Vilas County news. [volume] (Eagle River, Vilas County, Wis.) 1896-1927, 1920-01-21
BILLION CRAFT IN
SH|PYARDS Barred
twenty Builders on Pacific Coast
Are Involved.
FALSE VOUCHERS THE MEDIUM
Attorney General Palmer Starts In
quiry a-i Federal Grand Juries of
Three States Go Into Action
Will Hold Up Claims.


Volving more than $1,000,000000 in
connection with the building of ships
for the government in Oregon, Wash
ington and California have been I'M
earthed by government investigators,
it became known here when William
ii. Tidwell, special agent of the treas
ury department, was appointed chief
assistant to Special Assistant United
States Attorney General Bert Schles-
niger here.
The government, according to infor-
nation from authoritative sources, Is
alleged to have been defrauded through
shipyard conspiracies working by the
payment of false vouchers for. sums
that shiphuilders obtained Illegally.
Score of Magnates Involved.
A score of very prominent shipbuild-
ing magnates are understood to be in
volved in, the investigation, which is
said to have reached the stege calling
for special federal grand jury sessions
in the cities of Oregon, Washington
and Californtt where big shipbuilding
plants are located.
Cost-plus contracts awarded by the
government for construction of vessels
during the war, by which the builders
were allowed 10 per cent over what
they claimed to be the cost of con-
struction were said to have been the
medium of the alleged frauds.
First Jury Action in Seattle.
Assistant Attorney General Schles-
niger is to leave for Seattle, where, it
is understood, the first federal grand
Jury sessions dealing with the report
ed discoveries of government agents
working under Schlesinger will be
held.
Subsequent meetings Of federal
grand juries will be held in other large
cities of the coast in rapid succession,
it was said.
1t is understood that Attorney Gen
eraI Palmer, on the strength of the
scope of the alleged discoveries of
graft, has ordered the United States
shipping board to hold up claims APP
proximating $37 100000 70 await the
outcome of the investigation.
Silent in Washington.
Washington, Jan. 16.-Department
of Justice officials admitted an in
vestigation Of financial transactions in
Pacific coast shipbuilding had been
ordered, but declined to Indicate the
nature of the evidence obtained. Of
flcials of the shipping board likewise
were silent on the reported discloS-
ures Of fraud.
The Investigation, it was recalled,
was instigated by former Chairman
Hurley Of the shipping board 1t was
the intention of the board, about
Fights months ago, to go into the
books of the shipbuilding companies
itself. but plans later were changed
and the entire matter turned over to
Attorney General Palmer.
There was no intimatiOn at that
time, however, that the alleged fraud
would attain any such proportions as
government agents now believe they
have uncovered.
Names of Suspects Yelled.
information which came out piece
meal here tended to show that at least
seven large shipbuilding corporations
were involved in the alleged fraud.
Their identity was not disclosed and
probably win not be until federal in
dictments have been obtained and exc
cuted.
The government was said to be pre-
pairing it's case with view to avoiding
certain legal technicalities which have
led to long-drawn-out fights in at
tempts to recover Illegally paid funds
on certain other wartime contracts.
The opinion among officials here
seemed to be that the alleged fraudu
lent transactions were limited to yards
on the Pacific coast. 1t was said that
no reasons for investigating Atlantic
and gulf coast yards had been pre-
sented thus far.
Although several illegal transac-
tons were discovered in some of the
Eastern yards shortly after the sign
ing of the armistice they We're cleared
I'D without resort TO courts.