New-York tribune., 1918-06-18
Nation Wide
War Contract
Graft Barred
Continued from page l

with B. A. Bittan, president Of the
Quaker City kalncoat Company, Phila-
delphia, Who worked with government
agents IN gathering evidence against
them. They were arrested in Wash
lngton recently and are now at liberty
under bond. The government will make
theirs test case, meanwhile taking
action against others suspected of sim
liar tactics.
Most of the raids to-day were made
in the East, and large proportion in
New England. Only the officers of the
firms suspected of having entered into
tered. Officials pointed out that many
of these have made the arrangements
without realizing the illegal nature, de-
spite warnings issued early in April
by the Department Of Justice.
Explains Disclosures
The entire direction of the campaign
of detection of these contracts during
the last few weeks has been in the
hands of Assistant Attorney General
Huston Thompson, who late to-day
gave out this statement explaining the
disclosures:
"There are to-day number of
brokerage and contingent fee individ-
uals ana corporations III Washing ",
New York and other cities who boldly
circularize the manufactures of the
country, stating that they have close
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 give them power to
obtain favorable contracts for their
clients-in consideration of commissions
which run from to 10 per cent of the
amount of the contract.
I'm number of cases the contin-
gent fee man has informed the manu-
facturer that the latter could not deal
him, and that unless the manufacturer
paid the contingent fee he could not
get the contract.
There are other instances where
the manufacturer has sought the con-
tract broker and requested him to OBJ
tain contract for the manufacturer,
who willingly agreed to pay the COM
mission. AS government contracts run
into hundreds of millions, if the pro-
ceeds from large number of them are
shared with the contingent fee man
the amount of the commissions can be
imagined.
Manufacturer Aids Government
"Shortly after the issuance of the
lllegality of contract contingent fees
the Department of Justice officials be-
came, aware of an attempt by John
Fleming, John T. Cavanaugh, Eugene
Sullivan and Joseph Kohn to obtain a
! contract for the manufacture of rain
coats for the Quaker City Raincoat
Company, of Philadelphia, through i'm
proper methods. The president of the
company, B. A. Bittan, was called on
the telephone by an unknown party,
who ;old him that if he wanted to get
any government contracts he could
90 so by getting in touch with Joseph
kohn, Of Boston. who had inside infor-
nation in Washington. He represented
himself to be Kohn's brother, but re-
! fused to go to Bittan's place of busi-
ess
"Bittan Immediately sought the adj
vice Of an officer in the Quartermas-
was told to 60 to Washington and Law
the matter before the proper authori-
ties, which he did. Bittan began cor
respondence with konn in Boston.
which led to subsequent events taking
place in Washington.
Under the direction of the Depart
ment of Justice, Bittan took rooms at
Motel IN Washington, where he ar
ranged to meet Fleming, Cavanaugh
| and Sullivan. A contract was drawn
up, in which it was agreed that Bittan
was to pay the other parties per
cent commission on the contract about
! to be obtained, and per cent on ali
subsequent contracts so obtained
blttan had been assured that he would
receive contract for about 100000
raincoats. ''0O
| ."In addition to the percentage com
mission they demanded $500 cash, as
sertl,ng that the same was for an officer
in the Quartermaster's Department at
Washington. They also claimed that
they had men under their influence
and in their pay stationed in various
purchasing departments of the govern
ment and could obtain contracts when
ket MAI
THE $500 was paid by Bittan and
the transaction completed. Fleming.
Cavanaugh and Sullivan were arrested
and the $500 was found on Fleming.
kohn was arrested in Boston. To-day
they were all indicted by the Grand