Variety (Aug 1940)

so RADIO Wcdnesclay, August 14, 194() SENATE GROUP HEARS INS, (HHIS OF 3^ Jhacl Bfbwrt;Forg:otteii Man at^^H Own Hearihis kfi Many-Sided Activities in Washingl<>ii and Wilinin^ph Ar^^^^I^ Washington, Aug. 13. : Pacrteiching repercussions, : con- sidered here, ialntiost certain to, re- sult in the long-agitated, congression- al probe of broadcasting, and. the FCC, echoed through the Capitol last \K^eek Iroin the 1932 settlement ol tile Justice Departrnent's monopoly suit a^jairist the ^radio patent pool'. Inquiry into the fithess oiE T^ Brown tb continue oh :the Regula- tory board has • now- turned into a sweeping study of JlCA's maneuvers that- brought a consent decree in volvirig the often condemhed *West- inghoiise leases': to NEtC. Senate quiz ^also seemed like the first ih- stallnient of a probe into the way thie Delaware F.ederal court func- tions. With Thad 'B shunted into thie dim background as the forgotten man at his own. hearing, the Senate Interstate, Commercfe .' Comrtiittae dragged from .(Justy • records and foggy ' recollections the deteiiled acr count of how hushed-iip 'activities' coincided with the sudden piostpohe- ment of the scheduled trial. ..But all 'the participants strongly denied there was: any unethical-or improper, conduct. Explanations of the way the, case' was ended left many committeemen still "skeptical, and indignant. .' Fre- qiient criticismi was! voiced by Sen- ators Burton K. W.heeler, committee chairmah- Charles W; Tpbey, Clyde Reed and Shermani Minton. Repeat- edly they showed clearly^ they feel 'many of the participants shook down -.RCA. ■;■. Whethfer the testimony, will aifect FIRST ,n PH I LIT C. E, HOOPER SURVEYS Audltneai •! PhlU|i8l»lila Natwark Statltni lOM'IOHS A.M., Men. ihru FrI.—« M*. Av|. ^^^^^ WCAU KYW % LIsts'iKi-* Idantlfylni StttiM aiid .Prtgrain F4R.ST WITH 46 OTHER PROGRAMS 15,1% 10.8% 10.4% For LOWER COST Circulation BUY WFIL planatioris ever be accepted at face- value. The usual, 'can't recall' aiibis blocked the legislators. at .several points, while- stern reiiudiatipn 6t some " testimony as 'ab.jplutely un- true* left the committee befuddled Music for ELLERY OUEEN Composed and Conducted by lYN MURRAY Mat C0LUM3IA ARTISTS, Inc. Brown himself remained' cphjec- tural, ihasr.iuch a.s some, legislators shlowed they see no reason why any FCC member should bi held ■ re- sponsible for these RCA actions. At the same timie, most senate commit-, teerneh - considered ■ U unbelievable that:; the comrriish yetieran .lii'ver heard : even suspitiph-stirring hiht^. ot hidden attempits: to-enter the Uw S. court via the baick do<)r. Plenty of oratory ' certain when hearinigs .ehd.^' ; . ■ While the decree^ invplyed the vir- tual trarisfer" of control ■ of - several Westihghbu.se and General Electric stations to N6C; last vireekvs hearings bore no direct relation to broadcast- ing; Point was made several: timeis by Tpbey, however, that .■ IBrown either was ■ extremely diimb and lax or did not wish to find put the facts when he failed completeiy: to direct attention ; of the later. ehaih-monOp- Oly investigators to the /RC A activi- ties. Failure of the. regulators to take, poghizance:. of statements .about the case, rhade numerous times, in House debate was chalked up as a black: mark agairist Brpwh individ- ually . and all of his colleagues by implication^'.^.:/ ■ Z^;./ E. 0. K^fer Accusations Started the Aifairs When the committee recessed for the week-end Friday (9) after- lis- teriihg to testimony from appirbxi- mately' a dozen witnesses—rnpst- of them called via. subppenas and all placed Under oath-^the record cbh- taih.ed circunistantial arid direct sup- port for. most of the accusations in a sehsationai affidavit by 13. O. Kellen who described himself as a local refal estate man and also is reputed to be uhdercpver sleuth for - organized labor. The story was one of hush-hush conversations—with so much secrecy attached ..that .even, Col.: .Manton Davi.s,. the RCJa. general, counsel; n^ver heard of them, until years lat6r T-involving ; roundabout TemUnera- tipn tb individuals who steadfastly maintailned they did not bring about- postponement of ■ the 1912 trial or the consent decree.' Incidentally/ great doubt was cast on the sanctity of the court, , with , comrnitteemen still wondering: how ;far the nioriey was passed. From the parade of witnesses, the. committee obtained, a. detailed acr count of the; way four Di Cv real es- tate operators acted as go-betweeris and led to the hiring by RGA of a prominent local political lawyer,' Roger J. Whiteford; the surrepli-. tious week-end jaunt to Concoird, N. il., to enlist aid of forrner senator George H. Moses; the hiring of forr mer senator .Daniel O. Hastings of Delaware; the secret huddle between Hastings, and H; C. Mahaffy, clerk of the Wilmington court, . .. ' A igpod inariy angles still remain to be checked. Some controverted points may never, be cleared: entire ly, but neither, will some of the ex plotted by a public utility company fighting onf of hia clients. Called on Justice iDept. to Seek Pelay : Efforts to call off the Justice De- partment hounds were made before Hastings was dragged into the case, the (committee found out. One of Kis first chores, Whiteford testified, was to call oh former Attorney Gen- eral William t>, Mitchell and plead for more time to. work out the.cohi sent decree; 'This jiropositioh was spurhed; he related, because Special Assistant Warren dlhey, who . di- rected the /gbyernment efforts, bn a few vital points Suggestions that ■ former ■ seriatbr threatened, to Avalk out if morP stallr- Moses wjjis brought in to try put heat: on the' Justice Department, that former Senator Hastings rigged iip the: sudden.postponement and. that Mahaf^ was con^pensated , fbr de- laying the proceedings all werie flat- ly denied. The dlsclainiers did; npt, howevetj satisfy . most of the sen- 'atprs.'V.'-. ^ Tees' and What they tional $5,000 in response to his de.- 'mands; Whiteford told hpw he got a $2,500 down payment and an Iden-. tical amount later. Just why, if it Was felt they ren- in g took place. RC A Doesn't Maintain ^Radio Lobby'—Samoff During his return appearance Wednesday (7), Sarnoff was given some rough handling by Tobey and Wheeler, who could not agiree it was 'natural' to consult two senators when so much high-priced talent al- ready was on the payroll. He ex- fOr BifiT Debate 1^'^^"^*^ that settlement of th.6 case / * ^ ! was urgent, particularly since it in-- High points of the testimony were [ volved :hational defense, as well as admissions of Whiteford and. Hast-: the: big companies arid 89,000 iride- ings that they received good fees i pendent stockholders. Reason for even though each indignantly denied j talking with Moses.; he declared; was he had any, part in accbmplishirig , to outlihe the serious danger to liub- the RCA objective. When they said I lie interest if, by a gbverriment vic- they accejpted remuneration, Tobey , tbry,. the RCA-RCAC-NBC group placed great emphasis on their con-[ suddenly was thrown on its own. tentlofts that their participation had Persons bn.Jthe other side (the in- no effect on the outcome of the liti- j dies . w.hb /cranked Up •. the Justice• gation.: Hastings acknowledged -he. Depart^^ was displeased with his $2,500 re-1 sipns to several solons, so RCA was. tainer and later received an addi-; justified in doing the same, he re-- marked. RCA does not mairitain any 'radio lobby,' Sarnoff airgued when quizzed about riumerous charges pressure is : a lip lied to the FCC: and Congress dered no service, RCA was willing! by industry, .front men. He dis- to pay $4,275 to three pf the real ■ claimed any - part in bringing about estate men. who brought Whiteford : <;lefeat two: years ago of the Connei^ into the picture remained puzzling 1 resolution fpr a special committee to the solons. Several times Tobey ! probe of broadcasting and the regu- and Wheeler made if plain they feel i la tors. the .payments , were hush money. .-. Theycohipany head voiped resent- that the willingness to appease thase ' merit ;at suggestions he carries his interm:ediarieS indicates a guilty j troubles .to:. President; Roosevelt, conscience on ■ the part of the other | thoujjh he acknowledged an ac- participants. The fourth brokei*, j.quain.tance with Thomas Gorcbran, E. O. KeUer,. got $4^000 for various i prVe of thi3 m 'contact' work pferfbrmed for Robert i trust^i-s, .He admitted Corcoran told | Suggestions that money for Hast has brought to light 'a lot of indis- cretion that comes pretty close ta corruption,' a criticism which CoL Davis 'resented and deniied,' Th« RCA lawyer's story was ridiculed by Wheeler, who remarkied that no Cbn- gressiorial group could be expected to believe some of the explanatioa and reasons, particularly for paying the . real estate operators. When O'Callaghan related how the inter- mediaries threatened to sue, Wheeler snorted 'do you fexpect iis to believe that RCA. paid a contact man to get a couple of real estate men to rep. ommend a lawyer who could find a Senator who would recbnimend hir- ing another lawyer in the Senate?' While he denied knowing anything about the reported payments to Moses, at the , wind-up p*Callagh2h declared he had heard so much talk about, whb -got paid in the case he could riot be sure if he ever heard the reports that the former Republi- can senator was compensated. : He hiaintained, the only cash he handled was that which went to Whiteford and the trouble-making real estate operators; . RGA Introduces Court Record of Witness Attempts of RCA to supply a startling anti-climax to the' yarn of .Keller backfired. When Judge Pros- kaueiv began crPss-examlnatiorii K ler readily admitted he once was in- dicted in a bad check case, pleaded guilty and. received a suspended sen- tence. Proskauer; ofTcred a copy of the court record, angeririg Tobey who was suspicious* about the move to discredit the witness^ . The New Hampshire; sblori wais' intngued at the RCA 'discovery,' made only a couple. of days' ago according to testimony of Proskauer and Davis, arid de- clared Keller had bee:V a 'good, wit- ness.' . Testimony that ..William MahafTy, brother of the court clevk, was paid $50,000 to bring 'about modification of the consent decree in 1935 was unequivocably repudiated. Readily admitting Ihey ' had retained him ..for inariy years in patent cases, RCA of- fered a statement showing his. total compensation from 1930 to his death "in 1939 was $37,947, refjrcsenting fees for 28 different legal assignmeuts. of the RCA D; O'CaJlaghan, legal crew, , - Details of the real estate crowd's activities were generally agreed hirii present FCC Chairman Janies L. Fly 'had the confidence of the government' and that he has talked with Fly at considerable ;length upon, although several disputed bits; various matters. In this cbn- of testimony remained in the record, i "action, he showed he has not got- There was disagreement whether'!^?" over.his wrath at the Cpmmis- O'Callaghan ever said settlement of, -""o" V savage indictment of RCA's the case would .be worth $50,000 to ''^^eviswnyadvertmng this spring, the individual whb could bring post-' Pershlng Made Own ^ ponement; whether Whiteford read the blackmail statute to Percy Kel-1 ler, .Levin: Handy, and Why land" Shaffer; who took E. O. Keller and, Handy on the junket to see Senator . Moses, and less6r points. | Sworn statements that Mahaffy, the court clerk, got part bf . the pay- Request for Airing Trade gossip that Fly persuaded the networks last week to carry General Johri'J, Pershing's speech urging sale bf destroyers to England was discredited by Sarnoff. He said the WorM War military chief off. were denied by sfeyeral persons.: made his pwri^. requ for micro-.' This"elderly individual who has been i phone opportunity and" thTaFTly had bn the judiciary payroll for 45 years, j nothing to do with the arrangements, firmly repudiated the yarn that he. The committee encountered troii- was compensated by checks handled ; ble getting O'Callaghan's story, through Lord & Thorn as Advertising Brought to the stand Under sub- Agency or ever received any cash j poena, the lawyer first refused to from Hastings. But the committee answer questions because bf: the dug rather deeply into his: financial i privileged lawyer-client relation- affairs, keeping him under subpoena j ship. After RCA waived any right for; further checking. Conflict between the stories of Mahaffy and Kastirigs regarding a conversation which preceded post- ponement of the trial troubled the lawmakers. Mahaffy said he was summoned to New York, where he conferred with the ex-senator in a Waldorf-Astoria corridor about 'the statelet the case'; Hastings 'said he was sure the clerk is 'itiistaken/ al^ though agreeing he did talk with- Mahaffy about what had happened at prior cbntinuances and the attitude of Judgie John P. Nields regarding possible further delay, Senators were derisiye toward the accounts of the conversation, with Tobey and Wheeler unconvinced Hastings did not use the clerk as messenger to let the judge know he was in the case. (Hastings appbirited Nields, whom he defended vigorously as thoroughly honest and untouchable.) With sarcasm and lamentations, Hastings readily told the committee how he operated. Denying he put the fix on, he justified collecting $7,- 500; with the statement that he de- voted a lot pf time to the matter, though he agreed he was in the case only a few days and termed his part 'simple.' Th^ ex-solon agreed ; he niade a' considerable blunder by not appearing openly in the 'maneuvers, but insisted his conduct still was en- tirely proper. He denounced as a lie the statement of his former part- ner, Ci Edward Duffy- that he once said he had to pay $2,500. of his fee to the court clerk, wailing that he is the victim bf a 'smear campaign' to object to his telling his version, O'Callaghan demurred because he feared he might be incriminated or degraded. This did not stop thia committee, which wanted to know when he firiished just what he feared might result in injury. Wheeler de- risively said part . of. his stbry is 'pretty fishy' and jharged he paid off the real estate men to keep them quiet; .:::■;■;'... Activities of O'Callaghan and Whiteford' were condemned bitterly by Senator Reed. At one point, the Kansas Republican said the inquiry ings was transrnitted.through White- ford in order :■ to conceal the ex- senator's employment were denied. Hastings agreed RCA records might riot disclose the fee to him but said there - was no effort to hide the fact as far as he was concerned. White- ford lilcewise. ^iaid thiere was no 'in^ tent' to . cover ;up," .^althougiv. he adfi mitted that was the effect of hayirig him compensate the former legis- lator. ' ' . :~ RCA Attorney Davis finally, ad- rnitted he would not have approved britiging in the senat The RCA chief counsel said he reprimanded b'Callaghan when, six years ',after the maneuvers, he found out what went on, and commented he is not in the habit of discussing company affairs with' outsiders, particularly real estate men, at any time. His expressions of regret prompted Sen- ator Wheeler to observe that 'this ought to be a lesson to keep away from using political influence... .it'a disgraceful to see a great corpora- tion get to the point of havirig deal- ings with scurir. .. You might just as well get the idea you've got to do business above-board/ W0AL mtani SuiineU DOWT MISS PALMOUVE'S STAKKING BESS JOHNSON By Adelaide Marston : D«dtcated to the women of America. The Btory of • woman who must choose between love and the career ' of raiting other women'* children. WABC-CBS—10:30-10:45 E.b.S.T. 78 Stations Coast-to-Coast Direction BENTON & BOWLES, Inc. Management ED WOLF, RKO BUILDING, New York