Broadcasting Telecasting (Jan-Mar 1958)

IMPROMPTU EXECUTIVE SESSION to plan future strategy was of earshot of newsmen (1 to r) : Reps. Moss, Heselton, Harris held in the hearing room during a recess in testimony Thursday (chairman), Wolverton, O'Hara, Mack, Williams, Hale and Benby the Legislative Oversight Subcommittee. At the meeting, just out nett. Reps. Moulder (former chairman) and Flynt were not present. carried on the books. The congressman said it seemed to be an "amazingly unorthodox and unusual bookkeeping system." "That is your opinion, sir," retorted Mr. Whiteside. Speaking off the record, several members of the subcommittee said Thursday they are convinced Mr. Whiteside has deliberately misled the committee in testifying on the financial arrangements. Mr. Whiteside said Andar became active again early in 1957. Its officers (unknown to Comr. Mack although he is sole owner) include Elizabeth Brissillo (Mr. Whiteside's secretary), president; Edward Dunn, Stembler-Shelden associate, vice president, and Josephine Risenback (another Whiteside secretary), secretary-treasurer, according to Mr. Whiteside. Andar's present net worth is approximately $1,000, the witness testified. He said assets include two $30,000 mortgages, brokerage commission from Stembler-Shelden of $2,250 (assigned to Comr. Mack's account by Mr. Whiteside) and "a few dollars in the bank." Only liability listed was $30,000 owed on a third mortgage. Stembler-Shelden does an annual business of approximately $1 million, Mr. Whiteside testified, and has from 15-17 employes. The WPST-TV premium amounts to $20,000 and brings a $3,700 commission to the firm, he stated. The witness was questioned at length on his various bank accounts, most of them in Miami or Coral Gables. Rep. Wolverton appealed for the committee to secure "by whatever means necessary" all the records of Stembler-Sheldon, Andar and Mr. Whiteside. Mr. Whiteside said he would refuse to turn over seven of the bank accounts to the committee because of the attorney-client relationship. "I cannot and will not deliver records as a whole because they are privileged matter," he stated in also refusing the committee access to his cash book. The committee will decide at a later date whether to attempt to secure these records. Rep. Wolverton also asked the witness, one at a time, about over 30 phone calls Comr. Mack had made from his Washington office to Mr. Whiteside in Florida. The calls covered the period from July 1955 to July 1957 and Rep. Wolverton pointed out they were made at government expense. In each instance, the witness said he had "no recollection" of what was discussed. Generally, Mr. Whiteside said, the calls probably concerned loans made to Comr. Mack, the Miami ch. 7 proceedings (Mr. Whiteside said he represented one of the applicants, Jack Stein) and a Charlotte tv case. Also entered into the record were eight calls made by H. Earl Barber, Comr. Mack's legal assistant, to Mr. Whiteside, and one call the witness made (at government expense) from Comr. Mack's office to New York. Mr. Whiteside said he applied for admittance before the FCC bar in August 1955 as a result of his work for Mr. Stein, for which he received a $5,000 fee. He said $1,250 of this was paid to Mr. Palmer for public relations work on behalf of Mr. Stein's application [Government, Feb. 24]. Mr. Whiteside stated he also made a trip to Washington to see Comr. Mack regarding the ch. 7 case (granted to Knight-Cox-Trammell interests, now WCKT [TV]) as well as trips on behalf of the National ch. 10 application. Interest in the Charlotte case, Mr. Whiteside said, was prompted by a friend who had a 33VS % interest in one of the applicants. On Tuesday, Rep. Harris read Sec. 409 (c) (2) of the Communications Act "that you [Whiteside] would be interested in yourself." It provides that in any case of adjudication, no person who has participated in a case may make any additional presentations to a commissioner except as provided by law. The penalty is a $10,000 fine and/or two years imprisonment. Explaining why he read the statute, this exchange followed: Harris — "It appears to me very clear in these hearings that some people have found themselves in a very, very bad situation." Whiteside — "I do not fall under that act, sir, as you read it." Harris — "Well, that may be your interpretation. But if you made such representations after National Airlines had made its representations which had been made very clear with the fact you went to the FCC, registered yourself . . . and with all the other evidence presented herein . . . seems to me places you in a very, very close place." Whiteside — ". . . You, of course, are entitled to your opinion . . . but I must say for the record that I do not now and cannot agree that I have violated the statute. . . ." Harris — "It is not for me to decide but the facts are very clear and plain, it seems to me." On Wednesday, Rep. Harris called the witness' attention to Sees. 1505 and 371 of the U. S. Criminal Code. They provide stiff penalties for attempts to influence or corrupt and conspiracy to defraud regulatory agencies. The chairman said he read the sections "for the purpose of calling your [Whiteside] attention to the provisions of the criminal code because throughout this long lengthy proceeding in which you have appeared here there has been some very revealing testimony. . . ." Mr. Whiteside again denied that he had violated any of the cited statutes, to which Rep. Harris replied: "Mr. Whiteside, using your own phrase that you have used many, many times during these three days, 'That is your opinion'." MACK TESTIMONY Comr. Mack explained in detail Thursday some of the financial transactions that have been construed as efforts to influence his vote in the Miami ch. 10 case. Appearing before the subcommittee for the first time, he submitted a prepared statement reviewing his connection with the Miami case and some of the FCC procedure that led to the final decision in favor of Public Service Television Inc. Apologizing for nervousness, he read a Broadcasting March 3, 1958 • Page 29