PRICES

The Biggest Fine

Until last week, price ceiling violators have usually gotten away with light taps on the wrist in court. Last week OPS clubbed a violator on the head. It fined New York's Barium Steel Corp. and two subsidiaries, Central Iron & Steel and Phoenix Iron & Steel, a whacking $1,011,-123.63. It was by far the biggest OPS fine yet levied. It was also another black eye for Central Iron & Steel whose activities had figured in Washington's mink-coat scandal a year and a half ago.

Barium and its subsidiaries got into trouble with OPS eleven months ago when they asked for a price increase on structural and plate steel. In a routine check of the companies' books, OPS auditors stumbled on $719,831.48 in charges for brokers' and finders' fees which had been illegally passed on to customers. Barium agreed, out of court, to pay a fine equal to the excess charges plus $291,292.15 in penalties.

It was not the first time that Barium's Chairman Joseph A. Sisto has been in legal hot water. Born in Newark, Sisto went to work in Wall Street at 25, opened his own brokerage house in 1923. In the Depression he went bankrupt, and was suspended by the New York Stock Exchange until he satisfied his creditors by paying 50-c- on the dollar. In 1933 he founded Barium Steel. In 1938, his investment firm was booted out for good, after investigation showed that he had violated Exchange rules by juggling his books. Joe Sisto then concentrated on the steel business with the financial help of his longtime friend, New Jersey Underworld Boss Abner ("Longie") Zwillman.

Sisto expanded tiny Barium Steel rapidly by buying other small steel companies, paying for them chiefly out of their own quick assets. With the companies, he got plenty of Government contracts. Later, he got two RFC loans, one for $4,700,000, another for $1,650,000 with the help of Washington Lawyer Joseph Rosenbaum. Later, Senator Capehart charged that Central Iron & Steel had sold scarce steel to a pocket corporation which had in turn resold it in Chicago's grey market for $75,000 profit. Said he: "[The sale] was simply a payoff, and somebody made $75,000 for doing nothing." Control of the corporation was held in option by Lawyer Rosenbaum, who denied the charges, and by ex-RFC Employee E. Merl Young. His wife, a White House secretary, was given a mink coat for which Rosenbaum paid the bill.

Last week, by taking OPS's big civil rap, Sisto's companies may escape an even bigger one. They can still be prosecuted by the Justice Department on criminal charges. But OPS does not plan to ask the Justice Department to prosecute.

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