The Sentinel=record., 1918-06-18


 craze and contingent fee individuals and corporations in Washington, New York and other cities who boldly cir cularize the manufacturers of the country stating that they have slose relationships with some or all of the departments of the government and in some instances influences with indi- viduals in these departments, sinister in character, which gave them power to obtain favorable contracts for their clients for commissions which run from two to ten percent of the amount of contract. In number of cases the contingent fee man has informed the manufacturer that the latter could not deal with the government except through him and that unless the man ufacturer paid the contingent fee he could not get the contract.
 "As government contracts run in 10 hundreds of millions, if the pro ceeds from large number of them are shared with the contingent fee man. the amount of these commissions can be imagined.
 Shortly after the issuance of the statement of April 5, warning of the illegality of contract contingent fees the department of justice became aware of an attempt by John Fleming, John T. Cavanaugh Eugene Sullivan and Joseph Kohn, of Boston, to obtain n rp prt fnp raincoats for the quaker City Raincoat company of Philadelphia, through i'm proper methods.
 'fB. A. Bittan, the phesident of the company sought advice of an officer in the puartermasters department in Philadelphia and was told to go to Washington and lay the matter before the proper authorities, which he did. Bittan began correspondence with Kohn which led to subsequent events taking place in Washington.
 Under the direction of the depart ment of justice, Bittan took rooms at hotel in Washington where he ar ranged to meet Fleming, CayanaUgh and Sullivan. A contract was drawn l up in which 1t was agreed that Bittar was to pay the other parties five peI cent on the contract above to be ob- tain and six percent on all other con tracts so obtained. Tn addition to the percentage commission they demand ed $500 cash, asserting this was for an officer thequartermasters depart ment at Washington. They also claim ed they had men under their influence and in their pay stationed in various purchasing departments of the gov ernment and could obtain contracts whenever the government was in the market.
 "The $500 was paid by Bittan and the transaction completed.
 "F1eming, Cavanaugh and Sullivan were arrested and the $500 was found on Fleming. Kohn was arrested in Boston.
 To-day a general search was made of the papers of corporations in cities all over the United States who have contractural relations with the gov ernment and whom 1t is believed have obtained their contracts through con- tingent fee agents. A search also has been made of papers of certain firms and corporations who act in the ca pacity of contingent fee operators"
 MT. Thompson's statement ex- plained: There is no intention to interfere with legitimate relationship between manufacturers and the vari- ous departments of the government over contracts but the manufacturer must deal directly with the depart ment and not through middle men and agents employed upon a contin- gent fee basis.
 "The government through all it's agencies is determined money shall not be expended upon contingent fees for brokerage contractors" Secretaries Baker and Daniels have assigned the secret agents of theii respective beaureaus to assist the de- partment of justice investigators. Il army officers are found to have been subject to the influence they will be cited for court martial.
 Remedial steps are to be taken at once to prevent future fraud. War department officials in charge of su- pervising contracts have under con sideration a clause to be inserted in contracts specifically providing the agreement shall be null if any fee is paid to an agent for it's negotiation or if 1t is sublet.
 Investigation SO far has not con vinced officials that a large propor- ton of war orders are tainted with the contingent fee frauds, To the ex- tent that agents have made large fee, the government has been muleted out of money, officials say inasmuch , as contractors are believed to have added Che commission fees to thelr bids.
 At least four or five contractors agencies exist openly ip Washington 1t is said. ready Co accept counts '