY. What was the contract agreement you had with the company? Mr. OLSON. I did not have any written contract. It was a verbal con tract. Senator HOEY. What was that? Mr. OLSON. To receive a drawing account. I believe it was $750 a month against commissions, starting on February 1, 1949. Senator HOEY. What services were you to render for this company? Mr. OLSON. To secure printing contracts for them with commercial or industrial houses. Senator HOEY. In what area? Mr. OLSON. In New York City or New York State. Senator HOEY. How long a time did you continue with the American Lithofold Co.? Mr. OLSON. I continued with them until June 21, I should say, officially this year. Senator HOEY. What was the total amount of payments that you received from American Lithofold Co. ? Mr. OLSON. I believe I received from their report, their 1099 in 1949, and I believe that amount of $3,250 and in 1950 an amount of about $2,600 and some odd cents. Senator HOEY. Making a total of how much value received from the company? Mr. ŎLSON. Roughly I would say about five-thousand-eight-hundred-and-some-odd dollars. Senator HOEY. Was that all for services in the line of what you have just described? Mr. OLSON. Yes, Mr. Chairman. Senator HOEY. All right now. How did you contact and what was the method that you adopted to get business for the company? Mr. OLSON. I did not contact anybody until around about June or July of 1949, and I have not contacted anybody since then. Senator HOEY. What contacts did you make during that time? Mr. OLSON. It was in July or August of 1949 that I called up the president of Ruppert & Co. and spoke to him with regard to sending somebody up from the American Lithofold Corp., as I understood that they were going to submit-going to receive bids on printing, and it would be all right to do it, and he stated, yes. It was then later, and I think it was in September or October, that I called up the head, or the vice president of Austin-Nichols and said— I called up Austin-Nichols, the president or the vice president, and they were going to receive bids, and I suggested the same thing to them, if the American Lithofold representative could see them, and they were qualified, and the price was correct so far as the bid was concerned, I'd appreciate their giving them consideration. Senator HOEY. All right. These concerns that you called up were engaged in what business? Mr. OLSON. One was a brewery, Ruppert's Brewery, and the other one was a wholesale liquor and importer dealer. Senator MCCARTHY. Speak louder. Mr. OLSON. Yes, sir. One was Ruppert's Brewery, and the AustinNichols are importers and wholesalers of liquor. Senator HOEY. Both of these institutions were under your supervision; were they not? Mr. OLSON. Yes, Mr. Chairman. Senator HOEY. And your supervision in charge of this Tax Unit was to make certain inspections of them? Mr. OLSON. Yes, sir. Senator HOEY. Had you performed that duty all along? Mr. OLSON. Yes, sir, before and after. Senator HOEY. Before and after. Did you contact any other people that you were supervising? Mr. OLSON. No, sir. Senator HOEY. Do you know what sort of business these two concerns gave the American Lithofold Corp. in volume? Mr. OLSON. No, sir. Senator HOEY. Because of your contacts? Mr. OLSON. No, sir. Senator HOEY. They did give them business, however? Mr. OLSON. Yes; I understand they did, but the amount I do not know even at this moment. Senator HOEY. Did you receive money from J. D. Nunan? Mr. OLSON. No, sir. Senator HOEY. Nunan? Mr. OLSON. Nunan, no, sir. Senator HOEY. What connection did Mr. Nunan have with the American Lithofold? Mr. OLSON. Mr. Nunan is associated with me, representing the American Lithofold Corp. Senator HOEY. He was a lawyer? Mr. OLSON. Yes, sir. Senator HOEY. Located in New York? Mr. OLSON. New York City, yes, sir. |