Evening star., 1948-12-05
Rieye Says 1extron
Charity Trusts Cost
taxpayers 100000
BY the Associoied Press

PROVIDENCE, r. l.. Dec. A.
The president of the CIO Textile
Workers Union charged today that
three charitable trusts set up by
Textron, Inc, have cost American
taxpayers 100000.
Emil Rieve, the union head, at
tackled the trusts in an address be-
fore the Rhode Island CIO Council.
"So-called charitable trusts" we're
described by Mr.. Rieve as one prob
lem facing the textile industry
which you, right here in this State,
can help to remedy"
Under Inquiry Two Months.
Charitable trusts associated with
Textron have been under investiga-
ton for more than two months by
a Senate subcommittee headed by
Senator Tobey. Republican, of New
Hampshire. He charged the trusts
were schemes to avoid taxes"
Charitable trusts are exempt from
Federal income taxes. Senator Nc
Grath of Rhode Island, Democratic
national chairman. $15,000-a-year
trustee of one of the Textron-con-
nected funds, testified before the
Senate ! committee that his trust
was tax exempt under a tax code
provision which his trustees pointed
out" to the Internal Revenue De-
partment.
Royal Little, Textron president,
contended the trusts are legally
operated and charitable in purpose
but that he did use them to obtain
risk capital" because it was dif1i-
cult to obtain elsewhere.
Discusses Three Trusts.
The Senate investigation started
after charges by Mr.. Rieve, including
one that Mr.. Little used the charity
trusts for financial manipulation. +"
Discussing the trusts set up by
Textron, he said:
Here Is what taxes would have
done to the three big Textron trusts,
according to their own trustees:
Rhode Island Charities Trust
would have paid 100000 to the
Government.
m. I. T. Massachusetts, Insti-
tute of Technology Trust would
have paid $667 900.
Says They Paid Nothing.
"Rayon Foundation Trust would
have paid S525,00O.
But actually they paid nothing
at all. Not a cent.
The rest OF US had to make up
the difference American taxpayers
including industries which did
not use this device of charitable
dations'-have had to pay more
than 100000 extra towards the
costs of war and the costs of Gov
ernment
This $4,000,00 covers only the
three biggest Textron trusts. And
Textron Is only one Of many COM
panies which have used this device. "
Contributions Called Small.
Mr.. Rieve said two of the three
Textron trusts have made only rela-
lively small contributions to the
charities they were set up to aid.
The other, he said, has made none
at all.
"Mr. Little admits all this" Mr..
Rieve said. He is very frank about
it. The charity, he says, will start
when he is dead. While he is alive,
he wants to use the trusts as a
source of venture capital for Tex
tron and certain other companies" "
Textron and other companies
have closed a number Of New Eng
land mills, costing the workers
hundreds of jobs, Mr.. Rieve said.
Il do not charge that Mr.. Nc
Grath has been guilty of any wrong
doing" he said. But personally
I do not think 1t is proper for a
public official to be tied up in this
sort Of enterprise"
In Boston, Senator McGrath said
he has no connection with the Tex
tron Corp. He added: Il am not
interested in anything Mr.. Rieve
might have to say" He refused
g.,