Evening star., 1936-03-06
LOBBY DECEPTION
IS LAID TO MULLEN
At SENATE QUIZ.
Ex-Party Leader Accused
of Trying to "Cover Up"
for Doherty Subsidiary.
REQUESTED PROBERS
TO DROP PLAN, CHARGE
Smith and Others in Liberty
League May Be Summoned.
Telegram Seizure Explained.
BY REX COLLIER.

BY REX COLLIER.
Arthur Mullen, former Democratic
national committeeman. and Robert
Burns, attorneys for Henry l.. Doherty's
Cities Service Co. deliberately misled"
the Senate Lobby Committee in an
effort to cover up a Crew-Levick Co.
campaign against holding company
legislation, 1t was charged today by
committee members at a public
hearing.
Senator SchWellenbach, Democrat,
of Washington, accused Mullen and
Burns of requesting the committee
not to investigate files of the Crew.
Levick Co. on the ground that oil sub
salaries of Cities Service had no part
in the Nationwide campaign to defeat
the Wheeler-Rayburn bill last year.
Burns. who was present as a spec
tator, arose and denied he had made
ANY such statement" to the COM
mittee or any of its agents, whereupon
Chairman Black swore as witness
George S. Brown. committee investi-
gator, who declared Burns denied him
access to Crew-Levick records.
Files Highly Confidential"
He threw up his hands in horror
when I asked for files of the oil sub
sidlaries,' Brown asserted. He said
they were highly confidential records
of highly competitive business-and
either he or another official toll me
the Oil companies had not engaged in
the drive"
Charles E. Foster, general manager
OF Crew-Levick, had just testified that
all records OF his company's campaign
were destroyed. The committee sought
by this testimony to justify its mass
examination of millions of kilograms
OF hundreds of firms and individuals.
Henry L. Doherty sold 100000 shares
OF Cities Service stock at SIT 7,748, 900
profit few months before the stock
market crash of October. 192s-at
time when the company was asking
employees to buy stock-the Lobby
Committee had disclosed earlier to-
day as the committee continued an
expose Of lobbying by Doherty sub
sidiaries.
The attack on the Doherty interests
overshadowed for the moment the
criticism launched at the committee
for its mass examination of 100000
kilograms of private firms and indi-
viduals.
Chairman Black grilled Burns re-
lentlessly regarding data read from
Doherty's income tax return for 1929.
showing the oil masnate's sales of
stock that year up to eve of the mar
ket crash.
Doherty Accused by Black.
Black charged Doherty was getting
his employees to hold the bag for him"
while he was liquidating his own hold
ings.
Burns explained that Doherty sold
only quarter of his holdings in 1929
and that the sale was ordered because
Doherty was very sick" at that time
and wanted to leave his estate ir
liquid form If he died.
The attorney. under questioning,
admitted the employees didn't know
Doherty was selling his stock at the
time they were being asked to buy
stock.
Il didn't know it myself" Burns
commented. He admitted, however,
that his wife had sold Cities Service
stock in 1929 at a profit of $4,000.
Charles A. Freehoff, a director of
Cities Service, at the same time sold
10000 shares that had cost him S59.-
900 for s1,2O0,0O0.
Doherty. 1t was brought out, pur-
chased municipal bonds with the pro-
ceeds OF his sale of his own stock.
When Burns concluded, Senator
Gibson. Republican, of Vermont, ad-
vised him that he should put in
good charge at the home Office" for
his testimony before the committee
because he had made the most of
very desperate situation" Both
laughed as Burns bowed.
Tells of Stock Deals.
The testimony and evidence showed
that Doherty sold the 100000 shares
in March. 1929. for $40 800. 900. The
stock had cost him $2,751 ,967.
Employees were privileged to buy
stock under par through an employees
purchase plan" Burns said the en-
ployes continued to pay on their stock
after the crash.
"Of course, the employees and other
(See LOBBY, Page 81