Evening star., 1952-05-29
Senate Report
Hits Ship Deals,
Breakdown
Criminal Prosecution
Of Firms and Officers
May Follow Probe
By Robert K. Welsh

W NVUSTI ~ VotSU
The Senate Investigations Sub.
committee today called for pos
sible criminal prosecution of some
officers and attorneys Of firms in
volved in surplus ship deals.
1t did not identify individuals
or companies it believes may have
violated criminal as well as civil
statutes. But it demanded q
prompt and vigorous Justice De-
partment crack down on any law
breaking.
It urged the Internal Revenue
Bureau to recover any taxes that
were evaded by corporations in
the case. 1t estimated that be-
tween $3.50, 900 and $1.4 million in
such taxes may be due the Gov.
ernment.
The report, submitted to the
Senate by Chairman Hoey. Demo-
crat. of North Carolina covered
the subcommittee months Of
study and its spectacular open
hearings last February and March.
Criticizes Casey, Morris.
It dealt particularly with the
way former Representative Joseph
E. Casey, Democrat, Of Massa-
chusetts and several associates got
eight surplus war tankers from the
|old Maritime Commission about
five years ago and later sold them
at fat profits. The Casey group
put up a total of only $10l 900 Of
its own money and reaped more
than So million in profits.
The report severely criticized
Mr.. Casey and others. including
|Newbold Morris. Mr.. Morris, a
New York lawyer. briefly headed
the administrations drive against
corruption in Government.
The report also denounced what
lit described as profit-grabbing.
unsavory if not illegal tax-dodging.
and other questionable practices.
It turned its fire on policies and
administrative confusion Of the
Iold Maritime Commission. It
charged that surplus ship dis
|posal provisions were ignored, IL
not violated. in some Instances.
State Department Hit.
Disclosures that two Of the
tankers were used by various
owners or charterers to carry oil
to Communist areas in the Far
East until May. 1850, also aroused
the Subcommittee's wrath.
"The fact that the State De.
1partment was aware of and inter.
posed no objection to this trade
is a serious reflection on the judg-
ment of that department." the
report declared.
Mr.. Morris, who at one stage Of
the public hearings accused some
subcommittee members of having
diseased minds. came in for at
tack-but not on that score. The
report merely mentioned his be-
havior as witness.
In other respects, however, It
declared he did not make q fac
tual statement when he told news.
paper reporters in advance of the
hearing that he never received
money in the tanker transactions.
The report. moreover, disputed
his assertion that he was only q
minor or unnecessary witness.
Despite Mr.. Morris contention
that he played only a minor role
in the affairs of the United Tanker
Corp. and its affiliates," the re-
port stated, 1T is noted that, in
almost every instance when q
critical or important problem
arose in connection with acquisi-
ton or operation of the tankers.
he gave the matter his personal
attention"
Still Needs Foundation.
Mr.. Morris was. and still is
president of the China Interna-
tional Foundation. Inc. That
philanthropic organization has
stock control of the United Tank ,
er Corp, a concern which acquired
three of the tankers from the
Casey group In 1948.
Delving into the highly compli.
Gated series of deals engineered
originally by Mr.. Casey and q few
others. the report singled out two
Washington lawyers for special
criticism. They were Joseph H.
Rosenbaum and Robert w. Dudley.
Mr.. Casey's brother-in-law.
Mr.. Rosenbaum and MIR. Dudley.
former members Of the same law
firm, figured prominently in an
other Senate subcommittee probe
(Can CYYYn0 n~-~