INVESTIGATIONS: A Great Week for Legality

  • Share
  • Read Later

To make money out of politics is not necessarily illegal. Last week's news brought some fascinating examples of the fine legalistic feathers that sometimes protect fat political birds.

A Diary. In Washington, an old (69) man, John Ernest Toole, told an investigating Senate subcommittee that in 1944 he was chief loan analyst for the old Small War Plants Corp. One of his last official acts was approval of a $1,671,000 loan to the American Lithofold Corp. of St. Louis. Immediately afterward, he became Lithofold's treasurer. Nothing illegal about that. Besides, no one was questioning Toole's integrity. The committee was interested in what he remembered about American

Lithofold's subsequent loan dealings with the Government.

In 1948 and 1949, with its president and his family drawing $200,000 in salaries, with some salesmen earning more than $100,000 in commissions, American Lithofold was losing money. Twice it applied for an RFC loan. Twice it was refused. Refreshing his memory from a voluminous diary, Toole gave an account of his company's negotiations. Company officials held a council of war in Washington. Present was James P. Finnegan, then Federal Collector of Internal Revenue in St. Louis. No one had told Toole that Finnegan was on the corporation's payroll. At the time, Toole could only wonder why a federal official from St. Louis was attending a company conference in Washington, and why Finnegan later handed Lithofold an $800 expense account (for a short trip). (A grand jury is now trying to determine whether there was anything illegal in this and other acts of Finnegan.)

Successful Phone Call. Someone at the conference—Toole couldn't remember who—mentioned the magic name of Bill Boyle, now chairman of the Democratic National Committee. The American Lithofold people went to Boyle's Washington office. Boyle called Harley Hise, then RFC chairman, and said, "Harley, I have some friends in the office here of Jim Finnegan's. I would like for you to arrange to see them this afternoon if possible in connection with a loan." Toole recorded in his diary that, three days after this phone call, the loan application reached a "strange, strenuous and . . . satisfactory solution": Lithofold received the first of three loans that were to reach a total of $645,000.

The committee asked Toole if he still worked for Lithofold. He replied ruefully that he did not know. "Have any of you gentlemen ever kept a diary?" he asked. "I'll never keep one again."

Meanwhile, before another Senate committee, Bill Boyle was busy throwing dust. Senator Margaret Chase Smith of Maine asked him why he permitted E. Merl (mink coat) Young to work for him when he was an official of the 1948 Democratic campaign. "There must be some confusion," Boyle replied. "I was a volunteer worker in the 1948 campaign ... I held no title ... or office . . . I've certainly striven to conduct myself as my mother would want me."

  1. Previous Page
  2. 1
  3. 2