Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-04-07
ALBAN|ANS BATTLING ITALIAN INVADERS
u. 5. Jury |ndicts
Pendergast
AS Tax Evader
Mysterious Split
Of SAT-. 1000 Fund
Declared Solved
BY the Associated Press

Declared Solved
By the Associated Press.
KANSAS CITY, April Tom J.
Pendergast, boss of Kansas City's
Democratic organization and a power
10 Missouri politics, was indicted to-
~ by a Federal grand jury on q
charge of "willfully, knowingly, un-
lawfully and feloniously attempting
to evade and defeat the income tax
law"
At the same time United States
District Attorney Maurice M. Milli-
gan pronounced solved" the distri-
button of mysterious SAT 900 fund
which changed hands before the
compromise of State insurance
rate case under which policy holders
received only 20 per cent of some
$9,500,000 impounded premiums.
The indictment. climaxing
series of Federal and State assaults
on Pendergast's political stronghold,
charged he received $315, 900 out Of
the settlement fund and failed to
report it for income taxes.
O'Malley Also Accused.
Indicted with Pendergast was r.
E. OMalley, State insurance super
intendent at that time the compro-
mise was effected. OMalley was
charged with evading payment Of
tax on s62 900.
Judge Merrill E. Otis, who re-
ceived the grand jury's report in the
absence of Judge Albert L. Reeves,
set bond of $4,000 each, returnable
April "a. Pendergast was arraigned
before United States Commissioner
Charles H. Thompson and released
on $4,000 bond.
Pendergast said he had no com.
ment. OMalley was reported to DO
visiting in Baltimore.
Two Counts in Each Bill.
There were two counts in each in
dictment. OMalley was accused Of
paying no taxes for 1885 and 1886,
while it was asserted he received
$22, 500 in 1885 and $4,000 in 1886.
The funds distributed before the
compromise was made May 10, 1886,
were collected by the late Charles
r. Street of Chicago from fire in
surance companies involved in the
rate case.
The Pendergast indictment charged
he reported a net income Of $87, $40
for the calendar year 1896 and paid
tax Of SOS, 481, while his real net in
come was $347,365. upon which
$l95, 682 was owed.
It charged he paid only $464 on
a reported 1885 income Of $14,8ll.
although he owed s15,567 tax on
a net income of s69,6l1.
Racing Stable Included.
One of the items of income listed
by the Government for 1896 was
s24,485 from Pendergasts racing
stable.
District Attorney Milligan said the
indictments were of preliminary
character and that the grand jury
would proceed in further investiga.
lions that might disclose other
startling things in the next few
weeks.
The indictments climaxed a series
of events which have kept the polit-
ical organization on the defensive
since 1t reached what seemed to be
its peak of power in the 1896 cleo
tons. Hardly had victory celebra-
lions of Democratic sweeps died when
Federal Judge Albert L. Reeves. a
Republican, ordered grand jury to
investigate vote frauds in Kansas
City.
Concrete Results Obtained.
IN two years 278 persons-many
Of them members of the Pendergast
organization, were indicted. Sixty
three were convicted. So pleaded
guilty, 100 pleaded no defense, throw
ing themselves on the courts mercy.
10 cases were dismissed and one
defendant awaits trial.
Prison terms ranging as high as
five years were assessed some Of the
guilty. Others were fined heavily
and some drew jail sentences.
In the midst of the fraud trials
a Pendergast ally, Senator Harry
S. Truman, attempted to block re-
appointment Of Prosecutor Milligan.
but was rehuffed by President
Roosevelt and Senator Bennett
Clark, also q Missouri Democrat.
Governor Pushed Action.
Dissension between Pendergast
and Missouri's Democratic Gov
ernor, Lloyd c. Stark. came to the
surface October 10. 1887. when Gov.
Stark ousted OMalley from the in
surance superintendency. The Gov.
ernor recently charged breakdown
in law enforcement in Kansas City
and asked the Legislature to return
its police department to State con-
troll. He also demanded the custer
of State Prosecutor w. w. Graves
Of Kansas City, and q Democratic
circuit judge, Allen c. Southern,
called a grand jury to investigate
conditions here. Graves was in
dicted on a misdemeanor neglect Of
duty charge. One hundred and sixty
indictments followed; also a general
shutdown of gambling here.
Meanwhile. Judge Reeves i'm.
paneled another Federal grand jury
and told it to go after the big
man" Of Kansas City gambling, but
Milligan turned the jurors attention
to the insurance fund compromise.
~ NH