Evening star., 1952-02-20
Senators Quiz Casey
On Stock Splits and
Fat Fees 10 LAWYERS
By Robert K. Welsh

By Robert K. Walsh
Senate investigators sharpened
more questions today for Joseph
E. Casey in exploring fat fees to
lawyers. stock splits to friends and
big money from roundabout sales
Of ships once owned by the Gov
ernment.
Former Representative Casey,
Massachusetts Democrat, now
practicing law here. was called
back for a second day before the
Senate Investigations Subcom-
mittee.
The subcommittee is studying
the legal, financial, ethical and
nautical course of eight war;
surplus tankers. The American
Overseas Tanker Corp, formed
with only $101 900 in 1947 by Mr..
Casey and few prominent asso-
ciates, bought the vessels from the
Maritime Commission. The Casey
group. with others who later got
shares by gift or purchase. netted
$3.2 million by sale of their stock
in 1850.
Discloses Legal Fees.
Mr.. Casey disclosed late yester-
day that he, Robert w. Dudley,
his brother-in-law, and Joseph H.
Rosenbaum, another Washington
attorney. received legal fees rang
ing from $4,000 to $27,0O ct vari-
GUS points in the ship transactions.
His own fees totaled $4,000, in
addition to his stock ownership,
he revealed.
He credited Dudley with having
come up with the germ of the
idea" whereby the American
Overseas Tanker Corp. was able
to get a SO million loan from the
Metropolitan Life Insurance Co.
to buy the tankers. The ships
then were chartered to a company
under Panamanian registry, and
AOTC had to pay no United
States income taxes, the subcom-
mittee has stated.
Mr.. Casey testified Rosenbaum
was active with Howard Newmark,
a Washington lawyer, and others
in negotiations that led to the
sale of five of the tankers to ship
ping interests financially con-
trolled by Stavros Marches. Mr..
Casey said Mr.. Newmark got a
$4,000 brokerage" fee in an
other phase in the work.
Besides being paid a finders
fee" of $4,000 in one trans
action and sharing $4,000 legal
fees paid his law firm by AOTC,
Rosenbaum also bought $50 shares
of AOTC stock, Mr.. Casey said.
Both Under Indictment.
Rosenbaum and Dudley, for
merly in the same law Office, are
under indictment on perjury
charges, growing out of another
Senate subcommittee's investiga-
ton of the Reconstruction FL
nance Corp. last year. Rosen-
baum figured in the mink coat"
episode of that inquiry. His in
dictment had nothing to do with
the incident. Nor is the RFC
involved in the present hearings
on the ship deals. &
The subcommittee main line
still traces the intricate corporateI
journeys of the tankers and their
final destinations. including the
China International Foundation,
then headed by Newbold Morris.
That foundation eventually ac-
quired the other three tankers.
Mr.. Morris. Special Assistant
to the Attorney General in a
current investigation Of corrup-
ton in Government, and his New
York law partner, Houston Was
son, took larger shape yesterday
In the investigative picture.
There was testimony that the
law firm received more than $780,
900 in legal fees.
Subcommittee Chairman Hoey
Democrat, of North Carolina, said
Mr.. Wasson would testify next
week. Republican Senator'S Nixon
Of California and Mundt of South
Dakota declared Mr.. Morris "has
got to be called to explain some
of the big fees his law Office got.
Casey Defends Actions.
Mr.. Casey vigorously defended
all legal and ethical aspects of
the entire ship buying, chartering
and re-selling project. He assured
the subcommittee that there was
nothing up the sleeve" and that
the venture. while honestly hoping
for a profit, also performed "a
real public service"
He vehemently denied he and
his associates tried to dodge taxes
by a complicated system of inter-
locking companies, foreign subsi-
diaries and. roundabout stock
sales or transfers. He also de-
MED his group received any privi-
leges or cut prices from the old
Maritime Commission.
THE virtue of this proposition, :"
he declared, was that my associ-
OBS Annr;lv ne