Super Gravy Train?

One of the big scandals of the Harding Administration was in the Office of Alien Property. For accepting a $50,000 kickback on a World War I claim, OAP Custodian Thomas W. (for Woodnutt) Miller was sent to prison. OAP gradually went out of business, was revived in 1942 as a Justice Department division under Democratic Politico Leo Crowley. Since then it has controlled as much as $500 million worth of alien properties seized in World War II, still manages 39 active companies and assets of nearly $300 million.

Last week Wisconsin's Republican Senator Alexander Wiley decided that the time had come to investigate OAP again. He introduced a resolution calling on the Senate Judiciary Committee to do so. Wiley said he had been "flooded with tips and leads" alleging "certain irregularities" in OAP, "questionable dealings and behind-the-scenes connivance." As he had told the Senate earlier, he wanted to know if it were true that OAP had turned into "a super gravy train" with gravy pouring down certain Democratic vests.

Questions & Answers. Wiley named no names, made no specific charges. But he asked some questions: P: How many men "employed by the OAP used their positions as a steppingstone to later employment . . . with OAP vested corporations at two, three or five times the former salaries"? P: Why hadn't OAP yet sold off some of its giant holdings, such as the $125 million General Aniline & Film Corp. and the $15 million Schering Corp. (hormones and anti-histamines)?

P: What about the fat salaries and expense accounts paid to executives of OAP companies, and the awarding of huge legal fees to Democratic regulars?

Apparently Wiley had his eye on such statistics as 1) the $72,000 salary paid to General Aniline President Jack Frye, onetime head of T.W.A., and 2) the $500,000-plus in salary and legal fees paid by Aniline to Louis Johnson and his law firm before he became Secretary of Defense. Jack Frye and Harold Baynton, 48-year-old Government lawyer who was made Assistant Attorney General and boss of OAP in 1950, undertook to answer Wiley's questions.

No Favorites. There was no favoritism, they said, either in OAP jobs or in legal fees. The salaries paid to Democrat Johnson (as president of an Aniline subsidiary) and Jack Frye, for example, were far less than their predecessors got when the companies were in private hands. Aniline's legal fees had also been smaller under OAP. Aniline and Schering hadn't yet been sold to the public, explained Attorney General J. Howard McGrath, because of "complex corporate problems" and "protracted litigation" (which in Schering's case ended almost three years ago).

McGrath assured Senator Wiley that Schering would be put up for public sale next month. But what was the hurry anyway? Under OAP control, Aniline's sales had more than doubled (to $99 million last year), and assets of both companies had soared.

OAP Boss Harold Baynton himself might come in for a little investigating. There was, for example, the fact that his wife was seen sporting a mink coat at the very time that mink became suddenly unfashionable on Democratic women's shoulders. Baynton said that the coat was merely borrowed for two months from the wife of his old friend Harold Horowitz, whom Baynton made $26,000-a-year president of E. Leitz, Inc. (Leica cameras), another OAP enterprise.

Wiley has never thought to mention how he himself got interested in the Office of Alien Property. OAP caught his attention last spring when his brother-in-law unsuccessfully represented the International Silk Guild in a $578,000 claim against the agency. Later, Wiley's interest in OAP was unaccountably heightened by ex-OAP Boss Crowley, now a big railroader in Wiley's home state. Crowley suddenly showed up in Washington to promote a better deal for Ernest Halbach, U.S.-born former president of General Dyestuff, Aniline's marketing subsidiary. Halbach was kept on as a consultant at $102,500 a year when the company was seized by the U.S., was later paid $575,000 for his stock. At Crowley's urging, Wiley unsuccessfully sponsored a measure to increase Halbach's settlement.

In any case, the investigation might never amount to much, because, like everything in 1952 Washington, it could be slowed down by the wheels within the wheels. Nevada's Senator Pat McCarran, chairman of the Judiciary Committee, might not want to investigate GAP at all. McCarran is a longtime friend of GAP Boss Harold Baynton; in fact, he sponsored Baynton for the job.

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