Evening star., 1952-03-25
Liquor Dealer Denies
Admitting } Farmers
For U. Taxi Purpose.
BY Cecil Holland

A Baltimore liquor dealer h0tly
denied today that he brought
three associates into Cuban and
Panamanian companies which
netted $40 million profit on al
$4,000 investment "for United
States tax purposes"
Lyman Harvey Klein, the busi-
neSSman, also reiterated earlier
testimony that he never author
lied and had no knowledge Of in
tervention by Washington's mys-
terry man Henry w. Grunewald
and Senator Bridges, Republican.
OF New Hampshire. in q 81 mil
lion tax claim filed against him
by the Bureau Of Internal Reve-
nue.. a,
He testified before the House
Ways and Means Subcommittee
headed by Representative King,
Democrat, Of California. The
subcommittee delved further into
Mr.. Klein's complicated business
dealings through q number Of
foreign corporations as part Of |
an inquiry into why Mr.. Grune-
wald, Senator Bridges and others
interested themselves in his tax
case. 4
Companies Set Up Abroad. I
The bureau placed q 81 million
assessment against MIR. Klein inl
l948 growing out Of the fabulous
profits the Baltimore businessman
and three associates made on the
sale of scarce Canadian whisky
in this country during the war
years.
Mr.. Klein said he realizedl
profits totaling more than SIS mil
lion on transactions handledi
through four Cuban and Pana-
manian corporations he and his
associates set up.
He testified that his New York.
lawyers, E. Gayle McGuigan andl
Richard Kilcullen, were the onlyl
ones authorized to handle thel
case. AS for others who inter-
- Vened. Mr.. Klein said:
I don't know who they were.
why they did; I never spoke toll
them-and I still have q tax case
outstanding"
Says He Didn't Already Know.
Committee Counsel Adrian De-
Wind suggested tnat Mr.. Kleinl1
showed an extraordinary lack oil,
curiosity" about ascertaining whyl,
several people were interested inl
his tax case, and asked:
WAS it because you already
knew what had happened?"
Mr.. Klein quickly replied: mo,
that's not true"
do you suppose the interven-
tion has prejudiced your case"
Mr.. DeWind asked.
IT is quite possible" Mr.. Klein
said.
The witness said it would bel
positively" false If any report toll
Canadian authorities claimed that
the entire stock in the four for
elgn corporations had been issued /
TO Mr.. Klein and that three asso-|
clates were brought in for taxi
purposes.
Tells Of Payment.
Did any one ever tell you the
stock interest of the three other
persons had bearing on your
tax case" Mr.. DeWind asked.
mo, sir" MIR. Klein replied.
The witness said none what
ever" when asked If he had trans
terred any funds abroad. He ex-I
planned that the only funds sent
abroad were about $64O, ,00O to nav
for about $4,000 shares of stock /
he had purchased in United bis
tillers of Canada.
He also told Representative
Curtis, Republican, of Nebraska.
that he had not disposed of any of L
his profits in the transactions
through gifts or other means that K
would prejudice the Governments
claim when the. tax case should s
be settled. Is
He said his part of the profits I
from the operation totaled about
$4,400, 900 in cash and all the stock
in still another company which
had cash value Of about 81 mil 4
lion. He explained, however. that's
. the stock represented a net gaintt
to him Of about $3.50. 900 since he {
already had a one-fourth Interest," I
in it. 4
Says He Was Angry.
Yesterday Mr.. Klein said he
learned Mr.. Grunewald had taken
an interest in the case when he's
read in the newspapers last De-
cember reports concerning the
Subcommittee's hearings. It wasI
disclosed then that the case had
come up during lunch meeting
of Mr.. Grunewald. /. Alfred Levy, |,
partner Of william Power MaloneyI,
who is counsel for Mr.. Grune-
wald, and Charles Oliphant.
former general counsel Of the
Revenue Bureau.
MIR. Klein testified he was dis
turbed" and angry" and told Mr..
Levy in a subsequent meeting that
he "had no right of interfering /,
In the case" |.
Asked what Mr.. Levy told him
about 1t. Mr.. Klein replied:
Nothing, didn't give him a
chance"
He said Mr.. Levy seemed not
to want to discuss the matter
and told him only, Take it easy"
That. he added, was "as far as
I GOT
Lives in California.
Mr.. Klein testified that he
maintains his business, H. Har-
vey Co.. Ltd. in Baltimore, but
has resided in California for the
last two years. He said he was
owner Of $4,000 shares of stock
in the United Distillers Of Canada.
q holding company, operating |
United Distillers. Ltd. and Dun-
can-Harwood, subsidiary that !
distributed Harwood whiskey.
He said four corporations were