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there, or advertising up there, and they seem to think that they could take action on a felony charge on him for what he has been doing. So I don't know what that will pan out into.
If they do something on a felony charge, then we would be able to revoke his broker's license on that.
He does advertise that he is a member of the Indianapolis Chamber of Commerce, and we got a statement from them that he is, or was, at that time. This isn't dated. It came into our office on March 3, and said:
Since investments of this type in question should be investigated thoroughly by those who risk their money, we suggest you write to the U.S. Department of Commerce for their free publication on information of interest to prospective investors in Brazilian land.
Then they added a postscript: This is a formal letter we have used in the past. Our inquires date back to 1961, and we keep copies of all number 36 last month, and have averaged between 30 and 40 each month during 1965. We are not using this form any more, as a new letter is being drafted, in the event we cancel their membership.
So I don't know whether that has been canceled or not. I have nothing further on that.
At the time, I talked to Mr. Selig on the phone, he told me that someone in Florida bought a part of this tract, or one of these tracts of land off of him, and they immediately offered it for $1,750 an acre, and he thought the reason that he was in trouble in Florida was the fact that they were trying to get rid of that land they had bought, rather than somebody buy his at $1 an acre or $1.50, or whatever he was selling it for.
Senator MONDALE. He was too good a competitor.
Mr. DICKSON. It seemed to be two dealers in conflict with each other there on that.
That is about all of the information I have on Selig Bros.
I did have a couple of magazine ads here on real estate, which enters into the mail sales part of it.
Senator WILLIAMS. We would like to have those for the files.
Mr. Dickson. OK, you may have those, and we have received quite a bit of correspondence proper and pro and con on Meadowland Ranches in Oregon, which, I think, was up this morning.
Senator WILLIAMs. Thank you, we would like that for the files, too. Mr. DICKSON. I have received quite a handful here from both sides of that argument. Do you want those in the file?
Senator MONDALE. If we might.
Mr. DICKSON. I would like to have those back when you get through with them.
Senator MONDALE. Mr. Dickson, I believe you were here this morning. I know you are familiar with this problem. Do you have any views to present on the desirability of legislation, such as that embodied in S. 2672 ?
Mr. DICKSON. I am definitely in favor of some form of legislation to fill up the gap between what the States can do and what they can't.
Senator MONDALE. As I understand it, in Indiana you do not have legislation, as yet, which permits you to protect the purchasers in your State from purchasing these lots ?
Mr. DICKSON. The only thing we have is a rule of the commission that land of a promotional nature must be approved by the commission through the broker offering, but that doesn't control anyone who isn't offering it through a licensed broker in the State of Indiana.
Senator MONDALE. So, if they are soliciting by telephone, from outside the State, or through the mails, or through people who are not licensed, you have no control?
Mr. DICKSON. No control whatever. Senator MONDALE. Is there quite a bit of this promotion going on within Indiana today?
Mr. DICKSON. Yes, sir, and there will be another outbreak of the fair-circuit solicitors now before long, the people who go around to different fairs, set up a tent, and offer free TV, or something, to get them to register for that so they can get their names and addresses for mailing lists. They will use them then, and tell them they have won a free lot. They get out there and after they scrape up the maybe to go 1,500 miles or 2,000 miles to look at it, and it is too smail to do anything with, and something of the kindbut we have another one on down the street and we will sell it to you for $5,000, where the closing costs may be going to be $69, or something on that small
Senator MONDALE. Have you seen several instances of this freelot promotion ?
Mr. Dickson. This happens every summer, during fair time. They are out and go, and, in fact, they are in and out before you even know they are there, most of the time, and you can't catch them.
Senator MONDALE. I gather you can't reach them. They might be technically defying your brokerage law, but they are fly-by-night operators who move in and out
Mr. Dickson. You can't do anything with them, if you can't catch them in the State.
Senator MONDALE. We have a promotion in which the promoter sent thousands of letters out, indicating to each recipient that they had been selected, they had won this opportunity to obtain this belowcost lot, and all they had to do was present themselves with that letter.
Well, they took the names out of a telephone book, that is how they had been selected. One of the lots was 45 degree angle, and worthless, and, of course, then they resort to what I call "switch-bait.' They get them off to one lot, which is not a bargain offer on the other property.
Thank you very much, Mr. Dickson. We appreciate your testimony. (Mr. Dickson subsequently supplied the following information :)
JUNE 30, 1966. Mr. T. C. DICKSON, Administrator, Indiana Real Estate Commission, Indianapolis, Ind.
DEAR MR. DICKSON: * *
In reviewing the hearing record, I came across two matters which may call for additional commentary :
1. You described the interest of the New York Department of State in your applying Rule No. 10 of Indiana law to the Selig operation. We'd be interested in the outcome of your discussions with the New York officials.
2. You predicted that there would be “another outbreak of the fair circuit solicitors now before long." If you encounter any such promotions, we would very much like to bear about them.
HARRISON A. WILLIAMS, Jr.
STATE OF INDIANA REAL ESTATE COMMISSION,
Indianapolis, July 6, 1966. Hon. HARRISON A. WILLIAMS, Jr., U.S. Senate, Washington, D.C.
DEAR SENATOR WILLIAMS : In further reference to your letter of June 30th, item 1:
Rule 10 of the Indiana License Law states that Indiana brokers who propose to engage in sales of a promotional nature of property located outside of Indiana must first receive approval of the Commission for the offering.
The Attorney General's office in New York wanted to know Mr. Selig's Brazillian land had been approved. It has not been approved because, (1) he has not filed a request for approval, (2) Mr. Selig has advised this office that he is the owner of these tracts of land in Brazil and therefore is acting as a principal in the transaction and not as a broker and under these conditions would not be within the jurisdiction of our law.
We will advise your office on any fair circuit solicitors we find, but we only have one investigator for the State and our efforts in chis field are rather limiti d. Yours very truly,
T. C. QUICKSON, E.recutive Secretary.
JULY 13, 1966. Mr. T. C. DICKSON, Erecutive Secretary, Indiana Real Estate Commission, Indianapolis, Ind.
DEAR MR. DICKSON : Many thanks for the additional information included in your letter of July 6. We appreciate your continuing help.
We have heard from Mr. Selig in recent days. He says, among other things, that he has sold land within Indiana, thus contradicting a statement you made at the hearing. He also says that he has full title to all land he has offered for sale.
We would appreciate any additional information you would care to give on these two matters. Sincerely,
HARRISON A. WILLIAMS, Jr.
STATE OF INDIANA,
Indianapolis, July 18, 1966.
DEAR SENATOR WILLIAMS : In reference to your letter of July 13th, regarding the above captioned selling Brazillian land in Indiana. I believe the testimony was that so far as we knew he had not offered it in Indiana. There is a definite possibility that this could have been done without our knowledge.
Mr. Selig also advised us that he held title to the land he was offering which excludes him from the provisions of our license law as he is acting as a principal and not in a brokerage capacity.
From the information we have been able to gather the question is not who has title to this type offering, but how good is the title. It could be a clear title or it could be a faulty one. Trusting this clarifies your questions. Yours very truly,
T. C. DICKSON, Executive Secretary.
Senator MONDALE. Mr. Alan Emlen, chairman of the Realtors' Washington Committee, National Association of Real Estate Boards.
STATEMENT OF ALAN L. EMLEN, CHAIRMAN, REALTORS' WASH
INGTON COMMITTEE, NATIONAL ASSOCIATION OF REAL ESTATE BOARDS; ACCOMPANIED BY JOHN C. WILLIAMSON, DIRECTOR, DEPARTMENT OF GOVERNMENTAL RELATIONS
Mr. EMLEN. Mr. Chairman, I am accompanied by Mr. John C. Williamson, who is secretary counsel for our committee and for our association.
Senator MONDALE. Will you proceed?
Mr. EMLEN. Mr. Chairman, my name is Alan L. Emlen. I am a realtor engaged in the business of real estate brokerage in Philadelphia. I appear here as chairman of the Realtors' Washington Committee of the National Association of Real Estate Boards.
Our association consists of 1,520 local boards of realtors with a membership of 83,693. I am here to testify in opposition to S. 2672 which would require certain subdivision developers selling land in interstate commerce to register with the Securities and Exchange Commission.
Our association has long been concerned with the problems of fraudulent land sales. Such sales not only reflect on the real estate profession as a whole, but are a violation of articles 3 and 4 of our association's code of ethics, administered by our local boards and binding on our members.
Article 3 of the code provides that it is "the duty of a realtor to protect the public against fraud, misrepresentation or unethical practices in the real estate field.” Article 4 requires the realtor to ascertain all pertinent facts concerning property with which he deals in order to avoid concealment or misrepresentation of material fact.
Senator MONDALE. At that point, Mr. Emlen, do you have examples in which a member of your real estate association has been disciplined or removed from the association for resorting to fraudulent sales of property in interstate commerce of the kind we are dealing with?
Mr. EMLEN. In this specific application, I don't know whether I can think of
Mr. WILLIAMSON. Yes, sir. There are numerous cases and I recall some cases recently in New Mexico and Arizona where the board took disciplinary action against the realtors and there are cases that come up every year.
It is not part of my department, but I know
Senator MONDALE. Could you submit for the record such activities in which the board
Mr. WILLIAMSON. Yes, sir, we can do that. I am sure that we have cases on record where such disciplinary action has been taken. (The following letters were subsequently submitted for the record.) THE COLORADO ASSOCIATION OF REAL ESTATE BOARDS,
Denver, Colo., June 29, 1966. JOHN C. WILLIAMSON, Secretary-Counsel, the Realtors Washington Committee, Washington, D.C.
DEAR JACK: In reply to the telephone request from your office today with regard to actions, if any, taken in Colorado by boards of Realtors against members allegedly violating laws and ethics in subdivision promotion activities I can answer to the best of my knowledge that I know of no such cases.
We had a few years ago a concerted campaign spearheaded by our Colorado association to stop what we felt were fraudulent practices by some operators coming into Colorado, and as a result we effected passage of a subdivision law of sorts.
However, no actions by any local board ethics committee, or any board as such have come to the attention of this office concerning the actions of Realtors. And we have many realtors engaged in subdivision developments throughout the state. With my best regards. Cordially,
PHIL E. BERG, Executive Vice President.
ARIZONA ASSOCIATION OF REALTORS, INC.,
Phoenix, Ariz., June 30, 1966. Mr. JOHN C. WILLIAMSON, Director, Department of Governmental Relations, National Association of Real
Estate Boards, Washington, D.C. DEAR JACK: With reference to land speculations in Arizona, I know of only one case where a Realtor was involved and he was expelled by his local board.
As I recall, in most cases they were out-of-state promoters who purchased and promoted their own investments. In such cases the individuals would not be required to obtain a broker's license.
With the one exception, I believe you will find that the record of Arizona Realtors during that period of time was favorable. Sincerely,
W. J. B. SCHIMFESSEL,
CALIFORNIA REAL ESTATE ASSOCIATION,
Los Angeles, Calif., July 1, 1966. Mr. JOHN C. WILLIAMSON, Department of Government Relations, Realtors' Washington Committee, Washington, D.C.
DEAR JACK: It has come to my attention, Senator Mondale of Minnesota wishes some information on violations by Realtors of the California Subdivision Law; and in order to accommodate his request, I contacted the chief assistant real estate commissioner, John E. Hempel, 111 Capital Mall, Sacramento, and was advised by him complaints in their department are not broken down to reflect in what area violations have occurred. In other words, they are unable to give us information on who violated the Subdivision Law of the State of California within the last few years without plowing through a lot of files, which at this time, they were reluctant to do.
It was my intention, after ascertaining the name of the violator, to then check CREA's roster to find out if the violator was a member of CREA and to find out was action, if any, was taken by the board of which he was a member.
This plan, however, broke down at its inception inasmuch as the Division of Real Estate of the State of California, could not furnish me with the names of the violators. Sincerely,
DONALD MCCLURE. Mr. EMLEN. Mr. Chairman, there are two or three, now that Mr. Williamson reminds me, but I would like also to say at this point, one of the problems here is that our association can only discipline its own members.
Senator MONDALE. That is right. Many times, and I think this is one of the problems here, I am glad you brought it up, one of the problems here is that operators who resort to the type of outrageous behavior that we have seen today, very often are not members of established associations such as this and they are difficult to reach through