Mr. TOLAND. This is $99-$100 less the tax. Mr. TOLAND. When were you first advised as to this bonus? Mr. YOXTHEIMER. What was the amount of that? Mr. TOLAND. $100, less $1 for social-security taxes, dated December 20. Mr. YOXTHEIMER. The Christmas bonus was really $1,100. Mr. TOLAND. $1,100? Mr. YOXTHEIMER. Yes, sir; that is right. Mr. TOLAND. One check of $990 and one check of $99? Mr. YOXTHEIMER. I think that is the way it was made out. Mr. TOLAND. So that during the month of December you received $11,000 in bonuses, plus your salary of $300, is that correct, less deductions for social security? Mr. YOXTHEIMER. Yes, sir. Mr. TOLAND. And you can't tell the committee that in 46 days that you were employed there, from the 13th day of November to the 29th day of December, what services you rendered that were outstanding that would warrant any such bonus of this kind, is that right? The CHAIRMAN. How many days had you been working there? The CHAIRMAN. How many days had you been working there, or how many months working there before you received this $11,000 bonus? Mr. YOXTHEIMER. That would be two months and a half. Mr. TOLAND. No, 46 days, Mr. Chairman. The CHAIRMAN. I am asking the witness. The witness is under oath. Mr. YOXTHEIMER. Pardon me, that is correct. The last part of November and December; it would be a month and a half. Mr. CHAIRMAN. And in a month and half after you had been employed by this company, they gave you a bonus, including your Christmas bonus, of $11,000, is that correct? Mr. YOXTHEIMER. That is correct, yes, sir. Mr. TOLAND. In addition to your salary in the months of January, February, and March of 1942, at the rate of is your salary still $3,600 a year? Mr. YOXTHEIMER. No, sir; my salary has been increased. Mr. TOLAND. When was it increased? Mr. YOXTHEIMER. It was increased on, I believe, December 1 to $4,200. Mr. TOLAND. Isn't it a fact that the salary you started with the company was not $3,600 but was $3,900? Mr. YOXTHEIMER. No; $3,600 I think is correct. Mr. TOLAND. You figure $179.58 twice a month and see what that figures out. Mr. YoXTHEIMER. What is the date of that check? Mr. TOLAND. On November 29 you received a check for $179.58; on December 15 you received a check for $175; on December 20 you received a check, the bonus for $100; on December 20 you received $1,000 bonus; on December 31 you received $175. Now, $175 twice a month Mr. YOXTHEIMER (interposing). I started in at $3,600, as I recall it. That was the salary that I started at. Mr. TOLAND. Now, it is $4,200, is it? Mr. YOXTHEIMER. It is $4,200, but there was a raise in there shortly after I started, which you can get much better from the records. It was a $600 raise, as I recall it, and retroactive back to, I believe, the 1st of December. That is as near as I recall. Mr. TOLAND. What is your present salary now? Mr. YOXTHEIMER. Yes, sir. The CHAIRMAN. There was no need for you to keep up with your salary in view of these bonuses, was there, and therefore you can't remember? Mr. YOXTHEIMER. I have nothing to say on that. It is the amount of money that was offered to me. Mr. TOLAND. You wouldn't refuse Santa Claus when he hands it out, would you? Mr. YOXTHEIMER. Would you? Mr. TOLAND. Yes, I would. How many bonuses have you received during the months of January, February, and March of 1942 and the amount? Mr. YOXTHEIMER. I have received none. Mr. TOLAND. I show you what purports to be your pay-roll record and direct your attention to the entry of $1,320 on the 5th day of March of this year Mr. YOXTHEIMER (interposing). Correction. Mr. TOLAND. And ask you what that was? Mr. YOXTHEIMER. That is right, that was a bonus. Mr. TOLAND. Your memory is short, isn't it. What was that for? Mr. YOXTHEIMER. I am very sorry. Mr. TOLAND. You identify that, do you not, as the official record of the company? Mr. YOXTHEIMER. Yes, sir. Mr. TOLAND. I offer it in evidence. (Pay-roll record of Harry E. Yoxtheimer, No. 284-16-6646 was received in evidence, marked "Exhibit No. 16" and is printed in the appendix of this volume.) The CHAIRMAN. What month? Mr. TOLAND. March 5th, just this month. That is all. I have no more questions. The CHAIRMAN. Any question by members of the committee? Mr. COLE. Mr. Chairman, I think it might be of interest to learn what the witness did with relation to Wright Field from the time he first started to work for the company, if anything. Mr. TOLAND. Will you answer Mr. Cole's question? I want to get it correct. I'll ask, since November 13, 1941, have you appeared at Wright Field on behalf of Jack & Heintz, Inc., or have you appeared before any Government officer in Cleveland or in any other city with regard to, or in connection with any of the contracts that they may have? Mr. YOXTHEIMER. No, sir. Mr. TOLAND. You deposited this money in your savings account, did you not? Mr. YOXTHEIMER. Yes, sir. Mr. TOLAND. Did you report it in your income tax as of March 15 this year? Mr. YOXTHEIMER. Yes, sir; and I have evidence here of that. Mr. TOLAND. I would like to offer your bank accounts and ask you to look at them and see if those aren't photostatic reproductions of your bank accounts that members of the staff obtained in Cleveland and in Dayton. Mr. YOXTHEIMER. This is Central National. Mr. TOLAND. I would like you to look at them. We obtained them through subpena. Mr. YOXTHEIMER. If this is a photostat of the bank records, it is correct, and I will say that it is, because I know that their records would show the true condition. Mr. SUTPHIN. What does that amount to? Mr. TOLAND. Can you identify them? Mr. YOXTHEIMER. I can't identify them, but I know they are correct. Mr. TOLAND. You had accounts in those banks? Mr. YOXTHEIMER. That is right. Mr. TOLAND. Your name appears on the photostat reproduction, does it not? Mr. YOXTHEIMER. That is right. Mr. TOLAND. In connection with the bonus of March 5, did you have any conversation with anybody about that, or did it just come through the air, or did anybody tell you you were going to get $1,320? Mr. YOXTHEIMER. May I take a little time to look at these first? Mr. VINSON. Does this company have a contract with the Navy Department? Mr. TOLAND. They have contracts with the War and Navy to the extent of $56,000,000. Mr. VINSON. What officer of the Navy is in on this contract? Mr. TOLAND. I will bring that out and show for the benefit of the committee that the Navy Department tried to get this reduced. TESTIMONY OF CHARLES A. RANDALL, CHIEF INVESTIGATOR OF THE HOUSE NAVAL AFFAIRS INVESTIGATING COMMITTEE The CHAIRMAN. The evidence you shall give the House Naval Affairs Committee in this inquiry shall be the truth, the whole truth, and nothing but the truth, so help you God. Mr. RANDALL. I do. Mr. TOLAND. Your name is Charles A. Randall? Mr. RANDALL. Yes, sir. Mr. TOLAND. You are chief investigator of the House Naval Affairs Investigating Committee? Mr. RANDALL. Yes, sir. Mr. TOLAND. Pursuant to my instructions, you went to Bedford, Ohio, and investigated the records of Jack & Heintz, Inc.? Mr. RANDALL. That is right. Mr. TOLAND. You went to the various banks where the witness had accounts? Mr. RANDALL. Yes, sir. Mr. TOLAND. You obtained photostatic reproductions of his bank statements? Mr. RANDALL. Yes, sir. Mr. TOLAND. I hand you those and ask if you obtained those in the performance of your various duties, from the banks whose names appear on each of the photostatic exhibits? Mr. RANDALL. Yes, sir. Mr. TOLAND. I offer them in evidence. The CHAIRMAN. They may be received. (Photostatic copies of the bank statements of Harry Yoxtheimer were received in evidence, marked "Exhibit No. 17" and are filed with the committee.) Mr. COLE. At the time you first learned of the $10,000 bonus was it December 10, 1941? Mr. YOXTHEIMER. No; that is not correct. I think it was later on in the month when I first learned of the $10,000 bonus. Mr. COLE. My recollection was that Mr. Jack told you of the $10,000 bonus on or about December 10, but it was not paid to you until the end of the month. Mr. YOXTHEIMER. No; that is not correct. I didn't know about it until he handed me the check, and the check is dated the 29th. Mr. COLE. And the first you knew about the $10,000 bonus was the time the check was handed to you at the end of the month? Mr. YOXTHEIMER. That is right; yes, sir. The CHAIRMAN. As the assistant comptroller of the company, in the cost of the article, is this bonus charged against the cost of the article? Mr. YOXTHEIMER. Yes, sir. Mr. TOLAND. Did you, while you have been employed, or have you rather, communicated by phone or by letter with any official at Wright Field regarding any of the matters regarding Jack & Heintz with the Air Corps? Mr. YOXTHEIMER. I called Wright Field last month in reference to a change order that was in error. The change order was in error and had to be corrected. Mr. TOLAND. Have you communicated with anybody at Wright Field or the War Department in writing regarding any of the contracts? Mr. YOXTHEIMER. Not in regard to the contracts; no, sir. Mr. TOLAND. Have you been at the Carter Hotel at Cleveland at any time when any of the Government officers have been there? Mr. YOXTHEIMER. I have been at all their banquets. I don't know whether any Government-well, I did see Government officers there, but I haven't talked to any Government officers. Mr. TOLAND. Have you been there other than at the time the banquets were held at the Carter Hotel with Government officers or procurement officers of the Government? Mr. YOXTHEIMER. No, sir. The CHAIRMAN. Let me ask you this question. As the assistant comptroller, isn't it a fact the higher the cost, the less excess-profit tax you would have to pay? Mr. YOXTHEIMER. Yes sir. The CHAIRMAN. Therefore, this bonus of $10,000 that you got and your Christmas bonus of $1,100, goes into the cost of the articles that you contract to deliver to the Government, and if that cost is made higher, then the less excess-profit tax. you have to pay; isn't that correct? Mr. YOXTHEIMER. That is right. Mr. MAAS. Has the company received any additional advances or adjustments on their contracts since you have been there, and if so, will you tell us the circumstances? Mr. YOXTHEIMER. Yes; they have received several, including one from the Navy Department, which I had nothing to do with, and one of them was just recently for over $4,000,000; and another one was recently for $299,000, I believe; and I had nothing to do with their receiving the advance payments. In fact, a civil-service worker at Wright Field has nothing to do with the contractor receiving the advance. The contracting officer or Army officer has to authorize payment of an advance. All that the civil-service workers have to do is to carry out the detail work on making the advance. I guess you understand that. Mr. MAAS. Did you conduct any of the negotiations for your company relative to an advance or adjustment of a contract? Mr. YOXTHEIMER. No, sir; I did not. I didn't even help in preparing a supplemental contract. Mr. MAAS. What explanation did Mr. Jack give you when he handed you the $10,000 bonus? Mr. YOXTHEIMER. He said that he knew that I was loyal to him, and I had showed by my work there that I was going to be a loyal employee, and he wanted to show me he appreciated it by giving me a bonus. Mr. MAAS. That was all the conversation that took place relative to the bonus? Mr. YOXTHEIMER. It was very short, and while I don't remember the exact words, that is the substance of it. The CHAIRMAN. You don't remember all the details when a man is giving you $10,000? Mr. YOXTHEIMER. Those are the details as I explained it there. The CHAIRMAN. Did he tell you that the purpose was to evade the excess-profits tax? Mr. YOXTHEIMER. Absolutely not. The CHAIRMAN. But, as a matter of fact, the higher you run your costs, the less your excess-profits tax is, isn't that right? Mr. YOXTHEIMER. Listen, gentlemen, there is no bit of truth in that. Mr. Jack has told me time and time again that he doesn't want to do anything at all that is wrong or that he shouldn't do, that he has no right to do. The CHAIRMAN. That may be true, but we will let the tree be known by the fruit it bears. We will let that be determined by the facts. Do you think you earned $10,000 bonus in 43 days? Just answer the question. Do you think you had earned it? Mr. YOXTHEIMER. I don't think The CHAIRMAN (interposing). You can answer it, you know. Mr. YOXTHEIMER. No; I don't. The CHAIRMAN. Exactly; that is an honest answer. Of course, you hadn't earned $10,000 bonus in 43 days and you didn't earn a bonus of $1,000 for your Christmas bonus, did you? Mr. YOXTHEIMER. No, sir. Mr. MAAS. May I ask one more question? |