Embarrassing Echo

On Sept. 29, 1949, Republican Styles Bridges of New Hampshire rose up in the Senate and proposed a salary raise from $10,000 to $14,000 for an "outstanding" public servant, Chief Counsel Charles Oliphant of the Bureau of Internal Revenue. Two years later, the outstanding Mr. Oliphant resigned under heavy congressional fire in the tax scandals (TIME, Dec. 17).

Last week in Washington, there was another embarrassing echo of the Senator's interest in Oliphant's welfare. A House subcommittee heard evidence that during the same period when he was trying to get a raise for Oliphant, Bridges was also pressing Oliphant to grant a favor to a millionaire taxpayer.

Whisky Parlay. The taxpayer, Hyman Harvey Klein of Los Angeles, was revealed as another of the financial wonder workers who are turning up in Washington these days. Klein testified that in 2 1/2 years he parlayed a $1,000 investment into a $5,000,000 profit, through a brisk import business in Canadian whisky. His troubles began in 1946 when the Government charged him with black-markeeering and tax fraud. In 1948, the BIR, afraid that he would skip the country, slapped a $7,000,000 tax lien on his assets.

Right after that, Oliphant began receiving a parade of visitors with uncommon sympathy for Klein's predicament. One of the first was Henry ("The Dutchman") Grunewald, the ubiquitous influence peddler who has popped up in half a dozen tax probes. The black-marketeering and tax fraud charges were dropped a few months after Grunewald intervened. By now, Senator Bridges was also in the act. Soon afterward, the lien on Klein's assets was eased to allow him to resume doing business.

When the committee invited Klein last week to explain his good fortune, he testified that he was wholly unaware of Grunewald's intervention, swore that he was not even acquainted with Bridges and certainly had not solicited his help. Grunewald, as usual, was too ill to testify. But Bridges, now the G.O.P. Senate floor leader, readily agreed to take the stand. However, he was not very helpful.

"A Little Peeved." Chain-smoking cigarettes through a holder, Bridges testified that Grunewald's lawyer, an old friend, had asked him to look into the Klein case. He did so and concluded that Klein was unjustly treated, but he insisted that his interest was purely casual--the sort of thing he would do for any taxpayer. The committee counsel, Adrian W. DeWind, then began reading from one of Washington's most interesting documents, a stenographic log of all Oliphant's telephone conversations and daily appointments, kept by Oliphant's secretary.*

DeWind quoted from a telephone conversation in which Oliphant discussed the Klein case with another Bureau of Internal Revenue official and remarked, "I don't know how that ties in with what the Senator told you." Bridges' comment: "There are 95 other Senators and there are probably 3,000 state senators and 50 former United States Senators, and several thousand of that sort, and it might have been anybody, and I do not recall anything of that kind." Said DeWind: "Mr. Oliphant told the committee that you were the only Senator he recalls ever discussing the case with."

Other passages from the log indicated that Bridges discussed the Klein case with BIR officials at least five times. One passage was a warning from Grunewald to Oliphant that Bridges was "a little peeved" about one aspect of the Government's treatment of Klein, but on the whole was happy about the way BIR had handled the case. The evidence seemed to require a much fuller explanation from Bridges, but the committee apparently was unwilling to cross-examine a colleague from the upper chamber. After two hours, in which Bridges' recollection proved very vague, he stepped down from the witness stand with the thanks of the committee.

There is no evidence and no charge that Bridges accepted money for his intervention in the Klein case, and the line between undue influence and legitimate checking up on a Government bureau by a Senator is admittedly hard to draw. Nevertheless, when a Senator asks a pay raise for an official and asks the official for action on a tax case, he certainly opens the door to suspicion--and he puts a weapon in the hands of the rival party.

President Truman is well aware of this. He said in his Jefferson-Jackson Day speech: "The Republicans make a great whoop and holler about the honesty of federal employees, but they are usually the first to show up in a Government office asking for special favors for private interests, and raising Cain if they don't get them. These Republican gentlemen can't have it both ways--they can't be for morality on Tuesday and Thursday, and for special privileges for their clients on Monday, Wednesday and Friday."

*The committee has released only excerpts from the log's contents, treats it like a top secret military document because of its vast importance to^the whole tax scandal investigation. At night, it is kept under guard in a Treasury Department vault.

This file is automatically generated by a robot program, so reader's discretion is required.