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United States. Congress. Senate. Select Committee.

Investigation of improper activities in the labor or management field. Hearings before the Select Committee on Improper Activities in the Labor or Management Field (Volume pt. 54) online

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It would appear that Mr. Hoffa and Mr. Owen Bert Brennan v,ould
have made several hundreds of thousands of dollars individually.
For Mr. Henry Lower, this M^ould have been a profitable operation.

Mr. Henry Lower felt, evidently, that the land scheme up in De-
troit would be more profitable. The property in Florida is valu-
able, and it is a question of trying to work it out. We are going
now into what has happened to the property.

Senator Goldwater. How much money did the members themselves
put in by their own purchases ?

Mr. Iulnnedy. Several hundreds of thousands of dollars of sales.

Mr. Hoffa, for instance, sent Teamster Union officials down there
to review the property and then ^to go back and talk to Teamster
meetings about how good the property was and urge the members to
purchase property.

Then there were some outsiders who purchased property, such as
Johnny Dioguardi and some people like that.

Senator Goldwater. The corporation actually owned tlie land?

Mr. Kennedy. Yes.

Senator Goldwater. Are there assets there that the members might
get money back on ?

Mr. Kennedy. Yes. That is one phase of it. Tliat is the Henry
Lower aspect of it.

Then we come across on the other side — I am just giving this as
background for what we are going to try to do this morning — that in
Minneapolis, Minn., there was the John W. Thomas Department
Store, which had as its general manager a man by the name of Ben-
jamin Dranow.

Benjamin Dranow had come originally from Baltimore and had
become general manager of this department store. Mr. Hoffa, at his



18968 IMPROPER ACTIVITIES IN THE LABOR FIELD

urging, had $200,000 of Teamster funds loaned to this department
store, which at the time of the original loan was on strike by a fellow
AFL union.

Subsequently, Mr. Benjamin Dranow, the general manager, pur-
chased the department store by putting up a $175,000 note. Mr.
Hoffa then loaned the department store $1 million out of the welfare
funds.

The Chairman. Was that in addition to the $200,000 ?

Mr. Kennedy. Yes ; so that the total loan was $1,200,000.

The department store, shortly afterward, went into bankruptcy, and
Mr. Benjamin Dranow, Mr. Hoffa"s other friend, took off witli
$113,000 or $115,000.

In addition, Benjamin Dranow was very close to a Teamst-er Union
official in Minneapolis, Minn., by the name of Mr, Gerald Connolly.
Mr. Gerald Connolly had fled Florida after being involved in an
attempted murder in an organizing drive in Florida, and lie came
up and was made a Teamster Union official in Minneapolis. He was
indicted and convicted for taking money from an employer in early
1955, again on another case in late 1955, and in 1956 he placed dyna-
mite in the homes and automobiles of two Teamster officials who
refused to recognize his picket line. We have information that he
planned this bombing down in a hotel in Miami, Fla. He and
Dranow were staying in that hotel under fictitious names and made
the telephone calls to arrange the dynamiting from this hotel.

The bill for the hotel room, as we developed, was paid by the John
W. Thomas Department Store.

Mr. Benjamin Dranow is a very close associate of Mr. Hoffa. He,
for instance, purchased a $2,500 stole for Mrs. Owen Bert Brennan,
and we couldn't find any records that indicated 0\Ven Bert Brennan
ever paid for the mink stole. And then there was a $500 jacket for
Mrs. Hoffa.

We looked for Mr. Benjamin Dranow for approximately a year,
from the middle of 1957 to the middle of 1958. We finally found him.

He appeared before the committee in the middle of 1958 and took
the fifth amendment in connection with his operations and associa-
tions with Mr. Hoffa. We are now going into Dranow's further
activities during the period of time we were looking for him, his asso-
ciations with Mr. Hoffa during this period of time, and since the
period of time that we have had him before the committee, which is
approximately a year ago ; and we are going into Sim Valley.

The two individuals that will be involved this morning will be
Henry Lower, down in Sun Valley, and Mr. Benjamin Dranow, from
Minneapolis, Minn.

The Chairman. The purpose of this is to bring up to date the
events that have transpired since this matter was exposed before the
committee, to bring up the events and make the record current ; is that
correct ?

Mr. Kennedy. Yes. I think what we will see is that these hearings
do not seem to have a great deal of effect as a deterrent to the opera-
tions of some of these individuals.

The Chairman. In other words, it will further show that notwith-
standing exposures, no effort to clean up and correct these conditions
has occurred.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18969

Mr. IvENNEDY. In fact, I think we will see that some of them have
worsened.

The Chairman. Let's proceed.

Mr. Kennedy. This morning's hearing will be just the beginning
of this, Mr. Chairman, one of the first of some three events we are
going into.

The Chairman. Call the first witness.

Mr. Kennedy. Mr. Claude E. Davis.

The Chairman. 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. Da\^s. I do.

TESTIMONY OF CLAUDE E. DAVIS

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

Mr. Da>t[s. Claude E. Davis, Cocoa, Fla., president of the Barnett
National Bank.

The Chairman. You waive counsel, do you, Mr. Davis ?

Mr. Davis. I do.

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

Mr. IvENNEDY. You are the president of the Barnett National Bank;
is that right ?

Mr. Davis. Of Cocoa ; yes, sir.

Mr. IvENNEDY. Of Cocoa, Fla. ?

Mr. Davis. Eight.

Mr. Kennedy. And that bank is located some 14 miles from Sun
Valley ; is that correct ?

Mr. Davis. That is correct.

Mr. Kennedy. On or about October 8, 1958, did you receive a
telephone call at the bank ?

Mr. Davis. I did.

Mr. Kennedy. Was that telephone call from Mr. Benjamin Dranow ?

Mr. Davis. From someone who represented himself as Mr. Dranow;
yes, sir.

Mr. KJENNEDY. What did he state to you at that time ?

Mr. Davis. He asked me about ihaking a loan to he and some of his
associates who proposed to develop the Sun Valley project. In con-
sideration of that loan, he said that if the loan was too large for my
bank to make, that he could get me a participation with probably an
eastern bank.

He offered to place in my bank $1 million deposit.

The Chairman. From what ?

Mr. Davis. Teamster funds.

The Chairman. He had control of Teamsters funds?

Mr. Davis. I do not know that, but he stated

The Chairman. That was the implication of what he said to you,
that he could control the depositing of $1 million of Teamster funds ?

Mr. Davis. Yes, sir.

The Chairman. He said that to you as part of the inducement,
I assume, to get you to consider favorably his application for a loan.
That is the way you took it?



18970 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Davis. That is the way I took it ; yes, sir.

The Chairman. You couldn't take it any other way under the cir-
cumstances ; could you ?

Mr. Davis. No, sir.

Mr. Kennedy. Mr. Chairman, the very great point of interest here
is that we went into this matter in 1957. We went into it again in
1958. The Chair and the rest of the members were highly critical
of the fact that Heniy Lower was able to place $500,000 of Teamsters
Union funds in a Florida bank to induce the bank to loan money on
this land scheme which he had a personal financial interest in.

The Chairman. And without interest ?

Mr. Kennedy. This money was to be without interest.

He could get $1 million in your bank and you would not have to
pay interest ?

Mr. Davis. Yes, sir.

Mr. Kennedy. If you, in turn, would make the loan ?

Mr. Daves. Eight.

Mr. EIennedy. Within 3 weeks of his appearance before this com-
mittee at which time he took the fifth amendment, he was down
there arranging to get control of the Sim Valley land project and
would place a million dollars of Teamsters funds in this bank with-
out interest.

Did he tell you what bank the rest of the money would come from?

Mr. Davis. No. Well, he gave me one bank that possibly would
participate, but he did not mention the second bank.

Mr. Ivennedy. Did he tell you that they had acquired this Sun
Valley project as of that time ?

Mr. Davis. He did not tell me that they had acquired it at that
time.

Mr. KJENNEDY. Did he tell you they were interested in acquiring it ?

Mr. Davis. He did.

Mr. KJENNEDY. And he identified it as the Sun Valley project ?

Mr. Davis. Yes, sir.

Mr. Kennedy. Mr. Chairman, once again, this bank is located 14
miles from Sun Valley and 40 miles from the other bank where Mr.
Henry Lower had been.

The Chairman. This is an altogether different bank to the one
they had deposited the $500,000 in without interest in order to induce
the bank to lend the money. What was the name of the other bank?

Mr. Kennedy. Florida National Bank of Orlando.

The Chairman. You are how far from Orlando ?

Mr. Davis. Approximately 42 miles.

The Chairman. Are you acquainted with the fact that this other
bank had aloan on this property ?

Mr. Davis. I knew that they did make a loan.

The Chairman. You knew that there was an outstanding loan ?

Mr. DA^as. Yes, sir.

The Chairman. Was it contemplated, according to your informa-
tion, that the moneys secured from you would go to the liquidation of
the other indebtedness and thus you would have a first lien or first
mortgage on the property ?

Mr. DA^^:s. We did not discuss it that far.

The Chairman. You didn't set that far?



IMPROPER ACTIVITIES IN THE LABOR FIELD 18971

Mr. DA^^s. No, sir.

The Chairman. Wliy'^

Mr. Davis. I asked for references of the people who would be asso-
ciated with him. I checked them out and I declined the loan.

The Chairman. I think your bank stockholders and directors
should commend you.

Senator Curtis. Mr. Chairman?

The Chairman. Senator Curtis.

Senator Curtis. During this period they were suggesting they
would place a large deposit in your bank, a Teamster deposit, was
mention made of any Teamsters officials ?

Mr. Da\ts. No, sir ; not as I know of.

Senator Curtis. In other words, Mr. Dranow gave the impression
that he would put it there, or cause it to be placed there ?

Mr. Da^ts. Yes, sir.

Senator Curtis. These associates that you checked out, were they
Teamsters officials ?

]\Ir. Davis. Not as I know of ; no, sir.

Senator Curtis. Where did most of them live ?

Mr. Davis. I would have to refer to my file.

Senator Curtis. Do you have your file here ?

Mr. Davis. Yes, sir.

Senator Curtis. If it doesn't take too long, tell me who he gave as
references and where they were located.

Mr. Daws. He gave a man who would be associated with him as
Mr. Blum, and gave for his references the Chemical Corn Exchange
Bank in New York.

He gave another man who proposed to be in the association as Mr.
Vaughn Connolly. He gave for reference the Florida National
Bank & Trust Co., of Miami, Fla.

He also gave as a reference for Mr. Blum the Marine Midland
Trust Co., of New York. He gave me his own, and Franklin Square
National, Franklin Square, Long Island.

He gave me Mr. Sanson, the Miami Beach First National Bank,
and also the First National Bank at Orlando.

And Mr. Connolly also was referred to the First National Bank
of Miami.

The Cpiairman. Did I understand they were to be his associates or
references he gave?

Mr. Davis. These were people who would be in with the building
project, so he told me.

The Chairman. In other words, they would have an interest in the
Sim Valley project ?

Mr. DA^TS. He said they would be in the building project with him.

The Chairman. That could be just the construction end of it.

Mr. Davis. Eight.

The Chairman. Is that correct ?

Mr. Davis. They could be.

The Chairman. They could be in the construction end of it ?

Mr. Da\ts. He did not say what their connection would be in the
project.

The Chairman. He did not say ?

Mr. Davis. No, sir.



18972 IMPROPER ACTIVITIES IN THE LABOR FIELD

The Chairman. But tliey were to be involved ?

Mr. Davis. That is right.

Senator Curtis. They were to be sort of partners in the venture ?

Mr. Daws. I would assume so.

Senator Curtis. This Blum, was that Irving Blum?

Mr. Davis. Yes, sir.

Senator Cubtis. .^nd Herman Oberman ? I don't believe you men-
tioned him.

Mr. Davis. I believe he gave his name, but I did not seem to have
checked him out. I do not see where I checked him out.

Senator Curtis. May I ask the staff : Is Irving Blum and Herman
Oberman, Stanton Sanson, and Winston — are they union officials, and
Vaughn Connolly, are they union officials, employees, or something?

Mr. Kennedy. They are not Teamsters officials. They are indi-
viduals for the most part in the real-estate business.

Senator Curtis. Are they connected with any other union?

Mr. Kennedy. Not that we know of .

Senator Curits. That is all,

Mr. Kennedy. For clarification of the record, this incident occurred
21 days after we put the facts into the record in connection with Sun
Valley, and it was during the period of time that we had been looking
for Mr. Benjamin Dranow. He ultimately appeared before the com-
mittee on November 17, 1958, But this was just 21 days after the com-
mittee had been highly critical of the fact that individuals were going
around promising deposits of Teamsters Union funds in return for
loans of money on transactions in which individuals had a personal
financial interest.

The Chairman. Let me ask the witness: Why did you reject the
loan?

Mr. Davts. Senator, the only thing I can say is I had a hunch.

The Chairman, Well, if you have others as good as this one, you
can, I think, pretty well rely on them.

In other words, did it appeal to you that they would put a million
dollars in your bank without interest ?

Mr. Davis. Not unless I had security to back up my loan it would
not ; no, sir.

The Chairman, In other words, you were doubtful of the security,
notwithstanding their promise to deposit. They were not pledging
those funds. It was simply an inducement to you, that, "Here is
a million dollars you can play with, get interest on, and so forth, en-
hance your deposits, and we will charge you no interest if you will
make this loan," That is what it amounted' to ?

Mr, I)a\ts, Yes, sir; but I am not interested in that kind of a
loan.

The Chairman. I think that is very much to your credit.

So this simply didn't have an appeal to you as the right kind of a
banking transaction.

Mr. Daves. Thank you.

Senator Curtis, Mr. Chairman ?

The Chairman. Senator Curtis.

Senator Curtis. Do we know what particular union funds were
offered here, what liranch or conference of Teamsters ?

Mr. Kennedy. No : we don't have the answer to that.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18973

The other funds that were sent down there, the $500,000, came out
of local 299, Mr. Hotfa's own local in Detroit.

I might sa}' that that money is still in that bank where he sent it
for Mr. Henry Lower. That money is still in that bank and still
paying no interest to the Teamsters Union.

Senator Curtis. Who are the principal officers of 299 ?

Mr. Kennedy. Mr. Hoffa is the principal officer.

The Chairman. That is the Orlando National Bank, the same
funds that we exposed in the previous hearing ?

Mr. Kennedy. Yes. It was the understanding, you see, when they
deposited the funds down there, that they would keep the funds down
there until they repaid the loan. When the whole operation went
bankrupt, the bank hadn't gotten its money back, so under the agree-
ment the Teamsters have to keep their money down there and they
pay no interest.

The Chairman. In other words, under the agxeement that money
is not subject to withdrawal ?

Mr. Kennedy. Until the bank gets its money back.

So the result is that the Teamsters Union members are losing at
least 2 percent

The Chairman. A"\niat is the going rate of interest that banks are
paying down there for time deposits ?

Mr. Davis. We were paying 2i/2 percent until July 1, and we are
paying 3 percent as of July 1.

Mr. I{!ennedy. It is all because of the fact that Mr. Hoffa, of course,
had a personal interest in this plan.

The Chairman. Is there anything further ?

Mr. Kennedy. That is all.

The Chairman. Thank you very much. We appreciate your ap-
pearance and your testimony.

Call the next witness.

Mr. KJENNEDY. S. George Burris.

The Chairman. Mr. Burris, be sworn.

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. Burris. I do.

TESTIMONY OF S. GEORGE BURRIS, ACCOMPANIED BY COUNSEL,
H. CLIFFORD ALLDER

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

Mr. Burris. My name is S, George Burris. I am a certified public
accountant. My address is at 19 West 44th Street, New York City.

The Chairman. Thank you. You have counsel.

Mr. Counsel, identify yourself for the record.

Mr. Allder. H. Clifford Allder, Washington, D.C.

The Chairman. Proceed.

Mr. Kennedy. How long have you been a certified public account-
ant, Mr. Burris ?

Mr. Burris. Since 1922.



18974 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Kennedy. Do you spell your name B-u-r-r-i-s ?

Mr. BuRRis. That is right.

Mr. Kennedy. You were also president of the Union Land & Home
Co.?

Mr. BuRRis. Yes, sir.

Mr. Kennedy. Incorporated ?

Mr. BuRRis. That is right.

Mr. Kennedy. ^Tiat property does Union Land & Home Co., Inc.,
own?

Mr. BxjRRis. What what?

Mr. Kennedy. What property does the Union Land & Home Co.
own?

Mr. BuRRis. What property ? Real estate?

Mr. Kennedy. Yes.

Mr. BuRRis. Well, I don't think it owns any real estate.

Mr. Kennedy. Does it own any? What is the Union Land &
Home

Mr. Btjrris. It owns, pertaining to this inquiry, it owns the stock
in Sun Valley, Inc.

The Chairman. Owns the stock ?

Mr. BuRRis. All the stock.

The Chairman. It owns all of the stock ?

Mr. BuRRis. The capital stock ; yes.

Mr. Chairman. It owns all the stock of Sun Valley, Inc. ?

Mr. Burris. That is right.

Senator Curtis. Does it have other assets ?

Mr. BuRRis. I think it has.

Senator Curtis. Are you an officer in it ?

Mr. BuRRis. Am I what ?

Senator Curtis. Are you an officer in the Union Land & Home Co. ?

Mr. BuRRis. Yes. I am the president of Union Land & Home Co.

Senator Curtis. Then do they have other assets ?

Mr. Burris. They have other assets.

Senator Curtis. What is the nature of those assets ?

Mr. Burris. I would have to check the records to find that out.

Senator Curtis. You don't know whether it is stock in other
companies ?

Mr. Burris. I don't think so, but I don't know.

Senator Curtis. Do they own any mortgages ?

Mr. Burris. Yes ; I think it might own a mortgage.

Senator Curtis. It might own a mortgage ?

Mr. Burris. Or mortgages.

Senator Curtis. What is the total amount of mortgages tlmt are
owned ?

Mr. Burris. I would have to check that. I will get the information
from the real principal.

Senator Curtis. Would you say that its principal asset is the stock
in the Sun Valley development ?

Mr. Burris. Well, I don't know just what you mean by principal
asset.

Senator Curtis. Well, I would say considerably more than half.

Mr. Burris. I wouldn't know just how to define the word principal.
I would sav one of the assets is the Sun Vallev stock.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18975

Senator Curtis. Who are the stockholders in Union Land & Home
Co.?

Mr. BuRRis. Well, the stockholders of record are myself and Mr.
Harold Shapiro, an attorney.

Senator Curtis. Harold?

Mr. BuRRis. Shapiro.

Senator Curtis. What is his address ?

Mr. Burris. The address is in Miami, Fla.

Senator Curtis. You say you are the stockholders of record. For
whom do you hold the stock ?

Mr. BuRRis. For Mr. Benjamin Dranow.

Senator Curtis. He owns all of it ?

Mr. BuRRis. Well, we are holding it as his nominees.

Senator Curtis. As far as you know, he owns all of it ?

Mr. Burris. Well, we have an arrangement that if the proposition
is successful, we will probably sliare — I mean as far as I am con-
cerned, I don't know Mr. Shapiro's arrangements— that we will be
paid for the time and effort we put into the proposition.

Senator Curtis. How much money did he put into it?

Mr. BuRRis. I don't know.

Senator Curtis. Have you been president of it since it was incor-
porated ?

Mr. Burris. I think so.

Senator Curtis. Did anybody else put any money into it ?

Mr. Burris. Not as far as I know.

Senator Curtis. You don't know how much he put in ?

Mr. Burris. I don't know.

Senator Curtis. That is all, Mr. Chairman.

The Chairman. Do you mean you haven't put any money into it at
all?

Mr. Burris. Well, I advanced some expenses. I originally paid
some legal fees.

The Chairman. How much?

Mr. Burris. $2,500, which I subsequently got back.

The Chairmn. How much do you have in it now ?

Mr. Burris. In expenses ?

The Chairman. How much have you invested in it in dollars and
cents ?

Mr. Burris. I haven't tried to compute it.

The Chairman. Give us some idea.

Mr. Burris. Somewhere between $5,000 and $10,000.

The Chairman. That you have actually invested in it now ?

Mr. Burris. Well, between expenses and traveling. That would be
my guess at the moment.

The Chairman. Insofar as actually paying anything into the treas-
ury of the company, you haven't ?

Mr. Burris. No; I haven't.

The Chairman. You haven't made any investment so far as actu-
ally purchasing or making a payment on stock is concerned ?

Mr. Burris. That is right.

The Chairman. What percentage are you to get of the stock if the
thinir becomes successful ?



36751— 69— pt. 54



18976 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. BuRRis. Well, we have never determined that. We have never
gotten together on that.

The Chairman. You have never gotten together on that ?

Mr. BuRRis. No.

The Chairman. You mean there is no understanding ?

Mr. BuRRis. Well, as each proposition is worked out, we have an
imderstanding on the proposition.

The Chairman. Well, is this a proposition as to how much each
shall get?

Mr. BuRRis. I beg your pardon ?

The Chairman. Is that not a proposition as to how much each shall
get?

Mr. BuRRis. Well, it all depends on the eventual outcome. If the
proposition is profitable.

The Chairman. Of course, if it goes broke, bankrupt, it has no
assets after paying its debts, there would be nothing for anyone. That
is what you are trying to say ?

Mr. BuRRis. That is right.

The Chairman. Are you apprehensive that is going to be the out-
come of it ?

Mr. Burris. I don't think so.

The Chairman. If it is going to be successful, what do you antici-
pate your part of it is going to be ?

Mr. Burris. Well, we would sitdown and discuss it and work it out.

Mr. IvENNEDY. Have you received some loans from the Teamsters ?

Mr. Burris. Me, personally ?

Mr. Kennedy. You or any company in which you have had an
interest.

Mr. Burris. Yes, sir.

Mr. Kennedy. How much was that and to whom ?

Mr. Burris. Well, I received a loan. I am a principal in a building
in Buffalo, and we received a loan of $735,000 ; the Prudential Building
in Buffalo.

The Chairman. How much ?

Mr. Burris. $735,000.

Mr. Kjcnnedy. What building is that ?

Mr. Burris. The Prudential Building.

Mr. Kennedy. In Buffalo ?

Mr. Burris. In Buffalo.

Mr. I^nnedy. And you are the principal ?

Mr. Burris. I am one of the principals. I am the president and
one of the principal stockholders.

Mr. Ivennedy. From whom else did you receive loans ?

Mr. Burris. From whom else ?

Mr. Kennedy. From whom did you receive the loan ?

Mr. Burris. From the pension fund.

Mr. Kennedy. Of the Teamsters ?

Mr. Burris. Of the Teamsters Union ; yes.

Mr. Kennedy. Which pension fund?

Mr. Burris. The Central States, Southeast and — it is a long name —
Southeast and Southwest Areas Pension Fund. That is right.

Senator Curtis. Was it the Central States?

Mr. Burris. The Central States.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18977

Senator Curtis. How much did they put in ?

Mr. BuRRis. How much did who ?

Senator Curtis. The Central States Conference of the Teamsters.

Mr. BuRRis. They loaned us $735,000 on a first mortgage on the
property.

Senator Curtis. ^\^iat is the property worth ?



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