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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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Mr. Kennedy. When was it approved ?

Mr. BuERis. I think it was approved a couple of months ago, 2 or 3
months. I don't remember the exact date.

Mr. I^NNEDY. That is again from the Central States pension fund ?

Mr. BuRRis. That is right.

Mr. Kennedy. What is that loan for ?

Mr. BuRRis. For a housing project tliat is being constructed, and it
is going to be constinicted in Fullerton, Calif.

Mr. Kennedy. What interest do you pay on that ?

Mr. BuRRis. I don't remember. I think it is 6 percent. I am not
sure. I think it is 6 percent.

Mr. I^NNEDY. Did you speak to Mr, Hojfia about obtaining that
loan?

Mr. BuRRis. To Mr. HofFa personally ?

Mr. Kennedy. Yes.

Mr. BuRRis, No.

Mr. Kennedy. Did you speak to Mr. Benjamin Dranow about ob-
taining his help on that loan ?

Mr. BuRRis. About what ?

Mr. Kennedy. About obtaining his help on that loan.

Mr. BuRRis. No. I don't need his help in obtaining a loan.

Mr. Kennedy. Did you speak to him about the loan ?

Mr. BuRRis. Well, he knows that I made the application for the
loan.

Mr. Kennedy. Did he help you at all, as he helped you in the other
one?

Mr. BuRRis. Weil, I don't know exactly what you mean by "help."

Mr. Kennedy. Did he give you any assistance of any kind ?

Mr. BuRRis. No. I don't need any assistance.

Mr. Kennedy. I just want to find out if he gave you any. Did he
give you any assistance ?

Mr. BuRRis. No.

Mr. Kennedy. No assistance at all ?

Mr. BuRRis. Wlien you say "assistance," you mean physical assist-
ance of some kind ?

Mr. Kennedy. Did you consult with liim about it ; did you talk to
him about it?

Mr. BuRRis. Well, I might have talked to him about it, but I don't
need his assistance in presenting a loan.

Mr. Kennedy. Did he intercede in any way on your behalf to ob-
tain the loan ?

Mr. BuRRis. Not that I know of.

Mr. Kennedy. Did he relate to you that he had spoken to Mr. Hoffa
about obtaining the loan ?

Mr. BuRRis. Not that I know of .

Mr. Kennedy. You would know. I am just asking you if he told
you that.

Mr. BuRRis. No.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18987

Mr. Kennedy. Did he tell you that ?

Mr. BuRRis. Did he tell me that he would speak to Hoffa to get the
loan for me ?

Mr. Kennedy. Yes.

Mr. BuRRis. No.

Mr. Kennedy. Did he tell you he spoke to anyone to obtain the
loan for you ?

Mr. BuRRis. No, not that I can remember.

Mr. Kennedy. Have you had any other financial transactions with
Mr. Benjamin Dranow other than Sun Valley and union home and
land?

Mr. BuRRis. Well, I have loaned Mr. Dranow some money and he
has paid it back. It had nothing to do with Smi Valley.

Mr. Kennedy. Different sums at times ?

Mr. BuRRis. Difi'erent sums at times.

Mr. Kennedy. Tell us about that.

Mr. BuRRis. I would have to check the records. I loaned him
$22,000, which he paid back.

Mr. Kennedy. $22,000 ?

Mr. BuRRis. That is right.

Mr. Kennedy. "Wlien was that ?

Mr. BuRRis. I would have to check the records.

Mr. Kennedy. Last year was it ?

Mr. BuRRis. It might have been last year or the early part of this
year.

Mr. Kennedy. Wliat other loans have you made to him ?

Mr. BuRRis. I have made several loans back and forth, smaller
loans and larger loans. The last one was $25,000, wliich he paid
back.

Mr. Kennedy. When was that ?

Mr. BtJRRis. A few months ago.

Mr. Kennedy. So you loaned him money occasionally over the
period of the past year or year and a half ?

Mr. BuRRis. That is right. No, not a year and a half. Since last
fall.

Senator Curtis. Mr. Chairman, may I ask a question ?

The Chairman. Senator Curtis.,

Senator Curtis. As a CPA, have you done work for any branch of
the Teamsters Union ?

Mr. BuRRis. Yes, sir.

Senator Curtis. What services have you performed ?

Mr. Burris. Well, we looked over some pension fund agreements,
prepared some memorandums on it whether receiving pension in a
lump, a lump sum, or partial payment plan, and we have looked at
the systems m a couple of their branches to see whether they were
complete, and adequate and proper systems of accounting.

Senator Curits. And you certified them as such ?

Mr. BuRRis. No, we didn't certify to anything.

Senator Curtis. Over how long a period of time have you been
employed by the Teamsters ?

Mr, Burris. It is only in the last couple of months. That is special
emploj^ment. We are not really employees of the Teamsters.

Senator Curtis. They paid you for that ?



18988 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. BuRRis. Yes.

Senator Curtis. How much did they pay you ?

Mr. BuRRis. $3,000 inchiding the traveling expenses.

Senator Curtis. That is all.

INIr. Kennedy. Who arranged that ?

Mr. BuRRis. Well, originally a couple of the officials came up to
our office with the pension plans.

Mr. Kennedy. Who were they ?

Mr. BuRRis. I would have to check my records. I don't remember.
I am not very good at names.

Mr. Kennedy. Who finally made the arrangements for you to go
out and do this work ?

Mr. BuRRis. The final arrangements? There was a series of a
couple of arrangements and then we

Mr. Kennedy. Who did it?

Mr.BuRRis. Who did it?

Mr. Kennedy. Yes. Who arranged it ?

Mr. BuRRis. I can't hear you. You are talking too loud and I don't
get it on my hearing aid.

Mr. Kennedy. Who arranged for you to do the work for the
Teamsters ?

Mr. BuRRis. Well, I think they were recommendations to some of
the officials from Mr. Hoffa.

Mr. Kennedy. From Mr. Hoffa ?

Mr. BuRRis. I think so.

Mr. Kennedy. And who were the officials to whom he made the
recommendations ?

Mr. BuRRis. I would have to check my records.

The Chairman. Who were the officials you dealt with ?

Mr. BuRRis. I dealt with several. The original one, I think, was
some officials from Detroit. There were two or three who came up
to my office. I would have to check my records to get the names. I
am very poor at remembering.

The Chairman. Did this occur within the last couple of months?

Mr. BuRRis. Yes.

The Chairman. And you can't remember the name of a single one
of them?

Mr. BuRRis. Well, most of the time you met people in a group, and
I am hard of hearing anyway. Sometimes I even have my hearing
aid off.

The Chairman. Sometimes that could be an advantage.

Mr. BuRRis. I have a very poor memory for names anyway. Senator.
Everybody knows that. I can meet you and 2 hours later if you
weren't as prominent I wouldn't remember your name if you were
introduced to me.

Tlie Chairman. Do you think you are going to forget me in a
couple of hours ?

Mr. BuRRis. No, sir.

The Chairman. Do you know Mr. Hoffa personally ?

Mr, BuRRis. Well, I don't know just what you call personally. I
have only met him through business channels, never personally.

The Chairman. Through what?

Mr. BuRRis. Through normal routine what I called business clian-
nels, the same as I try to meet a lot of people.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18989

The Chairman. That is one way of getting acquainted with people,
through business channels, isn't it ?

Mr. BuRRis. Well, I mean in the course of normal professional at-
tempts to meet people so that you can build up your accounting and
professional practice.

The Chairman. We miderstand that. I am not asking anything
out of the ordinary. Do you know him personally ? You know what
I mean by that.

Mr. BuRRis. No, I wouldn't call myself a personal friend of Mr.
Hoffa.

The Chairman. I didn't ask anything about friendship. Do you
know him personally ? \Vlien you see him, do you know him ? Have
you met him ?

Mr. BuRRis. Yes, of course.
The Chairman. You have met him ?
Mr. BuRRis. Yes.

The Chairman, And you have had conversations with him ?
Mr. BuRRis. I have had some talks with him. In fact, I told him
I was a pretty good tax man, and so on.

The Chairman. You recommended yourself highly ?
Mr. BuRRis. Yes, sir ; I always do.

The Chairman. And he found out you were just the kind he
needed ?

Mr. BuRRis. Well, he and about 250 other of my clients who are not
connected with labor unions.

The Chairman. I didn't say they were._

Mr. BuRRis. Well, I just thought you might be

The Chairman. Was he there when you worked out these arrange-
ments for you to do this accounting work? Was he personally
present ?

Mr. Burris, No, on the original ones he wasn't personally present.
It was only when we came to a discussion of the fee that I went up
to see Mr. Hoffa and batted around with him.

The Chairman. You batted around with him so he knew about the
transaction. Why did you hesitate to say you knew him personally ?
Mr. Burris. I beg your pardon ?

The Chairman, Why did you Jiesitate? Why do we have to go
through all of this to drag out the fact you know him personally?

Mr. Burris. Because there is a difference in my opinion in knowing
a person personally and knowing a person.

The Chairman. There is a difference between person and personally.
Well, you draw the distinction.
Proceed.

Mr. Kennedy. Who introduced you to Mr. Hoffa ?
Mr. Burris. Who introduced me? I couldn't remember that. _ I
don't remember whether I was introduced to him or said hello to him
myself or met him somewhere.

Mr, Kennedy, Where did you meet him first ?

Mr, Burris, I wouldn't remember that offhand.

INIr, Kennedy. Wlien did you start to work for the Teamsters ?

Mr. Burris. For who ?

Mr. Kennedy. For the Teamsters.

Mr. Burris. I would have to check my records. I don't remember.



18990 IMPROPER ACXrVTriES IN THE LABOR FIELD

Mr. Kexn-edt. Was it in the last few months ?

Mr. BuRPJS. In the last few months.

Mr. Kennedy. This was after the loan was made to Mr. Roy
"Williams ; is that correct ?

Mr. Brpjiis. I would have to check my records. I wouldn't re-
member that offhand. I think so.

The Chairman. Did you bring the records with you on this matter?
Do you have them there ?

Mr. BiTRRis. On Roy Williams ? I don't think so.

Mr. Kennedy. Do you have your records there ?

The Chaikman. Don't you know what you have ?

(The witness conferred with his counsel.)

Mr. Bonus. Your investigators know the dates. Thev have copies
of all of this.

Mr. Kenn-edy. We haven't the names of the people who introduced
you or when you had the meetings.

Mr. BrRRis. You are talking about the loan of

Mr. Kennedy. January 26, this year, the loan was.

Mr. BrnRis. Xo ; that was after that date. I mean the work I did
after that date.

Mr. IvENNEDY. The work that you did for the Teamsters came after
that loan ?

Mr. BuKRis. Yes.

Mr. Kennedy. The two loans, Mr. Chairman, were — the first loan
of ST35.000 was made to the Buffalo Holding Corp. The second loan
of $1,400,000 was to the First Berkeley Corp. Is that right?

Mr. BrRRis. That is right.

Mr. Kennedy. Have you ever had any other financial transactions
with Mr. Dranow ?

Mr. Bttrris. Have I had any other finance — I told you I had some
transactions back and forth.

Mr. Kennedy. Other than the loans and this union land ?

Mr. Bupjus. Xot as far as I know; but when you ask it in front
of a committee, I would say I would have to check my records.

Mr. Kennedy. Will you check your records and give us the answer
to that, and also give us the names of the Teamsters' officials that you
met with for the first time ?

Mr. BuERis. All right.

Mr. Kennedy. Mr. Chairman, I would like to put some documents
into the record in connection with the second loan.

The CHAiEiiAN. All right.

Mr. Kennedy. ^Mr. May, Mr. Chairman.

The Chairman. Mr. May, please be sworn.

You do solemnly swear the evidence you shall give before this Senate
select committee shall be the truth, the whole truth, and nothing but
the truth, so help vou God ?

Mr. :May. I do."

TESTIMONY OF WAITER R. MAY

The Chairman. State your name and present position with this
committee and how long you have held it.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18991

Mr. May. Walter K. May, assistant counsel to the committee since
its inception.

The Chairman. And have you made an investigation of the subject
matters here under inquiry ?

Mr. Mat. Yes, sir ; I have.

The Chairman. Proceed.

Mr. Kennedy. You have a couple of letters that we want to place
into the record ?

Mr. May. Yes, sir.

Mr. Kennedy. Will you give us the substance of those letters, to
whom they are addressed and so forth ?

Mr. M-vY. This first letter is addressed to all trustees on the screen-
ing committee.

The Chairman. All trustees on what?

Mr. ^Iay. On the screening committee. Senator, that means the
Screening Committee of the Central States, Southeast-Southwest
Areas Pension Fund.

This letter is from the firm of Goldberg, Previant & Cooper, by
Alfred G. Goldberg, who at this time conducted some inquiries into the
situations regarding the applications for loans.

The Chairman. What applications?

Mr. May. All applications for loans during this period. The letter
reads :

I enclose herewith an application and supporting data for the first mortgage
loan submitted by the First Berkeley Coi-p. of New York City in the sum of
$1,500,000 on a garden apartment development to be constructed in Fullerton,
Calif., which is in a suburb of Dos Angeles. The application states that they want
to amortize the loan at the rate of 9 percent, which is $135,000 per year, 6 percent
being on interest and the balance on principal.

The Chairman. Is that a photostatic copy of the letter ?

Mr. May. Yes, sir.

The Chairman. It may be made exhibit No. 17.

(Letter referred to was marked "Exhibit No. 17'' for reference and
will be found in the appendix on p. 19128.)

Mr. May. I have here a second letter dated February 6, 1959, di-
rex^ted to Mr. Alfred Goldberg, Padway, Goldberg & Previant, Mil-
waukee, Wis., and it is from James R. Hoffa, general president of the
Teamsters, and it reads :

Dear Al : I am returning to you the file on garden apartment development at
Fullerton, Calif. After going over the material submitted, I would recommend as
one member of the screening committee that a subcommittee be set up for further
investigation of this project and if it can meet the requirement of the fund where
Ihe loan is not in excess of 66 percent, I will vote in behalf of the loan. I would
appreciate your taking this up at the meeting on the ninth as my recommendation.

The Chairman. That letter may be made exhibit No. 18.

(Letter referred to was marked' "Exhibit No. 18" for reference and
will be found in the appendix on p. 19129.)

Mr. Kennedy. That letter is dated February 6 ?

Mr. May. Yes.

Mr. Kennedy. And the letter that went with all of this material to
the individual members of the screening committee was sent out on
February 5 ?

Mr. May. Yes, sir.

Mr. Kennedy. This was sent out the following day ?

36751— 59— pt. 54 14



18992 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Mat. That is true.

Mr. I^NNEDY. So he had reviewed it and made a recommendation in
connection with it ?

Mr. May. Yes, sir.

The Chairman. Is there any thing further ?

Mr. Kennedy. Could we try to finish up with this one subject?

The Chairman. All right.

Thank you very much. You may stand aside for the present.

Call the next witness.

Mr. Kennedy. Mr. Blum.

The Chairman. Mr. Blum, be sworn, please.

You do solemnly swear the evidence you shall give before this Sen-
ate select committee shall be the truth, the whole truth, and nothing
but the truth, so help you God ?

Mr. Blum. I do.

TESTIMONY OF IRVING BLUM, ACCOMPANIED BY COUNSEL,
N. J. SCHUMER

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

Mr. Blum. Irving Blum, 200 East Mosholu Parkway, New York.
Real estate and accountant.

The Chairman. Thank you. You have counsel with you ?

Mr. Blum. Yes. He is my associate and counsel.

The Chairman. You have a right to have counsel.

Do you appear as counsel ?

Mr. Schumer. As counsel, yes.

The Chairman. Will you identify yourself for the record ?

Mr. Schumer. N. J. Schumer, New York.

Mr. Kennedy. Mr. Blum, you have, for a number of years, been
a land developer ?

Mr. Blum. Yes, sir.

Mr. Kennedy. Particularly in Florida properties; is that right?

Mr. Blum. Yes, sir.

Mr. ICennedy. You have had some business dealings with S. George
Burris in the course of time ?

Mr. Blum. I do.

Mr. Kennedy. In the early fall of 1958 you were approached by
George Burris, is that right, who attempted to interest you and a
group of others in purchasing Sun Valley ?

Mr. Blum. I did.

Mr. Kennedy. And at that time the stock of Sun Valley was owned
by Union Land & Home Co. ; is that what you understood?

Mr. Blum. At that time ; yes.

Mr. Kennedy. xVnd he had an interest at that time?

Mr. Blum. That is right.

Mr. Kennedy. What did he tell you initially as to where they un-
derstood the financing was going to come from ?

Mr. Blum. Well, originally he told me there were a lot of roads to
be built and it would require substantial sums of money and he thought
he could get it from the union.

Mr. Kennedy. From the Teamsters Union ?



IMPROPER ACTIVITIES IN THE LABOR FIELD 18993

Mr. Bltjm. The Teamsters Union.

Mr. IvENNEDY. This is what Mr. Burris told you ?

Mr. Blum. That is right.

Mr. I^NNEDT. Would you relate what other conversations you had
with him ?

Mr. Blum. He told me there was a valuable piece of property at
Cocoa, Fla., and there were about 1,700 contracts that were sold there,
but the union members received nothing for it, there were no roads, no
developments there, and he wanted somebody to go in there and put it
in shape.

Mr. Kennedy. And he told you initially that they expected the
financing would come from the Teamsters Union itself ?

Mr. Blum. For the road work.

Mr. Kennedy. For the road work ?

Mr. Blum. That is right.

Mr. Kennedy. Wliat did you do ? What further information did
you find out about it ?

Mr. Blum. We took a trip down there. We checked into the prop-
erty and it seemed all right. We hired a firm of attorneys in Orlando
to see what arrangements could be made with the bank down there to
take a part payment on the mortgage to step in. But after several
conferences we found out that it would have to be an all-cash deal.

Mr. Kennedy. What else did you learn about the property ?

Mr. Blum. As to its value ?

Mr. Kennedy. Yes.

Mr. Blum. Well, it was a valuable piece of property but it had been
mishandled.

Mr. Kennedy. In what way ?

Mr. Blum. Nothing had been done to put the property in shape.
There were a few houses built there, and a short road of about 2,000
feet. But there was no possibility for the purchasers to get into their
property. There was nothing there.

Mr. Kennedy. Did you understand that individuals had already
purchased some lots on this property ?

Mr. Blum. Yes, about 1,700.

Mr. Kennedy. 1,700 people?

Mr. Blum. 1,700 people had purchased lots, had contracts.

Mr. Kennedy. Were they able to determine where their lots were?

Mr. Blum. Well, not the way the property is now.

Mr. Kennedy. Were they able to get into their lots ?

Mr. Blum. No, it is just acreage now.

Mr. Kennedy. What had happened ? What did you understand was
the explanation for all of this ?

Mr. Blum. It seemed there had been a defalcation. Somebody got
away with some of the funds. People had no knowledge of oper-
ating a development and it just bogged down.

Senator Curtis. May I inquire?

Was it your understanding that the funds that somebody got away
with were principallv from the purchase money on these 1,700 lots
that they had sold?

Mr. Blum. As I understand it, yes.

Senator Curtis. Do you know whether the land was platted and
laid out on the records ? "



18994 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Blum. About half of the land was plotted.

Senator Curtis. But nothing had been done ?

Mr. Blum. No physical work had been done other than

Senator Curtis, That is, to identify the lines or lay out the streets
or anything ?

Mr. Blum. Nothing.

Senator Curtis. It was plotted on paper ?

Mr. Blum. Paper roads.

Senator Curtis. And only about half of it?

Mr. Blum. About half of it.

Senator Curtis. And the other half was not ?

Mr. Blum. No.

Mr. Kennedy. When you went to Florida, did you meet Mr. Ben-
jamin Dranow ?

Mr. Blum. Yes, sir.

Mr. Kennedy. I^'lio did you understand Dranow was ?

Mr. Blum. He told me he was the man who was able to purchase
the stock in this bankrupt company, and we were interested in pur-
chasing it if it was possible.

Mr. Kennedy, Did you understand he had any further connections
with it ?

Mr. Blum. With this development?

Mr. Kennedy. Yes.

Mr. Bluri. Not that I knew.

Mr. Kennedy. Was there any discussion at that time, while you
were down there, as to obtaining loans or obtaining money from any
source?

Mr. Blum, Well, we were going to obtain funds from a local bank
if we could, but the amount required was too large for us.

Mr. Kennedy, Did Mr, Dranow speak to you about the fact that
he could obtain some money for you ?

Mr. Blum. Well, that was the original discussion for the roadwork.

Mr. Kennedy. Did he make the statement or Mr. Burris ?

Mr, Blum, Mr, Burris did originally.

Mr. Kennedy. Did Mr. Dranow also tell you that ?

Mr. Blum. Yes, he thought that the funds could be available.

Mr. Kennedy. From the Teamsters ?

Mr. Blum, From the Teamsters,

Mr. Kennedy. Was any kind of a commission to be paid in con-
nection with obtaining those funds from the Teamsters ?

Mr, Blum, No, there was no commission. We had set up a price of
$150,000 for the stock when it would be turned over to us, and we would
have to pay 100 percent to the creditors of this corporation,

Mr, Kennedy. This was initially.

Subsequently, did Mr. Burris speak to you again about obtaining
some money from the Teamsters Union ?

Mr, Blum. No. We dropped it after that because nobody was able
to ascertain which lots were sold and what direction it was and what
roads would have to be built.

Mr, Kennedy, So you dropped the Sun Valley project completely?

Mr, Blum, Yes, sir,

Mr. Kennedy. You refused to go into it ?

Mr. Blum. Yes, sir.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18995

Mr. Kennedy. Did Mr. Burris approach you subsequently in con-
nection with another piece of property and tell you that he thought
he could obtain a loan for you ?

Mr. Blum. Well, that was a building up in Buffalo.

Mr. Kennedy. What was the name of the building ?

Mr. Blum. It was an apartment house.

Mr. Kennedy. That you owned ?

Mr. Blum. No. We had an option to purchase it.

Mr. Kennedy. What statement did he make to you at that time?

Mr. Blum. He thought that I should make an application for it,
and maybe the loan would be obtained.

Mr. Kennedy. To the Teamsters ?

Mr. Blum. I don't know whether it was the Teamsters or pension
fund. I don't know what they call it.

Mr. Kennedy. Did he say there would be any charge if you did
obtain a loan ?

Mr. Blum. It wasn't a charge. He said the expenses would run
approximately 5 percent. There is an examining committee, legal
work, all types of things that have to be done.

Mr. Kennedy. But did he state to you at that time that you would
have to pay approximately 5 percent to obtain the loan ?

Mr. Blum. He said the cost would run roughly 5 percent.

Mr. Kennedy. Mr. Chairman, I might say that we made an investi-
gation into this matter, and we will have further testimony in con-
nection with approaches made to various people who obtained loans
and the payment of 5 percent — 5 or 10 percent.

But there is no such payment required by the authorities of the
Central States Pension and Welfare Fund.

He stated to you at that time that you would have to pay 5 per-
cent if you obtained the loan ; is that correct ?

Mr. Blum. Well, it would be for the expenses, whatever that would
incur, legal work and — what do you call it — title policy, and so forth.

The Chairman. It also included a finder's fee, did it ?

Mr. Blum. Well, it included everything.

The Chairman. A finder's fee. That is where someone says, "I
know where you can get a loan" and if you succeed in getting it, he
expects you to pay him a fee for finding the place where you can get
the loan ; is that correct ?

Mr. ScHUMER. I don't think that is correct.

The Chairman. What is a finder's fee ?

Mr. Schumer. A finder's fee is an ordinary commission. But 5
percent is a very low charge for the cost on any kind of a mortgage
as far as my knowledge is concerned.

The Chairman. I am not talking about that. I saw something in
the notes I had about a finder's fee. Was anything said about the
finder's fee?

Mr. Blum. I think we have the two items mixed, if you please. We



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