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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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were talking about a finder's fee when it came to getting Sun Valley.
He was entitled to a finder's fee.

The Chairman. He was entitled to a finder's fee for finding Sun
Valley for you ?

Mr. Blum. For arranging all the work and the things that went
into it. We had to arrange for all of that.



18996 IMPROPER ACTIVITIES IN THE LABOR FIELD

The Chairman. He would get 5 percent for that ?

Mr. Bluivi. No. The arrangement was, he would get $50,000 for
over a period of 5 years for doing the accounting for the project if
we went into it.

The Chairman. What was the finder's fee ?

Mr. Kennedy. When he spoke to you about obtaining a loan from
the pension fund in connection with the property in Buffalo, he told
you that there would be a 5-percent fee that would have to be paid ;
is that correct ?

Mr. Blum. Well, actually, in the conversation, I said, "What would
this cost?"

He said, "The expenses all around for everything would run rouglily
around 5 percent."

Mr. Kennedy. How much of that 5 percent did he say would go to
the f imd for appraisal, closing, and so forth ?

Mr. Blum, I really don't remember. It may have been 1 or 2 per-
cent.

Mr. I&:nnedy. Who would get the other 3 or 4 percent ?

Mr. Blum. Well, there was legal work — appraisals, title, policy— I
don't know, whatever is necessary to make a loan.

Mr. Kennedy. As to the actual operation of the pension fund, there
is nothing — there is no charge made of that kind. That is paid out
of the fund itself, so there is no charge of 5 percent. There is not a
charge by the Central States Pension and Welfare Fund.

Do you know where that money was actually to go ?

]Mr. Blum. We never got to a conclusion on it, so we dropped it.

Mr. Kennedy. Did he say how the application would be made ?

Mr. Blum. He said a committee would go there, examine the prop-
erty, get appraisals — and if it stood up all right, I would get the loan.
But when we went over the figures as to the interest charges and the
amortization, it didn't pay, so we dropped it.

Mr. Kennedy. That is all.

The Chairman. Anything further ?

Mr. Kennedy. We have one other matter in connection with this
that we can put in this afternoon. It is just an affidavit, Mr. Chair-
man.

The Chairman. All right.

Thank you very much. You may stand aside.

Read the affidavit. Be sworn.

You do solemnly swear the evidence you shall give before this
Senate select committee shall be the truth, the whole truth, and noth-
ing but the truth, so help you God ?

Mr. CoNSTANDY. I do.

TESTIMONY OF JOHN P. CONSTANDY

The Chairman. State your name and present position of employ-
ment with this committee.

Mr. CoNSTANDY. My name is John P. Constandy. I am employed
as assistant counsel with this committee for the past year and 2
months.

The Chairman. Have you made some investigation into the sub-
ject matter now under inquiry ?

Mr. Constandy. I have.



IMPROPER ACTIVITIES IN THE LABOR FIELD 18997

The Chairman. Proceed.

Mr. Kennedy. Mr. Chairman, there is a procedure as far as this
affidavit is concerned that I would like to explain.

We expected this gentleman to be a witness. At the last moment he
became ill and could not testify. He has cooperated with the com-
mittee, so we made arrangements to obtain an affidavit from him.
Unfortunately, we could make the arrangements only this morning.
He signed the affidavit and it has been notarized in Miami, Fla., and
he has given us an exact copy. We discussed it and had an exact
copy read over the telephone.

The Chairman. You have been assured that this affidavit, the origi-
nal, has actually been attested, and is in existence ?

Mr. CoNSTANDY. It is presently in the hands of a member of the
stail and is en route to Washington, as a matter of fact.

The Chairman. You may read the affidavit. If, for any reason,
we find any inaccuracy or that we are in error about the affidavit
having actually been issued, then this testimony will be stricken from
the record.

You may proceed.

Mr. CoNSTANDY. It reads :

Affidavit
State of Florida,
County of Dade, ss:

I, Stanton D. Sanson, 1417 North Venetian Way, Miami Beach, Fla., make
the following voluntary statement to John Constandy and Walter R. May who
have identified themselves to me as assistant counsels of the U.S. Senate Solect
Committee on Improper Activities in the Labor or Management Field. No
threats or promises were made to induce me to make this statement and I realize
that it may be used in public hearings before the committee.

I am and have been engaged in the construction and laud acquisition business.
In relation to this business, I and a group of associates, during the latter part
of 1957, made application to the Central States, Southeast, Southwest Areas, Pen-
sion Fund for a loan in the amount of $5 million to finance the construction of
an apartment house in the Miami Beach area.

The Committee for the pension fund did not want to grant the loan for
$5 million but wanted me to submit plans for a building half the size and they
would consider a loan for $2^/^ million.

While in Minneapolis, Minn., on other business, in the summer of 1956, I
conferred with Benjamin Dranow, whom I had met through an associate.
Dranow told me that if we wanted to^Jut the loan through, we would have to
have an understanding with Dranow regarding a commission, or finder's fee.

Dranow said that he thought he should receive a 10 percent commission or
finder's fee. At that point I told him to forget about it ; that we were not in-
terested at that price. We continued to discuss the matter and finally agreed
on a commission or finder's fee of 5 percent if the loan was obtained.

My associates felt that in view of the unfavorable publicity the Teamsters have
had, they did not care to obtain the loan. My own position, considering this,
was to let the matter go unless the Teamsters decided to grant the loan.

Sometime in the fall of 1958, Dranow visited me in Florida and told me about
the Sun Valley situation. He wanted to interest me in purchasing and develop-
ing Sun Valley. Dranow said James Hoffa was very anxious to get the thing
cleaned up and would do anything within reason that the person who under-
took it wanted.

Dranow indicated to me that if we bought Sun Valley, we could depend on very
liberal support from the Teamsters. Dranow said they would loan money for
the project, including the roads, sewage plant, and houses.
I told him I would make an analysis of the situation.

Around the same time, that is, the fall of 1958, I received a telephone call
from Benjamin Dranow who told me he had James Hoffa there with him and that
Hoffa wanted to say a few words to me. Mr. Hoffa said he was very anxious to
straighten out the Sim Valley situation. He said this is something that is a
"must," and asked us to go into it and see how we might straighten it out.



18998 IMPROPER ACTIVITIES IN THE LABOR FIELD

I did make an analysis and gave Dranow the original copy of my projection.
A carbon copy has been furnished to the U.S. Senate Select Committee on Im-
proper Activities in the Labor or Management Field and I hereby incorporate
and make it a part of this affidavit at this point.

I concluded after making my study that the Sun Valley project was hopeless
as a development investment as far as we were concerned. I have heard noth-
ing further from either Mr. Dranow or Mr. Hoffa about the Sun Valley matter.

The application for the loan for the proposed apartment project dragged on
for some time and was finally refused by the pension fund.

I have read the foregoing statement of three pages and declare it to be true
and correct.

(S) Stanton D. Sanson.
Ralph Mills, Witness.

Signed and sworn to before me this 29th day of June 1959.

Thekesa F. Litchfield, Notary PuUic.

Mr. Kennedy. Could I read excerpts from this ?

The Chairman. Do you identify this as a copy of the projection
which you have testified to ?

Mr. CoNSTANDY. Yes ; I do.

The Chairman. You may make the affidavit exhibit 19, and make
the projection exhibit 19 A.

(Affidavit referred to was marked "Exhibit No. 19"; projection was
marked "Exhibit No. 19-A", for reference and may be found in the
files of the select committee.)

Mr. Kennedy. This projection states :

However, the project shows that it was operated by people who did not under-
stand their business and it has been operated so poorly and with so little regard
to the fundamentals of this type of an operation, that it is the writer's considered
opinion that there is nothing that could be salvaged.

These lots, at the present time, are not marked, have no means of access
whatever, and are almost completely unusable. Anyone going ahead with this
proposition would have to assume the moral, if not legal, commitment to the
lot holders of providing them with suitable access streets and doing other
things in this development which are necessary to make it a successful one.
There are approximately 40 miles of access streets required and a minimum
quality street — not, in any way, to stand long-term service — would cost, at the
very minimum, $7,500 a mile. For 40 miles of these streets, that would be at
least $300,000 for the streets alone. The contract with the lot holders does not
provide for the creation of streets, but I believe that, under Florida law, the
developer would be compelled to give the lot holders access to and from the
lots and this can only be accomplished by streets. In addition to that, only
common decency would require any developer to provide streets for his lot
owners. In addition, these lots have never been marked. I do not know whether
you realize what I mean by this or not ; but, in order to find any piece of
unmarked land, it is necessary to send out a team of surveyors who start from
the nearest Government marker, which are 5 miles apart, and then, by a process
of surveying and mathematics, finally arrive at the exact location of the area
which is being surveyed. They then mark the area so that the owner, for aU
time, will have monuments or stakes erected so that the corners of his prop-
erty are outlined by such monuments or stakes and he knows where to find the
proi)erty. This applies to large properties as well as small properties. An abso-
lutely necessary prerequisite, before construction or a home can be built on
any lot, is to have the lot marked by four stakes, showing the four corners of
the lot. To do this on a mass basis, where the entire area is staked out at one
time, would cost approximately $10 to $15 a lot, but, for an individual lot owner
to come in and try and find his lot and mark it out, would require the sending
into the field of a team of surveyors and the very minimum that this would cost
would be $150 a lot and, probably, considerably more. If the entire area that
has been sold is to be staked out at this time, it would cost between $20,000 and
$30,000 to do so. There is a minimum expense to do the absolutely necessary
things to make good the moral obligation, if not the legal obligation, to the



IMPROPER ACTIVITIES IN THE LABOR FIELD 18999

lot owners of the very minimum of $325,000 and this would, undoubtedly, be
much higher.

The Chairman. The committee will stand in recess until 2 :30.

(Members of the select committee present at the taking of the recess
were Senators McClellan and Curtis.)

(Whereupon, at 12:50 p.m., the select committee recessed, to recon-
vene at 2 :30 p.m., the same day.)

AFTERNOON SESSION

(The select committee reconvened at 2 :30 p.m., in the Caucus Koom
of the Senate Office Building, Senator John L. McClellan presiding.)

The Chairman. The committee will be in order.

(Members of the select committee present at the convening of
the afternoon session were Senators McClellan and Goldwater.)

The Chairman, Call the next witness.

Mr. Kennedy. Mr. Bellino.

The Chairman. Have you been previously sworn ?

Mr. Belling. Yes, sir.

The Chairman. All right. Proceed.

TESTIMONY OF CAEMIITE S. BELLINO— Resumed

Mr. Kennedy. Mr. Chairman, this afternoon we are going into
another project of Mr. Benjamin Dranow. Keeping in mind that
the operation that we discussed this morning took place in 1958 and
1959, after our hearings started, here is another business of Mr. Dra-
now with the Teamsters which took place since our hearings and
since w^e revealed the derogatoiy information in connection with
Benjamin Dranow's operations.

This is in connection with certain jackets, Mr. Chairman, which were
purchased by the Teamsters Union for the Teamsters Union members.
I would like to call Mr. Bellino to give an explanation as to what com-
panies received the contracts and how the operation was handled.

The Chairman. You have made an investigation, Mr. Bellino, of the
subject matter, have you ?

Mr. Bellino. Yes, sir.

The Chairman. Give a general statement as to what you mean by
certain jackets being purchased.

Mr. Kennedy. Perhaps you could show one of these.

The Chairman. Do you have an exhibit ?

Mr. Bellino. We have a Teamsters jacket which the Teamsters
Locals 299 and 337 decided to give away to their members. We find
that there were a total of 26,495 jackets for which the Teamsters have
been billed, at a total cost of $341,841.84.

Mr. Kennedy. Isn't there evidence that they intended initially to
purchase jackets, or indicating they were going to purchase jackets, for
every Teamsters member ?

Mr. Bellino. The indication and the statements made to these manu-
f acurers was that there would be 1,600,000 jackets to be manufactured.

Mr. I^NNEDY. Which would be at a price of approximately $16
million.

Mr. Bellino. Yes, sir.



19000 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Kennedy. That was up until our investigation began ; is that
correct ?

Mr. Belling. That is correct.

Senator Goldwater. Would you give that figure again of the number
of jackets?

Mr. Belling. 26,495.

Senator Goldwater. How many members are there of that local
299?

Mr. Belling. In local 299, there were some 15,741 purchased, and I
believe we show that the per capita tax paid was around 14,000.

Senator Goldwater. How many members do they have ?

Mr. Belling. 14,000 members approximately, based on their per
capita tax payments.

Senator Goldwater. How many do they have in 337 ?

Mr. Belling. In 337, around 10,000 or 11,000.

Mr. Kennedy. How many members do they have ?

Mr. Belling. I have that per capita figure there, I think.

The total per capita payments on January 13, 1958, covering local
299, showed a membership of 12,164. The largest membership in 1958
was for the month of January, paid in February of 1958, and that
showed 13,482 members.

In local 337, it showed 10,512 per capita paid in January of 1958.

Mr. Kennedy. And how many jackets did they purchase out of
299?

Mr. Belling. 15,295 that they have been billed for.

Mr. Kennedy. And how much out of 337 ?

Mr. Belling. 10,055.

Mr. Kennedy. What was the total cost to the Teamsters Union
for the jackets, local 299 and local 337?

Mr. Belling. The total from all companies for 299 was $197,011.25.

The total amount paid or billed by all companies to local 337 was
$129,029.25.

Mr. Kennedy. Would you show how it was handled ?

Mr. Belling. Arrangements were first made by the Teamsters,
between the Teamsters and Ben Dranow, to manufacture these Team-
ster jackets at a cost of $12.75.

Mr. Kennedy. When was this I

M. Belling. This would be in the latter part of December of 1957.
Dranow got in touch with Svirsky Clothing Co.

Mr. Kennedy. Of New York ?

Mr. Belling. Yes, of New York, and Svirsky obtained Grand
Sportswear to actually manufacture and put the various items to-
gether, to form the jackets.

Dranow also went to Town & Travel, and Town & Travel got a
subcontractor, United Sheep Lined, and Town & Travel is in New
York, and United Sheep Lined is in Long Branch. They were the
subcontractors to Town & Travel.

This company made up the jackets at a labor cost of from $2.22 to
$2.47. This one was paid $2.97, from $2.47 to $2.97.

Bon Bon Pillows, associates of Town & Travel, when the Teamsters
first decided to buy these jackets, they sent a check of $5,000 to Town
& Travel, to Bon Bon Pillow, and Svirsky and United Garment Co.
in Minneapolis.



IMPROPER ACTIVITIES IN THE LABOR FIELD 19001

The Chairman. You mean they sent four of the $5,000 checks?

Mr. Belling. Yes, more or less as deposits.

Tlie Chairivian. They sent each of these companies a deposit of
$5,000?

Mr. Belling. That is right.

United Garment also entered into arrangements with Dranow to
manufacture some 4,000 jackets. United Garment would not go
ahead until they had at least one-third of the price or some $22,000 in
cash.

The Chairman. Wliich company was that?

Mr. Belling. United Garment in Minneapolis.

Senator Goldwater. May I ask you, did Mr. Dranow approach
these companies in what we might call a legitimate way, to purchase
these, or was there any suggestion that they kick back any?

Mr. Belling. There are various suggestions as to commissions,
and that is what we are going to go into.

Mr. Kennedy. The first witnesses that we expected to have, Mr.
Chairman, in connection with this were the Svirskys. They flew
down from New York, and their plane got into difficulty. They were
up in the air for some 3 or 4 hours, as I understand it, and arrived
in a highly nervous state. Their lawyer requested that their appear-
ance be postponed, and in view of the difficulties or trouble that they
had had, we did postpone their appearance until tomorrow.

The Chairman. Was that today ? What is there about the weather
out there? Was there something wrong with the airplane?

Mr. Kennedy. They came from New York, or they had some
trouble as they were leaving. They got caught in some difficulty.

So if Mr. Bellino could at least testify as to what the records show
as to what the Svirskys received and how much they had to pay to
Mr. Benjamin Dranow, it would be of help, so we can get that much
information in the record at this time.

The Chairman. It will be substantiated by other testimony.

Mr. Kennedy. He will testify just what the records show ?

The Chairman. Give us what the records show.

Let us see if we can make that understandable. You have four or
five companies there, haven't you?

Mr. Kennedy. It went through three companies. Each company
manufactured a certain number of jackets, and all of them made their
arrangements through Benjamin Dranow with the Teamsters Union.

The Chairman. Let me get this so I can understand it. I want the
name of each company that manufactured some of these jackets, and
the number that was manufactured by each company. There are three
companies that manufactured the garment.

Mr. Belling. The three prime contractors were Svirsky Clothing
Co., and they manufactured 15,741 jackets.

The Chairman. At what price ?

Mr. Belling. At $12.75.

The Chairman. What price did they manufacture them, or did
they get out of it? A^Hiat did the manufacturer actually get?

Mr. Belling. They received from the Teamsters, $12.75.

The Chairman. And the next one.

Mr. Belling. Town & Travel, New York. Thev manufactured
5,670.



19002 IMPROPER ACTIVITIES IN THE LABOR FIELD

The Chairman. At what price ?

Mr. Beluno. The price was $12.75, except that they were following
a practice of charging $13.75, and the Teamsters would deduct the
dollar and at the present time the records show that 678 are charged
to the Teamsters at $13.75, and the balance of 4,992 were at $12.75.

The Chairman. Now let me see. How many were charged at
$13.75 ?

Mr. Belling. 678 still on their books at $13.75.

The Chairman. What is the next one ?

Mr. Belling. And the third one is United Garment Co., of Min-
neapolis, who made 1,789, at a price of $12.75.

The Chairman. All right, what else ?

Mr. Belling. The other one, the one that succeeded Svirsky — Svir-
sky went into liquidation in the middle of 1958 — in November of
1958, Union Local Supply succeeded Svirsky, and they continued to
use the same subcontractor. Grand Sportswear, and they made a total
of 3,295, and their prices varied.

Senator Ggldwater. Could I ask a question there ?

Were the union members billed separately for these, or were they
purchased out of the general fund ?

Mr. Belling. Insofar as we know, they were purchased out of the
general fund and paid by the general fund. We haven't heard of
anyone paying for those jackets.

Senator Ggldwater. That is what I wanted to ask. Have you any
record to show that the individual Teamster member then purchased
the jacket, or were they to be distributed to each member?

Mr. Belling. Insofar as we know, they were distributed unless the
latest organization is selling to more unions than just 299 and 337.
They have various locals throughout the country. They may be
selling them direct to the members. That is over and above — no,
that is included in the 3,000

Senator Ggldwater. How many were actually distributed to mem-
bers ?

Mr. Belling. I would say substantially all of them were distributed
without any payment.

Senator Ggldwater. Does your investigation show that these com-
panies operate a union shop ?

Mr. Belling. Union Local Supply did not have anything to do
with the union shop. Town & Travel was a member of a different
union, not the union

Senator Ggldwater. Were they mmebers of the Garment Workers
Union?

Mr. Belling. Of the ILGWU ; that is right.

Senator Ggldwater. The particular exhibit that you have has no
union label. Did you find union labels in others ?

Mr. Kennedy. We are going to have some testimony in connection
with that.

Mr. Belling. The manufacturer himself made them up, I believe,
he will testify.

Mr. Kennedy. It is rather complicated.

Senator Ggldwater. All right.

The Chairman. There is no union label in this one.

Mr. Belling. No, sir.



IMPROPER ACTIVITIES IN THE LABOR FIELD 19003

Mr. Kennedy. You can say in substance they did not have union
labels.

Mr. Belling. The more recent ones did not have any union label
at all.

Senator Goldwater. Would you say in substance, then, that these
were made by nonunion labor ?

Mr. Belling. There would be approximately 8,000 or 9,000 that
were made without union labels.

Senator Goldwater. Then they were not made in a union shop ?

Mr. Belling. The prime contractor may not have been a union
shop.

Senator Goldwater. That was Grand Sportswear?

Mr. Belling. No, they were a union shop. The Union Local Sup-
ply and Town & Travel.

Senator Goldwater. Town & Travel was not a union shop?

Mr. Belling. Not a member of this particular union.

Senator Goldwater. That wouldn't apply. That would be normal.
They wouldn't be members of this union. They would be members of
the International Ladies Garment Workers Union.

Mr. Belling. Anyone making up that jacket would have to be a
member of that union. No Ladies Garment Workers Union could
make up that jacket.

Senator Goldwater. I am talking about unions, period. Evi-
dently some of these shops were not union shops.

Mr. I^NNEDY. Town & Travel is a union shop.

Mr. Belling. It is a union shop but it is not a union shop that
was authorized to make that type of garment. They make ladies wear.

Mr. Kennedy. As far as the Svirsky's are concerned, all of this
was handled through Benjamin Dranow; is that right, Mr. Bellino?

Mr. Belling. That is correct.

Mr. Kennedy. The ordering of all of these packets, some $300,000
worth of jackets, was all done through Benjamin Dranow?

Mr. Belling. That is correct.

Mr. Kennedy. And all occurred after we got into the operation of
Dranow in 1957 ?

Mr. Belling. That is correct. ^

Mr. Kennedy. Do we find in the case of Mr. Svirsky that they
paid a commission to Benjamin Dranow in coimection with obtain-
ing this business of the Teamster jackets ?

Mr. Belling. Yes, sir.

Mr. Kennedy. What do the records show ?

Mr. Belling. On March 11, they issued a check to Benjamin
Dranow for $2,000, which they called "Commissions."

The Chairman. When was that ?

Mr. Belling. March 11, 1958.

Senator Goldwater. Which company was that from?

Mr. Belling. That is Svirsky. Then on June 5, 1958, they issued
a check to Banner Mercantile & Supply Co. for $1,000, which they
called commissions.

Another one the same month, on the 10th, to the same company, for
$2,000 for commissions. On January 6, they issued a check to Ban-
ner Mercantile for $1,000.

Senator Goldwater. What year ?



19004 IMPROPER ACTIVITIES IN THE LABOR FIELD

Mr. Belling. The same year, 1958, which was commissions.

Senator Goldwater. $2,000 to Benjamin Dranow and $4,000 that



Online LibraryUnited States. Congress. Senate. Select CommitteeInvestigation 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 text (page 25 of 38)