Evening star., 1953-11-09

A House subcommittee says
former Secretary of the Treasury
John w. Snyder and Under
secretary Edward H. Foley in
tervened in tax cases on behalf
Of taxpayers during the Truman
administration.
These and other top Treasury
officials became interested in six
cases which the subcommittee of
the House Ways and Means
Committee investigated. The
taxpayers eventually won favor
able rulings that saved them
$40 million in taxes, the sub
committee said.
This was part of the story
told by the subcommittee in a
summary of the two years of
Investigations.
WrOngdOing Denied.
Mr. Snyder and Mr.. Foley have
denied any wrongdoing. but the
subcommittee cited two 1948
cases in detail:
l. The Monsanto Chemical Co.
winning a favorable capital gains
tax ruling on insurance the firm
received after fire destroyed its
Texas City (TexD plant. Former
Treasury General Counsel
Thomas j. Lynch testified that.
Mr.. Snyder's interest in the case
expedited a decision, but did not
determine the outcome.
2 A foundations winning a
favorable capital assets ruling on
drug patents. The subcommit-
tee said the Treasury made the
ruling on the foundation set up
by William S. Lasdon after We'll
burn Mayock. then counsel to the
Democratic National Committee.
discussed the case with Mr..
Snyder.
Mr.. Snyder issued a statement
today taking note of the reports
linking him with the two cases
and said that Il had no interest
in either case other than the in
tereSt of justice" He added that
he did not make the decisions
involved. He said, too, they
were ''in accord with the ex-
pressed intent of Congress-"
The subcommittee said it's re-
port shows the unhealthy moral
climate that surrounded many
Federal tax matters in recent
years and the damaging effect
of politics on the internal rev.
enue system.
The subcommittee announced
1t is disseminating the active in
veStlgation it began in May. 1851, |
into administration of the in
ternal revenue laws. 1t intends to
remain on a standby basis until
the end of the 83d Congress.
Corruption and incompetence
at all levels of the revenue ad-
mlnlStratlon have been the chief
targets of the investigation" the
introduction of the report said,
"By drawing attention to the
more startling cases in public
hearings, the subcommittee has
hoped to alert Congress and the
public to these twin evils. A
resume of these revelations is
included in this report to per-
petuate the lessons to be derived
from the hearings"
Scandals Summarized.
The report summarizes most of
the serious and sensational scan
dalS or other questionable and
unfavorable incidents brought to
light during the past two years,
Later chapters will comment on
the present status of Internal
Revenue Service methods, poll
cleS and administrative reorgani-
cations aimed at improving the
situation.
another chapter will discuss
what the subcommittee described
as the most difficult problem
OF determining the proper rela-
tlonshlp between the Treasury
Department and the Internal
Revenue Service.
Whatever form that relation
ship may take" the report de-
clared, "it is indiSputably clear
that intervention in tax cases by
treasury officials for political or
personal reasons not only pro-
ouced improper decisions in tax
cases but also had an adverse
effect on the entire internal
revenue system"
The investigation. the report
recalled, disclosed at the outset
that much of the official miscon-
duct, incompetence or other
troubles stemmed from appoint
ment of internal revenue collec-
tors "on the basis of recommen-
dations made by local political
organizations. often without re-
gard to the character or ability
of the nominee"
Moreover" the report con-
tinued. "a collector. once ap-
pointed. was ordinarily not sub
Ject to control by the bureau
for the reason that the politi-
cal strength of the collector often .
exceeded that of his Washing ;
ton Superiors. This meant that I
in some Offices conditions were
allowed to deteriorate to the I
point where revenue collections i
were endangered rather than of {
fend the local collector"
In another section of the first