Evening star., 1921-01-20
$100,0)Q,0D0FRAUD
IN SHIPS CHARGED
Ex-ControIIer Abadie Men,
tions C. N. SchWab in Ship
ping Board Testimony.
BY the Associated Press.

BY the Associated Press.
NEW YORK. Jnnuary 3O.-At
least $100.000.O00 improperly paid
shipbuilders by the United States
Shipping Board will be disclosed
through an audit of accounts now
in progress. Col f. II. Abadie. for
mer controller general of the board,
declared here today before the
Walsh congressional committee.
Col. Abadie charged that there were
"a great many serious Irregularities
hem Shipbuilding Corporation and the
government as a result of the con-
nection of Charles NJ. Schwab with
both the board and the corporation.
Things had been done and allow
ed" he testified. because of Mr..
Schwab's connection which probably
would not be allowed otherwise, and
though I was satisfied Mr.. Schwab
knew personally nothing of them. the
influence from Mr.. Schwab's dual posi-
tion was prevalent just the same.
Though at that time l had never
met Mr.. Schwab, l was satisfied from
my knowledge of his record that he
would be the first to condemn any
injustice by his corporation toward
the government and would willingly
and gladly return any moneys i'm
properly paid his corporation"
Col. Abadie said that the accounts
OF the Bethlehem corporation were
ordered audited first because of re-
ports made by the plant perfection
section of the board charging irregu-
larities. The audit. which will include
all shipbuilding companies which had
contracts with the government. will
cost $1,000,000. he testified
The audit by certified public ac-
countantS, the witness said, was or
dered year ago and was the cause
of controversy between Col. Abadie
and Martin J. Giuen. special assistant
to the chairman of the board. Col
Abadie predicted it will form the
basis for action looking to recovery
of vast sums
The witness said he never talked to
larities. but believed Mr.. Schwab
would have welcomed an audit of the
Bethlehem corporation.
In reply to questions he made it
plain that his charges did not include
the Bethlehem corporation alone. but
various shipyards s~.thseaghent the
country. = 80 s
Forced 70 Re.lss. He says.
During examination today Of Col
Abadie. Representative Tom Connolly OF
Texas remarked:
II have been listening to whole
lot Of testimony before this .committee
and it seems to me that everybody Is
trying to pass the buck to some Dne
else"
Mr.. connolly's remark came in con-
nection with the presentation Of a
large volume Of detailed testimony by
Col. Abadie relating 80 unchecked
material in Pacific coast shipyards, a
part Of the $500, 0,000, 600 which he said
is carried on Shipping Board books as
undistributed charges.
Col. Abadie read into the record the
statement that his resignation had
been forced by a 'frame-up." oharg-
ing that it had been engineered by
Martin J. Gillen, then special assist
ant to Judge Barton Payne. chair
man of the Shipping Board. He said
he did not learn this, however, until
dered and accepted. He went into
considerable detail as to his relations
with Mr.. Gillen.
Alleged Relations With Gillen.
The name of Martin J. Gillen was
brought into the inquiry by Col.
Abadie late yesterday.
Testifying to the handling of the
boards funds, Abadie cited what he
termed an unpleasant incident which
confronted him" as the result Of an
attempt to settle requisition claims. -
"Gillen summoned me to his office in
December. 1919, and told me to appear
at his office at o'clock to certify to
some records" the witness said. Il
was presented with a number of type
written certificates. carrying pay
ments of millions of dollars to former
owners Of requisitioned hulls and re-
ouested to sign on the dotted line"
The witness said he refused to do SO
until he was satisfied they were cor
rect. although Mr.. Gillen demanded
that if he intended to continue as
general controller, he do SO by 6
pm. Col Abadie said he still refused
and ascer-ained. through a special in
vestigator, that had I certified as
demanded by Mr.. Gillen that afternoon
in his office the fleet corporation
would have lost millions"
Reports 4S73,S4O Overpayment.
An overpayment OF $S73,S49.57 was
made to the Nafra Ship Company. Inc.
by the United States Shipping Board
in connection with operating ex-
penses and revenues of three ships
purchased from the company by the
board
The payment was made. Col. Abadie
said, to reimburse the ship company
for freight and other charges they
were unable to collect after they had
turned the ships over to the govern
ment. The total amount which they
said was due them was $1.884.467. OF
This was paid. and when the board
fo collect tbiS oU,onrt Dol,