Evening star. [volume] (Washington, D.C.) 1854-1972, 1958-09-21

AcJ. some experts say lLs on
poorly drafted laws to clear
Congress In a long time.
The law is based on a sound
principle--that public exposure
Of the terms and financial OPP
erations of employe health
welfare funds will serve to curb
corruption and safeguard the
money for intended bene-
flciaries.
But there is grave doubt,
shared by Mr.. Eisenhower
about how well the law carries
out the principle.
Hazy Provisions
Administrators of such plans,
employers for the most and la
bor-union officials. are required
to file reports. But it's hazy
exactly what they're supposed
to file and what happens II
they don't.
There's not much doubt an
effective regulatory law is
needed About IS million peo-
pie. workers and their families,
have a financial stake in the
various plans, estimated to be
worth well over $50 billion and
growing fast.
A Senate committee headed
by Senator Paul Douglas
Democrat of Illinois, in hear
ings that pre-dated the l957-5S
labor racketS disclosures, turned
up many welfare fund frauds
One alone amounted to a mil
lion dollars.
A bill passed by the Senate
was fairly strong, empowering
the Secretary Of Labor to in
vestigate suspected frauds and
bring prosecutions. The new
law is a House version passed in
the closing days Of Congress
and accepted by the Senate.
In signing the legislation into
law. Mr., Eisenhower said about
the only thing good he could
say for 1t is it established a
precedent of Federal response
bility in this area. Otherwise
he said:
THE chaos that will result is
obvious -. (the Government)
for all practical purposes (is)
powerlesS to uncover abuses.
There is no provision for deal
ing directly with the most
fragrant abuses, such as en-
bezzlement and kickbacks, once
they are uncovered.
Extensive Amendment
"Yet this is certainly the
kind Of protection that the
benefciaries and the public
have a right to expect. If the
bill is to be at all effective, it
will require extensive amend
ment at the next session Of
Congress"
The law, effective January
l, requires two types of reports.
One is a description of the
plan, the other an annual fin
ancial report.
The description report, due to
be filed before next April l, is
to include data on the admins
traitors or trustees of such a
plan, the benefits provided, how
1t is financed, and claim and
appeal procedures. The descr1p-
ton needs to be filed only once,
but any changes also must be
reported.
The annual reports are to
be filed within 100 days. four
months, after the end of the
funds calendar or fiscal year.
The Labor Department is in
clined to think that plans oper-
ating on a calendar year basis
won't have to file their first
financial reports until May
1860, but there's no official
ruling yet on this.
The annual report is sup
posed to include total en-
ployer and employe contribu-
tions, total benefits, number Of
employees covered, summary
statement of assets, liabilities,
receipts and disbursements;
salaries, fees and commission
paid and to whom and for
what purpose.
Other data, such as the ma
ture Of investments, experience
records, and actuarial assump-
tons, also are required to be
filed. The Presidents comment
was that data can be Jumped
together in the reports to con-
ceal many abuses.
Another loophole, in the