Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1918-06-19
OFFICER CAUGHT
IN GRAFT TRAIL
Lieut.. James @. Staley Is
Arrested in New York in
Contract Case
MANY ARE UNDER SHADOW
Business Men and Congress-
mems Secretaries Said to
Be Involved
THIRD PARTY ELIMINATED
Gregory Orders Heads of All
Departments to Deal With
Manufacturers
MANY ARE UNDER SHADOW
THIRD PARTY ELIMINATED

WASHINGTON, June IS. i The
trail OF the governments pursuit Of
illegal profiteers on war contracts
today led to the arrest in New York
OF Lieut.. James c. Staley. a reserve
army officer, on a charge Of accept
inG money from the Truefit Rain
coat company OF New York for a
contract which he promised to pro-
cure. The arrest was made by de
partment OF justice agents who had
followed tho officer during his in
Rpection OF the plant OF the raincoat
company. whose proprietors acted in
cooperation with the government to
detect the fraud.
The shadow OF completely in the
extensive scheme by which the COM
micsion agents made millions out OF
government war orders by acting as
hniddlemen in obtaining contracts for
manufacturers, today tended to
scores of business men and attorneys
nn Washington, New YORK. Boston
and other cities, and even to a few
secretaries OF members 20 congress.
These men promi ised 10 use their
Influence with government officials.
hrmya officers or members of con-
EreSs 10 assure the awarding of con-
tracts to special concerns and in turn
were to receive compensation II the
contracts were landed.
Motives Not Sinister.
A large proportion of these cases.
disclosed by correspondence and
other documents seized in raids yes
terday. were not prompted by slnis-
ter motives, officials believe, and
prosecutions will not follow.
Several thousand letters and docu-
ments containing proofs of an elab-
crate system of obtaining govern
ment contracts on the Illegal con-
tingent fee basis were received today
by the department OF justice from Its
agents who committed raids on hum
ireds of contractors business offices
late yesterday.
The commission paid on these con-
tracts, IL was disclosed. ranged from
to 20 per cent and the aggregate
fees probably ran into millions OF
dollars. Evidence was discovered
OF hundreds OF contracts made under
these arrangements heretofore un-
suspected by the department OF jus
tice.
Claimed 20 Have Influence.
Manufacturers were threatened in
many cases with being deprived of
contracts IL they refused to nego-
fiate with these agents on a cor mis-
sion compensation plan. Some al eits
represented that they had spec al
Influence over members OF congress.
In addition to these documents
other information came to the de-
partment from manufacturers who
had been solicited by contract COM
mission agents located in Washing
ton, The manufacturers offered
their assistance in stamping out the
illegal system.
An Immediate result OF the dis
closures was a letter sent by Attor-
ney-General Gregory to heads OF
hlicgovernment departments making
war contracts proposing that all fu-
hire contracts should contain a.
tlause pledging the manufa cturer
not to employ any third party in ne
sotiations with the government.
Afater being arrested today Lieu
kenant Staley made a complete con-
tession of his part in the transac-
l@n. department of justice officials
pycSi, and gave much valuable in
}mation which may lead to the de-
L.ecction OF other cases OF fraud. HeI
will be tried by a court-martial
At the department Of justice 1t was
said that no more raids are planned
iInmediately.