The Unwelcome Informer

On Federal statute books since 1863 has been a queer old law passed to curb Civil War profiteering. The law: any citizen who learned of fraud against the U. S. could sue to recover the losses for his Government, plus as much again for him to keep for his pains. For a long time a young Pittsburgh lawyer named Morris Leo Marcus has believed that there was life in the old statute yet. Last week his theory proved to be worth $157,550.

Indicted by the Justice Department's Thurman Arnold last year were Pittsburgh's Electrical Contractors Association and twelve member firms. The charge, on which they were fined $54,000 after pleading no contest: conspiracy to defraud the Government of about $745,000 by rigging prices on PWA projects. Mr. Marcus promptly sued the contractors under the 1863 law.

Marcus found his Government, which had since passed the Sherman Act and no longer needs such "informers," an unwilling partner. (If the suit succeeded, it might inspire enough 1863-model lawsuits to clutter Federal court dockets until 1963.) To get Thurman Arnold's records, Marcus threatened to subpoena everybody in the Justice Department. But once the case went to trial, his luck picked up. On the witness stand he placed Robert Carrnack, manager of the contractors' association for twelve years. Carmack, himself a defendant, amazed his fellows by waiving his right to refuse to testify. Instead, for three long weeks he told the whole sorry story of how the association had hiked prices, determined who would be the low bidder and at what figure.

After the longest trial in Pennsylvania history (60 days of testimony), the jury last week awarded Marcus $315,100.91, double the amount of the Government losses which it found that he had proved. Unless a higher court reverses the decision, Mr. Marcus and his unenthusiastic Government will profit by $157,550.45 each.

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