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"I wouldn't know that, sir," he replied contemptuously, "you'd have to take that up with my tax attorney." Like many another witness, Knohl was called before the committee because of his dealings with Caudle. Knohl was an "investigator" for Samuel Aaron and Jacob Friedus, New Yorkers later convicted of income-tax evasion. With Friedus, he recalled, he met Tax Prosecutor Caudle at the Department of Justice. "Caudle said, 'Mr. Friedus, this office has no persecution complex,' " Knohl testified.
Then he ran into Caudle one day in the cocktail lounge of the Mayflower. Mimicking Caudle's North Carolina accent, Knohl said the Caudle greeting was: "Howaya podner; what yo' doin' heya?" "I told him I wanted to buy a plane," testified Knohl. "Caudle said he had a friend with two planes who needed money."
Knohl bought one of them and Caudle picked up $5,000 commission. Two weeks later, Caudle recommended no prosecution of Samuel Aaron on grounds of illness, although a Government physician said he was able to stand trial.
A Hollow Sound. Their heads spinning from the dizzy course of the testimony, subcommittee members asked the Justice Department to find out who was lying in the Teitelbaum case. Attorney General J. Howard McGrath ordered a grand jury investigation into all aspects of the case, not just the perjury question. Then, in an impassioned speech before the Federal Bar Association (Government lawyers and other attorneys who practice before federal agencies), he defended the honor of the U.S. Government's lawyers. He pinned on the first lapel button in the association's membership campaign, and said in a quivering voice: "Let this button on the lapels of the Government's attorneys be a symbol to all the Teitelbaums, the Nathans, the Nasters and the Menkins that we are unapproachable by their low and filthy position in society."
After the week's testimony, the Attorney General's stirring words had a hollow sound. Wildly tangled as they were, the scandal trails kept leading right back to the door of Theron Lamar Caudle, who was one of McGrath's well-beloved top assistants until a few weeks ago.