The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-10-26
GIFTS CAUSE
WATSON QUIZ,
SAYS LAWYER
Difficulty to Be Cleaned Up
Soon, Asserts Attorney
for Ex-senator.
$4,000 ITEM WEIGHED
Income Reported Honestly,
Declares Former Indiana
Political Boss.

WASHINGTON, Oct. 26.-Fed-
eral investigation of income tax pay
mentS by former Senator James E.
Watson Or, Ind centers around
$4,000 in gifts" received in 1928
% from B. j. Grigsby, radio execu-
tive, Watson's attorney, Samuel A.
King said today.
Mr.. King is a brother of Senator
William H. King ID, Utah). He
indicated belief the tax inquiry
would be cleared up soon, and said
it resulted from Federal investi-
cation of alleged failure of Jacob
R. Finklestein, political associate of
Mr.. Watson, to file income tax re-
turns in the boom years.
According to Mr.. King, Mr.. Wat
son received two gifts from Mr..
Grigsby, IAN old friend" One was
of $4,000. The other amounted to
$4,000 Each was split $3.50 with
Mr., Finklestein, Mr.. King said. He
denied that the money received from
GrigSby was a fee for services. All
Mr.. Watson had done, he said, was
introduce the radio executive to
Radio Corp. of America officials.
The introduction resulted in an
agreement between the Grigsby-
Grunow radio interests and RCA
as to use of patented articles.
Inquiry Disclosed Gifts"
AS the Federal law at the time did
not require gifts to be listed, Mr..
WatSOnS income tax returns failed
to Mr. King, the Federal inquiry in
to Mr.. Finklestein's income disclosed
the gifts"
Mr.. Grigsby gave Mr.. Watson the
$4,000 in Chicago while Mr. Finkle-
stein was present, Mr.. King said.
Mr.. Watson, out of generosity gave
S25 900 to Mr.. FinkleStein, according
TO Mr.. King The lawyer said that
later in New York, Mr.. GrigSby, just
before sailing for Europe told Mr..
Watson he should like to do some
thing for him."
The Senator later received
check for $23, 600 or $4,000, amount
ing to the profit on the sale of 500
shares of Grigsby- GrunoW stock,
bought by Grigsby in Watsons
NAME" King said.
Decided on Split, Says Lawyer
Because Finklestein received
large fee in the interim for some
work done for the Grigsby GrunoW
interests and sent $25,0 coo of it to
Mr.. Watson as a gift, King said the
Senator decided to split the $4,000
with his Indiana political friend and
one-time campaign manager.
MI. Watson said that he had eX-
planned to income tax Investigators
that his returns for many years had
been made out by a Mr.. Packard"
of the internal Revenue Bureau.
Packard, Mr.. Watson said, made
out the returns of many senators,
probably as many as half the men,
bership of the body.
Honest Report" Says Watson
Il explained to him in full my re-
turns" Watson said. He made out
the actual blank on the basis of
the outline 1 gave him.
About two years or a year and
half ago, another Internal
Revenue man came to my Office and
asked to look over my tax returns.
We went over them. He said that
l was an outstanding man and
that he knew I did not want to
have any mistakes in my returns.
l told him that was the way I felt"
After this examination, Mr.. Wat
son said, and perusal of cancelled
checks and other financial records,
the agent advised him that he
owed 5000 more to the government.
Il Immediately gave him my
check for that amount" said the
former Senator. Il am positive that
1 reported my income to the govern
ment honestly"