Evening star., 1954-09-21
Sparkman Rumored
As Aiding Promoters
OF 'WindfaII' Profits
BY the Asseeiassd Press

INDIANAPOLIS, Sept. IL
Witnesses at q Senate committee
hearing have named Senator
6parkman Of Alabama as the
rumored source Of influence" in
Washington for Federal Housing
Administration approval Of mort
cages which gave nearly $2.5 mil
lion in "windfalr' profits te two
Alabama promoters.
The surprise naming Of the
1862 Democratic Vice Presiden-
tial nominee came yesterday as
the Senate Banking Committee
headed by Senator Capehart, Re-
publican, OF Indiana, opened
hearings into operations Of Mar
vim l.. Warner ana Joseph H.
Kanter.
The two men. starting in Birm-
ingham. Ala, in 1947. have built
and still own IL apartment house
projects six in Birmingham,
three in Cincinnati, two in st.
Louis and one in indianapolis.
Profited on Loan.
william Simon, committee
chief counsel, said Mr.. Warner
and Mr.. Kanter got the FILA to
underwrite mortgages totaling
$24.435,932 on the IL projects.
Actual cost Of building them, Mr..
Simon said, was $21,964 $50,
yielding a windfal profit of ST.
471.072.
Senator Sparkman's name was
brought into the record Of yes
terday's hearing in testimony by
James Swan. former acting eval-
uator for the Indiana FILA Of
fee.
Mr.. Swan said the late r. Earl
Peters, then State FILA admin
istrator. opposed granting FILA
sanction to a mortgage of nearly
$3.5 million sought by Mr.. War
ner and Mr.. Kanter to build the
Essex House Apartments here.
Claims Pressure"
Pressure from Washington"
was given by Mr.. Swan as the !
reason Mr.. Peters finally ap-
proved the mortgage. Under
questioning he then said it was
common knowledge" in the |
State FILA Office that Senator |
Sparkman was applying the
pressure, but that "as far as I |
know it was strictly hearsay."
Senator Sparkman is in Eu-
rope and could not be reached
for comment. In Washington |
his secretary. Ed H. Hyde. said:
I'VE never exerted any pres |
sure or influence in behalf of |
any one"
Mr.. Hyde added, though, that |
i've know Marvin Warner and |
Joe Kanter" and that his Office |
had contacted the FILA on &C.
casion to make appointments
for them. He said his Office had
done the same for other Ala i
banla builders. s
"That IS normal practice mi
this office and. Ii every other
Senator's ofice." Mr.. Hyde said
"It was strictly q constituents
Senator relationship. 's
Denies Discussion.
Mr.. Warner, while on the
stand himself, denied he had
eFer discussed the Indianapolis
pfoject with Senator Sparkman.
Senator Capehart told q
newsman later the committee
had no evidence involving Sem
ator Sparkman in the alleged
pressure" beyond the testimony
by witnesses at the hearings
that Senator Sparkman's name
was the one mentioned when
the subject was discussed in the
State FILA office.
sMr. Warner was questioned
closely by Mr.. Simon and Sena-
tor Capehart on his application
for FHA approval of the Essex
House mortgage and his answers
Brought out that most of the
$I75.000 cost of the land on
which 1t was built was paid for
out of the mortgage.
The committee counsel en-
phasizef that this was contrary
td FILA rules. It was done, he
said. by a complicated method
in, which the Warner-Kanter
firm issued redeemable stock to
pay for the land and then re-
deemed the stock after the mort
gage went through.
Partly Corroborated.
Mr.. Swans testimony that
Senator Sparkman's name fig
ured in reports of influence for
granting the loan was corrobor-