Evening star. [volume] (Washington, D.C.) 1854-1972, 1959-07-16
This One Dies Hard

The So-called conflict of interest in
the Dixon-YateS case has been one of
the hardest issues of these times. When
ever 1t seemed to be breathing its last,
some politician would rush forward and
revive it generally as a weapon with
which to belabor a political target, as,
for example, in the recent case Of Lewis
L. Strauss.
At last, however, this Dixon-YateS
issue, about which so many people who
know so little have talked so much, may
have been finally laid to rest. The Court
of Claims, in 3-to-2 decision, has held
that there was mot the slightest conflict
of interest" in the activities of Adolphe
Wenzell in this matter, and that the
Federal Government must pay over $1.8
million in damages to the Dixon-Yates
combine for unjustly canceling a con-
tract to build power station in the
Memphis area.
There is not space here to review
the tangled history Of the Dixon-Yates
affair. The essential point is, however,
that the Government engaged Wenzell
as conSultant, knowing perfectly well
that he was employed by a Boston firm
which might market some Of the fnanc-
ing bonds if the power station should be
built Nevertheless, when the city Of
Memphis decided to build its own power
station, thereby wiping out any need for
the Government plant, the latter sought
to cancel the contract on the ground
that Wenzell'S activities, Of which it was
fully aware, amounted to conflict of
interest.
The majority opinion was written by
Judge Madden and joined in by Judge
Laramore, also of the Court of Claims,
and Federal District Judge Bryan of
Alexandria, who was sitting by deSigna-
ton. 1t was sharply critical of the Gov
eminent, as indicated by the following
excerpts:
There is. it seems to us, something
essentially cynical about the Govern
ment'S defense. The Government
urges, in effect, that the doctrine which
1t calls to its defense is a prophylactic
generalization which must be applied in
cases of honest transactions in order to
keep it available and effective in cases
OF dishonest transactions. In this case
the actor for the United States was the
Director of the Budget, acting immedi-
ately under and on behalf of the Presi-
dent of the United States What he did
was done legally. honestly and with COM
plete fidelity to the interests of the Gov
eminent. We do not see in this case
before us an instance in which the Gov
eminent needs, as additional protection
against the honest acts of it's highest
omclals dlaphanouS cloak of immunity
woven from an asserted vague and I'M
defined public policy.
In Short said the court, the Govern
ment at all stages knew what it and
Wenzell were doing, and it cannot now
tear up its contract and make the Dixon
Yates combine take the rap.
From this ruling, of course, the Gov
eminent has right of appeal to the
Supreme Court. The strong dissents by
Chief Judge Marvin Jones of the Court
OF Claims and retired Supreme Court
Justice Reed, also sitting by designation,
may persuade 1t to do so. In the mean
time, however, there should be less ir-
responsible shouting about this alleged
conflict of interest. For now that the
Court of Claims has given Mr.. Wenzell
a clean bill of health, such talk becomes
a little risky,