Evening star., 1954-06-28
Senators Told
Of Big Profitsm
HousingD Deals
Federal Official
AnoIyzes 3 Lorge
Projects in Area
By Hector Mcleon

Builders and those who A.
nanced them in construction Of
the Shirley Duke Apartments In
Alexandria cleared more than
So million, William F. McKenna.
deputy administrator Of the
Housing and Home Finance
Agency. testified today
He told the Senate Banking
Committee. headed by Senator
Capehart, Republican, of In.
diana that the builders had
made representations which he
believes were false. They are
protected from prosecution, he
declared, by expiration of the
three-year statute of limitations.
He gave the committee an
analysis of q apartment house
projects in which windfall profits
had been made. These included
the Shirley-Duke project and two
others in the Washington area,
the Huntington Apartments. Inc.
1467 Huntington avenue. Alex.
andria, and Parklands Manor.
Inc. Of Washington.
Mr.. McKenna testified as the
lead witness before the commit
tees series of 15-day public
hearings on charges Of corrup-
ton in the Federal Housing Ad.
miniStration.
He also named three members
Of the du Pont family as among
stockholders who received q
"windfall" profit of $549.375 in
connection with three Delaware
apartment projects built with
Government-inSured loans.
The three members listed were:
Pierre S. du Pont Sd. Nicholas z.
du Pont and Lammot du Pont
Copeland.
Largest stockholders in the
Shirley-Duke project. Mr.. Nc.
Kenna said, were Mr.. and Mrs.
Herman w. Huffman, of Wash.
ington, who received SCOT $50
from the distribution of wind.
fall profits.
WindfalI Explained.
"Windfall profits" represent
the difference between cost Of
construction and the FHA-guar-
anteed mortgage loan.
Mr.. MeKenna said other large
stockholders II the Shirley Duke
project were Mr.. and Mrs. Bryan
Gordon, jr., of Bluemont, Va,
who received $552, ,483, and Mr..
and Mrs. Earl j. Preston and
son. John E. Preston. of Silver
Spring. Md, who received $40O,.
$50 out of the mortgage pro.
ceeds.
Mr.. McKenna, in charge Of Z
major investigation of the FILA,
testified that builders of the
Shirley Duke project were per.
suaded to go into the deal by the
Organization which financed it,
Investors Diversified Services.
This organization, Mr.. McKenna
said, cleared more than 81 mil
liam on the transaction.
He testified that the local
manager of IDS, E. M. Bros
and Mrs. Bros. received $89, $50
from the mortgage proceeds and
that Mr.. Bros resigned from IDS
in April of this year. when he
was asked to furnish Information
to This company on outside ac-
tivitieS.
YOung'S Concern Linked.
Mr.. 1cKenna said he had been
told that IDS had made $26
million in profits throughout the
country in financing apartment
house projects built under Sec.
ton 608 of the housing act,
which expired in 1851. The COM
pany. he said, is owned by Alle-
gheny Corp, which is controlled
by railroad magnate Robert
Young.
Senator Capehart pointed out
that windfalls were legally pos.
sible in many cases under Sec
ton 608. He called this loose
ness" of the law and said that
lax administration also contrib.
uted to windfall profits. He has
estimated these may total as
high at 5000 million.
He said the committee will
hear Mr.. McKenna again tomor.
row and then will question Clyde
L. Powell, who was suspended as
assistant FILA commissioner In
charge of rental housing when
(See HOUSING. Page A-6)